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Smartkarma Daily Briefs

Jul 02
0

Daily Brief Energy/Materials: JSR Corp, Talos Energy Inc, Earthstone Energy and more

By | Daily Briefs, Energy & Materials Sector

In today’s briefing:

  • (Mostly) Asia-Pac Weekly Risk Arb Wrap: DDH1/Perent, NWS, Mandala Multifinance, JSR Corp, Silk Laser
  • Talos Energy, Inc. – Value Creation Catalysts
  • Earthstone Energy, Inc – Delaware Expansion Adds Quality Inventory

(Mostly) Asia-Pac Weekly Risk Arb Wrap: DDH1/Perent, NWS, Mandala Multifinance, JSR Corp, Silk Laser

By David Blennerhassett

Talos Energy, Inc. – Value Creation Catalysts

By Water Tower Research

  • Talos’s current valuation implies a steep discount to net asset value (NAV).

  • Management estimates the company’s year- end 2022 pro forma proved reserves have a gross PV-10 value of ~$5.5 billion (~$4.8 billion net of asset retirement obligations [ARO]) based on oil and natural gas prices of $75/bbl and $3.50/Mcf.

  • Adjusting for March 31, 2023, balance sheet items, leaves an estimated NAV of ~$3.6 billion, or $28.38/share.

Earthstone Energy, Inc – Delaware Expansion Adds Quality Inventory

By Water Tower Research

  • Earthstone announced an agreement to acquire Novo Oil & Gas Holdings LLC for $1.5 billion on June 15, 2023.

  • Concurrently, Northern Oil & Gas will acquire a pro rata one-third of the assets for $500 million from Earthstone, resulting in a net purchase price of $1.0 billion.

  • The transaction is expected to close in 3Q23 and will have an effective date of May 1, 2023.

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Jul 02
0

Daily Brief Consumer: Ace Hardware Indonesia, Xpeng, Tokyo Stock Exchange Tokyo Price Index Topix, Culp Inc and more

By | Consumer, Daily Briefs

In today’s briefing:

  • Ace Hardware Indonesia (ACES IJ) – Reasons to Be Helpful
  • [XPeng Inc. (XPEV US, BUY, TP US$13.7) Target Price Change]: Buy on More Visibility of Future Growth
  • Learning Through Engagement Takes a Certain Period of Time to Show Results
  • Culp, Inc. – 4QFY23: Results Beat Estimates; Trends Improve in Mattress Fabrics

Ace Hardware Indonesia (ACES IJ) – Reasons to Be Helpful

By Angus Mackintosh

  • Ace Hardware Indonesia is starting to see the seeds of recovery come through in SSSG through April and May and should get a further boost from its BOOM sale.
  • The company has resumed its store opening with plans for 13 new stores this year and a new store concept being rolled out across existing stores providing a potential boost. 
  • Ace Hardware Indonesia has a more cohesive digital strategy and has taken on its first brand ambassadors to boost millennial demand. Valuations remain attractive. 

[XPeng Inc. (XPEV US, BUY, TP US$13.7) Target Price Change]: Buy on More Visibility of Future Growth

By Shawn Yang

  • We are more positive on G6’s potential due to attractive pricing and higher conversion rate brought by nationwide availability of display vehicles. 
  • The success of G6 will add visibility of its growth due to the shared architecture.  We reiterate a rebound of sales momentum starting from 2Q23, driven by: 
  • 1) increased order intake of P7i and G6; 2) faster channel expansion than its peers. We raise our TP to US$ 13.7. Our TP implies 2.5x PS.

Learning Through Engagement Takes a Certain Period of Time to Show Results

By Aki Matsumoto

  • 8 years after the introduction of Corporate Governance Code and “Ito Report,” which showed the relationship between P/B and ROE as the cornerstone of management, few companies improved their management.
  • Companies with sustained share price growth were executing excellent growth policies and IR disclosures that were likely learned from their engagement with overseas investors.
  • It takes a certain period of time for a company to learn through engagement, for the results to show up in improved management, and for other investors to notice it.

Culp, Inc. – 4QFY23: Results Beat Estimates; Trends Improve in Mattress Fabrics

By Water Tower Research

  • Beat expectations. After market close on June 28, Culp reported 4QFY23 results that exceeded expectations.

  • Total revenues were $61.4 million, beating our $54 million estimate and consensus of $55.5 million.

  • On the bottom line, the company’s EPS of ($0.38) beat our ($0.50) estimate and consensus of ($0.45).

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Jul 02
0

Daily Brief Financials: HDFC Bank, Cardano and more

By | Daily Briefs, Financials

In today’s briefing:

  • Index Rebalance & ETF Flow Recap: KQ150, LQ45, PCOMP, HDFC/HDFCB, Delta Electronics, Redox IPO, AMFI
  • Q2 Liquidity Ranking for Crypto Assets

Index Rebalance & ETF Flow Recap: KQ150, LQ45, PCOMP, HDFC/HDFCB, Delta Electronics, Redox IPO, AMFI

By Brian Freitas

  • The review period for a bunch of indices ended last week though the announcement of the changes will take 4-6 weeks.
  • There are no rebalance implementations in the coming week though focus will move to the implementation of the HDFC Limited/ HDFC Bank merger and index changes the following week.
  • There were big inflows to China focused ETF with a lot of money going into Semiconductor and Chip focused ETFs.

Q2 Liquidity Ranking for Crypto Assets

By Kaiko

  • Towards the end of last year, I published the first liquidity ranking system for crypto assets, comparing each asset’s liquidity ranking to its market cap and investigating which token’s market cap is the most misleading from a liquidity standpoint.
  • In Q1 of this year I provided an update to the ranking system as overall market liquidity hit 10 month lows. 
  • The good news is that global liquidity has been more or less flat over Q2, with no further drops apart from  the tokens featured in the SEC lawsuits and a handful of exchange-specific drops in liquidity, such as Binance.US.

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Jul 01
0

Daily Brief Australia: Aristocrat Leisure and more

By | Australia, Daily Briefs

In today’s briefing:

  • Aristocrat Leisure: Buy of NeoGames &  New Asian Focus Reinforces a Long Term Bullish Outlook

Aristocrat Leisure: Buy of NeoGames &  New Asian Focus Reinforces a Long Term Bullish Outlook

By Howard J Klein

  • The gaming equipment and systems leader offers line of new Dragon themed slot machines for upcoming Year of the Dragon as spear point of expanded Asian goals.
  • Acquisition of Israel’s NeoGames at US$1b follows failed bid last year to acquire Playtech. Move will strengthen digital footprint for sports betting and iLottery.
  • We have been bullish for five years on ALL as its shares have outperformed the market.

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Jul 01
0

Daily Brief South Korea: Lunit , Nexteel and more

By | Daily Briefs, South Korea

In today’s briefing:

  • End of Mandatory Lock-Up Periods for 41 Companies in Korea in July 2023
  • Nexteel IPO Preview

End of Mandatory Lock-Up Periods for 41 Companies in Korea in July 2023

By Douglas Kim

  • We discuss the end of the mandatory lock-up periods for 41 stocks in Korea in July 2023, among which 6 are in KOSPI and 35 are in KOSDAQ.
  • These 41 stocks on average could be subject to further selling pressures in June and could underperform relative to the market. 
  • Among these 41 stocks, the top five market cap stocks include Lunit, Sungeel Hitech, KG Mobility, Enchem, and E&D Co. 

Nexteel IPO Preview

By Douglas Kim

  • Nexteel is getting ready to complete its IPO in Korea in August. Nexteel is a steel pipe manufacturing company. The IPO price range is from 11,500 won to 12,500 won. 
  • The IPO offering size is from 80.5 billion won to 87.5 billion won. The expected market cap is from 299 billion won to 325 billion won.
  • Nexteel’s sales increased at a CAGR of 76.4% from 2020 to 2022. The company’s operating profit surged from 1.5 billion won in 2020 to 181.3 billion won in 2022. 

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Jul 01
0

Daily Brief Thailand: STARK Corporation and more

By | Daily Briefs, Thailand

In today’s briefing:

  • Stark Corporation: Not the Guy from the Movie

Stark Corporation: Not the Guy from the Movie

By Warut Promboon

  • STARK Corporation (STARK TB) (Stark) defaulted on its interest payments on 2-June, leading to a default event.
  • Stark’s default has exposed the structural weakness in the Thai bond market which is worth discussion.
  • We do not believe there is a reasonable basis for calculating the bond recovery value at this juncture.

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Jul 01
0

Daily Brief Japan: Tryt Inc, Daio Paper Corp, Sosei Group and more

By | Daily Briefs, Japan

In today’s briefing:

  • Tryt IPO – Thoughts on Valuation – Even with Optimistics Forecasts, The Firm Isn’t Cheap
  • Quiddity Leaderboard JPX-Nikkei 400: Final Predictions for August 2023
  • Sosei Group (4565 JP): Hit Hard by Partner’s Clinical Trial Termination; Need Time to Recover

Tryt IPO – Thoughts on Valuation – Even with Optimistics Forecasts, The Firm Isn’t Cheap

By Clarence Chu

  • Tryt Inc (9164 JP) is looking to raise about US$460m in its Japan IPO.
  • Tryt Inc (Tryt) offers employee placement services and temporary staffing services for the elderly care, nursing care and childcare workers segments.
  • We have looked at the company’s past performance and track record against peers in our earlier notes. In this note, we will discuss our thoughts on valuation.

Quiddity Leaderboard JPX-Nikkei 400: Final Predictions for August 2023

By Janaghan Jeyakumar, CFA

  • The JPX-Nikkei 400 is composed of common stocks listed on the Tokyo Stock Exchange. It is a free-float-adjusted (capped) market-value-weighted index composed of 400 constituents.
  • A periodic review is conducted by the Index providers, the JPX Group and Nikkei Inc, in August every year. We look at the potential forward inclusions and removals every month.
  • Below is a look at potential Inclusions and Removals for the JPX-Nikkei 400 Rebalance to be announced in early August 2023 based on trading data as of end-June 2023.

Sosei Group (4565 JP): Hit Hard by Partner’s Clinical Trial Termination; Need Time to Recover

By Tina Banerjee

  • Sosei Group (4565 JP) shares sold off heavily after a major setback in partner’s clinical trial. On June 26, Pfizer Inc (PFE US) decided to discontinue the development of lotiglipron (PF-07081532).
  • PF-07081532 is one of three clinical candidates nominated by Pfizer during its multi-target drug discovery collaboration with Sosei to research and develop potential new medicines.
  • As lotiglipron was the most advanced clinical candidate using Sosei’s drug discovery platform, the heavy sell-off seen in Sosei shares should not be considered as overreaction.

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Jul 01
0

Daily Brief India: Punjab National Bank, Bharat Petroleum Corp and more

By | Daily Briefs, India

In today’s briefing:

  • Punjab National Bank – Soaring Recoveries, From High NPLs, Pushes Profit Up 5.4x
  • Weekly Wrap – 30 Jun 2023

Punjab National Bank – Soaring Recoveries, From High NPLs, Pushes Profit Up 5.4x

By Daniel Tabbush

  • Bank analysts sometimes like a story with high NPLs; recoveries can be powerful to profit
  • For the past 7 quarters, NPLs are in decline at PNB, but most recent quarter is strongest
  • There remains a large pool of NPLs at 8.7% of loans, for possible ongoing recoveries

Weekly Wrap – 30 Jun 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:

  1. Central China Real Estate
  2. Sino-Ocean Group
  3. China Jinmao Holdings
  4. Lifestyle International Holdings
  5. Geely Auto

and more…

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Jul 01
0

Daily Brief Indonesia: Sumber Alfaria Trijaya Tbk Pt, Bharat Petroleum Corp and more

By | Daily Briefs, Indonesia

In today’s briefing:

  • Sumber Alfaria Trijaya (AMRT IJ) – The Digital Pantry of the Middle Classes
  • Weekly Wrap – 30 Jun 2023

Sumber Alfaria Trijaya (AMRT IJ) – The Digital Pantry of the Middle Classes

By Angus Mackintosh

  • Sumber Alfaria Trijaya (Alfamart) continues to book solid growth in its core mini-market business but is now pushing harder with both larger format Alfamidi and Lawson convenience stores formats.
  • 89%-Owned Midi Utama Indonesia (Alfamidi) recently announced a rights issue to finance the expansion of Alfamidi and Lawson underpinning its more aggressive expansion plans. 
  • Sumber Alfaria Trijaya booked solid 1Q2023 numbers for its core business and continues to grow its digital connections and collaborations as an integral offline leg of the digital economy. 

Weekly Wrap – 30 Jun 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:

  1. Central China Real Estate
  2. Sino-Ocean Group
  3. China Jinmao Holdings
  4. Lifestyle International Holdings
  5. Geely Auto

and more…

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  • ✓ Unlimited Research Summaries
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  • ✓ Custom Watchlists
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  • ✓ Events & Webinars
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Jul 01
0

Daily Brief China: Koolearn, Bharat Petroleum Corp and more

By | China, Daily Briefs

In today’s briefing:

  • Koolearn (1797 HK): Dimmer Outlook Not yet Priced In
  • Weekly Wrap – 30 Jun 2023

Koolearn (1797 HK): Dimmer Outlook Not yet Priced In

By Eric Chen

  • We cautioned investors about the excessive optimism around the company’s growth potential a few months ago.
  • Its growth momentum has since rapidly diminished, at a pace that also surprises us and points to a dimmer outlook.
  • Despite rounds of downward earnings revision, we still see further downside risks to earnings. We expect 20-30% decline in share price by end of this year.

Weekly Wrap – 30 Jun 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:

  1. Central China Real Estate
  2. Sino-Ocean Group
  3. China Jinmao Holdings
  4. Lifestyle International Holdings
  5. Geely Auto

and more…

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Sign Up for Free

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  • ✓ Unlimited Research Summaries
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  • ✓ Custom Watchlists
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  • ✓ Events & Webinars
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