Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

Shenzhen Mindray Bio-Medical Electronics / Event-Driven

<ul>
<li>Inside is a recap of movements in the last week relating to the Hong Kong Stock Exchange -Shanghai and Shenzhen Northbound Connect facilities, broken down by company and industry.</li>
<li>Overall, <em><strong>net inflow</strong></em> over the past week was ~US$0.83bn, split between Shanghai (+US$1.16bn) and Shenzhen (-US$0.32bn).</li>
<li>The largest inflows were into <strong><a href="https://www.smartkarma.com/entities/kweichow-moutai-co-ltd-a" target="_blank" data-smartkarma-citation="entities:1553:1" rel="noopener">Kweichow Moutai (600519 CH)</a></strong> and <strong><a href="https://www.smartkarma.com/entities/shenzhen-mindray-bio-medic-a" target="_blank" data-smartkarma-citation="entities:28017:1" rel="noopener">Shenzhen Mindray Bio-Medical (300760 CH)</a></strong>. The largest outflows were in <strong><a href="https://www.smartkarma.com/entities/yunnan-chuangxin-new-material" target="_blank" data-smartkarma-citation="entities:27135:1" rel="noopener">Yunnan Energy New Material (002812 CH)</a></strong> and <strong><a href="https://www.smartkarma.com/entities/byd-co-ltd" target="_blank" data-smartkarma-citation="entities:26048:1" rel="noopener">BYD (002594 CH)</a></strong>.</li>
</ul>


Inside is a recap of movements in the last week relating to the Hong Kong Stock Exchange -Shanghai and Shenzhen Northbound Connect facilities, broken down by company and industry.
Overall, net inflow over the past week was ~US$0.83bn, split between Shanghai (+US$1.16bn) and Shenzhen (-US$0.32bn).
The largest inflows were into Kweichow Moutai (600519 CH) and Shenzhen Mindray Bio-Medical (300760 CH). The largest outflows were in Yunnan Energy New Material (002812 CH) and BYD (002594 CH).


Shanghai/​​​​​​​​​​​​​​​​​​​​​​Shenzhen Northbound Connect: Weekly Moves (25 November 2022)

External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Incorporated in Hong Kong, supported by the mainland and targeting in global market, CMB International Capital Corporation Limited (“CMBI”) is an integrated financial institution providing comprehensive and professional services. As a wholly-owned subsidiary of China Merchants Bank ("CMB"), by leveraging on the Group’s synergy and coordination in domestic and overseas markets, as well as CMB’s strong resources and outstanding social reputation, CMBI and its subsidiaries have been actively implementing diversified business strategies and set up an overall layout of main business segments including Corporate Finance, Asset Management, Wealth Management, Global Markets and Structured Finance, etc. Adhering to the philosophy of “being clients oriented and increasing our own values by the way of creating value for clients”, CMBI endeavors to provide quality and integrated financial services to institutional, corporate and individual customers both domestic and overseas including Hong Kong IPO sponsorship and underwriting, share placement and rights issue for listed companies, financial advisors, bonds issuance services, asset management, direct investment, wealth management, equity sales and trading, etc.

Thematic (Sector/Industry)

<ul><li>Growing macro concerns related to stagflation, US rate hike, geopolitical tensions <span style="font-size: var(--content-font-size);">and RMB depreciation continue to weigh on growth stocks, especially to software </span><span style="font-size: var(--content-font-size);">tech. </span></li><li><span style="font-size: var(--content-font-size);">We use five criteria including 1) valuation, 2) profitability, 3) cash level, 4) </span><span style="font-size: var(--content-font-size);">short ratio and 5) RMB/USD depreciation to determine companies that are less </span><span style="font-size: var(--content-font-size);">vulnerable to market fluctuations. We find Hikvision (BUY), Glodon (BUY) and </span><span style="font-size: var(--content-font-size);">AsiaInfo (NR) in the best positions under these five criteria.</span></li><li><div><div><div><p>Heightened macro uncertainties unfavorable to software tech stocks. </p></div></div></div></li></ul><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>

Growing macro concerns related to stagflation, US rate hike, geopolitical tensions and RMB depreciation continue to weigh on growth stocks, especially to software tech. We use five criteria including 1) valuation, 2) profitability, 3) cash level, 4) short ratio and 5) RMB/USD depreciation to determine companies that are less vulnerable to market fluctuations. We find Hikvision (BUY), Glodon (BUY) and AsiaInfo (NR) in the best positions under these five criteria.Heightened macro uncertainties unfavorable to software tech stocks. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

China Software & IT Services - Which Stocks Are Less Vulnerable to Market Volatility?

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.

Equity Bottom-Up

<ul>
<li>Tencent's games gave only three hours a week to juveniles in school summer vacation.</li>
<li>Tencent and NetEase did not get new game licenses for the third time this year.</li>
<li>Kingsoft censors files on users’ computers, which will benefit Microsoft Office.</li>
</ul>


Tencent's games gave only three hours a week to juveniles in school summer vacation.
Tencent and NetEase did not get new game licenses for the third time this year.
Kingsoft censors files on users’ computers, which will benefit Microsoft Office.


China Internet Weekly (18Jul2022): Tencent, Alibaba, Kingsoft Office, Miss Fresh

Research on Tech Companies

Evelyn Zhang

<ul>
<li> More difficult for companies to obtain and accumulate data;</li>
<li>Digital advertising alliance will be impacted, precision advertising ROI will decline</li>
<li>Mobility service provider like Didi, Ctrip will no longer able to offer differentiate pricing through user profile, also restricted for containing  on national geographic information security</li>
<li>Public Cloud market will transfer from current internet cloud provider to state-owned cloud, benefit infrastructure and service providers</li>
<li>Facial Recognition AI such as in-car camera for autonomous driving assistance will be impacted</li>
<li>Short video content platform will have restrictions on the use of recommendation algorithms, which may cause a decline in user time, and the ecommerce product recommendation accuracy</li>
<li>Internet companies with more than 1mn users that have plans to list in US will have to reconsider</li>
</ul>


 More difficult for companies to obtain and accumulate data;
Digital advertising alliance will be impacted, precision advertising ROI will decline
Mobility service provider like Didi, Ctrip will no longer able to offer differentiate pricing through user profile, also restricted for containing  on national geographic information security
Public Cloud market will transfer from current internet cloud provider to state-owned cloud, benefit infrastructure and service providers
Facial Recognition AI such as in-car camera for autonomous driving assistance will be impacted
Short video content platform will have restrictions on the use of recommendation algorithms, which may cause a decline in user time, and the ecommerce product recommendation accuracy
Internet companies with more than 1mn users that have plans to list in US will have to reconsider


Law & Order: What the New Data Security Laws Mean for China's Tech Sector?

<div>
<p>In StubWorld this week ...</p>
</div>
<div>
<div class="content-highlight">
<p><a href="https://www.smartkarma.com/entities/indofood-sukses-makmur-tbk-p" target="_blank" data-smartkarma-citation="entities:1053:1" rel="noopener"></a>For what is a relatively straightforward holding company structure, <a href="https://www.smartkarma.com/entities/kingsoft-corp-ltd" target="_blank" data-smartkarma-citation="entities:492:1" rel="noopener">Kingsoft Corp (3888 HK)</a> provides a cheap proxy into <a href="https://www.smartkarma.com/entities/beijing-kingsoft-office-software-a" target="_blank" data-smartkarma-citation="entities:28842:1" rel="noopener">Beijing Kingsoft Office Software-A (688111 CH)</a>.</p>
</div>
</div>
<div>
<p>Preceding my comments on Kingsoft are the weekly setup/unwind tables for Asia-Pacific Holdcos.</p>
</div>
<div>
<p>These relationships trade with a minimum liquidity threshold of US$1mn on a 90-day moving average, and a % market capitalisation threshold - the $ value of the holding/opco held, over the parent’s market capitalisation, expressed in percent - of at least 20%.</p>
</div>
<div>
<p>As always, more below the fold.</p>
</div>


In StubWorld this week ...



For what is a relatively straightforward holding company structure, Kingsoft Corp (3888 HK) provides a cheap proxy into Beijing Kingsoft Office Software-A (688111 CH).



Preceding my comments on Kingsoft are the weekly setup/unwind tables for Asia-Pacific Holdcos.


These relationships trade with a minimum liquidity threshold of US$1mn on a 90-day moving average, and a % market capitalisation threshold - the $ value of the holding/opco held, over the parent’s market capitalisation, expressed in percent - of at least 20%.


As always, more below the fold.


StubWorld: Kingsoft (3888 HK) - Beijing Kingsoft's Inexpensive Proxy

China

IFLYTEK Co., Ltd. specializes in speech intelligence and artificial intelligence technology.  The company also develops chip product, voice messaging software and e-government system integration software.

Shanghai Baosight Software Co., Ltd. provides information technology services. The Company develops automation and information computer software for metallurgy, transportation, electric power generation, banking, and other industries. Shanghai Baosight Software also sells computer hardware and provides system integration and maintenance services.

Kingsoft Corporation Ltd. develops and markets computer software.  The Company develops role-playing computer games and security, word processing, and spreadsheet software.

Hundsun Technologies Inc develops application software for security firms, commercial banks, fund management firms, and other industries.  The Company also sells computer hardware and provides system integration services.

China National Software & Service Co., Ltd designs, develops, and integrates application software used for the taxation, railway telecommunication, military, commercial aviation, and financial industries.  The Company also designs Chinasoft Linux operating system and develops language conversion software to support Chinese, English, and Japanese

Yonyou Network Technology Co., Ltd. develops and markets enterprise-wide business applications software, including financial, web-based, management, and security development software. The Company also offers training programs.

Kingdee International Software Group Company Limited, through its subsidiaries, develops and sells enterprise management software, e-commerce application software and middleware software.  The Company also provides internet-based services and setting up e-commerce platforms for enterprises. In addition, Kingdee provides solution consulting and technical support services.

Beijing Venustech Inc. provides a variety of information security products, information security services and information security solutions.  The Company's products and services are intrusion detection systems, intrusion prevention systems, firewalls, real-time monitoring and security management certification training services.

Jiangsu Hoperun Software Company Limited provides software outsourcing services for professional fields. The Company's main products include supply chain management software, intelligent terminal embedded software, and smart grid IT software outsourcing services.

Aisino Co., Ltd. manufactures electronic and telecommunication equipment, as well as provides system integration and other related services. The Company's products include anti-fraud tax control systems and IC cards.

Xero Limited offers an online accounting system.  The software features bank transaction importing, a cashbook, a general ledger, invoicing, accounts receivable, accounts payable, financial reporting, and management of expense claims.

CAPCOM CO., LTD. develops consumer video game software.  The Company also develops, manufactures, markets, and leases arcade game machines.  Capcom also operates amusement facilities.

Aspen Technology, Inc. provides software solutions. The Company offers asset optimization software that optimizes asset design, operations, and maintenance in complex, industrial environments to enable organizations to meet their business goals for sustainability and profitability. Aspen Technology serves customers worldwide.

Paycom Software Inc provides cloud-based HCM software solution delivered as Software-as-a-Service.  The Company provides functionality and data analytics that businesses need to manage the complete employment life cycle from recruitment to retirement.

Check Point Software Technologies Ltd. develops, markets and supports a range of software and hardware products and services for information technology (IT) security and offers its customers a network and gateway security solutions, data and endpoint security solutions and management solutions.

SS&C Technologies Holdings, Inc. develops and markets computer software for financial services providers.  The software enables trading and modeling, portfolio management and reporting, accounting, performance measurement, reconciliation, reporting, processing, and clearing.

International Games System Co., Ltd. plans, designs, develops, manufactures, and markets software and hardware for arcade games, PC games, and Internet on-line games.

Manhattan Associates, Inc. provides information technology solutions for distribution centers.  The solutions are designed to enable the efficient movement of goods through the supply chain.  The Company's solutions optimize the receipt, storage, and distribution of inventory, as well as manage equipment and personnel within a distribution center.

Oracle Financial Services Software Ltd. provides comprehensive information technology solutions to the financial services industry worldwide. The Company provides transaction processing and accounting software for banks, investment managers and mutual funds. Oracle Financial also provides internet delivery of financial services as well as business intelligence and analytical applications.

Globant S.A. is a software solutions company. The Company provides engineering, design, and innovation services for clients throughout North America and Europe.

Beijing Kingsoft Office Software, Inc. develops and distributes software products. The Company develops anti virus software, office software, and other products. Beijing Kingsoft Office Software also provides cloud computing, system integration, and other services.

Beijing Kingsoft Office Softwa (688111 CH)

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Beijing Kingsoft Office Softwa (688111 CH)

Shanghai/Shenzhen Northbound Connect: Weekly Moves (25 November 2022)

Overall, net inflow over the past week in the HK -Shanghai-Shenzhen Northbound Connect facilities was ~US$0.83bn, split between Shanghai...

David Blennerhassett

China Software & IT Services - Which Stocks Are Less Vulnerable to Market Volatility?

Growing macro concerns related to stagflation, US rate hike, geopolitical tensions and RMB depreciation continue to weigh on growth stocks,...

CMB International

China Internet Weekly (18Jul2022): Tencent, Alibaba, Kingsoft Office, Miss Fresh

Tencent follows new game law in school summer vacation. Tencent and NetEase did not get new game licenses for the third time this year. Kingsoft...

Ming Lu

Law & Order: What the New Data Security Laws Mean for China's Tech Sector?

China's recent new sweeping data security and protection laws have set the tech sector in turmoil, We examin what are the impact way forward.

Evelyn Zhang

StubWorld: Kingsoft (3888 HK) - Beijing Kingsoft's Inexpensive Proxy

Kingsoft is only just off its all-time low stub and simple ratio levels. A 60% discount for a net ash holding company, Kingsoft provides an...

David Blennerhassett

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Shanghai/​​​​​​​​​​​​​​​​​​​​​​Shenzhen Northbound Connect: Weekly Moves (25 November 2022)

Overall, net inflow over the past week in the HK -Shanghai-Shenzhen Northbound Connect facilities was ~US$0.83bn, split between Shanghai...

David Blennerhassett

China Software & IT Services - Which Stocks Are Less Vulnerable to Market Volatility?

Growing macro concerns related to stagflation, US rate hike, geopolitical tensions and RMB depreciation continue to weigh on growth stocks,...

CMB International

China Internet Weekly (18Jul2022): Tencent, Alibaba, Kingsoft Office, Miss Fresh

Tencent follows new game law in school summer vacation. Tencent and NetEase did not get new game licenses for the third time this year. Kingsoft...

Ming Lu

Law & Order: What the New Data Security Laws Mean for China's Tech Sector?

China's recent new sweeping data security and protection laws have set the tech sector in turmoil, We examin what are the impact way forward.

Evelyn Zhang

StubWorld: Kingsoft (3888 HK) - Beijing Kingsoft's Inexpensive Proxy

Kingsoft is only just off its all-time low stub and simple ratio levels. A 60% discount for a net ash holding company, Kingsoft provides an...

David Blennerhassett

Shanghai/Shenzhen Northbound Connect: Weekly Moves (25 November 2022)