Smartkarma Daily Briefs

By Nippon Investment Bespoke Research UK

Under its mission of “Creating a new view of the world with the AViC Team as the business driver,” AViC (hereafter, the Company) provides a full range of services related to digital marketing, from strategy development to execution.
In addition, the Company strives for and ensures “quality growth” by maintaining and improving profitability while pursuing sustainable business growth.
One of the Company’s distinguishing characteristics is its high productivity compared to competitors.

Japan Lifeline Co., Ltd (7575 JP): Research Update

Japan Lifeline [JLL] produced historical semi-annual earnings with FY24 1H OP of ¥6,260mil (+14.4% YoY) on sales of ¥27,985mil (+11.4% YoY), which landed above expectation.
Despite this robust performance, JLL has not revised its full-year FY24 guidance as the 2H presents with several potential earnings risks such as 1) fewer operating days, which will impact device sales, 2) an increase in outsourced products reducing GPM, 3) the possibility of a change in the competitive landscape for one of JLL’s core products.
The company’s shareholder return policy is the higher of (1) a pay-out ratio of 40% or (2) a Dividend on Equity [DOE] of 5%.

Tsubakimoto Kogyo (8052 Jp) – Executed a Share Buyback of 450,000 Shares

Tsubakimoto Kogyo announced at 10:00 a.m. on November 29, 2024 that it had completed its share buyback, which it announced following the previous day’s market close.
The Company explained that the reason for the share buyback is to improve shareholder returns and capital efficiency and to enable the implementation of an agile and flexible capital policy.
In its Q2 FY2025/3 earnings briefing held on October 31, 2024, the Company reported results that fell slightly short of plan, leading to a temporary drop in its share price.

In the Dissolution of the Parent-Subsidiary Listing, the Second Step Is Key for the Parent Company

By Aki Matsumoto

The measure to implement 100% inclusion or separation of subsidiary profits from parent company profits is only the first step, and this alone won’t reflect positively on the stock price.
The key is the second phase of measures to strengthen the parent company’s overall ability to generate cash flow by investing in highly profitable businesses after restructuring its business portfolio.
Hitachi is one of the few cases where it quickly implemented the second phase and reflected growth in corporate value in its stock price through realization of cash flow expansion.

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Dec 04

Most Read: Kioxia Holdings , Korea Stock Exchange Kospi Index, Sanrio, Phison Electronics, Persistent Systems, Goodman Group, HKBN Ltd, Meituan, Auckland Intl Airport and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

Kioxia (285A) IPO: Index Entry Timeline & Overhang from Plans to Increase Float
Breaking: Korea Drops Martial Law, Local Markets in Turmoil—What’s the Short-Term Trade Play Here?
Sanrio (8136 JP) – Kitty Behaving Badly
TIP Customized Taiwan Select High Div Index Rebalance Preview: US$2.8bn Trade as Adds Outperform
NIFTY200 Momentum30 Index Rebalance Preview: 65% One-Way Turnover and US$1.6bn Trade
Goodman Group (GMG AU) Placement: Limited Index Flows
Goodman Group Placement – Large Shareholder Looking to Raise US$1.2bn but Discount Is Tight
HKBN (1310 HK): China Mobile’s “Fair” Tendering Offer
HSI, HSCEI, HSTECH, HSIII Index Rebalance: US$3.4bn of Flows Post Capping (Dec 2024)
Auckland Airport (AIA NZ) Placement: Potential Index Flows

Kioxia (285A) IPO: Index Entry Timeline & Overhang from Plans to Increase Float

Kioxia Holdings (285A JP)‘s listing has been approved by the JPX and the stock is expected to start trading on the Prime Market from 18 December.
At the mid-point of the IPO price range of JPY 1390-1520/share, Kioxia Holdings (285A JP) will be valued at JPY 784bn (US$5.24bn).
TOPIX inclusion will take place in January while inclusion in global indices is likely to take place in May and June. Selling stock to increase float will be an overhang.

Breaking: Korea Drops Martial Law, Local Markets in Turmoil—What’s the Short-Term Trade Play Here?

By Sanghyun Park

Martial law has been declared 11 times since 1945, but this is the first since Korea’s post-‘90 democratization.
The Martial Law Command’s first proclamation blocks parliament, raising legal questions about its constitutionality and making any immediate attempt to end martial law uncertain.
Defense and telecom stocks could outperform short-term due to martial law, making them strong trading targets to watch.

Sanrio (8136 JP) – Kitty Behaving Badly

By Travis Lundy

Sanrio (8136 JP) announced a deal last week which I discussed in Sanrio (8136 JP) Large Secondary Offering – Don’t Say Hello Kitty! Too Soon. Next day it fell sharply.
There was shorting involved, and since then the stock has rallied 18% to clear the undisturbed price which itself was an all-time high, up 5% in the previous two days.
There is some LO buying, some HF covering, but a LOT of day-traders. In five days the stock has traded 903% of its Maximum Real World Float. That’s a lot.

TIP Customized Taiwan Select High Div Index Rebalance Preview: US$2.8bn Trade as Adds Outperform

The TIP Taiwan Select High Dividend ETF (00919 TW) tracks the TIP Customized Taiwan Select High Dividend Index and has an AUM of TWD 285bn (US$8.75bn).
We forecast 8 changes a side at the December rebalance with an estimated one-way turnover of around 16% and a round-trip trade of around US$2.8bn.
An equal weighted basket of potential inclusions has outperformed an equal weighted basket of potential deletions since the start of July with most of the outperformance coming from September.

NIFTY200 Momentum30 Index Rebalance Preview: 65% One-Way Turnover and US$1.6bn Trade

There could be 19 changes for the Nifty200 Momentum 30 Index that will be implemented at the close on 30 December. There are some stocks from the new F&O inclusions.
If all changes are on expected lines, one-way turnover is estimated at 65.2% and that will result in a one-way trade of INR 71bn (US$837m).
The potential inclusions have outperformed the potential deletions since the start of July. The pace picked up over the last month as we neared the end of the review period.

Goodman Group (GMG AU) Placement: Limited Index Flows

China Investment Corp owns 7.84% of Goodman Group (GMG AU) and is looking to sell 50.4m shares (2.64% of shares out) at a price range of A$37.55-37.6/share, a tiny discount.
Goodman Group (GMG AU) has run away from its peers over the last couple of years and there could be a move lower in the stock following the placement.
There will be limited passive buying in the short-term coinciding with the placement. There will be some more passive buying in February.

Goodman Group Placement – Large Shareholder Looking to Raise US$1.2bn but Discount Is Tight

CIC is looking to raise around US$1.2bn, via selling around 2.6% of its stake in Goodman Group (GMG AU) , via a block trade.
Goodman’s shares have performed exceptionally well over the past year, driven by its pivot towards data centers.
In this note, we will talk about the placement and run the deal through our ECM framework.

HKBN (1310 HK): China Mobile’s “Fair” Tendering Offer

China Mobile (941 HK) was a logical suitor for HKBN Ltd (1310 HK). A non-PRC (or government-affiliated) corporation taking over a media/broadband/telco in Hong Kong is probably a non-starter.
China Mobile has a made a pre-conditional voluntary Offer at HK$5.23/share, a 40.97% premium to undisturbed. The price is final.
Pre-Cons are the usual suspects (NDRC, Mofcom & SASAC). The Offer itself conditional on a 50% acceptance hurdle, with 24.96% in the bag. The intention is to maintain HKBN’s listing.

HSI, HSCEI, HSTECH, HSIII Index Rebalance: US$3.4bn of Flows Post Capping (Dec 2024)

The December rebalance of the HSI, HSCEI, HSTECH and HSIII indices will use today’s closing prices to cap the index constituent weights at 8%/12%. This will lead to large flows.
The round-trip trade across all stocks across the four indices is estimated at HK$26.14bn (US$3.4bn).
Alibaba, Tencent, Midea Group, Kuaishou Technology, NIO, HSBC Holdings and New Oriental Education & Techn are the largest buys. Meituan, Xiaomi, JD.com, AIA Group and NetEase are the largest sells.

Auckland Airport (AIA NZ) Placement: Potential Index Flows

Auckland City Council is looking to sell 163.23m shares of Auckland Intl Airport (AIA NZ) in a clean-up trade. This is big at NZ$1.3bn and 64 days of ADV.
The placement was expected by the market and the stock has run up despite that. The stock is in a trading halt and should open lower.
There will be passive buying at the time of settlement of the placement shares and that will mop up around 15% of the offering.

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Dec 04

Daily Brief Industrials: Auckland Intl Airport, Young Poong Precision, Sg Fleet, Xinjiang Goldwind Science & Technology, Copart Inc, Tsubakimoto Kogyo, Singapore Post, Amaero International Ltd and more

By Smartkarma Daily Briefs | Daily Briefs, Industrials

In today’s briefing:

Auckland Airport (AIA NZ) Placement: Potential Index Flows
A Review of Tender Offers in Korea in 2024
SG Fleet (SGF AU): Now PEP’s A$3.50/Share Firm Offer
Xinjiang Goldwind (2208 HK): We Should Be More Prudent
Copart’s Revolutionary Edge: Tapping into the Vehicle Miles Traveled Surge! – Major Drivers
Tsubakimoto Kogyo (8052 Jp) – Executed a Share Buyback of 450,000 Shares
Singapore Post – Australian logistics to be divested for c A$1bn
Amaero International Ltd – Locking in supply of US melt and forged titanium bar

Auckland Airport (AIA NZ) Placement: Potential Index Flows

Auckland City Council is looking to sell 163.23m shares of Auckland Intl Airport (AIA NZ) in a clean-up trade. This is big at NZ$1.3bn and 64 days of ADV.
The placement was expected by the market and the stock has run up despite that. The stock is in a trading halt and should open lower.
There will be passive buying at the time of settlement of the placement shares and that will mop up around 15% of the offering.

A Review of Tender Offers in Korea in 2024

By Douglas Kim

In this insight, we review the major tender offers of Korean companies in 2024. The tender offers have mostly been profitable for the investors in these targeted companies.
What is also impressive is that even after the 1st day of trading (post tender offer announcement), there have been extra alpha for the following week and month.
The number of tender offers in Korea increased from 6 in 2020 to 12 in 2021, 7 in 2022, 18 in 2023, and 28 in 2024.

SG Fleet (SGF AU): Now PEP’s A$3.50/Share Firm Offer

Back on the 25 November, SG Fleet (SGF AU) (SGF), an Aussie provider of fleet leasing services, announced a A$3.50/share non-binding/indicative proposal from Sydney PE outfit Pacific Equity Partners (PEP).
The initial due diligence period was extended one week to the 6th December. That short timeframe suggested a firm Offer was imminent. Both parties have now entered into a SID.
Terms remains the same as the NBIO. SGF’s largest shareholder, Super Group (SPG SJ) (53.58%), is supportive. Implementation is expected in the 1Q25.

Xinjiang Goldwind (2208 HK): We Should Be More Prudent

By Osbert Tang, CFA

With a massive 125% rally YTD, Xinjiang Goldwind Science & Technology (2208 HK) is no longer cheap. Its yield of 3.5% for FY25 cannot stand out as attractive.
Good 9M24 earnings growth is partly due to an extremely low base last year. However, the average bidding price of WTG suppliers is still 50% below that in early 2022.
Net operating cash outflow surged 37.8% YoY, adding pressure to its balance sheet. Its gearing has increased by 7pp over the last nine months.

Copart’s Revolutionary Edge: Tapping into the Vehicle Miles Traveled Surge! – Major Drivers

Copart, Inc. delivered their first-quarter fiscal 2025 results amidst significant environmental challenges and dynamic industry trends.
The firm exhibited strong performance, particularly in their insurance segment and response to natural disasters, while also experiencing some cost increases related to capacity expansion and hurricane preparation.
A critical highlight was Copart’s adept response to consecutive hurricanes in the southeastern United States, notably Hurricanes Helane and Milton.

Tsubakimoto Kogyo (8052 Jp) – Executed a Share Buyback of 450,000 Shares

By Research as a Service (RaaS)

Tsubakimoto Kogyo announced at 10:00 a.m. on November 29, 2024 that it had completed its share buyback, which it announced following the previous day’s market close.
The Company explained that the reason for the share buyback is to improve shareholder returns and capital efficiency and to enable the implementation of an agile and flexible capital policy.
In its Q2 FY2025/3 earnings briefing held on October 31, 2024, the Company reported results that fell slightly short of plan, leading to a temporary drop in its share price.

Singapore Post – Australian logistics to be divested for c A$1bn

By Edison Investment Research

Following Singapore Post’s resilient H1 results in November, the company has now announced that it has agreed to sell its Australian logistics business for an enterprise value of c A$1bn to a private equity investor. The disposal is likely to result in the reporting of a gain on disposal of over S$300m. The proceeds are likely to be used to pay down debt and to potentially pay a special dividend to shareholders.

Amaero International Ltd – Locking in supply of US melt and forged titanium bar

RaaS has published a flash comment on advanced materials manufacturing group Amaero International (ASX:3DA) following the company’s announcement yesterday that it has signed a three-year supply agreement for US melt and forged titanium bar with The Perryman Company, a US-based privately owned, fully-integrated manufacturer of titanium products.
For the term of the contract, Amaero says Perryman will be its preferred and primary supplier of high-quality, reliable and scalable US melt and forged titanium alloy bar feedstock for the atomisation of premium spherical powder.
The contract guarantees that Amaero will have sufficient titanium bars to meet anticipated contractual demand for Ti64 powder in an environment of heightening tariff wars between the US and China, limited sources of supply for critical metals and ongoing demand from the US defence, aerospace and space components sector for full lot traceability of feedstock.

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Dec 04

Daily Brief Industrials: Auckland Intl Airport, Young Poong Precision, Sg Fleet, Xinjiang Goldwind Science & Technology, Copart Inc, Tsubakimoto Kogyo, Singapore Post, Amaero International Ltd and more

By Smartkarma Daily Briefs | Daily Briefs, Industrials

In today’s briefing:

Auckland Airport (AIA NZ) Placement: Potential Index Flows
A Review of Tender Offers in Korea in 2024
SG Fleet (SGF AU): Now PEP’s A$3.50/Share Firm Offer
Xinjiang Goldwind (2208 HK): We Should Be More Prudent
Copart’s Revolutionary Edge: Tapping into the Vehicle Miles Traveled Surge! – Major Drivers
Tsubakimoto Kogyo (8052 Jp) – Executed a Share Buyback of 450,000 Shares
Singapore Post – Australian logistics to be divested for c A$1bn
Amaero International Ltd – Locking in supply of US melt and forged titanium bar

Auckland Airport (AIA NZ) Placement: Potential Index Flows

Auckland City Council is looking to sell 163.23m shares of Auckland Intl Airport (AIA NZ) in a clean-up trade. This is big at NZ$1.3bn and 64 days of ADV.
The placement was expected by the market and the stock has run up despite that. The stock is in a trading halt and should open lower.
There will be passive buying at the time of settlement of the placement shares and that will mop up around 15% of the offering.

A Review of Tender Offers in Korea in 2024

By Douglas Kim

In this insight, we review the major tender offers of Korean companies in 2024. The tender offers have mostly been profitable for the investors in these targeted companies.
What is also impressive is that even after the 1st day of trading (post tender offer announcement), there have been extra alpha for the following week and month.
The number of tender offers in Korea increased from 6 in 2020 to 12 in 2021, 7 in 2022, 18 in 2023, and 28 in 2024.

SG Fleet (SGF AU): Now PEP’s A$3.50/Share Firm Offer

Back on the 25 November, SG Fleet (SGF AU) (SGF), an Aussie provider of fleet leasing services, announced a A$3.50/share non-binding/indicative proposal from Sydney PE outfit Pacific Equity Partners (PEP).
The initial due diligence period was extended one week to the 6th December. That short timeframe suggested a firm Offer was imminent. Both parties have now entered into a SID.
Terms remains the same as the NBIO. SGF’s largest shareholder, Super Group (SPG SJ) (53.58%), is supportive. Implementation is expected in the 1Q25.

Xinjiang Goldwind (2208 HK): We Should Be More Prudent

By Osbert Tang, CFA

With a massive 125% rally YTD, Xinjiang Goldwind Science & Technology (2208 HK) is no longer cheap. Its yield of 3.5% for FY25 cannot stand out as attractive.
Good 9M24 earnings growth is partly due to an extremely low base last year. However, the average bidding price of WTG suppliers is still 50% below that in early 2022.
Net operating cash outflow surged 37.8% YoY, adding pressure to its balance sheet. Its gearing has increased by 7pp over the last nine months.

Copart’s Revolutionary Edge: Tapping into the Vehicle Miles Traveled Surge! – Major Drivers

Copart, Inc. delivered their first-quarter fiscal 2025 results amidst significant environmental challenges and dynamic industry trends.
The firm exhibited strong performance, particularly in their insurance segment and response to natural disasters, while also experiencing some cost increases related to capacity expansion and hurricane preparation.
A critical highlight was Copart’s adept response to consecutive hurricanes in the southeastern United States, notably Hurricanes Helane and Milton.

Tsubakimoto Kogyo (8052 Jp) – Executed a Share Buyback of 450,000 Shares

By Research as a Service (RaaS)

Tsubakimoto Kogyo announced at 10:00 a.m. on November 29, 2024 that it had completed its share buyback, which it announced following the previous day’s market close.
The Company explained that the reason for the share buyback is to improve shareholder returns and capital efficiency and to enable the implementation of an agile and flexible capital policy.
In its Q2 FY2025/3 earnings briefing held on October 31, 2024, the Company reported results that fell slightly short of plan, leading to a temporary drop in its share price.

Singapore Post – Australian logistics to be divested for c A$1bn

By Edison Investment Research

Amaero International Ltd – Locking in supply of US melt and forged titanium bar

RaaS has published a flash comment on advanced materials manufacturing group Amaero International (ASX:3DA) following the company’s announcement yesterday that it has signed a three-year supply agreement for US melt and forged titanium bar with The Perryman Company, a US-based privately owned, fully-integrated manufacturer of titanium products.
For the term of the contract, Amaero says Perryman will be its preferred and primary supplier of high-quality, reliable and scalable US melt and forged titanium alloy bar feedstock for the atomisation of premium spherical powder.
The contract guarantees that Amaero will have sufficient titanium bars to meet anticipated contractual demand for Ti64 powder in an environment of heightening tariff wars between the US and China, limited sources of supply for critical metals and ongoing demand from the US defence, aerospace and space components sector for full lot traceability of feedstock.

Before it’s here, it’s on Smartkarma

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Dec 04

Daily Brief Energy/Materials: Latin Resources, Greatview Aseptic Packaging, Crude Oil, Iron Ore, Natural Gas, Occidental Petroleum, Lake Victoria Gold , New Zealand Energy, Trigon Metals and more

By Smartkarma Daily Briefs | Daily Briefs, Energy & Materials Sector

In today’s briefing:

Latin Resources (LRS AU): 16th January Merger Vote
Greatview Aseptic Packaging (468.HK) – Newjf Already Has an Upper Hand
Latin Resources (LRS AU): Pilbara Minerals (PLS AU)’s Scheme Vote on 16 January
[US Crude Oil Options Weekly 2024/48] WTI Drops on Easing Supply Concerns
IO Weekly Technicals Review [2024/48]: Bullish Trend to Persist
[US Nat Gas Options Weekly 2024/48] Henry Hub’s Uptrend Continues on Bullish Demand Outlook
[Earnings Review] Occidental Beats Q3 Estimates on Robust Output
LVG: Imwelo Project Receives Forward Purchase Agreement
New Zealand Energy Corp. (TSX-V: NZ): Better than expected results at Tariki-5A
TM: Kombat Mine to Be Acquired in All-Cash Transaction

Latin Resources (LRS AU): 16th January Merger Vote

Back on the 15th August, lithium play Latin Resources (LRS AU) entered into a Scheme with Pilbara Minerals (PLS AU). PLS offered 0.07 new PLS shares for every LRS share.
The Scheme Booklet was slightly delayed to reflect Pilbara’s recently adjusted FY25 guidance – nothing deal/project related.
The Scheme Booklet is now out, with a Scheme Meeting to be held on the 16th Jan. Expected implementation on the 4th Feb. The IE (BDO) says fair & reasonable.

Greatview Aseptic Packaging (468.HK) – Newjf Already Has an Upper Hand

By Xinyao (Criss) Wang

Newjf’s Yuan Xunjun and Guo Xiaohong are both lawyers. They should be more familiar with the Pre-Condition requirements. Newjf has obtained SAMR clearance and we think Newjf will fulfill Pre-Conditions.
Bi Hua and Hong Gang’s “new initiative” based on Nov.28 announcement may not necessarily succeed, since Newjf has a lot of room for rebuttal here and its Offer is attractive.
Greatview’s chairman and Cloudview are in discussions with financial advisers to make a counterbid.Considering that this may be a “noise”,we recommend prioritizing Newjf’s Offer before any higher Offer from Greatview.

Latin Resources (LRS AU): Pilbara Minerals (PLS AU)’s Scheme Vote on 16 January

By Arun George

On 29 November, the Latin Resources (LRS AU) IE considered Pilbara Minerals (PLS AU)’s all-scrip offer fair and reasonable. The offer is 0.07 PLS share per LRS share.
The key conditions are LRS shareholder and Brazilian regulatory approvals. No disinterested shareholder holds the 25% blocking stake, and low retail ownership lowers the headcount test risk.
An attractive offer and the lack of a competing bidder suggest a done deal. At the last close, for the 4 February payment, the gross/annualised spread was 2.9%/18.8%.

[US Crude Oil Options Weekly 2024/48] WTI Drops on Easing Supply Concerns

WTI futures dropped 4.6% for the week ending 29/Nov, driven by easing Middle East tensions and higher US gasoline and distillate inventories.
WTI options Put/Call volume ratio fell to 0.82 from 0.87 (22/Nov) last week, as call volume fell by 17.9% WoW and put volume dropped by 22.4%.
WTI OI PCR inched up to 0.88 from 0.86 compared to last week. Call OI rose by 1.3% WoW, while put OI increased by 4.5%.

IO Weekly Technicals Review [2024/48]: Bullish Trend to Persist

SGX IO Futures closed USD 4.17/ton higher for the week ending on 29/Nov. It traded in a range of USD 5.05/ton, which was smaller than the prior week.
Chinese portside inventories fell 1.5% to 148.5M tons for the week ending 29/Nov. China’s manufacturing PMI for November came in at 50.3, beating analyst expectations of 50.2.
Seasonally strong demand ahead of the Lunar New Year, improving steelmaker conditions, stimulus hopes, and robust PMI signal continued iron ore price gains.

[US Nat Gas Options Weekly 2024/48] Henry Hub’s Uptrend Continues on Bullish Demand Outlook

US natural gas prices rose 7.5% for the week ending 29/Nov, driven by forecasts of colder weather, rising US LNG exports, and higher heating demand.
Henry Hub Put/Call volume ratio rose to 1.47 from 1.14 (22/Nov) the previous week as put volumes fell by 56.1% WoW, while call volumes decreased by 66%.
Henry Hub OI PCR fell to 0.83 from 0.84 compared to last week. Call OI fell by 14.4% WoW, while put OI decreased by 15.8%.

[Earnings Review] Occidental Beats Q3 Estimates on Robust Output

Occidental’s Q3 revenue edged up by 0.2% YoY and beat estimates by 0.7%. Net profit fell by 16.6% YoY, but EPS beat estimates by 34.8%.
Total production increased 15.7% YoY, driven by strong growth in the Permian and Rockies, while US production surged 19% YoY, achieving its highest-ever quarterly output.
Long-Term debt reduced to USD 25.46 billion, down USD 4 billion, reaching nearly 90% of the company’s near-term debt reduction target of USD 4.5 billion.

LVG: Imwelo Project Receives Forward Purchase Agreement

By Atrium Research

LVG announced a term sheet including a forward purchase agreement of 7,000oz of gold plus an offtake agreement.
With permits secured last month, today’s announcement derisks the project development from a financing perspective.
The second tranche of the financing involving Taifa Group is expected to close within the next few weeks and will provide additional funding (~$3.8M) to LVG, further derisking it from a capital standpoint.

New Zealand Energy Corp. (TSX-V: NZ): Better than expected results at Tariki-5A

By Auctus Advisors

The Tariki-5A well has encountered a gas column of at least 8 metres out of a gross Tariki sand of ~60 m.
An additional column of a further 8 to 12 m may be confirmed upon completion of log analyses.
This is above company expectations.

TM: Kombat Mine to Be Acquired in All-Cash Transaction

By Atrium Research

TM received a term sheet for the purchase of its ownership of the Kombat Mine for a consideration in the range of US$30-50M.
The all-cash transaction is at the asset level, therefore removing a significant portion of TM’s debt, allowing them to realize the entire consideration.
Trigon also announced its Q2/25 operating and financial results, reporting weaker than expected financials compared to Q1, returning to a negative EBITDA position.

Before it’s here, it’s on Smartkarma

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Dec 04

Daily Brief Consumer: Sanrio, Meituan, Lifestyle China, Deliveroo, Porsche Automobil Holding , Abercrombie & Fitch Co Cl A, Urban Outfitters, Mao Geping Cosmetics and more

By Smartkarma Daily Briefs | Consumer, Daily Briefs

In today’s briefing:

Sanrio (8136 JP) – Kitty Behaving Badly
HSI, HSCEI, HSTECH, HSIII Index Rebalance: US$3.4bn of Flows Post Capping (Dec 2024)
Lifestyle China (2136 HK): Thomas Yau Scheme Expected
Lifestyle China (2136 HK): Chairman/CEO to Launch Privatisation Offer?
Quiddity Leaderboard F100/F250 Dec 24: Final Trading Day; Announcement Tomorrow!
[Meituan (3690 HK, BUY, TP HK$165) TP Change]: C3Q24 Review: Buy or Leave?
Selected European HoldCos and DLC: November’24 Report
Abercrombie & Fitch Co.: Expansion of Global Brand Awareness & Localization Efforts Driving Our Bullishness! – Major Drivers
Urban Outfitters Inc.: These Are The 7 Biggest Factors Impacting Its Performance In 2025 & Beyond! – Major Drivers
Mao Geping Cosmetics IPO – Low to Mid-End Looks Reasonable

Sanrio (8136 JP) – Kitty Behaving Badly

By Travis Lundy

Sanrio (8136 JP) announced a deal last week which I discussed in Sanrio (8136 JP) Large Secondary Offering – Don’t Say Hello Kitty! Too Soon. Next day it fell sharply.
There was shorting involved, and since then the stock has rallied 18% to clear the undisturbed price which itself was an all-time high, up 5% in the previous two days.
There is some LO buying, some HF covering, but a LOT of day-traders. In five days the stock has traded 903% of its Maximum Real World Float. That’s a lot.

HSI, HSCEI, HSTECH, HSIII Index Rebalance: US$3.4bn of Flows Post Capping (Dec 2024)

The December rebalance of the HSI, HSCEI, HSTECH and HSIII indices will use today’s closing prices to cap the index constituent weights at 8%/12%. This will lead to large flows.
The round-trip trade across all stocks across the four indices is estimated at HK$26.14bn (US$3.4bn).
Alibaba, Tencent, Midea Group, Kuaishou Technology, NIO, HSBC Holdings and New Oriental Education & Techn are the largest buys. Meituan, Xiaomi, JD.com, AIA Group and NetEase are the largest sells.

Lifestyle China (2136 HK): Thomas Yau Scheme Expected

Respectively in 2013 and 2016, Lifestyle International Holdings (1212 HK) spun-off and separately listed Lifestyle Properties Development (2183 HK) and PRC-department store play Lifestyle China (2136 HK).
Lifestyle Props’ listing was cancelled in 2023; and Thomas Yau privatized Lifestyle International late-2023: see Lifestyle (1212 HK): Timing Is Everything As Shareholders Go To Vote on 21 Nov.
Lifestyle China is now suspended pursuant to then Takeovers Code. Thomas Yau holds 74.9%. No prizes for guessing what comes next.

Lifestyle China (2136 HK): Chairman/CEO to Launch Privatisation Offer?

By Arun George

Lifestyle China (2136 HK) is on a trading halt pending the release of an announcement under the Hong Kong Code on Takeovers and Mergers.
Mr Thomas Lau (Chairman and CEO) is likely following up on the privatisation of Lifestyle International Holdings (1212 HK) with the privatisation of Lifestyle China.
We use three methods to triangulate the likely offer price, suggesting a range of HK$1.00-1.45 per share, with an average of HK$1.23 (a 63.3% premium to the last close).

Quiddity Leaderboard F100/F250 Dec 24: Final Trading Day; Announcement Tomorrow!

By Janaghan Jeyakumar, CFA

In this insight, we take a look at the potential index changes for F100 and F250 in the run-up to the December 2024 index rebal event.
The final rankings will be decided based on the full market cap at the close of trading today (3rd December 2024).
Based on the current numbers, we see three for the F100 index and three or more other changes for the F250 index in December 2024.

[Meituan (3690 HK, BUY, TP HK$165) TP Change]: C3Q24 Review: Buy or Leave?

By Ying Pan

Meituan reported C3Q24 revenue/non-IFRS operating profit 2%/12% above consensus, thanks to rising monetization and cost reduction. C4Q24 guidance, however, missed expectation due to low ASP mix and expansion;
We see the following as positive catalysts: (1) consumption stimulus in 2025 that will likely include service coupons, (2) market share gains, (3) overseas expansion in Mid-East bearing quick fruits.
We therefore opt to keep Meituan on our TOP BUY list and maintain TP at HK$165.

Selected European HoldCos and DLC: November’24 Report

By Jesus Rodriguez Aguilar

Discounts to NAV of covered holdcos mainly widened during November. Discounts to NAV: C.F.Alba, 49.8% (vs. 48.7% as of 29 November); GBL, 40.6% (vs. 40.9%); Heineken Holding, 14.4% (vs. 14%);
Industrivärden C, 4.0% (vs. 2.4%); Investor B, 4.3% (vs. 2.8%); Porsche Automobile Holding, 29.8% (vs. 31.7%). Rio DLC spread tightened to 22.4% (vs. 22.5%).
What seems interesting (unchanged views): Porsche SE vs. listed assets and the Rio DLC (long RIO LN/short RIO AU).

Abercrombie & Fitch Co.: Expansion of Global Brand Awareness & Localization Efforts Driving Our Bullishness! – Major Drivers

Abercrombie & Fitch’s latest quarterly performance showed strong results, effectively capitalizing on consumer demand and strategic execution across multiple facets of their business.
The company reported a record net sales figure of $1.2 billion for the third quarter, marking a 14% increase from the previous year, alongside a comparable sales rise of 16%.
The operating income also witnessed a 30% growth year-over-year, driven by a 170 basis point improvement in operating margin to 14.8%.

Urban Outfitters Inc.: These Are The 7 Biggest Factors Impacting Its Performance In 2025 & Beyond! – Major Drivers

Urban Outfitters, Inc. reported a promising performance for Q3 of fiscal 2025, with total sales reaching a record $1.4 billion, a 6% rise compared to the previous year.
This growth was primarily driven by strong performances from its Anthropologie and Free People brands, both of which posted mid-single-digit positive retail segment comps, which counterbalanced a high single-digit decline at Urban Outfitters.
Nuuly, the company’s fashion rental business, also saw robust double-digit revenue growth, credited to a 51% rise in average active subscribers.

Mao Geping Cosmetics IPO – Low to Mid-End Looks Reasonable

Mao Geping Cosmetics is looking to raise up to US$270m in its upcoming Hong Kong IPO.
Mao Geping Cosmetics (MGC) operates in the premium beauty segment. Operating via its two brands, MAOGEPING and Love Keeps, MGC offers a wide range of color cosmetics and skincare products.
We have looked at the company’s past performance in our previous notes. In this note, we will talk about the IPO valuations.

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Dec 04

Daily Brief Financials: Korea Stock Exchange Kospi Index, Goodman Group, DigiCo REIT, Chailease Holding, Hang Seng Index, Equity Commonwealth, Ethereum, New World Development, Tejon Ranch and more

By Smartkarma Daily Briefs | Daily Briefs, Financials

In today’s briefing:

Breaking: Korea Drops Martial Law, Local Markets in Turmoil—What’s the Short-Term Trade Play Here?
Goodman Group (GMG AU) Placement: Limited Index Flows
Goodman Group Placement – Large Shareholder Looking to Raise US$1.2bn but Discount Is Tight
DigiCo Infrastructure REIT IPO – Looks Decent – After All the Adjustments
Chailease – A Window on China Lending, +62% Impairment Costs, Decelerating Loan Growth in China
EQD | The Come Back Of The Hang Seng
Equity Commonwealth Liquidation: Potential 40%-60% Upside Amid Real Estate Asset Sales and Wind-Down Challenges
Crypto Crisp: Indeed, Ethereum Shines Again
Lucror Analytics – Morning Views Asia
TRC: Optimistic That Recent Actions Signal Improved Commitment to Delivering Shareholder Value

Breaking: Korea Drops Martial Law, Local Markets in Turmoil—What’s the Short-Term Trade Play Here?

By Sanghyun Park

Martial law has been declared 11 times since 1945, but this is the first since Korea’s post-‘90 democratization.
The Martial Law Command’s first proclamation blocks parliament, raising legal questions about its constitutionality and making any immediate attempt to end martial law uncertain.
Defense and telecom stocks could outperform short-term due to martial law, making them strong trading targets to watch.

Goodman Group (GMG AU) Placement: Limited Index Flows

China Investment Corp owns 7.84% of Goodman Group (GMG AU) and is looking to sell 50.4m shares (2.64% of shares out) at a price range of A$37.55-37.6/share, a tiny discount.
Goodman Group (GMG AU) has run away from its peers over the last couple of years and there could be a move lower in the stock following the placement.
There will be limited passive buying in the short-term coinciding with the placement. There will be some more passive buying in February.

Goodman Group Placement – Large Shareholder Looking to Raise US$1.2bn but Discount Is Tight

CIC is looking to raise around US$1.2bn, via selling around 2.6% of its stake in Goodman Group (GMG AU) , via a block trade.
Goodman’s shares have performed exceptionally well over the past year, driven by its pivot towards data centers.
In this note, we will talk about the placement and run the deal through our ECM framework.

DigiCo Infrastructure REIT IPO – Looks Decent – After All the Adjustments

DigiCo REIT (DIGICO AU) is looking to raise around US$1.3bn in its Australian IPO.
DigiCo REIT (DREIT) aims to be a diversified owner, operator and developer of data centres, with a global portfolio and broad investment mandate across stabilised, value-add and development opportunities
We have looked at the company’s past performance in our previous notes. In this note, we will talk about the IPO valuations.

Chailease – A Window on China Lending, +62% Impairment Costs, Decelerating Loan Growth in China

By Daniel Tabbush

Chailease offers an alternative view on China lending than the large mainstream banks there
Data through 9M24 shows very high growth of its China impairment costs at +62% YoY
Its lending in China is slowing sharply, often a reaction to worsening credit metrics

EQD | The Come Back Of The Hang Seng

By Nico Rosti

In a previous insight we presented a forecast where the Hang Seng Index could bounce after a 2-3 weeks pullback. The index started to rally from there.
Currently the index is up for 2 consecutive weeks and from the charts and models that we will present here, you can see that it has room to go higher.
Right now the index has not even reach the 25% (price) resistance level, and this confirms the bullish view.

Equity Commonwealth Liquidation: Potential 40%-60% Upside Amid Real Estate Asset Sales and Wind-Down Challenges

By Dalius Tauraitis

Equity Commonwealth is in late-stage liquidation; a $19/share dividend is set for December 6, with a remaining distribution expected in Q1 2025 between $1-$2/share.
The Denver property, 17th Street Plaza, is expected to sell for $142 million, with potential risks of sale delays beyond Q1 2025.
Wind-down expenses are estimated at $0.40-$0.50/share, mainly for executive compensation, with contingency reserves expected to be under $10 million.

Crypto Crisp: Indeed, Ethereum Shines Again

By Mads Eberhardt

In Crypto Moves #44 from September 19, we stated that Ethereum would shine again.
This prediction appears to be steadily materializing.
Since the U.S. Presidential election, Ethereum has regained some of the ground it has lost against Bitcoin during the year.

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: New World Development, Indofood CBP, Azure Power, Adani Green Energy, Meituan
In the US, treasuries climbed in a holiday-shortened session on Friday, with yields falling 8-10 bps across the curve. The yield on the 2Y UST dropped 8 bps to 4.15%, while that on the 10Y UST declined 10 bps to 4.17%.
Equities rallied, with the S&P 500 rising 0.6% to a new record high of 6,032.

TRC: Optimistic That Recent Actions Signal Improved Commitment to Delivering Shareholder Value

Moreover, reflecting discussions concerning TRC’s business, financial performance and other matters, TRC reached a standstill agreement last month with Nitor Capital, which had voiced concerns about the company’s direction and operations.
We view the agreement as a positive outcome of their discussions, particularly in light of the new board composition.
The substantial need for industrial, commercial and residential space near TRC’s land — likely heightened by the opening of the nearby Hard Rock Hotel & Casino Tejon next year — underscores the attractiveness of TRC’s property, in our view.

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Dec 04

Daily Brief TMT/Internet: ASML Holding NV, Baidu , Baidu, Dell Technologies , Netapp Inc, Intel Corp, iQIYI Inc, AViC , Asm International Nv and more

By Smartkarma Daily Briefs | Daily Briefs, TMT/Internet

In today’s briefing:

US Restriction on Semi Export to China Negative for All Equipment Makers, Naura, AMEC, ASML, TEL
ASML. Class Action Lawsuit Looms As Share Price Declines 37% From Peak
The Heat Is On: News Flow and Sentiment in CHINA / HONG KONG (December 2)
Baidu Inc.: Generative AI & Search Transformation Driving Our Bullishness! – Major Drivers
Dell Technologies: An Insight Into Expansion Beyond Endpoint Security & Storage Opportunities! – Major Drivers
NetApp Inc.: Keystone Subscription Model Expansion As A Critical Growth Lever! – Major Drivers
Is Intel Doomed Without Patrick Gelsinger? The Challenges Facing Its New CEO!
iQIYI Inc.: The Mini & Short Dramas Integration & Other Major Drivers
ａｖｉｃ (9554 Jp) – Quality Company with High Growth, Profit Margin, and ROE
What’s News in Amsterdam – 3 December (ASM International | ASML Holding | InPost | Dutch retail sales | Black Friday update)

US Restriction on Semi Export to China Negative for All Equipment Makers, Naura, AMEC, ASML, TEL

By Nicolas Baratte

An additional 24 Equipment are added to the restriction list (negative to AMAT, KLA, LAM). No explicit restrictions on ASML or Tokyo Electron, but that’s done indirectly.
HBM Memory sales to China restricted (directly negative to Samsung), but restriction of DRAM Manufacturing Equipment sales is long-term positive to Micron, Samsung, SK Hynix.
140 Chinese firms added to the Entity List, including all China’s Semi Production Equipment makers (Naura, AMEC, Piotech, SiCarrier).

ASML. Class Action Lawsuit Looms As Share Price Declines 37% From Peak

By William Keating

A case against ASML being brought by the Hollywood Firefighters Pension Fund (HFPF) is now opening up into a class action lawsuit
Claims that ASML withheld crucial information from investors in the Jan-Oct 2024 time period, e.g. impact of US sanctions, strength of the semi recovery, order backlog etc.
In reality, ASML warned in October 2023 that 2024 would be a zero growth year. Did the HFPF think they were kidding?

The Heat Is On: News Flow and Sentiment in CHINA / HONG KONG (December 2)

By David Mudd

Hong Kong market breadth stays strong despite market pullback in November. Mainland investors continue to increase exposure to HK market through Southbound Connect platform.
Baidu (9888 HK) , Baidu (BIDU US) , the global leader in Robotaxis, was granted a license to start operating its autonomous cars in Hong Kong.
Vitasoy Intl Holdings (345 HK) shares surged on takeover rumours after Yeo Hiap Seng (YHS SP) increased its stake to more than 12% allowing them to call a Board meeting.

Baidu Inc.: Generative AI & Search Transformation Driving Our Bullishness! – Major Drivers

Baidu’s third-quarter 2024 financial performance presents a complex picture, showcasing both opportunities and challenges that shape the company’s investment thesis.
The company reported total revenues of RMB 33.6 billion, reflecting a 3% decline year-over-year.
However, Baidu Core’s revenue remained stable at RMB 26.5 billion.

Dell Technologies: An Insight Into Expansion Beyond Endpoint Security & Storage Opportunities! – Major Drivers

Dell Technologies Inc. reported solid results for the fiscal year 2025 third quarter, demonstrating both strengths and challenges across its various segments.
The company achieved a revenue of $24.4 billion, marking a 10% increase year-over-year, driven by strong growth in its Infrastructure Solutions Group (ISG) thanks to robust demand for AI servers and traditional servers.
Diluted earnings per share (EPS) reached $2.15, reflecting a 14% rise, while cash flow from operations was $1.6 billion.

NetApp Inc.: Keystone Subscription Model Expansion As A Critical Growth Lever! – Major Drivers

NetApp’s recent earnings for the second quarter of fiscal year 2025 reflects a strong performance with both opportunities and challenges evident in the company’s results.
Key aspects of the company’s current position and future outlook can be synthesized as follows: NetApp demonstrated significant growth in its all-flash storage segment, showing a 19% year-over-year increase, and enjoyed solid momentum in cloud storage services, which helped drive revenue beyond expectations.
The reported revenues reached $1.66 billion, showing a 6% increase compared to the previous year.

Is Intel Doomed Without Patrick Gelsinger? The Challenges Facing Its New CEO!

Intel has been making headlines recently with a series of significant developments that underscore the company’s tumultuous state.
On December 1, 2024, CEO Pat Gelsinger stepped down after a tenure that saw the company’s stock price plunge by 61%.
The leadership vacuum was filled by interim co-CEOs, David Zinsner and Michelle Johnston Holthaus, with Intel initiating a global search for a permanent successor.

iQIYI Inc.: The Mini & Short Dramas Integration & Other Major Drivers

iQIYI recently divulged its financial and operational results for the second quarter of 2024, revealing several intriguing aspects about its current business trajectory.
This analysis aims to distill the substantial information provided during the earnings call and form an even-handed view on iQIYI’s performance and future prospects.
iQIYI remains a significant player in the long-form video sector in China, holding a competitive edge in the drama and film categories.

ａｖｉｃ (9554 Jp) – Quality Company with High Growth, Profit Margin, and ROE

Under its mission of “Creating a new view of the world with the AViC Team as the business driver,” AViC (hereafter, the Company) provides a full range of services related to digital marketing, from strategy development to execution.
In addition, the Company strives for and ensures “quality growth” by maintaining and improving profitability while pursuing sustainable business growth.
One of the Company’s distinguishing characteristics is its high productivity compared to competitors.

What’s News in Amsterdam – 3 December (ASM International | ASML Holding | InPost | Dutch retail sales | Black Friday update)

By The IDEA!

In this edition: • ASM International / ASML Holding | US to implement additional export controls to China • InPost | step-up in deployment APMs in the UK and extension of cross-border proposition • Dutch retail sales | up 2.0% YoY in value and up 0.6% YoY in volume in October • Black Friday update | Sunday’s iDEAL transaction data showed a modest YoY increase

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Dec 04

Daily Brief Health Care: Agilent Technologies, Japan Lifeline, Arrowhead Pharmaceuticals , BioLine RX , Lantheus Holdings, Tonix Pharmaceuticals Holding and more

By Smartkarma Daily Briefs | Daily Briefs, Healthcare

In today’s briefing:

Agilent Technologies: Pharma Market Expansion As A Key Growth Catalyst! – Major Drivers
Japan Lifeline Co., Ltd (7575 JP): Research Update
ARWR: License and Collaboration Deal with Sarepta Includes 825 Million Upon Closing
BLRX: Ayrmid Assumes Commercialization Efforts
LNTH: Initiating Coverage – A Glowing Recommendation
TNXP: NDA Filed for TNX-102 SL in Fibromyalgia

Agilent Technologies: Pharma Market Expansion As A Key Growth Catalyst! – Major Drivers

By Nippon Investment Bespoke Research UK

Agilent Technologies, Inc. recently reported its fourth quarter results for fiscal year 2024.
The company generated revenues of $1.701 billion, marking roughly 1% growth in reported figures, with core growth remaining flat despite challenging market conditions.
Notably, Agilent’s total company book-to-bill ratio exceeded one, indicating a steady market recovery and positioning for continued improvement into 2025.

Japan Lifeline Co., Ltd (7575 JP): Research Update

Japan Lifeline [JLL] produced historical semi-annual earnings with FY24 1H OP of ¥6,260mil (+14.4% YoY) on sales of ¥27,985mil (+11.4% YoY), which landed above expectation.
Despite this robust performance, JLL has not revised its full-year FY24 guidance as the 2H presents with several potential earnings risks such as 1) fewer operating days, which will impact device sales, 2) an increase in outsourced products reducing GPM, 3) the possibility of a change in the competitive landscape for one of JLL’s core products.
The company’s shareholder return policy is the higher of (1) a pay-out ratio of 40% or (2) a Dividend on Equity [DOE] of 5%.

ARWR: License and Collaboration Deal with Sarepta Includes 825 Million Upon Closing

On November 26, 2024, Arrowhead Pharmaceuticals, Inc. (ARWR) announced a global licensing and collaboration agreement with Sarepta Therapeutics (SRPT) in which Arrowhead will receive $825 million on closing, consisting of a $500 million upfront payment and $325 million as an equity investment priced at a 35% premium.
The agreement includes four clinical stage products (ARO-DUX4, ARO-DM1, ARO-MMP7, ARO-ATXN2), three preclinical programs (ARO-HTT, ARO-ATXN1, ARO-ATXN3), and during the five-year term of the agreement Sarepta can propose up to six new CNS or muscle targets, with Arrowhead responsible for discovery and preclinical development.
This deal further validates Arrowheads technology and provides capital to fund operations into 2028.

BLRX: Ayrmid Assumes Commercialization Efforts

BioLineRx is a commercial stage biopharmaceutical company with a development portfolio advancing motixafortide, a platform molecule targeting indications in stem cell mobilization (SCM) & in the treatment of advanced pancreatic cancer.
The candidate is approved in the US for SCM and is undergoing studies for use in gene therapy and in pancreatic cancer.
Partner Gloria Biosciences is developing motixafortide in Asia & is expected to be conducting bridging studies in the near term for SCM & longer-term studies for other indications.

LNTH: Initiating Coverage – A Glowing Recommendation

Lantheus is a leader in radiopharmaceutical offerings in oncology & precision diagnostics.
It offers a portfolio of diagnostic & therapeutic products directly & via partnerships & licensing.
The primary revenue driver is Pylarify, a PET tracer for PSMA-expressing prostate cancer.

TNXP: NDA Filed for TNX-102 SL in Fibromyalgia