HK/China Equity Long-Short

Osbert Tang, CFA

Thematic (Sector/Industry)

<ul>
<li>Our positive calls on <a href="https://www.smartkarma.com/entities/fu-shou-yuan-international" target="_blank" data-smartkarma-citation="entities:18168:1" rel="noopener">Fu Shou Yuan (1448 HK)</a> and <a href="https://www.smartkarma.com/entities/air-china-ltd-h" target="_blank" data-smartkarma-citation="entities:8239:1" rel="noopener">Air China Ltd (753 HK)</a> and negative call on <a href="https://www.smartkarma.com/entities/china-conch-environment-protection-holdings-ltd" target="_blank" data-smartkarma-citation="entities:4827:1" rel="noopener">Conch Environment (587 HK)</a> have generated the best wins in 2022.</li>
<li>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.</li>
<li>In 2023, we expect Fu Shou Yuan <a href="https://www.smartkarma.com/entities/fu-shou-yuan-international" target="_blank" data-smartkarma-citation="entities:18168:1" rel="noopener"></a>continue to do well and Conch Environment to remain under pressure. It may be prudent to take some profit on Air China. <a href="https://www.smartkarma.com/entities/air-china-ltd-h" target="_blank" data-smartkarma-citation="entities:8239:1" rel="noopener"></a> </li>
</ul>


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.  


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

CEO, A. Stotz Investment Research

Dr. Andrew Stotz, CFA

Quantamental Investing to beat Benchmarks

A. Stotz Investment Research

We pick stocks. We construct portfolios. All our effort is focused on how to better pick stocks and construct portfolios. We serve fund management companies, family offices, and high net worth individuals.

<ul>
<li>We highlight 14 stocks in Asia that look interesting to us based on our FVMR methodology</li>
<li>Six stock remains, and eight stocks added to our portfolio</li>
<li>Since its inception, it has generated a before-fee total return of 93% versus the MSCI Asia ex Japan of 55%</li>
</ul>


We highlight 14 stocks in Asia that look interesting to us based on our FVMR methodology
Six stock remains, and eight stocks added to our portfolio
Since its inception, it has generated a before-fee total return of 93% versus the MSCI Asia ex Japan of 55%


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

<ul>
<li>The theme we have seen over the past four weeks is an increasing number of indexes reversing 4-10-month downtrends and/or breaking above important resistance levels, with no failed breakouts.</li>
<li>We continue to believe that global equities are going through a bottoming process, but the real test will come during the eventual pullback, which we believe we are now experiencing.</li>
<li>We are watching to see whether these breakout levels and important moving averages (e.g., 50-day MAs) will hold.</li>
</ul>


The theme we have seen over the past four weeks is an increasing number of indexes reversing 4-10-month downtrends and/or breaking above important resistance levels, with no failed breakouts.
We continue to believe that global equities are going through a bottoming process, but the real test will come during the eventual pullback, which we believe we are now experiencing.
We are watching to see whether these breakout levels and important moving averages (e.g., 50-day MAs) will hold.


Japan Among the Latest to Break Out; Buy Ideas in Growth/Cyclicals and Consumer Staples

<ul>
<li>We highlight 14 stocks in Asia that look interesting to us based on our FVMR methodology</li>
<li>Portfolio changes: Four stock remains, and 10 new join the fray</li>
<li>Since its inception, the portfolio has gained 80% versus MSCI Asia ex Japan's 63%</li>
</ul>


We highlight 14 stocks in Asia that look interesting to us based on our FVMR methodology
Portfolio changes: Four stock remains, and 10 new join the fray
Since its inception, the portfolio has gained 80% versus MSCI Asia ex Japan's 63%


<ul>
<li>The bear market rally that we were on watch for started last week, confirmed by the bullish reversals on the DAX, Hang Seng, MSCI China (MCHI-US), and China Internet (KWEB-US).</li>
<li>Is this just another bear market rally, or will indexes are able to make a higher low and start a new bull market? Either way, it's a start.</li>
<li>We highlight attractive stocks from a bottoms-up perspective, spanning several Sectors. Over half hail from Japan, where the TOPIX Small index is reversing its downtrend.</li>
</ul>


The bear market rally that we were on watch for started last week, confirmed by the bullish reversals on the DAX, Hang Seng, MSCI China (MCHI-US), and China Internet (KWEB-US).
Is this just another bear market rally, or will indexes are able to make a higher low and start a new bull market? Either way, it's a start.
We highlight attractive stocks from a bottoms-up perspective, spanning several Sectors. Over half hail from Japan, where the TOPIX Small index is reversing its downtrend.


Cautiously Optimistic Following Downtrend Reversals; Japan Continues to Lead; Bottoms-Up Stock Rec's

Hong Kong

Cathay Pacific is a premium travel lifestyle brand offering scheduled passenger and cargo air transportation, along with low-cost travel and various lifestyle products and services. The airline connects Hong Kong, mainland China, and the world through its hub at Hong Kong International Airport. It was founded in Hong Kong in 1946.

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Cathay Pacific (293 HK)

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

In 2023, we expect share prices of Fu Shou Yuan to continue to do well and Conch Environment to remain under pressure. For Air China, given rich...

Osbert Tang, CFA

The Stocks to Own in Asia – Vol. 38

We highlight 14 stocks in Asia that look interesting to us based on our FVMR methodology. Portfolio changes: Six stock remains, and eight new join...

A. Stotz Investment Research

Japan Among the Latest to Break Out; Buy Ideas in Growth/Cyclicals and Consumer Staples

Japan is the latest major country to break out, and we are buyers. Japan continues to be considerably further along in the bottoming process...

Vermilion Research

The Stocks to Own in Asia – Vol. 37

We highlight 14 stocks in Asia that look interesting to us based on our FVMR methodology. Portfolio changes: Four stocks remain, and 10 stocks have...

A. Stotz Investment Research

Cautiously Optimistic Following Downtrend Reversals; Japan Continues to Lead; Bottoms-Up Stock Rec's

The bear market rally that we were on watch for started last week, confirmed by the bullish reversals on the DAX, Hang Seng, MSCI China $MCHI, and...

Vermilion Research

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