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Smartkarma Daily Briefs

Jun 01
0

Daily Brief Indonesia: Mitra Keluarga Karyasehat Tbk, Skorlife, eFishery, JumpStart Coffee and more

By | Daily Briefs, Indonesia

In today’s briefing:

  • Mitra Keluarga Karyasehat (MIKA IJ) – Stepping on the Gas
  • Credit Scoring Firm Rings up $4m to Boost Financial Literacy in Indonesia
  • Indonesian Agritech Firm EFishery Hits Unicorn Status with $108m Series D
  • JumpStart Coffee Gets Fresh Funding, Targets Overseas Expansion

Mitra Keluarga Karyasehat (MIKA IJ) – Stepping on the Gas

By Angus Mackintosh

  • Mitra Keluarga (MIKA IJ) recently booked 1Q2023, where headlines did not reflect the true recovery of the core business given COVID was still a factor boosting last year’s revenues. 
  • Non-COVID inpatient and outpatient volumes were up by +19% YoY reflecting the strength of the recovery as the environment normalizes but occupancy rates still have a significant upside.
  • Mitra Keluarga has started to put foot-to-pedal in terms of expanding new hospitals and increasing capacity at existing hospitals combined with increased efficiencies. Valuations are attractive versus history.

Credit Scoring Firm Rings up $4m to Boost Financial Literacy in Indonesia

By Tech in Asia

  • Financial illiteracy has become a global problem, leading many to make uninformed, crippling decisions. This is especially true in Indonesia.
  • With informal financing and predatory lending running rife, the country has a financial literacy rate of 38%.
  • SkorLife, a credit builder based in the country, looks to change this. Founded by Ongki Kurniawan and Karan Khetan in 2022, the startup allows users to check their credit scores from Indonesia’s bureaus.

Indonesian Agritech Firm EFishery Hits Unicorn Status with $108m Series D

By Tech in Asia

  • Indonesian agritech startup eFishery has raised US$108 million in series D funding, pushing its post-money valuation to US$1.3 billion, according to VentureCap Insights, which tracks regulatory filings.
  • The latest round is led by 42xfund and it saw participation from existing investors Northstar Group and SoftBank Vision Fund II.
  • EFishery last raised US$90 million in a series C funding round in January 2022.

JumpStart Coffee Gets Fresh Funding, Targets Overseas Expansion

By Tech in Asia

  • JumpStart Coffee, an Indonesian startup that makes smart coffee machines, has raised an undisclosed amount in a series B round led by Cool Japan Fund and Living Lab Ventures.
  • Founded in 2018, JumpStart specializes in manufacturing vending machines that can serve over 20 types of coffee and non-coffee drinks.
  • The startup said it has installed 2,000 machines in the Greater Jakarta Area, Bandung, and Surabaya.

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Jun 01
0

Daily Brief India: Adani Ports & Special Economic Zone, Nesco Ltd, Kolte Patil Developers, Vedanta Resources and more

By | Daily Briefs, India

In today’s briefing:

  • Adani Ports – Earnings Flash – FY 2022-23 Results – Lucror Analytics
  • Nesco: BEC Business Is Now Beyond Pre-COVID Level | Foods Business Is Expanding Into New Horizons
  • Kolte Patil: Strong Q4FY23 In Line With The Optimistic Expectations
  • Morning Views Asia: Vedanta Resources

Adani Ports – Earnings Flash – FY 2022-23 Results – Lucror Analytics

By Leonard Law, CFA

Adani Ports and Special Economic Zone’s (APSEZ) FY 2022-23 results were in line with expectations, with revenue and EBITDA exceeding management’s guidance. That said, cargo volume growth slightly missed estimates. Leverage was largely stable (despite heavy outlays for acquisition and capex), thanks to strong earnings improvement. For FY 2023-24, we anticipate the company will generate FCF of INR 50-60 bn, assuming APSEZ does not make any material new acquisitions.

Management reiterated that the company’s priority is to deleverage in FY 2023-24, and guided for Net Debt/EBITDA to improve to 2.5x (from 3.1x in FY 2022-23). There are recent media reports that the Adani Group has committed to USD 10 bn of investments in Vietnam. Management clarified that the investments are meant to be carried out over the medium to long term.

We believe the fallout for Adani Group from Hindenburg Research’s short-sell report in late January 2023 is largely over. We view positively that the group has been addressing some of Hindenburg’s allegations by reducing leverage and raising equity to repay share-backed loans.

Nesco: BEC Business Is Now Beyond Pre-COVID Level | Foods Business Is Expanding Into New Horizons

By Ankit Agrawal, CFA

  • As projected, Nesco’s BEC business has completely normalized and clocked INR 45cr+ revenues in Q4FY23. With this, Nesco clocked FY23 PAT of INR 290cr+, well above our INR 250cr+ estimate.
  • Alongside the BEC business, Nesco’s foods business has also seen significant recovery led by footfalls from the BEC. Independent of BEC also, Nesco Foods is growing significantly on its own.
  • Nesco is on track to earn PAT of INR 320cr+ for FY24, suggesting that at the current market cap of INR 4250cr, it is valued attractively at 13x P/E.

Kolte Patil: Strong Q4FY23 In Line With The Optimistic Expectations

By Ankit Agrawal, CFA

  • Kolte Patil delivered on the optimistic expectations for Q4FY23 which led to a stellar close for FY23 with all-time-high pre-sales and robust deliveries.
  • Its flagship project, Life Republic, was at an inflection point as outlined in our original thesis. It contributed immensely in FY23 and is now all set for accelerated growth.
  • Despite high base of FY23, Kolte Patil is all set to post a strong FY24 with 25% pre-sales growth, led by new launches and strong sustenance sales.

Morning Views Asia: 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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Jun 01
0

Daily Brief China: Tencent, Yashili International Holdings, MoneyHero Global , Mason Group Holdings , Alibaba (ADR), Tam Jai International, Alibaba Group, Perfect Medical Health, Water Oasis and more

By | China, Daily Briefs

In today’s briefing:

  • Tencent Nearing Our Buy Zone
  • Yashili (1230 HK): ​Scheme Doc Out. 23 June Court Meeting
  • Yashili (1230 HK): Scheme Vote on 23 June
  • MoneyHero SPAC Listing: Thoughts on Valuation
  • Mason Group (273 HK): Halted Pursuant To Takeover’s Code
  • Alibaba Cloud: Price War Rages as Nationalization Looms in China
  • Tam Jai International: High-Quality Assets, Low-Quality Capital Allocation
  • Alibaba Potential IPOs – Part 5 – An Early Look at Local Operations
  • Perfect Medical: The Perfect Opportunity to Add
  • Water Oasis: H1 FY23 Results, Moving in the Right Direction

Tencent Nearing Our Buy Zone

By Thomas Schroeder

  • Tencent is nearing our 302 support target with undershoot risk to sub 300, support at 290. HSI continues to trade heavy but reaching oversold levels.
  • The break below 331 acted as the most recent sell trigger and will turn into resistance on the way back up. We turned bearish Tencent back in February. 
  • Need to see lower price with weakening sell volumes for better buy conviction. Lower wedge support the buy zone, sync with an HSI low.

Yashili (1230 HK): ​Scheme Doc Out. 23 June Court Meeting

By David Blennerhassett

  • At long last, Yashili International Holdings (1230 HK) has dispatched the Scheme Document. 
  • The Court Meeting and EGM will be held on the 23 June. The IFA says the Offer is fair. At a ~160% premium to undisturbed, it certainly is. 
  • Assuming the transaction gets up, payment will occur on or before the 13 July. 

Yashili (1230 HK): Scheme Vote on 23 June

By Arun George

  • The Yashili International Holdings (1230 HK) scheme document is out with the court meeting scheduled for 23 June. The IFA considers the HK$1.20 per share offer to be fair and reasonable. 
  • Key conditions include approval by at least 75% disinterested shareholders (<10% disinterested shareholders rejection). The shareholder with a blocking stake should be supportive.
  • This is a done deal. At the last close and for the 13 July payment, the gross and annualised spread is 1.7% and 15.3%, respectively.

MoneyHero SPAC Listing: Thoughts on Valuation

By Shifara Samsudeen, ACMA, CGMA

  • Asia-Based leading personal finance aggregation and comparison platform MoneyHero has filed to go public in the US by merging with Bridgetown Holdings and raise proceeds of up to US$154m.
  • This would give MoneyHero a pre-money enterprise value of US$200m and an equity value of US$198m with post-money EV of US$342m assuming no redemption by Bridgetown’s public shareholders.
  • MoneyHero Global (1534965D HK)  plans to use proceeds from the deal to further accelerate growth and capture market opportunity in the region.

Mason Group (273 HK): Halted Pursuant To Takeover’s Code

By David Blennerhassett

Alibaba Cloud: Price War Rages as Nationalization Looms in China

By Oshadhi Kumarasiri

  • The potential spin-off listing of Alibaba Group (9988 HK) Cloud faces significant challenges from various factors, making the timing particularly challenging for the spin-off.
  • The Cloud Business is experiencing intensifying price competition, while simultaneously facing substantial regulatory risks, particularly with the Chinese Government’s plans to nationalize the cloud computing market.
  • Due to the ongoing price war and the potential risk of nationalization, we believe that Alibaba (ADR) (BABA US) Cloud’s fair value is substantially below $10bn.

Tam Jai International: High-Quality Assets, Low-Quality Capital Allocation

By Steven Chen

  • We tend to shy away from the restaurant industry but decided to make an exception for Tam Jai;
  • The brand has become a household name in Hong Kong and delivers attractive business economics for owners from its home market;
  • However, we see multiple red/yellow flags when it comes to the management’s capital allocation, particularly relating to overseas expansion.

Alibaba Potential IPOs – Part 5 – An Early Look at Local Operations

By Sumeet Singh

  • On 28th Mar 2023, Alibaba (ADR) (BABA US) announced that it would adopt a new organizational and governance structure, splitting into six major business groups and other investments.
  • Alibaba also stated that each of the business groups would be set up as an independent entity with its own board and the groups will eventually seek to list.
  • In our previous notes, we highlighted which divisions could list and looked at some of the divisions in more detail. In this note, we will talk about the local operations.

Perfect Medical: The Perfect Opportunity to Add

By Sameer Taneja

Water Oasis: H1 FY23 Results, Moving in the Right Direction

By Sameer Taneja

  • Water Oasis (1161 HK) H1 FY23 results were encouraging and a step in the positive direction as revenue/PAT improved by 27%/116% YoY ( although below our estimates by 10%/30%).
  • The company paid a semi-annual dividend of 7 cents (9% annualized yield) for an 82% payout ratio. Net cash of 243 mn HKD represents 25% of market capitalization.
  • The company has made several investments in new locations and spent heavily on advertising ( costs up 76% YoY); A positive inflection of trends will bear fruit in H2 2023.

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Jun 01
0

Daily Brief Japan: SBI Shinsei Bank, D.Western Therapeutics Insti, Tokyo Stock Exchange Tokyo Price Index Topix and more

By | Daily Briefs, Japan

In today’s briefing:

  • (Mostly) Asia M&A, May 2023:  Allkem / Livent, InvoCare, Golden Eagle, Yita Coal, Shinsei Bank
  • D. Western Therapeutics Institute (DWTI) (4576 JP) – 1Q Follow-Up
  • The Starting Point Is to Set “Sustainable Expansion of Corporate Value” As a Management Goal

(Mostly) Asia M&A, May 2023:  Allkem / Livent, InvoCare, Golden Eagle, Yita Coal, Shinsei Bank

By David Blennerhassett

  • For the month of May, 8 new deals (firm and non-binding) were discussed on Smartkarma with an overall announced deal size of ~US$15bn.
  • The average premium for the new deals announced (or first discussed) in May was 32%.
  • This compares to the average premium for all deals in 2022 (106 deals), 2021 (165 deals), 2020 (158 deals), and 2019 (145 deals) of 41%, 33%, 31%, and 31% respectively.

D. Western Therapeutics Institute (DWTI) (4576 JP) – 1Q Follow-Up

By Sessa Investment Research

  • According to “Ophthalmology Drugs Global Market Report 2021: COVID 19 Impact and Recovery to 2030” issued by the Business Research Company in Feb-2021, the global ophthalmology drugs market is expected to grow from $22.03 billion in 2020 to $32.64 billion in 2025 (+8.2% CAGR).
  • M&A in this segment has become active in recent years, with global eye care leader Alcon (SIX/NYSE:ALC) acquiring DWTI’s closest rival in the US, Aerie Pharmaceuticals, Inc. in Nov-2022, adding Rhopressa® (similar to DWTI’s GLANATEC®) among others, and Aerie’s development pipeline.
  • Over time with progress in execution of the development pipeline, and as part of growth strategy to diversify revenue streams, DWTI’s basic business model of drug discovery and early out-licensing has evolved to include 1) from 2015, in-licensing of later stage development products, 2) from 2018, collaborative drug creation applying DWTI’s technical expertise to assist in joint R&D of products of other firms, and 3) from 2018, extending development of original in-house products beyond early out-licensing as far as proof of concept (PoC) through Phase IIb.

The Starting Point Is to Set “Sustainable Expansion of Corporate Value” As a Management Goal

By Aki Matsumoto

  • The concern that companies are only striving to develop formal systems and not improving the substance of their corporate governance is shared by the Council of Experts.
  • A solution to avoid formal system development would be to increase the independence of the board to a level that cannot be cleared by a little matching of numbers.
  • For effective engagement, management must be aware of the goal of “sustainable growth and expansion of corporate value” in order to communicate in the same language.

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Jun 01
0

Most Read: Cambricon Technologies Corp, Relia Inc, Empyrean Technology, HSBC Holdings, Eoflow, Liontown Resources, Hyundai Energy Solutions, Yashili International Holdings, Bionote and more

By | Daily Briefs, Most Read

In today’s briefing:

  • CNI Semiconductor Chips Index Rebalance: Multiple Inflows for the Inclusions
  • Relia (4708 JP) Tender Offer Launches – STILL at the Wrong Price for the Wrong Reasons
  • ChiNext/​​ChiNext 50 Index Rebalance: On Expected Lines as Adds Outperform Deletes
  • HSI, HSCEI, HSTECH: Rebalance Flows Post Capping (June 2023)
  • Medtronic’s M&A, Tender Offer, and Taking Private of Eoflow
  • MVIS Global Rare Earth/​​​​​​​Strategic Metals Index Rebalance Preview: Changes Afoot
  • Yashili (1230 HK): ​Scheme Doc Out. 23 June Court Meeting
  • Flow Trading Opportunities Brought by the AI Rally: KRX Semicon Rebalancing in September
  • Yashili (1230 HK): Scheme Vote on 23 June
  • End of Mandatory Lock-Up Periods for 45 Companies in Korea in June 2023

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.

Relia (4708 JP) Tender Offer Launches – STILL at the Wrong Price for the Wrong Reasons

By Travis Lundy

  • In mid-January this year, Mitsui & Co Ltd (8031 JP) announced it would buy out minorities in Relia Inc (4708 JP) (longtime known as Moshi Moshi), a BPO/RPA/AI services company.
  • I said the deal was too cheap, with 44% upside to the midpoint of Target Advisor’s DCF fair value range. Investors needed to exercise their cowbell to get more.
  • Since then, TOPIX has returned ~15%, A peer basket 16%, H2 was possibly kitchen-sinked, but no Mar-2024 forecasts were provided. The Tender starts tomorrow. Noise is still warranted. 

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.

HSI, HSCEI, HSTECH: Rebalance Flows Post Capping (June 2023)

By Brian Freitas

Medtronic’s M&A, Tender Offer, and Taking Private of Eoflow

By Douglas Kim

  • In this insight, we provide the details of Medtronic’s M&A and tender offer for Eoflow. 
  • Currently, Eoflow is trading at 28,050 won which is 6.5% lower than the tender offer price of 30,000 won.
  • Eoflow’s share price is currently comfortably below 30,000 won and we believe this deal has 95-98%+ probability of getting completed within the current M&A framework.

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.

Yashili (1230 HK): ​Scheme Doc Out. 23 June Court Meeting

By David Blennerhassett

  • At long last, Yashili International Holdings (1230 HK) has dispatched the Scheme Document. 
  • The Court Meeting and EGM will be held on the 23 June. The IFA says the Offer is fair. At a ~160% premium to undisturbed, it certainly is. 
  • Assuming the transaction gets up, payment will occur on or before the 13 July. 

Flow Trading Opportunities Brought by the AI Rally: KRX Semicon Rebalancing in September

By Sanghyun Park

  • KRX Semicon has experienced a considerable increase in AUM due to the recent AI rally. Two ETFs tracking SEMICON have a combined AUM of ₩0.6T.
  • The following five stocks are screened as potential additions: ITM Semiconductor, Hyundai Energy Solutions, TEMC, Fine Semitech, and AT Technology.  
  • While it may not be a major flow event, it still presents a trading opportunity worth considering, especially in September, which is relatively less eventful in terms of flows.

Yashili (1230 HK): Scheme Vote on 23 June

By Arun George

  • The Yashili International Holdings (1230 HK) scheme document is out with the court meeting scheduled for 23 June. The IFA considers the HK$1.20 per share offer to be fair and reasonable. 
  • Key conditions include approval by at least 75% disinterested shareholders (<10% disinterested shareholders rejection). The shareholder with a blocking stake should be supportive.
  • This is a done deal. At the last close and for the 13 July payment, the gross and annualised spread is 1.7% and 15.3%, respectively.

End of Mandatory Lock-Up Periods for 45 Companies in Korea in June 2023

By Douglas Kim

  • We discuss the end of the mandatory lock-up periods for 45 stocks in Korea in June 2023, among which 6 are in KOSPI and 39 are in KOSDAQ.
  • These 45 stocks on average could be subject to further selling pressures in June and could underperform relative to the market. 
  • Among these 45 stocks, the top five market cap stocks include Won Tech, Voronoi, Zinus, Bionote, and NanoTIM.

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Jun 01
0

Daily Brief Consumer: Yashili International Holdings, Tesla Motors, Tam Jai International, Alibaba Group, Perfect Medical Health, Water Oasis, Tokyo Stock Exchange Tokyo Price Index Topix, JumpStart Coffee, Mondelez International and more

By | Consumer, Daily Briefs

In today’s briefing:

  • Yashili (1230 HK): ​Scheme Doc Out. 23 June Court Meeting
  • Yashili (1230 HK): Scheme Vote on 23 June
  • Tesla’s Still Bloated Inventory Signals June Sales May Disappoint, Along With Q2 Market Estimates
  • Tam Jai International: High-Quality Assets, Low-Quality Capital Allocation
  • Alibaba Potential IPOs – Part 5 – An Early Look at Local Operations
  • Perfect Medical: The Perfect Opportunity to Add
  • Water Oasis: H1 FY23 Results, Moving in the Right Direction
  • The Starting Point Is to Set “Sustainable Expansion of Corporate Value” As a Management Goal
  • JumpStart Coffee Gets Fresh Funding, Targets Overseas Expansion
  • Mondelez: When Strong Brands Are Properly Managed, Results Follow

Yashili (1230 HK): ​Scheme Doc Out. 23 June Court Meeting

By David Blennerhassett

  • At long last, Yashili International Holdings (1230 HK) has dispatched the Scheme Document. 
  • The Court Meeting and EGM will be held on the 23 June. The IFA says the Offer is fair. At a ~160% premium to undisturbed, it certainly is. 
  • Assuming the transaction gets up, payment will occur on or before the 13 July. 

Yashili (1230 HK): Scheme Vote on 23 June

By Arun George

  • The Yashili International Holdings (1230 HK) scheme document is out with the court meeting scheduled for 23 June. The IFA considers the HK$1.20 per share offer to be fair and reasonable. 
  • Key conditions include approval by at least 75% disinterested shareholders (<10% disinterested shareholders rejection). The shareholder with a blocking stake should be supportive.
  • This is a done deal. At the last close and for the 13 July payment, the gross and annualised spread is 1.7% and 15.3%, respectively.

Tesla’s Still Bloated Inventory Signals June Sales May Disappoint, Along With Q2 Market Estimates

By Vicki Bryan

  • Tesla traditionally sells 50-60% of total quarterly sales in the last month—until now.
  • Stubbornly high inventory levels signal that trend is at risk—along with ambitious market estimates for Q2
  • June deliveries may track lower versus April+May and be down y/y. If so, Q2 deliveries may be little changed or even lower versus Q1 results.

Tam Jai International: High-Quality Assets, Low-Quality Capital Allocation

By Steven Chen

  • We tend to shy away from the restaurant industry but decided to make an exception for Tam Jai;
  • The brand has become a household name in Hong Kong and delivers attractive business economics for owners from its home market;
  • However, we see multiple red/yellow flags when it comes to the management’s capital allocation, particularly relating to overseas expansion.

Alibaba Potential IPOs – Part 5 – An Early Look at Local Operations

By Sumeet Singh

  • On 28th Mar 2023, Alibaba (ADR) (BABA US) announced that it would adopt a new organizational and governance structure, splitting into six major business groups and other investments.
  • Alibaba also stated that each of the business groups would be set up as an independent entity with its own board and the groups will eventually seek to list.
  • In our previous notes, we highlighted which divisions could list and looked at some of the divisions in more detail. In this note, we will talk about the local operations.

Perfect Medical: The Perfect Opportunity to Add

By Sameer Taneja

Water Oasis: H1 FY23 Results, Moving in the Right Direction

By Sameer Taneja

  • Water Oasis (1161 HK) H1 FY23 results were encouraging and a step in the positive direction as revenue/PAT improved by 27%/116% YoY ( although below our estimates by 10%/30%).
  • The company paid a semi-annual dividend of 7 cents (9% annualized yield) for an 82% payout ratio. Net cash of 243 mn HKD represents 25% of market capitalization.
  • The company has made several investments in new locations and spent heavily on advertising ( costs up 76% YoY); A positive inflection of trends will bear fruit in H2 2023.

The Starting Point Is to Set “Sustainable Expansion of Corporate Value” As a Management Goal

By Aki Matsumoto

  • The concern that companies are only striving to develop formal systems and not improving the substance of their corporate governance is shared by the Council of Experts.
  • A solution to avoid formal system development would be to increase the independence of the board to a level that cannot be cleared by a little matching of numbers.
  • For effective engagement, management must be aware of the goal of “sustainable growth and expansion of corporate value” in order to communicate in the same language.

JumpStart Coffee Gets Fresh Funding, Targets Overseas Expansion

By Tech in Asia

  • JumpStart Coffee, an Indonesian startup that makes smart coffee machines, has raised an undisclosed amount in a series B round led by Cool Japan Fund and Living Lab Ventures.
  • Founded in 2018, JumpStart specializes in manufacturing vending machines that can serve over 20 types of coffee and non-coffee drinks.
  • The startup said it has installed 2,000 machines in the Greater Jakarta Area, Bandung, and Surabaya.

Mondelez: When Strong Brands Are Properly Managed, Results Follow

By Vladimir Dimitrov, CFA

  • Mondelez is one of the best-performing large cap consumer staple businesses, while also being a relatively low risk stock.
  • Mondelez remains fairly valued and with that is offering a multiple repricing opportunity, according to a recent investment thesis.
  • The company is offering several repricing opportunities for investors.

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Jun 01
0

Daily Brief Utilities: Naturgy Energy Group SA and more

By | Daily Briefs, Utilities Sector

In today’s briefing:

  • Gemini Postponed Sine Die

Gemini Postponed Sine Die

By Jesus Rodriguez Aguilar

  • S&P has raised Naturgy Energy Group SA (NTGY SM)‘s credit outlook from negative to stable considering that the company may not finally carry out the Gemini spin-off project.
  • Naturgy’s shares do not trade on fundamentals, rather on expectations that IFM tries to increase its stake (free float is just 15%). There’s some potential overhang risk though.
  • IFM has not acquired any significant stake since April, but I would not short the shares as IFM could resume share purchases on an opportunistic basis.

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Jun 01
0

Daily Brief Energy/Materials: Liontown Resources, State Gas Ltd, Vedanta Resources and more

By | Daily Briefs, Energy & Materials Sector

In today’s briefing:

  • MVIS Global Rare Earth/​​​​​​​Strategic Metals Index Rebalance Preview: Changes Afoot
  • State Gas Limited – A Good Time to Be Delivering Production
  • Morning Views Asia: Vedanta Resources

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.

State Gas Limited – A Good Time to Be Delivering Production

By Research as a Service (RaaS)

  • State Gas Limited (ASX:GAS) is a junior energy producer and explorer with assets concentrated in the Bowen Basin, Queensland.
  • The company has been listed on the ASX since October 2017 and is set to make the transition from explorer to producer with the imminent start-up of the Rolleston West CNG Project.
  • Although only a small- scale start-up, first gas is always a critical event driver in demonstrating the commercial potential of the assets and providing a platform from which growth strategies can emanate. 

Morning Views Asia: 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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Jun 01
0

Daily Brief Health Care: Bionote, Mitra Keluarga Karyasehat Tbk, Amili, D.Western Therapeutics Insti, CARSgen Therapeutics, MicroPort Cardiac Rhythm Management and more

By | Daily Briefs, Healthcare

In today’s briefing:

  • End of Mandatory Lock-Up Periods for 45 Companies in Korea in June 2023
  • Mitra Keluarga Karyasehat (MIKA IJ) – Stepping on the Gas
  • East Ventures Backs SG Microbiome Firm Bound for Indonesia
  • D. Western Therapeutics Institute (DWTI) (4576 JP) – 1Q Follow-Up
  • CARSgen Therapeutics (2171.HK) – Pain Points Have Not Been Effectively Resolved
  • Pre IPO MicroPort Cardiac Rhythm Management – The Industry, the Business and the Challenges Ahead

End of Mandatory Lock-Up Periods for 45 Companies in Korea in June 2023

By Douglas Kim

  • We discuss the end of the mandatory lock-up periods for 45 stocks in Korea in June 2023, among which 6 are in KOSPI and 39 are in KOSDAQ.
  • These 45 stocks on average could be subject to further selling pressures in June and could underperform relative to the market. 
  • Among these 45 stocks, the top five market cap stocks include Won Tech, Voronoi, Zinus, Bionote, and NanoTIM.

Mitra Keluarga Karyasehat (MIKA IJ) – Stepping on the Gas

By Angus Mackintosh

  • Mitra Keluarga (MIKA IJ) recently booked 1Q2023, where headlines did not reflect the true recovery of the core business given COVID was still a factor boosting last year’s revenues. 
  • Non-COVID inpatient and outpatient volumes were up by +19% YoY reflecting the strength of the recovery as the environment normalizes but occupancy rates still have a significant upside.
  • Mitra Keluarga has started to put foot-to-pedal in terms of expanding new hospitals and increasing capacity at existing hospitals combined with increased efficiencies. Valuations are attractive versus history.

East Ventures Backs SG Microbiome Firm Bound for Indonesia

By Tech in Asia

  • Amili, a Singapore-based gut microbiome company, has raised an undisclosed sum from East Ventures in a new funding round.
  • The fresh funds will be used for its expansion to Indonesia, focusing on addressing gut health issues specific to the local context.
  • Amili’s current offerings include gut microbiome sequencing services for healthcare professionals and probiotic formulations tailored to Asian consumers. Microbiome sequencing is a method for studying bacteria to fuel research on disease protection.

D. Western Therapeutics Institute (DWTI) (4576 JP) – 1Q Follow-Up

By Sessa Investment Research

  • According to “Ophthalmology Drugs Global Market Report 2021: COVID 19 Impact and Recovery to 2030” issued by the Business Research Company in Feb-2021, the global ophthalmology drugs market is expected to grow from $22.03 billion in 2020 to $32.64 billion in 2025 (+8.2% CAGR).
  • M&A in this segment has become active in recent years, with global eye care leader Alcon (SIX/NYSE:ALC) acquiring DWTI’s closest rival in the US, Aerie Pharmaceuticals, Inc. in Nov-2022, adding Rhopressa® (similar to DWTI’s GLANATEC®) among others, and Aerie’s development pipeline.
  • Over time with progress in execution of the development pipeline, and as part of growth strategy to diversify revenue streams, DWTI’s basic business model of drug discovery and early out-licensing has evolved to include 1) from 2015, in-licensing of later stage development products, 2) from 2018, collaborative drug creation applying DWTI’s technical expertise to assist in joint R&D of products of other firms, and 3) from 2018, extending development of original in-house products beyond early out-licensing as far as proof of concept (PoC) through Phase IIb.

CARSgen Therapeutics (2171.HK) – Pain Points Have Not Been Effectively Resolved

By Xinyao (Criss) Wang

  • The biggest expectation on CARsgen is to break through solid tumor technology (from zero to one).However, it depends on the choices of doctors/patients to see how much clinical benefits would be.
  • The investment value of CARsgen has been transferred from R&D progress of pipeline to its future commercialization outlook/market potential, which however, are the major concerns that investors have for CARsgen.
  • Due to “practical obstacles” in the application of CAR-T therapy, CARsgen’s commercialization prospects are still vague. Share price could remain weak, but its valuation should be higher than JW Therapeutics. 

Pre IPO MicroPort Cardiac Rhythm Management – The Industry, the Business and the Challenges Ahead

By Xinyao (Criss) Wang

  • MicroPort CRM got into CRM device field with global layout mainly through M&A. However, revenue growth in the past three years was unsatisfactory and losses were increasing year by year.
  • The situation where Boston Scientific/Medtronic/Abbott dominate CRM device overseas markets wouldn’t change. Although China market has big potential theoretically, the actual space remains to be seen due to various challenges.
  • This IPO application could be aimed at achieving the terms of redemption agreement. Even MicroPort CRM is not in good shape, it is still better than Microport’s other listed subsidiaries.  

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Jun 01
0

Daily Brief Financials: S&P 500 INDEX, Empiric Student Property, Mason Group Holdings , Thai Life Insurance, SBI Shinsei Bank, Nesco Ltd, Kolte Patil Developers and more

By | Daily Briefs, Financials

In today’s briefing:

  • SPX Met Blow off Zone
  • Quiddity Final Thoughts for F100/​250 June 23: Multiple High-Impact Changes Likely
  • Mason Group (273 HK): Halted Pursuant To Takeover’s Code
  • SET50 Index Rebalance Preview: Should Be Two Changes in June
  • (Mostly) Asia M&A, May 2023:  Allkem / Livent, InvoCare, Golden Eagle, Yita Coal, Shinsei Bank
  • Nesco: BEC Business Is Now Beyond Pre-COVID Level | Foods Business Is Expanding Into New Horizons
  • Kolte Patil: Strong Q4FY23 In Line With The Optimistic Expectations

SPX Met Blow off Zone

By Thomas Schroeder

  • SPX kissed our 4,250 overshoot zone to unwind our 4,120 long. A case of selling the fact as Euphoria fades and reality sets in.
  • RTY remains our top US short and is underperforming the SPX. 1,710 near target with a June bias to crack this pivotal support.
  • US 10yr yield met our rally and sell target at 3.80%. Macro take was to sell yield at 3.80% to test pocket support. USD will lag.

Quiddity Final Thoughts for F100/​250 June 23: Multiple High-Impact Changes Likely

By Travis Lundy

  • In this insight, we take a look at Quiddity’s final predictions for index changes for the  F100 and F250 indices for the June 2023 Rebalance.
  • The index changes are likely to be confirmed after market close today.
  • We expect one change for the F100 index and six changes for the F250 index.

Mason Group (273 HK): Halted Pursuant To Takeover’s Code

By David Blennerhassett

SET50 Index Rebalance Preview: Should Be Two Changes in June

By Brian Freitas

(Mostly) Asia M&A, May 2023:  Allkem / Livent, InvoCare, Golden Eagle, Yita Coal, Shinsei Bank

By David Blennerhassett

  • For the month of May, 8 new deals (firm and non-binding) were discussed on Smartkarma with an overall announced deal size of ~US$15bn.
  • The average premium for the new deals announced (or first discussed) in May was 32%.
  • This compares to the average premium for all deals in 2022 (106 deals), 2021 (165 deals), 2020 (158 deals), and 2019 (145 deals) of 41%, 33%, 31%, and 31% respectively.

Nesco: BEC Business Is Now Beyond Pre-COVID Level | Foods Business Is Expanding Into New Horizons

By Ankit Agrawal, CFA

  • As projected, Nesco’s BEC business has completely normalized and clocked INR 45cr+ revenues in Q4FY23. With this, Nesco clocked FY23 PAT of INR 290cr+, well above our INR 250cr+ estimate.
  • Alongside the BEC business, Nesco’s foods business has also seen significant recovery led by footfalls from the BEC. Independent of BEC also, Nesco Foods is growing significantly on its own.
  • Nesco is on track to earn PAT of INR 320cr+ for FY24, suggesting that at the current market cap of INR 4250cr, it is valued attractively at 13x P/E.

Kolte Patil: Strong Q4FY23 In Line With The Optimistic Expectations

By Ankit Agrawal, CFA

  • Kolte Patil delivered on the optimistic expectations for Q4FY23 which led to a stellar close for FY23 with all-time-high pre-sales and robust deliveries.
  • Its flagship project, Life Republic, was at an inflection point as outlined in our original thesis. It contributed immensely in FY23 and is now all set for accelerated growth.
  • Despite high base of FY23, Kolte Patil is all set to post a strong FY24 with 25% pre-sales growth, led by new launches and strong sustenance sales.

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