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Smartkarma Daily Briefs

Apr 09
0

Daily Brief Health Care: Otsuka Holdings and more

By | Daily Briefs, Healthcare

In today’s briefing:

  • Otsuka Holdings (4578 JP): Strong 2022 Result; 2023 Revenue to Hit Record-High Thanks to Key Drugs

Otsuka Holdings (4578 JP): Strong 2022 Result; 2023 Revenue to Hit Record-High Thanks to Key Drugs

By Tina Banerjee

  • Otsuka Holdings (4578 JP) reported better-than-expected 2022 result. Revenue increased 16% to ¥1,738B and business profit grew 11% to ¥175B, driven by the four global products and the nutraceutical segment.
  • Revenue from four global products surged 26% to ¥619B, representing 54% of pharmaceutical revenue. Otsuka expects the momentum to continue and these products to record revenue of ¥637B in 2023.
  • For 2023, Otsuka has guided for record-high revenue and net profit of ¥1,800B (+4% YoY) and 158B (+18% YoY), respectively, driven by increased revenue from growth businesses.

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Apr 09
0

Most Read: Nitori Holdings, Japan Airlines, Kunlun Tech, Cellivery Therapeutics, Lasertec Corp, Rakuten Bank, GigaVis, Hong Kong Hang Seng Index and more

By | Daily Briefs, Most Read

In today’s briefing:

  • Nikkei 225 Index Rebalance Preview (Sep 2023): Potential Changes & Dark Horses
  • Nikkei 225 Index Rebalance: Passives Trade on Friday
  • Index Rebalance & ETF Flow Recap: MSCI KR, S&P/ASX, SSE50, ChiNext, NIFTY, KQ150, AMFI, Rakuten Bank
  • KOSDAQ150 Ad Hoc Index Rebalance: Humasis (205470 KS) To Replace Cellivery (268600 KS)
  • Index Rebalance & ETF Flow Recap: Nikkei225, KOSDAQ150, KT Corp
  • Rakuten Bank (5838) IPO – New Price Is One To Take (Part 1)
  • Gigavis IPO Preview
  • Gigavis IPO Valuation Analysis
  • Hong Kong Buybacks Weekly (Apr 7th): Tencent, Aia, CSPC
  • EQD | Volatility Update: Weekly Review of Vol Changes and Best Trades- Calm Before the Storm?

Nikkei 225 Index Rebalance Preview (Sep 2023): Potential Changes & Dark Horses

By Brian Freitas

  • The review period for the Nikkei 225 (NKY INDEX) September rebalance ends end July. We highlight 3 potential inclusions and exclusions for the index.
  • There are a few alternate adds that are interesting and their inclusion in the index could move things around a fair bit.
  • Due to the large size difference between the potential adds/deletes, there will be a large funding trade with passive trackers needing to sell over 0.5x ADV on many index constituents.

Nikkei 225 Index Rebalance: Passives Trade on Friday

By Brian Freitas

Index Rebalance & ETF Flow Recap: MSCI KR, S&P/ASX, SSE50, ChiNext, NIFTY, KQ150, AMFI, Rakuten Bank

By Brian Freitas

KOSDAQ150 Ad Hoc Index Rebalance: Humasis (205470 KS) To Replace Cellivery (268600 KS)

By Brian Freitas

  • Following Cellivery Therapeutics (268600 KS) designation as an Administrative Issue and an Investment Attention Issue, the stock will be deleted from the KOSDAQ 150 Index and replaced with Humasis (205470 KS).
  • The timing of the index change is currently uncertain but will be implemented latest by the close of trading on 17 April.
  • Humasis (205470 KS) was limit up on Friday following the ex-date of a 1:3 scrip issue. The stock could continue to move higher over the next week.

Index Rebalance & ETF Flow Recap: Nikkei225, KOSDAQ150, KT Corp

By Brian Freitas

Rakuten Bank (5838) IPO – New Price Is One To Take (Part 1)

By Travis Lundy

  • Rakuten Bank (5838 JP) has priced at a new range of ¥1,300-1,400/share, down from ¥1,630-1,930/share. That lowers TTM PER and PBR to well below where SBI Sumishin was priced.
  • This will now be universally recognised by pre-IPO analysts as a raging buy. Even at the top end. Important considerations:  Rakuten parent TAM, growth, index inclusions, etc. 
  • There are OTHER important considerations going forward which show themselves in the documents. 

Gigavis IPO Preview

By Douglas Kim

  • Gigavis is offering 2.22 million shares in this IPO. The expected market cap of the IPO is from 436 billion won to 503 billion won.
  • The maximum IPO offering amount is 88.1 billion won. The IPO price is between 34,400 won to 39,700 won.
  • Gigavis makes automatic optical repair equipment (AOR) for the semiconductor industry. 

Gigavis IPO Valuation Analysis

By Douglas Kim

  • Our base case valuation of Gigavis IPO is target price of 61,755 won per share, representing 56% higher than the high end of the IPO price range.
  • We estimate the company to generate sales of 126.6 billion won (up 27% YoY) in 2023 and 150.9 billion won (up 19.2% YoY) in 2024.
  • Our base case valuation is based on 21.8x P/E using our estimated net profit of 35.9 billion won in 2023.

Hong Kong Buybacks Weekly (Apr 7th): Tencent, Aia, CSPC

By Ke Yan, CFA, FRM

  • We analyze statistics on top repurchases over one week, one month, one quarter and one year periods ended on Apr 7th based on HKEx daily reports.
  • In the past 7 days, the top 3 companies that repurchased the most shares from the market were Tencent (700 HK), Aia (1299 HK), Cspc Pharmaceutical (1093 HK).
  • In the past 30 days, the top 3 companies that repurchased the most shares from the market were Tencent (700 HK), Aia (1299 HK), Swire Pacific (19 HK).

EQD | Volatility Update: Weekly Review of Vol Changes and Best Trades- Calm Before the Storm?

By Simon Harris

  • Weekly summary of vol changes and moves across Global Markets
  • Analysing ATM volatility and skew changes over the last 5 days
  • We suggest a few trades to take advantage of the implied vol surfaces

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Apr 09
0

Daily Brief Quantitative Analysis: Hong Kong Buybacks Weekly (Apr 7th): Tencent and more

By | Daily Briefs, Quantitative Analysis

In today’s briefing:

  • Hong Kong Buybacks Weekly (Apr 7th): Tencent, Aia, CSPC
  • TWSE Short Interest Weekly (Apr 7th): Makalot, Getac, Via Tech

Hong Kong Buybacks Weekly (Apr 7th): Tencent, Aia, CSPC

By Ke Yan, CFA, FRM

  • We analyze statistics on top repurchases over one week, one month, one quarter and one year periods ended on Apr 7th based on HKEx daily reports.
  • In the past 7 days, the top 3 companies that repurchased the most shares from the market were Tencent (700 HK), Aia (1299 HK), Cspc Pharmaceutical (1093 HK).
  • In the past 30 days, the top 3 companies that repurchased the most shares from the market were Tencent (700 HK), Aia (1299 HK), Swire Pacific (19 HK).

TWSE Short Interest Weekly (Apr 7th): Makalot, Getac, Via Tech

By Ke Yan, CFA, FRM

  • We analyzed the changes in short interest of TWSE Stocks as of Apr 7th which has an aggregated short interest worth USD12.1bn.
  • 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 Makalot, Getac Holdings, Via Tech.

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Apr 09
0

Daily Brief Event-Driven: EQD | Volatility Update: Weekly Review of Vol Changes and Best Trades- Calm Before the Storm? and more

By | Daily Briefs, Event-Driven

In today’s briefing:

  • EQD | Volatility Update: Weekly Review of Vol Changes and Best Trades- Calm Before the Storm?
  • (Mostly) Asia-Pac Weekly Risk Arb Wrap: Mincor, Toyo Construction, Pushpay, Breaker Resources

EQD | Volatility Update: Weekly Review of Vol Changes and Best Trades- Calm Before the Storm?

By Simon Harris

  • Weekly summary of vol changes and moves across Global Markets
  • Analysing ATM volatility and skew changes over the last 5 days
  • We suggest a few trades to take advantage of the implied vol surfaces

(Mostly) Asia-Pac Weekly Risk Arb Wrap: Mincor, Toyo Construction, Pushpay, Breaker Resources

By David Blennerhassett

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Apr 09
0

Daily Brief Macro: US Banks’ Commercial Real Estate Exposure: Not the Same as 2008 and more

By | Daily Briefs, Macro

In today’s briefing:

  • US Banks’ Commercial Real Estate Exposure: Not the Same as 2008

US Banks’ Commercial Real Estate Exposure: Not the Same as 2008

By Said Desaque

  • Loans & leases remain the largest component of bank credit. Tighter monetary conditions are impacting loan quality as testified by rising delinquency rates for auto loans and credit cards.
  • Focus has shifted to the high exposure of smaller banks to commercial real estate loans. Rising CMBS delinquencies are being viewed as potential signs of future trouble for banks.
  • Higher exposure to multi-family loans should help banks due to their historically lower delinquency rates compared to construction and development loans that were much more important in 2008. 

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Apr 09
0

Daily Brief ECM: Weekly Deals Digest (09 Apr) – Rakuten Bank and more

By | Daily Briefs, ECM

In today’s briefing:

  • Weekly Deals Digest (09 Apr) – Rakuten Bank, ZJLD, Harita, HKBN, Toyo, Estia, Mincor, Pushpay

Weekly Deals Digest (09 Apr) – Rakuten Bank, ZJLD, Harita, HKBN, Toyo, Estia, Mincor, Pushpay

By Arun George

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Apr 09
0

Daily Brief Credit: Elon Is Scared Poopless Of Us and more

By | Credit, Daily Briefs

In today’s briefing:

  • Elon Is Scared Poopless Of Us

Elon Is Scared Poopless Of Us

By Vicki Bryan

  • Unlike every other (far larger & richer) social media site, Elon Musk has declared war on Substack and anyone who dares post there as well as on Twitter. 
  • It’s the kind of petty retaliation he’s well known for, and a stunt he could repeat against any publishing platform that displeases him for any reason.
  • His bullying will continue until morale improves. Or until he achieves universal adoration, whichever comes first.

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Apr 09
0

Daily Brief Equity Bottom-Up: Otsuka Holdings (4578 JP): Strong 2022 Result; 2023 Revenue to Hit Record-High Thanks to Key Drugs and more

By | Daily Briefs, Equity Bottom-Up

In today’s briefing:

  • Otsuka Holdings (4578 JP): Strong 2022 Result; 2023 Revenue to Hit Record-High Thanks to Key Drugs
  • A Pair Trade Between KT & LG Uplus

Otsuka Holdings (4578 JP): Strong 2022 Result; 2023 Revenue to Hit Record-High Thanks to Key Drugs

By Tina Banerjee

  • Otsuka Holdings (4578 JP) reported better-than-expected 2022 result. Revenue increased 16% to ¥1,738B and business profit grew 11% to ¥175B, driven by the four global products and the nutraceutical segment.
  • Revenue from four global products surged 26% to ¥619B, representing 54% of pharmaceutical revenue. Otsuka expects the momentum to continue and these products to record revenue of ¥637B in 2023.
  • For 2023, Otsuka has guided for record-high revenue and net profit of ¥1,800B (+4% YoY) and 158B (+18% YoY), respectively, driven by increased revenue from growth businesses.

A Pair Trade Between KT & LG Uplus

By Douglas Kim

  • In this insight, we discuss a pair trade between KT Corp (030200 KS) (go long) and LG Uplus Corp (032640 KS) (go short).
  • The three major reasons for going long on KT Corp include a) the potential inclusion in MSCI Korea Standard index, b) attractive valuations, and c) a new CEO. 
  • KT Corp is a potential inclusion candidate for MSCI Korea Standard index in May 2023. With foreign room at 17%, it is comfortably above the 15% level threshold requirement.

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Apr 08
0

Daily Brief Australia: Empire Energy, Step One Clothing Pty Ltd, X2M Connect ltd, Amaero International Ltd and more

By | Australia, Daily Briefs

In today’s briefing:

  • Empire Energy Group (ASX:EEG) – Gas Bells Are Ringing
  • Step One Clothing Ltd – Underwear Under Valued
  • Step One Holdings Ltd – Underwear Under Valued
  • Empire Energy Group Ltd – Gas Bells Are Ringing
  • X2M Connect Ltd – China Contract Adds to H2 Progress
  • Amaero International Ltd – “Plan B” Brings Risk but Potentially Greater Returns
  • X2M Connect (ASX:X2M) – China Contract Adds to H2 Progress
  • Amaero International (ASX:3DA) – “Plan B” Brings Risk but Potentially Greater Returns

Empire Energy Group (ASX:EEG) – Gas Bells Are Ringing

By Research as a Service (RaaS)

  • Carpentaria-2H testing results continue to build the economic case for EEG
  • IP30 gas flow of 3.0 mmcfd/1000m (normalised) is on the button and early analysis suggests gas recoveries of 6-8Bcf/well could be achievable
  • The business case is building with upgraded resource certification to come heading to a FID target date of end-2023.

Step One Clothing Ltd – Underwear Under Valued

By Research as a Service (RaaS)

  • Step One Clothing (ASX:STP) is a Direct to Consumer (DTC), 100%-own-brand underwear retailer specialising in anti-chafe bamboo underwear across men’s and women’s wear, with a core colour range supplemented by regular limited-edition releases, all with FSC (Forest Stewardship Council) certification throughout the supply chain.
  • The company has operations in Australia (67% of sales), UK, (30% of sales) and the US (3% of sales). A H1 FY23 sales decline of 5.7% was better than our industry average estimate of-19% cycling lockdown, while lower sales and marketing spend saw EBITDA in-line with the pcp at $7.6m, the highest of any industry peer.
  • H2 FY23 should see similar trends and deliver EBITDA well above consensus.

Step One Holdings Ltd – Underwear Under Valued

By Research as a Service (RaaS)

  • Step One Clothing (ASX:STP) is a Direct to Consumer (DTC), 100%-own-brand underwear retailer specialising in anti-chafe bamboo underwear across men’s and women’s wear.,
  • A H1 FY23 sales decline of 5.7% was better than our industry average estimate of -19%, while  EBITDA was in-line with the pcp, the highest of any industry peer.
  • On our estimates this superior business model currently trades at a PER of 1.0x ex-cash. Inventory is the key risk, currently representing ~two years’ sales, but is low fashion risk.leared.

Empire Energy Group Ltd – Gas Bells Are Ringing

By Research as a Service (RaaS)

  • Empire Energy Group Limited (ASX:EEG) is an oil and gas producer/developer, with onshore Northern Territory (NT) and US oil/gas production assets.
  • EEG has the largest tenement position in the highly prospective Greater McArthur Basin, which includes the Beetaloo Sub-basin.
  • The NT energy basins are fast developing as strategic high-calorific gas bolsters for east coast Australia’s future domestic requirements, growing Gladstone LNG ullage and potential supply for Darwin’s expanding LNG export terminals, amid funding support from Territory and Federal governments.

X2M Connect Ltd – China Contract Adds to H2 Progress

By Research as a Service (RaaS)

  • X2M Connect Ltd (ASX:X2M) has developed and is commercialising a patented proprietary Internet of Things (IoT) solution predominantly focused on the utilities sector across the Asia Pacific region, converting legacy meters into smart meters.
  • The company has announced it has secured $1.8m in hardware water quality sensor sales in China with three new contracts.
  • The contracts bring the contribution from China to $3.4m this financial year to date which exceeds the revenue generated from China in FY22.

Amaero International Ltd – “Plan B” Brings Risk but Potentially Greater Returns

By Research as a Service (RaaS)

  • Amaero International Ltd (ASX:3DA) is a global specialist in metal additive manufacturing for the defence, aerospace, and other industrial sectors.
  • Following a strategic review, Amaero has shifted its focus to titanium powder production and has created a new United Arab Emirates-based enterprise, Amaero Advanced Metals Ltd, to build an 827-tonne a year titanium powder operation within Abu Dhabi’s KEZAD industrial park.
  • The nuances of the focus have shifted since the company first announced plans to concentrate on the UAE and titanium powder operations but “Plan B” allows Amaero shareholders to retain 100% ownership of the project which has been scaled back to focus on the opportunity with the greatest economic return.

X2M Connect (ASX:X2M) – China Contract Adds to H2 Progress

By Research as a Service (RaaS)

  • X2M Connect (ASX:X2M), which is focused on digitising the utilities sector across APAC,  has secured $1.8m in hardware water quality sensor sales in China with three new contract.
  • The contracts bring the contribution from China to $3.4m this financial year which exceeds the revenue generated from China in FY22;
  • While this announcement is in our numbers, it provides comfort for both near-term and longer-term estimates as units in the field support future recurring subscription fees.

Amaero International (ASX:3DA) – “Plan B” Brings Risk but Potentially Greater Returns

By Research as a Service (RaaS)

  • Amaero has substantially shifted its strategy to focus on titanium powder production with a new project planned for the UAE.
  • With the greenlight slated for the end of June 2023, we conservatively anticipate first production in H1 FY25, powder qualification in H1 FY27 and “at capacity” production in H1 FY2.
  • We have substantially restruck our earnings forecasts to reflect this new project.

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Apr 08
0

Daily Brief Indonesia: PT Surya Citra Media Tbk and more

By | Daily Briefs, Indonesia

In today’s briefing:

  • PT Surya Citra Media (SCMA IJ) – Primed for Reset in 2023

PT Surya Citra Media (SCMA IJ) – Primed for Reset in 2023

By Angus Mackintosh

  • PT Surya Citra Media Tbk (SCMA IJ) had an exciting 2022, with a ramp-up in new audience share-winning original content along with the boost from the Word Cup rights. 
  • Both SCTV and IVM gained significant audience share in 2022, and Vidio led the charge on OTT driven by killer content, finishing the year with 5m paying subscribers. 
  • Profitability was hit by a sharp rise in production costs and investment in Vidio but we expect significant improvement in 2023. Valuations are attractive with SCMA on 12x FY2023E PER. 

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