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

<p>While a more cautious outlook is appropriate, as long as $77 holds (the September lows) we are constructive and would be buyers on a pullback. A move below $77 would start to get very concerning, and would leave $75 and the 200-day MA as last-ditch support. Considering the recent pullback we want to be sticking with areas that have continued to outperform in spite of recent broad market weakness. For that we look to the following leadership Sectors: <strong>Technology, Consumer Discretionary, Manufacturing, Materials, and Transportation</strong></p>

While a more cautious outlook is appropriate, as long as $77 holds (the September lows) we are constructive and would be buyers on a pullback. A move below $77 would start to get very concerning, and would leave $75 and the 200-day MA as last-ditch support. Considering the recent pullback we want to be sticking with areas that have continued to outperform in spite of recent broad market weakness. For that we look to the following leadership Sectors: Technology, Consumer Discretionary, Manufacturing, Materials, and Transportation

Overseas Chinese Equities, Aequitas Research

Ming Lu

Overseas Chinese Equities

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.

Event-Driven

<ul class="">
<li>Central government media announced that there was a virtual casino running on Douyu (DOYU).</li>
<li>Last year, other media announced Huya (HUYA) has the same illegal gambling problem.</li>
<li>We believe the authorities will start to investigate gambling on all live broadcast platforms.</li>
</ul>


Central government media announced that there was a virtual casino running on Douyu (DOYU).
Last year, other media announced Huya (HUYA) has the same illegal gambling problem.
We believe the authorities will start to investigate gambling on all live broadcast platforms.


Tencent (700 HK): Illegal Gambling Risk in Merger of Huya and Douyu

Equity Bottom-Up

<ul>
<li>Internet companies’ revenue increased strongly from May to August.</li>
<li>The growth rate of internet user base accelerated in 2Q20.</li>
<li>Weibo (WB)’s performance was still weak in 2Q20.</li>
<li>Jack Ma resigned as a board member of Alibaba.</li>
</ul>


Internet companies’ revenue increased strongly from May to August.
The growth rate of internet user base accelerated in 2Q20.
Weibo (WB)’s performance was still weak in 2Q20.
Jack Ma resigned as a board member of Alibaba.


China Internet Weekly (5Oct2020): Internet Revenue Overcame Pandemic, Internet User Base Accelerated

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

<div>
<p>Back on the 6 July, <a href="https://www.smartkarma.com/entities/sina-corp-china" target="_blank" data-smartkarma-citation="entities:22691:1" rel="noopener">Sina Corp (Class A) (SINA US)</a> <a href="http://ir.sina.com/index.php/static-files/69e95aee-2729-457f-be56-73628090b8ea" target="_blank" rel="noopener">announced</a> the receipt of a preliminary non-binding “going private” proposal from New Wave MMXV - a company controlled by its chairman/CEO Charles Chao - at US$41/share,  a ~20% premium to the average closing price during the 30 trading days prior to the announcement.</p>
<p>Yesterday, SINA announced it had <a href="http://ir.sina.com/static-files/de1ddd0f-354f-42de-9b33-b1bc414ab1b4" target="_blank" rel="noopener">entered</a> into an Agreement and Plan of Merger with New Wave pursuant to which New Wave will acquire all of the outstanding ordinary shares not owned at US$43.30/share (an 18.1% premium to the undisturbed price).</p>
<p>Despite the 5.6% bump to the initial non-binding proposal, the Offer price still looks light. However, Chao/New Wave controls ~61% of the voting power, and the merger requires two-thirds approval.</p>
<p>The merger is expected to close in the 1Q21. </p>
</div>
<div>
<p>As always, more below the fold.</p>
</div>


Back on the 6 July, Sina Corp (Class A) (SINA US) announced the receipt of a preliminary non-binding “going private” proposal from New Wave MMXV - a company controlled by its chairman/CEO Charles Chao - at US$41/share,  a ~20% premium to the average closing price during the 30 trading days prior to the announcement.
Yesterday, SINA announced it had entered into an Agreement and Plan of Merger with New Wave pursuant to which New Wave will acquire all of the outstanding ordinary shares not owned at US$43.30/share (an 18.1% premium to the undisturbed price).
Despite the 5.6% bump to the initial non-binding proposal, the Offer price still looks light. However, Chao/New Wave controls ~61% of the voting power, and the merger requires two-thirds approval.
The merger is expected to close in the 1Q21. 


As always, more below the fold.


IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

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.

<p><a href="https://www.smartkarma.com/entities/sina-corp-china" target="_blank" data-smartkarma-citation="entities:22691:1" rel="noopener">Sina Corp (Class A) (SINA US)</a> entered into a definitive agreement for going private transaction with New Wave MMXV Limited at a sweetened privatisation price of $43.30 per ordinary share, which is a marginal 5.6% increase above the initial privatisation price. New Wave is controlled by Mr Charles Chao, the Chairman and CEO.</p><p>We <a href="https://www.smartkarma.com/insights/sina-s-opportunistic-privatisation-bid" target="_blank" rel="noopener">had previously noted</a> that the initial privatisation proposal smacks of opportunism and a poor deal for long-term shareholders. The improved terms remain a poor deal for long-term shareholders particularly as the China internet sector has re-rated (in terms of CY2021 P/E rating) since the announcement of the initial proposal. Also, SINA’s market cap implied by the improved privatisation bid remains below the value of SINA’s stake in <a href="https://www.smartkarma.com/entities/weibo-corp-adr" target="_blank" data-smartkarma-citation="entities:3826:1" rel="noopener">Weibo Corp (Adr) (WB US)</a>. </p><div class="content-highlight"><p>Nevertheless, the privatisation will likely succeed as the Chairman (primarily through New Wave) owns 61.2% of the aggregate voting power, which a just short of the two-thirds voting power threshold. To succeed, shareholders holding a combined 5.5% of the voting power (12.0% of ordinary shares) need to support the privatisation. The gross spread to the offer price at the last close is 1.8%. </p></div>

Sina Corp (Class A) (SINA US) entered into a definitive agreement for going private transaction with New Wave MMXV Limited at a sweetened privatisation price of $43.30 per ordinary share, which is a marginal 5.6% increase above the initial privatisation price. New Wave is controlled by Mr Charles Chao, the Chairman and CEO.We had previously noted that the initial privatisation proposal smacks of opportunism and a poor deal for long-term shareholders. The improved terms remain a poor deal for long-term shareholders particularly as the China internet sector has re-rated (in terms of CY2021 P/E rating) since the announcement of the initial proposal. Also, SINA’s market cap implied by the improved privatisation bid remains below the value of SINA’s stake in Weibo Corp (Adr) (WB US). Nevertheless, the privatisation will likely succeed as the Chairman (primarily through New Wave) owns 61.2% of the aggregate voting power, which a just short of the two-thirds voting power threshold. To succeed, shareholders holding a combined 5.5% of the voting power (12.0% of ordinary shares) need to support the privatisation. The gross spread to the offer price at the last close is 1.8%. 

SINA Receives a Cursory Bump to the Privatisation Price

China

Weibo Corp is a social media platform for people to create, distribute and discover Chinese-language content.  The Company offers users public self-expression in real time with a powerful platform for social interaction, as well as content aggregation and distribution.

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Weibo Corp (WB US)

Cautiously Optimistic on Global Equities

We are constructive on global equities and would be buyers on a pullback. A move below $77 would start to get very concerning, and would leave $75...

Vermilion Research

Tencent (700 HK): Illegal Gambling Risk in Merger of Huya and Douyu

Central government media released a virtual casino on Douyu. Last year, other media released Huya has the same illegal gambling problem. We...

Ming Lu

China Internet Weekly (5Oct2020): Internet Revenue Overcame Pandemic, Internet User Base Accelerated

Internet companies’ revenue increased strongly from May to August. The growth rate of internet user base accelerated in 2Q20. Weibo (WB)’s...

Ming Lu

SINA Corp: Offer Firmed. Price Sweetened

Sina Corp (Class A) (SINA US) looks sets to join the growing list of Chinese companies seeking to delist in the US and relist, ostensibly in Hong...

David Blennerhassett

SINA Receives a Cursory Bump to the Privatisation Price

SINA entered into a definitive agreement for going private transaction with New Wave MMXV Limited at a sweetened privatisation price of $43.30 per...

Arun George

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