All Posts By

Smartkarma Daily Briefs

Jan 31
0

Daily Brief Indonesia: Bukalapak and more

By | Daily Briefs, Indonesia

In today’s briefing:

  • Bukalapak (BUKA IJ) – Thriving Within a Virtuous Circle

Bukalapak (BUKA IJ) – Thriving Within a Virtuous Circle

By Angus Mackintosh

  • Bukalapak (BUKA IJ)  is one of Indonesia’s most differentiated digital economy players plus it is unusual in that it has one of the longest runways amongst peers at 15 years. 
  • Despite operating a marketplace model, the platform uses this to generate traffic for its other businesses including its O2O Mitra Bukalapak business and its growing online speciality store business. 
  • Bukalapak (BUKA IJ) also has strong ESG credentials, the most obvious of which is in the empowerment of MSMEs through its Mitra business. It is also making headway toward profitability.

💡 Before it’s here, it’s on Smartkarma

Sign Up for Free

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

  • ✓ Unlimited Research Summaries
  • ✓ Personalised Alerts
  • ✓ Custom Watchlists
  • ✓ Company Data and News
  • ✓ Events & Webinars
Sign Up for Free
Jan 31
0

Daily Brief India: Adani Enterprises, Concord Biotech Ltd, Gujarat Ambuja Exports, Vedanta Resources and more

By | Daily Briefs, India

In today’s briefing:

  • Adani Ent FPO – Early Demand Muted, Adani & Hindenburg Trade Barbs Again, But Not a Good Look
  • Smartkarma Webinar | This Is Not A Webinar On Adani
  • Concord Biotech Pre-IPO – Sales Have Been Growing but Watch Out for Its High Concentration Risk
  • Gujarat Ambuja Exports Ltd (GAEL): Forensic Analysis
  • Vedanta Resources – Earnings Flash – Q3 FY 2022-23 Results (Vedanta Ltd) – Lucror Analytics

Adani Ent FPO – Early Demand Muted, Adani & Hindenburg Trade Barbs Again, But Not a Good Look

By Travis Lundy

  • The Adani Enterprises (ADE IN) FPO saw VERY muted demand (realtime available on NSE+BSE websites) on Day 1 Friday as the share price plummeted through the bottom of the range.
  • The Adani Group responded to Hindenburg late Sunday with a 400-page rebuttal, cloaked in nationalistic terms. Hindenburg responded saying the company failed to answer 62 of 88 questions.
  • This is not going away. They could lower the FPO price, or just pull the FPO. That won’t materially change the significant over-valuation of many Adani Group listco share prices.

Smartkarma Webinar | This Is Not A Webinar On Adani

By Smartkarma Research

In the next installment of our Webinar Wednesdays, we go live with Smartkarma Insight Provider, Travis Lundy as he gives us a quick rundown about what is the current situation that is happening with Adani Enterprises and where they are headed from this point on.

The webinar will be hosted on Wednesday, 1 February 2023, 17:00 SGT/HKT.

Travis Lundy has 20+ years of experience in Asia doing alternative strategies (i.e. non-delta1 non long-only) in fixed income, equity derivatives, and activist/catalyst/event-driven and long-short equity strategies, with most of that time spent managing money.

Concord Biotech Pre-IPO – Sales Have Been Growing but Watch Out for Its High Concentration Risk

By Clarence Chu

  • Concord Biotech Ltd (658823Z IN) is looking to raise around US$250m in its upcoming India IPO.
  • Concord Biotech (Concord) is an India-based biopharma firm, which develops and manufactures fermentation-based active pharmaceutical ingredients (APIs).
  • As per F&S, it was one of the leading global developers and manufacturers of select fermentation-based APIs across immunosuppressants and oncology in terms of market share, based on FY21 volume.

Gujarat Ambuja Exports Ltd (GAEL): Forensic Analysis

By Nitin Mangal

  • Gujarat Ambuja Exports (GAEX IN) is an Agro Processing conglomerate having a diverse product profile across oil seeds, edible oil refining, maize and starch, cotton yarn, wheat processing, etc. 
  • Our forensics primarily include the takeaways on MACPPL acquisition, its true rationale, accounting impact on the balance sheet and few disclosure errs.
  • Other major takeaway relates to capex story and grey areas relating to the capacity size and timely completion, especially for its marquee plant in Malda.

Vedanta Resources – Earnings Flash – Q3 FY 2022-23 Results (Vedanta Ltd) – Lucror Analytics

By Trung Nguyen

Vedanta Ltd’s (VEDL) Q3/22-23 results were weaker than expected, with thin profitability at the aluminium segment due to higher energy and commodity costs. However, we note positively the sale of Zinc International to Hindustan Zinc​ (HZL) and the fourth interim dividend (USD 570 mn). The financial risk metrics remain modest. The key risk remains the weak debt maturity profile, with large maturities in FY 2023-24.

Vedanta as a group has demonstrated a strong willingness to repay debt, and the capacity to do so by upstreaming cash as quickly as possible. In addition, we note the group’s creative methods to upstream cash efficiently, such as: [1] the sale of Zinc International to HZL; and [2] the merger between Cairn India and VEDL in 2017, when oil prices were low, with the deal partly funded by preference shares to Cairn India’s minority shareholders. We believe that the huge dividends by VEDL in FY 2022-23 (USD 3.7 bn) are the highest possible and will likely decline subsequently, given the correction in commodity prices. Still, this could offer comfort to lenders as it would support VRL’s refinancing needs (i.e. gap between the maturing debt and cash inflows).

💡 Before it’s here, it’s on Smartkarma

Sign Up for Free

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

  • ✓ Unlimited Research Summaries
  • ✓ Personalised Alerts
  • ✓ Custom Watchlists
  • ✓ Company Data and News
  • ✓ Events & Webinars
Sign Up for Free
Jan 31
0

Daily Brief China: Tencent Music Entertainment Group, Qingdao Haier Biomedical, Tencent, Greatview Aseptic Packaging, Evergrande, XPeng, Shanghai MicroPort MedBot Group, Alibaba Group, Seazen (Formerly Future Land), Hong Kong Hang Seng Index and more

By | China, Daily Briefs

In today’s briefing:

  • Quiddity Flow Expectations HSTECH Mar 23: Two Index Changes Possible
  • STAR50 Index Rebalance Preview: 5 Changes Forecast as Review Period Ends
  • Tencent (700 HK): Risen 100% in Three Months, But Still 21%~44% Upside
  • Greatview Aseptic (468 HK): Xinjufeng Technology Acquires Jardine Matheson’s Stake
  • Evergrande : Not Legit
  • Xpeng: Accelerated Model Launch Campaign May Surprise
  • Shanghai MicroPort MedBot Group (2252.HK) – Recognize the Reality but Don’t Give up Hope
  • Aequitas ASEAN Placements Bookrunner Performance (2019-2022)
  • Morning Views Asia:
  • China’s Green Loan Market: Fifty Shades of Green

Quiddity Flow Expectations HSTECH Mar 23: Two Index Changes Possible

By Janaghan Jeyakumar, CFA

  • In this insight, we take a look at the potential index changes and the resultant capping flows for the Hang Seng Tech Index (HSTECH INDEX) in March 2023.
  • According to our estimation, there could be two changes for the HSTECH in March 2023 and there could be one-way index flows of US$365mn.
  • The final index changes along with indicative capping and index weights could be published in Mid/Late-February 2023 and implemented in early-March 2023.

STAR50 Index Rebalance Preview: 5 Changes Forecast as Review Period Ends

By Brian Freitas

  • The review period for the March rebalance ends today. We forecast 2 changes using a 12-month minimum listing history, and 5 changes using a 6-month minimum listing history.
  • We expect the index committee to continue using a 6-month minimum listing history. The impact on the potential deletes is a lot higher than the impact on the potential adds.
  • With 5 changes to the index, estimated one-way turnover is 5.1% resulting in a one-way trade of CNY 4,549m. There is a reasonably large reverse funding trade.

Tencent (700 HK): Risen 100% in Three Months, But Still 21%~44% Upside

By Ming Lu

  • We believe total revenue growth rate will accelerate from 4Q22 and grow by 9% in 2023.
  • We believe the operating margin will be stable from 4Q22 to 2Q23, but the margin will climb up from 3Q23.
  • We believe that EPS will increase by 16% and the stock will have an upside of 21%~44%.

Greatview Aseptic (468 HK): Xinjufeng Technology Acquires Jardine Matheson’s Stake

By Arun George

Evergrande : Not Legit

By Warut Promboon

  • The company has defaulted since 2021 and has already missed a few payments as well as the deadline to deliver a restructuring blueprint at the end of 2022.
  • We believe the Chinese government is looking now to rescue developers (such as Country Garden) which are seen as systemically important.  
  • We are of the opinion that the sector is not investable for the general public  in 2023 and only the Distressed specialists should endeavor investing in Chinese high-yield property developers.

Xpeng: Accelerated Model Launch Campaign May Surprise

By Victoria Li

  • Xpeng has announced it is speeding up its new model launch pipeline by launching 5 new models this year
  • If all go to plan, Xpeng’s sales may hit 30k vehicles/month end of ’23 or early ’24
  • The appointment of new President from ICE sector may lead to some market confusion on management and branding in the short term

Shanghai MicroPort MedBot Group (2252.HK) – Recognize the Reality but Don’t Give up Hope

By Xinyao (Criss) Wang

  • New policy about surgical robots was released, which is conducive to the promotion and popularization of surgical robots in China. However, the situation is not as simple as it seems.
  • We deep dive the business environment of surgical robots in China.Even with favorable policies, both surgical robot systems and consumables have to reduce price largely so as to be affordable.
  • It’s difficult to make profits in China. Medbot could lose money for quite some time.Without solid internationalization, the rally cannot be sustained for a long time only by policy catalyst.

Aequitas ASEAN Placements Bookrunner Performance (2019-2022)

By Ethan Aw

  • In this note, we will take a look at the performance of bookrunners for ASEAN placements from 2019-2022.
  • The following dataset includes all ASEAN placements above US$100m for the period of Calendar Years 2019-2022, which amounted to a total of 54 deals.
  • The deals you see in this note are based on our historical placements tracker. Feel free to drop us a message for additional information on any of these placements.

Morning Views Asia:

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.

    China’s Green Loan Market: Fifty Shades of Green

    By Stanley Tsai, CFA

    • The PBOC has extended the use of its policy tools to support the green loan industry as part of the country’s’ drive towards carbon neutrality.
    • China’s green loan market is already the largest in the world, if you agree with its definitions and can look past its limitations.
    • The state of green finance matters to investors, and not just those with explicit ESG mandates. We look at the potential pitfalls in the China.

    💡 Before it’s here, it’s on Smartkarma

    Sign Up for Free

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

    • ✓ Unlimited Research Summaries
    • ✓ Personalised Alerts
    • ✓ Custom Watchlists
    • ✓ Company Data and News
    • ✓ Events & Webinars
    Sign Up for Free
    Jan 31
    0

    Daily Brief Japan: Nissan Motor, AXXZIA Inc, SBI Holdings, H2O Retailing, NEC Corp, Nihon M&A Center, Tobila Systems Inc and more

    By | Daily Briefs, Japan

    In today’s briefing:

    • Renault & Nissan “Agree” On New Terms – A Diet Nothing🍔, Exchangeable into Shaq Fingerguns
    • TOPIX Inclusion: AXXZIA Inc (4936 JP) – Time to Take Profits
    • JPX-Nikkei 400 Rebal 2023: End-Jan 2023
    • Japanese Department Stores: An Opportunity to Trade FQ3 Earnings This Week
    • NEC (6701) | Strong Network Revenues
    • Nihon M&A: Weak Earnings and Guidance for Full-Year Seems Too Optimistic
    • Tobila Systems: A Deep-Dive View

    Renault & Nissan “Agree” On New Terms – A Diet Nothing🍔, Exchangeable into Shaq Fingerguns

    By Travis Lundy

    • Today, a Nikkei article suggested (after other media suggested last week) that Renault SA (RNO FP) and Nissan Motor (7201 JP) have come to agreement about their new deal.
    • Post-Close, an announcement. Two striking things about this “agreement” a) it comes many months after they started negotiating, and b) we have few details, and c) we’re missing a bit.
    • Renault agrees to cap voting rights in Nissan. Nissan agrees to invest in RNO’s EV spinoff, and so far, they agree to strengthen the Alliance. What’s missing is interesting/key.

    TOPIX Inclusion: AXXZIA Inc (4936 JP) – Time to Take Profits

    By Janaghan Jeyakumar, CFA

    JPX-Nikkei 400 Rebal 2023: End-Jan 2023

    By Janaghan Jeyakumar, CFA

    • JPX-Nikkei 400 is composed of common stocks listed on the Tokyo Stock Exchange. It is a free-float-adjusted market-value-weighted (capped) index composed of 400 constituents.
    • A periodic review is conducted by the Index providers, the JPX Group and Nikkei Inc, in August every year. We look at the potential forward inclusions and removals every month.
    • Below is a look at potential Inclusions and Removals for the JPX-Nikkei 400 Rebalance to come in August 2023 based on trading data as of end-January 2023.

    Japanese Department Stores: An Opportunity to Trade FQ3 Earnings This Week

    By Oshadhi Kumarasiri

    NEC (6701) | Strong Network Revenues

    By Mark Chadwick

    • We remain bullish on NEC as we believe that the company is one of the key beneficiaries of the shift to standalone 5G
    • NEC’s Network Services registered double-digit revenue and profit gains in Q3 on the back of growth in 5G equipment sales and IP income.
    • We believe that the current share price (+4% over the past 12m) and valuation (10x PE, 0.8x PB) do not reflect the positive mid-term outlook

    Nihon M&A: Weak Earnings and Guidance for Full-Year Seems Too Optimistic

    By Shifara Samsudeen, ACMA, CGMA

    • Nihon M&A Center (2127 JP) reported 3QFY03/2022 results. Revenue declined 9.9% YoY to JPY9.8bn (vs consensus JPY13.6bn) while OP dropped 21.9% YoY to JPY3.2bn (vs consensus JPY6.1bn).
    • Though there had been an increase in the no. of transactions completed during the quarter, revenue declined due to price pressures.
    • Share price has declined 22.8% during today’s trade due to weaker-than-expected earnings and we think full-year FY03/2022E guidance is too hard to achieve.

    Tobila Systems: A Deep-Dive View

    By Steven Chen

    • This is our second Insight into Tobila Systems – the absolute dominator in the niche of fraud/spam call and message filtering services in Japan;
    • We like the high-quality, unique assets owned by the company, although capital allocation appears to stand out as a wild card in our formula of long-term shareholder-value creation;
    • At the current level, we would hold the shares firmly and wait patiently for more opportunistic offerings from Mr. Market to accumulate more shares.

    💡 Before it’s here, it’s on Smartkarma

    Sign Up for Free

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

    • ✓ Unlimited Research Summaries
    • ✓ Personalised Alerts
    • ✓ Custom Watchlists
    • ✓ Company Data and News
    • ✓ Events & Webinars
    Sign Up for Free
    Jan 31
    0

    Daily Brief Energy/Materials: Greatview Aseptic Packaging, Natural Gas, Vedanta Resources, Kinder Morgan, Treatt PLC and more

    By | Daily Briefs, Energy & Materials Sector

    In today’s briefing:

    • Greatview Aseptic (468 HK): Xinjufeng Technology Acquires Jardine Matheson’s Stake
    • The Commodity Report #88
    • Vedanta Resources – Earnings Flash – Q3 FY 2022-23 Results (Vedanta Ltd) – Lucror Analytics
    • Kinder Morgan: Major Drivers
    • Treatt – Back to steady growth

    Greatview Aseptic (468 HK): Xinjufeng Technology Acquires Jardine Matheson’s Stake

    By Arun George

    The Commodity Report #88

    By The Commodity Report

    • The general market consensus going into the new year was that commodity prices would continue to correct.
    • We also positioned ourselves in this camp, as we predicted the turnaround story a few months later.
    • While some commodities such as wheat or natural gas (both commodities that had been priced in a risk bonus for a long time due to the Ukraine war) fell sharply, other commodities such as corn, soybeans, orange juice, or soybean meal remain not far from their highs.

    Vedanta Resources – Earnings Flash – Q3 FY 2022-23 Results (Vedanta Ltd) – Lucror Analytics

    By Trung Nguyen

    Vedanta Ltd’s (VEDL) Q3/22-23 results were weaker than expected, with thin profitability at the aluminium segment due to higher energy and commodity costs. However, we note positively the sale of Zinc International to Hindustan Zinc​ (HZL) and the fourth interim dividend (USD 570 mn). The financial risk metrics remain modest. The key risk remains the weak debt maturity profile, with large maturities in FY 2023-24.

    Vedanta as a group has demonstrated a strong willingness to repay debt, and the capacity to do so by upstreaming cash as quickly as possible. In addition, we note the group’s creative methods to upstream cash efficiently, such as: [1] the sale of Zinc International to HZL; and [2] the merger between Cairn India and VEDL in 2017, when oil prices were low, with the deal partly funded by preference shares to Cairn India’s minority shareholders. We believe that the huge dividends by VEDL in FY 2022-23 (USD 3.7 bn) are the highest possible and will likely decline subsequently, given the correction in commodity prices. Still, this could offer comfort to lenders as it would support VRL’s refinancing needs (i.e. gap between the maturing debt and cash inflows).

    Kinder Morgan: Major Drivers

    By Baptista Research

    • Kinder Morgan had a mixed quarter as the company failed to meet the revenue expectations of Wall Street but managed an earnings beat.
    • The quarter also saw a good increase in their tankers business due to higher rates and more utilization.
    • Although Kinder Morgan benefited from increased commodity prices, its core business, specialty natural gas, performed remarkably well, and the fundamentals remain solid in the future.

    Treatt – Back to steady growth

    By Edison Investment Research

    Treatt’s AGM trading update suggests a more normal and steady pattern of trading has resumed, following the setbacks that caused the profit warning last August. Management has clearly taken rapid steps to address the issues that were identified, and indeed this was already evident in October’s FY22 pre-close trading update. Performance remains in line with management expectations and our forecasts are unchanged.

    💡 Before it’s here, it’s on Smartkarma

    Sign Up for Free

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

    • ✓ Unlimited Research Summaries
    • ✓ Personalised Alerts
    • ✓ Custom Watchlists
    • ✓ Company Data and News
    • ✓ Events & Webinars
    Sign Up for Free
    Jan 31
    0

    Daily Brief TMT/Internet: Tencent Music Entertainment Group, Tencent, Taiwan Semiconductor (TSMC) – ADR, NEC Corp, Bukalapak, Tobila Systems Inc, Texas Instruments, Microsoft Corp, Rovio Entertainment, X2M Connect ltd and more

    By | Daily Briefs, TMT/Internet

    In today’s briefing:

    • Quiddity Flow Expectations HSTECH Mar 23: Two Index Changes Possible
    • Tencent (700 HK): Risen 100% in Three Months, But Still 21%~44% Upside
    • Why Taiwan’s Semiconductor and Hardware Forecasts Might Still Be Too Optimistic
    • NEC (6701) | Strong Network Revenues
    • Bukalapak (BUKA IJ) – Thriving Within a Virtuous Circle
    • Tobila Systems: A Deep-Dive View
    • Texas Instruments Inc: New Chip Launches & Other Drivers
    • Microsoft Inc: Acquisition Of Fungible Inc & Other Drivers
    • Playtika/Rovio: Fortunate Birds
    • X2M Connect Limited – Tracking In-Line Across Key Variables

    Quiddity Flow Expectations HSTECH Mar 23: Two Index Changes Possible

    By Janaghan Jeyakumar, CFA

    • In this insight, we take a look at the potential index changes and the resultant capping flows for the Hang Seng Tech Index (HSTECH INDEX) in March 2023.
    • According to our estimation, there could be two changes for the HSTECH in March 2023 and there could be one-way index flows of US$365mn.
    • The final index changes along with indicative capping and index weights could be published in Mid/Late-February 2023 and implemented in early-March 2023.

    Tencent (700 HK): Risen 100% in Three Months, But Still 21%~44% Upside

    By Ming Lu

    • We believe total revenue growth rate will accelerate from 4Q22 and grow by 9% in 2023.
    • We believe the operating margin will be stable from 4Q22 to 2Q23, but the margin will climb up from 3Q23.
    • We believe that EPS will increase by 16% and the stock will have an upside of 21%~44%.

    Why Taiwan’s Semiconductor and Hardware Forecasts Might Still Be Too Optimistic

    By Vincent Fernando, CFA

    • Inventory levels rose to highs in 3Q22 — Now increased margin pain may come through as we move through the latest earnings season.
    • Forecasts still assume relatively strong margins vs. history and thus appear at risk of disappointment.
    • Earnings forecasts, while assuming a down-cycle, are still assuming a relatively benign down-cycle.

    NEC (6701) | Strong Network Revenues

    By Mark Chadwick

    • We remain bullish on NEC as we believe that the company is one of the key beneficiaries of the shift to standalone 5G
    • NEC’s Network Services registered double-digit revenue and profit gains in Q3 on the back of growth in 5G equipment sales and IP income.
    • We believe that the current share price (+4% over the past 12m) and valuation (10x PE, 0.8x PB) do not reflect the positive mid-term outlook

    Bukalapak (BUKA IJ) – Thriving Within a Virtuous Circle

    By Angus Mackintosh

    • Bukalapak (BUKA IJ)  is one of Indonesia’s most differentiated digital economy players plus it is unusual in that it has one of the longest runways amongst peers at 15 years. 
    • Despite operating a marketplace model, the platform uses this to generate traffic for its other businesses including its O2O Mitra Bukalapak business and its growing online speciality store business. 
    • Bukalapak (BUKA IJ) also has strong ESG credentials, the most obvious of which is in the empowerment of MSMEs through its Mitra business. It is also making headway toward profitability.

    Tobila Systems: A Deep-Dive View

    By Steven Chen

    • This is our second Insight into Tobila Systems – the absolute dominator in the niche of fraud/spam call and message filtering services in Japan;
    • We like the high-quality, unique assets owned by the company, although capital allocation appears to stand out as a wild card in our formula of long-term shareholder-value creation;
    • At the current level, we would hold the shares firmly and wait patiently for more opportunistic offerings from Mr. Market to accumulate more shares.

    Texas Instruments Inc: New Chip Launches & Other Drivers

    By Baptista Research

    • Texas Instruments delivered a strong set of results in the quarter, with revenue of $4.7 billion and a gross profit of $3.1 billion resulting in an all-around beat.
    • The company’s gross profit fell from a year ago due to lower revenue, higher capital expenses, and the conversion of LFAB-related charges to the cost of revenue.
    • However, given the strong earnings, the company distributed $1.1 billion in dividends during the quarter and spent $848 million on stock repurchases.

    Microsoft Inc: Acquisition Of Fungible Inc & Other Drivers

    By Baptista Research

    • Microsoft delivered a mixed set of results for the last quarter as its revenues failed to meet Wall Street expectations but the company managed an earnings beat.
    • Revenue for the Microsoft Cloud surpassed $27 billion, increasing 22% and 29% in constant currency.
    • Besides, the company made its Azure OpenAI widely available and has already been used by over 200 clients, ranging from KPMG to Al Jazeera.

    Playtika/Rovio: Fortunate Birds

    By Jesus Rodriguez Aguilar

    • Highly leveraged mobile-games developer Playtika goes mildly hostile in its pursuit for Angry Brids creator Rovio, albeit with a generous possible offer at €9.05/share (11.1x EV/Fwd EBITDA).
    • The stakes controlled by the Heds total c.32% (source: Rovio), making a hostile offer prone to failure. The shares aren’t succeeding though, and trade 36% below its 2017 IPO price.
    • The shares are trading at a 19.3% discount to the possible offer (and 14.6% discount to my DCF-based fair-value estimate). At this level, they do not seem expensive.

    X2M Connect Limited – Tracking In-Line Across Key Variables

    By Research as a Service (RaaS)

    • X2M Connect Limited (ASX:X2M) has updated several key variables in conjunction with its December quarter 4C release.
    • Most key variables were in-line or ahead of RaaS expectations including a cash-flow positive Q2, device growth of 23% on September 2022 to 361k (RaaS 345k), H1 FY23 revenue +96% to $9.0m (RaaS $9.2m), cash costs of ~$4.3m (RaaS $4.6m) and a cash balance of $3.05m.
    • Post-month end we estimate a cash balance closer to $3.5m on receipt of a $1.3m R&D credit offset by the repayment of a related R&D loan. 

    💡 Before it’s here, it’s on Smartkarma

    Sign Up for Free

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

    • ✓ Unlimited Research Summaries
    • ✓ Personalised Alerts
    • ✓ Custom Watchlists
    • ✓ Company Data and News
    • ✓ Events & Webinars
    Sign Up for Free
    Jan 31
    0

    Daily Brief Industrials: Adani Enterprises, Jardine Matheson Holdings, HMM Co., Ltd., Samsung C&T, Nihon M&A Center, General Electric Co, Raytheon Technologies, 3M Co and more

    By | Daily Briefs, Industrials

    In today’s briefing:

    • Adani Ent FPO – Early Demand Muted, Adani & Hindenburg Trade Barbs Again, But Not a Good Look
    • Smartkarma Webinar | This Is Not A Webinar On Adani
    • Matheson To Exit Greatview Aseptic
    • HMM Is Likely the First to Be Subject to the Mandatory Offer that Comes into Force
    • Using Smartkarma/OWL ESG Analytics to Narrow Down List of Corporate Activism Targets in Korea
    • Nihon M&A: Weak Earnings and Guidance for Full-Year Seems Too Optimistic
    • General Electric: Successful Spinoff & Other Developments
    • Raytheon Technologies: Partnership With Microsoft & Other Drivers
    • 3M Inc: New AI Technology & Other Developments

    Adani Ent FPO – Early Demand Muted, Adani & Hindenburg Trade Barbs Again, But Not a Good Look

    By Travis Lundy

    • The Adani Enterprises (ADE IN) FPO saw VERY muted demand (realtime available on NSE+BSE websites) on Day 1 Friday as the share price plummeted through the bottom of the range.
    • The Adani Group responded to Hindenburg late Sunday with a 400-page rebuttal, cloaked in nationalistic terms. Hindenburg responded saying the company failed to answer 62 of 88 questions.
    • This is not going away. They could lower the FPO price, or just pull the FPO. That won’t materially change the significant over-valuation of many Adani Group listco share prices.

    Smartkarma Webinar | This Is Not A Webinar On Adani

    By Smartkarma Research

    In the next installment of our Webinar Wednesdays, we go live with Smartkarma Insight Provider, Travis Lundy as he gives us a quick rundown about what is the current situation that is happening with Adani Enterprises and where they are headed from this point on.

    The webinar will be hosted on Wednesday, 1 February 2023, 17:00 SGT/HKT.

    Travis Lundy has 20+ years of experience in Asia doing alternative strategies (i.e. non-delta1 non long-only) in fixed income, equity derivatives, and activist/catalyst/event-driven and long-short equity strategies, with most of that time spent managing money.

    Matheson To Exit Greatview Aseptic

    By David Blennerhassett

    HMM Is Likely the First to Be Subject to the Mandatory Offer that Comes into Force

    By Sanghyun Park

    • KDB recently initiated the process of selecting an advisory firm to sell its stake in HMM, which will likely be the first to implement the mandatory offer rule.
    • Potential bidders include Hyundai Glovis, LX Holdings, and Samsung SDS. As for POSCO Holdings, it recently said that it is not considering acquiring HMM.
    • Given that HMM is the only national shipping company, there is a good chance that multiple bidders will appear, which will lead to a premium to the market price.

    Using Smartkarma/OWL ESG Analytics to Narrow Down List of Corporate Activism Targets in Korea

    By Douglas Kim

    • We discuss how to use the OWL ESG Analytics (available on Smartkarma) to narrow down the list of companies that could be the next targets of corporate activism in Korea. 
    • We go through in detail, step-by-step process of how to narrow down the list of companies, using the OWL ESG Analytics. 
    • Corporate activism has been one of the most important, market moving factors moving the Korean stock market this year.

    Nihon M&A: Weak Earnings and Guidance for Full-Year Seems Too Optimistic

    By Shifara Samsudeen, ACMA, CGMA

    • Nihon M&A Center (2127 JP) reported 3QFY03/2022 results. Revenue declined 9.9% YoY to JPY9.8bn (vs consensus JPY13.6bn) while OP dropped 21.9% YoY to JPY3.2bn (vs consensus JPY6.1bn).
    • Though there had been an increase in the no. of transactions completed during the quarter, revenue declined due to price pressures.
    • Share price has declined 22.8% during today’s trade due to weaker-than-expected earnings and we think full-year FY03/2022E guidance is too hard to achieve.

    General Electric: Successful Spinoff & Other Developments

    By Baptista Research

    • General Electric finished the year on a positive note with an all-around beat in Q4, improved cash generation, margin expansion, and revenue growth.
    • Power delivery, within GE Vernova with continued stability at gas and took significant actions for positioning renewable energy for future profitability.
    • The plans of GE to launch GE Aerospace and GE Vernova are progressing well.

    Raytheon Technologies: Partnership With Microsoft & Other Drivers

    By Baptista Research

    • Raytheon delivered a mixed set of results in the face of significant macroeconomic challenges, including labor and supply chain constraints, managing record levels of inflation, and transitioning out of Russia.
    • The company brought new technologies to market, and it drove further digitation and automation through product sustainment and manufacturing.
    • Raytheon also completed the foremost engine test run for its provincial hybrid flight demonstrator.

    3M Inc: New AI Technology & Other Developments

    By Baptista Research

    • 3M delivered a mixed set of results amidst the challenging economic environment with supply chain disruptions, inflation, and slowing growth.
    • Because of Covid-related disruptions, 3M saw a significant slowing in China and modernizing demand over industrial markets.
    • With the supply chain stabilizing, 3M is focused on driving working capital and improving manufacturing operations.

    💡 Before it’s here, it’s on Smartkarma

    Sign Up for Free

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

    • ✓ Unlimited Research Summaries
    • ✓ Personalised Alerts
    • ✓ Custom Watchlists
    • ✓ Company Data and News
    • ✓ Events & Webinars
    Sign Up for Free
    Jan 31
    0

    Daily Brief Industrials: Adani Enterprises, Jardine Matheson Holdings, HMM Co., Ltd., Samsung C&T, Nihon M&A Center, General Electric Co, Raytheon Technologies, 3M Co and more

    By | Daily Briefs, Industrials

    In today’s briefing:

    • Adani Ent FPO – Early Demand Muted, Adani & Hindenburg Trade Barbs Again, But Not a Good Look
    • Smartkarma Webinar | This Is Not A Webinar On Adani
    • Matheson To Exit Greatview Aseptic
    • HMM Is Likely the First to Be Subject to the Mandatory Offer that Comes into Force
    • Using Smartkarma/OWL ESG Analytics to Narrow Down List of Corporate Activism Targets in Korea
    • Nihon M&A: Weak Earnings and Guidance for Full-Year Seems Too Optimistic
    • General Electric: Successful Spinoff & Other Developments
    • Raytheon Technologies: Partnership With Microsoft & Other Drivers
    • 3M Inc: New AI Technology & Other Developments

    Adani Ent FPO – Early Demand Muted, Adani & Hindenburg Trade Barbs Again, But Not a Good Look

    By Travis Lundy

    • The Adani Enterprises (ADE IN) FPO saw VERY muted demand (realtime available on NSE+BSE websites) on Day 1 Friday as the share price plummeted through the bottom of the range.
    • The Adani Group responded to Hindenburg late Sunday with a 400-page rebuttal, cloaked in nationalistic terms. Hindenburg responded saying the company failed to answer 62 of 88 questions.
    • This is not going away. They could lower the FPO price, or just pull the FPO. That won’t materially change the significant over-valuation of many Adani Group listco share prices.

    Smartkarma Webinar | This Is Not A Webinar On Adani

    By Smartkarma Research

    In the next installment of our Webinar Wednesdays, we go live with Smartkarma Insight Provider, Travis Lundy as he gives us a quick rundown about what is the current situation that is happening with Adani Enterprises and where they are headed from this point on.

    The webinar will be hosted on Wednesday, 1 February 2023, 17:00 SGT/HKT.

    Travis Lundy has 20+ years of experience in Asia doing alternative strategies (i.e. non-delta1 non long-only) in fixed income, equity derivatives, and activist/catalyst/event-driven and long-short equity strategies, with most of that time spent managing money.

    Matheson To Exit Greatview Aseptic

    By David Blennerhassett

    HMM Is Likely the First to Be Subject to the Mandatory Offer that Comes into Force

    By Sanghyun Park

    • KDB recently initiated the process of selecting an advisory firm to sell its stake in HMM, which will likely be the first to implement the mandatory offer rule.
    • Potential bidders include Hyundai Glovis, LX Holdings, and Samsung SDS. As for POSCO Holdings, it recently said that it is not considering acquiring HMM.
    • Given that HMM is the only national shipping company, there is a good chance that multiple bidders will appear, which will lead to a premium to the market price.

    Using Smartkarma/OWL ESG Analytics to Narrow Down List of Corporate Activism Targets in Korea

    By Douglas Kim

    • We discuss how to use the OWL ESG Analytics (available on Smartkarma) to narrow down the list of companies that could be the next targets of corporate activism in Korea. 
    • We go through in detail, step-by-step process of how to narrow down the list of companies, using the OWL ESG Analytics. 
    • Corporate activism has been one of the most important, market moving factors moving the Korean stock market this year.

    Nihon M&A: Weak Earnings and Guidance for Full-Year Seems Too Optimistic

    By Shifara Samsudeen, ACMA, CGMA

    • Nihon M&A Center (2127 JP) reported 3QFY03/2022 results. Revenue declined 9.9% YoY to JPY9.8bn (vs consensus JPY13.6bn) while OP dropped 21.9% YoY to JPY3.2bn (vs consensus JPY6.1bn).
    • Though there had been an increase in the no. of transactions completed during the quarter, revenue declined due to price pressures.
    • Share price has declined 22.8% during today’s trade due to weaker-than-expected earnings and we think full-year FY03/2022E guidance is too hard to achieve.

    General Electric: Successful Spinoff & Other Developments

    By Baptista Research

    • General Electric finished the year on a positive note with an all-around beat in Q4, improved cash generation, margin expansion, and revenue growth.
    • Power delivery, within GE Vernova with continued stability at gas and took significant actions for positioning renewable energy for future profitability.
    • The plans of GE to launch GE Aerospace and GE Vernova are progressing well.

    Raytheon Technologies: Partnership With Microsoft & Other Drivers

    By Baptista Research

    • Raytheon delivered a mixed set of results in the face of significant macroeconomic challenges, including labor and supply chain constraints, managing record levels of inflation, and transitioning out of Russia.
    • The company brought new technologies to market, and it drove further digitation and automation through product sustainment and manufacturing.
    • Raytheon also completed the foremost engine test run for its provincial hybrid flight demonstrator.

    3M Inc: New AI Technology & Other Developments

    By Baptista Research

    • 3M delivered a mixed set of results amidst the challenging economic environment with supply chain disruptions, inflation, and slowing growth.
    • Because of Covid-related disruptions, 3M saw a significant slowing in China and modernizing demand over industrial markets.
    • With the supply chain stabilizing, 3M is focused on driving working capital and improving manufacturing operations.

    💡 Before it’s here, it’s on Smartkarma

    Sign Up for Free

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

    • ✓ Unlimited Research Summaries
    • ✓ Personalised Alerts
    • ✓ Custom Watchlists
    • ✓ Company Data and News
    • ✓ Events & Webinars
    Sign Up for Free
    Jan 31
    0

    Daily Brief Consumer: Nissan Motor, AXXZIA Inc, Tesla Motors, H2O Retailing, Gujarat Ambuja Exports, Hesai Group, XPeng, Netflix Inc, Procter & Gamble Co and more

    By | Consumer, Daily Briefs

    In today’s briefing:

    • Renault & Nissan “Agree” On New Terms – A Diet Nothing🍔, Exchangeable into Shaq Fingerguns
    • TOPIX Inclusion: AXXZIA Inc (4936 JP) – Time to Take Profits
    • Tesla Q4: Stalling Growth, Shrinking Margins, Weaker Guidance, Mystery “Investment”
    • Japanese Department Stores: An Opportunity to Trade FQ3 Earnings This Week
    • Gujarat Ambuja Exports Ltd (GAEL): Forensic Analysis
    • Hesai Group IPO Preview: Will Rich Valuation Worry Long-Term Investors?
    • Xpeng: Accelerated Model Launch Campaign May Surprise
    • Netflix Inc: Continued Subscriber Growth & Other Drivers
    • Procter & Gamble: Continued Acquisitions In Skincare & Haircare & Other Drivers
    • Tesla Inc: Launch In Thailand & Other Drivers

    Renault & Nissan “Agree” On New Terms – A Diet Nothing🍔, Exchangeable into Shaq Fingerguns

    By Travis Lundy

    • Today, a Nikkei article suggested (after other media suggested last week) that Renault SA (RNO FP) and Nissan Motor (7201 JP) have come to agreement about their new deal.
    • Post-Close, an announcement. Two striking things about this “agreement” a) it comes many months after they started negotiating, and b) we have few details, and c) we’re missing a bit.
    • Renault agrees to cap voting rights in Nissan. Nissan agrees to invest in RNO’s EV spinoff, and so far, they agree to strengthen the Alliance. What’s missing is interesting/key.

    TOPIX Inclusion: AXXZIA Inc (4936 JP) – Time to Take Profits

    By Janaghan Jeyakumar, CFA

    Tesla Q4: Stalling Growth, Shrinking Margins, Weaker Guidance, Mystery “Investment”

    By Vicki Bryan

    • Tesla’s big miss on Q4 deliveries turned into stalling revenue growth, sharply lower margins, and reduced guidance—as I expected. 
    • As usual, actual profit and cash generated were much lower versus reported, excluding energy credit sales and unusual items. 
    • So with cash burn up and guidance down, what was the mysterious $4.4 billion “investment”? Asking for a bird.

    Japanese Department Stores: An Opportunity to Trade FQ3 Earnings This Week

    By Oshadhi Kumarasiri

    Gujarat Ambuja Exports Ltd (GAEL): Forensic Analysis

    By Nitin Mangal

    • Gujarat Ambuja Exports (GAEX IN) is an Agro Processing conglomerate having a diverse product profile across oil seeds, edible oil refining, maize and starch, cotton yarn, wheat processing, etc. 
    • Our forensics primarily include the takeaways on MACPPL acquisition, its true rationale, accounting impact on the balance sheet and few disclosure errs.
    • Other major takeaway relates to capex story and grey areas relating to the capacity size and timely completion, especially for its marquee plant in Malda.

    Hesai Group IPO Preview: Will Rich Valuation Worry Long-Term Investors?

    By Andrei Zakharov

    • Hesai Group (HSAI US) , a global leader in LiDAR technology for autonomous driving and ADAS, filed for a $100M placeholder IPO with Goldman Sachs and Morgan Stanley leading the offering.
    • The company’s last round was a $70M Series D+ at a $3B pre-money valuation, implying EV/LTM Rev multiple of 19x today, a significant premium to comparable companies in the space.
    • We remain cautious about buying into the Hesai Group (HSAI US)  IPO due to rich valuation, negative free cash flows, loss-making business, intense competition, and developments in alternative technologies.

    Xpeng: Accelerated Model Launch Campaign May Surprise

    By Victoria Li

    • Xpeng has announced it is speeding up its new model launch pipeline by launching 5 new models this year
    • If all go to plan, Xpeng’s sales may hit 30k vehicles/month end of ’23 or early ’24
    • The appointment of new President from ICE sector may lead to some market confusion on management and branding in the short term

    Netflix Inc: Continued Subscriber Growth & Other Drivers

    By Baptista Research

    • Netflix delivered a mixed set of results for the last quarter.
    • The company surpassed its own expectations with respect to subscriber growth and added 7.66 million net new subscribers in Q4, higher than its own forecast of 4.5 million additions.
    • The company ended 2022 with 230.75 million worldwide, surpassing its previous target of 227.59 million, implying a 4% subscriber growth.

    Procter & Gamble: Continued Acquisitions In Skincare & Haircare & Other Drivers

    By Baptista Research

    • Procter & Gamble saw good results from implementing its integrated strategies and the company delivered an all-around beat.
    • P&G saw its organic sales increasing while its global aggregate market share held, its productivity savings continuing, and its supply efficiency improved further.
    • Hair Care saw a mid-single-digit increase, while oral care, Skin and Personal Care, Baby Care, and Family Care saw low single-digit increases.

    Tesla Inc: Launch In Thailand & Other Drivers

    By Baptista Research

    • Tesla delivered a mixed set of results in the last quarter and failed to meet revenue expectations of Wall Street.
    • Tesla has had a challenging 2022 because of delivery challenges, high interest rates, and forced shutdowns.
    • For Autopilot, Tesla deployed a Full Self-Driving Beta for city streets to around 400,000 customers in North America.

    💡 Before it’s here, it’s on Smartkarma

    Sign Up for Free

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

    • ✓ Unlimited Research Summaries
    • ✓ Personalised Alerts
    • ✓ Custom Watchlists
    • ✓ Company Data and News
    • ✓ Events & Webinars
    Sign Up for Free
    Jan 31
    0

    Daily Brief Health Care: Qingdao Haier Biomedical, Osstem Implant, Concord Biotech Ltd, Shanghai MicroPort MedBot Group and more

    By | Daily Briefs, Healthcare

    In today’s briefing:

    • STAR50 Index Rebalance Preview: 5 Changes Forecast as Review Period Ends
    • Osstem Implant: Details of Tender Offer & Chairman Choi’s Children Exchange CB Call Options for BWs
    • Concord Biotech Pre-IPO – Sales Have Been Growing but Watch Out for Its High Concentration Risk
    • Shanghai MicroPort MedBot Group (2252.HK) – Recognize the Reality but Don’t Give up Hope

    STAR50 Index Rebalance Preview: 5 Changes Forecast as Review Period Ends

    By Brian Freitas

    • The review period for the March rebalance ends today. We forecast 2 changes using a 12-month minimum listing history, and 5 changes using a 6-month minimum listing history.
    • We expect the index committee to continue using a 6-month minimum listing history. The impact on the potential deletes is a lot higher than the impact on the potential adds.
    • With 5 changes to the index, estimated one-way turnover is 5.1% resulting in a one-way trade of CNY 4,549m. There is a reasonably large reverse funding trade.

    Osstem Implant: Details of Tender Offer & Chairman Choi’s Children Exchange CB Call Options for BWs

    By Douglas Kim

    • We provide details of the Osstem Implant tender offer as well as Chairman Choi’s children exchange of CB call options for BWs. 
    • We believe that the majority of the minority shareholders in Osstem Implant are not likely to sell their shares at 190,000 won per share but hold on to it. 
    • Over a longer time frame, Osstem’s share price could reach higher levels driven by its improving sales and profit growth, deep valuation discount to global peers, and further M&A fight. 

    Concord Biotech Pre-IPO – Sales Have Been Growing but Watch Out for Its High Concentration Risk

    By Clarence Chu

    • Concord Biotech Ltd (658823Z IN) is looking to raise around US$250m in its upcoming India IPO.
    • Concord Biotech (Concord) is an India-based biopharma firm, which develops and manufactures fermentation-based active pharmaceutical ingredients (APIs).
    • As per F&S, it was one of the leading global developers and manufacturers of select fermentation-based APIs across immunosuppressants and oncology in terms of market share, based on FY21 volume.

    Shanghai MicroPort MedBot Group (2252.HK) – Recognize the Reality but Don’t Give up Hope

    By Xinyao (Criss) Wang

    • New policy about surgical robots was released, which is conducive to the promotion and popularization of surgical robots in China. However, the situation is not as simple as it seems.
    • We deep dive the business environment of surgical robots in China.Even with favorable policies, both surgical robot systems and consumables have to reduce price largely so as to be affordable.
    • It’s difficult to make profits in China. Medbot could lose money for quite some time.Without solid internationalization, the rally cannot be sustained for a long time only by policy catalyst.

    💡 Before it’s here, it’s on Smartkarma

    Sign Up for Free

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

    • ✓ Unlimited Research Summaries
    • ✓ Personalised Alerts
    • ✓ Custom Watchlists
    • ✓ Company Data and News
    • ✓ Events & Webinars
    Sign Up for Free