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Smartkarma Daily Briefs

Mar 06
0

Daily Brief Quantitative Analysis: Northbound Flows (Mar 1st): Longi Green Energy Technology and more

By | Daily Briefs, Quantitative Analysis

In today’s briefing:

  • Northbound Flows (Mar 1st): Longi Green Energy Technology
  • A-H Premium Weekly (Mar 3rd): Xinjiang Goldwind, ZTE, China Southern, CRRC, GWM, China Telecom
  • HK Short Interest Weekly: Greatwall Motor, Yum China, Meitu, Techtronic
  • Hong Kong Connect Flows (Mar 1st): Tencent, Great Wall Motor, CCB, HKEx

Northbound Flows (Mar 1st): Longi Green Energy Technology

By Ke Yan, CFA, FRM

  • We analyze the weekly Shanghai/Shenzhen northbound Connect flows with our data engine for holding position as of March 1st.
  • We estimate the weekly inflows to be US$560.9 million, led by information technology, financials, communication services sectors, and offset by materials, energy.
  • We estimate that the inflows was USD 561m and highlight flows for Longi Green Energy Technology.

A-H Premium Weekly (Mar 3rd): Xinjiang Goldwind, ZTE, China Southern, CRRC, GWM, China Telecom

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 111.9% as of Mar 3rd.
  • The average A-H premium changed by 0.3ppt week on week, led by communication services, consumer discretionary, financials and offset by real estate, information technology, industrials.
  • We highlight weekly changes in A-H premium for Xinjiang Goldwind, ZTE, China Southern, CRRC, GWM, China Telecom, CCCC, China Oilfield.

HK Short Interest Weekly: Greatwall Motor, Yum China, Meitu, Techtronic

By Ke Yan, CFA, FRM

  • We analyzed the latest HK SFC report for aggregate short position as of Feb 24th.
  • Top short increases and decreases were tabulated for one week and four week period. 
  • We highlight short changes in Greatwall Motor, Yum China, Meitu, Techtronic.

Hong Kong Connect Flows (Mar 1st): Tencent, Great Wall Motor, CCB, HKEx

By Ke Yan, CFA, FRM

  • We analyze the weekly Hong Kong Connect flows with our data engine for holding position as of March 1st.
  • The top stocks by inflows and outflows were tabulated for all market, HSCEI, mid cap and s/mid cap groups.
  • We highlight flows for Tencent, Great Wall Motor, China Construction Bank, Hong Kong Exchanges And Clearing.

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Mar 06
0

Daily Brief Event-Driven: Northbound Stock Connect Expansion: List Announced; Potential MSCI Adds in May and more

By | Daily Briefs, Event-Driven

In today’s briefing:

  • Northbound Stock Connect Expansion: List Announced; Potential MSCI Adds in May
  • KOSPI Size Indices – Changes in March & Implications
  • OZ Minerals (OZL AU): Scheme Meeting in April; Potential S&P/ASX Changes
  • Merger Arb Mondays (06 Mar) – HKBN, Yashili, OZ Minerals, Nitro, Tyro, Golden Energy, GK Goh

Northbound Stock Connect Expansion: List Announced; Potential MSCI Adds in May

By Brian Freitas

  • HKEX (388 HK) has announced that the expansion of Northbound Stock Connect eligible stocks will take effect from the start of trading on 13 March.
  • 598 stocks listed on the Shanghai Stock Exchange and 436 stocks listed on the Shenzhen Stock Exchange will be added to Northbound Stock Connect.
  • Currently, we see 43 stocks being added to the MSCI China Index in May (inflows of US$1.42bn), further increasing China’s weight in the MSCI Emerging Markets Index. 

KOSPI Size Indices – Changes in March & Implications

By Brian Freitas

  • There are 5 migrations from MidCap to LargeCap, 4 LargeCap to MidCap, 3 new additions to MidCap, 9 SmallCap to MidCap, 11 MidCap to SmallCap, 3 new additions to SmallCap.
  • The migrations from SmallCap to MidCap have outperformed the stocks migrating between other segments by a huge margin over the last few months.
  • Given the huge outperformance and looking at how the migrations have performed historically, we’d expect the stocks migrating to MidCap to underperform post implementation of the changes.

OZ Minerals (OZL AU): Scheme Meeting in April; Potential S&P/ASX Changes

By Brian Freitas

  • The OZ Minerals (OZL AU) Scheme Meeting for the acquisition by BHP Group (BHP AU) will be held 13 April. The stock could stop trading post close on 18 April.
  • OZ Minerals Ltd (OZL AU) is a member of the S&P/ASX100 Index and S&P/ASX 200 (AS51 INDEX) so there will be replacements made at the close on 18 April.
  • Passive trackers will need to buy a fair amount of stock (with a decent impact) on the potential inclusions and the stocks could outperform over the next few weeks.

Merger Arb Mondays (06 Mar) – HKBN, Yashili, OZ Minerals, Nitro, Tyro, Golden Energy, GK Goh

By Arun George

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Mar 06
0

Daily Brief Thematic (Sector/Industry): Good Morning Japan | Equities – All Good (Again); Strong Tech Bid; EV and more

By | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

  • Good Morning Japan | Equities – All Good (Again); Strong Tech Bid; EV, AI Drivers; NUGGET: Advantest
  • China NPC: Implications of Government Working Report 2023
  • China Auto – Trough Behind Us, Green Shoots Ahead
  • Copyright Wars
  • Weekly Stock Bullfinder – Week of 3/6

Good Morning Japan | Equities – All Good (Again); Strong Tech Bid; EV, AI Drivers; NUGGET: Advantest

By Mark Chadwick

  • OVERSEAS. Strong Beta Close in US Markets, with SPX +1.6%; US 10YR Yield retreated to under 4%; Tech  w/SOX +1.5%, led by BroadCom. +5.7%;  Ford +4% on strong EV demand
  • JAPAN. NKY Futs +0.9% vs Cash; USDJPY strenthens 135.8;  Expect follow on Beta/Semi bid on Broadcom sentiment lift; Govt to restrain EPCO px Hikes; Renesas, OAL, JAL added to NKY
  • NUGGET: Advantest looks best positioned to benefit from the emerging boom in Generative AI.

China NPC: Implications of Government Working Report 2023

By Osbert Tang, CFA

  • Although 5% GDP growth target for 2023 is at the low end of market speculation of 5.5-6%, we think this reflects the government’s conservative stance amid post-COVID recovery. 
  • A 0.2pp higher budget deficit and a special purpose bond quota of Rmb3.8trn suggested that government spending will stay as important economic driver.
  • Consumption is another major stimulus for economic growth, and more supportive measures will be rolled out – we have seen many cities planning to hand out consumption vouchers.

China Auto – Trough Behind Us, Green Shoots Ahead

By Victoria Li

  • 2M2023 retail sales of passengers vehicles down 21% yoy, the biggest decline in 10 years.
  • Demand recovery is expected from March with signs of warming up starting in NEV segment after price cuts and local supportive police’s introduced 
  • Cost friendly models would continue be preferred. i.e demand in mass market may be stronger than luxury market, PHEV segment may do better than BEV segment

Copyright Wars

By subSPAC

  • AI has been the talk of the town in 2023, and two products in particular, ChatGPT and Dall-E 2, have been making waves with their massive popularity and usage.
  • ChatGPT hit the incredible milestone of 100 million users in just two months, so it’s no wonder investors and creators are excited about the productivity boosts and potential outcomes that AI can bring in the near future.
  • Even mainstream media and tech leaders are heralding AI as the next big thing after the iPhone.

Weekly Stock Bullfinder – Week of 3/6

By Weekly Stock Bull Finder

  • One area that appears to be picking up steam is market participants increasingly seeking out alternative non-government published data to inform real time indicators on the health of the US economy, jobs, and inflation.
  • There are many reasons alternative data sources are picking up importance including declining survey participation rates, significant and material revisions of prior published data, revisions to weightings or calculation methodologies, among others.
  • In particular, the steady structural decline over the past decade of survey responses can lead to inaccurate signals and conclusions with high error rates.

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Mar 06
0

Daily Brief Technical Analysis: EEM Reaction Rise and more

By | Daily Briefs, Technical Analysis

In today’s briefing:

  • EEM Reaction Rise

EEM Reaction Rise

By Thomas Schroeder

  • EEM stage is set for a rise from 38.20/37.80 but will find it hard to get back above 42. Intermediate risk to 36.50 from which point we are more constructive.
  • USD and yield pullbacks are primary inputs amid weak EEM buy volume. Bull yield wedge breakout on the back of high degree bull divergence in yield and the USD.
  • DXY trendline support turn. USD rise has not been aggressive and needs yield to clear 4.25% with a 4.70% target. Risk of a dual yield top exists.

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Mar 06
0

Daily Brief ECM: SBI Sumishin Net Bank IPO: Valuation Insights and more

By | Daily Briefs, ECM

In today’s briefing:

  • SBI Sumishin Net Bank IPO: Valuation Insights
  • Weekly Deals Digest (05 Mar) – Japan Post Bank, SBI Sumishin, HKBN, Yashili, GK Goh, Golden Energy

SBI Sumishin Net Bank IPO: Valuation Insights

By Arun George

  • SBI Sumishin Net Bank (7163 JP), an online bank in Japan, has revived its listing plans to raise up to US$440 million (vs the 2022 target of US$1 billion).
  • We previously discussed the IPO in SBI Sumishin Net Bank IPO: The Investment Case. The shares will be listed on 29 March.
  • In this note, we discuss valuation. Our analysis suggests that SBI Sumishin Net Bank is fairly valued at the IPO reference price of JPY1,260. We would participate in the IPO.

Weekly Deals Digest (05 Mar) – Japan Post Bank, SBI Sumishin, HKBN, Yashili, GK Goh, Golden Energy

By Arun George

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Mar 06
0

Daily Brief ESG: Need to Think About How to Make the Market a Place Where Young and Mature Generations Want to Invest and more

By | Daily Briefs, ESG

In today’s briefing:

  • Need to Think About How to Make the Market a Place Where Young and Mature Generations Want to Invest

Need to Think About How to Make the Market a Place Where Young and Mature Generations Want to Invest

By Aki Matsumoto

  • The demand for high-dividend stocks is due to the fact that financial assets are skewed toward the elderly and that the elderly have high demand for high-dividend stocks.
  • The under-40s generation, which seeks growth rather than dividends, focus on U.S. equities. Even if the tax deferral allowance is expanded, they are likely to pass through Japanese equities.
  • For asset building, investing in markets with higher returns is good idea. However, considering the market as source of risk money, Japanese equities and Tokyo market aren’t in good condition.

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Mar 06
0

Daily Brief Industrials: Beijing-Shanghai High Speed Railway-A, Sebang Co Ltd and more

By | Daily Briefs, Industrials

In today’s briefing:

  • Northbound Stock Connect Expansion: List Announced; Potential MSCI Adds in May
  • KOSPI Size Indices – Changes in March & Implications

Northbound Stock Connect Expansion: List Announced; Potential MSCI Adds in May

By Brian Freitas

  • HKEX (388 HK) has announced that the expansion of Northbound Stock Connect eligible stocks will take effect from the start of trading on 13 March.
  • 598 stocks listed on the Shanghai Stock Exchange and 436 stocks listed on the Shenzhen Stock Exchange will be added to Northbound Stock Connect.
  • Currently, we see 43 stocks being added to the MSCI China Index in May (inflows of US$1.42bn), further increasing China’s weight in the MSCI Emerging Markets Index. 

KOSPI Size Indices – Changes in March & Implications

By Brian Freitas

  • There are 5 migrations from MidCap to LargeCap, 4 LargeCap to MidCap, 3 new additions to MidCap, 9 SmallCap to MidCap, 11 MidCap to SmallCap, 3 new additions to SmallCap.
  • The migrations from SmallCap to MidCap have outperformed the stocks migrating between other segments by a huge margin over the last few months.
  • Given the huge outperformance and looking at how the migrations have performed historically, we’d expect the stocks migrating to MidCap to underperform post implementation of the changes.

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Mar 06
0

Daily Brief Equity Bottom-Up: SK Bioscience (302440 KS): Disappointing 2022 Result; Non-COVID Vaccines Are Key to Revival and more

By | Daily Briefs, Equity Bottom-Up

In today’s briefing:

  • SK Bioscience (302440 KS): Disappointing 2022 Result; Non-COVID Vaccines Are Key to Revival
  • Memory Monitor: Latest Two Signals Show Inventory Problems Worsening; Long Micron Vs. Short Nanya
  • BeiGene (6160.HK/BGNE.US) – Miracles Don’t Always Happen
  • NEC (6701 JP): Positive Orders Trend, Lagging Share Price

SK Bioscience (302440 KS): Disappointing 2022 Result; Non-COVID Vaccines Are Key to Revival

By Tina Banerjee

  • SK Bioscience (302440 KS) reported sluggish performance in 2022, with revenue and net profit declining 51% and 66%, YoY, respectively, due to the weakening demand of the COVID-19 vaccines.
  • Although the company’s shingles vaccine is the leader in domestic market, it is facing new competition as an international player has launched a new shingles vaccine in Korea this year.
  • SK Bioscience stopped production of its bread-and-butter earning flu vaccine to focus on COVID-19 vaccine, thereby losing market share to rival. Re-entering the market will not be easy.  

Memory Monitor: Latest Two Signals Show Inventory Problems Worsening; Long Micron Vs. Short Nanya

By Vincent Fernando, CFA

  • Signal #1 — Micron’s CFO warns that margins will be coming in lower than expected and inventories will remain elevated through FY2023E.
  • Signal #2 — South Korea semiconductor inventories jump 28% MoM, 39.5% YoY.
  • Implications for memory chip manufacturers: Biased to Long Micron vs. Short Nanya.

BeiGene (6160.HK/BGNE.US) – Miracles Don’t Always Happen

By Xinyao (Criss) Wang

  • It’s unrealistic to turn losses into profits by relying on BRUKINSA alone. BeiGene needs to have three blockbuster products with US$1 billion sales, which is difficult considering current pipeline situation. 
  • If investors are optimistic about BeiGene, to some extent, they are betting on the success of BeiGene’s model, but of course, they should also bear the corresponding risks and costs. 
  • BeiGene is overvalued, and its current market value has already priced in all positive factors. In this position, we think the risks far outweigh the benefits, because miracles don’t always happen.   

NEC (6701 JP): Positive Orders Trend, Lagging Share Price

By Scott Foster

  • Upward trend in new orders suggest that guidance is conservative.
  • Long-Term prospects good with digitalization, 5G and optical-electronic technology for 6G.
  • Lagging share price offers attractive valuations and 42% potential upside to previous high.

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Mar 06
0

Daily Brief Energy/Materials: Bellevue Gold and more

By | Daily Briefs, Energy & Materials Sector

In today’s briefing:

  • OZ Minerals (OZL AU): Scheme Meeting in April; Potential S&P/ASX Changes

OZ Minerals (OZL AU): Scheme Meeting in April; Potential S&P/ASX Changes

By Brian Freitas

  • The OZ Minerals (OZL AU) Scheme Meeting for the acquisition by BHP Group (BHP AU) will be held 13 April. The stock could stop trading post close on 18 April.
  • OZ Minerals Ltd (OZL AU) is a member of the S&P/ASX100 Index and S&P/ASX 200 (AS51 INDEX) so there will be replacements made at the close on 18 April.
  • Passive trackers will need to buy a fair amount of stock (with a decent impact) on the potential inclusions and the stocks could outperform over the next few weeks.

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Mar 06
0

Daily Brief Industrials: Beijing-Shanghai High Speed Railway-A, Sebang Co Ltd and more

By | Daily Briefs, Industrials

In today’s briefing:

  • Northbound Stock Connect Expansion: List Announced; Potential MSCI Adds in May
  • KOSPI Size Indices – Changes in March & Implications

Northbound Stock Connect Expansion: List Announced; Potential MSCI Adds in May

By Brian Freitas

  • HKEX (388 HK) has announced that the expansion of Northbound Stock Connect eligible stocks will take effect from the start of trading on 13 March.
  • 598 stocks listed on the Shanghai Stock Exchange and 436 stocks listed on the Shenzhen Stock Exchange will be added to Northbound Stock Connect.
  • Currently, we see 43 stocks being added to the MSCI China Index in May (inflows of US$1.42bn), further increasing China’s weight in the MSCI Emerging Markets Index. 

KOSPI Size Indices – Changes in March & Implications

By Brian Freitas

  • There are 5 migrations from MidCap to LargeCap, 4 LargeCap to MidCap, 3 new additions to MidCap, 9 SmallCap to MidCap, 11 MidCap to SmallCap, 3 new additions to SmallCap.
  • The migrations from SmallCap to MidCap have outperformed the stocks migrating between other segments by a huge margin over the last few months.
  • Given the huge outperformance and looking at how the migrations have performed historically, we’d expect the stocks migrating to MidCap to underperform post implementation of the changes.

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