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Smartkarma Daily Briefs

Nov 09
0

Daily Brief TMT/Internet: Softbank Group, Socionext, NTT (Nippon Telegraph & Telephone), Intouch Holdings, Nintendo, SK Telecom, Nasdaq-100 Stock Index, First Solar Inc, Pinterest Inc and more

By | Daily Briefs, TMT/Internet

In today’s briefing:

  • Softbank Group – Accelerated Buyback in October Drove Share Price Surge
  • TOPIX Inclusion: Socionext (6526 JP) – Momentum Is Fading, Exit Now.
  • NTT Q2 Results and a New Buyback
  • Singtel Holds The Key To Gulf Energy’s Takeunder For Thaicom
  • Nintendo (7974) | No Christmas Present This Year
  • NTT (Buy) – Q2 22 Results Reaction: Expanded Buyback Is Second Largest Ever
  • A Pair Trade Between SK Telecom & LG Uplus
  • EQD | SPX Vs NDX : Could CPI Spark a Reversal of Tech Performance Versus the Broader Market?
  • First Solar Inc: Major Drivers
  • Pinterest Inc: New Marketing Campaign & Other Developments

Softbank Group – Accelerated Buyback in October Drove Share Price Surge

By Kirk Boodry

  • Softbank Group (9984 JP) massively ramped up share buybacks in October driving a 31% increase in the share price
  • Average Daily Volume (ADV) was 28% higher in October and 46% higher for the last half of the month. October buyback volumes were the second highest for a month ever
  • Whether Softbank announces additional buyback plans likely depends on the timing of the ARM IPO and that partly depends on Q2 performance

TOPIX Inclusion: Socionext (6526 JP) – Momentum Is Fading, Exit Now.

By Janaghan Jeyakumar, CFA

  • Japan-Based System-On-Chip designer and IP purveyor Socionext (6526 JP) was listed in the “Prime” section of the Tokyo Stock Exchange (TSE) on 12th October 2022.
  • When a company gets listed in the Prime section, it subsequently gets included in the TOPIX Index requiring TOPIX-tracking funds to purchase the stock during an Inclusion Event.
  • Usually, this presents interesting trading opportunities to generate sharp market-neutral returns in the space of few trading days. Below is a look at the details for Socionext’s TOPIX Inclusion Event.

NTT Q2 Results and a New Buyback

By Travis Lundy

  • NTT (Nippon Telegraph & Telephone) (9432 JP) announced Q2 results today during market hours. The stock had been trading up 1.1% on the day, but fell 1% in 5 minutes.
  • It then spent the rest of the day grinding higher to end just higher than just before results. 
  • NTT announced another buyback – this one on-market. It is only a little bit of a surprise.

Singtel Holds The Key To Gulf Energy’s Takeunder For Thaicom

By David Blennerhassett

  • In April 2021, Gulf Energy (GULF TB)‘s surprising VTO for Intouch (INTUCH TB) was conditional, inter alia, on a waiver NOT to make a downstream offer for Thaicom (THCOM TB).
  • Now Gulf has announced an intention to acquire Intouch’s 41.13% stake in Thaicom for Bt 9.92/share, a 19.3% discount last close, the completion of which triggers an MTO.
  • The acquisition of shares from Intouch requires approval from Intouch shareholders. Gulf, with 46.44% of shares out, is required to abstain. 

Nintendo (7974) | No Christmas Present This Year

By Mark Chadwick

  • The share price is roughly flat since we turned Bearish on Nintendo citing concerns that the cycle had peaked
  • Q2 results released today suggest that the hardware cycle has indeed peaked – Switch hardware guidance cut
  • We see a lack of catalysts for the stock price over the next several months and remain bearish

NTT (Buy) – Q2 22 Results Reaction: Expanded Buyback Is Second Largest Ever

By Kirk Boodry

  • Results were mostly positive with strong forex-boosted revenue growth and mobile outperformance 
  • An expansion of the buyback program helps sentiment as an additional Y150bn program takes FY22 buybacks to the highest single-year total since 2005
  • Comments at the analyst meeting focused on underlying costs but management seems positive that it can manage with cost efficiencies

A Pair Trade Between SK Telecom & LG Uplus

By Douglas Kim

  • At current prices, we like a pair trade between SK Telecom (go long) and LG Uplus (go short). 
  • We believe the share price gap has widened too much in the past month in favor of LG Uplus and this gap is likely to close in the coming weeks.
  • While LG Uplus tries to expand its non-telecom businesses, this may involve greater spending on marketing and promotions (as % of sales), which could be a drag on its earnings.

EQD | SPX Vs NDX : Could CPI Spark a Reversal of Tech Performance Versus the Broader Market?

By Simon Harris

  • All eyes are on inflation data this week with CPI due out on Thursday
  • Shorts in tech have been working but could be looking to take profits after big gains last week
  • Use options for a cheap play on NDX outperformance over SPX

First Solar Inc: Major Drivers

By Baptista Research

  • First Solar’s bull run was halted by a below par result in the last quarter as the company failed to meet Wall Street expectations with respect to revenues as well as earnings.
  • The company’s manufacturing plants produced 2.4 gigawatts of modules in the third quarter and sold 2.8 gigawatts.
  • Besides, their current fleet’s manufacturing performance metrics remain consistent, and plans for the third manufacturing plant in Ohio are still on track.

Pinterest Inc: New Marketing Campaign & Other Developments

By Baptista Research

  • Pinterest’s performance as a stock has been fairly decent in what can be termed as a tumultuous environment for the technology industry.
  • The company’s global MAUs of 445 million were higher than in Q3 2021 because it largely overcame the pandemic’s difficulties and increased user engagement.
  • During the quarter, they collaborated with Merlin, BMG, Warner Music Group, and Warner Chappell Music to enhance the music experience on Pinterest.

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Nov 09
0

Daily Brief Financials: Jinke Smart Services, S&P 500, Groupe Bruxelles Lambert Sa, Five Star Business Finance, China SCE, NFT and more

By | Daily Briefs, Financials

In today’s briefing:

  • Jinke Smart (9666 HK) VGO Unconditional
  • SPX Meeting Tactical Top Target
  • Jinke Smart (9666 HK): Offer Now Unconditional In All Respects
  • Q3 Results and Discount
  • Five-Star Business IPO – Thoughts on Valuation
  • Morning Views Asia: China SCE, Country Garden Holdings Co, Kawasan Industri Jababeka
  • Sporting Crypto – Nov 7th: Visa Celebrate World Cup 2022 with Masters of Movement

Jinke Smart (9666 HK) VGO Unconditional

By Arun George

  • Jinke Smart Services (9666 HK)’s VGO from Boyu Capital at HK$12.00 per share has been declared unconditional. Boyu has waived the 7.71% valid acceptances condition. 
  • Boyu has likely two aims for the unusual VGO – secure anti-trust approval and a re-rating by becoming the largest shareholder. Anti-trust approval was received on 8 November.  
  • Acceptances of 0.0081% of outstanding shares reflect the unattractive offer. The final closing date is 22 November. At the last close price, the spread to the offer is 2.7%. 

SPX Meeting Tactical Top Target

By Thomas Schroeder

  • RTY long is falling short of our 1,850 PT. SPX met the 3,820/40 tactical top target outlined last week (rally from SPX 3,700). A C-wave decline is expected to 3,650.
  • DXY near support while yield remains elevated is at odds. DXY rally due from 110/109.50 and if yield push higher will see equities buckle.
  • NDX is the U/P short to add back to below 11,300. SPX long support zone rests at 3,650/20 with 3,600 the critical pivot to spur a fresh rise.

Jinke Smart (9666 HK): Offer Now Unconditional In All Respects

By David Blennerhassett

  • Back on the 27th of September, PRC-incorporated property management play Jinke Smart Services (9666 HK) announced a voluntary cash offer from Boyu at HK$12/share, a 33.04% premium to last close.
  • The Offer was contingent on SAMR and 7.71% of shares out tendering. Matters were somewhat complicated by Boyu buying 7.15% of shares out before dispatching the Composite Document. 
  • Jinke has now announced SAMR approval and waiving the acceptance condition. The Offer is unconditional. The final closing date is the 22nd of November. This may trade through terms. 

Q3 Results and Discount

By Jesus Rodriguez Aguilar

  • GBL released Q3 results. NAV/share was down -3.6% to €112.39 QoQ (vs. €116.5 at 30 June) and -20% YTD. The discount to NAV was 36.0% as of 30 September.
  • The portfolio could do with some rebalancing: Pernod Ricard and SGS represent 18% and 16% of GAV. GBL is creating value by purchasing its shares at a large discount.
  • Discount to NAV is 35.3%, which seems high. BUY, with €87.35 TP, or play the discount: Long GBL / Short main listed assets (SGS, Pernod Ricard, Adidas and Umicore).

Five-Star Business IPO – Thoughts on Valuation

By Sumeet Singh

  • Five Star Business Finance (0958461D IN) is looking to raise around US$250m in its upcoming India IPO. 
  • Five-Star Business is a non-banking financial company (NBFC-ND-SI) that provides secured business loans to micro-entrepreneurs and self-employed individuals.
  • We have looked at various aspects of the deal in our previous note, in this note, we talk about valuations.

Morning Views Asia: China SCE, Country Garden Holdings Co, Kawasan Industri Jababeka

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.

Sporting Crypto – Nov 7th: Visa Celebrate World Cup 2022 with Masters of Movement

By Sporting Crypto

  • If you’re bored of reading FIFA-related stories – I’m sorry. The World Cup is on the horizon, after all!
  • This project by the team over at Visa is probably the most interesting Web3 x World Cup project I’ve seen so far, however.
  • Visa have created a generative art project where the art represents five iconic moments in World Cup history. 

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Nov 09
0

Daily Brief Health Care: Takeda Pharmaceutical, Cipla Ltd, Bionote, Shockwave Medical Inc, Eli Lilly & Co, Abbvie Inc, Pfizer Inc and more

By | Daily Briefs, Healthcare

In today’s briefing:

  • Takeda: A Deep Dive into Takeda’s Dengue Vaccine
  • 2023 High Conviction Idea: Cipla (CIPLA IN)- Complex Generics and India Business to Drive Growth
  • Bionote Pre-IPO – Thoughts on Valuation
  • Shockwave Medical Inc (SWAV US): Continued Triple-Digit Sales Growth in Q3; 2022 Guidance Raised
  • Eli Lilly & Co: The Akouos Acquisition & Other Drivers
  • AbbVie Inc: The DJS Antibodies Acquisition & Other Drivers
  • Pfizer Inc (PFE.US) – What if Pfizer Loses the China Market in the Future?

Takeda: A Deep Dive into Takeda’s Dengue Vaccine

By Shifara Samsudeen, ACMA, CGMA

  • Takeda’s dengue vaccine TAK-003/QDENGA has been approved in Indonesia and is awaiting consent from the EU. The company is also seeking approval from the US, Latam and other Asian countries.
  • The company plans to launch the vaccine in December or early next year which will become the industry’s first immunisation against dengue after the problems faced by Sanofi’s Dengvaxia.
  • In this insight, we take a look at Takeda Pharmaceutical (4502 JP) ‘s decade long journey into its dengue vaccine and its potential.

2023 High Conviction Idea: Cipla (CIPLA IN)- Complex Generics and India Business to Drive Growth

By Tina Banerjee

  • Cipla Ltd (CIPLA IN) is a strong play in Indian generic pharmaceutical industry, due to its niche and differentiated respiratory and peptide injectable portfolio, which has less competition.
  • The company has launched couple of complex respiratory products in the US market, which has accelerated its revenue growth. Multiple high-value launches are also lined up for this year.
  • Cipla’s India business is on a strong footing, led by core portfolio tailwind in prescription and trade generics businesses. Q2FY23 marked the sixth consecutive quarter of market beating growth.

Bionote Pre-IPO – Thoughts on Valuation

By Clarence Chu

  • Bionote (377740 KS) is looking to raise approximately US$200m in its Korean IPO. The IPO would consist of both a primary and secondary selldown.
  • Bionote is an integrated producer of diagnostics test products and biocontent products. 
  • In this note, we will look at deal dynamics, assumptions, and share our thoughts on valuation.

Shockwave Medical Inc (SWAV US): Continued Triple-Digit Sales Growth in Q3; 2022 Guidance Raised

By Tina Banerjee

  • Shockwave Medical Inc (SWAV US) reported strong 3Q22 result, with revenue growing 102% y/y to 131.3 million, beating consensus by $7.5 million. EPS stood at $0.92, beating consensus by 35%.
  • Revenue growth was driven by the launch of Shockwave C2, in the U.S. in February 2021, continued recovery from the pandemic impact, and increased adoption of Shockwave products.
  • Shockwave now expects 2022 revenue of $483–488 million, representing 104–106% y/y growth. This compares to previous revenue guidance of $465–475 million and current consensus of $478.9 million.

Eli Lilly & Co: The Akouos Acquisition & Other Drivers

By Baptista Research

  • Eli Lilly’s stock has been on a roll off-late in a relatively challenging market environment and the company supported it with a solid result surpassing Wall Street expectations on all counts.
  • They have continued to invest in expanding their manufacturing base to fulfill the rising demand for their products and prepare for upcoming launches.
  • In this report, we have carried out a fundamental analysis of the historical financial statements of the company.

AbbVie Inc: The DJS Antibodies Acquisition & Other Drivers

By Baptista Research

  • AbbVie’s results for the past quarter were mixed and the company failed to meet Wall Street expectations with respect to its revenues but managed an earnings beat.
  • The management also observed a persistently strong double-digit operational sales growth from several other significant products, including Botox Cosmetic, Vraylar, Venclexta, and Botox Therapeutic.
  • This market growth is anticipated to primarily affect Juvederm and AbbVie’s body contouring portfolio products, which have higher consumer price points.

Pfizer Inc (PFE.US) – What if Pfizer Loses the China Market in the Future?

By Xinyao (Criss) Wang

  • If excluding the contribution from COVID-19 related products, Pfizer’s performance growth could have been quite pessimistic. In terms of BD, Pfizer is “a big buyer” but the return is questionable. 
  • We haven’t seen any blockbuster new products in Pfizer’s pipeline that can make up for the losses caused by VBP/NRDL negotiation in China. Price reduction seems the only way out.
  • We cannot rule out that Pfizer may lose the China market in the event of further deterioration of Sino-US relations. This is a problem investors need to consider in advance.

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Nov 09
0

Daily Brief Consumer: Jardine Cycle & Carriage, LG Energy Solution, FSN E-Commerce Ventures (Nykaa), Calbee Inc, Sapporo Holdings, Dohome PCL, Colgate Palmolive Co and more

By | Consumer, Daily Briefs

In today’s briefing:

  • Jardine C&C (JCNC SP): Potential MSCI Inclusion as NAV Discount Shrinks
  • TIGER Top 10 Rebalancing: A Big Change Awaits
  • FSN E-Commerce (Nykaa) Lockup Expiry – US$2.5bn Unlock with a Very Scattered Shareholding
  • Calbee – Price Hikes to Deliver Upside As Buybacks Provide Downside Protection
  • The First Step in Major Shift in Management Strategy Is for Sapporo to Sell Its Cross-Shareholdings
  • DOHOME : Weak 3Q22 Earnings as Expected
  • Colgate-Palmolive Co: Major Drivers

Jardine C&C (JCNC SP): Potential MSCI Inclusion as NAV Discount Shrinks

By Brian Freitas

  • Jardine Cycle & Carriage (JCNC SP) was deleted from the SIMSCI Index in November 2020 and could be added back to the index at the upcoming SAIR.
  • If added to the index, we estimate passive MSCI trackers will need to buy 7.9m shares (US$176m; 11 days of ADV) at the close on 30 November.
  • Jardine Cycle & Carriage (JCNC SP) is trading at a tight discount to its listed holdings and the spread could widen post the MSCI implementation.

TIGER Top 10 Rebalancing: A Big Change Awaits

By Sanghyun Park

  • The two names in LONG (LG Energy Solution and Celltrion) and the two names in SHORT (Shinhan Financial and KB Financial) are almost a foregone conclusion.
  • POSCO Holdings is now ahead of Kakao Corp due to the recent sharp rise in its share price. But the gap between them is still quite tight.
  • This rebalancing will likely aggravate LG Energy’s flow crunch as it also awaits an MSCI up-weight (2x ADTV) in end-November and a KOSPI 200 up-weight (2x ADTV) on December 8.

FSN E-Commerce (Nykaa) Lockup Expiry – US$2.5bn Unlock with a Very Scattered Shareholding

By Sumeet Singh

  • In Nov 2021, Nykaa raised around US$720m in its India IPO, via mostly selling secondary shares.
  • Nykaa is a lifestyle focussed e-commerce platform and consumer brand offering a portfolio of beauty, personal care and fashion products, including its own branded products.
  • In this note, we will talk about the upcoming lockup expiry.

Calbee – Price Hikes to Deliver Upside As Buybacks Provide Downside Protection

By Oshadhi Kumarasiri

  • Calbee Inc (2229 JP)’s share price fell 4% today from the top end of the trend channel as 2QFY23 OP fell short of consensus by ¥658m to ¥4.9bn.
  • There was also a ¥3.5bn downgrade to full-year OP guidance on higher-than-expected energy and raw material costs. However, this seems too conservative, especially with 10-20% price hikes in September-November.
  • In addition, share buy-backs are starting to become a regular part of shareholder returns with ¥12.0bn per-year in share buybacks in the previous fiscal year and the current fiscal year.

The First Step in Major Shift in Management Strategy Is for Sapporo to Sell Its Cross-Shareholdings

By Aki Matsumoto

  • It is doubtful that independent outside directors are actually able to actively bridge the gap between shareholders and the board of directors, as the Corporate Governance Code states in Japan.
  • Behind the lack of willingness on the executive team to make major changes in the way things have been done is high % of specified shareholders (40%), including cross-held shares.
  • No major change in business strategy is expected unless foreign shareholder ratio exceeds 30%. In order for the current large shareholders’ equity to decline, Sapporo should sell its cross-held shares.

DOHOME : Weak 3Q22 Earnings as Expected

By Pi Research

  • Maintain HOLD recommendation for DOHOME with a target price of Bt14.10. DOHOME’s 3Q22 net profit came in at Bt50m (-85%YoY,-84%QoQ),in-line with our forecast but below BB consensus estimated by 34%
  • 3Q22 earnings sink both YoY and QoQ Its net profit came out at Bt50m (-85%YoY, -84%QoQ),the lowest level since listed.The 9M22 result accounted for 88%of full-year net profit in 2022.
  • The significant drop in 3Q22 earnings pressured by lower margin from steel products, clearance sales in decoration materials category, and rising all products cost as a result from rising inflation.

Colgate-Palmolive Co: Major Drivers

By Baptista Research

  • Colgate-Palmolive delivered a disappointing set of results in the relatively unstable operating environment and failed to meet revenue expectations of the market despite producing a high single-digit organic sales growth in the third quarter, with expansion in every division.
  • The company also saw an increase in all four categories, with high single-digit growth in personal care, pet nutrition, and oral care.
  • Another capability they are expanding across the firm is revenue growth management (RGM) with their data and analytics team strategizing on the same.

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Nov 08
0

Daily Brief Singapore: AEM and more

By | Daily Briefs, Singapore

In today’s briefing:

  • AEM: Another Solid Earnings Report, but Mr. Market Remains Worried on Outlook

AEM: Another Solid Earnings Report, but Mr. Market Remains Worried on Outlook

By Nicolas Van Broekhoven

  • AEM reported its best PBT 3Q and 9M22 results ever, yet investors remain skeptical of its FY23 outlook
  • Management reiterated guidance and provided a bullish statement about the coming years
  • AEM EPS likely to reach at least 0.42 SGD leaving the stock trading at only 7.8x P/E FY22 

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Nov 08
0

Daily Brief United States: GrafTech International Ltd, FTX Token, Copper, GMX, Ubiquiti Inc., Apple, Ethereum, Mastercard, Sap Se Sponsored Adr, T Mobile Us Inc and more

By | Daily Briefs, United States

In today’s briefing:

  • Graftech: Operational Issues Plague Thesis
  • FTT/FTX- Another Inflection Point in the Crypto Market Waiting to Happen?
  • Copper Long Needs USD to Break Lower
  • GMX – A DeFi Real Yield Protocol
  • UI: On Pace for Record Revenue
  • Apple Inc.: Latest Updates
  • FTT Liquidity Faces Key Test
  • Mastercard Inc.: The Crypto Source Program & Other Drivers
  • SAP SE ADR: Initiation of Coverage – Financial Forecasts
  • T-Mobile: Industry Specific Smart Solutions & Other Drivers

Graftech: Operational Issues Plague Thesis

By Sameer Taneja

  • GrafTech International Ltd (EAF US) thesis has taken a turn for the worse with the suspension of the operations in Mexico (impact 50% of production in Q4 2022/H1 2023). 
  • The negotiations of LTA pricing ( based on spot pricing ) in the near term also prove to be a headwind, with spot prices 40% below the contract. 
  • At 7.3x PE FY23 (earnings down 60% YoY), the stock price reflects these challenges. The recovery for the company to normalized cash flow levels will take much longer.

FTT/FTX- Another Inflection Point in the Crypto Market Waiting to Happen?

By Rose Choy

  • On Nov 3, it was leaked that Alameda seemed to have a weaker than expected balance sheet with $7.6 bn of loans and a relatively illiquid portfolio of assets.
  • Alameda, a large proprietary crypto trading firm, did not officially comment but its CEO Caroline stated on Twitter that most of the loans were repaid. 
  • The potential linkages between Alameda and FTX, a large crytpo exchange, both controlled by Sam Bankman-Fried, are of utmost concern and has riled the crytpo market.

Copper Long Needs USD to Break Lower

By Thomas Schroeder

  • Copper’s bull wedge b -wave breakout stands out (high conviction set up) but needs a weaker USD for follow through. China is the wildcard but seems a bit early still.
  • Gold trendline and price pivot at 1,700 the key level to clear or will retest the 1,620 triple lows. 
  • DXY to rally off of 110 support within the triangle range and will see metals pullback. Bigger picture needs a break below 109.50 (bearish) to overlay with metals.

GMX – A DeFi Real Yield Protocol

By Edward Wu

  • GMX is a decentralized spot and perpetual exchange on the Ethereum Layer 2 scaling solution Arbitrum.
  • This protocol is absolutely a shining star in today’s market. Token price, TVL, and transaction volume are all in an upward trend.
  • It is also labeled as one of the best “Real Yield” opportunities for Liquidity Providers.

UI: On Pace for Record Revenue

By Hamed Khorsand

  • UI continued to report growth in its enterprise segment with total revenue rising to a new record. 
  • Ubiquiti has been operating through a difficult supply chain environment where particular chipsets have been nearly impossible to purchase beyond allocation from the producer.
  • Ubiquiti has expanded its enterprise product portfolio to include more options where Ubiquiti is generating recurring revenue

Apple Inc.: Latest Updates

By Baptista Research

  • Apple has been correcting along with broader markets and the company’s performance has also been hit by the Covid-19 outbreak in the Foxconn unit in China that produces iPhones.
  • The company’s results were fairly good and it surpassed Wall Street expectations in terms of revenues as well as earnings with a good performance from iPhone, accessories, home, and wearables.
  • Apple continues to grow its platform quite well in emerging markets with quite strong growth in Latin America, Southeast Asia, and India.

FTT Liquidity Faces Key Test

By Kaiko

  • Price Movements: For the first time since April, Lido staked ether (stETH) now trades at parity with ETH.
  • Market Liquidity: Coinbase reported lower than expected earnings due to a continued rout in trade volume.
  • Derivatives: ETH perpetual futures volume is now higher than BTC volumes as traders pounce at renewed volatility.

Mastercard Inc.: The Crypto Source Program & Other Drivers

By Baptista Research

  • With the backdrop of cross-border travel continuing to improve and consumer expenditure remaining resilient, Mastercard delivered strong earnings and revenue growth in its latest result.
  • Mastercard has expanded with gaming payouts, thus launching its Gaming Fast payout program.
  • For addressing domestic, cross-border, and account-to-account payments, it has signed an agreement with leading worldwide B2B solutions and networks, Pagero.

SAP SE ADR: Initiation of Coverage – Financial Forecasts

By Baptista Research

  • This is our first report on SAP, the global ERP, market leader.
  • SAP’s performance in the North American and Latin American markets is particularly robust.
  • The ERP transfer to the cloud is being led by SAP, which created the technology decades ago.

T-Mobile: Industry Specific Smart Solutions & Other Drivers

By Baptista Research

  • T-Mobile delivered a mixed set of results this quarter with revenues falling short of Wall Street expectations.
  • However, it did deliver an earnings beat as the management continued to capitalize on its network leadership position.
  • With the launch of Network pass and Easy Switch, T-Mobile is making it risk-free and simple to experience its network, also switch to T-Mobile.

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Nov 08
0

Daily Brief Thailand: I-Tail and more

By | Daily Briefs, Thailand

In today’s briefing:

  • I-Tail Corporation IPO: The Bear Case
  • I-Tail Corporation Pre-IPO – Peer Comparison Update – Adding in Its Only Local Peer

I-Tail Corporation IPO: The Bear Case

By Arun George

  • I-Tail (ITC TB), Thai Union Group (TU TB)’s pet care division, has started pre-marketing an up to US$600 million SET IPO, according to press reports.
  • In I-Tail Corporation IPO: The Bull Case, we highlighted the key elements of the bull case. In this note, we outline the bear case. 
  • The key elements of the bear case rest on its under-representation in the dog food category (largest pet food category), margins at or near the peak and declining FCF margin. 

I-Tail Corporation Pre-IPO – Peer Comparison Update – Adding in Its Only Local Peer

By Sumeet Singh

  • I-Tail, an OEM in the wet pet food category, aims to raise around US$500m in its Thailand IPO. It is a subsidiary of Thai Union Group (TU TB) .
  • As per ITC, it was the number two pet food company in Asia and in the top ten pet food companies globally. ITC expertise lies in fish-based wet pet food.
  • In our previous notes, we have looked at past performance, undertaken a peer comparison and spoken about valuation. In this note, we will add in its recently listed local peer.

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Nov 08
0

Daily Brief South Korea: HPSP, Coupang and more

By | Daily Briefs, South Korea

In today’s briefing:

  • Shorting Setup on Additions to KS200/KQ150 with KODEX Battery ETF Flow
  • Coupang: Market Share Loss Likely Due to Launch of Naver’s 24 Hours Next Day Delivery Service

Shorting Setup on Additions to KS200/KQ150 with KODEX Battery ETF Flow

By Sanghyun Park

  • Korea’s partial short-selling system, implemented in May last year, created a new trading pattern, a surge in short selling for new additions, immediately after index rebalancing.
  • Canaria Bio, HPSP, and SungEel Hitech are highly likely to be the primary targets for short selling, but there is one more thing we need to consider.
  • KODEX will likely begin rebalancing buying on HPSP and SungEel on December 9, the same day the short-selling starts for them. So, we need a more flexible setup.

Coupang: Market Share Loss Likely Due to Launch of Naver’s 24 Hours Next Day Delivery Service

By Douglas Kim

  • In December 2022, Naver plans to launch its long awaited 24 hours delivery service (Naver Arrival Guarantee Solution), competing directly against Coupang’s “rocket delivery” services in Korea.
  • Coupang’s valuations are not attractive at current levels and the heightened competition in the 24 hour delivery service market from Naver/CJ Logistics is likely to negatively impact Coupang. 
  • By providing 24 hours quick delivery service, Naver is expected to take away market share from Coupang from the fast delivery services in Korea.

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Nov 08
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Daily Brief Australia: Pilbara Minerals and more

By | Australia, Daily Briefs

In today’s briefing:

  • MSCI Australia Nov SAIR: Significant Pre-Positioning on the Potential Deletes

MSCI Australia Nov SAIR: Significant Pre-Positioning on the Potential Deletes

By Brian Freitas

  • We see two inclusions and two exclusions for the MSCI Australia Index at the November SAIR. Passive trackers will need to trade between 5-8x ADV on the stocks.
  • Cumulative excess volume on the stocks has been increasing steadily over the last few months, indicating a fair amount of pre-positioning.
  • Short interest on the potential deletions has spiked over the last couple of months and pre-positioning could be close to (or larger than) the estimated passive selling.

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Nov 08
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Daily Brief Japan: Toshiba Corp, Kawasaki Kisen Kaisha, Internet Initiative Japan, Tokyo Stock Exchange Tokyo Price Index Topix and more

By | Daily Briefs, Japan

In today’s briefing:

  • Toshiba (6502 JP): JIP Lobs a Lower-Than-Expected Offer
  • KLine (Kawasaki Kisen (9107)) – ToSTNeT-3 For All The Marbles
  • Internet Initiative Japan (Buy) – Q2 22 Results Reaction: Mobile Recovery Boosts Corporate DX Growth
  • Deepening Cash Allocation Required This Year of a New All-Time High in Share Repurchases

Toshiba (6502 JP): JIP Lobs a Lower-Than-Expected Offer

By Arun George

  • The Nikkei Asia reports that JIP has submitted a formal proposal to privatise Toshiba Corp (6502 JP) for about JPY2.2 trillion (US$15 billion) based on “Toshiba’s current share price.” 
  • JIP’s offer is below expectations of around a JPY6,000 bid which is likely driven by the inability to secure sufficient debt financing. JIP remains in negotiations with banks. 
  • While there is a risk that JIP will be unable to improve its offer to secure Board approval, the downside is low as Toshiba/peers’ current price ratio is attractive. 

KLine (Kawasaki Kisen (9107)) – ToSTNeT-3 For All The Marbles

By Travis Lundy

  • On Thursday, Kawasaki Kisen Kaisha (9107 JP) announced earnings, lower-than-consensus guidance and a ¥100bn buyback via ToSTNeT-3 this week, and on market if not filled via ToSTNeT-3.
  • The stock fell 5+%. I wrote I thought it was a buy and that the buyback was “game-able.” It rose 10+% from then til now. 
  • That was the fun. Now we get the games. Positioning strategy matters. 

Internet Initiative Japan (Buy) – Q2 22 Results Reaction: Mobile Recovery Boosts Corporate DX Growth

By Kirk Boodry

  • Internet Initiative Japan (3774 JP) posted solid Q2 results with the best quarterly revenue growth since 2016 and a 12th consecutive quarter of margin expansion
  • Results were driven by growth tailwinds for corporate digitization which was also visible in KDDI/Softbank results as well as a recovery in mobile which was not
  • The company did not raise its full-year financial guidance despite an H1 beat but forecasts looks increasingly conservative

Deepening Cash Allocation Required This Year of a New All-Time High in Share Repurchases

By Aki Matsumoto

  • With company cash equivalents reaching all-time high of 140 trillion yen and many company managers feeling that their company’s stock price is undervalued, share repurchases will reach all-time high.
  • Since the introduction of the Corporate Governance Code in 2015, share repurchases have become an established cash allocation alternative for companies. Companies will continue to enhance the practices  over time.
  • There is a need to deepen communication by showing investors how the company uses cash in its growth strategy, not limited to shareholder returns.

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