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.

Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/jd-com-inc" target="_blank" data-smartkarma-citation="entities:29043:1" rel="noopener">JD.com Inc. (9618 HK)</a> has been able to sustain its relative market share gains, in Chinese online retail sales, over the past two years, despite increased competitive pressure.</li>
<li>Recent weakness in its margin progression trajectory has cast doubts on its ability to realise its potential for long-term margin expansion.</li>
<li>With net cash at 31% of its market cap, relative valuation levels seem attractive.</li>
</ul>



JD.com Inc. (9618 HK) has been able to sustain its relative market share gains, in Chinese online retail sales, over the past two years, despite increased competitive pressure.
Recent weakness in its margin progression trajectory has cast doubts on its ability to realise its potential for long-term margin expansion.
With net cash at 31% of its market cap, relative valuation levels seem attractive.


JD.com: Can Sustained Market Share Gains Be Transferred into Sustained Margin Progression?

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.

Ping An Healthcare and Technol / Equity Bottom-Up

<ul>
<li>Ping An Health (SEHK:1833) reported 2H2021 earnings on Tuesday after market close. The company’s revenue declined by 14.7% YoY with a 7.5% decline in gross margins.</li>
<li>On a full-year basis, 2021 revenue grew by 6.8% despite a 3.9% decline in gross margins. We are concerned on the slowdown of revenue growth and margin decline.</li>
<li>The company is trading at a significant discount to historical median and peers. Withou clarity regarding segments, we think it is too soon to take a completely negative stance.</li>
</ul>


Ping An Health (SEHK:1833) reported 2H2021 earnings on Tuesday after market close. The company’s revenue declined by 14.7% YoY with a 7.5% decline in gross margins.
On a full-year basis, 2021 revenue grew by 6.8% despite a 3.9% decline in gross margins. We are concerned on the slowdown of revenue growth and margin decline.
The company is trading at a significant discount to historical median and peers. Withou clarity regarding segments, we think it is too soon to take a completely negative stance.


Ping An Health 2021 Results: Is Strategy 2.0 Continuum as Successful as Claimed?

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Event-Driven

<ul>
<li>Short notional in Hong Kong is HK$488bn and has been falling mainly as a result of a falling market. Short interest has increased substantially from end January.</li>
<li>From 31 January to 4 March, the largest shorts have been built on Tencent, China Merchants Bank, AIA Group Ltd, Alibaba, JD.com, Meituan, Xiaomi, JD Health and Xinyi Solar.</li>
<li>Over the same period, shorts have covered on COSCO Shipping Holdings, HKEX, Longfor Properties, China Construction Bank, Ping An Insurance, Yanzhou Coal Mining Company and HSBC Holdings.</li>
</ul>


Short notional in Hong Kong is HK$488bn and has been falling mainly as a result of a falling market. Short interest has increased substantially from end January.
From 31 January to 4 March, the largest shorts have been built on Tencent, China Merchants Bank, AIA Group Ltd, Alibaba, JD.com, Meituan, Xiaomi, JD Health and Xinyi Solar.
Over the same period, shorts have covered on COSCO Shipping Holdings, HKEX, Longfor Properties, China Construction Bank, Ping An Insurance, Yanzhou Coal Mining Company and HSBC Holdings.


Hong Kong: Where Have Shorts Increased & Decreased?

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Capital Markets

<ul>
<li>Based on our analysis, the logic of <a href="https://www.smartkarma.com/entities/cloudr-group-limited" target="_blank" data-smartkarma-citation="entities:34459:1" rel="noopener">ClouDr Group</a>’s business model is more solid and feasible than that of Ping An Good Doctor, indicating better outlook.</li>
<li>If compared with JD Health and Alibaba Health,besides the sales of pharmacy supplies and hospital supplies, ClouDr also provides hospital/pharmacy SaaS services, indicating wider business scope and broader development space.</li>
<li>In terms of valuation, <a href="https://www.smartkarma.com/entities/neusoft-xikang-holdings" target="_blank" data-smartkarma-citation="entities:33447:1" rel="noopener">Neusoft Xikang Holdings (NXH HK)</a> is a good comparable company for ClouDr,but investors need to be aware of the market sentiment to new IPOs at that time.</li>
</ul>


Based on our analysis, the logic of ClouDr Group’s business model is more solid and feasible than that of Ping An Good Doctor, indicating better outlook.
If compared with JD Health and Alibaba Health,besides the sales of pharmacy supplies and hospital supplies, ClouDr also provides hospital/pharmacy SaaS services, indicating wider business scope and broader development space.
In terms of valuation, Neusoft Xikang Holdings (NXH HK) is a good comparable company for ClouDr,but investors need to be aware of the market sentiment to new IPOs at that time.


Pre-IPO ClouDr Group - The Logical Business Model Can Support Future Growth

Medbanks Network Technology / Equity Capital Markets

<ul>
<li>For Medbanks, who entered the market from the SMO business and then PBM business, building core competitiveness around this closed loop may be quite challenging.</li>
<li>The PRS business has growth ceilings; The low margins of PBM and PPS business and the increasing competition make Medbanks difficult to generate solid financial position for future business expansion.</li>
<li>Therefore, based on the analysis above, we are conservative about this Company’s outlook.</li>
</ul>


For Medbanks, who entered the market from the SMO business and then PBM business, building core competitiveness around this closed loop may be quite challenging.
The PRS business has growth ceilings; The low margins of PBM and PPS business and the increasing competition make Medbanks difficult to generate solid financial position for future business expansion.
Therefore, based on the analysis above, we are conservative about this Company’s outlook.


Pre-IPO Medbanks Network Technology - Conservative About the Outlook

China

JD Health International Inc. operates drug stores. The Company retails Chinese and Western medicines, nutrition products, health care products, and other products. JD Health International markets its products throughout China.

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JD Health International (6618 HK)

Ping An Health 2021 Results: Is Strategy 2.0 Continuum as Successful as Claimed?

It appears that Ping An is trying to downplay the difficulty in transitioning to a new strategy. 2H2021 disclosures offer a large no. of...

Shifara Samsudeen, ACMA, CGMA

Hong Kong: Where Have Shorts Increased & Decreased?

From 31 Jan to 4 March, most shorted stocks are Tencent, China Merchants Bank, AIA Group, Alibaba, JD.com, Meituan, Xiaomi, JD Health and Xinyi...

Brian Freitas

Pre-IPO ClouDr Group - The Logical Business Model Can Support Future Growth

The logic of ClouDr is better than Ping An Good Doctor.Whether it can surpass JD Health/Alibaba Health depends on its online mall performance,SaaS...

Xinyao (Criss) Wang

Pre-IPO Medbanks Network Technology - Conservative About the Outlook

We analyzed the business logic, concerns and outlook of Medbanks's three business lines PRS, PBM and PPS. The low margin, fierce competition and...

Xinyao (Criss) Wang

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

JD.com: Can Sustained Market Share Gains Be Transferred into Sustained Margin Progression?

In this insight, we analyse relative market share changes, key operational drivers, longer-term margin expansion trends, and take an updated look...

Wium Malan, CFA

Ping An Health 2021 Results: Is Strategy 2.0 Continuum as Successful as Claimed?

It appears that Ping An is trying to downplay the difficulty in transitioning to a new strategy. 2H2021 disclosures offer a large no. of...

Shifara Samsudeen, ACMA, CGMA

Hong Kong: Where Have Shorts Increased & Decreased?

From 31 Jan to 4 March, most shorted stocks are Tencent, China Merchants Bank, AIA Group, Alibaba, JD.com, Meituan, Xiaomi, JD Health and Xinyi...

Brian Freitas

Pre-IPO ClouDr Group - The Logical Business Model Can Support Future Growth

The logic of ClouDr is better than Ping An Good Doctor.Whether it can surpass JD Health/Alibaba Health depends on its online mall performance,SaaS...

Xinyao (Criss) Wang

Pre-IPO Medbanks Network Technology - Conservative About the Outlook

We analyzed the business logic, concerns and outlook of Medbanks's three business lines PRS, PBM and PPS. The low margin, fierce competition and...

Xinyao (Criss) Wang