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

<a href="https://www.smartkarma.com/entities/24184" target="_blank" data-smartkarma-citation="entities:24184:1">Baozun Inc. (BZUN US)</a> was our top long idea for the past 8 months with a price target of $45.  At its current $55 per share, the stock price in optimism in the company’s transition from an E-commerce service provider (SP) to Software as a Service (SaaS) business model.  Once it fully transitions to a SaaS business, investors will see an upside in profit margins driven by the scalability of the product, compared to its current client by client, customized projects.  However, according to our checks, the optimism is largely unwarranted. Our new price target is $29, representing 47% downside to current stock price.

Baozun Inc. (BZUN US) was our top long idea for the past 8 months with a price target of $45.  At its current $55 per share, the stock price in optimism in the company’s transition from an E-commerce service provider (SP) to Software as a Service (SaaS) business model.  Once it fully transitions to a SaaS business, investors will see an upside in profit margins driven by the scalability of the product, compared to its current client by client, customized projects.  However, according to our checks, the optimism is largely unwarranted. Our new price target is $29, representing 47% downside to current stock price. 

Turning Negative on Baozun: Software Upgrade Delayed; E-Commerce Premiumization Slows

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

The MSCI EM index has recovered over the last couple of weeks and is now approaching a logical resistance level. We reiterate: avoid broad EM exposure and be selective.  India’s S&amp;P BSE SENSEX is our top country-specific EM index recommendation, overweight India. We also provide an update on Brazil’s Bovespa, which has surged over the last month following a steep selloff. We are skeptical that the index will be able to continue its unabated advance.  Today’s report also includes a wide variety of bottom-up recommendations spanning most sectors and all market capitalizations.

The MSCI EM index has recovered over the last couple of weeks and is now approaching a logical resistance level. We reiterate: avoid broad EM exposure and be selective.  India’s S&amp;P BSE SENSEX is our top country-specific EM index recommendation, overweight India. We also provide an update on Brazil’s Bovespa, which has surged over the last month following a steep selloff. We are skeptical that the index will be able to continue its unabated advance.  Today’s report also includes a wide variety of bottom-up recommendations spanning most sectors and all market capitalizations.

EM Strategy: MSCI EM Approaching Resistance; India Breaking Out to New Highs -- Add Exposure

<a href="https://www.smartkarma.com/entities/25485" target="_blank" data-smartkarma-citation="entities:25485:1">Canada Goose Holdings Inc (GOOS US)</a> announced today plans to open direct-to-consumer (DTC) flagship stores in Beijing and HK.  Both stores will open in the fall 2018. To compliment the offline DTCs and existing counters at Lafayette, Lane Crawford, and Season’s Place in mainland China, GOOS also announced the opening of an online flagship on Tmall in fall 2018.  We believe that the opening of on and offline DTC stores will significantly boost GOOS’ branding and sales volume in China. Goose sales…

Canada Goose Holdings Inc (GOOS US) announced today plans to open direct-to-consumer (DTC) flagship stores in Beijing and HK.  Both stores will open in the fall 2018. To compliment the offline DTCs and existing counters at Lafayette, Lane Crawford, and Season’s Place in mainland China, GOOS also announced the opening of an online flagship on Tmall in fall 2018.  We believe that the opening of on and offline DTC stores will significantly boost GOOS’ branding and sales volume in China. Goose sales…

Canada Goose China Momentum to Accelerate; Nice Contract Win for Baozun

Top Long - <a href="https://www.smartkarma.com/entities/25485" target="_blank" data-smartkarma-citation="entities:25485:1">Canada Goose Holdings Inc (GOOS US)</a>:   Long thesis is GOOS’ global under-penetration and margin expansion as the business goes from distribution to direct retail.  We believe that GOOS will soon launch direct retail in mainland China possibly with a local online retail solution provider.  GOOS currently one of the most coveted luxury fashion brands in China, growing at 60%+ with supply constraint, vs. its comp Moncler at LSD (low single digits) growth.  Combining purchases made by…

Top Long - Canada Goose Holdings Inc (GOOS US):   Long thesis is GOOS’ global under-penetration and margin expansion as the business goes from distribution to direct retail.  We believe that GOOS will soon launch direct retail in mainland China possibly with a local online retail solution provider.  GOOS currently one of the most coveted luxury fashion brands in China, growing at 60%+ with supply constraint, vs. its comp Moncler at LSD (low single digits) growth.  Combining purchases made by…

Q2 Top Long and Short Ideas: GOOS, BZUN, Macau Gaming, JD, and MOMO

<a href="https://www.smartkarma.com/entities/24184" target="_blank" data-smartkarma-citation="entities:24184:1">Baozun Inc. (BZUN US)</a> is down 10% over the past few trading days on pre-earnings concern of rising spending.  BZUN is to report Q1 earnings on May 17/tomorrow before the market opens.We agree that IT Capex and headcount could compromise earnings in H1.  Co is to launch a few new software in Q3 to integrate Online-to-Offline retail sales for clients.We strongly recommend the stock at the price range of $40-$45, as it is great value, risk reward adjusted. Our new price target is $78 per share in…

Baozun Inc. (BZUN US) is down 10% over the past few trading days on pre-earnings concern of rising spending.  BZUN is to report Q1 earnings on May 17/tomorrow before the market opens.We agree that IT Capex and headcount could compromise earnings in H1.  Co is to launch a few new software in Q3 to integrate Online-to-Offline retail sales for clients.We strongly recommend the stock at the price range of $40-$45, as it is great value, risk reward adjusted. Our new price target is $78 per share in…

Baozun - Best Chinese E-Commerce Long; Buy After Correction

United States

Baozun Inc. provides e-commerce solutions. The Company's services include website design, development and hosting, information technology infrastructure, customer service, warehousing, and logistics services, as well as digital marketing. Baozun serves customers in China.

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Baozun Inc. (BZUN US)

Turning Negative on Baozun: Software Upgrade Delayed; E-Commerce Premiumization Slows

Baozun Inc. (BZUN US) was our top long idea for the past 8 months with a price target of $45. At its current $55 per share, the stock price in...

JL Warren Capital

EM Strategy: MSCI EM Approaching Resistance; India Breaking Out to New Highs -- Add Exposure

The MSCI EM index has recovered over the last couple of weeks and is now approaching a logical resistance level. We reiterate: avoid broad EM...

Vermilion Research

Canada Goose China Momentum to Accelerate; Nice Contract Win for Baozun

Canada Goose Holdings Inc (GOOS US) announced today plans to open direct-to-consumer (DTC) flagship stores in Beijing and HK. Both stores will...

JL Warren Capital

Q2 Top Long and Short Ideas: GOOS, BZUN, Macau Gaming, JD, and MOMO

Top Long - Canada Goose Holdings Inc (GOOS US): Long thesis is GOOS’ global under-penetration and margin expansion as the business goes from...

JL Warren Capital

Baozun - Best Chinese E-Commerce Long; Buy After Correction

Baozun Inc. (BZUN US) is down 10% over the past few trading days on pre-earnings concern of rising spending. BZUN is to report Q1 earnings on May...

JL Warren Capital

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