Smartkarma Daily Briefs

• Following up on our earlier cross-shareholding notes, in this note we look at Sumitomo Mitsui Financial Group (8316 JP) cross-shareholding.
• SMFG had a stake over US$100m in at least 47 listed Japanese stocks, amounting to a total of around US$17bn.
• In this note, we take a look at its stakes in various companies to see which ones could possibly be candidates for further selldowns.

• CK Asset Holdings (1113 HK) has traded lower recently and shorts have exploded in the stock in the last few months.
• CK Asset Holdings (1113 HK) has underperformed its peers in the last 6 months and trades cheaper on forward PE and price to book.
• There will be passive selling in the stock in just over two weeks. There will be positioning, but not enough to meet passive supply. Expect a further move lower.

• The S&P 500 index tracks the 500 largest names listed in the US and it is one of the most highly-tracked indices in the world.
• The rankings used for the June 2024 index rebal event will be decided based on the opening prices tomorrow (6th June 2024).
• In this insight, we take a final look at the potential ADDs and DELs leading the rankings for the upcoming review.

• Onewo (2602 HK), a leading China property management company with the controlling shareholder being China Vanke (H) (2202 HK), announced a major share repurchase mandate last night.
• The company intends to repurchase its shares in the open market up to HKD5.8bn, which is around 20% of the current market cap. 
• The company is trading at 13x 2024E PE on around 15% net profit growth in 2024E, and at 5% forward dividend yield. 

• Of the six Malaysian banks screened, we keep value play CIMB, whose share price has positive momentum, and quality play Maybank on the buy list
• Value pick CIMB has undemanding valuations whilst second from top in post-provision profitability; it has strong capital adequacy and its cost of risk is now more in line with peers
• Quality pick Maybank also has relatively undemanding PE multiples and PBV ratio, as well as strong balance sheet credentials and improving returns

• Registering record sales and earnings – Q1 FY12/24 results recorded the highest quarterly operating profit to date, demonstrating a brisk start to the FY.
• The core earnings driver was Wealth Consulting, chiefly in Business Succession which closed a large M&A transaction.
• The Real Estate Solutions business also saw strong sales growth (+24.2% YoY), driven by rental income and other real estate transactions, while the core ADVANTAGE CLUB (real estate fractional ownership product) saw flat sales YoY.

Invesco Asia Trust (IAT) posted a one-year NAV total return (TR) to end-May 2024 of 3.8%, below its benchmark return of 8.7%, as some of IAT’s Chinese stock picks de-rated significantly over the period. That said, IAT’s managers remain confident in their current Chinese holdings (and the trust’s overweight position to China/Hong Kong), as they believe that the widespread weakness in local equities has allowed them to build a portfolio of high-quality names at attractive valuations. IAT also remains overweight South Korea, and the trust could benefit from the recently announced government initiative aimed at enhancing the appeal of local equities through reforms to corporate governance and enhanced distributions to shareholders (inspired by the recent success in Japan).

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 Jinmao Holdings
• NagaCorp Ltd
• Citicore Renewable Energy
• Yuexiu Property