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Smartkarma Daily Briefs

Feb 03
0

Daily Brief Credit: Morning Views Asia: Lippo Karawaci and more

By | Credit, Daily Briefs

In today’s briefing:

  • Morning Views Asia: Lippo Karawaci
  • Asia HY Monthly – January 2023 – Lucror Analytics

Morning Views Asia: Lippo Karawaci

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.

Asia HY Monthly – January 2023 – Lucror Analytics

By Charles Macgregor

The Asia Monthly focuses on providing updates on recent events, information on new issues and spread movements, as well as summarising our top picks. The Asia Monthly is intended to broaden investors’ understanding of the Asian USD high-yield market.

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Feb 03
0

Daily Brief Crypto: Beneath the Surface of Uniswap Pools: Just-In-Time Liquidity and more

By | Crypto, Daily Briefs

In today’s briefing:

  • Beneath the Surface of Uniswap Pools: Just-In-Time Liquidity

Beneath the Surface of Uniswap Pools: Just-In-Time Liquidity

By Kaiko

  • This piece was originally going to compare the average and median size of liquidity events – meaning any mint (deposit) or burn (withdrawal) to/from a DEX liquidity pool – on the most popular Ethereum DEXs: Uniswap V3, V2, and Curve. 
  • There have been some excellent Twitter threads comparing DEXs and considering whether providing liquidity on Uniswap V3 can be profitable.
  • But after taking a look at the Uniswap V3 liquidity event data, it became clear that I had to write about an under-explored and rapidly developing topic: just-in-time (JIT) liquidity.

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Feb 03
0

Daily Brief Macro: India Watch: Why India Suffers when China Is Open for Business and more

By | Daily Briefs, Macro

In today’s briefing:

  • India Watch: Why India Suffers when China Is Open for Business
  • BoE: Ready to Slow
  • CX Daily: A Metal Tycoon’s Liquidity Woes Disrupt China’s Copper Trade
  • IMF Raises China’s 2023 Growth Forecast to 5.2% as Economy Reopens
  • ECB: Forceful Pre-Commitment

India Watch: Why India Suffers when China Is Open for Business

By Andreas Steno

  • The core Adani Group stocks have gone down 35.7% in the last 5 days
  • The -35.7% hit to Adani Group came just as the company was gearing up to a high-profile follow-on public offering of shares owned personally by the Adani family.
  • As China has reincarnated, data suggests it’s time for India to hand back the manufacturing reins.

BoE: Ready to Slow

By Phil Rush

  • The BoE hiked by another 50bps in Feb-23, as expected. Pay settlements and services inflation are too high to tolerate, although two members voted for no change again.
  • Inflation’s forecast fall below the target is insufficient to stop hikes when the skew is so high. Stable energy prices could keep inflation above 2% in 2-3 years. 
  • We maintain our call for two more 25bp rate hikes, leaning against excessive wages. Reanchoring expectations depends on monetary policy’s path, justifying frontloading.

CX Daily: A Metal Tycoon’s Liquidity Woes Disrupt China’s Copper Trade

By Caixin Global

  • In Depth: A metal tycoon’s liquidity woes disrupt China’s copper trade

  • China warns incoming Czech leader over call with Taiwan’s Tsai

  • China’s factory activity shrinks for sixth straight month, Caixin PMI shows

IMF Raises China’s 2023 Growth Forecast to 5.2% as Economy Reopens

By Caixin Global

  • The International Monetary Fund (IMF) raised its estimate for China’s GDP growth this year to 5.2% from a 4.4% projection made in October
  • The expected rebound will moderate in 2024 however, with the pace of expansion slowing to 4.5% before settling at under 4% over the medium term amid shrinking business dynamism and slow progress on structural reforms
  • China’s GDP rose 3% in 2022, the first time in over four decades that the country’s growth fell below the global average according to the IMF.

ECB: Forceful Pre-Commitment

By Phil Rush

  • The ECB followed through with another 50bps rate hike and restated a pre-commitment to do so again in March. Underlying inflationary pressures remain too high. 
  • Upside inflation risks have become more balanced in the EA, unlike the UK, but the high modal outlook justifies more tightening. Subsidised energy prices are no reason to stop.
  • We maintain our call for March’s 50bp ECB hike to be the last forceful one, with a 25bp deposit rate hike in May taking it to a 3.25% peak.

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Feb 03
0

Daily Brief Equity Bottom-Up: Xiaomi(1810.HK): Huawei’s Restrictions (Another) Signal of More to Come and more

By | Daily Briefs, Equity Bottom-Up

In today’s briefing:

  • Xiaomi(1810.HK): Huawei’s Restrictions (Another) Signal of More to Come
  • SONY (6758) | Re-Acceleration of Growth in Games
  • KakaoBank- The Only One
  • Kyocera (6971 JP): Massive Downward Revision
  • Meta Platforms 4Q22: Zuckerberg Got Religion?
  • Z Holdings (Neutral) – Q3 22 Results Reaction: Lofty EBITDA Targets Cut on Erosion in Core Business
  • Praj Industries: Today’s Unimaginable Is Tomorrows Conventional Wisdom
  • Takeda: Top Line Beats Consensus, Steady Pipeline Progress and Further Upside
  • China Shineway Pharmaceutical (2877.HK) – Some Points Worth the Attention
  • KDDI (Buy) – Q3 22 Results Reaction: Super Mobile but Full-Year Targets Look Challenging

Xiaomi(1810.HK): Huawei’s Restrictions (Another) Signal of More to Come

By Shawn Yang

  • Likely new 4G restrictions will delay Huawei’s ability to launch mid-range offerings at volume. Xiaomi stands to gain 1.2ppts of share in 2024 vs. our prior forecast. 
  • However, new limits are long-term negative, as it (1) raises the chance for cascading limits on China 3Cs; (2)  triggers reduced 3C electronics demand; (3) weaker industry electronics demand.
  • The impact of the latest set of restrictions will likely prove net negative, in our view, as a result we re-iterate our SELL rating and HK$7.3 TP.

SONY (6758) | Re-Acceleration of Growth in Games

By Mark Chadwick

  • Sony’s Q3 operating profit fell 8% YoY to Y428b beating consensus estimates by around 15%
  • The PS5 has now sold over 32m units, finally shaking off supply constraints. Will VR2 surprise?
  • We remain bullish on the stock at 15x earnings. Sony is a core play on content creation and digitization.

KakaoBank- The Only One

By Daniel Tabbush

  • There is only one large, liquid, listed, internet bank in all of the Asia-Pacific markets
  • Earnings have been strong, with uplift in NIM and loan balance to support this
  • Regulatory change to provisioning not likely to affect this bank, but big peers

Kyocera (6971 JP): Massive Downward Revision

By Scott Foster

  • Kyocera cut FY Mar-23 operating profit guidance by more than 30% while leaving sales guidance unchanged. Draw your own conclusions about the reliability of company forecasts.
  • Sales began to decline in 3Q and the rate of decline is likely to increase in 4Q. There is a large inventory overhang.
  • The shares dropped 3% today. Wait for capitulation as the reality of recession sinks in.

Meta Platforms 4Q22: Zuckerberg Got Religion?

By Aaron Gabin

  • Meta lowered 2023 expense guide by $5B (or 5%)  to $89bn-$95bn and capex guide by $4B (or 11%) to $30bn-$33bn
  • Metaverse spending continues, META lost $4.3B on $700M in revenue this quarter and losses are expected to accelerate in 2023. 
  • Zuck said the word efficiency 18x and AI 15x…Evidently, these are his priorities!

Z Holdings (Neutral) – Q3 22 Results Reaction: Lofty EBITDA Targets Cut on Erosion in Core Business

By Kirk Boodry

  • Management has cut its FY23 EBITDA target from its long-term goal of ¥390bn to c. ¥363bn as its core ad and eCommerce performance gets weaker
  • Advertising revenue fell 1% YoY whilst eCommerce volumes (GTV) on the core third-party marketplace Yahoo!Shopping were also down significantly
  • The outlook for FY23 is further blurred by management changes to address business challenges and deeper LINE/Yahoo integration.  We are lowering our target price to ¥425

Praj Industries: Today’s Unimaginable Is Tomorrows Conventional Wisdom

By Nurture Capital Advisory

  • Robust medium-term earnings growth, softness in commodities to ease margin pressure.
  • Beneficiary of new energy capex, likely blending of Compressed Biogas with CNG furthers capex outlook.
  • Stock has corrected 45% from peak, valuations turn more reasonable.

Takeda: Top Line Beats Consensus, Steady Pipeline Progress and Further Upside

By Shifara Samsudeen, ACMA, CGMA

  • Takeda Pharmaceutical (4502 JP)  reported 3QFY03/2023 results today. Reported revenue increased 11.2% YoY to JPY1,096.6bn (vs consensus JPY996bn) while OP increased 26.2% YoY to JPY147bn (vs consensus JPY180.1).
  • The drop in OP vs consensus was mainly due to the depreciation of the Yen, nevertheless, OPM improved 30bps to 13.4% during the quarter.
  • Takeda has not revised full-year forecast, however, we think the company will easily beat its own guidance as it pushes forward with its development pipeline further aided by M&A.

China Shineway Pharmaceutical (2877.HK) – Some Points Worth the Attention

By Xinyao (Criss) Wang

  • Shineway released good turnover data in 22Q1-Q3. Due to large market demand for COVID-related TCM, 22Q4 performance would remain strong growth momentum, leading to positive outlook of 2022 annual report.
  • With the peak of respiratory disease outbreak past and COVID-19 also begins to be under control, demand for related TCM would weaken. Accordingly, the pullback of share price could begin.
  • Strong performance of Shineway’s share price may not be sustainable in long term. Shineway is no longer cheap at current valuation. While short-term catalysts remain, future upside may become limited. 

KDDI (Buy) – Q3 22 Results Reaction: Super Mobile but Full-Year Targets Look Challenging

By Kirk Boodry

  • Core mobile revenue fell 4% but that is an improvement from 7-8% declines over the last few quarters and including value-added sales (VAS), retail mobile spend is up
  • Competitive challenges remain with elevated churn and visible declines in roaming revenue from Rakuten (although sequential change has been modest)
  • KDDI has kept guidance for FY22 operating income growth unchanged despite unanticipated expenses for rising fuel costs and the July network failure

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Feb 03
0

Daily Brief Australia: Bank Of Queensland, Oh Baby Games, Aft Pharmaceuticals, Paradigm Biopharmaceuticals, Rent.com.au Ltd and more

By | Australia, Daily Briefs

In today’s briefing:

  • Bendigo Adelaide Bank & Bank of Queensland’s Rumoured Merger
  • A $6m Bet to Mix Crypto and Traditional Gaming
  • AFT Pharmaceuticals – Portfolio expansion with new in-licensing deal
  • Paradigm Biopharma – Funded past near-term inflection points
  • Rent.com.au Ltd – Good Cost Control in the Face of Seasonal Weakness

Bendigo Adelaide Bank & Bank of Queensland’s Rumoured Merger

By David Blennerhassett

  • The Aussie local press is discussing renewed merger talks for Bendigo And Adelaide Bank (BEN AU) and Bank Of Queensland (BOQ AU).
  • Talks of a merger are not new. And we have been here before when BOQ twice made overtures to Bendigo in 2007, but was rejected. 
  • The swift removal of BOQ’s CEO, a lifetime high ratio – BEN/BOQ – and ANZ (ANZ AU)‘s tilt for Suncorp Bank – suggests a merger makes a lot of sense.

A $6m Bet to Mix Crypto and Traditional Gaming

By Tech in Asia

  • Oh Baby Games said it’s working on an arcade racer that features recognizable figures. Called What The Kart, the company’s first blockchain-powered game will feature personalities from Crypto Twitter
  • The startup said What The Kart will also feature streamers and different communities across the Crypto Twitter sphere.
  • The game aims to mix recognizable characters with the tried-and-tested Mario Kart racing formula

AFT Pharmaceuticals – Portfolio expansion with new in-licensing deal

By Edison Investment Research

AFT Pharmaceuticals continues to strengthen its R&D pipeline with the announced in-licensing agreement with Latitude Pharmaceuticals (a US-based contract research organisation) to develop antibiotic eye drops to treat serious eye infections. The formulation is already approved to treat bacterial infections, including those caused by the antibiotic-resistant MRSA bacteria. The IP relates to an aqueous stable formulation of this treatment. Eye care is a key focus for AFT (contributing over 20% of the group’s revenue, per our estimate) and we expect this new asset to complement the existing portfolio. AFT plans to launch around 65 new products in Australasia before 2025 and a robust R&D pipeline will be key to delivering this. The development programme will be covered by AFT’s budgeted R&D expenditure of c NZ$12m per year for FY23 and FY24.

Paradigm Biopharma – Funded past near-term inflection points

By Edison Investment Research

Cash flow figures from Paradigm Biopharmaceuticals’ latest update show that it remains funded past key near-term inflection points. In Q223, management reported a net cash outflow from operating activities of A$7.8m (A$17.8m for the first six months of FY23), including an A$7.4m R&D tax incentive rebate, and no capital expenditure. R&D expenditure increased 54% q-o-q to A$13.2m, corresponding with ongoing recruitment and site identification for the pivotal PARA_OA_002 Phase III trial of iPPS in knee osteoarthritis and an increase in other clinical activities. With cash of A$83.9m at end Q223 and at the current quarterly burn rate (adjusted for the non-recurring R&D tax incentive, A$15.2m), management estimates that operations are funded into 2024 (5.5 quarters), past important clinical milestones in Paradigm’s osteoarthritis programme in 2023.

Rent.com.au Ltd – Good Cost Control in the Face of Seasonal Weakness

By Research as a Service (RaaS)

  • Rent.com.au Limited (ASX:RNT) is a purpose-led company seeking to empower home renters through their rental profile, rental bond and payments, and through a growing number of aligned transactional services.
  • The company has reported a positive Q2 operating cashflow of $0.385m due to a $0.68m R&D tax credit.
  • The underlying result demonstrated good cost control in the face of a seasonally weaker market and slippage in advertising revenue as a result of tough economic conditions for the home building sector. 

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Feb 03
0

Daily Brief South Korea: Dentium Co Ltd, KakaoBank and more

By | Daily Briefs, South Korea

In today’s briefing:

  • Dentium: An Undervalued Corporate Activist Target + Likely Inclusion Candidate for KOSPI 200 in 2023
  • KakaoBank- The Only One

Dentium: An Undervalued Corporate Activist Target + Likely Inclusion Candidate for KOSPI 200 in 2023

By Douglas Kim

  • We believe Dentium is an attractive stock to own right now. It has an excellent combination of strong growth in sales and profits and discounted valuations.
  • Driven by its strong share price appreciation in the past year, Dentium now has become a strong candidate for a potential inclusion in KOSPI 200 index in 2023.
  • There is a growing probability that Dentium could be targeted by corporate activists to pressure the company to cancel treasury shares and provide higher dividends. 

KakaoBank- The Only One

By Daniel Tabbush

  • There is only one large, liquid, listed, internet bank in all of the Asia-Pacific markets
  • Earnings have been strong, with uplift in NIM and loan balance to support this
  • Regulatory change to provisioning not likely to affect this bank, but big peers

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Feb 03
0

Daily Brief Indonesia: Pertamina Geothermal, Peris.ai, Lippo Karawaci, ABM Investama and more

By | Daily Briefs, Indonesia

In today’s briefing:

  • Pertamina Geothermal Energy IPO – Somewhat like an Energy Explorer. Somewhat like a Power Producer
  • Pertamina Geothermal Energy IPO: Offering Details & Index Inclusion
  • Peris.ai, a Cybersecurity Startup Built by Ritase Co-Founder, Gets East Ventures Backing
  • Morning Views Asia: Lippo Karawaci
  • Asia HY Monthly – January 2023 – Lucror Analytics

Pertamina Geothermal Energy IPO – Somewhat like an Energy Explorer. Somewhat like a Power Producer

By Sumeet Singh

  • Pertamina Geothermal Energy (PGE) is looking to raise around US$650m in its upcoming Indonesia IPO. PGE is an Indonesian state owned power producer which utilizes geothermal energy to produce electricity.
  • PGE currently manages 13 Geothermal Working Areas with a total capacity of 1,877 MW, of which 672 MW is owned by it, while 1,205 MW is via joint operations.
  • In this note, we talk about the company’s financial performance and other issues, based on its recent filings. 

Pertamina Geothermal Energy IPO: Offering Details & Index Inclusion

By Brian Freitas

  • Pertamina Geothermal (0125738D IJ) is offering 10.35bn shares in its IPO at a price range of IDR 820-945/share to raise between US$567-653m and valuing the company between US$2.27-2.61bn.
  • The stock will not get fast entry to the MSCI, FTSE or local Indonesia indices (IDX30 Index/ LQ45 Index/ IDX80 Index).
  • The stock should be added to MSCI Small Cap in May and to the FTSE All-Cap in September bringing in some passive flow.

Peris.ai, a Cybersecurity Startup Built by Ritase Co-Founder, Gets East Ventures Backing

By e27

  • Indonesian cybersecurity-as-a-service startup Peris.ai has raised an undisclosed sum in funding led by East Ventures, with participation from Magic Fund.
  • The startup will use the money to build and enhance its cybersecurity platform, train Machine Learning and AI capabilities, and nurture the ethical hacker community.
  • Peris is supported by a community of more than 1,200 ethical hackers.

Morning Views Asia: Lippo Karawaci

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.

Asia HY Monthly – January 2023 – Lucror Analytics

By Charles Macgregor

The Asia Monthly focuses on providing updates on recent events, information on new issues and spread movements, as well as summarising our top picks. The Asia Monthly is intended to broaden investors’ understanding of the Asian USD high-yield market.

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Feb 03
0

Daily Brief China: Hong Kong Hang Seng Index, Xiaomi Corp, China Longyuan Power, ABM Investama, China Shineway Pharmaceutical and more

By | China, Daily Briefs

In today’s briefing:

  • Quiddity Primer: The Ongoing Evolution of the Hang Seng Index
  • Xiaomi(1810.HK): Huawei’s Restrictions (Another) Signal of More to Come
  • China Longyuan Power (916 HK) – High Probability 22% Rally Confirmed at the January Close
  • Asia HY Monthly – January 2023 – Lucror Analytics
  • China Shineway Pharmaceutical (2877.HK) – Some Points Worth the Attention

Quiddity Primer: The Ongoing Evolution of the Hang Seng Index

By Janaghan Jeyakumar, CFA

  • The Hang Seng Index (HSI INDEX) is a blue-chip index that represents the performance of the large cap stocks listed in the Hong Kong Stock Exchange.
  • The index is undergoing some significant composition changes and the index provider currently uses a highly subjective constituent selection process which is quite challenging to decode.
  • In this insight, we take a look at Quiddity’s approach to solving this Hang Seng constituent selection puzzle and the historical performance of past rebalance events.

Xiaomi(1810.HK): Huawei’s Restrictions (Another) Signal of More to Come

By Shawn Yang

  • Likely new 4G restrictions will delay Huawei’s ability to launch mid-range offerings at volume. Xiaomi stands to gain 1.2ppts of share in 2024 vs. our prior forecast. 
  • However, new limits are long-term negative, as it (1) raises the chance for cascading limits on China 3Cs; (2)  triggers reduced 3C electronics demand; (3) weaker industry electronics demand.
  • The impact of the latest set of restrictions will likely prove net negative, in our view, as a result we re-iterate our SELL rating and HK$7.3 TP.

China Longyuan Power (916 HK) – High Probability 22% Rally Confirmed at the January Close

By David Coloretti, CMT

  • At TMA we deliver high probability outcomes by focusing on our 3 pillars of technical analysis. •1) Response to key levels. •2) Price action. •3) Momentum confirmation.
  • January 2023 confirmed a high probability bullish outlook when all 3 pillars were definitively triggered. 
  • Monthly Relative Strength Index (RSI) has an incredible multi-year history of confirming large upswings in 916 HK. January completed the 5th such bullish confirmation since 2014. Multi-month target at 12.945. 

Asia HY Monthly – January 2023 – Lucror Analytics

By Charles Macgregor

The Asia Monthly focuses on providing updates on recent events, information on new issues and spread movements, as well as summarising our top picks. The Asia Monthly is intended to broaden investors’ understanding of the Asian USD high-yield market.

China Shineway Pharmaceutical (2877.HK) – Some Points Worth the Attention

By Xinyao (Criss) Wang

  • Shineway released good turnover data in 22Q1-Q3. Due to large market demand for COVID-related TCM, 22Q4 performance would remain strong growth momentum, leading to positive outlook of 2022 annual report.
  • With the peak of respiratory disease outbreak past and COVID-19 also begins to be under control, demand for related TCM would weaken. Accordingly, the pullback of share price could begin.
  • Strong performance of Shineway’s share price may not be sustainable in long term. Shineway is no longer cheap at current valuation. While short-term catalysts remain, future upside may become limited. 

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Feb 03
0

Daily Brief Japan: Techno Associe, Nissin Electric, Keisei Electric Railway Co, Sony Corp, Kyocera Corp, Z Holdings, Takeda Pharmaceutical, KDDI Corp and more

By | Daily Briefs, Japan

In today’s briefing:

  • Sumitomo Elec Buys Out Sub Techno Associé) At ¥1,695/Share – Insulting Explanation. Deserves More.
  • Sumitomo Electric Buys Out Sub Nissin Electric (6641) At ¥1,700/Share – ATH But Still Too Low
  • Keisei Electric: Needs Activists to Push the Market
  • Nissin Electric (6641 JP): JPY1,700 Tender Offer from Sumitomo Electric
  • SONY (6758) | Re-Acceleration of Growth in Games
  • Techno Associe (8249 JP): JPY1,695 Tender Offer from Sumitomo Electric
  • Kyocera (6971 JP): Massive Downward Revision
  • Z Holdings (Neutral) – Q3 22 Results Reaction: Lofty EBITDA Targets Cut on Erosion in Core Business
  • Takeda: Top Line Beats Consensus, Steady Pipeline Progress and Further Upside
  • KDDI (Buy) – Q3 22 Results Reaction: Super Mobile but Full-Year Targets Look Challenging

Sumitomo Elec Buys Out Sub Techno Associé) At ¥1,695/Share – Insulting Explanation. Deserves More.

By Travis Lundy

  • Sumitomo Electric Industries (5802 JP) is taking over to subs through tender offers. Both are light. Both this one for Techno Associe (8249 JP) and the one for Nissin Electric.
  • Both deals are light -slightly offensive, but in different ways. The Board decisions are more offensive than the actual prices, but it’s Sumi Elec buying, so those are offensive too.
  • There’s a history here. Sumi Elec went to 51% at an offensively low price (EV/EBITDA below zero) in 2019. But this is probably a done deal anyway.

Sumitomo Electric Buys Out Sub Nissin Electric (6641) At ¥1,700/Share – ATH But Still Too Low

By Travis Lundy

  • Sumitomo Electric Industries (5802 JP) has announced a takeover of two of its subsidiaries today. The larger one is Nissin Electric (6641 JP). 
  • This deal, done for governance purposes, hits an all-time high price. But, like others, it ignores synergies in pricing, has an inadequate premium, and process is just bad.
  • But given the shareholder structure, this is highly likely to sail through un-molested. 

Keisei Electric: Needs Activists to Push the Market

By Oshadhi Kumarasiri

  • We think there’s something fundamentally wrong with Keisei Electric Railway Co (9009 JP)’s current valuation.
  • Its core business with an estimated fair value of ¥720bn, currently has an implied valuation of negative ¥942bn (stub value).
  • If investors can convince the management to dispose its stake in Oriental Land (4661 JP), we think there’s more than a 200% upside to Keisei Electric’s valuation.

Nissin Electric (6641 JP): JPY1,700 Tender Offer from Sumitomo Electric

By Arun George

  • Nissin Electric (6641 JP) has recommended Sumitomo Electric Industries (5802 JP)’s tender offer of JPY1,700 per share, an 22.7% premium to the undisturbed price (2 February).
  • The transaction is a two-step acquisition through a cash tender offer and subsequent squeeze-out. The lower limit of the offer has been set to meet the 66.67% ownership ratio.
  • The tender offer is attractive in comparison to peer multiples and historical price ranges. Excluding the offeror, there are no substantial shareholders. This suggests a done deal. 

SONY (6758) | Re-Acceleration of Growth in Games

By Mark Chadwick

  • Sony’s Q3 operating profit fell 8% YoY to Y428b beating consensus estimates by around 15%
  • The PS5 has now sold over 32m units, finally shaking off supply constraints. Will VR2 surprise?
  • We remain bullish on the stock at 15x earnings. Sony is a core play on content creation and digitization.

Techno Associe (8249 JP): JPY1,695 Tender Offer from Sumitomo Electric

By Arun George

  • Techno Associe (8249 JP) has recommended Sumitomo Electric Industries (5802 JP)’s tender offer of JPY1,695 per share, an 36.9% premium to the undisturbed price (2 February).
  • The transaction is a two-step acquisition through a cash tender offer and subsequent squeeze-out. The lower limit of the offer has been set to meet the 66.67% ownership ratio.
  • The tender offer is attractive and represents an all-time share price high. This suggests a done deal. The tender offer period is from 3 February to 22 March.

Kyocera (6971 JP): Massive Downward Revision

By Scott Foster

  • Kyocera cut FY Mar-23 operating profit guidance by more than 30% while leaving sales guidance unchanged. Draw your own conclusions about the reliability of company forecasts.
  • Sales began to decline in 3Q and the rate of decline is likely to increase in 4Q. There is a large inventory overhang.
  • The shares dropped 3% today. Wait for capitulation as the reality of recession sinks in.

Z Holdings (Neutral) – Q3 22 Results Reaction: Lofty EBITDA Targets Cut on Erosion in Core Business

By Kirk Boodry

  • Management has cut its FY23 EBITDA target from its long-term goal of ¥390bn to c. ¥363bn as its core ad and eCommerce performance gets weaker
  • Advertising revenue fell 1% YoY whilst eCommerce volumes (GTV) on the core third-party marketplace Yahoo!Shopping were also down significantly
  • The outlook for FY23 is further blurred by management changes to address business challenges and deeper LINE/Yahoo integration.  We are lowering our target price to ¥425

Takeda: Top Line Beats Consensus, Steady Pipeline Progress and Further Upside

By Shifara Samsudeen, ACMA, CGMA

  • Takeda Pharmaceutical (4502 JP)  reported 3QFY03/2023 results today. Reported revenue increased 11.2% YoY to JPY1,096.6bn (vs consensus JPY996bn) while OP increased 26.2% YoY to JPY147bn (vs consensus JPY180.1).
  • The drop in OP vs consensus was mainly due to the depreciation of the Yen, nevertheless, OPM improved 30bps to 13.4% during the quarter.
  • Takeda has not revised full-year forecast, however, we think the company will easily beat its own guidance as it pushes forward with its development pipeline further aided by M&A.

KDDI (Buy) – Q3 22 Results Reaction: Super Mobile but Full-Year Targets Look Challenging

By Kirk Boodry

  • Core mobile revenue fell 4% but that is an improvement from 7-8% declines over the last few quarters and including value-added sales (VAS), retail mobile spend is up
  • Competitive challenges remain with elevated churn and visible declines in roaming revenue from Rakuten (although sequential change has been modest)
  • KDDI has kept guidance for FY22 operating income growth unchanged despite unanticipated expenses for rising fuel costs and the July network failure

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Feb 03
0

Daily Brief Utilities: China Longyuan Power and more

By | Daily Briefs, Utilities Sector

In today’s briefing:

  • China Longyuan Power (916 HK) – High Probability 22% Rally Confirmed at the January Close

China Longyuan Power (916 HK) – High Probability 22% Rally Confirmed at the January Close

By David Coloretti, CMT

  • At TMA we deliver high probability outcomes by focusing on our 3 pillars of technical analysis. •1) Response to key levels. •2) Price action. •3) Momentum confirmation.
  • January 2023 confirmed a high probability bullish outlook when all 3 pillars were definitively triggered. 
  • Monthly Relative Strength Index (RSI) has an incredible multi-year history of confirming large upswings in 916 HK. January completed the 5th such bullish confirmation since 2014. Multi-month target at 12.945. 

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