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Smartkarma Daily Briefs

Oct 12
0

Daily Brief Singapore: Golden Energy & Resources and more

By | Daily Briefs, Singapore

In today’s briefing:

  • Golden Energy & Resources: Widjaja Family Betting Ridiculous Cashflow Continues

Golden Energy & Resources: Widjaja Family Betting Ridiculous Cashflow Continues

By David Blennerhassett

  • Golden Energy & Resources (GER SP), an Indonesian/Australian energy/met coal play, may be subject to an acquisition from its controlling shoulder, the Widjaja Family.
  • GEAR reported 1H22 (to June) earnings of US$279mn, an 859% gain yoy, as contributions from the newly acquired stake in an Australian coal mine from BHP (BHP AU) kicked in.
  • The family is potentially betting on one to two more years of outsized cashflow as the world’s coal habit remains healthy.

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Oct 12
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Daily Brief China: Meituan, Giant Biogene Holding, Taste Gourmet Group, Anhui Conch Cement, Powerlong Real Estate Holdings and more

By | China, Daily Briefs

In today’s briefing:

  • Does Meituan Have the Appetite to Serve HK Food Delivery Market and Take On Foodpanda and Deliveroo?
  • Giant Biogene IPO: The Bull Case
  • Taste Gourmet: Buybacks And Recovery Into Q2 2023
  • Anhui Conch Cement (914 HK): Well Geared Towards the Long-Term Drivers
  • Morning Views Asia: Powerlong Commercial Management Holdings, Sino-Ocean Service

Does Meituan Have the Appetite to Serve HK Food Delivery Market and Take On Foodpanda and Deliveroo?

By Shifara Samsudeen, ACMA, CGMA

  • Several news media outlets reported that food delivery giant Meituan (3690 HK) is preparing to enter the food delivery market in Hong Kong as domestic market is slowing down.
  • Slowdown in Chinese economy coupled with regulatory hurdles have made it impossible for Meituan and other domestic tech players to expand locally.
  • Online food delivery market in HK is dominated by Foodpanda and Deliveroo, and we think Meituan will have to offer deep discounts to grab market share from these two dominants.

Giant Biogene IPO: The Bull Case

By Arun George

  • Giant Biogene Holding (GBH HK), a leading professional skin care product manufacturer, has started pre-marketing a US$500 million HKEx IPO.  
  • According to Frost & Sullivan, Biogene was China’s second-largest professional skin treatment product company by retail sales in 2021.  
  • The key elements of the bull case rest on a large and growing addressable market, regulatory tailwinds, the core brand’s stellar performance and high cash generation. 

Taste Gourmet: Buybacks And Recovery Into Q2 2023

By Sameer Taneja

  • Taste Gourmet Group (8371 HK) is a play on the HK recovery with a promising outlook in the long-term at 5.7x/4.3x FY23/24e PE (10.5%/14.1% dividend yield assuming 60% payout).
  • The company recently initiated a buyback mandate on the 20th of September for (10% of outstanding shares) and has repurchased 2.2% of outstanding shares so far.
  • We believe the company will report strong earnings for its quarterly release on November 11th and payout a good dividend which will be a further catalyst for rerating.

Anhui Conch Cement (914 HK): Well Geared Towards the Long-Term Drivers

By Osbert Tang, CFA

  • We see improvements in the underlying drivers of Anhui Conch Cement (914 HK) over the last two months, and we believe value has emerged for long-term investors.
  • There is a slight recovery in cement price in Sep, and the proceeds from local governments’ special purpose bonds issuance will make incremental stimulus to demand. 
  • Net cash now amounts to 37.5% of share price, providing support to its over 9% prospective dividend yield as well as potential value-enhancing M&As. 

Morning Views Asia: Powerlong Commercial Management Holdings, Sino-Ocean Service

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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Oct 12
0

Daily Brief Japan: Shinsei Bank, Socionext, Toshiba Corp, J Front Retailing, Adastria Co Ltd, Tokyo Stock Exchange Tokyo Price Index Topix and more

By | Daily Briefs, Japan

In today’s briefing:

  • SBI Obtains Approval – Has Plan To Buy 0.965% of Shinsei – It Isn’t Strategic, It’s Technical
  • Socionext IPO Trading – Upsized IPO with Strong Demand. Peers Inched Downwards, but Upside Remains
  • Toshiba (6502) – JIP Gets Preferred Bidder Status and We Get The First Price Leak
  • J Front Retailing (3086) | Still in the Bargain Basement
  • Adastria Signs Forever 21, New Growth Through Licensing?
  • The Resolution of Human Rights Issues Should Not Be a Means to a Purpose

SBI Obtains Approval – Has Plan To Buy 0.965% of Shinsei – It Isn’t Strategic, It’s Technical

By Travis Lundy

  • SBI Holdings (8473 JP)‘s unit SBI Regional Bank Holdings KK (SBI 地銀ホールディングス株式会社) today announced it had received FSA authorisation to turn the company into a Bank Holding Company.  
  • There are some technicalities involved. SBI announced it would buy 2.5mm shares of Shinsei on-market to get to 50.05% by end-March 2023. This will disappoint some, but…
  • I expect investors should continue to look at the big picture. Technicalities are technicalities. Strategy is strategy. The big picture is unchanged and there isn’t that much room to manoeuvre. 

Socionext IPO Trading – Upsized IPO with Strong Demand. Peers Inched Downwards, but Upside Remains

By Clarence Chu

  • Socionext (6526 JP) raised around US$463m in its Japan IPO. The IPO consisted of 100% secondary shares.
  • Socionext is a fabless semiconductor provider which commenced operations after integrating the system on a chip (SoC) businesses of Fujitsu Semiconductor Limited and Panasonic Holding Corporation.  
  • In this note we will talk about the trading dynamics.

Toshiba (6502) – JIP Gets Preferred Bidder Status and We Get The First Price Leak

By Travis Lundy

  • Overnight, a few news outlets are running with the story that Toshiba Corp (6502 JP) has granted “preferred bidder” status to the Japan Industrial Partners (JIP)-led consortium bid.
  • JIP had originally signed up with public-private fund JIC, forming one of the four bids (the other three being CVC, Bain, and Brookfield) but JIP and JIC split last month.
  • “Preferred Bidder status” is just that. It’s not exclusive, but one can read between the lines. But the articles have interesting details, including the first trial ballon price leak.

J Front Retailing (3086) | Still in the Bargain Basement

By Mark Chadwick

  • J. Front is a key beneficiary of improving consumption post-pandemic and a return of inbound tourism.
  • Q2 sales rose 4.8% on the year. 2H sales guidance +2% YoY looks too conservative given full resumption of inbound tourism.
  • We believe the stock still represents good value at 0.9x book value.

Adastria Signs Forever 21, New Growth Through Licensing?

By Michael Causton

  • Adastria’s growth has been sporadic in recent years as it adjusts to maturity and saturation in core apparel markets.It has diversification projects but these will take time to develop.
  • It thinks it can find faster growth by franchising and licensing with already well-known brands, starting with Forever 21.
  • It also has a new business providing apparel collections to General Merchandise Retailers, starting with Izumi.

The Resolution of Human Rights Issues Should Not Be a Means to a Purpose

By Aki Matsumoto

  • If discussion doesn’t proceed from the starting point that respect for rights should be for the coexistence of humankind, not for the maintenance of corporate activities, it will get confused.
  • Although human rights were included in the 2021 revision of the Corporate Governance Code in the Principles of Sustainability, it is not thought to have been effective.
  • The repeated human rights violation scandals at companies and the fact that these companies have human rights policies in place infers that this is a deeply rooted problem in society.

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Oct 11
0

Daily Brief Utilities: CRB Commodity Index and more

By | Daily Briefs, Utilities Sector

In today’s briefing:

  • The Commodity Report #72

The Commodity Report #72

By The Commodity Report

  • The group announced to cut its output limits of as much as 2 million barrels a day, using current targets as a starting point.
  • While a significant reduction, the impact on global supply will be much smaller because several countries are already pumping below their quotas.
  • Most analysts expect that the real supply cut will be around 700 to 800 bpd.

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Oct 11
0

Daily Brief Industrials: Pylon Technologies Co Ltd, Toyo Construction, Lohia Corp and more

By | Daily Briefs, Industrials

In today’s briefing:

  • CSI500 Index Rebalance Preview: Positioned for Outperformance
  • Smartkarma Webinar | Shinsei, Toa Oil, and Toyo Construction Updates
  • Lohia Corp Pre-IPO Tearsheet

CSI500 Index Rebalance Preview: Positioned for Outperformance

By Brian Freitas

  • Nearing the end of the review period for the December rebalance of the CSI500 Index, we forecast 50 changes (the maximum permitted) at the close on 9 December.
  • There is a big sector skew in the potential changes. We estimate a one-way turnover of 13.67% at the December rebalance leading to a one-way trade of CNY 7.53bn.
  • The potential adds have outperformed over the last 6 months but have given up some of the gains recently as market turned volatile. Expect outperformance as the review period ends.

Smartkarma Webinar | Shinsei, Toa Oil, and Toyo Construction Updates

By Smartkarma Research

Our latest Webinar looks at news updates on Shinsei, Toa Oil, and Toyo Construction. To help us explore the implications for investors, we welcome Insight Provider Travis Lundy of Quiddity Advisors. 

The webinar will be hosted on Wednesday, 12 October 2022, 17:00 SGT/HKT.

Travis Lundy has 20+ years of experience in Asia doing alternative strategies (i.e. non-delta1 non long-only) in fixed income, equity derivatives, and activist/catalyst/event-driven and long-short equity strategies, with most of that time spent managing money.

Lohia Corp Pre-IPO Tearsheet

By Ethan Aw

  • Lohia Corp (1638860D IN) is looking to raise about US$183m in its upcoming India IPO. The deal will be run by ICICI Securities, HSBC, IIFL Securities and Motilal Oswal.
  • Lohia Corp is the market leader in India for end-to-end manufacturing solutions within the machine segment for the Raffia industry in Fiscal 2022, according to Frost & Sullivan. 
  • In addition to machines for the Raffia industry, it also manufactures spin-draw-wind machines (LOFIL) for polypropylene (PP) multifilament yarn that is used in upholstery, among others.

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Oct 11
0

Daily Brief TMT/Internet: Bilibili, Pushpay Holdings, Lionheart Studio, Tencent, Yaskawa Electric, AVEVA Group PLC, Binance Coin and more

By | Daily Briefs, TMT/Internet

In today’s briefing:

  • Clarifying the Bilibili (9626 HK) Rule on Southbound Eligibility
  • Pushpay Draws Another Sixth Street/BGH Offer
  • Lion Heart Studio Pre-IPO – The Positives – Got One Hit
  • Tencent Seeks Majority Stake in Overseas Game Companies as Game Revenue Slows Down Further
  • Yaskawa (6506 JP) | Constant Currency Concerns
  • Schneider Electric/​Aveva: Potential Offer Price Sweetening
  • Open Interest Hits All Time High

Clarifying the Bilibili (9626 HK) Rule on Southbound Eligibility

By Travis Lundy

  • Bilibili Inc (BILI US) listed in the US in April 2018. It eventually listed in Hong Kong under the ticker Bilibili (9626 HK) in March 2021 as a Secondary Listing. 
  • Bilibili (9626 HK)  announced 16 March 2022 it intended to pursue a HK Primary Listing.  Application was announced on 2 May 2022, Circular a month later. Results announced 29 September.
  • As of 3 October, it is a Dual Primary Listing, making it eventually eligible for Southbound Trading. But there as confusion as to when. Hint:  It’s March 2023.

Pushpay Draws Another Sixth Street/BGH Offer

By Arun George

  • Pushpay Holdings (PPH NZ) confirmed that it had received a “revised” indicative non-binding proposal from a shareholder consortium, believed to be Sixth Street/BGH, which has a 20.3% stake.
  • The proposal is “to acquire the Company at a premium to Friday’s closing share price.” Due to the sell-off, Sixth Street/BGH will likely offer a lower premium than initially intended.
  • Our best guess is that Sixth Street/BGH’s offer is around A$1.30 per share. While not a knockout offer, it is a good starting point in the current grim market conditions.

Lion Heart Studio Pre-IPO – The Positives – Got One Hit

By Sumeet Singh

  • Lionheart Studio (426630 KS), a game development studio based in South Korea,  aims to raise around US$420m via its South Korean IPO.
  • The company is majority owned by Kakao Games Corp (293490 KS), which after having recently hiked its stake, owned 54.94% of the company prior to listing.  
  • In this note, we will talk about the positive aspects of the deal.

Tencent Seeks Majority Stake in Overseas Game Companies as Game Revenue Slows Down Further

By Shifara Samsudeen, ACMA, CGMA

  • Several news media outlets reported last week that Tencent has changed its M&A strategy to obtain majority stakes in overseas gaming companies as opposed to buying minority stakes previously.
  • Tencent’s online game revenue declined YoY for two-consecutive quarters primarily due to decline in domestic game revenue that was impacted by absence of new game titles and minority protection rules.
  • Our analysis on Tencent’s game downloads and ranks reveal that both domestic and international game revenues would decline further in 3Q2022E.

Yaskawa (6506 JP) | Constant Currency Concerns

By Mark Chadwick

  • Yaskawa’s order momentum has peaked. On a constant currency basis, orders growth was -6% sequentially
  • Margins for the key Motion Control segment were 160bps lower in the quarter compared to a year ago
  • A minor revision down relies on aggressive FX assumptions for the 2H. We feel there is another downgrade to come. Stay Bearish

Schneider Electric/​Aveva: Potential Offer Price Sweetening

By Jesus Rodriguez Aguilar

  • Davidson Kempner and others may seek an improved offer of up to 3,500p/share, 29.7x EV/Fwd EBIT, in line with Ideagen’s acquisition multiples. Gross spread is +2.38%.
  • Assuming AVEVA can reach 2018a 34.7% EBITDA margins and increase revenues, the offer price would seem cheap. An increase to 3,300p seems feasible, £4,073 million, similar to the Bridge Facility.
  • Current net debt/EBITDA is 1.3x and EBIT/interest is 33.6x, so it could comfortably take on that additional debt. At 3,300p, proforma net debt/EBITDA would be 1.9x, before adding any synergies.

Open Interest Hits All Time High

By Kaiko

  • Price Movements: BNB, the native token of Binance Smart Chain, is down 8% following a $100mn hack.
  • Market Liquidity: Sushiswap’s market share vs. Uniswap hit all time lows of just 1% in September as new Head Chef takes over. 
  • Derivatives: Open interest on Binance has surged to all time highs, although funding rates remain firmly neutral.

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Oct 11
0

Daily Brief Industrials: Pylon Technologies Co Ltd, Toyo Construction, Lohia Corp and more

By | Daily Briefs, Industrials

In today’s briefing:

  • CSI500 Index Rebalance Preview: Positioned for Outperformance
  • Smartkarma Webinar | Shinsei, Toa Oil, and Toyo Construction Updates
  • Lohia Corp Pre-IPO Tearsheet

CSI500 Index Rebalance Preview: Positioned for Outperformance

By Brian Freitas

  • Nearing the end of the review period for the December rebalance of the CSI500 Index, we forecast 50 changes (the maximum permitted) at the close on 9 December.
  • There is a big sector skew in the potential changes. We estimate a one-way turnover of 13.67% at the December rebalance leading to a one-way trade of CNY 7.53bn.
  • The potential adds have outperformed over the last 6 months but have given up some of the gains recently as market turned volatile. Expect outperformance as the review period ends.

Smartkarma Webinar | Shinsei, Toa Oil, and Toyo Construction Updates

By Smartkarma Research

Our latest Webinar looks at news updates on Shinsei, Toa Oil, and Toyo Construction. To help us explore the implications for investors, we welcome Insight Provider Travis Lundy of Quiddity Advisors. 

The webinar will be hosted on Wednesday, 12 October 2022, 17:00 SGT/HKT.

Travis Lundy has 20+ years of experience in Asia doing alternative strategies (i.e. non-delta1 non long-only) in fixed income, equity derivatives, and activist/catalyst/event-driven and long-short equity strategies, with most of that time spent managing money.

Lohia Corp Pre-IPO Tearsheet

By Ethan Aw

  • Lohia Corp (1638860D IN) is looking to raise about US$183m in its upcoming India IPO. The deal will be run by ICICI Securities, HSBC, IIFL Securities and Motilal Oswal.
  • Lohia Corp is the market leader in India for end-to-end manufacturing solutions within the machine segment for the Raffia industry in Fiscal 2022, according to Frost & Sullivan. 
  • In addition to machines for the Raffia industry, it also manufactures spin-draw-wind machines (LOFIL) for polypropylene (PP) multifilament yarn that is used in upholstery, among others.

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Oct 11
0

Daily Brief Health Care: PureTech Health, Tokyo Stock Exchange Tokyo Price Index Topix, Wuxi Biologics, Giant Biogene Holding and more

By | Daily Briefs, Healthcare

In today’s briefing:

  • PureTech Health (PRTC LN): Possible Combination with Nektar Is Just a Defensive Move
  • Recognizing Human Resource Strategy as a Management Issue and Creating the Policy Is the First Step
  • Wuxi Biologics (2269.HK) – Removed from UVL, but the Crisis Is Not Over
  • Giant Biogene Pre-IPO – PHIP Updates – Sales Growing Faster but so Have Marketing Spends

PureTech Health (PRTC LN): Possible Combination with Nektar Is Just a Defensive Move

By Tina Banerjee

  • PureTech Health (PRTC LN) has confirmed its possible merger with Nektar Therapeutics (NKTR US). Uncertainty regarding the actual offer has caused volatility to PureTech shares.
  • Nektar will be required, by not later than November 3, 2022, to announce a firm intention to make an offer for the company.
  • Nektar faced a big setback in its lead pipeline assets and is going through tight financial condition. We are not expecting a lucrative takeover offer for PureTech.

Recognizing Human Resource Strategy as a Management Issue and Creating the Policy Is the First Step

By Aki Matsumoto

  • Neither the company nor the employees have made sufficient investments, despite the fact that both sides see a gap between the skills they need and the reality.
  • Many companies either fail to link their management strategy to their human capital investment and human resource strategy, or don’t have a clear policy for human capital investment.
  • If investment in human resources is curbed in order to maintain short-term profit margins, this will lead to weighing on growth potential and profit margins in the medium-to-long term.

Wuxi Biologics (2269.HK) – Removed from UVL, but the Crisis Is Not Over

By Xinyao (Criss) Wang

  • Wuxi Biologics (2269 HK) has been removed from the “Unverified List”, but the crisis is not over. CXO’s valuation center could gradually volatile to the downside,during which there would be temporary rebounds.
  • Biotechnology of US and China has entered a higher level of game. As domestic CXO is deeply embedded in global supply chain, we won’t take any chances on WuXi Biologics.
  • We may face a long high-interest-rate environment after the Fed hikes,but the booming of US pharmaceutical IPOs is the underlying logic of CXO. We provided suggestions on CXO trading strategy.

Giant Biogene Pre-IPO – PHIP Updates – Sales Growing Faster but so Have Marketing Spends

By Sumeet Singh

  • Giant Biogene Holding (GBH HK) aims to raise around US$500m in its Hong Kong IPO.
  • GB is a leader in the bioactive ingredient-based professional skin treatment product industry in China.
  • We had looked at the company’s past performance in  our previous notes. In this note, we’ll talk about its PHIP updates.

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Oct 11
0

Daily Brief Financials: Bank Rakyat Indonesia, KB Financial, Pakuwon Jati, Central China Real Estate, NFT and more

By | Daily Briefs, Financials

In today’s briefing:

  • BRI – Spectacular Margins and ALM
  • South Korean Banks Screener; KB Financial Is Our Core Pick
  • Pakuwon Jati – Tear Sheet – Lucror Analytics
  • Morning Views Asia: Central China Securities, Sunac China Holdings
  • Sporting Crypto – October 10th 2022: The Next Frontier of Sport NFTs

BRI – Spectacular Margins and ALM

By Daniel Tabbush

  • BRI’s margins are highest of major Asean banks at nearly 9% and growing
  • Asset-Liability management (ALM), core to banking, can see NIM remain strong
  • Credit costs remain high relative to the past, there is scope for a ratcheting downward

South Korean Banks Screener; KB Financial Is Our Core Pick

By Victor Galliano

  • Six of the seven South Korean banks screen favourably on valuation versus returns metrics to June 2022; we like KB Financial, whilst Woori Financial is a wait and see story
  • KB has undemanding valuations, and one of the lowest PEG ratios; it delivers steady pre-provision returns, has sound core capital ratio of close to 13% and healthy credit quality ratios
  • Woori Financial and potentially KakaoBank are two names to review post 3Q22 results, with Woori and KakaoBank having seen their 2Q22 cost of risk rise sharply; we seek positive catalysts

Pakuwon Jati – Tear Sheet – Lucror Analytics

By Trung Nguyen

We view Pakuwon Jati (PWON) as “Low Risk” on the LARA scale, on account of the company’s prudent financial policy in recent years, strong balance sheet, good access to capital and track record of achieving growth amid challenging market conditions. PWON has strong credit metrics compared to Indonesian peers, and it has withstood the downturn in Indonesian real estate. We like the company’s high share of recurring income (slightly more than half of group revenues) and diversified property portfolio (spanning the residential, retail, office and hotel segments), which mitigate its history of debt restructuring. The key risk is a change in consumer behaviour, which might result in low mall traffic long after COVID-19 related lockdowns have ended.

Our fundamental Credit Bias is “Stable”, as the robust balance sheet should help PWON weather economic downturns.

Controversies are “Immaterial” and the ESG Impact on Credit is “Neutral”. The real estate industry is not exposed to many of the ESG risks common in other sectors.

Morning Views Asia: Central China Securities, Sunac China Holdings

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.

Sporting Crypto – October 10th 2022: The Next Frontier of Sport NFTs

By Sporting Crypto

  • By now you’ve heard of NFTs. I mean, if you’re reading this newsletter and you haven’t — you’ve taken a wrong turn on the internet.
  • NFTs (Non-Fungible Tokens) have gripped millions of people worldwide and had countless journalists, marketing execs and boardroom members scratching their head with the thought.
  • So let’s start with why NFTs, as a technology, need to be built using a blockchain.

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Oct 11
0

Daily Brief Consumer: Nissan Motor, Hisense Home Appliances Group Co., Ltd. H, Fast Retailing, Lotte Confectionery, Meihua Holdings Group Co A, K Car, SAMG Entertainment and more

By | Consumer, Daily Briefs

In today’s briefing:

  • Renault & Nissan – Capital Manoeuvres In the Dark
  • Hisense (921 HK/000921 CH) Nonsense
  • Fast Retailing – FY23 Guidance Could Knock Some Sense into Market
  • KOSPI200 Index Rebalance Preview: Few Changes, Big Impact
  • SSE180 Index Rebalance Preview: Stock Connect & MSCI/FTSE Eligibility
  • K Car Lockup – Small Stock with a Big Lockup – Money Recouped, Any Price Is a Good Price to Sell
  • SAMG Entertainment IPO Preview

Renault & Nissan – Capital Manoeuvres In the Dark

By Travis Lundy

  • In April, a Bloomberg story said Renault SA (RNO FP) might sell shares in Nissan Motor (7201 JP) to support its investment in EVs. They might sell to Nissan, others.
  • Renault shares popped hard, this two months after CEO Luca de Meo had said Renault might split, investing in and listing its EV business separately.  But since then? Crickets.
  • Over the weekend, we have news talks are coming to a head. My feeling? The results won’t be pretty – a messy agreement which inspires nobody, but probably still works.

Hisense (921 HK/000921 CH) Nonsense

By David Blennerhassett

  • Back on the 21 October 2016, Hisense Home Appliances Group Co., Ltd. H (921 HK) announced it would invest  RMB1.7bn of “idle” funds into wealth management products, or ~HK$1.43/share.
  • Between 16 September 2022 and 8 October, Hisense announced it has invested HK$1.13bn of idle funds in wealth management products.
  • Hisense reckons the investment is “beneficial for enhancing efficiency of use of idle self-owned funds“. But if truly idle, they should be returned to shareholders.

Fast Retailing – FY23 Guidance Could Knock Some Sense into Market

By Oshadhi Kumarasiri

  • Although we are not expecting a major miss for Fast Retailing (9983 JP) in FQ4, we believe FY23 guidance could be disappointing to prompt a substantial correction in FY23 consensus.
  • China is continuously failing to live up to the company’s expectations and the only factors holding Uniqlo’s share price from breaking-down are the North America growth and the Yen depreciation.
  • Those too are now under threat, with a looming recession and Fed rate hikes failing to curb inflation.

KOSPI200 Index Rebalance Preview: Few Changes, Big Impact

By Brian Freitas

  • 90% of the way through the review period of the Kospi 200 Index December rebalance, we see two potential changes to the index. There is another potential inclusion failing liquidity.
  • This rebalance is expected to have the lowest turnover as compared to any of the Kospi 200 Index rebalances over the last few years. Partly lower markets, partly no IPOs.
  • That said, passive trackers are estimated to need to trade over 10 days of ADV on one of the potential adds and both potential deletes.

SSE180 Index Rebalance Preview: Stock Connect & MSCI/FTSE Eligibility

By Brian Freitas

  • Nearing the end of the review period, we expect there will be 18 changes to the SSE180 Index in December. The first-order impact on the stocks is not large.
  • Stocks that are not currently in Buy/Sell Stock Connect will be added to the list. That makes them eligible for inclusion in the MSCI and FTSE indices in February/March.
  • We see 6 of the potential/close adds being added to the MSCI China Index in February and 8 of the potential/close adds being added to the FTSE All-World/All-Cap in March.

K Car Lockup – Small Stock with a Big Lockup – Money Recouped, Any Price Is a Good Price to Sell

By Sumeet Singh

  • K Car completed its IPO in South Korea in Oct 21. It raised around US$300m after having downsized the offering and cut the asking price to below the IPO range. 
  • K Car is a used car marketplace and dealership operating in South Korea.
  • In this note, we will talk about the recent updates and the upcoming lockup expiry.

SAMG Entertainment IPO Preview

By Douglas Kim

  • SAMG Entertainment is getting ready for an IPO on the KOSDAQ market. SAMG Entertainment is a leading children animation and digital contents focused entertainment company targeting young children.
  • The IPO offering amount is from 37.8 billion won to 46.7 billion won. The book building for the institutional investors starts on 1 November.
  • The company operates 42 Youtube channels including 15 domestic channels and 27 overseas channels. The total number of subscribers for these 42 Youtube channels exceeds 39 million.

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