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>The 200 largest weighted companies in the GEM index reported average EPS growth of +6.3%y/y for 1Q23-to-date, slightly down from the +7.5% reported for 4Q22.</li>
<li>Only 51% of companies delivered positive sales surprises, whilst 60% delivered positive EPS surprises, an increase from the trend seen over the past year.</li>
<li>Historically, there has been a significant difference in relative share price performance between the largest positive versus negative surprise generators, for 3 months after the reporting date.</li>
</ul>


The 200 largest weighted companies in the GEM index reported average EPS growth of +6.3%y/y for 1Q23-to-date, slightly down from the +7.5% reported for 4Q22.
Only 51% of companies delivered positive sales surprises, whilst 60% delivered positive EPS surprises, an increase from the trend seen over the past year.
Historically, there has been a significant difference in relative share price performance between the largest positive versus negative surprise generators, for 3 months after the reporting date.


Global Emerging Markets: Reporting Season Summary, 1Q2023

External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Incorporated in Hong Kong, supported by the mainland and targeting in global market, CMB International Capital Corporation Limited (“CMBI”) is an integrated financial institution providing comprehensive and professional services. As a wholly-owned subsidiary of China Merchants Bank ("CMB"), by leveraging on the Group’s synergy and coordination in domestic and overseas markets, as well as CMB’s strong resources and outstanding social reputation, CMBI and its subsidiaries have been actively implementing diversified business strategies and set up an overall layout of main business segments including Corporate Finance, Asset Management, Wealth Management, Global Markets and Structured Finance, etc. Adhering to the philosophy of “being clients oriented and increasing our own values by the way of creating value for clients”, CMBI endeavors to provide quality and integrated financial services to institutional, corporate and individual customers both domestic and overseas including Hong Kong IPO sponsorship and underwriting, share placement and rights issue for listed companies, financial advisors, bonds issuance services, asset management, direct investment, wealth management, equity sales and trading, etc.

Thematic (Sector/Industry)

<ul><li>NBS May data showed sales value growth narrowed to 7% YoY from 28% YoY in Apr, in line with market expectation.</li><li>Sales volume turned to decline reflecting ASP hike as higher proportion was sold in high tier cities and the price continued to hike in core tier 1&amp;2 cities according to NBS.</li><li>Looking forward, we expect negative growth in June based on high frequency data and the high base, with sales recovery afterward as 1) our leading indicator suggests a better Jul and 2) policy remains supportive, 3) extra liquidity released by key policy rate cut may boost sales. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

NBS May data showed sales value growth narrowed to 7% YoY from 28% YoY in Apr, in line with market expectation.Sales volume turned to decline reflecting ASP hike as higher proportion was sold in high tier cities and the price continued to hike in core tier 1&amp;2 cities according to NBS.Looking forward, we expect negative growth in June based on high frequency data and the high base, with sales recovery afterward as 1) our leading indicator suggests a better Jul and 2) policy remains supportive, 3) extra liquidity released by key policy rate cut may boost sales. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

China Property Sector – NBS 5M23 data in line: expect sales growth to recover in July

China/Asia TMT

Shawn Yang

China growth and global non-US Internet equities

Blue Lotus Research Institute

Blue Lotus Research is a Hong Kong Type 4 Licensed investment advisory firm focusing on Chinese growth equities and global non-US Internet equities

<ul>
<li>PDD/CPNG/SE: PDD's Temu plans to come to Southeast Asia and South Korea,  negative to Shopee and Coupang (+/-/-)</li>
<li>KE Holding: New home sales remain lukewarm in May, leaving more space for potential incentive policies.</li>
<li>BILI: Bilibili's top anchor achieved a single-session GMV of 28 million yuan during the 618 live-streaming sales event (+)</li>
</ul>


PDD/CPNG/SE: PDD's Temu plans to come to Southeast Asia and South Korea,  negative to Shopee and Coupang (+/-/-)
KE Holding: New home sales remain lukewarm in May, leaving more space for potential incentive policies.
BILI: Bilibili's top anchor achieved a single-session GMV of 28 million yuan during the 618 live-streaming sales event (+)


China/Asia TMT Update-PDD/CPNG/SE/BEKE/BILI:PDD's Temu Plans to Come to ASEAN and South Korea

<ul>
<li>KE Holding: China State Media call for loosening on purchase restrictions in 1st tier cities (+)</li>
<li>NIO: NIO to launch ET5 Touring on June 15（ +）</li>
<li>JD/ BABA/ PDD: Douyin launches self-operated (1P) ecommerce store (-)</li>
</ul>


KE Holding: China State Media call for loosening on purchase restrictions in 1st tier cities (+)
NIO: NIO to launch ET5 Touring on June 15（ +）
JD/ BABA/ PDD: Douyin launches self-operated (1P) ecommerce store (-)


China TMT Update: Ke/Nio/JD/BABA/PDD-Douyin Launches Self-Operated (1P) Store; Nio's ET5;

Equity Bottom-Up

<ul><li>BEKE’s share price surged 13/12% on ADR/H-share market in the last two trading days mainly driven by news from BBG which stated that government is preparing a new basket of measures to support property market and Tsingdao to ease the home purchase limit.</li><li>We do NOT find the document on any official sites but based on historical experience and our channel check, we listed 4 possibilities and its implications to the industry in which the base case is assuming most 2nd-tier cities would follow what Tsingdao imposed and will largely stabilize the market sentiment and property sales.</li><li>It implies a 10/20% GTV growth in new home/existing home market in 2023E for BEKE. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

BEKE’s share price surged 13/12% on ADR/H-share market in the last two trading days mainly driven by news from BBG which stated that government is preparing a new basket of measures to support property market and Tsingdao to ease the home purchase limit.We do NOT find the document on any official sites but based on historical experience and our channel check, we listed 4 possibilities and its implications to the industry in which the base case is assuming most 2nd-tier cities would follow what Tsingdao imposed and will largely stabilize the market sentiment and property sales.It implies a 10/20% GTV growth in new home/existing home market in 2023E for BEKE. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Ke Holdings (BEKE US) – New policy? What’s good for BEKE?

China

KE Holdings Inc. operates as an integrated online and offline platform for housing transactions and services. The Company offers existing and new home sales, home rentals, home renovation, real estate financial solutions, and other services. KE Holdings conducts businesses in China.

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KE Holdings (BEKE US)

Global Emerging Markets: Reporting Season Summary, 1Q2023

In this quarterly insight, we analyse recent GEM reporting trends with reference to Sales and EPS growth, size and percentage of positive...

Wium Malan, CFA

China Property Sector – NBS 5M23 data in line: expect sales growth to recover in July

Sales volume turned to decline reflecting ASP hike as higher proportion was sold in high tier cities and the price continued to hike in core tier...

CMB International

China/Asia TMT Update-PDD/CPNG/SE/BEKE/BILI:PDD's Temu Plans to Come to ASEAN and South Korea

PDD/CPNG/SE: PDD's Temu plans to come to Southeast Asia and South Korea，KE Holding: New home sales remain lukewarm in May, BILI: Bilibili's top...

Blue Lotus Research Institute

China TMT Update: Ke/Nio/JD/BABA/PDD-Douyin Launches Self-Operated (1P) Store; Nio's ET5;

KE Holding: China State Media call for loosening on purchase restrictions (+)；NIO: NIO to launch ET5 Touring on June 15（+）；JD/ BABA/ PDD: Douyin...

Blue Lotus Research Institute

Ke Holdings (BEKE US) – New policy? What’s good for BEKE?

Giving the new home quality issues lately spreads to SOE’s projects that will squeeze more demand to second hand market, as well as BEKE’s to-be...

CMB International

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