Fortnightly Publication Highlighting Latest Insights From IRF Providers
Company Research
China Internet: Opportunity after KWEB’s ~30% drop from its Oct peak
Sector valuation, as measured by 86Research’s proxy basket, now stands at a distressed 15.4x. Over the past 3 years, there has been 5 KWEB drawdowns >20% and each peak-to-trough episode lasting 3-6 months, suggesting the current correction could be nearing its end. Several catalysts may also help stabilise sentiment including Trump’s visit to China, the upcoming Two Sessions (additional stimulus) and improving economics from China’s AI leaders. In this issue of 86TradeIdeas, the team highlights several quality names that could command significantly higher multiples in a normalised market, including Trip.com, Atour and DiDi, alongside Beike, which could benefit from further housing policy support. Kuaishou and Baidu offer differentiated exposure to key AI verticals. Despite near-term geopolitical uncertainty, they see compelling re-rating potential across these names in the coming months.
Edition: 231
- 06 March, 2026
Asia Ex-Japan Funds: Extreme stocks
In this report, Steven Holden screens for stocks at the extreme ends of their positioning or momentum ranges. He synthesizes current and historical data on fund positioning with recent manager activity to accurately assess sentiment for each stock. Stocks in focus this month: High Positioning, Positive Momentum: KE Holdings and Shriram Finance. High Positioning, Negative Momentum: Axis Bank and NARI Technology. Low Positioning, Negative Momentum: Baidu and BOC Hong Kong. Low Positioning, Positive Momentum: Hon Hai Precision Industry and Tenaga Nasional.
Edition: 198
- 01 November, 2024
China Real Estate: Continued fund rotation drives new lows
Steven Copley takes a look at positions in China’s real estate sector, and it does not look good. Real estate holdings in active China equity funds have plummeted to a new low of 2.51% (from 8%), with only 76.4% of funds maintaining any position. The number of real estate companies held has plummeted from just under 100 in 2019 to just 42. It represents the largest percentage of funds invested in any sector, with significant closures driven by key investors such as Janus Henderson and Quilter. Amid the downturn, KE Holdings stands out, having attracted a growing ownership base and reaching an all-time high in investment. Nevertheless, investors are reallocating to sectors like Technology, Energy and Materials.
Edition: 187
- 31 May, 2024
Real Estate
China’s top leadership is stoking hopes for better property policies, and BEKE is an asset-light bet on the eventual rebound. In a recent meeting, Premier Li Keqiang signaled a further relaxation of housing policies on a city-by-city basis. In the days before the meeting, rumors swirled about the government ending all property restrictions outside of Tier 1 cities, which would be as much a sign of desperation as a real boost for housing in lower tiers. This would also benefit an online real estate broker like Beike, which does about half of its business in Tier 2 and smaller cities.
Edition: 145
- 30 September, 2022