Category

Thematic (Sector/Industry)

Jan 03
0

Daily Brief Thematic (Sector/Industry): China Consumer Discretionary: Short-Term Tough Buying Long-Term Up and more

By | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

  • China Consumer Discretionary: Short-Term Tough Buying Long-Term Up

China Consumer Discretionary: Short-Term Tough Buying Long-Term Up

By Osbert Tang, CFA

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Jan 02
0

Daily Brief Thematic (Sector/Industry): China Healthcare Weekly (Jan.1) – NRDL Negotiation Turnaround and more

By | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

  • China Healthcare Weekly (Jan.1) – NRDL Negotiation Turnaround, Pullback of TCM, Biotech Sales System
  • The Innovations Portfolios – Week Six

China Healthcare Weekly (Jan.1) – NRDL Negotiation Turnaround, Pullback of TCM, Biotech Sales System

By Xinyao (Criss) Wang

  • This year’s NRDL negotiations could be a turnaround. If the final result really shows a moderate price decline, it will be “a landmark event” for the innovative drug industry.
  • Starting from 23Q2, with the peak of respiratory disease/COVID-19 outbreak past, the demand for related TCM would weaken. Then, the pullback of TCM would really begin.
  • Even if biotech initially tells the story of becoming a biopharma to obtain financing, it will not be realized in the end.

The Innovations Portfolios – Week Six

By Pyari Menon

  • We again write about one stock each from the large, mid and small cap portfolios, briefly giving the reasons behind their inclusion.
  • The three companies we write about this week are Samsung Electronics (005930 KS) , Schlumberger Ltd (SLB US) and Whirlpool Corp (WHR US) 
  • For the six weeks ended 30 Dec the combined innovation portfolio was -1.7, versus DJIA -1.8%, S&P500 -3.2%, Nasdaq -6.1% & MSCI-ACWI-ETF -2.4%, all in US$ terms

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Jan 01
0

Daily Brief Thematic (Sector/Industry): China Investment Opportunities in 2023 and more

By | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

  • China Investment Opportunities in 2023
  • India Australia ECTA- Threat to Domestic Wine Leaders?

China Investment Opportunities in 2023

By Xin Yu, CFA

  • China’s re-opening in 2023 will lead to gradual economy recovery. GDP growth is expected to rebound to ~4.5% from 3.3% in 2022. 
  • China’s earnings growth will resume, and equity market valuation is at an attractive level now.
  • Near-Term re-opening related investments opportunities and long-term growth themes of the China market.

India Australia ECTA- Threat to Domestic Wine Leaders?

By Nitin Mangal

  • The India-Australia Economic Cooperation and Trade Agreement (INDAUS ECTA) has come into force this week onward.
  • Out of the plethora of goods and services to be influenced, we find the wine industry especially in India could be an interesting beneficiary.
  • Given that Australia is one of the bigger wine exporters, expansion into the Indian market might change the dynamics of domestic wine industry, and players like Sula Vineyards (1332009D IN). 

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Dec 30
0

Daily Brief Thematic (Sector/Industry): Spicy Hot: India Branded Staples in Limelight – Acquisitions & Fresh Forays and more

By | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

  • Spicy Hot: India Branded Staples in Limelight – Acquisitions & Fresh Forays
  • Taiwan Semiconductors: Value Funds Drive Underweight

Spicy Hot: India Branded Staples in Limelight – Acquisitions & Fresh Forays

By Devi Subhakesan

  • India’s packaged and processed food segment is in limelight with leading consumer companies launching/expanding their branded staples portfolio, and recent acquisitions in the branded spice segment.
  • Reliance retail launched packaged staples and food brand Independence; a potential competition to Adani Wilmar, ITC Ltd, and Tata Consumer that have been expanding in this space.
  • Dabur (DABUR IN) had announced acquisition of a 51% stake in veteran spice brand Badshah Masala in October this year, now followed by Wipro Consumer’s takeover of spice player Nirapara.

Taiwan Semiconductors: Value Funds Drive Underweight

By Steven Holden

  • GEM funds reduce exposure to Taiwanese Semiconductors, switching from overweight to their largest underweight in over a decade.
  • Absolute positioning levels still high, with Taiwanese Semiconductors the largest country/industry allocation for 61% of the managers in our analysis and a top 3 allocation for 78%.
  • Value investors moved first, switching from near equal weight in early 2020 to -1.95% underweight today.  All Style groups are now positioned underweight the MSCI EM benchmark, on average.

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Dec 29
0

Daily Brief Thematic (Sector/Industry): China Consumer Discretionary: Reducing The Underweight and more

By | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

  • China Consumer Discretionary: Reducing The Underweight
  • China Baowu Steel Officially Takes Over Sinosteel
  • Sunny Optical & Largan – Innovation Quantity Versus Quality

China Consumer Discretionary: Reducing The Underweight

By Steven Holden

  • 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 Baowu Steel Officially Takes Over Sinosteel

By Caixin Global

  • Beijing-based Sinosteel Corp. was restructured and merged into China Baowu Steel Group Corp. Ltd.
  • Baowu Steel Group took Sinosteel into its stewardship in October 2020 as the SASAC-owned company ran into debt trouble.
  • Formed after the reorganization of the former Baosteel and Wuhan Iron and Steel in 2016, China Baowu has carried out a series of strategic mergers and restructurings in recent years, becoming the world’s largest steelmaker.

Sunny Optical & Largan – Innovation Quantity Versus Quality

By Pyari Menon

  • Sunny Optical (2382 HK)  and Largan Precision (3008 TT) dominate the compact lens module market, but analysis of data from technical publications suggests very different strategies.
  • After lagging Largan significantly till 2016, Sunny Optical now leads in number of innovations, though the impact and quality of the innovations still materially lags Largan
  • Besides overcapacity the primary risk for the industry is whether at some some stage the benefits of “next-gen” lens modules fall below the “Noticeable Difference” threshold.

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Dec 28
0

Daily Brief Thematic (Sector/Industry): Asia Casino Sector: Our Model Portfolio Guidance for 2023 Divides Macau and ASEAN Weightings and more

By | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

  • Asia Casino Sector: Our Model Portfolio Guidance for 2023 Divides Macau and ASEAN Weightings
  • Evergrande Reports Narrowing Differences in Debt Restructuring Talks
  • Our Three Best Calls in 2022: Review and Outlook for 2023

Asia Casino Sector: Our Model Portfolio Guidance for 2023 Divides Macau and ASEAN Weightings

By Howard J Klein

  • Our macro analysis concludes a 60%.40% weighting of stocks in favor of ASEAN picks.
  • Central reason: Lingering mixed signals on China covid policies remaining unclear.
  • Pent up demand will eventually break through as travel bans ease,but timing is key to make choices on Macau centric stocks.

Evergrande Reports Narrowing Differences in Debt Restructuring Talks

By Caixin Global

  • Debt-laden developer China Evergrande Group said disagreements are narrowing among parties involved in discussions of its offshore debt restructuring plan as talks continue to push toward a consensus.
  • China Evergrande, which defaulted on its first offshore bond a year ago, failed to deliver a restructuring plan it had promised by the end of July. 
  • In its most recent update on the negotiations Tuesday, the company said there is still great uncertainty on repayment given the company’s massive debts and challenging business situation.

Our Three Best Calls in 2022: Review and Outlook for 2023

By Osbert Tang, CFA

  • Our positive calls on Fu Shou Yuan (1448 HK) and Air China Ltd (753 HK) and negative call on Conch Environment (587 HK) have generated the best wins in 2022.
  • These calls achieved returns of 56.8%, 34.2% and 43.5%, respectively, which we think are remarkable given the losses of 16.3% for HSI and 19.3% for HSCEI YTD.
  • In 2023, we expect Fu Shou Yuan continue to do well and Conch Environment to remain under pressure. It may be prudent to take some profit on Air China.  

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Dec 27
0

Daily Brief Thematic (Sector/Industry): The Bubble Isn’t Where You Think It Is and more

By | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

  • The Bubble Isn’t Where You Think It Is

The Bubble Isn’t Where You Think It Is

By Superfluous Value

  • Just a short pre-Christmas note today. A number of market pundits have been giving the all clear to jump back in the pool now that crypto has been nuked and Peleton et al are down 80%+.
  • Yes, those were bubbles of the more ridiculous variety, but the S&P 500 is still dangerously expensive and growth stocks are not the sole reason.
  • Under the hood, the index is stuffed with mature industrial and consumer businesses still trading well above their historical norms.

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Dec 26
0

Daily Brief Thematic (Sector/Industry): China Healthcare Weekly (Dec.25) – OK Lens VBP and more

By | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

  • China Healthcare Weekly (Dec.25) – OK Lens VBP, Angelalign, Extraordinary 2022 for Pharmaceuticals
  • The Innovations Portfolios – Week Five

China Healthcare Weekly (Dec.25) – OK Lens VBP, Angelalign, Extraordinary 2022 for Pharmaceuticals

By Xinyao (Criss) Wang

  • Medical Insurance Bureau of Hebei released the document on centralized procurement of OK lens, which was the first detailed rules about OK lens VBP in China.
  • The results of orthodontic material centralized procurement of 16 provincial alliance led by Shaanxi were released. We analyzed the direct impacts on Angelalign Technology (6699 HK) and the outlook.
  • Even from the perspective of the whole process of the development of China’s pharmaceutical industry after the reform and opening up, 2022 is an extraordinary year for the pharmaceutical industry.

The Innovations Portfolios – Week Five

By Pyari Menon

  • We again write about one stock each from the large, mid and small cap portfolios, briefly giving the reasons behind their inclusion.
  • The three companies we write about this week are Nestle SA (NESN VX) , Regeneron Pharmaceuticals (REGN US) and Masimo Corp (MASI US) 
  • For the five weeks ended 23 Dec the combined innovation portfolio was -1.4%, versus DJIA -1.6%, S&P500 -3.0%, Nasdaq -5.8% & MSCI-ACWI-ETF -2.2%, all in US$ terms.

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Dec 24
0

Daily Brief Thematic (Sector/Industry): 2022 in Rear Mirror View: Top Performers From My Global Healthcare Coverage Universe and more

By | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

  • 2022 in Rear Mirror View: Top Performers From My Global Healthcare Coverage Universe
  • GEM Banks; Conviction Calls for 2023
  • Micron Earnings Give Semi Market Outlook

2022 in Rear Mirror View: Top Performers From My Global Healthcare Coverage Universe

By Tina Banerjee

  • As we are heading into 2023, let us look back on the performance of some of our global healthcare stocks recommended throughout 2022.
  • Four stocks on which I am bullish, generated more than 50% return since their recommendations. 10 stocks on which I am bearish plunged more than 20%.
  • For 2023, investors should continue to focus on established healthcare companies, having strong and flexible balance sheet with muti-year revenue visibility.

GEM Banks; Conviction Calls for 2023

By Victor Galliano

  • Among bigger cap GEM banks, we pick four longs and two shorts as our conviction calls for 2023
  • Our core buys are Bank Mandiri from Indonesia, Hana Financial from South Korea, China Construction Bank and BanColombia; we also have a special mentions category for Banco Itau and Nubank
  • Our key sells are ICICI Bank from India and digital bank Jago from Indonesia

Micron Earnings Give Semi Market Outlook

By Jim Handy

  • Micron’s earnings call gives a good advanced warning of similar companies’ reports
  • The company’s downturn is the worst in the past 13 years
  • Not all chip companies will suffer this downturn, and few will do as badly as commodity memory makers.  Tool makers will feel the impact next year.

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Dec 23
0

Daily Brief Thematic (Sector/Industry): Global Exchanges – Conviction Picks for 2023 and more

By | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

  • Global Exchanges – Conviction Picks for 2023
  • Investment Maxims Are Not One-Size-Fits-All

Global Exchanges – Conviction Picks for 2023

By Victor Galliano

  • We stick with our core theme for exchanges of growing post-trading revenues, as well as capitalising on “big data” in financial transactions and data services, as we head into 2023
  • We identify four relative value opportunities in exchanges; HKEx, LSEG, MexBolsa and Deutsche Borse feature positively multiple times in our value screens and they are all diversifying revenue streams
  • We stick with Coinbase as the exchange to avoid, in our view; its revenue streams are heavily exposed to low volumes of crypto transactions, and recent events highlight counterparty risk

Investment Maxims Are Not One-Size-Fits-All

By Investment Talk

  • “Of course that’s your contention. You’re a first-year investor.
  • You just got finished reading some deep value historian, Ben Graham probably, you’re gonna be convinced of net-nets until next month when you get to Warren Buffett, then you’re gonna be talking about how Graham’s ideas are antiquated and that you simply have to buy and hold quality, letting time arbitrage do its thing.
  • That’s gonna last until next year, you’re gonna be in here regurgitating Fisher and Lynch, talkin’ about, you know, the importance of placing more emphasis on qualitative analysis in your investment process

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