All Posts By

Smartkarma Daily Briefs

Sep 28
0

Daily Brief Health Care: Mitra Keluarga Karyasehat Tbk, Axonics , Tokyo Stock Exchange Tokyo Price Index Topix, Cardinal Health, MedSci Healthcare Holdings, Zoetis Inc and more

By | Daily Briefs, Healthcare

In today’s briefing:

  • Mitra Keluarga Karyasehat (MIKA IJ) – Well Adjusted For a Rapid Recovery
  • Axonics (AXNX US): Large Underserved Market And Superior Portfolio Ensure Multi-Year Growth
  • At the Root of the Diversity Issue Is Traditional Familism in Society and the Workplace
  • Cardinal Health Inc.: How Their Pioneering NTrainer System 2.0 is Changing Neonatal Care Forever! – Major Drivers
  • MedSci Healthcare Holdings (2415.HK) – Lack of Control over Core Resources Is a Critical Pain Point
  • Zoetis Inc.: The Vetscan Mastigram+ Launch – A Game Changer in European Markets! – Major Drivers

Mitra Keluarga Karyasehat (MIKA IJ) – Well Adjusted For a Rapid Recovery

By Angus Mackintosh

  • Mitra Keluarga (MIKA IJ) is in the midst of a recovery not yet reflected in headline numbers as the effects of inflated COVID revenues fade and core business takes off.
  • The company is a key beneficiary of the new health bill allowing foreign doctors to practice in Indonesia given its best-in-class hospitals located in affluent catchment areas.  
  • Mitra Keluarga Karyasehat continues to expand its hospital network, increase treatment intensity, and digitalise its operations. Valuations are attractive given the highest returns amongst its peers, with recovery in motion.

Axonics (AXNX US): Large Underserved Market And Superior Portfolio Ensure Multi-Year Growth

By Tina Banerjee

  • Axonics (AXNX US) believes that the U.S. sacral neuromodulation market is now worth of ~$800M, which is poised to double over the next five years to $1.6B.
  • The company has been reporting superior revenue growth since 2020. Axonics raised 2023 revenue guidance to $358M, up 32% YoY. The company has become adjusted EBITDA positive in 2022.
  • With superior product portfolio in terms of patient satisfaction, longer product life, and smaller size, Axonics is the stronger player in the U.S. duopoly sacral neuromodulation market.

At the Root of the Diversity Issue Is Traditional Familism in Society and the Workplace

By Aki Matsumoto

  • Increase in the number of non-regular workers is a factor in gender wage disparity and has also put pressure on profit margin since labor was invested in low value-added jobs.
  • In Japan, childcare is assumed to be dependent on the efforts of the family, and there is little thought of society solving childcare issues, and government policies reflect this idea.
  • Problems also exist on the part of employers, with low rates of men taking childcare leave, and the top reason being an atmosphere that makes it difficult take childcare leave.

Cardinal Health Inc.: How Their Pioneering NTrainer System 2.0 is Changing Neonatal Care Forever! – Major Drivers

By Baptista Research

  • Cardinal Health Inc. delivered a positive result and managed an all-around beat last quarter.
  • The Pharma segment demonstrated remarkable profit growth of 13%, and the company generated significant adjusted free cash flow amounting to $2.8 billion.
  • Cardinal Health pursued determined actions to advance its strategic imperatives, streamlining its operations, optimizing its organizational structure, and instituting fundamental leadership changes.

MedSci Healthcare Holdings (2415.HK) – Lack of Control over Core Resources Is a Critical Pain Point

By Xinyao (Criss) Wang

  • MedSci’s all three businesses are targeting B-end customers (pharmaceutical and medical device companies) to generate revenue. In the context of VBP and anti-corruption campaign, B-end customers do have relevant needs.
  • However, the binding between MedSci and hospitals isn’t deep, which would lead to MedSci being unable to grasp core medical resources, with weak bargaining power in front of B-end customers.
  • Since the initiative is in the hands of the other parties not in MedSci, MedSci’s revenue growth/scale could be much lower-than-expected. This would suppress valuation and stock price performance.

Zoetis Inc.: The Vetscan Mastigram+ Launch – A Game Changer in European Markets! – Major Drivers

By Baptista Research

  • Zoetis Inc. managed to surpass the revenue and earnings expectations of Wall Street.
  • Based on the wide portfolio across markets and species, Zoetis delivered solid second-quarter results of 9% operational growth in revenue and 12% in adjusted net income.
  • The company reverted to more balanced sector growth this quarter, with 11% operational growth worldwide and 7% in the United States.

💡 Before it’s here, it’s on Smartkarma

Sign Up for Free

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

  • ✓ Unlimited Research Summaries
  • ✓ Personalised Alerts
  • ✓ Custom Watchlists
  • ✓ Company Data and News
  • ✓ Events & Webinars
Sign Up for Free


Sep 28
0

Daily Brief Consumer: Ottogi Corporation, Li Ning, Mitsubishi Motors, MercadoLibre , Metalsa, S.A. De C.V and more

By | Consumer, Daily Briefs

In today’s briefing:

  • Details About KOSPI & KOSDAQ Lock-Up Release Stocks for October
  • End of Mandatory Lock-Up Periods for 45 Companies in Korea in October 2023
  • Li Ning (2331 HK):  No Positive Catalysts In Sight
  • Quiddity JPX-Nikkei 400 Rebal 2024: End-Sep 2023
  • MercadoLibre’s Bullish Run Continues
  • Metalsa – ESG Report – Lucror Analytics

Details About KOSPI & KOSDAQ Lock-Up Release Stocks for October

By Sanghyun Park

  • In KOSPI, all eyes are on Ottogi Corporation, a constituent of the KOSPI 200 index. 8.38% of SO’s shares are about to be unleashed.
  • In KOSDAQ, the focus is on CanariaBio and Coocon Corp, both of which are constituents of the KOSDAQ 150. They are set to release shares on October 28th.
  • For Fadu, a two-month IPO lock-up is being released, accounting for 2.5% of SO.

End of Mandatory Lock-Up Periods for 45 Companies in Korea in October 2023

By Douglas Kim

  • We discuss the end of the mandatory lock-up periods for 45 stocks in Korea in October 2023, among which 2 are in KOSPI and 43 are in KOSDAQ.
  • These 45 stocks on average could be subject to further selling pressures in October and could underperform relative to the market.
  • Among these 45 stocks, top five market cap stocks include Fadu, Ottogi Corporation, CanariaBio,  Top Material, and PhilEnergy.  

Li Ning (2331 HK):  No Positive Catalysts In Sight

By Steve Zhou, CFA

Quiddity JPX-Nikkei 400 Rebal 2024: End-Sep 2023

By Janaghan Jeyakumar, CFA

  • JPX-Nikkei 400 is composed of common stocks listed on the Tokyo Stock Exchange. It is a free-float-adjusted market-value-weighted (capped) index composed of 400 constituents.
  • A periodic review is conducted by the Index providers, the JPX Group and Nikkei Inc, in August every year. We look at the potential forward inclusions and removals every month.
  • Below is a look at potential Inclusions and Removals for the JPX-Nikkei 400 Rebalance to come in August 2024 based on trading data as of end-September 2023.

MercadoLibre’s Bullish Run Continues

By Steven Holden

  • Despite MercadoLibre’s non-benchmark status, ownership among active EM managers has reached new highs.
  • MercadoLibre has been the beneficiary of significant manager rotation over the last year, with 131 funds increasing weights and 29 opening new positions.
  • MercadoLibre is now the 8th largest holding on an average weight basis and has recently overtaken AIA Group as the largest overweight stock position across all regions.

Metalsa – 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 Metalsa’s ESG as “Adequate”, in line with its “Adequate” scores for the Environmental, Social and Governance pillars. Controversies are “Immaterial” and Disclosure is “Strong”.
  • Metalsa is a Tier 1 automotive parts supplier of structural components for light and commercial vehicles, headquartered in Monterrey (Mexico).

💡 Before it’s here, it’s on Smartkarma

Sign Up for Free

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

  • ✓ Unlimited Research Summaries
  • ✓ Personalised Alerts
  • ✓ Custom Watchlists
  • ✓ Company Data and News
  • ✓ Events & Webinars
Sign Up for Free


Sep 28
0

Daily Brief South Korea: Korea Stock Exchange KOSPI 200, SK Square , Doosan Robotics, Ottogi Corporation and more

By | Daily Briefs, South Korea

In today’s briefing:

  • Information Received Through KRX Officials Regarding Changes in the KOSPI 200 Methodology
  • SK Square: M&A of 11st – Alibaba Out and Qoo10 In?
  • Doosan Robotics (454910 KS): Listing & Index Inclusion Timeline
  • Details About KOSPI & KOSDAQ Lock-Up Release Stocks for October
  • End of Mandatory Lock-Up Periods for 45 Companies in Korea in October 2023

Information Received Through KRX Officials Regarding Changes in the KOSPI 200 Methodology

By Sanghyun Park

  • The official announcement from KRX regarding the KOSPI 200 rebalancing rule change is expected to be released shortly after the end of October.
  • The rule change will take effect beginning with this year’s December rebalancing. An official from KRX has communicated that we can confidently regard this as confirmed.
  • It is essential to be aware that during this December review, there exists a significant potential for generating substantial price fluctuations within a narrow timeframe.

SK Square: M&A of 11st – Alibaba Out and Qoo10 In?

By Douglas Kim

  • On 27 September, Maeil Business Daily reported that SK Square signed an MOU with Qoo10 to pursue a joint management of 11st. 
  • It appears that Alibaba may have been reviewing this deal but it is no longer interested in pursuing 11st.
  • A deal between Qoo10 and 11st could occur, but this is not certain, which means some of the cash proceeds to FI would need to be burdened by SK Square.

Doosan Robotics (454910 KS): Listing & Index Inclusion Timeline

By Brian Freitas

Details About KOSPI & KOSDAQ Lock-Up Release Stocks for October

By Sanghyun Park

  • In KOSPI, all eyes are on Ottogi Corporation, a constituent of the KOSPI 200 index. 8.38% of SO’s shares are about to be unleashed.
  • In KOSDAQ, the focus is on CanariaBio and Coocon Corp, both of which are constituents of the KOSDAQ 150. They are set to release shares on October 28th.
  • For Fadu, a two-month IPO lock-up is being released, accounting for 2.5% of SO.

End of Mandatory Lock-Up Periods for 45 Companies in Korea in October 2023

By Douglas Kim

  • We discuss the end of the mandatory lock-up periods for 45 stocks in Korea in October 2023, among which 2 are in KOSPI and 43 are in KOSDAQ.
  • These 45 stocks on average could be subject to further selling pressures in October and could underperform relative to the market.
  • Among these 45 stocks, top five market cap stocks include Fadu, Ottogi Corporation, CanariaBio,  Top Material, and PhilEnergy.  

💡 Before it’s here, it’s on Smartkarma

Sign Up for Free

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

  • ✓ Unlimited Research Summaries
  • ✓ Personalised Alerts
  • ✓ Custom Watchlists
  • ✓ Company Data and News
  • ✓ Events & Webinars
Sign Up for Free


Sep 28
0

Daily Brief United States: ACM Research, Axonics , Fortinet Inc, Skyworks Solutions, Netgear Inc, Jacobs Solutions , Cardinal Health, NOW Inc, MillerKnoll, Conocophillips and more

By | Daily Briefs, United States

In today’s briefing:

  • Chinese Semiconductor Beneficiary
  • Axonics (AXNX US): Large Underserved Market And Superior Portfolio Ensure Multi-Year Growth
  • Fortinet Inc.: Launch Of Data Center Firewalls With AI Support & Other Major Developments
  • Skyworks Solutions Inc.: Embracing AI & Data – The Master Plan for Future Expansion! – Major Drivers
  • NTGR: Undervalue of Seasonality
  • Jacobs Solutions Inc.: What the Healthy Pipeline Means for Future Growth! – Major Drivers
  • Cardinal Health Inc.: How Their Pioneering NTrainer System 2.0 is Changing Neonatal Care Forever! – Major Drivers
  • NOW, Inc. – Leveraging Existing Model to Supply Energy Evolution
  • MillerKnoll, Inc. – 1QFY24 Beats Estimates on Gross Margin; Hikes Guidance
  • ConocoPhillips: Resilience Amidst Volatility – The Road to Value Creation! – Major Drivers

Chinese Semiconductor Beneficiary

By Douglas O’Laughlin

  • ACM Research is a bit of an oddball stock. It’s a US listing of a Chinese company, with 82% ownership of the Chinese subsidiary.
  • The US listing is the parent company and has been in the crossfire of US-China trade tensions for years.
  • It is probably the best Chinese Semicap company and has real orders with multinational companies, notably SK Hynix.

Axonics (AXNX US): Large Underserved Market And Superior Portfolio Ensure Multi-Year Growth

By Tina Banerjee

  • Axonics (AXNX US) believes that the U.S. sacral neuromodulation market is now worth of ~$800M, which is poised to double over the next five years to $1.6B.
  • The company has been reporting superior revenue growth since 2020. Axonics raised 2023 revenue guidance to $358M, up 32% YoY. The company has become adjusted EBITDA positive in 2022.
  • With superior product portfolio in terms of patient satisfaction, longer product life, and smaller size, Axonics is the stronger player in the U.S. duopoly sacral neuromodulation market.

Fortinet Inc.: Launch Of Data Center Firewalls With AI Support & Other Major Developments

By Baptista Research

  • Fortinet Inc. delivered a mixed set of results in its most recent result, with revenues falling short of Wall Street expectations but above-par earnings.
  • Their quarter was marked by impressive total revenue growth of 26%, driven primarily by solid service revenue expansion exceeding 30% for the second consecutive quarter.
  • In this report, we have carried out a fundamental analysis of the historical financial statements of the company.

Skyworks Solutions Inc.: Embracing AI & Data – The Master Plan for Future Expansion! – Major Drivers

By Baptista Research

  • Skyworks Solutions Inc. delivered a revenue beat in the most recent quarterly result with earnings on par with Wall Street expectations.
  • The company reported $1.071 billion in revenue and earnings per share of $1.73.
  • The company also made strides in diversifying its portfolio, particularly in automotive and infrastructure markets, resulting in double-digit year-over-year revenue growth.

NTGR: Undervalue of Seasonality

By Hamed Khorsand

  • The third quarter could become a defining moment for NETGEAR (NTGR) and its stock price.
  • With less than a week left in the third quarter, we have observed how the return of seasonality has reduced the frequency and depth of discounts
  • Seasonality has not been present in NTGR’s business since 2019. As a result, investors might be neglecting the lift in demand NTGR could experience

Jacobs Solutions Inc.: What the Healthy Pipeline Means for Future Growth! – Major Drivers

By Baptista Research

  • Jacobs Solutions delivered a decent set of quarterly results, marked by substantial gross and adjusted net revenue growth, well above Wall Street expectations.
  • Gross income increased, with adjusted net income growing year-over-year.
  • Notably, the company’s gross margin slightly decreased, primarily due to factors related to PA Consulting.

Cardinal Health Inc.: How Their Pioneering NTrainer System 2.0 is Changing Neonatal Care Forever! – Major Drivers

By Baptista Research

  • Cardinal Health Inc. delivered a positive result and managed an all-around beat last quarter.
  • The Pharma segment demonstrated remarkable profit growth of 13%, and the company generated significant adjusted free cash flow amounting to $2.8 billion.
  • Cardinal Health pursued determined actions to advance its strategic imperatives, streamlining its operations, optimizing its organizational structure, and instituting fundamental leadership changes.

NOW, Inc. – Leveraging Existing Model to Supply Energy Evolution

By Water Tower Research

  • We hosted a fireside chat with DNOW on September 12, 2023.

  • We were joined by President and Chief Executive Officer David Cherechinsky and Vice President Digital Strategy and Investor Relations Brad Wise. 

  • DNOW’s transformed fulfillment model is driving sustainable earnings traction as the company increases its market share.

MillerKnoll, Inc. – 1QFY24 Beats Estimates on Gross Margin; Hikes Guidance

By Water Tower Research

  • After market close on September 26, MillerKnoll reported 1QFY24, beating estimates on significantly above-forecasted gross margin and modestly better-than-estimated sales.

  • Our tabular analysis compares its 1QFY24 results with 1QFY23 and our 1QFY24 estimates.

  • The beat notwithstanding, MillerKnoll’s results were below 1QFY23, which benefited from ~$77 million in sales due to a 14th week.

ConocoPhillips: Resilience Amidst Volatility – The Road to Value Creation! – Major Drivers

By Baptista Research

  • ConocoPhillips delivered a disappointing set of results as the company was unable to meet the revenue and earnings expectations of Wall Street.
  • The company executed several significant agreements and acquisitions, including purchasing the remaining 50% of Surmont, a valuable asset expected to contribute substantial free cash flow.
  • Despite commodity price volatility, the company delivered an underlying solid performance, achieving significant global and Lower 48 production and raising yearly production guidance.

💡 Before it’s here, it’s on Smartkarma

Sign Up for Free

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

  • ✓ Unlimited Research Summaries
  • ✓ Personalised Alerts
  • ✓ Custom Watchlists
  • ✓ Company Data and News
  • ✓ Events & Webinars
Sign Up for Free


Sep 28
0

Daily Brief Australia: WRKR and more

By | Australia, Daily Briefs

In today’s briefing:

  • Wrkr Limited – Linked Up

Wrkr Limited – Linked Up

By Research as a Service (RaaS)

  • Wrkr Ltd (ASX:WRK) has announced a commercial contract with Link Group, following on from an MSA signed in November 2022 to provide employer solutions including clearing house and SuperStream Gateway infrastructure.
  • The contract has a three-year term with a one-year-plus-one-year extension with the initial contract value estimated at A$3m.
  • Importantly, this contract value does not include transaction fees which are estimated at $2.00/user/year and could amount to as much as ~$6m in recurring revenue per annum depending on the number of users uplifted to the platform. 

💡 Before it’s here, it’s on Smartkarma

Sign Up for Free

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

  • ✓ Unlimited Research Summaries
  • ✓ Personalised Alerts
  • ✓ Custom Watchlists
  • ✓ Company Data and News
  • ✓ Events & Webinars
Sign Up for Free


Sep 28
0

Daily Brief Indonesia: Mitra Keluarga Karyasehat Tbk, Agung Podomoro Land and more

By | Daily Briefs, Indonesia

In today’s briefing:

  • Mitra Keluarga Karyasehat (MIKA IJ) – Well Adjusted For a Rapid Recovery
  • Morning Views Asia: Agung Podomoro Land

Mitra Keluarga Karyasehat (MIKA IJ) – Well Adjusted For a Rapid Recovery

By Angus Mackintosh

  • Mitra Keluarga (MIKA IJ) is in the midst of a recovery not yet reflected in headline numbers as the effects of inflated COVID revenues fade and core business takes off.
  • The company is a key beneficiary of the new health bill allowing foreign doctors to practice in Indonesia given its best-in-class hospitals located in affluent catchment areas.  
  • Mitra Keluarga Karyasehat continues to expand its hospital network, increase treatment intensity, and digitalise its operations. Valuations are attractive given the highest returns amongst its peers, with recovery in motion.

Morning Views Asia: Agung Podomoro Land

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.

💡 Before it’s here, it’s on Smartkarma

Sign Up for Free

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

  • ✓ Unlimited Research Summaries
  • ✓ Personalised Alerts
  • ✓ Custom Watchlists
  • ✓ Company Data and News
  • ✓ Events & Webinars
Sign Up for Free


Sep 28
0

Daily Brief India: Edelweiss Financial Services, Power Grid Corporation Of India, Nesco Ltd and more

By | Daily Briefs, India

In today’s briefing:

  • Edelweiss: Ripe for Re-Rating
  • NIFTY Family Index Rebalance: Flows at the Close Today + F&O Expiry
  • Nesco: FY24 Earnings on Track to Be Strong

Edelweiss: Ripe for Re-Rating

By Ankit Agrawal, CFA

  • Edelweiss reported a strong Q1FY24 earnings led by its asset management and ARC businesses. In particular, the asset management business is scaling up well for Edelweiss.
  • In the ARC business, Edelweiss saw strong recoveries during Q1FY24. Also, gradually, Edelweiss is scaling up the retail ARC business.
  • The credit business continues to see reduction in the wholesale loan book AUM. Asset quality remains stabilized and the co-lending model is helping Edelweiss to grow well.

NIFTY Family Index Rebalance: Flows at the Close Today + F&O Expiry

By Brian Freitas

  • The rebalance of the NIFTY, Nifty Next 50, NSE Nifty Bank, CPSE ETF (CPSEBE IN) and a bunch of other indices will be implemented at the close of trading today.
  • Depending on the index, there are constituent changes, changes to the number of shares and free float, plus capping changes. Put together, there is a lot of flow and impact.
  • The round-trip trade will be in excess of US$1bn. Add in the futures & options expiry and volumes will be extremely high in the last 30 minutes of trading.

Nesco: FY24 Earnings on Track to Be Strong

By Ankit Agrawal, CFA

  • Q1 tends to be a seasonally weak quarter for the exhibition business (BEC) and as a result, the revenues declined on a QoQ basis.
  • However, in YoY terms, BEC revenues grew 75%+ and exceeded pre-COVID levels, i.e. the revenues are up 7% vs that in Q1FY20.
  • The IT Parks business saw marginal improvement of 1% QoQ growth suggesting that the occupancy level is steady. Occupancy is 97% in Tower 4 and 82% in Tower 3.

💡 Before it’s here, it’s on Smartkarma

Sign Up for Free

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

  • ✓ Unlimited Research Summaries
  • ✓ Personalised Alerts
  • ✓ Custom Watchlists
  • ✓ Company Data and News
  • ✓ Events & Webinars
Sign Up for Free


Sep 28
0

Daily Brief China: Haitong International Securities Group, Cainiao Smart Logistics, Li Ning, 4Paradigm, HKEX, MedSci Healthcare Holdings and more

By | China, Daily Briefs

In today’s briefing:

  • Haitong Int’l Securities (665 HK): Possible Offer From Parent
  • Cainiao Pre-IPO – The Postivies – Evolving into a Global Player, Decent Revenue Growth
  • Cainiao Smart Logistics IPO: Lacks Viability as a Standalone Business
  • Li Ning (2331 HK):  No Positive Catalysts In Sight
  • 4Paradigm IPO: Thoughts on First Day Trading
  • HKEX (388 HK) – Exceptional Cost Controls, New Revenue Streams, Quarterly Profit Momentum
  • 4Paradigm IPO Trading – Low Insti Subscription and Small Float
  • MedSci Healthcare Holdings (2415.HK) – Lack of Control over Core Resources Is a Critical Pain Point

Haitong Int’l Securities (665 HK): Possible Offer From Parent

By David Blennerhassett

  • Haitong International Securities Group (665 HK) (HITSEC) is suspended pursuant to Hong Kong’s Code on Takeovers and Mergers.
  • The rumour doing the rounds is that Haitong Securities Co Ltd (A) (600837 CH) (HSC) may take private its 73.4%-held Hong Kong-listed investment banking unit.
  • HITSEC’s share performance since 1Q18 has been tragic. Financials have been dire since 2H20.  But expect a punchy premium if HTS does seek to take HITSEC private. 

Cainiao Pre-IPO – The Postivies – Evolving into a Global Player, Decent Revenue Growth

By Sumeet Singh

  • Cainiao Smart Logistics ,  Alibaba Group Holding (9988 HK)’s logistics linked arm, is planning to raise at least US$1bn in its Hong Kong IPO.
  • Cainiao is the largest provider of cross-border e-commerce logistics services globally and a leader in China logistics services, according to CIC.
  • In this note, we talk about the positive aspects of the deal.

Cainiao Smart Logistics IPO: Lacks Viability as a Standalone Business

By Oshadhi Kumarasiri

  • Alibaba (ADR) (BABA US)‘s logistics arm, Cainiao Smart Logistics (1437124D HK), filed for an IPO with HKEX yesterday, aiming to raise $1bn to $2bn.
  • Although efficient, Cainiao may face business challenges, as the majority of logistics costs and revenues stem from services outsourced to logistics partners.
  • Despite the proposed IPO, we believe that Cainiao will always operate in the shadow of Alibaba’s primary e-commerce business.

Li Ning (2331 HK):  No Positive Catalysts In Sight

By Steve Zhou, CFA

4Paradigm IPO: Thoughts on First Day Trading

By Shifara Samsudeen, ACMA, CGMA

  • 4Paradigm has priced its IPO at HK$55.60 per share, at the bottom end of the indicative IPO price range of HK$55.6-61.16 per share and raised net proceeds of HK$835.5m.
  • The HK offering and the international offering of the company were oversubscribed by 11.4x and 1.57x respectively implying very moderate demand for the company’s shares.
  • Though priced at the bottom of the indicative IPO price range, our analysis suggests that 4Paradigm’s IPO is still expensive.

HKEX (388 HK) – Exceptional Cost Controls, New Revenue Streams, Quarterly Profit Momentum

By Daniel Tabbush

  • HKEX (388 HK) announced strong results, defying some worsening trends in volume, new listings, with quarterly profit growth rising from 11% to 28% to 34% YoY from 4Q22 to 2Q23
  • Cost controls have been key to 31% 1H23 profit growth, with 0% growth depreciation, amortization, financing costs, and taxation, which can continue to support profit delta
  • Revenue growth of 18-19% YoY in each of the past 2 quarters is partly driven by new revenue streams, which can offset some weaknesses in traditional metrics

4Paradigm IPO Trading – Low Insti Subscription and Small Float

By Ethan Aw

  • 4Paradigm (6682 HK) raised around US$131m in its Hong Kong IPO. 
  • 4P is a platform-centric AI enterprise solutions provider. It was the largest player by revenue in the platform-centric decision-making AI market in China in 2022, as per CIC. 
  • We have covered various aspects of the deal in our previous notes. In this note, we will talk about the demand and trading dynamics.

MedSci Healthcare Holdings (2415.HK) – Lack of Control over Core Resources Is a Critical Pain Point

By Xinyao (Criss) Wang

  • MedSci’s all three businesses are targeting B-end customers (pharmaceutical and medical device companies) to generate revenue. In the context of VBP and anti-corruption campaign, B-end customers do have relevant needs.
  • However, the binding between MedSci and hospitals isn’t deep, which would lead to MedSci being unable to grasp core medical resources, with weak bargaining power in front of B-end customers.
  • Since the initiative is in the hands of the other parties not in MedSci, MedSci’s revenue growth/scale could be much lower-than-expected. This would suppress valuation and stock price performance.

💡 Before it’s here, it’s on Smartkarma

Sign Up for Free

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

  • ✓ Unlimited Research Summaries
  • ✓ Personalised Alerts
  • ✓ Custom Watchlists
  • ✓ Company Data and News
  • ✓ Events & Webinars
Sign Up for Free


Sep 28
0

Daily Brief Japan: System Information, Kokusai Electric , Toshiba Corp, Mitsubishi Motors, Nihon M&A Center, Tokyo Stock Exchange Tokyo Price Index Topix and more

By | Daily Briefs, Japan

In today’s briefing:

  • System Information Co (3677 JP) “MBO” By Bain an Exit Trade for Founder+CEO+Employees
  • Kokusai Electric IPO – Don’t Worry, This’ll Be Fine Too
  • Updated TOPIX Selldown and Index Flows This Week – Initial TOPIX Selldown of Toshiba NEXT Month
  • Quiddity JPX-Nikkei 400 Rebal 2024: End-Sep 2023
  • System Information (3677 JP): Bain Backed MBO’s JPY930 Tender Offer
  • Nihon M&A: Not Many Catalysts to Move the Stock Price Up
  • At the Root of the Diversity Issue Is Traditional Familism in Society and the Workplace

System Information Co (3677 JP) “MBO” By Bain an Exit Trade for Founder+CEO+Employees

By Travis Lundy

  • The stock is down more than 50% from its high 3yrs ago. The founder is 79. The CEO is 75. Employees and former directors own another 10%.
  • This is an exit vs an MBO. And the Target Side negotiating the exit were rolled by Bain. This is NOT an expensive purchase. Bain’s equity check is 2.3x EBIT.
  • But it probably gets done anyway unless someone gets noisy. For that, they’d have to buy a 10-15% stake I expect. 

Kokusai Electric IPO – Don’t Worry, This’ll Be Fine Too

By Mio Kato

  • Early last year there were articles suggesting that KKR would IPO Kokusai Electric at a valuation of about ¥700bn. 
  • A year plus later the company is now set to IPO for something on the order of ¥436bn. 
  • We are sure KKR is breathing a sigh of relief that they didn’t unload shares 60% higher and can now offer other investors some “value”.

Updated TOPIX Selldown and Index Flows This Week – Initial TOPIX Selldown of Toshiba NEXT Month

By Travis Lundy

Quiddity JPX-Nikkei 400 Rebal 2024: End-Sep 2023

By Janaghan Jeyakumar, CFA

  • JPX-Nikkei 400 is composed of common stocks listed on the Tokyo Stock Exchange. It is a free-float-adjusted market-value-weighted (capped) index composed of 400 constituents.
  • A periodic review is conducted by the Index providers, the JPX Group and Nikkei Inc, in August every year. We look at the potential forward inclusions and removals every month.
  • Below is a look at potential Inclusions and Removals for the JPX-Nikkei 400 Rebalance to come in August 2024 based on trading data as of end-September 2023.

System Information (3677 JP): Bain Backed MBO’s JPY930 Tender Offer

By Arun George

  • System Information (3677 JP) has recommended Bain’s tender offer of JPY930 per share, a 21.9% premium to the undisturbed price (27 September).
  • 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 50.69% ownership ratio.
  • Irrevocables to accept the offer represent a 19.69% ownership ratio. The minimum acceptance condition (lower limit) requires a 37.0% minority acceptance rate. The tender offer is reasonable.

Nihon M&A: Not Many Catalysts to Move the Stock Price Up

By Shifara Samsudeen, ACMA, CGMA

  • Nihon M&A Center’s share price has dropped more than 50% YTD despite several news media outlets reporting that there has been a surge in M&A activity among Japanese companies.
  • At the same time, the Japanese government also issued new guidelines to promote more M&A activities in the nation to boost competitiveness.
  • The no. of M&A transactions for the company has continued to grow however, value per transaction has been on a declining trend suggesting these deals are smaller in size.

At the Root of the Diversity Issue Is Traditional Familism in Society and the Workplace

By Aki Matsumoto

  • Increase in the number of non-regular workers is a factor in gender wage disparity and has also put pressure on profit margin since labor was invested in low value-added jobs.
  • In Japan, childcare is assumed to be dependent on the efforts of the family, and there is little thought of society solving childcare issues, and government policies reflect this idea.
  • Problems also exist on the part of employers, with low rates of men taking childcare leave, and the top reason being an atmosphere that makes it difficult take childcare leave.

💡 Before it’s here, it’s on Smartkarma

Sign Up for Free

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

  • ✓ Unlimited Research Summaries
  • ✓ Personalised Alerts
  • ✓ Custom Watchlists
  • ✓ Company Data and News
  • ✓ Events & Webinars
Sign Up for Free


Sep 28
0

Most Read: EcoPro Materials, Korea Stock Exchange KOSPI 200, Haitong International Securities Group, System Information, SK Square , Kokusai Electric , HMM Co., Ltd., Doosan Robotics, Cainiao Smart Logistics and more

By | Daily Briefs, Most Read

In today’s briefing:

  • EcoPro Materials: IPO & Index Inclusion
  • Information Received Through KRX Officials Regarding Changes in the KOSPI 200 Methodology
  • Haitong Int’l Securities (665 HK): Possible Offer From Parent
  • System Information Co (3677 JP) “MBO” By Bain an Exit Trade for Founder+CEO+Employees
  • SK Square: M&A of 11st – Alibaba Out and Qoo10 In?
  • Kokusai Electric IPO – Don’t Worry, This’ll Be Fine Too
  • Seizing a Trading Opportunity Aimed at HMM’s New Stock Listing Date
  • Doosan Robotics (454910 KS): Listing & Index Inclusion Timeline
  • Cainiao Pre-IPO – The Postivies – Evolving into a Global Player, Decent Revenue Growth
  • Cainiao Smart Logistics IPO: Lacks Viability as a Standalone Business

EcoPro Materials: IPO & Index Inclusion

By Brian Freitas

  • EcoPro Materials (ECO123 KS) was founded in 2017 and specializes in manufacturing cathode material precursors, a core material for lithium secondary cells.
  • EcoPro Materials (ECO123 KS) could raise between US$387m-US$492m, valuing the company between US$1.9bn-US$2.42bn. Float will depend on voluntary lock-ups and allocation to strategic investors.
  • Inclusion in global indices is likely to take place between February to June, while the highest probability of Korea Stock Exchange KOSPI 200 (KOSPI2 INDEX) inclusion is in December 2024.

Information Received Through KRX Officials Regarding Changes in the KOSPI 200 Methodology

By Sanghyun Park

  • The official announcement from KRX regarding the KOSPI 200 rebalancing rule change is expected to be released shortly after the end of October.
  • The rule change will take effect beginning with this year’s December rebalancing. An official from KRX has communicated that we can confidently regard this as confirmed.
  • It is essential to be aware that during this December review, there exists a significant potential for generating substantial price fluctuations within a narrow timeframe.

Haitong Int’l Securities (665 HK): Possible Offer From Parent

By David Blennerhassett

  • Haitong International Securities Group (665 HK) (HITSEC) is suspended pursuant to Hong Kong’s Code on Takeovers and Mergers.
  • The rumour doing the rounds is that Haitong Securities Co Ltd (A) (600837 CH) (HSC) may take private its 73.4%-held Hong Kong-listed investment banking unit.
  • HITSEC’s share performance since 1Q18 has been tragic. Financials have been dire since 2H20.  But expect a punchy premium if HTS does seek to take HITSEC private. 

System Information Co (3677 JP) “MBO” By Bain an Exit Trade for Founder+CEO+Employees

By Travis Lundy

  • The stock is down more than 50% from its high 3yrs ago. The founder is 79. The CEO is 75. Employees and former directors own another 10%.
  • This is an exit vs an MBO. And the Target Side negotiating the exit were rolled by Bain. This is NOT an expensive purchase. Bain’s equity check is 2.3x EBIT.
  • But it probably gets done anyway unless someone gets noisy. For that, they’d have to buy a 10-15% stake I expect. 

SK Square: M&A of 11st – Alibaba Out and Qoo10 In?

By Douglas Kim

  • On 27 September, Maeil Business Daily reported that SK Square signed an MOU with Qoo10 to pursue a joint management of 11st. 
  • It appears that Alibaba may have been reviewing this deal but it is no longer interested in pursuing 11st.
  • A deal between Qoo10 and 11st could occur, but this is not certain, which means some of the cash proceeds to FI would need to be burdened by SK Square.

Kokusai Electric IPO – Don’t Worry, This’ll Be Fine Too

By Mio Kato

  • Early last year there were articles suggesting that KKR would IPO Kokusai Electric at a valuation of about ¥700bn. 
  • A year plus later the company is now set to IPO for something on the order of ¥436bn. 
  • We are sure KKR is breathing a sigh of relief that they didn’t unload shares 60% higher and can now offer other investors some “value”.

Seizing a Trading Opportunity Aimed at HMM’s New Stock Listing Date

By Sanghyun Park

  • Should the stock conversion decision be reached this week, the new shares will be listed on the 15th of the upcoming month. So, they will officially debut on October 16th.
  • On the day of the new share listing during the immediate previous case, the price dropped by 2.36%, and on the very next trading day, it declined by 3.72%.
  • Given the present dilution rate of 30%, there is a higher probability of even more pronounced price movements in the same direction.

Doosan Robotics (454910 KS): Listing & Index Inclusion Timeline

By Brian Freitas

Cainiao Pre-IPO – The Postivies – Evolving into a Global Player, Decent Revenue Growth

By Sumeet Singh

  • Cainiao Smart Logistics ,  Alibaba Group Holding (9988 HK)’s logistics linked arm, is planning to raise at least US$1bn in its Hong Kong IPO.
  • Cainiao is the largest provider of cross-border e-commerce logistics services globally and a leader in China logistics services, according to CIC.
  • In this note, we talk about the positive aspects of the deal.

Cainiao Smart Logistics IPO: Lacks Viability as a Standalone Business

By Oshadhi Kumarasiri

  • Alibaba (ADR) (BABA US)‘s logistics arm, Cainiao Smart Logistics (1437124D HK), filed for an IPO with HKEX yesterday, aiming to raise $1bn to $2bn.
  • Although efficient, Cainiao may face business challenges, as the majority of logistics costs and revenues stem from services outsourced to logistics partners.
  • Despite the proposed IPO, we believe that Cainiao will always operate in the shadow of Alibaba’s primary e-commerce business.

💡 Before it’s here, it’s on Smartkarma

Sign Up for Free

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

  • ✓ Unlimited Research Summaries
  • ✓ Personalised Alerts
  • ✓ Custom Watchlists
  • ✓ Company Analytics and News
  • ✓ Events & Webinars
Sign Up for Free