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>Active China funds are rotating back in to the Consumer Discretionary sector.  Holding weights bottomed out in early 2022, with an increasing number of managers re-positioning themselves as overweight</li>
<li>Large increases in ownership across key stocks underpin the sector rotation.  Pinduoduo saw an +8.4% increase in the percentage of funds invested, Trip.com Group +6.7% and NIO Inc +5.88%</li>
<li>If the rhetoric is that China is oversold here, then Consumer Discretionary stocks appears well placed to benefit from further inflows.</li>
</ul>


Active China funds are rotating back in to the Consumer Discretionary sector.  Holding weights bottomed out in early 2022, with an increasing number of managers re-positioning themselves as overweight
Large increases in ownership across key stocks underpin the sector rotation.  Pinduoduo saw an +8.4% increase in the percentage of funds invested, Trip.com Group +6.7% and NIO Inc +5.88%
If the rhetoric is that China is oversold here, then Consumer Discretionary stocks appears well placed to benefit from further inflows.


China Consumer Discretionary: Reducing The Underweight

External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Incorporated in Hong Kong, supported by the mainland and targeting in global market, CMB International Capital Corporation Limited (“CMBI”) is an integrated financial institution providing comprehensive and professional services. As a wholly-owned subsidiary of China Merchants Bank ("CMB"), by leveraging on the Group’s synergy and coordination in domestic and overseas markets, as well as CMB’s strong resources and outstanding social reputation, CMBI and its subsidiaries have been actively implementing diversified business strategies and set up an overall layout of main business segments including Corporate Finance, Asset Management, Wealth Management, Global Markets and Structured Finance, etc. Adhering to the philosophy of “being clients oriented and increasing our own values by the way of creating value for clients”, CMBI endeavors to provide quality and integrated financial services to institutional, corporate and individual customers both domestic and overseas including Hong Kong IPO sponsorship and underwriting, share placement and rights issue for listed companies, financial advisors, bonds issuance services, asset management, direct investment, wealth management, equity sales and trading, etc.

Equity Bottom-Up

<ul><li>Trip.com Group (TCOM) announced (15 Dec) 3Q22 results: net revenue was RMB6.9bn, up 29.0% YoY, 5/6% ahead of our/Bloomberg consensus estimates, and was 66% of the 3Q19 level.</li><li>Non-GAAP net income was RMB1.0bn, better than our forecast/consensus estimate at RMB742/ 830mn, owning to betterthan-expected revenue recovery in domestic market.</li><li>Although pandemic resurgence brought disruption to TCOM’s business recovery in 4Q22, overall business recovery from 2023 onward has greater visibility as pandemic prevention policy has been relaxing.</li></ul><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>

Trip.com Group (TCOM) announced (15 Dec) 3Q22 results: net revenue was RMB6.9bn, up 29.0% YoY, 5/6% ahead of our/Bloomberg consensus estimates, and was 66% of the 3Q19 level.Non-GAAP net income was RMB1.0bn, better than our forecast/consensus estimate at RMB742/ 830mn, owning to betterthan-expected revenue recovery in domestic market.Although pandemic resurgence brought disruption to TCOM’s business recovery in 4Q22, overall business recovery from 2023 onward has greater visibility as pandemic prevention policy has been relaxing.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Trip.com (TCOM US) – Business recovery has greater visibility

High Quality Stock Setups, Weekly Stock Bull Finder

Weekly Stock Bull Finder

High Quality Stock Setups

Finding high potential stock setups on quality companies

Melco Resorts & Entertainment / Equity Bottom-Up

<ul><li><span style="font-size: var(--content-font-size);">As investors we are faced with a deluge of noisy breaking news, business media talking heads, and what has felt like non-stop Fed speakers offering their differing views on the economy and the path of rate hikes going in 2023. </span></li><li><span style="font-size: var(--content-font-size);">This week was no different. Fed Chair Jay Powell was front and center suggesting that interest rate hikes will likely be stepped down to 50bps in the upcoming December Fed meeting in a few weeks. </span></li><li><span style="font-size: var(--content-font-size);">This was already discounted and expected by the market and effectively didn’t offer much of anything Wall St. didn’t already know.</span></li></ul>

As investors we are faced with a deluge of noisy breaking news, business media talking heads, and what has felt like non-stop Fed speakers offering their differing views on the economy and the path of rate hikes going in 2023. This week was no different. Fed Chair Jay Powell was front and center suggesting that interest rate hikes will likely be stepped down to 50bps in the upcoming December Fed meeting in a few weeks. This was already discounted and expected by the market and effectively didn’t offer much of anything Wall St. didn’t already know.

<div><div><div><div><ul><li>Consumption sentiment and offline activities’ recovery pace continued to weigh on internet sector’s 3Q financials performance.</li><li>Looking into 4Q and 2023, business model robustness, operating leverage improvement, and ability to expand into new revenue streams will be the key stock alpha drivers, while the heavily under-owned China Internet sector will remain sensitive to policies and other sentiment related beta drivers.</li><li>We expect leading technology companies will play vital role in building digital infrastructure and empowering enterprise digital transformation. </li></ul></div></div></div></div><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>

Consumption sentiment and offline activities’ recovery pace continued to weigh on internet sector’s 3Q financials performance.Looking into 4Q and 2023, business model robustness, operating leverage improvement, and ability to expand into new revenue streams will be the key stock alpha drivers, while the heavily under-owned China Internet sector will remain sensitive to policies and other sentiment related beta drivers.We expect leading technology companies will play vital role in building digital infrastructure and empowering enterprise digital transformation. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

China Internet Sector – 3Q22 preview: near term bumpy recovery

<ul><li>While revenue recovery of Trip.com (TCOM)’s domestic business remained under pandemic impact in 3Q22, pure international businesses (Trip.com &amp; Skyscanner) were rolling back on track.</li><li>We remain positive on TCOM’s unique proposition value in China market with sticky high-end consumer and business user base, strong supply chain capability as well as deep industry resources.</li><li>Our DCF-based target price values TCOM at USD29.7 per ADS. We are transferring coverage with a BUY rating.</li></ul><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>

While revenue recovery of Trip.com (TCOM)’s domestic business remained under pandemic impact in 3Q22, pure international businesses (Trip.com &amp; Skyscanner) were rolling back on track.We remain positive on TCOM’s unique proposition value in China market with sticky high-end consumer and business user base, strong supply chain capability as well as deep industry resources.Our DCF-based target price values TCOM at USD29.7 per ADS. We are transferring coverage with a BUY rating.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Trip.com (TCOM US) – Revenue recovery underway

China

Trip.com Group Ltd. provides online travel agency services. The Company offers mobile applications, hotel reservations, flight ticketing, package tours, corporate travel management, and train ticketing services.

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Trip.com (TCOM US)

China Consumer Discretionary: Reducing The Underweight

Active China funds are rotating back in to the Consumer Discretionary sector. Holding weights bottomed out in early 2022, with an increasing...

Steven Holden

Trip.com (TCOM US) – Business recovery has greater visibility

Trip.com Group (TCOM) announced (15 Dec) 3Q22 results: net revenue was RMB6.9bn, up 29.0% YoY, 5/6% ahead of our/Bloomberg consensus estimates, and...

CMB International

Weekly Stock Bullfinder - Week of 12/5

As investors we are faced with a deluge of noisy breaking news, business media talking heads, and what has felt like non-stop Fed speakers offering...

Weekly Stock Bull Finder

China Internet Sector – 3Q22 preview: near term bumpy recovery

We expect leading technology companies will play vital role in building digital infrastructure and empowering enterprise digital transformation.

CMB International

Trip.com (TCOM US) – Revenue recovery underway

While revenue recovery of Trip.com (TCOM)’s domestic business remained under pandemic impact in 3Q22, pure international businesses (Trip.com &...

CMB International

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