Asian Equities Analyst, Logistics & Transport, Tracking Traffic

Daniel Hellberg

Asian Equities Analyst, Logistics & Transport

Tracking Traffic

Focusing on Asian logistics, transportation, and travel companies

Equity Bottom-Up

<section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/180/014/original/BANNER-TTOtherDec20_GreyOrange.png?1608832116" class="editor-image img-responsive" data-smartkarma-image-id="180014"></figure></section><p>In November, anti-monopoly regulators announced drafts of new rules that will apply to eCommerce 'platform' businesses. And last week authorities announced an anti-monopoly probe into some of <a href="https://www.smartkarma.com/entities/alibaba-group-holding-ltd" target="_blank" data-smartkarma-citation="entities:787:1" rel="noopener">Alibaba Group (BABA US)</a>'s anti-competitive practices. We believe the probe could eventually extend to a range of logistics companies linked to Alibaba. </p><p>The ongoing regulator action against Alibaba's "choose one from two" policy and potential future actions against logistics firms linked to the eCommerce giant will have the same effect: to slow down growth. In the case of the Chinese express companies closely linked to Alibaba, regulators' actions merely add to existing pressures to pursue sector consolidation in 2021.</p><p>We recommend investors check out <a href="https://www.smartkarma.com/entities/best-inc" target="_blank" data-smartkarma-citation="entities:25494:1" rel="noopener">BEST Inc (BEST US)</a> as a potential acquisition target.</p>

In November, anti-monopoly regulators announced drafts of new rules that will apply to eCommerce 'platform' businesses. And last week authorities announced an anti-monopoly probe into some of Alibaba Group (BABA US)'s anti-competitive practices. We believe the probe could eventually extend to a range of logistics companies linked to Alibaba. The ongoing regulator action against Alibaba's "choose one from two" policy and potential future actions against logistics firms linked to the eCommerce giant will have the same effect: to slow down growth. In the case of the Chinese express companies closely linked to Alibaba, regulators' actions merely add to existing pressures to pursue sector consolidation in 2021.We recommend investors check out BEST Inc (BEST US) as a potential acquisition target.

Alibaba Anti-Trust Probe Could Slow Growth of Chinese Express Companies, Add to M&A Pressures

Equity Research in HK and Mainland China

Li Tang

Thematic (Sector/Industry)

<p>The State Administration for Market Regulation (SAMR) and Ministry of Commerce(MOFCOM) gathered six major internet platforms including <a href="https://www.smartkarma.com/entities/alibaba-group-holding-ltd" target="_blank" data-smartkarma-citation="entities:787:1" rel="noopener">Alibaba Group (BABA US)</a><a href="https://www.smartkarma.com/entities/pinduoduo-inc" target="_blank" data-smartkarma-citation="entities:27250:1" rel="noopener">Pinduoduo (PDD US)</a> , <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent Holdings (700 HK)</a> , <a href="https://www.smartkarma.com/entities/jd-com-inc-adr" target="_blank" data-smartkarma-citation="entities:446:1" rel="noopener">JD.com Inc (ADR) (JD US)</a> ,  <a href="https://www.smartkarma.com/entities/meituan-dianping" target="_blank" data-smartkarma-citation="entities:26970:1" rel="noopener">Meituan (3690 HK)</a> , and Didi to discuss the Central Economic Work Conference and anti-monopoly measures Xinhua reported</p>

The State Administration for Market Regulation (SAMR) and Ministry of Commerce(MOFCOM) gathered six major internet platforms including Alibaba Group (BABA US)Pinduoduo (PDD US) , Tencent Holdings (700 HK) , JD.com Inc (ADR) (JD US) ,  Meituan (3690 HK) , and Didi to discuss the Central Economic Work Conference and anti-monopoly measures Xinhua reported

Market Regulator Held Meeting With Major E-Commerce Platforms

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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Event-Driven

<p>At long last, Hang Seng Indexes (HSIL) has released the consultation paper on the "Proposal to enhance the <a href="https://www.smartkarma.com/entities/hong-kong-hang-seng-index" target="_blank" data-smartkarma-citation="entities:22899:1" rel="noopener">Hong Kong Hang Seng Index (HSI INDEX)</a> as regards continuing to serve as the most representative and important benchmark of the Hong Kong stock market". Market participants have until 24 January to submit their views to the HSIL.</p><p>There are 5 main proposals in the consultation paper:</p><ol>
<li>Select constituents by industry group based on a target coverage for each industry group</li>
<li>Increase the number of constituents to between 65 to 80</li>
<li>Removal of the Minimum Listing History requirement for eligible candidates</li>
<li>Maintain a certain number of constituents classified as Hong Kong companies to sustain the level of representation of Hong Kong portion in the index</li>
<li>Lower the weighting cap of individual constituents from 10% to 8%, and increase the weighting cap of WVRs and Secondary Listings from 5% to 8%.</li>
</ol><p>The simulated one-way turnover of increasing the number of constituents to between 65-80 is estimated at 15-20% and HSIL proposes to implement the transition to the enhanced methodology within one year.</p><p>In this Insight, we look at the impact on the index from the proposed changes.</p>

At long last, Hang Seng Indexes (HSIL) has released the consultation paper on the "Proposal to enhance the Hong Kong Hang Seng Index (HSI INDEX) as regards continuing to serve as the most representative and important benchmark of the Hong Kong stock market". Market participants have until 24 January to submit their views to the HSIL.There are 5 main proposals in the consultation paper:
Select constituents by industry group based on a target coverage for each industry group
Increase the number of constituents to between 65 to 80
Removal of the Minimum Listing History requirement for eligible candidates
Maintain a certain number of constituents classified as Hong Kong companies to sustain the level of representation of Hong Kong portion in the index
Lower the weighting cap of individual constituents from 10% to 8%, and increase the weighting cap of WVRs and Secondary Listings from 5% to 8%.
The simulated one-way turnover of increasing the number of constituents to between 65-80 is estimated at 15-20% and HSIL proposes to implement the transition to the enhanced methodology within one year.In this Insight, we look at the impact on the index from the proposed changes.

HSI Market Consultation - Wide Ranging Changes Proposed

Asian Insight Provider - Actionable ideas, CrossASEAN Research

Henry Soediarko

Asian Insight Provider - Actionable ideas

CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

<p><a href="https://www.smartkarma.com/entities/starhub-ltd" target="_blank" data-smartkarma-citation="entities:119:1" rel="noopener">Starhub Ltd (STH SP)</a> pay-TV has been the problem child alongside the Mobile segment due to overcrowded space, led to a higher churn in the number of subscribers coupled with a lower ARPU, followed by a decline in the share price. <a href="https://www.smartkarma.com/entities/the-walt-disney-co" target="_blank" data-smartkarma-citation="entities:15439:1" rel="noopener">The Walt Disney Co (DIS US)</a> + coming to Singapore will cause a further decline in the Pay-TV ARPU. </p><p>Starhub's Enterprise Business which recently has gained momentum and for the first time in almost 3 years, its revenue contribution almost equaled Mobile's. As a result, the revenue in Q3 2020 went up 2% compared to the average of 1H 2020. </p><div class="content-highlight"><p>After underperforming Singtel by 20% for the past 3 years, it is now maybe the time for Starhub to play catch up with the Enterprise Business finally is taking off. With a 3.6% higher yield than Singtel, Starhub sounds like a bargain. </p></div><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/179/625/original/image_25922309421608537778217.png?1608537778" class="editor-image img-responsive" data-smartkarma-image-id="179625"></figure><div class="content-remarks"><p>source: Capital IQ</p></div>

Starhub Ltd (STH SP) pay-TV has been the problem child alongside the Mobile segment due to overcrowded space, led to a higher churn in the number of subscribers coupled with a lower ARPU, followed by a decline in the share price. The Walt Disney Co (DIS US) + coming to Singapore will cause a further decline in the Pay-TV ARPU. Starhub's Enterprise Business which recently has gained momentum and for the first time in almost 3 years, its revenue contribution almost equaled Mobile's. As a result, the revenue in Q3 2020 went up 2% compared to the average of 1H 2020. After underperforming Singtel by 20% for the past 3 years, it is now maybe the time for Starhub to play catch up with the Enterprise Business finally is taking off. With a 3.6% higher yield than Singtel, Starhub sounds like a bargain. source: Capital IQ

Starhub (STH): Disney Is Coming but Enterprise Is Gaining Momentum

Chief Economist

Diana Choyleva

Enodo Economics

Enodo Economics is an independent macroeconomic forecasting company that untangles complexity, challenges the consensus, and makes sense of the future. Our focus is on China – one of the most misunderstood economies in the world, but one of the most important to figure out.  Enodo’s chief economist, Diana Choyleva, has been analysing China for almost 20 years, while Enodo’s team boasts a combined 140 years’ experience covering China’s economy, politics and markets. 

Macroeconomics

<h2>China News That Matters</h2><ul>
<li>WHO to visit Wuhan, finally</li>
<li>So much to sell, so few containers to use</li>
<li>Cheap veg! Sign up now!</li>
<li>Toymaker Pop Mart has winning formula, for now</li>
</ul><div class="content-remarks"><p>In my weekly digest China News That Matters, I will give you selected summaries, sourced from a variety of local Chinese-language and international news outlets, and highlight why I think the news is significant. These posts are meant to neither be bullish nor bearish, but help you separate the signal from the noise.</p></div>

China News That Matters
WHO to visit Wuhan, finally
So much to sell, so few containers to use
Cheap veg! Sign up now!
Toymaker Pop Mart has winning formula, for now
In my weekly digest China News That Matters, I will give you selected summaries, sourced from a variety of local Chinese-language and international news outlets, and highlight why I think the news is significant. These posts are meant to neither be bullish nor bearish, but help you separate the signal from the noise.

China

Meituan operates as a web based shopping platform for locally found consumer products and retail services. The Company offers deals of the day by selling vouchers on local services and entertainment, dining, delivery, and other services. Meituan provides its services throughout China.

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Meituan (3690 HK)

Alibaba Anti-Trust Probe Could Slow Growth of Chinese Express Companies, Add to M&A Pressures

New scrutiny from regulators on Alibaba could result in increased financial pressures on the logistics firms linked to the eCommerce giant.

Tracking Traffic

Market Regulator Held Meeting With Major E-Commerce Platforms

The move is in line with The Politburo meeting held on 12 Dec.Regulators are tightening regulation on Community group-buying prevent disorderly...

Li Tang

HSI Market Consultation - Wide Ranging Changes Proposed

HSIL has announced the market consultation for the Hang Seng Index. The conclusions should be announced in February. If the market agrees to most...

Brian Freitas

Starhub (STH): Disney Is Coming but Enterprise Is Gaining Momentum

Starhub's Enterprise Business finally is taking off, almost equal to the Mobile. With a 3.6% higher yield than Singtel, Starhub sounds like a bargain.

Henry Soediarko

Covid-19/ Economy/ Group Buying/ IPOs

In my weekly digest, I will give you selected summaries, sourced from a variety of local Chinese-language and international news outlets, and...

Diana Choyleva

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