Asian Insight Provider - Actionable ideas, CrossASEAN Research

Henry Soediarko

Asian Insight Provider - Actionable ideas

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

Equity Bottom-Up

<ul>
<li>1H 24 net profit is expected to grow by 54%, a similar amount to FY 23 with a consistent message that revenue growth helps and cost control is in place. </li>
<li>
<a href="https://www.smartkarma.com/entities/wasion-group-holdings-ltd" target="_blank" data-smartkarma-citation="entities:421:1" rel="noopener">Wasion Group Holdings (3393 HK)</a> benefits from the One Belt One Road policy as many of the EM countries do not have smart power meters yet. </li>
<li>Wasion's holding on <a href="https://www.smartkarma.com/entities/willfar-information-technology" target="_blank" data-smartkarma-citation="entities:30341:1" rel="noopener">Willfar Information Technology (688100 CH)</a> is worth around USD 970 million, double the current market capitalization of Wasion.</li>
</ul>


1H 24 net profit is expected to grow by 54%, a similar amount to FY 23 with a consistent message that revenue growth helps and cost control is in place. 

Wasion Group Holdings (3393 HK) benefits from the One Belt One Road policy as many of the EM countries do not have smart power meters yet. 
Wasion's holding on Willfar Information Technology (688100 CH) is worth around USD 970 million, double the current market capitalization of Wasion.


Wasion (3393): Profit Alert and OBOR Beneficiary

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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Event-Driven

<ul>
<li>We see 32 potential and close adds and 44 potential and close deletes for the Hang Seng Composite Index in March. Some of the stocks are close on market cap/liquidity.</li>
<li>We expect 29 stocks to be added to Southbound Stock Connect following the rebalance while 31 stocks could be deleted from the trading link and become Sell-only.</li>
<li>There are stocks that have a very high percentage of holdings via Stock Connect and there could be some unwinding prior to the stocks becoming Sell-only.</li>
</ul>


We see 32 potential and close adds and 44 potential and close deletes for the Hang Seng Composite Index in March. Some of the stocks are close on market cap/liquidity.
We expect 29 stocks to be added to Southbound Stock Connect following the rebalance while 31 stocks could be deleted from the trading link and become Sell-only.
There are stocks that have a very high percentage of holdings via Stock Connect and there could be some unwinding prior to the stocks becoming Sell-only.


HSCI Index Rebalance Preview and Stock Connect: Potential Changes in March 2025

<ul>
<li>Energy is scarce, thus, besides renewable energy, energy efficiency should also be the key focus. </li>
<li>
<a href="https://www.smartkarma.com/entities/wasion-group-holdings-ltd" target="_blank" data-smartkarma-citation="entities:421:1" rel="noopener">Wasion Group Holdings (3393 HK)</a> customers have grown from domestic grids to both non-grid and grid domestic as well as overseas customers (Latin America). </li>
<li>Despite a 65% YTD return, it is still trading at 11x PER, with a 4% dividend yield, 6x EV/EBITDA, and 1.2x PBR. </li>
</ul>


Energy is scarce, thus, besides renewable energy, energy efficiency should also be the key focus. 

Wasion Group Holdings (3393 HK) customers have grown from domestic grids to both non-grid and grid domestic as well as overseas customers (Latin America). 
Despite a 65% YTD return, it is still trading at 11x PER, with a 4% dividend yield, 6x EV/EBITDA, and 1.2x PBR. 


HK/China Equity Long-Short

Osbert Tang, CFA

Thematic (Sector/Industry)

<ul>
<li>Our list of HK-listed industrial companies indicated that the US generated an average of 22.9% of sales. With diversified production bases, higher tariffs may only affect ~10% of revenue.</li>
<li>
<a href="https://www.smartkarma.com/entities/vesync" target="_blank" data-smartkarma-citation="entities:31067:1" rel="noopener">Vesync (2148 HK)</a>, <a href="https://www.smartkarma.com/entities/chervon-holdings-limited" target="_blank" data-smartkarma-citation="entities:35309:1" rel="noopener">Chervon Holdings (2285 HK)</a>, and <a href="https://www.smartkarma.com/entities/aac-technologies-holdings-inc" target="_blank" data-smartkarma-citation="entities:6544:1" rel="noopener">AAC Technologies Holdings (2018 HK)</a> are more exposed given their significant US sales yet most production is still in China. </li>
<li>While the US generated over 50% of the revenue of <a href="https://www.smartkarma.com/entities/techtronic-industries-co-ltd" target="_blank" data-smartkarma-citation="entities:4561:1" rel="noopener">Techtronic Industries (669 HK)</a> and <a href="https://www.smartkarma.com/entities/nexteer-automotive-group-ltd" target="_blank" data-smartkarma-citation="entities:15483:1" rel="noopener">Nexteer Automotive (1316 HK)</a>, they are less exposed given their worldwide manufacturing presence. </li>
</ul>


Our list of HK-listed industrial companies indicated that the US generated an average of 22.9% of sales. With diversified production bases, higher tariffs may only affect ~10% of revenue.

Vesync (2148 HK), Chervon Holdings (2285 HK), and AAC Technologies Holdings (2018 HK) are more exposed given their significant US sales yet most production is still in China. 
While the US generated over 50% of the revenue of Techtronic Industries (669 HK) and Nexteer Automotive (1316 HK), they are less exposed given their worldwide manufacturing presence. 


China & HK Strategy: Stocks Exposed to the US and Higher Tariffs

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

Smartkarma

Smartkarma unites the fragmented investment industry, connecting institutional investors, independent research providers, and corporates within a single network.

Research Reinvented

Equity Capital Markets

Zhejiang Cangnan Instrument / Equity Capital Markets

<a href="https://www.smartkarma.com/entities/27212" target="_blank" data-smartkarma-citation="entities:27212:1">Zhejiang Cangnan Instrument (1743 HK)</a> plans to raise up to US$114m in its IPO via an issuance of primary shares.Over FY15-17, sales grew at 36% CAGR while adjusted PATMI grew at nearly a 100% CAGR. Its growth record makes the asking multiples look cheap. However, its margins seem very high for an equipment manufacturer, even more so when one considers that it sells mostly to companies and not to retail. To add to that the stupendous growth in FY17 hasn't flown through to operating cash flow as receivables have ballooned, with some being due for well over a year. There are also a few corporate governance issues.Given the smallish size of the deal and a tight deadline, this is a very quick note of mostly bullet points along with charts, tables and snippets, with minimal additional writing.

Zhejiang Cangnan Instrument (1743 HK) plans to raise up to US$114m in its IPO via an issuance of primary shares.Over FY15-17, sales grew at 36% CAGR while adjusted PATMI grew at nearly a 100% CAGR. Its growth record makes the asking multiples look cheap. However, its margins seem very high for an equipment manufacturer, even more so when one considers that it sells mostly to companies and not to retail. To add to that the stupendous growth in FY17 hasn't flown through to operating cash flow as receivables have ballooned, with some being due for well over a year. There are also a few corporate governance issues.Given the smallish size of the deal and a tight deadline, this is a very quick note of mostly bullet points along with charts, tables and snippets, with minimal additional writing. 

Zhejiang Cangnan Instrument IPO - Quick Thoughts - Probably at Peak Growth and Peak Margins

Hong Kong

Wasion Group Holdings Limited is engaged in the provision of Advanced Metering Infrastructure solutions, Advanced Distribution Operations solutions; and development, manufacturing and sale of smart power, water, heat and gas meters and smart power distribution devices.

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Wasion Group Holdings (3393 HK)

Wasion (3393): Profit Alert and OBOR Beneficiary

Wasion Group Holdings (3393 HK) expects 54% net profit growth in 1H 24, and its holding in Willfar Information Technology also adds another upside...

Henry Soediarko

HSCI Index Rebalance Preview and Stock Connect: Potential Changes in March 2025

There could be 78 changes for the HSCI in March. That could result in 57 changes to the Southbound Stock Connect list and also have implications...

Brian Freitas

Wasion (3393): Smart Power Meter

Wasion holding is one of the world's leader in smart power meter with growing customers across the globe and have delivered phenomenal numbers yet...

Henry Soediarko

China & HK Strategy: Stocks Exposed to the US and Higher Tariffs

US tariffs may only affect an average of ~10% revenue of HK-listed industrials on a net basis. Vesync, Chervon, and AAC Technologies look exposed...

Osbert Tang, CFA

Zhejiang Cangnan Instrument IPO - Quick Thoughts - Probably at Peak Growth and Peak Margins

Zhejiang Cangnan Instrument (1743 HK) plans to raise up to US$114m in its IPO via an issuance of primary shares.Over FY15-17, sales grew at 36%...

Sumeet Singh

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Wasion (3393): Profit Alert and OBOR Beneficiary

​Wasion Group Holdings (3393 HK) expects 54% net profit growth in 1H 24, and its holding in Willfar Information Technology also adds another upside...

Henry Soediarko

HSCI Index Rebalance Preview and Stock Connect: Potential Changes in March 2025

There could be 78 changes for the HSCI in March. That could result in 57 changes to the Southbound Stock Connect list and also have implications...

Brian Freitas

Wasion (3393): Smart Power Meter

Wasion holding is one of the world's leader in smart power meter with growing customers across the globe and have delivered phenomenal numbers yet...

Henry Soediarko

China & HK Strategy: Stocks Exposed to the US and Higher Tariffs

​US tariffs may only affect an average of ~10% revenue of HK-listed industrials on a net basis. Vesync, Chervon, and AAC Technologies look exposed...

Osbert Tang, CFA

Zhejiang Cangnan Instrument IPO - Quick Thoughts - Probably at Peak Growth and Peak Margins

Zhejiang Cangnan Instrument (1743 HK) plans to raise up to US$114m in its IPO via an issuance of primary shares.Over FY15-17, sales grew at 36%...

Sumeet Singh

Wasion Group Holdings (3393 HK) expects 54% net profit growth in 1H 24, and its holding in Willfar Information Technology also adds another upside...

US tariffs may only affect an average of ~10% revenue of HK-listed industrials on a net basis. Vesync, Chervon, and AAC Technologies look exposed...