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Smartkarma Daily Briefs

Daily Brief TMT/Internet: SK Hynix, Vanguard Intl Semiconductor, Just Dial Ltd, Money Forward , Hon Hai Precision Industry, Cerebras Systems , Elan Microelectronics, Charge+, GoodRx Holdings Inc, Globalstar Inc and more

By | Daily Briefs, TMT/Internet

In today’s briefing:

  • SAMSUNG: Less About Preliminary Results, More About the Tech Missteps. Samsung Pain Is HYNIX’s Gain
  • Vanguard (5347.TT): TSMC Invests over 3.7 Billion in Vanguard to Increase Its Holdings to 27%.
  • Namaste India 🙏 | India’s Atomic Ambitions
  • Money Forward (3994) | Q3 Results and Strategic Expansion Fueling Long-Term Upside
  • Tech Supply Chain Tracker (09-Oct-2024): CSP develops ASIC accelerators.
  • Cerebras IPO Valuation Analysis: A Sky-High Valuation Will Not Last For Long
  • PC Monitor: Elan Sales Hit Guidance High End; Expects Significant PC Industry Growth 4Q24E/1Q25E
  • TNB Aura joins US$8M Series A round of EV charging operator Charge+ | e27
  • GoodRx Holdings Inc.: Leveraging Biosimilars and Brand Partnerships To Catapult Their Growth! – Major Drivers
  • Globalstar Inc.: Satellite Network Modernization & Expansion In Middle East As A Critical Growth Catalyst! – Major Drivers


SAMSUNG: Less About Preliminary Results, More About the Tech Missteps. Samsung Pain Is HYNIX’s Gain

By Neil Campling

  • Samsung Electronics (SMSN LI) Q3 preliminary Operating Profit results is 12% below consensus. Company issues rare apology, effectively admitting technology competitiveness falls short.
  • SK Hynix (000660 KS) is powering ahead in HBM memory in our view, securing Nvidia 2025 allocations, and industry leading efficiencies.
  • A range of factors have created a great opportunity for SK Hynix investment given misunderstood industry dynamics and position at NVIDIA Corp (NVDA US).

Vanguard (5347.TT): TSMC Invests over 3.7 Billion in Vanguard to Increase Its Holdings to 27%.

By Patrick Liao

  • Taiwan Semiconductor (TSMC) – ADR (TSM US) invests over 3.7 billion in Vanguard Intl Semiconductor (5347 TT) to increase its holdings to 27%.
  • Taiwanese authorities, specifically the Investment Commission of the Ministry of Economic Affairs, approved Vanguard’s investment in its first 12-inch factory in Singapore yesterday.
  • Regarding the outlook for 4Q24, we believe it is still evolving, and our current estimate is a ~5% quarter-on-quarter decline.

Namaste India 🙏 | India’s Atomic Ambitions

By Pranav Bhavsar

  • Re-Introducing our weekly Namaste India 2.0. This iteration builds on our earlier version and is designed for investors keen to track developments in India.
  • Nuclear power currently contributes less than 2% of India’s total electricity generation, indicating significant room for growth.
  • Going ahead, with earnings taking center stage, the high valuations commanded by iShares MSCI India ETF (INDA US) are likely to get challenged.  

Money Forward (3994) | Q3 Results and Strategic Expansion Fueling Long-Term Upside

By Mark Chadwick

  • With results due October 15, we expect net sales growth of 29% YoY, bringing 9-month revenue on track to meet full-year guidance.
  • Money Forward’s businesses are Japan-centric, creating a steady revenue stream insulated from yen volatility and uncertain global macro conditions.
  • By targeting larger corporations, Money Forward aims to unlock substantial cross-selling potential, supporting long-term growth and market penetration.

Tech Supply Chain Tracker (09-Oct-2024): CSP develops ASIC accelerators.

By Tech Supply Chain Tracker

  • CSP leading the development of ASIC accelerators for faster processing, enhancing their technological edge in the market.
  • Partnership between Foxconn and Nvidia to build world’s largest GB2000 production line, gearing up for increased demand in the semiconductor industry.
  • Taiwan emerging as a key player in the offshore wind industry, forging partnerships with foreign companies and investing in energy storage technology to stay competitive.

Cerebras IPO Valuation Analysis: A Sky-High Valuation Will Not Last For Long

By Andrei Zakharov

  • Cerebras Systems, a fast-growing maker of wafer-scale AI chips, which power the world’s largest supercomputers, will reveal IPO terms soon.
  • Given the company’s hyper-growth trajectory, $1B+ deal with UAE’s G42 and unique architecture, I expect Cerebras Systems is likely to get a premium valuation.  
  • The AI company plans to raise up to $1B while selling stockholders will offer additional Class A shares in this IPO.

PC Monitor: Elan Sales Hit Guidance High End; Expects Significant PC Industry Growth 4Q24E/1Q25E

By Vincent Fernando, CFA

  • Elan Micro reported September revenue on October 7th; 3Q24 revenue has come in at the high end of management’s guidance.
  • Management reiterated that they expect AI PCs to drive a growth acceleration for the PC industry starting in 4Q24E/1Q25E.
  • Reiterate Structural Long rating for Elan Micro; the company remains well positioned to benefit from an AI PC-driven PC upgrade cycle.

TNB Aura joins US$8M Series A round of EV charging operator Charge+ | e27

By e27

  • Singapore-based electric vehicle (EV) charging operator Charge+ has received an undisclosed sum from TNB Aura to complete its US$8 million Series A round.
  • The startup, which operates over 2,000 EV charging points across Southeast Asia, will use the funds to expand its charging infrastructure.
  • The startup received an undisclosed sum in a Series A round led by TRIVE Venture Capital in October 2023.

GoodRx Holdings Inc.: Leveraging Biosimilars and Brand Partnerships To Catapult Their Growth! – Major Drivers

By Baptista Research

  • GoodRx Holdings Inc.’s second quarter 2024 earnings presentation underscored a company benefiting from a complex healthcare environment yet facing substantial challenges that could sway its operational and financial trajectory.
  • The report delineated both strengths in strategic execution and hurdles related to broader industry and operational dynamics.
  • GoodRx continues to navigate a rapidly evolving healthcare landscape distinguished by significant pressure on pharmacy benefit managers (PBMs), shifting insurer coverage, and increasing consumer cost burden.

Globalstar Inc.: Satellite Network Modernization & Expansion In Middle East As A Critical Growth Catalyst! – Major Drivers

By Baptista Research

  • Globalstar recently held its second quarter 2024 earnings call, where the company reported a robust performance with significant gains in several key financial areas.
  • Revenue for the quarter reached $60.4 million, marking a 10% increase year-over-year, driven primarily by an 18% rise in service revenue.
  • This growth in service revenue is particularly important as it directly enhances the company’s profitability due to inherent operating leverage, demonstrated by a 20% increase in adjusted EBITDA and an improved margin of 54%.

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Daily Brief Financials: First Pacific Co, Ethereum, Kaanapali Land, Tosei Corp, NB Private Equity Partners, Freshworks and more

By | Daily Briefs, Financials

In today’s briefing:

  • First Pacific (142 HK): Even More Value In The Stub
  • Crypto Crisp: Full-blown Institutional Adoption
  • Kaanapali Land Llc (KANP) – Monday, Jul 8, 2024
  • Tosei Corp (8923 JP): Q3 FY11/24 flash update
  • NB Private Equity Partners (NBPE): NB: adding value in attractive co-investment sector
  • Freshworks Inc.: How Are They Dealing WIth Challenges in Strategic Acquisitions Integration & Other Risks? – Major Drivers


First Pacific (142 HK): Even More Value In The Stub

By David Blennerhassett

  • Back in October 2023, a consortium including First Pacific (142 HK) took Metro Pacific Investments Co (MPI PM) private. First Pac’s 46.2% share at delisting was worth ~US$1.25bn.
  • Following Mitsui (8031 JP)backed Mit-Pacific’s possible stake in a tollway operator held by MPIC, First Pac’s 43.2% holding in MPIC, including the 47.5% stake in Meralco, is potentially worth ~US$3.21bn.
  • The question is whether this recent development from Mitsui has any bearing. First Pac’s discount to NAV is elevated versus its historical trading range. 

Crypto Crisp: Full-blown Institutional Adoption

By Mads Eberhardt

  • The crypto market showed some positive momentum over the weekend.
  • We will not repeat ourselves on why we are highly bullish going into this fourth quarter, so we will spare you that for now.
  • What is notable is the steady stream of major financial institutions announcing new digital asset services on a weekly basis.

Kaanapali Land Llc (KANP) – Monday, Jul 8, 2024

By Value Investors Club

  • Kaanapali Land is a company that owns 4,000 acres of land on Maui in Hawaii, near the Kaanapali resort community
  • The company operates in the agricultural sector, focusing on coffee cultivation, and has a market capitalization of $59 million
  • Controlled by JMB Realty, Kaanapali Land is facing challenges with regulatory issues and delays in land development, exacerbated by the Maui wildfires in August 2023.

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.


Tosei Corp (8923 JP): Q3 FY11/24 flash update

By Shared Research

  • Revenue increased by 4.1% YoY to JPY69.4bn, achieving 84.7% of the full-year forecast, driven by Development business growth.
  • Operating profit rose 18.0% YoY to JPY17.1bn, reaching 93.8% of the full-year forecast, with notable profit margin improvements.
  • Tosei revised its full-year forecast, lowering revenue by 11.1% but raising profit forecasts due to strategic adjustments.

NB Private Equity Partners (NBPE): NB: adding value in attractive co-investment sector

By Hardman & Co

  • In our initiation, we highlighted that NBPE is uniquely focused in the co-investment sector of PE.
  • Our report underlined why this sector has especially appealing return, cashflow, asset selection, risk management, and GP access characteristics.
  • In this note, we review how the manager, NB, adds value in this attractive market.

Freshworks Inc.: How Are They Dealing WIth Challenges in Strategic Acquisitions Integration & Other Risks? – Major Drivers

By Baptista Research

  • Freshworks demonstrated a robust performance in the second quarter of 2024, continuing its trajectory of growth and investment in strategic areas to enhance its offerings, particularly in IT and employee experience solutions.
  • The company reported a revenue of $174.1 million for the quarter, marking a year-over-year increase and reflecting a healthy business operation.
  • Notably, the business maintained substantial operational discipline, resulting in a free cash flow of $32.8 million, and showed an impressive free cash flow margin of 19%.

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Daily Brief Consumer: Seven & I Holdings, Hyundai Motor India , Dongwon Industries, China Resources Beverage, Create Sd Holdings Co, Swiss Water Decaffeinated Coffee, Global Business Travel Group I, Lithia Motors Inc Cl A and more

By | Consumer, Daily Briefs

In today’s briefing:

  • The TOPIX October FFW Trade – BIG Numbers
  • Hyundai Motor India: Index Entry Timing for India’s Biggest IPO
  • Hyundai Motor India Sets IPO Price Range
  • Quiddity Leaderboard KOSPI 200 Dec 24: Up to 5 ADDs & 6 DELs Possible
  • Hyundai Motor India IPO: Upsized Valuation Driven by Strong Investor Interest
  • CR Beverage IPO: Valuation First-Look
  • Create Sd Holdings Co (3148 JP): Q1 FY05/25 flash update
  • SWSSF: Benefitting From Rising Demand for Decaffeinated Coffee & Natural Beverages
  • Global Business Travel Group: A Tale Of Diversification & Focus On Professional Services! – Major Drivers
  • Lithia Motors Inc.: Will Their Heavy Investments In EVs & Green Tech Integration Pay Off? – Major Drivers


The TOPIX October FFW Trade – BIG Numbers

By Travis Lundy

  • Post-Close on the 5th business day of October every year, the TSE announces the Free Float Weight review for all stocks where the FY ends in the Jan-March quarter.
  • Yesterday saw 210 decent changes to FFW (more up than down). There are still 400+ Phased Weight Reductions, 3 new adds (3663, 3993, 9341), and some share cancellation-based share-count reductions.
  • It turns out there is a LOT to trade. I see ¥2trln one-way (¥2trln net to buy on 245 names, and ¥2trln to sell on the other nearly 1,900 names). 

Hyundai Motor India: Index Entry Timing for India’s Biggest IPO

By Brian Freitas

  • Hyundai Motor India (1342Z IN) is looking to list on the exchanges by selling up to INR 279bn (US$3.3bn) of stock at a valuation of up to INR 1,593bn (US$19bn).
  • The anchor allocations will be completed early next week, and the stock is expected to start trading on 22 October.
  • The stock will not get Fast Entry to global indices. Inclusion at regular rebalances should take place in February and June next year.

Hyundai Motor India Sets IPO Price Range

By Douglas Kim

  • Hyundai Motor India (1342Z IN) has set an IPO price range of 1,865 to 1,960 rupees per share, aiming for a valuation as high as US$19 billion. 
  • Hyundai Motor (005380 KS) is selling a 17.5% stake in Hyundai Motor India in this public offering. Hyundai Motor India IPO is scheduled to trade starting 22 October.
  • Our updated base case valuation of Hyundai Motor India is market cap of US$19.7 billion based on P/E of 25.9x our estimated net profit of 64.1 billion INR. 

Quiddity Leaderboard KOSPI 200 Dec 24: Up to 5 ADDs & 6 DELs Possible

By Travis Lundy

  • KOSPI 200 is a Korean blue-chip index that tracks the 200 largest and most-liquid names listed in the KOSPI section of the Korea Exchange (KRX).
  • In this insight, we take a look at the names leading the race to become ADDs and DELs during the upcoming semiannual review in December 2024.
  • We expect up to five ADDs and six DELs for the KOSPI 200 Index during this rebal event based on the latest available data. Small increase vs two weeks ago.

Hyundai Motor India IPO: Upsized Valuation Driven by Strong Investor Interest

By Devi Subhakesan

  • Hyundai Motor India (1342Z IN) ’s IPO, launching next week, is expected to be priced between Rs1,865 and Rs1,960, valuing the company at USD 18-19 billion.
  • At this valuation, Hyundai’s India unit will account for over 40% of its parent company’s market cap, potentially unlocking significant value for Hyundai Motor (005380 KS).
  • Despite a weak growth in India’s passenger vehicle sales ytd, investor interest in the IPO is reportedly strong thanks to India’s booming equity market and robust fund inflows.

CR Beverage IPO: Valuation First-Look

By Arun George


Create Sd Holdings Co (3148 JP): Q1 FY05/25 flash update

By Shared Research

  • Revenue increased by 9.4% YoY to JPY113.9bn, with growth in comparable store revenue and customer count.
  • Operating profit rose by 10.7% YoY to JPY5.3bn, supported by higher gross profit and cost control measures.
  • The company expanded its network by opening 10 drugstores and six in-store dispensing pharmacies, closing one store.

SWSSF: Benefitting From Rising Demand for Decaffeinated Coffee & Natural Beverages

By Zacks Small Cap Research

  • Consumption of decaffeinated coffee is rising and outpacing the expansion of the overall coffee beverage category, yet still represents only about 15% and 12%, respectively, of total coffee consumption in the U.S. and Western Europe.
  • This implies substantial growth prospects for Swiss Water, we believe, as sales of decaffeinated coffee continue to increase and as consumers’ demand for natural food & beverages and premium coffees continues to rise.
  • We believe the company’s natural decaffeinated process is a key factor that could drive demand for Swiss Water decaffeinated coffee within the category and which has a positive tailwind from coffee consumption trends.

Global Business Travel Group: A Tale Of Diversification & Focus On Professional Services! – Major Drivers

By Baptista Research

  • American Express Global Business Travel (GBT) reported notable financial performance for the second quarter of 2024, illustrating a mix of strengths and areas for focus that investors should consider.
  • The company demonstrated robust adjusted EBITDA growth, substantial margin expansion, and significant cash flow acceleration.
  • Most notably, GBT achieved a 20% growth in adjusted EBITDA and margin expansion of 240 basis points year-over-year.

Lithia Motors Inc.: Will Their Heavy Investments In EVs & Green Tech Integration Pay Off? – Major Drivers

By Baptista Research

  • Lithia Motors’ second quarter earnings revealed both promising advances and looming challenges as it navigates a rapidly evolving automotive market.
  • President and CEO Bryan DeBoer detailed the company’s response to operational hurdles, notably a cyberattack on CDK, their dealer management system provider, which significantly impacted operations temporarily.
  • Despite this, Lithia Motors reported a 14% year-over year increase in revenues, achieving $9.2 billion in the quarter, marking a strong financial performance amidst industry-wide challenges.

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Daily Brief Health Care: Mitra Keluarga Karyasehat Tbk, China Traditional Chinese Medicine, Orum Therapeutics, Dr Agarwal’s Health Care Ltd, Grifols and more

By | Daily Briefs, Healthcare

In today’s briefing:

  • LQ45 Index Rebalance Preview (Oct 2024): Identifying Potential Index Changes
  • China TCM (570.HK) Privatization Update – The Long Stop Date to Extend or Not?
  • Orum Therapeutics IPO Preview
  • Dr Agarwal’s Health Care Pre-IPO Tearsheet
  • Grifols A/B Spread (GRF.P) – Monday, Jul 8, 2024


LQ45 Index Rebalance Preview (Oct 2024): Identifying Potential Index Changes

By Brian Freitas

  • The review period for the LQ45 Index October rebalance ended 30 September. The changes should be announced the last week of October, becoming effective after the close on 31 October.
  • We highlight 4 potential inclusions and 5 potential exclusions for the index at the rebalance. The actual number of changes could be lower at 2-3 a side.
  • There are a few stocks that will have over 1x ADV to trade from passive trackers if they are added to or deleted from the index.

China TCM (570.HK) Privatization Update – The Long Stop Date to Extend or Not?

By Xinyao (Criss) Wang

  • Investors are concerned the Long Stop Date may be extended.But the style of SOEs is rigorous, which means CNPGC has anticipated the potential delays and reserved more time in advance. 
  • Although CNPGC can extend Long Stop Date, this indicates CNPGC fails to complete the set work in scheduled time, which is equivalent to admitting its previous work arrangement was “inappropriate”.
  • If there’re unexpected circumstances, one possible scenario is privatization would be completed before the Chinese New Year.Because entering 2025, integrating China TCM and Taiji will be the focus of CNPGC.

Orum Therapeutics IPO Preview

By Douglas Kim

  • Orum Therapeutics is getting ready to complete its IPO in KOSDAQ in November 2024. The IPO price range is from 30,000 won to 36,000 won. 
  • The expected market cap after IPO is from 648 billion won to 778 billion won. The book building for the institutional investors starts on 24 October. 
  • Orum Therapeutics’ main pipelines include ‘ORM-6151’, a new drug candidate for acute myeloid leukemia, ‘ORM-5029’, a HER2-targeting breast cancer treatment candidate, and ‘ORM-1023’, a small cell carcinoma tumor candidate. 

Dr Agarwal’s Health Care Pre-IPO Tearsheet

By Akshat Shah

  • Dr Agarwal’s Health Care Ltd (8140044Z IN) is looking to raise about US$480m in its upcoming India IPO. The deal will be run by Jefferies, Kotak, MS and Motilal.
  • Dr Agarwal’s Health Care is a healthcare/hospital chain in India providing eyecare services, including surgeries; consultations, diagnoses, non-surgical treatments; and sells opticals, contact lens, accessories and eyecare related pharmaceutical products.
  • According to the CRISIL MI&A report, it had a ~25% market share of the total eye care service chain market in India in FY24. 

Grifols A/B Spread (GRF.P) – Monday, Jul 8, 2024

By Value Investors Club

  • Grifols A/B Spread Trade involves the spread between Grifols’ ordinary A shares and Preference B shares
  • Grifols and Brookfield announced an exclusive agreement to evaluate a potential acquisition of the entire company
  • A/B shares were issued in 2011 as part of an acquisition, allowing Grifols to expand its presence in the biopharmaceutical sector while maintaining voting power for the Grifols family

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.


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Daily Brief Thematic (Sector/Industry): Graphene. Wonder Material Or Hype Magnet? and more

By | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

  • Graphene. Wonder Material Or Hype Magnet?
  • Japan Morning Connection: Oil Through $80 While P&C Take a Hit on Hurricane Milton
  • Ohayo Japan | Stocks Tumble on High Oil Prices
  • US Banks – Strong Weekly Balance Sheet Figures for Loans, Loan Loss Reserves and Time Deposits
  • Biopharma Week in Review – October 7, 2024
  • Furniture/Furnishings Weekly – October 7, 2024


Graphene. Wonder Material Or Hype Magnet?

By William Keating

  • Two decades ago, graphene hit the headlines after two professors at University of Manchester managed to isolate a slice of the just one-atom thick substance using scotch tape
  • Marketed as being 200 times stronger than steel, graphene rapidly gained “wonder material” status and spawned a tidal wave of graphene based products, companies and investment opportunities
  • At least four “Graphene” companies listed on London’s AIM, collectively once worth north of $1 billion, have either delisted or been reduced to penny stock status. 

Japan Morning Connection: Oil Through $80 While P&C Take a Hit on Hurricane Milton

By Andrew Jackson

  • Server related names higher after some big sales numbers and new product launches from SMCI should be a positive for Nidec
  • Watch for P&C weakness in Japan following losses for peers overnight as Hurricane Milton intensifies as it approaches the Florida coast line
  • Oil back above $80 will continue to push related names higher; possible refiner pair with 4 days of TPX FFW selling for recent outperformer Idemitsu

Ohayo Japan | Stocks Tumble on High Oil Prices

By Mark Chadwick

  • U.S. stocks declined on Monday as Treasury yields hit multi-month highs and oil prices surged
  • Essilor Luxottica, the global eyewear giant behind Ray-Ban, has acquired a 5.10% stake in Nikon
  • Tokyo Metro announced IPO preliminary share pricing of 1,100-1,200 yen, with final pricing to be determined through book-building from July 8-11

US Banks – Strong Weekly Balance Sheet Figures for Loans, Loan Loss Reserves and Time Deposits

By Daniel Tabbush

  • Weekly HFD for large US banks are turning positive in several areas, making the mosaic even stronger than if just as single series were improving
  • Loan growth for the largest US banks is now positive even if low, but moving from a negative rate of growth, the trajectory is a steady improvement
  • Loan loss reserves growth is lowering, suggesting bettering LGD and PD while large time deposit growth is down substantially, improving liquidity risk (which can impact credit)

Biopharma Week in Review – October 7, 2024

By Water Tower Research

  • We review last week’s biopharma news for meaningful clinical data, regulatory updates, research innovation, and M&A.
  • Last week, HIMS and unapproved GLP-1 sellers (LFMD) were put on notice by the FDA.
  • KZR’s study was stopped and placed on clinical hold, but the stock rose.

Furniture/Furnishings Weekly – October 7, 2024

By Water Tower Research

  • A mixed week for furniture and furnishings stocks as technology stocks once again drive the market.
  • The Water Tower Research Commercial/Contract Furniture Index (-1.7%) and Home Goods Retailers Index (-3.9%) were both down for the week, while the Residential Manufacturers & Suppliers Index (+1.2%) was up.
  • The Mass Retailers Index was basically flat (+0.1%), while the three major indexes were all down modestly, with the S&P 500 and DJ30 both down (-0.2%) and the R2K down (-0.8%).

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Daily Brief ESG: Slow Policy Shareholdings Reduction Is Similar Backdrop to Unclear Nomination Process for Directors and more

By | Daily Briefs, ESG

In today’s briefing:

  • Slow Policy Shareholdings Reduction Is Similar Backdrop to Unclear Nomination Process for Directors
  • Recordati – ESG Report – Lucror Analytics


Slow Policy Shareholdings Reduction Is Similar Backdrop to Unclear Nomination Process for Directors

By Aki Matsumoto

  • Policy shareholdings don’t create tension in management and ensure the interests of minority shareholders. Secondly, holding shares that don’t create value can burden capital profitability and undermine shareholder interests.
  • The increase in foreign ownership only changed the mindset of some company managers, but “TSE’s request” was enough to awake managers who had become accustomed to being protected by cross-shareholdings.
  • If reducing policy shareholdings is viewed as HR issues related to the director election agenda, it makes sense why improvements haven’t progressed similarly to the unclear nomination process for directors.

Recordati – ESG Report – Lucror Analytics

By Leonard Law, CFA

Lucror Analytics’ ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable).
We assess Recordati’s ESG as “Adequate”, in line with its Environmental, Social and Governance scores. Controversies are “Material”, while Disclosure is “Strong”.


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Daily Brief ECM: USS (4732 JP) – Small Offering on ‘Growth Darling’ – Buyback Offsets 50% and more

By | Daily Briefs, ECM

In today’s briefing:

  • USS (4732 JP) – Small Offering on ‘Growth Darling’ – Buyback Offsets 50%
  • Tokyo Metro IPO Valuation Analysis
  • Tokyo Metro IPO – Will Price at the Top, but Isn’t Particularly Cheap
  • MDL Wholesale Pre-IPO – IPO Redux
  • Rigaku Holdings (268A JP) IPO: Valuation Insights
  • USS Placement – Buyback and Decent Momentum Will Aid Dynamics


USS (4732 JP) – Small Offering on ‘Growth Darling’ – Buyback Offsets 50%

By Travis Lundy

  • Ubiquitous used car auction house USS Co Ltd (4732 JP) today announced MUFJ Bank’s Retirement Benefit Trust account would sell its 3.5% stake in an offering. 
  • Given how much cash the company has and how little cross-holding there is, this seems a bit odd, but they are doing a buyback for half the offer.
  • Small offer. Low ADV count. Well-liked by numerous foreign active holders. This should get taken easily.

Tokyo Metro IPO Valuation Analysis

By Douglas Kim

  • Tokyo Metro set the IPO price range at 1,100 to 1,200 Yen per share. At the top end of the range, Tokyo Metro would raise 349 billion yen ($2.35 billion).
  • Our base case valuation of Tokyo Metro is implied target price of 1,178 yen per share. This is within the top end of the IPO price range (1,200 yen).
  • Given the lack of upside relative to the IPO price range, we have a Negative view of this IPO. 

Tokyo Metro IPO – Will Price at the Top, but Isn’t Particularly Cheap

By Sumeet Singh

  • Tokyo Metro (9023 JP)‘s shareholders aim to raise up to US$2.4bn in its Japan IPO.
  • Tokyo Metro (TKM) is one of the two metro network operators in the Tokyo region. It operates nine subway lines with a total of 180 stations.
  • We have looked at the company’s past performance in our previous notes. In this note, we will talk about the IPO valuations.

MDL Wholesale Pre-IPO – IPO Redux

By Nicholas Tan

  • MDL Wholesale Limited is looking to raise about US$100m in its upcoming Hong Kong IPO.
  • MDL is a leading food and FMCG distribution solution provider in China.
  • In this note, we look at the firm’s past performance.

Rigaku Holdings (268A JP) IPO: Valuation Insights

By Arun George


USS Placement – Buyback and Decent Momentum Will Aid Dynamics

By Clarence Chu

  • Nomura Trust (the retirement benefit trust account for MUFG) is looking to raise US$132m via selling some shares in USS Co Ltd (4732 JP).
  • While the deal appears somewhat well flagged, given that its part of the ongoing cross-shareholding unwind narrative in Japan, the timing of such a selldown isn’t always certain.
  • In this note, we will talk about the placement and run the deal through our ECM framework.

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Daily Brief Event-Driven: Rio Tinto Taps Arcadium As Lithium Prices Sag and more

By | Daily Briefs, Event-Driven

In today’s briefing:

  • Rio Tinto Taps Arcadium As Lithium Prices Sag
  • Zhejiang Expressway (576 HK): “Cheap” Access To Zheshang Securities
  • Arcadium Lithium (ALTM US/LTM AU): Rio Tinto’s Rumoured Bid Is Light
  • Korea Value-Up Index: Detailed Methodology, Weights, Float Rates, & Passive Impacts Obtained
  • Rigaku Holdings (268A JP) IPO: TOPIX Inclusion in November; Global Indices in 2025
  • TOPIX Inclusions: Who Is Ready (Oct 2024)
  • Greatview Aseptic Packaging (468.HK) Update – Some New Information Worth the Attention
  • WisdomTree Emerging Markets Ex-State-Owned Enterprises Index Rebalance: US$300m Round-Trip Trade
  • Boqi Environmental (2377 HK): Privatisation by Management?
  • EQD | The Nikkei Is At The Top But Could Rally A Bit More…


Rio Tinto Taps Arcadium As Lithium Prices Sag

By David Blennerhassett

  • Rio Tinto Ltd (RIO AU) has confirmed it has approached Arcadium Lithium (LTM AU)/(ALTM US) regarding a potential acquisition. 
  • No Offer Price has been announced; however a proposed bid with a 30%+ premium, on top of last week’s 11% bounce, has been rumoured. That implies a price of ~$6/share.
  • Given shares were trading ~A$10/share in January this year, one Aussie-based fund reckons such an Offer would be highly opportunistic; and that a bid 2.5-3x higher is reasonable. 

Zhejiang Expressway (576 HK): “Cheap” Access To Zheshang Securities

By David Blennerhassett


Arcadium Lithium (ALTM US/LTM AU): Rio Tinto’s Rumoured Bid Is Light

By Arun George

  • In response to media reports, Arcadium Lithium (LTM AU) confirmed receiving a non-binding proposal from Rio Tinto Ltd (RIO AU). No terms were disclosed.
  • According to press reports, Rio aims to acquire Arcadium at a valuation range of US$4-6 billion (A$5.9-8.8 billion). Blackwattle thinks a fair price is closer to US$8 billion. 
  • The rumoured valuation range is unattractive and arguably a bear case valuation assuming no significant recovery in lithium prices.  

Korea Value-Up Index: Detailed Methodology, Weights, Float Rates, & Passive Impacts Obtained

By Sanghyun Park

  • This post dives into the official details of the Korea Value-Up Index methodology that I obtained from KRX. Plus, it has the official weights and free-float rates for each constituent.
  • The 3rd and 4th Phases led to surprising stocks entering the index, causing drops for KB and Hana, while SK Hynix benefited from the Exception Application rule.
  • The index’s straightforward methodology suggests low rebalancing uncertainty, but flexible Special Entry rules and upcoming December changes may add unpredictability, targeting bank stocks like KB, Hana, and JB.

Rigaku Holdings (268A JP) IPO: TOPIX Inclusion in November; Global Indices in 2025

By Brian Freitas

  • Rigaku Holdings (268A JP) listing has been approved by the JPX and the stock is expected to start trading on the Prime Market from 25 October.
  • At the reported indicative IPO price of JPY 1230/share, Rigaku Holdings (268A JP) will be valued at JPY 277.1bn (US$1.87bn).
  • The stock should be added to the TOPIX INDEX on 28 November while inclusion in global indices will take place in February and June next year.

TOPIX Inclusions: Who Is Ready (Oct 2024)

By Janaghan Jeyakumar, CFA

  • Quiddity’s “Who is Ready” series of insights aims to objectively identify names listed on the Tokyo Stock Exchange that are potential additions to the TOPIX Index in future.
  • Our long-term pre-event candidate CELSYS (3663 JP) has moved to TSE Prime. There will be a TOPIX Inclusion event on 30-Oct-24. The stock has outperformed TOPIX by 43% since July.
  • PKSHA Technology (3993 JP) and GENOVA (9341 JP) also moved to the TSE Prime market in September and will be having TOPIX Inclusion events at the end of October 2024.

Greatview Aseptic Packaging (468.HK) Update – Some New Information Worth the Attention

By Xinyao (Criss) Wang

  • The loss of control over Greatview’s international business will lead to significant loss of Newjf’s interests,which is the most direct trigger of Newjf’s decision to initiate an acquisition of Greatview.
  • Newjf is actively fulfilling the Pre-Conditions and is now progressing smoothly. Newjf’s acquisition of Greatview is complied with the Anti-monopoly Law. Newjf will make every effort to complete the acquisition. 
  • Greatview urges shareholders to reject Newjf’s Offer is not for the benefit of the entire company. The “true motives” behind are questionable. We advise investors to take Newjf’s Offer seriously.

WisdomTree Emerging Markets Ex-State-Owned Enterprises Index Rebalance: US$300m Round-Trip Trade

By Brian Freitas

  • The WisdomTree Emerging Markets ex-State-Owned Enterprises Index measures the performance of emerging markets stocks that are not state-owned enterprises.
  • The changes at the October rebalance were announced after market close on 4 October with implementation scheduled at the close on 16 October.
  • There are 154 adds and 80 deletes for the index with an estimated round-trip trade of US$300m.

Boqi Environmental (2377 HK): Privatisation by Management?

By Arun George

  • China Boqi Environmental Hol (2377 HK) entered a trading halt based on the Hong Kong Code on Takeovers and Mergers. The shares have been up 39% since 30 September. 
  • It is likely that management, representing 59.59% of outstanding shares, is seeking to privatise Boqi through a Cayman scheme. 
  • Sinopec, a pre-IPO investor potentially holding a blocking stake, is likely seeking to exit. At the last close, Boqi trades in line with the median peers’ P/B multiple. 

EQD | The Nikkei Is At The Top But Could Rally A Bit More…

By Nico Rosti

  • In our last Nikkei 225 insight we predicted that the Nikkei 225 INDEX was overbought and about to pullback and that is exactly what happened the following week.
  • We also reiterated our view about the index’s overall trend, not looking good, and the fact that our seasonal quantitative model point to a coin flip scenario (up/down) for October.
  • This week the index gapped up and the current SHORT pattern model is showing a good chance to rally from here. Let’s check how high it can go.

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Daily Brief Credit: Morning Views Asia: Adani Green Energy and more

By | Credit, Daily Briefs

In today’s briefing:

  • Morning Views Asia: Adani Green Energy, Medco Energi, Tata Motors ADR


Morning Views Asia: Adani Green Energy, Medco Energi, Tata Motors ADR

By Leonard Law, CFA

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.


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Daily Brief Equity Bottom-Up: Lots More on the Ongoing Mess That Is Intel and more

By | Daily Briefs, Equity Bottom-Up

In today’s briefing:

  • Lots More on the Ongoing Mess That Is Intel
  • All Is Not Well in Tech Sector, AI Growth Slows, TSMC Expensive. Samsung, SK Hynix More Attractive.
  • Nikon (7731) | Eyeing the Future? Nikon and Essilor’s Partnership in AR
  • HK-Listed Apparel & Footwear Screener:  Attractive Yield & Rapid Expansion Outside China – Oct 2024
  • The Beat Ideas: GPIL- Low Cost Mining with Upcoming Steel Plant
  • Bright Smart Securities (1428.HK) – Monday, Jul 8, 2024
  • Cash Converters International – Growth and value
  • Medley (4480 JP): Strong Base Business; No Fear from Fx; Digital Healthcare Push to Benefit
  • Portfolio Update: September 2024
  • Pioneer Credit Ltd – Refinancing completed


Lots More on the Ongoing Mess That Is Intel

By Odd Lots

  • Intel is struggling, with a dismal stock performance and job cuts
  • The company’s risky and capital-intensive strategy may not be sustainable
  • The core business is no longer sufficient to support their strategic goals, leading to financial challenges and market share loss.

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.


All Is Not Well in Tech Sector, AI Growth Slows, TSMC Expensive. Samsung, SK Hynix More Attractive.

By Nicolas Baratte

  • The rally of the Asia Tech sector (+24% YTD) is highly concentrated in a handful of stocks. TSMC is up 64% but Samsung is down -22% YTD. 
  • With the exception of AI, end-demand isn’t great. Smartphone up 8% but below 2019-21 level. PC flattish. x86 Server flattish. Telecom capex declining. Automotive electronics declining.   
  • AI is the most disruptive trend since Cloud in 2010. Years of increasing Capex are in front of us. But short-term, stocks are properly valued to rich, growth is slowing.

Nikon (7731) | Eyeing the Future? Nikon and Essilor’s Partnership in AR

By Mark Chadwick

  • Essilor’s investment underscores Nikon’s undervalued potential, spotlighting its advanced optical technologies as strategic growth drivers in emerging high-tech sectors like AR.
  • Nikon’s established expertise in precision optics is highly adaptable for AR applications, positioning the company to capitalize on rising demand for wearable and immersive technology.
  • Increased collaboration with EssilorLuxottica may enhance Nikon’s R&D capabilities, promising new innovations and potential revenue streams, which could strengthen Nikon’s profitability and share value long-term.

HK-Listed Apparel & Footwear Screener:  Attractive Yield & Rapid Expansion Outside China – Oct 2024

By Sameer Taneja

  • The HK market is moving, and the share prices of high-yield companies are increasing. Despite the average YTD returns of 36%, stocks are trading at 5-18% dividend yields. 
  • We await the November results of Pacific Textiles (1382 HK), which we will soon initiate coverage on.
  • We note that Yue Yuen Industrial Holdings (551 HK) continues with its buybacks, having repurchased 3.2 million shares (0.2% of outstanding shares) since August 28th, 2024. 

The Beat Ideas: GPIL- Low Cost Mining with Upcoming Steel Plant

By Sudarshan Bhandari

  • Godawari Power and Ispat (GODPI IN) is fully integrated steel manufacturer with a diverse portfolio encompassing iron ore mining, pellet production, sponge iron, steel billets, ferroalloys, and power generation.
  • Net Cash Balance Sheet, Mining Expansion, and upcoming Integrated Steel Plant provide huge potential for the captive consumption.
  • Execution of the capex plan within the stipulated timeframe is the key risk.

Bright Smart Securities (1428.HK) – Monday, Jul 8, 2024

By Value Investors Club

  • Bright Smart Securities is a successful brokerage firm in Hong Kong founded by Mow Lum Yip in 1995 and publicly listed in 2010
  • The company has shown steady growth since its IPO, with impressive increases in revenue and net income
  • Despite a challenging market environment in Hong Kong, Bright Smart has maintained stable results, grown its client base and assets under management, and pays out all earnings in dividends, with dividends exceeding net earnings over the last 5 years.

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.


Cash Converters International – Growth and value

By Research as a Service (RaaS)

  • RaaS has published an update report on consumer finance group Cash Converters International (ASX:CCV) following the release of its FY24 results which saw 26% growth in revenue on the pcp and EBITDA growth of 21% in line with our forecasts.
  • The gross loan book grew 6% to $288m, which we find impressive as the business transitions away from SACC products due to regulatory change.
  • This was more than offset by growth in other products, domestically and internationally.

Medley (4480 JP): Strong Base Business; No Fear from Fx; Digital Healthcare Push to Benefit

By Tina Banerjee

  • Medley (4480 JP) is a safe bet for hiding from the negative impact of strengthening yen. The company should benefit from digital healthcare push from the newly elected Prime Minister.
  • Although Medley has reported mixed 2Q24 result, with robust topline and declining profitability, the long-term growth potential remains intact. The company guided for 43% YoY revenue growth in 2024.
  • Continued shortage of human resource, including doctors and nurses at medical care facilities in Japan and underpenetrated market remain the main growth engines of the company.

Portfolio Update: September 2024

By Contrarian Cashflows

  • This month, I had the privilege of attending an investment conference, where I engaged with many successful value investors and independent thinkers.
  • During one conversation, an investor jokingly remarked that everyone seems to have shifted toward “quality growth investing,” while he and Mr. Robotti appear to be among the few who still favor cyclical stocks, such as Tidewater Inc.
  • Although I don’t generally shy away from cyclical stocks, I recognize the immense challenge of navigating the capital cycle by investing in companies that seem on the brink of failure.

Pioneer Credit Ltd – Refinancing completed

By Research as a Service (RaaS)

  • RaaS Research Group has published an update on ethically-motivated, diversified financials group Pioneer Credit (ASX:PNC) following the company’s announced new $272.5m four-year syndicated senior finance facility.
  • Our base case valuation has increased to $250m (previously $217m) or $1.94/share due to lower finance costs in FY26 (down $8m to c.
  • $20m) and ongoing.

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