Investment Advisors, JL Warren Capital

Junheng Li

Investment Advisors

JL Warren Capital

JL Warren Capital LLC is a leading independent equity research firm focused on Chinese companies and listed multinationals in China. We employ a bottom-up research approach that takes great care to avoid the acquisition of material non-public information. Through investigative due diligence including channel surveys and interviews, our research helps clients to pinpoint the dislocations in the market.

Equity Bottom-Up

Topsports International Holdings / Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/nike-inc-cl-b" target="_blank" data-smartkarma-citation="entities:6658:1" rel="noopener">Nike Inc Cl B (NKE US)</a>  retail partners in China have been slashing orders. </li>
<li>We estimate that in FQ2 2022, NKE was down 10-15% YoY in mainland China (90-95% Greater China sales), second down quarter in last 5 years.  </li>
<li>China retail in December appears to be further weakening from previous months.  </li>
</ul>



Nike Inc Cl B (NKE US)  retail partners in China have been slashing orders. 
We estimate that in FQ2 2022, NKE was down 10-15% YoY in mainland China (90-95% Greater China sales), second down quarter in last 5 years.  
China retail in December appears to be further weakening from previous months.  


NKE China FQ2 2022 Review: Double-Digit Decline in Retail & Wholesale: Excess Inventory, Weak Demand

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Event-Driven

<ul>
<li>It has been an interesting year and short interest has varied a lot across countries, sectors and stocks. We look at changes in Hong Kong, Japan, Korea and Taiwan.</li>
<li>Shorts have soared in Korea following the resumption of short selling, while short interest has increased in the other countries too.</li>
<li>Ping An Insurance and BYD had the biggest short covering, while China Merchants Bank saw the largest increase in shorts over the year.</li>
</ul>


It has been an interesting year and short interest has varied a lot across countries, sectors and stocks. We look at changes in Hong Kong, Japan, Korea and Taiwan.
Shorts have soared in Korea following the resumption of short selling, while short interest has increased in the other countries too.
Ping An Insurance and BYD had the biggest short covering, while China Merchants Bank saw the largest increase in shorts over the year.


Asia Pac IPO & Placement Research, China biotech, Aequitas Research

Ke Yan, CFA, FRM

Asia Pac IPO & Placement Research, China biotech

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Quantitative Analysis

<ul>
<li>We analyze the weekly Hong Kong Connect flows with our data engine.</li>
<li>The top stocks by inflows and outflows were tabulated for all market, HSCEI, mid cap and s/mid cap groups.</li>
<li>We highlight inflows into Kuaishou, Smoore, and outflows from Tencent and Wuxi Biologics.</li>
</ul>


We analyze the weekly Hong Kong Connect flows with our data engine.
The top stocks by inflows and outflows were tabulated for all market, HSCEI, mid cap and s/mid cap groups.
We highlight inflows into Kuaishou, Smoore, and outflows from Tencent and Wuxi Biologics.


Hong Kong Connect Flows: Kuaishou, Smoore, Tencent, Wuxi Biologics

HK/China Equity Long-Short

Osbert Tang, CFA

<ul>
<li>
<a href="https://www.smartkarma.com/entities/china-dongxiang-group-co" target="_blank" data-smartkarma-citation="entities:1068:1" rel="noopener">China Dongxiang Group Co (3818 HK)</a> posted Rmb748m losses for 1H FY22, primarily a result of investment losses. Nonetheless, we still consider it a very undervalued asset play.</li>
<li>Net cash reached Rmb1.4bn and investment portfolio is valued at Rmb7.7bn. This compared attractively relative to current market cap of just HK$4.3bn, or roughly equals to 61% discount.  </li>
<li>Its sports business will suffer in the near term as the rejuvenation progress is weaker than expected. However, this is not an important part and should not move CNDX much. </li>
</ul>



China Dongxiang Group Co (3818 HK) posted Rmb748m losses for 1H FY22, primarily a result of investment losses. Nonetheless, we still consider it a very undervalued asset play.
Net cash reached Rmb1.4bn and investment portfolio is valued at Rmb7.7bn. This compared attractively relative to current market cap of just HK$4.3bn, or roughly equals to 61% discount.  
Its sports business will suffer in the near term as the rejuvenation progress is weaker than expected. However, this is not an important part and should not move CNDX much. 


China Dongxiang (3818 HK): Disappointing Result, But Still a Very Undervalued Asset Play

Equity Analyst, LightStream Research

Oshadhi Kumarasiri

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

<ul>
<li>A host of Japanese apparel brands are starting to reject cotton produced in the Xinjiang region.</li>
<li>Even though Fast Retailing is unlikely to stake a strong stand against the Xinjiang cotton controversy, actions by other Japanese brands could still affect Uniqlo in the Chinese market.</li>
<li>The Uniqlo brand resonates with Japan and a boycott of Japanese brands in China could have severe consequences to Uniqlo’s Chinese business.</li>
</ul>


A host of Japanese apparel brands are starting to reject cotton produced in the Xinjiang region.
Even though Fast Retailing is unlikely to stake a strong stand against the Xinjiang cotton controversy, actions by other Japanese brands could still affect Uniqlo in the Chinese market.
The Uniqlo brand resonates with Japan and a boycott of Japanese brands in China could have severe consequences to Uniqlo’s Chinese business.


China’s Boycott of Western Brands Could Extend to Japanese Brands Amidst Xinjiang Cotton Controversy

China

ANTA Sports Products Limited designs, develops, manufactures, and markets sportswear, including sports footwear and apparel for professionals and the general public.

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Anta Sports Products (2020 HK)

NKE China FQ2 2022 Review: Double-Digit Decline in Retail & Wholesale: Excess Inventory, Weak Demand

NKE is likely to report Double-Digit YoY Decline in China Retail & Wholesale due to Excess Inventory, Weak Demand as a result of COVID, Slow...

JL Warren Capital

Asia: The Year in Shorts

There have been large increases and decreases in short interest on stocks across HK, Japan, Korea and Taiwan over the year. We look at the biggest...

Brian Freitas

Hong Kong Connect Flows: Kuaishou, Smoore, Tencent, Wuxi Biologics

We highlight HK Connect inflows into Kuaishou (1024 HK), Smoore (6969 HK), as well as outflows from Tencent (700 HK), Wuxi Biologics (2269 HK).

Ke Yan, CFA, FRM

China Dongxiang (3818 HK): Disappointing Result, But Still a Very Undervalued Asset Play

Bad result should have reflected in the share price, and China Dongxiang is still deeply undervalued with its share trading at 61% discount to the...

Osbert Tang, CFA

China’s Boycott of Western Brands Could Extend to Japanese Brands Amidst Xinjiang Cotton Controversy

A host of new Japanese apparel makers including Sanyo Shokai and TSI have recently become a part of a growing list of international companies to...

Oshadhi Kumarasiri

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