Asian Hedge Fund Manager, Long Short Equity, Macro

David Mudd

Cross Asset Strategy

<ul>
<li>China State Construction International and Sinopec Engineering have short term reversal patterns indicating profit taking from recent advances.</li>
<li>China Resources Cement reverses downtrend with volume indicating some near term gains after reporting that 1st half profit was under pressure.</li>
<li>Yum China continues to show downward pressure given the increasing competition in the retail food segment, while Nongfu Spring collapses on news about the safety of its products.</li>
</ul>


China State Construction International and Sinopec Engineering have short term reversal patterns indicating profit taking from recent advances.
China Resources Cement reverses downtrend with volume indicating some near term gains after reporting that 1st half profit was under pressure.
Yum China continues to show downward pressure given the increasing competition in the retail food segment, while Nongfu Spring collapses on news about the safety of its products.


Technically Speaking: Breakouts & Breakdowns: HONG KONG (July 17)

Articles from Caixin Global, Caixin Global

Caixin Global

Articles from Caixin Global

Caixin is a media group dedicated to providing financial and business news through periodicals, online content, mobile apps, conferences, books and TV/video programs. Caixin aims to blaze a trail that helps traditional media prosper in the new media age through integrated multimedia platforms.

News from Caixin

<ul><li>Deposits /In Depth: Battle for China’s deposits pits banks against regulators</li><li>Analysis: Why China’s GDP growth slowed in second quarter</li><li>Bonds /: PBOC reaffirms commitment to stabilizing bond market as rally persists</li></ul>

Deposits /In Depth: Battle for China’s deposits pits banks against regulatorsAnalysis: Why China’s GDP growth slowed in second quarterBonds /: PBOC reaffirms commitment to stabilizing bond market as rally persists

CX Daily: Battle for China’s Deposits Pits Banks Against Regulators 

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 Hong Kong Connect flows with our data engine for holding position as of July 12th.</li>
<li>The top stocks by inflows and outflows were tabulated for all market, HSCEI, mid cap and s/mid cap groups.</li>
<li>We estimate the inflows to be USD 580m and highlight flows for ICBC (1398 HK).</li>
</ul>


We analyze the weekly Hong Kong Connect flows with our data engine for holding position as of July 12th.
The top stocks by inflows and outflows were tabulated for all market, HSCEI, mid cap and s/mid cap groups.
We estimate the inflows to be USD 580m and highlight flows for ICBC (1398 HK).


Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>The Toyota Group cross-holding ecosystem is in flux. They started with a small announcement by <a href="https://www.smartkarma.com/entities/aisin-corp" target="_blank" data-smartkarma-citation="entities:11809:1" rel="noopener">Aisin (7259 JP)</a> but moves have come fast and furious.</li>
<li>Apparently minorities are grumbling to the SFC about the low-balled Offer for <a href="https://www.smartkarma.com/entities/asia-cement-china-holdings" target="_blank" data-smartkarma-citation="entities:3374:1" rel="noopener">Asia Cement China (743 HK)</a>. And for good reason. The best course of action? Vote against the Scheme.</li>
<li>
<a href="https://www.smartkarma.com/entities/hanwha-corporation" target="_blank" data-smartkarma-citation="entities:10619:1" rel="noopener">Hanwha Corporation (000880 KS)</a> is trading at a steep NAV discount. And the controlling family is making  a partial Offer to gain majority control. </li>
</ul>


The Toyota Group cross-holding ecosystem is in flux. They started with a small announcement by Aisin (7259 JP) but moves have come fast and furious.
Apparently minorities are grumbling to the SFC about the low-balled Offer for Asia Cement China (743 HK). And for good reason. The best course of action? Vote against the Scheme.

Hanwha Corporation (000880 KS) is trading at a steep NAV discount. And the controlling family is making  a partial Offer to gain majority control. 


Last Week in Event SPACE: Toyota, Asia Cement, Hanwha Corp, Kokusai Electric, Keisei Electric

Analyst

Steve Zhou, CFA

Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/nongfu-spring-co-ltd" target="_blank" data-smartkarma-citation="entities:28955:1" rel="noopener">Nongfu Spring (9633 HK)</a> announced a set of strong 2023 results last week, with 2H23 net profit up 62% yoy and sales up 33% yoy.  </li>
<li>The best performing category in 2023 has been tea beverage products (30% of sales), which grew 83% yoy for the year and 105% yoy in 2H23, picking up speed.</li>
<li>Nongfu Spring is trading at 33x 2024 earnings, which I believe is attractive. </li>
</ul>



Nongfu Spring (9633 HK) announced a set of strong 2023 results last week, with 2H23 net profit up 62% yoy and sales up 33% yoy.  
The best performing category in 2023 has been tea beverage products (30% of sales), which grew 83% yoy for the year and 105% yoy in 2H23, picking up speed.
Nongfu Spring is trading at 33x 2024 earnings, which I believe is attractive. 


Nongfu Spring (9633 HK):  Strong Results Overshadowed By Short Term Negative Publicitiy

China

Luzhou Laojiao Co., Ltd. manufactures and sells spirits products worldwide. The Company also produces glass products, manages hotels, and invests in the real estate business.

Shanxi Xinghuacun Fen Wine Factory Co., Ltd. operates in the winery business. The Company's products include Fen wine, Zhuyeqing, and other white spirits.

Shanxi Xinghuacun Fen Wine Factory Co (600809 CH)

Wuliangye Yibin Co., Ltd. manufactures and markets Wuliangye series of liquors. Through its subsidiaries, the Company also manufactures carbon and lactic acid and has operation in printing and packaging materials businesses.

Jiangsu Yanghe Brewery Joint-Stock Company Ltd. manufactures spirits. The Company's products include white spirits, top-graded gifts liquor, and liquor for daily consumption.

Tsingtao Brewery Company Limited produces and distributes beer products.  The Company markets its products throughout China and around the world under the Tsingtao Beer brand name.

Jiangsu King's Luck Brewery JSC Ltd. operates as a wine company. The Company produces and distributes wine, liquor, and other related products.

Jiangsu King's Luck Brewery JS (603369 CH)

Budweiser Brewing Company APAC Limited is a company principally engaged in the brewing and distribution of beer. The Company produces, imports, markets, distributes over 50 brands including Budweiser, Stella Artois, Corona, Hoegaarden, Cass, and Harbin. The principal markets include China, South Korea, India and Vietnam.

Anhui Gujing Distillery Co., Ltd. produces and markets distilled spirits and wine.

Anhui Yingjia Distillery Co., Ltd. develops, produces and sells liquor products. The Company operates in China.

Beijing Yanjing Brewery Co., Ltd. operates in the brewery industry.  The Company's products include beer, spring water, beer raw materials, feeds, yeast, and other related products.

Beijing Yanjing Brewery Co, Ltd. (000729 CH)

Diageo plc produces, distills and markets alcoholic beverages.  The Company offers a wide range of branded beverages, including vodkas, whiskeys, tequilas, gins, and beer.

Brown-Forman Corporation manufactures, bottles, imports, exports, and markets a wide variety of alcoholic beverage brands. The Company's products include branded whiskey, vodka, wines, tequila, bourbon, and gin.

Monster Beverage Corporation is a holding company based in Corona, California. The Company, through its consolidated subsidiaries, markets and distributes energy drinks worldwide.

Coca-Cola Enterprises Inc. markets, sells, manufactures, and distributes non-alcoholic beverages.  The Company provides refreshments, including sparkling waters, juices, isotonics, teas, and sodas.  Coca-Cola Enterprises operates internationally.

Constellation Brands, Inc. produces and markets alcoholic beverages in North America, Europe, and Australia, and New Zealand. The Company has a portfolio of brands across the wine, imported beer, and distilled spirits categories. Constellation conducts its business through wholly owned subsidiaries as well as through a variety of joint ventures with various other entities.

Asahi Group Holdings, Ltd. produces beer and other beverages including non-alcoholic drinks. The Company sells its products in Japan and overseas.

Keurig Dr Pepper Inc. manufactures and distributes non-alcoholic beverages. The Company offers soft drinks, juices, teas, mixers, water, and other beverages. Keurig Dr Pepper serves customers in the United States, Canada, and Mexico.

Heineken NV produces and distributes beverages internationally. The Company produces beers, spirits, wines, and soft drinks under various brand names.

Heineken Holding NV, through its subsidiary produces and distributes beverages internationally.  The Company produces beers, spirits, wines, and soft drinks under various brand names. Heineken operates through numerous subsidiaries and associated companies worldwide.

Pernod Ricard SA produces wines and spirits.  The Company produces wines, bitters, whiskies, anis-based spirits, liqueurs, cognacs and brandies, and white spirits and rums.  Pernod Ricard markets its products worldwide.

Nongfu Spring Co. Ltd. supplies soft drinks. The Company develops, produces, and sells bottled mineral water, fruit juice, sports drinks, and tea drinks. Nongfu Spring also offers barreled mineral water door-to-door services.

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Nongfu Spring (9633 HK)

Technically Speaking: Breakouts & Breakdowns: HONG KONG (July 17)

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We analyzed southbound Hong Kong connect flows in the past week. We estimate that there were inflows of USD 580.9 million and highlight flows for...

Ke Yan, CFA, FRM

Last Week in Event SPACE: Toyota, Asia Cement, Hanwha Corp, Kokusai Electric, Keisei Electric

The weekend is here! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed...

David Blennerhassett