Emerging Market Links + The Week Ahead (October 9, 2023)
Estimating Chinese officials unofficial income, Indian meme small cap frenzy, Macau recovery, PE looks for deals in India & Indonesia, EM stock picks and the week ahead for emerging markets.
Xi has been cracking down on corruption, but a recent research paper has made some interesting conclusions about Chinese corruption based on observed home purchase behaviour:
An average official’s unofficial income is 83% of her official income; this percentage increases sharply with the official’s rank.
About 13% of the officials have an unofficial income, and the proportion also increases with rank.
Government officials are not underpaid, and their unofficial incomes are not a compensation for low government salaries. Additionally, evidence suggests unofficial incomes have declined since the recent anti-corruption campaign.
Meanwhile and in India, the FT has reported how retail investors sharing tips on WhatsApp have helped to drive huge gains in some previously-troubled small cap firms’ shares with the buying spree is said to have some echoes of the US’s meme stock frenzy of 2021. I would note that stock markets in other Asian countries (e.g. Vietnam, Taiwan, etc.) have already experienced the same sort of speculative bubbles by retail investors around two decades ago - meaning this is nothing new.
Finally, Poland will be having elections next weekend and we have taken a look at all the holdings of the iShares MSCI Poland ETF (NYSEARCA: EPOL).
Emerging Market Stock Pick Tear Sheets
$ = behind a paywall
🇮🇳 moneycontrol India Stock of the Day (September 2023)
Includes: Lemon Tree Hotels, Jamna Auto Industries, KEC International, Ujjivan Small Finance Bank, Navneet Education, Krsnaa Diagnostics, Kirloskar Ferrous Industries, Gland Pharma, Indraprastha Gas (IGL), Sula Vineyards, Equitas Small Finance Bank, Seshasayee Paper and Boards, Thangamayil Jewellery, Va Tech Wabag, National Mineral Development Corporation (NMDC), BSE Ltd, Vijaya Diagnostic Centre and Divi's Laboratories
🇵🇱 iShares MSCI Poland ETF Holdings Ahead of Polish Elections (October 2023)
Poland stock picks that are the holdings of the iShares MSCI Poland ETF (NYSEARCA: EPOL) ahead of the upcoming Polish elections plus a reality check on popular or hyped holding Dino Polska.
Emerging Market Stock Picks / Stock Research
$ = behind a paywall
🇨🇳 What can we learn from Cainiao’s IPO prospectus (Momentum Works) & Cainiao Smart Logistics Network: Highlights of IPO prospectus (Momentum Works)
Smart Logistics Network, the logistics arm of Alibaba (NYSE: BABA), filed its IPO prospectus to Hong Kong Stock Exchange on 26 September 2023.
The Application Proof, as the substantially complete draft IPO prospectus is called, gives a good glimpse into Cainiao’s business operations, financials, competitive standing and shareholders. The company subsequently needs to pass the hearing by HKEX and go through a period of marketing, before the stock can start trading. This will usually take a few months.
In this document, we highlight a few key areas of the prospectus which we think are relevant to stakeholders within the ecommerce and logistics ecosystem.
🇨🇳 Forget air conditioners. Midea wants investors to see robotics in its name (The Bamboo Works)
The home appliance giant is planning a Hong Kong IPO, reportedly for its robotics business that it hopes will become a major new growth driver
Midea (SHE: 000333) is planning a Hong Kong listing, as its core home appliance business remains largely unaffected so far by China’s property market slowdown
The company’s core air conditioning business is expected to benefit from replacement cycles, while its industrial robotics could benefit from China’s shrinking labor force
🇨🇳 Xinyi Glass (868 HK): More Resilient Than Perceived (Smartkarma) $
Xinyi Glass Holdings (HKG: 0868 / FRA: XI9 / OTCMKTS: XYIGY / XYIGF)'s stable auto glass business is often overlooked, making up 39% of the company's gross profit in 1H23.
Given the current valuation of 7x 2023E PE and 1.3x 2023E PB, the risk reward is skewed to the upside, and downside is protected with the stable auto glass business.
The company's management has been aggressively increasing stake in the company in the last 2 months, gobbling up 11 million shares.
🇨🇳 MedBot seeks commercial edge with dual-use surgical robot (Bamboo Works)
The company’s orthopedic robot is the first domestically developed device to be approved for both hip and knee surgeries
Even with its latest product, Shanghai MicroPort MedBot Group Co Ltd (HKG: 2252) faces intensifying competition in the field of medical automation from dominant imports and rival Chinese devices
The company made only 47.6 million yuan in revenue in the first half of the year and posted a net loss of 545 million yuan, reflecting the challenge of penetrating the surgical robotics market
🇨🇳 High Conviction Update: Sonoscape (300633.CH) - Stock Price to Rebound After Temporary Headwinds (Smartkarma) $
SonoScape Medical Corp (SHE: 300633) maintained strong growth momentum in 23H1. Profit margin further improved. The Company has entered a stage where scale effect has emerged. However, declining contract liability balance raised our concern.
Japanese companies setting up factories in China would shake competitive landscape of the domestic market. The anti-corruption campaign could lead to “unexpected impact” on performance in 23H2.
We lowered 2023 revenue forecast to RMB2 billion. After negative factors are fully priced in, share price would rebound.
🇨🇳 Why investors are waiting to check into GreenTree Hospitality (Bamboo Works)
After a big rally for its stock in July as the hotel operator added restaurants to its business menu, the company’s latest financial results received a more cautious reception
GreenTree Hospitality Group Ltd. (NYSE: GHG)’s revenue grew 12.1% in the first half of this year, as it returned to profitability
🇨🇳 Boqii Delists, Ends Three-Year ‘Ruff’ Ride on NYSE (Bamboo Works)
Not enough dog years left for the pet-care company, whose falling market value put it in danger of being forcibly delisted after its revenue contracted in its latest fiscal year
Boqii Holding Ltd (NYSEAMERICAN: BQ) is delisting from the New York Stock Exchange and moving its shares to the smaller, more thinly traded NYSE American
Boqii’s prospects look uncertain as China’s economy slows
🇨🇳 Topsports (6110 HK): Beneficiary Of An Improving Nike China (Smartkarma) $
Topsports (HKG: 6110 / OTCMKTS: TPSRF) is a pure-play on Nike and Adidas retail sales in China, as it is a leading retail partner of Nike and Adidas in China.
Nike's Greater China sales grew 12% yoy during the most recent quarter. During the earnings call, Nike management was bullish on the prospects of the China business.
The company currently trades at 13x forward PE, with a forward dividend yielf of 7%.
🇨🇳 Fishy loan undercuts Jiumaojiu’s corporate governance image (The Bamboo Works)
Note: See our August 1st post for a fund manager podcast that discussed this stock in detail.
The operator of a trendy restaurant chain disclosed it made an $11.2 million loan to its founder in January without informing the board or shareholders
Jiumaojiu International Holdings (HKG: 9922 / FRA: 3YU) said it failed to inform its board or shareholders about an 80.7 million yuan loan to its founder due to ‘a combination of errors of judgment’
The new disclosure follows an investor revolt a year ago after the restaurant operator said it would invest 1 billion yuan in a real estate project in its hometown of Guangzhou
🇭🇰 🇨🇿 Far East Consortium rolls the dice with Czech casino spinoff (The Bamboo Works)
The property developer plans to spin off its gambling business, Palasino, for a separate listing in Hong Kong
Fast East Consortium (HKG: 0035 / FRA: FET / OTCMKTS: FRTCF) is planning to separately list its Palasino gambling unit, which earned more than HK$40 million last year on nearly HK$530 million in revenue
The company operates casinos in the Czech Republic, but also obtained an online gambling license in Malta last year
🇰🇷 Gap Trades in Korean Prefs Vs Common Share Pairs in 4Q 2023 (Smartkarma) $
In this insight, we discuss numerous gap trades involving Korean preferred and common shares in 4Q 2023. Typically, fourth quarter is when pref stocks are emphasized the most in Korea.
The excessive gaps in the preferred and common shares of Samsung Electronics (KRX: 005930 / LON: BC94 / FRA: SSUN / OTCMKTS: SSNLF), Hotel Shilla (KRX: 008770), and Amorepacific Corp (KRX: 090430) could reverse in the next several months.
We see some attractive longer-term opportunities for Amorepacific, Doosan Fuel Cell (KRX: 336260), LG Electronics (KRX: 066570), and Hyundai Motor (KRX: 005380 / FRA: HYU / OTCMKTS: HYMTF) which have especially high discounts for the preferred shares versus their counterpart common shares.
🇰🇷 Paradise Co, GKL September casino rev down m-o-m (GGRAsia)
Casino revenue at Paradise Co Ltd (KOSDAQ: 034230), an operator in South Korea of foreigner-only gaming venues, decreased by 2.4 percent month-on-month in September, according to a Wednesday filing by the company to the Korea Exchange.
Rival foreigner-only casino operator Grand Korea Leisure Co Ltd (KRX: 114090) saw casino sales in September decline by 0.2 percent month-on-month, to nearly KRW33.32 billion, the company said in a Wednesday filing. The latest monthly tally was up 31.4 percent from the prior-year period.
🇰🇷 Eoflow: Ozempic and Wegovy Reducing Need for Disposable Insulin Injection Devices + Ongoing Lawsuit? (Smartkarma) $
Eoflow (KOSDAQ: 294090)'s share price has dropped 27% lower than the proposed tender offer price of 30,000 won. Two major factors have negatively impacted Eoflow (294090 KS)'s share price.
First, in September 2023, there were new data that suggested that popular weight loss drugs including Ozempic and Wegovy could reduce the need for insulin injections with patients with diabetes.
Second, the ongoing lawsuit by Insulet continues to remain a major headache. Eoflow is not a KISS ("Keep It Simple Stupid") stock.
🇰🇷 Hugel Inc (145020 KS): Achieves Record High Revenue in 2Q23; Resubmits Marketing Application in US (Smartkarma) $
Hugel (KOSDAQ: 145020) reported 28% YoY growth in both revenue and operating profit to KRW81.6B and KRW28B in 2Q23, respectively, driven by solid performance of botulinum toxins and fillers.
Hugel has resubmitted marketing application for botulinum toxin in the U.S. for the third time, with approval expected in 1Q24. The U.S. is the world’s single largest botulinum toxin market.
The company is seeing North America, Australia, New Zealand, and China as future growth engines to achieve its long-term target revenue of KRW1 trillion and operating profit margin of 45%.
🇰🇷 CJ Corp: FTC Could Crack Down on CJ Olive Young With Huge Fines (Smartkarma) $
CJ Corp (KRX: 001040)'s share price declined sharply by 10.7% to reach 80,200 won on 4 October. CJ Olive Young is the number one health & beauty store chain in Korea.
According to local media, CJ Olive Young is in danger of being fined large amounts of money by the Fair Trade Commission (FTC).
It appears likely that CJ Corp's share price could fall further close to the five year low end of the trading range (60,000 won) in the next several weeks.
🇰🇷 Korea Small Cap Gem #25: Taeyoung E&C [P/E of 1x and P/B of 0.2x] (Smartkarma) $
Tae Young Engineering & Construction (KRX: 009410) is the 25th company in our Korea Small Cap Gems series.
Taeyoung E&C is a mid-sized construction company in Korea with a market cap of 146 billion won. Its shares are trading at P/E of 1x and P/B of 0.2x.
At the end of 1H 2023, the company had 6.1 trillion won in order backlog, representing a backlog/sales ratio is 2.3x.
🇰🇭 🇭🇰 NagaCorp EBITDA US$215mln in year to Sept, GGR up 12pct (GGRAsia)
The firm has a long-life monopoly casino licence for Phnom Penh, via its NagaWorld resort complex
In June, Moody’s Investors Service downgraded to ‘B3’ from ‘B2’ the corporate family rating of NagaCorp (HKG: 3918 / FRA: N9J / OTCMKTS: NGCRF). “The rating downgrade and negative outlook reflect NagaCorp’s lack of refinancing progress for its US$472 million U.S. dollar bond coming due in July 2024,” said at the time the ratings agency.
Morgan Stanley Asia Ltd stated in July that it expected NagaCorp to be “able to refinance” its US$470-million bond issue maturing in July 2024. “As of the end of the first half of 2023, it [NagaCorp] had US$242 million cash, plus US$86 million half-on-half,” said the brokerage.
🇲🇾 Boustead Plantations (BPLANT MK): LTAT Emerges as a White Knight (Smartkarma) $
Boustead Plantations (KLSE: BPLANT) shares have been on a rollercoaster ride. As Kuala Lumpur Kepong (KLSE: KLK / OTCMKTS: KLKBY / KLKBF) pulls its offer, LTAT has emerged as an unlikely white knight.
LTAT aims to launch a general offer at RM1.55 per share, in line with KLK’s aborted MGO price. The government will backstop LTAT’s funding for the offer.
LTAT is vague on approvals and timing. Regulatory approvals should be a formality as LTAT is the Armed Forces pension fund. At the last close, the gross spread was 10.7%.
🇮🇳 JSW Infrastructure: conglomerate linkage is the quay takeaway (FT) $ (Archived Article)
The country’s second-largest commercial port operator received a warm reception at its stock market debut. Shares soared 30 per cent, valuing the group at $4bn.
JSW Infrastructure (NSE: JSWINFRA / BOM: 543994) started out as the group’s logistics arm. Two-thirds of its cargo originates from within the group. Iron ore and coal make up the bulk of total cargo processed. For India to achieve its full potential, it is going to need lots of both. A premium valuation for the shares suggests exactly that.
🇮🇳 Bandhan Bank: Initiating Coverage – Heads Up, Strong Re-Rating Ahead. (Smartkarma) $
Bandhan Bank (NSE: BANDHANBNK / BOM: 541153) has been an underperformer among Indian banks since the start of the COVID-19 pandemic due to asset quality issues in its core Group Microfinance portfolio.
Bandhan Bank’s leading position in the microfinance sector, strong operating margins, strategic de-risking, self-sustaining capital base, and cheap relative valuations make it a value bet with strong positive re-rating potential.
We value Bandhan Bank at 2.1x FY25e P/B in the base case, implying a 44% upside. On the other hand, we also discuss the risks to the thesis in detail.
🇮🇳 ‘Junk rally’ in Indian small-caps sparks fears of frothy valuations (FT) (Archived Article)
Retail investors sharing tips on WhatsApp help drive huge gains in some previously-troubled firms’ shares
One of the best performing Indian stocks is Suzlon Energy (NSE: SUZLON / BOM: 532667), a wind turbine maker whose mammoth debt pile brought it close to bankruptcy in 2015 and is now in the midst of a turnaround. Its shares have rocketed 265 per cent in the past six months.
Another outperformer is majority state-owned train infrastructure builder Rail Vikas Nigam (NSE: RVNL / BOM: 542649), whose shares have soared 126 per cent.
Mazagon Dock Shipbuilders [Wikipedia Entry] (NSE: MAZDOCK / BOM: 543237), a defence ministry enterprise 85 per cent owned by the government, is up 211 per cent in six months and the shares are trading at a price/earnings multiple of almost 38 times, compared with an average of nearly 23 times among stocks in the wider index.
🇲🇽 Farmacias Guadalajara ($FRAGUA) (Heron Hunting Method)
A cheap Mexican compounder with a bullet-proof balance sheet
Farmacias Guadalajara or Corporativo Fragua SAB de CV (BMV: FRAGUAB) is a Mexican pharmacy chain trading at ‘23 forward 4.2x EV/EBITDA and 7.5x EV/FCF
Methodical and controlled growth initiatives have resulted in a revenue CAGR of 16% over the past 5 years
Growth has been fueled almost entirely via reinvested cashflows. The company has a strong balance sheet with $320 million in net cash
FRAGUA shares are cheap for 2 reasons:
Shares are tightly held by insiders, have low liquidity, and are not part of the Mexican IPC index thereby drawing minimal institutional interest
Fierce sector competition in the retail pharmacy space. There are at least 6 major pharmacy groups plus national grocery chains with in-store pharmacies
🇧🇷 Jalles Machado - LATAM Stocks Investment Analysis #21 (LATAM Stocks)
Also see: Brazil Small Cap ETF Stock Picks (September 2023) and Triple opportunity could transform Latin America’s fortunes, bank head says (FT) (Archived Article) Exports of green energy, food and critical minerals could bring prosperity after years of weak growth
Jalles Machado Sa (BVMF: JALL3 / JALL1) is a vertically integrated sugarcane producer with a diversified product portfolio and exports to over 20 countries.
Their current financials are decent but not great. The current valuation is mixed, reasonable by some metrics, expensive by others. Your view of sugar prices is probably going to determine your view of Jalles Machado stock as an investment.
The majority of Brazil’s sugar industry is private, including the country’s largest producer and exporter, Copersucar. Interested investors can also look at Sao Martinho SA (BVMF: SMTO3) and Raizen Sa (BVMF: RAIZ4) which are also Brazilian sugar stocks.
Further Suggested Reading
$ = behind a paywall
🇨🇳 Five things to know about China’s relaxed draft rules on cross-border data transfers (Caixin) $
China is looking to relax its rules on cross-border data transfers, issuing draft provisions that experts say would essentially create “a whitelist” that exempts qualifying foreign companies from the stringent policies that have become a burden to some of those operating in China.
The Cyberspace Administration of China (CAC), the country’s top internet regulator, released the draft rules Thursday to clarify which kinds of data would no longer need to undergo a security review before being transferred abroad. The CAC is seeking public comments on the document until Oct. 15.
🇨🇳 Estimating Chinese corruption (FT) (Archived Article)
How much graft is there in China’s vast bureaucracy? Quite a lot, and it rises with seniority, even though Xi Jinping’s corruption crackdown seems to have moderated things.
Estimating how much money officials make from bribes is obviously tricky, especially in a country like China, where data is patchy and bungs are so common it is sometimes referred to as “grey income”.
But in a paper just published by the NBER, Yongheng Deng of Wisconsin School of Business, Shang-Jin Wei of Columbia Business School and Jing Wu and Rongjie Zhang from Tsinghua University (!) have come up with an interesting way of doing it.
🇨🇳 Secrets In Asset Purchases: Estimating The Unofficial Incomes Of Officials (National Bureau Of Economic Research)
We estimate the size of the likely unofficial income of a household with a government official by the difference between the income that would be necessary to explain their observed home purchase behavior and the official income. Using unique and comprehensive administrative records on the House Provident Fund and home purchases between 2006 and 2013 in a large Chinese city, we reach three conclusions. First, an average official’s unofficial income is 83% of her official income; this percentage increases sharply with the official’s rank. Second, about 13% of the officials have an unofficial income, and the proportion also increases with rank. Third, government officials are not underpaid, and their unofficial incomes are not a compensation for low government salaries. Additionally, evidence suggests unofficial incomes have declined since the recent anti-corruption campaign. An analysis of a separate cross-city dataset corroborates the key conclusion.
🇨🇳 China jitters turn private equity investors toward India, Indonesia (Asia Nikkei) (Archived Article)
Investors disappointed by China’s slow recovery and lack of new growth drivers are turning to India and south-east Asia for deals, even as experts warn they face a steep learning curve and potentially limited choice of exit routes in many of these markets.
India and Indonesia have become two of the most popular destinations for private equity investors, who are under pressure as high interest rates drive up funding costs and as backers, such as family offices and university endowments, become increasingly nervous about investing in China.
🇲🇴 Macau mass GGR at pre-Covid levels in GW: JP Morgan (GGRAsia)
JP Morgan Securities (Asia Pacific) Ltd says the recovery in the number of visitors arrivals to Macau during the October Golden Week (GW) has helped push mass-market gross gaming revenues (GGR) to over “100 percent” versus 2019 levels, before the onset of the Covid-19 pandemic.
“So far things appear pretty in-line with our expectations of 100-percent-plus recovery in mass GGR (versus 2019 Golden Week),” wrote analysts DS Kim, Mufan Shi and Selina Li in a Thursday memo.
🇨🇳 Ecommerce: China’s retail future lies in live video streaming (FT) (Archived Article)
Traditional ecommerce is struggling to hold on to its shoppers
🇮🇩 After TikTok Shop ceased operations in Indonesia.. (Momentum Works)
The speed and decisiveness of the ban took many (including some promoters of the ban) by surprise. Here are some observations…
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):
Ecuador Ecuadorian Presidency Oct 15, 2023 (d) Confirmed Aug 20, 2023
Poland Polish Sejm Oct 15, 2023 (t) Confirmed Oct 13, 2019
Poland Polish Senate Oct 15, 2023 (t) Confirmed Oct 13, 2019
Poland Referendum Oct 15, 2023 (t) Date not confirmed Sep 6, 2015
Argentina 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
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):
Globavend Holdings Ltd. GVH, R.F. Lafferty & Co., 1.9M Shares, $4.00-5.00, $8.4 mil, 10/9/2023 Week of
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.)
WeBuy Global Ltd. WBUY, EF Hutton, 3.5M Shares, $4.00-4.50, $14.9 mil, 10/9/2023 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: 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.)
Agape ATP Corp. ATPC, Network 1 Financial Securities, 1.7M Shares, $4.00-4.00, $6.6 mil Shares, 10/11/2023 Wednesday
(Note: This is NOT an IPO. This is an uplisting to the NASDAQ from the OTC – Pink Sheets market.)
We sell skincare products and dietary supplements through direct sales to distributors in Malaysia. We also operate an advisory services business called the ATP Zeta Health Program. (Incorporated in Nevada)
Agape ATP Corporation provides health solution advisory services to its clients. We primarily focus our efforts on attracting customers in Malaysia. We have an advisory services center called the “ATP Zeta Health Program”, which is a health program designed to effectively prevent diseases caused by polluted environments, unhealthy dietary intake and unhealthy lifestyles, and the promotion of health. The program aims to promote improved health and longevity through a combination of modern health supplements, proper nutrition and advice from skilled nutritionists and/or dieticians.
For the three months ended March 31, 2023 and 2022, our revenue was approximately $0.4 million and $0.4 million, respectively, and our gross profit was approximately $0.3 million and $0.3 million. Our total revenues decreased by approximately 6.9% from approximately 0.4 million for the three months ended March 31, 2022 to approximately 0.4 million for the three months ended March 31, 2023. For the years ended December 31, 2022 and 2021, our revenue was approximately $1.9 million and $1.0 million, respectively, and our gross profit was approximately $1.2 million and $0.7 million, respectively. Our total revenue increased by approximately 82.6% from approximately $1.0 million for the year ended December 31, 2021 to approximately $1.9 million for the year ended December 31,2022. Our gross profits decreased by approximately 24.8% from approximately $0.3 million for the three months ended March 31, 2022 to approximately $0.3 million for the three months ended March 31, 2023. Our gross profit increased by approximately 65.4% from approximately $0.7 million for the year ended December 31, 2021 to approximately $1.2 million for the year ended December 31, 2022.
In order to strengthen the Company’s supply chain, on May 8, 2020, the Company successfully acquired approximately 99.99% of Agape Superior Living Sdn Bhd, a Malaysia company (“ASL”), with the goal of securing an established network marketing sales channel that has been established in Malaysia for the past 18 years. ASL has been offering the Company’s ATP Zeta Health Program as part of its product lineup. As such, the acquisition creates synergy in the Company’s operation by boosting the Company’s retail and marketing capabilities. The acquired subsidiary allows the Company to fulfill its mission of “helping people to create health and wealth” by providing a financially rewarding business opportunity to distributors and quality products to distributors and customers who seek a healthy lifestyle.
The Company deems creating public awareness on wellness and wellbeing lifestyle as essential to enhance the provision of its health solution advisory services; and therefore, incorporated Wellness ATP International Holdings Sdn, Bhd. (“WATP”). Upon its establishment, WATP started collaborating with ASL to carry out various wellness programs.
On November 11, 2021, Agape ATP Corporation (Labuan) formed a joint-venture entity, DSY Wellness International Sdn. Bhd. (“DSY Wellness”) with Mr. Steve Yap following which Agape ATP Corporation (Labuan) owns 60% of the equity interest, to pursue the business of providing complementary health therapies. The establishment of DSY Wellness is a further expansion of our business into the health and wellness industry. Mr. Steve Yap readily owns 33 proprietary formulas for treating non-communicable disease which he has agreed to bring into the company for joint commercialization. Mr. Steve Yap also has existing clients receiving traditional complimentary medicine or “TCM” in Indonesia and China.
We offer three series of programs which consist of different services and products: ATP Zeta Health Program, ÉNERGÉTIQUE and BEAUNIQUE.
Our ATP Zeta Health Program is a health program designed to promote health and general wellbeing designed to prevent health diseases caused by polluted environments, unhealthy dietary intake and unhealthy lifestyles. The program aims to promote improved health and longevity through a combination of modern health supplements, proper nutrition and advice from skilled dieticians as well as trained members and distributors.
Our ÉNERGÉTIQUE series aims to provide a total dermal solution for a healthy skin beginning from the cellular level. The series is comprised of the Energy Mask series, Hyaluronic Acid Serum and Mousse Facial Cleanser.
Our BEAUNIQUE product series focuses on the research of our diet’s impact on modifying gene expressions in order to address genetic variations and deliver a nutrigenomic solution for every individual.
The newly established subsidiary DSY Wellness is a further expansion of our business into the health and wellness industry and aims to pursue the business of providing traditional and complementary health therapies.
*Note: Revenue and gross profit are in U.S. dollars for the 12 months that ended June 30, 2023.
(Note: Agape APT Corp. increased the number of shares in its IPO to 1.65 million shares – up from 1.1 million shares – and cut the price to $4.00 – down from a range of $5.50 to $6.50 – to raise $6.6 million in its public offering/NASDAQ uplisting, according to an S-1/A filing dated Sept. 7, 2023. In an S-1/A filing dated Aug. 24, 2023, Agape APT Corp. disclosed that Network 1 Financial Securities was the sole book-runner, replacing EF Hutton. This public offering’s size and price range have undergone several changes since the S-1 was filed on April 12, 2022; in the S-1, Prime Number Capital was the sole book-runner. The company originally filed to go public in July 2020.)
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:
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 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 (October 9, 2023) was also published on our website under the Newsletter category.
Great coverage, thank you!!