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Smartkarma Daily Briefs

May 23
0

Most Read: Tokyo Electron, Posco Future M, Meritz Financial Group, HKBN Ltd, Pegatron Corp, Rakuten, Alibaba (ADR), Makalot Industrial and more

By | Daily Briefs, Most Read

In today’s briefing:

  • Rakuten (4755 JP) – A Big Deal With Very Interesting Characteristics – Index Matters
  • Nikkei 225 Vs TOPIX Dynamics
  • Korea: What Are Foreign Investors Buying & Selling?
  • Meritz Financial: Main Target for Flow Trading in KS200 June Rebalancing
  • Merger Arb Mondays (22 May) – HKBN, Newcrest, InvoCare, United Malt, Golden Energy, Penguin, Shinsei
  • Taiwan Top 50 ETF Rebalance: One Change Expected in June
  • Rakuten US$2.4bn Placement – Recent Updates and Comparison to past Deals
  • ECM Asia Takeaways from Hong Kong Investor Meetings – Rakuten, Growatt, JD Industrial and Others
  • Quiddity Leaderboard TDIV Jun 23: Five Changes and US$922mn One-Way Flows
  • SFC’s Consultation Paper On Proposed Amendments To The Takeovers Code

Rakuten (4755 JP) – A Big Deal With Very Interesting Characteristics – Index Matters

By Travis Lundy

  • Yesterday (15 May 2023) just before EOD, an article ran suggesting a ¥300bn capital raise by Rakuten (4755 JP). The stock fell 10% in 10mins. Rakuten hemmed/hawed but didn’t deny.
  • One day later, we have a deal. It is up to 546mm shares including greenshoe, which at the close was ¥333bn. 468mm shares to the public, 79mm to 3rd parties.
  • This increases Real World Float by 95%. In that respect this is vaguely IPO-ish. Investors have to re-underwrite. Then Passive re-shrinks the float. Details matter.

Nikkei 225 Vs TOPIX Dynamics

By Travis Lundy

  • This past week saw dramatic moves in Japanese stock markets. TOPIX +3.1% N225 +4.8% – up the 6th week in a row – closing at their highest in 33 years. 
  • Flows were positive the week before, and I expect we’ll see next week they were positive this past week. But most striking was the interplay between Nikkei 225 and TOPIX.
  • If foreign inflows increase, Nikkei is likely to outperform TOPIX both because of its existence and previous use, and its construction. And that means watching one’s trades, shorts, and executions.

Korea: What Are Foreign Investors Buying & Selling?

By Brian Freitas

Meritz Financial: Main Target for Flow Trading in KS200 June Rebalancing

By Sanghyun Park

  • Meritz Financial confirmed the total number of treasury shares resulting from the mergers, amounting to 5.04% of SO. When combined with the largest shareholder’s stake, the float rate becomes 47.75%.
  • We should focus on direct rebalancing flow through KS200 ETFs on T-1 effective rather than setting it up preemptively. The estimated total AUM of ETFs directly mirroring KS200 is ₩17T.
  • Meritz Financial is expected to receive an inflow of around ₩43B, equivalent to 1.35x ADTV. This is a significant flow impact size as a single-day event.

Merger Arb Mondays (22 May) – HKBN, Newcrest, InvoCare, United Malt, Golden Energy, Penguin, Shinsei

By Arun George

Taiwan Top 50 ETF Rebalance: One Change Expected in June

By Brian Freitas

  • Today was the review cutoff for the June rebalance of the Yuanta/P-Shares Taiwan Top 50 ETF. We see one potential change at the review.
  • Passive trackers are estimated to buy nearly 6 days of ADV on Pegatron Corp (4938 TT) while selling around 1.7 days of ADV on Silergy Corp (6415 TT).
  • Short interest on Pegatron Corp (4938 TT) has continued to drop as the stock has moved higher; Silergy Corp (6415 TT)‘s short interest has risen as the stock has dropped.

Rakuten US$2.4bn Placement – Recent Updates and Comparison to past Deals

By Sumeet Singh

  • Rakuten (4755 JP) aims to raise up to US$2.4bn (JPY323bn) via a global offering.
  • We have covered various aspects of the deal in our earlier notes, see here and here.
  • In this note, we will talk about the updates since our last note, as well as the performance of some of the past large primary raises in Japan.

ECM Asia Takeaways from Hong Kong Investor Meetings – Rakuten, Growatt, JD Industrial and Others

By Sumeet Singh

  • We spent the second half of last week meeting ECM focused clients in Hong Kong.
  • Overall, the mood remains somewhat grim for Hong Kong/China and it will be up to a few upcoming deals to open up the market again.
  • In this note, we talk about some of the feedback for the upcoming IPOs and placements.

Quiddity Leaderboard TDIV Jun 23: Five Changes and US$922mn One-Way Flows

By Janaghan Jeyakumar, CFA

  • In this insight, we take a look at Quiddity’s flow expectations for the June 2023 index rebalance.
  • I currently see 5 ADDs/DELs. Some of these names are different from the ones I specified in my previous insight.
  • I have also discussed some long-short trading ideas involving names with significant flow implications.

SFC’s Consultation Paper On Proposed Amendments To The Takeovers Code

By David Blennerhassett

  • On the 19 May, Hong Kong’s Securities and Futures Commission (SFC) released a 145-page consultation paper on proposed amendments to the Codes on Takeovers and Mergers and Share Buy-backs.
  • The paper proposes amendments to various provisions of the Codes together with the reasons for such changes.
  • The consultation will last for five weeks until 23 June 2023.

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May 23
0

Daily Brief ECM: ECM Asia Takeaways from Hong Kong Investor Meetings – Rakuten and more

By | Daily Briefs, ECM

In today’s briefing:

  • ECM Asia Takeaways from Hong Kong Investor Meetings – Rakuten, Growatt, JD Industrial and Others
  • Nippon Prologis REIT Placement – Well-Flagged and past Deals Have Performed Decently
  • PhilEnergy IPO Valuation Analysis
  • R R Kabel Pre-IPO Tearsheet

ECM Asia Takeaways from Hong Kong Investor Meetings – Rakuten, Growatt, JD Industrial and Others

By Sumeet Singh

  • We spent the second half of last week meeting ECM focused clients in Hong Kong.
  • Overall, the mood remains somewhat grim for Hong Kong/China and it will be up to a few upcoming deals to open up the market again.
  • In this note, we talk about some of the feedback for the upcoming IPOs and placements.

Nippon Prologis REIT Placement – Well-Flagged and past Deals Have Performed Decently

By Ethan Aw

  • Nippon Prologis Reit (3283 JP) is looking to raise US$184m in its primary follow-on offering to acquire one property, namely Prologis Park Soka. 
  • The deal is a somewhat large one to digest, at 14 days of three month ADV but only 3% dilution. 
  • In this note, we will talk about the deal dynamics and run the deal through our ECM framework.

PhilEnergy IPO Valuation Analysis

By Douglas Kim

  • Our base case valuation of PhilEnergy is target price of 41,545 won per share, which represents 38% higher than the high end of the IPO price range of 30,000 won. 
  • We believe a premium valuation multiple to the comps (20%) is appropriate due to PhilEnergy’s higher sales growth rate and higher ROE than the comps in 2021 to 2023.
  • We estimate the company to generate sales of 312.5 billion won in 2023 (up 64.7% YoY) and 361.5 billion won (up 15.7% YoY) in 2024.

R R Kabel Pre-IPO Tearsheet

By Ethan Aw

  • R R Kabel (2333180Z IN) is looking to raise about US$200m in its upcoming India IPO. The deal will be run by Axis Capital, Citigroup, HSBC and JM Financial.  
  • R R Kabel is an Indian consumer electrical company, which primarily sells wires, cables and fast moving electrical goods (FMEG). 
  • According to Technopak, the company is the fastest growing consumer electrical company among its peers in India, growing at a CAGR of 33.0% between FY20 and FY22 (31st Mar 2022). 

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May 23
0

Daily Brief Credit: Morning Views Asia: Golden Eagle Retail and more

By | Credit, Daily Briefs

In today’s briefing:

  • Morning Views Asia: Golden Eagle Retail, Vedanta Resources

Morning Views Asia: Golden Eagle Retail, 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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May 23
0

Daily Brief Thematic (Sector/Industry): SFC’s Consultation Paper On Proposed Amendments To The Takeovers Code and more

By | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

  • SFC’s Consultation Paper On Proposed Amendments To The Takeovers Code
  • Ohayo Japan |SPX Flat;Crunch Time on the Debt; NUGGET: GX Promotion Law – Decarbonization Boom Ahead
  • The Innovations Portfolios – Week Twenty Six
  • The Highlights : Cannabis News for the Week Ending May 19, 2023
  • Weekly Sustainable Investing Surveyor : Week Ended May 19, 2023

SFC’s Consultation Paper On Proposed Amendments To The Takeovers Code

By David Blennerhassett

  • On the 19 May, Hong Kong’s Securities and Futures Commission (SFC) released a 145-page consultation paper on proposed amendments to the Codes on Takeovers and Mergers and Share Buy-backs.
  • The paper proposes amendments to various provisions of the Codes together with the reasons for such changes.
  • The consultation will last for five weeks until 23 June 2023.

Ohayo Japan |SPX Flat;Crunch Time on the Debt; NUGGET: GX Promotion Law – Decarbonization Boom Ahead

By Mark Chadwick

  • OVERSEAS.  SPX Flat as Debt Limit talks Weight; Fed’s Bullard sees 2 more hikes; China Ban’s Micron’s Chips; Ford Moves to secure Lithium supplies. CEO sees Auto prices falling 5%
  • JAPAN. NKY Futs +0.4% premium vs Cash; Japan to tighten rules on Semi exports to China; Kansai Elect,  CyrusOne set up Japan JV to invest in DataCenters
  • NUGGET.  Japan passed the GX Promotion Law that will support 150 trillion of investment over the next 10 years. Decarbonization boom in Japan is just beginning..

The Innovations Portfolios – Week Twenty Six

By Pyari Menon

  • The three companies we write about this week are Raytheon Technologies (RTX US)Beiersdorf AG (BEI GR) and King Slide Works (2059 TT) 
  • For the twenty-six weeks since inception ended 19 May the combined innovation portfolio was +2.5%, versus DJIA-0.9%, S&P500+5.7%, Nasdaq+13.6%, Russell2000 -4.1%, MSCI-ACWI-ETF+6.9%, S&P midcap 400 -2.2%, all in US$ terms
  • Small-Cap (+4.1%) versus Russell2000 (-4.1%) and midcap (+1.9%) versus S&P400 (-2.2%) continues to outperform benchmarks, but the omission of mega-tech names has hurt large-cap portfolio (+2.6%) versus S&P500 (+5.7%) . 

The Highlights : Cannabis News for the Week Ending May 19, 2023

By Water Tower Research

  • Columbia Care (NEO: CCHW, OTCQX: CCHWF) reported 1Q revenue of $124.5 million, down 1.3% Q/Q and up 1.2% Y/Y.
  • This beat consensus of $123.0 million. The revenue increase was driven by three new stores and strength in its New Jersey, Virginia, and West Virginia operations.
  • 1Q adjusted EBITDA declined to $16.4 million from $17.4 million in 4Q. This was below consensus of $17.4 million.

Weekly Sustainable Investing Surveyor : Week Ended May 19, 2023

By Water Tower Research

  • WTR Sustainable Index: During the week ended May 19, 2023, the WTR Sustainable Index outperformed the broader market, rising 4.4% W/W versus the S&P 500 Index (up 1.6%), the Russell 2000 Index (up 1.9%), and the Nasdaq Composite Index (up 3.0%).
  • Advanced Transportation Solutions (69.0% of the index) drove the index’s outperformance, rising 6.2%, while Energy Technology (7.9% of the index) was up 0.1% and Industrial Climate and Ag Technology was up 0.9%.
  • Valuation: Based on forward 12-month consensus estimates, the current P/E ratio of the WTR Sustainable index is 25.9x versus 19.5x for the S&P 500.

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May 23
0

Daily Brief Event-Driven: Taiwan Top 50 ETF Rebalance: One Change Expected in June and more

By | Daily Briefs, Event-Driven

In today’s briefing:

  • Taiwan Top 50 ETF Rebalance: One Change Expected in June
  • Rakuten US$2.4bn Placement – Recent Updates and Comparison to past Deals
  • Quiddity Leaderboard TDIV Jun 23: Five Changes and US$922mn One-Way Flows
  • Nippon Prologis (3283 JP) Offering: Lower Premium Vs Peers than Last Time
  • Quiddity Leaderboard T50/​​100 Jun 23: One T50 Change and Four T100 Changes (With TDIV Implications)
  • Nucleus Clyde/​Curtis Banks: Update

Taiwan Top 50 ETF Rebalance: One Change Expected in June

By Brian Freitas

  • Today was the review cutoff for the June rebalance of the Yuanta/P-Shares Taiwan Top 50 ETF. We see one potential change at the review.
  • Passive trackers are estimated to buy nearly 6 days of ADV on Pegatron Corp (4938 TT) while selling around 1.7 days of ADV on Silergy Corp (6415 TT).
  • Short interest on Pegatron Corp (4938 TT) has continued to drop as the stock has moved higher; Silergy Corp (6415 TT)‘s short interest has risen as the stock has dropped.

Rakuten US$2.4bn Placement – Recent Updates and Comparison to past Deals

By Sumeet Singh

  • Rakuten (4755 JP) aims to raise up to US$2.4bn (JPY323bn) via a global offering.
  • We have covered various aspects of the deal in our earlier notes, see here and here.
  • In this note, we will talk about the updates since our last note, as well as the performance of some of the past large primary raises in Japan.

Quiddity Leaderboard TDIV Jun 23: Five Changes and US$922mn One-Way Flows

By Janaghan Jeyakumar, CFA

  • In this insight, we take a look at Quiddity’s flow expectations for the June 2023 index rebalance.
  • I currently see 5 ADDs/DELs. Some of these names are different from the ones I specified in my previous insight.
  • I have also discussed some long-short trading ideas involving names with significant flow implications.

Nippon Prologis (3283 JP) Offering: Lower Premium Vs Peers than Last Time

By Janaghan Jeyakumar, CFA

  • Japan’s largest logistics REIT Nippon Prologis Reit (3283 JP) (“NPR”) announced a US$183mn follow-on equity offering to fund their recent acquisition of a logistics facility.
  • The primary offer quantity will be 86,851 units out of which 51,090 units and 35,761 units are expected to be allocated for domestic and international investors, respectively. 
  • Below is a closer look at the details of this offering and the potential of this offering to trigger strong secondary market performance in the following weeks.

Quiddity Leaderboard T50/​​100 Jun 23: One T50 Change and Four T100 Changes (With TDIV Implications)

By Janaghan Jeyakumar, CFA

  • In this insight, we take a look at the names leading the race to become ADDs/DELs for the T50 and T100 Indices for the June 2023 Rebalance.
  • I see one change for the T50 index and four changes for the T100 index.
  • Even though our standalone flow expectations for the T100 index is insignificant, there is one name with important flow consequences in June 2023.

Nucleus Clyde/​Curtis Banks: Update

By Jesus Rodriguez Aguilar

  • Deal remains subject to approvals from FCA, PRA, SRA and clearance by CMA. Curtis said the scheme will likely be delayed until Q3 2023. There’re potential antitrust and tech integration issues.
  • Curtis trades at 15x Fwd P/E and the spread has widened to 7.7%. Some event-driven funds are cashing in partially while others are taking advantage of the blip.
  • I think there’s still a reasonably good chance of a deal happening (implied c.68%), but considering issues in recent situations (Wood, EMIS, THG, even Caverion), investors’ concerns can be understood.

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May 23
0

Daily Brief Equity Bottom-Up: Alibaba (BABA US): What It Takes for Re-Rating and more

By | Daily Briefs, Equity Bottom-Up

In today’s briefing:

  • Alibaba (BABA US): What It Takes for Re-Rating
  • Grab (GRAB US) – Living in an Ethereal World
  • Kuaishou (1024 HK): 1Q23, All Business Lines Accelerated
  • Eve Energy (300014 CH): Hooked On Lithium
  • Kuaishou 1Q2023: Upbeat Quarter with a Small Share Buyback
  • NTES.US: NetEase Holds Annual Game Conference, Announced New Game Pipelines, and Our Estimations(+)
  • South Korea Banks Screen; Focus on Hana Financial (086790 KS) & Industrial Bank of Korea (024110 KS)
  • Sambu Construction: Likely to Be Included in Ukraine Reconstruction Projects
  • Getting Tactical with Nasdaq-100 NDX ($QQQ): Valuation Disconnected Via Its Cost of Capital
  • 3M Company – Equity Research Flash Note – March 3, 2023

Alibaba (BABA US): What It Takes for Re-Rating

By Eric Chen

  • Weaknesses of BABA stock and China tech sector in general post their strong earnings recovery for March quarter suggest market’s concerns centering around growth outlook.
  • BABA fundamental has tracked well to our projection since last November. P/E multiple contraction – which priced in too much pessimism – prevented our bullish call from materializing, for now.
  • We stick to our thesis that March quarter results set stage for BABA re-rating on sustained recovery, well-executed overhaul effectively unlocking value and investors’ renewed appetite for China assets.

Grab (GRAB US) – Living in an Ethereal World

By Angus Mackintosh

  • Grab‘s1Q2023 made for positive reading with rapid revenue growth and a quickening of progress towards profitability but the focus perplexingly seemed to be drawn to the ethereal measure of GMV. 
  • The delivery segment saw the most significant GMV slowdown, impacted by a high base and seasonality but saw rapid revenue growth and record margins. Mobility remained the cash cow.
  • Grab‘s profitability improved considerably in 1Q2023 across all segments, with management upgrading the outlook for FY2023 for adjusted EBITDA and maintaining its breakeven target for 4Q2023, which now looks conservative.

Kuaishou (1024 HK): 1Q23, All Business Lines Accelerated

By Ming Lu

  • The revenue growth rates of all business lines accelerated in 1Q23.
  • Operating losses shrank to RMB1.3 bn in 1Q23, less than RMB3 bn in two previous quarters.
  • We believe the stock has an upside of 66% for the yearend 2023.

Eve Energy (300014 CH): Hooked On Lithium

By David Blennerhassett

  • Lithium battery maker, EVE Energy (300014 CH), is expected to invest US$2.3bn in expanding its battery manufacturing capabilities in two new plants. 
  • Both plants are expected to come online within 18-24 months, depending on market conditions and various approvals. 
  • Eve is down 57% from its December 2021 high, and trading around its lowest level since November 2020, excluding a brief dip in April 2022. 

Kuaishou 1Q2023: Upbeat Quarter with a Small Share Buyback

By Shifara Samsudeen, ACMA, CGMA

  • Kuaishou Technology (1024 HK) ’s 1Q2023 earnings were above consensus estimates with the company reporting positive adj. EBITDA and adj. net profit during the quarter.
  • Operating profit margin of the domestic business further improved while the company managed to significantly reduce operating losses of the overseas business during the quarter.
  • Kuaishou also announced a small share buyback worth of HK$4bn which further affirms the company’s improving fundamentals and should help attract investors.

NTES.US: NetEase Holds Annual Game Conference, Announced New Game Pipelines, and Our Estimations(+)

By Shawn Yang

  • In the evening of May 20th, NetEase held an online conference where it announced release dates for games…
  • …that It has Previously Announced, and Unveiled New Titles that Will Be Launched in the Future.
  • Overall, June Will Be the Peak Month for Newly Launched Titles from NetEase, with One Big Game (Justice Mobile) And Two Smaller Games (Badlanders and Racing Mobile)

South Korea Banks Screen; Focus on Hana Financial (086790 KS) & Industrial Bank of Korea (024110 KS)

By Victor Galliano

  • In our latest South Korean banks screener; we stick with quality play Hana Financial and deep value Industrial Bank of Korea, despite rising credit quality headwinds
  • We introduce delinquency ratio charts that show that NPLs and other poor quality credits are on a rising trend, yet most banks have healthy NPL provisions coverage
  • Hana has a low PBV ratio relative to its premium ROE and an undemanding PEG; Industrial Bank of Korea has attractive multiples, PEG ratio and near top returns versus peers

Sambu Construction: Likely to Be Included in Ukraine Reconstruction Projects

By Douglas Kim

  • On 22 May, it was announced that Sambu Construction was invited to the Ukraine Global Reconstruction Forum held in Warsaw and Krakow, Poland from 22 to 25 May. 
  • Sambu Construction is likely to be one of the Korean construction companies to be involved in the Ukraine reconstruction projects. 
  • The total cost of reconstruction of Ukraine has been estimated from about $0.4 trillion to $1.1 trillion.

Getting Tactical with Nasdaq-100 NDX ($QQQ): Valuation Disconnected Via Its Cost of Capital

By Maverick Equity Research

  • First of all, let’s see how the Nasdaq-100 (QQQ) did in 2023 along with the S&P 500 (SPY) and the Dow Jones (DIA): QQQ with a big 21.64% return in 2023 & outperforming by a big margin the other 2 main indices.
  • For an even broader perspective, US indices 2023 performance shown in this order: Nasdaq 100 (NDX) > S&P 500 (SPX) > S&P Midcap 400 MID > Russel 2000 (RTY) > Russell Microcap (RMICRO).

  • In short, from Megacaps > to Microcaps: Nasdaq 100 (NDX) leading by a big margin.

3M Company – Equity Research Flash Note – March 3, 2023

By VRS (Valuation & Research Specialists)

  • 3M Company is a diversified technology company.
  • The Company is a manufacturer and marketer of a variety of products and services.
  • It operates through four segments: Safety and Industrial, Transportation and Electronics, Health Care, and Consumer. Its Safety and Industrial segment include abrasives, auto- motive aftermarket, closure and masking systems, electrical markets, personal safety, roofing granules, and industrial adhesives and tapes.

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May 23
0

Daily Brief Macro: Macro Watch – Everything Related to the Deposit Crisis Keeps Worsening Beneath the Hood and more

By | Daily Briefs, Macro

In today’s briefing:

  • Macro Watch – Everything Related to the Deposit Crisis Keeps Worsening Beneath the Hood
  • FSC to Reduce CFD Derivatives Transactions in Korea
  • The Week That Was in ASEAN@Smartkarma – Sea Ltd Buoyant, Grab Delivering, and DXN IPO
  • China Recovery – Real Estate
  • Comment on Exchange Rate EUR/USD – March 31, 2023
  • Significant Looming Gyrations in US Banking Liquidity as Reserves Approach Key Threshold
  • CX Daily: Court Ruling Sets Off Debate About Bond Fraud Compensation

Macro Watch – Everything Related to the Deposit Crisis Keeps Worsening Beneath the Hood

By Andreas Steno

  • Given a lack of an imminent economic crash risk, bond bears have been back in the driver’s seat.
  • No news is bond bearish news, which in turn is likely to exacerbate the already worsening root cause of the deposit/bank crisis.
  • We are on high alert for the ramifications of the price action in the USD.

FSC to Reduce CFD Derivatives Transactions in Korea

By Douglas Kim

  • Due to the recent crash in numerous Korean stocks related to the CFDs, FSC announced that it plans to restrict the amount of leverage related to CFD products.
  • CFDs will be considered as personal credit extensions and thus should be included in the credit limit of securities companies. 
  • Given the propensity of retail investors to be net-long, the greater restriction on the credit limit of securities limit could add to further selling pressures on the Korean stock market. 

The Week That Was in ASEAN@Smartkarma – Sea Ltd Buoyant, Grab Delivering, and DXN IPO

By Angus Mackintosh

China Recovery – Real Estate

By Untying The Gordian Knot

  • Until April, China A shares saw sustained Northbound Inflows.
  • In January 2023, foreign investors invested a record $100 billion in China A shares.
  • This was more than 2022, which was $90 billion. We have started to see some outflows in May, but this is yet to be a trend.

Comment on Exchange Rate EUR/USD – March 31, 2023

By VRS (Valuation & Research Specialists)

  • The EUR/USD exchange rate has moved upwards with significant fluctuations over the course of March 2023.
  • As it can be observed in the main graph (Graph 1), there was a period of fluctuations in the exchange rate but with a steady upward trend.
  • The exchange rate fluctuated significantly over the course of the month reaching a high of 1.0901 on March 30th.

Significant Looming Gyrations in US Banking Liquidity as Reserves Approach Key Threshold

By Said Desaque

  • Bank reserves have fallen since December 2021 towards the lowest comfortable threshold deemed by the Fed. Renewed Treasury borrowing will intensify the downward pressure in the coming months.
  • Lower debt issuance by Federal Home Loan Banks in the coming months will help to boost money market funds’ participation in the Reverse Repo Programme, thereby reducing bank reserves. 
  • Rising stress in the repo market in September 2019 prompted the Fed to buy T-bills. The Fed could repeat its 2019 response, but this action would not constitute quantitative easing.

CX Daily: Court Ruling Sets Off Debate About Bond Fraud Compensation

By Caixin Global

  • Bonds /: In Depth: Court ruling sets off debate about bond fraud compensation
  • Ukraine /: Chinese peace envoy meets Zelenskyy in Ukraine
  • Regulator /: China deploys former Everbright chairman to new financial commission

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May 23
0

Daily Brief Crypto: Convergence of Artificial Intelligence and Web3 and more

By | Crypto, Daily Briefs

In today’s briefing:

  • Convergence of Artificial Intelligence and Web3
  • Why Is Tether’s Market Cap Approaching ATH?

Convergence of Artificial Intelligence and Web3

By Ocular

  • Introduction Over the past few months, we have seen how ChatGPT has taken the world by storm.
  • It is estimated that ChatGPT reached 100 million monthly active users in Jan 2023, just two months after launch, making it the fastest-growing consumer application in history.
  • The popularity of ChatGPT has reignited conversations on the potential of artificial intelligence (AI).

Why Is Tether’s Market Cap Approaching ATH?

By Kaiko

  • Ever since the March banking crisis, crypto trade volume and prices have been in the doldrums, with no strong movements in either direction.
  • Over the weekend, daily volume dropped to multi-year lows.
  • Yet, amid the lull, Tether’s market cap is quickly approaching a new all time high, with the total supply currently at $82.9 billion.

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May 23
0

Daily Brief Health Care: Johnson & Johnson, Ansell Ltd, Consun Pharmaceutical and more

By | Daily Briefs, Healthcare

In today’s briefing:

  • Johnson & Johnson Inc. – Equity Research Flash Note – March 24, 2023
  • Ansell Ltd (ANN AU): Macro Headwind to Negatively Impact Near-Term Financial Performance
  • Consun Pharmaceutical (1681.HK) – Undervalued. Good Performance Growth Will Continue

Johnson & Johnson Inc. – Equity Research Flash Note – March 24, 2023

By VRS (Valuation & Research Specialists)

  • Johnson & Johnson is a diversified healthcare products company.
  • The Company is engaged in the re- search and development, manufacture and sale of a range of products in the healthcare field.
  • It operates through three segments: Consumer Health, Pharmaceutical and MedTech. Its primary focus is products related to human health and well-being.

Ansell Ltd (ANN AU): Macro Headwind to Negatively Impact Near-Term Financial Performance

By Tina Banerjee

  • Ansell Ltd (ANN AU) reported weak H1FY23 result. Strong growth in industrial more than offset by lower healthcare sales leading to 11.5% overall revenue decline on an organic constant currency-basis.
  • Healthcare business sales declined 21.9% YoY on an organic constant currency-basis, mainly dragged by a 38% YoY decline in examination/single-use glove revenue with reductions in both price and volume.
  • Ansell has revised FY23 EPS guidance downward to $1.10–1.20 (down 21% YoY at mid-point) from $1.15–1.35 earlier, reflecting market condition in healthcare GBU.

Consun Pharmaceutical (1681.HK) – Undervalued. Good Performance Growth Will Continue

By Xinyao (Criss) Wang

  • Despite unfriendly external environment in 2022, Consun Pharmaceutical (1681 HK) still achieved stable performance growth. The Company has maintained a consistently high level of dividend payout, which is commendable.
  • The rapid sales expansion of commercialized products has laid the foundation for the high-quality growth of Consun, and the continuously improving profitability further confirms its growth certainty.
  • Based on the current market value, we think Consun is undervalued considering its RMB3 billion cash balance by 2022. It is expected to usher in valuation repair in the future.

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May 23
0

Daily Brief Industrials: EVE Energy, Sambu Construction, R R Kabel, 3M Co, VinFast, Greenland Technologies Holdi, Trimas Corp and more

By | Daily Briefs, Industrials

In today’s briefing:

  • Eve Energy (300014 CH): Hooked On Lithium
  • Sambu Construction: Likely to Be Included in Ukraine Reconstruction Projects
  • R R Kabel Pre-IPO Tearsheet
  • 3M Company – Equity Research Flash Note – March 3, 2023
  • On The Fast Track
  • Greenland Technologies – Solid 1Q Results Show Further Recovery in Transmission Business
  • TRS: Package of Catalysts, Initiating with Buy

Eve Energy (300014 CH): Hooked On Lithium

By David Blennerhassett

  • Lithium battery maker, EVE Energy (300014 CH), is expected to invest US$2.3bn in expanding its battery manufacturing capabilities in two new plants. 
  • Both plants are expected to come online within 18-24 months, depending on market conditions and various approvals. 
  • Eve is down 57% from its December 2021 high, and trading around its lowest level since November 2020, excluding a brief dip in April 2022. 

Sambu Construction: Likely to Be Included in Ukraine Reconstruction Projects

By Douglas Kim

  • On 22 May, it was announced that Sambu Construction was invited to the Ukraine Global Reconstruction Forum held in Warsaw and Krakow, Poland from 22 to 25 May. 
  • Sambu Construction is likely to be one of the Korean construction companies to be involved in the Ukraine reconstruction projects. 
  • The total cost of reconstruction of Ukraine has been estimated from about $0.4 trillion to $1.1 trillion.

R R Kabel Pre-IPO Tearsheet

By Ethan Aw

  • R R Kabel (2333180Z IN) is looking to raise about US$200m in its upcoming India IPO. The deal will be run by Axis Capital, Citigroup, HSBC and JM Financial.  
  • R R Kabel is an Indian consumer electrical company, which primarily sells wires, cables and fast moving electrical goods (FMEG). 
  • According to Technopak, the company is the fastest growing consumer electrical company among its peers in India, growing at a CAGR of 33.0% between FY20 and FY22 (31st Mar 2022). 

3M Company – Equity Research Flash Note – March 3, 2023

By VRS (Valuation & Research Specialists)

  • 3M Company is a diversified technology company.
  • The Company is a manufacturer and marketer of a variety of products and services.
  • It operates through four segments: Safety and Industrial, Transportation and Electronics, Health Care, and Consumer. Its Safety and Industrial segment include abrasives, auto- motive aftermarket, closure and masking systems, electrical markets, personal safety, roofing granules, and industrial adhesives and tapes.

On The Fast Track

By subSPAC

  • Last week, Vietnamese Electric Vehicle maker Vinfast announced plans to go through a colossal $27 billion SPAC merger with Spade Acquisition Corp, putting it firmly amongst the likes of EV upstarts Lucid Motors and Polestar Electric.
  • Luxury EV maker Lucid debuted through a $24 billion deal in 2021, while Swedish EV maker Polestar previously went public in 2022 through a $20 billion merger.
  • However, while both deals were characterized by initial excitement, the enthusiasm has given way to the sobering realities of the growing pains of being an EV upstart.

Greenland Technologies – Solid 1Q Results Show Further Recovery in Transmission Business

By Water Tower Research

  • Reported 1Q EPS of $0.11 on revenue of $22.1 million, up from the prior quarter’s loss of $0.08 per share on $19.34 million in revenue.
  • The performance topped the results of the past three quarters, showing the continued recovery of the transmission business in China, which had been affected by the severe COVID restrictions and shutdowns.
  • This is particularly encouraging as 1Q is typically the seasonally weakest quarter due to the Chinese New Year holiday and manufacturing restocking.

TRS: Package of Catalysts, Initiating with Buy

By Hamed Khorsand

  • We are initiating coverage of TriMas Corp. (TRS) with a Buy Rating and $40 target.
  • TRS is an underfollowed industrial company with the ability to grow from multiple product lines with free cash flow that supports debt reduction and the purchase of tuck-in acquisitions
  • TRS’s largest segment is packaging, which has faced severe reduction in order volume over the past three quarters, but quoting activity is rising

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