Global Special Situations & Strategy, SR Services Ltd

David Lepper

Global Special Situations & Strategy

SR Services Ltd

SR Services provides Strategic Knowledge and Solutions services for Family Offices and Corporate Business. 

We deliver this via advisory services, strategic planning, opportunity analysis/sourcing, as well as solution implementation. 

Whilst, we create intellectual discipline and operational leverage for your projects or daily activities, our ultimate objective is to empower whilst enhancing your decision making. 

Strategic Knowledge and Solutions

Cross Asset Strategy

Growth as a style has been the “norm” for years, is the “norm” about to end? The continued strategies by Central Bank’s towards a “lower for longer stance around interest rates”, extended the underperformance of value for most of 2020. However, with the value/growth investment style ratio at 20-year lows, we present 27 names which hold characteristics worthy of further review.

Growth as a style has been the “norm” for years, is the “norm” about to end? The continued strategies by Central Bank’s towards a “lower for longer stance around interest rates”, extended the underperformance of value for most of 2020. However, with the value/growth investment style ratio at 20-year lows, we present 27 names which hold characteristics worthy of further review. 

Screening the Silk Road: Q1 2021 All Cap Screening - Free Cashflow (FCF)

Global Emerging Market Equities, Propitious Research

Wium Malan, CFA

Global Emerging Market Equities

Thematic (Sector/Industry)

This insight provides a summary of the key news developments impacting the largest countries and constituents of the Global Emerging Markets equity indices. Companies mentioned this week:<a href="https://www.smartkarma.com/entities/huawei-technologies-co-ltd" target="_blank" data-smartkarma-citation="entities:8231:1" rel="noopener">Huawei Technology (40978Z CH)</a>, <a href="https://www.smartkarma.com/entities/top-glove-corp-bhd" target="_blank" data-smartkarma-citation="entities:20759:1" rel="noopener">Top Glove Corp (TOPG MK)</a>, <a href="https://www.smartkarma.com/entities/naver-corp" target="_blank" data-smartkarma-citation="entities:16029:1" rel="noopener">Naver Corp (035420 KS)</a>, <a href="https://www.smartkarma.com/entities/samsung-electronics-co-ltd" target="_blank" data-smartkarma-citation="entities:191:1" rel="noopener">Samsung Electronics (005930 KS)</a>, <a href="https://www.smartkarma.com/entities/bytedance-technology" target="_blank" data-smartkarma-citation="entities:27936:1" rel="noopener">ByteDance (1460967D CH)</a>, <a href="https://www.smartkarma.com/entities/alibaba-group" target="_blank" data-smartkarma-citation="entities:28434:1" rel="noopener">Alibaba Group (9988 HK)</a>, <a href="https://www.smartkarma.com/entities/baidu-inc" target="_blank" data-smartkarma-citation="entities:179:1" rel="noopener">Baidu (BIDU US)</a>, <a href="https://www.smartkarma.com/entities/china-mobile-ltd" target="_blank" data-smartkarma-citation="entities:27:1" rel="noopener">China Mobile (941 HK)</a>, <a href="https://www.smartkarma.com/entities/china-telecom-corp-ltd-h" target="_blank" data-smartkarma-citation="entities:1015:1" rel="noopener">China Telecom Corp Ltd (H) (728 HK)</a>, <a href="https://www.smartkarma.com/entities/china-unicom-hong-kong-ltd" target="_blank" data-smartkarma-citation="entities:1016:1" rel="noopener">China Unicom Hong Kong (762 HK)</a>

This insight provides a summary of the key news developments impacting the largest countries and constituents of the Global Emerging Markets equity indices. Companies mentioned this week:Huawei Technology (40978Z CH), Top Glove Corp (TOPG MK), Naver Corp (035420 KS), Samsung Electronics (005930 KS), ByteDance (1460967D CH), Alibaba Group (9988 HK), Baidu (BIDU US), China Mobile (941 HK), China Telecom Corp Ltd (H) (728 HK), China Unicom Hong Kong (762 HK) 

Global Emerging Markets Weekly: 22 January 2021

APAC IPOs & Placements

Zhen Zhou, Toh

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

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In this note, we aim to highlight the Asia Pacific IPO pipeline for 2021. This list has been compiled on a best effort basis from tracking the company filings and through various media and other sources.
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For readers who are not familiar with our coverage, we aim to cover all IPOs and placements with a minimum deal size of US$100m across Asia-Pacific (ex-Korea and A-shares), including China ADRs. Hence, our pipeline will only include companies that fit these criterion.
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Feel free to drop us a message for additional information (bookrunners and coverage) on these IPOs
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In this note, we aim to highlight the Asia Pacific IPO pipeline for 2021. This list has been compiled on a best effort basis from tracking the company filings and through various media and other sources.


For readers who are not familiar with our coverage, we aim to cover all IPOs and placements with a minimum deal size of US$100m across Asia-Pacific (ex-Korea and A-shares), including China ADRs. Hence, our pipeline will only include companies that fit these criterion.


Feel free to drop us a message for additional information (bookrunners and coverage) on these IPOs


Aequitas 2021 Asia IPO Pipeline - More Mega IPOs to Come

Equity Analyst, LightStream Research

Shifara Samsudeen, ACMA, CGMA

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.

<div class="content-highlight">This report was commissioned by iSTOX, a next-generation investing platform designed to lower the barriers to entry to alternative assets like private equity, hedge funds, private debt and more. To learn more, go to <a href="https://istox.com/" target="_blank" data-saferedirecturl="https://www.google.com/url?q=https://istox.com/&amp;source=gmail&amp;ust=1610161268151000&amp;usg=AFQjCNGZcpgoAqxNXnyi7YHjo1-AoCkeCQ" rel="noopener">iSTOX.com</a>.</div>China is currently leading the Internet of Things (IoT) race, supported by the efforts of its telco providers, the government, and early adoption of 5G. Estimates by various consultancy and industry bodies expect China’s IoT industry to grow at a stronger rate over the forecast period (c. 27% compound annual growth rate (CAGR) over 2019-2025), surpassing US spending on IoT.A growing focus on Industrial IoT (IIoT) has become a key trend in the Chinese IoT industry. Initially, IoT was mainly adopted by the consumer sector, particularly in developing smart devices and smart homes. Given the country’s large manufacturing base, IIoT is seen as a sector with the highest growth potential for IoT services. IIoT is still in its nascent stage and we believe that China is well-positioned for growth in this sector.We have identified seventeen emerging IoT companies across key IoT application areas: smart device, home, city and building, IoT and cloud platform, manufacturing and IIoT, automotive and transportation systems and other IoT solutions. Based on industry estimates, IoT and cloud platforms are areas which are likely to witness the highest growth rates over the medium term. Over the longer term, however, we believe that manufacturing and IIoT-related companies will enjoy the strongest growth rates as manufacturers start adopting IoT services throughout their production processes. In terms of IoT platform services, the two names of interest are Gizwits and China Mobile IoT. On the manufacturing and IIoT side, we believe that RootCloud and Thingple have attractive potential for growth. In the smart devices and homes application segment, Yeelink and Tuya Smart caught our attention for their continued efforts in developing product technologies to meet growing IoT needs. In the automotive and transportation systems segment, Roadstar.ai, Deeproute.ai and Uhnder have caught our attention for their efforts in developing technologies for autonomous driving.

This report was commissioned by iSTOX, a next-generation investing platform designed to lower the barriers to entry to alternative assets like private equity, hedge funds, private debt and more. To learn more, go to iSTOX.com.China is currently leading the Internet of Things (IoT) race, supported by the efforts of its telco providers, the government, and early adoption of 5G. Estimates by various consultancy and industry bodies expect China’s IoT industry to grow at a stronger rate over the forecast period (c. 27% compound annual growth rate (CAGR) over 2019-2025), surpassing US spending on IoT.A growing focus on Industrial IoT (IIoT) has become a key trend in the Chinese IoT industry. Initially, IoT was mainly adopted by the consumer sector, particularly in developing smart devices and smart homes. Given the country’s large manufacturing base, IIoT is seen as a sector with the highest growth potential for IoT services. IIoT is still in its nascent stage and we believe that China is well-positioned for growth in this sector.We have identified seventeen emerging IoT companies across key IoT application areas: smart device, home, city and building, IoT and cloud platform, manufacturing and IIoT, automotive and transportation systems and other IoT solutions. Based on industry estimates, IoT and cloud platforms are areas which are likely to witness the highest growth rates over the medium term. Over the longer term, however, we believe that manufacturing and IIoT-related companies will enjoy the strongest growth rates as manufacturers start adopting IoT services throughout their production processes. In terms of IoT platform services, the two names of interest are Gizwits and China Mobile IoT. On the manufacturing and IIoT side, we believe that RootCloud and Thingple have attractive potential for growth. In the smart devices and homes application segment, Yeelink and Tuya Smart caught our attention for their continued efforts in developing product technologies to meet growing IoT needs. In the automotive and transportation systems segment, Roadstar.ai, Deeproute.ai and Uhnder have caught our attention for their efforts in developing technologies for autonomous driving.

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<a href="https://www.smartkarma.com/entities/china-mobile-ltd" target="_blank" data-smartkarma-citation="entities:27:1" rel="noopener">China Mobile (941 HK)</a>, <a href="https://www.smartkarma.com/entities/china-telecom-corp-ltd-h" target="_blank" data-smartkarma-citation="entities:1015:1" rel="noopener">China Telecom Corp Ltd (H) (728 HK)</a>, and <a href="https://www.smartkarma.com/entities/china-unicom-hong-kong-ltd" target="_blank" data-smartkarma-citation="entities:1016:1" rel="noopener">China Unicom Hong Kong (762 HK)</a> along with their ADRs (<a href="https://www.smartkarma.com/entities/china-mobile-ltd-spon-adr" target="_blank" data-smartkarma-citation="entities:16398:1" rel="noopener">China Mobile Ltd Spon Adr (CHL US)</a>, <a href="https://www.smartkarma.com/entities/china-telecom-corp-ltd-adr" target="_blank" data-smartkarma-citation="entities:1017:1" rel="noopener">China Telecom Corp Ltd (Adr) (CHA US)</a>, and <a href="https://www.smartkarma.com/entities/china-unicom-hong-kong-adr" target="_blank" data-smartkarma-citation="entities:1000:1" rel="noopener">China Unicom Hong Kong (Adr) (CHU US)</a>) present a very strange problem. The Trump <a href="https://www.whitehouse.gov/presidential-actions/executive-order-addressing-threat-securities-investments-finance-communist-chinese-military-companies/" target="_blank" rel="noopener">Executive Order</a> (Executive Order on Addressing the Threat from Securities Investments that Finance Communist Chinese Military Companies) is something of nuisance. It doesn’t sanction most of the names on the Defense Department Qualifying Entity list but it makes it so that US Persons and those that invest US Person money cannot invest in the securities of these companies and in certain subsidiaries. But the list of Communist Chinese Military Companies includes the parent companies of the three Chinese mobile telephony companies, and those three companies, along with many Chinese companies, have underperformed peers in other markets since the Executive Order was announced.The new FAQs published by the Treasury Department OFAC (discussed in <a href="https://www.smartkarma.com/insights/ofac-makes-a-longer-list-of-trump-names-of-china-military-cos" target="_blank" data-smartkarma-citation="insights:46704" rel="noopener">OFAC Makes a Longer List of Trump Names of China Military Cos</a>) suggest all 50% subsidiaries or ‘entities determined to be controlled by one or more Communist Chinese military company(ies) identified in or pursuant to EO 13959’ will be covered under the Executive Order but also says that the deadline for not transacting in such names would be 60 days after the OFAC adds the specific name to the list. <blockquote>The initial prohibitions pursuant to section 1(a)(ii) of E.O. 13959 would go into effect beginning 9:30 a.m. eastern time on the date that is 60 days after such subsidiary is added to OFAC’s new list to further implement E.O. 13959. <a href="https://home.treasury.gov/policy-issues/financial-sanctions/faqs/857" target="_blank" rel="noopener">FAQ 857</a></blockquote>The three HK-listed telecom stocks are subsidiaries of QEs but they have yet to be listed, and the US-listed ADRs have also yet to be listed on the OFAC list. That means the NYSE <a href="https://ir.theice.com/press/news-details/2020/NYSE-to-Commence-Delisting-Proceedings-in-Securities-of-Three-Issuers-to-Comply-with-Executive-Order-13959/default.aspx" target="_blank" rel="noopener">decision</a> to delist the stocks was somewhat precipitous, and I expect there may have been political pressure to delist prior to the 11th when the deadline for the first set of stocks arrives at their initial 60-day deadline.Saturday, China's Commerce Ministry warned of "necessary countermeasures to resolutely safeguard the legitimate rights and interests of Chinese companies" in response to the NYSE announcement but there were no details, and in announcing the criticism, saying that the NYSE's actions would "greatly weaken all parties' confidence in the US capital markets", the Chinese Commerce Ministry was effectively saying that retaliation would greatly weaken all parties' confidence in Chinese capital markets. One can't have it both ways, and it must be noted that given the SEC's <a href="https://www.sec.gov/corpfin/disclosure-considerations-china-based-issuers" target="_blank" rel="noopener">guidance</a> at end-November on Chinese ADRs in the US is really a matter of time given China's Securities Law. Yesterday, the CSRC <a href="http://www.csrc.gov.cn/pub/newsite/zjhxwfb/xwdd/202101/t20210103_390002.html" target="_blank" rel="noopener">responded</a> with a measured comment, and today, in what has to be seen as an embarrassing walk-back, the NYSE has <a href="https://ir.theice.com/press/news-details/2021/NYSE-Updates-Guidance-on-Delisting-Determination-for-Securities-of-Three-Issuers-in-Relation-to-Executive-Order-13959--/default.aspx" target="_blank" rel="noopener">walked back their decision to delist the three ADRs</a>. This was accompanied by further clarification from OFAC in the form of FAQ 862, which notes that nothing requires that US Persons actually sell their holdings, just that they might be restricted from doing so if they do not do so in the period between the 60 day deadline and the subsequent exemption period end.The three names have popped sharply in Hong Kong, more than making up for yesterday's smaller fall in price.That leaves investors with another issue.Discussion ensues below.

China Mobile (941 HK), China Telecom Corp Ltd (H) (728 HK), and China Unicom Hong Kong (762 HK) along with their ADRs (China Mobile Ltd Spon Adr (CHL US), China Telecom Corp Ltd (Adr) (CHA US), and China Unicom Hong Kong (Adr) (CHU US)) present a very strange problem. The Trump Executive Order (Executive Order on Addressing the Threat from Securities Investments that Finance Communist Chinese Military Companies) is something of nuisance. It doesn’t sanction most of the names on the Defense Department Qualifying Entity list but it makes it so that US Persons and those that invest US Person money cannot invest in the securities of these companies and in certain subsidiaries. But the list of Communist Chinese Military Companies includes the parent companies of the three Chinese mobile telephony companies, and those three companies, along with many Chinese companies, have underperformed peers in other markets since the Executive Order was announced.The new FAQs published by the Treasury Department OFAC (discussed in OFAC Makes a Longer List of Trump Names of China Military Cos) suggest all 50% subsidiaries or ‘entities determined to be controlled by one or more Communist Chinese military company(ies) identified in or pursuant to EO 13959’ will be covered under the Executive Order but also says that the deadline for not transacting in such names would be 60 days after the OFAC adds the specific name to the list. The initial prohibitions pursuant to section 1(a)(ii) of E.O. 13959 would go into effect beginning 9:30 a.m. eastern time on the date that is 60 days after such subsidiary is added to OFAC’s new list to further implement E.O. 13959. FAQ 857The three HK-listed telecom stocks are subsidiaries of QEs but they have yet to be listed, and the US-listed ADRs have also yet to be listed on the OFAC list. That means the NYSE decision to delist the stocks was somewhat precipitous, and I expect there may have been political pressure to delist prior to the 11th when the deadline for the first set of stocks arrives at their initial 60-day deadline.Saturday, China's Commerce Ministry warned of "necessary countermeasures to resolutely safeguard the legitimate rights and interests of Chinese companies" in response to the NYSE announcement but there were no details, and in announcing the criticism, saying that the NYSE's actions would "greatly weaken all parties' confidence in the US capital markets", the Chinese Commerce Ministry was effectively saying that retaliation would greatly weaken all parties' confidence in Chinese capital markets. One can't have it both ways, and it must be noted that given the SEC's guidance at end-November on Chinese ADRs in the US is really a matter of time given China's Securities Law. Yesterday, the CSRC responded with a measured comment, and today, in what has to be seen as an embarrassing walk-back, the NYSE has walked back their decision to delist the three ADRs. This was accompanied by further clarification from OFAC in the form of FAQ 862, which notes that nothing requires that US Persons actually sell their holdings, just that they might be restricted from doing so if they do not do so in the period between the 60 day deadline and the subsequent exemption period end.The three names have popped sharply in Hong Kong, more than making up for yesterday's smaller fall in price.That leaves investors with another issue.Discussion ensues below.

China Mobile (941 HK): Probably Too Cheap

China

China Telecom Corporation Limited, through its subsidiaries, provides wireline telephone, data, and Internet, as well as leased line services in China.

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China Telecom (H) (728 HK)

Screening the Silk Road: Q1 2021 All Cap Screening - Free Cashflow (FCF)

With the value/growth investment style ratio at 20-year lows, we present 27 names which hold characteristics worthy of further review.

David Lepper

Global Emerging Markets Weekly: 22 January 2021

This insight provides a summary of the key news developments impacting the largest countries and constituents of the Global Emerging Markets equity...

Wium Malan, CFA

Aequitas 2021 Asia IPO Pipeline - More Mega IPOs to Come

We aim to highlight the Asia Pacific IPO pipeline for 2021. This list has been compiled on a best effort basis from tracking the company filings...

Zhen Zhou, Toh

Emerging IoT Companies in China

China is currently leading the IoT race, supported by the efforts of its telco providers, the government, and early adoption of 5G. In this...

Shifara Samsudeen, ACMA, CGMA

China Mobile (941 HK): Probably Too Cheap

China Mobile Telcos are between a rock and a hard place. The NYSE acted too quickly. The Treasury Dept has been slow to clarify. Investors are...

Travis Lundy

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