Smartkarma Daily Briefs, Author at Smartkarma

Jul 22

Daily Brief TMT/Internet: Taiwan Semiconductor (TSMC) – ADR and more

By Smartkarma Daily Briefs | Daily Briefs, TMT/Internet

In today’s briefing:

TSMC Sees Continued Weakness, and EUV’s Quandary (ASML)

TSMC Sees Continued Weakness, and EUV’s Quandary (ASML)

By Douglas O’Laughlin

TSMC reported earnings. They beat Q2 estimates, but importantly they guided down Q3 and FY 2023 estimates.
The Q2 beat was widely expected regarding revenue, given that TSMC reports monthly revenue, but the Q3 guide was not.
The midpoint of the guidance has the year-over-year decline decelerating, which I didn’t expect. Moreover, the -10% annual guide throws some water on the second-half recovery. Yes, the second half will be higher than the first, but the recovery is much more muted than historical. And what’s more, margins are looking worse for N3 than a typical node.

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Jul 22

Daily Brief Consumer: NagaCorp Ltd, Lookers PLC and more

By Smartkarma Daily Briefs | Consumer, Daily Briefs

In today’s briefing:

Weekly Wrap – 21 Jul 2023
Alpha Auto Group/Lookers: From Done Deal to Uncertain Situation

Weekly Wrap – 21 Jul 2023

By Charles Macgregor

Lucror Analytics Weekly Wraps provide an overview of all Morning Views comments and reports published by our analyst team in the past week, and also showcase a list of the most-read reports.

In this Insight:

and more…

Alpha Auto Group/Lookers: From Done Deal to Uncertain Situation

By Jesus Rodriguez Aguilar

Lookers disclosed that Cinch (largest shareholder with 19.52% stake) plans to vote against the scheme. The shares have dropped to halfway between the pre-offer price and Alpha Auto’s offer.
The shares are pricing a 45% probability of deal completion. This sector has a track record of failed deals, so it is understandable that investors are spooked.
Top Lookers shareholders are keen on selling and an offer from Lithia could well happen. At around 103p I’d be long, as I consider the risk reward is balanced.

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Jul 22

Daily Brief Quantitative Analysis: Hong Kong Buybacks Weekly (Jul 21st): Aia and more

By Smartkarma Daily Briefs | Daily Briefs, Quantitative Analysis

In today’s briefing:

Hong Kong Buybacks Weekly (Jul 21st): Aia, Tencent, Zhongsheng

Hong Kong Buybacks Weekly (Jul 21st): Aia, Tencent, Zhongsheng

By Ke Yan, CFA, FRM

We analyze statistics on top repurchases over one week, one month, one quarter and one year periods ended on Jul 21st based on HKEx daily reports.
In the past 7 days, the top 3 companies that repurchased the most shares from the market were AIA (1299 HK), Tencent (700 HK), Zhongsheng (881 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), CK Asset (1113 HK).

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Jul 22

Daily Brief Event-Driven: Privatization of HMM: Enormous Shares Dilution Risk and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

Privatization of HMM: Enormous Shares Dilution Risk
Alpha Auto Group/Lookers: From Done Deal to Uncertain Situation

Privatization of HMM: Enormous Shares Dilution Risk

By Douglas Kim

The Korean government has initiated the M&A privatization of HMM, the largest container shipping company in Korea.
We are Negative on the shares of HMM Co., Ltd. (011200 KS) in the next 6-12 months. We expect additional 20% to 30%+ downside risk on HMM in this period.
Although HMM has a strong balance sheet, more investors are likely to emphasize on the negatives including excessive share dilution risk and worsening environment for the global shipping industry.

Alpha Auto Group/Lookers: From Done Deal to Uncertain Situation

By Jesus Rodriguez Aguilar

Lookers disclosed that Cinch (largest shareholder with 19.52% stake) plans to vote against the scheme. The shares have dropped to halfway between the pre-offer price and Alpha Auto’s offer.
The shares are pricing a 45% probability of deal completion. This sector has a track record of failed deals, so it is understandable that investors are spooked.
Top Lookers shareholders are keen on selling and an offer from Lithia could well happen. At around 103p I’d be long, as I consider the risk reward is balanced.

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Jul 22

Daily Brief Industrials: HMM Co., Ltd., Voltronic Power Technology and more

By Smartkarma Daily Briefs | Daily Briefs, Industrials

In today’s briefing:

Privatization of HMM: Enormous Shares Dilution Risk
Voltronic Power: Rising Up the Ranks

Privatization of HMM: Enormous Shares Dilution Risk

By Douglas Kim

The Korean government has initiated the M&A privatization of HMM, the largest container shipping company in Korea.
We are Negative on the shares of HMM Co., Ltd. (011200 KS) in the next 6-12 months. We expect additional 20% to 30%+ downside risk on HMM in this period.
Although HMM has a strong balance sheet, more investors are likely to emphasize on the negatives including excessive share dilution risk and worsening environment for the global shipping industry.

Voltronic Power: Rising Up the Ranks

By Steven Holden

Ownership levels in Voltronic Power Technology rise as EM funds open new positions.
A record 15.7% of EM long-only funds own a position, with Wasatch and Morgan Stanley among the high conviction holders.
Voltronic Power Technology is now the 12th most widely owned stock in Taiwan and the 7th most overweighted company.

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Jul 22

Daily Brief Macro: Out of the Box #12: What if the deacceleration of EZ inflation starts to outpace that of the US? and more

By Smartkarma Daily Briefs | Daily Briefs, Macro

In today’s briefing:

Out of the Box #12: What if the deacceleration of EZ inflation starts to outpace that of the US?
Equities Watch: Today’s Philly Fed Figures Make For Bullish Reading
CX Daily: Why Temasek Is Steering Clear of China’s Generative AI Stock Frenzy for Now
Commodity Watch – A rebound in the most cyclical asset class?
Portfolio Watch: Timing the Beta Exit

Out of the Box #12: What if the deacceleration of EZ inflation starts to outpace that of the US?

By Emil Moller

With the disinflation narrative starting to catch momentum, a long-awaited process that we have anticipated would kick in late Q1 or early Q2, we are back on track for a global economic cooldown.
Central bankers are slowly but surely conceding to inflation being the last war and as they shift their primary focus shifts toward keeping the bottom up on the economy and avoiding the nasty R-word to spread.
Recently Knot in ECB has turned his back on the hawk line which is the first step toward an actual pivot as hardliners need to cede ground to the doves in the council:Chart 1: ECB Governing Council: Knot moving toward Center, more to follow?

Equities Watch: Today’s Philly Fed Figures Make For Bullish Reading

By Ulrik Simmelholt

Welcome to this fourth release in our “Business Cycle Week”, where, besides addressing the just released Philadelphia Fed Manufacturing Survey, we’ll probe the probability for a cyclical rebound and assess the implications for equities in particular.
Take away: Divergence in soft and hard data has scared the outlook for earnings in US industrials the most. Equity betas to soft and hard data show an interesting discrepancy. Long US industrials vs short German industrials look interesting here. 2 reasons for PMI bullishness, 2 reasons for PMI bearishness.
This week has been all about our ‘business cycle week’ here at Steno Research and for this one we’ll zoom in on both soft and hard data from the manufacturing sector and put it into an equity perspective.

CX Daily: Why Temasek Is Steering Clear of China’s Generative AI Stock Frenzy for Now

By Caixin Global

Temasek /: Why Temasek is steering clear of China’s generative AI stock frenzy for now
Kissinger /: Xi praises Kissinger’s ‘historic contribution’ to U.S.-China ties
Private /: China vows to create a ‘bigger, better, and stronger’ private sector

Commodity Watch – A rebound in the most cyclical asset class?

By Andreas Steno

Welcome to the final series of our “Business Cycle Week”, where we cover how a possible rebound in manufacturing might affect asset markets, and if markets are already starting to position for it.
Commodities is the only asset class we need to tick off, and what a way to end the business cycle week with the most cyclical asset of them all, looking to benefit the most from a rebound in manufacturing.
Commodities have had a rough 2022 (and start of 2023) as USD strength and a lack of Chinese demand have held commodities prices down, despite the scarcity that characterizes the market currently.

Portfolio Watch: Timing the Beta Exit

By Emil Moller

Hello Everyone and welcome back to our weekly Portfolio Watch! Quite an interesting week here leading up to central bank decisions and as per usual we will be all over it.
Goldilocks data keeps coming in but we fear markets may be a bit stretched on risk appetite, and as a result, we have closed our AI FOMO trade today.
Besides getting out of the AI we have entered a Commodity long, taken profits on USDCNY long, and added a UST steepener.

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Jul 22

Daily Brief Financials: Digital Realty Trust and more

By Smartkarma Daily Briefs | Daily Briefs, Financials

In today’s briefing:

Digital Realty Trust: A Dividend Growth Investor’s Pal

Digital Realty Trust: A Dividend Growth Investor’s Pal

By Pearl Gray Equity and Research

Digital Realty Trust, Inc. is executing a phenomenal strategy, with additional pipeline developments coming online soon.
Digital Realty is faced with cyclical valuation concerns, we think they will be short-lived.
Digital Realty Trust, Inc. (NYSE:DLR) presents an interesting talking point

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Jul 22

Daily Brief United States: Digital Realty Trust, Copper, OpGen and more

By Smartkarma Daily Briefs | Daily Briefs, United States

In today’s briefing:

Digital Realty Trust: A Dividend Growth Investor’s Pal
Commodity Watch – A rebound in the most cyclical asset class?
OpGen – Feasibility milestone from FIND collaboration

Digital Realty Trust: A Dividend Growth Investor’s Pal

By Pearl Gray Equity and Research

Digital Realty Trust, Inc. is executing a phenomenal strategy, with additional pipeline developments coming online soon.
Digital Realty is faced with cyclical valuation concerns, we think they will be short-lived.
Digital Realty Trust, Inc. (NYSE:DLR) presents an interesting talking point

Commodity Watch – A rebound in the most cyclical asset class?

By Andreas Steno

Welcome to the final series of our “Business Cycle Week”, where we cover how a possible rebound in manufacturing might affect asset markets, and if markets are already starting to position for it.
Commodities is the only asset class we need to tick off, and what a way to end the business cycle week with the most cyclical asset of them all, looking to benefit the most from a rebound in manufacturing.
Commodities have had a rough 2022 (and start of 2023) as USD strength and a lack of Chinese demand have held commodities prices down, despite the scarcity that characterizes the market currently.

OpGen – Feasibility milestone from FIND collaboration

By Edison Investment Research

OpGen has announced that Curetis (its German subsidiary) has met its objectives agreed under its extended R&D collaboration with FIND (a global non-profit alliance for diagnostics), triggering a $0.2m milestone payment to OpGen. Under the expanded scope of the feasibility study for the Unyvero A30 RQ platform, OpGen was required to provide three more deliverables: an antimicrobial stewardship module, a ‘data everywhere’ concept and next-generation sequencing (NGS) strain analysis. While successful completion of the feasibility stage supports Unyvero A30’s applicability in low-to-middle income countries (LMICs), it also paves the way for a subsequent R&D agreement with FIND in developing LMIC-specific Unyvero A30 antimicrobial resistance (AMR) solutions. We await further details from management on the next potential steps of the collaboration.

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Jul 22

Daily Brief South Korea: HMM Co., Ltd. and more

By Smartkarma Daily Briefs | Daily Briefs, South Korea

In today’s briefing:

Privatization of HMM: Enormous Shares Dilution Risk

Privatization of HMM: Enormous Shares Dilution Risk

By Douglas Kim

The Korean government has initiated the M&A privatization of HMM, the largest container shipping company in Korea.
We are Negative on the shares of HMM Co., Ltd. (011200 KS) in the next 6-12 months. We expect additional 20% to 30%+ downside risk on HMM in this period.
Although HMM has a strong balance sheet, more investors are likely to emphasize on the negatives including excessive share dilution risk and worsening environment for the global shipping industry.

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Jul 22

Daily Brief Japan: Nippon Paint Holdings, Tokyo Stock Exchange Tokyo Price Index Topix and more

By Smartkarma Daily Briefs | Daily Briefs, Japan

In today’s briefing:

Nippon Paint (Part I): A Deep Dive into NP’s Japan Business
Growth in Corporate Value over Longer Term Is More Important than Meeting Immediate Listing Criteria

Nippon Paint (Part I): A Deep Dive into NP’s Japan Business

By Shifara Samsudeen, ACMA, CGMA

This is the First of a series of reports on Nippon Paint Holdings (4612 JP) and in this insight, we deep dive into the company’s Japanese business.
The automotive coating biz in Japan is heavily reliant on the domestic automotive market while decorative paints is facing challenges due to slowdown in population in the country.
The outlook for Japan biz remains stagnant with growth rates slowing down and margins on a downward trend.

Growth in Corporate Value over Longer Term Is More Important than Meeting Immediate Listing Criteria

By Aki Matsumoto

Largest 500 companies in prime market of 1,800 companies account for 90% of the market capitalization, which shows how low the listing standard of JPY10 billion tradable market capitalization is.
It’s more important to implement measures that will grow corporate value over the medium-t0-long term than whether or not the market capitalization standard can be achieved by March 2025.
Since companies that choose standard market at market reclassification include companies that don’t want to resolve corporate governance issues, more companies in standard market won’t be proactive in corporate governance.

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