Latin America Emerging Markets

Equity Research
13 January 2021

This material is neither intended to be distributed to Mainland China investors nor to provide securities investment consultancy services within the territory of
Mainland China. This material or any portion hereof may not be reprinted, sold or redistributed without the written consent of J.P. Morgan.

Emerging Markets Equity

Strategy
EM Dividend Nobles 3.0 - Positioning for dividend
plays in 2021

EM Equity Strategist
Pedro Martins Junior, CFA AC
(55-11) 4950-4121
pedro.x.martins@jpmchase.com
Bloomberg JPMA MARTINS <GO>
The third edition of our Emerging Markets Dividend Nobles (EMDIVA – link to Banco J.P. Morgan S.A.
second and first editions) presents an update on the EMDIVA stocks that have
Rajiv Batra
delivered consistent increases in their dividends per share (DPS). The list includes
(65) 6882-8151
58 stocks, all listed on Table 4. Following a Biden win, we recommend rajiv.j.batra@jpmorgan.com
positioning for a sustained value rotation (see Key Trades and Risks). In this J.P. Morgan Securities Singapore Private
context, the EMDIVA list aligns well with our overall cyclical recommendation Limited
with sectors such as Financials, Real Estate and Materials, making 60% of the list. Jainik Mody, CFA
(44 20) 3493-0443
 The S&P500 Dividend Aristocrat index is the inspiration behind the EM
jainik.mody@jpmorgan.com
Dividend Nobles list. The S&P Dividend Aristocrat Index has outperformed the
J.P. Morgan Securities plc
S&P500 by more than 480% since end January 2000 and above 1300% since
inception in 1990. The index measures the performance of large-cap, blue-chip Sonia Tewani
(91-22) 6157 3803
companies within the S&P 500 that have followed a policy of increasing
sonia.tewani@jpmchase.com
dividends every year for at least 25 consecutive years.
J.P. Morgan India Private Limited
 The hypothetical price return CAGR of the EMDIVA list would have been EM Asia Strategist
9.6% in USD in the past decade compared to MSCI EM CAGR of -1.2%. Most Mixo Das
countries and sectors in the EMDIVA list outperformed their corresponding (852) 2800-0511
benchmark in the period. We acknowledge that past performance does not mixo.das@jpmorgan.com
guarantee future performance. We discuss risks on page 11. J.P. Morgan Securities (Asia Pacific) Limited/
J.P. Morgan Broking (Hong Kong) Limited
 The EMDIVA list fwd P/E is 8.2x compared to MSCI EM 16.1x, indicating that
CEEMEA Equity Strategist
the market is not attributing higher valuations to these companies despite
superior dividend policies. Return on Equity for the EMDIVA list would be David Aserkoff, CFA
(44-20) 7134-5887
estimated at 12.8%, 3.6%pt over MSCI EM.
david.aserkoff@jpmorgan.com
 We also look for the Next Nobles, using consensus DPS forecasts up to 2022. J.P. Morgan Securities plc
We find 18 stocks that meet our criteria—Table 7 contains a full list of those LatAm Equity Strategist
Next Nobles. For those investors with on a shorter-term view on dividends, Emy Shayo Cherman
Table 8 contains stocks in EM with the highest 2021 dividend yields. (55-11) 4950-6684
Table 1: Top 10 EM Dividend Nobles by market cap (see Table 4 for full list) emy.shayo@jpmorgan.com
Banco J.P. Morgan S.A.
M. Cap P/E Div Yld
Company Ticker Country USD Mn 2021 2022 19-22
CCB-H 939 HK China 187,861 4.8 4.5 6.2
China Merch Bk-A 600036 CH China 154,261 11.7 10.2 2.6
Ping An 2318 HK China 90,318 9.3 7.9 2.9
Sberbank SBER RX Russia 83,551 7.1 6.2 6.7
Gazprom GAZP RX Russia 72,134 6.5 4.7 6.9
Novatek Pjsc-Gdr NVTK LI Russia 57,083 17.2 14.6 2.1
Lukoil LKOH RX Russia 51,990 10.8 8.4 7.0
China Vanke Co-A 000002 CH China 44,723 7.0 6.2 4.5
Bank Rakyat Indo BBRI IJ Indonesia 40,606 18.6 14.3 2.6
Anhui Conch-A 600585 CH China 34,907 8.4 8.3 3.7
Source: J.P. Morgan and Bloomberg Finance L.P. Notes: Data from Bloomberg consensus. Top 10 stock ranked by market cap.

See page 13 for analyst certification and important disclosures, including non-US analyst disclosures.
J.P. Morgan does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the
firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in
making their investment decision.
www.jpmorganmarkets.com
This document is being provided for the exclusive use of joyce@gavekal.com.
 Pedro Martins Junior, CFA Latin America Emerging Markets Equity Research
(55-11) 4950-4121 13 January 2021
pedro.x.martins@jpmchase.com

The Inspiration for EMDIVA

Figure 1: S&P 500 vs. S&P Dividend The S&P500 Dividend Aristocrat index is the inspiration behind the EM Dividend
Aristocrats Total Returns Nobles list. The S&P Dividend Aristocrat Index has outperformed the S&P500 by
1000
more than 480% since end January 2000 and above 1300% since inception in 1990
S&P 500 S&P Dividend Aristocrat
900 (see Figure 1). The index measures the performance of large-cap, blue-chip
800 companies within the S&P 500 that have followed a policy of increasing dividends
700 every year for at least 25 consecutive years. There are 65 companies in the index
600 with a total market capitalization of ~$5.1tn dollars.
500
Dividends in general are usually associated with value investors. A pensioner, a
400 charitable trust, and the dependent of a trust fund need at least a steady, if not
300 growing, income. They are likely to be intolerant to cuts in dividends. A high
200 probability of volatile dividends makes a share unattractive to this class of long-term
100 investors.
0
00 03 06 09 12 15 18 21 In our study of 1386 companies, 22% fulfill our criteria for the initial dividend
Source: Bloomberg Finance L.P., and J.P. Morgan. nobles list (see page 3 and 4 for methodology and constituents). Following a Biden
win, we recommend positioning for a sustained value rotation (see Key Trades and
Risks). In this context, the EMDIVA list aligns well with our overall cyclical
recommendation with sectors such as Financials, Real Estate and Materials, making
60% of the list.
Key features of the EMDIVA basket include the following:
 Performance: The hypothetical price return CAGR of the EMDIVA list would
have been 9.6% in USD in the past decade compared to MSCI EM CAGR of -
1.2%. Most countries and sectors in the EMDIVA list outperformed their
corresponding benchmark in a ten year period – see page 10 for details.
 Price to Earnings: The EMDIVA list 12m fwd P/E would be 8.2x, a 49%
discount to MSCI EM 16.1x. EMDIVA price multiples have been below those
of MSCI EM, indicating that the market is not attributing higher valuations to
these companies despite their superior dividend policies.
 Dividend yield of the EMDIVA list would be 4.4%, higher compared to the
MSCI EM’s 1.9% DY. Though the yield differential with MSCI EM should not
undermine the Nobles’ attractiveness (as the list is not designed to offer higher
yield than the market’s -rather the focus is on the quality of the income stream),
the yield differential has widened since our last update. This could be due to the
rest of the market conserving cash during the crisis via dividend cuts.
 ROE: Return on Equity (RoE) for the EMDIVA list is estimated at 12.8%, 3.6%
over MSCI EM. Superior profitability margin among Dividend Nobles supports
the case for EMDIVA outperformance.

Table 2: Key features of EMDIVA list

Weightings Fwd PE Dividend Yield Payout Ratio ROE
EMDIVA MSCI EM EMDIVA MSCI EM EMDIVA MSCI EM EMDIVA MSCI EM EMDIVA MSCI EM
China 55.2% 38.6% 6.5 16.2 4.4% 1.4% 35.3% 29.0% 16.3% 11.1%
Taiwan 8.6% 13.1% 16.9 19.5 3.3% 2.5% 80.5% 58.7% 14.4% 12.1%
Russia 6.9% 3.0% 9.0 9.3 5.7% 5.1% 131.9% 94.8% 3.0% 5.9%
Mexico 5.2% 1.8% 14.7 15.7 4.0% 2.1% 110.0% 57.0% 8.3% 8.0%
Malaysia 5.2% 1.4% 11.7 14.9 6.7% 2.7% 97.2% 64.1% 8.1% 7.4%
South Africa 3.4% 3.3% 8.8 11.1 3.7% 1.9% 220.7% 37.5% 3.7% 10.3%
India 3.4% 9.1% 11.2 24.7 5.2% 0.9% 44.6% 35.6% 21.7% 8.8%
Indonesia 3.4% 1.3% 17.2 18.0 3.0% 2.8% 70.4% 62.1% 14.3% 11.7%
South Korea 1.7% 14.1% 4.6 15.3 5.6% 1.4% 27.7% 37.5% 8.5% 5.7%
Thailand 1.7% 1.8% 16.7 20.6 5.0% 2.6% 67.9% 66.2% 8.6% 7.6%
UAE 1.7% 0.5% 13.8 11.6 4.5% 4.5% 63.6% 54.5% 7.2% 9.5%
Greece 1.7% 0.1% 14.6 13.5 4.2% 3.7% 104.6% 51.2% 13.5% 21.7%
Turkey 1.7% 0.4% 11.9 7.3 2.3% 0.9% 33.0% 10.7% 57.1% 9.3%
Total 100% 100% 8.2 16.1 4.4% 1.9% 47.0% 42.8% 12.8% 9.2%
Source: Bloomberg Finance L.P., J.P. Morgan. The Emerging markets that are not represented in the EMDIVA constitute 11% of weight in MSCI EM.

This document is being provided for the exclusive use of joyce@gavekal.com.

 Pedro Martins Junior, CFA Latin America Emerging Markets Equity Research
(55-11) 4950-4121 13 January 2021
pedro.x.martins@jpmchase.com

EM Dividend Nobles (EMDIVA)

Methodology
 The dividend nobles list comprises stocks with a consistent increase in their DPS
over the past 5 years. We did allow one DPS cut during the period but only if the
DPS today is higher than 75% the maximum DPS over the last four periods. The
reason is that it was prudent for companies to conserve cash during adverse
macro conditions.
 Of the list which screens well on consistent dividend increase, we then filter
stocks with JPM sector analyst OW rating, MSCI market cap>$5bn and average
dividend yield (2019-22E) >2%.
 The sample set for our study was 1386 companies within the MSCI EM index
but the EMDIVA basket is just 55 stocks (Table 4 on the next page). Stocks with
insufficient dividend history less than 5 years (this is still a short history relative
the S&P Aristocrats’ 25 years) are excluded.
 Nine stocks in our EM Dividend list also feature in our EM Model Portfolio. For
details on broader strategy view and model portfolio see our latest issue of Key
Trades and Risks.

Stock Composition
 China and Taiwan comprise 64% of the stocks in the basket. Stocks from Russia
make up 6.9% while Mexico and Malaysia make up 5.2% each. In this edition
we have 13 countries being represented in our EMDIVA (Table 3).
 Financials is a major sector in number of stocks and basket weight (26%),
followed by Real Estate (22%) and Materials (12%).
 The 20 largest companies by market capitalization in the list comprise close to
81% of the list’s total capitalization, with just the top 5 making up 44%.

Table 3: Stock composition of EM Dividend Nobles list at the Country and Sector level (%)
Count ENE MAT IND FIN RES CDS CST INF HCA TEL UTE Total
China - 6.9% 1.7% 15.5% 20.7% - 3.4% - 3.4% - 3.4% 55.2%
Taiwan - 1.7% - 1.7% - - - 5.2% - - - 8.6%
Russia 5.2% - - 1.7% - - - - - - - 6.9%
Mexico - 1.7% - - - - 1.7% - - 1.7% - 5.2%
Malaysia - - - 1.7% - - - - - - 3.4% 5.2%
India 1.7% - - - - - - - - - 1.7% 3.4%
South Africa - 1.7% - 1.7% - - - - - - - 3.4%
Indonesia - - - 1.7% - - 1.7% - - - - 3.4%
South Korea - - - 1.7% - - - - - - - 1.7%
Thailand 1.7% - - - - - - - - - - 1.7%
Uae - - - - 1.7% - - - - - - 1.7%
Turkey - - - - - 1.7% - - - - - 1.7%
Greece - - - - - - - - - 1.7% - 1.7%
Total 8.6% 12.1% 1.7% 25.9% 22.4% 1.7% 6.9% 5.2% 3.4% 3.4% 8.6% 100%
Source: Bloomberg Finance L.P. and J.P. Morgan. Note: Consumer Discretionary CDS, Consumer Staples CST, Financials FIN, Energy ENE, Materials MAT, Industrials IND, Information
Technology INF, Health Care HCA, Communication Services TEL, Utilities UTE and Real Estate RES.

This document is being provided for the exclusive use of joyce@gavekal.com.

 Pedro Martins Junior, CFA Latin America Emerging Markets Equity Research
(55-11) 4950-4121 13 January 2021
pedro.x.martins@jpmchase.com

Table 4: Emerging Markets Dividend Nobles Constituents

JPM M. Cap P/E Earn. Growth Dividend Yield (Consensus)

Company Ticker Country Industry Rating USD Mn 2021 2022 2021 2022 2019 2020 2021 2022 19-22
Shimao Group Hol 813 HK CN RES OW 10,720 4.6 3.9 17.2% 16.5% 6.7 7.7 8.9 10.4 8.4
Bankcomm-H 3328 HK CN FIN OW 19,322 3.8 3.6 3.8% 5.2% 8.7 7.7 8.1 8.5 8.3
Country Garden 2007 HK CN RES OW 29,607 3.9 3.5 14.1% 9.7% 6.8 7.2 8.0 8.8 7.7
Picc P&C-H 2328 HK CN FIN OW 5,275 5.0 4.6 7.8% 8.9% 7.0 7.2 7.7 8.4 7.6
China Overseas 688 HK CN RES OW 23,253 3.5 3.2 12.0% 10.3% 6.3 7.0 7.9 9.0 7.5
Cifi Holdings Gr 884 HK CN RES OW 7,068 4.4 3.8 20.7% 18.0% 5.7 6.7 7.9 9.4 7.4
China Merchant-A 001979 CH CN RES OW 16,211 5.8 4.8 13.0% 19.2% 6.8 6.1 7.3 8.9 7.3
China Res Cement 1313 HK CN MAT OW 8,455 6.4 6.3 1.0% 1.4% 5.9 7.3 7.6 7.6 7.1
Poly Developme-A 600048 CH CN RES OW 27,720 4.8 4.2 14.9% 14.2% 4.4 6.5 7.5 8.7 6.8
CCB-H 939 HK CN FIN OW 187,861 4.8 4.5 6.6% 8.0% 6.3 5.8 6.2 6.7 6.2
Sunac 1918 HK CN RES OW 18,091 3.3 2.8 16.6% 17.9% 4.9 5.5 6.3 7.4 6.0
Seazen Holding-A 601155 CH CN RES OW 12,233 4.3 3.7 18.3% 16.2% 4.3 5.2 6.0 6.9 5.6
China Vanke-H 2202 HK CN RES OW 6,922 5.7 5.2 11.2% 9.5% 5.3 4.8 5.3 5.8 5.3
Uni-President Ch 220 HK CN CST OW 4,734 18.7 17.4 5.3% 7.9% 4.5 5.0 5.3 5.9 5.1
China Res Land 1109 HK CN RES OW 29,424 6.7 6.0 15.1% 11.2% 4.3 4.6 5.3 5.9 5.0
China Const Ba-A 601939 CH CN FIN OW 9,556 6.1 5.8 5.5% 6.1% 4.9 4.6 4.9 5.2 4.9
Conch Cement-H 914 HK CN MAT OW 8,697 6.6 6.6 1.5% -0.1% 4.7 4.7 4.9 4.9 4.8
Guangdong Invest 270 HK CN UTE OW 12,089 15.8 14.8 17.1% 7.2% 4.1 4.3 4.6 5.0 4.5
China Pacific-H 2601 HK CN FIN OW 12,364 3.7 3.0 12.2% 26.2% 4.6 3.9 4.4 5.0 4.5
China Vanke Co-A 000002 CH CN RES OW 44,723 7.0 6.2 11.7% 12.2% 4.3 4.0 4.5 5.0 4.5
Baoshan Iron &-A 600019 CH CN MAT OW 21,635 10.7 9.5 18.3% 12.3% 4.3 3.8 4.6 5.1 4.4
Longfor Group Ho 960 HK CN RES OW 34,032 9.9 8.5 15.3% 16.6% 3.3 3.9 4.6 5.3 4.3
Anhui Conch-A 600585 CH CN MAT OW 34,907 8.4 8.3 1.7% 1.5% 3.6 3.7 3.8 3.9 3.7
China Railway-A 601390 CH CN IND OW 16,888 4.8 3.6 9.5% 36.2% 2.6 2.9 3.2 3.4 3.0
Ping An 2318 HK CN FIN OW 90,318 9.3 7.9 15.6% 17.2% 2.7 2.6 3.0 3.4 2.9
Shang Pharm -A 601607 CH CN HCA OW 5,554 10.5 9.3 12.0% 12.7% 2.4 2.6 2.9 3.3 2.8
Ping An Insura-A 601318 CH CN FIN OW 140,580 9.8 8.3 20.4% 18.1% 2.4 2.5 2.8 3.2 2.7
CM Bank-H 3968 HK CN FIN OW 33,328 11.4 9.9 12.1% 14.8% 2.3 2.4 2.8 3.2 2.7
Yonghui Supers-A 601933 CH CN CST OW 10,479 23.0 18.7 24.5% 22.9% 2.0 2.3 2.8 3.5 2.6
China Merch Bk-A 600036 CH CN FIN OW 154,261 11.7 10.2 12.8% 14.1% 2.2 2.4 2.7 3.1 2.6
China Res Gas 1193 HK CN UTE OW 12,457 16.4 14.7 14.6% 11.8% 2.1 2.0 2.3 2.7 2.3
CSPC Pharmaceuti 1093 HK CN HCA OW 12,398 15.1 12.5 13.2% 20.2% 1.6 2.0 2.2 2.4 2.0
Hellenic Telecom HTO GA GR TEL OW 7,427 12.7 11.8 11.9% 7.5% 4.3 4.6 5.3 5.5 4.9
Bank Rakyat Indo BBRI IJ ID FIN OW 40,606 18.6 14.3 56.8% 30.0% 2.7 2.5 2.2 3.2 2.6
Indofood Cbp Suk ICBP IJ ID CST OW 7,864 16.8 15.2 15.9% 10.8% 2.2 2.2 2.6 2.9 2.5
Petronet Lng Ltd PLNG IN IN ENE OW 5,515 16.2 12.2 -16.1% 32.8% 2.5 3.7 4.5 4.7 3.9
Gail India Ltd GAIL IN IN UTE OW 8,394 15.4 11.1 -31.4% 38.0% 3.6 3.7 2.6 3.4 3.3
Hana Financial G 086790 KS KR FIN OW 10,315 4.5 4.3 0.9% 5.2% 5.4 5.2 5.6 6.1 5.6
Orbia Advance Co ORBIA* MM MX MAT OW 5,290 20.4 16.6 85.1% 22.6% 4.3 3.9 4.6 4.8 4.4
Arca Continental AC* MM MX CST OW 8,862 15.7 14.6 8.1% 7.5% 2.2 3.8 3.1 3.2 3.1
America Movil-L AMXL MM MX TEL OW 34,085 11.6 10.7 83.8% 8.1% 2.1 2.6 2.9 3.3 2.7
Source: Bloomberg Finance L.P. and J.P. Morgan. Notes: 1) Data retrieved from Bloomberg consensus. 2) Ranked by 2019E-2022E average dividend yield within each country. 3) Highlighted in
grey are 9 stocks that also feature in our EM model portfolio. 4) Countries: China CN, South Korea KR, Taiwan TW, India IN, Brazil BR, South Africa ZA, Mexico MX, Russia RU, Indonesia ID,
Malaysia MY, Thailand TH, Poland PL, Philippines PH, Chile CL, Turkey TR, UAE AE, Qatar QA, Colombia CO, Greece GR, Peru PE, Hungary HU, Czech CZ, Egypt EG and Pakistan PK. 5)
Sectors: Consumer Discretionary CDS, Consumer Staples CST, Financials FIN, Energy ENE, Materials MAT, Industrials IND, Information Technology INF, Health Care HCA, Communication
Services TEL, Utilities UTE and Real Estate RES.

This document is being provided for the exclusive use of joyce@gavekal.com.

 Pedro Martins Junior, CFA Latin America Emerging Markets Equity Research
(55-11) 4950-4121 13 January 2021
pedro.x.martins@jpmchase.com

Table 5: Emerging Markets Dividend Nobles Constituents (…continued)

JPM M. Cap P/E Earn. Growth Dividend Yield (Consensus)

Company Ticker Country Industry Rating USD Mn 2021 2022 2021 2022 2019 2020 2021 2022 19-22
Petronas Gas Bhd PTG MK MY UTE OW 8,214 16.4 16.4 0.2% -0.2% 4.3 7.0 4.9 4.9 5.3
Tenaga Nasional TNB MK MY UTE OW 14,416 11.7 11.1 14.9% 6.0% 5.4 4.7 5.2 5.6 5.2
Rhb Bank Bhd RHBBANK MK MY FIN OW 5,354 9.2 8.1 13.0% 13.5% 4.6 4.0 5.1 6.0 4.9
Lukoil LKOH RX RU ENE OW 51,990 10.8 8.4 189% 28.5% 8.0 5.2 6.3 8.4 7.0
Gazprom GAZP RX RU ENE OW 72,134 6.5 4.7 208% 37.7% 7.4 4.0 6.8 9.5 6.9
Sberbank SBER RX RU FIN OW 83,551 7.1 6.2 25.0% 14.2% 6.5 5.5 7.0 8.0 6.7
Novatek Pjsc-Gdr NVTK LI RU ENE OW 57,083 17.2 14.6 65.1% 17.8% 2.1 1.7 2.2 2.6 2.1
PTT Expl & Prod PTTEP TB TH ENE OW 13,637 16.2 13.1 9.9% 23.4% 5.1 3.1 3.3 3.9 3.9
Ford Oto FROTO TI TR CDS OW 6,975 13.9 12.2 10.6% 14.3% 2.7 4.5 4.0 4.4 3.9
Quanta Computer 2382 TT TW INF OW 11,720 13.2 12.6 2.8% 4.7% 4.3 6.1 6.5 6.4 5.8
Formosa Plastics 1301 TT TW MAT OW 22,524 18.0 16.1 83.5% 12.2% 5.1 2.4 4.3 4.6 4.1
Realtek Semi 2379 TT TW INF OW 7,876 20.5 17.6 21.7% 16.7% 2.1 3.1 3.8 4.4 3.4
Chailease 5871 TT TW FIN OW 8,393 12.0 10.2 15.4% 17.1% 2.8 2.9 3.4 4.0 3.3
Advantech 2395 TT TW INF OW 9,718 32.0 28.2 14.3% 13.6% 1.9 2.1 2.2 2.5 2.2
Aldar Properties ALDAR UH UAE RES OW 7,042 12.0 10.6 23.3% 12.7% 4.6 2.7 3.8 4.6 3.9
Sanlam Ltd SLM SJ ZA FIN OW 8,522 11.5 10.5 38.0% 10.2% 5.5 5.0 5.8 6.3 5.6
Gold Fields Ltd GFI SJ ZA MAT OW 8,280 7.2 7.6 88.6% -4.3% 0.7 2.5 3.7 3.9 2.7
Source: Bloomberg Finance L.P. and J.P. Morgan. Notes: 1) Data retrieved from Bloomberg consensus. 2) Ranked by 2019E-2022E average dividend yield within each country. 3) Highlighted in
grey are 9 stocks that also feature in our EM model portfolio. 4) Countries: China CN, South Korea KR, Taiwan TW, India IN, Brazil BR, South Africa ZA, Mexico MX, Russia RU, Indonesia ID,
Malaysia MY, Thailand TH, Poland PL, Philippines PH, Chile CL, Turkey TR, UAE AE, Qatar QA, Colombia CO, Greece GR, Peru PE, Hungary HU, Czech CZ, Egypt EG and Pakistan PK. 5)
Sectors: Consumer Discretionary CDS, Consumer Staples CST, Financials FIN, Energy ENE, Materials MAT, Industrials IND, Information Technology INF, Health Care HCA, Communication
Services TEL, Utilities UTE and Real Estate RES.

This document is being provided for the exclusive use of joyce@gavekal.com.

 Pedro Martins Junior, CFA Latin America Emerging Markets Equity Research
(55-11) 4950-4121 13 January 2021
pedro.x.martins@jpmchase.com

Who are the Next EM Nobles?

Figure 2: Next Nobles forward P/E We also try to identify the Next Dividend Nobles. We take the same universe of 1386
distribution companies used for the EM dividend Nobles and look for stocks that are expected to
20x be paying increasing dividends in 5 of the 6 periods analyzed (2017-2022E).
18x
16x Based on these criteria we generate a list of candidates for the Next Nobles – Table
14x 7. The list comprises 18 companies that are expected to fulfill the Dividend Nobles
12x criteria based on consensus dividend per share estimates. This is only sustainable and
10x possible over the long term with consistent earnings growth and cash generation—
8x otherwise the dividend policies of these companies would most likely fail to live up
6x to expectations – see page 11 for a detailed discussion on risks. Next Nobles do not
4x repeat current Dividend Nobles companies.
2x
0x
Methodology
SA

MY
TW

KR
RU
CN
TR

EM
BZ
IN

 The majority of the Next Nobles comes from EM Asia. China has the highest
Source: Bloomberg Finance L.P and J.P. Morgan
representation (6 out of 18) followed by Taiwanese companies (4 out of the 18).
By regions, LATAM is represented by only 1 stock from Brazil while 4
Figure 3: Next Nobles Dividend Yield
distribution CEEMEA companies make it to the list. The major sectors in the Next Nobles
5.0% are Financials and Materials.
4.5%
4.0%
 We also filter stocks with JPM sector analysts OW rating, MSCI market
3.5%
cap>$5bn and average dividend yield (2019-22E) >2%.
3.0%
 The median forward P/E of the Next Nobles is 10.6x, a 34% discount to MSCI
2.5%
2.0%
EM multiple. Russia and China Nobles in particular are trading relatively cheap
1.5%
while Saudi and Taiwan Nobles are trading at a significantly higher multiple.
1.0%
0.5%
 Also, like the EMDIVA, the Next Nobles offer higher dividend yield compared
0.0%
to MSCI EM (3.3% vs 1.9% for market). Malaysia, India and China offer higher
yield relative to other Nobles.
MY
TW
KR
IN
RU
BZ
CN

TR
EM
SA

Source: Bloomberg Finance L.P and J.P. Morgan

Table 6: Stock composition of EM Next Nobles Basket at the country sector level (%)
Count ENE MAT IND FIN RES CDS CST INF HCA TEL UTE Total
China 5.6% 11.1% 5.6% 5.6% - - 5.6% - - - - 33.3%
Taiwan - - - 5.6% - - 5.6% 11.1% - - - 22.2%
Saudi Arabia - - - 5.6% - 5.6% - - - - - 11.1%
South Korea - - - 5.6% - - - - - - - 5.6%
India 5.6% - - - - - - - - - - 5.6%
Malaysia - - - 5.6% - - - - - - - 5.6%
Russia - 5.6% - - - - - - - - - 5.6%
Turkey - - 5.6% - - - - - - - - 5.6%
Brazil - - - 5.6% - - - - - - - 5.6%
Total 11.1% 16.7% 11.1% 33.3% 0.0% 5.6% 11.1% 11.1% 0.0% 0.0% 0.0% 100.0%
Source: Bloomberg Finance L.P. and J.P. Morgan. Note: Consumer Discretionary CDS, Consumer Staples CST, Financials FIN, Energy ENE, Materials MAT, Industrials IND, Information
Technology INF, Health Care HCA, Communication Services TEL, Utilities UTE and Real Estate RES.

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(55-11) 4950-4121 13 January 2021
pedro.x.martins@jpmchase.com

Table 7: Emerging Markets Next Dividend Nobles Constituents

JPM M. Cap P/E Earn. Growth Dividend Yield (Consensus)

Company Ticker Country Industry Rating USD Mn 2021 2022 2021 2022 2019 2020 2021 2022 19-22
Indian Oil Corp IOCL IN IN ENE OW 12,314 6.8 5.8 99.4% 17.1% 7.8 3.8 6.3 7.5 6.3
Polymetal POLY RX RU MAT OW 11,177 8.5 7.9 23.9% 8.3% 2.7 5.6 7.8 9.3 6.4
Banco Do Brasil BBAS3 BZ BR FIN OW 20,374 6.8 5.7 22.6% 19.2% 6.2 4.0 5.7 7.4 5.8
Postal Savings-H 1658 HK CN FIN OW 12,033 5.4 4.9 8.2% 11.9% 5.3 5.0 5.4 6.1 5.4
Samsung Fire & M 000810 KS KR FIN OW 7,944 9.0 8.8 12.1% 2.1% 4.6 4.8 5.5 5.9 5.2
Tingyi 322 HK CN CST OW 10,181 16.9 15.5 0.1% 8.9% 3.8 5.7 5.4 5.7 5.2
Shaanxi Coal I-A 601225 CH CN ENE OW 15,382 8.1 7.8 -10.7% 3.5% 4.0 5.3 4.6 4.8 4.7
Jarir Marketing JARIR AB SA CDS OW 5,565 19.7 17.7 6.6% 11.5% 4.5 4.0 4.8 5.4 4.7
Yuanta Fncl 2885 TT TW FIN OW 9,500 11.1 10.6 2.6% 4.4% 4.2 4.7 4.9 5.0 4.7
Novatek 3034 TT TW INF OW 8,427 16.8 15.8 20.1% 6.5% 2.8 3.7 4.8 5.2 4.1
Nine Dragons Pap 2689 HK CN MAT OW 6,837 8.0 7.5 34.5% 5.9% 2.8 3.0 4.3 4.8 3.8
Al Rajhi Bank RJHI AB SA FIN OW 49,976 18.2 16.6 4.3% 9.7% 4.4 2.5 3.6 4.0 3.6
President Chain 2912 TT TW CST OW 10,069 25.5 23.6 8.2% 8.1% 3.3 3.2 3.4 3.7 3.4
Yageo 2327 TT TW INF OW 10,445 16.4 13.4 31.8% 22.9% 3.2 2.9 3.6 4.0 3.4
Hong Leong Bank HLBK MK MY FIN OW 9,672 13.6 12.4 14.0% 9.7% 3.0 2.7 2.5 3.0 2.8
Koc Holding KCHOL TI TR IND OW 7,400 7.9 6.6 -2.8% 19.5% 1.9 1.9 2.5 2.8 2.3
Conch Venture 586 HK CN IND OW 9,262 7.2 6.7 11.9% 7.7% 2.0 2.1 2.3 2.5 2.2
Hengli Petroc-A 600346 CH CN MAT OW 36,016 15.0 13.3 19.1% 12.4% 1.1 1.7 2.3 2.8 2.0
Source: Bloomberg Finance L.P. and J.P. Morgan. Notes: 1) Data retrieved from Bloomberg consensus. 2) Ranked by 2019E-2022E average dividend yield. 3) Countries: China CN, South Korea
KR, Taiwan TW, India IN, Brazil BR, South Africa ZA, Mexico MX, Russia RU, Indonesia ID, Malaysia MY, Thailand TH, Poland PL, Philippines PH, Chile CL, Turkey TR, UAE AE, Qatar QA,
Colombia CO, Greece GR, Peru PE, Hungary HU, Czech CZ, Egypt EG and Pakistan PK. 4) Sectors: Consumer Discretionary CDS, Consumer Staples CST, Financials FIN, Energy ENE,
Materials MAT, Industrials IND, Information Technology INF, Health Care HCA, Communication Services TEL, Utilities UTE and Real Estate RES.

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(55-11) 4950-4121 13 January 2021
pedro.x.martins@jpmchase.com

A shorter-term view
For those investors with a shorter-term view on dividends, we present on Table 8
stocks in EM fulfilling the following criteria: (1) highest EM dividend yields for
2021. We display those in excess of 8.0% in our coverage; and (2) filter out stocks
that are not covered or UW rated.

Table 8: EM stocks: highest 2020 dividend yields (clustered by JPM rating)

JPM M. Cap Price (lcy) P/E Earn. Growth 2021
Company Ticker Rating USD Mn 1/11/2020 2021 2022 2021 2022 Div. Yield
China Aoyuan Gro 3883 HK OW 2,628 8 2.2 1.9 25.9 17.5 19.8
Kwg Group Holdin 1813 HK OW 4,385 11 3.7 3.1 19.2 18.4 17.4
Growthpoint Prop GRT SJ OW 2,570 1,180 6.6 6.0 (1.7) 11.1 15.7
Seazen Group Ltd 1030 HK OW 5,029 6 3.3 2.8 16.7 17.1 13.4
China Res Power 836 HK OW 5,142 8 4.1 3.7 13.4 11.8 13.2
Shimao Group Hol 813 HK OW 10,720 24 4.6 3.9 17.2 16.5 12.1
Cnooc 883 HK OW 41,220 7 7.4 5.2 57.1 40.8 11.5
Mobile Teles-Adr MBT US OW 9,133 9 10.0 9.1 9.6 9.8 11.3
Turkcell TCELL TI OW 4,942 17 7.5 6.5 24.0 15.3 10.5
China State Cons 3311 HK OW 2,819 4 3.2 2.8 14.8 13.6 10.3
Cifi Holdings Gr 884 HK OW 7,068 7 4.4 3.8 20.7 18.0 10.2
Coal India Ltd COAL IN OW 11,899 142 7.0 6.1 (25.3) 14.0 9.9
Polymetal POLY RX OW 11,177 1,768 8.5 7.9 23.9 8.3 9.7
Nedbank Group NED SJ OW 4,048 12,515 7.5 5.5 44.8 35.9 9.7
Gazprom GAZP RX OW 72,134 227 6.5 4.7 208.0 37.7 9.5
China Overseas 688 HK OW 23,253 16 3.5 3.2 12.0 10.3 9.4
Poly Developme-A 600048 CH OW 27,720 15 4.8 4.2 14.9 14.2 9.3
Lukoil LKOH RX OW 51,990 5,600 10.8 8.4 189.7 28.5 9.0
Sinopec Corp-H 386 HK OW 12,271 4 8.5 7.4 40.5 14.7 8.9
Is Bankasi ISCTR TI OW 4,337 7 3.3 2.8 40.2 19.0 8.9
Eletrobras ELET3 BZ OW 7,893 34 6.8 5.1 12.8 32.9 8.9
Country Garden 2007 HK OW 29,607 10 3.9 3.5 14.1 9.7 8.8
Agile Group Hold 3383 HK OW 5,152 10 3.7 3.4 8.4 9.2 8.7
China Cinda-H 1359 HK OW 2,642 2 3.8 3.3 15.6 14.1 8.6
Absa Group Ltd ABG SJ OW 6,438 11,789 7.8 5.8 57.4 33.5 8.6
Bankcomm-H 3328 HK OW 19,322 4 3.8 3.6 3.8 5.2 8.5
China Merchant-A 001979 CH OW 16,211 13 5.8 4.8 13.0 19.2 8.4
Norilsk Nickel GMKN RX OW 55,949 26,386 8.1 9.1 58.5 -10.7 8.4
Picc P&C-H 2328 HK OW 5,275 6 5.0 4.6 7.8 8.9 8.1
Petrobras-Pref PETR4 BZ OW 31,406 31 12.8 9.2 NA 39.5 8.0
China Shenhua-H 1088 HK OW 6,512 15 6.4 6.4 -0.2 -0.4 8.0
Mtn Group Ltd MTN SJ OW 8,148 6,712 8.3 7.5 5.2 11.3 8.0
Sberbank SBER RX OW 83,551 289 7.1 6.2 25.0 14.2 8.0
Yanzhou Coal-H 1171 HK N 1,551 6 3.7 3.5 1.4 5.8 13.0
Logan Group Co L 3380 HK N 9,138 13 3.9 3.3 19.9 16.7 12.1
Alrosa ALRS RX N 10,419 106 10.5 9.8 83.3 7.4 11.4
China Evergrand 3333 HK N 24,925 15 5.4 5.1 13.8 6.3 9.6
Cqrc Bank-H 3618 HK N 1,024 3 3.1 2.8 7.6 8.7 9.4
Bank Of China-H 3988 HK N 29,113 3 3.8 3.6 4.6 5.2 9.3
Engie Br Ener Sa EGIE3 BZ N 6,433 43 11.8 9.7 19.4 21.7 9.3
Novolipetsk Stee NLMK RX N 17,556 219 8.6 10.1 74.4 (14.4) 9.1
Guangzhou R&F -H 2777 HK N 4,829 10 2.8 2.5 8.2 11.4 8.8
China Power Inte 2380 HK N 2,074 2 5.4 4.2 29.2 30.2 8.7
Tatneft TATN RX N 15,744 539 8.5 7.7 19.6 11.0 8.7
Old Mutual Ltd OMU SJ N 3,595 1,185 6.4 5.5 60.8 16.1 8.7
Wistron Corp 3231 TT N 3,147 31 9.4 8.9 4.5 5.1 8.6
Daqin Railway -A 601006 CH N 14,878 6 7.6 7.3 16.8 4.1 8.4
Greenland Hold-A 600606 CH N 10,655 6 3.7 3.3 13.3 12.3 8.4
Citic Bank-H 998 HK N 6,505 3 3.1 2.9 6.3 7.8 8.4
Source: J.P. Morgan and Bloomberg Finance L.P. Notes: 1) Data retrieved from Bloomberg consensus. 2) Ranked by 2021E dividend yield

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pedro.x.martins@jpmchase.com

EMDIVA Composition
The EMDIVA list is equally-weighted and rebalanced on a monthly basis to
neutralize the heavy bias created by the larger stocks. The 20 largest companies by
market capitalization represent almost 81% of the list, with only the top 5
representing 44%. Assigning equal weights ensures that each constituent is uniformly
represented avoiding a large-cap skew. Currently, each member has a weighting of
1.72% in the list.
 In this edition we have 13 countries being represented in our EMDIVA. Our EM
dividend nobles list is heavy-weighted in Chinese, Russia and Malaysia stocks
and underweight Korean, Indian and Brazilian stocks versus MSCI EM - Figure
4. Chinese companies represent 55.2% of the EMDIVA list, by far the largest
country representation, and well above the 38.2% weight of China in MSCI EM.
Taiwan has the second highest weight in EMDIVA at 8.6%, but is under-
represented with its 13.2% weight in MSCI EM. Russian stocks constitute c.
6.9% weight in EMDIVA, against its 3.0% weight in MSCI EM.
 The top sectors represented in EMDIVA from highest to lowest are Financials,
Real Estate and Materials. The EMDIVA list is relatively underweight
Consumer Discretionary, Information Technology and Communication Services
compared to the MSCI. On the contrary, Real Estate, Financials, and Utilities are
overrepresented - Figure 5.

Figure 4: EMDIVA vs MSCI EM - Country Figure 5: EMDIVA vs MSCI EM - Sector

KR CDS
IN INF
BR TEL
TW IND
SA
HCA
PH
CST
QA
ENE
PL
CL MAT
KW UTE
PE FIN
HU RES
CO
-20% -15% -10% -5% 0% 5% 10% 15% 20% 25%
AR
TH Source: Bloomberg, MSCI and J.P. Morgan. Note: Consumer Discretionary CDS,
EG Consumer Staples CST, Financials FIN, Energy ENE, Materials MAT, Industrials IND,
PK Information Technology INF, Health Care HCA, Communication Services TEL, Utilities
UTE and Real Estate RES
CZ
ZA
AE
TR
GR
ID
MX
MY
RU
CN
-15.0% -10.0% -5.0% 0.0% 5.0% 10.0% 15.0% 20.0%
Source: Bloomberg, MSCI and J.P. Morgan. Note: China CN, South Korea KR, Taiwan TW,
India IN, Brazil BR, South Africa ZA, Mexico MX, Russia RU, Indonesia ID, Malaysia MY,
Thailand TH, Poland PL, Philippines PH, Chile CL, Turkey TR, UAE AE, Qatar QA, Colombia
CO, Greece GR, Peru PE, Hungary HU, Czech CZ, Egypt EG, Kuwait KW and Pakistan PK

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 Pedro Martins Junior, CFA Latin America Emerging Markets Equity Research
(55-11) 4950-4121 13 January 2021
pedro.x.martins@jpmchase.com

EMDIVA Historical Performance

Figure 6: Price returns of EMDIVA vs The hypothetical compounded annual price return of the EMDIVA list would
MSCI EM have been 9.6% in USD over the past decade compared to MSCI EM CAGR of -
600 1.2%.
EMDIVA MXEF Index
500
 Countries. Over a ten-year period, Dividend Nobles in most countries have
400 outperformed their respective MSCI country, with the exception of Korea,
300
Thailand, and UAE. However, in a more recent timeframe of 1-2 years, more
countries’ dividend nobles have not been able to deliver superior performance to
200 their respective MSCI indices.
100
 Sectors. All sectors represented in the EMDIVA list have outperformed their
0 respective MSCI EM sector benchmarks over a 10-year period. Utilities and
08 09 10 11 12 13 14 15 16 17 18 19 20 Materails have led the outperformance.
Source: Bloomberg Finance L.P. and J.P. Morgan

Table 9: EMDIVA versus MSCI EM historical price returns

EMDIVA CAGR EMDIVA country/sector relative CAGR to MSCI Benchmarks
Country 1y 2y 3y 5y 7y 10y 1y 2y 3y 5y 7y 10y
China -6.5% 11.0% 4.4% 12.9% 13.1% 11.2% -33.9% -13.1% -2.6% 0.1% 5.0% 6.2%
Korea -0.7% -1.3% -12.0% 9.6% -3.8% -1.9% -43.3% -26.8% -18.8% -4.1% -10.0% -7.0%
Taiwan 37.5% 37.4% 25.2% 23.5% 13.9% 14.6% 0.3% 3.1% 8.4% 5.8% 2.9% 7.8%
India -4.4% -7.9% -10.4% 7.3% 10.8% 2.1% -18.6% -18.0% -13.8% -0.7% 3.3% 0.2%
Brazil 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 20.9% 1.8% 2.5% -12.6% 2.4% 6.7%
South Africa 4.0% 23.6% 7.6% 18.0% 10.6% 0.3% 9.7% 23.0% 16.9% 15.4% 12.9% 3.3%
Russia -22.5% 7.8% 7.0% 16.9% 1.6% 0.7% -5.4% -0.4% 3.6% 6.3% 3.9% 4.0%
Mexico -1.3% -2.2% -5.2% 0.2% -4.7% -1.4% 2.6% -4.0% -0.1% 3.0% 1.2% 2.0%
Thailand -21.1% -3.0% 2.2% 15.6% -6.0% -4.9% -7.2% 1.1% 7.7% 9.3% -8.0% -6.6%
Indonesia -7.5% 5.0% 4.1% 11.2% 11.9% 11.3% 3.0% 7.3% 9.5% 7.7% 9.8% 12.0%
Malaysia -5.3% -3.3% -2.3% 0.1% -4.6% 0.4% -5.4% -0.7% 2.5% 0.6% 1.3% 3.5%
UAE 45.8% 40.3% 12.7% 6.3% 1.9% 3.3% 52.0% 43.8% 19.1% 8.8% 5.4% -0.3%
Turkey 42.4% 34.0% 2.2% 10.3% 7.0% 7.2% 52.3% 35.6% 20.4% 18.4% 16.2% 16.7%
Greece 0.6% 21.6% 5.2% 9.9% 2.8% 7.0% 30.6% 22.7% 20.5% 17.6% 26.4% 29.3%
EM -0.2% 13.1% 6.2% 13.9% 10.6% 9.6% -16.0% -2.6% 2.5% 3.7% 6.9% 8.4%
Cons Discretionary 42.4% 34.0% 2.2% 10.3% 7.0% 7.2% 6.4% -1.1% -4.6% -0.6% 1.9% 2.9%
Consumer Staples -2.7% 1.8% -0.9% 6.9% 6.8% 9.9% -11.3% -6.9% -0.9% 2.9% 6.6% 8.5%
Financials -1.8% 10.2% 1.5% 11.2% 8.3% 6.4% 9.5% 12.0% 6.7% 7.5% 8.8% 8.4%
Energy -21.1% 3.7% 6.2% 15.5% 4.0% 2.1% -2.9% 6.8% 8.0% 7.5% 6.6% 7.2%
Materials 10.5% 20.9% 13.5% 19.8% 11.0% 5.5% -11.0% 9.4% 11.4% 7.6% 10.1% 9.7%
Industrials -5.4% -10.9% -11.2% -11.7% 10.7% 3.2% -8.4% -14.8% -8.7% -13.8% 12.7% 7.1%
Info Technology 49.0% 47.8% 30.7% 25.3% 15.4% 16.0% -7.9% 0.8% 11.1% -0.3% -2.0% 2.2%
Health Care -3.1% 14.6% -2.9% 7.7% 9.5% 7.7% -54.8% -10.3% -9.8% -0.4% 2.2% 1.7%
Communication Sv. -3.3% 11.7% 0.5% 6.2% -0.8% 2.9% -29.0% -5.6% -3.7% 1.5% 0.3% 4.1%
Utilities -4.2% -3.0% 0.2% 3.9% 2.7% 6.6% 4.5% -0.9% 3.7% 3.6% 6.3% 11.3%
Source: J.P. Morgan, Bloomberg Finance L.P., MSCI and Datastream. Performance as of 31st December 2020.

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pedro.x.martins@jpmchase.com

Risks
Our methodology in selecting EMDIVA is quantitative. Our aim is to provide a
corporate governance score base on dividend track record. There are several risk
factors that should be taken in consideration in relation to investment dividend
strategies. We discuss some of those risks below:

 Cycle investing. Improving confidence on global growth should drive bond

yields higher inflicting pain to bond proxies. Further, dividend per share can be
cut unlike a coupon on a bond.
 Growth opportunities. Companies' dividend strategies might alter given growth
opportunities presented to management such as: (1) inorganic growth options via
mergers and acquisitions; or (2) simply an aggressive capital expenditure plan.
Those might temporarily or permanently impair any given company's ability to
pay dividends.
 Taxation. Legislation changes can alter a company’s willingness to pay
dividends beyond their bylaws. For example, in Brazil, companies can pay
“Interest on Own Capital” in lieu of dividends as an effective tax planning tool.
 Corporate Law. Quite often accounting income differs from the income that
serves as the base for tax payments. Legislators can alter the base for calculation
of payable dividends.
 Overpaying. An aggressive dividend payout strategy might result in lower
sustainable growth in the future. Profitability ratios and earnings retention can be
equated to estimates of long-term growth rates.

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(55-11) 4950-4121 13 January 2021
pedro.x.martins@jpmchase.com

Appendix
The Yield Seeker Screen – Targeting sustainable dividend payers

Our Global Quantitative Strategy team publishes “The Yield Seeker Screen –
Targeting sustainable dividend payers” every week. The yield seeker tool targets
high dividend yield stocks with a particular emphasis on their ability to continue
paying going forwards. They do this through a series of conditional flags to ensure
stocks:

 Have 'reasonable looking' payout ratios (Last Actual and next 2 forecast Payout
ratios are all between 35% and 85%)
 Have gearing under control (Total Debt/Total Equity is less than 100%)
 Have had no dramatic change to dividend cover (Last actual payout ratio and next
forecast payout ratio are within +/-20% of each other).
 Display a strong DPS track record (Based on the last 6 years of actuals (where
available) the DPS has never been cut. (i.e. flat or improving)
The default universe used is MSCI All World and by default the report is sorted on
the Dividend Yield FY1.

From the above screen, we list below the top 20 EM stocks by market cap. From
these, Gazprom and Sberbank screen in our EMDIVA list as well.

Table 10: The EM Yield Seeker Screen - Targeting sustainable dividend payers (top 20 by MSCI Market Cap)
F'cast Payout Dividend Yield (%)
Payout Ratio Ratio within DPS record is
looks Gearing 20% of last consistent or 3 Yr Min Yield
Name Country "conservative"? Looks "OK"? year? improving? (%) FY0 FY1 FY2
Samsung Electronics South Korea Y Y Y 1.60% 1.69% 2.02% 1.99%
TSMC Taiwan Y Y Y Y 1.98% 1.75% 2.01% 2.23%
Allegro.eu Poland Y Y 0.00% 0.00%
Pinduoduo China Y Y 0.00% 0.00%
Reliance Industries India Y Y Y 0.29% 0.33% 0.37% 0.45%
Tata Consultancy Services India Y Y 1.15% 1.07% 1.74% 2.39%
FEMSA Mexico Y 1.76% 1.67%
Vale Brazil Y 1.81% 1.52% 3.79% 6.95%
Naspers Limited Class N South Africa Y Y 0.15% 0.16% 0.23% 0.31%
NIO Inc. China Y 0.00% 0.00%
SK hynix South Korea Y Y 1.03% 0.77% 0.89% 1.05%
PTT Public Thailand Y Y Y 3.52% 4.76% 2.22% 3.57%
Sberbank Russia Russia Y Y Y Y 4.41% 6.83% 5.23% 7.23%
Hindustan Unilever India Y Y Y 1.01% 1.02% 1.42% 1.53%
Infosys India Y Y Y Y 1.39% 1.35% 2.09% 2.32%
Petroleo Brasileiro SA Pfd Brazil 3.02% 3.06% 1.14% 2.30%
Baidu China Y 0.00% 0.00%
KE Holdings China Y Y 0.00% 0.00%
Gazprom Russia Y 4.94% 7.08% 4.61% 6.33%
HDFC India Y Y 0.82% 0.79% 0.79% 0.95%
Source: J.P. Morgan Global Equity Quantitative Strategy.

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pedro.x.martins@jpmchase.com

Analyst Certification: The Research Analyst(s) denoted by an “AC” on the cover of this report certifies (or, where multiple Research
Analysts are primarily responsible for this report, the Research Analyst denoted by an “AC” on the cover or within the document
individually certifies, with respect to each security or issuer that the Research Analyst covers in this research) that: (1) all of the views
expressed in this report accurately reflect the Research Analyst’s personal views about any and all of the subject securities or issuers; and
(2) no part of any of the Research Analyst's compensation was, is, or will be directly or indirectly related to the specific recommendations
or views expressed by the Research Analyst(s) in this report. For all Korea-based Research Analysts listed on the front cover, if
applicable, they also certify, as per KOFIA requirements, that the Research Analyst’s analysis was made in good faith and that the views
reflect the Research Analyst’s own opinion, without undue influence or intervention.
All authors named within this report are Research Analysts unless otherwise specified. In Europe, Sector Specialists (Sales and Trading)
may be shown on this report as contacts but are not authors of the report or part of the Research Department.
Pursuant to Brazilian regulation, the primary research analyst signing this report certifies that (1) all recommendations expressed herein
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involved in the preparation of this report will disclose herein any situation that impacts or that could impact the impartiality of the
recommendations contained in this report or that constitutes or may constitute a conflict of interest.

Important Disclosures

This report is a product of the research department's Global Quantitative and Derivatives Strategy group. Views expressed may differ
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other derivatives are complex instruments, may involve a high degree of risk, and may be appropriate investments only for sophisticated
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average total return of the stocks in the analyst’s (or the analyst’s team’s) coverage universe.] Neutral [Over the next six to twelve
months, we expect this stock will perform in line with the average total return of the stocks in the analyst’s (or the analyst’s team’s)
coverage universe.] Underweight [Over the next six to twelve months, we expect this stock will underperform the average total return of
the stocks in the analyst’s (or the analyst’s team’s) coverage universe.] Not Rated (NR): J.P. Morgan has removed the rating and, if
applicable, the price target, for this stock because of either a lack of a sufficient fundamental basis or for legal, regulatory or policy
reasons. The previous rating and, if applicable, the price target, no longer should be relied upon. An NR designation is not a
recommendation or a rating. In our Asia (ex-Australia and ex-India) and U.K. small- and mid-cap equity research, each stock’s expected
total return is compared to the expected total return of a benchmark country market index, not to those analysts’ coverage universe. If it
does not appear in the Important Disclosures section of this report, the certifying analyst’s coverage universe can be found on J.P.
Morgan’s research website, www.jpmorganmarkets.com.

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 Pedro Martins Junior, CFA Latin America Emerging Markets Equity Research
(55-11) 4950-4121 13 January 2021
pedro.x.martins@jpmchase.com

J.P. Morgan Equity Research Ratings Distribution, as of January 01, 2021

Overweight Neutral Underweight
(buy) (hold) (sell)
J.P. Morgan Global Equity Research Coverage 48% 39% 13%
IB clients* 53% 49% 35%
JPMS Equity Research Coverage 45% 40% 14%
IB clients* 78% 69% 51%
*Percentage of subject companies within each of the "buy," "hold" and "sell" categories for which J.P. Morgan has provided investment banking services
within the previous 12 months. Please note that the percentages might not add to 100% because of rounding.
For purposes only of FINRA ratings distribution rules, our Overweight rating falls into a buy rating category; our Neutral rating falls into a hold rating
category; and our Underweight rating falls into a sell rating category. Please note that stocks with an NR designation are not included in the table above.
This information is current as of the end of the most recent calendar quarter.

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(55-11) 4950-4121 13 January 2021
pedro.x.martins@jpmchase.com

have any queries, please contact the relevant Research Analyst in your jurisdiction or the entity in your jurisdiction that has distributed
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pedro.x.martins@jpmchase.com

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 Pedro Martins Junior, CFA Latin America Emerging Markets Equity Research
(55-11) 4950-4121 13 January 2021
pedro.x.martins@jpmchase.com

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Copyright 2021 JPMorgan Chase & Co. All rights reserved. This material or any portion hereof may not be reprinted, sold or
redistributed without the written consent of J.P. Morgan. #$J&098$#*P

J.P. Morgan Emerging Market Strategy Team and Key Reports

Emerging Markets Equity Strategy
Pedro Martins Junior, CFA
Rajiv Batra
Jainik Mody, CFA
Sonia Tewani
Anindita Gandhi
Regional Equity Strategy
Mixo Das
Rajiv Batra
David Aserkoff, CFA
Emy Shayo
Key Emerging Markets Equity Strategy Reports
Category Topic
Portfolio Key Trades and Risks
Economic Heatmaps
EM Equity Monthly Wrap
Positioning Consensus Asset Allocation
EM Money Trail
Allocation to EM Equities
Earnings, FX, EM Steering Board
Valuation EM Earnings Tracker
Earnings Yield to Bond Yield
Top Down Earnings
Price vs. Earnings Cycle
Secular Buyback / Payout
COVID-19 Vaccine Play
COVID-19 Recovery
COVID-19
De-globalization
EM Demographics
Dividends
ESG
ESG
ETFs
Financial Leverage
Inflation
Low Bond Yield Investing
Oil Price
Small Caps
Tactical Rotation to Value
Value Creation
Cyclical Buy Low / Sell High
Capitulation Scorecard
Economic Acceleration
Economic Acceleration
Economic Slowdown
Economic Slowdown
Emerging Markets (+55 11) 4950 4121 pedro.x.martins@jpmorgan.com
Emerging Markets (+65) 6882 8151 rajiv.j.batra@jpmorgan.com
Emerging Markets (+44 20) 3493-0443 jainik.mody@jpmorgan.com
Emerging Markets (+91 22) 6157 3803 sonia.tewani@jpmorgan.com
Emerging Markets (+91 22) 6157 3248 anindita.gandhi@jpmorgan.com
EM Asia (+852) 2800 0511 mixo.das@jpmorgan.com
Southeast Asia (+65) 6882 8151 rajiv.j.batra@jpmorgan.com
CEEMEA (+44 20) 7134 5887 david.aserkoff@jpmorgan.com
LatAm (+55 11) 4950 6684 emy.shayo@jpmorgan.com
Publication Link Publication Date
Key Trades and Risks: 2021 Year Ahead November 23, 2020
EM Economic Heatmaps January 4, 2021
Best quarter since end 2009 – 4Q & December 2020 January 4, 2021
Consensus Asset Allocation: EM funds asset allocation and performance January 8, 2021
A happy start to the year January 8, 2021
Early stage positioning - $320 billion in Dry Powder August 1, 2018
Identifying change and providing perspective on key economic and equity market data December 17, 2020
3Q20 Earnings
of emerging Season Tracker: 53% Completed
markets November 12, 2020
EM equities attractive to bonds: value for bulls and cushion for bears April 7, 2020
Back to the Drawing Board March 13, 2020
Price performance leading the earnings cycle March 13, 2019
Low rates for long, the search for EM dividend and buyback yield and the payout risk April 15, 2020
COVID-19 Vaccine Outlook and EM Equity Trades September 16, 2020
Sustainable Re-Opening and Second Wave Navigator July 17, 2020
Lasting Changes, concerning long-term and constructive short-term thoughts April 23, 2020
De-Globalization Thoughts for EM Equities April 8, 2019
EM Demographic Dividend: The Clock Is Ticking August 12, 2020
EM Dividend Nobles 2.0 - Looking for Shelter in Volatile Times April 28, 2020
ESG gains momentum on COVID-19 and social protests June 16, 2020
ESG: Women on EM Boards – It's Moving but Mind the Gap October 14, 2020
EM Equity ETFs - Past, Present and Future June 6, 2019
Global and EM credit markets: concerns rising March 19, 2020
Cash Is King; Inflation Is Queen October 8, 2020
Ideas for policy rates near zero: gold, growth compounders, small caps and dividends January 29, 2020
Deep drill down: oil prices and EM equity performance January 8, 2020
Time for Small Cap Ideas May 21, 2020
Recapping short-term view on EM Equities, Value & Small Caps June 4, 2020c
Value Creators: Quest for ROE Above Cost of Capital March 25, 2020
Revisiting the Buy Low - Sell High Investment Strategy March 10, 2020
Capitulation Scorecard – Scanning for Resiliency and Complacency May 15, 2020
Valuation No Excuse - Economic Growth to Accelerate into 2H20 April 13, 2020
Tactically rebalancing toward risk: upgrade China to OW October 21, 2019
Can EM equities continue to perform if global growth expectations are going lower? January 30, 2019
What If? Trade, US Late Cycle and EM Fragilities September 26, 2018

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 Pedro Martins Junior, CFA Latin America Emerging Markets Equity Research
(55-11) 4950-4121 13 January 2021
pedro.x.martins@jpmchase.com

Economic Slowdown COVID-19: Three levers to manage slowdown risk March 3, 2020
Global Growth Quadrants EM equities best perform when global PMI is below trend but accelerating November 7, 2019
Growth vs. Rates Clash of Titans: Slower Growth vs. Policy Support June 18, 2019
Recession Risk Higher recession risk could be the cost of US exceptionalism phase-out November 7, 2018
US Correlation Can EM Equities Rally Absent Global Equities Tailwinds? April 4, 2018
US Yield Curve Inversion US Yield Curve Inversion and the EM Equity Trades August 26, 2019
USD and EM Equities The Broad USD boost to EM Equities: asymmetric positive risk June 10, 2020
Value Style Tactical OW on Value within EM equities January 22, 2019
Geopolitics Argentina Will the tail wag the dog? We think not August 30, 2019
Italy Adding Italy to the List of Concerns March 31, 2018
Turkey Turkey and EM equities contagion risk August 14, 2018
US-China US-China fighting too many battles simultaneously May 27, 2020
US-China US-China tensions and de-globalization thoughts (again) May 11, 2020
US-China Tactical thoughts on the US-China partial deal October 13, 2019
US-China US-China trade dispute back to center stage May 6, 2019
US-China Just when earnings revisions were turning positive May 13, 2019
US-China An equity view on the US-China trade rebalance February 20, 2019
US Elections 2020 Biden or Trump? EM Equity Trades September 10, 2020
Source: J.P. Morgan. Note: For the complete list of our Research, please visit Pedro Martins Junior on Morgan Markets.

18
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