Emerging Market Links + The Week Ahead (April 3, 2023)
Fund manager ESG "cover your ass" tour begins, START not FAANG stocks, Alibaba restructuring, Syngenta IPO scrapped while Lalatech ditches NY for HK and the week ahead for emerging markets.
As US states crack down and ESG investments deflate, fund managers have apparently become “woke” to the perils of pushing ESG by doing damage control over their previous ESG pitches (while money continues to exit key ESG ETFs). However, the problem for fund managers will be the Internet (Wayback Machine, etc.) never forgets (Just like in Asia where many investors have not forgotten Lehman Brothers as they lost money in their instruments).
I am not a fan of listening to lengthy podcasts hoping they turn out to be worth listening to, but there is an excellent and must listen too one (43 minutes) with the person running Singapore Management University’s endowment fund and the CEO and a partner from their outsourced investment office (Partners Capital), etc. In the conversation, they discuss all aspects of investing in Asia e.g. from the need to have local on-the-ground asset managers (as even Singapore based SMU needed to get one), why traditional asset allocation does not work in Asia, and other relevant topics.
Meanwhile, China has abruptly scraped the Syngenta AG IPO while Lalatech has scraped plans for a New York one in favor of Hong Kong (NOTE: Lots of IPOs in our Emerging Market IPO Calendar/Pipeline section this week) and Alibaba’s restructuring plan to simplify things (by making things more complicated…). Plus there is a research piece pushing START (all familiar Asian names) rather than FAANG stocks.
Finally, a quick personal note: Any paywalled posts will likely be later this week rather than Tuesday. Last Wednesday, I thought I might have Dengue again, I could not eat for 2 to 3 days, and have been left with a rash over much of my body. My doctor told me today just from looking at the rash that it was a virus he usually only sees infecting Western and Korean patients. When the virus has run its course (basically a bad flu), you are left with a rash (like Dengue, etc) - for 2 to 3 weeks...
Despite many years in SE Asia, I have honestly NEVER heard of a virus like this, but apparently its common for expats to catch due to different genetics, immune systems, foods, climate, etc. 🤷 It goes to show there is always something new to learn about (or get sick with…).
Suggested Reading
$ = behind a paywall
The ESG "Cover Your Ass" Tour Begins As Managers Scramble To Remove References In Pitch Decks (Zerohedge)
Fund managers are now doing damage control for their ESG pitches of years past, Bloomberg wrote this week:
“Eleven major banks and money managers told Bloomberg News that they’re adjusting the language they use in pitch books, marketing materials and investor reports when seeking to sell funds and take part in financial deals. In some cases this means avoiding using the ESG acronym and related terms in Republican-led states, while for blue states, they’re playing up their ESG credentials, according to representatives of the financial firms who asked not to be named discussing private information.”
In other words, they're covering up their idiotic investing "strategies" of years past, wherein they picked companies from a list of Greta Thunberg-approved entities, many of whom still likely used questionable labor tactics and had little governance.
ESG research firm Util said it best, we think: “The first rule of ESG is, don’t talk about ESG.”
Recall, just days ago we wrote about a deluge of outflows from one of the largest ESG ETFs.
The listing committee meeting, which was scheduled for Wednesday, was called off because the situation warrants a cancellation, the Shanghai exchange said in a three-line statement on its website on Tuesday night, without elaborating. Syngenta declined to comment due to regulatory “blackout” period.
The Swiss company, acquired by China National Chemical Corp (ChemChina) in 2017, plans to raise as much as 65 billion yuan (US$9.5 billion) from the sale of 2.78 billion new shares on the Science and Technology Innovation Board, or the Star Market, based on its preliminary prospectus lodged with the Shanghai Stock Exchange on March 22.
On-demand logistics start-up Lalatech, which operates Lalamove and Houlala, files application to list on the Hong Kong stock exchange.
The Lalamove operator had considered a US IPO two years ago, but shifted its focus to Hong Kong amid tech crackdown, concerns over US delisting woes.
The allocator’s perspective: three key decisions on EM equities (Wellington Asset Management)
1. Why active management for emerging markets?
2. How should EM portfolio construction evolve?
3. Why consider thematic investing in EM equities?
Asia: The Multi-Asset Class Opportunity Set – With Partners Capital & Singapore Management University (Money Maze Podcast) 43 minutes
The conversation brings together Arjun Raghavan, CEO of Partners Capital, Adam Watson, Partner and Co-Head of Asia Pacific, and to understand the perspective of a seasoned investor and allocator, Harvey Toor, CIO of Singapore Management University (SMU). SMU is a current client of Partners Capital and seed investor in one of its pooled investment portfolios.
NOTE: SMU is a university in Singapore that seems to take a certain percentage of students from various countries in the ASEAN region e.g. Myanmar, etc.
Worth listening too. Some key points:
Asia is an under 10% investment allocation b/c its hard to invest and difficult to get right. Easier to allocate funds elsewhere where less work is required. However:
America-Europe monetary-fiscal policy rise is very synchronized and assets move together. There is a need to find non-correlated assets.
Cheaper valuations in Asia.
There is now a deep talent pool of asset managers.
SMU - the opportunity is not just in China, but in India, several ASEAN countries, etc. SMU does not have the capabilities to dig deeper into all these markets.
Need to ask: What does an Asian exposure look like from an asset allocation perspective?
North Asia more corelated to the USA vs. South Asia/India/SEAsia.
Three things needed for a good investment environment:
Good entrepreneurial businesses.
People creating value in the real economy and good investment talent who can identify good businesses.
Good set of instruments to trade + openness of markets.
Want to access the best Vietnam assets, you must overpay for them. Private placements make more sense here.
Local asset managers want to see your reaction e.g. when markets are going down like now, etc. You also need them to understand local legal jurisdictions.
Traditional asset management (e.g. 30% into bonds) does not work in Asia. The markets are too fast moving and unique opportunities pop up.
Japan was also discussed and how global inflation may have jumpstarted the local economy.
FX - must consider in get-go e.g. hedging costs.
TOPICS:
0:00 - Introduction
1:02 - Partners Capital Overview
2:34 - Asia Under-Allocation
6:11 - Historic Context
9:30 - SMU Endowment Overview
12:09 - SMU Investing Strategy
17:00 - Regional Differences
19:53 - Hedge Fund Allocation
23:08 - Capital Market Access
27:24 - Public V Private Markets
30:04 - Index Investing in Asia
32:01 - Measuring Performance
35:58 - Japan Case Study
38:18 - Currency Considerations
41:27 - Concluding Thoughts
Emerging Market Stock Picks / Stock Research
$ = behind a paywall
START not FAANG (GAM)
GIVEN AN IMPROVING RISK/RETURN BACKDROP FOR EMERGING MARKETS (EM), TIM LOVE, BELIEVES NOW IS A GOOD TIME TO REVISIT A GROUPING HE COINED IN NOVEMBER 2020 CALLED “START” (Samsung Electronics (KRX: 005930 / LON: BC94 / OTCMKTS: SSNLF), TENCENT, Alibaba Group (NYSE: BABA), Reliance Industries Limited (NSE: RELIANCE / BOM: 500325) AND Taiwan Semiconductor Manufacturing (TSMC) (NYSE: TSM)) WHICH REPRESENT WELL THE CYCLICAL AND SECULAR OPPORTUNITIES FOR THE EM REGION.
Tim contrasts this grouping to the US-listed FAANG (Facebook/Meta, Amazon, Apple, Netflix and Google/Alphabet), outlining why he believes START are key enablers of the ongoing digital revolution, represent strong growth opportunities and also reflect key sustainable shifts in the region across both consumer and enterprise.
NOTE: There is Tencent Holdings (HKG: 0700 / LON: 0LEA / FRA: NNND / OTCMKTS: TCEHY) and their subsidiary Tencent Music Entertainment Group (NYSE: TME).
Alibaba Reorg (Interconnected)
Either a Berkshire-like model or just clever corporate engineering
Dubbed “1+6+n”, Alibaba plans to evolve into a single holding company (the “1”) with six distinct businesses – each with its own CEO, board of directors, P&L, and the autonomy to set business strategy (the “6”). Additionally, there are also a handful of smaller units under the holding company that are less mature, more speculative bets (the “n”).
The six units are:
China Commerce (Taobao, Tmall, Taobao Deals, Taocaicai, Freshippo, Tmall Supermarket, Sun Art, Tmall Global. Alibaba Health, and 1688.com)
International Commerce (Lazada, AliExpress, Trendyol, and Daraz)
Local Consumer Services (Ele.me, Amap, and Fliggy)
Cainiao (domestic and international logistics)
Cloud (Alibaba Cloud, DingTalk, and other cloud-based B2B SaaS products)
Digital Media and Entertainment (Youku and Alibaba’s own movie studio)
Alibaba’s spinoffs: more clarity, more complexity (China Tech Shorts)
Alibaba's new spinoff plan doesn't actually look that new, and is likely to increase the complexity of one of the worlds most complex corporate structures.
Here’s the heavily simpliefied org chart from the company’s 20-F:
Earnings Calendar
Note: Investing.com has a full calendar for most global stock exchanges BUT you may need an Investing.com account, then hit “Filter,” and select the countries you wish to see company earnings from. Otherwise, purple (below) are upcoming earnings for US listed international stocks (Finviz.com):
Economic Calendar
Click here for the full weekly calendar from Investing.com containing frontier and emerging market economic events or releases (my filter excludes USA, Canada, EU, Australia & NZ).
Election Calendar
Frontier and emerging market highlights (from IFES’s Election Guide calendar):
Bulgaria Bulgarian National Assembly Apr 2, 2023 (d) Confirmed Oct 2, 2022
Paraguay Paraguayan Chamber of Senators Apr 30, 2023 (d) Confirmed Apr 22, 2018
Paraguay Presidency of Paraguay Apr 30, 2023 (d) Confirmed Apr 22, 2018
Paraguay Paraguayan Chamber of Deputies Apr 30, 2023 (d) Confirmed Apr 22, 2018
Thailand Thai House of Representatives May 14, 2023 (t) Confirmed Mar 24, 2019
Turkey Grand National Assembly of Turkey May 14, 2023 (d) Confirmed Jun 24, 2018
Turkey Presidency of Turkey May 14, 2023 (d) Confirmed Jun 24, 2018
Greece Greek Parliament Jun 8, 2023 (t) Date not confirmed Jul 7, 2019
Cambodia Cambodian National Assembly Jul 23, 2023 (d) Confirmed Jul 29, 2018
Pakistan Pakistani National Assembly Jul 31, 2023 (t) Date not confirmed Jul 25, 2018
Zimbabwe Presidency of Zimbabwe Jul 31, 2023 (t) Date not confirmed Jul 30, 2018
Zimbabwe Zimbabwean National Assembly Jul 31, 2023 (t) Date not confirmed Jul 30, 2018
Emerging Market IPO Calendar/Pipeline
Frontier and emerging market highlights from IPOScoop.com and Investing.com (NOTE: For the latter, you need to go to Filter and “Select All” countries to see IPOs on non-USA exchanges):
Hitek Global Inc. HKIT, 3.2M Shares, $5.00-5.00, $16.0 mil, 3/31/2023 Priced
Note: We are an offshore holding company incorporated in the Cayman Islands. As a holding company with no material operations, our operations were conducted in China by our subsidiaries and through contractual arrangements, which also known as VIE Agreements, with a variable interest entity, or “VIE”, Xiamen Hengda HiTek Computer Network Co., Ltd., and its subsidiaries. Neither we nor our subsidiaries own any equity interests in VIE.
Note: This is an offering of the Ordinary Shares of the offshore holding company in Cayman Islands, instead of shares of the VIE in China, therefore, you are not investing in and may never hold equity interests in the VIE.
We are an information technology (“IT”) consulting and solutions service provider focusing on delivering services to business in various industry sectors in China. As of the date of prospectus, we have two lines of businesses— 1) services to small and medium businesses (“SMEs”), which consists of Anti-Counterfeiting Tax Control System (“ACTCS”) tax devices, ACTCS services, and IT services, and 2) services to large businesses, which consists of hardware sales and software sales. We expect to actively develop our system integration services and online service platform in the near future. Our vision is to become a one-stop consulting destination for holistic IT and other business consulting services in China.
*Note: Revenue and net income figures are for the 12 months that ended June 30, 2022.
(Note: HiTek Global Inc. filed a post-effective amendment to its IPO prospectus in which it added Pacific Century Securities LLC as a book-runner to replace U.S. Tiger Brokers, according to its SEC filing dated Sept. 16, 2022. The lead book-runner is R.F. Lafferty & Co.)
(Note: HiTek Global Inc. priced its IPO at $5.00 – the price in the prospectus – on March 30, 2023 – on 3.2 million shares – down from 4.0 million in the prospectus – to raise $16.0 millon. The stock is expected to start trading Friday, March 31, 2023, on the NASDAQ. HiTek Global filed its F-1 on Nov. 20, 2018.)
ARB IOT GROUP LIMITED ARBB, 1.3M Shares, $4.00-6.00, $6.5 mil, 4/3/2023 Week of
We are a provider of complete solutions to our clients for the integration of Internet of Things (“IoT”) systems and devices from designing to project deployment. (Incorporated in the Cayman Islands)
Our mission is to become a leading player in the IoT landscape in the ASEAN region. We offer a wide range of IoT systems as well as provide customers a substantial range of services such as system integration and system support service. We deliver holistic solutions with full turnkey deployment from designing, installation, testing, pre-commissioning, and commissioning of various IoT systems and devices as well as integration of automated systems, including installation of wire and wireless and mechatronic works.
Recent new technology trends such as artificial intelligence (AI), cloud computing, 5G, robotic process automation (RPA), IoT and hyper-connectivity continue to transform businesses and drive companies to seek digital changes to meet evolving demands of customers. We have built up an IoT development ecosystem to help our customers address the challenges and opportunities brought by new digital technologies, offering an array of design and development system software, application software and other software in providing digital solutions for various processes, sub-processes, transactions and activities.
Currently, we have organized our operations into four business lines: 1. IoT Smart Home & Building; 2. IoT Smart Agriculture; 3. IoT System Development and 4. IoT Gadget Distribution.
We have benefited from ARB Berhad’s experience, reputation and network in Malaysian information technology (“IT”) industry. As an operating segment of a seasoned Malaysian public company, we have gained from established business processes and a veteran leadership team, allowing us to focus our attention on growing and developing our IoT business. While our history with ARB Berhad has provided us with certain competitive advantages, we believe that the separation and this offering will promote clearer segregation of business responsibilities and operations for the IoT segment, thereby enabling efficient allocation of resources to accelerate the growth of our IoT business, and allow us to have direct access to a globally recognized stock exchange, which would increase our financial flexibility to explore expansion and growth prospects and enhance our corporate reputation and recognition. See “Corporate History and Structure” and “Related Party Transactions—Historical Relationship with ARB Berhad.”
Our business has grown rapidly as demonstrated by the increase in revenue from approximately RM50.3 million ($11.4 million) for the fiscal year ended June 30, 2021 to approximately RM443.0 million ($100.6 million) for the fiscal year ended June 30, 2022, an increase of RM392.7 million ($89.1 million), or 780.7%, and in profit from approximately RM18.9 million ($4.3 million) for the fiscal year ended June 30, 2021 to approximately RM73.4 million ($16.7 million) for the fiscal year ended June 30, 2022, an increase of 289.0%. For additional information regarding our financial performance, see “Summary Consolidated Financial Information” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
**Note: Revenue and net income are in U.S. dollars for the 12 months that ended June 30, 2022.
(Note: ARB IOT Group Limited increased the size of its IPO to 1.3 million shares, up from 1.2 million shares, and kept the price range at $4.00 to $6.00 – to raise $6.5 million – in an F-1/A filing dated Dec. 5, 2022. ARB IOT Group Limited filed its F-1 on Sept. 30, 2022, following submission of confidential IPO documents on June 24, 2022.)
Multi Ways Holdings Ltd. MWG, 6.4M Shares, $2.00-3.00, $16.0 mil, 4/3/2023 Monday
Multi Ways Holdings provides heavy construction equipment through rentals and sales.
Our Group’s history began in 1988 when Mr. James Lim carried on the business of selling generators and air compressors under a sole proprietorship under the business name “Multi-Ways Equipment”. Multi Ways SG was incorporated in 2002 to take over the business carried on by Mr. James Lim under the sole proprietorship. Over the last two decades, we have become a supplier of a wide range of heavy construction equipment in Singapore and the region. In 1996, we expanded our fleet of heavy construction equipment to include road-building equipment and mining equipment. In 2012, we expanded into the crane trading business.
Our mission is to be an industry leader in the sales and rental of a wide range of heavy construction equipment in Singapore and the region, and as a one-stop shop offering complementary equipment refurbishment and cleaning services to our customers.
We pride ourselves in having a skilled team of technicians, mechanics, painters and panel-beaters who have relevant skills and expertise in the refurbishment of heavy construction equipment and troubleshooting and repair works, who have accumulated experience over the years. We have a team of 27 mechanics, 22 technicians and 6 painters and panel-beaters in our maintenance and servicing team, who are able to respond promptly to our customers’ requests, in terms of providing troubleshooting services, customization of equipment and refurbishment works.
Our customers are primarily in Singapore and Australia, although we do also serve customers in the Maldives, Indonesia, Thailand, Vietnam, the Philippines and the Middle East.
**Note: Revenue and net income are for the 12 months that ended June 30, 2022.
(Note: Multi Ways Holdings Ltd. filed its F-1 on Feb. 8, 2023, and set terms for its IPO: 6.4 million shares at $2.00 to $3.00 to raise $16.0 million. We are offering, on a firm commitment engagement basis, 5,200,000 Ordinary Shares. The Selling Shareholder (as defined and named herein) is offering an aggregate of 1,200,000 Ordinary Shares to the underwriter pursuant to this prospectus.)
U Power Ltd. UCAR, 2.5M Shares, $6.00-8.00, $17.5 mil, 4/3/2023 Week of
We are an electric vehicle (EV) battery-swapping technology company. (Holding company incorporated in the Cayman Islands)
We are a vehicle sourcing service provider in China, with a vision to becoming an EV market player primarily focused on our proprietary battery-swapping technology, or UOTTA technology, which is an intelligent modular battery-swapping technology designed to provide a comprehensive battery power solution for EVs.
Since our commencement of operations in 2013, we have principally engaged in the provision of vehicle sourcing services. We broker sales of vehicles between automobile wholesalers and buyers, including small and medium sized vehicle dealers (“SME dealers”) and individual customers primarily located in the lower-tier cities in China, which are smaller and less developed than the tier-1 or tier-2 cities. To that end, we have focused on building business relationships with our sourcing partners and have developed a vehicle sourcing network. As of the date of this prospectus, our vehicle sourcing network consisted of approximately 100 wholesalers and 30 SME dealers located in lower-tier cities in China.
Beginning in 2020, we gradually shifted our focus from the vehicle sourcing business to the development of our proprietary battery-swapping technology, or UOTTA technology. According to Frost & Sullivan, the PRC government will focus on promoting the electrification of commercial vehicles in the next few years, and it is expected that the sales volume of electric commercial vehicles will grow from 164.7 thousand units in 2021 to 431.0 thousand units in 2026 at a CAGR of 21.2% in China, and with the increasing penetration rates of electric commercial vehicles and the expanding battery-swapping infrastructure network, the market size by revenue of battery swapping solutions for electric commercial vehicle is expected to increase from approximately RMB8,661.5 million in 2021 to RMB176,615.1 million in 2026, representing a CAGR of 82.8%. In order to capture the opportunities arising from such growth, our plan is to develop a comprehensive EV battery power solution based on UOTTA technology, which mainly consists of: (i) vehicle-mounted supervisory control units that monitor the real-time status of an EV’s battery packs; (ii) customized vehicle control units (“VCUs”), which upload real-time data of the electric vehicle, such as its battery status, real-time location and safety status, to our data platform, using Bluetooth and/or Wi-Fi technologies; and (iii) our data management platform, which collects and synchronizes real-time information of the EVs uploaded by their respective VCUs, as well as information on the availability and locations of compatible UOTTA battery-swapping stations that assist drivers in locating the nearest compatible UOTTA battery-swapping station(s) available when the EV’s battery is determined to be lower than a certain level; and (iv) UOTTA battery-swapping stations designed for precise positioning, rapid disassembly, compact integration and flexible deployment of battery swapping for compatible EVs.
We have established in-house capabilities in the innovation of EV battery-swapping technology. Through our research and development efforts, we are developing an intellectual property portfolio. As of the date of this prospectus, we had 14 issued patents and 24 pending patent applications in China. Our research and development team is committed to technology innovation. As of the date of the prospectus, our research and development team consisted of 34 personnel and is led by Mr. Rui Wang and Mr. Zhanduo Hao, each of whom has experience of over 20 years in the electric power sector.
In 2021, leveraging years of automobile industry experience, we started cooperating with major automobile manufactures to jointly develop UOTTA-powered EVs, by adapting selected EV models with our UOTTA technology. According to Frost & Sullivan, compared with passenger EV drivers, drivers of commercial-use EVs experience more range anxiety and are more motivated to shorten, or even eliminate, time spent on recharging EVs, therefore, we intend to primarily focus on developing commercial-use UOTTA-powered EVs, such as ride-hailing passenger EVs, small logistics EVs, light electric trucks, and heavy electric trucks, and their compatible UOTTA battery-swapping stations. As of the date of this prospectus, we have entered into cooperating agreements with two major Chinese automobile manufacturers, FAW Jiefang Qingdao Automotive Co., Ltd, and HUBEI TRI-RING Motor Co., Ltd, to jointly develop UOTTA-powered electric trucks. We also have engaged with two battery-swapping station manufactures to jointly develop and manufacture UOTTA battery-swapping stations that are compatible with UOTTA-powered EVs. Our UOTTA battery-swapping stations are designed for precise positioning, rapid disassembly, compact integration and flexible deployment, allowing battery replacement within several minutes. As of the date of this prospectus, we realized sales of five battery-swapping stations. In August 2021, we completed the construction of our own battery-swapping station factory in Zibo City, Shandong Province (the “Zibo Factory”), which commenced manufacturing UOTTA battery-swapping stations in January 2022. We are also in the process of constructing another factory in Wuhu city, Anhui province (the “Wuhu Factory”), which is expected to commence production in 2023. In order to provide a comprehensive battery power solution based on UOTTA technology, we are in the process of developing a data management platform that connects UOTTA-powered EVs and stations, and assists the UOTTA-powered EV drivers in locating the closest compatible UOTTA swapping-stations on their routes. In January 2022, we started operating a battery-swapping station, pursuant to our station cooperation agreement with Quanzhou Xinao Transportation Energy Development Co., Ltd (“Quanzhou Xinao”), a local gas station operator in Quanzhou City, Fujian Province. Although we have made significant progress in entering into the EV market, there is no assurance that we will be able to execute our business plan to expand into the EV market as we have planned.
**Note: U Power Ltd. reported a net loss of $6.84 million on revenue of $1.75 million for the 12 months that ended June 30, 2022.
(Note: U Power Ltd. disclosed terms for its IPO on March 8, 2023, n an F-1/A filing: 2.5 million shares at $6.00 to $8.00 to raise $17.5 million. U Power Ltd. filed its F-1 on Dec. 22, 2022, and updated the filing with an F-1/A on Feb. 14, 2023 – without disclosing terms for its IPO.)
Millennium Group International Holdings Limited MGIH, 1.3M Shares, $4.00-4.00, $5.0 mil, 4/4/2023 Tuesday
Millennium Group International Holdings Limited, or Millennium, is a holding company incorporated in the Cayman Islands. As a holding company with no material operations, it conducts a substantial majority of its operations through the subsidiaries established in Hong Kong, the People’s Republic of China, or the PRC or China, and Vietnam.
Founded in 1978, we are a long-established paper-based packaging solutions supplier. We are headquartered in Hong Kong with operations in the PRC and Vietnam. We operate two production facilities in Guangdong Province of the PRC. We also operate a supply chain management business to service our global clients who source their packaging needs from Vietnam and other Association of Southeast Asian Nations (“ASEAN”) countries. We have also established offices in Hong Kong and Vietnam to service our customers outside the PRC.
We are a third-generation family-owned business and our history can be traced back to 1978 when Mr. Yee Cheong Lai, our founder, who engaged in the sale of Corrugated Paper in Hong Kong and developed a vision to becoming a one-stop integrated services provider for paper related products. Since our inception, through the continued efforts of our founder, the second generation and third generation of the family, we have diversified our business segments beyond the sale of Corrugated Paper to production and sale of packaging products and corrugated products with deliveries to, among others, PRC, Hong Kong, Vietnam, Myanmar, Australia, Indonesia, Cambodia, Taiwan, Thailand, United States, India and Germany. Throughout our years of dealings, we have developed and accumulated extensive industry experience and capabilities in relation to design and production of packaging products and corrugated products, packaging costing management, and print quality consistency control. We plan on further expanding our business in packaging products supply chain management solution to assist our global customers who source their supplies from regions in Southeast Asia.
We offer paper-based inner and outer packaging products which can be broadly categorized into packaging products and corrugated products.
Note: Revenue and net income figures are for the year ended June 30, 2022.
(Note: Millennium Group International Holdings Limited cut the size of its IPO by 38 percent to 1.25 million shares – down from 2.0 million shares – and kept the assumed IPO price at $4.00 – to raise $5.0 million, according to an F-1/A filing dated March 15, 2023.)
(Note: Millennium Group International Holdings Limited changed underwriters and cut its IPO by 60 percent in an F-1/A filing dated March 3, 2023. Revere Securities and R.F. Lafferty & Co. are the new joint book-runners, replacing Network 1 Financial Securities, according to the March 3, 2023, SEC filing. Millennium Group slashed its IPO to 2.0 million shares – down from 5.0 million shares – and set the assumed IPO price at $4.00 – the bottom of its $4.00 to $5.00 price range – to raise $8.0 million. The IPO will now raise 64 percent less than the $22.5 million in estimated IPO proceeds under the previous terms. Millennium Group filed its F-1 on Oct. 28, 2022, and disclosed terms for its IPO: 5.0 million shares at $4.00 to $5.00 each to raise $22.5 million. The company submitted confidential IPO paperwork to the SEC on Jan. 31, 2022.)
Top KingWin Ltd. TCJH 3.04.005.00$ 14.0 mil, 4/4/2023 Tuesday
Top KingWin offers financial advisory and other services to small and medium-sized enterprises (SMEs) in China. (Incorporated in the Cayman Islands)
We provide a number of important business services in China to young and emerging companies including (i) corporate business training services, which mainly focus on advanced knowledge and new perspectives on the capital markets, (ii) corporate consulting services, which mainly focus on various aspects of fundraising, and (iii) advisory and transaction services. Our main clients are entrepreneurs and executives in small and medium enterprises (“SMEs”) in China.
Corporate business training, corporate consulting, and advisory and transaction services constituted approximately 7%, 23% and 70% of our business, respectively, during the nine months ended Sept. 30, 2022.
Supported by the rapid economic growth and friendly business policies in China, the number of SMEs in China has significantly increased from 2016 to 2021. According to Frost & Sullivan, an independent market research firm, from 2016 to 2021, the number of SMEs in China increased from 13.9 million to 26.8 million with a compound annual growth rate (“CAGR”) of 14.0%. Frost & Sullivan expects the number of SMEs in China will steadily increase at 9.8% CAGR from 2021 to 2026. We believe that the increasing number of SMEs provide a solid foundation for the future development of our business.
With the increase in the number of companies entering the China market, most industries in China are becoming more competitive. Therefore founders, senior management teams and key employees of companies have an increasing awareness for professional business education in order to enhance their professional knowledge, boost their company’s strategic growth and allow the company to stay competitive in today’s economy.
China’s economy is shifting from traditional real estate investment and manufacturing to new economy industries such as internet-driven or technology-driven industries. Currently, the new economy industry has been a vital driving force in the growth of the economy in China. According to Frost & Sullivan, from 2016 to 2021, the market size of new economy industries by revenue in China experienced significant growth with 28.2% CAGR, which was much higher than the synchronized growth rate of 8.9% in China’s nominal GDP, attaining $4.0 trillion (RMB25.2 trillion) by the end of 2021. We believe that the rapid growth of new economy industries benefits the development of our business. Our mission is to provide comprehensive services to address client needs throughout all phases of their development and growth.
**Note: Revenue and net income figures are in U.S. dollars for the 12 months that ended Sept. 30, 2022.
(Top KingWin Ltd. filed its F-1 on Jan. 18, 2023, in which it disclosed terms for its IPO. The company submitted its confidential IPO documents to the SEC on Aug. 26, 2022.)
Global Mofy Metaverse Limited GMM, 1.2M Shares, $4.50-5.50, $6.0 mil, 4/5/2023 Wednesday
*Note: The shares in the IPO are being offered by the Cayman Islands- incorporated holding company.
We are a technology solutions provider engaged in virtual content production, digital marketing, and digital assets development for the metaverse industry. Utilizing our proprietary “Mofy Lab” technology platform which consists of cutting-edge three-dimensional (“3D”) rebuilt technology and artificial intelligence (“AI”) interactive technology, we are able to create 3D high definition virtual version of a wide range of physical world objects such as characters, objects and scenes which can be used in different applications. According to the industry datasheet generated by Frost & Sullivan, we believe we are one of the leading digital asset banks in China, which consists of more than 7,000 high precision 3D digital assets. High precision means 4K (4096*2160) resolution of movie precision. With our strong technology platform and industry track record, we are able to attract high-profile customers such as L’Oreal and Pepsi and earn repeat business. We primarily operate in three lines of business (i) virtual technology service, (ii) digital marketing, and (iii) digital asset development and others.
Virtual Technology Service
We provide comprehensive technology solution to assist customers in virtual content production, which can be used in a variety of settings such as movies, television series, animations advertising and gaming, etc. Leveraging our proprietary “Mofy Lab” technology platform, we are able to produce high-quality virtual content quickly and cost-effectively to meet highly differentiated customers’ needs. The virtual content production contracts are primarily quoted in fixed price, payable on a milestone basis, which requires us to perform services for visual effect design, content development, production and integration based on customers’ specific needs.
Digital Marketing
We provide advertisement production and promotion services to customers with integrated digital marketing services from content planning, technical services and content production assistance to omni-channel online placement. Technical services under advertisement production uses the same technologies with our virtual technology service. For content planning and content production, unlike focusing on the storyline under virtual technology service, we focus on the promotion products provided by the digital marketing customers under advertisement production. The advertisements are in different format, including but not limited to short video, landing pages and static materials. We consider that both of the advertisement production and promotion services are highly interrelated and not separately identifiable. It is not practical to quantify the portion of revenue from our advertisement production and revenue that derives from advertising placement/promotion services.
Digital Asset Development
Through our virtual content production business and opportunistic acquisition of certain digital assets, we are able to build a robust digital asset bank with more than 7,000 3D digital assets. We grant specific use right of these digital assets to customers who use them based on their specific needs across different applications such as movies, television series, AR/VR, animation, adverting and gaming. Our digital assets, which build up our digital asset bank, mainly consist of high precision 3D renders of scenes, characters, objects and, items that can be licensed for use in virtual environment. Depending on customers’ needs, these digital assets can be quickly deployed and integrated with minimal customization, thus reducing project costs and expediate completion time. With the rapid development of metaverse, we believe digital assets will be become increasingly valuable and have abundant use cases. We plan to actively expand our digital asset bank and build digital assets which we believe have more use case to serve this fast-growing market.
Global Mofy China has its own technology platform, called “Mofy Lab”. Mofy Lab contains self-developed and optimized technologies, including 3D rebuilt technology and AI interactive technology, which can: (i) create 3D high definition virtual version of real world objects, or the digital assets; and (ii) provide a one-stop, low barrier, low-cost solution to assist metaverse companies in creating high quality virtual content.
**Note: Net loss and revenues are in U.S. dollars for the year ended Sept. 30, 2022.
(Note: Global Mofy Metaverse Limited slashed its IPO by 80 percent to 1.2 million shares – down from 6.0 million shares – and kept the price range at $4.50 to $5.50 – to raise $6.0 million, according to an F-1/A filing dated March 7, 2023. Global Mofy Metaverse Limited filed its F-1 on Nov. 23, 2022; it submitted confidential IPO documents to the SEC on March 4, 2022.) )
Golden Heaven Group Ltd. GDHG, 2.0M Shares, $4.00-5.00, $9.0 mil, 4/5/2023 Wednesday
*Note: The shares in the IPO are being offered by the Cayman Islands- incorporated holding company.
We are a technology solutions provider engaged in virtual content production, digital marketing, and digital assets development for the metaverse industry. Utilizing our proprietary “Mofy Lab” technology platform which consists of cutting-edge three-dimensional (“3D”) rebuilt technology and artificial intelligence (“AI”) interactive technology, we are able to create 3D high definition virtual version of a wide range of physical world objects such as characters, objects and scenes which can be used in different applications. According to the industry datasheet generated by Frost & Sullivan, we believe we are one of the leading digital asset banks in China, which consists of more than 7,000 high precision 3D digital assets. High precision means 4K (4096*2160) resolution of movie precision. With our strong technology platform and industry track record, we are able to attract high-profile customers such as L’Oreal and Pepsi and earn repeat business. We primarily operate in three lines of business (i) virtual technology service, (ii) digital marketing, and (iii) digital asset development and others.
Virtual Technology Service
We provide comprehensive technology solution to assist customers in virtual content production, which can be used in a variety of settings such as movies, television series, animations advertising and gaming, etc. Leveraging our proprietary “Mofy Lab” technology platform, we are able to produce high-quality virtual content quickly and cost-effectively to meet highly differentiated customers’ needs. The virtual content production contracts are primarily quoted in fixed price, payable on a milestone basis, which requires us to perform services for visual effect design, content development, production and integration based on customers’ specific needs.
Digital Marketing
We provide advertisement production and promotion services to customers with integrated digital marketing services from content planning, technical services and content production assistance to omni-channel online placement. Technical services under advertisement production uses the same technologies with our virtual technology service. For content planning and content production, unlike focusing on the storyline under virtual technology service, we focus on the promotion products provided by the digital marketing customers under advertisement production. The advertisements are in different format, including but not limited to short video, landing pages and static materials. We consider that both of the advertisement production and promotion services are highly interrelated and not separately identifiable. It is not practical to quantify the portion of revenue from our advertisement production and revenue that derives from advertising placement/promotion services.
Digital Asset Development
Through our virtual content production business and opportunistic acquisition of certain digital assets, we are able to build a robust digital asset bank with more than 7,000 3D digital assets. We grant specific use right of these digital assets to customers who use them based on their specific needs across different applications such as movies, television series, AR/VR, animation, adverting and gaming. Our digital assets, which build up our digital asset bank, mainly consist of high precision 3D renders of scenes, characters, objects and, items that can be licensed for use in virtual environment. Depending on customers’ needs, these digital assets can be quickly deployed and integrated with minimal customization, thus reducing project costs and expediate completion time. With the rapid development of metaverse, we believe digital assets will be become increasingly valuable and have abundant use cases. We plan to actively expand our digital asset bank and build digital assets which we believe have more use case to serve this fast-growing market.
Global Mofy China has its own technology platform, called “Mofy Lab”. Mofy Lab contains self-developed and optimized technologies, including 3D rebuilt technology and AI interactive technology, which can: (i) create 3D high definition virtual version of real world objects, or the digital assets; and (ii) provide a one-stop, low barrier, low-cost solution to assist metaverse companies in creating high quality virtual content.
**Note: Net loss and revenues are in U.S. dollars for the year ended Sept. 30, 2022.
(Note: Global Mofy Metaverse Limited slashed its IPO by 80 percent to 1.2 million shares – down from 6.0 million shares – and kept the price range at $4.50 to $5.50 – to raise $6.0 million, according to an F-1/A filing dated March 7, 2023. Global Mofy Metaverse Limited filed its F-1 on Nov. 23, 2022; it submitted confidential IPO documents to the SEC on March 4, 2022.) )
CDT Environmental Technology Investment Holdings Limited CDTG, 2.0M Shares, $4.00-5.00, $9.0 mil, 4/10/2023 Week of
We are a waste treatment company that generates revenue through design, development, manufacture, sales, installation, operation and maintenance of sewage treatment systems and by providing sewage treatment services. We primarily engage in two business lines: sewage treatment systems and sewage treatment services in both urban and rural areas. Sewage treatment systems are sometimes also referred to herein as rural sewage treatment, and sewage treatment services are sometimes also referred to herein as septic tank treatment.
For sewage treatment systems, we sell complete sewage treatment systems, construct rural sewage treatment plants, install the systems, and provide on-going operation and maintenance services for such systems and plants in China for municipalities and enterprise clients. We provide decentralized rural sewage treatment services with our integrated and proprietary system using our advanced quick separation technology. Our quick separation technology uses a biochemical process for economically and sufficiently treating rural sewage. In addition, our integrated equipment generally has a lifespan of over 10 years without replacement of the core components. Due to our quick separation technology and our technological expertise and experience, our integrated rural sewage treatment system produces a high quality of outflowing water, with high degrees of automation, efficient construction and start up, and low operational costs. In addition, our equipment is typically able to process abrupt increases of sewage inflows and high contamination. Our integrated equipment consists of a compact structure and is buried underground in order to minimize changes to the surrounding environment.
**Note: Revenue and net income figures are in U.S. dollars for the 12 months that ended June 30, 2022.
(Note: CDT Environmental Technology Investment Holding Limited cut the size of its IPO by about 35 percent to 2.0 million shares – down from 3.07 million shares – and raised the price to a range of $4.00 to $5.00 – up from an assumed IPO price of $4.00 – to raise $9.0 million, according to an F-1/A filing dated March 27, 2023. CDT Environmental Technology Investment Holdings Limited updated its financial statements in an F-1/A dated Feb. 24, 2023. The company changed its sole book-runner to WestPark Capital from ViewTrade Securities in an F-1/A filing in June 2021. The F-1 was filed on Jan. 15, 2021.)
Emerging Market ETF Launches
Climate change and ESG are clearly the latest flavours of the month for most new ETFs. Nevertheless, here are some new frontier and emerging market focused ETFs:
1/31/2023 - Strive Emerging Markets Ex-China ETF STX - Passive, equity, emerging markets
1/20/2023 - Putnam PanAgora ESG Emerging Markets Equity ETF PPEM - Active, equity, ESG, emerging markets
1/12/2023 - KraneShares China Internet and Covered Call Strategy ETF KLIP - Active, equity, China, options overlay, thematic
1/11/2023 - Matthews Emerging Markets ex China Active ETF MEMX - Active, equity, emerging markets
12/13/2022 - GraniteShares 1.75x Long BABA Daily ETF BABX - Active, equity, leveraged, single stock
12/13/2022 - Virtus Stone Harbor Emerging Markets High Yield Bond ETF VEMY - Active, fixed income, junk bond, emerging markets
9/22/2022 - WisdomTree Emerging Markets ex-China Fund XC - Passive, equity, emerging markets
9/15/2022 - KraneShares S&P Pan Asia Dividend Aristocrats Index ETF KDIV - Passive, equity, Asia, dividend strategy
9/15/2022 - OneAscent Emerging Markets ETF OAEM - Active, Equity, emerging markets, ESG
9/9/2022 - Emerge EMPWR Sustainable Select Growth Equity ETF EMGC - Active, equity, emerging markets
9/9/2022 - Emerge EMPWR Unified Sustainable Equity ETF EMPW - Active, equity, emerging markets
9/8/2022 - Emerge EMPWR Sustainable Emerging Markets Equity ETF EMCH - Active, equity, emerging markets, ESG
7/14/2022 - Matthews China Active ETF MCH - Active, equity, China
7/14/2022 - Matthews Emerging Markets Equity Active ETF MEM - Active, equity, emerging markets
7/14/2022 - Matthews Asia Innovators Active ETF MINV - Active, equity, Asia
6/30/2022 - BondBloxx JP Morgan USD Emerging Markets 1-10 Year Bond ETF XEMD - Passive, fixed income, emerging markets
5/2/2022 - AXS Short CSI China Internet ETF SWEB - Active, inverse, thematic
4/27/2022 - Dimensional Emerging Markets High Profitability ETF DEHP - Active, equity, emerging markets
4/27/2022 - Dimensional Emerging Markets Core Equity 2 ETF DFEM - Active, equity, emerging markets
4/27/2022 - Dimensional Emerging Markets Value ETF DFEV - Active, equity, emerging markets
4/27/2022 - iShares Emergent Food and AgTech Multisector ETF IVEG - Passive, equity, thematic [Mostly developed markets]
4/21/2022 - FlexShares ESG & Climate Emerging Markets Core Index Fund FEEM - Passive, equity, ESG
4/6/2022 - India Internet & Ecommerce ETF INQQ - Passive, equity, thematic
2/17/2022 - VanEck Digital India ETF DGIN - Passive, India market, thematic
2/17/2022 - Goldman Sachs Access Emerging Markets USD Bond ETF GEMD - Passive, fixed income, emerging markets
1/27/2022 - iShares MSCI China Multisector Tech ETF TCHI - Passive, China, technology
1/11/2022 - Simplify Emerging Markets PLUS Downside Convexity ETF EMGD - Active, equity, options strategy
1/11/2022 - SPDR Bloomberg SASB Emerging Markets ESG Select ETF REMG - Passive, equity, ESG
Emerging Market ETF Closures/Liquidations
Frontier and emerging market highlights:
3/30/2023 - Invesco BLDRS Emerging Markets 50 ADR Index Fund - ADRE
3/30/2023 - Invesco BulletShares 2023 USD Emerging Markets Debt ETF - BSCE
3/30/2023 - Invesco BulletShares 2024 USD Emerging Markets Debt ETF - BSDE
3/30/2023 - Invesco PureBeta FTSE Emerging Markets ETF - PBEE
3/30/2023 - Invesco RAFI Strategic Emerging Markets ETF - ISEM
2/17/2023 - Direxion Daily CSI 300 China A Share Bear 1X Shares - CHAD
1/13/2023 - First Trust Chindia ETF - FNI
12/28/2022 - Franklin FTSE Russia ETF - FLRU
12/22/2022 - VictoryShares Emerging Market High Div Volatility Wtd ETF CEY
8/22/2022 - iShares MSCI Argentina and Global Exposure ETF AGT
8/22/2022 - iShares MSCI Colombia ETFI COL
6/10/2022 - Infusive Compounding Global Equities ETF JOYY
5/3/2022 - ProShares Short Term USD Emerging Markets Bond ETF EMSH
4/7/2022 - DeltaShares S&P EM 100 & Managed Risk ETF DMRE
3/11/2022 - Direxion Daily Russia Bull 2X Shares RUSL
1/27/2022 - Legg Mason Global Infrastructure ETF INFR
1/14/2022 - Direxion Daily Latin America Bull 2X Shares LBJ
Check out our emerging market ETF lists, ADR lists (updated) and closed-end fund (updated) lists (also see our site map + list update status as some ETF lists are still being updated as of Summer 2022).
I have changed the front page of www.emergingmarketskeptic.com to mainly consist of links to other emerging market newspapers, investment firms, newsletters, blogs, podcasts and other helpful emerging market investing resources. The top menu includes links to other resources as well as a link to a general EM investing tips / advice feed e.g. links to specific and useful articles for EM investors.
Disclaimer. The information and views contained on this website and newsletter is provided for informational purposes only and does not constitute investment advice and/or a recommendation. Your use of any content is entirely at your own risk and it is your sole responsibility to evaluate the accuracy, completeness and usefulness of the content. Seek a duly licensed professional for any investment advice. I may have positions in the investments covered. This is not a recommendation to buy or sell any investment mentioned.
Emerging Market Links + The Week Ahead (April 3, 2023) was also published on our website under the Newsletter category.