Smartkarma Daily Briefs

As the Hong Kong bourse languishes, recent Hong Kong privatisation include mainland Chinese firms such as Vinda International (3331 HK) and China Traditional Chinese Medicine (570 HK) .
Reportedly (Reuters) Li Ning (2331 HK) is now in the crosshairs. Shares are up 7.8% as I type.
Olympic champion Li Ning holds ~10.5% in his self-named company, which was recently in the news after acquiring a HK$2.2bn commercial building from Henderson Land (12 HK) as its headquarters.

Li Ning (2331 HK): Evaluating a Potential Privatisation

By Arun George

Reuters reported that due to the steep share price declines, Mr Li Ning is considering leading a consortium to privatise Li Ning (2331 HK).
The shares have been weighed down by concerns about channel inventory, steep retail discounts, and unauthorised distributor sales. To counter this, Li Ning aims to achieve RMB50bn sales by 2028.
The probability of an offer is low as funding the scheme consideration could prove challenging. Nevertheless, the downside is low as Li Ning trades at an undemanding valuation.

Li Ning (2331 HK): Update On The Name Given Potential Privatization News

By Steve Zhou, CFA

According to public news today afternoon during trading hours, the founder and biggest shareholder of Li Ning (2331 HK), Mr. Li Ning, is mulling privatizing the public company.
Mr. Li Ning has shown the opposite intention over the last few years, with several major sell-down of stake.
The company is trading at 16x 2024 PE, with visibility being quite low.

BYD (1211 HK) 2023 Earnings Preview: Strong Top Line and Bottom Line

By Ming Lu

We believe revenue will grow by 44% in 2023 according to the sales volume and the price trend.
We believe net profit will increase by 100%, higher than the company’s estimate.
We conclude an upside of 54% and a price target of HK$304. Buy.

Quiddity Leaderboard SSE50/180 Jun 24: Some New Trade Ideas

By Janaghan Jeyakumar, CFA

SSE 50 and SSE 180, respectively, aim to represent the performance of the 50 and 180 largest and most liquid A-share stocks listed on the Shanghai Stock Exchange.
In this insight, we take a look at our expectations for potential index changes for SSE 50 and SSE 180 during the June 2024 index rebal event.
I continue to expect 5 changes for SSE 50 and 18 changes for SSE 180 but some names have changed since my last insight.

Analyzing the Roles Parent JD.com & Subsidiary Deppon Played in JD Logistics’ Q423 Results

By Daniel Hellberg

In Q423 JD Logistics booked 10% top-line growth & solid margin improvement
We analyze the impacts of JD.com & Deppon Logistics on JD Logistics’ Q423
Given still-low profitability, JD Logistics does not appear cheap, in our view

Shougang Fushan Resource (639 HK): FY23 Earnings, 11% Dividend Yield With ~50% of Mkt Cap in Cash

By Sameer Taneja

We preview Shougang Fushan Resources (639 HK) earnings for FY23. We expect revenue /profit growth of -15%/12% YoY with H2FY23 revenue/profit -1.7%/2.3% YoY due to lower coking coal prices.
We expect the company to pay an FY23 dividend of 36 HKD cents, implying an 11.3% yield. At the current spot price, the implied yield is 11.3%.
The company’s balance sheet is rich in cash, with more than a billion USD (~50% of market capitalization). However, we are skeptical that the company will pay big special dividends.

Pre-IPO PegBio Co., Ltd. – This GLP-1 Biotech Has Gloomy Outlook

By Xinyao (Criss) Wang

PB-119 (T2DM) has the fastest R&D progress, but this is a highly competitive market.China’s diabetes drug market is dominated by traditional drugs. It’s not easy for PegBio to break through.
Since the future competitive landscape of GLP-1s (obesity) would present a very different situation.If PB-119 fails to have better weight loss effect, it would be eliminated due to fierce competition.
PegBio’s IPO on SSE STAR Market was rejected. We’re not optimistic about its future commercialization performance. Together with cash-flow issues, we doubt whether PegBio would bring expected returns to investors.

Morning Views Asia: China South City, Greenko Energy Holdings, Road King Infrastructure

By Leonard Law, CFA

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

China South City
Greenko Energy Holdings
Road King Infrastructure

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Mar 13

Daily Brief India: ITC Ltd, Adani Transmission and more

By Smartkarma Daily Briefs | Daily Briefs, India

In today’s briefing:

ITC $2bn Placement – Very Well Flagged but Still Won’t Be an Easy One to Digest, Won’t Do an Indigo
Morning Views Asia: China South City, Greenko Energy Holdings, Road King Infrastructure

ITC $2bn Placement – Very Well Flagged but Still Won’t Be an Easy One to Digest, Won’t Do an Indigo

In Feb 2024, BAT’s management stated that they were reviewing their stake in ITC Ltd (ITC IN). The news of a possible selldown by BAT was leaked again earlier today.
BAT has owned its stake in ITC for over a century and remains its largest shareholder.
In this note, we talk about the deal dynamics and run the deal through our ECM framework.

Morning Views Asia: China South City, Greenko Energy Holdings, Road King Infrastructure

By Leonard Law, CFA

China South City
Greenko Energy Holdings
Road King Infrastructure

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Mar 13

Daily Brief Japan: Keisei Electric Railway Co, ASICS Corp, Takashimaya, Eiken Chemical, Round One Corp, MS&AD Insurance, Stream Media , Gakken Holdings, Tenpo Innovation and more

By Smartkarma Daily Briefs | Daily Briefs, Japan

In today’s briefing:

Keisei Electric (9009) Share Buyback – Interesting Dynamics & Opportunity
Asics (7936) | Pumping the Brakes
Takashimaya (8233): Q3 FY02/24 Update
Eiken Chemical (4549) | Activists, Alchemy, and the Pursuit of Profit
StubWorld: Keisei’s ToSTNeT-3 Buyback. Stay Bearish
Round One (4680): Q3 FY03/24 Update
MS&AD Cross-Shareholding – At Least US$20bn of Cross-Shareholding to Sell
Stream Media Corporation (4772): Full-Year FY12/23 Update
GAKKEN HOLDINGS (9470): Q1 FY09/24 Update
Tenpo Innovation (3484): Q3 FY03/24 Update

Keisei Electric (9009) Share Buyback – Interesting Dynamics & Opportunity

In late February, Keisei Electric Railway Co (9009 JP) announced a 5.0mm share (2.96%) ¥33bn buyback, to be executed in the following 3 months. That meant likely ToSTNeT-3.
I thought that mildly bullish. Shares rose 0.05% the next day. Then we got an OLC offering announcement. I thought that bearish. The stock popped early but fell hard.
Today the announcement. It IS a ToSTNeT-3. tomorrow. At ¥6,320/share. But it is an Accelerated Share Repurchase. Which changes things. Or it doesn’t. But it bears watching closely, maybe acting.

Asics (7936) | Pumping the Brakes

By Mark Chadwick

On’s quarterly results disappoint, triggering a 10% stock drop. Meanwhile, ASICS’ share price is up 43% YTD despite modest performance.
ASICS shareholders advised to consider profit-taking as stock outpaces fundamentals, faces competition from resurging Nike and fast-growing On
On’s ambitious growth projections threaten ASICS’ market position, with potential market share parity within three years

Takashimaya (8233): Q3 FY02/24 Update

Takashimaya (8233 JP) was founded in 1831 and is the operator of one of the leading department store companies in Japan.
Takashimaya began applying the Accounting Standard for Revenue Recognition from the beginning of FY02/23.
Takashimaya Co., Ltd. announced revisions to its full-year earnings forecasts for FY02/24.

Eiken Chemical (4549) | Activists, Alchemy, and the Pursuit of Profit

By Mark Chadwick

Two activist investors are now on the shareholder registry of Eiken Chemical.
Eiken has proactively announced a share buyback to return excess cash holdings.
Eiken has a quality underlying business which generates solid FCF yield. Expect higher shareholder returns in the future.

StubWorld: Keisei’s ToSTNeT-3 Buyback. Stay Bearish

Keisei Electric Railway Co (9009 JP)‘s previously announced buyback is now confirmed to be a ToSTNeT-3 buyback. But also an accelerated share repurchase.
Preceding my comments on Keisei Electric are the current setup/unwind tables for Asia-Pacific Holdcos.
These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation >20%.

Round One (4680): Q3 FY03/24 Update

Round One Corp (4680 JP) specializes in running amusement complex facilities in Japan, the US, and China.
FY03/23 results: The company reported sales of JPY142.1bn, operating profit of JPY16.9bn, recurring profit of JPY16.7bn, and net income attributable to owners of the parent of JPY9.7bn.
In November 2023, the company revised its full-year FY03/24 earnings forecast.

MS&AD Cross-Shareholding – At Least US$20bn of Cross-Shareholding to Sell

The Japanese Financial Services Agency has asked the general insurers to reduce/eliminate their cross-shareholdings.
MS&AD Insurance (8725 JP) had a stake over US$100m in at least 29 listed Japanese stocks, amounting to a total of US$17.4bn.
In this note, we take a look at its stakes in various companies to see which ones could possibly be candidates for further selldowns.

Stream Media Corporation (4772): Full-Year FY12/23 Update

Stream Media Corporation (TSE Growth: 4772; hereafter, “SMC”) is an entertainment company that handles Korean pop culture content, primarily in Japan.
In full-year FY12/23, SMC reported consolidated revenue of JPY8.9bn, an operating profit of JPY182mn, a recurring profit of JPY191mn.
SMC forecasts full-year FY12/24 revenue of JPY9.1bn, operating profit of JPY91mn, recurring profit of JPY94mn, and a net income attributable to owners of the parent of JP61mn.

GAKKEN HOLDINGS (9470): Q1 FY09/24 Update

Gakken Holdings (9470 JP) engages in the educational and healthcare and nursing businesses, providing services for demographics ranging from toddlers to the elderly.
For FY09/23, revenue was JPY164.1bn, operating profit was JPY6.2bn, recurring profit was JPY6.5bn, and net income attributable to owners of the parent was JPY3.2bn.
The company will fundamentally reshuffle its portfolio and concentrate resources on priority areas while rebuilding its education business, and optimize the management structure for each business field to restore profitability.

Tenpo Innovation (3484): Q3 FY03/24 Update

By Research as a Service (RaaS)

Tenpo Innovation (3484 JP) is a real estate company specializing in restaurant properties.
FY03/23 results: In its first year of reporting consolidated results, Tenpo Innovation reported full-year revenue of JPY13.1bn, operating profit of JPY1.2bn, recurring profit of JPY1.3bn, and net income of JPY886mn.
Tenpo Innovation Inc. announced plans to start preparations for a transition to a holding company structure through a company split and changes to its trade name.

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Mar 13

Daily Brief Energy/Materials: Alumina Ltd, Shougang Fushan Resources, Gevo, Granite Ridge Resources , Metarock, Nanoco Group PLC and more

By Smartkarma Daily Briefs | Daily Briefs, Energy & Materials Sector

In today’s briefing:

Alumina (AWC AU): Alcoa’s Binding Proposal Aided by Alcoa’s Re-Rating
Shougang Fushan Resource (639 HK): FY23 Earnings, 11% Dividend Yield With ~50% of Mkt Cap in Cash
Gevo, Inc. – 4Q23 Results: Primed and Ready for 2024
Granite Ridge Resources, Inc. – Estimate Update; Upcoming Fireside Chat
Metarock Group Limited – Turnaround ongoing and outlook encouraging
Nanoco Group – Mechanisms for shareholder returns confirmed

Alumina (AWC AU): Alcoa’s Binding Proposal Aided by Alcoa’s Re-Rating

By Arun George

Alumina Ltd (AWC AU) has entered a scheme implementation deed with Alcoa (AA US) at 0.02854 Alcoa shares per Alumina share. The scheme meeting is targeted for 3Q.
While the offer is not a knockout bid, the 15% increase in Alcoa shares lowers the headcount risk from retail opposition and lowers the bump potential.
Regulatory approvals are a formality, and Citic Resources Holdings (1205 HK) lack of support reflects HKEx listing requirements. At the last close, the gross spread was 3.4%.

Shougang Fushan Resource (639 HK): FY23 Earnings, 11% Dividend Yield With ~50% of Mkt Cap in Cash

By Sameer Taneja

We preview Shougang Fushan Resources (639 HK) earnings for FY23. We expect revenue /profit growth of -15%/12% YoY with H2FY23 revenue/profit -1.7%/2.3% YoY due to lower coking coal prices.
We expect the company to pay an FY23 dividend of 36 HKD cents, implying an 11.3% yield. At the current spot price, the implied yield is 11.3%.
The company’s balance sheet is rich in cash, with more than a billion USD (~50% of market capitalization). However, we are skeptical that the company will pay big special dividends.

Gevo, Inc. – 4Q23 Results: Primed and Ready for 2024

By Water Tower Research

GEVO sold 90,666 MMBtu of RNG in 4Q23, up from 81,271 MMBtu in the previous quarter, which translates to 91% of capacity on an annualized basis, while generating standalone cash EBITDA of $1.3 million, down from $1.7 million in 3Q23.
The RNG division is expected to achieve $12-16 million in cash EBITDA once the company receives the CARB CI score in 2024.
This is further expected to increase to $30-38 million if California Low Carbon Fuel Standard (LCFS) prices recover to $200 per metric ton.

Granite Ridge Resources, Inc. – Estimate Update; Upcoming Fireside Chat

By Water Tower Research

During 2023, Granite Ridge executed its portfolio management strategy to grow the asset base and enhance its organic development growth opportunities.
FY23 production increased 23% Y/Y, far ahead of management’s initial expectations.
4Q23 production averaged 26,036 BOE/d, including 12,283 b/d of oil.

Metarock Group Limited – Turnaround ongoing and outlook encouraging

Metarock Group Ltd (ASX:MYE) is a specialist underground mining contractor across both metallurgical coal and metalliferous hard rock mining, working with most tier-1 operators in the respective spaces.
Following a difficult 18 months dealing with legacy contracts that required an equity injection, asset sales and ATO payment plan, MYE appears to be coming out the other side, posting an adjusted $49.1m EBITDA over the 12 months to December 31, and reducing net debt to $62.8m which includes $30m of invoice financing.
Applying H1 FY24 annualised depreciation and interest charges we calculate EBITA of $22.8m for the last 12 months, implying CY23 EV/EBITA of ~4.9x.

Nanoco Group – Mechanisms for shareholder returns confirmed

By Edison Investment Research

Following receipt of the £58.8m second tranche from the Samsung litigation on 24 January, Nanoco plans to return £30m to shareholders via a tender offer (c 38.5% of outstanding shares), alongside a £3m share buyback. After completing this £33m return and repaying c £5m outstanding debt, Nanoco expects to have c £23m cash to accelerate commercial production of nanomaterials at scale. With its validated technology, robust pipeline and strong financial position, we believe the group is positioned to drive long-term shareholder value creation. With Nanoco only valued marginally higher than the second tranche proceeds, we believe the market is undervaluing the group’s several commercial opportunities and intellectual property (IP) despite recent progress.

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Mar 13

Daily Brief Utilities: Adani Transmission and more

By Smartkarma Daily Briefs | Daily Briefs, Utilities Sector

In today’s briefing:

Morning Views Asia: China South City, Greenko Energy Holdings, Road King Infrastructure

Morning Views Asia: China South City, Greenko Energy Holdings, Road King Infrastructure

By Leonard Law, CFA

China South City
Greenko Energy Holdings
Road King Infrastructure

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Mar 13

Daily Brief Industrials: Keisei Electric Railway Co, Kcc Corp, JD Logistics , Jetblue Airways, Nagase & Co Ltd and more

By Smartkarma Daily Briefs | Daily Briefs, Industrials

In today’s briefing:

Keisei Electric (9009) Share Buyback – Interesting Dynamics & Opportunity
KCC Corp: Taking a Closer Step to Separating the Ownership Structures of the KCC Group
StubWorld: Keisei’s ToSTNeT-3 Buyback. Stay Bearish
Analyzing the Roles Parent JD.com & Subsidiary Deppon Played in JD Logistics’ Q423 Results
JetBlue – Positive 1Q Momentum Inspires Confidence 2024 Can Beat Expectations
Nagase (8012): Q3 FY03/24 Update

Keisei Electric (9009) Share Buyback – Interesting Dynamics & Opportunity

In late February, Keisei Electric Railway Co (9009 JP) announced a 5.0mm share (2.96%) ¥33bn buyback, to be executed in the following 3 months. That meant likely ToSTNeT-3.
I thought that mildly bullish. Shares rose 0.05% the next day. Then we got an OLC offering announcement. I thought that bearish. The stock popped early but fell hard.
Today the announcement. It IS a ToSTNeT-3. tomorrow. At ¥6,320/share. But it is an Accelerated Share Repurchase. Which changes things. Or it doesn’t. But it bears watching closely, maybe acting.

KCC Corp: Taking a Closer Step to Separating the Ownership Structures of the KCC Group

By Douglas Kim

There is an increasing probability that KCC Corp is closer to separating the ownership structures of the three Chung brothers regarding the various KCC Group related companies.
KCC’s 9.17% stake in Samsung C&T is worth 2.8 trillion won. KCC’s stake in Samsung C&T is worth 117% of KCC’s own market cap.
According to our valuation analysis, it suggests NAV of 355,925 won per share, representing a 30% upside from current levels.

StubWorld: Keisei’s ToSTNeT-3 Buyback. Stay Bearish

Keisei Electric Railway Co (9009 JP)‘s previously announced buyback is now confirmed to be a ToSTNeT-3 buyback. But also an accelerated share repurchase.
Preceding my comments on Keisei Electric are the current setup/unwind tables for Asia-Pacific Holdcos.
These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation >20%.

Analyzing the Roles Parent JD.com & Subsidiary Deppon Played in JD Logistics’ Q423 Results

By Daniel Hellberg

In Q423 JD Logistics booked 10% top-line growth & solid margin improvement
We analyze the impacts of JD.com & Deppon Logistics on JD Logistics’ Q423
Given still-low profitability, JD Logistics does not appear cheap, in our view

JetBlue – Positive 1Q Momentum Inspires Confidence 2024 Can Beat Expectations

By Neil Glynn

1Q24 upgrade from JetBlue increases our confidence that consensus is too low for 2024.
Investor Day on 30 May will provide the next leg of revenue self-help initiatives.
We model a minor net profit of $22m in 2025, versus consensus expectations for further losses, and the next 3 months are crucial for the carrier’s long-term prospects.

Nagase (8012): Q3 FY03/24 Update

Nagase & Co Ltd (8012 JP) is a trading company that specializes in chemicals.
FY03/23 results: Nagase reported full-year consolidated sales of JPY912.9bn, gross profit of JPY155.4bn, operating profit of JPY33.4bn, recurring profit of JPY32.5bn.
Nagase’s medium-term business plan, ACE 2.0, announced in May 2021, set key goal indicators for FY03/26 of consolidated operating profit of JPY35.0bn or above and ROE of 8.0% or above.

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Mar 13

Most Read: Keisei Electric Railway Co, Li Ning, ITC Ltd, CIMC Vehicle Group Co Ltd, Alumina Ltd, Ola Electric, Kcc Corp, Jusung Engineering and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

Keisei Electric (9009) Share Buyback – Interesting Dynamics & Opportunity
Li Ning (2331 HK): Value Trap Play?
ITC $2bn Placement – Very Well Flagged but Still Won’t Be an Easy One to Digest, Won’t Do an Indigo
CIMC (1839 HK): Firm Offer. With A Bump!
Li Ning (2331 HK): Evaluating a Potential Privatisation
Li Ning (2331 HK): Update On The Name Given Potential Privatization News
Alumina/Alcoa: Binding Agreement On The Same Terms
Ola Electric Pre-IPO – Initial Thoughts on Valuation
KCC Corp: Taking a Closer Step to Separating the Ownership Structures of the KCC Group
KRX’s Official SSF/SSO Reshuffle Results: Trading Considerations

Keisei Electric (9009) Share Buyback – Interesting Dynamics & Opportunity

In late February, Keisei Electric Railway Co (9009 JP) announced a 5.0mm share (2.96%) ¥33bn buyback, to be executed in the following 3 months. That meant likely ToSTNeT-3.
I thought that mildly bullish. Shares rose 0.05% the next day. Then we got an OLC offering announcement. I thought that bearish. The stock popped early but fell hard.
Today the announcement. It IS a ToSTNeT-3. tomorrow. At ¥6,320/share. But it is an Accelerated Share Repurchase. Which changes things. Or it doesn’t. But it bears watching closely, maybe acting.

Li Ning (2331 HK): Value Trap Play?

As the Hong Kong bourse languishes, recent Hong Kong privatisation include mainland Chinese firms such as Vinda International (3331 HK) and China Traditional Chinese Medicine (570 HK) .
Reportedly (Reuters) Li Ning (2331 HK) is now in the crosshairs. Shares are up 7.8% as I type.
Olympic champion Li Ning holds ~10.5% in his self-named company, which was recently in the news after acquiring a HK$2.2bn commercial building from Henderson Land (12 HK) as its headquarters.

ITC $2bn Placement – Very Well Flagged but Still Won’t Be an Easy One to Digest, Won’t Do an Indigo

In Feb 2024, BAT’s management stated that they were reviewing their stake in ITC Ltd (ITC IN). The news of a possible selldown by BAT was leaked again earlier today.
BAT has owned its stake in ITC for over a century and remains its largest shareholder.
In this note, we talk about the deal dynamics and run the deal through our ECM framework.

CIMC (1839 HK): Firm Offer. With A Bump!

Back on the 28 November 2023, SOE-backed CIMC Vehicle Group Co Ltd (1839 HK) announced a conditional H-share buyback at a $7.00/H-share, a paltry 8.6% premium to last close.
This Scheme-like Offer, with a tendering condition, secured SAFE approval late January. But last month CIMC announced a CBP investigation into the evasion of U.S. anti-dumping and countervailing duties.
Now CIMC has announced a firm Offer at HK$7.50/share. Terms are final. The majority of independent H-shareholders are supportive. This looks done. Possible completion late-May, early-June.

Li Ning (2331 HK): Evaluating a Potential Privatisation

By Arun George

Reuters reported that due to the steep share price declines, Mr Li Ning is considering leading a consortium to privatise Li Ning (2331 HK).
The shares have been weighed down by concerns about channel inventory, steep retail discounts, and unauthorised distributor sales. To counter this, Li Ning aims to achieve RMB50bn sales by 2028.
The probability of an offer is low as funding the scheme consideration could prove challenging. Nevertheless, the downside is low as Li Ning trades at an undemanding valuation.

Li Ning (2331 HK): Update On The Name Given Potential Privatization News

By Steve Zhou, CFA

According to public news today afternoon during trading hours, the founder and biggest shareholder of Li Ning (2331 HK), Mr. Li Ning, is mulling privatizing the public company.
Mr. Li Ning has shown the opposite intention over the last few years, with several major sell-down of stake.
The company is trading at 16x 2024 PE, with visibility being quite low.

Alumina/Alcoa: Binding Agreement On The Same Terms

On the 26 February, via an NBIO, Alcoa (AA US) offered 0.02854 of its own shares for each Alumina Ltd (AWC AU) share, a 13% premium to last close.
Alcoa/Alumina control 60%/40% of the AWAC JV, an owner and operator of global bauxite mines and alumina refineries. Both companies have now entered into a Scheme on the same terms.
Alcoa holds 19.9% in AWC after reaching an agreement with Allan Gray Australia. The key risks to the deal are FIRB approval and how CITIC, holding 18.9%, will respond.

Ola Electric Pre-IPO – Initial Thoughts on Valuation

Ola Electric is looking to raise about US$1bn in its upcoming India IPO.
Ola Electric Mobility is a vertically integrated pure EV player in India with manufacturing capabilities for EVs and EV components, including cells.
In our previous note we looked at the company’s past performance and undertook a peer comparison. In this note, we will talk about valuations.

KCC Corp: Taking a Closer Step to Separating the Ownership Structures of the KCC Group

By Douglas Kim

There is an increasing probability that KCC Corp is closer to separating the ownership structures of the three Chung brothers regarding the various KCC Group related companies.
KCC’s 9.17% stake in Samsung C&T is worth 2.8 trillion won. KCC’s stake in Samsung C&T is worth 117% of KCC’s own market cap.
According to our valuation analysis, it suggests NAV of 355,925 won per share, representing a 30% upside from current levels.

KRX’s Official SSF/SSO Reshuffle Results: Trading Considerations

By Sanghyun Park

The reshuffle results align with expectations, but the decision to list 11 KOSDAQ Global stocks in April is surprising. Local authorities seem to prioritize boosting the derivatives market for liquidity.
Ecopro Materials’ SSF listing, earlier than expected, attracts attention, potentially leading to an unusual basis pattern, coinciding with a major lockup release on May 17th.
We should also be wary of a pattern akin to last July’s in KOSDAQ stocks. Spot prices of recent SSFs showed a pronounced short-term uptrend, especially in KOSDAQ, versus KOSPI.

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Mar 13

Daily Brief Industrials: Keisei Electric Railway Co, Kcc Corp, JD Logistics , Jetblue Airways, Nagase & Co Ltd and more

By Smartkarma Daily Briefs | Daily Briefs, Industrials

In today’s briefing:

Keisei Electric (9009) Share Buyback – Interesting Dynamics & Opportunity
KCC Corp: Taking a Closer Step to Separating the Ownership Structures of the KCC Group
StubWorld: Keisei’s ToSTNeT-3 Buyback. Stay Bearish
Analyzing the Roles Parent JD.com & Subsidiary Deppon Played in JD Logistics’ Q423 Results
JetBlue – Positive 1Q Momentum Inspires Confidence 2024 Can Beat Expectations
Nagase (8012): Q3 FY03/24 Update

Keisei Electric (9009) Share Buyback – Interesting Dynamics & Opportunity

In late February, Keisei Electric Railway Co (9009 JP) announced a 5.0mm share (2.96%) ¥33bn buyback, to be executed in the following 3 months. That meant likely ToSTNeT-3.
I thought that mildly bullish. Shares rose 0.05% the next day. Then we got an OLC offering announcement. I thought that bearish. The stock popped early but fell hard.
Today the announcement. It IS a ToSTNeT-3. tomorrow. At ¥6,320/share. But it is an Accelerated Share Repurchase. Which changes things. Or it doesn’t. But it bears watching closely, maybe acting.

KCC Corp: Taking a Closer Step to Separating the Ownership Structures of the KCC Group

By Douglas Kim

There is an increasing probability that KCC Corp is closer to separating the ownership structures of the three Chung brothers regarding the various KCC Group related companies.
KCC’s 9.17% stake in Samsung C&T is worth 2.8 trillion won. KCC’s stake in Samsung C&T is worth 117% of KCC’s own market cap.
According to our valuation analysis, it suggests NAV of 355,925 won per share, representing a 30% upside from current levels.

StubWorld: Keisei’s ToSTNeT-3 Buyback. Stay Bearish

Keisei Electric Railway Co (9009 JP)‘s previously announced buyback is now confirmed to be a ToSTNeT-3 buyback. But also an accelerated share repurchase.
Preceding my comments on Keisei Electric are the current setup/unwind tables for Asia-Pacific Holdcos.
These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation >20%.

Analyzing the Roles Parent JD.com & Subsidiary Deppon Played in JD Logistics’ Q423 Results

By Daniel Hellberg

In Q423 JD Logistics booked 10% top-line growth & solid margin improvement
We analyze the impacts of JD.com & Deppon Logistics on JD Logistics’ Q423
Given still-low profitability, JD Logistics does not appear cheap, in our view

JetBlue – Positive 1Q Momentum Inspires Confidence 2024 Can Beat Expectations

By Neil Glynn

1Q24 upgrade from JetBlue increases our confidence that consensus is too low for 2024.
Investor Day on 30 May will provide the next leg of revenue self-help initiatives.
We model a minor net profit of $22m in 2025, versus consensus expectations for further losses, and the next 3 months are crucial for the carrier’s long-term prospects.

Nagase (8012): Q3 FY03/24 Update