Smartkarma Daily Briefs, Author at Smartkarma

Nov 03

Daily Brief Credit: Asia HY Monthly – October 2022 – Lucror Analytics and more

By Smartkarma Daily Briefs | Credit, Daily Briefs

In today’s briefing:

Asia HY Monthly – October 2022 – Lucror Analytics

Asia HY Monthly – October 2022 – Lucror Analytics

The Asia Monthly focuses on providing updates on recent events, information on new issues and spread movements, as well as summarising our top picks. The Asia Monthly is intended to broaden investors’ understanding of the Asian USD high-yield market.

💡 Before it’s here, it’s on Smartkarma

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

✓ Unlimited Research Summaries
✓ Personalised Alerts
✓ Custom Watchlists
✓ Company Data and News
✓ Events & Webinars

Nov 03

Daily Brief Crypto: Reddit Creates an Adoption Tsunami and more

By Smartkarma Daily Briefs | Crypto, Daily Briefs

In today’s briefing:

Reddit Creates an Adoption Tsunami

Reddit Creates an Adoption Tsunami

By Carbono Insights

Reddit creates and adoption tsunami Bear times are build times.
You’re probably tired of hearing this already. But if you’re still with us during these bear times, and you’re still following the news, you’re probably aware that engineers are hard at work building what will be the rails of the next great wave of adoption.
As soon as liquidity enters back the room, crypto will be ready to onboard the first billion customers, be sure of that.

💡 Before it’s here, it’s on Smartkarma

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

✓ Unlimited Research Summaries
✓ Personalised Alerts
✓ Custom Watchlists
✓ Company Data and News
✓ Events & Webinars

Nov 03

Daily Brief Quantitative Analysis: Screening for GEMs: November 2022 and more

By Smartkarma Daily Briefs | Daily Briefs, Quantitative Analysis

In today’s briefing:

Screening for GEMs: November 2022
Volatility-Based Equity Allocations

Screening for GEMs: November 2022

By Wium Malan, CFA

An overview (and output) of our machine learning-driven GEM screening model, which seeks to find the best medium-term long ideas within the top100 stocks in the MSCI GEM Index.
The model is based on 1) a quantitative multifactor screening model, enhanced by two AI Technology-based approaches; 2) a Deep Neural Network model, and 3) a Recurrent Neural Network model.
Developed over roughly 4 years and implemented in its current state for over 2 years, the model has a solid real-world alpha-generating performance track record, discussed in detail below.

Volatility-Based Equity Allocations

By Nicolas Rabener

The VIX currently trades within its top quartile since 1990
Using volatility to time equity allocations is a widely used strategy
However, it is challenging to pursue this over the long-term

💡 Before it’s here, it’s on Smartkarma

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

✓ Unlimited Research Summaries
✓ Personalised Alerts
✓ Custom Watchlists
✓ Company Data and News
✓ Events & Webinars

Nov 03

Daily Brief Thematic (Sector/Industry): Social Platform Commerce in Southeast Asia: Basics and more

By Smartkarma Daily Briefs | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

Social Platform Commerce in Southeast Asia: Basics, Key Dynamics and Opportunities
The Future Directions of A-Share After the 20th National Congress of the CPC

Social Platform Commerce in Southeast Asia: Basics, Key Dynamics and Opportunities

By Chalawan

Social platforms and e-commerce platforms used to exist in a symbiosis where the former harnessed consumers’ attention and the latter offered goods for sale, and where ad dollars traded hands in between.
The rise of Social Commerce has disrupted that status quo forever, with both types of platforms making moves to better delight consumers while capturing a greater share of the economic value.
While still in its early days, this archetype of Social Commerce is already proving consequential to Southeast Asia’s e-commerce landscape and forcing brands and retail companies to reconsider their online channel mix

The Future Directions of A-Share After the 20th National Congress of the CPC

By Xinyao (Criss) Wang

As investors may not really realize the significance and historical opportunities represented by the 20th National Congress, we analyzed the potential future directions of A-share and related investment opportunities.
The real battlefield isn’t in Taiwan Strait but in capital market.In the final analysis,it is to achieve the subjectivity of RMB rather than an extension of the credit of dollar.
Only by making full preparations can China open to the outside world with higher quality. We advise investors to change thinking mode so as not to miss China’s next boom.

💡 Before it’s here, it’s on Smartkarma

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

✓ Unlimited Research Summaries
✓ Personalised Alerts
✓ Custom Watchlists
✓ Company Data and News
✓ Events & Webinars

Nov 03

Daily Brief ECM: Bikaji Foods International IPO – Spicy Snacks and more

By Smartkarma Daily Briefs | Daily Briefs, ECM

In today’s briefing:

Bikaji Foods International IPO – Spicy Snacks
Fusion Micro Finance IPO – Not Worth the Premium
Giant Biogene IPO Trading – Demand Was Relatively Better but Still Weak

Bikaji Foods International IPO – Spicy Snacks

By Sumeet Singh

Bikaji Foods (BIKAJI IN), an ethnic snacks company, is looking to raise approximately US$107m in its India IPO.
Its product range includes six principal categories: bhujia, namkeen, packaged sweets, papad, western snacks as well as other snacks which primarily include gift packs, frozen food, mathri range and cookies.
In this note, we look at the company’s past performance.

Fusion Micro Finance IPO – Not Worth the Premium

By Ethan Aw

Fusion Micro Finance Ltd (1053199D IN) is looking to raise approximately US$134m in its India IPO.
Fusion Micro Finance (FMF) is a non-banking financial company – microfinance institution (NBFC-MFI) that provides financial services to unserved and underserved women in rural and peri-rural areas across India.
We have looked at the background of the deal in our earlier notes. In this note, we talk about its recent RHP updates, peer comparison and valuations.

Giant Biogene IPO Trading – Demand Was Relatively Better but Still Weak

By Sumeet Singh

Giant Biogene (GB) raised around US$70m by pricing its HK IPO at the low-end.
GB is a leader in the bioactive ingredient-based professional skin treatment product industry in China.
We had looked at various aspects of the deal in our previous note. In this note, we will talk about the demand for the deal and other trading dynamics.

💡 Before it’s here, it’s on Smartkarma

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

✓ Unlimited Research Summaries
✓ Personalised Alerts
✓ Custom Watchlists
✓ Company Data and News
✓ Events & Webinars

Nov 03

Daily Brief Event-Driven: FTSE TWSE Dividend+ Quiddity Leaderboard Dec 22: Good Start and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

FTSE TWSE Dividend+ Quiddity Leaderboard Dec 22: Good Start, Some Surprises, More to Come!
Singapore Medical’s VGO: Revised Offer of S$0.40 Is Good to Go
KOSPI200 Index Rebalance Preview: Potential Changes, Excess Volumes & Pre-Positioning
Sweden’s EQT Partners to Invest Big in SK Shieldus: Impact on SK Square

FTSE TWSE Dividend+ Quiddity Leaderboard Dec 22: Good Start, Some Surprises, More to Come!

By Janaghan Jeyakumar, CFA

In October 2022, FTSE Russell confirmed that the number of constituents in the FTSE TWSE Taiwan Dividend+ Index will be increased from 30 to 50 during the December 2022 Rebalance.
The estimated one-way flow was ~US$2bn and I discussed my flow expectations for this event in FTSE TWSE Dividend+ Quiddity Leaderboard Dec 22: New Methodology! Massive Flow Implications!
With less than three weeks remaining to the base date, below is an updated look at my latest flow expectations for this event.

Singapore Medical’s VGO: Revised Offer of S$0.40 Is Good to Go

By Arun George

Singapore Medical (SMG SP)‘s voluntary conditional offer from management (chairman, CEO, exec director) has been increased from S$0.37 to S$0.40 per share (share option unchanged).
The revised offer is final unless there is a competitive situation. The offeror came to the realisation that a bump was required to meet the 90% minimum acceptance condition.
Acceptances stand at 77.42% of outstanding shares. The revised offer is now reasonable and should be sufficient to nudge holdouts to accept. At last close, the gross spread is 5.3%.

KOSPI200 Index Rebalance Preview: Potential Changes, Excess Volumes & Pre-Positioning

By Brian Freitas

With the review period complete, we see 1 high probability change and 1 lower probability change for the Korea Stock Exchange Kospi 200 Index (KOSPI2 INDEX) in December.
We estimate passive trackers will need to trade over 10 days of ADV on the high probability names. There are indications that there are pre-positions built on the stocks.
With short-sell eligibility flipping post implementation of the changes, a lot of pre-positions will be unwound prior to implementation and there will be trading opportunities on the reverse side.

Sweden’s EQT Partners to Invest Big in SK Shieldus: Impact on SK Square

By Douglas Kim

On 2 November, it was reported that Sweden’s EQT Partners is to acquire a 36.87% stake in SK Shieldus.
EQT Partners is expected to invest more than 2 trillion won in SK Shieldus which is expected to be valued at about 4.5 trillion won to 5.2 trillion won.
Our base case valuation of SK Square is NAV per share of 59,272, which is 59% higher than current price.

💡 Before it’s here, it’s on Smartkarma

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

✓ Unlimited Research Summaries
✓ Personalised Alerts
✓ Custom Watchlists
✓ Company Data and News
✓ Events & Webinars

Nov 03

Daily Brief Macro: North Korea Fires Rockets Across NLL – First Time Since 1953 and more

By Smartkarma Daily Briefs | Daily Briefs, Macro

In today’s briefing:

North Korea Fires Rockets Across NLL – First Time Since 1953
CX Daily: Will Fosun’s $2.2 Billion Steel Unit Sale Save The Conglomerate?
CX Daily: Yuan Gets More International Love As Dollar Rivalry Grows

North Korea Fires Rockets Across NLL – First Time Since 1953

By Douglas Kim

In the past few hours, it was reported that North Korea fired at least 23 missiles crossing the NLL (Northern Limit Line) for the first time in 1953.
KJU’s approval to fire missiles below NLL is likely to be part of a larger potential military confrontation in North Asia (including Korean Peninsula and Taiwan).
We do not believe KJU gave the orders to fire rockets below NLL on his own but likely to have received the support of Xi Jinping.

CX Daily: Will Fosun’s $2.2 Billion Steel Unit Sale Save The Conglomerate?

By Caixin Global

In Depth: Will Fosun’s $2.2 billion steel unit sale save the conglomerate?
Covid lockdowns stoke merchant concerns ahead of peak shopping season
Trending in China: Social media users hail the return of a top Chinese biologist from the U.S.

CX Daily: Yuan Gets More International Love As Dollar Rivalry Grows

By Caixin Global

Yuan / In Depth: Yuan gets more international love as dollar rivalry grows
China-Vietnam / Xi pledges supply chain stability with Vietnam
PMI / China’s manufacturing contracts for third straight month, Caixin PMI shows

💡 Before it’s here, it’s on Smartkarma

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

✓ Unlimited Research Summaries
✓ Personalised Alerts
✓ Custom Watchlists
✓ Company Data and News
✓ Events & Webinars

Nov 03

Most Read: Highwealth Construction, Hubei Feilihua Quartz Glas-A, HPSP, Shede Spirits, Taiwan Glass Industry, Singapore Medical, Bikaji Foods, Samyang Foods, Orion Corp and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

FTSE TWSE Taiwan Dividend+ Index Rebalance Preview: Updated Dividends & Flow Shift
ChiNext/ChiNext50 Index Rebalance Preview: Overlapping Stocks & Mean Reversion
KOSDAQ150 Index Rebalance Preview: Big Churn in IT, Healthcare Stocks
SSE180 Index Rebalance Preview: Market Volatility & Index Changes
FTSE TWSE Dividend+ Quiddity Leaderboard Dec 22: Good Start, Some Surprises, More to Come!
Singapore Medical Extends Offer As Tendering Surprises
Bikaji Foods International IPO – Spicy Snacks
Singapore Medical’s VGO: Revised Offer of S$0.40 Is Good to Go
KOSPI200 Index Rebalance Preview: Potential Changes, Excess Volumes & Pre-Positioning
A Pair Trade Between Orion Holdings and Orion Corp

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.

ChiNext/ChiNext50 Index Rebalance Preview: Overlapping Stocks & Mean Reversion

By Brian Freitas

At the end of the review period, we forecast 10 changes for the Chinext Price Index (SZ399006 INDEX) and 5 changes for the ChiNext 50 Index in December.
Passive trackers will need to buy +/-0.5 days of ADV for most inclusions and exclusions from the indices. The impact on the potential deletions is higher on average.
The potential adds have outperformed the potential deletes over the last six months, though there has been a sharp narrowing of the gap over the last few weeks.

KOSDAQ150 Index Rebalance Preview: Big Churn in IT, Healthcare Stocks

By Brian Freitas

With the review period complete, we see 11 potential changes to the KOSDAQ 150 Index (KOSDQ150 INDEX) at the December rebalance.
Most of the potential changes are high probability ones, but there are some stocks that are very close to market cap and liquidity cutoffs.
The impact of passive trading will be much higher on the potential deletes as compared to the potential inclusions, though trade notionals are higher for the potential adds.

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.

FTSE TWSE Dividend+ Quiddity Leaderboard Dec 22: Good Start, Some Surprises, More to Come!

By Janaghan Jeyakumar, CFA

In October 2022, FTSE Russell confirmed that the number of constituents in the FTSE TWSE Taiwan Dividend+ Index will be increased from 30 to 50 during the December 2022 Rebalance.
The estimated one-way flow was ~US$2bn and I discussed my flow expectations for this event in FTSE TWSE Dividend+ Quiddity Leaderboard Dec 22: New Methodology! Massive Flow Implications!
With less than three weeks remaining to the base date, below is an updated look at my latest flow expectations for this event.

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.

Bikaji Foods International IPO – Spicy Snacks

By Sumeet Singh

Bikaji Foods (BIKAJI IN), an ethnic snacks company, is looking to raise approximately US$107m in its India IPO.
Its product range includes six principal categories: bhujia, namkeen, packaged sweets, papad, western snacks as well as other snacks which primarily include gift packs, frozen food, mathri range and cookies.
In this note, we look at the company’s past performance.

Singapore Medical’s VGO: Revised Offer of S$0.40 Is Good to Go

By Arun George

Singapore Medical (SMG SP)‘s voluntary conditional offer from management (chairman, CEO, exec director) has been increased from S$0.37 to S$0.40 per share (share option unchanged).
The revised offer is final unless there is a competitive situation. The offeror came to the realisation that a bump was required to meet the 90% minimum acceptance condition.
Acceptances stand at 77.42% of outstanding shares. The revised offer is now reasonable and should be sufficient to nudge holdouts to accept. At last close, the gross spread is 5.3%.

KOSPI200 Index Rebalance Preview: Potential Changes, Excess Volumes & Pre-Positioning

By Brian Freitas

With the review period complete, we see 1 high probability change and 1 lower probability change for the Korea Stock Exchange Kospi 200 Index (KOSPI2 INDEX) in December.
We estimate passive trackers will need to trade over 10 days of ADV on the high probability names. There are indications that there are pre-positions built on the stocks.
With short-sell eligibility flipping post implementation of the changes, a lot of pre-positions will be unwound prior to implementation and there will be trading opportunities on the reverse side.

A Pair Trade Between Orion Holdings and Orion Corp

By Douglas Kim

In this insight, we discuss a pair trade between Orion Holdings (001800 KS) (go long) and Orion Corp (271560 KS) (go short).
Orion Holdings has a dividend yield of 4.6% versus 0.7% for Orion Corp. For the value investors that seek higher dividends, Orion Holdings is more attractive versus Orion Corp.
We believe the price gap between these two stocks have widened too much in the past several months and this gap is likely to decrease again.

💡 Before it’s here, it’s on Smartkarma

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

✓ Unlimited Research Summaries
✓ Personalised Alerts
✓ Custom Watchlists
✓ Company Data and News
✓ Events & Webinars

Nov 02

Daily Brief South Korea: SK Innovation, LG Energy Solution, Hana Financial and more

By Smartkarma Daily Briefs | Daily Briefs, South Korea

In today’s briefing:

SK On Valuation at 22 Trillion Won – Impact on SK Innovation
Close Out the Pair Trade Between LG Chem & LG Energy Solution
Hana – Granular Data On China

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.

Close Out the Pair Trade Between LG Chem & LG Energy Solution

By Douglas Kim

On 25 October, we recommended a pair trade between LG Chem (go long) and LGES (go short). Since then, this trade has resulted in a net gain of 15.7%.
It is very unusual to get this kind of alpha sized gains on Korean large caps in such a short time period.
Given the sharp net appreciation on this pair trade in the past week, we would close out this trade.