Smartkarma Daily Briefs, Author at Smartkarma

Aug 21

Daily Brief South Korea: Eoflow , Celltrion Healthcare and more

By Smartkarma Daily Briefs | Daily Briefs, South Korea

In today’s briefing:

Eoflow’s US Subsidiary (Nephria Bio)’s Technology in MXene Advanced Material
Weekly Deals Digest (20 Aug) – Celltrion, Sanei, T&K Toka, Costa, DDH1, Tesserent, VinFast

Eoflow’s US Subsidiary (Nephria Bio)’s Technology in MXene Advanced Material

By Douglas Kim

Eoflow (294090 KS)’s shares rose 2.7% to 27,000 won on 18 August with 1.4 million shares traded, which was 5.7x higher than the previous three days of trading.
The main reason for this was due to the local news flow on Eoflow’s US subsidiary’s (Nephria Bio) technology on the advanced material MXene.
This news flow on MXene is likely to put further positive boost to Eoflow’s share price closer to the tender offer price (or at least limit further downside risk).

Weekly Deals Digest (20 Aug) – Celltrion, Sanei, T&K Toka, Costa, DDH1, Tesserent, VinFast

By Arun George

A weekly summary of key developments across ECM and Event-Driven names tracked by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Thailand, Korea, India and Chinese ADRs.
ECM developments – Vinfast (VFS US)‘s rollercoaster debut, Rakuten Securities (RAKUSEC JP), EbixCash (EBIXC IN) and Lalatech Holdings Co Ltd (LALA HK) IPOs.
Event-Driven developments – Celltrion Healthcare (091990 KS), Sanei Architecture Planning (3228 JP), T&K Toka Co Ltd (4636 JP), Costa Group Holdings (CGC AU), DDH1 (DDH AU), Tesserent Ltd (TNT AU).

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Aug 21

Daily Brief Indonesia: Gajah Tunggal and more

By Smartkarma Daily Briefs | Daily Briefs, Indonesia

In today’s briefing:

Morning Views Asia: China Hongqiao, Gajah Tunggal

Morning Views Asia: China Hongqiao, Gajah Tunggal

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.

China Hongqiao
Gajah Tunggal

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Aug 21

Daily Brief India: Jana Small Finance Bank and more

By Smartkarma Daily Briefs | Daily Briefs, India

In today’s briefing:

Jana Small Finance Bank Pre-IPO Tearsheet

Jana Small Finance Bank Pre-IPO Tearsheet

By Ethan Aw

Jana Small Finance Bank (3667144Z IN) is looking to raise up to US$100m in its upcoming India IPO. The deal will be run by Axis Capital, ICICI-Sec and SBI Capital.
Jana Small Finance Bank (JSFB) is the fourth largest small finance bank in India in terms of AUM and deposit size as of FY23 (Year ended 31st Mar 2023).
The firm has served nearly 12m customers since 2008, including 4.57m active customers as of FY23.

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Aug 21

Daily Brief China: Sinopharm Group Co Ltd H, East Buy Holding , BYD, Dali Foods Group, AAC Technologies Holdings, Evergrande, Trip.com Group , JD Logistics , Fu Shou Yuan and more

By Smartkarma Daily Briefs | China, Daily Briefs

In today’s briefing:

Hang Seng Index Rebalance: Sinopharm (1099 HK) Added, Country Garden (2007 HK) Deleted
HSTECH Index Rebalance: East Buy (1797 HK) Replaces AAC Tech (2018 HK); Big Shorts on Both Stocks
Week 2 of the Brand New and Extra Spiffy 🦄 H/A-Share Discount/Premium Weekly (As of 18 Aug 2023)
Dali Foods (3799 HK): Widening Spread Ahead of the 23 August Vote
Hang Seng TECH Sep23 Index Review – A Few BIGLY Events and One-Way Flow of 3.4%
HSI Sep23 Index Review/Flows – Sinopharm (1099) IN, CoGard (2007) OUT; 100 Names a Loooong Way Off
Why Evergrande’s Bankruptcy Filing Is a Positive Development
HSCEI Sep23 Index Review/Flows – Trip.Com (9961) Added, CG Svcs (6098) Deleted; ~2.5% One Way
JD Logistics (2618 HK): 2Q23, External Revenue Still Grew Rapidly, 70% Upside
Fu Shou Yuan (1448 HK): More than Just a Recovery from Low Base

Hang Seng Index Rebalance: Sinopharm (1099 HK) Added, Country Garden (2007 HK) Deleted

By Brian Freitas

Sinopharm Group Co Ltd H (1099 HK) will be added to the Hang Seng Index (HSI INDEX) on 1 September while Country Garden Holdings Co (2007 HK) will be deleted.
Both changes are a surprise, but the impact on Sinopharm Group Co Ltd H (1099 HK) will be much larger. Given the recent increase in shorts, there could be covering.
Estimated one-way turnover is 1.9% leading to a one-way trade of HK$3.65bn. Capping will result in selling on Alibaba Group Holding (9988 HK), Tencent (700 HK) and HSBC (5 HK).

HSTECH Index Rebalance: East Buy (1797 HK) Replaces AAC Tech (2018 HK); Big Shorts on Both Stocks

By Brian Freitas

As expected, East Buy Holding (1797 HK) replaces AAC Technologies Holdings (2018 HK) in the Hang Seng TECH Index (HSTECH INDEX) at the close on 1 September.
Estimated one-way turnover is 3.5% leading to a one-way trade of HK$3.4bn (US$435m). There are 4 stocks with over 1 day of ADV to trade.
Short interest is 15% of float on both stocks. Short covering could take East Buy Holding (1797 HK) higher while providing support for AAC Technologies (2018 HK) closer to deletion.

Week 2 of the Brand New and Extra Spiffy 🦄 H/A-Share Discount/Premium Weekly (As of 18 Aug 2023)

By Travis Lundy

This is the Brand Spanking New and Improved and Extra Spiffy H/A-Share Discount/Premium Weekly designed to help investors see H/A relationships easily.
We used to do it and decided to bring it back better. There are lots of cool interactive tables, and charts, heat maps, and comparative data. And 19 Trade Recommendations.
We hope this new version serves readers even better. Improvements this week due to popular demand, and updated format. Further feedback is welcome/appreciated.

Dali Foods (3799 HK): Widening Spread Ahead of the 23 August Vote

By Arun George

Dali Foods Group (3799 HK)‘s gross spread on the Founder’s (Mr Xu Shihui) HK$3.75 per share offer has sharply increased and stood at 5.3% at the last close.
The rising gross spread is due to the recent market selloff (the gross spread of all HKEx merger arbs we track increased this week) and vote risk.
The vote risk is due to no interim results, the high AGM minority participation rate and a modest offer. There is little evidence that these risks will derail the vote.

Hang Seng TECH Sep23 Index Review – A Few BIGLY Events and One-Way Flow of 3.4%

By Travis Lundy

The Sep 23 review results for the Hang Seng Tech Index were announced on Friday 18 August after the close.
East Buy Holding (1797 HK) (formerly Koolearn) was an ADD. AAC Technologies Holdings (2018 HK) is a DELETE.
AAC is a significant flow event, and worth looking at. There are a few odds and ends too.

HSI Sep23 Index Review/Flows – Sinopharm (1099) IN, CoGard (2007) OUT; 100 Names a Loooong Way Off

By Travis Lundy

On Friday, Hang Seng Indices announced the changes to the benchmark Hang Seng Index, the index in the family with the largest AUM.
Sinopharm Group Co Ltd H (1099 HK) is ADDED, Country Garden Holdings Co (2007 HK) – in no surprise, is deleted.
I see HK$4bn a side to trade, and the only “compelling” trade by ADV here is Sinopharm, but correlations with a Peer Basket are low.

Why Evergrande’s Bankruptcy Filing Is a Positive Development

By Fern Wang

Evergrande’s filing in itself does not signify a deterioration in its financials; it was already insolvent as of end 2021.
The bankruptcy filing provides the benefits of automatic stay and is a necessary step to validate the Group’s offshore restructuring plan.
Evergrande’s long term viability still depends on recovery of the China property market.

HSCEI Sep23 Index Review/Flows – Trip.Com (9961) Added, CG Svcs (6098) Deleted; ~2.5% One Way

By Travis Lundy

The HSCEI Review for Sep 2023 was announced on Friday 18 August. There is one ADD Trip.com Group (9961 HK) and one DELETE Country Garden Services (6098 HK).
Neither of these two are a surprise. Neither are hugely impactful.
There is about 2.5% one-way to trade. Alibaba (ADR) (BABA US) is a sell across all three major indices.

JD Logistics (2618 HK): 2Q23, External Revenue Still Grew Rapidly, 70% Upside

By Ming Lu

In 2Q23, total revenue grew by 31% YoY and revenue from external customers grew by 56% YoY.
The operating margin can still breakeven during the rapid growth.
We believe the stock has an upside of 70% for yearend 2024. Buy.

Fu Shou Yuan (1448 HK): More than Just a Recovery from Low Base

By Osbert Tang, CFA

Fu Shou Yuan (1448 HK) has a solid 1H23 with net profit jumped 78% YoY. Its margin reached the highest level, reflecting resurgance in demand and good cost control.
Both volume and ASP growth led us to believe there is positive room for profitability improvements. Its balance sheet has also strengthened with net cash equals 17% of share price.
A 18.4% increase in pre-need contracts signed suggests encouraging underlying demand. More M&As are added drivers to earnings prospects.

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Aug 21

Daily Brief Japan: Tokyo Stock Exchange Tokyo Price Index Topix and more

By Smartkarma Daily Briefs | Daily Briefs, Japan

In today’s briefing:

Diversity Is a Goal of Effort Left to a Company with a Sideways Eye on the Government’s Seriousness

Diversity Is a Goal of Effort Left to a Company with a Sideways Eye on the Government’s Seriousness

By Aki Matsumoto

The TSE listing rules that include numerical targets for female board members are limited to prime market listed companies, so the majority of listed companies are not covered.
The “priority policy” on diversity is not budgeted or legislated. In the absence of underlying legislation, it is left to companies to decide how seriously they will implement it.
Regarding “30% or more female board members by 2030,” if companies want to achieve this goal, they’ll have to rely on female outside board members to make up the numbers.

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Aug 21

Daily Brief Quantitative Analysis: A-H Premium Weekly (Aug 18th):China Vanke and more

By Smartkarma Daily Briefs | Daily Briefs, Quantitative Analysis

In today’s briefing:

A-H Premium Weekly (Aug 18th):China Vanke, China East Air, China Life, China Longyuan
Hong Kong Connect Flows (Aug 18th): Tencent, China Mobile, Country Garden Services, Meituan, CCB
Northbound Flows (Aug 18th): Wuliangye, Moutai, CMB, Ping An Insurance, Longi Green, BYD, CATL
HK Short Interest Weekly: Ping An, Wuxi Apptec, HSBC, Petrochina, Li Auto

A-H Premium Weekly (Aug 18th):China Vanke, China East Air, China Life, China Longyuan

By Ke Yan, CFA, FRM

We analyse the changes of A-H premium on 146 stocks over the last week. The average A-H premium was 120.1% as of Aug 18th.
The average A-H premium changed by 2.9ppt week on week, led by utilities, financials, industrials and offset by consumer staples.
We highlight weekly changes in A-H premium for China Vanke, China East Air, China Life, China Longyuan.

Hong Kong Connect Flows (Aug 18th): Tencent, China Mobile, Country Garden Services, Meituan, CCB

By Ke Yan, CFA, FRM

We analyze the weekly Hong Kong Connect flows with our data engine for holding position as of August 18th.
The top stocks by inflows and outflows were tabulated for all market, HSCEI, mid cap and s/mid cap groups.
We highlight flows for Tencent, China Mobile, Country Garden Services, Meituan, CCB, Ping An Insurance (Group) Company Of China, Ltd.-Hkd Traded Shares, AIA.

Northbound Flows (Aug 18th): Wuliangye, Moutai, CMB, Ping An Insurance, Longi Green, BYD, CATL

By Ke Yan, CFA, FRM

We analyze the weekly Shanghai/Shenzhen northbound Connect flows with our data engine for holding position as of August 18th.
We estimate the weekly outflows to be US$4,168.8 million, led by consumer staples, materials.
We highlight flows for Kingsoft Office, Foxconn Industrial Internet, Wuliangye, Moutai, CMB, Ping An Insurance, Longi Green, BYD, CATL, Mindray, China Tourism, Inner Mongolia Yili Industrial.

HK Short Interest Weekly: Ping An, Wuxi Apptec, HSBC, Petrochina, Li Auto

By Ke Yan, CFA, FRM

We analyzed the latest HK SFC report for aggregate short position as of Aug 11th.
Top short increases and decreases were tabulated for one week and four week period.
We highlight short changes in Ping An, Wuxi Apptec, HSBC, Petrochina, Li Auto.

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Aug 21

Daily Brief ESG: Diversity Is a Goal of Effort Left to a Company with a Sideways Eye on the Government’s Seriousness and more

By Smartkarma Daily Briefs | Daily Briefs, ESG

In today’s briefing:

Diversity Is a Goal of Effort Left to a Company with a Sideways Eye on the Government’s Seriousness

Diversity Is a Goal of Effort Left to a Company with a Sideways Eye on the Government’s Seriousness

By Aki Matsumoto

The TSE listing rules that include numerical targets for female board members are limited to prime market listed companies, so the majority of listed companies are not covered.
The “priority policy” on diversity is not budgeted or legislated. In the absence of underlying legislation, it is left to companies to decide how seriously they will implement it.
Regarding “30% or more female board members by 2030,” if companies want to achieve this goal, they’ll have to rely on female outside board members to make up the numbers.

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Aug 21

Daily Brief ECM: Jana Small Finance Bank Pre-IPO Tearsheet and more

By Smartkarma Daily Briefs | Daily Briefs, ECM

In today’s briefing:

Jana Small Finance Bank Pre-IPO Tearsheet

Jana Small Finance Bank Pre-IPO Tearsheet

By Ethan Aw

Jana Small Finance Bank (3667144Z IN) is looking to raise up to US$100m in its upcoming India IPO. The deal will be run by Axis Capital, ICICI-Sec and SBI Capital.
Jana Small Finance Bank (JSFB) is the fourth largest small finance bank in India in terms of AUM and deposit size as of FY23 (Year ended 31st Mar 2023).
The firm has served nearly 12m customers since 2008, including 4.57m active customers as of FY23.

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Aug 21

Daily Brief Thematic (Sector/Industry): Ohayo Japan| Pause at End of Brutal Week; JAPAN X: AI-Powered Efficiency: Toyota’s Design Revolution and more

By Smartkarma Daily Briefs | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

Ohayo Japan| Pause at End of Brutal Week; JAPAN X: AI-Powered Efficiency: Toyota’s Design Revolution

Ohayo Japan| Pause at End of Brutal Week; JAPAN X: AI-Powered Efficiency: Toyota’s Design Revolution

By Mark Chadwick

OVERSEAS. SPX largely unchanged after three days of Equity derisking; Higher US Rates continue to pose a concern; China Property Turmoil Prompts Govt Intervention
JAPAN. NKY Futures +0.1% vs Cash; USDJPY 145.4; Japan’s July CPI slows to 3.1%; Govt considering tax break for Cos that lift wages; INCJ to cut Renesas stake to <10%
JAPAN X. Efficiency and Innovation in Vehicle Design: Toyota’s New Generative AI Approach. We like this development at Toyota and see multiple long-tailed benefits.

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