Monday morning links

  • Chinese taxes: Xi Jinping vowed to “adjust excessive incomes” as part of his “common prosperity” agenda. Exactly what that means is unclear. It could presage higher corporate tax for high-tech companies (currently 15%), direct gifts such as the one announced by Tencent, a more progressive personal income tax system or a higher inheritance tax rate.

  • China & COVID-19: China reported zero new COVID-19 cases for the first time since July. Data reliability is in question, but it may signal that the outbreak is now increasingly under control directionally.

  • Malaysia politics: Ismail Sabri Yaakob has become president of Malaysia. He is a Malay centric politician that has been controversial in the past. But other than for certain politically sensitive stocks, many believe there will be business as usual.

  • Singapore's border reopening: Singapore removed quarantine for travellers from Hong Kong & Macau. All that’s needed is a negative PCR test; you don’t even have to be vaccinated. A vaccinated travel lane will open up with Germany soon.


Asian stock ideas

  • I wrote a deep-dive on Chinese travel technology stock TravelSky (SEHK: 696 — US$4.8 billion)

  • Searching 4 Value Blog on Hong Kong-listed L’Occitane (SEHK: 973 — US$4.9 billion)

  • A few comments from Pembridgecap on Taiwanese online classifieds company AddCN (TPEX: 5287 — US$361 million)


Long-form writing

(estimated reading time) ($ = behind a paywall)


Podcasts and videos

  • Michael Pettis: China’s regulatory environment is confusing (8 mins)

  • Louis Gave on China, Afghanistan and de-dollarization (35 mins)

  • Jens Nordvig on the risk of adopting zero-tolerance COVID-19 policies (24 mins)

  • Historian Jason Kelly discussing his book Market Maoists: The Communist Origins of China's Capitalist Ascent (32 mins)

  • Asia Tech Strategy podcast: What worries me about Alibaba long-term (40 mins)


Chart of the week – Shorting China stocks is now perceived to be one of the most crowded trades


Thanks for reading, and I wish you a great week ahead!

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Best regards,
Michael