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

EURO STOXX 50 Price EUR / Technical Analysis

Our intermediate-term outlook remains constructive with major support levels holding on the broad global indexes (MSCI ACWI, ACWI ex-US, EM, and EAFE). Still, we continue to see some reason for caution as various market dynamics have deteriorated, leading us to a more neutral outlook in the near-term.

Our intermediate-term outlook remains constructive with major support levels holding on the broad global indexes (MSCI ACWI, ACWI ex-US, EM, and EAFE). Still, we continue to see some reason for caution as various market dynamics have deteriorated, leading us to a more neutral outlook in the near-term.

HK/China Equity Long-Short

Osbert Tang, CFA

Equity Bottom-Up

<a href="https://www.smartkarma.com/entities/kunlun-energy-co-ltd" target="_blank" data-smartkarma-citation="entities:10054:1" rel="noopener">Kunlun Energy (135 HK)</a>'s post-FY20 result conference call revealed that the company sees a stable growth in FY21, with improvement expected for the natural gas, LNG processing and exploration &amp; production (E&amp;P) segments. The company also highlights that the new management that come on board in Nov 2020 will push for more involvement in new energy. Based on our back-of-the-envelope calculation, Kunlun's earnings growth will range between 25-28% in FY21, depending largely on the extent of the turnaround of the E&amp;P segment. On such expectation, we still see Kunlun trades on undemanding 8.8x PER for FY21, with a net cash position even after paying out the special dividends.

Kunlun Energy (135 HK)'s post-FY20 result conference call revealed that the company sees a stable growth in FY21, with improvement expected for the natural gas, LNG processing and exploration &amp; production (E&amp;P) segments. The company also highlights that the new management that come on board in Nov 2020 will push for more involvement in new energy. Based on our back-of-the-envelope calculation, Kunlun's earnings growth will range between 25-28% in FY21, depending largely on the extent of the turnaround of the E&amp;P segment. On such expectation, we still see Kunlun trades on undemanding 8.8x PER for FY21, with a net cash position even after paying out the special dividends.

Kunlun Energy (135 HK): Key Takeaways from Post-Result Call

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

<a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2021/0323/2021032301657.pdf" target="_blank" rel="noopener">FY2020 Results</a>for <a href="https://www.smartkarma.com/entities/kunlun-energy-co-ltd" target="_blank" data-smartkarma-citation="entities:10054:1" rel="noopener">Kunlun Energy (135 HK)</a> came out this evening and clearly, the snow is melting. Spring is definitely here.<section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/196/592/original/kunlun+spring.gif?1616517142" class="editor-image img-responsive" data-smartkarma-image-id="196592"></figure></section>The KEY Takeaways are:<ol>
<li>Profits were up 9.2% vs 2019, beating consensus Net Income by 6.7%. </li>
<li>Amazingly, this was with Profit from Continuing Operations up 47.8% on the year and the Sale Assets -20.6% on the year. </li>
<li>EPS was RMB 0.7002 which is HKD 0.834 which is about 8.4% better than consensus. </li>
<li>The proposed final dividends are for RMB 21.01cts/share for the FY2020 dividend and RMB213.66cts/share for the Special Dividend, totalling RMB 2.3467 or HK$2.7973 at last rate, to shareholders of record on 3 June 2021, to be confirmed at the AGM, and paid by end July 2021. This is at the low end of my expected range (but there is still a distribution for the calendar Q1 from the Sale Assets to Kunlun to take into account).</li>
</ol>This is still not your grandfather's Kunlun.If you are just tuning in, start with <a href="https://www.smartkarma.com/insights/will-investors-find-shangri-la-in-kunlun" target="_blank" data-smartkarma-citation="insights:48113" rel="noopener">Will Investors Find Shangri-La in Kunlun?</a> and follow with <a href="https://www.smartkarma.com/insights/kunlun-energy-135-hk-it-s-different-than-you-think" target="_blank" data-smartkarma-citation="insights:49171" rel="noopener">Kunlun Energy (135 HK): It's Different Than You Think</a>.

FY2020 Resultsfor Kunlun Energy (135 HK) came out this evening and clearly, the snow is melting. Spring is definitely here.The KEY Takeaways are:
Profits were up 9.2% vs 2019, beating consensus Net Income by 6.7%. 
Amazingly, this was with Profit from Continuing Operations up 47.8% on the year and the Sale Assets -20.6% on the year. 
EPS was RMB 0.7002 which is HKD 0.834 which is about 8.4% better than consensus. 
The proposed final dividends are for RMB 21.01cts/share for the FY2020 dividend and RMB213.66cts/share for the Special Dividend, totalling RMB 2.3467 or HK$2.7973 at last rate, to shareholders of record on 3 June 2021, to be confirmed at the AGM, and paid by end July 2021. This is at the low end of my expected range (but there is still a distribution for the calendar Q1 from the Sale Assets to Kunlun to take into account).
This is still not your grandfather's Kunlun.If you are just tuning in, start with Will Investors Find Shangri-La in Kunlun? and follow with Kunlun Energy (135 HK): It's Different Than You Think.

Kunlun Energy (135 HK) - Results & Big Divs Get You Closer to Shangri-La

<a href="https://www.smartkarma.com/entities/kunlun-energy-co-ltd" target="_blank" data-smartkarma-citation="entities:10054:1" rel="noopener">Kunlun Energy (135 HK)</a> announced good FY20 result with its continuing operations (excluding the disposal of pipeline and Dalian LNG terminal) registered a 47.8% YoY earnings growth. Interestingly, profit for its discontinued operations witnessed a 20.6% YoY decline.Two immediate bright spots from the result announcement are: 1.) a special DPS of Rmb2.1366 is declared, in line with its guidance of 50% of the proceeds from disposal. Note that this is still subject to several conditions, meaning that the transaction is not yet completed as of 23 Mar; 2.) better profit at the remaining CORE natural gas business, with pre-tax profit up 28.1%.  For the special dividends, management still expects them to be paid on or before 30 Jul 2021.We estimate Kunlun's continuing operations is trading on 11x PER for FY20, much lower than other gas utilities peers. We will provide more update after the analyst presentation.

Kunlun Energy (135 HK) announced good FY20 result with its continuing operations (excluding the disposal of pipeline and Dalian LNG terminal) registered a 47.8% YoY earnings growth. Interestingly, profit for its discontinued operations witnessed a 20.6% YoY decline.Two immediate bright spots from the result announcement are: 1.) a special DPS of Rmb2.1366 is declared, in line with its guidance of 50% of the proceeds from disposal. Note that this is still subject to several conditions, meaning that the transaction is not yet completed as of 23 Mar; 2.) better profit at the remaining CORE natural gas business, with pre-tax profit up 28.1%.  For the special dividends, management still expects them to be paid on or before 30 Jul 2021.We estimate Kunlun's continuing operations is trading on 11x PER for FY20, much lower than other gas utilities peers. We will provide more update after the analyst presentation. 

Kunlun Energy (135 HK): Quick Update on FY20 Result And, More Importantly, Special Dividends

<a href="https://www.smartkarma.com/entities/enn-energy-holdings-ltd" target="_blank" data-smartkarma-citation="entities:316:1" rel="noopener">ENN Energy (2688 HK)</a> showcased an encouraging re-acceleration in 2H20 with a growth of 22.8% in its core earnings, though full-year growth of 18.2% is being dragged by the COVID-19 impaired 1H20. Both retail gas sales and value added services have seen their profit momentum recovered in the second half, and the strength for Integrated Energy (IE) stays on course (gross profit +84% YoY in 2H20).Management painted a positive picture for FY21 in the post-result call, as guidance pointed to at least 15% gas volume growth, stable dollar margin, Rmb8-10bn IE revenue (Rmb5bn in FY20) and at least 15% core earnings growth. We think these are all very conservative expectations. 1Q21 gas volume has already grown by over 30% so far, though low base is one of the reasons. We continue to like ENN and maintain that it is the top pick among pure gas utilities companies in China and its premium to sector average is well deserved.

ENN Energy (2688 HK) showcased an encouraging re-acceleration in 2H20 with a growth of 22.8% in its core earnings, though full-year growth of 18.2% is being dragged by the COVID-19 impaired 1H20. Both retail gas sales and value added services have seen their profit momentum recovered in the second half, and the strength for Integrated Energy (IE) stays on course (gross profit +84% YoY in 2H20).Management painted a positive picture for FY21 in the post-result call, as guidance pointed to at least 15% gas volume growth, stable dollar margin, Rmb8-10bn IE revenue (Rmb5bn in FY20) and at least 15% core earnings growth. We think these are all very conservative expectations. 1Q21 gas volume has already grown by over 30% so far, though low base is one of the reasons. We continue to like ENN and maintain that it is the top pick among pure gas utilities companies in China and its premium to sector average is well deserved.

ENN Energy (2688 HK): Well Justifies the Premium; and Management Guides for a Better FY21

Hong Kong

Kunlun Energy Company Ltd, through its subsidiaries, explores and produces crude oil and natural gas in China.

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Kunlun Energy (135 HK)

Major Breakout For EURO STOXX 50

Our intermediate-term outlook remains constructive with major support levels holding on the broad global indexes (MSCI ACWI, ACWI ex-US, EM, and...

Vermilion Research