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Smartkarma Daily Briefs

Nov 01
0

Daily Brief ECM: Global Health IPO – Small Player but Attractive and more

By | Daily Briefs, ECM

In today’s briefing:

  • Global Health IPO – Small Player but Attractive
  • Go Digit General Insurance Pre-IPO – The Positives – Has Been Growing a Lot Faster than the Industry
  • Boeing Co: Major Drivers
  • Tyler Technologies: Acquisition of Rapid Financial Solutions & Other Drivers

Global Health IPO – Small Player but Attractive

By Ethan Aw

  • Global Health (Medanta) (GH IN) is looking to raise approximately US$268m in its upcoming India IPO.  
  • Global Health (GH) is a hospital network that operates under the Medanta brand. The firm currently has five hospitals in operation and one more planned for development.
  • We have looked at the background of the deal in our earlier notes. In this note, we will talk about the peer comparison and valuations.

Go Digit General Insurance Pre-IPO – The Positives – Has Been Growing a Lot Faster than the Industry

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 positive aspects of the deal.

Boeing Co: Major Drivers

By Baptista Research

  • Boeing delivered yet another highly disappointing set of results as it failed to meet the market expectations with respect to revenues as well as earnings.
  • Despite the challenge created by the supply chain market problems, Boeing’s management believes that their performance was not too bad.
  • The revenue increased by 4% in the third quarter, and besides that, the company delivered 9 airplanes in the quarter and has 115 airplanes in inventory.

Tyler Technologies: Acquisition of Rapid Financial Solutions & Other Drivers

By Baptista Research

  • Tyler Technologies delivered yet another all-around beat that was a result of its 3% organic growth in this quarter, excluding COVID-related revenues of approximately 9%.
  • It reflects both company’s accelerating shift to the cloud and growth in transaction-based revenues.
  • Overall, we provide the stock of Tyler Technologies with a ‘Hold’ rating and a revision in the target price.

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Nov 01
0

Daily Brief ESG: COP27: Agriculture and Food Stocks Likely to Be Most Affected by Conference Talks and more

By | Daily Briefs, ESG

In today’s briefing:

  • COP27: Agriculture and Food Stocks Likely to Be Most Affected by Conference Talks
  • COP27: Despite Limited Expectations There Are Several Potential Bright Spots
  • ISSB Affirms Scope 3 Emissions Reporting Requirements and Investor-Centric Focus

COP27: Agriculture and Food Stocks Likely to Be Most Affected by Conference Talks

By Kyle Rudden

  • COP27, the 27th annual United Nations international conference on climate change, starts on 6 November and runs through 18 November – in the Egyptian coastal city of Sharm el-Sheikh.
  • Whereas climate mitigation and clean energy were the main focus of prior conferences, climate adaptation and sustainable agriculture and food are top priorities for the COP26 Presidency.
  • Therefore, agriculture and food stocks are poised to be the most impacted on a relative basis by COP27 proceedings and outcomes. This Insight considers the potential “winners and losers.”

COP27: Despite Limited Expectations There Are Several Potential Bright Spots

By Kyle Rudden

  • COP27, the 27th annual United Nations international conference on climate change, starts on 6 November and runs through 18 November – in the Egyptian coastal city of Sharm el-Sheikh.
  • World leaders and delegations from 196 nations and territories are expected to collaborate on a host of issues such as finance, decarbonisation, agriculture, water, energy, and biodiversity.
  • Overall expectations are being kept in check, but COP27 is likely to focus on climate adaptation and sectors like agriculture/food that heretofore have taken a back seat to clean energy.

ISSB Affirms Scope 3 Emissions Reporting Requirements and Investor-Centric Focus

By Kyle Rudden

  • The International Sustainability Standards Board (ISSB) recently confirmed important aspects of its proposed sustainability reporting standards. One step closer to a unified standard.
  • Particularly noteworthy is confirmation that disclosures of Scope 3 emissions will be required. Scope 3 emissions are largely unreported, but account for the majority of total emissions.
  • Scope 3 disclosure could have repercussions for ESG ratings, ESG indices based on ESG ratings, and potentially (though too soon to tell) reconstutions of exchange-traded funds.

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Nov 01
0

Daily Brief Thematic (Sector/Industry): China A-Share Consumer Staples: An Analysis of the Opportunities Ahead and more

By | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

  • China A-Share Consumer Staples: An Analysis of the Opportunities Ahead
  • Brazilian Presidential Election; What Could a Lula Victory Mean for Financials and Fintech?

China A-Share Consumer Staples: An Analysis of the Opportunities Ahead

By Osbert Tang, CFA

Brazilian Presidential Election; What Could a Lula Victory Mean for Financials and Fintech?

By Victor Galliano

  • Lula’s narrow win in the second round of the Brazilian Presential election has so far passed in relative calm, although sitting President Jair Bolsonaro has yet to concede defeat
  • Markets will be hoping for a peaceful transition, and influential Bolsonaro allies have asked Brazilians to respect the result, to avoid social unrest and any potential intervention by the military
  • It is unclear how anti-market Lula’s policies will be but we expect downside risk for Brazilian financials and fintechs; Banco do Brasil is in for volatility, Itausa may be defensive

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Nov 01
0

Daily Brief Equity Bottom-Up: Oriental Land: Modest Price Reaction to Revised Guidance Indicates a Breakdown Is Imminent and more

By | Daily Briefs, Equity Bottom-Up

In today’s briefing:

  • Oriental Land: Modest Price Reaction to Revised Guidance Indicates a Breakdown Is Imminent
  • Mercari – Q1 23 Results Reaction: Strong Domestic Drives OP Beat but Spending to Rise
  • Los Andes Copper: Insider Buying Continues and PFS in Next 60 Days
  • Vitasoy (345): Time to Bounce
  • Kino Indonesia (KINO IJ) – Staples with a Discretionary Edge
  • Foxconn / Hon Hai: Quick-Take On The Zhengzhou Outbreak; Accumulate on Weakness
  • Mitra Keluarga Karyasehat Tbk (MIKA IJ) – Higher Volumes Lower Intensity
  • Takeda: Thrilling Journey Ahead with a Dengue Vaccine Launch and New Approvals
  • Asahi Intecc (7747 JP): Stellar Performance in FY22 Likely to Accelerate in FY23
  • Ping An Healthcare and Technology (1833.HK) – The New Acquisition Is Hard to Turn Things Around

Oriental Land: Modest Price Reaction to Revised Guidance Indicates a Breakdown Is Imminent

By Oshadhi Kumarasiri

  • Oriental Land (4661 JP) raised its FY23 revenue and OP guidance by 8.4% and 59.4% respectively last week sighting a recovery in demand for leisure during the second-half of the year.
  • The modest price reaction to upgraded guidance could be an indication that a breakdown is imminent.
  • Cost overruns of ¥70bn and a delay to the scheduled opening of Fantasy Springs from FY23 to FY24, could force investors to second guess consensus medium-term expectations.

Mercari – Q1 23 Results Reaction: Strong Domestic Drives OP Beat but Spending to Rise

By Kirk Boodry

  • Domestic results were better than we expected driving operating income to its highest level in six quarters.  Management will launch credit card services to boost fintech exposure
  • The US business remains a drag on results with platform sales down 5% YoY and expanding operating losses. A downgrade to expectations is likely in the quarters ahead
  • Q1 results were better than we expected but a weak US business and higher spending ahead may disappoint markets that bid shares 28% higher over the last month

Los Andes Copper: Insider Buying Continues and PFS in Next 60 Days

By Nicolas Van Broekhoven

  • Los Andes Copper, our preferred copper junior exploration company, will have an updated PFS out in the coming 60 days.
  • Meanwhile, regular insider buying continues by Chief Executive Michael Jones.
  • Los Andes Copper remains key M&A target for larger diversified miners.

Vitasoy (345): Time to Bounce

By Henry Soediarko

  • Vitasoy Intl Holdings (345 HK) was shunned by investors last year as its products were taken off the shelves in China, causing its revenue from China to plummet. 
  • Recently announced a substantial increase in net profit vs last year.  
  • Despite the recent uptick, Vitasoy’s share price is still trading at 50% PBR vs 5 years ago. 

Kino Indonesia (KINO IJ) – Staples with a Discretionary Edge

By Angus Mackintosh

  • Kino Indonesia (KINO IJ) is one of Indonesia’s most interesting staples players with a strong share in a number of segments within beverages and personal care which dominate its sales.
  • The company has seen a decent rebound in its beverages business as mobility has improved but continues to face some headwinds from higher input costs and packaging for personal care. 
  • Kino Indonesia (KINO IJ) has been selectively increasing prices to offset higher costs and is seeing an improvement in sales of some of its more discretionary products. 

Foxconn / Hon Hai: Quick-Take On The Zhengzhou Outbreak; Accumulate on Weakness

By Vincent Fernando, CFA

  • Some workers have been fleeing Hon Hai’s largest iPhone production facility in Zhengzhou, China over the weekend, due to COVID-19 outbreak lock-downs.
  • Even a significant hit to 4Q22E earnings is unlikely to change the 2023E and 2024E financial outlook or valuation multiples for the company, in our view.
  • Even after considering that Q4 is a high production period, if we assume November is about 1/10th of annual production, then only an estimated 2% annual reduction is at risk.

Mitra Keluarga Karyasehat Tbk (MIKA IJ) – Higher Volumes Lower Intensity

By Angus Mackintosh

  • Mitra Keluarga‘s 3Q2022 results reflected the changing environment with patient volumes higher and back above COVID levels but treatment intensity came down YoY in 3Q2022 given last year’s Delta base.
  • MIKA continues to expand its hospital numbers through greenfield and brownfield expansions with three new hospitals due to open in the next 12 months plus it is open to M&A.
  • Mitra Keluarga’s treatment intensity should start to improve over the next few quarters given management’s focus on this plus easier YoY comparisons. Valuations remain attractive versus historical levels. 

Takeda: Thrilling Journey Ahead with a Dengue Vaccine Launch and New Approvals

By Shifara Samsudeen, ACMA, CGMA

  • Takeda Pharmaceutical (4502 JP) reported 2QFY03/2023 results last week. Reported revenue increased 18.6% YoY to JPY1.0trn (vs consensus JPY962bn) while OP increased 7.2% YoY to JPY104.4bn (vs consensus JPY119bn).
  • Growth in sales was driven by Takeda’s blockbuster drug Entyvio (+36.6% YoY), Takhzyro (+75.8%) and immunoglobulin products (HYQVIA in particular).
  • The company also has raised its peak sales estimate for Entyvio to US$7.5-9.0bn (from US$5.5-6.5bn) driven by further market growth and market share expansion.

Asahi Intecc (7747 JP): Stellar Performance in FY22 Likely to Accelerate in FY23

By Tina Banerjee

  • Asahi Intecc (7747 JP) reported better-than-expected FY22 results, driven by overseas sales primarily in Europe and China mainly due to market recovery and a weaker yen versus other major currencies.
  • Asahi has raised FY23 revenue guidance to ¥89.3 billion (+15% y/y) from ¥83.5 billion earlier. However, with weakening yen, another beat is on card.
  • Although Asahi shares have strong upside potential, continued hospital staff shortages in the U.S. and COVID-related restrictions in China are the main downside risks.

Ping An Healthcare and Technology (1833.HK) – The New Acquisition Is Hard to Turn Things Around

By Xinyao (Criss) Wang

  • In 2022H1, Ping An Health’s losses narrowed and gross profit margin increased, with various financial indicators showing an improving trend. The Company also announced a new acquisition recently.
  • In the process of turning from 2C business to 2B business, Ping An Health hopes to expand B-end users who can contribute higher margin, but this transformation would encounter difficulties.
  • If the payment method in China is not changed (still dominated by national medical insurance payment, with small portion of commercial insurance), it’s difficult to improve the profitability qualitatively.

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Nov 01
0

Daily Brief Event-Driven: Toshiba – How Much Risk Is There On A Deal Break? and more

By | Daily Briefs, Event-Driven

In today’s briefing:

  • Toshiba – How Much Risk Is There On A Deal Break?
  • KOSDAQ150 Index Rebalance Preview: Big Churn in IT, Healthcare Stocks
  • End of Mandatory Lock-Up Periods for 54 Companies in Korea in November 2022
  • China VAST’s Vote on 23 November
  • Nitro Attracts a Competing Offer from KKR’s Alludo
  • Chiho (976 HK): Possible Restructuring May Trigger Offer
  • ChiNext/ChiNext50 Index Rebalance Preview: Overlapping Stocks & Mean Reversion
  • Iberdrola/PNM Resources: One to Watch

Toshiba – How Much Risk Is There On A Deal Break?

By Mio Kato

  • With Toshiba giving up its deal premium on news that the JIP consortium was struggling to secure financing it is worth assessing how much downside risk there is. 
  • Prospects are deteriorating rapidly and we believe valuations for Kioxia and the HDD business are likely to lead the way down. 
  • We estimate that there is still a premium of about 20-25% being assessed for the possibility of a deal but that there is fundamental risk beyond this.

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.

End of Mandatory Lock-Up Periods for 54 Companies in Korea in November 2022

By Douglas Kim

  • We discuss end of the mandatory lock-up periods for 54 stocks in Korea in November 2022, among which 2 are in KOSPI and 52 are in KOSDAQ.
  • These 54 stocks on average could be subject to further selling pressures in November and could underperform relative to the market. 
  • Among these 54 stocks, the top 5 market cap stocks include Enchem, Sebit Chem, DearU, Sillajen, and Sampyo Cement. They could be exposed to greater selling pressures in November. 

China VAST’s Vote on 23 November

By Arun George

  • China Vast Industrial Urban Development (6166 HK)‘s scheme document is out with the court meeting scheduled for 23 November. The IFA considers the offer to be fair and reasonable. 
  • Key conditions include approval by at least 75% of independent shareholders (<10% rejection). Shareholders with blocking stakes either provided irrecovables or will likely support the offer.
  • The offer is not great but headcount test is not applicable. At last close and for the 14 December payment, the gross and annualised spread is 0.8% and 6.7%, respectively.

Nitro Attracts a Competing Offer from KKR’s Alludo

By Arun George

  • Nitro Software Ltd (NTO AU) has received a competing proposal from Alludo. The offer is A$2.00 via a scheme or an off-market takeover at A$2.00, with a 50.1% minimum acceptance condition.
  • Unsurprisingly, the Board rejected Potentia’s A$1.80 per share off-market takeover offer. Potentia has three options – lift its offer, do nothing or sell into Alludo’s offer. 
  • While Alludo’s offer is 11.1% above Potentia’s offer, it is far from a knockout bid. Therefore, there is a good chance that Potentia returns with improved terms.

Chiho (976 HK): Possible Restructuring May Trigger Offer

By David Blennerhassett

  • Metal recycler Chiho Environmental Group Limited (976 HK) was suspended this morning pursuant to Hong Kong’s Takeovers Code. 
  • For more than a year, the controlling shareholder group has been implementing a potential restructuring. The ultimate controlling shareholder is Tu Jianhua, an executive director of Chiho.
  • This long drawn-out reorganisation may finally result in an Offer for Chiho.

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.

Iberdrola/PNM Resources: One to Watch

By Jesus Rodriguez Aguilar

  • Iberdrola SA has not abandoned its strategic plan in the United States, which includes the acquisition of PNM Resources through its American subsidiary Avangrid Inc.
  • Iberdrola is convinced that the transaction will be unblocked in the coming weeks, either because the appeal prospers or because of changes in the regulator.
  • I retain my TP of $50.3 cash takeout price (consideration offered by Avangrid/Iberdrola) vs. my $49.8/share median implied valuation. My TP represents 8.5% upside plus a 2.9% dividend yield.

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Nov 01
0

Daily Brief Macro: A Sharp Likely Decline in Total Return (TR) ETFs in Korea Due to an Amendment in Regulations and more

By | Daily Briefs, Macro

In today’s briefing:

  • A Sharp Likely Decline in Total Return (TR) ETFs in Korea Due to an Amendment in Regulations
  • The Week That Was in ASEAN@Smartkarma – BFI Finance Indonesia, Ultrajaya Milk, and Thai Banks
  • EA: Flash, Bang, Inflation Fanned
  • The Commodity Report #75
  • CX Daily: Illuminating The Silver Screen For The Visually Impaired

A Sharp Likely Decline in Total Return (TR) ETFs in Korea Due to an Amendment in Regulations

By Douglas Kim

  • Chosun Business Daily reported that TR ETFs worth nearly 7 trillion won in Korea is in danger of losing demand from institutional investors due to an amendment to financial regulations.
  • The change in the regulations of not allowing reinvestment of dividends but requiring annual distribution of dividends will discourage many institutional investors from investing in TR ETFs in Korea.
  • The two biggest advantages of a total return ETF in Korea has been the automatic reinvestment of dividend distributions and tax deferral.

The Week That Was in ASEAN@Smartkarma – BFI Finance Indonesia, Ultrajaya Milk, and Thai Banks

By Angus Mackintosh

EA: Flash, Bang, Inflation Fanned

By Phil Rush

  • Flash EA inflation rose with another bang in Oct-22 as it flew up by 0.7pp to 10.7%. That was near our well-above consensus forecast after volatile news in national releases.
  • A 1pp trouncing of the earlier monthly consensus means the consistent upwards forecast drift is not abating. The trend rise might yet extend for another couple of months.
  • If the forecast drift continues in November, the ECB will probably deliver another 75bps hike in December rather than slow to our current 50bps call.

The Commodity Report #75

By The Commodity Report

  • With the beginning of this week’s newsletter, I probably won’t make any new friends in my home country.
  • What makes me sad is that literally nobody is speaking about the untapped natural gas reserves we have underground in Germany that are indeed accessible.
  • A short calculation: In 2021 Russia delivered 55 billion cubic meters to Germany or 55% of the total German gas consumption.

CX Daily: Illuminating The Silver Screen For The Visually Impaired

By Caixin Global

  • Film / In Depth: Illuminating the silver screen for the visually impaired

  • Personnel / Beijing Mayor Chen Jining appointed Shanghai Party boss

  • Corruption / Graft crackdown at China’s biggest policy lender snares another official

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Nov 01
0

Daily Brief Crypto: Quick Update on the New Hong Kong Crypto Policy Statement – A Revival of the Crypto Hub? and more

By | Crypto, Daily Briefs

In today’s briefing:

  • Quick Update on the New Hong Kong Crypto Policy Statement – A Revival of the Crypto Hub?
  • Crypto Outperforms Tech Stocks
  • Sporting Crypto – October 31st 2022: FIFA Partner with Altered State Machine

Quick Update on the New Hong Kong Crypto Policy Statement – A Revival of the Crypto Hub?

By Edward Wu

  • Hong Kong government published on Oct 31 a statement titled “Policy Statement on Development of Virtual Assets in Hong Kong” with a much friendlier stance on crypto industry
  • The policy statement mainly focuses on crypto asset ETF, NFT, tokenized assets, stablecoin, and e-HKD; while utility tokens are missing from it.
  • While this has been perceived positively by the industry, the biggest concern is still the regulatory uncertainty, especially considering mainland China’s outright ban on all crypto-related activity

Crypto Outperforms Tech Stocks

By Kaiko

  • Price Movements: Crypto markets are soaring, led by the memecoin DOGE, which is up +100% in a week. 
  • Market Liquidity: High volatility caused bid-ask spreads to spike across ETH markets, which rippled throughout altcoin markets.
  • Derivatives: BitMEX, once the largest derivatives exchange, has experienced a sharp drop in perpetual futures volumes over the past two years. 

Sporting Crypto – October 31st 2022: FIFA Partner with Altered State Machine

By Sporting Crypto

  • FIFA, who recently launched FIFA+ Collect, have stepped up their Web3 game with yet another partnership.
  • This one is a bit more niche and complex. Equally, it’s potentially more interesting than the more generic highlight reel based moments that FIFA dropped a couple of weeks ago.
  • Basically, this is an NFT, that uses AI to train itself to interact with a number of different digital environments in several different ways.

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Nov 01
0

Most Read: Sichuan Tianyi Science & A, Toshiba Corp, Nextin, Amorepacific Group, Arch Capital, Nitro Software Ltd, HPSP, SillaJen Inc, China Vast Industrial Urban Development, Chiho Environmental Group Limited and more

By | Daily Briefs, Most Read

In today’s briefing:

  • CSI500 Index Rebalance Preview: 50 Adds/Deletes in December
  • Toshiba – How Much Risk Is There On A Deal Break?
  • KOSDAQ150 Ad Hoc Index Rebalance: LX Semicon OUT, Nextin IN
  • MSCI Korea IR: Market Cap Cutoff, NOC, & Constituent Changes
  • Ad Hoc S&P500 Change on Twitter Deletion
  • Nitro Software Rejects Potentia, Again, And Engages With KKR
  • KOSDAQ150 Index Rebalance Preview: Big Churn in IT, Healthcare Stocks
  • End of Mandatory Lock-Up Periods for 54 Companies in Korea in November 2022
  • China VAST’s Vote on 23 November
  • Chiho (976 HK): Possible Restructuring May Trigger Offer

CSI500 Index Rebalance Preview: 50 Adds/Deletes in December

By Brian Freitas

  • With a day left in the review period, we forecast 50 changes (the maximum permitted) for the CSI500 Index at the close on 9 December.
  • We estimate a one-way turnover of 13.53% at the December rebalance leading to a one-way trade of CNY 8.01bn. The Materials, Consumer Discretionary and Information Technology sectors are net gainers.
  • The potential adds and potential deletes have performed in line over the last few weeks, and we’d look to position for outperformance post the end of the review period.

Toshiba – How Much Risk Is There On A Deal Break?

By Mio Kato

  • With Toshiba giving up its deal premium on news that the JIP consortium was struggling to secure financing it is worth assessing how much downside risk there is. 
  • Prospects are deteriorating rapidly and we believe valuations for Kioxia and the HDD business are likely to lead the way down. 
  • We estimate that there is still a premium of about 20-25% being assessed for the possibility of a deal but that there is fundamental risk beyond this.

KOSDAQ150 Ad Hoc Index Rebalance: LX Semicon OUT, Nextin IN

By Brian Freitas

MSCI Korea IR: Market Cap Cutoff, NOC, & Constituent Changes

By Sanghyun Park

  • The NOC of MSCI Korea Standard is 111, and the market cap of the 111th-ranked company is ₩2.44T on Day 1 and ₩2.40T on Day 2.
  • In addition to Hyundai Mipo, Ecopro passed the screening. On the other hand, only Meritz Securities and CJ ENM managed to stay inside the safe zone among the deletion candidates.
  • The recently increased price fluctuations likely resulted in delaying the entry timing of flow trading. So, we should set the expected return of our basket trade a bit more aggressively.

Ad Hoc S&P500 Change on Twitter Deletion

By Travis Lundy

  • S&P DJI announced late 27 October 2022 that Twitter Inc (TWTR US) would be deleted from the S&P500, replaced by Arch Capital (ACGL US). 
  • RXO would be added to the MidCap400 while Bread Financial Holdings (BFH) would move from MidCap400 to SmallCap600 and Unifi Inc (UFI US) would get deleted from the 600.
  • This insight presents the issues and the flows, which are not to be separated. 

Nitro Software Rejects Potentia, Again, And Engages With KKR

By David Blennerhassett

  • On the 28 October, Potentia announced an improved (and final) off-market Offer of A$1.80/share for Nitro (NTO AU), a 13.9% improvement over its initial proposal on the 30 August. 
  • Nitro has now concluded the Potentia Takeover Bid undervalues Nitro. The Offer, however, is still proceeding, and will open in two weeks.
  • Separately, KKR’s Alludo has pitched a non-binding – subject to due diligence – Offer by way of  a Scheme (or off-market takeover) at A$2.00/share. Nitro is supportive of this Offer.

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.

End of Mandatory Lock-Up Periods for 54 Companies in Korea in November 2022

By Douglas Kim

  • We discuss end of the mandatory lock-up periods for 54 stocks in Korea in November 2022, among which 2 are in KOSPI and 52 are in KOSDAQ.
  • These 54 stocks on average could be subject to further selling pressures in November and could underperform relative to the market. 
  • Among these 54 stocks, the top 5 market cap stocks include Enchem, Sebit Chem, DearU, Sillajen, and Sampyo Cement. They could be exposed to greater selling pressures in November. 

China VAST’s Vote on 23 November

By Arun George

  • China Vast Industrial Urban Development (6166 HK)‘s scheme document is out with the court meeting scheduled for 23 November. The IFA considers the offer to be fair and reasonable. 
  • Key conditions include approval by at least 75% of independent shareholders (<10% rejection). Shareholders with blocking stakes either provided irrecovables or will likely support the offer.
  • The offer is not great but headcount test is not applicable. At last close and for the 14 December payment, the gross and annualised spread is 0.8% and 6.7%, respectively.

Chiho (976 HK): Possible Restructuring May Trigger Offer

By David Blennerhassett

  • Metal recycler Chiho Environmental Group Limited (976 HK) was suspended this morning pursuant to Hong Kong’s Takeovers Code. 
  • For more than a year, the controlling shareholder group has been implementing a potential restructuring. The ultimate controlling shareholder is Tu Jianhua, an executive director of Chiho.
  • This long drawn-out reorganisation may finally result in an Offer for Chiho.

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Oct 31
0

Daily Brief South Korea: LX Semicon, Amorepacific Group and more

By | Daily Briefs, South Korea

In today’s briefing:

  • LX Semicon KOSPI Migration & KOSDAQ 150 Special Change
  • MSCI Korea IR: Market Cap Cutoff, NOC, & Constituent Changes

LX Semicon KOSPI Migration & KOSDAQ 150 Special Change

By Sanghyun Park

  • LX Semicon (108320 KS) will be traded on KOSPI from November 3rd. This event has no trade suspension. So, it will be traded on KOSDAQ until November 2nd.
  • Nextin (348210 KS) will replace LX Semicon for KOSDAQ 150. Again, the effective date is November 3rd. So, the index trackers will rebalance-trade at the close on November 2nd.
  • LX Semicon will see an outflow of -1.91x ADTV, whereas Nextin will enjoy an inflow of 3.93x ADTV. This Special Change will likely save AptaBio Therapeutics (293780 KS) from deletion.

MSCI Korea IR: Market Cap Cutoff, NOC, & Constituent Changes

By Sanghyun Park

  • The NOC of MSCI Korea Standard is 111, and the market cap of the 111th-ranked company is ₩2.44T on Day 1 and ₩2.40T on Day 2.
  • In addition to Hyundai Mipo, Ecopro passed the screening. On the other hand, only Meritz Securities and CJ ENM managed to stay inside the safe zone among the deletion candidates.
  • The recently increased price fluctuations likely resulted in delaying the entry timing of flow trading. So, we should set the expected return of our basket trade a bit more aggressively.

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Oct 31
0

Daily Brief India: Vedanta Resources and more

By | Daily Briefs, India

In today’s briefing:

  • Morning Views Asia: Vedanta Resources, Yankuang Energy Group

Morning Views Asia: Vedanta Resources, Yankuang Energy Group

By Charles Macgregor

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

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

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