Macro & Asian equity Technical Strategies, BBSP Asia

Federico D'Inca

Macro & Asian equity Technical Strategies

BBSP Asia

Technical Analysis

Sony Financial Holdings / Technical Analysis

Mid Term Country Allocation (Tactical view) in terms of Relative Value vs MXAP • HSCEI/MXAP ratio is moving in a range pattern. Therefore downgrade HSCEI from increase exposure to hold. While HSI/MXAP ratio remains above a trend line support (preference for a tactical HSI outperformance over HSCEI). • Keep “overweight” position on HSI, Nikkei, ASX and TWSE. • Maintain “Hold for KOSPI and Nifty vs MXAPShould you have any questions and wish to speak with one of our analysts, please don’t hesitate to…

Mid Term Country Allocation (Tactical view) in terms of Relative Value vs MXAP • HSCEI/MXAP ratio is moving in a range pattern. Therefore downgrade HSCEI from increase exposure to hold. While HSI/MXAP ratio remains above a trend line support (preference for a tactical HSI outperformance over HSCEI). • Keep “overweight” position on HSI, Nikkei, ASX and TWSE. • Maintain “Hold for KOSPI and Nifty vs MXAPShould you have any questions and wish to speak with one of our analysts, please don’t hesitate to…

BBSP Equity Asia Weekly Research 10th January 2018

Quantamental Researcher, JD Finance Quantamental Research

Ben Li

Quantamental Researcher

JD Finance Quantamental Research

JD Finance Big Data Quantamental Research is a data and insight provider of proprietary online eCommerce data, under the arm of big data analytics team in JD Finance. JD Finance is an affiliate of US listed JD, a leading eCommerce player in China. It is one of the largest fintech companies in China, with business spanning across consumer loans, fund distribution, and quantitative strategy research. 

Thematic (Sector/Industry)

<ul><li>Air Conditioner y/y growth further accelerated in October, sales went up by 129%</li><li>Sales of Flat-panel TV picked up; share of leading traditional TV companies reached a new high</li><li>ASPs of all four major home appliance sectors increased by more than 10% vs year ago, driven by both price increase and consumption upgrade</li><li>The slowdown in the real estate market will likely have a negative impact on Air Conditioner sales in 2018</li></ul>Related tickers: <a href="https://www.smartkarma.com/entities/7622" target="_blank" data-smartkarma-citation="entities:7622:1">Gree Electric Appliances Inc Of Zhuhai (000651 CH)</a>, <a href="https://www.smartkarma.com/entities/16185" target="_blank" data-smartkarma-citation="entities:16185:1">Midea Group Co Ltd A (000333 CH)</a>, <a href="https://www.smartkarma.com/entities/20107" target="_blank" data-smartkarma-citation="entities:20107:1">Hisense Kelon Elec Hld H (921 HK)</a>, <a href="https://www.smartkarma.com/entities/7196" target="_blank" data-smartkarma-citation="entities:7196:1">Qingdao Haier Co Ltd A (600690 CH)</a>, <a href="https://www.smartkarma.com/entities/26046" target="_blank" data-smartkarma-citation="entities:26046:1">Wuxi Little Swan Co Ltd (000418 CH)</a>, <a href="https://www.smartkarma.com/entities/19424" target="_blank" data-smartkarma-citation="entities:19424:1">Hisense Electric Co Ltd A (600060 CH)</a>, <a href="https://www.smartkarma.com/entities/13735" target="_blank" data-smartkarma-citation="entities:13735:1">Skyworth Digital Co Ltd A (000810 CH)</a>, <a href="https://www.smartkarma.com/entities/15654" target="_blank" data-smartkarma-citation="entities:15654:1">TCL Multimedia Technology (1070 HK)</a>, <a href="https://www.smartkarma.com/entities/17702" target="_blank" data-smartkarma-citation="entities:17702:1">Sichuan Changhong Electric Co., Ltd. (600839 CH)</a>Please feel free to contact us for specific data requests.

Air Conditioner y/y growth further accelerated in October, sales went up by 129%Sales of Flat-panel TV picked up; share of leading traditional TV companies reached a new highASPs of all four major home appliance sectors increased by more than 10% vs year ago, driven by both price increase and consumption upgradeThe slowdown in the real estate market will likely have a negative impact on Air Conditioner sales in 2018Related tickers: Gree Electric Appliances Inc Of Zhuhai (000651 CH), Midea Group Co Ltd A (000333 CH), Hisense Kelon Elec Hld H (921 HK), Qingdao Haier Co Ltd A (600690 CH), Wuxi Little Swan Co Ltd (000418 CH), Hisense Electric Co Ltd A (600060 CH), Skyworth Digital Co Ltd A (000810 CH), TCL Multimedia Technology (1070 HK), Sichuan Changhong Electric Co., Ltd. (600839 CH)Please feel free to contact us for specific data requests.

Pre-Singles Day Online Major Home Appliance Sales in China – AC Maintained the Strong Performance

Asian Insight Provider - Actionable ideas, CrossASEAN Research

Henry Soediarko

Asian Insight Provider - Actionable ideas

Everyone has been talking about the onset of the WMPs failure that could unleash the grand scale sub-prime crisis like and about how a 2% impairment could wipe out the smaller to medium sized Chinese banks. This report aims to answer how much are the smaller Chinese banks exposed to the WMPs. A further analysis reveals that certain Chinese property developers such as <a href="https://www.smartkarma.com/entities/479" target="_blank" data-smartkarma-citation="entities:479:1">Evergrande Real Estate Group Limited (3333 HK)</a>, <a href="https://www.smartkarma.com/entities/18368" target="_blank" data-smartkarma-citation="entities:18368:1">China Vanke Co Ltd (H) (2202 HK)</a> and white goods manufacturer <a href="https://www.smartkarma.com/entities/7196" target="_blank" data-smartkarma-citation="entities:7196:1">Qingdao Haier Co Ltd A (600690 CH)</a> are major shareholders of these banks.The magnitude of how WMPs default can negatively impact the share price of these small banks is scary. Due to the cross-shareholding, it could be a salt-in-the-wound moment for the above-mentioned shareholders. <table class="table table-striped"><colgroup></colgroup><tbody><tr><td style="width: 273px;">Bank Name</td><td style="text-align: right; width: 194px;">Balance Sheet Exp to Mkt Cap</td><td style="text-align: right; width: 223px;">Off Balance Sheet Exp to Mkt Cap</td><td style="text-align: right; width: 158px;">Total Exposure to Mkt Cap</td></tr><tr><td style="width: 273px;"><a href="https://www.smartkarma.com/entities/23735" target="_blank" data-smartkarma-citation="entities:23735:1">Jilin Jiutai Rural Comm Bank (6122 HK)</a></td><td style="text-align: right; width: 194px;">92%</td><td style="text-align: right; width: 223px;">130%</td><td style="text-align: right; width: 158px;">222%</td></tr><tr><td style="width: 273px;"><a href="https://www.smartkarma.com/entities/96" target="_blank" data-smartkarma-citation="entities:96:1">Shengjing Bank Co Ltd H (2066 HK)</a></td><td style="text-align: right; width: 194px;">743%</td><td style="text-align: right; width: 223px;">747%</td><td style="text-align: right; width: 158px;">1489%</td></tr><tr><td style="width: 273px;"><a href="https://www.smartkarma.com/entities/21011" target="_blank" data-smartkarma-citation="entities:21011:1">Bank Of Qingdao Co Ltd (3866 HK)</a></td><td style="text-align: right; width: 194px;">281%</td><td style="text-align: right; width: 223px;">584%</td><td style="text-align: right; width: 158px;">865%</td></tr><tr><td style="width: 273px;"><a href="https://www.smartkarma.com/entities/22636" target="_blank" data-smartkarma-citation="entities:22636:1">China Zheshang Bank Co Ltd (2016 HK)</a></td><td style="text-align: right; width: 194px;">834%</td><td style="text-align: right; width: 223px;">809%</td><td style="text-align: right; width: 158px;">1643%</td></tr><tr><td style="width: 273px;"><a href="https://www.smartkarma.com/entities/652" target="_blank" data-smartkarma-citation="entities:652:1">Huishang Bank Corp Ltd H (3698 HK)</a></td><td style="text-align: right; width: 194px;">676%</td><td style="text-align: right; width: 223px;">205%</td><td style="text-align: right; width: 158px;">881%</td></tr></tbody></table>

Everyone has been talking about the onset of the WMPs failure that could unleash the grand scale sub-prime crisis like and about how a 2% impairment could wipe out the smaller to medium sized Chinese banks. This report aims to answer how much are the smaller Chinese banks exposed to the WMPs. A further analysis reveals that certain Chinese property developers such as Evergrande Real Estate Group Limited (3333 HK), China Vanke Co Ltd (H) (2202 HK) and white goods manufacturer Qingdao Haier Co Ltd A (600690 CH) are major shareholders of these banks.The magnitude of how WMPs default can negatively impact the share price of these small banks is scary. Due to the cross-shareholding, it could be a salt-in-the-wound moment for the above-mentioned shareholders. Bank NameBalance Sheet Exp to Mkt CapOff Balance Sheet Exp to Mkt CapTotal Exposure to Mkt CapJilin Jiutai Rural Comm Bank (6122 HK)92%130%222%Shengjing Bank Co Ltd H (2066 HK)743%747%1489%Bank Of Qingdao Co Ltd (3866 HK)281%584%865%China Zheshang Bank Co Ltd (2016 HK)834%809%1643%Huishang Bank Corp Ltd H (3698 HK)676%205%881%

WMP Exposure in Smaller Banks in China & Who Are The Banks' Shareholders

Leading Independent Investment Research, Morningstar, Inc.

Morningstar

Leading Independent Investment Research

Morningstar, Inc.

Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. We offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors. 

Morningstar provides data on more than 500,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 16 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries, with more than $180 billion in assets under advisement or management as of June 30, 2015. We have operations in 27 countries.

Download the Morningstar Fact Sheet : http://corporate.morningstar.com/US/documents/MarketingFactSheets/AboutMorningstarFactsheet.pdf

This week the Macau government proposed to the Second Standing Committee of Macau Legislative Assembly to allow smoking only in smoking lounges in casinos effective on Jan. 1, 2019, one year later than our existing expectation. Our current forecasts across our narrow moat coverage universe already factor in a negative mid-single-digit percentage point impact to VIP play in 2018, and postponing that one year is not expected to have any significant impact to our fair value estimates. Our current fair value estimates per share are HKD 17 for <a href="https://www.smartkarma.com/entities/472" target="_blank" data-smartkarma-citation="entities:472:1">MGM China Holdings Ltd (2282 HK)</a>, HKD 36 for <a href="https://www.smartkarma.com/entities/182" target="_blank" data-smartkarma-citation="entities:182:1">Sands China Ltd (1928 HK)</a>, HKD 14 for <a href="https://www.smartkarma.com/entities/473" target="_blank" data-smartkarma-citation="entities:473:1">Wynn Macau Ltd (1128 HK)</a>, USD 17 for <a href="https://www.smartkarma.com/entities/810" target="_blank" data-smartkarma-citation="entities:810:1">Melco Crown Entertainment ADR (MPEL US)</a>, HKD 36 for <a href="https://www.smartkarma.com/entities/806" target="_blank" data-smartkarma-citation="entities:806:1">Galaxy Entertainment Group Limited (27 HK)</a>, HKD 6.6 for <a href="https://www.smartkarma.com/entities/805" target="_blank" data-smartkarma-citation="entities:805:1">SJM Holdings Ltd (880 HK)</a>, $133 for <a href="https://www.smartkarma.com/entities/606" target="_blank" data-smartkarma-citation="entities:606:1">Wynn Resorts Ltd (WYNN US)</a>, $56 for <a href="https://www.smartkarma.com/entities/807" target="_blank" data-smartkarma-citation="entities:807:1">Las Vegas Sands Corp (LVS US)</a>, and $29.50 for <a href="https://www.smartkarma.com/entities/16227" target="_blank" data-smartkarma-citation="entities:16227:1">MGM Resorts International (MGM US)</a>. We continue to see Wynn trading at an attractive margin of safety.The revised bill creates a level playing field for casino operators. We have confirmed with a Macau legislative assembly member that the revised bill outlines that all VIP smoking gaming areas will be closed and that all casinos will be able to establish smoking lounges on both VIP and mass gaming floors. Therefore, under the proposed bill newer casinos will be able to establish smoking lounges in VIP gaming areas, while the older casinos will lose the smoking premium mass and VIP smoking area. As a result, Cotai casinos as a whole stand to gain market share at the expense of Macau peninsula casinos.Analyst: Chelsea Tam

This week the Macau government proposed to the Second Standing Committee of Macau Legislative Assembly to allow smoking only in smoking lounges in casinos effective on Jan. 1, 2019, one year later than our existing expectation. Our current forecasts across our narrow moat coverage universe already factor in a negative mid-single-digit percentage point impact to VIP play in 2018, and postponing that one year is not expected to have any significant impact to our fair value estimates. Our current fair value estimates per share are HKD 17 for MGM China Holdings Ltd (2282 HK), HKD 36 for Sands China Ltd (1928 HK), HKD 14 for Wynn Macau Ltd (1128 HK), USD 17 for Melco Crown Entertainment ADR (MPEL US), HKD 36 for Galaxy Entertainment Group Limited (27 HK), HKD 6.6 for SJM Holdings Ltd (880 HK), $133 for Wynn Resorts Ltd (WYNN US), $56 for Las Vegas Sands Corp (LVS US), and $29.50 for MGM Resorts International (MGM US). We continue to see Wynn trading at an attractive margin of safety.The revised bill creates a level playing field for casino operators. We have confirmed with a Macau legislative assembly member that the revised bill outlines that all VIP smoking gaming areas will be closed and that all casinos will be able to establish smoking lounges on both VIP and mass gaming floors. Therefore, under the proposed bill newer casinos will be able to establish smoking lounges in VIP gaming areas, while the older casinos will lose the smoking premium mass and VIP smoking area. As a result, Cotai casinos as a whole stand to gain market share at the expense of Macau peninsula casinos.Analyst: Chelsea Tam

Expected Macau Smoking Ban Creates a Level Playing Field for Operators

Investing in high growth Asian frontier economies., Asia Frontier Capital

Scott Osheroff

Investing in high growth Asian frontier economies.

Asia Frontier Capital

Asia Frontier Capital Ltd. is a pioneering fund management company based in Hong Kong that specializes in investing in high growth Asian frontier economies by managing the AFC Asia Frontier Fund , AFC Iraq Fund and the AFC Vietnam Fund.

The AFC Asia Frontier Fund invests in public equities of Asian frontier countries that are seeing increasing consumption due to favorable demographic trends, rising incomes and high GDP growth. The fund invests in listed equities of companies that have their principal business activities in Bangladesh, Bhutan, Cambodia, Iraq, Laos, Maldives, Mongolia, Myanmar (Burma), Nepal, Pakistan, Papua New Guinea, Sri Lanka and Vietnam. The AFC Asia Frontier Fund is positioned to take advantage of the continuing economic shifts in these countries and offers high returns combined with significant diversification opportunities. This fund is directed by the founder and CEO of Asia Frontier Capital, Thomas Hugger, who has been investing in frontier markets across Asia and Africa for more than 20 years.

The AFC Iraq Fund was launched on the 26th June 2015 and aims to achieve long-term capital appreciation for investors by capturing value and growth potential in the post conflict high-growth & resource rich Iraq market. The fund emphasises long term investment horizon to truly capture the opportunity in Iraq. The fund's investable universe consists of locally listed companies that have their principal business activities in Iraq as well as foreign listed companies that have the majority of the business in Iraq as a whole including the prosperous Kurdish Region of Iraq (KRI). The AFC Iraq Fund offers access to investments in post conflict recovery potential of Iraq, including the KRI, and/or stability in its territory. The AFC Iraq Fund is managed by Asia Frontier Capital (Iraq) Limited, Cayman Islands under the executive leadership team of Thomas Hugger (CEO & Fund Manager) and Ahmed Tabaqchali (CIO) who have more than 47 years of investment experience as well as an extensive background covering global, emerging, frontier and MENA markets.

The AFC Vietnam Fund invests exclusively in listed Vietnamese equities to capture value in growth companies with a focus on the small to medium size companies. This market segment offers a unique investment opportunity as the valuation gap between large- and small-cap stocks in Vietnam is presently much wider than in comparable neighboring markets and the valuations are significantly depressed versus their regional peers. The fund adopts a fundamental-quantitative approach and employs an in-house earnings model to identify attractive companies where we see high growth opportunities. In conjunction with targeting the maximum upside potential the portfolio has been structured to mitigate corporate government and liquidity risks. The fund invests in a diversified portfolio of 70-90 attractively valued companies to carefully control concentration risk.  This approach allows the fund to sell, or buy, positions without having a significant market impact. The fund is directed under the executive leadership of Thomas Hugger and Andreas Vogelsanger who have more than 50 years combined experience managing investments in frontier markets, Asia and around the world.

For more information about the fund, management team and investment strategy please contact us at info@asiafrontiercapital.com.

In line with our process of being on the ground in the countries we invest in, Scott Osheroff, Analyst at Asia Frontier Capital, traveled to Laos to visit portfolio companies and other companies on our shortlist. The photos in this article are all by AFC.

In line with our process of being on the ground in the countries we invest in, Scott Osheroff, Analyst at Asia Frontier Capital, traveled to Laos to visit portfolio companies and other companies on our shortlist. The photos in this article are all by AFC.

Asia Frontier Capital Travel Report: Laos

China

Haier Smart Home Co. Ltd. manufactures and distributes appliances. The Company produces air conditioners, refrigerators, freezers, small household electrical appliances, and other related products. Haier Smart Home markets its products domestically and internationally.

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Haier Smart Home (600690 CH)

BBSP Equity Asia Weekly Research 10th January 2018

Mid Term Country Allocation (Tactical view) in terms of Relative Value vs MXAP• HSCEI/MXAP ratio is moving in a range pattern. Therefore downgrade...

BBSP Asia

Pre-Singles Day Online Major Home Appliance Sales in China – AC Maintained the Strong Performance

Air Conditioner y/y growth further accelerated in October, sales went up by 129% Sales of Flat-panel TV picked up; share of leading traditional TV...

Ben Li

WMP Exposure in Smaller Banks in China & Who Are The Banks' Shareholders

Everyone has been talking about the onset of the WMPs failure that could unleash the grand scale sub-prime crisis like and about how a 2%...

Henry Soediarko

Expected Macau Smoking Ban Creates a Level Playing Field for Operators

This week the Macau government proposed to the Second Standing Committee of Macau Legislative Assembly to allow smoking only in smoking lounges in...

Morningstar, Inc.

Asia Frontier Capital Travel Report: Laos

In line with our process of being on the ground in the countries we invest in, Scott Osheroff, Analyst at Asia Frontier Capital, traveled to Laos...

Asia Frontier Capital

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