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

iShares MSCI China ETF / Technical Analysis

<ul>
<li>We remain neutral on global equities (MSCI ACWI), we believe upside remains limited with the MSCI ACWI (ACWI-US), S&amp;P 500, and several European indexes still below major resistance.</li>
<li>We continue to expect rangebound price action in the months ahead on the MSCI ACWI.</li>
<li>And, rangebound price action could very well be the theme for all of 2023 (with resistance at $93 and support at $75-77 on ACWI-US)</li>
</ul>


We remain neutral on global equities (MSCI ACWI), we believe upside remains limited with the MSCI ACWI (ACWI-US), S&amp;P 500, and several European indexes still below major resistance.
We continue to expect rangebound price action in the months ahead on the MSCI ACWI.
And, rangebound price action could very well be the theme for all of 2023 (with resistance at $93 and support at $75-77 on ACWI-US)


Hang Seng and MSCI China Bottoming -- Add; Europe Still Leading; Shift From U.S. To Non-U.S.

External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Incorporated in Hong Kong, supported by the mainland and targeting in global market, CMB International Capital Corporation Limited (“CMBI”) is an integrated financial institution providing comprehensive and professional services. As a wholly-owned subsidiary of China Merchants Bank ("CMB"), by leveraging on the Group’s synergy and coordination in domestic and overseas markets, as well as CMB’s strong resources and outstanding social reputation, CMBI and its subsidiaries have been actively implementing diversified business strategies and set up an overall layout of main business segments including Corporate Finance, Asset Management, Wealth Management, Global Markets and Structured Finance, etc. Adhering to the philosophy of “being clients oriented and increasing our own values by the way of creating value for clients”, CMBI endeavors to provide quality and integrated financial services to institutional, corporate and individual customers both domestic and overseas including Hong Kong IPO sponsorship and underwriting, share placement and rights issue for listed companies, financial advisors, bonds issuance services, asset management, direct investment, wealth management, equity sales and trading, etc.

Thematic (Sector/Industry)

<ul><li>China IaaS + PaaS market grew 30.7% YoY in 1H22, according to IDC data.</li><li>However, this may have slowed to 10-20% YoY in 3Q22, reflected by China Telecom/ China Mobile sluggish cloud revenue growth. </li><li>China cloud spending in 2023E could remain conservative with structural changes</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

China IaaS + PaaS market grew 30.7% YoY in 1H22, according to IDC data.However, this may have slowed to 10-20% YoY in 3Q22, reflected by China Telecom/ China Mobile sluggish cloud revenue growth. China cloud spending in 2023E could remain conservative with structural changesContent is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

China Software & IT Services – China IaaS + PaaS growth slowed further in 3Q22

Equity Bottom-Up

Glodon Company Limited A / Equity Bottom-Up

<ul><li>Glodon delivered weaker than expected FY3Q22 results with revenue of RMB1.69bn (+19% YoY) and net profit of RMB241mn (+27% YoY). GPM was down 5.7 ppts to 80% due to higher labor cost related to the implementation of construction management projects. </li><li>Construction costing SaaS demand remained solid with revenue growth of +25% YoY to RMB837mn. </li><li>Newly signed contract (+31% YoY)/ Contracted liabilities (+30% YoY) suggested a strong outlook ahead.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Glodon delivered weaker than expected FY3Q22 results with revenue of RMB1.69bn (+19% YoY) and net profit of RMB241mn (+27% YoY). GPM was down 5.7 ppts to 80% due to higher labor cost related to the implementation of construction management projects. Construction costing SaaS demand remained solid with revenue growth of +25% YoY to RMB837mn. Newly signed contract (+31% YoY)/ Contracted liabilities (+30% YoY) suggested a strong outlook ahead.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Glodon (002410 CH) – Solid 3Q22 Despite Short-Term GPM Decline

<ul><li>Growing macro concerns related to stagflation, US rate hike, geopolitical tensions and RMB depreciation continue to weigh on growth stocks, especially to software tech. </li><li>We use five criteria including 1) valuation, 2) profitability, 3) cash level, 4) short ratio and 5) RMB/USD depreciation to determine companies that are less vulnerable to market fluctuations. We find Hikvision (BUY), Glodon (BUY) and AsiaInfo (NR) in the best positions under these five criteria.</li><li><div><div><div>Heightened macro uncertainties unfavorable to software tech stocks. </div></div></div></li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Growing macro concerns related to stagflation, US rate hike, geopolitical tensions and RMB depreciation continue to weigh on growth stocks, especially to software tech. We use five criteria including 1) valuation, 2) profitability, 3) cash level, 4) short ratio and 5) RMB/USD depreciation to determine companies that are less vulnerable to market fluctuations. We find Hikvision (BUY), Glodon (BUY) and AsiaInfo (NR) in the best positions under these five criteria.Heightened macro uncertainties unfavorable to software tech stocks. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

China Software & IT Services - Which Stocks Are Less Vulnerable to Market Volatility?

<div><div><div><ul><li>Glodon delivered better than expected FY2Q22 results with revenue of RMB1.64bn (+23% YoY) and net profit of RMB288mn (+38% YoY). </li><li>Construction costing SaaS revenue grew at +28% YoY to RMB794mn. </li><li>Newly signed contract (+18% YoY)/ contracted liabilities (+28% YoY) suggested a solid SaaS outlook ahead. </li></ul></div></div></div>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Glodon delivered better than expected FY2Q22 results with revenue of RMB1.64bn (+23% YoY) and net profit of RMB288mn (+38% YoY). Construction costing SaaS revenue grew at +28% YoY to RMB794mn. Newly signed contract (+18% YoY)/ contracted liabilities (+28% YoY) suggested a solid SaaS outlook ahead. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Glodon (002410 CH) – Penetrating into Basic Infrastructure Segment

China

Glodon Company Limited develops application softwares for basic construction industry. The Company's products include construction engineering cost management software and project cost management software. The Company also provides related training and consulting services.

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Glodon Company Limited A (002410 CH)

Hang Seng and MSCI China Bottoming -- Add; Europe Still Leading; Shift From U.S. To Non-U.S.

We remain neutral on global equities $ACWI and expect rangebound price action in the months (possibly year) ahead. Specific $ACWI trading range we...

Vermilion Research

China Software & IT Services – China IaaS + PaaS growth slowed further in 3Q22

China IaaS + PaaS market grew 30.7% YoY in 1H22, according to IDC data. However, this may have slowed to 10-20% YoY in 3Q22, reflected by China...

CMB International

Glodon (002410 CH) – Solid 3Q22 Despite Short-Term GPM Decline

Construction costing SaaS demand remained solid with revenue growth of +25% YoY to RMB837mn. Newly signed contract (+31% YoY)/ Contracted...

CMB International

China Software & IT Services - Which Stocks Are Less Vulnerable to Market Volatility?

Growing macro concerns related to stagflation, US rate hike, geopolitical tensions and RMB depreciation continue to weigh on growth stocks,...

CMB International

Glodon (002410 CH) – Penetrating into Basic Infrastructure Segment

Glodon delivered better than expected FY2Q22 results with revenue of RMB1.64bn (+23% YoY) and net profit of RMB288mn (+38% YoY).

CMB International

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