Japan/Asia Long-Short, LightStream Research

Mio Kato

Japan/Asia Long-Short

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

Following up on our previous note highlighting that Daikin appears to be attempting a breakout above all-time highs, we spoke to the company to clarify the potential for a recovery in China, assess progress on North America and discuss overall trends. We discuss the details below.

Following up on our previous note highlighting that Daikin appears to be attempting a breakout above all-time highs, we spoke to the company to clarify the potential for a recovery in China, assess progress on North America and discuss overall trends. We discuss the details below.

Daikin – North American Margin Improvement Could Offer Upside

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

Late Wednesday, <a href="https://www.smartkarma.com/entities/tcl-multimedia-technology" target="_blank" data-smartkarma-citation="entities:15654:1" rel="noopener">Tcl Multimedia Technology (1070 HK)</a>/TCL said it had received an MGO. The MGO price was set at HK$3.23 per share, an 18% discount to the last close price of HK$3.95 per share. The MGO was triggered due to an astonishing oversight related to the divestiture of TCL Industries Holdings, a former wholly-owned subsidiary of <a href="https://www.smartkarma.com/entities/tcl-corp-a" target="_blank" data-smartkarma-citation="entities:13497:1" rel="noopener">TCL Corp (A) (000100 CH)</a>.<div class="content-highlight">The MGO price was based on a formula linked to an appraiser’s value of TCL. Setting aside that the MGO is purely a belated regulatory box-ticking exercise, we believe that the appraiser’s valuation methodology is questionable.</div>

Late Wednesday, Tcl Multimedia Technology (1070 HK)/TCL said it had received an MGO. The MGO price was set at HK$3.23 per share, an 18% discount to the last close price of HK$3.95 per share. The MGO was triggered due to an astonishing oversight related to the divestiture of TCL Industries Holdings, a former wholly-owned subsidiary of TCL Corp (A) (000100 CH).The MGO price was based on a formula linked to an appraiser’s value of TCL. Setting aside that the MGO is purely a belated regulatory box-ticking exercise, we believe that the appraiser’s valuation methodology is questionable.

CHINA - Healthcare, Steel, Autos, Education, Research From Beijing

Scott Laprise/ 乐天虎

CHINA - Healthcare, Steel, Autos, Education

Research From Beijing

We try to provide our clients with on the ground research of what is really going on here in China.

Our business goal and focus are to provide on the ground research This will give our clients an early look at changes about to happen in China and to give them an edge.

To have the ability to go out and check a car dealer or visit a hospital or go see any new launches in the market. We have regular products such as our steel monthly, a visit to the traders and discuss with them what they see. The steel trader visit gives a great early proxy to spending by the government. We do weekly car dealer visits to see how the car companies are doing but this is also a proxy to the consumer and how is the consumer thinking these days. We visit school and hospitals and attend events to find out what people are really thinking.

Our primary method of research is fundamental research starting with a neutral view, analyzing the financials and building the case for the company. We rarely look at the news as we have found the views to be incomplete lacking the understanding of Chinese thinking. We strive for a fresh differential view on the Chinese stocks. Most Chinese research is made by analysts reading the news and reading other Chinese analysts giving clients the same old view. We also try to give you a better understanding of how the Chinese look at issues. The English media tends to focus on examining issues from the western view giving investors often an incomplete view.

If you want your research done by professionals on the ground who are able to give you early feedback instead of most research taking a long distance view driven by the media. This is our value proposition: focused on the ground research to limited clients. We think this is the best way to give you the best chance to generate alpha for your funds.

China Mengniu Dairy Co / Equity Bottom-Up

<ul>
<li>Advertising taking a fundamental shift due to China.</li>
<li>China is the biggest sponsor of the World Cup.</li>
<li>Advertising is China-centric to build China image.</li>
<li>Some companies NOT interested in international branding.</li>
<li>Three companies advertising in Chinese only – no English at all.</li>
<li>Budweiser ad private in Chinese only for Chinese only.</li>
<li>Two China listed stocks vastly outperformed the market index.</li>
<li>How much will the World Cup be Chinese? Sponsors, fans?</li>
<li>Sports in China, the NBA is #1 in the world in the world.</li>
</ul>


Advertising taking a fundamental shift due to China.
China is the biggest sponsor of the World Cup.
Advertising is China-centric to build China image.
Some companies NOT interested in international branding.
Three companies advertising in Chinese only – no English at all.
Budweiser ad private in Chinese only for Chinese only.
Two China listed stocks vastly outperformed the market index.
How much will the World Cup be Chinese? Sponsors, fans?
Sports in China, the NBA is #1 in the world in the world.


CHINA CONSUMER - World Cup Advertising – China Dominates Yet Does Not Participate

Making sense of the Global Market, Euromonitor International Ltd.

Yu Mitsuhashi

Making sense of the Global Market

Euromonitor International Ltd.

We are a global market research company focused on industries, countries, economies and consumers worldwide. Our cross-country comparable research helps your organisation identify opportunities and develop growth strategies in countries and regions across the globe. With offices around the world, 1,200 analysts in 100 countries and market research on every key trend and driver, we give you powerful access to the real story behind consumer change.

Thematic (Sector/Industry)

<ul><li>In 2017 volume sales increase by 1% to reach 3.8 million units</li><li>Sales driven by the launch of innovative models and new technologies</li><li>Electric wine coolers/chillers posts the strongest volume growth of 13%</li><li>Average unit price rises by 1% in current terms despite various price promotions</li><li>Electrolux remains the leading player with a volume share of 17%</li><li>Over the forecast period refrigeration appliances set to record a marginal volume CAGR decline</li></ul>

In 2017 volume sales increase by 1% to reach 3.8 million unitsSales driven by the launch of innovative models and new technologiesElectric wine coolers/chillers posts the strongest volume growth of 13%Average unit price rises by 1% in current terms despite various price promotionsElectrolux remains the leading player with a volume share of 17%Over the forecast period refrigeration appliances set to record a marginal volume CAGR decline

Sector Capsule: Refrigeration Appliances in the United Kingdom

<ul><li>In 2017 volume sales rise by 3% to approach 5.4 million units</li><li>Freestanding appliances continue to outperform built-in models</li><li>Freestanding washer dryers records the strongest volume growth of 5%</li><li>Average unit price declines by 1% in current terms due to heavy promotional activity</li><li>Indesit remains the leading player with a volume share of 27%</li><li>Volume sales of home laundry appliances set to remain flat over the forecast period</li></ul>

In 2017 volume sales rise by 3% to approach 5.4 million unitsFreestanding appliances continue to outperform built-in modelsFreestanding washer dryers records the strongest volume growth of 5%Average unit price declines by 1% in current terms due to heavy promotional activityIndesit remains the leading player with a volume share of 27%Volume sales of home laundry appliances set to remain flat over the forecast period

Sector Capsule: Home Laundry Appliances in the United Kingdom

China

Hisense Visual Technology Co., Ltd. manufactures and markets electronic products and household electrical appliances.  The Company's products include television sets, refrigerators, freezers, communication products.

Hisense Visual Technology Co., Ltd. A (600060 CH)

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Hisense Visual Technology Co., Ltd. A (600060 CH)

Daikin – North American Margin Improvement Could Offer Upside

Following up on our previous note highlighting that Daikin appears to be attempting a breakout above all-time highs, we spoke to the company to...

Mio Kato

TCL Electronics’ Accidental MGO

Late Wednesday, Tcl Multimedia Technology (1070 HK)/TCL said it had received an MGO. The MGO price was set at HK$3.23 per share, an 18% discount to...

Arun George

CHINA CONSUMER - World Cup Advertising – China Dominates Yet Does Not Participate

Advertising taking a fundamental shift due to China. China is the biggest sponsor of the World Cup. Advertising is China-centric to build China...

Scott Laprise/ 乐天虎

Sector Capsule: Refrigeration Appliances in the United Kingdom

In 2017 volume sales increase by 1% to reach 3.8 million units Sales driven by the launch of innovative models and new technologies Electric wine...

Euromonitor International Ltd.

Sector Capsule: Home Laundry Appliances in the United Kingdom

In 2017 volume sales rise by 3% to approach 5.4 million units Freestanding appliances continue to outperform built-in models Freestanding washer...

Euromonitor International Ltd.

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