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Smartkarma Daily Briefs

Jun 02
0

Daily Brief Financials: Leopalace21 Corp, Shanghai Rural Commercial Bank, NIFTY Index, NET Lease Office Properties, Woori Financial Group , Schloss Bangalore Ltd, Canara Bank, Renatus Tactical Acquisition Corp I and more

By | Daily Briefs, Financials

In today’s briefing:

  • [Japan Buyback] Leopalace (8848 JP) – A Giant Buyback To Get Fortress Partially Out
  • CSI300/CSI500/CSI1000 Index Rebalance: Changes Lead to US$12bn Trade
  • Nifty 50 and the RBI Rate Decision: History Has a Pattern
  • [Alert] Buy Net Lease Office Properties (NLOP)
  • Korean Banks; Presidential Election Drives Positive View on Hana (086790 KS) And Woori (316140 KS)
  • Schloss Bangalore IPO Trading – Decent Anchor; Muted Overall Demand
  • Pair Trade Signal: LIC Housing Finance (LICHF IN) Long Vs. Canara Bank (CBK IN) Short
  • Renatus Tactical Acquisition Corp I: SPAC with Crypto Focus and Trump-Linked Management

[Japan Buyback] Leopalace (8848 JP) – A Giant Buyback To Get Fortress Partially Out

By Travis Lundy

  • Leopalace21 Corp (8848 JP) had a giant oopsie in 2018-2021 where they lost ¥180bn over three years because of defective construction requiring repairs. 
  • Murakami and others got involved. Leopalace got financing from FIG (shares/SARs/loan), Murakami bailed. Eventually Hikari Tsushin got in. Leopalace got FIG out of their loan, doing a refi through Mizuho.
  • Cash was up, cashflow is strong. Business is changed/revived. Now Leopalace is buying back SARs it sold to FIG. FIG will still own 26%. The future is potentially interesting. Still. 

CSI300/CSI500/CSI1000 Index Rebalance: Changes Lead to US$12bn Trade

By Brian Freitas

  • There are 7 changes for the CSI 300 Index, 50 changes for the CSI 500 Index and 100 changes for the CSI1000 Index that will be implemented on 13 June.
  • There are 240 unique names that are adds or deletes and the round-trip trade across all 3 indices is close to US$12bn.
  • The adds have outperformed the deletes for the CSI 300 Index and the CSI 1000 Index but underperformed for the CSI 500 Index.

Nifty 50 and the RBI Rate Decision: History Has a Pattern

By Gaudenz Schneider

  • The Reserve Bank of India (RBI) is set to announce a monetary policy decision on Friday, 6 June 2025.
  • Market Expectations: The consensus anticipates a 25-basis-point rate cut, lowering the rate from currently 6.00% to 5.75%. Historically, one in four RBI rate decisions is a surprise to the market.
  • This Insight investigates past market behavior during comparable RBI policy announcements, unearthing a surprising statistic about how the Nifty 50 might react to June’s decision, regardless of the outcome.

[Alert] Buy Net Lease Office Properties (NLOP)

By Richard Howe

  • I thought I had missed NLOP. But a conversation at the Berkshire Hathaway annual meeting convinced me to take another look.
  • I told a friend that I “was pissed that I missed NLOP.” He said, “You haven’t missed it. All recourse debt has been paid off and the company is about to start paying dividends.”
  • So I made a decision to revisit NLOP with a fresh perspective.

Korean Banks; Presidential Election Drives Positive View on Hana (086790 KS) And Woori (316140 KS)

By Victor Galliano

  • The “Value Up” initiative which kicked off in February 2024 has been intended to bring about corporate governance and market reforms which minority and especially foreign investors have long sought
  • So far, these voluntary reforms have brought positive albeit limited benefits to South Korean equities; presidential elections, with potential legislative change, should act as a positive valuation driver
  • We reiterate our positive views on Woori and Hana Financial which are the top banks based on our scorecard; these attributes are due to  attractive valuations and balance sheet credentials

Schloss Bangalore IPO Trading – Decent Anchor; Muted Overall Demand

By Akshat Shah

  • Schloss Bangalore Ltd (SCHBL IN) raised about US$400m in its India IPO. 
  • It is a luxury hospitality company which owns, operates, manages and develops luxury hotels and resorts under ‘The Leela’ brand, through direct ownership and hotel management agreements with third-party owners.
  • We have covered various aspects of the deal in our previous note. In this note, we will talk about the demand and trading dynamics.

Pair Trade Signal: LIC Housing Finance (LICHF IN) Long Vs. Canara Bank (CBK IN) Short

By Gaudenz Schneider

  • The Canara Bank (CBK IN) vs. LIC Housing Finance (LICHF IN) Price-Ratio has deviated more than two standard deviations from its one-year average, presenting a potential relative value opportunity.
  • The relative value opportunity can be implemented through stocks, derivatives, or as relative over-/underweights in a long only context.
  • This Insight provides a target return and discusses trade setup and risk management strategies.

Renatus Tactical Acquisition Corp I: SPAC with Crypto Focus and Trump-Linked Management

By Special Situation Investments

  • Renatus Tactical Acquisition Corp I (RTAC) is a SPAC targeting crypto/blockchain with a $240m IPO, led by Trump Media executives.
  • RTAC units include one share and half a warrant, with a trust value of $10.025/share, trading above trust value.
  • RTAC’s sponsor sold 1.5m shares and 0.7m warrants post-IPO at $2.45/unit, below IPO price.

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Jun 02
0

Daily Brief Industrials: Zhongyuan Environment A, Aegis Vopak Terminals Ltd, Deere & Co, Elbit Systems and more

By | Daily Briefs, Industrials

In today’s briefing:

  • Quiddity CSI 1000 Jun25 Results: 200 Changes; US$2Bn+ One-Way
  • Aegis Vopak IPO: Anemic Demand
  • Deere & Company Doubles Down on Autonomy—Will See & Spray Transform Modern Agriculture?
  • Elbit Systems: Iron Beam Laser System Advancements

Quiddity CSI 1000 Jun25 Results: 200 Changes; US$2Bn+ One-Way

By Janaghan Jeyakumar, CFA

  • The June 2025 index review results for China’s CSI 1000 index were announced after market close on Friday 30th May 2025.
  • There will be 100 ADDs/DELs for CSI 1000 in the June 2025 rebalance.
  • The CSI 1000 index rebal event could trigger US$2.2bn in one-way flow.

Aegis Vopak IPO: Anemic Demand

By Nicholas Tan

  • Aegis Vopak Terminals Ltd (1902844D IN) raised about US$328m in its upcoming India IPO.
  • It is the largest Indian third-party owner and operator (in terms of storage capacity) of tank storage terminals for liquified petroleum gas (LPG) and liquid products.
  • In our previous notes, we talked about the company’s historical performance, undertook a peer comparison and shared our thoughts on valuation. In this note, we talk about the trading dynamics.

Deere & Company Doubles Down on Autonomy—Will See & Spray Transform Modern Agriculture?

By Baptista Research

  • Deere & Company’s latest earnings report highlights both accomplishments and challenges in a complex market environment marked by global uncertainties and macroeconomic pressures.
  • The company’s second quarter performance exceeded expectations, with a commendable 18.8% margin for equipment operations amidst significant headwinds, including heightened tariff impacts and global trade volatility.
  • Baptista Research looks to evaluate the different factors that could influence the company’s price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology.

Elbit Systems: Iron Beam Laser System Advancements

By Baptista Research

  • Elbit Systems’ financial results for the first quarter of 2025 displayed strong growth and stable operational performance, continuing a trend from the past few quarters.
  • The company reported revenues of $1.896 billion, marking a significant increase from $1.554 billion for the same quarter in 2024.
  • This growth reflects a substantial demand across key markets, with Europe, North America, Asia Pacific, and Israel contributing 24%, 21%, 18%, and 32% of revenues, respectively.

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Jun 02
0

Daily Brief United States: Tjx Companies, NET Lease Office Properties, NVIDIA Corp, Target Corp, Home Depot Inc, Workday Inc Class A, Toll Brothers, Autodesk Inc, Lowe’s Companies Inc, Intuit Inc and more

By | Daily Briefs, United States

In today’s briefing:

  • The TJX Companies: Leveraging Vendor Relationships For A Competitive Edge!
  • [Alert] Buy Net Lease Office Properties (NLOP)
  • Nvidia’s $3.4 Trillion AI Empire Is Just Getting Started—You Won’t Believe What’s Next!
  • Target Corporation: Will Its Investments in Digital Fulfillment and Supply Chain Pay Off?
  • How The Home Depot Plans to Capture a $50 Billion Opportunity Amid Economic Uncertainty!
  • Workday Inc.: Will Its WorkdayGO Initiatives Help to Quickly Modernize & Streamline The Enterprise Functions?
  • Toll Brothers: Will Its Spec Home Strategy & Market Adaptation Be A Breakthrough Move?
  • Autodesk Inc.: Transition to New Transaction Model to Maintain A Strong Foothold Amidst Macroeconomic Challenges!
  • Lowe’s Companies: Localization Strategy & Space Productivity Improvement to Drive Sales Growth & Market Share In The Targeted Segments!
  • Intuit Inc.: Its Expansion into QuickBooks Advanced and Intuit Enterprise Suite & Other Major Drivers!

The TJX Companies: Leveraging Vendor Relationships For A Competitive Edge!

By Baptista Research

  • The TJX Companies, Inc. reported its first-quarter results for fiscal year 2026, demonstrating resilient performance across its various divisions amidst a challenging macroeconomic environment.
  • The company achieved a 3% increase in comparable store sales, driven by higher customer transactions, with each division—both in the U.S. and internationally—contributing positively.
  • Notable growth was observed in the HomeGoods division, which outperformed its competitors, delivering a 4% increase in comp sales and a 70 basis point improvement in segment profit margin compared to the previous year.

[Alert] Buy Net Lease Office Properties (NLOP)

By Richard Howe

  • I thought I had missed NLOP. But a conversation at the Berkshire Hathaway annual meeting convinced me to take another look.
  • I told a friend that I “was pissed that I missed NLOP.” He said, “You haven’t missed it. All recourse debt has been paid off and the company is about to start paying dividends.”
  • So I made a decision to revisit NLOP with a fresh perspective.

Nvidia’s $3.4 Trillion AI Empire Is Just Getting Started—You Won’t Believe What’s Next!

By Baptista Research

  • Nvidia’s first-quarter results for fiscal 2026 showcased an extraordinary ability to maintain momentum in the face of geopolitical disruption, marking a defining moment in its trajectory as a dominant AI chipmaker.
  • The company reported a 69% year-over-year revenue surge to $44.1 billion, outperforming expectations despite the mid-April U.S. government ban on H20 GPU sales to China.
  • The data center segment remained the primary growth engine, rising 73% to $39.1 billion, driven by rising AI infrastructure demand and the adoption of its cutting-edge Blackwell architecture.

Target Corporation: Will Its Investments in Digital Fulfillment and Supply Chain Pay Off?

By Baptista Research

  • Target Corporation faced a set of challenging conditions in the first quarter of 2025, significantly impacting its overall performance.
  • The detailed analysis of the quarterly results reveals a balanced mix of positive aspects, setbacks, and strategic adjustments, offering investors insights into the company’s current standing and future priorities.
  • First-quarter sales for Target declined by 2.8%, primarily driven by a decrease in comparable sales of 3.8%.

How The Home Depot Plans to Capture a $50 Billion Opportunity Amid Economic Uncertainty!

By Baptista Research

  • The Home Depot, during its first quarter of fiscal 2025, reported sales of $39.9 billion, which represented a 9.4% increase compared to the same period last year.
  • However, the company’s comparable store sales declined slightly by 0.3%.
  • The U.S. comps showed a modest increase of 0.2%.

Workday Inc.: Will Its WorkdayGO Initiatives Help to Quickly Modernize & Streamline The Enterprise Functions?

By Baptista Research

  • Workday Inc. reported a robust first quarter of fiscal year 2026, demonstrating solid growth in key financial metrics and notable advancements in its strategic initiatives.
  • The company reported a 13% increase in subscription revenue, reaching $2.059 billion, and achieved a non-GAAP operating margin of 30.2%.
  • This performance was driven by strong customer adoption across various industries, solid contributions from their partner ecosystem, and a continued focus on AI innovation.

Toll Brothers: Will Its Spec Home Strategy & Market Adaptation Be A Breakthrough Move?

By Baptista Research

  • During its second quarter earnings for fiscal 2025, Toll Brothers, Inc. outlined its financial and operational performance amidst a challenging economic environment, providing insights into its strategies and market outlook.
  • Toll Brothers reported robust financial performance for the second quarter, achieving record second quarter home sales revenue of $2.71 billion, which surpassed the midpoint of their guidance by $236 million.
  • They delivered 2,899 homes at an average selling price of approximately $934,000.

Autodesk Inc.: Transition to New Transaction Model to Maintain A Strong Foothold Amidst Macroeconomic Challenges!

By Baptista Research

  • Autodesk delivered solid results in the first quarter of fiscal 2026, surpassing the upper limits of its guidance range for both revenue and non-GAAP earnings per share.
  • The company reported a revenue growth of 15% as reported and 16% in constant currency, with a significant contribution of $78 million from the new transaction model.
  • Billings also saw a substantial increase of 29% as reported and 30% in constant currency, reflecting a strategic shift towards annual billings for most multi-year contracts.

Lowe’s Companies: Localization Strategy & Space Productivity Improvement to Drive Sales Growth & Market Share In The Targeted Segments!

By Baptista Research

  • Lowe’s Companies, Inc. delivered a mixed performance during the first quarter of fiscal 2025, reporting total sales of $20.9 billion and a 1.7% decline in comparable sales, aligning with their expectations.
  • The results reflect challenges in the DIY segment, particularly in discretionary spending on larger ticket items, compounded by a slow start to the spring season largely due to adverse weather conditions.
  • On the positive side, the company showed strength in Pro sales, reporting mid-single-digit growth, and saw a 6% rise in online sales due to improvements in both traffic and conversion rates.

Intuit Inc.: Its Expansion into QuickBooks Advanced and Intuit Enterprise Suite & Other Major Drivers!

By Baptista Research

  • The third-quarter results for Intuit’s fiscal year 2025 illustrate a strong performance across multiple segments, driven primarily by its robust AI capabilities and strategic innovations.
  • Intuit reported a 15% increase in revenue, with significant contributions from both its Consumer Group and Global Business Solutions Group.
  • This quarter, the company raised its financial targets, attributing its success to its AI-driven platform which enhances customer interaction and streamlines processes for consumers, businesses, and accountants.

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Jun 02
0

Daily Brief China: Montage Technology , HealthyWay, Shanghai Rural Commercial Bank, Bestechnic Shanghai , Zhongyuan Environment A, Contemporary Amperex Technology (CATL), Zijin Mining Group , Sichuan Biokin Pharmaceutical, Water Oasis, Softcare and more

By | China, Daily Briefs

In today’s briefing:

  • SSE50/SSE180 Index Rebalance: Some Surprises Among the Adds; Deletes as Expected
  • KWEB Index Rebalance: HealthyWay In; East Buy Out
  • CSI300/CSI500/CSI1000 Index Rebalance: Changes Lead to US$12bn Trade
  • STAR50/STAR100 Index Rebalance: 10 Changes and US$1.4bn Trade
  • Quiddity CSI 1000 Jun25 Results: 200 Changes; US$2Bn+ One-Way
  • ECM Weekly (2 June 2025) -Indigo, ITC, EBOS, Isuzu, Foshan Haitian, Lens Tech, Seres, Schloss, Aegis
  • Zijin Mining (601899 CH / 2899 HK): Evaluating the Impact of Kakula Suspension
  • China Healthcare Weekly (Jun.1)-Akeso/Summit’s Disappointing Ph3 Readout,Valuation Outlook of Biokin
  • Water Oasis H1 FY25 Results: An Improvement In Profitability And Cash 90% of Market Capitalization
  • Pre-IPO Softcare – Strong Performance Growth Momentum Would Continue

SSE50/SSE180 Index Rebalance: Some Surprises Among the Adds; Deletes as Expected

By Brian Freitas

  • There are 4 changes for the SSE50 Index (SSE50 INDEX) and 18 changes for the SSE180 Index that will be implemented at the close on 13 June.
  • The SSE50 Index (SSE50 INDEX) deletes were in line with forecasts, and the index committee has used some discretion while picking the index inclusions.
  • The SSE50 Index adds have outperformed the deletes over the last few months and there could be a further move higher in the ‘surprise’ adds to the index.

KWEB Index Rebalance: HealthyWay In; East Buy Out

By Brian Freitas

CSI300/CSI500/CSI1000 Index Rebalance: Changes Lead to US$12bn Trade

By Brian Freitas

  • There are 7 changes for the CSI 300 Index, 50 changes for the CSI 500 Index and 100 changes for the CSI1000 Index that will be implemented on 13 June.
  • There are 240 unique names that are adds or deletes and the round-trip trade across all 3 indices is close to US$12bn.
  • The adds have outperformed the deletes for the CSI 300 Index and the CSI 1000 Index but underperformed for the CSI 500 Index.

STAR50/STAR100 Index Rebalance: 10 Changes and US$1.4bn Trade

By Brian Freitas

  • There is 1 constituent change for the STAR50 INDEX and 4 changes for the STAR100 Index at the next rebalance that will be implemented at the close on 13 June.
  • We estimate turnover of 2.35% for the SSE STAR50 (STAR50 INDEX) and 4.9% for the STAR100 Index. The estimated round-trip trade is CNY 9.8bn (US$1.35bn).
  • There are multiple stocks that are adds or deletes for other indices and the passive flows will be a lot larger than just for the STAR50/STAR100 indices.

Quiddity CSI 1000 Jun25 Results: 200 Changes; US$2Bn+ One-Way

By Janaghan Jeyakumar, CFA

  • The June 2025 index review results for China’s CSI 1000 index were announced after market close on Friday 30th May 2025.
  • There will be 100 ADDs/DELs for CSI 1000 in the June 2025 rebalance.
  • The CSI 1000 index rebal event could trigger US$2.2bn in one-way flow.

ECM Weekly (2 June 2025) -Indigo, ITC, EBOS, Isuzu, Foshan Haitian, Lens Tech, Seres, Schloss, Aegis

By Sumeet Singh

Zijin Mining (601899 CH / 2899 HK): Evaluating the Impact of Kakula Suspension

By Rahul Jain

  • A 4–6 month Kakula disruption could reduce Zijin’s 2025 copper output by 4–8%, cutting EBITDA by ~7–11%.
  • Ramp-Ups at Julong and Čukaru Peki can offset ~60–70% of the lost volume and partially protect margins.
  • Lithium is expected to grow from 8% to 20% of EBITDA by 2028, driven by 300kt LCE capacity from low-cost brine assets.

China Healthcare Weekly (Jun.1)-Akeso/Summit’s Disappointing Ph3 Readout,Valuation Outlook of Biokin

By Xinyao (Criss) Wang

  • CR Sanjiu plans to transfer 49.8967% equity of Sanjiu (Anguo) and pay more attention to the quality of external M&As. China Resources+Tasly+KPC will be the core drivers of future performance.
  • Akeso’s first global phase 3 readout for ivonescimab was disappointing, which cast shadow on the final FDA approval. We shared our views on the outlook and valuation ahead.
  • The failure of HER3-DXd cast shadow over the outlook of HER3. We think Biokin is overvalued. Its valuation should be lower than Akeso and Kelun Bio.

Water Oasis H1 FY25 Results: An Improvement In Profitability And Cash 90% of Market Capitalization

By Sameer Taneja

  • Water Oasis (1161 HK)  H1 FY25 results were encouraging and a step in the positive direction as revenue/PAT improved by -2.5%/116% YoY
  • The company declared a semi-annual dividend of 3.5 cents (6.7% annualized yield) for a 43% payout ratio. Net cash of 633 million HKD represents 90% of the market capitalization.
  • Trading at 6.0x FY25 PE with earnings stabilization, this is a great name to explore, although we would like to see an improvement in capital allocation. 

Pre-IPO Softcare – Strong Performance Growth Momentum Would Continue

By Xinyao (Criss) Wang

  • Softcare has established its core competitiveness of “low price + localization”, and has achieved success in Africa. Softcare hopes to replicate its business model in Africa to other markets.
  • Emerging Markets have seen sustained growth in market penetration of baby/feminine hygiene products. We’re optimistic about Softcare’s future performance growth due to “demographic dividend + consumption upgrade” in Emerging Markets.
  • Softcare has strong fundamentals and promising outlook. We think valuation of Softcare should be higher than Hengan International Group (1044 HK) due to higher profit margin and future growth potential.

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Jun 02
0

Daily Brief Japan: Leopalace21 Corp, Isuzu Motors, Seven & I Holdings, NTT Data Corp, TSE Tokyo Price Index TOPIX, ZOZO Inc and more

By | Daily Briefs, Japan

In today’s briefing:

  • [Japan Buyback] Leopalace (8848 JP) – A Giant Buyback To Get Fortress Partially Out
  • [Japan Buybacks] – Buybacks Announced 26-30 May 2025 And Company Buyback History
  • Merger Arb Mondays (02 June) – Seven & I, SBI Sumishin, Shibaura, Mayne, ENN Energy, HKBN, Zeekr
  • (Mostly) Asia M&A, May 2025 Wrap: NTT Data, ZEEKR, MAC Copper, Torii, Mitsu. Shokuhin, SBI Sumishin
  • Governance Issues Were Not Highlighted and the Win-Win by REIT Sponsors and Investors Continues
  • Zozo Purchase of Lyst Is Timely

[Japan Buyback] Leopalace (8848 JP) – A Giant Buyback To Get Fortress Partially Out

By Travis Lundy

  • Leopalace21 Corp (8848 JP) had a giant oopsie in 2018-2021 where they lost ¥180bn over three years because of defective construction requiring repairs. 
  • Murakami and others got involved. Leopalace got financing from FIG (shares/SARs/loan), Murakami bailed. Eventually Hikari Tsushin got in. Leopalace got FIG out of their loan, doing a refi through Mizuho.
  • Cash was up, cashflow is strong. Business is changed/revived. Now Leopalace is buying back SARs it sold to FIG. FIG will still own 26%. The future is potentially interesting. Still. 

[Japan Buybacks] – Buybacks Announced 26-30 May 2025 And Company Buyback History

By Travis Lundy

  • Buybacks in Japan are becoming a much greater driver of shareholder return than in previous years. The total amount of buybacks announced just during the March-end earnings season cleared ¥7trln.
  • Quiddity has developed a buyback tool which tracks Japanese buybacks and the buyback history for any given company. Isuzu Motors (7202 JP) announced a big post-Offering buyback this week.
  • Want to see how Isuzu has executed buybacks the past decade? Daily data? % volume? You can check here for any of the 21 companies which announced buybacks this week. 

Merger Arb Mondays (02 June) – Seven & I, SBI Sumishin, Shibaura, Mayne, ENN Energy, HKBN, Zeekr

By Arun George

(Mostly) Asia M&A, May 2025 Wrap: NTT Data, ZEEKR, MAC Copper, Torii, Mitsu. Shokuhin, SBI Sumishin

By David Blennerhassett

  • For May 2025, 13 new transactions (firm and non-binding) were discussed on Smartkarma (by the Quiddity team) with an overall announced deal size of ~US$27bn. 
  • The average premium for the new transactions announced (or first discussed) in May was ~28%, with a year-to-date average of 49%.
  • The average premiums for transactions in 2024 (129 transactions), (2023 (117), 2022 (106), 2021 (165), 2020 (158), and 2019 (145 ) were 43%, 39%, 41%, 33%, 31%, and 31%.

Governance Issues Were Not Highlighted and the Win-Win by REIT Sponsors and Investors Continues

By Aki Matsumoto

  • While offering non-serious TOB prices, knowing that the likelihood of TOBs by the activist fund is low, the aim to extract concessions from the REIT and sponsor companies was successful.
  • The governance problem is the composition of the company, which continues to manage off-balance sheet real estate through its subsidiary REIT asset management company.
  • So far, however, governance issues have not received much attention, only confirming the sponsor companies’ willingness to continue REIT control and investors’ benefit from higher REIT stock prices by TOBs.

Zozo Purchase of Lyst Is Timely

By Michael Causton

  • Zozo’s purchase of UK mall Lyst will create significant synergies, allowing Zozo to build a strong base in Europe and the US.
  • The move will allow brands from Japan to sell overseas easily, while also potentially making it simple for European and US brands to sell into Japan.
  • The deal comes just in time given slowing e-commerce sales in Japan.

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Jun 02
0

Most Read: Suzhou Maxwell Technologies , Leopalace21 Corp, Montage Technology , Winner Medical, Isuzu Motors, Northeast Securities, HealthyWay, Washington H. Soul Pattinson and Co. Ltd, Seven & I Holdings, Shenzhen Overseas Chinese (A) and more

By | Daily Briefs, Most Read

In today’s briefing:

  • STAR&CHINEXT 50 Index Rebalance: One Change in June Adds to Other (Larger) Index Flows
  • [Japan Buyback] Leopalace (8848 JP) – A Giant Buyback To Get Fortress Partially Out
  • SSE50/SSE180 Index Rebalance: Some Surprises Among the Adds; Deletes as Expected
  • CSI Medical Service Index Rebalance: Six Changes with Decent Impact
  • [Japan Buybacks] – Buybacks Announced 26-30 May 2025 And Company Buyback History
  • CSI All Share IB & Brokerage Index Rebalance: Northeast Replaces Harbin Hatou
  • KWEB Index Rebalance: HealthyWay In; East Buy Out
  • Soul Patts & Brickworks: Index Impact of A$14bn Merger
  • Merger Arb Mondays (02 June) – Seven & I, SBI Sumishin, Shibaura, Mayne, ENN Energy, HKBN, Zeekr
  • CSI All Share Real Estate Sector Index Rebalance: Sector Reclassification Drives Changes

STAR&CHINEXT 50 Index Rebalance: One Change in June Adds to Other (Larger) Index Flows

By Brian Freitas

[Japan Buyback] Leopalace (8848 JP) – A Giant Buyback To Get Fortress Partially Out

By Travis Lundy

  • Leopalace21 Corp (8848 JP) had a giant oopsie in 2018-2021 where they lost ¥180bn over three years because of defective construction requiring repairs. 
  • Murakami and others got involved. Leopalace got financing from FIG (shares/SARs/loan), Murakami bailed. Eventually Hikari Tsushin got in. Leopalace got FIG out of their loan, doing a refi through Mizuho.
  • Cash was up, cashflow is strong. Business is changed/revived. Now Leopalace is buying back SARs it sold to FIG. FIG will still own 26%. The future is potentially interesting. Still. 

SSE50/SSE180 Index Rebalance: Some Surprises Among the Adds; Deletes as Expected

By Brian Freitas

  • There are 4 changes for the SSE50 Index (SSE50 INDEX) and 18 changes for the SSE180 Index that will be implemented at the close on 13 June.
  • The SSE50 Index (SSE50 INDEX) deletes were in line with forecasts, and the index committee has used some discretion while picking the index inclusions.
  • The SSE50 Index adds have outperformed the deletes over the last few months and there could be a further move higher in the ‘surprise’ adds to the index.

CSI Medical Service Index Rebalance: Six Changes with Decent Impact

By Brian Freitas

  • CSI announced the changes for the June rebalance after market close on 30 May and the changes will be effective after the close of trading on 13 June.
  • There are 6 changes for the index and we estimate passive buying of 0.7-2.4x ADV in the adds and passive selling of between 1-4.7x ADV in the deletes.
  • There will be capping inflows for Shenzhen Mindray Bio-Medical Electronics (300760 CH) and capping outflows for WuXi AppTec (603259 CH). 

[Japan Buybacks] – Buybacks Announced 26-30 May 2025 And Company Buyback History

By Travis Lundy

  • Buybacks in Japan are becoming a much greater driver of shareholder return than in previous years. The total amount of buybacks announced just during the March-end earnings season cleared ¥7trln.
  • Quiddity has developed a buyback tool which tracks Japanese buybacks and the buyback history for any given company. Isuzu Motors (7202 JP) announced a big post-Offering buyback this week.
  • Want to see how Isuzu has executed buybacks the past decade? Daily data? % volume? You can check here for any of the 21 companies which announced buybacks this week. 

CSI All Share IB & Brokerage Index Rebalance: Northeast Replaces Harbin Hatou

By Brian Freitas

  • The changes to the CSI All Share Investment Banking & Brokerage Index were announced after market close on 30 May and will be implemented at the close on 13 June.
  • Northeast Securities (000686 CH) will be added to the index while Harbin Hatou Investment Co, Ltd. (600864 CH) will be deleted.
  • There is over 2.5x ADV to trade in both stocks and much smaller impact of funding/capping flows on the other index constituents.

KWEB Index Rebalance: HealthyWay In; East Buy Out

By Brian Freitas

Soul Patts & Brickworks: Index Impact of A$14bn Merger

By Brian Freitas

Merger Arb Mondays (02 June) – Seven & I, SBI Sumishin, Shibaura, Mayne, ENN Energy, HKBN, Zeekr

By Arun George

CSI All Share Real Estate Sector Index Rebalance: Sector Reclassification Drives Changes

By Brian Freitas

  • There are 3 adds and 4 deletes for the CSI All Share Real Estate Sector Index in June. There are changes driven by changes to the sector classification for stocks.
  • Passive trackers will need to buy between 0.2-0.65x ADV in the adds and sell between 0.15-1.75x ADV in the deletes.
  • The deletes have outperformed the adds over the last few months and some of that could dissipate over the next couple of weeks.

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Jun 01
0

Daily Brief Quantitative Analysis: A-H Premium Weekly (May 30th): Tigermed and more

By | Daily Briefs, Quantitative Analysis

In today’s briefing:

  • A-H Premium Weekly (May 30th): Tigermed, Fosun Pharma, Cosco Shipping, CSSC O&M Engineering

A-H Premium Weekly (May 30th): Tigermed, Fosun Pharma, Cosco Shipping, CSSC O&M Engineering

By Ke Yan, CFA, FRM

  • We analyse the changes of A-H premium on 154 stocks over the last week. The average A-H premium was 79.2% as of May 30th.
  • The average A-H premium changed by -1.3ppt week-on-week, led by health care, information technology, utilities and offset by consumer staples, materials.
  • We highlight weekly changes in A-H premium for Tigermed, Fosun Pharma, Cosco Shipping, CSSC O&M Engineering, Joinn Lab, Livzon Pharmaceutical.

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Jun 01
0

Daily Brief Thematic (Sector/Industry): APAC Healthcare Weekly (June 1)- Eisai and more

By | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

  • APAC Healthcare Weekly (June 1)- Eisai, Daiichi, Samsung Bio, SK Bioscience, CSPC, Hengrui Pharma
  • Tariff Surge 2025: Winners, Losers, and the Real Impact on U.S. Steel and Aluminium

APAC Healthcare Weekly (June 1)- Eisai, Daiichi, Samsung Bio, SK Bioscience, CSPC, Hengrui Pharma

By Tina Banerjee

  • Eisai received approval for its insomnia drug, Dayvigo in China. Daiichi Sankyo and Merck have voluntarily withdrawn BLA seeking accelerated approval in the U.S. for patritumab deruxtecan for NSCLC.
  • Samsung Biologics secured two CMO contract worth KRW441B from unnamed pharmaceutical companies in Asia and Europe. SK Bioscience has completed a major expansion of its vaccine production facility in Andong.
  • CSPC Pharmaceutical is in negotiations regarding three potential outlicensing deals. Jiangsu Hengrui Pharmaceuticals received approvals for three drugs in China. Hansoh’s third BLA for Xinyue has been accepted by NMPA.

Tariff Surge 2025: Winners, Losers, and the Real Impact on U.S. Steel and Aluminium

By Rahul Jain

  • The U.S. has doubled tariffs on imported steel and aluminum to 50%, citing national security and domestic industry protection.
  • The move is expected to raise domestic prices, reduce imports, and increase costs for metal-intensive industries.
  • Winners include U.S.-based producers like Nucor, United States Steel, Cleveland Cliffs and Century Aluminum; losers are foreign exporters like Aloca, RioTinto, Nippon Steel, Ford, GM etc.

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Jun 01
0

Daily Brief Event-Driven: [Japan CorpGov] TSE “Mgmt Conscious” Reports (Jun25) and more

By | Daily Briefs, Event-Driven

In today’s briefing:

  • [Japan CorpGov] TSE “Mgmt Conscious” Reports (Jun25), Minor Updates
  • A/H Premium Tracker (To 30 May 2025):  Narrow Premia Hs Worst Performers, BYD Relents
  • (Mostly) Asia-Pac M&A: MAC Copper, SBI Sumishin Net Bank, Taiyo, HKBN, Welcia/Tsuruha, Amara
  • Naturgy Self-Tender: Arbitrage with Strategic Upside and Free-Float Catalyst
  • Last Week in Event SPACE: Makino Milling Machine, Nufarm, Dic Corp, HKBN
  • Weekly Deals Digest (01 Jun) – Makino, SBI Sumishin, Taiyo, ENN Energy, HKBN, Meilan, Foshan Haitian
  • HK Connect SOUTHBOUND Flows (To 30 May 2025); Volumes OK, Big Net Buying on SOEs/Financials

[Japan CorpGov] TSE “Mgmt Conscious” Reports (Jun25), Minor Updates

By Travis Lundy

  • TSE-Listed companies are asked to file “Management Conscious of Capital Cost/Stock Price” awareness reports/policies. Many have. Some are still working on it. And policies change, and CGR reports are updated.
  • 286 new CGRs filed since 1-May-25. Our tools show every report, links to every document, and a diff file tool. Input a name, see the changes in the reports.
  • The JPX Council of Experts met on 22 April. Mgmt Conscious updates came this month. Parent-sub follow-ups in Fall/Winter 2025. Slow. ‘Going Private’ policy is under public comment now.

A/H Premium Tracker (To 30 May 2025):  Narrow Premia Hs Worst Performers, BYD Relents

By Travis Lundy

  • AH spreads are slightly narrower, but performance is concentrated in fewer names and broad spread volatility is up. BYD (1211 HK) back down nearly 3%. CATL 10% through still.
  • Sharp skew on H-vs-A performance this week. Those trading AH Premium <20% saw H underperform sharply. Those in the 40-100% AH Premium range saw H outperform. Quiddity Portfolio alpha strong.
  • The data tables below update on a daily basis in the Tools section of Smartkarma. The SOUTHBOUND Flow Monitor and AH Monitor are both there free for SK readers.

(Mostly) Asia-Pac M&A: MAC Copper, SBI Sumishin Net Bank, Taiyo, HKBN, Welcia/Tsuruha, Amara

By David Blennerhassett

Naturgy Self-Tender: Arbitrage with Strategic Upside and Free-Float Catalyst

By Jesus Rodriguez Aguilar

  • Shareholder-Backed self-OPA at €26.50 targets 9.08% of capital with high proration likely.
  • Offers a structured arbitrage setup with limited downside and defined exit timeline.
  • Post-Deal float expansion to >21% boosts liquidity, index prospects, and dividend appeal.

Last Week in Event SPACE: Makino Milling Machine, Nufarm, Dic Corp, HKBN

By David Blennerhassett

  • MBK has made a legally binding bid for Makino Milling Machine Co (6135 JP). Stay long if you still hold or buy the dip. Buy at under ¥11,200.
  • Given the share price decline, Nufarm (NUF AU)‘s board is under pressure to do “something”. Nufarm would be better off selling its entire operations, as opposed to offloading divisions.
  • Dic Corp (4631 JP) is (also) under pressure from activist Oasis Management. Buy large dips rather than chase another day of a big gain.

Weekly Deals Digest (01 Jun) – Makino, SBI Sumishin, Taiyo, ENN Energy, HKBN, Meilan, Foshan Haitian

By Arun George

HK Connect SOUTHBOUND Flows (To 30 May 2025); Volumes OK, Big Net Buying on SOEs/Financials

By Travis Lundy

  • Gross SOUTHBOUND volumes back below US$12bn a day this past week, but net buying was nearly US$700mm a day, which was decent.
  • Among the top buys as a percentage of volume, FINANCIALS, ENERGY, TELECOMS stand out, dramatically. Among top sells, it is CONSUMER and INFO TECH dominating the top 20. Again.
  • The data tables below update on a daily basis in the Tools section of Smartkarma. The SOUTHBOUND Flow Monitor  and AH Monitor are both there free for SK readers.

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Jun 01
0

Daily Brief Utilities: Naturgy Energy Group SA, Nrg Energy Inc and more

By | Daily Briefs, Utilities Sector

In today’s briefing:

  • Naturgy Self-Tender: Arbitrage with Strategic Upside and Free-Float Catalyst
  • NRG Energy: Is Its Strategic Expansion in Smart Home & Energy Retail A Potential Game Changer?

Naturgy Self-Tender: Arbitrage with Strategic Upside and Free-Float Catalyst

By Jesus Rodriguez Aguilar

  • Shareholder-Backed self-OPA at €26.50 targets 9.08% of capital with high proration likely.
  • Offers a structured arbitrage setup with limited downside and defined exit timeline.
  • Post-Deal float expansion to >21% boosts liquidity, index prospects, and dividend appeal.

NRG Energy: Is Its Strategic Expansion in Smart Home & Energy Retail A Potential Game Changer?

By Baptista Research

  • NRG Energy, Inc.’s first quarter results for 2025 outlined several strategic and financial developments.
  • Most notably, NRG announced a significant acquisition of assets from LS Power, including 13 gigawatts of natural gas generation and a 6-gigawatt commercial and industrial virtual power plant platform.
  • This move is aimed at expanding NRG’s generation capacity, enhancing their competitive stance, and positioning the company to better capitalize on demand growth in U.S. power markets.

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