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Smartkarma Daily Briefs

Daily Brief Equity Bottom-Up: L’Occitane (973 HK):  Underlying Fundamentals Intact and more

By | Daily Briefs, Equity Bottom-Up

In today’s briefing:

  • L’Occitane (973 HK):  Underlying Fundamentals Intact
  • Globalfoundries Not Amused By TSMC’s European JV
  • [Week 1] Namaste India 🙏 | Whirlpool Stock Performance Is Good, Earnings Are Not
  • Trip.com Q223 Quick Take: Revenue, EPS > Consensus | Guidance? Not Much | Still No Upside Surprises
  • Komatsu (6301) | A Winning Bet on Onshoring and Electrification
  • Intel Does A Surprising Side Deal With Tower Semi
  • China Longyuan (916 HK): Value Has Definitely Emerged
  • Secure Trust Bank – One-off impairment masks underlying PBT beat
  • Medtronic (MDT US): Q1 Result Exceeds Forecast; FY24 Guidance Raised on Higher Surgery Volumes
  • 1Q Follow-Up – Takamiya (2445 JP)


L’Occitane (973 HK):  Underlying Fundamentals Intact

By Steve Zhou, CFA

  • L’Occitane (973 HK) announced after market close yesterday that the controlling shareholder has terminated the potential general offer. 
  • Shares trade at a significant discount to global cosmetics peers and its own historical trading range, while brands’ growth momentum remain intact. 
  • Take advantage of any potential significant sell-down caused by the drop of the privatization attempt. 

Globalfoundries Not Amused By TSMC’s European JV

By William Keating

  • Globalfoundries may be considering filing a complaint regarding TSMC’s recently announced European JV with three of their customers, Bosch, Infineon and NXP
  • Yet they just inked their own deal for a JV with ST Micro in France. What gives?
  • In conjunction with their recent CFO hiring fiasco, one wonders if all is well with the GF leadership team. 

[Week 1] Namaste India 🙏 | Whirlpool Stock Performance Is Good, Earnings Are Not

By Pranav Bhavsar


Trip.com Q223 Quick Take: Revenue, EPS > Consensus | Guidance? Not Much | Still No Upside Surprises

By Daniel Hellberg

  • Strong Q2 results out Tuesday morning beat consensus Revenue and core EPS estimates
  • But concerns remain about expense control and longevity of ongoing demand recovery
  • Great Q2 results, yes, but we think investors want more clarity about H2 demand

Komatsu (6301) | A Winning Bet on Onshoring and Electrification

By Mark Chadwick

  • We turned bullish on Komatsu a year ago and the stock has since returned over 50%.
  • Komatsu is trading at 10x EV/EBIT versus an historical average of 11x, with a target price of ¥5,100/share.
  • Komatsu represents a cheaper way to play the theme of onshoring and long-term mining demand from electrification.

Intel Does A Surprising Side Deal With Tower Semi

By William Keating

  • Tower Semi will pay Intel $300 million to acquire and own equipment and other fixed assets to be installed in the New Mexico facility
  • Intel’s termination fee on the failure of the proposed Tower Semi acquisition was $353 million
  • It’s quite the clever move and doesn’t require China’s approval…

China Longyuan (916 HK): Value Has Definitely Emerged

By Osbert Tang, CFA

  • China Longyuan Power (916 HK) is now attractively priced at 5.9x and 5.2x PERs for FY23 and FY24, respectively. The 2Q23 result clearly showed that business is gathering momentum.
  • Margins have demonstrated good improvement despite weaker tariffs and coal sale business. With a very low base in last year, its 2H23 earnings growth will be impressive.
  • There is positive progress on new project sign-up which has secured its pipeline. Asset injection from parent will stay as a major theme in the next two years.

Secure Trust Bank – One-off impairment masks underlying PBT beat

By Edison Investment Research

In its H123 results, Secure Trust Bank (STB) delivered an 11% y o y increase in operating income, overcoming margin pressure on rising interest rates. However, PBT was £16.5m, 4% lower than in H122 as the bank incurred a one-off impairment charge of £7.0m stemming from a long-standing debt case in Commercial Finance. Excluding this charge, PBT was £23.5m, which implies a 6% beat on our estimates on an annualised basis. Across the group, underlying impairments are resilient, especially in Vehicle Finance where impairments fell to 2.4% (H122: 8.0%) as lending shifted to prime borrowers. We have increased our FY23 and FY24 continuing PBT forecasts to £45m and £55m respectively, leaving the stock trading at P/E ratios of only 4.0x in FY23 and 3.1x in FY24.


Medtronic (MDT US): Q1 Result Exceeds Forecast; FY24 Guidance Raised on Higher Surgery Volumes

By Tina Banerjee

  • Medtronic Plc (MDT US) announced better-than-expected Q1FY24 result. Revenue of $7.7B increased 6% on organic basis, ahead of guidance of 4.5%. Each of four segments delivered 6% organic revenue growth.
  • Adjusted EPS increased 6% YoY to $1.20, ahead of guidance of $1.10–1.12. Outperformance was driven by better-than-expected operational performance and lesser-than-expected unfavorable impact from foreign currency translation.
  • The company increased FY24 organic revenue growth guidance to 4.5% versus the prior range of 4.0% to 4.5% and adjusted EPS guidance to $5.08–5.16, 7 cent increase at midpoint.

1Q Follow-Up – Takamiya (2445 JP)

By Sessa Investment Research

  • Takamiya announced its 1Q results for FY24/3 on August 4, after the close of trading.
  • Key figures on a consolidated basis were sales of ¥9,896 mn (+9.7% YoY), operating profit rose 125.5% YoY, to ¥409 mn, ordinary profit rose 41.0%YoY, to ¥615 mn, and quartery net profit rose 33.0%YoY, to ¥417 mn.
  • An overview by business segment is as follows

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Daily Brief Macro: Asset Allocation Watch: Still early innings for US cyclicals? and more

By | Daily Briefs, Macro

In today’s briefing:

  • Asset Allocation Watch: Still early innings for US cyclicals?
  • CX Daily: Are Chinese Solar Giants Flying Too Close to the Sun?
  • Energy Watch: Can oil rally 25% further in Q4?
  • The Energy Cable #36 – Will We Finally See Chinese Demand with the New Stimulus?
  • The S&P 500 Index Needs a Macro Miracle!


Asset Allocation Watch: Still early innings for US cyclicals?

By Andreas Steno

  • Each month, we offer our best assessment of the current and coming month’s macroeconomic conditions and weigh risks against reward – using both our Macro Regime Indicator Framework in combination with the interactive Structural Asset Allocation Model.
  • Coming into August, we wrote that: “We have (over the prior month) grown in confidence that the Manufacturing cycle is actually bouncing and that portfolios accordingly have to adjust.
  • This month, we see 1) rising headline, but falling core inflation, 2) rising PMIs and 3) lower liquidity – the so-called ‘QT-regime’.”Looking ahead, we do not expect sudden shocks or changes to the current conditions.

CX Daily: Are Chinese Solar Giants Flying Too Close to the Sun?

By Caixin Global

  • Solar /Cover Story: Are Chinese solar giants flying too close to the sun?
  • ASEAN Summit /: Chinese Premier Li Qiang to visit Indonesia for ASEAN Summit
  • Stocks /: China tightens oversight of program trading in stock market

Energy Watch: Can oil rally 25% further in Q4?

By Andreas Steno

  • Welcome to this short and sweet Energy Watch on the back of the Saudi/Russian decision to prolong cuts of supply through Q4.
  • It leaves a smell of 2022 in the air and we note how the USD, bond yields AND energy/commodity prices move up in tandem.
  • An odd cocktail, which can only happen, when Zars and Muftis are in charge of the supply/demand balance in global energy markets.

The Energy Cable #36 – Will We Finally See Chinese Demand with the New Stimulus?

By Ulrik Simmelholt

  • In this edition of your maverick energy/commodity newsletter from both sides of the pond, we discuss whether the Chinese stimulus will finally see demand picking up markedly in China and whether this could lead to Energy becoming THE consensus bet again.
  • Let’s dive right in! 
  • Will we finally see Chinese demand with the new stimulus?

The S&P 500 Index Needs a Macro Miracle!

By Jeroen Blokland

  • Our simple regression analysis yields an S&P 500 Index estimate of 3,710, or 18% lower than the last closing price of 4,515 based on the latest ISM Manufacturing number.
  • An ISM Manufacturing Index of 56.5., which means the economy must boom, starkly contrasting with the initial signs of a cooling labor market.
  • If a ‘soft landing’ occurs, our S&P 500 estimate with an ISM of 52 equals 3,990, 12% lower than the current closing price.

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Daily Brief Australia: Boss Resources, Orora Ltd, Kinatico and more

By | Australia, Daily Briefs

In today’s briefing:

  • Mergers, Acquisitions and Potential S&P/ASX Index Ad Hoc Inclusions
  • Orora Limited Placement – Large Deal to Digest, Although Seems Well Flagged and Accretive
  • Kinatico Ltd – The Power of SaaS Drives H2 and FY23 Profit


Mergers, Acquisitions and Potential S&P/ASX Index Ad Hoc Inclusions

By Brian Freitas

  • There are a bunch of stocks that are constituents of the S&P/ASX family of indices and could go private or merge prior to the next scheduled rebalance in December.
  • That will lead to ad hoc inclusions for the S&P/ASX 200 (AS51 INDEX) and could also lead to ad hoc inclusions for the S&P/ASX 50 and S&P/ASX 100 indices.
  • There is a fair amount of short interest on some of the potential inclusions and short covering due to index inclusion could take the stocks higher.

Orora Limited Placement – Large Deal to Digest, Although Seems Well Flagged and Accretive

By Clarence Chu

  • Orora Ltd (ORA AU) is looking to raise A$1,345m (~US$870m) via a primary placement and an entitlement offer to partially fund its acquisition of Saverglass.
  • While the exact size/target of an acquisition wasn’t explicitly mentioned earlier, the firm had discussed its potential use of M&A to grow its North American/Europe regions. 
  • Including the entitlement offer, the deal would represent 212 days of three month ADV and add 58.9% to the firm’s total shares outstanding.

Kinatico Ltd – The Power of SaaS Drives H2 and FY23 Profit

By Research as a Service (RaaS)

  • Kinatico Ltd (ASX:KYP) is a ‘Know Your People” regtech company providing workforce compliance monitoring and management technology and services.
  • KYP has reported FY23 NPAT of $0.237m, an increase of 116% on the previous corresponding period (pcp), the company’s best-ever result.
  • On an adjusted basis (for non-cash items), NPAT was $0.75m, a turnaround of $1.5m on the prior period while the gross margin and EBITDA margin hit record levels of 65.7% and 11.2% respectively. 

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Daily Brief South Korea: Doosan Robotics, Shinsung ST and more

By | Daily Briefs, South Korea

In today’s briefing:

  • Changes to a Points Based System for IPO Subscriptions in Korea
  • Shinsung ST IPO Preview
  • Shinsung ST IPO Valuation Analysis


Changes to a Points Based System for IPO Subscriptions in Korea

By Douglas Kim

  • In order to reduce fake subscriptions for IPOs in Korea, the financial regulators have changed the IPO subscription system to extend the number of subscription days from two to five.
  • Plus, points based system is implemented so that investors will be given higher points for subscribing on the first day as opposed to the fifth day.
  • Doosan Robotics will be a key company to look out for in terms of how this book building changes could impact its IPO as most upcoming IPOs are small caps. 

Shinsung ST IPO Preview

By Douglas Kim

  • The IPO price range of Shinsung ST is from 22,000 won to 25,000 won and the expected IPO offering amount is from 44 billion won to 50 billion won.
  • Shinsung ST produces busbars that connect currents of electric components in secondary battery batteries for EVs and ESSs, and module cases that protect battery cells from external shocks.
  • The total order backlog of the company’s products reached 1.5 trillion won at the end of 2022. Order backlog ratio is 14x, which is very high. 

Shinsung ST IPO Valuation Analysis

By Douglas Kim

  • Our base case valuation is implied price per share of 51,050 won, which is 104% higher than the high end of the IPO price range of 25,000 won. 
  • We estimate Shinsung ST to generate sales of 133.9 billion won (up 25.7% YoY) and operating profit of 15.4 billion won (up 94.6% YoY) in 2023. 
  • Our valuation sensitivity analysis suggests an IPO price range of 41,351 won to 61,771 won per share.

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Daily Brief Japan: JFE Holdings, Komatsu Ltd, Tokyo Stock Exchange Tokyo Price Index Topix, Srg Takamiya and more

By | Daily Briefs, Japan

In today’s briefing:

  • JFE Holdings (5411) Stock+CB Offering
  • JFE Holdings Placement – Well Flagged, but Would Probably Need a Wider Correction
  • Komatsu (6301) | A Winning Bet on Onshoring and Electrification
  • Judicial Decisions Are Also Important to Clarify the Nature of the Diversity Issues
  • 1Q Follow-Up – Takamiya (2445 JP)


JFE Holdings (5411) Stock+CB Offering

By Travis Lundy

  • Today JFE Holdings (5411 JP) announced it would raise ~JPY 121bn in an equity offering of 55mm treasury shares and JPY 90bn in a Convertible Bond offering. 
  • ¥125bn will be spent on capex for expansion, ¥75bn for capex, investments, and R&D related to decarbonisation, as well as repayment of debt to 2028.
  • This is a heavier than a “normal” equity offering. And recent large-ish equity offerings seem to have more volatility in outcome (post-offer overhang, or squeeze) than previous years.

JFE Holdings Placement – Well Flagged, but Would Probably Need a Wider Correction

By Clarence Chu

  • JFE Holdings (5411 JP) is looking to raise around US$870m to fund its capacity expansion plans. Together with the offering, it will undertake a US$610m CB issuance.
  • The deal appears to be well flagged with the firm disclosing its JV and other related CapEx plans in its earlier earnings announcement.
  • Overall, the new shares would result in a 8.2% dilution and represent 12 days of three month ADV.

Komatsu (6301) | A Winning Bet on Onshoring and Electrification

By Mark Chadwick

  • We turned bullish on Komatsu a year ago and the stock has since returned over 50%.
  • Komatsu is trading at 10x EV/EBIT versus an historical average of 11x, with a target price of ¥5,100/share.
  • Komatsu represents a cheaper way to play the theme of onshoring and long-term mining demand from electrification.

Judicial Decisions Are Also Important to Clarify the Nature of the Diversity Issues

By Aki Matsumoto

  • A survey result supports that the fact that women temporarily leave the workplace due to childbirth or childcare is detrimental to their careers.
  • Since there’re issues that require solutions not only for companies but for society, judicial decisions will encourage companies to make female employees subject to the same conditions as male employees.
  • While more companies may take this ruling as an opportunity to consider conventional HR practices, since cases of employees going to court are rare, some companies may not act immediately.

1Q Follow-Up – Takamiya (2445 JP)

By Sessa Investment Research

  • Takamiya announced its 1Q results for FY24/3 on August 4, after the close of trading.
  • Key figures on a consolidated basis were sales of ¥9,896 mn (+9.7% YoY), operating profit rose 125.5% YoY, to ¥409 mn, ordinary profit rose 41.0%YoY, to ¥615 mn, and quartery net profit rose 33.0%YoY, to ¥417 mn.
  • An overview by business segment is as follows

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Daily Brief China: Golden Eagle Retail, L’Occitane, Trip.com, China Longyuan Power, WuXi AppTec, Lenovo and more

By | China, Daily Briefs

In today’s briefing:

  • Golden Eagle (3308 HK): CCASS Movements Are Standard Fare
  • L’Occitane (973 HK):  Underlying Fundamentals Intact
  • Trip.com Q223 Quick Take: Revenue, EPS > Consensus | Guidance? Not Much | Still No Upside Surprises
  • China Longyuan (916 HK): Value Has Definitely Emerged
  • Hong Kong CEO & Director Dealings (6 Sept): WuXi AppTec, Peking University, FriendTimes
  • Morning Views Asia: China Vanke , Lenovo, Vedanta Resources, Yuexiu Property


Golden Eagle (3308 HK): CCASS Movements Are Standard Fare

By David Blennerhassett

  • Back on the 28th May, PRC department store play Golden Eagle (3308 HK) announced a privatisation offer, by way of a Scheme, at $6.88/share, a 40.41% premium to last close.
  • The Offeror is the Wang family, who together with concert parties, held 80.29%. 7.18% of the 19.71% held by the disinterested stakeholders have given irrevocables in favour of the Scheme.
  • Ahead of the Scheme Meeting on September 15th, a significant amount of shares have moved out of CCASS. This is not something to concern investors. 

L’Occitane (973 HK):  Underlying Fundamentals Intact

By Steve Zhou, CFA

  • L’Occitane (973 HK) announced after market close yesterday that the controlling shareholder has terminated the potential general offer. 
  • Shares trade at a significant discount to global cosmetics peers and its own historical trading range, while brands’ growth momentum remain intact. 
  • Take advantage of any potential significant sell-down caused by the drop of the privatization attempt. 

Trip.com Q223 Quick Take: Revenue, EPS > Consensus | Guidance? Not Much | Still No Upside Surprises

By Daniel Hellberg

  • Strong Q2 results out Tuesday morning beat consensus Revenue and core EPS estimates
  • But concerns remain about expense control and longevity of ongoing demand recovery
  • Great Q2 results, yes, but we think investors want more clarity about H2 demand

China Longyuan (916 HK): Value Has Definitely Emerged

By Osbert Tang, CFA

  • China Longyuan Power (916 HK) is now attractively priced at 5.9x and 5.2x PERs for FY23 and FY24, respectively. The 2Q23 result clearly showed that business is gathering momentum.
  • Margins have demonstrated good improvement despite weaker tariffs and coal sale business. With a very low base in last year, its 2H23 earnings growth will be impressive.
  • There is positive progress on new project sign-up which has secured its pipeline. Asset injection from parent will stay as a major theme in the next two years.

Hong Kong CEO & Director Dealings (6 Sept): WuXi AppTec, Peking University, FriendTimes

By David Blennerhassett

  • The data in this insight is collated from the “shareholding disclosure” link on the HKEx website.
  • Often there is a corresponding HKEx announcement on the increase – or decrease – in the shareholding by directors. Or pledging. However, such disclosures are by no means an absolute.
  • The key stocks mentioned in this regular insight are WuXi AppTec (2359 HK), Peking University Resources (618 HK), and FriendTimes Inc (6820 HK).

Morning Views Asia: China Vanke , Lenovo, Vedanta Resources, Yuexiu Property

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.


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Daily Brief United States: ARM Holdings, GLOBALFOUNDRIES , Intel Corp, Medtronic Plc, Aspira Women’s Health and more

By | Daily Briefs, United States

In today’s briefing:

  • ARM Holdings Pre-IPO – Thoughts on Valuations
  • Globalfoundries Not Amused By TSMC’s European JV
  • Intel Does A Surprising Side Deal With Tower Semi
  • Medtronic (MDT US): Q1 Result Exceeds Forecast; FY24 Guidance Raised on Higher Surgery Volumes
  • ARM Holdings IPO – Thoughts on Valuation – Still Very Demanding
  • Aspira Women’s Health, Inc. – Signs Exclusive Agreement with University of Oxford


ARM Holdings Pre-IPO – Thoughts on Valuations

By Sumeet Singh

  • Softbank Group (9984 JP) aims to raise around US$8-10bn via selling some of its stake in ARM Holdings‘ US IPO.
  • ARM develops and licences 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 our earlier note, we looked at Arm’s past performance and undertook a peer comparison. In this note, we talk about valuations.

Globalfoundries Not Amused By TSMC’s European JV

By William Keating

  • Globalfoundries may be considering filing a complaint regarding TSMC’s recently announced European JV with three of their customers, Bosch, Infineon and NXP
  • Yet they just inked their own deal for a JV with ST Micro in France. What gives?
  • In conjunction with their recent CFO hiring fiasco, one wonders if all is well with the GF leadership team. 

Intel Does A Surprising Side Deal With Tower Semi

By William Keating

  • Tower Semi will pay Intel $300 million to acquire and own equipment and other fixed assets to be installed in the New Mexico facility
  • Intel’s termination fee on the failure of the proposed Tower Semi acquisition was $353 million
  • It’s quite the clever move and doesn’t require China’s approval…

Medtronic (MDT US): Q1 Result Exceeds Forecast; FY24 Guidance Raised on Higher Surgery Volumes

By Tina Banerjee

  • Medtronic Plc (MDT US) announced better-than-expected Q1FY24 result. Revenue of $7.7B increased 6% on organic basis, ahead of guidance of 4.5%. Each of four segments delivered 6% organic revenue growth.
  • Adjusted EPS increased 6% YoY to $1.20, ahead of guidance of $1.10–1.12. Outperformance was driven by better-than-expected operational performance and lesser-than-expected unfavorable impact from foreign currency translation.
  • The company increased FY24 organic revenue growth guidance to 4.5% versus the prior range of 4.0% to 4.5% and adjusted EPS guidance to $5.08–5.16, 7 cent increase at midpoint.

ARM Holdings IPO – Thoughts on Valuation – Still Very Demanding

By Sumeet Singh

  • Softbank Group (9984 JP) aims to raisebetween US$4.5-4.9bn via selling some of its stake in ARM Holdings‘ US IPO.
  • ARM develops and licences 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 our previous notes, we looked at the company’s past performance. In this note, we talk about valuation.

Aspira Women’s Health, Inc. – Signs Exclusive Agreement with University of Oxford

By Water Tower Research

  • Agreement with University of Oxford. On August 31, 2023, Aspira Women’s Health announced that it has entered into a material transfer agreement with the University of Oxford for the procurement of serum samples to be used to verify and validate AWH’s endometriosis blood testing algorithms.

  • This means that AWH will be able to use the samples to support the launch of EndoCheckSM, its first-generation blood test to aid in the diagnosis of endometriosis.

  • Verifying the test. This involves taking a test and comparing known samples to run against the test, verifying the test actually works. 


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Daily Brief India: Indusind Bank, Whirlpool of India, NIFTY Index, Lenovo and more

By | Daily Briefs, India

In today’s briefing:

  • Indusind Bank: When Half the Staff Left, Why Didn’t Independent Directors Think It Worth Mentioning?
  • [Week 1] Namaste India 🙏 | Whirlpool Stock Performance Is Good, Earnings Are Not
  • EQD | NIFTY Index WEEKLY Resistance Analysis
  • Morning Views Asia: China Vanke , Lenovo, Vedanta Resources, Yuexiu Property


Indusind Bank: When Half the Staff Left, Why Didn’t Independent Directors Think It Worth Mentioning?

By Hemindra Hazari

  • Indusind Bank (IIB IN) reported 51% attrition in FY2023 from 37% in FY2022
  • In the annual report the directors completely ignored acknowledging or discussing the attrition apart from the mandatory disclosure
  • The sharply rising attrition indicates poor human resource policies in recruitment and training which adversely impact cost management

[Week 1] Namaste India 🙏 | Whirlpool Stock Performance Is Good, Earnings Are Not

By Pranav Bhavsar


EQD | NIFTY Index WEEKLY Resistance Analysis

By Nico Rosti

  • After a -5 weeks correction in August, the NIFTY Index has restarted its Bull run, ongoing from mid-March 2020. Let’s have a look to where MRM WEEKLY resistance levels are.
  • The current pattern is BULLISH, the index could rise easily another 2-3 weeks from here.
  • Target prices for a reversal (or pullback within the uptrend) are between 19846 -20294

Morning Views Asia: China Vanke , Lenovo, Vedanta Resources, Yuexiu Property

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.


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Most Read: Lasertec Corp, Mercari , ZOZO Inc, JFE Holdings, EcoPro Materials, Boss Resources, Golden Eagle Retail, Orora Ltd, ARM Holdings and more

By | Daily Briefs, Most Read

In today’s briefing:

  • September Nikkei 225 Review – Lasertec, Mercari, Nitori IN, Expected DELETEs Out (Matsui the Biggie)
  • Nikkei 225 Index Rebalance: Mercari, Lasertec, Nitori IN; Nippon Glass, Mitsui E&S, Matsui Sec OUT
  • March 2024 Nikkei 225 Rebal – Look for Zozo, Ryohin Keikaku, and Maybe a Socionext Split
  • JFE Holdings (5411) Stock+CB Offering
  • Korea’s Latest IPO Rule Change: Daily Differential Allocation
  • Mergers, Acquisitions and Potential S&P/ASX Index Ad Hoc Inclusions
  • Golden Eagle (3308 HK): CCASS Movements Are Standard Fare
  • JFE Holdings Placement – Well Flagged, but Would Probably Need a Wider Correction
  • Orora Limited Placement – Large Deal to Digest, Although Seems Well Flagged and Accretive
  • ARM Holdings Pre-IPO – Thoughts on Valuations


September Nikkei 225 Review – Lasertec, Mercari, Nitori IN, Expected DELETEs Out (Matsui the Biggie)

By Travis Lundy


Nikkei 225 Index Rebalance: Mercari, Lasertec, Nitori IN; Nippon Glass, Mitsui E&S, Matsui Sec OUT

By Brian Freitas


March 2024 Nikkei 225 Rebal – Look for Zozo, Ryohin Keikaku, and Maybe a Socionext Split

By Travis Lundy


JFE Holdings (5411) Stock+CB Offering

By Travis Lundy

  • Today JFE Holdings (5411 JP) announced it would raise ~JPY 121bn in an equity offering of 55mm treasury shares and JPY 90bn in a Convertible Bond offering. 
  • ¥125bn will be spent on capex for expansion, ¥75bn for capex, investments, and R&D related to decarbonisation, as well as repayment of debt to 2028.
  • This is a heavier than a “normal” equity offering. And recent large-ish equity offerings seem to have more volatility in outcome (post-offer overhang, or squeeze) than previous years.

Korea’s Latest IPO Rule Change: Daily Differential Allocation

By Sanghyun Park

  • Korea FSS has provided guidelines to assign different weights to IPO orders from Day 1 to Day 5. Bookrunners should give higher weights to institutions that place their orders early.
  • The question of whether this will deter the rush to place bulk orders close to the deadline and lead to a higher weighting of essential pricing is generating significant interest.
  • The volume of orders and allocation by price range could serve as practical clues for assessing post-IPO pricing, making it a crucial factor in formulating post-IPO trading strategies.

Mergers, Acquisitions and Potential S&P/ASX Index Ad Hoc Inclusions

By Brian Freitas

  • There are a bunch of stocks that are constituents of the S&P/ASX family of indices and could go private or merge prior to the next scheduled rebalance in December.
  • That will lead to ad hoc inclusions for the S&P/ASX 200 (AS51 INDEX) and could also lead to ad hoc inclusions for the S&P/ASX 50 and S&P/ASX 100 indices.
  • There is a fair amount of short interest on some of the potential inclusions and short covering due to index inclusion could take the stocks higher.

Golden Eagle (3308 HK): CCASS Movements Are Standard Fare

By David Blennerhassett

  • Back on the 28th May, PRC department store play Golden Eagle (3308 HK) announced a privatisation offer, by way of a Scheme, at $6.88/share, a 40.41% premium to last close.
  • The Offeror is the Wang family, who together with concert parties, held 80.29%. 7.18% of the 19.71% held by the disinterested stakeholders have given irrevocables in favour of the Scheme.
  • Ahead of the Scheme Meeting on September 15th, a significant amount of shares have moved out of CCASS. This is not something to concern investors. 

JFE Holdings Placement – Well Flagged, but Would Probably Need a Wider Correction

By Clarence Chu

  • JFE Holdings (5411 JP) is looking to raise around US$870m to fund its capacity expansion plans. Together with the offering, it will undertake a US$610m CB issuance.
  • The deal appears to be well flagged with the firm disclosing its JV and other related CapEx plans in its earlier earnings announcement.
  • Overall, the new shares would result in a 8.2% dilution and represent 12 days of three month ADV.

Orora Limited Placement – Large Deal to Digest, Although Seems Well Flagged and Accretive

By Clarence Chu

  • Orora Ltd (ORA AU) is looking to raise A$1,345m (~US$870m) via a primary placement and an entitlement offer to partially fund its acquisition of Saverglass.
  • While the exact size/target of an acquisition wasn’t explicitly mentioned earlier, the firm had discussed its potential use of M&A to grow its North American/Europe regions. 
  • Including the entitlement offer, the deal would represent 212 days of three month ADV and add 58.9% to the firm’s total shares outstanding.

ARM Holdings Pre-IPO – Thoughts on Valuations

By Sumeet Singh

  • Softbank Group (9984 JP) aims to raise around US$8-10bn via selling some of its stake in ARM Holdings‘ US IPO.
  • ARM develops and licences 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 our earlier note, we looked at Arm’s past performance and undertook a peer comparison. In this note, we talk about valuations.

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Daily Brief Australia: Liontown Resources, S&P/ASX 200, Pioneer Credit, Carly Holdings and more

By | Australia, Daily Briefs

In today’s briefing:

  • Liontown Resources (LTR AU): Albemarle’s Final A$3.00 Offer
  • EQD | SP/ASX200 Index: Will It Break Out of Its Range?
  • Pioneer Credit Limited – Return to Profitable Growth
  • Carly Holdings Limited – Strong Growth in FY23


Liontown Resources (LTR AU): Albemarle’s Final A$3.00 Offer

By Arun George

  • Liontown Resources (LTR AU) has received a revised non-binding privatisation proposal from Albemarle Corp (ALB US) at A$3.00 per share, a 20.0% premium to the previously rejected offer of A$2.50.
  • The revised offer is attractive compared to the Kathleen Valley Lithium Project’s NPV range, peer multiples and historical share prices. The offer price is final, barring a superior proposal.
  • Liontown has granted Albemarle a limited period of exclusive due diligence. The Board intends to recommend a binding proposal at A$3.00 per share. The retail vote could be a risk.

EQD | SP/ASX200 Index: Will It Break Out of Its Range?

By Nico Rosti

  • The S&P/ASX 200 INDEX has been stuck in the 7000-7600 range for the past 2 years, with a brief dive to 6500 during the summer of 2022. 
  • If we consider the bottom at 6411 in October 2022, the index may have started to build an uptrend since then, but failed repeatedly to breach past the 7600 barrier.
  • After a brief correction in August 2023, the index is currently rising, but soon it will encounter WEEKLY resistance that could hamper its chances of breaking out of its range.

Pioneer Credit Limited – Return to Profitable Growth

By Research as a Service (RaaS)

  • Pioneer Credit Limited (ASX:PNC) was founded in 2009 and listed on the ASX in 2014. The company has grown to be one of the leading acquirers and managers of impaired credit in Australia by maintaining strong customer engagement, an unblemished compliance record with ASIC and strong relationships with Australia’s largest bank and non-bank lenders.
  • PNC currently purchases debt from 18 different vendor partners with long-term partnership purchasing arrangements in place with Commonwealth Bank of Australia (ASX:CBA).
  • A change to Australian Accounting Standards in 2019 and subsequent audit uncertainty resulted in significant corporate disruption. 

Carly Holdings Limited – Strong Growth in FY23

By Research as a Service (RaaS)

  • Carly Holdings Limited (ASX:CL8) operates a vehicle subscription business, which it launched in March 2019, leveraging existing operations, strategic relationships and technology.
  • Car subscription allows business and retail customers to pay a single monthly fee to access a car for 30 days or more and is an alternative to purchasing or financing a vehicle.
  • Carly has attracted larger automotive industry businesses as shareholders, with a direct offering and services to support automotive manufacturers and dealers to generate revenue form car subscriptions. 

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