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Smartkarma Daily Briefs

Jun 10
0

United States: Tesla Motors, Bitcoin, Endo International, Nasdaq-100 Stock Index and more

By | Daily Briefs, United States

In today’s briefing:

  • Tesla Slips From #1 to #3 in Korea
  • Stablecoins Need a Regulatory Framework, Circle Chief Says
  • Endo International (ENDP US): Still in Troubled Waters; No Near-Term Growth Driver Is Seen
  • NDX and SPX Pivot Support Breaks and Downside Targets

Tesla Slips From #1 to #3 in Korea

By Douglas Kim

  • Hyundai’s IONIQ 5 surpassed Tesla’s Model 3 within a year of its launch. Hyundai’s IONIQ 5 was the best selling EV in Korea in January to May 2022.
  • Tesla EV sales in the first five months in Korea slipped to number three from its number one position in the same period last year. 
  • Hyundai Motor is expected to introduce IONIQ 6 later this year. However, Elon Musk mentioned that Tesla will not launch any new models until 2023 at the earliest

Stablecoins Need a Regulatory Framework, Circle Chief Says

By Caixin Global

  • The class of cryptocurrencies known as stablecoins needs a regulatory framework and private sector participation to ensure stable development
  • Last month the value of the token issued by algorithmic stablecoin project Terra crashed, raising doubts about the future of such assets
  • Stablecoins are a kind of crypto-asset pegged to legal tenders such as the U.S. dollar. Bitcoins and other cryptocurrencies are not backed by governments or physical assets, and their value can swing wildly

Endo International (ENDP US): Still in Troubled Waters; No Near-Term Growth Driver Is Seen

By Tina Banerjee

  • Endo International (ENDP US) shares are trading near their lows. However, Endo does not seem to be an attractive bottom fishing idea as opioid litigation is still the major overhang.
  • Endo’s top selling drug Vasostrict is facing generic competition, which has dragged Q1 performance of the company. Q1 revenue declined 9%, while Q2 revenue is expected to decline 28%.
  • Endo is banking on specialty branded drug Xiaflex and QWO, and sterile injectables for its long-term growth. However, they cannot fully offset the impact of Vasostrict revenue loss in near-term.

NDX and SPX Pivot Support Breaks and Downside Targets

By Thomas Schroeder

  • NDX break of 12,500 pivot support was touted as the lead trigger for the SPX to break below 4,080 pivot support to step up short exposure and reduce longs.
  • NDX 12,500 and SPX 4,100 are now key resistance levels. RTY short from 1,900+ also staring to work.
  • NDX 12,100 is the next key support. SPX supports at 3,990 and 3,920 (the later more important). Cycle called to turn south around mid-June into late June.

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Jun 10
0

Most Read: ACM Research Shanghai Inc, Far East Hospitality Trust, Toshiba Corp, Net Protections, Orient Overseas International and more

By | Daily Briefs, Most Read

In today’s briefing:

  • STAR50 Index Rebalance Preview (Sep): Change Is the Only Constant
  • Fraser Hospitality Trust Halted – Privatisation Likely. Far East The Better Trade Here.
  • Toshiba – Push Me Pull Me
  • Net Protections Holding IPO Lock-Up – Small Expiry Now, Before 20% Is Released Later in the Year
  • OOIL (316 HK): Peak Index Inclusion?

STAR50 Index Rebalance Preview (Sep): Change Is the Only Constant

By Brian Freitas

  • With only one change expected in September using a 12 month minimum listing history, we expect the index committee to continue using a 6 month minimum listing history.
  • That will see the maximum of 5 changes that are permitted at a single rebalance resulting in a one-way turnover just shy of 5%.
  • Over the last few rebalances, the adds have outperformed the deletes post the end of the review period. That’s expected given passive trackers need to buy/sell a lot of stock.

Fraser Hospitality Trust Halted – Privatisation Likely. Far East The Better Trade Here.

By Travis Lundy

  • Frasers Hospitality Trust (FHT SP) has been the subject of media reports about possible “strategic options” or go-private interest since this spring. They responded on 8 April. 
  • Today the shares were halted. We should expect news shortly. A Bloomberg article this morning suggested the promoters were seeking funding. Presumably, they will find it relatively quickly.
  • This could take a week rather than a day but given the run-up, one should also expect it a) to work and b) get done with small premium from here.

Toshiba – Push Me Pull Me

By Mio Kato

Net Protections Holding IPO Lock-Up – Small Expiry Now, Before 20% Is Released Later in the Year

By Sumeet Singh

  • Net Protections Holdings, a buy now pay later service provider, raised around US$570m via selling a mix of primary and secondary shares in its Japan IPO in Dec 2021.
  • As per Yano Research, it had 40% market share in the domestic BNPL market for B2C transactions.
  • In this note, we will talk about the upcoming lock-up expiry on 12th Jun 2022.

OOIL (316 HK): Peak Index Inclusion?

By Brian Freitas

  • Over the last 3 months, Orient Overseas International (316 HK) has been added to the FTSE All-World Index, MSCI Standard Index and Hong Kong Hang Seng Index (HSI INDEX). 
  • The stock has outperformed its Asia peers and now trades at a higher valuation. Shorts have been building positions over the last couple of months.
  • Cumulative excess volume on the stock has been increasing. While a lot of positioning has likely been unwound, there could be more unwinding over the next few weeks.

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Jun 09
0

Financials: HS Holdings, Ethereum, Abbott Laboratories, Abbvie Inc, Credicorp Ltd and more

By | Daily Briefs, Financials

In today’s briefing:

  • HS Holdings (8699 JP): Khan Bank IPO Delayed but Path Clear
  • Yield Comparisons Across ETH Based Protocols
  • Diamond Hill Long-Short Fund 2022 Market Commentary
  • Diamond Hill All Cap Select Fund Q1 2022 Market Commentary
  • Diamond Hill International Fund 2022 Market Commentary
  • This Week in Crypto – Big Milestone for ETH

HS Holdings (8699 JP): Khan Bank IPO Delayed but Path Clear

By Travis Lundy

  • The saga that has been the Sawada now HS Holdings (8699 JP) effective control change and change in Mongolian Banking Law has been interesting but the end game is clear.
  • Last week, the Mongolian parliament extended the listing deadline for the top 5 Mongolian banks from June 2022 to June 2023. The IPO has been pushed back. Which is good.
  • The stock is not what people think it is, and the implied PBR and PER of Khan Bank exposure on a cash-adjusted basis is VERY low. 

Yield Comparisons Across ETH Based Protocols

By Rose Choy

  • We compare the yields in some Ethereum based protocols and figure out what an effective USD denominated yield would be, which is more relevant for most investors.
  • On Curve and Convex, the ETH-stETH liquidity pool can pay liquidity providers (APY) close to 10% in USD terms which appears attractive.
  • However, this reflects systematic liquidity concerns among major trading crypto firms and could be a canary in the coal mine for the crypto space.

Diamond Hill Long-Short Fund 2022 Market Commentary

By Fund Newsletters

  • Diamond Hill invests on behalf of clients through a shared commitment to its valuation-driven investment principles, long-term perspective, capacity discipline and client alignment.
  • The Diamond Hill Long-Short Fund’s returns were just about flat—slightly positive— in Q1.
  • After a strong rebound in 2021, global GDP growth is expected to moderate in 2022.
  • From current levels, equity market returns over the next five years are likely to be below historical averages.

Diamond Hill All Cap Select Fund Q1 2022 Market Commentary

By Fund Newsletters

  • Diamond Hill invests on behalf of clients through a shared commitment to its valuation-driven investment principles, long-term perspective, capacity discipline and client alignment.
  • During a volatile quarter, the Diamond Hill All Cap Select Fund held up meaningfully better than the Russell 3000 Index.
  • After a strong rebound in 2021, global GDP growth is expected to moderate in 2022.
  • While the year-to-date pullback in equity markets has created some investment opportunities, broad market valuations remain above historical averages.

Diamond Hill International Fund 2022 Market Commentary

By Fund Newsletters

  • Diamond Hill invests on behalf of clients through a shared commitment to its valuation-driven investment principles, long-term perspective, capacity discipline and client alignment.
  • During a volatile quarter, the portfolio held up better than the Morningstar Global Markets ex-US Index by a decent margin.
  • After a strong rebound in 2021, global GDP growth is expected to moderate in 2022.
  • We expect to see varying states of economic growth aroundthe world in 2022 and believe persistent inflation will be one of the mostcritical risk factors economies face this year.

This Week in Crypto – Big Milestone for ETH

By Coinstack

  • Ethereum Testnet Successfully Moves to PoS on June 8 – Ropsten, Ethereum’s oldest testnet, has successfully competed its transition to proof of stake — as one of the final tests ahead of the merge on the main Ethereum blockchain, which is expected for August or September 2022 and will substantially reduce net ETH issuance and electricity usage after it is complete on ETH mainnet.
  • Bi-Partisan Digital Asset Bill Introduced to the U.S. Senate – Senator Cynthia Lummis (Wyo.) has introduced a major new bill called the Responsible Financial Innovation Act to expand the purview of the CFTC within the digital asset industry. See the thread of the week explaining the bill below.
  • US Probes Binance Over Token That Is Now World’s Fifth Largest – US regulators are investigating whether Binance Holdings Ltd. broke securities rules by selling digital tokens just as the crypto exchange was getting off the ground five years ago.

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Jun 09
0

Health Care: Abbott Laboratories, Ironwood Pharmaceuticals, Inc, Mega Genomics, Abbvie Inc and more

By | Daily Briefs, Healthcare

In today’s briefing:

  • Diamond Hill Long-Short Fund 2022 Market Commentary
  • Ironwood Pharmaceuticals (IRWD US): Brand Leadership of Linzess Continues; Pipeline Advances
  • Pre-IPO Mega Genomics – Immature Market and Over-Reliance on Meinian Put Future Performance in Doubt
  • Diamond Hill All Cap Select Fund Q1 2022 Market Commentary

Diamond Hill Long-Short Fund 2022 Market Commentary

By Fund Newsletters

  • Diamond Hill invests on behalf of clients through a shared commitment to its valuation-driven investment principles, long-term perspective, capacity discipline and client alignment.
  • The Diamond Hill Long-Short Fund’s returns were just about flat—slightly positive— in Q1.
  • After a strong rebound in 2021, global GDP growth is expected to moderate in 2022.
  • From current levels, equity market returns over the next five years are likely to be below historical averages.

Ironwood Pharmaceuticals (IRWD US): Brand Leadership of Linzess Continues; Pipeline Advances

By Tina Banerjee

  • Ironwood Pharmaceuticals, Inc (IRWD US)’s sole marketed drug Linzess is the #1 prescribed branded treatment in the U.S. for adults with IBS-C/CIC with ~4M unique patients since launch.
  • First commercialized in December 2012, Linzess achieved blockbuster drug status in 2021. The earliest licensed entry of any generic Linzess in the U.S. is expected only in March 2029.
  • The company’s potential drug candidate IW-3300 is in phase 1 trial for interstitial cystitis/bladder pain syndrome (IC/BPS). Recently, Ironwood has shared positive findings from the study.  

Pre-IPO Mega Genomics – Immature Market and Over-Reliance on Meinian Put Future Performance in Doubt

By Xinyao (Criss) Wang

  • Mega should establish core competitiveness via entering hospital market and being recognized by hospitals. It’s not a long-term solution to exploit the market by mainly relying on Meinian.
  • Although Mega’s competitive advantage in the channels is still more obvious due to Meinian, it is actually a double-edged sword, especially when Meinian is in financial difficulty.
  • Without Meinian, whether Mega can develop independently is a question mark. In terms of valuation, BGI and Berry could be comparable companies, and Mega’s valuation could be lower than Berry.

Diamond Hill All Cap Select Fund Q1 2022 Market Commentary

By Fund Newsletters

  • Diamond Hill invests on behalf of clients through a shared commitment to its valuation-driven investment principles, long-term perspective, capacity discipline and client alignment.
  • During a volatile quarter, the Diamond Hill All Cap Select Fund held up meaningfully better than the Russell 3000 Index.
  • After a strong rebound in 2021, global GDP growth is expected to moderate in 2022.
  • While the year-to-date pullback in equity markets has created some investment opportunities, broad market valuations remain above historical averages.

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Jun 09
0

India: Escorts Ltd, Hindustan Unilever, Mahindra & Mahindra and more

By | Daily Briefs, India

In today’s briefing:

  • Escorts Ltd (ESC IN) | Expected to Grow Slower than Industry
  • Hindustan Unilever – Widening Its Leadership Position
  • Mahindra & Mahindra – On Track to Achieve Long Term Targets

Escorts Ltd (ESC IN) | Expected to Grow Slower than Industry

By Pranav Bhavsar

  • Escorts Ltd (ESC IN) has been losing market share. As per management, “there are no “big” problems and they will regain the market share”, but we do not think so. 
  • Some flash channel checks are suggesting issues with some of the company’s products. These issues still remain unaddressed as per some dealers and customers. 
  • While the export opportunity and overall industry dynamics are positive unless the market share is regained, growth is likely to be slower than industry. 

Hindustan Unilever – Widening Its Leadership Position

By Motilal Oswal

  • Gaining market share: HUVR now has 16 brands with over INR10b in annual sales (v/s 14 brands in FY21). In FY22, its gain in market share was the highest in more than a decade.
  • Strengthening its technological backbone: HUVR continues to evolve as a digitally capable enterprise, catering to emerging consumer needs.
  • The core business continues to use analytics and machine learning to improve efficiency.

Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Mahindra & Mahindra – On Track to Achieve Long Term Targets

By Nirmal Bang

  • The company is seeing strong demand for its products and expects growth momentum to continue, backed by a robust order book.
  • It will launch new Scorpio N at the end of June’22 and it will be sold alongside the old Scorpio model.
  • The company expects single digit growth in tractor volume going ahead, mainly driven by a good monsoon season and improving rural cash flows.
  •  

Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

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Jun 09
0

Japan: HS Holdings, Net Protections, Kura Sushi Inc and more

By | Daily Briefs, Japan

In today’s briefing:

  • HS Holdings (8699 JP): Khan Bank IPO Delayed but Path Clear
  • Net Protections Holding IPO Lock-Up – Small Expiry Now, Before 20% Is Released Later in the Year
  • Kura Sushi (2695): Aggressive Operations Continued Through 2Q

HS Holdings (8699 JP): Khan Bank IPO Delayed but Path Clear

By Travis Lundy

  • The saga that has been the Sawada now HS Holdings (8699 JP) effective control change and change in Mongolian Banking Law has been interesting but the end game is clear.
  • Last week, the Mongolian parliament extended the listing deadline for the top 5 Mongolian banks from June 2022 to June 2023. The IPO has been pushed back. Which is good.
  • The stock is not what people think it is, and the implied PBR and PER of Khan Bank exposure on a cash-adjusted basis is VERY low. 

Net Protections Holding IPO Lock-Up – Small Expiry Now, Before 20% Is Released Later in the Year

By Sumeet Singh

  • Net Protections Holdings, a buy now pay later service provider, raised around US$570m via selling a mix of primary and secondary shares in its Japan IPO in Dec 2021.
  • As per Yano Research, it had 40% market share in the domestic BNPL market for B2C transactions.
  • In this note, we will talk about the upcoming lock-up expiry on 12th Jun 2022.

Kura Sushi (2695): Aggressive Operations Continued Through 2Q

By Mita Securities

  • Kura Sushi (2695, the company) announced 1H FY10/22 (Nov-Apr) results, with sales of 89.312bn yen (+19.7% YoY), OP 323m yen (-24.6% YoY), and RP 3.507bn yen (+196.0% YoY)
  • In Japan, 1H sales were 74.995bn yen (+11.8% YoY) and RP was 3.167bn yen (+69.7%YoY). The number of stores was up +8% YoY
  • The number of stores at the end of 1H was 593 (+26 from end-FY10/21)

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Jun 09
0

Industrials: Atlas Arteria, Escorts Ltd, 58 Freight (GogoX), Credicorp Ltd, Gamuda Bhd and more

By | Daily Briefs, Industrials

In today’s briefing:

  • Atlas Arteria (ALX AU): IFM Investors Comes Knocking
  • Escorts Ltd (ESC IN) | Expected to Grow Slower than Industry
  • 58 Freight (GogoX) Pre-IPO – (June 2022) PHIP Updates – Prospects Seem Bleaker
  • Diamond Hill International Fund 2022 Market Commentary
  • Gamuda (GAMU.KL) – T&C Of Ssp As Finalised For Highway Concessions Sale

Atlas Arteria (ALX AU): IFM Investors Comes Knocking

By David Blennerhassett

  • Fresh from successfully taking out Sydney Airport (SYD AU) earlier this year, IFM is reportedly on the cusp of submitting a non-binding indicative proposal for Atlas Arteria (ALX AU) 
  • A proposal is contingent on being granted limited due diligence. Meanwhile, IFM has accumulated an economic interest in ALX of 15%. 
  • ALX said they have not received any information on a proposal. Expect that to occur shortly. 

Escorts Ltd (ESC IN) | Expected to Grow Slower than Industry

By Pranav Bhavsar

  • Escorts Ltd (ESC IN) has been losing market share. As per management, “there are no “big” problems and they will regain the market share”, but we do not think so. 
  • Some flash channel checks are suggesting issues with some of the company’s products. These issues still remain unaddressed as per some dealers and customers. 
  • While the export opportunity and overall industry dynamics are positive unless the market share is regained, growth is likely to be slower than industry. 

58 Freight (GogoX) Pre-IPO – (June 2022) PHIP Updates – Prospects Seem Bleaker

By Clarence Chu

  • 58 Freight (GogoX) (1903638D HK) is looking to raise US$150m in its upcoming Hong Kong IPO.
  • GogoX is an online intra-city logistics platform in Asia. The company operates in more than 30 cities across five countries and regions in Asia.
  • GGX’s platform services segment continues to languish, even after the firm expended much higher incentives during the fiscal period. In this note, we look at GGX’s June 2022 PHIP updates.

Diamond Hill International Fund 2022 Market Commentary

By Fund Newsletters

  • Diamond Hill invests on behalf of clients through a shared commitment to its valuation-driven investment principles, long-term perspective, capacity discipline and client alignment.
  • During a volatile quarter, the portfolio held up better than the Morningstar Global Markets ex-US Index by a decent margin.
  • After a strong rebound in 2021, global GDP growth is expected to moderate in 2022.
  • We expect to see varying states of economic growth aroundthe world in 2022 and believe persistent inflation will be one of the mostcritical risk factors economies face this year.

Gamuda (GAMU.KL) – T&C Of Ssp As Finalised For Highway Concessions Sale

By Maybank Research

  • 30 Jun targeted completion date; maintain BUY
  • Checked: Govt’s approval, supplemental concessions
  • Anticipated proceeds now 0.6% higher
  • MYR1b for “capital management activities”

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Jun 09
0

South Korea: Lotte Chilsung Beverage Co, Kakao Pay and more

By | Daily Briefs, South Korea

In today’s briefing:

  • Lotte Chilsung Beverage: Block Deal Sale by Hotel Lotte
  • Kakao Pay: Comp Valuation Analysis Suggests Additional 40% Downside Risk

Lotte Chilsung Beverage: Block Deal Sale by Hotel Lotte

By Douglas Kim

  • After the market close today, Lotte Chilsung Beverage Co announced that there will be a block deal sale of the company (200,000 shares), representing 2.15% of total outstanding shares.
  • The discount rate range is 185,250 won to 189,150 won, which are 3% to 5% discount from the closing price today (195,000 won). 
  • We have a Positive view on Lotte Chilsung Beverage and we would take this deal. 

Kakao Pay: Comp Valuation Analysis Suggests Additional 40% Downside Risk

By Douglas Kim

  • Our base case valuation of Kakao Pay is market cap of 7.1 trillion won or 53,767 won per share, which represents an additional 40% downside risk from current levels.
  • Our base case valuation is based on 5x EV/Sales multiple and applying this to the consensus estimated sales of 898 billion won in 2023. 
  • The fact that the share price ended 15.6% lower (much bigger than block deal discount range of 8.5% to 11.8%) suggests a lower probability of an MSCI Korea index inclusion. 

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Jun 09
0

United States: Twitter Inc, Netflix Inc, Ethereum, Abbott Laboratories, Ironwood Pharmaceuticals, Inc, Bitcoin, Credicorp Ltd, Abbvie Inc and more

By | Daily Briefs, United States

In today’s briefing:

  • Elon’s Trying To Get Out Of Buying Twitter—As We Knew He Would
  • TMT Quick Hits: INTC/AMD, NFLX/ROKU
  • Yield Comparisons Across ETH Based Protocols
  • Diamond Hill Long-Short Fund 2022 Market Commentary
  • Ironwood Pharmaceuticals (IRWD US): Brand Leadership of Linzess Continues; Pipeline Advances
  • Crypto Biweekly – Breakdown In Correlation Between Crypto and Equity as Market Wait for ETH 2.0
  • Diamond Hill International Fund 2022 Market Commentary
  • This Week in Crypto – Big Milestone for ETH
  • Diamond Hill All Cap Select Fund Q1 2022 Market Commentary

Elon’s Trying To Get Out Of Buying Twitter—As We Knew He Would

By Vicki Bryan

  • Elon can’t get out of his stupidly overpriced, but solidly binding agreement to buy Twitter. But he can tie it up in court indefinitely. 
  • Meanwhile, Twitter’s prospects for operational improvement are mixed at best.
  • Twitter is left in limbo, as are its investors. What should bondholders do?

TMT Quick Hits: INTC/AMD, NFLX/ROKU

By Aaron Gabin

  • Intel warned that conditions outlined in 1Q22 have worsened, key to see what AMD says tomorrow.
  • Netflix – Roku rumor doesn’t make much sense, we think its more likely Roku cut off insider selling because it is looking to acquire Starz.
  • Netflix churn is rising among longtime customers – going to ad-supported Peacock and Paramount. We think another guide down is coming in 2Q22.

Yield Comparisons Across ETH Based Protocols

By Rose Choy

  • We compare the yields in some Ethereum based protocols and figure out what an effective USD denominated yield would be, which is more relevant for most investors.
  • On Curve and Convex, the ETH-stETH liquidity pool can pay liquidity providers (APY) close to 10% in USD terms which appears attractive.
  • However, this reflects systematic liquidity concerns among major trading crypto firms and could be a canary in the coal mine for the crypto space.

Diamond Hill Long-Short Fund 2022 Market Commentary

By Fund Newsletters

  • Diamond Hill invests on behalf of clients through a shared commitment to its valuation-driven investment principles, long-term perspective, capacity discipline and client alignment.
  • The Diamond Hill Long-Short Fund’s returns were just about flat—slightly positive— in Q1.
  • After a strong rebound in 2021, global GDP growth is expected to moderate in 2022.
  • From current levels, equity market returns over the next five years are likely to be below historical averages.

Ironwood Pharmaceuticals (IRWD US): Brand Leadership of Linzess Continues; Pipeline Advances

By Tina Banerjee

  • Ironwood Pharmaceuticals, Inc (IRWD US)’s sole marketed drug Linzess is the #1 prescribed branded treatment in the U.S. for adults with IBS-C/CIC with ~4M unique patients since launch.
  • First commercialized in December 2012, Linzess achieved blockbuster drug status in 2021. The earliest licensed entry of any generic Linzess in the U.S. is expected only in March 2029.
  • The company’s potential drug candidate IW-3300 is in phase 1 trial for interstitial cystitis/bladder pain syndrome (IC/BPS). Recently, Ironwood has shared positive findings from the study.  

Crypto Biweekly – Breakdown In Correlation Between Crypto and Equity as Market Wait for ETH 2.0

By Josh Du

  • Crypto and equity correlations are at all-time highs this year as both are negatively impacted by global headwinds like rate hikes. However, correlations decoupled over the past two weeks
  • Equities were in the positives while crypto prices continued to decline due to idiosyncratic factors such as the continued impact from Luna and the execution risks of ETH 2.0 merger
  • However, public crypto valuation is now overly depressed and the worst may be over with the Luna impact while the ETH 2.0 execution risk will be derisked imminently 

Diamond Hill International Fund 2022 Market Commentary

By Fund Newsletters

  • Diamond Hill invests on behalf of clients through a shared commitment to its valuation-driven investment principles, long-term perspective, capacity discipline and client alignment.
  • During a volatile quarter, the portfolio held up better than the Morningstar Global Markets ex-US Index by a decent margin.
  • After a strong rebound in 2021, global GDP growth is expected to moderate in 2022.
  • We expect to see varying states of economic growth aroundthe world in 2022 and believe persistent inflation will be one of the mostcritical risk factors economies face this year.

This Week in Crypto – Big Milestone for ETH

By Coinstack

  • Ethereum Testnet Successfully Moves to PoS on June 8 – Ropsten, Ethereum’s oldest testnet, has successfully competed its transition to proof of stake — as one of the final tests ahead of the merge on the main Ethereum blockchain, which is expected for August or September 2022 and will substantially reduce net ETH issuance and electricity usage after it is complete on ETH mainnet.
  • Bi-Partisan Digital Asset Bill Introduced to the U.S. Senate – Senator Cynthia Lummis (Wyo.) has introduced a major new bill called the Responsible Financial Innovation Act to expand the purview of the CFTC within the digital asset industry. See the thread of the week explaining the bill below.
  • US Probes Binance Over Token That Is Now World’s Fifth Largest – US regulators are investigating whether Binance Holdings Ltd. broke securities rules by selling digital tokens just as the crypto exchange was getting off the ground five years ago.

Diamond Hill All Cap Select Fund Q1 2022 Market Commentary

By Fund Newsletters

  • Diamond Hill invests on behalf of clients through a shared commitment to its valuation-driven investment principles, long-term perspective, capacity discipline and client alignment.
  • During a volatile quarter, the Diamond Hill All Cap Select Fund held up meaningfully better than the Russell 3000 Index.
  • After a strong rebound in 2021, global GDP growth is expected to moderate in 2022.
  • While the year-to-date pullback in equity markets has created some investment opportunities, broad market valuations remain above historical averages.

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Jun 09
0

Equity Capital Markets: WM Motor Technology Co Ltd, Tuhu Car, GoGoX Holdings, Mega Genomics, 58 Freight (GogoX), Net Protections and more

By | Daily Briefs, ECM

In today’s briefing:

  • WM Motor Pre-IPO Tearsheet
  • Tuhu Car Pre-IPO – The Negatives – Remains Unprofitable and Have Been Racking up Its Payables
  • GOGOX IPO: Growth at All Costs
  • Pre-IPO Mega Genomics – Immature Market and Over-Reliance on Meinian Put Future Performance in Doubt
  • 58 Freight (GogoX) Pre-IPO – (June 2022) PHIP Updates – Prospects Seem Bleaker
  • Net Protections Holding IPO Lock-Up – Small Expiry Now, Before 20% Is Released Later in the Year

WM Motor Pre-IPO Tearsheet

By Ethan Aw

  • WM Motor Technology Co Ltd (WMT CH) is looking to raise about US$1bn in its upcoming Hong Kong IPO. The deal will be run by Haitong International, CMBI and BOCI.
  • WM Motor is a smart EV player in China. As of the latest practicable date, it had a total of four main EV models (with various versions of each model). 
  • As per the CIC, it was the first EV automaker in China to have established its own manufacturing facilities from the outset. 

Tuhu Car Pre-IPO – The Negatives – Remains Unprofitable and Have Been Racking up Its Payables

By Clarence Chu

  • Tuhu Car (2007986D HK) is looking to raise up to US$400m in its upcoming Hong Kong IPO.
  • Tuhu is an integrated online and offline platform for automotive services in China.   
  • The firm remains loss making with no signs of being profitable in the near/medium term given its aggressive growth strategy.

GOGOX IPO: Growth at All Costs

By Arun George

  • GoGoX Holdings (GOGO HK) is a major online intra-city logistics platform in Asia. It has passed the listing hearing for an HKEx IPO to raise US$100-150 million.   
  • In GOGOX IPO Initiation: A Less than Perfect Delivery, we noted that as the losses are expected to persist over the next three years, we would avoid the IPO.
  • In this note, we examine the PHIP for the 2021 results and recent developments. The fundamentals remain unattractive and we would give the IPO a pass. 

Pre-IPO Mega Genomics – Immature Market and Over-Reliance on Meinian Put Future Performance in Doubt

By Xinyao (Criss) Wang

  • Mega should establish core competitiveness via entering hospital market and being recognized by hospitals. It’s not a long-term solution to exploit the market by mainly relying on Meinian.
  • Although Mega’s competitive advantage in the channels is still more obvious due to Meinian, it is actually a double-edged sword, especially when Meinian is in financial difficulty.
  • Without Meinian, whether Mega can develop independently is a question mark. In terms of valuation, BGI and Berry could be comparable companies, and Mega’s valuation could be lower than Berry.

58 Freight (GogoX) Pre-IPO – (June 2022) PHIP Updates – Prospects Seem Bleaker

By Clarence Chu

  • 58 Freight (GogoX) (1903638D HK) is looking to raise US$150m in its upcoming Hong Kong IPO.
  • GogoX is an online intra-city logistics platform in Asia. The company operates in more than 30 cities across five countries and regions in Asia.
  • GGX’s platform services segment continues to languish, even after the firm expended much higher incentives during the fiscal period. In this note, we look at GGX’s June 2022 PHIP updates.

Net Protections Holding IPO Lock-Up – Small Expiry Now, Before 20% Is Released Later in the Year

By Sumeet Singh

  • Net Protections Holdings, a buy now pay later service provider, raised around US$570m via selling a mix of primary and secondary shares in its Japan IPO in Dec 2021.
  • As per Yano Research, it had 40% market share in the domestic BNPL market for B2C transactions.
  • In this note, we will talk about the upcoming lock-up expiry on 12th Jun 2022.

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