All Posts By

Smartkarma Daily Briefs

Feb 05
0

Daily Brief Financials: Aozora Bank Ltd, Bank Rakyat Indonesia and more

By | Daily Briefs, Financials

In today’s briefing:

  • Aozora Bank (8304 JP) – Two Bets Too Far
  • Bank Rakyat Indonesia (BBRI IJ) – Pushing the Margins of Profitability

Aozora Bank (8304 JP) – Two Bets Too Far

By Victor Galliano

  • 3QFY23 results reveal losses related to Aozora’s US CRE exposure and securities portfolio; management forecasts a FY23 loss and a 50% cut in the previously forecast FY2023 dividend
  • US CRE exposure is 6.6% of total loans and Aozora’s US CRE deterioration propelled the NPL ratio to 2.87% up 162bps QoQ, the worst NPL ratio of the peer group
  • The securities portfolio hits are in US MBS and US bond ETFs; SMFG and Mizuho have large relative FX bond exposures, but they have less duration risk

Bank Rakyat Indonesia (BBRI IJ) – Pushing the Margins of Profitability

By Angus Mackintosh

  • Bank Rakyat Indonesia’s results reflected its ability to offset a tighter liquidity environment with a higher margin loan mix as it continues to shift to commercial Kupedes microloans. 
  • The bank has also seen the benefit of increasing digitalisation benefitting costs with more BRILink agents and users of mobile banking through BRIMO, which has also helped to grow CASA.
  • Guidance for 2024 remains positive on loan growth, NIMs,  increasing leverage, and rising loan yields, with stable credit quality. Valuations look attractive relative to a forecast ROE of above 20%. 

💡 Before it’s here, it’s on Smartkarma

Sign Up for Free

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
Sign Up for Free


Feb 05
0

Daily Brief Australia: Red 5 Ltd and more

By | Australia, Daily Briefs

In today’s briefing:

  • RED5 & Silver Lake Resources Merger of Equals: Market Loves It (Not!)

RED5 & Silver Lake Resources Merger of Equals: Market Loves It (Not!)

By Brian Freitas

💡 Before it’s here, it’s on Smartkarma

Sign Up for Free

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
Sign Up for Free


Feb 05
0

Daily Brief South Korea: Ssangyong Cement Industrial and more

By | Daily Briefs, South Korea

In today’s briefing:

  • Hahn & Co Launches a Tender Offer on Remaining Shares of Ssangyong C&E

Hahn & Co Launches a Tender Offer on Remaining Shares of Ssangyong C&E

By Douglas Kim

  • On 4 February, the local media reported that Hahn & Co private equity firm is launching a tender offer on the remaining shares of Ssangyong Cement Industrial (003410 KS) (Ssangyong C&E).
  • Tender offer price is 7,000 won (9.2% higher than the closing price on 2 February) and the tender offer amount is 702 billion won. 
  • We believe Ssangyong C&E’s shares are likely close to the tender offer price today. We believe there is higher probability of Hahn & Co successfully completing this tender offer. 

💡 Before it’s here, it’s on Smartkarma

Sign Up for Free

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
Sign Up for Free


Feb 05
0

Daily Brief Singapore: Cosmosteel Holdings and more

By | Daily Briefs, Singapore

In today’s briefing:

  • Silchester takes ComfortDelGro stake above 7%

Silchester takes ComfortDelGro stake above 7%

By Geoff Howie

  • CapitaLand Investment again led the buyback consideration tally, buying back 5 million shares at an average price of S$2.92 per share on Jan 26.
  • It also led the share buyback consideration tally in January, followed by Yangzijiang Financial Holding, Singapore Technologies Engineering, Venture Corporation and OUE.
  • Aside from Jardine Matheson Holdings, ComfortDelGro also ranked among the 10 stocks that booked the highest net institutional inflow in January.

💡 Before it’s here, it’s on Smartkarma

Sign Up for Free

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
Sign Up for Free


Feb 05
0

Daily Brief Indonesia: Bank Rakyat Indonesia and more

By | Daily Briefs, Indonesia

In today’s briefing:

  • Bank Rakyat Indonesia (BBRI IJ) – Pushing the Margins of Profitability

Bank Rakyat Indonesia (BBRI IJ) – Pushing the Margins of Profitability

By Angus Mackintosh

  • Bank Rakyat Indonesia’s results reflected its ability to offset a tighter liquidity environment with a higher margin loan mix as it continues to shift to commercial Kupedes microloans. 
  • The bank has also seen the benefit of increasing digitalisation benefitting costs with more BRILink agents and users of mobile banking through BRIMO, which has also helped to grow CASA.
  • Guidance for 2024 remains positive on loan growth, NIMs,  increasing leverage, and rising loan yields, with stable credit quality. Valuations look attractive relative to a forecast ROE of above 20%. 

💡 Before it’s here, it’s on Smartkarma

Sign Up for Free

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
Sign Up for Free


Feb 05
0

Daily Brief United States: Hollysys Automation Technologies and more

By | Daily Briefs, United States

In today’s briefing:

  • Merger Arb Mondays (05 Feb) – Hollysys, JSR, Benesse, Benefit One, Glosel, OreCorp, QV Equities

Merger Arb Mondays (05 Feb) – Hollysys, JSR, Benesse, Benefit One, Glosel, OreCorp, QV Equities

By Arun George

💡 Before it’s here, it’s on Smartkarma

Sign Up for Free

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
Sign Up for Free


Feb 05
0

Daily Brief India: Bharti Hexacom and more

By | Daily Briefs, India

In today’s briefing:

  • Bharti Hexacom Pre-IPO Tearsheet

Bharti Hexacom Pre-IPO Tearsheet

By Ethan Aw

  • Bharti Hexacom (6597372Z IN) is looking to raise up to US$1bn in its upcoming India IPO. The bookrunners are SBI Capital, Axis Capital, BOB Capital, ICICI Securities and IIFL Securities.
  • Bharti Hexacom (BH) is a communications solutions provider offering consumer mobile services, fixed-line telephone and broadband services to customers in the Rajasthan and the North East telecommunication circles in India.
  • It offers its services under the brand ‘Airtel’. BH relies on a robust network infrastructure with a mix of owned and leased assets.

💡 Before it’s here, it’s on Smartkarma

Sign Up for Free

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
Sign Up for Free


Feb 05
0

Daily Brief China: Meituan, Trip.com, WuXi AppTec and more

By | China, Daily Briefs

In today’s briefing:

  • Meituan (3690 HK): Turning Cautiously Positive
  • Monthly Chinese Tourism Tracker | China’s 2023 Recovery in Ten Charts | (January 2024)
  • Latest Impact of the US Biosecure Act on WuXi AppTec/WuXi Bio/WuXi XDC – China CXO Really Game Over?

Meituan (3690 HK): Turning Cautiously Positive

By Eric Chen

  • Share price of Meituan has fallen by 25% since we flagged the name as high-conviction sell for 2024 last December, due in large to its weakening fundamental and earnings cut.
  • We believe its competitive positioning in food delivery remains rock solid and estimates Meituan will likely command over 2/3 market share in in-store business, at the expense of margin.
  • The company trades at 12x/8.6x 2024/25 consensus earnings. Current valuation already priced in rather bearish outlook amidst macro concerns and intensified competition in our view. We see value emerging.

Monthly Chinese Tourism Tracker | China’s 2023 Recovery in Ten Charts | (January 2024)

By Daniel Hellberg

  • By one metric, outbound tourism in December improved to 89% of 2019 levels
  • Meanwhile, domestic activity in December remained close to pre-Covid levels
  • In this month’s edition we track the tourism recovery in ten illustrative charts

Latest Impact of the US Biosecure Act on WuXi AppTec/WuXi Bio/WuXi XDC – China CXO Really Game Over?

By Xinyao (Criss) Wang

  • Based on the latest updates, it’s still uncertain to see a positive turnaround.There’ve been no effective ways to evade.Debate about restricting Chinese biopharmaceuticals has never gone away in US politics.
  • Nobody can say with 100% certainty whether the Bill will be passed/how much impact it will have. Until the dust settles, any rebound in share prices is difficult to sustain.
  • The market is preparing for the worst-case scenario, but if the final Bill is less stringent than expected, shares of WuXi AppTec and its subsidiaries would rebound.Here’re different bottom-fishing strategies.

💡 Before it’s here, it’s on Smartkarma

Sign Up for Free

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
Sign Up for Free


Feb 05
0

Daily Brief Japan: JSR Corp, BayCurrent Consulting , Aozora Bank Ltd and more

By | Daily Briefs, Japan

In today’s briefing:

  • JSR (4185) – Possible Trouble in Arb Land as SUNY/CNSE Files Suit Against JSR Sub Inpria
  • JSR Corporation (4185 JP): An Unwelcome US Lawsuit as Tender Start Looms
  • Japan – Increasing Shorts on Some Interesting** Stocks
  • Aozora Bank (8304 JP) – Two Bets Too Far

JSR (4185) – Possible Trouble in Arb Land as SUNY/CNSE Files Suit Against JSR Sub Inpria

By Travis Lundy

  • JSR Corp (4185 JP)  announced 2 February on its website that the Research Foundation for the State University of New York (“RF SUNY”) filed suit against JSR subsidiary Inpria 25 January.
  • JSR claims no wrongdoing. A court order from the US District Court for the Northern District of New York denied RF SUNY’s request for a hearing by 5 February.
  • This may put a short-term damper on sentiment in the name, and I expect the JICC people have been working on this for a week. 

JSR Corporation (4185 JP): An Unwelcome US Lawsuit as Tender Start Looms

By Arun George

  • The Research Foundation of the State University of New York (SUNY RF) has filed a patent infringement lawsuit against JSR Corp (4185 JP) and its subsidiary, Inpria.
  • SUNY RF claims the “planned tender offer will irreparably harm SUNY RF absent preliminary relief” and filed a motion for a preliminary injunction to stop JSR licensing patents to JIC.
  • JSR has yet to file a response, making it hard to judge the lawsuit’s merits. The best case is the PI is not granted, delaying the tender by a month.  

Japan – Increasing Shorts on Some Interesting** Stocks

By Brian Freitas

  • There are some Japanese stocks that have dropped in price even as the broader market has powered higher. That could lead to the stocks being deleted from global portfolios.
  • The deletion from passive portfolios will lead to a liquidity event at the end of February where passive trackers will need to sell multiple days of ADV.
  • BayCurrent Consulting (6532 JP) is a dark horse for inclusion in the Nikkei 225 (NKY INDEX) in March and this deletion could take the stock lower before the Nikkei 225 announcement.

Aozora Bank (8304 JP) – Two Bets Too Far

By Victor Galliano

  • 3QFY23 results reveal losses related to Aozora’s US CRE exposure and securities portfolio; management forecasts a FY23 loss and a 50% cut in the previously forecast FY2023 dividend
  • US CRE exposure is 6.6% of total loans and Aozora’s US CRE deterioration propelled the NPL ratio to 2.87% up 162bps QoQ, the worst NPL ratio of the peer group
  • The securities portfolio hits are in US MBS and US bond ETFs; SMFG and Mizuho have large relative FX bond exposures, but they have less duration risk

💡 Before it’s here, it’s on Smartkarma

Sign Up for Free

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
Sign Up for Free


Feb 04
0

Daily Brief Industrials: SCREEN Holdings, Hyundai Motor, Outsourcing Inc, Lockheed Martin, Benefit One Inc, 3M Co, Paccar Inc, Raytheon Technologies and more

By | Daily Briefs, Industrials

In today’s briefing:

  • Screen Holdings (7735): Share Price Straight Up, Financials Not so Simple
  • Samhyun IPO Preview
  • (Mostly) Asia-Pac Weekly Risk Arb Wrap: QV Equities, Orecorp, Benesse, Glosel, Outsourcing
  • Lockheed Martin: How Bad Is The Impact of Delays in Government Budget? – Major Drivers
  • Weekly Deals Digest (04 Feb) – Benefit One, Benesse, Outsourcing, Glosel, Hollysys, OreCorp, QVE
  • Last Week in Event SPACE: Benefit One, Guoco, Outsourcing, Hang Lung, Hollysys, Dalek
  • 3M Company: How Geographic Shifts and Portfolio Magic Could Boost Growth! – Major Drivers
  • PACCAR Inc: Can The Newly Refreshed Product Lineup Change The Game? – Major Drivers
  • RTX Corporation: Can Their Investments In Differentiated Technologies Further Build Their Competitive Moat? – Major Drivers

Screen Holdings (7735): Share Price Straight Up, Financials Not so Simple

By Scott Foster

  • The share price was up 4.4% on Friday – and up 2.3x since the end of October – raising forward valuations to the high side of their usual range.
  • Management raised FY Mar-24 operating profit guidance slightly after 3Q results that were strong YoY but flat QoQ. 4Q should be better as finished goods inventory is shipped.
  • Operating efficiency has improved and a new semiconductor up-cycle has begun, but the numbers suggest caution. Take profits and reassess.

Samhyun IPO Preview

By Douglas Kim

  • Samhyun is getting ready to complete its IPO on the KOSDAQ exchange in March. The IPO total offering amount is 40 billion won to 50 billion won. 
  • The company generated sales of 99.8 billion won (up 45.5% YoY) and operating profit of 9.8 billion won (up 250% YoY) in 2023.
  • Samhyun developed one of the world’s first CVVD (Continuously Variable Valve Duration) technology for automobile engines, which improves fuel efficiency by controlling the engine’s valve opening time. 

(Mostly) Asia-Pac Weekly Risk Arb Wrap: QV Equities, Orecorp, Benesse, Glosel, Outsourcing

By David Blennerhassett

Lockheed Martin: How Bad Is The Impact of Delays in Government Budget? – Major Drivers

By Baptista Research

  • Lockheed Martin Corporation held its fourth quarter and year-end earnings conference call for 2023, outlining its performance, financial results, and future expectations.
  • The company emphasized strong performance in 2023, driven by considerable demand for its aircraft, helicopters, satellites, radar systems, and other products and services.
  • Lockheed Martin reported a record backlog of $161 billion, with sales for the full year of $67.6 billion, reflecting a 2% year-on year growth.

Weekly Deals Digest (04 Feb) – Benefit One, Benesse, Outsourcing, Glosel, Hollysys, OreCorp, QVE

By Arun George

Last Week in Event SPACE: Benefit One, Guoco, Outsourcing, Hang Lung, Hollysys, Dalek

By David Blennerhassett

3M Company: How Geographic Shifts and Portfolio Magic Could Boost Growth! – Major Drivers

By Baptista Research

  • 3M has shown solid operational improvements in its fourth-quarter results, which could translate into an exciting year ahead for the company, despite the ongoing pandemic-related challenges.
  • The company reported strong adjusted EPS growth of 11% and operating margin expansion of 180 basis points, with significant contributions from its restructuring program aimed at streamlining operations, reducing costs and improving productivity.
  • Baptista Research looks to evaluate the different factors that could influence the company’s price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology.

PACCAR Inc: Can The Newly Refreshed Product Lineup Change The Game? – Major Drivers

By Baptista Research

  • PACCAR, a leading American truck manufacturing company, showcased impressive performance in their fourth quarter 2023 earnings conference call.
  • The company reported record annual revenues of $35.1 billion and a net income of $4.6 billion, marking an impressive after-tax return on revenue of 13.1%.
  • This positive trend was primarily driven by record deliveries of the company’s DAF, Kenworth and Peterbilt trucks, strong results in its parts division and consistent financial services performance.

RTX Corporation: Can Their Investments In Differentiated Technologies Further Build Their Competitive Moat? – Major Drivers

By Baptista Research

  • RTX Corporation held its Q4 2023 earnings conference call with senior executives such as Chairman and CEO Greg Hayes, incoming CEO Chris Calio and Chief Financial Officer Neil Mitchill.
  • The call highlighted a leadership change with the transition of current CEO, Greg Hayes, to Executive Chairman, and Chris Calio assuming the role of CEO.
  • The company reported strong full-year results with $74.3 billion in adjusted sales, a growth of 11% organically, and adjusted EPS of $5.06, a growth of 6% year-over-year.

💡 Before it’s here, it’s on Smartkarma

Sign Up for Free

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
Sign Up for Free