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Smartkarma Daily Briefs

Oct 23
0

Daily Brief Crypto: Quant Network and more

By | Crypto, Daily Briefs

In today’s briefing:

  • Quant Network

Quant Network

By Etherbridge

  • Over the last few weeks, we have covered the topic of interoperability, and the different approaches projects have taken to solve the problem.
  • The first approach was on-chain with Polkadot and Cosmos, and last week, we covered how open-source projects like Chainlink are doing it without a blockchain. 
  • This week we will cover the Quant Network, a closed-source project that focuses on creating interoperability between enterprise chains, governments, regulatory bodies and specific open blockchains. 

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Oct 23
0

Daily Brief Macro: Global Fallout from Strong Dollar Spreads and more

By | Daily Briefs, Macro

In today’s briefing:

  • Global Fallout from Strong Dollar Spreads, but the Fed Does Not Care

Global Fallout from Strong Dollar Spreads, but the Fed Does Not Care

By Said Desaque

  • Strong safe-haven demand for dollars is contributing to currency strength, as well as the Fed’s domestically-focused policy stance. Previous dollar bull markets have enjoyed considerable longevity, thereby suggesting further appreciation.
  • Further interest rate increases by the Fed will accelerate capital outflows from the Asia Pacific region. While large-scale devaluations are unlikely, Asian corporations with dollar-denominated debt face higher financial stress.  
  • High imported energy and food prices have boosted European inflation. The weak euro has tightened European financial conditions due to the rise in dollar-denominated liabilities at banks and corporations. 

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Oct 23
0

Daily Brief Equity Bottom-Up: Ciputra Development (CTRA IJ) – The Cosmopolitan Developer and more

By | Daily Briefs, Equity Bottom-Up

In today’s briefing:

  • Ciputra Development (CTRA IJ) – The Cosmopolitan Developer
  • FDR’s Trade Embargo on Oil (Japan) & Biden’s Sanctions on China’s Semi Sector – Prelude to Disaster?
  • Carnival Corp: New Cruise Ship Additions & Other Drivers
  • Akamai Technologies: Malware Protection For APIs and Apps
  • Banorte (GFNORTEO MX) – No Longer Bidding for Banamex, but Tougher Fundamental Hurdles into 2023
  • CarMax Inc: Major Drivers
  • Philip Morris International: Expansion In The Philippines
  • Phillips 66: Potential Acquisition of DCP Midstream & Other Drivers
  • PolyNovo Ltd (PNV AU): Shares Are Rallying Fueled by Strong US Sales and New Product Approval
  • Walgreens Boots Alliance: The CareCentrix Acquisition & Other Drivers

Ciputra Development (CTRA IJ) – The Cosmopolitan Developer

By Angus Mackintosh

  • Ciputra Development (CTRA IJ) is Indonesia’s most geographically diversified and land bank-rich property developers, and also the pioneer of joint operating schemes that have allowed for faster expansion.
  • The company reported a solid set of 1H2022 results with strong 9M2022 marketing sales pointing towards higher growth ahead, with guidance already revised upwards. 
  • Ciputra Development is a core proxy for the ongoing residential market recovery in Indonesia and valuations are significantly below the 5-year average on both PBV and PER.

FDR’s Trade Embargo on Oil (Japan) & Biden’s Sanctions on China’s Semi Sector – Prelude to Disaster?

By Douglas Kim

  • In the past couple of weeks, there have been tremendous sanctions by the US government on China’s semiconductor sector. 
  • In this insight, we compare this move to the US government putting a trade embargo on oil against Japan nearly 81 years ago.
  • If there are severe disruptions to the semiconductor market in China, this will likely to have negative impact on the two Korean semi giants Samsung Electronics and SK Hynix.  

Carnival Corp: New Cruise Ship Additions & Other Drivers

By Baptista Research

  • Carnival Corp has continued its string of disappointing results and the company failed to meet Wall Street expectations in terms of revenues as well as earnings in the last quarter as well.
  • Given the resumption of the guest cruise operations, the company saw its adjusted EBITDA being positive for the first time.
  • The revenue of the last quarter increased by around 80% in comparison to the previous quarter.

Akamai Technologies: Malware Protection For APIs and Apps

By Baptista Research

  • After a steady correction over the past few months, Akamai’s stock has been appreciating steadily with its results being a few days away.
  • Akamai has been leveraging its financial strength to make substantial investments in cloud computing and financial strength.
  • The company’s security portfolio of zero trust enterprise has been performing well with several significant customer wins.

Banorte (GFNORTEO MX) – No Longer Bidding for Banamex, but Tougher Fundamental Hurdles into 2023

By Victor Galliano

  • Banorte pulls out of the Banamex bidding, leaving two Mexican groups as potential bidders; this now removes the risk of a capital raise for Banorte and a potential dividend cut
  • Banorte delivered a strong set of 3Q22 results, yet we believe that its returns could be close to peaking and that we expect a profitability downturn in 2023
  • The withdrawal from the Banamex bidding is shareholder positive, but we see that current valuations do not reflect 2023 risks, especially from higher cost of risk and squeezed credit spreads

CarMax Inc: Major Drivers

By Baptista Research

  • CarMax’s stock has been on a downward trajectory since the last quarterly result which had been a major disappointment.
  • In response to consumer demand and the current environment, CarMax continued to offer a higher mix of lower-priced vehicles.
  • We provide the stock of CarMax a ‘Hold’ rating with a revision in the target price.

Philip Morris International: Expansion In The Philippines

By Baptista Research

  • Philip Morris continued to demonstrate a strong underlying momentum with positive volume that supported a better than expected top-line growth in the last quarter.
  • The company delivered yet another all-around beat as net revenues of pro forma grew organically, which reflects continued strong growth in IQOS as well as the ongoing recovery of combustible business in various markets.
  • Strong quarter pro forma user growth and continued excellent IQOS performance were very impressive.

Phillips 66: Potential Acquisition of DCP Midstream & Other Drivers

By Baptista Research

  • With the results of Phillips 66 around the corner, the stock price has been appreciating over the past few weeks.
  • Among major updates, Phillips 66 has offered to acquire the public units of DCP Midstream, the natural gas company, to boost its business of natural gas liquids.
  • We provide the stock of Phillips 66 a ‘Hold’ rating and a revision in the target price.

PolyNovo Ltd (PNV AU): Shares Are Rallying Fueled by Strong US Sales and New Product Approval

By Tina Banerjee

  • PolyNovo Ltd (PNV AU) reported 73% y/y revenue growth to A$12.5M in Q1FY23, driven by the U.S. The company reported record high monthly sales of A$5.4M in September 2022.
  • The company is aggressively expanding team and the increased headcount is having the desired impact on sales growth and loss continues to be minimized compared to business expansion.
  • PolyNovo received FDA clearance for NovoSorb MTX, which expands PolyNovo’s U.S. addressable market by ~A$500M. The company plans to launch SynPath in the U.S. in 2023 (addressable market ~$400M).

Walgreens Boots Alliance: The CareCentrix Acquisition & Other Drivers

By Baptista Research

  • Walgreens’ stock had a disappointing performance during the course of the year but there as been some recovery after a decent result.
  • In the quarter pharmacy performance benefitted from the improved trends from maintenance medications and seasonal scripts.
  • We provide the stock of Walgreens with a ‘Hold’ rating and a revision in the target price.dditional workstreams for its consumer-facing digital assistant.

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Oct 22
0

Daily Brief Industrials: Textron Inc and more

By | Daily Briefs, Industrials

In today’s briefing:

  • Textron Inc: New Product Launches & Other Developments

Textron Inc: New Product Launches & Other Developments

By Baptista Research

  • Textron has its results just around the corner and there is a good chance that the company may deliver an all-around beat.
  • It had a solid previous quarter with strong execution and higher revenues that resulted in segment profit margin.
  • On the innovation front, Textron delivered the foremost Cessna SkyCourier to its launch customer FedEx and the foremost XLS Gen2 aircraft.

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Oct 22
0

Daily Brief Industrials: Textron Inc and more

By | Daily Briefs, Industrials

In today’s briefing:

  • Textron Inc: New Product Launches & Other Developments

Textron Inc: New Product Launches & Other Developments

By Baptista Research

  • Textron has its results just around the corner and there is a good chance that the company may deliver an all-around beat.
  • It had a solid previous quarter with strong execution and higher revenues that resulted in segment profit margin.
  • On the innovation front, Textron delivered the foremost Cessna SkyCourier to its launch customer FedEx and the foremost XLS Gen2 aircraft.

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Oct 22
0

Daily Brief Energy/Materials: OZ Minerals Ltd, Medco Energi, Cleveland-Cliffs Inc and more

By | Daily Briefs, Energy & Materials Sector

In today’s briefing:

  • OZ Minerals – Circumstances May Merit a Revised Tilt
  • Medco Energi – Event Flash – Tender Offer For Up To USD 250 Mn Of Bonds – Lucror Analytics
  • Cleveland-Cliffs Inc: Labor Agreement & Other Developments

OZ Minerals – Circumstances May Merit a Revised Tilt

By Travis Lundy

  • Copper is widely recognised to be in somewhat short supply, and EV/electrification would increase demand going forward (though slower Chinese homebuilding would soften it).
  • A number of developments suggest a further squeeze in prices could be near and copper price strength along with AUD weakness makes an AUD-denominated OZL Takeover Price easier to raise.
  • Short-Term positioning and longer-term supply constraints are currently battling for near-term import, but medium-term, there’s no escaping the imbalance. Looks like a buy now.

Medco Energi – Event Flash – Tender Offer For Up To USD 250 Mn Of Bonds – Lucror Analytics

By Leonard Law, CFA

Medco Energi has launched a cash tender offer for up to USD 250 mn of three USD bonds. If the tender is successful, we expect gross debt to be reduced by USD 100 mn, the debt maturity profile to be lengthened and interest expense to decline. Tendering the bonds would make sense if noteholders require liquidity. Otherwise, they could consider holding the notes given the improving credit fundamentals.

Cleveland-Cliffs Inc: Labor Agreement & Other Developments

By Baptista Research

  • With Cleveland-Cliffs’ results just around the corner, it is to be seen how the management has progressed with their execution in terms of profitability and their attempts towards free cash-flow-driven reduction in debt.
  • However, higher costs and inflation led to a drop in margins and it had missed out on earnings.
  • The gross inventory values in terms of the working capital increased in the last quarter because of higher costs, and the overall steel inventory volumes decreased.

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Oct 22
0

Daily Brief TMT/Internet: Jasmine International PCL, Meituan, Blibli, Tencent, Bumble and more

By | Daily Briefs, TMT/Internet

In today’s briefing:

  • Jasmine International: Last Minute Wrinkle To Broadband Sale
  • Meituan – What to Look for in 3Q22 Result?
  • Blibli IPO: Valuation Insights
  • Shanghai/​​​​​​​​​​​​​​​​​Shenzhen Southbound Connect: Weekly Moves (21 October 2022)
  • Bumble Inc.: New Feature Additions & Other Developments

Jasmine International: Last Minute Wrinkle To Broadband Sale

By David Blennerhassett

Meituan – What to Look for in 3Q22 Result?

By Xin Yu, CFA

  • Key areas to pay attention in 3Q22: 1) Meituan Instashopping’s growth rate, 2) Meituan Select’s unit economics, 
  • 3) 4Q guidance for food delivery and in-store, hotel and travel recovery.
  • Valuation is entering an attractive territory with recent stock price correction.

Blibli IPO: Valuation Insights

By Arun George

Shanghai/​​​​​​​​​​​​​​​​​Shenzhen Southbound Connect: Weekly Moves (21 October 2022)

By David Blennerhassett

Bumble Inc.: New Feature Additions & Other Developments

By Baptista Research

  • Bumble delivered a mixed set of results for the past quarter surpassing Wall Street expectations on the revenue front but missing out on earinings.
  • The Bumble app continued to grow as the company performed well in traditional as well as international growth markets.
  • In the quarter, Bumble brought a wide portfolio of discovery-oriented products to the market.

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Oct 22
0

Daily Brief Health Care: WuXi AppTec Co Ltd, Bionote and more

By | Daily Briefs, Healthcare

In today’s briefing:

  • Shanghai/​​​​​​​​​​​​​​​​​Shenzhen Northbound Connect: Weekly Moves (21 October 2022)
  • Bionote Pre-IPO – The Negatives – Fortunes Generated from a Sole Related Party

Shanghai/​​​​​​​​​​​​​​​​​Shenzhen Northbound Connect: Weekly Moves (21 October 2022)

By David Blennerhassett

Bionote Pre-IPO – The Negatives – Fortunes Generated from a Sole Related Party

By Clarence Chu

  • Bionote (377740 KS) is looking to raise approximately US$200m in its Korean IPO. The IPO would consist of both a primary and secondary selldown.
  • Bionote is an integrated producer of diagnostics test products and biocontent products. Based on its unique recombinant antigen and antibody manufacturing technology, the firm researches and develops diagnostic reagent products.
  • A large part of the firm’s fortunes came from supplying to a sole customer, which is also a related party. Margins have since come under pressure as well.

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Oct 22
0

Daily Brief Consumer: Cafe De Coral Holdings, Japan Tobacco, Snap Inc and more

By | Consumer, Daily Briefs

In today’s briefing:

  • Cafe De Coral (341): Start to Show Positive Result
  • Japan Tobacco High Conviction Update: Guidance Has Upside Potential, The Market Is Pass Russia Fears
  • Snap 3Q22: Tik Tik Tik (Tok) …BOOM

Cafe De Coral (341): Start to Show Positive Result

By Henry Soediarko

  • The share price was beaten down during COVID thanks to the lockdown and further restrictive policy. 
  • The recent result has been encouraging especially with the loosening of the restrictive measures.
  • Cafe De Coral Holdings (341 HK) is trading at a deep discount to its peers.

Japan Tobacco High Conviction Update: Guidance Has Upside Potential, The Market Is Pass Russia Fears

By Oshadhi Kumarasiri

  • Just eight months into Russia’s Ukraine invasion, Japan Tobacco (2914 JP)’s share price has moved back above the pre-Ukraine invasion level suggesting that investors are over with Russia exposure fears.
  • Based on the company’s guidance upgrade trend historically and YTD financial performance, we are expecting around ¥70bn upside to 2022 OP guidance in 3Q22.
  • With earnings back on a growth trajectory, we are expecting a reversal of the 2017-21 share price to earnings trend to take Japan Tobacco shares over ¥3,500 in the short-term.

Snap 3Q22: Tik Tik Tik (Tok) …BOOM

By Aaron Gabin

  • How long until SNAP gets back to Zuck’s original $3B buyout offer?!
  • Key negative point: US engagement dropped 5% despite user growth +4%…we think its BeReal as much as TikTok.
  • Uninvestable or Long Time Horizon? Least visibility of any major public company we’ve ever followed. Don’t know the answer!

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Oct 22
0

Daily Brief Financials: Meritz Financial Group, Intertrust NV, Alam Sutera Realty, Kotak Mahindra Bank and more

By | Daily Briefs, Financials

In today’s briefing:

  • MSCI Korea Rebalance: Bottom 5% Continue to Underperform
  • CSC/Intertrust: End of Offer Period
  • Weekly Wrap – 21 Oct 2022
  • Kotak Mahindra Bank (KMB IN): Foreign Room >20% Should See Staggered FTSE Inclusion Starting March

MSCI Korea Rebalance: Bottom 5% Continue to Underperform

By Douglas Kim

  • In this insight, we provide a ranking system for targeting the bottom 5% of potential exclusion candidates in the upcoming MSCI Korea index rebalance in November.
  • The ranking system is based on a combined weighted rankings based on MSCI weight, market cap, and ADTV.
  • The six stocks that have received lowest weights include Meritz Financial Group, S 1 Corp, Amorepacific Group, CJ Corp, Green Cross Corp,  and LG Household & Health Care-Pref. 

CSC/Intertrust: End of Offer Period

By Jesus Rodriguez Aguilar

  • CSC and Intertrust have already obtained clearances from all different 13 required regulators. After several extensions, the Offer Period will now end on 31 October.
  • Intertrust has had a far from stellar performance on the stock market. Hence, I believe acceptances will be over 80%. The offer will be declared unconditional and the shares delisted.
  • Gross spread is 0.3% and the estimated annual return is 6.99% (settlement will be on or before 7 November. Long and tender/accept the offer.

Weekly Wrap – 21 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. ABM Investama
  2. Agile Property Holdings
  3. Fosun International
  4. Kawasan Industri Jababeka
  5. China Jinmao Holdings

and more…

Kotak Mahindra Bank (KMB IN): Foreign Room >20% Should See Staggered FTSE Inclusion Starting March

By Brian Freitas

  • Foreign investor selling has taken the foreign headroom on Kotak Mahindra Bank (KMB) to 22%. That should result in the stock being added to the FTSE All-World Index in March.
  • The stock will initially be added to the index at an investability weight of 5%. Subject to >20% foreign headroom, the investability weight will increase by 5% at subsequent rebalances.
  • Continued foreign selling could result in an MSCI weight increase if the headroom increases above 25%. That could still be some time away though.

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