Overseas Chinese Equities, Aequitas Research

Ming Lu

Overseas Chinese Equities

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 Bottom-Up

<ul>
<li>Kweichow Moutai’s revenue rose by 17% YoY and net profit increased by 15% YoY in the first three quarters of 2024.</li>
<li>JD gives cents to prevent users from closing accounts after the public relation crisis.</li>
<li>Two tutoring schools, New Oriental and TAL, grew strongly in the most recent quarters.</li>
</ul>


Kweichow Moutai’s revenue rose by 17% YoY and net profit increased by 15% YoY in the first three quarters of 2024.
JD gives cents to prevent users from closing accounts after the public relation crisis.
Two tutoring schools, New Oriental and TAL, grew strongly in the most recent quarters.


China Consumption Weekly (28 Oct 2024): Kweichow Moutai, JD, New Oriental, TAL, Meituan

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li><em>The Quiddity Mainland Connect NORTHBOUND Monitor. Like the A/H Premium Monitor and HK Connect SOUTHBOUND Monitor. Lots of Flows/Position Tables and Charts with which to play.</em></li>
<li>Last week saw NORTHBOUND net SELL RMB 5.0bn of A-shares. NORTHBOUND volumes were very, very low overall.</li>
<li>HK large caps again outperformed Mainland large caps generally. Tech (HSTECH vs Star50 and ChiNext) saw even better HK outperformance.</li>
</ul>


The Quiddity Mainland Connect NORTHBOUND Monitor. Like the A/H Premium Monitor and HK Connect SOUTHBOUND Monitor. Lots of Flows/Position Tables and Charts with which to play.
Last week saw NORTHBOUND net SELL RMB 5.0bn of A-shares. NORTHBOUND volumes were very, very low overall.
HK large caps again outperformed Mainland large caps generally. Tech (HSTECH vs Star50 and ChiNext) saw even better HK outperformance.


Mainland Connect NORTHBOUND Flows (To 16 Aug 2024): Banks Bought, Industry & Materials Sold

Analyst

Steve

<ul>
<li>Late last night (near mid-night), <a href="https://www.smartkarma.com/entities/kweichow-moutai-co-ltd-a" target="_blank" data-smartkarma-citation="entities:1553:1" rel="noopener">Kweichow Moutai (600519 CH)</a> shocked the market by announcing a direct price hike on its main Feitian 53 degree product by an average of 20%. </li>
<li>The market had no expectation of such price hike as it was widely perceived that Moutai could not directly increase the ex-factory price due to regulatory pressures. </li>
<li>Moutai's Feitian ex-factory price is the key price leader for pretty much all other major Baijiu brand, directly benefiting <a href="https://www.smartkarma.com/entities/zjld-group-inc" target="_blank" data-smartkarma-citation="entities:36734:1" rel="noopener">ZJLD Group (6979 HK)</a>.</li>
</ul>


Late last night (near mid-night), Kweichow Moutai (600519 CH) shocked the market by announcing a direct price hike on its main Feitian 53 degree product by an average of 20%. 
The market had no expectation of such price hike as it was widely perceived that Moutai could not directly increase the ex-factory price due to regulatory pressures. 
Moutai's Feitian ex-factory price is the key price leader for pretty much all other major Baijiu brand, directly benefiting ZJLD Group (6979 HK).


ZJLD Group (6979 HK):  Direct Beneficiary Of Moutai Raising Ex-Factory Price

Asset Allocation & Fund Positioning, Copley Fund Research

Steven Holden

Asset Allocation & Fund Positioning

Copley Fund Research

Copley Fund Research provide research and data on asset allocation among Global and Emerging Market equity funds.  The analysis details absolute and relative positioning across countries, sectors and industries together with highly granular data on single stock and single fund allocations.  The data is updated monthly with time series going back to January 2011.

Global Research - Analysis of 165 prominent Global equity funds, combined AUM $335bn
GEM Research - Analysis of 127 prominent global EM equity funds, combined AUM $250bn

Asset Allocation - Global and GEM Equity

Cross Asset Strategy

<ul>
<li>Top holdings remain unchanged: TSMC, Samsung Electronics, and Tencent are almost universally owned. TSMC hits record weights but active funds sell into strength as benchmark weights surpass 10%</li>
<li>Hon Hai, Hyundai Motor, and Singtel lead recoveries from prolonged declines. Baidu Inc. and Kweichow Moutai see sharp ownership drops.</li>
<li>Momentum leaders include Accton Technology, CATL, and KE Holdings. By contrast, Axis Bank, PDD, and Reliance face stalling ownership.</li>
</ul>


Top holdings remain unchanged: TSMC, Samsung Electronics, and Tencent are almost universally owned. TSMC hits record weights but active funds sell into strength as benchmark weights surpass 10%
Hon Hai, Hyundai Motor, and Singtel lead recoveries from prolonged declines. Baidu Inc. and Kweichow Moutai see sharp ownership drops.
Momentum leaders include Accton Technology, CATL, and KE Holdings. By contrast, Axis Bank, PDD, and Reliance face stalling ownership.


Asia Ex-Japan Funds:  Stock Positioning Update

<ul>
<li>
<a href="https://www.smartkarma.com/entities/kweichow-moutai-co-ltd-a" target="_blank" data-smartkarma-citation="entities:1553:1" rel="noopener">Kweichow Moutai (600519 CH)</a> announced a change of chairman last night. </li>
<li>The ex-chairman from Xi Jiu (unlisted), a major Chinese liquor player also based in Guizhou, Mr. Zhang Deqin will take over Moutai's chairman position from Mr. Ding Xiongjun. </li>
<li>I believe this is a positive personnel change, as the new chairman has a good reputation and had great success with his previous company.</li>
</ul>



Kweichow Moutai (600519 CH) announced a change of chairman last night. 
The ex-chairman from Xi Jiu (unlisted), a major Chinese liquor player also based in Guizhou, Mr. Zhang Deqin will take over Moutai's chairman position from Mr. Ding Xiongjun. 
I believe this is a positive personnel change, as the new chairman has a good reputation and had great success with his previous company.


Kweichow Moutai (600519 CH):  Change In Chairman And In-Line 1Q24 Results

China

Kweichow Moutai Co., Ltd. manufactures spirits.  The Company's spirit products are distilled from sorghum and wheat.  Kweichow Moutai markets its products worldwide.

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Kweichow Moutai (600519 CH)

China Consumption Weekly (28 Oct 2024): Kweichow Moutai, JD, New Oriental, TAL, Meituan

Kweichow Moutai’s revenue rose by 17% YoY in the first three quarters of 2024. JD prevents users from closing accounts after the public relation...

Ming Lu

Mainland Connect NORTHBOUND Flows (To 16 Aug 2024): Banks Bought, Industry & Materials Sold

NORTHBOUND was again a net sell, but volumes were very low. Renewables and appliances were again tilted sell - not surprising as property...

Travis Lundy

ZJLD Group (6979 HK): Direct Beneficiary Of Moutai Raising Ex-Factory Price

ZJLD Group is the direct beneficiary of Kweichow Moutai's surprise 20% price hike of its Feitian product, announced late last night.

Steve

Asia Ex-Japan Funds: Stock Positioning Update

Top holdings remain unchanged: TSMC, Samsung Electronics, and Tencent are almost universally owned. TSMC hits record weights but active funds sell...

Steven Holden

Kweichow Moutai (600519 CH): Change In Chairman And In-Line 1Q24 Results

I believe Moutai's chairman change is positive, as the new chairman has a good reputation and had great success with his previous company.

Steve

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