Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

MSCI Emerging Markets Index / Technical Analysis

<p>The MSCI EM index (local currency) remains in an uptrend and is testing all-time highs set in January 2018 near 65,800; as long as the index is above 60,000 we are constructive from a price perspective.  China (<strong>CSI 300, MSCI China</strong>) continues to offer many attractive setups and accounts for the vast majority of today’s recommendations. Taiwan (<strong>TAIEX</strong>) continues to be worthy of an overweight within the EM universe, while South Korea (<strong>KOSPI</strong>) and India (<strong>SENSEX</strong>) display improving price and RS trends -- add exposure.</p>

The MSCI EM index (local currency) remains in an uptrend and is testing all-time highs set in January 2018 near 65,800; as long as the index is above 60,000 we are constructive from a price perspective.  China (CSI 300, MSCI China) continues to offer many attractive setups and accounts for the vast majority of today’s recommendations. Taiwan (TAIEX) continues to be worthy of an overweight within the EM universe, while South Korea (KOSPI) and India (SENSEX) display improving price and RS trends -- add exposure.

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Equity Capital Markets

Yum China Holdings  / Equity Capital Markets

<div><p><a href="https://www.smartkarma.com/entities/yum-china-holdings-inc-0533692c-6dae-4014-baa1-ed0b050638f2" target="_blank" data-smartkarma-citation="entities:29259:1" rel="noopener">Yum China Holdings Inc (9987 HK)</a> will commence trading in Hong Kong on Thursday, 10 September. <a href="https://www.smartkarma.com/entities/yum-china-holdings-inc" target="_blank" data-smartkarma-citation="entities:23677:1" rel="noopener">Yum China Holdings, Inc (YUMC US)</a> priced its Hong Kong secondary listing at HK$412 per share. Yum China raised net proceeds of HK$17,002 million ($2.2 billion).</p></div><div><div><div class="content-highlight"><p>Yum China priced its H-shares at a 4.9% discount to its ADS. In comparison, Alibaba, NetEase and JD.com priced their H-shares at a 2.9%, 2.0% and 3.9% discount to its ADSs, respectively. At the last close price of $52.32 per ADS, the H-share offer price of HK$412 implies a 1.6% premium. We believe that JD.com’s H-share will likely trade to a slight premium to the ADS on average, broadly similar to the last three secondary listings.</p></div></div></div>

Yum China Holdings Inc (9987 HK) will commence trading in Hong Kong on Thursday, 10 September. Yum China Holdings, Inc (YUMC US) priced its Hong Kong secondary listing at HK$412 per share. Yum China raised net proceeds of HK$17,002 million ($2.2 billion).Yum China priced its H-shares at a 4.9% discount to its ADS. In comparison, Alibaba, NetEase and JD.com priced their H-shares at a 2.9%, 2.0% and 3.9% discount to its ADSs, respectively. At the last close price of $52.32 per ADS, the H-share offer price of HK$412 implies a 1.6% premium. We believe that JD.com’s H-share will likely trade to a slight premium to the ADS on average, broadly similar to the last three secondary listings.

Yum China Secondary Listing: Trading Debut

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.

<div>
<p><a href="https://www.smartkarma.com/entities/yum-china-holdings-inc" target="_blank" data-smartkarma-citation="entities:23677:1" rel="noopener">Yum China Holdings, Inc (YUMC US)</a> raised around US$2.5bn in its Hong Kong secondary listing.</p>
<p>I have covered the deal background in:</p>
<ul>
<li>
<a href="https://www.smartkarma.com/insights/yum-china-hk-listing-early-look-relatively-bigger-deal-should-have-a-relatively-bigger-impact" target="_blank" rel="noopener">Yum China HK Listing - Early Look - Relatively Bigger Deal Should Have a Relatively Bigger Impact,</a> and</li>
<li>
<a href="https://www.smartkarma.com/insights/yum-china-hk-listing-relatively-bigger-should-offer-a-bigger-discount" target="_blank" rel="noopener">Yum China HK Listing - Relatively Bigger, Should Offer a Bigger Discount</a>.</li>
</ul>
</div>
<div>
<div id="annotable-executive_summary-2">In this insight, I'll talk about the deal dynamics and updates over the past week.</div>
<div></div>
</div>
<div></div>
<div>
<p><strong>Links to my previous notes on China ADRs secondary listing:</strong></p>
</div>
<div>
<ul style="list-style-type: disc;">
<li><a href="https://www.smartkarma.com/insights/huazhu-hk-secondary-listing-early-look-needs-the-cash-more-than-most-secondary-candidates" target="_blank" rel="noopener">Huazhu HK Secondary Listing - Early Look - Needs the Cash More than Most Secondary Candidates</a></li>
</ul>
</div>
<div>
<ul style="list-style-type: disc;">
<li><a href="https://www.smartkarma.com/insights/jd-netease-secondary-listings-what-to-do-with-the-adr-lessons-from-baba" target="_blank" rel="noopener">JD &amp; NetEase Secondary Listings - What to Do with the ADR? Lessons from Baba</a></li>
<li><a href="https://www.smartkarma.com/insights/jd-netease-and-other-secondary-listing-index-ftse-msci-hsi-and-hscei-impact" target="_blank" rel="noopener">JD, NetEase and Other Secondary Listing - Index (FTSE, MSCI, HSI And HSCEI) Impact</a></li>
<li><a href="https://www.smartkarma.com/insights/jd-com-hk-listing-early-look-getting-the-ball-rolling" target="_blank" rel="noopener">JD.com HK Listing - Early Look - Getting the Ball Rolling</a></li>
</ul>
</div>
<div>
<ul style="list-style-type: disc;">
<li><a href="https://www.smartkarma.com/insights/jd-secondary-listing-early-to-file-but-late-to-launch-puts-it-in-a-peculiar-position" target="_blank" rel="noopener">JD Secondary Listing - Early to File but Late to Launch Puts It in a Peculiar Position</a></li>
<li><a href="https://www.smartkarma.com/insights/jd-secondary-listing-behaving-better-than-netease-so-far" target="_blank" rel="noopener">JD Secondary Listing - Behaving Better than NetEase, so Far</a></li>
</ul>
</div>
<div>
<ul style="list-style-type: disc;">
<li><a href="https://www.smartkarma.com/insights/jd-secondary-trading-update-strong-demand-but-won-t-have-any-index-flows" target="_blank" rel="noopener">JD Secondary Trading Update - Strong Demand but Won’t Have Any Index Flows</a></li>
</ul>
</div>
<div>
<ul style="list-style-type: disc;">
<li><a href="https://www.smartkarma.com/insights/netease-hk-listing-early-look-follow-the-leader" target="_blank" rel="noopener">NetEase HK Listing - Early Look - Follow the Leader</a></li>
<li><a href="https://www.smartkarma.com/insights/netease-secondary-listing-relatively-bigger-than-baba-should-offer-relatively-bigger-discount" target="_blank" rel="noopener">NetEase Secondary Listing - Relatively Bigger than Baba, Should Offer Relatively Bigger Discount</a></li>
<li><a href="https://www.smartkarma.com/insights/netease-secondary-listing-doing-a-beigene-rather-than-a-baba-risk-reward-shifting" target="_blank" rel="noopener">NetEase Secondary Listing - Doing a BeiGene Rather than a Baba, Risk Reward Shifting</a></li>
</ul>
</div>
<div>
<ul style="list-style-type: disc;">
<li><a href="https://www.smartkarma.com/insights/netease-secondary-trading-update-index-flows-to-provide-near-term-support" target="_blank" rel="noopener">NetEase Secondary Trading Update - Index Flows to Provide near Term Support</a></li>
</ul>
</div>
<div>
<ul style="list-style-type: disc;">
<li><a href="https://www.smartkarma.com/insights/alibaba-ipo-secondary-listing-the-real-ipo-only-begins-on-the-11th-day-post-listing" target="_blank" rel="noopener">Alibaba IPO/​Secondary Listing - The Real IPO Only Begins on the 11th Day Post Listing</a></li>
</ul>
</div>
<div>
<ul style="list-style-type: disc;">
<li dir="ltr">
<p><a href="https://www.smartkarma.com/insights/alibaba-ipo-secondary-listing-proposed-stock-connect-changes-might-throw-a-spanner-in-the-works" target="_blank" rel="noopener">Alibaba IPO/​Secondary Listing - Proposed Stock Connect Changes Might Throw a Spanner in the Works</a></p>
</li>
<li dir="ltr"><a href="https://www.smartkarma.com/insights/alibaba-ipo-secondary-listing-what-to-do-with-the-us-adr-while-waiting-for-the-hk-listing" target="_blank" rel="noopener">Alibaba IPO/​​Secondary Listing - What to Do with the US ADR While Waiting for the HK Listing?</a></li>
<li dir="ltr"><a href="https://www.smartkarma.com/insights/alibaba-ipo-secondary-listing-not-good-for-the-adr-should-have-put-a-price-range-to-it" target="_blank" rel="noopener">Alibaba IPO/​​​Secondary Listing -  Not Good for the ADR, Should Have Put a Price Range to It</a></li>
<li dir="ltr"><a href="https://www.smartkarma.com/insights/alibaba-ipo-secondary-neither-here-not-there-index-announcements-comparison-to-other-deals" target="_blank" rel="noopener">Alibaba IPO/​​​​Secondary -  Neither Here Nor There - Index Announcements, Comparison to Other Deals</a></li>
</ul>
</div>
<div>
<ul style="list-style-type: disc;">
<li><a href="https://www.smartkarma.com/insights/alibaba-ipo-secondary-listing-trading-time-to-converge-that-s-it" target="_blank" rel="noopener">Alibaba IPO/​​​​​Secondary Listing Trading - Time to Converge, That’s It</a></li>
<li><a href="https://www.smartkarma.com/insights/china-adrs-secondary-listing-deep-dive-yin-and-yang" target="_blank" rel="noopener">China ADRs Secondary Listing Deep-Dive: Yin and Yang</a></li>
<li><a href="https://www.smartkarma.com/insights/china-adrs-secondary-listing-holding-foreign-companies-accountable-act-i-m-coming-home" target="_blank" rel="noopener">China ADRs Secondary Listing - Holding Foreign Companies Accountable Act - I’m Coming Home</a></li>
<li><a href="https://www.smartkarma.com/insights/china-adrs-secondary-listing-covid-19-has-increased-the-tension-but-narrowed-the-short-list" target="_blank" rel="noopener">China ADRs Secondary Listing: COVID-19 Has Increased the Tension but Narrowed the Short List</a></li>
</ul>
</div>


Yum China Holdings, Inc (YUMC US) raised around US$2.5bn in its Hong Kong secondary listing.
I have covered the deal background in:


Yum China HK Listing - Early Look - Relatively Bigger Deal Should Have a Relatively Bigger Impact, and

Yum China HK Listing - Relatively Bigger, Should Offer a Bigger Discount.



In this insight, I'll talk about the deal dynamics and updates over the past week.




Links to my previous notes on China ADRs secondary listing:



Huazhu HK Secondary Listing - Early Look - Needs the Cash More than Most Secondary Candidates




JD &amp; NetEase Secondary Listings - What to Do with the ADR? Lessons from Baba
JD, NetEase and Other Secondary Listing - Index (FTSE, MSCI, HSI And HSCEI) Impact
JD.com HK Listing - Early Look - Getting the Ball Rolling




JD Secondary Listing - Early to File but Late to Launch Puts It in a Peculiar Position
JD Secondary Listing - Behaving Better than NetEase, so Far




JD Secondary Trading Update - Strong Demand but Won’t Have Any Index Flows




NetEase HK Listing - Early Look - Follow the Leader
NetEase Secondary Listing - Relatively Bigger than Baba, Should Offer Relatively Bigger Discount
NetEase Secondary Listing - Doing a BeiGene Rather than a Baba, Risk Reward Shifting




NetEase Secondary Trading Update - Index Flows to Provide near Term Support




Alibaba IPO/​Secondary Listing - The Real IPO Only Begins on the 11th Day Post Listing





Alibaba IPO/​Secondary Listing - Proposed Stock Connect Changes Might Throw a Spanner in the Works

Alibaba IPO/​​Secondary Listing - What to Do with the US ADR While Waiting for the HK Listing?
Alibaba IPO/​​​Secondary Listing -  Not Good for the ADR, Should Have Put a Price Range to It
Alibaba IPO/​​​​Secondary -  Neither Here Nor There - Index Announcements, Comparison to Other Deals




Alibaba IPO/​​​​​Secondary Listing Trading - Time to Converge, That’s It
China ADRs Secondary Listing Deep-Dive: Yin and Yang
China ADRs Secondary Listing - Holding Foreign Companies Accountable Act - I’m Coming Home
China ADRs Secondary Listing: COVID-19 Has Increased the Tension but Narrowed the Short List



Yum China HK IPO Trading - Index Flows to the Rescue

Equity Analyst, LightStream Research

Supun Walpola

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.

<p>There was some speculation that <a href="https://www.smartkarma.com/entities/ant-financial-services-group" target="_blank" data-smartkarma-citation="entities:24240:1" rel="noopener">Ant Financial (1051260D CH)</a>’s IPO would have been partly motivated by Jack Ma’s plans to further distance himself from <a href="https://www.smartkarma.com/entities/alibaba-group" target="_blank" data-smartkarma-citation="entities:28434:1" rel="noopener">Alibaba Group (9988 HK)</a>. However, Ant’s preliminary prospectus suggests that Jack Ma, through the Concert Party Agreement signed between the shareholders of Yunbo immediately prior to the release of the prospectus, would continue to have control of Ant even after the IPO.</p><p>Meanwhile, the rushed inclusion of ant-dilutive rights into its Share and Asset Purchase Agreement (SAPA) with Ant suggests that it would be unlikely for Alibaba to increase its stake in Ant during the IPO. Nevertheless, we believe Alibaba has significant influence over Ant’s affairs, with a majority of Ant’s BOD also holding positions as Alibaba’s senior management.</p>

There was some speculation that Ant Financial (1051260D CH)’s IPO would have been partly motivated by Jack Ma’s plans to further distance himself from Alibaba Group (9988 HK). However, Ant’s preliminary prospectus suggests that Jack Ma, through the Concert Party Agreement signed between the shareholders of Yunbo immediately prior to the release of the prospectus, would continue to have control of Ant even after the IPO.Meanwhile, the rushed inclusion of ant-dilutive rights into its Share and Asset Purchase Agreement (SAPA) with Ant suggests that it would be unlikely for Alibaba to increase its stake in Ant during the IPO. Nevertheless, we believe Alibaba has significant influence over Ant’s affairs, with a majority of Ant’s BOD also holding positions as Alibaba’s senior management.

Ant Group IPO: Jack Ma Is Still “Very Much” in Control

Founder & CEO Bond Angle, LLC, Bond Angle, LLC

Vicki Bryan

Founder & CEO Bond Angle, LLC

Bond Angle, LLC

Insightful commentary and analysis on bond markets and market movers, including financial, economic, and industry catalysts and management shenanigans. 

High yield market investment research

Credit

<p><a href="https://www.smartkarma.com/entities/softbank-group-corp" target="_blank" data-smartkarma-citation="entities:315:1" rel="noopener"><strong>Softbank Group (9984 JP)</strong></a><strong> was revealed on Friday as the massive NASDAQ whale</strong> helping to drive unprecedented option volume in recent weeks with its <strong>multi-billion dollar call-buying spree</strong> in the biggest tech names, as reported by <a href="https://www.ft.com/content/75587aa6-1f1f-4e9d-b334-3ff866753fa2" target="_blank" rel="noopener">Financial Times</a> and <a href="https://www.wsj.com/articles/softbanks-bet-on-tech-giants-fueled-powerful-market-rally-11599232205" target="_blank" rel="noopener">The Wall Street Journal</a> which confirmed speculation Thursday by <a href="https://www.zerohedge.com/markets/speculation-emerges-over-identity-mystery-marketwide-call-buyer" target="_blank" rel="noopener">Zero Hedge</a>.</p><p>Softbank's option trades added to $40 billion in call-buying over the past month traced to retail investors. The resulting frenzy netted Softbank <strong><a href="https://www.ft.com/content/53aa19bb-fc9a-46fd-aafd-4bc3669ab161" target="_blank" rel="noopener">$4 billion in option trading gains—on paper—</a></strong>on its own <strong><a href="https://www.wsj.com/articles/softbanks-bet-on-tech-giants-fueled-powerful-market-rally-11599232205" target="_blank" rel="noopener">$50 billion notional exposure</a>. </strong></p><p>By comparison, Softbank's newly acquired long positions in <a href="https://www.smartkarma.com/entities/amazon-com-inc" target="_blank" data-smartkarma-citation="entities:409:1" rel="noopener">Amazon.com Inc (AMZN US)</a>, <a href="https://www.smartkarma.com/entities/alphabet-inc-cl-c" target="_blank" data-smartkarma-citation="entities:11369:1" rel="noopener">Alphabet Inc Cl C (GOOG US)</a>, <a href="https://www.smartkarma.com/entities/microsoft-corp" target="_blank" data-smartkarma-citation="entities:15273:1" rel="noopener">Microsoft Corp (MSFT US)</a>,  and <a href="https://www.smartkarma.com/entities/tesla-motors-inc" target="_blank" data-smartkarma-citation="entities:20279:1" rel="noopener">Tesla Motors (TSLA US)</a> are worth just <strong><a href="https://www.ft.com/content/3eec59a3-cb51-487c-aacd-68a0c7e46f2f" target="_blank" rel="noopener">$2 billion</a>,</strong> almost all that's left of the <strong>$10 billion</strong> Softbank spent late in the June quarter buying and selling mostly tech stocks at heady prices. Those holdings <strong>now are also subject to sharp declines</strong> triggered when Softbank's option scheme was revealed. Sure enough, Softbank <a href="https://www.ft.com/content/9e5827e9-893a-453e-b28d-88c1c0adc9d5" target="_blank" rel="noopener"><strong>lost $9 billion in market value</strong></a> on Monday.</p><p>There's plenty of intense scrutiny underway to understand these trades and what their impact ultimately proves to be. <strong>I'm more interested in Softbank's drastic change in strategy</strong> and its <strong>alternative deployment of cash </strong><strong>from $40 billion raised in stock fire sales </strong>forced by its <strong>wary banks and legacy mega-investors </strong>who <strong>cut him and Softbank off</strong> after decades of seemingly endless billions in available funding when his recklessness netted Softbank and Vision Fund <strong>tens of billions of dollars in record losses. </strong></p><p>This certainly is <strong>not what Softbank told investors to expect</strong> mere weeks ago.</p><p>Instead, Softbank's actions <strong>signal arrogance, or desperation, or worse</strong>—that <strong>CEO Masayoshi Son </strong><strong>feels unrestrained and back in his Star Wars Zone </strong><strong>with $40 billion in fresh cash.</strong></p><div class="content-highlight"><p><em>Read on for a <strong>Bond Angle deep dive into the belly of Softbank, The Whale, and what Son feels free to do with its $40 billion in cash that was pledged to bolster Softbank's bloodied balance sheet</strong>.</em></p></div>

Softbank Group (9984 JP) was revealed on Friday as the massive NASDAQ whale helping to drive unprecedented option volume in recent weeks with its multi-billion dollar call-buying spree in the biggest tech names, as reported by Financial Times and The Wall Street Journal which confirmed speculation Thursday by Zero Hedge.Softbank's option trades added to $40 billion in call-buying over the past month traced to retail investors. The resulting frenzy netted Softbank $4 billion in option trading gains—on paper—on its own $50 billion notional exposure. By comparison, Softbank's newly acquired long positions in Amazon.com Inc (AMZN US), Alphabet Inc Cl C (GOOG US), Microsoft Corp (MSFT US),  and Tesla Motors (TSLA US) are worth just $2 billion, almost all that's left of the $10 billion Softbank spent late in the June quarter buying and selling mostly tech stocks at heady prices. Those holdings now are also subject to sharp declines triggered when Softbank's option scheme was revealed. Sure enough, Softbank lost $9 billion in market value on Monday.There's plenty of intense scrutiny underway to understand these trades and what their impact ultimately proves to be. I'm more interested in Softbank's drastic change in strategy and its alternative deployment of cash from $40 billion raised in stock fire sales forced by its wary banks and legacy mega-investors who cut him and Softbank off after decades of seemingly endless billions in available funding when his recklessness netted Softbank and Vision Fund tens of billions of dollars in record losses. This certainly is not what Softbank told investors to expect mere weeks ago.Instead, Softbank's actions signal arrogance, or desperation, or worse—that CEO Masayoshi Son feels unrestrained and back in his Star Wars Zone with $40 billion in fresh cash.Read on for a Bond Angle deep dive into the belly of Softbank, The Whale, and what Son feels free to do with its $40 billion in cash that was pledged to bolster Softbank's bloodied balance sheet.

Softbank's Son "Feeling The Force" With Options Funded With Cash It Had Pledged To Protect

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)

Remain Overweight EM Relative To EAFE

The MSCI EM index (local currency) remains in an uptrend and is testing all-time highs set in January 2018 near 65,800; as long as the index is...

Vermilion Research

Yum China Secondary Listing: Trading Debut

JD.com (HK) (9618 HK) will commence trading in Hong Kong on Thursday, 18 June. JD.com priced its Hong Kong secondary listing at HK$226 per share....

Arun George

Yum China HK IPO Trading - Index Flows to the Rescue

Yum China Holdings, Inc (YUMC US) aims to raise around US$2.5bn in its Hong Kong secondary listing. I had taken an early look at the deal in...

Sumeet Singh

Ant Group IPO: Jack Ma Is Still “Very Much” in Control

There was some speculation that Ant Financial (1051260D CH)’s IPO would have been partly motivated by Jack Ma’s plans to further distance himself...

Supun Walpola

Softbank's Son "Feeling The Force" With Options Funded With Cash It Had Pledged To Protect

The market is eager to know what Softbank plans to do with a burgeoning war chest from bigger and bigger stock sales. The better question is why...

Vicki Bryan

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