Global Emerging Market Equities, Propitious Research

Wium Malan, CFA

Global Emerging Market Equities

Independent, Fundamental Quantitative Research

Propitious Research

Fully independent, fundamental and quantitative equity research, focused on companies in the Telecommunication, Media, Technology, Internet and Healthcare sectors in the Global Emerging Markets. Idea generation focused on Quality stocks, trading below their intrinsic Value, with sound Corporate Governance.

Equity Bottom-Up

<ul>
<li>Following a contraction in Chinese apparel sales since 3Q21, and similar negative GMV and product revenue growth for Vipshop, we have witnessed a recovery to growth since June.</li>
<li>Current sell-side forecasts are, however, still for a -10.8%y/y contraction in product revenue for Vipshop in 3Q22f, followed by a -4.4% contraction in 4Q22f which seems overly pessimistic.</li>
<li>Given the conservative nature of near-term top-line growth expectation, and management guidance, the probability for positive earnings surprise seems high.</li>
</ul>


Following a contraction in Chinese apparel sales since 3Q21, and similar negative GMV and product revenue growth for Vipshop, we have witnessed a recovery to growth since June.
Current sell-side forecasts are, however, still for a -10.8%y/y contraction in product revenue for Vipshop in 3Q22f, followed by a -4.4% contraction in 4Q22f which seems overly pessimistic.
Given the conservative nature of near-term top-line growth expectation, and management guidance, the probability for positive earnings surprise seems high.


Vipshop: Rebound in Chinese Apparel Sales Should Trump Conservative Management Guidance

Alibaba Group Holding  / Equity Bottom-Up

<ul>
<li>In line with previously reported trends in Chinese retail sales growth, the large Chinese eCommerce operators reported a decline (or contraction) in GMV growth in 2Q2022.</li>
<li>Following a contraction between March and May this year, China’s retail sales growth has returned to growth since June, which continued in July and accelerated in August.</li>
<li>Alibaba’s next reported quarter’s annualised growth will be on an extremely depressed base.</li>
</ul>


In line with previously reported trends in Chinese retail sales growth, the large Chinese eCommerce operators reported a decline (or contraction) in GMV growth in 2Q2022.
Following a contraction between March and May this year, China’s retail sales growth has returned to growth since June, which continued in July and accelerated in August.
Alibaba’s next reported quarter’s annualised growth will be on an extremely depressed base.


Alibaba: Accelerating Retail Sales, and a Depressed Comp Base, Bode Well for Near-Term Earnings

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>We continue to see global equities as being in pullback mode, with the MSCI ACWI index (ACWI-US) already testing important support in the $86-87 range, highlighted last week.</li>
<li>A bounce here would be ideal for the bullish case, but we could easily see a test of the YTD lows near $81.50 if $86 fails to hold.</li>
<li>Japan's TOPIX/Nikkei225/TOPIX Small remain bullish, as does India's SENSEX -- add exposure. Seeing some failed breakouts in Europe, notably the EURO STOXX 50 and STOXX Europe 600; a concerning development.</li>
</ul>


We continue to see global equities as being in pullback mode, with the MSCI ACWI index (ACWI-US) already testing important support in the $86-87 range, highlighted last week.
A bounce here would be ideal for the bullish case, but we could easily see a test of the YTD lows near $81.50 if $86 fails to hold.
Japan's TOPIX/Nikkei225/TOPIX Small remain bullish, as does India's SENSEX -- add exposure. Seeing some failed breakouts in Europe, notably the EURO STOXX 50 and STOXX Europe 600; a concerning development.


Pullback Continues; Japan & India Remain Attractive

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

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.

Event-Driven

<ul>
<li>On 26th Aug 2022, PCAOB and CSRC announced that they had entered into an agreement granting US authorities access to investigate public accounting firms headquartered in China and HK.</li>
<li>On 2nd Apr 2022, CSRC put out a draft for public comments on the revision of certain provisions which would allow easier access by overseas regulators to China ADRs audits.</li>
<li>In this note, we'll talk about the latest developments and its implications.</li>
</ul>


On 26th Aug 2022, PCAOB and CSRC announced that they had entered into an agreement granting US authorities access to investigate public accounting firms headquartered in China and HK.
On 2nd Apr 2022, CSRC put out a draft for public comments on the revision of certain provisions which would allow easier access by overseas regulators to China ADRs audits.
In this note, we'll talk about the latest developments and its implications.


China ADRs Delisting - Tide Is Turning - Non-HK Listed ADRs Are Already Outperforming

Overseas Chinese Equities, Aequitas Research

Ming Lu

Overseas Chinese Equities

<ul>
<li>Logistics companies’ revenue grew by over 10%, which reflects the recovery of e-commerce.</li>
<li>The market size of Chinese online game continued to shrink in July.</li>
<li>Alibaba’s Ele.me sets up a mini-program on TikTok to fight Meituan.</li>
</ul>


Logistics companies’ revenue grew by over 10%, which reflects the recovery of e-commerce.
The market size of Chinese online game continued to shrink in July.
Alibaba’s Ele.me sets up a mini-program on TikTok to fight Meituan.


China Internet Weekly (22Aug22): E-Commerce, Logistics, Online Game, Food Delivery

China

Vipshop Holdings Ltd. retails branded products at discount over the Internet. The Company retails through flash sales, in which limited quantities of an item are sold at deep discount for a specified period of time.

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Vipshop Holdings (VIPS US)

Vipshop: Rebound in Chinese Apparel Sales Should Trump Conservative Management Guidance

In this insight, we analyse recent retail and apparel sales data, top-line growth trends, earnings revisions, and valuation levels for Vipshop.

Wium Malan, CFA

Alibaba: Accelerating Retail Sales, and a Depressed Comp Base, Bode Well for Near-Term Earnings

In this insight, we analyse recent retail sales data, industry top-line and user growth trends, earnings revisions, and valuation levels for...

Wium Malan, CFA

Pullback Continues; Japan & India Remain Attractive

Stick with Japan & India. $ACWI bounce at $86 would be ideal for the bullish case (i.e., establishing a higher low), but we could easily see a test...

Vermilion Research

China ADRs Delisting - Tide Is Turning - Non-HK Listed ADRs Are Already Outperforming

On 26th Aug 2022, PCAOB and CSRC announced that they had entered into an agreement granting US authorities access to investigate public accounting...

Sumeet Singh

China Internet Weekly (22Aug22): E-Commerce, Logistics, Online Game, Food Delivery

Logistics companies’ revenue grew by over 10%, which reflects the recovery of e-commerce. The market size of Chinese online game continued to...

Ming Lu

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