Chart based progressive global trading strategies, Chart Partners

Thomas Schroeder

Chart based progressive global trading strategies

Chart Partners

Chart Partners objective is to discover medium-term cycle turns and profit opportunities before they unfold, within structural trends while preserving capital with clear degrees of risk. We have real return ideas. 

Markets are dynamic and trading systems must reflect this. It is crucial to determine underlying correlations and lead-lag relationships within global markets and the impact on linked instruments. Our weekly Chartonics product gives you short-term trading strategies that can be applied within the medium and longer term macro trends that are mapped out in our strategy updates. 

Our methodology fuses global market variables and isolates drivers in trends. We specialize in FX, index trade in NY and Asia with a focus on Asian stocks. 

Technical Analysis

<p><a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent (700 HK)</a> displays some underlying chart points of improvement with 620 the hurdle to clear for a green light to avert a re test on the macro bull support at 560. We remain constructive/macro bullish with policy headwinds as China tech still shows a lethargic rally bias. Failing at the 620 resistance sets up a tactical short or fresh down leg.</p><p>620 key resistance and 560 macro buy support are pivot points in focus.</p><p>Underside of broken trendline and price resistance lie at 620.</p><p>Buy volumes are improving.</p>

Tencent (700 HK) displays some underlying chart points of improvement with 620 the hurdle to clear for a green light to avert a re test on the macro bull support at 560. We remain constructive/macro bullish with policy headwinds as China tech still shows a lethargic rally bias. Failing at the 620 resistance sets up a tactical short or fresh down leg.620 key resistance and 560 macro buy support are pivot points in focus.Underside of broken trendline and price resistance lie at 620.Buy volumes are improving.

Tencent Macro Bull Support Met but Staring at 620 Pivot

Equity Analyst, LightStream Research

Shifara Samsudeen, FCMA, CGMA

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.

Equity Bottom-Up

<p>It was reported by several news media outlets that the China’s competition regulator, the State Administration for Market Regulation (SAMR) has ordered <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent (700 HK)</a> to establish a financial holding company to put together the company’s finance related businesses. The motive behind the new structure will be to supervise Tencent’s financial related businesses more closely and will face stringent regulations.</p><p>The SAMR earlier abruptly halted the US$37bn IPO of <a href="https://www.smartkarma.com/entities/ant-group-co-ltd" target="_blank" data-smartkarma-citation="entities:24240:1" rel="noopener">Ant Financial Services Group (6688 HK)</a>  over concerns about the growth of unregulated financial technology services in the country and Ant Group was ordered to restructure itself as a financial holding company.   </p>

It was reported by several news media outlets that the China’s competition regulator, the State Administration for Market Regulation (SAMR) has ordered Tencent (700 HK) to establish a financial holding company to put together the company’s finance related businesses. The motive behind the new structure will be to supervise Tencent’s financial related businesses more closely and will face stringent regulations.The SAMR earlier abruptly halted the US$37bn IPO of Ant Financial Services Group (6688 HK)  over concerns about the growth of unregulated financial technology services in the country and Ant Group was ordered to restructure itself as a financial holding company.   

Tencent: Regulators Order Tencent to Set Up a Financial Holding Company

Global TMT analyst with Asia ex-Japan focus.

Mitchell Kim

<p><a href="https://www.smartkarma.com/entities/pinduoduo-inc" target="_blank" data-smartkarma-citation="entities:27250:1" rel="noopener">Pinduoduo (PDD US)'s</a> share price fell 5.5% in the US market after the company reported a 239% revenue growth YoY.   I believe there are three reasons why the market punished the stock (indeed <a href="https://www.smartkarma.com/entities/meituan-dianping" target="_blank" data-smartkarma-citation="entities:26970:1" rel="noopener">Meituan (3690 HK)</a>, <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent (700 HK), and </a><a href="https://www.smartkarma.com/entities/vipshop-holdings-ltd-adr" target="_blank" data-smartkarma-citation="entities:1088:1" rel="noopener">Vipshop Holdings (VIPS US)</a><a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener"> fell too, but </a><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/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener"> and </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>):</p><ul>
<li>The company decided against disclosing the TTM GMV.  Why? </li>
<li>The explosive revenue growth was partly due to the direct sales revenue which was recorded in only the last two quarters and the grocery delivery business, which started in August 2020.</li>
<li>The gross profit margin dropped sequentially while the operating loss ratio expanded. As I have noted in my last note and Webinar, <a href="https://www.smartkarma.com/insights/pin-duo-duo-pdd-us-four-charts-to-make-you-want-to-run" target="_blank" data-smartkarma-citation="insights:49333" rel="noopener">Pin Duo Duo (PDD US): Four Charts To Make You Want to Run</a> and <a href="https://www.smartkarma.com/insights/smartkarma-webinar-pinduoduo-pdd-us-know-when-to-fold" target="_blank" data-smartkarma-citation="insights:49910" rel="noopener">Smartkarma Webinar | Pinduoduo (PDD US): Know When to Fold</a> when revenue growth starts to slow the path to profit much be shown clearly.  </li>
</ul><p>I favor <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> and then <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> as they offer much more attractive value and less exposed to the domestic counterfeit claims risk and the potential fine for aggressive use of subsidies to acquire customers.  </p>

Pinduoduo (PDD US)'s share price fell 5.5% in the US market after the company reported a 239% revenue growth YoY.   I believe there are three reasons why the market punished the stock (indeed Meituan (3690 HK), Tencent (700 HK), and Vipshop Holdings (VIPS US) fell too, but Alibaba Group (BABA US) and JD.com Inc (ADR) (JD US)):
The company decided against disclosing the TTM GMV.  Why? 
The explosive revenue growth was partly due to the direct sales revenue which was recorded in only the last two quarters and the grocery delivery business, which started in August 2020.
The gross profit margin dropped sequentially while the operating loss ratio expanded. As I have noted in my last note and Webinar, Pin Duo Duo (PDD US): Four Charts To Make You Want to Run and Smartkarma Webinar | Pinduoduo (PDD US): Know When to Fold when revenue growth starts to slow the path to profit much be shown clearly.  
I favor Alibaba Group (BABA US) and then JD.com Inc (ADR) (JD US) as they offer much more attractive value and less exposed to the domestic counterfeit claims risk and the potential fine for aggressive use of subsidies to acquire customers.  

Pinduoduo (PDD US): Three Reasons Why PDD Fell 5.5% After a 239% Growth

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

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.

Equity Capital Markets

<p>Kanzhun, an online recruitment platform in China, aims to raise around US$800m in its US IPO. The company is backed by Tencent. Kanzhun runs BOSS Zhipin APP, which allows enterprise users and jobseekers to directly chat, thus, providing more convenience to both.</p><p>Kanzhun is the largest online recruitment platform in China, as measured by average MAU in 2020, according to the CIC Report. As of Mar 2021, it had 13.0m verified enterprise users, 6.3m verified enterprises, and 85.8m verified job seekers on its platform. For 12 months ended Mar 2021, it had 2.89m paid enterprise customers. Its average MAU (including job seekers and enterprise users) reached 24.0m in 1Q21.</p><p>The company nearly doubled its revenue in 2020 and its 1Q21 revenue was nearly triple that of 1Q20. Furthermore, while it remains loss making, it has been operating cash flow positive since 2020.</p>

Kanzhun, an online recruitment platform in China, aims to raise around US$800m in its US IPO. The company is backed by Tencent. Kanzhun runs BOSS Zhipin APP, which allows enterprise users and jobseekers to directly chat, thus, providing more convenience to both.Kanzhun is the largest online recruitment platform in China, as measured by average MAU in 2020, according to the CIC Report. As of Mar 2021, it had 13.0m verified enterprise users, 6.3m verified enterprises, and 85.8m verified job seekers on its platform. For 12 months ended Mar 2021, it had 2.89m paid enterprise customers. Its average MAU (including job seekers and enterprise users) reached 24.0m in 1Q21.The company nearly doubled its revenue in 2020 and its 1Q21 revenue was nearly triple that of 1Q20. Furthermore, while it remains loss making, it has been operating cash flow positive since 2020.

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<div>
<p>The final price is <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2021/0527/2021052700025.pdf" target="_blank" rel="noopener">HK$40.36</a> for <a href="https://www.smartkarma.com/entities/jd-logistics" target="_blank" data-smartkarma-citation="entities:31500:1" rel="noopener">JD Logistics (2618 HK)</a>, the logistics spin-off of <a href="https://www.smartkarma.com/entities/jd-com-inc" target="_blank" data-smartkarma-citation="entities:29043:1" rel="noopener">JD.com Inc. (9618 HK)</a>, which is towards the low-end of the HK$39.36-HK$43.36 IPO range. This will raise HK$24.6bn and give a market cap of HK$245.9bn - both figures before over-allotment.</p>
<p>Shares commence trading tomorrow.</p>
</div>
<div>
<p>Reportedly the retail proportion is 700x+ oversubscribed, with a grey price of HK$64/share, a 58% premium.</p>
</div>
<div>
<p>JD.com's shares are down 31% from its recent high in February after anti-trust regulators in China sought to overhaul the country's largest tech companies.  At the IPO price, JD logistics accounts for ~12% of JD.com's NAV.</p>
</div>
<div>
<p>More below the fold.</p>
</div>


The final price is HK$40.36 for JD Logistics (2618 HK), the logistics spin-off of JD.com Inc. (9618 HK), which is towards the low-end of the HK$39.36-HK$43.36 IPO range. This will raise HK$24.6bn and give a market cap of HK$245.9bn - both figures before over-allotment.
Shares commence trading tomorrow.


Reportedly the retail proportion is 700x+ oversubscribed, with a grey price of HK$64/share, a 58% premium.


JD.com's shares are down 31% from its recent high in February after anti-trust regulators in China sought to overhaul the country's largest tech companies.  At the IPO price, JD logistics accounts for ~12% of JD.com's NAV.


More below the fold.


JD Logistics (2618 HK): Priced Towards The Low End

China

Tencent Holdings Limited operates as an investment holding company. The Company, through its subsidiaries, provides Internet and mobile value-added services (VAS), online advertising, and e-commerce transactions. Tencent Holdings offers services to users worldwide.

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Tencent Holdings (ADR) (TCEHY US)

Tencent Macro Bull Support Met but Staring at 620 Pivot

Tencent (700 HK) 620 the hurdle/pivot to clear for a green light to avert a re test on the macro bull support at 560. Policy headwinds as China...

Thomas Schroeder

Tencent: Regulators Order Tencent to Set Up a Financial Holding Company

Several news media outlets report that the SAMR has ordered Tencent to establish a financial holding company to put together its finance related...

Shifara Samsudeen, FCMA, CGMA

Pinduoduo (PDD US): Three Reasons Why PDD Fell 5.5% After a 239% Growth

Pinduoduo reported 239% revenue growth in 1Q21, but the stock fell 5.5%. I offer three reasons why the stock fell: GMV, revenue, and loss margins.

Mitchell Kim

Kanzhun Pre-IPO - Bumble Meets Linkedin

Kanzhun, an online recruitment platform in China, aims to raise around US$800m in its US IPO. The company is backed by Tencent. Kanzhun runs BOSS...

Sumeet Singh

JD Logistics (2618 HK): Priced Towards The Low End

There are a lot of positive assumptions baked into J.D. Logistics price. I tilt more positive towards to JD.com. Despite the regulatory overhang,...

David Blennerhassett

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