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Smartkarma Daily Briefs

Aug 18
0

Most Read: Ramelius Resources, Celltrion Inc, Celltrion Healthcare , Sanei Architecture Planning, Hwatsing Technology , T&K Toka Co Ltd, Amorepacific Group, Lotte Tour Development Co, Ltd., Trent Ltd and more

By | Daily Briefs, Most Read

In today’s briefing:

  • S&P/​​​​​​​​​ASX Index Rebalance Preview: Potential Adds Have Outperformed
  • Celltrion Merger: Index Implications
  • Celltrion Merger Swap: Conditions & Schedule
  • Celltrion (068270 KS) Merger with Celltrion Healthcare (091990 KS)
  • Sanei Architecture Planning (3228) Finds Saviour from Mafia-Linked Former Boss and Majority Owner
  • Quiddity Leaderboard STAR 50 Dec 23: The Real Deal
  • Second Go-Round Tender for T&K TOKA (4636) As Bain Wants It All At ¥1,400/Share
  • Amorepacific Group: SoTP Valuation and Meaning of Min-Jung Suh Taking One Year Leave of Absence
  • Addressing Misconceptions: Lotte Tour’s Short-Selling Entry Point
  • NIFTY NEXT50 Index Rebalance: Five Changes; Big Impact; Cross Index Flow

S&P/​​​​​​​​​ASX Index Rebalance Preview: Potential Adds Have Outperformed

By Brian Freitas

  • We forecast 26 changes across the ASX50 Index, ASX100 Index, S&P/ASX 200 (AS51 INDEX) and ASX300 Index at the September rebalance.
  • The review period ends tomorrow, so most changes are high probability. Though there are some changes that will be up to the discretion of the index committee.
  • There will be a lot of stock to trade on the changes to the ASX200 and indices higher up the hierarchy. But there will be a lot of pre-positioning too.

Celltrion Merger: Index Implications

By Brian Freitas

Celltrion Merger Swap: Conditions & Schedule

By Sanghyun Park

  • The swap prices, ₩148,853 for Celltrion Inc and ₩66,874 for Celltrion Healthcare, specified below are not tentative prices but confirmed prices. So, the merger ratio has been determined as 1:0.4492620.
  • The key focus now is the appraisal rights exercise. Both offer attractive spreads. Yet, the ₩1T combined ceiling might seem restricted considering potential dissenting Celltrion Inc shareholders exceeding expectations.
  • Nonetheless, considering the strong determination of the company towards this merger, we should consider a strategy of approaching this spread aggressively while keeping the cancellation risk in mind.

Celltrion (068270 KS) Merger with Celltrion Healthcare (091990 KS)

By Arun George

  • Celltrion Inc (068270 KS) will merger with Celltrion Healthcare (091990 KS). Celltrion Healthcare shareholders will receive 0.4492620 Celltrion shares per Celltrion Healthcare share. 
  • The merger requires shareholder (approval by at least two-thirds of the votes of the shareholders present representing at least one-third of the outstanding shares) and Fair Trade Commission approval.
  • The merger ratio, based on regulations, is attractive compared to historical VWAP exchange ratios and multiples. At last close prices, Celltrion Healthcare shares are trading broadly at terms. 

Sanei Architecture Planning (3228) Finds Saviour from Mafia-Linked Former Boss and Majority Owner

By Travis Lundy

  • [cue Tom Hardy gif saying “That’s Bait”]. But yes, this story has a backstory to the Japanese underworld, and while the original sin may have been minor, it’s everything.
  • The firm was raided, the CEO resigned, a govt authority “recommended” Sanei get rid of Mr Koike’s influence, banks got antsy, employee morale dropped. Sanei needed a saviour.
  • Koike-San asked Open House (3288 JP) to buy his shares. They agreed to take over the company. It’s basically a done deal with a possible twist.

Quiddity Leaderboard STAR 50 Dec 23: The Real Deal

By Janaghan Jeyakumar, CFA

  • STAR 50 Index is a tech-focused, blue-chip index in Mainland China which tracks the top 50 largest and most liquid names in the STAR market of the Shanghai Stock Exchange.
  • Recently, I discussed the historical price and volume performance of STAR 50 rebalance events in Quiddity Primer for STAR 50 Index Rebalance Events. 
  • In this insight, we take a look at our expectations for potential ADDs and DELs for the STAR 50 index during the December 2023 Rebalance event.

Second Go-Round Tender for T&K TOKA (4636) As Bain Wants It All At ¥1,400/Share

By Travis Lundy

  • In January 2023, NAVF and Michael 1925 LLC – affiliates of Dalton Investments LLC – announced a hostile partial Tender Offer for T&K Toka Co Ltd (4636 JP). 
  • It failed. They wanted to buy 21.72% at ¥1300 to get to 44% post-Tender. The Company objected. Dalton/etc didn’t get the shares. Shares fell afterward. 
  • Today, Bain announced a deal to take over the company at ¥1,400/share. T&K TOKA has agreed. It may not be as easy as that. And there is a fulcrum investor.

Amorepacific Group: SoTP Valuation and Meaning of Min-Jung Suh Taking One Year Leave of Absence

By Douglas Kim

  • About a week ago, it was announced that Chairman’s elder daughter Min-Jung Suh will take a long one year leave of absence.
  • Chairman Suh is very dissatisfied with the company’s results in the past three years and wants to shake up the company to improve its operations, in our view. 
  • Our base case NAV valuation of Amorepacific Group (002790 KS) is 39,611 won, which is 29% higher than current price.

Addressing Misconceptions: Lotte Tour’s Short-Selling Entry Point

By Sanghyun Park

  • Lotte Tour has emerged as a prominent short-selling target in the Korean market, and there are efforts to use an ₩80B convertible bond (CB) to exploit its dilution/overhang risk.
  • Linden Capital and LMR, upon obtaining the CB, promptly borrowed 4.6M shares from Donghwa for short selling. Thus, the CB conversion incentive remains largely unaffected by stock price changes.
  • We should avoid synchronizing our entry point with CB conversion. Instead, we should target the likely rights issuance in the latter half of the year, anticipated in the market.

NIFTY NEXT50 Index Rebalance: Five Changes; Big Impact; Cross Index Flow

By Brian Freitas

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Aug 17
0

Daily Brief TMT/Internet: Sea , Splitit Ltd, Alibaba (ADR), Tencent, Tesserent Ltd, Intel Corp, Foxconn Industrial Internet, Omron Corp and more

By | Daily Briefs, TMT/Internet

In today’s briefing:

  • Sea Ltd: Share Price Approaching Its Rightful Destination
  • [Sea Limited (SE US, SELL, TP US$35) Target Price Change]: Long-Term Headwinds Amid Upsides in 3Q
  • Splitit Pursues Split From The ASX
  • Alibaba’s DingTalk to Split From Cloud Division and Seek Own IPO, Source Says
  • Tencent (700 HK): 2Q23, Ad and FinTech Recovering, Margin Higher, Buy
  • Tesserent (TNT AU): Scheme Meeting on 18 September
  • Intel Terminates Tower Semi Deal
  • Tencent: Earnings Miss, Cost Controls Help Margins; Slowdown in Domestic Gaming Is Concerning
  • Quiddity Leaderboard SSE50/180 Dec 22: 5 Changes for SSE50 and 18 Changes for SSE180
  • Omron (6645) | Long-Term View Unchanged but Bumpy Ride

Sea Ltd: Share Price Approaching Its Rightful Destination

By Oshadhi Kumarasiri

  • While our outlook for Sea (SE US)‘s 2Q23 was bearish, we didn’t anticipate such a substantial price reaction post-earnings, considering the existing low consensus.
  • However, the market appears to have given more importance to the revenue miss and the deterioration of fundamentals in e-commerce, as indicated by the post-earnings price reaction of -28.7%.
  • Shopee’s modest profitability, restrained growth fail to warrant an EV surpassing $7.0bn. The Gaming business is best valued around $3.0bn, while the Fintech arm should be valued at around $5.0bn.

[Sea Limited (SE US, SELL, TP US$35) Target Price Change]: Long-Term Headwinds Amid Upsides in 3Q

By Shawn Yang

  • Sea reported CY2Q23 top-line that missed consensus by 3.4%, while non-GAAP net income beat  by 16%. Sea guided for the net margin to turn negative again in future quarters.
  • We see deterioration of Sea’s competitive landscape as a long-term trend, hence we cut TP to US$35. The next swing factor is Temu’s ASEAN launch.
  • Yet, we need to remind investors that Sea’s 3Q earning might have some upside, including user growth of Shopee, as well as stabilization of gaming metrics.

Splitit Pursues Split From The ASX

By David Blennerhassett

  • Splitit Ltd (SPT AU) will seek approval from shareholders to delist the Buy Now, Pay Later micro-play from the ASX and redomicile to the Cayman Islands.
  • Concurrent with the voluntary delisting proposal, PE outfit Motive Partners will pump in US$50mn in exchange for preference shares – assuming the delisting occurs and certain earnings targets are met. 
  • This is not an Offer for shares. If delisted, Splitit shareholders will hold scrip in an unlisted private vehicle. 

Alibaba’s DingTalk to Split From Cloud Division and Seek Own IPO, Source Says

By Caixin Global

  • Alibaba Group Holding Ltd.’s workplace collaboration platform DingTalk will split from the company’s cloud division and pursue its own IPO, a source familiar with the matter told Caixin, as the tech giant ramps up efforts to unlock growth following its major restructuring.
  • DingTalk’s separation is expected to be completed before the Alibaba cloud unit’s own IPO, the source close to the e-commerce firm said.
  • Alibaba announced in May that it would spin off its Cloud Intelligence Group via a stock dividend distribution to its shareholders over the next year with an eventual listing.

Tencent (700 HK): 2Q23, Ad and FinTech Recovering, Margin Higher, Buy

By Ming Lu

  • In 2Q23, online advertising and FinTech revenues continued to grow rapidly.
  • Game revenue was slow, but two existing games were still at the top of the game market.
  • The operating margin improve significantly, benefiting from the layoff last year.

Tesserent (TNT AU): Scheme Meeting on 18 September

By Arun George

  • Tesserent Ltd (TNT AU)‘s IE considers Thales SA (HO FP)’s A$0.13 offer fair and reasonable as it is above its valuation range of A$0.098 to A$0.109 per share. 
  • The offer is subject to FIRB and shareholder approval. New Zealand’s OIO approval suggests that Australia’s FIRB approval should be forthcoming. Pearson’s recent selldown lowers the vote risk.
  • At the last close price and for the 4 October payment, the gross and annualised spread is 4.0% and 32.0%, respectively.

Intel Terminates Tower Semi Deal

By William Keating

  • Tower to collect a cool $353 million termination fee from Intel
  • Intel claims its foundry ambition to become the global #2 by end of the decade remains unchanged
  • The key thing Intel needed from Tower was access to its broad, diverse portfolio of specialty process technologies. These will take Intel years to develop on their own.  

Tencent: Earnings Miss, Cost Controls Help Margins; Slowdown in Domestic Gaming Is Concerning

By Shifara Samsudeen, ACMA, CGMA

  • Tencent (700 HK) reported 2Q2023 results today. Revenue grew 11.3% YoY to RMB149.2bn (vs consensus RMB151.1bn) while reported OP increased 34% YoY to RMB40.3bn (vs consensus RMB44.6bn).
  • Rapid growth in ad business, video account monetisation and cost controls have contributed to Tencent’s 2Q2023 earnings despite domestic gaming business has slowed down.
  • Though Tencent’s 2Q2023 results show a recovery in earnings, we would interpret the company’s earnings with caution given the slowdown in domestic gaming and social networks businesses.

Quiddity Leaderboard SSE50/180 Dec 22: 5 Changes for SSE50 and 18 Changes for SSE180

By Janaghan Jeyakumar, CFA

  • SSE 50 and SSE180, respectively, aim to represent the performance of the 50 and 180 largest and most liquid A-share stocks listed on Shanghai Stock Exchange. 
  • Earlier this month, I discussed the historical price and volume performance of SSE 50 and SSE 180 Rebalance events in Quiddity Primer for SSE 50/180/380 Index Rebalance Events. 
  • In this insight, we take a look at our expectations for potential index changes for SSE 50 and SSE 180 during the December 2023 Rebalance event.

Omron (6645) | Long-Term View Unchanged but Bumpy Ride

By Mark Chadwick

  • Omron’s stock price has collapsed 20% after missing Q1 earnings estimates. 
  • The recovery in demand has been pushed back – the company may cut its full year guidance at the interim stage
  • On near-term earnings, the stock is around fair value. There is +20% upside for longer-term investors based on our DCF 

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Aug 17
0

Daily Brief Industrials: VinFast, SITC International, Blue Planet, Evergreen Marine Corp, Marco Polo Marine, NOW Inc and more

By | Daily Briefs, Industrials

In today’s briefing:

  • VinFast: Inexplicable Valuation
  • SITC International (1308 HK): Uneasy Times
  • Singapore’s Waste Management Firm Blue Planet Gets Bintang Capital’s Backing
  • Evergreen Marine: ‘H1 Earnings Plunged Dramatically Y/Y’ | Also, ‘H1 Earnings Were Pretty Damn Good’
  • 10 in 10 with Marco Polo Marine – Voyage into a sustainable future
  • NOW, Inc. – Fulfillment Model to Meet Customers’ Evolving Needs August 16, 2023 Jeff Robertson

VinFast: Inexplicable Valuation

By Arun George

  • VinFast (1905332D VN), a Vietnamese EV (electric vehicle) manufacturer and a majority-owned affiliate of Vingroup Jsc (VIC VN), completed its merger with Black Spade. 
  • The shares closed 3.7x up on the first day with a market cap of US$86bn. The pop is partly due to low float resulting from the controlling shareholder’s 99.0% stake. 
  • VinFast faces headwinds of poor reviews, declining customer traction, ongoing losses and cash burn. VinFast is trading at a material premium to peers on growth-adjusted multiples.  

SITC International (1308 HK): Uneasy Times

By Osbert Tang, CFA

  • While management of SITC International (1308 HK) thinks that the worst is over, we are less positive given the lacklustre demand and the disappointing Jul-Aug market freight rates.
  • Its gross margin is still significantly ahead of the pre-COVID levels, and financially, its net cash balance has been coming down. The dividend payout ratio has also lowered slightly.
  • The FY23 consensus earnings forecast is too optimistic given 1H23 net profit is only 33.5% of the full-year estimate. The downside risk will cap near-term share price performance. 

Singapore’s Waste Management Firm Blue Planet Gets Bintang Capital’s Backing

By e27

  • Singapore-based waste management company Blue Planet has secured an undisclosed sum in funding from Malaysian PE firm Bintang Capital Partners.
  • The startup will utilise the capital to expand its operational teams and waste management technologies to pave the way for handling a broader range of waste types in current and emerging markets.
  • Founded in 2017 by Madhujeet Chimni, Prashant Singh, and Bharadwaj Chivukula, Blue Planet provides waste collection, transportation, segregation, processing, and treatment services.

Evergreen Marine: ‘H1 Earnings Plunged Dramatically Y/Y’ | Also, ‘H1 Earnings Were Pretty Damn Good’

By Daniel Hellberg

  • Yes, carrier margins and returns in Q2/H1 plunged dramatically compared to 2022
  • Yes, carrier margins and returns in Q2/H1 were quite good by historical standards
  • In this insight we provide context to help readers evaluate carrier performance in 2023

10 in 10 with Marco Polo Marine – Voyage into a sustainable future

By Geoff Howie

10 in 10 with Marco Polo Marine – Voyage into a sustainable future

NOW, Inc. – Fulfillment Model to Meet Customers’ Evolving Needs August 16, 2023 Jeff Robertson

By Water Tower Research

  • DistributionNOW gained share during 2Q23 as US drilling activity slowed. US revenue per rig averaged ~$631k, up from ~$561k in 1Q23 and ~$570k in 2Q22.

  • Gains reflect the benefits of the company’s fulfillment model, geared to make DistributionNOW the supply chain solution provider of choice for customers by supplying the products they require in the quantities they need by increasing the efficiency of their procurement process, lowering transactions costs, and increasing returns on their investments.

  • 2Q23 total revenue grew 10% Y/Y and 2% from 1Q22 revenue. 

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Aug 17
0

Daily Brief Energy/Materials: Ramelius Resources, Indo Tambangraya Megah, Continuum Green Energy, Electrovaya, TMC the metals co and more

By | Daily Briefs, Energy & Materials Sector

In today’s briefing:

  • S&P/​​​​​​​​​ASX Index Rebalance Preview: Potential Adds Have Outperformed
  • ITMG Q2 2023 Weak But Stock At 20% Dividend Yield with ~50% of Mkt Cap In Cash
  • Continuum Green Energy – New Issue Snapshot – Lucror Analytics
  • Electrovaya, Inc. – 3Q23 Results: Revenue of $10.5 Million
  • The Metals Company – Two steps forward, one step back
  • TMC the Metals Company, Inc. -The Resource Is the Resource

S&P/​​​​​​​​​ASX Index Rebalance Preview: Potential Adds Have Outperformed

By Brian Freitas

  • We forecast 26 changes across the ASX50 Index, ASX100 Index, S&P/ASX 200 (AS51 INDEX) and ASX300 Index at the September rebalance.
  • The review period ends tomorrow, so most changes are high probability. Though there are some changes that will be up to the discretion of the index committee.
  • There will be a lot of stock to trade on the changes to the ASX200 and indices higher up the hierarchy. But there will be a lot of pre-positioning too.

ITMG Q2 2023 Weak But Stock At 20% Dividend Yield with ~50% of Mkt Cap In Cash

By Sameer Taneja

  • Indo Tambangraya Megah (ITMG IJ) provides investors with fat dividends. We estimate from 2021-2023e, the company will have paid over 20,000 Rph (70% of the current share price) in dividends.
  • Despite these dividend payouts, cash on the balance sheet by the end of FY23e will easily exceed one bn USD or about 50% of the market capitalization.
  • Weak results/degrowth are expected due to unsustainably high coal prices in 2022. Nevertheless, there is a good case for future value as hefty dividends will continue to be paid.

Continuum Green Energy – New Issue Snapshot – Lucror Analytics

By Trung Nguyen

Continuum Green Energy has launched a roadshow to market USD 144A/RegS 3.5NC1.5 green bonds. The expected size is USD 450 mn. The proceeds are earmarked for: [1] refinancing the issuer’s outstanding USD 400 mn 2026 notes; [2] paying the first coupon of the proposed notes and transaction costs: and [3] capex for eligible green projects. The expected ratings on the notes and issuer are B+ (positive) by S&P and Fitch.

We view Continuum as “Medium Risk” on our LARA Scale. We like the company’s: [1] high exposure in healthier commercial & industrial customers with almost no receivables; [2] diversified customer portfolio; and [3] long-term PPA being benchmarked to various industrial tariffs. On the flip side, the credit is constrained by higher leverage compared to peers and has smaller scale. Our Credit Bias is “Positive”, considering the 1 GW of new capacity scheduled to be commissioned later this calendar year.

We believe the COGREN 27 should be priced to yield c. 8.5-8.75%.

Electrovaya, Inc. – 3Q23 Results: Revenue of $10.5 Million

By Water Tower Research

  • In 3Q23, Electrovaya achieved revenue of $10.5 million, a 160% Y/Y increase from $4.1 million in 3Q22.

  • The increase in revenue was due to increased order volume and a ramp-up in production to meet demand.

  • Guidance of $42 million for the year has been reiterated.

The Metals Company – Two steps forward, one step back

By Edison Investment Research

The proposed equity issue and additional resources will largely complete the funding requirement for The Metals Company’s (TMC’s) further environmental study and completion of its mining application, which it intends to file in July 2024. While the regulatory delays in the International Seabed Authority’s (ISA’s) implementation of the mining exploitation code were disappointing, momentum behind the legislative process remains positive and the stepping stones towards TMC’s production of battery metals from the deep sea are steadily falling into place.

TMC the Metals Company, Inc. -The Resource Is the Resource

By Water Tower Research

  • Keeping a tight rein on expenses. TMC reported 2Q23 results that included a significant reduction in SG&A expenses from $8.1 million in year-ago period to $5.1 million, demonstrating the company’s ability to operate and move the NORI project forward at a significantly lower cash burn rate, suggesting that liquidity may be a diminishing investor concern.

  • Time to production extended; certainty increased.

  • While some observers may have been disappointed with the ISA’s failure to complete the undersea mining code creation process in July 2023, as originally envisioned, the July session featured the ISA’s renewed commitment to complete the code over the next three sessions (and inter-session discussions) that allowed TMC to announce a definitive timeline for NORI-D exploitation applications submission (3Q24) and beginning of commercial nodule collection envisioned under Project Zero (4Q25), establishing a timetable for getting to revenue and profitability.

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Aug 17
0

Daily Brief Industrials: VinFast, SITC International, Blue Planet, Evergreen Marine Corp, Marco Polo Marine, NOW Inc and more

By | Daily Briefs, Industrials

In today’s briefing:

  • VinFast: Inexplicable Valuation
  • SITC International (1308 HK): Uneasy Times
  • Singapore’s Waste Management Firm Blue Planet Gets Bintang Capital’s Backing
  • Evergreen Marine: ‘H1 Earnings Plunged Dramatically Y/Y’ | Also, ‘H1 Earnings Were Pretty Damn Good’
  • 10 in 10 with Marco Polo Marine – Voyage into a sustainable future
  • NOW, Inc. – Fulfillment Model to Meet Customers’ Evolving Needs August 16, 2023 Jeff Robertson

VinFast: Inexplicable Valuation

By Arun George

  • VinFast (1905332D VN), a Vietnamese EV (electric vehicle) manufacturer and a majority-owned affiliate of Vingroup Jsc (VIC VN), completed its merger with Black Spade. 
  • The shares closed 3.7x up on the first day with a market cap of US$86bn. The pop is partly due to low float resulting from the controlling shareholder’s 99.0% stake. 
  • VinFast faces headwinds of poor reviews, declining customer traction, ongoing losses and cash burn. VinFast is trading at a material premium to peers on growth-adjusted multiples.  

SITC International (1308 HK): Uneasy Times

By Osbert Tang, CFA

  • While management of SITC International (1308 HK) thinks that the worst is over, we are less positive given the lacklustre demand and the disappointing Jul-Aug market freight rates.
  • Its gross margin is still significantly ahead of the pre-COVID levels, and financially, its net cash balance has been coming down. The dividend payout ratio has also lowered slightly.
  • The FY23 consensus earnings forecast is too optimistic given 1H23 net profit is only 33.5% of the full-year estimate. The downside risk will cap near-term share price performance. 

Singapore’s Waste Management Firm Blue Planet Gets Bintang Capital’s Backing

By e27

  • Singapore-based waste management company Blue Planet has secured an undisclosed sum in funding from Malaysian PE firm Bintang Capital Partners.
  • The startup will utilise the capital to expand its operational teams and waste management technologies to pave the way for handling a broader range of waste types in current and emerging markets.
  • Founded in 2017 by Madhujeet Chimni, Prashant Singh, and Bharadwaj Chivukula, Blue Planet provides waste collection, transportation, segregation, processing, and treatment services.

Evergreen Marine: ‘H1 Earnings Plunged Dramatically Y/Y’ | Also, ‘H1 Earnings Were Pretty Damn Good’

By Daniel Hellberg

  • Yes, carrier margins and returns in Q2/H1 plunged dramatically compared to 2022
  • Yes, carrier margins and returns in Q2/H1 were quite good by historical standards
  • In this insight we provide context to help readers evaluate carrier performance in 2023

10 in 10 with Marco Polo Marine – Voyage into a sustainable future

By Geoff Howie

10 in 10 with Marco Polo Marine – Voyage into a sustainable future

NOW, Inc. – Fulfillment Model to Meet Customers’ Evolving Needs August 16, 2023 Jeff Robertson

By Water Tower Research

  • DistributionNOW gained share during 2Q23 as US drilling activity slowed. US revenue per rig averaged ~$631k, up from ~$561k in 1Q23 and ~$570k in 2Q22.

  • Gains reflect the benefits of the company’s fulfillment model, geared to make DistributionNOW the supply chain solution provider of choice for customers by supplying the products they require in the quantities they need by increasing the efficiency of their procurement process, lowering transactions costs, and increasing returns on their investments.

  • 2Q23 total revenue grew 10% Y/Y and 2% from 1Q22 revenue. 

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Aug 17
0

Daily Brief Private Markets: India-Based Credgenics Banks $50m to Simplify Debt Resolution and more

By | Daily Briefs, Private Markets

In today’s briefing:

  • India-Based Credgenics Banks $50m to Simplify Debt Resolution
  • Singapore’s Waste Management Firm Blue Planet Gets Bintang Capital’s Backing
  • Baskit Raises US$3.3M in Seed Funding to Empower Indonesia’s Distribution Infrastructure
  • Iterative Leads ID Proptech Firm Goro’s $1m Round

India-Based Credgenics Banks $50m to Simplify Debt Resolution

By Tech in Asia

  • India-based Credgenics, a loan collection services firm, has raised US$50 million in its series B funding round led by Accel and WestBridge Capital.
  • It will use the new capital to diversify its offerings and reach other client segments. Credgenics also looks to expand its international business.
  • The company’s geographical expansion will primarily focus on countries such as Indonesia and Vietnam, which share similarities with India’s credit market.

Singapore’s Waste Management Firm Blue Planet Gets Bintang Capital’s Backing

By e27

  • Singapore-based waste management company Blue Planet has secured an undisclosed sum in funding from Malaysian PE firm Bintang Capital Partners.
  • The startup will utilise the capital to expand its operational teams and waste management technologies to pave the way for handling a broader range of waste types in current and emerging markets.
  • Founded in 2017 by Madhujeet Chimni, Prashant Singh, and Bharadwaj Chivukula, Blue Planet provides waste collection, transportation, segregation, processing, and treatment services.

Baskit Raises US$3.3M in Seed Funding to Empower Indonesia’s Distribution Infrastructure

By e27

  • Baskit, a startup that focuses on digitalising and growing distribution businesses in Indonesia’s supply chains, today announced that it had raised US$3.3 million in seed funding.
  • The funding round comes from Betatron Venture Group, Forge Ventures, Investible, 1982 Ventures, DS/X Orvel, Michael Sampoerna, and other prominent global and regional angels.
  • It followed a US$1.5 million pre-seed funding round that Baskit announced in March.

Iterative Leads ID Proptech Firm Goro’s $1m Round

By Tech in Asia

  • Proptech firm Goro is betting on fractional property investments in Indonesia. With its namesake being derived from the Indonesian term Gotong Royong or mutual cooperation, its platform allows users to purchase a fraction of a property starting from US$0.7.
  • Returns come in the form of monthly paid-out rental income and capital gains when the property is sold.
  • Since launching earlier this year, Goro said its user base has grown 15% per week. The company added that its current portfolio, which is picked by professional property managers, is generating 11% net annualized rental yield for its users.

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Aug 17
0

Daily Brief Health Care: WuXi XDC Cayman Inc, Mirxes Holding, Green Cross and more

By | Daily Briefs, Healthcare

In today’s briefing:

  • WuXi XDC Cayman Pre-IPO – The Positives – Sales Have Surged Leading to Market Share Gains
  • Pre-IPO Mirxes Holding Company – The Profit Model in the Post Pandemic Era Needs to Be Verified
  • Green Cross (006280 KS): Turns Profitable in Q2; All Eyes on the Maiden US Approval of Blood Product

WuXi XDC Cayman Pre-IPO – The Positives – Sales Have Surged Leading to Market Share Gains

By Clarence Chu

  • WuXi XDC Cayman Inc (1877628D HK) is looking to raise at least US$100m in its upcoming Hong Kong IPO.
  • WuXi XDC Cayman (WXDC) is a CRDMO focused on the global antibody drug conjugates (ADC) and broader bioconjugate market providing integrated and end-to-end services.
  • In this note, we will talk about the positive aspects of the deal.

Pre-IPO Mirxes Holding Company – The Profit Model in the Post Pandemic Era Needs to Be Verified

By Xinyao (Criss) Wang

  • Although Mirxes has already commercialized its products, its total revenue fluctuated greatly. When the market demand for COVID-19 testing kits sharply declined, the Company’s financial position deteriorated immediately.
  • With the highest incidence rate of gastric cancer worldwide, PRC market is important to Mirxes. How to gain recognition from doctors and enter hospital market is a challenge for GASTROClear.
  • Mirxes is facing survival problem and eager for an IPO. Before Mirxes establishes a clear/visible path to commercialization and a successful profit model in post-COVID era, we would remain cautious. 

Green Cross (006280 KS): Turns Profitable in Q2; All Eyes on the Maiden US Approval of Blood Product

By Tina Banerjee

  • Green Cross (006280 KS) reported decent Q2 performance, with revenue and operating profit increasing 2% and 81%, YoY, respectively. Vaccine and blood products business remained the major growth drivers.
  • The company has re-submitted marketing application for GC5107, a blood derivative product to the FDA, which has accepted it with a target action date of January 13, 2024.
  • If approved, the company aims to enter the U.S. market in 2H24. Supply shortage amid increasing demand makes the U.S. an attractive market for the company’s blood products.

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Aug 17
0

Daily Brief Consumer: Sanei Architecture Planning, GoTo Gojek Tokopedia Tbk PT, Cie Financiere Richemont , Tencent Music, Tokyo Stock Exchange Tokyo Price Index Topix, Lotte Tour Development Co, Ltd. and more

By | Consumer, Daily Briefs

In today’s briefing:

  • Sanei Architecture Planning (3228 JP): Open House’s JPY2,025 Tender Offer
  • GoTo Gojek Tokopedia (GOTO IJ) – Striking a New Balance
  • Richemont: Investment Case Intact. Pullback Offers Entry Point
  • [Tencent Music (TME US, SELL, TP US$5.7) TP Change]: Competition Remains the Biggest Downward Factor
  • Expanding Nominal Profits from Shift from Deflation Rather than P/B Is the Driver of Stock Prices
  • Addressing Misconceptions: Lotte Tour’s Short-Selling Entry Point

Sanei Architecture Planning (3228 JP): Open House’s JPY2,025 Tender Offer

By Arun George

  • Sanei Architecture Planning (3228 JP) has recommended Open House (3288 JP)’s tender offer of JPY2,025 per share, an 18.0% premium to the undisturbed price (15 August).
  • The transaction is required to facilitate the exit of Mr Koike, the largest shareholder, and satisfy Article 27 of the Tokyo Metropolitan Organized Crime Exclusion Ordinance.
  • Irrevocables represent a 64.21% ownership ratio, and the lower limit requires a 6.9% minority acceptance rate. The offer is a reasonable solution to the current predicament. 

GoTo Gojek Tokopedia (GOTO IJ) – Striking a New Balance

By Angus Mackintosh

  • GoTo Gojek Tokopedia (GOTO IJ) released results for 2Q2023, which reflected a slower growth environment exacerbated by lower incentive spend but some significant progress towards its profitability goals for 2023.
  • The company continues to focus on maintaining high-quality users but with an increasing focus on more affordable offerings to expand its demographic reach with the potential to double its users.
  • GoTo is undergoing a full assessment across all divisions, with a focus on improving synergies, with new strategies for growth to be revealed next quarter.

Richemont: Investment Case Intact. Pullback Offers Entry Point

By Alexis Dwek

  • Q1 2024 results proved that the long trade into numbers was crowded, with the share price falling 10% on the day, despite strong results
  • Richemont is in an excellent position to capture future growth coupled with very high profitability
  • Investment thesis intact: Cartier and Van Cleef keep gaining market share in a branded fine jewellery category that remains one of the most fundamentally attractive places to be

[Tencent Music (TME US, SELL, TP US$5.7) TP Change]: Competition Remains the Biggest Downward Factor

By Shawn Yang

  • TME reported in-line results with continued divergence in its two major businesses: Online music increased by 48% YoY, while social entertainment declined by 25% YoY.
  • We expect these trends to continue, with online music benefiting from price increases and social entertainment facing ongoing challenges from competition, regulations, and macro influences.
  • Recently, Douyin has been advancing the integration of its large entertainment division. We anticipate that this will pose pressure on TME. Remain SELL and cut TP to US$ 5.7.

Expanding Nominal Profits from Shift from Deflation Rather than P/B Is the Driver of Stock Prices

By Aki Matsumoto

  • TSE market capitalization of has doubled since 1990 and the number of companies has doubled, while TOPIX is 20% lower than its 1989 high. Money went mainly to IPOs.
  • P/B, TSE’s expectation for stock price appreciation, had high correlation with TOPIX, 0.84 from 1999-2019. However, it correlated negatively for 4 years from 2020 with other factors having significant impact.
  • Correlation between TOPIX and nominal GDP is 0.94 for 2020-2023, showing higher correlation. Expectations of higher nominal profits caused by transition from deflation to inflation are behind the stock rally.

Addressing Misconceptions: Lotte Tour’s Short-Selling Entry Point

By Sanghyun Park

  • Lotte Tour has emerged as a prominent short-selling target in the Korean market, and there are efforts to use an ₩80B convertible bond (CB) to exploit its dilution/overhang risk.
  • Linden Capital and LMR, upon obtaining the CB, promptly borrowed 4.6M shares from Donghwa for short selling. Thus, the CB conversion incentive remains largely unaffected by stock price changes.
  • We should avoid synchronizing our entry point with CB conversion. Instead, we should target the likely rights issuance in the latter half of the year, anticipated in the market.

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Aug 17
0

Daily Brief Financials: Nsdl, Rural Electrification, NIFTY Index, GORO, JDC Group AG, Greentown China and more

By | Daily Briefs, Financials

In today’s briefing:

  • NSDL Pre-IPO – The Positives – Dominant Position, Strong Revenue Growth
  • RECL – Near Insatiable Power Credit Demand, Great NPL Trend, New Maharatna Status, 3x Avg Div Yield
  • APAC WEEKLY Monitor: Current MRM Supports and Probabilities Re-Cap
  • Iterative Leads ID Proptech Firm Goro’s $1m Round
  • JDC Group – Accelerating into H223
  • NSDL Pre-IPO – The Negatives – Margins Could Drag
  • Morning Views Asia: Greentown China

NSDL Pre-IPO – The Positives – Dominant Position, Strong Revenue Growth

By Sumeet Singh

  • National Securities Depository Limited (NSDL) is looking to raise around US$400m in its India IPO. 
  • It is the largest depository in India in terms of number of issuers, number of active instruments, market share in demat value of settlement volume and value of assets.
  • In this note, we talk about the positive aspects of the deal.

RECL – Near Insatiable Power Credit Demand, Great NPL Trend, New Maharatna Status, 3x Avg Div Yield

By Daniel Tabbush

  • Recently awarded “Maharatna” status, only 12 companies, FY24 is first full year for this
  • Growth is steady, with good returns, and major improvement in credit metrics
  • Its 4.77% dividend yield is incredibly high and about 3x higher than peers

APAC WEEKLY Monitor: Current MRM Supports and Probabilities Re-Cap

By Nico Rosti

  • All the APAC markets we cover (Nifty50, HSI, Nikkei225, Kospi200, S&P/ASX200) are pulling back and some of them have been doing so for 3 weeks.
  • In this insight we want to offer a re-cap of all the MRM support levels and probabilities for the APAC markets above, after the August 16th Close.
  • Check our previously published single-market insights for deeper analysis and related investment ideas: Nifty50, HSI, Nikkei225, Kospi200, S&P/ASX200.

Iterative Leads ID Proptech Firm Goro’s $1m Round

By Tech in Asia

  • Proptech firm Goro is betting on fractional property investments in Indonesia. With its namesake being derived from the Indonesian term Gotong Royong or mutual cooperation, its platform allows users to purchase a fraction of a property starting from US$0.7.
  • Returns come in the form of monthly paid-out rental income and capital gains when the property is sold.
  • Since launching earlier this year, Goro said its user base has grown 15% per week. The company added that its current portfolio, which is picked by professional property managers, is generating 11% net annualized rental yield for its users.

JDC Group – Accelerating into H223

By Edison Investment Research

JDC Group (JDC) reported H123 results that showed accelerating growth at its key Advisortech division (c 89% of revenue) of 11.2%. After three slower quarters, JDC expects overall growth to accelerate in H223 and reiterated its challenging but realistic FY23 guidance of 17% revenue growth at the midpoint, with EBITDA of €11.5–13.0m. JDC trades at an FY24e EV/EBITDA multiple of 13.2x on consensus estimates, which we believe is undemanding for what is essentially a fast-scaling platform business. Our DCF calculation provides a valuation of €34.09/share.

NSDL Pre-IPO – The Negatives – Margins Could Drag

By Sumeet Singh

  • National Securities Depository Limited (NSDL) is looking to raise around US$400m in its India IPO. 
  • It is the largest depository in India in terms of number of issuers, number of active instruments, market share in demat value of settlement volume and value of assets.
  • In this note, we talk about the not-so-positive aspects of the deal.

Morning Views Asia: Greentown China

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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Aug 17
0

Daily Brief ESG: Expanding Nominal Profits from Shift from Deflation Rather than P/B Is the Driver of Stock Prices and more

By | Daily Briefs, ESG

In today’s briefing:

  • Expanding Nominal Profits from Shift from Deflation Rather than P/B Is the Driver of Stock Prices

Expanding Nominal Profits from Shift from Deflation Rather than P/B Is the Driver of Stock Prices

By Aki Matsumoto

  • TSE market capitalization of has doubled since 1990 and the number of companies has doubled, while TOPIX is 20% lower than its 1989 high. Money went mainly to IPOs.
  • P/B, TSE’s expectation for stock price appreciation, had high correlation with TOPIX, 0.84 from 1999-2019. However, it correlated negatively for 4 years from 2020 with other factors having significant impact.
  • Correlation between TOPIX and nominal GDP is 0.94 for 2020-2023, showing higher correlation. Expectations of higher nominal profits caused by transition from deflation to inflation are behind the stock rally.

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