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Smartkarma Daily Briefs

Oct 08
0

Daily Brief TMT/Internet: Servicenow Inc, Netgear Inc, Ciena Corp and more

By | Daily Briefs, TMT/Internet

In today’s briefing:

  • Observability: ServiceNow Acquisition Threatens Dynatrace and Elastic
  • NTGR: Hotspot of a Preview
  • Ciena Corporation: Initiation of Coverage – Partnership With MSAR & Other Drivers

Observability: ServiceNow Acquisition Threatens Dynatrace and Elastic

By Aaron Gabin

  • ServiceNow acquired Era Software this week to extend its presence in the observability and log management space.
  • The deal is most threatening to DT/ESTC (we advocate as longs) and SPLK (short) because of ServiceNow’s ability to bundle functionality for larger deals.
  • That said…the observability space remains one of the hottest in digital transformations, and the deal is on net, more validating than threatening to DT/ESTC.

NTGR: Hotspot of a Preview

By Hamed Khorsand

  • NTGR is relying on the back-to-school shopping season to help sell through some of its lingering wireless router inventory as it transitions to higher end models
  • We continue to believe the retail market remains challenging for NTGR and the Company could have experienced difficulty in selling down inventory to desired levels
  • During the third quarter NTGR used Prime Day as an opportunity to reduce inventory for certain Nighthawk wireless routers. We expect the same again during Prime Day on October 11

Ciena Corporation: Initiation of Coverage – Partnership With MSAR & Other Drivers

By Baptista Research

  • This is our first report on Ciena Corporation, a networking systems, services and software player catering primarily to the telecom industry.
  • In spite of the elongated lead times and supply chain challenges, the strong secular demand trends have not shown any sign of abating.
  • In spite of the supply challenges, Ciena had a record quantity of quarter for its WaveLogic 5 shipments.

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Oct 08
0

Daily Brief Financials: Agile Property Holdings, CIFI Holdings and more

By | Daily Briefs, Financials

In today’s briefing:

  • Chinese Property Weekly – 7 October 2022 – Lucror Analytics
  • Weekly Wrap – 07 Oct 2022

Chinese Property Weekly – 7 October 2022 – Lucror Analytics

By Charles Macgregor

The Chinese Property Weekly focuses on providing updates in the Chinese real-estate sector, including recent regulatory and company developments, top and bottom performers, rating actions, as well as a list of bond maturities in the next 30 days.

Weekly Wrap – 07 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. Times China
  2. China Jinmao Holdings
  3. Guangzhou R&F Properties
  4. Sunac China Holdings
  5. Evergrande

and more…

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

Sign Up for Free

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
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Oct 08
0

Daily Brief Health Care: Myovant Sciences, Wuxi Biologics, Jenscare Scientific and more

By | Daily Briefs, Healthcare

In today’s briefing:

  • Myovant Sciences (MYOV US): Rejects Sumitomo’s $2.5B Bid; Remains Open for Better Offer
  • Sumitomo/Myovant: Minorities Takeout
  • Shanghai/​​​​​​​​​​​​​​​Shenzhen Southbound Connect: Weekly Moves (7 October 2022)
  • Jenscare (健世科技) IPO Trading: Weak Demand and Share Concentration

Myovant Sciences (MYOV US): Rejects Sumitomo’s $2.5B Bid; Remains Open for Better Offer

By Tina Banerjee

  • Myovant Sciences (MYOV US) rejected $2.5 billion takeover offer from its largest shareholder, Sumitomo Dainippon Pharma Co (4506 JP), as the bid significantly undervalues the company.
  • Amid its tight cash situation, upcoming patent cliff, and ongoing late-stage clinical trials, Sumitomo is not expected to revise its offer upward.
  • New acquisition offer from marketing partner Pfizer is the most likely scenario. Even if the company does not receive any takeover offer, Myovant is capable of running its operating activities.

Sumitomo/Myovant: Minorities Takeout

By Jesus Rodriguez Aguilar

  • Sumitomo has offered $22.75/share in cash, 27% premium, for the 48% stake it doesn’t hold in Myovant, whose Board has rejected the offer and is open to negotiate.
  • The sell-side forecasts peak sales of over $2 billion for Orgovyx and Myfembree. Myovant also has a co-marketing deal with Pfizer could be worth $3.8 billion in milestones.
  • My TP is $22.84 (in line with consensus and the offer price). The market certainly believes that Sumitomo could be preparing a sweetened offer. Will Orgovyx become a blockbuster?

Shanghai/​​​​​​​​​​​​​​​Shenzhen Southbound Connect: Weekly Moves (7 October 2022)

By David Blennerhassett

Jenscare (健世科技) IPO Trading: Weak Demand and Share Concentration

By Ke Yan, CFA, FRM

  • Jenscare raised HKD 154.8m (USD 28m) from its global offering and will list on the Hong Kong Stock Exchange on Monday, October 10th.
  • In the previous note, we looked at the company’s business lines of medical devices for structural heart disease. We are of the view that the company’s valuation is unjustifiably rich.
  • In this note, we provide an update for the IPO before trading debut.

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Oct 08
0

Daily Brief Energy/Materials: BASF India Ltd and more

By | Daily Briefs, Energy & Materials Sector

In today’s briefing:

  • BASF India: Catalyzing Chemistry and Possibilities

BASF India: Catalyzing Chemistry and Possibilities

By Gauri Anand

  • Pivoting the world’s biggest transformation; addresses chemistry needs of the new economy 
  • These new themes will outgrow world GDP growth – perhaps almost >2x 
  • BASF is systematically aligning to the emerging trends, investing in future technologies and is integrating all of this sustainably in its value chain

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

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  • ✓ Personalised Alerts
  • ✓ Custom Watchlists
  • ✓ Company Data and News
  • ✓ Events & Webinars
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Oct 08
0

Daily Brief Consumer: Hero Motocorp, Seven & I Holdings, Kweichow Moutai, Country Style Cooking Restaurant Chain and more

By | Consumer, Daily Briefs

In today’s briefing:

  • Hero Motocorp (HMCL IN) | Brace for Disappointment
  • Seven & I – The US Is About to Hit the Brakes
  • Shanghai/​​​​​​​​​​​​​​​Shenzhen Northbound Connect: Weekly Moves (7 October 2022)
  • Country Style Cooking Restaurant Chain Pre-IPO – The Positives – A Second Attempt at Profitability

Hero Motocorp (HMCL IN) | Brace for Disappointment

By Pranav Bhavsar

  • Hero Motocorp (HMCL IN) has been outperforming the Nifty 50 over the last 6M
  • Our flash checks done in the south suggests the outperformance may not last long
  • Failure of a model, high competitive intensity, and changing preferences can again lead to high inventory levels leading to a possible correction in wholesales post-festive season. 

Seven & I – The US Is About to Hit the Brakes

By Oshadhi Kumarasiri

  • With OP up by 22% YoY to beat the consensus estimate by ¥2.0bn, Seven & I turned in a strong 2QFY23 along with a considerable upgrade to FY23 guidance.
  • However, the post-earnings price reaction seems to suggest that the market is a bit worried about the short-term performance of Seven & I Holdings (3382 JP)’s US convenience store business.
  • In addition, the struggling non-core businesses whose future remains undecided could also be weighing in on Seven & I’s price performance.

Shanghai/​​​​​​​​​​​​​​​Shenzhen Northbound Connect: Weekly Moves (7 October 2022)

By David Blennerhassett

Country Style Cooking Restaurant Chain Pre-IPO – The Positives – A Second Attempt at Profitability

By Ethan Aw

  • Country Style Cooking Restaurant Chain (1985552D HK) is looking to raise about US$200m in its upcoming Hong Kong IPO.
  • Country Style Cooking Restaurant Chain (CSCRC) is a Chinese quick service restaurant (QSR) chain situated in China. It operates two brands, namely: CSC and Rice Space, which are all self-operated. 
  • In this note, we talk about the positive aspects of the deal. 

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

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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
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Oct 08
0

Daily Brief United States: Servicenow Inc, Netgear Inc, Ciena Corp and more

By | Daily Briefs, United States

In today’s briefing:

  • Observability: ServiceNow Acquisition Threatens Dynatrace and Elastic
  • NTGR: Hotspot of a Preview
  • Ciena Corporation: Initiation of Coverage – Partnership With MSAR & Other Drivers

Observability: ServiceNow Acquisition Threatens Dynatrace and Elastic

By Aaron Gabin

  • ServiceNow acquired Era Software this week to extend its presence in the observability and log management space.
  • The deal is most threatening to DT/ESTC (we advocate as longs) and SPLK (short) because of ServiceNow’s ability to bundle functionality for larger deals.
  • That said…the observability space remains one of the hottest in digital transformations, and the deal is on net, more validating than threatening to DT/ESTC.

NTGR: Hotspot of a Preview

By Hamed Khorsand

  • NTGR is relying on the back-to-school shopping season to help sell through some of its lingering wireless router inventory as it transitions to higher end models
  • We continue to believe the retail market remains challenging for NTGR and the Company could have experienced difficulty in selling down inventory to desired levels
  • During the third quarter NTGR used Prime Day as an opportunity to reduce inventory for certain Nighthawk wireless routers. We expect the same again during Prime Day on October 11

Ciena Corporation: Initiation of Coverage – Partnership With MSAR & Other Drivers

By Baptista Research

  • This is our first report on Ciena Corporation, a networking systems, services and software player catering primarily to the telecom industry.
  • In spite of the elongated lead times and supply chain challenges, the strong secular demand trends have not shown any sign of abating.
  • In spite of the supply challenges, Ciena had a record quantity of quarter for its WaveLogic 5 shipments.

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

Sign Up for Free

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
Sign Up for Free
Oct 08
0

Most Read: Keppel Corp, Shinsei Bank, ISC Co Ltd, Kakao Pay, CanariaBio, Jardine Cycle & Carriage, Fu Shou Yuan International, ICBC (H), Seven & I Holdings, Kweichow Moutai and more

By | Daily Briefs, Most Read

In today’s briefing:

  • Keppel O&M Spin-Off Approaching Quickly
  • Thinking Strategically About a Shinsei Position – Things To Do NOW
  • KOSDAQ150 Index Rebalance Preview: Moving in the Right Direction
  • Kakao Pay: Downsized Rights Offering of Kakao Pay Securities & Potential Selling by Alipay
  • KOSDAQ 150 Rebalancing: 7 Regular Changes + 2 Special Entries
  • JCNC Is Overstretched Vs. Astra
  • Fu Shou Yuan (1448 HK): An Everlasting Growth Business
  • EQD | HSBA Vs ICBC (5 HK,1398 HK): Trade a Relative Value Vol Spread
  • Seven & I – The US Is About to Hit the Brakes
  • Shanghai/​​​​​​​​​​​​​​​Shenzhen Northbound Connect: Weekly Moves (7 October 2022)

Keppel O&M Spin-Off Approaching Quickly

By Travis Lundy

  • After 18mos of hints, and two rights recapitalisations at Sembcorp Marine (SMM SP), SMM and Keppel Corp (KEP SP) announced a deal to merge their O&M businesses at end-April.
  • Keppel shareholders would receive ~18 shares of SMM per share of Keppel owned, Keppel spins out the equity of its legacy rig assets and leaves the O&M biz clean.
  • The structure announced lets us examine “forward KEP”, and anticipate interest and valuations post-spin, which is “supposed to” happen in Q4. We’re in Q4 now, and Keppel is interesting here.

Thinking Strategically About a Shinsei Position – Things To Do NOW

By Travis Lundy

  • SBI Holdings (8473 JP)‘s subsidiary has reportedly filed its application to become a Bank Holding Company, the definition being a company holding a 50% or greater stake in a bank.
  • The day after I last wrote, Shinsei announced it had received approval to change its name to SBI Shinsei Bank as of 4 January 2023.
  • My expectation is the move above 50% happens sooner rather than later. And in that case, investors should think about their approach. Get your cowbells ready.

KOSDAQ150 Index Rebalance Preview: Moving in the Right Direction

By Brian Freitas

  • With 85% of the review period complete, we see 10 potential changes to the KOSDAQ 150 Index (KOSDQ150 INDEX) at the December rebalance.
  • There are a few stocks that are close adds/deletes on market cap and liquidity and could make it into the final list depending on price/volume over the next few weeks.
  • The potential adds have outperformed the potential deletes over the last month and pre-positioning could continue till the end of the review period.

Kakao Pay: Downsized Rights Offering of Kakao Pay Securities & Potential Selling by Alipay

By Douglas Kim

  • The lack of minority shareholders participation in Kakao Pay Securities rights offering is likely to be viewed negatively by many investors since Kakao Pay may need to inject more capital.
  • On 8 June 2022, Alipay sold 5 million shares of Kakao Pay and Alipay put a lockup on its remaining 46 million shares in Kakao Pay for another 120 days.
  • All in all, we continue to have a Negative view of Kakao Pay. 

KOSDAQ 150 Rebalancing: 7 Regular Changes + 2 Special Entries

By Sanghyun Park

  • KOSDAQ 150’s December rebalancing will feature seven regular changes and two special entries.
  • Among the additions, we should focus on Dear U and ISC, which have a balanced level of liquidity and flow, rather than those theme stocks with high volatility.
  • As for Nature Holdings, Eoflow, and Nextin, I suggest a more aggressive entry point due to low trading volume. Then, I’d basket-trade the deletions on equal weight.

JCNC Is Overstretched Vs. Astra

By David Blennerhassett

  • Jardine Cycle & Carriage (JCNC SP) is currently trading at a ~9% discount to NAV, around the narrowest since the post-Covid nadir in April 2020.
  • JCNC’s recent results highlighted a marked improvement in its unlisted Vietnamese automotive ops. 
  • Weakness in the Indonesian rupiah has taken some of the shine off Astra International (ASII IJ)‘s strong sales growth. 

Fu Shou Yuan (1448 HK): An Everlasting Growth Business

By Osbert Tang, CFA

  • The volatile market environment prompted us to seek for companies with secured demand, high earnings quality and solid financial position – Fu Shou Yuan International (1448 HK) fits these criteria.
  • It has established earnings record, favourable demographic environment, good reserve for growth and upside from geographical expansion. We like its emphasis on shareholder return through rising payout and share buyback. 
  • Its net cash position, which amounted to 20% of the market capitalisation, adds further comfort to us. Meanwhile, valuations are not stretched relative to international peers.

EQD | HSBA Vs ICBC (5 HK,1398 HK): Trade a Relative Value Vol Spread

By Simon Harris

  • We looked at HSBC and ICBC to consider relative vol surfaces 
  • We evaluate relative risks of credit deterioration in China on both stocks
  • We suggest a relative value vol trade that offers good risk reward in various scenarios

Seven & I – The US Is About to Hit the Brakes

By Oshadhi Kumarasiri

  • With OP up by 22% YoY to beat the consensus estimate by ¥2.0bn, Seven & I turned in a strong 2QFY23 along with a considerable upgrade to FY23 guidance.
  • However, the post-earnings price reaction seems to suggest that the market is a bit worried about the short-term performance of Seven & I Holdings (3382 JP)’s US convenience store business.
  • In addition, the struggling non-core businesses whose future remains undecided could also be weighing in on Seven & I’s price performance.

Shanghai/​​​​​​​​​​​​​​​Shenzhen Northbound Connect: Weekly Moves (7 October 2022)

By David Blennerhassett

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

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

  • ✓ Unlimited Research Summaries
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  • ✓ Custom Watchlists
  • ✓ Company Data and News
  • ✓ Events & Webinars
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Oct 08
0

Daily Brief India: Hero Motocorp, BASF India Ltd and more

By | Daily Briefs, India

In today’s briefing:

  • Hero Motocorp (HMCL IN) | Brace for Disappointment
  • BASF India: Catalyzing Chemistry and Possibilities

Hero Motocorp (HMCL IN) | Brace for Disappointment

By Pranav Bhavsar

  • Hero Motocorp (HMCL IN) has been outperforming the Nifty 50 over the last 6M
  • Our flash checks done in the south suggests the outperformance may not last long
  • Failure of a model, high competitive intensity, and changing preferences can again lead to high inventory levels leading to a possible correction in wholesales post-festive season. 

BASF India: Catalyzing Chemistry and Possibilities

By Gauri Anand

  • Pivoting the world’s biggest transformation; addresses chemistry needs of the new economy 
  • These new themes will outgrow world GDP growth – perhaps almost >2x 
  • BASF is systematically aligning to the emerging trends, investing in future technologies and is integrating all of this sustainably in its value chain

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

Sign Up for Free

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
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Oct 08
0

Daily Brief Japan: Seven & I Holdings and more

By | Daily Briefs, Japan

In today’s briefing:

  • Seven & I – The US Is About to Hit the Brakes

Seven & I – The US Is About to Hit the Brakes

By Oshadhi Kumarasiri

  • With OP up by 22% YoY to beat the consensus estimate by ¥2.0bn, Seven & I turned in a strong 2QFY23 along with a considerable upgrade to FY23 guidance.
  • However, the post-earnings price reaction seems to suggest that the market is a bit worried about the short-term performance of Seven & I Holdings (3382 JP)’s US convenience store business.
  • In addition, the struggling non-core businesses whose future remains undecided could also be weighing in on Seven & I’s price performance.

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

Sign Up for Free

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
Sign Up for Free
Oct 08
0

Daily Brief China: Kweichow Moutai, Wuxi Biologics, Agile Property Holdings, Country Style Cooking Restaurant Chain, Jenscare Scientific, CIFI Holdings and more

By | China, Daily Briefs

In today’s briefing:

  • Shanghai/​​​​​​​​​​​​​​​Shenzhen Northbound Connect: Weekly Moves (7 October 2022)
  • Shanghai/​​​​​​​​​​​​​​​Shenzhen Southbound Connect: Weekly Moves (7 October 2022)
  • Chinese Property Weekly – 7 October 2022 – Lucror Analytics
  • Chinese Property Weekly – 7 October 2022 – Lucror Analytics
  • Country Style Cooking Restaurant Chain Pre-IPO – The Positives – A Second Attempt at Profitability
  • Jenscare (健世科技) IPO Trading: Weak Demand and Share Concentration
  • Weekly Wrap – 07 Oct 2022
  • Weekly Wrap – 07 Oct 2022

Shanghai/​​​​​​​​​​​​​​​Shenzhen Northbound Connect: Weekly Moves (7 October 2022)

By David Blennerhassett

Shanghai/​​​​​​​​​​​​​​​Shenzhen Southbound Connect: Weekly Moves (7 October 2022)

By David Blennerhassett

Chinese Property Weekly – 7 October 2022 – Lucror Analytics

By Charles Macgregor

The Chinese Property Weekly focuses on providing updates in the Chinese real-estate sector, including recent regulatory and company developments, top and bottom performers, rating actions, as well as a list of bond maturities in the next 30 days.

Chinese Property Weekly – 7 October 2022 – Lucror Analytics

By Charles Macgregor

The Chinese Property Weekly focuses on providing updates in the Chinese real-estate sector, including recent regulatory and company developments, top and bottom performers, rating actions, as well as a list of bond maturities in the next 30 days.

Country Style Cooking Restaurant Chain Pre-IPO – The Positives – A Second Attempt at Profitability

By Ethan Aw

  • Country Style Cooking Restaurant Chain (1985552D HK) is looking to raise about US$200m in its upcoming Hong Kong IPO.
  • Country Style Cooking Restaurant Chain (CSCRC) is a Chinese quick service restaurant (QSR) chain situated in China. It operates two brands, namely: CSC and Rice Space, which are all self-operated. 
  • In this note, we talk about the positive aspects of the deal. 

Jenscare (健世科技) IPO Trading: Weak Demand and Share Concentration

By Ke Yan, CFA, FRM

  • Jenscare raised HKD 154.8m (USD 28m) from its global offering and will list on the Hong Kong Stock Exchange on Monday, October 10th.
  • In the previous note, we looked at the company’s business lines of medical devices for structural heart disease. We are of the view that the company’s valuation is unjustifiably rich.
  • In this note, we provide an update for the IPO before trading debut.

Weekly Wrap – 07 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. Times China
  2. China Jinmao Holdings
  3. Guangzhou R&F Properties
  4. Sunac China Holdings
  5. Evergrande

and more…

Weekly Wrap – 07 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. Times China
  2. China Jinmao Holdings
  3. Guangzhou R&F Properties
  4. Sunac China Holdings
  5. Evergrande

and more…

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

Sign Up for Free

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
Sign Up for Free