Summary of Hong Kong Property Sector Research Industry Overview - **Industry**: Hong Kong Property Sector - **Research Firm**: UBS Investment Research - **Date**: January 2025 Key Investment Themes for 2025 1. **RMB Depreciation**: Expected negative impact on several companies, with scores ranging from -1 to -1 for most developers [3][3][3] 2. **Capital Recycling**: Positive outlook for companies like Kerry and Henderson, both scoring 1, indicating potential for share buybacks and other corporate actions [3][3][3] 3. **Corporate Actions**: Companies like Sino and Swire are expected to engage in corporate actions, scoring 1, indicating a proactive approach [3][3][3] 4. **Sustainable Dividend Yield**: Companies like Kerry, Henderson, and Sino are expected to maintain sustainable dividend yields, scoring 1, while others like Wharf and Hysan show negative scores [3][3][3] 5. **Benefiting from HK Residential Policy Support**: Most developers are expected to benefit from supportive policies, scoring positively [3][3][3] Company Ratings and Price Targets - **Top Rated Companies**: - Kerry Properties (Ticker: 0683.HK) - Buy, Price Target: HK$19.00, 26% upside - Henderson Land (Ticker: 0012.HK) - Buy, Price Target: HK$26.00, 16% upside - Sino Land (Ticker: 0083.HK) - Buy, Price Target: HK$10.50, 37% upside - SHKP (Ticker: 0016.HK) - Buy, Price Target: HK$90.00, 26% upside - **Least Preferred Companies**: - CK Asset (Ticker: 1113.HK) - Neutral, Price Target: HK$31.00, -2% downside - Wharf (Ticker: 0004.HK) - Sell, Price Target: HK$16.30, -25% downside [3][3][3] Market Forecasts - **Residential Market**: Expected to remain flat in 2025, with a cyclical downturn noted since 2022 due to rate hikes [9][10] - **Rental Trends**: Residential rent increased by 6% YoY in November 2024, indicating a recovery trend [14][14] - **Mortgage Rates**: Anticipated decline in HK new mortgage rates to 3.25% by end-2025 if the US Fed lowers rates [16][16] Economic Indicators - **Time Deposits**: HK$4 trillion in time deposits could be gradually released, impacting liquidity in the property market [19][19] - **Population Growth**: Strong inflow of talent expected to drive HK's population to over 8 million by 2030 [28][28] Additional Insights - **Mainland Buyers**: Interest from mainland buyers in HK properties is at a historical high, with children's education being a significant factor in purchasing decisions [44][44] - **Preferred Districts**: Wanchai, Kowloon City, and Central & Western are among the most preferred districts for property purchases [52][52] Conclusion The Hong Kong property sector is navigating a complex landscape with potential for recovery driven by supportive policies and demographic trends. Key players are positioned to capitalize on these trends, although challenges remain due to economic conditions and interest rate fluctuations.

Summary of Key Points from the Conference Call Industry Overview - The conference call primarily discusses the global rates market, focusing on the fiscal outlook in the United States, Canada, Europe, and the UK, as well as implications for monetary policy and investment strategies. Core Insights and Arguments 1. **US Fiscal Outlook**: The narrative around the US fiscal outlook has shown volatility, but there is skepticism regarding the bullish stance on long-end yields due to a structurally sticky deficit trajectory, which supports higher terminal rates over time [2][4][7]. 2. **Market Reactions to Labor News**: Labor market news is expected to be more consequential for market tone than fiscal risks in the near term, with the upcoming jobs report being particularly significant [2][7]. 3. **Canadian Economic Growth**: Recent GDP data indicates that Canada is growing below potential, with expectations for a 50 basis point cut from the Bank of Canada due to tariff risks and a growth-friendly reaction function [11]. 4. **European Central Bank (ECB) Policy**: The ECB's stance has shifted towards a more gradual approach to rate cuts, with recent comments suggesting limited room for aggressive easing. This has led to a rally in Bunds, which are viewed as undervalued compared to other European macro assets [12][14]. 5. **UK Monetary Policy**: The UK market is pricing in a continued richening of 2025 rates, with expectations for Gilt yields to fall to around 4% by year-end 2025, despite mixed signals from economic data [17][18]. 6. **Risks in OATs**: OATs are experiencing volatility due to political negotiations regarding the 2025 budget, with expectations for a wider deficit than government projections, leading to a recommendation for an underweight position in OATs compared to Bunds [15]. Additional Important Content 1. **Quantitative Tightening (QT) Risks**: The end of debt limit suspension poses challenges for accurately gauging reserve demand, complicating the QT endgame. The potential adjustment of the RRP rate is also discussed, which could impact repo rates and the economics of swap spreads [8]. 2. **Inflation Trends**: Market-implied inflation rates are drifting lower, which is boosting real rates. This trend is viewed as unsustainable, and there are recommendations to stay long on 5y Bunds with a revised target of 1.75% [14]. 3. **Global Yield Forecasts**: The forecast for G10 10-year yields indicates a range of expectations across different currencies, with the US expected to maintain a yield around 4.25% by the end of 2025 [27]. 4. **Investment Recommendations**: Specific investment strategies include buying 6m5y A/A+30/A+60 payer fly, receiving Jan 2025 FOMC OIS, and owning CORM5 in Canada, reflecting a cautious but opportunistic approach to current market conditions [25]. This summary encapsulates the key points discussed in the conference call, highlighting the fiscal and monetary dynamics across major economies and their implications for investment strategies.

Summary of Tongcheng Travel Holdings Ltd 3Q24 Earnings Call Company Overview - **Company**: Tongcheng Travel Holdings Ltd - **Ticker**: 0780.HK - **Current Price**: HK$17.70 (as of 19 Nov 2024) - **Price Target**: HK$19.00 (by Jun-25) [1] Key Industry Insights - **Industry**: Online Travel Agency (OTA) sector in Asia, particularly in China - **Market Context**: The company has shown a strong performance compared to the Hang Seng Index (HSI), with a 37% share rebound in the last three months, while HSI increased by 12% [2] Core Financial Highlights - **Revenue Growth**: Revenue increased by 51% year-over-year (y/y) to RMB 5.0 billion, exceeding market expectations by 3% [2] - **Core OTA Revenue**: Excluding the offline tourism segment, core OTA revenues grew by 22% y/y, indicating resilience despite tough comparisons [2] - **Profitability**: Non-IFRS net profit surged by 47% y/y to RMB 910 million, significantly above the previous record and consensus estimates [2] - **Net Margin**: Achieved a net margin of 18.2%, outperforming the consensus of 17% [2] Segment Performance - **Hotel Booking**: Grew by 22% y/y, up from 13% in the previous quarter [2] - **Transport Ticketing**: Increased by 21% y/y, compared to 17% in the previous quarter [2] - **Tourism Segment**: Offline tourism business showed low-single digit margins, impacting overall profitability [2] Key Concerns - **Cash Flow Issues**: The company reported negative cash flow, with net cash declining by RMB 1.4 billion to RMB 5.2 billion. This was attributed to negative cash flows across operations, investments, and financing, potentially reflecting seasonality in the offline tourism business [3] - **User Growth**: Monthly Active Users (MPU) remained flat at 44.2 million, slower than the 2% growth in the first half of 2024. Gross Merchandise Value (GMV) growth also decelerated to 2% y/y from 10% in the first half [6] Management Outlook - **Future Guidance**: Attention will be on management's comments regarding forward demand and sales & marketing (S&M) spending for the fourth quarter and fiscal year 2025 during the earnings call [8] - **Market Reaction**: Anticipated positive stock reaction unless unexpected comments arise during the call [9] Additional Notes - **Valuation Comparison**: Tongcheng's forward P/E ratio is 12-13x, compared to Trip.com’s 18x, suggesting potential undervaluation [2] - **Analyst Ratings**: J.P. Morgan maintains an "Overweight" rating on Tongcheng Travel, indicating confidence in the company's growth trajectory [1][2] This summary encapsulates the key points from the earnings call, highlighting the company's strong performance, concerns regarding cash flow, and future outlook.

Investment Rating - The report does not explicitly state an investment rating for the industry. Core Insights - The overseas video marketing landscape is undergoing a significant transformation, enhancing shopping experiences and enabling brands to expand globally. Video marketing is identified as a key tool for brand image building and value communication [3][4]. - Despite 73% of users preferring to search for products on social media, video ads have not significantly influenced overseas purchasing decisions due to low conversion efficiency and inadequate online shopping experiences. In contrast, offline stores provide a more memorable and personalized shopping experience, with conversion rates 7.2 times higher than online [3][4]. - The integration of video content marketing, user experience, and online shopping is crucial for improving sales performance in the online market. This integration can create a coherent and engaging shopping experience that stimulates consumer purchasing desire [3][4]. Summary by Sections Part 1: Overseas Video Marketing Revolution - Video has become the dominant content form, accounting for 82.5% of global internet traffic. In the U.S., daily social video viewing time has nearly doubled from 33 minutes in 2019 to 61 minutes in 2023 [9][10]. - 73% of consumers search for products and services through video, establishing a strong emotional connection with viewers. Video content is 1200% more shareable than text and link content combined [10][11]. - The younger generations, particularly Gen Z and Millennials, are leading the trend in video content consumption, with 58% of 18-34-year-olds watching videos daily [14][15]. Part 2: Addressing Marketing Pain Points - Relying solely on social media platforms for video content does not directly lead to user conversion. 40% of users believe Instagram videos have no impact on offline shopping decisions, while 60% acknowledge video content's significant influence on their purchasing decisions [20][21]. - The fragmented user experience on social media and the lack of trust in content hinder effective purchasing decisions. Brands need to create a seamless shopping experience that integrates content marketing and user interaction [23][30]. - Independent sites face challenges in effectively conveying brand essence and product advantages, often resembling static product displays rather than engaging platforms [26][27]. Part 3: Building a Growth Flywheel - The DTC model through independent sites is a core driver of profit growth, allowing brands to enhance customer lifetime value and profitability [33][34]. - Video marketing plays a crucial role in the user journey, influencing consumers from awareness to advocacy, thereby enhancing brand loyalty and engagement [35][36]. - The integration of video content with independent site value creates a robust business growth mechanism, driving user engagement and conversion rates [39][40]. Part 4: Comprehensive Upgrade of the Marketing Ecosystem - The report emphasizes the importance of creating an interactive and immersive shopping experience through video commerce, which can significantly boost conversion rates [42][43]. - Firework's Digital Showroom allows for continuous online product demonstrations, maximizing brand exposure and customer interaction [44]. - Interactive short videos enable users to shop seamlessly while engaging with content, enhancing the likelihood of immediate purchases [47].