KGI Daily Trading Ideas – 5 January 2021

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EV players climbed on Monday between 3 – 13% despite overall market bearishness. We expect further tailwinds into EV players as market sentiment is still largely positive on the EV thematic.
Market volatility to be expected till Senate results on 6^th January. Major US stock indices closed 1.3-1.5% lower.
Chinese ADRs should see mild boost after NYSE scraps plan to delist China telcos

BUY NIO (NIO US) Entry – 52.66 Target – 59.11 Stop Loss – 50.50

BUY XPENG (XPEV US) Entry – 44.96 [BUY STOP] Target – 55.77 Stop Loss – 42.01

We expect NIO to retest its previous high prior to NIO Day on 9 January 2021. We set a new high as our target price, but recommend a trailing stop loss to reduce downside risk.
Xpeng is a laggard amongst EV plays. The recent bounce off the 60 EMA support limits downside risk.

BUY FIVERR (FVRR US) Entry – 192.91, Target – 220.60, Stop Loss – 183.95

With high unemployment and a strong need for digitalisation services in US, Fiverr experienced a blistering 88% YoY sales growth in 3Q20 from both increased buyer and seller transactions in the gig economy. As a result, street analysts are expecting Fiverr to turn profitable in 2021.
We see the recent share price pullback as a good opportunity to accumulate a novel stock with strong potential to continue performing well.

Alibaba (9988 HK) -2.15%, closing at HK$227.6. The founder Jack Ma suspected to be missing. His absence from public view raised concerns that China government could further tighten the grip on the tech giant.
Ganfeng Lithium (1772 HK) +12.96%, closing at HK$104.6, a record high on the first trading day in 2021. Battery grade lithium carbonate average price grew by 17% MoM to RMB51,500/tonne as of 31 December.
BYD (1211 HK) +9.84%, closing at HK$223.2, a record high on the first trading day in 2021. According to Thinkercar, BYD auto sales grew by 31% YoY in December. Credit Suisse raised TP to HK$250 from HK$185, maintaining overweight rating.

HK Trading recommendations

BUY Shandong Gold Mining Co., Ltd. (1787 HK) Entry – 18 Target – 21 Stop Loss – 16.65

The company operates gold mining business and production businesses. It engages in gold exploration, processing, and outsourcing gold smelting services. It also conducts gold jewerly purification and non-ferrous metal production businesses.
Share price has been consolidating at the 200dma level of HK$18 since late November 2020.
Catalyst: Gold price has an evident seasonality in January. At the moment, gold price is trading at US$1,940/oz, back to the level in early November 2020 when Shandong Gold Mining was at HK$21. With the expectation of gold price trading higher, we believe the mining stock will catch up.
RSI shows a positive upward momentum.

BUY Anhui Conch Cement (914 HK) Entry – 47.5 Target – 55.8 Stop Loss – 43

The company is Asia’s largest cement producer. Share price weakness due to reasons below. But we think share price has already priced in the headwinds, and we expect a rebound soon.
Northern part of China is suffering from a serious haze problem this winter season and authorities are restricting the operation of infrastructure projects in several regions.
Demand from southern part of China has weakened due to more rainy days.
4Q20 cement price is expected to drop YoY but slightly trend up QoQ

Singapore Trading recommendations

BUY Wilmar International (WIL SP) Entry – 4.89 Target – 5.36 Stop Loss – 4.68

Share price is about to break the previous high that was set in early August 2020.
Crude palm oil price broke the 8-year high of RM3,628/tonne, now trading at RM3,670/tonne.
Yihai Kerry, that subsidiary that was spun-off last year and listed in China, is now trading at record highs with a market cap of RMB657bn (equivalent to S$134bn). Wilmar owns 89.99% of Yihai Kerry. Wilmar’s market cap is S$29.5bn.
Technically, RSI shows a positive upward momentum.

BUY Geo Energy (GERL SP) Entry – 0.188 Target – 0.20 Stop Loss – 0.18

Geo Energy is riding on the recent surge of coal prices as supply has not kept up with the industrial recovery in China.
The restrictions of coal from Australia are unlikely to be reversed soon, boding well for coal exports from Indonesia.
Geo Energy, an Indonesian coal miner, is set benefit from this trend in the next 1-2 quarters.
A regression analysis of GERL SP to Indonesia’s 4200KC GAR Coal shows a high correlation of 0.7.

Market movers

iFAST (+8.3%) on positive sentiment across brokerage houses. Other online brokerage such as Futu Holding’s US ADR (FUTU US) gained 7.0% in US trading.
Nanofilm (+7.7%) in line with positive start among Asian technology firms.
Sembcorp Marine (+7.0%), likely on renewed interest of M&A between the two major Singapore-based shipyards.