In today’s briefing:
- Full Circulation 2022 Update: China Huarong, YiChang HEC ChangJiang
- Good Morning Japan | Powell in Focus: Big Bets off the Table
- China NEV Outlook: Life After Subsidies Is Still Beautiful
- Global Emerging Markets: Reporting Season Summary, 3Q2022
- Asia Gaming: Macau Renews 6 Concessionaires Licenses Building a Bull Catalyst into Sector Stocks
Full Circulation 2022 Update: China Huarong, YiChang HEC ChangJiang
- To date, 52 companies listed in Hong Kong have sought the conversion of their PRC domestic (and unlisted foreign shares) into H-shares.
- This mechanism, ostensibly, enables founders or major shareholders holding unlisted domestic shares to float (and sell) shares, improving a company’s corporate governance and stock liquidity, ultimately increasing a company’s valuation.
- Or in the case of China Huarong Asset Management (2799 HK), the conversion restored its minimum public float.
Good Morning Japan | Powell in Focus: Big Bets off the Table
- Good Morning Japan: We strive to provide the best macro, stock and thematic overnight news that impacts your trading day in Japan. FOLLOW/LIKE TO KEEP ABREAST.
- OVERSEAS: Powell in focus – little risk appetite; Semi 2023 forecast; China to vaccinate seniors – drives China-listed rally; iPhone Production hit up to ~$8bn;
- JAPAN: USDJPY ¥138.69; NKY Fut -0.2% ahead of Powell speech; JGB 10Y hit 0.25%-BOJ shift soon ?; Sony =>the Metaverse; JP Bank invests ¥100bn in start-ups; Nomura cuts costs
China NEV Outlook: Life After Subsidies Is Still Beautiful
- Despite the remaining EV subsidies finishing next year, we expect demand to be relatively unimpacted
- Battery supply issues should be eased with Covid lockdowns easing and new capacity expansions
- >100 new models due for launch in 2023E vs ~70 in 2022 and will keep potential customers and market excited in the sector
Global Emerging Markets: Reporting Season Summary, 3Q2022
- The 200 largest weighted companies in the GEM index reported average EPS growth of +12.8%y/y for 3Q22-to-date, a significant slowdown from what was reported for 2Q22.
- 60% of companies delivered positive sales surprise, same as in 2Q22, whilst 65% delivered positive EPS surprise, up from 56% in 2Q22.
- Historically, there has been a significant difference in relative share price performance between the largest positive versus negative surprise generators, for 3 months after the reporting date.
Asia Gaming: Macau Renews 6 Concessionaires Licenses Building a Bull Catalyst into Sector Stocks
- Lingering bearish speculation about Beijing pressures for Macau to oust US based gaming operators proved wrong. All were renewed.
- Genting’s last minute wild card application was rejected indicating Macau has opted for long term stability with existing operators.
- One major headwind remains: China’s travel bans with no duration predictable despite growing public unrest due to growing damage to macro economy and public income streams.
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