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

S&P BSE SENSEX Index / Technical Analysis

<ul>
<li>Our 2023 outlook remains unchanged as we continue to expect broad-based consolidation with $93 capping upside on MSCI ACWI (ACWI-US), while important downside targets are $86, $84, and $75-77.</li>
<li>We still recommend tactical overweight to defensives including gold miners and MSCI ACWI Staples, Health Care, and Utilities, given ACWI-US remains near the top of our expected 2023 trading range.</li>
<li>We are now starting to see broad-based improvement, particularly in Japan and India, but also in Taiwan and South Korea. Most of today's buy recommendations are cyclicals in these countries.</li>
</ul>


Our 2023 outlook remains unchanged as we continue to expect broad-based consolidation with $93 capping upside on MSCI ACWI (ACWI-US), while important downside targets are $86, $84, and $75-77.
We still recommend tactical overweight to defensives including gold miners and MSCI ACWI Staples, Health Care, and Utilities, given ACWI-US remains near the top of our expected 2023 trading range.
We are now starting to see broad-based improvement, particularly in Japan and India, but also in Taiwan and South Korea. Most of today's buy recommendations are cyclicals in these countries.


Broad-Based Improvement in India, Add Exposure/Overweight. Buys: Cyclicals in Japan, India, & Taiwan

China/Asia TMT

Shawn Yang

China growth and global non-US Internet equities

Blue Lotus Research Institute

Blue Lotus Research is a Hong Kong Type 4 Licensed investment advisory firm focusing on Chinese growth equities and global non-US Internet equities

Equity Bottom-Up

<ul>
<li>We expect that Shopee is spending more in recent months to defend from TikTok Ecommerce’s growth; </li>
<li>Further, we see increased marketing to maintain &lt;FreeFire’s&gt; user base, especially in Indonesia; We suggest that SEA’s strong margin performance in 4Q22 was temporary. </li>
<li>We forecast that 1Q23’s net margin is 11.2% vs. 4Q22’s 17.9%. We maintain our SELL rating and US$ 62 TP, implying 27x FY23 P/E.</li>
</ul>


We expect that Shopee is spending more in recent months to defend from TikTok Ecommerce’s growth; 
Further, we see increased marketing to maintain &lt;FreeFire’s&gt; user base, especially in Indonesia; We suggest that SEA’s strong margin performance in 4Q22 was temporary. 
We forecast that 1Q23’s net margin is 11.2% vs. 4Q22’s 17.9%. We maintain our SELL rating and US$ 62 TP, implying 27x FY23 P/E.


[Sea Limited (SE US, SELL, TP US$62) Earnings Preview]: Increase Spending in ECommerce and Gaming

ASEAN Insight Provider, CrossASEAN Research

Angus Mackintosh

ASEAN Insight Provider

CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

<ul>
<li>
<a href="https://www.smartkarma.com/entities/bukalapak" target="_blank" data-smartkarma-citation="entities:33575:1" rel="noopener">Bukalapak (BUKA IJ)</a> announced 1Q2023 results with encouragingly strong headline growth coupled with even stronger revenues as take rates increased, with its marketplace being the standout driven by specialty verticals. </li>
<li>Mitra Bukalapak also registered solid growth, with increasing active Mitra's with greater frequency, higher take rates, and an improvement in contribution margin which should turn positive over the next 2Qs. </li>
<li>Take rates should continue to improve as the specialty businesses pick up momentum, and once the Mitra business turns CM positive, growth in that segment will also accelerate.</li>
</ul>



Bukalapak (BUKA IJ) announced 1Q2023 results with encouragingly strong headline growth coupled with even stronger revenues as take rates increased, with its marketplace being the standout driven by specialty verticals. 
Mitra Bukalapak also registered solid growth, with increasing active Mitra's with greater frequency, higher take rates, and an improvement in contribution margin which should turn positive over the next 2Qs. 
Take rates should continue to improve as the specialty businesses pick up momentum, and once the Mitra business turns CM positive, growth in that segment will also accelerate.


Bukalapak (BUKA IJ) - Specialty Hits Home

GoTo Gojek Tokopedia Tbk PT / Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/goto-gojek-tokopedia" target="_blank" data-smartkarma-citation="entities:25976:1" rel="noopener">GoTo (GOTO IJ)</a> 1Q2023 were impressive given the group is now contribution margin positive for all its divisions plus making good headway towards positive Adjusted EBITDA by 4Q2023. </li>
<li>This came at a cost with substantial QoQ declines in GTV for both ODS and e-commerce but better take rates offset this decline. Further significant declines may raise concerns.</li>
<li>GoTo Logistics and GoPay's lending business are key foundational focus areas to underpin a lower cost to serve and higher future growth. Valuations remain reasonable relative to peers. </li>
</ul>



GoTo (GOTO IJ) 1Q2023 were impressive given the group is now contribution margin positive for all its divisions plus making good headway towards positive Adjusted EBITDA by 4Q2023. 
This came at a cost with substantial QoQ declines in GTV for both ODS and e-commerce but better take rates offset this decline. Further significant declines may raise concerns.
GoTo Logistics and GoPay's lending business are key foundational focus areas to underpin a lower cost to serve and higher future growth. Valuations remain reasonable relative to peers. 


GoTo (GOTO IJ) - Foundations Laid for Profitable Growth

Asset Allocation & Fund Positioning, Copley Fund Research

Steven Holden

Asset Allocation & Fund Positioning

Copley Fund Research

Copley Fund Research provide research and data on asset allocation among Global and Emerging Market equity funds.  The analysis details absolute and relative positioning across countries, sectors and industries together with highly granular data on single stock and single fund allocations.  The data is updated monthly with time series going back to January 2011.

Global Research - Analysis of 165 prominent Global equity funds, combined AUM $335bn
GEM Research - Analysis of 127 prominent global EM equity funds, combined AUM $250bn

Asset Allocation - Global and GEM Equity

Thematic (Sector/Industry)

<ul>
<li>Record number of active EM funds overweight in Internet Retail, with 60.9% of funds overweight the iShares EEM ETF.</li>
<li>Alibaba Group Holdings is the most widely held stock in Internet Retail, followed by JD.com Inc. and MercadoLibre.</li>
<li>Growth investors remain optimistic about Internet Retail, while recent price declines prompt Value investors to raise allocations</li>
</ul>


Record number of active EM funds overweight in Internet Retail, with 60.9% of funds overweight the iShares EEM ETF.
Alibaba Group Holdings is the most widely held stock in Internet Retail, followed by JD.com Inc. and MercadoLibre.
Growth investors remain optimistic about Internet Retail, while recent price declines prompt Value investors to raise allocations


Internet Retail: EM Funds Raise Overweights

Singapore

Sea Limited offers information technology services. The Company provides online personal computer and mobile digital content, e-commerce, and payment platforms. Sea serves customers worldwide.

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Sea (SE US)

Broad-Based Improvement in India, Add Exposure/Overweight. Buys: Cyclicals in Japan, India, & Taiwan

Seeing broad-based improvement in India #SENSEX -- overweight/add exposure. We still recommend a tactical overweight to ACWI defensives with $ACWI...

Vermilion Research

[Sea Limited (SE US, SELL, TP US$62) Earnings Preview]: Increase Spending in ECommerce and Gaming

We expect that Shopee is spending more in recent months to defend from TikTok Ecommerce’s growth, which may have reached to about 15% of Shopee’s...

Blue Lotus Research Institute

Bukalapak (BUKA IJ) - Specialty Hits Home

Bukalapak 1Q2023 results booked encouragingly strong headline growth coupled with even stronger revenues as take rates increased, with its...

Angus Mackintosh

GoTo (GOTO IJ) - Foundations Laid for Profitable Growth

GoTo 1Q2023 numbers were impressive with the group now contribution margin positive for all its divisions plus making good headway towards positive...

Angus Mackintosh

Internet Retail: EM Funds Raise Overweights

The percentage of funds positioned overweight the Internet Retail sector hits record highs as Value funds enter the picture.

Steven Holden

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