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Smartkarma Daily Briefs

Aug 03
0

Daily Brief Singapore: CapitaLand Ascott Trust, Bunker, Uni Asia Holdings and more

By | Daily Briefs, Singapore

In today’s briefing:

  • Capitaland Ascott Trust – Another One to Add to Its Latest Spree of Acquisitions
  • Ex-Gojek VP’s Modern Financial Analytics Platform Bunker Secures US$5M
  • kopi-C with Uni-Asia Group’s CFO: “Being small sets us apart”

Capitaland Ascott Trust – Another One to Add to Its Latest Spree of Acquisitions

By Clarence Chu

  • CapitaLand Ascott Trust (CLAS SP) is looking to raise around S$200m from its primary follow-on. Included in the deal is another S$100m preferential offering to existing shareholders.
  • Proceeds will be used towards acquiring three new properties, and for asset enhancement initiatives.
  • The deal would be a relatively large one for the REIT to digest, at 31.6 days of three month ADV.

Ex-Gojek VP’s Modern Financial Analytics Platform Bunker Secures US$5M

By e27

  • Singapore-based startup Bunker, which provides a modern financial analytics platform for SMEs, has secured over US$5 million over two funding rounds.
  • The investors include January Capital, Alpha JWC, GFC, Northstar Group, Money Forward, Alpine Ventures, and Patamar Capital.
  • Angel investors, namely Chris Lin, Rosemary DeAaragon, Tiger Fang, Gaurav Gupta, Christian Sutardi, Warren Tseng, Jonathan Wong, Nakul Malhotra, and Shaun Hon, also participated.

kopi-C with Uni-Asia Group’s CFO: “Being small sets us apart”

By Geoff Howie

  • kopi-C with Uni-Asia Group’s CFO: “Being small sets us apart” Uni-Asia Group Chief Financial Officer Lim Kai Ching explains how staying small and diversified has allowed the company to find a niche in shipping vessels and property investments.
  • This is the belief of Mr.
  • Lim Kai Ching, Group Chief Financial Officer (CFO) of Uni-Asia Group, an alternative investment company that has forged its specialty in niche assets within the property and shipping markets.

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Aug 03
0

Daily Brief South Korea: Hanwha Galleria and more

By | Daily Briefs, South Korea

In today’s briefing:

  • Korea Small Cap Gem #23: Hanwha Galleria (Deep Value + Five Guys + Chairman’s Son Buying)

Korea Small Cap Gem #23: Hanwha Galleria (Deep Value + Five Guys + Chairman’s Son Buying)

By Douglas Kim

  • Hanwha Galleria (452260 KS) is the 23rd company in our Korea Small Cap Gems series. 
  • Hanwha Galleria is a spun-off company from Hanwha Solution. Hanwha Galleria’s shares have declined 39% since being relisted on 31 May 2023. 
  • Hanwha Galleria is a deep value stock with undervalued real estate assets. Chairman’s son is also buying aggressively and there is a big catalyst for Five Guys launch in Korea. 

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Aug 03
0

Daily Brief Financials: CapitaLand Ascott Trust, SBFC Finance Limited, HSBC Holdings, S&P 500 INDEX, IP Group PLC, Uni Asia Holdings and more

By | Daily Briefs, Financials

In today’s briefing:

  • Capitaland Ascott Trust – Another One to Add to Its Latest Spree of Acquisitions
  • SBFC Finance IPO Update: Rapid Growth with Few Cautions
  • HSBC – Realized/Unrealized Gains Oversized To Profit, Soaring Credit Costs
  • SBFC Finance IPO – RHP Updates, Peer Comparison and Thoughts on Valuation
  • EQD | SPX INDEX WEEKLY Supports After US Credit Downgrade
  • IP Group – Remaining on track despite tough markets
  • kopi-C with Uni-Asia Group’s CFO: “Being small sets us apart”

Capitaland Ascott Trust – Another One to Add to Its Latest Spree of Acquisitions

By Clarence Chu

  • CapitaLand Ascott Trust (CLAS SP) is looking to raise around S$200m from its primary follow-on. Included in the deal is another S$100m preferential offering to existing shareholders.
  • Proceeds will be used towards acquiring three new properties, and for asset enhancement initiatives.
  • The deal would be a relatively large one for the REIT to digest, at 31.6 days of three month ADV.

SBFC Finance IPO Update: Rapid Growth with Few Cautions

By Nitin Mangal

  • SBFC Finance Limited (1547353D IN) IPO opens for subscription this week.
  • The company has shown strong operations in F23, led by growth in overall business, productivity, profits on the back of controlled credit costs.
  • There are however few cautions that warrant attention, which includes the litigations, attritions, write offs, etc.

HSBC – Realized/Unrealized Gains Oversized To Profit, Soaring Credit Costs

By Daniel Tabbush

  • Realized/Unrealized gains on securities are increasingly oversized relative to profit
  • In the latest quarter these are USD10.1bn compared with net profit of USD7.0bn
  • HSBC’s credit costs rose over 100% both YoY and QoQ

SBFC Finance IPO – RHP Updates, Peer Comparison and Thoughts on Valuation

By Ethan Aw

  • SBFC Finance Limited (1547353D IN) is looking to raise up to US$131m in its India IPO. 
  • SBFC Finance is a systematically important, non-deposit taking non-banking finance company (NBFC-ND-SI), offering secured MSME Loans and Loans against Gold. 
  • In our previous note, we looked at the company’s past performance. In this note, we talk about RHP updates, undertake a peer comparison and provide our thoughts on valuation.

EQD | SPX INDEX WEEKLY Supports After US Credit Downgrade

By Nico Rosti

  • The S&P 500 INDEX rally that started in October 2022 is currently encountering some turbulence, possibly due to various factors including the recent US credit downgrade by Fitch.
  • The current WEEKLY pullback may be an opportunity to accumulate LONG position, buy& hold trade.
  • The price area to buy where is between 4540 and 4332: probability of the uptrend resuming from there is between 50% and 75% based on current pattern readings.

IP Group – Remaining on track despite tough markets

By Edison Investment Research

IP Group’s private portfolio valuations remained broadly stable in H123, with its c 4.1% NAV decline in total return (TR) terms mostly due to a de rating of listed holdings (Oxford Nanopore, ONT, in particular) and FX headwinds, though subsequently largely offset by a rebound in quoted holdings to date. IP Group’s holding-level liquidity remains firm and 84% of its direct portfolio holdings have a cash runway of 12 months or more. IP Group shares continue to trade at a wide 53% discount to NAV.

kopi-C with Uni-Asia Group’s CFO: “Being small sets us apart”

By Geoff Howie

  • kopi-C with Uni-Asia Group’s CFO: “Being small sets us apart” Uni-Asia Group Chief Financial Officer Lim Kai Ching explains how staying small and diversified has allowed the company to find a niche in shipping vessels and property investments.
  • This is the belief of Mr.
  • Lim Kai Ching, Group Chief Financial Officer (CFO) of Uni-Asia Group, an alternative investment company that has forged its specialty in niche assets within the property and shipping markets.

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Aug 03
0

Daily Brief Indonesia: Halodoc and more

By | Daily Briefs, Indonesia

In today’s briefing:

  • Halodoc Raises $100m Series D in Astra-Led Round

Halodoc Raises $100m Series D in Astra-Led Round

By Tech in Asia

  • Halodoc, the Indonesia-based healthtech firm, raked in US$100 million in series D funding in a round led by returning investor Astra Digital International, according to a statement.
  • This boosts Astra’s total investments in the company to US$135 million. In 2021, the local conglomerate also led the US$80 million series C round of Halodoc.
  • With the new capital, Halodoc has raised at least US$258 million, according to Tech in Asia data.

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Aug 03
0

Daily Brief United States: S&P 500 INDEX, Intel Corp, Teradyne Inc, PTC Inc, Quest Diagnostics, ACM Research, Tyler Technologies, Ebay Inc, Fortive and more

By | Daily Briefs, United States

In today’s briefing:

  • EQD | SPX INDEX WEEKLY Supports After US Credit Downgrade
  • Intel. PC Recovery Nigh As Incentives No Longer Required To Shift Client CPUs
  • Teradyne Inc.: Can The New Archimedes Analytics Solution Be A Game Changer? – Key Drivers
  • PTC Inc.: Will The Creo+ SaaS CAD Solution Catalyze Their Growth? – Key Drivers
  • Quest Diagnostics: Can The Haystack Acquisition & The Enhancements To The Cancer Diagnostics Portfolio Give Them A Boost? – Key Drivers
  • [ACM Research (ACMR US, BUY, TP US$30) Preview]: CXMT Order Volume Could Be Ahead of Expectations
  • Tyler Technologies Inc.: Partnership With Carbyne & Other Major Developments
  • eBay Inc.: Enhancing The Fashion Shopping Experience With The Certilogo Acquisition! – Key Drivers
  • Fortive Corporation: Revolutionizing Facility Management for Multi-Unit Operators! – Key Drivers

EQD | SPX INDEX WEEKLY Supports After US Credit Downgrade

By Nico Rosti

  • The S&P 500 INDEX rally that started in October 2022 is currently encountering some turbulence, possibly due to various factors including the recent US credit downgrade by Fitch.
  • The current WEEKLY pullback may be an opportunity to accumulate LONG position, buy& hold trade.
  • The price area to buy where is between 4540 and 4332: probability of the uptrend resuming from there is between 50% and 75% based on current pattern readings.

Intel. PC Recovery Nigh As Incentives No Longer Required To Shift Client CPUs

By William Keating

  • Q2’23 revenues of $12.9 billion, down 15% YoY but up ~10% QoQ and handily beating the guided midpoint of $12 billion.
  • Q3 outlook for $13.4 billion at the midpoint, up 3.8% sequentially
  • Mr Gelsinger envisages a centrino-like era of AI-enabled PCs, starting with Meteor Lake in H2’23. Is this realistic?

Teradyne Inc.: Can The New Archimedes Analytics Solution Be A Game Changer? – Key Drivers

By Baptista Research

  • Teradyne delivered an all-around beat in the previous quarter.
  • The company’s performance met expectations, but segment-wise, the test business showed more strength, while robotics faced challenges with softer demand.
  • Teradyne also recently introduced the Teradyne Archimedes analytics solution, an open architecture that brings real-time analytics to semiconductor testing.

PTC Inc.: Will The Creo+ SaaS CAD Solution Catalyze Their Growth? – Key Drivers

By Baptista Research

  • PTC Inc. delivered a mixed set of results in its most recent result, with revenues above Wall Street expectations but below-par earnings.
  • The company’s top-line ARR growth showed resilience, solid performance across product groups and geographies, benefiting from cross-selling efforts, and improved sales productivity.
  • A mix shift has driven margin expansion to higher-margin software, go-to-market improvements, R&D offshoring, and leveraging scale in a recurring subscription business.

Quest Diagnostics: Can The Haystack Acquisition & The Enhancements To The Cancer Diagnostics Portfolio Give Them A Boost? – Key Drivers

By Baptista Research

  • Quest Diagnostics delivered a solid result and managed an all-around beat in the quarter.
  • Quest Diagnostics remained focused on driving growth through specialized advanced diagnostics, acquisitions, and operational improvements.
  • We give Quest Diagnostics Incorporated a ‘Hold’ rating with a revised target price.

[ACM Research (ACMR US, BUY, TP US$30) Preview]: CXMT Order Volume Could Be Ahead of Expectations

By Shawn Yang

  • We expect ACMR to report C2Q23 top-line and non-IFRS net profit in-line and 12.7% vs. consensus, respectively.
  • Peers guided that a major ACMR customer, CXMT, made purchase orders greater than they had previously anticipated. We raised our FY23 revenue estimate by 2% to US$ 574mn.
  • ACMR remains position to capture demand from export restricted local manufacturers. As a result, we maintain our BUY rating and US$ 30 TP.

Tyler Technologies Inc.: Partnership With Carbyne & Other Major Developments

By Baptista Research

  • Tyler Technologies delivered a strong result and managed an all-around beat in the quarter.
  • The company’s focus on cloud transition and recurring SaaS revenue proved successful, with SaaS revenues growing organically by 20% for the tenth consecutive quarter.
  • Tyler Technologies Inc. showcased its success in the public safety market, achieving its best first-half sales performance since acquiring New World in 2015.

eBay Inc.: Enhancing The Fashion Shopping Experience With The Certilogo Acquisition! – Key Drivers

By Baptista Research

  • eBay delivered a mixed set of results for the previous quarter, with revenues well below analyst expectations but managed an earnings beat.
  • Over the past three years, eBay’s tech-led re-imagination journey aimed to become the best global marketplace, focusing on products that provide value and meaningful customer choices.
  • The management is working towards overhauling the user experience and design to offer personalized browsing experiences and are rapidly deploying AI-driven features like Magical Listing.

Fortive Corporation: Revolutionizing Facility Management for Multi-Unit Operators! – Key Drivers

By Baptista Research

  • Fortive Corporation delivered a strong result and managed an all-around beat in the last quarter, showcasing its portfolio’s durability and the strength of its execution.
  • The company achieved higher core growth, margins, earnings, and free cash flows.
  • Their focus on building leading positions across customers’ critical connected workflows has paid off, demonstrated by the significant margins and expansion in adjusted operating margins.

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Aug 03
0

Daily Brief Consumer: Times Neighborhood, Luckin Coffee, Hanwha Galleria , Rakuten Group , Taste Gourmet and more

By | Consumer, Daily Briefs

In today’s briefing:

  • Country Garden Services (6098 HK): 1H23 Profit Warning A Good Read-Across For The Sector
  • [Luckin Coffee (LKNCY US, BUY, TP US$43) TP Change]: Economies of Scale Brings Margin Improvement
  • Korea Small Cap Gem #23: Hanwha Galleria (Deep Value + Five Guys + Chairman’s Son Buying)
  • 2 Rakuten Subsidiaries’ Listings Run Counter to the Dissolution of Parent-Subsidiary Listings
  • Taste Gourmet: Q1 FY24 Preview, Another Strong Quarter in the Making

Country Garden Services (6098 HK): 1H23 Profit Warning A Good Read-Across For The Sector

By Steve Zhou, CFA

  • Country Garden Services (6098 HK) announced a profit warning for 1H23 last night, expecting sales to increase by 3-4% yoy and net profit to see a 0-10% drop yoy.
  • The company also announced the intention to repurchase up to 10% of total shares outstanding. 
  • Share price up +18% following the profit warning and share buyback announcement – a good read-across for the rest of the sector that will report interim results later this month. 

[Luckin Coffee (LKNCY US, BUY, TP US$43) TP Change]: Economies of Scale Brings Margin Improvement

By Shawn Yang

  • Luckin Coffee reported 2Q23 revenue beat our est. by 7.5%, and non-GAAP NI beat our estimate by 84.1%. 
  • The top-line beat is driven by stronger product sold on average store sales, the bottom-line beat is driven by economies of scale and less than estimated sales promotion.  
  • We maintain the stock as BUY rating and raise TP by US$5.5 to US$43/ADS (27x PE in 2023) to factor in the outlook of sustainable margin improvement.

Korea Small Cap Gem #23: Hanwha Galleria (Deep Value + Five Guys + Chairman’s Son Buying)

By Douglas Kim

  • Hanwha Galleria (452260 KS) is the 23rd company in our Korea Small Cap Gems series. 
  • Hanwha Galleria is a spun-off company from Hanwha Solution. Hanwha Galleria’s shares have declined 39% since being relisted on 31 May 2023. 
  • Hanwha Galleria is a deep value stock with undervalued real estate assets. Chairman’s son is also buying aggressively and there is a big catalyst for Five Guys launch in Korea. 

2 Rakuten Subsidiaries’ Listings Run Counter to the Dissolution of Parent-Subsidiary Listings

By Aki Matsumoto

  • Cash generation through the subsidiaries’ IPOs will only buy time, and investors are likely to focus on when Rakuten will move to solve the problems in its cell phone business.
  • In recent years, TSE’s market reorganization has focused attention on parent-subsidiary listings, and there’ve been moves to convert listed subsidiaries into wholly owned subsidiaries or sell subsidiaries to other companies.
  • For Rakuten, subsidiary IPOs are an essential means of raising cash, but TSE’s recognition of the governance issues involved in parent-subsidiary listings raises questions about Rakuten’s two parent-subsidiary listings.

Taste Gourmet: Q1 FY24 Preview, Another Strong Quarter in the Making

By Sameer Taneja

  • We estimate Taste Gourmet (8371 HK) to deliver 39% YoY revenue growth and about 13% YoY profit growth (adj 350% YoY) for Q1 FY24e, to be declared on August 10th.
  • The company is expected to go ex-dividend on the 4th of August and pay out a 5.2-HK cent final dividend by the 24th of August for FY23.  
  • Trading at 6x FY24e PE /20% of the market capitalization in cash and a 9-10% dividend yield ( based on a 50-60% payout ratio) represents a great investment opportunity.

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Aug 03
0

Daily Brief India: SBFC Finance Limited, Concord Biotech Ltd, ACC Ltd, Vedanta Resources and more

By | Daily Briefs, India

In today’s briefing:

  • SBFC Finance IPO Update: Rapid Growth with Few Cautions
  • Concord Biotech IPO – RHP Updates – Continued Growing Although Concentration Risk Remains Elevated
  • Quiddity Leaderboard BSE/​​​​SENSEX Dec 23: 7 Changes for BSE 100 and 5 Changes for BSE 200
  • Concord Biotech (Pre-IPO): Niche Offering Amid Lean Competition to Drive Stable Growth
  • SBFC Finance IPO – RHP Updates, Peer Comparison and Thoughts on Valuation
  • Morning Views Asia: Vedanta Resources

SBFC Finance IPO Update: Rapid Growth with Few Cautions

By Nitin Mangal

  • SBFC Finance Limited (1547353D IN) IPO opens for subscription this week.
  • The company has shown strong operations in F23, led by growth in overall business, productivity, profits on the back of controlled credit costs.
  • There are however few cautions that warrant attention, which includes the litigations, attritions, write offs, etc.

Concord Biotech IPO – RHP Updates – Continued Growing Although Concentration Risk Remains Elevated

By Clarence Chu

  • Concord Biotech Ltd (658823Z IN) is looking to raise around US$188m in its India IPO.
  • Concord Biotech (Concord) is an India-based biopharma firm, which develops and manufactures fermentation-based active pharmaceutical ingredients (APIs).
  • As per F&S, Concord was one of the leading global developers and manufacturers of select fermentation-based APIs across immunosuppressants and oncology in terms of market share, based on FY21 volume.

Quiddity Leaderboard BSE/​​​​SENSEX Dec 23: 7 Changes for BSE 100 and 5 Changes for BSE 200

By Janaghan Jeyakumar, CFA

  • In this insight, we take a look at the Potential ADDs/DELs for the BSE SENSEX, 100, and 200 Indices in the December 2023 Rebalance.
  • In July, we saw the deletion of HDFC Limited (HDFC IN) from several indices in this family which triggered multiple intra-review index changes.
  • At present, I do not see any changes for the SENSEX index but I see seven ADDs/DELs for BSE 100 and five ADDs/DELs for BSE 200.

Concord Biotech (Pre-IPO): Niche Offering Amid Lean Competition to Drive Stable Growth

By Tina Banerjee

  • Concord Biotech Ltd (658823Z IN) is amongst the few fermentation-based API manufacturing companies globally. The company commanded market share of 20%+ by volume in 2022 across identified fermentation‐based API products.
  • Concord Biotech IPO opens for subscription on August 4. The IPO consists of offer for sale of 21M shares by Helix Investment Holdings at a price band of INR705–741/share.
  • Large and growing addressable market, sizable market share, niche and limited competition offering, consistent growth and profitability, and reasonable valuation make the IPO worth of subscribing.

SBFC Finance IPO – RHP Updates, Peer Comparison and Thoughts on Valuation

By Ethan Aw

  • SBFC Finance Limited (1547353D IN) is looking to raise up to US$131m in its India IPO. 
  • SBFC Finance is a systematically important, non-deposit taking non-banking finance company (NBFC-ND-SI), offering secured MSME Loans and Loans against Gold. 
  • In our previous note, we looked at the company’s past performance. In this note, we talk about RHP updates, undertake a peer comparison and provide our thoughts on valuation.

Morning Views Asia: Vedanta Resources

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 03
0

Daily Brief China: Flat Glass, Times Neighborhood, Luckin Coffee, Hua Hong Semiconductor, WuXi AppTec, Taste Gourmet, Immuno Cure BioTech and more

By | China, Daily Briefs

In today’s briefing:

  • Hong Kong CEO & Director Dealings (2 August): Flat Glass, Arts Optical, Sky Light Holdings
  • Country Garden Services (6098 HK): 1H23 Profit Warning A Good Read-Across For The Sector
  • [Luckin Coffee (LKNCY US, BUY, TP US$43) TP Change]: Economies of Scale Brings Margin Improvement
  • [Hua Hong (1347 HK, BUY, TP HK$34) TP Change]: Valuation Is Attractive Post-Shanghai Listing
  • WuXi AppTec (2359.HK/603259.CH) 23H1 – Is It Time to Start Being Optimistic?
  • Taste Gourmet: Q1 FY24 Preview, Another Strong Quarter in the Making
  • Immuno Cure Bags US$12M Series A Funding, Gears up for Hong Kong IPO

Hong Kong CEO & Director Dealings (2 August): Flat Glass, Arts Optical, Sky Light Holdings

By David Blennerhassett

  • The data in this insight is collated from the “shareholding disclosure” link on the HKEx website
  • Often there is a corresponding HKEx announcement on the increase – or decrease – in the shareholding by directors. Or pledging. However, such disclosures are by no means an absolute.
  • Stocks mentioned in this regular insight include Flat Glass (6865 HK), Arts Optical Intl Hldgs (1120 HK), and Sky Light Holdings Ltd (3882 HK).

Country Garden Services (6098 HK): 1H23 Profit Warning A Good Read-Across For The Sector

By Steve Zhou, CFA

  • Country Garden Services (6098 HK) announced a profit warning for 1H23 last night, expecting sales to increase by 3-4% yoy and net profit to see a 0-10% drop yoy.
  • The company also announced the intention to repurchase up to 10% of total shares outstanding. 
  • Share price up +18% following the profit warning and share buyback announcement – a good read-across for the rest of the sector that will report interim results later this month. 

[Luckin Coffee (LKNCY US, BUY, TP US$43) TP Change]: Economies of Scale Brings Margin Improvement

By Shawn Yang

  • Luckin Coffee reported 2Q23 revenue beat our est. by 7.5%, and non-GAAP NI beat our estimate by 84.1%. 
  • The top-line beat is driven by stronger product sold on average store sales, the bottom-line beat is driven by economies of scale and less than estimated sales promotion.  
  • We maintain the stock as BUY rating and raise TP by US$5.5 to US$43/ADS (27x PE in 2023) to factor in the outlook of sustainable margin improvement.

[Hua Hong (1347 HK, BUY, TP HK$34) TP Change]: Valuation Is Attractive Post-Shanghai Listing

By Shawn Yang

  • We expect Hua Hong to report C1Q23 top-line and non-IFRS net income in-line and (24%) vs. cons., respectively, missing mainly due to one-time costs. 
  • Hua Hong’s post-A share IPO valuation is cheap at 0.7x P/B, but we expect that weakening industrials demand and a slow recovery to hamper shipments.
  • We maintain BUY but cut Hua Hong’s TP to HK$ 34 reflecting lowered wafer shipments estimates for FY24/25. Our TP implies 15x FY24 PE.

WuXi AppTec (2359.HK/603259.CH) 23H1 – Is It Time to Start Being Optimistic?

By Xinyao (Criss) Wang

  • The market’s reaction to WuXi AppTec’s 23H1 report was positive due to some improvements in performance, but we don’t think WuXi AppTec has reversed its predicament completely if look closely.
  • We deep dive the challenges/risks in macro environment faced by US/Europe. The orders WuXi AppTec received from MNCs can’t guarantee future growth momentum if the US cannot achieve “soft landing”.
  • We advise investors not to be blinded by the high growth of CXO in the past since the prosperity of CXO industry may face continuous downward pressure in the future.

Taste Gourmet: Q1 FY24 Preview, Another Strong Quarter in the Making

By Sameer Taneja

  • We estimate Taste Gourmet (8371 HK) to deliver 39% YoY revenue growth and about 13% YoY profit growth (adj 350% YoY) for Q1 FY24e, to be declared on August 10th.
  • The company is expected to go ex-dividend on the 4th of August and pay out a 5.2-HK cent final dividend by the 24th of August for FY23.  
  • Trading at 6x FY24e PE /20% of the market capitalization in cash and a 9-10% dividend yield ( based on a 50-60% payout ratio) represents a great investment opportunity.

Immuno Cure Bags US$12M Series A Funding, Gears up for Hong Kong IPO

By e27

  • Hong Kong-based Immuno Cure BioTech has closed the US$12 million tranche of its US$27 million Series A fundraising round, led by Gobi Partners-managed AEF Greater Bay Area Fund.
  • The biotech company will use the capital to accelerate the development of DNA vaccines and antibodies besides preparing for an IPO in Hong Kong.
  • Immuno Cure focuses on R&D of immunotherapies for cancers, inflammatory and infectious diseases based on its patented “PD-1-enhanced DNA Vaccine Platform” and “Anti-Δ42PD1 Antibody Platform” with two DNA vaccine candidates, ICVAX and ICCOV, currently in clinical trials.

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Aug 03
0

Daily Brief Japan: Itochu Techno Solutions, Kawasaki Kisen Kaisha, E Guardian Inc, Ana Holdings, Rakuten Group and more

By | Daily Briefs, Japan

In today’s briefing:

  • Itochu To Take Over Itochu Techno Solutions (CTC (4739 JP)) Just As Growth Jumps
  • ITOCHU Techno-Solutions (4739 JP): ITOCHU’s JPY4,325 Tender Offer
  • KLINE (9107) Ups Shareholder Return – Fun & Games May Ensue
  • E-Guardian (6050 JP): CHANGE Holdings’ Partial Tender Offer
  • ANA (9202) | How Much Will It Cost to Capture Carbon Emissions?
  • 2 Rakuten Subsidiaries’ Listings Run Counter to the Dissolution of Parent-Subsidiary Listings
  • SBI Affiliate To Buy 45-49% of E-Guardian (6050) In Partial Tender Offer

Itochu To Take Over Itochu Techno Solutions (CTC (4739 JP)) Just As Growth Jumps

By Travis Lundy

  • Itochu Corp (8001 JP) today announced it had agreed with 61%-owned Itochu Techno Solutions (4739 JP) sub to take over CTC and squeeze out minorities. 
  • The stock released earnings mid-day, somehow, but not on TDNet until post-close. The stock jumped in the last two hours. The Tender Offer is at a 10% premium to close.
  • Growth will be up, and there are lots of financial assets and net receivables so this is 8+x March 2025. Itochu is not overpaying. But there will be no counter.

ITOCHU Techno-Solutions (4739 JP): ITOCHU’s JPY4,325 Tender Offer

By Arun George

  • Itochu Techno Solutions (4739 JP) has recommended Itochu Corp (8001 JP)’s tender offer of JPY4,325 per share, an 18.7% premium to the undisturbed price (1 August).
  • The transaction is a two-step acquisition through a cash tender offer and subsequent squeeze-out. The lower limit of the tender offer is set at a 5.43% ownership ratio.
  • The minimum acceptance condition requires a 14% minority acceptance rate. This is doable as the tender price is attractive and equals the 20-year share price high.

KLINE (9107) Ups Shareholder Return – Fun & Games May Ensue

By Travis Lundy

  • Today, Kawasaki Kisen Kaisha (9107 JP) announced Q1 earnings. As expected, net was WAY down on weak container business. But the company revised up H1 and Full-Year.
  • KLINE increased its FY2023 payout, upping its expected buyback plan from ¥50bn to ¥60bn. This is still cheap at 8.5x and 0.7x book, and there is non-container growth. 
  • The structure of the buyback deserves attention. It may deserve a very short-term trade. The buyback construct has the possibility of “fun and games.”

E-Guardian (6050 JP): CHANGE Holdings’ Partial Tender Offer

By Arun George

  • E Guardian Inc (6050 JP) has announced a partial tender offer and third-party allotment with Change Inc (3962 JP). CHANGE will subscribe for 1.5 million shares at JPY2,099 per share.
  • The tender offer is for a minimum of 3.7 million and a maximum of 4.3 million shares at JPY3,000 per share, a 42.9% premium to the undisturbed price.
  • The tender offer is reasonable. The minimum acceptance condition requires a 37% minority acceptance rate. A 100% minority participation rate implies a minimum proration is 42.39%. 

ANA (9202) | How Much Will It Cost to Capture Carbon Emissions?

By Mark Chadwick

  • ANA has just announced that it will purchase carbon removal credits underpinned by Direct Air Capture (DAC)
  • The purchase of 30,000 credits over 3 years is virtually nothing compared to the company’s annual CO2 emissions over 12 million tons
  • Assuming that DAC is expected to remove just 10% of emissions, we estimate that it could wipe out over 70% of operating profit

2 Rakuten Subsidiaries’ Listings Run Counter to the Dissolution of Parent-Subsidiary Listings

By Aki Matsumoto

  • Cash generation through the subsidiaries’ IPOs will only buy time, and investors are likely to focus on when Rakuten will move to solve the problems in its cell phone business.
  • In recent years, TSE’s market reorganization has focused attention on parent-subsidiary listings, and there’ve been moves to convert listed subsidiaries into wholly owned subsidiaries or sell subsidiaries to other companies.
  • For Rakuten, subsidiary IPOs are an essential means of raising cash, but TSE’s recognition of the governance issues involved in parent-subsidiary listings raises questions about Rakuten’s two parent-subsidiary listings.

SBI Affiliate To Buy 45-49% of E-Guardian (6050) In Partial Tender Offer

By Travis Lundy

  • Today, Change Inc (3962 JP) (30%-owned by SBI Holdings (8473 JP)) announced a Tender Offer to buy 32-36.9% of E-Guardian, followed by a third-party placement to get them to 45-49%.
  • Small cap E-Guardian does internet services support, ad processing, cyber security (their fastest growing segment) and top line has been growing.
  • The partial offer is big enough to matter, and up 50%. It is worth a look for people who like small cap special sits.

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Aug 03
0

Most Read: Lasertec Corp, NARI Technology Co Ltd A, Itochu Techno Solutions, Sekisui Jushi, Ecopro BM , Water Oasis, Kawasaki Kisen Kaisha, E Guardian Inc, CapitaLand Ascott Trust and more

By | Daily Briefs, Most Read

In today’s briefing:

  • Nikkei 225 Index Rebalance Preview (Sep 2023): Final Look as Review Period Ends
  • Offshore China ETFs Rebalance Preview: Two Changes in September
  • Itochu To Take Over Itochu Techno Solutions (CTC (4739 JP)) Just As Growth Jumps
  • Huge Change at Sekisui Jushi (4212) – 20% Buyback from Erstwhile Controlling Shareholder
  • Insiders Selling at Ecopro BM and Kum Yang
  • Shortlist Of High Conviction Ideas: Income, Value, and Margin of Safety – August 2023
  • ITOCHU Techno-Solutions (4739 JP): ITOCHU’s JPY4,325 Tender Offer
  • KLINE (9107) Ups Shareholder Return – Fun & Games May Ensue
  • E-Guardian (6050 JP): CHANGE Holdings’ Partial Tender Offer
  • Capitaland Ascott Trust – Another One to Add to Its Latest Spree of Acquisitions

Nikkei 225 Index Rebalance Preview (Sep 2023): Final Look as Review Period Ends

By Brian Freitas

  • The review period for the Nikkei 225 (NKY) September rebalance ended yesterday. There should be three index changes, potential stepwise inclusion, no Fast Retailing capping and a big funding trade.
  • There appears to be decent positioning on the potential adds, while it is the close adds that are spiking along with a big increase in traded volumes.
  • If the three changes are on expected lines, estimated one-way turnover at the rebalance is 2.01% resulting in a one-way trade of JPY 461bn (US$3.24bn). 

Offshore China ETFs Rebalance Preview: Two Changes in September

By Brian Freitas

Itochu To Take Over Itochu Techno Solutions (CTC (4739 JP)) Just As Growth Jumps

By Travis Lundy

  • Itochu Corp (8001 JP) today announced it had agreed with 61%-owned Itochu Techno Solutions (4739 JP) sub to take over CTC and squeeze out minorities. 
  • The stock released earnings mid-day, somehow, but not on TDNet until post-close. The stock jumped in the last two hours. The Tender Offer is at a 10% premium to close.
  • Growth will be up, and there are lots of financial assets and net receivables so this is 8+x March 2025. Itochu is not overpaying. But there will be no counter.

Huge Change at Sekisui Jushi (4212) – 20% Buyback from Erstwhile Controlling Shareholder

By Travis Lundy

  • In April, Sekisui Jushi (4212 JP) announced lackluster earnings and unsurprising guidance after a year marked by higher costs. It also announced a small (2.5%) buyback, likely for cross-holdings.
  • Yesterday, the company announced Q1 results, and a revision to their buyback programme (to buy 20.2% of shares out). This morning their 22+% (#1) shareholder Sekisui Chemical sold 18%. 
  • Forward PER dropped nearly 20%. The stock is still outrageously cash/securities-rich and if “re-levered” to zero net leverage would get a high 20s ROE. Hmmm…

Insiders Selling at Ecopro BM and Kum Yang

By Douglas Kim

  • Ecopro BM (247540 KS) and Kum Yang (001570 KS)’s shares are down 2.5% and 4.5%, respectively today, driven by news of insiders at these companies selling their shares.
  • It is estimated that the total amount of Ecopro BM shares sold by insiders and related parties was about 20 billion won in July by more than 12 insiders/related parties.
  • We are increasingly concerned about insiders selling at Ecopro BM and Kum Yang. Coupled with lofty valuations, we think there is a higher probability of downside risk on these names. 

Shortlist Of High Conviction Ideas: Income, Value, and Margin of Safety – August 2023

By Sameer Taneja

ITOCHU Techno-Solutions (4739 JP): ITOCHU’s JPY4,325 Tender Offer

By Arun George

  • Itochu Techno Solutions (4739 JP) has recommended Itochu Corp (8001 JP)’s tender offer of JPY4,325 per share, an 18.7% premium to the undisturbed price (1 August).
  • The transaction is a two-step acquisition through a cash tender offer and subsequent squeeze-out. The lower limit of the tender offer is set at a 5.43% ownership ratio.
  • The minimum acceptance condition requires a 14% minority acceptance rate. This is doable as the tender price is attractive and equals the 20-year share price high.

KLINE (9107) Ups Shareholder Return – Fun & Games May Ensue

By Travis Lundy

  • Today, Kawasaki Kisen Kaisha (9107 JP) announced Q1 earnings. As expected, net was WAY down on weak container business. But the company revised up H1 and Full-Year.
  • KLINE increased its FY2023 payout, upping its expected buyback plan from ¥50bn to ¥60bn. This is still cheap at 8.5x and 0.7x book, and there is non-container growth. 
  • The structure of the buyback deserves attention. It may deserve a very short-term trade. The buyback construct has the possibility of “fun and games.”

E-Guardian (6050 JP): CHANGE Holdings’ Partial Tender Offer

By Arun George

  • E Guardian Inc (6050 JP) has announced a partial tender offer and third-party allotment with Change Inc (3962 JP). CHANGE will subscribe for 1.5 million shares at JPY2,099 per share.
  • The tender offer is for a minimum of 3.7 million and a maximum of 4.3 million shares at JPY3,000 per share, a 42.9% premium to the undisturbed price.
  • The tender offer is reasonable. The minimum acceptance condition requires a 37% minority acceptance rate. A 100% minority participation rate implies a minimum proration is 42.39%. 

Capitaland Ascott Trust – Another One to Add to Its Latest Spree of Acquisitions

By Clarence Chu

  • CapitaLand Ascott Trust (CLAS SP) is looking to raise around S$200m from its primary follow-on. Included in the deal is another S$100m preferential offering to existing shareholders.
  • Proceeds will be used towards acquiring three new properties, and for asset enhancement initiatives.
  • The deal would be a relatively large one for the REIT to digest, at 31.6 days of three month ADV.

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