In today’s briefing:
- Tencent (700 HK): Expected Move on Profit Announcement and Option Insights
- MV Australia Equal Weight Index Rebalance: SIG, TNE Added; US$288m Trade
- HKBN (1310 HK): MBK Ups Stake Via VLN Conversion
- HK Connect SOUTHBOUND Flows (To 14 Mar 2025); Big Volumes, Big Net; Tech and Banks Still Leading
- Xiaomi (1810 HK): Overpriced Volatility Ahead of 2024 Results
- Xiaomi Earnings: Option Market Expectations, Past Performance and Hedge Opportunities
- Salesforce.Com Inc – Salesforce’s Growth Is Slowing—Can Agentforce Turn Things Around?
- Canon (7751) | The Cash Printer
- HSI Index Options Weekly (March 10-14): Flat Week but Still and Strong Relative Performer
- Intel (INTC.US): Exploring a Tough Journey. (III)
Tencent (700 HK): Expected Move on Profit Announcement and Option Insights
- Tencent (700 HK) / Tencent Holdings (ADR) (TCEHY US) is set to announce Annual 2024 Results on 19 March 2025.
- Options pricing implies a 4-6% move after earnings, significantly higher than historical patterns. From an options perspective, calendar spreads offer opportunities.
- Tencent‘s significant index weighting, around 8% in key Hong Kong indices, means its earnings has the potential to impact broader market performance.
MV Australia Equal Weight Index Rebalance: SIG, TNE Added; US$288m Trade
- Sigma Healthcare (SIG AU) and Technology One (TNE AU) will be added to the VanEck Vectors Australian Equal Weight ETF (MVW AU) at the close on 21 March.
- Surprisingly, there are no deletions from the index. The two inclusions, float changes and capping changes result in a one-way turnover of 5.6% leading to a round-trip trade of A$288m.
- There will be huge buying of A$1.2bn in Sigma Healthcare (SIG AU) at the same time from S&P/ASX 200 (AS51 INDEX) and related index trackers.
HKBN (1310 HK): MBK Ups Stake Via VLN Conversion
- China Mobile (941 HK) has made a pre-conditional HK$5.23/share voluntary Offer for HKBN Ltd (1310 HK). However, a possible separate Offer from I Squared continues to make the news.
- In an unusual move, MBK, via Twin Holding, has converted HK$970.5mn of VLNs, at a whopping HK$11.60/share conversion price, lifting MBK’s stake to 16.39% on a fully diluted basis.
- Speculation is rife that MBK provides an irrevocable to I Squared for its enlarged shareholding. Maybe. I still don’t see China supporting a U.S.-based infrastructure firm over an SOE .
HK Connect SOUTHBOUND Flows (To 14 Mar 2025); Big Volumes, Big Net; Tech and Banks Still Leading
- Gross SOUTHBOUND volumes dropped again somewhat but still high at HK$625bn. NET buying by SOUTHBOUND was HK$61bn which is HUGE.
- The flows here are still striking. >25% of the top 100 most liquid Southbound eligible stocks saw SOUTHBOUND buy more than 10% of weekly traded volume to March 12.
- A summary of important China-related stock news as I saw it this week is included.
Xiaomi (1810 HK): Overpriced Volatility Ahead of 2024 Results
- Xiaomi Corp (1810 HK) is set to announce 2024 results after the close on 18 March.
- Options markets imply a price movement in excess of historic averages, creating trading opportunities through calendar spreads and short straddles that capitalize on March’s elevated implied volatility.
- Xiaomi Corp (1810 HK) is a major constituent in key Hong Kong indices (HSI Index, HSCEI Index, and HSTECH Index). Its post-results move will likely impact the broader market.
Xiaomi Earnings: Option Market Expectations, Past Performance and Hedge Opportunities
- Xiaomi earnings are upcoming. We analyze what the options market is pricing and examine historical trends and tendencies.
- Historical earnings reactions show notable differences across quarters, with Q4 standing out for its downside risk.
- We outline a tactical hedge that minimizes jump risk while taking advantage of extended implied volatility.
Salesforce.Com Inc – Salesforce’s Growth Is Slowing—Can Agentforce Turn Things Around?
- Salesforce delivered a strong financial performance for fiscal year 2025, showcasing significant progress in its AI and Data Cloud initiatives.
- The company reported annual revenue of $37.9 billion, reflecting a 9% increase from the prior year, with fourth-quarter revenue reaching $10 billion—its first-ever $10 billion quarter.
- Subscription and support revenue grew by 10% in constant currency, indicating continued demand for its enterprise software solutions.
Canon (7751) | The Cash Printer
- Earnings Momentum in 2025 – Canon expects 5% revenue growth and 17% EBIT expansion this year, driven by high-margin segments like semiconductor lithography, medical devices, and network cameras.
- Aggressive Shareholder Returns – With ¥350 billion in planned buybacks and dividends in 2024, Canon’s 6.8% TSR and strong free cash flow offer a compelling value proposition.
- De-Risked Upside – 2025 guidance provides earnings visibility, while valuation suggests ~40% upside, supported by resilient end-markets and an under-leveraged balance sheet.
HSI Index Options Weekly (March 10-14): Flat Week but Still and Strong Relative Performer
- We look into whether long or short volatility strategies on the HSI have been the most effective.
- Implied volatility remained under pressure as muted trading and weak price action weighed on implied volatility.
- Despite finishing lower, HSI remained a strong relative performer among global indexes, particularly against SPX.
Intel (INTC.US): Exploring a Tough Journey. (III)
- Intel Corp (INTC US) has hired Mr. Lip-Bu Tan as the new CEO effective March 18th. He was formerly a board member of Intel before resigning in June 2024.
- The A18 technology node marks a new beginning for Intel Corp (INTC US), which is believed to be the new hope, but we approach it with caution.
- Intel Corp (INTC US) should focus on developing its own technology and also consider using Taiwan Semiconductor (TSMC) – ADR (TSM US) as an insurance policy.
Before it’s here, it’s on Smartkarma
Sign Up for Free
The Smartkarma Preview Pass is your entry to the Independent Investment Research Network
- ✓ Unlimited Research Summaries
- ✓ Personalised Alerts
- ✓ Custom Watchlists
- ✓ Company Data and News
- ✓ Events & Webinars
Unlock all research summaries