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Smartkarma Daily Briefs

Nov 15
0

Daily Brief Health Care: Bionote, Pharmaessentia Corp, Hutchison China MediTech Ltd, Amgen Inc, Global Health (Medanta) and more

By | Daily Briefs, Healthcare

In today’s briefing:

  • Bionote IPO – Delayed Timeline & Updated Valuation Analysis
  • Pharmaessentia Corp (6446 TT): Riding High Aided by Continued Strong Uptake of Besremi in US
  • Hutchison China MediTech (HCM.US/13.HK) – The Pain Points Become More Pronounced
  • Amgen Inc: Major Drivers
  • Global Health IPO Trading – Relatively Cheap and Good

Bionote IPO – Delayed Timeline & Updated Valuation Analysis

By Douglas Kim

  • Bionote has delayed its IPO timeline. Now, the company expects to complete its IPO in late December. The book building for the institutional investors will now start on 8 December.
  • Our updated base case valuation is target price of 16,966 won per share, which is 6% lower than the low end of the IPO price range. 
  • Given the downside risk relative to the IPO price range, we have a Negative View of the BioNote IPO. 

Pharmaessentia Corp (6446 TT): Riding High Aided by Continued Strong Uptake of Besremi in US

By Tina Banerjee

  • Pharmaessentia Corp (6446 TT) reported revenue of NT$275 million for October, representing a massive 548% y/y growth. The year-to-date consolidated revenue totaled NT$2.3 billion, an increase of 628% y/y.
  • The company will be presenting new data on Besremi during the 64th American Society of Hematology (ASH) Annual Meeting to be held on December 10–13, 2022.
  • Pharmaessentia has been added to MSCI Taiwan Indexes. The company also gained the biggest weighting increase of 0.37 percentage points in the MSCI Taiwan Index.

Hutchison China MediTech (HCM.US/13.HK) – The Pain Points Become More Pronounced

By Xinyao (Criss) Wang

  • Hutchison China MediTech Ltd (HCM US) (Hutchmed) didn’t perform well. Its cash holdings could last about two and a half years considering the cash burn rate.
  • Hutchmed’s three major commercialized products would all face different challenges. Feedbacks from FDA/MAA cast a shadow on the Company’s internationalization prospects. 
  • According to the current speed of pharmaceutical innovation, Hutchmed’s R&D efficiency/productivity is not satisfactory. The current pipeline does not have core competitiveness. Bearish on outlook.

Amgen Inc: Major Drivers

By Baptista Research

  • Despite the challenges in the macroeconomic environment and the pharmaceutical business, Amgen’s stock has been on a strong upward trajectory over the past weeks.
  • The development of Tavneos is the first new therapy for ANCA-associated vasculitis in more than ten years.
  • They also developed an industry-leading biosimilar business and will soon be the first company to introduce a biosimilar to Humira in the United States.

Global Health IPO Trading – Relatively Cheap and Good

By Ethan Aw

  • Global Health (Medanta) (GH IN) raised approximately US$268m in its India IPO.  
  • Global Health (GH) is a hospital network that operates under the Medanta brand. The firm currently has five hospitals in operation and one more planned for development. 
  • We have looked at various aspects of the deal in our previous notes. In this note, we talk about the demand for the deal and the trading dynamics.

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Nov 15
0

Daily Brief Consumer: Brilliance China Automotive, Rakuten Inc, Haier Smart Home Co Ltd, Starbucks Corp, Marriott International, Mcdonald’s Corp, Monster Beverage and more

By | Consumer, Daily Briefs

In today’s briefing:

  • HSCI Index Rebalance and Stock Connect: Changes at the Margins
  • Rakuten Mobile: Expecting Losses To Shrink With Symphony & Energy Turning Profitable
  • Back in Hong Kong stocks
  • Starbucks Inc: Divestment Of Seattle’s Best Coffee & Other Developments
  • Marriott International: Acquiring The City Express Brand Portfolio & Other Developments
  • McDonald’s Corporation: Major Drivers
  • Monster Beverages: Major Drivers

HSCI Index Rebalance and Stock Connect: Changes at the Margins

By Brian Freitas

  • We see 3 potential adds for the HSCI in December. We also see 26 potential adds and 16 potential deletes for the index in March.
  • Following the March rebalance, we see 22 potential inclusions to Stock Connect while we expect 37 stocks to be removed from the link.
  • Some of the potential deletions/ Stock Connect drops have large Southbound holdings and some of these positions could be pared back over the next few months.

Rakuten Mobile: Expecting Losses To Shrink With Symphony & Energy Turning Profitable

By Oshadhi Kumarasiri

  • With e-commerce and fintech segments performing reasonably well, Rakuten Inc (4755 JP)’s Q3 results were mostly in line with expectations.
  • However, the Mobile segment failed to live up to expectations with the segment’s operating loss narrowing by just ¥3.4bn to ¥120.9bn in 3Q22.
  • Nonetheless, we are excited about the prospects of Rakuten Mobile through the success of Rakuten Symphony as the business is close to signing 12 new corporate customers.

Back in Hong Kong stocks

By Turtles all the way down

  • Early this year I was quite pessimistic on Hong Kong stocks.
  • But since then the Hang Seng is down another 20% or so. A lot of stocks with 9-10%+ dividend yields are laying around.
  • I should have been a bit quicker writing this up, but then you are getting it for free.

Starbucks Inc: Divestment Of Seattle’s Best Coffee & Other Developments

By Baptista Research

  • Starbucks’ stock has been on a roll after a solid Q4 and fiscal 2022 which surpassed Wall Street expectations on all counts.
  • With improving foot traffic, the company recently expanded its presence in the Italian market as well.
  • In this report, we have carried out a fundamental analysis of the historical financial statements of the company.

Marriott International: Acquiring The City Express Brand Portfolio & Other Developments

By Baptista Research

  • Marriott delivered a mixed set of results for the third quarter.
  • The leisure demand for the quarter remained strong and far above 2019 levels.
  • Travelers are apparently continuing to mix pleasure and work visits, according to third quarter day-of-the-week trends.

McDonald’s Corporation: Major Drivers

By Baptista Research

  • McDonald’s delivered a solid Q3 performance surpassing Wall Street expectations on all counts which is why its stock price has been surging over the past few weeks.
  • The company’s sustained resiliency is demonstrated by its quarterly global comp sales, which increased by 9.5%.
  • In the quarter, the chicken was a significant contributor to comp sales growth across all of their key markets, and they will continue to concentrate on expanding their worldwide market share in this significant category.

Monster Beverages: Major Drivers

By Baptista Research

  • Monster delivered a mixed set of results with record third-quarter net sales of $1.62 billion which was below analyst expectations.
  • Their cost of sales increased significantly during Q3 of 2022 compared to the third quarter of 2021, primarily because of higher costs for ingredients and other inputs, such as secondary packaging materials and co-packing fees, higher logistical costs, higher aluminum can cost, and mix of geographic and product sales.
  • Monster’s strength remains its wide distribution versus smaller peers that helped the company create a strong demand for its energy drinks even in lull periods.

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Nov 14
0

Daily Brief Thailand: I-Tail and more

By | Daily Briefs, Thailand

In today’s briefing:

  • I-Tail Corporation IPO: A Strong 3Q Results Update

I-Tail Corporation IPO: A Strong 3Q Results Update

By Arun George

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Nov 14
0

Daily Brief Australia: Warrego Energy and more

By | Australia, Daily Briefs

In today’s briefing:

  • Warrego (WGO AU) Bidding War Between Strike (STX AU) And Beach (BPT AU)

Warrego (WGO AU) Bidding War Between Strike (STX AU) And Beach (BPT AU)

By Arun George

  • Beach Energy (BPT AU)’s all-cash proposal is A$0.20 per share and Strike Energy (STX AU)’s all-scrip proposal is 0.775x STX shares per Petrel Energy (WGO AU) share. 
  • BPT’s all-cash offer provides value certainty. On the other hand, STX’s all-scrip offer lets shareholders get exposure to 100% interest in the West Erregulla project.
  • Both offers are reasonable but far from knockout bids, which suggests room for a further bidding round. At the last close, BPT’s offer is 3.2% higher than STX’s offer.

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Nov 14
0

Daily Brief United States: Dollar Index and more

By | Daily Briefs, United States

In today’s briefing:

  • USD Breakdown a Tailwind for Asia

USD Breakdown a Tailwind for Asia

By Thomas Schroeder

  • We were transitioning to short USD at DXY 114 and 113 ahead of the touted break below trendline support that is now unfolding. Our pullback target is DXY 103.
  • A weaker USD is acting as a key risk turn for EM and Asian equities (EEM bull from 34).
  • The USD breakdown is accompanied by a clear yield support break that is perhaps the higher conviction bet into a recession.

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Nov 14
0

Daily Brief China: Central China Real Estate and more

By | China, Daily Briefs

In today’s briefing:

  • Morning Views Asia: Central China Securities, Country Garden Holdings Co, Longfor Properties

Morning Views Asia: Central China Securities, Country Garden Holdings Co, Longfor Properties

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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Nov 14
0

Daily Brief Indonesia: Prodia and more

By | Daily Briefs, Indonesia

In today’s briefing:

  • Prodia (PRDA IJ) – A Standout in Diagnostics

Prodia (PRDA IJ) – A Standout in Diagnostics

By Angus Mackintosh

  • Prodia (PRDA IJ) is a stand out amongst Indonesia’s healthcare players given it is the only company in Indonesia with accreditation from the College of American Pathologists. 
  • 3Q2022 reflected a normalisation of the testing business towards routine testing but at higher levels, and with a greater variety of tests with more advanced levels of digitalisation. 
  • Prodia (PRDA IJ) stands out in terms of its strong market positioning and track record together with attractive valuations, especially versus Indian peers in the diagnostic space.

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Nov 14
0

Daily Brief India: Delhivery and more

By | Daily Briefs, India

In today’s briefing:

  • FTSE All-World/​​​​​All-Cap Index Rebalance Preview: Potential Inclusions & Lock-Up Expiry

FTSE All-World/​​​​​All-Cap Index Rebalance Preview: Potential Inclusions & Lock-Up Expiry

By Brian Freitas

  • We see 4 potential adds, 1 close add and 1 potential delete for the FTSE All-World/All-Cap indices at the upcoming QIR that will be implemented at close on 16 December.
  • The largest impact will be the passive selling on Golden Agri Resources (GGR SP) due to a nationality change from Singapore to Ineligible.
  • There is a big lock-up expiry on Delhivery where US$2.89bn of shares will be free for trading on 21 November – that is significantly larger than the potential passive buying.

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Nov 14
0

Daily Brief Japan: Sumitomo Precision Products, Seven & I Holdings, Tokyo Stock Exchange Tokyo Price Index Topix and more

By | Daily Briefs, Japan

In today’s briefing:

  • Sumitomo Precision Products (6355) Buyout by Sumitomo Corp – Likely To Get Done
  • Selling Sogo Seibu Doesn’t Mean Seven & I Will Sell Ito-Yokado
  • Conflicts of Interest Prevent TSE from Resolving Prime Market Listing Criteria Issues

Sumitomo Precision Products (6355) Buyout by Sumitomo Corp – Likely To Get Done

By Travis Lundy

  • On Friday, Sumitomo Corp (8053 JP) announced a bid for equity affiliate (they own 27+% but Nippon Steel 15%, top 2 is 40+%) Sumitomo Precision Products (6355 JP). 
  • It’s a one-year high and 4-year high price, and 8x average 10yr EV/EBITDA but 4.6x 2024e EBITDA from the Mid Term Plan. And way below a 10-year high. 
  • This gets done if Retail agrees to the tender. If 50% put in, that should do it. So I expect this gets done.

Selling Sogo Seibu Doesn’t Mean Seven & I Will Sell Ito-Yokado

By Michael Causton

  • Seven & I has at last agreed to sell the ailing Sogo Seibu chain – although not for enough to offset years of investment with little to show for it.
  • Some hope that this means the start of a house cleaning exercise to rid the group of its multiple under-performing retail assets, leaving a gleaming exemplar of rational efficiency.
  • This is unlikely, especially for the original Ito-Yokado general merchandise chain and a problem given the lack of growth potential in the group’s domestic business.

Conflicts of Interest Prevent TSE from Resolving Prime Market Listing Criteria Issues

By Aki Matsumoto

  • For companies applying transitional measures, it was an opportunity to attract investor attention and consider what is listing. This should serve as an opportunity to promote metabolism of listed companies.
  • Listing fees are set at the highest rates for prime market, so if the number of prime market companies decreases, TSE revenues will decrease. A conflict of interest has arisen.
  • With such a conflict of interest at TSE, it is unlikely that the contradiction between the prime market concept and listing criteria that many market participants perceive can be resolved.

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Nov 14
0

Daily Brief Quantitative Analysis: Hong Kong Connect Flows (Nov 4th): Tencent and more

By | Daily Briefs, Quantitative Analysis

In today’s briefing:

  • Hong Kong Connect Flows (Nov 4th): Tencent, Wuxi Biologics, HKEx, Kuaishou
  • A-H Premium Weekly (Nov 11th): BYD, Dongfang Electric, Pharmaron Beijing, CSC Financial
  • Northbound Flows (Nov 11th): Midea, Zijin Mining, Naura Tech
  • HK Short Interest Weekly: Kuaishou, Li Ning, China Shenhua, BYD Electronic
  • TWSE Short Interest Weekly (Nov 11th): Unimicron, Alchip, Lotes, King Yuan Electronics, Wistron, TXC

Hong Kong Connect Flows (Nov 4th): Tencent, Wuxi Biologics, HKEx, Kuaishou

By Ke Yan, CFA, FRM

  • We analyze the weekly Hong Kong Connect flows with our data engine for holding position as of November 11th.
  • The top stocks by inflows and outflows were tabulated for all market, HSCEI, mid cap and s/mid cap groups.
  • We highlight inflows into Tencent, Wuxi Biologics, HKEx, Kuaishou Technology.

A-H Premium Weekly (Nov 11th): BYD, Dongfang Electric, Pharmaron Beijing, CSC Financial

By Ke Yan, CFA, FRM

  • We analyse the changes of A-H premium on 142 stocks over the last week. The average A-H premium was 128.4% as of Nov 11th.
  • The average A-H premium changed by -4.7ppt weeok on week, led by financials, materials, information technology and offset by real estate, communication services.
  • We highlight weekly changes in A-H premium for BYD, Dongfang Electric, Pharmaron Beijing, CSC Financial.

Northbound Flows (Nov 11th): Midea, Zijin Mining, Naura Tech

By Ke Yan, CFA, FRM

  • We analyze the weekly Shanghai/Shenzhen northbound Connect flows with our data engine for holding position as of November 11th.
  • We estimate the weekly inflows to be US$845.8 million, led by materials, financials, consumer discretionary sectors, and offset by information technology, utilities.
  • We highlight flows for Midea, Zijin Mining, Naura Tech, TCL Zhonghuan, Yangtze Power, Goertek.

HK Short Interest Weekly: Kuaishou, Li Ning, China Shenhua, BYD Electronic

By Ke Yan, CFA, FRM

  • We analyzed the latest HK SFC report for aggregate short position as of Nov 4th.
  • Top short increases and decreases were tabulated for one week and four week period. 
  • We highlight short changes in Kuaishou, Li Ning, China Shenhua, BYD Electronic.

TWSE Short Interest Weekly (Nov 11th): Unimicron, Alchip, Lotes, King Yuan Electronics, Wistron, TXC

By Ke Yan, CFA, FRM

  • We analyzed the changes in short interest of TWSE Stocks as of Nov 11th which has an aggregated short interest worth USD13.6bn.
  • We tabulate league table for top short by value and short as multiple of ADT, as well as weekly increases & decreases in short value, short as multiple of ADT.
  • We highlight short interest changes in Unimicron, Alchip, Lotes, King Yuan Electronics, Wistron, TXC. 

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