Emerging Market Links + The Week Ahead (October 16, 2023)
China wants to help consumers spend, EM has an earnings problem, Argentina brings charges against Milei, Mexico airport stocks struggle, EM stock picks and the week ahead for emerging markets.
China’s top financial regulator has urged lenders to dramatically expand lending to help consumers buy more cars and create consumer credit products to help new college graduates. At the same time, the country is grappling with a property bubble who’s origins, according to a recent article, go back to the one-child policy and completely off the mark assumptions about the amount of arable land the country has.
In addition, Polish elections were held on Sunday and it’s unclear yet who will be able to form a government. If its the opposition, look for Poland to become less independent of Brussels when it comes to key issues like immigration and climate change - the later could will impact Polish energy and utility stocks who depend on coal.
Finally, Argentina’s elections are this coming Sunday. The government has decided to do what seems to be in vogue for dealing with unapproved or populist candidates - they are slapping charges on the populist front runner for campaigning on dollarization. It will be interesting to see if that actually helps him win more votes with fed-up voters. Argentina might be an economic basket case , but its still a key player in agricultural commodities and has massive lithium reserves.
🔬Emerging Market Stock Pick Tear Sheets
$ = behind a paywall
🇵🇱 🇭🇺 🇨🇿 🇷🇴 Central and Eastern Europe Fund Holdings (Q3 2023)
Eastern European stock picks that are the holdings of the closed-end Central and Eastern Europe Fund Inc (NYSE: CEE) plus key Czech Republic and Hungary economic stats.
🇨🇳 CMBI Research China & Hong Kong Stock Picks (September 2023)
Includes: Prada SpA, Ke Holdings, JS Global Lifestyle, Shennan Circuits, Shengyi Technology, CR Gas, ENN Energy Holdings, YUM China, Luxshare Precision Industry, JNBY Design, EVA Precision Industrial Holdings, Tongda Group Holdings, Will Semiconductor, China Three Gorges Renewables Group Co Ltd (CTGR Group), Trip.com, Ping An, Joinn Laboratories China, Haier Smart Home, Akeso, China MeiDong Auto Holdings, Yunkang Group, China Mengniu Dairy Company, BYD Electronic International, TK Group Holdings, Haidilao International Holding, Nayuki Holdings, China Resources Mixc Lifestyle Services and SANY International
20+ high conviction stock ideas: Li Auto, Geely Automobile, SANY International, Zhejiang Dingli, CR Power, JNBY, Vesync, CR Beer, Tsingtao, Kweichow Moutai, China Tourism Group Duty Free (CTGDF), Innovent Biologics, China Life, Ping An, AIA, Tencent, Pinduoduo, NetEase, Alibaba, Kuaishou, CR Land, BYDE, Wingtech & Kingdee
📰🔬 Emerging Market Stock Picks / Stock Research
$ = behind a paywall
🇨🇳 China's EV war: only the strongest will survive as BYD, Xpeng's dominance knock out 15 pretenders amid supply glut (SCMP) (Archived Article)
Total Capital raised has exceeded 100 billion yuan, and the national sales target of 6 million units set for 2025 has already been exceeded
At least 15 once-promising EV start-ups with a combined annual production capacity of 10 million units have either collapsed or been driven to the verge of insolvency
🇨🇳 XPeng suspends supply chain chief in internal graft crackdown (Caixin) $
Chinese electric-car maker XPeng (NYSE: XPEV) suspended its supply chain chief as part of an internal crackdown on corruption.
The New York-traded upstart Monday announced the suspension of Li Feng, a vice president in charge of supply chains, on suspicion of corruption, people familiar with the matter told Caixin. Several other employees are also involved in the investigation, and the police stepped in, the sources said.
🇨🇳 Ecarx stuck at the China gate in global smartcar race (Bamboo Works)
The digital cockpit maker has announced several new deals lately, but all involve Chinese carmakers and brands connected to its controlling Chinese shareholder
Ecarx has announced a number of big new sales since May, but all are to China-based car makers and brands tied to its controlling stakeholder, Geely Automobile Holdings (HKG: 0175) founder Li Shufu
The company’s revenue rose 45% in the second quarter as it put more focus on its digital cockpit business
🇨🇳 Anta Sports (2020 HK): Strong 3Q23 Update (SmartKarma) $
ANTA Sports Products (HKG: 2020 / FRA: AS7 / OTCMKTS: ANPDY / OTCMKTS: ANPDF) announced a set of strong 3Q23 operating data yesterday after market close.
Both Anta and Fila brands performed well in a challenging macro environment in China in 3Q23, with 3Q22 being a high base.
Another bright spot is that other brands outside of Anta and Fila grew 45-50% yoy in 3Q23, with Descente up 40-45% yoy and Kolon up 65-70% yoy.
🇨🇳 Weilong tries to spice up sales with new ‘third front’ strategy (Bamboo Works)
The spicy snack food maker’s monthly sales from its recently launched specialty snack store initiative grew 38.1% in August from July
Weilong Delicious Global Holdings Ltd. (HKG: 9985) sold 371,800 packages of its trademark spicy snacks in August through its new specialty retail channels, up nearly 40% from the previous month
Nearly 90% of the company’s sales now come from offline distributors, with the rest from online channels
🇨🇳 Tian Tu Capital fails to excite with China’s fading consumer story (Bamboo Works)
Note: The company has a portfolio of consumer orientated investments…
China’s first venture capital firm to list in Hong Kong got a tepid reaction in its first week as a listed company, as investors worried about its shrinking profits
One of the most experienced in China’s vast field of 7,000 venture capital investors, Tian Tu Capital (HKG: 1973) has become the first from its class to list in Hong Kong
A sharp slowdown in Chinese venture capital investment may have dampened enthusiasm for its IPO shares
🇨🇳 China Tourism Group Duty Free (1880 HK): Weak Golden Week Trends And Still Expensive (SmartKarma) $
China Tourism Group Duty Free (CTGDF) (HKG: 1880 / SHA: 601888) announced preliminary results for 3Q23 which came in below market expectations.
Compared to the previous quarter 2Q23, sales declined by 1% q-o-q, while net profit margin declined from 10.4% in 2Q23 to 8.9% in 3Q23.
The company (H-share) is trading at 26x 2023E PE and 23x 2024E PE, still expensive as visibility is low and derating continues.
🇨🇳 Haidilao says ‘Hi’ to new budget brand (Bamboo Works)
Also see: Haidilao (HKG: 6862 / FRA: 8HI / OTCMKTS: HDALF): Cooking Up a Turnaround?
The popular hotpot chain’s rollout of its lower-priced Hailao brand comes as diners cut back their spending in China’s weakening economy
Haidilao International Holding (HKG: 6862 / FRA: 8HI / OTCMKTS: HDALF)’s new Hailao budget hotpot chain got a generally positive reception during China’s recently concluded weeklong National Day Holiday
Hailao’s average spending of 79 yuan per customer is 23% lower than Haidilao’s average
🇨🇳 China Overseas Land & Investment (688 HK) (Asian Century Stocks) $
But despite the negative headlines, China’s state-owned enterprise (“SOE”) developers including China Overseas Land & Investment (HKG: 0688 / OTCMKTS: CAOVF), China Resources Land or CR Land (HKG: 1109 / FRA: CHZ / OTCMKTS: CRBJY / CRBJF) and Yuexiu Property (HKG: 0123 / FRA: GUZA / OTCMKTS: YUPRF) are doing just fine. They continue to enjoy low-cost funding from China’s state-owned banks. And buyers feel at ease buying properties from the SOE developers, knowing that they're not going to fail.
Make no mistake though: COLI has also had its fair share of challenges. Its earnings dropped in 2022, due to difficulties of completing projects during the zero-COVID policy. Ordinary citizens have also found it difficult to access the mortgage market.
🇨🇳 Small developers suffer quietly in shadows of Evergrande, Country Garden (Bamboo Works)
Tanking shares and missed debt payments for smaller, privately owned names like Yuexiu Property (HKG: 0123 / FRA: GUZA / OTCMKTS: YUPRF), Times China (HKG: 1233 / FRA: T2H / OTCMKTS: TMPPF) and China Aoyuan Group (HKG: 3883 / FRA: 47C / OTCMKTS: CAOYF) are a lesser-known story in China’s stressed-out real estate sector
Shares of smaller developers like Yuzhou and Aoyuan have plunged this year under similar, if not bigger, liquidity pressures to those faced by giants like Evergrande and Country Garden
Moody’s downgraded its outlook for China’s entire property sector to ‘negative’ last month
🇨🇳 Unpaid debts, fleeing directors leave Sino-Ocean Group in dire straits (Bamboo Works)
The heavily-indebted developer is betting its life on future property sales after halting repayment of its offshore debt
Sino-Ocean Group (HKG: 3377 / FRA: 3SD / OTCMKTS: SIOLF)’s interim loss this year ballooned to nearly 18.4 billion yuan, a 16-fold increase from a year earlier
The developer is also sitting on 91.9 billion yuan in short- and long-term borrowings, with a net debt ratio of 326%.
🇨🇳 Meituan: Capturing The Sweet Spot In China’s Recovery (KraneShares)
Since reopening from zero COVID, Chinese consumers are behaving differently than before. They are spending more on domestic travel, dining, and value-for-money goods than the home appliances, new cars, and furniture purchases that characterized their preferences during the pandemic. In this new wave of spending, one company stands out from the crowd: Meituan (SEHK: 3690). Although it is most well-known for food delivery, Meituan serves consumers in a variety of ways including travel, dining deals, experiences, and more. We believe Meituan’s recent results illustrate China internet earnings’ potential resilience to economic cycles.
In this edition’s theme highlight, we interview Meituan’s investor relations (IR) team to learn how Meituan is built for this moment in China. We also asked them about competition from short video platform Douyin, China’s version of TikTok, and what to expect from Meituan in the future.
🇨🇳 How Temu’s team was built (Momentum Works)
A year after its launch, Pinduoduo or PDD Holdings (NASDAQ: PDD)’s cross-border ecommerce platform Temu is on the right track: it is now available in 47 countries, generating 100s of millions of GMV each week. The upcoming festive shopping season will probably give it a further boost.
Temu has definitely evolved a lot since we published the “Who is Temu” report back in February this year. But one question many have been asking is - what exactly is the team behind Temu? How could they achieve what they have achieved?
Interestingly, most of the top lieutenants of Temu honed their skills through Pinduoduo’s grocery delivery service - Duoduomaicai. How did they do that?
Today, we are sharing excerpts of a full article of the rise of Pinduoduo’s core team, originally published by our friends at Leiphone in Chinese.
The article contains a lot of unfiltered, candid details and accounts, which gives you a good glimpse of the team, the culture and the relentless pursuit of efficiency.
🇨🇳 🇮🇳 Hengrui Pharma signs licensing deal to sell cancer drug in India (Caixin) $
Jiangsu Hengrui Pharmaceuticals (SHA: 600276) partnered with Dr Reddy’s Laboratories (NYSE: RDY) to promote its oral breast cancer treatment in India, becoming the latest tie-up between Chinese and foreign drugmakers as Chinese companies further expands into lucrative overseas markets.
Hengrui, one of China’s largest innovative drug developers, said Sunday that it signed an agreement with the India-based drugmaker granting it exclusive rights to develop and commercialize Hengrui’s self-developed Pyrotinib Maleate Tablets, or Pyrotinib in short, in the South Asian country.
🇹🇼 Taiwan Construction: A Pair Trade Between CTCI and Ruentex Development (SmartKarma) $
In this insight, we discuss a pair trade between CTCI Corporation (TPE: 9933) (long) and Ruentex Development (TPE: 9945 / OTCMKTS: RUEXF) (short).
We believe CTCI Corp is more attractive than Ruentex Development mainly due to different types of business mix and valuations.
CTCI's construction of refinery plants, waste water treatment, and power plants could thrive in higher oil price environment. Ruentex's construction of residential and commercial buildings could experience lower demand.
🇰🇷 EcoPro Materials IPO: The Bull Case (SmartKarma) $
Ecopro Materials (ECO123 KS) is a leading player in the electrode material industry. It is seeking to raise up to US$500 million in a KRX IPO.
EcoPro Materials is offering 14.5 million shares at an IPO price range of KRW36,200-46,000 per share. Book building runs from 30 October to 3 November, with pricing on 7 November.
The bull case rests on attractive addressable markets, aggressive production capacity expansion, ambition to be the leading non-Chinese player, strong revenue growth and improving cash conversion cycle.
🇰🇷 EcoPro Materials IPO: The Bear Case (SmartKarma) $
Ecopro Materials (ECO123 KS) is a leading player in the electrode material industry. It is seeking to raise up to US$477 million in a KRX IPO.
In EcoPro Materials IPO: The Bull Case, we highlighted the key elements of the bull case. In this note, we outline the bear case.
The bear case rests on weakening sector market sentiment, margin pressure likely to persist, cash burn, elevated leverage and high related-party transactions.
🇰🇷 Kiwoom Securities: Announces Material Improvement in Shareholder Return Policies (SmartKarma) $
On 10 October, Kiwoom Securities (KRX: 039490) announced shareholder friendly policies. This could lead to Kiwoom Securities outperforming other major Korean securities companies in the next several months.
First, the company will return more than 30% of its net profit to the shareholders in the next three years through dividends and share buybacks/cancellations of treasury shares.
In addition, Kiwoom Securities plans to cancel all 1.4 million treasury shares it currently holds, representing 5.3% of outstanding shares.
🇰🇷 Cosmecca Korea (241710 KS): Strong 2Q23 Result; Favorable Industry Tailwind to Enhance the Glow (SmartKarma) $
Cosmecca Korea (KOSDAQ: 241710) clocked revenue of KRW115.7B (up 15% YoY) and operating profit of KRW11.2B (up 265% YoY) in Q223. Operating profit margin expanded 670bps YoY to 9.7%.
Cosmecca is a key beneficiary of the increasing global demand for the affordable indie cosmetics brands. These brands are now outpacing the overall beauty and personal care industry.
Since reporting strong Q1 result in May, Cosmecca Korea shares are on fire. Cosmecca is expected to continue its growth momentum due to strong global demand for affordable cosmetics.
🇬🇪 Will Georgia’s Eu Membership Candidate Status Bring Further Investment Gains? (Undervalued Shares)
Surprisingly, its London-listed bellwether stocks have recently gone from strength to strength. Since spring 2020, Bank Of Georgia Group Plc (LON: BGEO / FRA: GEB / OTCMKTS: BDGSF) is up 350%, and Tbc Bank Group Plc (LON: TBCG / OTCMKTS: TBCCF) has gained 313%. The stock of Georgia Capital Plc (LON: CGEO / FRA: 2IX / OTCMKTS: GRGCF) is up 273%, and the investment holding significantly increased its net asset value. [See our August 22nd post for more info about these stocks]
Over the next three months, a decision is expected as to whether Georgia will become an official candidate for membership of the European Union.
During a trip to the country to attend a friend's wedding, I had a closer look at its unique and complicated circumstances.
🇧🇷 Banco Bradesco: Macro Woes Leave Shares Undervalued (Seeking Alpha) $
Banco Bradesco (NYSE: BBD) is facing no shortage of headwinds right now, with pressure on net interest income, sluggish fee income growth and high provisioning expenses chief among them.
Net interest income will get some support now that rates in Brazil are tentatively heading lower, and I'm hopeful that better-than-expected economic performance will help with credit quality.
These shares look cheap relative to their recent historical marks, though a combination of macro, Bradesco-specific, and general emerging market risks are things to consider.
🇧🇷 EZ Tec: Time to Buy The Best Homebuilder in Brazil? (Brazil Stocks) $
Today we are going to talk about the best homebuilder in Brazil: Ez Tec Empreendimentos E Participacoes (BVMF: EZTC3).
The Zarzur family, controller of EZ Tec, holds 51.11% of the shares through various vehicles. There are no relevant minority shareholders.
In the beginning, they operated mainly in the middle and high income segment.
With the company's growth, today they are in more segments:
🇨🇱 Embotelladora Andina: Downside Risks Remain, Reiterate Neutral (Seeking Alpha) $
Embotelladora Andina Sa (NYSE: AKO.A / AKO.B) reported mixed Q2 earnings with volume growth in Brazil and Paraguay, but declining volumes in Argentina and moderating pricing actions.
Inflation in Argentina continues to rise, impacting consumer confidence and recovery.
Gross margins may be squeezed going forward due to continued elevated sugar prices partially offset by tailwinds from PET costs and SG&A deleverage will further weigh in on operating margins.
🇨🇴 Bancolombia: Is It Really The Right Time To Invest In LatAm Banks? (Seeking Alpha) $
Bancolombia (NYSE: CIB) faces risks from rising interest rates and the growing popularity of e-commerce/fintech in Latin America.
The stock has been volatile, with periods of extreme growth and massive drops.
The bank's expansion into different geographies has helped mitigate risks, but investors should watch for resource allocation.
🇲🇽 Grupo México: Shares Remain Under Downward Pressure, 'Hold' For Now (Rating Upgrade) (Seeking Alpha) $
Grupo Mexico (BMV: GMEXICOB / FRA: 4GE / OTCMKTS: GMBXF)'s rating has been changed from a "Sell" to a "Hold".
The company's stock price is likely to face downward pressure due to a very uncertain scenario for copper prices amid the looming economic recession.
The chances of success of this strategy are good and the risk of losing a good capital gain by not taking advantage of these levels is low.
🇲🇽 Mexico shares suffer worst daily drop in nearly 3 years, battered by airport operators (Reuters)
NOTE: Our May 2nd post discussed why airport stocks are a good investment and which Mexican airport stock based on having the right management team in place for the long term who allocates capital appropriately.
Mexican brokerage Vector said in a note the changes looked to be negative for the sector.
"The possible reduction in airport use fees (TUA), as well as non-aeronautical income, could have a negative impact on the profitability and generation of free cash flow at the airport groups," Vector analyst Marco Antonio Montanez wrote.
Mexico's government has had a rocky relationship with the sector dating back to its earliest days.
🇲🇽 Grupo Aeroportuario del Sureste: Exceptional Risk Reward (Seeking Alpha) $
Mexican airport regulator changes tariff formula, causing sell-off in Grupo Aeroportuario del Sureste (ASUR) (NYSE: ASR) shares.
Three scenarios analyzed: fair stock price with 44% tariff cut, 8% tariff cut with upside potential, debt transfer with 32% upside potential.
ASR stock presents a good risk-reward opportunity despite government action.
🇲🇽 Grupo Aeroportuario del Pacífico: No Easy Way Out (Seeking Alpha) $
Grupo Aeroportuario del Pacífico or GAP (NYSE: PAC / BMV: GAPB)
Mexican airport regulator's potential change to tariff formula caused shares to plummet.
The current share price already incorporates a 15% tariff cut.
Other scenarios offer limited upside potential, making GAP shares a weak risk-reward option.
🇲🇽 Grupo Aeroportuario del Centro Norte: Crisis Creates Opportunity (Seeking Alpha) $
Grupo Aeroportuario del Centro Norte or OMA (NASDAQ: OMAB / BMV: OMA)
Mexican airport regulator's potential change to tariff formula caused shares to plummet.
The current share price incorporates an 18% tariff cut, which seems harsh.
Two other scenarios suggest a potential upside from current levels, but the situation remains speculative.
📰🔬 Further Suggested Reading
$ = behind a paywall
🇨🇳 China tells lenders to pour money into car and consumer credit (Caixin) $
China’s top financial regulator urged lenders to dramatically expand lending to a broad swath of businesses, help consumers buy more cars and create consumer credit products to help new college graduates.
China’s economy is mired in a sustained real estate slump with weak growth and lagging consumption. The financial regulator’s sweeping call for more lending to consumers and a laundry list of industries and businesses large and small is part of the government’s ongoing effort to spur the economy.
🇨🇳 A Chinese Bubble Long in the Making (Project Syndicate)
But why did a property bubble emerge in the first place? Like so many other problems in China today, this one can be traced back to the one-child policy that the government adopted in 1980 – a decision that would fundamentally reshape the country’s economic, political, and diplomatic trajectory. At the time, Chinese policymakers believed that the country had only around 1.4 billion mu (a Chinese metric equal to 1/15th of a hectare) of arable land, and per capita arable land only 40% the size of India’s. So, they concluded that births would need to be capped, and urban land restricted.
This conclusion proved to be deeply flawed. For starters, in 1996, satellite telemetry revealed that China actually had 1.95 billion mu of arable land.
🇦🇷 Prosecutor files case against Argentina’s frontrunner Javier Milei days before presidential election (AP)
See: The Flawed Global X MSCI Argentina ETF's Holdings (September 2023)
A prosecutor launched a criminal case Friday against Argentina’s frontrunner in this month’s presidential elections, accusing Javier Milei of deliberately causing a drop in the Argentine currency when he encouraged citizens not to save in pesos.
Milei denounced the move as political persecution, just days ahead of the Oct. 22 polling.
🇦🇷 FEATURE: Argentina election raises stakes for energy, mining and agriculture outlook (S&P)
Voters signal historic shift in favor of market-oriented policies
Top candidates eye higher exports of key commodities
Market reforms, infrastructure could boost crude oil, gas production
🌐 Emerging Markets Have An Earnings Problem (The Emerging Markets Investor)
The past decade has been a disaster for investors in emerging markets because nominal earnings measured in dollars have not grown.
There are several reasons for this earnings stall:
🌐 Mapped: Which Countries Have the Highest Investment Risk? (Visual Capitalist)
📅 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):
EcuadorEcuadorian PresidencyOct 15, 2023 (d) Confirmed Aug 20, 2023PolandPolish SejmOct 15, 2023 (t) Confirmed Oct 13, 2019PolandPolish SenateOct 15, 2023 (t) Confirmed Oct 13, 2019PolandReferendumOct 15, 2023 (t) Date not confirmed Sep 6, 2015Argentina Argentinian Chamber of Deputies Oct 22, 2023 (d) Confirmed Oct 24, 2021
Argentina Argentinian Senate Oct 22, 2023 (d) Confirmed Nov 14, 2021
Argentina Argentinian Presidency Oct 22, 2023 (d) Confirmed Aug 13, 2023
Pakistan Pakistani National Assembly Nov 6, 2023 (t) Postponed Jul 25, 2018
Egypt Egyptian Presidency Dec 10, 2023 (d) Confirmed Mar 26, 2018
Chile Referendum Dec 17, 2023 (t) Confirmed Sep 4, 2022
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 Jan 31, 2024 (t) Postponed 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
South Korea South Korean National Assembly Apr 10, 2024 (t) Confirmed Apr 15, 2020
Panama Panamanian National Assembly May 5, 2024 (t) Confirmed May 5, 2019
Panama Panamanian Presidency May 5, 2024 (t) Confirmed May 5, 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):
🇸🇬 WeBuy Global Ltd. WBUY EF Hutton, 3.5M Shares, $4.00-4.50, $14.9 mil, 10/16/2023 Week of
WeBuy Global is an e-commerce platform that connects Southeast Asian social media users with similar interests in food (groceries) and travel. The company, based in Singapore, caters to customers in Singapore and Indonesia. (Incorporated in the Cayman Islands)
*Note: Net loss and revenue figures are in U.S. dollars for the year that ended Dec. 31, 2022.
(Note: WeBuy Global Ltd. cut the size of its IPO to 3.5 million shares – down from 4.0 million shares – and kept the price range at $4.00 to $4.50 – to raise $14.88 million, according to an F-1/A filing dated Aug. 3, 2023. In that same F-1/A filing, WeBuy Global Ltd. changed its sole book-runner to EF Hutton, replacing Univest.)
(Background: WeBuy Global Ltd. revised its IPO terms in an F-1/A filing dated June 16, 2023, as follows: The price range is $4.00 to $4.50 – replacing the previous assumed IPO price of $4.00 – and the number of shares was kept at 4.0 million shares – to raise $17.0 million. Previously: WeBuy Global revised the terms of its IPO in an F-1/A filing dated June 2, 2023: The IPO will consist of 4.0 million shares – with WeBuy Global offering 3.175 million shares and the selling stockholder selling 825,000 shares – at $4.00 (same as before) to raise $16.0 million. Previously the secondary portion of the IPO had amounted to 34 percent of the stock offered in the deal. Background: WeBuy Global filed its F-1 on May 3, 2023; it submitted confidential IPO documents to the SEC on Sept. 21, 2022.)
🇭🇰 🇰🇾 🇦🇺 Globavend Holdings Ltd. GVH, R.F. Lafferty & Co., 1.9M Shares, $4.00-5.00, $8.4 mil, 10/19/2023 Thursday
We are a holding company incorporated in the Cayman Islands with operations conducted by our Hong Kong subsidiary, Globavend HK. Since June 2023, we have established our principal executive office in Perth, Australia. (Incorporated in the Cayman Islands)
Founded in 2016, we are an emerging e-commerce logistics provider providing end-to-end logistics solutions in Hong Kong, Australia and New Zealand. Our business spans Hong Kong, 4 cities in Australia and in New Zealand through our own business presence and the presence of our service providers. Our customers are primarily enterprise customers, being e-commerce merchants, or operators of e-commerce platforms, in providing business-to-consumer (B2C) transactions.
As an e-commerce logistics provider, we provide integrated cross-border logistics services from Hong Kong to Australia and New Zealand, where we provide customers with a one-stop solution, from pre-carriage parcel drop off to parcel consolidation, air-freight forwarding, customs clearance, on-carriage parcel transportation and delivery. We rely our own proprietary all-in-one shipping solution, which has been or can be connected to the customer’s own IT systems (such as enterprise resource planning (ERP) systems, customer relationship management (CRM) systems, booking management systems or point of sale (POS) systems) on one end and the transportation management systems (TMS) of our ground transportation service providers on the other end, to facilitate effective logistics management.
(Globavend Holdings Ltd. filed its F-1 and disclosed terms for its IPO on Aug. 23, 2023.)
🇰🇾 Prospect Energy Holdings Corp. AMGSU, EF Hutton, 7.5M Shares, $10.00-10.00, $75.0 mil, 10/23/2023 Week of
We are a blank check company focused on the Asia Pacific region, excluding China, and the clean energy sector. Each unit consists of one share of stock and one warrant redeemable for one share of stock. (Incorporated in the Cayman Islands)
While we may pursue a target in any industry, section or geography, we intend to focus our search for a target business in Asia Pacific, excluding China, (with emphasis on Canada and Australia) for companies engaged in the clean energy industry, concentrating on the utilization of “clean coal” or other evolving segments in the clean energy ecosystem, particularly the use of carbon, hydrogen and renewable energy. Other areas may include energy storage, distributed energy, zero-emission transportation, carbon utilization, low or carbon-free industrial applications and sustainable manufacturing.
We believe that clean energy and sustainability solutions are revolutionizing many traditional industries and creating numerous investment opportunities which are driven by important long-term global trends, such as the cost of carbon emissions, regulatory incentive programs, and consumers’ increasing value placed on clean energy products and services, in addition to advancements in technology providing for more cost-effective solutions and alternatives to fossil fuels. We believe that the regulatory frameworks incentivizing the adoption of sustainable practices and technologies will become increasingly favorable to the sectors that we are targeting. These trends provide long-term benefits for companies that develop and distribute services and products that take part of an integrated approach to the continued decarbonization of the economy.
We intend to target the growth-oriented subsectors of the clean and sustainable energy industry that present particularly attractive investment opportunities. We do not intend to acquire early-stage start-up companies, companies with speculative business plans or companies that are excessively leveraged. We are not, however, required to complete our initial business combination with a clean and sustainable energy business and, as a result, we may pursue a business combination beyond that sector and scope. We will seek to acquire high-quality businesses that can generate attractive, risk-adjusted returns for shareholders.
We believe our management team is uniquely positioned to source and evaluate deals globally, with strong relationships in Asia Pacific (and particularly in Canada and Australia), which may offer attractive growth prospects with advantageous valuation multiples. We believe that our expertise and experience in major worldwide markets, including Asia Pacific, give us a robust pool of targets and increasing the possibility to maximize returns. In addition, our management team has extensive expertise in the evolution of clean energy, especially in Asia Pacific, which will enable us to better evaluate and source target companies. Our management team is also experienced in executing complex financial structures for large scale projects in the energy industry in Asia Pacific, Canada and Australia which will give us access to leaders in the energy industry and the ability to facilitate future energy projects. We believe this approach, as well as our management team’s recognized track record of completing acquisitions across a variety of subsectors within the clean energy industry will provide meaningful opportunities to drive value creation for shareholders.
(Note: Prospect Energy Holdings Corp. slashed its SPAC IPO by 75 percent to 7.5 million units – down from 30.0 million units – at $10.00 each – to raise $75.0 million in an S-1/A dated Aug. 24, 2023. The S-1 was filed May 3, 2023.)
🏁 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:
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 - Value + growth stocks
05/11/2023 - JPMorgan BetaBuilders Emerging Markets Equity ETF BBEM - 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:
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).
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 (October 16, 2023) was also published on our website under the Newsletter category.