Global Emerging Market Equities, Propitious Research

Wium Malan, CFA

Global Emerging Market Equities

Independent, Fundamental Quantitative Research

Propitious Research

Fully independent, fundamental and quantitative equity research, focused on companies in the Telecommunication, Media, Technology, Internet and Healthcare sectors in the Global Emerging Markets. Idea generation focused on Quality stocks, trading below their intrinsic Value, with sound Corporate Governance.

Quantitative Analysis

<ul>
<li>An overview (and output) of our machine learning-driven GEM screening model, which seeks to find the best medium-term long ideas within the top100 stocks in the MSCI GEM Index.</li>
<li>The model is based on 1) a quantitative multifactor screening model, enhanced by two AI Technology-based approaches; 2) a Deep Neural Network model, and 3) a Recurrent Neural Network model.</li>
<li>Developed over roughly 4 years and implemented in its current state for over 2 years, the model has a solid real-world alpha-generating performance track record, discussed in detail below.</li>
</ul>


An overview (and output) of our machine learning-driven GEM screening model, which seeks to find the best medium-term long ideas within the top100 stocks in the MSCI GEM Index.
The model is based on 1) a quantitative multifactor screening model, enhanced by two AI Technology-based approaches; 2) a Deep Neural Network model, and 3) a Recurrent Neural Network model.
Developed over roughly 4 years and implemented in its current state for over 2 years, the model has a solid real-world alpha-generating performance track record, discussed in detail below.


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.

Equity Bottom-Up

<ul>
<li>China just announced game approval for August batch. More games were approved in August compared to July and June.</li>
<li>Pace of China game approval continued to pick up albeit at a much slower pace than pre-tightening.</li>
<li>Both Tencent and Netease will be under increasing pressure as the duo continue to score zero in August, making it the fourth time with no games approved since resumption . </li>
</ul>


China just announced game approval for August batch. More games were approved in August compared to July and June.
Pace of China game approval continued to pick up albeit at a much slower pace than pre-tightening.
Both Tencent and Netease will be under increasing pressure as the duo continue to score zero in August, making it the fourth time with no games approved since resumption . 


Tencent/Netease: Increasing Pressure with Zero Approval in August Batch & Thoughts on Trading

Thematic (Sector/Industry)

<ul>
<li>The Global Emerging Markets weekly provides a summary of the key news and related developments impacting the largest countries and constituents of the Global Emerging Markets equity indices</li>
<li>
 Macro data points: South Korean GDP growth and inflation survey</li>
<li>
 Companies mentioned:<a href="https://www.smartkarma.com/entities/netease" target="_blank" data-smartkarma-citation="entities:29030:1" rel="noopener">NetEase (9999 HK)</a>, <a href="https://www.smartkarma.com/entities/mediatek-inc" target="_blank" data-smartkarma-citation="entities:772:1" rel="noopener">Mediatek Inc (2454 TT)</a>, <a href="https://www.smartkarma.com/entities/alibaba-group" target="_blank" data-smartkarma-citation="entities:28434:1" rel="noopener">Alibaba Group (9988 HK)</a>, <a href="https://www.smartkarma.com/entities/ant-group-co-ltd" target="_blank" data-smartkarma-citation="entities:24240:1" rel="noopener">Ant Financial Services Group (6688 HK)</a>
</li>
</ul>


The Global Emerging Markets weekly provides a summary of the key news and related developments impacting the largest countries and constituents of the Global Emerging Markets equity indices

 Macro data points: South Korean GDP growth and inflation survey

 Companies mentioned:NetEase (9999 HK), Mediatek Inc (2454 TT), Alibaba Group (9988 HK), Ant Financial Services Group (6688 HK)



GEM Weekly (29 Jul 2022): South Korea GDP; NetEase, MediaTek, Alibaba, Ant Financial

Overseas Chinese Equities, Aequitas Research

Ming Lu

Overseas Chinese Equities

<ul>
<li>Online game sales decreased for the first time in 1H22.</li>
<li>The main problem is the unstable policy of the new game license.</li>
<li>Big companies like Tencent and NetEase are seeking overseas markets.</li>
</ul>


Online game sales decreased for the first time in 1H22.
The main problem is the unstable policy of the new game license.
Big companies like Tencent and NetEase are seeking overseas markets.


Tencent (700 HK): Game Industry Decreasing for First Time and Turning to Overseas Market

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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/alibaba-group" target="_blank" data-smartkarma-citation="entities:28434:1" rel="noopener">Alibaba Group (9988 HK)</a> currently has a Secondary Listing in Hong Kong and is looking to become dual primary listed in Hong Kong and the U.S.</li>
<li>The main change will be inclusion in the Southbound Stock Connect program where mainland investors will be able to buy the stock.</li>
<li>
<a href="https://www.smartkarma.com/entities/alibaba-group" target="_blank" data-smartkarma-citation="entities:28434:1" rel="noopener">Alibaba Group (9988 HK)</a> is capped at 8% in the <a href="https://www.smartkarma.com/entities/hang-seng-china-enterprises-index" target="_blank" data-smartkarma-citation="entities:22900:1" rel="noopener">HSCEI INDEX</a> and is close to 8% of the <a href="https://www.smartkarma.com/entities/hong-kong-hang-seng-index" target="_blank" data-smartkarma-citation="entities:22899:1" rel="noopener">HSI INDEX</a>, there will be negligible impact on the dividend futures.</li>
</ul>



Alibaba Group (9988 HK) currently has a Secondary Listing in Hong Kong and is looking to become dual primary listed in Hong Kong and the U.S.
The main change will be inclusion in the Southbound Stock Connect program where mainland investors will be able to buy the stock.

Alibaba Group (9988 HK) is capped at 8% in the HSCEI INDEX and is close to 8% of the HSI INDEX, there will be negligible impact on the dividend futures.


Alibaba (9988 HK): Dual Primary Listing Implications

China

NetEase, Inc. is an Internet technology company that develops applications, services and other Internet technologies in China. The Company's core businesses consist of email service, web portal and online entertainment, including online gaming services. NetEase also offers online advertising, search, mobile applications and e-commerce.

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NetEase Inc (NTES US)

Screening for GEMs: August 2022

An overview (and output) of our machine learning-driven GEM screening model, which seeks to find the best medium-term long ideas within the top100...

Wium Malan, CFA

Tencent/Netease: Increasing Pressure with Zero Approval in August Batch & Thoughts on Trading

We analyzed the August batch of game approval. We note that Tencent and Netease continued to score zero in this batch, for the 4th consecutive...

Ke Yan, CFA, FRM

GEM Weekly (29 Jul 2022): South Korea GDP; NetEase, MediaTek, Alibaba, Ant Financial

The Global Emerging Markets weekly provides a summary of the key news and related developments impacting the largest countries and constituents of...

Wium Malan, CFA

Tencent (700 HK): Game Industry Decreasing for First Time and Turning to Overseas Market

Online game sales decreased for the first time in 1H22. The main problem is the unstable policy of the new game license. Big companies like Tencent...

Ming Lu

Alibaba (9988 HK): Dual Primary Listing Implications

Alibaba is looking to change its HK listing from Secondary to Dual Primary. This will make the stock eligible for Southbound Stock Connect. A...

Brian Freitas

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