In today’s briefing:
- Quiddity HK Connect SOUTHBOUND Flows (Week to 22Sep23) : China Mobile, Meituan, Xpeng, Banks!
- Merger Arb Mondays (25 Sep) – ENM, Poly Culture, Eoflow, Origin Energy, Symbio, Costa, InvoCare
- Quiddity A/H Premium Weekly (To 22Sep23): Financials & Communications Dominate Flows
- Shortlist Of High Conviction Ideas: Income, Value, and Margin of Safety – September 2023
- Quiddity Mainland Connect NORTHBOUND Flows (Week to 22Sep23) : BYD, Midea, Bk of Jiangsu, & Amperex
- Lonking (3339 HK): Between a Rock and a Hard Place
- Huawei and Kirin 9000S, Memory Markets, Intel, Nordic, and Broadcom TPUs
- Monthly Chinese Express Tracker | August ASPs Plunge | Long SF / Short ‘Ground’? | (September 2023)
- Morning Views Asia: JSW Steel Ltd, Redsun Properties Group Ltd
Quiddity HK Connect SOUTHBOUND Flows (Week to 22Sep23) : China Mobile, Meituan, Xpeng, Banks!
- This is the brand spanking new Quiddity HK Connect SOUTHBOUND Monitor. We work off the same presentation as the A/H Premium Monitor and Mainland Connect NORTHBOUND Monitor.
- The data on liquid names is presented for 5 days and four weeks and anything seen can be ranked in tables or selected and charted (names, sectors, outperformance, etc).
- We like the nifty interactive tables and charts and welcome feedback. This week saw HKD 14.5bn+ of net buying. That makes ten weeks of net inflows.
Merger Arb Mondays (25 Sep) – ENM, Poly Culture, Eoflow, Origin Energy, Symbio, Costa, InvoCare
- We summarise the latest spreads and newsflow of merger arb situations we cover across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
- Highest spreads – 111 Inc (YI US), Eoflow (294090 KS), Symbio Holdings (SYM AU), Mason Group Holdings (273 HK), JSR Corp (4185 JP), DDH1 (DDH AU), ENM Holdings (128 HK).
- Lowest spreads – Toyo Construction (1890 JP), Healius (HLS AU), Yaizu Suisankagaku Industry (2812 JP), Allkem Ltd (AKE AU), Pact Group Holdings (PGH AU), Pacific Current (PAC AU).
Quiddity A/H Premium Weekly (To 22Sep23): Financials & Communications Dominate Flows
- The Brand-Spanking New (7 weeks old) A-H Monitor has tables, charts, measures galore to track A/H premium positioning, southbound and northbound positioning in pairs over time, etc.
- We used to do it and brought it back better. There are lots of cool interactive tables, and charts, heat maps, and comparative data. And 47 Trade Recommendations.
- The last 6 weeks (since the start of the new Monitor and Portfolio 7 weeks ago) have seen net portfolio performance of +0.50%, +1.35%, +0.14%, +0.47%, +0.15%, +0.12%.
Shortlist Of High Conviction Ideas: Income, Value, and Margin of Safety – September 2023
- We compile our selection of small and mid-cap names with our desired characteristics of high dividend yields, value, and margin of safety.
- Our top picks are Perfect Medical Health (1830 HK), Water Oasis (1161 HK), Taste Gourmet (8371 HK), Uchi Technologies (UCHI MK), and The Keepers Holdings (KEEPR PM).
- We add UMP Healthcare (722 HK) to our list of small/mid-cap names we track. The company has just recently declared its full-year results.
Quiddity Mainland Connect NORTHBOUND Flows (Week to 22Sep23) : BYD, Midea, Bk of Jiangsu, & Amperex
- This is the brand spanking new Quiddity Mainland Connect NORTHBOUND Monitor. We work off the same presentation as the A/H Premium Monitor and HK Connect SOUTHBOUND Monitor.
- The data on liquid names is presented for 5 days and four weeks and anything seen can be ranked in tables or selected and charted (names, sectors, outperformance, etc).
- We like the nifty interactive tables and charts and welcome feedback. This week saw small net buying for the first week in seven.
Lonking (3339 HK): Between a Rock and a Hard Place
- While valuations for Lonking Holdings (3339 HK) do not appear expensive, there is a risk that the 2H23 earnings outlook is weaker than expected. This opens room for disappointment.
- There is no sign that domestic sales have picked up and Jul-Aug was still down significantly. Meanwhile, the strong export in 1H23 has not sustained in the last two months.
- The weaker A-share market so far in 2H23 also does not bode well for investment gains, which are important contributors to the impressive earnings rebound in 1H23.
Huawei and Kirin 9000S, Memory Markets, Intel, Nordic, and Broadcom TPUs
- First, let’s talk about Huawei. I want to highlight how lackadaisically the export restrictions have even been applied.
- BIS granted validated end-user status to SMIC in 2007, which meant that as late as 2020, multiple SMIC entities were still receiving tools from American companies.
- BIS got lobbied by tool makers to undo commerce control list regulations in 2018. Also, AMEC has outright stolen tools from US companies.
Monthly Chinese Express Tracker | August ASPs Plunge | Long SF / Short ‘Ground’? | (September 2023)
- Express industry pricing fell by -5% in August, but some companies’ ASPs fell by far more
- Reportedly, we could see movement on planned J&T Express and CaiNiao IPOs this week
- We think SF Holding should outperform its “plain vanilla” express peers in medium-term
Morning Views Asia: JSW Steel Ltd, Redsun Properties Group Ltd
Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.