Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Event-Driven

<div class="content-highlight">According to <a href="https://www.bloomberg.com/news/articles/2020-11-09/softbank-is-said-to-be-in-talks-to-sell-robot-maker-to-hyundai" target="_blank" rel="noopener">Bloomberg</a>, <a href="https://www.smartkarma.com/entities/hyundai-motor-co" target="_blank" data-smartkarma-citation="entities:155:1" rel="noopener">Hyundai Motor Co (005380 KS)</a> is in discussions to purchase Boston Dynamics. Although the exact terms are yet to be finalized, the local media mentioned that the purchase <a href="https://view.asiae.co.kr/article/2020111011314146483" target="_blank" rel="noopener">price</a> could fetch nearly $1 billion for the control of Boston Dynamics, which is best known for one of the most advanced robotic systems in the world including BigDog and the humanoid Atlas.</div>If the deal is successfully completed, we think that the market would view this deal positively on Hyundai Motor. Keep in mind that this M&amp;A deal could potentially fall apart due to many issues including price.

According to Bloomberg, Hyundai Motor Co (005380 KS) is in discussions to purchase Boston Dynamics. Although the exact terms are yet to be finalized, the local media mentioned that the purchase price could fetch nearly $1 billion for the control of Boston Dynamics, which is best known for one of the most advanced robotic systems in the world including BigDog and the humanoid Atlas.If the deal is successfully completed, we think that the market would view this deal positively on Hyundai Motor. Keep in mind that this M&amp;A deal could potentially fall apart due to many issues including price.  

Korea M&A Spotlight: Hyundai Motor In Talks to Acquire Boston Dynamics from Softbank

Telco/Internet specialist

Kirk Boodry

Redex Research

Equity Bottom-Up

Softbank posted solid Q2 results helped by further market gains in the US (for both Vision Fund and its listed share program) and the timely IPO of recent investment Beike in August. But a $2.8bn derivative loss wiped out public market investment gains and highlights the risk from more aggressive trading. Softbank had $3.4bn in options exposure as of Q2 and whilst that is only 1% of net asset value, it is more meaningful when measured against market cap (3%) and with the next portfolio update not coming until February it is understandable why the discount to fair value remains wide

Softbank posted solid Q2 results helped by further market gains in the US (for both Vision Fund and its listed share program) and the timely IPO of recent investment Beike in August. But a $2.8bn derivative loss wiped out public market investment gains and highlights the risk from more aggressive trading. Softbank had $3.4bn in options exposure as of Q2 and whilst that is only 1% of net asset value, it is more meaningful when measured against market cap (3%) and with the next portfolio update not coming until February it is understandable why the discount to fair value remains wide

Softbank Group - Q2 20 Results: Vision Fund Luster Tarnished by Derivative Losses

Senior Credit Analyst, Lucror Analytics

Leonard Law, CFA

Senior Credit Analyst

High Yield Experts

Lucror Analytics

Lucror Analytics is a leading credit and ESG research specialist and a provider of technology solutions for differentiated fixed income strategies. Our roots are in bottom-up fundamental credit analysis with a specialization in high yield corporate credits from Europe, Asia and Latin America. We are one of few research specialists integrating ESG considerations with fundamental credit research through a dedicated ESG platform. Our ESG assessment covers five key criteria: Disclosure, E,S, & G Pillars, Controversies, ESG Impact on Credit and ESG Momentum.

Recognizing the importance and value-add of Factor Investing in fixed income, Lucror developed the Smart Quant Navigator (SQN), an intuitive platform that helps clients devise and implement factor-based strategies ranging from pure quant to active fundamental, with integrated ESG.

Our company has been at the forefront of developments in the fixed income markets, identifying opportunities and consistently delivering new products and value-adding solutions to clients. Lucror has close relationships with the largest and most reputable asset managers, family offices, hedge funds, investment and wealth managers globally.

Credit

With the Q2/20 earnings season completed and Q3 season underway, the impact of COVID-19 on the credit profiles of issuers under our coverage is becoming more visible. Several companies have already achieved solid recoveries in Q3, as reflected by their results. However, new government-imposed lockdowns will have a substantial impact on the Q4 numbers.  We believe it is useful to analyse how COVID-19 has impacted companies at the height of the pandemic in Q2/20. As such, we provide an overview of the development of credit stats and liquidity, followed by brief round-ups of the developments and outlooks in the industries and various companies that we cover.

  With the Q2/20 earnings season completed and Q3 season underway, the impact of COVID-19 on the credit profiles of issuers under our coverage is becoming more visible. Several companies have already achieved solid recoveries in Q3, as reflected by their results. However, new government-imposed lockdowns will have a substantial impact on the Q4 numbers.    We believe it is useful to analyse how COVID-19 has impacted companies at the height of the pandemic in Q2/20. As such, we provide an overview of the development of credit stats and liquidity, followed by brief round-ups of the developments and outlooks in the industries and various companies that we cover. 

Europe HY – Q2/20 Results Review And Credit Metrics Amid COVID-19 - Lucror Analytics

Softbank Corp. posted a solid Q2 helped by Internet upside, a one-time gain from how it accounts for handset instalment plans and solid upside in enterprise sales as telework/WFH trends boost sales. The company kept FY guidance intact despite H1 outperformance as there could be headwinds from mobile pricing changes and higher spending at Z Holdings but management confidence on the analyst call was high.  Importantly, the company also provided reassurance on the dividend and reduced regulatory exposure.

Softbank Corp. posted a solid Q2 helped by Internet upside, a one-time gain from how it accounts for handset instalment plans and solid upside in enterprise sales as telework/WFH trends boost sales. The company kept FY guidance intact despite H1 outperformance as there could be headwinds from mobile pricing changes and higher spending at Z Holdings but management confidence on the analyst call was high.  Importantly, the company also provided reassurance on the dividend and reduced regulatory exposure. 

Softbank Corp - Q2 20 Results: Positive Financial Report and Dividend Reassurance

In this month’s “In-Focus” section, we provide an update to our 2018 analysis of returns and volatility for unrated Chinese issuers. Since our first report, the number of such issuers has increased notably. At the same time, with the Lucror Chinese Industrial index having run since 1 January 2018, we can now better compare the unrated issuers' performance relative to peers. The Asia Monthly focuses on providing updates on recent events, information on new issues and spread movements, as well as summarising our top picks, and discussing specific areas of interest in the “In-Focus” section. The Asia Monthly is intended to broaden investors' understanding of the Asian USD high-yield market.

  In this month’s “In-Focus” section, we provide an update to our 2018 analysis of returns and volatility for unrated Chinese issuers. Since our first report, the number of such issuers has increased notably. At the same time, with the Lucror Chinese Industrial index having run since 1 January 2018, we can now better compare the unrated issuers' performance relative to peers.   The Asia Monthly focuses on providing updates on recent events, information on new issues and spread movements, as well as summarising our top picks, and discussing specific areas of interest in the “In-Focus” section. The Asia Monthly is intended to broaden investors' understanding of the Asian USD high-yield market.  

Asia HY Monthly - Returns And Volatility For Unrated Chinese Issuers (2020) - Lucror Analytics

Japan

SoftBank Group Corp. provides telecommunication services. The Company also operates ADSL (Asymmetric Digital Subscriber Line) and fiber optic high-speed Internet connection, e-Commerce businesses, and Internet based advertising and auction businesses.

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Softbank Group (9984 JP)

Korea M&A Spotlight: Hyundai Motor In Talks to Acquire Boston Dynamics from Softbank

Hyundai Motor is in discussions to acquire Boston Dynamics from Softbank. Boston Dynamics has one of the most advanced robotic systems in the...

Douglas Kim

Softbank Group - Q2 20 Results: Vision Fund Luster Tarnished by Derivative Losses

Returns at Vision Fund has come roaring back but a $2.8bn derivative trading loss highlights the higher risk profile with Softbank's new listed...

Kirk Boodry

Europe HY – Q2/20 Results Review And Credit Metrics Amid COVID-19 - Lucror Analytics

With the Q2/20 earnings season completed and Q3 season underway, the impact of COVID-19 on the credit profiles of issuers under our coverage is...

Lucror Analytics

Softbank Corp - Q2 20 Results: Positive Financial Report and Dividend Reassurance

For Q2 20, Softbank beat financial expectations, reassured on the dividend and highlighted how diversification has lowered regulatory exposure.

Kirk Boodry

Asia HY Monthly - Returns And Volatility For Unrated Chinese Issuers (2020) - Lucror Analytics

In this month’s “In-Focus” section, we provide an update to our 2018 analysis of returns and volatility for unrated Chinese issuers. Since our...

Lucror Analytics

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