Category

Thematic (Sector/Industry)

Dec 22
0

Daily Brief Thematic (Sector/Industry): Overview of My Winners and Losers in 2022…And 5 High Conviction Ideas Going into 2023 and more

By | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

  • Overview of My Winners and Losers in 2022…And 5 High Conviction Ideas Going into 2023
  • Good Morning Japan |Stocks (Finally) Catch a Break; Cyclicals Rebound; And..we Resume in 2023 !
  • Payment Companies – 2022 in Review, Our High Conviction Calls for 2023
  • China’s Export Outlook 2023: How Port, Shipping and Logistics Fare?
  • Korea Biotech: A Pair Trade Between Celltrion Healthcare (091990 KS) And SK Bioscience (302440 KS)

Overview of My Winners and Losers in 2022…And 5 High Conviction Ideas Going into 2023

By Nicolas Van Broekhoven

  • The 2022 vintage of “5 High Conviction Ideas” had the weakest performance since 2017, with only China Shineway posting a positive return
  • Olam, Rex and Starhub all declined approximately 16% in FY22
  • Our 2023 vintage will hopefully perform better with 4 out of 5 favorites in the commodity space

Good Morning Japan |Stocks (Finally) Catch a Break; Cyclicals Rebound; And..we Resume in 2023 !

By Mark Chadwick

  • OVERSEAS: SPX +1.5%. Reflex US Rally post recent sell-off. Energy, Industrials, Tech lead in the Beta rally; Cons Confidence BTE; Nike +12% rpt inspires; Micron -ve after hrs
  • JAPAN: Futs flat vs Cash. USDJPY supported at ¥132  (for now); BOJ related/JGB  rates aside dominate narrative;  INBOUND tourists return;  Decarb spend to accelerate; Debt rating D/G for Rakuten
  • DAILY NUGGET: Yōkoso!  Japan. The November tourist numbers saw a doubling MoM to 934,500 visitors. However, the Chinese visitors are not here yet. It likely takes some time…

Payment Companies – 2022 in Review, Our High Conviction Calls for 2023

By Victor Galliano

  • Once again, our shorts – especially Kakao Pay and Paytm – were more successful than our longs, given the protracted turbulent market conditions
  • For 2023, we favour Visa in the card network megacaps, adding Wise to the buys and we stick with PagSeguro; we drop Nexi from the buy list
  • Among our shorts, we stick with our negative view on DLocal, given its high take-rate and demanding valuations, and we stay negative on Kakao Pay due to its fundamental over-valuation

China’s Export Outlook 2023: How Port, Shipping and Logistics Fare?

By Osbert Tang, CFA

  • Weaker OECD demand, diversification of supply chain out of China, lesser room for Rmb depreciation and high base effects all suggest challenging export environment for China in 2023. 
  • We expect 5-10% drop in China’s export in next year, against consensus of 0.2% growth. Except ASEAN, exports to all major trading partners are already deep in negative in Nov.
  • Long-Haul container shipping is the most disastrous, while port and logistics sectors are less vulnerable. We think SITC International (1308 HK) and Sinotrans (598 HK) will fare better than others.

Korea Biotech: A Pair Trade Between Celltrion Healthcare (091990 KS) And SK Bioscience (302440 KS)

By Tina Banerjee

  • Here we present a pair trade idea on Korea biotech companies. Investors can accumulate Celltrion Healthcare (091990 KS) and short SK Bioscience (302440 KS).
  • Celltrion Healthcare has a vast portfolio of biosimilars, which have dominant market positioning. The company is expanding geographical presence. US launch of Humira biosimilar is the major upcoming catalyst.
  • SK Bioscience is a late entrant in the overcrowded COVID-19 vaccine market. The company has temporarily halted production of its COVID-19 vaccine due to falling demand.

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Dec 21
0

Daily Brief Thematic (Sector/Industry): Good Morning Japan |Shock and Awe – BOJ Sends Ripple Though Markets in Kuroda’s Parting Shot and more

By | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

  • Good Morning Japan |Shock and Awe – BOJ Sends Ripple Though Markets in Kuroda’s Parting Shot
  • Macau 2.0: What Investors Need to Know About the New State of Play

Good Morning Japan |Shock and Awe – BOJ Sends Ripple Though Markets in Kuroda’s Parting Shot

By Mark Chadwick

  • OVERSEAS:  SPX +0.1%, eakes out gains; BOJ takes the spotlight as Kuroda delivers “SHOCK AND AWE” (or just bad communication); TSLA at 2 year low-we are focused on deliveries
  • JAPAN:  NKY Futs vs Cash -0.9% – mainly due to yen strengthening; BOJ’s change reverberates across markets;  Positive 3Q Takashimaya preview positive read for Inbound; Courts support Nuke restarts
  • DAILY NUGGETS: The BOJ has started on the path towards policy normalisation, SIX MONTHS EARLY. No issues with the move – the shift was poorly communicated, or rather, NOT COMMUNICATED. 

Macau 2.0: What Investors Need to Know About the New State of Play

By Howard J Klein

  • The new concession laws go into effect January 1st. They are far less punitive than feared but still continue to bear uncertainties for the six licensed peers in the sector.
  • All will respond positively to the early phase of post pandemic GGR recovery. All are attractively priced now. A portfolio position is warranted as prices remain near 5 yr lows.
  • The central question: Will the US$12 already pledged by the six concessionaires as the price of renewal elevate Macau to a world class tourist destination?

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Dec 20
0

Daily Brief Thematic (Sector/Industry): Good Morning Japan | No Shortage of Equity Negative News; BOJ to Stay Pat; Bullish 2023 ? and more

By | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

  • Good Morning Japan | No Shortage of Equity Negative News; BOJ to Stay Pat; Bullish 2023 ?
  • Interpretation of China’s Central Economic Work Conference for 2023
  • Weekly Stock Bullfinder – Week of 12/19

Good Morning Japan | No Shortage of Equity Negative News; BOJ to Stay Pat; Bullish 2023 ?

By Mark Chadwick

  • OVERSEAS:  SPX down 4 in a row, -20%YTD;  Higher UST Yields and Negative Homebuilder print pressure equities; Chief Twit’s followers want him out;  China hints strong economic support in 2023
  • JAPAN:  BOJ to stay pat; JP FY23 Budget largest ever; Kawasaki Kisen to lift ShrHldr Returns; Subaru gives up on PHVs;  Toyota CEO thinks mkt not ready for EVs
  • DAILY NUGGET: We take a look at the upcoming boom in Hydrogen in the push to decarbonise; Our preferred play is MHI (7011)

Interpretation of China’s Central Economic Work Conference for 2023

By Xinyao (Criss) Wang

  • The annual Central Economic Work Conference was held to plan for 2023. We analyzed our interpretation. Sometimes we need to be “romantic” to understand some basic assumptions.
  • China’ll be more committed to economic growth after the big shift in COVID policy. However, we may face a situation where both domestic and external demand would weaken next year.
  • When paying attention to changes, we should see whether the external environment supports such changes. For investors, our advice is that many things should be done according to the trend.

Weekly Stock Bullfinder – Week of 12/19

By Weekly Stock Bull Finder

  • “Fed economic projections published December 2021: In 2022 the Fed funds rate will be less than 1% & GDP growth will be 4%.
  • In December 2022 the Fed funds rate is now 4.25% and 2022 GDP growth they now show is at 0.5%. Why is anybody still listening to these people?
  • Nobody is asking for perfection which is impossible, but the Fed has again, and they’ve done this multiple times including last year with inflation, produced forecasts not even remotely close to reality. Their forecasts are meaningless with zero predictive value.

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Dec 19
0

Daily Brief Thematic (Sector/Industry): Good Morning Japan |Argentina and Messi Triumph! Recession Fears Persist – No Break for Equities and more

By | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

  • Good Morning Japan |Argentina and Messi Triumph! Recession Fears Persist – No Break for Equities
  • China Makes U-Turn on COVID Policy – Here Are the Direct Impacts and Investment Opportunities
  • China Private Higher Education Sector Is Recovering
  • China COVID Policy: Near-Term Pains for Consumer Discretionary
  • The Innovations Portfolios – Week Four

Good Morning Japan |Argentina and Messi Triumph! Recession Fears Persist – No Break for Equities

By Mark Chadwick

  • OVERSEAS:  WCUP: Argentina/Messi prevail; SPX -2.1%WoW on recession narrative; SPX option expiry exacerbates moves;  Calls for new TESLA CEO; GS to cut 8% of workforce;  Covid spreads in China
  • JAPAN:  NKY Futs at -0.9% vs Cash;  Defense Bill Approved – no tax hike till 2024; Lawson’s Seijo Ishii IPO postponed; Renesas suspends China ops on Covid; Decarbonization-related investments unabated
  • DAILY NUGGET:  We look a the another attempt of the Japanese government at regional revitalization. Smells of pork barrel spending to us.

China Makes U-Turn on COVID Policy – Here Are the Direct Impacts and Investment Opportunities

By Xinyao (Criss) Wang

  • China’s relaxation of COVID-19 control measures is much faster than expected. Due to rising infection rate and mortality rate, China would bear some pressure in the short term. 
  • We analyzed the direct impacts due to COVID policy shift and related investment opportunities. The hardest time of three-year COVID-19 has passed.The playbook of the pandemic is about to end.
  • With the new leadership taking office, China will be more committed to economic growth after the Two Sessions. Starting from 2023H2, China could formulate independent financial/monetary policies. China will change. 

China Private Higher Education Sector Is Recovering

By Xin Yu, CFA

  • On December 14, the CPC Central Committee and the State Council issued the Outline of the Strategic Plan for Expanding Domestic Demand (2022-2035), supporting private education in China.
  • Private higher education is a necessary complement to the public higher education in China.
  • Private higher education sector is an attractive sector for investing now.

China COVID Policy: Near-Term Pains for Consumer Discretionary

By Osbert Tang, CFA

  • While China’s U-turn on COVID policy is expected to bring consumption rebound in 2023, the near-term surge in infections will weigh negatively on retail sales in Dec and Jan.
  • Residents are spending more time at home in the first wave, with subways and shopping malls empty. We think this will cast negativity on 4Q22 and 1Q23 consumer discretionary profit.
  • It is prudent to take some monies off the table, particularly F&B stocks like Haidilao (6862 HK), Xiabuxiabu (520 HK) and Helen’s (9869 HK) which have almost doubled from trough.

The Innovations Portfolios – Week Four

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 Mastercard (MA US) , Vertex Pharmaceuticals (VRTX US) and Pearson Plc (PSON LN) 
  • For the four weeks ended 16 Dec the combined innovation portfolio was -1.1%, versus DJIA -2.4%, S&P500 -2.8%, Nasdaq -4.0% & MSCI-ACWI-ETF -2.3%, all in US$ terms.

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Dec 18
0

Daily Brief Thematic (Sector/Industry): China Healthcare Weekly (Dec.16) – ICU Expansion and more

By | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

  • China Healthcare Weekly (Dec.16) – ICU Expansion, Abnormal Medical Demand, Dying Chapter 18A of HKEX
  • GEM Weekly: 2022 Yearend Edition

China Healthcare Weekly (Dec.16) – ICU Expansion, Abnormal Medical Demand, Dying Chapter 18A of HKEX

By Xinyao (Criss) Wang

  • National Health Commission reiterated that the number of ICU beds in designated hospitals should reach 10% of total beds, but we think the expansion/construction of ICU should be treated rationally. 
  • The medical demand in 2020-2022 was very abnormal. If demand returns to normal in 2023H2, the overall growth of the healthcare industry would return to natural growth.
  • Among the 53 companies listed under Chapter 18A, there’re less than 15 companies that are really seriously developing drugs/devices, which could be the fundamental reason for big differentiation of valuation.

GEM Weekly: 2022 Yearend Edition

By Wium Malan, CFA

  • The Global Emerging Markets weekly provides a summary of the key news and related developments impacting the largest countries and constituents of the Global Emerging Markets equity indices.
  • In our final weekly for the year, we look back at 2022 to see which stocks, countries, and currencies out and underperformed in the Global Emerging Markets.
  • We also look forward to 2023F to see what’s expected for the major GEM economies next year.  

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Dec 17
0

Daily Brief Thematic (Sector/Industry): Japan Weekly | Euglena and more

By | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

  • Japan Weekly | Euglena, Kawasaki Heavy, Monotaro
  • China Oceanwide Has Potential Buyer for $1.2 Billion LA Project

Japan Weekly | Euglena, Kawasaki Heavy, Monotaro

By Mark Chadwick

  • Japanese stocks headed lower this weak on concerns about rising global interest rates and a looming recession
  • Euglena, a small cap Japanese bio-tech, has found itself as a key part of the future for biofuels and SAF. 
  • Japanese Heavies are so diverse that they now fit into many thematic portfolios. KHI looks well placed in the hydrogen supply chain and carbon capture. Exciting times

China Oceanwide Has Potential Buyer for $1.2 Billion LA Project

By Caixin Global

  • A Chinese developer of beleaguered projects across the U.S. has found a potential buyer for a stalled Los Angeles complex where it spent $1.2 billion before running out of money.
  • China Oceanwide Holdings Ltd. said a “purchase and sale agreement is now under negotiation” between the company and the potential buyer, according to a filing in Hong Kong Friday.
  • The company faces $220 million in lawsuit liabilities on the LA project, where a partially built three-tower hotel and residential complex has been in limbo for years

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Dec 16
0

Daily Brief Thematic (Sector/Industry): Good Morning Japan |Hawkish ECB + US Retail Miss Fan Recession Fears – Equities Take It on the Chin and more

By | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

  • Good Morning Japan |Hawkish ECB + US Retail Miss Fan Recession Fears – Equities Take It on the Chin

Good Morning Japan |Hawkish ECB + US Retail Miss Fan Recession Fears – Equities Take It on the Chin

By Mark Chadwick

  • OVERSEAS:  Global rate hikes+weak US Retail fan recession fears ; Tech hit hard: Macro + WDC hit on GS downgrade + NVDIA Sell initiation; Musk Continues to unload TSLA
  • JAPAN: NKY Futs -1.6% vs Cash; USDJPY weakens to ¥137.84; Corp tax hike to fund Defense-says LDP; Sony to expand image sensors; Fast Retailing 3:1 stock split; Decarbonization investments accelerating
  • DAILY NUGGET: Tokyo Electric Power to mine Bitcoin ? Huh ?  Today we take a look at this bit of “breaking news”

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Dec 15
0

Daily Brief Thematic (Sector/Industry): Good Morning Japan | Markets Hear “RECESSION” and more

By | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

  • Good Morning Japan | Markets Hear “RECESSION”
  • Anatomy Of A Semiconductor Downturn
  • Heard on the Bund – China TMT and Consumer Bi-Weekly

Good Morning Japan | Markets Hear “RECESSION”

By Mark Chadwick

  • OVERSEAS: Fed Pivots – Powell unleashes his inner VOLCKER with hawkish comments; Rates fall ; USD falls; Equities on recession fears; GS to cuts bonuses;  Massive Nuclear Fusion breakthrough
  • JAPAN:  NKY Futs -0.9% vs Cash; USDJPY ¥135.4 – stable post Fed move;  BOJ review in 2023- wages key; Struggles in financings Defense spending; JP companies ramping Darbonization spending.
  • DAILY NUGGET: We look at why Nuclear Fusion matters in light of the recent breakthrough. This is a BIG DEAL.

Anatomy Of A Semiconductor Downturn

By Semicon Alpha

  • The origins of the current semiconductor downturn can be traced back to last May.
  • That’s when the leading PC OEMs posted their first quarter results, and in some cases, their second quarter outlook.
  • For some context, it is well understood that the pandemic roused the slumbering PC market to an extraordinary degree after the initial shock waves reverberated around the globe in Q1 2020.

Heard on the Bund – China TMT and Consumer Bi-Weekly

By Eric Chen

  • IQIYI DAU surpassed 100 million  for the first time since 2020
  • Recovering China advertising market and industry’ optimistic outlook for 2023 
  • COVID infection rates in China, third growth driver of Xiabuxiabu

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Dec 14
0

Daily Brief Thematic (Sector/Industry): Good Morning Japan | Soft(Er) CPI; Fed Pause Sealed; Equities Rip..then the FADE and more

By | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

  • Good Morning Japan | Soft(Er) CPI; Fed Pause Sealed; Equities Rip..then the FADE
  • China Plans to Broaden Scope of REITs for Bolstering Property Sector

Good Morning Japan | Soft(Er) CPI; Fed Pause Sealed; Equities Rip..then the FADE

By Mark Chadwick

  • OVERSEAS:  Soft CPI Print – Fed Pause in sight, Equities rip; Swap markets now at 25bp hikes;  Record UAL-Boeing deal for planes;  Co-founder of FTX, SBF arrested (finally)
  • JAPAN:  NKY Futs flat % vs Cash; USDJPY 135 handle; Govt to introduce Carbon Trading;  FOR >AGAINST in latest Nuke Power Poll;  Apple deeply invested in Japan
  • DAILY NUGGET: APPLE and Japan supply chain – an already deep relationship set to expand further.

China Plans to Broaden Scope of REITs for Bolstering Property Sector

By Caixin Global

  • China plans to broaden the scope of real estate investment trusts, which raise funds to invest in property assets
  • The government will consider expanding an REIT pilot program to include market-oriented long-term rental and commercial real estate sectors
  • As of the end of November, 24 infrastructure REITs were approved and 22 sold shares, raising more than 75 billion yuan ($10.8 billion), official data showed.

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Dec 13
0

Daily Brief Thematic (Sector/Industry): Post Card from Dhaka – A Primer on the Bangladesh Market and more

By | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

  • Post Card from Dhaka – A Primer on the Bangladesh Market
  • Japan’s Retailers, Hotels, Carriers Rejoice: Domestic Tourism Surges and Inbound Traffic Rises
  • Good Morning Japan |Positive Start Ahead of Fed/CPI; Energy Gets a Break
  • China E-Commerce 2023: Fortunes Unlikely To Change With China Moving To a State-Dominated Economy

Post Card from Dhaka – A Primer on the Bangladesh Market

By Pranav Bhavsar

  • Bangladesh is the eighth-most populous country in the world and is the second-largest economy in South Asia after India making it a consumer market that warrants close attention. 
  • India – Bangladesh FTA promises to accelerate trade, but we find little excitement on the ground.
  • For an EM Investor, it may be a bit too adventurous to venture into this frontier market plagued with political dynamics and governance risks which are too large to ignore. 

Japan’s Retailers, Hotels, Carriers Rejoice: Domestic Tourism Surges and Inbound Traffic Rises

By Michael Causton

  • The long awaited lifting of restrictions on inbound tourists in October seems to have given new confidence to domestic tourists too.
  • Major airlines, hotels and railways are all reporting a significant uplift in bookings with several forecasting that figures will exceed 2019 by March next year.
  • Retailers have benefitted too, notably department stores and lifestyle retailers. Now all Japan needs is for Chinese tourists to be allowed out.

Good Morning Japan |Positive Start Ahead of Fed/CPI; Energy Gets a Break

By Mark Chadwick

  • OVERSEAS: SPX +1.4% ahead of Fed/CPI; Energy and Tech lead with Industrials; Boeing +3.8% poised for massive Air India order; GS restructures its Consumer Banking biz
  • JAPAN:  Nikkei Futures point +0.6% vs Cash; Yen weakens to ¥137.6;  Govt clarifiies NISA expansiion-positive flows to stock mkt; Nov Beer sales weak; Mach Tool order in Nov -7.8%YoY
  • DAILY NUGGET: We are bullish IHI(7013) on the acceleration of Boeing’s orders but highlight some industry risks coming out of Europe to short-haul flights.

China E-Commerce 2023: Fortunes Unlikely To Change With China Moving To a State-Dominated Economy

By Oshadhi Kumarasiri

  • Chinese e-commerce companies have underperformed in the last couple of years with immense regulatory-pressure. Although, there’s been a resurgence lately, we are not expecting a complete change of fortunes next-year.
  • Regulatory crackdowns have already had their stab at curtailing Chinese e-commerce valuations but the effects of Common Prosperity and a State-Dominated-Economy will continue to impact the industry over-medium-long term.
  • Meanwhile, the Chinese economy looks fragile with high unemployment among youths and many local governments on the brink of bankruptcy.

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