Smartkarma Daily Briefs

U.S. Energy (NASDAQ: USEG) is an independent energy company historically focused on the acquisition and development of oil and natural gas producing properties in the U.S. In June 2024, the company acquired acreage in Montana with the goal of extracting and marketing helium products and other industrial gases.
Going forward, the primary focus will be on the development and operation of helium and other industrial gases, along with the development of carbon sequestration capabilities.
The company has no debt and $21.15 million in available liquidity.

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Jan 15

Daily Brief Macro: The Launch of the KRX TMI (Total Market Index) – Korea’s TOPIX Index and more

By Smartkarma Daily Briefs | Daily Briefs, Macro

In today’s briefing:

The Launch of the KRX TMI (Total Market Index) – Korea’s TOPIX Index
CX Daily: Tightening the Rule Book to Make China’s Internet Platforms Fairer
2025: In Like A Dove, Out Like A Hawk
New Year Marks Revival In Indian Synthetic Rubber Market
69.8% Of Our 2024 Calls Made Money
[US Nat Gas Options Weekly 2025/02] Henry Hub Surges on Expectations of Robust Heating Demand
NFP, Bonds Reflect Tight Labour Market, but Trump Disinflation Surprises Awaited
[US Crude Oil Options Weekly 2025/02] WTI Rises for Third Straight Week Due to Supply Disruptions
[SGX Iron Ore Weekly 2025/02] Bearish Sentiments Softening as Vols Trend Lower

The Launch of the KRX TMI (Total Market Index) – Korea’s TOPIX Index

By Douglas Kim

Korea Exchange disclosed the new KRX TMI (Total Market Index) on 13 January. This is a market index that consists of eligible stocks in the entire KOSPI and KOSDAQ markets.
The KRX TMI index is similar to Japan’s TOPIX index. The KRX TMI index is calculated by adopting a free-float market capitalization weighting method.
We provide a list of 20 companies in KOSDAQ that could benefit from the launch of the KRX TMI index.

CX Daily: Tightening the Rule Book to Make China’s Internet Platforms Fairer

By Caixin Global

Internet / Cover Story: Tightening the rule book to make China’s internet platforms fairer China’s internet platform economy is coming under closer scrutiny as a new wave of regulatory action gets underway.
Unlike previous rounds, which focused on curbing platform expansion and monopolistic behavior, this phase is putting the emphasis on setting rules, increasing algorithm transparency and balancing the power dynamics among suppliers, users and platforms.
Law / In Depth: China embarks on reform of 30-year-old arbitration law China established its civil and commercial arbitration system back in 1995, when its Arbitration Law which took effect.

2025: In Like A Dove, Out Like A Hawk

By Phil Rush

Ongoing economic resilience strengthens the conviction in our long-held view that neutral policy rates are high. Rate cuts outside of a recession are usually reversed.
Market pricing aligns with our previously contrarian rate view. As the end of the cutting cycle approaches, pricing should embed the possibility of hikes like in 1998-99.
We expect at least the Fed and BoE to hike their policy rates in 2026, with the debate beginning in 2025 and potentially crystalising in a move later this year.

New Year Marks Revival In Indian Synthetic Rubber Market

By Vinod Nedumudy

Highlights · Auto non-tire and tire sectors stage better show from Dec · Indian SR consumption goes up by 10.5% YoY in FY 2024-25 H1 · Atma Nirbhar Bharat making cushioning effect on imports The Indian Synthetic Rubber (SR) sector is reviving in the New Year after the lull until early December, with downstream tire and auto sector demand picking up, leading to a markup in the prices of certain variants.
The players in the sector are optimistic about the momentum persisting until the end of the financial year in March 2025.
The SBR prices, which were INR 190/kg on November 1, sharply fell to INR 175/kg by December but are picking up in the new year and have crossed INR 180/kg in early January.

69.8% Of Our 2024 Calls Made Money

By Sharmila Whelan

We are optimistic about the outlook for global growth and markets in 2025, despite anticipating turbulence driven by Trump’s policies. Stay overweight US markets, US dollar and Bitcoin. Underweight China.
Our differentiated business cycle framework investing worked. Of the 43 calls made, on global markets and eleven countries/regions, 69.8% were accurate+ in 2024.
We predicted the US soft landing , Trump’s re-election, a strong dollar, the US & bitcoin rallies, the European slowdown and TAIX outperformance.

[US Nat Gas Options Weekly 2025/02] Henry Hub Surges on Expectations of Robust Heating Demand

By Suhas Reddy

For the week ending 10/Jan, U.S. natural gas prices surged by 18.9% led by cold weather forecasts, rising LNG exports, supply disruptions, and declining inventories.
Henry Hub Put/Call volume ratio fell to 1.29 from 1.37 (03/Jan) the previous week as call volumes rose by 40.3% WoW, while put volumes grew by 32.7%.
Henry Hub OI PCR rose to 0.92 from 0.87 compared to last week. Call OI inched up by 5.4% WoW, while put OI increased by 10.5%.

NFP, Bonds Reflect Tight Labour Market, but Trump Disinflation Surprises Awaited

By Prasenjit K. Basu

The labour market is tight, and ISM’s manufacturing and services new orders suggest more economic strength in H1CY25. Consequently, the bond yield curve is likely to steepen further.
Trump’s massive spending (and bureaucratic) cuts will eat into the fiscal deficit (Oct’25 onwards), and deregulation plus early end to Ukraine war will sharply reduce oil prices, pushing inflation down.
QT, and absence of rate cuts in Q1CY25, will reduce core inflation by Q2CY25, allowing three 25bp rate cuts (Jun-Dec’25). Overweight bonds in Q1CY25, equities after mid-Mar’25.

[US Crude Oil Options Weekly 2025/02] WTI Rises for Third Straight Week Due to Supply Disruptions

By Suhas Reddy

WTI futures rose 3.5% for the week ending 10/Jan, driven by tightening U.S. sanctions on Russian crude oil and bullish U.S. economic data.
WTI options Put/Call volume ratio dropped to 0.83 from 1.03 (03/Jan) last week, as call volume surged by 128.3% WoW while put volume increased by 82.9%.
WTI OI PCR rose to 0.94 from 0.93 last week. Call OI climbed up by 7.1% WoW, while put OI rose by 8.5%.

[SGX Iron Ore Weekly 2025/02] Bearish Sentiments Softening as Vols Trend Lower

By Srinidhi Raghavendra

SGX TSI Iron Ore CFR China (62% Fe Fines) Index Futures (“SGX IO Futures”) rose last week, closing $0.4/ton higher by 10/Jan (Fri).
Based on seasonality, SGX IO Futures Feb contract trades 24.6% below its last 5-year average ($128.93/ton).
IO prices gained 3% in the 10 trading days leading to CNY. IO prices rises 4.4% over the next 5 days before shedding 5% over the following five.

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Jan 15

Daily Brief Australia: Avjennings Ltd, Pointerra Ltd, Iron Ore and more

By Smartkarma Daily Briefs | Australia, Daily Briefs

In today’s briefing:

AVJennings (AVJ AU): Ho Bee’s Superior Proposal
US$2m contract extension underlines Pointerra3D benefit
[SGX Iron Ore Weekly 2025/02] Bearish Sentiments Softening as Vols Trend Lower

AVJennings (AVJ AU): Ho Bee’s Superior Proposal

By Research as a Service (RaaS)

Back on the 28th November, AVJennings Ltd (AVJ AU), a reputable home builder in Australia/New Zealand, entered into a deed granting the AVID consortium exclusive confirmatory due diligence.
The AVID consortium, comprising Proprium Capital Partners and AVID Property Group, pitched an NBIO (by way of a Scheme) of A$0.67/share. Singapore’s SC Global (54.5% shareholder) was supportive.
In what appeared to be clean deal, Ho Bee Land Ltd (HOBEE SP) then acquired a 5.39% stake on the 23rd December. Now they’ve made their own NBIO at A$0.70/share.

US$2m contract extension underlines Pointerra3D benefit

RaaS has published a flash comment on 3D spatial data solutions group Pointerra (ASX:3DP) following the announcement that that it has been awarded a US$2.0m (A$3.2m) contract extension by the US Department of Energy (DOE) to the existing programme modelling a range of electric grid resilience investment scenarios by electric utilities.
We view the contract extension, which brings total spend to date by the DOE to US$3.63m, as important validation of Pointerra3D’s benefit to the US electric utility sector.
The company says it expects the programme to be completed by 31 December 2025.

[SGX Iron Ore Weekly 2025/02] Bearish Sentiments Softening as Vols Trend Lower

By Srinidhi Raghavendra

SGX TSI Iron Ore CFR China (62% Fe Fines) Index Futures (“SGX IO Futures”) rose last week, closing $0.4/ton higher by 10/Jan (Fri).
Based on seasonality, SGX IO Futures Feb contract trades 24.6% below its last 5-year average ($128.93/ton).
IO prices gained 3% in the 10 trading days leading to CNY. IO prices rises 4.4% over the next 5 days before shedding 5% over the following five.

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Jan 15

Daily Brief South Korea: Miwon Commercial, Samsung Electronics and more

By Smartkarma Daily Briefs | Daily Briefs, South Korea

In today’s briefing:

KRX H1 SSF Reshuffle: Play Setup from Last Round’s Learning Curve
Samsung Electronics’ Key Inflection Point: Lee Jae-Yong’s Final Appeal Ruling on February 3
Samsung Electronics: Trading Strategy Post Another Inheritance Tax Sale

KRX H1 SSF Reshuffle: Play Setup from Last Round’s Learning Curve

By Sanghyun Park

Last time, price action showed up a week early, suggesting market makers are getting ahead, likely due to learning effects.
This round’s a letdown—no KOSDAQ names and fewer plays. Still, lower-volume KOSPI names showed solid price action correlation in the last reshuffle.
This round, focus on low-volume KOSPI names, enter 5 days before the listing, and exit just before it drops, using the learning curve from the last reshuffle.

Samsung Electronics’ Key Inflection Point: Lee Jae-Yong’s Final Appeal Ruling on February 3

By Sanghyun Park

Some speculate Samsung might delay the value-up announcement until after the February 3 ruling, using it strategically to influence the verdict and align with the appeal’s outcome.
Market chatter even surrounds Samsung’s HBM test delays with NVIDIA, with some linking it to Lee Jae-yong’s February 3 appeal ruling—though it seems more like speculative conspiracy.
If Lee Jae-yong wins his appeal on February 3, it could trigger key events like value-up disclosure and HBM pass, significantly impacting Samsung’s short-term price action and positions.

Samsung Electronics: Trading Strategy Post Another Inheritance Tax Sale

By Douglas Kim

In the past several years, one of the biggest risk factors on Samsung Electronics and other Samsung Group affiliates has been the huge inheritance tax payments by the Lee family.
Despite the weak share price performances of the four major Samsung Group affiliates, their consolidated equity increased by 31.4% on average from end of 2019 to end of 3Q 2024.
Once Lee family pays off the fifth installment in 2025, the market could look upon this situation more favorably due to reduced overhang associated with additional future inheritance tax payments.

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Jan 15

Daily Brief Singapore: Marco Polo Marine, SGX Rubber Future TSR20 and more

By Smartkarma Daily Briefs | Daily Briefs, Singapore

In today’s briefing:

Company Spotlight: Marco Polo Marine
New Year Marks Revival In Indian Synthetic Rubber Market

Company Spotlight: Marco Polo Marine

By Geoff Howie

Company Spotlight: Marco Polo Marine

New Year Marks Revival In Indian Synthetic Rubber Market

By Vinod Nedumudy

Highlights · Auto non-tire and tire sectors stage better show from Dec · Indian SR consumption goes up by 10.5% YoY in FY 2024-25 H1 · Atma Nirbhar Bharat making cushioning effect on imports The Indian Synthetic Rubber (SR) sector is reviving in the New Year after the lull until early December, with downstream tire and auto sector demand picking up, leading to a markup in the prices of certain variants.
The players in the sector are optimistic about the momentum persisting until the end of the financial year in March 2025.
The SBR prices, which were INR 190/kg on November 1, sharply fell to INR 175/kg by December but are picking up in the new year and have crossed INR 180/kg in early January.

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Jan 15

Daily Brief United States: S&P 500 INDEX, US Energy , Guess? Inc, Natural Gas, Clean Energy Technologies , Abercrombie & Fitch Co Cl A, NEXTracker , Silicon Laboratories, Soligenix , Lantheus Holdings and more

By Smartkarma Daily Briefs | Daily Briefs, United States

In today’s briefing:

S&P 500, Nasdaq 100 Testing Bull Flag Supports; Bullish Breadth Divergences; Buy the Pullback
USEG: U.S. Energy acquires additional industrial gas acreage in the Kevin Dome structure in Montana. The company also announced the divesture of certain oil & gas properties in Texas.
GES: ICR Conference Notes: Focused on Winning LT: Reiterate Buy and $23 PT
[US Nat Gas Options Weekly 2025/02] Henry Hub Surges on Expectations of Robust Heating Demand
Sustainable Investing Surveyor – Focus on Clean Energy Technologies, Inc.
AKA: ICR Conference Notes: A Holiday Winner; Raising Projections, Reiterate Buy
Nextracker Inc.: The Expansion in International Markets & Other Major Drivers
Silicon Labs: An Insight Into Its Recent Design Win Ramps & Market Share Growth!
SNGX: Additional Positive Outcomes in Investigator-Initiated Study of HyBryte in CTCL
LNTH: LMI Acquisition and NeuraCeq

S&P 500, Nasdaq 100 Testing Bull Flag Supports; Bullish Breadth Divergences; Buy the Pullback

By Joe Jasper

Rising DXY, Treasury yields, and now energy commodities breaking out (Bloomberg Commodity index $DJP and WTI crude oil) suggests upside is likely to be capped, but…
…we still continue to see many other risk-on signals. As a result, we view this pullback as a buying opportunity, with all the major indexes testing/holding at support
Looking for support on the S&P 500 at 5850, the 100-day MA (currently 5820), 5765-5770, and 5600-5670. As long as the S&P 500 remains above 5600-5670, our outlook remains bullish

USEG: U.S. Energy acquires additional industrial gas acreage in the Kevin Dome structure in Montana. The company also announced the divesture of certain oil & gas properties in Texas.

By Small Cap Consumer Research

U.S. Energy (NASDAQ: USEG) is an independent energy company historically focused on the acquisition and development of oil and natural gas producing properties in the U.S. In June 2024, the company acquired acreage in Montana with the goal of extracting and marketing helium products and other industrial gases.
Going forward, the primary focus will be on the development and operation of helium and other industrial gases, along with the development of carbon sequestration capabilities.
The company has no debt and $21.15 million in available liquidity.

GES: ICR Conference Notes: Focused on Winning LT: Reiterate Buy and $23 PT

We are reiterating our Buy rating, $23 price target and projections for GUESS?
Inc. after meeting with management at the 2025 ICR Conference.
We believe management is highly focused on returning Guess?

[US Nat Gas Options Weekly 2025/02] Henry Hub Surges on Expectations of Robust Heating Demand

By Suhas Reddy

For the week ending 10/Jan, U.S. natural gas prices surged by 18.9% led by cold weather forecasts, rising LNG exports, supply disruptions, and declining inventories.
Henry Hub Put/Call volume ratio fell to 1.29 from 1.37 (03/Jan) the previous week as call volumes rose by 40.3% WoW, while put volumes grew by 32.7%.
Henry Hub OI PCR rose to 0.92 from 0.87 compared to last week. Call OI inched up by 5.4% WoW, while put OI increased by 10.5%.

Sustainable Investing Surveyor – Focus on Clean Energy Technologies, Inc.

By Water Tower Research

The WTR Sustainable Index was down 3.1% W/W versus the S&P 500 Index (down 1.9%), the Russell 2000 Index (down 3.5%), and the Nasdaq Index (down 2.2%).
Energy Technology (14.0% of the index) was down 3.8%, while Industrial Climate and Ag Technology (46.6% of the index) was down 1.8%, ClimateTech Mining was down 2.9%, and Advanced Transportation Solutions (21.4% of index) was down 5.3%.
Top 10 Performers: SPI, BNRG, AZRE, ARVL, TGEN, ARBE, EGT, GP, GCEI, PSI

AKA: ICR Conference Notes: A Holiday Winner; Raising Projections, Reiterate Buy

By Small Cap Consumer Research

We are reiterating our Buy rating and $30 price target and raising our projections for a.k.a. Brands after the company updated 4Q24 guidance, removed the interim title from CEO Ciaran Long, announced the expansion of Petal & Pup into all Nordstrom doors, and presented at the ICR Conference.
With the majority of the 4Q upside catalysts flowing into 2025, the company on track to launch their first New York City store in 1H25 and the potential for stabilization in the still significant Australian market, we believe our slightly raised 2025 projections remain conservative, and we reiterate or Buy rating and $30 price target for AKA.

Nextracker Inc.: The Expansion in International Markets & Other Major Drivers

By Baptista Research

Nextracker’s recent earnings highlight a mix of positive developments and some areas of caution for potential investors in the solar tracking industry.
The company has reported another strong quarter with double-digit revenue growth for the seventh consecutive time, underscoring robust operational execution and strong demand for its products across various markets.
With a significant revenue increase of 29% year-over-year for the first half of fiscal 2025, Nextracker has demonstrated its ability to capture market share effectively.

Silicon Labs: An Insight Into Its Recent Design Win Ramps & Market Share Growth!

By Baptista Research

Silicon Laboratories delivered mixed results for the third quarter of fiscal 2024.
The company’s revenue reached $166 million, which marked a 14% sequential increase, although it was down 18% year-over-year due to persisting issues related to excess inventory among distributors and end customers.
Despite this decline, Silicon Laboratories managed to surpass the midpoint of its revenue guidance, signaling some resilience in its business operations amidst broader market challenges.

SNGX: Additional Positive Outcomes in Investigator-Initiated Study of HyBryte in CTCL

On January 14, 2025, Soligenix, Inc. (SNGX) announced additional interim data from the open-label, investigator-initiated study (IIS) testing HyBryte treatment in patients with cutaneous T cell lymphoma (CTCL) for up to 12 months.
Thus far, nine patients have been enrolled and treated with HyBryte for up to 54 weeks.
Over 80% (5/6 that have completed at least 18 weeks of therapy) have already achieved treatment success, which is defined in the study protocol as a =50% improvement in the cumulative mCAILS.

LNTH: LMI Acquisition and NeuraCeq

Zacks Small-Cap Research Note for Lantheus Holdings, Inc. (LNTH)

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Jan 15

Daily Brief India: Apcotex Industries, IndiQube Spaces Ltd, Suven Pharmaceuticals, SGX Rubber Future TSR20 and more

By Smartkarma Daily Briefs | Daily Briefs, India

In today’s briefing:

The Beat Ideas: Apcotex Industries Ltd, Beaten Down Value Pick
IndiQube Spaces Ltd Pre-IPO Tearsheet
Suven Pharmaceuticals (SUVENPHA IN): M&A to Expand Technical Capabilities and Enhance Scale
New Year Marks Revival In Indian Synthetic Rubber Market

The Beat Ideas: Apcotex Industries Ltd, Beaten Down Value Pick

By Sudarshan Bhandari

Apcotex Industries (APCO IN) promoted by Ex-Asian Paints MD Mr. Atul Choksey, is a leading manufacturer of synthetic rubber and latex in India.
Despite achieving record sales volume in H1 FY25, Apcotex experienced a decline in EBITDA margins due to RM pricing and Chinese competition.
Apcotex Industries (APCO IN) is at its worst possible margins and applied for anti-dumping duty for its product.

IndiQube Spaces Ltd Pre-IPO Tearsheet

By Rosita Fernandes

IndiQube Spaces Ltd (1628202D IN) (ISL) is looking to raise about US$100m in its upcoming India IPO. The bookrunners for the deal are ICICI and JM fin.
IndiQube Spaces Limited (ISL) is a managed workplace solutions provider offering technological workplace solutions.
According to CBRE Report, ISL is among the leading operators in Bengaluru as of Jun 24.

Suven Pharmaceuticals (SUVENPHA IN): M&A to Expand Technical Capabilities and Enhance Scale

By Tina Banerjee

Suven Pharmaceuticals (SUVENPHA IN) is acquiring56% equity share capital of ADC/XDC-focused CRDMO, NJ Bio for $64M, strengthening position in a high growth market.
In June 2024, Suven announced the acquisition of a majority stake in an oligonucleotide focused CDMO player, Sapala Organics, thereby adding another high-growth complex technology to its CDMO business.
Recently, shareholders have approved Suven’s merger with Cohance Lifesciences. Cohance has global leadership in select low-mid volume molecules as well as unique capabilities in the form of its ADC platform.

New Year Marks Revival In Indian Synthetic Rubber Market

By Vinod Nedumudy

Highlights · Auto non-tire and tire sectors stage better show from Dec · Indian SR consumption goes up by 10.5% YoY in FY 2024-25 H1 · Atma Nirbhar Bharat making cushioning effect on imports The Indian Synthetic Rubber (SR) sector is reviving in the New Year after the lull until early December, with downstream tire and auto sector demand picking up, leading to a markup in the prices of certain variants.
The players in the sector are optimistic about the momentum persisting until the end of the financial year in March 2025.
The SBR prices, which were INR 190/kg on November 1, sharply fell to INR 175/kg by December but are picking up in the new year and have crossed INR 180/kg in early January.

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Jan 15

Daily Brief China: Shanghai Henlius Biotech , Foshan Haitian Flavouring & Food, J&T Global Express , Shimao Property Holdings, Yuexiu Property , Jiangsu Hengrui Medicine, UMP Healthcare and more

By Smartkarma Daily Briefs | China, Daily Briefs

In today’s briefing:

Henlius (2696 HK): LVC Sits On A Blocking Stake. And Me (Maybe) Eating Humble Pie
Henlius (2696 HK): Hurtling Towards a Likely Deal Break
Foshan Haitian Flavouring & Food (603288 CH): Index Inclusion Post H-Share Listing
ZTO FY24 & J&T Global Q424 Volume Growth Rates Suggest Painful Price-Volume Tradeoffs Continue
Asia Real Estate Tracker (14-Jan-2025): NTT secures banks for $1B SG data centre REIT.
Lucror Analytics – Morning Views Asia
Pre-IPO Jiangsu Hengrui Medicine – High Valuation Cannot Be Justified
UMP Healthcare (722 HK): Earnings Preview for H1 FY25

Henlius (2696 HK): LVC Sits On A Blocking Stake. And Me (Maybe) Eating Humble Pie

I was wrong. Loyal Valley Capital (LVC) have stopped buying Shanghai Henlius (2696 HK) – or have not bought since reaching a blocking stake of 7.8295% on the 9th January.
LVC could either use that stake as leverage to negotiate with the Offeror on the scrip terms. Or blow up the deal and pick up shares after the deal breaks
OR perhaps, as per my initial impression, LVC tenders. And they may still do that. It should be this straightforward; but the fact that it is not raises questions.

Henlius (2696 HK): Hurtling Towards a Likely Deal Break

The vote on Fosun Pharma’s HK$24.60 offer for Shanghai Henlius Biotech (2696 HK) is on 22 January. The gross spread has ballooned to 21.8%, which suggests a deal break.
I previously stated that LVC’s trading behaviour over the coming days will indicate its voting intentions. Unfortunately, this behaviour suggests a high likelihood of blocking the vote.
Fosun Pharma has two potential options to secure LVC’s backing: increase the share alternative cap or introduce a rollover option. Both have challenges and are, therefore, not viable options.

Foshan Haitian Flavouring & Food (603288 CH): Index Inclusion Post H-Share Listing

Foshan Haitian Flavouring & Food (603288 CH) has filed for a listing on the HKEX (388 HK) and reports indicate that the raise will be at least US$1.5bn.
In line with the Midea Group (300 HK) and S.F. Holding (6936 HK) H-share listings, the discount on the H-shares could be in the 20-25% range.
The stock will not get Fast Entry to any indices but there should be inclusions at subsequent rebalances, especially once the cornerstone investor lock-up expires.

ZTO FY24 & J&T Global Q424 Volume Growth Rates Suggest Painful Price-Volume Tradeoffs Continue

By Daniel Hellberg

Q424 volume growth for J&T’s two main segments accelerated — but how’d they do it?
In Chinese domestic segment last year, J&T gained share vs market leader ZTO Express
We believe J&T’s volatile growth patterns could indicate painful price-volume tradeoffs

Asia Real Estate Tracker (14-Jan-2025): NTT secures banks for $1B SG data centre REIT.

By Asia Real Estate Tracker

NTT obtains $1B for a Singapore data center REIT, supporting expansion and growth in the region.
Japan’s Open House acquires Bolder Presence in a $390M stake buy, increasing investment in the company.
Shimao lowers Sheraton HK Airport hotel price by 30% to attract more customers, adjusting to market demand.

Lucror Analytics – Morning Views Asia

By Leonard Law, CFA

In today’s Morning Views publication we comment on developments of the following high yield issuers: Yuexiu Property, Seazen Group, Vedanta Resources
In the US, the UST curve bear steepened slightly, amid a rise in oil price and a heavy pipeline of corporate bond issuances. The yield on the 2Y UST was unchanged at 4.38%, while that on the 10Y UST was up 2 bps at 4.78%. Equities were mixed.
The S&P 500 rebounded 0.2% from last Friday’s selloff to close at 5,836. That said, the Nasdaq fell 0.4% to 19,088, driven by a decline in large tech stocks.

Pre-IPO Jiangsu Hengrui Medicine – High Valuation Cannot Be Justified

By Xinyao (Criss) Wang

Hengrui plans to IPO in Hong Kong, but it hasn’t yet completed the business transformation from generic drugs to innovative drugs, and is still facing the negative impact of VBP.
The key point is whether the innovative drug business has sustained high enough growth rate to offset the decline in generic drug business so as to support the high valuation.
Hengrui is overvalued in A-Share. We think Hengrui’s valuation should be lower than that of BeiGene (6160 HK) and Hansoh Pharmaceutical Group (3692 HK) in Hong Kong stock market.

UMP Healthcare (722 HK): Earnings Preview for H1 FY25

By Sameer Taneja

UMP Healthcare (722 HK) will report its results in late February. We estimate low single-digit revenue growth of 3% YoY, in line with the past two semiannuals.
We flagged cost-cutting initiatives in UMP Healthcare (722 HK): Postcard From Hong Kong and Webinar Updates, which would result in 25% YoY profit growth.
Trading at 6.4x FY25e PE, with a 10% dividend yield and 85% of the market capitalization in net cash and investments, the stock has the potential to double.

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Jan 15

Daily Brief Japan: Jamco Corp, Tokyo Metro, Shift Inc, Money Forward , Mani Inc, Sapporo Holdings, WingArc1st Inc, J Com Holdings, Nakamoto Packs and more

By Smartkarma Daily Briefs | Daily Briefs, Japan

In today’s briefing:

Bain To Launch an MBO for Aircraft Maintenance Co JAMCO (7408) ¥1800 Is Too Cheap
Tokyo Metro (9023 JP): Index Inclusions – Light at the End of the Tunnel
JAMCO (7408 JP): Bain’s Tender Offer Is Light but Likely a Done Deal
Shift Beats Q1 Consensus by 30%
Money Forward (3994) | SaaS Growth Engine Shows Resilience
Mani Inc (7730 JP): Dental Loosing Shine In China; Margins Eroding; FY25 Guidance Reiterated
The Good News Is that Companies May Change in Less than 17 Years!
WingArc1st Inc (4432 JP): Q3 FY02/25 flash update
J Com Holdings (2462 JP): 1H FY05/25 flash update
Nakamoto Packs (7811 JP): Q3 FY02/25 flash update

Bain To Launch an MBO for Aircraft Maintenance Co JAMCO (7408) ¥1800 Is Too Cheap

By Travis Lundy

Bain is buying out JAMCO (a long time ago called Itochu Aircraft Maintenance) from Itochu, ANA, Bain’s own portfolio company, and the public. It’s an expected deal. A done deal.
It is being done too cheaply. The price is 6x next year’s expected EBIT. This year expected ROE is 22%. Next year could be double that.
And the company has more in non-operating financial assets than its net equity. And a lot of really old land assets are not marked up. Just a shame.

Tokyo Metro (9023 JP): Index Inclusions – Light at the End of the Tunnel

Tokyo Metro (9023 JP) listed on 23 October and was added to the TSE Tokyo Price Index TOPIX (TPX INDEX) at the close on 28 November.
Tokyo Metro (9023 JP) was not expected to be added to one global index (it was not added), while it was expected to be added to the other (and missed).
The stock could be added to one global index in February (its close!) and to the other in June (pretty much a sure thing).

JAMCO (7408 JP): Bain’s Tender Offer Is Light but Likely a Done Deal

Jamco Corp (7408 JP) announced a preconditional tender offer from Bain Capital at JPY1,800 per share, a 27.8% premium to the last close.
The offer, which is preconditional on regulatory approvals and will open in mid-February, is attractive compared to historical trading ranges.
On the other hand, the offer is light as it is below the midpoint of the IFA DCF valuation range. However, the modest required acceptance rate suggests a done deal.

Shift Beats Q1 Consensus by 30%

By Michael Allen

Shift reported a 95% increase in OP, to ¥3.2bn, compared to consensus estimate of ¥2.6bn on January 14 after the close.
Just under 5 months ago, we suggested the stock was about 45% undervalued. It is up 40%.
We still expect 20% annual growth through 2030. This is no longer a turnaround stock, but now one of the most solid growth stocks in the market.

Money Forward (3994) | SaaS Growth Engine Shows Resilience

By Mark Chadwick

Money Forward, Japan’s leading SaaS provider, reported strong results for its fiscal year ending November 2024: Sales +33% YoY to ¥40.4 billion
FY11/25 EBITDA guidance of ¥3.5 billion significantly lags consensus expectations of ¥6 billion.
The disappointing EBITDA guidance may trigger further selling, but there is no material change to the company’s long-term fundamentals. Time to be bullish

Mani Inc (7730 JP): Dental Loosing Shine In China; Margins Eroding; FY25 Guidance Reiterated

By Tina Banerjee

Mani Inc (7730 JP) Q1FY25 revenue rose 8% YoY, mainly driven by surgical and eyeless needles segments, and favorable foreign exchange. However, profitability declined year-over-year.
Despite the underperformance of dental segment, management reiterated FY25 guidance. Dental segment contributes more than 30% of total revenue.
Mani shares plunged 20% since it published its Q1 results. Investors should avoid Mani due to its uncertain revenue outlook and deteriorating profitability in short-term.

The Good News Is that Companies May Change in Less than 17 Years!

By Aki Matsumoto

After 17 years of failure to change, Sapporo’s policy change was triggered by the fact that sales in beer business were beginning to recover after the long tunnel of deflation.
Regulators, weighed down by the growing number of companies with low profitability and declining competitiveness, want to change the situation, even if it means leveraging the power of activist investors.
Many companies bottomed out due to exiting the deflationary economy, and TSE requests prohibit companies from ignoring investors’ proposals, which makes it easier for companies to change.

WingArc1st Inc (4432 JP): Q3 FY02/25 flash update

By Shared Research

Revenue for cumulative Q3 FY02/25 was JPY21.6bn, operating profit JPY6.5bn, net income JPY4.7bn, EBITDA JPY7.6bn.
BDS sales revenue rose 12.7% YoY to JPY14.2bn, with cloud services growing 17.3% YoY, invoiceAgent JPY1.7bn.
Full-year FY02/25 forecast revised to revenue JPY28.5bn, operating profit JPY8.1bn, EBITDA JPY9.6bn, profit JPY5.9bn.

J Com Holdings (2462 JP): 1H FY05/25 flash update

By Shared Research

Operating profit is highest in Q4 due to subsidies in Child-Rearing Support Service and lowest in Q2.
Revenue increased in Child-Rearing Support and Nursing Care-Related Services, but declined in Comprehensive Human Resources Service.
LIKE opened two new facilities in FY05/25, with total childcare facilities reaching 415 as of October 2024.

Nakamoto Packs (7811 JP): Q3 FY02/25 flash update

By Shared Research

Cumulative Q3 FY02/25 results: Revenue JPY36.8bn (+9.1% YoY), Gross profit JPY6.6bn (+28.1% YoY), Operating profit JPY2.4bn (+47.9% YoY).
Full-year FY02/25 forecast revised: Revenue JPY48.0bn (+8.2% YoY), Operating profit JPY2.8bn (+53.2% YoY), Net income JPY1.9bn (+79.7% YoY).
Dividend forecast increased: Annual dividend JPY66.0 per share, payout ratio 31.0%, maintaining dividend for eight consecutive fiscal years.

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Jan 15

Most Read: Kokusai Electric , Jamco Corp, Shanghai Henlius Biotech , Tokyo Metro, Miwon Commercial, Foshan Haitian Flavouring & Food and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

Henlius (2696 HK): LVC Won’t Block. Buy Here & On Weakness
Nikkei 225 Index Rebalance Preview (Mar 2025): SHIFT Splits; Updated Ranking, Capping & Funding
Henlius (2696 HK): Test of Nerves Awaiting LVC’s Next Move
Kokusai Electric (6525) – Upcoming Lockup Expiry And BIG Index Demand
Bain To Launch an MBO for Aircraft Maintenance Co JAMCO (7408) ¥1800 Is Too Cheap
Henlius (2696 HK): LVC Sits On A Blocking Stake. And Me (Maybe) Eating Humble Pie
Henlius (2696 HK): Hurtling Towards a Likely Deal Break
Tokyo Metro (9023 JP): Index Inclusions – Light at the End of the Tunnel
KRX H1 SSF Reshuffle: Play Setup from Last Round’s Learning Curve
Foshan Haitian Flavouring & Food (603288 CH): Index Inclusion Post H-Share Listing

Henlius (2696 HK): LVC Won’t Block. Buy Here & On Weakness

Ahead of Shanghai Henlius Biotech (2696 HK)‘s EGM and Court Meeting on the 22 January, the focus has shifted to Loyal Valley Capital (LVC)’s continued buying in the market.
After the close of market last Friday, LVC held 7.8295%, above the 7.826% blocking stake. That % was as at 9th January. I assume LVC are still buying.
Yet if you analyse how LVC has traded in and out of Henlius, they are not in it to block. They’re in for the back-end scrip option.

Nikkei 225 Index Rebalance Preview (Mar 2025): SHIFT Splits; Updated Ranking, Capping & Funding

The review period for the Nikkei 225 Index March rebalance ends in 3 weeks. There could be one outright change and one or two others driven by sector balance.
Shift Inc (3697 JP) will have a 15:1 stock split next week and that puts the stock in the list of potential inclusions over the next couple of rebalances.
The recent drop in Fast Retailing (9983 JP)‘s stock price will lead to a single step drop in the PAF. That means less passive selling and a smaller funding buy.

Henlius (2696 HK): Test of Nerves Awaiting LVC’s Next Move

The vote on Fosun Pharma’s HK$24.60 offer for Shanghai Henlius Biotech (2696 HK) is on 22 January. The gross spread ballooned today due to LVC’s amassing a blocking stake.
There are valid arguments for LVC to block the vote or to support the offer. LVC’s trading behaviour over the coming days will point to its voting intentions.
I continue to believe that LVC will support the offer. At the current price and for a 15 February payment, the gross/annualised spread is 9.1%/160%.

Kokusai Electric (6525) – Upcoming Lockup Expiry And BIG Index Demand

By Travis Lundy

Kokusai Electric (6525 JP) was IPOed in September 2023. The stock was cheap. It rose sharply, tripling in 9 months. At the ATH, the pre-IPO owners launched a HUGE secondary.
It was like a second IPO. The stock dipped, rallied, plummeted into pricing. Stayed there for two days, and in 6 months, the shares have halved.
Lockup expiry is next week, and there is a likely large index event in ~10 weeks.

Bain To Launch an MBO for Aircraft Maintenance Co JAMCO (7408) ¥1800 Is Too Cheap

By Travis Lundy

Bain is buying out JAMCO (a long time ago called Itochu Aircraft Maintenance) from Itochu, ANA, Bain’s own portfolio company, and the public. It’s an expected deal. A done deal.
It is being done too cheaply. The price is 6x next year’s expected EBIT. This year expected ROE is 22%. Next year could be double that.
And the company has more in non-operating financial assets than its net equity. And a lot of really old land assets are not marked up. Just a shame.

Henlius (2696 HK): LVC Sits On A Blocking Stake. And Me (Maybe) Eating Humble Pie

I was wrong. Loyal Valley Capital (LVC) have stopped buying Shanghai Henlius (2696 HK) – or have not bought since reaching a blocking stake of 7.8295% on the 9th January.
LVC could either use that stake as leverage to negotiate with the Offeror on the scrip terms. Or blow up the deal and pick up shares after the deal breaks
OR perhaps, as per my initial impression, LVC tenders. And they may still do that. It should be this straightforward; but the fact that it is not raises questions.

Henlius (2696 HK): Hurtling Towards a Likely Deal Break

The vote on Fosun Pharma’s HK$24.60 offer for Shanghai Henlius Biotech (2696 HK) is on 22 January. The gross spread has ballooned to 21.8%, which suggests a deal break.
I previously stated that LVC’s trading behaviour over the coming days will indicate its voting intentions. Unfortunately, this behaviour suggests a high likelihood of blocking the vote.
Fosun Pharma has two potential options to secure LVC’s backing: increase the share alternative cap or introduce a rollover option. Both have challenges and are, therefore, not viable options.

Tokyo Metro (9023 JP): Index Inclusions – Light at the End of the Tunnel

Tokyo Metro (9023 JP) listed on 23 October and was added to the TSE Tokyo Price Index TOPIX (TPX INDEX) at the close on 28 November.
Tokyo Metro (9023 JP) was not expected to be added to one global index (it was not added), while it was expected to be added to the other (and missed).
The stock could be added to one global index in February (its close!) and to the other in June (pretty much a sure thing).

KRX H1 SSF Reshuffle: Play Setup from Last Round’s Learning Curve

By Sanghyun Park

Last time, price action showed up a week early, suggesting market makers are getting ahead, likely due to learning effects.
This round’s a letdown—no KOSDAQ names and fewer plays. Still, lower-volume KOSPI names showed solid price action correlation in the last reshuffle.
This round, focus on low-volume KOSPI names, enter 5 days before the listing, and exit just before it drops, using the learning curve from the last reshuffle.

Foshan Haitian Flavouring & Food (603288 CH): Index Inclusion Post H-Share Listing