Alpha Edge Investing

"Investors operate with limited funds and limited intelligence, they don’t need to know everything. As long as they understand better than others, they have an edge.” – George Soros



BB: Bitcoin Rallies After Weekend Tumble as ETF Anticipation Builds

By Joanna Ossinger October 18, 2021  Largest cryptocurrency fell to about $59,000 over weekend  Binance Coin retakes third-largest ranking by market value Bitcoin rallied early Monday after falling over the weekend, ahead of an anticipated U.S. exchange-traded fund approval.  The largest cryptocurrency gained as much as 5.5% and was trading at about $61,987 as of 9:03 a.m. […]

BB: China Opens Stock, Commodity Derivatives to Foreign Investors

Bloomberg News October 18, 2021  China is opening financial market to attract more investments  Opening comes amid heightened political, market tensions China’s regulator expanded the investment scope for foreign investors, adding key commodity and stock market derivatives in the latest move to open its financial markets even as Beijing’s crackdown on a broad section of […]

Morgan Stanley’s Positioning Strategy for China

We expect a longer and more profound impact from the current regulatory cycle on valuations and Equity Risk Premium (ERP) for China’s equity market than has occurred in similar past cycles: Three key reasons make us convinced that Chinese equity market valuation will likely fall towards our June 2022 base case P/E target of 13x […]

BB: China Property and Energy Crises Deliver Blow to GDP Growth

Bloomberg News October 18, 2021  Growth set to slow further after weakening to 4.9% in 3Q  Beijing signals it’s in no rush to boost economic stimulus China’s housing slump and electricity shortages dragged down economic growth last quarter, with signs there will be more pain to come as the country heads into winter and property […]

SCMP: International airlines pivot away from Asia amid frustration with slow reopenings and zero-Covid approach of Hong Kong, mainland China

Air travel in much of the world is taking off once more, but divisions in Asia over how to approach the pandemic have grounded ambitions in this part of the world Some airlines, United and Lufthansa among them, are responding by redeploying planes from Asian to transatlantic routes. Hopefully, they say, it’s a short-term measure. […]

BB: Apple’s iPhone Partner Foxconn Unveils First Electric Vehicles

By Debby Wu October 18, 2021  Electronics manufacturer is contender for Apple car production  Company unveils SUV, sedan and bus concept vehicles in Taipei Foxconn Technology Group unveiled its first electric vehicles, a milestone that could boost the Taiwanese electronics manufacturer’s credentials as a serious bidder for Apple Inc.’s secretive automotive project. The SUV and sedan models […]

BB: Down Is Still Up for Foreign Investors Piling Into China

By Nikos Chrysoloras and Abhishek Vishnoi October 17, 2021  Chinese equities underperformed after record bullish bets  Debacle highlights challenge of forecasting China’s direction Like the demise of Enron Corp. and the collapse of Lehman Brothers, the debacle at China Evergrande Group was inevitable to some only in retrospect. As recently as June 8, analysts at JPMorgan Chase upgraded their rating […]

BB: Goldman Wins Nod for Full Ownership of China Securities Firm

By Cathy Chan and Candice Zachariahs December 8, 2020, 12:21 PM GMT+8 Updated on October 18, 2021  Goldman Sachs has hired 116 this year in mainland China  Approval brings firm closer to ‘one Goldman’ in all markets Goldman Sachs Group Inc. won approval to take 100% ownership of its securities joint venture in China, a key step to expand in […]

BB: China Channels Bernanke With Assurances Evergrande Is Contained

By Sofia Horta e Costa October 18, 2021  Central bank official says situation is ‘controllable’  Financial markets show few signs of 2008-like crisis For months in the runup to the 2008 financial crisis, banking heavyweights from Federal Reserve Chair Ben Bernanke on down said the turmoil in subprime mortgages would be “contained.” That phrase is now making […]

SCMP: Hong Kong stocks weaken as China’s economic reports dent risk appetite while tech firms struggle on regulatory concerns

Hang Seng Index declines 0.3 per cent as financial and tech stocks pace losses China’s economy grew less than expected 4.9 per cent last quarter, while factory production cooled last month amid a power crunch Iris Ouyang 18 Oct 2021 Hong Kong stocks slipped as risk appetite waned after official reports showed China’s economy slowed more than […]

Maybank IB: CTOS Digital Berhad – BUY TP RM2.34 (Previous RM2.17)

3Q FY21: Results ahead Maintain BUY, raising TP to MYR2.34 CTOS Digital 9M21 core net profit came ahead of our/consensus FY21E expectations, making up 85%/86% respectively. We remain upbeat on the overall credit bureau market in Malaysia, with CTOS’ growth potential further supported by strong market positioning and attractive verticals – reiterate BUY with higher […]

Maybank IB: Petronas Chemicals – Upgrade to BUY TP RM9.70 (Previous RM8.76)

Perfectly poised for a stellar FY21 Improving FY22 outlook; Upgrade to BUY We have turned positive on PCHEM’s near-to-mid-term earnings outlook, on the back of sustained price firmness in the F&M segment. The supply constraints in the global fertiliser market are not expected to ease until mid-2022 and as such, we raise our FY21-23 EPS […]

DBS: US earnings take the spotlight

Chief Investment Office 18 Oct 2021 US Stocks notched their best week since July as solid corporate earnings and a surprise increase in retail sales spurred a rally in companies that are more likely to benefit from an economic rebound. Treasuries fell. Equities rose on Friday (15 October) even after data showing that consumer sentiment […]

OIR: Market Pulse – Global Industrials & Utilities

Market Commentary US stocks enjoy best week since July on strong corporate earnings; Asia sees gains too • The US stock market rose on Friday, as earnings continued to impress and retail sales data beat expectations. • In addition to better-than-expected earnings from Goldman Sachs on Friday — sending the bank’s stock up 3.8% to […]

OIR: Weekly S-REITS Tracker

Key Takeaways • The latest report published by the Intergovernmental Panel on Climate Change (IPCC) has raised alarm bells over the widespread impact of global warming. This is significant for the real estate sector, given that the buildings and buildings construction industries collectively accounted for 38% and 35% of global energy-related CO2 emissions and total […]

CIMB: Singapore Economics Update

Sep 2021 Trade NODX growth accelerated to 12.3% yoy in Sep 21, beating our and consensus estimates, accompanied by a sequential 1.3% mom SA growth. Global chip shortages buoyed electronics’ 14.4% yoy growth, with ICs and diodes & transistors, contributing to over 50% of electronic growth this year. Petrochemicals make up nearly 30% of total […]

UOBKH: Civmec (Initiate Coverage) – BUY TP $0.98

Leading Contractor With Huge Orderbook In Defence And Commodity Sectors Civmec is on track for record earnings in FY22 (+18% yoy) as it delivers a A$1b orderbook for clients in the defence and commodity sectors. We believe the market has overlooked the huge potential of its defence business, which just started in FY21 and has […]

DBS: Ganfeng Lithium – BUY TP HK$220

3Q2021 GP better than expected (+ve) 9M2021 net profit increased to at least RMB2,082m or 530% y-o-y, and account for 75% of our full year estimate.  The results came in better than expected in view of higher products price and products margin to be realised. 3Q2021 net profit increased 425% y-o-y to RMB915m and largely […]

DBS: ZTE Corp – BUY TP HK$36.90/ RMB55.40

News Alert: Expect 3Q21 earnings to increase by 78%-125% y-o-y ZTE expect 3Q21 earnings to increase by 78%-125% y-o-y to Rmb1.5bn–Rmb1.9bn, according to its preliminary results 3Q21 preliminary earnings is above market expectations of Rmb1.5bn and 9M21 preliminary earnings accounted for 78%-84% of market’s full year estimation Expect positive share price reaction What’s New – […]

Suntec REIT: MICE revival begins with gaming events

MICE events are unaffected by the current Stabilization Phase Event size limit remains at up to 1000 fully vaccinated participants per session Two gaming events (Gamescom Asia 2021 and Gaming Matters 2021) have kicked started the first MICE events since the vaccinated travel lanes were expanded Held at the Suntec Convention & Exhibition Centre over […]

UOBKH: Propnex – BUY TP $1.97

Bullish Update With Earnings Momentum To Continue Into 2022 PropNex provided a bullish near to medium term update on its business and earnings prospects at the Asian GEMS conference. It does not believe that 2021 will be its peak earnings and that over the next few quarters, it will be able to maintain its recentearnings […]

UOBKH: Singapore REITs – Overweight

S-REITs Bi-Weekly Updates (1-15 Oct 21) We expect the surge in daily COVID-19 cases to peak in October and stabilise thereafter. Thus, we advocate accumulating reopening plays during this month of heightened uncertainty and volatility. BUY hospitality REITs ART (Target: S$1.16) and FEHT (Target: S$0.71). BUY retail REITs FCT (Target: S$3.06) and LREIT (Target: S$1.01). […]

UOBKH: ARA LOGOS Logistics Trust – Accept Offer

Financial Prowess Through Merger To Enhance Scale ESR REIT has offered to acquire all units of ALLT for S$0.095 in cash and 1.6765 new ESR REIT units. The merger more than doubles total assets to S$5.4b, enabling ALLT to leapfrog from the 19th position to become the ninth-largest S-REIT. New sponsor ESR Group provides New […]

UOBKH: Retail Market Monitor – ARA LOGOS, Propnex, China Education Sector, Yoma, CSE Global

MARKET NEWS US stocks were higher after the close on Friday, as gains in the consumer discretionary, financials and industrials sectors led shares higher. At the close of the NYSE, the DJIA rose 1.09% while the S&P 500 index gained 0.75%, and the NASDAQ Composite index advanced 0.50%. Falling stocks outnumbered advancing ones on the […]

DBS: HPHT – Sep volumes at Yantian record high this year and second highest record in history TP US$0.33

News Analysis: Sep volumes at Yantian record high this year and second highest record in history Yantian port volumes hit record high this year at 1.43m TEUs in Sep, 15% higher m-o-m and just 2% down y-o-y Kwai Tsing port recorded an increase of 0.5% y-o-y to 1.24m TEUs in throughput volumes in Sep YTD […]

CIMB: CIFI Ever Sunshine – ADD TP $22.00

Acquiring Red Star Macalline’s PM unit CIFI Ever Sunshine (CIFI ES) will acquire an 80% stake in Red Star Macalline’s property management unit for Rmb960m. The transaction will add 71 malls to its property management (PM) portfolio and potentially lift its gross profit margin (GPM) for PM services. Red Star Macalline will provide a 20-year […]

CIMB: Singapore Property Developers (Overweight) – CityDev and UOL

A quieter Sep Sep monthly home sales declined 37.2% yoy and 31.4% mom. YTD sales volume remains robust, amid moderated price appreciation. Reiterate sector Overweight on valuations. Sector top picks: CIT and UOL. Lower Sep monthly home sales ● Sep 21 monthly home sales came in at 1,296 units, thanks to the launch of Parc […]

CIMB: REIT – ESR REIT, ARA LOGOS propose merger

Enlarged REIT to see acceleration in acquisitions and more resilient income. It is positioning itself as a New Economy REIT in the next 18-24 months. A faster acquisition pace and non-core assets disposal would rerate ELOG. Fairly valuing ALOG at 52-week high of S$0.95 per unit ESR REIT’s and ARA LOGOS’s proposed merger will involve […]

CIMB: ASEAN Aviation – AirAsia, Malaysia Airports, SIA, SATS, SIA Eng

Valuations no longer attractive We downgrade the Aviation sector from OW to N, with MAHB, SIA and SATS downgraded from Add to Hold; AAGB remains a Reduce; SIE remains Add. Investor optimism at the nascent resumption of domestic and international air travel has lifted share prices to levels we no longer consider attractive. We prefer […]

Starbucks (SBUX): My Cup of Coffee!

Starbucks is expected to release fourth quarter earnings on the 28th of October. The company is a global food and beverage company whose performance is tagged very closely to the economic performance of the countries in which the company is operating in. With the global economy opening and travelling picking up, I have decided to […]

KE: ASEAN X Macro – Catching Up with China

China’s GDP growth has exceeded that of ASEAN’s growth every year for the last 30 years. But there is an increasing likelihood that ASEAN-5 GDP growth will be faster than China in 2022 – due to cyclical drivers such as economy reopening with rising vaccination rates – and in subsequent years, because of structural factors […]

DBS: Ride the oil price rally with Europe oil majors

Due to a backlash toward hydrocarbons and hostility towards the sector, price performance has not mirrored the oil price rally this year. It is time for the sector to fly Chief Investment Office, Joanne Goh 15 Oct 2021 Investment takeaways from the global energy crisis. The current energy crisis has highlighted the delicate trade-off between the […]

KE: SEA Ltd – BUY TP $378

Maxing Free Fire’s growth potential Free Fire MAX is off to a good start Free Fire MAX (launched 28 Sep-21) now has >50m downloads (Fig 1). Free Fire MAX is a higher spec version of Free Fire that offers better graphics, animation, draw distance and other features, which we believe helps reengage existing users and […]

BB: Alibaba Earnings Forecast Slashed on Weak Consumer Spending

By Jeanny Yu October 15, 2021  Consensus 12-month profit view declines 5% since late Sept.  Daiwa sees “challenging” quarter on weak consumer spending Just as investors are watching whether a flurry of earnings reports due next month could revive Chinese technology shares, analysts slashed their forecasts on Alibaba Group Holding.  The company is expected to report on November […]

BB: Oil Hits $85 a Barrel With Global Energy Costs Soaring

By Alex Longley October 15, 2021 Brent oil futures topped $85 a barrel for the first time since October 2018, the latest milestone in a global energy crunch that has seen prices soar. Crude futures have jumped in recent weeks as natural gas prices hit records. On Thursday, the International Energy Agency said the crisis is spilling […]

BB: China’s Central Bank Says Inflation Risks Are Controllable

Bloomberg News October 15, 2021 China’s inflation risks are “controllable” and while rising costs may hurt small businesses, authorities have increased support for those types of firms, central bank officials said. Sun Guofeng, head of the monetary policy department, said at the briefing in Beijing on Friday that producer price inflation will remain elevated in […]

BB: China Eases Mortgages for Rest of Year on Evergrande Contagion Worries

Bloomberg News October 15, 2021  Banks told to quicken loan approvals, renew RMBS applications  Default risks mounting for China developers as funding dries China is loosening restrictions on home loans at some of its largest banks, according to people familiar with the matter, adding to signs of growing concern by authorities about contagion from the […]

BB: China Breaks Silence on Evergrande, Saying Risks ‘Controllable’

Bloomberg News October 15, 2021  Central bank wants developers to fulfill debt obligations  Urges banks to maintain stable credit to real estate sector China’s central bank broke its silence on the crisis at China Evergrande Group, saying risks to the financial system stemming from the developer’s struggles are “controllable” and unlikely to spread.  Authorities and local […]

SCMP: Alibaba’s DingTalk tops 500 million users as it goes after Tencent’s stronghold in online chat

Alibaba’s workplace communication app revealed that its user base grew 25 per cent between January and August Internet giants in China are seeking new growth in the enterprise market after the Covid-19 pandemic gave a boost to remote work and learning Jane Zhang 15 October 2021 DingTalk, one of China’s most widely used workplace apps, […]

Manulife Investment Management: Q4 2021 | Global Macro Outlook

Back to Goldilocks —the three bears 13 October 2021 Global Overview Big picture Since writing about peak macro in the last edition of Global Macro Outlook, global economic data has presented—as expected—upside surprises on inflation with downside surprises on growth.  Over the summer, we saw mounting evidence that supply chain disruptions were hampering growth activity […]

SCB: Weekly Market View

Taper but no tantrum The stars are aligning for the Fed to start tapering bond purchases this year, though tapering and rate hikes have historically notstood in the way of equity market gains till monetary policy becomes outright tight. We continue to favour US and Euro area equities. In China, though, the focus remains on […]

Kimly Limited: Food for thoughts – Buy?

Company’s Background Kimly Limited, an investment holding company, operates coffee shops in Singapore. The company operates through three segments: Outlet Management, Food Retail, and Others. The Outlet Management segment engages in the sale of food, beverages, and tobacco products; leasing of food outlet premises to tenants; and provision of cleaning and utilities services to tenants, […]

SCMP: Hong Kong stocks rise as Geely, BYD lead carmakers higher on robust electric-vehicle sales

Hong Kong market reopens for trading after a two-day pause due to typhoon Kompasu, public holiday as carmakers lift benchmark index A report on Monday will probably show China’s economy grew 5 per cent last quarter on annual basis, versus 7.9 per cent in second quarter Zhang Shidong 15 Oct 2021 Hong Kong stocks rose as the […]

CIMB: Aztech Global Ltd – ADD TP $1.75 (Previous $1.82)

Commendable execution in 3Q21 Constrained by component shortages, 3Q21 revenue was below expectations at 22.5%/21.7% of our/Bloomberg consensus full-year forecast. 3Q21 core net profit was slightly below expectations at 23.8% of our/ Bloomberg consensus full-year forecast. Reiterate Add. Our TP is lowered as we adjust our FY21F-23F revenue expectations due to the ongoing component shortages. […]

DBS: Haier Smart Home Co Ltd – BUY TP $39.08

Margins intact despite macro headwinds Investment Thesis Consumption upgrades. Casarte, the high-end brand of Haier, is expected to post 30%+ y-o-y growth in 2H21. The brandcontinues to stand as a prime beneficiary of accelerated premiumisation in China and helps supporting group profitability. Home solutions. To satisfy the needs of different consumer groups, full-scenario solutions that […]

DBS: Aztech Global – BUY TP $1.67 (Previous $1.74)

Aztech Global: Impressive net margins despite supply chain disruptions Commendable 9M 2021 results despite supply chain disruptions ; broadly in line Impressive net margin of 12.1% mainly due to productivity gains and effective tax management Strong orderbook, riding on the fast-expanding IoT market with >90% revenue exposure Maintain BUY with lower TP of S$1.67 as […]

DBS: Strong earnings growth fuel global stock surge

Chief Investment Office 15 Oct 2021 US The stock market had its best day since March as better-than-estimated corporate earnings and economic reports outweighed fears that inflation pressures and supply chain snarls could crimp growth. All major groups in the S&P 500 Index advanced. The KBW Bank Index – which has surged almost 40% in […]

KE: Aztech Global – BUY TP $1.26 (Previous $1.86)

Resetting expectations 3Q21 missed; but most negatives look priced in 3Q21 PATMI of SGD18m (+3% YoY) missed and accounted for 60%/63% of our/street’s estimates. This was due to the worsening of components shortage. We cut FY21-23E PATMI by 11% to reflect FY21E order book, and lowered expectations for FY22-23E. Our TP falls to SGD1.26, as […]

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