Smartkarma Daily Briefs

Jun 07

China: JD Logistics, Lanzhou Zhuangyuan Pasture, Remegen Co Ltd, Hopson Development and more

By Smartkarma Daily Briefs | China, Daily Briefs

In today’s briefing:

Down from HK$40 to HK$15, Opportunity to Come After Hard Q2
Zhuangyuan Pasture (1533 HK): 29th June EGM For H-Share Offer
Remegen (9995HK) Vs Keymed Biosciences (2162HK)-Deep Dive the Logic & Internationalization Prospects
Morning Views Asia: Hopson Development, Kawasan Industri Jababeka, KWG Living Group

Down from HK$40 to HK$15, Opportunity to Come After Hard Q2

By Ming Lu

JDL’s stock price has declined from HK$40 at its IPO to HK$15.
We believe JDL will recover from the lockdown in Shanghai in 3Q22.
We also believe the stock has an upside of 46%.

Zhuangyuan Pasture (1533 HK): 29th June EGM For H-Share Offer

Back on the 25 April, PRC dairy farmer Lanzhou Zhuangyuan Pasture (1533 HK) announced a Conditional Cash Offer for all its H-shares at $10.89/share. The Offer Doc is now out.
This two-step voluntary cash offer involves a Scheme-like vote and a 90% tendering condition. The EGM will be held on the 29 June.
This transaction could potentially be wrapped up late-July. The FY21 dividend should also be added to the Offer terms.

Remegen (9995HK) Vs Keymed Biosciences (2162HK)-Deep Dive the Logic & Internationalization Prospects

By Xinyao (Criss) Wang

Commercialization prospects of domestic autoimmune disease market is highly uncertain. Related drugs’ sales could be very limited in short term. Overseas market space is much larger, so internationalization is inevitable.
Our forecast on RemeGen’s total sales is just RMB3.5-4 billion. The deal with Seagen still puzzles us, which is the key to determine how far RemeGen can go in internationalization.
Keymed is like “a younger RemeGen” due to the differentiation strategy of pipeline layout. However, Keymed’s internationalization progress is much weaker, with higher risks and uncertainties than RemeGen.

Morning Views Asia: Hopson Development, Kawasan Industri Jababeka, KWG Living Group

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.

Hopson Development
Kawasan Industri Jababeka
KWG Living Group

Before it’s here, it’s on Smartkarma

Jun 07

Indonesia: Hopson Development and more

By Smartkarma Daily Briefs | Daily Briefs, Indonesia

In today’s briefing:

Morning Views Asia: Hopson Development, Kawasan Industri Jababeka, KWG Living Group

Morning Views Asia: Hopson Development, Kawasan Industri Jababeka, KWG Living Group

By Charles Macgregor

Hopson Development
Kawasan Industri Jababeka
KWG Living Group

Before it’s here, it’s on Smartkarma

Jun 07

TMT: Renesas Electronics, HPSP, Amplitude and more

By Smartkarma Daily Briefs | Daily Briefs, TMT/Internet

In today’s briefing:

A Modest Proposal to the Nikkei Index Committee for Nikkei 225 Methodology Change
HPSP IPO Valuation Analysis
Amplitude: Valuations Look Attractive and Growth Catalysts May Materialize in CY22

A Modest Proposal to the Nikkei Index Committee for Nikkei 225 Methodology Change

The Nikkei Index team proposed several changes to the Nikkei 225 Average methodology last week. They include capping, a semi-annual (vs annual) review, and a change in “liquidity” measure.
It helps move membership away from the low price low weight names which populate the bottom of the index. Slowly. 6 names a year. That’s not enough.
And it doesn’t fix the historical anomalies rendering the index unsuitable as benchmark (and BOJ tool). I propose more changes below. You can submit this or yours in the consultation.

HPSP IPO Valuation Analysis

By Douglas Kim

Our base case valuation of HPSP is implied market cap of 810 billion won or target price of 38,228 won per share.
This is 53% higher than the high end of the IPO price range of 25,000 won. Given the solid upside, we have a POSITIVE view of the HPSP IPO.
Our base case valuation uses our estimated net profit of 79.8 billion won in 2022 and P/E of 10.2x which is the median valuation multiple of its peers.

Amplitude: Valuations Look Attractive and Growth Catalysts May Materialize in CY22

By Andrei Zakharov

During the #1 product and growth conference Amplify 2022 in Las Vegas, Amplitude (AMPL US) introduced the Customer Data Platform (CDP) with integrated product analytics.
The company expanded partner integration with Snowflake Inc (SNOW US) to improve data connectivity while Amplitude Experiment sees strong traction with customers.
With shares down ~65% YTD, Amplitude has underperformed the Nasdaq Composite (-23%). Our PT is $28.00, implying ~14x EV/2022E revenue and ~10x EV/2023E revenue.

Before it’s here, it’s on Smartkarma

Jun 07

Consumer: Jardine Cycle & Carriage, Lanzhou Zhuangyuan Pasture, Yonex Co Ltd, Shimamura, MatsukiyoCocokara, CCL Products India, Subaru Corp, Hero Motocorp and more

By Smartkarma Daily Briefs | Consumer, Daily Briefs

In today’s briefing:

Tunas Ridean (TURI IJ): JCNC & Tunas Andolan’s Quasi Delisting Proposal
Zhuangyuan Pasture (1533 HK): 29th June EGM For H-Share Offer
Yonex: Rising Through the Ranks in New Markets
Shimamura Back on Track, Targeting Urban Centres
Japan Retail | 3 Stocks to Buy for Revenge Shopping
CCL Products (India) – Spray-Dried Demand Visibility Remains Strong
Subaru (7270 JP) | Production Problems in the Rear View Mirror
Hero MotoCorp – Improving Rural Sentiments to Support Volume Recovery; Growth Drivers in Place

Tunas Ridean (TURI IJ): JCNC & Tunas Andolan’s Quasi Delisting Proposal

Tunas Ridean (TURI IJ) announced a plan to change its status from an open company to a closed company.
In effect, TURI will undertake a buyback of its shares at Rp1,700/share, a lifetime high. Those who do not tender will be left holding unlisted scrip.
Jardine Cycle & Carriage (JCNC SP) and Tunas Andalan both hold 46.24%, leaving 7.52% in public hands. The proposal requires a shareholder vote. It appears no shareholder needs to abstain.

Zhuangyuan Pasture (1533 HK): 29th June EGM For H-Share Offer

Back on the 25 April, PRC dairy farmer Lanzhou Zhuangyuan Pasture (1533 HK) announced a Conditional Cash Offer for all its H-shares at $10.89/share. The Offer Doc is now out.
This two-step voluntary cash offer involves a Scheme-like vote and a 90% tendering condition. The EGM will be held on the 29 June.
This transaction could potentially be wrapped up late-July. The FY21 dividend should also be added to the Offer terms.

Yonex: Rising Through the Ranks in New Markets

By Oshadhi Kumarasiri

Driven by a sharp rise in revenue and profitability over the last three quarters, Yonex Co Ltd (7906 JP) shares continue to go up in relatively choppy overall market conditions.
We expect this strong growth momentum to continue over the medium term while Yonex builds popularity in new markets and new sports categories.
We think there could be around 100% upside to Yonex alongside improving confidence about sustainability of Yonex’s current performance.

Shimamura Back on Track, Targeting Urban Centres

By Michael Causton

Shimamura (8227 JP) is on a roll at the moment, clawing back share after a troubled few years of mis-merchandising and confused targeting.
After a record year, Shimamura now thinks its merchandise teams are strong enough to take on urban centre consumers – without raising operating costs. This could be a worry for Uniqlo.
Shimamura has tried this before but back then its focus was on young women and had weaker merchandising skills. This time around too urban consumers want more discount apparel.

Japan Retail | 3 Stocks to Buy for Revenge Shopping

By Mark Chadwick

Over the past 2 years, customers cut back drastically on shopping and travel. Many worked in home offices in sweatpants and t-shirts.
But now, people are vaccinated, and lockdowns have lifted. Even Japan’s borders are starting to spring open.
Consumers are looking for ways to make up for lost time – we highlight 3 beneficiaries of revenge shopping.

CCL Products (India) – Spray-Dried Demand Visibility Remains Strong

By Nirmal Bang

Management indicated that decline in EBITDA/kg in FY22 was mainly on account of mix change in favour of spray-dried and increase in cost items like power & fuel, freight etc. 30% of the contracts in the B2B business are on CIF basis.

Small packs capacity expansion (increase by >3x) has been completed and management believes that ~50% capacity would be utilized for captive purposes while the rest will be used for exports.

Demand for freeze-dried coffee remains soft on account of downtrading in different regions globally and capacity addition at the industry level.

Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Subaru (7270 JP) | Production Problems in the Rear View Mirror

By Mark Chadwick

Subaru’s profitability is set to improve dramatically, driven by a weaker yen
After two painful years, production is starting to normalise post Covid
At 1xPBR, we think Subaru is significantly undervalued and see at least 30% upside

Hero MotoCorp – Improving Rural Sentiments to Support Volume Recovery; Growth Drivers in Place

By Nirmal Bang

The company sees the overall demand sentiment improving and is experiencing some early signs of demand recovery in both Rural as well as Urban areas.
It expects double- digit growth in volume as all medium term and long term triggers are in place.

Demand is recovering on the back of festive and marriage season, which is going really well, and retail volume has outdone wholesale volume, leading to correction in inventory levels, which are lower than 6 weeks now.

Before it’s here, it’s on Smartkarma

Jun 07

Event-Driven: Kyokuto Kaihatsu Kogyo Co, Jardine Cycle & Carriage, Toshiba Corp, Lanzhou Zhuangyuan Pasture, KakaoBank, Renesas Electronics, SK Innovation and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

Kyokuto Kaihatsu (7226 JP) Buyback – It’s Kinda Big, But There May Be More Behind
Tunas Ridean (TURI IJ): JCNC & Tunas Andolan’s Quasi Delisting Proposal
Toshiba – Surprise, Surprise, More Drama
Zhuangyuan Pasture (1533 HK): 29th June EGM For H-Share Offer
KOSPI200 Index Rebalance: Float Changes, Flows & Trades
KOSPI 200 Rebalancing Minimal Flow at the Close on June 9 For Day Basket-Trading
A Modest Proposal to the Nikkei Index Committee for Nikkei 225 Methodology Change
SK Inc & SK Innovation Plan to Buy Stake in Bill Gates’ TerraPower + SKC Sells PET Film Business

Kyokuto Kaihatsu (7226 JP) Buyback – It’s Kinda Big, But There May Be More Behind

Kyokuto Kaihatsu Kogyo Co (7226 JP) has always been cash-rich. Recently there are better noises. Sold real estate. New Mid-Term Plan. Raised the payout ratio to 50%. Slowly selling crossholdings.
But it isn’t fast enough, and activist Strategic Capital this spring announced a flurry of AGM agenda items to extract value for shareholders.
The company today announced a buyback – additive, but there is a lot to look at here. Shareholder structure is key. And forward cash-flows tell you more buybacks could come.

Tunas Ridean (TURI IJ): JCNC & Tunas Andolan’s Quasi Delisting Proposal

Tunas Ridean (TURI IJ) announced a plan to change its status from an open company to a closed company.
In effect, TURI will undertake a buyback of its shares at Rp1,700/share, a lifetime high. Those who do not tender will be left holding unlisted scrip.
Jardine Cycle & Carriage (JCNC SP) and Tunas Andalan both hold 46.24%, leaving 7.52% in public hands. The proposal requires a shareholder vote. It appears no shareholder needs to abstain.

Toshiba – Surprise, Surprise, More Drama

By Mio Kato

The days since Toshiba’s last briefing session have been eventful with METI expressing concern about foreign investor control and a split emerging in the board over director nominations.
These developments create significant risk of activist-friendly director candidates being vetoed in our view.
Toshiba stock has been trading in line with Hitachi’s strong performance of late despite being more expensive and thus risk has increased.

Zhuangyuan Pasture (1533 HK): 29th June EGM For H-Share Offer

Back on the 25 April, PRC dairy farmer Lanzhou Zhuangyuan Pasture (1533 HK) announced a Conditional Cash Offer for all its H-shares at $10.89/share. The Offer Doc is now out.
This two-step voluntary cash offer involves a Scheme-like vote and a 90% tendering condition. The EGM will be held on the 29 June.
This transaction could potentially be wrapped up late-July. The FY21 dividend should also be added to the Offer terms.

KOSPI200 Index Rebalance: Float Changes, Flows & Trades

By Brian Freitas

There are 7 adds and 7 deletes for the Korea Stock Exchange Kospi 200 Index (KOSPI2 INDEX) rebalance to be implemented at the close on 9 June.
There are also a bunch of stocks that will have changes applied to their free float. There were announced last week and are much less tracked.
The flows and impact on some of the float change names are significant and pre-positioning and passive flows could move the stocks over the next few days.

KOSPI 200 Rebalancing Minimal Flow at the Close on June 9 For Day Basket-Trading

By Sanghyun Park

Flows from the ETFs/index funds serve as a minimal flow for rebalancing trading at the close on June 9. The total AUM is ₩18.9T: ETFs ₩15.0T and index funds ₩3.9T.
There are only three trading days left until the rebalancing trading. At this point, a setup aimed at the NPS/Insurance’s preemptive trading seems a bit off, timing-wise.
It seems more appropriate at this point to design a day basket-trading based on the minimal flow size on the day of rebalancing trading, June 9.

A Modest Proposal to the Nikkei Index Committee for Nikkei 225 Methodology Change

The Nikkei Index team proposed several changes to the Nikkei 225 Average methodology last week. They include capping, a semi-annual (vs annual) review, and a change in “liquidity” measure.
It helps move membership away from the low price low weight names which populate the bottom of the index. Slowly. 6 names a year. That’s not enough.
And it doesn’t fix the historical anomalies rendering the index unsuitable as benchmark (and BOJ tool). I propose more changes below. You can submit this or yours in the consultation.

SK Inc & SK Innovation Plan to Buy Stake in Bill Gates’ TerraPower + SKC Sells PET Film Business

By Douglas Kim

SK Group has been the the most active M&A player among the major chaebols in Korea in the past decade. SK Group is once again making some big M&A moves.
In this insight, we discuss SK Inc and SK Innovation’s plans to purchase a minority stake in Bill Gates’ TerraPower nuclear SMR technology company.
We also discuss the recent sale of the PET film business by SKC for 1.6 trillion won and how SKC may try to acquire the controlling interests of Iljin Materials.

Before it’s here, it’s on Smartkarma

Jun 07

Singapore: Jardine Cycle & Carriage and more

By Smartkarma Daily Briefs | Daily Briefs, Singapore

In today’s briefing:

Tunas Ridean (TURI IJ): JCNC & Tunas Andolan’s Quasi Delisting Proposal

Tunas Ridean (TURI IJ): JCNC & Tunas Andolan’s Quasi Delisting Proposal

Tunas Ridean (TURI IJ) announced a plan to change its status from an open company to a closed company.
In effect, TURI will undertake a buyback of its shares at Rp1,700/share, a lifetime high. Those who do not tender will be left holding unlisted scrip.
Jardine Cycle & Carriage (JCNC SP) and Tunas Andalan both hold 46.24%, leaving 7.52% in public hands. The proposal requires a shareholder vote. It appears no shareholder needs to abstain.

Before it’s here, it’s on Smartkarma

Jun 07

Thailand: Thai Life Insurance and more

By Smartkarma Daily Briefs | Daily Briefs, Thailand

In today’s briefing:

Thai Life Insurance Pre-IPO – The Positives – Resilient Performance with a Changing Product Mix

Thai Life Insurance Pre-IPO – The Positives – Resilient Performance with a Changing Product Mix

By Sumeet Singh

Thai Life Insurance is looking to raise up to US$1bn in its upcoming Thailand IPO.
Thai Life Insurance is one of the largest life insurance companies in Thailand, third by assets. As of Mar 2022, it had 64,000 insurance agents.
In this note, we talk about the positive aspects of the deal.

Before it’s here, it’s on Smartkarma

Jun 07

Industrials: JD Logistics, Kyokuto Kaihatsu Kogyo Co, Toshiba Corp and more

By Smartkarma Daily Briefs | Daily Briefs, Industrials

In today’s briefing:

Down from HK$40 to HK$15, Opportunity to Come After Hard Q2
Kyokuto Kaihatsu (7226 JP) Buyback – It’s Kinda Big, But There May Be More Behind
Toshiba – Surprise, Surprise, More Drama

Down from HK$40 to HK$15, Opportunity to Come After Hard Q2

By Ming Lu

JDL’s stock price has declined from HK$40 at its IPO to HK$15.
We believe JDL will recover from the lockdown in Shanghai in 3Q22.
We also believe the stock has an upside of 46%.

Kyokuto Kaihatsu (7226 JP) Buyback – It’s Kinda Big, But There May Be More Behind

Kyokuto Kaihatsu Kogyo Co (7226 JP) has always been cash-rich. Recently there are better noises. Sold real estate. New Mid-Term Plan. Raised the payout ratio to 50%. Slowly selling crossholdings.
But it isn’t fast enough, and activist Strategic Capital this spring announced a flurry of AGM agenda items to extract value for shareholders.
The company today announced a buyback – additive, but there is a lot to look at here. Shareholder structure is key. And forward cash-flows tell you more buybacks could come.

Toshiba – Surprise, Surprise, More Drama

By Mio Kato

The days since Toshiba’s last briefing session have been eventful with METI expressing concern about foreign investor control and a split emerging in the board over director nominations.
These developments create significant risk of activist-friendly director candidates being vetoed in our view.
Toshiba stock has been trading in line with Hitachi’s strong performance of late despite being more expensive and thus risk has increased.

Before it’s here, it’s on Smartkarma

Jun 07

United States: Amplitude, NFT and more

By Smartkarma Daily Briefs | Daily Briefs, United States

In today’s briefing:

Amplitude: Valuations Look Attractive and Growth Catalysts May Materialize in CY22
Sporting Crypto – BIG3 to Allow Fans Ownership of Basketball Teams Through NFTs

Amplitude: Valuations Look Attractive and Growth Catalysts May Materialize in CY22

By Andrei Zakharov

During the #1 product and growth conference Amplify 2022 in Las Vegas, Amplitude (AMPL US) introduced the Customer Data Platform (CDP) with integrated product analytics.
The company expanded partner integration with Snowflake Inc (SNOW US) to improve data connectivity while Amplitude Experiment sees strong traction with customers.
With shares down ~65% YTD, Amplitude has underperformed the Nasdaq Composite (-23%). Our PT is $28.00, implying ~14x EV/2022E revenue and ~10x EV/2023E revenue.

Sporting Crypto – BIG3 to Allow Fans Ownership of Basketball Teams Through NFTs

By Sporting Crypto

In short, it’s a 3-on-3 Basketball league founded by none other than Hip Hop icon Ice Cube.
Traditionally, basketball is 5-on-5, so this is a faster-paced and smaller version.
The league consists of 12 teams whose rosters include both former NBA players and international players.

Before it’s here, it’s on Smartkarma