First half 2016 performance: +1.44% (vs. -4.97% for the Hang Seng Index).
Positions added:
1) HSBC (SEHK:0005) - We believe that HSBC will be able to maintain is dividend payout unless conditions deteriorates significantly. We believe that the lower GBP due to the Brexit is a positive for the bank as it makes most of its profits in Asia while a significant portion of its costs is in the UK. Entry point at HK$46.30 per share.
2) Zhejiang Expressway (SEHK: 0576) - Overhang over the share price due to stock brokerages subsidiary, which filed for an IPO on the A-share market. The opening of A-share market IPO is a potential catalyst for the company. Entry point at HK$6.80 per share or 5.3x EV/EBITDA.
3) PICC P&C (SEHK: 2328) - Only listed pureplay P&C (non-life) insurance company in China with relatively short-tailed risks (motor vehicle is the largest segment, accounting for over 75% of premiums earned). Makes profit from both insurance (combined ratio 96.5%, RMB8.6 bn) and investment operations (RMB20.2 bn). Entry point at HK$13.56 per share or 1.5x P/B.