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Smartkarma Daily Briefs

Daily Brief Event-Driven: Merger Arb Mondays (25 Nov) – Seven & I and more

By | Daily Briefs, Event-Driven

In today’s briefing:

  • Merger Arb Mondays (25 Nov) – Seven & I, Fuji Soft, ID&EH, Arcadium, Henlius, Canvest, GAPack
  • HSTECH Index Rebalance: Midea (300 HK) Replaces Weibo (9898 HK); US$1.5bn Round-Trip Trade
  • Henlius (2696 HK): NDRC Approval Should Calm Nerves
  • Hang Seng Index (HSI) Rebalance: Still Baby Steps to Get to 100 Members
  • HK Connect SOUTHBOUND Flows (To 22 Nov 2024); Volumes Much Lower But Broad-Based Buying Continues
  • Henlius (2696 HK): The Spread Should Narrow After NDRC Approval
  • A/H Premium Tracker (To 22 Nov 2024): AH Premia Rise Sharply; Hs Shellacked Vs As In Most Sectors
  • China Healthcare Weekly (Nov.24) – 10th VBP, Biotech Valuation Logic, China Resources Reorganization



HSTECH Index Rebalance: Midea (300 HK) Replaces Weibo (9898 HK); US$1.5bn Round-Trip Trade

By Brian Freitas


Henlius (2696 HK): NDRC Approval Should Calm Nerves

By Arun George

  • Due to several factors, the gross spread of Shanghai Fosun Pharmaceutical (Group) (2196 HK)’s HK$24.60 offer for Shanghai Henlius Biotech (2696 HK) has widened to 21.5%.
  • The wide gross spread reflects the China TCM deal break hangover, slow progress in satisfying the precondition, Fosun Pharma’s potential funding challenges, and the shareholder vote. 
  • NDRC approval should calm nerves about precondition satisfaction. Even with lingering deal-break concerns, a 21.5% gross spread is excessive.

Hang Seng Index (HSI) Rebalance: Still Baby Steps to Get to 100 Members

By Brian Freitas


HK Connect SOUTHBOUND Flows (To 22 Nov 2024); Volumes Much Lower But Broad-Based Buying Continues

By Travis Lundy

  • SOUTHBOUND gross trading activity dropped sharply but net SOUTHBOUND buying remains very strong and very broad-based. 
  • The trend continues to be net buying of tech though Friday saw a lot of profits taken in Tech names by SOUTHBOUND holders.
  • I expect HK-listed tech to continue getting bought. Alibaba, Tencent, Xiaomi, etc are safe havens against Trump tariffs as they don’t compete in the US. Still. 

Henlius (2696 HK): The Spread Should Narrow After NDRC Approval

By David Blennerhassett

  • On the 24th June, Fosun Pharmaceutical (2196 HK) made a HK$24.60/share Offer, in cash, for H-shares not held in Shanghai Henlius Biotech (2696 HK). A scrip alternative was subsequently afforded.
  • This is a pre-conditional Offer, subject to NDRC, Mofcom and SAFE – followed by a Scheme-like vote for independent H-shareholders. Henlius has announced that NDRC approval has now been secured.
  • Trading at a massive gross spread of ~21.5% compared to ~10% just prior to China Traditional Chinese Medicine (570 HK)‘s capitulation. This is excessive.

A/H Premium Tracker (To 22 Nov 2024): AH Premia Rise Sharply; Hs Shellacked Vs As In Most Sectors

By Travis Lundy

  • Huge volumes continue to be traded on the mainland share markets. SOUTHBOUND volumes dropped sharply but net buying continued strongly.
  • Stocks in HK and mainland markets fell heavily with HK’s main indices down 6-7% and China’s blue chip indices down 3.3-3.6% (CSI 500 – 4.8%).
  • Within H/A Pairs, after outperforming the HK/mainland spread for weeks, spreads got shellacked. Worst week in a long time (-3.7%), perhaps on the back of “disappointing” lack of stimulus measures.

China Healthcare Weekly (Nov.24) – 10th VBP, Biotech Valuation Logic, China Resources Reorganization

By Xinyao (Criss) Wang


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Daily Brief Macro: Trump Trades Remain Intact and more

By | Daily Briefs, Macro

In today’s briefing:

  • Trump Trades Remain Intact, but Markets Will Not Offer Total Freedom on Fiscal Policy
  • All Hail the Bullish Reversal
  • Deciphering Trumponomics 2.0
  • The Next Four Years…
  • Iron Ore Tracker (25-Nov-2024): Waiting For Incremental Catalysts


Trump Trades Remain Intact, but Markets Will Not Offer Total Freedom on Fiscal Policy

By Said Desaque

  • While US equities have already discounted better times under a second Trump administration, the dollar is continuing to appreciate based on better growth expectations, particularly versus the UK and Eurozone.
  • After years of excessive regulatory requirements on banks, rumours are abound that the new Trump administration will revoke Basel 3 capital requirements to boost lending to the real economy.
  • The Trump administration will face legislative barriers via filibusters. Financial markets will not give the second Trump administration an indefinite carte blanche with respect to any profligate fiscal policy conduct.

All Hail the Bullish Reversal

By Cam Hui

  • The S&P 500 arrested its decline at its 20 dma and exhibited a bullish reversal and this reversal was confirmed by bullish internals.
  • Our base case calls for a rally into year-end. The coming week is the start of the seasonally bullish period to year-end.
  • One key risk is option sentiment, is showing signs of froth, though other sentiment indicators remain in neutral territory.

Deciphering Trumponomics 2.0

By Cam Hui

  • Looking to 2025, market returns are likely to be more uncertain than in the past. The degree of dispersion in the range of forecasts is wider than usual.
  • There will be winners and losers. Deregulation should benefit the energy, AI-related technology, and financials. 
  • Losers include bonds, and construction stocks because of their sensitivity to both rising rates and heightened labour costs from deportation.

The Next Four Years…

By Thomas Lam

  • The Republican sweep, both in Congress and the White House, seems to have sparked a risk-on attitude across financial markets of late
  • But Republican presidencies have coincided more regularly with periods of post-war economic downturns
  • And the disparate US equity market performance enveloping presidential cycles is a nagging puzzle   

Iron Ore Tracker (25-Nov-2024): Waiting For Incremental Catalysts

By Sameer Taneja

  • Iron ore prices were rangebound and maintained at over 100 USD/ton. In the last four years, they have been in a 95-130 USD/ton range. 
  • China TSF (Total Social Financing) disappointed the street with 1.4 trillion RMB (-24% YoY), compared to the street estimates of >1.5 trillion RMB.
  • We believe that more significant lending numbers would catalyze the iron ore price, but till then, iron prices will remain stagnant at the 100 USD/ton level. 

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Daily Brief Japan: Seven & I Holdings, Meiji Holdings, FineToday Holdings Co Ltd, Kioxia Holdings , Takasago Thermal Engineering and more

By | Daily Briefs, Japan

In today’s briefing:

  • Merger Arb Mondays (25 Nov) – Seven & I, Fuji Soft, ID&EH, Arcadium, Henlius, Canvest, GAPack
  • Meiji Holdings Placement – Momentum Leading into This Cross-Shareholding Selldown Isn’t the Greatest
  • FineToday Holdings (289A JP) IPO: The Bear Case
  • ECM Weekly (25th Nov 2024) – SF, Kioxia Digico, Pony, Finetoday, Saint Bella, Zinka, Keppel DC
  • Takasago Thermal Engineering (1969): Start of Multi-Year Bull



Meiji Holdings Placement – Momentum Leading into This Cross-Shareholding Selldown Isn’t the Greatest

By Clarence Chu

  • A group of investors are looking to raise US$264m from trimming a portion of their stakes in Meiji Holdings (2269 JP).
  • While the deal shouldn’t come as a surprise, given 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.

FineToday Holdings (289A JP) IPO: The Bear Case

By Arun George

  • FineToday Holdings Co Ltd (289A JP) is a Japanese personal care business seeking to raise up to US$500 million. It will be listed on 17 December.
  • In FineToday Holdings (289A JP) IPO: The Bull Case, we highlighted the key elements of the bull case. In this note, we outline the bear case.
  • The bear case rests on the weak 3Q24 revenue performance, mid-tier revenue growth, leveraged balance sheet, share overhang and pre-IPO dividend.

ECM Weekly (25th Nov 2024) – SF, Kioxia Digico, Pony, Finetoday, Saint Bella, Zinka, Keppel DC

By Sumeet Singh

  • Aequitas Research’s weekly update on the IPOs, placements, lockup expiry and other ECM linked events that were covered by the team over the past week.
  • On the IPOs front, S.F. Holding (6936 HK) and Kioxia Holdings (6600 JP) launched their much awaited IPO, while we had a new launche in Australia in as well.
  • On the placements front, Keppel DC REIT (KDCREIT SP) undertook a large placement

Takasago Thermal Engineering (1969): Start of Multi-Year Bull

By Henry Soediarko

  • Takasago Thermal Engineering (1969 JP) is one of the top 10 players in Japan for energy efficiency players for industrial clients, especially semiconductors. 
  • Japan Metropolitan Govt bought stake in Rapidus, signifying a potential long-term business potential for Takasago Thermal Engineering. 
  • Valuation is no longer dirt cheap but still at a favorable level given its potential enlarged revenue growth. 

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Daily Brief Australia: Iron Ore and more

By | Australia, Daily Briefs

In today’s briefing:

  • Iron Ore Tracker (25-Nov-2024): Waiting For Incremental Catalysts


Iron Ore Tracker (25-Nov-2024): Waiting For Incremental Catalysts

By Sameer Taneja

  • Iron ore prices were rangebound and maintained at over 100 USD/ton. In the last four years, they have been in a 95-130 USD/ton range. 
  • China TSF (Total Social Financing) disappointed the street with 1.4 trillion RMB (-24% YoY), compared to the street estimates of >1.5 trillion RMB.
  • We believe that more significant lending numbers would catalyze the iron ore price, but till then, iron prices will remain stagnant at the 100 USD/ton level. 

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Daily Brief China: Shanghai Henlius Biotech , Midea Group, Kuaishou Technology, Alibaba Group Holding , Cssc Offshore & Marine Engg Group, Travelsky Technology Ltd H, China Resources Pharmaceutical, Xiaomi Corp and more

By | China, Daily Briefs

In today’s briefing:

  • Henlius (2696 HK): NDRC Approval Should Calm Nerves
  • HSTECH Index Rebalance: Midea (300 HK) Replaces Weibo (9898 HK); US$1.5bn Round-Trip Trade
  • Hang Seng Index (HSI) Rebalance: Still Baby Steps to Get to 100 Members
  • HK Connect SOUTHBOUND Flows (To 22 Nov 2024); Volumes Much Lower But Broad-Based Buying Continues
  • A/H Premium Tracker (To 22 Nov 2024): AH Premia Rise Sharply; Hs Shellacked Vs As In Most Sectors
  • Henlius (2696 HK): The Spread Should Narrow After NDRC Approval
  • Travelsky (696): Sleepy Giant
  • China Healthcare Weekly (Nov.24) – 10th VBP, Biotech Valuation Logic, China Resources Reorganization
  • China Consumption Weekly (25 Nov 2024): Xiaomi, Haier, Autohome, Xpeng, Full Truck, Tongcheng
  • [Kuaishou (1024 HK, BUY, TP HK$72) TP Change]: C3Q24 Review: Value Stocks Face Picky Investors


Henlius (2696 HK): NDRC Approval Should Calm Nerves

By Arun George

  • Due to several factors, the gross spread of Shanghai Fosun Pharmaceutical (Group) (2196 HK)’s HK$24.60 offer for Shanghai Henlius Biotech (2696 HK) has widened to 21.5%.
  • The wide gross spread reflects the China TCM deal break hangover, slow progress in satisfying the precondition, Fosun Pharma’s potential funding challenges, and the shareholder vote. 
  • NDRC approval should calm nerves about precondition satisfaction. Even with lingering deal-break concerns, a 21.5% gross spread is excessive.

HSTECH Index Rebalance: Midea (300 HK) Replaces Weibo (9898 HK); US$1.5bn Round-Trip Trade

By Brian Freitas


Hang Seng Index (HSI) Rebalance: Still Baby Steps to Get to 100 Members

By Brian Freitas


HK Connect SOUTHBOUND Flows (To 22 Nov 2024); Volumes Much Lower But Broad-Based Buying Continues

By Travis Lundy

  • SOUTHBOUND gross trading activity dropped sharply but net SOUTHBOUND buying remains very strong and very broad-based. 
  • The trend continues to be net buying of tech though Friday saw a lot of profits taken in Tech names by SOUTHBOUND holders.
  • I expect HK-listed tech to continue getting bought. Alibaba, Tencent, Xiaomi, etc are safe havens against Trump tariffs as they don’t compete in the US. Still. 

A/H Premium Tracker (To 22 Nov 2024): AH Premia Rise Sharply; Hs Shellacked Vs As In Most Sectors

By Travis Lundy

  • Huge volumes continue to be traded on the mainland share markets. SOUTHBOUND volumes dropped sharply but net buying continued strongly.
  • Stocks in HK and mainland markets fell heavily with HK’s main indices down 6-7% and China’s blue chip indices down 3.3-3.6% (CSI 500 – 4.8%).
  • Within H/A Pairs, after outperforming the HK/mainland spread for weeks, spreads got shellacked. Worst week in a long time (-3.7%), perhaps on the back of “disappointing” lack of stimulus measures.

Henlius (2696 HK): The Spread Should Narrow After NDRC Approval

By David Blennerhassett

  • On the 24th June, Fosun Pharmaceutical (2196 HK) made a HK$24.60/share Offer, in cash, for H-shares not held in Shanghai Henlius Biotech (2696 HK). A scrip alternative was subsequently afforded.
  • This is a pre-conditional Offer, subject to NDRC, Mofcom and SAFE – followed by a Scheme-like vote for independent H-shareholders. Henlius has announced that NDRC approval has now been secured.
  • Trading at a massive gross spread of ~21.5% compared to ~10% just prior to China Traditional Chinese Medicine (570 HK)‘s capitulation. This is excessive.

Travelsky (696): Sleepy Giant

By Henry Soediarko

  • Despite being a key beneficiary in travel and tourism in China, the rather muted growth in the first half does not bode well for Travelsky Technology Ltd H (696 HK) .
  • YTD share price performance has reflected the above, but the deep discount valuation to Trip.com (TCOM US) might be temporary.
  • In the near term, the company’s share price will not rebound as the company has less upside participation compared to Airlines and OTA. 

China Healthcare Weekly (Nov.24) – 10th VBP, Biotech Valuation Logic, China Resources Reorganization

By Xinyao (Criss) Wang


China Consumption Weekly (25 Nov 2024): Xiaomi, Haier, Autohome, Xpeng, Full Truck, Tongcheng

By Ming Lu

  • Haier plans to acquire all shares of Autohome and dismiss 30% of Autohome’s employees.
  • In 3Q24, Xiaomi’s revenue grew by 30% YoY or 17% YoY without electric vehicle.
  • In 3Q24, Tongcheng Travel’s revenue increased by 51% YoY with gross profit up by 29% YoY.

[Kuaishou (1024 HK, BUY, TP HK$72) TP Change]: C3Q24 Review: Value Stocks Face Picky Investors

By Ying Pan

  • Kuaishou reported C3Q24 revenue, IFRS operating profit,and IFRS net income in-line with our estimates and consensus.The only negative was that C4Q24 guidance for operating margin missed consensus and our estimate;
  • Within mid-sized Internet platforms, Kuaishou lacks fresh secular driver, putting its stock under pressure. Advertising and GMV growth still outpace the industry and some peers. The stock is undervalued;
  • We maintain our BUY rating and slightly revised down TP to HK$72 to make up for the higher-than-expected OPEX guidance.

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Daily Brief India: Adani Ports & Special Economic Zone and more

By | Daily Briefs, India

In today’s briefing:

  • Morning Views Asia: Adani Ports & Special Economic Zone, Bharti Airtel


Morning Views Asia: Adani Ports & Special Economic Zone, Bharti Airtel

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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Most Read: Zomato, Kioxia Holdings , Meiji Holdings, Seven & I Holdings, Shanghai Henlius Biotech , Midea Group, Kuaishou Technology and more

By | Daily Briefs, Most Read

In today’s briefing:

  • Shanghai Henlius Biotech (2696.HK) Privatization Update – These Are the Potential Risks Behind
  • SENSEX Index Rebalance: F&O Inclusion Brings First of Many Index Inclusions for Zomato
  • Kioxia IPO Preview
  • Meiji Holdings (2269 JP) Offering – May Approach a 9Yr Low
  • Merger Arb Mondays (25 Nov) – Seven & I, Fuji Soft, ID&EH, Arcadium, Henlius, Canvest, GAPack
  • Henlius (2696 HK): NDRC Approval Should Calm Nerves
  • HSTECH Index Rebalance: Midea (300 HK) Replaces Weibo (9898 HK); US$1.5bn Round-Trip Trade
  • HSCI Index Rebalance: Midea (300 HK) And Black Sesame (2533 HK) Added
  • Hang Seng Index (HSI) Rebalance: Still Baby Steps to Get to 100 Members
  • Meiji Holdings Placement – Momentum Leading into This Cross-Shareholding Selldown Isn’t the Greatest


Shanghai Henlius Biotech (2696.HK) Privatization Update – These Are the Potential Risks Behind

By Xinyao (Criss) Wang

  • On the surface, the 24Q3 results are not bad, but if take a close look, the real situation of Fosun Pharma is still not optimistic.
  • There are rumors that Fosun Pharma may have encountered funding issues, thus casting a shadow over the prospects of this privatization.
  • The motivation and underlying logic for Fosun Pharma to privatize Henlius are both solid.Potential risks currently on the table are funding issues and whether Pre-Condition approval process will go smoothly.

SENSEX Index Rebalance: F&O Inclusion Brings First of Many Index Inclusions for Zomato

By Brian Freitas


Kioxia IPO Preview

By Douglas Kim

  • Kioxia plans to complete its IPO on 18 December, valuing Kioxia at 750 billion yen ($4.8 billion), down nearly 50% from the initial market value estimates about 2-3 months ago. 
  • Kioxia had revenue of 909.4 billion Yen (up 84.6% YoY) and EBITDA of 449.6 billion Yen in 1H FY24, driven by the recovering demand for data center and enterprise SSDs.
  • As of 2Q 2024, Samsung Electronics was the largest player in the global NAND Flash market with a 36.9% market, followed by SK Group (22.1%), and Kioxia (13.8%).

Meiji Holdings (2269 JP) Offering – May Approach a 9Yr Low

By Travis Lundy

  • Meiji Holdings (2269 JP) on Friday announced 9 different banks would sell 4.7% of float in an equity offering to price in the first few days of December 2024.
  • The shares closed Friday within 1.5% of a 52wk low. The shares are less than 9% off a 9-year low. The offering is about US$300mm and 15 days of ADV.
  • Given the stock is under-levered, and structurally a low volatility name, a large move should encourage buying.


Henlius (2696 HK): NDRC Approval Should Calm Nerves

By Arun George

  • Due to several factors, the gross spread of Shanghai Fosun Pharmaceutical (Group) (2196 HK)’s HK$24.60 offer for Shanghai Henlius Biotech (2696 HK) has widened to 21.5%.
  • The wide gross spread reflects the China TCM deal break hangover, slow progress in satisfying the precondition, Fosun Pharma’s potential funding challenges, and the shareholder vote. 
  • NDRC approval should calm nerves about precondition satisfaction. Even with lingering deal-break concerns, a 21.5% gross spread is excessive.

HSTECH Index Rebalance: Midea (300 HK) Replaces Weibo (9898 HK); US$1.5bn Round-Trip Trade

By Brian Freitas


HSCI Index Rebalance: Midea (300 HK) And Black Sesame (2533 HK) Added

By Brian Freitas


Hang Seng Index (HSI) Rebalance: Still Baby Steps to Get to 100 Members

By Brian Freitas


Meiji Holdings Placement – Momentum Leading into This Cross-Shareholding Selldown Isn’t the Greatest

By Clarence Chu

  • A group of investors are looking to raise US$264m from trimming a portion of their stakes in Meiji Holdings (2269 JP).
  • While the deal shouldn’t come as a surprise, given 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 Consumer: Seven & I Holdings, Midea Group, Meiji Holdings, Alibaba Group Holding , FineToday Holdings Co Ltd, Meituan, Nameson Holdings, Cainiao Smart Logistics Network and more

By | Consumer, Daily Briefs

In today’s briefing:

  • Merger Arb Mondays (25 Nov) – Seven & I, Fuji Soft, ID&EH, Arcadium, Henlius, Canvest, GAPack
  • HSTECH Index Rebalance: Midea (300 HK) Replaces Weibo (9898 HK); US$1.5bn Round-Trip Trade
  • Meiji Holdings Placement – Momentum Leading into This Cross-Shareholding Selldown Isn’t the Greatest
  • HK Connect SOUTHBOUND Flows (To 22 Nov 2024); Volumes Much Lower But Broad-Based Buying Continues
  • FineToday Holdings (289A JP) IPO: The Bear Case
  • MT/Meituan (3690 HK) 3Q24 Earnings Preview: Upside Narrowed to 50%
  • Nameson Holdings (1982 HK) H1 FY25: 16-17% Dividend Yield Intact
  • CaiNiao Q2FY: Pressure on Profitability Has Intensified | X-Border Competition the Likely Culprit



HSTECH Index Rebalance: Midea (300 HK) Replaces Weibo (9898 HK); US$1.5bn Round-Trip Trade

By Brian Freitas


Meiji Holdings Placement – Momentum Leading into This Cross-Shareholding Selldown Isn’t the Greatest

By Clarence Chu

  • A group of investors are looking to raise US$264m from trimming a portion of their stakes in Meiji Holdings (2269 JP).
  • While the deal shouldn’t come as a surprise, given 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.

HK Connect SOUTHBOUND Flows (To 22 Nov 2024); Volumes Much Lower But Broad-Based Buying Continues

By Travis Lundy

  • SOUTHBOUND gross trading activity dropped sharply but net SOUTHBOUND buying remains very strong and very broad-based. 
  • The trend continues to be net buying of tech though Friday saw a lot of profits taken in Tech names by SOUTHBOUND holders.
  • I expect HK-listed tech to continue getting bought. Alibaba, Tencent, Xiaomi, etc are safe havens against Trump tariffs as they don’t compete in the US. Still. 

FineToday Holdings (289A JP) IPO: The Bear Case

By Arun George

  • FineToday Holdings Co Ltd (289A JP) is a Japanese personal care business seeking to raise up to US$500 million. It will be listed on 17 December.
  • In FineToday Holdings (289A JP) IPO: The Bull Case, we highlighted the key elements of the bull case. In this note, we outline the bear case.
  • The bear case rests on the weak 3Q24 revenue performance, mid-tier revenue growth, leveraged balance sheet, share overhang and pre-IPO dividend.

MT/Meituan (3690 HK) 3Q24 Earnings Preview: Upside Narrowed to 50%

By Ming Lu

  • The stock has risen 84% in one year, but we still believe there is an upside of 49%.
  • We believe the operating margin will continue to improve significantly in 3Q24.
  • We also believe the growth rates of all main businesses should be healthy in 3Q24.

Nameson Holdings (1982 HK) H1 FY25: 16-17% Dividend Yield Intact

By Sameer Taneja


CaiNiao Q2FY: Pressure on Profitability Has Intensified | X-Border Competition the Likely Culprit

By Daniel Hellberg

  • CaiNiao’s Q2FY Y/Y revenue growth moderated to just +8%, and EBITA declined by -94% Y/Y
  • We believe X-border volume remains strong, but X-border price has plummeted
  • Considering CaiNiao’s & Alibaba’s Q2FY results, unclear who makes money in X-border

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Daily Brief Industrials: Cssc Offshore & Marine Engg Group, Takasago Thermal Engineering, Adani Ports & Special Economic Zone, China State Construction Int’L, Hutchmed China Ltd, S.F. Holding and more

By | Daily Briefs, Industrials

In today’s briefing:

  • A/H Premium Tracker (To 22 Nov 2024): AH Premia Rise Sharply; Hs Shellacked Vs As In Most Sectors
  • Takasago Thermal Engineering (1969): Start of Multi-Year Bull
  • Morning Views Asia: Adani Ports & Special Economic Zone, Bharti Airtel
  • China State Construction Intl (3311 HK): Steady as It Goes
  • Hutchmed China Ltd (13.HK/​​HCM.US) – The Fundamentals Remain Strong
  • Monthly Chinese Express Tracker | October Volume Firmed | ZTO Disappoints | SF HK IPO This Week


A/H Premium Tracker (To 22 Nov 2024): AH Premia Rise Sharply; Hs Shellacked Vs As In Most Sectors

By Travis Lundy

  • Huge volumes continue to be traded on the mainland share markets. SOUTHBOUND volumes dropped sharply but net buying continued strongly.
  • Stocks in HK and mainland markets fell heavily with HK’s main indices down 6-7% and China’s blue chip indices down 3.3-3.6% (CSI 500 – 4.8%).
  • Within H/A Pairs, after outperforming the HK/mainland spread for weeks, spreads got shellacked. Worst week in a long time (-3.7%), perhaps on the back of “disappointing” lack of stimulus measures.

Takasago Thermal Engineering (1969): Start of Multi-Year Bull

By Henry Soediarko

  • Takasago Thermal Engineering (1969 JP) is one of the top 10 players in Japan for energy efficiency players for industrial clients, especially semiconductors. 
  • Japan Metropolitan Govt bought stake in Rapidus, signifying a potential long-term business potential for Takasago Thermal Engineering. 
  • Valuation is no longer dirt cheap but still at a favorable level given its potential enlarged revenue growth. 

Morning Views Asia: Adani Ports & Special Economic Zone, Bharti Airtel

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.


China State Construction Intl (3311 HK): Steady as It Goes

By Osbert Tang, CFA

  • China State Construction Int’l (3311 HK)‘s backlog of HK$418.26bn is enough to cover 3x consensus forecast revenue of FY25, providing comfort for secured earnings outlook. 
  • The focus on public housing and municipal projects limits its exposure to the real estate market. Its consecutive earnings growth in last five years demonstrated its resilience.
  • With ROE of 15-16%, its P/B of 0.8x is cheap. The reduction in operating cash outflow supports higher payout ratio, and its dividend yield of 5.6-6.3% is healthy. 

Hutchmed China Ltd (13.HK/​​HCM.US) – The Fundamentals Remain Strong

By Xinyao (Criss) Wang

  • HUTCHMED will receive a US$20 million milestone payment from its partner Takeda. In our view, peak sales of fruquintinib is expected to reach about US$700 million in overseas markets.
  • After the Head of AstraZeneca China has been detained by authorities, AstraZeneca’s future commercialization would be affected, which will have a negative impact on savolitinib and HUTCHMED in short term.
  • Reasonable market value of HUTCHMED based on the three major products is about US$2.7-3.3 billion assuming P/S of 4. If market value is below US$2.5 billion, HUTCHMED is undervalued.

Monthly Chinese Express Tracker | October Volume Firmed | ZTO Disappoints | SF HK IPO This Week

By Daniel Hellberg

  • October volume firmed, but price data is mixed; X-border activity trended stronger
  • ZTO’s shares sagged after it reported weaker Q324 margins & lowered FY24 guidance
  • Market leader SF Holding’s long-awaited HK IPO should price & begin trading this week

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Daily Brief Industrials: Cssc Offshore & Marine Engg Group, Takasago Thermal Engineering, Adani Ports & Special Economic Zone, China State Construction Int’L, Hutchmed China Ltd, S.F. Holding and more

By | Daily Briefs, Industrials

In today’s briefing:

  • A/H Premium Tracker (To 22 Nov 2024): AH Premia Rise Sharply; Hs Shellacked Vs As In Most Sectors
  • Takasago Thermal Engineering (1969): Start of Multi-Year Bull
  • Morning Views Asia: Adani Ports & Special Economic Zone, Bharti Airtel
  • China State Construction Intl (3311 HK): Steady as It Goes
  • Hutchmed China Ltd (13.HK/​​HCM.US) – The Fundamentals Remain Strong
  • Monthly Chinese Express Tracker | October Volume Firmed | ZTO Disappoints | SF HK IPO This Week


A/H Premium Tracker (To 22 Nov 2024): AH Premia Rise Sharply; Hs Shellacked Vs As In Most Sectors

By Travis Lundy

  • Huge volumes continue to be traded on the mainland share markets. SOUTHBOUND volumes dropped sharply but net buying continued strongly.
  • Stocks in HK and mainland markets fell heavily with HK’s main indices down 6-7% and China’s blue chip indices down 3.3-3.6% (CSI 500 – 4.8%).
  • Within H/A Pairs, after outperforming the HK/mainland spread for weeks, spreads got shellacked. Worst week in a long time (-3.7%), perhaps on the back of “disappointing” lack of stimulus measures.

Takasago Thermal Engineering (1969): Start of Multi-Year Bull

By Henry Soediarko

  • Takasago Thermal Engineering (1969 JP) is one of the top 10 players in Japan for energy efficiency players for industrial clients, especially semiconductors. 
  • Japan Metropolitan Govt bought stake in Rapidus, signifying a potential long-term business potential for Takasago Thermal Engineering. 
  • Valuation is no longer dirt cheap but still at a favorable level given its potential enlarged revenue growth. 

Morning Views Asia: Adani Ports & Special Economic Zone, Bharti Airtel

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.


China State Construction Intl (3311 HK): Steady as It Goes

By Osbert Tang, CFA

  • China State Construction Int’l (3311 HK)‘s backlog of HK$418.26bn is enough to cover 3x consensus forecast revenue of FY25, providing comfort for secured earnings outlook. 
  • The focus on public housing and municipal projects limits its exposure to the real estate market. Its consecutive earnings growth in last five years demonstrated its resilience.
  • With ROE of 15-16%, its P/B of 0.8x is cheap. The reduction in operating cash outflow supports higher payout ratio, and its dividend yield of 5.6-6.3% is healthy. 

Hutchmed China Ltd (13.HK/​​HCM.US) – The Fundamentals Remain Strong

By Xinyao (Criss) Wang

  • HUTCHMED will receive a US$20 million milestone payment from its partner Takeda. In our view, peak sales of fruquintinib is expected to reach about US$700 million in overseas markets.
  • After the Head of AstraZeneca China has been detained by authorities, AstraZeneca’s future commercialization would be affected, which will have a negative impact on savolitinib and HUTCHMED in short term.
  • Reasonable market value of HUTCHMED based on the three major products is about US$2.7-3.3 billion assuming P/S of 4. If market value is below US$2.5 billion, HUTCHMED is undervalued.

Monthly Chinese Express Tracker | October Volume Firmed | ZTO Disappoints | SF HK IPO This Week

By Daniel Hellberg

  • October volume firmed, but price data is mixed; X-border activity trended stronger
  • ZTO’s shares sagged after it reported weaker Q324 margins & lowered FY24 guidance
  • Market leader SF Holding’s long-awaited HK IPO should price & begin trading this week

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

Sign Up for Free

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

  • ✓ Unlimited Research Summaries
  • ✓ Personalised Alerts
  • ✓ Custom Watchlists
  • ✓ Company Data and News
  • ✓ Events & Webinars