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Smartkarma Daily Briefs

May 26
0

Daily Brief United States: Copper and more

By | Daily Briefs, United States

In today’s briefing:

  • Copper Tracker 26th May 2025: TSF Momentum Dampened on Trump Tariffs in April

Copper Tracker 26th May 2025: TSF Momentum Dampened on Trump Tariffs in April

By Sameer Taneja

  • The narrative surrounding China’s front-loaded stimulus faced some headwinds as April’s total social financing (TSF) figures undershot expectations, registering 1.16 trillion yuan compared to expected 1.3-1.4 trillion yuan.
  • Nonetheless, TSF remains up 28% ytd, reaching 15.2 trillion yuan, indicating a robust overall increase relative to the prior year. We expect it to pick up steam in future months. 
  • We believe this will be bullish for copper pricing, coupled with the supply side sluggishness. (Read: Post Results FY24: Mine-By-Mine Plan Production + Commentary on Copper From Global Listed Companies ).

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May 26
0

Daily Brief India: Eternal, Aegis Vopak Terminals Ltd, Ashok Leyland, National Aluminium and more

By | Daily Briefs, India

In today’s briefing:

  • Zomato/Eternal: The BIG Passive Selling Starts
  • AVTL: Storage Platform Poised for Growth Amid Demand Visibility
  • Ashok Leyland(AL IN)-Robust Growth ; Value Unlocking from Subsidiary Ahead
  • Aegis Vopak Pre-IPO: Expensive Related to Peers
  • NALCO (NACL IN): Record FY25 Profit; Alumina-Led Fall Likely Priced In, Execution Remains Key Risk

Zomato/Eternal: The BIG Passive Selling Starts

By Brian Freitas

  • Following shareholder approval of the proposal to reduce the Foreign Ownership Limit from 100% to 49.5%, NSDL has updated the FOL. This starts the process of passive selling in Zomato.
  • Passives will sell US$350m at the close on Tuesday. There is a low probability of more selling later in the week. There will be bigger selling in August.
  • The size of the selling in August and beyond will depend on what foreign investors do in the stock till the end of June. Watch the red flag/ breach list.

AVTL: Storage Platform Poised for Growth Amid Demand Visibility

By Rahul Jain

  • Aegis Vopak Terminals is raising Rs2,800 crore via a fresh issue to repay debt and fund expansion, marking its transition into a listed infrastructure platform.
  • LPG capacity is set to triple by FY26, with new industrial terminals planned under a Rs4,500 crore capex; revenue and EBITDA are projected to grow 20–25% CAGR through FY27.
  • Key risks include high dependence on group entities for revenue, delayed utilization of new capacity, and exposure to regulatory or energy demand shifts affecting LPG and chemical flows.

Ashok Leyland(AL IN)-Robust Growth ; Value Unlocking from Subsidiary Ahead

By Sreemant Dudhoria

  • Ashok Leyland (AL IN) posted 38% YoY PAT growth in Q4, driven by cost efficiency, premium product mix, and strong EBITDA margin improvement.
  • HLF IPO and Switch India’s PAT target for FY26 positions for significant value unlocking and improved subsidiary contribution.
  • CV demand, export momentum, and alt-fuel investments support a strong FY26 outlook, with valuations supported by improving profitability and resilient balance sheet. 4o

Aegis Vopak Pre-IPO: Expensive Related to Peers

By Nicholas Tan

  • Aegis Vopak Terminals Ltd (1902844D IN)  is looking to raise about US$328m in its upcoming India IPO.
  • It is the largest Indian third-party owner and operator (in terms of storage capacity) of tank storage terminals for liquified petroleum gas (LPG) and liquid products.
  • In this note, we look at the firm’s recent financial performance updates, as well as its potential valuation.

NALCO (NACL IN): Record FY25 Profit; Alumina-Led Fall Likely Priced In, Execution Remains Key Risk

By Rahul Jain

  • NALCO has guided for alumina realizations around $400/t in FY26, with earnings further impacted by delays in ramp-up of its 1 MTPA alumina expansion project.
  • Q4 FY25 results were strong, but earnings outlook has weakened significantly with the steep drop in alumina prices.
  • Valuations appear inexpensive on FY27 earnings at 5x EV/EBITDA, however peristent delays in capacity rampup is concerning. 

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May 26
0

Daily Brief Australia: Mayne Pharma, Empire Energy and more

By | Australia, Daily Briefs

In today’s briefing:

  • Merger Arb Mondays (26 May) – Mayne, Seven & I, Shibaura, Welcia/Tsuruha, Nissin, ESR, Dickson
  • Empire Energy Group Ltd – All that’s remaining is the gas rate

Merger Arb Mondays (26 May) – Mayne, Seven & I, Shibaura, Welcia/Tsuruha, Nissin, ESR, Dickson

By Arun George

Empire Energy Group Ltd – All that’s remaining is the gas rate

By Research as a Service (RaaS)

  • Empire Energy Group Limited (ASX:EEG) is a gas development company, with onshore Northern Territory (NT) gas exploration and development assets.
  • EEG has the largest tenement position in the highly prospective Greater McArthur Basin, which includes the Beetaloo Sub-basin.
  • Having successfully completed a $27.75m equity capital raise, with an additional $3.25m subject to shareholder approval and SPP take-up, the company should be funded through to first gas from the Carpentaria Pilot Project by around end-2025.

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May 26
0

Daily Brief Financials: Baloise Holding Ag and more

By | Daily Briefs, Financials

In today’s briefing:

  • Underwriting Returns: A Risk Arb Look at Helvetia-Baloise

Underwriting Returns: A Risk Arb Look at Helvetia-Baloise

By Jesus Rodriguez Aguilar

  • Shareholders of both firms have approved the merger, clearing a critical milestone ahead of expected regulatory clearance by late Q3 2025.
  • CHF 400m in net synergies and potential capital optimization could lift 2028 ROE to nearly 16%, offering meaningful value creation.
  • I recommend a long Baloise / short Helvetia strategy to capture the current 1.2% spread, translating to an estimated 3.4% annualized return.

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May 26
0

Daily Brief Industrials: Aegis Vopak Terminals Ltd, Ashok Leyland and more

By | Daily Briefs, Industrials

In today’s briefing:

  • AVTL: Storage Platform Poised for Growth Amid Demand Visibility
  • Ashok Leyland(AL IN)-Robust Growth ; Value Unlocking from Subsidiary Ahead
  • Aegis Vopak Pre-IPO: Expensive Related to Peers

AVTL: Storage Platform Poised for Growth Amid Demand Visibility

By Rahul Jain

  • Aegis Vopak Terminals is raising Rs2,800 crore via a fresh issue to repay debt and fund expansion, marking its transition into a listed infrastructure platform.
  • LPG capacity is set to triple by FY26, with new industrial terminals planned under a Rs4,500 crore capex; revenue and EBITDA are projected to grow 20–25% CAGR through FY27.
  • Key risks include high dependence on group entities for revenue, delayed utilization of new capacity, and exposure to regulatory or energy demand shifts affecting LPG and chemical flows.

Ashok Leyland(AL IN)-Robust Growth ; Value Unlocking from Subsidiary Ahead

By Sreemant Dudhoria

  • Ashok Leyland (AL IN) posted 38% YoY PAT growth in Q4, driven by cost efficiency, premium product mix, and strong EBITDA margin improvement.
  • HLF IPO and Switch India’s PAT target for FY26 positions for significant value unlocking and improved subsidiary contribution.
  • CV demand, export momentum, and alt-fuel investments support a strong FY26 outlook, with valuations supported by improving profitability and resilient balance sheet. 4o

Aegis Vopak Pre-IPO: Expensive Related to Peers

By Nicholas Tan

  • Aegis Vopak Terminals Ltd (1902844D IN)  is looking to raise about US$328m in its upcoming India IPO.
  • It is the largest Indian third-party owner and operator (in terms of storage capacity) of tank storage terminals for liquified petroleum gas (LPG) and liquid products.
  • In this note, we look at the firm’s recent financial performance updates, as well as its potential valuation.

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May 26
0

Daily Brief South Korea: Samsung Biologics and more

By | Daily Briefs, South Korea

In today’s briefing:

  • Clarifying a Few Points of Confusion Surrounding the Samsung Biologics Spin-Off

Clarifying a Few Points of Confusion Surrounding the Samsung Biologics Spin-Off

By Sanghyun Park

  • Will the newly listed spinco also IPO Samsung Bioepis? That’s a textbook ECO — and could spark shareholder value dilution concerns, regulatory pushback, or even a potential KRX block.
  • The 8% dip looks tied to IPO fears around Bioepis. If Samsung hard-locks its no-IPO stance and FSS signs off, a near-term bounce in Biologics could be in play.
  • Post-Listing, watch for Samsung C&T to shift exposure—potentially boosting the surviving company’s value while capping the spinco. Sets up a compelling relative-value trade worth positioning for.

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May 26
0

Daily Brief Macro: Overview #27 – The Big Beautiful Tragi-Comedy Continues and more

By | Daily Briefs, Macro

In today’s briefing:

  • Overview #27 – The Big Beautiful Tragi-Comedy Continues
  • Bond Vigilantes and Trade Tensions Derail the Momentum Bull
  • Sell America = Buy Gold
  • Copper Tracker 26th May 2025: TSF Momentum Dampened on Trump Tariffs in April

Overview #27 – The Big Beautiful Tragi-Comedy Continues

By Rikki Malik

  • A review of recent events/data impacting our investment themes and outlook
  • What are major global bond markets telling us about the world?
  • We look at potential beneficiaries  of the next wave of inflation 

Bond Vigilantes and Trade Tensions Derail the Momentum Bull

By Cam Hui

  • The stock market advance is due for a pause and faces numerous headwinds.
  • The rise of the bond vigilantes, elevated valuation and heightened earnings risk, and narrow leadership combined to increase risk.
  • Tactically, the S&P 500 is breaking down technically a pullback wouldn’t be out of line under the circumstances.

Sell America = Buy Gold

By Cam Hui

  • The Sell America investment theme is becoming as a dominant market narrative, and it’s bullish for gold.
  • It is driven by the combination of rising deficits, shaky bond markets, an increasingly hawkish Fed and policy uncertainty.
  • For a long-term perspective of the upside potential in gold, a point-and-figure chart of monthly gold prices shows a measured objective of almost $7,000.

Copper Tracker 26th May 2025: TSF Momentum Dampened on Trump Tariffs in April

By Sameer Taneja

  • The narrative surrounding China’s front-loaded stimulus faced some headwinds as April’s total social financing (TSF) figures undershot expectations, registering 1.16 trillion yuan compared to expected 1.3-1.4 trillion yuan.
  • Nonetheless, TSF remains up 28% ytd, reaching 15.2 trillion yuan, indicating a robust overall increase relative to the prior year. We expect it to pick up steam in future months. 
  • We believe this will be bullish for copper pricing, coupled with the supply side sluggishness. (Read: Post Results FY24: Mine-By-Mine Plan Production + Commentary on Copper From Global Listed Companies ).

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May 26
0

Daily Brief Health Care: Mayne Pharma, Samsung Biologics and more

By | Daily Briefs, Healthcare

In today’s briefing:

  • Merger Arb Mondays (26 May) – Mayne, Seven & I, Shibaura, Welcia/Tsuruha, Nissin, ESR, Dickson
  • Clarifying a Few Points of Confusion Surrounding the Samsung Biologics Spin-Off

Merger Arb Mondays (26 May) – Mayne, Seven & I, Shibaura, Welcia/Tsuruha, Nissin, ESR, Dickson

By Arun George

Clarifying a Few Points of Confusion Surrounding the Samsung Biologics Spin-Off

By Sanghyun Park

  • Will the newly listed spinco also IPO Samsung Bioepis? That’s a textbook ECO — and could spark shareholder value dilution concerns, regulatory pushback, or even a potential KRX block.
  • The 8% dip looks tied to IPO fears around Bioepis. If Samsung hard-locks its no-IPO stance and FSS signs off, a near-term bounce in Biologics could be in play.
  • Post-Listing, watch for Samsung C&T to shift exposure—potentially boosting the surviving company’s value while capping the spinco. Sets up a compelling relative-value trade worth positioning for.

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May 26
0

Daily Brief Equity Bottom-Up: AVTL: Storage Platform Poised for Growth Amid Demand Visibility and more

By | Daily Briefs, Equity Bottom-Up

In today’s briefing:

  • AVTL: Storage Platform Poised for Growth Amid Demand Visibility
  • Tongcheng Travel (780 HK): Regaining Momentum, Better Choice than Trip.com
  • Fabrinet – Fabrinet: The Rise of 1.6T Datacom Products & 4 Solid Growth Catalysts!
  • Guangdong Investment (270): Stable Diversifier and USD 1.3 Bn FCF
  • Ashok Leyland(AL IN)-Robust Growth ; Value Unlocking from Subsidiary Ahead
  • NALCO (NACL IN): Record FY25 Profit; Alumina-Led Fall Likely Priced In, Execution Remains Key Risk
  • Jade Group: Magaseek and Locondo Stall
  • Empire Energy Group Ltd – All that’s remaining is the gas rate

AVTL: Storage Platform Poised for Growth Amid Demand Visibility

By Rahul Jain

  • Aegis Vopak Terminals is raising Rs2,800 crore via a fresh issue to repay debt and fund expansion, marking its transition into a listed infrastructure platform.
  • LPG capacity is set to triple by FY26, with new industrial terminals planned under a Rs4,500 crore capex; revenue and EBITDA are projected to grow 20–25% CAGR through FY27.
  • Key risks include high dependence on group entities for revenue, delayed utilization of new capacity, and exposure to regulatory or energy demand shifts affecting LPG and chemical flows.

Tongcheng Travel (780 HK): Regaining Momentum, Better Choice than Trip.com

By Osbert Tang, CFA

  • Tongcheng Travel Holdings (780 HK)‘s 1Q25 adjusted net profit surged 41.1%, suggesting an accelerating momentum. It should continue to outperform Trip.com Group (9961 HK). 
  • Good cost management, even as revenue rose 13.2%, has enhanced adjusted EBITDA margin by 5.3pp YoY – this trend will sustain. 
  • More visa convenience will boost inbound and outbound travel. At end-1Q25, net cash equals 14% of market capitalisation, and it can still generate ROE of 12-15%. 

Fabrinet – Fabrinet: The Rise of 1.6T Datacom Products & 4 Solid Growth Catalysts!

By Baptista Research

  • Fabrinet has reported strong results for the third quarter of fiscal year 2025, which ended on March 28, 2025.
  • The company achieved a revenue of $872 million, surpassing its guidance range, and non-GAAP earnings per share stood at $2.52, also above expectations.
  • This performance highlights Fabrinet’s robust execution capabilities, especially in the optical communications sector where telecom revenue demonstrated significant growth, counterbalancing a predicted decline in datacom revenue.

Guangdong Investment (270): Stable Diversifier and USD 1.3 Bn FCF

By Henry Soediarko

  • Guangdong Investment (270 HK) exposure in water distribution provides the much-needed stability (low volatility). While its Real Estate exposure could provide some growth.
  • With low valuation and healthy dividend yield, owning GDI during the tumultuous period will provide healthy diversification for your portfolio and a hedge during Trump’ tariff period.
  • The water sector is undervalued, mainly due to the characteristically low growth, but free cash flow is generally quite strong yet undervalued. GDI generated USD 1.3 bn Free cash flow.

Ashok Leyland(AL IN)-Robust Growth ; Value Unlocking from Subsidiary Ahead

By Sreemant Dudhoria

  • Ashok Leyland (AL IN) posted 38% YoY PAT growth in Q4, driven by cost efficiency, premium product mix, and strong EBITDA margin improvement.
  • HLF IPO and Switch India’s PAT target for FY26 positions for significant value unlocking and improved subsidiary contribution.
  • CV demand, export momentum, and alt-fuel investments support a strong FY26 outlook, with valuations supported by improving profitability and resilient balance sheet. 4o

NALCO (NACL IN): Record FY25 Profit; Alumina-Led Fall Likely Priced In, Execution Remains Key Risk

By Rahul Jain

  • NALCO has guided for alumina realizations around $400/t in FY26, with earnings further impacted by delays in ramp-up of its 1 MTPA alumina expansion project.
  • Q4 FY25 results were strong, but earnings outlook has weakened significantly with the steep drop in alumina prices.
  • Valuations appear inexpensive on FY27 earnings at 5x EV/EBITDA, however peristent delays in capacity rampup is concerning. 

Jade Group: Magaseek and Locondo Stall

By Michael Causton

  • Jade Group (3558 JP) made some wild promises about its potential to grow its online fashion mall business last year when it acquired Magaseek. 
  • But recent results suggest what many feared: building scale without due regard for the quality of the assets acquired does not an empire make.
  • With Magaseek contracting and e-commerce overall showing muted growth, Jade Group´s capacity to escape the shadow of the big three looks limited.

Empire Energy Group Ltd – All that’s remaining is the gas rate

By Research as a Service (RaaS)

  • Empire Energy Group Limited (ASX:EEG) is a gas development company, with onshore Northern Territory (NT) gas exploration and development assets.
  • EEG has the largest tenement position in the highly prospective Greater McArthur Basin, which includes the Beetaloo Sub-basin.
  • Having successfully completed a $27.75m equity capital raise, with an additional $3.25m subject to shareholder approval and SPP take-up, the company should be funded through to first gas from the Carpentaria Pilot Project by around end-2025.

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May 26
0

Daily Brief China: Horizon Robotics, Contemporary Amperex Technology (CATL), Bestechnic Shanghai , Tongcheng Travel Holdings , Alibaba Group Holding , Guangdong Investment, Foshan Haitian Flavouring & Food Company and more

By | China, Daily Briefs

In today’s briefing:

  • Horizon Robotics (9660 HK): Southbound Stock Connect Inclusion Today & Upcoming Index Flows
  • Curator’s Cut: Korea’s Value, CATL’s Charge and Copper’s Surge
  • STAR Chip/ CES Chips/ CNI Chips Index Rebalance Preview: Multiple Stocks with Overlapping Flow
  • Tongcheng Travel (780 HK): Regaining Momentum, Better Choice than Trip.com
  • Alibaba (9988 HK): Unpacking the Week’s Savvy Top Options Trades
  • Alibaba (9988 HK): Navigating Post-Earnings Volatility
  • ECM Weekly (26 May 2025) – CATL, Hengrui, Eastroc, Haitian, Schloss, Aegis, Hyundai Marine, Pony
  • Guangdong Investment (270): Stable Diversifier and USD 1.3 Bn FCF
  • Pre-IPO Foshan Haitian Flavouring & Food Company (PHIP Updates) – Some Points Worth the Attention

Horizon Robotics (9660 HK): Southbound Stock Connect Inclusion Today & Upcoming Index Flows

By Brian Freitas

  • Horizon Robotics (9660 HK) will be added to Southbound Stock Connect from the start of trading today. Then there will be passive buying at the close on 20 June.
  • The lock up expiry in April will result in large buying from trackers of the Hang Seng TECH Index (HSTECH INDEX) and HSIII Index in September.
  • The stock will also be added to another large global index, though the timing on inclusion is not certain at the moment.

Curator’s Cut: Korea’s Value, CATL’s Charge and Copper’s Surge

By Pranav Rao

  • Welcome to Curator’s Cut, a fortnightly roundup of standout themes from the 1,200+ insights published over the past two weeks on Smartkarma
  • In this cut, we look at Korea’s compelling valuation versus AxJ equities, CATL’s blockbuster Hong Kong listing and its market implications, and explore copper’s price surge amidst Chinese demand
  • Want to dig deeper? Comment or message with the themes you think should be highlighted next

STAR Chip/ CES Chips/ CNI Chips Index Rebalance Preview: Multiple Stocks with Overlapping Flow

By Brian Freitas

  • There could be 1 change each for the STAR Chip Index and CNI Semiconductor Chips Index, and 3 changes for the CES China Semiconductor Chips Index in June.
  • There are a few stocks that will have same-way flow from passive trackers of the STAR50 INDEX, STAR 100 Index, CSI 500 Index, CSI 1000 Index and CSI A500 Index. 
  • The round-trip trade across the indices is CNY 2.9bn (US$400m) and will add to the impact across the other China indices that rebalance on the same day.

Tongcheng Travel (780 HK): Regaining Momentum, Better Choice than Trip.com

By Osbert Tang, CFA

  • Tongcheng Travel Holdings (780 HK)‘s 1Q25 adjusted net profit surged 41.1%, suggesting an accelerating momentum. It should continue to outperform Trip.com Group (9961 HK). 
  • Good cost management, even as revenue rose 13.2%, has enhanced adjusted EBITDA margin by 5.3pp YoY – this trend will sustain. 
  • More visa convenience will boost inbound and outbound travel. At end-1Q25, net cash equals 14% of market capitalisation, and it can still generate ROE of 12-15%. 

Alibaba (9988 HK): Unpacking the Week’s Savvy Top Options Trades

By Gaudenz Schneider

  • Over the past five trading days, Alibaba Group Holding (9988 HK) multi-leg option strategies showcased a variety of approaches. Strategy highlights are provided.
  • Popular Strategies: Over 35% of all strategies are Calendar or Diagonal Spreads. Bullish and bearish views prevail at equal rates, with very few market-neutral views expressed.
  • Top Trades: Some market participants were betting on a short term re-bound after the post-earnings drop. Others take a bearish view with finely calibrated medium-term hedges. Trade-examples are presented.

Alibaba (9988 HK): Navigating Post-Earnings Volatility

By Gaudenz Schneider

  • Implied Volatility Trends:Alibaba Group Holding’s (9988 HK) one-month implied volatility has significantly receded to the 37th percentile after its 15 May earnings, reflecting a substantial implied vola crush.
  • Skew and Term Structure Dynamics: The implied volatility term structure is now slightly upward-sloping with longer-dated options commanding a small premium. Skew dynamics indicate cheaper puts.
  • Open Interest Distribution: Liquidity is greatest in the June and September expiries. Short term strikes are concentrated near or at the money.

ECM Weekly (26 May 2025) – CATL, Hengrui, Eastroc, Haitian, Schloss, Aegis, Hyundai Marine, Pony

By Sumeet Singh

Guangdong Investment (270): Stable Diversifier and USD 1.3 Bn FCF

By Henry Soediarko

  • Guangdong Investment (270 HK) exposure in water distribution provides the much-needed stability (low volatility). While its Real Estate exposure could provide some growth.
  • With low valuation and healthy dividend yield, owning GDI during the tumultuous period will provide healthy diversification for your portfolio and a hedge during Trump’ tariff period.
  • The water sector is undervalued, mainly due to the characteristically low growth, but free cash flow is generally quite strong yet undervalued. GDI generated USD 1.3 bn Free cash flow.

Pre-IPO Foshan Haitian Flavouring & Food Company (PHIP Updates) – Some Points Worth the Attention

By Xinyao (Criss) Wang

  • Despite returning to positive growth, Haitian still failed to achieve its 2024 revenue target, mainly due to underperformance of Soy sauce products, consumption downgrades, slow online layout/distributors recovery.
  • Haitian would face dual challenges of “cost increase + structural transformation” in the next three years due to inflation and the negative impact of  “new standard”. We shared our performance forecast.
  • High valuation is unsustainable if based on current growth rate.Reasonable valuation is about 20-30x P/E. However, due to the strong sentiment for AH listing, share price may still perform well. 

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