Global Emerging Market Equities, Propitious Research

Wium Malan, CFA

Global Emerging Market Equities

Thematic (Sector/Industry)

<p>This insight provides a summary of the key news developments impacting the largest countries and constituents of the Global Emerging Markets equity indices.  </p><p><strong><em>Companies mentioned this week:</em></strong></p><p><a href="https://www.smartkarma.com/entities/petroleo-brasileiro-sa-5cbcae17-0673-48c8-b792-98cd7ec49fb7" target="_blank" data-smartkarma-citation="entities:22692:1" rel="noopener">Petroleo Brasileiro (PBR US)</a>, <a href="https://www.smartkarma.com/entities/weibo-corp-adr" target="_blank" data-smartkarma-citation="entities:3826:1" rel="noopener">Weibo Corp (Adr) (WB US)</a>, <a href="https://www.smartkarma.com/entities/suning-commerce-group-co-a" target="_blank" data-smartkarma-citation="entities:9178:1" rel="noopener">Suning Commerce Group Co A (002024 CH)</a></p>

This insight provides a summary of the key news developments impacting the largest countries and constituents of the Global Emerging Markets equity indices.  Companies mentioned this week:Petroleo Brasileiro (PBR US), Weibo Corp (Adr) (WB US), Suning Commerce Group Co A (002024 CH)

Global Emerging Markets Weekly: 26 February 2021

Chief Economist

Diana Choyleva

Enodo Economics

Enodo Economics is an independent macroeconomic forecasting company that untangles complexity, challenges the consensus, and makes sense of the future. Our focus is on China – one of the most misunderstood economies in the world, but one of the most important to figure out.  Enodo’s chief economist, Diana Choyleva, has been analysing China for almost 20 years, while Enodo’s team boasts a combined 140 years’ experience covering China’s economy, politics and markets. 

Macroeconomics

<h2>China News That Matters</h2><ul>
<li>Xi declares complete victory over poverty</li>
<li>Get out and revitalise</li>
<li>Biden hunts alternative sources for strategic supplies </li>
<li>WHO needs plenty more Wuhan data</li>
<li>How much for five years’ housework?</li>
</ul><div class="content-remarks"><p>In my weekly digest China News That Matters, I will give you selected summaries, sourced from a variety of local Chinese-language and international news outlets, and highlight why I think the news is significant. These posts are meant to neither be bullish nor bearish, but help you separate the signal from the noise.</p></div>

China News That Matters
Xi declares complete victory over poverty
Get out and revitalise
Biden hunts alternative sources for strategic supplies 
WHO needs plenty more Wuhan data
How much for five years’ housework?
In my weekly digest China News That Matters, I will give you selected summaries, sourced from a variety of local Chinese-language and international news outlets, and highlight why I think the news is significant. These posts are meant to neither be bullish nor bearish, but help you separate the signal from the noise.

Poverty/ Rural/ US-China/ Covid-19/ Women

Global TMT analyst with Asia ex-Japan focus.

Mitchell Kim

Equity Bottom-Up

<p>As one of the rare comeback stories among the Asian Internet platforms, <a href="https://www.smartkarma.com/entities/vipshop-holdings-ltd-adr" target="_blank" data-smartkarma-citation="entities:1088:1" rel="noopener">Vipshop Holdings' (VIPS US)</a> share price rose 3x in the last 12 months (Figure 1). While the skeptics questioned whether the WeChat synergy would be sustainable, VIPS has answered the critics with robust results in the last three quarters, including the impressive 4Q20 results (Figure 3). </p><p>There is no argument about the fundamental argument thus far for VIPS shares’ resurgence considering the strong customer acquisitions partly due to the power of the WeChat and margin improvement as the management refocused on its core strength in apparel and shed the margin dragging logistics unit. However, chasing the stock at this price level is not for the faint-hearted. We noted that the stock is now trading at the highest forward P/E multiple based on FY2021 GAAP EPS since July 2018 (Figure 2).       </p><p>Having said that positive sentiment on the stock will likely persist in the near-term.  The management’s guidance of 45-50% revenue growth for 1Q21 (the guidance implies 19% YoY growth normalized) should provide the momentum and revenue growth will continue to be compared against the COVID-19 lockdown quarters.  The real growth test will come in 3Q21 when VIPS’ growth will be compared with the high customer growth which started in 3Q20. Decelerating growth could trigger a potential pullback, in our view.</p>

As one of the rare comeback stories among the Asian Internet platforms, Vipshop Holdings' (VIPS US) share price rose 3x in the last 12 months (Figure 1). While the skeptics questioned whether the WeChat synergy would be sustainable, VIPS has answered the critics with robust results in the last three quarters, including the impressive 4Q20 results (Figure 3). There is no argument about the fundamental argument thus far for VIPS shares’ resurgence considering the strong customer acquisitions partly due to the power of the WeChat and margin improvement as the management refocused on its core strength in apparel and shed the margin dragging logistics unit. However, chasing the stock at this price level is not for the faint-hearted. We noted that the stock is now trading at the highest forward P/E multiple based on FY2021 GAAP EPS since July 2018 (Figure 2).       Having said that positive sentiment on the stock will likely persist in the near-term.  The management’s guidance of 45-50% revenue growth for 1Q21 (the guidance implies 19% YoY growth normalized) should provide the momentum and revenue growth will continue to be compared against the COVID-19 lockdown quarters.  The real growth test will come in 3Q21 when VIPS’ growth will be compared with the high customer growth which started in 3Q20. Decelerating growth could trigger a potential pullback, in our view.

VIPS US: 4Q20: Commendable Reincarnation but Fully Priced

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

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 Capital Markets

<div>
<p>Bilibili plans to raise around US$3bn in its secondary listing in Hong Kong, as per media reports. The company is said to have filed confidentially in Jan 2021 and is aiming for a listing in March 2021.</p>
<p>We have covered the background of the deal in our earlier note, <a href="https://www.smartkarma.com/insights/bilibili-secondary-listing-early-look-will-probably-be-more-like-jd-and-netease" target="_blank" rel="noopener">Bilibili Secondary Listing Early Look - Will Probably Be More like JD and NetEase</a>.</p>
<p>Bilibili reported its 4Q20 results today morning. As these are likely to be the last set of results before the company goes in for its secondary listing, in this note we take a quick look at the results. </p>
</div>


Bilibili plans to raise around US$3bn in its secondary listing in Hong Kong, as per media reports. The company is said to have filed confidentially in Jan 2021 and is aiming for a listing in March 2021.
We have covered the background of the deal in our earlier note, Bilibili Secondary Listing Early Look - Will Probably Be More like JD and NetEase.
Bilibili reported its 4Q20 results today morning. As these are likely to be the last set of results before the company goes in for its secondary listing, in this note we take a quick look at the results. 


Bilibili Secondary Listing Early Look - 4Q20 Results Quick Note

<div><p><a href="https://www.smartkarma.com/entities/coupang" target="_blank" data-smartkarma-citation="entities:28425:1" rel="noopener">Coupang (CPNG US)</a> , the largest product e-commerce player in Korea, aims to raise around US$3bn in its US listing via a mix of selling primary and secondary shares. As per media reports, the company has earlier obtained investments from Sequoia, Softbank, Blackrock and Fidelity.</p></div><div><p>Coupang offers its 14.8m customers a wide range of owned-inventory selection. In addition, on its marketplace it also offers millions of SKUs sourced from over 200,000 merchants. Apart from normal e-commerce operation, it also provides its customers with: grocery offering, Rocket Fresh; logistics food delivery offering, Coupang Eats; and digital financial services, Coupang Pay.</p></div><div><p>I've covered various aspects of the deal in my earlier insights: </p></div><div><ul style="list-style-type: disc;">
<li>
<a href="https://www.smartkarma.com/insights/coupang-pre-ipo-the-positives-fast-growth-sticky-customers" target="_blank" rel="noopener">Coupang Pre-IPO - The Positives - Fast Growth, Sticky Customers</a>, </li>
<li><a href="https://www.smartkarma.com/insights/coupang-pre-ipo-the-negatives-horrendous-data-disclosures-including-no-mention-of-ott-launch" target="_blank" rel="noopener">Coupang Pre-IPO - The Negatives - Horrendous Data Disclosures, Including No Mention of OTT Launch</a></li>
<li><a href="https://www.smartkarma.com/insights/coupang-pre-ipo-fair-bit-of-competition-but-it-s-doing-better-than-most-local-peers" target="_blank" rel="noopener">Coupang Pre-IPO - Fair Bit of Competition but It’s Doing Better than Most Local Peers</a></li>
</ul></div><div><p>In this insight, I'll talk about our earnings forecast and thoughts on valuations.</p></div>

Coupang (CPNG US) , the largest product e-commerce player in Korea, aims to raise around US$3bn in its US listing via a mix of selling primary and secondary shares. As per media reports, the company has earlier obtained investments from Sequoia, Softbank, Blackrock and Fidelity.Coupang offers its 14.8m customers a wide range of owned-inventory selection. In addition, on its marketplace it also offers millions of SKUs sourced from over 200,000 merchants. Apart from normal e-commerce operation, it also provides its customers with: grocery offering, Rocket Fresh; logistics food delivery offering, Coupang Eats; and digital financial services, Coupang Pay.I've covered various aspects of the deal in my earlier insights: 

Coupang Pre-IPO - The Positives - Fast Growth, Sticky Customers, 
Coupang Pre-IPO - The Negatives - Horrendous Data Disclosures, Including No Mention of OTT Launch
Coupang Pre-IPO - Fair Bit of Competition but It’s Doing Better than Most Local Peers
In this insight, I'll talk about our earnings forecast and thoughts on valuations.

Coupang Pre-IPO - Earnings Forecast and Valuation

China

Alibaba Group Holding Limited provides online sales services. The Company provides internet infrastructure, electronic commerce, online financial, and internet content services through its subsidiaries. Alibaba Group Holding offers its products and services worldwide.

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Alibaba Group Holding (BABA US)

Global Emerging Markets Weekly: 26 February 2021

This insight provides a summary of the key news developments impacting the largest countries and constituents of the Global Emerging Markets equity...

Wium Malan, CFA

Poverty/ Rural/ US-China/ Covid-19/ Women

In my weekly digest, I will give you selected summaries, sourced from a variety of local Chinese-language and international news outlets, and...

Diana Choyleva

VIPS US: 4Q20: Commendable Reincarnation but Fully Priced

4Q20 results proved VIPS' rejuvenated growth is more sustainable than we thought. But the expected growth deceleration in 2H21 and expensive...

Mitchell Kim

Bilibili Secondary Listing Early Look - 4Q20 Results Quick Note

Bilibili plans to raise around US$3bn in its secondary listing in HK, as per media reports. The company is said to have filed confidentially in Jan...

Sumeet Singh

Coupang Pre-IPO - Earnings Forecast and Valuation

Coupang, the largest product e-commerce player in Korea, aims to raise around US$3bn in its US listing. The company has earlier obtained...

Sumeet Singh

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