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Market Opportunities

Hong Kong, China, Asia & Overseas

Ageing population, declining birth rate and shrinking working population are the challenges ahead for China. This poses a big challenge to the medium term growth prospects of China’s and therefore Hong Kong’s economies. There are also concerns on potential domestic debt worsening and technology decoupling on which we will keep an eye. However, we see both risks and opportunities in this structural socio-economic transformation. 

China’s continued effort to enhance the quality of various industries and the persistent reforms of enterprises can help release the value of stocks.

The economies of China has slowed, however, Hong Kong, being one of the most important gateways connecting China with the rest of the world, is best positioned to benefit from the persistent growth of Asia. 

As regards overseas markets, many enterprises are growing. Diversification into overseas markets (as long as a specific investment portfolio permits) can help hedge against the geo-political risks of the China market and the risks associated with the change of her economic structure. For example, we have been actively investing in Japan since 2013.

Currently we foresee more investment opportunities in Japan due to corporate restructuring and earnings recovery. Japan may be able to turn around from an economic contraction which has lasted over two decades. In addition, the India market is worth looking at as it is expected to benefit from factors including the country's demographic trend, FDI inflow and booming of the manufacturing sector. Some of our investment portfolios have been increasing their exposure to regions outside Hong Kong and China.

Value Investment & Catalysts

A huge number of mid caps and small caps are not covered by brokers or institutional investors. Deep value is always hidden in under-researched businesses with solid balance sheets and management with long-term vision.

In addition, corporate activities have been vibrant in the region given Hong Kong’s ready access to capital. Mergers and acquisitions, restructuring of business, asset injection, privatizations and rationalization of capital all give rise to our “catalysts-driven” investment approach.