This website uses cookies to collect usage information in order to offer a better browsing experience. By browsing this site or by clicking on the "ACCEPT COOKIES" button you accept our Cookie Policy.

Grocery Delivery Company Missfresh Files for US IPO

By:

Chief Investment Officer

May YoY Consumer Price Index (CPI) & Producer Price Index (PPI) Release Overview

Takeaway: The PPI print was driven by mining’s +36.4%, raw materials +18.8% and manufacturing +7.4% driven by higher commodity prices. Higher commodity inputs are largely being eaten by manufacturers rather than being passed along to end consumers. CPI saw transportation and communication increase 5.5% YoY while food was a mild +0.8%.

The mid-morning release didn’t seem to be a market-moving event as the higher PPI print was largely expected. We should expect further efforts by the PBOC to talk down higher commodity prices but the laws of supply and demand are hard to overcome. This too shall pass as commodity suppliers ramp up production to meet demand though that doesn’t occur overnight.

Key News

Northern Asian markets were largely off, less China which posted a gain while Southern Asian markets were largely higher though volumes were off in advance of tomorrow’s US CPI release. The World Bank’s upgrade of their global GDP outlook garnered attention as China’s 2021 GDP outlook was raised to 8.5%.

The Senate passed the $250B bill which includes ~$50B for US semiconductor companies to compete with China (FYI – the big semi companies are in Taiwan and South Korea). The markets didn’t care as we’ve become somewhat numb to US-China political rhetoric. I stumbled upon an article titled “Playing the China Card” by a media outlet called Noema that I recommend. It highlights how politicians have used threats, real or imaginary, to push policies.

Mainland and Hong Kong energy stocks had a strong day as oil punched above $70 a barrel while PPI led material stocks higher. There was a touch of value outperforming growth but it was a quiet night. Healthcare outperformed as a coronavirus outbreak in Guangzhou has led to a local lockdown. Online education stocks were off again as investors worry about new tutoring rules. Alcohol stocks were off again though Kweichow Moutai did manage to post a small gain.

A lot of investors prefer active management for emerging market investing. I’m a believer in using both as there are pros and cons to active management just as there are pros and cons to passive investing. For China’s mainland market, I believe there is a strong case for one to hold beta/index exposure. There is some evidence of this. According to a Chinese data provider, the “big fund index”, comprised 3,968 mutual funds with CNY 6.1 trillion of assets–which is the largest category, has returned 5.07% year to date versus the MSCI China A Index return of 5.18%. The 1-year return for the “big fund index” was 37% versus the MSCI China A’s return of 51%. The MSCI index beat the active managers in these two time periods. I’ll do some more work here and report back.

Diving into the mainland manager data, I couldn’t help but notice that the 2,041 big growth funds manage RMB 3.511 trillion versus the 336 big value funds manage RMB 372B. The value/growth trade is a global phenomenon!

Tencent, Goldman Sachs and Tiger Global backed online grocery delivery company, Missfresh, filed its F-1 with the SEC yesterday in advance of a Nasdaq listing under the ticker MF. Missfresh operates 631 “distributed mini-warehouses” in 16 cities as of Q1 2021, allowing the company to source items from farmers directly. The company was founded in 2014 and now has 7.9mm users for the year ended Q1 2021, having sold RMB 7.6B worth of goods in 2020 with an average delivery time of 39 minutes. The company generated $915mm (RMB 5.999B) of revenue in 2020 and $227mm (RMB 1.492B) in Q1 2020. The company had a net loss of $251mm in 2020 and $93mm in Q1 2021. The filing is a big filing that I’m making my way through though the company is clearly disrupting the traditional grocery store model.

MSCI All shares index
asia indices
asia stocks

H-Share Update

The Hang Seng bounced around the room, closing -0.13% at 28,742 as volume declined -5.1% from yesterday, which is only 71% of the 1-year average. The 211 Chinese companies listed in Hong Kong within the MSCI China All Shares were off -0.08% with energy +1.79%, healthcare +0.78%, utilities +0.56%, materials +0.45%, communication +0.34%, real estate +0.33% and staples +0.23% while discretionary -0.81%, financials -0.13% and tech -0.1%. Hong Kong’s most heavily traded were Tencent +0.33%, Meituan -1.28%, Alibaba HK -1.05%, Xiaomi -1.59%, China Feihe -6.6%, energy giant CNOOC +2.95%, BYD -1.04%, AIA -0.67%, JD.com HK -2.29% and Geely Auto -1.64%. Southbound Stock Connect volumes were moderate as mainland investors bought $138mm of Hong Kong stocks today as Southbound trading accounted or 13.8% of Hong Kong turnover.

A-Share Update

Shanghai, Shenzhen and STAR Board gained +0.32%, +0.14% and +0.58% as volume declined -10.57% from yesterday to 95% of the 1-year average. The 531 mainland stocks within the MSCI China All Shares gained +0.34% led by energy +3.06%, Utilities +1.44%, materials +1.19, tech +1.03% and staples +0.44% while communication -1.24%, real estate -0.44%, financials +0.39% and discretionary -0.37%. The Mainland’s most heavily traded by volume were COSCO Shipping +4.45%, broker East Money -1.52%, Inner Mongolia Yili +5.18%, BYD -0.4%, Shede Spirits -5.44%, Jiangsu Hoperun Software +20.01%, Kweichow Moutai +0.39%, Wuliangye Yibin -0.49%, China Baoan Group +5.33%, and Everbright Securities -6.89%. Northbound Stock Connect volumes were moderate as foreign investors bought $440mm of mainland stocks as Northbound Stock Connect trading accounted for 5.1% of mainland turnover. CNY appreciated versus the US $ slightly, bonds were flat and copper gained +0.31%.

Last Night’s Exchange Rates, Prices, & Yields

  • CNY/USD 6.39 versus 6.40 yesterday
  • CNY/EUR 7.79 versus 7.79 yesterday
  • Yield on 1-Day Government Bond 1.68% versus 1.72% yesterday
  • Yield on 10-Year Government Bond 3.11% versus 3.11% yesterday
  • Yield on 10-Year China Development Bank Bond 3.54% versus 3.54% yesterday
  • Copper Price 0.31% overnight

Originally Posted on June 9, 2021 – Grocery Delivery Company Missfresh Files for US IPO

Author Positions as of 6/9/21 are KBA, KALL, KCNY, KFYP, KCNY, KEMQ, BZUN, HSBC, KWEB

Disclosure: KraneShares Advisors LLC

Content on China Last Night is for informational purposes only and should not be construed as investment advice. This material represents an assessment of the market environment at a specific time and is not intended to be a forecast of future events or a guarantee of future results; material is as of the dates noted and is subject to change without notice. This information should not be relied upon by the reader as research or investment advice regarding the funds or any security in particular.

This material may not be suitable for all investors and is not intended to be an offer, or the solicitation of any offer, to buy or sell any securities. Investing involves risk, including possible loss of principal.

This material contains general information only and does not take into account an individual’s financial circumstances. This information should not be relied upon as a primary basis for an investment decision. Rather, an assessment should be made as to whether the information is appropriate in individual circumstances and consideration should be given to talking to a financial advisor before making an investment decision.

Forward-looking statements (including Krane’s opinions, expectations, beliefs, plans, objectives, assumptions, or projections regarding future events or future results) contained in this presentation are based on a variety of estimates and assumptions by Krane. These statements generally are identified by words such as “believes,” “expects,” “predicts,” “intends,” “projects,” “plans,” “estimates,” “aims,” “foresees,” “anticipates,” “targets,” “should,” “likely,” and similar expressions. These also include statements about the future, including what “will” happen, which reflect Krane’s current beliefs. These estimates and assumptions are inherently uncertain and are subject to numerous business, industry, market, regulatory, geo-political, competitive, and financial risks that are outside of Krane’s control. The inclusion of forward-looking statements herein should not be regarded as an indication that Krane considers forward-looking statements to be a reliable prediction of future events and forward-looking statements should not be relied upon as such. Neither Krane nor any of its representatives has made or makes any representation to any person regarding forward-looking statements and neither of them intends to update or otherwise revise such forward-looking statements to reflect circumstances existing after the date when made or to reflect the occurrence of future events, even in the event that any or all of the assumptions underlying such forward-looking statements are later shown to be in error. Any investment strategies discussed herein are as of the date of the writing of this presentation and may be changed, modified, or exited at any time without notice.

Disclosure: Interactive Brokers

Information posted on IBKR Traders’ Insight that is provided by third-parties and not by Interactive Brokers does NOT constitute a recommendation by Interactive Brokers that you should contract for the services of that third party. Third-party participants who contribute to IBKR Traders’ Insight are independent of Interactive Brokers and Interactive Brokers does not make any representations or warranties concerning the services offered, their past or future performance, or the accuracy of the information provided by the third party. Past performance is no guarantee of future results.

This material is from KraneShares Advisors LLC and is being posted with permission from KraneShares Advisors LLC. The views expressed in this material are solely those of the author and/or KraneShares Advisors LLC and IBKR is not endorsing or recommending any investment or trading discussed in the material. This material is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the extent that this material discusses general market activity, industry or sector trends or other broad based economic or political conditions, it should not be construed as research or investment advice. To the extent that it includes references to specific securities, commodities, currencies, or other instruments, those references do not constitute a recommendation to buy, sell or hold such security. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.

Disclosure: Forex

There is a substantial risk of loss in foreign exchange trading. The settlement date of foreign exchange trades can vary due to time zone differences and bank holidays. When trading across foreign exchange markets, this may necessitate borrowing funds to settle foreign exchange trades. The interest rate on borrowed funds must be considered when computing the cost of trades across multiple markets.

Disclosure: Bitcoin Futures

Trading in Bitcoin futures is especially risky and is only for clients with a high risk tolerance and the financial ability to sustain losses. More information about the risk of trading bitcoin products can be found on the IBKR website.If you’re new to bitcoin, or futures in general please visit CME Bitcoin Futures.

PLEASE NOTE AT THIS TIME INTERACTIVE BROKERS PROVIDES LIMITED ACCESS TO CRYPTO-RELATED PRODUCTS. ELIGIBILITY TO TRADE IN CRYPTO-RELATED PRODUCTS MAY VARY BASED ON JURISIDICTION.  TRADING IN CRYPTO-RELATED PRODUCTS IS ESPECIALLY RISKY AND IS ONLY FOR CLIENTS WITH A HIGH RISK TOLERANCE AND THE FINANCIAL ABILITY TO SUSTAIN LOSSES.

Disclosure: Futures Trading

Futures are not suitable for all investors. The amount you may lose may be greater than your initial investment. Before trading futures, please read the CFTC Risk Disclosure. A copy and additional information are available at ibkr.com.

trading top