Asset Allocation & Fund Positioning, Copley Fund Research

Steven Holden

Asset Allocation & Fund Positioning

Copley Fund Research

Copley Fund Research provide research and data on asset allocation among Global and Emerging Market equity funds.  The analysis details absolute and relative positioning across countries, sectors and industries together with highly granular data on single stock and single fund allocations.  The data is updated monthly with time series going back to January 2011.

Global Research - Analysis of 165 prominent Global equity funds, combined AUM $335bn
GEM Research - Analysis of 127 prominent global EM equity funds, combined AUM $250bn

Asset Allocation - Global and GEM Equity

Equity Bottom-Up

<ul>
<li>After a heavy decline in ownership between 2016 and 2020, active Asia Ex-Japan managers are re-engaging with Baidu Inc.</li>
<li>Ownership levels are at 4-year highs, with Baidu one of the key beneficiaries of manager rotation this year.</li>
<li>Baidu is the 3rd largest holding in the Communication Services sector, but there a plenty of funds with a history of ownership who remain on the sidelines for now.</li>
</ul>


After a heavy decline in ownership between 2016 and 2020, active Asia Ex-Japan managers are re-engaging with Baidu Inc.
Ownership levels are at 4-year highs, with Baidu one of the key beneficiaries of manager rotation this year.
Baidu is the 3rd largest holding in the Communication Services sector, but there a plenty of funds with a history of ownership who remain on the sidelines for now.


Overseas Chinese Equities, Aequitas Research

Ming Lu

Overseas Chinese Equities

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.

<ul>
<li>The Chinese economy looks weak according to the data from the statistics bureau.</li>
<li>However, many big Chinese internet companies began to recover in Q2 as we mentioned in August.</li>
<li>Here we list five recovering companies that investors may not pay attention to.</li>
</ul>


The Chinese economy looks weak according to the data from the statistics bureau.
However, many big Chinese internet companies began to recover in Q2 as we mentioned in August.
Here we list five recovering companies that investors may not pay attention to.


China Internet Weekly (4Sep2023): Quarterly Results See Growing – BIDU, VIPS, ZTO, Giant, BEKE

Asian Hedge Fund Manager, Long Short Equity, Macro

David Mudd

ZhongAn Online P&C Insurance C / Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/zhongan-online-p-c-insurance-c" target="_blank" data-smartkarma-citation="entities:23681:1" rel="noopener">ZhongAn Online P&amp;C Insurance C (6060 HK)</a> is benefiting from the cross-selling opportunities  generated through the eco-systems of <a href="https://www.smartkarma.com/entities/alibaba-group-holding-ltd-d7b798e2-202d-4e01-9a1e-799e2ae8f0c7" target="_blank" data-smartkarma-citation="entities:28434:1" rel="noopener">Alibaba Group Holding (9988 HK)</a> and <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent (700 HK)</a>, its parent companies</li>
<li>Largest solely online insurance company in China with Rmb 30B gross premiums written in 2023.</li>
<li>Expertise and cross-selling from <a href="https://www.smartkarma.com/entities/ping-an-insurance-grp-co-of-china-ltd" target="_blank" data-smartkarma-citation="entities:12880:1" rel="noopener">Ping An Insurance (H) (2318 HK)</a> , another parent company with a jointly run auto insurance business.</li>
</ul>



ZhongAn Online P&amp;C Insurance C (6060 HK) is benefiting from the cross-selling opportunities  generated through the eco-systems of Alibaba Group Holding (9988 HK) and Tencent (700 HK), its parent companies
Largest solely online insurance company in China with Rmb 30B gross premiums written in 2023.
Expertise and cross-selling from Ping An Insurance (H) (2318 HK) , another parent company with a jointly run auto insurance business.


Baba's Babies: Co-Parenting Works! Zhong An Online P&C Insurance

Cross Asset Strategy

<ul>
<li>Industrials and Consumer Staples Remain Top Overweights, Though Sentiment Fragile for Both.</li>
<li>Energy sector shows signs of a turnaround from long-term decline, whilst Financials remain unloved by China investors.</li>
<li>Real Estate allocations have hit record lows, with average holdings at just 2.93%, while Consumer Discretionary sector approaches all-time highs.</li>
</ul>


Industrials and Consumer Staples Remain Top Overweights, Though Sentiment Fragile for Both.
Energy sector shows signs of a turnaround from long-term decline, whilst Financials remain unloved by China investors.
Real Estate allocations have hit record lows, with average holdings at just 2.93%, while Consumer Discretionary sector approaches all-time highs.


Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<div>
Back in May 2016, a buyout group comprising <a href="https://www.smartkarma.com/entities/xiaomi-corp" target="_blank" data-smartkarma-citation="entities:24409:1" rel="noopener">Xiaomi Corp (1810 HK)</a>'s founder Lei Jun terminated its US$2.5bn Offer for <a href="https://www.smartkarma.com/entities/joyy-inc" target="_blank" data-smartkarma-citation="entities:285:1" rel="noopener">JOYY (YY US)</a>, on account of heightened regulatory scrutiny. At the time, Lei was JOYY's chairman. The buyout group also comprised CEO David Xueling Li. The non-binding Offer price for ~64% of shares out not held by the buyout group was US$68.50/share.  
Fast forward to 16 November last year, <a href="https://www.smartkarma.com/entities/baidu-inc-a55ca720-5968-48f0-8194-ac94390d065c" target="_blank" data-smartkarma-citation="entities:32212:1" rel="noopener">Baidu (9888 HK)</a> <a href="https://ir.baidu.com/news-releases/news-release-details/baidu-acquire-joyys-live-streaming-business-china" target="_blank" rel="noopener">announced</a> it had entered into definitive agreements with JOYY to acquire its domestic video-based entertainment live streaming business in China ("YY Live"), for US$3.6bn. 
Two days later, Muddy Water had a <a href="https://www.muddywatersresearch.com/research/yy/1/" target="_blank" rel="noopener">slightly less favourable</a> take on Baidu "buying growth". 
JOYY and certain of its current and former officers and directors were named as defendants in a federal putative securities class action filed on the 20 November 2020, alleging that they made material misstatements and omissions in documents filed with the SEC regarding certain of the allegations contained in the MW report.
On the 8 February, JOYY <a href="https://ir.joyy.sg/static-files/0aeb5b77-b567-4621-bb81-dea6177cdfa6" target="_blank" rel="noopener">disclosed</a> the conclusion of the independent review, which concluded that the allegations raised and conclusions reached in that MW report about JOYY's YY Live business were not substantiated.
The Baidu sale has been substantially completed, with certain customary matters remaining to be completed  - namely SAMR. 
The New News
Reuters is reporting that Chairman David Li and Lei Jun are reloading an Offer for JOYY. Reportedly they are looking to offer US$75-$100/share, or a market cap of US$7.8bn at the top end of that range.
More below the fold.
</div>


Back in May 2016, a buyout group comprising Xiaomi Corp (1810 HK)'s founder Lei Jun terminated its US$2.5bn Offer for JOYY (YY US), on account of heightened regulatory scrutiny. At the time, Lei was JOYY's chairman. The buyout group also comprised CEO David Xueling Li. The non-binding Offer price for ~64% of shares out not held by the buyout group was US$68.50/share.  
Fast forward to 16 November last year, Baidu (9888 HK) announced it had entered into definitive agreements with JOYY to acquire its domestic video-based entertainment live streaming business in China ("YY Live"), for US$3.6bn. 
Two days later, Muddy Water had a slightly less favourable take on Baidu "buying growth". 
JOYY and certain of its current and former officers and directors were named as defendants in a federal putative securities class action filed on the 20 November 2020, alleging that they made material misstatements and omissions in documents filed with the SEC regarding certain of the allegations contained in the MW report.
On the 8 February, JOYY disclosed the conclusion of the independent review, which concluded that the allegations raised and conclusions reached in that MW report about JOYY's YY Live business were not substantiated.
The Baidu sale has been substantially completed, with certain customary matters remaining to be completed  - namely SAMR. 
The New News
Reuters is reporting that Chairman David Li and Lei Jun are reloading an Offer for JOYY. Reportedly they are looking to offer US$75-$100/share, or a market cap of US$7.8bn at the top end of that range.
More below the fold.


China

Hello Group Inc. operates as a mobile-based social networking platform. The Company enables users to establish and expand social relationships based on location and interests. Hello Group operates out of the Peoples Republic of 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.

Kunlun Tech Co., Ltd. offers comprehensive Internet value-added services. The Company focuses on social network interactive and online game fields. Kunlun Tech also provides localized translation outsourcing and agency advertising services.

Tongdao Liepin Group operates as a online talent service platform. The Company offers online personal career files, online job search, online recruitment, talent solutions, and other related services. Tongdao Liepin Group also provides talent community network and other services.

37 Interactive Entertainment Network Technology Group Co.,Ltd designs, develops, and operates mobile games and web games. The Company also provides game promotion, customer service, top-up payment, and other services. 37 Interactive Entertainment Network Technology Group conducts its businesses in China.

37 Interactive Entertainment N (002555 CH)

Bilibili Inc. provides online entertainment services. The Company offers a platform that covers a wide array of genres and media formats, including videos, live broadcasting, mobile games, animation, and comics. Bilibili serves customers in China.

China Ruyi Holdings Limited operates as a holding company. The Company, through its subsidiaries, focuses on online streaming video and internet community businesses. China Ruyi Holdings also manufactures and sells photographic, electronic, and multimedia accessories.

Shandong Publishing & Media Co., Ltd offers publishing services. The Company publishes and sells books, textbooks, magazines, audio visuals, and other products. Shandong Publishing & Media also manufactures and sells papers.

Crazy Sports Group Limited operates as a digital sports entertainment community operator. The Company provides provide online sports information, sports knowledge payment, event quiz, sports mobile games, online sports lottery tickets purchasing, and other services. Crazy Sports Group offers services in China.

Zhejiang Huace Film & TV Co., Ltd. specializes in entertainment media production. The Company's products include Mandarin films, TV programs and advertisements.

Zhejiang Huace Film & Televisi (300133 CH)

Pinterest, Inc. operates and maintains social networking site. The Company provides online venue for personal photos, ideas, oddities, decorations, places to visit, recipes, and other items. Pinterest serves customers worldwide.

LY Corporation operates as an internet search engine "Yahoo! JAPAN". The Company provides electronic commerce and settlement finance services for small medium enterprises and individuals. LY also operates media business including search linked advertising and display advertising services.

Snap Inc. provides technology and social media services. The Company develops mobile camera application products and services that allow users to send and receive photos, drawings, text, and videos. Snap serves customers worldwide.

CAR Group Limited operates as a digital marketplace for vehicles. The Company provides a diversified portfolio of brands to sell and buy cars. CAR Group serves customers worldwide.

Match Group, Inc. is a dating service provider. The Company offers diverse portfolio of apps and services which enables connections across the spectrum of age, race, gender, sexual orientation, and backgrounds. Match Group serves customers worldwide.

IAC Inc operates as a holding company. The Company, through its subsidiaries, provides media and Internet services. IAC serves customers worldwide.

Domain Holdings Australia Limited offers multi-platform property solutions. The Company operates an online portal that delivers property marketing solutions for residential, new development, and commercial properties. Domain Holdings Australia serves buyers, sellers, renters, and investors in Australia.

EverQuote, Inc. operates as an Internet based marketing firm. The Company, through its platform, enables consumers to connect with auto insurance carriers and agents to meet their auto insurance needs. EverQuote serves customers in the United States.

Sea Limited offers information technology services. The Company provides online personal computer and mobile digital content, e-commerce, and payment platforms. Sea serves customers worldwide.

Charter Communications, Inc. operates as a cable telecommunications company. The Company offers cable broadcasting, internet, voice, and mass media services. Charter Communications serves customers in the United States.

Baidu, Inc. operates an Internet search engine. The Company offers algorithmic search, enterprise search, news, MP3, and image searches, voice assistance, online storage, and navigation services. Baidu serves clients globally.

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Baidu (9888 HK)

Baidu: Back in the Mix

After a heavy decline in ownership between 2016 and 2020, active Asia Ex-Japan managers are re-engaging with Baidu Inc..

Steven Holden

China Internet Weekly (4Sep2023): Quarterly Results See Growing – BIDU, VIPS, ZTO, Giant, BEKE

The macroeconomy looks weak. However, big Chinese internet giants began to recover. Here we list five small companies that the market may neglect.

Ming Lu

Baba's Babies: Co-Parenting Works! Zhong An Online P&C Insurance

Zhong An Online Insurance is experience rapid growth through cross selling opportunities from its part owners Alibaba, Tencent and Ping An, as well...

David Mudd

China Macro: Sector Positioning Update

Sector positioning among active China Funds. Industrials and Consumer Staples Remain Top Overweights, Energy shows signs of a turnaround, whilst...

Steven Holden

JOYY (JOYY US): Rumoured Privatisation

A little over three years after entering into an SPA, Baidu (9888 HK) has now terminated discussions with JOYY (YY US) as the closing conditions...

David Blennerhassett

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