Smartkarma Daily Briefs

In the second quarter of 2024, Henry Schein delivered a solid financial performance, underscoring its resilience amid challenging market conditions.
The company reported robust operating cash flow and an increase in gross margin, reflecting the benefit of strategic initiatives focusing on high-growth, high-margin products and services, as well as recent acquisitions.
However, the recovery from a cyber incident last year has been progressing slower than initially anticipated, impacting sales momentum.

The Walt Disney Company: Enhanced Streaming Services Strategy

The Walt Disney Company reported its third-quarter financial results for 2024, reflecting a mixed performance across its diverse business segments.
The company reported a revenue growth of 2% during the quarter, indicating resilience in its theme parks segment despite slight moderation in demand.
Attendance at the domestic parks remained flat, with a slight increase in per capita spending, contributing to a steady revenue outlook for the fourth quarter.

Wynn Resorts: Enhanced Market Recovery in Macau & Expansion In New Markets! – Major Drivers

Wynn Resorts provided a detailed overview of its second quarter 2024 earnings, illustrating mixed financial and operational performance across its various geographies.
The company’s earnings call highlighted record earnings before interest, taxes, depreciation, amortization, and restructuring or rent costs (EBITDAR), capital expenditures, and strategic developments, particularly with Wynn Las Vegas, Boston, Macau, and ongoing projects in the UAE.
Starting with the positives, Wynn Resorts reported a record quarterly EBITDAR of $572 million, marking the company’s strongest second quarter in its history.

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Aug 18

Daily Brief Health Care: China Traditional Chinese Medicine, Oscotec Inc, Henry Schein, Novo Nordisk A/S and more

By Smartkarma Daily Briefs | Daily Briefs, Healthcare

In today’s briefing:

(Mostly) Asia-Pac M&A: TCM, BusinessOn Comm, Orora, Ramsay Health Care, Namoi Cotton, APM, CPMC
Peptron: Rights Offering of 120 Billion Won
Henry Schein Inc.: A Tale Of Expansion into Owned Brands and Portfolio Diversification! – Major Drivers
Novo Nordisk: Will Their Expansion into the Obesity Market Pay Off? – Major Drivers

(Mostly) Asia-Pac M&A: TCM, BusinessOn Comm, Orora, Ramsay Health Care, Namoi Cotton, APM, CPMC

By David Blennerhassett

I tally 46 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal
Two new deals were discussed this week: JTower (4485 JP) and BusinessOn Communication (138580 KS)‘s Tender Offers. Orora (ORA AU) approached by Lone Star. Ramsay Health Care (RHC AU) Offer also rumoured.
Key updates took place on China Traditional Chinese Medicine (570 HK), Namoi Cotton Co Operative (NAM AU), APM Human Services (APM AU), and CPMC Holdings (906 HK).

Peptron: Rights Offering of 120 Billion Won

By Douglas Kim

On 16 August, Peptron (087010 KS) announced that it decided to increase capital through a rights offering worth about 120 billion won, involving 2.64 million shares (12.8% of outstanding shares).
The expected rights offering price is 45,450 won, which is 22% lower than current price.
We are negative on Peptron’s rights offering mainly due to much lower expected rights offering price, concerns about additional rights offering next 2-3 years, and continued lack of profitability.

Henry Schein Inc.: A Tale Of Expansion into Owned Brands and Portfolio Diversification! – Major Drivers

In the second quarter of 2024, Henry Schein delivered a solid financial performance, underscoring its resilience amid challenging market conditions.
The company reported robust operating cash flow and an increase in gross margin, reflecting the benefit of strategic initiatives focusing on high-growth, high-margin products and services, as well as recent acquisitions.
However, the recovery from a cyber incident last year has been progressing slower than initially anticipated, impacting sales momentum.

Novo Nordisk: Will Their Expansion into the Obesity Market Pay Off? – Major Drivers

Novo Nordisk presented its latest earnings with a detailed overview covering various aspects from financial metrics to research and development updates, contingent on forward-looking projections that may change.
The management emphasized strong commercial performance, especially in the diabetes and obesity segments, despite challenges in the rare disease category.
Financially, Novo Nordisk reported a robust 25% sales growth, marking an industry-leading progression.

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Aug 18

Daily Brief TMT/Internet: Tencent, PropertyGuru , JTower, Aspeed Technology and more

By Smartkarma Daily Briefs | Daily Briefs, TMT/Internet

In today’s briefing:

HK Connect SOUTHBOUND Flows (To 16 Aug 2024); Big Net Buying On “Tiny” Overall Volume, ETFs Big
PropertyGuru (PGRU US): EQT’s US$6.70 Offer Is A Done Deal
Weekly Deals Digest (18 Aug) – JTower, Piolax, Fancl, China TCM, CPMC, PropertyGuru, Orora, WeRide
ASPEED’s 159% July Revenue YoY Growth Bodes Well For H224 AI Server Shipments
[Tencent (700 HK, BUY, TP HK$485) TP Change]: Revenue Acceleration and Margin Leverages to Come

HK Connect SOUTHBOUND Flows (To 16 Aug 2024); Big Net Buying On “Tiny” Overall Volume, ETFs Big

SOUTHBOUND was again a net buyer, for HK$16.6bn this week (now 28wks in a row of net buying), on VERY LOW two-way volumes.
Gross volumes were very low. Net volumes were decent. There were three ETFs in the top 5 SOUTHBOUND net buys this past week suggesting position unwinding.
Top net buys other than the ETFs were China Mobile and Tencent (now 14 out of 15 days seeing net SOUTHBOUND buying)

PropertyGuru (PGRU US): EQT’s US$6.70 Offer Is A Done Deal

By Arun George

PropertyGuru (PGRU US) entered into a definitive merger agreement with EQT (EQT SS) at US$6.70 per share, a 51.9% premium to the undisturbed price of US$4.41 (21 May).
The shareholder vote is done (two-thirds voting threshold) due to TPG Inc (TPG US)/KKR & Co (KKR US)’s support and drag-along rights relating to REA Group Ltd (REA AU)’s shares.
This is a clean deal as there is no dissenting condition or requirement for country antitrust approvals. At the last close and for end-of-year payment, the gross/annualised spread is 2.3%/6.4%.

Weekly Deals Digest (18 Aug) – JTower, Piolax, Fancl, China TCM, CPMC, PropertyGuru, Orora, WeRide

By Arun George

A weekly summary of key developments across ECM and Event-Driven names tracked by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Thailand, Korea, India and Chinese ADRs.
ECM developments: WeRide (WRD US) aims to raise up to US$119 million through a Nasdaq IPO and US$321 million through a concurrent private placement.
Event-Driven developments:China Traditional Chinese Medicine (570 HK), CPMC Holdings (906 HK), JTower (4485 JP), Piolax Inc (5988 JP), Fancl Corp (4921 JP), PropertyGuru (PGRU US).

ASPEED’s 159% July Revenue YoY Growth Bodes Well For H224 AI Server Shipments

By William Keating

ASPEED’s July revenue amounted to NTD 601 million, up 159% YoY
ASPEED’s YTD revenue of NTD 2,970 million, is up 88% YoY
This bodes well for H224 server shipments, both general purpose and AI accelerated and should be reflected in NVIDIA’s earnings/outlook scheduled for August 28

[Tencent (700 HK, BUY, TP HK$485) TP Change]: Revenue Acceleration and Margin Leverages to Come

By Ying Pan

Tencent reported C2Q24 revenue, IFRS operating profit, and IFRS net income in-line, in-line, 10% vs. our estimates and in-line, in-line, 19% vs. consensus;
Weak fintech revenue, due to weak consumption, dragged down overall growth. But we see structural revenue acceleration and margin leverages in advertising, game and AI;
We raise TP to HK$485 and keep Tencent as our TOP PICK.

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Aug 18

Most Read: Midea Group Co Ltd A, Sun Corp, China Traditional Chinese Medicine, Ola Electric, Tencent, Kweichow Moutai, PropertyGuru , J&T Global Express , Doosan Bobcat Inc and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

TCM (570 HK): A Spoonful Of Sugar …
Midea Group (000333 CH): Index Implications at US$3bn Issue Size
Sun Corp (6736) – The Future Is Bright
(Mostly) Asia-Pac M&A: TCM, BusinessOn Comm, Orora, Ramsay Health Care, Namoi Cotton, APM, CPMC
Ola Electric (OLAELEC): EV Maker Receives Turbo Boost from Lock-Up Expiries for Index Inclusion
HK Connect SOUTHBOUND Flows (To 16 Aug 2024); Big Net Buying On “Tiny” Overall Volume, ETFs Big
Mainland Connect NORTHBOUND Flows (To 16 Aug 2024): Banks Bought, Industry & Materials Sold
PropertyGuru (PGRU US): EQT’s US$6.70 Offer Is A Done Deal
HSCEI Index Rebalance: Three In-Line Changes, Two Big Surprises
Thoughts on Capturing the 7% Doosan Swap Spread

TCM (570 HK): A Spoonful Of Sugar …

By David Blennerhassett

A 14.8% gain month-to-date, including this past Monday’s 6.5% pop – you just knew something positive was taking place behind closed doors. And leaking its way into the public.
So it was no real surprise to read in the latest monthly update announcement on the HKEx that various regulatory approvals are almost, but not quite, satisfied.
The wording in the announcement strikes a positive tone. Even remaining conservative on the timeline, this could be wrapped up before year-end.

Midea Group (000333 CH): Index Implications at US$3bn Issue Size

By Brian Freitas

Midea Group Co Ltd A (000333 CH) has got approval to list on the HKEX (388 HK) and reports are that the listing could be up to US$3bn.
That issue size is around half of the maximum that the company can issue. But it would still need cornerstone investors and a nice discount on the H-shares.
The stock will still get included in some indices even with the scaled down size, and inclusion in Southbound Stock Connect is a given.

Sun Corp (6736) – The Future Is Bright

The reason why Sun Corp (6736 JP) has traditionally traded at a large discount to its potential outcome is the possibility of inefficient or delayed value realisation.
Materially ALL of the value of the company is in its holding in Cellebrite DI (CLBT US). True Wind Capital, the SPAC sponsor of CLBT, just bought 19% of SunCorp.
They bought that for the CLBT, or the value realisation thereof. And now with the slightly surprising Tender Offer result, the chances of a better outcome are now higher.

(Mostly) Asia-Pac M&A: TCM, BusinessOn Comm, Orora, Ramsay Health Care, Namoi Cotton, APM, CPMC

By David Blennerhassett

I tally 46 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal
Two new deals were discussed this week: JTower (4485 JP) and BusinessOn Communication (138580 KS)‘s Tender Offers. Orora (ORA AU) approached by Lone Star. Ramsay Health Care (RHC AU) Offer also rumoured.
Key updates took place on China Traditional Chinese Medicine (570 HK), Namoi Cotton Co Operative (NAM AU), APM Human Services (APM AU), and CPMC Holdings (906 HK).

Ola Electric (OLAELEC): EV Maker Receives Turbo Boost from Lock-Up Expiries for Index Inclusion

By Dimitris Ioannidis

Ola Electric (OLAELEC IN) is likely to get added at the March 2025 review following the lock-up expiry in November 2024 which increases the fcap way above the fcap threshold.
Current fcap for February 2025 review is ~$1.2bn following the lock-up expiry in November 2024. Inclusion is based on whether fcap passes the prevailing fcap threshold.
The lock-up expiry in February 2025, increases the probability of addition in May 2025 review if it fails inclusion in February.

HK Connect SOUTHBOUND Flows (To 16 Aug 2024); Big Net Buying On “Tiny” Overall Volume, ETFs Big

SOUTHBOUND was again a net buyer, for HK$16.6bn this week (now 28wks in a row of net buying), on VERY LOW two-way volumes.
Gross volumes were very low. Net volumes were decent. There were three ETFs in the top 5 SOUTHBOUND net buys this past week suggesting position unwinding.
Top net buys other than the ETFs were China Mobile and Tencent (now 14 out of 15 days seeing net SOUTHBOUND buying)

Mainland Connect NORTHBOUND Flows (To 16 Aug 2024): Banks Bought, Industry & Materials Sold

The Quiddity Mainland Connect NORTHBOUND Monitor. Like the A/H Premium Monitor and HK Connect SOUTHBOUND Monitor. Lots of Flows/Position Tables and Charts with which to play.
Last week saw NORTHBOUND net SELL RMB 5.0bn of A-shares. NORTHBOUND volumes were very, very low overall.
HK large caps again outperformed Mainland large caps generally. Tech (HSTECH vs Star50 and ChiNext) saw even better HK outperformance.

PropertyGuru (PGRU US): EQT’s US$6.70 Offer Is A Done Deal

By Arun George

PropertyGuru (PGRU US) entered into a definitive merger agreement with EQT (EQT SS) at US$6.70 per share, a 51.9% premium to the undisturbed price of US$4.41 (21 May).
The shareholder vote is done (two-thirds voting threshold) due to TPG Inc (TPG US)/KKR & Co (KKR US)’s support and drag-along rights relating to REA Group Ltd (REA AU)’s shares.
This is a clean deal as there is no dissenting condition or requirement for country antitrust approvals. At the last close and for end-of-year payment, the gross/annualised spread is 2.3%/6.4%.

HSCEI Index Rebalance: Three In-Line Changes, Two Big Surprises

By Brian Freitas

J&T Global Express (1519 HK) and New Oriental Education (9901 HK) will replace JD Logistics (2618 HK) and SenseTime (20 HK) in the HSCEI at the close on 6 September.
The inclusion of J&T Global Express (1519 HK) is a big surprise and the stock could move higher over the next couple of weeks.
The non-inclusion of PICC Property & Casualty H (2328 HK) is another surprise since we had the stock highly ranked in the universe.

Thoughts on Capturing the 7% Doosan Swap Spread

By Sanghyun Park

Consider a two-phase strategy: go long on Bobcat spot and short futures until November 1. If Robotics’ price drops significantly, close the setup.
If things go well, close the Bobcat futures short before November 1 and hold an unhedged Bobcat long until the listing date on November 25.
Hold an unhedged long position during this trading suspension period because cancellation risk will be gone and Robotics may get stable inflows from MSCI inclusion.

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Aug 17

Daily Brief Quantitative Analysis: Hong Kong Buybacks Weekly (Aug 16th): Aia and more

By Smartkarma Daily Briefs | Daily Briefs, Quantitative Analysis

In today’s briefing:

Hong Kong Buybacks Weekly (Aug 16th): Aia, Hang Seng Bank, Swire Pacific

Hong Kong Buybacks Weekly (Aug 16th): Aia, Hang Seng Bank, Swire Pacific

By Ke Yan, CFA, FRM

We analyze statistics on top repurchases over one week, one month, one quarter and one year periods ended on Aug 16th based on HKEx daily reports.
In the past 7 days, the top 3 companies that repurchased the most shares from the market were AIA (1299 HK), Hang Seng Bank (11 HK), Swire Pacific (19 HK).
In the past 30 days, the top 3 companies that repurchased the most shares from the market were AIA (1299 HK), Meituan (3690 HK), HSBC (5 HK).

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Aug 17

Daily Brief ESG: Medco Energi – ESG Report – Lucror Analytics and more

By Smartkarma Daily Briefs | Daily Briefs, ESG

In today’s briefing:

Medco Energi – ESG Report – Lucror Analytics

Medco Energi – ESG Report – Lucror Analytics

Lucror Analytics’ ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable).
We assess Medco Energi’s ESG as “Adequate”, in line with its scores for the Environmental, Social and Governance pillars. Controversies are “Immaterial” and Disclosure is “Adequate”.

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Aug 17

Daily Brief Thematic (Sector/Industry): US Banks & Economy – HFD Mortgage Data Shows Weekly Improvements and more

By Smartkarma Daily Briefs | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

US Banks & Economy – HFD Mortgage Data Shows Weekly Improvements, Credit Growth Improving in US
# 47 India Insight: Swan Energy Stake Sell, L&T Realty Collaboration, Coal India Face Penalties
AUCTUS ON FRIDAY – 16/08/2024

US Banks & Economy – HFD Mortgage Data Shows Weekly Improvements, Credit Growth Improving in US

By Daniel Tabbush

High frequency data in the US for mortgage loan applications and mortgage loan volume is improving, not suggestive of recession
Total domestic credit growth in the US is accelerating in recent months, and this can continue given the HFD on mortgages
Credit metrics can remain a concern, especially in CRE and card lending, despite the improved delta in mortgage lending and total lending

# 47 India Insight: Swan Energy Stake Sell, L&T Realty Collaboration, Coal India Face Penalties

By Sudarshan Bhandari

Swan Energy to Sell Stake in FSRU to Turkey’s Botas for $400 Million
L&T Realty and Valor Estate Collaborate on INR 8,500 Crore Project in Mumbai’s Bandra West
Coal India to Face Penalties for Non-Supply of E-Auctioned Coal in Landmark Decision

AUCTUS ON FRIDAY – 16/08/2024

By Auctus Advisors

Criterium Energy (CEQ CN)C; Target price C$0.35 per share: New drilling expected to start in September – A drilling rig is scheduled to be mobilized to site in August.
The two-well infill program, targeting a previously undrilled section of the MGH Field, is anticipated to commence in early September with the wells expected to come on production in early November at a forecasted combined rate of 300 bbl/d.
While this is a bit later than we anticipated, we continue to forecast that Criterium will exit 2024 with ~1,250 boe/d production.

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Aug 17

Daily Brief Credit: Morning Views Asia: Lenovo and more

By Smartkarma Daily Briefs | Credit, Daily Briefs

In today’s briefing:

Morning Views Asia: Lenovo, Citicore Renewable Energy, Vedanta Resources
Morning Views Asia: Lenovo, Citicore Renewable Energy, Vedanta Resources
Vista Land & Lifescapes – Earnings Flash – H1 FY 2024 Results – Lucror Analytics

Morning Views Asia: Lenovo, Citicore Renewable Energy, Vedanta Resources

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.

Lenovo
Citicore Renewable Energy
Vedanta Resources

Morning Views Asia: Lenovo, Citicore Renewable Energy, Vedanta Resources

Lenovo
Citicore Renewable Energy
Vedanta Resources

Vista Land & Lifescapes – Earnings Flash – H1 FY 2024 Results – Lucror Analytics

Vista Land & Lifescapes’ (VLL) H1/24 results were acceptable, with improved earnings and margin expansion. That said, cash flows stayed negative and debt continued to rise. Hence, leverage remained moderately weak.

VLL maintains a sizeable portfolio of securities investment and investment properties, which generate recurring income and support the balance sheet. The investments could also be monetised if needed, albeit their market value is unclear. We expect the company’s liquidity needs to be manageable, given VLL’s reasonable access to funding.

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Aug 17

Daily Brief Event-Driven: Sun Corp (6736) – The Future Is Bright and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

Sun Corp (6736) – The Future Is Bright
Value-Up Flow Trading Opportunities Arising from NPS’s 10% Ownership Ceiling on Banks
Merger Between Celltrion Inc and Celltrion Pharm Is Cancelled
EQD | The ASX200 Can Rally Higher (If This Is A Rally…)
Ola Electric (OLAELEC): EV Maker Receives Turbo Boost from Lock-Up Expiries for Index Inclusion

Sun Corp (6736) – The Future Is Bright