Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

Muyuan Foodstuff Co Ltd A / Technical Analysis

<ul>
<li>A pullback in global equities is underway following steep uptrend violations on MSCI ACWI (ACWI-US) and EURO STOXX 50. Both are 4-5% off their highs; further downside may be limited.</li>
<li>Several 5%-10% pullbacks are to be expected in any given year, particularly after the historic 5-month rallies, so we view this as healthy and normal within the ongoing bull market.</li>
<li>ACWI-US is currently testing important support at $105; if this area were to break, next major supports are $102 and $99; this is where we would be buying.</li>
</ul>


A pullback in global equities is underway following steep uptrend violations on MSCI ACWI (ACWI-US) and EURO STOXX 50. Both are 4-5% off their highs; further downside may be limited.
Several 5%-10% pullbacks are to be expected in any given year, particularly after the historic 5-month rallies, so we view this as healthy and normal within the ongoing bull market.
ACWI-US is currently testing important support at $105; if this area were to break, next major supports are $102 and $99; this is where we would be buying.


Pullback Underway; Further Downside Limited?; Buys in Defensives and Commodity-Related Sectors

HK/China Equity Long-Short

Osbert Tang, CFA

Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/cofco-meat-holdings" target="_blank" data-smartkarma-citation="entities:22858:1" rel="noopener">Cofco Joycome (1610 HK)</a> is in a good position to benefit from the hog cycle upturn. China's anti-dumping investigation into imported pork from the EU may also disrupt supply.</li>
<li>Its average hog price has increased by 12.7% YTD and by 1.6% YoY for 5M24. Market hog price further surged by 10.4% in the week of 12-Jun from end-May.</li>
<li>Its P/B of 0.78x is inexpensive at 1SD below the 5-year average. Its peers like <a href="https://www.smartkarma.com/entities/muyuan-foodstuff-co-ltd-a" target="_blank" data-smartkarma-citation="entities:3705:1" rel="noopener">Muyuan Foodstuff (002714 CH)</a> and <a href="https://www.smartkarma.com/entities/wens-foodstuff-group-co-ltd" target="_blank" data-smartkarma-citation="entities:22859:1" rel="noopener">Wens Foodstuff Group (300498 CH)</a> are also interesting. </li>
</ul>



Cofco Joycome (1610 HK) is in a good position to benefit from the hog cycle upturn. China's anti-dumping investigation into imported pork from the EU may also disrupt supply.
Its average hog price has increased by 12.7% YTD and by 1.6% YoY for 5M24. Market hog price further surged by 10.4% in the week of 12-Jun from end-May.
Its P/B of 0.78x is inexpensive at 1SD below the 5-year average. Its peers like Muyuan Foodstuff (002714 CH) and Wens Foodstuff Group (300498 CH) are also interesting. 


COFCO Joycome (1610 HK): Brewing a Hog Cycle Upturn?

Asia Pac IPO & Placement Research, China biotech, Aequitas Research

Ke Yan, CFA, FRM

Asia Pac IPO & Placement Research, China biotech

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.

Quantitative Analysis

<ul>
<li>We analyze the weekly Shanghai/Shenzhen northbound Connect flows with our data engine for holding position as of July 5th.</li>
<li>We estimate the weekly outflows to be US$1,769.7 million, led by information technology, materials, industrials, and offset by communication services, real estate, utilities.</li>
<li>We note that outflows have been consecutive for four weeks and highlight outflows for CATL (300750 CH).</li>
</ul>


We analyze the weekly Shanghai/Shenzhen northbound Connect flows with our data engine for holding position as of July 5th.
We estimate the weekly outflows to be US$1,769.7 million, led by information technology, materials, industrials, and offset by communication services, real estate, utilities.
We note that outflows have been consecutive for four weeks and highlight outflows for CATL (300750 CH).


Northbound Flows (Jul 5th): 4 Weeks of Outflows

<ul>
<li>We analyze the weekly Shanghai/Shenzhen northbound Connect flows with our data engine for holding position as of June 21st.</li>
<li>We estimate the weekly outflows to be US$2,274.9 million, led by consumer staples, consumer discretionary, financials, and offset by information technology, energy.</li>
<li>We highlight flows for Seres, Luxshare Precision, Zhongji Innolight, Eoptolink Technology Inc.,, Moutai, Midea, China Yangtze Power, Zijin Mining, Inner Mongolia Yili Industrial.</li>
</ul>


We analyze the weekly Shanghai/Shenzhen northbound Connect flows with our data engine for holding position as of June 21st.
We estimate the weekly outflows to be US$2,274.9 million, led by consumer staples, consumer discretionary, financials, and offset by information technology, energy.
We highlight flows for Seres, Luxshare Precision, Zhongji Innolight, Eoptolink Technology Inc.,, Moutai, Midea, China Yangtze Power, Zijin Mining, Inner Mongolia Yili Industrial.


Northbound Flows (Jun 21st): Seres, Luxshare Precision, Zhongji Innolight, Eoptolink, Moutai, Midea

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>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.</li>
<li>Last week saw NORTHBOUND net SELL RMB 21.9bn of A-shares. NORTHBOUND bought tech and sold everything else, especially consumer names. Kweichow Moutai, Midea, appliances and renewables.</li>
<li>Ongoing questions as to whether the NORTHBOUND volumes to the buy side are all foreigners. Some suspect there is national team buying mixed in, as was expected from earlier announcements.</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 21.9bn of A-shares. NORTHBOUND bought tech and sold everything else, especially consumer names. Kweichow Moutai, Midea, appliances and renewables.
Ongoing questions as to whether the NORTHBOUND volumes to the buy side are all foreigners. Some suspect there is national team buying mixed in, as was expected from earlier announcements.


Mainland Connect NORTHBOUND Flows (To 14 June 2024): Large Tech Buying, Large Consumer Selling

China

Inner Mongolia Yili Industrial Group Co., Ltd. produces milk, powdered milk, ice cream, and other dairy products.  The Company also produces frozen food and noodles.

Inner Mongolia Yili Industrial Group (A) (600887 CH)

Foshan Haitian Flavouring & Food Company Ltd. manufactures food seasonings. The Company develops, produces, and distributes condiments including soy sauce, oyster sauce, vinegar, flavoring sauce, chicken stock, monosodium glutamate, and oil.

Foshan Haitian Flavouring & Food (603288 CH)

Wens Foodstuff Group Co., Ltd. produces meat products. The Company produces, processes, and sells chicken, duck, pork, and other related products. Guangdong Wens Foodstuffs Group also manufactures and markets cooked meat and frozen meat.

Wens Foodstuff Group Co., Ltd. (300498 CH)

Tongwei Co., Ltd. produces and markets aquatic and animal feeds. The Company also sells animal medicines.

Guangdong Haid Group Company Ltd. manufactures and markets animal feeds.  The Company imports distiller's dried grains with solubles for ingredient in fish and animal feeds.

Henan Shuanghui Investment & Development Co., Ltd. is an investment holding company.  Through its subsidiaries, the Company manufactures meat products and frozen food, provides processing and printing services, as well as operates in commercial trading.

Henan Shuanghui Investment & Development (000895 CH)

China Mengniu Dairy Company Limited, through its subsidiaries, manufactures and distributes quality dairy products in China. The principal products are liquid milk products, ice cream, and other dairy products, such as milk powder. The Company markets its products under its primary MENGNIU core brand.

Want Want China Holdings Limited manufactures and trades rice crackers, snack food, beverages, and packing materials.  The Company also manufactures wheat, flour, and raw materials for the manufacture of snack foods.  Most of the company's production facilities are located in China and Taiwan.

Dali Foods Group Company Ltd. is a snack food and beverage company. The Company is actively expanding its products offering and distributes its products through retailers.

New Hope Liuhe Co Ltd develops, produces, and markets a variety of animal feeds The Company also operates a commercial tradingbusiness, produces packing materials, chemicals and fish oil, and provides consulting services.

The Kraft Heinz Company provides food services. The Company offers foods including ketchup, sauces, meals, snacks, and other food products.

Uni-President Enterprises Corp. manufactures, processes, and markets instant noodles, dairy products, frozen foods, soft drinks, soy sauces, canned pickles, meat products, animal feeds, aquatic feeds, edible oils, bread, cakes, and desserts.  The Company also operates vending machines and food distribution centers in Taiwan.

General Mills, Inc. manufactures and markets branded and packaged consumer foods worldwide. The Company also supplies branded and unbranded food products to the foodservice and commercial baking industries.

Ajinomoto Co., Inc. produces and sells a variety of food products, including seasonings, edible oils, processed foods, beverages, and dairy products.  The Company also develops and manufactures pharmaceuticals, amino acids, and specialty chemicals.

Bunge Limited is a global agribusiness and food company. The Company buys, sells, stores, transports and processes oilseeds and grains to make protein meal for animal feed and edible oil products for commercial customers and consumers. Bunge also produces sugar and ethanol from sugarcane, mills wheat and corn, and sells fertilizer.

Hormel Foods Corporation manufactures and markets consumer-branded meat and food products.  The Company processes meat and poultry products and produces a variety of prepared foods.  Hormel markets its products around the world under a variety of branded names.

Nestle India Ltd. manufactures brand name milk products and other food products. The Company's products include Everyday dairy whitener, milk powder and ghee, Milkmaid sweetened condensed milk and Cerelac weaning foods. Nestle's beverages include Nescafe and Sunrise coffee and Nesfit enriched glucose powder. Nestle also manufactures Maggi noodles, soups and sauces.

Archer-Daniels-Midland Company procures, transports, stores, processes, and merchandises agricultural commodities and products. The Company processes oilseeds, corn, milo, oats, barley, peanuts, and wheat. Archer-Daniels-Midland also processes produce products which have primarily two end uses including food or feed ingredients.

McCormick & Company, Inc. manufactures, markets, and distributes flavor products (including spices, herbs, extracts, seasonings and flavorings) and other specialty food products to the food industry. The Company sells to retail stores, food manufacturers, and food service businesses.

Tyson Foods, Inc. produces, distributes, and markets chicken, beef, pork, prepared foods and related allied products.  The Company's products are marketed and sold to national and regional grocery retailers, regional grocery wholesalers, meat distributors, warehouse club stores, military commissaries, and industrial food processing companies.

Muyuan Foodstuff Company Limited breeds and sells boars and commodity pigs. The Company's main products include boars, and commodity pigs.

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Muyuan Foodstuff Co Ltd A (002714 CH)

COFCO Joycome (1610 HK): Brewing a Hog Cycle Upturn?

Cofco Joycome is well-positioned for China's hog cycle upturn, potential supply disruption from anti-dumping investigation into EU pork. Peers...

Osbert Tang, CFA

Northbound Flows (Jul 5th): 4 Weeks of Outflows

We analyzed northbound Shanghai/Shenzhen connect flows in the past week. We estimate the outflows to be USD1.8bn and highlight flows for CATL.

Ke Yan, CFA, FRM

Northbound Flows (Jun 21st): Seres, Luxshare Precision, Zhongji Innolight, Eoptolink, Moutai, Midea

We analyzed northbound Shanghai/Shenzhen connect flows in the past week and highlight flows for Seres, Luxshare Precision, Zhongji Innolight,...

Ke Yan, CFA, FRM

Mainland Connect NORTHBOUND Flows (To 14 June 2024): Large Tech Buying, Large Consumer Selling

Mainland Connect NORTHBOUND flows this past 4-day week were heavily to the sell side. Consumer Staples/Discretionary were HUGE net sells. Tech was...

Travis Lundy

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Pullback Underway; Further Downside Limited?; Buys in Defensives and Commodity-Related Sectors

Pullback Underway; Further Downside Limited?; Commodities Testing Resistance; Buys in Global Defensives (Staples, Utilities, Telecomm), Commodity...

Vermilion Research

COFCO Joycome (1610 HK): Brewing a Hog Cycle Upturn?

​Cofco Joycome is well-positioned for China's hog cycle upturn, potential supply disruption from anti-dumping investigation into EU pork. Peers...

Osbert Tang, CFA

Northbound Flows (Jul 5th): 4 Weeks of Outflows

We analyzed northbound Shanghai/Shenzhen connect flows in the past week. We estimate the outflows to be USD1.8bn and highlight flows for CATL.

Ke Yan, CFA, FRM

Northbound Flows (Jun 21st): Seres, Luxshare Precision, Zhongji Innolight, Eoptolink, Moutai, Midea

We analyzed northbound Shanghai/Shenzhen connect flows in the past week and highlight flows for Seres, Luxshare Precision, Zhongji Innolight,...

Ke Yan, CFA, FRM

Mainland Connect NORTHBOUND Flows (To 14 June 2024): Large Tech Buying, Large Consumer Selling

Mainland Connect NORTHBOUND flows this past 4-day week were heavily to the sell side. Consumer Staples/Discretionary were HUGE net sells. Tech was...

Travis Lundy

Cofco Joycome is well-positioned for China's hog cycle upturn, potential supply disruption from anti-dumping investigation into EU pork. Peers...