Investment Advisors, JL Warren Capital

Junheng Li

Investment Advisors

JL Warren Capital

JL Warren Capital LLC is a leading independent equity research firm focused on Chinese companies and listed multinationals in China. We employ a bottom-up research approach that takes great care to avoid the acquisition of material non-public information. Through investigative due diligence including channel surveys and interviews, our research helps clients to pinpoint the dislocations in the market.

Equity Bottom-Up

This note is to share the details of an extremely enlightening call that we recently had with a professional brushing outfit in Guangdong, China.  Brushing – which is “faking” online orders and reviews - is a common practice in China by merchandisers to increase their visibility, attract traffic and improve conversion rates. Ecommerce brushing has been under scrutiny by the authorities who ask the platforms to install and implement anti-brushing measures. We survey brushers periodically to understand the dynamics between authentic and fake transactions on <a href="https://www.smartkarma.com/entities/meituan-dianping" target="_blank" data-smartkarma-citation="entities:26970" rel="noopener">Meituan Dianping (3690 HK)</a>, and <a href="https://www.smartkarma.com/entities/pinduoduo-inc" target="_blank" data-smartkarma-citation="entities:27250" rel="noopener">Pinduoduo (PDD US)</a>.

This note is to share the details of an extremely enlightening call that we recently had with a professional brushing outfit in Guangdong, China.  Brushing – which is “faking” online orders and reviews - is a common practice in China by merchandisers to increase their visibility, attract traffic and improve conversion rates. Ecommerce brushing has been under scrutiny by the authorities who ask the platforms to install and implement anti-brushing measures. We survey brushers periodically to understand the dynamics between authentic and fake transactions on Meituan Dianping (3690 HK), and Pinduoduo (PDD US).

NYSE GSX: Channel Checks Suggest High Volume of Fake Enrollments Inflated Financials

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

Despite the bulls still being in control, we have several ongoing concerns and we cannot rule out the potential for a pullback. Below we highlight developments that are inconsistent with a major bottom in equities that suggests the broad equity market is not yet out of the woods.  In fact, during today's action, the 2760 support level on the S&amp;P 500 briefly held but ultimately gave way. With the SPX holding below 2760 today, we are looking for downside targets of 2650 first, and then potentially 2470 if that fails to hold.

Despite the bulls still being in control, we have several ongoing concerns and we cannot rule out the potential for a pullback. Below we highlight developments that are inconsistent with a major bottom in equities that suggests the broad equity market is not yet out of the woods.  In fact, during today's action, the 2760 support level on the S&amp;P 500 briefly held but ultimately gave way. With the SPX holding below 2760 today, we are looking for downside targets of 2650 first, and then potentially 2470 if that fails to hold.

U.S. Equity Strategy: Several Indicators Suggest a Pullback Likely

Positive news flow surrounding COVID-19 is encouraging on many fronts. Still, despite encouraging news and the relief rally in global equities, history tells us that this is a fairly standard bear market rally in terms of its magnitude, making us believe the global equity market is not yet out of the woods. We are watching for signs of a turn of the tide. There has been significant damage inflicted and that damage is going to take time to repair. Actionable Themes in this report have representation in Staples, Health Care, Technology, and a collection of bottom-up ideas.

Positive news flow surrounding COVID-19 is encouraging on many fronts. Still, despite encouraging news and the relief rally in global equities, history tells us that this is a fairly standard bear market rally in terms of its magnitude, making us believe the global equity market is not yet out of the woods. We are watching for signs of a turn of the tide. There has been significant damage inflicted and that damage is going to take time to repair. Actionable Themes in this report have representation in Staples, Health Care, Technology, and a collection of bottom-up ideas. 

Overseas Chinese Equities, Aequitas Research

Ming Lu

Overseas Chinese Equities

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

<ul class="">
<li>JD.com (JD)’s founder resigned.</li>
<li>Luckin Coffee (LK) cooked its books.</li>
<li>Tencent (700 HK) WeChat Pay’s new function: consumer loan.</li>
<li>Tencent (700 HK) acquired 10% in Universal Music for Tencent Music (TME)'s music copyrights.</li>
<li>Baidu (BIDU)’s suspicious financing.</li>
<li>Pinduoduo (PDD)’s unnecessary financing.</li>
<li>58.com (WUBA) is going private.</li>
</ul>


JD.com (JD)’s founder resigned.
Luckin Coffee (LK) cooked its books.
Tencent (700 HK) WeChat Pay’s new function: consumer loan.
Tencent (700 HK) acquired 10% in Universal Music for Tencent Music (TME)'s music copyrights.
Baidu (BIDU)’s suspicious financing.
Pinduoduo (PDD)’s unnecessary financing.
58.com (WUBA) is going private.


China Internet Weekly (6Apr2020): JD Founder Resigned, LK Cooked Book, BIDU & PDD's Odd Financing

<ul>
<li>The Apple (APPL) retail store in the city center of Shanghai was crowded last weekend.</li>
<li>China will lift the lockdown over Wuhan on April 8.</li>
<li>Alibaba (BABA)’s group buying port, ju.taobao.com (聚划算) blocked all accounts of Pinduoduo (PDD)’s employees.</li>
<li>Xiaomi (1810 HK) plans to issue panda bonds.</li>
<li>New Oriental (EDU)’s founder and Chairman, Michael Yu (俞敏洪) decides to retire.</li>
</ul>


The Apple (APPL) retail store in the city center of Shanghai was crowded last weekend.
China will lift the lockdown over Wuhan on April 8.
Alibaba (BABA)’s group buying port, ju.taobao.com (聚划算) blocked all accounts of Pinduoduo (PDD)’s employees.
Xiaomi (1810 HK) plans to issue panda bonds.
New Oriental (EDU)’s founder and Chairman, Michael Yu (俞敏洪) decides to retire.


China Internet Weekly (30Mar2020): Photos of Crowded Apple Retail Store, Dispute of BABA Vs. PDD

China

PDD Holdings Inc. is a multinational commerce group that owns and operates a portfolio of businesses. The Company focuses on digital economy so that local communities and small businesses can benefit from the increased productivity and new opportunities. PDD Holdings has built a network of sourcing, logistics, and fulfillment capabilities for its underlying businesses.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

PDD Holdings (PDD US)

NYSE GSX: Channel Checks Suggest High Volume of Fake Enrollments Inflated Financials

This note is to share the details of an extremely enlightening call that we recently had with a professional brushing outfit in Guangdong, China. ...

JL Warren Capital

U.S. Equity Strategy: Several Indicators Suggest a Pullback Likely

Despite the bulls still being in control, we have several ongoing concerns and we cannot rule out the potential for a pullback. Below we highlight...

Vermilion Research

Major Indexes Testing Resistance

Positive news flow surrounding COVID-19 is encouraging on many fronts. Still, despite encouraging news and the relief rally in global equities,...

Vermilion Research

China Internet Weekly (6Apr2020): JD Founder Resigned, LK Cooked Book, BIDU & PDD's Odd Financing

JD.com (JD)’s founder resigned. Luckin Coffee (LK) cooked its books. Tencent (700 HK) WeChat Pay’s new function: consumer loan. Tencent (700 HK)...

Ming Lu

China Internet Weekly (30Mar2020): Photos of Crowded Apple Retail Store, Dispute of BABA Vs. PDD

The Apple (APPL) retail store in the city center of Shanghai was crowded last weekend. China will lift the lockdown over Wuhan on April 8. Alibaba...

Ming Lu

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)