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Smartkarma Daily Briefs

Jan 20
0

Daily Brief South Korea: Kakao Pay, Jb Financial Group, Korea Stock Exchange Kospi 200 Index, OASIS Corp and more

By | Daily Briefs, South Korea

In today’s briefing:

  • MSCI Korea: Potential Inclusions & Exclusions in February 2023 Highlighted by Locals
  • KOSPI200 Index Rebalance: JB Financial (175330 KS) To Replace Meritz F&M (000060 KS)
  • EQD | KOSPI2 Index: Buy Calls/Call Spreads into CPI Release
  • Oasis Corporation IPO – Peer Comparison – Smallest in Scale but Largest in Profitability

MSCI Korea: Potential Inclusions & Exclusions in February 2023 Highlighted by Locals

By Douglas Kim

  • We discuss the potential inclusions and exclusions in the next MSCI Korea Index rebalance announcement (10 February) that are being highlighted by the locals. 
  • The potential candidates for inclusion in the MSCI Korea Index emphasized by locals in February 2023 include Kakao Pay and Hanwha Aerospace. 
  • The potential exclusion candidates in the MSCI Korea Index emphasized by locals include S-1 Corp, Celltrion Pharm, and Cheil Worldwide. 

KOSPI200 Index Rebalance: JB Financial (175330 KS) To Replace Meritz F&M (000060 KS)

By Brian Freitas

EQD | KOSPI2 Index: Buy Calls/Call Spreads into CPI Release

By Simon Harris

  • Korean equities have recovered from the December sell-off but are still playing catch up versus other Asian indices over the last year
  • We see the upcoming CPI release as an underpriced event in the vol space
  • We consider some cheap derivative strategies on the upside to play the disinflation theme

Oasis Corporation IPO – Peer Comparison – Smallest in Scale but Largest in Profitability

By Ethan Aw

  • OASIS Corp (370190 KS) is looking to raise up to US$166m in its upcoming Korea IPO.
  • Oasis Corporation is an early morning delivery service business that delivers fresh food to consumers. It runs an e-commerce platform named ‘Oasis Market’ as well as offline stores.
  • In our previous notes, we looked at the company’s past performance. In this note, we talk about peer comparison.

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Jan 20
0

Daily Brief Singapore: Olam Group, Blackpanda and more

By | Daily Briefs, Singapore

In today’s briefing:

  • Olam Group (OLG SP): Entering the Final Stages to Unlock Value
  • Cybersecurity Firm Blackpanda Closes US$15M Series A to Deepen Its Asia Presence

Olam Group (OLG SP): Entering the Final Stages to Unlock Value

By Arun George

  • On 10 January, Olam Group (OLG SP) announced the potential IPO of Olam Agri through a dual primary listing in SGX ST and Saudi Arabia as early as 1H2023. 
  • The Olam Agri IPO could raise US$1 billion, according to press reports. Olam will seek shareholder approval at an EGM for the transaction.
  • The IPO marks the final stages of the strategy to unlock value. Our SoTP valuation is S$1.85 per share, a 19% upside to the last close price of S$1.56.

Cybersecurity Firm Blackpanda Closes US$15M Series A to Deepen Its Asia Presence

By e27

  • Singapore-based cybersecurity firm Blackpanda, which specialises in incident response and digital forensics, has secured US$15 million in its Series A funding round.
  • The company will use the capital to expand its technology-enabled cybersecurity services, including digital forensics and incident response.
  • It will also develop its underlying Artificial Intelligence and Machine Learning cybersecurity insurtech platform.

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Jan 20
0

Daily Brief Indonesia: Kalbe Farma and more

By | Daily Briefs, Indonesia

In today’s briefing:

  • Kalbe Farma (KLBF IJ) – Stronger for Longer

Kalbe Farma (KLBF IJ) – Stronger for Longer

By Angus Mackintosh

  • Kalbe Farma (KLBF IJ) remains an interesting proxy for the deepening penetration of healthcare and greater health consciousness in Indonesia through its prescription drugs, consumer health and nutritional products.
  • The company continues to expand its scope if pharmaceutical products into areas such as oncology and biosimilar drugs, as well as growing its exposure BPJS with carefully selected unbranded generics. 
  • Its distribution and logistics business continues to be a growth driver, it onboards new third-party principals. Valuations below 5-year historical average on a PER basis despite higher projected growth ahead. 

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Jan 20
0

Daily Brief India: Pidilite Industries, Avalon Technologies, Vedanta Resources and more

By | Daily Briefs, India

In today’s briefing:

  • Quiddity Final Expectations for NIFTY Mar 23: Pidilite Could Be an Interesting Pre-Event Bet
  • Avalon Technologies Pre-IPO – Sales Concentrated on a Handful. Market Tailwind Could Be Overstated
  • Morning Views Asia: Vedanta Resources, O-Net Technologies (Group)

Quiddity Final Expectations for NIFTY Mar 23: Pidilite Could Be an Interesting Pre-Event Bet

By Janaghan Jeyakumar, CFA

  • With roughly a week left in the reference period, we take a look at the potential ADDs/DELs for the NIFTY 50, 100, and 500 Indices for the March 2023 Rebalance.
  • For NIFTY 50, Pidilite Industries (PIDI IN) is the highest-ranked Potential ADD while Bharat Petroleum Corp (BPCL IN) is the highest-ranked Potential DELETE according to our estimates.
  • In this insight, we take a look at the recent price performance of names that can potentially be involved in index changes and our flow expectations.

Avalon Technologies Pre-IPO – Sales Concentrated on a Handful. Market Tailwind Could Be Overstated

By Clarence Chu

  • Avalon Technologies (6594468Z IN) is looking to raise about US$130m in its upcoming India IPO. The IPO is expected to consist of both a fresh issue and a secondary portion. 
  • Avalon Tech (Avalon) is a vertically integrated electronic manufacturing services (EMS) firm delivering box build solutions in India.
  • As per F&S, the firm is one of the leading domestic EMS companies with end-to-end capabilities offering a full stack product and solution suite.

Morning Views Asia: Vedanta Resources, O-Net Technologies (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.

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Jan 20
0

Daily Brief United States: Aave, Binance Coin, Perpetua Resources Corp and more

By | Daily Briefs, United States

In today’s briefing:

  • Crypto Lending Series #3: Light at the End of the Tunnel?
  • ZaynFi, a Stablecoin Yield Optimiser on BNB Chain, Nets US$600K Funding
  • Perpetua Resources Corp (PPTA) Flash Note Essential US Defense Project ACF Equity Research 19012023

Crypto Lending Series #3: Light at the End of the Tunnel?

By Rose Choy

  • The crypto lending market has been decimated with casualties from both lenders and borrowers after the FTX fallout and credit crisis. 
  • Most centralized lenders have been annihilated while DeFi platforms withstood the shock. The demand for lending has cratered and this will test the viability of existing platforms given lower volumes.
  • However, we will likely see new platforms emerge that have the necessary lending, trading and risk management expertise from traditional finance that could propel further institutional participation in crypto. 

ZaynFi, a Stablecoin Yield Optimiser on BNB Chain, Nets US$600K Funding

By e27

  • ZaynFi, a stablecoin yield optimiser on BNB Chain, has announced a US$600,000 funding led by Cur8 Capital, the venture investing arm of UK-based Islamic Finance Guru.
  • Started by Syakir Hashim and Aziz Zainuddin, ZaynFi is a DeFi protocol that helps users stake stablecoins safely and simply for top-of-the-range returns on the Binance Chain.
  • According to the company, it helps users stake into the best liquidity pools across popular decentralised exchanges, enabling trades to happen while earning trading fees and rewards.

Perpetua Resources Corp (PPTA) Flash Note Essential US Defense Project ACF Equity Research 19012023

By ACF Equity Research

  • ACF identifies PPTA as a US national strategic asset (Sb)and best-in-class gold asset.
  • Sb: Proven & Probable Reserves 148 Mlbs at 0.06% in 104 Mt.
  • Au: Proven & Probable Reserves at 4.8 Moz gold (Au) @ 1.43 g/t.

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Jan 20
0

Daily Brief China: Meituan, Tencent, Health And Happiness (H&H), Shenzhen International, Asymchem Laboratories, Vedanta Resources and more

By | China, Daily Briefs

In today’s briefing:

  • Quiddity Primer for HSTECH Rebalance Events
  • Tencent: Gaming on the Road to Recovery
  • Health & Happiness (1112 HK): Up 100% Since Nov. 2022. Still Awaiting a Re-Rating Upside
  • Shenzhen Intl (152 HK): Numerous Drivers in Place to Boost FY23
  • Hong Kong CEO & Director Dealings (20 Jan): Asymchem Labs, Honbridge, Flat Glass, Gushengtang
  • Morning Views Asia: Vedanta Resources, O-Net Technologies (Group)

Quiddity Primer for HSTECH Rebalance Events

By Janaghan Jeyakumar, CFA

  • The Hang Seng Tech Index (HSTECH INDEX) represents the 30 largest technology companies listed in Hong Kong which have high business exposure to certain technology themes.
  • This index was launched in 2020 and has gained significant passive tracking over the last two years.
  • In this insight, we take a brief look at the selection criteria and the historical price performance of past Rebalance Events.

Tencent: Gaming on the Road to Recovery

By Shifara Samsudeen, ACMA, CGMA

  • China’s gaming regulator granted publishing licenses to 88 video games including three licenses to Tencent (for Undawn, Alchemy Stars and Yuan Meng Zhi Xing) and one for NetEase (for Badlanders).
  • In December, NPPA gave approvals to 84 new domestic games and 44 imported games suggesting the 18-month long crackdown on the sector is nearing an end.
  • Tencent’s online games revenue declined YoY for three consecutive quarters with regulatory hurdles and drop in ranking of key titles but we expect an improvement going into 2023.

Health & Happiness (1112 HK): Up 100% Since Nov. 2022. Still Awaiting a Re-Rating Upside

By Devi Subhakesan

  • Despite the steep stock rebound following a strong recovery in sales, stock attracts modest valuations in line with Infant milk players. Re-rating potential exists from valuing high-growth segments differently.
  • Strong growth in Adult Nutrition and Pet products fueled overall sales. Baby Nutrition sales growth is muted and accounts for less than half of total sales (vs 2/3rd in 2020).
  • Stock rebound triggered by a recovery in Sep. quarter sales thanks to its diverse product portfolio, and prospects of a revival in cross-border trade following China opening its borders.

Shenzhen Intl (152 HK): Numerous Drivers in Place to Boost FY23

By Osbert Tang, CFA

  • Share price of Shenzhen International (152 HK) started slow in this year, but it is on course for stronger earnings in FY23, following a dip in last year. 
  • Upside from logistics business, benefits to Shenzhen Expressway (548 HK) on border re-opening, potential massive contribution from logistics parks transformation and upgrading and lack of Shenzhen Airlines’ drag are drivers. 
  • ROE is expected to rebound to 11-12% in next two years, returning to FY20-21 level. Back then, its average P/B was 0.68x, suggesting at least 31% upside from 0.52x currently. 

Hong Kong CEO & Director Dealings (20 Jan): Asymchem Labs, Honbridge, Flat Glass, Gushengtang

By David Blennerhassett

Morning Views Asia: Vedanta Resources, O-Net Technologies (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.

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Jan 20
0

Daily Brief Japan: Anycolor, Fanuc Corp, Aoyama Trading, Tokyo Stock Exchange Tokyo Price Index Topix and more

By | Daily Briefs, Japan

In today’s briefing:

  • Anycolor (5032 JP) Shareholder Structure Now And Future
  • Fanuc (6954) | Bullish on Robots
  • Fewer but Better Suits from Aoyama and Its Competitors
  • If ESG Is Related to Improved Corporate Value, Doesn’t Slow ROE Imply Stalled in Real ESG Efforts?

Anycolor (5032 JP) Shareholder Structure Now And Future

By Travis Lundy

  • Anycolor (5032 JP) is conducting a Secondary Offering so that three major pre-IPO shareholders can sell their shares. Legend Capital, Skyland Ventures, and Highsino Group are selling.
  • That should bring minimum publicly-traded longs to 6.3685mm shares, but it could easily be higher. 
  • Based on the most conservative read of all the data, Real World Float is a net 21.2% after this offering. In reality, probably higher. But there’s still overhang.

Fanuc (6954) | Bullish on Robots

By Mark Chadwick

  • Fanuc is a core structural growth stock that has fallen by -4% over the past year. We turn bullish with 8 days to earnings
  • We believe that Fanuc is a key beneficiary of continued investment in automation and realignment of supply chains globally
  • We focus on Fanuc’s core value drivers – revenue, margins, risk and investment – and see 25% upside for long term investors

Fewer but Better Suits from Aoyama and Its Competitors

By Michael Causton

  • Fewer people wear suits as a regular office uniform and there are also fewer working age Japanese.
  • Combined with the fact that more people work from home some days a week, this has meant a drastic decline in suit sales
  • In response, the big retailers are exploiting the growing popularity of custom and premium suits but the shift won’t offset the decline.

If ESG Is Related to Improved Corporate Value, Doesn’t Slow ROE Imply Stalled in Real ESG Efforts?

By Aki Matsumoto

  • Japanese companies need to resolve these issues in future, as evidenced by the fact that they have only just begun to resolve issues related to human rights and human capital.
  • There is risk that less accurate disclosure of ESG initiatives may emerge in future. Attention will be focused on annual securities reports that have mandate to include sustainability-related information.
  • The slow growth in ROE raises concerns that ESG efforts are not progressing as expected or are being formally mended, but have not improved enough to positively impact corporate value.

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Jan 19
0

Daily Brief Energy/Materials: Nickel Industries Ltd, Seadrill Ltd and more

By | Daily Briefs, Energy & Materials Sector

In today’s briefing:

  • Nickel Industries Placement – Deepening Ties, Rising Short Interest Likely to Support Deal Price
  • SDRL: A Sea of Profits, Initiating

Nickel Industries Placement – Deepening Ties, Rising Short Interest Likely to Support Deal Price

By Clarence Chu

  • Nickel Industries Ltd (NIC AU) is looking to raise US$185m with the majority of proceeds used to acquire 10% interests in nickel producing assets within the Indonesia Morowali Industrial Park.
  • The Indonesia Morowali Industrial Park is part of its ongoing collaboration with Tsinghan Group, a private Chinese nickel and stainless steel producer.
  • In this note, we will talk about the firm’s track record and run the deal through our ECM framework.

SDRL: A Sea of Profits, Initiating

By Hamed Khorsand

  • We are initiating coverage of Seadrill Ltd. (SDRL) with a Buy Rating and $50 target.
  • SDRL emerged from Chapter 11 bankruptcy protection in February 2022 and its shares began trading on the NYSE in October 2022
  • The current environment for drill ships is supportive for the business with day rates rising over the past year. With expectation of no new ship builds to saturate anytime soon

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Jan 19
0

Daily Brief Macro: CX Daily: Liu He Says China’s Economy Will Get Back to Normal in 2023 and more

By | Daily Briefs, Macro

In today’s briefing:

  • CX Daily: Liu He Says China’s Economy Will Get Back to Normal in 2023
  • UK: Slower Inflation Is Still Excessive
  • EA: Energised HICP Drop into 2023

CX Daily: Liu He Says China’s Economy Will Get Back to Normal in 2023

By Caixin Global

  • New bank aims to shore up Chinese province’s corruption-plagued rural lenders

  • Liu He says China’s economy will get back to normal in 2023. 

  • Chinese authorities seize fake Paxlovid anti-Covid pills. 

UK: Slower Inflation Is Still Excessive

By Phil Rush

  • UK inflation eased in Dec-22 to 10.5% and 13.4% on the CPI and RPI, broadly matching expectations. Clothing and games cheapened, offset by hospitality prices.
  • High wage growth is stoking service prices, sustaining underlying inflationary pressures at levels consistent with a headline pace nearer 6% than the 2% target.
  • We still expect the BoE to keep forcefully leaning against problematic second-round effects with another 50bp rate hike in Feb-23 ahead of critical wage settlements.

EA: Energised HICP Drop into 2023

By Phil Rush

  • The final EA HICP inflation print confirmed the flash fall to 9.2% on German energy. Energy seems set to drive another decline in Jan-23, thereby surprising the consensus.
  • Inflationary pressures narrowed in Dec-22. Nonetheless, underlying inflation is consistent with the headline rate settling between two and three times the target.
  • Tight labour markets still threaten how swiftly this excess inflation might end. The ECB is naturally concerned and should hike by another forceful 50bp in Feb-23.

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Jan 19
0

Daily Brief Credit: Lippo Karawaci – Tear Sheet – Lucror Analytics and more

By | Credit, Daily Briefs

In today’s briefing:

  • Lippo Karawaci – Tear Sheet – Lucror Analytics

Lippo Karawaci – Tear Sheet – Lucror Analytics

By Trung Nguyen

On 11 January 2023, Lippo Karawaci (LPKR) launched a cash tender offer for the USD 405 mn LPKRIJ 8.125% 25 and USD 417 mn LPKRIJ 6.75% 26. The early tender consideration for the 2025 and 2026 notes is USD 870 and USD 770 per USD 1,000 principal, respectively. The company will fund the tender offer with an IDR 6.0 tn (c. USD 380 mn) seven-year amortising secured credit facility by two local banks. The total tender amount will be up to the size of the credit facility (which is secured over land and some buildings).

We recommend to tender the USD LPKRIJ 2025 and 2026 notes. The amount of secured debt will increase significantly if the transaction is completed, and will likely account for the majority of LPKR’s total debt. The offering prices are somewhat in line with market prices. Hence, it is better to tender the notes, as the bonds may have lower recovery values.

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