Smartkarma Daily Briefs

• Context: Friday’s sell-off occurred after the Hong Kong market closed, but several Hong Kong–listed companies were caught up in the rout through their U.S.-listed ADRs.
• This Insight details the impact on 15 prominent Hang Seng Index constituents — including Alibaba, Tencent, and HSBC. Implied volatility in U.S.-traded options on these ADRs moved sharply in response.
• Why Read: Understand what to expect when the Hong Kong market reopens after the weekend — both in terms of price performance and implied volatility.

• Hahn & Co, holding 21.63% of Hanon, won’t join the rights issue, raising the odds of a CJ CGV–style stock rights dump hitting the market.
• Hanon’s rights float mirrors CJ CGV (~17% post-ESOP), with Hahn & Co likely to sell, limited local demand, and potential follow-on selling pressure.
• Hanon’s 50% rights at 15% discount offer smaller float than CJ CGV, but larger deal size and weak EV sentiment create a potential CJ CGV–style arb, with SSF tradability.

• Global Apparel Leader with Strong Growth Momentum: Fast Retailing is a dominant force in the global apparel industry, primarily through its flagship UNIQLO brand. The company has demonstrated a consistent track-record of robust, double-digit growth in revenue and profits, driven by the successful international expansion of UNIQLO, particularly in North America and Europe. The company forecasts continued strong growth, projecting a 10.3% revenue increase for FY2026.
• Unique Business Model Focused on Quality and Innovation: Unlike typical fast-fashion players that chase fleeting trends, Fast Retailing‘s ‘LifeWear’ philosophy emphasizes high-quality, functional, and durable basics. This is supported by a vertically integrated SPA (Specialty-Store Retailer of Private Label Apparel) model, which controls the entire process from design to sale, and a strong focus on material innovation and technology to enhance operational efficiency.
• Strategic Challenges and Key Risks Remain: Despite its success, the company faces significant risks. It has a heavy reliance on Asian markets, particularly Greater China, making it vulnerable to regional economic and geopolitical instability. The global apparel market is intensely competitive, and the company must contend with formidable rivals like Inditex (Zara) and H&M, as well as navigate supply chain complexities and potential controversies regarding labor practices.

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• The recent earnings report from Renault Group reflected a mixed performance marked by several strategic and financial dynamics.
• The introduction of François Provost as the new CEO was a noteworthy event, suggesting a leadership transition focused on continuity, strategic maneuverability, and performance standards.
• On the financial front, Renault Group’s revenues rose to €27.6 billion, marking a 3.6% increase at constant exchange rates compared to the previous year.

• A recent fire at Novelis’ Oswego, New York, aluminum rolling mill has sent shockwaves through the U.S. auto manufacturing sector, with Ford Motor Co. standing out as one of the most directly affected.
• Novelis, the largest supplier of aluminum sheet to the U.S. auto industry, experienced a substantial disruption that forced the plant to temporarily halt production.
• Ford, which sources aluminum from this plant for several of its core vehicles, including the high-volume F-Series pickup trucks, is facing heightened supply chain risk as a result.

• Another of China’s major state-owned automakers is expanding its collaboration with Huawei Technologies Co. Ltd., as legacy carmakers increasingly turn to the tech giant for an edge in the smart vehicle race.
• Dongfeng Motor Group Co. Ltd. Chairman Yang Qing on Monday met with Huawei founder Ren Zhengfei, stating that Dongfeng will pursue comprehensive cooperation with Huawei in areas such as corporate management, product design, smart technologies and marketing, according to a Sept. 23 company statement.
• Several of Dongfeng’s brands, including Voyah, eπ and M-Hero, have already integrated Huawei’s systems into their vehicles.

• I tally 43- mostly firm, mostly Asia-Pac – arb transactions currently being discussed and analysed on Smartkarma.
• Three new deal was discussed on Smartkarma this week: Pacific Smiles (PSQ AU), Predictive Discovery (PDI AU)/Robex Resources (RXR AU), and Hang Seng Bank (11 HK).
• Key updates/news took place on: Infomedia Ltd (IFM AU), Pacific Industrial (7250 JP), ReNew Energy Global (RNW US), and Mandom Corp (4917 JP).