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Smartkarma Daily Briefs

Oct 23
0

Daily Brief Thematic (Sector/Industry): Ohayo Japan | Middle East Dominates; Japanese Companies Disposing Non-Core Real Estate and more

By | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

  • Ohayo Japan | Middle East Dominates; Japanese Companies Disposing Non-Core Real Estate
  • China Weekly Economic Wrap 10-22-2023

Ohayo Japan | Middle East Dominates; Japanese Companies Disposing Non-Core Real Estate

By Mark Chadwick

  • Overseas: SPX -1.3% , Nasdaq -1.5%; Broad-based equity decline with all sectors in the red as concerns over Israel-Hamas conflict grew; airline stocks under pressure
  • Today: NKY Futs -0.8% v cash. JPY 149.9; Core inflation at 13-month low; Signs that the property market overheating. Daiichi Sankyo big payday for cancer drugs
  • JapanX: Japanese companies boost P/B ratios by selling non-core real estate assets, transforming corporate governance and efficiency in response to the TSE’s call for improved performance

China Weekly Economic Wrap 10-22-2023

By Fern Wang

  • China had its one-belt-one-road summit held in Beijing this week and this year marked the 10-year anniversary of the initiative
  • China’s 3Q GDP is better than expected. Central bank has put outsized liquidity in the market while keep interest rate unchanged.
  • Big banks are helping to resolve local government debt issues, extending the term and reducing the interest rate the existing bank loans and also replaced others with bank loans.

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Oct 23
0

Daily Brief Quantitative Analysis: Hong Kong Connect Flows (Oct 20th): Meituan and more

By | Daily Briefs, Quantitative Analysis

In today’s briefing:

  • Hong Kong Connect Flows (Oct 20th): Meituan
  • Northbound Flows (Oct 19th): BYD, Changan Auto, Zhongji Innolight, Moutai, Wuliangye
  • TWSE Foreign Holding Weekly (Oct 20th): Wistron, TSMC, Airoha Tech, Delta Elec, Taiwan Cement
  • A-H Premium Weekly (Oct 20th): Postal Savings, Byd, CICC
  • HK Short Interest Weekly: Wuxi Bio, AIA, Bidu

Hong Kong Connect Flows (Oct 20th): Meituan

By Ke Yan, CFA, FRM

  • We analyze the weekly Hong Kong Connect flows with our data engine for holding position as of October 20th.
  • The top stocks by inflows and outflows were tabulated for all market, HSCEI, mid cap and s/mid cap groups.
  • We have highlighted the flows for Meituan (3690 HK) .

Northbound Flows (Oct 19th): BYD, Changan Auto, Zhongji Innolight, Moutai, Wuliangye

By Ke Yan, CFA, FRM

  • We analyze the weekly Shanghai/Shenzhen northbound Connect flows with our data engine for holding position as of October 19th.
  • We estimate the weekly outflows to be US$3,259.2 million, led by materials, industrials, and offset by consumer discretionary, utilities.
  • We highlight flows for BYD, Chongqing Changan Automobile, Zhongji Innolight, Moutai, Wuliangye, Ping An Insurance, CATL, Haitian Flavouring, Longi Green, CMB.

TWSE Foreign Holding Weekly (Oct 20th): Wistron, TSMC, Airoha Tech, Delta Elec, Taiwan Cement

By Ke Yan, CFA, FRM

  • We analyzed the changes in foreign holdings of TWSE Stocks as of Oct 20th which has an aggregated holding worth USD627.4bn.
  • We tabulate league table for top changes by value for 1 week, one 4 weeks, 1 year and top stocks held by foreign instutions by dollar value.
  • We estimate that foreign flows to be outflows of USD974mln and highlight foreign changes in Wistron, TSMC, Airoha Tech, Delta Elec, Taiwan Cement.

A-H Premium Weekly (Oct 20th): Postal Savings, Byd, CICC

By Ke Yan, CFA, FRM

  • We analyse the changes of A-H premium on 146 stocks over the last week. The average A-H premium was 120.6% as of Oct 20th.
  • The average A-H premium changed by 2.0ppt week on week, led by consumer staples, financials, industrials and offset by information technology, communication services, consumer discretionary.
  • We highlight weekly changes in A-H premium for Postal Savings, Byd and CICC.

HK Short Interest Weekly: Wuxi Bio, AIA, Bidu

By Ke Yan, CFA, FRM

  • We analyzed the latest HK SFC report for aggregate short position as of Oct 13th.
  • Top short increases and decreases were tabulated for one week and four week period. 
  • We highlight short changes in Wuxi Bio, AIA and Bidu.

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Oct 23
0

Daily Brief Event-Driven: Japan – Increase in Shorts on Some Interesting** Stocks and more

By | Daily Briefs, Event-Driven

In today’s briefing:

  • Japan – Increase in Shorts on Some Interesting** Stocks
  • EQD | KOSPI 200 Falling, LONG Support
  • Quiddity Leaderboard ASX Dec 23: InvoCare, Origin Energy, New Crest, Allkem, and More

Japan – Increase in Shorts on Some Interesting** Stocks

By Brian Freitas

EQD | KOSPI 200 Falling, LONG Support

By Nico Rosti

  • The KOSPI 200 INDEX closed down last week (CC=-1) and is going towards the Q2/median support at 314. The index is also OVERSOLD MONTHLY (CC=-3)
  • One possible scenario is to see the index downtrending into early/mid-November, find a bottom, and then begin a counter-rally from there.
  • The index could go down more this week, but a LONG trade could begin at 314 support, and if that does not hold, the next support area is at 306.

Quiddity Leaderboard ASX Dec 23: InvoCare, Origin Energy, New Crest, Allkem, and More

By Janaghan Jeyakumar, CFA

  • In this insight, we take a look at the potential index changes for ASX 200, 100, 50, and 20 in the run up to the December 2023 Rebalance.
  • There could be up to four ASX 200 changes including the intra-review changes that could potentially be triggered by M&A events.  
  • The Origin Energy (ORG AU), Newcrest Mining (NCM AU), and Allkem Ltd (AKE AU) deals also could have interesting index change and/or flow implications over the next few weeks/months.

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Oct 23
0

Daily Brief Australia: Boss Resources and more

By | Australia, Daily Briefs

In today’s briefing:

  • Quiddity Leaderboard ASX Dec 23: InvoCare, Origin Energy, New Crest, Allkem, and More

Quiddity Leaderboard ASX Dec 23: InvoCare, Origin Energy, New Crest, Allkem, and More

By Janaghan Jeyakumar, CFA

  • In this insight, we take a look at the potential index changes for ASX 200, 100, 50, and 20 in the run up to the December 2023 Rebalance.
  • There could be up to four ASX 200 changes including the intra-review changes that could potentially be triggered by M&A events.  
  • The Origin Energy (ORG AU), Newcrest Mining (NCM AU), and Allkem Ltd (AKE AU) deals also could have interesting index change and/or flow implications over the next few weeks/months.

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Oct 23
0

Most Read: Newcrest Mining, Giordano International, Vinda International, WH Group, Shinko Electric Industries, Kurita Water Industries, Persol Holdings, New World Development and more

By | Daily Briefs, Most Read

In today’s briefing:

  • Newcrest-Newmont Merger: Fancy Index Shenanigans
  • Asian Dividend Gems: Giordano International
  • Vinda (3331 HK): Tanoto Sees The Wood
  • WH Group (288 HK):  Potential US Listing Of Smithfield Foods Could Be A Catalyst
  • Last Week In Event SPACE: Shinko Electric Industries, MGM China, Decente, Sankei Real Estate,
  • Index Rebalance & ETF Flow Recap: NKY, ASX, Liontown, J&T Express, JP/IN Positioning, IndusInd Bank
  • Japan – Increase in Shorts on Some Interesting** Stocks
  • NWD 17 HK: FY23 Results Update, to Reset and Transform, and a Beta Play if Rate Expectation Peaks
  • (Mostly) Asia-Pac Weekly Risk Arb Wrap: Lithium Power, Vinda, Origin Energy, Liontown, Kenedix REITs
  • Ohayo Japan | Middle East Dominates; Japanese Companies Disposing Non-Core Real Estate

Newcrest-Newmont Merger: Fancy Index Shenanigans

By Travis Lundy

Asian Dividend Gems: Giordano International

By Douglas Kim

  • Giordano, one of the most recognizable apparel business in Asia, has been improving its operations materially with solid growth in sales and profits. 
  • Giordano provides very high dividend yield and payout. The consensus expects DPS of HKD 0.28 for Giordano in 2023, which would suggest a dividend yield of 12.8%. 
  • We like the company’s high dividend yield, loyal customer base, and attractive valuations. It is trading at EV/EBITDA of 3.6x and P/B of 1.5x. 

Vinda (3331 HK): Tanoto Sees The Wood

By David Blennerhassett

  • On the 27 April, Vinda (3331 HK) announced its controlling shareholder Essity (ESSITYB SS) would commence a strategic review of its 51.59% ownership. See Essity Mulls Holding In Vinda (3331 HK).
  • That shook a variety of suitors out of the woodwork (so to speak) including (reportedly) Brazil’s Suzano, the world’s largest hardwood pulp producer, Bain Capital, CVC Capital, and DCP Capital.
  • The latest (alleged) interested party is the Tanoto family, currently holding a 7.03% stake, having first cleared 5% on the 26 September. 

WH Group (288 HK):  Potential US Listing Of Smithfield Foods Could Be A Catalyst

By Steve Zhou, CFA

  • According to public news yesterday, WH Group (288 HK) plans to list its US pork business Smithfield Foods, the largest US pork producer, back in the US again. 
  • WH Group currently trades at 5x 2024E PE, assuming earnings return to the 2022 level in 2024E.  Since 2016, the company has had an average PE of 11x. 
  • The stock is a buy with a fairly strong catalyst in the potential US listing of the Smithfield Foods business, while downside is limited. 

Last Week In Event SPACE: Shinko Electric Industries, MGM China, Decente, Sankei Real Estate,

By David Blennerhassett

Index Rebalance & ETF Flow Recap: NKY, ASX, Liontown, J&T Express, JP/IN Positioning, IndusInd Bank

By Brian Freitas

Japan – Increase in Shorts on Some Interesting** Stocks

By Brian Freitas

NWD 17 HK: FY23 Results Update, to Reset and Transform, and a Beta Play if Rate Expectation Peaks

By Jacob Cheng

  • In this insight, we summarized NWD’s FY2023 results.  We think the gearing and balance sheet, the biggest concern that market has, has been clearly addressed
  • NWD has announced disposal of its stake in NWS, and will have more corporate actions to come.  The dividend expectation is reset
  • We view most of the negatives are priced in at current valuation.  NWD is much better than a Chinese developer, and should not be trading at 0.19x PB

(Mostly) Asia-Pac Weekly Risk Arb Wrap: Lithium Power, Vinda, Origin Energy, Liontown, Kenedix REITs

By David Blennerhassett

Ohayo Japan | Middle East Dominates; Japanese Companies Disposing Non-Core Real Estate

By Mark Chadwick

  • Overseas: SPX -1.3% , Nasdaq -1.5%; Broad-based equity decline with all sectors in the red as concerns over Israel-Hamas conflict grew; airline stocks under pressure
  • Today: NKY Futs -0.8% v cash. JPY 149.9; Core inflation at 13-month low; Signs that the property market overheating. Daiichi Sankyo big payday for cancer drugs
  • JapanX: Japanese companies boost P/B ratios by selling non-core real estate assets, transforming corporate governance and efficiency in response to the TSE’s call for improved performance

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Oct 23
0

Daily Brief Thailand: Delta Electronics Thai, Krung Thai Bank Pub and more

By | Daily Briefs, Thailand

In today’s briefing:

  • Delta Taiwan Vs. Thailand Monitor: Market Cap Metric Breaches Key Level For 1st Time Since Dec 2022
  • Thai Banks 3Q23 Screener; Stick with Krung Thai and Ayudhya

Delta Taiwan Vs. Thailand Monitor: Market Cap Metric Breaches Key Level For 1st Time Since Dec 2022

By Vincent Fernando, CFA

  • Delta Thailand shares haven’t recovered from their sharp drop at the end of September, which happened after the parent Delta Taiwan sold a stake in the Thai subsidiary.
  • Delta Thailand shares fell to the point that its market cap finally became smaller than Delta Taiwan, for the first time since December 2022.
  • Delta Thailand’s market cap should be substantially smaller than its parent Delta Taiwan. We analyze what history tells us the further relative downside for Delta Thailand could be.

Thai Banks 3Q23 Screener; Stick with Krung Thai and Ayudhya

By Victor Galliano

  • Krung Thai ranks second from top in terms of post-provision profitability and it has double digit ROE with a healthy balance sheet, along with attractive PBV and PE ratios
  • We also like Ayudhya, with its sound pre and post-provision profitability metrics with healthy ROE and ROA, its sound credit quality metrics and undemanding valuations
  • Kasikorn’s TTM cost of risk remain high versus the peers, and in 3Q23 it continued to worsen; its pre-provision profitability is healthy but there is, as yet, no CoR improvement

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Oct 23
0

Daily Brief Credit: Morning Views Asia: Hopson Development and more

By | Credit, Daily Briefs

In today’s briefing:

  • Morning Views Asia: Hopson Development

Morning Views Asia: Hopson Development

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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Oct 23
0

Daily Brief ECM: CaiNiao Smart Logistics Pre-IPO Part 3 | Key Comps and more

By | Daily Briefs, ECM

In today’s briefing:

  • CaiNiao Smart Logistics Pre-IPO Part 3 | Key Comps, Valuation Multiples | 310 Bn CNY Justifiable

CaiNiao Smart Logistics Pre-IPO Part 3 | Key Comps, Valuation Multiples | 310 Bn CNY Justifiable

By Daniel Hellberg

  • In this insight we first consider which comparables are the most appropriate for CaiNiao
  • We then discuss which valuation multiples make sense, plus some potential pitfalls 
  • We believe CaiNiao and their bankers could justify a valuation up to 310 bn CNY

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Oct 23
0

Daily Brief South Korea: Korea Stock Exchange KOSPI 200 and more

By | Daily Briefs, South Korea

In today’s briefing:

  • EQD | KOSPI 200 Falling, LONG Support

EQD | KOSPI 200 Falling, LONG Support

By Nico Rosti

  • The KOSPI 200 INDEX closed down last week (CC=-1) and is going towards the Q2/median support at 314. The index is also OVERSOLD MONTHLY (CC=-3)
  • One possible scenario is to see the index downtrending into early/mid-November, find a bottom, and then begin a counter-rally from there.
  • The index could go down more this week, but a LONG trade could begin at 314 support, and if that does not hold, the next support area is at 306.

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Oct 23
0

Daily Brief Equity Bottom-Up: TSMC. Robust Defence Of Process Technology Leadership and more

By | Daily Briefs, Equity Bottom-Up

In today’s briefing:

  • TSMC. Robust Defence Of Process Technology Leadership
  • Taiwan Dual Listings Monitor: Sharp Premium Drops Most Recently; Key Levels to Long or Short
  • Topsports (6110 HK):  High Dividend Yield Supported By Strong Free Cash Flow
  • Shortlist Of High Conviction Ideas: Income, Value, and Margin of Safety – October 2023
  • Taiwan Tech Weekly: Watch for Intel, Microsoft, Mediatek, ASE, UMC Results; AI Names Top Losers
  • Delta Taiwan Vs. Thailand Monitor: Market Cap Metric Breaches Key Level For 1st Time Since Dec 2022
  • Gushengtang (2273.HK) – 2023 Full-Year Performance Would Exceed Expectations
  • Thai Banks 3Q23 Screener; Stick with Krung Thai and Ayudhya
  • Monthly Chinese Express Tracker | A New Price War Among China’s ‘Sort & Transport’ Express Names

TSMC. Robust Defence Of Process Technology Leadership

By William Keating

  • Q323 revenues of $17.28 billion. In US$ terms, this represented a 10.2% increase QoQ, but still down 14.6% YoY.
  • TSMC’s forecasted Q423 revenues of $19.2 billion at the midpoint, representing a 10% QoQ increase
  • CEO C.C Wei robustly rebuffed Intel’s popular claim to be on track for process technology leadership by 2025

Taiwan Dual Listings Monitor: Sharp Premium Drops Most Recently; Key Levels to Long or Short

By Vincent Fernando, CFA

  • Premiums have generally fallen sharply most recently, likely driven by weaker global markets.
  • Key earnings: TSMC reported last week; UMC and ASE to report this week.
  • We describe our latest recommended premium/discount levels to Long or Short the spreads.

Topsports (6110 HK):  High Dividend Yield Supported By Strong Free Cash Flow

By Steve Zhou, CFA

  • Topsports International Holdings (6110 HK) announced first half FY24 (fiscal year ending February) results last week, with net profit up 17% yoy.
  • The company trades at a 7% dividend yield, backed by strong free cash flow.
  • The stock is not only a yield play, but also a call option on the recovery of Nike and Adidas’ retail performance in China.

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

By Sameer Taneja

Taiwan Tech Weekly: Watch for Intel, Microsoft, Mediatek, ASE, UMC Results; AI Names Top Losers

By Vincent Fernando, CFA

  • This week will see a wave of earnings releases for the industry including Intel, Microsofot, Mediatek, ASE, and UMC.
  • TSMC results last week provided positive color on the 2024E onwards outlook for the company as well as comments regarding a turn around for PC and mobile.
  • Taiwan AI names were some of the top losers across our Taiwan Tech universe last week.

Delta Taiwan Vs. Thailand Monitor: Market Cap Metric Breaches Key Level For 1st Time Since Dec 2022

By Vincent Fernando, CFA

  • Delta Thailand shares haven’t recovered from their sharp drop at the end of September, which happened after the parent Delta Taiwan sold a stake in the Thai subsidiary.
  • Delta Thailand shares fell to the point that its market cap finally became smaller than Delta Taiwan, for the first time since December 2022.
  • Delta Thailand’s market cap should be substantially smaller than its parent Delta Taiwan. We analyze what history tells us the further relative downside for Delta Thailand could be.

Gushengtang (2273.HK) – 2023 Full-Year Performance Would Exceed Expectations

By Xinyao (Criss) Wang

  • 3Q23 is expected to achieve over 40% YoY growth. 2023 overall performance would be better than previous guidance- Revenue up 40+% YoY and adjusted net profit up about 45% YoY.
  • With abundant cash flow, Gushengtang has increased dividend payouts and share buyback, indicating that the current stock price is undervalued and has not yet reflected its high growth expectations/healthy fundamentals.
  • Gushengtang has cross-regional expansion capability. The “sustainability” + “high growth” of performance are worth noting. Depressed sentiment/complex external environment provide a good buying opportunity. Rebound in stock price is expected.

Thai Banks 3Q23 Screener; Stick with Krung Thai and Ayudhya

By Victor Galliano

  • Krung Thai ranks second from top in terms of post-provision profitability and it has double digit ROE with a healthy balance sheet, along with attractive PBV and PE ratios
  • We also like Ayudhya, with its sound pre and post-provision profitability metrics with healthy ROE and ROA, its sound credit quality metrics and undemanding valuations
  • Kasikorn’s TTM cost of risk remain high versus the peers, and in 3Q23 it continued to worsen; its pre-provision profitability is healthy but there is, as yet, no CoR improvement

Monthly Chinese Express Tracker | A New Price War Among China’s ‘Sort & Transport’ Express Names

By Daniel Hellberg

  • In this month’s Tracker, we focus on a new price war among the ‘sort & transport’ names
  • Q3 ASPs at these express companies fell by -12% Y/Y, and volume growth softened
  • We believe margins are under increasing pressure in China’s mainstream express segment

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