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Smartkarma Daily Briefs

Sep 08
0

Daily Brief Consumer: Evolution Gaming Group Ab, Tokyo Stock Exchange Tokyo Price Index Topix, Porsche Automobil Holding Se, Campbell Soup Co, Capri Holdings, Ulta Beauty, Inc., Upstart Holdings Inc and more

By | Consumer, Daily Briefs

In today’s briefing:

  • Evolution Gaming: The World’s Largest Casino, Which You Probably Never Heard Of
  • Investment Managers Should Seek Ways to Reflect ESG Investing in Their Investment Performance
  • Intention to Float Porsche AG: A Good Deal for Porsche Automobile Holding SE
  • Campbell Soup Inc: Online Sales As A Key Driver & Other Factors Driving Growth
  • Capri Holdings: Digital Momentum & Other Drivers
  • Ulta Beauty: The Beauty& Campaign
  • Breaking Estimate Short Candidates: Upstart, Cerence, Zillow, Trex

Evolution Gaming: The World’s Largest Casino, Which You Probably Never Heard Of

By Steven Chen

  • Although lesser-known, this Swedish company dominates one of the most lucrative segments of the global casino industry.
  • In our view, it is probably the only investable casino company, and despite its size, still has a massive growth runway ahead.
  • Our DCF model implies a 15%-20% total return for the company’s long-term shareholders.

Investment Managers Should Seek Ways to Reflect ESG Investing in Their Investment Performance

By Aki Matsumoto

  • The lackluster ESG investing trust performance is the main reason for the sharp decline in new setups, as retail investors tend to trade short term.
  • The fact that Japanese companies aren’t leading the world in green practices and are reluctant to disclose their activities are the factors that prevent wash from occurring and being detected.
  • While it’s difficult to evaluate ESG investing in short-term-performance, it’s important to pay attention to how management is taking measures to increase corporate value in ESG perspective in particular G.

Intention to Float Porsche AG: A Good Deal for Porsche Automobile Holding SE

By Jesus Rodriguez Aguilar

  • Volkswagen aims for an IPO of Porsche AG (operating company). 25% of preferreds will be placed and 25% of ords sold to Porsche Automobile Holding SE (combined, 25% equity capital).
  • Thought a holding chain, the Pïech and Porsche families will directly control 25% of the votes of Porsche AG and 39.975% indirectly (total of 64.975%), with just a 24.275% economic interest.
  • Porsche Automobile Holding SE will cover c.30% of the cost of its stake through the extraordinary dividend that Volkswagen will pay. It also gets the ords at a friendly price.

Campbell Soup Inc: Online Sales As A Key Driver & Other Factors Driving Growth

By Baptista Research

  • The demand for Campbell’s portfolio of brands continued to be strong in the last quarter and it was able to match the market’s revenue expectations through its result.
  • The company was able to deliver an earnings beat as it enhanced supply chain performance and put into place efficient revenue management to combat inflation.
  • Their Win in Soup approach will remain strong in fiscal 2023 largely due to innovation.

Capri Holdings: Digital Momentum & Other Drivers

By Baptista Research

  • Capri has seen a decent performance across all three of its luxury residences and 2022 has been delivering better results than the management had anticipated.
  • The company delivered an all-around beat with a revenue of $1.36 billion, which exceeded management and market expectations.
  • Fendace combined unique features with classic silhouettes from two renowned Italian luxury brands, Fendi and Versace.

Ulta Beauty: The Beauty& Campaign

By Baptista Research

  • Ulta Beauty performed well in this quarter and delivered an all-around beat.
  • Based on point-of-sale statistics from the NPD Group, all key categories for the quarter exceeded its expectations, and they grew their market share in prestige beauty compared to the previous year.
  • Haircare, their second-largest category, experienced double-digit growth for another quarter due to newness and excellent participation in their semi-annual Gorgeous Hair Event.

Breaking Estimate Short Candidates: Upstart, Cerence, Zillow, Trex

By Eric Fernandez, CFA

  • This model finds companies facing recent sharp cuts in estimates. These shorts can have very disparate characteristics.
  • The key judgement involves whether the negative revisions are temporary or if they are indications of ongoing weakness in the business. 
  • Breaking Estimates stocks often continue to decline after the cuts.  This week we flag:  Upstart, Cerence, Zillow, Trex

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Sep 07
0

Daily Brief ESG: Director Compensation Should Be Changed from Stable Compensation to More Variable Compensation and more

By | Daily Briefs, ESG

In today’s briefing:

  • Director Compensation Should Be Changed from Stable Compensation to More Variable Compensation

Director Compensation Should Be Changed from Stable Compensation to More Variable Compensation

By Aki Matsumoto

  • The reason for high remuneration of foreign directors isn’t only that remuneration is determined based on overseas compensation levels, but also that fixed remuneration for directors in Japan is high.
  • It is hoped that more companies will increase the proportion of variable compensation, and that for shareholders, performance will increase enough to significantly increase variable compensation.
  • In order for directors to fulfill their responsibilities in determining important strategies, the system must be designed to be high-risk and high-return as well as individually disclosed.

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Sep 07
0

Daily Brief Private Markets: Ninja Van: SEA’s Last-Mile Courier with ~100% Regional Coverage and more

By | Daily Briefs, Private Markets

In today’s briefing:

  • Ninja Van: SEA’s Last-Mile Courier with ~100% Regional Coverage
  • Carro: Southeast Asia’s Leading Used Car Marketplace

Ninja Van: SEA’s Last-Mile Courier with ~100% Regional Coverage

By Alec Tseung

  • Ninja Van is a leading Singapore-based logistics company in Southeast Asia with almost 100% last-mile courier coverage of the region. 
  • The company was valued at $1.85bn based on its previous capital raise in September 2021.
  • An investment in the company could offer indirect and broader exposure to Southeast Asia’s e-commerce sector since it counts most of the e-commerce players in the region as its clients.      

Carro: Southeast Asia’s Leading Used Car Marketplace

By Alec Tseung

  • An online used car marketplace in Singapore that offers full-stack services across a customer’s car ownership lifecycle.
  • The company facilitated an annual run-rate GMV of ~S$1 billion (with >2 million MAUs) in 2020 and managed to earn a revenue of c. $465m in FY21.
  • It reached unicorn status in the previous round of fund raise in Jun 2021 and has started preparing for an IPO internally.

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Sep 07
0

Daily Brief Technical Analysis: Dutch TTF Gas and Impact on WTI and DAX and more

By | Daily Briefs, Technical Analysis

In today’s briefing:

  • Dutch TTF Gas and Impact on WTI and DAX

Dutch TTF Gas and Impact on WTI and DAX

By Thomas Schroeder

  • TTF Dutch gas futures are set to rally off of trendline and price support that will ripple into oil and our DAX short theme.
  • Oil saw a lift off the 86 support base on the back of TTF Gas popping higher and prospects of a hard European winter.  
  • DAX pressure building to break the 12,400/500 pivot support that would in turn crack noted MACD support. Short theme working. New low target remains at 11,500.

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Sep 07
0

Daily Brief Credit: Morning Views Asia: Central China Securities and more

By | Credit, Daily Briefs

In today’s briefing:

  • Morning Views Asia: Central China Securities, CIFI Holdings, Fosun International, Sino-Ocean Service

Morning Views Asia: Central China Securities, CIFI Holdings, Fosun International, Sino-Ocean Service

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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Sep 07
0

Daily Brief Thematic (Sector/Industry): India Banks – Better Macro and more

By | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

  • India Banks – Better Macro, Better Micro
  • Asia Gaming: All in on the Philippines as Events Signal Exponential Growth Ahead

India Banks – Better Macro, Better Micro

By Daniel Tabbush

  • New macro data for India suggests a strong economic backdrop
  • Granular corporate data shows improving financial metrics, positive for banks
  • SBIN is an interesting state-bank alternative to ICICI, considering market capitalization

Asia Gaming: All in on the Philippines as Events Signal Exponential Growth Ahead

By Howard J Klein

  • Some see Macau recovery facing a longer than anticipated ramp part of which is beyond the pandemic shutdown of China, but in Beijing’s overall ideological anti-gaming stance.
  • ASEAN gaming is already on the recovery ramp with the Philippines leading the way.
  • Over 50 million overseas Chinese live in ASEAN nations. They have a generally higher gaming proclivity as well as on average, a higher per capita GDP.

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Sep 07
0

Daily Brief Quantitative Analysis: Mirror and more

By | Daily Briefs, Quantitative Analysis

In today’s briefing:

  • Mirror, Mirror on the Wall, Which Is the Fairest Benchmark of Them All?

Mirror, Mirror on the Wall, Which Is the Fairest Benchmark of Them All?

By Nicolas Rabener

  • Evaluating manager performance is difficult as it requires an appropriate benchmark
  • The manager’s benchmark selection is often not objective given conflicts of interests
  • Factor exposure analysis can be used to systematically identify the best benchmark

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Sep 07
0

Daily Brief ECM: JMDC Placement – Lots to like but past Deals Have Been Mixed and It Is Expensive and more

By | Daily Briefs, ECM

In today’s briefing:

  • JMDC Placement – Lots to like but past Deals Have Been Mixed and It Is Expensive
  • Initial Thoughts on the Porsche IPO
  • CALB IPO: The Bull Case
  • Open Edges Technology IPO Valuation Analysis
  • YSB Inc Pre-IPO – The Positives – Evolving Business Model Coupled with Growth.
  • Onewo Space-Tech Pre-IPO – Peer Comparison – Large Scale, Small Margins

JMDC Placement – Lots to like but past Deals Have Been Mixed and It Is Expensive

By Sumeet Singh

  • JMDC Inc (4483 JP) aims to raise around US$235m, US$150m coming via an international offering and the rest via issuing shares to its largest shareholder, Omron Corp (6645 JP) . 
  • The company plans to use the proceeds to repay some of its debt that was taken on earlier to acquire other companies.
  • In this note, we will talk about the placement and run the deal through our ECM framework.

Initial Thoughts on the Porsche IPO

By Douglas Kim

  • Porsche is getting ready for an IPO to be completed by the end of this year. However, the final decision on the IPO is still subject to market conditions.
  • The expected valuation of the Porsche IPO is 60 billion to 85 billion euros ($60 billion to $85 billion).
  • Qatar Investment Authority has already committed to a 4.99% stake in the Porsche IPO. 

CALB IPO: The Bull Case

By Arun George

  • CALB (CALBLZ CH), a leading EV battery manufacturer, is seeking to raise US$2.0 billion through an HKEx IPO, according to press reports.
  • According to Frost & Sullivan, in terms of installed capacity in 2021, CALB ranked seventh globally among EV battery companies with a 3.2% market share.
  • The key elements of the bull case rest on a large and growing market, rising market share, explosive top-line growth and ambitious capacity expansion plans.

Open Edges Technology IPO Valuation Analysis

By Douglas Kim

  • Our valuation analysis suggests an implied target price of 24,813 won per share, representing 38% higher than the high end of the IPO price range of 18,000 won. 
  • Given the solid upside, we have a Positive view of the Open Edges Technology, despite the weak IPO market conditions. 
  • Open Edges Technology is one of the leading companies in Korea that specializes in the semiconductor design asset platforms. 

YSB Inc Pre-IPO – The Positives – Evolving Business Model Coupled with Growth.

By Clarence Chu

  • YSB Inc (YSB HK) is looking to raise about US$500m in its upcoming Hong Kong IPO.  
  • YSB Inc. (YSB) operates a pharmaceutical platform, digitizing the pharmaceutical transaction and service segment.
  • Throughout its history, YSB has been evolving its business model and has been growing its user base rapidly as well, thereby leading to GMV growth and in turn, sales growth.

Onewo Space-Tech Pre-IPO – Peer Comparison – Large Scale, Small Margins

By Sumeet Singh

  • Onewo Space-Tech (ONEWO HK) aims to raise upto US$2bn in its Hong Kong IPO. OST is a property management service provider primarily owned by China Vanke (2202 HK). 
  • As per Frost & Sullivan, amongst the residential community service providers in China, OST ranked first. It also ranked first in the commercial space integrated services market in China.
  • In this note, we undertake a peer comparison with some of its larger listed peers.

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Sep 07
0

Daily Brief Crypto: #35 Who cares about The Merge? and more

By | Crypto, Daily Briefs

In today’s briefing:

  • #35 Who cares about The Merge?

#35 Who cares about The Merge?

By Carbono Insights

  • The current context is messy. Prices of BTC and ETH slumped twice this year (following the Terra and the Celsius/3AC crises) and show no symptoms of long-lasting recovery (yet).
  • Trading volume on top NFT marketplace OpenSea down 99% in USD from May peak, and DeFi is going through an identity crisis after the Tornado Cash case (more on this later), the most notable example of the increasing regulatory pressure coming from a dozen angles.
  • And all of this within a backdrop of global financial crisis and stagnation. Suppose you’re not heavily invested in crypto, financially or intellectually.

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Sep 07
0

Daily Brief Equity Bottom-Up: Kansai Electric | Growing Support for Nuclear Restarts; Bullish and more

By | Daily Briefs, Equity Bottom-Up

In today’s briefing:

  • Kansai Electric | Growing Support for Nuclear Restarts; Bullish
  • IQiyi: Improving Profitability but Headwinds Continue
  • SK Bioscience (302440 KS): Murky Outlook On Weak Vaccine Demand And Flooding Supply
  • ZTO Express (2057 HK/​ZTO US): Quality Speaks for Itself
  • Sirnaomics (2257.HK)-Unverified Technology and Uncertainties Can Lead to Big Swings in Share Price
  • UI: Revenue Rebounds, Target to $375

Kansai Electric | Growing Support for Nuclear Restarts; Bullish

By Mark Chadwick

  • We believe KEPCO is well-positioned within the utility sector to benefit from growing support for nuclear restarts among policy makers and the general public
  • Given its substantial nuclear power generating capacity, KEPCO will likely see best-in-class balance sheet and cash flow-generation over the next several years.
  • This puts KEPCO well ahead of peers in terms of both environmental credentials and attractive shareholder returns.

IQiyi: Improving Profitability but Headwinds Continue

By Shifara Samsudeen, ACMA, CGMA

  • IQIYI Inc (IQ US) reported 2Q2022 earnings last week. Revenue decreased 12.5% YoY to RMB6.66bn (vs consensus RMB6.67bn) and reported an OP of RMB125.8m (vs consensus RMB30.4m).
  • The company also announced a US$500m private placement of convertible notes with PAG (PAG HK)  and the transaction is expected to close in 4Q2022.
  • The company also has entered into a content licensing agreement with Douyin which will likely bring in high-margin business for content distribution segment.

SK Bioscience (302440 KS): Murky Outlook On Weak Vaccine Demand And Flooding Supply

By Tina Banerjee

  • SK Bioscience (302440 KS) received approval for Korea’s first locally-developed COVID-19 vaccine, SKYCovione. The company is seeking European approval and plans to apply for emergency use listing to the WHO.
  • The company is a late entrant in the overcrowded domestic vaccine market. Currently, six vaccines are approved for use in South Korea. Moreover, demand outlook is uncertain beyond 2022.
  • Recently, the company has dropped a multinational phase 3 trial of P2-VP8, trivalent rotavirus vaccine. Among the non-COVID pipeline, P2-VP8 was in the most advanced stage of clinical trial.

ZTO Express (2057 HK/​ZTO US): Quality Speaks for Itself

By Osbert Tang, CFA

  • The Aug China Express Development Index points to further industry recovery; and as the leader with 23% (+2pp YoY) market share, ZTO Express (2057 HK) should ride on the uptrend. 
  • Sustained volume outperformance, upside on pricing and excellent cost control capability are drivers in 2H22. We are also comfortable with its solid financial position. 
  • ZTO Express has above-average earnings quality and enjoys benefits from industry consolidation. Its on par valuation with the industry makes the stock appealing.

Sirnaomics (2257.HK)-Unverified Technology and Uncertainties Can Lead to Big Swings in Share Price

By Xinyao (Criss) Wang

  • The current two mainstream delivery platforms such as LNP delivery platform and GalNAc RNAi platform have been verified and recognized, with products using these platforms successfully launched on the market.
  • Sirnaomics has developed its own differentiated delivery platforms, but the druggability has never been verified in trials, like a blind box. They will not be valuable until they are proven.
  • Sirnaomics has cashflow pressure and is uncertain if it can survive “this winter”. It’s also difficult for Sirnaomics to find suitable valuation anchor in HKEX. Share price may fluctuate largely.

UI: Revenue Rebounds, Target to $375

By Hamed Khorsand

  • Ubiquiti showcased a rebound in its business in the June 2022 quarter with revenue rising by nearly 24 percent from the March 2022 quarter
  • Ubiquiti reported fiscal fourth quarter revenue of $443.1 million compared to our estimate of $387.0 million
  • The increase in revenue during the June quarter suggests demand remains healthy enough to put Ubiquiti back on pace for potentially exceeding $500 million in revenue in a single quarter

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