Smartkarma Daily Briefs

There are 3 changes for the IDX30 Index, 6 changes for the LQ45 Index, and 7 changes for the IDX80 Index at the rebalance to be implemented on 31 January.
Largest passive inflows are expected to be on Sumber Alfaria Trijaya Tbk Pt (AMRT IJ) and Surya Esa Perkasa (ESSA IJ).
With only 4 days to implementation, there will be relatively big moves on stocks that have large flow/impact from passive fund trading.

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Jan 27

Daily Brief India: Adani Enterprises, Mankind Pharma, Hindustan Unilever, NIFTY Index, Tata Motors Ltd and more

By Smartkarma Daily Briefs | Daily Briefs, India

In today’s briefing:

Adani Enterprises FPO Update: Hindenburg, Anchors, and Righteous Indignation
Mankind Pharma Pre-IPO – The Negatives – Recent Updates Weren’t Great
Hindustan Unilever (HUVR IN) | Royalty Rukus
Nifty Index (NIFTY INDEX) Has Confirmed Multi-Month Downtrend Risk
Tata Motors – Earnings Flash – Q3 FY 2022-23 Results – Lucror Analytics

Adani Enterprises FPO Update: Hindenburg, Anchors, and Righteous Indignation

The Adani Enterprises (ADE IN) Further Public Offering (“FPO”) expected to raise Rs 200bn has its first leg publicly complete with anchor investors taking Rs 59.849bn.
Noted shortseller Hindenburg Research published a long report suggesting Adani Enterprises and indeed the Adani Group were over-priced according to fundamentals and were the result of a “con.”
Now the book build starts. Deal structure and Adani Group CFO comments continue to suggest that Liquidity is a Bug, not a Feature.

Mankind Pharma Pre-IPO – The Negatives – Recent Updates Weren’t Great

Mankind Pharma is looking to raise about US$1bn in its upcoming India IPO.
MP is a pharmaceutical company engaged in developing, manufacturing and marketing a range of pharmaceutical formulations across various acute and chronic therapeutic areas, as well as several consumer healthcare products.
In this note, we talk about the not-so-positive aspects of the deal.

Hindustan Unilever (HUVR IN) | Royalty Rukus

By Pranav Bhavsar

Hindustan Unilever (HUVR IN)‘s strong quarterly performance was overshadowed by a proposed hike in royalty payments to parent Unilever PLC (ULVR LN)
HUVR’s historical royalty growth has been below revenue and PBT growth and hence does not generate any red flags in terms of minority shareholder protection.
While the impact on EPS is ~3%, we believe much of the reaction around HUVR’s Royalty is Noise.

Nifty Index (NIFTY INDEX) Has Confirmed Multi-Month Downtrend Risk

By David Coloretti, CMT

At TMA we deliver high probability outcomes by focusing on our 3 pillars of technical analysis. 1) Response to key levels. 2) Price action. 3) Momentum confirmation.
Every recommendation requires definitive evidence of all 3 pillars to be regarded as a high probability outcome.
The Nifty Index (NIFTY INDEX) delivered upon our 3 pillars in Nov/Dec 2022. A consecutive down month in January will be further evidence of a likely 15%-18% correction.

Tata Motors – Earnings Flash – Q3 FY 2022-23 Results – Lucror Analytics

By Trung Nguyen

In our view, Tata Motors’ Q3/22-23 results were solid and much better than expected, especially in terms of profitability and cash flows. The strong performance was driven by gradual improvement in chip supply, cost savings, product mix and softer commodity prices. Guidance is also positive. The financial risk profile should improve, supported by significantly higher earnings and slightly lower debt. Liquidity, at least at Jaguar Land Rover (JLR), remains sound. JLR has no debt maturities until January 2024.

While Tata Motors will likely be able to deliver earnings improvement in H2/22-23, we believe it might be difficult for the company to achieve net-zero auto debt in two years as guided, considering the challenging operating environment. In this context, a revision of this target is warranted.

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Jan 27

Daily Brief China: SenseTime Group, SDIC Power Holdings, Acotec Scientific Holdings, Aag Energy Holdings, Xingda International, ZJLD Group, MicroPort NeuroTech, Hang Seng China Enterprises Index and more

By Smartkarma Daily Briefs | China, Daily Briefs

In today’s briefing:

SenseTime (20 HK): Index Inclusions Incoming?
Northbound Stock Connect Expansion: Updated Details
Acotec (6669 HK): Boston Scientific’s HK$20 Partial Offer Unconditional
AAG Energy (2686 HK): Is Xinjiang Xintai Returning for Another Bid?
Xingda (1899 HK): HK$1.88 Partial Offer Now Open
AAG Energy (2686 HK) Suspended: Xinjiang Xintai Offer?
ZJLD Group Pre-IPO Tearsheet
MicroPort NeuroTech (2172.HK) – The Potential Risks Behind the Positive Profit Alert
Hang Seng CEI (HSCEI) – High Probability Target at 9450/70 in 2023 (+20%)

SenseTime (20 HK): Index Inclusions Incoming?

SenseTime Group (20 HK) was added to the Non-SDN Chinese Military-Industrial Complex Company (NS-CMIC) list on 10 December 2021. So, the stock is not a part of any global indices.
There is a possibility that the stock is no longer restricted to U.S. investors and that could lead to multiple index inclusions over the next few months.
Inclusion in the MSCI China Index could take place in February or May while inclusion in the FTSE All-World Index could take place in March.

Northbound Stock Connect Expansion: Updated Details

On 19 January, the HKEX clarified the liquidity criteria as well as treatment of Differentiated Voting Rights (DVR) stocks and the criteria for current Northbound stocks to become Sell-only.
We currently see 975 China A-shares becoming eligible for Northbound Stock Connect when the extension is implemented.
With the extension likely to be implemented in June, there will be additions to the MSCI China Index, FTSE All-World Index and FTSE All-Cap Index in August and September.

Acotec (6669 HK): Boston Scientific’s HK$20 Partial Offer Unconditional

As expected, Acotec Scientific Holdings (6669 HK)’s partial offer from Boston Scientific (BSX US) at HK$20 per share is now unconditional. The final closing date is 9 February.
The current acceptances representing 78.59% of outstanding shares imply current proration is 82.71%. Current pro-ration suggests CA Medtech post-offer shares will be counted towards the public float.
Based on the current proration of 82.71% and at the last close price of HK$19.78 per share, the breakeven price is HK$19.00 per share.

AAG Energy (2686 HK): Is Xinjiang Xintai Returning for Another Bid?

Aag Energy Holdings (2686 HK) entered a trading halt pending the release of an announcement under the Hong Kong Code on Takeovers and Mergers on 26 January.
It is likely that Xinjiang Xintai Natural Gas (603393 CH), the largest shareholder representing 56.95% of outstanding shares is seeking to privatise AAG.
The potential bid is likely privatisation through a scheme. Multiples from Xinjiang Xintai’s previous voluntary cash offer in 2018 suggest an offer north of HK$2.00.

Xingda (1899 HK): HK$1.88 Partial Offer Now Open

Xingda International (1899 HK)’s partial offer from a management-controlled offeror at HK$1.88 per share is now open. The IFA opines it to be fair and reasonable.
The partial offer is conditional on the offeror/concert parties, which have a 45.60% stake, hitting 50.01% voting rights and approval by the requisite majority of shareholders on the acceptance form.
The 4.41% minimum acceptance is not onerous. Based on a proration of 8.88% and at the last close price of HK$1.59 per share, the breakeven price is HK$1.56 per share.

AAG Energy (2686 HK) Suspended: Xinjiang Xintai Offer?

By David Blennerhassett

Back on the 14 May 2018, AAG Energy Holdings (2686 HK) announced a partial offer (50.5%) from Xinjiang Xintai Natural Gas (603393 CH) at HK$1.75/share.
This morning AAG was suspended pursuant to Hong Kong Code on Takeovers and Mergers.
I expect a Scheme Offer from Xinjiang Xintai, which currently holds 56.98%. Potentially, Fosun (656 HK) has returned to the well.

ZJLD Group Pre-IPO Tearsheet

By Clarence Chu

ZJLD Group (ZJLD HK) is looking to raise up to US$400m in its Hong Kong IPO. The deal will be run by Goldman Sachs and China Securities.
ZJLD Group (ZJLD) is a Chinese liquor company primarily producing baijiu.
As per F&S, the firm was the fourth largest privately-owned baijiu company and ranked third among all baijiu companies with three or more aroma types in terms of FY21 sales.

MicroPort NeuroTech (2172.HK) – The Potential Risks Behind the Positive Profit Alert

By Xinyao (Criss) Wang

The spring coil centralized procurement of neuro-interventional consumables in 21 provinces led by Jilin is about to start. The result may be unexpected, which could cause uncertainty to NeuroTech’s performance.
The promotion of import substitution in the field of neuro-intervention has not been as smooth as expected. If foreign brands win the bid, doctors would give priority to imported products.
Since NeuroTech is in leading position among domestic peers and has core R&D capabilities in this industry, we think it still has investment value. The valuation is in comfortable range.

Hang Seng CEI (HSCEI) – High Probability Target at 9450/70 in 2023 (+20%)

By David Coloretti, CMT

On 26 January 2023 we published our bearish multi-month Nifty Index (NIFTY INDEX) outlook. For the RV player, the Hang Seng CEI (HSCEI) is likely to present material opportunity.
At TMA we place tremendous emphasis on momentum confirmation. Currently, LT momentum triggers confirm a sustainable multi-month to multi-quarter uptrend in the HSCEI.
Occasionally Fibonacci retracement levels, based off different portions of a trend, coincide. These create high probability targets. 9450/70 in the HSCEI is one such high probability target in 2023.

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Jan 27

Daily Brief Japan: Jafco Co Ltd, Nitto Denko, Takashimaya, Itochu Corp and more

By Smartkarma Daily Briefs | Daily Briefs, Japan

In today’s briefing:

JAFCO Tender Offer Results – Low Pro-Ration Surprise, Murakami Overhang
Nitto Denko Q3 Results and Buyback Announced
Record Sales at JR Tokai Takashimaya
Itochu Signs L.L.Bean License, Gears up Forever 21 and Eddie Bauer Relaunches

JAFCO Tender Offer Results – Low Pro-Ration Surprise, Murakami Overhang

Jafco Co Ltd (8595 JP) announced the results of its Tender Offer Buyback today. They wanted to buy 16.8mm shares including 13.9mm from Murakami-san. He sold 9.63mm. Oops.
Pro-Ration was 69.25% which means that Murakami entities are still long about 4.276mm shares or 5.83% of shares out.
There should be some index selling, and some Murakami Overhang. There may be more overhang at recent prices.

Nitto Denko Q3 Results and Buyback Announced

Nitto Denko (6988 JP) today announced Q3 results, lower full-year guidance with one-quarter left to go, sharply undercutting implied Q4 results vs the Street.
The company also announced a buyback of 4.1-4.7% of shares out over the next 6mos. Assuming the share price falls in reaction, this could be closer to the top end.
The buyback is non-negligible as a portion of Likely Real World Float and as such the situation is worth a look – for those with a position and those without.

Record Sales at JR Tokai Takashimaya

By Michael Causton

JR Takashimaya is a newbie in the world of department store retailing but has grown to become the fourth highest selling store in the two decades since it opened.
As a result, it is increasingly regarded by brands as the Nagoyan version of Isetan Shinjuku in Tokyo and Hankyu Umeda in Osaka.
The store is an example of Takashimaya’s successful strategy to surround its key stores with more shopping facilities to suit all population segments, so driving traffic to the main store.

Itochu Signs L.L.Bean License, Gears up Forever 21 and Eddie Bauer Relaunches

By Michael Causton

Three years ago, Itochu Corp made it clear it would be investing heavily in its brand business.
It has been true to its word, adding the likes of Reebok, Under Armour and Forever 21 to its portfolio in the last year alone.
It has now signed a deal with long-term Japan operator, L.L.Bean, while gearing up for a major relaunch of Eddie Bauer.

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Jan 27

Most Read: Oriental Land, Kepco Engineering & Construction, Surya Esa Perkasa, SenseTime Group, SDIC Power Holdings, Jafco Co Ltd, Adani Enterprises, Acotec Scientific Holdings, Warrego Energy and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

Nikkei 225 Index Rebalance Preview (March): Potential Changes as Review Period Nears End
Solactive Global Uranium & Nuclear Components Index Rebalance: 6 Adds, 5 Deletes
IDX30/LQ45/IDX80 Index Rebalance: 4 Days to Implementation
SenseTime (20 HK): Index Inclusions Incoming?
Adani Enterprises US$2.4bn FPO – Updates, Pricing, Structure, Anchor and Some More
Northbound Stock Connect Expansion: Updated Details
JAFCO Tender Offer Results – Low Pro-Ration Surprise, Murakami Overhang
Adani Enterprises FPO Update: Hindenburg, Anchors, and Righteous Indignation
Acotec (6669 HK): Boston Scientific’s HK$20 Partial Offer Unconditional
Where To Go With Warrego?

Nikkei 225 Index Rebalance Preview (March): Potential Changes as Review Period Nears End

The review period for the Nikkei 225 (NKY INDEX) March rebalance ends next week. We highlight the 3 potential inclusions and exclusions for the index.
Lasertec Corp (6920), Oriental Land (4661) and Renesas Electronics (6723) remain our top inclusions, while Toyobo Co Ltd (3101), Nippon Light Metal (5703) and Toho Zinc (5707) could be deleted.
Due to the large size difference between the potential adds/deletes, there will be a large funding trade with passive trackers needing to sell over 1x ADV on many index constituents.

Solactive Global Uranium & Nuclear Components Index Rebalance: 6 Adds, 5 Deletes

Solactive has announced the constituent changes for the Global Uranium & Nuclear Components Index. There are 6 adds and 5 deletes with implementation at the close on 31 January.
Estimated one-way turnover is in excess of 12% and will result in a one-way trade of US$207m. There are 11 stocks with estimated passive flows greater than 5x ADV.
Some of the inclusions have had BIG rallies over the last couple of months and there could be profit taking on those names in the next few days.

IDX30/LQ45/IDX80 Index Rebalance: 4 Days to Implementation

There are 3 changes for the IDX30 Index, 6 changes for the LQ45 Index, and 7 changes for the IDX80 Index at the rebalance to be implemented on 31 January.
Largest passive inflows are expected to be on Sumber Alfaria Trijaya Tbk Pt (AMRT IJ) and Surya Esa Perkasa (ESSA IJ).
With only 4 days to implementation, there will be relatively big moves on stocks that have large flow/impact from passive fund trading.

SenseTime (20 HK): Index Inclusions Incoming?

SenseTime Group (20 HK) was added to the Non-SDN Chinese Military-Industrial Complex Company (NS-CMIC) list on 10 December 2021. So, the stock is not a part of any global indices.
There is a possibility that the stock is no longer restricted to U.S. investors and that could lead to multiple index inclusions over the next few months.
Inclusion in the MSCI China Index could take place in February or May while inclusion in the FTSE All-World Index could take place in March.

Adani Enterprises US$2.4bn FPO – Updates, Pricing, Structure, Anchor and Some More

Adani Enterprises is looking to raise INR200bn (US$2.4bn) via a further public offering (FPO). Bookbuild will begin tomorrow (27th Jan 23) and last till the end of the month.
Adani Enterprises is the flagship company of the Adani Group. The group’s entities’ stock performance over the past few years has made the founder one of the richest persons globally.
We have covered most aspects of the deal in our earlier note published. In this note, we talk about the recent updates and the deal pricing and structure.

Northbound Stock Connect Expansion: Updated Details

On 19 January, the HKEX clarified the liquidity criteria as well as treatment of Differentiated Voting Rights (DVR) stocks and the criteria for current Northbound stocks to become Sell-only.
We currently see 975 China A-shares becoming eligible for Northbound Stock Connect when the extension is implemented.
With the extension likely to be implemented in June, there will be additions to the MSCI China Index, FTSE All-World Index and FTSE All-Cap Index in August and September.

JAFCO Tender Offer Results – Low Pro-Ration Surprise, Murakami Overhang

Jafco Co Ltd (8595 JP) announced the results of its Tender Offer Buyback today. They wanted to buy 16.8mm shares including 13.9mm from Murakami-san. He sold 9.63mm. Oops.
Pro-Ration was 69.25% which means that Murakami entities are still long about 4.276mm shares or 5.83% of shares out.
There should be some index selling, and some Murakami Overhang. There may be more overhang at recent prices.

Adani Enterprises FPO Update: Hindenburg, Anchors, and Righteous Indignation

The Adani Enterprises (ADE IN) Further Public Offering (“FPO”) expected to raise Rs 200bn has its first leg publicly complete with anchor investors taking Rs 59.849bn.
Noted shortseller Hindenburg Research published a long report suggesting Adani Enterprises and indeed the Adani Group were over-priced according to fundamentals and were the result of a “con.”
Now the book build starts. Deal structure and Adani Group CFO comments continue to suggest that Liquidity is a Bug, not a Feature.

Acotec (6669 HK): Boston Scientific’s HK$20 Partial Offer Unconditional

As expected, Acotec Scientific Holdings (6669 HK)’s partial offer from Boston Scientific (BSX US) at HK$20 per share is now unconditional. The final closing date is 9 February.
The current acceptances representing 78.59% of outstanding shares imply current proration is 82.71%. Current pro-ration suggests CA Medtech post-offer shares will be counted towards the public float.
Based on the current proration of 82.71% and at the last close price of HK$19.78 per share, the breakeven price is HK$19.00 per share.

Where To Go With Warrego?

By David Blennerhassett

It’s a fair bet Hancock Prospecting and Mineral Resources (MIN AU) are actively discussing the final stages for Warrego Energy (WGO AU) behind the scenes.
It is unlikely MinRes aggressively builds a ~19% stake in a company subject to a two-way takeover battle, and declares its position “strategic” with no intention of making an Offer.
This stake may be a bargaining chip from MinRes to keep Hancock on the sidelines in its tilt for Norwest Energy NL (NWE AU).

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Jan 26

Daily Brief TMT/Internet: Sea Ltd, Alibaba (ADR), Samsung Electronics Pref Shares, Broadcom Limited, Juniper Networks, Godaddy Inc Class A, Sunpower Corp and more

By Smartkarma Daily Briefs | Daily Briefs, TMT/Internet

In today’s briefing:

Sea Ltd: Game Over
Alibaba (BABA US): What Is Next After Strong Rally?
Samsung Electronics 1P Pushed to a Substantial Diversion (Below -2σ) Today
Broadcom Inc: New Test Solutions With Rohde & Schwarz & Other Drivers
Juniper Networks: Agreement With Powerco & Other Developments
GoDaddy Inc: Major Drivers, Financial Forecasts, DCF & Comparables Valuation, Key Risks (01/23)
SunPower Corporation: Partnership With General Motors & Other Drivers

Sea Ltd: Game Over

By Oshadhi Kumarasiri

We don’t see a way for Sea Ltd (SE US)’s e-commerce business to turn profitable in the next few years.
For the moment, the Digital-Entertainment segment is capable of absorbing most of e-commerce losses, but we are expecting the segment profitability to fall 70% to $135m per-quarter over the-next two-years.
Once that happens, we think it will be game over for Sea Ltd.

Alibaba (BABA US): What Is Next After Strong Rally?

By Eric Chen

Bullish sentiments doubled BABA share price post 20th Party congress, as investors look beyond a soft December quarter and focus on re-opening prospects and flashing regulatory green lights.
Expect single-Digit GMV growth, more disciplined OPEX and hence margin recovery to generate RMB180 billion non-GAAP net profit for BABA by FY25. Materializing fundamental recovery will support continued re-rating.
That said, we also see headwinds to multiple expansion and expect 18-20x PER (among lowest in sector) for FY25, implying 21%/28% compounded annual return over FY23-25.

Samsung Electronics 1P Pushed to a Substantial Diversion (Below -2σ) Today

By Sanghyun Park

SamE PREF’s relative underperformance compared to ORD has been getting a bit worse lately. And finally, today, it went down below -2.0σ on a 20-day moving average.
This much diversion is the first in recent months, and the pref discount is close to last year’s peak. The dividend yield difference is also the widest in recent years.
The current diversion appears to be a byproduct of the SamE overbuying amid the recent market rally, and we should expect a quick reversion.

Broadcom Inc: New Test Solutions With Rohde & Schwarz & Other Drivers

Broadcom delivered a strong result in the last quarter with revenues growing 21% year-on-year, surpassing Wall Street expectations.
This growth was driven by the company’s strong partnerships and increased R&D investments that enabled accelerated adoption of its new-generation technologies.
In the quarter, semiconductor solution revenue and infrastructure software revenue grew.

Juniper Networks: Agreement With Powerco & Other Developments

Juniper’s stock has seen good upward momentum with its results around the corner.
The company had delivered better-than-expected results in the last quarter with its total revenues as well as earnings exceeding Wall Street expectations.
The cloud business of Juniper also delivered solid quarterly result with revenue growth.

GoDaddy Inc: Major Drivers, Financial Forecasts, DCF & Comparables Valuation, Key Risks (01/23)

GoDaddy delivered a mixed set of results for the last quarter.
However, it did manage an earnings beat which was largely a result of the robust consumer retention.
This quarter, GoDaddy launched free SSL on almost all innovative web hosting plans in its major markets.

SunPower Corporation: Partnership With General Motors & Other Drivers

SunPower delivered an all-around beat in the last quarter as the value of the company’s storage and solar systems continues to rise with the rise in utility rates.
Consumer demand in the quarter continues to be quite strong and it added 23,1000 new customers this quarter which displays a persistent level of robust consumer demand for residential solar, particularly SunPower.
We provide the stock of SunPower with an ‘Outperform’ rating and a revision in the target price.

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Jan 26

Daily Brief Health Care: Olympus Corp, Osstem Implant, Mankind Pharma, Ramkhamhaeng Hospital, Krishna Institute of Medical Sciences, CanSino Biologics Inc, Basilea Pharmaceutica Ag, Aft Pharmaceuticals and more

By Smartkarma Daily Briefs | Daily Briefs, Healthcare

In today’s briefing:

The Olympus Peer-Relative Crash – Due to ADR Cancellation Overhang?
MBK/Unison Capital Korea Do a Deal for Osstem Implant (048260 KS) Thwarting Activist KCGI
Mankind Pharma Pre-IPO – The Positives – Diverse Portfolio with Steady past Performance
Quiddity Leaderboard for Thailand SET50 Jun 23:Ramkhamhaeng Hospital Is an Interesting Case
Krishna Institute of Medical Sciences (KIMS IN): Improving Operations; Expansion to Drive Growth
Pre-IPO CanSino Biologics – 2022 Annual Results May Be Ugly as MCV4 Commercialization Hit a Snag
Basilea Pharmaceutica – Strong execution resulting in operating profitability
AFT Pharmaceuticals – Maxigesic IV expands into East European markets

The Olympus Peer-Relative Crash – Due to ADR Cancellation Overhang?

Olympus has been sold down relatively hard in the last couple of months. At the same time, we are at crunch time for the cancellation of the US ADR.
This may create short-term overhang, but the medium-term overhang from substantial foreign net buying in H1 when USDJPY was going up may be larger.
This insight looks at the relative performance vs Peers, vs forward earnings expectations, USDJPY, etc.

MBK/Unison Capital Korea Do a Deal for Osstem Implant (048260 KS) Thwarting Activist KCGI

Just over a year ago, leading Korean dental implant and dentistry supply company Osstem Implant (048260 KS) announced the largest-ever embezzlement case in Korea. The stock was suspended.
There were fears about forced selling by the founder, and PE funds circled. Activist KCGI probably bought in Q3 but built a 5+% stake by end-December 2022.
Korean PE Firms MBK and Unison Capital have now launched an MBO-style Tender Offer to buy 2.4-11.2mm shares in the company at a sharp premium to the pre-activism undisturbed price.

Mankind Pharma Pre-IPO – The Positives – Diverse Portfolio with Steady past Performance

Mankind Pharma is looking to raise about US$1bn in its upcoming India IPO.
MP is a pharmaceutical company engaged in developing, manufacturing and marketing a range of pharmaceutical formulations across various acute and chronic therapeutic areas, as well as several consumer healthcare products.
In this note, we talk about the positive aspects of the deal.

Quiddity Leaderboard for Thailand SET50 Jun 23:Ramkhamhaeng Hospital Is an Interesting Case

By Janaghan Jeyakumar, CFA

In this insight, we take a look at the potential ADDs/DELs for the SET50 index rebalance in June 2023.
Based on the latest available data, I expect 3 ADDs/DELs but there are multiple names lurking close to the border.
Srisawad (SAWAD TB) and Sansiri Public (SIRI TB) are leading the SET50 and SET100 Reserve Lists respectively and could become intra-review ADDs if the DTAC-TRUE merger closes in 1H 2023.

Krishna Institute of Medical Sciences (KIMS IN): Improving Operations; Expansion to Drive Growth

By Tina Banerjee

Krishna Institute of Medical Sciences (KIMS IN) is seeing a continued business recovery reflected in improving operating metrics. In Q2FY23, KIMS reported record high quarterly sales, EBITDA, and footfall.
KIMS is following a disciplined growth strategy and plans to grow into markets that are adjacent to the current core markets of Andhra Pradesh and Telangana.
KIMS has set foot in a new market of Maharashtra, outside of its core market. With lower margins from acquired assets than matured hospitals, KIMS has scope for margin improvement.

Pre-IPO CanSino Biologics – 2022 Annual Results May Be Ugly as MCV4 Commercialization Hit a Snag

By Xinyao (Criss) Wang

CanSino Biologics Inc (6185 HK) disclosed plans to publicly list in Switzerland, but the story of the fourth dose of COVID-19 vaccine is difficult to boost its stock price/valuation.
According to CanSino’s management,MCV4’s commercialization faced some challenges, which means 2022 annual performance may not be good. 2021 would probably be a high point of CanSino’s performance in recent years.
Share price could pullback when 2022 annual report is released, which offers a better opportunity if investors want to go long, considering CanSino’s long-term investment value analyzed in prior insights.

Basilea Pharmaceutica – Strong execution resulting in operating profitability

By Edison Investment Research

On the heels of management’s January upward guidance revision, continued strong execution of Basilea’s outlined strategic plan (February 2022) has positioned the company to report (on a preliminary basis) its first year of operating and net profit. Management anticipates FY22 operating profit of c CHF18m, up from the previously guided CHF10–15m loss. We view this as a notable milestone for Basilea, which was achieved despite overall macro market challenges. The company continues to address an important unmet need in anti-infectives and its worldwide traction of the company’s antifungal product, Cresemba (isavuconazole), is a key driver of revenue. In FY23, we expect the company to maximize the potential of Zevtera in the US (new drug application filing anticipated in H123) while also refilling its development pipeline. Our valuation and financial estimates are under review and are expected to be updated following the release of full FY22 results on February 14.

AFT Pharmaceuticals – Maxigesic IV expands into East European markets

By Edison Investment Research

AFT Pharmaceuticals has announced an exclusive licensing and distribution agreement for the Maxigesic intravenous (IV) formulation with Salus Pharmaceuticals (a Slovenia-based wholesaler of pharmaceutical products) for nine Eastern European countries across the Balkan and Baltic regions. Maxigesic IV is already registered in five of the nine countries, with launches planned in CY23. AFT will also file registration applications for the remaining countries during the year. Maxigesic IV is registered in 41 countries globally and has been launched in more than 10, including the key markets of France and Italy in November 2022. As AFT awaits Maxigesic IV approval in the US, we see this new agreement as an encouraging step towards expanding its international presence, in line with its strategic priorities for CY23.

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Jan 26

Daily Brief Industrials: Kepco Engineering & Construction, Toshiba Corp, Samsung C&T, Nidec Corp, Adani Enterprises, Sany Heavy Industry and more

By Smartkarma Daily Briefs | Daily Briefs, Industrials

In today’s briefing:

Solactive Global Uranium & Nuclear Components Index Rebalance: 6 Adds, 5 Deletes
Toshiba – Preparing for 2QFY23
Korean Holdcos Vs Opcos Gap Spreads Opportunities in 1Q 2023
Nidec (6594): A V-Shaped Recovery Cannot Be Taken for Granted
Adani Enterprises US$2.4bn FPO – Updates, Pricing, Structure, Anchor and Some More
Sany Heavy: Buy

Solactive Global Uranium & Nuclear Components Index Rebalance: 6 Adds, 5 Deletes

Solactive has announced the constituent changes for the Global Uranium & Nuclear Components Index. There are 6 adds and 5 deletes with implementation at the close on 31 January.
Estimated one-way turnover is in excess of 12% and will result in a one-way trade of US$207m. There are 11 stocks with estimated passive flows greater than 5x ADV.
Some of the inclusions have had BIG rallies over the last couple of months and there could be profit taking on those names in the next few days.

Toshiba – Preparing for 2QFY23

By Mio Kato

We have turned slightly more bearish on Toshiba’s near term fundamental prospects as we now have concerns about the industrial side of its semiconductor business.
The re-emergence of a WDC-Kioxia deal and the likelihood of a change in BOJ policy make us wonder whether bankers might want to wait a little on financing.
As such, while recent weakness makes an aggressively negative view difficult we do not feel that upside risks are particularly threatening either.

Korean Holdcos Vs Opcos Gap Spreads Opportunities in 1Q 2023

By Douglas Kim

In this insight, we highlight the pricing gap divergences of the major Korean holdcos and opcos in 1Q 2023.
Of the 33 pair trades, 2/3 of them involved holdcos outperforming opcos in the past year and 1/3 of them involved opcos outperforming holdcos in the same period.
We highlight 33 pair trades that involve Korean holdcos and opcos.

Nidec (6594): A V-Shaped Recovery Cannot Be Taken for Granted

By Scott Foster

Nidec is headed into the red due to market disruption in China, restructuring charges and stagflation.
The first two of these factors should be temporary, but the third points to longer term pressure on margins. Competition in EV motors is another problem that won’t go away.
In a weak economy characterized by stagflation, it is too early to turn bullish.

Adani Enterprises US$2.4bn FPO – Updates, Pricing, Structure, Anchor and Some More