All Posts By

Smartkarma Daily Briefs

Jul 04
0

Macro: The Seven Reasons Why This Cycle Is Different and more

By | Daily Briefs, Macro

In today’s briefing:

  • The Seven Reasons Why This Cycle Is Different
  • When Does The Pain End?

The Seven Reasons Why This Cycle Is Different

By Cam Hui

  • The main reason why stock prices haven’t skidded further in the face of earnings downgrades is because this cycle is different from others.
  • This has been an extraordinarily rapid rate hike cycle. Not only has the market discounted a recession, it may already be discounting Fed easing in 2023.
  • The acid test for market psychology will be Q2 earnings season. More immediately, the June Employment Report will serve as another guidepost for the trajectory of monetary policy.

When Does The Pain End?

By Cam Hui

  • The market is very worried about falling growth and an inflation rate that’s slow to decelerate.
  • Few have considered a scenario of a combination of small improvements in supply and demand destruction from higher rates is just enough to soft-land the economy.
  • The rise of recession hysteria has meant that risk/reward is becoming tilted to the upside for equity investors.

Before it’s here, it’s on Smartkarma

Learn More
Jul 04
0

Consumer: Seven & I Holdings, Taste Gourmet Group, Tassal, China Tourism Group Duty Free Corp Ltd, Sawit Sumbermas Sarana and more

By | Consumer, Daily Briefs

In today’s briefing:

  • Seven & I Sale of Sogo Seibu Moves Closer
  • Taste Gourmet: Terrible Q4 2022, Q1 2023 off to a Good Start
  • Tassal: Cooke Remains a Determined Suitor
  • CTG Duty Free (601888 CH) Pre-IPO: Revival of H-Share IPO
  • Morning Views Asia: China South City, Country Garden Holdings Co

Seven & I Sale of Sogo Seibu Moves Closer

By Michael Causton

  • Initial reports suggest that Fortress Investment, part of the Softbank group of funds, is now the frontrunner in negotiations to acquire Sogo Seibu department stores from Seven & I.
  • Reports suggest Fortress is already in discussions with privately owned retailer Yodobashi Camera to take over management of the chain’s better stores, beginning with Seibu Ikebukuro.
  • The loss of ¥500 billion or so in turnover won’t be missed not will the ¥8.8 billion losses but activist investors won’t stop there.

Taste Gourmet: Terrible Q4 2022, Q1 2023 off to a Good Start

By Sameer Taneja

  • Taste Gourmet Group (8371 HK) reported worse numbers than we expected for Q4 2022 during the restrictions; Checks indicate recovery in Q1 2023 is far better than our expectations. 
  • Cash declining from 96 to 65 mn HKD QoQ resulted in the company having to declare a smaller final dividend of 1.6 HKD cents ( interim: 4 HKD cents ) 
  • Trading at 5.4x FY23 and 11.1% dividend yield (assuming a 60% payout ratio), the company represents an excellent investment opportunity with >100% upside at the very least.

Tassal: Cooke Remains a Determined Suitor

By Arun George

  • On 1 July, Cooke, the spurned suitor, disclosed that it further increased its stake from 5.40% to 7.60% at an average price of A$4.59 per share. 
  • The Tassal (TGR AU) Board decided not to engage with Cooke as its third offer of A$4.85 per share did not reflect the fundamental value of the business. 
  • Cooke’s recent actions suggest that it will not be easily deterred. We think that it is likely that Cooke returns with another offer which will force the Board to engage.

CTG Duty Free (601888 CH) Pre-IPO: Revival of H-Share IPO

By Osbert Tang, CFA

  • China Tourism Group Duty Free Corp Ltd (601888 CH) has revived its H-share IPO plan by re-submitting the Application Proof to the Hong Kong Stock Exchange on 1 Jul. 
  • While there is no material changes in the Proof, weaker 1Q22 result, negative impact of pandemic and new agreements signed with Guangzhou Airport are recent developments that should be noted.
  • We think CDFC’s H-shares, based on similar valuation before cancellation of the previous IPO plan, look less attractive given the sharp pull back of its peers in Hong Kong. 

Morning Views Asia: China South City, Country Garden Holdings Co

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.

Before it’s here, it’s on Smartkarma

Learn More
Jul 04
0

China: Gcl Poly Energy Holdings Limited, Taste Gourmet Group, Tianqi Lithium, Microport Scientific, China Tourism Group Duty Free Corp Ltd, Sawit Sumbermas Sarana and more

By | China, Daily Briefs

In today’s briefing:

  • FTSE All-World/​​All-Cap Index Rebalance Preview: Some Big Changes in China
  • Taste Gourmet: Terrible Q4 2022, Q1 2023 off to a Good Start
  • Weekly Deals Digest (03 Jul) – Tianqi Lithium, Thai Life, Li Auto, Link Admin, Tassal, DTAC/True
  • Microport Scientific (853.HK)-The “unique” Development Mode Leads to Lower-Than-Expected Performance
  • CTG Duty Free (601888 CH) Pre-IPO: Revival of H-Share IPO
  • Morning Views Asia: China South City, Country Garden Holdings Co

FTSE All-World/​​All-Cap Index Rebalance Preview: Some Big Changes in China

By Brian Freitas

  • The price review period for the FTSE All-World/All-Cap September 2022 SAIR ended on 30 June. The changes are expected to be announced on 19 August and implemented on 19 September.
  • There are a lot of potential inclusions to the indices for China -some changes are a result of stocks being included in Northbound Stock Connect.
  • Gcl Poly Energy Holdings Limited (3800 HK) is the largest potential inclusion (in terms of passive flow) in the index following resumption of trading in November 2021.

Taste Gourmet: Terrible Q4 2022, Q1 2023 off to a Good Start

By Sameer Taneja

  • Taste Gourmet Group (8371 HK) reported worse numbers than we expected for Q4 2022 during the restrictions; Checks indicate recovery in Q1 2023 is far better than our expectations. 
  • Cash declining from 96 to 65 mn HKD QoQ resulted in the company having to declare a smaller final dividend of 1.6 HKD cents ( interim: 4 HKD cents ) 
  • Trading at 5.4x FY23 and 11.1% dividend yield (assuming a 60% payout ratio), the company represents an excellent investment opportunity with >100% upside at the very least.

Weekly Deals Digest (03 Jul) – Tianqi Lithium, Thai Life, Li Auto, Link Admin, Tassal, DTAC/True

By Arun George

Microport Scientific (853.HK)-The “unique” Development Mode Leads to Lower-Than-Expected Performance

By Xinyao (Criss) Wang

  • Due to the centralized procurement in PRC market and decreasing volume of operations in overseas markets during pandemic, Microport Scientific (853 HK)’s 2021 performance missed expectations. 
  • Even if Microport could finally digest the negative impact of centralized procurement, its “unique” development mode would still put pressure and uncertainties on future performance/outlook, leading to lower-than-expected results.
  • Our earnings estimate of Microport in 2022 could be about HK$-1.7, and revenue estimate could be about HK$7.3 billion. It’s quite possible that the Company will not end up profitable.

CTG Duty Free (601888 CH) Pre-IPO: Revival of H-Share IPO

By Osbert Tang, CFA

  • China Tourism Group Duty Free Corp Ltd (601888 CH) has revived its H-share IPO plan by re-submitting the Application Proof to the Hong Kong Stock Exchange on 1 Jul. 
  • While there is no material changes in the Proof, weaker 1Q22 result, negative impact of pandemic and new agreements signed with Guangzhou Airport are recent developments that should be noted.
  • We think CDFC’s H-shares, based on similar valuation before cancellation of the previous IPO plan, look less attractive given the sharp pull back of its peers in Hong Kong. 

Morning Views Asia: China South City, Country Garden Holdings Co

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.

Before it’s here, it’s on Smartkarma

Learn More
Jul 04
0

Event-Driven: Gcl Poly Energy Holdings Limited, Seven & I Holdings, Link Administration, SK IE Technology, Australian Unity Office Fund, Tassal and more

By | Daily Briefs, Event-Driven

In today’s briefing:

  • FTSE All-World/​​All-Cap Index Rebalance Preview: Some Big Changes in China
  • Seven & I Sale of Sogo Seibu Moves Closer
  • Merger Arb Mondays (04 Jul) – Link Admin, Ramsay, DTAC/True, Australian Unity Office Fund, Yashili
  • WISE Theme Indexes (TIGER ETFs): Rebalancing Flow Estimations
  • AOF Trading at the Dividend-Adjusted Unaffected Price
  • Tassal: Cooke Remains a Determined Suitor

FTSE All-World/​​All-Cap Index Rebalance Preview: Some Big Changes in China

By Brian Freitas

  • The price review period for the FTSE All-World/All-Cap September 2022 SAIR ended on 30 June. The changes are expected to be announced on 19 August and implemented on 19 September.
  • There are a lot of potential inclusions to the indices for China -some changes are a result of stocks being included in Northbound Stock Connect.
  • Gcl Poly Energy Holdings Limited (3800 HK) is the largest potential inclusion (in terms of passive flow) in the index following resumption of trading in November 2021.

Seven & I Sale of Sogo Seibu Moves Closer

By Michael Causton

  • Initial reports suggest that Fortress Investment, part of the Softbank group of funds, is now the frontrunner in negotiations to acquire Sogo Seibu department stores from Seven & I.
  • Reports suggest Fortress is already in discussions with privately owned retailer Yodobashi Camera to take over management of the chain’s better stores, beginning with Seibu Ikebukuro.
  • The loss of ¥500 billion or so in turnover won’t be missed not will the ¥8.8 billion losses but activist investors won’t stop there.

Merger Arb Mondays (04 Jul) – Link Admin, Ramsay, DTAC/True, Australian Unity Office Fund, Yashili

By Arun George

WISE Theme Indexes (TIGER ETFs): Rebalancing Flow Estimations

By Sanghyun Park

  • Among the local theme indexes in Korea, we have three noteworthy ones for July. They are the WISE theme indexes. They will all rebalance on July 15.
  • Due to some constituents’ recent significant price movements, we can now expect some notable passive flows.
  • These names are worthy of our attention: SKIET, Solus Advanced, Kangwon Land, Hanatour, T’way Air, Yong Pyong Resort, HYBE, CJ ENM, and Studio Dragon.

AOF Trading at the Dividend-Adjusted Unaffected Price

By Arun George

  • Australian Unity Office Fund (AOF AU) has extended Aliro’s exclusive due diligence to 15 July. Shares slid 1.8% on concerns of Aliro lowering the offer or walking away. 
  • Encouragingly, Aliro confirmed its intention to pursue the proposal at a price not lower than the offer price and will return with an updated proposal within two weeks.
  • The offer price (including Sep distribution) of A$2.465 is 14.7% above the last close. The downside is low as the shares are trading in line with the dividend-adjusted unaffected price. 

Tassal: Cooke Remains a Determined Suitor

By Arun George

  • On 1 July, Cooke, the spurned suitor, disclosed that it further increased its stake from 5.40% to 7.60% at an average price of A$4.59 per share. 
  • The Tassal (TGR AU) Board decided not to engage with Cooke as its third offer of A$4.85 per share did not reflect the fundamental value of the business. 
  • Cooke’s recent actions suggest that it will not be easily deterred. We think that it is likely that Cooke returns with another offer which will force the Board to engage.

Before it’s here, it’s on Smartkarma

Learn More
Jul 04
0

Equity Capital Markets: Tianqi Lithium, China Tourism Group Duty Free Corp Ltd and more

By | Daily Briefs, ECM

In today’s briefing:

  • Weekly Deals Digest (03 Jul) – Tianqi Lithium, Thai Life, Li Auto, Link Admin, Tassal, DTAC/True
  • CTG Duty Free (601888 CH) Pre-IPO: Revival of H-Share IPO

Weekly Deals Digest (03 Jul) – Tianqi Lithium, Thai Life, Li Auto, Link Admin, Tassal, DTAC/True

By Arun George

CTG Duty Free (601888 CH) Pre-IPO: Revival of H-Share IPO

By Osbert Tang, CFA

  • China Tourism Group Duty Free Corp Ltd (601888 CH) has revived its H-share IPO plan by re-submitting the Application Proof to the Hong Kong Stock Exchange on 1 Jul. 
  • While there is no material changes in the Proof, weaker 1Q22 result, negative impact of pandemic and new agreements signed with Guangzhou Airport are recent developments that should be noted.
  • We think CDFC’s H-shares, based on similar valuation before cancellation of the previous IPO plan, look less attractive given the sharp pull back of its peers in Hong Kong. 

Before it’s here, it’s on Smartkarma

Learn More
Jul 04
0

Financials: Tokyo Stock Exchange Tokyo Price Index Topix, Bitcoin and more

By | Daily Briefs, Financials

In today’s briefing:

  • Reason for the Declining Concentration of June AGM Dates in Japan Is Likely Mixed
  • On-Chain Financial Analysis

Reason for the Declining Concentration of June AGM Dates in Japan Is Likely Mixed

By Aki Matsumoto

  • While we want to believe that “increased awareness of corporate governance has led to downward trend in the concentration of AGM dates,” in reality they were spread over 3 days.
  • The use of the platform for electronic exercise of voting rights has made progress since it was included in the listing criteria for the prime market.
  • The provision of convocation notices in English has not made much progress since it was not specifically stated in the Corporate Governance Code, which was included in the listing criteria.

On-Chain Financial Analysis

By Etherbridge

  • On-chain analysis can provide investors with an edge when it comes to assessing where the market is and where it may go, providing better risk/reward opportunities than someone who is just purely looking at price. 
  • However, most of the data that is currently available focuses on layer one protocols. This leaves a huge gap when it comes to assessing projects further up the blockchain stack.
  • This is where something like Token Terminal fits in. Token Terminal is a platform that aggregates financial data on blockchains and the decentralised applications that run on a blockchain. 

Before it’s here, it’s on Smartkarma

Learn More
Jul 04
0

Most Read: Gcl Poly Energy Holdings Limited, Seven & I Holdings, Link Administration, SK IE Technology and more

By | Daily Briefs, Most Read

In today’s briefing:

  • FTSE All-World/​​All-Cap Index Rebalance Preview: Some Big Changes in China
  • Index Rebalance & ETF Flow Recap: FTSE JP, HSTECH, HSCEI, PCOMP, GCL Tech, Tencent, Tianqi Lithium
  • Seven & I Sale of Sogo Seibu Moves Closer
  • Merger Arb Mondays (04 Jul) – Link Admin, Ramsay, DTAC/True, Australian Unity Office Fund, Yashili
  • WISE Theme Indexes (TIGER ETFs): Rebalancing Flow Estimations

FTSE All-World/​​All-Cap Index Rebalance Preview: Some Big Changes in China

By Brian Freitas

  • The price review period for the FTSE All-World/All-Cap September 2022 SAIR ended on 30 June. The changes are expected to be announced on 19 August and implemented on 19 September.
  • There are a lot of potential inclusions to the indices for China -some changes are a result of stocks being included in Northbound Stock Connect.
  • Gcl Poly Energy Holdings Limited (3800 HK) is the largest potential inclusion (in terms of passive flow) in the index following resumption of trading in November 2021.

Index Rebalance & ETF Flow Recap: FTSE JP, HSTECH, HSCEI, PCOMP, GCL Tech, Tencent, Tianqi Lithium

By Brian Freitas

Seven & I Sale of Sogo Seibu Moves Closer

By Michael Causton

  • Initial reports suggest that Fortress Investment, part of the Softbank group of funds, is now the frontrunner in negotiations to acquire Sogo Seibu department stores from Seven & I.
  • Reports suggest Fortress is already in discussions with privately owned retailer Yodobashi Camera to take over management of the chain’s better stores, beginning with Seibu Ikebukuro.
  • The loss of ¥500 billion or so in turnover won’t be missed not will the ¥8.8 billion losses but activist investors won’t stop there.

Merger Arb Mondays (04 Jul) – Link Admin, Ramsay, DTAC/True, Australian Unity Office Fund, Yashili

By Arun George

WISE Theme Indexes (TIGER ETFs): Rebalancing Flow Estimations

By Sanghyun Park

  • Among the local theme indexes in Korea, we have three noteworthy ones for July. They are the WISE theme indexes. They will all rebalance on July 15.
  • Due to some constituents’ recent significant price movements, we can now expect some notable passive flows.
  • These names are worthy of our attention: SKIET, Solus Advanced, Kangwon Land, Hanatour, T’way Air, Yong Pyong Resort, HYBE, CJ ENM, and Studio Dragon.

Before it’s here, it’s on Smartkarma

Learn More
Jul 04
0

Japan: Seven & I Holdings, Tokyo Stock Exchange Tokyo Price Index Topix, Inpex Corp, Mani Inc and more

By | Daily Briefs, Japan

In today’s briefing:

  • Seven & I Sale of Sogo Seibu Moves Closer
  • Reason for the Declining Concentration of June AGM Dates in Japan Is Likely Mixed
  • INPEX (1605) | The Cheapest Oil Stock in the World
  • Mani Inc (7730 JP): Q2 Result Exceeds Expectation Aided by Demand Recovery; FY22 Guidance Reiterated

Seven & I Sale of Sogo Seibu Moves Closer

By Michael Causton

  • Initial reports suggest that Fortress Investment, part of the Softbank group of funds, is now the frontrunner in negotiations to acquire Sogo Seibu department stores from Seven & I.
  • Reports suggest Fortress is already in discussions with privately owned retailer Yodobashi Camera to take over management of the chain’s better stores, beginning with Seibu Ikebukuro.
  • The loss of ¥500 billion or so in turnover won’t be missed not will the ¥8.8 billion losses but activist investors won’t stop there.

Reason for the Declining Concentration of June AGM Dates in Japan Is Likely Mixed

By Aki Matsumoto

  • While we want to believe that “increased awareness of corporate governance has led to downward trend in the concentration of AGM dates,” in reality they were spread over 3 days.
  • The use of the platform for electronic exercise of voting rights has made progress since it was included in the listing criteria for the prime market.
  • The provision of convocation notices in English has not made much progress since it was not specifically stated in the Corporate Governance Code, which was included in the listing criteria.

INPEX (1605) | The Cheapest Oil Stock in the World

By Mark Chadwick

  • Oil prices have had a good run, and so have oil stocks, but INPEX can still double from here
  • High oil prices and rising production will generate strong operating cash flow growth
  • Total shareholder returns will be close to 10% this year, meanwhile the valuation languishes at 0.6x P/B, way below global peers

Mani Inc (7730 JP): Q2 Result Exceeds Expectation Aided by Demand Recovery; FY22 Guidance Reiterated

By Tina Banerjee

  • Mani Inc (7730 JP) reported Q2FY22 revenue ahead of guidance, mainly driven by demand recovery in the surgical segment and positive effect of foreign exchange. However, profitability declined year-over-year.
  • Despite revenue beat in H1FY22, management reiterated FY22 guidance due to geographical risk. Outlook seems to be uncertain for China and India, which together contribute 33% of total revenue.
  • Mani shares plunged 20% since I published bearish note on the company in January 2022. Investors should avoid Mani due to its uncertain revenue outlook and deteriorating profitability in short-term.

Before it’s here, it’s on Smartkarma

Learn More
Jul 04
0

South Korea: SK IE Technology and more

By | Daily Briefs, South Korea

In today’s briefing:

  • WISE Theme Indexes (TIGER ETFs): Rebalancing Flow Estimations

WISE Theme Indexes (TIGER ETFs): Rebalancing Flow Estimations

By Sanghyun Park

  • Among the local theme indexes in Korea, we have three noteworthy ones for July. They are the WISE theme indexes. They will all rebalance on July 15.
  • Due to some constituents’ recent significant price movements, we can now expect some notable passive flows.
  • These names are worthy of our attention: SKIET, Solus Advanced, Kangwon Land, Hanatour, T’way Air, Yong Pyong Resort, HYBE, CJ ENM, and Studio Dragon.

Before it’s here, it’s on Smartkarma

Learn More
Jul 04
0

United States: Crude Oil, Equinix Inc, Gold, Bitcoin and more

By | Daily Briefs, United States

In today’s briefing:

  • Bulls & Bears: Near-Term and Short-Term View on Oil Prices
  • Equinix: Please Don’t Fall Into This Trap
  • Buy Gold at 1,790/70
  • On-Chain Financial Analysis

Bulls & Bears: Near-Term and Short-Term View on Oil Prices

By Vandana Hari

  • After four months of rallying under supply-related bullishness, crude has begun to yield downward pressure from recessionary fears.
  • It is not just sentiment; macro-economic data, including consumer confidence readings, are starting to show weakness.
  • If Russia continues to successfully reroute its crude being rejected by the EU into Asia, supply concerns will retreat somewhat, bringing the future of demand into sharper focus.

Equinix: Please Don’t Fall Into This Trap

By Pearl Gray Equity and Research

  • Equinix (NASDAQ:EQIX) is a data center REIT with 244 properties under management across 69 metros, 30 countries, and six continents.
  • The REIT hosts more than 10,000 companies in its ecosystem, with approximately 50% of them being Fortune 500 firms.
  • Furthermore, the company’s cloud-based exposure reaches 3,000 companies that are inextricably linked to an industry with a CAGR (compound annual growth rate) of 15.7%, which is well above annual GDP growth.

Buy Gold at 1,790/70

By Thomas Schroeder

  • Tactical bull turn for gold in the making as we reverse from short to long at our 1,790/70 target into a wave 5 terminal low.
  • Gold’s recovery/rally targets come in at 1,870 and 1,915 but a typical bounce cycle may fall between these levels.
  • Weaker yield and a USD rally pause will help support a low/rally in gold on the back of a marginally better equity risk appetite for July (bear market bounce).

On-Chain Financial Analysis

By Etherbridge

  • On-chain analysis can provide investors with an edge when it comes to assessing where the market is and where it may go, providing better risk/reward opportunities than someone who is just purely looking at price. 
  • However, most of the data that is currently available focuses on layer one protocols. This leaves a huge gap when it comes to assessing projects further up the blockchain stack.
  • This is where something like Token Terminal fits in. Token Terminal is a platform that aggregates financial data on blockchains and the decentralised applications that run on a blockchain. 

Before it’s here, it’s on Smartkarma

Learn More