Research from EqualOcean, EqualOcean

EqualOcean

Research from EqualOcean

EqualOcean is an investment research firm and information service provider focusing on China's Technology, Automotive and Consumer Internet sectors. With unique research and due diligence methodology, we provide tailored insights into a wide range of industries and companies, empowering our clients' value-added decisions.

Founded in 2014, EqualOcean is headquartered in Beijing and has offices in Shanghai, Shenzhen and New York.

Thematic (Sector/Industry)

<ul><li>Behind the empty cities - China has accumulated enough empty housing, over 65 million units, for almost the entire population of France.</li><li>What's next? - Real estate is no longer the main growth driver in China.</li><li>A proper foundation: starting with 'ghost cities' - Ordos City, once the largest ghost city in China, relied mainly on its coal and manufacture industry.</li></ul>

Behind the empty cities - China has accumulated enough empty housing, over 65 million units, for almost the entire population of France.What's next? - Real estate is no longer the main growth driver in China.A proper foundation: starting with 'ghost cities' - Ordos City, once the largest ghost city in China, relied mainly on its coal and manufacture industry.

Asset Allocation & Fund Positioning, Copley Fund Research

Steven Holden

Asset Allocation & Fund Positioning

Copley Fund Research

Copley Fund Research provide research and data on asset allocation among Global and Emerging Market equity funds.  The analysis details absolute and relative positioning across countries, sectors and industries together with highly granular data on single stock and single fund allocations.  The data is updated monthly with time series going back to January 2011.

Global Research - Analysis of 165 prominent Global equity funds, combined AUM $335bn
GEM Research - Analysis of 127 prominent global EM equity funds, combined AUM $250bn

Asset Allocation - Global and GEM Equity

<p>Real Estate exposure is close to its lowest levels on record among active Asia Ex-Japan investors.  Average weights have fallen to 3.07% following an aggressive decline that took hold in April 2020 when average holding weights were above 5%.</p><p>Real Estate is now the 3rd least widely held sector among active Asia Ex-Japan investors, slipping behind Health Care and Materials earlier this year for the first time in a decade.</p><p>Underweights are widespread, led by the lightly held <a href="https://www.smartkarma.com/entities/ck-asset-holdings-ltd" target="_blank" data-smartkarma-citation="entities:22650:1" rel="noopener">CK Asset Holdings (1113 HK)</a>, <a href="https://www.smartkarma.com/entities/wharf-real-estate-investment" target="_blank" data-smartkarma-citation="entities:26031:1" rel="noopener">Wharf Real Estate Investment (1997 HK)</a> and <a href="https://www.smartkarma.com/entities/country-garden-holdings-co" target="_blank" data-smartkarma-citation="entities:5225:1" rel="noopener">Country Garden Holdings Co (2007 HK).</a>  <a href="https://www.smartkarma.com/entities/capitaland-investment-ltd-si" target="_blank" data-smartkarma-citation="entities:33774:1" rel="noopener">Capitaland Investment (CLI SP)</a>, a 0.1% weight in the MSCI AAXJ index is held by none of the active strategies in our analysis.</p><p>Activity over the last 6-months shows a clear rotation out of China &amp; HK and Singapore Real Estate and in to India.  Indian Real Estate ownership metrics all moved higher, with average weights increasing by 0.17%, funds invested by +4.3%, more funds buying than selling and positive fund flows.</p><p><em>Analysis taken from our Asia Ex-Japan research, covering 96 active strategies with combined AUM of </em><em>$85bn</em></p>

Real Estate exposure is close to its lowest levels on record among active Asia Ex-Japan investors.  Average weights have fallen to 3.07% following an aggressive decline that took hold in April 2020 when average holding weights were above 5%.Real Estate is now the 3rd least widely held sector among active Asia Ex-Japan investors, slipping behind Health Care and Materials earlier this year for the first time in a decade.Underweights are widespread, led by the lightly held CK Asset Holdings (1113 HK), Wharf Real Estate Investment (1997 HK) and Country Garden Holdings Co (2007 HK).  Capitaland Investment (CLI SP), a 0.1% weight in the MSCI AAXJ index is held by none of the active strategies in our analysis.Activity over the last 6-months shows a clear rotation out of China &amp; HK and Singapore Real Estate and in to India.  Indian Real Estate ownership metrics all moved higher, with average weights increasing by 0.17%, funds invested by +4.3%, more funds buying than selling and positive fund flows.Analysis taken from our Asia Ex-Japan research, covering 96 active strategies with combined AUM of $85bn

Asia Ex-Japan Real Estate:  Hitting the Lows.  China to India Rotation

Equity Research in HK and Mainland China

Li Tang

<p>The NPCSC pushed forward with the property tax by granting the State Council authority to pilot it in certain regions for five years with the purpose to guide reasonable property consumption.</p>
<p>China has discussed the property tax plan and even launched pilot programs in Shanghai and Southwest China's Chongqing as early as 2011. The widening of the property pilot progamme would shake the real estates market,property-related industries, such as the steel and cement sectors. However,the tax may be neutral over the long-term for developers due to the expectation that the existing administrative controlling measures would be gradually removed after the implementation of the tax. Moreover, tax burdens would be moved from the construction stage to home transaction and holding phases, i.e. from developers to homeowners/ speculators.</p>

The NPCSC pushed forward with the property tax by granting the State Council authority to pilot it in certain regions for five years with the purpose to guide reasonable property consumption.
China has discussed the property tax plan and even launched pilot programs in Shanghai and Southwest China's Chongqing as early as 2011. The widening of the property pilot progamme would shake the real estates market,property-related industries, such as the steel and cement sectors. However,the tax may be neutral over the long-term for developers due to the expectation that the existing administrative controlling measures would be gradually removed after the implementation of the tax. Moreover, tax burdens would be moved from the construction stage to home transaction and holding phases, i.e. from developers to homeowners/ speculators.

State Council to Pilot Property Tax in Certain Regions for Five Years

<p>The China Real Estate Association (CREA) reportedly summoned 10 key developers to a discussion meeting last Friday, including <a href="https://www.smartkarma.com/entities/china-vanke-co-ltd" target="_blank" data-smartkarma-citation="entities:26076:1" rel="noopener">China Vanke (000002 CH)</a> , <a href="https://www.smartkarma.com/entities/sunac-china-holdings-ltd" target="_blank" data-smartkarma-citation="entities:240:1" rel="noopener">Sunac China Holdings (1918 HK)</a> , <a href="https://www.smartkarma.com/entities/china-overseas-land-investment-limited" target="_blank" data-smartkarma-citation="entities:419:1" rel="noopener">China Overseas Land &amp; Investment (688 HK)</a> , <a href="https://www.smartkarma.com/entities/gemdale-corp-a" target="_blank" data-smartkarma-citation="entities:14908:1" rel="noopener">Gemdale Corp A (600383 CH)</a> , <a href="https://www.smartkarma.com/entities/longfor-properties" target="_blank" data-smartkarma-citation="entities:8149:1" rel="noopener">Longfor Properties (960 HK)</a><a href="https://www.smartkarma.com/entities/zhongliang-holdings-group-co" target="_blank" data-smartkarma-citation="entities:28009:1" rel="noopener">Zhongliang Holdings (2772 HK)</a> , <a href="https://www.smartkarma.com/entities/seazen-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:24242:1" rel="noopener">Seazen Holdings Co., Ltd. (601155 CH)</a> , <a href="https://www.smartkarma.com/entities/greentown-china-holdings" target="_blank" data-smartkarma-citation="entities:8954:1" rel="noopener">Greentown China (3900 HK)</a> , and <a href="https://www.smartkarma.com/entities/cifi-holdings-group-co-ltd" target="_blank" data-smartkarma-citation="entities:18387:1" rel="noopener">CIFI Holdings (884 HK)</a> , who were required to send senior executives at vice president or above levels.</p>

The China Real Estate Association (CREA) reportedly summoned 10 key developers to a discussion meeting last Friday, including China Vanke (000002 CH) , Sunac China Holdings (1918 HK) , China Overseas Land &amp; Investment (688 HK) , Gemdale Corp A (600383 CH) , Longfor Properties (960 HK)Zhongliang Holdings (2772 HK) , Seazen Holdings Co., Ltd. (601155 CH) , Greentown China (3900 HK) , and CIFI Holdings (884 HK) , who were required to send senior executives at vice president or above levels.

China Real Estate Association Summoned Key Developers as PBOC Hints Policy Finetuning

Chief Economist

Diana Choyleva

Enodo Economics

Enodo Economics is an independent macroeconomic forecasting company that untangles complexity, challenges the consensus, and makes sense of the future. Our focus is on China – one of the most misunderstood economies in the world, but one of the most important to figure out.  Enodo’s chief economist, Diana Choyleva, has been analysing China for almost 20 years, while Enodo’s team boasts a combined 140 years’ experience covering China’s economy, politics and markets. 

Macroeconomics

<h2>China News That Matters</h2><div><ul style="list-style-type: disc;">
<li>Kunming hosts COP15 to save biodiversity</li>
<li>All hands-on deck to restore power</li>
<li>Debts, downgrades, and depressing sales</li>
<li>Beijing: shock troops protect peace and stability</li>
<li>No, <em>we’ve</em> got the best AI!</li>
</ul></div><div><div><div class="content-remarks"><ul style="list-style-type: none;"><li><div>In my weekly digest China News That Matters, I will give you selected summaries, sourced from a variety of local Chinese-language and international news outlets, and highlight why I think the news is significant. These posts are meant to neither be bullish nor bearish, but help you separate the signal from the noise.</div></li></ul></div></div></div>

China News That Matters
Kunming hosts COP15 to save biodiversity
All hands-on deck to restore power
Debts, downgrades, and depressing sales
Beijing: shock troops protect peace and stability
No, we’ve got the best AI!
In my weekly digest China News That Matters, I will give you selected summaries, sourced from a variety of local Chinese-language and international news outlets, and highlight why I think the news is significant. These posts are meant to neither be bullish nor bearish, but help you separate the signal from the noise.

China

China Evergrande Group was a major Chinese property developer, known for large-scale residential projects and diversified operations in property management, new energy vehicles, cultural tourism, and health industries. The company was founded in 1996 and was headquartered in Shenzhen, China.

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China Evergrande (3333 HK)

An Industry Built on Debt

Real estate has long been the stimulus behind China's rapid economic development. House-buying became an investment as prices soared, thus...

EqualOcean

Asia Ex-Japan Real Estate: Hitting the Lows. China to India Rotation

Real Estate exposure is close to its lowest levels on record among active Asia Ex-Japan investors. As China Real Estate suffers an exodus, India...

Steven Holden

State Council to Pilot Property Tax in Certain Regions for Five Years

The widen of property tax pilot progamme would shake the real estates market,property-related industries, such as the steel and cement sectors.

Li Tang

China Real Estate Association Summoned Key Developers as PBOC Hints Policy Finetuning

We see a short-term opportunity to buy high-quality, low leveraged developers in advance of further calibrated policy support.

Li Tang

COP15/ Power/ Property/ Taiwan/ US-China

In my weekly digest, I will give you selected summaries, sourced from a variety of local Chinese-language and international news outlets, and...

Diana Choyleva

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