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Smartkarma Daily Briefs

Mar 07
0

Daily Brief South Korea: Kumho Petro Chemical, Shinhan Financial, Angel Robotics and more

By | Daily Briefs, South Korea

In today’s briefing:

  • Interpreting Kumho Petro Chemical’s Unexpected Move to Cancel Treasury Shares
  • Shinhan Financial Group Placement – Recent Selldowns Have Held up Since, Momentum Is Strong as Well
  • Kumho Petrochemical – A Significant Shares Cancellation Announcement
  • Block Deal Sale of About 400 Billion Won of Shinhan Financial by EQT Partners
  • Angel Robotics: IPO Preview

Interpreting Kumho Petro Chemical’s Unexpected Move to Cancel Treasury Shares

By Sanghyun Park

  • Kumho Petro Chemical (011780 KS) intends to retire 50% of its common shares, totaling 2,624,417 shares, starting from the 2024 fiscal year until the 2026 fiscal year.
  • With the annual general meeting nearing, NPS hasn’t revealed its support, causing unease for Park Chan-gu. Considering NPS’s obligation to the Value-Up policy, cancellation seems inevitable for Park Chan-gu.
  • Whether the battle persists hinges on NPS’s stance. If NPS backs Park Chan-gu, their stake surpassing 25% could deter the opposition’s financial strength. Conversely, NPS’s neutrality could escalate the battle.

Shinhan Financial Group Placement – Recent Selldowns Have Held up Since, Momentum Is Strong as Well

By Clarence Chu

  • EQT (EQT SS) , via Supreme, is looking to raise US$311m from selling its stake in Shinhan Financial (055550 KS).
  • Momentum on the stock has been strong over the past few months, and the recent selldowns in the stock have held up by the end of the week.
  • The share sale here will be a cleanup one, and a small one to digest at just 5.3 days of ADV. 

Kumho Petrochemical – A Significant Shares Cancellation Announcement

By Douglas Kim

  • After the market close on 6 May, Kumho Petrochem announced a significant shares cancellation program which is likely to have a positive impact on its share price. 
  • The company announced that it will cancel 430 billion won worth of its common shares in the next three years, representing nearly 10.5% of its market cap.
  • Park Chul Wan, nephew of Kumho Petrochem Chairman Park Chan Koo, has been very vocal about the need for Kumho Petrochem to improve its corporate governance in past several years.

Block Deal Sale of About 400 Billion Won of Shinhan Financial by EQT Partners

By Douglas Kim

  • EQT Partners announced that it is selling all of its remaining shares in Shinhan Financial for about 400 billion won in a block deal sale.
  • The block deal sale price range is expected to be 43,776 won to 44,688 won, representing 2% to 4% discount to the closing price on 6 March (45,600 won).
  • We would take the deal. The block deal discount is reasonable and Shinhan Financial continues to have attractive valuations and dividend yield despite recent share price appreciation. 

Angel Robotics: IPO Preview

By Douglas Kim

  • Angel Robotics is getting ready to complete its IPO in KOSDAQ in March. The IPO price range is from 11,000 won to 15,000 won. 
  • The IPO offering amount is from 17.6 billion won to 24 billion won. At the IPO price range, the company’s valuation ranges from 154 billion won to 210 billion won. 
  • Angel Robotics is likely to be compared to Doosan Robotics and Rainbow Robotics. 

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Mar 07
0

Daily Brief India: Bajaj Finance Ltd, Greentown China and more

By | Daily Briefs, India

In today’s briefing:

  • Trouble in Paradise | India Credit Landscape & Wrath of the Regulator
  • Morning Views Asia: Adani Green Energy, Greentown China

Trouble in Paradise | India Credit Landscape & Wrath of the Regulator

By Pranav Bhavsar

  • India’s Credit Landscape has changed and is facing structural and regulatory challenges.
  • The Indian regulator (RBI), particularly in its oversight of underwriting practices and the behavior of Non-Banking Financial Companies (NBFCs), is commendably proactive, positioning it ahead of the curve.
  • We expect more such steps in other parts of the credit funnel. The recent crack down along with the stock underperformance is here to stay and possibility intensify. 

Morning Views Asia: Adani Green Energy, Greentown China

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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Mar 07
0

Daily Brief United States: ARM Holdings, Silver, Forward Air, Hewlett Packard Enterprise , International Public Partnerships, Vera Bradley, Wheat, CNX Resources , Eastern Bankshares and more

By | Daily Briefs, United States

In today’s briefing:

  • ARM Holdings (ARM US): Lock up Expiry on 12 March
  • Silver: Is a Breakout Imminent?
  • Forward Air (FWRD US | BUY | TP:USD59.5): A Toad, but There Is a Prince Inside
  • Hewlett Packard Enterprise (HPE) – Wednesday, Dec 6, 2023
  • International Public Partnerships – Capital markets day
  • VRA: 4Q Preview: Setting Up the Vision; Reiterate Buy Rating, $10 PT
  • Lower prices and uncertain demand: navigating choppy waves of wheat markets in 2024
  • CNX Resources: Hit the Gas – [Business Breakdowns, EP.152]
  • Eastern Bankshares Inc (EBC) – Wednesday, Dec 6, 2023

ARM Holdings (ARM US): Lock up Expiry on 12 March

By Arun George

  • Softbank Group (9984 JP)’s 180-day lock-up period on its 89.75% ARM Holdings (ARM US) shareholding expires on 12 March. SoftBank’s stake is worth US$124 billion.
  • SoftBank will likely monetise its ARM stake using the Alibaba (ADR) (BABA US) playbook. This playbook uses prepaid forward contracts to raise capital with eventual settlement through shares. 
  • ARM is currently trading 2.6x its IPO price on AI-driven hype. ARM trades at a premium multiple to NVIDIA Corp (NVDA US), despite forecasted lower growth and margin.  

Silver: Is a Breakout Imminent?

By Untying The Gordian Knot

  • Gold and Silver have remained unresponsive to lower rates, escalating geopolitical risks and higher China and India seasonal demand.
  • Notably, early February saw the emergence of two contrarian signals that merited closer attention.
  • While these signals are not foolproof market timing tools, they warrant attention when they align with technical support levels within an established consolidation pattern.

Forward Air (FWRD US | BUY | TP:USD59.5): A Toad, but There Is a Prince Inside

By Mohshin Aziz

  • A highly unpopular acquisition driving investors and sell-side analysts up the wall. Forward Air is OVERSOLD on almost all technical indicators and valuations are the lowest in its history  
  • Our analysis suggests it is not all that bad, the business will still be profitable and generate positive free cash flow 
  • Our fair value of USD59.50 (+97% UPSIDE) is derived by 2x current Book Value. A potential double-bagger, will be rewarding for the patient investors     

Hewlett Packard Enterprise (HPE) – Wednesday, Dec 6, 2023

By Value Investors Club

Key points

  • HPE is a $21.5 billion provider of networking, servers, and storage products, with a focus on higher quality businesses and services
  • The company generates cash from operations and divestitures, presenting an attractive investment opportunity with potential for upside to $29/share or a 35% IRR through 10/2025
  • HPE’s recent Security Analysts Meeting emphasized its business segments, particularly highlighting opportunities in the Compute segment for AI inferencing needs and Proliant Gen 11 servers

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

International Public Partnerships – Capital markets day

By Edison Investment Research

INPP recently held a strategy day. This provided a detailed overview of its business and the outlook for a continuation of the strong, predictable, inflation-linked returns that have been generated since the company listed in 2006. INPP’s operational and financial performance is at odds with its discount to NAV and the company has a clear strategy to address this. No new financial details were provided ahead of INPP’s 2023 results, due to be published on 28 March.

VRA: 4Q Preview: Setting Up the Vision; Reiterate Buy Rating, $10 PT

By Small Cap Consumer Research

  • We are reiterating our Buy rating, $10 price target and projections for Vera Bradley with the company reporting 4QFY24 (January) results before the open next Wednesday.
  • We look to the 4Q call for management to provide even more detail on the material changes to the company, as CEO Jackie Ardrey and her team begin to take full control of the shopping and product experience.
  • We believe Vera Bradley has become increasingly more relevant and appealing to a wider customer base, and the company is positioned, with a cash rich and materially leaner balance sheet, to fund potential higher-margin growth drivers going forward.

Lower prices and uncertain demand: navigating choppy waves of wheat markets in 2024

By Commodities Focus

  • Global wheat prices have been defying expectations and have continued on a downward trend since the start of 2024
  • Russia is expected to have a high wheat production of over 90 million tons in 2024 due to favorable growing conditions
  • Ukrainian wheat exports are expected to improve with better logistics and an estimated production of nearly 20.5 million tons in the 2024-25 season

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

CNX Resources: Hit the Gas – [Business Breakdowns, EP.152]

By Business Breakdowns

  • CNX is an ENP exploration and production business focusing on natural gas with a long history in the energy sector
  • CNX evolved from a coal company to a natural gas producer under new management led by CEO Nick
  • The current business model focuses on monetizing assets, separating coal business, and leveraging the productive Marcellus shale for low-cost advantage.

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

Eastern Bankshares Inc (EBC) – Wednesday, Dec 6, 2023

By Value Investors Club

  • Merger with Cambridge Bancorp seen as strategic move to bolster asset management business
  • Market initially reacted negatively to merger announcement
  • Both EBC and CATC stocks have started to bounce back, reflecting overall recovery of bank stocks; Eastern Bankshares remains significant player in industry with strong asset base

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

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Mar 07
0

Daily Brief Japan: Fast Retailing, Sakura internet, Japan Airlines, Daiichi Kigenso Kagaku Kogyo and more

By | Daily Briefs, Japan

In today’s briefing:

  • Sep24 Nikkei 225 Rebal – 2 ADDs, 2 DELETEs Maybe, but Rebals Tougher, and Fastie+TEL Are the FUN
  • Sakura Internet (3778) | Blossoming in the Cloud?
  • Japanese Airlines – ANA’s Margin Outperformance Poses Big Questions for JAL
  • Daiichi Kigenso Kagaku-Kogyo (4082) – Awaiting Solid Execution

Sep24 Nikkei 225 Rebal – 2 ADDs, 2 DELETEs Maybe, but Rebals Tougher, and Fastie+TEL Are the FUN

By Travis Lundy

  • Now that the March 2024 Nikkei 225 Rebalance is decided, we have a model for the Sep 2024 Review. As previously discussed on Smartkarma, actual name changes get tough now. 
  • As of now, there should be two ADDs and two DELETEs. They might not occur. But there are two other situations which create interesting dynamics around big names. 
  • The dynamics of Fast Retailing and Tokyo Electron promise more fun than the actual name changes in September 2024. It impacts how you trade Nikkei vs TOPIX and tech internals.

Sakura Internet (3778) | Blossoming in the Cloud?

By Mark Chadwick

  • Sakura Internet, a Japanese cloud provider, has seen a significant surge in stock price and market capitalization due to entry into AI cloud services.
  • The company plans to invest in NVIDIA H100 GPUs for AI servers, expecting substantial demand but with uncertain revenue and profitability projections.
  • Risks include concentrated ownership, lack of analyst coverage, potential shareholder pressure, and competition from larger cloud providers like AWS with advanced AI computing capabilities.

Japanese Airlines – ANA’s Margin Outperformance Poses Big Questions for JAL

By Neil Glynn

  • We refresh estimates for ANA and JAL, and highlight we think the strength of FY24 makes it difficult for ANA to avoid an earnings decline in FY25.
  • However, ANA’s superior recovery to JAL poses bigger questions for JAL as it revisits its medium term plan on 21 March
  • Our deep dive on margin management at each carrier suggests a revenue problem rather than a cost problem at JAL; but without revenue improvements, it will have to cut costs

Daiichi Kigenso Kagaku-Kogyo (4082) – Awaiting Solid Execution

By Astris Advisory Japan

  • Q1-3 FY3/24 results were in line with company guidance, reflecting the strategic importance for DKK to scale its new growth initiatives.
  • Ongoing positive developments related to semiconductor, secondary battery, and biomaterial applications were offset by weakness in electronics and the mature profile of the core automotive catalyst business.
  • Operating a business model that is externally driven (such as FX movements and raw materials market pricing), the company has disclosed ROIC targets that coincide with its current 10-year plan for FY3/32. 

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Mar 06
0

Most Read: Socionext, ZOZO Inc, EcoPro Materials, Kakaopay , Titan Co Ltd, Vinda International, CELSYS, Alumina Ltd, Abacus Storage King, Celltrion Inc and more

By | Daily Briefs, Most Read

In today’s briefing:

  • Mar24 Nikkei 225 Rebal – Socionext, Disco, Zozo IN; US$4bn One-Way; More Impactful Than It Looks
  • Nikkei 225 Index Rebalance: DISCO, Socionext, ZOZO In; PacMetals, Sumitomo Osaka, Takara Holding Out
  • May Lockup Release & April SSF Listing May Lead to Weird Trading Dynamics for Ecopro Materials
  • Block Deal Sale of 2.2% of Kakao Pay by Alipay
  • NIFTY100 Low Volatility 30 Index Rebalance Preview: Titan Could Replace IOCL
  • Vinda (3331 HK): That’s A Wrap As Pre-Cons Done
  • TOPIX Inclusions: Who Is Ready (Mar 2024)
  • Alumina (AWC AU): Further Thoughts on Alcoa’s Proposal
  • MVIS Australia A-REITs Index Rebalance Preview: One Deletion & Capping Changes
  • Locals Driving Corporate Reforms and 10 Korean Companies Recently Announcing Share Cancellations

Mar24 Nikkei 225 Rebal – Socionext, Disco, Zozo IN; US$4bn One-Way; More Impactful Than It Looks

By Travis Lundy

  • The changes to the Nikkei 225 Average for the March 2024 Review were announced today after the close. A little earlier than I expected. 
  • Socionext, Disco, Zozo IN; Takara Hldgs, Sumi Osaka Cement, Pacific Metals OUT. Nitori PAF increase. US$4bn+ to trade one way on 29Mar close. One interesting surprise. 
  • Overall more impactful than it looks. And it changes the front-end arithmetic on Fast Retailing (9983 JP). There may be fun on the DELETEs.

Nikkei 225 Index Rebalance: DISCO, Socionext, ZOZO In; PacMetals, Sumitomo Osaka, Takara Holding Out

By Brian Freitas

May Lockup Release & April SSF Listing May Lead to Weird Trading Dynamics for Ecopro Materials

By Sanghyun Park

  • May 17th, all eyes on EcoPro Materials for a buzzed-about lockup release. BRV Capital holds 24.5% stake, 17M shares. Lockup ends May 16th; they’re free to sell off without constraints.
  • Apparently, they’re eager to cash out, with a profit margin around 30 times and 7 years invested. Many at Yeouido bet they’ll sell out once the lockup’s over.
  • We might start building a shorting position with futures targeting this lockup release from April 22nd. This could stir up some weird backwardation, which could give us another trading opportunity.

Block Deal Sale of 2.2% of Kakao Pay by Alipay

By Douglas Kim

  • After the market close on 5 March, it was reported that Alipay will sell a 2.2% stake (2.95 million shares) in Kakaopay (377300 KS) in a block deal sale.
  • A key component of this block deal sale is that there will be a lock up period of 90 days post the sale date.
  • We would avoid this block deal sale. There is a high probability of Kakao Pay’s share price falling below the block deal price of 38,380 won after 90 days. 

NIFTY100 Low Volatility 30 Index Rebalance Preview: Titan Could Replace IOCL

By Brian Freitas

  • With the review period complete, Titan Co Ltd (TTAN IN) should replace Indian Oil Corp (IOCL IN) in the Nifty100 Low Volatility 30 Index at the close on 27 March.
  • Constituent changes, volatility changes and capping changes will result in one-way turnover of 13.2% resulting in a one-way trade of INR 4.2bn.
  • The flows on the stocks are not very large but there will be same side and offsetting flows from other index trackers at the same time.

Vinda (3331 HK): That’s A Wrap As Pre-Cons Done

By David Blennerhassett

  • On the 15 December 2023, the Tanoto family emerged with a HK$23.50 pre-conditional Offer for Vinda (3331 HK). PRC regulatory approval to one side, this Offer was a done deal.
  • Those regulatory approvals have now been satisfied. The Composite Doc will be dispatched on or before the 11th March, at which time the Offer will be open for acceptances. 
  • With a 50% minimum acceptance condition and irrevocables of 72.624% (plus Tanoto’s 7.69% direct stake), this should turn unconditional on or before the 20th March

TOPIX Inclusions: Who Is Ready (Mar 2024)

By Janaghan Jeyakumar, CFA

  • Quiddity’s “Who is Ready” series of insights aims to objectively identify names listed on the Tokyo Stock Exchange that are potential additions to the TOPIX Index in future.
  • There were no Section Transfers announced in January or February so currently there are no live TOPIX Inclusion events but there are some pre-event names to be monitored closely.
  • The upcoming TOPIX flows in end-April 2024 will be more complicated than the other quarterly rebalances as there will be more flows due to the annual liquidity factor review.

Alumina (AWC AU): Further Thoughts on Alcoa’s Proposal

By Arun George

  • I have received several questions from readers on Alcoa (AA US)’s non-binding proposal for Alumina Ltd (AWC AU) in the context of the current gross spread of 9.2%. 
  • The questions primarily concerned Citic Resources Holdings (1205 HK) voting intentions, the probability of a bump and the likelihood of Aloca shareholders supporting the transaction. 
  • CITIC Resources’ lack of public endorsement of the transaction is due to HKEx listing requirements and not an indication of a NO vote risk.  

MVIS Australia A-REITs Index Rebalance Preview: One Deletion & Capping Changes

By Brian Freitas

Locals Driving Corporate Reforms and 10 Korean Companies Recently Announcing Share Cancellations

By Douglas Kim

  • In a recent discussion with a client, one of the questions that was raised was regarding the impact the local investors are having on the corporate governance reforms in Korea.
  • The number of local investors in the Korean stock market has jumped in the past few years from 5.3 million in 2017 to 14.4 million in 2022.
  • All in all, I think Korea is about 3-5 years behind Japan in various corporate governance reforms. So it has a lot of catching up to do.

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Mar 06
0

Daily Brief Industrials: Tuhu Car , Gold and more

By | Daily Briefs, Industrials

In today’s briefing:

  • Tuhu Car Lock-Up Expiry – Would Need Some Selling to Improve Liquidity when US$1.5bn Comes Unlocked
  • Gold Breaking Out Above 3.5-Year Resistance as the U.S. Dollar (DXY) And Treasury Yields Roll Over

Tuhu Car Lock-Up Expiry – Would Need Some Selling to Improve Liquidity when US$1.5bn Comes Unlocked

By Clarence Chu

  • Tuhu Car (9690 HK) was listed in Hong Kong on 26th Sept 2023 after raising US$151m. The IPO had been a 100% primary offering.
  • Tuhu is an integrated online and offline platform for automotive services in China.
  • Trading with a very small float of 1.8%, in its upcoming six-month lockup expiry, >90% of Tuhu’s pre-IPO investors, cornerstones and management combined stakes will come off six-month lockup expiry.

Gold Breaking Out Above 3.5-Year Resistance as the U.S. Dollar (DXY) And Treasury Yields Roll Over

By Joe Jasper

  • The number of risk-on signals continues to grow, while risk-off signals remain virtually non-existent. We will be sure to point it out when this dynamic starts to change
  • In the meantime, we want to continue riding this bull market higher, and our bullish outlook on the S&P 500, Russell 2000, and Nasdaq 100 (since early-November 2023) remains intact.
  • Gold is breaking out of a 3.5-year base to all-time closing highs — buy. Silver is breaking out above a 3-month base at $23.50. Fueled by toppy DXY and rates

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Mar 06
0

Daily Brief Utilities: Talen Energy and more

By | Daily Briefs, Utilities Sector

In today’s briefing:

  • TLNE: Nuclear Shareholder Value

TLNE: Nuclear Shareholder Value

By Hamed Khorsand

  • TLNE announced the sale of Cumulus Data for a valuation higher than we were expecting and includes a long-term power purchasing agreement
  • TLNE’s management has also mentioned an ongoing sales process for TLNE’s assets in Texas, which could generate additional value.
  • TLNE sold Cumulus Data for $650 million to Amazon Web Services (“AWS”). TLNE sold the assets the Company had situated adjacent to Susquehanna nuclear power plant

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Mar 06
0

Daily Brief Energy/Materials: Alumina Ltd, Ercros , Gold Fields Ltd, Hellenic Petroleum Sa and more

By | Daily Briefs, Energy & Materials Sector

In today’s briefing:

  • Alumina (AWC AU): Further Thoughts on Alcoa’s Proposal
  • Bondalti/Ercros: Fair Offer
  • Feb Rebalance – JSE Auction Analytics (SA Upweighted in ACWI and EM)
  • HELLENiQ ENERGY – Dividend shows confidence in future

Alumina (AWC AU): Further Thoughts on Alcoa’s Proposal

By Arun George

  • I have received several questions from readers on Alcoa (AA US)’s non-binding proposal for Alumina Ltd (AWC AU) in the context of the current gross spread of 9.2%. 
  • The questions primarily concerned Citic Resources Holdings (1205 HK) voting intentions, the probability of a bump and the likelihood of Aloca shareholders supporting the transaction. 
  • CITIC Resources’ lack of public endorsement of the transaction is due to HKEx listing requirements and not an indication of a NO vote risk.  

Bondalti/Ercros: Fair Offer

By Jesus Rodriguez Aguilar

  • Ercros (ECR SM), a venerable Spanish chemical company has received a €3.6/share, cum dividend, offer from Bondalti. The premium is 40.6%, implied equity €329.17 million and implied EV €421 million.
  • The offer represents 6x EV/Fwd NTM EBITDA, typical mid-cycle multiple for commodity chemicals, 12.9x Fwd P/E. The offer price accounts for an improving H2. The shares suffer from low liquidity.
  • Therefore the top shareholders will be glad to cash in. How long does the Spanish government take to authorise FDI will be the primary concern. Gross spread is 4.7%. Long.

Feb Rebalance – JSE Auction Analytics (SA Upweighted in ACWI and EM)

By Charlotte van Tiddens, CFA

  • Indices were rebalanced in the closing auction last week Thursday.

  • Turnover on the JSE for the day was R25.6bn, R12.9bn traded in the closing auction (50%).

  • Turnover at the November rebalance was R40.6bn. 

HELLENiQ ENERGY – Dividend shows confidence in future

By Edison Investment Research

ELPE reported its final results on 29 February. Adjusted net income of €0.6bn was lower than our forecast of €0.64bn. A positive surprise was that the board is recommending a final dividend of €0.60 per share, which was above our expectation of €0.30 per share. We believe this reflects management’s confidence in the current shape of the business. The balance sheet has been strengthened year-on-year, with net debt reduced from €1.94bn (at end-FY22) to €1.63bn. Our forecasts are under review.

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Mar 06
0

Daily Brief TMT/Internet: CELSYS, Sea , ARM Holdings, WRKR, Keywords Studios, Shenandoah Telecommunications Company and more

By | Daily Briefs, TMT/Internet

In today’s briefing:

  • TOPIX Inclusions: Who Is Ready (Mar 2024)
  • Sea Ltd: No Nearer to Stable Profitability Than Before
  • Sea Ltd (SE US) – Scalability Winning Battles
  • ARM Holdings IPO Lock-Up Expiry – A US$127bn Lockup Release Might Be Too Tempting to Pass On
  • H1 EBITDA loss halves, +ive EBITDA forecast for 2H
  • Keyword Studios (KWS ) – Tuesday, Dec 5, 2023
  • SHEN: Winning Trade, Upgrade to Buy
  • Wrkr Limited – H1 EBITDA Loss Halves, +ive EBITDA Forecast for 2H

TOPIX Inclusions: Who Is Ready (Mar 2024)

By Janaghan Jeyakumar, CFA

  • Quiddity’s “Who is Ready” series of insights aims to objectively identify names listed on the Tokyo Stock Exchange that are potential additions to the TOPIX Index in future.
  • There were no Section Transfers announced in January or February so currently there are no live TOPIX Inclusion events but there are some pre-event names to be monitored closely.
  • The upcoming TOPIX flows in end-April 2024 will be more complicated than the other quarterly rebalances as there will be more flows due to the annual liquidity factor review.

Sea Ltd: No Nearer to Stable Profitability Than Before

By Oshadhi Kumarasiri

  • Sea (SE US) has completed a full cycle of growth followed by a phase of profitability improvements/cost-cutting.
  • Although substantial cost reductions have been implemented, these efforts have mainly focused on fixed costs.
  • With marketing efficiency unchanged and significant improvements in gross margin difficult, the company appears no closer to achieving stable profitability than it initially was.

Sea Ltd (SE US) – Scalability Winning Battles

By Angus Mackintosh

  • Sea Ltd (SE US) released 4Q2023 and FY2023 results with a full-year net profit but another loss in 4Q but QoQ improvements for e-commerce and digital financial services. 
  • E-Commerce core market growth rates where impressive, with strong growth momentum with Brazil seeing large profitability gains, whilst overall Shopee is gaining share with the additional benefits from greater scale.  
  • Digital Financial Services saw a significant uptick in its loan book and profitability, whilst management pointed toward 2H2024 profitability for Shopee. Management is pointing towards 2024 being another profitable year. 

ARM Holdings IPO Lock-Up Expiry – A US$127bn Lockup Release Might Be Too Tempting to Pass On

By Sumeet Singh

  • Softbank raised around US$4.9bn via selling some of its stake in ARM Holdings (ARM US)’ US IPO. Its remaining 90% stake will be released from its IPO linked lockup soon.
  • ARM develops and licenses high-performance, low-cost, and energy-efficient CPU products and related technology, which is used by semiconductor companies and OEMs to develop their own products.
  • In this note, we talk about the upcoming lock-up expiry and possible deal dynamics.

H1 EBITDA loss halves, +ive EBITDA forecast for 2H

By Research as a Service (RaaS)

  • Wrkr Ltd (ASX:WRK) offers compliance solutions for Australian superannuation contributions and payroll including member onboarding, super payments, messaging and employee validation.
  • WRK has reported a H1 FY24 adjusted EBITDA loss of $0.53m, half that of H1 FY23 and in line with RaaS estimates.
  • The result benefitted from both operating leverage (43% revenue growth against a 6% increase in operating costs) and some reallocation of employee costs to capitalised product development.

Keyword Studios (KWS ) – Tuesday, Dec 5, 2023

By Value Investors Club

Key points

  • Keyword Studios is the largest videogame outsourcing company globally with a strong track record of organic growth and strategic acquisitions
  • Despite concerns about AI and market slowdown, the company remains well-positioned for long-term success
  • Expected to continue delivering high single-digit to low double-digit organic growth and potential for compound annual growth rate of 15% over the next five years, making it an attractive investment opportunity

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

SHEN: Winning Trade, Upgrade to Buy

By Hamed Khorsand

  • SHEN announced the sale of its tower assets for a price that would equivalently pay for the purchase of Horizon Telecom, effectively creating an asset trade that creates considerably value.
  • SHEN has unlocked value by selling assets that are expected to experience a decline in revenue after this year for assets that should realize revenue and adjusted EBITDA growth
  • The growth SHEN is purchasing without the need of cash financing should have a positive impact on SHEN’s valuation.

Wrkr Limited – H1 EBITDA Loss Halves, +ive EBITDA Forecast for 2H

By Research as a Service (RaaS)

  • Wrkr Ltd (ASX:WRK) offers compliance solutions for Australian superannuation contributions and payroll including member onboarding, super payments, messaging and employee validation.
  • WRK has reported a H1 FY24 adjusted EBITDA loss of $0.53m, half that of H1 FY23 and in line with RaaS estimates. The result benefitted from both operating leverage (43% revenue growth against a 6% increase in operating costs) and some reallocation of employee costs to capitalised product development.
  • We forecast positive H2 FY24 EBITDA on the back of continued operating leverage, and in particular significant Hong Kong implementation fees (estimated at $1.4m), higher float interest and continued cost control.

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Mar 06
0

Daily Brief Industrials: Tuhu Car , Gold and more

By | Daily Briefs, Industrials

In today’s briefing:

  • Tuhu Car Lock-Up Expiry – Would Need Some Selling to Improve Liquidity when US$1.5bn Comes Unlocked
  • Gold Breaking Out Above 3.5-Year Resistance as the U.S. Dollar (DXY) And Treasury Yields Roll Over

Tuhu Car Lock-Up Expiry – Would Need Some Selling to Improve Liquidity when US$1.5bn Comes Unlocked

By Clarence Chu

  • Tuhu Car (9690 HK) was listed in Hong Kong on 26th Sept 2023 after raising US$151m. The IPO had been a 100% primary offering.
  • Tuhu is an integrated online and offline platform for automotive services in China.
  • Trading with a very small float of 1.8%, in its upcoming six-month lockup expiry, >90% of Tuhu’s pre-IPO investors, cornerstones and management combined stakes will come off six-month lockup expiry.

Gold Breaking Out Above 3.5-Year Resistance as the U.S. Dollar (DXY) And Treasury Yields Roll Over

By Joe Jasper

  • The number of risk-on signals continues to grow, while risk-off signals remain virtually non-existent. We will be sure to point it out when this dynamic starts to change
  • In the meantime, we want to continue riding this bull market higher, and our bullish outlook on the S&P 500, Russell 2000, and Nasdaq 100 (since early-November 2023) remains intact.
  • Gold is breaking out of a 3.5-year base to all-time closing highs — buy. Silver is breaking out above a 3-month base at $23.50. Fueled by toppy DXY and rates

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