HK/China Equity Long-Short

Osbert Tang, CFA

Equity Bottom-Up

<ul>
<li>Besides as nationalistic consumption play, <a href="https://www.smartkarma.com/entities/haier-smart-home-co-ltd-b3ef445f-0f54-4586-8c58-9073de98d60e" target="_blank" data-smartkarma-citation="entities:31105:1" rel="noopener">Haier Smart Home (6690 HK)</a> also offers attractive investment theses with bright growth prospects. Despite share price rebound, valuations are still not yet reflecting fundamentals.</li>
<li>The surge in demand for refrigerators and freezers during the pandemic-led lockdowns has boosted HSH's business in 4M22 while it will also reap benefits from Rmb depreciation.</li>
<li>The government's support of healthy development of residential real estate market will be positive towards smart home appliance demand which HSH is set to gain from its leadership position. </li>
</ul>


Besides as nationalistic consumption play, Haier Smart Home (6690 HK) also offers attractive investment theses with bright growth prospects. Despite share price rebound, valuations are still not yet reflecting fundamentals.
The surge in demand for refrigerators and freezers during the pandemic-led lockdowns has boosted HSH's business in 4M22 while it will also reap benefits from Rmb depreciation.
The government's support of healthy development of residential real estate market will be positive towards smart home appliance demand which HSH is set to gain from its leadership position. 


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

Macroeconomics

<ul>
<li>China’s local governments have begun offering billions of yuan worth of coupons to boost consumer spending, in an effort to help businesses feeling the pain of China’s Covid-19 outbreaks over the past two months.</li>
<li>The measure comes as China’s economy faces some of the greatest strain it has experienced since the initial wave of outbreaks in early 2020 as strict lockdowns across the country have disrupted business and everyday life</li>
<li>This time, local governments have also chosen coupons or vouchers as the form of their demand-side stimulus policy. The coupons will be good for discounts on products like cars and electronics, as well as services such as admission into local tourist sites.</li>
</ul>


China’s local governments have begun offering billions of yuan worth of coupons to boost consumer spending, in an effort to help businesses feeling the pain of China’s Covid-19 outbreaks over the past two months.
The measure comes as China’s economy faces some of the greatest strain it has experienced since the initial wave of outbreaks in early 2020 as strict lockdowns across the country have disrupted business and everyday life
This time, local governments have also chosen coupons or vouchers as the form of their demand-side stimulus policy. The coupons will be good for discounts on products like cars and electronics, as well as services such as admission into local tourist sites.


Local Governments Again Break Out the Coupons to Boost Consumer Spending

Asia Pac IPO & Placement Research, China biotech, Aequitas Research

Ke Yan, CFA, FRM

Asia Pac IPO & Placement Research, China biotech

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Quantitative Analysis

<ul>
<li>We analyze the weekly Shanghai/Shenzhen northbound Connect flows with our data engine.</li>
<li>Industrial, healthcare and consumer discretionary led the inflow while financials led the outflow.</li>
<li>We highlight inflows into Shenzhen Inovance and Nari Technology that worth investor attention. </li>
</ul>


We analyze the weekly Shanghai/Shenzhen northbound Connect flows with our data engine.
Industrial, healthcare and consumer discretionary led the inflow while financials led the outflow.
We highlight inflows into Shenzhen Inovance and Nari Technology that worth investor attention. 


Northbound Flows: Shenzhen Inovance, Nari Technology

Thematic (Sector/Industry)

<ul>
<li>More policy measures will be rolled out by the Chinese government to support domestic consumption in 2022; and the growing nationalistic trend will benefit leading domestic brands. </li>
<li>Within the consumer discretionary sector, we identify <a href="https://www.smartkarma.com/entities/anta-sports-products-ltd" target="_blank" data-smartkarma-citation="entities:10261:1" rel="noopener">Anta Sports Products (2020 HK)</a>, <a href="https://www.smartkarma.com/entities/bosideng-international-holdings-ltd" target="_blank" data-smartkarma-citation="entities:6537:1" rel="noopener">Bosideng International Holdings (3998 HK)</a> and <a href="https://www.smartkarma.com/entities/haier-smart-home-co-ltd-b3ef445f-0f54-4586-8c58-9073de98d60e" target="_blank" data-smartkarma-citation="entities:31105:1" rel="noopener">Haier Smart Home (6690 HK)</a> as the prime beneficiaries of this trend.</li>
<li>All of them are leaders in their respective sub-segment, have exemplary competitive edges against foreign players and are investing heavily in technology and distribution to solidify their moats. </li>
</ul>


More policy measures will be rolled out by the Chinese government to support domestic consumption in 2022; and the growing nationalistic trend will benefit leading domestic brands. 
Within the consumer discretionary sector, we identify Anta Sports Products (2020 HK), Bosideng International Holdings (3998 HK) and Haier Smart Home (6690 HK) as the prime beneficiaries of this trend.
All of them are leaders in their respective sub-segment, have exemplary competitive edges against foreign players and are investing heavily in technology and distribution to solidify their moats. 


China Consumer Discretionary: Beneficiaries of The Nationalistic Trend

Asset Allocation & Fund Positioning, Copley Fund Research

Steven Holden

Asset Allocation & Fund Positioning

Copley Fund Research

Copley Fund Research provide research and data on asset allocation among Global and Emerging Market equity funds.  The analysis details absolute and relative positioning across countries, sectors and industries together with highly granular data on single stock and single fund allocations.  The data is updated monthly with time series going back to January 2011.

Global Research - Analysis of 165 prominent Global equity funds, combined AUM $335bn
GEM Research - Analysis of 127 prominent global EM equity funds, combined AUM $250bn

Asset Allocation - Global and GEM Equity

Cross Asset Strategy

<ul>
<li>China A-Shares allocations continues to grow among active EM investors. Average holding weights sit close to all-time highs of 5.60%, with a record 87.8% of funds invested</li>
<li>Over the past 6-months, EM investors have made a clear rotation in to A-Shares, with all measures of ownership moving higher vs country peers. Growth investors are the key allocators</li>
<li>Ecovacs Robotics Co Ltd and East Money Information have seen ownership levels double, whilst CATL and Midea Group remain the most widely held stocks.</li>
</ul>


China A-Shares allocations continues to grow among active EM investors. Average holding weights sit close to all-time highs of 5.60%, with a record 87.8% of funds invested
Over the past 6-months, EM investors have made a clear rotation in to A-Shares, with all measures of ownership moving higher vs country peers. Growth investors are the key allocators
Ecovacs Robotics Co Ltd and East Money Information have seen ownership levels double, whilst CATL and Midea Group remain the most widely held stocks.


China

Midea Group CO., LTD manufactures, markets and installs household electrical appliances, compressors and components. Midea also provides services in information technology, corporate investment consultation, software and hardware development, property management and corporate engineering supports. Midea Group provides its products worldwide.

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Midea Group Co Ltd A (000333 CH)

Haier Smart Home (6690 HK): Smart Moves

Haier Smart Home has seen good refrigerators/freezers sales amid the lockdowns and it will also benefit from Rmb depreciation and the government's...

Osbert Tang, CFA

Local Governments Again Break Out the Coupons to Boost Consumer Spending

China’s local governments have begun offering billions of yuan worth of coupons to boost consumer spending, in an effort to help businesses

Caixin Global

Northbound Flows: Shenzhen Inovance, Nari Technology

We highlight weekly Hong Kong Connect northbound inflows into Moutai, Yunnan Baiyao, Media Group, Shenzhen Inovance and Nari Technology.

Ke Yan, CFA, FRM

China Consumer Discretionary: Beneficiaries of The Nationalistic Trend

We identify Anta Sports, Bosideng and Haier Smart Home as the beneficiaries of rising nationalistic trend of China's consumer discretionary sector...

Osbert Tang, CFA

China A-Shares: Powering to New Highs

China A-Shares allocations have hit new highs among EM investors. We see a clear rotation in to A-Shares, with all measures of ownership moving...

Steven Holden

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