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Smartkarma Daily Briefs

Jul 26
0

Daily Brief TMT/Internet: NTT (Nippon Telegraph & Telephone), Taiwan Semiconductor (TSMC), Lianlian DigiTech, Delta Electronics Thai, Alphabet , Lasertec Corp, Applied Blockchain Inc, Black Sesame Technologies, Robosense Technology, Schrole Group Ltd and more

By | Daily Briefs, TMT/Internet

In today’s briefing:

  • NTT (9432) – LDP Consideration of Full Sale Is Not Necessarily Overhang
  • TSMC. AI Tailwinds No Match For Macro Headwinds
  • LianLian DigiTech IPO: The Bull Case
  • Quiddity Leaderboard SET50 Dec 23: DELTA Deletion Fears Unrealistic
  • Alphabet 2Q’23 Earnings Update
  • Alphawave, TSMC and Lam Research Follow-up, DISCO and Lasertec
  • APLD – 4Q Review
  • Black Sesame Pre-IPO – The Negatives – Losses Remain Wide and Suffers from a Concentration Risk
  • Robosense Technology Pre-IPO – The Negatives – Not a Whole Lot of Earnings
  • Schrole Group Ltd – Another Record Quarter, Closing in on Break Even

NTT (9432) – LDP Consideration of Full Sale Is Not Necessarily Overhang

By Travis Lundy

  • Six weeks ago, LDP Policy Research Council chairman KAGIUDA led a discussion about full NTT privatisation to fund defence. Today he said serious deliberations begin in August. Shares fell today.
  • The LDP wants non-tax resources to increase defence/social spending. Selling would require a change in NTT Law, but the argument is that communications have changed/internationalised.
  • As discussed in NTT (9432 JP) – Would the Govt Sell All Its Shares? Why? How? How Long? Overhang?, there are questions on overhang. BUT… presumably there are mitigants. 

TSMC. AI Tailwinds No Match For Macro Headwinds

By William Keating

  • Persistent fabless inventory issues dampen the slope of H2’23 recovery. FY’23 forecast further reduced to a 10% YoY decline
  • AI-Related hardware will reach 6% of revenues in 2023, a welcome boost but insufficient to counter the negative impact of macro headwinds
  • TSMC’s earnings provides an important read through on the likely results and outlook for the broader semi ecosystem in the coming weeks. 

LianLian DigiTech IPO: The Bull Case

By Arun George

  • Lianlian DigiTech (2104619D CH), a digital payment services provider in China, has filed for an HKEx IPO to raise US$500 million, according to press reports.   
  • Lianlian ranked first among the independent digital payment solution providers in China in terms of TPV in 2022, with a market share of 9.1%, according to Frost & Sullivan.   
  • The key elements of the bull case rest on rising market share, doubling of active customers, resilient core business growth and rapidly growing additional revenue streams.

Quiddity Leaderboard SET50 Dec 23: DELTA Deletion Fears Unrealistic

By Janaghan Jeyakumar, CFA

  • In this insight, we take a look at the potential ADDs/DELs for Thailand’s SET50 index rebalance in December 2023.
  • Delta Electronics Thai (DELTA TB) – one of the largest SET 50 members – has been in the Market Surveillance Measure list a couple of times already this year.
  • Although this creates some doubts over the fate of DELTA’s SET50 membership, at present, I believe DELTA will escape deletion in December 2023. 

Alphabet 2Q’23 Earnings Update

By MBI Deep Dives

  • Topline grew +9% FXN. While Google Services revenue growth was flat in 1Q’23, it was 5.5% YoY in 2Q’23, with growth re-accelerating in every component of Google Services.
  • Despite cost optimization efforts by customers, Google Cloud maintained its momentum with ~28% YoY growth (same as it was in 1Q’23).
  • So, on an apple-to-apple basis, Google Services margin would be slightly lower this quarter than reported (say, ~$500 Mn opex for Google Brain).

Alphawave, TSMC and Lam Research Follow-up, DISCO and Lasertec

By Douglas O’Laughlin

  • Alphawave reported last week.

  • The results were not good; they were great.

  • I actually am excited to see Tony and the team execute like this. Bookings are growing, and while revenue has not come out yet, it seems very likely they will hit their 2023 revenue estimates.

APLD – 4Q Review

By Guasty Winds

  • APLD released 4Q earnings last night. The stock performed well, +14%.
  • The key highlight was the huge guidance. In this post I will run through how the numbers make no sense.

  • Jamestown, North Dakota (JT) – 100MW – JT has been operating since 2022. It has ~100MW of capacity and has been running at full capacity over the past two quarters, according to comments made on the company’s 3Q and 4Q earnings calls. Here is a snip for the 3Q call.

Black Sesame Pre-IPO – The Negatives – Losses Remain Wide and Suffers from a Concentration Risk

By Clarence Chu

  • Black Sesame Technologies (BLACKSES HK) is looking to raise around US$300m in its upcoming Hong Kong IPO.
  • Black Sesame International Holdings (BSIH) is an automotive-grade computing SoC and SoC-based intelligent vehicle solution provider.
  • In this note, we will talk about the not so positive aspects of the deal.

Robosense Technology Pre-IPO – The Negatives – Not a Whole Lot of Earnings

By Sumeet Singh

  • Robosense Technology (ROBO HK) (RT) is looking to raise around US$400m (estimated) in its upcoming Hong Kong IPO. 
  • As of Mar 23, it had earned design wins for mass production of LiDAR for 52 vehicles with 21OEMs and Tier 1 suppliers, ranking No. 1 globally, according to CIC.
  • In this note, we talk about the not-so-positive aspects of the deal.

Schrole Group Ltd – Another Record Quarter, Closing in on Break Even

By Research as a Service (RaaS)

  • Schrole Group Ltd (ASX:SCL) is an Australian software company focused on providing human resource technology solutions to the international education and training sector.
  • Schrole has developed a suite of five HR Software-as-a-Service (SaaS) offerings including the core product, Schrole Connect, a SaaS-based staff recruitment platform.
  • Schrole Group has reported a 24% increase in quarter-on-quarter cash receipts to $1.32m and a narrowed operating cash loss of $0.20m, a 39% reduction when compared with the same quarter a year ago. Schrole Group ended the quarter with cash of $1.36m and no debt. 

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Jul 26
0

Daily Brief Macro: Asia’s Financial Stability Holds Up in Tough Times and more

By | Daily Briefs, Macro

In today’s briefing:

  • Asia’s Financial Stability Holds Up in Tough Times
  • Great Game: Is a Hung Parliament bad news for markets?
  • Pheu Thai Gets Its Shot at Forming New Thai Government
  • CX Daily: China Seeks Cure for Ailing Health System
  • Out of the Box #13: Services matter for central banks and Manufacturing for markets
  • The Energy Cable #30 – Progress for The Bulls
  • Focusing on the Services and Not Manufacturing PMI Does Provide Upside in Eurozone Equities!

Asia’s Financial Stability Holds Up in Tough Times

By Manu Bhaskaran

  • Asian financial stability has remained sound despite a series of global shocks, underlining the region’s improved resilience against potential aftershocks of aggressive global monetary tightening
  • The region has been helped by its relatively better inflation experience and improved regulation. Resilient demand and labour markets are further advantages. 
  • Elevated borrowing costs amidst a slowdown pose a risk to households, corporations and government finances, offset by cost-cutting and fiscal consolidation in the post-pandemic years.

Great Game: Is a Hung Parliament bad news for markets?

By Mikkel Rosenvold

  • In the blistering heat of summer, Spanish voters went to the polls on Sunday.
  • It was expected to be a tough race for incumbent centre-left Prime Minister Pedro Sánchez, but the result wasn’t as clear-cut as many expected.
  • Many analysts have pointed to a potential lengthy government formation process and painted this as really bad news for the Spanish economy – but is that really the case?

Pheu Thai Gets Its Shot at Forming New Thai Government

By Manu Bhaskaran

  • The progressive Move Forward Party has failed to get its leader Pita Limjaroenrat elected as prime minister. Pheu Thai is now better positioned to form a new coalition government. 
  • Pheu Thai will sideline Move Forward and form a coalition comprising pro-military parties. This will bring short-term stability and allow the government to proceed with a budget. 
  • Despite popular hopes for reform being dashed, major outbursts of discontent are unlikely for now.  But the discontent will persist. Any lull will be only temporary.

CX Daily: China Seeks Cure for Ailing Health System

By Caixin Global

  • Medical insurance /Cover Story: China seeks cure for ailing health system
  • Collapse /: School gym roof collapse leaves 11 dead in Northeast China
  • VCs /: U.S. lawmakers demand venture capital firms provide details of China tech investments

Out of the Box #13: Services matter for central banks and Manufacturing for markets

By Andreas Steno

  • In our “out of the box” series, we aim at being ahead of the current consensus narrative and think of the next theme that could drive price action before anyone else has given it any noteworthy attention.
  • This week we look at the spread between Service and Manufacturing momentum and why one matters for central banks and the other for markets (for now).
  • Our current working thesis is that Manufacturing (especially in the US, but maybe also elsewhere during Q3/Q4) will start to rebound short-term.

The Energy Cable #30 – Progress for The Bulls

By Ulrik Simmelholt

  • Stars are aligning and both Steno Research and 3Fourteen research are now energy bullish.
  • Last week at Steno Research we looked at the potential for a bounce in Manufacturing PMI numbers and we thought it would be natural to look at both hard and soft data through the lens of one of the most important signals in the energy markets, namely the flip from contango to backwardation.
  • In general it can be said that the flip brings more volatility to soft data than hard data. Given PMIs general tendency to converge with hard data and its current levels (Almost GFC bearishness) we feel like there are plenty of reasons for betting on higher Manufacturing PMI numbers.  

Focusing on the Services and Not Manufacturing PMI Does Provide Upside in Eurozone Equities!

By Jeroen Blokland

  • We look at the historical relationship between the Eurozone Manufacturing and Services PMI and Eurozone Equity Returns.
  • Despite what many investors believe, the Manufacturing PMI remains the dominant PMI index due to its cyclical nature.
  • In addition, while the Services PMI reveals a less downbeat picture than the Manufacturing PMI concerning the current EURO STOXX 600 Index level, upside is absent!

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Jul 26
0

Daily Brief Health Care: SK Biopharmaceuticals Co Ltd, Eoflow , Terumo Corp, CanSino Biologics , D.Western Therapeutics Institute Inc. and more

By | Daily Briefs, Healthcare

In today’s briefing:

  • KRX New Deal Index Rebalance Preview: Review Period Nearly Complete
  • An Update on Medtronic’s Tender Offer of Eoflow
  • Terumo Corp (4543 JP): Strong C&V Business Momentum Continues; Profitability to Improve in FY24
  • CanSino Biologics (6185.HK/​688185.CH) – The Story Has Changed
  • News Flash – D. Western Therapeutics Institute (4576 JP)

KRX New Deal Index Rebalance Preview: Review Period Nearly Complete

By Brian Freitas

  • The review period for the September rebalance ends on 31 July, the changes will be announced towards end August and implemented at the close of trading on 7 September.
  • There is one change currently for each of the Secondary Battery, Bio and Game indices. Then there are a couple of changes for the Internet and BBIG indices.
  • There are four stocks that will have over 2 days of ADV to trade from passive trackers and these stocks could move around announcement of the changes.

An Update on Medtronic’s Tender Offer of Eoflow

By Douglas Kim

  • In this insight, we provide an update of Medtronic’s tender offer of Eoflow. 
  • The foreign ownership of Eoflow has surged in the past two months from 6.5% on 25 May to 33.2% as of 24 July. 
  • We continue to believe that there is 95%+ probability of this M&A getting completed at the tender offer price of 30,000 won and Eoflow eventually becoming delisted in 2H 2023. 

Terumo Corp (4543 JP): Strong C&V Business Momentum Continues; Profitability to Improve in FY24

By Tina Banerjee

  • Terumo Corp (4543 JP) recorded highest ever revenue and operating profit in FY23, driven by continued strong growth in C&V business globally, particularly the largest U.S. market.
  • C&V business should continue to be the primary driver of Terumo’s growth in FY24 also. The company has guided for C&V revenue of ¥504B in FY24, up 5% YoY.
  • Terumo aims to grow profit by double-digit percentage in FY24 and improve profitability through expansion of high-margin products, more assertive pricing policies, and cost reduction measures centered on manufacturing cost.

CanSino Biologics (6185.HK/​688185.CH) – The Story Has Changed

By Xinyao (Criss) Wang

  • Based on the current situation, sales of MCV4 in 2023 could still be unsatisfactory. We think MCV4 is hard to become the second growth curve of CanSino in post-COVID era.
  • Whether CanSino’s zoster vaccine is able to become Best-In-Class would largely determine whether this product would truly become the next blockbuster vaccine to turn the situation around for CanSino. 
  • CanSino’s commercialized products cannot contribute large-scale revenue in time to prevent continuous deterioration of performance. Results in 2023 could be lower than expected, and investors are losing confidence in CanSino.

News Flash – D. Western Therapeutics Institute (4576 JP)

By Sessa Investment Research

  • DWTI announced that it has updated its development pipeline on DW-1002 licensee Dutch Ophthalmic Research Center (DORC) announcing its decision to develop MEMBRANEBLUE-DUAL® in the US for the indication of ILM and ERM membrane staining during vitreoretinal surgery.
  • Since the DW-1002 single-agent formulation TissueBlueTM was launched in the US in 2020, it has been used in over 100,000 surgeries and is preferred by over 40% of U.S. retinal surgeons.
  • Combination ophthalmic surgical aid MEMBRANE BLUE-DUAL® (DW-1002 Brilliant Blue G + Trypan Blue) has been used in over 500,000 surgeries in Europe since its launch in 2010. 

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Jul 26
0

Daily Brief Consumer: L’Occitane, Shimano Inc, The Keepers Holdings, Mitra Adiperkasa, Melco Resorts & Entertainment, Coupang , Omnicom Group, Nemak, Conagra Foods, Oisix ra daichi and more

By | Consumer, Daily Briefs

In today’s briefing:

  • L’Occitane (973 HK): Controlling Shareholder Mulling a Bid?
  • Shimano (7309) | Profit Recovery Derailed
  • Keepers Holdings (KEEPR PM): What to Expect from Q2 2023
  • ​​​LQ45 Index Rebalance: Two Changes in a Few Days
  • Melco Resorts: Upcoming Earnings Release Next Month Could Beat Due to Macau, Manila, Cyprus Upsides
  • [Coupang Inc. (CPNG US, SELL, TP US$13.7) TP Change]: Taiwan Expansion Will Lower the Profit Margin
  • Omnicom Group Inc.: Acquisition of Grabarz & Partner
  • Nemak – ESG Report – Lucror Analytics
  • Conagra Brands Inc.: Summer 2023 Product Launches & Other Drivers
  • Oisix: Meal Kit Kaizen

L’Occitane (973 HK): Controlling Shareholder Mulling a Bid?

By Arun George

  • L’Occitane (973 HK) is drawing takeover interest from Reinold Geiger, the Chairman and the largest shareholder, according to Bloomberg. Mr Geiger has been exploring financing options for the potential deal.
  • The presence of a significant disinterested shareholder, Acatis KVG, necessitates an attractive takeover premium. Acatis KVG trimmed its stake in July 2021 at HK$30.01 per share.
  • L’Occitane released a solid 1QFY2024 update today with constant currency growth of 24.5% YoY. Irrespective of a bid materialising, the valuation is undemanding compared to peer multiples. 

Shimano (7309) | Profit Recovery Derailed

By Mark Chadwick

  • Shimano reported a 40% drop in operating profit for 2Q and revised down full year guidance
  • Bike sales continue to be weak (-19% YoY) in Q2 and 2H outlook is even worse
  • We expect the share price to sell-off following the guidance cut. The inventory overhang could take a while to resolve

Keepers Holdings (KEEPR PM): What to Expect from Q2 2023

By Sameer Taneja

  • The Keepers Holdings (KEEPR PM) declares its Q2 2023 in the second week of August. We expect a 15-20% revenue growth and a similar profit growth. 
  • The stock trades at 9.3x/7.9x FY23e/24e, with structural growth drivers arising from rising imported spirit consumption and a monopolistic position with a >70% marketshare by volume.
  • With healthy profit growth and a sound balance sheet ( 15% of the market cap in cash), Keepers can pay 50% of profits resulting in a 4.2% FY23e yield. 

​​​LQ45 Index Rebalance: Two Changes in a Few Days

By Brian Freitas

Melco Resorts: Upcoming Earnings Release Next Month Could Beat Due to Macau, Manila, Cyprus Upsides

By Howard J Klein

  • From 2022 loss in period, MLCO earnings could come in anywhere between a profit of $0.06 to $0.70 indicative of recovery in Macau, Manila and opening of Cyprus.
  • Revenue could come in above $1.2b. This is a forerunner of a solid recovery year.
  • MLCO has a global vision beyond Asia that makes it attractive at its current price.

[Coupang Inc. (CPNG US, SELL, TP US$13.7) TP Change]: Taiwan Expansion Will Lower the Profit Margin

By Shawn Yang

  • We expect CPNG to report C2Q23 revenue and profit in-line and (31.6%) vs. cons., respectively. CPNG’s profit miss is largely due to rapid expansion in Taiwan…
  • …which we estimate it will impact net profit by up to 40% this year.  AliExpress continues its development in South Korea, Temu, is expected to put pressure on Coupang. 
  • We maintain SELL on Coupang and revise down this year’s EPS estimate by 16% and cut our TP to US$ 13.7 to reflect the changes on the profit side.

Omnicom Group Inc.: Acquisition of Grabarz & Partner

By Baptista Research

  • Omnicom Group delivered a mixed set of results for the previous quarter, with revenues below analyst expectations but managed earnings beat.
  • Organic growth for the quarter was impressive and the company’s liquidity is strong while its cash flow supports its principal cash uses, including dividends, purchases, and share repurchases.
  • Omnicom made considerable headway on its AI strategy by incorporating generative AI into Omni, their market-leading technology platform, and forming important first-of-their-kind technological partnerships.

Nemak – ESG Report – Lucror Analytics

By Charles Macgregor

  • Lucror Analytics’ ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable).
  • We view Nemak’s ESG as “Adequate”, in line with the Environmental and Social scores. The company has “Strong” Governance. Controversies are “Immaterial” and Disclosure is “Strong”.
  • Based in Mexico, Nemak is a global Tier 1 supplier to automotive OEMs. It specialises in aluminium components for powertrain, body and structure applications, as well as electric vehicle components.

Conagra Brands Inc.: Summer 2023 Product Launches & Other Drivers

By Baptista Research

  • Conagra Brands delivered a mixed set of results in its most recent quarter, with revenues falling short of Wall Street expectations.
  • As Conagra made significant headway on its cost-saving initiatives and consequently saw a significant rise in service standards, its supply chain kept becoming better.
  • Conagra Brands further expanded its product line by introducing more than 50 new items across its frozen, grocery, and snacking divisions.

Oisix: Meal Kit Kaizen

By Michael Causton

  • Oisix Ra Daichi is by far Japan’s largest online food retailer, driven by the popularity of its fresh food and meal kit subscription services.
  • Despite some backend problems last year, the company expects its system of continual improvement and expansion of new lines of meal kits to bring strong growth in the medium term.
  • The development of the online food market should help boost the company’s prospects. Operating margins have worsened considerably but the company hopes to match the previous peak this year.

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Jul 26
0

Most Read: MOG Holdings, LG Energy Solution, ZTE Corp H, L’Occitane, Hanmi Semiconductor, NTT (Nippon Telegraph & Telephone), SK Biopharmaceuticals Co Ltd, UPL Ltd, Eoflow , Kum Yang and more

By | Daily Briefs, Most Read

In today’s briefing:

  • MOG Digitech (1942 HK): What the Flow Is Going On?
  • LG Energy Solution (373220 KS) – Potential Float Increase Coming Up
  • FXI Rebalance Preview: One Potential Change in September
  • L’Occitane (973 HK): Controlling Shareholder Mulling a Bid?
  • KOSPI Size Indices – Plenty of Overlap With Other Index Flows
  • NTT (9432) – LDP Consideration of Full Sale Is Not Necessarily Overhang
  • KRX New Deal Index Rebalance Preview: Review Period Nearly Complete
  • India – Potential Float Changes & Impact
  • An Update on Medtronic’s Tender Offer of Eoflow
  • Seeking Clues for a Preemptive Position in the Korean Local Block Deal Market in H2

MOG Digitech (1942 HK): What the Flow Is Going On?

By Brian Freitas

  • MOG Holdings (1942 HK) has been skyrocketing in price since the start of the year. Remarkably, there is little change in the number of shares that trade daily.
  • MOG Holdings (1942 HK) has a market cap of US$6.44bn and trades at a modest Price/Sales ratio of 75x and an equally modest Price to Book Value of 89.5x.
  • Liquidity has improved to the point where the stock could be added to some indices. However, there is a precedent of stocks not being added following market participant feedback.

LG Energy Solution (373220 KS) – Potential Float Increase Coming Up

By Brian Freitas

  • Selling from the ESOP program in the first quarter could result in an increase in LG Energy Solution (373220 KS)‘s float in local and global indices.
  • The largest buying from passive trackers could take place next month with over 3% of the real float needing to be bought.
  • Short interest has increased in the last month and short covering could take the stock higher ahead of the passive buying.

FXI Rebalance Preview: One Potential Change in September

By Brian Freitas

L’Occitane (973 HK): Controlling Shareholder Mulling a Bid?

By Arun George

  • L’Occitane (973 HK) is drawing takeover interest from Reinold Geiger, the Chairman and the largest shareholder, according to Bloomberg. Mr Geiger has been exploring financing options for the potential deal.
  • The presence of a significant disinterested shareholder, Acatis KVG, necessitates an attractive takeover premium. Acatis KVG trimmed its stake in July 2021 at HK$30.01 per share.
  • L’Occitane released a solid 1QFY2024 update today with constant currency growth of 24.5% YoY. Irrespective of a bid materialising, the valuation is undemanding compared to peer multiples. 

KOSPI Size Indices – Plenty of Overlap With Other Index Flows

By Brian Freitas

  • The review period for the September rebalance of the KOSPI Size Indices started 1 June and will end 31 August. The changes will be implemented at the close 7 September.
  • We see 8 migrations from MidCap to LargeCap, 7 migrations from LargeCap to MidCap, 6 new adds to MidCap, and 16 migrations from SmallCap to MidCap.
  • Historically, stocks migrating from SmallCap to MidCap have outperformed stocks that are migrating between other categories.

NTT (9432) – LDP Consideration of Full Sale Is Not Necessarily Overhang

By Travis Lundy

  • Six weeks ago, LDP Policy Research Council chairman KAGIUDA led a discussion about full NTT privatisation to fund defence. Today he said serious deliberations begin in August. Shares fell today.
  • The LDP wants non-tax resources to increase defence/social spending. Selling would require a change in NTT Law, but the argument is that communications have changed/internationalised.
  • As discussed in NTT (9432 JP) – Would the Govt Sell All Its Shares? Why? How? How Long? Overhang?, there are questions on overhang. BUT… presumably there are mitigants. 

KRX New Deal Index Rebalance Preview: Review Period Nearly Complete

By Brian Freitas

  • The review period for the September rebalance ends on 31 July, the changes will be announced towards end August and implemented at the close of trading on 7 September.
  • There is one change currently for each of the Secondary Battery, Bio and Game indices. Then there are a couple of changes for the Internet and BBIG indices.
  • There are four stocks that will have over 2 days of ADV to trade from passive trackers and these stocks could move around announcement of the changes.

India – Potential Float Changes & Impact

By Brian Freitas

  • Over the last few weeks, companies in India have been disclosing their shareholding pattern as of end-June. There are a few companies with significant float changes from end-March and/or end-December.
  • The changes in free float could be reflected in domestic and global indices over the next couple of months resulting in action from passive trackers.
  • We see 6 stocks where there could be passive inflows and 2 stocks that could have passive outflows – but there are caveats.

An Update on Medtronic’s Tender Offer of Eoflow

By Douglas Kim

  • In this insight, we provide an update of Medtronic’s tender offer of Eoflow. 
  • The foreign ownership of Eoflow has surged in the past two months from 6.5% on 25 May to 33.2% as of 24 July. 
  • We continue to believe that there is 95%+ probability of this M&A getting completed at the tender offer price of 30,000 won and Eoflow eventually becoming delisted in 2H 2023. 

Seeking Clues for a Preemptive Position in the Korean Local Block Deal Market in H2

By Sanghyun Park

  • As the possibility of implementing the pre-disclosure rule in the second half of this year arises, the local block deal market is expected to become more active. 
  • Specifically, there are observable movements among Kosdaq mid-sized companies that are particularly sensitive to deal execution risk. This suggests that LHJ’s KIS may further solidify its dominance.
  • Significant increases in trading volume through KB Securities could serve as potential clues indicating the imminence of block deals in companies where the likelihood of such deals is high.

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Jul 25
0

Daily Brief Australia: Empire Energy and more

By | Australia, Daily Briefs

In today’s briefing:

  • Empire Energy Group Ltd – Low-Cost Gas Options Are Increasingly Attractive

Empire Energy Group Ltd – Low-Cost Gas Options Are Increasingly Attractive

By Research as a Service (RaaS)

  • Empire Energy Group Limited (ASX:EEG) is an oil and gas producer/developer, with onshore Northern Territory (NT) and US oil/gas production assets.
  • EEG has the largest tenement position in the highly prospective Greater McArthur Basin, which includes the Beetaloo Sub-basin.
  • As more evaluation data comes to hand, the economic case builds for NT gas as the strategic high-calorific gas option for east coast Australia’s future domestic requirements; growing Gladstone LNG ullage; and as a potential supply source for Darwin’s LNG export opportunities. 

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Jul 25
0

Daily Brief South Korea: Celltrion Healthcare, Hanmi Semiconductor and more

By | Daily Briefs, South Korea

In today’s briefing:

  • Alpha Generation Through Share Buybacks in Korea: June & July 2023
  • KOSPI Size Indices – Plenty of Overlap With Other Index Flows

Alpha Generation Through Share Buybacks in Korea: June & July 2023

By Douglas Kim

  • In this insight, we discuss the alpha generation through companies that announced share buybacks in Korea in June and July 2023.
  • We provide a list of 38 stocks in the Korean stock market that have announced share buyback programs in June and July 2023.
  • The top four market cap stocks that have announced share repurchases include Celltrion Inc, Celltrion Healthcare, Hyundai Elevator, and SFA.

KOSPI Size Indices – Plenty of Overlap With Other Index Flows

By Brian Freitas

  • The review period for the September rebalance of the KOSPI Size Indices started 1 June and will end 31 August. The changes will be implemented at the close 7 September.
  • We see 8 migrations from MidCap to LargeCap, 7 migrations from LargeCap to MidCap, 6 new adds to MidCap, and 16 migrations from SmallCap to MidCap.
  • Historically, stocks migrating from SmallCap to MidCap have outperformed stocks that are migrating between other categories.

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Jul 25
0

Daily Brief India: ACC Ltd, Vedanta Resources, HPCL-Mittal Energy Ltd and more

By | Daily Briefs, India

In today’s briefing:

  • Quiddity Leaderboard NIFTY Sep 23: 5 ADDs/DELs for NIFTY Next 50 Unless the Methodology Changes
  • Vedanta Resources – Earnings Flash – Q1 FY 2023-24 Results (Vedanta Ltd) – Lucror Analytics
  • Morning Views Asia: HPCL-Mittal Energy Ltd, Innergex Renewable Energy

Quiddity Leaderboard NIFTY Sep 23: 5 ADDs/DELs for NIFTY Next 50 Unless the Methodology Changes

By Janaghan Jeyakumar, CFA

  • In this insight, we take a look at the names leading the race to become ADDs/DELs for the NIFTY 50 and NIFTY 100 indices in the September 2023 rebalance.
  • The NIFTY Next 50 methodology was supposed to change in June 2023 but this has been kept on hold for now. This change could still take place before September 2023.
  • In this insight, we take a look at our expectations for index changes under both the existing methodology and the proposed new methodology.

Vedanta Resources – Earnings Flash – Q1 FY 2023-24 Results (Vedanta Ltd) – Lucror Analytics

By Trung Nguyen

Vedanta Ltd’s Q1/23-24 results were weak in our view, as expected. The company is facing challenges from lower commodity prices and the large debt-servicing and repayment requirements from parent Vedanta Resources. Gross debt and net debt increased significantly, while the cash declined materially. The low and declining cash position will limit VEDL’s dividend-upstreaming capacity this fiscal year.

Morning Views Asia: HPCL-Mittal Energy Ltd, Innergex Renewable Energy

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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Jul 25
0

Daily Brief China: Travelsky Technology Ltd H, ZTE Corp H, Lianlian DigiTech, Bilibili Inc, Asymchem Laboratories, Robosense Technology, Qiniu Limited, NVC Lighting and more

By | China, Daily Briefs

In today’s briefing:

  • Travelsky (696): Time to Fly
  • FXI Rebalance Preview: One Potential Change in September
  • LianLian DigiTech Pre-IPO Tearsheet
  • [Bilibili(BILI US, SELL, TP US$12.3)Update]: Still Struggling to Balance Growth and Monetization
  • Asymchem Laboratories (6821.HK) Vs Pharmaron Beijing (3759.HK) – Deep Dive the Logic and the Outlook
  • Robosense Technology Pre-IPO – The Positives – A Whole Lot of Potential
  • Qiniu Pre-IPO – Widening Losses and Dwindling Market Share
  • NVC International

Travelsky (696): Time to Fly

By Henry Soediarko

  • Share price of Travelsky Technology Ltd H (696 HK) is still down YTD as investors are still overly cautious on Chinese travel data. 
  • YTD operational data shows that the number of flights processed is very close to the pre-COVID era. 
  • The company announced a profit alert recently, that should help to boost share price. 

FXI Rebalance Preview: One Potential Change in September

By Brian Freitas

LianLian DigiTech Pre-IPO Tearsheet

By Sumeet Singh

  • Lianlian DigiTech  is looking to raise at least US$500m in its upcoming HK IPO. The deal will be run by CICC and JP Morgan.
  • LianLian DigiTech is a digital technology company that provides a range of digital payment services and value-added services to customers in China and around the world.
  • The firm ranked first among all independent digital payment solution providers in China in terms of TPV in 2022, with a market share of 9.1%, according to Frost & Sullivan.

[Bilibili(BILI US, SELL, TP US$12.3)Update]: Still Struggling to Balance Growth and Monetization

By Shawn Yang

  • We were invited to BILI’s 2023 investor day, during which BILI management presented several catalysts. 
  • However, most of these catalysts appear to be minor. BILI management is fully aware of the challenges in the industry.
  • We maintain a SELL rating, and investors may consider shorting BILI after <Uma Musume> is launched.

Asymchem Laboratories (6821.HK) Vs Pharmaron Beijing (3759.HK) – Deep Dive the Logic and the Outlook

By Xinyao (Criss) Wang

  • Understanding the essential differences in business characteristics of CRO and CDMO could help investors better understand the differences between Asymchem and Pharmaron in terms of investment logic, financial performance, and prospects.
  • Since Pharmaron didn’t obtain COVID-19 big orders, it would maintain normal revenue growth in 2023. However, increasing labor costs and uncontrollable investment business would lead to unsatisfactory net profit performance.
  • Asymchem’s performance would be disappointing in 2023. However, its growth momentum is expected to restore after it digest the impact of COVID-19 orders. Then, Asymchem’s valuation could surpass Pharmaron afterwards. 

Robosense Technology Pre-IPO – The Positives – A Whole Lot of Potential

By Sumeet Singh

  • Robosense Technology (ROBO HK) (RT) is looking to raise around US$400m (estimated) in its upcoming Hong Kong IPO. 
  • As of Mar 23, it had earned design wins for mass production of LiDAR for 52 vehicles with 21OEMs and Tier 1 suppliers, ranking No. 1 globally, according to CIC.
  • In this note, we talk about the positive aspects of the deal.

Qiniu Pre-IPO – Widening Losses and Dwindling Market Share

By Ethan Aw

  • Qiniu Limited (1045102D CH) is looking to raise about US$200m in its upcoming Hong Kong IPO.
  • Qiniu is an intelligent audiovisual service provider. According to iResearch, the firm is the third largest audiovisual platform as a service (PaaS) provider in China in terms of FY22 revenue.
  • Qiniu’s revenue has primarily been driven by its MPaaS segment over the track record period. However, the firm’s losses are still widening while its balance sheet health deteriorates. 

NVC International

By Turtles all the way down

  • Since my last order filled today, here is my write-up on a special situation in Hong Kong.
  • Stock is NVC International holdings (NVC ticker HKG:2222) .
  • A Hong Kong nano cap stock. And it is quite illiquid, so beware.  I first learned of it through a Tweet from Writser .

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Jul 25
0

Daily Brief United States: Epam Systems, Gold, Visa, Bitcoin, Qualcomm Inc and more

By | Daily Briefs, United States

In today’s briefing:

  • Pounding the Table on EPAM
  • Wheat explodes after Russia threatens to attack grain shipments // Dollar-Commodities Divergence
  • Visa Earnings: Business Momentum Is Likely To Be Sustained, But Clouds Are Gathering
  • Altcoin Dominance Hits 4-Month High
  • Qualcomm: A Sleeper Stock For Potentially Big AI Gains

Pounding the Table on EPAM

By Value Punks

  • As most AI heavyweight stocks (e.g. Nvidia, Microsoft) have already soared, some investors may be left feeling that they have missed the AI bandwagon.
  • We believe there’s a delayed “AI winner” which the market is still sleeping on: EPAM Systems.
  • With the stock back at ~$230, the risk-reward here is highly attractive in our view.

Wheat explodes after Russia threatens to attack grain shipments // Dollar-Commodities Divergence

By The Commodity Report

  • Wheat futures soared as much as 9%, the biggest jump since 2012, as Russia threatened ships sailing to Ukrainian ports, escalating a conflict over exports from the key Black Sea region.

  • Russia’s defense ministry said that all ships headed to the ports from Thursday will be considered as potentially carrying military cargo.

  • It also said flag countries of vessels sailing to Ukraine will be considered as on Kyiv’s side in the conflict.

Visa Earnings: Business Momentum Is Likely To Be Sustained, But Clouds Are Gathering

By Vladimir Dimitrov, CFA

  • Visa continues to deliver as the company fully capitalizes on recent macroeconomic and industry-wide tailwinds.
  • The expectations for the upcoming quarter are high and the second half of the fiscal year is also likely to be more challenging.
  • This creates certain risks for the share price that are not necessarily priced in at the moment.

Altcoin Dominance Hits 4-Month High

By Kaiko

  • BTC volume dominance has slipped 8% since the start of July following the Ripple ruling, which instantly caused altcoin markets to rally.
  • BTC dominance across the top 25 centralized exchanges is currently at its lowest level since April, at 27%.
  • Offshore exchanges have experienced a more extreme drop in BTC trading activity, partially due to a spike in South Korean altcoin volume.

Qualcomm: A Sleeper Stock For Potentially Big AI Gains

By Kevin George

  • Qualcomm has announced a partnership with Meta to run the Llama 2 Large Language Model on mobile devices and PCs from 2024 on.
  • The deal could open up a new wave of LLM usage for everyday consumers on mobile, PC, and VR/AR headsets, potentially boosting Qualcomm’s market position.
  • In the year’s artificial intelligence gold rush, Nvidia (NVDA) surged to a $1 trillion market cap.

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