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

Actionable Charts from Smart Karma’s Most-Searched Tickers.We ran through a list of the most frequently searched tickers on the SmartKarma platform using the Discovery Tool.  See the attached report for a complete list of our recommendations from this list.

Actionable Charts from Smart Karma’s Most-Searched Tickers.We ran through a list of the most frequently searched tickers on the SmartKarma platform using the Discovery Tool.  See the attached report for a complete list of our recommendations from this list.

MD, Blue Lotus Research Institute

Gu Jun, CFA

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

Equity Bottom-Up

We think Muddy Water did not touch the main business part of TAL. Questioning these 2 deals shows MW does not understand the business logic behind the deals ＆ financial numbers, also not have the background knowledge of the private education deal market in China during 2014-2016.Not impressed by the part 1. We are looking forward to part 2 and part 3 of MW reports. TAL. Especially if that includes Peiyou course, which is TAL core business.

We think Muddy Water did not touch the main business part of TAL. Questioning these 2 deals shows MW does not understand the business logic behind the deals ＆ financial numbers, also not have the background knowledge of the private education deal market in China during 2014-2016.Not impressed by the part 1. We are looking forward to part 2 and part 3 of MW reports. TAL. Especially if that includes Peiyou course, which is TAL core business.

TAL (TAL：US）—— While We Look into the Muddy Water

Overseas Chinese Equities, Aequitas Research

Ming Lu

Overseas Chinese Equities

We are not going to analyze Muddy Waters’ 70-page report item by item.  But after we tell you the whole picture, we believe you will agree that it is unnecessary to read Muddy Waters' report. <figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/055/205/original/Pic%201.PNG?1529000616" class="editor-image img-responsive" data-smartkarma-image-id="55205"></figure>TAL’s stock price tumbled 10% yesterday, after a short seller Muddy Waters alleged that TAL inflated its earnings. (Exhibit 1) Muddy Waters said that TAL created profits as early as fiscal year 2016, which is from March 2015 to February 2016.We believe that Muddy Waters could have been a hero, if it had…

We are not going to analyze Muddy Waters’ 70-page report item by item.  But after we tell you the whole picture, we believe you will agree that it is unnecessary to read Muddy Waters' report. TAL’s stock price tumbled 10% yesterday, after a short seller Muddy Waters alleged that TAL inflated its earnings. (Exhibit 1) Muddy Waters said that TAL created profits as early as fiscal year 2016, which is from March 2015 to February 2016.We believe that Muddy Waters could have been a hero, if it had…

TAL Education (TAL) – Short Seller Muddy Waters, Not a Hero, But a Free Rider

APAC IPOs & Placements

Zhen Zhou, Toh

Smartkarma

Smartkarma unites the fragmented investment industry, connecting institutional investors, independent research providers, and corporates within a single network.

Research Reinvented

Equity Capital Markets

<a href="https://www.smartkarma.com/entities/27137" target="_blank" data-smartkarma-citation="entities:27137:1">Puxin Ltd (NEW US)</a> is looking to raise up to US$144m in its upcoming IPO. Proceeds will be mostly used for strategic acquisitions with any remaining cash used for general corporate purposes.Adding up all the acquisitions that the company has made since 2015 implies that the company is asking for an IPO valuation that is 4.9x of its total acquisition costs. Even if we assume that the acquisitions from 2015 and 2016 have grown by 5x, investors are essentially paying for a valuation that implies that Puxin can grow its FY2017 acquisitions by 4.8x which seems to be a stretch given the limited track record of the company.In this insight, we will be looking at the company's overall financial performance, examine its acquisitions, compare the company against listed education peers. As usual, we will also run the deal through our ECM framework.

Puxin Ltd (NEW US) is looking to raise up to US$144m in its upcoming IPO. Proceeds will be mostly used for strategic acquisitions with any remaining cash used for general corporate purposes.Adding up all the acquisitions that the company has made since 2015 implies that the company is asking for an IPO valuation that is 4.9x of its total acquisition costs. Even if we assume that the acquisitions from 2015 and 2016 have grown by 5x, investors are essentially paying for a valuation that implies that Puxin can grow its FY2017 acquisitions by 4.8x which seems to be a stretch given the limited track record of the company.In this insight, we will be looking at the company's overall financial performance, examine its acquisitions, compare the company against listed education peers. As usual, we will also run the deal through our ECM framework.

Puxin Education IPO Review - Asking for 4.9x of Company's Total Acquisition Cost Since 2015

Thematic (Sector/Industry)

The key to understand education:(1) resource imbalance creates demand for after-school tutoring and in-school teaching. It will persist,(2) burden reduction is for real because China’s birth rate is dangerously low,(3) product will change from after-school tutoring to after-school tutoring+activities,(4) in-school teaching will also see less standardization in products,(5) but channel superiority, not product, is the key success factor in education so EDU and TAL still rule,(6) margin might deteriorate due to reduction in standardization but technology will improve margin,(7) speed of this happening is the key,(8) scalability is the problem for most in-school-teaching institutions. In the long run, we still prefer TAL and EDU.

The key to understand education:(1) resource imbalance creates demand for after-school tutoring and in-school teaching. It will persist,(2) burden reduction is for real because China’s birth rate is dangerously low,(3) product will change from after-school tutoring to after-school tutoring+activities,(4) in-school teaching will also see less standardization in products,(5) but channel superiority, not product, is the key success factor in education so EDU and TAL still rule,(6) margin might deteriorate due to reduction in standardization but technology will improve margin,(7) speed of this happening is the key,(8) scalability is the problem for most in-school-teaching institutions. In the long run, we still prefer TAL and EDU.

China

New Oriental Education & Technology Group, Inc. offers educational services. The Company offers foreign language training, test preparation courses for admissions and assessment tests in the United States, the PRC and Commonwealth countries, primary and secondary school education, and other services. New Oriental Education & Technology Group also operates software development.

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New Oriental Education & Techn (EDU US)

Popular Stocks, Attractive Charts

Actionable Charts from Smart Karma’s Most-Searched Tickers.We ran through a list of the most frequently searched tickers on the SmartKarma platform...

Vermilion Research

TAL (TAL：US）—— While We Look into the Muddy Water

We think Muddy Water did not touch the main business part of TAL. Questioning these 2 deals shows MW does not understand the business logic behind...

Blue Lotus Research Institute

TAL Education (TAL) – Short Seller Muddy Waters, Not a Hero, But a Free Rider

We are not going to analyze Muddy Waters’ 70-page report item by item. But after we tell you the whole picture, we believe you will agree that it...

Ming Lu

Puxin Education IPO Review - Asking for 4.9x of Company's Total Acquisition Cost Since 2015

Puxin Ltd (NEW US) is looking to raise up to US$144m in its upcoming IPO. Proceeds will be mostly used for strategic acquisitions with any...

Zhen Zhou, Toh

China Education Sector Update

The key to understand education:(1) resource imbalance creates demand for after-school tutoring and in-school teaching. It will persist,(2) burden...

Blue Lotus Research Institute

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