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Smartkarma Daily Briefs

Jul 10
0

Daily Brief Energy/Materials: JSR Corp and more

By | Daily Briefs, Energy & Materials Sector

In today’s briefing:

  • Merger Arb Mondays (10 Jul) – JSR, Yachiyo, InvoCare, Costa, Musgrave, Metro Pacific, Healthway

Merger Arb Mondays (10 Jul) – JSR, Yachiyo, InvoCare, Costa, Musgrave, Metro Pacific, Healthway

By Arun George

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Jul 10
0

Daily Brief Health Care: Bumrungrad Hospital Pub Co, Hansoh Pharmaceutical and more

By | Daily Briefs, Healthcare

In today’s briefing:

  • Bumrungrad Hospital (BH TB): International Business Is Roaring Back; Greenfield Project Approved
  • Hansoh Pharmaceutical (3692.HK)- Positive Growth in 2023, but Valuation Turning Point Hasn’t Arrived

Bumrungrad Hospital (BH TB): International Business Is Roaring Back; Greenfield Project Approved

By Tina Banerjee

  • Bumrungrad Hospital Pub Co (BH TB) recorded 48% YoY increase in revenue from hospital operation to THB6 billion in 1Q23, mainly driven by 78% YoY revenue growth from non-Thai patients.
  • International patients contributed 55% of total revenue in 1Q23. Middle East and Indochina remained the two most important growth drivers, with YoY revenue growth of 147% and 60%, respectively.
  • The company is constructing a 150-bed boutique hospital in Phuket, one of the world’s most coveted island travel destinations, thereby opening immense opportunity for medical tourism.  

Hansoh Pharmaceutical (3692.HK)- Positive Growth in 2023, but Valuation Turning Point Hasn’t Arrived

By Xinyao (Criss) Wang

  • VBP would continue to have an impact on Hansoh’s generic drug business in 2023.Such negative impact would gradually fade from 2024 as big varieties have all been included in VBP.
  • The core difference between Hansoh and Hengrui is that someone similar to Zhang Lianshan’s role arrived late, resulting in a slower start and weaker overall framework for innovation drug business.
  • Hansoh Pharmaceutical (3692 HK) is still in the process of business transformation. Before the harvest time of innovative drug pipeline comes, Hansoh’s valuation growth would still be a long-term story.

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Jul 10
0

Daily Brief Quantitative Analysis: Hong Kong Connect Flows (Jul 7th): China Mobile and more

By | Daily Briefs, Quantitative Analysis

In today’s briefing:

  • Hong Kong Connect Flows (Jul 7th): China Mobile, ICBC, ABC, Tencent, HSBC, BYD
  • A-H Premium Weekly (Jul 7th): BankComm, ICBC, CCB, BYD, Asymchem, Hisense, Baiyunshan
  • HK Short Interest Weekly: Luye Pharma, Baba, Li Auto
  • Northbound Flows (Jul 7th): ZTE, BYD, Goertek, CATL, CMB, Moutai, Focus Media

Hong Kong Connect Flows (Jul 7th): China Mobile, ICBC, ABC, Tencent, HSBC, BYD

By Ke Yan, CFA, FRM

  • We analyze the weekly Hong Kong Connect flows with our data engine for holding position as of July 7th.
  • The top stocks by inflows and outflows were tabulated for all market, HSCEI, mid cap and s/mid cap groups.
  • We analyzed southbound Hong Kong connect flows in the past week and highlight flows for  China Mobile, ICBC, ABC, Tencent, HSBC, BYD.

A-H Premium Weekly (Jul 7th): BankComm, ICBC, CCB, BYD, Asymchem, Hisense, Baiyunshan

By Ke Yan, CFA, FRM

  • We analyse the changes of A-H premium on 143 stocks over the last week. The average A-H premium was 120.6% as of Jul 7th.
  • The average A-H premium changed by 5.9ppt week on week, led by consumer staples, consumer discretionary, energy.
  • We highlight weekly changes in A-H premium for BankComm, ICBC, CCB, BYD, Asymchem, Hisense, Baiyunshan, Yankuang Energy, New China Life.

HK Short Interest Weekly: Luye Pharma, Baba, Li Auto

By Ke Yan, CFA, FRM

  • We analyzed the latest HK SFC report for aggregate short position as of Jun 30th.
  • Top short increases and decreases were tabulated for one week and four week period. 
  • We highlight short changes in Luye Pharma, Baba, Li Auto.

Northbound Flows (Jul 7th): ZTE, BYD, Goertek, CATL, CMB, Moutai, Focus Media

By Ke Yan, CFA, FRM

  • We analyze the weekly Shanghai/Shenzhen northbound Connect flows with our data engine for holding position as of July 7th.
  • We estimate the weekly outflows to be US$1,104.6 million, led by consumer staples, financials, and offset by consumer discretionary, communication services, utilities.
  • We highlight flows for Zte, BYD, Goertek, CATL, CMB, Moutai, Focus Media Information Technology.

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Jul 10
0

Daily Brief Credit: Morning Views Asia: China Jinmao Holdings and more

By | Credit, Daily Briefs

In today’s briefing:

  • Morning Views Asia: China Jinmao Holdings, Sunny Optical Technology Group, Tata Motors ADR

Morning Views Asia: China Jinmao Holdings, Sunny Optical Technology Group, Tata Motors ADR

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 10
0

Daily Brief ESG: Capital Efficiency Is the Topic of the June AGM and more

By | Daily Briefs, ESG

In today’s briefing:

  • Capital Efficiency Is the Topic of the June AGM, While What Is Happening to Passive Fund Voting?

Capital Efficiency Is the Topic of the June AGM, While What Is Happening to Passive Fund Voting?

By Aki Matsumoto

  • Companies that accept reductions in policy shareholdings tend to repurchase their own shares. Pressure to reduce policy shareholdings will increase further this year when share prices are rising.
  • In order to verify whether institutional investors’ voting criteria and voting behavior are consistent, the reasons for supporting/opposing individual proposals should be disclosed in more detail.
  • Investors are expected to base decisions on performance, as voting advisers returned to policy of recommending voting against top management in companies with lower-than-standard ROEs due to recovery from COVID-19.

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Jul 10
0

Daily Brief Equity Bottom-Up: Ant Group’s $6.0bn Buyback Move Casts Doubt on IPO Prospects and more

By | Daily Briefs, Equity Bottom-Up

In today’s briefing:

  • Ant Group’s $6.0bn Buyback Move Casts Doubt on IPO Prospects
  • China Tourism Duty Free Corp (601888. CH): Is Now Good Time for Bottom-Fishing?
  • China Internet Weekly (10Jul2023): Meituan, Alibaba, Ant Group, Tencent
  • Z Holdings: Yahoo Shopping Falling Further Behind Amazon and Rakuten
  • Bumrungrad Hospital (BH TB): International Business Is Roaring Back; Greenfield Project Approved
  • [Bilibili (BILI US, SELL, TP US$12.3) TP Change]: The Launch Of “Uma Musume” May Face More Delay
  • Hansoh Pharmaceutical (3692.HK)- Positive Growth in 2023, but Valuation Turning Point Hasn’t Arrived

Ant Group’s $6.0bn Buyback Move Casts Doubt on IPO Prospects

By Oshadhi Kumarasiri

  • China’s regulators on Friday imposed Ant Financial Services Group (6688 HK) with a fine of RMB 7.12bn. A day later, Ant Group unveiled a share buyback program worth $6bn.
  • The last time media created a positive narrative around Ant Group was in January 2023 when Jack Ma relinquished control of the company.
  • However, the media excitement was short-lived as Alibaba Group Holding (9988 HK)‘s share price quickly resumed a downward trend after rising by around 22%.

China Tourism Duty Free Corp (601888. CH): Is Now Good Time for Bottom-Fishing?

By Eric Chen

  • CDF’s 1H23 preliminary results suggest that business recovery remains on track. Voices of bottom-fishing are getting louder as free fall in its share price already erased 50% market cap YTD.
  • We believe the dynamics have fundamentally changed compared to three years ago when CDF was the stock market darling. Investors need be aware of the anchoring effect in making decisions.
  • Moderate growth, pressured margin and contracted valuation multiple will be the new reality facing investors of the stock in our view. Wait for better entry point.

China Internet Weekly (10Jul2023): Meituan, Alibaba, Ant Group, Tencent

By Ming Lu

  • Meituan’s food delivery has taken 20% of the Hong Kong market share in its first month’s operations.
  • The authorities suggests that they will not further restrict financial apps such as AliPay of Ant Group.
  • Tencent’s WeChat Pay charged a money transfer commission, but it exempted university campus the next day.

Z Holdings: Yahoo Shopping Falling Further Behind Amazon and Rakuten

By Michael Causton

  • Last year was pivotal for Yahoo Japan: despite record group performance, GTVs in e-commerce actually fell despite continued strong growth in the sector 
  • In a recent survey, Amazon was the most frequently used e-commerce mall at 49.6%, followed by Rakuten (32%), but Yahoo was far, far below at just 9.8%.
  • Yahoo Shopping is now not only less popular with consumers, even merchants are dissatisfied – which is saying something when the service is essentially free.

Bumrungrad Hospital (BH TB): International Business Is Roaring Back; Greenfield Project Approved

By Tina Banerjee

  • Bumrungrad Hospital Pub Co (BH TB) recorded 48% YoY increase in revenue from hospital operation to THB6 billion in 1Q23, mainly driven by 78% YoY revenue growth from non-Thai patients.
  • International patients contributed 55% of total revenue in 1Q23. Middle East and Indochina remained the two most important growth drivers, with YoY revenue growth of 147% and 60%, respectively.
  • The company is constructing a 150-bed boutique hospital in Phuket, one of the world’s most coveted island travel destinations, thereby opening immense opportunity for medical tourism.  

[Bilibili (BILI US, SELL, TP US$12.3) TP Change]: The Launch Of “Uma Musume” May Face More Delay

By Shawn Yang

  • We cut our revenue estimations for 2H23, mainly due to increased uncertainty surrounding the launch of “Uma Musume.” 
  • We also lower our estimations for live streaming due to concerns about macro factors. We slightly raise our estimations for BILI’s advertising business…
  • …as we anticipate that it will benefit from gaming and e-commerce. Our rev./non-GAAP net income are 1.0% and (6.4%) vs cons in 2Q23. Cut TP to $12.3, maintaining “Sell” rating.

Hansoh Pharmaceutical (3692.HK)- Positive Growth in 2023, but Valuation Turning Point Hasn’t Arrived

By Xinyao (Criss) Wang

  • VBP would continue to have an impact on Hansoh’s generic drug business in 2023.Such negative impact would gradually fade from 2024 as big varieties have all been included in VBP.
  • The core difference between Hansoh and Hengrui is that someone similar to Zhang Lianshan’s role arrived late, resulting in a slower start and weaker overall framework for innovation drug business.
  • Hansoh Pharmaceutical (3692 HK) is still in the process of business transformation. Before the harvest time of innovative drug pipeline comes, Hansoh’s valuation growth would still be a long-term story.

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Jul 10
0

Daily Brief Crypto: Bitcoin Gets The Nod and more

By | Crypto, Daily Briefs

In today’s briefing:

  • Bitcoin Gets The Nod

Bitcoin Gets The Nod

By Etherbridge

  • The bitcoin halving is officially insight, expected to occur in late April 2024.
  • Unlike bitcoins competitors for money like the US dollar or British pound, its monetary policy is programmatic, simple, immutable and transparent to its holders.
  • The upcoming halving will reduce the block subsidy to 3.125 BTC a block, trimming bitcoins issuance rate to 0.9%.

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Jul 10
0

Daily Brief Event-Driven: Socionext Placement – Valuation More Reasonable but past Secondary Offerings Have a Mixed Record and more

By | Daily Briefs, Event-Driven

In today’s briefing:

  • Socionext Placement – Valuation More Reasonable but past Secondary Offerings Have a Mixed Record
  • Merger Arb Mondays (10 Jul) – JSR, Yachiyo, InvoCare, Costa, Musgrave, Metro Pacific, Healthway
  • EQD | Volatility Update: Weekly Review of Vol Changes and Best Trades-Taking a Breather
  • EQD | Hang Seng Index (HSI) WEEKLY Looking for Short-Term Direction

Socionext Placement – Valuation More Reasonable but past Secondary Offerings Have a Mixed Record

By Sumeet Singh

Merger Arb Mondays (10 Jul) – JSR, Yachiyo, InvoCare, Costa, Musgrave, Metro Pacific, Healthway

By Arun George

EQD | Volatility Update: Weekly Review of Vol Changes and Best Trades-Taking a Breather

By Simon Harris

  • Weekly summary of vol changes and moves across Global Markets
  • Analysing ATM volatility and skew changes over the last 5 days
  • We suggest a few trades to take advantage of the implied vol surfaces

EQD | Hang Seng Index (HSI) WEEKLY Looking for Short-Term Direction

By Nico Rosti

  • The Hong Kong Hang Seng Index (HSI INDEX) has been in a downtrend since January 2018. Long-term direction unclear, but the WEEKLY period is mildly OVERSOLD, it may bounce soon.
  • The case for a LONG trade is valid if the market does not fall > 2 consecutive weeks from June 30th’s Close (18916.43). High-probability LONG trades from 17786.
  • SHORT trade strategy possible but requires patience: if the market rises, it could rise for 2-3 weeks, based on MRM’s pattern readings. Better wait and short that scenario, not earlier.

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Jul 10
0

Daily Brief Macro: Global Credit Outlook: Tightness at Banks and Speculative Grade Issuers to Persist and more

By | Daily Briefs, Macro

In today’s briefing:

  • Global Credit Outlook: Tightness at Banks and Speculative Grade Issuers to Persist
  • Portfolio Watch: The Summer Volatility Razor
  • Positioning Watch – The 60/40 Portfolio in Reverse
  • Bond Rout = Stock Rout?
  • Why Our “Ultimate Market Timing Model” Is Cautious
  • US Bond Market Signalling Higher Yields

Global Credit Outlook: Tightness at Banks and Speculative Grade Issuers to Persist

By Said Desaque

  • Credit markets have finally accepted the view that central bank policy rates will remain higher for longer. Despite the resilience of global demand, conditions vary considerably on a cross-border basis.
  • Conditions in credit markets have not deteriorated as badly as envisaged. Investors are wary about speculative grade borrowers. Banks continue to be much more risk averse than credit markets. 
  • US borrowers will wait before refinancing due to the higher for longer policy of the Fed. Asia Pacific speculative grade borrowers face refinancing risks if market conditions fail to improve. 

Portfolio Watch: The Summer Volatility Razor

By Emil Moller

  • Usually, July is a bit of a zombie month with traders locked in or taking chips off the table to enjoy the beach instead.
  • But with VIX up some 13% on the week and treasury yields at 15-year highs after a massive rout on the back of a massive beat on the ADP report which today seems to be undermined by a Non-farm payroll report as of writing.
  • It would seem that the general modus operandi in this point is whether your book can tackle a peak in volatility or not

Positioning Watch – The 60/40 Portfolio in Reverse

By Andreas Steno

  • The reverse 60/40 portfolio seems to be THE allocation of the average trader with equity positioning slightly underweight and bond positioning massively overweight.
  • Being underweight equities is not doing any good for your portfolio at the moment, and the long bond trade doesn’t have positive returns in sight if everything that’s unfolding right now continues.
  • Macro-wise and market-wise we are currently at a big crossroad, as traders and PMs are trying to figure out the state of the global economy, and how central banks are going to respond to recent data releases.

Bond Rout = Stock Rout?

By Cam Hui

  • The S&P 500 hit an air pocket last week and as it was rattled by the rout in bond prices.
  • As the index weakened, SPY formed a textbook island reversal with a measured objective of about 435, which represents a fairly shallow pullback.
  • Looking ahead over the next few weeks, current conditions argue for a corrective period or consolidation before equity bulls can regain their mojo.

Why Our “Ultimate Market Timing Model” Is Cautious

By Cam Hui

  • How would you like to take greater equity risk while reducing the worst of the downside risk? Our Ultimate Market Timing Model (UMTM) is designed to do that.
  • Our UMTM is cautious on equities based on two scenarios. The first is a mild recession, which is consistent with the Fed’s staff forecast.
  • The other more ominous scenario is the false soft landing which turns into stagflationary growth, which would be unfriendly to both stock and bond prices.

US Bond Market Signalling Higher Yields

By Untying The Gordian Knot

  • Late Economic cycle rate hikes are seen as a buying opportunity of duration as inflation expectations are expected to come under control.
  • For the first time, FED funds are not discounting rate cuts in 2023.
  • If inflation remains high over time, the strategies of reducing interest rates in 2024, investing in a long US duration and expecting lower breakeven views may face difficulties.

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Jul 10
0

Daily Brief Thematic (Sector/Industry): Semiconductor Events Deserving Your Attention @ 9/7/23 and more

By | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

  • Semiconductor Events Deserving Your Attention @ 9/7/23
  • Ohayo Japan | Weak Payrolls=Lower Rates; Weaker USD; NUGGET:Heat Pumps-The Future of Cooling/Heating
  • Japan Screen | Nikkei Dividend Stocks
  • China TMT Update Jul.10-Baba/LKNCY/BEKE-Ant Group Fine/COTTI Downgrade Promotion/Home Decoration Biz
  • Weekly Stock Bullfinder – Week of 7/10
  • Crypto Frontier

Semiconductor Events Deserving Your Attention @ 9/7/23

By William Keating

  • Global semiconductor sales amounted to $40.7 billion in May’23. This represented an increase of 1.7% MoM and a 21.1% decline on a year-ago basis
  • Samsung pre-announces Q2’23 sales and operating profit slightly down sequentially
  • HMB3 standard launched. SK Hynix wins a critical HMB3 design win at NVIDIA

Ohayo Japan | Weak Payrolls=Lower Rates; Weaker USD; NUGGET:Heat Pumps-The Future of Cooling/Heating

By Mark Chadwick

  • OVERSEAS.  SPX -0.3% and down WoW; Weak Payrolls numbers lead to fall in US 2Yr to 4.95%, USD weakness;  This week – packed schedule with CPI; Watch Bank earnings
  • JAPAN. NKY Futs flat vs Cash; USDJPY 142.2, on weaker US payrolls;   JP companies struggle to lift ROE due to expanding Equity Base (=more buybacks?); Kishida to reshuffle cabinet
  • NUGGET. Heat Pumps – A Big Deal for Daikin(6367)/Melco(6503).  A large addressable, and growing market, and great for the environment. Yes, you should get excited!

Japan Screen | Nikkei Dividend Stocks

By Mark Chadwick

  • The Nikkei has recently launched two new equity indices for investors that are focused on dividends.
  • We highlight some similarities and differences with the well-known US S&P 500 Dividend Aristocrats Index
  • We carry out a quick and simple screen of the Nikkei constituents to find the best dividend stocks to buy

China TMT Update Jul.10-Baba/LKNCY/BEKE-Ant Group Fine/COTTI Downgrade Promotion/Home Decoration Biz

By Shawn Yang

  • BABA: Ant Group fine to be announced, but listing unlikely until 2024 (+)
  • LKNCY: COTTI Coffee downgrade its promotion campaign, and Coffee price war is gradually easing (+)
  • BEKE: Beike is exploiting new opportunity in home decoration business, and Beike Group Decoration delivered its first batch of projects in Tianjin

Weekly Stock Bullfinder – Week of 7/10

By Weekly Stock Bull Finder

  • Energy- Rotation to Laggards or Something More Brewing?
  • The worst S&P 500 sector so far in 2023 has been energy which is down almost 8% getting trounced by the technology and communication services sectors.
  • Inflation readings have benefited so far by energy “staying in the box” in 2023 versus the wild price spikes to $5/gallon gasoline and above which occurred last spring.

Crypto Frontier

By subSPAC

  • Bitcoin Depot, a North American Bitcoin ATM firm, took a significant leap last week, diving into public markets through an $885 million SPAC transaction.
  • This move marks the company as the first pure-play operator in the industry to pursue such an avenue, a distinct endeavor in a field dotted with complexity and uncertainty.
  • Within the past few years, we’ve seen several crypto SPAC deals, such as cryptocurrency miner Core Scientific and digital rewards and crypto platform Bakkt Holdings, successfully step into the public arena.

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