Founder of Antler Capital

Stanley Tsai, CFA

Equity Bottom-Up

People's Insurance (PICC) / Equity Bottom-Up

<ul>
<li>To build on our earlier work on the insurance space -- and as we search for beta-neutral relative value plays -- we look at PICC Group-H's SOTP valuation.</li>
<li>The group's life and health business has historically traded at a steep implicit discount to China Life-H, perhaps deservedly so. But price dislocations do occur from time to time.</li>
<li>We share our cheat sheet on how we approach these opportunities, which are often good for a quick 10% trade. As usual, we highlight the potential risks as well.</li>
</ul>


To build on our earlier work on the insurance space -- and as we search for beta-neutral relative value plays -- we look at PICC Group-H's SOTP valuation.
The group's life and health business has historically traded at a steep implicit discount to China Life-H, perhaps deservedly so. But price dislocations do occur from time to time.
We share our cheat sheet on how we approach these opportunities, which are often good for a quick 10% trade. As usual, we highlight the potential risks as well.


PICC Group / PICC P&C Pair: A Cheat Sheet to Improve Your Batting Average

Articles from Caixin Global, Caixin Global

Caixin Global

Articles from Caixin Global

Caixin is a media group dedicated to providing financial and business news through periodicals, online content, mobile apps, conferences, books and TV/video programs. Caixin aims to blaze a trail that helps traditional media prosper in the new media age through integrated multimedia platforms.

News from Caixin

Cross Asset Strategy

<ul><li>In Depth: Why medical students in China are faking their way to a doctor’s license</li><li>China to send $6 million in emergency aid to quake-hit Turkey</li><li>Beijing tells Taipei that mainland is ready to resume cross-strait flights</li></ul>

In Depth: Why medical students in China are faking their way to a doctor’s licenseChina to send $6 million in emergency aid to quake-hit TurkeyBeijing tells Taipei that mainland is ready to resume cross-strait flights

CX Daily: Why Medical Students in China Are Faking Their Way to a Doctor’s License

Thematic (Sector/Industry)

<ul>
<li>The Jan. PMI readings corroborate what investors had already known over the break. But it is noteworthy that SMEs appear much less upbeat than large corporations.  </li>
<li>SMEs account for 60% of GDP and an even higher proportion of job creation. Policy support has been keeping many of them afloat throughout the pandemic. </li>
<li>As the deadline on the PBOC's SME support program is fast approaching, small regional banks may bear the brunt of the impact on the financial system.</li>
</ul>


The Jan. PMI readings corroborate what investors had already known over the break. But it is noteworthy that SMEs appear much less upbeat than large corporations.  
SMEs account for 60% of GDP and an even higher proportion of job creation. Policy support has been keeping many of them afloat throughout the pandemic. 
As the deadline on the PBOC's SME support program is fast approaching, small regional banks may bear the brunt of the impact on the financial system.


China's Micro Loan Market: Key Takeaways from the Jan PMI

<ul>
<li>We expect to see a strong start to the week for China financials names, with sentiments buoyed by upbeat consumer spending data over the new year holiday.</li>
<li>Early signs point to relatively loose conditions in the interbank market as trading resumes across the board on Monday. The central bank's easing bias will likely continue.</li>
<li>We see more momentum for the sector ahead of Q4 earnings (brokers &gt; insurers &gt; banks). Stock selection will become more important thereafter.</li>
</ul>


We expect to see a strong start to the week for China financials names, with sentiments buoyed by upbeat consumer spending data over the new year holiday.
Early signs point to relatively loose conditions in the interbank market as trading resumes across the board on Monday. The central bank's easing bias will likely continue.
We see more momentum for the sector ahead of Q4 earnings (brokers &gt; insurers &gt; banks). Stock selection will become more important thereafter.


China Financials Weekly: Jan 30 | A Bubbly Opening

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/keppel-corp-ltd" target="_blank" data-smartkarma-citation="entities:12:1" rel="noopener">Keppel Corp (KEP SP)</a> shareholders vote next week. <a href="https://www.smartkarma.com/entities/sembcorp-marine-ltd" target="_blank" data-smartkarma-citation="entities:11:1" rel="noopener">Sembcorp Marine (SMM SP)</a> shareholders are awaiting their Circular. Expect both sets of shareholders will approve. The optics and performance look good.</li>
<li>
<a href="https://www.smartkarma.com/entities/carbon-revolution-ltd" target="_blank" data-smartkarma-citation="entities:29071:1" rel="noopener">Carbon Revolution Ltd (CBR AU)</a>  SPAC Offer is a high-cost red-herring. Management who support this takeover should be fired.</li>
<li>Nintendo Founder Family Office "YFO" bought 25+% of <a href="https://www.smartkarma.com/entities/toyo-construction-co-ltd" target="_blank" data-smartkarma-citation="entities:1176:1" rel="noopener">Toyo Construction (1890 JP)</a>, then offered to buy it out. Negotiations are ongoing. We still don't really know what is going on. </li>
</ul>



Keppel Corp (KEP SP) shareholders vote next week. Sembcorp Marine (SMM SP) shareholders are awaiting their Circular. Expect both sets of shareholders will approve. The optics and performance look good.

Carbon Revolution Ltd (CBR AU)  SPAC Offer is a high-cost red-herring. Management who support this takeover should be fired.
Nintendo Founder Family Office "YFO" bought 25+% of Toyo Construction (1890 JP), then offered to buy it out. Negotiations are ongoing. We still don't really know what is going on. 


Last Week in Event SPACE: Keppel/Sembcorp, Carbon Revolution, Toyo Construction, Fuji Oil, Toshiba

China

China Huarong Asset Management Co Ltd. provides a variety of financial services. The Company offers asset management, banking, securities services, financial leasing, trust services, and investment services. China Huarong Asset Management maintains branch locations throughout China.

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China Huarong Asset Management (2799 HK)

PICC Group / PICC P&C Pair: A Cheat Sheet to Improve Your Batting Average

PICC Group / PICC P&C are an interesting pair that often provides investors with short windows for relative value trades. From the group's SOTP...

Stanley Tsai, CFA

CX Daily: Why Medical Students in China Are Faking Their Way to a Doctor’s License

In Depth: Why medical students in China are faking their way to a doctor’s license. China to send $6 million in emergency aid to quake-hit Turkey

Caixin Global

China's Micro Loan Market: Key Takeaways from the Jan PMI

For the most part, the Jan PMI gauges were in line with investor expectations, although the more pessimistic SME sector may be a cause for concern...

Stanley Tsai, CFA

China Financials Weekly: Jan 30 | A Bubbly Opening

We expect a strong start to the week for the China financials space, after a new year holiday that confirms investors' hopes for a speedy recovery...

Stanley Tsai, CFA

Last Week in Event SPACE: Keppel/Sembcorp, Carbon Revolution, Toyo Construction, Fuji Oil, Toshiba

The weekend is here! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed...

David Blennerhassett

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