Consumer Analyst / Channel Surveillance Specialist, Trudence Capital Advisors

Pranav Bhavsar

Consumer Analyst / Channel Surveillance Specialist

ASA Capital Management

ASA Capital Management is a boutique Research and Investment Advisory firm focusing on primary research in India. ASA provides bespoke research services to Institutional Clients with a focus on due diligence backed with primary research, Field Trips & Channel Checks.

Thematic (Sector/Industry)

The focus of this Insight is the Food Retail business in India, that is witnessing intense competition. The food retail or the grocery retail business is attractive because of the high repeat frequency compared to other forms of retail where market share is supposedly shifting from Kirana stores to brick and motor and online retailers and recently, also attracting food delivery apps, that are trying to optimise their delivery fleet via offering grocery deliveries. 
We visit EasyPay, a 5-year-old company started by Nilay Patel.  EasyPay offers solutions to help unorganised small mom and pop stores called "Kirana Stores" in India. Our visit is aimed at understanding the emerging O2O (Online to Offline) theme that is shaping up Indian Retail and Payments Industry,  and has now also reached the Kirana stores. The current industry dynamics indicate a share of market for all players i.e. Offline Retailers, Online Stores and even Kirana Stores that adapt to newer forms of retail using technology and Data often referred to as "Smart Retail". It would, be too early to write off the ability of Kirana stores to fight back modern retail.

The focus of this Insight is the Food Retail business in India, that is witnessing intense competition. The food retail or the grocery retail business is attractive because of the high repeat frequency compared to other forms of retail where market share is supposedly shifting from Kirana stores to brick and motor and online retailers and recently, also attracting food delivery apps, that are trying to optimise their delivery fleet via offering grocery deliveries. 
We visit EasyPay, a 5-year-old company started by Nilay Patel.  EasyPay offers solutions to help unorganised small mom and pop stores called "Kirana Stores" in India. Our visit is aimed at understanding the emerging O2O (Online to Offline) theme that is shaping up Indian Retail and Payments Industry,  and has now also reached the Kirana stores. The current industry dynamics indicate a share of market for all players i.e. Offline Retailers, Online Stores and even Kirana Stores that adapt to newer forms of retail using technology and Data often referred to as "Smart Retail". It would, be too early to write off the ability of Kirana stores to fight back modern retail. 

Visit Note | The Case For "Kirana" Stores & Their Fight with Modern Retail

Equity analyst UK & Europe, UK Long Short

Peter Toeman

Equity analyst UK & Europe

Accelerating Tomorrow’s Independent Research

Boost Research

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Equity Bottom-Up

The political decision to exit the European Union has unpredictable negative consequences for both the UK economy and stockmarket.  A tough market background and Brexit concerns have reduced in-flows into Wealth and Investment Management companies. This growth hiatus could last for some time.  
<h2>Hargreaves Lansdown: What does it do ?</h2>
Hargreaves Lansdown is a wealth manager and private client stockbroker with a market value of  GBP8bn. It provides the UK's largest direct to investor platform administering £86bn of investments for more than 1.1m active clients
<h2>Why is it in the Short portfolio ?</h2>
Interim figures for the 6 months to December 2018, (published 29th Jan)  mark a deterioration in operating performance brought about by adverse market conditions. Assets under administration declined and net new business was 25% down on the prior year. Earnings per share increased 4%. The share price declined 6% on the day of the results but has subsequently been stable leaving the group on a forward multiple of over 30x. Unless the retail investment market recovers quickly this premium rating may prove vulnerable. 
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/080/444/original/port%202.PNG?1551297124" class="editor-image img-responsive" data-smartkarma-image-id="80444"></figure>
<div class="content-caption">S&amp;P Capital IQ</div>

The political decision to exit the European Union has unpredictable negative consequences for both the UK economy and stockmarket.  A tough market background and Brexit concerns have reduced in-flows into Wealth and Investment Management companies. This growth hiatus could last for some time.  
Hargreaves Lansdown: What does it do ?
Hargreaves Lansdown is a wealth manager and private client stockbroker with a market value of  GBP8bn. It provides the UK's largest direct to investor platform administering £86bn of investments for more than 1.1m active clients
Why is it in the Short portfolio ?
Interim figures for the 6 months to December 2018, (published 29th Jan)  mark a deterioration in operating performance brought about by adverse market conditions. Assets under administration declined and net new business was 25% down on the prior year. Earnings per share increased 4%. The share price declined 6% on the day of the results but has subsequently been stable leaving the group on a forward multiple of over 30x. Unless the retail investment market recovers quickly this premium rating may prove vulnerable. 

S&amp;P Capital IQ

Hargreaves Lansdown (HL/:LN) No Flow, No Go

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

MSCI Emerging Markets Index / Technical Analysis

Big-picture technicals offer a compelling outlook for equities -- in the long-run. Despite arguably stretched trends, especially in the U.S. and EM, one indicator in particular keeps us optimistic: monthly charts.  What is clear right now is: (1) Europe is on the doorstep of breaking above secular resistance; (2) Japan is breaking out above secular resistance; (3) and EM already has. Speaking of EM, we view this as the place to be, or overweight, in 2018. The EM/EAFE’s 20-year chart (below) reveals an in-progress trend reversal (which developed at a secular trendline) in favor of EM.In today’s report we review every global sector, highlighting actionable stocks within each.

Big-picture technicals offer a compelling outlook for equities -- in the long-run. Despite arguably stretched trends, especially in the U.S. and EM, one indicator in particular keeps us optimistic: monthly charts.  What is clear right now is: (1) Europe is on the doorstep of breaking above secular resistance; (2) Japan is breaking out above secular resistance; (3) and EM already has. Speaking of EM, we view this as the place to be, or overweight, in 2018. The EM/EAFE’s 20-year chart (below) reveals an in-progress trend reversal (which developed at a secular trendline) in favor of EM.In today’s report we review every global sector, highlighting actionable stocks within each.

Equity Long/Short Analyst. Ex-China Property IR

Viki W.K. Li

DFI Retail Group Holdings / Equity Bottom-Up

<div class="content-highlight">Complacency makes Dairy Farm a perfect short</div><a href="https://www.smartkarma.com/entities/7427" target="_blank" data-smartkarma-citation="entities:7427:1">Dairy Farm Intl Hldgs Ltd (DFI SP)</a> has enjoyed being an oligopoly in Hong Kong and Singapore’s supermarket/hypermarket and personal health/beauty product industries for years. Complacency led to a slow reaction to consumer behaviour changes and loss of market share to local competitors in the past few years. Now, that complacency will show them unprepared for Amazon and Alibaba's arrival!Dairy Farm’s Hong Kong and Singapore businesses are about to see impending e-commerce disruption that will cause sales declines and margin erosion for years to come.Separately, on 23 June, the Company announced the change of Group Chief Executive.

Complacency makes Dairy Farm a perfect shortDairy Farm Intl Hldgs Ltd (DFI SP) has enjoyed being an oligopoly in Hong Kong and Singapore’s supermarket/hypermarket and personal health/beauty product industries for years. Complacency led to a slow reaction to consumer behaviour changes and loss of market share to local competitors in the past few years. Now, that complacency will show them unprepared for Amazon and Alibaba's arrival!Dairy Farm’s Hong Kong and Singapore businesses are about to see impending e-commerce disruption that will cause sales declines and margin erosion for years to come.Separately, on 23 June, the Company announced the change of Group Chief Executive.

Dairy Farm International: Who Moved My Cheese?

Global TMT, Consumer, Korea, Deep Fundamental

Julian Yoon

Hypermarkets in Korea experienced a golden age of growth driven by strong SSSg trend and store expansion through 2011.  In 2012, the Korean government enacted protectionist legislation that forced hypermarkets to close two Sundays (for some stores, two Wednesdays) a month.  The legislation was enacted in order to protect traditional retail/mom and pops.  As it took about 2-3 years for the mandatory closures to fully scale up across all of the hypermarket operators' stores, many investors assumed…

Hypermarkets in Korea experienced a golden age of growth driven by strong SSSg trend and store expansion through 2011.  In 2012, the Korean government enacted protectionist legislation that forced hypermarkets to close two Sundays (for some stores, two Wednesdays) a month.  The legislation was enacted in order to protect traditional retail/mom and pops.  As it took about 2-3 years for the mandatory closures to fully scale up across all of the hypermarket operators' stores, many investors assumed…

Korea Consumer: Are Hypermarkets a Dying Breed? On the Ground in Seoul.

United Kingdom

Tesco plc is a food retailer.  The Group operates stores in the United Kingdom, Republic of Ireland, Czech Republic, Hungary, Poland, Slovakia, Turkey, Japan, Malaysia, South Korea, China, Thailand, and the United States.

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Tesco PLC (TSCO LN)

Visit Note | The Case For "Kirana" Stores & Their Fight with Modern Retail

The focus of this Insight is the Food Retail business in India, that is witnessing intense competition. The food retail or the grocery retail...

Pranav Bhavsar

Hargreaves Lansdown (HL/:LN) No Flow, No Go

The political decision to exit the European Union has unpredictable negative consequences for both the UK economy and stockmarket. A tough market...

Boost Research

Global Equity Strategy: Overweight EM

Big-picture technicals offer a compelling outlook for equities -- in the long-run. Despite arguably stretched trends, especially in the U.S. and...

Vermilion Research

Dairy Farm International: Who Moved My Cheese?

Complacency makes Dairy Farm a perfect shortDairy Farm Intl Hldgs Ltd (DFI SP) has enjoyed being an oligopoly in Hong Kong and Singapore’s...

Viki W.K. Li

Korea Consumer: Are Hypermarkets a Dying Breed? On the Ground in Seoul.

Hypermarkets in Korea experienced a golden age of growth driven by strong SSSg trend and store expansion through 2011. In 2012, the Korean...

Julian Yoon

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