Smartkarma Daily Briefs

Timee Inc (215A JP), a leading part-time job platform in Japan, is seeking to raise up to US$286 million. Book-building runs from 9 to 23 July.
Timee’s app allows users to work shifts as short as one hour at restaurants, convenience stores, and hotels, with quick payment for their work.
The bull case rests on favourable market trends, best-in-class revenue growth, good retention rates, credible growth drivers, and top-quartile EBITDA margins.

Shinko Electric (6967) – Break/Gap Risk Early July 2024 Update

When this deal was announced, it was light. But the timing, JSR influence, large-ish float, ensured FUD would make this trade wide. It traded wider.
Nearly 6mos ago, Shinko had much-underperformed peer Ibiden, meaning downside gap risk from undisturbed was negative as spreads were wide. I reco’d a buy. Then 16+wks ago, recommended taking profits.
Shinko had outperformed Ibiden, gross spreads had narrowed 5+% on JSR approval. Gross spread is now 4.6% but time is shorter so annualised is 10+% even out to December launch.

Japan Cross-Shareholding – Summary Matrix – Over US$100bn of Selling in 118 Companies

By Sumeet Singh

Following up on our earlier cross-shareholding work, in this note we look to summarize our work so far by looking at where most of the selling will likely come.
Of the seven companies that we have looked at so far, collectively they have around US$102bn worth of shares to sell in 118 companies.
Of these, they have a combined stake of over US$1bn in 23 companies.

Eisai Co Ltd (4523 JP): New Competition Is Coming for Alzheimer’s Disease Drug; No Immediate Threat

By Tina Banerjee

On July 2, Eli Lilly & Co (LLY US) has received FDA approval for its Alzheimer’s disease drug Kisunla, which will compete head-on-head with Eisai Co Ltd (4523 JP)‘s Leqembi.
Efficacy and indications of both the drugs are similar. Price comparison is tricky. However, Kisunla can be stopped when amyloid plaques are removed, which is not the case for Leqembi.
Eisai is not expected to face immediate competition and should comfortably meet Leqembi FY25 revenue target of ¥56.5B, including ¥43.5B from the U.S. Recently, Leqembi has been launched in China.

The Challenge Is to Raise the Quality of Engagement. To Do So, Active Funds Need to Be Increased

By Aki Matsumoto

The reason why investor engagement is effective is in the exercise of voting rights. Engagement is considered to have been effective around 2014, when foreign ownership exceeded 30%.
Engagement is generally effective in the funds entrusted to GPIF, according to the results of the study. GPIF should raise fees to allow investment managers to engage in fruitful engagement.
This tends to be a generic question for passive funds. If we expect engagement to be more effective in the future, we need to increase the number of active funds.

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Jul 04

Most Read: Honda Motor, HDFC Bank, China Traditional Chinese Medicine, Stella International, Timee Inc, ASM Pacific Technology, Shinko Electric Industries, ESR Group , Barito Renewables Energy and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

BIG ¥500bn Honda (7267) Offering Coming?
HDFC Bank (HDFCB IN): Foreign Room Crosses 25%; Index Implications & Positioning for US$5bn+ Buying
China TCM (570.HK) Update – Behind The Share Price Plunge and Prospects for Privatization Progress
HSCI Index Rebalance Preview and Stock Connect: Potential Changes in September
Timee (215A JP) IPO: The Bull Case
HSTECH Index Rebalance Preview: ASM Pacific (522) Could Replace Ping An Health (1833); US$1bn Trade
Shinko Electric (6967) – Break/Gap Risk Early July 2024 Update
ESR Group (1821 HK): Consortium’s Expansion Talks Suggest Progress
StubWorld: Barito Renewables (BREN IJ) – This Too Shall Pop
Korean Government Announces Corporate and Dividend Tax Incentives Under Corporate Value Up Program

BIG ¥500bn Honda (7267) Offering Coming?

Today just before the close, Reuters came out with an article saying Japan’s four major insurers and some financial institutions would offer ¥500bn of shares in a secondary offering.
That implies about 275-280mm shares (insurers hold ~195mm). In May, Honda announced a ¥300bn buyback with earnings, with nothing done so far.
The supply/demand dynamics here are key. There are a lot of moving parts over time. Honda is cheaper than it looks but there are moving parts there too.

HDFC Bank (HDFCB IN): Foreign Room Crosses 25%; Index Implications & Positioning for US$5bn+ Buying

Foreign shareholding in HDFC Bank (HDFCB IN) has dropped to 54.83% and that results in foreign room crossing the ‘magical’ 25% mark.
The increase in foreign room could lead to passive trackers of a global index needing to buy 256m shares (US$5.3bn; 11.5x ADV) at the end of August.
There will definitely be positioning in the stock but there should still be upside in the stock. The HDFC Bank (ADR) (HDB US) line was up 4.5% overnight.

China TCM (570.HK) Update – Behind The Share Price Plunge and Prospects for Privatization Progress

By Xinyao (Criss) Wang

The slow progress of privatization is related to recent high-level changes in CNPGC. Decisions on SOE deals with “strategic purpose” require careful considerations, not based on “one leader’s personal preferences”.
Based on public information, we cannot find convincing reason to prove that CNPGC has changed its mind.There’re rumors that China TCM’s privatization is still considered important project on the agenda.
China TCM’s has strong fundamentals to support valuation. If there is no announcement, the privatization process is expected to proceed as usual, and we continue to wait for the voting.

HSCI Index Rebalance Preview and Stock Connect: Potential Changes in September

We see 37 potential adds (including plenty of new listings) and 25 potential deletes (on market cap and liquidity) for the Hang Seng Composite Index in September.
We expect 32 stocks to be added to Southbound Stock Connect following the rebalance while 24 stocks could be deleted from the trading link and become Sell-only.
There are stocks that have a very high percentage of holdings via Stock Connect and there could be some unwinding prior to the stocks becoming Sell-only.

Timee (215A JP) IPO: The Bull Case

Timee Inc (215A JP), a leading part-time job platform in Japan, is seeking to raise up to US$286 million. Book-building runs from 9 to 23 July.
Timee’s app allows users to work shifts as short as one hour at restaurants, convenience stores, and hotels, with quick payment for their work.
The bull case rests on favourable market trends, best-in-class revenue growth, good retention rates, credible growth drivers, and top-quartile EBITDA margins.

HSTECH Index Rebalance Preview: ASM Pacific (522) Could Replace Ping An Health (1833); US$1bn Trade

ASM Pacific Technology (522 HK) is expected to replace Ping An Healthcare and Technol (1833 HK) in the Hang Seng TECH Index (HSTECH INDEX) at the September rebalance.
Constituent changes and capping changes will result in a one-way turnover of 3.7% and that will result in a round-trip trade of HK$7.8bn (US$1bn).
Short interest is near the lows on both stocks but there has been a recent tick higher for ASM Pacific Technology (522 HK).

Shinko Electric (6967) – Break/Gap Risk Early July 2024 Update

When this deal was announced, it was light. But the timing, JSR influence, large-ish float, ensured FUD would make this trade wide. It traded wider.
Nearly 6mos ago, Shinko had much-underperformed peer Ibiden, meaning downside gap risk from undisturbed was negative as spreads were wide. I reco’d a buy. Then 16+wks ago, recommended taking profits.
Shinko had outperformed Ibiden, gross spreads had narrowed 5+% on JSR approval. Gross spread is now 4.6% but time is shorter so annualised is 10+% even out to December launch.

ESR Group (1821 HK): Consortium’s Expansion Talks Suggest Progress

Bloomberg reports that the bidding consortium is in talks to bring in other partners, such as QIA, PIF, and CPP Investment Board, to aid in privatising ESR Group (1821 HK).
Warburg Pincus and OMERS have blocking stakes for a Cayman scheme. Warburg Pincus is seemingly supportive, and the consortium’s expansion talks suggest confidence in meeting OMERS’ price expectations.
Our best guess is that an offer is around HK$14.00. ESR’s current valuation is undemanding, with its forward EV/EBITDA multiple at a 40% discount compared to the median peers’ multiple.

StubWorld: Barito Renewables (BREN IJ) – This Too Shall Pop

Barito Pacific (BRPT IJ)‘s 64.7% stake in Barito Renewables Energy (BREN IJ) (now Indonesia’s largest company by market cap), is worth 8x its market cap. That’s unsustainable.
Preceding my comments on the Barito complex 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%.

Korean Government Announces Corporate and Dividend Tax Incentives Under Corporate Value Up Program

By Douglas Kim

The Korean government announced corporate tax incentives for companies that actively increase capital returns to shareholders and also dividend tax incentives and as part of the Corporate Value Up program.
For companies that provide shareholder returns, a 5% corporate tax amount on the increase will be deducted and the tax burden on increased dividends of the company will be reduced.
For dividends under 20mn won, the tax rate will be reduced from 14% to 9%. Investor can choose lower rate (25% or comprehensive tax rate) for dividends exceeding 20mn won.

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Jul 04

Daily Brief ESG: The Challenge Is to Raise the Quality of Engagement. To Do So and more

By Smartkarma Daily Briefs | Daily Briefs, ESG

In today’s briefing:

The Challenge Is to Raise the Quality of Engagement. To Do So, Active Funds Need to Be Increased

The Challenge Is to Raise the Quality of Engagement. To Do So, Active Funds Need to Be Increased

By Aki Matsumoto

The reason why investor engagement is effective is in the exercise of voting rights. Engagement is considered to have been effective around 2014, when foreign ownership exceeded 30%.
Engagement is generally effective in the funds entrusted to GPIF, according to the results of the study. GPIF should raise fees to allow investment managers to engage in fruitful engagement.
This tends to be a generic question for passive funds. If we expect engagement to be more effective in the future, we need to increase the number of active funds.

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Jul 04

Daily Brief Thematic (Sector/Industry): SEBI’s New “True to Label” Circular: End of Zero Fee Era and more

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

In today’s briefing:

SEBI’s New “True to Label” Circular: End of Zero Fee Era
Ohayo Japan | Markets in Celebratory Mood
Asia Credit – HK Weakens More, Indonesia, Taiwan Remain Strong, and Improving
#23 India Insight: Tata Hitachi Market Share, Patanjali Acquires Non-Food Business, ITC Exports
Hardman & Co Monthly: July 2024

SEBI’s New “True to Label” Circular: End of Zero Fee Era

By Nimish Maheshwari

SEBI asked Brokers to to be ‘true to the label’ in how they levy charges.
This can impact 10% of Zerodha (ZERO IN) and 8% of Angel One (ANGELONE IN) Topline.
Rationale behind this circular and its impact on the market.

Ohayo Japan | Markets in Celebratory Mood

By Mark Chadwick

The S&P 500 and Nasdaq Composite hit new record highs in Wednesday’s shortened trading session
The German Association of the Automobile Industry reduced its 2024 EV production forecast to 1 million units, citing declining sales due to subsidy cuts.
Daikin Industries plans to boost home air conditioner production by 15% in FY2024 to a record 8.83 million units

Asia Credit – HK Weakens More, Indonesia, Taiwan Remain Strong, and Improving

By Daniel Tabbush

Domestic credit growth in Hong Kong weakened further in latest monthly release at -2.2% YoY. Weekly Centa City Leading Index grinds lower, a more HFD point relevant to credit
The acceleration in domestic credit growth in Indonesia is unique, where growth is up to +11.2% YoY in most recent month vs +5.2% YoY in the same month last year
We remain concerned about credit metrics for HK’s banks given contracting growth, worsening property, which is collateral. Many HK banks have done little in provisioning

#23 India Insight: Tata Hitachi Market Share, Patanjali Acquires Non-Food Business, ITC Exports

By Sudarshan Bhandari

Tata Hitachi Targets Increased Market Share Amid Chinese Competition, Plans Manufacturing Expansion
Railways to Receive PLI Boost, Aiming to Reduce Import Dependency and Foster Local Manufacturing
India’s Coal Production Surges 14% in June, Reaching 84.63 Million Tonnes, Boosting Sector Efficiency

Hardman & Co Monthly: July 2024

By Hardman & Co

In 2023, and for the second year running, the Hardman & Co sector index declined, by 3.7%, underperforming both the FTSE 100 and the FTSE All-Share indices.
This is quite unusual for healthcare stocks. Our Index covers 52 companies, only 15 of which saw an increase in their share prices in 2023, and four of those were on account of M&A activity.
Apart from the general economic influences, which have made institutions more risk-averse, there was a common knowledge that several companies were in need of additional working capital; so, share prices were marked down in anticipation of equity raises.

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Jul 04

Daily Brief ECM: Timee (215A JP) IPO: The Bull Case and more

By Smartkarma Daily Briefs | Daily Briefs, ECM

In today’s briefing:

Timee (215A JP) IPO: The Bull Case
Emcure Pharmaceuticals Pre-IPO – Refiling Updates and Valuations
Cirrus Aircraft IPO – Fundamentally Sound but Parent Still Under Sanction
Pre-IPO UGenix Biotech – Future Growth Potential Is Highly Uncertain

Timee (215A JP) IPO: The Bull Case

Timee Inc (215A JP), a leading part-time job platform in Japan, is seeking to raise up to US$286 million. Book-building runs from 9 to 23 July.
Timee’s app allows users to work shifts as short as one hour at restaurants, convenience stores, and hotels, with quick payment for their work.
The bull case rests on favourable market trends, best-in-class revenue growth, good retention rates, credible growth drivers, and top-quartile EBITDA margins.

Emcure Pharmaceuticals Pre-IPO – Refiling Updates and Valuations

By Sumeet Singh

Emcure Pharmaceuticals is looking to raise around US$240m in its upcoming India IPO.
Emcure Pharmaceuticals (EP) is an Indian Pharmaceutical company engaged in the developing, manufacturing and globally marketing a broad range of pharmaceutical products across several major therapeutic areas.
We have looked at the company’s past performance, in our earlier note. In this note, we talk about the RHP updates and take a quick look at valuations.

Cirrus Aircraft IPO – Fundamentally Sound but Parent Still Under Sanction

By Ethan Aw

Cirrus Aircraft (0153126D US) seeks to raise up to US$197m in its Hong Kong IPO.
Cirrus Aircraft designs, develops, manufactures, and sells premium aircrafts. Its two aircraft product lines, the SR2X Series and the Vision Jet, are currently certified and validated in over 60 countries.
In our previous notes, we talked about the company’s historical performance and PHIP updates. In this note, we undertake a quick peer comparison and share our thoughts on valuation.

Pre-IPO UGenix Biotech – Future Growth Potential Is Highly Uncertain

By Xinyao (Criss) Wang

Although UGenix is a genetic technology company focusing on prenatal testing/precision oncology, it was the large-scale COVID-19 testing demand that made UGenix’s overall revenue grow rapidly, which, however, is unsustainable.
NIPT market size is far less than expected. The clinical need for NGS has not developed as rigid demand. Restrictions on companion diagnosis pricing indicate market space would be compressed.
The business of both prenatal testing and precision oncology are not easy. Due to uncertain commercialization outlook/profitability and other negative factors, UGenix’s stock price after IPO could underperform.

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Jul 04

Daily Brief Credit: Morning Views Asia: China Vanke and more

By Smartkarma Daily Briefs | Credit, Daily Briefs

In today’s briefing:

Morning Views Asia: China Vanke , Lippo Malls Indonesia Retail Trust

Morning Views Asia: China Vanke , Lippo Malls Indonesia Retail Trust

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 Vanke
Lippo Malls Indonesia Retail Trust

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Jul 04

Daily Brief Event-Driven: Shinko Electric (6967) – Break/Gap Risk Early July 2024 Update and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

Shinko Electric (6967) – Break/Gap Risk Early July 2024 Update
ESR Group (1821 HK): Consortium’s Expansion Talks Suggest Progress
StubWorld: Barito Renewables (BREN IJ) – This Too Shall Pop
Yangzijiang Shipbuilding (YZJSGD SP): Cheaper than Peers with Index Inclusion Kicker
Japan Cross-Shareholding – Summary Matrix – Over US$100bn of Selling in 118 Companies
EQT/Keywords Studios: Scheme of Arrangement
Sermsuk (SSC TB): THBEV’s Delisting Offer

Shinko Electric (6967) – Break/Gap Risk Early July 2024 Update

When this deal was announced, it was light. But the timing, JSR influence, large-ish float, ensured FUD would make this trade wide. It traded wider.
Nearly 6mos ago, Shinko had much-underperformed peer Ibiden, meaning downside gap risk from undisturbed was negative as spreads were wide. I reco’d a buy. Then 16+wks ago, recommended taking profits.
Shinko had outperformed Ibiden, gross spreads had narrowed 5+% on JSR approval. Gross spread is now 4.6% but time is shorter so annualised is 10+% even out to December launch.

ESR Group (1821 HK): Consortium’s Expansion Talks Suggest Progress

Bloomberg reports that the bidding consortium is in talks to bring in other partners, such as QIA, PIF, and CPP Investment Board, to aid in privatising ESR Group (1821 HK).
Warburg Pincus and OMERS have blocking stakes for a Cayman scheme. Warburg Pincus is seemingly supportive, and the consortium’s expansion talks suggest confidence in meeting OMERS’ price expectations.
Our best guess is that an offer is around HK$14.00. ESR’s current valuation is undemanding, with its forward EV/EBITDA multiple at a 40% discount compared to the median peers’ multiple.

StubWorld: Barito Renewables (BREN IJ) – This Too Shall Pop

Barito Pacific (BRPT IJ)‘s 64.7% stake in Barito Renewables Energy (BREN IJ) (now Indonesia’s largest company by market cap), is worth 8x its market cap. That’s unsustainable.
Preceding my comments on the Barito complex 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%.

Yangzijiang Shipbuilding (YZJSGD SP): Cheaper than Peers with Index Inclusion Kicker

The rally in Yangzijiang Shipbuilding (YZJSGD SP) over the last month should result in the stock being added to global passive portfolios late next month.
Yangzijiang Shipbuilding (YZJSGD SP) trades cheaper than peers on forward PE but there has been a big rally in the stock over the last month.
There has been an increase in cumulative excess volume since mid-May and there will be positioning for the event, but there could be further gains in the stock.

Japan Cross-Shareholding – Summary Matrix – Over US$100bn of Selling in 118 Companies

By Sumeet Singh

Following up on our earlier cross-shareholding work, in this note we look to summarize our work so far by looking at where most of the selling will likely come.
Of the seven companies that we have looked at so far, collectively they have around US$102bn worth of shares to sell in 118 companies.
Of these, they have a combined stake of over US$1bn in 23 companies.

EQT/Keywords Studios: Scheme of Arrangement

By Jesus Rodriguez Aguilar

On 3 July, PUSU deadline, Bidco and Keywords Studios (KWS LN) have agreed to an acquisition to be carried out through a scheme of arrangement.
Shareholders will receive 2,450p/share in cash, cum dividend, 66.7% premium, for 22.4x Fwd P/E. There’s a minimal number of irrevocables and just 7.57% of capital in letters of intent.
I think the price is reasonable considering the recent challenges affecting the value of the stock, and deal will close. Spread is 2.45%/6.3% (gross/annualised, assuming settlement by 29 November). Long.

Sermsuk (SSC TB): THBEV’s Delisting Offer

Thai Beverage (THBEV SP) is proposing to take 64.67%-held Sermsuk PCL (SSC TB) private by way of a voluntary Delisting Offer.
The Offer price is THB 63/share, a 27.9% premium to last close.
This Delisting Offer requires a Scheme-like shareholder vote. Payment may occur late 4Q24. This is an illiquid arb.

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Jul 04

Daily Brief Equity Bottom-Up: Fushan Energy (639 HK): Coking Coal Prices To Strengthen With Anglo Accident and more

By Smartkarma Daily Briefs | Daily Briefs, Equity Bottom-Up

In today’s briefing:

Fushan Energy (639 HK): Coking Coal Prices To Strengthen With Anglo Accident
Mineral Resources: Unearthing Value – [Business Breakdowns, EP.172]
Raffles Medical (RFMD SP): Loo Sees A Bargain
Taiwan Tech Weekly: Apple Hikes TSMC Orders on Strong IPhone 16 Hopes; Google Shifts AI Chip to TSMC
Best Of: BlackRock Goes All in on Infrastructure
Tech Supply Chain Tracker (04-Jul-2024): Taiwan to announce offshore wind rules by 3Q24.
Eisai Co Ltd (4523 JP): New Competition Is Coming for Alzheimer’s Disease Drug; No Immediate Threat
Tech Supply Chain Tracker (03-Jul-2024): Taiwan to announce offshore wind rules by 3Q24.
Paradise: Expansion into High End Hotel Likely to Destroy Shareholder Value
India Alcoholic Beverages: Growing in Pints And Quarts. IPO Adds a Valuation Kick

Fushan Energy (639 HK): Coking Coal Prices To Strengthen With Anglo Accident

By Sameer Taneja

Shougang Fushan Resources (639 HK) is a play on strengthening coking coal prices with downside protection due to its net cash reserves of 1.1 bn USD (Vs. Mkt Cap 2.1).
At the lower end of the cost curve, its EBITDA margins have averaged 54% (last 16 years), with its lowest EBITDA number of 19% in FY15.
With an 80% payout, the company trades at a trailing yield of 9% (the average spot price assumed is 1900 RMB/ton).

Mineral Resources: Unearthing Value – [Business Breakdowns, EP.172]

By Business Breakdowns

Mineral Resources is a founder-led diversified infrastructure and mining business that has seen significant growth since its IPO.
The business is divided into two segments, with the infrastructure business, “Infraco,” playing a crucial role in the company’s success.
The company’s CEO believes they are just getting started and can grow to many multiples of their current size.

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

Raffles Medical (RFMD SP): Loo Sees A Bargain

Shares of integrated private healthcare provider Raffles Medical Group (RFMD SP) are currently languishing around a three low. RMG does look attractive compared to regional healthcare plays.
FY23 numbers did no favours – top/bottom line y-o-y contraction of 14.1% and 37.1% respectively. Yet its emerging China ops show promise.
Of interest is Loo Choon Yong, RMG’s founder and major shareholder, who continues adding to his stake, and now holds 54.944%, up from 53.033% at the beginning of the year.

Taiwan Tech Weekly: Apple Hikes TSMC Orders on Strong IPhone 16 Hopes; Google Shifts AI Chip to TSMC

By Vincent Fernando, CFA

Apple Increasing Chip Orders with TSMC — Expecting iPhone 16 Sales to be Much Stronger Than iPhone 15 Thanks to AI
Google Said to be Shifting to TSMC from Samsung for Next Generation AI Mobile Phone Chips
This June 28th piece appears to be timely — Memory Monitor: Micron’s Shares May Be Falling But Results’ Industry Implications Are Positive

Best Of: BlackRock Goes All in on Infrastructure

By Behind the Money

Blackrock is a massive asset management firm with $10 trillion in assets under management
Blackrock recently made a transformative acquisition of Global Infrastructure Partners (GIP)
The deal has wide-ranging effects for the private capital industry and is a wake-up call for Wall Street firms to rethink their strategies and partnerships

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

Tech Supply Chain Tracker (04-Jul-2024): Taiwan to announce offshore wind rules by 3Q24.

By Tech Supply Chain Tracker

Taiwan plans to release offshore wind regulations by 3Q24, boosting the renewable energy sector’s growth and investment opportunities.
Chinese investment in 8.6G OLED technology is boosting the South Korean display equipment industry, leading to potential economic growth.
VinFast’s Indian factory may open earlier than expected, while mobile device suppliers show interest in using edge AI to enhance the market.

Eisai Co Ltd (4523 JP): New Competition Is Coming for Alzheimer’s Disease Drug; No Immediate Threat

By Tina Banerjee

On July 2, Eli Lilly & Co (LLY US) has received FDA approval for its Alzheimer’s disease drug Kisunla, which will compete head-on-head with Eisai Co Ltd (4523 JP)‘s Leqembi.
Efficacy and indications of both the drugs are similar. Price comparison is tricky. However, Kisunla can be stopped when amyloid plaques are removed, which is not the case for Leqembi.
Eisai is not expected to face immediate competition and should comfortably meet Leqembi FY25 revenue target of ¥56.5B, including ¥43.5B from the U.S. Recently, Leqembi has been launched in China.

Tech Supply Chain Tracker (03-Jul-2024): Taiwan to announce offshore wind rules by 3Q24.

By Tech Supply Chain Tracker

Taiwan set to release offshore wind regulations by 3Q24, opening doors for growth and innovation in the industry.
China’s significant investment in OLED technology boosts South Korean display equipment sector, creating opportunities for growth.
Telecoms facing challenges with slow 5G adoption, pushing them to adapt and transform strategies to overcome obstacles.

Paradise: Expansion into High End Hotel Likely to Destroy Shareholder Value

By Douglas Kim

On 2 July, Paradise Co Ltd (034230 KS) announced that it will construct a new high end luxury hotel in Seoul spending about 500 billion won to 550 billion won.
We believe that this construction of the new luxury hotel will have a negative impact on shares of Paradise.
Rather than investing a large sum of money to build a new hotel, many investors would rather have preferred Paradise to increase share buybacks and dividends.

India Alcoholic Beverages: Growing in Pints And Quarts. IPO Adds a Valuation Kick

By Devi Subhakesan

Allied Blenders & Distillers‘ recent IPO spotlighted India’s alcoholic beverage sector, which bucks global trends with strong volume and value growth.
India is the third largest alcoholic beverage market globally, and the second largest for spirits. It is projected to grow at a CAGR of more than 10% over the near-term.
Incumbent players in this highly regulated sector can benefit from strong market moats and evolving growth opportunities if they can effectively navigate the highly regulated business environment.

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Jul 04

Daily Brief Macro: Korean Government Announces Corporate and Dividend Tax Incentives Under Corporate Value Up Program and more

By Smartkarma Daily Briefs | Daily Briefs, Macro

In today’s briefing:

Korean Government Announces Corporate and Dividend Tax Incentives Under Corporate Value Up Program
Preview to the 3rd Plenum of Chinese Communist Party
UK Politics: The Morning After
India: Growth Ensures that the Market Is Not Too Expensive Despite Big 4yr Runup
CX Daily: China’s Ultra-Long Bonds May Test PBOC’s Monetary Toolkit
CrossASEAN Ground Zero – Campina Ice Cream, Mayapada Hospital’s Fundraise, and Xurya’s Solar Allure
Actinver – Macro Daily: Domestic Demand: Investment and Consumption
Navigating Frothy US Equities with S&P Spreads
Gen AI Unleashes Hyper Demand for Data Centers
Business Cycle Watch: Is the US in a recession already? Here are the pros and cons

Korean Government Announces Corporate and Dividend Tax Incentives Under Corporate Value Up Program

By Douglas Kim

The Korean government announced corporate tax incentives for companies that actively increase capital returns to shareholders and also dividend tax incentives and as part of the Corporate Value Up program.
For companies that provide shareholder returns, a 5% corporate tax amount on the increase will be deducted and the tax burden on increased dividends of the company will be reduced.
For dividends under 20mn won, the tax rate will be reduced from 14% to 9%. Investor can choose lower rate (25% or comprehensive tax rate) for dividends exceeding 20mn won.

Preview to the 3rd Plenum of Chinese Communist Party

By Alex Ng

The 3 plenum July 15-18 will likely see some additional measures that will support or stimulate China economy. However, they are unlikely to be game changers.
Major points to observe include unemployment and healthcare benefit boost, Hukou fine tuning, discussion about inheritance tax, and the 2-4 trillion Yuan of buying most unsold homes.
Deepening of reform especially in boosting innovation and upgrading consumption will also be touched on, but there will seem no short-term effective measures.

UK Politics: The Morning After

By Alastair Newton

The incoming Labour government is prioritizing securing a second term from the start.
The promised “change” in their manifesto will be gradual, aiming for a modest boost in economic growth.
More radical measures are anticipated to be implemented in the potential second term.

India: Growth Ensures that the Market Is Not Too Expensive Despite Big 4yr Runup

By Prasenjit K. Basu

Despite more than doubling in the past 4 years, the BSE-Sensex is fairly valued (trailing P/E of 24.04x) relative to its 10-year mean (23.93x)– helped by sustained EPS growth.
The trailing P/E is above the 20-year (21.34x) and 30-year mean (20.4x), but those reflect weaker growth prospects in earlier decades. 10yr mean better reflects new normal 8% RGDP growth.
Net FPI inflows reached a record USD10.14bn in Dec’23, when the market was similarly valued. FPI flows into equity were minimal in H1CY24, but likely to rebound. Stay moderately Overweight.

CX Daily: China’s Ultra-Long Bonds May Test PBOC’s Monetary Toolkit

By Caixin Global

Bonds / In Depth: China’s ultra-long bonds may test PBOC’s monetary toolkit
Badminton /: Teenage Chinese badminton star’s death draws criticism of first responders
Central bank /: PBOC bond-borrowing plan fuels expectation of action to raise yields

CrossASEAN Ground Zero – Campina Ice Cream, Mayapada Hospital’s Fundraise, and Xurya’s Solar Allure

By Angus Mackintosh

This week we look at the potential sale of Campina Ice Cream and the dairy space and the fundraising plans of Mayapada Hospital with M&A picking up in healthcare.
We also take a look at the latest fundraising by Indonesia’s solar operator Xurya as investors are drawn towards sustainable power investments but see potential headwinds.
CrossASEAN Ground Zero is a thematic weekly product that focuses on key Southeast Asian themes and technology trends with a core focus on Indonesia.

Actinver – Macro Daily: Domestic Demand: Investment and Consumption

By Actinver

Fixed investment grew 0.9% MoM, driven by investment in both residential and infrastructure construction.
Investment in imported machinery continued to outperform investment in domestic assets due to the strength of the Mexican peso.
In April, gross fixed investment in the country reached its fourth consecutive month of expansion, supported in the first two months by investment in machinery and equipment, and in the following two by investment in construction.

Navigating Frothy US Equities with S&P Spreads

By Pranay Yadav

Amid all-time highs, the S&P 500 faces recession risks with economic indicators like unemployment and housing starts signaling downturns, impacting broader market stability.
The S&P 500’s growth, heavily reliant on mega-cap tech stocks, contrasts sharply with broader indices, driven by AI advancements and global revenue streams, suggesting market top-heaviness.
Given recession precursors and market frothiness, a spread trade using CME’s Micro E-Mini futures (Long S&P 500 and Short Russell 2000) is proposed to balance potential gains with reduced risks.

Gen AI Unleashes Hyper Demand for Data Centers

By Pranay Yadav

Singapore’s REITs, representing 12% of the equity market, face pressures from rising interest rates and economic downturns, which impact profitability and market performance.
The data center REIT sector is propelled by increasing AI applications, data sovereignty laws, and the growth of cloud services, positioning it for significant expansion.
Digital Core REIT benefits from its presence in key tech hubs and high-performance computing offerings, positioning them to outperform in a tight data center market.

Business Cycle Watch: Is the US in a recession already? Here are the pros and cons

By Andreas Steno

It’s not like we haven’t had this discussion a few times already this cycle, but the recession chatter is staring at us again after the weakest ISM report in years.
The percentage of respondents reporting higher New Orders has weakened to levels only seen during the GFC.
So, is it time to buy puts and canned food and head for the cellars?

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Jul 03

Daily Brief TMT/Internet: NVIDIA Corp, ASM Pacific Technology, Chenqi Technology Limited, Amazon.com Inc, 1Spatial Plc and more

By Smartkarma Daily Briefs | Daily Briefs, TMT/Internet

In today’s briefing:

NVIDIA’s Conundrum…
HSTECH Index Rebalance Preview: ASM Pacific (522) Could Replace Ping An Health (1833); US$1bn Trade
Chenqi Technology IPO – Smallest in Scale, Sentiment Might Not Be the Best
Remain Overweight Large-Cap Growth; Downgrading Materials to Underweight; Software Buys $MSTR $CRWD
1Spatial – Contract wins underpin US growth opportunity

NVIDIA’s Conundrum…

By William Keating

NVIDIA’s data center revenues tripled YoY in CY 2023 and are on track to more than double in CY 2024
When Intel dominated the data centre and minted tens of billions annually, its customers benefited even more, minting hundreds of billions.
If NVIDIA’s business model succeeds, its customers will succeed even more. This will make it extremely difficult for NVIDIA to remain the #1 global market cap stock.

HSTECH Index Rebalance Preview: ASM Pacific (522) Could Replace Ping An Health (1833); US$1bn Trade