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Smartkarma Daily Briefs

Oct 22
0

Daily Brief Japan: Japan Tobacco and more

By | Daily Briefs, Japan

In today’s briefing:

  • Japan Tobacco High Conviction Update: Guidance Has Upside Potential, The Market Is Pass Russia Fears

Japan Tobacco High Conviction Update: Guidance Has Upside Potential, The Market Is Pass Russia Fears

By Oshadhi Kumarasiri

  • Just eight months into Russia’s Ukraine invasion, Japan Tobacco (2914 JP)’s share price has moved back above the pre-Ukraine invasion level suggesting that investors are over with Russia exposure fears.
  • Based on the company’s guidance upgrade trend historically and YTD financial performance, we are expecting around ¥70bn upside to 2022 OP guidance in 3Q22.
  • With earnings back on a growth trajectory, we are expecting a reversal of the 2017-21 share price to earnings trend to take Japan Tobacco shares over ¥3,500 in the short-term.

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Oct 22
0

Daily Brief China: Cafe De Coral Holdings, Meituan, Alam Sutera Realty, WuXi AppTec Co Ltd, Tencent and more

By | China, Daily Briefs

In today’s briefing:

  • Cafe De Coral (341): Start to Show Positive Result
  • Meituan – What to Look for in 3Q22 Result?
  • Weekly Wrap – 21 Oct 2022
  • Weekly Wrap – 21 Oct 2022
  • Shanghai/​​​​​​​​​​​​​​​​​Shenzhen Northbound Connect: Weekly Moves (21 October 2022)
  • Shanghai/​​​​​​​​​​​​​​​​​Shenzhen Southbound Connect: Weekly Moves (21 October 2022)

Cafe De Coral (341): Start to Show Positive Result

By Henry Soediarko

  • The share price was beaten down during COVID thanks to the lockdown and further restrictive policy. 
  • The recent result has been encouraging especially with the loosening of the restrictive measures.
  • Cafe De Coral Holdings (341 HK) is trading at a deep discount to its peers.

Meituan – What to Look for in 3Q22 Result?

By Xin Yu, CFA

  • Key areas to pay attention in 3Q22: 1) Meituan Instashopping’s growth rate, 2) Meituan Select’s unit economics, 
  • 3) 4Q guidance for food delivery and in-store, hotel and travel recovery.
  • Valuation is entering an attractive territory with recent stock price correction.

Weekly Wrap – 21 Oct 2022

By Charles Macgregor

Lucror Analytics Weekly Wraps provide an overview of all Morning Views comments and reports published by our analyst team in the past week, and also showcase a list of the most-read reports.

In this Insight:

  1. ABM Investama
  2. Agile Property Holdings
  3. Fosun International
  4. Kawasan Industri Jababeka
  5. China Jinmao Holdings

and more…

Weekly Wrap – 21 Oct 2022

By Charles Macgregor

Lucror Analytics Weekly Wraps provide an overview of all Morning Views comments and reports published by our analyst team in the past week, and also showcase a list of the most-read reports.

In this Insight:

  1. ABM Investama
  2. Agile Property Holdings
  3. Fosun International
  4. Kawasan Industri Jababeka
  5. China Jinmao Holdings

and more…

Shanghai/​​​​​​​​​​​​​​​​​Shenzhen Northbound Connect: Weekly Moves (21 October 2022)

By David Blennerhassett

Shanghai/​​​​​​​​​​​​​​​​​Shenzhen Southbound Connect: Weekly Moves (21 October 2022)

By David Blennerhassett

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Oct 22
0

Daily Brief Quantitative Analysis: Hong Kong Buybacks Weekly (Oct 21st): AIA and more

By | Daily Briefs, Quantitative Analysis

In today’s briefing:

  • Hong Kong Buybacks Weekly (Oct 21st): AIA, Tencent, Wuxi Biologics

Hong Kong Buybacks Weekly (Oct 21st): AIA, Tencent, Wuxi Biologics

By Ke Yan, CFA, FRM

  • We analyze statistics on top repurchases over one week, one month, one quarter and one year periods ended on Oct 21st based on HKEx daily reports.
  • In the past 7 days, the top 3 companies that repurchased the most shares from the market were Aia (1299 HK), Tencent (700 HK), Wuxi Biologics (2269 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), Wuxi Biologics (2269 HK).

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Oct 22
0

Daily Brief Credit: Weekly Wrap – 21 Oct 2022 and more

By | Credit, Daily Briefs

In today’s briefing:

  • Weekly Wrap – 21 Oct 2022
  • Medco Energi – Event Flash – Tender Offer For Up To USD 250 Mn Of Bonds – Lucror Analytics
  • Cleveland-Cliffs Inc: Labor Agreement & Other Developments

Weekly Wrap – 21 Oct 2022

By Charles Macgregor

Lucror Analytics Weekly Wraps provide an overview of all Morning Views comments and reports published by our analyst team in the past week, and also showcase a list of the most-read reports.

In this Insight:

  1. ABM Investama
  2. Agile Property Holdings
  3. Fosun International
  4. Kawasan Industri Jababeka
  5. China Jinmao Holdings

and more…

Medco Energi – Event Flash – Tender Offer For Up To USD 250 Mn Of Bonds – Lucror Analytics

By Leonard Law, CFA

Medco Energi has launched a cash tender offer for up to USD 250 mn of three USD bonds. If the tender is successful, we expect gross debt to be reduced by USD 100 mn, the debt maturity profile to be lengthened and interest expense to decline. Tendering the bonds would make sense if noteholders require liquidity. Otherwise, they could consider holding the notes given the improving credit fundamentals.

Cleveland-Cliffs Inc: Labor Agreement & Other Developments

By Baptista Research

  • With Cleveland-Cliffs’ results just around the corner, it is to be seen how the management has progressed with their execution in terms of profitability and their attempts towards free cash-flow-driven reduction in debt.
  • However, higher costs and inflation led to a drop in margins and it had missed out on earnings.
  • The gross inventory values in terms of the working capital increased in the last quarter because of higher costs, and the overall steel inventory volumes decreased.

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Oct 22
0

Daily Brief Equity Bottom-Up: Cafe De Coral (341): Start to Show Positive Result and more

By | Daily Briefs, Equity Bottom-Up

In today’s briefing:

  • Cafe De Coral (341): Start to Show Positive Result
  • Japan Tobacco High Conviction Update: Guidance Has Upside Potential, The Market Is Pass Russia Fears
  • Meituan – What to Look for in 3Q22 Result?
  • Snap 3Q22: Tik Tik Tik (Tok) …BOOM
  • Textron Inc: New Product Launches & Other Developments

Cafe De Coral (341): Start to Show Positive Result

By Henry Soediarko

  • The share price was beaten down during COVID thanks to the lockdown and further restrictive policy. 
  • The recent result has been encouraging especially with the loosening of the restrictive measures.
  • Cafe De Coral Holdings (341 HK) is trading at a deep discount to its peers.

Japan Tobacco High Conviction Update: Guidance Has Upside Potential, The Market Is Pass Russia Fears

By Oshadhi Kumarasiri

  • Just eight months into Russia’s Ukraine invasion, Japan Tobacco (2914 JP)’s share price has moved back above the pre-Ukraine invasion level suggesting that investors are over with Russia exposure fears.
  • Based on the company’s guidance upgrade trend historically and YTD financial performance, we are expecting around ¥70bn upside to 2022 OP guidance in 3Q22.
  • With earnings back on a growth trajectory, we are expecting a reversal of the 2017-21 share price to earnings trend to take Japan Tobacco shares over ¥3,500 in the short-term.

Meituan – What to Look for in 3Q22 Result?

By Xin Yu, CFA

  • Key areas to pay attention in 3Q22: 1) Meituan Instashopping’s growth rate, 2) Meituan Select’s unit economics, 
  • 3) 4Q guidance for food delivery and in-store, hotel and travel recovery.
  • Valuation is entering an attractive territory with recent stock price correction.

Snap 3Q22: Tik Tik Tik (Tok) …BOOM

By Aaron Gabin

  • How long until SNAP gets back to Zuck’s original $3B buyout offer?!
  • Key negative point: US engagement dropped 5% despite user growth +4%…we think its BeReal as much as TikTok.
  • Uninvestable or Long Time Horizon? Least visibility of any major public company we’ve ever followed. Don’t know the answer!

Textron Inc: New Product Launches & Other Developments

By Baptista Research

  • Textron has its results just around the corner and there is a good chance that the company may deliver an all-around beat.
  • It had a solid previous quarter with strong execution and higher revenues that resulted in segment profit margin.
  • On the innovation front, Textron delivered the foremost Cessna SkyCourier to its launch customer FedEx and the foremost XLS Gen2 aircraft.

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Oct 22
0

Daily Brief Thematic (Sector/Industry): Après Moi Le Deluge: What 20th CPC National Congress Says About China’s Future and more

By | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

  • Après Moi Le Deluge: What 20th CPC National Congress Says About China’s Future
  • Japan Weekly | Lasertec, Muji, Disco, Shimano

Après Moi Le Deluge: What 20th CPC National Congress Says About China’s Future

By Evelyn Zhang

  • “Common prosperity “ to replace GDP growth as development target. Development of the private economy to be guided by the government.
  • Localization & substitution with Chinese software, hardware, chips, semiconductor & consumer companies, promote manufacturing along with autonomous control and real economy. Focus on domestic demand rather than being world factory.
  • Energy independence through new energy facility, VPP, EV to increase, along with Chinese medicine and other Chinese consumer brands. A possible move to fortify Chinese economy against potential Western sanctions.

Japan Weekly | Lasertec, Muji, Disco, Shimano

By Mark Chadwick

  • The yen hit a fresh 32-year low of 151 against the dollar….and then surged 4 yen in an hour on Friday. BOJ Intervention?
  • Toyota announced that it will not hit its plan to produce 9.7m units this year due to semiconductor shortages. 
  • Japan core inflation hit 8-year high of 3% in September. Japanese Trade Union Confederation (Rengo) seeking 5% pay hikes. 

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Oct 22
0

Daily Brief ECM: Blibli IPO: Valuation Insights and more

By | Daily Briefs, ECM

In today’s briefing:

  • Blibli IPO: Valuation Insights
  • Bionote Pre-IPO – The Negatives – Fortunes Generated from a Sole Related Party
  • Bumble Inc.: New Feature Additions & Other Developments

Blibli IPO: Valuation Insights

By Arun George

Bionote Pre-IPO – The Negatives – Fortunes Generated from a Sole Related Party

By Clarence Chu

  • Bionote (377740 KS) is looking to raise approximately US$200m in its Korean IPO. The IPO would consist of both a primary and secondary selldown.
  • Bionote is an integrated producer of diagnostics test products and biocontent products. Based on its unique recombinant antigen and antibody manufacturing technology, the firm researches and develops diagnostic reagent products.
  • A large part of the firm’s fortunes came from supplying to a sole customer, which is also a related party. Margins have since come under pressure as well.

Bumble Inc.: New Feature Additions & Other Developments

By Baptista Research

  • Bumble delivered a mixed set of results for the past quarter surpassing Wall Street expectations on the revenue front but missing out on earinings.
  • The Bumble app continued to grow as the company performed well in traditional as well as international growth markets.
  • In the quarter, Bumble brought a wide portfolio of discovery-oriented products to the market.

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Oct 22
0

Daily Brief Event-Driven: OZ Minerals – Circumstances May Merit a Revised Tilt and more

By | Daily Briefs, Event-Driven

In today’s briefing:

  • OZ Minerals – Circumstances May Merit a Revised Tilt
  • MSCI Korea Rebalance: Bottom 5% Continue to Underperform
  • Jasmine International: Last Minute Wrinkle To Broadband Sale
  • CSC/Intertrust: End of Offer Period
  • Shanghai/​​​​​​​​​​​​​​​​​Shenzhen Northbound Connect: Weekly Moves (21 October 2022)
  • Kotak Mahindra Bank (KMB IN): Foreign Room >20% Should See Staggered FTSE Inclusion Starting March
  • Shanghai/​​​​​​​​​​​​​​​​​Shenzhen Southbound Connect: Weekly Moves (21 October 2022)

OZ Minerals – Circumstances May Merit a Revised Tilt

By Travis Lundy

  • Copper is widely recognised to be in somewhat short supply, and EV/electrification would increase demand going forward (though slower Chinese homebuilding would soften it).
  • A number of developments suggest a further squeeze in prices could be near and copper price strength along with AUD weakness makes an AUD-denominated OZL Takeover Price easier to raise.
  • Short-Term positioning and longer-term supply constraints are currently battling for near-term import, but medium-term, there’s no escaping the imbalance. Looks like a buy now.

MSCI Korea Rebalance: Bottom 5% Continue to Underperform

By Douglas Kim

  • In this insight, we provide a ranking system for targeting the bottom 5% of potential exclusion candidates in the upcoming MSCI Korea index rebalance in November.
  • The ranking system is based on a combined weighted rankings based on MSCI weight, market cap, and ADTV.
  • The six stocks that have received lowest weights include Meritz Financial Group, S 1 Corp, Amorepacific Group, CJ Corp, Green Cross Corp,  and LG Household & Health Care-Pref. 

Jasmine International: Last Minute Wrinkle To Broadband Sale

By David Blennerhassett

CSC/Intertrust: End of Offer Period

By Jesus Rodriguez Aguilar

  • CSC and Intertrust have already obtained clearances from all different 13 required regulators. After several extensions, the Offer Period will now end on 31 October.
  • Intertrust has had a far from stellar performance on the stock market. Hence, I believe acceptances will be over 80%. The offer will be declared unconditional and the shares delisted.
  • Gross spread is 0.3% and the estimated annual return is 6.99% (settlement will be on or before 7 November. Long and tender/accept the offer.

Shanghai/​​​​​​​​​​​​​​​​​Shenzhen Northbound Connect: Weekly Moves (21 October 2022)

By David Blennerhassett

Kotak Mahindra Bank (KMB IN): Foreign Room >20% Should See Staggered FTSE Inclusion Starting March

By Brian Freitas

  • Foreign investor selling has taken the foreign headroom on Kotak Mahindra Bank (KMB) to 22%. That should result in the stock being added to the FTSE All-World Index in March.
  • The stock will initially be added to the index at an investability weight of 5%. Subject to >20% foreign headroom, the investability weight will increase by 5% at subsequent rebalances.
  • Continued foreign selling could result in an MSCI weight increase if the headroom increases above 25%. That could still be some time away though.

Shanghai/​​​​​​​​​​​​​​​​​Shenzhen Southbound Connect: Weekly Moves (21 October 2022)

By David Blennerhassett

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Oct 22
0

Daily Brief Macro: UK: Retail Mourns Funeral with Closures and more

By | Daily Briefs, Macro

In today’s briefing:

  • UK: Retail Mourns Funeral with Closures

UK: Retail Mourns Funeral with Closures

By Phil Rush

  • The hangover from Prime Day deepened to mourning in September as the UK returned to something akin to lockdown with widespread closures for the Queen’s funeral.
  • A worse crash cut another tenth from our Sep-22 GDP forecast to -0.4% m-o-m but leaves Q3 at -0.5% q-o-q in our below-consensus call. October should rebound more.
  • Housing market pains may be the next blow to consumers after surging inflation and rates, as its sharp slowdown looks like a stalling that could easily roll into a crash.

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Oct 22
0

Most Read: Chunbo, Shinsei Bank, HDFC Limited, EC Healthcare, OZ Minerals Ltd, GS Holdings, Total Access Communication, Meritz Financial Group, Jasmine International PCL, Japan Tobacco and more

By | Daily Briefs, Most Read

In today’s briefing:

  • Solactive Lithium Index Rebalancing: Noteworthy Names in Korea Before the Announcement
  • Shinsei Bank (8303 JP) – Reading Between The Lines
  • HDFC/​​HDFC Bank Mega Merger: End Game in Sight
  • EC Healthcare (2138 HK): Record High Sales in H1FY23; Medical Segment Remains Key Growth Driver
  • OZ Minerals – Circumstances May Merit a Revised Tilt
  • A Pair Trade Between GS Holdings & GS Retail
  • DTAC/True: NBTC Green Lights Mobile Duopoly. With Caveats
  • MSCI Korea Rebalance: Bottom 5% Continue to Underperform
  • Jasmine International: Last Minute Wrinkle To Broadband Sale
  • Japan Tobacco High Conviction Update: Guidance Has Upside Potential, The Market Is Pass Russia Fears

Solactive Lithium Index Rebalancing: Noteworthy Names in Korea Before the Announcement

By Sanghyun Park

  • LG Chem’s deletion is almost a done deal. The pouch-type pack goes to LG Energy, and the cathode business is not big enough to beat L&F.
  • Chunbo is an additive field that this index has not included so far. So, Chunbo will be added as a new addition rather than replacing someone else.
  • SK IE Tech is quite tricky. The key is to see separator and elecfoil as the same field. If so, SK IET is likely to replace Iljin Materials.

Shinsei Bank (8303 JP) – Reading Between The Lines

By Travis Lundy

  • Yesterday, a Kyodo News article suggested SBI was “planning to take Shinsei private.”
  • This morning, near-identically-worded replies were proffered, belatedly, and SBI appears to have moved its earnings release date to match Shinsei’s.
  • It helps to remember Communications mandated by Exchange Rules are worded so that they are not technically or legally incorrect. Shareholder transparency and good governance is not the goal.

HDFC/​​HDFC Bank Mega Merger: End Game in Sight

By Brian Freitas

  • Foreign shareholding in HDFC Limited (HDFC IN) has inched higher while moving a tad lower on HDFC Bank (HDFCB IN). Overall, no change in foreign room on the merged entity. 
  • The merger could complete in Q1 2023 and there could be sizeable buying from MSCI trackers. There should be no change for FTSE trackers.
  • The recently announced market consultation by NSE Indices should result in no buying/selling from passive trackers; there will be some additions to the NIFTY Index and Nifty Next 50 Index.

EC Healthcare (2138 HK): Record High Sales in H1FY23; Medical Segment Remains Key Growth Driver

By Tina Banerjee

  • EC Healthcare (2138 HK) expects to achieve a record-high sales volume of no less than HK$1.8 in H1FY23, representing a no less than 17% y/y increase.  
  • The company is optimistic about its business development as the Hong Kong government’s pandemic policy stance is heading towards “normalization” and recently further relaxed quarantine arrangements for inbound travelers.
  • With the economy reopening, the company is in a position to reap the benefit of M&A worth HK$641 million completed in FY22.  

OZ Minerals – Circumstances May Merit a Revised Tilt

By Travis Lundy

  • Copper is widely recognised to be in somewhat short supply, and EV/electrification would increase demand going forward (though slower Chinese homebuilding would soften it).
  • A number of developments suggest a further squeeze in prices could be near and copper price strength along with AUD weakness makes an AUD-denominated OZL Takeover Price easier to raise.
  • Short-Term positioning and longer-term supply constraints are currently battling for near-term import, but medium-term, there’s no escaping the imbalance. Looks like a buy now.

A Pair Trade Between GS Holdings & GS Retail

By Douglas Kim

  • In this insight, we discuss a pair trade between GS Holdings (078930 KS) (go long) and GS Retail (007070 KS) (go short).
  • The main investment thesis of this pair trade is that investors will allocate greater portion of their capital to stocks with deep discount to their NAVs such as GS Holdings.
  • As the household disposable income continues to get pressured, this will likely force the Korean households to reduce consumer spending, which is likely to negatively impact GS Retail.

DTAC/True: NBTC Green Lights Mobile Duopoly. With Caveats

By David Blennerhassett

  • Nearly eleven months after Total Access Communication (DTAC TB) and True Corp Pcl (TRUE TB) first announced a merger, the NBTC, the Thai telecommunication regulator, has given the go-ahead.  
  • This long-winded regulatory process hinged on whether the NBTC actually had the legal clout to halt the merger, which would create a duopoly with Advanced Info Service (ADVANC TB) 
  • The transaction process should accelerate from here with an expected listing of the new entity by year-end. 

MSCI Korea Rebalance: Bottom 5% Continue to Underperform

By Douglas Kim

  • In this insight, we provide a ranking system for targeting the bottom 5% of potential exclusion candidates in the upcoming MSCI Korea index rebalance in November.
  • The ranking system is based on a combined weighted rankings based on MSCI weight, market cap, and ADTV.
  • The six stocks that have received lowest weights include Meritz Financial Group, S 1 Corp, Amorepacific Group, CJ Corp, Green Cross Corp,  and LG Household & Health Care-Pref. 

Jasmine International: Last Minute Wrinkle To Broadband Sale

By David Blennerhassett

Japan Tobacco High Conviction Update: Guidance Has Upside Potential, The Market Is Pass Russia Fears

By Oshadhi Kumarasiri

  • Just eight months into Russia’s Ukraine invasion, Japan Tobacco (2914 JP)’s share price has moved back above the pre-Ukraine invasion level suggesting that investors are over with Russia exposure fears.
  • Based on the company’s guidance upgrade trend historically and YTD financial performance, we are expecting around ¥70bn upside to 2022 OP guidance in 3Q22.
  • With earnings back on a growth trajectory, we are expecting a reversal of the 2017-21 share price to earnings trend to take Japan Tobacco shares over ¥3,500 in the short-term.

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