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Smartkarma Daily Briefs

Daily Brief Singapore: Sea Ltd, Lendlease Global Commercial REIT and more

By | Daily Briefs, Singapore

In today’s briefing:

  • Sea Ltd: Game Over
  • 5 in 5 with Lendlease Global Commercial REIT – The First Net Zero S-REIT

Sea Ltd: Game Over

By Oshadhi Kumarasiri

  • We don’t see a way for Sea Ltd (SE US)’s e-commerce business to turn profitable in the next few years.
  • For the moment, the Digital-Entertainment segment is capable of absorbing most of e-commerce losses, but we are expecting the segment profitability to fall 70% to $135m per-quarter over the-next two-years.
  • Once that happens, we think it will be game over for Sea Ltd.

5 in 5 with Lendlease Global Commercial REIT – The First Net Zero S-REIT

By Geoff Howie

5 in 5 with Lendlease Global Commercial REIT – The First Net Zero S-REIT

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Daily Brief Australia: Norwest Energy NL, Origin Energy, Aft Pharmaceuticals and more

By | Australia, Daily Briefs

In today’s briefing:

  • Norwest Backs MinRes’ Bumped Offer
  • Origin Energy (ORG AU): Risk/Reward Profile
  • AFT Pharmaceuticals – Maxigesic IV expands into East European markets

Norwest Backs MinRes’ Bumped Offer

By David Blennerhassett

  • Back on the 10 January, Norwest Energy NL (NWE AU) rejected Mineral Resources (MIN AU)‘s off-market scrip Offer.
  • It was apparent what MinRes needed to bump. This was an easy win if they do. On cue, they have now increased the scrip terms and NWE’s directors are supportive. 
  • Scrip terms are now 1 MinRes for every 1,300 NWE shares – from 1,367. I think NWE could have held out for more, but it is what it is. 

Origin Energy (ORG AU): Risk/Reward Profile

By Arun George

  • Origin Energy (ORG AU)’s exclusivity agreement with Brookfield/EIG expired on 24 January. Brookfield/EIG is reportedly continuing its due diligence on its A$9.00 per share offer.
  • Time often kills deals. There is speculation that recent price caps would result in Brookfield/EIG walking away or trying to recut the deal terms. ACCC approval is also an overhang.
  • Peers’ share prices have risen despite the price cap which weakens the case for a recut to the deal terms. Brookfield/EIG clearly want Origin as it twice bid against itself. 

AFT Pharmaceuticals – Maxigesic IV expands into East European markets

By Edison Investment Research

AFT Pharmaceuticals has announced an exclusive licensing and distribution agreement for the Maxigesic intravenous (IV) formulation with Salus Pharmaceuticals (a Slovenia-based wholesaler of pharmaceutical products) for nine Eastern European countries across the Balkan and Baltic regions. Maxigesic IV is already registered in five of the nine countries, with launches planned in CY23. AFT will also file registration applications for the remaining countries during the year. Maxigesic IV is registered in 41 countries globally and has been launched in more than 10, including the key markets of France and Italy in November 2022. As AFT awaits Maxigesic IV approval in the US, we see this new agreement as an encouraging step towards expanding its international presence, in line with its strategic priorities for CY23.


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Daily Brief Thailand: Ramkhamhaeng Hospital and more

By | Daily Briefs, Thailand

In today’s briefing:

  • Quiddity Leaderboard for Thailand SET50 Jun 23:Ramkhamhaeng Hospital Is an Interesting Case

Quiddity Leaderboard for Thailand SET50 Jun 23:Ramkhamhaeng Hospital Is an Interesting Case

By Janaghan Jeyakumar, CFA

  • In this insight, we take a look at the potential ADDs/DELs for the SET50 index rebalance in June 2023.
  • Based on the latest available data, I expect 3 ADDs/DELs but there are multiple names lurking close to the border.
  • Srisawad (SAWAD TB)  and Sansiri Public (SIRI TB) are leading the SET50 and SET100 Reserve Lists respectively and could become intra-review ADDs if the DTAC-TRUE merger closes in 1H 2023.

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Daily Brief South Korea: Kepco Engineering & Construction, Osstem Implant, Samsung Electronics Pref Shares, Samsung C&T and more

By | Daily Briefs, South Korea

In today’s briefing:

  • Solactive Global Uranium & Nuclear Components Index Rebalance: 6 Adds, 5 Deletes
  • MBK/Unison Capital Korea Do a Deal for Osstem Implant (048260 KS) Thwarting Activist KCGI
  • Samsung Electronics 1P Pushed to a Substantial Diversion (Below -2σ) Today
  • Korean Holdcos Vs Opcos Gap Spreads Opportunities in 1Q 2023

Solactive Global Uranium & Nuclear Components Index Rebalance: 6 Adds, 5 Deletes

By Brian Freitas

  • Solactive has announced the constituent changes for the Global Uranium & Nuclear Components Index. There are 6 adds and 5 deletes with implementation at the close on 31 January.
  • Estimated one-way turnover is in excess of 12% and will result in a one-way trade of US$207m. There are 11 stocks with estimated passive flows greater than 5x ADV.
  • Some of the inclusions have had BIG rallies over the last couple of months and there could be profit taking on those names in the next few days.

MBK/Unison Capital Korea Do a Deal for Osstem Implant (048260 KS) Thwarting Activist KCGI

By Travis Lundy

  • Just over a year ago, leading Korean dental implant and dentistry supply company Osstem Implant (048260 KS) announced the largest-ever embezzlement case in Korea. The stock was suspended.
  • There were fears about forced selling by the founder, and PE funds circled. Activist KCGI probably bought in Q3 but built a 5+% stake by end-December 2022.
  • Korean PE Firms MBK and Unison Capital have now launched an MBO-style Tender Offer to buy 2.4-11.2mm shares in the company at a sharp premium to the pre-activism undisturbed price.

Samsung Electronics 1P Pushed to a Substantial Diversion (Below -2σ) Today

By Sanghyun Park

  • SamE PREF’s relative underperformance compared to ORD has been getting a bit worse lately. And finally, today, it went down below -2.0σ on a 20-day moving average.
  • This much diversion is the first in recent months, and the pref discount is close to last year’s peak. The dividend yield difference is also the widest in recent years.
  • The current diversion appears to be a byproduct of the SamE overbuying amid the recent market rally, and we should expect a quick reversion.

Korean Holdcos Vs Opcos Gap Spreads Opportunities in 1Q 2023

By Douglas Kim

  • In this insight, we highlight the pricing gap divergences of the major Korean holdcos and opcos in 1Q 2023.
  • Of the 33 pair trades, 2/3 of them involved holdcos outperforming opcos in the past year and 1/3 of them involved opcos outperforming holdcos in the same period.
  • We highlight 33 pair trades that involve Korean holdcos and opcos.

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Daily Brief United States: Broadcom Limited, Juniper Networks, Godaddy Inc Class A, Exxon Mobil, Sunpower Corp, Tastemaker Acquisition Corp, Viacom Inc Class B and more

By | Daily Briefs, United States

In today’s briefing:

  • Broadcom Inc: New Test Solutions With Rohde & Schwarz & Other Drivers
  • Juniper Networks: Agreement With Powerco & Other Developments
  • GoDaddy Inc: Major Drivers, Financial Forecasts, DCF & Comparables Valuation, Key Risks (01/23)
  • Exxon Mobil As A Dividend Aristocrat Stock: Not As Attractive As You Might Think
  • SunPower Corporation: Partnership With General Motors & Other Drivers
  • This Deal is The Gold Standard
  • Paramount Global: Expansion Of Paramount+ & Other Developments

Broadcom Inc: New Test Solutions With Rohde & Schwarz & Other Drivers

By Baptista Research

  • Broadcom delivered a strong result in the last quarter with revenues growing 21% year-on-year, surpassing Wall Street expectations.
  • This growth was driven by the company’s strong partnerships and increased R&D investments that enabled accelerated adoption of its new-generation technologies.
  • In the quarter, semiconductor solution revenue and infrastructure software revenue grew.

Juniper Networks: Agreement With Powerco & Other Developments

By Baptista Research

  • Juniper’s stock has seen good upward momentum with its results around the corner.
  • The company had delivered better-than-expected results in the last quarter with its total revenues as well as earnings exceeding Wall Street expectations.
  • The cloud business of Juniper also delivered solid quarterly result with revenue growth.

GoDaddy Inc: Major Drivers, Financial Forecasts, DCF & Comparables Valuation, Key Risks (01/23)

By Baptista Research

  • GoDaddy delivered a mixed set of results for the last quarter.
  • However, it did manage an earnings beat which was largely a result of the robust consumer retention.
  • This quarter, GoDaddy launched free SSL on almost all innovative web hosting plans in its major markets.

Exxon Mobil As A Dividend Aristocrat Stock: Not As Attractive As You Might Think

By Vladimir Dimitrov, CFA

  • Exxon Mobil continues to defy gravity even as markets rolled over in 2022.
  • There are better alternatives for those looking for passive income streams, but shareholders should be prepared for more turbulence ahead, according to the author.
  • Exxon Mobil’s long-term success is still optimistic on the long- term success of the company.

SunPower Corporation: Partnership With General Motors & Other Drivers

By Baptista Research

  • SunPower delivered an all-around beat in the last quarter as the value of the company’s storage and solar systems continues to rise with the rise in utility rates.
  • Consumer demand in the quarter continues to be quite strong and it added 23,1000 new customers this quarter which displays a persistent level of robust consumer demand for residential solar, particularly SunPower.
  • We provide the stock of SunPower with an ‘Outperform’ rating and a revision in the target price.

This Deal is The Gold Standard

By subSPAC

  • Amidst all of the De-SPAC Bankruptcies, liquidity issues, and frauds, it’s been hard for investors to pinpoint strong, established businesses that deliver consistent returns.
  • In fact, only a handful of companies in the three years since SPACs became a popular vehicle retained or saw their valuation increase.
  • So it’s good to see businesses like jewelry wholesaler Quality Gold to debut through a SPAC deal.

Paramount Global: Expansion Of Paramount+ & Other Developments

By Baptista Research

  • Paramount had a disappointing set of results in the last quarter as it failed to meet the revenue expectations as well as earnings expectations of Wall Street.
  • The company maintained its strength in TV, expanded in cinema, and benefitted from the worldwide surge in streaming during the third quarter.
  • Among major updates, Walmart chose Paramount+ when looking to add a streaming service to its Walmart+ package.

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Daily Brief Indonesia: Bank Negara Indonesia Persero, Lippo Karawaci and more

By | Daily Briefs, Indonesia

In today’s briefing:

  • Bank Negara Indonesia (BBNI IJ) – Laggard Leader with Appealing Returns Ahead
  • Morning Views Asia: Adani Ports & Special Economic Zone, Azure Power Global Ltd, Lippo Karawaci

Bank Negara Indonesia (BBNI IJ) – Laggard Leader with Appealing Returns Ahead

By Angus Mackintosh

  • Bank Negara Indonesia finished 2022 with a strong set of numbers beating guidance and consensus, as it continued to benefit from low cost of funds and strong loan growth. 
  • The bank has increased its exposure to higher-quality corporate customers, and large commercial customers in their supply chain plus growing government-backed KUR loans as well as consumer loans. 
  • BNI’s strategy in digital banking for consumers and business customers is driving loan growth and fee income as well as funding. Valuations are attractive with rising returns increasing the appeal. 

Morning Views Asia: Adani Ports & Special Economic Zone, Azure Power Global Ltd, 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.


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Daily Brief China: Alibaba (ADR), CanSino Biologics Inc, Sany Heavy Industry and more

By | China, Daily Briefs

In today’s briefing:

  • Alibaba (BABA US): What Is Next After Strong Rally?
  • Pre-IPO CanSino Biologics – 2022 Annual Results May Be Ugly as MCV4 Commercialization Hit a Snag
  • Sany Heavy: Buy

Alibaba (BABA US): What Is Next After Strong Rally?

By Eric Chen

  • Bullish sentiments doubled BABA share price post 20th Party congress, as investors look beyond a soft December quarter and focus on re-opening prospects and flashing regulatory green lights.
  • Expect single-Digit GMV growth, more disciplined OPEX and hence margin recovery to generate RMB180 billion non-GAAP net profit for BABA by FY25. Materializing fundamental recovery will support continued re-rating.
  • That said, we also see headwinds to multiple expansion and expect 18-20x PER (among lowest in sector) for FY25, implying 21%/28% compounded annual return over FY23-25.

Pre-IPO CanSino Biologics – 2022 Annual Results May Be Ugly as MCV4 Commercialization Hit a Snag

By Xinyao (Criss) Wang

  • CanSino Biologics Inc (6185 HK) disclosed plans to publicly list in Switzerland, but the story of the fourth dose of COVID-19 vaccine is difficult to boost its stock price/valuation. 
  • According to CanSino’s management,MCV4’s commercialization faced some challenges, which means 2022 annual performance may not be good. 2021 would probably be a high point of CanSino’s performance in recent years.
  • Share price could pullback when 2022 annual report is released, which offers a better opportunity if investors want to go long, considering CanSino’s long-term investment value analyzed in prior insights. 

Sany Heavy: Buy

By Xin Yu, CFA

  • China’s construction engineering industry declined more than expected in 2022
  • The industry may reach the inflection point by the end of 2023 or 1H24
  • Sany Heavy is expected to recover earlier than its peers

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Daily Brief Japan: Olympus Corp, Toshiba Corp, CyberAgent Inc, Nidec Corp, Nippon Light Metal, Tokyo Stock Exchange Tokyo Price Index Topix and more

By | Daily Briefs, Japan

In today’s briefing:

  • The Olympus Peer-Relative Crash – Due to ADR Cancellation Overhang?
  • Toshiba – Preparing for 2QFY23
  • CyberAgent (4751) | World Cup Winners
  • CyberAgent 1QFY09/2023: Earnings Miss, Struggling Gaming and Huge FIFA Cost Add to the Woes
  • Nidec (6594): A V-Shaped Recovery Cannot Be Taken for Granted
  • Nippon Light Metal (5703 JP) Is On The Verge Of Confirming Bullish MT Trend Change
  • Maybe There Are Many Companies in Japan that Have the Resources but Neglect Efforts to Increase ROA

The Olympus Peer-Relative Crash – Due to ADR Cancellation Overhang?

By Travis Lundy

  • Olympus has been sold down relatively hard in the last couple of months. At the same time, we are at crunch time for the cancellation of the US ADR.
  • This may create short-term overhang, but the medium-term overhang from substantial foreign net buying in H1 when USDJPY was going up may be larger. 
  • This insight looks at the relative performance vs Peers, vs forward earnings expectations, USDJPY, etc.

Toshiba – Preparing for 2QFY23

By Mio Kato

  • We have turned slightly more bearish on Toshiba’s near term fundamental prospects as we now have concerns about the industrial side of its semiconductor business. 
  • The re-emergence of a WDC-Kioxia deal and the likelihood of a change in BOJ policy make us wonder whether bankers might want to wait a little on financing. 
  • As such, while recent weakness makes an aggressively negative view difficult we do not feel that upside risks are particularly threatening either.

CyberAgent (4751) | World Cup Winners

By Mark Chadwick

  • CyberAgent Q1 loss on one-off expenses from World Cup streaming. We see Q1 as a bottom this fiscal year
  • Share price already discounted weak FY9/23 guidance last October and focus is now on recovery 
  • The World Cup was a success for the Japanese National side and for Abema

CyberAgent 1QFY09/2023: Earnings Miss, Struggling Gaming and Huge FIFA Cost Add to the Woes

By Shifara Samsudeen, ACMA, CGMA

  • CyberAgent Inc (4751 JP) reported 1QFY09/2023 results. Revenue declined 2.1% YoY to JPY167.6bn (vs consensus JPY176.1bn) while OP turned negative JPY1.25bn (vs consensus OP of JPY4.1bn.
  • CA’s largest investment to-date was for FIFA 2022 but top line growth has largely been in line with previous quarter. WAU have dropped to pre-FIFA levels.
  • Though AbemaTV’s monetisation strategy seems to work, the growth prospects for other two segments are concerning and likely to drag down the consolidated performance.

Nidec (6594): A V-Shaped Recovery Cannot Be Taken for Granted

By Scott Foster

  • Nidec is headed into the red due to market disruption in China, restructuring charges and stagflation.
  • The first two of these factors should be temporary, but the third points to longer term pressure on margins. Competition in EV motors is another problem that won’t go away.
  • In a weak economy characterized by stagflation, it is too early to turn bullish.

Nippon Light Metal (5703 JP) Is On The Verge Of Confirming Bullish MT Trend Change

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.
  • Every recommendation requires definitive evidence of all 3 pillars to be regarded as a high probability outcome. 
  • 5703 JP has a LT double bottom in place and comprehensive MT uptrend confirmation (weekly RSI). Only an appropriate weekly close is required this week to confirm the MT uptrend.

Maybe There Are Many Companies in Japan that Have the Resources but Neglect Efforts to Increase ROA

By Aki Matsumoto

  • If we read “improved asset efficiency” as “ROA,” it would fit better. ROA, along with ROE, correlates with valuation, and higher ROA can be expected to trigger higher stock prices. 
  • Companies with high ROA tend to have advanced corporate governance initiatives. In Metrical Universe of 1,779 companies, ROA (historical 3-year average) for many of corporate governance metrics are significantly correlated.
  • Whether Japanese stocks are undervalued is another question, but if companies have resources but are neglecting company-wide efforts to increase margins and turnover, activist investors are likely to be interested.

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Daily Brief India: Mankind Pharma, Krishna Institute of Medical Sciences, Adani Enterprises, Lippo Karawaci and more

By | Daily Briefs, India

In today’s briefing:

  • Mankind Pharma Pre-IPO – The Positives – Diverse Portfolio with Steady past Performance
  • Krishna Institute of Medical Sciences (KIMS IN): Improving Operations; Expansion to Drive Growth
  • Adani Enterprises US$2.4bn FPO – Updates, Pricing, Structure, Anchor and Some More
  • Morning Views Asia: Adani Ports & Special Economic Zone, Azure Power Global Ltd, Lippo Karawaci

Mankind Pharma Pre-IPO – The Positives – Diverse Portfolio with Steady past Performance

By Sumeet Singh

  • Mankind Pharma  is looking to raise about US$1bn in its upcoming India IPO.
  • MP is a pharmaceutical company engaged in developing, manufacturing and marketing a range of pharmaceutical formulations across various acute and chronic therapeutic areas, as well as several consumer healthcare products.
  • In this note, we talk about the positive aspects of the deal.

Krishna Institute of Medical Sciences (KIMS IN): Improving Operations; Expansion to Drive Growth

By Tina Banerjee

  • Krishna Institute of Medical Sciences (KIMS IN) is seeing a continued business recovery reflected in improving operating metrics. In Q2FY23, KIMS reported record high quarterly sales, EBITDA, and footfall.
  • KIMS is following a disciplined growth strategy and plans to grow into markets that are adjacent to the current core markets of Andhra Pradesh and Telangana.   
  • KIMS has set foot in a new market of Maharashtra, outside of its core market. With lower margins from acquired assets than matured hospitals, KIMS has scope for margin improvement.

Adani Enterprises US$2.4bn FPO – Updates, Pricing, Structure, Anchor and Some More

By Sumeet Singh

  • Adani Enterprises is looking to raise INR200bn (US$2.4bn) via a further public offering (FPO). Bookbuild will begin tomorrow (27th Jan 23) and last till the end of the month.
  • Adani Enterprises is the flagship company of the Adani Group. The group’s entities’ stock performance over the past few years has made the founder one of the richest persons globally.
  • We have covered most aspects of the deal in our earlier note published. In this note, we talk about the recent updates and the deal pricing and structure.

Morning Views Asia: Adani Ports & Special Economic Zone, Azure Power Global Ltd, 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.


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Daily Brief Technical Analysis: Upgrading Communications and more

By | Daily Briefs, Technical Analysis

In today’s briefing:

  • Upgrading Communications, Downgrading Staples – Both to Market Weight; US Dollar Major Top

Upgrading Communications, Downgrading Staples – Both to Market Weight; US Dollar Major Top

By Joe Jasper

  • In our January 10th Compass, we discussed a break above 3910 on SPX would signal a tradable rally, with 4100-4165 our target, the top-end of our expected 2023 trading range.
  • We believe equities are still in the midst of a rally/short squeeze, but that the rally is likely to fizzle in the 4100-4165 area.
  • After being underweight Communications (XLC) since Nov 2021, sidestepping 20% underperformance vs. SPX, we now see signs of price and RS bottoms, and we are upgrading to market weight. Buy.

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