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 (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.

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.

Equity Analyst, LightStream Research

Oshadhi Kumarasiri

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.

Equity Bottom-Up

After the Australian government blocked Kirin’s proposed sale of Lion Dairy &amp; Drinks (LDD) to <a href="https://www.smartkarma.com/entities/china-mengniu-dairy-co" target="_blank" data-smartkarma-citation="entities:354:1" rel="noopener">China Mengniu Dairy Co (2319 HK)</a> in late August, <a href="https://www.smartkarma.com/entities/kirin-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:16977:1" rel="noopener">Kirin Holdings (2503 JP)</a> announced that it has terminated the agreed-upon contract with China Mengniu Dairy and is reassessing its plans for the Lion Dairy and Drinks business.Last week, Blomberg reported, citing unnamed sources, that Kirin is restarting conversations with those who previously conveyed interest in buying the business.

After the Australian government blocked Kirin’s proposed sale of Lion Dairy &amp; Drinks (LDD) to China Mengniu Dairy Co (2319 HK) in late August, Kirin Holdings (2503 JP) announced that it has terminated the agreed-upon contract with China Mengniu Dairy and is reassessing its plans for the Lion Dairy and Drinks business.Last week, Blomberg reported, citing unnamed sources, that Kirin is restarting conversations with those who previously conveyed interest in buying the business.

Kirin Restarts LDD Sale After China Mengniu Deal Falls Through

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.

Event-Driven

<a href="https://www.smartkarma.com/entities/yuanshengtai-dairy-farm-ltd" target="_blank" data-smartkarma-citation="entities:17091:1" rel="noopener">Yuanshengtai Dairy Farm (1431 HK)</a>/YST Diary is one of the leading dairy farming companies in China as measured by herd size and production volume. YST has six dairy farms in Heilongjiang Province and one dairy farm in Jilin Province. On Sunday, <a href="https://www.smartkarma.com/entities/china-feihe-ltd" target="_blank" data-smartkarma-citation="entities:24413:1" rel="noopener">China Feihe (6186 HK)</a> announced a conditional voluntary general offer to acquire all the YST shares at HK$0.63 in cash per share. The offer is conditional on the offeror and its concert parties holding at least 50% of the voting rights. The offeror and its concert parties currently hold 0.13% of the outstanding shares and have not received irrecovables. <div class="content-highlight">The offer is unlikely to see shareholders clamouring to accept the offer as the shares are up 110% YTD and the offer is a marginal 1.6% premium to the share price on the last trading date (3 September). China Feihe is YST’s largest customer and the offer is largely defensive move to limit <a href="https://www.smartkarma.com/entities/china-mengniu-dairy-co" target="_blank" data-smartkarma-citation="entities:354:1" rel="noopener">China Mengniu Dairy Co (2319 HK)</a>’s growing importance to YST, in our view. China Feihe’s offer price is final and there is a good chance the offer could fail due to the small premium. However, several of China Feihe’s peers including Mengniu have invested in raw milk suppliers to secure sufficient supply. Consequently, we would be inclined to have a long position as there is some chance that China Feihe’s bid could force out rival bidders.  </div>

Yuanshengtai Dairy Farm (1431 HK)/YST Diary is one of the leading dairy farming companies in China as measured by herd size and production volume. YST has six dairy farms in Heilongjiang Province and one dairy farm in Jilin Province. On Sunday, China Feihe (6186 HK) announced a conditional voluntary general offer to acquire all the YST shares at HK$0.63 in cash per share. The offer is conditional on the offeror and its concert parties holding at least 50% of the voting rights. The offeror and its concert parties currently hold 0.13% of the outstanding shares and have not received irrecovables. The offer is unlikely to see shareholders clamouring to accept the offer as the shares are up 110% YTD and the offer is a marginal 1.6% premium to the share price on the last trading date (3 September). China Feihe is YST’s largest customer and the offer is largely defensive move to limit China Mengniu Dairy Co (2319 HK)’s growing importance to YST, in our view. China Feihe’s offer price is final and there is a good chance the offer could fail due to the small premium. However, several of China Feihe’s peers including Mengniu have invested in raw milk suppliers to secure sufficient supply. Consequently, we would be inclined to have a long position as there is some chance that China Feihe’s bid could force out rival bidders.  

Chine Feihe Lobs a Conditional Voluntary Offer for YST Dairy

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Last Week in Event SPACE: Nichii Gakkan, Car Inc, Mcdonalds, Lynas, Casetek, Unicom, Evergrande

Earlier today, the Australian Financial Review reported that the Australian government has blocked the proposed sale of Lion Diary &amp; Drinks to <a href="https://www.smartkarma.com/entities/china-mengniu-dairy-co" target="_blank" data-smartkarma-citation="entities:354:1" rel="noopener">China Mengniu Dairy Co (2319 HK)</a>.On 25th November 2019, Japanese beverage company <a href="https://www.smartkarma.com/entities/kirin-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:16977:1" rel="noopener">Kirin Holdings (2503 JP)</a>, reported that they entered into an agreement with China Mengniu Dairy Company Limited to transfer the ownership of Lion-Dairy and Drinks Pty Ltd to China Mengniu Dairy Company’s subsidiary Monday Smoothie Pty Ltd for ¥45.6bn (A$600m). At the time, the deal was only subject to approvals from the Australian Competition &amp; Consumer Commission and the Foreign Investment Review Board. China Mengniu Dairy Company received the Australian Competition &amp; Consumer Commission approval in February 2020 and the Foreign Investment Review Board has also cleared the deal.Since then Australia has changed its foreign investment laws giving the government power to vary or impose conditions on a deal or force a divestment after it has been approved by the Foreign Investment Review Board.

Earlier today, the Australian Financial Review reported that the Australian government has blocked the proposed sale of Lion Diary &amp; Drinks to China Mengniu Dairy Co (2319 HK).On 25th November 2019, Japanese beverage company Kirin Holdings (2503 JP), reported that they entered into an agreement with China Mengniu Dairy Company Limited to transfer the ownership of Lion-Dairy and Drinks Pty Ltd to China Mengniu Dairy Company’s subsidiary Monday Smoothie Pty Ltd for ¥45.6bn (A$600m). At the time, the deal was only subject to approvals from the Australian Competition &amp; Consumer Commission and the Foreign Investment Review Board. China Mengniu Dairy Company received the Australian Competition &amp; Consumer Commission approval in February 2020 and the Foreign Investment Review Board has also cleared the deal.Since then Australia has changed its foreign investment laws giving the government power to vary or impose conditions on a deal or force a divestment after it has been approved by the Foreign Investment Review Board.

Sour China:Australia Diplomatic Relations Halts China Mengniu Dairy’s Buyout of Lion Dairy & Drinks

China

China Mengniu Dairy Company Limited, through its subsidiaries, manufactures and distributes quality dairy products in China. The principal products are liquid milk products, ice cream, and other dairy products, such as milk powder. The Company markets its products under its primary MENGNIU core brand.

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China Mengniu Dairy Co (2319 HK)

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

Kirin Restarts LDD Sale After China Mengniu Deal Falls Through

After the Australian government blocked Kirin’s proposed sale of Lion Diary & Drinks (LDD) to China Mengniu Dairy in late August, Kirin...

Oshadhi Kumarasiri

Chine Feihe Lobs a Conditional Voluntary Offer for YST Dairy

$ is the one of the leading dairy farming companies in China as measured by herd size and production volume. YST has six dairy farms in...

Arun George

Last Week in Event SPACE: Nichii Gakkan, Car Inc, Mcdonalds, Lynas, Casetek, Unicom, Evergrande

Last Week in Event SPACE ... At Nichii Gakkan Co (9792 JP) forthcoming EGM, investors will get squeezed out; but most of the ugliness about...

David Blennerhassett

Sour China:Australia Diplomatic Relations Halts China Mengniu Dairy’s Buyout of Lion Dairy & Drinks

Earlier today, the Australian Financial Review reported that the Australian government has blocked the proposed sale of Lion Diary & Drinks to...

Oshadhi Kumarasiri

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