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Smartkarma Daily Briefs

Dec 08
0

Daily Brief ESG: ORIX Has Responsibility to Explain Transformation of DHC into a Company that Respects Human Rights and more

By | Daily Briefs, ESG

In today’s briefing:

  • ORIX Has Responsibility to Explain Transformation of DHC into a Company that Respects Human Rights

ORIX Has Responsibility to Explain Transformation of DHC into a Company that Respects Human Rights

By Aki Matsumoto

  • The difference is obvious when compared to Fancl’s case. While Fancl chose to form capital alliance with Kirin (less than 1/3 ownership), All DHC shares will be transferred to ORIX.
  • We believe that many of the buyer companies were concerned about the negative impact of consolidating DHC with Yoshida, who has repeatedly made discriminatory remarks.
  • ORIX is required to show the future management strategy of DHC, and ORIX is responsible for explaining the transformation of DHC into a company that respects human rights.

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Dec 08
0

Daily Brief Credit: Morning Views Asia: China Jinmao Holdings and more

By | Credit, Daily Briefs

In today’s briefing:

  • Morning Views Asia: China Jinmao Holdings, Greenland Holdings Corp, Sunac China Holdings

Morning Views Asia: China Jinmao Holdings, Greenland Holdings Corp, Sunac China Holdings

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 08
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Daily Brief Quantitative Analysis: Are Alternative ETFs Good Diversifiers? and more

By | Daily Briefs, Quantitative Analysis

In today’s briefing:

  • Are Alternative ETFs Good Diversifiers?

Are Alternative ETFs Good Diversifiers?

By Nicolas Rabener

  • Alternative products with uncorrelated returns do not necessarily provide diversification benefits
  • Out of 10 alternative ETFs, only one product improved the Sharpe ratio of a 60/40 portfolio
  • And correlations should be regarded carefully in the fund selection process

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Dec 08
0

Daily Brief Thematic (Sector/Industry): Good Morning Japan | Directionless Equities; As China Normalizes; Carvana Bankruptcy Imminent and more

By | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

  • Good Morning Japan | Directionless Equities; As China Normalizes; Carvana Bankruptcy Imminent
  • Mining Monthly: November Edition

Good Morning Japan | Directionless Equities; As China Normalizes; Carvana Bankruptcy Imminent

By Mark Chadwick

  • Good Morning Japan:  We strive to provide the best macro, stock and thematic overnight news that impacts your trading day in Japan. FOLLOW TO KEEP ABREAST.
  • OVERSEAS:  SPX holding 100D; Trading in tight range at support; Focus on now recession risks; China continues to normalize around COVID; Microsoft tries to appease regulators; Carvana facing bankruptcy 
  • JAPAN: NKY futs -0.4% vs cash;  USDJPY ¥136.5;  Quiet ahead of major SQ; ANA  hiring again;  KEPCO set to restart Genkai; Hitachi canxl treasury shares; Nintendo strikes deal  with MSFT

Mining Monthly: November Edition

By Atrium Research

  • Producers, developers, and explorers continue to trade at low multiples.
  • These low multiples make for great buying opportunities; there are plenty of standout winners despite the weak performance
  • We anticipate the number of bankruptcies to rise as companies struggle to raise funds and treasuries dwindle

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Dec 08
0

Daily Brief Macro: CX Daily: China Relaxes Restrictions on Overseas Loans so Developers Can Repay Dollar Bonds and more

By | Daily Briefs, Macro

In today’s briefing:

  • CX Daily: China Relaxes Restrictions on Overseas Loans so Developers Can Repay Dollar Bonds
  • Korean Equity Indices Rebalances – A Year in Review (2022)
  • The BIS ”Hidden USD Debt” Story Explained

CX Daily: China Relaxes Restrictions on Overseas Loans so Developers Can Repay Dollar Bonds

By Caixin Global

  • China relaxes restrictions on overseas loans so developers can repay dollar bonds. 

  • Beijing scraps Covid test requirement for public places.

  • Former Caixin deputy editor-in-chief Zhang Jin dies at 56.

Korean Equity Indices Rebalances – A Year in Review (2022)

By Douglas Kim

  • In this insight, we discuss the price performance actions of 31 stocks that have been rebalanced in both the KOSPI 200 and MSCI Korea Index in 2022.
  • Of these 31 stocks, 18 of them are the KOSPI 200 index changes and 13 of them are for the MSCI Korea Index changes.
  • Some alpha generating performances continue in terms of adding stocks to be included in the KOSPI 200 and MSCI Korea index rebalances and reducing stocks that could be excluded.

The BIS ”Hidden USD Debt” Story Explained

By The Macro Compass

  • Our monetary and credit system is USD-centric: the lion share of international debt, trade invoices, asset classes and FX volume is settled or denomnated in US Dollars.
  • Funnily enough though, direct access to $ liquidity is only available to entities located in the United States but in a credit-based system the rest of the world also has an incentive to leverage in US Dollars to boost or enhance their global business models.
  • That means European banks, Brazilian corporates or Japanese insurance companies which want to do global business will most likely get exposure to $-denominated assets and liabilities ($ debt) despite being domiciled outside the United States.

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Dec 08
0

Daily Brief Equity Bottom-Up: Shimano (7309) | Value Drivers in an Age of Sobriety and more

By | Daily Briefs, Equity Bottom-Up

In today’s briefing:

  • Shimano (7309) | Value Drivers in an Age of Sobriety
  • JD Logistics (2618 HK): 3Q22 High Growth, Not Just Acquired But Organic, 29% Upside
  • Anta Sports (2020 HK): Assessing the Impact of a Potential Amer Sports IPO
  • Bank Central Asia (BBCA IJ) – The Mother of Connection
  • Mexican Banks’ October Data and Trends – Credit Spread Erosion a Bigger Threat than Credit Quality?
  • Kroger Co: Merger With Albertsons & Other Drivers
  • Wentworth Resources Plc (AIM: WEN): Proposed Acquisition by Maurel & Prom
  • General Mills: Delivering High Returns During Market Downturns
  • Marvell Technologies: New Product Launch & Other Drivers
  • NetApp Inc: The BlueXP Launch & Other Drivers

Shimano (7309) | Value Drivers in an Age of Sobriety

By Mark Chadwick

  • Shimano’s stock has declined by 26% YTD reflecting concerns over an economic recession and sales normalization post pandemic
  • We believe that Shimano is a key beneficiary of government policy aimed at decarbonization
  • We analyse Shimano’s core value drivers and see at around 23% upside for the stock

JD Logistics (2618 HK): 3Q22 High Growth, Not Just Acquired But Organic, 29% Upside

By Ming Lu

  • The growth rate of total revenue accelerated in the third quarter of 2022.
  • We believe the organic growth was also strong besides the acquisition of Deppon.
  • We set an upside of 29% and a price target of HK$19.90.

Anta Sports (2020 HK): Assessing the Impact of a Potential Amer Sports IPO

By Osbert Tang, CFA

  • The potential IPO of Anta Sports Products (2020 HK)‘s 52.7% owned Amer Sports is positive in unlocking the latter’s underlying value, though the impact is quite limited.
  • Assuming a P/S of 1.8x (30% discount to peers) and 25% enlargement in share capital, we estimate the exercise may bring ~HK$6n of potential pre-tax deemed disposal gain.
  • Although Anta Sports may not receive any cash, it can still pay out special dividends given its Rmb12bn net cash, and this will raise FY23 dividend yield to 3.1%.  

Bank Central Asia (BBCA IJ) – The Mother of Connection

By Angus Mackintosh

  • A conversation with Bank Central Asia post results revealed some interesting near term and longer-term trends and initiatives as the economy recovers and it takes the brakes off lending.
  • BIFAST for instant transfers 24-7 with lower fees will impact the bank’s fee income, although volume increases offset the impact plus BCA is gaining a share of transactions.
  • Bank Central Asia‘s strategy is to follow its customers and enable their financial journey through connecting to an ever broader ecosystem. Valuations look more reasonable rolling into 2023.

Mexican Banks’ October Data and Trends – Credit Spread Erosion a Bigger Threat than Credit Quality?

By Victor Galliano

  • Bank sector trends to October continue to be sound, but return headwinds are emerging; further tightening credit spreads and initial signs of worsening in consumer credit quality
  • To October, funding costs are rising faster than loan yields, crimping credit spreads, and the rising credit card cost of risk indicates a worsening outlook for consumer credit quality
  • BBVA Mexico generates consistent premium ROE of 25%+, investors can gain exposure through BBVA equity; we continue to be cautious on Banorte, and we recommend taking profits on BanBajio

Kroger Co: Merger With Albertsons & Other Drivers

By Baptista Research

  • Kroger announced another quarter of quite strong results powered by its strategy of accelerating with digital and leading with fresh.
  • Kroger, along with Albertsons Companies, announces a definitive merger agreement whereby the companies will merge two complementary organizations with deep roots and iconic brands in their local communities.
  • It launched its foremost in-app flash sales and also enabled its customers to clip the digital offers from their cart directly.

Wentworth Resources Plc (AIM: WEN): Proposed Acquisition by Maurel & Prom

By Auctus Advisors

  • Maurel & Prom has made an offer to acquire Wentworth for 32.5 p per share in cash, valuing Wentworth at £61.7 mm.
  • Deducting the cash value from the offer price suggests an offer price of 19.6 p per share for Wentworth’s non cash assets.
  • This compares to a read through value of Wentworth’s non cash assets based on the share price of Wentworth on 2 December of p per share (25 p less12.9 p).

General Mills: Delivering High Returns During Market Downturns

By Vladimir Dimitrov, CFA

  • General Mills has significantly outperformed the broader equity market and the consumer staples industry as a whole.
  • The share price seems to be running ahead of fundamentals which reduces expected returns going forward.
  • The company would also need to dial-up investments in the coming year to secure its strong competitive positioning, according to the company.

Marvell Technologies: New Product Launch & Other Drivers

By Baptista Research

  • In the last quarter, Marvell delivered a disappointing result as its revenues and earnings failed to meet Wall Street expectations.
  • The company’s top-line continues to be driven by its auto, 5G, and cloud businesses.
  • On a sequential basis, the data center revenue of the company declined because of softness in its on-premise business.

NetApp Inc: The BlueXP Launch & Other Drivers

By Baptista Research

  • NetApp generated a mixed set of results for the last quarter as it failed to meet Wall Street expectations with respect to revenues and billings but managed an earnings beat.
  • It is evident that their cloud services’ growth has slowed down.
  • Besides, they have significantly adjusted their revenue projection for the remaining months of the fiscal year in light of impending economic headwinds.

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Dec 08
0

Daily Brief Event-Driven: HDFC AMC: Abrdn’s Potential Placement & Index Implications and more

By | Daily Briefs, Event-Driven

In today’s briefing:

  • HDFC AMC: Abrdn’s Potential Placement & Index Implications
  • Xingda Int’l (1899 HK): Kicking The Tyres
  • HSTECH Index Rebalance Preview: Tongcheng Travel (780 HK) Could Replace Ming Yuan Cloud (909 HK)
  • TOPIX Inclusions: Who Is Ready (Dec 2022)
  • Yearend Dividend Play on Korean Stocks with High Yield/Borrow Rate
  • Xingda (1899 HK)’s Partial Offer from Management to Seize Statutory Control
  • Xingda International (1899 HK)’s to Draw a Privatisation Bid from Management?
  • Xingda Int’l (1899 HK): Partial MBO

HDFC AMC: Abrdn’s Potential Placement & Index Implications

By Brian Freitas

  • Abrdn PLC (ABDN LN) is looking to sell its entire 10.21% stake in HDFC Asset Management (HDFCAMC IN) following which it will no longer be a sponsor of HDFC MF.
  • Depending on who the stake is sold to, there could be an immediate increase in the investability weight in the FTSE All-World Index.
  • More importantly, the increased free float will result in an increase in the FIF for the MSCI Standard Index and index inclusion could take place in February.

Xingda Int’l (1899 HK): Kicking The Tyres

By David Blennerhassett

  • Xingda International (1899 HK) is currently suspended “pursuant to The Hong Kong Code on Takeovers and Mergers“.
  • The controlling shareholders – more commonly known as the Five Parties – hold 45.6% of shares out. 
  • Two years ago, Xingda sought to spin-off its key operating vehicle. Perhaps the Five Parties are privatising Xingda, then IPOing Xingda Steel Tyre Cord. Or, cashing out their positions.

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

By Brian Freitas

TOPIX Inclusions: Who Is Ready (Dec 2022)

By Janaghan Jeyakumar, CFA

  • Quiddity’s “Who is Ready” series of insights aims to objectively identify names listed on the Tokyo Stock Exchange that are potential additions to the TOPIX Index in future.
  • This insight is a follow-up to TOPIX Inclusions: Who Is Ready (Oct 2022) 
  • At present, there are 60 names that satisfy all of these conditions and there are more names that are close to being in that group.

Yearend Dividend Play on Korean Stocks with High Yield/Borrow Rate

By Sanghyun Park

Xingda (1899 HK)’s Partial Offer from Management to Seize Statutory Control

By Arun George

  • Xingda International (1899 HK) disclosed a partial offer from management to acquire a maximum of 80.0 million shares at HK$1.88 per share, a 24.50% premium to the undisturbed price.
  • The pre-condition is Executive approval. The partial offer is conditional on the offeror hitting 50.01% voting rights and approval by the requisite majority of shareholders on the acceptance form. 
  • The partial offer is an opportunistic foray to seize statutory control as it would not be sufficiently enticing to overcome FIL’s 9.99% blocking stake in a privatisation scheme.

Xingda International (1899 HK)’s to Draw a Privatisation Bid from Management?

By Arun George

  • Xingda International (1899 HK) entered a trading halt pending the release of an announcement under the Hong Kong Code on Takeovers and Mergers. 
  • It is likely that the management, representing 45.60% of ordinary shares (through a five parties agreement), is seeking to privatise Xingda.
  • The bid is likely privatisation through a scheme. Due to FIL’s blocking stake, a decent premium is required, such as an offer approaching HK$2.00 (33% premium to the last close).  

Xingda Int’l (1899 HK): Partial MBO

By David Blennerhassett

  • Late night Xingda (1899 HK) announced a partial Offer from a consortium comprising management  – known as the Five parties – at HK$1.88/share – a 24.5% premium to last close. 
  • The consortium – widely known as the Five Parties – currently holds 45.6%, and the intention of the Offer is to hold 50.01%, or a controlling stake.
  • There is a minimum/maximum number shares to be acquired under the Offer. I’d expect the minimum acceptance condition to be met.

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Dec 08
0

Daily Brief Energy/Materials: Wentworth Resources and more

By | Daily Briefs, Energy & Materials Sector

In today’s briefing:

  • Wentworth Resources Plc (AIM: WEN): Proposed Acquisition by Maurel & Prom

Wentworth Resources Plc (AIM: WEN): Proposed Acquisition by Maurel & Prom

By Auctus Advisors

  • Maurel & Prom has made an offer to acquire Wentworth for 32.5 p per share in cash, valuing Wentworth at £61.7 mm.
  • Deducting the cash value from the offer price suggests an offer price of 19.6 p per share for Wentworth’s non cash assets.
  • This compares to a read through value of Wentworth’s non cash assets based on the share price of Wentworth on 2 December of p per share (25 p less12.9 p).

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Dec 08
0

Daily Brief TMT/Internet: Tongcheng-Elong Holdings Ltd, Appier Group, Salesforce.Com Inc, Synopsys Inc, Crowdstrike Holdings Inc, Zscaler, Hewlett Packard Enterprise Co, Marvell Technology Group Ltd, Workday Inc Class A, Netapp Inc and more

By | Daily Briefs, TMT/Internet

In today’s briefing:

  • HSTECH Index Rebalance Preview: Tongcheng Travel (780 HK) Could Replace Ming Yuan Cloud (909 HK)
  • TOPIX Inclusions: Who Is Ready (Dec 2022)
  • Salesforce Inc: New Real-Time CRM Platform & Other Drivers
  • Synopsys Inc: Collaboration With SiFive & Other Drivers
  • CrowdStrike Inc: Major Drivers
  • Zscaler Inc: Zero Configuration Data Protection & Other Developments
  • Hewlett Packard Enterprises: New Product Launches & Other Drivers
  • Marvell Technologies: New Product Launch & Other Drivers
  • Workday Inc: Cloud Transition Collaboration With KPMG & Other Drivers
  • NetApp Inc: The BlueXP Launch & Other Drivers

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

By Brian Freitas

TOPIX Inclusions: Who Is Ready (Dec 2022)

By Janaghan Jeyakumar, CFA

  • Quiddity’s “Who is Ready” series of insights aims to objectively identify names listed on the Tokyo Stock Exchange that are potential additions to the TOPIX Index in future.
  • This insight is a follow-up to TOPIX Inclusions: Who Is Ready (Oct 2022) 
  • At present, there are 60 names that satisfy all of these conditions and there are more names that are close to being in that group.

Salesforce Inc: New Real-Time CRM Platform & Other Drivers

By Baptista Research

  • Salesforce’s stock has been badly hit by the general bearishness in the markets towards tech stocks and is trading at a low.
  • However, the company’s results were decent as it delivered strong sales growth and profitability surpassing Wall Street expectations on all fronts.
  • This quarter, the ARR increased by more than 50% in seven of their 13 industry clouds.

Synopsys Inc: Collaboration With SiFive & Other Drivers

By Baptista Research

  • Synopsys ended the year with a decent result meeting the revenue expectations of Wall Street and managing an earnings beat.
  • The company reached the $5 billion yearly revenue milestone during this quarter as they extended customer relationships and altered their product lineup in order to sharpen their competitive edge.
  • Despite a slowdown in revenue growth for the semiconductor business, design activity is still strong.

CrowdStrike Inc: Major Drivers

By Baptista Research

  • CrowdStrike had a solid quarter increasing its revenue by 53% year-over-year, surpassing Wall Street expectations.
  • In the enterprise, sales cycles or average days to closure remain marginally higher than the previous quarter.
  • Furthermore, LogScale experienced another solid quarter in Q3 thanks to their wins in the financial services, insurance, technology, retail, energy, and telecommunications industries.

Zscaler Inc: Zero Configuration Data Protection & Other Developments

By Baptista Research

  • Zscaler delivered good results in the last quarter surpassing Wall Street expectations in terms of revenues as well as earnings.
  • Consumers are buying Zscaler for users, its complete platform for user protection, including ZDX, ZPA, and ZIA bundled together.
  • We provide the stock of Zscaler a ‘Buy’ rating and a revision in the target price.

Hewlett Packard Enterprises: New Product Launches & Other Drivers

By Baptista Research

  • Hewlett Packard Enterprises had a decent fourth quarter as its revenues managed to surpass Wall Street expectations and strong quarterly free cash flow.
  • The company managed to meet Wall Street expectations with respect to earnings.
  • We remain neutral on Hewlett Packard Enterprises and maintain our ‘Hold’ rating with a revised target price.

Marvell Technologies: New Product Launch & Other Drivers

By Baptista Research

  • In the last quarter, Marvell delivered a disappointing result as its revenues and earnings failed to meet Wall Street expectations.
  • The company’s top-line continues to be driven by its auto, 5G, and cloud businesses.
  • On a sequential basis, the data center revenue of the company declined because of softness in its on-premise business.

Workday Inc: Cloud Transition Collaboration With KPMG & Other Drivers

By Baptista Research

  • Workday delivered another solid quarter and managed an all around beat.
  • The company’s APA won over a number of clients, including Trip.com, Fletcher Building, Bank of Queensland, and a pharmaceutical company.
  • During the quarter, they also disclosed their collaboration with KPMG to launch Industry Accelerators in two important corporations, including banking and healthcare, based on their Industry Accelerator program.

NetApp Inc: The BlueXP Launch & Other Drivers

By Baptista Research

  • NetApp generated a mixed set of results for the last quarter as it failed to meet Wall Street expectations with respect to revenues and billings but managed an earnings beat.
  • It is evident that their cloud services’ growth has slowed down.
  • Besides, they have significantly adjusted their revenue projection for the remaining months of the fiscal year in light of impending economic headwinds.

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Dec 08
0

Daily Brief Industrials: JD Logistics and more

By | Daily Briefs, Industrials

In today’s briefing:

  • JD Logistics (2618 HK): 3Q22 High Growth, Not Just Acquired But Organic, 29% Upside

JD Logistics (2618 HK): 3Q22 High Growth, Not Just Acquired But Organic, 29% Upside

By Ming Lu

  • The growth rate of total revenue accelerated in the third quarter of 2022.
  • We believe the organic growth was also strong besides the acquisition of Deppon.
  • We set an upside of 29% and a price target of HK$19.90.

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