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Smartkarma Daily Briefs

Aug 25
0

Daily Brief Macro: Aussie and Kiwi: A Tale of Two Countries and more

By | Daily Briefs, Macro

In today’s briefing:

  • Aussie and Kiwi: A Tale of Two Countries
  • Overview #8 Plus Ca Change…
  • Fed Jackson Hole Guidance

Aussie and Kiwi: A Tale of Two Countries

By Alex Ng

  • We will look into the “well-known “correlation among the Aussie and well-known benchmarks to give  a closer look towards factors that have been affecting the movement of the Australian Dollar.
  • We will look into the performance of the Aussie relative to the Kiwi. The Aussie and Kiwi are viewed to be closely correlated given their geographic proximity and trade partnerships.
  • They are also being categorized as commodity currencies, with their dependence in commodity export.

Overview #8 Plus Ca Change…

By Rikki Malik

  • A review of recent events/data impacting our investment themes or outlook
  • The Nasdaq, China and the JPY walk into a bar.
  • The world’s biggest uranium miner cuts its 2025 production guidance

Fed Jackson Hole Guidance

By Alex Ng

  • Fed Powell clearly signaled a Sep 18 FOMC rate cut, but his analysis on the economy is softer than harder landing.
  • Though the option of 50bps was not ruled out, the comments from Powell and other Fed officials are more consistent with 25bps than 50bps. 
  • Nevertheless, the Fed is now more focused on the labor market, which suggests we think will be improving even with mere 25bps cut this year.

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Aug 25
0

Daily Brief Thailand: Fabrinet and more

By | Daily Briefs, Thailand

In today’s briefing:

  • Fabrinet (FN): A Bear’s Perspective! – Major Drivers

Fabrinet (FN): A Bear’s Perspective! – Major Drivers

By Baptista Research

  • Fabrinet concluded the fiscal year 2024 on a strong note with record revenue and earnings per share, reflecting robust execution across its business segments.
  • For the fourth quarter, the company posted revenue of $753 million, exceeding its guidance and marking a 15% year-over-year increase and a 3% increase sequentially.
  • Non GAAP earnings per share for the quarter came in at $2.41, also surpassing the projected range.

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Aug 25
0

Daily Brief Australia: Clarity Pharmaceuticals Ltd and more

By | Australia, Daily Briefs

In today’s briefing:

  • Clarity Pharmaceuticals Ltd (CU6 AU): An Attractive Bet on Red Hot Radiopharmaceutical Field

Clarity Pharmaceuticals Ltd (CU6 AU): An Attractive Bet on Red Hot Radiopharmaceutical Field

By Tina Banerjee

  • Clarity Pharmaceuticals Ltd (CU6 AU) received FDA fast track designation for its lead candidate 64Cu-SAR-bisPSMA for PET imaging of prostate cancer lesions. Currently, 64Cu-SAR-bisPSMA is in phase 3 trial.
  • If approved, 64Cu-SAR-bisPSMA has the potential the best-in-class diagnostic as the product has improved lesion detection capability compared to existing prostate cancer diagnostics.
  • Clarity’s copper platform, strong prostate pipeline and therapeutic and diagnostic efficacy data represents an attractive opportunity to grow a significant radiopharmaceutical franchise in oncology and other indications.

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Aug 25
0

Daily Brief South Korea: Korea Zinc and more

By | Daily Briefs, South Korea

In today’s briefing:

  • Trading Situation for Hyundai Motor’s 5% Stake in Korea Zinc, Set to Be Unlocked in October

Trading Situation for Hyundai Motor’s 5% Stake in Korea Zinc, Set to Be Unlocked in October

By Sanghyun Park

  • The market is watching closely for when Hyundai Motor might sell its 5% stake in Korea Zinc, with the lockup ending on October 7th.
  • Hyundai might mediate to end the lawsuit and lift the injunction, potentially agreeing to sell the stake to a third party or on the market.
  • The uncertainty around Hyundai’s Korea Zinc stake sale makes trading challenging, but its actions in Q4 could significantly affect Korea Zinc’s stock price and create trading opportunities.

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Aug 25
0

Daily Brief United States: Vector, Lowe’s Companies Inc, Oddity Tech , Deere & Co, Estee Lauder Companies Cl A, Lumentum Holdings, Madison Square Garden Sports Corp., Medtronic Plc, Paycor HCM, Tapestry Inc and more

By | Daily Briefs, United States

In today’s briefing:

  • Japan Tobacco/Vector Group: Possible Bump-Up?
  • Lowe’s Companies: A Dive Into Its Brand Strength & Market Position! – Major Drivers
  • Oddity Tech: ~34% Downside Risk As Growth Will Slow Down
  • Deere & Company: These Are The 4 Biggest Challenges In Its Path! – Major Drivers
  • Estée Lauder Companies: A Tale Strategic Pricing & Precision Marketing! – Major Drivers
  • Lumentum Holdings Inc.: Expansion in High-Speed Optical Transceivers & Other Major Drivers
  • Madison Square Garden Sports Corp.: Enhancements in Fan Experience and Venue Utilization As A Critical Growth Lever! – Major Drivers
  • Medtronic plc: Are Its Investments in Robotics with Hugo Robotic-Assisted Surgery System Yielding Results? – Major Drivers
  • Paycor HCM Inc.: Their Expanded Enterprise and Embedded Partnerships Is Driving Our Optimism! – Major Drivers
  • Tapestry Inc.: A Story Of Enhanced Brand Building & Consumer Engagement! – Major Drivers

Japan Tobacco/Vector Group: Possible Bump-Up?

By Jesus Rodriguez Aguilar

  • JT plans to acquire 100% of Vector Group at $15.00/share, a 29.9% premium. The offer requires over 50% acceptance, with Board support and completion expected by late 2024, pending approvals.
  • The shares go ex-dividend on August 30, with payment on September 12. Adjusted for the dividend, shares trade at a -0.4% gross spread. My fair value estimated is $15.92/share.
  • Consensus sets a target price of $16/share. JT may consider raising its offer to this level (6.67%), especially if they see Vector as a strong long-term investment.

Lowe’s Companies: A Dive Into Its Brand Strength & Market Position! – Major Drivers

By Baptista Research

  • Lowe’s Companies’ second quarter 2024 earnings outlined a mixed performance amid challenging market conditions, reflecting both the strengths and weaknesses of its current business strategy.
  • The company reported Q2 sales of $23.6 billion, with comparable sales down by 5.1%.
  • This decline was attributed to a decrease in demand for Do-It-Yourself (DIY) projects, partially mitigated by solid performance in the Professional (Pro) segment and a growth in online sales.

Oddity Tech: ~34% Downside Risk As Growth Will Slow Down

By Andrei Zakharov

  • Oddity Tech, owner of famous global brands IL MAKIAGE and SpoiledChild, is growing slower than in 2022 and 2023. The overall growth will slow down to ~20% y/y in 2025.
  • According to my estimates and SEC filings, private equity firm L Catterton, the largest shareholder, reduced its stake in Oddity Tech to 18.4%, down from ~42% prior to an IPO.
  • I see ~34% downside risk in Oddity Tech stock as growth will slow down and the company will launch new brands only in the second half of 2025.

Deere & Company: These Are The 4 Biggest Challenges In Its Path! – Major Drivers

By Baptista Research

  • Deere & Company reported its third-quarter earnings, revealing a mixed financial performance amid varied market conditions across its segments.
  • Despite a tough macroeconomic environment, the company maintained a disciplined approach, particularly in managing inventory and costs, which was evident from an equipment operations margin of 18.5%.
  • However, the reduced demand in both agricultural and construction sectors, coupled with price competition, led to a decline in net sales and revenues by 20% and 17% respectively, totaling $11.387 billion and $13.152 billion.

Estée Lauder Companies: A Tale Strategic Pricing & Precision Marketing! – Major Drivers

By Baptista Research

  • Estée Lauder Companies’ fiscal 2024 results reflect a challenging environment particularly impacted by market conditions in China and the Asia-Pacific region.
  • The fiscal year witnessed a 2% contraction in organic sales, with a modest gross margin expansion and a decline in adjusted operating margin by 120 basis points to 10.2%.
  • The company’s performance in various regions displayed disparity, with noted declines in Mainland China contrasted by growth in EMEA (Europe, the Middle East, and Africa) primarily due to a recovery in Asia travel retail.

Lumentum Holdings Inc.: Expansion in High-Speed Optical Transceivers & Other Major Drivers

By Baptista Research

  • Lumentum Holdings, a provider of optical and photonic solutions, reported mixed performance in its fourth quarter fiscal year 2024 results.
  • The company experienced a decrease in both the Cloud & Networking and Industrial Tech segments but made significant progress in expanding its customer base and advancing its technology for future growth, particularly in high-speed optical transceivers and datacom components.
  • Baptista Research looks to evaluate the different factors that could influence the company’s price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology.

Madison Square Garden Sports Corp.: Enhancements in Fan Experience and Venue Utilization As A Critical Growth Lever! – Major Drivers

By Baptista Research

  • Madison Square Garden Sports Corp. (MSG Sports) has presented a robust financial performance in its fiscal 2024 fourth quarter and year-end earnings, reflecting effective management and promising developments within its operations.
  • The company, as part of its year-end declarations, showcased record-setting revenues exceeding $1 billion and an adjusted operating income of $172 million.
  • These figures surpassed the previous fiscal year’s outcomes, underscoring the company’s financial growth trajectory.

Medtronic plc: Are Its Investments in Robotics with Hugo Robotic-Assisted Surgery System Yielding Results? – Major Drivers

By Baptista Research

  • Medtronic PLC reported its fiscal 2025 first-quarter results, reflecting a sustained performance trajectory with key financial metrics meeting or exceeding expectations.
  • Highlights from the earnings call emphasize continued growth across several of Medtronic’s business segments, along with strategic advancements in product innovations and global market expansions.
  • Revenue growth was reported at 5.3%, surpassing the midpoint of guidance, with significant contributions from the Cardiovascular, Neuroscience, and Diabetes segments.

Paycor HCM Inc.: Their Expanded Enterprise and Embedded Partnerships Is Driving Our Optimism! – Major Drivers

By Baptista Research

  • Paycor’s fourth quarter and full year 2024 earnings call, which ended on June 30, 2024, reflects a company strategically navigating its growth amidst an evolving market landscape.
  • With an 18% revenue growth for the quarter and a 19% increase for the fiscal year, Paycor appears to have successfully executed its strategic initiatives.
  • The company managed to increase the average number of employees on its platform by 9% and expanded the amount earned per employee per month by 6%, signaling efficient scaling and value addition.

Tapestry Inc.: A Story Of Enhanced Brand Building & Consumer Engagement! – Major Drivers

By Baptista Research

  • Tapestry, Inc. reported its fourth quarter earnings where it demonstrated notable strengths internationally with a 6% growth led by significant contributions from various regions including Europe, Other Asia, and Japan.
  • However, modest revenue declines in North America, coupled with more challenging conditions in Greater China, posed challenges in otherwise robust financial outcomes.
  • Revenue in Greater China grew by 3% overall for the year but showcased declines in the latter half.

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Aug 25
0

Daily Brief India: Canara Bank, Can Fin Homes, Trent Ltd and more

By | Daily Briefs, India

In today’s briefing:

  • NIFTY Bank Index Rebalance: Canara Bank IN; Bandhan Bank OUT
  • Narrative and Numbers | Housing Finance – PSUs | FY24
  • NIFTY50 Index Rebalance: Trent, BEL to Replace Divi’s Lab, LTIMindtree

NIFTY Bank Index Rebalance: Canara Bank IN; Bandhan Bank OUT

By Brian Freitas

Narrative and Numbers | Housing Finance – PSUs | FY24

By Pranav Bhavsar

NIFTY50 Index Rebalance: Trent, BEL to Replace Divi’s Lab, LTIMindtree

By Brian Freitas

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Aug 25
0

Daily Brief China: China Traditional Chinese Medicine, ESR Group , Shanghai Henlius Biotech , Alibaba Group Holding , JD.com , Tencent Music and more

By | China, Daily Briefs

In today’s briefing:

  • (Mostly) Asia-Pac M&A: APM Human Services, TCM, Alps Logistics, Fancl, Jeisys Medical, PropertyGuru
  • ESR Group (1821 HK): A Rumoured Offer Price Surfaces
  • Henlius (2696 HK): Share Alternative Facilitates the Vote
  • China Healthcare Weekly (Aug.25)- China TCM 24H1 Profit Warning, Financing Activities, Giant Biogene
  • Alibaba Group: A Blend of Growth
  • JD.com Inc.: Enhancing Platform Ecosystem For Third-Party Sellers As A Key Growth Catalyst! – Major Drivers
  • Tencent Music Entertainment Group: Innovation In Subscription & User Experience & Other Major Drivers

(Mostly) Asia-Pac M&A: APM Human Services, TCM, Alps Logistics, Fancl, Jeisys Medical, PropertyGuru

By David Blennerhassett

ESR Group (1821 HK): A Rumoured Offer Price Surfaces

By Arun George

  • A media outlet that Reports on Deals reported that the consortium will offer HK$14.50 per share, a 22.1% and 61.8% premium to the last close (HK$11.88) and undisturbed price (HK$8.96).
  • While not a knockout offer, the consortium’s impending binding proposal suggests confidence that the offer price and structure would gain the support of the substantial shareholders. 
  • The downside to a deal break is low as ESR’s valuation is undemanding. Its forward EV/EBITDA multiple is at a 30% discount to the median peers’ multiple.

Henlius (2696 HK): Share Alternative Facilitates the Vote

By Arun George

  • Shanghai Fosun Pharmaceutical (Group) (2196 HK) announced the Shanghai Henlius Biotech (2696 HK) share alternative offer, subject to proration due to a cap of 8% of outstanding shares. 
  • The share alternative offer was necessary to facilitate the vote as the HK$24.60 offer is half the HK$49.60 IPO price. 
  • The co-founders, HenLink and LVC, will likely tender some or all their shares for scrip. At the last close and for the December-end payment, the gross/annualised spread is 7.4%/17.9%.

China Healthcare Weekly (Aug.25)- China TCM 24H1 Profit Warning, Financing Activities, Giant Biogene

By Xinyao (Criss) Wang

  • China Traditional Chinese Medicine (570 HK)‘s profit warning suggests weaker-than-expected 2024H1 results, but the interim report is needed for clarity. This is unlikely to negatively affect the company’s privatization plans.
  • In 24H1, healthcare investment and financing activities have slowed, and it will take time for investors’ confidence in the sector to recover.
  • Giant Biogene (2367 HK)‘s 24H1 results exceeded expectations, leading management to raise its 2024 guidance. However, the profit margin declined, and we remain cautious about long-term growth prospects.

Alibaba Group: A Blend of Growth

By Baptista Research

  • Alibaba Group’s June Quarter 2024 financial report showcases a blend of growth, challenges, and strategic advancements.
  • The group reported steady growth in its core e-commerce businesses, Taobao and Tmall Group, with an increase in Gross Merchandise Volume (GMV) and order volumes.
  • Particularly, the company’s focus on enhancing user experience and AI-driven strategies appears to be bearing fruit, assuring an upward trajectory in retaining and attracting customers, which is crucial in a competitive e-commerce landscape.

JD.com Inc.: Enhancing Platform Ecosystem For Third-Party Sellers As A Key Growth Catalyst! – Major Drivers

By Baptista Research

  • JD.com reported its second quarter and interim 2024 earnings, presenting a mixed performance amid challenging market conditions.
  • The company achieved record non-GAAP net profit for a single quarter, indicating strong profitability and effective cost management.
  • However, revenue growth was modest, reflecting the competitive and dynamic nature of the market JD.com operates in.

Tencent Music Entertainment Group: Innovation In Subscription & User Experience & Other Major Drivers

By Baptista Research

  • Tencent Music Entertainment (TME) demonstrated a strong performance in the second quarter of 2024, anchored by significant growth in its online music services and a robust increase in adjusted net profit.
  • The company reported a 28% year-over-year growth in online music services and a 26% increase in adjusted net profit, signaling robust operational health and profitability.
  • The addition of over 10 million music subscribers in the first half of 2024, combined with an increase in average revenue per paying user (ARPPU), underscores the company’s effective market penetration and pricing strategy.

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Aug 25
0

Daily Brief Japan: Seven & I Holdings, Yamaha Motor and more

By | Daily Briefs, Japan

In today’s briefing:

  • Weekly Deals Digest (25 Aug) – Seven & I, Iriso, Fancl, Alps Logistics, China TCM, Henlius, GA Pack
  • Last Week in Event SPACE: Seven & I Holdings, Webjet, Hanwha Group, Swire Pac/Props, EOFlow
  • Yamaha Motors Placement – A Relatively Small Cross-Shareholding Unwind

Weekly Deals Digest (25 Aug) – Seven & I, Iriso, Fancl, Alps Logistics, China TCM, Henlius, GA Pack

By Arun George

Last Week in Event SPACE: Seven & I Holdings, Webjet, Hanwha Group, Swire Pac/Props, EOFlow

By David Blennerhassett

  • Alimentation Couche-Tard has returned to the well with a NBIO for 7&I (3382 JP). This’ll be anathema to politicians who view 7&i as a local champion AND a lifeline entity.
  • Global travel outfit Webjet Ltd (WEB AU) has announced the separation of its two key divisions. The sum of the part is greater than the whole? I’ll take that bet.
  • The Kim family turn their focus to Hanwha Galleria (452260 KS) in the latest Partial Offer within the Hanwha Group complex. 

Yamaha Motors Placement – A Relatively Small Cross-Shareholding Unwind

By Sumeet Singh

  • A group of shareholders aims to raise around US$330m via selling around 3.6% of Yamaha Motor (7272 JP).
  • This will be another cross-shareholding unwind and hence, won’t be a huge surprise, although the stock hasn’t been doing particularly well lately.
  • In this note, we will talk about the deal dynamics and run the deal through our ECM framework.

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Aug 25
0

Daily Brief Industrials: Deere & Co and more

By | Daily Briefs, Industrials

In today’s briefing:

  • Deere & Company: These Are The 4 Biggest Challenges In Its Path! – Major Drivers

Deere & Company: These Are The 4 Biggest Challenges In Its Path! – Major Drivers

By Baptista Research

  • Deere & Company reported its third-quarter earnings, revealing a mixed financial performance amid varied market conditions across its segments.
  • Despite a tough macroeconomic environment, the company maintained a disciplined approach, particularly in managing inventory and costs, which was evident from an equipment operations margin of 18.5%.
  • However, the reduced demand in both agricultural and construction sectors, coupled with price competition, led to a decline in net sales and revenues by 20% and 17% respectively, totaling $11.387 billion and $13.152 billion.

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Aug 25
0

Daily Brief Industrials: Deere & Co and more

By | Daily Briefs, Industrials

In today’s briefing:

  • Deere & Company: These Are The 4 Biggest Challenges In Its Path! – Major Drivers

Deere & Company: These Are The 4 Biggest Challenges In Its Path! – Major Drivers

By Baptista Research

  • Deere & Company reported its third-quarter earnings, revealing a mixed financial performance amid varied market conditions across its segments.
  • Despite a tough macroeconomic environment, the company maintained a disciplined approach, particularly in managing inventory and costs, which was evident from an equipment operations margin of 18.5%.
  • However, the reduced demand in both agricultural and construction sectors, coupled with price competition, led to a decline in net sales and revenues by 20% and 17% respectively, totaling $11.387 billion and $13.152 billion.

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