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Smartkarma Daily Briefs

Daily Brief ECM: Giant Biogene IPO: Strong Growth Prospects Offsets Short-Term Margin Concerns and more

By | Daily Briefs, ECM

In today’s briefing:

  • Giant Biogene IPO: Strong Growth Prospects Offsets Short-Term Margin Concerns
  • Yunsung F&C IPO Preview

Giant Biogene IPO: Strong Growth Prospects Offsets Short-Term Margin Concerns

By Shifara Samsudeen, ACMA, CGMA

  • Giant Biogene Holding (GBH HK) designs, develops and manufactures professional skin treatment products with recombinant collagen as the key bioactive ingredient in China.
  • The company has filed for an IPO on the Hong Kong Stock Exchange and plans to raise proceeds of around HK$500m.
  • We remain positive on Biogene’s growth prospects as it operates in a growing market which should further benefit from regulatory tailwinds.

Yunsung F&C IPO Preview

By Douglas Kim

  • Yunsung F&C is a leading maker of materials mixing equipment that are used in the rechargeable battery production.
  • The IPO price range is from 53,000 won to 62,000 won and offering amount is from 106 billion won to 124 billion won. The book building starts on 26 October. 
  • According to the bankers’ valuation, the expected IPO market cap range is from 423 billion won to 495 billion won. 

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Daily Brief Technical Analysis: SPX Met 3 and more

By | Daily Briefs, Technical Analysis

In today’s briefing:

  • SPX Met 3,700 Sell Zone to Reduce Long Basket/Roll into Shorts

SPX Met 3,700 Sell Zone to Reduce Long Basket/Roll into Shorts

By Thomas Schroeder

  • Call was to buy our long group for a mid-October short covering rally. Lofty CPI means we retest lows (late October). Top today for dip, better sell territory next week.
  • NKY was our top long bet in our long basket (NKY, ASX, Euro Stoxx 50 and SPX) with a call to reduce with ideal sell levels due next week.
  • At SPX 3,700+ we are rolling back into our short group. Ideal low due in late October.

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Daily Brief Event-Driven: Kingston Financial (1031 HK): What Will Chu Choose To Do? and more

By | Daily Briefs, Event-Driven

In today’s briefing:

  • Kingston Financial (1031 HK): What Will Chu Choose To Do?
  • EQD | FXI (FXI US): – Could Chinese Equities Lead the Way Higher? Use Options for Delta
  • Shanghai/​​​​​​​​​​​​​​​​Shenzhen Northbound Connect: Weekly Moves (14 October 2022)
  • Shanghai/​​​​​​​​​​​​​​​​Shenzhen Southbound Connect: Weekly Moves (14 October 2022)

Kingston Financial (1031 HK): What Will Chu Choose To Do?

By David Blennerhassett

  • Hong Kong brokerage Kingston Financial (1031 HK) was suspended this morning pursuant to Hong Kong’s Takeovers Code. 
  • Chu Yuet Wah is the largest shareholder with 74.6% of shares out.
  • Shares are down 98% from the January 2018 peak. A chunky premium may be on the cards if a firm Offer unfolds. 

EQD | FXI (FXI US): – Could Chinese Equities Lead the Way Higher? Use Options for Delta

By Simon Harris

  • 20th National Congress of the Communist Party is due to kick off this week
  • Will economic growth be top of the agenda and is there any scope to adjust the Covid strategy?
  • With many potential growth factors, use derivatives to gain delta exposure

Shanghai/​​​​​​​​​​​​​​​​Shenzhen Northbound Connect: Weekly Moves (14 October 2022)

By David Blennerhassett


Shanghai/​​​​​​​​​​​​​​​​Shenzhen Southbound Connect: Weekly Moves (14 October 2022)

By David Blennerhassett


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Daily Brief Equity Bottom-Up: Intel Vs. TSMC/​​​UMC Long/​​​Short Monitor: Mgmt Call Takeaways and more

By | Daily Briefs, Equity Bottom-Up

In today’s briefing:

  • Intel Vs. TSMC/​​​UMC Long/​​​Short Monitor: Mgmt Call Takeaways, Calculating a Normalized Valuation
  • Ashok Leyland (AL IN) | Some Pricing Discipline, Inventory Levels Remain High
  • Meta Health: Forging a Digital Future for Healthcare
  • Liquidity Risk Short Candidates: Blink Charging, Natera, Axonics, Enviva
  • Seegene (096530 KS): Recovery of Non-COVID Sales to Drive Future Growth
  • What Are the Prospects for a Meta Rebound?
  • GTX: The Macro Adjustment
  • SS&C Technologies Holdings Inc.: Initiation of Coverage – Competitive Positioning

Intel Vs. TSMC/​​​UMC Long/​​​Short Monitor: Mgmt Call Takeaways, Calculating a Normalized Valuation

By Vincent Fernando, CFA

  • TSMC says limited impact from U.S. China restrictions — We crosscheck the comments.
  • TSMC guidance was strong and gives hope for 1H23 industry improvement. Looks cheap on a cycle-adjusted PE.
  • Intel has outperformed TSMC shares despite the recent TSMC rebound.

Ashok Leyland (AL IN) | Some Pricing Discipline, Inventory Levels Remain High

By Pranav Bhavsar

  • Ashok Leyland (AL IN) ‘s expectation of a more rational pricing environment may not materialise. While there has been a moderation in discounts, it may not last long.  
  • Wholesales have been high in anticipation of a good festive season, however, the gap between Wholesale and Retail is showing signs of widening.  
  • Macros are not conducive. Sept PMI hit a 3M low, and August IIP at an 18M low can build a case for cooling volumes ahead. 

Meta Health: Forging a Digital Future for Healthcare

By Geoff Howie

  • Meta Health: Forging a Digital Future for Healthcare As a result, my leadership style is one of servant leadership,” said the Chairman and Chief Executive Officer of SGX-listed Meta Health Ltd.
  • With more than two decades of professional experience in the pharmaceutical and consumer health industries, Ng is well-positioned to oversee Meta Health’s pivot to the digital healthcare space.

Liquidity Risk Short Candidates: Blink Charging, Natera, Axonics, Enviva

By Eric Fernandez, CFA

  • Liquidity shorts can be great short candidates.  The key characteristic is that the company may not be viable, economically, given their cash flows and cash requirements. 
  • Liquidity shorts have built-in catalysts, have moderate to higher betas,  and can have strong down moves if a crisis develops.  They can go bankrupt, pushing the stock price near zero.
  • Today we are flagging Blink Charging., Natera, Axonics, and Enviva.

Seegene (096530 KS): Recovery of Non-COVID Sales to Drive Future Growth

By Tina Banerjee

  • Seegene Inc (096530 KS) reported a 30% y/y growth in revenue from non-COVID products to KRW69.5 billion in H1 2022. Q2 non-COVID product revenue was up 21% compared to Q1.
  • The company expects strong demand for respiratory virus testing in fall and winter as the flu season starts in its key markets of Europe and North America.
  • Seegene stock is trading near its lows, mainly due to muted financial performance. Seegene can be a value pick and long-term play on the non-COVID product recovery.  

What Are the Prospects for a Meta Rebound?

By Aaron Gabin

  • Meta now trades at 14x P/E and 6x fwd EV/EBITDA…valuation inline with Paramount and Warner Brothers Discovery. This is nuts!
  • While the drumbeat of competitive concerns and self inflicted wounds has piled up in the past month, even core Facebook is not in a death spiral of engagement.
  • META is investing in new ad tech and ad formats, and has the ability to cut significant opex from its budget that could yield 10-20% upside to current 2023 consensus.

GTX: The Macro Adjustment

By Hamed Khorsand

  • Continued improvement in automobile inventory levels should benefit Garrett Motion (GTX)
  • GTX has experienced a decline in turbochargers sold over the past year due to supply chain issues causing carmakers to have lumpy ordering rates. 
  • Ahead of the second quarter results, we had highlighted the foreign exchange headwind the weaker Euro could play. The Euro continued to depreciate versus the US Dollar in the third quarter

SS&C Technologies Holdings Inc.: Initiation of Coverage – Competitive Positioning

By Baptista Research

  • This is our first report on SS&C Technologies, a well-known software solutions provider to the financial and healthcare industries.
  • Even while new fund launches and inflows influenced the Alternatives industry, it nevertheless developed well.
  • We initiate coverage on the stock of SS&C Technologies with a ‘Buy’ rating.

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Most Read: TA Chen Stainless Pipe, Socionext, Meihua Holdings Group Co A, Fast Retailing, GLP J-REIT, Sea Ltd, Kingston Financial, Tata Elxsi Ltd, Taiwan Semiconductor (TSMC) and more

By | Daily Briefs, Most Read

In today’s briefing:

  • FTSE TWSE Taiwan Dividend+ Index Rebalance Preview: Market Consultation Results Announced; BIG Trade
  • Socionext (6526 JP): Index Inclusion Timeline
  • SSE180 Index Rebalance Preview: Stock Connect & MSCI/FTSE Eligibility
  • Fast Retailing (9983) | Fantastic Execution at Fantastical Valuation
  • GLP J-REIT Placement – Most of the past Deals Have Done Well, This One Could Be Tricky
  • Sea Ltd – No Bringing Back to Life For Free Fire, Shopee’s Top Line Growth Could Disappear
  • Kingston Financial (1031 HK): What Will Chu Choose To Do?
  • S&P BSE/Sensex Quiddity Leaderboard Dec 22: Adani Names with F&O Question Marks Still in the Race
  • Intel Vs. TSMC/​​​UMC Long/​​​Short Monitor: Mgmt Call Takeaways, Calculating a Normalized Valuation
  • Hong Kong Buybacks Weekly (Oct 14th): Back to 1Y High

FTSE TWSE Taiwan Dividend+ Index Rebalance Preview: Market Consultation Results Announced; BIG Trade

By Brian Freitas

  • The number of FTSE TWSE Taiwan Dividend+ Index constituents will be increased from 30 to 50 in one step at the December rebalance.
  • There are a few other changes to the index methodology, mainly around the cutoff ranks for inclusion/exclusion with a few additional constraints.
  • We forecast 25 adds and 4 deletes to the index with one-way trade over US$2.2bn and big impact on many stocks due to inclusion, exclusion, capping and funding.

Socionext (6526 JP): Index Inclusion Timeline

By Brian Freitas

  • Socionext (6526 JP) traded 15.1% higher than its IPO price on listing day. That gives it a market cap of JPY 141.4bn (US$963m).
  • Socionext (6526 JP) will be added to the TPX INDEX in November and could be added to the MSCI SmallCap Index in February and the FTSE All-Cap Index in June.
  • The close yesterday indicates there could be more buying behind while the TOPIX inclusion in November will be a source of short-term demand for the stock.

SSE180 Index Rebalance Preview: Stock Connect & MSCI/FTSE Eligibility

By Brian Freitas

  • Nearing the end of the review period, we expect there will be 18 changes to the SSE180 Index in December. The first-order impact on the stocks is not large.
  • Stocks that are not currently in Buy/Sell Stock Connect will be added to the list. That makes them eligible for inclusion in the MSCI and FTSE indices in February/March.
  • We see 6 of the potential/close adds being added to the MSCI China Index in February and 8 of the potential/close adds being added to the FTSE All-World/All-Cap in March.

Fast Retailing (9983) | Fantastic Execution at Fantastical Valuation

By Mark Chadwick

  • We were Bearish on Fast Retailing, mainly due to valuation concerns against global peers. That view still stands.
  • We expected cautious guidance reflecting a harsh macro environment. Fast surprised with bullish guidance. That could be a risk.
  • We highlight the key slides from the results presentation and re-iterate our view that Fast should not trade at such a premium to its global peers

GLP J-REIT Placement – Most of the past Deals Have Done Well, This One Could Be Tricky

By Sumeet Singh

  • GLP J-REIT (3281 JP) is looking to raise  around US$220m in its placement to acquire five assets, and increase its stake in a sixth one.
  • We have covered a number of past deals by the company, almost all of which have done well.
  • In this note, we’ll run the deal through our ECM framework and comment on deal dynamics.

Sea Ltd – No Bringing Back to Life For Free Fire, Shopee’s Top Line Growth Could Disappear

By Oshadhi Kumarasiri

  • Garena has introduced nine major updates to “Free Fire” since June last-year but none of them has managed to turn around the game’s declining trend and regain the lost users.
  • With Sea Ltd (SE US) no longer capable of funding Shopee’s growth, we are expecting e-commerce to start losing its top-line growth potential from 4Q22.
  • Even though we are predicting a lot of downside to Sea Ltd over the medium term, an okayish Q3 could see shares bouncing back from the bottom.

Kingston Financial (1031 HK): What Will Chu Choose To Do?

By David Blennerhassett

  • Hong Kong brokerage Kingston Financial (1031 HK) was suspended this morning pursuant to Hong Kong’s Takeovers Code. 
  • Chu Yuet Wah is the largest shareholder with 74.6% of shares out.
  • Shares are down 98% from the January 2018 peak. A chunky premium may be on the cards if a firm Offer unfolds. 

S&P BSE/Sensex Quiddity Leaderboard Dec 22: Adani Names with F&O Question Marks Still in the Race

By Janaghan Jeyakumar, CFA

  • In this insight, we take a look at the names leading the race to become ADDs/DELs for the BSE SENSEX, 100, 200, and 500 Indices in the December 2022 Rebalance.
  • The reference period for the trading data used for the index selection ends on 31st October 2022.
  • At present, I see one change for SENSEX, three changes for BSE 100, and six changes for BSE 200. 

Intel Vs. TSMC/​​​UMC Long/​​​Short Monitor: Mgmt Call Takeaways, Calculating a Normalized Valuation

By Vincent Fernando, CFA

  • TSMC says limited impact from U.S. China restrictions — We crosscheck the comments.
  • TSMC guidance was strong and gives hope for 1H23 industry improvement. Looks cheap on a cycle-adjusted PE.
  • Intel has outperformed TSMC shares despite the recent TSMC rebound.

Hong Kong Buybacks Weekly (Oct 14th): Back to 1Y High

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 14th 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), Wuxi Biologics (2269 HK), Aia (1299 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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Daily Brief Industrials: S&P 500, Mahindra EPC Irrigation and more

By | Daily Briefs, Industrials

In today’s briefing:

  • Bear Market Until Proven Otherwise; Upgrading Industrials to Overweight; Buys Within Industrials
  • Mahindra EPC – A Proxy Play on MIS Opportunity

Bear Market Until Proven Otherwise; Upgrading Industrials to Overweight; Buys Within Industrials

By Joe Jasper

  • In our Sept.27 Compass, with the S&P 500 down 11.5% during the prior two weeks, we discussed our belief that the market indexes could see a bounce/pause pause in selling.
  • The SPX and IWM have paused, and we cannot rule out a bear market rally if the 200-week MA (3590-3600) holds on the SPX, and if $162-163 holds on IWM.
  • Longer-Term, this is still a bear market until the S&P 500 and Russell 2000 can break above their respective 200-day MAs.

Mahindra EPC – A Proxy Play on MIS Opportunity

By Gauri Anand

  • Micro Irrigation firms > reeling under commodity stress > cut in Govt budgets > long wcap cycle
  • Long term outlook, however is robust > revival in spends likely
  • Negative sentiments > low earnings visibility > low valuation offers entry opportunity  

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Daily Brief TMT/Internet: Sea Ltd, Elmo Software, Lionheart Studio, Tata Elxsi Ltd, ByteDance, Kaynes Technology India, BYJU’S, Gartner Inc, Luwjistik and more

By | Daily Briefs, TMT/Internet

In today’s briefing:

  • Sea Ltd – No Bringing Back to Life For Free Fire, Shopee’s Top Line Growth Could Disappear
  • Elmo Software Confirms Takeover Interest from Various Parties
  • ELMO Software (ELO AU): KKR Returns To The Well
  • Lionheart Studio IPO: Still Same Inflated Valuation
  • S&P BSE/Sensex Quiddity Leaderboard Dec 22: Adani Names with F&O Question Marks Still in the Race
  • TikTok Dives Into Southeast Asia With E-Commerce Push
  • Kaynes Technology Pre-IPO – Can’t Put a Finger on the Business
  • Byju’s to Lay off 2,500 Employees, Consolidate Several Units
  • Gartner Inc: Initiation of Coverage – Major Revenue Streams & Other Drivers
  • Shippit Acquires Luwjistik to Ramp up Regional Expansion

Sea Ltd – No Bringing Back to Life For Free Fire, Shopee’s Top Line Growth Could Disappear

By Oshadhi Kumarasiri

  • Garena has introduced nine major updates to “Free Fire” since June last-year but none of them has managed to turn around the game’s declining trend and regain the lost users.
  • With Sea Ltd (SE US) no longer capable of funding Shopee’s growth, we are expecting e-commerce to start losing its top-line growth potential from 4Q22.
  • Even though we are predicting a lot of downside to Sea Ltd over the medium term, an okayish Q3 could see shares bouncing back from the bottom.

Elmo Software Confirms Takeover Interest from Various Parties

By Arun George

  • Elmo Software (ELO AU) confirmed takeover interest from several parties, including Accel-KKR. Elmo previously disclosed on 14 June that it had discussions on a non-binding offer at A$6.10 per share.
  • The previous talks ended because the bidder (Accel-KKR) could not progress to a binding offer due to changing tech valuations. Elmo has materially underperformed ASX SaaS peers since 14 June.
  • The current conditions suggest a higher risk that the talks will fizzle out. Despite today’s 28% pop, the shares remain undemanding compared to peer multiples providing support to the shares. 

ELMO Software (ELO AU): KKR Returns To The Well

By David Blennerhassett

  • Cloud-Based solutions provider Elmo Software (ELO AU) has confirmed it has received multiple expressions of interest from various parties, including Accel-KKR.
  • No agreement has been reached with any parties, no pricing mentioned, nor whether data room access has been afforded.
  • Earlier this year ELMO held discussions with Accel-KKR in regard to a change of control proposal at $6.10/share. That figure is a stretch in this market. 

Lionheart Studio IPO: Still Same Inflated Valuation

By Sanghyun Park

  • Lionheart used the net profit from 3Q last year to 2Q this year. The Odin sales peaked in the third quarter of last year and are on a downward trend.
  • The indicative price band reaches a P/E multiple of 22~32x reasonably projected earnings of ₩140B. NCsoft’s 12M forward PER stands at 14-15x. Krafton is only 12x.
  • It is unclear whether the market will accept this price deception under current conditions. We should refrain from aggressively approaching it without a clear answer to the decline in sales.

S&P BSE/Sensex Quiddity Leaderboard Dec 22: Adani Names with F&O Question Marks Still in the Race

By Janaghan Jeyakumar, CFA

  • In this insight, we take a look at the names leading the race to become ADDs/DELs for the BSE SENSEX, 100, 200, and 500 Indices in the December 2022 Rebalance.
  • The reference period for the trading data used for the index selection ends on 31st October 2022.
  • At present, I see one change for SENSEX, three changes for BSE 100, and six changes for BSE 200. 

TikTok Dives Into Southeast Asia With E-Commerce Push

By Caixin Global

  • ByteDance’s TikTok is cranking up its e-commerce foray into Southeast Asia as the Chinese tech giant pushes to commercialize the popular short video app to create a new revenue stream.
  • During the first half, TikTok launched e-commerce businesses in Thailand, Vietnam, Malaysia, the Philippines and Singapore, expanding its presence to all major markets in the region.
  • TikTok has been operating online shopping services in Indonesia, Southeast Asia’s largest economy, since early 2021.

Kaynes Technology Pre-IPO – Can’t Put a Finger on the Business

By Ethan Aw

  • Kaynes Technology India (7575164Z IN) is looking to raise about US$125m in its upcoming India IPO. 
  • Kaynes Technology (KT) is an end-to-end and IoT solutions enabled integrated electronics manufacturing player, having capabilities across the entire spectrum of electronics system design and manufacturing (ESDM) services. 
  • Profitability accelerated post COVID-19 with margins expanding slightly. However, revenue growth might have been driven by the pandemic and there hasn’t been much operating data for us to work with. 

Byju’s to Lay off 2,500 Employees, Consolidate Several Units

By Tech in Asia

  • Byju’s, the global edtech behemoth based out of India, announced that it is laying off 5% or 2,500 of its total workforce as it restructures to achieve overall profitability by March 2023.

  • The job cuts, which will be across the product, content, media, and technology teams, will be done in phases.
  • The SoftBank-backed company said the move stems from the consolidation of its various K-10 businesses, namely Toppr, Meritnation, TutorVista, Scholar, and HashLearn, into one unit.

Gartner Inc: Initiation of Coverage – Major Revenue Streams & Other Drivers

By Baptista Research

  • This is our first report on Gartner, one of the most well-known companies in the market research and IT advisory domain.
  • The past quarter’s results for Gartner were quite strong, with double-digit growth in adjusted EPS, revenue, and contract value and the company delivered an all-around beat.
  • The research revenue of the company has been consistently growing and the retention rate has been quite strong.

Shippit Acquires Luwjistik to Ramp up Regional Expansion

By e27

  • Australian logistics tech platform Shippit announced that it had acquired its Southeast Asian (SEA) counterpart Luwjistik.
  • This deal is Shippit’s second acquisition in 2022, after announcing the acquisition of leading Australian last mile technology firm Premonition in March.
  • Shippit has been operating in SEA since 2020. Through the acquisition, it plans to double down on growth in the region, including in its enterprise customers, by leveraging Luwjistik’s technology, local relationships and expertise.

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Daily Brief Industrials: S&P 500, Mahindra EPC Irrigation and more

By | Daily Briefs, Industrials

In today’s briefing:

  • Bear Market Until Proven Otherwise; Upgrading Industrials to Overweight; Buys Within Industrials
  • Mahindra EPC – A Proxy Play on MIS Opportunity

Bear Market Until Proven Otherwise; Upgrading Industrials to Overweight; Buys Within Industrials

By Joe Jasper

  • In our Sept.27 Compass, with the S&P 500 down 11.5% during the prior two weeks, we discussed our belief that the market indexes could see a bounce/pause pause in selling.
  • The SPX and IWM have paused, and we cannot rule out a bear market rally if the 200-week MA (3590-3600) holds on the SPX, and if $162-163 holds on IWM.
  • Longer-Term, this is still a bear market until the S&P 500 and Russell 2000 can break above their respective 200-day MAs.

Mahindra EPC – A Proxy Play on MIS Opportunity

By Gauri Anand

  • Micro Irrigation firms > reeling under commodity stress > cut in Govt budgets > long wcap cycle
  • Long term outlook, however is robust > revival in spends likely
  • Negative sentiments > low earnings visibility > low valuation offers entry opportunity  

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Daily Brief Consumer: Fast Retailing, Melco International Development, Suzuki Motor, The Keepers Holdings, Inc., Euromoney Institutional Invest, Alibaba Group, CJ ENM, Tokyo Stock Exchange Tokyo Price Index Topix, Piktina and more

By | Consumer, Daily Briefs

In today’s briefing:

  • Fast Retailing (9983) | Fantastic Execution at Fantastical Valuation
  • StubWorld: Macau Plays Need To Up Non-Gaming Game
  • Suzuki (7269) | Small Cars at Tiny Valuations
  • Keepers Holdings: Global Market Weakness Creates Opportunity
  • Becketts/Euromoney Institutional Investor: Spread
  • Alibaba, JD.Com, Longfor Group, and Country Garden
  • Korea Consumer Discretionary: A Pair Trade (Long CJ ENM and Short HYBE)
  • Review of TSE Market Reclassification Requires a Big Cleanup, Not a Small Cleanup as It Should Be
  • Vietnamese Fashion Recommerce Firm Raises US$1 Million

Fast Retailing (9983) | Fantastic Execution at Fantastical Valuation

By Mark Chadwick

  • We were Bearish on Fast Retailing, mainly due to valuation concerns against global peers. That view still stands.
  • We expected cautious guidance reflecting a harsh macro environment. Fast surprised with bullish guidance. That could be a risk.
  • We highlight the key slides from the results presentation and re-iterate our view that Fast should not trade at such a premium to its global peers

StubWorld: Macau Plays Need To Up Non-Gaming Game

By David Blennerhassett

  • Reportedly Macau authorities are not satisfied with some concessionaire proposals from gaming firms and require them to increase investment into non-gaming facilities under a concession retendering process
  • Preceding my comments on some of the gaming plays such as Melco International Development (200 HK) and Genting Bhd (GENT MK) are the current setup/unwind tables for Asia-Pacific Holdcos. 
  • These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation >20%.

Suzuki (7269) | Small Cars at Tiny Valuations

By Mark Chadwick

  • We are bullish on the share price of Suzuki given its exposure to secular growth in India
  • The ex-Maruti business is recovering as supply chain constraints ease.
  • We see at least 25% upside to the share price and believe the non-Maruti business is significantly undervalued

Keepers Holdings: Global Market Weakness Creates Opportunity

By Sameer Taneja

  • The Keepers Holdings, Inc. (KEEPR PM) correction in share price by 23% from the peak provides an opportunity with the stock trading at 7.4x/6.1x PE FY22e/23e (excluding Bodegas W&H earnings).
  • The company will release its Q3 2022 earnings in early November, and we expect revenue and earnings growth to be >25% YoY. 
  • We also eagerly await more color on accretion to earnings from a 50% stake in Bodegas W&H post which we expect the stock to be even cheaper.

Becketts/Euromoney Institutional Investor: Spread

By Jesus Rodriguez Aguilar

  • The scheme is just pending court sanction and the remaining regulatory approval, with closing reasonably expected to happen in Q4 2022.
  • I believe Euromoney is going cheap, but the current debt markets make it harder to raise money/counterbid. Euromoney is trading at 16.3x EV/Fwd EBIT vs. RELX at 17.3x.
  • The shares are liquid. Gross spread is 1.3%, with estimated annual return of 7.9% assuming settlement by 15 December. Long.

Alibaba, JD.Com, Longfor Group, and Country Garden

By Untying The Gordian Knot

  • Country Garden 2031 USD bond closed at 17.00. It is pricing a near-inevitable default.
  • Longfor Group-rated BBB- maturing in 2032, is trading at 54.25, yielding 12.6%.
  • The bonds are down 50% since their peak near 109 in February 2021. it is getting into a crisis of confidence mode.

Korea Consumer Discretionary: A Pair Trade (Long CJ ENM and Short HYBE)

By Douglas Kim

  • In this insight, we discuss a pair trade of going long on CJ ENM and going short on HYBE. 
  • CJ ENM’s valuations are much more attractive and offer higher value as compared to HYBE. CJ ENM shares are trading at EV/EBITDA of 2.7x versus 10.9x for HYBE in 2023. 
  • The Korean government is likely to require BTS members to conscript for military service which is likely to lead to sharp decline in earnings estimates for HYBE.

Review of TSE Market Reclassification Requires a Big Cleanup, Not a Small Cleanup as It Should Be

By Aki Matsumoto

  • Prime market was conceived as a market for institutional investors to invest in, but the problem is that little has changed in substance as a result of the market reclassification.
  • The current discussion hasn’t raised any debate on raising the market cap-threshold for prime market. To keep up appearances as a global market, TSE will proceed with disclosure in English.
  • TSE will probably set 5-year exit deadline for companies that don’t meet the listing criteria  within the next year, and will prepare a market for those companies.

Vietnamese Fashion Recommerce Firm Raises US$1 Million

By Tech in Asia

  • Piktina, an online marketplace for secondhand clothes in Vietnam, has raised US$1 million in seed funding
  • Founded in June, Piktina connects buyers and sellers of secondhand goods, targeting both individuals who want to free up their closets and businesses that specialize in pre-owned fashion items.

  • The recommerce platform was established by Phuong Nguyen, the former CEO of Vietnamese ride-hailing firm Be Group, and Huyen Trinh, also a former Be Group executive.


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Daily Brief Financials: Five Star Business Finance, AirWallex, China SCE and more

By | Daily Briefs, Financials

In today’s briefing:

  • Five-Star Business Pre-IPO – The Negatives – NPLs Low but Delayed Payments Aren’t
  • Global Payments Firm Airwallex Closes Series E Round with US$100M New Investment
  • Morning Views Asia: AAC Technologies Holdings, Alam Sutera Realty, China SCE, CIFI Holdings

Five-Star Business Pre-IPO – The Negatives – NPLs Low but Delayed Payments Aren’t

By Sumeet Singh

  • Five-Star Business Finance (0958461D IN)  is looking to raise around US$300m in its upcoming India IPO. The deal will be run by ICICI Securities, Edelweiss, Kotak, and Nomura.
  • Five-Star Business is a non-banking financial company (NBFC-ND-SI) that provides secured business loans to micro-entrepreneurs and self-employed individuals.
  • In this note, we talk about the not so positive aspects of the deal.

Global Payments Firm Airwallex Closes Series E Round with US$100M New Investment

By e27

  • Global payments and banking platform Airwallex has closed its Series E extension round with US$100 million in funding.
  • Founded in Melbourne in 2015, Airwallex provides integrated solutions for business and personal cross-border transactions.
  • It facilitates international money transfers through payment collection, foreign exchange, remittance and security settlement.

Morning Views Asia: AAC Technologies Holdings, Alam Sutera Realty, China SCE, CIFI Holdings

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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Sign Up for Free

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