Smartkarma Daily Briefs

I tally 49 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal.
One new deals this week: Lansen Pharmaceutical Holdings Co, Ltd. (503 HK)‘s Scheme.
Key updates took place for: Costa Group (CGC AU), Origin Energy (ORG AU), Healius (HLS AU), Symbio (SYM AU), Poly Culture (3636 HK), and Metro Pacific Investments (MPI PM).

KOSPI 200 Rebalance Candidates in December 2023 & Changes to the KOSPI 200 Rebalance Process

By Douglas Kim

Korea Exchange is planning to change the criteria for rebalancing stocks in the KOSPI 200 index.
The purpose of this change is to prevent stocks that surge ahead of the actual KOSPI 200 inclusion but fall significantly after the inclusion announcement.
We think there is a 70-80%+ probability that POSCO DX and L&F Co will be included in KOSPI 200 index in December 2023.

Last Week in Event SPACE: Newcrest/Newmont, PTT/PTTEP, Naspers/Prosus/Tencent, Itochu Techno

The Newmont (NEM US) CDI selldown on 15 December will have to be bought by active shareholders, not passive; a relatively large reverse funding trade on the ASX rebal.
Naspers (NPN SJ)/Prosus NV (PRX NA)‘s CEO steps down. However, operations/investments, and the ongoing tweaking of the organizational structure with respect to Tencent (700 HK), should continue unabated.
Activist shareholders and Toshiba Corp (6502 JP) stuck with each other for years. The takeover allows both sides to escape their mutual bearhug,

Index Rebalance & ETF Flow Recap: HSI, HSCI, ASX, SET50, Wharf, SK Tel, Tata Motors, Midea, PCOMP

The coming week has the rebalance implementation for the NIFTY family of indices on Thursday and the Nikkei 225 (NKY INDEX) on Friday.
The review period for the December rebalance of the Hang Seng Index, Hang Seng China Enterprises Index, Hang Seng TECH Index and the HSCI Index ends on Friday.
Inflows to mainland China ETFs resumed following a pause as markets continue to trade weak.

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Sep 24

Daily Brief Macro: The Weekly Market Monitor – Are Central Banks Finally Breaking Sentiment? and more

By Smartkarma Daily Briefs | Daily Briefs, Macro

In today’s briefing:

The Weekly Market Monitor – Are Central Banks Finally Breaking Sentiment?

The Weekly Market Monitor – Are Central Banks Finally Breaking Sentiment?

By Jeroen Blokland

Fed Chairman Powell delivered a very powerful statement this week on the need to retain price stability. As a result, investors are giving up their fight to think otherwise.
We focus on France’s horrible PMI data and explain how we may see a repetition of the US retail sales slump witnessed in December 2018.
With central bankers embracing the ‘higher for longer’ narrative, real yields will start to hurt.

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Sep 24

Daily Brief TMT/Internet: Mediatek Inc, Posco DX, Splunk Inc, Ipg Photonics, Trimble Navigation, ZoomInfo Technologies and more

By Smartkarma Daily Briefs | Daily Briefs, TMT/Internet

In today’s briefing:

MediaTek (2454.TT): Gaining Google TPU V7 Project Entirely Could Be a Misconception
KOSPI 200 Rebalance Candidates in December 2023 & Changes to the KOSPI 200 Rebalance Process
Splunk and $28B Mega Deal: Will Cisco Overpay For San Francisco-Based Software Company?
IPG Photonics Corporation: The E-Mobility Surge Pushing the Revenue Boundaries! – Major Drivers
Trimble Inc.: Can The New LIMS PRO Become A Major Growth Catalyst? – Major Drivers
ZoomInfo Technologies Inc.: The Brand Makeover to Establish Dominance in Go-To-Market! – Major Drivers

MediaTek (2454.TT): Gaining Google TPU V7 Project Entirely Could Be a Misconception

By Patrick Liao

There is a misconception that “MediaTek is gaining the Google TPU v7 project entirely in 2024-25F.”
Transsion Holding is placing a new order with MediaTek in 4Q23F, which is larger than ~25mn and has the lowest ASP.
Our current view remains bearish on smartphone demand for 2H23F.

KOSPI 200 Rebalance Candidates in December 2023 & Changes to the KOSPI 200 Rebalance Process

By Douglas Kim

Korea Exchange is planning to change the criteria for rebalancing stocks in the KOSPI 200 index.
The purpose of this change is to prevent stocks that surge ahead of the actual KOSPI 200 inclusion but fall significantly after the inclusion announcement.
We think there is a 70-80%+ probability that POSCO DX and L&F Co will be included in KOSPI 200 index in December 2023.

Splunk and $28B Mega Deal: Will Cisco Overpay For San Francisco-Based Software Company?

By Andrei Zakharov

Splunk shares outperformed in 2023 and rose ~69% as total ARR exceeded $4B, operating loss narrowed, and FCF margin improved. The company executed well to drive long-term durable growth.
Over the past 2 years, Splunk transformed itself into a cloud company. In 2022, WSJ reported that Cisco made a $20B+ takeover offer. However, no deal was on the table.
Following M&A rumors, the company’s cloud transition, and strong fundamentals, Cisco offered a $157 per share to acquire Splunk in a $28B mega all-cash deal on September 21, 2023.

IPG Photonics Corporation: The E-Mobility Surge Pushing the Revenue Boundaries! – Major Drivers

IPG Photonics Corporation delivered a mixed set of results for the previous quarter, with revenues below the analyst consensus.
They achieved substantial revenue growth in the welding and cleaning applications, led by robust e-mobility and handheld welding solution sales.
Additionally, 3D printing and solar cell manufacturing applications have seen increased revenue as a result of better investments in these industries.

Trimble Inc.: Can The New LIMS PRO Become A Major Growth Catalyst? – Major Drivers

Trimble delivered a strong result and managed an all-around beat in the last quarter.
Financially, Trimble demonstrated a robust performance, delivering an EBITDA margin of 25.3% and a strong gross margin of 64.2%, surpassing previous years.
In the quarter, Trimble introduced LIMS PRO, a cloud-hosted iteration of its LIMS for sawmill raw material procurement.

ZoomInfo Technologies Inc.: The Brand Makeover to Establish Dominance in Go-To-Market! – Major Drivers

ZoomInfo Technologies delivered a mixed set of results in its most recent result, with revenues falling short of Wall Street expectations but above-par earnings.
In the second quarter, ZoomInfo reported $309 million in revenue and an adjusted operating income of $126 million, boasting a margin of 41%.
While examining customer health, the company anticipates that budgetary constraints and downward renewal pressures will persist in the near future, resulting in adjusted full-year expectations of 12% revenue growth.

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Sep 24

Daily Brief Industrials: Doosan Robotics, Toshiba Corp, Steelcase Inc Cl A and more

By Smartkarma Daily Briefs | Daily Briefs, Industrials

In today’s briefing:

Doosan Robotics Institutional Lockups Breakdown Leaked Pre-Disclosure: Analyzing Flow Schedule
(Mostly) Asia-Pac Weekly Risk Arb Wrap: Costa, Origin, Healius, Symbio, Poly Culture, Lansen, MPI
Steelcase, Inc. – Early 3Q Order Flow Rebounding; Raising Estimates

Doosan Robotics Institutional Lockups Breakdown Leaked Pre-Disclosure: Analyzing Flow Schedule

By Sanghyun Park

The immediate float rate on the listing date (October 5) has reached 19.25% as the institutional lockup volume is not as high as initially expected.
Even with a low institutional lockup level, there seems to be a possibility of a certain IPO day pop.
The first exit point we can look for in the short term would be the 1-month lockup release (1.44% of SO) one month after listing.

(Mostly) Asia-Pac Weekly Risk Arb Wrap: Costa, Origin, Healius, Symbio, Poly Culture, Lansen, MPI

I tally 49 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal.
One new deals this week: Lansen Pharmaceutical Holdings Co, Ltd. (503 HK)‘s Scheme.
Key updates took place for: Costa Group (CGC AU), Origin Energy (ORG AU), Healius (HLS AU), Symbio (SYM AU), Poly Culture (3636 HK), and Metro Pacific Investments (MPI PM).

Steelcase, Inc. – Early 3Q Order Flow Rebounding; Raising Estimates

By Water Tower Research

We are raising our estimates following an upbeat conference call and follow-up with SCS management.
Our adjusted 3QFY24 estimate, now at $0.25, is up from $0.21 and at the midpoint of guidance.
Full-year FY24 guidance is now $0.80-0.90. Our new FY24 EPS estimate is $0.88, up from $0.71 pre-release and near the top end of guidance.

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Sep 24

Daily Brief Energy/Materials: Newcrest Mining and more

By Smartkarma Daily Briefs | Daily Briefs, Energy & Materials Sector

In today’s briefing:

Last Week in Event SPACE: Newcrest/Newmont, PTT/PTTEP, Naspers/Prosus/Tencent, Itochu Techno

Last Week in Event SPACE: Newcrest/Newmont, PTT/PTTEP, Naspers/Prosus/Tencent, Itochu Techno

The Newmont (NEM US) CDI selldown on 15 December will have to be bought by active shareholders, not passive; a relatively large reverse funding trade on the ASX rebal.
Naspers (NPN SJ)/Prosus NV (PRX NA)‘s CEO steps down. However, operations/investments, and the ongoing tweaking of the organizational structure with respect to Tencent (700 HK), should continue unabated.
Activist shareholders and Toshiba Corp (6502 JP) stuck with each other for years. The takeover allows both sides to escape their mutual bearhug,

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Sep 24

Daily Brief Health Care: Sichuan Biokin Pharmaceutical, D.Western Therapeutics Institute Inc., Amgen Inc, Teleflex Inc and more

By Smartkarma Daily Briefs | Daily Briefs, Healthcare

In today’s briefing:

China Healthcare Weekly (Sep.22) – Medical Device VBP, Restore Optimism on Healthcare, Biokin Pharma
2Q Follow-Up – D. Western Therapeutics Institute (DWTI) (4576 JP)
Amgen Inc.: Which New Medicines Became Their Growth Powerhouses? – Major Drivers
Teleflex Incorporated: Strategies Unveiled to Conquer Approvals and Surgeon Training! – Major Drivers

China Healthcare Weekly (Sep.22) – Medical Device VBP, Restore Optimism on Healthcare, Biokin Pharma

By Xinyao (Criss) Wang

The national centralized procurement of high-value medical consumables such as intraocular lens (IOL) and sports medicine medical consumables is about to begin. We listed the companies that could be affected.
The instability of policies seems to be a consensus among investors regarding China healthcare. However, if truly understand the logic behind policy changes and industry shifts, investors will maintain optimism.
We analyzed the key points of Biokin. Its valuation is ridiculously high considering the current pipeline situation and commercialization outlook. We think the bubble will eventually burst (e.g. 50% downside).

2Q Follow-Up – D. Western Therapeutics Institute (DWTI) (4576 JP)

By Sessa Investment Research

Major milestones with high expectations coming in the next 2-3 years: 1) Phase IIb US trials for H-1337 as “first choice as a second-line Glaucoma drug” for patients who do not respond to PGs, 2) 2023 application, 2024 approval and 2025 launch of DW-1002 in Japan, 2023 application/approval/launch in China, as well as expedited development of combination formula MembraneBlue-DualR (DW-1002 + trypan blue) in the US [NEW], 3) 2023 approval and subsequent 2024 launch of DW-5LBT lidocaine patch for treatment of neuropathic pain in the US, and 4) clinical trials in 2024 in Japan and application for approval in 2025 of regenerative cell medicine DWR-2206 [NEW].
Coming into the 3Q, DWTI announced 2 updates not included in its “Business Plan and Growth Potential.”
On 7/13, DWTI announced the development plan for regenerative cell medicine DWR-2206, aiming to submit a notification of clinical trial at the end of 2023, start clinical trials in 2024, and submit application for approval (NDA) in 2025 (using the expedited conditional and term-limited approval system for regenerative therapeutics).

Amgen Inc.: Which New Medicines Became Their Growth Powerhouses? – Major Drivers

Amgen managed to exceed the revenue and earnings expectations of Wall Street, instilling confidence in its capacity for sustained long-term growth in both sales and earnings.
This growth was underpinned by a global volume increase of 11% for the quarter, with contributions from all three therapeutic areas and geographical regions.
Notable highlights included a 21% volume growth in their General Medicine segment and robust performance in the Asia Pacific region.

Teleflex Incorporated: Strategies Unveiled to Conquer Approvals and Surgeon Training! – Major Drivers

Teleflex managed to exceed analyst expectations in terms of revenue as well as earnings.
Adjusted earnings per share for the same period were $3.41, reflecting a 0.6% increase compared to the previous year.
The company observed a continued stabilization in hospital staffing, positively affecting second-quarter revenue growth, particularly in products tied to hospital settings.

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Sep 24

Daily Brief Industrials: Doosan Robotics, Toshiba Corp, Steelcase Inc Cl A and more

By Smartkarma Daily Briefs | Daily Briefs, Industrials

In today’s briefing:

Doosan Robotics Institutional Lockups Breakdown Leaked Pre-Disclosure: Analyzing Flow Schedule
(Mostly) Asia-Pac Weekly Risk Arb Wrap: Costa, Origin, Healius, Symbio, Poly Culture, Lansen, MPI
Steelcase, Inc. – Early 3Q Order Flow Rebounding; Raising Estimates

Doosan Robotics Institutional Lockups Breakdown Leaked Pre-Disclosure: Analyzing Flow Schedule

By Sanghyun Park

The immediate float rate on the listing date (October 5) has reached 19.25% as the institutional lockup volume is not as high as initially expected.
Even with a low institutional lockup level, there seems to be a possibility of a certain IPO day pop.
The first exit point we can look for in the short term would be the 1-month lockup release (1.44% of SO) one month after listing.

(Mostly) Asia-Pac Weekly Risk Arb Wrap: Costa, Origin, Healius, Symbio, Poly Culture, Lansen, MPI

I tally 49 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal.
One new deals this week: Lansen Pharmaceutical Holdings Co, Ltd. (503 HK)‘s Scheme.
Key updates took place for: Costa Group (CGC AU), Origin Energy (ORG AU), Healius (HLS AU), Symbio (SYM AU), Poly Culture (3636 HK), and Metro Pacific Investments (MPI PM).

Steelcase, Inc. – Early 3Q Order Flow Rebounding; Raising Estimates

By Water Tower Research

We are raising our estimates following an upbeat conference call and follow-up with SCS management.
Our adjusted 3QFY24 estimate, now at $0.25, is up from $0.21 and at the midpoint of guidance.
Full-year FY24 guidance is now $0.80-0.90. Our new FY24 EPS estimate is $0.88, up from $0.71 pre-release and near the top end of guidance.

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Sep 24

Daily Brief Financials: Sunac Services Holdings, ICBC (H) and more

By Smartkarma Daily Briefs | Daily Briefs, Financials

In today’s briefing:

Sunac Services (1516 HK): Positive Development From Debt Restructuring Of Parent Company
China’s New List Of D-SIBs’ Capital Buffer Is Wearing Thin For Some

Sunac Services (1516 HK): Positive Development From Debt Restructuring Of Parent Company

By Steve Zhou, CFA

On September 21, a debt restructuring agreement was reached with debt holders of Sunac China, in which part of the agreement included Sunac Services shares.
The debt restructuring for Sunac China should provide a positive feedback loop to the sentiment and fundamentals of Sunac Services.
The core property management business (86% of sales) grew 8% yoy in 1H23, with total gross floor area growing by 12% yoy.

China’s New List Of D-SIBs’ Capital Buffer Is Wearing Thin For Some

By Fern Wang

PBOC and NAFR included Bank of Nanjing in its latest D-SIBs list, increasing the total D-SIBs to 20
13 benchmarks were used to assess the D-SIBs using 1H23 data
All D-SIBs fulfilled their additional capital requirements as of 1H23, but the buffer is wearing thin for some especially in view of the difficult economic environment

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Sep 24

Daily Brief Consumer: Alibaba Group Holding , Hyatt Hotels Corp Cl A, Samsonite and more

By Smartkarma Daily Briefs | Consumer, Daily Briefs

In today’s briefing:

ECM Weekly (24th Sep 2023) – Cainiao, J&T, Midea, Kokusai, Seoul Guarantee, Barito, Integral, DPC
Hyatt Hotels Corporation: Key Initiatives to Boost Loyalty and Attract New Guests! – Major Drivers
Index Rebalance & ETF Flow Recap: HSI, HSCI, ASX, SET50, Wharf, SK Tel, Tata Motors, Midea, PCOMP

ECM Weekly (24th Sep 2023) – Cainiao, J&T, Midea, Kokusai, Seoul Guarantee, Barito, Integral, DPC

By Sumeet Singh

Aequitas Research puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs.
In the IPO space, Kokusai Electric (6525 JP) filed for it Japan listing, while Midea Group Co Ltd A (000333 CH) continued to work towards its H-share listing.
In the placement space, there were no major deals this week apart from Blue Star and Sheela Foam Ltd (SFL IN).

Hyatt Hotels Corporation: Key Initiatives to Boost Loyalty and Attract New Guests! – Major Drivers

Hyatt Hotels Corporation’s results were a major disappointment as the company failed to meet Wall Street’s revenue and earnings expectations.
The ongoing transformation of Hyatt is gaining momentum, with second-quarter results reinforcing their confidence in executing the strategy outlined during the Investor Day in May.
Hyatt has set ambitious targets, aiming to achieve $750 million in free cash flow and an 80% asset-light earnings mix by 2025.

Index Rebalance & ETF Flow Recap: HSI, HSCI, ASX, SET50, Wharf, SK Tel, Tata Motors, Midea, PCOMP

The coming week has the rebalance implementation for the NIFTY family of indices on Thursday and the Nikkei 225 (NKY INDEX) on Friday.
The review period for the December rebalance of the Hang Seng Index, Hang Seng China Enterprises Index, Hang Seng TECH Index and the HSCI Index ends on Friday.
Inflows to mainland China ETFs resumed following a pause as markets continue to trade weak.

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Sep 24

Most Read: KB Financial, Western Superconducting Techno, Bloomberry Resorts, Samsonite, Intage Holdings, Keep Inc, Boss Resources, M&A Research Institute, Kum Yang, Tokyo Stock Exchange Tokyo Price Index Topix and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

FnGuide Top10 Index Rebalance Preview: Good Historical Performance; One Potential Change in December
CSI500 Index Rebalance Preview: ETF Inflows Lead to Performance Skew
PCOMP Index Rebalance Preview: MPI Delisting Could See Bloomberry Added
Hang Seng Index Rebalance Preview: Foreign Companies Eligible from December
NTT’s Partial Offer for Intage (4326) Part Deux – Refining Pro-Ration Expectations
HSCI Index Rebalance Preview: Low Probability Add in December
S&P/ASX Index Rebalance Preview: Changes from Now to December
M&A Research Institute Holdings (9552) TOPIX Inclusion
KRX Plans to Introduce Float Market Cap & Extreme Price Increases to KOSPI 200 Screening
Public Opinion Is Slowly Catching Up, but the Change Has Only Just Begun

FnGuide Top10 Index Rebalance Preview: Good Historical Performance; One Potential Change in December

The Mirae Asset Tiger Top 10 ETF (292150 KS) tracks the FnGuide Top 10 Index and has an AUM of over US$1bn.
We currently forecast one potential change at the next rebalance in December. There is another set of changes that could also take place.
There has been a big increase in short interest on a couple of stocks while the rise has been more gradual on the other stocks.

CSI500 Index Rebalance Preview: ETF Inflows Lead to Performance Skew

Over 85% of the way through the review period for the December rebalance of the CSI500 Index, we forecast 50 changes (the maximum permitted) at the close on 8 December.
There is a big sector skew in the potential changes. We estimate a one-way turnover of 9.4% at the December rebalance resulting in a one-way trade of CNY 7.22bn.
With the market being stabilised through the ETF route, the index constituents have outperformed the non-index constituents over the last 6-7 weeks. That could reverse over the near term.

PCOMP Index Rebalance Preview: MPI Delisting Could See Bloomberry Added

Metro Pacific Investments Co (MPI PM) has announced that the public float of the stock will drop to 2.78% following the Tender Offer.
Metro Pacific Investments Co (MPI PM) shares are expected to be suspended from 26 September. That could see Bloomberry Resorts (BLOOM PM) added to the PCOMP INDEX on 25 September.
There will be large passive inflows to Bloomberry Resorts (BLOOM PM) as well as flows from active managers that track the PCOMP INDEX.

Hang Seng Index Rebalance Preview: Foreign Companies Eligible from December

The move from 80 index constituents to 100 could take most of next year (and possibly even the year after that) to manage turnover and add profitable companies.
Foreign companies will be eligible for inclusion in the index from the December rebalance. That makes Samsonite (1910 HK) a high probability inclusion candidate.
We highlight 8 potential inclusions to the index with passive trading impact varying from 1.6-4.3 days of ADV. There are large shorts on some of the stocks.

NTT’s Partial Offer for Intage (4326) Part Deux – Refining Pro-Ration Expectations

By Travis Lundy

Last week I wrote about NTT’s Partial Offer for Marketing Consultant Intage (4326) – (with a spurious hyphen at the end).
In the last couple of days, there have apparently been a few blocks printed on the tape. I have received questions about pricing and pro-ration.
So here I provide a set of 11 possible pro-ration cases, and suggest ways for traders and investors to think about the risks and possibilities.

HSCI Index Rebalance Preview: Low Probability Add in December

There have only been 7 new listings on the HKEX (388 HK) in the third quarter of the year so far.
Of those stocks, only Keep Inc (3650 HK) has a chance of being added to the Hang Seng Composite Index in December and then into Southbound Stock Connect.
Keep Inc (3650 HK) is the largest online fitness platform in China and the name recognition could bring in substantial flows via Southbound Stock Connect.

S&P/ASX Index Rebalance Preview: Changes from Now to December