Chief Executive Officer, Emmer Capital Partners Limited

Manishi Raychaudhuri

Chief Executive Officer

Emmer Capital Partners Limited

Emmer Capital Partners is an Asia Pacific focused financial advisory firm engaging in strategic financial asset allocation advice, bespoke thematic research and advising early-stage companies and connecting them to investors. Emmer Capital provides macro-economic and multi-asset investment strategy inputs to institutions, family offices, private wealth managers, private equity, and corporate boards directly and through independent research platforms. Emmer Capital also advises a wide range of startup companies on fund raising and business strategy. Emmer Capital's active engagement with the print and electronic media reaches a broad spectrum of investors across the globe.

Cross Asset Strategy

<ul>
<li>As the trade war unfolds, more market volatility seems likely. In the 2018 episode China and Korea drove Asian drawdown. But today, China exports far less to America than earlier.</li>
<li>The 2025 trade war is more expansive, with larger tariffs being imposed. In 2018, the defensives and non-tradables outperformed. Similar sectors, but not the same markets could do well now.</li>
<li>Our Capital Preservation Basket presents eight cheap stocks with domestic revenue exposure and earnings estimate increases over past six months. They are from HK/China (5), Philippines (2) and Korea (1).</li>
</ul>


As the trade war unfolds, more market volatility seems likely. In the 2018 episode China and Korea drove Asian drawdown. But today, China exports far less to America than earlier.
The 2025 trade war is more expansive, with larger tariffs being imposed. In 2018, the defensives and non-tradables outperformed. Similar sectors, but not the same markets could do well now.
Our Capital Preservation Basket presents eight cheap stocks with domestic revenue exposure and earnings estimate increases over past six months. They are from HK/China (5), Philippines (2) and Korea (1).


Asian Equities: Preserving Capital in 2025 – Parallels and Contrasts from 2018

<ul>
<li>Asian equities are at record valuation discount to that of US. Slightly lower earnings growth and ROE forecasts for Asia don't justify the steep discounts, we believe.</li>
<li>However, EPS estimates are a concern. Asia's consensus EPS estimate for 2025 has declined 9% over past 10 months, dragged down by China and Korea. USA's has remained virtually flat.</li>
<li>Based on our themes of continued AI spending, China's consumption recovery and "unloved India", our top picks remain TSMC, Tencent, Yum China, HDFC Bank and SK Hynix.</li>
</ul>


Asian equities are at record valuation discount to that of US. Slightly lower earnings growth and ROE forecasts for Asia don't justify the steep discounts, we believe.
However, EPS estimates are a concern. Asia's consensus EPS estimate for 2025 has declined 9% over past 10 months, dragged down by China and Korea. USA's has remained virtually flat.
Based on our themes of continued AI spending, China's consumption recovery and "unloved India", our top picks remain TSMC, Tencent, Yum China, HDFC Bank and SK Hynix.


Asian Equities: US Exceptionalism Vs Asian Valuation Allure

Asian Hedge Fund Manager, Long Short Equity, Macro

David Mudd

<ul>
<li>During Hong Kong's market correction during November, we noticed that the Put/Call spread stayed below 1 and the skew moved to its lowest level in 3 years both bullish signals.</li>
<li>
<a href="https://www.smartkarma.com/entities/yum-china-holdings-inc-0533692c-6dae-4014-baa1-ed0b050638f2" target="_blank" data-smartkarma-citation="entities:29259:1" rel="noopener">Yum China Holdings (9987 HK)</a> share price had a golden cross breakout on December 3, as the casual dining sector in China shows growth going into next year.
</li>
<li>
<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> had a breakout from a falling wedge pattern relative to MXEF.  The gap up in the share price and momentum signals confirms the uptrend.
</li>
</ul>


During Hong Kong's market correction during November, we noticed that the Put/Call spread stayed below 1 and the skew moved to its lowest level in 3 years both bullish signals.

Yum China Holdings (9987 HK) share price had a golden cross breakout on December 3, as the casual dining sector in China shows growth going into next year.


MINISO Group Holding (9896 HK) had a breakout from a falling wedge pattern relative to MXEF.  The gap up in the share price and momentum signals confirms the uptrend.



Technically Speaking, Breakouts and Breakdowns: HONG KONG (DECEMBER 5)

External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Incorporated in Hong Kong, supported by the mainland and targeting in global market, CMB International Capital Corporation Limited (“CMBI”) is an integrated financial institution providing comprehensive and professional services. As a wholly-owned subsidiary of China Merchants Bank ("CMB"), by leveraging on the Group’s synergy and coordination in domestic and overseas markets, as well as CMB’s strong resources and outstanding social reputation, CMBI and its subsidiaries have been actively implementing diversified business strategies and set up an overall layout of main business segments including Corporate Finance, Asset Management, Wealth Management, Global Markets and Structured Finance, etc. Adhering to the philosophy of “being clients oriented and increasing our own values by the way of creating value for clients”, CMBI endeavors to provide quality and integrated financial services to institutional, corporate and individual customers both domestic and overseas including Hong Kong IPO sponsorship and underwriting, share placement and rights issue for listed companies, financial advisors, bonds issuance services, asset management, direct investment, wealth management, equity sales and trading, etc.

Thematic (Sector/Industry)

<ul><li>Upgrade our rating to OUTPERFORM on the consumer discretionary sector.</li><li>The foot traffic of the 2024 10-1 National Day holidays was strong (recovery rate has improved vs Mid-autumn and Dragon Boat Festival) but the spending power remained fairly week.</li><li>Even though the retail sales growth was still under pressure, a sequential improvement was observed compared with Sep 2024, and this should be able to support the further re-rating of the sector valuation. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Upgrade our rating to OUTPERFORM on the consumer discretionary sector.The foot traffic of the 2024 10-1 National Day holidays was strong (recovery rate has improved vs Mid-autumn and Dragon Boat Festival) but the spending power remained fairly week.Even though the retail sales growth was still under pressure, a sequential improvement was observed compared with Sep 2024, and this should be able to support the further re-rating of the sector valuation. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Consumer Discretionary - Sequential Improvement May Support Re-Rating

<ul>
<li>Although the tech sector in Hong Kong has surged over the last couple of weeks there appears to be minimal short covering in US-listed China tech names.</li>
<li>The performance of the "Magnificent 5" China tech names has led the rally as we outlined in <a href="https://www.smartkarma.com/insights/hong-kong-the-glass-is-half-full-time-to-buy-beta" target="_blank" data-smartkarma-citation="insights:134396" rel="noopener">Hong Kong: The Glass Is Half Full, Time to BUY Beta</a> .</li>
<li>The combination of of large outstanding short positions and a significant underweight of HK/China in international funds will lead to further upside in the tech sector.</li>
</ul>


Although the tech sector in Hong Kong has surged over the last couple of weeks there appears to be minimal short covering in US-listed China tech names.
The performance of the "Magnificent 5" China tech names has led the rally as we outlined in Hong Kong: The Glass Is Half Full, Time to BUY Beta .
The combination of of large outstanding short positions and a significant underweight of HK/China in international funds will lead to further upside in the tech sector.


China

Yum China operates and franchises a diverse portfolio of restaurant brands across the People's Republic of China, including KFC, Pizza Hut, Taco Bell, Lavazza, Little Sheep, and Huang Ji Huang. The company also provides online food delivery services. Yum China Holdings, Inc. was spun off from Yum! Brands in 2016 and is headquartered in Shanghai, China.

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Yum China (9987 HK)

Asian Equities: Preserving Capital in 2025 – Parallels and Contrasts from 2018

Volatility could rise as trade war escalates. But China exports much less to US now, Korea & Taiwan much more. Our Capital Preservation Basket has...

Manishi Raychaudhuri

Asian Equities: US Exceptionalism Vs Asian Valuation Allure

Asia's slightly lower EPS growth & ROE than US's don't justify the huge discount the former trades at. EPS est decline is a worry though. Our top...

Manishi Raychaudhuri

Technically Speaking, Breakouts and Breakdowns: HONG KONG (DECEMBER 5)

Hong Kong show decreased volatility and increased mainland buying continue since the US election. YUM China share price broke out (golden...

David Mudd

Consumer Discretionary - Sequential Improvement May Support Re-Rating

Upgrade our rating to OUTPERFORM on the consumer discretionary sector. The foot traffic of the 2024 10-1 National Day holidays was strong

CMB International

HK/China: THE BIG SHORT (SQUEEZE)

Even though HK/China tech names have surged, short positions have not covered. The large underweight position in HK/China by international funds...

David Mudd

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Asian Equities: Preserving Capital in 2025 – Parallels and Contrasts from 2018

​Volatility could rise as trade war escalates. But China exports much less to US now, Korea & Taiwan much more. Our Capital Preservation Basket has...

Manishi Raychaudhuri

Asian Equities: US Exceptionalism Vs Asian Valuation Allure

​Asia's slightly lower EPS growth & ROE than US's don't justify the huge discount the former trades at. EPS est decline is a worry though. Our top...

Manishi Raychaudhuri

Technically Speaking, Breakouts and Breakdowns: HONG KONG (DECEMBER 5)

Hong Kong show decreased volatility and increased mainland buying continue since the US election. YUM China share price broke out (golden...

David Mudd

Consumer Discretionary - Sequential Improvement May Support Re-Rating

Upgrade our rating to OUTPERFORM on the consumer discretionary sector. The foot traffic of the 2024 10-1 National Day holidays was strong

CMB International

HK/China: THE BIG SHORT (SQUEEZE)

Even though HK/China tech names have surged, short positions have not covered. The large underweight position in HK/China by international funds...

David Mudd

Volatility could rise as trade war escalates. But China exports much less to US now, Korea & Taiwan much more. Our Capital Preservation Basket has...

Asia's slightly lower EPS growth & ROE than US's don't justify the huge discount the former trades at. EPS est decline is a worry though. Our top...