Equity Research in HK and Mainland China

Li Tang

Thematic (Sector/Industry)

<p>The State Administration for Market Regulation (SAMR) and Ministry of Commerce(MOFCOM) gathered six major internet platforms including <a href="https://www.smartkarma.com/entities/alibaba-group-holding-ltd" target="_blank" data-smartkarma-citation="entities:787:1" rel="noopener">Alibaba Group (BABA US)</a><a href="https://www.smartkarma.com/entities/pinduoduo-inc" target="_blank" data-smartkarma-citation="entities:27250:1" rel="noopener">Pinduoduo (PDD US)</a> , <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent Holdings (700 HK)</a> , <a href="https://www.smartkarma.com/entities/jd-com-inc-adr" target="_blank" data-smartkarma-citation="entities:446:1" rel="noopener">JD.com Inc (ADR) (JD US)</a> ,  <a href="https://www.smartkarma.com/entities/meituan-dianping" target="_blank" data-smartkarma-citation="entities:26970:1" rel="noopener">Meituan (3690 HK)</a> , and Didi to discuss the Central Economic Work Conference and anti-monopoly measures Xinhua reported</p>

The State Administration for Market Regulation (SAMR) and Ministry of Commerce(MOFCOM) gathered six major internet platforms including Alibaba Group (BABA US)Pinduoduo (PDD US) , Tencent Holdings (700 HK) , JD.com Inc (ADR) (JD US) ,  Meituan (3690 HK) , and Didi to discuss the Central Economic Work Conference and anti-monopoly measures Xinhua reported

Market Regulator Held Meeting With Major E-Commerce Platforms

Chief Economist

Diana Choyleva

Enodo Economics

Enodo Economics is an independent macroeconomic forecasting company that untangles complexity, challenges the consensus, and makes sense of the future. Our focus is on China – one of the most misunderstood economies in the world, but one of the most important to figure out.  Enodo’s chief economist, Diana Choyleva, has been analysing China for almost 20 years, while Enodo’s team boasts a combined 140 years’ experience covering China’s economy, politics and markets. 

Macroeconomics

<h2>China News That Matters</h2><ul>
<li>WHO to visit Wuhan, finally</li>
<li>So much to sell, so few containers to use</li>
<li>Cheap veg! Sign up now!</li>
<li>Toymaker Pop Mart has winning formula, for now</li>
</ul><div class="content-remarks"><p>In my weekly digest China News That Matters, I will give you selected summaries, sourced from a variety of local Chinese-language and international news outlets, and highlight why I think the news is significant. These posts are meant to neither be bullish nor bearish, but help you separate the signal from the noise.</p></div>

China News That Matters
WHO to visit Wuhan, finally
So much to sell, so few containers to use
Cheap veg! Sign up now!
Toymaker Pop Mart has winning formula, for now
In my weekly digest China News That Matters, I will give you selected summaries, sourced from a variety of local Chinese-language and international news outlets, and highlight why I think the news is significant. These posts are meant to neither be bullish nor bearish, but help you separate the signal from the noise.

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Index Rebalance

<p>The Hang Seng Indexes Company Limited (HSIL) should announce the results of the March 2021 review of the Hang Seng Family of Indexes on 19 February. The constituent changes will be effective after the close of trading on 5 March.</p><p>We expect the March 21 review for the <a href="https://www.smartkarma.com/entities/hang-seng-china-enterprises-index" target="_blank" data-smartkarma-citation="entities:22900:1" rel="noopener">Hang Seng China Enterprises Index (HSCEI INDEX)</a> to have only 1 deletion, though there is a low probability of another set of changes. Post <a href="https://www.smartkarma.com/entities/jd-health-international" target="_blank" data-smartkarma-citation="entities:29677:1" rel="noopener">JD Health (6618 HK)</a>'s Fast Entry into the index, there needs to be one deletion at the March review. At the current time, the lowest ranked index constituent is <a href="https://www.smartkarma.com/entities/petrochina-co-ltd-h" target="_blank" data-smartkarma-citation="entities:262:1" rel="noopener">Petrochina Co Ltd H (857 HK)</a> and the stock should be deleted at the March review.</p><p>There was a medium probability of <a href="https://www.smartkarma.com/entities/country-garden-services-holdings-company-limited" target="_blank" data-smartkarma-citation="entities:27343:1" rel="noopener">Country Garden Services Holdings (6098 HK)</a> being included in the index. That has now become a low probability event post <a href="https://www.smartkarma.com/entities/jd-health-international" target="_blank" data-smartkarma-citation="entities:29677:1" rel="noopener">JD Health (6618 HK)</a>'s inclusion in the index. If <a href="https://www.smartkarma.com/entities/country-garden-services-holdings-company-limited" target="_blank" data-smartkarma-citation="entities:27343:1" rel="noopener">Country Garden Services Holdings (6098 HK)</a> is included in the index, then <a href="https://www.smartkarma.com/entities/hengan-intl-group-co-ltd" target="_blank" data-smartkarma-citation="entities:29:1" rel="noopener">Hengan Intl Group (1044 HK)</a> could be deleted.</p><p>The potential changes to the <a href="https://www.smartkarma.com/entities/hang-seng-china-enterprises-index" target="_blank" data-smartkarma-citation="entities:22900:1" rel="noopener">Hang Seng China Enterprises Index (HSCEI INDEX)</a> over the next 6 months will also have serious implications for the dividend futures expiring in 2021, 2022 and beyond.</p>

The Hang Seng Indexes Company Limited (HSIL) should announce the results of the March 2021 review of the Hang Seng Family of Indexes on 19 February. The constituent changes will be effective after the close of trading on 5 March.We expect the March 21 review for the Hang Seng China Enterprises Index (HSCEI INDEX) to have only 1 deletion, though there is a low probability of another set of changes. Post JD Health (6618 HK)'s Fast Entry into the index, there needs to be one deletion at the March review. At the current time, the lowest ranked index constituent is Petrochina Co Ltd H (857 HK) and the stock should be deleted at the March review.There was a medium probability of Country Garden Services Holdings (6098 HK) being included in the index. That has now become a low probability event post JD Health (6618 HK)'s inclusion in the index. If Country Garden Services Holdings (6098 HK) is included in the index, then Hengan Intl Group (1044 HK) could be deleted.The potential changes to the Hang Seng China Enterprises Index (HSCEI INDEX) over the next 6 months will also have serious implications for the dividend futures expiring in 2021, 2022 and beyond.

HSCEI Index Rebalance Preview: One Deletion For Sure, Could Be One More Change

<p style="text-align: justify;">The Politburo released meeting statement pledged to strengthen anti-monopoly efforts in 2021 as it seeks to rein in what it called disorderly capital expansion Xinhua reported. In line with this delegates from 23 provincial SAMRs (The State Administration for Market Regulation ) attended an anti-monopoly conference held in Hangzhou, Zhejiang province, on Thursday.The timing of the meeting comes as eyes are turning towards both the financial regulators and the SAMR in the battle to rein in expansion at the major technology companies. The extent of the action the SAMR will take is unclear, but the trajectory of policy is clear: to rein in the lightly regulated expansion of large tech conglomerates.</p>
<p style="text-align: left;">This conference has not garnered a lot of media attention, but we think the follow-up statements or circulars is worthy of investors’ attention. This comes after the release of several guidelines and opinions from various ministries to regulate online sales promotions and livestreaming.</p>
<p style="text-align: left;">The SAMR, STA, and the CAC (Cyberspace Administration of China) also summoned the major internet platforms including <a href="https://www.smartkarma.com/entities/jd-com-inc-adr" target="_blank" rel="noopener">JD.com Inc (ADR) (JD US)</a> , <a href="https://www.smartkarma.com/entities/meituan-dianping" target="_blank" rel="noopener">Meituan (3690 HK)</a> , <a href="https://www.smartkarma.com/entities/alibaba-group-holding-ltd" target="_blank" rel="noopener">Alibaba Group (BABA US)</a> , ByteDance, Didi, Kuaishou, <a href="https://www.smartkarma.com/entities/pinduoduo-inc" target="_blank" rel="noopener">Pinduoduo (PDD US)</a> to a meeting last month to call for greater self-supervision over market abuse.</p>

The Politburo released meeting statement pledged to strengthen anti-monopoly efforts in 2021 as it seeks to rein in what it called disorderly capital expansion Xinhua reported. In line with this delegates from 23 provincial SAMRs (The State Administration for Market Regulation ) attended an anti-monopoly conference held in Hangzhou, Zhejiang province, on Thursday.The timing of the meeting comes as eyes are turning towards both the financial regulators and the SAMR in the battle to rein in expansion at the major technology companies. The extent of the action the SAMR will take is unclear, but the trajectory of policy is clear: to rein in the lightly regulated expansion of large tech conglomerates.
This conference has not garnered a lot of media attention, but we think the follow-up statements or circulars is worthy of investors’ attention. This comes after the release of several guidelines and opinions from various ministries to regulate online sales promotions and livestreaming.
The SAMR, STA, and the CAC (Cyberspace Administration of China) also summoned the major internet platforms including JD.com Inc (ADR) (JD US) , Meituan (3690 HK) , Alibaba Group (BABA US) , ByteDance, Didi, Kuaishou, Pinduoduo (PDD US) to a meeting last month to call for greater self-supervision over market abuse.

Regulators Holds National Symposium To Strengthen Anti-Monopoly Rules

IPO and L/S equity, 2015 Starmine top stock picker, Global Equity Research Ltd

Rickin Thakrar

IPO and L/S equity, 2015 Starmine top stock picker

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Equity Capital Markets

<p>Sea announced a placement of its shares with the hopes of raising approximately 2bn USD. Sea shares have had a phenomenal run with the shares rising almost six-fold over the past year driven by strong top-line growth and the potential for a unique one-way adoption ecosystem in e-commerce and payments. Our updated view is below the fold</p><p>Our previous bullish research on Sea  is below</p><p><a href="https://www.smartkarma.com/insights/sea-limited-3q-results-driving-a-new-pillar-of-growth" target="_blank" data-smartkarma-citation="insights:45445" rel="noopener">Sea Limited 3Q Results: Driving a New Pillar of Growth</a> </p><div><p><a href="https://www.smartkarma.com/insights/sea-limited-can-the-good-times-continue-to-roll" target="_blank" data-smartkarma-citation="insights:42356" rel="noopener">Sea Limited: Can the Good Times Continue to Roll?</a> </p></div><div>
<p><a href="https://www.smartkarma.com/insights/sea-limited-opportunistic-offering-or-building-a-war-chest" target="_blank" data-smartkarma-citation="insights:34457" rel="noopener">Sea Limited: Opportunistic Offering or Building a War-Chest?</a> </p>
<p></p>
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Sea announced a placement of its shares with the hopes of raising approximately 2bn USD. Sea shares have had a phenomenal run with the shares rising almost six-fold over the past year driven by strong top-line growth and the potential for a unique one-way adoption ecosystem in e-commerce and payments. Our updated view is below the foldOur previous bullish research on Sea  is belowSea Limited 3Q Results: Driving a New Pillar of Growth Sea Limited: Can the Good Times Continue to Roll? 
Sea Limited: Opportunistic Offering or Building a War-Chest? 



Sea Limited Placement: Hoping for a Cheap Entry Point for This Unique Growth Story

China

PDD Holdings Inc. is a multinational commerce group that owns and operates a portfolio of businesses. The Company focuses on digital economy so that local communities and small businesses can benefit from the increased productivity and new opportunities. PDD Holdings has built a network of sourcing, logistics, and fulfillment capabilities for its underlying businesses.

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PDD Holdings (PDD US)

Market Regulator Held Meeting With Major E-Commerce Platforms

The move is in line with The Politburo meeting held on 12 Dec.Regulators are tightening regulation on Community group-buying prevent disorderly...

Li Tang

Covid-19/ Economy/ Group Buying/ IPOs

In my weekly digest, I will give you selected summaries, sourced from a variety of local Chinese-language and international news outlets, and...

Diana Choyleva

HSCEI Index Rebalance Preview: One Deletion For Sure, Could Be One More Change

Following JD Health's Fast Entry into the HSCEI, PetroChina is a high probability deletion in March. There is a low probability of Country Garden...

Brian Freitas

Regulators Holds National Symposium To Strengthen Anti-Monopoly Rules

It is significant that Politburo and the delegates from 23 provinces and municipality all gathered to discuss the Anti-Monopoly Rules

Li Tang

Sea Limited Placement: Hoping for a Cheap Entry Point for This Unique Growth Story

Sea announced a placement of its shares with the hopes of raising approximately 2bn USD. Sea shares have had a phenomenal run with the shares...

Rickin Thakrar

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