Emerging Market Links + The Week Ahead (January 2, 2024)
China's spy agency targeting economy pessimists, ESG hypocrisy (e.g. Grab's Evel Knievel delivery riders), congested 2024 electoral calendar, EM stock picks and the week ahead for emerging markets.
Nikkei Asia has reported that China's spy agency is now watching for doomsayers, noting a recent post from an intelligence agency suggesting that even “those who explain the situation of China's waning economy using objective facts and figures could come under pressure…” But leave it to Zero Hedge to report the article and put it more bluntly with this headline: China's Spy Agencies Now Targeting The Country's Economic Pessimists.
Meanwhile, the right leaning Brownstone Institute has a interesting piece calling out the hypocrisy of ESG by noting how SE Asia delivery platform stock “Grab Holdings Limited (NASDAQ: GRAB)’s business model is inherently not great for the safety of its drivers and the public… To make a buck, the drivers for Grab (and its competitors) have to be brave and aggressive on the road. Some are real daredevils – the Evel Knievels of Southeast Asia – as we [Myself included…] have personally witnessed…” And Grab is not yet profitable. But they have a detailed and glossy ESG report (74 pages with 5 pages dedicated to road safety…) which Brownstone critically dissects…
Finally, fund focused posts (containing links to EM funds having good commentary and noting the latest dates for such documentation to be posted) will only be emailed to paid subscribers, but will be linked to in these Monday posts. Partially pay walled posts compiling potential stock picks from other sources will be emailed - I am not sure yet if these will be weekly posts just yet.
🔬 Emerging Market Stock Pick Tear Sheets
$ = behind a paywall / 🗃️ = Archived article
🌐 EM Fund Stock Picks & Country Commentaries (December 28, 2023) $
Seafarer Capital Partners on finding EM stock picks, Baillie Gifford on SE Asia (+stock mentions), Van Eck Mexico trip report (+two stocks), Namibia stocks, fund docs mostly updated to November, etc.
🌐 Emerging Market Stock Picks, Tweets & Podcasts (December 2023) Partially $
Look beyond Chinese growth stocks, small & midsized Indian infrastructure + railway stock picks, Canada listed mining stocks focused on Latin America, up-and-coming helium-LNG stock, etc.
📰🔬 Emerging Market Stock Picks / Stock Research
$ = behind a paywall / 🗃️ = Archived article
🇨🇳 China drafts rules to tighten limits on monetization for online games (Caixin) $ Chinese gaming stocks regain some ground as Beijing softens rhetoric (FT) $
China is tightening the limits on the monetization of online games with new draft rules that could cut profits of domestic gaming companies, sending shares of Tencent (HKG: 0700 / LON: 0LEA / FRA: NNND / OTCMKTS: TCEHY) and NetEase (NASDAQ: NTES)., the country’s two largest publishers, tumbling.
Online games must impose limits on how much players can top up their accounts for in-game spending irrespective of their age and issue pop-up alerts for “irrational consumption behaviors,” according to the draft rules published Friday by the National Press and Publication Administration (NPPA). Details about the maximum top-up amount were not given.
🇨🇳 Chinese gaming firms unveil share buybacks after regulatory move unnerves investors (Reuters)
A slew of smaller Chinese gaming companies have announced share buybacks - plans seen as an attempt to reassure investors after the market was spooked by regulatory moves to clamp down on consumer spending on games.
That sent shares in gaming companies plunging and as of Monday evening eight companies had unveiled plans to buy back shares worth up to 780 million yuan ($110 million) combined, citing confidence in China's gaming industry and the need to protect investors.
Among them, Shanghai-listed G-bits Network Technology Xiamen (SHA: 603444) saw its shares end up 2% on Tuesday but has lost 11% since the draft rules were published. Shenzhen-listed Perfect World Co (SHE: 002624) dropped 2% and has tumbled 16% since then.
🇨🇳 In Depth: China’s cloud giants seek profits abroad as domestic margins dwindle (Caixin) $
Cloud computing has become a new battleground in the China-U.S. fight for tech dominance.
China’s biggest cloud service providers, including units from Alibaba, Tencent and Huawei, are betting big on overseas expansion as profits dwindle in their saturated home market.
But as Chinese competitors push overseas, they are encroaching on the territory of global players such as U.S. giants Microsoft and Amazon, which dominate many markets around the world.
🇨🇳 Mynd.ai turns new page with completion of U.S. backdoor listing (Bamboo Works)
The former education business of gaming company NetDragon Websoft (HKG: 0777 / FRA: 3ND) hopes to entice investors with its rollout of software services next year for its classroom-based educational hardware panels
Mynd.ai (NYSEAMERICAN: MYND) has completed its listing on the NYSE American, taking over the publicly traded shell of a company that was wiped out by China’s education crackdown of 2021
The company’s main asset is the former education business of gaming company NetDragon, including an educational panel hardware unit and complementary software services
🇨🇳 Autohome looks for new mileage in used cars (Bamboo Works)
The company is preparing to offer used car dealer memberships, and hopes they will ultimately match the current 30% of its revenue that comes from new car dealer memberships
Autohome (NYSE: ATHM) is expanding its membership services to include used car dealers, and is also preparing a major expansion of its TTP used car trading platform
The company has opened 20 experience-oriented “Autohome Space” centers since launching the chain in September last year, including 17 in the last three months
🇨🇳 China’s ‘Amazon’ gets more animated with purchase from Tencent (Bamboo Works)
With a quarter of China’s online readers as customers, e-book giant China Literature (HKG: 0772 / FRA: C2X) announced it is buying its parent’s comics and animation unit
China Literature’s acquisition of Tencent’s comics and animation unit brings all of the latter’s long-form print and filmed entertainment assets under one roof
Tencent has been unloading loss-making businesses amid an ongoing crackdown on anti-competitive practices in China’s tech sector
🇨🇳 Dada Nexus (DADA.OQ) – Leading Chinese On-Demand Retail Platform Accelerates on Significant Runway (Pyramids and Pagodas)
A JD.com (NASDAQ: JD) subsidiary with growing economies of scale, unlocking growth potential at distressed valuations
Currently, we have established a trading position in Dada Nexus (NASDAQ: DADA) with average in-price of USD 3.12. Our target for the stock is to double to above USD 6.00. However, our view is that the stock could trade higher, on par with its peers as it demonstrates sustainable profitability structure.
🇨🇳 Nike challenger Anta faces fresh rivals in Chinese sportswear race (FT) $
Number two sports retailer [ANTA Sports Products (HKG: 2020 / FRA: AS7 / OTCMKTS: ANPDY / OTCMKTS: ANPDF)] responds to newer brands gaining market share due to more active lifestyles
🇨🇳 Shenzhou Intl (2313 HK): Nike Guidance Cut Presents An Opportunity (Smart Karma) $
Nike (NYSE: NKE) reported 2QFY24 results last week with a guidance cut, as the company cut FY24 full-year sales guidance to around +1%, compared to +mid-single-digit in the previous guidance.
Shenzhou International (HKG: 2313) saw its stock drop by 8% the following day, given that Nike is Shenzhou's most important customer, making up 30% of Shenzhou's sales.
Nike's inventory is down another 14% yoy, and down high-single-digit compared to the previous quarter 1QFY24.
🇨🇳 Xtep makes big leap with takeover of Wolverine joint venture (Bamboo Works)
The sports shoe maker will buy out its joint venture that holds rights to the Saucony and Merrell brands in China
Xtep (HKG: 1368 / FRA: 4QI / OTCMKTS: XTEPY / XTPEF) will buy out its Wolverine China joint venture, whose Saucony brand running shoes turned profitable in the first half of this year
Strong third-quarter results failed to boost the company’s stock, as investors remain cautious about China’s sportswear market
🇨🇳 Haier Smart Home finds bargain in commercial refrigeration acquisition (Bamboo Works)
One year after becoming a blue-chip stock, the home appliance maker announced it will buy the commercial refrigeration business of U.S.-based Carrier Global Corp (NYSE: CARR).
Haier Smart Home (HKG: 6690 / SHA: 600690 / OTCMKTS: HSHCY / OTCMKTS: HRSHF) has agreed to acquire Carrier Global’s commercial refrigeration business for $640 million, translating to a relatively low price-to-earnings (P/E) valuation of 11
As a veteran of overseas acquisitions, the appliance maker will be looking to improve Carrier Commercial Refrigeration’s market-lagging performance
🇨🇳 Sinopharm Group (1099.HK) - Performance Pressure May Continue Until 2024H1 (Smart Karma) $
Sinopharm (HKG: 1099 / FRA: X2S1 / OTCMKTS: SHTDY)’s 23Q1-Q3 results were below expectations. The main reason for weak performance was due to the anti-corruption campaign, which led to profound and rapid changes in fundamentals and policy end.
In Q4, the impact of anti-corruption would weaken and traditional distribution business would recover. So, 23Q4 performance should be better than Q3, but 23H2 performance would still be worse than 23H1.
We lowered our forecast for 2023 – Revenue and net profit could achieve single-digit growth. Due to the high base in 23H1, growth in 24H1 could still be under pressure.
🇨🇳 Shrinking wealth manager Puyi finds big benefactor in insurance broker Fanhua (Bamboo Works)
Separate shareholder groups from the two publicly traded companies will each acquire a majority stake in the other through an equity swap
An equity swap will give a group of Fanhua (NASDAQ: FANH) shareholders 77% of wealth management firm Puyi (NASDAQ: PUYI), and a Puyi shareholder group 50.1% of Fanhua
The deal comes as Puyi struggles with shrinking revenue and ongoing losses
🇲🇴 Melco Resorts: Best Dice Roll In The Gaming Sector For 2024 (Seeking Alpha) $
Melco Resorts & Entertainment Ltd (NASDAQ: MLCO) shares have been negatively impacted by its significant debt burden.
CEO Lawrence Ho has expanded the company's footprint in Asia through debt, but faced challenges in Russia and Japan.
Despite the debt concerns, Melco Resorts is experiencing a strong revenue recovery in Macau and Manila, making it a potential investment opportunity.
🇰🇷 Kum Yang: Announces Its Shares Will Be Listed on the US Stock Market Through ADRs (Douglas Research Insights) $
On 27 December, Kumyang Co Ltd (KRX: 001570) announced that its shares will be listed on the US stock market in the form of DRs, resulting in its shares rising by 11.7%.
The listing of Kum Yang ADRs is likely to have a short-term positive impact on its share price as this is likely to reduce free float of local common shares.
Nonetheless, over the next 6-12 months, we expect Kum Yang's share price to trade much lower (30% or more) as its shares are highly overvalued.
🇰🇷 Namyang Dairy Products: Long Legal Dispute to Be Finally Decided by Supreme Court in January 2024 (Douglas Research Insights) $
The Korean Supreme Court's ruling on the stock transfer lawsuit between Hahn & Company private equity fund and Namyang Dairy Products Co (KRX: 003920)'s Chairman Hong Won-Sik is confirmed for 4 January 2024.
The expectation of Hahn & Co winning this legal dispute has positively impacted the share price of Namyang Dairy Products.
The higher probability scenario is for the Korean Supreme Court to rule in favor of Hahn & Co, agreeing with the decisions of the two lower courts in Korea.
🇹🇼 Media IC Monitor: Himax Showing Relative Display Strength Thanks to Auto Exposure; CES Event Ahead (Smart Karma) $
Himax Technologies (NASDAQ: HIMX) shares have performed relatively well during December but have still significantly underperformed other fabless Media IC names over the last six months.
Comparing results data across all names, Himax has exhibited relative strength in Display IC revenue thanks to its strong position supplying automakers with automotive display technology.
Himax will be speaking at Nomura's CES 2024 event and presenting its new edge AI camera products; This creates potential for positive news flow within two weeks.
🇹🇼 Silergy (6415.TT): Chinese Analog IC Could Raise up Prices by About 15%. (Smart Karma) $
A recent news report speculates that Analog Devices (NASDAQ: ADI) is planning to raise prices by ~20%.
Silergy (TPE: 6415 / OTCMKTS: SLEGF) is reportedly considering a price increase of over 15% in the Chinese market.
We believe that now is a good time to invest in Silergy.
🇸🇬 Grab Holdings (GRAB US) - Risks and Rewards in 2024 (Smart Karma) $
Grab Holdings Limited (NASDAQ: GRAB) looks set to move toward cashflow breakeven in 2H2024 having hit adjusted EBITDA breakeven in 3Q2023 as it successfully struck a delicate balance between growth and profitability.
The sale of 75% of Tokopedia by GoTo Gojek Tokopedia (IDX: GOTO / FRA: CK8 / OTCMKTS: GTOFF) may mean more intense competition in Indonesia as it focuses on online delivery services but Grab is well-positioned to deal with this.
2024 will see the potential completion of the Transcab deal plus a potential acquisition in food delivery increasing scale and competitiveness. Valuations are attractive relative to growth and financial position.
🇸🇬 TDCX: Poor Visibility Into Near-Term Performance (Seeking Alpha) $
Note: TDCX (NYSE: TDCX) is a digital customer experience solutions provider.
TDCX continues to face growth headwinds and revenue decline, with no signs of recovery.
The reliance on its top client is dragging down the entire business and impacting growth.
Poor visibility into near-term performance and potential structural issues raise concerns about TDCX's long-term growth profile.
🇮🇩 Indonesia’s Bank Mandiri ‘strikes back’ at fintech rivals (Nikkei Asia) $
Surging downloads and use of its two-year-old digital banking apps are boosting the confidence of Indonesia's top lender Bank Mandiri (IDX: BMRI / FRA: PQ9 / OTCMKTS: PPERF) as fintech players try to retain existing customers while looking for more among the country's large unbanked population, the bank's president director told Nikkei Asia.
Darmawan Junaidi said that when he assumed his role in October 2020 at Indonesia's largest lender by assets, both financial technology experts and customers had undermined the ability of traditional banks like Mandiri to stay abreast of digitalization in the financial sector.
🇧🇦 🇷🇸 Adriatic Metals: Excellent Reserve Update Significantly Extends The Mine Life (Seeking Alpha) $
[Bosnia & Serbia focused] Adriatic Metals Plc (LON: ADT1 / FRA: 3FNA / OTCMKTS: ADTLF) released a reserve update with excellent grades.
The reserve update adds 8 years to the mine life and increased the NPV by about 45%, with potential for further resource updates in the future.
We are still just a month from the first concentrate production.
🇦🇷 🇱🇺 Adecoagro: Stock Has Strong Growth Potential In 2024 (Seeking Alpha) $
Adecoagro Sa (NYSE: AGRO) is a South American agricultural and industrial company with a low valuation and strong expected growth for 2024.
The company's business segments are expected to experience long-term steady growth.
Adecoagro is benefitting from an increase in farmland, favorable sugar prices, and the El Nino weather pattern, which has been conducive for productive crop yields.
🇧🇷 Valid Solucoes: A Super Cheap Brazilian Small-Cap Reaping The Benefits Of A Turnaround (Seeking Alpha) $
Note: The Company provides security printing services to financial institutions, telecommunication companies, state governments, and public agencies.
Valid Soluções (BVMF: VLID3 / OTCMKTS: VSSPY), a Brazilian multinational company, has seen its shares surge by 145% on the Ibovespa (Brazilian stock market) this year.
Recent strategic initiatives include a capital structure transformation and operational focus on three primary verticals: Identification (ID), Payments, and Mobile.
The company achieved notable improvements in EBITDA margin and overall profitability through a series of strategic acquisitions and divestitures, optimizing its business operations.
Despite substantial share appreciation, Valid's ADRs are deemed undervalued according to the Graham model, incorporating a significant margin of safety even when considering the Brazil equity premium risk.
Valid ADR, accessible to global investors, trades on Pink Sheets, presenting liquidity and information challenges.
🇧🇷 Atlas Lithium: Progress Has Been Made (Rating Upgrade) (Seeking Alpha) $
Atlas Lithium Corporation (NASDAQ: ATLX) has secured $50 million in investments and is set to begin production next year.
The company operates in Brazil and has two key projects: the Minas Gerais Lithium Project and the Northeastern Brazil Lithium Project.
The demand for lithium is expected to steadily increase, and ATLX is well-positioned to be a major supplier in the Brazilian market.
🇧🇷 Atlas Lithium Corporation: Almost Set For Commercial-Scale Production In 2024 (Seeking Alpha) $
Atlas Lithium Corporation (NASDAQ: ATLX) has experienced a surge in its stock price due to growing global demand for lithium and increased resource mobilization for its Brazilian mines.
The company has secured funding for its first lithium production, which is scheduled for Q4 2024, and aims to produce at least 300,000 tons of battery-grade spodumene concentrate per year by 2025.
Atlas Lithium has formed strategic partnerships with Chinese firms Chengxin Lithium Group (SHE: 002240) and Sichuan Yahua Industrial Group (SHE: 002497), who are key suppliers of lithium hydroxide to EV companies such as Tesla.
🇧🇷 Multiplan Empreendimentos: A Great Bet On Brazilian Malls, But Beware Of Valuations (Seeking Alpha) $
Multiplan Empreendimentos Imobiliaris SA (BVMF: MULT3) is a Brazilian real estate development company specializing in shopping malls with a substantial portfolio spread across seven states in Brazil.
The company shows post-pandemic recovery, with good operating results and excellent cash generation, and appears to have its indebtedness under control.
The shopping center sector in Brazil has experienced significant growth, but challenges such as macroeconomic factors and e-commerce competition could impact Multiplan's operating margins.
Despite retail sector slowdown, Multiplan's Q3 2023 results show revenue growth, with same-store sales up 8% and an impressive 96.1% occupancy rate.
Multiplan's valuation analysis, considering historical ratios, suggests its shares might be overvalued, with an intrinsic value of $11.63.
🇧🇷 Vitru Grows Market But Returns Remain Muted (Seeking Alpha) $
Vitru Limited (NASDAQ: VTRU) provides distance education courses in Brazil and has a hybrid approach combining online courses with periodic in-person meetings.
The company has a broad footprint with over 2,400 hubs in Brazil and operates in a large and distributed market.
While Vitru has made acquisitions and grown revenue and operating income, there are risks including ongoing long-term currency depreciation and political volatility in Brazil.
My discounted cash flow analysis indicates the stock may be fully valued at its present level, so I'm on Hold for Vitru Limited shares.
📰🔬 Further Suggested Reading
$ = behind a paywall
🇨🇳 Analysis: China's spy agency now watches for doomsayers (Nikkei Asia) & China's Spy Agencies Now Targeting The Country's Economic Pessimists (Zero Hedge)
China's leadership earlier this month held its annual conference to set economic policies for the coming year, but it was the intelligence agency that first reported what was decided there in detail.
Among the takeaways is this: A structural shift in China's economic policy planning is likely taking place.
The recent post hinting at a possible crackdown suggests that even those who explain the situation of China's waning economy using objective facts and figures could come under pressure. In the worst-case scenario, they risk being detained if they say too much.
Now when researchers and Chinese bureaucrats above a certain level meet foreign nationals they are subjected to a strict screening process and monitored for fear they might leak information.
🇨🇳 EM by EM #36: What Goldman got wrong about China in 2023 (Smart Karma) $
Main conclusions up-front: It’s getting harder to disentangle politics from price movements in China, with the government becoming more involved in the equity market.
In stark contrast to their U.S. counterparts, Chinese banks are grappling with the weight of growing savings from consumers and businesses.
This surge is impacting their profitability, while the real estate sector’s challenges continue to linger.
🇨🇳 Foreign investors unwind $33bn bet on China growth rebound (FT) $
Almost 90% of money that flowed into Chinese stocks in 2023 has left amid concern about economy
🌏 2023: Year of the great recovery for Asia casinos (GGRAsia)
The year 2023 saw many green shoots in the Asia-Pacific licensed casino sector after the long winter of Covid-19 restrictions.
🌐 Will emerging market equities play catch-up? (FT) $
Given current conflicts and a congested 2024 electoral calendar, investors need to take into account geopolitical risk
🌐 ESG, DEI, and the Rise of Fake Reporting (Brownstone Institute)
Many Asian companies are ensnared in the ESG compliance system because they are listed on Western financial exchanges. One such company is the Singapore-based ‘superapp’ Grab Holdings Limited (NASDAQ: GRAB), listed on the Nasdaq.
Grab’s business model is inherently not great for the safety of its drivers and the public. Grab uses routing and other technology to match riders with deliveries and to minimise both wait time for drivers and delivery times to customers. Scheduling is highly efficient because of the technology, which is to say that drivers are on tight schedules with razor-thin commissions.
To make a buck, the drivers for Grab (and its competitors) have to be brave and aggressive on the road. Some are real daredevils – the Evel Knievels of Southeast Asia – as we have personally witnessed. Not only that, but there is stiff competition in each of the markets in which Grab operates. Grab itself says that 72% of its five million drivers do double duty, performing both food deliveries and ride-hailing services.
The part of the report on road safety is of special interest, since Southeast Asia’s roads have a deservedly deadly reputation for motorcyclists, and much of the mayhem is provided by the delivery drivers themselves. For example, one study in Malaysia reported that 70% of food delivery motorcyclists drivers broke traffic rules during delivery, and the kinds of violations covered the waterfront: illegal stopping, running red lights, talking on the phone while riding, riding in the wrong direction, and making illegal U-turns. The statistics on crashes involving these drivers make for grim reading.
📅 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):
Bangladesh Bangladeshi National Parliament Jan 7, 2024 (d) Confirmed Dec 30, 2018
Taiwan Taiwanese Legislative Yuan Jan 13, 2024 (d) Confirmed Jan 11, 2020
Taiwan Taiwanese Presidency Jan 13, 2024 (d) Confirmed Jan 11, 2020
Pakistan Pakistani National Assembly Feb 8, 2024 (d) Confirmed Jul 25, 2018
Indonesia Indonesian Regional Representative Council Feb 14, 2024 (t) Confirmed Apr 17, 2019
Indonesia Indonesian Presidency Feb 14, 2024 (t) Confirmed Apr 17, 2019
Indonesia Indonesian House of Representatives Feb 14, 2024 (t) Confirmed Apr 17, 2019
Russian Federation Russian Presidency Mar 17, 2024 (t) Confirmed Mar 18, 2018
South Korea South Korean National Assembly Apr 10, 2024 (d) Confirmed Apr 15, 2020
India Indian People's Assembly Apr 30, 2024 (t) Date not confirmed Apr 11, 2019
Panama Panamanian National Assembly May 5, 2024 (t) Confirmed May 5, 2019
Panama Panamanian Presidency May 5, 2024 (t) Confirmed May 5, 2019
Mexico Mexican Senate Jun 2, 2024 (t) Date not confirmed Jul 1, 2018
Mexico Mexican Chamber of Deputies Jun 2, 2024 (t) Date not confirmed Jun 6, 2021
Mexico Mexican Presidency Jun 2, 2024 (t) Date not confirmed Jul 1, 2018
Croatia Croatian Assembly Jun 30, 2024 (t) Date not confirmed Jul 5, 2020
Croatia Croatian Assembly Jun 30, 2024 (t) Date not confirmed Jul 5, 2020
Mongolia Mongolian State Great Hural Jun 30, 2024 (t) Tentative Jun 24, 2020
South Africa South African National Assembly Jun 30, 2024 (t) Date not confirmed May 8, 2019
Czech Republic Czech Senate Sep 30, 2024 (t) Date not confirmed Sep 23, 2022
Georgia Georgian Parliament Oct 26, 2024 (d) Confirmed Oct 31, 2020
Georgia Georgian Presidency Nov 30, 2024 (t) Date not confirmed Nov 28, 2018
Uzbekistan Uzbekistani Legislative Chamber Dec 31, 2024 (t) Tentative Dec 22, 2019
📅 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):
J-Long Group Limited JL, Eddid Securities USA, 1.4M Shares, $4.00-6.00, $7.0 mil, 1/2/2024 Week of
We are a holding company incorporated in the Cayman Islands. Our operations are conducted by our Hong Kong subsidiary, JLHK. We manufacture and distribute reflective and non-reflective garment trims. We have been an authorized distributor of 3M Scotchlite reflective materials since 2000. (Incorporated in the Cayman Islands)
We are an established distributor in Hong Kong of reflective and non-reflective garment trims including, among others, heat transfers, fabrics, woven labels and tapes, sewing badges, piping, zipper pullers and drawcords. We have nearly 30 years of experience in the apparel industry and have served over 100 international outerwear and sportswear brands, uniform and safety workwear brands and fashion brands across the world. We offer a wide range of services to cater to our customers’ needs in reflective and non-reflect garment trims, including market trend analysis, product design and development and production and quality control. We work with our customers on their product requirements for the upcoming season, and we usually provide various suggestions on the product design and use of appropriate materials using our know-how and extensive industry knowledge we have accumulated over the years.
Competitive Strengths
We believe the following competitive strengths differentiate us from our competitors:
• Established market presence in the reflective materials industry with nearly 30 years of operating history;
• Diversified product portfolio consisting of reflective and non-reflective garment trims;
• Commitment to environmental sustainability and quality control;
• Strong and stable network of materials suppliers and manufacturing services suppliers;
• Stable business relationships with our customers; and
• Experienced and professional management team.
Our Strategies
We intend to pursue the following strategies to further expand our business:
• Strengthen our design and development capabilities;
• Expand our regional sales presence and marketing capabilities;
• Selectively pursue acquisitions and strategic investments; and
• Increase warehouse and storage capacity.
Corporate History and Structure
We are an established distributor in Hong Kong of reflective and non-reflective garment trims including, among others, heat transfers, fabrics, woven labels and tapes, sewing badges, piping, zipper pullers and drawcords. We have nearly 30 years of experience in the apparel industry and have served over 100 international brands globally, including outerwear and sportswear brands, uniform and safety workwear brands and fashion brands. We offer a wide range of services to cater to our customers’ needs in reflective and non-reflective garment trims, including market trend analysis, product design and development and production and quality control. We work with our customers on their product requirements for the upcoming season, and we usually provide various suggestions on the product design and use of appropriate materials using our know-how and extensive industry knowledge we have accumulated over the years.\On September 20, 2023, the Controlling Shareholder entered into individual subscription agreements with the pre-IPO shareholders, Capital Summit Enterprises Limited, Cherish Gloss Group Limited, Jipsy Trade Limited, Summer Explorer Investments Limited, Wise Total Solutions Group Limited, and Max Premier Enterprises Limited. According to these agreements, the Controlling Shareholder agreed to sell and each of the pre-IPO shareholders agreed to purchase 556,875 shares of JL.
*Note: Net income and revenue are for the year ended March 31, 2023.
(J-Long Group Limited filed an F-1/A on Nov. 9, 2023, and disclosed terms for its IPO: 1.4 million ordinary shares at a price range of $4.00 to $6.00 to raise $7.0 million. Background: J-Long Group Limited filed its F-1 on Oct. 18, 2023, without disclosing terms for its IPO. J-Long Group Limited submitted confidential IPO documents to the SEC on Dec. 30, 2022.)
Mingteng International Corp. MTEN, Univest Securities, 2.2M Shares, $4.00-6.00, $11.1 mil, 1/2/2024 Tuesday
We are a holding company incorporated in the Cayman Islands with operations conducted in China by our PRC subsidiary, Wuxi Mingteng Mould, incorporated in the PRC. We are an automotive mold developer and supplier in China. (Incorporated in the Cayman Islands)
Wuxi Mingteng Mould was established in December 2015, focusing on molds used in auto parts. We are committed to providing customers with comprehensive and personalized mold services, covering mold design and development, mold production, assembly, testing, repair and after-sales service. We provide a wide variety of products. Our main products are casting molds for turbocharger systems, braking systems, steering and differential system, and other automotive system parts. We also produce molds for new energy electric vehicle motor drive systems, battery pack systems, and engineering hydraulic components, which are widely used in automobile, construction machinery and other manufacturing industries.
Our production plant is located in Wuxi, China. We use technologically advanced procedures and equipment to produce molds. We use a mold manufacturing processing center, which allocates different machines to manufacture according to the size of the mold and the shape of the accessories.
Our mold development and production process are supported by our research and development (“R&D”) team (including experts such as foundry technologists and mold designers), using advanced Computer Aided Design (“CAD”), Computer Aided Manufacturing (“CAM”) and software technologies to analyze feasibility and validity of mold designs and specifications. Our quality and capability have obtained the 2019 Jiangsu High-tech Enterprise Certification and ISO9001:2015 certification.
In order to improve our technical level and service quality, we are committed to developing and producing molds through technological innovation. We believe that the design and quality of our molds are extremely important to the accuracy and efficiency of our customers’ manufacturing processes.
Our existing technical team consists of 11 people, all with professional knowledge in casting, machining, and automation. They analyze customers’ casting and processing technology, and propose solutions and improvement suggestions to customers to enhance the efficiency and safety of their products.
In addition, we believe our research and patents in the field of automotive casting molds have earned us recognition from our customers, and we have registered 19 authorized utility model and invention patents in China.
We are a supplier to leading major customers in the automobile parts manufacturing industry and have established long-term business relationships with them, most of whom have more than 5 years of business relationship with us. Our customers include three Chinese listed companies: Kehua Holding Co., Ltd. (ticker: 603161), Wuxi Lihu Booster Technology Co., Ltd. (ticker: 300580), and Wuxi Best Precision Machinery Co., Ltd. (ticker: 300694). Our close relationships with these major customers demonstrate our strengths in technical capabilities, service reputation and product quality.
Our revenue mainly comes from customized mold production, mold repair and machining services. The revenue derived from customized mold production accounted for 84.3% and 80.4% of our total revenue for the six months ended June 30, 2023 and 2022, respectively. The revenue derived from mold repair accounted for 13.4% and 15.6% of our total revenue for the six months ended June 30, 2023 and 2022, respectively. The revenue derived from machining services accounted for 2.3% and 4.0% of our total revenue for the six months ended June 30, 2023 and 2022, respectively.
The revenue derived from customized mold production accounted for 82.0% and 83.9% of our total revenue for the years ended December 31, 2022 and 2021, respectively. The revenue derived from mold repair accounted for 14.2% and 14.7% of our total revenue for the years ended December 31, 2022 and 2021, respectively. The revenue derived from machining services accounted for 3.8% and 1.4% of our total revenue for the years ended December 31, 2022 and 2021, respectively.
*Note: Net income and revenue are for the 12 months that ended June 30, 2023.
(Mingteng International Corp. filed an F-1/A dated Nov. 22, 2023, in which it increased its IPO’s size by 11.25 percent to 2.23 million shares (2,225,000 shares) – up from 2.0 million shares originally – with the disclosure that the selling stockholder, Betty Chen Limited, would sell 225,000 shares. The price range remained the same – at $4.00 to $6.00 – to raise $11.13 million – up from $10.0 million initially. Background: Mingteng International Corp. filed an F-1/A dated Nov. 1, 2023, in which it disclosed the rest of the terms for its IPO. Mingteng International filed its F-1 on March 29, 2023, and disclosed partial terms for its IPO – the price range of $4.00 to $6.00 – without stating the number of shares. The company submitted confidential IPO documents to the SEC on Nov.10, 2022.)
🏁 Emerging Market ETF Launches
Climate change and ESG are some recent flavours of the month for most new ETFs. Nevertheless, here are some new frontier and emerging market focused ETFs:
11/07/2023 - Global X MSCI Emerging Markets Covered Call ETF EMCC - Equity, leverage
11/07/2023 - Avantis Emerging Markets Small Cap Equity ETF AVEE - Active, equity, small caps
09/22/2023 - Matthews Asia Dividend Active ETF ADVE - Active, equity, Asia
09/22/2023 - Matthews Pacific Tiger Active ETF ASIA - Active, equity, Asia
09/22/2023 - Matthews Emerging Markets Sustainable Future Active ETF EMSF - Active, equity, ESG
09/22/2023 - Matthews India Active ETF INDE - Active, equity, India
09/22/2023 - Matthews Japan Active ETF JPAN - Active, equity, Japan
09/22/2023 - Matthews Asia Dividend Active ETF ADVE - Active, equity, Asia
08/25/2023 - KraneShares Dynamic Emerging Markets Strategy ETF KEM - Active, equity, emerging markets
08/18/2023 - Global X India Active ETF NDIA - Active, equity, India
08/18/2023 - Global X Brazil Active ETF BRAZ - Active, equity, Brazil
07/17/2023 - Matthews Korea Active ETF MKOR - Active, equity, South Korea
05/18/2023 - Putnam Emerging Markets ex-China ETF PEMX - Active, value, growth stocks
05/11/2023 - JPMorgan BetaBuilders Emerging Markets Equity ETF BBEM - Passive, large + midcap stocks
03/16/2023 - JPMorgan Active China ETF JCHI - Active, equity, China
03/03/2023 - First Trust Bloomberg Emerging Market Democracies ETF EMDM - Principles-based
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:
11/11/2023 - Global X China Innovation ETF - KEJI
11/11/2023 - Global X Emerging Markets Internet & E-commerce ETF - EWEB
11/09/2023 - Franklin FTSE South Africa ETF - FLZA
10/27/2023 - Simplify Emerging Markets Equity PLUS Downside Convexity - EMGD
10/20/2023 - WisdomTree India ex-State-Owned Enterprises Fund - IXSE
10/20/2023 - WisdomTree Chinese Yuan Strategy Fund - CYB
10/20/2023 - Loncar China BioPharma ETF - CHNA
10/18/2023 - KraneShares Emerging Markets Healthcare Index ETF - KMED
10/18/2023 - KraneShares MSCI China ESG Leaders Index ETF - KSEG
10/18/2023 - KraneShares CICC China Leaders 100 Index ETF - KFYP
10/16/2023 - Strategy Shares Halt Climate Change ETF - NZRO
09/20/2023 - VanEck China Growth Leaders ETF - GLCN
08/28/2023 - Asian Growth Cubs ETF - CUBS
08/01/2023 - VanEck Russia ETF - RSX
07/07/2023 - Emerge EMPWR Sustainable Emerging Markets Equity ETF - EMCH
06/23/2023 - Invesco PureBeta FTSE Emerging Markets ETF - PBEE
06/16/2023 - AXS Short China Internet ETF - SWEB
04/11/2023 - SPDR Bloomberg SASB Emerging Markets ESG Select ETF - REMG
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 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 most ETF lists are updated).
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Emerging Market Links + The Week Ahead (January 2, 2024) was also published on our website under the Newsletter category.