At this obscure opportune moment
9. March 2026
Tian Xuan Zhou (Oliver)
Bachelors Student, New European College – Munich
Asia
Japan
Most definitely a good decision buying back into the names before the end of last week, the longer term bull case remains intact. Political continuity and reform momentum, particularly around shareholder returns and capital efficiency, lowered the equity risk premium and supported valuations. The big drop last Monday helped support this long term bull case, see it as a stress test, and the market did really well supporting this current level.
Mitsubishi Heavy Industries 7011 and IHI Corporation 7013. Definitely a good idea if not already bought into. Continuing from this defense super cycle, both recovered more than 10% already since Monday last week.
HK/China
Cathay Pacific 0293HK. Annual report released last Wednesday, Revenue for FY25 came in at 116.77 Billion HKD, +11.88% YoY. This is a 4% beat on consensus of 112.28 Billion YoY. Net income came in at 10.83 Billion HKD, +12.71% YoY, this was the more important one since consensus was around 8.81 Billion, which was -8.27% YoY. This prompted a dividend payment of .64 HKD per share. Management guided to a 10% growth in FY26, lower than the actual growth from FY24 to FY25, but considering this was due to the significant recovery from the pandemic. The elephant in the room is HK express, the low cost airline owned by Cathay Pacific, whom are still making a loss of around 996 Million HKD for FY25.
Considering the strong economic growth and increase in spending, not only in mainland China but also the improving Hong Kong economic data, the fundamental demand for flights should remain strong, so the guidance of 10% growth seems rather small. Not assuming that HK express will suddenly become profitable at all amid this strong economic recovery, the airline itself is still very much disliked by consumers.
Going back to the set of results, one small issue that stood out was pricing. Although demand is high and their planes and flights are getting filed, yield per passenger is low. Financially they are deleveraging very well since the end of the pandemic. So how will they plan to solve this problem?
They are already doubling down on a massive CapEx cycle, pledging 100 Billion in new investments, so expecting new aircraft and refurbished cabins, which they plan to reduce seating in the economy classes, not sure how this will improve yields, maybe a better economy class cabin to justify higher prices and reduce seats to increase route frequencies?
So expecting slower growth and focus on the margin numbers, especially FY26 Q1, with the current war in Iran and suspending any middle east routes until the end of April. This low P/E then becomes very attractive, considering Singapore Airlines is trading at 17x P/E and Cathay at 7x P/E. Seeing institution filed buying from the end of February and the start of MArch, this is also on the back of 12th of March, where Swire sold shares to JPMorgan and Morgan Staley at 11.711 HKD per share, buy.
ENN Energy Holdings 2688HK. Continue to hold. China now making energy security pledges to Taiwan if they reunify. Board meeting will be on March 27,where it will review and approve the full year results for 2025. According to a Daiwa Securities sector note, ENN Energy was named among top picks in the oil & gas segment, with expectations that oil and gas prices may remain elevated for longer amid broader risk reward dynamics. With share price weakened modestly over the past week, drawing renewed investor focus on valuation levels vs long term performance.
Xiaomi 1810HK. Up by around 12% from the 32 HKD level. An unusual but notable social meme emerged around an AI tool dubbed “Xiaomi miclaw” circulating online, reflecting broader chatter in China’s developer and AI communities about Xiaomi’s experimental AI projects. As for EVs, Xiaomi has set March 19 for the revamped SU7 EV launch, earlier than originally projected. The company is now halting first generation SU7 production after ~381,000 deliveries and is accelerating release of the next gen model. So aggressive EV deployment and rapid refresh cycles, alongside current price momentum, short interest remains high so I still really like this set up, buy.
US
The private credit black box. Steady income, low volatility and insulation from the daily swings of public markets, supposedly. However, recent results shows that they are just losing money and investors are asking for their money back. Blackstone, ~$3.7B withdrawn in Q1 2026, Blackrock paid out ~$620M, Morgan Stanley’s private credit had withdraw requests of ~10.9% of shares, Cliffwater about ~14% of their fund, Blue Owl has even temporarily halted redemptions entirely.
Across the $1.7 trillion private credit market, a growing number of funds are limiting withdrawals after a surge in redemption requests. The results are exposing the industry’s black box, since they are investing in private companies with no real information to the public.
Cliffwater, when questioned about their Ares fund which allegedly valued at $64.9 million fair value and cost $53.8 million, a $11 million unrealised profit. Should have been liquidated by June 30, 2025, suddenly now cost $98.6 million and was worth $111.5 million as of December 31st, with the unrealised profit increasing to $12.8 million. They answered that “it was an error as it was not updated for the conversion of the vehicle to an evergreen fund, which occurred in Q3 2025”
What?
From my understanding, they are merging funds, and marking assets higher with no reason, and just dodging the question since it is now an evergreen fund that has no liquidation date? Just weird.
As for the US names, mostly risk off, only holding the remaining of Palantir, Lam Research and Redwire, really good job last week to profit take and before the end of the week.
