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Smartkarma Daily Briefs

May 09
0

Daily Brief India: Mankind Pharma, Global Health (Medanta) and more

By | Daily Briefs, India

In today’s briefing:

  • Mankind Pharma IPO Trading – Strong Insti Demand Makes up for Retail Lag
  • Global Health (Medanta) Lockup – Good Name but Seems Fairly Valued

Mankind Pharma IPO Trading – Strong Insti Demand Makes up for Retail Lag

By Sumeet Singh

  • Mankind Pharma  raised around US$527m in its upcoming India IPO.
  • MP is a pharmaceutical company engaged in developing, manufacturing and marketing a range of pharmaceutical formulations across various acute and chronic therapeutic areas, as well as several consumer healthcare products.
  • We have looked at various aspects of the deal in our previous note, in this note, we talk about the demand and trading dynamics.

Global Health (Medanta) Lockup – Good Name but Seems Fairly Valued

By Ethan Aw

  • Global Health (Medanta) (MEDANTA IN) raised around US$268m in its India IPO. The stock was listed on 16th Nov 2022, its six-month lockup will expire on 11th May 2023.
  • Global Health (GH) is a hospital network that operates under the Medanta brand. The firm currently has five hospitals in operation and one more planned for development.
  • In this note, we will talk about the lock-up dynamics and updates since our last note.

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May 09
0

Daily Brief Japan: Hoya Corp, Nissin Foods Holdings, Aeon Co Ltd, Alfresa Holdings and more

By | Daily Briefs, Japan

In today’s briefing:

  • Hoya (7741) | A Visionary Company with a Blurry Future
  • Nissin Foods’ FQ4 Earnings: A Possible 59% Operating Profit Surprise?
  • Aeon Will Own Japan’s Two Largest Supermarket Groups with Inageya Purchase
  • Alfresa Holdings (2784 JP): FY23 Result Is Expected to Exceed Previous Forecast

Hoya (7741) | A Visionary Company with a Blurry Future

By Mark Chadwick

  • Hoya has an impressive business model that results in high Returns on Invested Capital
  • Hoya reported strong Q4 results but there is little for investors to get excited about in the outlook
  • We see a lack of catalysts and an expensive valuation as working against the stock in the short term

Nissin Foods’ FQ4 Earnings: A Possible 59% Operating Profit Surprise?

By Oshadhi Kumarasiri

  • Nissin Foods Holdings (2897 JP) to report FQ4 results on May 10th with ¥158.5bn revenue and ¥8.1bn operating profit expected according to revised Feb 2023 guidance.
  • Consensus predicts Nissin Foods’ operating profit to be ¥6.6bn from a revenue of ¥167.8bn, which is lower than the company’s latest annual guidance.
  • Meanwhile, a higher FQ4 operating profit of ¥10.5bn is expected based on our analysis, exceeding consensus by 59%.

Aeon Will Own Japan’s Two Largest Supermarket Groups with Inageya Purchase

By Michael Causton

  • Last year saw the consolidation of several supermarket chains in Shikoku and Chugoku by Aeon, creating Japan’s largest supermarket group. 
  • Now, Aeon has now announced that it will expand its existing stake in Inageya, rolling the company into USMH and creating another, even larger food operation and Japan’s biggest yet.
  • Aeon is looking for dominance in Tokyo and may seek more acquisitions but rivals are unlikely to give it a free hand nor say no to acquisitions of their own.

Alfresa Holdings (2784 JP): FY23 Result Is Expected to Exceed Previous Forecast

By Tina Banerjee

  • Alfresa Holdings (2784 JP) revised its consolidated performance forecast for FY23. Revenue, operating profit, and net profit forecast have been raised by 3%, 2%, and 21%, respectively.
  • This is attributed to greater-than-expected growth in ethical pharmaceuticals market and the company’s recovery from the bidding nomination suspension from medical institutions stemming from a violation of the Antimonopoly Act.
  • In March 2023, Alfresa received a cease and desist order and a surcharge payment order from the Japan Fair Trade Commission (FTC) in relation to violation of the Antimonopoly Act.

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May 09
0

Most Read: Japan Petroleum Exploration, Super Hi International Holding, Makalot Industrial, Tokyo Stock Exchange Tokyo Price Index Topix, Alibaba Group, Aag Energy Holdings, Yunnan Chihong Zinc&Germanium Co, Ltd., Skyworth Group Limited, BeiGene Ltd, Hailan Holdings and more

By | Daily Briefs, Most Read

In today’s briefing:

  • JAPAN GOVERNANCE CHANGES II – Who Could Surprise on Buybacks? Quant Rankings
  • HSCI Index Rebalance Preview and Stock Connect: Potential Changes in June & September
  • Yuanta/​​P-Shares Taiwan Dividend+ ETF Preview: Two Weeks to Cutoff
  • JAPAN FLOW: Foreign Investor Inflows May Increase
  • Alibaba (9988 HK): Chinese Authorities Turning Opposite to Encourage Non-State-Owned Companies
  • AAG Energy (2686 HK): Curiouser and Curiouser
  • MVIS Global Rare Earth/​​​​​​Strategic Metals Index Rebalance Preview: Identifying Potential Changes
  • Skyworth (751 HK): Thoughts On Proration
  • FXI Rebalance Preview: Three Potential Changes in June
  • Hailan Holdings (2278 HK): Voluntary Conditional Offer with a Skinny Premium

JAPAN GOVERNANCE CHANGES II – Who Could Surprise on Buybacks? Quant Rankings

By Travis Lundy

  • Japanese companies are buying back more stock than ever before, and recent moves by the TSE and METI are effectively pushing for more.
  • The new goal is to lift PBR and ROE. The easiest way to lift ROE is reduce E. Low-PBR Cos with excess assets and cross-holdings (outbound and inbound) are targets.
  • In this insight I look at several possible rankings for potential large buyback targets.

HSCI Index Rebalance Preview and Stock Connect: Potential Changes in June & September

By Brian Freitas

  • There is only one new listing as a potential inclusion to the HSCI in June. If added to the HSCI, it will also be added to Southbound Stock Connect.
  • There are 18 potential inclusions and 19 potential deletions for the HSCI in September. There are a few close adds and there could be another 5 deletions on Prolonged Suspension.
  • A lot of the potential deletions have large Southbound holdings. With all the stocks becoming sell-only, there could be unwinding of some positions over the next couple of months.

Yuanta/​​P-Shares Taiwan Dividend+ ETF Preview: Two Weeks to Cutoff

By Brian Freitas

  • With two weeks left to the cutoff, there could be 5 changes to the Yuanta/​P-Shares Taiwan Dividend Plus ETF in June.
  • Apart from the adds/deletes, there will also be capping and funding flows that will lead to an estimated one-way turnover of 13.5% and a one-way trade of US$886m.
  • There are 9 stocks with at least 5 days ADV to trade from passive trackers and another 12 stocks that have at least 1 day ADV to trade.

JAPAN FLOW: Foreign Investor Inflows May Increase

By Travis Lundy

  • For years I have tracked investor category flows in Japanese stocks because I find them quite informative. I write about them every so often in an insight series JAPAN FLOW.
  • The series, which I have written about for years, suggests foreign investors invest in Japan pro-cyclically and that correlates well to one relatively simple indicator. 
  • The policy backdrop points to greater corporate buying, greater foreign flow, greater selling by individuals and trust banks. The current timing probably matches. 

Alibaba (9988 HK): Chinese Authorities Turning Opposite to Encourage Non-State-Owned Companies

By Ming Lu

  • Chinese authorities have begun to ban public opinion against non-state-owned companies.
  • These actions were the opposite to what the authorities did in past years.
  • We believe the authorities need non-state-owned companies to bail the unemployed young people out of the weak job market.

AAG Energy (2686 HK): Curiouser and Curiouser

By David Blennerhassett

  • AAG Energy Holdings (2686 HK) is one of those periodic (and rare) takeover situations that will likely be remembered for what went wrong rather than what went right.  
  • A low-balled Offer (proxy advisors agree); perfunctory IFA analysis; a large, and silent, shareholder; and the postponement of the Scheme vote due to voting instructions not being “duly processed”.
  • A new Court Meeting has been confirmed for the 2 June. And now we have some odd CCASS movements which raise further questions.

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

By Brian Freitas

  • The review period for the June rebalance ends on 31 May. Announcement of the changes will be made on 9 June with implementation at the close on 16 June.
  • There could be 4 or 5 A-share additions due to their inclusion in Northbound Stock Connect. That in turn expands the universe and could result in up to 3 deletions.
  • If all changes go through as expected, estimated one-way turnover at the rebalance will be 15.1% resulting in a one-way trade of US$99m.

Skyworth (751 HK): Thoughts On Proration

By David Blennerhassett

  • Back on the 23 December, Skyworth Group (751 HK) announced another partial buyback – this time for 100mn shares (3.87% of shares out), at HK$3.80/share, a 20.25% premium to undisturbed.  
  • On the 28 March, terms were bumped to $5.00/share. Independent shareholders approved the whitewash waiver on the 5 May.
  • The Offer closes on the 18 May. The minimum proration is 7.8%. Expect the final proration to be higher. 

FXI Rebalance Preview: Three Potential Changes in June

By Brian Freitas

  • As of 8 May, we see three potential changes to the iShares China Large-Cap (FXI) (FXI US) at the June rebalance. This is mainly driven by the inclusions.
  • There is over 1 day of ADV to trade on all stocks with the largest impact on BeiGene Ltd (6160 HK) at nearly 4 days of ADV.
  • Short interest has been increasing on the potential adds as they have run up a lot in the last few months.

Hailan Holdings (2278 HK): Voluntary Conditional Offer with a Skinny Premium

By Arun George

  • Hailan Holdings (2278 HK) disclosed a voluntary conditional offer from its controlling shareholder at HK$3.36 per share, a 5.0% premium to the undisturbed price.
  • The offer is conditional on a 90% minimum acceptance condition which requires a minority acceptance rate of 60.0%. The offeror/concert parties own 75.0% of shares.
  • The offeror aims to exercise compulsory acquisition rights (requires 90% minority acceptance rate) which suggests a bump is possible. The offer price has not been declared final. 

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May 09
0

Daily Brief Energy/Materials: Aag Energy Holdings, Yunnan Chihong Zinc&Germanium Co, Ltd., Dow , Earthstone Energy, Gold, Kinder Morgan and more

By | Daily Briefs, Energy & Materials Sector

In today’s briefing:

  • AAG Energy (2686 HK): Curiouser and Curiouser
  • MVIS Global Rare Earth/​​​​​​Strategic Metals Index Rebalance Preview: Identifying Potential Changes
  • Dow Inc.: What Is Its Biggest Competitive Advantage? – Key Drivers
  • Earthstone Energy, INC. – Gaining Permian Efficiency
  • While Commodities sold off – we made profits // Some relief on the sugar front
  • Kinder Morgan Inc.: Boosting Natural Gas Volumes & Leveraging International Travel to Increase Its Jet Fuel Prices – Key Drivers

AAG Energy (2686 HK): Curiouser and Curiouser

By David Blennerhassett

  • AAG Energy Holdings (2686 HK) is one of those periodic (and rare) takeover situations that will likely be remembered for what went wrong rather than what went right.  
  • A low-balled Offer (proxy advisors agree); perfunctory IFA analysis; a large, and silent, shareholder; and the postponement of the Scheme vote due to voting instructions not being “duly processed”.
  • A new Court Meeting has been confirmed for the 2 June. And now we have some odd CCASS movements which raise further questions.

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

By Brian Freitas

  • The review period for the June rebalance ends on 31 May. Announcement of the changes will be made on 9 June with implementation at the close on 16 June.
  • There could be 4 or 5 A-share additions due to their inclusion in Northbound Stock Connect. That in turn expands the universe and could result in up to 3 deletions.
  • If all changes go through as expected, estimated one-way turnover at the rebalance will be 15.1% resulting in a one-way trade of US$99m.

Dow Inc.: What Is Its Biggest Competitive Advantage? – Key Drivers

By Baptista Research

  • Dow had a challenging quarter given the ongoing market dynamics.
  • The year’s first quarter is expected to align with the fourth-quarter performance, with discrete headwinds of $75 million.
  • We give Dow Inc. a ‘Hold’ rating with a revised target price.

Earthstone Energy, INC. – Gaining Permian Efficiency

By Water Tower Research

  • Earthstone generated $272 million of adjusted EBITDA in 1Q23 on average production of 104.4 MBOE/d.
  • Production was slightly below the 104.8 MBOE/d produced in 4Q22 and 194% higher than 1Q22.
  • 1Q22 adjusted EBITDA was $123 million. Y/Y gains in both production and adjusted EBITDA demonstrate the impact of three major Permian Basin asset acquisitions that closed in 2022.

While Commodities sold off – we made profits // Some relief on the sugar front

By The Commodity Report

  • The wobbly first four months of the year are over, and it has become easier to detect clear trends in the market.
  • As you can see, our YTD performance has clearly picked up, and we’re confident that we’ll continue to clearly outperform the CRB Commodity Index.
  • Consultancy Datagro announced on Thursday that Brazil’s center-south region is anticipated to have a sugar output of 38.3 million tonnes in the current season, which began in April.

Kinder Morgan Inc.: Boosting Natural Gas Volumes & Leveraging International Travel to Increase Its Jet Fuel Prices – Key Drivers

By Baptista Research

  • Kinder Morgan had a mixed quarter with below-par revenues but it managed an earnings beat.
  • As compared to the first quarter of 2022, natural gas gathering volumes increased by 18%, with Haynesville volumes increasing by 42% and Eagle Ford volumes rising by 21%, respectively.
  • For the quarter compared to the first quarter of 2022, volumes of refined products in Kinder Morgan’s product pipeline segment were unchanged.

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May 09
0

Daily Brief Industrials: Ventia, Danaher Corp, Equifax Inc, 3M Co, Raytheon Technologies , United Parcel Service Cl B, General Electric Co, Enphase Energy and more

By | Daily Briefs, Industrials

In today’s briefing:

  • Quiddity Leaderboard ASX Jun 23: Two ASX 200 Changes Likely, Including Ventia Surprise
  • Danaher Corporation: This Diagnostics Innovator Continues To Go Strong – Key Drivers
  • Equifax Inc.: Leveraging The New Mortgage 36 Solution to Boost Its NPI – Key Drivers
  • 3M Company: The Secret Strategy to Boost Its Supply Chain and Manufacturing Operations – Key Drivers
  • Raytheon Technologies Corporation: Launch Of Electro-Optical Intelligent Sense & Other Drivers
  • United Parcel Services Inc.: A Challenging Phase In Progress – Key Drivers
  • General Electric Company: Acquisition of Baker Hughes’ Nexus Controls & Other Drivers
  • Enphase Energy Inc.: Launch of New Home Energy Systems & Other Drivers

Quiddity Leaderboard ASX Jun 23: Two ASX 200 Changes Likely, Including Ventia Surprise

By Janaghan Jeyakumar, CFA

  • In this insight, we take a look at the potential index changes for ASX 200, 100, 50, and 20 in the run up to the June 2023 Rebalance.
  • Ventia (VNT AU) has appeared as a “surprise” potential addition to the ASX 200 index in June 2023 after recent block sales by top shareholders.
  • Including Ventia, we currently expect two ADDs and two DELs for the ASX 200 index in June 2023.

Danaher Corporation: This Diagnostics Innovator Continues To Go Strong – Key Drivers

By Baptista Research

  • Danaher successfully navigated a dynamic operating environment in this quarter to deliver an all-around beat.
  • The strength of its customer base business grew by 6% in this quarter.
  • For the quarter, the gross profit margin was 61% and the operating margin was down due to lower COVID volume in its diagnostics and biotechnology businesses.

Equifax Inc.: Leveraging The New Mortgage 36 Solution to Boost Its NPI – Key Drivers

By Baptista Research

  • Equifax produced another all-around beat, growing non-mortgage revenue by 10% in constant currency as it met its Equifax 2025 strategic targets and the $200 million spending plan.
  • Equifax’s non-mortgage businesses, which accounted for roughly 80% of overall revenue in the quarter, performed well.
  • Workforce Solutions once again delivered an excellent quarter, with non-mortgage revenue growth up 11% and total revenue down 8%.

3M Company: The Secret Strategy to Boost Its Supply Chain and Manufacturing Operations – Key Drivers

By Baptista Research

  • 3M delivered an all-around beat in the latest result and managed costs aggressively in a challenging environment.
  • The company experienced noteworthy end-market weakness in consumer electronics, shifting consumer spending patterns along with the mixed industrial end markets and retailer destocking.
  • The electronic business of the company saw adjusted organic sales declines.

Raytheon Technologies Corporation: Launch Of Electro-Optical Intelligent Sense & Other Drivers

By Baptista Research

  • For Raytheon, this was quite a good start to 2023 as it delivered an all-around beat in the first quarater.
  • The demand remains strong for both its defense and commercial aerospace businesses which is a positive sign.
  • Looking internationally, Raytheon views strong demand for defense capabilities as its allies prioritize additional defense spending.

United Parcel Services Inc.: A Challenging Phase In Progress – Key Drivers

By Baptista Research

  • UPS had a terribly disappointing quarter and failed to meet the revenue expectations as well as the earnings expectations of analysts.
  • U.S. discretionary sales have been lagging behind grocery as disposable income and consumable sales are shifting from goods to services.
  • Lately, the company finished the acquisition of Bomi Group, and cost synergy and revenue are running ahead of the target.

General Electric Company: Acquisition of Baker Hughes’ Nexus Controls & Other Drivers

By Baptista Research

  • GE’s stock has been on a strong upward momentum and delivered an all-around beat in the quarter.
  • The top-line momentum was strong, with strong market demand as well as execution driving growth.
  • In this report, we have carried out a fundamental analysis of the historical financial statements of the company.

Enphase Energy Inc.: Launch of New Home Energy Systems & Other Drivers

By Baptista Research

  • Enphase Energy had a decent first quarter and managed an all-around beat with no significant supply shortages and a stable overall supply environment.
  • The company also experienced significant growth in Europe, with revenue rising 25% sequentially and more than tripling year-on-year.
  • In addition, the company launched its most potent Enphase Energy System, featuring the new IQ Battery 5P and IQ8 Microinverters.

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May 09
0

Daily Brief TMT/Internet: Hoya Corp, CUBox, Software AG, Globalwafers, Corning Inc, Verizon Communications, Fiserv Inc, International Business Machines, Lam Research, Texas Instruments and more

By | Daily Briefs, TMT/Internet

In today’s briefing:

  • Hoya (7741) | A Visionary Company with a Blurry Future
  • CUBox IPO Bookbuilding Results Analysis
  • Sweetened Offer and Bain Interloping
  • Globalwafers Q1’23 Revenues up 1% QoQ, 14.2% YoY
  • Corning Incorporated: Is The Drop In Revenues A Point Of Concern? – Key Drivers
  • Verizon Communications Inc.: A Mixed Performance For The Telecom Giant – Key Drivers
  • Fiserv Inc.: Major Deals with Walmart
  • International Business Machines (IBM): Launch of AI-Powered Security QRadar Suite & Other Drivers
  • Lam Research Corporation: Major Drivers
  • Texas Instruments: A Mixed Performer Across Different End Markets – Key Drivers

Hoya (7741) | A Visionary Company with a Blurry Future

By Mark Chadwick

  • Hoya has an impressive business model that results in high Returns on Invested Capital
  • Hoya reported strong Q4 results but there is little for investors to get excited about in the outlook
  • We see a lack of catalysts and an expensive valuation as working against the stock in the short term

CUBox IPO Bookbuilding Results Analysis

By Douglas Kim

  • On 8 May, CUBox (340810 KS) announced its IPO price of 15,000 won, which is 13% lower than the lower end of the IPO price range of 17,200 won.
  • Our base case valuation of CUBox is implied target price of 22,719 won per share, which represents 51% higher than the IPO price of 15,000 won.
  • CUBox claims that it has one of the world’s best technologies in the field of AI face recognition. 

Sweetened Offer and Bain Interloping

By Jesus Rodriguez Aguilar

  • Bain has a 10.01% stake (likely acquired <€32/share) and could play nasty: its stake is enough to block a squeeze-out, and if it launches a €34/share offer, it will be hostile.
  • Meanwhile, Silver Lake (5% recently acquired+25.1% from the foundation) has sweetened to €32/share (19.4x EV/Fwd EBIT, well above 11.1x last-10y average). The Board could change sides (as recently with Caverion).
  • The shares trade 3.5% above Silver Lake’s, but at a discount of 2.5% to Bain’s possible offer. The market believes Bain will bid. I raise my TP to €32.

Globalwafers Q1’23 Revenues up 1% QoQ, 14.2% YoY

By William Keating

  • Q1’23 revenues of NT$18.6 billion, up 14.2% YoY and up ~1% QoQ.
  • No specific Q2’23 forecast provided but we fully expect a sequential decline and the end of a 13 quarter growth streak 
  • YTD silicon carbide revenues have already exceeded full year 2022 revenues, albeit coming from a low base.

Corning Incorporated: Is The Drop In Revenues A Point Of Concern? – Key Drivers

By Baptista Research

  • Corning saw a sequential drop in its total revenues of around 7% in the recent result but this was still better than analyst expectations.
  • Despite the lower sales, Corning’s actions to raise prices and restore productivity ratios resulted in gross margin expanding 160 basis points.
  • Although multiple markets remain weak, the company expects results to improve in the second quarter.

Verizon Communications Inc.: A Mixed Performance For The Telecom Giant – Key Drivers

By Baptista Research

  • Verizon Communications delivered a mixed quarter with below-par revenues despite continued growth of the business across the private and broadband networks, as well as mobility.
  • It grew overall postpaid phone gross adds by 5% and achieved 3% wireless service revenue growth.
  • Growth is seen for fixed wire access, and it continues to scale and increasingly contributes to revenue performance.

Fiserv Inc.: Major Deals with Walmart

By Baptista Research

  • Fiserv is off to quite a strong start in the year with adjusted revenue growth and an increase in adjusted earnings per share resulting in an all-around beat.
  • Adjusted operating margin was up and organic revenue growth was higher than expected, demonstrating the company’s ability to sustain accelerated growth.
  • Clover revenue growth stays strong and Fiserv continues to add merchants at quite a healthy pace.

International Business Machines (IBM): Launch of AI-Powered Security QRadar Suite & Other Drivers

By Baptista Research

  • IBM had a decent start to the year with a mixed result.
  • The company’s revenues were below market expectations though it did manage an earnings beat, with free cash flow increasing well.
  • Revenue in the data and AI sector increased due to data management, business analytics, asset, and supply chain management growth.

Lam Research Corporation: Major Drivers

By Baptista Research

  • Lam Research Corporation delivered strong quarter results with revenues, operating margins, and earnings per share above Wall Street expectations.
  • The company’s revenue for the quarter was $3.87 billion, a 27% decrease from the prior quarter, witnessing the classic cyclicality associated with the semiconductors industry.
  • Foundry-related system revenues reached new highs, indicating the company’s continued success in both cutting-edge and specialty technology categories.

Texas Instruments: A Mixed Performer Across Different End Markets – Key Drivers

By Baptista Research

  • Texas Instruments managed to deliver an all-around beat in the last quarter even though revenue decreased sequentially.
  • Analog revenue declined, embedded processing grew, and its other segment declined in line with the cyclicality in the semiconductors market.
  • The industrial market was flat this quarter, the automotive market was up, and personal electronics declined.

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May 09
0

Daily Brief Health Care: BeiGene Ltd, Mankind Pharma, Alfresa Holdings, Shenzhen Mindray Bio-Medical Electronics, Global Health (Medanta), Thermo Fisher Scientific Inc, Biogen Inc, Centene Corp, Elevance Health and more

By | Daily Briefs, Healthcare

In today’s briefing:

  • FXI Rebalance Preview: Three Potential Changes in June
  • Mankind Pharma IPO Trading – Strong Insti Demand Makes up for Retail Lag
  • Alfresa Holdings (2784 JP): FY23 Result Is Expected to Exceed Previous Forecast
  • Shenzhen Mindray Bio-Medical Electronics (300760.CH) – This Year’s Challenge Is Not over Yet
  • Global Health (Medanta) Lockup – Good Name but Seems Fairly Valued
  • Thermo Fisher Scientific Inc.: The GeneProof Partnership & Other Developments
  • Biogen Inc.: The Lecanemab Progress On The Alzheimer’s Front & Other Drivers
  • Centene Corporation: Improving Market Position In Medicare Advantage – Key Drivers
  • Elevance Health Inc.: Major Drivers

FXI Rebalance Preview: Three Potential Changes in June

By Brian Freitas

  • As of 8 May, we see three potential changes to the iShares China Large-Cap (FXI) (FXI US) at the June rebalance. This is mainly driven by the inclusions.
  • There is over 1 day of ADV to trade on all stocks with the largest impact on BeiGene Ltd (6160 HK) at nearly 4 days of ADV.
  • Short interest has been increasing on the potential adds as they have run up a lot in the last few months.

Mankind Pharma IPO Trading – Strong Insti Demand Makes up for Retail Lag

By Sumeet Singh

  • Mankind Pharma  raised around US$527m in its upcoming India IPO.
  • MP is a pharmaceutical company engaged in developing, manufacturing and marketing a range of pharmaceutical formulations across various acute and chronic therapeutic areas, as well as several consumer healthcare products.
  • We have looked at various aspects of the deal in our previous note, in this note, we talk about the demand and trading dynamics.

Alfresa Holdings (2784 JP): FY23 Result Is Expected to Exceed Previous Forecast

By Tina Banerjee

  • Alfresa Holdings (2784 JP) revised its consolidated performance forecast for FY23. Revenue, operating profit, and net profit forecast have been raised by 3%, 2%, and 21%, respectively.
  • This is attributed to greater-than-expected growth in ethical pharmaceuticals market and the company’s recovery from the bidding nomination suspension from medical institutions stemming from a violation of the Antimonopoly Act.
  • In March 2023, Alfresa received a cease and desist order and a surcharge payment order from the Japan Fair Trade Commission (FTC) in relation to violation of the Antimonopoly Act.

Shenzhen Mindray Bio-Medical Electronics (300760.CH) – This Year’s Challenge Is Not over Yet

By Xinyao (Criss) Wang

  • There’s an obvious declining trend in net profit YoY growth.Considering unsatisfactory growth of MI and IVD in 22H2,if it weren’t for the strong growth of PMLS,Mindray’s overall growth could have been “surprising”.
  • The current question is whether IVD and MI segments would have high enough growth to offset the potential performance decline of PMLS segment in post-pandemic era. Problems may emerge afterwards.
  • There are still some unresolved technical challenges that constrain the development of Mindray. Without good performance in internationalization, there is no incremental market. Thus no reason to maintain high valuation.

Global Health (Medanta) Lockup – Good Name but Seems Fairly Valued

By Ethan Aw

  • Global Health (Medanta) (MEDANTA IN) raised around US$268m in its India IPO. The stock was listed on 16th Nov 2022, its six-month lockup will expire on 11th May 2023.
  • Global Health (GH) is a hospital network that operates under the Medanta brand. The firm currently has five hospitals in operation and one more planned for development.
  • In this note, we will talk about the lock-up dynamics and updates since our last note.

Thermo Fisher Scientific Inc.: The GeneProof Partnership & Other Developments

By Baptista Research

  • Thermo Fisher performed reasonably well in Q1 with 6% core organic revenue growth that was above Wall Street expectatis.
  • Pandemic-related revenue came in as expected, with $140 million of testing revenue and $180 million of vaccines and therapies revenue.
  • Regarding the segment details, the Life Sciences Solutions segment reported a decline in revenue and organic revenue, driven by the moderation in pandemic-related revenue.

Biogen Inc.: The Lecanemab Progress On The Alzheimer’s Front & Other Drivers

By Baptista Research

  • Biogen had a successful first quarter with an all-around beat.
  • The company executed the launch of Leqembi, an immediate transformative product in the Alzheimer’s disease therapeutic area.
  • Biogen has been experiencing a lot of competition, making it necessary to think about how to grow the business in the future.

Centene Corporation: Improving Market Position In Medicare Advantage – Key Drivers

By Baptista Research

  • Centene had a successful first quarter, showing continued positive momentum operationally which was demonstrated by its all-around beat.
  • The company raised its premium and service revenue forecast by $3.7 billion, with full-year 2023 adjusted EPS guidance at $6.40.
  • We give Centene Corporation a ‘Buy’ rating with a revised target price.

Elevance Health Inc.: Major Drivers

By Baptista Research

  • Elevance Health’s first quarter results were solid and the company delivered an all-around beat with a growth of around 15% compared to last year.
  • The company had 48.1 million medical members at the end of the first quarter.
  • Due to organic growth in Medicaid and Medicare Advantage, dual-eligible special needs plans, and group members, risk-based membership increased by roughly 1 million members year over year.

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May 09
0

Daily Brief Financials: Hailan Holdings , Samsung Securities, Moody’s Corp, Square Inc, Times China and more

By | Daily Briefs, Financials

In today’s briefing:

  • Hailan Holdings (2278 HK): Voluntary Conditional Offer with a Skinny Premium
  • Will Woori Financial Group Acquire Samsung Securities?
  • Moody’s Corporation: How The Management Is Leveraging Its Data Analytics – Key Drivers
  • Block: The Crises That Never Were
  • Morning Views Asia: Anton Oilfield, China Vanke, Sunac China Holdings, Times China, UPL Ltd

Hailan Holdings (2278 HK): Voluntary Conditional Offer with a Skinny Premium

By Arun George

  • Hailan Holdings (2278 HK) disclosed a voluntary conditional offer from its controlling shareholder at HK$3.36 per share, a 5.0% premium to the undisturbed price.
  • The offer is conditional on a 90% minimum acceptance condition which requires a minority acceptance rate of 60.0%. The offeror/concert parties own 75.0% of shares.
  • The offeror aims to exercise compulsory acquisition rights (requires 90% minority acceptance rate) which suggests a bump is possible. The offer price has not been declared final. 

Will Woori Financial Group Acquire Samsung Securities?

By Douglas Kim

  • The new head of Woori Financial Group (316140 KS) Chairman Lim Jong-Ryong recently revealed his willingness to acquire a major/mid-scale securities company.
  • Among these potential acquisition candidates, Samsung Securities is considered to be the most likely securities companies that could be purchased by Woori Financial Group.
  • In the long term (next 2-3 years), there is a good probability that Woori Financial Group could acquire Samsung Securities, which is not a core business of the Samsung Group.

Moody’s Corporation: How The Management Is Leveraging Its Data Analytics – Key Drivers

By Baptista Research

  • Moody’s Corporation saw some quite strong upticks in usage in the quarter and delivered an all-around beat.
  • MA delivered ARR growth of 10% as Moody’s continues enhancing and extending its mission-critical workflow solutions and data analytics.
  • Despite overall revenues down in the quarter, Moody’s adjusted operating margin was up.

Block: The Crises That Never Were

By Vladimir Dimitrov, CFA

  • Block’s management is blaming the state of the economy for the company’s struggles, but the reality is very different.
  • Shareholder dilution continues while cash flow remains suppressed and the macroeconomic conditions are still supportive, according to Block’s management.
  • The macroeconomic condition is still supportive and the Macroeconomic conditions remain supportive.

Morning Views Asia: Anton Oilfield, China Vanke, Sunac China Holdings, Times China, UPL Ltd

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 09
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Daily Brief Industrials: Ventia, Danaher Corp, Equifax Inc, 3M Co, Raytheon Technologies , United Parcel Service Cl B, General Electric Co, Enphase Energy and more

By | Daily Briefs, Industrials

In today’s briefing:

  • Quiddity Leaderboard ASX Jun 23: Two ASX 200 Changes Likely, Including Ventia Surprise
  • Danaher Corporation: This Diagnostics Innovator Continues To Go Strong – Key Drivers
  • Equifax Inc.: Leveraging The New Mortgage 36 Solution to Boost Its NPI – Key Drivers
  • 3M Company: The Secret Strategy to Boost Its Supply Chain and Manufacturing Operations – Key Drivers
  • Raytheon Technologies Corporation: Launch Of Electro-Optical Intelligent Sense & Other Drivers
  • United Parcel Services Inc.: A Challenging Phase In Progress – Key Drivers
  • General Electric Company: Acquisition of Baker Hughes’ Nexus Controls & Other Drivers
  • Enphase Energy Inc.: Launch of New Home Energy Systems & Other Drivers

Quiddity Leaderboard ASX Jun 23: Two ASX 200 Changes Likely, Including Ventia Surprise

By Janaghan Jeyakumar, CFA

  • In this insight, we take a look at the potential index changes for ASX 200, 100, 50, and 20 in the run up to the June 2023 Rebalance.
  • Ventia (VNT AU) has appeared as a “surprise” potential addition to the ASX 200 index in June 2023 after recent block sales by top shareholders.
  • Including Ventia, we currently expect two ADDs and two DELs for the ASX 200 index in June 2023.

Danaher Corporation: This Diagnostics Innovator Continues To Go Strong – Key Drivers

By Baptista Research

  • Danaher successfully navigated a dynamic operating environment in this quarter to deliver an all-around beat.
  • The strength of its customer base business grew by 6% in this quarter.
  • For the quarter, the gross profit margin was 61% and the operating margin was down due to lower COVID volume in its diagnostics and biotechnology businesses.

Equifax Inc.: Leveraging The New Mortgage 36 Solution to Boost Its NPI – Key Drivers

By Baptista Research

  • Equifax produced another all-around beat, growing non-mortgage revenue by 10% in constant currency as it met its Equifax 2025 strategic targets and the $200 million spending plan.
  • Equifax’s non-mortgage businesses, which accounted for roughly 80% of overall revenue in the quarter, performed well.
  • Workforce Solutions once again delivered an excellent quarter, with non-mortgage revenue growth up 11% and total revenue down 8%.

3M Company: The Secret Strategy to Boost Its Supply Chain and Manufacturing Operations – Key Drivers

By Baptista Research

  • 3M delivered an all-around beat in the latest result and managed costs aggressively in a challenging environment.
  • The company experienced noteworthy end-market weakness in consumer electronics, shifting consumer spending patterns along with the mixed industrial end markets and retailer destocking.
  • The electronic business of the company saw adjusted organic sales declines.

Raytheon Technologies Corporation: Launch Of Electro-Optical Intelligent Sense & Other Drivers

By Baptista Research

  • For Raytheon, this was quite a good start to 2023 as it delivered an all-around beat in the first quarater.
  • The demand remains strong for both its defense and commercial aerospace businesses which is a positive sign.
  • Looking internationally, Raytheon views strong demand for defense capabilities as its allies prioritize additional defense spending.

United Parcel Services Inc.: A Challenging Phase In Progress – Key Drivers

By Baptista Research

  • UPS had a terribly disappointing quarter and failed to meet the revenue expectations as well as the earnings expectations of analysts.
  • U.S. discretionary sales have been lagging behind grocery as disposable income and consumable sales are shifting from goods to services.
  • Lately, the company finished the acquisition of Bomi Group, and cost synergy and revenue are running ahead of the target.

General Electric Company: Acquisition of Baker Hughes’ Nexus Controls & Other Drivers

By Baptista Research

  • GE’s stock has been on a strong upward momentum and delivered an all-around beat in the quarter.
  • The top-line momentum was strong, with strong market demand as well as execution driving growth.
  • In this report, we have carried out a fundamental analysis of the historical financial statements of the company.

Enphase Energy Inc.: Launch of New Home Energy Systems & Other Drivers

By Baptista Research

  • Enphase Energy had a decent first quarter and managed an all-around beat with no significant supply shortages and a stable overall supply environment.
  • The company also experienced significant growth in Europe, with revenue rising 25% sequentially and more than tripling year-on-year.
  • In addition, the company launched its most potent Enphase Energy System, featuring the new IQ Battery 5P and IQ8 Microinverters.

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May 09
0

Daily Brief Consumer: Ferrari N.V., Nissin Foods Holdings, Aeon Co Ltd, Coupang, Chipotle Mexican Grill, Tesla Motors and more

By | Consumer, Daily Briefs

In today’s briefing:

  • Ferrari: Classic Fisher Company, Almost Perfect Score on The Fisher 15 Framework
  • Nissin Foods’ FQ4 Earnings: A Possible 59% Operating Profit Surprise?
  • Aeon Will Own Japan’s Two Largest Supermarket Groups with Inageya Purchase
  • [Coupang Inc. (CPNG US) Earnings Preview]: Market Share Solid Given Limited Competitive Threat
  • Chipotle Mexican Grill Inc.: Improved Digital Capabilities & A 6
  • Tesla Inc.: Price Cuts Along With Capacity Expansion Have Really Changed The Game – Key Drivers

Ferrari: Classic Fisher Company, Almost Perfect Score on The Fisher 15 Framework

By Sameer Taneja

  • Ferrari NV (RACE IM) has been a steady compounder of earnings growing operating profits at 14% CAGR and sales volumes at 6% CAGR over the last 20 years. 
  • The company has expanded EBITDA margins from 25% in 2014 to 35% in 2022 and is expected to increase by another 300 bps in FY23 to 38%, as per guidance. 
  • At 41x/35x FY23e/FY24e, we conceded it is a tad expensive, but we would look at investing in this company over the long term.

Nissin Foods’ FQ4 Earnings: A Possible 59% Operating Profit Surprise?

By Oshadhi Kumarasiri

  • Nissin Foods Holdings (2897 JP) to report FQ4 results on May 10th with ¥158.5bn revenue and ¥8.1bn operating profit expected according to revised Feb 2023 guidance.
  • Consensus predicts Nissin Foods’ operating profit to be ¥6.6bn from a revenue of ¥167.8bn, which is lower than the company’s latest annual guidance.
  • Meanwhile, a higher FQ4 operating profit of ¥10.5bn is expected based on our analysis, exceeding consensus by 59%.

Aeon Will Own Japan’s Two Largest Supermarket Groups with Inageya Purchase

By Michael Causton

  • Last year saw the consolidation of several supermarket chains in Shikoku and Chugoku by Aeon, creating Japan’s largest supermarket group. 
  • Now, Aeon has now announced that it will expand its existing stake in Inageya, rolling the company into USMH and creating another, even larger food operation and Japan’s biggest yet.
  • Aeon is looking for dominance in Tokyo and may seek more acquisitions but rivals are unlikely to give it a free hand nor say no to acquisitions of their own.

[Coupang Inc. (CPNG US) Earnings Preview]: Market Share Solid Given Limited Competitive Threat

By Shawn Yang

  • We expect CPNG to report C1Q23 top-line and non-GAAP net income 2.0% and 4.8% vs. consensus, respectively. 
  • AliExpress became S. Korea’s most downloaded app after increasing spending, but product overlap with Coupang is limited, while other S. Korean competitors recorded declining MAU, in our understanding.
  • South Korean economic indicators, including CPI and retail data, point towards a recovery. We maintain our BUY rating and US$19 TP.

Chipotle Mexican Grill Inc.: Improved Digital Capabilities & A 6

By Baptista Research

  • It was a successful quarter for Chipotle Mexican Grill, reporting an all-around beat.
  • The company’s quarterly sales were $2.4 billion and it retained about 80% of digital sales and has recovered almost 80% of in-restaurant sales.
  • We give Chipotle Mexican Grill a ‘Hold’ rating with a revised target price.

Tesla Inc.: Price Cuts Along With Capacity Expansion Have Really Changed The Game – Key Drivers

By Baptista Research

  • Tesla had a mixed quarter and failed to meet the high revenue expectations of Wall Street.
  • Although automotive operating margin and gross margin both fell sequentially, the company delivered an earnings beat.
  • In terms of the Cybertruck, Tesla continues to construct Alpha models of the Cybertruck on its pilot line for testing.

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