Smartkarma Daily Briefs

Nearing the completion of 60% of the review period, there could be two changes for the BSE SENSEX Index (SENSEX INDEX) at the June rebalance.
With one stock right at the cusp of deletion from the index, there could be a third change too. Sector balance will be used to decide the list of inclusions.
The forecast adds outperformed the forecast deletes in the back end of 2024 but there has been huge underperformance this calendar year as stocks with nosebleed valuations have sold off.

EQD | Nifty Index Options Weekly (February 10 – 14): Tactical Hedge into Weak Seasonals

Nifty mired in long downtrend with unfavorable seasonals directly ahead.
Weak price action, with all 5 days trading lower pulls implied vols higher by 1.5 points.
We examine the poor seasonal performance heading into the end of the month and recommend a tactical hedge.

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Feb 17

Daily Brief China: Alibaba Group Holding , GDS Holdings (ADR), Hang Seng Index, Hang Seng China Enterprises Index, China Mobile, Mixue Group, Contemporary Amperex Technology (CATL), HKBN Ltd and more

By Smartkarma Daily Briefs | China, Daily Briefs

In today’s briefing:

Alibaba (9988 HK): Results This Week; Over US$1bn Passive Selling in 3 Weeks
Implication of Deepseek on China Data Centers: Buy GDS and VNET, Not Too Late to Chase the Rally!
EQD| HSI: 99th Percentile 2-Week Move on Low Volatility. What’s Next?
EQD| HSCEI Index Options Weekly (Feb 10-14): Tactical Hedges for an Extended Rally
EQD| HSI Index Options Weekly (Feb 10-14): Reduce Positions with Short Volatility Edge
EQD | China Mobile (941 HK) – Four Option Strategies for the Extended Bull Run.
MIXUE Group IPO: The Leading Player that Justifies a Premium
ECM Weekly (17th Feb 2025) – CATL, Hengrui, Mixue, Guming, Hexaware, Ajax, Aegis, Daiichi, Takasago
Merger Arb Mondays (17 Feb) – HKBN, Fosun Tourism, Get Nice, 7&I, Shibaura, Kaonavi, Paragon

Alibaba (9988 HK): Results This Week; Over US$1bn Passive Selling in 3 Weeks

Alibaba Group Holding (9988 HK) stock has rallied bigly over the last month and has gained 55% over that period.
That has led to Alibaba‘s weight in the HSI INDEX, HSCEI INDEX, HSTECH INDEX and HSIII Index rising above the cap of 8%/12% and passives will sell on 7 March.
We estimate passive trackers will need to sell US$1.2bn of stock due to capping. Shorts have been increasing, and quarterly results will be announced on 20 February.

Implication of Deepseek on China Data Centers: Buy GDS and VNET, Not Too Late to Chase the Rally!

By Jacob Cheng

We believe the recent launches of AI Model will challenge the assumptions of AI training costs, and we are still in early stages of AI revolution
It will maintain a sustainable growth of AI infrastructure like data centers, instead of reducing the demand. GDS and VNET are well positioned to capture this tailwind
VNET and GDS were up 303% and 268% for last 12 months, we think it is not too late to chase the rally

EQD| HSI: 99th Percentile 2-Week Move on Low Volatility. What’s Next?

HSI’s 10-day return of 11.84% ranks it just below the 99th percentile of all 10-day moves since 2000.
This move has been unusual given the low level of historic volatility, ranking it as one of the lowest vol moves of this magnitude.
The current move is abnormal for its return relative to volatility – we dig deeper into how returns and volatility are likely to evolve.

EQD| HSCEI Index Options Weekly (Feb 10-14): Tactical Hedges for an Extended Rally

HSCEI sets new 52-week high by a hair. Rally over the last 10 days ranks in the 97th percentile since 2000.
Spot and implied maintain a positive correlation which will see implieds come off should this rally reverse course.
We recommend two trades for those looking to tactically lighten positions into the rally.

EQD| HSI Index Options Weekly (Feb 10-14): Reduce Positions with Short Volatility Edge

Rally over the past 2 weeks has landed it in the 99th percentile since 2000 and has also been accompanied by low volatility.
The up-trend has a number of characteristics similar to the 21% rally in May 2024 and is in line with levels from which market has failed to advance.
Given how price and vol are likely to evolve over the next month we suggest tactical positions to reduce position size

EQD | China Mobile (941 HK) – Four Option Strategies for the Extended Bull Run.

By Gaudenz Schneider

China Mobile (941 HK) experienced a 6.8% increase over five consecutive positive weeks. This Insight builds on the work of quantitative analysis identifying resistance and support levels.
This Insight presents four different options strategies to combine quantitative insights with volatility and option analysis.
Option strategies cater for both bullish, bearish, or neutral views, and can be tailored to fit a given risk budget.

MIXUE Group IPO: The Leading Player that Justifies a Premium

By Osbert Tang, CFA

Mixue Group (MIX HK) has a whopping market share of 32.7% in 2023, based on number of cups sold. It also has the highest profit in the sector.
With a strong profit record and net cash, it is a leader that captures industry growth. Its extensive network targets low-tier cities’ potential and the franchise model drives expansion.
It justifies trading on a premium to sector average PER of 19.6x for FY25. If aligning P/B with ROE on the best-fit line, it should be priced at 5.1x pre-money.

ECM Weekly (17th Feb 2025) – CATL, Hengrui, Mixue, Guming, Hexaware, Ajax, Aegis, Daiichi, Takasago

By Sumeet Singh

Aequitas Research’s weekly update on the IPOs, placements, lockup expiry and other ECM linked events that were covered by the team over the past week.
On the IPO front, while Guming Holdings (1364 HK) added to the list of disaapointing tea chain, MIXUE is said to be gearing up for a launch soon.
On the placements front, there were two smallish deals in Japan.

Merger Arb Mondays (17 Feb) – HKBN, Fosun Tourism, Get Nice, 7&I, Shibaura, Kaonavi, Paragon

We summarise the latest spreads and newsflow of merger arb situations we cover across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
Highest spreads: Kaonavi Inc (4435 JP), Lifestyle China (2136 HK), Seven & I Holdings (3382 JP), Smart Share Global (EM US), ESR Group (1821 HK), Vesync (2148 HK).
Lowest spreads: Makino Milling Machine Co (6135 JP), Shibaura Electronics (6957 JP), Millennium & Copthorne Hotels Nz (MCK NZ), Avjennings Ltd (AVJ AU), Insignia Financial (IFL AU).

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Feb 17

Daily Brief Japan: Shift Inc, Zenhoren , Trend Micro Inc, Kokusai Electric , Freee KK, Nikkei 225, Soliton Systems Kk, Kokuyo Co Ltd, J Trust Co Ltd and more

By Smartkarma Daily Briefs | Daily Briefs, Japan

In today’s briefing:

Nikkei 225 Index Rebalance: Performance of Potential Adds/Deletes & Positioning
MUFG Partial Offer by MUFG to Buy ~50% of Small Cap Zenhoren (5845) – Watch the Back End
Weekly Deals Digest (16 Feb) – Trend Micro, Zenhoren, HKBN, Fosun Tourism, Paragon REIT, CATL
[Quiddity Index Feb25] Nikkei 225 Mar Rebal: 2 or 3 IN, 2 or 3 OUT, ~$3bn 1-Way, 1 Squeeze.
High Conviction 2025 – Freee: Earnings Beat with Upward Revision to Profit Guidance
EQD | Nikkei Index Options Weekly (February 10 – 14): Mired in Sideways Range
Soliton Systems Kk (3040 JP): Full-year FY12/24 flash update
Kokuyo Co Ltd (7984 JP): Full-year FY12/24 flash update
J Trust Co Ltd (8508 JP): Full-year FY12/24 flash update

Nikkei 225 Index Rebalance: Performance of Potential Adds/Deletes & Positioning

The changes to the Nikkei 225 (NKY INDEX) as part of the March rebalance should be announced in just over 2 weeks. We expect 2-3 changes at the review.
The forecast adds have massively outperformed the forecast deletes and the Nikkei225 Index over every time period going back 3 months with the largest outperformance in the last month.
Positioning appears to be stretched in one forecast add while there appears to be under positioning in a couple of the forecast deletes.

MUFG Partial Offer by MUFG to Buy ~50% of Small Cap Zenhoren (5845) – Watch the Back End

Friday after the close, Mitsubishi UFJ Financial (MUFG) (8306 JP) announced a partial offer to buy up to 13.026385mm shares (minimum 11.661185mm shs) of rent guarantor Zenhoren (5845 JP).
That is 49.6% but an MUFJ sub already owns 1.46%. The offer comes at a 32% premium to last. Two holders with 33.59% of the register have agreed to tender.
This will turn the company into a consolidated subsidiary of MUFG under MUFJ Nicos, the group’s consumer credit subsidiary. Shareholder structure matters. Watch the back end.

Weekly Deals Digest (16 Feb) – Trend Micro, Zenhoren, HKBN, Fosun Tourism, Paragon REIT, CATL

A weekly summary of key developments across ECM and Event-Driven names tracked by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Thailand, Korea, India and Chinese ADRs.
ECM developments: Contemporary Amperex Technology (CATL) (300750 CH) filed for an H Share listing to raise US$5 billion, and Hexaware Technologies (HEXW IN) seeks to raise US$1 billion.
Event-Driven developments: Trend Micro Inc (4704 JP), Kaonavi Inc (4435 JP), Zenhoren (5845 JP), HKBN Ltd (1310 HK), Fosun Tourism (1992 HK), Paragon REIT (PGNREIT SP).

[Quiddity Index Feb25] Nikkei 225 Mar Rebal: 2 or 3 IN, 2 or 3 OUT, ~$3bn 1-Way, 1 Squeeze.

By Shifara Samsudeen, ACMA, CGMA

The data observation period is done. No rank changes in the top candidates since mid-Jan. Capping for Fast Retailing (9983 JP) is confirmed.
For me, it is 2 or 3 ADDs, depending. Kokusai Electric (6525 JP) is still tops. BayCurrent Consulting (6532 JP) second. Shift Inc (3697 JP) third.
Kokusai is +26.7% in 5 weeks since I wrote bullishly, despite news/confirmation of getting the boot from a global index at end-Feb. Baycurrent is +39.7% (link). Now we count flows.

High Conviction 2025 – Freee: Earnings Beat with Upward Revision to Profit Guidance

Freee KK (4478 JP) reported 2QFY06/2025 results on Friday which beat consensus estimates. The company also reported a second consecutive quarter of operating profits in 2Q.
Despite cutting down significantly on selling and marketing, freee has managed to maintain growth. The company also has revised upwards its OP guidance and expects positive adj. free cashflows.
Though freee’s share price has moved up 35% YTD, strengthening profitability and its solid business model vs Money Forward (3994 JP) should further drive share price up.

EQD | Nikkei Index Options Weekly (February 10 – 14): Mired in Sideways Range

USD/JPY more volatile relative to Nikkei, trading in a 2.3% range on the week and historic vol continuing to climb compressing the hv spread.
Nikkei is trading at the mid-point of the sideways range it’s been in since the end of September.
Most heavily traded strikes were at the top and bottom of the sideways range.

Soliton Systems Kk (3040 JP): Full-year FY12/24 flash update

In FY12/24, Soliton’s revenue was JPY18.6bn (-2.4% YoY), with operating profit at JPY2.0bn (-21.7% YoY).
Soliton forecasts FY12/25 revenue of JPY19.5bn (+4.8% YoY) and operating profit of JPY2.2bn (+7.7% YoY).
Personnel expenses are expected to rise, with JPY50mn planned for office improvements, including SG&A and fixed assets.

Kokuyo Co Ltd (7984 JP): Full-year FY12/24 flash update

Revenue increased by 2.9% YoY to JPY338.2bn, with net income rising 14.3% YoY to JPY21.8bn.
The FY12/25 forecast predicts revenue of JPY366.0bn (+8.2% YoY) and operating profit of JPY24.0bn (+9.0% YoY).
The company plans an annual dividend per share of JPY91.0, targeting a consolidated payout ratio of 50.1%.

J Trust Co Ltd (8508 JP): Full-year FY12/24 flash update

Operating revenue reached JPY128.2bn, a 12.2% YoY increase, driven by growth in financial and real estate businesses.
Profit attributable to owners decreased 63.0% YoY to JPY6.0bn, impacted by deferred tax liabilities reversal from a merger.
FY12/25 forecasts JPY135.1bn operating revenue, JPY11.1bn operating profit, and JPY6.5bn profit attributable to owners.

Before it’s here, it’s on Smartkarma

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

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✓ Personalised Alerts
✓ Custom Watchlists
✓ Company Data and News
✓ Events & Webinars

Feb 17

Most Read: JX Advanced Metals, Shift Inc, Zenhoren , Alibaba Group Holding , Japan Eyewear Holdings , Samsung Electronics Pref Shares, Trend Micro Inc, Samsung Electronics, Kokusai Electric and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

JX Advanced Metals (5016 JP) IPO: TPX Add in April; Global Idx: One in August; One in March or Sep
Nikkei 225 Index Rebalance: Performance of Potential Adds/Deletes & Positioning
MUFG Partial Offer by MUFG to Buy ~50% of Small Cap Zenhoren (5845) – Watch the Back End
Alibaba (9988 HK): Results This Week; Over US$1bn Passive Selling in 3 Weeks
Japan Eyewear Cancels Offering and TSE Prime Application on Internal Controls Problem – OFF
FSS Officially Rolls Out New Ex-Div Rule for Quarterly Divs; Sammy May Finally Join the Change
Weekly Deals Digest (16 Feb) – Trend Micro, Zenhoren, HKBN, Fosun Tourism, Paragon REIT, CATL
Samsung’s 10T KRW Buyback Phase 2: The Timing of the Drop and How the Structure Is Looking
[Quiddity Index Feb25] Nikkei 225 Mar Rebal: 2 or 3 IN, 2 or 3 OUT, ~$3bn 1-Way, 1 Squeeze.
Zenhoren (5845 JP): MUFG (8306 JP)’s Partial Tender Offer

JX Advanced Metals (5016 JP) IPO: TPX Add in April; Global Idx: One in August; One in March or Sep

JX Advanced Metals (5016 JP)‘s listing has been approved by the JPX and the stock is expected to start trading on the Prime Market from 19 March.
At the indicative IPO price of JPY 862/share, JX Advanced Metals (5016 JP) will be valued at JPY 800bn (US$5.25bn).
The stock should be added to the TOPIX INDEX at the close on 28 April while timing of inclusion in global indices will depend on domestic/overseas allocations and price moves.

Nikkei 225 Index Rebalance: Performance of Potential Adds/Deletes & Positioning

The changes to the Nikkei 225 (NKY INDEX) as part of the March rebalance should be announced in just over 2 weeks. We expect 2-3 changes at the review.
The forecast adds have massively outperformed the forecast deletes and the Nikkei225 Index over every time period going back 3 months with the largest outperformance in the last month.
Positioning appears to be stretched in one forecast add while there appears to be under positioning in a couple of the forecast deletes.

MUFG Partial Offer by MUFG to Buy ~50% of Small Cap Zenhoren (5845) – Watch the Back End

Friday after the close, Mitsubishi UFJ Financial (MUFG) (8306 JP) announced a partial offer to buy up to 13.026385mm shares (minimum 11.661185mm shs) of rent guarantor Zenhoren (5845 JP).
That is 49.6% but an MUFJ sub already owns 1.46%. The offer comes at a 32% premium to last. Two holders with 33.59% of the register have agreed to tender.
This will turn the company into a consolidated subsidiary of MUFG under MUFJ Nicos, the group’s consumer credit subsidiary. Shareholder structure matters. Watch the back end.

Alibaba (9988 HK): Results This Week; Over US$1bn Passive Selling in 3 Weeks

Alibaba Group Holding (9988 HK) stock has rallied bigly over the last month and has gained 55% over that period.
That has led to Alibaba‘s weight in the HSI INDEX, HSCEI INDEX, HSTECH INDEX and HSIII Index rising above the cap of 8%/12% and passives will sell on 7 March.
We estimate passive trackers will need to sell US$1.2bn of stock due to capping. Shorts have been increasing, and quarterly results will be announced on 20 February.

Japan Eyewear Cancels Offering and TSE Prime Application on Internal Controls Problem – OFF

On Friday after the close, Japan Eyewear Holdings (5889 JP) made a short announcement that it would cancel its equity offering and TSE Prime application announced 10 Feb, discussed here.
I had suggested that the offering price, or a large dip would be a buy. I rescind that recommendation immediately.
The reason for the cancellation? “Matters that need to be confirmed in relation to our internal control system have been discovered and that will take time.”

FSS Officially Rolls Out New Ex-Div Rule for Quarterly Divs; Sammy May Finally Join the Change

By Sanghyun Park

Starting this year, both year-end and interim divvies follow the new rule, with ex-div dates set after the payout is confirmed.
Quarterly dividend arbitrage will heat up, especially for high-yield bank stocks, attracting traders to cash in on the spread.
Samsung Electronics is likely to update bylaws at the March AGM, with Q1 payout ex-div dates set after the dividend is confirmed.

Weekly Deals Digest (16 Feb) – Trend Micro, Zenhoren, HKBN, Fosun Tourism, Paragon REIT, CATL

A weekly summary of key developments across ECM and Event-Driven names tracked by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Thailand, Korea, India and Chinese ADRs.
ECM developments: Contemporary Amperex Technology (CATL) (300750 CH) filed for an H Share listing to raise US$5 billion, and Hexaware Technologies (HEXW IN) seeks to raise US$1 billion.
Event-Driven developments: Trend Micro Inc (4704 JP), Kaonavi Inc (4435 JP), Zenhoren (5845 JP), HKBN Ltd (1310 HK), Fosun Tourism (1992 HK), Paragon REIT (PGNREIT SP).

Samsung’s 10T KRW Buyback Phase 2: The Timing of the Drop and How the Structure Is Looking

By Sanghyun Park

The 2nd phase of the buyback, around 3T KRW with a 3-month window, could drop this week, likely by mid- or end-week.
The market’s worried Samsung might not retire the shares this time and could handle them differently.
The latest talk is that Samsung will retire the shares immediately, like Phase 1. This could be an inflection point for solid short-term price action—time to set up positions.

[Quiddity Index Feb25] Nikkei 225 Mar Rebal: 2 or 3 IN, 2 or 3 OUT, ~$3bn 1-Way, 1 Squeeze.

The data observation period is done. No rank changes in the top candidates since mid-Jan. Capping for Fast Retailing (9983 JP) is confirmed.
For me, it is 2 or 3 ADDs, depending. Kokusai Electric (6525 JP) is still tops. BayCurrent Consulting (6532 JP) second. Shift Inc (3697 JP) third.
Kokusai is +26.7% in 5 weeks since I wrote bullishly, despite news/confirmation of getting the boot from a global index at end-Feb. Baycurrent is +39.7% (link). Now we count flows.

Zenhoren (5845 JP): MUFG (8306 JP)’s Partial Tender Offer

Zenhoren (5845 JP) announced a partial tender offer and capital and business agreement from Mitsubishi UFJ Financial (MUFG) (8306 JP). MUFG aims to make Zenhoren a consolidated subsidiary.
The offer is for a minimum of 11.7m shares (44.36% ownership ratio) and a maximum of 13.0m shares (49.55% ownership ratio) at JPY1,000, a 31.9% premium to the last close.
Due to the irrevocable, the minimum acceptance condition requires a minority acceptance rate of 16.6%. This threshold is achievable, as the offer is reasonable.

Before it’s here, it’s on Smartkarma

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

✓ Unlimited Research Summaries
✓ Personalised Alerts
✓ Custom Watchlists
✓ Company Analytics and News
✓ Events & Webinars

Feb 17

Daily Brief Industrials: Contemporary Amperex Technology (CATL), Kokuyo Co Ltd and more

By Smartkarma Daily Briefs | Daily Briefs, Industrials

In today’s briefing:

ECM Weekly (17th Feb 2025) – CATL, Hengrui, Mixue, Guming, Hexaware, Ajax, Aegis, Daiichi, Takasago
Kokuyo Co Ltd (7984 JP): Full-year FY12/24 flash update

ECM Weekly (17th Feb 2025) – CATL, Hengrui, Mixue, Guming, Hexaware, Ajax, Aegis, Daiichi, Takasago

By Sumeet Singh

Aequitas Research’s weekly update on the IPOs, placements, lockup expiry and other ECM linked events that were covered by the team over the past week.
On the IPO front, while Guming Holdings (1364 HK) added to the list of disaapointing tea chain, MIXUE is said to be gearing up for a launch soon.
On the placements front, there were two smallish deals in Japan.

Kokuyo Co Ltd (7984 JP): Full-year FY12/24 flash update

Revenue increased by 2.9% YoY to JPY338.2bn, with net income rising 14.3% YoY to JPY21.8bn.
The FY12/25 forecast predicts revenue of JPY366.0bn (+8.2% YoY) and operating profit of JPY24.0bn (+9.0% YoY).
The company plans an annual dividend per share of JPY91.0, targeting a consolidated payout ratio of 50.1%.

Before it’s here, it’s on Smartkarma

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

Feb 17

Daily Brief TMT/Internet: Shift Inc, Samsung Electronics Pref Shares, Trend Micro Inc, Kokusai Electric , GDS Holdings (ADR), Hang Seng Index, Hang Seng China Enterprises Index, China Mobile, Freee KK and more

By Smartkarma Daily Briefs | Daily Briefs, TMT/Internet

In today’s briefing:

Nikkei 225 Index Rebalance: Performance of Potential Adds/Deletes & Positioning
FSS Officially Rolls Out New Ex-Div Rule for Quarterly Divs; Sammy May Finally Join the Change
Weekly Deals Digest (16 Feb) – Trend Micro, Zenhoren, HKBN, Fosun Tourism, Paragon REIT, CATL
[Quiddity Index Feb25] Nikkei 225 Mar Rebal: 2 or 3 IN, 2 or 3 OUT, ~$3bn 1-Way, 1 Squeeze.
Implication of Deepseek on China Data Centers: Buy GDS and VNET, Not Too Late to Chase the Rally!
EQD| HSI: 99th Percentile 2-Week Move on Low Volatility. What’s Next?
EQD| HSCEI Index Options Weekly (Feb 10-14): Tactical Hedges for an Extended Rally
EQD| HSI Index Options Weekly (Feb 10-14): Reduce Positions with Short Volatility Edge
EQD | China Mobile (941 HK) – Four Option Strategies for the Extended Bull Run.
High Conviction 2025 – Freee: Earnings Beat with Upward Revision to Profit Guidance

Nikkei 225 Index Rebalance: Performance of Potential Adds/Deletes & Positioning

The changes to the Nikkei 225 (NKY INDEX) as part of the March rebalance should be announced in just over 2 weeks. We expect 2-3 changes at the review.
The forecast adds have massively outperformed the forecast deletes and the Nikkei225 Index over every time period going back 3 months with the largest outperformance in the last month.
Positioning appears to be stretched in one forecast add while there appears to be under positioning in a couple of the forecast deletes.

FSS Officially Rolls Out New Ex-Div Rule for Quarterly Divs; Sammy May Finally Join the Change

By Sanghyun Park

Starting this year, both year-end and interim divvies follow the new rule, with ex-div dates set after the payout is confirmed.
Quarterly dividend arbitrage will heat up, especially for high-yield bank stocks, attracting traders to cash in on the spread.
Samsung Electronics is likely to update bylaws at the March AGM, with Q1 payout ex-div dates set after the dividend is confirmed.

Weekly Deals Digest (16 Feb) – Trend Micro, Zenhoren, HKBN, Fosun Tourism, Paragon REIT, CATL

A weekly summary of key developments across ECM and Event-Driven names tracked by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Thailand, Korea, India and Chinese ADRs.
ECM developments: Contemporary Amperex Technology (CATL) (300750 CH) filed for an H Share listing to raise US$5 billion, and Hexaware Technologies (HEXW IN) seeks to raise US$1 billion.
Event-Driven developments: Trend Micro Inc (4704 JP), Kaonavi Inc (4435 JP), Zenhoren (5845 JP), HKBN Ltd (1310 HK), Fosun Tourism (1992 HK), Paragon REIT (PGNREIT SP).

[Quiddity Index Feb25] Nikkei 225 Mar Rebal: 2 or 3 IN, 2 or 3 OUT, ~$3bn 1-Way, 1 Squeeze.

The data observation period is done. No rank changes in the top candidates since mid-Jan. Capping for Fast Retailing (9983 JP) is confirmed.
For me, it is 2 or 3 ADDs, depending. Kokusai Electric (6525 JP) is still tops. BayCurrent Consulting (6532 JP) second. Shift Inc (3697 JP) third.
Kokusai is +26.7% in 5 weeks since I wrote bullishly, despite news/confirmation of getting the boot from a global index at end-Feb. Baycurrent is +39.7% (link). Now we count flows.

Implication of Deepseek on China Data Centers: Buy GDS and VNET, Not Too Late to Chase the Rally!

By Jacob Cheng

We believe the recent launches of AI Model will challenge the assumptions of AI training costs, and we are still in early stages of AI revolution
It will maintain a sustainable growth of AI infrastructure like data centers, instead of reducing the demand. GDS and VNET are well positioned to capture this tailwind
VNET and GDS were up 303% and 268% for last 12 months, we think it is not too late to chase the rally

EQD| HSI: 99th Percentile 2-Week Move on Low Volatility. What’s Next?

HSI’s 10-day return of 11.84% ranks it just below the 99th percentile of all 10-day moves since 2000.
This move has been unusual given the low level of historic volatility, ranking it as one of the lowest vol moves of this magnitude.
The current move is abnormal for its return relative to volatility – we dig deeper into how returns and volatility are likely to evolve.

EQD| HSCEI Index Options Weekly (Feb 10-14): Tactical Hedges for an Extended Rally

HSCEI sets new 52-week high by a hair. Rally over the last 10 days ranks in the 97th percentile since 2000.
Spot and implied maintain a positive correlation which will see implieds come off should this rally reverse course.
We recommend two trades for those looking to tactically lighten positions into the rally.

EQD| HSI Index Options Weekly (Feb 10-14): Reduce Positions with Short Volatility Edge

By Shifara Samsudeen, ACMA, CGMA

Rally over the past 2 weeks has landed it in the 99th percentile since 2000 and has also been accompanied by low volatility.
The up-trend has a number of characteristics similar to the 21% rally in May 2024 and is in line with levels from which market has failed to advance.
Given how price and vol are likely to evolve over the next month we suggest tactical positions to reduce position size

EQD | China Mobile (941 HK) – Four Option Strategies for the Extended Bull Run.

By Gaudenz Schneider

China Mobile (941 HK) experienced a 6.8% increase over five consecutive positive weeks. This Insight builds on the work of quantitative analysis identifying resistance and support levels.
This Insight presents four different options strategies to combine quantitative insights with volatility and option analysis.
Option strategies cater for both bullish, bearish, or neutral views, and can be tailored to fit a given risk budget.

High Conviction 2025 – Freee: Earnings Beat with Upward Revision to Profit Guidance

Freee KK (4478 JP) reported 2QFY06/2025 results on Friday which beat consensus estimates. The company also reported a second consecutive quarter of operating profits in 2Q.
Despite cutting down significantly on selling and marketing, freee has managed to maintain growth. The company also has revised upwards its OP guidance and expects positive adj. free cashflows.
Though freee’s share price has moved up 35% YTD, strengthening profitability and its solid business model vs Money Forward (3994 JP) should further drive share price up.

Before it’s here, it’s on Smartkarma

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

Feb 17

Daily Brief Industrials: Contemporary Amperex Technology (CATL), Kokuyo Co Ltd and more

By Smartkarma Daily Briefs | Daily Briefs, Industrials

In today’s briefing:

ECM Weekly (17th Feb 2025) – CATL, Hengrui, Mixue, Guming, Hexaware, Ajax, Aegis, Daiichi, Takasago
Kokuyo Co Ltd (7984 JP): Full-year FY12/24 flash update

ECM Weekly (17th Feb 2025) – CATL, Hengrui, Mixue, Guming, Hexaware, Ajax, Aegis, Daiichi, Takasago

By Sumeet Singh

Aequitas Research’s weekly update on the IPOs, placements, lockup expiry and other ECM linked events that were covered by the team over the past week.
On the IPO front, while Guming Holdings (1364 HK) added to the list of disaapointing tea chain, MIXUE is said to be gearing up for a launch soon.
On the placements front, there were two smallish deals in Japan.

Kokuyo Co Ltd (7984 JP): Full-year FY12/24 flash update

Revenue increased by 2.9% YoY to JPY338.2bn, with net income rising 14.3% YoY to JPY21.8bn.
The FY12/25 forecast predicts revenue of JPY366.0bn (+8.2% YoY) and operating profit of JPY24.0bn (+9.0% YoY).
The company plans an annual dividend per share of JPY91.0, targeting a consolidated payout ratio of 50.1%.

Before it’s here, it’s on Smartkarma

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

Feb 17

Daily Brief Consumer: Alibaba Group Holding , Nestle India, Mixue Group, Thai Beverage and more

By Smartkarma Daily Briefs | Consumer, Daily Briefs

In today’s briefing:

Alibaba (9988 HK): Results This Week; Over US$1bn Passive Selling in 3 Weeks
SENSEX Index Rebalance Preview: Two Changes for Now; Third Change at the Cusp
MIXUE Group IPO: The Leading Player that Justifies a Premium
Thai Beverage: In Low Spirits. Now a Low- Risk Dividend Play

Alibaba (9988 HK): Results This Week; Over US$1bn Passive Selling in 3 Weeks

Alibaba Group Holding (9988 HK) stock has rallied bigly over the last month and has gained 55% over that period.
That has led to Alibaba‘s weight in the HSI INDEX, HSCEI INDEX, HSTECH INDEX and HSIII Index rising above the cap of 8%/12% and passives will sell on 7 March.
We estimate passive trackers will need to sell US$1.2bn of stock due to capping. Shorts have been increasing, and quarterly results will be announced on 20 February.

SENSEX Index Rebalance Preview: Two Changes for Now; Third Change at the Cusp

Nearing the completion of 60% of the review period, there could be two changes for the BSE SENSEX Index (SENSEX INDEX) at the June rebalance.
With one stock right at the cusp of deletion from the index, there could be a third change too. Sector balance will be used to decide the list of inclusions.
The forecast adds outperformed the forecast deletes in the back end of 2024 but there has been huge underperformance this calendar year as stocks with nosebleed valuations have sold off.

MIXUE Group IPO: The Leading Player that Justifies a Premium

By Osbert Tang, CFA

Mixue Group (MIX HK) has a whopping market share of 32.7% in 2023, based on number of cups sold. It also has the highest profit in the sector.
With a strong profit record and net cash, it is a leader that captures industry growth. Its extensive network targets low-tier cities’ potential and the franchise model drives expansion.
It justifies trading on a premium to sector average PER of 19.6x for FY25. If aligning P/B with ROE on the best-fit line, it should be priced at 5.1x pre-money.

Thai Beverage: In Low Spirits. Now a Low- Risk Dividend Play

By Devi Subhakesan

Thai Beverage (THBEV SP) reported marginal revenue growth and a slight decline in EBITDA for the December quarter (1QFY25), even as its spirits segment experienced a sharper drop in both.
With its primarily Thailand-based spirits segment seemingly in a structural decline, growth in other segments must offset the impact on overall sales.
With limited potential to unlock value from its beer division, particularly amid the sharp decline in BeerCo’s valuations, Thai Bev seems increasingly off investors’ radar.

Before it’s here, it’s on Smartkarma

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

Feb 17

Daily Brief Financials: Zenhoren , Nikkei 225, NIFTY Index, Philippine Stock Exchange, J Trust Co Ltd and more

By Smartkarma Daily Briefs | Daily Briefs, Financials

In today’s briefing:

MUFG Partial Offer by MUFG to Buy ~50% of Small Cap Zenhoren (5845) – Watch the Back End
EQD | Nikkei Index Options Weekly (February 10 – 14): Mired in Sideways Range
EQD | Nifty Index Options Weekly (February 10 – 14): Tactical Hedge into Weak Seasonals
Shortlist of High Conviction Philippines Equity Ideas – February 2025
J Trust Co Ltd (8508 JP): Full-year FY12/24 flash update

MUFG Partial Offer by MUFG to Buy ~50% of Small Cap Zenhoren (5845) – Watch the Back End

Friday after the close, Mitsubishi UFJ Financial (MUFG) (8306 JP) announced a partial offer to buy up to 13.026385mm shares (minimum 11.661185mm shs) of rent guarantor Zenhoren (5845 JP).
That is 49.6% but an MUFJ sub already owns 1.46%. The offer comes at a 32% premium to last. Two holders with 33.59% of the register have agreed to tender.
This will turn the company into a consolidated subsidiary of MUFG under MUFJ Nicos, the group’s consumer credit subsidiary. Shareholder structure matters. Watch the back end.

EQD | Nikkei Index Options Weekly (February 10 – 14): Mired in Sideways Range

USD/JPY more volatile relative to Nikkei, trading in a 2.3% range on the week and historic vol continuing to climb compressing the hv spread.
Nikkei is trading at the mid-point of the sideways range it’s been in since the end of September.
Most heavily traded strikes were at the top and bottom of the sideways range.

EQD | Nifty Index Options Weekly (February 10 – 14): Tactical Hedge into Weak Seasonals

Nifty mired in long downtrend with unfavorable seasonals directly ahead.
Weak price action, with all 5 days trading lower pulls implied vols higher by 1.5 points.
We examine the poor seasonal performance heading into the end of the month and recommend a tactical hedge.

Shortlist of High Conviction Philippines Equity Ideas – February 2025

By Sameer Taneja

We are gradually building a high-conviction coverage of ideas for the mid and small-caps in the Philippines.
We set criteria for high ROCE, reasonable growth (10-15% YoY), strong balance sheets, and reasonable capital allocation (dividend yields), all ingredients for being multi-baggers.
Figaro Coffee (FCG PM) has been added due to its >20% ROCE, 7x PE, and strong growth potential. We will initiate coverage on it shortly with an insight.

J Trust Co Ltd (8508 JP): Full-year FY12/24 flash update