Smartkarma Daily Briefs

The likelihood of the merger review not being approved appears to be low. Additionally, the purchase of only 3.8M additional shares is required, leading to a negligible cancellation risk.
It is particularly noteworthy that the offering price of ₩30,000, targeting minority shareholders, may be adjusted upward depending on future share price increases.
While there is a potential allocation risk, as Medtronic aims to delist the company, they are unlikely to lower the target quantity in the tender offer to a risky level.

ISC’s Tender Offer Possibility Is Decreasing, Indicating a Potential Shorting Opportunity

The possibility of SKC securing additional shares other than the planned 40% through a tender offer seems low. This is a basis for the recent short position build-up in ISC.
ISC began to experience an influx of short selling, leading to it being designated as an overheated short-selling stock, and short selling was restricted for one day on the 26th.
We need to pay attention to the potential disappointment in the market, which could lead to a sustained downward correction in the stock price.

Classys (214150 KS): Strong 1Q23 Result Lifted by Overseas Performance and Consumables Sales

By Tina Banerjee

Classys (214150 KS) reported solid performance in 1Q23, with double-digit revenue growth, driven by expansion of domestic consumables sales for Shrink Universe and growth in overseas device and consumables sales.
Operating profit increased 19% YoY to KRW 19.9 billion, leading to 380 basis point margin expansion to 51%. Net profit increased 46% YoY to KRW 18.8 billion.
Classys continues to strengthen its competitiveness through product line and geography expansion. The company has reiterated 2023 revenue guidance of KRW170 billion, representing year-over-year increase of 20%.

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May 27

Daily Brief United States: Intel Corp, Mosaic Co/The, Chevron Corp, Dexcom Inc, Domino’s Pizza, Eli Lilly & Co, Comcast Corp Class A, Etsy Inc, Harris Corp, Keurig Dr Pepper Inc and more

By Smartkarma Daily Briefs | Daily Briefs, United States

In today’s briefing:

Intel Has Big Problems Ahead
The Mosaic Company: A Structural Transition Away from Exports in Phosphates – Key Drivers
Chevron Corporation: Acquisition of PDC Energy As A Part Of Oil & Gas Industry Consolidation & Other Drivers
DexCom Inc.: Launch of G6 Glucose Monitoring System & Other Drivers
Domino’s Pizza Inc.: Store Additions Continue To Drive Growth – Key Drivers
Eli Lilly and Company: Can Rezvoglar Destroy Sanofi’s Insulin Market Share? – Key Drivers
Comcast Corporation: Subscriber Growth Slowdown & Growing Peacock Losses Are Concerning – Key Drivers
Etsy Inc.: Can It Really Outperform The Major Indices? – Key Drivers
L3Harris Technologies Inc.: Launch of Next-Generation NTS-3 Satellite & Other Developments
Keurig Dr Pepper Inc.: Does The Long-Term Growth Potential of Single-Serve Pod Business Make It A Buy? – Key Drivers

Intel Has Big Problems Ahead

By Kevin George

The chip industry is seeing two “transitions” Intel is being phased out with the GPU shift, according to the company.
The company is also expected to be phased out of the chip industry with the next generation of processors.
The chip company is expected to have a new generation of chips in the coming years.

The Mosaic Company: A Structural Transition Away from Exports in Phosphates – Key Drivers

The Mosaic Company had a mixed quarter with revenues of $3.6 billion that were above Wall Street expectations but the company missed out on earnings.
While supply issues are still a worry, this is drawing growers back to the market.
We give The Mosaic Company a ‘Buy’ rating with a revised target price.

Chevron Corporation: Acquisition of PDC Energy As A Part Of Oil & Gas Industry Consolidation & Other Drivers

Chevron once again produced impressive financial results in the most recent quarter and delivered an all-around beat.
Despite 20% lower oil prices, adjusted first-quarter earnings increased by more than $200 million over the previous year.
Adjusted upstream earnings decreased due to realizations, while adjusted downstream earnings grew due to greater refining margins.

DexCom Inc.: Launch of G6 Glucose Monitoring System & Other Drivers

DexCom had a strong quarter and managed an all-around beat with strong organic revenue growth of 19% compared to last year.
The company’s momentum in global CGM adoption remains high, driven by the growing recognition of the unique experience DexCom provides.
The launch of their G7 system has been met with enthusiasm, supported by a successful Super Bowl commercial that generated significant engagement and awareness.

Domino’s Pizza Inc.: Store Additions Continue To Drive Growth – Key Drivers

Domino’s Pizza had a mixed quarter.
The company’s revenues were below Wall Street expectations but its operating income margin increased by 100 basis points year-over-year resulting in an earnings beat.
In the first quarter, Domino’s international company opened 143 new stores while closing 37 others, totaling 106 net new stores.

Eli Lilly and Company: Can Rezvoglar Destroy Sanofi’s Insulin Market Share? – Key Drivers

Eli Lilly is off to a mixed start in 2023, with volume-driven revenue growth led by its incretin portfolio, Verzenio and Jardiance.
The new product category delivered $574 million in sales, while the new product and growth product categories together contributed 20 percentage points to volume increase.
We give Eli Lilly and Company a ‘Hold’ rating with a revised target price.

Comcast Corporation: Subscriber Growth Slowdown & Growing Peacock Losses Are Concerning – Key Drivers

Comcast Corporation started off with 2023 on a mixed note.
While its revenues and earnings were above Wall Street expectations, the total company revenue of $29.7 billion fell 4%.
We give Comcast Corporation a ‘Hold’ rating with a revised target price.

Etsy Inc.: Can It Really Outperform The Major Indices? – Key Drivers

Etsy reported another strong performance and kickstarted the year with an all-around beat.
With a roughly 11% increase in revenue to $641 million, the company’s adjusted EBITDA margin was once again very high at 26.6%.
Etsy also witnessed strong trends in apparel, particularly in personalized and pop culture-related tops, tees, hoodies, sweatshirts, bags, purses, and gift goods.

L3Harris Technologies Inc.: Launch of Next-Generation NTS-3 Satellite & Other Developments

It was a successful first quarter for L3Harris as they delivered an all-around beat while building momentum in orders and backlog.
The company saw top-line growth of 9% across all segments, along with improved operating income in two out of three segments.
They also reaffirmed their 2023 guidance, with a potential bias towards the higher end of the revenue range due to strong revenue growth and significant orders.

Keurig Dr Pepper Inc.: Does The Long-Term Growth Potential of Single-Serve Pod Business Make It A Buy? – Key Drivers

The last quarter proved to be a successful one for Keurig Dr Pepper.
Their U.S. refreshment beverages segment performed exceptionally well, with share gains in multiple categories and significant market share growth for brands like Dr.
Pepper.

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May 27

Daily Brief India: Bank Of Baroda, Tata Motors Ltd, Golden Eagle Retail and more

By Smartkarma Daily Briefs | Daily Briefs, India

In today’s briefing:

Indian Banks Screener: Adding Value Pick Bank of Baroda, Stick with HDFC Bank for Quality
Tata Motors – ESG Report – Lucror Analytics
Weekly Wrap – 26 May 2023

Indian Banks Screener: Adding Value Pick Bank of Baroda, Stick with HDFC Bank for Quality

By Victor Galliano

We add value play Bank of Baroda to the peer group, and to our buy list; we also add liquidity and funding screens and a PEG ratio valuation metric
We keep HDFC Bank as our higher quality bank, with its strong balance sheet, especially on NPA coverage, and further positive momentum from the upcoming HDFC merger
We remain negative on State Bank of India, and we are also cautious on ICICI Bank; Axis bank remains a name to watch, although valuations are far from compelling

Tata Motors – ESG Report – Lucror Analytics

By Trung Nguyen

Lucror Analytics’ ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable).
We view Tata Motors’ ESG as “Adequate”, with “Adequate” Governance and Social pillars, while its Environmental pillar is “Strong”. Controversies are “Immaterial” and Disclosure is “Strong”.

Weekly Wrap – 26 May 2023

By Shifara Samsudeen, ACMA, CGMA

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:

and more…

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May 27

Daily Brief China: Meituan, Jiangxi Rimag Group, NetEase Inc, Golden Eagle Retail, Weibo Corp and more

By Smartkarma Daily Briefs | China, Daily Briefs

In today’s briefing:

Meituan: Strong 1Q with Operating Profits; No Disclosure on User Numbers and Delivery Costs
Jiangxi Rimag IPO Preview: Empowering The Future of Medical Imaging Services in China
NetEase (NTES US, BUY, TP US$106) Earnings Review: Justice Mobile Is the Next Catalyst
Weekly Wrap – 26 May 2023
Meituan (3690 HK, BUY, TP US$170) Target Price Change: Consolidating Market Share… Maintain BUY
Weibo (WB US, BUY, TP US$26.9) Earnings Review: Maintain BUY for Margin Improvement

Meituan: Strong 1Q with Operating Profits; No Disclosure on User Numbers and Delivery Costs

Meituan (3690 HK) ’s 1Q2023 earnings beat consensus estimates and the key highlight was the company turning into adjusted operating profits after two years.
Revenue from Core local commerce continued to see strong growth in earnings though we expected growth rates to decline with pandemic conditions easing off.
Meituan has launched its food delivery app “KeeTa” in Hong Kong which is dominated by Foodpanda and Deliveroo.

Jiangxi Rimag IPO Preview: Empowering The Future of Medical Imaging Services in China

By Andrei Zakharov

Jiangxi Rimag Group (JIR HK), a China-based medical imaging center operator and provider of Rimag cloud services, filed for a Hong Kong IPO.
Jiangxi Rimag Group (JIR HK) was backed by Goldman Sachs, leading VC firms in Asia, Baidu Inc., JD Health, and American healthcare investment firm OrbiMed.
China’s medical imaging industry is experiencing a remarkable transformation, driven by rapid technological advancements, evolving healthcare needs, and supportive government policies.

NetEase (NTES US, BUY, TP US$106) Earnings Review: Justice Mobile Is the Next Catalyst

By Shawn Yang

NetEase reported in-line revenue for 1Q23, while non-GAAP net income exceeded our estimate by 22%.
<Justice Mobile> is set to launch by the end of June. We anticipate that investors may need to wait for some time after June for NetEase’s next potential hit title.
Maintain a BUY with TP unchanged, implying 18X PE in 2023.

Weekly Wrap – 26 May 2023

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:

and more…

Meituan (3690 HK, BUY, TP US$170) Target Price Change: Consolidating Market Share… Maintain BUY

By Shawn Yang

Meituan reported 1Q23’s rev./non-IFRS net income 2.5%/126% vs. our est., the strong margin beat is due to efficiency improvements in all business lines;
To compete with Douyin’s in-store business, Meituan will spend more in 2Q23, however FD and insta-shopping continue to have margin upside.
Our BUY thesis remains unchanged, as we believe investors overestimate Douyin’s impact, while underestimating Meituan’s ability to improve margins.

Weibo (WB US, BUY, TP US$26.9) Earnings Review: Maintain BUY for Margin Improvement

By Shawn Yang

Weibo’s 1Q23 top line was in line with our est., and non-GAAP net income beat our est./cons. by 6.5%/ 7.6%, due to cost-saving measures.
While we dial down its 2Q23 revenue forecast, we remain optimistic about its growth in 2H23, as more brand advertisers gradually recover.
Maintain BUY and TP unchanged, which implies 12X PE in 2023.

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May 27

Daily Brief Indonesia: GoTo, Golden Eagle Retail and more

By Smartkarma Daily Briefs | Daily Briefs, Indonesia

In today’s briefing:

GoTo (GOTO IJ) – Key Initiatives and Foundations
Weekly Wrap – 26 May 2023

GoTo (GOTO IJ) – Key Initiatives and Foundations

By Angus Mackintosh

GoTo released a Newsletter for May which reiterated its progress toward profitability as well as some key initiatives including increasing service fees and expanding use cases for GoPay Coins rewards.
The newsletter also highlighted the release of the Annual Report and its Sustainability report, which are both important documents for longer-term and increasingly ESG-focused investors.
GoTo also highlights a report from the University of Indonesia regarding the company’s socioeconomic impact in the country, which remains huge given its socio-economic reach through ODS and Tokopedia.

Weekly Wrap – 26 May 2023

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:

and more…

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May 27

Daily Brief ESG: Tata Motors – ESG Report – Lucror Analytics and more

By Smartkarma Daily Briefs | Daily Briefs, ESG

In today’s briefing:

Tata Motors – ESG Report – Lucror Analytics

Tata Motors – ESG Report – Lucror Analytics

By Trung Nguyen

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May 27

Daily Brief ECM: Sayona Mining Placement – Has Remained on Schedule with Increased Coverage and more

By Smartkarma Daily Briefs | Daily Briefs, ECM

In today’s briefing:

Sayona Mining Placement – Has Remained on Schedule with Increased Coverage
Jiangxi Rimag IPO Preview: Empowering The Future of Medical Imaging Services in China
L3Harris Technologies Inc.: Launch of Next-Generation NTS-3 Satellite & Other Developments
ResMed Inc.: On Track to Meet Global Demand for Connected CPAP and APAP Devices – Key Drivers
Roper Technologies Inc.: A Disciplined Approach to Capital Deployment – Key Drivers
Etsy Inc.: Can It Really Outperform The Major Indices? – Key Drivers
IQVIA Holdings Inc.: Major Partnership With CENTOGENE & Other Drivers
American Airlines Group Inc.: Improving Premium Cabin Demand Is A Positive Sign – Key Drivers
Exxon Mobil Corporation: Acquisition Of Drilling Rights In Arkansas & Other Drivers

Sayona Mining Placement – Has Remained on Schedule with Increased Coverage

By Ethan Aw

Sayona Mining (SYA AU) is looking to raise around US$129m in its primary follow-on offering. Proceeds will be used for CAPEX needs and working capital, amongst others.
The deal is a slightly large one to digest at 17.9 days of ADV and 12.1% dilution.
In this note, we will talk about the deal dynamics and run the deal through our ECM framework.

Jiangxi Rimag IPO Preview: Empowering The Future of Medical Imaging Services in China

By Andrei Zakharov

Jiangxi Rimag Group (JIR HK), a China-based medical imaging center operator and provider of Rimag cloud services, filed for a Hong Kong IPO.
Jiangxi Rimag Group (JIR HK) was backed by Goldman Sachs, leading VC firms in Asia, Baidu Inc., JD Health, and American healthcare investment firm OrbiMed.
China’s medical imaging industry is experiencing a remarkable transformation, driven by rapid technological advancements, evolving healthcare needs, and supportive government policies.

L3Harris Technologies Inc.: Launch of Next-Generation NTS-3 Satellite & Other Developments

It was a successful first quarter for L3Harris as they delivered an all-around beat while building momentum in orders and backlog.
The company saw top-line growth of 9% across all segments, along with improved operating income in two out of three segments.
They also reaffirmed their 2023 guidance, with a potential bias towards the higher end of the revenue range due to strong revenue growth and significant orders.

ResMed Inc.: On Track to Meet Global Demand for Connected CPAP and APAP Devices – Key Drivers

ResMed delivered a strong set of financial results in the last quarter and managed an all-around beat.
While they are still addressing some supply chain challenges with the AirSense 11 platform, they are on track to meet the global demand for connected CPAP and APAP devices by the end of 2023.
In this report, we have carried out a fundamental analysis of the historical financial statements of the company.

Roper Technologies Inc.: A Disciplined Approach to Capital Deployment – Key Drivers

Roper had a strong quarter which happened to be an all-around beat.
With a solid start to the year, Roper increased its full-year organic growth outlook and EPS guidance, further reinforcing its strong position in the market.
Roper Technologies’ backlog at the end of the first quarter of 2023 was $4.4 billion, up 14% from the end of the fourth quarter of 2022.

Etsy Inc.: Can It Really Outperform The Major Indices? – Key Drivers

Etsy reported another strong performance and kickstarted the year with an all-around beat.
With a roughly 11% increase in revenue to $641 million, the company’s adjusted EBITDA margin was once again very high at 26.6%.
Etsy also witnessed strong trends in apparel, particularly in personalized and pop culture-related tops, tees, hoodies, sweatshirts, bags, purses, and gift goods.

IQVIA Holdings Inc.: Major Partnership With CENTOGENE & Other Drivers

The last quarter proved to be yet another successful period for IQVIA as they delivered an all-around beat.
With an 11% organic growth in revenue, IQVIA demonstrated the strength and diversification of their short- and long-cycle businesses, enabling them to navigate the macroeconomic dynamics effectively.
The demand environment for the industry remained robust, with global clinical trial activity showing resilience and positive prospects for their commercial business.

American Airlines Group Inc.: Improving Premium Cabin Demand Is A Positive Sign – Key Drivers

In 2023, American Airlines Group got off to a good start with revenues above expectations in the latest quarterly result as well as an earnings beat.
In addition to delivering a profit for the quarter, the American Airlines team outperformed its initial EPS projection of roughly breakeven.
American Airlines is also satisfied with its domestic and short-haul international unit revenue results.

Exxon Mobil Corporation: Acquisition Of Drilling Rights In Arkansas & Other Drivers

Despite lower energy prices and refining margins, ExxonMobil produced an all-around beat in the first quarter.
This 250,000 barrel per day development is the biggest refinery addition in the US, helping to meet society’s ongoing demand for transportation fuels.
In addition, ExxonMobil acquired drilling rights in Arkansas to enter the crucial mineral mining industry.

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May 27

Daily Brief Technical Analysis: No Traction Above $93 on ACWI-US or 4400-4415 on EURO STOXX 50. Buys in Defensives/Japan/EM and more

By Smartkarma Daily Briefs | Daily Briefs, Technical Analysis

In today’s briefing:

No Traction Above $93 on ACWI-US or 4400-4415 on EURO STOXX 50. Buys in Defensives/Japan/EM

No Traction Above $93 on ACWI-US or 4400-4415 on EURO STOXX 50. Buys in Defensives/Japan/EM

By Joe Jasper

There continues to be little traction above $93 on MSCI ACWI (ACWI-US), which remains the top-end of our anticipated 2023 trading range. Important downside targets are $86, $84, and $75-77.
Additionally, the EURO STOXX 50 remains below 2-year resistance at 4400-4415.
We remain overweight Europe, Japan, and India, and we prefer to only add exposure on a pullback — especially in Japan where indexes are bullish yet extended.

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May 27

Daily Brief Credit: Weekly Wrap – 26 May 2023 and more

By Smartkarma Daily Briefs | Credit, Daily Briefs

In today’s briefing:

Weekly Wrap – 26 May 2023

Weekly Wrap – 26 May 2023

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:

and more…

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May 27

Daily Brief Event-Driven: EOFlow Tender Offer: Preconditions for Closure and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

EOFlow Tender Offer: Preconditions for Closure, Cancellation Risk, & Targetable Allocation
ISC’s Tender Offer Possibility Is Decreasing, Indicating a Potential Shorting Opportunity

EOFlow Tender Offer: Preconditions for Closure, Cancellation Risk, & Targetable Allocation

The likelihood of the merger review not being approved appears to be low. Additionally, the purchase of only 3.8M additional shares is required, leading to a negligible cancellation risk.
It is particularly noteworthy that the offering price of ₩30,000, targeting minority shareholders, may be adjusted upward depending on future share price increases.
While there is a potential allocation risk, as Medtronic aims to delist the company, they are unlikely to lower the target quantity in the tender offer to a risky level.

ISC’s Tender Offer Possibility Is Decreasing, Indicating a Potential Shorting Opportunity