Safe to say Hong Kong and China equities are embracing more support and popularity into year end

Northbound Top 10 Names

Southbound Trading

• China traders managed to extend the net purchase streak – which started on 13-Nov – into the whole month of December despite unsettling development in the city casting doubts casted on the equity outlook. An equivalence of 41.3B HKD (5.31B USD) mainland capital was injected into the stock market which has seen declining volatility to 15.61 range from recent high reading of 20.04 in November.
• The city’s equity pricing gauge in Hang Seng index has also recorded a steady climbing trend from earlier 26,000 range in the first week of December to drastically challenge 28,500 level amid stronger HKD and seemingly easing political tension.
• Another reason to account for the strong buying demand from mainland traders may come from seasonal actions and the needs for yearend window dressing by fund managers seeking asset allocations.
• HSI climbed 7% in the month of December and gained an overall 9.07% in the 12 months of the year – marking the best 12-month performance since 2017. The index closed at 28,190 for the year and is trading at a PE ratio of 11 times on a trailing basis.
• Tencent remained the most traded southbound names by mainland traders due to the lack of domestic counterpart in H shares. The popularity of Tencent and the recent success of Alibaba’s secondary listing both gave compelling reasons to the exchange mulling more tech and internet names to follow fashion in the IPO plan.
• Biggest winner among HSI constituent names on a YTD basis is Sunny Optical which reaped in 93.82% gains in 12 months.
• HKD also picked up the stronger end of its 7.75-7.85 trading band on liquidity crunch following flagship IPO, a rally in the currency borrow rate amid seasonal factors driving investors to shore up cash in account.

Southbound Top 10 Names

HK Dec IPO recap

• JS Global Lifestyle (1691 HK) offers home improvement services for customers in Hong Kong and pride themselves as a global leader in high-quality, innovative small household appliances. They have their own R&D arm driving their own product development and a diversified product portfolio. The company has the largest market cap among the pool of IPO candidates in December and managed to maintain a 8.85% gain after 3 weeks of listing despite fleeting market sentiment. The new stock has once surged as much as 13.08% on 24-Dec – a week after its trading debut
• Alphamab Oncology (9966 HK) is a clinical-stage biopharmaceutical company focused on developing and commercializing innovative immuno-oncology and molecularly targeted drugs to address significant unmet medical needs in cancer treatment. Management strives to become the leading Chinese biopharmaceutical company by bringing innovative and differentiated oncology therapies to cancer patients worldwide. Since 2015, the company has been running an oncology-focused pipeline with a strategic emphasis on immuno-oncology (IO) combination therapies. Pipeline is said to carry both the scale and mix to enable a winning combination therapy strategy to develop one of the largest oncology combination therapy portfolios among its peers. This IPO name is another winning candidates among the newly listed in December with a price movement trading steadily at 30% gains over its subscription price
• XD Inc (2400 HK) is an entertainment content provider offering various types of online games for all age groups in China. The shares were trading at 6.8% gains at the close of trading debut but the price rally had not come into full action until the last trading week in December. To date, the shares has already booked over 71% gains. Online gaming providers remain one of the hottest area with enormous upside similar to Tencent in Hong Kong and Netease on Nasdaq. Companies with similar profile are said to be the traders focus of IPO and secondary markets in the months to come
• Venus Medtech Hangzhou Inc - H (2500 HK) develops and sells cardiovascular devices among other products including aorta, compression loading and conveying systems and pulmonary artery. The Group was founded in 2009 with primary focus on the design, development and commercialization of transcatheter heart valve products. It has developed a comprehensive product portfolio and owned an aggregate of 389 patents and patent applications in China and 100 issued patents and 136 patent applications in the US and EU. Share price has been trading lower with a downhill trend since marking its record high of $43.05 on listing date but are still standing well above its offering price of $33.00 with a 13.79% gain
• Poly Property Development H (6049 HK) is the property management arm of Chinese developer PDH (600048 SH) and provides property management services and offers pre-consultation services post-delivery evaluation and analysis. The company’s shares helped its IPO subscribers securing over 30% profit from its IPO price within less than 2 weeks of trading. The new stock generally receives buying interests from fund managers like Schroders along with supportive ratings from brokers who has knowledge in the space
• HKEx is discussing secondary listings with Chinese technology companies including Trip.com Group Ltd. and Netease after recent success in Alibaba’s return listing in Hong Kong. The exchange said it’s seeing a spike in inquiries about secondary listings from many Chinese firms after U.S. scrutiny of Chinese companies has intensified. Fair to say this will be the general direction of business where the city’s exchange will try harder to draw interests to

HK Jan IPO Outlook