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Smartkarma Daily Briefs

Aug 15
0

Daily Brief Energy/Materials: Piedmont Lithium and more

By | Daily Briefs, Energy & Materials Sector

In today’s briefing:

  • S&P/​​​​​​​ASX Quiddity Leaderboard Sep 2022: Potential Last Minute Surprises

S&P/​​​​​​​ASX Quiddity Leaderboard Sep 2022: Potential Last Minute Surprises

By Janaghan Jeyakumar, CFA

  • With the Reference Period for the September 2022 Rebalance nearing its end, we take a final look at the potential index changes for ASX 300, 200, 100, 50, and 20.
  • AVZ Minerals (AVZ AU) and Firefinch Ltd (FFX AU) are both members of the ASX Index family and are currently suspended from trading. There could be index consequences here.
  • Based on current data, I expect 7 ADDs/DELs for the ASX 200 Index and 22 ADDs and 18 DELs for the ASX 300 Index.

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Aug 15
0

Daily Brief Health Care: Huadong Medicine Co Ltd A and more

By | Daily Briefs, Healthcare

In today’s briefing:

  • Huadong Medicine (000963.CH) 2022H1 – Huadong Is Back on Track. If Shares Pullback, Then Be Long

Huadong Medicine (000963.CH) 2022H1 – Huadong Is Back on Track. If Shares Pullback, Then Be Long

By Xinyao (Criss) Wang

  • Huadong released encouraging 2022H1 results. After a significant decline due to the loss of VBP bid for core varieties, Huadong is out of trouble and back on track now.
  • The future profit contribution would be on medical cosmetology and industrial microorganisms businesses. For 2022 forecast, revenue YoY growth is below 10%, and net profit YoY growth is above 15%.
  • Due to unfriendly macro environment, Huadong’s share price could face a correction. But based on its promising outlook, we recommend that investors could take advantage of the pullback to long.

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Aug 15
0

Daily Brief Consumer: China Tourism Group Duty Free Corp Ltd, Giordano International, Lifestyle International Holdings, The Keepers Holdings, Inc., Hyundai Mobis, Alibaba Group and more

By | Consumer, Daily Briefs

In today’s briefing:

  • China Tourism Group Duty Free (1880 HK) IPO: Offer Details, Index Inclusion, AH Premium
  • Giordano (709 HK): Offer Doc Out. Terms Declared Final
  • Merger Arb Mondays (15 Aug) – Lifestyle Intl, EVOC, Giordano, Yashili, Alliance Aviation, ResApp
  • Keepers Holdings: Exciting Soundbites From Management Call for H1 2022
  • Hyundai Mobis: Plans to Spin Off Parts & Module Units
  • CTG Duty Free (601888 CH) H-Share IPO: 2Q22/Outlook Updates and Valuation Views
  • China Internet Weekly (15Aug2022): Alibaba, Tencent, Meituan, TikTok, JD, NetEase, Dingdong

China Tourism Group Duty Free (1880 HK) IPO: Offer Details, Index Inclusion, AH Premium

By Brian Freitas

  • CTG Duty Free (1880 HK) is looking to sell up to 118.176m shares to raise up to US$2.5bn. Pricing at HK$143.5-165.5/share is a 38.6%-29.2% discount to CTG Duty Free (601888).
  • Between 32-37% of the total offer size is being taken by 9 cornerstone investors and they are locked in for 6 months from listing date (expected 25 August).
  • CTG Duty Free (1880 HK) could be added to MSCI China in November, FTSE All-World and FTSE China 50 in March. Southbound Stock Connect could come online on 19 September.

Giordano (709 HK): Offer Doc Out. Terms Declared Final

By David Blennerhassett

  • On the 23 June, the Cheng family made an underwhelming voluntary conditional Offer of $1.88/share for Giordano International (709 HK). 
  • The Offer is conditional on the family getting to more than 50% via tendering, and the Cheng’s (and concert parties) control 24.57%.  
  • The Composite Document is now out with a first close on the 5 September.  The Offer Price has now been declared final. That’s a surprise.

Merger Arb Mondays (15 Aug) – Lifestyle Intl, EVOC, Giordano, Yashili, Alliance Aviation, ResApp

By Arun George

Keepers Holdings: Exciting Soundbites From Management Call for H1 2022

By Sameer Taneja

  • The management of The Keepers Holdings, Inc. (KEEPR PM) highlighted bullish trends from their call for H1 2022 for on-premise and travel retail that bode well for H2 2022.
  • We believe the company is on the cusp of backward integration by acquiring its supplier, Bodegas William and Humbert (in Spain). We believe this is an exciting future catalyst.
  • The stock trades at 6x PE FY22e (ex-cash) with seven bn+ pesos of cash on the balance sheet representing 37% of market capitalization. We see significant upside ahead.

Hyundai Mobis: Plans to Spin Off Parts & Module Units

By Douglas Kim

  • On 12 August, it was reported in numerous local media that Hyundai Mobis (012330 KS) plans to spin off its auto parts and module business units into two separate entities. 
  • Hyundai Mobis has not formally announced these spin offs although local media mentioned that these spin off plans have recently been finalized. 
  • These spin-offs by Hyundai Mobis also are likely to be preludes to the Hyundai Mobis/Hyundai Motor Group reorganization. We remain positive on Hyundai Mobis. 

CTG Duty Free (601888 CH) H-Share IPO: 2Q22/Outlook Updates and Valuation Views

By Osbert Tang, CFA

  • At the indicated price range, or 24.8-28.6x PER for FY22F and 16.7-19.2x for FY23F, the H-share IPO of China Tourism Group Duty Free Corp (601888 CH) is not attractive enough. 
  • 2Q22 net profit is worse than it appears. Recent Sanya lockdown has wiped off half of the summer peak season which may even negatively affect demand during Golden Week.
  • Consensus forecasts are too optimistic and there may be another 15% downside. Given current macroenvironment, market volatility and earnings uncertainty, risk outweighs return even at the low-end of price range.

China Internet Weekly (15Aug2022): Alibaba, Tencent, Meituan, TikTok, JD, NetEase, Dingdong

By Ming Lu

  • Express parcels increased by 8% YoY in China in July.
  • TikTok was still the top non-game app in the world in July.
  • Meituan raised its prices of bike sharing on August 10.

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Aug 15
0

Daily Brief Financials: S&P 500, Opendoor Technologies and more

By | Daily Briefs, Financials

In today’s briefing:

  • SPX Summer Extension
  • Navigating the Housing Downturn

SPX Summer Extension

By Thomas Schroeder

  • Our summer risk cycle peak due in early August, shifted right after the SPX clear 4,200 and NDX above trendline resistance. A fresh cycle peak target lies at SPX 4,350.
  • RTY perform over the SPX makes it a top long on the breakout above 1,930 with fresh support at 1,950 and rally PT at 2,050 with risk to 2,080. 
  • SPX 4,170 pivot support is in focus with a call to buy a dip near 4,220 for that final push higher in in August.

Navigating the Housing Downturn

By subSPAC

  • iBuying giant Opendoor has benefited significantly from soaring home prices over the last eighteen months, as revenues have tripled and its asset portfolio has skyrocketed in value.
  • However, surging mortgage rates coupled with sky-high prices are leading to a steep decline in sales.
  • Potential buyers are now waiting on the sidelines for lower rates/prices, while sellers are now pulling listings until prices start climbing again.

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Aug 15
0

Most Read: Kasikornbank PCL, Swire Pacific Ltd-Cl B, Adani Green Energy, Evergreen Marine Corp, China Tourism Group Duty Free Corp Ltd, Piedmont Lithium, Giordano International and more

By | Daily Briefs, Most Read

In today’s briefing:

  • MSCI August 2022 Index Rebalance: The Last QIR Throws Up One Big Surprise
  • China Tourism Group A/H Listing – Discount Is Enticing at the Low-End
  • Swire A Vs Swire B – Regulatory Nuances REALLY Matter
  • Impact of Potential Changes to India F&O Eligibility Criteria
  • Index Rebalance & ETF Flow Recap: MSCI, S&P Global Water, TW Div+, FTSE JP, STI, OZ Minerals
  • China Tourism Group Duty Free (1880 HK) IPO: Offer Details, Index Inclusion, AH Premium
  • ECM Weekly (14th Aug 2022) – China Tourism, A/H Listing, Hongjiu Fruit, Socar, Betagro, ThaiBev, GQG
  • A-H Premium Weekly: Tianqi Lithium at New Lost Post H-Share IPO
  • S&P/​​​​​​​ASX Quiddity Leaderboard Sep 2022: Potential Last Minute Surprises
  • Giordano (709 HK): Offer Doc Out. Terms Declared Final

MSCI August 2022 Index Rebalance: The Last QIR Throws Up One Big Surprise

By Brian Freitas

  • As announced, there are 8 adds and 3 deletes for the MSCI Standard indices in Asia Pacific. To trade, there are 8 adds and 2 deletes.
  • Most of the changes are inline with what we forecast. The non-inclusion of Gcl Poly Energy Holdings Limited (3800 HK) is the big surprise, though that could change.
  • All the adds in China are potential inclusions to the FTSE All-World Index in September and that will add to the passive inflows on the stocks.

China Tourism Group A/H Listing – Discount Is Enticing at the Low-End

By Sumeet Singh

  • China Tourism Group Duty Free Corporation Limited (CDF) aims to raise around US$2.5bn in its H-share listing in Hong Kong.
  • As per Frost & Sullivan, CDF had 92.3% market share by retail revenue in China duty-free merchandise sales in 2020.
  • In this note, we talk about the deal pricing and run the deal through our ECM framework.

Swire A Vs Swire B – Regulatory Nuances REALLY Matter

By Travis Lundy

  • Yesterday Swire Pacific (A) (19 HK) (and Swire Pacific Ltd-Cl B (87 HK)) announced a buyback of shares according to the 2022 AGM mandates approved in May, limited to HK$4bn. 
  • A reader question prompted me to look more closely at the rules. There are nuances NOT covered in the announcements. So I work through them. 
  • The conclusions are surprising, and lead to one clear trading idea. 

Impact of Potential Changes to India F&O Eligibility Criteria

By Brian Freitas

  • A news report has indicated that SEBI is looking to tighten criteria used for inclusion and continued availability of stocks in the Futures & Options (F&O) segment of the market.
  • Our analysis shows 30 stocks could be deleted from the F&O segment while another 12 are close to deletion zone. If applied objectively, 22 stocks could be added to F&O.
  • Deletion from the F&O segment could see two stocks dropped from the Nifty Next 50 Index while inclusion in F&O could see two stocks added to the NIFTY Index.

Index Rebalance & ETF Flow Recap: MSCI, S&P Global Water, TW Div+, FTSE JP, STI, OZ Minerals

By Brian Freitas

China Tourism Group Duty Free (1880 HK) IPO: Offer Details, Index Inclusion, AH Premium

By Brian Freitas

  • CTG Duty Free (1880 HK) is looking to sell up to 118.176m shares to raise up to US$2.5bn. Pricing at HK$143.5-165.5/share is a 38.6%-29.2% discount to CTG Duty Free (601888).
  • Between 32-37% of the total offer size is being taken by 9 cornerstone investors and they are locked in for 6 months from listing date (expected 25 August).
  • CTG Duty Free (1880 HK) could be added to MSCI China in November, FTSE All-World and FTSE China 50 in March. Southbound Stock Connect could come online on 19 September.

ECM Weekly (14th Aug 2022) – China Tourism, A/H Listing, Hongjiu Fruit, Socar, Betagro, ThaiBev, GQG

By Sumeet Singh

  • Aequitas Research puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs.
  • On the IPO front, China Tourism launched its US$2.5bn IPO. 
  • There were no major placements this week and it likely to remain that way in the near future owing to it being earnings season.

A-H Premium Weekly: Tianqi Lithium at New Lost Post H-Share IPO

By Ke Yan, CFA, FRM

  • We analyse the changes of A/H premium on 142 stocks over the last week. The average A/H premium of 142 A/H stocks are 116.5%, increased by 3.0ppt over last week.
  • The average A/H premium changed by 3.0ppt week on week, led by Real Estate, financials, and consumer discretionary sectors.
  • We highlight A/H premium changes of Great Wall Motor, Guangzhou Auto, Hisense Home, Tianqi Lithium, Jiangxi Copper, Angang Steel, Maanshan Iron, BBMG, Alcoa, Zoomlion, Cansino, Holly Futures, and ABC. 

S&P/​​​​​​​ASX Quiddity Leaderboard Sep 2022: Potential Last Minute Surprises

By Janaghan Jeyakumar, CFA

  • With the Reference Period for the September 2022 Rebalance nearing its end, we take a final look at the potential index changes for ASX 300, 200, 100, 50, and 20.
  • AVZ Minerals (AVZ AU) and Firefinch Ltd (FFX AU) are both members of the ASX Index family and are currently suspended from trading. There could be index consequences here.
  • Based on current data, I expect 7 ADDs/DELs for the ASX 200 Index and 22 ADDs and 18 DELs for the ASX 300 Index.

Giordano (709 HK): Offer Doc Out. Terms Declared Final

By David Blennerhassett

  • On the 23 June, the Cheng family made an underwhelming voluntary conditional Offer of $1.88/share for Giordano International (709 HK). 
  • The Offer is conditional on the family getting to more than 50% via tendering, and the Cheng’s (and concert parties) control 24.57%.  
  • The Composite Document is now out with a first close on the 5 September.  The Offer Price has now been declared final. That’s a surprise.

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Aug 14
0

Daily Brief ESG: Mandatory Disclosure of Gender Wage Differentials Is Still a First Step and more

By | Daily Briefs, ESG

In today’s briefing:

  • Mandatory Disclosure of Gender Wage Differentials Is Still a First Step

Mandatory Disclosure of Gender Wage Differentials Is Still a First Step

By Aki Matsumoto

  • There is the problem that a wage gap exists between men and women even among regular employees, and that the percentage of non-regular workers is very high among women.
  • Issues to be addressed include the creation of a social infrastructure in which workers don’t have to leave jobs due to childbirth or child-rearing, and fair wages for non-regular workers.
  • Mandatory disclosure is an important step. Managers should also think of employees as partners in creating new value, rather than simply as labor, which will help to eliminate this issue.

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Aug 14
0

Daily Brief ECM: ECM Weekly (14th Aug 2022) – China Tourism and more

By | Daily Briefs, ECM

In today’s briefing:

  • ECM Weekly (14th Aug 2022) – China Tourism, A/H Listing, Hongjiu Fruit, Socar, Betagro, ThaiBev, GQG
  • Weekly Deals Digest (14 Aug) – CTG Duty Free, OZ Minerals, Lifestyle Intl., EVOC, MACA, MyDeal

ECM Weekly (14th Aug 2022) – China Tourism, A/H Listing, Hongjiu Fruit, Socar, Betagro, ThaiBev, GQG

By Sumeet Singh

  • Aequitas Research puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs.
  • On the IPO front, China Tourism launched its US$2.5bn IPO. 
  • There were no major placements this week and it likely to remain that way in the near future owing to it being earnings season.

Weekly Deals Digest (14 Aug) – CTG Duty Free, OZ Minerals, Lifestyle Intl., EVOC, MACA, MyDeal

By Arun George

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Aug 14
0

Daily Brief Thematic (Sector/Industry): China Healthcare Weekly (Aug.12)-AI Drug Discovery and more

By | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

  • China Healthcare Weekly (Aug.12)-AI Drug Discovery, License-In Mode Valuation, Pet Medical Equipment
  • GEM Weekly (12 Aug 2022): China Inflation, Malaysia GDP; Baidu, Samsung Electronics, Alibaba, Naver

China Healthcare Weekly (Aug.12)-AI Drug Discovery, License-In Mode Valuation, Pet Medical Equipment

By Xinyao (Criss) Wang

  • While AI has had a profound impact in image recognition,there has been little comparable progress in drug discovery, far from the current levels of investment and expectations in this sector.
  • The success of license-in model must be based on the appropriate valuation level. The ultimate parameter to measure a drug company based on license-in model is its cash flow status.
  • Pet medical equipment is not subject to the negative policy impact of centralized procurement. Together with high demand, it is expected to become the second growth curve of enterprises.

GEM Weekly (12 Aug 2022): China Inflation, Malaysia GDP; Baidu, Samsung Electronics, Alibaba, Naver

By Wium Malan, CFA

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Aug 14
0

Daily Brief Crypto: The Sandbox and more

By | Crypto, Daily Briefs

In today’s briefing:

  • The Sandbox

The Sandbox

By Etherbridge

  • Last week we began a Metaverse series, starting with Decentraland. Decentraland was one of the first blockchain-based Metaverses to emerge, but it sure wasn’t the last.
  • We have seen several emerge since it launched, and no other Metaverse has offered it competition quite like The Sandbox.
  • As the Metaverse comes into the mainstream, and we see the competition between centralised and decentralised heat up, it is worth exploring the different approaches and competitors that exist. 

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Aug 14
0

Daily Brief Equity Bottom-Up: Asics (7936) | Strong Performance Meets Reasonable Valuation and more

By | Daily Briefs, Equity Bottom-Up

In today’s briefing:

  • Asics (7936) | Strong Performance Meets Reasonable Valuation
  • Mayne Pharma (MYX AU): CDMO Business Sale- A Step Towards Focus Solely on Specialty Pharma
  • SOBR Safe Inc.: A Unique Technology On The Cusp Of Commercialization
  • Advanced Micro Devices ($AMD)

Asics (7936) | Strong Performance Meets Reasonable Valuation

By Mark Chadwick

  • The stock price has rallied 40% since our last note. We are happy to take profit here, hence we label this insight as Bearish 
  • The results and full year guidance hike were positive but largely currency assisted  
  • We expect that a focus on China and Direct will drive margin expansion in the medium term

Mayne Pharma (MYX AU): CDMO Business Sale- A Step Towards Focus Solely on Specialty Pharma

By Tina Banerjee

  • Mayne Pharma (MYX AU) is selling its U.S.-based CDMO business, Metrics Contract Services for $475 million. The transaction is expected to close by the end of 2022.
  • Allowing for reinvestment needs, the net proceeds from the sale will be used to repay the syndicated debt facility and return surplus capital to shareholders.
  • Combined oral contraceptive Nextstellis remains the company’s most significant commercial opportunity. While Nextstellis was launched in the U.S. in June 2021, Mayne has launched Nextstellis in Australia in July 2022.  

SOBR Safe Inc.: A Unique Technology On The Cusp Of Commercialization

By Ishan Majumdar

  • Alcohol intoxication of employees during work hours is known to result in millions of dollars’ worth of productivity loss as well as many other risks to corporations each year.
  • Given this background, SOBR Safe (NASDAQ:SOBR) has a highly relevant technological solution that can help mitigate and minimize the these risks.
  • The company has a particularly large addressable market as it helps employers carry out the alcohol intoxication monitoring of workers with the help of its preventive detection technology platform.

Advanced Micro Devices ($AMD)

By MT Capital

  • Today I will be completing an in-depth analysis on AMD .
  • Within, I will break down the multitude of opportunities the company has in front of it and provide a succinct overview of the company’s vast technology portfolio.
  • Additionally, I will spend time discussing how the company is eating Intel’s lunch, dig deeper into their financials, and discuss some positive and risk-based factors alike that I am considering with respect to the company. 

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