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Smartkarma Daily Briefs

Jun 03
0

Daily Brief Japan: Seven & I Holdings, Amvis Holdings Inc, Intelligent Wave, Tokyo Stock Exchange Tokyo Price Index Topix and more

By | Daily Briefs, Japan

In today’s briefing:

  • Seven & I: ValueAct’s Proposals Unlikely to Be Considered, Investor Activism Effectively Over
  • Amvis Holdings Inc (7071 JP): Strong H1FY23 Result; FY23 Guidance Unchanged; Expansion Continues
  • Intelligent Wave Inc. (4847 JP) – 3Q Follow-Up
  • Cash Flow Return Is Necessary Condition for Higher Stock Valuations; Shareholder Return Is Byproduct
  • Japan Remains Leadership; Actionable Pullback in Europe; Downgrading China/Hong Kong

Seven & I: ValueAct’s Proposals Unlikely to Be Considered, Investor Activism Effectively Over

By Oshadhi Kumarasiri

  • Last week, shareholders of Seven & I Holdings (3382 JP) rejected all four of the board nominees proposed by ValueAct.
  • ValueAct, seeing their higher vote count as a modest success, sent a letter to Seven & I, requesting a resumption of discussions despite the failed attempt to remove senior leadership.
  • We think the company is unlikely to seriously consider Value Act’s proposals any longer, indicating the end of the investor activism campaign.

Amvis Holdings Inc (7071 JP): Strong H1FY23 Result; FY23 Guidance Unchanged; Expansion Continues

By Tina Banerjee

  • Amvis Holdings Inc (7071 JP) recorded 42% revenue growth to ¥14.7B in H1FY23, driven by 33% increase in bed capacity and stable utilization rate. Operating profit grew 37% to ¥3.9B.
  • The company has guided for FY23 revenue of ¥30.7B (+33% YoY), operating profit of ¥7.9B (+28% YoY), and net profit of ¥5.4B (+26% YoY).
  • Amvis announced plans to open 16 facilities, steadily progressing to achieve the target of opening 23 facilities in FY24. The company targets utilization rate of 82–85% for existing facilities.

Intelligent Wave Inc. (4847 JP) – 3Q Follow-Up

By Sessa Investment Research

  • IWI held an in-person briefing for 3Q FY23/6 results on Friday, May 12 at the Securities Analysts Association of Japan Kabutocho Heiwa Bldg. Annex 3F, which was also livestreamed via IR.
  • Stock Investment Information portal site Bridge Salon.
  • In SIR’s opinion, this 3Q results presentation hosted by IWI’s CEO and Representative Director Kunimitsu Sato was the most upbeat since he assumed office in Sep-2020. 

Cash Flow Return Is Necessary Condition for Higher Stock Valuations; Shareholder Return Is Byproduct

By Aki Matsumoto

  • The most important factor in increasing stock valuations is overseas investors, and a clue can be found in exploring what kind of companies they tend to invest in.
  • It is a company with high cash holdings and a high growth policy score, i.e., a company that generates ample cash flow. This should be considered a necessary condition.
  • As foreign ownership increases, shareholder returns such as share buybacks will also be implemented to review cash allocations and improve board practices, so these can be considered byproducts.

Japan Remains Leadership; Actionable Pullback in Europe; Downgrading China/Hong Kong

By Joe Jasper

  • There continues to be little traction above $93 on the MSCI ACWI (ACWI-US), which remains the top-end of our anticipated 2023 trading range.
  • At the same time, we cannot get too bearish until there is a break below $90.50 short-term support.
  • EURO STOXX 50 pulling back to 4100-4200 buy area. TOPIX holding above 2120 support. Buy ideas within Technology, Construction Materials, gold miners, Utilities, other defensives.

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Jun 03
0

Daily Brief India: Tata Motors Ltd, ABM Investama and more

By | Daily Briefs, India

In today’s briefing:

  • Weekly Wrap – 02 Jun 2023
  • Asia HY Monthly – May 2023 – Lucror Analytics

Weekly Wrap – 02 Jun 2023

By Charles Macgregor

Lucror Analytics Weekly Wraps provide an overview of all Morning Views comments and reports published by our analyst team in the past week, and also showcase a list of the most-read reports.

In this Insight:

  1. Vedanta Resources
  2. China Jinmao Holdings
  3. Lifestyle International Holdings
  4. Geely Auto
  5. First Pacific Co

and more…

Asia HY Monthly – May 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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Jun 03
0

Daily Brief China: Tata Motors Ltd, ABM Investama, Bilibili Inc and more

By | China, Daily Briefs

In today’s briefing:

  • Weekly Wrap – 02 Jun 2023
  • Asia HY Monthly – May 2023 – Lucror Analytics
  • BILI US, SELL, TP US$14.1, Target Price Change: Thriving Gaming Market Makes Limited Contribution

Weekly Wrap – 02 Jun 2023

By Charles Macgregor

Lucror Analytics Weekly Wraps provide an overview of all Morning Views comments and reports published by our analyst team in the past week, and also showcase a list of the most-read reports.

In this Insight:

  1. Vedanta Resources
  2. China Jinmao Holdings
  3. Lifestyle International Holdings
  4. Geely Auto
  5. First Pacific Co

and more…

Asia HY Monthly – May 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.

BILI US, SELL, TP US$14.1, Target Price Change: Thriving Gaming Market Makes Limited Contribution

By Shawn Yang

  • BILI reported 1Q23 revenue/non-GAAP net income (4.2%)/in-line vs. our estimate, but BILI’s suggested 2Q23 revenue and gross margin are (10%) and (3.5ppts) lower vs. our prior est.; 
  • Gaming will be BILI’s major swing factor.  Although BILI indicated that 2Q23 gaming revenue could decline 10% YoY, we expect that gaming revenue will still grow 6%~ YoY in 2023.; 
  • We maintain SELL rating and cut TP to US$ 14.1. 1Q23’s earning indicates that BILI’s cost saving measures have led to declining MAU.

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Jun 03
0

Most Read: Piotech, Cambricon Technologies Corp, BrainChip Holdings, Liontown Resources, Anycolor, Empyrean Technology, Eoflow, Samhällsbyggnadsbolaget I Norden AB, Seven & I Holdings, Heineken Holding NV and more

By | Daily Briefs, Most Read

In today’s briefing:

  • CES China Semiconductor Chips Index Rebalance: Six Changes in June
  • CNI Semiconductor Chips Index Rebalance: Multiple Inflows for the Inclusions
  • Tax-Loss Selling in Australia – Brief Historical Analysis And A Trade Basket
  • MVIS Global Rare Earth/​​​​​​​Strategic Metals Index Rebalance Preview: Changes Afoot
  • Anycolor (5032 JP) – Moving to Prime Next Week, TOPIX Inclusion Next Month
  • ChiNext/​​ChiNext 50 Index Rebalance: On Expected Lines as Adds Outperform Deletes
  • Medtronic’s Delisting Offer For EOFlow
  • SE600 Jun 23 Rebal: Past Trades Successful, DELs Could Underperform Index over the Next ~2 Weeks
  • Seven & I: ValueAct’s Proposals Unlikely to Be Considered, Investor Activism Effectively Over
  • FEMSA’s Exit from Heineken/Heineken Holding and Share Price Spread

CES China Semiconductor Chips Index Rebalance: Six Changes in June

By Brian Freitas

  • There are 6 changes for the CES China Semiconductor Chips Index that will be implemented at the close on 9 June.
  • All the inclusions are also additions to the CSI 500 Index and the passive flows will come from multiple trackers.
  • The adds have outperformed the deletes over the last couple of weeks and there could be further outperformance over the next two weeks.

CNI Semiconductor Chips Index Rebalance: Multiple Inflows for the Inclusions

By Brian Freitas

  • There are 3 changes for the CNI Semiconductor Chips Index that will be implemented at the close on 9 June.
  • The inclusions will also be added to other indices over the next couple of weeks and there will be inflows from multiple index trackers.
  • The adds have outperformed and with 9 trading days to implementation of the changes and the inclusions also being added to other indices, there could be further outperformance near-term.

Tax-Loss Selling in Australia – Brief Historical Analysis And A Trade Basket

By Travis Lundy

  • I am not a tax advisor and I do not play one on TV but it is a subject of interest in Australia, as an AFR article last year shows.
  • The general gist of the idea is that retail investors in Australia will take gains on things which run up in price, or get taken over, then look for losses.
  • Below I present a study using data from 2012-2022 of how a basket portfolio trade might work.

MVIS Global Rare Earth/​​​​​​​Strategic Metals Index Rebalance Preview: Changes Afoot

By Brian Freitas

  • The review period for the June rebalance ended on 31 May. Announcement of the changes will be made on 9 June with implementation at the close on 16 June.
  • There could be 3 or 4 A-share additions due to their inclusion in Northbound Stock Connect. That in turn expands the index universe and could result in 2-3 deletions.
  • If there are 4 adds and 2 deletes at the June rebalance, estimated one-way turnover at the rebalance will be 13.4% and will result in a one-way trade of US$81m.

Anycolor (5032 JP) – Moving to Prime Next Week, TOPIX Inclusion Next Month

By Travis Lundy

  • Anycolor (5032 JP) IPOed a year ago, rose several-fold, saw the underwriting broker offer a huge target price, then it fell. There was an offering. And then the murders began.*
  • The offering in January, discussed here, created overhang, and the stock fell sharply in the next 6 weeks. Blowout earnings came in mid-March. Along with a TSE Prime transfer application.
  • Now we have the Prime promotion on 8 June, which leads to a TOPIX inclusion on 28 July. 

ChiNext/​​ChiNext 50 Index Rebalance: On Expected Lines as Adds Outperform Deletes

By Brian Freitas

  • There will be 10 changes for the Chinext Price Index (SZ399006 INDEX) and 5 changes for the ChiNext 50 Index. Implementation is at the close on 9 June.
  • One-Way turnover for the Chinext Price Index is estimated at 3.17% while the one-way turnover for the ChiNext50 Index is 6.61%. The one-way trade across both indices is CNY 2.72bn.
  • The adds have outperformed the deletes by a huge margin over the last 3 months and there could be profit taking into implementation.

Medtronic’s Delisting Offer For EOFlow

By David Blennerhassett

  • Back on the 25 May, healthcare company Medtronic Plc (MDT US) announced it had entered into a set of definitive agreements to acquire EOFlow (294090 KS).
  • Via a three-step process – SPAs, issuance of new shares, and a Tender Offer – Medtronic will seek majority control, together with a view to delisting EOFlow.
  • Completion is expected in 4Q23. Regulatory approvals –  domestic and foreign – form part of the conditions. Trading wide to terms. 

SE600 Jun 23 Rebal: Past Trades Successful, DELs Could Underperform Index over the Next ~2 Weeks

By Janaghan Jeyakumar, CFA

  • The June 2023 regular rebalance index changes for the SE600 index and the EURSTX index were announced after the close yesterday.
  • There are 8 ADDs/DELs for the SE600 index and 3 ADDs and 2 DELs for the EURSTX index.
  • In this insight, we take a closer look at our final index flow expectations for June 2023.

Seven & I: ValueAct’s Proposals Unlikely to Be Considered, Investor Activism Effectively Over

By Oshadhi Kumarasiri

  • Last week, shareholders of Seven & I Holdings (3382 JP) rejected all four of the board nominees proposed by ValueAct.
  • ValueAct, seeing their higher vote count as a modest success, sent a letter to Seven & I, requesting a resumption of discussions despite the failed attempt to remove senior leadership.
  • We think the company is unlikely to seriously consider Value Act’s proposals any longer, indicating the end of the investor activism campaign.

FEMSA’s Exit from Heineken/Heineken Holding and Share Price Spread

By Jesus Rodriguez Aguilar

  • FEMSA has placed c.€3.3 billion of Heineken NV (HEIA NA) and Heineken Holding NV (HEIO NA) shares and tap €250 million of existing 2026 Exchangeable bonds. The placement removes a major overhang.
  • The holding structure (equivalence 1 HEIO NA ~ 1 HEIA NO) allows the Heineken family to control the second largest brewer worldwide, with just a 27.3% economic interest (post-FEMSA’s placement).
  • The discount has tightened to 15.8%, still above the 10.4% average of the last ten years, and rather large considering such a simple structure.

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Jun 03
0

Daily Brief Utilities: Tokyo Stock Exchange Tokyo Price Index Topix and more

By | Daily Briefs, Utilities Sector

In today’s briefing:

  • Japan Remains Leadership; Actionable Pullback in Europe; Downgrading China/Hong Kong

Japan Remains Leadership; Actionable Pullback in Europe; Downgrading China/Hong Kong

By Joe Jasper

  • There continues to be little traction above $93 on the MSCI ACWI (ACWI-US), which remains the top-end of our anticipated 2023 trading range.
  • At the same time, we cannot get too bearish until there is a break below $90.50 short-term support.
  • EURO STOXX 50 pulling back to 4100-4200 buy area. TOPIX holding above 2120 support. Buy ideas within Technology, Construction Materials, gold miners, Utilities, other defensives.

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  • ✓ Personalised Alerts
  • ✓ Custom Watchlists
  • ✓ Company Data and News
  • ✓ Events & Webinars
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Jun 03
0

Daily Brief Technical Analysis: Japan Remains Leadership; Actionable Pullback in Europe; Downgrading China/Hong Kong and more

By | Daily Briefs, Technical Analysis

In today’s briefing:

  • Japan Remains Leadership; Actionable Pullback in Europe; Downgrading China/Hong Kong

Japan Remains Leadership; Actionable Pullback in Europe; Downgrading China/Hong Kong

By Joe Jasper

  • There continues to be little traction above $93 on the MSCI ACWI (ACWI-US), which remains the top-end of our anticipated 2023 trading range.
  • At the same time, we cannot get too bearish until there is a break below $90.50 short-term support.
  • EURO STOXX 50 pulling back to 4100-4200 buy area. TOPIX holding above 2120 support. Buy ideas within Technology, Construction Materials, gold miners, Utilities, other defensives.

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  • ✓ Custom Watchlists
  • ✓ Company Data and News
  • ✓ Events & Webinars
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Jun 03
0

Daily Brief Energy/Materials: ABM Investama and more

By | Daily Briefs, Energy & Materials Sector

In today’s briefing:

  • Asia HY Monthly – May 2023 – Lucror Analytics

Asia HY Monthly – May 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.

💡 Before it’s here, it’s on Smartkarma

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The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

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Jun 03
0

Daily Brief ESG: Cash Flow Return Is Necessary Condition for Higher Stock Valuations; Shareholder Return Is Byproduct and more

By | Daily Briefs, ESG

In today’s briefing:

  • Cash Flow Return Is Necessary Condition for Higher Stock Valuations; Shareholder Return Is Byproduct

Cash Flow Return Is Necessary Condition for Higher Stock Valuations; Shareholder Return Is Byproduct

By Aki Matsumoto

  • The most important factor in increasing stock valuations is overseas investors, and a clue can be found in exploring what kind of companies they tend to invest in.
  • It is a company with high cash holdings and a high growth policy score, i.e., a company that generates ample cash flow. This should be considered a necessary condition.
  • As foreign ownership increases, shareholder returns such as share buybacks will also be implemented to review cash allocations and improve board practices, so these can be considered byproducts.

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Jun 03
0

Daily Brief Credit: Weekly Wrap – 02 Jun 2023 and more

By | Credit, Daily Briefs

In today’s briefing:

  • Weekly Wrap – 02 Jun 2023
  • Asia HY Monthly – May 2023 – Lucror Analytics

Weekly Wrap – 02 Jun 2023

By Charles Macgregor

Lucror Analytics Weekly Wraps provide an overview of all Morning Views comments and reports published by our analyst team in the past week, and also showcase a list of the most-read reports.

In this Insight:

  1. Vedanta Resources
  2. China Jinmao Holdings
  3. Lifestyle International Holdings
  4. Geely Auto
  5. First Pacific Co

and more…

Asia HY Monthly – May 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.

💡 Before it’s here, it’s on Smartkarma

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The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

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  • ✓ Personalised Alerts
  • ✓ Custom Watchlists
  • ✓ Company Data and News
  • ✓ Events & Webinars
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Jun 03
0

Daily Brief Quantitative Analysis: Screening for GEMs: June 2023 and more

By | Daily Briefs, Quantitative Analysis

In today’s briefing:

  • Screening for GEMs: June 2023

Screening for GEMs: June 2023

By Wium Malan, CFA

  • An overview (and output) of our machine learning-driven GEM screening model, which seeks to find the best medium-term long ideas within the top 100 stocks in the MSCI GEM Index.
  • The model is based on 1) a quantitative multifactor screening model, enhanced by two AI Technology-based approaches; 2) a Deep Neural Network model, and 3) a Recurrent Neural Network model.
  • Developed over roughly 4 years and implemented in its current state for over 3 years, the model has a solid real-world alpha-generating performance track record, discussed in detail below.

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