Smartkarma Daily Briefs, Author at Smartkarma

Jul 21

Daily Brief Financials: Rakuten Securities, Federal Bank, Aon and more

By Smartkarma Daily Briefs | Daily Briefs, Financials

In today’s briefing:

Rakuten Securities IPO: The Bull Case
Federal Bank QIP – Well Flagged Deal but the Last One Didn’t Do Well
Aon PLC: Can The New Pricing Platform Be A Game Changer? – Key Drivers

Rakuten Securities IPO: The Bull Case

By Arun George

Rakuten Securities (RAKUSEC JP), a leading Japanese online brokerage, seeks to raise US$500 million. Rakuten Bank (5838 JP) (80.01%) and Mizuho Financial Group (8411 JP) (19.99%) are its shareholders.
Rakuten Securities has grown its business by pursuing a low-cost, high-volume strategy. It has the largest number of non-consolidated securities accounts among Japanese securities companies.
The key elements of the bull case rest on rapid customer growth, low-cost fees, market share gains, synergies with the Rakuten ecosystem and improving profitability trends.

Federal Bank QIP – Well Flagged Deal but the Last One Didn’t Do Well

By Sumeet Singh

Federal Bank (FB IN) aims to raise around US$370m via a QIP to increase its Tier-1 capital.
The deal is well flagged as the company had earlier obtained board approval for a fundraising and had guided towards a funding raising in FY24.
In this note, we talk about the deal dynamics and run the deal through our ECM framework.

Aon PLC: Can The New Pricing Platform Be A Game Changer? – Key Drivers

By Baptista Research

Aon delivered a mixed result in the recent quarter, with revenues above market expectations, but it failed to surpass the analyst consensus in terms of earnings.
For the entire year 2023, as well as for the long term, Aon’s management anticipates organic revenue growth in the mid-single digits or higher.
Aon Business Services is still a major driver of margin expansion and offers a competitive edge, particularly in an inflationary market.

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Jul 21

Most Read: Data#3 Ltd, Wisdom Marine Lines, Ecopro Co Ltd, Samsung Sds, Lasertec Corp, Invincible Investment, Lalatech Holdings Co Ltd, Nidec Corp, Rakuten Securities, Luoyang Xinqianglian Slewing Bearings and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

S&P/ASX200 Ad Hoc Index Rebalance & Update to Potential Changes in September
Yuanta ETFs Rebalance Preview: Soaring Stocks, Rising Shorts; AI Beats Shipping
What We Know Until Now About L&F & Ecopro BM’s Kospi Transfer Listing
Important Rule Changes in Block Deals Pre-Disclosure in Korea: Analyzing Trading Dynamics
Lasertec (6920) – The State of Things May Be Different Than You Think
Invincible Investment Corp Placement – Decent Accretion Despite the Large Dilution
Lalatech IPO: The Bear Case
Nidec (6594) | Big Revision Down to E-Axle Sales
Rakuten Securities IPO: The Bull Case
Quiddity Primer for CSI 300/500 Index Rebalance Events

S&P/ASX200 Ad Hoc Index Rebalance & Update to Potential Changes in September

By Brian Freitas

Ventia (VNT AU) will replace Blackmores Ltd (BKL AU) in the S&P/ASX 200 (AS51 INDEX) at the close on 21 July.
The ad hoc change will lead to changes in the list of potential adds and deletes at the regular scheduled rebalance in September.
Weebit Nano Ltd (WBT AU) is now a potential add in September and could see some pre-positioning in the near future.

Yuanta ETFs Rebalance Preview: Soaring Stocks, Rising Shorts; AI Beats Shipping

By Brian Freitas

Using data from the close on 19 July, there could be 5 changes to the Yuanta/P-Shares Taiwan Top 50 ETF and 2 deletions for the Yuanta/P-Shares Taiwan Dividend Plus ETF.
Stocks that are expected to benefit from the AI revolution could gain ETF inclusion while shipping stocks are the ones expected to be deleted from the ETF.
There has been a huge increase in shorts on some of the potential inclusions and on most of the potential deletions. That will affect how stocks trade near term.

What We Know Until Now About L&F & Ecopro BM’s Kospi Transfer Listing

By Sanghyun Park

Yonhap News reported on the exclusive coverage of Ecopro BM and L&F’s KOSPI transfer listing.
L&F announced through the disclosure that they are considering the KOSPI transfer listing. Ecopro BM told another local news outlet that they are not currently reviewing the KOSPI transfer listing.
It seems that L&F’s KOSPI transfer listing is almost a confirmed fact. However, the Ecopro company in question may be Ecopro Co, not Ecopro BM.

Important Rule Changes in Block Deals Pre-Disclosure in Korea: Analyzing Trading Dynamics

By Sanghyun Park

Insiders holding more than 10% of SO must disclose block deals 30 days in advance if they plan to sell more than 1% of SO or an amount exceeding ₩5B.
The trading window and pricing range for short positions, based on the assumption of deal-taking, will likely vary significantly as the timing of price reflection will see a drastic change.
There is an increasing likelihood that major shareholders will accelerate their planned block deals and bring them to the market in abundance before October.

Lasertec (6920) – The State of Things May Be Different Than You Think

By Travis Lundy

Lasertec (6920) is a shoo-in for Nikkei 225 inclusion in September according to the quantitative analysis. The amount to buy is a small multiple of ADV, making the inclusion “unimpressive.”
It is probably worth looking at the details of ownership, of volume, and of relationship to other stocks in the same general sector.
It is also worth thinking about flow channels (stock up or down changes flows) and forward fundamental calculations.

Invincible Investment Corp Placement – Decent Accretion Despite the Large Dilution

By Sumeet Singh

Invincible Investment (8963 JP) plans to raise around US$230m to fund the acquisition of six hotel assets in Japan.
The stock has done well over the past year and so have most of its deals which we have covered in the past.
In this note, we talk about the deal dynamics and run the deal through our ECM framework.

Lalatech IPO: The Bear Case

By Arun George

Lalatech Holdings Co Ltd (LALA HK), a leading logistics transaction platform, has filed for an HKEx IPO to raise US$1 billion, according to press reports.
In Lalatech IPO: The Bull Case, we highlighted the key elements of the bull case. In this note, we outline the bear case.
The key elements of the bear case rest on market share pressure, KPIs declining growth, declining revenue visibility, maiden profitability built on a shaky foundation and barely positive underlying FCF.

Nidec (6594) | Big Revision Down to E-Axle Sales

By Mark Chadwick

Nidec reported strong Q1 results – operating profit of ¥60.2 billion (+35% YoY), significantly above Street expectations of ¥45 billion
The big positive was a rebound in profitability following successful structural cost cuts last year. The key negative is a cut to unit shipments for key growth driver, E-axles.
We remain bearish for now given valuation of 25x EV/EBIT. We are not sure that the new growth driver in Motion & Energy will offset lowered expectations for EVs.

Rakuten Securities IPO: The Bull Case

By Arun George

Rakuten Securities (RAKUSEC JP), a leading Japanese online brokerage, seeks to raise US$500 million. Rakuten Bank (5838 JP) (80.01%) and Mizuho Financial Group (8411 JP) (19.99%) are its shareholders.
Rakuten Securities has grown its business by pursuing a low-cost, high-volume strategy. It has the largest number of non-consolidated securities accounts among Japanese securities companies.
The key elements of the bull case rest on rapid customer growth, low-cost fees, market share gains, synergies with the Rakuten ecosystem and improving profitability trends.

Quiddity Primer for CSI 300/500 Index Rebalance Events

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.
During the periodic index rebalance events, a large number of stocks move into or out of these indices giving rise to significant flow events and attractive trading opportunities.
In this insight, we take a brief look at the index selection methodology and the historical price and volume performance of the CSI 300/500 index rebalance baskets.

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Jul 20

Daily Brief Singapore: Neu Battery Materials and more

By Smartkarma Daily Briefs | Daily Briefs, Singapore

In today’s briefing:

NEU Battery Materials Scores US$3.7M for Sustainable Recycling of Li-Ion Batteries

NEU Battery Materials Scores US$3.7M for Sustainable Recycling of Li-Ion Batteries

By e27

NEU Battery Materials, a Singapore-based lithium-ion battery recycling startup, has secured US$3.7 million in an oversubscribed seed funding round led by SGInnovate.
ComfortDelGro Ventures, Shift4Good, Paragon Ventures I, and other angel investors also joined.
These funds will accelerate the deployment of NEU Battery Materials’s automated recycling line, which will lower operational manpower requirements.

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Jul 20

Daily Brief United States: USD, MillerKnoll, Immix Biopharma Inc and more

By Smartkarma Daily Briefs | Daily Briefs, United States

In today’s briefing:

FX Watch: Have FX Markets Sniffed out an Upcoming Rebound?
MillerKnoll, Inc. – Refreshing Estimates and Presenting New Model
Immix Biopharma – IMX-110 interim results in colorectal cancer

FX Watch: Have FX Markets Sniffed out an Upcoming Rebound?

By Andreas Steno

Welcome to the second research piece in our “Business Cycle Week”.
In this edition of the series on the business cycle, we will focus on whether FX markets sniff out the cycle ahead of other asset markets.
Is the USD a bellwether of global trends or is it just a saying?

MillerKnoll, Inc. – Refreshing Estimates and Presenting New Model

By Water Tower Research

Herein we revise and update MLKN estimates following MillerKnoll’s FY23 earnings report and FY24 guidance.
Our 1QFY24 diluted non-GAAP EPS estimate is now $0.20, down $0.10 from our previous (reduced) $0.30 estimate.
Our FY24 annual estimate is now $1.82 (down from $2.00), below the midpoint of the $1.70-$2.00 management outlook.

Immix Biopharma – IMX-110 interim results in colorectal cancer

By Edison Investment Research

Immix has shared interim data from the Phase Ib/IIa trial evaluating IMX-110 in combination with tislelizumab for solid tumors. As of the data cut-off (7 July 2023), it was found that three of four participants with metastatic colorectal cancer (mCRC) showed tumor shrinkage and one of four experienced tumor control; all patients had stage IV relapsed/refractory (r/r) mCRC and had received a median eight lines of prior therapy. Dose escalation is proceeding, and dosing of the second cohort of patients in the Phase Ib portion of this study is complete. The higher dose cohort (Cohort 3) of patients with solid tumors is currently being enrolled, aiming to establish the recommended Phase II dose. With no severe adverse events reported to date, and with the early signs of efficacy, we believe these results are encouraging for the clinical development of IMX-110. We anticipate a steady flow of data readouts throughout H223 and FY24.

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Jul 20

Daily Brief Australia: Imugene Ltd, Essential Metals, Carly Holdings and more

By Smartkarma Daily Briefs | Australia, Daily Briefs

In today’s briefing:

Imugene (IMU AU): Got US Patent for Oncolytic Virotherapy- A Crucial Step Forward for US Entry
Essential Metals/Develop Global: Rock Steady With MinRes Support
Carly Holdings Limited – Fleet Expansion Has Driven Revenue

Imugene (IMU AU): Got US Patent for Oncolytic Virotherapy- A Crucial Step Forward for US Entry

By Tina Banerjee

Imugene Ltd (IMU AU) got US patent for its oncolytic virotherapy CF33 products, including VAXINIA and CHECKVacc. The patent protects the method of composition and use of CF33 until 2037.
Imugene has appointed two-decade experienced Dr Ron Weitzman as Interim Chief Medical Officer. Dr Weitzman’s expertise in solid-tumor and hematologic malignancies is of particular interest for Imugene.
Imugene is actively recruiting patients for its five ongoing clinical trials. The company has a strong balance sheet holding more than A$150 million in cash, providing a runway through 2025.

Essential Metals/Develop Global: Rock Steady With MinRes Support

By David Blennerhassett

At the 20 April Scheme Meeting, Mineral Resources (MIN AU) (with 19.55%) and other shareholders voted against the Tianqi Lithium JV transaction for Essential Metals (ESS AU).
This left Essential in no man’s land until MinRes (presumably) made a move. But on the 3 July, Develop Global (DVP AU) announced a binding Scheme with ESS.
The all-scrip Scheme transaction has the backing of MinRes, which also owns a ~13% stake in Develop. This deal – this time- looks all stitched up.

Carly Holdings Limited – Fleet Expansion Has Driven Revenue

By Research as a Service (RaaS)

Carly Holdings Limited (ASX:CL8) operates a vehicle subscription business, which it launched in March 2019, leveraging existing operations, strategic relationships and technology.
Car subscription allows business and retail customers to pay a single monthly fee to access a car for 30 days or more and is an alternative to purchasing or financing a vehicle.
Carly has attracted larger automotive industry businesses as shareholders, with a model that facilitates sales volumes of new vehicles and delivers a new recurring revenue stream for automotive manufacturers and dealers.

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Jul 20

Daily Brief South Korea: Ecopro Co Ltd, L&F Co Ltd, GS Engineering & Construction and more

By Smartkarma Daily Briefs | Daily Briefs, South Korea

In today’s briefing:

What We Know Until Now About L&F & Ecopro BM’s Kospi Transfer Listing
L&F Considering On Switching Listing from KOSDAQ to KOSPI
GS E&Cㅣ Underground Parking Lot Collapse Incidentㅣ Full-Scale Reconstruction and Rising Risks

What We Know Until Now About L&F & Ecopro BM’s Kospi Transfer Listing

By Sanghyun Park

Yonhap News reported on the exclusive coverage of Ecopro BM and L&F’s KOSPI transfer listing.
L&F announced through the disclosure that they are considering the KOSPI transfer listing. Ecopro BM told another local news outlet that they are not currently reviewing the KOSPI transfer listing.
It seems that L&F’s KOSPI transfer listing is almost a confirmed fact. However, the Ecopro company in question may be Ecopro Co, not Ecopro BM.

L&F Considering On Switching Listing from KOSDAQ to KOSPI

By Douglas Kim

On 19 July, there were local media accounts that L&F Co Ltd (066970 KS) is considering on switching its listing from KOSDAQ to KOSPI.
L&F’s main business involves making cathode active materials for rechargeable batteries.
Despite this positive move, we believe the valuations of L&F have become too high. Its operating margins also worsened from 9.6% in 1Q 2022 to 3.0% in 1Q 2023.

GS E&Cㅣ Underground Parking Lot Collapse Incidentㅣ Full-Scale Reconstruction and Rising Risks

By Heejeong (Hollie) Park

The Ministry of Land, Infrastructure and Transport’s investigation revealed that the collapse of GS E&C’s underground parking lot was due to deficiencies in design, construction, and supervision.
As a response, GS E&C will undergo a comprehensive reconstruction of the entire apartment complex, costing approximately KRW 300 billion, which is equivalent to approximately USD 264 million.
ESG risks have risen due to consumer relations regarding occupational health and safety and risk oversight, with GS E&C’s company risk rating at a ‘very high’ level of 3.1.

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Jul 20

Daily Brief Japan: Invincible Investment, Money Forward, Tokyo Stock Exchange Tokyo Price Index Topix, Rakuten Securities and more

By Smartkarma Daily Briefs | Daily Briefs, Japan

In today’s briefing:

Invincible Investment Corp Placement – Decent Accretion Despite the Large Dilution
Money Forward: Non-BO Margin on a Decline and Upcoming Fee Revision to Have Negative Impact
The Format of the AGM Also Reveals a Part of the Company’s Attitude Toward Its Shareholders
Rakuten Securities IPO Early Look – The Negatives – Growth Has Slowed Down

Invincible Investment Corp Placement – Decent Accretion Despite the Large Dilution

By Sumeet Singh

Invincible Investment (8963 JP) plans to raise around US$230m to fund the acquisition of six hotel assets in Japan.
The stock has done well over the past year and so have most of its deals which we have covered in the past.
In this note, we talk about the deal dynamics and run the deal through our ECM framework.

Money Forward: Non-BO Margin on a Decline and Upcoming Fee Revision to Have Negative Impact

By Shifara Samsudeen, ACMA, CGMA

Money Forward (3994 JP) reported 2QFY11/2023 results yesterday. Revenue increased 43.5% YoY to ¥7.3bn (vs consensus ¥7.18bn) while operating losses dropped to ¥1.58bn vs ¥2.15bn in 2QFY11/22 (vs consensus ¥1.65bn).
2Q revenues were within its guidance of ¥7.1-7.4bn and MF has revised its FY11/23E guidance upward based on the progress made during the first half of the year.
MF’s non-BO business margins continue to decline, and the plan to revise price plans for sole proprietors in December should result in attrition and further increase in advertising spend.

The Format of the AGM Also Reveals a Part of the Company’s Attitude Toward Its Shareholders

By Aki Matsumoto

Even if attendance increases somewhat since 92.1% of AGMs in 2022 had less than 100 attendees, the reluctance to hold an online voting AGM due to technical issues isn’t reasonable.
With 84.8% of companies having Q&A sessions lasting less than 30 minutes, many companies want to end their Q&A sessions in as short a time as possible.
Companies that want to keep Q&A sessions short tend to hold hybrid on-site and online sessions that can prioritize questions from on-site attendees and limit questions from online participants.

Rakuten Securities IPO Early Look – The Negatives – Growth Has Slowed Down

By Sumeet Singh

Rakuten Securities, the online securities arm of Rakuten, aims to raise around US$500m (estimated) in its Japan listing.
It is the largest online securities firm in Japan with a 33.7% market share. In FY22, it had over 8.64m accounts, with around JPY18.2tn (US$131bn) of assets under custody.
In this note, we talk about the not-so-positive aspects of the deal.

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Jul 20

Daily Brief China: Lalatech Holdings Co Ltd, Hysan Development Co, Yibin City Commercial Bank Co Ltd, iQIYI Inc, Rookie International, Greenland Holdings Corp and more

By Smartkarma Daily Briefs | China, Daily Briefs

In today’s briefing:

Lalatech IPO: The Bear Case
Hysan Dev. 14 HK: Lack of Visible Catalyst with Low Trading Liquidity, Limited Re-Rating Potential
Yibin City Commercial Bank Pre-IPO Tearsheet
[iQIYI (IQ US, BUY, TP US$6.25) Rating Change]: Competitive Advantage Is Established, Raise to BUY
Rookie International Pre-IPO Tearsheet
Morning Views Asia: Greenland Holdings Corp, Sunny Optical Technology Group

Lalatech IPO: The Bear Case

By Arun George

Lalatech Holdings Co Ltd (LALA HK), a leading logistics transaction platform, has filed for an HKEx IPO to raise US$1 billion, according to press reports.
In Lalatech IPO: The Bull Case, we highlighted the key elements of the bull case. In this note, we outline the bear case.
The key elements of the bear case rest on market share pressure, KPIs declining growth, declining revenue visibility, maiden profitability built on a shaky foundation and barely positive underlying FCF.

Hysan Dev. 14 HK: Lack of Visible Catalyst with Low Trading Liquidity, Limited Re-Rating Potential

By Jacob Cheng

In this insight, we conducted fundamental analysis and look at major share price drivers for Hysan Development, who is a major landlord in Hong Kong
Hysan Development has a simple business model and owns a retail/office portfolio in Causeway Bay, Hong Kong. Its retail properties are largely tourist-centric
Despite trading at attractive valuation, the stock has low trading liquidity. Also there is no visible catalyst which means there is little chance for re-rating for the stock

Yibin City Commercial Bank Pre-IPO Tearsheet

By Clarence Chu

Yibin City Commercial Bank Co Ltd (1315463D CH) is looking to raise around US$300m in its upcoming Hong Kong IPO. The bookrunners on the deal are CCBI and ICBC.
Yibin City Commercial Bank (YCCB) is a city commercial bank in Yibin, Sichuan Province of China.
As per CBIRC Yibin Office, it was the largest bank in Yibin in terms of total assets as of Dec 22.

[iQIYI (IQ US, BUY, TP US$6.25) Rating Change]: Competitive Advantage Is Established, Raise to BUY

By Shawn Yang

We raise iQIYI’s membership/ads growth in 2Q23 from 12.9%/10.6% to 15.7%/22.4% YoY because of high quality content and recovery of major advertisers.
We upgrade iQIYI’s rating to BUY because:1) iQIYI exhibits advantages in content quality and production capabilities. 2) Major advertisers are expected to increase their advertising budgets continuously.
Emergency of mini drama is another variable for the Chinese online video industry. However, we anticipate the impact on iQIYI is relatively limited currently.

Rookie International Pre-IPO Tearsheet

By Ethan Aw

Rookie International (1962144D CH) is looking to raise at least US$100m in its upcoming HK IPO. The deal will be run by Citic Securities and CMBI.
Rookie International is a fully-integrated operator of childrenswear brands in Greater China. It operates a portfolio of childrenswear brands, by designing, manufacturing and distributing branded products in Greater China.
It generates revenue primarily by selling licensed products which it has self-designed or curated under the brands (for which it has access to licenses) in Greater China.

Morning Views Asia: Greenland Holdings Corp, Sunny Optical Technology Group

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.

Greenland Holdings Corp
Sunny Optical Technology Group

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Jul 20

Daily Brief ECM: Invincible Investment Corp Placement – Decent Accretion Despite the Large Dilution and more

By Smartkarma Daily Briefs | Daily Briefs, ECM

In today’s briefing:

Invincible Investment Corp Placement – Decent Accretion Despite the Large Dilution
L&F Considering On Switching Listing from KOSDAQ to KOSPI
Lalatech IPO: The Bear Case
Yibin City Commercial Bank Pre-IPO Tearsheet
Rookie International Pre-IPO Tearsheet
Rakuten Securities IPO Early Look – The Negatives – Growth Has Slowed Down

Invincible Investment Corp Placement – Decent Accretion Despite the Large Dilution

By Sumeet Singh

Invincible Investment (8963 JP) plans to raise around US$230m to fund the acquisition of six hotel assets in Japan.
The stock has done well over the past year and so have most of its deals which we have covered in the past.
In this note, we talk about the deal dynamics and run the deal through our ECM framework.

L&F Considering On Switching Listing from KOSDAQ to KOSPI

By Douglas Kim

On 19 July, there were local media accounts that L&F Co Ltd (066970 KS) is considering on switching its listing from KOSDAQ to KOSPI.
L&F’s main business involves making cathode active materials for rechargeable batteries.
Despite this positive move, we believe the valuations of L&F have become too high. Its operating margins also worsened from 9.6% in 1Q 2022 to 3.0% in 1Q 2023.

Lalatech IPO: The Bear Case

By Arun George

Lalatech Holdings Co Ltd (LALA HK), a leading logistics transaction platform, has filed for an HKEx IPO to raise US$1 billion, according to press reports.
In Lalatech IPO: The Bull Case, we highlighted the key elements of the bull case. In this note, we outline the bear case.
The key elements of the bear case rest on market share pressure, KPIs declining growth, declining revenue visibility, maiden profitability built on a shaky foundation and barely positive underlying FCF.

Yibin City Commercial Bank Pre-IPO Tearsheet

By Clarence Chu

Yibin City Commercial Bank Co Ltd (1315463D CH) is looking to raise around US$300m in its upcoming Hong Kong IPO. The bookrunners on the deal are CCBI and ICBC.
Yibin City Commercial Bank (YCCB) is a city commercial bank in Yibin, Sichuan Province of China.
As per CBIRC Yibin Office, it was the largest bank in Yibin in terms of total assets as of Dec 22.

Rookie International Pre-IPO Tearsheet

By Ethan Aw

Rookie International (1962144D CH) is looking to raise at least US$100m in its upcoming HK IPO. The deal will be run by Citic Securities and CMBI.
Rookie International is a fully-integrated operator of childrenswear brands in Greater China. It operates a portfolio of childrenswear brands, by designing, manufacturing and distributing branded products in Greater China.
It generates revenue primarily by selling licensed products which it has self-designed or curated under the brands (for which it has access to licenses) in Greater China.

Rakuten Securities IPO Early Look – The Negatives – Growth Has Slowed Down

By Sumeet Singh

Rakuten Securities, the online securities arm of Rakuten, aims to raise around US$500m (estimated) in its Japan listing.
It is the largest online securities firm in Japan with a 33.7% market share. In FY22, it had over 8.64m accounts, with around JPY18.2tn (US$131bn) of assets under custody.
In this note, we talk about the not-so-positive aspects of the deal.

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