Smartkarma Daily Briefs

Bloomberg reported that KKR has made a non-binding, preliminary approach to taking ASM Pacific Technology (522 HK) private. ASMPT has been the subject of takeover rumours in the past.
The trading patterns of the substantial shareholders suggest a willingness to exit. However, past privatisation rumours suggest issues with the offeror matching key shareholders’ price expectations.
A binding proposal is unlikely as the timing would be viewed as opportunistic, with the recent market rally eroding a potential takeover premium and ASMPT’s premium multiple compared to peers.

GA Pack (468 HK): Crunch Time

Unsurprisingly, the Greatview Aseptic Packaging (468 HK) Board has recommended shareholders vote against the appointment of Shandong Xinjufeng Technology Packaging (301296 CH)’s two director nominees.
The EGM vote on 18 October is too close to call and depends on Shandong Xinjufeng and management’s ability to rally disengaged minorities to their respective causes.
Irrespective of the EGM vote results, Shandong Xinjufeng will be keen to launch its offer to ward off the threat of a possible competing offer from management.

ASMPT (ASM Pacific). 522 HK. M&A. Takeover Target Talk. Déjà Vu ?

By Neil Campling

The second PE rumoured interest in ASMPT in 18 months, with KKR circling.
Semiconductor M&A has surged in 2024 YTD with a 33% increase in deal activity compared to 2023.
ASM’s leadership in TCB, potential growth within HBM, expansion at TSM and enabling the Nvidia Blackwell platform are all reasons for M&A interest.

China Resources Beverage Pre-IPO – PHIP Updates – Revenue Slowing, Margins Growing

China Resources Beverage (CRB HK) is looking to raise up to US$1bn in its upcoming Hong Kong IPO.
China Resources Beverage manufactures and sells packaged drinking water and RTD soft beverages in China.
In our earlier notes, we talked about the company’s past performance and provided our thoughts on valuations. In this note, we will look at updates from its most recent filings.

CMCDI (133 HK)’s Proposals Light On Detail

By David Blennerhassett

Argyle Street Management (ASM), a 9.01% shareholder in China Merchants China Direct Investments (133 HK), has been (very) publicly angling for change in this closed-end fund. Here is their website.
The core issue is CMCDI’s P/NAV ratio of 0.41x compared to closed-end fund peers of 0.8x-0.9x.
CMCDI has finally responded to ASM’s overtures with the prospect of a share buyback and a special dividend. But details are thin on the ground.

ASMPT (522 HK): KKR’s Proposal Is A Non-Starter

By David Blennerhassett

Reportedly – Bloomberg – KKR has made a non-binding proposal for ASM Pacific Technology (522 HK), the world’s leading back-end semiconductor production equipment supplier.
ASMPT’s largest shareholder, ASM International Nv (ASM NA), with 25%, has been the focus of activists for some time to sell its stake.
This bid has all the hallmarks of the approach (also cited by Bloomberg) by PAG last year. Which came to nought. From a regulatory standpoint, I can’t see this happening.

Quiddity Leaderboard HSTECH Dec 24: Midea Group Question Mark and Final Rankings for Exp ADDs/DELs

By Janaghan Jeyakumar, CFA

The HSTECH Index tracks the performance of the top 30 technology companies listed in Hong Kong that have high business exposure to certain technology themes.
In this insight, we take a look at the final rankings of potential ADDs and potential DELs for the December 2024 index rebal event.
We do not expect any changes for the HSTECH index in December 2024. However, we expect there to be capping flows of US$1,079mn one-way.

Quiddity Leaderboard HSCEI Dec 24: Two Changes Likely; US$474mn Capping Flows One-Way

By Janaghan Jeyakumar, CFA

The HSCEI serves as a benchmark to reflect the overall performance of the top 50 “Mainland China” securities listed in Hong Kong.
In this insight, we take a look at the final rankings for the HSCEI potential ADDs and potential DELs for the index rebal event in December 2024.
We see two ADDs/DELs – the same names we had in our last insight. At present, we expect US$474mn capping flows one-way but this can change by early-December 2024.

China Resources Beverage Pre-IPO – Updated Thoughts on Valuation

By Shifara Samsudeen, ACMA, CGMA

China Resources Beverage (CRB HK) is looking to raise up to US$1bn in its upcoming Hong Kong IPO.
China Resources Beverage manufactures and sells packaged drinking water and RTD soft beverages in China.
In our earlier notes, we talked about the company’s past performance and provided our initial thoughts on valuations. In this note, we will relook at valuations post its PHIP updates.

Pre-IPO China Resources Beverage (PHIP Updates) – Some Points Worth the Attention

By Xinyao (Criss) Wang

Nongfu Spring is able to take a price war to grab market share,but the strategy of CR Beverage forced to cut prices may not work,making its profit margin further decline.
CR Beverage’s business model is “single business + scale expansion”, worse than “multi-category structure + new product incubation”.Future performance growth may inevitably slow down if without the second growth curve.
Whether in terms of product/revenue structure, profitability, or sustainability of growth momentum, CR Beverage isn’t as good as Nongfu Spring. Valuation of CR Beverage should be lower than Nongfu Spring.

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Oct 03

Daily Brief India: Dr Lal PathLabs Ltd, Nickel Industries and more

By Smartkarma Daily Briefs | Daily Briefs, India

In today’s briefing:

Dr Lal PathLabs Ltd (DLPL IN): Poised for Next Level of Growth Amid Easing Price Competition
Morning Views Asia: Nickel Industries , Tata Motors ADR

Dr Lal PathLabs Ltd (DLPL IN): Poised for Next Level of Growth Amid Easing Price Competition

By Tina Banerjee

Dr Lal PathLabs Ltd (DLPL IN) has maintained its 10% revenue growth target for the current financial year, mainly driven by 6–7% growth in patient volume.
The operating environment is becoming conducive. Competitive intensity in terms of predatory pricing, promotional offer, and cash burning to acquire customers, have come to an end.
As of Q1FY25, DLPL has net cash position of INR10B. The company is looking for small or mid-sized acquisitions in South and West India and expanding in small towns.

Morning Views Asia: Nickel Industries , Tata Motors ADR

By Leonard Law, CFA

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

Nickel Industries
Tata Motors ADR

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Oct 03

Daily Brief Japan: Intermestic, Fast Retailing, TSE Tokyo Price Index TOPIX and more

By Smartkarma Daily Briefs | Daily Briefs, Japan

In today’s briefing:

Intermestic IPO: Forecasts and Valuation
Fast Retailing(9983) | Weaving a Global Empire; FY8/25 Outlook
Slightly More than the Annual IPOs, 119 Companies Newly Applied for Transitional Measures This Year

Intermestic IPO: Forecasts and Valuation

The Japanese eyewear company Intermestic (262A JP) has set the terms for its Tokyo IPO and plans to raise US$121m through the IPO.
Our analysis shows that the company’s IPO is valued attractively compared to JINS Inc (3046 JP) , who offers eyewear at a similar price range to Intermestic.
Japanese eyewear makers who have aggressively expanded into overseas markets seems to be suffering from falling sales and margins, particularly in China due to economic slowdown.

Fast Retailing(9983) | Weaving a Global Empire; FY8/25 Outlook

By Mark Chadwick

Fast Retailing, through its flagship Uniqlo, is redefining retail by focusing on high-quality, functional apparel, surpassing global peers in operating profit margins.
The company’s “scrap & build” strategy revitalizes underperforming stores in China, while expanding internationally, with a strong growth trajectory across North America and Europe.
With a revised fair value of 52,500 yen, we forecast significant sales growth, driven by favorable seasonal trends, global expansion and recovering consumer sentiment in China.

Slightly More than the Annual IPOs, 119 Companies Newly Applied for Transitional Measures This Year

By Aki Matsumoto

Of the companies that have been removed from the list of companies subject to transitional measures, only about half have been able to meet the criteria for maintaining their listing.
It’s not easy for companies applying transitional measures to comply with the criteria for maintaining listing, so it’s realistic to move to a market with looser criteria for maintaining listing.
Besides problems with listing screening process, many managers consider IPO to be the goal and have little will to grow the company after listing, leading to slump in corporate value.

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Oct 03

Most Read: Alibaba Group Holding , Longfor Properties, Korea Zinc, ASM Pacific Technology, Greatview Aseptic Packaging, K Bank, China Resources Beverage and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

HSTECH Index Rebalance Preview: $800m Round-Trip Trade
HSCEI Index Rebalance Preview: High & Low Probability Changes
Korea Zinc’s Buyback Tender Offer at ₩830,000: Market Vibe Still Leans Towards MBK
Court Dismisses Injunction; Korea Zinc to Announce Buyback Tender Offer Soon
ASMPT (522 HK): Don’t Bet on a KKR Privatisation
GA Pack (468 HK): Crunch Time
Korea Zinc: Plans to Buy Back and Cancel Shares Worth 2.7 Trillion Won + Team Up with Bain Capital
ASMPT (ASM Pacific). 522 HK. M&A. Takeover Target Talk. Déjà Vu ?
K Bank IPO – Should Price Below Its Range
China Resources Beverage Pre-IPO – PHIP Updates – Revenue Slowing, Margins Growing

HSTECH Index Rebalance Preview: $800m Round-Trip Trade

The review period for the December rebalance of the Hang Seng TECH Index (HSTECH INDEX) ended on 30 September.
We do not forecast any constituent changes for the index. Capping changes will lead to a one-way turnover of 2.15% and a round-trip trade of HK$6.1bn (US$785m).
If any stocks have outsized moves on expectations of being added to or deleted from the index, there could be opportunities to enter trades.

HSCEI Index Rebalance Preview: High & Low Probability Changes

PICC Property & Casualty H (2328 HK) inclusion and Longfor Properties (960 HK) deletion are high probability changes for the Hang Seng China Enterprises Index (HSCEI INDEX) in December.
There is a lower probability of China Resources Power (836 HK) being added and of Sino Biopharmaceutical (1177 HK) being deleted at the rebalance.
There has been big short covering in PICC Property & Casualty (2328 HK) over the last couple of months while shorts would have covered Longfor Properties (960 HK) recently.

Korea Zinc’s Buyback Tender Offer at ₩830,000: Market Vibe Still Leans Towards MBK

Korea Zinc is launching a 3.21M share buyback (15.5% of total shares) via a KRW 2.66T tender offer at ₩830,000 per share, with Bain Capital involved.
If tendered shares fall short, Korea Zinc and Bain Capital will buy all. If over the target, they’ll buy pro rata. Below 1,215,283 shares, they will opt out.
Should we dive into Korea Zinc’s risky buyback or choose safer, lower-priced MBK? The market vibe favors MBK, reflected in Korea Zinc’s closing price today.

Court Dismisses Injunction; Korea Zinc to Announce Buyback Tender Offer Soon

The court rejected MBK and Young Poong’s injunction to block Korea Zinc’s buyback, allowing Choi’s side to continue using buybacks to defend control.
Korea Zinc plans an emergency board meeting to launch a tender offer, using internal funds, to buy back shares at 800K-850K KRW starting around October 7.
If Choi converts discretionary reserves into distributable profits, Korea Zinc could unlock 2-3 trillion KRW for the buyback, but uncertainty keeps the stock around 700K KRW.

ASMPT (522 HK): Don’t Bet on a KKR Privatisation

Bloomberg reported that KKR has made a non-binding, preliminary approach to taking ASM Pacific Technology (522 HK) private. ASMPT has been the subject of takeover rumours in the past.
The trading patterns of the substantial shareholders suggest a willingness to exit. However, past privatisation rumours suggest issues with the offeror matching key shareholders’ price expectations.
A binding proposal is unlikely as the timing would be viewed as opportunistic, with the recent market rally eroding a potential takeover premium and ASMPT’s premium multiple compared to peers.

GA Pack (468 HK): Crunch Time

Unsurprisingly, the Greatview Aseptic Packaging (468 HK) Board has recommended shareholders vote against the appointment of Shandong Xinjufeng Technology Packaging (301296 CH)’s two director nominees.
The EGM vote on 18 October is too close to call and depends on Shandong Xinjufeng and management’s ability to rally disengaged minorities to their respective causes.
Irrespective of the EGM vote results, Shandong Xinjufeng will be keen to launch its offer to ward off the threat of a possible competing offer from management.

Korea Zinc: Plans to Buy Back and Cancel Shares Worth 2.7 Trillion Won + Team Up with Bain Capital

By Douglas Kim

Korea Zinc plans to repurchase and cancel shares worth 2.663 trillion won. Korea Zinc’s partner Bain Capital also plans to purchase around 430 billion won for a 2.5% stake.
Korea Zinc plans to buy back shares at 830,000 won per share, which is 11% higher than MBK’s revised up tender offer price of 750,000 won.
Choi family/Bain Capital’s efforts to conduct a massive share buyback and cancellation at higher prices than the market price goes against the globally accepted market practices.

ASMPT (ASM Pacific). 522 HK. M&A. Takeover Target Talk. Déjà Vu ?

By Neil Campling

The second PE rumoured interest in ASMPT in 18 months, with KKR circling.
Semiconductor M&A has surged in 2024 YTD with a 33% increase in deal activity compared to 2023.
ASM’s leadership in TCB, potential growth within HBM, expansion at TSM and enabling the Nvidia Blackwell platform are all reasons for M&A interest.

K Bank IPO – Should Price Below Its Range

K Bank (279570 KS) plans to raise up to US$740m in its upcoming South Korean IPO.
K Bank is one of three Internet-only banks in Korea. It provides a full range of commercial banking products and services.
In our previous note, we have looked at the company’s past performance and undertaken a peer comparison. In this note, we will talk about valuations.

China Resources Beverage Pre-IPO – PHIP Updates – Revenue Slowing, Margins Growing

China Resources Beverage (CRB HK) is looking to raise up to US$1bn in its upcoming Hong Kong IPO.
China Resources Beverage manufactures and sells packaged drinking water and RTD soft beverages in China.
In our earlier notes, we talked about the company’s past performance and provided our thoughts on valuations. In this note, we will look at updates from its most recent filings.

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Oct 03

Daily Brief TMT/Internet: ASM Pacific Technology, Cerebras Systems , Apple , Arena Bilgisayar, Wise PLC, SBI Holdings and more

By Smartkarma Daily Briefs | Daily Briefs, TMT/Internet

In today’s briefing:

ASMPT (522 HK): Don’t Bet on a KKR Privatisation
ASMPT (ASM Pacific). 522 HK. M&A. Takeover Target Talk. Déjà Vu ?
ASMPT (522 HK): KKR’s Proposal Is A Non-Starter
The Cerebras IPO Stucture Sucks
Taiwan Tech Weekly: Apple Shifting AR Strategy After Meta Orion Showcase; Apple Supply Chain Monitor
Arena Bilgisayar (ARENA TI) – Tuesday, Jul 2, 2024
Wise Plc (WPLCF) – Tuesday, Jul 2, 2024
Tech Supply Chain Tracker (03-Oct-2024): Taiwan’s carbon fee faces challenges from local, EU regs.

ASMPT (522 HK): Don’t Bet on a KKR Privatisation

Bloomberg reported that KKR has made a non-binding, preliminary approach to taking ASM Pacific Technology (522 HK) private. ASMPT has been the subject of takeover rumours in the past.
The trading patterns of the substantial shareholders suggest a willingness to exit. However, past privatisation rumours suggest issues with the offeror matching key shareholders’ price expectations.
A binding proposal is unlikely as the timing would be viewed as opportunistic, with the recent market rally eroding a potential takeover premium and ASMPT’s premium multiple compared to peers.

ASMPT (ASM Pacific). 522 HK. M&A. Takeover Target Talk. Déjà Vu ?

By Neil Campling

The second PE rumoured interest in ASMPT in 18 months, with KKR circling.
Semiconductor M&A has surged in 2024 YTD with a 33% increase in deal activity compared to 2023.
ASM’s leadership in TCB, potential growth within HBM, expansion at TSM and enabling the Nvidia Blackwell platform are all reasons for M&A interest.

ASMPT (522 HK): KKR’s Proposal Is A Non-Starter

By David Blennerhassett

Reportedly – Bloomberg – KKR has made a non-binding proposal for ASM Pacific Technology (522 HK), the world’s leading back-end semiconductor production equipment supplier.
ASMPT’s largest shareholder, ASM International Nv (ASM NA), with 25%, has been the focus of activists for some time to sell its stake.
This bid has all the hallmarks of the approach (also cited by Bloomberg) by PAG last year. Which came to nought. From a regulatory standpoint, I can’t see this happening.

The Cerebras IPO Stucture Sucks

By Douglas O’Laughlin

I’m not going to write about the technical side at all, as I expect Dylan Patel’s team at SemiAnalysis to do a much better job than I can do alone.
However, I want to note some of the funniest aspects because landmines are everywhere for this IPO. Of course, it’s driven by G42, but it’s much worse than you think. Here’s the prelim S-1.
G42 is pretty much the only customer.

Taiwan Tech Weekly: Apple Shifting AR Strategy After Meta Orion Showcase; Apple Supply Chain Monitor

By Vincent Fernando, CFA

Apple Set to Launch iPhone SE 4 and Updated iPad Air in Early 2025: Key Developments to Watch
META’s Orion AR Glasses: Next Major Computing Platform After the Smartphone?
Apple Supply Chain Monitor: Key IPhone Suppliers Didn’t Rally With Apple; Opportunity for Rebound?

Arena Bilgisayar (ARENA TI) – Tuesday, Jul 2, 2024

By Value Investors Club

Arena Bilgisayar is Turkey’s second-largest IT distributor led by CEO Serkan Celik, who has successfully turned around the core distribution business and created value from non-core ventures
Despite appearing undifferentiated, levered, and expensive on the surface, the company’s valuation is attractive at 1x tangible book value and 5-7x P/E ratio
With double-digit annual growth, pre-tax returns on capital exceeding 35%, and Turkey’s return to orthodox monetary policy, an investment in Arena could potentially return between 3-5x over the next 5 years, founded in 1991 by former Karma International employees, Arena has a strong history and promising future.

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

Wise Plc (WPLCF) – Tuesday, Jul 2, 2024

By Value Investors Club

Wise operates centers in different countries for faster and cost-effective cross-border transactions
Strong track record of organic growth in a growing market with high Total Addressable Market
Recent stock declines attributed to cyclical factors, but investors optimistic about Wise’s expanding product offerings and core FX payments supporting revenue growth

Tech Supply Chain Tracker (03-Oct-2024): Taiwan’s carbon fee faces challenges from local, EU regs.

By Tech Supply Chain Tracker

Taiwan’s carbon fee policy is being challenged by local and EU regulations, impacting their offshore wind goals.
Europe’s data center capacity shortage for the AI race is causing concerns in the region.
Samsung’s Galaxy Tab S10 series now includes MediaTek chips, bringing new capabilities to the familiar design.

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Oct 03

Daily Brief Industrials: Hyosung Heavy Industries Corp and more

By Smartkarma Daily Briefs | Daily Briefs, Industrials

In today’s briefing:

KOSPI200 Index Rebalance Preview: 4 Adds, 5 Deletes Likely in December

KOSPI200 Index Rebalance Preview: 4 Adds, 5 Deletes Likely in December

85% of the way through the review period, there could be 4 adds and 5 deletes for the Korea Stock Exchange KOSPI 200 (KOSPI2 INDEX) in December.
The impact on the potential inclusions ranges from 1.4-17 days of ADV while the impact on the potential deletions varies from 4-8 days of ADV.
The potential adds outperformed the potential deletes early in the review period before giving up all the gains over the following months.

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Oct 03

Daily Brief Industrials: Hyosung Heavy Industries Corp and more

By Smartkarma Daily Briefs | Daily Briefs, Industrials

In today’s briefing:

KOSPI200 Index Rebalance Preview: 4 Adds, 5 Deletes Likely in December

KOSPI200 Index Rebalance Preview: 4 Adds, 5 Deletes Likely in December

85% of the way through the review period, there could be 4 adds and 5 deletes for the Korea Stock Exchange KOSPI 200 (KOSPI2 INDEX) in December.
The impact on the potential inclusions ranges from 1.4-17 days of ADV while the impact on the potential deletions varies from 4-8 days of ADV.
The potential adds outperformed the potential deletes early in the review period before giving up all the gains over the following months.

Before it’s here, it’s on Smartkarma

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

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Oct 03

Daily Brief Energy/Materials: Korea Zinc, Greatview Aseptic Packaging, SGX Rubber Future TSR20, Nickel Industries , Mongolian Mining, Veren, Serica Energy, Atlas Lithium and more

By Smartkarma Daily Briefs | Daily Briefs, Energy & Materials Sector

In today’s briefing:

Korea Zinc’s Buyback Tender Offer at ₩830,000: Market Vibe Still Leans Towards MBK
Court Dismisses Injunction; Korea Zinc to Announce Buyback Tender Offer Soon
GA Pack (468 HK): Crunch Time
Korea Zinc: Plans to Buy Back and Cancel Shares Worth 2.7 Trillion Won + Team Up with Bain Capital
The Challenges Of Rubber Production In 2024: Weather, Pricing Dynamics, And Regulatory Implications
Morning Views Asia: Nickel Industries , Tata Motors ADR
Mongolia Mining 975 HK: Redemption of Perpetual Securities Complete, Dividend Catalyst In-Play
Veren Inc.: Initiation Of Coverage – Will The Acquisition of SilverBow Resources Be A Game Changer?
Serica Energy Plc (AIM: SQZ): Very high flow rate at new Bittern well
Sustainable Investing Surveyor – Atlas Lithium Corporation (ATLX)

Korea Zinc’s Buyback Tender Offer at ₩830,000: Market Vibe Still Leans Towards MBK

Korea Zinc is launching a 3.21M share buyback (15.5% of total shares) via a KRW 2.66T tender offer at ₩830,000 per share, with Bain Capital involved.
If tendered shares fall short, Korea Zinc and Bain Capital will buy all. If over the target, they’ll buy pro rata. Below 1,215,283 shares, they will opt out.
Should we dive into Korea Zinc’s risky buyback or choose safer, lower-priced MBK? The market vibe favors MBK, reflected in Korea Zinc’s closing price today.

Court Dismisses Injunction; Korea Zinc to Announce Buyback Tender Offer Soon

The court rejected MBK and Young Poong’s injunction to block Korea Zinc’s buyback, allowing Choi’s side to continue using buybacks to defend control.
Korea Zinc plans an emergency board meeting to launch a tender offer, using internal funds, to buy back shares at 800K-850K KRW starting around October 7.
If Choi converts discretionary reserves into distributable profits, Korea Zinc could unlock 2-3 trillion KRW for the buyback, but uncertainty keeps the stock around 700K KRW.

GA Pack (468 HK): Crunch Time