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Smartkarma Daily Briefs

Dec 22
0

Daily Brief ECM: Sula Vineyards IPO Trading – Not a Whole Lot to Cheer About and more

By | Daily Briefs, ECM

In today’s briefing:

  • Sula Vineyards IPO Trading – Not a Whole Lot to Cheer About
  • Bionote IPO Trading – Weakest Demand Even After Cutting Price and Size
  • Protean EGov Technologies Pre-IPO – A Key Service Provider but Earnings Have Lagged

Sula Vineyards IPO Trading – Not a Whole Lot to Cheer About

By Sumeet Singh

  • Sula Vineyards raised around US$117m in its India IPO, although demand wasn’t all that great.
  • Sula Vineyards (SV) distributes wines under a bouquet of brands. In addition to its flagship brand “Sula,” popular brands include “RASA,” “Dindori”, “The source,” “Satori”, “Madera” & “Dia”. 
  • We have looked at various aspects of the deal in our previous notes. In this note, we will talk about demand and trading dynamics.

Bionote IPO Trading – Weakest Demand Even After Cutting Price and Size

By Clarence Chu

  • Bionote (377740 KS) raised US$72.2m in its Korean IPO. The IPO had consisted of both a primary and secondary selldown.
  • Bionote is an integrated producer of diagnostics test products and biocontent products. 
  • In this note, we will talk about the demand for the deal and other trading dynamics.

Protean EGov Technologies Pre-IPO – A Key Service Provider but Earnings Have Lagged

By Sumeet Singh

  • Protean eGov Technologies (PET) is looking to raise up to US$600m in its upcoming India IPO.
  • Protean eGov Technologies (PET) is a key IT-enabled solutions company in India engaged in conceptualizing, developing and executing nationally critical greenfield technology solutions. 
  • In this note, we look at the company’s past performance.

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Dec 22
0

Daily Brief Macro: Chinese Exporters Lose Some of Their Edge From a Weakening Yuan and more

By | Daily Briefs, Macro

In today’s briefing:

  • Chinese Exporters Lose Some of Their Edge From a Weakening Yuan
  • CX Daily: What’s in Store for China GDP, Fiscal Policy in 2023
  • China’s State Drugmakers Scramble to Stock Pharmacy Shelves Amid Run on Covid Medicines

Chinese Exporters Lose Some of Their Edge From a Weakening Yuan

By Caixin Global

  • So far this year, the onshore spot yuan has depreciated by about 9% to around 7 per dollar, weakening to 7.3200 per dollar in early November — the lowest since December 2007.
  • The weaker yuan has prompted more orders because some merchants cut their prices denominated in U.S. dollars.
  • Due to waning global demand, Chinese goods exports in dollar terms contracted 8.7% year-on-year in November

CX Daily: What’s in Store for China GDP, Fiscal Policy in 2023

By Caixin Global

China’s State Drugmakers Scramble to Stock Pharmacy Shelves Amid Run on Covid Medicines

By Caixin Global

  • Some state-owned drugmakers have moved to round-the-clock production and ramped up overseas procurement after the sudden reversal of China’s “zero-Covid” policy cleared pharmacy shelves of fever and cough medicines.
  • After acute outbreaks in Beijing and Guangzhou overran Covid controls, demand has exploded across the country for so-called “anti-epidemic drugs,”
  • According to data provided to Caixin by JD Health, the pharmacy platform saw an 18-fold spike in sales of anti-epidemic drugs in the week to Dec. 4, compared to the week to Nov. 4.

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Dec 22
0

Daily Brief Equity Bottom-Up: Toshiba (6502 JP): Sanctions on YMTC Help Kioxia and more

By | Daily Briefs, Equity Bottom-Up

In today’s briefing:

  • Toshiba (6502 JP): Sanctions on YMTC Help Kioxia
  • Xiaomi: Massive Layoffs to Rescue Falling Margins
  • Ryohin Keikaku: Beat On The Cards, Big Moves To Follow
  • Grab (GRAB IJ) – Moving Forward on a Number of Fronts
  • JD Health (6618.HK) – Some Positive Updates in Business
  • LyondellBasell: Looking For Safety And High Dividends In 2023

Toshiba (6502 JP): Sanctions on YMTC Help Kioxia

By Scott Foster

  • The U.S. government put YMTC on its Entity List in early December, effectively cutting it off from U.S. semiconductor equipment companies and other U.S. technology.
  • YMTC’s Xtacking architecture was good enough for Apple, but it will now have trouble maintaining its 5% market share, let alone ramping up production of its new 232-layer device.
  • This will take some of the competitive pressure off Kioxia and benefit Toshiba, which owns 41% of its shares.

Xiaomi: Massive Layoffs to Rescue Falling Margins

By Shifara Samsudeen, ACMA, CGMA

  • Several news media outlets reported that Xiaomi Corp (1810 HK) has started laying off about 10-15% of its employees across several units of its smartphone and internet services businesses.
  • Xiaomi’s margins have come under pressure with entering into the premium smartphones segment which has resulted in aggressive expansion of offline stores.
  • The company’s 3Q2022 revenues declined 9.7% YoY as a result of decrease in revenue from all three business segments while margins further dropped compared to 3Q2021.

Ryohin Keikaku: Beat On The Cards, Big Moves To Follow

By Oshadhi Kumarasiri

  • Ryohin Keikaku (7453 JP) rose 24% following an earnings beat in the previous quarter. However, the share price progression afterwards was less than we anticipated.
  • Our analysis points to one more big earnings beat as consensus is still conservative on cost assumptions.
  • We think Ryohin Keikaku could take another big stride towards our target price following 1QFY23 results, due on the first week of January 2023.

Grab (GRAB IJ) – Moving Forward on a Number of Fronts

By Angus Mackintosh

  • Our recent update with Grab (GRAB US) management revealed a number of interesting product-led initiatives that will drive future growth and customer retention as well as save on costs. 
  • Grab (GRAB US) has already seen significant progress on Grab Unlimited given its link to promos plus it is focusing on higher-spending customers to reduce the need for subsidies.
  • The company’s valuations look attractive relative to growth and considering it is moving more quickly towards profitability plus it has more than ample cash to make it there.

JD Health (6618.HK) – Some Positive Updates in Business

By Xinyao (Criss) Wang

  • JD Health (6618 HK) is on the right track in terms of business model and investment logic. The Company has also begun to enter a virtuous circle in financial performance.
  • There were some positive business updates in term of To B business in 22Q1-Q3, which would bring JD Health closer to establishing a complete “retail pharmacy + healthcare service” ecosystem.
  • For trading strategy, at present, considering the complex external environment, we recommend investors to do short-term trade, rather than long-term hold.

LyondellBasell: Looking For Safety And High Dividends In 2023

By Vladimir Dimitrov, CFA

  • LyondellBasell has become a business worth considering for anyone looking for relatively safe and high dividend yield in 2023.
  • Lower margins in key segments are largely priced-in as management prepares to reduce capacity.
  • Strong cash flow positioning and recent deleveraging efforts have significantly reduced risks related to future dividend payouts.

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Dec 22
0

Daily Brief Health Care: Bionote and more

By | Daily Briefs, Healthcare

In today’s briefing:

  • Bionote IPO Trading – Weakest Demand Even After Cutting Price and Size

Bionote IPO Trading – Weakest Demand Even After Cutting Price and Size

By Clarence Chu

  • Bionote (377740 KS) raised US$72.2m in its Korean IPO. The IPO had consisted of both a primary and secondary selldown.
  • Bionote is an integrated producer of diagnostics test products and biocontent products. 
  • In this note, we will talk about the demand for the deal and other trading dynamics.

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Dec 22
0

Daily Brief Energy/Materials: Warrego Energy, Indika Energy, Lyondellbasell Indu Cl A and more

By | Daily Briefs, Energy & Materials Sector

In today’s briefing:

  • Warrego Energy: Reinhart Disses Strike’s “Superior” Offer
  • Indika Energy – Tear Sheet – Lucror Analytics
  • LyondellBasell: Looking For Safety And High Dividends In 2023

Warrego Energy: Reinhart Disses Strike’s “Superior” Offer

By David Blennerhassett

  • After the Gina Reinhart-backed Hancock bumped its Offer for Warrego Energy (WGO AU) to A$0.28/share, in cash, Beach Energy (BPT AU) declined to match the revised Offer.  
  • With Hancock seemingly in the driver’s seat, Strike Energy (STX AU), with 19.9% of shares out, proposed a one-for-one scrip Offer, with an indicative price of A$0.335/share.
  • Hancock has responded that its Offer provides certainty, with cash, whereas Strike’s proposal does not. Now 15.84% of the register has come out in support of Hancock’s Offer.

Indika Energy – Tear Sheet – Lucror Analytics

By Trung Nguyen

We view Indika Energy as “Medium Risk” on the LARA scale, thanks to its robust balance sheet following the December 2017 acquisition of a controlling stake in PT Kideco Jaya Agung (to 91%) at a low price. We note favourably Kideco’s position as the third-largest coal producer in Indonesia, as well as the low-cost structure (first quartile; profitable even during the coal downturn in the past few years). It is one of the few HY coal credits that survived the downturn. Indika’s balance sheet appeared to be fairly levered in the past, as debt-free Kideco had not been consolidated. However, the balance sheet was transformed by the stake acquisition. The business profile also changed from that of an energy (primarily coal) services company to that of an integrated coal producer. The balance sheet is now robust, with a net cash position. In the medium term, Indika is diversifying away from coal by acquiring and investing in non-coal businesses.

Our fundamental Credit Bias on Indika is “Positive”. This is based on: [1] the strong rally in coal prices, which should further boost the company’s financial risk profile in FY 2022; and [2] Indika’s commitment to improving its business diversification and ESG standards.

Controversies are “Immaterial” and the ESG Impact on Credit is “Neutral”.

We revise our recommendation to “Hold” on the INDYIJ notes from “Buy” on the INDYIJ 8.25 25.

LyondellBasell: Looking For Safety And High Dividends In 2023

By Vladimir Dimitrov, CFA

  • LyondellBasell has become a business worth considering for anyone looking for relatively safe and high dividend yield in 2023.
  • Lower margins in key segments are largely priced-in as management prepares to reduce capacity.
  • Strong cash flow positioning and recent deleveraging efforts have significantly reduced risks related to future dividend payouts.

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Dec 22
0

Daily Brief Industrials: Nippon Steel Trading Corporation, Tatsuta Electric Wire & Cable, Toshiba Corp and more

By | Daily Briefs, Industrials

In today’s briefing:

  • Nippon Steel & Mitsui & Co to Buy Out Nippon Steel Trading (9810) At 87% Premium
  • ENEOS to Buy Out Tatsuta Electric (5809) At 74% Premium
  • Toshiba (6502 JP): Sanctions on YMTC Help Kioxia
  • Nippon Steel Trading’s (9810 JP) JPY9,300 Tender Offer from Nippon Steel

Nippon Steel & Mitsui & Co to Buy Out Nippon Steel Trading (9810) At 87% Premium

By Travis Lundy

  • Nippon Steel Corporation (5401 JP) and Mitsui & Co Ltd (8031 JP) today announced they would buy out Nippon Steel & Sumikin Bussan (9810 JP), their steel-trading subsidiary. 
  • The shares trade near an all-time high, but Nippon Steel is paying an 87% premium. (Interestingly, the high end of the DCF ranges suggest a 280% premium)
  • On fundamentals, this could have been higher, but given the shareholder structure, I expect it is a done deal as-is. The Tender Offer should start in February 2023.

ENEOS to Buy Out Tatsuta Electric (5809) At 74% Premium

By Travis Lundy

  • ENEOS Holdings (5020 JP) and subsidiary JX Nippon Mining & Metals Corporation announced today it would buy out minorities in miner and refiner Tatsuta Elec Wire & Cable (5809 JP). 
  • The Tender Offer comes at a 74% premium for their 37% sub. 5% off a 2yr high, 10% off a 20-year high. This is likely to be a “done deal”. 
  • JX probably starts with ~55% in the bag out of the 66.7% minimum. But the tender doesn’t start for ~ 6 months. Separately, importantly, there is a precedent here.

Toshiba (6502 JP): Sanctions on YMTC Help Kioxia

By Scott Foster

  • The U.S. government put YMTC on its Entity List in early December, effectively cutting it off from U.S. semiconductor equipment companies and other U.S. technology.
  • YMTC’s Xtacking architecture was good enough for Apple, but it will now have trouble maintaining its 5% market share, let alone ramping up production of its new 232-layer device.
  • This will take some of the competitive pressure off Kioxia and benefit Toshiba, which owns 41% of its shares.

Nippon Steel Trading’s (9810 JP) JPY9,300 Tender Offer from Nippon Steel

By Arun George

  • Nippon Steel & Sumikin Bussa (9810 JP) has recommended Nippon Steel Corporation (5401 JP)’s tender at JPY9,300 per share, an 87.5% premium to the undisturbed price and an all-time high.
  • The transaction is a two-step acquisition through a cash tender offer and subsequent squeeze-out. The lower limit of the offer has been set to meet the 66.67% ownership ratio.
  • Mitsui & Co Ltd (8031 JP) will retain its 19.93% stake and together with Nippon Steel account for 55.01% of outstanding shares. Tender starts in late-February subject to antitrust clearances.

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Dec 22
0

Daily Brief TMT/Internet: Appier Group, Xiaomi Corp, Grab, Delta Electronics Thai, Tokyo Stock Exchange Tokyo Price Index Topix, WCP, Doctor Anywhere, Activolabs, Protean and more

By | Daily Briefs, TMT/Internet

In today’s briefing:

  • Appier (4180) – Down But Not Out; Shareholder Structure Still The Biggest Risk
  • Xiaomi: Massive Layoffs to Rescue Falling Margins
  • Grab (GRAB IJ) – Moving Forward on a Number of Fronts
  • Thailand SET 50 Dec 22 Rebal: Good Hit Rate, Successful Pre-Event Trade, Unwind Now
  • The Attitude Toward Information Disclosure May Make a Further Difference in Stock Valuations
  • TIGER (WISE) Secondary Battery ETF Rebalancing in January: Names to Watch
  • Doctor Anywhere Acquires SG Healthcare Provider, Nets $38.8m Funding
  • Aktivolabs scores US$10M Series A to help populations manage risk of chronic diseases
  • Protean EGov Technologies Pre-IPO – A Key Service Provider but Earnings Have Lagged

Appier (4180) – Down But Not Out; Shareholder Structure Still The Biggest Risk

By Travis Lundy

  • Appier Group (4180 JP) had been among our picks for TSE Prime promotion and we had recommended positioning for it. That worked. On 8 Dec they announced the promotion.
  • The company is now part of TSE Prime which means a TOPIX Inclusion at end-January and an upweight in April. More than 20% of TSE float to buy by end-April.
  • Share price performance has not kept pace with potential, and yesterday’s BOJ decision saw a flurry of volume selling (bailing). Pre-IPO holder overhang may be the biggest “risk” here.

Xiaomi: Massive Layoffs to Rescue Falling Margins

By Shifara Samsudeen, ACMA, CGMA

  • Several news media outlets reported that Xiaomi Corp (1810 HK) has started laying off about 10-15% of its employees across several units of its smartphone and internet services businesses.
  • Xiaomi’s margins have come under pressure with entering into the premium smartphones segment which has resulted in aggressive expansion of offline stores.
  • The company’s 3Q2022 revenues declined 9.7% YoY as a result of decrease in revenue from all three business segments while margins further dropped compared to 3Q2021.

Grab (GRAB IJ) – Moving Forward on a Number of Fronts

By Angus Mackintosh

  • Our recent update with Grab (GRAB US) management revealed a number of interesting product-led initiatives that will drive future growth and customer retention as well as save on costs. 
  • Grab (GRAB US) has already seen significant progress on Grab Unlimited given its link to promos plus it is focusing on higher-spending customers to reduce the need for subsidies.
  • The company’s valuations look attractive relative to growth and considering it is moving more quickly towards profitability plus it has more than ample cash to make it there.

Thailand SET 50 Dec 22 Rebal: Good Hit Rate, Successful Pre-Event Trade, Unwind Now

By Janaghan Jeyakumar, CFA

  • The index changes for the Thailand SET Index (SET INDEX) for the December 2022 Rebalance were announced yesterday (20th December 2022) after the close.
  • There will be four ADDs/DELs for the SET 50 index. 
  • In this insight, we take a closer look at our expectations for index flows and potential trading ideas.

The Attitude Toward Information Disclosure May Make a Further Difference in Stock Valuations

By Aki Matsumoto

  • The less frequently information is disclosed, the greater the impact of single disclosure on stock prices. Fewer quarterly disclosure reduces trading volume, which will have negative impact on stock valuations.
  • Companies listed on U.S. market will continue quarterly disclosure, while companies with limited human resources won’t adopt quarterly disclosure. Even within the same sector, companies may adopt different disclosure attitudes.
  • Metrical’s analysis shows that the IR factor is highly positively correlated with Tobin’s q. Also, different disclosure stances may emerge depending on the ratio of foreign shareholders.

TIGER (WISE) Secondary Battery ETF Rebalancing in January: Names to Watch

By Sanghyun Park

  • The key to this rebalancing is the inclusion of WCP, which satisfies the requirements of minimum listing period and secondary battery sales amount.
  • As a hedge for the LONG WCP position, we can use Soulbrain and Solus Advanced, whose passive outflow is relatively high among those of a similar size to WCP.
  • Among large caps, we should pay attention to L&F, Posco Chemical, and Iljin Materials. However, we should be cautious about approaching them as an active trading target.

Doctor Anywhere Acquires SG Healthcare Provider, Nets $38.8m Funding

By Tech in Asia

  • Singapore-headquartered Doctor Anywhere (DA) is set to acquire medical services group Asian Healthcare Specialists (AHS) in a cash deal valued at about S$109 million (US$76.7 million) at an offer price of S$0.188 (US$0.13) per share.
  • The healthtech firm has also announced a US$38.8 million series C1 financing round led by Novo Holdings to partly fund the AHS acquisition and accelerate growth.
  • According to DA’s financial statements, the company’s revenue hit S$31.9 million in 2021, an over 2.8x growth from the previous year

Aktivolabs scores US$10M Series A to help populations manage risk of chronic diseases

By e27

  • Singapore-based digital health-science company Aktivolabs has secured US$10 million in a Series A round of investment led by Mitsui & Co, Adaptive Capital Partners, and SEEDS Capital.
  • The company will develop the existing algorithm and data-analytics programme to enhance the efficiency and accuracy of predicting, preventing and self-managing chronic disease using digital biomarkers.
  • The platform harnesses real-time digital health data elements in a low-touch, cost-effective manner with measurable actuarial and actionable value to life and health insurers.

Protean EGov Technologies Pre-IPO – A Key Service Provider but Earnings Have Lagged

By Sumeet Singh

  • Protean eGov Technologies (PET) is looking to raise up to US$600m in its upcoming India IPO.
  • Protean eGov Technologies (PET) is a key IT-enabled solutions company in India engaged in conceptualizing, developing and executing nationally critical greenfield technology solutions. 
  • In this note, we look at the company’s past performance.

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Dec 22
0

Daily Brief Industrials: Nippon Steel Trading Corporation, Tatsuta Electric Wire & Cable, Toshiba Corp and more

By | Daily Briefs, Industrials

In today’s briefing:

  • Nippon Steel & Mitsui & Co to Buy Out Nippon Steel Trading (9810) At 87% Premium
  • ENEOS to Buy Out Tatsuta Electric (5809) At 74% Premium
  • Toshiba (6502 JP): Sanctions on YMTC Help Kioxia
  • Nippon Steel Trading’s (9810 JP) JPY9,300 Tender Offer from Nippon Steel

Nippon Steel & Mitsui & Co to Buy Out Nippon Steel Trading (9810) At 87% Premium

By Travis Lundy

  • Nippon Steel Corporation (5401 JP) and Mitsui & Co Ltd (8031 JP) today announced they would buy out Nippon Steel & Sumikin Bussan (9810 JP), their steel-trading subsidiary. 
  • The shares trade near an all-time high, but Nippon Steel is paying an 87% premium. (Interestingly, the high end of the DCF ranges suggest a 280% premium)
  • On fundamentals, this could have been higher, but given the shareholder structure, I expect it is a done deal as-is. The Tender Offer should start in February 2023.

ENEOS to Buy Out Tatsuta Electric (5809) At 74% Premium

By Travis Lundy

  • ENEOS Holdings (5020 JP) and subsidiary JX Nippon Mining & Metals Corporation announced today it would buy out minorities in miner and refiner Tatsuta Elec Wire & Cable (5809 JP). 
  • The Tender Offer comes at a 74% premium for their 37% sub. 5% off a 2yr high, 10% off a 20-year high. This is likely to be a “done deal”. 
  • JX probably starts with ~55% in the bag out of the 66.7% minimum. But the tender doesn’t start for ~ 6 months. Separately, importantly, there is a precedent here.

Toshiba (6502 JP): Sanctions on YMTC Help Kioxia

By Scott Foster

  • The U.S. government put YMTC on its Entity List in early December, effectively cutting it off from U.S. semiconductor equipment companies and other U.S. technology.
  • YMTC’s Xtacking architecture was good enough for Apple, but it will now have trouble maintaining its 5% market share, let alone ramping up production of its new 232-layer device.
  • This will take some of the competitive pressure off Kioxia and benefit Toshiba, which owns 41% of its shares.

Nippon Steel Trading’s (9810 JP) JPY9,300 Tender Offer from Nippon Steel

By Arun George

  • Nippon Steel & Sumikin Bussa (9810 JP) has recommended Nippon Steel Corporation (5401 JP)’s tender at JPY9,300 per share, an 87.5% premium to the undisturbed price and an all-time high.
  • The transaction is a two-step acquisition through a cash tender offer and subsequent squeeze-out. The lower limit of the offer has been set to meet the 66.67% ownership ratio.
  • Mitsui & Co Ltd (8031 JP) will retain its 19.93% stake and together with Nippon Steel account for 55.01% of outstanding shares. Tender starts in late-February subject to antitrust clearances.

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Dec 22
0

Daily Brief Financials: Jafco Co Ltd, Nikkei 225, First Pacific Co and more

By | Daily Briefs, Financials

In today’s briefing:

  • JAFCO (8595) Succumbs to Even Worse Greenmail – SPECTACULARLY BAD Governance
  • NKY and JPY Trades and Thresholds
  • Morning Views Asia: First Pacific Co

JAFCO (8595) Succumbs to Even Worse Greenmail – SPECTACULARLY BAD Governance

By Travis Lundy

  • Jafco Co Ltd (8595 JP) was the target of activist Murakami-san in August 2022. They threatened a poison pill. Murakami-san sold, then bought to 19.5%. They negotiated. He won.
  • His result excluded others. The market did not take it well. Murakami-san rejected taking a 1% hit to original terms (vs reference NAV). JAFCO went back to the drawing board. 
  • Then submitted to greenmail at a higher price. The first buyback was agreed at ¥2,500 vs ¥2,651 NAV. The new one? ¥2,730-2,840 vs ¥2,513 NAV. Inexplicable – Spectacularly Bad Governance.

NKY and JPY Trades and Thresholds

By Thomas Schroeder

  • Nikkei was touted as our top short bet in Asia and has panned out nicely. 27k sell resistance for a test on sub 26k to probe for a bull reversal.
  • USD/JPY sell an uptick near 134. PT at sub 131 and 129.50. Jury still out as to the policy impact on global rates/equities. We are trading a lot like 2018.
  • Taiwan and Nifty short targets are reiterated. SPX and NDX levels are in line but price action remains poor to bearish.

Morning Views Asia: First Pacific 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.

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Dec 22
0

Daily Brief Consumer: Ryohin Keikaku, S.M.Entertainment Co, Sula Vineyards, Varun Beverages Ltd, JD Health and more

By | Consumer, Daily Briefs

In today’s briefing:

  • Ryohin Keikaku: Beat On The Cards, Big Moves To Follow
  • Mandatory Offer Arrives in Korea: Detailed Rules & Trading Ramifications
  • Sula Vineyards IPO Trading – Not a Whole Lot to Cheer About
  • AMFI Stock Reclassification Preview (Dec 2022): A Bunch of Migrations
  • JD Health (6618.HK) – Some Positive Updates in Business

Ryohin Keikaku: Beat On The Cards, Big Moves To Follow

By Oshadhi Kumarasiri

  • Ryohin Keikaku (7453 JP) rose 24% following an earnings beat in the previous quarter. However, the share price progression afterwards was less than we anticipated.
  • Our analysis points to one more big earnings beat as consensus is still conservative on cost assumptions.
  • We think Ryohin Keikaku could take another big stride towards our target price following 1QFY23 results, due on the first week of January 2023.

Mandatory Offer Arrives in Korea: Detailed Rules & Trading Ramifications

By Sanghyun Park

  • The target is those who purchase 25% or more of the shares of a listed company and become the largest shareholder with management rights.
  • The minimum volume of a mandatory offer is [(50% of total shares + 1 share) – the management right purchase volume].
  • We will be exposed to pro-rata risk, so it will be essential to figure out the nature and propensity of the shareholder composition to estimate the tendering rate in advance.

Sula Vineyards IPO Trading – Not a Whole Lot to Cheer About

By Sumeet Singh

  • Sula Vineyards raised around US$117m in its India IPO, although demand wasn’t all that great.
  • Sula Vineyards (SV) distributes wines under a bouquet of brands. In addition to its flagship brand “Sula,” popular brands include “RASA,” “Dindori”, “The source,” “Satori”, “Madera” & “Dia”. 
  • We have looked at various aspects of the deal in our previous notes. In this note, we will talk about demand and trading dynamics.

AMFI Stock Reclassification Preview (Dec 2022): A Bunch of Migrations

By Brian Freitas

  • Near the end of the review period, we see 7 stocks moving from MidCap to LargeCap, 6 from LargeCap to MidCap, 8 from SmallCap to MidCap and vice versa.
  • One spin-off should be added to the MidCap segment, while a bunch of recent listings will be added to the SmallCap segment.
  • Stock migrating upwards have outperformed stocks migrating downwards and we expect there could be some mean reversion from the middle of January.

JD Health (6618.HK) – Some Positive Updates in Business

By Xinyao (Criss) Wang

  • JD Health (6618 HK) is on the right track in terms of business model and investment logic. The Company has also begun to enter a virtuous circle in financial performance.
  • There were some positive business updates in term of To B business in 22Q1-Q3, which would bring JD Health closer to establishing a complete “retail pharmacy + healthcare service” ecosystem.
  • For trading strategy, at present, considering the complex external environment, we recommend investors to do short-term trade, rather than long-term hold.

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