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Smartkarma Daily Briefs

Oct 29
0

Daily Brief Japan: SBI Holdings, Fanuc Corp, Softbank Group, Tokyo Stock Exchange Tokyo Price Index Topix and more

By | Daily Briefs, Japan

In today’s briefing:

  • JPX-Nikkei 400 Rebal 2023: End-Oct 2022
  • Japan Weekly | Ibiden, Fanuc, Canon
  • Softbank Group (9984 JP) – Defying Gravity into 4Q 2022
  • Hostile Takeovers Should Be Well Thought Out on Fair Basis, Both in Boardroom and in Judicial Arena

JPX-Nikkei 400 Rebal 2023: End-Oct 2022

By Janaghan Jeyakumar, CFA

  • JPX-Nikkei 400 is composed of common stocks listed on the Tokyo Stock Exchange. It is a free-float-adjusted market-value-weighted (capped) index composed of 400 constituents.
  • A periodic review is conducted by the Index providers, the JPX Group and Nikkei Inc, in August every year. We look at the potential forward inclusions and removals every month.
  • Below is a look at potential Inclusions and Removals for the JPX-Nikkei 400 Rebalance to come in August 2023 based on trading data as of end-October 2022.

Japan Weekly | Ibiden, Fanuc, Canon

By Mark Chadwick

  • NKY +0.80%WoW;  TOPIX +0.91%WoW;  TSE Mothers +3.0%WoW.  3 days up; 2 days down this week as small caps; high valuation and tech stocks rallied
  • PM Kishida orders additional fiscal stimulus of ¥29.1 trillion.  Including other private sector investment and funding, the total stimulus size to exceed ¥71 trillion.
  • Bank of Japan maintains their ultra looks monetary policy in place at the end of their 2-day policy meeting

Softbank Group (9984 JP) – Defying Gravity into 4Q 2022

By Victor Galliano

  • Softbank Group’s share price has been supported by the share buyback programme since late September, but 2Q FY2022 results are likely act as a negative catalyst for Softbank shares
  • Alibaba and its core listed holdings in the Vision Funds have seen market values go lower in recent months; see the diverging market price chart trends in this report
  • In addition, valuations among the unlisted holdings are also under pressure into October, so 2Q results may not capture the full extent of the down rounds

Hostile Takeovers Should Be Well Thought Out on Fair Basis, Both in Boardroom and in Judicial Arena

By Aki Matsumoto

  • Since hostile takeovers are one of the key strategies to quickly gain market share in domestic market with limited growth, more hostile takeovers are expected to occur in the future.
  • Only 12.1% of prime market companies have majority of independent directors. This raises concerns about whether the opinions of independent directors in minority position will be heard by the boards.
  • The court’s decision to dismiss the claims of companies that proposed hostile takeovers makes us think about whether hostile takeovers are being considered on fair standpoint, even in judicial arena.

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Oct 29
0

Daily Brief Quantitative Analysis: Hong Kong Buybacks Weekly (Oct 28th): Aia and more

By | Daily Briefs, Quantitative Analysis

In today’s briefing:

  • Hong Kong Buybacks Weekly (Oct 28th): Aia, Great Wall Motor, Wuxi Biologics

Hong Kong Buybacks Weekly (Oct 28th): Aia, Great Wall Motor, Wuxi Biologics

By Ke Yan, CFA, FRM

  • We analyze statistics on top repurchases over one week, one month, one quarter and one year periods ended on Oct 28th based on HKEx daily reports.
  • In the past 7 days, the top 3 companies that repurchased the most shares from the market were Aia (1299 HK), Great Wall Motor (2333 HK), Wuxi Biologics (2269 HK).
  • In the past 30 days, the top 3 companies that repurchased the most shares from the market were Tencent (700 HK), Aia (1299 HK), Wuxi Biologics (2269 HK).

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Oct 29
0

Daily Brief ESG: Hostile Takeovers Should Be Well Thought Out on Fair Basis and more

By | Daily Briefs, ESG

In today’s briefing:

  • Hostile Takeovers Should Be Well Thought Out on Fair Basis, Both in Boardroom and in Judicial Arena

Hostile Takeovers Should Be Well Thought Out on Fair Basis, Both in Boardroom and in Judicial Arena

By Aki Matsumoto

  • Since hostile takeovers are one of the key strategies to quickly gain market share in domestic market with limited growth, more hostile takeovers are expected to occur in the future.
  • Only 12.1% of prime market companies have majority of independent directors. This raises concerns about whether the opinions of independent directors in minority position will be heard by the boards.
  • The court’s decision to dismiss the claims of companies that proposed hostile takeovers makes us think about whether hostile takeovers are being considered on fair standpoint, even in judicial arena.

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Oct 29
0

Daily Brief Technical Analysis: Bear Market Rally in Progress as DXY and more

By | Daily Briefs, Technical Analysis

In today’s briefing:

  • Bear Market Rally in Progress as DXY, Global Sovereign 10-Yr Yields Fall; Buy Ideas Within Leaders

Bear Market Rally in Progress as DXY, Global Sovereign 10-Yr Yields Fall; Buy Ideas Within Leaders

By Joe Jasper

  • We continue to believe that a bearish intermediate-term outlook is appropriate as long as the YTD downtrends remain intact on MSCI ACWI (ACWI-US), MSCI ACWI ex-US (ACWX-US), and EAFE (EFA-US).
  • We would turn bullish only on reversals of those downtrends. With that said, a bear market rally has officially begun, something that we have discussed since our Sept.29 Int’l Compass
  • We expect to see rallies to their respective YTD downtrends (ACWX, EFA, etc.). We highlight buys that are likely to outperform on this bear market rally.

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Oct 29
0

Daily Brief ECM: Lygend Resources & Technology Pre-IPO – Resting Its Hopes and Dreams on a JV with a Singular Partner and more

By | Daily Briefs, ECM

In today’s briefing:

  • Lygend Resources & Technology Pre-IPO – Resting Its Hopes and Dreams on a JV with a Singular Partner
  • Atour Lifestyle Holdings IPO Analysis
  • Novartis ADR: Initiation of Coverage – Latest Focus Areas & Key Drivers
  • BlackBerry Ltd: Major Drivers

Lygend Resources & Technology Pre-IPO – Resting Its Hopes and Dreams on a JV with a Singular Partner

By Clarence Chu

  • Lygend Resources & Technology (LR HK) is looking to raise about US$800m in its Hong Kong IPO.
  • Lygend Resources & Technology (Lygend) is a nickel trading and production firm with a portfolio covering multiple areas across the nickel industry value chain.
  • With the Obi Project expanding the firm’s capacity into the higher margin production segment, Lygend expects sales and profitability to pick up. 

Atour Lifestyle Holdings IPO Analysis

By Douglas Kim

  • Atour Lifestyle Holdings (ATAT US) is a leading upper midscale hotel chain group in China is getting ready for an IPO in the US.
  • We believe that a valuation range of RMB12.8 billion ($1.8 billion) to RMB16.9 billion ($2.3 billion) is appropriate for Atour Lifestyle Holdings. 
  • Unless the IPO is priced sufficiently lower than the intrinsic value of the company, many institutional investors will likely pass on the IPO given the Bearish market sentiment.

Novartis ADR: Initiation of Coverage – Latest Focus Areas & Key Drivers

By Baptista Research

  • This is our first report global pharma major, Novartis.
  • The company delivered a mixed set of results for the last quarter, failing to meet Wall Street expectations in terms of revenues but managing an earnings beat.
  • The innovative medicine sales grew consistently in the quarter across the U.S.

BlackBerry Ltd: Major Drivers

By Baptista Research

  • BlackBerry had a mediocre quarterly, beating profitability estimates of Wall Street while delivering revenue aligned with forecasts.
  • The best performer continues to be QNX design base revenue.
  • Royalty revenue increased on the production side, but it is still below pre-pandemic levels, mostly because of supply chain challenges.

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Oct 29
0

Daily Brief Credit: Weekly Wrap – 28 Oct 2022 and more

By | Credit, Daily Briefs

In today’s briefing:

  • Weekly Wrap – 28 Oct 2022

Weekly Wrap – 28 Oct 2022

By Charles Macgregor

Lucror Analytics Weekly Wraps provide an overview of all Morning Views comments and reports published by our analyst team in the past week, and also showcase a list of the most-read reports.

In this Insight:

  1. Lippo Karawaci
  2. Seazen (Formerly Future Land)
  3. JSW Steel Ltd
  4. China Jinmao Holdings
  5. Guangzhou R&F Properties

and more…

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Oct 29
0

Daily Brief Thematic (Sector/Industry): How Bad Is Today’s Chip Collapse? and more

By | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

  • How Bad Is Today’s Chip Collapse?

How Bad Is Today’s Chip Collapse?

By Jim Handy

  • Semiconductor collapses like today’s are led by memory chips, which are a commodity
  • The leading memory manufacturers: Samsung, SK hynix, Micron, and WDC, have announced their 3Q22 earnings, with only Kioxia remaining.  All have suffered substantial revenue declines.
  • Memory prices are dropping to cost, and should remain at cost until demand catches back up with supply in late 2023

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Oct 29
0

Daily Brief Event-Driven: JPX-Nikkei 400 Rebal 2023: End-Oct 2022 and more

By | Daily Briefs, Event-Driven

In today’s briefing:

  • JPX-Nikkei 400 Rebal 2023: End-Oct 2022
  • Shanghai/​​​​​​​​​​​​​​​​​​Shenzhen Southbound Connect: Weekly Moves (28 October 2022)
  • Shanghai/​​​​​​​​​​​​​​​​​​Shenzhen Northbound Connect: Weekly Moves (28 October 2022)
  • Softbank Group (9984 JP) – Defying Gravity into 4Q 2022

JPX-Nikkei 400 Rebal 2023: End-Oct 2022

By Janaghan Jeyakumar, CFA

  • JPX-Nikkei 400 is composed of common stocks listed on the Tokyo Stock Exchange. It is a free-float-adjusted market-value-weighted (capped) index composed of 400 constituents.
  • A periodic review is conducted by the Index providers, the JPX Group and Nikkei Inc, in August every year. We look at the potential forward inclusions and removals every month.
  • Below is a look at potential Inclusions and Removals for the JPX-Nikkei 400 Rebalance to come in August 2023 based on trading data as of end-October 2022.

Shanghai/​​​​​​​​​​​​​​​​​​Shenzhen Southbound Connect: Weekly Moves (28 October 2022)

By David Blennerhassett

Shanghai/​​​​​​​​​​​​​​​​​​Shenzhen Northbound Connect: Weekly Moves (28 October 2022)

By David Blennerhassett

Softbank Group (9984 JP) – Defying Gravity into 4Q 2022

By Victor Galliano

  • Softbank Group’s share price has been supported by the share buyback programme since late September, but 2Q FY2022 results are likely act as a negative catalyst for Softbank shares
  • Alibaba and its core listed holdings in the Vision Funds have seen market values go lower in recent months; see the diverging market price chart trends in this report
  • In addition, valuations among the unlisted holdings are also under pressure into October, so 2Q results may not capture the full extent of the down rounds

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Oct 29
0

Daily Brief Macro: CX Daily: Indonesian Sovereign Wealth Fund’s Blueprint for Growth and more

By | Daily Briefs, Macro

In today’s briefing:

  • CX Daily: Indonesian Sovereign Wealth Fund’s Blueprint for Growth

CX Daily: Indonesian Sovereign Wealth Fund’s Blueprint for Growth

By Caixin Global

  • In Depth: Indonesian sovereign wealth fund’s blueprint for growth 

  • Shanghai plans to build $221 million permanent quarantine center on island

  • Communist Party appoints new head of publicity department

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Oct 29
0

Daily Brief Equity Bottom-Up: Japan Weekly | Ibiden and more

By | Daily Briefs, Equity Bottom-Up

In today’s briefing:

  • Japan Weekly | Ibiden, Fanuc, Canon
  • September Brazil Bank Data Charts – Arrears Imply Better NPLs Trends to Come; Have Spreads Peaked?
  • Vertex Pharmaceuticals (VRTX US): Better-Than-Expected Q3 Result; Guidance Raised 2nd Time This Year
  • Intel 3Q22: Still Too Optimistic
  • Micron Technology: The New York Mega Fab & Other Drivers
  • Rio Tinto ADR: Initiation of Coverage – Business Strategy
  • Nike Inc: The Connected Partnership & Other Drivers

Japan Weekly | Ibiden, Fanuc, Canon

By Mark Chadwick

  • NKY +0.80%WoW;  TOPIX +0.91%WoW;  TSE Mothers +3.0%WoW.  3 days up; 2 days down this week as small caps; high valuation and tech stocks rallied
  • PM Kishida orders additional fiscal stimulus of ¥29.1 trillion.  Including other private sector investment and funding, the total stimulus size to exceed ¥71 trillion.
  • Bank of Japan maintains their ultra looks monetary policy in place at the end of their 2-day policy meeting

September Brazil Bank Data Charts – Arrears Imply Better NPLs Trends to Come; Have Spreads Peaked?

By Victor Galliano

  • In September, we highlight that data on credit in arrears (15-90 days overdue) showed MoM improvements in all our measures; this implies a positive leading indicator for NPLs
  • System loan growth was +16.8% for the twelve months to September, a slight acceleration from the August YoY rate (+16.7%), due largely to faster corporate loan growth
  • New credit spreads appear to have peaked, even if spreads on average loans are set to remain elevated; we favour Banco do Brasil, for good credit quality and attractive valuations

Vertex Pharmaceuticals (VRTX US): Better-Than-Expected Q3 Result; Guidance Raised 2nd Time This Year

By Tina Banerjee

  • Vertex Pharmaceuticals (VRTX US) reported 18% y/y revenue growth to $2.3 billion, led by 46% growth outside the U.S. on continued strong uptake of Trikafta. U.S. revenue grew 5% y/y.
  • The company raised full-year 2022 product revenue guidance by 2% at the mid-point to $8.8–8.9 billion, representing 17% y/y growth at the mid-point.
  • The company will submit biologics licensing application (BLA) for exa-cel to the FDA, beginning in November 2022 and expects to complete the submission by the end of Q1 2023.

Intel 3Q22: Still Too Optimistic

By Aaron Gabin

  • Intel put forth a significant cost cutting program to generate $3B in savings in 2023 and $8-10B by 2025.
  • CEO Gelsinger’s PC forecasting track record is horrendous, we wouldn’t bet on a down MSD 2023 market.
  • Datacenter…which once carried near 60% margins hit breakeven this quarter… an astonishing fall.

Micron Technology: The New York Mega Fab & Other Drivers

By Baptista Research

  • Micron delivered a mixed set of results for the previous quarter, missing out on the revenue expectations of Wall Street but managing an earnings beat.
  • As a result, demand is being reduced for the other parts of the supply chain, which already have more than enough inventory, because the servers cannot be built.
  • Therefore, although the overall demand for clouds is generally healthy, this is one factor that is having an impact on it.

Rio Tinto ADR: Initiation of Coverage – Business Strategy

By Baptista Research

  • This is our first report on global metals and mining giant, Rio Tinto.
  • The company has been witnessing a decent demand for all of its primary commodities as per recent results.
  • Moreover, the Rio Tinto Safe Production System is still being effectively implemented, and there are now 15 deployments at 11 sites, up from 5 sites at the beginning of the year.

Nike Inc: The Connected Partnership & Other Drivers

By Baptista Research

  • Nike successfully delivered yet another all-around beat in the first quarter of the new fiscal with its key brands, Nike, Jordan, and Converse continue to enjoy strong consumer affinity and demand.
  • For the quarter, their revenue grew by double-digits and the company generated the highest net revenue quarter ever for Nike Digital.
  • Customers are still supporting Nike Digital, as evidenced by the Nike commerce app’s record-breaking Q1 traffic.

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