China Education: Time to put baby back in the bath water? Brick & mortar, tertiary / vocational education stocks also hammered despite no -ve policy implications. Now big guys are batting on the front foot. See o/n from $839.HK China Education Group www1.hkexnews.hk/listedco/listc…
Osbert Tang was highlighting this into market open, and again intraday yesterday. The dust will settle, and new leadership will emerge.
Guangdong focused Edvantage $382.HK - which is also tertiary / vocational education focused has also come out with similar affirmation along with a strong profit beat. www1.hkexnews.hk/listedco/listc…
Meanwhile SaaS provider to schools $KUKE was up 4pc overnight.
So it seems the worst price action might be behind us; and leadership shifting to a) brick & mortar b) tertiary & vocational c) regulated educational institutes given: a) pricing power b) supply gap and c) inability for Chinese students to go overseas / get visas of late
Other sector where companies are coming armed with buybacks and affirmatory narrative are the China Property Management Cos (PMCs) that got smacked in a skittish market on vague reg-risk around common area advertising (not more than 2-3% of revenue at best). Interesting times!
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QUAD & the China Equity Risk Premia: synchronized co-ordinated retaliation versus China. Senate Foreign Relations Committee, in a 21-1 vote Wednesday, approved a bill named “Strategic Competition Act of 2021” - This attacks a China on many fronts and has Biden backing👇🏽 (1/n)
One would force a boycott of the 2022 Beijing Olympics by U.S. officials, not athletes, which was also recommended by the U.S. Commission on Religious Freedom. (@Reuters)
Separately, a group of Senate and House of Representatives lawmakers introduced the "Endless Frontier Act," calling for $100 billion over five years for basic and advanced technology research and $10 billion to create new "technology hubs" across the country. (@Reuters)
“Double Dip” - a scenario to consider seriously. Events of this week have unfolded to everyone’s surprise... very negatively.
1/ India new epicenter - cases gone wild (25x higher versus Feb levels). Mutations present accelerated / aggressive disease presentation. India not on travel red lists of most major countries (yet/despite)
GRAB / ALTIMETER $AGC
The positives are well known and enormous respect to Anthony and Hooi Ling for creating an ASEAN behemoth. Nevertheless, here's some of the less obvious, but key points to note on this $40b deal. (1/n)
1. Control: Anthony Tan will continue to control the company with 60.4% of the voting rights, despite owning just 1.1@ of ordinary shares. sec.report/Document/00011… pg 48
Disclosure (thus far): The company hasn't released all the financial details, instead it has put up a dressy deck with 2021-23 projections. So not that much to chew on. Still...