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

US Treasury (10 Yr Generic) / Technical Analysis

<ul>
<li>In our two previous Int'l Compass reports (Aug. 18 &amp; 24) we discussed that we were buyers on the pullback to the major $93 support level on MSCI ACWI (ACWI-US).</li>
<li>$93 on ACWI is 1+ year base support and a level that coincides with the 10-month uptrend. We remain bullish as long as the ACWI-US is above $93.</li>
<li>$93 on ACWI-US is likely the low for this pullback as long as the 10-year Treasury yield and DXY can stay below respective resistance levels (4.3%-4.35% and $103.70-$105.70).</li>
</ul>


In our two previous Int'l Compass reports (Aug. 18 &amp; 24) we discussed that we were buyers on the pullback to the major $93 support level on MSCI ACWI (ACWI-US).
$93 on ACWI is 1+ year base support and a level that coincides with the 10-month uptrend. We remain bullish as long as the ACWI-US is above $93.
$93 on ACWI-US is likely the low for this pullback as long as the 10-year Treasury yield and DXY can stay below respective resistance levels (4.3%-4.35% and $103.70-$105.70).


Further Declines in DXY, Sovereign Yields May Provide More Fuel for a Rally in Global Equities

China/Asia TMT

Shawn Yang

China growth and global non-US Internet equities

Blue Lotus Research Institute

Blue Lotus Research is a Hong Kong Type 4 Licensed investment advisory firm focusing on Chinese growth equities and global non-US Internet equities

Equity Bottom-Up

<ul>
<li>C2Q23 revenue (1.9%)/2.6% vs. our estimate/consensus, its non-GAAP NI is 18.5%/18.3% higher than estimate/consensus. 1) GPM improvement from revenue mix ; 2) less than expected OPEX from IP licensing fee. </li>
<li>We think Miniso’s strategy to open more flagship stores is in-line with its brand upgrade strategy for seeking price premium beyond value-for-money, which bodes well for its long-term brand value. </li>
<li>We maintain Buy rating and maintain TP at US$26. We raise 2024 EPADS by 6.4% to project lower OPEX with efficiency improvement.</li>
</ul>


C2Q23 revenue (1.9%)/2.6% vs. our estimate/consensus, its non-GAAP NI is 18.5%/18.3% higher than estimate/consensus. 1) GPM improvement from revenue mix ; 2) less than expected OPEX from IP licensing fee. 
We think Miniso’s strategy to open more flagship stores is in-line with its brand upgrade strategy for seeking price premium beyond value-for-money, which bodes well for its long-term brand value. 
We maintain Buy rating and maintain TP at US$26. We raise 2024 EPADS by 6.4% to project lower OPEX with efficiency improvement.


[Miniso Group (MNSO US, BUY, TP US$26) Review]: Strong Demand Support Further Store Openings

<ul>
<li>We expect MNSO to report C2Q23 revenue 4.6% higher than cons and non-GAAP NI in-line with cons. The beat is due to strong sales from larger ticket size &amp;store expansion.  </li>
<li>We think the brand upgrade strategy had effectively drove up Miniso stores’ blended ASP, combined with mild recovery of foot traffic, leading to 46% YoY growth in China revenue.</li>
<li>Besides, we anticipate 37% YoY growth in oversea revenue and 43% YoY growth in total revenue in C2Q23. We maintain Buy rating and raise TP by US$0.5 to US$26.</li>
</ul>


We expect MNSO to report C2Q23 revenue 4.6% higher than cons and non-GAAP NI in-line with cons. The beat is due to strong sales from larger ticket size &amp;store expansion.  
We think the brand upgrade strategy had effectively drove up Miniso stores’ blended ASP, combined with mild recovery of foot traffic, leading to 46% YoY growth in China revenue.
Besides, we anticipate 37% YoY growth in oversea revenue and 43% YoY growth in total revenue in C2Q23. We maintain Buy rating and raise TP by US$0.5 to US$26.


[Miniso Group (MNSO US, BUY, TP US$26) TP Change]: Shifting from Value- To Interest-Based Retailer

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>After one month from the March batch of Hong Kong Connect inclusion, we provide an analysis on the stock inclusion for 24 stocks. </li>
<li>We analysed the inclusion by performance post announcement, performance post inclusion, inflows and analyst coverage.</li>
<li>This time we observe outperformance when inclusion took place but not between announcement and inclusion. Southbound trade account for a significant portion of the trading volumes, still.</li>
</ul>


After one month from the March batch of Hong Kong Connect inclusion, we provide an analysis on the stock inclusion for 24 stocks. 
We analysed the inclusion by performance post announcement, performance post inclusion, inflows and analyst coverage.
This time we observe outperformance when inclusion took place but not between announcement and inclusion. Southbound trade account for a significant portion of the trading volumes, still.


HK Connect: Mar '22 Inclusion Post-Event Analysis

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.

<ul>
<li>Despite a 15% drop in March 2023, <a href="https://www.smartkarma.com/entities/miniso-group-holdings" target="_blank" data-smartkarma-citation="entities:29673:1" rel="noopener">Miniso (MNSO US)</a> remains relatively expensive compared to peers, having rallied 330% between October 2022 and March 2023.</li>
<li>We think this is a good opportunity to short <a href="https://www.smartkarma.com/entities/miniso-group-holding-ltd" target="_blank" data-smartkarma-citation="entities:36659:1" rel="noopener">MINISO Group Holding (9896 HK)</a> as we see around 35% downside purely from a valuation angle.</li>
<li>Meanwhile, red flags like insider selling, Blue Orca's accusations, senior management departures, and a mature domestic market could send the share price back below $5.0.</li>
</ul>


Despite a 15% drop in March 2023, Miniso (MNSO US) remains relatively expensive compared to peers, having rallied 330% between October 2022 and March 2023.
We think this is a good opportunity to short MINISO Group Holding (9896 HK) as we see around 35% downside purely from a valuation angle.
Meanwhile, red flags like insider selling, Blue Orca's accusations, senior management departures, and a mature domestic market could send the share price back below $5.0.


Miniso: Investors Turning a Blind Eye to Red Flags in Miniso

China

MINISO Group Holding Limited operates as a holding company. The Company, through its subsidiaries, retails home decor, small electronics, textile, accessories, beauty tools, toys, cosmetics, personal care, snacks, fragrance and perfumes, and stationery and gifts. MINISO Group Holding serves customers worldwide.

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MINISO Group Holding (9896 HK)

Further Declines in DXY, Sovereign Yields May Provide More Fuel for a Rally in Global Equities

We continue to believe $93 on $ACWI is likely the low for this pullback as long as the 10-year Treasury yield $TNX and $DXY can stay below their...

Vermilion Research

[Miniso Group (MNSO US, BUY, TP US$26) Review]: Strong Demand Support Further Store Openings

We think Miniso’s strategy to open more flagship stores is in-line with its brand upgrade strategy for seeking price premium beyond value-for...

Blue Lotus Research Institute

[Miniso Group (MNSO US, BUY, TP US$26) TP Change]: Shifting from Value- To Interest-Based Retailer

We expect MNSO to report C2Q23 revenue 4.6% higher than cons and non-GAAP NI in-line with cons. The beat is due to strong sales from larger ticket...

Blue Lotus Research Institute

HK Connect: Mar '22 Inclusion Post-Event Analysis

We analyzed the performance of stocks for the March 2023 batch of Hong Kong Connect inclusion, including the performance post announcement, post...

Ke Yan, CFA, FRM

Miniso: Investors Turning a Blind Eye to Red Flags in Miniso

Investors have overlooked insider selling, Blue Orca's allegations, management departures, and market saturation. Despite this, we see a 35%...

Oshadhi Kumarasiri

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