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Smartkarma Daily Briefs

Nov 02
0

Daily Brief Industrials: Komatsu Ltd, Financial Select Sector SPDR Fund, CIMC Enric Holdings and more

By | Daily Briefs, Industrials

In today’s briefing:

  • Komatsu(6301) | Post 2Q Earnings – BACKTEST STILL Says over 45% Upside
  • Bear Market Rally Continues; Financials/XLF Reversing YTD Downtrend; Small-Caps at 11-Month RS Highs
  • CIMC Enric (3899 HK): Maintaining a Solid Trend

Komatsu(6301) | Post 2Q Earnings – BACKTEST STILL Says over 45% Upside

By Mark Chadwick

  • Komatsu reported above Consensus 2Q OP; lifted OP guidance; and raised dividends.  Outlook for next FY3/24 looks bright
  • Share price is pricing in a severe recession. A PBR of 1.1x is implies a significant OP decline. We see no evidence of an earnings contraction next year
  • We expect the share price to re-rate as the market prices in resilient earnings outlook. Our back test still suggests over 45% upside

Bear Market Rally Continues; Financials/XLF Reversing YTD Downtrend; Small-Caps at 11-Month RS Highs

By Joe Jasper

  • The market remains in bear market rally mode, and our price target remains the 200-day MAs on the SPX and Russell 2000, as discussed in last week’s Compass (Oct. 25).
  • Longer-Term, this is still a bear market until the S&P 500 and IWM can break above their respective YTD downtrends/200-day MAs, and markets could easily test their lows again.
  • With that said, there are signs that suggest breakouts above YTD downtrends/200-day MAs could be coming. Catalysts include the FOMC announcement on Wednesday, followed by midterm elections on Nov. 8.

CIMC Enric (3899 HK): Maintaining a Solid Trend

By Osbert Tang, CFA

  • CIMC Enric Holdings (3899 HK) has a steady 3Q22 with good revenue growth for the chemical & environmental and liquid food segments. Management also said margin has expanded YoY.
  • Overall order backlog of Rmb13.7bn is generally sufficient to cover individual segment’s revenue over the next 6-15 months, comfortably securing the growth prospects. 
  • With significant overseas revenue, it is benefiting from depreciation of Rmb against the USD. It also anticipates a pick-up in domestic clean energy segment growth in FY23.

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Nov 02
0

Daily Brief ESG: Changes in Voting Practices of Japan’s Major Investment Managements Will Take Time to Take Hold and more

By | Daily Briefs, ESG

In today’s briefing:

  • Changes in Voting Practices of Japan’s Major Investment Managements Will Take Time to Take Hold

Changes in Voting Practices of Japan’s Major Investment Managements Will Take Time to Take Hold

By Aki Matsumoto

  • Because there’s nothing about addressing environmental issues that the company itself opposes because they are global issues, it’s relatively easy to vote in favor of shareholder proposals on environmental issues.
  • Governance proposal is the most sensitive because it’s directly related to election of directors. It’s challenging for domestic investment managers to vote in favor of shareholder proposals during proxy fights.
  • FSA’s tightening of oversight of ESG investment trusts has triggered shift by major Japanese investment managers toward establishing ESG-related-voting policies and exercising their voting rights in accordance with these policies.

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Nov 02
0

Daily Brief Event-Driven: FTSE TWSE Taiwan Dividend+ Index Rebalance Preview: Updated Dividends & Flow Shift and more

By | Daily Briefs, Event-Driven

In today’s briefing:

  • FTSE TWSE Taiwan Dividend+ Index Rebalance Preview: Updated Dividends & Flow Shift
  • Yashili’s Widening Spread Is an Opportunity
  • Readytech (RDY AU): Microequities Baulks At PEP’s A$4.50/Share Indicative Offer
  • AMFI Stock Reclassification Preview (Dec 2022): Long/Short Trade Flattening Out
  • SK On Valuation at 22 Trillion Won – Impact on SK Innovation
  • S&P BSE/​Sensex Quiddity Leaderboard Dec 22: Potential ADDs Could Outperform the Index
  • EQD | ARK Innovation (ARKK US): Is It Time to Get Back into Growth?
  • ReadyTech’s Indicative Offer of A$4.50 from Pacific Equity Partners Good Enough?
  • China VAST (6166 HK): 23 Nov Court Meeting. IFA Says Fair
  • Singapore Medical’s VGO: Acceptances at 77.37%, Closing Date Now 15 Nov

FTSE TWSE Taiwan Dividend+ Index Rebalance Preview: Updated Dividends & Flow Shift

By Brian Freitas

  • Updated forward dividend estimates and price moves lead to changes in adds/deletes and to estimated flows at the December rebalance. We now see 26 adds and 5 deletes in December.
  • The estimated one-way turnover due to adds, deletes, funding and capping is 46.6% and will result in a one-way trade of TWD 72.7bn (US$2.26bn).
  • Passive trackers will need to buy over 5 days of ADV on 15 stocks and sell over 5 days of ADV on 14 stocks. There will be trading opportunities galore.

Yashili’s Widening Spread Is an Opportunity

By Arun George

  • Yashili International Holdings (1230 HK)‘s spread to China Mengniu Dairy Co (2319 HK)’s offer (HK$1.20) has widened to 10.1% due to doubts about the satisfaction of the remaining pre-condition.
  • We think the delay in satisfying Dumex Key Condition is due to the glacial bureaucratic process. The pre-conditions long stop date is 31 July 2023, which provides sufficient time.
  • Both Danone SA (BN FP) and Mengniu can waive conditions to satisfy the pre-condition. Both have the motivation to complete the transaction as it facilitates the unwinding of their partnership.

Readytech (RDY AU): Microequities Baulks At PEP’s A$4.50/Share Indicative Offer

By David Blennerhassett

  • Software outfit ReadyTech (RDY AU) has announced an indicative proposal from Pacific Equity Partners and affiliates, to acquire ReadyTech by way of a Scheme of Arrangement at $4.50/share.
  • Pemba Capital, with 32.01% of shares out, are in discussion with PEP as to what appears to be the PE firm rolling over shares. 
  • ReadyTech’s independent board has granted PEP non-exclusive due diligence to flesh out a firm Offer. According to media reports, Microequities, with ~13%, is not on board whatsoever.

AMFI Stock Reclassification Preview (Dec 2022): Long/Short Trade Flattening Out

By Brian Freitas

  • Two-Thirds through the review period, we see 6 stocks moving from MidCap to LargeCap and vice versa, 7 stocks moving from SmallCap to MidCap, 8 moving from MidCap to SmallCap.
  • There have been changes to the list of stocks over the last couple of months and there could be more, especially on stocks that are close to the cutoff ranks.
  • There is a big gap in the performance of the stocks moving upward versus migrating downward and there could be some mean reversion over the next couple of months.

SK On Valuation at 22 Trillion Won – Impact on SK Innovation

By Douglas Kim

  • SK On announced that it recently received 1 trillion won in investment, valuing the company at 22 trillion won, 29% higher than SK Innovation’s market cap of 17 trillion won. 
  • The recent investment of nearly 1 trillion won in SK On was in the form of convertible preferred stock (CPS), which guarantees a minimum return of 7.5%.
  • Our SoTP valuation of SK Innovation suggests a target price of 254,396 won per share, which represents a 39% higher levels than current price.

S&P BSE/​Sensex Quiddity Leaderboard Dec 22: Potential ADDs Could Outperform the Index

By Janaghan Jeyakumar, CFA

  • In this insight, we take a look at the Potential ADDs/DELs for the BSE SENSEX, 100, 200, and 500 Indices in the December 2022 Rebalance.
  • The reference period for the trading data used for the index selection ended on 31st October 2022.
  • There have been a couple of key revisions to the index selection methodologies for SENSEX and SENSEX Next 50 which could have important consequences.

EQD | ARK Innovation (ARKK US): Is It Time to Get Back into Growth?

By Simon Harris

  • Growth Stocks have been hammered in the rising rate environment
  • Inflation may have peaked and central banks could be reaching the end of the hiking cycle
  • We look at derivative strategies on ARKK US to gain a broad exposure to the growth and tech

ReadyTech’s Indicative Offer of A$4.50 from Pacific Equity Partners Good Enough?

By Arun George

  • ReadyTech Holdings Ltd (RDY AU) confirmed that it received a conditional, non-binding indicative proposal from Pacific Equity Partners (PEP) at A$4.50 per share, a 38.9% premium to the undisturbed price.
  • PEP aims to jointly work with Pemba, the largest shareholder with a 32.01% stake, on the proposal. Microequities, the second-largest shareholder, is said to oppose the offer.
  • The offer represents an all-time price high but struck at a discount to peer multiples, suggesting room for a bump. At last close, the spread to the offer is 8.4%.

China VAST (6166 HK): 23 Nov Court Meeting. IFA Says Fair

By David Blennerhassett

  • On the 9 June, Urban planner China VAST Industrial Urban Development (6166 HK) received a pre-conditional Offer, by way of a Scheme, from China Jinmao Holdings (817 HK).
  • On the 17 October, China Jinmao and China VAST announced that all pre-cons for the HK$2.40/share Offer had been fulfilled.
  • The Scheme Doc is now out. The Court Meeting will be held on the 23 November. The IFA says fair and reasonable. This is done and trading tight to terms

Singapore Medical’s VGO: Acceptances at 77.37%, Closing Date Now 15 Nov

By Arun George

  • Singapore Medical (SMG SP)‘s voluntary conditional offer from management (chairman, CEO, exec director) has received acceptances of 77.37% of outstanding shares, below the 90% minimum acceptance condition.
  • The closing date has been extended to 15 November. To hit the 90% minimum acceptance condition, the offeror requires a 55.8% acceptance rate from the remaining holdout minorities.
  • The IFA previously declared the offer “not fair but reasonable.” The gross spread of 1.4% is not an attractive risk/reward profile. We continue to recommend taking profits.

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Nov 02
0

Daily Brief Consumer: Yashili International Holdings, Betagro, TVS Motor , Toyota Motor, Sony Corp, Tesla Motors, Shede Spirits, Japan Tobacco and more

By | Consumer, Daily Briefs

In today’s briefing:

  • Yashili’s Widening Spread Is an Opportunity
  • Betagro IPO Trading – Seems Fairly Valued
  • AMFI Stock Reclassification Preview (Dec 2022): Long/Short Trade Flattening Out
  • Toyota’s Q2 Is a Huge Miss; EV Strategy in Flux
  • SONY (6758) | Q2 Earnings Beat, Guidance Raise
  • Tesla Motors Buy Level for Drive to 255
  • SSE180 Index Rebalance Preview: Market Volatility & Index Changes
  • Japan Tobacco: Revised Guidance & Growth in the US With Altria JV Could Get The Shares Moving Again

Yashili’s Widening Spread Is an Opportunity

By Arun George

  • Yashili International Holdings (1230 HK)‘s spread to China Mengniu Dairy Co (2319 HK)’s offer (HK$1.20) has widened to 10.1% due to doubts about the satisfaction of the remaining pre-condition.
  • We think the delay in satisfying Dumex Key Condition is due to the glacial bureaucratic process. The pre-conditions long stop date is 31 July 2023, which provides sufficient time.
  • Both Danone SA (BN FP) and Mengniu can waive conditions to satisfy the pre-condition. Both have the motivation to complete the transaction as it facilitates the unwinding of their partnership.

Betagro IPO Trading – Seems Fairly Valued

By Clarence Chu

  • Betagro (BTG TB) raised about US$460m in its Thailand IPO. 
  • Betagro is an integrated agro-industrial and food business in Thailand.
  • In this note we will talk about the trading dynamics.

AMFI Stock Reclassification Preview (Dec 2022): Long/Short Trade Flattening Out

By Brian Freitas

  • Two-Thirds through the review period, we see 6 stocks moving from MidCap to LargeCap and vice versa, 7 stocks moving from SmallCap to MidCap, 8 moving from MidCap to SmallCap.
  • There have been changes to the list of stocks over the last couple of months and there could be more, especially on stocks that are close to the cutoff ranks.
  • There is a big gap in the performance of the stocks moving upward versus migrating downward and there could be some mean reversion over the next couple of months.

Toyota’s Q2 Is a Huge Miss; EV Strategy in Flux

By SC Capital

  • Toyota’s Q2 EPS undershot estimates by 28%. FY3/23 guidance was kept flat, but given a more favorable assumption for forex tailwinds, Toyota effectively lowered FY3/23 EPS by 7%.  
  • Management partially admitted to parts of recent media reports that Toyota was overhauling its EV strategy.  Targets of 3.5m BEVs by 2030 are unchanged, but the ramp may be slower.
  • Toyota’s 2H FY3/23 hurdles are low and its auto division’s operating profits appear to be bottoming. Stock may still be a laggard, but we’re bullish on a 12-month basis. 

SONY (6758) | Q2 Earnings Beat, Guidance Raise

By Mark Chadwick

  • Q2 OP rises +8% to Y344 billion on strong growth in Music and Image Sensors, despite 49% profit fall in Games segment.
  • SONY sold 3.3 million PS5 units in the quarter, the same figure as a year ago. Managment remains confident of hitting 18m units by the end of the fiscal year
  • Sony’s stock is down -30% YTD. We think the Q2 results/guidance lift should help put a floor under the stock. We would be buyers below 15x earnings

Tesla Motors Buy Level for Drive to 255

By Thomas Schroeder

  • TSLA (US) shows near term upside that is expected to fade and set up a better entry level below 200 with stiff resistance near the 255 target.
  • Macro descending wedge is the dominant driver into 2023 with lower wedge support at 180/160 and upper pattern resistance at 330 currently and will shift lower with time translation.
  • Buy volumes on this bounce have tapered off, suggesting this rise is corrective in nature and why our buy target revolves around a new low.

SSE180 Index Rebalance Preview: Market Volatility & Index Changes

By Brian Freitas

  • With the review period complete, we expect 18 changes to the index in December – most deletions are Financials, most inclusions are Industrials.
  • The market volatility over the last couple of weeks has altered the sectoral breakup of the potential changes with Industrials gaining index spots at the expense of Consumer Staples.
  • We see 5 of the potential adds being added to the MSCI China Index in February and 6 of the potential adds being added to the FTSE All-World/All-Cap in March.

Japan Tobacco: Revised Guidance & Growth in the US With Altria JV Could Get The Shares Moving Again

By Oshadhi Kumarasiri

  • Japan Tobacco (2914 JP)’s 3Q22 was stronger than expected with revenue and OP surpassing consensus by 9.2% and 8.8% respectively through better than expected performance in almost all the markets.
  • Just as we predicted in our previous insights, JT upgraded its revenue, OP, FCF and DPS guidance by ¥182bn, ¥100bn, ¥77bn and ¥38 respectively sighting stronger volumes and favorable pricing.
  • We believe this earnings upgrade and a JV with Altria to expand Ploom in the US should get the share price going again after being held back by Russia fears.

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Nov 02
0

Daily Brief Health Care: Singapore Medical, WuXi AppTec Co. Ltd. and more

By | Daily Briefs, Healthcare

In today’s briefing:

  • Singapore Medical’s VGO: Acceptances at 77.37%, Closing Date Now 15 Nov
  • Singapore Medical Extends Offer As Tendering Surprises
  • WuXi AppTec (603259.CH/2359.HK) 22Q3- It’s Too Early to Think That The Past Rapid Growth Has Resumed

Singapore Medical’s VGO: Acceptances at 77.37%, Closing Date Now 15 Nov

By Arun George

  • Singapore Medical (SMG SP)‘s voluntary conditional offer from management (chairman, CEO, exec director) has received acceptances of 77.37% of outstanding shares, below the 90% minimum acceptance condition.
  • The closing date has been extended to 15 November. To hit the 90% minimum acceptance condition, the offeror requires a 55.8% acceptance rate from the remaining holdout minorities.
  • The IFA previously declared the offer “not fair but reasonable.” The gross spread of 1.4% is not an attractive risk/reward profile. We continue to recommend taking profits.

Singapore Medical Extends Offer As Tendering Surprises

By David Blennerhassett

  • Back on the 14 September, healthcare provider Singapore Medical (SMG SP) announced a  voluntary MBO from TLW at S$0.37/share.  The IFA concluded the Offer was “not fair but reasonable”. 
  • The Offer is conditional on 90% of shares out held by the Offeror, and the TLW shareholders plus irrevocables hold 51.67% all-in. This 90% conditionality is firm. 
  • As of the first close, TLW now has 77.37%. The Offer has been extended by a fortnight. The Offer price has NOT been declared final.

WuXi AppTec (603259.CH/2359.HK) 22Q3- It’s Too Early to Think That The Past Rapid Growth Has Resumed

By Xinyao (Criss) Wang

  • WuXi AppTec’s 2022Q3 results beat the market expectations. The Company’s performance showed good recovery from the prior pandemic/lockdown, but it has not yet entirely reversed the trend of slowing growth.
  • Wuxi AppTec has a problem of decreasing future gross margins. Although the Q3 results could bring short-term catalyst for WuXi AppTec’s share price, such rebound may not last long.
  • We further analyzed WuXi AppTec’s business, and we remain to be conservative on the Company, because the whole outlook and investment logic of CXO have changed. 

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Nov 02
0

Daily Brief Financials: Highwealth Construction, China Vast Industrial Urban Development, Hana Financial, HDFC Bank, Groupe Bruxelles Lambert Sa, Go Digit General Insurance, Bajaj Finance Ltd and more

By | Daily Briefs, Financials

In today’s briefing:

  • FTSE TWSE Taiwan Dividend+ Index Rebalance Preview: Updated Dividends & Flow Shift
  • China VAST (6166 HK): 23 Nov Court Meeting. IFA Says Fair
  • Hana – Granular Data On China
  • HDFC Bank: Strong Results – In Line with Expectation
  • Selected European Holdcos and DLC: October ‘22 Report
  • Go Digit General Insurance Pre-IPO – The Negatives – Still Has a Lot to Explain
  • Bajaj Finance: Continues to Scale Up Well

FTSE TWSE Taiwan Dividend+ Index Rebalance Preview: Updated Dividends & Flow Shift

By Brian Freitas

  • Updated forward dividend estimates and price moves lead to changes in adds/deletes and to estimated flows at the December rebalance. We now see 26 adds and 5 deletes in December.
  • The estimated one-way turnover due to adds, deletes, funding and capping is 46.6% and will result in a one-way trade of TWD 72.7bn (US$2.26bn).
  • Passive trackers will need to buy over 5 days of ADV on 15 stocks and sell over 5 days of ADV on 14 stocks. There will be trading opportunities galore.

China VAST (6166 HK): 23 Nov Court Meeting. IFA Says Fair

By David Blennerhassett

  • On the 9 June, Urban planner China VAST Industrial Urban Development (6166 HK) received a pre-conditional Offer, by way of a Scheme, from China Jinmao Holdings (817 HK).
  • On the 17 October, China Jinmao and China VAST announced that all pre-cons for the HK$2.40/share Offer had been fulfilled.
  • The Scheme Doc is now out. The Court Meeting will be held on the 23 November. The IFA says fair and reasonable. This is done and trading tight to terms

Hana – Granular Data On China

By Daniel Tabbush

  • Hana Financial Group reported a loss in its China banking business in 9MQ22
  • Hana Bank (China) recorded credit costs at KRW119bn or 20% of group total
  • Off balance sheet commitments in China appear to be moving on balance sheet 

HDFC Bank: Strong Results – In Line with Expectation

By Ankit Agrawal, CFA

  • Annualized credit cost at 87bp was at the lowest in many quarters. This provides further room to the bank to invest for future growth.
  • HDFCB continues to focus on enhancing its distribution presence, both physical and digital. It is continuing to add new branches. Its digital efforts are also paying off well.
  • At a valuation of 20x P/E, HDFC Bank (HDFCB IN) is attractively priced and offers potential for 23%+ IRR over the next 3Y.

Selected European Holdcos and DLC: October ‘22 Report

By Jesus Rodriguez Aguilar

  • Discounts to NAV of covered holdcos have mainly tightened during October in line with the market recovery. 
  • Discounts to NAV (31 October): C.F.Alba, 48.7%; GBL, 34.4%; Heineken Holding, 18.3%; Industrivärden C, 9.8%; Investor B, 16.8%; Porsche Automobile Holding 41.8%. The spread of Rio Tinto DLC tightened to 8.4%.
  • Spreads tend to widen in bear markets but short-term recoveries provide opportunities on tightening discounts. Recommended trades are: GBL, Rio Tinto (DLC), CF Alba (long position).

Go Digit General Insurance Pre-IPO – The Negatives – Still Has a Lot to Explain

By Sumeet Singh

  • Go Digit General Insurance  is looking to raise about US$503m in its upcoming India IPO. The deal will be run by ICICISec, MS, Axis, Edelweiss, HDFC Bank and IIFL.
  • Go Digit General Insurance is a digital full stack insurance company, offering motor insurance, health insurance, travel insurance, property insurance, marine insurance, liability insurance and other insurance products.
  • In this note, we talk about the not so positive aspects of the deal.

Bajaj Finance: Continues to Scale Up Well

By Ankit Agrawal, CFA

  • Bajaj Finance Ltd (BAF IN) reported a strong Q2FY23 earnings with an AUM growth of 7.0% QoQ and 31% YoY. AUM growth was broad-based with all business lines doing well.
  • BAF is upbeat about its customer acquisition momentum and has upgraded its customer acquisition guidance for FY23 to 10-11mm vs 9-10mm earlier.
  • Competitive intensity remains high, however, BAF continues to be disciplined around margins and risk management. Also, BAF’s increasing digital footprint is helping it to drive growth despite elevated competition.

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Nov 02
0

Daily Brief Technical Analysis: Tesla Motors Buy Level for Drive to 255 and more

By | Daily Briefs, Technical Analysis

In today’s briefing:

  • Tesla Motors Buy Level for Drive to 255
  • Bear Market Rally Continues; Financials/XLF Reversing YTD Downtrend; Small-Caps at 11-Month RS Highs

Tesla Motors Buy Level for Drive to 255

By Thomas Schroeder

  • TSLA (US) shows near term upside that is expected to fade and set up a better entry level below 200 with stiff resistance near the 255 target.
  • Macro descending wedge is the dominant driver into 2023 with lower wedge support at 180/160 and upper pattern resistance at 330 currently and will shift lower with time translation.
  • Buy volumes on this bounce have tapered off, suggesting this rise is corrective in nature and why our buy target revolves around a new low.

Bear Market Rally Continues; Financials/XLF Reversing YTD Downtrend; Small-Caps at 11-Month RS Highs

By Joe Jasper

  • The market remains in bear market rally mode, and our price target remains the 200-day MAs on the SPX and Russell 2000, as discussed in last week’s Compass (Oct. 25).
  • Longer-Term, this is still a bear market until the S&P 500 and IWM can break above their respective YTD downtrends/200-day MAs, and markets could easily test their lows again.
  • With that said, there are signs that suggest breakouts above YTD downtrends/200-day MAs could be coming. Catalysts include the FOMC announcement on Wednesday, followed by midterm elections on Nov. 8.

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Nov 02
0

Daily Brief ECM: Betagro IPO Trading – Seems Fairly Valued and more

By | Daily Briefs, ECM

In today’s briefing:

  • Betagro IPO Trading – Seems Fairly Valued
  • Go Digit General Insurance Pre-IPO – The Negatives – Still Has a Lot to Explain

Betagro IPO Trading – Seems Fairly Valued

By Clarence Chu

  • Betagro (BTG TB) raised about US$460m in its Thailand IPO. 
  • Betagro is an integrated agro-industrial and food business in Thailand.
  • In this note we will talk about the trading dynamics.

Go Digit General Insurance Pre-IPO – The Negatives – Still Has a Lot to Explain

By Sumeet Singh

  • Go Digit General Insurance  is looking to raise about US$503m in its upcoming India IPO. The deal will be run by ICICISec, MS, Axis, Edelweiss, HDFC Bank and IIFL.
  • Go Digit General Insurance is a digital full stack insurance company, offering motor insurance, health insurance, travel insurance, property insurance, marine insurance, liability insurance and other insurance products.
  • In this note, we talk about the not so positive aspects of the deal.

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Nov 02
0

Daily Brief Credit: Morning Views Asia: Adaro Minerals and more

By | Credit, Daily Briefs

In today’s briefing:

  • Morning Views Asia: Adaro Minerals, Greenland Holdings Corp, Longfor Properties, UPL Ltd
  • Tata Steel – Earnings Flash – Q2 FY 2022-23 Results – Lucror Analytics

Morning Views Asia: Adaro Minerals, Greenland Holdings Corp, Longfor Properties, UPL Ltd

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.

Tata Steel – Earnings Flash – Q2 FY 2022-23 Results – Lucror Analytics

By Trung Nguyen

Tata Steel’s Q2/22-23 results were weak as expected, albeit the company outperformed most of the industry. While many peers posted record losses, Tata Steel still achieved a profit, with reasonable EBITDA/ton. That said, the financial risk profile has deteriorated, with lower earnings and given large cash outflows for the Neelachal Ispat Nigam Limited acquisition. Liquidity is weak.

We revise downwards our forecasts for revenue growth and margins, to reflect the deteriorating performance. We expect Tata Steel to continue facing pressure, given the weak industry dynamics. That said, the company should also continue to outperform peers, given its scale and deep vertical integration. 

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Nov 02
0

Daily Brief Thematic (Sector/Industry): Smartkarma Webinar | Short Trade Ideas in US and more

By | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

  • Smartkarma Webinar | Short Trade Ideas in US

Smartkarma Webinar | Short Trade Ideas in US

By Smartkarma Research

In the next webinar, we have Smartkarma Insight Provider Eric Fernandez, CFA who will be taking us through his top short trade ideas in the US. Have your burning questions answered in the live Q&A session that will follow after Eric’s presentation. 

The webinar will be hosted on Wednesday, 16 November 2022, 17:00 SGT/HKT.

Eric Fernandez, CFA, has 30+ years of research and investment banking experience in company modeling, equity valuation and credit is the backbone of Two Rivers Analytics analytical approach. He founded Two Rivers to remedy a shortfall of traditional short idea generation which relies primarily on thematic, top-down processes. Instead, Two Rivers combines a methodical framework to sift through the universe looking for markers of various types of short candidates, which are subsequently vetted via traditional fundamental analysis. Our Stocks at Risk (SAR 2.0) models are a comprehensive framework for identifying short sale candidates. Each model is tailored to the various types of short situations. The models generate ideas to match different client preferences in shorting styles, from lower beta, long horizon Declining Businesses, to higher volatility Breaking Growth short types. They help in diversifying short portfolios by type, beta, time horizon, risk/return, and other characteristics. On net, this framework produces more ideas, boosting returns, and saving time for portfolio managers and analysts.

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