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Smartkarma Daily Briefs

Apr 17
0

Daily Brief Industrials: Lian Beng, Lonking Holdings, Baycurrent Consulting, Volkswagen (Pref) and more

By | Daily Briefs, Industrials

In today’s briefing:

  • Weekly Deals Digest (16 Apr) – Lian Beng, Arcland, Essential, Genesis, Newcrest, Rakuten Bank, ZJLD
  • Lonking (3339 HK): Back to Attractive Zone
  • Baycurrent Consulting: Strong Earnings Beat with an Overly Conservative Guidance
  • Liquid Universe of European Ordinary and Preferred Shares: April ‘23 Report

Weekly Deals Digest (16 Apr) – Lian Beng, Arcland, Essential, Genesis, Newcrest, Rakuten Bank, ZJLD

By Arun George

Lonking (3339 HK): Back to Attractive Zone

By Osbert Tang, CFA

  • After a poor FY22, 1H23 will stay challenging for Lonking Holdings (3339 HK). However, we expect pick-up in business momentum going forward, and export is a major growth driver.
  • Gross margin rebounded HoH and YoY in 2H22, and Lonking maintained good operating cost control. Recovery of equity market suggests potential big positive swing in investment income. 
  • Including investment portfolio, 92% of the current market capitalisation is net cash, providing solid downside buffer. Its 6.5x PER, 9.2% yield and 0.52x P/B are very attractive valuations.

Baycurrent Consulting: Strong Earnings Beat with an Overly Conservative Guidance

By Shifara Samsudeen, ACMA, CGMA

  • Baycurrent reported fourth quarter and full-year FY02/2023 results on Friday. 4Q revenues increased 32.1% YoY to ¥21.2bn (vs consensus ¥20.7bn) and OP increased 60.8% to ¥9.6bn (vs consensus ¥8.3bn).
  • Full-Year revenue and OP increased 32% and 39% YoY respectively to ¥76.1bn and ¥29.9bn, beating own guidance by 7% and 15% respectively.
  • The company’s FY02/2023E guidance is too conservative as there has been no signs of an earnings slowdown as DX consulting and high-value add projects would drive next phase of growth.

Liquid Universe of European Ordinary and Preferred Shares: April ‘23 Report

By Jesus Rodriguez Aguilar

  • Since mid-March, spreads have generally tightened across our liquid universe (6 have widened, 12 tightened, 1 at same level).
  • Possible trades long ordinary / short preferred shares: Fuchs Petrolub, Henkel, Handelsbanken, SSAB Svenska Stal.
  • Possible trades long preferred / short ordinary shares: Sixt, VW, Danieli, Grifols, Atlas Copco.

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Apr 17
0

Daily Brief Industrials: Lian Beng, Lonking Holdings, Baycurrent Consulting, Volkswagen (Pref) and more

By | Daily Briefs, Industrials

In today’s briefing:

  • Weekly Deals Digest (16 Apr) – Lian Beng, Arcland, Essential, Genesis, Newcrest, Rakuten Bank, ZJLD
  • Lonking (3339 HK): Back to Attractive Zone
  • Baycurrent Consulting: Strong Earnings Beat with an Overly Conservative Guidance
  • Liquid Universe of European Ordinary and Preferred Shares: April ‘23 Report

Weekly Deals Digest (16 Apr) – Lian Beng, Arcland, Essential, Genesis, Newcrest, Rakuten Bank, ZJLD

By Arun George

Lonking (3339 HK): Back to Attractive Zone

By Osbert Tang, CFA

  • After a poor FY22, 1H23 will stay challenging for Lonking Holdings (3339 HK). However, we expect pick-up in business momentum going forward, and export is a major growth driver.
  • Gross margin rebounded HoH and YoY in 2H22, and Lonking maintained good operating cost control. Recovery of equity market suggests potential big positive swing in investment income. 
  • Including investment portfolio, 92% of the current market capitalisation is net cash, providing solid downside buffer. Its 6.5x PER, 9.2% yield and 0.52x P/B are very attractive valuations.

Baycurrent Consulting: Strong Earnings Beat with an Overly Conservative Guidance

By Shifara Samsudeen, ACMA, CGMA

  • Baycurrent reported fourth quarter and full-year FY02/2023 results on Friday. 4Q revenues increased 32.1% YoY to ¥21.2bn (vs consensus ¥20.7bn) and OP increased 60.8% to ¥9.6bn (vs consensus ¥8.3bn).
  • Full-Year revenue and OP increased 32% and 39% YoY respectively to ¥76.1bn and ¥29.9bn, beating own guidance by 7% and 15% respectively.
  • The company’s FY02/2023E guidance is too conservative as there has been no signs of an earnings slowdown as DX consulting and high-value add projects would drive next phase of growth.

Liquid Universe of European Ordinary and Preferred Shares: April ‘23 Report

By Jesus Rodriguez Aguilar

  • Since mid-March, spreads have generally tightened across our liquid universe (6 have widened, 12 tightened, 1 at same level).
  • Possible trades long ordinary / short preferred shares: Fuchs Petrolub, Henkel, Handelsbanken, SSAB Svenska Stal.
  • Possible trades long preferred / short ordinary shares: Sixt, VW, Danieli, Grifols, Atlas Copco.

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Apr 17
0

Daily Brief Energy/Materials: Newcrest Mining, Tecnicas Reunidas Sa and more

By | Daily Briefs, Energy & Materials Sector

In today’s briefing:

  • Merger Arb Mondays (17 Apr) – Newcrest, Essential, Healius, Lian Beng, Golden Energy, Arcland
  • Rights Arbitrage

Merger Arb Mondays (17 Apr) – Newcrest, Essential, Healius, Lian Beng, Golden Energy, Arcland

By Arun George

Rights Arbitrage

By Jesus Rodriguez Aguilar

  • The rights issue is fully underwritten and should bolster the balance sheet. This is akin to a placing by market volume. There are arbitrage opportunities (although not limitless borrowing available).
  • The arbitrage is a long position on a synthetic put. Rights will trade up to 17:30 on 3 May.
  • The new shares coming is a giant block compared to the existing shares outstanding. There may be a wave of selling from 4 May, and the shares should drop then.

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Apr 17
0

Daily Brief Health Care: Beijing Luzhu Biotechnology and more

By | Daily Briefs, Healthcare

In today’s briefing:

  • Pre-IPO Beijing Luzhu Biotechnology – The Eventual Revenue Scale and Profit Margins Could Be Limited

Pre-IPO Beijing Luzhu Biotechnology – The Eventual Revenue Scale and Profit Margins Could Be Limited

By Xinyao (Criss) Wang

  • Either vaccines or therapeutic biologics, Luzhu’s clinical progress has no advantages. There have been quite a few competing products on the market or candidates with faster development progress than Luzhu.
  • Luzhu applies the low price strategy to open the market. We’re not sure if it works or not, since it still depends on R&D efficiency, product quality and commercialization capabilities.
  • We tend to be conservative about the Company’s prospects because its eventual revenue scale and profit margins are likely to be very limited based on our analysis.

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Apr 17
0

Daily Brief Quantitative Analysis: A-H Premium Weekly (Apr 14th): Remegen and more

By | Daily Briefs, Quantitative Analysis

In today’s briefing:

  • A-H Premium Weekly (Apr 14th): Remegen, CREC, Yankuang Energy, CRRC, GWM, CICC
  • Northbound Flows (Apr 14th): Kweichow Moutai, Ping An Insurance, Wuxi Apptec
  • ASX Short Interest Weekly (Apr 7th): Qube Holdings, Woodside Energy, Aurizon
  • Hong Kong Connect Flows (Apr 14th): Sensetime, SMIC, Cnooc, China Mobile, Tencent, Meituan, Kuaishou

A-H Premium Weekly (Apr 14th): Remegen, CREC, Yankuang Energy, CRRC, GWM, CICC

By Ke Yan, CFA, FRM

  • We analyse the changes of A-H premium on 143 stocks over the last week. The average A-H premium was 112.5% as of Apr 14th.
  • The average A-H premium changed by -4.9ppt week on week, led by consumer discretionary, health care, financials.
  • We highlight weekly changes in A-H premium for Remegen, CREC, Yankuang Energy, CRRC, GWM, CICC.

Northbound Flows (Apr 14th): Kweichow Moutai, Ping An Insurance, Wuxi Apptec

By Ke Yan, CFA, FRM

  • We analyze the weekly Shanghai/Shenzhen northbound Connect flows with our data engine for holding position as of April 14th.
  • We estimate the weekly inflows to be US$770.1 million, led by materials, industrials, utilities sectors, and offset by financials, consumer staples.
  • We highlight flows for Kweichow Moutai, Ping An Insurance, Wuxi Apptec.

ASX Short Interest Weekly (Apr 7th): Qube Holdings, Woodside Energy, Aurizon

By Ke Yan, CFA, FRM

  • We analyzed the changes in short interest of ASX Stocks as of Apr 7th (reported today) which has an aggregated short interest worth USD46.5bn.
  • We tabulate league table for top short by value and short as multiple of ADT, as well as weekly increases & decreases in short value, short as multiple of ADT.
  • We highlight short interest changes in Qube Holdings, Woodside Energy, Aurizon, Gold Road Resour, Brambles.

Hong Kong Connect Flows (Apr 14th): Sensetime, SMIC, Cnooc, China Mobile, Tencent, Meituan, Kuaishou

By Ke Yan, CFA, FRM

  • We analyze the weekly Hong Kong Connect flows with our data engine for holding position as of April 14th.
  • The top stocks by inflows and outflows were tabulated for all market, HSCEI, mid cap and s/mid cap groups.
  • We highlight flows for Sensetime, Semiconductor Manufacturing International, Cnooc, China Mobile, Tencent, Meituan, Kuaishou Technology.

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Apr 17
0

Daily Brief Technical Analysis: Japan and Korea Action Levels and more

By | Daily Briefs, Technical Analysis

In today’s briefing:

  • Japan and Korea Action Levels

Japan and Korea Action Levels

By Thomas Schroeder

  • Japan and Korea are meeting rally objective action points. NKY 28,500 touted as the level to short. Korea meeting the 337/338 upper wedge range target to lock in some gains.
  • Japan has formed previous tops below 29,000. Korea will need to backfill and likely retest the top of the rising wedge given the impulsive nature of the rise. 
  • These topping patterns show conviction to form bigger cycle peaks into late April ahead of a more negative phase in May. Factor in final SPX push to 4,200-20.

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Apr 17
0

Daily Brief Credit: Morning Views Asia: Fosun International and more

By | Credit, Daily Briefs

In today’s briefing:

  • Morning Views Asia: Fosun International, Guangzhou R&F Properties, China Datang Corp Renewable Power

Morning Views Asia: Fosun International, Guangzhou R&F Properties, China Datang Corp Renewable Power

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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Apr 17
0

Daily Brief Crypto: The New Frontier and more

By | Crypto, Daily Briefs

In today’s briefing:

  • The New Frontier

The New Frontier

By Etherbridge

  • The true emerging market of our time is the digital economy.
  • As technology advances, we witness rapid online business growth and an increasing reliance on digital solutions.
  • This burgeoning sector knows no borders, with its educated, innovative citizens distributed worldwide.

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Apr 17
0

Daily Brief Thematic (Sector/Industry): Good Morning Japan| Recession Fears Spook Equities;NUGGET- Musk Jumps in AI Race and more

By | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

  • Good Morning Japan| Recession Fears Spook Equities;NUGGET- Musk Jumps in AI Race, Boon for Advantest
  • Smartkarma Webinar | Outlook on Chinese Banks
  • US Banks – Large Vs Small
  • China TMT Update(Apr.17) –  9995HK/9926HK/BGNE.US: ADC Gets Heated up with Another Biotech License
  • Weekly Stock Bullfinder – Week of 4/17

Good Morning Japan| Recession Fears Spook Equities;NUGGET- Musk Jumps in AI Race, Boon for Advantest

By Mark Chadwick

  • OVERSEAS. SPX  up +0.8%WoW but slipped -0.2% Friday as Hawkish Waller came out amid weak US March Retail Sales data;  Musk jump’s into Generative AI; Boeing Production Woes
  • JAPAN.NKY Futs flat vs Cash USDJPY 133.8; Security Concerns ahead of by-elections as PM Kishida smoke Bombed;  Panasonic to build 3rd US batt plant; JT ramps up heated stick products
  • NUGGET. Elon Musk’s aggressive push into Generative AI to rival/beat ChatGPT; A boon for NDVIDIA and by extension, Japan’s Advantest(6857)

Smartkarma Webinar | Outlook on Chinese Banks

By Smartkarma Research

In the next installment of our Webinar Wednesdays, we go live with Smartkarma Insight Provider, Stanley Tsai, CFA as he will be sharing with us his insights on the performance and outlook of banks in China. Join us, as Stanley tackles topics like possible triggers for a banking crisis in China, to how the evolving regulatory environment will going to change investors’ risks / rewards, in the next live session. 

The webinar will be hosted on Wednesday, 10 May 2023, 17:00 SGT/HKT.

Stanley Tsai, CFA has over 20 years of experience as a financial sector specialist across equities and fixed income. He is currently an advisor to a private investment fund and a non-executive director of a US VC fund. He is also a member of the Value Investing Committee and Media Committee at the CFA Institute of Hong Kong.

US Banks – Large Vs Small

By Daniel Tabbush

  • JPM and Citigroup results may imply radical divergence amongst US banks
  • Deposit flows into big banks, out of small banks, may be just one feature 
  • Commitment risk, loan contraction, and net interest income can surprise

China TMT Update(Apr.17) –  9995HK/9926HK/BGNE.US: ADC Gets Heated up with Another Biotech License

By Shawn Yang

  • 9995HK: ADC gets heated up with another biotech license in biotech deal (-)
  • 9926HK：Akeso’s JV with SinoBio signed exclusive distribution of PD-1 drug with SE Asia and Oceania distributor
  • BGNE.US: Merck KGaA’s BTK inhibitor drug hit with FDA hold due to liver injury…Impact to BGNE nil

Weekly Stock Bullfinder – Week of 4/17

By Weekly Stock Bull Finder

  • With the upcoming first quarter earnings season taking center stage the next 3 weeks, there is yet again a well overdue reprieve from the back and forth focus on hiking, pausing, and cutting next steps of the Federal Reserve.
  • The focus now goes back to company earnings and forward guidance and whether slowdowns picked up on ISM, PMI, and regional Fed surveys are now making its way through earnings reports.
  • While still early, the first 22 S&P 500 Index companies reveal a 20% drop in earnings QoQ.

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Apr 17
0

Daily Brief Event-Driven: Rakuten Bank (5838) IPO – Let’s Go! (Part 2) and more

By | Daily Briefs, Event-Driven

In today’s briefing:

  • Rakuten Bank (5838) IPO – Let’s Go! (Part 2)
  • Arclands (9842) Overpays for Arclands Service Holdings (3085)
  • Merger Arb Mondays (17 Apr) – Newcrest, Essential, Healius, Lian Beng, Golden Energy, Arcland
  • Aiming for Price Movement Patterns with Low Market Exposure in MSCI Korea May Review
  • Rights Arbitrage
  • Weekly Deals Digest (16 Apr) – Lian Beng, Arcland, Essential, Genesis, Newcrest, Rakuten Bank, ZJLD
  • Liquid Universe of European Ordinary and Preferred Shares: April ‘23 Report

Rakuten Bank (5838) IPO – Let’s Go! (Part 2)

By Travis Lundy

  • SBI Sumishin Net Bank (7163 JP) lowered its listing price vs what were already lowered expectations from a year prior. Then Rakuten Bank (5838 JP) lowered its IPO range. 
  • SBI Sumishin dilly-dallied around IPO price for three days then went nuts, rising 40% as of Friday morning. Rakuten Bank’s IPO looks dirt cheap now. 
  • But it is worthwhile comparing it on a spectrum of OTHER Japanese banks and neobanks. 

Arclands (9842) Overpays for Arclands Service Holdings (3085)

By Travis Lundy

  • On Friday Arcland Sakamoto (9842 JP) and restaurant franchise subsidiary Arcland Service (3085 JP), which it launched in 1993 and IPOed in 2007, announced they had agreed to merge. 
  • Arcland SHD runs 18 restaurant brands, of which Katsuya is most well-known, with a total of 750 or so restaurants managed globally. It has grown consistently.
  • The merger ratio is at an all-time high for Arcland SHD. This should be a done deal but I might expect some complaints. I think Arclands is probably overpaying. 

Merger Arb Mondays (17 Apr) – Newcrest, Essential, Healius, Lian Beng, Golden Energy, Arcland

By Arun George

Aiming for Price Movement Patterns with Low Market Exposure in MSCI Korea May Review

By Sanghyun Park

  • We should aim for price movement patterns with relatively low market exposure. One of them is the post-effective upward price movement of deletions.
  • The relative price performance for one week after the implementation compared to KOSPI 200 was consistently positive, ranging from 2.41% to 6.82%.
  • Given the recent price movement of four deletion candidates, there is again a high possibility that the price distortion caused by MSCI flow will revert after the effective date.

Rights Arbitrage

By Jesus Rodriguez Aguilar

  • The rights issue is fully underwritten and should bolster the balance sheet. This is akin to a placing by market volume. There are arbitrage opportunities (although not limitless borrowing available).
  • The arbitrage is a long position on a synthetic put. Rights will trade up to 17:30 on 3 May.
  • The new shares coming is a giant block compared to the existing shares outstanding. There may be a wave of selling from 4 May, and the shares should drop then.

Weekly Deals Digest (16 Apr) – Lian Beng, Arcland, Essential, Genesis, Newcrest, Rakuten Bank, ZJLD

By Arun George

Liquid Universe of European Ordinary and Preferred Shares: April ‘23 Report

By Jesus Rodriguez Aguilar

  • Since mid-March, spreads have generally tightened across our liquid universe (6 have widened, 12 tightened, 1 at same level).
  • Possible trades long ordinary / short preferred shares: Fuchs Petrolub, Henkel, Handelsbanken, SSAB Svenska Stal.
  • Possible trades long preferred / short ordinary shares: Sixt, VW, Danieli, Grifols, Atlas Copco.

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

  • ✓ Unlimited Research Summaries
  • ✓ Personalised Alerts
  • ✓ Custom Watchlists
  • ✓ Company Data and News
  • ✓ Events & Webinars
Sign Up for Free