Global Emerging Market Equities, Propitious Research

Wium Malan, CFA

Global Emerging Market Equities

Independent, Fundamental Quantitative Research

Propitious Research

Fully independent, fundamental and quantitative equity research, focused on companies in the Telecommunication, Media, Technology, Internet and Healthcare sectors in the Global Emerging Markets. Idea generation focused on Quality stocks, trading below their intrinsic Value, with sound Corporate Governance.

Quantitative Analysis

<ul>
<li>An overview (and output) of our machine learning-driven GEM screening model, which seeks to find the best medium-term long ideas within the top100 stocks in the MSCI GEM Index.</li>
<li>The model is based on 1) a quantitative multifactor screening model, enhanced by two AI Technology-based approaches; 2) a Deep Neural Network model, and 3) a Recurrent Neural Network model.</li>
<li>Developed over the past 3 years, and implemented in its current state for 18 months, the model has a solid real-world alpha-generating performance track record, set out in detail below.</li>
</ul>


An overview (and output) of our machine learning-driven GEM screening model, which seeks to find the best medium-term long ideas within the top100 stocks in the MSCI GEM Index.
The model is based on 1) a quantitative multifactor screening model, enhanced by two AI Technology-based approaches; 2) a Deep Neural Network model, and 3) a Recurrent Neural Network model.
Developed over the past 3 years, and implemented in its current state for 18 months, the model has a solid real-world alpha-generating performance track record, set out in detail below.


Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

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 Capital Markets

China Power International / Equity Capital Markets

<ul>
<li>China Power International is looking to raise up to US$436m via a top-up placement.</li>
<li>The stock is up more than 274% over the past year, with most of the gains having come over the past few months.</li>
<li>In this note, will we talk about deal dynamics and run the deal through our ECM framework. </li>
</ul>


China Power International is looking to raise up to US$436m via a top-up placement.
The stock is up more than 274% over the past year, with most of the gains having come over the past few months.
In this note, will we talk about deal dynamics and run the deal through our ECM framework. 


China Power International Placement - Won't Do Much for Funding Capacity Expansion

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

Ke Yan, CFA, FRM

Asia Pac IPO & Placement Research, China biotech

<ul>
<li>We analyzed the latest HK SFC report for aggregate short position as of Nov 12. </li>
<li>Top short increases and decreases were tabulated for one week and four week period. </li>
<li>We highlight short increases for Smoore and China Resource Land. </li>
</ul>


We analyzed the latest HK SFC report for aggregate short position as of Nov 12. 
Top short increases and decreases were tabulated for one week and four week period. 
We highlight short increases for Smoore and China Resource Land. 


HK Short Interest: Short Spiked for Smoore, CR Land

Chief Economist & Political Strategist, CrossASEAN Research

Prasenjit K. Basu

Chief Economist & Political Strategist

CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

Cross Asset Strategy

13 months after its introduction, China's "Three Red Lines" (TRL) policy initiative (to reduce leverage, improve debt coverage and increase liquidity) for property companies is beginning to have a serious impact. A key contributory factor is that TSF (total social financing) has increased by a more moderate RMB21.68 trillion in Jan-Aug 2021 than last year (RMB25.97 trillion in Jan-Aug 2020), which still implies 10.3% YoY growth in the stock of TSF (to RMB306.83 trillion, or US$47.5 trillion), which is near the slowest-ever pace since TSF began to be published. The stock of M2, bank credit and TSF in China are at historic highs never reached by any other country, and the growth of all these aggregates continues, albeit at a marginally slower pace.Despite the abundance of liquidity (and the cut in RRR in mid-July), real GDP is growing barely over 5% YoY in 3Q 2021, with retail sales decelerating to 2.5% YoY growth and industrial production to 5.3% YoY growth in August 2021. The latter was largely export-driven (helped by a surge in global trade), as FAI (fixed asset investment) declined 2.1% YoY in May-August 2021. Such an economic deceleration in the year before an important leadership transition (i.e., rubber-stamping of continuity for Xi, change for others around him) will be met by further monetary easing in October 2021. That half of the 10 largest residential-property developers are Guangdong-based (a province traditionally known for both entrepreneurship and rebellion) makes them particularly vulnerable to the political crackdown on capitalists. The focus increasingly will be on cutting the costs of property, healthcare and education, not just tech titans.  However, moral hazard will be tightly managed. Onshore (local currency) bond holders will bear relatively few losses on high-profile names like Evergrande (although there will be credit events for bank loans), while offshore foreign-currency bond holders are likely to feel considerable pain (i.e., the partial end of the "moral hazard play"). The political crackdown on sundry capitalists -- tech titans, others seeking overseas listings, property developers, gaming companies -- will persist, adding more to the China Premium. We would recommend staying Underweight China equities amid the uncertainty generated by this political instability, which will result in a new equilibrium discount on Chinese valuations emerging by early 2022.

13 months after its introduction, China's "Three Red Lines" (TRL) policy initiative (to reduce leverage, improve debt coverage and increase liquidity) for property companies is beginning to have a serious impact. A key contributory factor is that TSF (total social financing) has increased by a more moderate RMB21.68 trillion in Jan-Aug 2021 than last year (RMB25.97 trillion in Jan-Aug 2020), which still implies 10.3% YoY growth in the stock of TSF (to RMB306.83 trillion, or US$47.5 trillion), which is near the slowest-ever pace since TSF began to be published. The stock of M2, bank credit and TSF in China are at historic highs never reached by any other country, and the growth of all these aggregates continues, albeit at a marginally slower pace.Despite the abundance of liquidity (and the cut in RRR in mid-July), real GDP is growing barely over 5% YoY in 3Q 2021, with retail sales decelerating to 2.5% YoY growth and industrial production to 5.3% YoY growth in August 2021. The latter was largely export-driven (helped by a surge in global trade), as FAI (fixed asset investment) declined 2.1% YoY in May-August 2021. Such an economic deceleration in the year before an important leadership transition (i.e., rubber-stamping of continuity for Xi, change for others around him) will be met by further monetary easing in October 2021. That half of the 10 largest residential-property developers are Guangdong-based (a province traditionally known for both entrepreneurship and rebellion) makes them particularly vulnerable to the political crackdown on capitalists. The focus increasingly will be on cutting the costs of property, healthcare and education, not just tech titans.  However, moral hazard will be tightly managed. Onshore (local currency) bond holders will bear relatively few losses on high-profile names like Evergrande (although there will be credit events for bank loans), while offshore foreign-currency bond holders are likely to feel considerable pain (i.e., the partial end of the "moral hazard play"). The political crackdown on sundry capitalists -- tech titans, others seeking overseas listings, property developers, gaming companies -- will persist, adding more to the China Premium. We would recommend staying Underweight China equities amid the uncertainty generated by this political instability, which will result in a new equilibrium discount on Chinese valuations emerging by early 2022.  

This insight provides the output, and an overview of our, machine learning-driven, proprietary GEM screening model, which takes a three-pronged approach to find the best medium-term long ideas within the top100 largest stocks in the MSCI GEM Index. The model is based on 1) a typical quantitative multifactor screening model, enhanced by two Artificial Intelligence Technology-based approaches using 2) a Deep Neural Network model, and 3) a Recurrent Neural Network model. This model, which has been developed and tweaked over the past 24 months (and implemented in its current state for &gt;12 months), has a solid real-world performance track record, which I set out in the detail below. Notable new entrants to the top decile this month include a host of energy plays (<a href="https://www.smartkarma.com/entities/gazprom-pjsc" target="_blank" data-smartkarma-citation="entities:23749:1" rel="noopener">Gazprom PJSC (GAZP RX)</a>, <a href="https://www.smartkarma.com/entities/lukoil-pjsc-2bfe0130-461e-4ff3-af12-93bec12e6325" target="_blank" data-smartkarma-citation="entities:27148:1" rel="noopener">LUKOIL (LKOH RM)</a>, <a href="https://www.smartkarma.com/entities/ptt-pcl" target="_blank" data-smartkarma-citation="entities:197:1" rel="noopener">PTT PCL (PTT TB)</a>,  and <a href="https://www.smartkarma.com/entities/cnooc-ltd" target="_blank" data-smartkarma-citation="entities:175:1" rel="noopener">CNOOC Ltd (883 HK)</a>) as well as a return for South African banking group <a href="https://www.smartkarma.com/entities/firstrand-ltd" target="_blank" data-smartkarma-citation="entities:24971:1" rel="noopener">FirstRand Ltd (FSR SJ)</a>, and a recovery call for Chinese online gaming powerhouse <a href="https://www.smartkarma.com/entities/netease" target="_blank" data-smartkarma-citation="entities:29030:1" rel="noopener">NetEase (9999 HK)</a>.<table class="table table-striped">
<colgroup>
<col>
<col>
<col>
<col>
<col>
</colgroup>
<tbody>
<tr>
<td style="text-align: center; width: 48pt;">rank</td>
<td style="width: 169pt;">Name</td>
<td style="width: 119pt;">Sector</td>
<td style="width: 95pt;">Location</td>
<td style="text-align: center; width: 48pt;">prev.</td>
</tr>
<tr>
<td style="text-align: center;">1</td>
<td>
<a href="https://www.smartkarma.com/entities/gazprom-pjsc-6a7231a9-d5e4-4da4-bf21-aa1b9d50fbf8" target="_blank" data-smartkarma-citation="entities:27578:1" rel="noopener">Gazprom PJSC (GAZP RM)</a> </td>
<td>Energy</td>
<td>Russian Federation</td>
<td style="text-align: center;">12</td>
</tr>
<tr>
<td style="text-align: center;">2</td>
<td>
<a href="https://www.smartkarma.com/entities/lukoil-pjsc-2bfe0130-461e-4ff3-af12-93bec12e6325" target="_blank" data-smartkarma-citation="entities:27148:1" rel="noopener">LUKOIL (LKOH RM)</a> </td>
<td>Energy</td>
<td>Russian Federation</td>
<td style="text-align: center;">28</td>
</tr>
<tr>
<td style="text-align: center;">3</td>
<td>
<a href="https://www.smartkarma.com/entities/ptt-pcl" target="_blank" data-smartkarma-citation="entities:197:1" rel="noopener">PTT PCL (PTT TB)</a> </td>
<td>Energy</td>
<td>Thailand</td>
<td style="text-align: center;">30</td>
</tr>
<tr>
<td style="text-align: center;">4</td>
<td>
<a href="https://www.smartkarma.com/entities/china-resources-land-ltd" target="_blank" data-smartkarma-citation="entities:418:1" rel="noopener">China Resources Land (1109 HK)</a> </td>
<td>Real Estate</td>
<td>China</td>
<td style="text-align: center;">5</td>
</tr>
<tr>
<td style="text-align: center;">5</td>
<td>
<a href="https://www.smartkarma.com/entities/netease" target="_blank" data-smartkarma-citation="entities:29030:1" rel="noopener">NetEase (9999 HK)</a> </td>
<td>Communication</td>
<td>China</td>
<td style="text-align: center;">47</td>
</tr>
<tr>
<td style="text-align: center;">6</td>
<td>
<a href="https://www.smartkarma.com/entities/firstrand-ltd" target="_blank" data-smartkarma-citation="entities:24971:1" rel="noopener">FirstRand Ltd (FSR SJ)</a> </td>
<td>Financials</td>
<td>South Africa</td>
<td style="text-align: center;">68</td>
</tr>
<tr>
<td style="text-align: center;">7</td>
<td>
<a href="https://www.smartkarma.com/entities/cnooc-ltd" target="_blank" data-smartkarma-citation="entities:175:1" rel="noopener">CNOOC Ltd (883 HK)</a> </td>
<td>Energy</td>
<td>China</td>
<td style="text-align: center;">25</td>
</tr>
<tr>
<td style="text-align: center;">8</td>
<td>
<a href="https://www.smartkarma.com/entities/bank-of-china-ltd-h" target="_blank" data-smartkarma-citation="entities:656:1" rel="noopener">Bank Of China Ltd (H) (3988 HK)</a> </td>
<td>Financials</td>
<td>China</td>
<td style="text-align: center;">51</td>
</tr>
<tr>
<td style="text-align: center;">9</td>
<td>
<a href="https://www.smartkarma.com/entities/mmc-norilsk-nickel-pjsc-dcb09449-eb24-4747-b1c9-77fbf35e8398" target="_blank" data-smartkarma-citation="entities:33242:1" rel="noopener">MMC Norilsk Nickel PJSC (GMKN RX)</a> </td>
<td>Materials</td>
<td>Russian Federation</td>
<td style="text-align: center;">22</td>
</tr>
<tr>
<td style="text-align: center;">10</td>
<td>
<a href="https://www.smartkarma.com/entities/new-oriental-education-technology-group" target="_blank" data-smartkarma-citation="entities:32210:1" rel="noopener">New Oriental Education &amp; Technology Group (9901 HK)</a> </td>
<td>Consumer Discretionary</td>
<td>China</td>
<td style="text-align: center;">3</td>
</tr>
<tr><td colspan="5" style="text-align: left;">Source: FactSet financial data and analytics, my estimates and calculations, Tensorflow, Keras, Google Colaboratory, pandas</td></tr>
</tbody>
</table>As usual, please feel free to reach out for the full output table, any questions, clarifications needed or suggestions.

This insight provides the output, and an overview of our, machine learning-driven, proprietary GEM screening model, which takes a three-pronged approach to find the best medium-term long ideas within the top100 largest stocks in the MSCI GEM Index. The model is based on 1) a typical quantitative multifactor screening model, enhanced by two Artificial Intelligence Technology-based approaches using 2) a Deep Neural Network model, and 3) a Recurrent Neural Network model. This model, which has been developed and tweaked over the past 24 months (and implemented in its current state for &gt;12 months), has a solid real-world performance track record, which I set out in the detail below. Notable new entrants to the top decile this month include a host of energy plays (Gazprom PJSC (GAZP RX), LUKOIL (LKOH RM), PTT PCL (PTT TB),  and CNOOC Ltd (883 HK)) as well as a return for South African banking group FirstRand Ltd (FSR SJ), and a recovery call for Chinese online gaming powerhouse NetEase (9999 HK).









rank
Name
Sector
Location
prev.


1

Gazprom PJSC (GAZP RM) 
Energy
Russian Federation
12


2

LUKOIL (LKOH RM) 
Energy
Russian Federation
28


3

PTT PCL (PTT TB) 
Energy
Thailand
30


4

China Resources Land (1109 HK) 
Real Estate
China
5


5

NetEase (9999 HK) 
Communication
China
47


6

FirstRand Ltd (FSR SJ) 
Financials
South Africa
68


7

CNOOC Ltd (883 HK) 
Energy
China
25


8

Bank Of China Ltd (H) (3988 HK) 
Financials
China
51


9

MMC Norilsk Nickel PJSC (GMKN RX) 
Materials
Russian Federation
22


10

New Oriental Education &amp; Technology Group (9901 HK) 
Consumer Discretionary
China
3

Source: FactSet financial data and analytics, my estimates and calculations, Tensorflow, Keras, Google Colaboratory, pandas

As usual, please feel free to reach out for the full output table, any questions, clarifications needed or suggestions. 

Hong Kong

China Resources Land Limited, through its subsidiaries, develops and invests in properties.  The Company also provides corporate financing and electrical engineering services.

Price Gauge
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China Resources Land (1109 HK)

Screening for GEMs: December 2021

This insight provides an overview of our, machine learning-driven, proprietary GEM screening model, based on a Multifactor model, a Deep Neural...

Wium Malan, CFA

China Power International Placement - Won't Do Much for Funding Capacity Expansion

China Power International is looking to raise up to US$436m via a top-up placement. In this note, we will run the deal through our ECM framework.

Sumeet Singh

HK Short Interest: Short Spiked for Smoore, CR Land

We highlight WOW short interest increases for Smoore and China Resource Land based on the latest Hong Kong SFC short aggregate report.

Ke Yan, CFA, FRM

China: The End of the Moral Hazard Play?

Moral hazard will be managed, not ended. Offshore bonds, local loans will bear pain. Property, health, education costs must fall. We recommend...

Prasenjit K. Basu

Screening for GEMs: September 2021

This insight provides an overview of our, machine learning-driven, proprietary GEM screening model, based on a Multifactor model, a Deep Neural...

Wium Malan, CFA

Price Gauge

52-week Range

Market Cap (USDm)

P/E

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