Research on Tech Companies

Evelyn Zhang

Thematic (Sector/Industry)

<ul>
<li> More difficult for companies to obtain and accumulate data;</li>
<li>Digital advertising alliance will be impacted, precision advertising ROI will decline</li>
<li>Mobility service provider like Didi, Ctrip will no longer able to offer differentiate pricing through user profile, also restricted for containing  on national geographic information security</li>
<li>Public Cloud market will transfer from current internet cloud provider to state-owned cloud, benefit infrastructure and service providers</li>
<li>Facial Recognition AI such as in-car camera for autonomous driving assistance will be impacted</li>
<li>Short video content platform will have restrictions on the use of recommendation algorithms, which may cause a decline in user time, and the ecommerce product recommendation accuracy</li>
<li>Internet companies with more than 1mn users that have plans to list in US will have to reconsider</li>
</ul>


 More difficult for companies to obtain and accumulate data;
Digital advertising alliance will be impacted, precision advertising ROI will decline
Mobility service provider like Didi, Ctrip will no longer able to offer differentiate pricing through user profile, also restricted for containing  on national geographic information security
Public Cloud market will transfer from current internet cloud provider to state-owned cloud, benefit infrastructure and service providers
Facial Recognition AI such as in-car camera for autonomous driving assistance will be impacted
Short video content platform will have restrictions on the use of recommendation algorithms, which may cause a decline in user time, and the ecommerce product recommendation accuracy
Internet companies with more than 1mn users that have plans to list in US will have to reconsider


Law & Order: What the New Data Security Laws Mean for China's Tech Sector?

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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Event-Driven

Contemporary Amperex Technology (CATL) / Event-Driven

<div><p>The <a href="https://www.smartkarma.com/entities/shanghai-shenzhen-csi-300-index" target="_blank" data-smartkarma-citation="entities:22906:1" rel="noopener">Shanghai Shenzhen CSI 300 Index (SHSZ300 INDEX)</a> consists of stocks from the Shanghai Stock Exchange and the Shenzhen Stock Exchange and is one of the most widely tracked A-share indices with passive tracking products listed in multiple markets globally. There are CFFEX listed futures that trade actively as well.</p></div><div>
<p>China Securities Index Co (CSI) will announce the changes for the December rebalance at the end of  November or beginning December and the changes will be effective after the close of trading on 10 December.</p>
<p>Half way through the review period that runs from May to October, we see 26 changes at the upcoming December 2021 review. Estimated one-way turnover at the rebalance is 9.24% and will result in a one-way trade of just shy of US$3bn.</p>
<p>The Information Technology and Materials sectors gain 4 spots each in the index while Financials are the biggest losers with 7 spots gone.</p>
<p>The potential inclusions have outperformed the potential exclusions and the <a href="https://www.smartkarma.com/entities/shanghai-shenzhen-csi-300-index" target="_blank" data-smartkarma-citation="entities:22906:1" rel="noopener">Shanghai Shenzhen CSI 300 Index (SHSZ300 INDEX)</a> by a wide margin on a year to date basis. We recommend building up positions gradually and scaling in on a correction.</p>
</div>

The Shanghai Shenzhen CSI 300 Index (SHSZ300 INDEX) consists of stocks from the Shanghai Stock Exchange and the Shenzhen Stock Exchange and is one of the most widely tracked A-share indices with passive tracking products listed in multiple markets globally. There are CFFEX listed futures that trade actively as well.
China Securities Index Co (CSI) will announce the changes for the December rebalance at the end of  November or beginning December and the changes will be effective after the close of trading on 10 December.
Half way through the review period that runs from May to October, we see 26 changes at the upcoming December 2021 review. Estimated one-way turnover at the rebalance is 9.24% and will result in a one-way trade of just shy of US$3bn.
The Information Technology and Materials sectors gain 4 spots each in the index while Financials are the biggest losers with 7 spots gone.
The potential inclusions have outperformed the potential exclusions and the Shanghai Shenzhen CSI 300 Index (SHSZ300 INDEX) by a wide margin on a year to date basis. We recommend building up positions gradually and scaling in on a correction.


CSI300 Index Rebalance Preview: Large Turnover as Potential Inclusions Keep Rallying

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

MSCI Emerging Markets Index / Technical Analysis

<p>Price and RS uptrends for the MSCI EM index continues to underpin our bullish outlook for emerging market equities -- remain overweight. We continue to attribute much of EM’s outperformance to the intact downtrend in the US dollar (DXY). As long as weakness in the DXY persists we believe EM’s outperformance is likely to continue.</p>

Price and RS uptrends for the MSCI EM index continues to underpin our bullish outlook for emerging market equities -- remain overweight. We continue to attribute much of EM’s outperformance to the intact downtrend in the US dollar (DXY). As long as weakness in the DXY persists we believe EM’s outperformance is likely to continue.

EM Remains Global Leadership -- Remain Overweight

China

Sangfor Technologies Inc. operates as a global vendor for IT infrastructure solutions. The Company specializes in cloud computing, network security, including hyper converged infrastructure, virtual desktop infrastructure, application firewall, and more. Sangfor Technologies also offers internet access management, WAN optimization, VPN, and other services.

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Sangfor Technologies (300454 CH)

Law & Order: What the New Data Security Laws Mean for China's Tech Sector?

China's recent new sweeping data security and protection laws have set the tech sector in turmoil, We examin what are the impact way forward.

Evelyn Zhang

CSI300 Index Rebalance Preview: Large Turnover as Potential Inclusions Keep Rallying

Half way through the review period, we see 26 changes to the CSI300 Index. Estimated one-way turnover is 9%+ & would result in a one way trade of...

Brian Freitas

EM Remains Global Leadership -- Remain Overweight

Price and RS uptrends for the MSCI EM index continues to underpin our bullish outlook for emerging market equities -- remain overweight.

Vermilion Research

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