Smartkarma Daily Briefs

Bloomberg is reporting Genting Singapore (GENS SP) has been attracting suitors, including MGM Resorts International (MGM US).
With Macau all-but emulating a Shanghai-style lockdown, including the recent shuttering of all casinos, large global casino operators will be looking to diversify their revenue base.
But with Singapore potentially emerging as Asia’s go-to gaming destination going forward, it’s unlikely the Lim family will exit their Genting flagship.

Genting Singapore in the Crosshairs of Potential Suitors

By Arun George

Bloomberg reported MGM Resorts International (MGM US) recently approached Genting Singapore (GENS SP)’s controlling shareholder, Genting Bhd (GENT MK), to express an interest in a deal.
While the discussions with MGM Resorts have fizzled out, other potential suitors are reportedly interested. Shares are in a trading halt pending a response to an SGX query.
Genting Singapore trades at a discount to peers. Precedent transactions suggest a potential privatisation price of at least S$1.00 per share, a 33% premium to the last close.

Smartkarma Webinar | Trade Ideas in ASEAN

By Smartkarma Research

For our next Webinar, we are delighted to welcome back Analyst Henry Soediarko, who will go through his latest stock picks in the ASEAN region, and offer his outlook for 2H 2022.

The webinar will be hosted on Wednesday, 20 July 2022, 17:00 SGT/HKT.

Register for the Webinar here

Henry Soediarko is a Long & Short Investment Ideas generator for Asian Equities with 10 years of experience in a Hedge fund focused on bottom-up ideas, searching out mispriced ideas and misunderstood investment theses. He provides on-the-ground insights in various Asian markets with a sway towards ASEAN.

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Jul 16

Daily Brief South Korea: T’Way Air, Hyundai Motor, SOCAR, WCP and more

By Smartkarma Daily Briefs | Daily Briefs, South Korea

In today’s briefing:

WISE Theme Indexes Rebalancing: Conformity of Passive Flow to Price Return
Hyundai Motor’s Ioniq 6 – To Take Away More Market Share From Tesla Model 3 Sedan?
SOCAR Revised Prospectus: Critical Issues Still Not Addressed
WCP IPO: Valuation Insights

WISE Theme Indexes Rebalancing: Conformity of Passive Flow to Price Return

By Sanghyun Park

The ETF operator (TIGER)’s index tracking conformity was high enough to create trading opportunities aimed at the rebalancing flow.
Flow/Price directions were mostly synched with only a few exceptions. Of particular importance is that the price impact was substantial compared to the passive flow size.
The yield of the tradable names suitable for a basket based on the projected passive impact size was 4.51%.

Hyundai Motor’s Ioniq 6 – To Take Away More Market Share From Tesla Model 3 Sedan?

By Douglas Kim

Hyundai Motor (005380 KS) launched its long-awaited Ioniq 6 on 14 July. This is the first EV sedan by Hyundai Motor.
Ioniq 6 could be a big winner for Hyundai Motor. Among all the features of Ioniq 6, the driving range is the biggest improvement versus Ioniq 5.
The combination of attractive price, sleek design, and higher driving range is likely to result in a strong demand for Ioniq 6.

SOCAR Revised Prospectus: Critical Issues Still Not Addressed

By Sanghyun Park

There must be a rationale for car sharing to receive a higher valuation than the traditional rental car business. For this, profit per vehicle must be provided, not sales.
Also, whether SOCAR can justify its valuation built on the relatively high valuation premiums granted to ccOS and FMS companies is still questionable.
Concerning fund flow, it is positive that SOCAR can aim for LG Energy’s six-month lockup release. But it is unclear how much flow will be left for SOCAR after WCP.

WCP IPO: Valuation Insights

By Arun George

WCP (WCP KS), a lithium-ion batteries separator company, is planning to launch a KRW900 billion (US$692 million) IPO in August.
In WCP IPO: Hooked on Lithium we noted that WCP has attractive fundamentals due to the favourable demand/supply balance, technology, strong revenue growth and improving margins.
In this note, we look at the syndicate’s valuation methodology. Our valuation analysis suggests that the IPO price range is unattractive and we would pass on the IPO.

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Jul 16

Daily Brief China: Aier Eye Hospital Group, Agile Property Holdings, Geely Auto, Vedanta Resources and more

By Smartkarma Daily Briefs | China, Daily Briefs

In today’s briefing:

Shanghai/Shenzhen Northbound Connect: Weekly Moves (15 July 2022)
Chinese Property Weekly – 15 July 2022 – Lucror Analytics
Chinese Property Weekly – 15 July 2022 – Lucror Analytics
Shanghai/Shenzhen Southbound Connect: Weekly Moves (15 July 2022)
Weekly Wrap – 15 Jul 2022

Shanghai/Shenzhen Northbound Connect: Weekly Moves (15 July 2022)

Inside is a recap of movements in the last week relating to the Hong Kong Stock Exchange -Shanghai and Shenzhen Northbound Connect facilities, broken down by company and industry.
Overall, net outflow over the past week was ~US$1.28bn, split between Shanghai (-US$0.85bn) and Shenzhen (-US$0.43bn)
The largest inflows were into Aier Eye Hospital (300015 CH) and Shenzhen Mindray (300760 CH). The largest outflows were in China Merchants Bank (600036 CH) and Sungrow Power (300274 CH).

Chinese Property Weekly – 15 July 2022 – Lucror Analytics

The Chinese Property Weekly focuses on providing updates in the Chinese real-estate sector, including recent regulatory and company developments, top and bottom performers, rating actions, as well as a list of bond maturities in the next 30 days.

Chinese Property Weekly – 15 July 2022 – Lucror Analytics

Shanghai/Shenzhen Southbound Connect: Weekly Moves (15 July 2022)

Inside is a recap of movements in the last week relating to the Shanghai and Shenzhen-Hong Kong Stock Connect facilities, broken down by company and industry.
Overall, the net outflow over the past week was ~US$0.56bn, split (-US$0.44bn) for Shanghai and (-US$0.12bn) for Shenzhen.
The largest inflows were into Geely Auto (175 HK) and Hang Seng H Share Index ETF (2828 HK). The largest outflow was in Meituan (3690 HK) and CNOOC (883 HK).

Weekly Wrap – 15 Jul 2022

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:

and more…

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Jul 16

Daily Brief Japan: Baycurrent Consulting, Tokyo Stock Exchange Tokyo Price Index Topix and more

By Smartkarma Daily Briefs | Daily Briefs, Japan

In today’s briefing:

BayCurrent (6532) | Jumping in Ahead of Earnings
No Causality Between Shareholder Proposal Withdrawal and Share Price, but Dialogue Is a Good Thing

BayCurrent (6532) | Jumping in Ahead of Earnings

By Mark Chadwick

The company will report Q1 earnings today. We think they will beat expectations
The stock has been a poor performer so far this year, despite profitable growth
BayCurrent is THE key beneficiary of Digital Transformation in Japan

No Causality Between Shareholder Proposal Withdrawal and Share Price, but Dialogue Is a Good Thing

By Aki Matsumoto

I would like to discuss about the Nikkei article, “Shareholder Proposal ‘Withdrawn,’ Share Price Firm; Dialogue Leads to Compromise.”
Regarding “share prices of companies whose shareholder proposals are withdrawn are firm during sharp sell-off,” there seems little proof of causal relationship between withdrawal of shareholder proposals and stock performance.
Although Japanese corporate culture has tradition of doing everything without making a fuss, Japanese managers need to have serious discussion with shareholders on the balance between growth and shareholder returns.

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Jul 16

Daily Brief Indonesia: Adi Sarana Armada, Vedanta Resources and more

By Smartkarma Daily Briefs | Daily Briefs, Indonesia

In today’s briefing:

Adi Sarana Armada (ASSA IJ) – Building on Pillars
Weekly Wrap – 15 Jul 2022

Adi Sarana Armada (ASSA IJ) – Building on Pillars

By Angus Mackintosh

Adi Sarana Armada (ASSA IJ) continues to build on its three pillars of growth across transport, used car sales, and logistics including its leading last-mile delivery service under Anteraja.
The company’s market-leading auto leasing business provides stable revenue and a source of used cars for the auction and online used car business under Caroline.
Last-Mile delivery player Anteraja is already the largest revenue contributor and increasing profit driver, with significant upside through automation and scale. Valuations attractive after recent correction at 8.3x FY2022E EV/EBITDA.

Weekly Wrap – 15 Jul 2022

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:

and more…

Before it’s here, it’s on Smartkarma

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

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✓ Company Data and News
✓ Events & Webinars

Jul 16

Daily Brief United States: Celsius Network and more

By Smartkarma Daily Briefs | Daily Briefs, United States

In today’s briefing:

A Quick Review of the Celsius Bankruptcy Filing

A Quick Review of the Celsius Bankruptcy Filing

By Rose Choy

Celsius filed for bankruptcy on July 14 and we parse through the filings to shed some light on the lender and its activities.
Quick analysis shows that unsecured creditors can get back 60 cents on the dollar.
The May “Bank Run” post LUNA crash, asset-liability mismatch and poor market conditions ultimately led the Company to file for bankruptcy.

Before it’s here, it’s on Smartkarma

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

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Jul 16

Daily Brief India: Tata Motors Ltd, Vedanta Resources, Alkem Laboratories Ltd and more

By Smartkarma Daily Briefs | Daily Briefs, India

In today’s briefing:

India EV Sector: Electric Cars in Demand, but Limited Options. Tata’s Nexon EV Leads
Weekly Wrap – 15 Jul 2022
Alkem Laboratories Ltd (ALKEM IN): Strong India Business to Drive Future Performance

India EV Sector: Electric Cars in Demand, but Limited Options. Tata’s Nexon EV Leads

By Devi Subhakesan

Tatas are scripting India’s early journey in electric cars – Tata Motors Ltd (TTMT IN) accounted for 87% of the 8077 electric cars sold in Q1FY23 (1605 units in Q1FY22).
The rapid roll-out of charging infrastructure across the country by Tata Power (TPWR IN) and the success of Tata’s electric car (compact SUV). Tata Nexon EV, are key factors.
Demand and infrastructure for electric cars seem to be in place but market growth is restricted by a lack of choice/adequate supply in the popular price range (<USD 20K).

Weekly Wrap – 15 Jul 2022

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:

and more…

Alkem Laboratories Ltd (ALKEM IN): Strong India Business to Drive Future Performance

By Tina Banerjee

Alkem Laboratories Ltd (ALKEM IN) earns 71% of total revenue from domestic business, which is the most important growth lever of the company. Domestic business revenue grew 29% in FY22.
The company dominates the anti-infective segment, through its mega brands, with a market share of 12.9%. In the chronic segment, Alkem is growing fast to emerge as a significant player.
Regular new product launches, including biosimilars, should continue to contribute to Alkem’s growth and fill portfolio gaps. Entry into new therapies would also be an important growth engine, going forward.

Before it’s here, it’s on Smartkarma

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Jul 16

Daily Brief Energy/Materials: Vedanta Resources, West African Resources and more

By Smartkarma Daily Briefs | Daily Briefs, Energy & Materials Sector

In today’s briefing:

Weekly Wrap – 15 Jul 2022
ASX200 Index Rebalance: West African Resources (WAF) In; Uniti Group (UWL) Out

Weekly Wrap – 15 Jul 2022

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:

and more…

ASX200 Index Rebalance: West African Resources (WAF) In; Uniti Group (UWL) Out

West African Resources (WAF AU) will replace Uniti Group Ltd (UWL AU) in the S&P/ASX 200 (AS51 INDEX) at the close of trading on 21 July.
We estimate passive trackers will need to sell 45.3m shares (A$226m; 10.2 days of ADV) on Uniti Group Ltd (UWL AU) at the close on 21 July.
With over 10 days of ADV to buy from passive trackers and only 4 days to implementation, West African Resources (WAF AU) could outperform its peers till 21 July.

Before it’s here, it’s on Smartkarma

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Jul 16

Most Read: West African Resources, Hong Kong Hang Seng Index, HDFC Bank, Genting Singapore, Sungeel Hitech, Healthcare Trust of America, WCP, T’Way Air, Aier Eye Hospital Group and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

S&P/ASX Index Rebalance Preview (Sep): Plenty of High Impact Changes
HFCAA, AHFCAA, China ADRs & FTSE Index Treatment: Speeding Up The Process & Implications
HDFC/HDFC Bank Mega Merger: Foreign Selling Leads to Higher Foreign Room
Punters Take A Gamble on Genting Singapore
Sungeel HiTech IPO – The Highest Ever Bookbuilding Demand Ratio for a Korean IPO
MergerTalk: Healthcare Realty/ HealthCare Trust – Short-Term Risk-Arb Opportunity
WCP IPO – The Negatives – Patent, Going Concern, Customer Concentration
WISE Theme Indexes Rebalancing: Conformity of Passive Flow to Price Return
Genting Singapore in the Crosshairs of Potential Suitors
Shanghai/Shenzhen Northbound Connect: Weekly Moves (15 July 2022)

S&P/ASX Index Rebalance Preview (Sep): Plenty of High Impact Changes

There could be one change to the S&P/ASX 200 (AS51 INDEX) in July following the privatisation of Uniti Group Ltd (UWL AU).
Then there will be a whole bunch of changes to the S&P/ASX 100 Index, S&P/ASX 200 (AS51 INDEX) and S&P/ASX 300 Index in September as part of the regular rebalance.
There is large short interest on a couple of the potential adds and a lot of the potential deletes. That will drive stock price moves closer to implementation.

HFCAA, AHFCAA, China ADRs & FTSE Index Treatment: Speeding Up The Process & Implications

The Holding Foreign Companies Accountable Act (HFCAA) could result in China ADRs being delisted in 2024. The Accelerated HFCAA, if passed, will bring that date ahead to 2023.
FTSE has announced its implementation plan to migrate the China ADRs in its indices to the local listings using an accelerated schedule.
Expect a lot more secondary listings/ dual primary listing in Hong Kong over the next few months. The increase free float market cap could keep a lid on prices.

HDFC/HDFC Bank Mega Merger: Foreign Selling Leads to Higher Foreign Room

Foreign selling has continued on HDFC Limited (HDFC IN) and HDFC Bank (HDFCB IN) and foreign room on the proforma merged entity is 17.23%.
Higher than 15% foreign room will require passive MSCI trackers to buy 209m shares (US$4.05bn) of HDFC Bank (HDFCB IN) at the time of merger implementation.
If foreign selling continues and foreign room on the merged entity exceeds 20%, there will be buying from passive FTSE trackers as well.

Punters Take A Gamble on Genting Singapore

Bloomberg is reporting Genting Singapore (GENS SP) has been attracting suitors, including MGM Resorts International (MGM US).
With Macau all-but emulating a Shanghai-style lockdown, including the recent shuttering of all casinos, large global casino operators will be looking to diversify their revenue base.
But with Singapore potentially emerging as Asia’s go-to gaming destination going forward, it’s unlikely the Lim family will exit their Genting flagship.

Sungeel HiTech IPO – The Highest Ever Bookbuilding Demand Ratio for a Korean IPO

By Douglas Kim

Sungeel Hitech announced its IPO book building results. The IPO price has been determined at 50,000 won, higher than the high end of IPO price of 47,500 won.
The demand ratio for Sungeel Hitech IPO was 2,269.7 to 1 which broke all time records in terms of highest ever demand ratio for a Korean IPO.
Our base case valuation is implied price per won of 70,992 won per share, which represents 42% higher than the IPO price of 50,000 won.

MergerTalk: Healthcare Realty/ HealthCare Trust – Short-Term Risk-Arb Opportunity

By Robert Sassoon

The Healthcare Realty Trust (HR US) / Healthcare Trust Of America (HTA US) transaction is heading towards climax with the critical HR and HTA shareholder votes set for July 15
The odds are that activist investor and HR shareholder will not succeed in derailing the deal which it opposes from closing on July 20
Notwithstanding the significant spread compression seen in recent weeks, there remains an attractive short-term opportunity for the arbs

WCP IPO – The Negatives – Patent, Going Concern, Customer Concentration

By Sumeet Singh

WCP aims to raise around US$690m via selling a mix of primary and secondary shares in its Korean IPO.
WCP designs, manufactures, and sells separators, which are one of the four core materials for secondary Lithium-ion batteries
In this note, we will talk about the not-so-positive aspects of the deal.

WISE Theme Indexes Rebalancing: Conformity of Passive Flow to Price Return

By Sanghyun Park

The ETF operator (TIGER)’s index tracking conformity was high enough to create trading opportunities aimed at the rebalancing flow.
Flow/Price directions were mostly synched with only a few exceptions. Of particular importance is that the price impact was substantial compared to the passive flow size.
The yield of the tradable names suitable for a basket based on the projected passive impact size was 4.51%.

Genting Singapore in the Crosshairs of Potential Suitors

By Arun George

Bloomberg reported MGM Resorts International (MGM US) recently approached Genting Singapore (GENS SP)’s controlling shareholder, Genting Bhd (GENT MK), to express an interest in a deal.
While the discussions with MGM Resorts have fizzled out, other potential suitors are reportedly interested. Shares are in a trading halt pending a response to an SGX query.
Genting Singapore trades at a discount to peers. Precedent transactions suggest a potential privatisation price of at least S$1.00 per share, a 33% premium to the last close.

Shanghai/Shenzhen Northbound Connect: Weekly Moves (15 July 2022)