Smartkarma Daily Briefs

In response to a Nikkei article, WealthNavi (7342 JP) disclosed Mitsubishi UFJ Financial (MUFG) (8306 JP)’s tender offer at JPY1,950 per share, an 84.3% premium to the undisturbed price.
The high premium reflects WealthNavi’s steep 46% YTD share price decline, i.e., the timing is opportunistic. The offer is below the Board’s requested price.
While the irrevocable has a competing offer clause, a competing proposal is unlikely due to MUFG’s stake. However, a bump is possible if activist(s) take around a 15% stake.

MUFG Launches a TOB to Take Out Robo-Advisor WealthNavi (7342) – The 81.4% Premium Is Light

MUFG (8306) bought 15.5% of WealthNavi (7342 JP) in February at ¥1,718/share – zero premium. The shares fell. Now they are bidding for the rest 13.5% higher.
WealthNavi forecasts fantastic growth. Dec29 OP is specifically estimated at ¥13.822bn. Everyone agrees there are synergies, but they’re not “valued” because they “cannot be specifically estimated at this moment.”
I believe investors should start demanding Synergy CVRs of acquirors when synergies are not included in the fair value calculations.

Last Week in Event SPACE: Keisei Electric Railway, Vitasoy, NEC Network, ESR Group

By David Blennerhassett

Remain BULLISH Keisei Electric Railway Co (9009 JP) with low conviction. This is buying on narrative rather than fundamentals but there is no need to not get involved.
Vitasoy Intl Holdings (345 HK)‘s share price run up is excessive as Philip Ng andYeo Hiap Seng (YHS SP) over-extend their hand.
Nec Networks (1973 JP) has yet to trade below terms. The premium is small, perhaps reflecting the risk NEC will lower the minimum threshold. But there is still a fight here.

Mostly) Asia-Pac M&A: SG Fleet, Shandong Hi-Speed New Energy, HPI, Capitol Health, Henlius, 7 & I

By David Blennerhassett

I tally 48 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal.
Three new deals this week: NBIOs for SG Fleet (SGF AU) and AVJennings Ltd (AVJ AU); and Shandong Hi-Speed New Energy (1250 HK)‘s MGO. Fosun Tourism (1992 HK) also suspended.
Key updates/news took place on: Hotel Property Investments (HPI AU), Capitol Health (CAJ AU), Shanghai Henlius Biotech (2696 HK), Seven & I Holdings (3382 JP) and SAMTY HOLDINGS (187A JP).

Weekly Deals Digest (01 Dec) – Seven & I, WealthNavi, ESR, SDHS New Energy, Vitasoy, Kioxia, Hulic

A weekly summary of key developments across ECM and Event-Driven names tracked by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Thailand, Korea, India and Chinese ADRs.
ECM developments: Kioxia Holdings (285A JP) and FineToday Holdings Co Ltd (289A JP) IPOs, Hulic Co Ltd (3003 JP) and Sanrio (8136 JP) placements.
Event-Driven developments: Seven & I Holdings (3382 JP), WealthNavi (7342 JP), ESR Group (1821 HK), Shandong Hi-Speed New Energy G (1250 HK), Vitasoy Intl Holdings (345 HK).

The Issue of Tenure Is Also Similar to the Issue of Concurrent Directorships

By Aki Matsumoto

While female directors and nominating/compensation committee, for which TSE has specified specific goals, have made progress, foreign directors, for whom no specific goals have been set, have lagged behind.
Even now, with over 40% of companies with P/Bs below 1x and ROE not exceeding the cost of capital, not many companies moved to value-creating management with functioning corporate governance.
Nominating committee should make its selection, including whether to replace the incumbent director with another candidate. If it fails to do so, it’s not fulfilling its responsibilities as nominating committee.

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Dec 01

Daily Brief United States: Inter Parfums, Natera Inc, Globus Medical Inc A, Microsoft Corp, Instacart, Light & Wonder , Live Nation Entertainment, Inc, Mosaic Co/The, Shift4 Payments, Skyworks Solutions and more

By Smartkarma Daily Briefs | Daily Briefs, United States

In today’s briefing:

Inter Parfums Inc.: Expanding Brand Portfolio with New Launches To Change The Game! – Major Drivers
Natera Inc.: These Are The 6 Biggest Factors Impacting Its Performance In 2025 &Beyond! – Major Drivers
Globus Medical Inc.: An Analysis Of Its International Market Expansion & Other Major Drivers
Microsoft Under Fire: 4 Critical Factors Investors Can’t Ignore Amid U.S. Antitrust Probe!
Maplebear Inc. (Instacart): Will Its Expansion of Ad Platform & Retail Media Network Be A Potential Game Changer? – Major Drivers
Light & Wonder: An Insight Into Its Strategic Portfolio & Product Pipeline Expansion & Other Major Drivers
Live Nation Entertainment: Food & Beverage Transformation As A Critical Growth Lever! – Major Drivers
The Mosaic Company: How Its Brazilian Market Expansion Driving Our ‘Outperform’ Rating! – Major Drivers
Shift4 Payments: International Expansion in Strategic Markets & Other Major Drivers
Skyworks Solutions: An Insight Into Its Diversification in Broad Markets & Other Major Drivers

Inter Parfums Inc.: Expanding Brand Portfolio with New Launches To Change The Game! – Major Drivers

Interparfums Inc.’s third quarter financial results for 2024 highlight several key aspects of their performance, including strengths and challenges in a fluctuating global market.
On the positive side, the company reported its best third quarter in history, driven by robust sales across all major markets.
North America, Western Europe, and Asia Pacific all saw double-digit sales growth, with North America up 12%, Western Europe 25%, and Asia Pacific 15%.

Natera Inc.: These Are The 6 Biggest Factors Impacting Its Performance In 2025 &Beyond! – Major Drivers

Natera, Inc. reported a significant quarter for Q3 2024, demonstrating positive developments and some challenges inherent in its operations.
The company achieved a notable revenue increase, reaching $439.8 million, marking a 64% rise compared to the previous year.
This growth is largely attributed to robust performance across its testing portfolio, particularly within the oncology sector, where the company performed around 137,000 oncology tests, reflecting a substantial 54% year-over-year increase.

Globus Medical Inc.: An Analysis Of Its International Market Expansion & Other Major Drivers

Globus Medical reported robust financial performance in its third quarter of 2024, signaling strong growth and successful integration following its merger with NuVasive.
The company reported sales of $625.7 million, representing a significant growth of 63% from the previous year.
This was due in large part to the added contributions from the NuVasive acquisition, reflecting the initial success of the merger.

Microsoft Under Fire: 4 Critical Factors Investors Can’t Ignore Amid U.S. Antitrust Probe!

Microsoft, one of the world’s leading technology giants, is currently facing a comprehensive antitrust investigation by the U.S. Federal Trade Commission (FTC).
The probe, initiated by FTC Chair Lina Khan, is examining allegations that Microsoft is potentially abusing its market power in productivity software and cloud computing.
Specifically, the FTC is scrutinizing the company’s software licensing practices, which may be preventing customers from moving their data from Microsoft’s Azure cloud service to competing platforms.

Maplebear Inc. (Instacart): Will Its Expansion of Ad Platform & Retail Media Network Be A Potential Game Changer? – Major Drivers

Instacart reported its third-quarter financial results for 2024, showcasing solid performance with both Gross Transaction Value (GTV) and adjusted EBITDA exceeding guidance.
The company posted an 11% year-over year growth in GTV, driven by a 10% increase in order volume and a 1% increase in average order value.
Advertising and other revenue also grew by 11% year-over-year, despite some large Consumer Packaged Goods (CPG) brands reducing their spending.

Light & Wonder: An Insight Into Its Strategic Portfolio & Product Pipeline Expansion & Other Major Drivers

Light & Wonder’s third-quarter earnings reflect a balance of positive growth trends and strategic challenges.
The company reported a 12% year-over-year increase in consolidated revenue to $817 million, marking its 14th consecutive quarter of revenue growth.
This growth was driven by strong performance across its diversified portfolio, including land-based, social, and iGaming channels.

Live Nation Entertainment: Food & Beverage Transformation As A Critical Growth Lever! – Major Drivers

Live Nation Entertainment has delivered an impressive performance in its third quarter of 2024, demonstrating strong forward-looking indicators across various segments of its operations.
A detailed examination of the earnings results reveals both positive aspects and potential areas of concern that could impact future performance.
Starting with Ticketmaster, Live Nation’s ticketing segment, there has been robust activity with a reported 15% increase in sales in early October year-over-year.

The Mosaic Company: How Its Brazilian Market Expansion Driving Our ‘Outperform’ Rating! – Major Drivers

The Mosaic Company’s recent earnings for the third quarter of 2024 shed light on a period marked by both operational challenges and strategic transitions.
The company, a key player in the fertilizer industry, faced disruptions due to hurricanes in the U.S., electrical issues at potash mines in Esterhazy and Colonsay, and was also affected by a broad Canadian rail strike.
Despite these obstacles, The Mosaic Company managed to report revenues of $2.8 billion, with a net income of $122 million and adjusted EBITDA of $448 million.

Shift4 Payments: International Expansion in Strategic Markets & Other Major Drivers

Shift4 Payments reported strong financial results for the third quarter of 2024, emphasizing both its achievements and areas that need improvement.
The company set quarterly records for several key performance indicators (KPIs), including volume, gross revenue less network fees, adjusted EBITDA, and adjusted free cash flow.
The adjusted EBITDA margin reached a new quarterly high of 51.3%, or nearly 54% excluding impacts from recent acquisitions.

Skyworks Solutions: An Insight Into Its Diversification in Broad Markets & Other Major Drivers

Skyworks Solutions posted robust performance during the fourth fiscal quarter of 2024, marked by revenues of $1.025 billion and earnings per share (EPS) at $1.55, aligning with or surpassing prior guidance midpoints.
The company generated $393 million in free cash flow, continuing its trend of strong cash generation, which for a second consecutive year surpassed $1.6 billion annually.
This financial stability underpins investments in technology advancements and product development crucial for future growth.

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Dec 01

Daily Brief China: Hainan Jinpan Smart Technology, Alibaba Group Holding , Cloud Village, Sichuan Biokin Pharmaceutical, Trip.com Group , Kanzhun , Sieyuan Electric Co Ltd A, Seres Group , Cosco Shipping Energy Transportation Co. Ltd. (H) and more

By Smartkarma Daily Briefs | China, Daily Briefs

In today’s briefing:

STAR50/STAR100 Index Rebalance: No Changes for STAR50; 4 Changes for STAR100
Six Hang Seng Index Family Indices: Flows for Dec 6 Rebal
KWEB Index Rebalance: 1 Add & 4 Deletes in December
Quiddity CSI 300/500 Dec 24 Results: ~90% Hit Rate; Positive Start for the Trade
HK Connect SOUTHBOUND Flows (To 29 Nov 2024); SB Trading Volumes Lower, Still Strong Net Buying Tech
BUY/SELL/HOLD: Hong Kong Stock Updates (NOVEMBER 29)
[Kanzhun Ltd. (BZ US, BUY, TP US$17) Target Price Change]: Mark Down C4Q24 and 2025 on Weak Demand
CSI300/CSI500/CSI1000 Index Rebalance: US$9bn Round-Trip Trade
SSE50/SSE180 Index Rebalance: Couple of Surprises; Seres Group’s Multiple Inclusions; US$3.2bn Trade
A/H Premium Tracker (To 29 Nov 2024): AH Premia Flat, Volumes Low; Premia Should Fall More

STAR50/STAR100 Index Rebalance: No Changes for STAR50; 4 Changes for STAR100

As forecast, there are no changes for the SSE STAR50 (STAR50 INDEX) in December while there are 4 changes for the STAR100 Index.
There will be big outflows for Semiconductor Manufacturing International Corporation (SMIC) (688981 CH) due to SSE STAR50 (STAR50 INDEX) capping. There will be selling from other index trackers too.
Hainan Jinpan Smart Technology (688676 CH) had been ignored by the index committee at the September rebalance, so this inclusion in the STAR100 Index could come as a surprise.

Six Hang Seng Index Family Indices: Flows for Dec 6 Rebal

In this insight, we present the flows to buy and sell for each of the top 6 Hang Seng Index Family indices based on estimated tracking AUM.
The indices: Hang Seng Index (HSI), HS Tech Index (HSTECH), HS China Enterprise Index (HSCEI), HS HK Biotech (HSHKBIO), HS Internet & Infotech (HSIII), and HS Healthcare Index (HSHCI).
By Quiddity calculations based on prices of 29 November’s close, there is one-way flow across these six indices of HK$15,894,690,433.49 to trade on 6 December. Roughly speaking.

KWEB Index Rebalance: 1 Add & 4 Deletes in December

The December rebalance of the KraneShares CSI China Internet ETF (KWEB US) will take place at the close of trading on 13 December.
Cloud Village (9899 HK) is an add while Lufax Holding (LU US), Ping An Healthcare and Technology (1833 HK), ZX (9890 HK) and YSB (9885 HK) are deletes.
The deletions of Ping An Healthcare (1833 HK), ZX (9890 HK) and YSB (9885 HK) were forecast and there will be positioning in the stocks. Lufax was a close delete.

Quiddity CSI 300/500 Dec 24 Results: ~90% Hit Rate; Positive Start for the Trade

By Janaghan Jeyakumar, CFA

The December 2024 index review results for China’s CSI 300 and CSI 500 indices were announced after market close on Friday 29th November 2024.
There will be 16 ADDs/DELs for CSI 300 and 50 ADDs/DELs for CSI 500.
The CSI 300 and CSI 500 index rebal events could trigger US$4.5bn and US$3.8bn in one-way flows respectively.

HK Connect SOUTHBOUND Flows (To 29 Nov 2024); SB Trading Volumes Lower, Still Strong Net Buying Tech

SOUTHBOUND gross trading activity dropped sharply again to the lowest in a few months but net SOUTHBOUND buying remains very strong, with big flows on tech.
Most of the top names were tech names – both in gross and net buys. Only 1 tech name in top five net sells.
Last week I said I expect HK-listed tech to continue getting bought. Alibaba, Tencent, Xiaomi, etc are safe havens against Trump tariffs as they don’t compete in the US. Continue.

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

By David Mudd

As Hong Kong market continues to consolidate, the consumer discretionary sector is leading in momentum and strength while the energy and materials sectors lag.
Trip.com Group (9961 HK) , Trip.com (TCOM US) received BUY ratings after a strong 3Q24 announcement on revenue and earnings. China’s tourist numbers are projected to reach Pre-COVID levels soon.
Yum China Holdings (9987 HK) , Yum China Holdings (YUMC US) received BUY ratings after initial success from its small store/franchising strategy. The company is actively returning capital to shareholders.

[Kanzhun Ltd. (BZ US, BUY, TP US$17) Target Price Change]: Mark Down C4Q24 and 2025 on Weak Demand

By Eric Wen

Kanzhun, along with Kuaishou, Beike and PDD, are we call the “Macro Mauled Champions” (MMC). We suggest long term investors to accumulate;
Weak industrial sector earnings in October bodes ill for manufacturing hiring into C4Q24 and we think may further extend to early 2025 recruiting season;
We expect BZ to grow profit faster than revenues on cost savings, particularly on marketing and gain shares. We cut the TP from US$19 to US$17.

CSI300/CSI500/CSI1000 Index Rebalance: US$9bn Round-Trip Trade

There are 16 changes for the CSI 300 Index, 50 changes for the CSI 500 Index and 100 changes for the CSI1000 Index that will be implemented on 13 December.
There are 257 unique names that are adds or deletes and the round-trip trade across all 3 indices is close to US$9bn.
Stocks with the largest inflows and impact have outperformed stocks with the largest outflows and impact over the last few weeks. That could continue for the next couple of weeks.

SSE50/SSE180 Index Rebalance: Couple of Surprises; Seres Group’s Multiple Inclusions; US$3.2bn Trade

There are 5 changes for the SSE50 Index (SSE50 INDEX) and 18 changes for the SSE180 Index that will be implemented at the close on 13 December.
Seres Group (601127 CH) is an add to both indices, plus the CSI 300 Index, and passive trackers will need to buy over US$900m of the stock.
The adds have outperformed the deletes with a lot of the outperformance coming in the last couple of months. Trim positions in the expected adds/deletes and build positions in surprises.

A/H Premium Tracker (To 29 Nov 2024): AH Premia Flat, Volumes Low; Premia Should Fall More

Mainland share market volumes continue to be better than HK and SOUTHBOUND volumes, but SB continues to buy tech.
Stocks in HK and mainland markets bounced a bit this week as Scott Bessent named incoming Treasury Secretary and tariff talk diverges from China. Non-economic China policy matters more near-term.
H/A Pairs were surprisingly un-volatile on the week. There are a fair number of wider spreads. Non-bank financials AH Premia remain at the low end of their 52-week range.

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Dec 01

Daily Brief India: Aster DM Healthcare Ltd, Bajaj Finance Ltd and more

By Smartkarma Daily Briefs | Daily Briefs, India

In today’s briefing:

Aster DM and Quality Care India: A Deep Dive into the Merger
Bajaj Finance (BAF): Mixed Q2 But Growth Remains Robust

Aster DM and Quality Care India: A Deep Dive into the Merger

By Nimish Maheshwari

Aster DM Healthcare Ltd (ASTERDM IN) and Quality Care India are merging to form India’s third-largest hospital chain with over 10,150 beds.
This merger combines two major players, generating significant scale, diversification, and financial strength. The merged entity will benefit from synergies and plans to expand to over 13,000 beds by FY27.
The merged entity is expected to be EPS accretive and expected to increase EBITDA by 10-15% through synergies

Bajaj Finance (BAF): Mixed Q2 But Growth Remains Robust

By Ankit Agrawal, CFA

Q2FY25 performance was mixed with good growth in AUM and volumes, however, loan losses were elevated. AUM growth came in at 29% YoY and 5.5%+ QoQ in Q2.
Asset quality deteriorated led by retail and SME segments. GNPA worsened to 1.06% in Q2FY25 vs 0.86% QoQ. Credit cost has been around 2.1% vs 1.75%-1.85% guided.
BAF successfully listed its housing finance subsidiary, BHFL, on Sep 16 2024. Its shareholding in BHFL is down to 88.75% from 100%.

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Dec 01

Most Read: Teco Electric & Machinery, Hulic Co Ltd, Lynas Corp Ltd, Hainan Jinpan Smart Technology, Alibaba Group Holding , Dai Nippon Printing, Cloud Village, Sichuan Biokin Pharmaceutical, WealthNavi and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

Yuanta/P-Shares Taiwan Div+ ETF Rebalance Preview: Last-Second Changes to the Last-Minute Changes
Hulic Co (3003 JP) Placement: One Big Price Drop Could Lead to Another
MV Australia Equal Weight Index Rebalance Preview: 1 Close Add & 3 Deletions
STAR50/STAR100 Index Rebalance: No Changes for STAR50; 4 Changes for STAR100
Japan Funds: Extreme Stocks
Six Hang Seng Index Family Indices: Flows for Dec 6 Rebal
Dai Nippon Placement – Share Buyback Should Aid Deal Performance
KWEB Index Rebalance: 1 Add & 4 Deletes in December
Quiddity CSI 300/500 Dec 24 Results: ~90% Hit Rate; Positive Start for the Trade
WealthNavi (7342 JP): MUFG (8306 JP)’s Opportunistic Tender Offer

Yuanta/P-Shares Taiwan Div+ ETF Rebalance Preview: Last-Second Changes to the Last-Minute Changes

There are now new changes forecast for the Yuanta/P-Shares Taiwan Dividend Plus ETF in December for a total of 8 inclusions and 7 deletions.
Constituent changes along with capping changes will lead to a one-way turnover of 21.8% and in a one-way trade of TWD 75.8bn (US$2.33bn).
The potential changes had a big one-day move yesterday and we expect similar moves over the next couple of days.

Hulic Co (3003 JP) Placement: One Big Price Drop Could Lead to Another

Overnight, Hulic Co Ltd (3003 JP) announced a placement of 85.37m shares to unwind crossholdings and improve corporate value. There is an overallotment option for another 12.8m shares.
There will be limited passive buying in the short-term and the number of shares offered is a very large percentage of real float of the stock.
A price drop of 20% or more puts Hulic Co Ltd (3003 JP) at risk of deletion from a global index and could lead to a further price drop.

MV Australia Equal Weight Index Rebalance Preview: 1 Close Add & 3 Deletions

With 4 days left to review cutoff, there is 1 close add and 3 potential deletions for the MV Australia Equal Weight Index at the December rebalance.
Even if there are no constituent changes, capping changes will lead to one-way turnover of 4.6% and a round-trip trade of A$243m.
The final list of inclusions/exclusions will depend on price movements till Friday and whether the index provider makes any significant changes to the free float of stocks in the universe.

STAR50/STAR100 Index Rebalance: No Changes for STAR50; 4 Changes for STAR100

As forecast, there are no changes for the SSE STAR50 (STAR50 INDEX) in December while there are 4 changes for the STAR100 Index.
There will be big outflows for Semiconductor Manufacturing International Corporation (SMIC) (688981 CH) due to SSE STAR50 (STAR50 INDEX) capping. There will be selling from other index trackers too.
Hainan Jinpan Smart Technology (688676 CH) had been ignored by the index committee at the September rebalance, so this inclusion in the STAR100 Index could come as a surprise.

Japan Funds: Extreme Stocks

By Steven Holden

We screen for Japanese companies at the extreme ends of their positioning or momentum ranges among active Japan equity funds.
Low Positioning coupled with Negative Momentum: Nissan Motor Corp and Misumi Group
High Positioning coupled with High Momentum: ASICS Corp and Kyushu Railway

Six Hang Seng Index Family Indices: Flows for Dec 6 Rebal

In this insight, we present the flows to buy and sell for each of the top 6 Hang Seng Index Family indices based on estimated tracking AUM.
The indices: Hang Seng Index (HSI), HS Tech Index (HSTECH), HS China Enterprise Index (HSCEI), HS HK Biotech (HSHKBIO), HS Internet & Infotech (HSIII), and HS Healthcare Index (HSHCI).
By Quiddity calculations based on prices of 29 November’s close, there is one-way flow across these six indices of HK$15,894,690,433.49 to trade on 6 December. Roughly speaking.

Dai Nippon Placement – Share Buyback Should Aid Deal Performance

By Clarence Chu

A group of shareholders are looking to raise US$214m from selling their respective stakes in Dai Nippon Printing (7912 JP).
While the deal shouldn’t come as a surprise, given the ongoing cross-shareholding unwind narrative in Japan, the timing of such a selldown isn’t always certain.
In this note, we will talk about the placement and run the deal through our ECM framework.

KWEB Index Rebalance: 1 Add & 4 Deletes in December

The December rebalance of the KraneShares CSI China Internet ETF (KWEB US) will take place at the close of trading on 13 December.
Cloud Village (9899 HK) is an add while Lufax Holding (LU US), Ping An Healthcare and Technology (1833 HK), ZX (9890 HK) and YSB (9885 HK) are deletes.
The deletions of Ping An Healthcare (1833 HK), ZX (9890 HK) and YSB (9885 HK) were forecast and there will be positioning in the stocks. Lufax was a close delete.

Quiddity CSI 300/500 Dec 24 Results: ~90% Hit Rate; Positive Start for the Trade

By Janaghan Jeyakumar, CFA

The December 2024 index review results for China’s CSI 300 and CSI 500 indices were announced after market close on Friday 29th November 2024.
There will be 16 ADDs/DELs for CSI 300 and 50 ADDs/DELs for CSI 500.
The CSI 300 and CSI 500 index rebal events could trigger US$4.5bn and US$3.8bn in one-way flows respectively.

WealthNavi (7342 JP): MUFG (8306 JP)’s Opportunistic Tender Offer

In response to a Nikkei article, WealthNavi (7342 JP) disclosed Mitsubishi UFJ Financial (MUFG) (8306 JP)’s tender offer at JPY1,950 per share, an 84.3% premium to the undisturbed price.
The high premium reflects WealthNavi’s steep 46% YTD share price decline, i.e., the timing is opportunistic. The offer is below the Board’s requested price.
While the irrevocable has a competing offer clause, a competing proposal is unlikely due to MUFG’s stake. However, a bump is possible if activist(s) take around a 15% stake.

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Dec 01

Daily Brief Financials: WealthNavi, Bank Rakyat Indonesia, Bajaj Finance Ltd, GDS Holdings (ADR) and more

By Smartkarma Daily Briefs | Daily Briefs, Financials

In today’s briefing:

WealthNavi (7342 JP): MUFG (8306 JP)’s Opportunistic Tender Offer
Bank Rakyat Indonesia (BBRI IJ) – Ultra Attractive
Bajaj Finance (BAF): Mixed Q2 But Growth Remains Robust
MUFG Launches a TOB to Take Out Robo-Advisor WealthNavi (7342) – The 81.4% Premium Is Light
GDS: The Leading Data Center Provider in China, Riding the AI Mega Trend – BUY

WealthNavi (7342 JP): MUFG (8306 JP)’s Opportunistic Tender Offer

In response to a Nikkei article, WealthNavi (7342 JP) disclosed Mitsubishi UFJ Financial (MUFG) (8306 JP)’s tender offer at JPY1,950 per share, an 84.3% premium to the undisturbed price.
The high premium reflects WealthNavi’s steep 46% YTD share price decline, i.e., the timing is opportunistic. The offer is below the Board’s requested price.
While the irrevocable has a competing offer clause, a competing proposal is unlikely due to MUFG’s stake. However, a bump is possible if activist(s) take around a 15% stake.

Bank Rakyat Indonesia (BBRI IJ) – Ultra Attractive

By Angus Mackintosh

Bank Rakyat Indonesia should have a stronger finish to the year with stable credit costs and continuing growth in micro recoveries driving fee income growth, with NIMs remaining stable
Loan growth will increase in 4Q2024 but may see a slowdown in 2025 but the bank should see stable credit costs and a rebound in earnings with lower provisions.
Foreign ownership and vaulations are back to 2015 lows apart from the pandemic at 2.1x PBV is also a 10-year ex-pandemic low of 1.8x, and trades on 9.6x PER.

Bajaj Finance (BAF): Mixed Q2 But Growth Remains Robust

By Ankit Agrawal, CFA

Q2FY25 performance was mixed with good growth in AUM and volumes, however, loan losses were elevated. AUM growth came in at 29% YoY and 5.5%+ QoQ in Q2.
Asset quality deteriorated led by retail and SME segments. GNPA worsened to 1.06% in Q2FY25 vs 0.86% QoQ. Credit cost has been around 2.1% vs 1.75%-1.85% guided.
BAF successfully listed its housing finance subsidiary, BHFL, on Sep 16 2024. Its shareholding in BHFL is down to 88.75% from 100%.

MUFG Launches a TOB to Take Out Robo-Advisor WealthNavi (7342) – The 81.4% Premium Is Light

MUFG (8306) bought 15.5% of WealthNavi (7342 JP) in February at ¥1,718/share – zero premium. The shares fell. Now they are bidding for the rest 13.5% higher.
WealthNavi forecasts fantastic growth. Dec29 OP is specifically estimated at ¥13.822bn. Everyone agrees there are synergies, but they’re not “valued” because they “cannot be specifically estimated at this moment.”
I believe investors should start demanding Synergy CVRs of acquirors when synergies are not included in the fair value calculations.

GDS: The Leading Data Center Provider in China, Riding the AI Mega Trend – BUY

By Jacob Cheng

GDS is the leader in China’s data center market. GDS is well positioned to capture growing demand from generative AI cloud growth
GDS consists of GDSH (China) and GDSI (international), both businesses are delivering growth and operational excellence
GDS US share price has rallied 100% YTD, we believe there is further room to grow due to capital flows and attractive valuation

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Dec 01

Daily Brief Industrials: Hainan Jinpan Smart Technology, Sieyuan Electric Co Ltd A, Cosco Shipping Energy Transportation Co. Ltd. (H), Keisei Electric Railway Co, Korean Air Lines, Flowserve Corp and more

By Smartkarma Daily Briefs | Daily Briefs, Industrials

In today’s briefing:

STAR50/STAR100 Index Rebalance: No Changes for STAR50; 4 Changes for STAR100
CSI300/CSI500/CSI1000 Index Rebalance: US$9bn Round-Trip Trade
A/H Premium Tracker (To 29 Nov 2024): AH Premia Flat, Volumes Low; Premia Should Fall More
Last Week in Event SPACE: Keisei Electric Railway, Vitasoy, NEC Network, ESR Group
Korean Air Spearheading the Korean Airline Industry Consolidation
Flowserve Corporation: These Are The 7 Biggest Factors Impacting Its Performance In 2025 & Beyond! – Major Drivers

STAR50/STAR100 Index Rebalance: No Changes for STAR50; 4 Changes for STAR100

As forecast, there are no changes for the SSE STAR50 (STAR50 INDEX) in December while there are 4 changes for the STAR100 Index.
There will be big outflows for Semiconductor Manufacturing International Corporation (SMIC) (688981 CH) due to SSE STAR50 (STAR50 INDEX) capping. There will be selling from other index trackers too.
Hainan Jinpan Smart Technology (688676 CH) had been ignored by the index committee at the September rebalance, so this inclusion in the STAR100 Index could come as a surprise.

CSI300/CSI500/CSI1000 Index Rebalance: US$9bn Round-Trip Trade

There are 16 changes for the CSI 300 Index, 50 changes for the CSI 500 Index and 100 changes for the CSI1000 Index that will be implemented on 13 December.
There are 257 unique names that are adds or deletes and the round-trip trade across all 3 indices is close to US$9bn.
Stocks with the largest inflows and impact have outperformed stocks with the largest outflows and impact over the last few weeks. That could continue for the next couple of weeks.

A/H Premium Tracker (To 29 Nov 2024): AH Premia Flat, Volumes Low; Premia Should Fall More

Mainland share market volumes continue to be better than HK and SOUTHBOUND volumes, but SB continues to buy tech.
Stocks in HK and mainland markets bounced a bit this week as Scott Bessent named incoming Treasury Secretary and tariff talk diverges from China. Non-economic China policy matters more near-term.
H/A Pairs were surprisingly un-volatile on the week. There are a fair number of wider spreads. Non-bank financials AH Premia remain at the low end of their 52-week range.

Last Week in Event SPACE: Keisei Electric Railway, Vitasoy, NEC Network, ESR Group

By David Blennerhassett

Remain BULLISH Keisei Electric Railway Co (9009 JP) with low conviction. This is buying on narrative rather than fundamentals but there is no need to not get involved.
Vitasoy Intl Holdings (345 HK)‘s share price run up is excessive as Philip Ng andYeo Hiap Seng (YHS SP) over-extend their hand.
Nec Networks (1973 JP) has yet to trade below terms. The premium is small, perhaps reflecting the risk NEC will lower the minimum threshold. But there is still a fight here.

Korean Air Spearheading the Korean Airline Industry Consolidation

By Douglas Kim

Nearly four years have passed since Korean Air first proposed a merger with Asiana Airlines in November 2020. Despite repeated delays, it appears that this merger could finally occur.
There is now a higher probability of Korean Air and Asiana Airlines receiving the final merger approval from the United States Department of Justice.
Combined with attractive valuations, better balance sheet, and improved profitability from the merged entity, we believe that Korean Air shares could continue to outperform KOSPI in the next 12 months.

Flowserve Corporation: These Are The 7 Biggest Factors Impacting Its Performance In 2025 & Beyond! – Major Drivers

Flowserve Corporation’s third-quarter 2024 financial results reveal a mix of strengths and ongoing challenges as the company continues to execute its strategic growth plans.
The company demonstrated notable progress in several key areas, while also acknowledging factors that moderated its performance in the quarter.
On the positive side, Flowserve achieved a book-to-bill ratio exceeding 1.06, with bookings hitting $1.2 billion—a clear indicator of demand across its business segments.

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Dec 01

Daily Brief Health Care: Sichuan Biokin Pharmaceutical, Aster DM Healthcare Ltd, Globus Medical Inc A, Natera Inc, Shanghai Henlius Biotech , Inner Mongolia Furui Medical Scie, Astrazeneca Plc Spons Adr and more

By Smartkarma Daily Briefs | Daily Briefs, Healthcare

In today’s briefing:

Quiddity CSI 300/500 Dec 24 Results: ~90% Hit Rate; Positive Start for the Trade
Aster DM and Quality Care India: A Deep Dive into the Merger
Globus Medical Inc.: An Analysis Of Its International Market Expansion & Other Major Drivers
Natera Inc.: These Are The 6 Biggest Factors Impacting Its Performance In 2025 &Beyond! – Major Drivers
China Healthcare Weekly (Dec.1)- 2024 NRDL Result, Expectation Gap for Biotech, Henlius’ Wide Spread
CSI Medical Service Index Rebalance: Three Changes; Brutal Underperformance Could Reverse
AstraZeneca PLC: Expansion in Rare Disease & Complement Therapeutics Driving Our Optimism! – Major Drivers

Quiddity CSI 300/500 Dec 24 Results: ~90% Hit Rate; Positive Start for the Trade

By Janaghan Jeyakumar, CFA

The December 2024 index review results for China’s CSI 300 and CSI 500 indices were announced after market close on Friday 29th November 2024.
There will be 16 ADDs/DELs for CSI 300 and 50 ADDs/DELs for CSI 500.
The CSI 300 and CSI 500 index rebal events could trigger US$4.5bn and US$3.8bn in one-way flows respectively.

Aster DM and Quality Care India: A Deep Dive into the Merger

By Nimish Maheshwari

Aster DM Healthcare Ltd (ASTERDM IN) and Quality Care India are merging to form India’s third-largest hospital chain with over 10,150 beds.
This merger combines two major players, generating significant scale, diversification, and financial strength. The merged entity will benefit from synergies and plans to expand to over 13,000 beds by FY27.
The merged entity is expected to be EPS accretive and expected to increase EBITDA by 10-15% through synergies

Globus Medical Inc.: An Analysis Of Its International Market Expansion & Other Major Drivers

Globus Medical reported robust financial performance in its third quarter of 2024, signaling strong growth and successful integration following its merger with NuVasive.
The company reported sales of $625.7 million, representing a significant growth of 63% from the previous year.
This was due in large part to the added contributions from the NuVasive acquisition, reflecting the initial success of the merger.

Natera Inc.: These Are The 6 Biggest Factors Impacting Its Performance In 2025 &Beyond! – Major Drivers

Natera, Inc. reported a significant quarter for Q3 2024, demonstrating positive developments and some challenges inherent in its operations.
The company achieved a notable revenue increase, reaching $439.8 million, marking a 64% rise compared to the previous year.
This growth is largely attributed to robust performance across its testing portfolio, particularly within the oncology sector, where the company performed around 137,000 oncology tests, reflecting a substantial 54% year-over-year increase.

China Healthcare Weekly (Dec.1)- 2024 NRDL Result, Expectation Gap for Biotech, Henlius’ Wide Spread

By Xinyao (Criss) Wang

2024 NRDL negotiation results were released. Some eye-catching drugs were included this time, which will bring challenges to companies such as Innovent, RemeGen, Gan & Lee Pharmaceuticals, Haisco Pharmaceutical, etc..
There have been a big “expectation gap” for biotech companies in Hong Kong stock market – It’s a mismatch between what the market thinks and what’s actually happening.
The progress of Henlius’ privatization is still slower-than-expected. We also do not know how this privatization ranks in terms of strategic significance of capital operations within Fosun Pharma’s system.

CSI Medical Service Index Rebalance: Three Changes; Brutal Underperformance Could Reverse

CSI announced the changes for the December rebalance after market close on 29 November and the changes will be effective after the close of trading on 13 December.
There are 3 changes for the index and we estimate passive buying of 0.7-1.4x ADV in the adds and selling of between 0.2-1x ADV in the deletes.
Trade performance has been horrible as the adds have moved sideways over the last two months and the deletes have skyrocketed – that could change in the next two weeks.

AstraZeneca PLC: Expansion in Rare Disease & Complement Therapeutics Driving Our Optimism! – Major Drivers

AstraZeneca’s recent earnings outlined promising developments but also noted potential areas for concern.
The company’s total revenue saw a significant increase of 21% in Q3, driven by strong global demand for its medicines, resulting in a core EPS rise of 27%.
Year-to-date, total revenue and core EPS have increased by 19% and 11%, respectively.

💡 Before it’s here, it’s on Smartkarma

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

✓ Unlimited Research Summaries
✓ Personalised Alerts
✓ Custom Watchlists
✓ Company Data and News
✓ Events & Webinars

Dec 01

Daily Brief Energy/Materials: Mosaic Co/The and more

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

In today’s briefing:

The Mosaic Company: How Its Brazilian Market Expansion Driving Our ‘Outperform’ Rating! – Major Drivers

The Mosaic Company: How Its Brazilian Market Expansion Driving Our ‘Outperform’ Rating! – Major Drivers