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Smartkarma Daily Briefs

Apr 20
0

Daily Brief Consumer: Giant Biogene and more

By | Consumer, Daily Briefs

In today’s briefing:

  • China Healthcare Weekly (Apr.20)- Giant Biogene Announced a HK$2.3bn Placement, China’s VBP Outlook

China Healthcare Weekly (Apr.20)- Giant Biogene Announced a HK$2.3bn Placement, China’s VBP Outlook

By Xinyao (Criss) Wang

  • With policy optimization and market adjustment, the VBP will pay more attention to the balance between quality, supply, and price. So, we think malignant price competition would be avoided.
  • By 2025, the VBP of biosimilar drugs will gradually cover the major categories such as monoclonal antibody, growth hormone and blood products, with an average price reduction of 30%-50%
  • Giant Biogene announced a HK$2.294 billion placement with Placing Price of HK$66.65/Share. Investment logic/fundamentals will change after Class III medical device is approved.Based on 2025-2027 forecast, growth will remain strong.

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Apr 20
0

Most Read: PDD Holdings, Shanghai Shenzhen CSI 300 Index, Northern Star Resources, Suzhou Kematek, Chagee Holdings, Shibaura Electronics, Topcon Corp, TRYT , TSE Tokyo Price Index TOPIX and more

By | Daily Briefs, Most Read

In today’s briefing:

  • What if China ADRs Are Delisted from US Exchanges?
  • China ETF Inflows & Implications: Central Huijin’s Huge Buying
  • De Grey Mining/Northern Star Resources: The Passive Flows
  • CES China Semiconductor Chips Index Rebalance Preview: Multiple Adds for Some Stocks Increase Flow
  • Chagee Holdings (CHA US) IPO: Global Index Inclusion Timeline
  • Yageo Bigly Overbids Minebea (+20%) For Shibaura Elec (6957) At ¥5400
  • [Japan Activism] – ValueAct Agrees to Tender to KKR Topcon (7732) Tender and Join As Buyer
  • TRYT (9164) – Limit Up On Report of Round 2 Bidding; A Growth Multiple Gets You a High Price
  • The Key to Japanese Equity Outperformance Is a Step Beyond Shareholder Returns
  • Tryt (9164 JP): Take Profits as Takeover Speculation Swirls

What if China ADRs Are Delisted from US Exchanges?

By Brian Freitas

  • We see 281 Chinese companies listed on U.S Stock Exchanges with a total market cap of US$869bn. 32 of these companies are listed on the HKEX (388 HK). 
  • If the rumours of Chinese stocks being delisted from U.S. Exchanges gathers steam, we could see a wave of secondary listings in Hong Kong.
  • PDD Holdings, Full Truck Alliance, Vipshop Holdings, TAL Education and ZEEKR are the largest China ADRs with no HK listing and could come under pressure.

China ETF Inflows & Implications: Central Huijin’s Huge Buying

By Brian Freitas

  • Nearly US$22bn has flowed into mainland China listed ETFs over the last 3 trading days, reversing outflows that started in mid February.
  • Central Huijin has announced that it will be increasing its ETF holdings to maintain smooth operation of China’s capital markets. The rest of the National Team will be buying too.
  • There are multiple implications of the huge ETF creations in a short time frame and a reversal of flows will lead to a reversion in a bunch of trades.

De Grey Mining/Northern Star Resources: The Passive Flows

By Brian Freitas

CES China Semiconductor Chips Index Rebalance Preview: Multiple Adds for Some Stocks Increase Flow

By Brian Freitas

  • There could be three changes for the CES China Semiconductor Chips Index at the close of trading on 13 June.
  • Based on the assets tracking the index, passive trackers will need to trade between 0.1-0.4x ADV in the stocks.
  • Bestechnic Shanghai (688608 CH) and Suzhou Kematek (301611 CH) will also have net inflows from passive trackers of other indices at the same time, adding to the flow.

Chagee Holdings (CHA US) IPO: Global Index Inclusion Timeline

By Brian Freitas

  • Chagee Holdings (CHA US) is looking to raise up to US$473m in its IPO, valuing the company at up to US$5.2bn. The offering is expected to price today, list tomorrow.
  • Media reports indicate that cornerstone investors have indicated demand for US$205m of the offering. There is no mention of a lock-up on those investors yet.
  • The stock could be added in one global index in August (with a higher probability of inclusion in November), while inclusion in the other global index is likely in December.

Yageo Bigly Overbids Minebea (+20%) For Shibaura Elec (6957) At ¥5400

By Travis Lundy

  • In February Yageo Corporation (2327 TT) made an unsolicited bid for Shibaura Electronics (6957 JP) at ¥4,300/share after getting the cold shoulder for months.
  • Minebea Mitsumi (6479 JP) was asked to bid, and they did a week ago, bidding ¥4,500/share. Yesterday the Shibaura CEO was in an article saying an overbid would be considered. 
  • Mid-Day, I boomeranged my piece, saying I thought Yageo would overbid. Today after the close, Yageo has overbid with a whopping ¥5,400/share bid, with unchanged start date of 7 May.

[Japan Activism] – ValueAct Agrees to Tender to KKR Topcon (7732) Tender and Join As Buyer

By Travis Lundy

  • Last night, Topcon Corp (7732 JP) announced that KKR had agreed a deal with ValueAct Capital who owns 14.62% of Topcon to have VAC tender shares and invest in Bidco.
  • Topcon’s Special Committee saw nothing wrong with this in terms of fairness. I think that argument needs to be investigated at a broader level. 
  • If Bidder wants 50.1% control and expects passive to agree, and Bidder gets 50.1% to join Bidco at terms, obviously, majority of minority disappears. This is an unintended loophole. 

TRYT (9164) – Limit Up On Report of Round 2 Bidding; A Growth Multiple Gets You a High Price

By Travis Lundy

  • TRYT (9164 JP) was bought by EQT years ago and IPOed on TSE Growth in July 2023 at ¥1,200/share. The shares tanked on Day 1, almost reached ¥1,000 days later.
  • Then they fell, and fell some more, reaching the ¥370s early in Q1, then again post Trump tariff announcement.  EQT still holds ~60%. Shares closed at ¥374 on 16 April.
  • In February, there were noises about EQT putting the business up for sale, reportedly seeking an offer close to ¥1,200/share. Now there are noises of a Second Round.

The Key to Japanese Equity Outperformance Is a Step Beyond Shareholder Returns

By Aki Matsumoto

  • A benefit of inflation was expected to shift from management that accumulates cash to management that proactively uses cash. However, it’s been used for shareholder returns but less for apex.
  • Hitachi is one of few companies that manage business in disciplined manner and execute the necessary growth investments. This is more result of overseas investor engagement than corporate governance reform.
  • The key to Japanese equities outperformance is whether management can change to mindset that investors want to see “positive investment and the ability to implement measures to expand corporate value.”

Tryt (9164 JP): Take Profits as Takeover Speculation Swirls

By Arun George

  • TRYT (9164 JP) shares were up 38.5% over the last two days based on a report that EQT, the controlling shareholder, had made progress in identifying bidders for its stake.
  • The exploration of the privatisation process is unsurprising, as Tryt was pre-rumour trading 69% below its JPY1,200 IPO price.
  • The upside is limited, as the last close already reflects a significant takeover premium, and a binding proposal that satisfies EQT’s price aspirations will be challenging.

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Apr 19
0

Daily Brief ESG: The Key to Japanese Equity Outperformance Is a Step Beyond Shareholder Returns and more

By | Daily Briefs, ESG

In today’s briefing:

  • The Key to Japanese Equity Outperformance Is a Step Beyond Shareholder Returns

The Key to Japanese Equity Outperformance Is a Step Beyond Shareholder Returns

By Aki Matsumoto

  • A benefit of inflation was expected to shift from management that accumulates cash to management that proactively uses cash. However, it’s been used for shareholder returns but less for apex.
  • Hitachi is one of few companies that manage business in disciplined manner and execute the necessary growth investments. This is more result of overseas investor engagement than corporate governance reform.
  • The key to Japanese equities outperformance is whether management can change to mindset that investors want to see “positive investment and the ability to implement measures to expand corporate value.”

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Apr 19
0

Daily Brief Technical Analysis: Still Bearish/Cautious; Stick With Defensives; Emerging Market Opportunities and more

By | Daily Briefs, Technical Analysis

In today’s briefing:

  • Still Bearish/Cautious; Stick With Defensives; Emerging Market Opportunities

Still Bearish/Cautious; Stick With Defensives; Emerging Market Opportunities

By Joe Jasper

  • Since late-February (2/25/25 Compass and 2/27/25 Int’l Compass) we had been expecting an 8-10% pullback to provide a buying opportunity.
  • However, after getting the 10%+ pullback, we discussed in 4/1/25 and 4/3/25 reports how we no longer saw it as a buying opportunity, and we downgraded our outlook to bearish/cautious
  • While it is possible that the lows are in, we now are looking for the ACWI-US rally to fizzle, either here at $113.50-$115 or the 200-day MA (~$118).

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Apr 19
0

Daily Brief Event-Driven: Jeju Bank: Douzone Bizon Becomes Second Largest Shareholder and more

By | Daily Briefs, Event-Driven

In today’s briefing:

  • Jeju Bank: Douzone Bizon Becomes Second Largest Shareholder

Jeju Bank: Douzone Bizon Becomes Second Largest Shareholder

By Douglas Kim

  • On 18 April, it was reported that Douzone Bizon (012510 KS) will become the second largest shareholder of Jeju Bank (006220 KS).
  • Douzone Bizon invested 57 billion won for a 14.99% stake in Jeju Bank. Through this investment, Douzone will aim to enhance the digital business of Jeju Bank.
  • This deal is likely to positively impact Jeju Bank’s shares as this capital raise is used to further invest in ERP based banking that could further boost its sales. 

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Apr 19
0

Daily Brief Equity Bottom-Up: Asia Real Estate Tracker (18-Apr-2025): Morgan Stanley buys 50% of Frasers Aussie Shed Portfolio. and more

By | Daily Briefs, Equity Bottom-Up

In today’s briefing:

  • Asia Real Estate Tracker (18-Apr-2025): Morgan Stanley buys 50% of Frasers Aussie Shed Portfolio.
  • The Beat Ideas- Time Technoplast: Driving Growth Through Innovation & Value-Added Products
  • The Beat Ideas: Vinati Organics- A Niche Giant in Specialty Chemicals
  • Mani (7730 JP): Guidance Reiterated; Dental Loosing Shine And Dented Margins Remain Concerns

Asia Real Estate Tracker (18-Apr-2025): Morgan Stanley buys 50% of Frasers Aussie Shed Portfolio.

By Asia Real Estate Tracker

  • Morgan Stanley purchases 50% stake in $380M Frasers Australian warehouse portfolio, expanding its real estate holdings.
  • CapitaLand seeks $380M China Mall REIT listing in Shanghai, showing confidence in China’s retail market.
  • China experiences moderate home price growth in March, with some cities showing signs of recovery after recent slowdowns.

The Beat Ideas- Time Technoplast: Driving Growth Through Innovation & Value-Added Products

By Sudarshan Bhandari

  • Time Technoplast (TIME IN) holds a dominant position in the industrial packaging sector, with leadership in composite cylinders, IBCs, plastic drums, benefiting from a strong global presence& high entry barriers.
  • TTL is increasingly focusing on higher-margin segments like CNG cylinders, hydrogen storage, and composite products. These initiatives offer significant scalability and margin expansion, setting up strong long-term revenue growth.
  • With strategic R&D investments, TTL is entering emerging sectors like e-mobility (e-rickshaw batteries) and hydrogen fuel cylinders, tapping into new high-growth markets that could diversify revenue and fuel sustainable growth.

The Beat Ideas: Vinati Organics- A Niche Giant in Specialty Chemicals

By Sudarshan Bhandari

  • Vinati Organics (VO IN) dominates the global market with a 65% share in ATBS and IBB, offering strong profitability driven by high-demand sectors like water treatment and pharmaceuticals.
  • With a INR570 crore capex investment, Vinati is expanding its ATBS capacity by 50%, diversifying into high-growth segments such as MEHQ, Guaiacol, and Antioxidants, positioning itself for long-term revenue growth.
  • Vinati is strategically increasing its domestic revenue share (45% of FY24 sales), while strengthening its export presence, capitalizing on India’s “Make in India” initiative and reducing currency volatility risks.

Mani (7730 JP): Guidance Reiterated; Dental Loosing Shine And Dented Margins Remain Concerns

By Tina Banerjee

  • Mani Inc (7730 JP) H1FY25 revenue rose 6.5% YoY, mainly driven by surgical segment, eyeless needles segment, while margins remained under pressure.
  • Despite the underperformance of dental segment, management reiterated FY25 guidance. Expecting Yen appreciation against the USD, the company expects just mid-single-digit sales and operating income growth for FY25.
  • Mani shares plunged 5% since it published its H1 results. Investors should avoid Mani due to its uncertain revenue outlook and deteriorating profitability in short-term.

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Apr 19
0

Daily Brief Macro: Pretexts and more

By | Daily Briefs, Macro

In today’s briefing:

  • Pretexts, My Dear Boy, Pretexts
  • Overview #23 Gold, Bonds and the USD

Pretexts, My Dear Boy, Pretexts

By Thomas Lam

  • The financial shock and greater uncertainty, all else equal, imply a disinflationary backdrop
  • The current trade posture alone implies either a one-off or a more persistent inflationary environment
  • But comprehending the shocks might not be the real challenge, rather it is about unraveling what is harnessed as a pretext and what is not     

Overview #23 Gold, Bonds and the USD

By Rikki Malik

  • A review of recent events/data impacting our investment themes or outlook
  • Gold is now considered the most crowded trade. Should we be worried?
  • Who is going to buy US government bonds going forward?

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Apr 19
0

Daily Brief South Korea: Jeju Bank and more

By | Daily Briefs, South Korea

In today’s briefing:

  • Jeju Bank: Douzone Bizon Becomes Second Largest Shareholder

Jeju Bank: Douzone Bizon Becomes Second Largest Shareholder

By Douglas Kim

  • On 18 April, it was reported that Douzone Bizon (012510 KS) will become the second largest shareholder of Jeju Bank (006220 KS).
  • Douzone Bizon invested 57 billion won for a 14.99% stake in Jeju Bank. Through this investment, Douzone will aim to enhance the digital business of Jeju Bank.
  • This deal is likely to positively impact Jeju Bank’s shares as this capital raise is used to further invest in ERP based banking that could further boost its sales. 

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Apr 19
0

Daily Brief United States: Tesla and more

By | Daily Briefs, United States

In today’s briefing:

  • TSLA Earnings: Volatility Setup and Post-Release Price Behavior

TSLA Earnings: Volatility Setup and Post-Release Price Behavior

By John Ley

  • A detailed analysis of price patterns, implied vol and the earnings implied jump in TSLA options compared to historical outcomes. 
  • Pre- and post-earnings price movements are examined to assess directional tendencies, patterns and magnitude.
  • Price returns in the 1-month following earnings show a distinctly different pattern between beats and misses. 

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Apr 19
0

Daily Brief China: Frasers Group and more

By | China, Daily Briefs

In today’s briefing:

  • Asia Real Estate Tracker (18-Apr-2025): Morgan Stanley buys 50% of Frasers Aussie Shed Portfolio.

Asia Real Estate Tracker (18-Apr-2025): Morgan Stanley buys 50% of Frasers Aussie Shed Portfolio.

By Asia Real Estate Tracker

  • Morgan Stanley purchases 50% stake in $380M Frasers Australian warehouse portfolio, expanding its real estate holdings.
  • CapitaLand seeks $380M China Mall REIT listing in Shanghai, showing confidence in China’s retail market.
  • China experiences moderate home price growth in March, with some cities showing signs of recovery after recent slowdowns.

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