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

<ul>
<li>The MSCI EM vs.EAFE ratio (local currency) shows EM has outperformed relative to EAFE since the DXY peaked in November 2022, and also shows signs of reversing the 2-year downtrend.</li>
<li>As long as the DXY remains below $103.50-$106, we expect outperformance from EM to continue.</li>
<li>China/Hong Kong, Greece, South Africa, and Mexico stand out as attractive countries. Our top actionable Sectors include Communications, Consumer Discretionary, and Technology. We highlight 76 attractive EM stocks.</li>
</ul>


The MSCI EM vs.EAFE ratio (local currency) shows EM has outperformed relative to EAFE since the DXY peaked in November 2022, and also shows signs of reversing the 2-year downtrend.
As long as the DXY remains below $103.50-$106, we expect outperformance from EM to continue.
China/Hong Kong, Greece, South Africa, and Mexico stand out as attractive countries. Our top actionable Sectors include Communications, Consumer Discretionary, and Technology. We highlight 76 attractive EM stocks.


EM Outperformance to Continue (Vs. EAFE) -- Add on a Pullback; DXY Needs to Hold Below $106

Overseas Chinese Equities, Aequitas Research

Ming Lu

Overseas Chinese Equities

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.

Equity Bottom-Up

Alibaba Group Holding  / Equity Bottom-Up

<ul>
<li>We believe total revenue will grow about 25% YoY in 2Q22.</li>
<li>We believe advertising revenue will grow slowly, but physical store will grow rapidly.</li>
<li>We also believe the operating margin will be stable in the following year.</li>
</ul>


We believe total revenue will grow about 25% YoY in 2Q22.
We believe advertising revenue will grow slowly, but physical store will grow rapidly.
We also believe the operating margin will be stable in the following year.


Alibaba (BABA): F2Q22 Outlook, Slow in App and Rapid in Physical Store

<ul>
<li>Revenue from physical store chains grew by 80% YoY in 1Q22.</li>
<li>The margin decline is partly due to temporary changes.</li>
<li>Generally, we believe EPS will decline by 11% in FY2022, but grow by 13% in FY2023.</li>
<li>We believe the stock has an upside of 30% for the end of March 2022.</li>
</ul>


Revenue from physical store chains grew by 80% YoY in 1Q22.
The margin decline is partly due to temporary changes.
Generally, we believe EPS will decline by 11% in FY2022, but grow by 13% in FY2023.
We believe the stock has an upside of 30% for the end of March 2022.


Alibaba (BABA): FY1Q22, Physical Stores Growing Strongly, Margin Lower but Controllable, 30% Upside

APAC IPOs & Placements

Zhen Zhou, Toh

Equity Capital Markets

WM Tech Corporation / Equity Capital Markets

<a href="https://www.smartkarma.com/entities/wm-tech-corporation" target="_blank" data-smartkarma-citation="entities:32976:1" rel="noopener">WM Tech Corporation (WMT HK)</a> is looking to raise US$1bn in its upcoming Hong Kong IPO. WM Tech (WMT) is a fresh food and FMCG retailer in China. The company operates its business primarily through two brands, Wumart (物美) and Metro (麦德龙). The Metro brand belonged to Metro China in which WMT acquired an 80% stake in and started consolidating in April 2020.In this note, we have  compared WMT to other supermarket operators.We have previously covered the IPO in:<ul>
<li>
<a href="https://www.smartkarma.com/insights/wm-tech-pre-ipo-digitalization-efforts-coming-through-but-not-well-substantiated" target="_blank" data-smartkarma-citation="insights:52007" rel="noopener">WM Tech Pre-IPO - Digitalization Efforts Coming Through but Not Well Substantiated</a> </li>
<li>
<a href="https://www.smartkarma.com/insights/wm-tech-pre-ipo-wumart-as-main-brand-marginalized-on-the-ground" target="_blank" data-smartkarma-citation="insights:52273" rel="noopener">WM Tech Pre-IPO: Wumart as Main Brand, Marginalized on the Ground</a> </li>
</ul>

WM Tech Corporation (WMT HK) is looking to raise US$1bn in its upcoming Hong Kong IPO. WM Tech (WMT) is a fresh food and FMCG retailer in China. The company operates its business primarily through two brands, Wumart (物美) and Metro (麦德龙). The Metro brand belonged to Metro China in which WMT acquired an 80% stake in and started consolidating in April 2020.In this note, we have  compared WMT to other supermarket operators.We have previously covered the IPO in:

WM Tech Pre-IPO - Digitalization Efforts Coming Through but Not Well Substantiated 

WM Tech Pre-IPO: Wumart as Main Brand, Marginalized on the Ground 


WM Tech Pre-IPO - Peer Comparison and Pre-IPO Valuation - Some Signs of Advantage

IPO and L/S equity, 2015 Starmine top stock picker, Global Equity Research Ltd

Rickin Thakrar

IPO and L/S equity, 2015 Starmine top stock picker

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

For the first time in months, our EBIT and EPS forecasts are not dramatically lower than consensus and while we see scope for moderate EBIT downgrades, we believe any weakness in the shares would present a robust buying opportunity.

For the first time in months, our EBIT and EPS forecasts are not dramatically lower than consensus and while we see scope for moderate EBIT downgrades, we believe any weakness in the shares would present a robust buying opportunity.

Alibaba – Have Consensus Forecasts Finally Bottomed?

Hong Kong

Sun Art Retail Group Ltd. operates hypermarkets.  The Company retails food and offers amenities such as restaurants, automated teller machines, pharmacies and dry cleaners.

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Sun Art Retail (6808 HK)

EM Outperformance to Continue (Vs. EAFE) -- Add on a Pullback; DXY Needs to Hold Below $106

EM vs. EAFE ratio (local currency) shows EM has outperformed relative to EAFE since the $DXY peaked in November 2022. If the DXY remains below...

Vermilion Research

Alibaba (BABA): F2Q22 Outlook, Slow in App and Rapid in Physical Store

We believe total revenue will grow about 25% YoY in F2Q22. We believe advertising revenue will grow slowly, but physical store will grow rapidly.

Ming Lu

Alibaba (BABA): FY1Q22, Physical Stores Growing Strongly, Margin Lower but Controllable, 30% Upside

Revenue from physical store chains grew by 80% YoY in 1Q22. The margin decline is partly due to temporary changes. Generally, we believe EPS will...

Ming Lu

WM Tech Pre-IPO - Peer Comparison and Pre-IPO Valuation - Some Signs of Advantage

WM Tech (WMT) is a fresh food and FMCG retailer in China. The company operates its business primarily through two brands, Wumart (物美) and Metro (麦德龙).

Zhen Zhou, Toh

Alibaba – Have Consensus Forecasts Finally Bottomed?

For the first time in months, our EBIT and EPS forecasts are not dramatically lower than consensus and while we see scope for some EBIT downgrades,...

Rickin Thakrar

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