Smartkarma Daily Briefs

• This is the 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.
• The data on liquid names is presented for 5 days and four weeks and anything seen can be ranked in tables or selected and charted (names, sectors, outperformance, etc).
• We like the nifty interactive tables and charts and welcome feedback. This week saw HKD 14.5bn+ of net buying. That makes ten weeks of net inflows.

• 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), Symbio Holdings (SYM AU), Mason Group Holdings (273 HK), JSR Corp (4185 JP), DDH1 (DDH AU), ENM Holdings (128 HK). 
• Lowest spreads – Toyo Construction (1890 JP), Healius (HLS AU), Yaizu Suisankagaku Industry (2812 JP), Allkem Ltd (AKE AU), Pact Group Holdings (PGH AU), Pacific Current (PAC AU). 

• The Brand-Spanking New (7 weeks old) A-H Monitor has tables, charts, measures galore to track A/H premium positioning, southbound and northbound positioning in pairs over time, etc.
• We used to do it and brought it back better. There are lots of cool interactive tables, and charts, heat maps, and comparative data. And 47 Trade Recommendations.
• The last 6 weeks (since the start of the new Monitor and Portfolio 7 weeks ago) have seen net portfolio performance of +0.50%, +1.35%, +0.14%, +0.47%, +0.15%, +0.12%.

• We compile our selection of small and mid-cap names with our desired characteristics of high dividend yields, value, and margin of safety.
• Our top picks are Perfect Medical Health (1830 HK), Water Oasis (1161 HK), Taste Gourmet (8371 HK), Uchi Technologies (UCHI MK), and The Keepers Holdings (KEEPR PM).
• We add UMP Healthcare (722 HK) to our list of small/mid-cap names we track. The company has just recently declared its full-year results. 

• This is the 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 data on liquid names is presented for 5 days and four weeks and anything seen can be ranked in tables or selected and charted (names, sectors, outperformance, etc).
• We like the nifty interactive tables and charts and welcome feedback. This week saw small net buying for the first week in seven.

• While valuations for Lonking Holdings (3339 HK) do not appear expensive, there is a risk that the 2H23 earnings outlook is weaker than expected. This opens room for disappointment.
• There is no sign that domestic sales have picked up and Jul-Aug was still down significantly. Meanwhile, the strong export in 1H23 has not sustained in the last two months. 
• The weaker A-share market so far in 2H23 also does not bode well for investment gains, which are important contributors to the impressive earnings rebound in 1H23.

• First, let’s talk about Huawei. I want to highlight how lackadaisically the export restrictions have even been applied.
• BIS granted validated end-user status to SMIC in 2007, which meant that as late as 2020, multiple SMIC entities were still receiving tools from American companies.
• BIS got lobbied by tool makers to undo commerce control list regulations in 2018. Also, AMEC has outright stolen tools from US companies.

• Express industry pricing fell by -5% in August, but some companies’ ASPs fell by far more
• Reportedly, we could see movement on planned J&T Express and CaiNiao IPOs this week
• We think SF Holding should outperform its “plain vanilla” express peers in medium-term

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.

• JSW Steel Ltd
• Redsun Properties Group Ltd