Smartkarma Daily Briefs, Author at Smartkarma

Dec 26

Daily Brief Health Care: Software Service and more

By Smartkarma Daily Briefs | Daily Briefs, Healthcare

In today’s briefing:

Software Service (3733 JP): High Order Book Indicates Continued Stellar Performance

Software Service (3733 JP): High Order Book Indicates Continued Stellar Performance

By Tina Banerjee

Software Service (3733 JP) reported in-line FY22 results, with revenue growing 9% to ¥27.6B, driven by 7–8% y/y growth in hardware and software businesses, which contributed ~70% of revenue.
The company ended FY22 with an order backlog of ¥8.7B, up 22% y/y, driven by a 26% y/y growth in hardware orders. In November, the company secured order worth ¥2.6B.
For FY23, Software Service has guided for revenue of ¥30.4 billion (+10% y/y), operating profit of ¥5.4 billion (+12% y/y), and ordinary profit of ¥5.5 billion (12% y/y).

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Dec 26

Daily Brief Industrials: Nippon Steel Trading Corporation, Polycab India and more

By Smartkarma Daily Briefs | Daily Briefs, Industrials

In today’s briefing:

Merger Arb Mondays (26 Dec) – Nippon Steel Trading, Conexio, Origin Energy, Warrego, OZ Minerals
2023 High Conviction | Polycab: A High Quality Play on Rise of India as a Manufacturing Hub

Merger Arb Mondays (26 Dec) – Nippon Steel Trading, Conexio, Origin Energy, Warrego, OZ Minerals

By Arun George

We summarise the latest spreads and newsflow of merger arb situations covered by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
Highest spreads – Genex Power Ltd (GNX AU), Alliance Aviation Services (AQZ AU), 21Vianet Group (VNET US), Nippon Steel Trading Corporation (9810 JP), Conexio Corp (9422 JP), Golden Energy.
Lowest spreads – Nitro Software Ltd (NTO AU), Shandong Fengxiang (9977 HK), Chip Eng Seng Corp (CHIP SP), Elmo Software (ELO AU), OZ Minerals Ltd (OZL AU), Norwest Energy.

2023 High Conviction | Polycab: A High Quality Play on Rise of India as a Manufacturing Hub

By Ankit Agrawal, CFA

Polycab is a high-quality wires/cables and FMEG brand, benefitting from growing domestic consumption and rising capex led by India gaining foothold in global manufacturing.
Its FMEG business is currently in nascent stage representing just 10-12% of revenues but is poised to scale up exponentially over the next 3 years.
Its Wires and Cables business, despite commanding a dominant 22%+ market share, has been gaining share and is benefitting from strong demand tailwinds, positioning it well for double-digit growth.

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Dec 26

Daily Brief TMT/Internet: Nanya Technology, Tokyo Stock Exchange Tokyo Price Index Topix and more

By Smartkarma Daily Briefs | Daily Briefs, TMT/Internet

In today’s briefing:

Nanya Technology: Consensus Numbers Likely Too High, Net Loss Potential
Japanese Companies Will Be Selected as One of Global Stocks for Individual Investors in near Future

Nanya Technology: Consensus Numbers Likely Too High, Net Loss Potential

By Vincent Fernando, CFA

Micron’s recent results, where it showed a major margin slide and swung to a net loss, imply weak results ahead for Nanya Tech.
We believe that Nanya’s FY2023E consensus figures are likely to be revised down.
We see more downside risk ahead for Nanya Tech shares, and will await lower levels before buying based on deep-value.

Japanese Companies Will Be Selected as One of Global Stocks for Individual Investors in near Future

By Aki Matsumoto

The government’s policy to expand small investment tax exemption program is expected to lead to increase in stock investments. Individuals are keen to invest in stocks with higher performance potential.
Trading in U.S. equities is prominent among under-40s generation. It is a rational investment for these generations with higher risk tolerance to invest in foreign equities with higher expected returns.
Individuals no longer have a single choice of Japanese equities as they did during the bubble economy, but have begun to select their investment targets as one of global equities.

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Dec 26

Daily Brief Industrials: Nippon Steel Trading Corporation, Polycab India and more

By Smartkarma Daily Briefs | Daily Briefs, Industrials

In today’s briefing:

Merger Arb Mondays (26 Dec) – Nippon Steel Trading, Conexio, Origin Energy, Warrego, OZ Minerals
2023 High Conviction | Polycab: A High Quality Play on Rise of India as a Manufacturing Hub

Merger Arb Mondays (26 Dec) – Nippon Steel Trading, Conexio, Origin Energy, Warrego, OZ Minerals

By Arun George

We summarise the latest spreads and newsflow of merger arb situations covered by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
Highest spreads – Genex Power Ltd (GNX AU), Alliance Aviation Services (AQZ AU), 21Vianet Group (VNET US), Nippon Steel Trading Corporation (9810 JP), Conexio Corp (9422 JP), Golden Energy.
Lowest spreads – Nitro Software Ltd (NTO AU), Shandong Fengxiang (9977 HK), Chip Eng Seng Corp (CHIP SP), Elmo Software (ELO AU), OZ Minerals Ltd (OZL AU), Norwest Energy.

2023 High Conviction | Polycab: A High Quality Play on Rise of India as a Manufacturing Hub

By Ankit Agrawal, CFA

Polycab is a high-quality wires/cables and FMEG brand, benefitting from growing domestic consumption and rising capex led by India gaining foothold in global manufacturing.
Its FMEG business is currently in nascent stage representing just 10-12% of revenues but is poised to scale up exponentially over the next 3 years.
Its Wires and Cables business, despite commanding a dominant 22%+ market share, has been gaining share and is benefitting from strong demand tailwinds, positioning it well for double-digit growth.

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

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Dec 26

Daily Brief Financials: Jafco Co Ltd and more

By Smartkarma Daily Briefs | Daily Briefs, Financials

In today’s briefing:

Weekly Deals Digest (26 Dec) – JAFCO, Nippon Steel Trading, Conexio, Origin Energy, Warrego

Weekly Deals Digest (26 Dec) – JAFCO, Nippon Steel Trading, Conexio, Origin Energy, Warrego

By Arun George

A weekly summary of key developments across ECM and Event-Driven names tracked by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Thailand, Korea, India and Chinese ADRs.
ECM developments – Very quiet week as VinFast (1905332D VN) continues to pre-market a US$1bn IPO.
Event-Driven developments Conexio Corp (9422 JP), Jafco Co Ltd (8595 JP), Nippon Steel Trading Corporation (9810 JP), Origin Energy (ORG AU), OZ Minerals Ltd (OZL AU), Warrego Energy (WGO AU).

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

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Dec 26

Daily Brief Consumer: Temple & Webster Group Ltd and more

By Smartkarma Daily Briefs | Consumer, Daily Briefs

In today’s briefing:

S&P/ASX All Technology Index: GICS Changes, Market Consultation & Potential Index Changes

S&P/ASX All Technology Index: GICS Changes, Market Consultation & Potential Index Changes

By Brian Freitas

Global Industry Classification Standard (GICS) structure updates will lead to changes to the S&P/ASX All Technology Index at the March rebalance.
To better reflect the GICS changes and reduce constituent turnover, S&P DJI has proposed changes to the index universe for constituent selection.
We expect there will be 4 deletions from the index in March, but that could increase to 10 if the changes are not adopted.

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Dec 26

Most Read: Tongcheng-Elong Holdings Ltd, Tietto Minerals Ltd, TA Chen Stainless Pipe, Cromwell Property, Haidilao, Nippon Steel Trading Corporation, Jafco Co Ltd, Delta Electronics Thai, Amorepacific Group and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

HSTECH Index Rebalance Preview: Tongcheng Travel (780 HK) Could Replace Ming Yuan Cloud (909 HK)
MVIS Global Junior Gold Miners Index Rebalance: Two Adds, Four Deletes, Float Changes
Index Rebalance & ETF Flow Recap: ASX, HSTECH, TWDiv+, EPRA Nareit, HSCEI, PCOMP, STAR50, REMX, GDXJ
MVIS Australia A-REITs Index Rebalance: Cromwell Property (CMW) Is a Deletion
SET50 Index Rebalance: CENTEL, COM7, DELTA, RATCH Added; BLA, IRPC, KCE, SAWAD Out
Index Rebalance & ETF Flow Recap: S&P/ASX, HSCEI, HSTECH, Haidilao/Super Hi, CSI REIT
Merger Arb Mondays (26 Dec) – Nippon Steel Trading, Conexio, Origin Energy, Warrego, OZ Minerals
Last Week in Event SPACE: Oz Minerals, Warrego, JAFCO, Swire Pac’s A&Bs, Korean Mandatory Offers
Index Rebalance & ETF Flow Recap: SET50, Stock Connect, Kanzhun, Futu, AMFI
Estimating Fund Size Tracking KOSPI MID Cap Index

HSTECH Index Rebalance Preview: Tongcheng Travel (780 HK) Could Replace Ming Yuan Cloud (909 HK)

By Brian Freitas

Tongcheng-Elong Holdings Ltd (780 HK) could replace Ming Yuan Cloud Group (909 HK) in the Hang Seng Tech Index (HSTECH INDEX) at the March rebalance.
One way turnover is estimated at 2.1% resulting in a one-way trade of HK$1.7bn. Passive trackers will need to buy nearly 10x ADV on Tongcheng-Elong Holdings Ltd (780 HK).
After being deleted from the MSCI China Index at the November SAIR, this could be the next major index deletion for Ming Yuan Cloud Group (909 HK).

MVIS Global Junior Gold Miners Index Rebalance: Two Adds, Four Deletes, Float Changes

By Brian Freitas

Filo Mining (FIL CN) and Tietto Minerals (TIE AU) are adds while Fresnillo (FRES LN), Galiano Gold (GAU US), Jaguar Mining (JAG CN) and Novo Resources (NVO CN) are deletes.
One way turnover is estimated at 4.3% resulting in a one-way trade of US$163m. There is over 1 day of ADV to trade on 24 stocks.
Largest inflows are on Filo Mining (FIL CN) and Tietto Minerals Ltd (TIE AU) while largest outflows are on Fresnillo PLC (FRES LN) and Centerra Gold (CG CN).

Index Rebalance & ETF Flow Recap: ASX, HSTECH, TWDiv+, EPRA Nareit, HSCEI, PCOMP, STAR50, REMX, GDXJ

By Brian Freitas

The rebalance implementation of the KOSPI2, KOSDQ150, CSI 300, CSI 500, STAR50 and other indices took place on 8/9 December. Plus MSCI/FTSE deletes due to Northbound Stock Connect changes.
Friday will see the implementation of the FTSE All-World/All-Cap, EPRA Nareit, S&P/ASX, KLCI, FTSE China and Sensex indices. The FTSE Taiwan Dividend+ Index will have the largest flows.
Big weekly redemptions from the Mirae Asset Tiger Top 10 ETF (292150 KS), ChinaAMC China 50 ETF (510050 CH) and IShares Core MSCI Asia Ex Japan ETF (3010 HK).

MVIS Australia A-REITs Index Rebalance: Cromwell Property (CMW) Is a Deletion

By Brian Freitas

Cromwell Property (CMW AU) is a deletion from the MVIS Australia A-REITS Index at the close on 16 December.
Passive trackers will need to sell 13.9m shares (5 days ADV) of Cromwell Property (CMW AU) and there appears to be little to no pre-positioning on the stock.
There are a few other stocks that will have over 0.5 days of ADV to buy from passive trackers.

SET50 Index Rebalance: CENTEL, COM7, DELTA, RATCH Added; BLA, IRPC, KCE, SAWAD Out

By Brian Freitas

Central Plaza Hotel, Com7 PCL, Delta Electronics Thai and Ratch Group will replace Bangkok Life Assurance, IRPC PCL, KCE Electronics PCL and Srisawad Power in the SET 50 Index.
Passive trackers will need to buy between 2-4 days of ADV on the adds while selling between 0.6-3 days of ADV on the deletes.
The adds have significantly outperformed the deletes over the last few months. We’d use any big moves over the next couple of days to trim positions.

Index Rebalance & ETF Flow Recap: S&P/ASX, HSCEI, HSTECH, Haidilao/Super Hi, CSI REIT

By Brian Freitas

It was a busy Friday with the implementation of the December rebalance for multiple indices. The Yuanta/P-shares Taiwan Dividend Plus ETF will continue to rebalance over the next 4 days.
The coming week should be relatively quiet with the announcement of the Stock Exchange of Thailand SET 50 Index (SET50 INDEX) changes expected.
There were large inflows to ETFs focused on China, Korea, Japan, Taiwan. There were inflows to Hang Seng H Share Index ETF and outflows from Tracker Fund of Hong Kong.

Merger Arb Mondays (26 Dec) – Nippon Steel Trading, Conexio, Origin Energy, Warrego, OZ Minerals

By Arun George

We summarise the latest spreads and newsflow of merger arb situations covered by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
Highest spreads – Genex Power Ltd (GNX AU), Alliance Aviation Services (AQZ AU), 21Vianet Group (VNET US), Nippon Steel Trading Corporation (9810 JP), Conexio Corp (9422 JP), Golden Energy.
Lowest spreads – Nitro Software Ltd (NTO AU), Shandong Fengxiang (9977 HK), Chip Eng Seng Corp (CHIP SP), Elmo Software (ELO AU), OZ Minerals Ltd (OZL AU), Norwest Energy.

Last Week in Event SPACE: Oz Minerals, Warrego, JAFCO, Swire Pac’s A&Bs, Korean Mandatory Offers

By David Blennerhassett

For OZ Minerals (OZL AU), look elsewhere unless you are VERY bullish copper. But if you are VERY bullish copper, buy copper options rather than the embedded option in OZL.
Game on as Warrego Energy (WGO AU) shareholders weigh the pros and cons of Hancock’s all-cash Offer against Strike Energy (STX AU)‘s “superior” scrip proposal.
Jafco Co Ltd (8595 JP) succumbed to greenmail and tried to boost the price to explain the exit they were going to give Murakami-san. It didn’t work.

Index Rebalance & ETF Flow Recap: SET50, Stock Connect, Kanzhun, Futu, AMFI

By Brian Freitas

The announcement of the changes to the Stock Exchange of Thailand SET 50 Index was made on 20 December and will be implemented at the close on 30 December.
There are a lot of review cutoffs for different indices in the coming week with announcements in January and February.
There were big inflows to Vanguard FTSE Emerging Markets ETF (VWO US) and big outflows from IShares Core MSCI Asia Ex Japan ETF (3010 HK) during the week.

Estimating Fund Size Tracking KOSPI MID Cap Index

By Sanghyun Park

About ₩3T trillion is presumed to flow from NPS to KOSPI MID. Then, ₩0.8T from local publicly raised funds should be sitting in KOSPI MID. Adding these two alone amounts ₩4T.
Of course, this is ACTIVE. In other words, they do not need to proceed with universe changes due to rebalancing at the same pace as ETFs.
Nevertheless, we should note that the domestic fund industry does not allow a large gap with BM. Hence, at least ₩4T of funds follow KOSPI MID quite tightly.

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Dec 26

Daily Brief Australia: Temple & Webster Group Ltd and more

By Smartkarma Daily Briefs | Australia, Daily Briefs

In today’s briefing:

S&P/ASX All Technology Index: GICS Changes, Market Consultation & Potential Index Changes

S&P/ASX All Technology Index: GICS Changes, Market Consultation & Potential Index Changes

By Brian Freitas

Global Industry Classification Standard (GICS) structure updates will lead to changes to the S&P/ASX All Technology Index at the March rebalance.
To better reflect the GICS changes and reduce constituent turnover, S&P DJI has proposed changes to the index universe for constituent selection.
We expect there will be 4 deletions from the index in March, but that could increase to 10 if the changes are not adopted.

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

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

✓ Unlimited Research Summaries
✓ Personalised Alerts
✓ Custom Watchlists
✓ Company Data and News
✓ Events & Webinars

Dec 26

Daily Brief India: Polycab India and more

By Smartkarma Daily Briefs | Daily Briefs, India

In today’s briefing:

2023 High Conviction | Polycab: A High Quality Play on Rise of India as a Manufacturing Hub

2023 High Conviction | Polycab: A High Quality Play on Rise of India as a Manufacturing Hub

By Ankit Agrawal, CFA

Polycab is a high-quality wires/cables and FMEG brand, benefitting from growing domestic consumption and rising capex led by India gaining foothold in global manufacturing.
Its FMEG business is currently in nascent stage representing just 10-12% of revenues but is poised to scale up exponentially over the next 3 years.
Its Wires and Cables business, despite commanding a dominant 22%+ market share, has been gaining share and is benefitting from strong demand tailwinds, positioning it well for double-digit growth.

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

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

✓ Unlimited Research Summaries
✓ Personalised Alerts
✓ Custom Watchlists
✓ Company Data and News
✓ Events & Webinars

Dec 26

Daily Brief Japan: Nippon Steel Trading Corporation, Software Service, Jafco Co Ltd, Tokyo Stock Exchange Tokyo Price Index Topix and more

By Smartkarma Daily Briefs | Daily Briefs, Japan

In today’s briefing:

Merger Arb Mondays (26 Dec) – Nippon Steel Trading, Conexio, Origin Energy, Warrego, OZ Minerals
Software Service (3733 JP): High Order Book Indicates Continued Stellar Performance
Weekly Deals Digest (26 Dec) – JAFCO, Nippon Steel Trading, Conexio, Origin Energy, Warrego
Japanese Companies Will Be Selected as One of Global Stocks for Individual Investors in near Future

Merger Arb Mondays (26 Dec) – Nippon Steel Trading, Conexio, Origin Energy, Warrego, OZ Minerals

By Arun George

We summarise the latest spreads and newsflow of merger arb situations covered by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
Highest spreads – Genex Power Ltd (GNX AU), Alliance Aviation Services (AQZ AU), 21Vianet Group (VNET US), Nippon Steel Trading Corporation (9810 JP), Conexio Corp (9422 JP), Golden Energy.
Lowest spreads – Nitro Software Ltd (NTO AU), Shandong Fengxiang (9977 HK), Chip Eng Seng Corp (CHIP SP), Elmo Software (ELO AU), OZ Minerals Ltd (OZL AU), Norwest Energy.

Software Service (3733 JP): High Order Book Indicates Continued Stellar Performance

By Tina Banerjee

Software Service (3733 JP) reported in-line FY22 results, with revenue growing 9% to ¥27.6B, driven by 7–8% y/y growth in hardware and software businesses, which contributed ~70% of revenue.
The company ended FY22 with an order backlog of ¥8.7B, up 22% y/y, driven by a 26% y/y growth in hardware orders. In November, the company secured order worth ¥2.6B.
For FY23, Software Service has guided for revenue of ¥30.4 billion (+10% y/y), operating profit of ¥5.4 billion (+12% y/y), and ordinary profit of ¥5.5 billion (12% y/y).

Weekly Deals Digest (26 Dec) – JAFCO, Nippon Steel Trading, Conexio, Origin Energy, Warrego

By Arun George

A weekly summary of key developments across ECM and Event-Driven names tracked by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Thailand, Korea, India and Chinese ADRs.
ECM developments – Very quiet week as VinFast (1905332D VN) continues to pre-market a US$1bn IPO.
Event-Driven developments Conexio Corp (9422 JP), Jafco Co Ltd (8595 JP), Nippon Steel Trading Corporation (9810 JP), Origin Energy (ORG AU), OZ Minerals Ltd (OZL AU), Warrego Energy (WGO AU).

Japanese Companies Will Be Selected as One of Global Stocks for Individual Investors in near Future

By Aki Matsumoto

The government’s policy to expand small investment tax exemption program is expected to lead to increase in stock investments. Individuals are keen to invest in stocks with higher performance potential.
Trading in U.S. equities is prominent among under-40s generation. It is a rational investment for these generations with higher risk tolerance to invest in foreign equities with higher expected returns.
Individuals no longer have a single choice of Japanese equities as they did during the bubble economy, but have begun to select their investment targets as one of global equities.

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

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

✓ Unlimited Research Summaries
✓ Personalised Alerts
✓ Custom Watchlists
✓ Company Data and News
✓ Events & Webinars

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