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Smartkarma Daily Briefs

Nov 22
0

Daily Brief ECM: Lygend Resources & Technology IPO – Margins Expected to Expand and more

By | Daily Briefs, ECM

In today’s briefing:

  • Lygend Resources & Technology IPO – Margins Expected to Expand, Enticing at the Bottom End
  • Ant Group: Consumer Finance Finds Investors But Beijing Could Throw New Obstacles At Ant’s Direction
  • Lygend Resources & Technology IPO: Valuation Insights
  • Daiei Kankyo Pre-IPO – Peer Comparison and Thoughts on Valuation

Lygend Resources & Technology IPO – Margins Expected to Expand, Enticing at the Bottom End

By Clarence Chu

  • Lygend Resources & Technology (LR HK) is looking to raise up to US$595m in its Hong Kong IPO.
  • Lygend Resources & Technology (Lygend) is a nickel trading and production firm with a portfolio covering multiple areas across the nickel industry value chain.
  • In this note, we will revisit our earnings assumptions and share our thoughts on valuation.

Ant Group: Consumer Finance Finds Investors But Beijing Could Throw New Obstacles At Ant’s Direction

By Oshadhi Kumarasiri

  • Earlier this year, an RMB 22.0bn fundraising was likely blocked by Beijing with the state-backed asset manager, China Cinda pulling out of the deal at the last moment.
  • Several media outlets reported last week that Ant Group is pushing ahead yet again with an RMB 10.5bn fundraising effort for its Consumer Finance business.
  • This fundraising could yet again face obstacles as Beijing might want Ant Financial Services Group (6688 HK) to surrender a controlling stake in the Consumer Finance business to state-backed firms.

Lygend Resources & Technology IPO: Valuation Insights

By Arun George

Daiei Kankyo Pre-IPO – Peer Comparison and Thoughts on Valuation

By Sumeet Singh

  • Daiei Kankyo (9336 JP) , a waste management company, aims to raise around US$280m in its Japan IPO.
  • Daiei Kankyo is involved in the waste management and related businesses in Japan. The core of its operations consists of its waste management and recycling business.
  • In our previous note, we looked at the company’s past performance. In this note, we undertake a peer comparison and talk about valuations.

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Nov 22
0

Daily Brief Macro: Smartkarma Webinar | Inflation in Europe and more

By | Daily Briefs, Macro

In today’s briefing:

  • Smartkarma Webinar | Inflation in Europe
  • The Week That Was in ASEAN@Smartkarma – Sea Ltd, Grab, and Selamat Sempurna
  • The Commodity Report #78
  • CX Daily: China’s Covid Caseload Hits Six-Month High As Big Cities Suffer Flare-Ups

Smartkarma Webinar | Inflation in Europe

By Smartkarma Research

In the next webinar, we have Smartkarma Insight Provider Phil Rush who will be giving us the full picture of inflation in Europe and its effects on the European economy. Have your burning questions answered in the live Q&A session that will follow after Phil’s presentation. 

The webinar will be hosted on Wednesday, 23 November 2022, 17:00 SGT/HKT.

Philip Rush is the Founder and Chief Economist of Heteronomics. Until launching in November 2016, he was Nomura’s Senior European Economist and was the Chief UK Economist there since 2010. Before that, he was UK Economist at Barclays Wealth, where he also developed strategic asset allocation models for their market return portfolios. Philip started his career at Lehman Brothers covering the UK, Scandinavian and Swiss economies. A book on his fundamental framework was published in January 2018 as “Real Market Economics”.

The Week That Was in ASEAN@Smartkarma – Sea Ltd, Grab, and Selamat Sempurna

By Angus Mackintosh

The Commodity Report #78

By The Commodity Report

  • The Rabobank issued a research note last week where they forecasted that prices for agricultural commodities like coffee, feed grains and oilseeds could dip next year as many major economies enter recession, but also stated that they will remain high in historical terms.
  • We think the general call is correct, but the timing isn’t. We already see this dip move playing out at the moment.
  • Just take a look at coffee, cotton, oil, or copper. We believe this dip in the long-term cyclical bull market will end towards Q2 of 2022 before the rally in many commodity markets resumes again as demand strikes back.

CX Daily: China’s Covid Caseload Hits Six-Month High As Big Cities Suffer Flare-Ups

By Caixin Global

  • Covid-19 / China’s Covid caseload hits six-month high as big cities suffer flare-ups

  • APEC / China, Japan to move quickly on maritime and air security hotline

  • Caixin Summit / China’s growth is ‘too slow,’ says top state economist

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Nov 22
0

Daily Brief Industrials: Taiwan Secom, Far Eastern New Century, Taiwan Glass Industry, Daiei Kankyo, Woodside Energy Group Ltd, True Velocity Ammunition and more

By | Daily Briefs, Industrials

In today’s briefing:

  • FTSE TWSE Dividend+ Dec 22 Quiddity Final Expectations: Crucial Shift in Tracking AUM a GAME CHANGER
  • FTSE TWSE Taiwan 50 Index Rebalance Preview: Far Eastern Could Replace AUO
  • Taiwan Div+ Index Dec22 Rebal Trade Up 6% So Far – Small Changes To Basket But HODL Til The End
  • Daiei Kankyo Pre-IPO – Peer Comparison and Thoughts on Valuation
  • Woodside Energy ADR: Initiation of Coverage – Business Strategy & Key Drivers
  • Ready, Aim, Fire

FTSE TWSE Dividend+ Dec 22 Quiddity Final Expectations: Crucial Shift in Tracking AUM a GAME CHANGER

By Janaghan Jeyakumar, CFA

  • In October 2022, FTSE Russell confirmed that the number of constituents in the FTSE TWSE Taiwan Dividend+ Index will be increased from 30 to 50 during the December 2022 Rebalance.
  • Considering the combined effect of expected index changes and capping flows, there could be 27 potential inflows names and 28 potential outflow names with total one-way flow size of US$2.45bn.
  • There are multiple names on both sides with several days of volume to trade.

FTSE TWSE Taiwan 50 Index Rebalance Preview: Far Eastern Could Replace AUO

By Brian Freitas

Taiwan Div+ Index Dec22 Rebal Trade Up 6% So Far – Small Changes To Basket But HODL Til The End

By Travis Lundy

  • The Taiwan Div+ cutoff date for the data used to calculate the Dec 2022 rebalance was yesterday’s close. Janaghan Jeyakumar, CFA has published two updates. 
  • I recommended a long vs short basket on 26 October. So far that long vs short basket is +6.1%. I recommend adjusting the basket to new names and continuing.
  • Historically, the pattern from cutoff to date to Inclusion and then Inclusion to Inclusion+20 is quite clean. I would not expect differently this time. 

Daiei Kankyo Pre-IPO – Peer Comparison and Thoughts on Valuation

By Sumeet Singh

  • Daiei Kankyo (9336 JP) , a waste management company, aims to raise around US$280m in its Japan IPO.
  • Daiei Kankyo is involved in the waste management and related businesses in Japan. The core of its operations consists of its waste management and recycling business.
  • In our previous note, we looked at the company’s past performance. In this note, we undertake a peer comparison and talk about valuations.

Woodside Energy ADR: Initiation of Coverage – Business Strategy & Key Drivers

By Baptista Research

  • This is our first report on Australian Energy major, Woodside Energy.
  • Increased production volumes and increased pricing resulted in an increase in sales volume.
  • Woodland Energy to collaborate to secure a steady energy supply for Japan.

Ready, Aim, Fire

By subSPAC

  • Since the boom in 2020, SPACs have been instrumental in taking high-risk, technologically disruptive companies public.
  • This includes space startups building rockets focused on carrying payloads to space, Quantum Computing firms creating solutions for challenging tasks, and a host of Electric Vehicle Makers looking to challenge Tesla’s crown in building environmentally sound vehicles.
  • Texas-based True Velocity Ammo, which develops and markets composite-case ammunition, aims to disrupt the highly mature ammunition industry on the same scale as these other emerging firms, delivering lighter and more efficient solutions to the public and military.

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Nov 22
0

Daily Brief Technical Analysis: Asia Long Rotation and more

By | Daily Briefs, Technical Analysis

In today’s briefing:

  • Asia Long Rotation

Asia Long Rotation

By Thomas Schroeder

  • NKY, ASX and H shares have been our top long bets with rotation now favoring Korea and Taiwan (China as well) at the expense of Japan.
  • USD weakness call from DXY 113 and 109 makes Asian equities more attractive into early December and an integral part of our rotation theme.
  • Korea and Taiwan are favored bets on dips. China will run out of steam near A50 12,900 and act as the lead energy driver for Asia.

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Nov 22
0

Daily Brief Industrials: Taiwan Secom, Far Eastern New Century, Taiwan Glass Industry, Daiei Kankyo, Woodside Energy Group Ltd, True Velocity Ammunition and more

By | Daily Briefs, Industrials

In today’s briefing:

  • FTSE TWSE Dividend+ Dec 22 Quiddity Final Expectations: Crucial Shift in Tracking AUM a GAME CHANGER
  • FTSE TWSE Taiwan 50 Index Rebalance Preview: Far Eastern Could Replace AUO
  • Taiwan Div+ Index Dec22 Rebal Trade Up 6% So Far – Small Changes To Basket But HODL Til The End
  • Daiei Kankyo Pre-IPO – Peer Comparison and Thoughts on Valuation
  • Woodside Energy ADR: Initiation of Coverage – Business Strategy & Key Drivers
  • Ready, Aim, Fire

FTSE TWSE Dividend+ Dec 22 Quiddity Final Expectations: Crucial Shift in Tracking AUM a GAME CHANGER

By Janaghan Jeyakumar, CFA

  • In October 2022, FTSE Russell confirmed that the number of constituents in the FTSE TWSE Taiwan Dividend+ Index will be increased from 30 to 50 during the December 2022 Rebalance.
  • Considering the combined effect of expected index changes and capping flows, there could be 27 potential inflows names and 28 potential outflow names with total one-way flow size of US$2.45bn.
  • There are multiple names on both sides with several days of volume to trade.

FTSE TWSE Taiwan 50 Index Rebalance Preview: Far Eastern Could Replace AUO

By Brian Freitas

Taiwan Div+ Index Dec22 Rebal Trade Up 6% So Far – Small Changes To Basket But HODL Til The End

By Travis Lundy

  • The Taiwan Div+ cutoff date for the data used to calculate the Dec 2022 rebalance was yesterday’s close. Janaghan Jeyakumar, CFA has published two updates. 
  • I recommended a long vs short basket on 26 October. So far that long vs short basket is +6.1%. I recommend adjusting the basket to new names and continuing.
  • Historically, the pattern from cutoff to date to Inclusion and then Inclusion to Inclusion+20 is quite clean. I would not expect differently this time. 

Daiei Kankyo Pre-IPO – Peer Comparison and Thoughts on Valuation

By Sumeet Singh

  • Daiei Kankyo (9336 JP) , a waste management company, aims to raise around US$280m in its Japan IPO.
  • Daiei Kankyo is involved in the waste management and related businesses in Japan. The core of its operations consists of its waste management and recycling business.
  • In our previous note, we looked at the company’s past performance. In this note, we undertake a peer comparison and talk about valuations.

Woodside Energy ADR: Initiation of Coverage – Business Strategy & Key Drivers

By Baptista Research

  • This is our first report on Australian Energy major, Woodside Energy.
  • Increased production volumes and increased pricing resulted in an increase in sales volume.
  • Woodland Energy to collaborate to secure a steady energy supply for Japan.

Ready, Aim, Fire

By subSPAC

  • Since the boom in 2020, SPACs have been instrumental in taking high-risk, technologically disruptive companies public.
  • This includes space startups building rockets focused on carrying payloads to space, Quantum Computing firms creating solutions for challenging tasks, and a host of Electric Vehicle Makers looking to challenge Tesla’s crown in building environmentally sound vehicles.
  • Texas-based True Velocity Ammo, which develops and markets composite-case ammunition, aims to disrupt the highly mature ammunition industry on the same scale as these other emerging firms, delivering lighter and more efficient solutions to the public and military.

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  • ✓ Unlimited Research Summaries
  • ✓ Personalised Alerts
  • ✓ Custom Watchlists
  • ✓ Company Data and News
  • ✓ Events & Webinars
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Nov 22
0

Daily Brief Equity Bottom-Up: Sumco (3436) | Bargain Basement and more

By | Daily Briefs, Equity Bottom-Up

In today’s briefing:

  • Sumco (3436) | Bargain Basement
  • China Internet Weekly (21Nov2022): NetEase, Blizzard, Tencent, Meituan, Tencent Music, JD Logistics
  • Mandarin Oriental (MAND SP): Life Is Suite
  • Japan Post Bank – Unrealized Gains Down 95%
  • JD.com (9618 HK): 3Q22, Growth Recovered, Margin Reached Historical High
  • Disney: Could Iger Sell to Apple?
  • Honda Motor ADR: Initiation of Coverage – Recent JVs & Key Drivers
  • Arteria Networks (Buy) – Q2 22 Results Reaction: Core Business Growth Intact
  • Hon Hai & Yulon IPO: Media Reports of Electric Vehicle JV 1Q23 Listing, Stock Implications
  • Ascentage Pharma (6855.HK) – May Not Survive “This Winter”

Sumco (3436) | Bargain Basement

By Mark Chadwick

  • Sumco is a pure play wafer maker that is geared into demand for cutting edge 300mm wafers
  • Sumco is attractive given weak sentiment towards tech, attractive valuation, strong profitability and long-term earnings drivers
  • With the stock down 12% YTD, we believe the stocks is undervalued and see at least 20% upside from here

China Internet Weekly (21Nov2022): NetEase, Blizzard, Tencent, Meituan, Tencent Music, JD Logistics

By Ming Lu

  • The authorization contracts between Activision Blizzard and NetEase will terminate in January 2023.
  • Tencent plans to distribute 91% of its Meituan share as dividend.
  • JD Logistics revenue increased by 39% YoY and Net loss decreased to one tenth.

Mandarin Oriental (MAND SP): Life Is Suite

By David Blennerhassett

  • Hong Kong is – very gradually – rolling back Covid restrictions
  • That’s a welcome relief for tourists, and for hospitality companies dependent on tourism. 
  • Mandarin Oriental International (MAND SP) is trading cheap at 0.7x P/B against 1.8x on average (five years) pre-Covid.

Japan Post Bank – Unrealized Gains Down 95%

By Daniel Tabbush

  • Japan Post Bank continues to see cratering net interest income
  • The company’s significant US CLO exposure is not supporting profit
  • Total unrealized gains on securities are down 95% in the past six months

JD.com (9618 HK): 3Q22, Growth Recovered, Margin Reached Historical High

By Ming Lu

  • The revenue growth rate bounced back to 11% YoY in 3Q22.
  • The operating margin improved to a historical high at 3.1%.
  • We believe the stock price has an upside of 27% for year end 2023.

Disney: Could Iger Sell to Apple?

By Aaron Gabin

  • The suprise return of Bob Iger as Disney CEO can fix certain Bob Chapek specific issues: relationships with investors, politicians, and creative types.
  • But Iger faces similar intractable issues: accelerating cord cutting, a transition to a less profitable form of media distribution, and a potential recession.
  • We think Iger will refocus investors on revenues/profits at Disney+ rather than subscribers, will more efficiently spend on content through decentralizing decision making… and potentially sell Disney to Apple.

Honda Motor ADR: Initiation of Coverage – Recent JVs & Key Drivers

By Baptista Research

  • This is our first report on global automobile behemoth, Honda Motors.
  • The Shanghai lockdown and semiconductor supply shortage resulted in a drop in unit sales and automobile production of Honda in the quarter, mainly in North America and China.
  • However, despite soaring raw material costs and a drop in automobile unit sales, the sales of motorcycle units were up which led to the revenue beat.

Arteria Networks (Buy) – Q2 22 Results Reaction: Core Business Growth Intact

By Kirk Boodry

  • Favorable industry trends like work from home and expanding mobile data usage are helping drive Arteria revenue growth
  • Headline profits are down but core OP is up when one-time gains last year are stripped out and quarterly results will start to look better in H2 when fully lapped
  • Management says macro concerns such as inflation and power costs are manageable and FY targets remain unchanged

Hon Hai & Yulon IPO: Media Reports of Electric Vehicle JV 1Q23 Listing, Stock Implications

By Vincent Fernando, CFA

  • Hon Hai Precision Industry (2317 TT) and Yulon Motor Company (2201 TT) plan to IPO their electric vehicles JV Foxtron Vehicle Technologies in 1Q23E, seeking NT$10bn.
  • The IPO’s valuation could be a major uplift for Yulon Motor Company (2201 TT)‘s valuation. 
  • Hon Hai Precision Industry (2317 TT): Successful IPO would provide markets proof that its EV platform can create value uplifts again and again in the future. Accumulate.

Ascentage Pharma (6855.HK) – May Not Survive “This Winter”

By Xinyao (Criss) Wang

  • The  R&D direction and field of Ascentage Pharma Group Corp (6855 HK) distinguish it from other domestic biotech companies. The Company has proved its R&D capability after the successful launch of olverembatinib.
  • The uncertainties of commercialization performance and R&D risks would make it difficult for Ascentage to achieve break-even. Due to increasing cash flow pressure, Ascentage must first solve the survival problem.
  • Considering the Risk return trade-off, we think Ascentage has short-term investment value only when it’s “extremely undervalued”.We suggest that it could be sold in a timely manner to secure gains.

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Nov 22
0

Daily Brief Event-Driven: FTSE TWSE Taiwan Dividend+ Index Rebalance Preview: 46% One-Way Turnover and US$5bn Two-Way Trade and more

By | Daily Briefs, Event-Driven

In today’s briefing:

  • FTSE TWSE Taiwan Dividend+ Index Rebalance Preview: 46% One-Way Turnover and US$5bn Two-Way Trade
  • FTSE TWSE Dividend+ Dec 22 Quiddity Final Expectations: Crucial Shift in Tracking AUM a GAME CHANGER
  • FTSE TWSE Taiwan 50 Index Rebalance Preview: Far Eastern Could Replace AUO
  • Meritz Merger Event: Swap Conditions, Spread Arb Trade, & K200 Flow Implementation
  • Medley (4480) – Move to Prime Means TOPIX Inclusion Next Month
  • AXXZIA (4936 JP) – TOPIX Inclusion Is Likely In February
  • FTSE TWSE 50 & 100 Dec 22 Final Expectations: Greatek Is Still the Main Talking Point
  • Meritz Financial Group: Comprehensive Stock Swap + Delisting of Meritz Sec. And Meritz F&M Insurance
  • Lifestyle (1212 HK)’s Scheme Gets Up
  • FTSE China 50 Index Rebalance Preview: JD Health Could Replace Xpeng

FTSE TWSE Taiwan Dividend+ Index Rebalance Preview: 46% One-Way Turnover and US$5bn Two-Way Trade

By Brian Freitas

  • Today is the review cutoff for dividend data and stock prices that will be used to select the inclusions and exclusions as well as for capping of index weights.
  • We see 26 adds and 5 deletes for the index at the December rebalance resulting in one-way turnover of 46% and a one-way trade of TWD 78.1bn (US$2.51bn). 
  • Passive trackers will need to buy over 5 days of ADV on 15 stocks and sell over 5 days of ADV on 19 stocks and this will present trading opportunities.

FTSE TWSE Dividend+ Dec 22 Quiddity Final Expectations: Crucial Shift in Tracking AUM a GAME CHANGER

By Janaghan Jeyakumar, CFA

  • In October 2022, FTSE Russell confirmed that the number of constituents in the FTSE TWSE Taiwan Dividend+ Index will be increased from 30 to 50 during the December 2022 Rebalance.
  • Considering the combined effect of expected index changes and capping flows, there could be 27 potential inflows names and 28 potential outflow names with total one-way flow size of US$2.45bn.
  • There are multiple names on both sides with several days of volume to trade.

FTSE TWSE Taiwan 50 Index Rebalance Preview: Far Eastern Could Replace AUO

By Brian Freitas

Meritz Merger Event: Swap Conditions, Spread Arb Trade, & K200 Flow Implementation

By Sanghyun Park

  • The last trading day to secure appraisal rights is today (the 22nd). You must buy stocks by today to make arb trade possible using appraisal rights.
  • We should consider LONG FINANCIAL SHORT FIRE/SECURITIES. KSD allows us to maintain borrowed stocks of the target company without redemption procedures if new stocks are listed after the merger.
  • K200 trackers will have to buy in for FIRE at the close on January 27, whereas SECURITIES will be on March 31. We should design a setup targeting this preemptively.

Medley (4480) – Move to Prime Means TOPIX Inclusion Next Month

By Travis Lundy

  • A year ago, TSE Growth-listed Medley (4480 JP) said they would “make preparations” for a listing on TSE Prime. Last month, Janaghan Jeyakumar, CFA had it at “Almost Ready.”
  • Today they announced they would list on TSE Prime on 28 November which means a TOPIX Inclusion at end-December. 
  • Shareholder structure and stock bias matter a lot in this case. It’s very much worth looking at the details.

AXXZIA (4936 JP) – TOPIX Inclusion Is Likely In February

By Travis Lundy

  • Just under two weeks ago, AXXZIA Inc (4936 JP) announced it had on that day (9 November) applied to move to TSE Prime from TSE Growth. 
  • It’s an interesting one because of the strange differential between “tradable shares” and “float.”
  • After some study, I think this could be a TOPIX inclusion at end-Feb 2023, but there are steps to take between now and then. 

FTSE TWSE 50 & 100 Dec 22 Final Expectations: Greatek Is Still the Main Talking Point

By Janaghan Jeyakumar, CFA

  • The base date for the December 2022 index review FTSE TWSE Taiwan 50 and Taiwan Mid-Cap 100 for the December 2022 Rebalance is today (21st November 2022).
  • In this insight, we take a look at Quiddity’s final predictions for expected ADDs/DELs for the December 2022 index review.
  • I expect one change for the Taiwan 50 Index and one change for the Taiwan Mid-Cap 100 index.

Meritz Financial Group: Comprehensive Stock Swap + Delisting of Meritz Sec. And Meritz F&M Insurance

By Douglas Kim

  • After the market close today, Meritz Financial Group (MFG) made one of the biggest announcements in the history of the group.
  • It announced that Meritz Fire & Marine Insurance and Meritz Securities will become fully owned subsidiaries of Meritz Financial Group. Meritz F&M Insurance and Meritz Securities will also be delisted.
  • MFG is making a real positive change through the share swaps among the three companies. This will likely have the biggest positive impact will be on MFG. 

Lifestyle (1212 HK)’s Scheme Gets Up

By David Blennerhassett

  • Independent shareholders of Lifestyle International Holdings (1212 HK) comfortably voted through the Scheme resolution.
  • 94.93% of stakeholders present (and via proxy) voted FOR, with 5.07% voting AGAINST. 
  • The last day of trading is the 6 December with payment expected on or before the 30 December. 

FTSE China 50 Index Rebalance Preview: JD Health Could Replace Xpeng

By Brian Freitas

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Nov 22
0

Daily Brief Thematic (Sector/Industry): Good Morning Japan | Holiday Blues – More of the Same and more

By | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

  • Good Morning Japan | Holiday Blues – More of the Same
  • Portfolios Built Based on Innovation Score by Datamining Technical Publications

Good Morning Japan | Holiday Blues – More of the Same

By Mark Chadwick

  • Good Morning Japan:  We strive to provide the very best breaking macro, stock and thematic overnight news that will impact your trading day in Japan. FOLLOW US to keep abreast
  • OVERSEAS.  Equity markets consoldiate – with strong Technical support ahead of holidays; Mometum over Beta/Growth; Defensives lead;  Oil market confusion; Disney mgmt coup
  • JAPAN. Quiet Start; Yen weaker at ¥142/USD;  Ahead of holiday’s tomorrow(and US Thanksgiving), expect low volumes and little px movement;  Buffet bullish Japanese Traders; Broker initiations on Kajima(BUY); Shimizu(SELL)

Portfolios Built Based on Innovation Score by Datamining Technical Publications

By Pyari Menon

  • We built a large cap, a mid cap and a small cap portfolio of twenty stocks each. The constituents are based on how technical publications score and rank their innovations 
  • Only algo driven scores were considered to pick the stocks. Metrics like sales and profit growth, cashflow, leverage, returns, margins, valuations, estimates, news flow, price momentum were NOT considered
  • The portfolios are market cap weighted. We avoided including the mega caps Apple, Microsoft, Amazon and Google, due to the significant skew their weights will have on the portfolio

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Nov 22
0

Daily Brief Health Care: Medley, Ascentage Pharma Group Corp and more

By | Daily Briefs, Healthcare

In today’s briefing:

  • Medley (4480) – Move to Prime Means TOPIX Inclusion Next Month
  • Ascentage Pharma (6855.HK) – May Not Survive “This Winter”

Medley (4480) – Move to Prime Means TOPIX Inclusion Next Month

By Travis Lundy

  • A year ago, TSE Growth-listed Medley (4480 JP) said they would “make preparations” for a listing on TSE Prime. Last month, Janaghan Jeyakumar, CFA had it at “Almost Ready.”
  • Today they announced they would list on TSE Prime on 28 November which means a TOPIX Inclusion at end-December. 
  • Shareholder structure and stock bias matter a lot in this case. It’s very much worth looking at the details.

Ascentage Pharma (6855.HK) – May Not Survive “This Winter”

By Xinyao (Criss) Wang

  • The  R&D direction and field of Ascentage Pharma Group Corp (6855 HK) distinguish it from other domestic biotech companies. The Company has proved its R&D capability after the successful launch of olverembatinib.
  • The uncertainties of commercialization performance and R&D risks would make it difficult for Ascentage to achieve break-even. Due to increasing cash flow pressure, Ascentage must first solve the survival problem.
  • Considering the Risk return trade-off, we think Ascentage has short-term investment value only when it’s “extremely undervalued”.We suggest that it could be sold in a timely manner to secure gains.

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Nov 22
0

Daily Brief TMT/Internet: Greatek Electronics, SUMCO Corp, Tencent, Ant Financial Services Group, ARTERIA Networks Corp, Hon Hai Precision Industry and more

By | Daily Briefs, TMT/Internet

In today’s briefing:

  • FTSE TWSE 50 & 100 Dec 22 Final Expectations: Greatek Is Still the Main Talking Point
  • Sumco (3436) | Bargain Basement
  • China Internet Weekly (21Nov2022): NetEase, Blizzard, Tencent, Meituan, Tencent Music, JD Logistics
  • Ant Group: Consumer Finance Finds Investors But Beijing Could Throw New Obstacles At Ant’s Direction
  • Arteria Networks (Buy) – Q2 22 Results Reaction: Core Business Growth Intact
  • Hon Hai & Yulon IPO: Media Reports of Electric Vehicle JV 1Q23 Listing, Stock Implications

FTSE TWSE 50 & 100 Dec 22 Final Expectations: Greatek Is Still the Main Talking Point

By Janaghan Jeyakumar, CFA

  • The base date for the December 2022 index review FTSE TWSE Taiwan 50 and Taiwan Mid-Cap 100 for the December 2022 Rebalance is today (21st November 2022).
  • In this insight, we take a look at Quiddity’s final predictions for expected ADDs/DELs for the December 2022 index review.
  • I expect one change for the Taiwan 50 Index and one change for the Taiwan Mid-Cap 100 index.

Sumco (3436) | Bargain Basement

By Mark Chadwick

  • Sumco is a pure play wafer maker that is geared into demand for cutting edge 300mm wafers
  • Sumco is attractive given weak sentiment towards tech, attractive valuation, strong profitability and long-term earnings drivers
  • With the stock down 12% YTD, we believe the stocks is undervalued and see at least 20% upside from here

China Internet Weekly (21Nov2022): NetEase, Blizzard, Tencent, Meituan, Tencent Music, JD Logistics

By Ming Lu

  • The authorization contracts between Activision Blizzard and NetEase will terminate in January 2023.
  • Tencent plans to distribute 91% of its Meituan share as dividend.
  • JD Logistics revenue increased by 39% YoY and Net loss decreased to one tenth.

Ant Group: Consumer Finance Finds Investors But Beijing Could Throw New Obstacles At Ant’s Direction

By Oshadhi Kumarasiri

  • Earlier this year, an RMB 22.0bn fundraising was likely blocked by Beijing with the state-backed asset manager, China Cinda pulling out of the deal at the last moment.
  • Several media outlets reported last week that Ant Group is pushing ahead yet again with an RMB 10.5bn fundraising effort for its Consumer Finance business.
  • This fundraising could yet again face obstacles as Beijing might want Ant Financial Services Group (6688 HK) to surrender a controlling stake in the Consumer Finance business to state-backed firms.

Arteria Networks (Buy) – Q2 22 Results Reaction: Core Business Growth Intact

By Kirk Boodry

  • Favorable industry trends like work from home and expanding mobile data usage are helping drive Arteria revenue growth
  • Headline profits are down but core OP is up when one-time gains last year are stripped out and quarterly results will start to look better in H2 when fully lapped
  • Management says macro concerns such as inflation and power costs are manageable and FY targets remain unchanged

Hon Hai & Yulon IPO: Media Reports of Electric Vehicle JV 1Q23 Listing, Stock Implications

By Vincent Fernando, CFA

  • Hon Hai Precision Industry (2317 TT) and Yulon Motor Company (2201 TT) plan to IPO their electric vehicles JV Foxtron Vehicle Technologies in 1Q23E, seeking NT$10bn.
  • The IPO’s valuation could be a major uplift for Yulon Motor Company (2201 TT)‘s valuation. 
  • Hon Hai Precision Industry (2317 TT): Successful IPO would provide markets proof that its EV platform can create value uplifts again and again in the future. Accumulate.

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