To The Moon

Hi Tigers, I'm very honored and fortunate to be given the chance to share my personal views and opinions about the markets to a growing base of educated online investors here in Tiger. I hope that I can be a positive force on this platform through the analysis I provide given my extensive experience in the industry and personal connection with the Asian markets. I am the only Asia-based analyst at Stansberry Research and I have over 25 years of experience in the Asian markets. My educational background is in Economics and I started investing in the late 1990s during the Asian Financial Crisis. I was an investment analyst with BNP Paribas in Asia. I use a top-down strategy to identifying investment opportunities, looking at the macro fundamentals driving markets and then zeroing in on the right companies to benefit from these macro trends. I cover all sectors as I look for growth opportunities in the Asian markets where the center of world’s economic gravity is shifting towards. Stansberry Research is the largest independent financial research service of its kind in the world, geared towards helping enhance investor education and awareness globally. We have over 90k paid subscribers and 1M free subscribers worldwide. Below are some of my HK market observations on Macro economics of HK, expectations and risks reminder for the rest of 2023, also some specific industrial and star companies I'm watching. $HSI(HSI)$ $HS3 Technologies, Inc.(HSTH)$ Image Hong Kong has one of its best days of the year. Hang Seng China Enterprises Index ( $HSCEI(HSCEI)$ ) breaks out of its 6-month downward trend. But nothing at all about the simmering bull market now taking shape in Chinese equities. $Alibaba(09988)$ $Alibaba(BABA)$ $JD-SW(09618)$ $JD.com(JD)$ $TENCENT(00700)$ $Tencent Holding Ltd.(TCEHY)$ $Pinduoduo Inc.(PDD)$ $Baidu(BIDU)$ $BIDU-SW(09888)$ $Bilibili Inc.(BILI)$ $BILIBILI-W(09626)$ $CSI China Internet ETF(KWEB)$ $Global X MSCI China Real Estate ETF(CHIR)$ $Global X China Consumer ETF(CHIQ)$ $iShares MSCI China ETF(MCHI)$ Image I believe there's a lot of value to be found in Hong Kong right now. For China-focused HK equities, the opportunities are to be found in the oversold and hated corners of the market impacted by US-China geopolitics, and recovering segments of the retail industry that was battered during the pandemic. Retail sales have recovered significantly in mainland China following the exit from Zero Covid policy in December. It’s an encouraging sign because strength in consumer spending in the mainland will likely spill over to Hong Kong SAR upon a return of cross-border travel, which historical accounted for the majority of tourism revenue. Recall back to 2022, The Hong Kong market in 2022 faced its most challenging year since the 1997 Asian Financial Crisis and the 2008 Global Financial Crisis. The challenges were multi-faceted, with the pandemic impact on the economy, geopolitical tensions with the US, delisting fears for China stocks listed in New York, capital flight due to a strong US dollar, and a rising interest rate environment that impacted Hong Kong's important property market. There's also been some calls to short the Hong Kong dollar from some fund managers who are bearish on the peg in light of a widening rate gate as the Federal Reserve tightens. All have placed enormous pressure on Hong Kong equities despite their appealing valuations. The MSCI Hong Kong Index $iShares MSCI Hong Kong ETF(EWH)$ is now trading at forward P/E multiples of 12.7X, which is historically on the low end. At these levels, the market usually experiences a recovery in valuation back to its historical average of about 15X to 16X. Enter into 2023, Hong Kong is coming alive again and has so much to go before returning to its pre-pandemic, pre-NSL protests levels of economic activity. Companies like JD.com, Pinduoduo, Alibaba, and Meituan for China platform e-commerce, Yum China and Miniso for China physical retail/consumption, Chow Tai Fook and Luk Food Holdings for luxury/gold demand, and Trip.com for continued growth in travel demand in Greater China. These are companies that I view have underlying macro fundamentals working in their favor, which combined with more efficient operations geared towards enhancing profitability during the period of regulatory transition in mainland China will enable them to deliver substantive earnings growth in the coming years. The rest of the year carries significant risk when it comes to policy execution by global central banks, particularly the Federal Reserve. As the fight against inflation has yet to be won, the potential for further rate hikes will keep the Hong Kong market from aligning more with the improving fundamentals of mailand China's economy. • Hong Kong's real estate sector will continue to be under pressure from rising interest rates due to the HKD peg to the USD, but has substantial demand waiting in the sidelines from mainland Chinese buyers should prices decline. Chinese still view Hong Kong as a desirable place to invest in real estate given its more liberal and market-oriented policies. The continued cuts in mainland Chinese banks' deposit rates will also encourage more money to be invested by mainland investors in places like Hong Kong. • Meanwhile, the dual currency (RMB) counter in Hong Kong is gaining momentum, which will help eliminate the currency translation risk/expense for mainland investors accessing HK-listed stocks via the Stock Connect. This could have a material impact on the shares of companies able to launch RMB counters in Hong Kong to make them more attractive to mainland investors.