Smartkarma Daily Briefs

Softbank Group (9984 JP) aims to raise around US$8-10bn via selling some of its stake in ARM Holdings ’ US IPO.
ARM develops and licences high-performance, low-cost, and energy-efficient CPU products and related technology, which is used by semiconductor companies and OEMs to develop their own products.
In this note, we talk about the positive aspects of the deal.

Integral Corporation IPO: The Bear Case

By Arun George

Integral Corporation (5842 JP) is an independent Japanese private equity firm seeking to raise about US$175 million. The pricing is on 4 September, and the listing is on 20 September.
In Integral Corporation IPO: The Bull Case, we highlighted the key elements of the bull case. In this note, we outline the bear case.
The bear case rest on the declining mix of fee-earning AUM, growth driven by volatile investment income and uninspiring 1HFY22 performance in fee-related revenue growth and margin.

Union Bank of India QIP – Well-Flagged Deal, Recent Momentum Has Been Strong

By Clarence Chu

Union Bank Of India (UNBK IN) is looking to raise US$301m from its qualified institutional placement (QIP). Included in the deal is an option to effectively double its base deal.
The deal is a relatively large one to digest with the base deal alone representing 21.1 days of three months ADV.
That being said, the deal here is a very well flagged one with the firm having earlier reported to look to do so to boost its free float.

Samhi Hotels Pre-IPO – The Negatives – Peer Comp and Valuation

SAMHI Hotels (SAMHI IN) plans to raise around US$200m (estimated) in its Indian IPO.
Samhi is India’s third-largest hotel asset owner, by number of keys, with a portfolio of 25 operating hotel assets comprising 3,839 keys, as of Feb 2023.
In this note, we will undertake a peer comparison and provide our thoughts on valuation.

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Aug 23

Daily Brief Credit: West China Cement – Earnings Flash – H1 FY 2023 Results – Lucror Analytics and more

By Smartkarma Daily Briefs | Credit, Daily Briefs

In today’s briefing:

West China Cement – Earnings Flash – H1 FY 2023 Results – Lucror Analytics
SJM Holdings – Earnings Flash – H1 FY 2023 Results – Lucror Analytics
Morning Views Asia:

West China Cement – Earnings Flash – H1 FY 2023 Results – Lucror Analytics

By Leonard Law, CFA

WCC’s H1/23 results were softer than expected, as the company reported lower sales volumes and larger-than-expected ASP declines across its plants in Mainland China. In particular, sales volumes and ASP in the company’s stronghold of Shaanxi fell 4% and 16% y-o-y, respectively. Positively, WCC’s expansion in Africa has been progressing well, with overseas operations now accounting for 27% of revenue. The company’s plants in Africa enjoy substantially higher margins than those in China.

In our view, the key risk for WCC is uncertainty regarding the extent of its African expansion, with the company reportedly developing another USD 100 mn cement plant in Rwanda. We believe further expansion into Africa will fundamentally change WCC’s risk profile.

We move our recommendation on the WESCHI 4.95 26 to “Buy” from “Hold”.

SJM Holdings – Earnings Flash – H1 FY 2023 Results – Lucror Analytics

By Leonard Law, CFA

SJM Holdings’ H1/23 results were acceptable, as earnings improved in Q2 after a disappointing first quarter. Crucially, Grand Lisboa Palace continues to ramp up its operations gradually and the asset has achieved EBITDA break-even since June. That said, the company’s overall GGR market share remains meaningfully below its FY 2019 level. SJM reported slight positive EBITDA in H1, albeit we believe FCF was slightly negative after interest payments. The company’s profitability is likely to lag that of peers for the next 1-2 years.

We note that some investors are concerned about the economic slowdown in China, which could impact discretionary consumer spending (e.g. gaming and travel to Macau). That said, we believe the Chinese consumer market is large enough to sustain a continued recovery of Macau’s gaming sector.

Morning Views Asia:

By Charles Macgregor

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

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Aug 23

Daily Brief Event-Driven: Quiddity Leaderboard-DAX Sep 23: No More Catalyst for the Short Sartorius – LONG Merck Trade and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

Quiddity Leaderboard-DAX Sep 23: No More Catalyst for the Short Sartorius – LONG Merck Trade
MVIS Global Rare Earth/Strategic Metals Index Rebalance Preview: A Week to Go
Hanwha Ocean: Potential Capital Raise of Nearly 2 Trillion Won
KOSPI Size Indices – Plenty of Migrations to Attract Active Flows
Golden Eagle (3308 HK): 15th September Scheme Meeting

Quiddity Leaderboard-DAX Sep 23: No More Catalyst for the Short Sartorius – LONG Merck Trade

By Janaghan Jeyakumar, CFA

In this insight, we take a look at the names leading the race to become ADDs/DELs for the DAX, MDAX, and SDAX Indices in the September 2023 Rebalance.
Software AG (SOW GR) was deleted from the MDAX index triggering a couple of interim changes in the last week of July 2023.
Currently, I do not expect any changes for the DAX or MDAX indices in September 2023 but I expect one change for the SDAX index.

MVIS Global Rare Earth/Strategic Metals Index Rebalance Preview: A Week to Go

The changes for the next rebalance will use closing prices from 31 August, will be announced after the close on 8 September with implementation at the close on 15 September.
One stock is very close to the 85% cumulative market cap inclusion threshold, while there are two stocks that are near the 98% cumulative market cap deletion threshold.
With one inclusion and capping changes, estimated one-way turnover at the rebalance will be 3.5% resulting in a one-way trade of US$20m. That could change over the next week.

Hanwha Ocean: Potential Capital Raise of Nearly 2 Trillion Won

By Douglas Kim

Hanwha Ocean’s share price declined by 5% today, mainly due to local media reports about a potential capital raise of nearly 2 trillion won to 2.5 trillion won.
Although the company has not officially announced a rights offering, we believe the probability of Hanwha Ocean announcing a major rights offering is relatively high in the next 3-6 months.
We estimate this probability range is closer to about 60-70%. The company needs additional capital to improve its highly leveraged balance sheet and to make major investments.

KOSPI Size Indices – Plenty of Migrations to Attract Active Flows

The review period for the September rebalance of the KOSPI Size Indices started 1 June and will end 31 August. The changes will be implemented at the close 7 September.
We see 7 migrations from MidCap to LargeCap, 6 migrations from LargeCap to MidCap, 7 new adds to MidCap, and 17 migrations from SmallCap to MidCap.
Historically, stocks migrating from SmallCap to MidCap have outperformed stocks that are migrating between other categories.

Golden Eagle (3308 HK): 15th September Scheme Meeting

By David Blennerhassett

On the 28th May, PRC department store play Golden Eagle Retail (3308 HK) announced a privatisation offer, by way of a Scheme, at $6.88/share, a 40.41% premium to last close.
The Offeror is the Wang family, Together with concert parties, they control 80.29%. 7.18% of the remaining 19.71% of the disinterested stakeholders have given an irrevocable.
The Scheme Doc was despatched this morning (23 August). The Scheme Meeting is September 15th with expected payment on (or before) the 17th of October. The Offer price is final.

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Aug 23

Daily Brief Equity Bottom-Up: Zydus Lifesciences (ZYDUSLIF IN): Strong Start of FY24 Riding on US Formulation Business and more

By Smartkarma Daily Briefs | Daily Briefs, Equity Bottom-Up

In today’s briefing:

Zydus Lifesciences (ZYDUSLIF IN): Strong Start of FY24 Riding on US Formulation Business
KS (Kuaishou 1024 HK): 2Q23, First Net Profit Since IPO, Growth Accelerated, Buy
Ping An Insurance – Dramatic Worsening Key Areas, Big Bank Exposure, Macro Insurance Stats Are Poor
Dollar General (DG-US) – It’s a trap!
SHK 86_HK: Dividend Yield 8.5%, P/E 1.96x, P/B 0.25x
ClouDr Group (9955.HK) 23H1 – Turning Losses into Profits Is Within Reach
IQIYI (IQ US): Embracing Moderate yet Stable Growth
Kolte Patil: Strong Growth Momentum Continues from FY23
Sekisui Chem (4204) | Potential of Perovskite PV
OMG: Wide Gold Zones Continue to Fill Gaps in Resource

Zydus Lifesciences (ZYDUSLIF IN): Strong Start of FY24 Riding on US Formulation Business

By Tina Banerjee

Zydus Lifesciences Ltd (ZYDUSLIF IN) recorded 30% YoY growth in revenue to INR51B in Q1FY24, driven by 57% YoY growth in US formulation business. India business revenue grew 6% YoY.
US business growth was driven by new product launches and improvement in base business. The company has launched four new products in the US during the quarter.
Zydus Lifesciences expects double-digit growth in India branded formulation business to continue and the U.S. business to grow on a formidable base of FY23 going forward.

KS (Kuaishou 1024 HK): 2Q23, First Net Profit Since IPO, Growth Accelerated, Buy

By Ming Lu

The total revenue growth rate accelerated significantly to 28% YoY in 2Q23.
The high-margin businesses grew more rapidly than the low margin business.
Gross Merchandise Value and Active user base still increased strongly.

Ping An Insurance – Dramatic Worsening Key Areas, Big Bank Exposure, Macro Insurance Stats Are Poor

By Daniel Tabbush

There is considerable worsening in net profit, including from key divisions
Despite rising assets for Health and Life, profit in this core division is down a lot
Banking exposure is significant, with a poor outlook, and making Ping An less pure

Dollar General (DG-US) – It’s a trap!

By Guasty Winds

After spectating DG for some time, I bought a small starter position in June. It is not often that you get a chance to buy a compounder like this 35% from its highs.
Historically it has paid to buy the dips on DG, so I figured I would buy now and ask questions later.
This time it has not paid, at all. My average was ~$185 and I sold my stock last monday at $168. I know that some of my subs also follow the stock so I thought I would collect my notes and write up a few paragraphs.

SHK 86_HK: Dividend Yield 8.5%, P/E 1.96x, P/B 0.25x

By Evaluate Research

Despite Headwinds Revenue Remains Relatively Stable at HK $1,968 million
For 1HFY2023–Total Buyback of 0.77 million shares (HK$2.3 million) at average price of $2.99
Stock at 0.25x tangible P/B and at 1.96x P/E on our FY2024 earnings estimate

ClouDr Group (9955.HK) 23H1 – Turning Losses into Profits Is Within Reach

By Xinyao (Criss) Wang

When we discovered that JD Health’s growth could face a downturn crisis, we hope to find a suitable substitute. ClouDr has such potential due to its good performance/reasonable business model.
The current anti-corruption campaign could bring new opportunities to ClouDr, who can rely on “hospital first” strategy to take the upper hand, but it should be based on some prerequisites.
ClouDr’s business is expected to keep strong growth momentum in 2023. The Company is expected to achieve breakeven in 2024. Investors could see good stock price performance at that time.

IQIYI (IQ US): Embracing Moderate yet Stable Growth

By Eric Chen

IQiyi failed to give its share price a lift with stronger-than-expected 2Q results except for slight miss in paying subscribers .
We believe that investors are expecting the end of its remarkable turnaround story and embracing a stable and moderate growth stage.
While iQiyi trades at ~10x our FY23 earnings, the cheap valuation by itself doesn’t stand out among China internet peers as a group. We would wait for better entry points.

Kolte Patil: Strong Growth Momentum Continues from FY23

By Ankit Agrawal, CFA

Kolte Patil (KPDL) reported record sales velocity in Q1FY24 and is on track to achieve 25%+ sales value growth in FY24 as per its stated guidance.
Business development activity is also happening at a record pace and Kolte Patil is on track to beat its prior FY24 guidance of INR 8000cr by a wide margin.
Despite 80%+ rise in the share price since our coverage initiation 2Y ago, Kolte Patil still offers an upside potential of 25%+ IRR over a holding period of three years.

Sekisui Chem (4204) | Potential of Perovskite PV

By Mark Chadwick

Perovskite solar cells have the potential to be more efficient and less expensive than traditional silicon solar cells.
Recent research suggests that the global market for Perovskite PV could be worth around $12 billion in 2032
If Sekisui Chemical were to take a 10% market share, then the potential impact on earnings could be 22%.

OMG: Wide Gold Zones Continue to Fill Gaps in Resource

By Atrium Research

Today’s results highlight the strong continuity of high-grade along the Wenot Shear and the Company’s ability to efficiently fill wide gaps in zones which will be important for the upcoming resource update.
The Company has completed 14 drill holes, totalling 5,235m.
This morning, Omai Gold Mines Corp. (OMG:TSXV, OMGGF:OTC) announced additional drill results from the Omai gold project in Guyana.

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Aug 23

Daily Brief Macro: Inflation Watch: Why EUR inflation will print below 2% before New Years and more

By Smartkarma Daily Briefs | Daily Briefs, Macro

In today’s briefing:

Inflation Watch: Why EUR inflation will print below 2% before New Years
FX Nugget: What Policy Normalization? The BoJ Is as Interventionist as Ever….
‘Bidenomics’ Delays Recession, but USD Rebound & Fiscal Reins Are Tipping Points
Real Estate Watch: Too Early to Call off the Crisis in Western Markets
Ascending El Niño and Its Impact on Corn Production and Prices
Developing Asia’s Improving Fundamentals Will Further Attract FDI
Great Game: Will F16s destroy Russia? Will BRICS destroy the USD?
China’s Economic Woes Will Prompt a Ramp-Up of Measures
CX Daily: China’s ‘Hidden Debt’ of Local Governments Threatens National Economy
The Energy Cable #34 – Double top…now what?

Inflation Watch: Why EUR inflation will print below 2% before New Years

By Andreas Steno

It’s Jackson Hole week and even if Wyoming is typically only full of cowboys (also when CBs gather), they are joined by a cowgirl from France this week for the conference.
The Fed and the ECB will enter the yearly conference with different macroeconomic backdrops as the US growth and inflation momentum seems stickier than Euro peers on our models.
And using leads/lags from the European PPI basket and the US HICP index, we intend on showing you that sub 2% inflation in Europe is a clear possibility in just 3 months from now.

FX Nugget: What Policy Normalization? The BoJ Is as Interventionist as Ever….

By Andreas Steno

Markets are stuck in a discussion on the JPY this morning as BoJ governor Ueda and PM Kishida held a meeting allegedly discussing FX developments.
Our models continue to signal weakness ahead for the JPY.
Even a move to 1% in the YCC-curve control has NOT allowed the BoJ to become less interventionist.

‘Bidenomics’ Delays Recession, but USD Rebound & Fiscal Reins Are Tipping Points

By Prasenjit K. Basu

‘Bidenomics’ investment subsidies aided the 7.7%QoQsaar growth in business investment in Q2CY23, delaying the onset of recession. Policy rate to stay near 5.5% until Q2CY24, thereby restraining growth until then.
ECB and BoE face less pressure to raise rates amid easing headline inflation, so yield differentials will strengthen USD; the latter will be a drag on net exports in H2CY23.
The spending restraints agreed in May’23 kick in from Oct’23, and will be a drag on aggregate demand from Q4CY23, the quarter a mild recession is likely to begin.

Real Estate Watch: Too Early to Call off the Crisis in Western Markets

By Andreas Steno

These past few weeks have been all about China and China is all about real estate.
With that, welcome to this week’s real estate-focused edition of the ‘Watch Series’, where we look for clues on the state of the US parallel in particular.
Our findings in brief: Favorable fixings counter forced selling, Record low affordability discourages buying, Little volume and stalemate in price, Weakening labor market and layoffs remain THE triggers for potential selloff.

Ascending El Niño and Its Impact on Corn Production and Prices

By Pranay Yadav

El Niño & Southern Oscillation (ENSO) is a recurring climate phenomenon with adverse impact chiefly on agriculture causing volatility in grain production leading to price shocks.
Shortening frequency of ENSO cycles and its intensity has increased due to global warming. Given its potency of causing shocks, ENSO now has an outsized influence on global economics.
Considering El Niño’s impact on corn, expect production to decline next year as La Niña effects fade compounded by agri productivity declines due to higher temperatures & extreme weather.

Developing Asia’s Improving Fundamentals Will Further Attract FDI

By Manu Bhaskaran

Southeast Asia could regain the position it had in the early 1990s as a premier FDI destination. There are positive signs in a range of new-economy sectors.
The region’s reforms will help overcome challenges in absorbing FDI caused by infrastructure and other deficiencies.
The evolving investment landscape thus favours Southeast Asia and other emerging Asian economies. But further reforms are needed to rectify historical weaknesses and establish a lasting appeal.

Great Game: Will F16s destroy Russia? Will BRICS destroy the USD?

By Mikkel Rosenvold

Welcome to this week’s Great Game which will focus on two hot current topics and how to understand them – first the F16 donations to Ukraine and then the BRICS meeting in South Africa.
First of all, let’s try to unwrap the latest European gift to Ukraine:The F16s are no gamechanger in current numbersAs mentioned several times in this space, the Ukranian summer offensive has halted mainly due to a lack of air superiority.
It’s simply too hard to break through heavily fortified Russian positions without air bombardment and close air support.

China’s Economic Woes Will Prompt a Ramp-Up of Measures

By Manu Bhaskaran

China’s faltering economy suggests that its cautious approach has not worked. A vicious cycle is emerging: economic weakness exacerbates real estate challenges, triggering financial stresses that further impact the economy.
Most concerning is the property crisis, with its impact on developers, homeowners, and local governments: contagion effects could lead to unprecedented defaults on bonds held by local government financing vehicles.
The larger set of still carefully calibrated actions that are being planned, while helping to preserve minimal growth, will not suffice for China to regain its previous dynamism.

CX Daily: China’s ‘Hidden Debt’ of Local Governments Threatens National Economy

By Caixin Global

Debt /Cover Story: China’s ‘hidden debt’ of local governments threatens national economy
Property /: Country Garden’s plan to extend bond repayment meets with resistance
Stocks /: China’s securities regulator steps up efforts to bolster sagging market

The Energy Cable #34 – Double top…now what?

By Ulrik Simmelholt

Are we starting to see the early signs of a 2022 dynamic in LNG?
The below chart describes the scenario we saw late summer last year here in Europe when policymakers all the sudden scrambled to secure natural gas.
For the cycle to truly have the chance of playing out we need natural gas demand to increase and the USD to strengthen as a product of the increase in demand.

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Aug 23

Daily Brief Financials: Integral Corporation, Ping An Insurance (H), Sun Hung Kai, Union Bank Of India, Kolte Patil Developers, SAMHI Hotels and more

By Smartkarma Daily Briefs | Daily Briefs, Financials

In today’s briefing:

Integral Corporation IPO: The Bear Case
Ping An Insurance – Dramatic Worsening Key Areas, Big Bank Exposure, Macro Insurance Stats Are Poor
SHK 86_HK: Dividend Yield 8.5%, P/E 1.96x, P/B 0.25x
Union Bank of India QIP – Well-Flagged Deal, Recent Momentum Has Been Strong
Kolte Patil: Strong Growth Momentum Continues from FY23
Samhi Hotels Pre-IPO – The Negatives – Peer Comp and Valuation

Integral Corporation IPO: The Bear Case

By Arun George

Integral Corporation (5842 JP) is an independent Japanese private equity firm seeking to raise about US$175 million. The pricing is on 4 September, and the listing is on 20 September.
In Integral Corporation IPO: The Bull Case, we highlighted the key elements of the bull case. In this note, we outline the bear case.
The bear case rest on the declining mix of fee-earning AUM, growth driven by volatile investment income and uninspiring 1HFY22 performance in fee-related revenue growth and margin.

Ping An Insurance – Dramatic Worsening Key Areas, Big Bank Exposure, Macro Insurance Stats Are Poor

By Daniel Tabbush

There is considerable worsening in net profit, including from key divisions
Despite rising assets for Health and Life, profit in this core division is down a lot
Banking exposure is significant, with a poor outlook, and making Ping An less pure

SHK 86_HK: Dividend Yield 8.5%, P/E 1.96x, P/B 0.25x

By Evaluate Research

Despite Headwinds Revenue Remains Relatively Stable at HK $1,968 million
For 1HFY2023–Total Buyback of 0.77 million shares (HK$2.3 million) at average price of $2.99
Stock at 0.25x tangible P/B and at 1.96x P/E on our FY2024 earnings estimate

Union Bank of India QIP – Well-Flagged Deal, Recent Momentum Has Been Strong

By Clarence Chu

Union Bank Of India (UNBK IN) is looking to raise US$301m from its qualified institutional placement (QIP). Included in the deal is an option to effectively double its base deal.
The deal is a relatively large one to digest with the base deal alone representing 21.1 days of three months ADV.
That being said, the deal here is a very well flagged one with the firm having earlier reported to look to do so to boost its free float.

Kolte Patil: Strong Growth Momentum Continues from FY23

By Ankit Agrawal, CFA

Kolte Patil (KPDL) reported record sales velocity in Q1FY24 and is on track to achieve 25%+ sales value growth in FY24 as per its stated guidance.
Business development activity is also happening at a record pace and Kolte Patil is on track to beat its prior FY24 guidance of INR 8000cr by a wide margin.
Despite 80%+ rise in the share price since our coverage initiation 2Y ago, Kolte Patil still offers an upside potential of 25%+ IRR over a holding period of three years.

Samhi Hotels Pre-IPO – The Negatives – Peer Comp and Valuation

SAMHI Hotels (SAMHI IN) plans to raise around US$200m (estimated) in its Indian IPO.
Samhi is India’s third-largest hotel asset owner, by number of keys, with a portfolio of 25 operating hotel assets comprising 3,839 keys, as of Feb 2023.
In this note, we will undertake a peer comparison and provide our thoughts on valuation.

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Aug 23

Daily Brief Industrials: Hanwha Ocean, AP Moeller – Maersk A/S, Uber Technologies , Ingersoll Rand and more

By Smartkarma Daily Briefs | Daily Briefs, Industrials

In today’s briefing:

Hanwha Ocean: Potential Capital Raise of Nearly 2 Trillion Won
Monthly Container Shipping Tracker | Rates Bottoming | Fuel Tailwind Easing? | (August 2023)
Uber Technologies Inc.: Breaking the Mold With New Strategies! – Major Drivers
Ingersoll Rand Inc.: Cracking The Code To Overcoming Global Supply Chain Hurdles! – Major Drivers

Hanwha Ocean: Potential Capital Raise of Nearly 2 Trillion Won

By Douglas Kim

Hanwha Ocean’s share price declined by 5% today, mainly due to local media reports about a potential capital raise of nearly 2 trillion won to 2.5 trillion won.
Although the company has not officially announced a rights offering, we believe the probability of Hanwha Ocean announcing a major rights offering is relatively high in the next 3-6 months.
We estimate this probability range is closer to about 60-70%. The company needs additional capital to improve its highly leveraged balance sheet and to make major investments.

Monthly Container Shipping Tracker | Rates Bottoming | Fuel Tailwind Easing? | (August 2023)

By Daniel Hellberg

Our monthly index suggests that container rates have bottomed, with easier comps in H2
Lower fuel has been a tailwind for carriers for several months, but that could change
We still think the worst has passed for carriers, a few of which have performed well in ’23

Uber Technologies Inc.: Breaking the Mold With New Strategies! – Major Drivers

Uber Technologies delivered a mixed set of results in its most recent result, with revenues falling short of Wall Street expectations but above-par earnings.
However, it has faced its fair share of challenges in the competitive landscape and increasing complexity of marketplace management.
We give Uber Technologies a ‘Hold’ rating with a revised target price.

Ingersoll Rand Inc.: Cracking The Code To Overcoming Global Supply Chain Hurdles! – Major Drivers

Ingersoll Rand Inc. managed to exceed analyst expectations in terms of revenue and earnings.
Revenue and total company organic orders both saw a year-over-year increase.
While the PST segment margin grew by 240 basis points, the ITS segment margin increased by 200.

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Aug 23

Daily Brief Industrials: Hanwha Ocean, AP Moeller – Maersk A/S, Uber Technologies , Ingersoll Rand and more

By Smartkarma Daily Briefs | Daily Briefs, Industrials

In today’s briefing:

Hanwha Ocean: Potential Capital Raise of Nearly 2 Trillion Won
Monthly Container Shipping Tracker | Rates Bottoming | Fuel Tailwind Easing? | (August 2023)
Uber Technologies Inc.: Breaking the Mold With New Strategies! – Major Drivers
Ingersoll Rand Inc.: Cracking The Code To Overcoming Global Supply Chain Hurdles! – Major Drivers

Hanwha Ocean: Potential Capital Raise of Nearly 2 Trillion Won

By Douglas Kim

Hanwha Ocean’s share price declined by 5% today, mainly due to local media reports about a potential capital raise of nearly 2 trillion won to 2.5 trillion won.
Although the company has not officially announced a rights offering, we believe the probability of Hanwha Ocean announcing a major rights offering is relatively high in the next 3-6 months.
We estimate this probability range is closer to about 60-70%. The company needs additional capital to improve its highly leveraged balance sheet and to make major investments.

Monthly Container Shipping Tracker | Rates Bottoming | Fuel Tailwind Easing? | (August 2023)

By Daniel Hellberg

Our monthly index suggests that container rates have bottomed, with easier comps in H2
Lower fuel has been a tailwind for carriers for several months, but that could change
We still think the worst has passed for carriers, a few of which have performed well in ’23

Uber Technologies Inc.: Breaking the Mold With New Strategies! – Major Drivers

Uber Technologies delivered a mixed set of results in its most recent result, with revenues falling short of Wall Street expectations but above-par earnings.
However, it has faced its fair share of challenges in the competitive landscape and increasing complexity of marketplace management.
We give Uber Technologies a ‘Hold’ rating with a revised target price.

Ingersoll Rand Inc.: Cracking The Code To Overcoming Global Supply Chain Hurdles! – Major Drivers

Ingersoll Rand Inc. managed to exceed analyst expectations in terms of revenue and earnings.
Revenue and total company organic orders both saw a year-over-year increase.
While the PST segment margin grew by 240 basis points, the ITS segment margin increased by 200.

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Aug 23

Daily Brief Energy/Materials: S&P 500 INDEX, Lake Resources Nl, Omai Gold Mines, West China Cement and more

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

In today’s briefing:

Pause Continues But Oversold Bounce Likely; Buys in Energy, Construction/Engineering, Enrgy Shippers
MVIS Global Rare Earth/Strategic Metals Index Rebalance Preview: A Week to Go
OMG: Wide Gold Zones Continue to Fill Gaps in Resource
West China Cement – Earnings Flash – H1 FY 2023 Results – Lucror Analytics

Pause Continues But Oversold Bounce Likely; Buys in Energy, Construction/Engineering, Enrgy Shippers

By Joe Jasper

Support levels discussed in our 8/8/23 Compass broke, leading to a change in character (from buy the dup to sell the rip) and a deeper pullback.
Supports we were watching included the 50-day MA and 4460-4475 on the S&P 500, $371.50 on $QQQ, and $190-193 on the $IWM; these are now resistance moving forward
Longer-Term support on the S&P 500 is at 4300-4325 (nearly hit on Friday) and 4200, and we will remain constructive as long as these supports hold.

MVIS Global Rare Earth/Strategic Metals Index Rebalance Preview: A Week to Go

The changes for the next rebalance will use closing prices from 31 August, will be announced after the close on 8 September with implementation at the close on 15 September.
One stock is very close to the 85% cumulative market cap inclusion threshold, while there are two stocks that are near the 98% cumulative market cap deletion threshold.
With one inclusion and capping changes, estimated one-way turnover at the rebalance will be 3.5% resulting in a one-way trade of US$20m. That could change over the next week.

OMG: Wide Gold Zones Continue to Fill Gaps in Resource

By Atrium Research

Today’s results highlight the strong continuity of high-grade along the Wenot Shear and the Company’s ability to efficiently fill wide gaps in zones which will be important for the upcoming resource update.
The Company has completed 14 drill holes, totalling 5,235m.
This morning, Omai Gold Mines Corp. (OMG:TSXV, OMGGF:OTC) announced additional drill results from the Omai gold project in Guyana.

West China Cement – Earnings Flash – H1 FY 2023 Results – Lucror Analytics

By Leonard Law, CFA

We move our recommendation on the WESCHI 4.95 26 to “Buy” from “Hold”.

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Aug 23

Daily Brief TMT/Internet: ARM Holdings, Kuaishou Technology, Basler, Isupetasys, iQIYI Inc, Activation Group Holdings, Arista Networks and more

By Smartkarma Daily Briefs | Daily Briefs, TMT/Internet

In today’s briefing:

ARM Holdings Limited – The Positives – Pervasive Global Presence
KS (Kuaishou 1024 HK): 2Q23, First Net Profit Since IPO, Growth Accelerated, Buy
Quiddity Leaderboard-DAX Sep 23: No More Catalyst for the Short Sartorius – LONG Merck Trade
KOSPI Size Indices – Plenty of Migrations to Attract Active Flows
IQIYI (IQ US): Embracing Moderate yet Stable Growth
An Update on 2023H1 Results of Activation Group (9919 HK)
Arista Networks Inc.: Capitalizing on Strong Growth Outside the Cloud Domain! – Major Drivers

ARM Holdings Limited – The Positives – Pervasive Global Presence

Softbank Group (9984 JP) aims to raise around US$8-10bn via selling some of its stake in ARM Holdings ’ US IPO.
ARM develops and licences high-performance, low-cost, and energy-efficient CPU products and related technology, which is used by semiconductor companies and OEMs to develop their own products.
In this note, we talk about the positive aspects of the deal.

KS (Kuaishou 1024 HK): 2Q23, First Net Profit Since IPO, Growth Accelerated, Buy

By Ming Lu

The total revenue growth rate accelerated significantly to 28% YoY in 2Q23.
The high-margin businesses grew more rapidly than the low margin business.
Gross Merchandise Value and Active user base still increased strongly.

Quiddity Leaderboard-DAX Sep 23: No More Catalyst for the Short Sartorius – LONG Merck Trade

By Janaghan Jeyakumar, CFA

In this insight, we take a look at the names leading the race to become ADDs/DELs for the DAX, MDAX, and SDAX Indices in the September 2023 Rebalance.
Software AG (SOW GR) was deleted from the MDAX index triggering a couple of interim changes in the last week of July 2023.
Currently, I do not expect any changes for the DAX or MDAX indices in September 2023 but I expect one change for the SDAX index.

KOSPI Size Indices – Plenty of Migrations to Attract Active Flows

The review period for the September rebalance of the KOSPI Size Indices started 1 June and will end 31 August. The changes will be implemented at the close 7 September.
We see 7 migrations from MidCap to LargeCap, 6 migrations from LargeCap to MidCap, 7 new adds to MidCap, and 17 migrations from SmallCap to MidCap.
Historically, stocks migrating from SmallCap to MidCap have outperformed stocks that are migrating between other categories.

IQIYI (IQ US): Embracing Moderate yet Stable Growth

By Eric Chen

IQiyi failed to give its share price a lift with stronger-than-expected 2Q results except for slight miss in paying subscribers .
We believe that investors are expecting the end of its remarkable turnaround story and embracing a stable and moderate growth stage.
While iQiyi trades at ~10x our FY23 earnings, the cheap valuation by itself doesn’t stand out among China internet peers as a group. We would wait for better entry points.

An Update on 2023H1 Results of Activation Group (9919 HK)

By Oriental Value

Activation Group (9919 HK) unveiled its first-half financial results for 2023 on August 10th, 2023.
In this article, we will provide an overview of Activation’s performance during this period and share thoughts on its future prospects.
The Experiential Marketing segment recorded a full recovery, reaching RMB 280 million, surpassing the 2021 H1 level of RMB 276 million.

Arista Networks Inc.: Capitalizing on Strong Growth Outside the Cloud Domain! – Major Drivers