Founder of Antler Capital

Stanley Tsai, CFA

Thematic (Sector/Industry)

<ul>
<li>We welcome the regulators' formalization of financial asset classifications. This will gradually remove regulatory arbitrage and pave the way for further bank reintermediation.</li>
<li>The new rules will likely have limited impacts on bond holdings that have active secondary markets, but illiquid debt investment plans will come under more intense regulatory and auditor scrutiny.</li>
<li>We see an impact of 10-15bp on the listed banks' reported NPL ratios. That said, a handful of banks may be at risk of capital shortages if the environment worsens. </li>
</ul>


We welcome the regulators' formalization of financial asset classifications. This will gradually remove regulatory arbitrage and pave the way for further bank reintermediation.
The new rules will likely have limited impacts on bond holdings that have active secondary markets, but illiquid debt investment plans will come under more intense regulatory and auditor scrutiny.
We see an impact of 10-15bp on the listed banks' reported NPL ratios. That said, a handful of banks may be at risk of capital shortages if the environment worsens. 


Chinese Banks: New Asset Classification Rules | You Can Run but You Can't Hide

Equity Bottom-Up

People's Insurance (PICC) / Equity Bottom-Up

<ul>
<li>To build on our earlier work on the insurance space -- and as we search for beta-neutral relative value plays -- we look at PICC Group-H's SOTP valuation.</li>
<li>The group's life and health business has historically traded at a steep implicit discount to China Life-H, perhaps deservedly so. But price dislocations do occur from time to time.</li>
<li>We share our cheat sheet on how we approach these opportunities, which are often good for a quick 10% trade. As usual, we highlight the potential risks as well.</li>
</ul>


To build on our earlier work on the insurance space -- and as we search for beta-neutral relative value plays -- we look at PICC Group-H's SOTP valuation.
The group's life and health business has historically traded at a steep implicit discount to China Life-H, perhaps deservedly so. But price dislocations do occur from time to time.
We share our cheat sheet on how we approach these opportunities, which are often good for a quick 10% trade. As usual, we highlight the potential risks as well.


PICC Group / PICC P&C Pair: A Cheat Sheet to Improve Your Batting Average

Asia Pac IPO & Placement Research, China biotech, Aequitas Research

Ke Yan, CFA, FRM

Asia Pac IPO & Placement Research, China biotech

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.

Quantitative Analysis

<ul>
<li>We analyse the changes of A-H premium on 143 stocks over the last week. The average A-H premium was 109.4% as of Feb 3rd.</li>
<li>The average A-H premium changed by 6.3ppt week on week, led by consumer staples, real estate, materials.</li>
<li>We highlight weekly changes in A-H premium for Great Wall Motor, CICC, Shanghai Haohai, Chalieco, Cosco Ship.</li>
</ul>


We analyse the changes of A-H premium on 143 stocks over the last week. The average A-H premium was 109.4% as of Feb 3rd.
The average A-H premium changed by 6.3ppt week on week, led by consumer staples, real estate, materials.
We highlight weekly changes in A-H premium for Great Wall Motor, CICC, Shanghai Haohai, Chalieco, Cosco Ship.


A-H Premium Weekly (Feb 3rd): Great Wall Motor, CICC, Shanghai Haohai, Chalieco, Cosco Ship

<ul>
<li>The Jan. PMI readings corroborate what investors had already known over the break. But it is noteworthy that SMEs appear much less upbeat than large corporations.  </li>
<li>SMEs account for 60% of GDP and an even higher proportion of job creation. Policy support has been keeping many of them afloat throughout the pandemic. </li>
<li>As the deadline on the PBOC's SME support program is fast approaching, small regional banks may bear the brunt of the impact on the financial system.</li>
</ul>


The Jan. PMI readings corroborate what investors had already known over the break. But it is noteworthy that SMEs appear much less upbeat than large corporations.  
SMEs account for 60% of GDP and an even higher proportion of job creation. Policy support has been keeping many of them afloat throughout the pandemic. 
As the deadline on the PBOC's SME support program is fast approaching, small regional banks may bear the brunt of the impact on the financial system.


China's Micro Loan Market: Key Takeaways from the Jan PMI

<ul>
<li>We expect to see a strong start to the week for China financials names, with sentiments buoyed by upbeat consumer spending data over the new year holiday.</li>
<li>Early signs point to relatively loose conditions in the interbank market as trading resumes across the board on Monday. The central bank's easing bias will likely continue.</li>
<li>We see more momentum for the sector ahead of Q4 earnings (brokers &gt; insurers &gt; banks). Stock selection will become more important thereafter.</li>
</ul>


We expect to see a strong start to the week for China financials names, with sentiments buoyed by upbeat consumer spending data over the new year holiday.
Early signs point to relatively loose conditions in the interbank market as trading resumes across the board on Monday. The central bank's easing bias will likely continue.
We see more momentum for the sector ahead of Q4 earnings (brokers &gt; insurers &gt; banks). Stock selection will become more important thereafter.


China Financials Weekly: Jan 30 | A Bubbly Opening

China

China International Capital Corporation Ltd. (CICC) operates as an international investment bank. The Company provides financial services, including investment banking, capital markets, securities sales and trading, fixed income, asset management, and private equity. China International Capital also offers individual wealth management and research services.

China International Capital Corporation (3908 HK)

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China International Capital Corporation (3908 HK)

Chinese Banks: New Asset Classification Rules | You Can Run but You Can't Hide

New asset classification rules have officially been announced. We see this as a long-term positive for the sector as regulators continue to bring...

Stanley Tsai, CFA

PICC Group / PICC P&C Pair: A Cheat Sheet to Improve Your Batting Average

PICC Group / PICC P&C are an interesting pair that often provides investors with short windows for relative value trades. From the group's SOTP...

Stanley Tsai, CFA

A-H Premium Weekly (Feb 3rd): Great Wall Motor, CICC, Shanghai Haohai, Chalieco, Cosco Ship

We analyzed A-H premium changes in the past week and highlight A-H premium changes for Great Wall Motor, CICC, Shanghai Haohai, Chalieco, Cosco Ship.

Ke Yan, CFA, FRM

China's Micro Loan Market: Key Takeaways from the Jan PMI

For the most part, the Jan PMI gauges were in line with investor expectations, although the more pessimistic SME sector may be a cause for concern...

Stanley Tsai, CFA

China Financials Weekly: Jan 30 | A Bubbly Opening

We expect a strong start to the week for the China financials space, after a new year holiday that confirms investors' hopes for a speedy recovery...

Stanley Tsai, CFA

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)