JL Warren Capital

JL Warren Capital LLC is a leading independent equity research firm focused on Chinese companies and listed multinationals in China. We employ a bottom-up research approach that takes great care to avoid the acquisition of material non-public information. Through investigative due diligence including channel surveys and interviews, our research helps clients to pinpoint the dislocations in the market.

Investment Advisors

Investment Advisors, JL Warren Capital

Junheng Li

Thematic (Sector/Industry)

Colombia Consumer discretionary / Thematic (Sector/Industry)

<p>We advise clients to cut their long exposure to China as domestic macro downside, currency risk and the US-China tensions intensify.  These risks are largely secular, and thus cannot be remedied by traditional cyclical policy tools such as RRR cuts and fiscal stimulus.  The market clearly is showing resistance to conventional policy interventions, including the rate cut this weekend.   We have significantly adjusted the rating composition of stocks in our coverage to express our bearish view on future corporate earnings coming out from China.  Among 49 stocks in our coverage universe, we recommend 5 longs (12% of total), vs. 18 shorts (37%).  25 stocks (51%) are do-nothing, meaning that the current share prices are largely in line with stock fundamentals and sentiment. </p>

We advise clients to cut their long exposure to China as domestic macro downside, currency risk and the US-China tensions intensify.  These risks are largely secular, and thus cannot be remedied by traditional cyclical policy tools such as RRR cuts and fiscal stimulus.  The market clearly is showing resistance to conventional policy interventions, including the rate cut this weekend.   We have significantly adjusted the rating composition of stocks in our coverage to express our bearish view on future corporate earnings coming out from China.  Among 49 stocks in our coverage universe, we recommend 5 longs (12% of total), vs. 18 shorts (37%).  25 stocks (51%) are do-nothing, meaning that the current share prices are largely in line with stock fundamentals and sentiment. 

Market Unfazed by China’s RRR Cut, RMB Depreciation, Escalating US-China Tension Beyond Trade