Investment Research - Asia Consumer Sector, Investory

Devi Subhakesan

Investment Research - Asia Consumer Sector

ASIA CONSUMER: INSIGHTS AND INVESTMENT IDEAS

Investory

Investory is a Singapore-based boutique independent equity research firm founded in January 2017 with a primary focus on consumption themes across Asia-Pacific.

We aim to generate investible ideas based on consumption trends and outlook. We screen our ideas on several parameters - product potential, long-term growth and management commitment being the most critical.  We follow a fundamental analysis approach in our stock selection process and are not restricted by market cap.

We aspire to grow into a leading source of unbiased research, free of conflict of interest, for investors yearning for independent and disciplined analysis. 

We also undertake bespoke research mandates to support our Institutional clients’ investment needs.

Our team comprises of professionals with extensive experience in the Asian equity markets, in areas ranging from research, servicing institutional clients and investment management.

Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/saic-motor-corp-ltd-a" target="_blank" data-smartkarma-citation="entities:20833:1" rel="noopener">SAIC Motor (600104 CH)</a>'s  49% subsidiary, JSW MG Motor India, reported that its newly launched MG Windsor EV become the best-selling passenger electric vehicle in India for October.</li>
<li>The MG Windsor EV is driving strong sales in the New Energy Vehicle (NEV) segment, thanks to its innovative Battery-as-a-Service (BaaS) option, which significantly reduces the upfront cost for buyers.</li>
<li>By offering BaaS, JSW MG Motor makes switching to EVs more appealing, as the program decouples the battery cost from the vehicle, enabling a direct comparison with comparable ICE models.</li>
</ul>



SAIC Motor (600104 CH)'s  49% subsidiary, JSW MG Motor India, reported that its newly launched MG Windsor EV become the best-selling passenger electric vehicle in India for October.
The MG Windsor EV is driving strong sales in the New Energy Vehicle (NEV) segment, thanks to its innovative Battery-as-a-Service (BaaS) option, which significantly reduces the upfront cost for buyers.
By offering BaaS, JSW MG Motor makes switching to EVs more appealing, as the program decouples the battery cost from the vehicle, enabling a direct comparison with comparable ICE models.


SAIC Motor (600104 CH): India Sub JSW MG Motor Drives EV Surge with Battery-As-A-Service

Tracking developments across tech supply chains, Tech Supply Chain Tracker

Tech Supply Chain Tracker

Tracking developments across tech supply chains

<ul><li>UK car market sees resurgence as electric vehicles gain popularity at LCV Show, driving up sales and interest in sustainable options.</li><li>SAIC Motor struggles with falling profits and tariffs on electric vehicles, putting financial strain on the company's operations.</li><li>IEDC fosters stronger economic ties between Taiwan and the region through a new office opening, promoting business opportunities and enhancing cooperation.</li></ul>

UK car market sees resurgence as electric vehicles gain popularity at LCV Show, driving up sales and interest in sustainable options.SAIC Motor struggles with falling profits and tariffs on electric vehicles, putting financial strain on the company's operations.IEDC fosters stronger economic ties between Taiwan and the region through a new office opening, promoting business opportunities and enhancing cooperation.

Tech Supply Chain Tracker (05-Sep-2024): UK car market rebounds, EV growth shines at LCV Show.

Asian Hedge Fund Manager, Long Short Equity, Macro

David Mudd

Thematic (Sector/Industry)

<ul>
<li>Baidu announced that the company has seen a rapid uptake in its Robotaxi business on the mainland.</li>
<li>Baidu is at the forefront of the industry globally with its Fully Self Driving taxis available in more than 10 major cities in China.</li>
<li>Baidu's autonomous taxi unit, Apollo Go, has over 100 million kilometers of high-level autonomous safety driving mileage and holds over 5,000 autonomous driving patents.</li>
</ul>


Baidu announced that the company has seen a rapid uptake in its Robotaxi business on the mainland.
Baidu is at the forefront of the industry globally with its Fully Self Driving taxis available in more than 10 major cities in China.
Baidu's autonomous taxi unit, Apollo Go, has over 100 million kilometers of high-level autonomous safety driving mileage and holds over 5,000 autonomous driving patents.


CHINA: Fasten Your Seat Belts! BAIDU Accelerates in the Fast Growing Robotaxi Industry.

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>Nearly 90% through the review period, we see 6 potential adds and 5 potential deletes in June. However, there can be a maximum of 5 changes at a rebalance.</li>
<li>We estimate a one-way turnover of 5.07% at the June rebalance leading to a one-way trade of CNY 3.97bn. Index arb activity could add to the impact on the stocks.</li>
<li>The potential adds have outperformed the potential deletes by 17% over the last month and by 21% over the last two months.</li>
</ul>


Nearly 90% through the review period, we see 6 potential adds and 5 potential deletes in June. However, there can be a maximum of 5 changes at a rebalance.
We estimate a one-way turnover of 5.07% at the June rebalance leading to a one-way trade of CNY 3.97bn. Index arb activity could add to the impact on the stocks.
The potential adds have outperformed the potential deletes by 17% over the last month and by 21% over the last two months.


SSE50 Index Rebalance Preview: BIG Outperformance Over the Last Month

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Dongzheng Automotive Finance / Event-Driven

<ul>
<li>On the 19 May, <a href="https://www.smartkarma.com/entities/saic-motor-corp-ltd-a" target="_blank" data-smartkarma-citation="entities:20833:1" rel="noopener">SAIC Motor (600104 CH)</a> acquired <a href="https://www.smartkarma.com/entities/china-zhengtong-auto-services" target="_blank" data-smartkarma-citation="entities:17001:1" rel="noopener">China Zhengtong Auto Services Hldg (1728 HK)</a>'s 71.04% stake in <a href="https://www.smartkarma.com/entities/shanghai-dongzheng-automotive-finance-co-ltd" target="_blank" data-smartkarma-citation="entities:27984:1" rel="noopener">Dongzheng Automotive Finance (2718 HK)</a> at a judicial auction. </li>
<li>Reportedly SAIC was the only bidder. The price paid appears to be at the minimum bid price of HK$1.294/share. </li>
<li>The acquisition will trigger an unconditional Offer for the H shares.  SAIC and ZhengTong have announced the outcome of the auction. But still no word from Dongzheng.</li>
</ul>


On the 19 May, SAIC Motor (600104 CH) acquired China Zhengtong Auto Services Hldg (1728 HK)'s 71.04% stake in Dongzheng Automotive Finance (2718 HK) at a judicial auction. 
Reportedly SAIC was the only bidder. The price paid appears to be at the minimum bid price of HK$1.294/share. 
The acquisition will trigger an unconditional Offer for the H shares.  SAIC and ZhengTong have announced the outcome of the auction. But still no word from Dongzheng.


Shh! SAIC's Unconditional Offer For Dongzheng (2718 HK)

China

SAIC Motor Corporation Ltd., through joint ventures, manufactures and markets automobiles and related parts and accessories.

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SAIC Motor (600104 CH)