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Smartkarma Daily Briefs

Sep 17
0

Daily Brief Consumer: Brilliance China Automotive, BYD , Ninebot and more

By | Consumer, Daily Briefs

In today’s briefing:

  • Index Rebalance & ETF Flow Recap: HSCEI, HSTECH, CSI500, STAR50, FnGuide Top10
  • Quiddity Mainland Connect NORTHBOUND Flows (Week to 15Sep23) : Zhongzhi Innolight, BYD, and Amperex
  • Quiddity Leaderboard STAR 50 Dec 23: One ADD and One DEL; Ninebot Could Underperform AIMA

Index Rebalance & ETF Flow Recap: HSCEI, HSTECH, CSI500, STAR50, FnGuide Top10

By Brian Freitas

  • It was a busy Friday with a bunch of indices rebalancing at the close and big volumes trading on a lot of stocks.
  • Brilliance China Automotive (1114 HK) had a good week with the stock rallying on Thursday and Friday on huge volumes amid expectations of upcoming passive buying.
  • A quiet week for ETFs with mainland China ETFs seeing some outflows after the huge inflows over the last couple of months.

Quiddity Mainland Connect NORTHBOUND Flows (Week to 15Sep23) : Zhongzhi Innolight, BYD, and Amperex

By Travis Lundy

  • This is the brand spanking new Quiddity Mainland Connect NORTHBOUND Monitor. We work off the same presentation as the A/H Premium Monitor and HK Connect SOUTHBOUND Monitor.
  • The data on liquid names is presented for 5 days and four weeks and anything seen can be ranked in tables or selected and charted (names, sectors, outperformance, etc).
  • We like the nifty interactive tables and charts and welcome feedback. This week saw RMB 15bn+ of net selling. That’s six weeks in a row of respectably large outflows.

Quiddity Leaderboard STAR 50 Dec 23: One ADD and One DEL; Ninebot Could Underperform AIMA

By Janaghan Jeyakumar, CFA

  • STAR 50 Index is a tech-focused, blue-chip index in Mainland China which tracks the top 50 largest and most liquid names in the STAR market of the Shanghai Stock Exchange.
  • In this insight, we take a look at our expectations for potential ADDs and DELs for the STAR 50 index during the December 2023 Rebalance event.
  • I currently expect one ADD and one DEL for the STAR 50 index in December 2023.

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Sep 17
0

Daily Brief Australia: CSL Ltd, Essential Metals, Origin Energy and more

By | Australia, Daily Briefs

In today’s briefing:

  • CSL Ltd (CSL AU): Banking on Strong Growth in Immunoglobulin Franchise on Record Plasma Collection
  • Essential Metal: Shareholder Vote On 12th Oct. The IE Says Not Fair
  • (Mostly) Asia-Pac Weekly Risk Arb Wrap: Origin, United Malt, T&K Toka, Golden Eagle Energy, JMDC

CSL Ltd (CSL AU): Banking on Strong Growth in Immunoglobulin Franchise on Record Plasma Collection

By Tina Banerjee

  • CSL Ltd (CSL AU) expects strong growth in immunoglobulin franchise to continue following record plasma collections. Optimizing plasma collection costs, improving yields, and new products launches should support margin recovery.
  • In June 2023, first patient has received Hemgenix in the U.S. With global annual peak sales estimate of $2.4B in 2030, Hemgenix is a compelling opportunity for CSL.
  • CSL Seqirus is anticipated to deliver another strong year driven by demand for its differentiated products. The company began influenza vaccine shipment across the U.S. for 2023–24 influenza season.

Essential Metal: Shareholder Vote On 12th Oct. The IE Says Not Fair

By David Blennerhassett

  • After Mineral Resources (MIN AU) and other shareholders voted against the Tianqi Lithium JV transaction for Essential Metals (ESS AU), Develop Global (DVP AU) swooped and announced a binding Scheme.
  • The all-scrip Scheme transaction has the backing of MinRes, who also owns a ~12.8% stake in Develop.
  • The Scheme Booklet is now out. Essential shareholders vote on the transaction on the 18 October, with implementation on the 6 November. The IE opines “not fair but reasonable“. 

(Mostly) Asia-Pac Weekly Risk Arb Wrap: Origin, United Malt, T&K Toka, Golden Eagle Energy, JMDC

By David Blennerhassett

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Sep 17
0

Daily Brief South Korea: Seoul Guarantee Insurance and more

By | Daily Briefs, South Korea

In today’s briefing:

  • Seoul Guarantee Insurance Corp IPO Valuation Analysis

Seoul Guarantee Insurance Corp IPO Valuation Analysis

By Douglas Kim

  • Our base case valuation of Seoul Guarantee Insurance is target price of 48,052 won which is within the IPO price range of 39,500 won to 51,800 won. 
  • Given the lack of upside relative to the IPO price range, we have a negative view of this deal. 
  • We are not impressed with the company’s lack of top-line sales growth and worsening operating profit in 2023. The valuation range as proposed by the bankers is also not attractive. 

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Sep 17
0

Daily Brief United States: Klaviyo and more

By | Daily Briefs, United States

In today’s briefing:

  • Klaviyo IPO Preview and Valuation Analysis: A Fast-Growing Marketing Automation Unicorn

Klaviyo IPO Preview and Valuation Analysis: A Fast-Growing Marketing Automation Unicorn

By Andrei Zakharov

  • Klaviyo, a Shopify-powered marketing automation platform provider for SMBs, mid-market, and B2B companies, filed to go public and plans to list on the New York Stock Exchange.
  • The fast-growing company was backed by Summit Partners, Shopify, and top-tier VC firms, including Accomplice, Accel, Sands Capital Ventures, Astral Capital, Cross Creek, and W Ventures.
  • Klaviyo is expected to IPO next week. S-1/A put the price range at $25-$27, implying a market cap of $6.5B at the midpoint, or $8.4B on a fully diluted basis. 

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Sep 17
0

Daily Brief China: Shenzhen Kangtai Biological Pr, BYD , Brilliance China Automotive, Eoptolink Technology , Hang Seng Index, Ninebot , Shanghai United Imaging Health, S.F. Holding, China Vanke (H) and more

By | China, Daily Briefs

In today’s briefing:

  • China Healthcare Weekly (Sep.15) – Anti-Corruption Turnaround? Vaccine Policy Changes, Kangtai Bio
  • Quiddity Mainland Connect NORTHBOUND Flows (Week to 15Sep23) : Zhongzhi Innolight, BYD, and Amperex
  • Index Rebalance & ETF Flow Recap: HSCEI, HSTECH, CSI500, STAR50, FnGuide Top10
  • Quiddity Leaderboard ChiNext & ChiNext 50: A Potential Basket Trade
  • EQD | Volatility Update: Weekly Review of Vol Changes and Best Trades-Central Banks Decide
  • Quiddity Leaderboard STAR 50 Dec 23: One ADD and One DEL; Ninebot Could Underperform AIMA
  • Quiddity Leaderboard CSI 300/​​500 Dec 23:  US$2.8bn One-Way; Might Be Time for a Basket Trade
  • CaiNiao & SF Holding Enjoy More Avenues to Growth Than “Plain Vanilla” Express Companies
  • Quiddity HK Connect SOUTHBOUND Flows (Week to 15Sep23) Banks, Real Estate, Telcos, and Big ETF Sales

China Healthcare Weekly (Sep.15) – Anti-Corruption Turnaround? Vaccine Policy Changes, Kangtai Bio

By Xinyao (Criss) Wang

  • The National Health Commission and The People’s Daily made “mild” statements about anti-corruption in China healthcare, bringing investors “new hope”. However, there could be a “misconception” regarding the anti-corruption movement. 
  • There was news that some type 2 vaccines could be converted to type 1 vaccines. Even though some vaccines will be affected by this policy, others will not.
  • Kangtai’s had strong 23H1 net profit, but it has little investment value due to lack of core R&D strength.Kangtai’s vaccines face the risk of being included in national immunization program.

Quiddity Mainland Connect NORTHBOUND Flows (Week to 15Sep23) : Zhongzhi Innolight, BYD, and Amperex

By Travis Lundy

  • This is the brand spanking new Quiddity Mainland Connect NORTHBOUND Monitor. We work off the same presentation as the A/H Premium Monitor and HK Connect SOUTHBOUND Monitor.
  • The data on liquid names is presented for 5 days and four weeks and anything seen can be ranked in tables or selected and charted (names, sectors, outperformance, etc).
  • We like the nifty interactive tables and charts and welcome feedback. This week saw RMB 15bn+ of net selling. That’s six weeks in a row of respectably large outflows.

Index Rebalance & ETF Flow Recap: HSCEI, HSTECH, CSI500, STAR50, FnGuide Top10

By Brian Freitas

  • It was a busy Friday with a bunch of indices rebalancing at the close and big volumes trading on a lot of stocks.
  • Brilliance China Automotive (1114 HK) had a good week with the stock rallying on Thursday and Friday on huge volumes amid expectations of upcoming passive buying.
  • A quiet week for ETFs with mainland China ETFs seeing some outflows after the huge inflows over the last couple of months.

Quiddity Leaderboard ChiNext & ChiNext 50: A Potential Basket Trade

By Janaghan Jeyakumar, CFA

  • The ChiNext Index represents the performance of the 100 largest and most liquid A-share stocks listed on the ChiNext Market of the Shenzhen Stock Exchange.
  • The ChiNext 50 index is a subset of the ChiNext Index and it consists of the top 50 names in the ChiNext index with the highest daily average turnover.
  • In this insight, we take a look at the names leading the race to become ADDs and DELETEs in the December 2023 Rebalance.

EQD | Volatility Update: Weekly Review of Vol Changes and Best Trades-Central Banks Decide

By Simon Harris

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

Quiddity Leaderboard STAR 50 Dec 23: One ADD and One DEL; Ninebot Could Underperform AIMA

By Janaghan Jeyakumar, CFA

  • STAR 50 Index is a tech-focused, blue-chip index in Mainland China which tracks the top 50 largest and most liquid names in the STAR market of the Shanghai Stock Exchange.
  • In this insight, we take a look at our expectations for potential ADDs and DELs for the STAR 50 index during the December 2023 Rebalance event.
  • I currently expect one ADD and one DEL for the STAR 50 index in December 2023.

Quiddity Leaderboard CSI 300/​​500 Dec 23:  US$2.8bn One-Way; Might Be Time for a Basket Trade

By Janaghan Jeyakumar, CFA

  • CSI 300 represents the 300 largest stocks by market capitalization and liquidity from the entire universe of Shanghai and Shenzhen Stock Exchanges. CSI 500 represents the next largest 500 names.
  • In this insight, we take a look at the potential ADDs/DELs for the CSI 300 and CSI 500 rebalance in December 2023.
  • Our latest estimates show that the combined one-way flow for CSI 300 and CSI 500 could be around US$2.8bn.

CaiNiao & SF Holding Enjoy More Avenues to Growth Than “Plain Vanilla” Express Companies

By Daniel Hellberg

  • CaiNiao and JD Logistics have grown far faster than their parents’ platforms in recent years, and also far faster than “plain vanilla” Chinese express companies
  • CaiNiao, JD Logistics, and SF Holding enjoy more avenues to growth than just the continued gradual expansion of China’s domestic e-commerce activity
  • In the medium-term, we believe shares of market leader SF Holding can outperform a basket of shares from SF’s “plain vanilla” peers in express

Quiddity HK Connect SOUTHBOUND Flows (Week to 15Sep23) Banks, Real Estate, Telcos, and Big ETF Sales

By Travis Lundy

  • This is the brand spanking new Quiddity HK Connect SOUTHBOUND Monitor. We work off the same presentation as the A/H Premium Monitor and Mainland Connect NORTHBOUND Monitor.
  • The data on liquid names is presented for 5 days and four weeks and anything seen can be ranked in tables or selected and charted (names, sectors, outperformance, etc).
  • We like the nifty interactive tables and charts and welcome feedback. This week saw RMB 15bn+ of net selling. That’s six weeks in a row of respectably large outflows.

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Sep 17
0

Daily Brief Japan: Japan Post Bank, Softbank Group, T&K Toka Co Ltd and more

By | Daily Briefs, Japan

In today’s briefing:

  • Last Week in Event SPACE: Japan Post, Sun Hung Kai, LVS/Sands China, Kenedix REIT Complex, JFE
  • ECM Weekly (17th Sep 2023) – ARM, VNG, Doosan, Tuhu, IMotion, Seibu Giken, RR Kabel, Viva, Innovent
  • Weekly Deals Digest (17 Sep) – T&K Toka, IMAX, Poly Culture, Doosan Robotics, Integral, Tuhu

Last Week in Event SPACE: Japan Post, Sun Hung Kai, LVS/Sands China, Kenedix REIT Complex, JFE

By David Blennerhassett

  • The Japan Post Holdings (6178 JP)/ Japan Post Bank (7182 JP) ratio looks more attractive as JPB climbs with other banks as the possibility of Offering-induced retail overhang increases. 
  • The ACCC has until 28 September 2023 to make its decision on Origin Energy (ORG AU). Expect ACCC to be supportive – they haven’t built a strong “against” case.
  • There should be more for the Kenedix REIT complex on a fundamental basis, a future equity capital raise accretion basis, and because of significant net buying for index purposes.

ECM Weekly (17th Sep 2023) – ARM, VNG, Doosan, Tuhu, IMotion, Seibu Giken, RR Kabel, Viva, Innovent

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, ARM’s IPO seems to have set the ball rolling for the traditionally busy year end across the region.
  • In the placement space, finally a Hong Kong placement mangaed to hold up, even as a large Aussie one gave way.

Weekly Deals Digest (17 Sep) – T&K Toka, IMAX, Poly Culture, Doosan Robotics, Integral, Tuhu

By Arun George

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Sep 16
0

Daily Brief Quantitative Analysis: Hong Kong Buybacks Weekly (Sep 15th): Tencent and more

By | Daily Briefs, Quantitative Analysis

In today’s briefing:

  • Hong Kong Buybacks Weekly (Sep 15th): Tencent, Aia, Country Garden Services

Hong Kong Buybacks Weekly (Sep 15th): Tencent, Aia, Country Garden Services

By Ke Yan, CFA, FRM

  • We analyze statistics on top repurchases over one week, one month, one quarter and one year periods ended on Sep 15th based on HKEx daily reports.
  • In the past 7 days, the top 3 companies that repurchased the most shares from the market were Tencent (700 HK), AIA (1299 HK), Country Garden Services (6098 HK).
  • In the past 30 days, the top 3 companies that repurchased the most shares from the market were Tencent (700 HK), AIA (1299 HK), Country Garden Services (6098 HK).

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Sep 16
0

Daily Brief ESG: Is Engagement Functioning Well with The “Engagement-Enhanced Passive” Approach Adopted by GPIF? and more

By | Daily Briefs, ESG

In today’s briefing:

  • Is Engagement Functioning Well with The “Engagement-Enhanced Passive” Approach Adopted by GPIF?

Is Engagement Functioning Well with The “Engagement-Enhanced Passive” Approach Adopted by GPIF?

By Aki Matsumoto

  • The GPIF employs a “passive enhanced engagement” approach, which is linked to TOPIX and engages in engagement activities with the portfolio companies. This approach should be examined for any challenges.
  • The challenge is whether GPIF’s extremely low management fees can engage in deep engagement with a large number of portfolio companies to reduce tracking error from TOPIX.
  • GPIF cites its inability to invest in equities in-house and the huge AUM as reasons for its bias toward passive funds. If this is an obstacle, reform should be considered.

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Sep 16
0

Daily Brief Thematic (Sector/Industry): Japan Weekly | Yay and more

By | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

  • Japan Weekly | Yay, Equity Breakout, Toyota Cross-Share Unwind, Problems for Japan Aerospace Inc
  • China RRR Cut, Macro, & A Debate on – Property Pair Trade “Long China and Short HK” (Or the Reverse)
  • Mat-Chem Notes For the Week Ended September 8, 2023

Japan Weekly | Yay, Equity Breakout, Toyota Cross-Share Unwind, Problems for Japan Aerospace Inc

By Mark Chadwick

  • A positive week for Japanese equities. The Nikkei ended the week up 2.8% at 33,533, a two-month high
  • Toyota Group subsidiaries took the honours after Aisin announced a bullish MTP and an unwinding of cross-shareholdings
  • Japan’s aerospace industry got caught up in the problems impacting Pratt & Whitney’s turbofan engines. All the heavies are impacted, none more so than IHI

China RRR Cut, Macro, & A Debate on – Property Pair Trade “Long China and Short HK” (Or the Reverse)

By Jacob Cheng

  • PBoC cut 25bps of RRR, being the second cut in 2023, and is expected to inject 500bn of liquidity into the system. The average RRR is 7.4% post cut
  • We look at the potential pair trade of China and HK for property.  The original thesis was that China offers higher growth to investors
  • Now, the thesis no longer holds.  The trade now becomes more complicated, given the moving pieces both from top down and bottom up.  We recommend single stock trade.

Mat-Chem Notes For the Week Ended September 8, 2023

By Water Tower Research

  • WTR-CMI last week. Last week saw the market retrench, with the S&P 500 losing 1.3%, while our WTR-CMI index of 30 chemicals and materials technology stocks managed to modestly outperform the broader Russell 2000 index (-3.6%) by declining 3.4%.

  • Only one stock in our index, SXT, managed a positive gain for the week, appreciating 3%. FMC was the worst performer in our index, losing 12.3% of its value on a short seller’s report that the company felt obliged to address.

  • Ag-tech portfolio shuffles continue. Privately held DLF, a global seed company, completed the acquisition of CTVA’s alfalfa seed breeding program, which was announced last month.

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Sep 16
0

Daily Brief ECM: Doosan Robotics IPO: Exuberance Results in Valuation Disconnect and more

By | Daily Briefs, ECM

In today’s briefing:

  • Doosan Robotics IPO: Exuberance Results in Valuation Disconnect
  • Millie’s Library IPO Book Building Results Analysis

Doosan Robotics IPO: Exuberance Results in Valuation Disconnect

By Arun George

Millie’s Library IPO Book Building Results Analysis

By Douglas Kim

  • Millie’s Library (418470 KS) announced its IPO book building results. The IPO price has been determined at 23,000 won which is at the high end of the IPO price range.
  • A total of 1,915 institutions participated in this IPO survey and the demand ratio of 619.2 to 1.
  • Our valuation analysis suggests base case target price of 31,769 won per share, which is 38% higher than the the IPO price of 23,000 won.

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