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Smartkarma Daily Briefs

Jun 15
0

Daily Brief Industrials: Helios Techno Holding, CoreCivic , Norcros PLC, Skywest Inc and more

By | Daily Briefs, Industrials

In today’s briefing:

  • Helios Techno Holding (6927) – RS Won’t Bid Higher, Market Sees Value
  • CXW: Revising Estimates Believe CXW Relationship with ICE Remains Strong
  • Norcros – Robust performance, improving outlook
  • Skywest Inc (SKYW) – Friday, Mar 15, 2024

Helios Techno Holding (6927) – RS Won’t Bid Higher, Market Sees Value

By Travis Lundy

  • Today at noon JST, Rs Technologies (3445 JP) released an announcement on TDNet, “Our policy regarding the tender offer for Helios Techno Holding Co., Ltd. shares”
  • In it, they indicated that the price offered – ¥825/share – is a price which “fully returns to general shareholders the increased enterprise value that will result from [transaction] synergies.”
  • They acknowledge the market price is trading higher than the TOB Price, but say they have no plans to raise the Tender Offer Price. So now what? It depends.

CXW: Revising Estimates Believe CXW Relationship with ICE Remains Strong

By Zacks Small Cap Research

  • The contract termination was driven primarily by costs, according to the WSJ.
  • Unlike most CXW ICE contracts, the center has been operated under a costlier model because it was initially opened in 2014 to house families, then was transitioned in 2021 to detention primarily of individual adults.
  • Despite the expected short-term challenge of the contract termination, longer term we expect rising demand from ICE under the traditional detention model.

Norcros – Robust performance, improving outlook

By Edison Investment Research

Norcros’s FY24 results highlight its resilience in the face of tough markets, but we continue to believe that the outlook is improving in both of its core markets, the UK and South Africa. Despite the improving outlook we have maintained our revenue and profit forecasts and 251p/share valuation post the results, with the company trading on an undemanding P/E rating of 6.6x. However, it is worth highlighting the scale of the opportunity on offer to Norcros, which was illustrated at the recent capital markets day.

Skywest Inc (SKYW) – Friday, Mar 15, 2024

By Value Investors Club

  • Regional airlines like SkyWest were established to operate connecting routes under contracts with major airlines
  • SkyWest’s efficient operations and strong relationships with major carriers have made it a dominant player in the regional airline market
  • The company’s financial success and potential for future growth indicate a positive outlook for the coming years

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.

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Jun 15
0

Daily Brief Energy/Materials: EcoPro Materials, Enchem and more

By | Daily Briefs, Energy & Materials Sector

In today’s briefing:

  • Another Block Deal Sale of Ecopro Materials
  • Clarifying BRV’s Post-Block Deal Lockup Conditions Involving Ecopro Materials
  • Block Deal Sale of 3.6% Shares of Enchem
  • Enchem Placement- Easily Digestible but a Punt at Best

Another Block Deal Sale of Ecopro Materials

By Douglas Kim

  • Shares of EcoPro Materials are down 16% today to 112,300 won, due to another block deal sale of by BRV Capital in the after hours trading on 13 June.
  • After the second block deal sale on 14 June, BRV’s stake declined further from 21.2% to 18.2%. 
  • This block deal sale at a big discount is likely to raise overhang concerns about further block deal sales by BRV Capital in the coming months/years.

Clarifying BRV’s Post-Block Deal Lockup Conditions Involving Ecopro Materials

By Sanghyun Park

  • In Korea, the lockup period for block deals is set by the seller and underwriters, not by law, and can be adjusted if both parties agree.
  • BRV obtained consent from Goldman, UBS, and KB for a second block deal after assessing that many initial buyers had sold their shares.
  • Understanding this lockup structure provides key insights into predicting when the next block deal might occur.

Block Deal Sale of 3.6% Shares of Enchem

By Douglas Kim

  • After the market close on 14 June, it was reported that Woori PE/other investors will be selling 705,384 shares of Enchem in a block deal, representing 3.6% of outstanding shares. 
  • The block deal discount rate ranges from 6.9% to 8.92%, resulting in potential block deal sale price of 270,500 won to 276,500 won.
  • We would not subscribe to this block deal and we are concerned about the valuations of Enchem after a sharp share price appreciation this year.

Enchem Placement- Easily Digestible but a Punt at Best

By Ethan Aw

  • Woori PE, NH PE and KDB Capital seek to raise around KRW195bn (US$141m) through a secondary block deal, selling 0.71m shares (3.64% of TSO) of Enchem (348370 KS).
  • The deal is a small one to digest at only 1.1 days of three-month ADV. 
  • In this note, we will talk about the placement and run the deal through our ECM framework.

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Jun 15
0

Daily Brief Financials: S&P BSE SENSEX Index, NIFTY Index, Hang Seng Index, Good Com Asset, Lincoln National, Old Republic Intl, Primerica Inc, Radian Group, AB&Company Co Ltd, Unum Group and more

By | Daily Briefs, Financials

In today’s briefing:

  • FII’s High Short Positions on Indian Markets : Crisis or Opportunity
  • #1 Forensic Foresight: SEBI Warns ICICI Bank, Suzlon Director Resign, Wardwizard Disguise
  • EQD | Is the HSI Correction Going to Continue? (Yes, For 1-2 Weeks)
  • Good Com Asset (3475 JP): 1H FY10/24 flash update
  • Lincoln National Corporation: Initiation of Coverage – A Tale Of Strategic Repositioning & Improving Cost Management! – Major Drivers
  • Old Republic International Corporation: Initiation of Coverage – Can Its Strategic Technological Investments Give It A Competitive Edge? – Major Drivers
  • Primerica Inc.: Initiation of Coverage – These Are The 4 Fundamental Factors Driving Their Performance! – Financial Forecasts
  • Radian Group Inc.: Initiation of Coverage – Improved Default Management and Cure Rates & Other Major Drivers
  • AB&Company Co Ltd (9251 JP): 1H FY10/24 flash update
  • Unum Group: Initiation of Coverage – Expansion Of Service Capabilities & 3 Critical Growth Drivers

FII’s High Short Positions on Indian Markets : Crisis or Opportunity

By Nimish Maheshwari

  • It is important for investors to not get swayed by popular narratives and instead look at the data and historical patterns to make informed decisions. 
  • While a large short position by FIIs may seem concerning, it could actually signal a potential opportunity for positive returns in the Nifty 50 index. 
  • By understanding the reasons behind this contrarian move and the historical trends, investors can navigate bet when FII’s short positions are high.

#1 Forensic Foresight: SEBI Warns ICICI Bank, Suzlon Director Resign, Wardwizard Disguise

By Nimish Maheshwari

  • Forensic Forsight will be a bi-monthly report covering Indian companies having corporate governance issues guiding investors on strengthening their ESG investment framework
  • The issue covers SEBI warning against ICICI Bank for manipulation in delisting process of its key subsidiary.
  • The report also covers how a EV company disguises shareholders while an Indian renewable energy company is under scrutiny owing to Independent Director Resignation

EQD | Is the HSI Correction Going to Continue? (Yes, For 1-2 Weeks)

By Nico Rosti

  • The Hang Seng Index correction has restarted this week, after a brief 1-week bounce.
  • The index may continue to downtrend for another 1-2 weeks, then a reversal should come and the uptrend should restart.
  • Look at the price support area in the 17500-17000 range, because that is where my model indicates the highest chance of LONG reversal.

Good Com Asset (3475 JP): 1H FY10/24 flash update

By Shared Research

  • Sales increased by 6.0% YoY to JPY11.4bn, but net income attributable to owners decreased by 54.1% YoY to JPY359mn.
  • Wholesale Sales and Retail Sales segments saw YoY profit drops, while Real Estate Management posted YoY increases in both sales and profit.
  • The company sold 15 condo buildings with 369 units (+11.5% YoY) and purchased nine condo buildings with 675 units (-61.2% YoY).

Lincoln National Corporation: Initiation of Coverage – A Tale Of Strategic Repositioning & Improving Cost Management! – Major Drivers

By Baptista Research

  • Lincoln Financial Group delivered a robust performance in the first quarter of 2024, attributed to strategic repositioning and growth across its various business segments.
  • The company reported strong results in its Annuities, Group Protection, Retirement Plan Services, and Life business areas.
  • Key highlights include a significant earnings quarter for the Annuities division and strong year-over-year earnings growth in Group Protection.

Old Republic International Corporation: Initiation of Coverage – Can Its Strategic Technological Investments Give It A Competitive Edge? – Major Drivers

By Baptista Research

  • Old Republic International Corporation disclosed its first-quarter 2024 financial results, showcasing a mixed performance with strengths in General Insurance contrasted by challenges in the Title Insurance segment.
  • The company reported a consolidated pretax operating income of $231.5 million, which marks an increase from $222.9 million in the corresponding period of the previous year.
  • This growth was primarily driven by a robust performance in the General Insurance sector, which offset the subdued results in Title Insurance due to prevailing market conditions.

Primerica Inc.: Initiation of Coverage – These Are The 4 Fundamental Factors Driving Their Performance! – Financial Forecasts

By Baptista Research

  • Primerica’s first quarter of 2024 financial results demonstrated resilience amidst challenging economic conditions, although it faced underperformance in certain segments.
  • The company reported an adjusted net operating income of $137 million, which represents a 4% increase compared to the previous year, and adjusted operating income per share rose by 10% to $3.91.
  • These figures reflect the robust performance of Primerica’s core businesses, Term Life and Investment and Savings Products (ISP), along with notable growth in the sales force.

Radian Group Inc.: Initiation of Coverage – Improved Default Management and Cure Rates & Other Major Drivers

By Baptista Research

  • Radian Group reported encouraging financial outcomes for the first quarter of 2024, reflecting its strong operational core and effective strategy implementation.
  • The company witnessed a year-over year growth in its book value per share by 12%, with revenues increasing by 3% to $319 million.
  • The primary mortgage insurance in force rose by 4% to an all-time high of $271 billion, bolstering future earning prospects.

AB&Company Co Ltd (9251 JP): 1H FY10/24 flash update

By Shared Research

  • Revenue increased by 6.9% YoY to JPY8.7bn, but operating profit decreased by 9.9% YoY to JPY802mn.
  • Directly Managed Beauty Salon Operation revenue grew 6.3% YoY to JPY7.2bn, while operating profit dropped significantly to JPY20mn.
  • Franchise segment revenue rose 19.0% YoY to JPY1.3bn, with operating profit increasing 27.7% YoY to JPY528mn.

Unum Group: Initiation of Coverage – Expansion Of Service Capabilities & 3 Critical Growth Drivers

By Baptista Research

  • Unum Group has reported a commendable first quarter for 2024, signaling a robust start to the year with mixed outcomes that illustrate both strengths and areas requiring attention.
  • The company emphasized its achievement of a 13.6% increase in earnings per share, reaching a record $2.12 per share.
  • This growth was supported by a significant $350 million in statutory earnings, alongside a 6.6% rise in core operations premium growth.

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Jun 15
0

Daily Brief Industrials: Helios Techno Holding, CoreCivic , Norcros PLC, Skywest Inc and more

By | Daily Briefs, Industrials

In today’s briefing:

  • Helios Techno Holding (6927) – RS Won’t Bid Higher, Market Sees Value
  • CXW: Revising Estimates Believe CXW Relationship with ICE Remains Strong
  • Norcros – Robust performance, improving outlook
  • Skywest Inc (SKYW) – Friday, Mar 15, 2024

Helios Techno Holding (6927) – RS Won’t Bid Higher, Market Sees Value

By Travis Lundy

  • Today at noon JST, Rs Technologies (3445 JP) released an announcement on TDNet, “Our policy regarding the tender offer for Helios Techno Holding Co., Ltd. shares”
  • In it, they indicated that the price offered – ¥825/share – is a price which “fully returns to general shareholders the increased enterprise value that will result from [transaction] synergies.”
  • They acknowledge the market price is trading higher than the TOB Price, but say they have no plans to raise the Tender Offer Price. So now what? It depends.

CXW: Revising Estimates Believe CXW Relationship with ICE Remains Strong

By Zacks Small Cap Research

  • The contract termination was driven primarily by costs, according to the WSJ.
  • Unlike most CXW ICE contracts, the center has been operated under a costlier model because it was initially opened in 2014 to house families, then was transitioned in 2021 to detention primarily of individual adults.
  • Despite the expected short-term challenge of the contract termination, longer term we expect rising demand from ICE under the traditional detention model.

Norcros – Robust performance, improving outlook

By Edison Investment Research

Norcros’s FY24 results highlight its resilience in the face of tough markets, but we continue to believe that the outlook is improving in both of its core markets, the UK and South Africa. Despite the improving outlook we have maintained our revenue and profit forecasts and 251p/share valuation post the results, with the company trading on an undemanding P/E rating of 6.6x. However, it is worth highlighting the scale of the opportunity on offer to Norcros, which was illustrated at the recent capital markets day.

Skywest Inc (SKYW) – Friday, Mar 15, 2024

By Value Investors Club

  • Regional airlines like SkyWest were established to operate connecting routes under contracts with major airlines
  • SkyWest’s efficient operations and strong relationships with major carriers have made it a dominant player in the regional airline market
  • The company’s financial success and potential for future growth indicate a positive outlook for the coming years

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.

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Jun 15
0

Daily Brief Consumer: Hyundai Mobis, Fancl Corp, Webtoon Entertainment, Shiseido Company, Dickson Concepts Intl, Raccoon Holdings, Inc. and more

By | Consumer, Daily Briefs

In today’s briefing:

  • The Latest on the Rumors Surrounding the Death of Chung Mong-Koo of Hyundai Motor Group
  • Fancl (4921 JP): Kirin (2503 JP)’s Light JPY2,690 Tender Offer
  • Fancl (4921) TOB – Kirin (2503) Does the Inevitable and Takes Out Minorities. Lightish But…
  • Webtoon Entertainment Pre-IPO – Peer Comparison – Relatively Small in Operating Scale as a Platform
  • Shiseido (4911 JP):  Brainstorming For Potential Buyers
  • Dickson Concepts (113 HK): 38% Discount to NCAV, 8.6% Dividend Yield, Steady FY24
  • Raccoon Holdings, Inc. (3031 JP): Full-year FY04/24 flash update

The Latest on the Rumors Surrounding the Death of Chung Mong-Koo of Hyundai Motor Group

By Sanghyun Park

  • Early this morning, rumors spread that Hyundai’s honorary chairman Chung Mong-koo was hospitalized and died, causing stock prices to surge, but Hyundai denied this news.
  • Control of Hyundai hinges on increasing the stake in Mobis. Chung Eui-sun aims to keep Mobis’s stock low, but Chung Mong-koo’s health complicates timing and strategy.
  • Mobis’s trading point depends on Chung Mong-koo’s health. Three scenarios: he’s healthy, critically ill, or deceased. Current rumors’ price impacts are unlikely to subside soon.

Fancl (4921 JP): Kirin (2503 JP)’s Light JPY2,690 Tender Offer

By Arun George

  • Fancl Corp (4921 JP) recommended Kirin Holdings (2503 JP)’s tender offer of JPY2,690, a 42.7% premium to the undisturbed price. 
  • The timing looks opportunistic as Fancl’s shares are down 20% YTD. The offer period is from 17 June to 29 July.
  • While the offer is attractive vs peer multiples, it is light vs historical trading ranges. Securing the required acceptance rate could prove challenging as the offer price is light. 

Fancl (4921) TOB – Kirin (2503) Does the Inevitable and Takes Out Minorities. Lightish But…

By Travis Lundy

  • Kirin Holdings (2503 JP) bought a 33% stake from the founder and several others in August 2019. Five years later, they are coming back for the rest. 
  • The price here is ¥2,690/share which is a 42.7% premium from yesterday’s close. Kirin paid 20+% more in 2019. Earnings fell, but they paid 37x NTM. This is 32x. 
  • This is lightish… but…  this should get done. Activism would be difficult. There are enough shareholders who should be OK getting out. This should trade tight.

Webtoon Entertainment Pre-IPO – Peer Comparison – Relatively Small in Operating Scale as a Platform

By Ethan Aw

  • Webtoon Entertainment (WBTN US) is looking to raise up to US$500m in its US IPO.
  • Webtoon Entertainment is a global storytelling platform where a community of creators and users discover, create and share new content.
  • In our previous note, we talked about the company’s historical performance. In this note, we undertake a peer comparison.

Shiseido (4911 JP):  Brainstorming For Potential Buyers

By Steve Zhou, CFA

  • Today, according to public news, Kirin Holdings will launch a tender offer for Fancl Corp (4921 JP) at a likely 30% premium. 
  • The beauty industry is historically ripe with M&A deals.  It is not hard to see why, as the global beauty sector trades at a hefty valuation multiple. 
  • In this insight, we brainstorm for potential buyers of Shiseido Company (4911 JP) and analyze the viability of such. 

Dickson Concepts (113 HK): 38% Discount to NCAV, 8.6% Dividend Yield, Steady FY24

By Sameer Taneja

  • Dickson Concepts Intl (113 HK) reported earnings growth of 39% YoY, led mostly by an increase in interest income on the 9.6 HKD/share of net cash/investments on the balance sheet. 
  • The company’s net current asset value (NCAV) expanded to 8.2 HKD/share (Vs. FY23: 7.6 HKD/share), and with the stock at 5.2 HKD/share, it trades at a 37% discount to NCAV. 
  • The dividend was increased to 45 cents ( from FY23:35 cents/share), placing the stock at an attractive dividend yield of 8.6%.

Raccoon Holdings, Inc. (3031 JP): Full-year FY04/24 flash update

By Shared Research

  • Revenue increased by 9.2% YoY to JPY5.8bn, driven by economic recovery and increased inbound demand.
  • Operating profit decreased by 52.5% YoY to JPY567mn due to higher advertising and promotional expenses.
  • Financial business revenue rose 14.9% YoY to JPY2.5bn, with a 29.4% YoY decrease in operating profit to JPY371mn.

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Jun 15
0

Daily Brief Health Care: Oryzon Genomics, Unitedhealth Group, Cigna Group, Elevance Health , CellSource , Molina Healthcare, Soligenix , Humana Inc, Centene Corp and more

By | Daily Briefs, Healthcare

In today’s briefing:

  • Oryzon Genomics – Encouraging interim update on FRIDA
  • UnitedHealth Group Incorporated: Initiation of Coverage – A Dive Into The Integrated Strategy Of This Healthcare Industry Leader! – Major Drivers
  • Cigna Corporation: Is Their Investment in VillageMD Yielding The Expected Results? – Major Drivers
  • Elevance Health Inc.: How Is The Expansion of Value-Based Care Initiatives Panning Out? – Major Drivers
  • CellSource (4880 JP): 1H FY10/24 flash update
  • Molina Healthcare Inc.: Initiation of Coverage – A Story Of Enhanced Focus on Managed Medicaid and Medicare Advantage Expansion! – Major Drivers
  • SNGX: Valuation Change Based on Reverse Split
  • Humana Inc.: Enhanced Strategic Management of Benefit Costs and Member Acquisition Tactics! – Major Drivers
  • Centene Corporation: Medicaid Managed Care Expansion and Optimization! – Major Drivers

Oryzon Genomics – Encouraging interim update on FRIDA

By Edison Investment Research

Oryzon Genomics has reported positive interim data from the Phase Ib FRIDA study, evaluating iadademstat in combination with gilteritinib in advanced acute myeloid leukaemia (AML) patients. Results from the first two cohorts (13 patients) showed a favourable safety profile and efficacy signals, with 69% of patients reporting bone marrow (BM) blast cell clearance in the first cycle. Moreover, 38% of patients achieved complete remission with full or partial hematologic or blood count recovery. While we caution against direct read across between clinical trials, this compares favourably to the 26.3% rate (excluding remissions after bone marrow transplantation during the trial) delivered by gilteritinib in the Phase III ADMIRAL study, potentially supporting the synergy of the combination. Oryzon noted that the first two cohorts achieved full target engagement and indicated the scope for dose reduction (to aid faster platelet recovery) under the FDA’s OPTIMUS guidance. A third cohort is being recruited following this guidance.

UnitedHealth Group Incorporated: Initiation of Coverage – A Dive Into The Integrated Strategy Of This Healthcare Industry Leader! – Major Drivers

By Baptista Research

  • UnitedHealth Group has reported its first quarter financial results for 2024, which reflect the resilience and adaptive capacity of the organization amidst significant challenges, most notably the Change Healthcare cyberattack.
  • In addressing the cyberattack, UnitedHealth Group has showcased robust crisis management capabilities, responding swiftly to ensure continuity in care provision and financial support for affected healthcare providers.
  • The financial impact of the cyberattack has been substantial, with approximately $870 million in total impact to the quarter and an anticipated full-year impact in the range of $1.15 to $1.35 per share.

Cigna Corporation: Is Their Investment in VillageMD Yielding The Expected Results? – Major Drivers

By Baptista Research

  • The Cigna Group has presented its first-quarter results for 2024, demonstrating financial strength and strategic advancements across its diverse business segments.
  • The financial outcomes reveal a sound start to the year, with increased revenue and adjusted earnings per share, alongside an uplift in the full year 2024 earnings guidance.
  • However, these positive aspects are accompanied by areas of setbacks and challenges suggesting that while Cigna is on a promising trajectory, there are complexities that might affect its future performance.

Elevance Health Inc.: How Is The Expansion of Value-Based Care Initiatives Panning Out? – Major Drivers

By Baptista Research

  • Elevance Health recently reported its first-quarter results for the 2024 fiscal year, showcasing a blend of strategic accomplishments and agile responses to ongoing industry shifts.
  • The company announced earnings per share (EPS) on a GAAP basis of $9.59 and an adjusted diluted EPS of $10.64, indicating a robust growth of 12.5%.
  • This performance was underpinned by disciplined execution across Elevance Health’s strategic initiatives in a dynamically evolving healthcare landscape.

CellSource (4880 JP): 1H FY10/24 flash update

By Shared Research

  • Revenue increased by 2.6% YoY to JPY2.2bn, while operating profit decreased by 57.3% YoY to JPY281mn.
  • SG&A expenses rose by 29.4% YoY to JPY1.1bn, leading to an operating profit margin decline to 12.6%.
  • Medical device sales grew by 35.6% YoY to JPY486mn, and cosmetics sales surged by 157.9% YoY to JPY286mn.

Molina Healthcare Inc.: Initiation of Coverage – A Story Of Enhanced Focus on Managed Medicaid and Medicare Advantage Expansion! – Major Drivers

By Baptista Research

  • Molina Healthcare has reported their first quarter earnings, achieving an adjusted EPS of $5.73 and generating $9.5 billion in premium revenue.
  • The company’s performance was described as being in line with expectations and is backed by efficient operating metrics across all business segments.
  • The consolidated MCR (medical cost ratio) stood at 88.5%, demonstrating strong medical cost management with results across segments fulfilling the company’s forecasts.

SNGX: Valuation Change Based on Reverse Split

By Zacks Small Cap Research

  • On June 6, 2024, Soligenix, Inc. (SNGX) enacted a reverse stock split at a ratio of 1 post-split share for every 16 pre-split shares.
  • Our valuation has been adjusted accordingly.
  • The company recently completed a public offering for gross proceeds of approximately $4.75 million.

Humana Inc.: Enhanced Strategic Management of Benefit Costs and Member Acquisition Tactics! – Major Drivers

By Baptista Research

  • Humana has presented a mixed set of results for the first quarter of 2024, coupled with adjusted expectations for the upcoming year.
  • The company has reaffirmed its full-year adjusted EPS guidance at approximately $16 and increased its membership growth outlook from 100,000 to 150,000 net additions, which speaks to Humana’s operational resilience and strategic expansions.
  • This performance is supported by inline or positive medical cost trends, and visible growth in their primary care business with a significant upswing in new and mature centers.

Centene Corporation: Medicaid Managed Care Expansion and Optimization! – Major Drivers

By Baptista Research

  • Centene Corporation has provided an encouraging financial performance in its first quarter of the year, as echoed in their latest review of modified earnings and strategic developments across various business units.
  • Notably, the company exceeded their expected adjusted earnings per share (EPS) at $2.26, prompting an upward revision in their full-year 2024 forecast to over $6.80 per share.
  • While these results show solid progress and operational efficiency, they frame a nuanced picture—detailing areas of strength alongside ongoing challenges.

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Jun 14
0

Daily Brief ESG: Companies with Low ROEs Have Corporate Governance Practices that Only Make It So and more

By | Daily Briefs, ESG

In today’s briefing:

  • Companies with Low ROEs Have Corporate Governance Practices that Only Make It So
  • Ardagh Metal Beverage Packaging – ESG Report – Lucror Analytics

Companies with Low ROEs Have Corporate Governance Practices that Only Make It So

By Aki Matsumoto

  • Companies with the ROE over 15% have higher market capitalization, foreign ownership, and Tobin’s Q, and naturally higher ROA, while the opposite tends to be true companies with low ROE.
  • Groups with ROE above 15% have generally improved their corporate governance practices, but they still need to address their use of cash in order to further improve return on capital.
  • It’s clear that companies with low ROE have the form of board practices but not the substance, and that they don’t have a clear policy for increasing return on capital.

Ardagh Metal Beverage Packaging – ESG Report – Lucror Analytics

By Leonard Law, CFA

Lucror Analytics’ ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable).
We assess Ardagh Metal Beverage Packaging’s ESG as “Adequate”, in line with its Environmental, Social and Governance scores. Controversies are “Immaterial” and Disclosure is “Strong”.

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Jun 14
0

Daily Brief Thematic (Sector/Industry): Ohayo Japan | Tesla Shareholders Say ‘Yes’ to Mega-Comp Package! and more

By | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

  • Ohayo Japan | Tesla Shareholders Say ‘Yes’ to Mega-Comp Package!
  • Global Semi Sales YTD 2024 & Outlook: The Good & The Not So Good
  • How to Stimulate China’s Consumption, Part II
  • #14 India Insight: Ambuja Acquiring Penna, Vodafone Idea & Purvankara Fundraise, L&T, GST
  • #18Business Buzz: JPMorgan’s $500M Biotech Fund, China’s Car Sales, Tesla’s Pay Package Approval
  • [Blue Lotus Daily]:1211 HK/300750 SZ/BEKE US/LKNCY US
  • [Blue Lotus Daily – TMT Update]:BABA /9699HK/DADA/JD/PDD/ZTO/1519 HK/3690 HK/NTES/TCOM/ATAT

Ohayo Japan | Tesla Shareholders Say ‘Yes’ to Mega-Comp Package!

By Mark Chadwick

  • Adobe shares surged 16% in after-hours trading following better-than-expected Q2 results.
  • Tesla shareholders ratified CEO Elon Musk’s contentious 2018 pay plan at the annual meeting in Austin
  • Kirin Holdings plans to acquire the remaining 67% of Fancl, aiming to fully own the skincare and supplement company amid declining beer sales.

Global Semi Sales YTD 2024 & Outlook: The Good & The Not So Good

By William Keating

  • Global semi sales for April ’24 were $46.4 billion,  +15.8% YoY & +1.1% MoM
  • WSTS now forecasts a 16.1% increase in 2024 semi sales, up from 13.1% in their previous forecast
  • We think the WSTS forecast for Memory is too high & their forecast for Logic is too low. Excluding memory, the WSTS forecast reflects just 3.1% growth in 2024.

How to Stimulate China’s Consumption, Part II

By Andy Fu

  • Aging population, coupled with under-development of retirement pensions, is the major headwind against enhancing consumption; 
  • The headroom of urbanization as a driver for enhanced consumption is not as big as depicted;
  • Residential housing has, over the years, become the social safety net for the Chinese. Therefore, the bust of the property market takes many years, if not decades, to heal. 

#14 India Insight: Ambuja Acquiring Penna, Vodafone Idea & Purvankara Fundraise, L&T, GST

By Sudarshan Bhandari

#18Business Buzz: JPMorgan’s $500M Biotech Fund, China’s Car Sales, Tesla’s Pay Package Approval

By Nimish Maheshwari

  • JPMorgan’s new fund focuses on obesity treatments, especially popular yet scarce GLP-1 drugs
  • Chinese automakers sold more cars than US brands, marking a significant market shift
  • Tesla shares rise as Musk anticipates shareholder approval of his controversial $56 billion pay package

[Blue Lotus Daily]:1211 HK/300750 SZ/BEKE US/LKNCY US

By Eric Wen

  • 1211 HK/300750 SZ: Geely and SK Group sign cooperation agreement to deepen cooperation in batteries and components.(-/-)
  • BEKE US: PBoC urge local governments and banks to implement the affordable housing re-lending program.(+)
  • LKNCY US: Luckin expands its non-coffee drinks, selling 5.08 million cups of lemonade in a week(/)

[Blue Lotus Daily – TMT Update]:BABA /9699HK/DADA/JD/PDD/ZTO/1519 HK/3690 HK/NTES/TCOM/ATAT

By Ying Pan

  • BABA US/9699 HK/DADA US /JD US /PDD US /ZTO US /1519 HK/3690 HK:Taobao/Tmall to open one-hour delivery option to merchants on its platform (+/+/+/-/-/-/-/-)
  • NTES US: NetEase showcased their latest tactical shooter game, <FragPunk>, which is expected to launch in 2025.(+)
  • TCOM US/ATAT US : Travel consumption remained moderate during the Dragon Boat Festival.(-/-)

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Jun 14
0

Daily Brief Equity Bottom-Up: Taiwan Dual-Listings Monitor: TSMC Historically Extreme Premium Continues; CHT at Short Level Again and more

By | Daily Briefs, Equity Bottom-Up

In today’s briefing:

  • Taiwan Dual-Listings Monitor: TSMC Historically Extreme Premium Continues; CHT at Short Level Again
  • Elon Set to Lose $56B Incentive? If So, Will Tesla’s AI Shift to XAI?
  • Chow Tai Fook (1929 HK): Disappointed
  • The Beat Ideas: Aegis Logistics: Fueling India’s LPG Market
  • AEM Holdings: New CEO = One Final Kitchen Sink in 2Q24?
  • [Blue Lotus Multi-Sector Sector Update]: Consumer Spending Weakened During Dragon Boat
  • Luckin’s Small Step into Non-Coffee Drinks Is a Big Step of Its Future Directions
  • Takeda (4502 JP)– Avoid
  • Tech Supply Chain Tracker (14-Jun-2024): India limits Chinese participation, woos Taiwanese investments.
  • Why an Israel-Hamas Ceasefire Probably Wouldn’t Lead to Lower Container Rates in Short-Term

Taiwan Dual-Listings Monitor: TSMC Historically Extreme Premium Continues; CHT at Short Level Again

By Vincent Fernando, CFA

  • TSMC: +21.3% Premium; Trading at New +15-25% Range This Year
  • ASE: +12.7% Premium; We Continue to View 14%+ as Fresh Short Level
  • CHT: +1.2% Premium; Good Level to Short Relative to History

Elon Set to Lose $56B Incentive? If So, Will Tesla’s AI Shift to XAI?

By Uttkarsh Kohli

  • Crucial Vote: Shareholders are voting on Musk’s $56 billion compensation deal and Tesla’s reincorporation in Texas, pivotal decisions for the company’s direction.
  • High Stakes: The outcome will determine Musk’s commitment to Tesla, potentially shifting his focus to other ventures and impacting Tesla’s operations.
  • Institutional Opposition: Significant resistance from institutional investors and logistical issues for global shareholders create uncertainty. Abstaining from voting counts as a vote against, hindering Elon-supporting retail investors.

Chow Tai Fook (1929 HK): Disappointed

By Osbert Tang, CFA

  • Chow Tai Fook Jewellery (1929 HK) reported a weaker-than-expected FY24 net profit. Despite having HK$2.2bn net cash, the lack of a special dividend is even more disappointing. 
  • Surge in unrealised loss on gold loans and a YoY contraction in margin have contributed to the poor 2H24 result. Apr-May operating figures showed a deteriorated operating environment.
  • Lacking a special dividend, CTF no longer looks attractive at the current level. Overoptimistic FY25 and FY26 consensus forecasts mean earnings downgrade pressure. 

The Beat Ideas: Aegis Logistics: Fueling India’s LPG Market

By Sudarshan Bhandari

  • Aegis Logistics (AGIS IN) is significantly expanding its LPG and liquid logistics infrastructure across India with rising demand.
  • Currently, Aegis has a 15.5% market share in LPG imports in India which they plan to take to 25% in the next few years.
  • Surpassed INR 1,000 crores in normalized EBITDA for FY ’24, planned capex of 4500 Crores by FY27.

AEM Holdings: New CEO = One Final Kitchen Sink in 2Q24?

By Nicolas Van Broekhoven

  • AEM (AEM SP) announced a new CEO as of 30th of May 2024. The new CEO officially starts 1st of July 2024.
  • Amy Leong will take over from Chandran Nair as she leaves her Chief Commercial Officer role at Formfactor Inc (FORM US). 
  • Given the weak business results and inventory management issues it should be expected that Mrs Leong would want to clean the proverbial house before she starts in her new role.

[Blue Lotus Multi-Sector Sector Update]: Consumer Spending Weakened During Dragon Boat

By Eric Wen

  • Travel and box office data in the past three-day Dragonboat Holiday showed worrying weakness despite sharp price cuts by hotel and airlines. 
  • Removing travellers from Hong Kong, inbound travel was also quite bad; 
  • E-Commerce sales backed by trade-in stimulus outperformed regular merchandises, indicating consumer confidence is still low. We believe the weak travel data boded ill for consumption throughout the year.

Luckin’s Small Step into Non-Coffee Drinks Is a Big Step of Its Future Directions

By Andy Fu

  • Luckin launched lemonade drinks with raging success of 5.08 mn cups sold for the first week, ~10% of store sales. Market cheered to send the stock higher;  
  • We view it with mixed feelings. While it is margin accretive and sales enhancing,  is not conducive to improving coffee penetration and cultivating consumers’ habit for drinking coffee;
  • We see Luckin as increasingly one of, instead of the, street drink company, because lemonade is actually the top selling SKU of all milk tea vendors in China. 

Takeda (4502 JP)– Avoid

By Avien Pillay

  • Given the high number of pipeline dropouts, and the potentially disappointing $6 bn psoriasis drug acquisition, we question Takeda’s recent investment track record.
  • A big restructuring, high expectations from new/recently launched drug portfolio, and punchy company guidance reduces the probability of upside surprises.
  • Unless you are limited from investing outside Japan and you want exposure to an innovative pharma company, we believe that there are better and cheaper options elsewhere.

Tech Supply Chain Tracker (14-Jun-2024): India limits Chinese participation, woos Taiwanese investments.

By Tech Supply Chain Tracker

  • India is limiting Chinese participation in Indian subsidiaries while seeking investments from Taiwan, diversifying its economic ties.
  • AWS is committing significant funds to establish data centers in Taiwan, anticipating obstacles in securing renewable energy sources.
  • Elephantech is seeking collaborators to scale up their eco-friendly PCB manufacturing operations to meet the escalating demand. Join the sustainable production movement.

Why an Israel-Hamas Ceasefire Probably Wouldn’t Lead to Lower Container Rates in Short-Term

By Daniel Hellberg

  • Its unclear whether Yemen-based Houthis would end attacks after ceasefire
  • We’ve entered peak Summer shipping season from Asia to US, Europe
  • Higher spot rates have already lifted contract rates in Q2 2024

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Jun 14
0

Daily Brief ECM: Webtoon Entertainment IPO: The Bull Case and more

By | Daily Briefs, ECM

In today’s briefing:

  • Webtoon Entertainment IPO: The Bull Case

Webtoon Entertainment IPO: The Bull Case

By Arun George

  • Webtoon Entertainment (WBTN US), a global storytelling platform, seeks to raise up to US$500 million through a Nasdaq IPO.
  • Webtoon is the leading web-comic player in all its major geographies, including Korea, the US and Japan. Naver Corp (035420 KS) and LY (4689 JP) are the primary shareholders.
  • The bull case rests on a large TAM, rising monthly active users, strong constant currency growth supported by monetisation initiatives, a shift to profitability, and cash generation.

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