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Smartkarma Daily Briefs

Jul 14
0

Daily Brief Credit: Morning Views Asia: Azure Power Global Ltd and more

By | Credit, Daily Briefs

In today’s briefing:

  • Morning Views Asia: Azure Power Global Ltd

Morning Views Asia: Azure Power Global Ltd

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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Jul 14
0

Most Read: Celltrion Inc, Rakuten Group , Ecopro Co Ltd, Canon Inc, IMAX China Holding, Fast Retailing, Patanjali Foods, Tryt Inc and more

By | Daily Briefs, Most Read

In today’s briefing:

  • The Fast Retailing (9983) Selldown Conundrum – Not Now, But Soon… Then For A Long Time
  • Celltrion Merger Announcement in July: Trading Angles Utilizing Appraisal Rights Exercise Dynamics
  • July TOPIX FFW Rebal – Bigger Than Expected
  • Korea – A Look at Ecopro, Kumyang & JYP Entertainment
  • Canon (7751) Buyback Almost Done, TPX Selldown to Come = Trade Vs Ricoh or Basket
  • IMAX China (1970 HK): Parent Privatisation
  • Fast Retailing UPs Forecasts, Which Creates A Sell/Short Opportunity
  • Patanjali Foods FPO – Very Well Flagged with a Decent Discount
  • Ohayo Japan| Lower Rates, Higher Stocks; Crypto Optimism; NUGGET: Hydrogen Future – KHI(7012)Revisit
  • TRYT IPO: Valuation Updates

The Fast Retailing (9983) Selldown Conundrum – Not Now, But Soon… Then For A Long Time

By Travis Lundy

  • Fast Retailing (9983 JP) announced Q2 earnings two weeks ago. Revenues were good. OP was good. And the company raised full-year forecasts for Sales, OP, Pre-tax, and Net Profit.
  • The stock popped sharply. It isn’t “cheap” but it is under-owned, actively. And revenues up 20%yoy is a very good look.  
  • The Conundrum: the more active investors decide they like it, the more there is to sell. That creates interesting opportunities.

Celltrion Merger Announcement in July: Trading Angles Utilizing Appraisal Rights Exercise Dynamics

By Sanghyun Park

  • According to Invest Chosun, Celltrion plans to submit a merger registration statement to the KRX in July, with Mirae Asset Securities acting as the lead underwriter.
  • Given that the approximate timing of the merger registration statement submission has already been exposed to the market, we can track the difference between the spot and exercise prices.
  • Celltrion Inc will likely attempt to minimize the appraisal rights price. We can consider capitalizing on this possibility by shorting Celltrion Inc while going long on the other two companies.

July TOPIX FFW Rebal – Bigger Than Expected

By Travis Lundy

  • Last Friday, the FFW changes for the TOPIX July Free Float Weight Review were announced. There have also been other recent announcements creating flows on 30 July.
  • Some of these other recent announcements represent a possible change in ad hoc methodology.
  • Total Flow for 30 July is ~$3.3bn a side driven by selling flows (3/4 of the buy flows are reverse funding). $2.1bn of selling is > 3 days ADV.

Korea – A Look at Ecopro, Kumyang & JYP Entertainment

By Brian Freitas

Canon (7751) Buyback Almost Done, TPX Selldown to Come = Trade Vs Ricoh or Basket

By Travis Lundy

  • Canon Inc (7751 JP) announced a second buyback this fiscal year on 15 June. As discussed here previously, Canon buybacks are short, sharp, and sweet. 
  • The recent one should be done imminently (15 May start ended 13 July). 16 June start? (Note: Canon reports buyback results at 3pm local time, and did not report today).
  • This time we have a double-setup with buyback ending and a large TOPIX sell on Canon on 28 July. 

IMAX China (1970 HK): Parent Privatisation

By David Blennerhassett

  • This morning (13 July), IMAX China Holding (1970 HK) announced a take-private transaction from its parent IMAX Corp (IMAX US) at HK$10/share.
  • The Offer price is a 9.65% premium to last close but a 39.47% premium over the closing price on the last full trading day. Evidently, there was news leakage.
  • IMAX US holds  71.63% in IMAX China, therefore the blocking stake at the Schene Meeting is 2.837% of shares out. 

Fast Retailing UPs Forecasts, Which Creates A Sell/Short Opportunity

By Travis Lundy

  • Fast Retailing (9983 JP) investors are in a conundrum. The stock is doing well. With one quarter to go, the company just raised its full-year EPS target by 8.3%.
  • It also raised its H2 dividend by 20+% so the full-year div will be more than 20% higher than previously forecast and up 35+% since last year. All good. 
  • Except for the selling. Potentially lots of selling. And more outperformance begets more selling. Then even more selling in 2024. And 2025? What about 2025? More outperformance begets more selling.

Patanjali Foods FPO – Very Well Flagged with a Decent Discount

By Sumeet Singh

  • The promoters of Patanjali Foods aim to sell up to 9% of the company via an FPO. 
  • The sale is being done so as to increase the firm’s public shareholding to the minimum required 25% imposed by SEBI.
  • We have looked at the background of the deal in our earlier note, in this note we talk about the recent update and run the deal through our ECM framework.

Ohayo Japan| Lower Rates, Higher Stocks; Crypto Optimism; NUGGET: Hydrogen Future – KHI(7012)Revisit

By Mark Chadwick

  • OVERSEAS.  Disinflation Trade on as US PPI provides more tailwinds; Rates, USD Fall; Equites rally, More China Stimulus Coming ? Ripple resolution spurs Crypto bid; AI Wars: Meta Updates BARD
  • JAPAN. Nikkei Futures +1% vs Cash; USDJPY 138; Set for Beta bid in Stocks; Blow out Fast Retailing numbers; Barclays see Sept BOJ tweek; Bullish Bank Initiations from UBS
  • NUGGET.  Hydrogen is a key part of JP Govt carbon zero strategy. We see KHI(7012) as a Hydrogen winner and see the recent pullback as a good entry opportunity

TRYT IPO: Valuation Updates

By Shifara Samsudeen, ACMA, CGMA

  • TRYT has priced its IPO at ¥1,200 per share, at the midpoint of the indicative IPO price range, at a market capitalisation and post-money EV of ¥120bn and ¥151.6bn respectively.
  • In our previous insight, we compared the company’s implied trailing multiples with peer trailing multiples and concluded that TRYT’s IPO is overvalued at the above price range.
  • In this insight, we have discussed our forecasts for Tryt Inc (9164 JP) and updated our valuation for the company.

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Jul 13
0

Daily Brief India: Vedanta Resources and more

By | Daily Briefs, India

In today’s briefing:

  • Vedanta Resources – Event Flash – Rumours Of Debt Exchange – Lucror Analytics

Vedanta Resources – Event Flash – Rumours Of Debt Exchange – Lucror Analytics

By Trung Nguyen

Vedanta Resources Ltd is widely reported to be exploring asset-liability management related to the USD bonds due in 2024 and 2025. The plan apparently involves: [1] repaying USD 500 mn of the secured USD 1 bn 13.875% January 2024 notes, while rolling the remaining principal into the unsecured USD 9.25% 2026 notes; [2] converting the USD 950 mn 6.125% August 2024 notes into new secured notes due in 2026; and [3] redeeming USD 250 mn of the USD 1.2 bn 2025 notes, while exchanging the remaining principal into a new bond due in 2027.

The proposal might not be well-received by the affected bondholders, who would likely expect full repayment at maturity. We move to “Hold” on the VEDLN notes from “Buy”.

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Jul 13
0

Daily Brief South Korea: Ecopro Co Ltd, Fadu , Ymc Co Ltd and more

By | Daily Briefs, South Korea

In today’s briefing:

  • Korea – A Look at Ecopro, Kumyang & JYP Entertainment
  • Fadu IPO – Thoughts on Valuation
  • Korea Small Cap Gem #22: YMC (Beneficiary of China’s Restriction of Gallium Exports)

Korea – A Look at Ecopro, Kumyang & JYP Entertainment

By Brian Freitas

Fadu IPO – Thoughts on Valuation

By Ethan Aw

  • Fadu (440110 KS) is looking to raise up to US$147m in its Korean IPO.
  • Fadu is a South Korean fabless semiconductor maker mainly engaged in flash storage technology innovation. Its core products are Enterprise Solid State Drive (SSD) and Enterprise SSDs.
  • In our previous notes, we looked at the company’s past performance and undertook a peer comparison. In this note, we talk about valuation.

Korea Small Cap Gem #22: YMC (Beneficiary of China’s Restriction of Gallium Exports)

By Douglas Kim

  • On 3 July 2023, the Ministry of Commerce of China announced that it will restrict exports of gallium and germanium starting next month.
  • YMC is one of the key beneficiaries in Korea of China’s restriction of gallium exports. YMC makes silicon carbide which can be a substitute material for gallium.
  • YMC’s valuation is relatively cheap. Given that YMC currently has a market cap of 150 billion won, this would represent P/E of 7.3x (using 2022 net profit). 

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Jul 13
0

Daily Brief China: Oriental Watch, Dickson Concepts Intl, InSilico Medicine Cayman TopCo, Longfor Properties and more

By | China, Daily Briefs

In today’s briefing:

  • An Update on Oriental Watch (398 HK)
  • Dickson Concepts: Gleanings From the FY23 Annual Report
  • Pre-IPO InSilico Medicine – AI Pharmaceutical Is Immature; Valuation Expansion Relies on Imagination
  • Morning Views Asia: Anton Oilfield, Central China Securities

An Update on Oriental Watch (398 HK)

By Oriental Value

  • A Review on Final Results Oriental Watch recently announced its earnings for the fiscal year, and the results were quite impressive.
  • On June 20, 2023, the company reported a revenue of HKD3.7 billion and a net profit of HKD295 million.
  • These figures surpassed our initial estimates of HKD3.

Dickson Concepts: Gleanings From the FY23 Annual Report

By Sameer Taneja

  • In my previous insight Dickson Concepts 113 HK: Straight From The Ben Graham Stable, >40% Discount to NCAV, I highlighted why one must explore the stock as a viable investment.
  • NCAV (Net current asset value) in FY23 was 7.5 HKD/share ( Vs. current share price of 4.25 HKD/share), with net cash + ST/LT financial investments now at 9.7 HKD/share. 
  • Absolute DPS ( dividend per share) was 35 cents representing a yield of 8.2% ( payout ratio of 55%). The trailing PE is 6.6x FY23. 

Pre-IPO InSilico Medicine – AI Pharmaceutical Is Immature; Valuation Expansion Relies on Imagination

By Xinyao (Criss) Wang

  • InSilico ’s business model is more of AI-CXO + AI-SaaS, but hasn’t reached the stage of AI-biotech, considering its current revenue streams, which may lead to InSilico ultimately changing its positioning.
  • The significance of pipeline lies in the need for InSilico to verify the effectiveness of AI platforms/algorithms/technology through successful product launch. However, valuation of InSilico could be different from biotech.
  • AI pharmaceutical industry is at its infancy, which is a far cry from current levels of investment and expectations in the sector.We advise investors to be rational about this field.

Morning Views Asia: Anton Oilfield, Central China Securities

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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Jul 13
0

Daily Brief Thailand: Bangkok Dusit Medical Services and more

By | Daily Briefs, Thailand

In today’s briefing:

  • Bangkok Dusit Medical Services (BDMS TB): Returning of International Patients Drove 1Q23 Performance

Bangkok Dusit Medical Services (BDMS TB): Returning of International Patients Drove 1Q23 Performance

By Tina Banerjee

  • Bangkok Dusit Medical Services (BDMS TB) recorded 4% YoY growth in hospital revenue in 1Q23, driven by higher patient intensity at Center of Excellence (COE) and returning of international patients.
  • However, Thai patient revenues decreased 6% YoY due to a decrease of COVID-19 related revenues, in line with improving COVID-19 situation in Thailand.
  • BDMS targets to increase its bed capacity to ~9,000 beds in 2027 from 8,400 beds in 2022. BDMS targets revenue CAGR of 6–8% during 2023–2025.

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Jul 13
0

Daily Brief Indonesia: Cinema XXI and more

By | Daily Briefs, Indonesia

In today’s briefing:

  • Nusantara Sejahtera Raya (Cinema XXI) IPO – Peer Comparison
  • Nusantara Sejahtera Raya (Cinema XXI) IPO – Thoughts on Valuation

Nusantara Sejahtera Raya (Cinema XXI) IPO – Peer Comparison

By Sumeet Singh

  • Cinema XXI (CINEMA IJ) aims to raise up to US$160m in its Indonesia IPO.
  • Cinema XXI is a premium theatrical exhibition, F&B and experience company. It is the largest cinema chain operator in Indonesia.
  • We have looked at the company’s past performance in our earlier notes. In this note, we will undertake a peer comparison.

Nusantara Sejahtera Raya (Cinema XXI) IPO – Thoughts on Valuation

By Sumeet Singh

  • Cinema XXI (CINEMA IJ) aims to raise up to US$160m in its Indonesia IPO.
  • Cinema XXI is a premium theatrical exhibition, F&B and experience company. It is the largest cinema chain operator in Indonesia.
  • We have looked at the company’s past performance and undertaken a peer comparison in our earlier notes. In this note, we talk about valuations.

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Jul 13
0

Daily Brief United States: S&P 500 INDEX, Colgate Palmolive Co, Marsh & Mclennan Cos and more

By | Daily Briefs, United States

In today’s briefing:

  • EQD | S&P500 E-Mini (ES) DAILY SHORT, Speculative High-Probability Trade
  • Colgate-Palmolive: The Only Game In Town
  • Marsh & McLennan Companies: Expanding Their Business with Acquisitions & Other Drivers

EQD | S&P500 E-Mini (ES) DAILY SHORT, Speculative High-Probability Trade

By Nico Rosti

  • The S&P500 E-Mini (ES) is approaching a DAILY resistance level at a point in time where it could perform a quick reversal – a SHORT trade opportunity.
  • Watch the 4483-4525 price area, today is the 3rd consecutive day up, the reversal could begin in that area, today or tomorrow.
  • The probability for a quick reversal, after 3 days up, in the 4483-4525 price area, is between 67% to 79%, depending on the resistance levels reached.

Colgate-Palmolive: The Only Game In Town

By Vladimir Dimitrov, CFA

  • Colgate-Palmolive’s share price performance over the past few years is not as grim as it might look on the surface.
  • Improving gross margin remains the only game in town for future shareholder returns, according to the company.
  • Colgate-Palmolive Company (NYSE:CL) is rarely seen as an attractive investment opportunity as the company significantly underperformed the S&P 500 and the consumer staples sector in particular over the past 5-year period.

Marsh & McLennan Companies: Expanding Their Business with Acquisitions & Other Drivers

By Baptista Research

  • Marsh & McLennan managed to surpass the revenue expectations as well as the earnings expectations of Wall Street.
  • The company had significant growth in most of its businesses, market sectors, and geographical areas, with Marsh, Guy Carpenter, and Mercer all experiencing faster underlying growth than in the previous quarter.
  • Guy Carpenter’s revenue was $1.1 billion, driven by solid growth in all areas and worldwide specializations, reflecting tighter reinsurance market conditions.

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Jul 13
0

Daily Brief Japan: Rakuten Group , Genda Inc, Takeda Pharmaceutical and more

By | Daily Briefs, Japan

In today’s briefing:

  • July TOPIX FFW Rebal – Bigger Than Expected
  • Genda IPO – Dreams of Reviving the Domestic Arcade Industry with a Roadmap of Doing so as Well
  • Takeda: The Impact of Voluntary Withdrawal of Dengue Vaccine Application in the US Seems Minimal

July TOPIX FFW Rebal – Bigger Than Expected

By Travis Lundy

  • Last Friday, the FFW changes for the TOPIX July Free Float Weight Review were announced. There have also been other recent announcements creating flows on 30 July.
  • Some of these other recent announcements represent a possible change in ad hoc methodology.
  • Total Flow for 30 July is ~$3.3bn a side driven by selling flows (3/4 of the buy flows are reverse funding). $2.1bn of selling is > 3 days ADV.

Genda IPO – Dreams of Reviving the Domestic Arcade Industry with a Roadmap of Doing so as Well

By Clarence Chu

  • Genda Inc (9166 JP) is looking to raise around US$100m in its Japan IPO.
  • Genda develops and operates amusement facilities in Japan, primarily operating under its Genda GiGO Entertainment subsidiary.
  • As of Apr 23, the firm operated 250 amusement facilities domestically and four facilities in Taiwan. 

Takeda: The Impact of Voluntary Withdrawal of Dengue Vaccine Application in the US Seems Minimal

By Shifara Samsudeen, ACMA, CGMA

  • Takeda Pharmaceutical (4502 JP) announced yesterday that the company has voluntarily withdrawn the US Biologic License Application for dengue vaccine candidate (QDENGA) citing issues over data collection.
  • As per Fierce Pharma, the decision to withdraw was due to additional data requested by the FDA which were not captured by Takeda’s Phase 3 TIDES trial.
  • Takeda’s share price dropped more than 2.0% during today’s trade, however, we would not be too concerned as efficacy and safety profiles of the trial has already been established.

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Jul 13
0

Daily Brief TMT/Internet: Fadu , S&P 500 INDEX, Ymc Co Ltd and more

By | Daily Briefs, TMT/Internet

In today’s briefing:

  • Fadu IPO – Thoughts on Valuation
  • EQD | S&P500 E-Mini (ES) DAILY SHORT, Speculative High-Probability Trade
  • Korea Small Cap Gem #22: YMC (Beneficiary of China’s Restriction of Gallium Exports)

Fadu IPO – Thoughts on Valuation

By Ethan Aw

  • Fadu (440110 KS) is looking to raise up to US$147m in its Korean IPO.
  • Fadu is a South Korean fabless semiconductor maker mainly engaged in flash storage technology innovation. Its core products are Enterprise Solid State Drive (SSD) and Enterprise SSDs.
  • In our previous notes, we looked at the company’s past performance and undertook a peer comparison. In this note, we talk about valuation.

EQD | S&P500 E-Mini (ES) DAILY SHORT, Speculative High-Probability Trade

By Nico Rosti

  • The S&P500 E-Mini (ES) is approaching a DAILY resistance level at a point in time where it could perform a quick reversal – a SHORT trade opportunity.
  • Watch the 4483-4525 price area, today is the 3rd consecutive day up, the reversal could begin in that area, today or tomorrow.
  • The probability for a quick reversal, after 3 days up, in the 4483-4525 price area, is between 67% to 79%, depending on the resistance levels reached.

Korea Small Cap Gem #22: YMC (Beneficiary of China’s Restriction of Gallium Exports)

By Douglas Kim

  • On 3 July 2023, the Ministry of Commerce of China announced that it will restrict exports of gallium and germanium starting next month.
  • YMC is one of the key beneficiaries in Korea of China’s restriction of gallium exports. YMC makes silicon carbide which can be a substitute material for gallium.
  • YMC’s valuation is relatively cheap. Given that YMC currently has a market cap of 150 billion won, this would represent P/E of 7.3x (using 2022 net profit). 

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