Smartkarma Daily Briefs

Korea banned all short selling in March 2020 and resumed short selling only on KOSPI 200 and KOSDAQ 150 index constituents in May 2021.
News reports indicate that there could be another short sell ban as soon as the coming week. Indications are that the ban could last 6 months.
There are many implications of a total short sell ban including futures backwardation, market manipulation, and no emerging to developed market promotion.

Full Transcript of Korea FSC Briefing on Sudden Short-Selling Ban, Including Key Trading Insights

There seems to be no immediate requirement to close existing contracts. However, even the chairman of the Financial Services Commission was unable to offer a definitive answer.
The comprehensive investigation and prohibition of the customary naked short selling could lead to a rapid decline in overall market liquidity.
The first is the short-term view, focusing on futures backwardation, and the second is the medium to long-term perspective, examining how the overall market liquidity decline will affect market flows.

Lee Family to Sell 2.6 Trillion Won in Samsung Companies to Pay for Inheritance Taxes

By Douglas Kim

Lee family plans to sell additional 2.6 trillion won worth of Samsung Group companies as part of their fourth installment of inheritance taxes.
This inheritance tax share sale is likely to have a negative impact on Samsung Electronics, Samsung C&T, Samsung SDS, and Samsung Life Insurance.
This may be just a coincidence but the regulators announced today a temporary ban on stock short selling which should help the Lee family to unload their shares.

EQD | KOSPI 200 SHORT-SELLING BAN: Upward Push and Pullbacks

By Nico Rosti

Banning short-selling for stocks will provide some propulsion to the KOSPI 200 INDEX but inevitably there will be pullbacks when strong resistance areas are reached.
The index is joining a wide global equities bounce, it is not recommended to go SHORT soon. There is a chance it may pullback briefly this week (buy the dip?)
Our models say the index can rise from 2 to 4 weeks, before reversing: resistance will be met at 320, 328 and (hard to reach) 349.

Samsung Founder Family’s Pre-Announced Block Deals: Contract Terms & Fresh Contextual Conditions

Considering year-end dividends, it appears likely that the trading timing might extend beyond this year. In the previous case, the trade execution timing was one month before the contract expired.
Short selling is prohibited. However, all four companies offer single-stock futures, which provide instruments for proactive positioning. Nevertheless, aspects to consider are likely to increase regarding trading convenience and liquidity.
The potential for inadequate liquidity might increase the discounts for these deals, potentially offering us fresh trading opportunities. We should proactively prepare trading setups that consider these contextual conditions.

Before it’s here, it’s on Smartkarma

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Nov 06

Daily Brief Australia: Origin Energy, State Gas Ltd and more

By Smartkarma Daily Briefs | Australia, Daily Briefs

In today’s briefing:

Weekly Deals Digest (05 Nov) – Origin, Azure, Tietto, Eoflow, Hollysys, WuXi XDC, Midea, EcoPro Mat
State Gas Limited – Growth Starts with the First PJ and That’s Imminent

Weekly Deals Digest (05 Nov) – Origin, Azure, Tietto, Eoflow, Hollysys, WuXi XDC, Midea, EcoPro Mat

By Research as a Service (RaaS)

A weekly summary of key developments across ECM and Event-Driven names tracked by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Thailand, Korea, India and Chinese ADRs.
ECM developments – EcoPro Materials (ECO123 KS), WuXi XDC Cayman (1877628D HK), Midea Group Co Ltd A (000333 CH) and Cainiao Smart Logistics Networ (1437124D HK) IPOs
Event-Driven developments – Origin Energy (ORG AU), Azure Minerals (AZS AU), Tietto Minerals Ltd (TIE AU), Symbio Holdings (SYM AU), Eoflow (294090 KS), Hollysys Automation Technologies (HOLI US).

State Gas Limited – Growth Starts with the First PJ and That’s Imminent

State Gas Limited (ASX:GAS) is a junior energy producer and explorer with assets concentrated in the Bowen Basin, Queensland.
Having secured some $7mn in equity financing, the company is well progressed in the construction phase of the Rolleston West CNG Project (RW-CNG), with production set to commence in December.
First gas is always a critical event driver in demonstrating the commercial potential of the assets and providing a platform from which growth strategies can emanate.

Before it’s here, it’s on Smartkarma

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

✓ Unlimited Research Summaries
✓ Personalised Alerts
✓ Custom Watchlists
✓ Company Data and News
✓ Events & Webinars

Nov 06

Daily Brief China: Chindata Group, Guangzhou Automobile Group, Haitong International Securities Group, Great Wall Motor, Dongfang Electric, Shenzhen Mindray Bio-Medical Electronics, China Traditional Chinese Medicine, China Vanke and more

By Smartkarma Daily Briefs | China, Daily Briefs

In today’s briefing:

Chindata (CD US): Maximum Dissent Condition in Focus as Oasis Builds a Stake
A/H Premium Tracker (To 3 Nov): Volatility Off, Spreads Jumpy, Short Sellers a NatSec Concern?
Merger Arb Mondays (06 Nov) – Haitong Intl, NWS, Poly Culture, Eoflow, Origin, Azure, Tietto
HK Connect SOUTHBOUND (To 3 Nov 23); CNOOC & China Mobile AGAIN See Outflows, SMIC & Xiaomi See Buys
Dongfang Electric (1072 HK): We See an Opportunity
Mainland Connect NORTHBOUND Flows (To 3Nov23): First Week of Net Buying in 3mos
China Healthcare–A Pair Trade Between China TCM (570.HK) And Pientzehuang Pharmaceutical (600436.CH)
Morning Views Asia: China Vanke , Hopson Development

Chindata (CD US): Maximum Dissent Condition in Focus as Oasis Builds a Stake

Chindata Group (CD US)’s US$8.60 per ADS offer from Bain Capital is conditional on dissenting shareholders representing less than 12% of outstanding shares.
Oasis Management, an activist fund, recently disclosed a shareholding representing 65.9 million ordinary shares, 8.99% of outstanding shares and 1.24% of voting interest.
Precedent transactions where the dissent condition was exceeded suggest two possibilities – the offeror waives the condition or persuades sufficient shareholders to withdraw as dissenters.

A/H Premium Tracker (To 3 Nov): Volatility Off, Spreads Jumpy, Short Sellers a NatSec Concern?

The New and Better (10 weeks old) A-H Monitor has tables, charts, measures galore to track A/H premium positioning, southbound and northbound positioning/volatility in pairs over time, etc.
Absolutely STONKING performance this past week – +1.62% Friday to Friday across 42 trades. Positive performance in every sector. Portfolio at new high. Southbound inflows. BigCapHighDiv SOE outflows.
Short sales this week now need 100% in the account for hedge funds. And the MSS claims some are short-selling or talking bearishly on stocks for political reasons.

Merger Arb Mondays (06 Nov) – Haitong Intl, NWS, Poly Culture, Eoflow, Origin, Azure, Tietto

We summarise the latest spreads and newsflow of merger arb situations we cover across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
Highest spreads – 111 Inc (YI US), Eoflow (294090 KS), Hollysys Automation Technologies (HOLI US), Origin Energy (ORG AU), JSR Corp (4185 JP), Orecorp Ltd (ORR AU), Lithium Power.
Lowest spreads – Azure Minerals (AZS AU), Pact Group Holdings (PGH AU), Chindata Group (CD US), Tietto Minerals Ltd (TIE AU), T&K Toka Co Ltd (4636 JP), Allkem.

HK Connect SOUTHBOUND (To 3 Nov 23); CNOOC & China Mobile AGAIN See Outflows, SMIC & Xiaomi See Buys

This is the somewhat brand-spanking-new Quiddity HK Connect SOUTHBOUND Monitor. We work off the same presentation as the A/H Premium Monitor and Mainland Connect NORTHBOUND Monitor.
SOUTHBOUND flows the last four weeks clearly indicate a momentum move. The top net sells are all down. The top buys are all up.
Xiaomi Corp (1810 HK) and Semiconductor Manufacturing International Corp (SMIC) (981 HK) were the top net SOUTHBOUND inflows as SOUTHBOUND bought HK$8.515bn this past week.

Dongfang Electric (1072 HK): We See an Opportunity

By Osbert Tang, CFA

The collapse in share price of Dongfang Electric (1072 HK) is too excessive. The concerns on margin and orders are overplayed and its latest financial result is solid.
Recurring profit surged 24.8% in 3Q23 and gross margin expanded both YoY and QoQ. For 9M23, new orders rose 19.2% to reach 98% of full-year FY22 level.
We estimate backlog at Rmb197bn, or 3x consensus FY23F revenue, and this provides excellent protection to forward earnings. Its 5.8x and 4.4x PERs are just too undervalued.

Mainland Connect NORTHBOUND Flows (To 3Nov23): First Week of Net Buying in 3mos

This is the somewhat-brand-spanking-new Quiddity Mainland Connect NORTHBOUND Monitor. We work off the same presentation as the A/H Premium Monitor and HK Connect SOUTHBOUND Monitor.
The same five names continue at the top of the gross flows list – Kweichow Moutai, Contemporary Amperex, Wuliangye Yibin, Foxconn Industrial, and BYD. Nets are dropping.
NORTHBOUND saw net inflow for the first time in three months. Small at RMB 557mm, but positive.

China Healthcare–A Pair Trade Between China TCM (570.HK) And Pientzehuang Pharmaceutical (600436.CH)

By Xinyao (Criss) Wang

The recovery of concentrated TCM granules business makes us optimistic about China TCM’s 2023 full-year performance growth. The resurgence of pandemic and privatization rumor always attract the attention of investors.
Pientzehuang’s 23Q3 performance was disappointing. Consumption downgrade makes the strategy of raising prices no longer effective. There is downward pressure on valuation as performance will not turn around soon.
The investment logic of rigid demand is more convincing than consumption upgrading. So, China TCM is more likely to outperform Pientzehuang. Our view is long China TCM, and short Pientzehuang.

Morning Views Asia: China Vanke , Hopson Development

By Charles Macgregor

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
Hopson Development

Before it’s here, it’s on Smartkarma

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Nov 06

Daily Brief Indonesia: Amman Mineral Internasional and more

By Smartkarma Daily Briefs | Daily Briefs, Indonesia

In today’s briefing:

Amman Mineral (AMMN IJ): Potential Passive Inflows Coming Up Soon

Amman Mineral (AMMN IJ): Potential Passive Inflows Coming Up Soon

Amman Mineral Internasional (AMMN IJ) listed on the Main Board of the IDX in July by raising US$715m in the largest Indonesia IPO for the year.
The stock did not get Fast Entry to any of the local or global indices given the low float, but there could be multiple index inclusions in the near future.
The stock is up 3x from its IPO price and there could be supply from some of the investors that got in at the offering price.

Before it’s here, it’s on Smartkarma

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

✓ Unlimited Research Summaries
✓ Personalised Alerts
✓ Custom Watchlists
✓ Company Data and News
✓ Events & Webinars

Nov 06

Daily Brief Japan: Descente Ltd, Wacom Co Ltd, Saizeriya and more

By Smartkarma Daily Briefs | Daily Briefs, Japan

In today’s briefing:

Descente (8114) : Itochu Still Buying and ANTA Gives You Earnings Hints
Wacom (6727 JP) – Large, Short-Dated, On-Market Buyback Against Dense Register
Saizeriya (7581 JP): Best Pick For Asia/China Restaurant Space

Descente (8114) : Itochu Still Buying and ANTA Gives You Earnings Hints

Descente Ltd (8114 JP) saw Itochu report it had continued its streak of consecutive days of buying, extending it to 115. Now they own 44.1% of voting rights.
ANTA gave hints to the progress of Descente China in the Interim Results, and Q3 Operational Update. Descente analysts are 20% ahead of guidance, but they’re probably low still.
Descente reports Q2 tomorrow. I expect the numbers and presentation to surprise at the Net Profit level. I expect a forecast revision.

Wacom (6727 JP) – Large, Short-Dated, On-Market Buyback Against Dense Register

Wacom splits its pen-tablet business into “Branded Business” and “Technology Solutions” which is not dissimilar to simply splitting based on customer type. TS is doing well. BB is not.
But BB is doing better than it was, which means a rebound in profit this year. After Q2 there is new guidance, probably soft. And there is a BIG buyback.
The buyback is large enough to take notice, even though practically it will be smaller than the headline. And a read of the MTMP “Wacom Chapter 3” is highly recommended.

Saizeriya (7581 JP): Best Pick For Asia/China Restaurant Space

By Steve Zhou, CFA

I continue to believe that Saizeriya is the best pick for gaining exposure to Asia/China restaurant space.
Saizeriya has a very clear business strategy and focus: price. The founder Yasuhiko Shogaki made it clear that price always comes first, and everything else second.
Looking ahead, the runway for growth in China is huge. The company is currently only in 3 cities for a total of 373 stores as of end-FY23 year ending August.

Before it’s here, it’s on Smartkarma

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

✓ Unlimited Research Summaries
✓ Personalised Alerts
✓ Custom Watchlists
✓ Company Data and News
✓ Events & Webinars

Nov 06

Most Read: Korea Stock Exchange KOSPI 200, Korea Stock Exchange Kospi Index, Samsung Electronics, Chindata Group, Descente Ltd, Samsung Sds, Guangzhou Automobile Group, Haitong International Securities Group and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

Korea Short Sell Ban: Background, Manipulation, Holdings, Flows, Short Interest, Implications
Trading Opportunities from Korea’s Sudden Short Selling Ban & Resulting Futures Backwardation
Full Transcript of Korea FSC Briefing on Sudden Short-Selling Ban, Including Key Trading Insights
Lee Family to Sell 2.6 Trillion Won in Samsung Companies to Pay for Inheritance Taxes
Chindata (CD US): Maximum Dissent Condition in Focus as Oasis Builds a Stake
EQD | KOSPI 200 SHORT-SELLING BAN: Upward Push and Pullbacks
Descente (8114) : Itochu Still Buying and ANTA Gives You Earnings Hints
Samsung Founder Family’s Pre-Announced Block Deals: Contract Terms & Fresh Contextual Conditions
A/H Premium Tracker (To 3 Nov): Volatility Off, Spreads Jumpy, Short Sellers a NatSec Concern?
Merger Arb Mondays (06 Nov) – Haitong Intl, NWS, Poly Culture, Eoflow, Origin, Azure, Tietto

Korea Short Sell Ban: Background, Manipulation, Holdings, Flows, Short Interest, Implications

Korea banned all short selling in March 2020 and resumed short selling only on KOSPI 200 and KOSDAQ 150 index constituents in May 2021.
News reports indicate that there could be another short sell ban as soon as the coming week. Indications are that the ban could last 6 months.
There are many implications of a total short sell ban including futures backwardation, market manipulation, and no emerging to developed market promotion.

Trading Opportunities from Korea’s Sudden Short Selling Ban & Resulting Futures Backwardation

We should consider the complete prohibition of short selling for the next six months as practically finalized.
Following the individual stock short selling ban, both position hedging and short demand will inevitably shift to the futures market, consequently inducing unavoidable immediate backwardation.
We should design a setup that not only actively seizes sell arbitrage opportunities but also effectively capitalizes on the downward price pressure stemming from spot selling.

Full Transcript of Korea FSC Briefing on Sudden Short-Selling Ban, Including Key Trading Insights

There seems to be no immediate requirement to close existing contracts. However, even the chairman of the Financial Services Commission was unable to offer a definitive answer.
The comprehensive investigation and prohibition of the customary naked short selling could lead to a rapid decline in overall market liquidity.
The first is the short-term view, focusing on futures backwardation, and the second is the medium to long-term perspective, examining how the overall market liquidity decline will affect market flows.

Lee Family to Sell 2.6 Trillion Won in Samsung Companies to Pay for Inheritance Taxes

By Douglas Kim

Lee family plans to sell additional 2.6 trillion won worth of Samsung Group companies as part of their fourth installment of inheritance taxes.
This inheritance tax share sale is likely to have a negative impact on Samsung Electronics, Samsung C&T, Samsung SDS, and Samsung Life Insurance.
This may be just a coincidence but the regulators announced today a temporary ban on stock short selling which should help the Lee family to unload their shares.

Chindata (CD US): Maximum Dissent Condition in Focus as Oasis Builds a Stake

Chindata Group (CD US)’s US$8.60 per ADS offer from Bain Capital is conditional on dissenting shareholders representing less than 12% of outstanding shares.
Oasis Management, an activist fund, recently disclosed a shareholding representing 65.9 million ordinary shares, 8.99% of outstanding shares and 1.24% of voting interest.
Precedent transactions where the dissent condition was exceeded suggest two possibilities – the offeror waives the condition or persuades sufficient shareholders to withdraw as dissenters.

EQD | KOSPI 200 SHORT-SELLING BAN: Upward Push and Pullbacks

By Nico Rosti

Banning short-selling for stocks will provide some propulsion to the KOSPI 200 INDEX but inevitably there will be pullbacks when strong resistance areas are reached.
The index is joining a wide global equities bounce, it is not recommended to go SHORT soon. There is a chance it may pullback briefly this week (buy the dip?)
Our models say the index can rise from 2 to 4 weeks, before reversing: resistance will be met at 320, 328 and (hard to reach) 349.

Descente (8114) : Itochu Still Buying and ANTA Gives You Earnings Hints

Descente Ltd (8114 JP) saw Itochu report it had continued its streak of consecutive days of buying, extending it to 115. Now they own 44.1% of voting rights.
ANTA gave hints to the progress of Descente China in the Interim Results, and Q3 Operational Update. Descente analysts are 20% ahead of guidance, but they’re probably low still.
Descente reports Q2 tomorrow. I expect the numbers and presentation to surprise at the Net Profit level. I expect a forecast revision.

Samsung Founder Family’s Pre-Announced Block Deals: Contract Terms & Fresh Contextual Conditions

Considering year-end dividends, it appears likely that the trading timing might extend beyond this year. In the previous case, the trade execution timing was one month before the contract expired.
Short selling is prohibited. However, all four companies offer single-stock futures, which provide instruments for proactive positioning. Nevertheless, aspects to consider are likely to increase regarding trading convenience and liquidity.
The potential for inadequate liquidity might increase the discounts for these deals, potentially offering us fresh trading opportunities. We should proactively prepare trading setups that consider these contextual conditions.

A/H Premium Tracker (To 3 Nov): Volatility Off, Spreads Jumpy, Short Sellers a NatSec Concern?

The New and Better (10 weeks old) A-H Monitor has tables, charts, measures galore to track A/H premium positioning, southbound and northbound positioning/volatility in pairs over time, etc.
Absolutely STONKING performance this past week – +1.62% Friday to Friday across 42 trades. Positive performance in every sector. Portfolio at new high. Southbound inflows. BigCapHighDiv SOE outflows.
Short sales this week now need 100% in the account for hedge funds. And the MSS claims some are short-selling or talking bearishly on stocks for political reasons.

Merger Arb Mondays (06 Nov) – Haitong Intl, NWS, Poly Culture, Eoflow, Origin, Azure, Tietto

We summarise the latest spreads and newsflow of merger arb situations we cover across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
Highest spreads – 111 Inc (YI US), Eoflow (294090 KS), Hollysys Automation Technologies (HOLI US), Origin Energy (ORG AU), JSR Corp (4185 JP), Orecorp Ltd (ORR AU), Lithium Power.
Lowest spreads – Azure Minerals (AZS AU), Pact Group Holdings (PGH AU), Chindata Group (CD US), Tietto Minerals Ltd (TIE AU), T&K Toka Co Ltd (4636 JP), Allkem.

Before it’s here, it’s on Smartkarma

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Nov 06

Daily Brief Industrials: Dongfang Electric and more

By Smartkarma Daily Briefs | Daily Briefs, Industrials

In today’s briefing:

Dongfang Electric (1072 HK): We See an Opportunity

Dongfang Electric (1072 HK): We See an Opportunity

By Osbert Tang, CFA

The collapse in share price of Dongfang Electric (1072 HK) is too excessive. The concerns on margin and orders are overplayed and its latest financial result is solid.
Recurring profit surged 24.8% in 3Q23 and gross margin expanded both YoY and QoQ. For 9M23, new orders rose 19.2% to reach 98% of full-year FY22 level.
We estimate backlog at Rmb197bn, or 3x consensus FY23F revenue, and this provides excellent protection to forward earnings. Its 5.8x and 4.4x PERs are just too undervalued.

Before it’s here, it’s on Smartkarma

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

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✓ Custom Watchlists
✓ Company Data and News
✓ Events & Webinars

Nov 06

Daily Brief Quantitative Analysis: A-H Premium Weekly (Nov 3rd): Ganfeng Lithium and more

By Smartkarma Daily Briefs | Daily Briefs, Quantitative Analysis

In today’s briefing:

A-H Premium Weekly (Nov 3rd): Ganfeng Lithium, CMS, Wuxi Apptec
Hong Kong Connect Flows (Nov 3rd): Li Ning, SMIC, Xiaomi
TWSE Foreign Holding Weekly (Nov 3rd): Alchip Tech, TSMC, Hon Hai, Taiwan Cement
HK Short Interest Weekly: Yankuang Energy, CCB, Bidu, Petrochina
Northbound Flows (Nov 3rd): Moutai, China Yangtze Power, Maxscend Microelectronics, Mindray

A-H Premium Weekly (Nov 3rd): Ganfeng Lithium, CMS, Wuxi Apptec

We analyse the changes of A-H premium on 146 stocks over the last week. The average A-H premium was 117.6% as of Nov 3rd.
The average A-H premium changed by -1.5ppt week on week, led by utilities, information technology, communication services and offset by energy.
We highlight weekly changes in A-H premium for Ganfeng Lithium, China Merchant Securities and Wuapptec.

Hong Kong Connect Flows (Nov 3rd): Li Ning, SMIC, Xiaomi

We analyze the weekly Hong Kong Connect flows with our data engine for holding position as of November 3rd.
The top stocks by inflows and outflows were tabulated for all market, HSCEI, mid cap and s/mid cap groups.
We highlight flows for Li Ning, Semiconductor Manufacturing International, Xiaomi, Wuxi Biologics, Kuaishou Technology.

TWSE Foreign Holding Weekly (Nov 3rd): Alchip Tech, TSMC, Hon Hai, Taiwan Cement

We analyzed the changes in foreign holdings of TWSE Stocks as of Nov 3rd which has an aggregated holding worth USD625.6bn.
We tabulate league table for top changes by value for 1 week, one 4 weeks, 1 year and top stocks held by foreign instutions by dollar value.
We estimate that foreign flows to be outflows of USD137mln and highlight foreign changes in Alchip Tech, TSMC, Hon Hai, Taiwan Cement.

HK Short Interest Weekly: Yankuang Energy, CCB, Bidu, Petrochina

We analyzed the latest HK SFC report for aggregate short position as of Oct 27th.
Top short increases and decreases were tabulated for one week and four week period.
We highlight short changes in Yankuang Energy, CCB, Bidu, Petrochina.

Northbound Flows (Nov 3rd): Moutai, China Yangtze Power, Maxscend Microelectronics, Mindray

We analyze the weekly Shanghai/Shenzhen northbound Connect flows with our data engine for holding position as of November 3rd.
We estimate the weekly inflows to be US$100.5 million, led by consumer staples, information technology, health care sectors, and offset by industrials, consumer discretionary.
We highlight flows for Moutai, China Yangtze Power, Maxscend Microelectronics, Mindray, Wuliangye, BYD.

Before it’s here, it’s on Smartkarma

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

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Nov 06

Daily Brief Energy/Materials: Amman Mineral Internasional, Origin Energy, Rio Tinto PLC, State Gas Ltd and more

By Smartkarma Daily Briefs | Daily Briefs, Energy & Materials Sector

In today’s briefing:

Amman Mineral (AMMN IJ): Potential Passive Inflows Coming Up Soon
Weekly Deals Digest (05 Nov) – Origin, Azure, Tietto, Eoflow, Hollysys, WuXi XDC, Midea, EcoPro Mat
Selected European HoldCos and DLC: October’23 Report
State Gas Limited – Growth Starts with the First PJ and That’s Imminent

Amman Mineral (AMMN IJ): Potential Passive Inflows Coming Up Soon

Amman Mineral Internasional (AMMN IJ) listed on the Main Board of the IDX in July by raising US$715m in the largest Indonesia IPO for the year.
The stock did not get Fast Entry to any of the local or global indices given the low float, but there could be multiple index inclusions in the near future.
The stock is up 3x from its IPO price and there could be supply from some of the investors that got in at the offering price.

Weekly Deals Digest (05 Nov) – Origin, Azure, Tietto, Eoflow, Hollysys, WuXi XDC, Midea, EcoPro Mat

By Research as a Service (RaaS)

A weekly summary of key developments across ECM and Event-Driven names tracked by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Thailand, Korea, India and Chinese ADRs.
ECM developments – EcoPro Materials (ECO123 KS), WuXi XDC Cayman (1877628D HK), Midea Group Co Ltd A (000333 CH) and Cainiao Smart Logistics Networ (1437124D HK) IPOs
Event-Driven developments – Origin Energy (ORG AU), Azure Minerals (AZS AU), Tietto Minerals Ltd (TIE AU), Symbio Holdings (SYM AU), Eoflow (294090 KS), Hollysys Automation Technologies (HOLI US).

Selected European HoldCos and DLC: October’23 Report

By Jesus Rodriguez Aguilar

The discounts to NAV of covered holdcos haven’t shown a clear trend during October. Discounts to NAV: C.F.Alba, 47.8% (vs. 49.2%); GBL, 35.5% (vs. 35.3%); Heineken Holding, 14.9% (vs. 14.5%);
Industrivärden C, 6% (vs. 7.4%); Investor B, 16.5% (vs. 15.4%); Porsche Automobile Holding, 40.9% (vs. 41.1%). The spread of Rio DLC widened to 21% (vs. 15.8%).
What seems interesting: holding trades, Investor B vs. listed assets, Porsche SE/vs. listed assets and the Rio DLC: long RIO LN/short RIO AU.

State Gas Limited – Growth Starts with the First PJ and That’s Imminent

State Gas Limited (ASX:GAS) is a junior energy producer and explorer with assets concentrated in the Bowen Basin, Queensland.
Having secured some $7mn in equity financing, the company is well progressed in the construction phase of the Rolleston West CNG Project (RW-CNG), with production set to commence in December.
First gas is always a critical event driver in demonstrating the commercial potential of the assets and providing a platform from which growth strategies can emanate.

Before it’s here, it’s on Smartkarma

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

✓ Unlimited Research Summaries
✓ Personalised Alerts
✓ Custom Watchlists
✓ Company Data and News
✓ Events & Webinars

Nov 06

Daily Brief TMT/Internet: Korea Stock Exchange KOSPI 200, Samsung Electronics, Chindata Group, Samsung Sds, Wacom Co Ltd and more

By Smartkarma Daily Briefs | Daily Briefs, TMT/Internet

In today’s briefing:

Korea Short Sell Ban: Background, Manipulation, Holdings, Flows, Short Interest, Implications
Lee Family to Sell 2.6 Trillion Won in Samsung Companies to Pay for Inheritance Taxes
Chindata (CD US): Maximum Dissent Condition in Focus as Oasis Builds a Stake
Samsung Founder Family’s Pre-Announced Block Deals: Contract Terms & Fresh Contextual Conditions
Wacom (6727 JP) – Large, Short-Dated, On-Market Buyback Against Dense Register

Korea Short Sell Ban: Background, Manipulation, Holdings, Flows, Short Interest, Implications

Korea banned all short selling in March 2020 and resumed short selling only on KOSPI 200 and KOSDAQ 150 index constituents in May 2021.
News reports indicate that there could be another short sell ban as soon as the coming week. Indications are that the ban could last 6 months.
There are many implications of a total short sell ban including futures backwardation, market manipulation, and no emerging to developed market promotion.

Lee Family to Sell 2.6 Trillion Won in Samsung Companies to Pay for Inheritance Taxes

By Douglas Kim

Lee family plans to sell additional 2.6 trillion won worth of Samsung Group companies as part of their fourth installment of inheritance taxes.
This inheritance tax share sale is likely to have a negative impact on Samsung Electronics, Samsung C&T, Samsung SDS, and Samsung Life Insurance.
This may be just a coincidence but the regulators announced today a temporary ban on stock short selling which should help the Lee family to unload their shares.

Chindata (CD US): Maximum Dissent Condition in Focus as Oasis Builds a Stake

Chindata Group (CD US)’s US$8.60 per ADS offer from Bain Capital is conditional on dissenting shareholders representing less than 12% of outstanding shares.
Oasis Management, an activist fund, recently disclosed a shareholding representing 65.9 million ordinary shares, 8.99% of outstanding shares and 1.24% of voting interest.
Precedent transactions where the dissent condition was exceeded suggest two possibilities – the offeror waives the condition or persuades sufficient shareholders to withdraw as dissenters.

Samsung Founder Family’s Pre-Announced Block Deals: Contract Terms & Fresh Contextual Conditions

Considering year-end dividends, it appears likely that the trading timing might extend beyond this year. In the previous case, the trade execution timing was one month before the contract expired.
Short selling is prohibited. However, all four companies offer single-stock futures, which provide instruments for proactive positioning. Nevertheless, aspects to consider are likely to increase regarding trading convenience and liquidity.
The potential for inadequate liquidity might increase the discounts for these deals, potentially offering us fresh trading opportunities. We should proactively prepare trading setups that consider these contextual conditions.

Wacom (6727 JP) – Large, Short-Dated, On-Market Buyback Against Dense Register