Managing Director, Zero One, Zero One

Vincent Fernando, CFA

Managing Director, Zero One

Equity Bottom-Up

<ul>
<li>Apple shares have fallen recently, nearing 52-week lows as analysts have been cutting share targets on China production uncertainty and weak consumer end-market demand.</li>
<li>Key Apple suppliers Quanta and Pegatron, in particular, appear to have not yet reacted to the declining market sentiment towards Apple.</li>
<li>Investors can consider Shorting Quanta and Pegatron vs. a Long position in Apple. We see limited potential for positive news flow for the stocks through January.</li>
</ul>


Apple shares have fallen recently, nearing 52-week lows as analysts have been cutting share targets on China production uncertainty and weak consumer end-market demand.
Key Apple suppliers Quanta and Pegatron, in particular, appear to have not yet reacted to the declining market sentiment towards Apple.
Investors can consider Shorting Quanta and Pegatron vs. a Long position in Apple. We see limited potential for positive news flow for the stocks through January.


Taiwan Apple Ecosystem Monitor: Quanta and Pegatron Shares Lagging Apple Decline?

Global Emerging Market Equities, Propitious Research

Wium Malan, CFA

Global Emerging Market Equities

Independent, Fundamental Quantitative Research

Propitious Research

Fully independent, fundamental and quantitative equity research, focused on companies in the Telecommunication, Media, Technology, Internet and Healthcare sectors in the Global Emerging Markets. Idea generation focused on Quality stocks, trading below their intrinsic Value, with sound Corporate Governance.

Thematic (Sector/Industry)

<ul>
<li>The 200 largest weighted companies in the GEM index reported average EPS growth of +12.8%y/y for 3Q22-to-date, a significant slowdown from what was reported for 2Q22.</li>
<li>60% of companies delivered positive sales surprise, same as in 2Q22, whilst 65% delivered positive EPS surprise, up from 56% in 2Q22.</li>
<li>Historically, there has been a significant difference in relative share price performance between the largest positive versus negative surprise generators, for 3 months after the reporting date.</li>
</ul>


The 200 largest weighted companies in the GEM index reported average EPS growth of +12.8%y/y for 3Q22-to-date, a significant slowdown from what was reported for 2Q22.
60% of companies delivered positive sales surprise, same as in 2Q22, whilst 65% delivered positive EPS surprise, up from 56% in 2Q22.
Historically, there has been a significant difference in relative share price performance between the largest positive versus negative surprise generators, for 3 months after the reporting date.


Global Emerging Markets: Reporting Season Summary, 3Q2022

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 analyzed the changes in short interest of TWSE Stocks as of Sep 30th which has an aggregated short interest worth USD12.0bn.</li>
<li>We tabulate league table for top short by value and short as multiple of ADT, as well as weekly increases &amp; decreases in short value, short as multiple of ADT.</li>
<li>We highlight short interest changes in Evergreen Marine, Quanta computer, Cathay Financial, Fubon Financial, Largan Precision.</li>
</ul>


We analyzed the changes in short interest of TWSE Stocks as of Sep 30th which has an aggregated short interest worth USD12.0bn.
We tabulate league table for top short by value and short as multiple of ADT, as well as weekly increases &amp; decreases in short value, short as multiple of ADT.
We highlight short interest changes in Evergreen Marine, Quanta computer, Cathay Financial, Fubon Financial, Largan Precision.


TWSE Short Interest Weekly (Sep 30th): Evergreen Marine, Quanta, Cathay, Fubon, Largan

<ul>
<li>A week that started negative was saved by a stronger outlook from Apple</li>
<li>Electric vehicles remain a source of strong demand for both hardware and semiconductors</li>
<li>Hardware earnings season is coming in stronger than that for semiconductors</li>
</ul>


A week that started negative was saved by a stronger outlook from Apple
Electric vehicles remain a source of strong demand for both hardware and semiconductors
Hardware earnings season is coming in stronger than that for semiconductors


Taiwan Tech Weekly - Buoyed by Apple Outlook

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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Event-Driven

<ul>
<li>As expected, <a href="https://www.smartkarma.com/entities/lenovo-group-ltd" target="_blank" data-smartkarma-citation="entities:13359:1" rel="noopener">Lenovo (992 HK)</a> will replace <a href="https://www.smartkarma.com/entities/hansoh-pharmaceutical-group" target="_blank" data-smartkarma-citation="entities:23675:1" rel="noopener">Hansoh Pharmaceutical (3692 HK)</a> in the <a href="https://www.smartkarma.com/entities/hang-seng-china-enterprises-index" target="_blank" data-smartkarma-citation="entities:22900:1" rel="noopener">Hang Seng China Enterprises Index (HSCEI INDEX)</a> after the close of trading on 10 June.</li>
<li>
<a href="https://www.smartkarma.com/entities/sunac-china-holdings-ltd" target="_blank" data-smartkarma-citation="entities:240:1" rel="noopener">Sunac China Holdings (1918 HK)</a> has been kept in the index for now, though suspension till 30 June will see it deleted early July.</li>
<li>Changes to the stocks, number of shares, float and capping results in an estimated one-way turnover of 3.7% and will result in a one-way trade of HK$2,977m.</li>
</ul>


As expected, Lenovo (992 HK) will replace Hansoh Pharmaceutical (3692 HK) in the Hang Seng China Enterprises Index (HSCEI INDEX) after the close of trading on 10 June.

Sunac China Holdings (1918 HK) has been kept in the index for now, though suspension till 30 June will see it deleted early July.
Changes to the stocks, number of shares, float and capping results in an estimated one-way turnover of 3.7% and will result in a one-way trade of HK$2,977m.


HSCEI Index Rebalance: Lenovo In, Hansoh Out; Sunac Survives (For Now)

Taiwan

Quanta Computer Inc. manufactures and markets notebook computers and related peripheral equipment.

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Quanta Computer (2382 TT)

Taiwan Apple Ecosystem Monitor: Quanta and Pegatron Shares Lagging Apple Decline?

Apple shares have fallen most recently, nearing 52-week lows as analysts have been cutting share targets on China production uncertainty.

Vincent Fernando, CFA

Global Emerging Markets: Reporting Season Summary, 3Q2022

In this quarterly insight, we analyse recent GEM reporting trends with reference to Sales- and EPS growth, size and percentage of positive...

Wium Malan, CFA

TWSE Short Interest Weekly (Sep 30th): Evergreen Marine, Quanta, Cathay, Fubon, Largan

We analyzed TWSE short interest report for the past week and highlight short interest changes in Evergreen Marine, Quanta computer, Cathay...

Ke Yan, CFA, FRM

Taiwan Tech Weekly - Buoyed by Apple Outlook

How stronger Apple outlook has helped support the hardware and semiconducotor space and where the earnins season is performing best so far

Vincent Fernando, CFA

HSCEI Index Rebalance: Lenovo In, Hansoh Out; Sunac Survives (For Now)

As expected, Lenovo will replace Hansoh Pharma in the HSCEI at the close on 10 June. Sunac stays in the index for now but could be deleted in July....

Brian Freitas

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