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Smartkarma Daily Briefs

Daily Brief Industrials: Pylon Technologies , Fanuc Corp, Talgo SA, Enphase Energy, AP Moeller – Maersk A/S, Waste Management, Mytilineos Holdings Sa, Kokuyo Co Ltd, General Electric and more

By | Daily Briefs, Industrials

In today’s briefing:

  • STAR100 Index Rebalance Preview: Potential Adds Diverge Further from Potential Deletes
  • Fanuc (6954) | Improved Orders and Margins Amid Long-Term Challenges
  • Ganz MaVag Offers Sweetener to Spanish Government
  • Enphase Energy: Expansion into New Geographical Markets & 5 Pivotal Factors Driving Its Performance In 2024 & 2025! – Financial Forecasts
  • Monthly Container Shipping Tracker | Pricing Still Firm | Spot Rates Fall | Closed Pair (July 2024)
  • Waste Management: What Is Their Strategy For Acquisitions & Market Expansion? – Major Drivers
  • Metlen Energy & Metals – Strengthening operating margin in H1
  • Kokuyo Co Ltd (7984 JP): 1H FY12/24 flash update
  • General Dynamics Corporation: Robust Defense Order Book & Pipeline Driving Future Growth! – Major Drivers


STAR100 Index Rebalance Preview: Potential Adds Diverge Further from Potential Deletes

By Brian Freitas

  • The review period for the September rebalance ends 31 July. We expect the changes to be announced 30 August with the implementation taking place after the close on 13 September.
  • We forecast 6 changes for the index, including migrations between the STAR100 Index and the STAR50 INDEX. There is uncertainty for a few adds given profitability (or lack of it). 
  • The outright potential adds have outperformed the outright potential deletes since the start of the calendar year with 12% outperformance in just the last 3 weeks.

Fanuc (6954) | Improved Orders and Margins Amid Long-Term Challenges

By Mark Chadwick

  • Fanuc reported slightly better-than-expected Q1 sales and OP forecasts, mainly due to a recovery in sales of FA equipment
  • Fanuc’s results are consistent with a bottoming out of Japan’s machine tool orders in the first half of the year
  • We turn bullish on the stock given the cyclical bottoming out of orders and margins. However, the stock is still not “cheap” and the company faces a number of challenges

Ganz MaVag Offers Sweetener to Spanish Government

By Jesus Rodriguez Aguilar

  • According to daily Expansion, Ganz MaVag plans to reserve part of Talgo SA (TLGO SM)‘s share capital for one or more Spanish partners chosen by the Spanish Government. 
  • Uncertainty over the approval process has lowered the price to €4.31, given the low likelihood of counteroffers and the uncertainty of a potentially prolonged process.
  • Gross spread is 13.8%, indicating uncertainty regarding timeline and development. The market is pricing a 39% probability of deal completion. Recommendation is sell on strength.

Enphase Energy: Expansion into New Geographical Markets & 5 Pivotal Factors Driving Its Performance In 2024 & 2025! – Financial Forecasts

By Baptista Research

  • Enphase Energy reported solid financial outcomes for the second quarter of 2024, driven by robust demand for its products and effective inventory management.
  • The company achieved a revenue of $303.5 million, reflecting shipments of approximately 1.4 million microinverters and 120 megawatt-hours of batteries.
  • This performance was supported by an overall end market demand valued at around $396 million for the quarter.

Monthly Container Shipping Tracker | Pricing Still Firm | Spot Rates Fall | Closed Pair (July 2024)

By Daniel Hellberg

  • Overall, June container throughput growth and average container rates strong
  • But spot rates have begun to wobble recently, and 2025 uncertainty grows
  • We have decided to close our suggested container shipping pair trade 

Waste Management: What Is Their Strategy For Acquisitions & Market Expansion? – Major Drivers

By Baptista Research

  • WM presented its financial outcomes for the second quarter of 2024, underscoring a period of significant operational strength and strategic alignment towards its long-term growth objectives.
  • WM reported a historical high with a 30% operating EBITDA margin, driven by efficiencies from technological investments and a robust pricing strategy.
  • The company’s commitment to leveraging its expertise across various platforms was evident, particularly with its planned acquisition of Stericycle, which is expected to complement and expand its service offerings in the medical waste industry.

Metlen Energy & Metals – Strengthening operating margin in H1

By Edison Investment Research

Metlen Energy & Metals achieved a record H1 EBITDA of €474m in 2024 (vs €437m in H123), while also increasing its operating margin by 169bp to 19.1% (17.4% at H123). Revenue declined marginally (-1% to €2,482m) but Metlen’s diversified and synergistic business model across the energy and metals sectors is helping to grow its margins and diversity of earnings (towards RES/Utility/Metals and away from volatile natural gas supply). Both net profit after minorities and earnings per share increased by c 5% y-o-y to €282m and €2.04, respectively. Net debt/EBITDA is a comfortable 1.76x and Metlen looks well placed for a potential upgrade to investment grade status by the rating agencies later this year, achieving its goal.


Kokuyo Co Ltd (7984 JP): 1H FY12/24 flash update

By Shared Research

  • Revenue increased by JPY5.1bn (+2.9% YoY), driven by growth in the Furniture and Stationery Businesses.
  • Operating profit declined by JPY97mn (-0.6% YoY) due to lower profit in the Interior Retail business and increased adjustments.
  • Gross profit margin rose to 39.9%, while the SG&A expense ratio increased to 31.1% due to strategic spending.

General Dynamics Corporation: Robust Defense Order Book & Pipeline Driving Future Growth! – Major Drivers

By Baptista Research

  • General Dynamics recently presented their second quarter 2024 financial results, reflecting notable growth across their business segments with some operational challenges specifically in their Aerospace division.
  • This analysis delves into both the positive outcomes and areas of concern from their performance to provide a balanced investment perspective.
  • Starting with their strengths, General Dynamics displayed robust revenue increases across all their four business segments, highlighting an 18% overall growth.

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Daily Brief Industrials: Pylon Technologies , Fanuc Corp, Talgo SA, Enphase Energy, AP Moeller – Maersk A/S, Waste Management, Mytilineos Holdings Sa, Kokuyo Co Ltd, General Electric and more

By | Daily Briefs, Industrials

In today’s briefing:

  • STAR100 Index Rebalance Preview: Potential Adds Diverge Further from Potential Deletes
  • Fanuc (6954) | Improved Orders and Margins Amid Long-Term Challenges
  • Ganz MaVag Offers Sweetener to Spanish Government
  • Enphase Energy: Expansion into New Geographical Markets & 5 Pivotal Factors Driving Its Performance In 2024 & 2025! – Financial Forecasts
  • Monthly Container Shipping Tracker | Pricing Still Firm | Spot Rates Fall | Closed Pair (July 2024)
  • Waste Management: What Is Their Strategy For Acquisitions & Market Expansion? – Major Drivers
  • Metlen Energy & Metals – Strengthening operating margin in H1
  • Kokuyo Co Ltd (7984 JP): 1H FY12/24 flash update
  • General Dynamics Corporation: Robust Defense Order Book & Pipeline Driving Future Growth! – Major Drivers


STAR100 Index Rebalance Preview: Potential Adds Diverge Further from Potential Deletes

By Brian Freitas

  • The review period for the September rebalance ends 31 July. We expect the changes to be announced 30 August with the implementation taking place after the close on 13 September.
  • We forecast 6 changes for the index, including migrations between the STAR100 Index and the STAR50 INDEX. There is uncertainty for a few adds given profitability (or lack of it). 
  • The outright potential adds have outperformed the outright potential deletes since the start of the calendar year with 12% outperformance in just the last 3 weeks.

Fanuc (6954) | Improved Orders and Margins Amid Long-Term Challenges

By Mark Chadwick

  • Fanuc reported slightly better-than-expected Q1 sales and OP forecasts, mainly due to a recovery in sales of FA equipment
  • Fanuc’s results are consistent with a bottoming out of Japan’s machine tool orders in the first half of the year
  • We turn bullish on the stock given the cyclical bottoming out of orders and margins. However, the stock is still not “cheap” and the company faces a number of challenges

Ganz MaVag Offers Sweetener to Spanish Government

By Jesus Rodriguez Aguilar

  • According to daily Expansion, Ganz MaVag plans to reserve part of Talgo SA (TLGO SM)‘s share capital for one or more Spanish partners chosen by the Spanish Government. 
  • Uncertainty over the approval process has lowered the price to €4.31, given the low likelihood of counteroffers and the uncertainty of a potentially prolonged process.
  • Gross spread is 13.8%, indicating uncertainty regarding timeline and development. The market is pricing a 39% probability of deal completion. Recommendation is sell on strength.

Enphase Energy: Expansion into New Geographical Markets & 5 Pivotal Factors Driving Its Performance In 2024 & 2025! – Financial Forecasts

By Baptista Research

  • Enphase Energy reported solid financial outcomes for the second quarter of 2024, driven by robust demand for its products and effective inventory management.
  • The company achieved a revenue of $303.5 million, reflecting shipments of approximately 1.4 million microinverters and 120 megawatt-hours of batteries.
  • This performance was supported by an overall end market demand valued at around $396 million for the quarter.

Monthly Container Shipping Tracker | Pricing Still Firm | Spot Rates Fall | Closed Pair (July 2024)

By Daniel Hellberg

  • Overall, June container throughput growth and average container rates strong
  • But spot rates have begun to wobble recently, and 2025 uncertainty grows
  • We have decided to close our suggested container shipping pair trade 

Waste Management: What Is Their Strategy For Acquisitions & Market Expansion? – Major Drivers

By Baptista Research

  • WM presented its financial outcomes for the second quarter of 2024, underscoring a period of significant operational strength and strategic alignment towards its long-term growth objectives.
  • WM reported a historical high with a 30% operating EBITDA margin, driven by efficiencies from technological investments and a robust pricing strategy.
  • The company’s commitment to leveraging its expertise across various platforms was evident, particularly with its planned acquisition of Stericycle, which is expected to complement and expand its service offerings in the medical waste industry.

Metlen Energy & Metals – Strengthening operating margin in H1

By Edison Investment Research

Metlen Energy & Metals achieved a record H1 EBITDA of €474m in 2024 (vs €437m in H123), while also increasing its operating margin by 169bp to 19.1% (17.4% at H123). Revenue declined marginally (-1% to €2,482m) but Metlen’s diversified and synergistic business model across the energy and metals sectors is helping to grow its margins and diversity of earnings (towards RES/Utility/Metals and away from volatile natural gas supply). Both net profit after minorities and earnings per share increased by c 5% y-o-y to €282m and €2.04, respectively. Net debt/EBITDA is a comfortable 1.76x and Metlen looks well placed for a potential upgrade to investment grade status by the rating agencies later this year, achieving its goal.


Kokuyo Co Ltd (7984 JP): 1H FY12/24 flash update

By Shared Research

  • Revenue increased by JPY5.1bn (+2.9% YoY), driven by growth in the Furniture and Stationery Businesses.
  • Operating profit declined by JPY97mn (-0.6% YoY) due to lower profit in the Interior Retail business and increased adjustments.
  • Gross profit margin rose to 39.9%, while the SG&A expense ratio increased to 31.1% due to strategic spending.

General Dynamics Corporation: Robust Defense Order Book & Pipeline Driving Future Growth! – Major Drivers

By Baptista Research

  • General Dynamics recently presented their second quarter 2024 financial results, reflecting notable growth across their business segments with some operational challenges specifically in their Aerospace division.
  • This analysis delves into both the positive outcomes and areas of concern from their performance to provide a balanced investment perspective.
  • Starting with their strengths, General Dynamics displayed robust revenue increases across all their four business segments, highlighting an 18% overall growth.

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Daily Brief Energy/Materials: Fortescue Metals, Berger Paints India, Crude Oil, Gold and more

By | Daily Briefs, Energy & Materials Sector

In today’s briefing:

  • Fortescue Placement – Discount Appears Attractive, but Momentum Has Been Very Weak
  • NIFTY100 Low Volatility 30 Index Rebalance Preview: Four Changes in September
  • Oil Rig Uptick Boosts US Total Rig Count
  • Commodity Popcorn Markets // Coffee Bubble About To Burst?


Fortescue Placement – Discount Appears Attractive, but Momentum Has Been Very Weak

By Clarence Chu

  • An undisclosed shareholder is looking to raise US$1.25bn (A$1.91bn) from selling some stake in Fortescue Metals (FMG AU).
  • The deal is a large one to digest at 13 days of the stock’s three month ADV. The selling shareholder will be locked up for 45 days.
  • In this note, we run the deal through our ECM framework and comment on deal dynamics.

NIFTY100 Low Volatility 30 Index Rebalance Preview: Four Changes in September

By Brian Freitas

  • The review period for the Nifty 100 Low Volatility 30 Index ends in August. The changes will be announced mid-September and implemented at the close on 27 September.
  • Four potential constituent changes, volatility changes and capping changes will result in one-way turnover of 16% resulting in a one-way trade of INR 6.71bn (US$80m).
  • Three of the four potential deletions are due to a change in the index universe and there will be selling from other passive trackers too.

Oil Rig Uptick Boosts US Total Rig Count

By Suhas Reddy

  • US oil and gas rig count increased by three to 589 for the week ending 26/Jul, rising for the second consecutive week.
  • US oil rig count rose by 5 to 482, marking the first increase since May. Gas rigs fell by 2 to 101, following a rise of 3 the previous week.
  • In July, the total US rig count increased by 8, the first monthly rise since February and the largest since November 2022.

Commodity Popcorn Markets // Coffee Bubble About To Burst?

By The Commodity Report

  • Commodity Popcorn Markets During the week, I saw a tweet by the legendary commodities trader Peter Brandt.
  • The technical part of Kucrop Analytics institutional commodity research arm is heavily influenced by Peter Brands Research, as well as Larry Williams Research.
  • Both look at markets very different and have a strong track record.


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Daily Brief TMT/Internet: Nippon Electric Glass, A8 New Media, Nazara Technologies, Servicenow Inc, SK Hynix, At&T Inc, Chenbro Micom, Fiserv Inc, International Business Machines and more

By | Daily Briefs, TMT/Internet

In today’s briefing:

  • Big (Relatively Speaking) NEG (5214 JP) Buyback – Walking The Walk, Faster
  • A8 New Media (800 HK): Wide Spread Ahead of the 23 August Vote
  • Nazara Technologies- Face off with Heavy Liability
  • ServiceNow Inc.: Expanding Market Reach Through Partnerships and Cloud Solutions & Other Major Drivers
  • SK Hynix (000660-KR): Positive Technical Analysis Signals
  • AT&T INC (T) – Monday, Apr 29, 2024
  • TechChain Insights: Visit with Nvidia Server Chassis Producer Chenbro; A Ubiquitous Supplier
  • Fiserv Inc.: Expanding Merchant Solutions & Small Business Integrations But Is It Enough To Warrant A Bullish Thesis? – Major Drivers
  • International Business Machines (IBM): Will Their Hybrid Cloud and AI Investments Pay Off? – Major Drivers
  • AT&T Inc.: Enhanced Fiber Infrastructure Expansion & Strategic Deployment of Internet Air Taking Them Forward! – Major Drivers


Big (Relatively Speaking) NEG (5214 JP) Buyback – Walking The Walk, Faster

By Travis Lundy

  • Today, Nippon Electric Glass (5214 JP) announced an on-market buyback of up to 7.0mm shares (8.08%) spending up to ¥20bn from tomorrow through end-January 2025.
  • An impressive headline, but fewer shares. Importantly, this follows a ¥20bn buyback from last November. They are moving through their MTMP more quickly than expected.
  • This new buyback is worth about 25% of the inbound cross-holdings. And some of those holders plan to sell. This may be designed to let them sell in the market. 

A8 New Media (800 HK): Wide Spread Ahead of the 23 August Vote

By Arun George

  • A8 New Media (800 HK)’s IFA opines that Mr Liu Xiaosong (Chairman and CEO)’s HK$0.36 privatisation offer to be fair and reasonable. The vote is on 23 August. 
  • Key conditions include approval by at least 75% of disinterested shareholders (<10% of disinterested shareholders rejection).
  • No shareholder holding a blocking stake, low AGM minority participation rate and the massive 162.8% takeover premium suggest a done deal. At the last close, the gross/annualised spread is 5.9%/36.0%.

Nazara Technologies- Face off with Heavy Liability

By Nitin Mangal

  • Shares of Nazara Technologies (NAZARA IN) were rattled last week after the company had received show cause notice from the GST Department on 16th July.
  • The GST liability pertained to two of its subsidiaries and summed up to INR 11.2 bn, which represents under 50% of consolidated net-worth.
  • However because the GST for the industry is a delicate and debatable matter, the actual impact on the financials cannot be ascertained now, but company faces a high legal risk.

ServiceNow Inc.: Expanding Market Reach Through Partnerships and Cloud Solutions & Other Major Drivers

By Baptista Research

  • ServiceNow’s second quarter of 2024 financial results indicate strong operational and financial momentum, with notable increases in important metrics despite a backdrop of an internal investigation and leadership changes.
  • The management presented a robust narrative of growth, leveraging its GenAI strategy, which contributed significantly to their overall performance.
  • The company reported a 23% year-over-year growth in subscription revenue at constant currency, surpassing their own guidance.

SK Hynix (000660-KR): Positive Technical Analysis Signals

By Wium Malan, CFA

  • Despite a negative share price reaction, following its 2Q2024 earnings report, SK Hynix (000660 KS) remains firmly amid an earnings upgrade cycle.
  • With SK Hynix entering oversold territory, near-term momentum indicators are displaying bullish signals.
  • SK Hynix trades at nearly one standard deviation below its 5-year historic average EV/EBITDA ratio and a discount to global peers.

AT&T INC (T) – Monday, Apr 29, 2024

By Value Investors Club

  • AT&T offers a range of telecommunications services, including wireless, fiber, and broadband
  • The company’s market position, technological advancements, and capital return potential make it a strong investment opportunity
  • Despite being undervalued, AT&T has a significant presence in Latin America and expects steady EBITDA growth

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.


TechChain Insights: Visit with Nvidia Server Chassis Producer Chenbro; A Ubiquitous Supplier

By Vincent Fernando, CFA

  • 10-15% Market Share for Server Chassis — Chenbro is one of the leading producers of server chassis in the world.
  • Key Nvidia Development Partner — Chenbro produces servers for most major data center names including AWS and China’s BAT, as well as for Nvidia servers and architecture.
  • New Server Market Color to Be Released Soon — The company is well positioned to expand capacity as the market expands and is expected to release 2Q24E earnings in early-August.

Fiserv Inc.: Expanding Merchant Solutions & Small Business Integrations But Is It Enough To Warrant A Bullish Thesis? – Major Drivers

By Baptista Research

  • Fiserv, a global provider of payment and financial services technology solutions, reported a robust set of results for its second quarter, pointing towards continued growth and expansion across its portfolio.
  • The company announced an adjusted EPS of $2.13, reflecting an 18% increase year-over-year, bolstered by 7% adjusted revenue growth and a significant 160 basis points improvement in adjusted operating margins to 38.4%.
  • These figures demonstrate a solid trajectory towards achieving double-digit organic revenue and adjusted earnings per share growth.

International Business Machines (IBM): Will Their Hybrid Cloud and AI Investments Pay Off? – Major Drivers

By Baptista Research

  • International Business Machines Corporation (IBM) recently discussed its financial outcomes for the second quarter of 2024, presenting a mix of strengths and areas for improvement that inform its current investment thesis.
  • IBM’s leadership emphasized robust performance in their Software and Infrastructure segments, demonstrating significant revenue growth fueled by continuous innovations in artificial intelligence (AI) and hybrid cloud technologies.
  • However, the Consulting segment showed weaker dynamics, reflecting a more cautious spending environment among clients regarding discretionary projects.

AT&T Inc.: Enhanced Fiber Infrastructure Expansion & Strategic Deployment of Internet Air Taking Them Forward! – Major Drivers

By Baptista Research

  • AT&T’s Q2 2024 earnings revealed mixed results as the telecom giant continues to push boundaries in its wireless and broadband sectors.
  • The net additions of high-value wireless and broadband subscribers underscore a robust influence of its investment-driven growth strategy, even as the company witnessed minor downshifts in other service areas.
  • In the wireless segment, AT&T reported an encouraging addition of 419,000 postpaid phone subscribers.

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Daily Brief Consumer: Fancl Corp, Stanley Electric, Thai Beverage, Ola Electric, Hyundai Motor, China Resources Beverage, Tesla , Alibaba Group Holding and more

By | Consumer, Daily Briefs

In today’s briefing:

  • Fancl (4921) – Extendy-Extendy-Bumpity-Bumpity
  • Stanley Electric (6923) – Salutary Q1 and BIG Buyback
  • Charoen Rearranges ThaiBev and TCC’s Deckchairs
  • Ola Electric IPO: Offering Details & Index Inclusion
  • Potential Big Changes at the Korean Chaebols – The Age Factor of Chairman/Honorary Chairman
  • China Resources Beverage (华润饮料) Pre-IPO: A Visit to Convenience Stores
  • Will Margin Contraction, Decline in Deliveries, and Trump’s EV Policy Reversals Stall Tesla?
  • BUY/SELL/HOLD: Hong Kong Stock Updates (July 29)
  • Tesla’s Q2 Revenue Up 2% to $25.5B but Misses Earnings Expectations; Stock Drops 8%
  • Ola Electric: India’s First EV IPO – Key Facts, Financials & Valuation


Fancl (4921) – Extendy-Extendy-Bumpity-Bumpity

By Travis Lundy

  • The Kirin Holdings (2503 JP) Tender Offer to buy out minorities in Fancl Corp (4921 JP) closes today. Or at least the current one does. 
  • The original deal announced was light, and the stock has traded above terms since the announcement, with one fund buying up to 7.94%.
  • I expect Kirin to extend and bump next week, or bump/extend now, depending on their visibility on Fancl Q1. 

Stanley Electric (6923) – Salutary Q1 and BIG Buyback

By Travis Lundy

  • Today after the close Stanley Electric (6923 JP) announced a salutary Q1 result which was “ahead of in-line” in most metrics towards unchanged H1 and FY guidance. 
  • The company also announced a BIG on-market buyback at 8.1% of shares out, to be bought back with a delayed start over the 7.5mos starting 13 August.
  • At last price, the buyback is ~10mm shares. The details are interesting and are worth a look. 

Charoen Rearranges ThaiBev and TCC’s Deckchairs

By David Blennerhassett

  • Back on the 18th, the Sirivadhanabhakdi family-backed Thai Beverage (THBEV SP) announced it would swap its 28.78% stake in Frasers Property Ltd (FPL SP) with THBEV-affiliate TCC Assets.
  • Under the agreement, TCC will transfer a 41.3% stake in food and beverage play Fraser And Neave (FNN SP) to THBEV, lifting THBEV’s holding to 69.61% from 28.31% currently.
  • The share swap triggers no Offers for either F&N or FPL. THBEV says it has no plans to privatise F&N  … at the moment.

Ola Electric IPO: Offering Details & Index Inclusion

By Brian Freitas

  • The Ola Electric (1700674D IN) IPO will see the company and existing shareholders sell 808.6m shares at a price range of INR72-76/share, valuing the company between US$3.79bn-US$4bn.
  • Ola Electric (1700674D IN) will have a float of around 10% at the time of listing and that will increase to around 20% after the lock-up on anchor investors ends.
  • Ola Electric (1700674D IN) could be added to global indices in February and March 2025, but inclusion in local indices with meaningful tracking assets will take longer.

Potential Big Changes at the Korean Chaebols – The Age Factor of Chairman/Honorary Chairman

By Douglas Kim

  • One of the important factors of big changes at the Korean chaebols is the age factor of the chairman/honorary chairman of each of these conglomerates.
  • In this insight, we provide the shareholding ownerships and ages of the top 10 Korean conglomerates where age could become a major factor in impacting big changes that could occur.
  • Among the 10 conglomerates listed below, Hyundai Motor Group, Celltrion Group, and SK Group have shown greater willingness to improve their shareholder return policies.

China Resources Beverage (华润饮料) Pre-IPO: A Visit to Convenience Stores

By Ming Lu

  • We visited convenience stores to look for China Resources Beverage products.
  • The company is in a price war with Nongfu Spring, for both drinkable water and beverages.
  • Some CRB products, such as plum syrup, do not have any competitors in physical stores.

Will Margin Contraction, Decline in Deliveries, and Trump’s EV Policy Reversals Stall Tesla?

By Uttkarsh Kohli

  • Tesla’s stock dropped 12% post Q2 earnings, due to a 7% decrease in auto revenue, reflecting broader financial struggles despite a 15% rise in quarterly EV deliveries.
  • Trump’s potential repeal of EV subsidies could reduce EV sales by 27% by 2030, but Tesla’s lower reliance on imports may mitigate the effect of increased tariffs.
  • Elon Musk’s $5 billion investment in his AI startup xAI raises concerns about potential distractions from Tesla, even as he leverages political shifts to benefit Tesla.

BUY/SELL/HOLD: Hong Kong Stock Updates (July 29)

By David Mudd


Tesla’s Q2 Revenue Up 2% to $25.5B but Misses Earnings Expectations; Stock Drops 8%

By Uttkarsh Kohli

  • Earnings Miss: Tesla’s Q2 revenue increased by 2% to $25.5 billion, but earnings per share were 52 cents, missing the forecast of 62 cents.
  • Record Revenue in Energy: Tesla achieved record revenues and profits in its energy sector, with 130% QoQ growth in energy storage deployments and regulatory credit revenues.
  • Stock Reaction & Competition: Tesla’s stock dropped over 8% after-hours, influenced by increased competition, production challenges, and a notable decline in auto revenue by 7% to $19.9 billion.

Ola Electric: India’s First EV IPO – Key Facts, Financials & Valuation

By Devi Subhakesan

  • Ola Electric (1700674D IN) , India’s leading electric 2-wheeler backed by Softbank Group ‘s Vision Fund, will launch its USD 735 million IPO on Friday, August 2.
  • The IPO pricing suggests a post-money equity valuation of around USD 4 billion, significantly lower than its earlier funding levels.
  • Government incentives for EVs are being revised, with the current scheme valid only until the end of September, creating uncertainty that has possibly impacted valuations.

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Daily Brief Financials: KB Financial, Korea Stock Exchange Kospi Index, Heiwa Real Estate, NIFTY Index, Shinhan Financial, Lufax Holding , Monex Group Inc, Record PLC, Discover Financial Services, Krung Thai Bank Pub and more

By | Daily Briefs, Financials

In today’s briefing:

  • Examining a Proactive Flow Trading Setup Targeting Korean Value-Up Disclosures
  • Why Is Proportionate Shareholder Protection Key to Korea’s Value-Up, and What Is Its Status?
  • Heiwa Real Estate (8803 JP): Murakami Becomes a Substantial Shareholder
  • EQD / NSE Vol Update / Vols Focus on India-Specific News & Ignore Upcoming Global Macro Events
  • Shinhan Financial: Shareholder Return Ratio of 50% to Boost Corporate Value
  • Trying to Make Sense of Lufax
  • Monex Group Inc (8698 JP): Q1 FY03/25 flash update
  • Record – Strong performance fees
  • Discover Financial Services (DFS) – Monday, Apr 29, 2024
  • Thai Banks 2Q24 Screener; We Stick with Krung Thai for Best Value, We Downgrade Kasikorn to Neutral


Examining a Proactive Flow Trading Setup Targeting Korean Value-Up Disclosures

By Sanghyun Park

  • Value-Up plan announcements had a significant immediate price impact, especially for Woori Financial and Shinhan Financial, amplified by recent dividend tax reductions.
  • We should target companies likely to announce value-up disclosures soon, focusing on those with prior notices. Notably, KB Financial and DB HiTek have issued prior notices.
  • Both companies hold many treasury shares. KB Financial is a dividend stock, with value-up disclosures likely during their Q3 and Q4 earnings announcements.

Why Is Proportionate Shareholder Protection Key to Korea’s Value-Up, and What Is Its Status?

By Sanghyun Park

  • A new tax support framework for Korea’s value-up policy was introduced, but local markets argue that proportionate protection for minority shareholders is crucial for a significant market value increase.
  • Korean political leaders are united in supporting this amendment to the Commercial Act, with recent events increasing the likelihood of bipartisan support for this crucial change.
  • Given the administration’s commitment to the value-up and recent negative sentiment towards recent restructurings at Doosan and SK, there’s growing potential for minority shareholder protection to take root in Korea.

Heiwa Real Estate (8803 JP): Murakami Becomes a Substantial Shareholder

By Arun George

  • Murakami’s entity, City Index Eleventh, and daughter reported a 5.05% position in Heiwa Real Estate (8803 JP). The shares were purchased from 24 May to 22 July.
  • Murakami’s average buy-in price is JPY3,907.38, a 6.7% discount to the last close price. Recently, Simplex (the previous largest shareholder) sold its entire stake to Taisei Co Ltd (4649 JP).
  • Murakami’s disclosure suggests two possibilities: the start of an activist campaign or a short-term pump-and-dump play. Recent precedents indicate the latter.

EQD / NSE Vol Update / Vols Focus on India-Specific News & Ignore Upcoming Global Macro Events

By Sankalp Singh

  • Implied Volatilities (IVs) sold off dramatically post Budget Event – in spite of weaker underlying indices. Larger break of trading ranges likely needed to stall the slide in IVs.
  • Wait-And-See approach to tactical decisions justified. Vol-Regime avoids a switch from “High & Down” state. Protracted grind lower in IVs projected.
  • Vol Surface Smile has compressed alongside lower IVs. Skew remains unaffected by change in IV levels. Vol Term-structure has flattened.

Shinhan Financial: Shareholder Return Ratio of 50% to Boost Corporate Value

By Douglas Kim

  • Shinhan Financial announced that it plans to increase shareholder return ratio to 50%, improve ROE to 10%, and reduce outstanding shares by 50 million+ by 2027.
  • Shinhan Financial Group’s new, outstanding shareholder return policy has been one of the most impressive since the roll-out of the Corporate Value Up program in Korea a few weeks ago.
  • The improved corporate governance policy is likely to lead to Shinhan Financial Group outperforming other financial stocks in Korea and KOSPI overall in the next 6-12 months. 

Trying to Make Sense of Lufax

By Turtles all the way down

  • Lot’s of confusion for me around Lufax (LU).
  • I took my dividend in shares being under the impression the scrip price was $2.15 (1 ADR is 2 shares):“Option 2: Elect Stock – You may elect to receive the dividend paid in new ADRs of LUFAX HLDG LTD at rate USD 1.073647 per share held on record date.”
  • But apparently it is actually $2.25? Did IBKR make a mistake, will I get my shares at $2.15 or did I misread the above? 

Monex Group Inc (8698 JP): Q1 FY03/25 flash update

By Shared Research

  • Consolidated net operating revenue: JPY17.0bn (-16.0% YoY; -2.7% QoQ), with commissions received at JPY8.7bn (-11.5% YoY; +10.0% QoQ).
  • US segment: Net operating revenue USD74.1mn (+4.5% YoY; +0.7% QoQ), SG&A expenses USD59.4mn (-1.1% YoY; -4.5% QoQ).
  • Crypto Asset segment: Net operating revenue JPY3.1bn (+164.3% YoY; -29.6% QoQ), SG&A expenses JPY2.5bn (+55.3% YoY; +22.4% QoQ).

Record – Strong performance fees

By Edison Investment Research

Record reported steady progress in its Q125 trading update. Assets under management (AUM) grew $0.5bn in the quarter to $102.7bn, driven by market and other movements of +$1bn offset by a modest net $0.5bn outflow. The AUM progression is in line with our end-FY25 estimate of $104.7bn. Performance fees surprised positively at £1.6m in the quarter, not much below our £2m estimate for the full year. We are not changing our estimates at this stage.


Discover Financial Services (DFS) – Monday, Apr 29, 2024

By Value Investors Club

  • Discover Financial Services is a successful business with strong financial performance and ownership of the Discover Network and Pulse debit card scheme in the US
  • DFS focuses on prime customers and has a high-quality deposit base, remaining profitable during challenging economic times
  • A merger announcement with Capital One Financial Corp. could reshape the financial services industry, with DFS set to be acquired at a significant premium to its undisturbed price

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.


Thai Banks 2Q24 Screener; We Stick with Krung Thai for Best Value, We Downgrade Kasikorn to Neutral

By Victor Galliano

  • Krung Thai is our sole best value pick among the Thai banks, having solid post-provision profitability, near double digit ROE, a sound balance sheet and attractive PBV and PE ratios
  • We downgrade Kasikorn from buy to neutral, as it has an unattractive PEG and we believe it is more exposed to credit quality deterioration and potential cost of risk reversal
  • Bank Ayudhya is suffering from further credit quality deterioration which led to spike in its cost of risk; it now has the lowest NPL coverage relative to the peer group

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Daily Brief Quantitative Analysis: HK Short Interest Weekly: Ping An and more

By | Daily Briefs, Quantitative Analysis

In today’s briefing:

  • HK Short Interest Weekly: Ping An, Meituan, China Mobile, HSBC, Haidilao, Picc P&C, Gwmotor, Psbc
  • Hong Kong Connect Flows (Jul 26th): Tencent, China Petroleum & Chemical Corporation, Meituan
  • TWSE Foreign Holding Weekly (Jul 26th): Gigabyte Tech, TSMC, Quanta Computer, ASE, Mediatek
  • Northbound Flows (Jul 26th): Zijin Mining, Moutai, Zhongji Innolight, Wuliangye, Boe Technology
  • KRX Foreign Holding Weekly (Jul 26th): Sk Hynix, Samsung Electronics
  • A-H Premium Weekly (Jul 26th):Asymchem, Livzon Pharm, Shanghai Pharm, Pharmaron
  • TWSE Short Interest Weekly (Jul 26th): Auo, Wiwynn, Ctbc Financial, Global Unichip, Faraday Tech


HK Short Interest Weekly: Ping An, Meituan, China Mobile, HSBC, Haidilao, Picc P&C, Gwmotor, Psbc

By Ke Yan, CFA, FRM

  • We analyzed the latest HK SFC report for aggregate short position as of Jul 19th.
  • Top short increases and decreases were tabulated for one week and four week period. 
  • We highlight short changes in Ping An, Meituan, China Mobile, HSBC, Haidilao, Picc P&C, Gwmotor, Psbc.

Hong Kong Connect Flows (Jul 26th): Tencent, China Petroleum & Chemical Corporation, Meituan

By Ke Yan, CFA, FRM

  • We analyze the weekly Hong Kong Connect flows with our data engine for holding position as of July 26th.
  • The top stocks by inflows and outflows were tabulated for all market, HSCEI, mid cap and s/mid cap groups.
  • We highlight flows for Tencent, China Petroleum & Chemical Corporation, Meituan.

TWSE Foreign Holding Weekly (Jul 26th): Gigabyte Tech, TSMC, Quanta Computer, ASE, Mediatek

By Ke Yan, CFA, FRM

  • We analyzed the changes in foreign holdings of TWSE Stocks as of Jul 26th which has an aggregated holding worth USD924.5bn.
  • We estimate that foreign flows to be outflows of USD1,653mln. We tabulate the league table for top changes by value for 1W/4W/1Y and top stocks held by foreign institutions.
  • We highlight foreign changes in Gigabyte Tech, TSMC, Quanta Computer, ASE, Mediatek.

Northbound Flows (Jul 26th): Zijin Mining, Moutai, Zhongji Innolight, Wuliangye, Boe Technology

By Ke Yan, CFA, FRM

  • We analyze the weekly Shanghai/Shenzhen northbound Connect flows with our data engine for holding position as of July 26th.
  • We estimate the weekly outflows to be US$1,578.2 million, led by consumer staples, information technology, financials, and offset by consumer discretionary, health care, utilities.
  • We highlight flows for Zijin Mining, Moutai, CATL, Zhongji Innolight, Wuliangye, Boe Technology.

KRX Foreign Holding Weekly (Jul 26th): Sk Hynix, Samsung Electronics

By Ke Yan, CFA, FRM

  • We analyzed the changes in foreign holdings of KRX stocks as of Jul 26th which has an aggregated holding worth USD549.0bn.
  • We estimate that foreign flows to be outflows of USD854mln. We tabulate the league table for top changes by value for 1W/4W/1Y and top stocks held by foreign institutions.
  • We highlight foreign changes in Sk Hynix (000660 KS), Samsung Electronics (005930 KS).

A-H Premium Weekly (Jul 26th):Asymchem, Livzon Pharm, Shanghai Pharm, Pharmaron

By Ke Yan, CFA, FRM

  • We analyse the changes of A-H premium on 145 stocks over the last week. The average A-H premium was 111.5% as of Jul 26th.
  • The average A-H premium changed by 3.6ppt week-on-week, led by utilities, information technology, financials and offset by consumer staples, communication services.
  • We highlight weekly changes in A-H premium for Asymchem Labor, Livzon Pharm, Shanghai Pharm, Pharmaron Beij, Hua Hong Semi, CICC.

TWSE Short Interest Weekly (Jul 26th): Auo, Wiwynn, Ctbc Financial, Global Unichip, Faraday Tech

By Ke Yan, CFA, FRM

  • We analyzed the changes in short interest of TWSE Stocks as of Jul 26th which has an aggregated short interest worth USD19.5bn.
  • 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 Auo, Wiwynn, Yageo, Ctbc Financial, Global Unichip, Faraday Tech.

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Daily Brief ESG: To Expand Value and Improve Capital Profitability and more

By | Daily Briefs, ESG

In today’s briefing:

  • To Expand Value and Improve Capital Profitability, the Promotion of Human Resources Is Necessary


To Expand Value and Improve Capital Profitability, the Promotion of Human Resources Is Necessary

By Aki Matsumoto

  • It is very difficult to ensure the independence and transparency of a committee when the board of directors is staffed with people who are aligned with the president’s wishes.
  • Companies with high ROE have superior corporate governance, due to effective overseas investor’s engagement, while companies with low ROE show unclear policies for improving ROE, despite having formalized board practice.
  • To improve the effectiveness of the board, companies should appoint people to the board who will help expand the value of the company, and use engagement with overseas investors etc.

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Daily Brief Thematic (Sector/Industry): Ohayo Japan | Positive Notes and more

By | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

  • Ohayo Japan | Positive Notes
  • Japan Morning Connection – 29 July 2024
  • GEMWeekly (26 Jul 2024): PBOC Cuts Rates; South Korea, Thailand Macro; Kakao, Tencent, Samsung


Ohayo Japan | Positive Notes

By Mark Chadwick

  • US stocks ended a volatile week on a positive note as promising inflation data bolstered investor sentiment.
  • KEYENCE reported a net income of 93.5 billion yen for April-June 2024, a 10% increase year-on-year and a record high for the fourth consecutive year
  • Strategic Capital acquired a 5.02% stake in Yellow Hat, as revealed in a large shareholding report submitted to the Kanto Finance Bureau.

Japan Morning Connection – 29 July 2024

By Andrew Jackson

  • Despite management’s plans for buybacks, restructuring, and debt reduction, Sanken’s stock fell below preannouncement levels and appears mispriced. 
  • Strong results from US homebuilders and the Electronic Materials sector suggest positive momentum for Japanese firms like Sumitomo Forestry, Sekisui House, and Shin-Etsu.
  • With 50% of operating profit coming from China, Screen is vulnerable to US trade restrictions. Despite a positive earnings report, concerns over these issues may dampen sentiment

GEMWeekly (26 Jul 2024): PBOC Cuts Rates; South Korea, Thailand Macro; Kakao, Tencent, Samsung

By Wium Malan, CFA


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Daily Brief ECM: Ola Electric IPO: The Investment Case and more

By | Daily Briefs, ECM

In today’s briefing:

  • Ola Electric IPO: The Investment Case
  • GRAIL: Detecting Early-Stage Cancers With Galleri Test, A Significant Market Opportunity
  • ECM Weekly (29th July 2024) – ASICS, Kokusai, Amer, Hyundai, Timee, Sanil, Akum, Bloks, Ola Electric
  • Sanil Electric IPO Trading – Strong Institutional Demand, Highest Subscription Rate This Year


Ola Electric IPO: The Investment Case

By Arun George

  • Ola Electric (1700674D IN), the largest Indian player in electric two-wheel vehicles (E2W), will launch a US$660 million IPO at a lower US$4.5 billion valuation (vs. the previous US$7-8bn target). 
  • We previously discussed the IPO in Ola Electric IPO: The Bull Case and Ola Electric IPO: The Bear Case. In this note, we examine the latest updates in the RHP. 
  • The investment case rests on rising market share in a growing market, rapid growth aided by product diversification, path to profitability supported by lower losses and declining cash burn.

GRAIL: Detecting Early-Stage Cancers With Galleri Test, A Significant Market Opportunity

By Andrei Zakharov

  • In June of 2024, GRAIL, a market leader in early cancer detection, spun off from Illumina into an independent publicly traded company.
  • Following the spin-off, Illumina retains up to ~15% ownership interest in GRAIL and continues to fund GRAIL’s operations and R&D with disposal funding of ~$974M.
  • I view GRAIL as a market leader in the MCED testing market and uniquely positioned to be very effective in detecting some of the most aggressive early-stage cancers.

ECM Weekly (29th July 2024) – ASICS, Kokusai, Amer, Hyundai, Timee, Sanil, Akum, Bloks, Ola Electric

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 IPO front, the coming week will see Sanil Electric (062040 KS) list, while Akums Drugs and Pharmaceuticals books will open and Ola Electric too might be launched.
  • On the placement front, the past week was relatively quiet after a few hectic weeks.

Sanil Electric IPO Trading – Strong Institutional Demand, Highest Subscription Rate This Year

By Ethan Aw

  • Sanil Electric (062040 KS) raised around US$193m in its Korea IPO, after pricing the deal above the top end of the range at KRW35,000/share.
  • Sanil Electric is a specialized company that manufactures and sells reactors, transformers, railway vehicle parts, and switchboards. As an industrial transformer manufacturer, the company mainly manufactures power and distribution transformers.
  • In this note, we will talk about the demand for the deal and other trading dynamics.

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