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Smartkarma Daily Briefs

Daily Brief Thematic (Sector/Industry): Good Morning Japan |Fed Hike and more

By | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

  • Good Morning Japan |Fed Hike, Powell Speech ? Equities Beyond as Optimism Abounds,from Spotify to GM
  • China’s Micro Loan Market: Key Takeaways from the Jan PMI

Good Morning Japan |Fed Hike, Powell Speech ? Equities Beyond as Optimism Abounds,from Spotify to GM

By Mark Chadwick

  • OVERSEAS. SPX makes  up for yesterday’s loss and more; Markets look past Fed and focus on earnings recovery;  Its all about the Pause;   GM Beats but CAT misses; Awaiting AAPL
  • JAPAN.  NKY Futs +0.6% Cash; USDJPY 130.11; Labor Shortages worsening (again), Firms desperate;  BYD seeks to Capture JP EV Market;   Komatsu Beats; Lasertec Misses.
  • DAILY NUGGETS. 6h 37m: The Average Time Spent Using the Internet.  Japan the outlier..for the better ?

China’s Micro Loan Market: Key Takeaways from the Jan PMI

By Stanley Tsai, CFA

  • The Jan. PMI readings corroborate what investors had already known over the break. But it is noteworthy that SMEs appear much less upbeat than large corporations.  
  • SMEs account for 60% of GDP and an even higher proportion of job creation. Policy support has been keeping many of them afloat throughout the pandemic. 
  • As the deadline on the PBOC’s SME support program is fast approaching, small regional banks may bear the brunt of the impact on the financial system.

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Daily Brief Macro: End of Mandatory Lock-Up Periods for 52 Companies in Korea in February 2023 and more

By | Daily Briefs, Macro

In today’s briefing:

  • End of Mandatory Lock-Up Periods for 52 Companies in Korea in February 2023
  • Replacing Russia: EMEA Stock Screening
  • CX Daily: The Vision Of Singapore’s Next Prime Minister
  • Taking Stock of Marcos’ Administration Six Months In
  • Less Pessimism in the World Economy: How Does Asia Benefit?
  • Macro Watch – 16 Charts On US Macro Ahead Of The Fed Meeting
  • EA: Resilient Data Buttress Hawkish ECB
  • Malaysian Politics: By Sacking Khairy, UMNO Denies Itself an Opportunity for Internal Reform
  • Energy and Industrials Estimates in Accelerating Downtrends, Soon Be Joined by Industrial Services

End of Mandatory Lock-Up Periods for 52 Companies in Korea in February 2023

By Douglas Kim

  • We discuss end of the mandatory lock-up periods for 52 stocks in Korea in February 2023, among which 3 are in KOSPI and 49 are in KOSDAQ.
  • These 52 stocks on average could be subject to further selling pressures in Febraury and could underperform relative to the market. 
  • Among these 52 stocks, the top 5 market cap stocks include Rainbow Robotics, SillaJen, SOCAR, Sebitchem, and Yunsung F&C.

Replacing Russia: EMEA Stock Screening

By Steven Holden

  • We identify stocks in the EMEA region that are filling the void created by Russia’s removal from financial markets in 2022.
  • MENA stocks have benefitted from rotation, led by Saudi Aramco,  Emaar Properties and Saudi Basic Industries
  • Outside of MENA, South Africa remains an important destination, whilst Dino Polska SA (DNP PW) and MOL are favoured in Eastern Europe

CX Daily: The Vision Of Singapore’s Next Prime Minister

By Caixin Global

  • Cover Story: The vision of Singapore’s next prime minister.

  • Missing for 100 days, teenager found dead behind school.

  • China’s provinces target household spending in plans for post-‘zero Covid’ recovery.


Taking Stock of Marcos’ Administration Six Months In

By Manu Bhaskaran

  • The Marcos administration has emphasized its focus on growth, backing it up by pursuing measures such as ratifying RCEP, infrastructure spending, and liberalizing reforms. 
  • However, we caution readers against premature optimism; structural weaknesses such as crony capitalism, debt concerns, and poor public investment management persist.
  • Compounding the long-term shortcomings are near-term macroeconomic challenges in tackling stubbornly-high inflation. Monetary tightening may also induce financial risks.

Less Pessimism in the World Economy: How Does Asia Benefit?

By Manu Bhaskaran

  • The global economy is slowing: our lead indicator predicts a further downturn in Asian exports. However, the global outlook may turn out better than expected for Asia.
  • While one can be sceptical of Chinese data reporting low infections and deaths, consumer sentiment has rebounded.  Beijing is also pursuing growth with zealous fervour.
  • Slower global inflation has helped ease fears of excessive monetary tightening. Business optimism is also making a slow but steady recovery.

Macro Watch – 16 Charts On US Macro Ahead Of The Fed Meeting

By Andreas Steno

  • We take you through all of our leading indicators on growth, inflation and liquidity ahead of the Fed meeting
  • Inflation and growth is coming down, while liquidity is currently improving 
  • Bottom-Line: The Fed is close to pausing but QT will remain in place until the early Autumn at least

EA: Resilient Data Buttress Hawkish ECB

By Phil Rush

  • EA GDP growth defied expectations by growing again in Q4, albeit by only 0.1% q-o-q and reliant on Ireland’s ongoing boom. Its performance still sits between the UK and US.
  • Resilient activity remains both a matter of output and employment. The ECB still needs labour market slackening for underlying inflation to become consistent with the target.
  • Spain’s stronger core inflation provided a timely reminder of the hawkish pressure, even if weighting and methodological changes compounded the effect.

Malaysian Politics: By Sacking Khairy, UMNO Denies Itself an Opportunity for Internal Reform

By Manu Bhaskaran

Malaysia’s once-dominant party has sacked popular former health minister Khairy Jamaluddin, depriving itself of one of its proponents for rejuvenation and reform. Khairy is now left pondering the next steps for his political career, but there are no straightforward options. 


Energy and Industrials Estimates in Accelerating Downtrends, Soon Be Joined by Industrial Services

By Eric Fernandez, CFA

  • Analyst sentiment was flat to down slightly.  A net 27% of companies are seeing raised estimates.  The average estimate revision is a raise of +0.7%.
  • Analyst sentiment is crowded and bullish for Precious Metals, Restaurants, Internet Retail, Computer Processing Hardware, IT Services, Packaged Software, Advertising & Marketing Services and Specialty Telecom.
  • Notable reversals in estimates occurred in Distribution Services, Broadcasting and Investment Banks (from cuts to new raises) and in Utilities and Engineering & Construction (new cuts). 

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Daily Brief Crypto: Sporting Crypto – Sorare Announce £30m Per-Year Blockbuster Premier League Deal and more

By | Crypto, Daily Briefs

In today’s briefing:

  • Sporting Crypto – Sorare Announce £30m Per-Year Blockbuster Premier League Deal

Sporting Crypto – Sorare Announce £30m Per-Year Blockbuster Premier League Deal

By Sporting Crypto

  • At long last — after months of rumours — Sorare and the English Premier League (EPL) have finally announced their exclusive multi-year deal thought to be worth £30m per year.
  • For Sorare, this was the final piece to the puzzle. That final big deal in Soccer that they wanted to get over the line.
  • Just over 4 years from inception, they now have deals in place with almost every top flight club and league in the world.

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Daily Brief Event-Driven: StubWorld: Mickey Upstages Keisei Electric and more

By | Daily Briefs, Event-Driven

In today’s briefing:

  • StubWorld: Mickey Upstages Keisei Electric
  • MSCI Feb 2023 QCIR Preview: Potential Changes as Review Period Ends
  • Toshiba (6502) – Funding Mostly Secured, Still, Again, Maybe. Or Maybe Not. Or Not.
  • Sembcorp Marine-Keppel O&M Merger Circular Squeaks In Under The Wire – Next Steps
  • Toshiba (6502 JP): Financing Deadline Slips Again as the 3Q Update Looms
  • Dufry/Autogrill: Deal Progress
  • ActivistTalk: Bed Bath & Beyond at Death’s Door

StubWorld: Mickey Upstages Keisei Electric

By David Blennerhassett

  • Keisei Electric Railway Co (9009 JP) is trading “cheap” as Oriental Land (4661 JP) enjoys a zero-Covid revival.
  • Preceding my comments on Keisei/Oriental Land, are the current setup/unwind tables for Asia-Pacific Holdcos. 
  • These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation >20%.

MSCI Feb 2023 QCIR Preview: Potential Changes as Review Period Ends

By Brian Freitas

  • The review period for the February Quarterly Comprehensive Index Review (QCIR) of the MSCI indices ended yesterday. There will be a number of changes in the Asia Pacific region.
  • Most of the inclusions are in China and the country weight in the MSCI Emerging Markets Index should increase leading to outflows from other markets.
  • On average, the potential adds have outperformed the potential deletes over the last few weeks. At a glance, pre-positioning appears to be lighter than in the past.

Toshiba (6502) – Funding Mostly Secured, Still, Again, Maybe. Or Maybe Not. Or Not.

By Travis Lundy

  • The original bid was supposed to be presented fully-funded by 30 September 2022. Then it was early November, then late November, then early December, late Dec, early Jan, end Jan. 
  • Today we find out that The Banks and The Preferred JIP Bidding Consortium will aim to reach agreement by 3 Feb. The Bloomberg article details are newish, and odd. 
  • Shares have deteriorated and vs Peers, they are at their lowest point in many months. And the details do not make me confident this deal is clean yet. 

Sembcorp Marine-Keppel O&M Merger Circular Squeaks In Under The Wire – Next Steps

By Travis Lundy

  • Last Friday, Sembcorp Marine (SMM SP) announced it had Approval-In-Principle for its Proposed Combination with Keppel Corp (KEP SP), contingent on the Circular being despatched by 31 January 2023.  
  • At 6:50pm local time on 31 January, Sembcorp Marine released its 679-page Circular (and EGM Announcement (16 Feb EGM)). Phew! 
  • Now we have a deal in sight, we have to think about next steps. SMM NEWCO needs a story vs flow. Orderbook is nice but may not cut it near-term.

Toshiba (6502 JP): Financing Deadline Slips Again as the 3Q Update Looms

By Arun George

  • Bloomberg reports that Japan Industrial Partners (JIP), the preferred bidder, has again extended the deadline for securing bank financing of around JPY1.2 trillion (US$8.8 billion).
  • A new issue has pushed the deadline to 3 February. If JIP manages to secure financing for an offer of around JPY5,100, the next challenge is securing Board support.
  • The 3QFY2022 update on 14 February needs to avoid further downgrades to keep the deal alive. Toshiba’s multiples are unattractive to peers. Remain on the sidelines for now.

Dufry/Autogrill: Deal Progress

By Jesus Rodriguez Aguilar

  • The deal is done with the transfer of Edizione’s 50.3% stake in Autogrill under way, and with  all main hurdles cleared. Dufry must launch and offer to buy out minorities. 
  • Autogrill shares closed at €6.698 on 30 January, also the implied value of the 0.158 Autogrill/Dufry share swap is 5.8% above the €6.33/share “initial” cash offer. The market expects more.
  • The deal will not fall through but the price is still being negotiated, possibly around €6.8-6.9/share. The issue will now become what dilution/leverage will Dufry’s patient shareholders endure.

ActivistTalk: Bed Bath & Beyond at Death’s Door

By Robert Sassoon

  • Bed Bath & Beyond (BBBY US) , the one-time iconic US homes good retailer, whose financial condition has continued to deteriorate rapidly, is barreling towards bankruptcy  sooner rather than later
  • A default notice on one of its primary credit facilities has been served and failure to make a bond interest payment on Feb 1 could well seal its fate
  • There may not be any money left for its equity holders to recover which means there  is a real prospect of the BBBY share price moving rapidly to zero

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Daily Brief Australia: Flight Centre Travel, Harvest Technology Group Ltd and more

By | Australia, Daily Briefs

In today’s briefing:

  • Flight Centre Travel Group Placement – Still a Good Deal Despite Its Track Record
  • Harvest Technology Group Limited – Sales Moving up the Curve

Flight Centre Travel Group Placement – Still a Good Deal Despite Its Track Record

By Ethan Aw

  • Flight Centre Travel (FLT AU) is looking to raise US$127m from a fully underwritten institutional placement. 
  • The proceeds will be used to acquire Luxury Travel Holdings (Scott Dunn), a UK-based luxury travel business.
  • In this note, we will discuss deal dynamics, past deal performance, and share the scores on our ECM framework.

Harvest Technology Group Limited – Sales Moving up the Curve

By Research as a Service (RaaS)

  • Harvest Technology Group Limited (ASX:HTG) licenses its proprietary video compression and encryption technology for low-bandwidth, high-latency applications needing secure real-time streaming video communication.
  • The company delivers solutions for data transfer from anywhere via satellite or congested networks.
  • Harvest offers a solution which enables real-time monitoring of remote locations, real-time feedback for field technicians, and secure video conferencing. 

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Daily Brief Singapore: Sembcorp Marine, Meta Health Limited and more

By | Daily Briefs, Singapore

In today’s briefing:

  • Sembcorp Marine-Keppel O&M Merger Circular Squeaks In Under The Wire – Next Steps
  • 10 in 10 with Meta Health – Digitalising Healthcare

Sembcorp Marine-Keppel O&M Merger Circular Squeaks In Under The Wire – Next Steps

By Travis Lundy

  • Last Friday, Sembcorp Marine (SMM SP) announced it had Approval-In-Principle for its Proposed Combination with Keppel Corp (KEP SP), contingent on the Circular being despatched by 31 January 2023.  
  • At 6:50pm local time on 31 January, Sembcorp Marine released its 679-page Circular (and EGM Announcement (16 Feb EGM)). Phew! 
  • Now we have a deal in sight, we have to think about next steps. SMM NEWCO needs a story vs flow. Orderbook is nice but may not cut it near-term.

10 in 10 with Meta Health – Digitalising Healthcare

By Geoff Howie

10 in 10 with Meta Health – Digitalising Healthcare

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Daily Brief South Korea: Samsung Biologics and more

By | Daily Briefs, South Korea

In today’s briefing:

  • Samsung Biologics (207940 KS): 2022 Revenue Surpassed KRW3T; Strong Growth Momentum to Continue

Samsung Biologics (207940 KS): 2022 Revenue Surpassed KRW3T; Strong Growth Momentum to Continue

By Tina Banerjee

  • In 2022, Samsung Biologics (207940 KS) posted record-high consolidated revenue of KRW3 trillion and, driven by new orders, efficient plant utilization, and inclusion of Samsung Bioepis as a wholly-owned subsidiary.
  • Plant 4 is on track to be completed in H12023, with active pre-sale activities are rapidly locking in capacity. Strong order momentum continued, with 2022 CMO contract amount of $9.5B.
  • Samsung Bioepis reported revenue growth of 12% to KRW946B, driven by stable sales of existing products and new product launch. Humira biosimilar launch in the US is the biggest catalyst.

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Daily Brief India: MMP Industries, Lemon Tree Hotels Ltd, Bandhan Bank Ltd, Vedanta Resources and more

By | Daily Briefs, India

In today’s briefing:

  • MMP Industries: Forensic Analysis
  • Lemon Tree Hotels Ltd- Forensic Analysis
  • Bandhan Bank | The Road Ahead
  • Morning Views Asia: JSW Infrastructure, Road King Infrastructure, UPL Ltd, Vedanta Resources

MMP Industries: Forensic Analysis

By Nitin Mangal

  • MMP Industries (MMP IN)  is mainly engaged in the business of manufacturing, selling and distribution and trading of aluminum products such as powder, pyro and flake, paste, foils etc.
  • The company has been on the main board of NSE since F20 but however, its financials are plagued with several forensic concerns.
  • We highlight takeaways mainly related to negative cash flows and their misrepresentation in reporting standards. Additionally, the company is also engaged in various secretarial audit woes.

Lemon Tree Hotels Ltd- Forensic Analysis

By Nitin Mangal

  • Lemon Tree Hotels Ltd (LEMONTRE IN) (“LTHL”) is India’s largest mid-market hotel chain with 7 brands and 87 properties across 54 destinations and 8,489 rooms as at F22.
  • We noticed few setbacks on the forensics, particularly with respect to impairment in subsidiary and unusual accounting with revaluation of PPE.
  • While the operations have seen a revival in terms of ARR and margins, LTHL however is yet to reach occupancy levels of pre-covid.

Bandhan Bank | The Road Ahead

By Pranav Bhavsar

  • Bandhan Bank Ltd (BANDHAN IN) reported weak earnings with a flat (-2%) Net Interest Income growth and a +91 YoY growth in provisions.
  • Additional slippage continues to come primarily from the EEB portfolio. The overall advances recorded is 14% YoY growth driven by the Retail segment, including housing and MSME.
  • Improvement in customer behaviour in terms of regularizing accounts is a critical component that needs to be verified and checked for the bank to move ahead.

Morning Views Asia: JSW Infrastructure, Road King Infrastructure, UPL Ltd, Vedanta Resources

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 Thailand: Siam Commercial Bank and more

By | Daily Briefs, Thailand

In today’s briefing:

  • Siam Commercial Bank (SCB TB) – Traversing Generations

Siam Commercial Bank (SCB TB) – Traversing Generations

By Angus Mackintosh

  • Siam Commercial Bank (SCB TB) booked a solid set of 4Q2022 results, with the first NIM expansion in two years and record high net interest income.
  • The bank also provided details of its mothership strategy, which has now come to fruition, with the restructuring process now complete with its increasingly strong digital credentials becoming clearer.
  • Siam Commercial Bank remains attractive on valuations and probably deserves to trade at a premium to peers given its digital credentials but more data may be required to get there.

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Daily Brief Indonesia: GoTo, Ace Hardware Indonesia, Bank Mandiri Persero and more

By | Daily Briefs, Indonesia

In today’s briefing:

  • GoTo: Going Gets Tough
  • Ace Hardware Indonesia (ACES IJ) – Will Expansion Mode Be Enough?
  • Bank Mandiri (BMRI IJ) – Brimming with Convenience and Returns

GoTo: Going Gets Tough

By Shifara Samsudeen, ACMA, CGMA

  • GoTo’s share price lost more than 75% last year following its weaker-than-expected performance and lock-up expiry despite the company entering into a coordinated secondary offering of shares with pre-IPO shareholders.
  • The company’s share price has moved up 24% YTD partially driven by cost cutting measures that is expected to improve the company’s profitability.
  • Nevertheless, we expect this share price rebound to be temporary with e-commerce and food delivery market in Indonesia slowing down.

Ace Hardware Indonesia (ACES IJ) – Will Expansion Mode Be Enough?

By Angus Mackintosh

  • Ace Hardware has been a distinct laggard amongst listed retailers in Indonesia, with its valuations drifting to multi-year lows, given a slow recovery from the pandemic and limited digital strategy. 
  • The company has continued to see lacklustre SSSG finish flat for last year but has recently opined a more optimistic outlook for 2023, planning to open 10-15 new stores.
  • Ace Hardware Indonesia (ACES IJ) trades on 13.7x FY2023E PER and 12.7x FY2024E PER when it used to trade on twice that multiple with not dissimilar growth rates.

Bank Mandiri (BMRI IJ) – Brimming with Convenience and Returns

By Angus Mackintosh

  • Bank Mandiri (BMRI IJ) finished the year with a strong showing of loan growth across the board driven by corporate and commercial loans but micro was also a feature. 
  • Both the bank’s consumer app under Livin’ and its digital corporate platform under Kopra continue to help drive CASA growth and transactions plus the bank is opening “smart” branches. 
  • Bank Mandiri (BMRI IJ) is optimistic about the outlook for loan growth and NIMs in 2023, with its digital initiatives continuing to gain traction and drive growth. Valuations are attractive.

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