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Smartkarma Daily Briefs

Daily Brief India: Avanti Feeds, Ola Electric, FirstCry, Cipla Ltd and more

By | Daily Briefs, India

In today’s briefing:

  • Shrimp Industry Shakeup: Ecuador Crisis Sparks Opportunities for Indian Seafood Companies
  • Ola Electric Pre-IPO – The Negatives – Still a Long Road Ahead with Ample Competition
  • Brainbees Solutions (FirstCry) IPO: The Bear Case
  • Cipla (CIPLA IN): Q3FY24 Result- Continued Growth Trajectory Across Key Markets; Positive Outlook


Shrimp Industry Shakeup: Ecuador Crisis Sparks Opportunities for Indian Seafood Companies

By Nimish Maheshwari

  • Ecuador’s crisis, driven by violence and narco-gang threats, impacts the global seafood supply chain, especially the lucrative shrimp exports sector.
  • Resilient amid challenges, India holds its position as the second-largest global shrimp producer, balancing opportunities and persistent challenges in logistics and competition.
  • Investors urged caution in the Indian seafood boom, yet potential opportunities arise from Ecuador’s supply disruptions, with reduced import duty enhancing India’s competitiveness.

Ola Electric Pre-IPO – The Negatives – Still a Long Road Ahead with Ample Competition

By Sumeet Singh

  • 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 this note, we talk about the not-so-positive aspects of the deal.

Brainbees Solutions (FirstCry) IPO: The Bear Case

By Arun George

  • FirstCry (0172540D IN), India’s largest multi-channel retailing platform for mothers’, babies’ and kids’ products, has filed for a US$700 million IPO. 
  • In Brainbees Solutions (FirstCry) IPO: The Bull Case, we highlighted the key elements of the bull case. In this note, we outline the bear case.
  • The bear case rests on the worrying trend of India’s KPIs, margin pressures, cash burn, and deteriorating balance sheet strength. 

Cipla (CIPLA IN): Q3FY24 Result- Continued Growth Trajectory Across Key Markets; Positive Outlook

By Tina Banerjee

  • In Q3FY24, Cipla Ltd (CIPLA IN) recorded revenue of INR66B, up 14% YoY, and EBITDA margin of 24.2%, driven by double-digit growth across India, North America, and South Africa.
  • North America business reported highest ever revenue of $230M. India revenue is up 12% YoY, supported by growth across branded prescription, trade generics, and consumer health.
  • EBITDA margin for the full year is trending at a higher end of earlier guidance range of 23–24%. Peptide product launches in the U.S. should strengthen near-term growth prospect.

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Daily Brief China: Guoco Group Ltd, Alibaba Group Holding , Road King Infrastructure, Zhangzhou Pientzehuang Pharmaceutical Co., Ltd., Sunny Optical Technology Group and more

By | China, Daily Briefs

In today’s briefing:

  • Guoco (53 HK): Fourth Time’s A Charm?
  • Alibaba (9988 HK) 3Q24 Earnings Preview: Could Be Unimpressive, But Just Reorganized Main Business
  • Morning Views Asia: Lippo Malls Indonesia Retail Trust, Road King Infrastructure
  • Zhangzhou Pientzehuang Pharmaceutical (600436.CH) 2023 Results – Get Ready for More Downside Ahead
  • Morning Views Asia: Sunny Optical Technology Group


Guoco (53 HK): Fourth Time’s A Charm?

By David Blennerhassett

  • Conglomerate Guoco Group (53 HK) has fielded three privatisation Offers from Guoline (the Quek family) over the past twenty years. 
  • Elliott Advisors, then holding 9.72% of shares out, backed the most recent Offer of HK$135/share in November 2018; but it was voted down at a Scheme Meeting. 
  • Elliott has now, surprisingly, exited. This may open the door for a fourth Offer. Shares popped 14% on the news.  

Alibaba (9988 HK) 3Q24 Earnings Preview: Could Be Unimpressive, But Just Reorganized Main Business

By Ming Lu

  • Alibaba Changed its Tmall Taobao business unit from three centers to six departments.
  • We believe the change means Alibaba is moving its focus from cost cut to revenue growth.
  • We set the stock upside at 26% and the price target at HK$91. Buy.

Morning Views Asia: Lippo Malls Indonesia Retail Trust, 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.


Zhangzhou Pientzehuang Pharmaceutical (600436.CH) 2023 Results – Get Ready for More Downside Ahead

By Xinyao (Criss) Wang

  • Pientzehuang’s 2023 results were well below expectations. The performance in 23Q4 was terrible. 2024 performance would continue to be under pressure, without any reversal signals to be seen.
  • In the process of China’s de-financialization, growth potential of assets with strong financial attributes would weaken.Pientzehuang’s ability to raise prices won’t be as strong as rigid-demands such as telecommunications tariffs.
  • Pientzehuang’s stock price performance doesn’t follow traditional TCM companies.It’s not surprising if Pientzehuang’s valuation drops to PE of 15x or even lower. We recommend investors not to rush to bottom-fish.

Morning Views Asia: Sunny Optical Technology Group

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.


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Daily Brief Japan: Canon Inc, TSE Tokyo Price Index TOPIX and more

By | Daily Briefs, Japan

In today’s briefing:

  • Canon (7751) – OK 2023 Results, Better Guidance, Bigger, Longer, Slower Buyback
  • To Raise ROE, Breaking Away from Familiar Relationships and Creating Tension in Management Is Key


Canon (7751) – OK 2023 Results, Better Guidance, Bigger, Longer, Slower Buyback

By Travis Lundy

  • Canon Inc (7751 JP) announced 2023 full-year results on 30 January. Results were mixed. Revenues did OK. Net Profit underperformed expectations. 2024 Net Profit Guidance is 1% higher than consensus.
  • Canon has a 15yr history of one kind of buyback. ¥50bn every time. 19 times in a row. Short (10 weeks max), sharp, executions (executed in 3-5 weeks). Every time. 
  • This time offers a new buyback. ¥100bn. Over the space of a year. That’s only 3% of ADV but the shareholder structure is different than you think it is.

To Raise ROE, Breaking Away from Familiar Relationships and Creating Tension in Management Is Key

By Aki Matsumoto

  • If the ISS ROE criteria, which seems somewhat slow, were to be resumed, many companies would still be below 5%. However, how many companies are feeling threatened?
  • About 40% of the companies have large shareholders holding more than 20% of their shares, which is one reason why many companies do not feel a sense of threat.
  • Domestic institutional investors should apply the Proxy Voting Guidelines more strictly to companies that do not make maximum efforts to increase their ROE.

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Daily Brief Industrials: S.F. Holding, Ryanair Holdings, ATS , Millennium Services Group Ltd and more

By | Daily Briefs, Industrials

In today’s briefing:

  • Monthly Chinese Express Tracker | Volumes Remain Firm | Domestic Pricing Worsens (January 2024)
  • Ryanair – Further Corroboration of Strong Summer Prospects
  • ATS Corporation: Innovation Invasion!” The Game-Changing Products Set to Dominate the Market!
  • Millennium Services Group Ltd – Q2 FY24 Revenue Beat Our Estimates Due to Ad-Hoc Work


Monthly Chinese Express Tracker | Volumes Remain Firm | Domestic Pricing Worsens (January 2024)

By Daniel Hellberg

  • December: strong volume growth, but worsening price declines for STO, Yunda
  • Recent trends in X-border parcel volume growth & pricing moderated in December
  • In 2024, look for SF to continue its outpeformance; STO, Yunda should still lag

Ryanair – Further Corroboration of Strong Summer Prospects

By Neil Glynn

  • Ryanair trimmed its FY24 (March 2024) net income guidance from €1,850m-€2,050m to €1,850m-€1,950m. We cut our forecast 4% to €1,944m.
  • Ryanair guidance on summer pricing is encouraging. It sees fares up low-single digit % yoy at this point but expects an improvement as we near the summer.
  • This commentary follows bullish pricing updates from easyJet, Wizz Air on short haul as well as the US carriers on Transatlantic routes, suggesting strong 2024 pricing on European routes.

ATS Corporation: Innovation Invasion!” The Game-Changing Products Set to Dominate the Market!

By Baptista Research

  • This is our first report on automation solutions provider, ATS Corporation.
  • The company has maintained a consistent performance for the last quarter, with solid order bookings, organic revenue growth, and robust operations across its business.
  • In this report, we have carried out a fundamental analysis of the historical financial statements of the company.

Millennium Services Group Ltd – Q2 FY24 Revenue Beat Our Estimates Due to Ad-Hoc Work

By Research as a Service (RaaS)

  • Human services company Millennium Services Group Ltd (ASX:MIL) has released its Q2 FY24 cash-flow report and a Q2/H1 FY24 revenue update.
  • Total Q2 FY24 revenue increased 17.7% on the pcp, accelerating from Q1 FY24 and above RaaS estimates with ad-hoc revenue the key surprise, up 40% due to additional extended trading hours at retail malls and new security project work.
  • MIL is on track to achieve its FY24 revenue guidance of $300m to $305m. 

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Daily Brief Energy/Materials: Holcim , Natural Gas, Empire Energy, Chariot Limited, Trigon Metals and more

By | Daily Briefs, Energy & Materials Sector

In today’s briefing:

  • Value from US Spin-Off
  • Goodbye El Nino – Hello again La Nina // The case for Bitcoin
  • Empire Energy Group Ltd – Getting Close to the FID Pointy End
  • Chariot Limited (AIM: CHAR):Onshore drilling to start in 1Q24
  • TM: High-Grade Results & Positive Underground Update


Value from US Spin-Off

By Jesus Rodriguez Aguilar

  • Having lagged competitors on share price basis since Holcim/Lafarge merger, on 29 January, Holcim (HOLN SW) announced plans to spin-off and list its North American business in the US.
  • Infrastructure and housing are reponsible for U.S. comparables to trade on 14.7x median EV/NTM Fwd EBITDA, in sharp contrast to 5.4x median EV/NTM Fwd EBITDA of European comparables. 
  • Even if valuing the RoW business at the lower median European multiples, the spin-off should be value accretive. My fair value estimate of CHF 84.47/share represents 25.7% upside.

Goodbye El Nino – Hello again La Nina // The case for Bitcoin

By The Commodity Report

  • “El Nino has peaked and is declining, indicating a return to neutral in the southern hemisphere autumn 2024 (March-June),” the Australian Bureau of Meteorology wrote last week.
  • Even more the institute forecasts that El Nino may completely dissipate by June.
  • For our clients, that won’t come as a surprise as we highlighted this scenario over a couple of weeks.

Empire Energy Group Ltd – Getting Close to the FID Pointy End

By Research as a Service (RaaS)

  • Empire Energy Group Limited (ASX:EEG) is an oil and gas producer/developer with onshore Northern Territory (NT) and US oil/gas production assets.
  • EEG has the largest tenement position in the highly prospective Greater McArthur Basin, which includes the Beetaloo Sub-basin.
  • The investment case continues to build with a FID point on the Carpentaria Pilot Project tantalisingly close. 

Chariot Limited (AIM: CHAR):Onshore drilling to start in 1Q24

By Auctus Advisors

  • Drilling at Loukos in Morocco is expected to start around the end of 1Q24 with Chariot expecting the imminent approval of environment permit for up to 20 drilling locations.
  • The first prospect to be drilled will be Gaufrette (in line with previous indications).
  • Energean and Chariot are negotiation a contract for a drilling rig for the 2024 campaign.

TM: High-Grade Results & Positive Underground Update

By Atrium Research

  • Trigon announced stellar drill results from its ongoing at-surface confirmatory drill campaign.
  • Last week, Trigon Metals Inc. (TM:TSXV) announced strong confirmatory drill results at its Kombat Mine in Namibia.
  • Today’s drill results have successfully confirmed mineralized zones identified from the historical drill results.

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Daily Brief TMT/Internet: Glosel , Hollysys Automation Technologies, Lam Research, Prosus NV, Intel Corp, Mitek Systems, Centralnic and more

By | Daily Briefs, TMT/Internet

In today’s briefing:

  • Japan Activism – Bumpity Bumpity – Lowball Macnica Bid for Glosel (9995) Is Bumped! (+16.3% to ¥750)
  • Hollysys (HOLI US): Critiquing ISS & Glass Lewis’ Critiques
  • LRCX. Recovery Stalls As Outlook Remains Stubbornly Muted
  • Glosel (9995 JP): Murakami’s Tactics Result in Macnica (3132 JP) Bumping to JPY750
  • Naspers (NPN) X Prosus (PRX): Time to Close Out Pairs Trade as Discount Falls to 8.9% from 13.7%
  • Intel 18A is in Sight, Does it Matter?
  • Mitek Systems (MITK) – Monday, Oct 30, 2023
  • Team Internet Group – Solid on all fronts


Japan Activism – Bumpity Bumpity – Lowball Macnica Bid for Glosel (9995) Is Bumped! (+16.3% to ¥750)

By Travis Lundy

  • Two months ago, Macnica Holdings Inc (3132 JP) launched a tender on semiconductor trading house Glosel (9995 JP). OK, but… it was too cheap at 0.71x book. Why?  
  • Glosel is special because it has three main assets. 1) 61% of net assets are inventory (<3mos), 2) 34% of net assets are net receivables (<3mos), 3) 8+% is securities.
  • It took two months to get approvals in place and two months of trading well through terms, and so now the terms have been bumped 16%. Thank Murakami-san.

Hollysys (HOLI US): Critiquing ISS & Glass Lewis’ Critiques

By David Blennerhassett

  • On the 26th January, proxy advisor Glass Lewis issued a report recommending Hollysys (HOLI US) shareholders vote against Ascendent’s merger. Two days later, ISS issued a similar opinion.  
  • Both reports targeted HOLI’s efforts to maximize an Offer price. Elsewhere, some salient points were raised. But overall, there exists an air of naivety in their conclusions.
  • HOLI’s EGM is scheduled for February 8th. The merger consideration of US$26.50/share is in line with, or above, the estimated values of Deutsche Bank’s fairness opinion.

LRCX. Recovery Stalls As Outlook Remains Stubbornly Muted

By William Keating

  • LRCX reported Q423 revenues of $3.76 billion, marginally ahead of the guided midpoint, up 8% QoQ but down 29% YoY
  • Looking ahead, LRCX forecasted Q124 revenues of $3.7 billion, essentially flat sequentially.
  • The memory recovery is happening, but only for HBM and node transitions. No spending on memory capacity additions means limited upside for LRCX. 

Glosel (9995 JP): Murakami’s Tactics Result in Macnica (3132 JP) Bumping to JPY750

By Arun George

  • Glosel (9995 JP) has recommended Macnica Holdings Inc (3132 JP)’s revised tender offer of JPY750 per share, a 16.3% premium to the previous JPY645 offer. 
  • Murakami’s clever manoeuvring to build a 12.67% stake and propose a JPY750 competing offer has forced Macnica to bump its offer. 
  • The minimum acceptance condition requires a 66.7% minority acceptance rate. This acceptance rate is achievable because the offer is attractive and Murakami is supportive. 

Naspers (NPN) X Prosus (PRX): Time to Close Out Pairs Trade as Discount Falls to 8.9% from 13.7%

By Charlotte van Tiddens, CFA

  • On the 17th of January, we published an insight flagging an opportunity to put on a pairs trade long Naspers, short Prosus.
  • Since the start of the year, Naspers’ underperformance relative to Prosus was, in our view, overdone.
  • Naspers has outperformed Prosus by 3.98% over the last 8 trading days. We suggest closing out at current levels.

Intel 18A is in Sight, Does it Matter?

By Douglas O’Laughlin

  • Intel reported earnings last week. Intel was one of my favorite stocks last year, and I wrote about it here in “Is This the Intel Inflection”, where I successfully called the bottom in the stock.
  • It’s worked pretty well, even against the SOXX index since then.
  • I’ll summarize my thesis back then, update you now on what I think about Intel, and write about results and read-throughs.

Mitek Systems (MITK) – Monday, Oct 30, 2023

By Value Investors Club

Key points (machine generated)

  • Mitek specializes in mobile image capture and digital identity verification solutions, with approximately 60% of its business in mobile image capture and 40% in digital identity verification.
  • The company has experienced strong revenue growth, with a compound annual growth rate of 18% to 22% over the past one, three, and five years, reaching approximately $170 million as of September 2023.
  • Mitek has focused on using profits from its mature mobile image capture business to build its identity verification segment, but the mobile deposit business has also grown at a similar rate, limiting portfolio rebalancing in recent years.

This article is sourced from an online content aggregator through publicly available sources and is displayed below for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.


Team Internet Group – Solid on all fronts

By Edison Investment Research

Team Internet’s FY23 trading update confirmed that trading has remained robust with double-digit sales growth across Online Marketing and Online Presence. The total revenue and EBITDA margin were slightly ahead of market consensus and our forecasts, both of which were upgraded in November 2023. Estimated FY23 net debt of US$74m was lower than our US$80.9m forecast, with operating cash conversion reverting to close to 100%. We maintain our FY24 estimates, but these could prove conservative, especially if advertising spend recovers. At 4.8x FY24e EV/EBITDA and 6.4x FY24e P/E, Team Internet’s rating looks low given the company’s growth profile, diversity and growing track record.


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Daily Brief Industrials: S.F. Holding, Ryanair Holdings, ATS , Millennium Services Group Ltd and more

By | Daily Briefs, Industrials

In today’s briefing:

  • Monthly Chinese Express Tracker | Volumes Remain Firm | Domestic Pricing Worsens (January 2024)
  • Ryanair – Further Corroboration of Strong Summer Prospects
  • ATS Corporation: Innovation Invasion!” The Game-Changing Products Set to Dominate the Market!
  • Millennium Services Group Ltd – Q2 FY24 Revenue Beat Our Estimates Due to Ad-Hoc Work


Monthly Chinese Express Tracker | Volumes Remain Firm | Domestic Pricing Worsens (January 2024)

By Daniel Hellberg

  • December: strong volume growth, but worsening price declines for STO, Yunda
  • Recent trends in X-border parcel volume growth & pricing moderated in December
  • In 2024, look for SF to continue its outpeformance; STO, Yunda should still lag

Ryanair – Further Corroboration of Strong Summer Prospects

By Neil Glynn

  • Ryanair trimmed its FY24 (March 2024) net income guidance from €1,850m-€2,050m to €1,850m-€1,950m. We cut our forecast 4% to €1,944m.
  • Ryanair guidance on summer pricing is encouraging. It sees fares up low-single digit % yoy at this point but expects an improvement as we near the summer.
  • This commentary follows bullish pricing updates from easyJet, Wizz Air on short haul as well as the US carriers on Transatlantic routes, suggesting strong 2024 pricing on European routes.

ATS Corporation: Innovation Invasion!” The Game-Changing Products Set to Dominate the Market!

By Baptista Research

  • This is our first report on automation solutions provider, ATS Corporation.
  • The company has maintained a consistent performance for the last quarter, with solid order bookings, organic revenue growth, and robust operations across its business.
  • In this report, we have carried out a fundamental analysis of the historical financial statements of the company.

Millennium Services Group Ltd – Q2 FY24 Revenue Beat Our Estimates Due to Ad-Hoc Work

By Research as a Service (RaaS)

  • Human services company Millennium Services Group Ltd (ASX:MIL) has released its Q2 FY24 cash-flow report and a Q2/H1 FY24 revenue update.
  • Total Q2 FY24 revenue increased 17.7% on the pcp, accelerating from Q1 FY24 and above RaaS estimates with ad-hoc revenue the key surprise, up 40% due to additional extended trading hours at retail malls and new security project work.
  • MIL is on track to achieve its FY24 revenue guidance of $300m to $305m. 

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Daily Brief Health Care: Shenzhen Mindray Bio-Medical Electronics, Avadel Pharmaceuticals PLC, Oryzon Genomics and more

By | Daily Briefs, Healthcare

In today’s briefing:

  • Mindray to Acquire $927 Million Stake in APT Medical – the Logic and Concerns Behind
  • Avadel Pharmaceuticals -Adr (AVDL) – Monday, Oct 30, 2023
  • Oryzon Genomics – KOL event: Offering a real-world solution in BPD


Mindray to Acquire $927 Million Stake in APT Medical – the Logic and Concerns Behind

By Xinyao (Criss) Wang

  • Mindray has encountered bottleneck in performance growth. So, it urgently hopes to bring “new growth stories”. APT Medical’s current growth momentum is commendable, and could also complement Mindray’s product line.
  • We saw poor stock price performance of both after the announcement. High acquisition premium and the possibility that APT Medical’s future performance fall short of expectations are among the reasons. 
  • In fact, both sides got what they wanted. We advise investors to be patient.Perhaps, Mindray would indeed make a breakthrough from this acquisition, which is also a blow to Microport.  

Avadel Pharmaceuticals -Adr (AVDL) – Monday, Oct 30, 2023

By Value Investors Club

Key points (machine generated)

  • AVDL is a pharmaceutical company that has recently launched LUMRYZ, a drug used to treat Narcolepsy, a rare sleeping disorder.
  • LUMRYZ is an improved version of two existing drugs, Xyrem and Xywav, which generate $1.9 billion in annual revenue and have around 16,000 patients on the drug.
  • LUMRYZ aims to address the inconvenience of the unusual dosing profile of Xyrem and Xywav, which require patients to take two doses, with the second dose taken in the middle of the night.

This article is sourced from an online content aggregator through publicly available sources and is displayed below for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.


Oryzon Genomics – KOL event: Offering a real-world solution in BPD

By Edison Investment Research

Oryzon hosted a key opinion leader (KOL) event highlighting the potential of vafidemstat in borderline personality disorder (BPD). The KOLs discussed the limited options for treating BPD, as there are no approved drugs, and the current therapies are often ineffective. While the PORTICO trial did not reach statistical significance on its primary endpoints, vafidemstat was favoured over placebo in all efficacy measures, with statistical significance in two key secondary endpoints. During the event, the KOLs shared their perspectives from working with BPD patients, and claimed that improvements of 25% or over, across any measure of overall severity and agitation/aggression, would mark a clinically meaningful outcome. As this was achieved in PORTICO, we believe that vafidemstat has the potential to be an effective treatment option for this underserved patient population. Oryzon is conducting a detailed analysis of the trial results and plans to request an end-of-Phase II (EoP2) meeting with the FDA in Q224 to discuss a registrational Phase III programme.


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Daily Brief Financials: Bank Of Jinzhou, Evergrande, Utkarsh Small Finance Bank, IDFC First Bank Limited, S&P/ASX 200 and more

By | Daily Briefs, Financials

In today’s briefing:

  • Bank of Jinzhou (416 HK) To Be Taken Private
  • Evergrande’s Wind-Up Ruling Implications
  • Postcard from Ranchi | The Wild Wild East
  • IDFC First Bank (IDFCBK IN): Long-Term Guidance 2.0; Clarity of Thought Is a Source of Comfort
  • EQD | ASX200 Rally: How Much Higher?


Bank of Jinzhou (416 HK) To Be Taken Private

By David Blennerhassett


Evergrande’s Wind-Up Ruling Implications

By Fern Wang

  • Temporary implications of Evergrande’s court ruling on property sector sentiment and other troubled property developers’ restructuring plans
  • Evergrande’s situation is more complicated than that of other troubled developers, as its founder is still under arrest and the company is unable to issue new debts.
  • Cross-Border bankruptcy cases for Chinese companies are still relatively rare, making the recognition and enforcement of Hong Kong bankruptcy judgments by the PRC court uncertain

Postcard from Ranchi | The Wild Wild East

By Pranav Bhavsar


IDFC First Bank (IDFCBK IN): Long-Term Guidance 2.0; Clarity of Thought Is a Source of Comfort

By Raj Saya, CA, CFA

  • IDFC First Bank Limited (IDFCBK IN)  management has provided long-term strategic guidance along with its 3Q24 results, which lays down a clear roadmap for the bank’s progress.
  • The latest results are slightly below estimates but the medium-term factors for our thesis haven’t changed – viz. a strong franchise underscored by heavy retail footprint and incrementally improving unit-economics.
  • We reiterate “Long-term Buy”, with 42% upside in near-term, as the bank continues to realize the benefits of its increasing scale on its earnings profile.

EQD | ASX200 Rally: How Much Higher?

By Nico Rosti

  • The S&P/ASX 200 INDEX started to go up again after just 1 week down, now starting the 2nd week up, we want to evaluate how far it can go.
  • There are a number of Q2 resistance levels just above the 7600 price area for the next 2 weeks, so if the index goes up there it will be overbought.
  • This pattern is bullish, you need to wait for at least 3 or 4 weeks up in a row before going SHORT, unless you love to take risks…

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Daily Brief Consumer: Tsuruha Holdings, Benesse Holdings, Hyundai Motor, Astra International, Foxtron Vehicle Technologies, Hotel Shilla, Mixue Group, E Mart Inc, Ola Electric and more

By | Consumer, Daily Briefs

In today’s briefing:

  • Aeon (8267) Wants To Buy a Bigger Stake in Tsuruha (3391); What Does Tsuruha Want?
  • Benesse (9783) – Tender Offer To Launch; No Change in Terms (¥2,600/Share)
  • Timing of Double Dividends Opportunities in Korea
  • Astra International (ASII IJ) – Opportunity Knocks
  • Quiddity Leaderboard T50/​​​100 Mar 24: Bizlink TDIV Deletion in the Money!
  • Korea: Stocks with Near-Term Potential Passive Flows
  • Benesse Holdings (9783 JP): EQT-Backed MBO Offer Unchanged at JPY2,600
  • Mixue Pre-IPO: Reliable Price Advantage – An On-The-Ground Viewpoint
  • Emart: Double Catalysts Of “Open on Sundays” + Focus on Low P/B Stocks
  • Ola Electric Pre-IPO – The Positives – India’s Answer to Tesla?


Aeon (8267) Wants To Buy a Bigger Stake in Tsuruha (3391); What Does Tsuruha Want?

By Travis Lundy

  • Aeon Co Ltd (8267 JP) owns 13% of Tsuruha Holdings (3391 JP). Oasis owns 13% too. Oasis ran a governance campaign but lost last summer’s AGM. Aeon supported Tsuruha.
  • Tsuruha shares popped in November when Tsuruha said it was looking at its strategic options. BBG reported PE firms were circling. Now Aeon wants to buy Oasis’ stake. 
  • That would put Aeon in a near-blocking position without consolidating. And it would mean minorities stayed minorities. The real question is whether this is what Tsuruha wants.

Benesse (9783) – Tender Offer To Launch; No Change in Terms (¥2,600/Share)

By Travis Lundy

  • The “MBO” for Benesse traded through terms from the 6th day post-announcement onwards. 37% total traded since announcement, 20% since that 6th day. 
  • The deal as announced 10 November was entirely too cheap. It was somewhat egregious if you look through the balance sheet. Plus there was a free museum on top.
  • But to no avail. There is no bump. There have been no activists peeping above the parapet (yet). It isn’t impossible to block, but if nobody shows their face…

Timing of Double Dividends Opportunities in Korea

By Douglas Kim

  • The change in the dividend payment system in Korea in 2024 is likely to result in some attractive “double dividends” opportunities.
  • According to the Korea Exchange, there are seven stocks that have changed their dividend record dates policy last year and also that pay quarterly dividends. 
  • Hyundai Motor (005380 KS) (common) provides a dividend yield of 5.8% and Hyundai Motor (005385 KS) (pref) provides a dividend yield of 9.6% at current prices.

Astra International (ASII IJ) – Opportunity Knocks

By Angus Mackintosh

  • Astra International has seen an aggressive sell-off on fears of increasing competition from the EV space as more operators enter the Indonesian auto market, with the most recent being BYD.
  • The company has successfully held its market share at 56% in FY2023 and has launched several EV models, mostly hybrids,  as adoption levels for BEVs remain low.
  • Management remains confident that FY2024 will be a stable year for both 2W and 4W, with overall EPS only set to decline slightly but valuations are now compelling.

Quiddity Leaderboard T50/​​​100 Mar 24: Bizlink TDIV Deletion in the Money!

By Janaghan Jeyakumar, CFA

  • In this insight, we take a look at the names leading the race to become ADDs/DELs for the T50 and T100 Indices for the March 2024 index rebal event.
  • I expect one change for the T50 index and two other changes for the T100 index.
  • One of the T100 changes also has implications for the TDIV index flows in March 2024.

Korea: Stocks with Near-Term Potential Passive Flows

By Brian Freitas


Benesse Holdings (9783 JP): EQT-Backed MBO Offer Unchanged at JPY2,600

By Arun George

  • Benesse Holdings (9783 JP) notes that the pre-condition for EQT-backed MBO has been satisfied. The offer price remains unchanged at JPY2,600 per share, a 45.1% premium to the undisturbed price.
  • EQT has noted a possibility of extending the tender offer close from 4 to 13 March, which suggests a limited appetite to bump the offer.
  • The shares are trading 1.3% above terms. A 51% minority acceptance rate and no competing bidder indicate an unfavourable risk/reward profile – a 27% downside on deal break. 

Mixue Pre-IPO: Reliable Price Advantage – An On-The-Ground Viewpoint

By Ming Lu

  • We believe Mixue’s low prices are fit for the current weak economy.
  • Any “freshly made” price lower than Mixue’s will compete with bottled drinks.
  • We also believe low rental is the key for Mixue’s low prices.

Emart: Double Catalysts Of “Open on Sundays” + Focus on Low P/B Stocks

By Douglas Kim

  • E Mart Inc (139480 KS) has been a strong outperformer this year (up 5.6% YTD) versus KOSPI which is down 5.8% in the same period. 
  • We expect E Mart to outperform the market in the rest of 2024 driven by two major factors including “open on Sundays” policy and focus on low P/B stocks. 
  • E Mart is trading at P/B of 0.2x versus Coupang which is trading at P/B of 8.3x. E Mart is more attractive than Coupang, especially considering the recent catalysts. 

Ola Electric Pre-IPO – The Positives – India’s Answer to Tesla?

By Sumeet Singh

  • 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 this note, we talk about the positive aspects of the deal.

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