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Smartkarma Daily Briefs

Apr 27
0

Daily Brief Industrials: Makino Milling Machine Co, Csx Corp, Danaher Corp, General Electric , Intertek, Lockheed Martin, Northrop Grumman, Raytheon Technologies , Snap On Inc, United Airlines Holdings and more

By | Daily Briefs, Industrials

In today’s briefing:

  • (Mostly) Asia-Pac M&A: Mayne Pharma, Piedmont/Sayona, Jamco, Makino Milling, Sinarmas, Dada Nexus
  • CSX Corporation: An Insight Into Intermodal Market Dynamics & The Biggest Forces Driving Them Forward!
  • Danaher Corporation: Navigating Market Volatility to Protect Its Market Position!
  • GE Aerospace: Building Aircraft Engine Efficiency, Technological Advancements & Other Major Drivers!
  • Intertek Group PLC: Initiation of Coverage- Strategic Innovation & Market Access Expansion Can Help Maintain Its Solid Market Position!
  • Lockheed Martin: 7 Major Game-Changers Impacting Its 2025 Performance & Beyond!
  • Northrop Grumman: B-21 Raider Production Advancements Driving Our ‘Outperform’ Rating!
  • RTX Technologies’ Backlog Boom vs. Tariff Trouble: What Lies Ahead For The Defense Major?
  • Snap-on Inc.: Will Its Software & Artificial Intelligence Integration Help Alter The Playing Field?
  • United Airlines Is Focused On Mastering Aircraft Supply Chain To Stay Ahead … But Is It Working?

(Mostly) Asia-Pac M&A: Mayne Pharma, Piedmont/Sayona, Jamco, Makino Milling, Sinarmas, Dada Nexus

By David Blennerhassett

CSX Corporation: An Insight Into Intermodal Market Dynamics & The Biggest Forces Driving Them Forward!

By Baptista Research

  • CSX Corporation’s latest earnings provided a comprehensive view of the challenges and opportunities facing the company in the first quarter of 2025.
  • CSX’s total revenue for the quarter stood at $3.4 billion, a 7% decline from the previous year.
  • This downturn was attributed to several factors, including lower benchmark coal prices and reduced fuel surcharge revenues.

Danaher Corporation: Navigating Market Volatility to Protect Its Market Position!

By Baptista Research

  • Danaher Corporation reported its first quarter of 2025 financial results, surpassing expectations in revenue, earnings, and cash flow.
  • The company benefited from robust performance in bioprocessing and a spike in respiratory demand at its subsidiary, Cepheid.
  • Utilization of the Danaher Business System (DBS) enabled the company to drive innovation, market share gains, and efficiency.

GE Aerospace: Building Aircraft Engine Efficiency, Technological Advancements & Other Major Drivers!

By Baptista Research

  • General Electric Company (GE) Aerospace’s earnings presentation for the first quarter of 2025 presents a mixed picture of financial performance, strategic advancements, and ongoing challenges.
  • The company delivered a robust financial outcome, with orders up 12% and revenue growing by 11%, primarily driven by strong demand in both services and equipment segments.
  • Profits surged by 38% to $2.1 billion, pushing the margins to 23.8%.

Intertek Group PLC: Initiation of Coverage- Strategic Innovation & Market Access Expansion Can Help Maintain Its Solid Market Position!

By Baptista Research

  • Intertek Group PLC reported a solid financial performance for the fiscal year 2024, slightly surpassing market expectations.
  • The company achieved its fourth consecutive year of mid-single-digit like-for-like revenue growth, with a 6.6% increase at constant exchange rates, supported by both volume and price enhancements.
  • Operating profit rose by 13% at constant currency, coupled with a robust operating margin improvement of 100 basis points to 17.4%.

Lockheed Martin: 7 Major Game-Changers Impacting Its 2025 Performance & Beyond!

By Baptista Research

  • Lockheed Martin reported its first quarter results for 2025, showcasing a generally strong performance across several metrics.
  • The company achieved a year-over-year sales increase of 4%, signaling continued growth momentum.
  • Performance was bolstered by operating margins of 11.6% across its business sectors and earnings per share (EPS) growth of 14%, reaching $7.28.

Northrop Grumman: B-21 Raider Production Advancements Driving Our ‘Outperform’ Rating!

By Baptista Research

  • Northrop Grumman’s financial performance and strategic positioning in the military defense sector appear resilient amidst several challenges.
  • The company reported first-quarter sales of $9.5 billion in 2025, reflecting a 7% decrease from the previous year, primarily due to contracting delays and timing of material receipts.
  • This shortfall was compounded by an almost $100 million reduction in expected sales from the B-21 program, attributed to higher manufacturing costs stemming from process changes required to meet accelerated production rates and increased material costs linked to macroeconomic factors.

RTX Technologies’ Backlog Boom vs. Tariff Trouble: What Lies Ahead For The Defense Major?

By Baptista Research

  • Raytheon Technologies Corporation reported a strong first quarter, delivering 8% organic sales growth, 120 basis points of segment margin expansion, and a $900 million improvement in free cash flow compared to the prior year.
  • Commercial aftermarket sales rose 21%, commercial original equipment sales increased 3% despite a tough comparison, and defense sales grew by 4%.
  • Segment profitability was supported by volume increases, cost reduction activities, and a favorable defense sales mix, leading to 18% growth in segment operating profit.

Snap-on Inc.: Will Its Software & Artificial Intelligence Integration Help Alter The Playing Field?

By Baptista Research

  • Snap-on Incorporated’s first quarter of 2025 reflected mixed results influenced by a variety of external factors and internal strategies.
  • The company’s sales totaled $1,141.1 million, indicating a 3.5% decline year-over-year, also impacted by a 2.3% organic sales decrease and $13.9 million in unfavorable foreign currency translation.
  • Despite this, Snap-on demonstrated resilience with a slight improvement in its gross margin, which rose 20 basis points to 50.7%, highlighting the benefits of RCI (Rapid Continuous Improvement) initiatives.

United Airlines Is Focused On Mastering Aircraft Supply Chain To Stay Ahead … But Is It Working?

By Baptista Research

  • United Airlines Holdings presented its first quarter 2025 earnings amid a challenging macroeconomic environment characterized by softer demand for air travel.
  • The company managed to demonstrate resilience by achieving a pre-tax margin that was the highest since the beginning of the COVID-19 pandemic.
  • The core themes underpinning United’s current performance include having won over brand-loyal customers, contributing to its solid financial metrics even in tougher economic times.

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Apr 27
0

Daily Brief Consumer: Trip.com, Sumber Alfaria Trijaya Tbk Pt, Guangzhou Automobile Group, Fujitsu General, BYD, TSE Tokyo Price Index TOPIX, Next PLC, Pearson Plc, Tesla , Lvmh Moet Hennessy Louis Vuitton and more

By | Consumer, Daily Briefs

In today’s briefing:

  • Monthly Chinese Tourism Tracker | March and Q125 Demand Growth Weak Vs Trend (April 2025)
  • Sumber Alfaria Trijaya (AMRT IJ) – Good Reason for Optimism
  • A/H Premium Tracker (To 25 Apr 2025):  AH Premia Fall Sharply; “Feels” Risk-On But Noisy Spreads
  • Fujitsu General (6755 JP): Done Deal as Precondition Satisfied
  • BYD (1211 HK): Rev up by 36% in 1Q25, Scale to Bring 60% Upside
  • Expect Gradual Improvement in the Quality of Listed Companies as More Companies Go Private
  • NEXT Plc: Initiation of Coverage- Is the Zalando Alliance The Hidden Catalyst for International Growth?
  • Pearson Plc: Initiation of Coverage- Could U.S. Policy Shifts Be the Secret Catalyst Behind Its Growth Surge?
  • Tesla’s Bold New Move: Affordable Cars, Robotaxis, and a Stock Surge Investors Didn’t Expect!
  • LVMH: Initiation of Coverage- Can Its Latest Brand Revitalization & Portfolio Management Be A Potential Game Changer?

Monthly Chinese Tourism Tracker | March and Q125 Demand Growth Weak Vs Trend (April 2025)

By Daniel Hellberg

  • March demand growth improved vs weak February, but Q125 showed clear slowdown vs trend
  • Relatively strong demand growth for outbound travel is no longer lifting airline load factors
  • Near-Term, we no longer view Chinese travel as attractive, as stocks appear to lack catalysts

Sumber Alfaria Trijaya (AMRT IJ) – Good Reason for Optimism

By Angus Mackintosh

  • Sumber Alfaria Trijaya booked a slower-than-expected finish to FY2024, with some compression to margins, but mainly due to the temporary impact of investment in the business and higher promotions.  
  • The company has seen a strong start to FY2025, with SSSG growing at a faster pace than FY2024, with a strong performance over the run-up to Ramadan.  
  • Alfamart will continues to expand its store network in 2025, with Lawson under AMRT to bring future synergy benefits. Valuations look attractive with a more positive outlook for earnings.

A/H Premium Tracker (To 25 Apr 2025):  AH Premia Fall Sharply; “Feels” Risk-On But Noisy Spreads

By Travis Lundy

  • AH Premia fall sharply. Spread curve torsion is mild but present, with narrow AH Premia widening, and wide premia narrowing.
  • For a month I thought warning signs were flashing and spreads could widen. That has taken a pause. I am not comfortable it will remain paused or Hs will outperform.
  • The Quiddity Portfolio is pretty hunkered down and nearly flat H/A risk. But benefits from wider spreads coming in, narrow spreads widening, and liquidity dropping. Alpha good again this week.

Fujitsu General (6755 JP): Done Deal as Precondition Satisfied

By Arun George

  • The precondition for Paloma Rheem Holdings’ tender offer for Fujitsu General (6755 JP) is satisfied. The offer is from 28 April to 28 May.
  • Despite an arguably light offer and less than ideal process, this is a done deal due to a lack of opposition and no competing offer. 
  • At the last close and for a 5 June payment, the gross and annualised spreads are 1.3% and 14.1%, respectively.

BYD (1211 HK): Rev up by 36% in 1Q25, Scale to Bring 60% Upside

By Ming Lu

  • In 1Q25, BYD’s revenue increased by 36% YoY and sales volume increased by 60% YoY.
  • We believe BYD’s scale advantage will help cashflow and the competition in the coming market concentration.
  • The P/E band suggests an upside of 59% for the end of 2025.

Expect Gradual Improvement in the Quality of Listed Companies as More Companies Go Private

By Aki Matsumoto

  • Although it’ll take some time for quality of existing listed companies to improve, a gradual improvement in quality of companies is likely for the time being as more companies delist.
  • The TSE’s “request” was not only for activist investors, but also for other investors who shared the view that the stock market should not be left in the doldrums.
  • A certain number of companies that fail to meet TSE listing criteria will move to the regional stock exchanges, leading to a gradual improvement in the quality of the TSE.

NEXT Plc: Initiation of Coverage- Is the Zalando Alliance The Hidden Catalyst for International Growth?

By Baptista Research

  • NEXT, a prominent UK-based retail company, has reported its latest financial results, demonstrating both strengths and challenges in its operations.
  • This summary captures the core aspects of NEXT’s performance, the strategic decisions made, and the roadmap ahead as outlined in their recent earnings call.
  • Baptista Research looks to evaluate the different factors that could influence the company’s price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology.

Pearson Plc: Initiation of Coverage- Could U.S. Policy Shifts Be the Secret Catalyst Behind Its Growth Surge?

By Baptista Research

  • Pearson PLC’s 2024 performance showcased a blend of strategic advancements and financial resilience.
  • The company reported a robust financial outcome, aligning with market expectations.
  • A key highlight was the sales growth of 3% and a significant profit increase of 10%, resulting in an EBIT margin of 16.9%.

Tesla’s Bold New Move: Affordable Cars, Robotaxis, and a Stock Surge Investors Didn’t Expect!

By Baptista Research

  • Tesla’s first quarter of 2025 earnings revealed a company navigating immediate difficulties while maintaining focus on long-term opportunities.
  • Despite declines in sales, operating income, and profit margins compared to the previous year, Tesla’s stock surged 5.4%, largely because investors had anticipated weak results after a 13% year-over-year drop in deliveries.
  • Critical to the stock’s resilience was the reaffirmation that Tesla’s timeline for launching a lower-priced vehicle remains intact, with production expected to begin in the first half of 2025.

LVMH: Initiation of Coverage- Can Its Latest Brand Revitalization & Portfolio Management Be A Potential Game Changer?

By Baptista Research

  • LVMH Moët Hennessy Louis Vuitton S.E. reported a year characterized by resilience against a backdrop of global economic challenges.
  • The company saw marginal organic revenue growth, but a decline in operating income, largely influenced by significant non-recurring expenses related to major events such as the sponsorship of the Olympics and the renovation of Notre Dame.
  • These strategic brand visibility investments also mark a considerable outlay impacting current operating margins.

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Apr 27
0

Daily Brief Financials: Bright Smart Securities And, Marsh & Mclennan, Moody’s Corp and more

By | Daily Briefs, Financials

In today’s briefing:

  • Bright Smart Securities (1428 HK): Ant’s Possible Unconditional MGO at HK$3.28
  • Marsh & McLennan: Why Oliver Wyman Holds The Key To Its Future Growth!
  • Moody’s Corporation: How Is The Management Capitalizing On Private Credit Market Demand To Up Their Game!

Bright Smart Securities (1428 HK): Ant’s Possible Unconditional MGO at HK$3.28

By Arun George

  • Bright Smart Securities And (1428 HK)‘s Chairman entered a SPA with Ant Holdco to sell his 50.55% stake at HK$3.28, a 7.5% premium to the last close.
  • The SPA completion requires approval from both the NDRC and SFC. Unusually, Ant has the option of extending the long-stop date, reflecting a possibility of extra scrutiny by the regulators.
  • Under Rule 26.1 of the Code, upon completion, Ant will be required to make an unconditional mandatory cash offer at HK$3.28. The MGO price is final and a knockout offer.  

Marsh & McLennan: Why Oliver Wyman Holds The Key To Its Future Growth!

By Baptista Research

  • Marsh McLennan had a solid start to 2025, reporting a 9% increase in revenue for the first quarter, driven by a 4% growth in underlying revenue and contributions from acquisitions made in 2024.
  • The company saw growth across all four of its businesses: Marsh, Guy Carpenter, Mercer, and Oliver Wyman.
  • Adjusted operating income rose by 8%, although the adjusted operating margin slightly declined by 20 basis points, reflecting some seasonality at McGriff.

Moody’s Corporation: How Is The Management Capitalizing On Private Credit Market Demand To Up Their Game!

By Baptista Research

  • Moody’s Corporation (Moody’s) reported strong financial performance in the first quarter of 2025, reflecting the resilience of its business model amidst market volatility and economic uncertainties.
  • The company achieved a record revenue of $1.9 billion, which represents an 8% year-over-year increase.
  • Both its Moody’s Investors Service (MIS) and Moody’s Analytics (MA) segments experienced 8% revenue growth.

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Apr 27
0

Daily Brief Health Care: Intuitive Surgical, Quest Diagnostics, Shanghai Henlius Biotech and more

By | Daily Briefs, Healthcare

In today’s briefing:

  • Intuitive Surgical: Procedure Growth & Market Expansion to Strengthen Its Market Position!
  • Quest Diagnostics: Investment in Technology & Data Management For A Competitive Edge!
  • China Healthcare Weekly (Apr.27)- Flaws Behind BeiGene’s Breakeven, Fosun Increased Stake in Henlius

Intuitive Surgical: Procedure Growth & Market Expansion to Strengthen Its Market Position!

By Baptista Research

  • Intuitive Surgical Inc.’s recent earnings reveal a mixed performance with both strengths and challenges.
  • Positively, the company reported strong operational outcomes in the first quarter of 2025.
  • Da Vinci procedures saw a substantial 17% growth, driven predominantly by robust performances in general surgery across the US and certain international markets, such as India and Korea.

Quest Diagnostics: Investment in Technology & Data Management For A Competitive Edge!

By Baptista Research

  • Quest Diagnostics reported strong results for the first quarter of 2025 with a 12% increase in revenues, primarily driven by acquisitions, organic growth, and increased demand for advanced diagnostics.
  • The company’s strategy, focused on expanding its advanced diagnostics portfolio in key clinical areas and increasing automation and AI usage, appears to be paying dividends, as evidenced by the robust revenue growth in its physician and hospital channels.
  • Baptista Research looks to evaluate the different factors that could influence the company’s price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology.

China Healthcare Weekly (Apr.27)- Flaws Behind BeiGene’s Breakeven, Fosun Increased Stake in Henlius

By Xinyao (Criss) Wang

  • The rise of innovative drugs in China is actually in line with the interests of large pharmaceutical companies and MNCs. The only ones get “hurt” are small overseas startups/small biotech.
  • BeiGene’s turnaround from losses to profits has entered the countdown.However, investors may not be happy with the net profit margin brought by single revenue driver Brukinsa based on our calculation.
  • Fosun has increased its stake in Henlius by acquiring additional shares at HK$24.6/share, bringing its total ownership to 63.43%.This sends positive signals. A falling stock price is a buying opportunity.

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Apr 26
0

Daily Brief Quantitative Analysis: Hong Kong Buybacks Weekly (Apr 25th): AIA and more

By | Daily Briefs, Quantitative Analysis

In today’s briefing:

  • Hong Kong Buybacks Weekly (Apr 25th): AIA, China Hongqiao, Swire Pacific

Hong Kong Buybacks Weekly (Apr 25th): AIA, China Hongqiao, Swire Pacific

By Ke Yan, CFA, FRM

  • We analyze statistics on top repurchases over one week, one month, one quarter and one year periods ended on Apr 25th based on HKEx daily reports.
  • In the past 7 days, the top 3 companies that repurchased the most shares from the market were AIA (1299 HK), China Hongqiao (1378 HK), Swire Pacific (19 HK).
  • In the past 30 days, the top 3 companies that repurchased the most shares from the market were Tencent (700 HK), AIA (1299 HK), China Hongqiao (1378 HK).

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Apr 26
0

Daily Brief Thematic (Sector/Industry): Japan Strategy Weekly | Stocks Strong on Trade Optimism and Weaker Yen and more

By | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

  • Japan Strategy Weekly | Stocks Strong on Trade Optimism and Weaker Yen
  • #141 India Insight: Adani Sells 400 MHz to Artl, ITC Signs 14 Hotels, Saudi-Ind to Build Refineries
  • Thematic Report: Opportunity for India; US Anti-Dumping Duty on Solar Imports
  • How Trump’s Tariffs Are Reshaping India’s Shrimp Export Market?
  • AUCTUS ON FRIDAY – 25/04/2025

Japan Strategy Weekly | Stocks Strong on Trade Optimism and Weaker Yen

By Mark Chadwick

  • The Nikkei 225 surged 2.7% over the week, reclaiming the 35,000 level as easing U.S.-China trade tensions and a softer yen bolstered investor sentiment.
  • Tokyo core CPI jumped to 3.4% in April 2025 (highest in two years), driven by reduced energy subsidies and April food price increases.
  • The weaker yen supported export-dependent sectors, such as machinery, auto parts and tech hardware. For individual stocks, it is all about results and capital policies. 

#141 India Insight: Adani Sells 400 MHz to Artl, ITC Signs 14 Hotels, Saudi-Ind to Build Refineries

By Sudarshan Bhandari

  • Adani Group has exited the captive telecom space by offloading 400 MHz 5G spectrum to Bharti Airtel; this boosts Airtel’s 5G expansion while signaling Adani’s strategic retreat from telecom.
  • ITC’s Fortune Hotels signed 14 and launched 7 new hotels this year; this rapid expansion strengthens its mid-market hospitality presence and capitalizes on India’s surging domestic travel demand.
  • India and Saudi Arabia have agreed to jointly construct two oil refineries, this deepens energy ties and supports India’s fuel security amid rising consumption.

Thematic Report: Opportunity for India; US Anti-Dumping Duty on Solar Imports

By Sudarshan Bhandari

  • The imposition of reciprocal anti-dumping (AD) and countervailing duties (CVD) on solar imports to the United States, particularly targeting four major Asian exporters-Cambodia, Malaysia, Thailand, Vietnam-presents an opportunity for India
  • Though India lacks competitive pricing and optional capacity to meet the demand, 
  • Waaree Energies emerges as a potential winner, considering its facilities in India and the US and a strong order book.

How Trump’s Tariffs Are Reshaping India’s Shrimp Export Market?

By Nimish Maheshwari

  • The Trump administration imposed a 26% reciprocal tariff on Indian shrimp exports, significantly impacting India’s USD 4 billion shrimp export market, as India supplies 37% of U.S. shrimp imports.
  • Ecuador, benefiting from a lower tariff rate, gains a competitive edge, making its shrimp exports cheaper compared to India, allowing it to capture more market share in the U.S. market.
  • Companies like Avanti Feeds (AVNT IN) , Apex Frozen Foods (APEX IN) and Waterbase Ltd (WB IN) may face headwinds in raw shrimp export whereas tailwinds in prepared shrimp Exports. 

AUCTUS ON FRIDAY – 25/04/2025

By Auctus Advisors

  • Panoro Energy (PEN NO)C; Target price of NOK49 per share: Reserves addition much larger than expected – YE24 2P reserves were independently estimated at 42.3 mmbbl (+7.6 mmbbl vs YE23, representing a Reserve Replacement Ration of 309%).
  • This figure far exceeds our previous expectation of 34.5 mmbbl for YE24 2P reserves – an estimate that included a 4 mmbbl addition in 1H24 to counterbalance 2024 production.
  • The higher than expected reserves addition is driven by robust reservoir performance in Gabon coupled with the conversion of contingent resources into 2P reserves in EG.

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Apr 26
0

Daily Brief ECM: Deepexi Technology Pre-IPO Tearsheet and more

By | Daily Briefs, ECM

In today’s briefing:

  • Deepexi Technology Pre-IPO Tearsheet
  • Gold Plus Glass Industry Pre-IPO – Volatile Margins and Rising Debt

Deepexi Technology Pre-IPO Tearsheet

By Akshat Shah

  • Deepexi Technology (1843779D CH) (DT) is looking to raise atleast US$100m in its upcoming Hong Kong IPO. The deal will be run by CITIC, CMBC, Guotai, Bocom International and SPDB International.
  • The firm specializes in delivering AI solutions to enterprises to integrate their data, decisions and operations efficiently at scale. 
  • DT ranked first among specialized providers of large model AI application solutions in China’s enterprise large model AI application solution market in terms of revenue in 2024, according to F&S.

Gold Plus Glass Industry Pre-IPO – Volatile Margins and Rising Debt

By Rosita Fernandes

  • Gold Plus Glass Industry Ltd (GPGI IN) is planning to raise about US$200m in its upcoming India IPO. 
  • Gold Plus Glass Industry Ltd (GPGI) is engaged in the manufacturing of float glass, mirrors, and other value-added types of glass.
  • According to the CRISIL Report, GPGI was India’s second-largest float glass manufacturer, holding a 22% market share as of Sept 2023. 

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Apr 26
0

Daily Brief Credit: Lucror Analytics – Morning Views Asia and more

By | Credit, Daily Briefs

In today’s briefing:

  • Lucror Analytics – Morning Views Asia

Lucror Analytics – Morning Views Asia

By Leonard Law, CFA

  • In today’s Morning Views publication we comment on developments of the following high yield issuers: Sands China, SK Hynix
  • The rebound in US equity continued overnight, amid bets the Fed could cut rates sooner than anticipated to prevent a recession. The S&P 500 rallied by 2%, while US treasuries rallied 7-9 bps across the curve.
  • Some 5 bps of additional Fed cuts were priced in for 2025 after comments by Fed officials. Gold climbed 1.7%, continuing its strong rally YTD.

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Apr 26
0

Daily Brief Event-Driven: YAGEO and Shibaura Still Fighting and more

By | Daily Briefs, Event-Driven

In today’s briefing:

  • YAGEO and Shibaura Still Fighting, Minebea Likely to Bid Up, The Question Is Another YAGEO Overbid
  • Hongkong Land (HKL SP) Recycles Nine Floors Of One Exchange Square
  • HLB Merger Arb Setup: How Cancellation Risk Could Lead to Extra Profits
  • SK Telecom’s Block Deal Sale of 10.8 Million Shares of Kakao Corp
  • Devyani International’s Acquisition of Sky Gate Hospitality: A Strategic Move for Accelerated Growth
  • Building the Arsenal: Indra’s Possible Merger with EM&E

YAGEO and Shibaura Still Fighting, Minebea Likely to Bid Up, The Question Is Another YAGEO Overbid

By Travis Lundy

  • Yageo Corporation (2327 TT) bid ¥4,300 for Shibaura Electronics (6957 JP). Minebea Mitsumi (6479 JP) overbid at ¥4,500. YAGEO overbid Minebea at ¥5,400 on 17 April (expected to start 7-May)
  • Apparently, YAGEO was a bit upset by the public comments by Shibaura regarding custom/mass-market/online different ways of doing business. YAGEO responded with receipts. Shibaura will respond later.
  • On the 22nd, Minebea noted they would delay their intended 23rd start date. Now they have more irrevocables. In the end, I expect YAGEO’s, not Minebea’s, top price defines this.

Hongkong Land (HKL SP) Recycles Nine Floors Of One Exchange Square

By David Blennerhassett

  • In a rare move, Jardine Matheson (JM SP)-controlled Hongkong Land (HKL SP) has sold nine floors (147,025 square feet) of One Exchange Square to HKEX (388 HK) for HK$6.3bn (US$810mn).
  • HKL plans to use the proceeds to provide enhancements to the property sold,  the reduction of net debt; and for a share buyback. Shares are up 9% as I type. 
  • HKL is focussed on divesting US$4bn to US$6bn of its balance sheet assets in the next three years. HKL’s CEO Michael Smith: “Recycling capital is our top priority right now“.

HLB Merger Arb Setup: How Cancellation Risk Could Lead to Extra Profits

By Sanghyun Park

  • We go long on HLB LS, short on HLB Inc, and close the short once HLB LS converts. If the deal falls through, there’s potential for extra profits.
  • The view that the merger’s worse for HLB LS is gaining support, making it likely the spread could go negative, though there’s risk, the chances are pretty high.
  • The 4% spread is the floor for arb profit, and cancellation risk could add extra gains. This angle deserves serious consideration right now.

SK Telecom’s Block Deal Sale of 10.8 Million Shares of Kakao Corp

By Douglas Kim

  • Prior to market open on 25 April, SK Telecom announced that it plans to sell 10.8 million shares of Kakao, representing 2.4% of outstanding shares in a  block deal sale.
  • The sale of Kakao Corp shares and using the proceeds to further acquire shares in SK Broadband and invest in AI businesses is a solid move by SK Telecom. 
  • We believe that this trading down gap of Kakao Corp is likely to be covered soon in the next several days/weeks so it represents a short term buying opportunity. 

Devyani International’s Acquisition of Sky Gate Hospitality: A Strategic Move for Accelerated Growth

By Nimish Maheshwari

  • Devyani International acquired an Indian QSR brand, Sky Gate, marking its entry into Biryani.
  • The acquisition deal is valued at INR 4.19 billion, translating to a relatively low 1.9x FY25 EV/Sales. This attractive valuation provides DIL with an entry into a high-TAM segment.
  • No single brand has surpassed INR 3 bn in revenue due to regional taste differences, difficulty in standardising quality, and difficulty in achieving profitability due to high operational costs

Building the Arsenal: Indra’s Possible Merger with EM&E

By Jesus Rodriguez Aguilar

  • Indra’s potential merger with Escribano aims to strengthen its industrial base for future European defense programs, but governance concerns and shareholder dilution risks are creating significant market uncertainty.
  • The transaction’s structure is critical: a pure share swap would preserve Indra’s balance sheet health, while a heavy cash component could raise leverage dangerously, approaching 3.4x net debt/EBITDA.
  • Event-Driven investors should de-risk ahead of the April 30 board meeting, monitor deal terms closely, and prepare to pivot based on the merger’s financing structure, governance safeguards, and strategic fit.

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Apr 26
0

Daily Brief Equity Bottom-Up: Top 10 Korean Stock Picks and Key Catalysts Bi-Weekly (Starting 28 April 2025) and more

By | Daily Briefs, Equity Bottom-Up

In today’s briefing:

  • Top 10 Korean Stock Picks and Key Catalysts Bi-Weekly (Starting 28 April 2025)
  • Kyoto Financial Group (TSE:5844) – Positive Shift in C-Suite Outlook
  • STMicroelectronics: Initiation of Coverage- An Insight Into Its Cost-Saving Initiatives & Financial Resilience!
  • Synopsys: Harnessing Complexity
  • Safran: Initiation of Coverage- Will the LEAP Engine Ramp-Up Reverse Its Stock Slide?
  • Vinci: Initiation of Coverage- From Data Centers to Airports—Is This the Most Overlooked Infrastructure Powerhouse in Europe?
  • Capgemini: Initiation of Coverage- Strategic Acquisitions & 4 Pivotal Growth Levers!
  • Legrand S.A.: Initiation of Coverage- How Are They Executing Geographical Diversification To Seize Growth Opportunities!
  • STMicro: Ugly but Mngt Says 1Q25 Is the Bottom. Restructuring Has to Start, Horrendous Inventories.
  • Waaree Energies Pre IPO Lock-In Opens: What’s The Way Ahead

Top 10 Korean Stock Picks and Key Catalysts Bi-Weekly (Starting 28 April 2025)

By Douglas Kim

  • In this insight, we provide the top 10 stocks picks and key catalysts in the Korean stock market for the two weeks starting 28 April.
  • Our top 10 picks in Korea were up on average 5.1% (from 11 to 25 April), outperforming KOSPI which is up 4.7% in the same period. 
  • Our top 10 picks in this bi-weekly include Hanwha Systems, Hyundai Elevator, HD Hyundai, Hyundai Rotem, SK Telecom, Samyang Foods, KT&G, Posco, SK Inc, and Korea Investment Holdings.

Kyoto Financial Group (TSE:5844) – Positive Shift in C-Suite Outlook

By Victor Galliano

  • Kyoto Financial’s president has hinted at increasing disposals in strategic equity holdings; the prior target was a JPY100bn reduction in holdings by March 2029, now there is talk of JPY200-300bn
  • We estimate Kyoto Financial’s equity holdings relative to market cap at 140%+, well above its peer banks; yet, until very recently, the president had been against meaningfully reducing equity holdings
  • The president’s change of view leads us to upgrade Kyoto Financial to a buy; the change in outlook means that there is real potential to extract value for shareholders

STMicroelectronics: Initiation of Coverage- An Insight Into Its Cost-Saving Initiatives & Financial Resilience!

By Baptista Research

  • STMicroelectronics reported its financial results for the fourth quarter and the fiscal year 2024, showcasing notable operational challenges within a volatile market environment.
  • The company experienced significant revenue declines amidst broader industry downturns particularly in its Industrial and Automotive segments.
  • For the fourth quarter, STMicroelectronics saw a year-over-year decline in net revenues by 22.4%, landing at $3.32 billion, but managed a slight sequential increase of 2.2%.

Synopsys: Harnessing Complexity

By MBI Deep Dives

  • Chip design has long been a paradoxical craft.
  • On one hand, engineers must trust sophisticated software to help them craft circuits of mind-boggling complexity; on the other, they maintain a healthy skepticism, knowing a single flaw can doom a chip.
  • The old mantra “trust, but verify” could well have been coined for this process.

Safran: Initiation of Coverage- Will the LEAP Engine Ramp-Up Reverse Its Stock Slide?

By Baptista Research

  • Safran’s financial results show a strong performance in 2024, with record highs in revenue, profit, and cash flows.
  • Revenue increased by 18% to €27.3 billion, largely driven by a 25% growth in civil aftermarket activities.
  • Operating margin improved by 150 basis points to 15.1%, supported by operational excellence and strong aftermarket demand.

Vinci: Initiation of Coverage- From Data Centers to Airports—Is This the Most Overlooked Infrastructure Powerhouse in Europe?

By Baptista Research

  • Vinci, a global leader in concessions, construction, and energy, reported its financial performance for the fiscal year 2024, showcasing both achievements and challenges that frame its investment outlook.
  • Positively, Vinci demonstrated robust revenue growth, achieving a 4% overall increase to reach record levels despite economic headwinds.
  • This growth stemmed from significant contributions across its diverse business segments—Concessions, Energy, and Construction.

Capgemini: Initiation of Coverage- Strategic Acquisitions & 4 Pivotal Growth Levers!

By Baptista Research

  • Capgemini’s full-year 2024 results reflect a mixed performance against a backdrop of continued market challenges.
  • The company’s revenues saw a decline of 2% at constant currency to EUR 22,096 million, evidencing the broader economic pressures and restrained client spending, especially in sectors like Manufacturing and regions such as France.
  • This drop was somewhat mitigated by resilience in segments such as Financial Services and Public Sector, and geographic improvement in North America, the U.K., Asia Pacific, and Latin America.

Legrand S.A.: Initiation of Coverage- How Are They Executing Geographical Diversification To Seize Growth Opportunities!

By Baptista Research

  • Legrand, a French multinational company specializing in electrical and digital building infrastructure, concluded 2024 with noteworthy results, achieving its stated financial targets.
  • The company reported a combined sales growth of 3.9%, driven by organic expansion and acquisitions, despite facing headwinds such as currency fluctuations and reduced contributions from Russia.
  • Most prominently, Legrand’s data center segment and strategic M&A activities contributed significantly to its performance.

STMicro: Ugly but Mngt Says 1Q25 Is the Bottom. Restructuring Has to Start, Horrendous Inventories.

By Nicolas Baratte

  • Very poor 1Q25, operating profit close to zero. 2Q a bit better with lower revenue decline, but OP still close to zero.  
  • Management claims 1Q is the bottom for revenues, its possible, but 2 large risks: restructuring costs and very high inventories.
  • Consensus expects a slow recovery into 2026, the stock looks cheap at 11x 2026 EPS. However, given the firm’s track record and the risks mentioned, lets wait 1 more quarter.

Waaree Energies Pre IPO Lock-In Opens: What’s The Way Ahead

By Sudarshan Bhandari

  • Waaree Energies posted exceptional Q4 and FY25 results, reporting a 72.6% YoY increase in EBITDA and a robust order book of INR 47,000 crores.
  • The company continues to ramp up its manufacturing capacities, with a focus on solar cells, modules, and energy storage, positioning itself as a leader in India’s solar transition.
  • Strong operational performance, strategic investments in green energy, and a solid order book enhance confidence in Waaree’s growth prospects for FY26 and beyond.

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