The 2014 All-Asia Research Team: Quantitative Research, No. 1: Khoi Le Binh & team
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The 2014 All-Asia Research Team: Quantitative Research, No. 1: Khoi Le Binh & team

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2014-05-tom-johnson-all-asia-research-team-khoi-le-binh.jpg

Khoi Le Binh

& team

Deutsche Bank

First-Place Appearances: 2

Total Appearances: 6

Team Debut: 2001

Repeating in first place are Hong Kong–based Khoi Le Binh, 40, and his quants crew at Deutsche Bank. The analysts wowed investors last year with a research piece that demonstrates “how to use machine-learning, artificial intelligence and a time-series approach to construct an investment portfolio,” one client relays. Equally well received was a 112-page report, issued in January, that combines sophisticated academic research methods and statistical tools to build a dynamic screening model to “distinguish quality from junk,” Le Binh says, when investing in Asian stocks of at least $1 billion in market capitalization. Densely illustrated, this piece provides several definitions of what constitutes quality investing, including “remaining in the index, avoiding price drops and avoiding large drawdowns,” he notes. The researchers’ methodology judges the relative value of specific names according to “profitability, change in profitability, volatility, payout and expenses,” explains Le Binh. Their screening model is applicable across asset universes and investor classes, they contend, and can benefit money managers whose investment styles are determined by metrics ranging from price-to-earnings or price-to-book ratios to enterprise-value multiples and price or earnings momentum. Among the Asia-Pacific stocks that meet the quality screening criteria and are preferred over the long term are China’s Datang International Power Generation Co.; the Hong Kong–listed shares of China Railway Construction Co. and Shanghai Electric Group Co., both of which are also based in China; and Hong Kong’s Tianjin Port Development Holdings. The analysts have also calculated low-quality short calls based on subdued free cash flow. These include the H shares of Aluminum Corp. of China, which is based in China, and Hong Kong’s China Resources and Transportation Group and Melco International Development. “We find that investors can greatly benefit from incorporating quality in their investment process,” Le Binh concludes.


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