In this briefing:
- Global Manufacturing PMI Slump at Odds with Equity and Commodity Price Rebound
- Ctrip (CTRP): Overcame Two Difficulties in Q4, But Market Over-Reacted to “Global No. 1”
- Taiwan Investors Factor In China Recovery
- StubWorld: Matheson’s Strategic Buying of Strategic
- Nio (蔚来) Lock-Up Expiry – Scattered Pre-IPO Investors to Be the Sellers
1. Global Manufacturing PMI Slump at Odds with Equity and Commodity Price Rebound
The slump in the global manufacturing PMIs that is broad-based in major economies and alarming in Japan, Korea and Taiwan, appears to reflect a disruption in global trade that may relate to US tariff policy. Services PMIs, on the other hand, are relatively stable and have recovered recently, and may help the global economy avoid a recession. India’s PMIs have been relatively strong and may account for solid Indian currency and equity market performance. The slump in the global manufacturing PMI is at odds with stronger global equities and commodity prices this year. The market appears to be building confidence that the US-China trade dispute will be resolved, and the Chinese stimulus and a patient Fed will combine to revive manufacturing PMIs is coming months.
2. Ctrip (CTRP): Overcame Two Difficulties in Q4, But Market Over-Reacted to “Global No. 1”
* The recovery in 4Q2018 shows that CTRP has already survived the new law and the new competitor in 2018.
* We believe EPS will grow 12% in 2019.
* However, we believe the market has already over-reacted to the news last November that CTRP became the largest online travel agency.
* We set a target price of USD23.80, which is 32% below the market price.
3. Taiwan Investors Factor In China Recovery
It is time to go increase exposure to Taiwanese equities, if you haven’t already. Like bourses around the region, Taiwan’s stock market has rebounded from its January low and is up over 10% in two months. Underpinning our and investor optimism are expectations that Taiwan stands to benefit disproportionately from the fiscal and monetary policy easing underway in China, that China and the US will get to some kind of trade deal and a positive reaction to TSMC’s 2019 dividend pay-out plan.
4. StubWorld: Matheson’s Strategic Buying of Strategic
This week in StubWorld …
- Jardine Matheson Hldgs (JM SP)‘s recent buying of Jardine Strategic Hldgs (JS SP) is nothing new and follows a long-term plan to fortify the cross-holding structure.
Preceding my comments on Jardine and other stubs are the weekly setup/unwind tables for Asia-Pacific Holdcos.
These relationships trade with a minimum liquidity threshold of US$1mn on a 90-day moving average, and a % market capitalisation threshold – the $ value of the holding/opco held, over the parent’s market capitalisation, expressed in percent – of at least 20%.
5. Nio (蔚来) Lock-Up Expiry – Scattered Pre-IPO Investors to Be the Sellers
NIO Inc (NIO US)‘s lock-up will expire next week on the 11th of March. Shareholding breakdown suggests that there will be overhang upon lock-up expiry due to the large number of scattered pre-IPO shareholders.
In this insight, we will look at the principal and pre-IPO investors and analyze who and how many shares would likely be sold upon lock-up expiry.
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