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Smartkarma Daily Briefs

Apr 08
0

Daily Brief Energy/Materials: De Grey Mining, SGX Rubber Future TSR20, Crude Oil, Jindal Stainless, Iron Ore, Base Oil, Natural Gas, Reliance Industries, Medco Energi and more

By | Daily Briefs, Energy & Materials Sector

In today’s briefing:

  • Aussie Arbs: Trump Tariffs And MACs
  • Tariff Doesn’t List Tire But Throws US Auto Industry Into A Tizzy
  • Commodities Crash after Trump’s Tariff Nightmare
  • Jindal Stainless: Near-Term Headwinds Appear to Be Well Factored
  • [IO Technicals Weekly 2025/​14]: IO Volatility Set to Rise Amid Trade Tensions
  • Asia base oils demand outlook: Week of 7 April
  • [US Nat Gas Options Weekly 2025/14] Henry Hub Retreats Amid Tariff Shock and Warmer Weather Outlook
  • Reliance’s Campa Cola Comeback: Disrupting India’s Soft Drink Market
  • Medco Energi – Earnings Flash – FY 2024 Results – Lucror Analytics
  • [US Crude Oil Options Weekly 2025/14] WTI Dropped to Four-Year Low on Trump’s Tariffs

Aussie Arbs: Trump Tariffs And MACs

By David Blennerhassett

  • Travis Lundy succinctly summarised the Trump Tariffs in Trump Team’s Weird Tariff Math – Not Meant to Be Negotiated. Do read his note.
  • From an arb standpoint, most (all?) NBIOs will likely see a downward revision in pricing. Vote risk should also be reduced.
  • Such tariffs on predominantly domestic businesses should not trigger material adverse changes (MACs) Down Under. But it is still a worthwhile project to dig a little deeper.  

Tariff Doesn’t List Tire But Throws US Auto Industry Into A Tizzy

By Vinod Nedumudy

  • White House said on March 26 that the 25% tariff would be applied to imported passenger vehicles
  • Annexe II, which refers to tariff exclusions, mentions rubber
  • Stellantis halts its Canada, Mexico production

Commodities Crash after Trump’s Tariff Nightmare

By The Commodity Report

  • *YTD our absolute return strategy is up 7,5% Commodities Crash after Trump’s Tariff Nightmare In his mission to re-shore critical industries, raise revenue for the U.S. and narrow the deficit, Trump rolled out aggressive tariffs on virtually all countries (except Russia, Cuba and North Korea).
  • The new 10% tariff baseline is roughly triple the average US tariff rate before Trump reclaimed power in January and the calculation behind each tariff rates seems insane.
  • “We will charge them approximately half of what they are and have been charging us,” Trump said of the reciprocal tariffs.

Jindal Stainless: Near-Term Headwinds Appear to Be Well Factored

By Rahul Jain

  • Management has lowered its volume and margin guidance over the last few quarters even as they have gradually lowered their export share to less than 10%.
  • Despite a 40% drop from its high over the last few months JDSL trades at premium to its historic valuations. Significant investments in Indonesia to raise capacity is positive
  • A 20-25% increase in volumes (through Indonesia investments) over the next 2-3 years coupled with 20% ROIC and Debt <1X EBITDA implies that premium valuations could sustain.

[IO Technicals Weekly 2025/​14]: IO Volatility Set to Rise Amid Trade Tensions

By Pranay Yadav

  • SGX Iron Ore Futures fell $2.78/ton WoW, closing at $99.45/ton on April 4 after breaching key support levels and trading in a wider $5.95/ton range.
  • U.S.–China tariff escalation led to a MACD-confirmed downtrend and prices plunging below 100- and 200-day DMAs, signaling heightened bearish momentum.
  • Despite sharp price drops, implied volatility declined across all deltas reaching new lows for the year, with skew falling to +0.5%. 

Asia base oils demand outlook: Week of 7 April

By Iain Pocock

  • Asia’s base oils demand could fall in face of slumping crude oil prices and concern about slower-than-expected economic growth in the region.
  • Concern about weaker demand cuts fundamentals-related support that could cushion against impact of falling crude oil prices.
  • Concern about more muted demand and expected improvement in base oils supply in coming weeks would contrast with increasingly high base oils margins caused by lower crude oil prices.

[US Nat Gas Options Weekly 2025/14] Henry Hub Retreats Amid Tariff Shock and Warmer Weather Outlook

By Suhas Reddy

  • For the week ending 04/Apr, U.S. natural gas prices fell by 5.6% on the back of Trump’s tariffs and warmer weather forecasts.
  • U.S. natural gas futures continued to decline on 07/April (Mon), hovering around a seven-week low and extending last week’s 5.6% loss.
  • Henry Hub OI PCR fell to 0.97 on 04/Apr from 0.98 on 28/Mar. Call OI increased by 5.3% WoW, while put OI grew by 5%.

Reliance’s Campa Cola Comeback: Disrupting India’s Soft Drink Market

By Sudarshan Bhandari

  • Reliance Industries (RIL IN) has relaunched Campa Cola with a disruptive INR 10 price tag, targeting Bharat through regional branding, aggressive retail margins, and deep distribution.
  • Campa’s revival is shaking up India’s INR 50,000 crore soft drink market, challenging Pepsi and Coke with rapid share gains and frenzied rural demand.
  • This is not nostalgia, it’s Ambani’s Jio-style FMCG disruption. Expect more brand revivals, deeper pricing wars, and a new cola war driven from the grassroots.

Medco Energi – Earnings Flash – FY 2024 Results – Lucror Analytics

By Leonard Law, CFA

  • Medco Energi’s performance remained robust in FY 2024, with the company reporting stable earnings but improved cash flows.
  • FCF was positive and net debt declined, supported by the disposal of Medco’s Vietnamese assets.
  • Consolidated Net Debt/EBITDA was healthy at 2.3x.

[US Crude Oil Options Weekly 2025/14] WTI Dropped to Four-Year Low on Trump’s Tariffs

By Suhas Reddy

  • WTI futures fell 10.6% for the week ending 04/Apr, driven primarily by President Trump’s tariff announcement, which was broader and more severe than markets had anticipated.
  • The U.S. rig count fell by two to 590. The oil rig count grew by five to 489, while gas rigs dropped by seven to 96.
  • WTI OI PCR fell to 0.88 on 04/Apr compared to 0.91 on 28/Mar. Call OI increased by 10.8% WoW, while put OI grew by 7.2%.

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Apr 08
0

Daily Brief Industrials: Mitsubishi Corp, Mazagon Dock Shipbuilders , Hanjin KAL Corp, Hanwha Aerospace, Jiangsu Zenergy Battery Technologies and more

By | Daily Briefs, Industrials

In today’s briefing:

  • MitCorp (8058) BIG Buyback – Share Demand Will Help Weather The Storm
  • Mazagon Dock Shipbuilders (MAZDOCKS IN): OFS & Potential Global Index Inclusion
  • A Pair Trade Between Korean Air and Hanjin Kal
  • Key Takeaways from the Updated Filing on Hanwha Aero’s Rights Offering
  • Jiangsu Zenergy Battery Technologies IPO – PHIP Updates & Quick Thoughts on Peer Comp and Valuation

MitCorp (8058) BIG Buyback – Share Demand Will Help Weather The Storm

By Travis Lundy

Mazagon Dock Shipbuilders (MAZDOCKS IN): OFS & Potential Global Index Inclusion

By Brian Freitas

  • Mazagon Dock Shipbuilders (MAZDOCKS IN) has announced an Offer for Sale of 4.01% of the Government holding in the stock. That is INR 41bn (US$481m) at the last close.
  • The increase in float brings the stock very close to inclusion in a global index at the May rebalance. However, that is dependent on how the stock performs from here.
  • Inclusion in the index will bring around US$222m/ 2x ADV of passive inflows and could help support the stock.

A Pair Trade Between Korean Air and Hanjin Kal

By Douglas Kim

  • In this insight, we discuss a pair trade between Korean Air Lines (003490 KS) (go long) and Hanjin KAL Corp (180640 KS) (go short). 
  • In the past three months as well as 12 months, there has been a sharp increase in the gap of Korean Air Lines and Hanjin KAL Corp. 
  • It is uncertain how much longer Hoban Group will maintain its stake in Hanjin Kal. Hoban could reduce its stake in Hanjin Kal but increase its stake in LS Corp. 

Key Takeaways from the Updated Filing on Hanwha Aero’s Rights Offering

By Sanghyun Park

  • Hanwha shot down any merger talks between Hanwha Corp and Hanwha Energy, saying they’re just going to funnel Energy’s cash straight into Hanwha Aero via a third-party allotment.
  • These confirm no price manipulation for Hanwha Corp; Hanwha Energy will inject cash into Aero at market value, likely driving bullish short-term price action for both Hanwha Corp and Aero.
  • Despite tighter arb opportunities, doubts remain whether Hanwha Aero can raise the remaining KRW 1.6 trillion given a volatile market and the tight timeline.

Jiangsu Zenergy Battery Technologies IPO – PHIP Updates & Quick Thoughts on Peer Comp and Valuation

By Akshat Shah

  • Jiangsu Zenergy Battery Technologies (JSZENERGY CH)  is looking to raise US$130m in its Hong Kong IPO.
  • Zenergy is an EV and energy storage system battery manufacturer providing integrated battery solutions, encompassing battery cells, modules, packs and battery management systems dedicated to large-scale applications of electrochemical products.
  • In our previous note, we looked at the firm’s past performance. In this note, we talk about the IPO valuations.

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Apr 08
0

Daily Brief Financials: ESR Group , Samsung KODEX 200 ETF, Assura PLC, Thanachart Capital, Klarna Group, FWD Group Holdings, NIFTY Index, SBI RHEOS HIFUMI, Chesnara PLC and more

By | Daily Briefs, Financials

In today’s briefing:

  • HK Merger Arb: Opportunities Amidst the Market Selloff
  • Hong Kong Arbs: (Largely) Immune From Trump Tariffs
  • Talk of Deploying Korean Market Stabilization Fund Ramps Up Today
  • Assura in the Crosshairs
  • Quiddity Leaderboard SET50 Jun25: Four Changes Likely; Capping to Be Introduced
  • Klarna IPO Preview: The Dominant BNPL Player in Europe, Trump’s Tariffs Are a Headwind
  • FWD: An Ideal Acquisition Target for Korean Insurers?
  • NSE NIFTY50/ Vol Update / Trade Tensions Prevail: Reduce Vol Harvesting & Position for +ve Vega.
  • SBI RHEOS HIFUMI (165A JP): Coverage Initiation
  • Chesnara plc (CSN): Showing good operational progress

HK Merger Arb: Opportunities Amidst the Market Selloff

By Arun George

  • The gross spreads of large HK merger arb situations have increased due to the unfortunate fallout from Trump’s trade war. The HSI closed down 13.2%.
  • We assess the widening spreads of HK’s merger arb situations based on offer structure, preconditions, conditions, and other factors.
  • The deals, ranked in terms of increasing deal risk, are Tam Jai, Soundwill, Vesync, Goldlion, Canvest, ESR, OneConnect, HKBN, and ENN Energy.

Hong Kong Arbs: (Largely) Immune From Trump Tariffs

By David Blennerhassett

  • In Aussie Arbs: Trump Tariffs And MACs, I ran a ruler over the fifteen live deals Down Under, and how they may be affected by the Trump Tariffs.
  • This insight canvasses the ongoing Hong Kong arbs and wording surrounding material adverse changes (MACs). Hong Kong MACs are typically less onerous, and lack specificity, versus Aussie arbs.
  • Although the framework exists for an Offeror to enforce a MAC, I’m not aware of any evidence of this occurring under Hong Kong’s Takeovers Code.

Talk of Deploying Korean Market Stabilization Fund Ramps Up Today

By Sanghyun Park

  • This afternoon, local media has been buzzing about the potential deployment of the ₩10T Market Stabilization Fund, with signs pointing to its first inflow into the market in five years.
  • It’s likely to create a supply-demand imbalance, driving significant price action and requiring adjustments to our short-term outlook for the Korean market.
  • Most of the money is expected to flow into KOSPI 200 ETFs, so we should watch for a major passive flow impact during KOSPI 200 rebalancing in June and December.

Assura in the Crosshairs

By Jesus Rodriguez Aguilar

  • KKR’s 49.4p all-cash offer, cum-dividend and matching EPRA NTA, provides a 31.9% premium and ~12.3% gross spread, creating an attractive short-term arbitrage opportunity for investors.
  • PHP could increase its cash component by 1–2p without breaching investment-grade leverage, supported by strong rental income, refinancing flexibility, and post-merger synergies that enable a credible deleveraging path.
  • The estimated 2–2.5 month timeline from firm offer to cash settlement positions this deal within a standard UK M&A framework, offering risk arbitrageurs visibility and duration-limited exposure.

Quiddity Leaderboard SET50 Jun25: Four Changes Likely; Capping to Be Introduced

By Janaghan Jeyakumar, CFA

  • The SET50 index tracks the performance of the top 50 largest and most liquid names listed on the Stock Exchange of Thailand (SET).
  • In this insight, we take a look at the potential ADDs/DELs for SET 50 during the index rebal event in June 2025.
  • Currently, we expect four ADDs and four DELs. There are roughly two more months left in the reference period.

Klarna IPO Preview: The Dominant BNPL Player in Europe, Trump’s Tariffs Are a Headwind

By Andrei Zakharov

  • Klarna Group, a Swedish fintech company and BNPL provider, filed for an IPO and submitted a registration statement F-1 form with the SEC.
  • The company believes that AI and product diversification will boost profitability in the coming years coupled with aggressive cost-cutting and better underwriting process.
  • However, Klarna delayed its planned IPO due to extreme volatility and Trump’s tariffs, which are a headwind for BNPL players, including Affirm and Klarna.

FWD: An Ideal Acquisition Target for Korean Insurers?

By Alec Tseung

  • The saga of CK Hutchison’s Panama Canal Ports sale might also impact FWD due to tensions between China and the Li family.
  • Despite minimal mainland China presence, FWD faces exposure through its significant HK and Macau operations; HK and Macau contributed 40% – 50% of the group’s VNB and operating profits.
  • After FWD’s failed IPO attempts, PCG might consider a strategic sale for liquidity; FWD might offer a good strategic fit to Korean insurers looking to expand to Southeast Asia. 

NSE NIFTY50/ Vol Update / Trade Tensions Prevail: Reduce Vol Harvesting & Position for +ve Vega.

By Sankalp Singh

  • Nifty50 risk premia recovers from depressed levels due to Global trade tensions. Lags global equity Vol-spike. Monthly IVs: 11.0% -> 12.5%. Vol-Regime moves to “Low & Up” state.  
  • Term-Structure swings into Backwardation in the Front-End, but curve finally settled back in Contango by week’s end. Skew/ Smile characteristics held steady with slight compression in Strangle markups.
  • Tactical Implications: (1) Continue reduced exposure to Risk-premia harvesting, (2) Long Vega structures recommended in “Low & Up” vol-state. 

SBI RHEOS HIFUMI (165A JP): Coverage Initiation

By Shared Research

  • In FY03/24, AUM was JPY1.4tn (+19.6% YoY), operating revenue JPY10.3bn (+6.7% YoY), operating profit JPY1.8bn (+10.6% YoY), recurring profit JPY1.8bn (+10.6% YoY), and net income attributable to owners of the parent JPY1.3bn (+20.8% YoY).
  • The company continued to expand its distribution partner network and product lineup.
  • The Japanese equity market remained strong, and the rise in NAV per share drove up AUM to JPY1.4tn (+19.6% YoY).

Chesnara plc (CSN): Showing good operational progress

By Hardman & Co

  • Chesnara announced its 2024 results, which showed positive progress compared with 2023.
  • The main features were positive market returns, offset by some mixed operational experience.
  • Economic Value profit of £69.1m represented a 17% increase on the £59.1m in 2023.

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Apr 08
0

Daily Brief Health Care: Jiangsu Hengrui Pharmaceuticals, ABLBio, American Shared Hospital Servi, Reviva Pharmaceuticals Holdi and more

By | Daily Briefs, Healthcare

In today’s briefing:

  • Hengrui (恒瑞医药) A/H Listing: An Updated Comparison with Hansoh
  • ABLBio (298380 KS): Continued License Out Deals and Milestone Payment Realization to Feed Pipeline
  • AMS: Growing O&O Segment Contributed to 33% Revenue Growth in 2024 Two New O&O Projects Moving Forward
  • RVPH: M&A Deals Highlight Brilaroxazine Value

Hengrui (恒瑞医药) A/H Listing: An Updated Comparison with Hansoh

By Ke Yan, CFA, FRM

  • Jiangsu Hengrui Medicine (600276 CH) a China-based pharmaceutical company, aims to raise around US$2bn in its H-share listing.
  • Given its similarity to Hong Kong-listed Hansoh Pharma, had done a comparison between the two.
  • In this note, we looked at the latest results releases from both companies and highlighted granular differences. It is also interesting to compare the relative valuation from a historical perspective.

ABLBio (298380 KS): Continued License Out Deals and Milestone Payment Realization to Feed Pipeline

By Tina Banerjee

  • ABLBio (298380 KS) announced licensing agreement with GlaxoSmithKline PLC (GSK LN) to develop novel treatments for neurodegenerative diseases by utilizing ABL Bio’s blood-brain barrier (BBB) shuttle platform, Grabody-B.
  • ABL Bio is eligible to receive up to £2.075B in research, development, regulatory, and commercialization milestone payments across multiple potential programs. The company will receive tiered royalties on net sales.
  • Last October, ABL Bio completed the manufacturing technology transfer for ABL301, a bispecific antibody containing Grabody-B to treat Parkinson’s disease, to Sanofi and unlocked a milestone payment of $5M.

AMS: Growing O&O Segment Contributed to 33% Revenue Growth in 2024 Two New O&O Projects Moving Forward

By Zacks Small Cap Research

  • With recent approval from state regulators to move forward on planned projects in Bristol, RI and Johnston, RI, the company continues to grow the number of facilities operated under its O&O model, a core objective.
  • In 1Q25, AMS acquired property in Bristol, RI where it expects to construct a linear accelerator facility that would likely begin treating patients in about 18-24 months & AMS anticipates significant synergies within its expanding Rhode Island footprint.
  • We expect these and other potential new projects will likely leverage an ‘asset-light’ approach that includes partnerships to reduce AMS’s upfront capital investment & enable AMS to retain a majority interest in the centers.

RVPH: M&A Deals Highlight Brilaroxazine Value

By Zacks Small Cap Research

  • Reviva is a research and development pharmaceutical company with two portfolio compounds targeting nine indications.
  • The candidates address multiple related mental disorders, rare diseases & other categories of un met need.
  • Reviva’s lead indication in schizophrenia with brilaroxazine (RP5063) completed its 1st Phase III trial & is set to begin its 2nd in 2025.

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Apr 08
0

Daily Brief Consumer: Suzuki Motor, Shanghai Shenzhen CSI 300 Index, Chagee Holdings, GoTo Gojek Tokopedia Tbk PT, Tata Motors ADR, Dixon Technologies India Ltd, Haad Thip Public, DigiPlus Interactive and more

By | Consumer, Daily Briefs

In today’s briefing:

  • Suzuki Motor Placement – Not the Best Time for a US$1.15bn Deal. It Will Be a Long Week.
  • Suzuki Motor (7269 JP): A US$1.1 Billion Secondary Offering
  • CSI 300 Index Outlook After Trump’s Threat of 50% Tariff on China
  • Chagee (霸王茶姬) Pre-IPO: Very Few Exact Competitors – A Viewpoint on the Ground
  • Suzuki Motor (7269 JP) Placement: Limited Index Buying & Weak Markets Could Pressure Stock
  • GoTo Gojek Tokopedia (GOTO IJ) – Entering New Territory
  • Lucror Analytics – Morning Views Asia
  • #1 Leadership Bytes(07-Apr-25)
  • Haad Thip Meeting (HTC TB)
  • DigiPlus Interactive (PLUS PM): Gleanings From the Annual Report FY24 and Management Meeting

Suzuki Motor Placement – Not the Best Time for a US$1.15bn Deal. It Will Be a Long Week.

By Sumeet Singh

  • Tokio Marine Holdings (8766 JP) and Sompo Holdings (8630 JP) aim to raise around US1.15bn (including over-allotment) via selling around 5% of Suzuki Motor (7269 JP).
  • While Suzuki doesn’t have much direct exposure to the US markets, its shares have still corrected in line with other auto players.
  • In this note, we will talk about the deal dynamics and run the deal through our ECM framework.

Suzuki Motor (7269 JP): A US$1.1 Billion Secondary Offering

By Arun George

  • Suzuki Motor (7269 JP) has announced a secondary offering of up to 95.7 million shares (110.1 million including overallotment), worth around US$1.1 billion (US$1.3 billion including overallotment).
  • Suzuki’s goal with the secondary offering is (i) to reduce cross-shareholdings and (ii) to expand and diversify the shareholder base, which should further enhance liquidity.
  • Looking at recent large Japanese placements is instructive for understanding the potential offer price. The pricing date will fall between 21 and 23 April (likely 21 April).

CSI 300 Index Outlook After Trump’s Threat of 50% Tariff on China

By Nico Rosti

  • The Shanghai Shenzhen CSI 300 Index (SHSZ300 INDEX EQUITY) was less impacted than other indices by the global sell-off: on Monday it was down only -10% from the recent top.
  • On Monday Donald Trump posted that if China does not withdraw immediately its +34% tariffs increase, the United States will impose ADDITIONAL Tariffs on China of +50%, effective April 9th!
  • Although the CSI 300 Index is more insulated than other indices from global market volatility, it is not completely immune and remains vulnerable to the impact of US’s tariff threats.

Chagee (霸王茶姬) Pre-IPO: Very Few Exact Competitors – A Viewpoint on the Ground

By Ming Lu

  • Chagee is the No. 6 largest teahouse chain in China according to store number.
  • Very few teahouses have a per customer transaction higher than Chagee.
  • We believe Chagee has advantages in the high price market.

Suzuki Motor (7269 JP) Placement: Limited Index Buying & Weak Markets Could Pressure Stock

By Brian Freitas

  • Tokio Marine & Nichido Fire Insurance and Sompo Japan Insurance are looking to offload their entire stakes in Suzuki Motor (7269 JP) by way of a secondary offering.
  • With the size of the secondary offering less than 5% of the number of shares, there could be no index buying in the short-term and that will pressure the stock.
  • If the overallotment option is exercised and the seller of the shares is currently considered as non-float, there could be small passive buying in the short-term.

GoTo Gojek Tokopedia (GOTO IJ) – Entering New Territory

By Angus Mackintosh

  • GoTo Gojek Tokopedia‘s 4Q2024 is likely just the start of the positive impact of its barbell strategy of enticing new users through affordable products before monetising through premium offerings.
  • The rapid turnaround of the fintech business as it booked its first quarterly positive adjusted EBITDA was a key standout and was front and centre of management results comments.
  • GOTO remains upbeat in its prospects for 2025, providing its first guidance for adjusted EBITDA, and highlighting the positive contribution from fintech and mid-teens growth for ODS. 

Lucror Analytics – Morning Views Asia

By Trung Nguyen

  • In today’s Morning Views publication we comment on developments of the following high yield issuers: Tata Motors
  • In the US, the March nonfarm payrolls unexpectedly increased to 228 k (140 k e / 117 k revised p), albeit the February figure was revised downwards to 117 k (from 151 k). The unemployment rate edged up to 4.2% (4.1% e / 4.1% p).
  • Average hourly earnings came in at 0.3% m-o-m (0.3% e / 0.2% revised p) and 3.8% y-o-y (4.0% e / 4.0% p).

#1 Leadership Bytes(07-Apr-25)

By Sudarshan Bhandari

Haad Thip Meeting (HTC TB)

By Michael Fritzell

  • Last week, I had the great pleasure of meeting with Chief Financial Officer Amrit Shrestha and several of his colleagues at Coca-Cola bottler Haad Thip (HTC TB – US$193 million).
  • The company is the exclusive producer and distributor of Coca-Cola products across Thailand’s 14 Southernmost provinces.
  • The stock has performed beautifully over time, though sideways since 2021. It trades at a 9.6x P/E ratio and a 6.4% dividend yield.

DigiPlus Interactive (PLUS PM): Gleanings From the Annual Report FY24 and Management Meeting

By Sameer Taneja

  • PAGCOR forecasts a strong FY25 industry GGR of 450 bn pesos (20% YoY), of which the share of bingo/casino games is expected to be 50% (~225 bn pesos).
  • If DigiPlus Interactive (PLUS PM)  maintains a share of 45% (vs last year’s 47%), revenue will increase by 33% to 100 bn pesos. 
  • With the recent correction due to the current geopolitical situation, the stock trades at 12.2x/9.5x FY24/FY25e, 35% ROCE, with multiple catalysts, e.g, a great Q1FY25 and expansion in Brazil.

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Apr 08
0

Most Read: ESR Group , De Grey Mining, Suzuki Motor, Treasury Wine Estates, Mitsubishi Corp, Mazagon Dock Shipbuilders , Shanghai Shenzhen CSI 300 Index, Wonik Ips and more

By | Daily Briefs, Most Read

In today’s briefing:

  • HK Merger Arb: Opportunities Amidst the Market Selloff
  • Aussie Arbs: Trump Tariffs And MACs
  • Suzuki Motor Placement – Not the Best Time for a US$1.15bn Deal. It Will Be a Long Week.
  • Treasury Wine Estates (TWE AU): Passive Selling Adds to Tariff Woes
  • Suzuki Motor (7269 JP): A US$1.1 Billion Secondary Offering
  • MitCorp (8058) BIG Buyback – Share Demand Will Help Weather The Storm
  • US vs EU: Worse to Come
  • Mazagon Dock Shipbuilders (MAZDOCKS IN): OFS & Potential Global Index Inclusion
  • CSI 300 Index Outlook After Trump’s Threat of 50% Tariff on China
  • Watch This Friday’s TIGER Top 10 Semicon Rebalance

HK Merger Arb: Opportunities Amidst the Market Selloff

By Arun George

  • The gross spreads of large HK merger arb situations have increased due to the unfortunate fallout from Trump’s trade war. The HSI closed down 13.2%.
  • We assess the widening spreads of HK’s merger arb situations based on offer structure, preconditions, conditions, and other factors.
  • The deals, ranked in terms of increasing deal risk, are Tam Jai, Soundwill, Vesync, Goldlion, Canvest, ESR, OneConnect, HKBN, and ENN Energy.

Aussie Arbs: Trump Tariffs And MACs

By David Blennerhassett

  • Travis Lundy succinctly summarised the Trump Tariffs in Trump Team’s Weird Tariff Math – Not Meant to Be Negotiated. Do read his note.
  • From an arb standpoint, most (all?) NBIOs will likely see a downward revision in pricing. Vote risk should also be reduced.
  • Such tariffs on predominantly domestic businesses should not trigger material adverse changes (MACs) Down Under. But it is still a worthwhile project to dig a little deeper.  

Suzuki Motor Placement – Not the Best Time for a US$1.15bn Deal. It Will Be a Long Week.

By Sumeet Singh

  • Tokio Marine Holdings (8766 JP) and Sompo Holdings (8630 JP) aim to raise around US1.15bn (including over-allotment) via selling around 5% of Suzuki Motor (7269 JP).
  • While Suzuki doesn’t have much direct exposure to the US markets, its shares have still corrected in line with other auto players.
  • In this note, we will talk about the deal dynamics and run the deal through our ECM framework.

Treasury Wine Estates (TWE AU): Passive Selling Adds to Tariff Woes

By Brian Freitas

  • Given its portfolio mix, Treasury Wine Estates (TWE AU) does not expect a material impact on its business from the blanket 10% tariff on all goods imported from Australia/New Zealand.
  • However, there is a high probability that Treasury Wine Estates (TWE AU) will be deleted from a global index in May and that will lead to large selling from passives.
  • There has been an increase in short interest and an increase in other positioning. Trading will be volatile but there could be a downward bias over the next few weeks.

Suzuki Motor (7269 JP): A US$1.1 Billion Secondary Offering

By Arun George

  • Suzuki Motor (7269 JP) has announced a secondary offering of up to 95.7 million shares (110.1 million including overallotment), worth around US$1.1 billion (US$1.3 billion including overallotment).
  • Suzuki’s goal with the secondary offering is (i) to reduce cross-shareholdings and (ii) to expand and diversify the shareholder base, which should further enhance liquidity.
  • Looking at recent large Japanese placements is instructive for understanding the potential offer price. The pricing date will fall between 21 and 23 April (likely 21 April).

MitCorp (8058) BIG Buyback – Share Demand Will Help Weather The Storm

By Travis Lundy

US vs EU: Worse to Come

By Alastair Newton

  • Policymakers and investors are not fully recognizing the threat posed by the US in response to ‘Liberation Day’.
  • The threat level has increased as ‘transactional Trump’ is replaced by a new president.
  • The new president aims to return the US to a perceived golden era in his mission to ‘make America great again’.

Mazagon Dock Shipbuilders (MAZDOCKS IN): OFS & Potential Global Index Inclusion

By Brian Freitas

  • Mazagon Dock Shipbuilders (MAZDOCKS IN) has announced an Offer for Sale of 4.01% of the Government holding in the stock. That is INR 41bn (US$481m) at the last close.
  • The increase in float brings the stock very close to inclusion in a global index at the May rebalance. However, that is dependent on how the stock performs from here.
  • Inclusion in the index will bring around US$222m/ 2x ADV of passive inflows and could help support the stock.

CSI 300 Index Outlook After Trump’s Threat of 50% Tariff on China

By Nico Rosti

  • The Shanghai Shenzhen CSI 300 Index (SHSZ300 INDEX EQUITY) was less impacted than other indices by the global sell-off: on Monday it was down only -10% from the recent top.
  • On Monday Donald Trump posted that if China does not withdraw immediately its +34% tariffs increase, the United States will impose ADDITIONAL Tariffs on China of +50%, effective April 9th!
  • Although the CSI 300 Index is more insulated than other indices from global market volatility, it is not completely immune and remains vulnerable to the impact of US’s tariff threats.

Watch This Friday’s TIGER Top 10 Semicon Rebalance

By Sanghyun Park

  • After the March avg daily market cap screen, Wonik IPS is swapped for Jusung Engineering. Big passive impact expected—Jusung gets 1x ADTV buy flow, Wonik faces 2.6x ADTV sell.
  • Watch for passive flow timing—last rebalance (Oct 11), ISC Co Ltd got kicked, Wonik IPS called up. TIGER split Wonik’s rebalance over two trading days to minimize price impact.
  • The long/short yield was 2.89% on Oct 11, 3.96% over two days. With bigger passive flow impact, TIGER may split the rebalance—enter near Thursday close, exit by Monday afternoon.

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Apr 07
0

Daily Brief Quantitative Analysis: A-H Premium Weekly (Apr 4th): Joinn Lab and more

By | Daily Briefs, Quantitative Analysis

In today’s briefing:

  • A-H Premium Weekly (Apr 4th): Joinn Lab, Beigene, Qinhuangdao Port, Sichuan Expressway
  • Thailand Short Interest Weekly (Apr 4th): Airports of Thailand, PTT E&P, Bangkok Bank, Kasikornbank
  • KRX Foreign Holding Weekly (Apr 4th): SK Hynix, Hyundai Motor, Samsung Electronics
  • TWSE Foreign Holding Weekly (Apr 4th): TSMC, Mediatek
  • TWSE Short Interest Weekly (Apr 4th): Asustek Computer, Alchip Technologies, Yang Ming Marine

A-H Premium Weekly (Apr 4th): Joinn Lab, Beigene, Qinhuangdao Port, Sichuan Expressway

By Ke Yan, CFA, FRM

  • We analyse the changes of A-H premium on 150 stocks over the last week. The average A-H premium was 86.7% as of April 4th. 
  • The average A-H premium changed by 1.6ppt week-on-week, led by consumer staples.
  • We highlight weekly changes in A-H premium for Joinn Lab, Beigene, Qinhuangdao Port, Sichuan Expressway.

Thailand Short Interest Weekly (Apr 4th): Airports of Thailand, PTT E&P, Bangkok Bank, Kasikornbank

By Ke Yan, CFA, FRM

  • We analyzed the changes in short interest of Stock Exchange of Thailand as of Apr 4th.We estimate that they had an aggregated short interest worth USD1.8bn.
  • We tabulate league table for top short by value and short as multiple of ADT, as well as weekly increases & decreases in short value, short as multiple of ADT.
  • We highlight short interest changes in Airports of Thailand, PTT E&P, Bangkok Bank, Kasikornbank, CP ALL, CP AXTRA NVDR, Thai Oil, Supalai, Siri Prime Office Property Fd.

KRX Foreign Holding Weekly (Apr 4th): SK Hynix, Hyundai Motor, Samsung Electronics

By Ke Yan, CFA, FRM

  • We analyzed the changes in foreign holdings of KRX stocks as of Apr 4th which has an aggregated holding worth USD465.8bn.
  • We estimate that foreign flows to be outflows of USD2,455mln. We tabulate the league table for top changes by value for 1W/4W/1Y and top stocks held by foreign institutions.
  • We highlight changes of foreign holdings in SK Hynix, Hyundai Motor, Samsung Electronics.

TWSE Foreign Holding Weekly (Apr 4th): TSMC, Mediatek

By Ke Yan, CFA, FRM

  • We analyzed the changes in foreign holdings of TWSE Stocks as of Apr 4th which has an aggregated holding worth USD 888 bn. 
  • We estimate that foreign flows to be outflows of USD1,173mln. We tabulate the league table for top changes by value for 1W/4W/1Y and top stocks held by foreign institutions.
  • We highlight changes of foreign holdings in TSMC (2330 TT), Mediatek (2454 TT).

TWSE Short Interest Weekly (Apr 4th): Asustek Computer, Alchip Technologies, Yang Ming Marine

By Ke Yan, CFA, FRM

  • We analyzed the changes in short interest of TWSE Stocks as of Apr 4th which has an aggregated short of USD 20.5bn. 
  • We tabulate league table for top short by value and short as multiple of ADT.
  • We highlight short interest changes in Asustek Computer, Alchip Technologies, Yang Ming Marine, Unimicron Technology, King Yuan Electronics, Hiwin Technologies.

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Apr 07
0

Daily Brief ESG: President Yoon’s Impeachment: Impact on Korean Capital Markets and more

By | Daily Briefs, ESG

In today’s briefing:

  • President Yoon’s Impeachment: Impact on Korean Capital Markets
  • Political Problems Are Preventing a Solution to the Problem of Declining Birthrates

President Yoon’s Impeachment: Impact on Korean Capital Markets

By SUSTINVEST

  • On April 4, 2025 (KST), South Korea’s Constitutional Court formally removed former President Yoon Suk Yeol from office in accordance with the constitutional order.
  • This decision is expected to significantly reduce political uncertainty. However, external factors such as the U.S. government’s reciprocal tariff policies will continue to have substantial impact on Korean markets.
  • June’s presidential election favors government change. Global investors should watch the Democratic Party’s capital market reform proposals.

Political Problems Are Preventing a Solution to the Problem of Declining Birthrates

By Aki Matsumoto

  • Eliminating income limits on child allowances seems to be the right policy because the wealthier families have more children. However, it lacks viewpoints toward the growing number of unmarried people.
  • It seems effective to solve the problem of the growing income disparity and the child-rearing/housework being disproportionately placed on women, and taking appropriate measures for those who desire diverse lifestyles.
  • Policies don’t reach the ever-increasing number of singles. Rather than solutions to declining birthrate, priority is given to policies that distribute money to those who are more certain to vote.

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Apr 07
0

Daily Brief ECM: Chagee Holdings (CHA US) IPO: The Bear Case and more

By | Daily Briefs, ECM

In today’s briefing:

  • Chagee Holdings (CHA US) IPO: The Bear Case
  • Jiangsu Zenergy Battery Tech IPO: Growth Fueled By Volume
  • ECM Weekly (7 Apr 2025) – CATL, Maynilad, Chagee, Lotte Logistics, Sigenergy, Duality, Wuxi XDC

Chagee Holdings (CHA US) IPO: The Bear Case

By Arun George

  • Chagee Holdings (CHA US), a leading premium tea drinks brand, is seeking to raise US$400-500 million through a Nasdaq IPO.
  • In Chagee Holdings (CHA US) 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 unsustainable growth rates, pressure on KPIs, signs of margin pressure, increasing S&M expenses and weakening forward growth indicators.

Jiangsu Zenergy Battery Tech IPO: Growth Fueled By Volume

By Shifara Samsudeen, ACMA, CGMA

  • Jiangsu Zenergy Battery Technologies (JSZENERGY CH)  (JZBT) is a lithium-ion battery manufacturer in China who is focused on developing a diverse portfolio of market-driven and technology-fueled battery products.
  • The company has filed for an IPO on the HKEx and plans to raise proceeds of around US$130m through the issue of 121m shares.
  • The company’s earnings have seen strong growth over the years driven by its LFP battery products and fall in lithium carbonate prices have helped turn around profitability.

ECM Weekly (7 Apr 2025) – CATL, Maynilad, Chagee, Lotte Logistics, Sigenergy, Duality, Wuxi XDC

By Sumeet Singh

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Apr 07
0

Daily Brief Thematic (Sector/Industry): Ohayo Japan | US Stocks Cratered and more

By | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

  • Ohayo Japan | US Stocks Cratered
  • Japan Morning Connection: Trump Panic Tactic Working Hook, Line, and Sinker

Ohayo Japan | US Stocks Cratered

By Mark Chadwick

  • The S&P 500 sank nearly 6%, capping its worst week since 2020
  • About 90% of TSE Prime Market stocks declined on Friday, with semiconductor and tech stocks, particularly hard hit.
  • Nintendo postponed U.S. preorders for its Switch 2 gaming device, originally scheduled for April 9, 2025, to assess potential impacts of Trump’s new tariffs.

Japan Morning Connection: Trump Panic Tactic Working Hook, Line, and Sinker

By Andrew Jackson

  • Big drops for futures and commodity markets to start the week, so expect heavy selling across the board to start.
  • Vietnam signalling willingness to cut US tariffs sending related footwear/clothing names who manufacture in country sharply higher.
  • Nintendo cancelling its US Switch2 pre-sales sending ADR’s lower only to snap back as market remains bullish on new console.

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