Quality-first, Business-perspective Strategy, Urbem (HK) Limited

Steven Chen

Quality-first, Business-perspective Strategy

Equity Bottom-Up

<ul>
<li>Despite the elevated valuation, family-controlled Hermes demonstrates its superior quality from a business-owner perspective, and hence, is worth following among patient investors;</li>
<li>At the same time, we find that the French heritage name has been increasingly APAC-driven in recent years and can very likely continue to benefit from rising emerging Asia in the foreseeable future.</li>
</ul>


Despite the elevated valuation, family-controlled Hermes demonstrates its superior quality from a business-owner perspective, and hence, is worth following among patient investors;
At the same time, we find that the French heritage name has been increasingly APAC-driven in recent years and can very likely continue to benefit from rising emerging Asia in the foreseeable future.


Hermes: An Increasingly APAC-Driven Story

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

We continue to be encouraged by market dynamics that are supportive of an ongoing equity bull market. Additionally, there continues to be an absence of breakdowns on the major global indexes (MSCI ACWI, ACWI ex-US, EM, &amp; EAFE). As a result, our outlook remains bullish.  In this report we show some love to various Sectors that have not been big attention-grabbers for us in recent months, but still have plenty of attractive stocks. The stocks highlighted hail from a variety of countries. Sectors covered include Services, Communications, Staples, Financials, and Utilities.

We continue to be encouraged by market dynamics that are supportive of an ongoing equity bull market. Additionally, there continues to be an absence of breakdowns on the major global indexes (MSCI ACWI, ACWI ex-US, EM, &amp; EAFE). As a result, our outlook remains bullish.  In this report we show some love to various Sectors that have not been big attention-grabbers for us in recent months, but still have plenty of attractive stocks. The stocks highlighted hail from a variety of countries. Sectors covered include Services, Communications, Staples, Financials, and Utilities.

Global Equity Strategy: Market Dynamics Remain Positive, And So Are We

MSCI Emerging Markets Index / Technical Analysis

Global equities continue to trend higher following breakouts that have occurred during the past two weeks. Over this timeframe we have been recommending adding exposure to cyclical Sectors and, despite them getting near-term extended, we believe these upside moves are likely just getting going. Additionally, the US dollar is breaking below support and EM equities are breaking above resistance, only adding to our bullish outlook on global equities. We highlight actionable set-ups within the Consumer Discretionary, Global Real Estate and Utilities Sectors.

Global equities continue to trend higher following breakouts that have occurred during the past two weeks. Over this timeframe we have been recommending adding exposure to cyclical Sectors and, despite them getting near-term extended, we believe these upside moves are likely just getting going. Additionally, the US dollar is breaking below support and EM equities are breaking above resistance, only adding to our bullish outlook on global equities. We highlight actionable set-ups within the Consumer Discretionary, Global Real Estate and Utilities Sectors.

Global Equity Strategy: Still Bullish, But Extended Near-Term

Equity Analyst, LightStream Research

Oshadhi Kumarasiri

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Event-Driven

LVMH Moet Hennessy Louis Vuitton SE / Event-Driven

<ul>
<li>Smartkarma recently added a new company/holdco to its list of holdcos under the incredibly useful Holdco Monitor tool.</li>
<li>The latest addition to the tool is <a href="https://www.smartkarma.com/entities/christian-dior-se" target="_blank" data-smartkarma-citation="entities:21415:1" rel="noopener">Christian Dior Se (CDI FP)</a> and its listed subsidiary <a href="https://www.smartkarma.com/entities/lvmh-moet-hennessy-louis-vui" target="_blank" data-smartkarma-citation="entities:21072:1" rel="noopener">Lvmh Moet Hennessy Louis Vuitton (MC FP)</a>, the world leader in luxury goods. Both these companies are controlled by the French billionaire Bernard Arnault.</li>
<li>Below, we analyse the current holdco discount/premium to assess if there’s an opportunity for a market-neutral pair trade once the current ban on short selling is lifted.</li>
</ul>


Smartkarma recently added a new company/holdco to its list of holdcos under the incredibly useful Holdco Monitor tool.
The latest addition to the tool is Christian Dior Se (CDI FP) and its listed subsidiary Lvmh Moet Hennessy Louis Vuitton (MC FP), the world leader in luxury goods. Both these companies are controlled by the French billionaire Bernard Arnault.
Below, we analyse the current holdco discount/premium to assess if there’s an opportunity for a market-neutral pair trade once the current ban on short selling is lifted.


Christian Dior/LVMH: Discount Is Attractive but Liquidity & Pre 2017 Discount Make It a Risky Trade

Director | Exposing Creative Accounting, Bucephalus Research Partnership

Robert Medd

Director | Exposing Creative Accounting

Exposing Creative Accounting

Bucephalus Research Partnership

Bucephalus Research Partnership Limited. Exposing Creative Accounting.

At the Bucephalus Research Partnership (BRP) we analyse financial statements using our accountant's practical experience and our own quantitative algorithms for corporate governance, accounting risk and peer performance.

Our thematic research refines our unique algorithms while our single stock research focuses on examples where we discover a significant gap between published accounts and business reality.

​Bucephalus Research Partnership:
- Is an independent fee-based research service
- Does not take proprietary positions, long or short
- Does not solicit business or fees from the corporates we review

Forensic Accounting

Prada is talking about re-building the brand. They have stopped discounting and they are re-organising. However, it appears to us that management may have a different agenda and minorities could be in for a rough ride. We believe that profits are suffering due to a lack of productivity, not discounting and the balance sheet has been hollowed out by excessive dividends, related party deals and vanity projects. Don’t be fooled by the creative accounting, this brand is expensive and offers little value.

Prada is talking about re-building the brand. They have stopped discounting and they are re-organising. However, it appears to us that management may have a different agenda and minorities could be in for a rough ride. We believe that profits are suffering due to a lack of productivity, not discounting and the balance sheet has been hollowed out by excessive dividends, related party deals and vanity projects. Don’t be fooled by the creative accounting, this brand is expensive and offers little value.

SELL Prada: There Is Little Value in This Brand. Fair Value HK$7.90

France

Christian Dior SE manufactures luxury products such as upscale clothing, champagne and wines, cognac and spirits, luggage and leather goods, perfumes and cosmetics, and jewelry and watches.  The Company markets its products internationally.

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Christian Dior SE (CDI FP)

Hermes: An Increasingly APAC-Driven Story

The French heritage story has been increasingly APAC-driven in recent years and can very likely continue to benefit from rising emerging Asia in...

Steven Chen

Global Equity Strategy: Market Dynamics Remain Positive, And So Are We

We show some love to various Sectors that have not been big attention-grabbers for us in recent months, including Services, Communications,...

Vermilion Research

Global Equity Strategy: Still Bullish, But Extended Near-Term

Global equities continue to trend higher following breakouts that have occurred during the past two weeks. Over this timeframe we have been...

Vermilion Research

Christian Dior/LVMH: Discount Is Attractive but Liquidity & Pre 2017 Discount Make It a Risky Trade

Smartkarma recently added a new company/holdco to its list of holdcos under the incredibly useful Holdco Monitor tool. The latest addition to the...

Oshadhi Kumarasiri

SELL Prada: There Is Little Value in This Brand. Fair Value HK$7.90

Prada is talking about re-building the brand. They have stopped discounting and they are re-organising. However, it appears to us that management...

Bucephalus Research Partnership

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