HK/China Equity Long-Short

Osbert Tang, CFA

Thematic (Sector/Industry)

<ul>
<li>Chinese government will continue to boost the slowing domestic economy by supporting consumption. The A-share consumer staples sector, which is less volatile than discretionary, will be benefited.</li>
<li>We see attractive stories for <a href="https://www.smartkarma.com/entities/shanxi-xinghuacun-fen-wine-factory-co" target="_blank" data-smartkarma-citation="entities:9288:1" rel="noopener">Shanxi Xinghuacun Fen Wine (600809 CH)</a>, <a href="https://www.smartkarma.com/entities/foshan-haitian-flavouring-food-co-ltd" target="_blank" data-smartkarma-citation="entities:15577:1" rel="noopener">Foshan Haitian Flavouring (603288 CH)</a>, <a href="https://www.smartkarma.com/entities/inner-mongolia-yili-indus-a" target="_blank" data-smartkarma-citation="entities:3220:1" rel="noopener">Inner Mongolia Yili Industrial (600887 CH)</a> and <a href="https://www.smartkarma.com/entities/fu-jian-anjoy-foods-co-ltd" target="_blank" data-smartkarma-citation="entities:30110:1" rel="noopener">Fu Jian Anjoy Foods (603345 CH)</a>.  </li>
<li>While they are trading on high-end of peer multiples, their earnings quality, leadership status and product premiumisation provide good justifications for valuation. Also, all of them have solid financial position.  </li>
</ul>


Chinese government will continue to boost the slowing domestic economy by supporting consumption. The A-share consumer staples sector, which is less volatile than discretionary, will be benefited.
We see attractive stories for Shanxi Xinghuacun Fen Wine (600809 CH), Foshan Haitian Flavouring (603288 CH), Inner Mongolia Yili Industrial (600887 CH) and Fu Jian Anjoy Foods (603345 CH).  
While they are trading on high-end of peer multiples, their earnings quality, leadership status and product premiumisation provide good justifications for valuation. Also, all of them have solid financial position.  


China A-Share Consumer Staples: An Analysis of the Opportunities Ahead

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

<ul>
<li>While continual Covid-19 outbreaks continue to make their mark on earnings season, one commodity is still raking in cash: top-shelf baijiu.</li>
<li>Shrugging off years of official probes into the notoriously graft-plagued industry, luxury brands like Moutai and Wuliangye made a head-spinning amount of money in the first six months of 2022.</li>
<li>In the first half of 2022, Kweichow Moutai Co. Ltd. and Wuliangye Yibin Co. Ltd. retained their long-standing No. 1 and No. 2 positions in the market.</li>
</ul>


While continual Covid-19 outbreaks continue to make their mark on earnings season, one commodity is still raking in cash: top-shelf baijiu.
Shrugging off years of official probes into the notoriously graft-plagued industry, luxury brands like Moutai and Wuliangye made a head-spinning amount of money in the first six months of 2022.
In the first half of 2022, Kweichow Moutai Co. Ltd. and Wuliangye Yibin Co. Ltd. retained their long-standing No. 1 and No. 2 positions in the market.


China’s Big Brand Baijiu-Makers Have a Toast-Worthy First Half

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>Broad global MSCI equity indexes (ACWI,ACWI ex-U.S.,EAFE, and EM) remain bearish with YTD downtrends intact. Until these indexes reverse downtrends, we are bearish and view bounces as bear market rallies.</li>
<li>Major non-U.S. countries appear to be much further along in the bottoming process, a potential sign that U.S. indexes could take a back seat once global equities finally bottom.</li>
<li>Indexes that have not made a new low since March: Nikkei 225, TOPIX, TOPIX Small, Hang Seng, Europe’s EURO STOXX 50, and China's MSCI China (MCHI-US) and China Internet (KWEB-US).</li>
</ul>


Broad global MSCI equity indexes (ACWI,ACWI ex-U.S.,EAFE, and EM) remain bearish with YTD downtrends intact. Until these indexes reverse downtrends, we are bearish and view bounces as bear market rallies.
Major non-U.S. countries appear to be much further along in the bottoming process, a potential sign that U.S. indexes could take a back seat once global equities finally bottom.
Indexes that have not made a new low since March: Nikkei 225, TOPIX, TOPIX Small, Hang Seng, Europe’s EURO STOXX 50, and China's MSCI China (MCHI-US) and China Internet (KWEB-US).


Hang Seng, MSCI China Near Major Base Breakouts; Bottoms-Up Stock Rec's in Hong Kong, China, & Japan

Asia Pac ECM and Index Rebal, Shenton Research

Ke Yan, CFA, FRM

Asia Pac ECM and Index Rebal

Asia Pac IPO & Placement Research, China Biotech

DZT Research

DZT Research is an independent Asia Pacific equity specialist. Our quantitative research covers index rebalancing flows, alongside exchange data analytics accross Asia Pacific. On the equity capital markets side, we focus on Asia Pacific ECM, especially biotech and TMT. Our lead analyst is frequently cited by international media.

Quantitative Analysis

<ul>
<li>We analysed the earning revision of component stocks of CSI 300 in the past month.</li>
<li>We tabulated stocks with the top impact on index's EPS, stocks' EPS revision, and revenue revision.</li>
<li>We highlighted EPS revision on INDUSTRIAL BANK, YANTAI JEREH OILFIELD SERVICES, XIAMEN TUNGSTEN, KUNLUN TECH, CHONGQING ZHIFEI BIOLOGICAL PRODUCTS, GIANT NETWORK, CHINA SHENHUA ENERGY, Xinjiang Daqo.</li>
</ul>


We analysed the earning revision of component stocks of CSI 300 in the past month.
We tabulated stocks with the top impact on index's EPS, stocks' EPS revision, and revenue revision.
We highlighted EPS revision on INDUSTRIAL BANK, YANTAI JEREH OILFIELD SERVICES, XIAMEN TUNGSTEN, KUNLUN TECH, CHONGQING ZHIFEI BIOLOGICAL PRODUCTS, GIANT NETWORK, CHINA SHENHUA ENERGY, Xinjiang Daqo.


CSI 300 Index Earning Revision (Jun): INDUSTRIAL BANK, YANTAI JEREH OILFIELD SERVICES, KUNLUN TECH

Wuliangye Yibin Co Ltd A / Technical Analysis

In this report we lay out what we believe is a compelling case to add exposure to two Chinese alcoholic beverage stocks at current levels both of which display bullish price and RS trends: Wuliangye Yibin Class A (000858-CN) and Jiangsu Yanghe Brewery Class A (002304-CN). Add exposure.

In this report we lay out what we believe is a compelling case to add exposure to two Chinese alcoholic beverage stocks at current levels both of which display bullish price and RS trends: Wuliangye Yibin Class A (000858-CN) and Jiangsu Yanghe Brewery Class A (002304-CN). Add exposure.

Alcoholic Beverage Stocks A Bright Spot In China

China

Jiangsu Yanghe Brewery Joint-Stock Company Ltd. manufactures spirits. The Company's products include white spirits, top-graded gifts liquor, and liquor for daily consumption.

Price Gauge
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Jiangsu Yanghe Brewery A (002304 CH)

China’s Big Brand Baijiu-Makers Have a Toast-Worthy First Half

While continual Covid-19 outbreaks continue to make their mark on earnings season, one commodity is still raking in cash: top-shelf baijiu.

Caixin Global

Hang Seng, MSCI China Near Major Base Breakouts; Bottoms-Up Stock Rec's in Hong Kong, China, & Japan

Hong Kong's Hang Seng and China's $MCHI and $KWEB are near major base breakouts. We are watching is 22,700 on Hang Seng and $56.60 on MCHI; we are...

Vermilion Research

CSI 300 Index Earning Revision (Jun): INDUSTRIAL BANK, YANTAI JEREH OILFIELD SERVICES, KUNLUN TECH

We analyzed CSI 300's consensus for Jun 2026 and highlighted changes of EPS in INDUSTRIAL BANK (601166 CH), YANTAI JEREH OILFIELD SERVICES (002353...

Ke Yan, CFA, FRM

Alcoholic Beverage Stocks A Bright Spot In China

We lay out a compelling case to add exposure to two Chinese alcoholic beverage stocks at current levels: Wuliangye Yibin Class A (000858-CN) and...

Vermilion Research

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

China A-Share Consumer Staples: An Analysis of the Opportunities Ahead

With the recent IPOs of Foshan Haitian Flavouring and Fujian Anjoy Foods (planned), we think the interest in China's consumer staples sector will...

Osbert Tang, CFA

China’s Big Brand Baijiu-Makers Have a Toast-Worthy First Half

While continual Covid-19 outbreaks continue to make their mark on earnings season, one commodity is still raking in cash: top-shelf baijiu.

Caixin Global

Hang Seng, MSCI China Near Major Base Breakouts; Bottoms-Up Stock Rec's in Hong Kong, China, & Japan

Hong Kong's Hang Seng and China's $MCHI and $KWEB are near major base breakouts. We are watching is 22,700 on Hang Seng and $56.60 on MCHI; we are...

Vermilion Research

CSI 300 Index Earning Revision (Jun): INDUSTRIAL BANK, YANTAI JEREH OILFIELD SERVICES, KUNLUN TECH

We analyzed CSI 300's consensus for Jun 2026 and highlighted changes of EPS in INDUSTRIAL BANK (601166 CH), YANTAI JEREH OILFIELD SERVICES (002353...

Ke Yan, CFA, FRM

Alcoholic Beverage Stocks A Bright Spot In China

We lay out a compelling case to add exposure to two Chinese alcoholic beverage stocks at current levels: Wuliangye Yibin Class A (000858-CN) and...

Vermilion Research