Smartkarma Daily Briefs

Shin Etsu Chemical (4063 JP) reported FY earnings to beat January guidance for all four major measures, just slightly. They only guide 1 quarter out, and Q1 is up year-on-year…
…in revenues, but down in OP and NP. Note: OP and NP guidance is nearly identical to what they guided for Q1 last year on ¥585bn revenues (vs ¥610bn now)
The BIG news here is a Very Large Buyback. The company has long has huge piles of cash. This buyback (~90% of annual profit) starts to make use of it.

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

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.

HK Connect SOUTHBOUND Flows (To 25 Apr 2025); First Net Sell in Ages, Led by Heavy SOE Selling

Q1 saw record quarterly inflows by SOUTHBOUND investors at HK$435bn, beating the previous record of Q1 2021 by more than HK$100bn. The first three weeks in April were HK$168bn.
The fourth week (this past week) saw net outflows on low volume as SOUTHBOUND investors sold SOEs quite heavily.
9 of the top 10 Net Sells as % of Volume this past week had China, Beijing, or Shanghai as the first word in their name.

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

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

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.

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

I tally 49 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma.
No new deals discussed on Smartkarma this week. Although Dickson Concepts (113 HK), Bright Smart (1428 HK), and Jilin Jiutai Bank (6122 HK) are suspended pursuant to the Takeovers Code.
Key updates/news took place on Mayne Pharma (MYX AU), Piedmont (PLL AU)/Sayona (SYA AU), Jamco (7408 JP), Makino Milling (6135 JP), Sinarmas Land (SML SP), and Dada Nexus (DADA US).

Last Week in Event SPACE: GMO Internet, Hongkong Land, Shibaura Electronics, Millennium & Copthorne

Negligible float, highly manipulatable, 150x+ forward earnings – yes, investors can afford NOT to have GMO Internet (4784 JP) in their portfolio.
Hongkong Land (HKL SP) stamps its “recycling capital” motto and sells nine floors of One Exchange Square to HKEX (388 HK) for HK$6.3bn (US$810mn).
Shibaura Electronics (6957 JP)asks Minebea Mitsumi (6479 JP) whether they intend to change the consideration terms. Minebea says it is “proceeding with its consideration“.

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Apr 27

Daily Brief Equity Bottom-Up: Renesas 1Q25: Cheap Stock That’s Bottoming Out and more

By Smartkarma Daily Briefs | Daily Briefs, Equity Bottom-Up

In today’s briefing:

Renesas 1Q25: Cheap Stock That’s Bottoming Out
Monthly Chinese Tourism Tracker | March and Q125 Demand Growth Weak Vs Trend (April 2025)
Sumber Alfaria Trijaya (AMRT IJ) – Good Reason for Optimism
BYD (1211 HK): Rev up by 36% in 1Q25, Scale to Bring 60% Upside
Ramkrishna Forgings: Inventory Discrepancies Raise Concern Over Governance
Sage Group Plc: Initiation of Coverage- Network Services and Automation Expansion Can Fuel A Revenue Surge Across Regions!
Steel Dynamics: An Insight Into Its Shareholder Value & Strategic Capital Allocation!
Intuitive Surgical: Procedure Growth & Market Expansion to Strengthen Its Market Position!
NEXT Plc: Initiation of Coverage- Is the Zalando Alliance The Hidden Catalyst for International Growth?
China Healthcare Weekly (Apr.27)- Flaws Behind BeiGene’s Breakeven, Fosun Increased Stake in Henlius

Renesas 1Q25: Cheap Stock That’s Bottoming Out

By Nicolas Baratte

Revenues are still declining by ~teens% YoY but margins shows signs of improvements as end-demand improves and utilization is low.
Renesas doesn’t have an inventory problem and increasing revenues will lead to higher utilization and higher margins.
As Renesas is showing signs of a bottom, the stock is very cheap, trading at -2 standard deviations or 11x 2025 EPS, 9x 2026 EPS.

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.

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.

Ramkrishna Forgings: Inventory Discrepancies Raise Concern Over Governance

By Nimish Maheshwari

Ramkrishna Forgings (RK Forgings) recently reported discrepancies in its inventory during the annual physical verification for FY 2024.
The company has engaged independent external agencies to conduct a joint fact-finding study, aiming to maintain transparency and accountability.
Estimates suggest an adverse impact of 4-5% on the company’s net worth. While the impact on overall inventory is almost 10% of the total inventory, amounting to INR 120 crore

Sage Group Plc: Initiation of Coverage- Network Services and Automation Expansion Can Fuel A Revenue Surge Across Regions!

Sage Group PLC recently reported a successful year, demonstrating notable growth and a solid financial performance.
The company’s annual recurring revenue (ARR) increased for the third consecutive year, with a 11% rise to GBP 2.3 billion.
This growth was balanced between new and existing customers, reflecting effective customer retention strategies and upsell accomplishments.

Steel Dynamics: An Insight Into Its Shareholder Value & Strategic Capital Allocation!

Steel Dynamics, Inc. delivered a solid performance in the first quarter of 2025, demonstrating the company’s operational and financial stability amidst a challenging market environment.
The company reported a net income of $217 million or $1.44 per diluted share, supported by adjusted EBITDA of $448 million.
Total revenue rose to $4.4 billion, showing a 13% increase from the previous quarter, largely due to record steel shipments.

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

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.

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

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.

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 27

Daily Brief Macro: Overview#24 – Exiting No Man’s Land and more

By Smartkarma Daily Briefs | Daily Briefs, Macro

In today’s briefing:

Overview#24 – Exiting No Man’s Land

Overview#24 – Exiting No Man’s Land

By Rikki Malik

A review of recent events/data impacting our investment themes or outlook
Time to start unpacking your shorts for the summer season
Headlines should not distract from the big picture and provide trading opportunities

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Apr 27

Daily Brief Australia: Evolution Mining, Woodside Energy Group Ltd and more

By Smartkarma Daily Briefs | Australia, Daily Briefs

In today’s briefing:

Quiddity Leaderboard ASX Jun25: LONGs up +14% Vs SHORTs in a Month; Some Changes to Expectations
Woodside Energy: LNG Growth & Strategic Partnerships Fueling Our Optimism!

Quiddity Leaderboard ASX Jun25: LONGs up +14% Vs SHORTs in a Month; Some Changes to Expectations

By Janaghan Jeyakumar, CFA

In this insight, we take a look at the potential index changes for ASX 200, 100, 50, and 20 in the run-up to the June 2025 index rebal event.
We expect one change for ASX 20, one change for ASX 50, two changes for ASX 100, and one change for ASX 200. One month left in the reference period.
Our long basket is up 14% vs shorts in a month. Index Rebal is coming back. ASX Index final index changes will be announced publicly on 6th June 2025.

Woodside Energy: LNG Growth & Strategic Partnerships Fueling Our Optimism!

Woodside Energy Group Limited delivered a strong financial performance in its full year 2024 results, highlighting both the positives and negatives impacting the company.
On the positive side, Woodside achieved a record annual production of 194 million barrels of oil equivalent, driven by strong performance at its Sangomar project.
The company reported a net profit after tax of $3.6 billion, an improvement from the previous year, and declared a fully franked dividend of USD 1.22 per share.

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Apr 27

Daily Brief United States: Intuitive Surgical, Steel Dynamics, Alcoa , Csx Corp, Danaher Corp, Dr Horton Inc, Etoro Group, Eqt Corp, General Electric , Baker Hughes and more

By Smartkarma Daily Briefs | Daily Briefs, United States

In today’s briefing:

Intuitive Surgical: Procedure Growth & Market Expansion to Strengthen Its Market Position!
Steel Dynamics: An Insight Into Its Shareholder Value & Strategic Capital Allocation!
Alcoa’s Strategic Pivot Under Fire: Will Its Bold Moves Be Enough to Weather the Tariff Storm?
CSX Corporation: An Insight Into Intermodal Market Dynamics & The Biggest Forces Driving Them Forward!
Danaher Corporation: Navigating Market Volatility to Protect Its Market Position!
D.R. Horton Battles Tariff Headwinds: Will Smart Sourcing Strategies Protect Its Profits?
EToro IPO Preview: High Crypto Exposure, CopyTrader Technology Is Not “Deep Tech”
EQT Corporation: Can Its Olympus Midstream & Strategic Integration Enhance Overall Market Competitiveness?
GE Aerospace: Building Aircraft Engine Efficiency, Technological Advancements & Other Major Drivers!
Baker Hughes: Supply Chain Strategy & Tariff Mitigation to Safeguard Earnings Potential & Maintain Steady Operations!

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

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.

Steel Dynamics: An Insight Into Its Shareholder Value & Strategic Capital Allocation!

Steel Dynamics, Inc. delivered a solid performance in the first quarter of 2025, demonstrating the company’s operational and financial stability amidst a challenging market environment.
The company reported a net income of $217 million or $1.44 per diluted share, supported by adjusted EBITDA of $448 million.
Total revenue rose to $4.4 billion, showing a 13% increase from the previous quarter, largely due to record steel shipments.

Alcoa’s Strategic Pivot Under Fire: Will Its Bold Moves Be Enough to Weather the Tariff Storm?

Alcoa Corporation reported a strong first quarter for 2025, highlighted by improved safety performance and stable production across most operations.
The company maintained a commitment to operational excellence, focusing on safety, stability, and continuous improvement amid positive market conditions.
A key development was the improvement at the Alumar smelter in Brazil, which is now operating at 91% capacity.

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

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!

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.

D.R. Horton Battles Tariff Headwinds: Will Smart Sourcing Strategies Protect Its Profits?

D.R. Horton, Inc. recently reported its second quarter fiscal 2025 results, highlighting both challenges and achievements within a dynamic market environment.
The company’s earnings per diluted share were $2.58, down from $3.52 a year ago, with consolidated pretax income reaching $1.1 billion on revenues of $7.7 billion.
The gross profit margin on home sales for the quarter stood at 21.8%, reflecting the company’s disciplined approach amid market fluctuations.

EToro IPO Preview: High Crypto Exposure, CopyTrader Technology Is Not “Deep Tech”

By Andrei Zakharov

EToro Group Ltd., a social investment network and trading-app provider, plans to raise up to $400M in upcoming US IPO.
Israeli social trading platform was valued at ~$10B during a planned merger with a publicly-listed SPAC in 2022. However, the SPAC deal collapsed.
EToro launched copy trading services in 2010 and made a big bet on crypto segment. Revenue from cryptoassets accounted for ~96% of total revenue and income in 2024.

EQT Corporation: Can Its Olympus Midstream & Strategic Integration Enhance Overall Market Competitiveness?

EQT Corporation delivered strong results in the first quarter of 2025, emphasizing its strategic approach to maximizing value amid price volatility.
The company reported robust production at the high end of its guidance, aided by effective well performance and minimal winter disruptions.
Tactics like increasing production during highdemand winter periods allowed EQT to benefit from favorable Appalachian pricing, significantly boosting its core differential.

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

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%.

Baker Hughes: Supply Chain Strategy & Tariff Mitigation to Safeguard Earnings Potential & Maintain Steady Operations!

Baker Hughes Company delivered strong results in the first quarter of 2025, with adjusted EBITDA reaching $1.04 billion, marking a 10% year-over-year increase.
The performance was driven primarily by the Industrial & Energy Technology (IET) segment, which experienced significant growth and contributed to the company’s overall margin expansion.
Revenues for the quarter hit a record, supported by effective operational execution and strategic transformations, despite a challenging macroeconomic backdrop marked by geopolitical tensions, tariff uncertainties, and fluctuating oil prices.

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Apr 27

Daily Brief Indonesia: Sumber Alfaria Trijaya Tbk Pt and more

By Smartkarma Daily Briefs | Daily Briefs, Indonesia

In today’s briefing:

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

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.

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Apr 27

Daily Brief India: Ramkrishna Forgings , Hindustan Zinc and more

By Smartkarma Daily Briefs | Daily Briefs, India

In today’s briefing:

Ramkrishna Forgings: Inventory Discrepancies Raise Concern Over Governance
HZ IN: Operational Targets and Valuation Framework

Ramkrishna Forgings: Inventory Discrepancies Raise Concern Over Governance

By Nimish Maheshwari

Ramkrishna Forgings (RK Forgings) recently reported discrepancies in its inventory during the annual physical verification for FY 2024.
The company has engaged independent external agencies to conduct a joint fact-finding study, aiming to maintain transparency and accountability.
Estimates suggest an adverse impact of 4-5% on the company’s net worth. While the impact on overall inventory is almost 10% of the total inventory, amounting to INR 120 crore

HZ IN: Operational Targets and Valuation Framework

By Rahul Jain

Hindustan Zinc’s Q4 FY25 PAT rose 47% YoY to Rs3,003 crore; EBITDA grew 32% YoY; zinc cost of production hit a 16-quarter low at $994/t.
FY26 guidance targets 1.12 Mt mined metal, 700–710 MT silver, and zinc cost of production between $1,025–1,050/t, slightly higher due to ore grade normalization.
HZL trades at ~21.5x P/E and ~12x EV/EBITDA, at a premium to some global peers, with valuations sensitive to commodity prices, cost trends, and execution on expansion plans.

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Apr 27

Daily Brief China: Bright Smart Securities And, Tencent, Trip.com, Guangzhou Automobile Group, BYD, Shanghai Henlius Biotech and more

By Smartkarma Daily Briefs | China, Daily Briefs

In today’s briefing:

Bright Smart Securities (1428 HK): Ant’s Possible Unconditional MGO at HK$3.28
HK Connect SOUTHBOUND Flows (To 25 Apr 2025); First Net Sell in Ages, Led by Heavy SOE Selling
Monthly Chinese Tourism Tracker | March and Q125 Demand Growth Weak Vs Trend (April 2025)
A/H Premium Tracker (To 25 Apr 2025): AH Premia Fall Sharply; “Feels” Risk-On But Noisy Spreads
BYD (1211 HK): Rev up by 36% in 1Q25, Scale to Bring 60% Upside
China Healthcare Weekly (Apr.27)- Flaws Behind BeiGene’s Breakeven, Fosun Increased Stake in Henlius

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

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.

HK Connect SOUTHBOUND Flows (To 25 Apr 2025); First Net Sell in Ages, Led by Heavy SOE Selling

Q1 saw record quarterly inflows by SOUTHBOUND investors at HK$435bn, beating the previous record of Q1 2021 by more than HK$100bn. The first three weeks in April were HK$168bn.
The fourth week (this past week) saw net outflows on low volume as SOUTHBOUND investors sold SOEs quite heavily.
9 of the top 10 Net Sells as % of Volume this past week had China, Beijing, or Shanghai as the first word in their name.

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

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

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.

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.

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 27

Daily Brief Japan: Shin Etsu Chemical, Renesas Electronics, Fujitsu General, Makino Milling Machine Co, TSE Tokyo Price Index TOPIX, GMO Internet and more

By Smartkarma Daily Briefs | Daily Briefs, Japan

In today’s briefing:

Shin-Etsu Chemical (4063) – OK Earnings, OK Forecast, But Ground-Breaking Buyback
Renesas 1Q25: Cheap Stock That’s Bottoming Out
Fujitsu General (6755 JP): Done Deal as Precondition Satisfied
(Mostly) Asia-Pac M&A: Mayne Pharma, Piedmont/Sayona, Jamco, Makino Milling, Sinarmas, Dada Nexus
Expect Gradual Improvement in the Quality of Listed Companies as More Companies Go Private
Last Week in Event SPACE: GMO Internet, Hongkong Land, Shibaura Electronics, Millennium & Copthorne

Shin-Etsu Chemical (4063) – OK Earnings, OK Forecast, But Ground-Breaking Buyback

Shin Etsu Chemical (4063 JP) reported FY earnings to beat January guidance for all four major measures, just slightly. They only guide 1 quarter out, and Q1 is up year-on-year…
…in revenues, but down in OP and NP. Note: OP and NP guidance is nearly identical to what they guided for Q1 last year on ¥585bn revenues (vs ¥610bn now)
The BIG news here is a Very Large Buyback. The company has long has huge piles of cash. This buyback (~90% of annual profit) starts to make use of it.

Renesas 1Q25: Cheap Stock That’s Bottoming Out

By Nicolas Baratte

Revenues are still declining by ~teens% YoY but margins shows signs of improvements as end-demand improves and utilization is low.
Renesas doesn’t have an inventory problem and increasing revenues will lead to higher utilization and higher margins.
As Renesas is showing signs of a bottom, the stock is very cheap, trading at -2 standard deviations or 11x 2025 EPS, 9x 2026 EPS.

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

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.

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

I tally 49 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma.
No new deals discussed on Smartkarma this week. Although Dickson Concepts (113 HK), Bright Smart (1428 HK), and Jilin Jiutai Bank (6122 HK) are suspended pursuant to the Takeovers Code.
Key updates/news took place on Mayne Pharma (MYX AU), Piedmont (PLL AU)/Sayona (SYA AU), Jamco (7408 JP), Makino Milling (6135 JP), Sinarmas Land (SML SP), and Dada Nexus (DADA US).

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.

Last Week in Event SPACE: GMO Internet, Hongkong Land, Shibaura Electronics, Millennium & Copthorne

Negligible float, highly manipulatable, 150x+ forward earnings – yes, investors can afford NOT to have GMO Internet (4784 JP) in their portfolio.
Hongkong Land (HKL SP) stamps its “recycling capital” motto and sells nine floors of One Exchange Square to HKEX (388 HK) for HK$6.3bn (US$810mn).
Shibaura Electronics (6957 JP)asks Minebea Mitsumi (6479 JP) whether they intend to change the consideration terms. Minebea says it is “proceeding with its consideration“.

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Apr 27

Most Read: Sanrio, Nexchip Semiconductor , Swiggy, Suzhou Kematek, Vcanbio Cell & Gene Engineering, Bank Jago Tbk PT, Shin Etsu Chemical, Bright Smart Securities And, Renesas Electronics and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

Sanrio (8136 JP): Global Index Inclusion in May
CNI Semiconductor Chips Index Rebalance Preview: One Change in June
Swiggy (SWIGGY IN): US$7.6bn Lock-Up Expiry & Index Inclusion
CSI All Share Semiconductor Index Rebalance Preview: Multiple Index Flows for Some Stocks
CSI Medical Service Index Rebalance Preview: Five Potential Changes in June
IDX30/LQ45/IDX80 Index Rebalance: Few Changes
Shin-Etsu Chemical (4063) – OK Earnings, OK Forecast, But Ground-Breaking Buyback
HEW: Put Inside The Trump Collar
Bright Smart Securities (1428 HK): Ant’s Possible Unconditional MGO at HK$3.28
Renesas 1Q25: Cheap Stock That’s Bottoming Out

Sanrio (8136 JP): Global Index Inclusion in May

Sanrio (8136 JP)‘s stock price dropped following the placement announcement in November. Then there was a rally in the stock amid increased volatility.
The placement resulted in an increase in free float and the move higher in the stock could lead to Sanrio (8136 JP) being added to a global index in May.
There is positioning in the stock but a lot of that appears to have been taken off in the last month. The stock could move higher depending on global cues.

CNI Semiconductor Chips Index Rebalance Preview: One Change in June

There could be one change for the CNI Semiconductor Chips Index with Nexchip Semiconductor (688249 CH) replacing Amlogic Shanghai (688099 CH) in June.
Passive trackers are estimated to buy 1.4x ADV in Nexchip Semiconductor and sell 0.8x ADV in Amlogic Shanghai. There will be buying in Semiconductor Manufacturing International Corporation (SMIC) due to capping.
The forecast add and delete have performed in line since the start of the year but there has been a move higher in the last few weeks.

Swiggy (SWIGGY IN): US$7.6bn Lock-Up Expiry & Index Inclusion

Swiggy (SWIGGY IN) listed in November 2024 and around 85% of the shares outstanding (US$7.6bn) will unlock on 13 May.
Nearly 80% of the shares that unlock are held by pre-IPO PE/VC investors and they are 100% in the money in most cases. Expect the selldown to commence soon.
Swiggy (SWIGGY IN) should be added to one global index in June, while inclusion in the other global index will require a small price increase or selling from PE/VC investors.

CSI All Share Semiconductor Index Rebalance Preview: Multiple Index Flows for Some Stocks

The review period for the June rebalance of the CSI All Share Semiconductor Index ends 30 April. The changes should be announced on 30 May and implemented on 13 June.
We forecast 4/5 adds and 8 deletes for the index with a one-way turnover of 2.4% and a round-trip trade of CNY 990m (US$136m).
There are many forecast adds and deletes that will have same side flows from trackers of the CES China Semiconductor Chips Index and the CNI Semiconductor Chips Index.

CSI Medical Service Index Rebalance Preview: Five Potential Changes in June

The review period ends on 30 April, the changes should be announced on 30 May and will be effective after the close of trading on 13 June.
We forecast 5 potential changes for the index in June where there could be buying of 0.5-2x ADV in the adds and selling of between 0.7-3.8x ADV in the deletes.
The forecast adds and deletes have performed in line over the last few months and there could be outperformance as we near the end of the review period and announcement.

IDX30/LQ45/IDX80 Index Rebalance: Few Changes

There is 1 constituent change for the IDX30 Index and 2 changes for the IDX80 Index to be implemented at the close on 30 April.
The largest passive flows are expected in Bank Rakyat Indonesia, Bank Jago Tbk PT, Bank Mandiri Persero, Bank Tabungan Negara Persero, Adaro Energy and Bukalapak.com PT Tbk.
There are only 4 days to implementation, so there could be relatively big moves on the changes to the IDX30 Index.

Shin-Etsu Chemical (4063) – OK Earnings, OK Forecast, But Ground-Breaking Buyback

Shin Etsu Chemical (4063 JP) reported FY earnings to beat January guidance for all four major measures, just slightly. They only guide 1 quarter out, and Q1 is up year-on-year…
…in revenues, but down in OP and NP. Note: OP and NP guidance is nearly identical to what they guided for Q1 last year on ¥585bn revenues (vs ¥610bn now)
The BIG news here is a Very Large Buyback. The company has long has huge piles of cash. This buyback (~90% of annual profit) starts to make use of it.

HEW: Put Inside The Trump Collar

By Phil Rush

The US policy caused market volatility over Easter, creating a ‘Trump Collar’ to pricing, but the global economy remains unaffected by the attacks and uncertainty.
The upcoming week will see a heavy release of data, providing insights into current conditions.
Key data highlights include US payrolls, the ISMs, and Euro inflation for April, while Q1 EA and US GDP are likely to be discounted by the market as outdated information.

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