Smartkarma Daily Briefs

With 8 trading days left in the review period, we forecast 3 changes for the Stock Exchange of Thailand SET 50 Index (SET50 INDEX) in June.
Capping changes for Delta Electronics Thailand (DELTA TB) will result in big passive selling in the stock and funding inflows for the other index constituents.
The forecast adds have drifted lower over the last 6 months and outperformed the SET 50 Index while the deletes have dropped a lot and underperformed the index.

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May 21

Daily Brief South Korea: Sung Kwang Bend, Korea Stock Exchange KOSPI 200, Samsung Electronics Pref Shares, Samsung Electronics, Makus Inc and more

By Smartkarma Daily Briefs | Daily Briefs, South Korea

In today’s briefing:

KOSDAQ150 Index Rebalance Preview: Announcement Around the Corner
Surge in ETF Trading Share on KOSPI: Spot Dislocation Opportunities from Leverage Trades
Samsung Electronics’ Phase 2 Buyback Disposal Plan Virtually Finalized: Two Key Trading Implications
Samsung Electronics (005930 KS) Tactical Outlook Amid Rumored Phase 2 Buyback Confirmation
Korea Small Cap Gem #34: Makus

KOSDAQ150 Index Rebalance Preview: Announcement Around the Corner

With the review period for the June rebalance complete, we highlight 11 potential changes for the KOSDAQ 150 Index (KOSDQ150 INDEX).
The estimated impact on the potential inclusions ranges from 0.2-7.5 days of ADV while the impact on the potential deletions varies from 0.2-5.8 days of ADV.
The forecast adds have outperformed the forecast deletes over the last 6-7 months with a big move higher in the last month. Trim positions into strength.

Surge in ETF Trading Share on KOSPI: Spot Dislocation Opportunities from Leverage Trades

By Sanghyun Park

ETF trading topped 50% of KOSPI turnover in April—a first outside the March 2020 COVID crash—rising nearly 14 percentage points month-to-month despite a sharp overall volume drop.
Despite a 30% drop in KOSPI volume, leveraged and inverse ETFs surged 28% and 34%, led by ‘KODEX Leverage’ and ‘KODEX 200 Futures Inverse 2X’ hitting top ADV ranks.
Some local traders see opportunities in spot market dislocations amid volatility, futures rollovers, and ETF-driven supply-demand imbalances likely to persist from last month’s surge.

Samsung Electronics’ Phase 2 Buyback Disposal Plan Virtually Finalized: Two Key Trading Implications

By Sanghyun Park

If ₩500B comes from common shares, about 40M shares retire, raising Samsung Life and Fire stakes to 10.07%, requiring a ₩0.23T block sale to trim excess.
Slightly smaller than last time but still notable, the insurers acted fast in February. Expect a ~0.07% block trade soon, though price impact was mild previously.
Watch for preferred share outperformance as phase two buyback hits 0.66% common vs. 0.81% preferred (effective buyback assuming cancellation); similar dynamics may repeat in the larger ₩4T phase three buyback.

Samsung Electronics (005930 KS) Tactical Outlook Amid Rumored Phase 2 Buyback Confirmation

By Nico Rosti

As reported by Sanghyun Park, Samsung Electronics (005930 KS) ‘s phase 2 buyback disposal plan appears to be virtually finalized (or will be finalized soon – not official yet).
As always, we’ll assess what our tactical models suggest about the trend from here—interpreted alongside the latest catalysts.
We have been monitoring Samsung Electronics (005930 KS) for a while: the stock has been bottoming, then flat for a while, rallied modestly, now a minor pullback… time to BUY?

Korea Small Cap Gem #34: Makus

By Douglas Kim

Makus is #34 in our Korea Small Cap Gem series. Its treasury shares as percentage of outstanding shares is 44%. Net cash as a percent of market cap is 78%.
With greater interest in companies that have a combination of high levels of treasury shares as a percentage of market cap, cheap valuations, and excellent fundamentals, Makus fits the bill.
Makus could be one of the targets for potential tender offers/M&As and likely to outperform the market in the next 1-2 years.

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May 21

Daily Brief Indonesia: Medco Energi and more

By Smartkarma Daily Briefs | Daily Briefs, Indonesia

In today’s briefing:

Lucror Analytics – Morning Views Asia

Lucror Analytics – Morning Views Asia

By Leonard Law, CFA

In today’s Morning Views publication we comment on developments of the following high yield issuers: Medco Energi

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May 21

Daily Brief United States: iShares MSCI Singapore ETF, Advanced Micro Devices, Gold, Base Oil, D-Wave Quantum , ATRenew , reAlpha Tech, SolarBank, U-Haul Holding and more

By Smartkarma Daily Briefs | Daily Briefs, United States

In today’s briefing:

Smartkarma Webinar | Promoting Sustainability in ASEAN: Rise of the Green Economy
AMD. Adding $6 Billion Buyback & Authorizing 78% Increase In Share Count. But Why?
Gold About To Lose Its Shine?
Global base oils margins outlook: Week of 19 May
Global base oils arb outlook: Week of 19 May
Expecting a Test of All-Time Highs; Crypto (MSTR, HOOD, BTDR) And Quantum (QBTS, IONQ, RGTI) Leading
RERE: 1Q25 Earnings
ReAlpha Tech Corp – AIRE: 1Q25 Revenue Ramps, With Peak Homebuying Activity Still Ahead
SUUN: Reports Q3 results
UHAL: U-Haul Holding Company to Report 4Q and full-year FY2025 results on May 28th after the close conference call on May 29th at 11 AM ET.

Smartkarma Webinar | Promoting Sustainability in ASEAN: Rise of the Green Economy

By Smartkarma Research

In the next installment of our Webinar series, in collaboration with ASEAN Exchanges, we go live with Smartkarma Insight Provider Sharmila Whelan.

Due to the region’s fast-growing urban areas and proximity to coastal regions, ASEAN is particularly vulnerable to the effects of climate change.
Even as countries in ASEAN pursue economic growth, these efforts cannot be isolated from a focus on sustainability. Achieving sustainable growth will open the doors to not just unprecedented, future-forward opportunities, but also large-scale risks and challenges that demand innovative solutions.
Understanding the myriad benefits that a green economy brings, ASEAN countries have taken several steps to accelerate their green transition.

Join us as Sharmila Whelan shares her thoughts on ASEAN’s energy transition, discussing carbon emission trends, national clean energy policies, green financing progress, and the region’s fastest ESG adopters.

The webinar will be hosted on Wednesday, 4 June 2025, 16:30 SGT/HKT.

Register for the Webinar here

Sharmila Whelan is a seasoned Global Geopolitical-Macro Strategist with nearly three decades of experience advising buy-side clients on multi-asset investment strategies and asset allocations. Her career has been defined by her differentiated thinking, a deep understanding of the interlinkages between global geopolitics, macro and policy dynamics and Austrian business cycle approach to economic analysis. Sharmila has extensive experience in both developed and emerging markets, particularly in China and India, and a proven track record of accurately forecasting investment risks and opportunities ahead of consensus.

AMD. Adding $6 Billion Buyback & Authorizing 78% Increase In Share Count. But Why?

By William Keating

Following its AGM on May 13 last, AMD announced a new $6 billion share repurchase program, despite still having $4 billion remaining on the previous buyback program
The AGM also approved a proposal to authorize a 78% increase in the company’s share count, from 2.25 billion to 4 billion shares
It’s a bold move on AMD’s part and it reawakens memories of the company’s acquisition of Xilinx back in 2022 in a $35 billion all stock deal. Deja vu ?

Gold About To Lose Its Shine?

By The Commodity Report

The latest BofA survey showed that the consensus trade continues to be “long gold” with 58% of participants surveyed, followed by only 22% “long mag 7”.
According to the analysis, gold is now more overvalued than ever before (since data was recorded in 2008). At the same time, positioning in the US dollar fell to a 19-year low.
The positioning in gold is even that extreme that it pulled the entire commodity basket up with it – relative to equities.

Global base oils margins outlook: Week of 19 May

By Iain Pocock

Global base oils prices hold firm vs feedstock/competing fuel prices even as they edge lower.
Firm base oils values point to tight supply-demand fundamentals, incentivize refiners to maintain high output.
Base oils values hold firm ahead of typical seasonal slowdown in demand in coming weeks in Asia, and from start of Q3 in Europe/US.

Global base oils arb outlook: Week of 19 May

By Iain Pocock

US Group II base oils price-premium to vacuum gasoil trends higher in recent weeks compared with Q1 2025, even with dip in premium in mid-May.
Group II domestic/export price premium trends higher after holding in relatively narrow range from mid-Nov 2024 to end-Q1 2025.
Narrow range contrasts with steeper fall in Group II export price-premium to VGO in Q4 2023 and Q1 2024, followed by sharper recovery from end-Q1 2024.

Expecting a Test of All-Time Highs; Crypto (MSTR, HOOD, BTDR) And Quantum (QBTS, IONQ, RGTI) Leading

By Joe Jasper

The market remains relentlessly strong, shrugging off the latest “bearish” headline regarding Moody’s U.S. debt downgrade on Friday.
This is exactly what we would expect to happen in a bull market, particularly during this “lockout rally,” and helps confirm our bullish outlook.
Our outlook will remain bullish as long as the SPX is above 5500, while short-term gap support is at 5700-5785. We expect a test of all-time highs soon.

RERE: 1Q25 Earnings

Key 1Q25 takeaways include: 1) rising trade-in activity continues to drive growth, powerful lead indicators around ongoing government subsidies on new mobile phones, accelerating momentum with JD.com, and continued growth in AHS offline stores 2) more recent initiatives to enhance AHS Recycle’s brand, with a focus on the company’s comprehensive suite of services and competitive pricing, likely further stimulates growth in 1P business volumes and related contributions and 3) while management remains focused on reinvesting in the business to further accelerate top line growth, we look for senior officials to increasingly return excess capital to shareholders as profitability continues to scale via ongoing share repurchases and the potential for introducing a regular quarterly dividend in the not-too-distant future.

ReAlpha Tech Corp – AIRE: 1Q25 Revenue Ramps, With Peak Homebuying Activity Still Ahead

GTG Financial was acquired in late February 2025 and so did not make a full quarter impact on AIRE’s consolidated results.
Even so, since closing the acquisition during the quarter, GTG contributed to originating 36 mortgages in 1Q25, representing total loan volume of about $22.4m.
2Q25 – with peak homebuying activity underway – will mark the first quarter with full GTG contribution.

SUUN: Reports Q3 results

SolarBank has positioned itself as a vertically integrated energy firm offering solar, battery energy storage systems (BESS), and other forms of power development services, EPC services, Operations & Maintenance services, and operates as an independent power producer (IPP).
Despite the apparent shift in US Energy policy at the Federal level, demand for renewable energy remains robust at the state, provincial, and local levels.
Increased energy demand from data centers, renewed domestic manufacturing, and EV penetration should all increase solar demand.

UHAL: U-Haul Holding Company to Report 4Q and full-year FY2025 results on May 28th after the close conference call on May 29th at 11 AM ET.

U-Haul Holding Company is the parent company of U-Haul International, the world’s largest consumer truck and trailer rental company.
U-Haul is also the third largest self-storage operator in North America.
U-Haul benefited from a step up in top-line demand for self-moving services during the pandemic, namely in FY2021 and FY2022.

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May 21

Daily Brief India: Belrise Industries, Protean, Welspun Living, Adani Ports & Special Economic Zone, Apcotex Industries, Archean Chemical Industries, Vinati Organics, Innova Captab and more

By Smartkarma Daily Briefs | Daily Briefs, India

In today’s briefing:

Belrise Industries IPO – RHP Updates & Thoughts on Peer Comp and Valuation
PROTEAN EGov Technologies – Impact of PAN 2.0 Setback
The Beat Ideas: Welspun Living- Home Textile Giant Weaving Growth
Adani Ports: Anchored on Scale, Navigating Towards 1BT Ambition by FY30
Apcotex Industries Q4 FY25 Update: Strong Volume Growth and Margin Recovery
Archean Chemical Industries Q4 & FY25 Update: Strong Volume Growth & Strategic Expansions
Vinati Organics Q4 FY25 Update: Strong Growth with Robust Performance Across Key Segments
Innova Captab Q4FY25 Update: Jammu Plant, R&D, and Market Penetration

Belrise Industries IPO – RHP Updates & Thoughts on Peer Comp and Valuation

By Akshat Shah

Belrise Industries (9156339Z IN) is looking to raise about US$255m in its upcoming India IPO.
Belrise Industries is an automotive component manufacturing company based in India offering a diverse range of safety critical systems and other engineering solutions for two-wheelers, three-wheelers, four-wheelers, commercial and agri-vehicles.
We have looked at the company’s past performance in our previous notes. In this note, we will talk about the IPO valuations.

PROTEAN EGov Technologies – Impact of PAN 2.0 Setback

By Nimish Maheshwari

PROTEAN eGov Technologies LTD (PROTEAN) has experienced a significant setback by not being shortlisted for the Indian government’s PAN 2.0 project worth INR 1,440 crore, a material negative.
This exclusion, despite earlier confidence, is expected to lead to a substantial decline in this revenue stream over the next 2-3 years, potentially collapsing by 75-100%.
The PAN business has historically been a key driver of profitability and free cash flow, funding new initiatives now under threat.

The Beat Ideas: Welspun Living- Home Textile Giant Weaving Growth

Welspun Living targets INR 15,000 crore revenue by FY27, focusing on debt reduction and expanding its non-core businesses, diversifying its growth and financial resilience.
The company’s emphasis on sustainability and innovation, including renewable energy initiatives, positions it as a leader in eco-friendly home textiles, responding to market shifts.
Despite fierce competition, Welspun Living’s strong brand portfolio and global presence reaffirm its leadership in the home textiles market, making it well-positioned for long-term growth.

Adani Ports: Anchored on Scale, Navigating Towards 1BT Ambition by FY30

By Rahul Jain

Targeting 1 billion tonnes of cargo by 2030 with ~2,000 MMT capacity. Gangavaram Port timely expansion is crucial.
FY26 guidance implies strong revenue growth (₹36,000–38,000 Cr) and rising cargo volumes, but the PAT outlook appears conservative.
Trades at 17x EV/EBITDA FY27 which is in-line with historic multiples. High margin business with strong cash conversion provides visibility to achieve FY30 targets.

Apcotex Industries Q4 FY25 Update: Strong Volume Growth and Margin Recovery

Apcotex Industries (APCO IN) reported a robust 12.5% YoY revenue growth in Q4 FY25, driven by strong volume and export growth.
Despite external challenges like crude price volatility and global overcapacity in latex, the company showcased strong operational performance.
The recovery in margins, driven by improved capacity utilization and higher exports, supports optimism for FY26 despite market uncertainties.

Archean Chemical Industries Q4 & FY25 Update: Strong Volume Growth & Strategic Expansions

Archean Chemical Industries (ACI IN) posted strong operational performance, driven by robust export growth and stable demand across key segments.
Despite external market challenges, Archean’s diversified product portfolio and strategic acquisitions provide a solid foundation for future growth.
Archean is well-positioned to continue expanding, with significant upside in bromine derivatives and energy storage, supporting its long-term growth trajectory.

Vinati Organics Q4 FY25 Update: Strong Growth with Robust Performance Across Key Segments

Vinati Organics reported a 24% QoQ increase in net income, driven by strong growth in ATBS and antioxidants.
The company’s focus on capacity expansion and product diversification positions it for sustainable growth in FY26.
Continued leadership in specialty chemicals and a clear Capex roadmap reinforce confidence in future growth.

Innova Captab Q4FY25 Update: Jammu Plant, R&D, and Market Penetration

Innova Captab (1605221D IN) achieved strong Q4 FY25 revenue growth of nearly 20%, though profitability felt impact from new Jammu plant’s depreciation and finance costs.
The new manufacturing facility in Jammu was commercialized in Q4 FY25, contributing INR 36 crores revenue and expanding production capabilities.
The company expects strong FY26 growth, with Jammu plant adding INR 400 crores, projecting a 25% revenue CAGR long-term and improving margins.

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May 21

Daily Brief Japan: Shin Etsu Chemical, TSE Tokyo Price Index TOPIX, Moresco Corp, Asahi Intecc, Macnica Holdings Inc and more

By Smartkarma Daily Briefs | Daily Briefs, Japan

In today’s briefing:

[Japan Buybacks] ShinEtsu Chem (4063) – How the FCSR Works
Many Companies in Japan Are Still Hesitant to Hire the Talent They Need
Moresco (5018 Jp) – True Value Is Tested in Times of Adversity
Asahi Intecc (7747 JP): Medical Division Drives 9M Result; FY25 Guidance Raised; Buyback Announced
Macnica Holdings (3132 JP) – Lingering Weakness in Semiconductors…

[Japan Buybacks] ShinEtsu Chem (4063) – How the FCSR Works

Late April, Shin Etsu Chemical (4063 JP) announced a huge ¥500bn 200mm shares (10.2%) buyback. That was never ever going to happen. That needed a ¥2500 share price, not ¥4300+.
But it was big, and started in late May. Today, they announced how. It is a “Japan ASR”, the Nomura version, this time with an interesting twist.
In response to a couple of reader questions today, I provide a brief overview of how these things work.

Many Companies in Japan Are Still Hesitant to Hire the Talent They Need

By Aki Matsumoto

Given the rapid aging of Japan’s population, if the current composition of the board of directors continues, the number of directors will further age in the future.
A board that embraces diverse age range is likely to embrace people with diverse backgrounds and skillsets, and a diverse board composition is likely to have positive impact on management.
In Japan, with strong peer pressure, CEOs controlling human resources, % independent directors and female board members in 40% and 15%, many companies are hesitant to hire talent they need.

Moresco (5018 Jp) – True Value Is Tested in Times of Adversity

By Sessa Investment Research

In FY2025/2, MORESCO Corporation (hereinafter referred to as “MORESCO” or “the Company”) reported net sales of JPY 34,374 mn (+7.8% YoY), driven by increased sales volumes in Japan and overseas, as well as revision to selling prices.
Operating profit rose by only 13.6% YoY due to higher R&D expenses, while ordinary profit remained flat, weighed down by a decrease in foreign exchange gains and profits from equity-method investments.
Profit attributable to owners of parent (hereinafter, net profit) fell by 21.1% YoY owing to a deterioration in extraordinary gains and losses.

Asahi Intecc (7747 JP): Medical Division Drives 9M Result; FY25 Guidance Raised; Buyback Announced

By Tina Banerjee

Asahi Intecc (7747 JP) announced 9MFY25 result, with double-digit growth across all key parameters. Revenue increased 14% YoY to ¥91.8B, driven by 16% growth in medical division.
The company has raised guidance for FY25 revenue and operating profit and reduced net profit guidance to reflect better-than-expected performance of medical division and booking of impairment loss.
Asahi will buy back up to 8.8M shares (representing 3.2% of issued shares) for ¥15B. Buyback will be conducted from May 16, 2025 to October 31, 2025.

Macnica Holdings (3132 JP) – Lingering Weakness in Semiconductors…

By Astris Advisory Japan

Consolidated OP declined in Q4 FY3/25 (-40.7% QoQ), reflecting weakness in Semiconductors due to continued sluggishness in Industrial Equipment and higher SG&A triggered by the consolidation of a subsidiary.
The segment OP for Semiconductors declined sharply (-68.6% QoQ), lowering the OP margin (Q3 FY3/25 3.4%, Q4 FY3/25 1.1%).
As a result, the consolidated OP margin also declined (Q3 FY3/25 4.1%, Q4 FY3/25 2.5%).

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May 21

Daily Brief China: Contemporary Amperex Technology, Melco International Development, Trip.com, Nationz Technologies Inc A, Baidu, JD.com Inc (ADR), ZTO Express Cayman , ATRenew , Shouhui Tech, Eastroc Beverage Group and more

By Smartkarma Daily Briefs | China, Daily Briefs

In today’s briefing:

CATL (3750 HK): Reassessing Index Fast Entry; Need Overallotment Exercised by Tomorrow
Melco (200 HK) Trading “Cheap” Into Rights Issue
Trip.com (TCOM): 1Q25, Hotel Booking Revenue Up by 23%
CSI All Share Semiconductor Index Rebalance Preview: 13 Potential Changes in June
[Baidu (BIDU US, SELL, TP US$88) Preview]: Search Traffic’s Decline in Relevance the No.1 Issue
[JD.com, Inc (JD US, BUY, TP US$54) TP Change]: C1Q25 Review: The Good Time Is About to Pause
ZTO Express Q125 Results: Adj EBITDA Barely Moved Despite +19% Y/Y Parcel Volume Growth | AVOID
RERE: 1Q25 Earnings
Pre-IPO Shouhui Tech (PHIP Updates) – Some Points Worth the Attention
Eastroc Beverage A/H Listing – Energized – Fast Growth, Better Margins

CATL (3750 HK): Reassessing Index Fast Entry; Need Overallotment Exercised by Tomorrow

CATL (3750 HK) is trading at a 6.9% premium to Contemporary Amperex Technology (CATL) (300750 CH) – if that is due to expectations of Fast Entry, that premium could drop.
CATL (3750 HK) has not announced the overallotment option as exercised and that puts Fast Entry at risk. An announcement prior to the close tomorrow could lead to Fast Entry.
The earliest inclusion could be at the close on 30 May while the other global index inclusion looks likely in December.

Melco (200 HK) Trading “Cheap” Into Rights Issue

By David Blennerhassett

In my stub monitor flagged in StubWorld: Toyota Industries/Motors, GMO Internet, I see Melco International Development (200 HK) is trading “cheap” to Melco Resorts & Entertainment (MLCO US).
Last month, Melco proposed one new rights share for two existing shares at a subscription price of HK$1.0286/share, a 72.93% discount to undisturbed, and a 64.28% discount to the TERP.
Lawrence Ho will backstop ~54% of the rights, if need be. Depending on the level of support for the rights, expect Lawrence to further chip away against minorities.

Trip.com (TCOM): 1Q25, Hotel Booking Revenue Up by 23%

By Ming Lu

Total travelers grew by 26% YoY in China in 1Q25, up from 13% YoY in 4Q24.
Trip.com’s total revenue grew by 16% YoY in 1Q25, among which hotel booking grew by 23%.
We believe operating margin will be stable, as the growth of sales and market expense has been slowing down.

CSI All Share Semiconductor Index Rebalance Preview: 13 Potential Changes in June

The review period for the June rebalance of the CSI All Share Semiconductor Index ended 30 April. The changes should be announced on 30 May and implemented on 13 June.
We forecast 4 adds and 9 deletes for the index with a one-way turnover of 2.7% and a round-trip trade of CNY 1.2bn (US$167m).
Some stocks have overlaps with changes to the CES China Semiconductor Chips Index and the CNI Semiconductor Chips Index and there will be increased passive flow for those stocks.

[Baidu (BIDU US, SELL, TP US$88) Preview]: Search Traffic’s Decline in Relevance the No.1 Issue

By Ying Pan

We expect Baidu to report C1Q25 top line,non-GAAP operating profit and GAAP net income inline, (4.2%) and (8.2%) vs. the consensus, and C2Q25 top line guidance (2.7%) vs. the consensus
Although we expect rebounding consumption to help BIDU’s advertising business, its traffic share losses were alarming. Further, we expect some of BIDU’s core advertising categories to experience sluggish recovery;
We maintain our view that Baidu lacks visible growth drivers, reiterate our SELL rating, and cut its TP to US$88.

[JD.com, Inc (JD US, BUY, TP US$54) TP Change]: C1Q25 Review: The Good Time Is About to Pause

By Ying Pan

JD.com C1Q25 revenue exceeded our estimate/consensus by 2.4%/4.3% and adjusted NI by 19%/20%, thanks to better-than-expected cross selling from trade-in subsidies and gross margin;
We, however, raise full year new businesses operating loss from RMB(6bn) to RMB(12bn). We estimate 80% of the loss will come from food delivery;
In lieu of the continued uncertainty in take-out investments, we remove JD.com from TOP BUY while cut TP from US$58 to US$54.

ZTO Express Q125 Results: Adj EBITDA Barely Moved Despite +19% Y/Y Parcel Volume Growth | AVOID

By Daniel Hellberg

In Q125, ZTO’s rate of volume growth accelerated, but it still lagged overall market growth
Despite a sharp (-18% Y/Y) decline in SG&A expenses, OpInc margin fell by -70 bps Y/Y
Guidance suggests ZTO will chase volume share rest of FY25, pressuring margins further

RERE: 1Q25 Earnings

Key 1Q25 takeaways include: 1) rising trade-in activity continues to drive growth, powerful lead indicators around ongoing government subsidies on new mobile phones, accelerating momentum with JD.com, and continued growth in AHS offline stores 2) more recent initiatives to enhance AHS Recycle’s brand, with a focus on the company’s comprehensive suite of services and competitive pricing, likely further stimulates growth in 1P business volumes and related contributions and 3) while management remains focused on reinvesting in the business to further accelerate top line growth, we look for senior officials to increasingly return excess capital to shareholders as profitability continues to scale via ongoing share repurchases and the potential for introducing a regular quarterly dividend in the not-too-distant future.

Pre-IPO Shouhui Tech (PHIP Updates) – Some Points Worth the Attention

By Xinyao (Criss) Wang

Shouhui’s business model does not have high barriers, with weak ability to resist risks.For investors, this is a bet on the industry’s prospects and a test of the management’s ability.
The “unified reporting and underwriting” policy has become the turning point in this industry. If financial performance continues to deteriorate, Shouhui may undergo business restructuring or seek M&As.
Due to increasing competition, decreasing commissions, disintermediation trend, tightening policy environment, we are not optimistic about the outlook of Shouhui. The valuation of Shouhui would be lower than peers.

Eastroc Beverage A/H Listing – Energized – Fast Growth, Better Margins

By Sumeet Singh

Eastroc Beverage Group (605499 CH) (EB), a China-based functional beverage company, aims to raise around US$1bn in its H-share listing.
According to Frost & Sullivan (F&S), EB has been the largest functional beverage company in China in terms of sales volume for four consecutive years since 2021.
In this note, we look at its past performance and other deal dynamics that might impact the listing.

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May 21

Most Read: Contemporary Amperex Technology (CATL), Contemporary Amperex Technology, Yang Ming Marine Transport, Mitsubishi Logisnext Co., Ltd., Seres Group , Melco International Development, Toyota Industries, Shin Etsu Chemical, Sung Kwang Bend and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

CATL (3750 HK) H-Share IPO: Fast Entry to Global Indices Is Touch & Go
CATL (3750 HK): Reassessing Index Fast Entry; Need Overallotment Exercised by Tomorrow
[Japan M&A/Activism] Toyota Industries (6201) Deal Could Be Announced Near-Term
TIP Taiwan Value High Dividend Index Rebalance: 10 Changes Implemented This Week; US$2.2bn Trade
[Japan M&A] Mitsubishi Logisnext (7105) – The Deal Still Looks Mighty Good
China A50 ETFs Rebalance Preview: One Change Highly Likely
Melco (200 HK) Trading “Cheap” Into Rights Issue
StubWorld: Toyota Industries/Motors, GMO Internet
[Japan Buybacks] ShinEtsu Chem (4063) – How the FCSR Works
KOSDAQ150 Index Rebalance Preview: Announcement Around the Corner

CATL (3750 HK) H-Share IPO: Fast Entry to Global Indices Is Touch & Go

Contemporary Amperex Technology (CATL) (300750 CH) could raise up to US$5.1bn in its H-share listing if the Offer Size Adjustment Option and the Overallotment Option are both exercised.
There is a huge allocation to cornerstone investors that is locked up for 6 months. That significantly reduces float and the probability of Fast Entry inclusion to global indexes.
CATL (3750 HK) will be added to Southbound Stock Connect from the open of trading on 16 June following the end of the Price Stabilisation period.

CATL (3750 HK): Reassessing Index Fast Entry; Need Overallotment Exercised by Tomorrow

CATL (3750 HK) is trading at a 6.9% premium to Contemporary Amperex Technology (CATL) (300750 CH) – if that is due to expectations of Fast Entry, that premium could drop.
CATL (3750 HK) has not announced the overallotment option as exercised and that puts Fast Entry at risk. An announcement prior to the close tomorrow could lead to Fast Entry.
The earliest inclusion could be at the close on 30 May while the other global index inclusion looks likely in December.

[Japan M&A/Activism] Toyota Industries (6201) Deal Could Be Announced Near-Term

Friday 25 April, Toyota Industries (6201 JP) released earnings for last year, guidance for this year and a Bloomberg scoop suggested Toyota Motors chairman Akio TOYODA would launch an MBO.
In some ways surprising, but activists/”noisy shareholders” and TSE guidance on dual listings caused pressure, and Toyota Motors was trying to walk the good governance walk.
I discussed the situation here on Day 1, and here a few days later. Long-only shareholders sold. Today, Kyodo had a follow-up article. Then Nikkei. Looks more solid now.

TIP Taiwan Value High Dividend Index Rebalance: 10 Changes Implemented This Week; US$2.2bn Trade

There are 10 changes for the TIP Taiwan Value High Dividend Index in May. The Yuanta Taiwan Value High Dividend ETF (00940 TT) has an AUM of US$4.4bn.
Estimated one-way turnover is 25.2% and there are 12 stocks with over 4 days of ADV to trade. The rebalance commenced yesterday and will end on Friday.
An equal weighted basket of inclusions has outperformed an equal weighted basket of deletions over the last month. That could continue near-term as the ETF continues to rebalance their portfolio.

[Japan M&A] Mitsubishi Logisnext (7105) – The Deal Still Looks Mighty Good

On 9 May Mitsubishi Logisnext Co., Ltd. (7105 JP) delayed earnings by 30 minutes. Shares popped. Then earnings were released, no deal, and shares crashed. Now they are rebounding.
But they remain volatile and subject to dips like the one this AM -5% at one point. Fears may be due to the idea that first smoke here was Dec-2024.
5 months later, no deal yet. Bids were due pre-earnings but with tariffs and writedowns, one wonders if bidders were waiting for results.

China A50 ETFs Rebalance Preview: One Change Highly Likely

With the review cutoff done, there could be one change for the iShares A50 China (2823 HK)/ CSOP China A50 (HKD) (2822 HK) ETFs in June.
As the highest ranked non-ETF member, Seres Group (601127 CH) could replace China United Network A (600050 CH) in the ETF at the close on 20 June.
China United Network A (600050 CH) was added to the ETF in March, so this could be a very short stint in the ETF for the stock.

Melco (200 HK) Trading “Cheap” Into Rights Issue

By David Blennerhassett

In my stub monitor flagged in StubWorld: Toyota Industries/Motors, GMO Internet, I see Melco International Development (200 HK) is trading “cheap” to Melco Resorts & Entertainment (MLCO US).
Last month, Melco proposed one new rights share for two existing shares at a subscription price of HK$1.0286/share, a 72.93% discount to undisturbed, and a 64.28% discount to the TERP.
Lawrence Ho will backstop ~54% of the rights, if need be. Depending on the level of support for the rights, expect Lawrence to further chip away against minorities.

StubWorld: Toyota Industries/Motors, GMO Internet

By David Blennerhassett

Given recent – and ongoing developments – with Toyota Industries (6201 JP) and GMO Internet (4784 JP), I’m revisiting my NAVs.
Preceding my comments on the Toyota Group and GMO, are the current setup/unwind tables for Asia-Pacific Holdcos.
These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation >20%.

[Japan Buybacks] ShinEtsu Chem (4063) – How the FCSR Works

Late April, Shin Etsu Chemical (4063 JP) announced a huge ¥500bn 200mm shares (10.2%) buyback. That was never ever going to happen. That needed a ¥2500 share price, not ¥4300+.
But it was big, and started in late May. Today, they announced how. It is a “Japan ASR”, the Nomura version, this time with an interesting twist.
In response to a couple of reader questions today, I provide a brief overview of how these things work.

KOSDAQ150 Index Rebalance Preview: Announcement Around the Corner

With the review period for the June rebalance complete, we highlight 11 potential changes for the KOSDAQ 150 Index (KOSDQ150 INDEX).
The estimated impact on the potential inclusions ranges from 0.2-7.5 days of ADV while the impact on the potential deletions varies from 0.2-5.8 days of ADV.
The forecast adds have outperformed the forecast deletes over the last 6-7 months with a big move higher in the last month. Trim positions into strength.

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

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May 20

Daily Brief ESG: Reasons Why the TSE’s Request to “improve IR System” Seems to Be Ineffective This Time and more

By Smartkarma Daily Briefs | Daily Briefs, ESG

In today’s briefing:

Reasons Why the TSE’s Request to “improve IR System” Seems to Be Ineffective This Time

Reasons Why the TSE’s Request to “improve IR System” Seems to Be Ineffective This Time

By Aki Matsumoto

TSE plans to mandate the development of IR system, but since most companies disclosed that they have already taken action, fewer companies will move to do something from now on.
Analysis of IR disclosure and stock valuations showed that IR disclosure scores did not differ among the five groups of companies by percentage change in Tobin’s Q.
The fact that many companies haven’t been able to provide capital profitability and management strategies that investors seek has led to reluctance to hold briefings to communicate with overseas investors.

💡 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

May 20

Daily Brief Thematic (Sector/Industry): Ohayo Japan | Wall Street Steady as Yields Ease and more

By Smartkarma Daily Briefs | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

Ohayo Japan | Wall Street Steady as Yields Ease
US Middle East AI Splurge. A Bold Move But Also A Curious Affair
Japan Morning Connection: Computex Fails to Excite, but Dip Buyers Stepping in OTD
Monday Delight: 19/05/25
#149 India Insight: IndusInd Flags ₹674cr Error, ReNew Adds 2.8GW, Defence up ₹50Kcr

Ohayo Japan | Wall Street Steady as Yields Ease

By Mark Chadwick

The S&P 500 rose 0.1% to 5,963.60, its sixth straight gain, as Treasury yields eased after spiking on Moody’s downgrade
Nippon Steel plans to invest up to 2 trillion yen in U.S. production if its acquisition of U.S. Steel is approved by the Trump administration.
3D Investment Partners, a Singapore-based activist shareholder fund, has increased its stake in Mitsui-Soko Holdings

US Middle East AI Splurge. A Bold Move But Also A Curious Affair

By William Keating

AMD & NVIDIA both pocket deals to equip 500MW data centers in Saudi Arabia over the next 5 years.
UAE announced plans to build 5GW of data centre capacity with local champion G42 leading the charge. Microsoft and Cerebras were notable by their absence last week.
The Middle East deals are good news for US AI/Technology champions however the benefits will likely take years to fully accrue.

Japan Morning Connection: Computex Fails to Excite, but Dip Buyers Stepping in OTD

By Andrew Jackson

NVDA opening its AI ecosystem to the likes of Fujitsu and Qualcomm.
Intel’s make-or-break 18A process Panther lake seems to be well received at first look.
Toyota announces Y3trn worth of loans for its Y6trn Industries acquisition, removing concerns for raise.

Monday Delight: 19/05/25

By Contrarian Cashflows

Each week, I’ll share five intriguing investment ideas that recently caught my attention. These ideas are meant to spark your research and help you kickstart the week ahead with fresh insights.
Because these ideas are the result of my first-level idea generation process, they require more in depth research. Therefore, the ideas will often be concise, with occasional references to valuable work from other practitioners that I encourage you to explore.
If you have something fascinating to share that could benefit me and the wider community, don’t hesitate to send it my way—I’d love to hear from you!

#149 India Insight: IndusInd Flags ₹674cr Error, ReNew Adds 2.8GW, Defence up ₹50Kcr