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Smartkarma Daily Briefs

Nov 15
0

Daily Brief Financials: Banca Monte dei Paschi di Sien, TSE Tokyo Price Index TOPIX, Bitcoin, Grandy House, Ascot Corp, London Stock Exchange, NB Private Equity Partners, NET Lease Office Properties, T&D Holdings, J Trust Co Ltd and more

By | Daily Briefs, Financials

In today’s briefing:

  • Monte Dei Paschi Poised for Strategic Merger Opportunity
  • EQD | Global Option Implied Volatility – Consistently Declining Volatility Amid Mixed Markets
  • Crypto Moves #52 – Are You Ready for Altcoin Season?
  • Grandy House (8999 JP): 1H FY03/25 flash update
  • Ascot Corp (3264 JP): Full-year FY09/24 flash update
  • London Stock Exchange Group (LSEG LN) – Wednesday, Aug 14, 2024
  • NB Private Equity Partners – CM Day: 6 November Fireworks
  • NLOP: Debt Reduction Supports Price Target
  • T&D Holdings (8795 JP): 1H FY03/25 flash update
  • J Trust Co Ltd (8508 JP): Q3 FY12/24 flash update

Monte Dei Paschi Poised for Strategic Merger Opportunity

By Jesus Rodriguez Aguilar

  • The Italian government sold a 15% stake in Banca Monte dei Paschi di Sien (BMPS IM), reducing its holding to 11.7%, signaling potential acquisition interest.
  • Banco BPM SpA (BAMI IM) and Anima Holding (ANIM IM)’s recent share purchases in BMPS suggest strategic positioning for a potential future acquisition within the Italian banking sector.
  • BMPS’s improved financial performance, attractive valuation (5.2x Fwd NTM P/E and 0.6x P/BVPS, and heightened investor interest create favorable conditions for a merger or acquisition.

EQD | Global Option Implied Volatility – Consistently Declining Volatility Amid Mixed Markets

By Gaudenz Schneider

  • Observing implied volatility across 16 markets plus gold provides a picture of falling implied volatility, despite dispersion in market performance.
  • Several, but not all, markets display moderation from unusual volatility levels to a more balanced implied volatility structure.
  • The realignment of implied volatility across markets presents potential relative value opportunities.

Crypto Moves #52 – Are You Ready for Altcoin Season?

By Mads Eberhardt

  • In Crypto Moves #18 from early March this year, we referred to this crypto bull market as the least speculative in the history of the crypto market.
  • By Crypto Moves #35 in early July, we reaffirmed this view.
  • Meanwhile, during this period, Bitcoin had outpaced almost every other altcoin.

Grandy House (8999 JP): 1H FY03/25 flash update

By Shared Research

  • Grandy House reported sales of JPY27.0bn (+9.1% YoY), with operating profit down 25.7% YoY at JPY434mn.
  • Total assets at end-Q2 FY03/25 were JPY71.7bn, a decrease of JPY2.7bn from end-FY03/24, due to reduced inventories.
  • Net income attributable to owners of the parent was JPY78mn, a 69.1% YoY decline, amid rising housing prices.

Ascot Corp (3264 JP): Full-year FY09/24 flash update

By Shared Research

  • FY09/24 revenue reached JPY36.8bn (+90.9% YoY), with operating profit at JPY5.9bn (+194.2% YoY) and net income JPY3.0bn (+236.0% YoY).
  • The company sold 28 properties in FY09/24, increasing revenue by 90.9% YoY, with a gross profit margin rise of 2.7pp YoY.
  • FY09/25 forecast includes revenue of JPY50.0bn (+35.9% YoY) and net income attributable to owners of the parent of JPY3.5bn (+16.0% YoY).

London Stock Exchange Group (LSEG LN) – Wednesday, Aug 14, 2024

By Value Investors Club

  • LSEG is shifting from a transactional exchange operator to a data and info services company
  • Expected low-teens EPS growth and 20% IRR in the medium term
  • Operates in financial data/analytics and market infrastructure, offering long-term investment potential

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.

NB Private Equity Partners – CM Day: 6 November Fireworks

By Hardman & Co

  • The key takeaways from NBPE’s 6 November CM day, in our view, were i) positive market indications, including exits and an increase in the correlation between operating company EBITDA growth and NAV growth
  • ii) NB’s platform brings unique benefits: accessing deals, analysing investment opportunities, and GP relationships, (which have generated a big increase in opportunities presented to them, even when the overall market slowed) and
  • iii) multiple levers for value creation mean that bottom-line return expectations are unchanged.

NLOP: Debt Reduction Supports Price Target

By Hamed Khorsand

  • NLOP reported two small property sales since the $71.5 million raised from the sale of the Scottsdale, Arizona building in August 2024. 
  • The asset sales have contributed to NLOP reducing its debt burden from mortgage and mezzanine loans that carry interest rates of 9.8 percent and 14.5 percent, respectively.   
  • Cash flow from operations resulted in further reduction of debt in the third quarter.  

T&D Holdings (8795 JP): 1H FY03/25 flash update

By Shared Research

  • In 1H FY03/24, ordinary revenues rose 10.6% YoY to JPY1.7tn, driven by higher insurance premiums.
  • Group adjusted profit increased 46.1% YoY to JPY81.8bn, with strong performance across all main life insurance companies.
  • The consolidated solvency margin ratio rose to 1,023.0%, with significant increases at Daido Life and TDF Life.

J Trust Co Ltd (8508 JP): Q3 FY12/24 flash update

By Shared Research

  • Operating revenue reached JPY96.9bn, a 14.8% YoY increase, driven by growth in financial and real estate businesses.
  • Operating profit decreased 58.7% YoY to JPY5.0bn, affected by a JPY10.2bn decline in the Real Estate Business.
  • Profit attributable to owners of parent fell 78.8% YoY to JPY4.1bn, influenced by deferred tax liabilities reversal.

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Nov 15
0

Daily Brief Consumer: Macromill, Inc, Swiggy, Prosus NV, Geely Auto, XPeng , Sankyo Co Ltd, Leggett & Platt, MarketEnterprise Co Ltd, Newell Rubbermaid and more

By | Consumer, Daily Briefs

In today’s briefing:

  • CVC Offers ¥1150 for Macromill (3978) – Wrong Price, Wrong Register – Expect Activism or An Overbid
  • Macromill (3978 JP): CVC’s Light Tender Offer at JPY1,150 Begs for Activism
  • Zomato Vs Swiggy: The Great Indian Delivery War
  • NPN X PRX: Swiggy Lists, Tencent 3Q FY24 Results, Market Awaits H1 FY25 Results and Strategy Update
  • Geely (175 HK): 3Q24, Revenue up by 20% and Operating Profit up by 129% (2nd Largest in China)
  • [XPeng Inc. (XPEV US, SELL, TP US$5) Company Update]: Material and Component Pricing Drove Cost Down
  • Sankyo (6417) – Thursday, Aug 15, 2024
  • Leggett & Platt’s Innovation Push: Will New Product Launches & Tech Upgrades Drive a Turnaround? – Major Drivers
  • MarketEnterprise Co Ltd (3135 JP): Q1 FY06/25 flash update
  • Newell Brand Inc.: Core Sales Progression & Retail Dynamics As A Primary Growth Accelerator! – Major Drivers

CVC Offers ¥1150 for Macromill (3978) – Wrong Price, Wrong Register – Expect Activism or An Overbid

By Travis Lundy

  • Today, CVC announced a deal to buy out Macromill, Inc (3978 JP). It is agreed and supported by management and the Board. 
  • The shareholder register on this stock is wide open. It is not burdened by crossholders. It IS burdened by 7 large active holders who have 55%. 
  • Those holders may complain about the process, the transparency, and the low price. This could be a target for an activist or a strategic overbidder.

Macromill (3978 JP): CVC’s Light Tender Offer at JPY1,150 Begs for Activism

By Arun George

  • Macromill, Inc (3978 JP) has recommended CVC’s tender offer at JPY1,150, a 40.1% premium to the last close.
  • While the offer is attractive compared to historical trading ranges, it is 41% below the IPO price and 11% below the midpoint IFA DCF valuation range. 
  • The lack of an irrevocable, open shareholder register and large foreign institutions’ shareholding increases the odds of activism to force a bump.  

Zomato Vs Swiggy: The Great Indian Delivery War

By Sudarshan Bhandari

  • Swiggy (1255298D IN) debuts with an 8% premium, raising Rs. 11,328 crore in IPO for Dark store expansion, brand promotion, tech & inorganic growth.
  • Swiggy lags behind Zomato across metrics, while Zomato diversifies with high-growth ticketing and “Going Out” segments.
  • With both segments is on the edge of becoming Contribution and EBITDA positive, one need to look the results of upcoming quarters of swiggy carefully.

NPN X PRX: Swiggy Lists, Tencent 3Q FY24 Results, Market Awaits H1 FY25 Results and Strategy Update

By Charlotte van Tiddens, CFA

  • It has been an eventful week for Naspers and Prosus – Tencent reported 3Q FY24 results yesterday after the HK close and Swiggy listed on the NSE and BSE.
  • Prosus sold shares in Swiggy worth $500m and retains an interest of 25% (fully diluted basis).
  • Since 2017, Naspers and Prosus invested $1.3bn to build a 31% stake. The group have created $2bn of value for shareholders following the listing.

Geely (175 HK): 3Q24, Revenue up by 20% and Operating Profit up by 129% (2nd Largest in China)

By Ming Lu

  • Geely’s revenue grew by 20% YoY and deliveries increased by 19% YoY in 3Q24.
  • The operating margin improved to 5.3% in 3Q24 versus 2.9% in 3Q23.
  • We conclude an upside of 58% and a price target of HK$22 for the end of 2025.

[XPeng Inc. (XPEV US, SELL, TP US$5) Company Update]: Material and Component Pricing Drove Cost Down

By Eric Wen

  • C3Q24 results from LEAP Motors seems to indicate the profit margins of low-priced EV can reach high single digits.
  • We thus revised up XPEV’s 2024-25 top line by 8% and 28% on successful launch of P7+, 2024-25 gross margins by 0.6ppt and 1.7ppt
  • Despite these improvements, we opt to maintain the rating of SELL and TP of US$5 unchanged as XPEV’s path to profitability is still unclear.

Sankyo (6417) – Thursday, Aug 15, 2024

By Value Investors Club

  • Sankyo, a Japanese company previously seen as a value trap, has made changes to enhance shareholder value
  • The company has implemented share buybacks, acquiring 24% of shares in the last year and leading to a higher valuation
  • The focus on capital efficiency and returning value to shareholders has revitalized Sankyo, leading to increased investor confidence and potential future growth opportunities

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.

Leggett & Platt’s Innovation Push: Will New Product Launches & Tech Upgrades Drive a Turnaround? – Major Drivers

By Baptista Research

  • Leggett & Platt’s third quarter 2024 results reflect a challenging performance environment driven by several demand and operational pressures.
  • Overall sales amounted to $1.1 billion, representing a 6% decline year-over-year.
  • The decrease was primarily attributed to volume declines across all three business segments—Bedding Products, Specialized Products, and Furniture, Flooring and Textile Products—coupled with reductions in raw material-related selling prices.

MarketEnterprise Co Ltd (3135 JP): Q1 FY06/25 flash update

By Shared Research

  • Revenue reached JPY5.5bn (+33.7% YoY), driven by growth in Second-hand Online and Mobile & Telecommunications segments.
  • Operating profit turned positive at JPY69mn, with a 1.3% margin, despite JPY68mn in relocation expenses.
  • The company recorded a JPY32mn derivatives valuation loss due to a stock price decline in a CFD contract.

Newell Brand Inc.: Core Sales Progression & Retail Dynamics As A Primary Growth Accelerator! – Major Drivers

By Baptista Research

  • Newell Brands recently shared their third quarter 2024 results, highlighting both progress and challenges across various segments.
  • The company has been implementing a new corporate strategy aimed at innovation, brand building, and market excellence for more profitable growth, and their results suggest some positive impacts from these efforts.
  • On the financial front, Newell reported a narrowing decline in core sales to 1.7% in the third quarter, an improvement compared to the previous quarters of 2024.

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Nov 14
0

Daily Brief ESG: Parent-Subsidiary Listings Are a Microcosm of Japanese Stocks: Change to Value-Creation Is Long Away and more

By | Daily Briefs, ESG

In today’s briefing:

  • Parent-Subsidiary Listings Are a Microcosm of Japanese Stocks: Change to Value-Creation Is Long Away

Parent-Subsidiary Listings Are a Microcosm of Japanese Stocks: Change to Value-Creation Is Long Away

By Aki Matsumoto

  • Listed subsidiaries decrease but increase if equity method listed companies are included. Many companies haven’t fully exercised treatment of subsidiaries, selling only a little of their shares to below 50%.
  • Many parent companies that own listed subsidiaries and equity-method listed companies have placed cash in subsidiaries or equity-method companies without increasing their own stock prices.
  • Although companies have changed their mindset somewhat, they haven’t changed their management to effectively use cash to create value, which is the reason for the low valuations of Japanese stocks.

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Nov 14
0

Daily Brief Technical Analysis: Ride the Trend Higher; Significant End-Of-Year Rally Underway; Four Sector Upgrades and more

By | Daily Briefs, Technical Analysis

In today’s briefing:

  • Ride the Trend Higher; Significant End-Of-Year Rally Underway; Four Sector Upgrades, One Downgrade

Ride the Trend Higher; Significant End-Of-Year Rally Underway; Four Sector Upgrades, One Downgrade

By Joe Jasper

  • Our outlook remains bullish following the S&P 500’s multi-month base breakout above 5670, alongside constructive market dynamics which have significantly improved over the past week.
  • Last week’s 11/5/24 report titled “Buy the Pullback” discussed how we were buyers, expecting a strong end-of-year rally to start that day or the following day (day after the election)
  • The strong rally officially started on election day, and all that is left to do is ride the trend higher into year-end and the early part of 2025

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Nov 14
0

Daily Brief Credit: Lucror Analytics – Morning Views Asia and more

By | Credit, Daily Briefs

In today’s briefing:

  • Lucror Analytics – Morning Views Asia
  • Minerva 3Q24: Acquisitions Keep Uncertainty High

Lucror Analytics – Morning Views Asia

By Trung Nguyen

  • USTs were sold off across the curve yesterday. The yield on the 10Y UST increased 12 bps to 4.42%.
  • Open interest rose for the fourth consecutive session on the 2Y notes contract, with traders building up bearish positions following the US presidential election.
  • Traders are pricing in just over a 50% chance that officials will deliver another quarter-point rate cut in December, and are now pricing in about two US rate cuts through June 2025 (vs. almost four projected at the start of last week).

Minerva 3Q24: Acquisitions Keep Uncertainty High

By Leandro Gubler

  • We expect the company to encounter challenges in free cash flow generation, which will pressure credit metrics and hinder post-acquisition deleveraging.
  • The 2033 notes are the only ones within Minerva’s capital structure that do not trade tight to the LatAm BB and EM BB curves. 
  • However, we believe a better entry point for these notes may emerge based on our expectation of a weakening credit profile in the short term.

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Nov 14
0

Daily Brief Thematic (Sector/Industry): Japan Morning Connection: Softbank Further Consolidating Its AI Focus and more

By | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

  • Japan Morning Connection: Softbank Further Consolidating Its AI Focus
  • Ohayo Japan | US Stocks Flatline as Post-Election Rally Loses Steam
  • # 70 India Insight: SBI Climate Fund, IOCL Expansion, L&T Contract
  • China Has Stockpiled Arsenals to Meet Trump’s Tariff War
  • Sustainable Investing Surveyor – November 11, 2024
  • US Biofuels Outlook – Five Trends to Watch in 2025
  • Biopharma Week in Review – November 11, 2024
  • Cannabis Trends Update – Five Factors That Will Drive 2025
  • Furniture/Furnishings Weekly Post-Election Market Swings – November 11, 2024

Japan Morning Connection: Softbank Further Consolidating Its AI Focus

By Andrew Jackson

  • Further tech weakness in the US as markets brace for a more inflationary outlook.
  • Isetan Mitsukoshi numbers and new MTP should end recent underperformance.
  • Excessive Nintendo weakness on PIF cutting holdings a chance to buy ahead of new NSW announcement.

Ohayo Japan | US Stocks Flatline as Post-Election Rally Loses Steam

By Mark Chadwick

  • The S&P 500 closed nearly unchanged on Wednesday, as traders digested the in-line October consumer price index report (+2.6%)
  • SoftBank has unveiled plans for an ambitious AI grid in Japan, aiming to deploy 200,000 mini data centers across the country.
  • Seven & i Holdings, owner of Japan’s 7-Eleven convenience stores, is exploring a potential management buyout valued at over ¥6 trillion

# 70 India Insight: SBI Climate Fund, IOCL Expansion, L&T Contract

By Sudarshan Bhandari

  • L&T Secures ‘Ultra Mega’ Contract for Thermal Power Plants with NTPC
  • Indian Oil Corporation Refinery Expansions to Conclude by December 2025
  • SBI Ventures Plans to raise INR 2,000 Crore Climate Fund

China Has Stockpiled Arsenals to Meet Trump’s Tariff War

By Andy Fu

  • Last week, China’s RmbB12tn debt swap plan fall short of investors’ expectations. The pattern of trying to control the release of stimulus and manage the expectations is obvious;
  • We notice that the government has injected more-than-required liquidity to the bank system. Such magnitude can only be explained by preparation for a long, drawn-out war; 
  • MOF’s injection to banks to beef up capital adequacy ratio likely indicates the amount of stimulus that is about to happen to reflate the balance sheets of the local governments.

Sustainable Investing Surveyor – November 11, 2024

By Water Tower Research

  • The WTR Sustainable Index was up 3.6% W/W versus the S&P 500 Index (up 4.7%), the Russell 2000 Index (up 8.6%) and the Nasdaq Index (down 3.7%).
  • Energy Technology (13.8% of the index) was down 0.3%, while Industrial Climate and Ag Technology (48.0% of the index) was up 5.3%, ClimateTech Mining was down 3%, and Advanced Transportation Solutions (20.8% of index) was up 3.2%.
  • Top 10 Performers: EXROF, FREY, GWTI-US, ZEV, BE, PSIX, NEOV, LICY, SMR-US

US Biofuels Outlook – Five Trends to Watch in 2025

By Water Tower Research

  • Despite the US biofuels industry facing challenges in 2024, including oversupplied renewable credit markets, lower-than- expected voluntary demand, election uncertainty, and a drop in profits, the industry made progress in many areas, including the advancement of sustainable aviation fuel (SAF) projects and hubs.
  • We highlight five biofuel trends that will continue to have an impact in 2025.
  • In 2024, the lack of guidance from the US Treasury Department on the 45Z clean fuel tax credit continued to be a key source of concern among biofuels producers, SAF project developers, and farmers.

Biopharma Week in Review – November 11, 2024

By Water Tower Research

  • We review last week’s biopharma news for meaningful clinical data, regulatory updates, research innovation, and M&A.
  • Last week, election headlines and earnings dominated the news cycle.
  • The Trump win could be positive for biopharma if RFK Jr.’s influence can be held in check.

Cannabis Trends Update – Five Factors That Will Drive 2025

By Water Tower Research

  • 2024 is shaping up to be another difficult year for cannabis investors.
  • The lack of federal reform and Florida failing to pass Amendment 3 have dampened spirits and lowered expectations, stock prices, and valuations as we head into the new year.
  • Below are five factors we expect to have an impact on the cannabis industry in 2025.

Furniture/Furnishings Weekly Post-Election Market Swings – November 11, 2024

By Water Tower Research

  • The markets moved sharply higher on Tuesday’s election results, with the ‘risk-on’ trade, lower uncertainty, enhanced prospects for domestic manufacturing given the incoming administration’s views on trade, and hopes for a ‘lighter’ regulatory approach boosting stocks.
  • The Water Tower Research Commercial/Contract Furniture Index was up 6.2% and the WTR Mass Retailers Index was up 4.7% for the week, while the WTR Residential Manufacturers & Suppliers Index was flat and the Home Goods Retailers Index was down 3%. The DJ30 and S&P 500 were both up 5% and the R2K was up 8.2%.
  • How should we explain this divergence? The Commercial/Contract Index likely benefited from expectations for stronger GDP growth and better profits, both catalysts for corporate investment. 

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Nov 14
0

Daily Brief ECM: Kansai Electric (9503 JP) – HUGE Equity Offering To Stuff Retail and more

By | Daily Briefs, ECM

In today’s briefing:

  • Kansai Electric (9503 JP) – HUGE Equity Offering To Stuff Retail
  • Kansai Electric Placement – A US$3.5bn Raising Which Doesn’t Appear Well Flagged
  • Kansai Electric Power (9503 JP): A US$3.5 Billion Primary/Secondary Offering
  • Initial Thoughts on the Klarna IPO
  • Zinka Logistics Pre-IPO – Continued Financial Underperformance in a Highly Fragmented Market
  • GMM Group Pre-IPO: Tuning into Thailand’s Digital Music Boom
  • Niva Bupa Health Insurance IPO Trading – Demand Lagged Recent Listings

Kansai Electric (9503 JP) – HUGE Equity Offering To Stuff Retail

By Travis Lundy

  • The past few years, large equity offerings have either been IPOs or secondary offerings (without dilution). Today we get a big dilutive secondary offering from Kansai Electric Power (9503 JP). 
  • This is ~223mm shares or roughly ¥530bn against a current market cap of ¥2.1+trln. A 25% increase in share count. It is quite dilutive, but the stock is not rich.
  • Because dilutive, not overly-well-flagged, and mostly retail, this could get hammered. The div is not high enough to make it attractive, so one has to appreciate high earnings yield.

Kansai Electric Placement – A US$3.5bn Raising Which Doesn’t Appear Well Flagged

By Sumeet Singh

  • Kansai Electric Power (9503 JP) plans to raise up to US$3.5bn (including over-allocation) to partly fund its investment plans.
  • This will be a large deal for the stock to digest and doesn’t appear to have been particularly well flagged.
  • In this note, we will talk about the placement and run the deal through our ECM framework.

Kansai Electric Power (9503 JP): A US$3.5 Billion Primary/Secondary Offering

By Arun George

  • Kansai Electric Power (9503 JP) has announced primary and secondary offerings of up to 223.1 million shares (including overallotment) and a third-party allotment of 29.1 million shares.
  • JPY239.9 billion of proceeds will be used to improve energy efficiency and decarbonisation, while other funds will be used for data centres, renewable energy and overseas investments.
  • Looking at recent large Japanese placements is instructive for understanding the potential offer price. The pricing date will fall between 26 and 29 November (likely 26 November).

Initial Thoughts on the Klarna IPO

By Douglas Kim

  • On 12 November, Klarna announced that it confidentially filed public offering paperwork. The company is getting ready for an IPO in 1H 2025.
  • Klarna’s valuation reached as high as $45 billion in 2021 which declined to as low as $6.5 billion. Its valuation has recently risen to about $14.6 billion. 
  • Klarna generated 13.27 billion SEK in revenue (US$1.2 billion) in 1H 2024 (up 27% YoY). Operating margin improved significantly from -18% in 1H 2023 to -2% in 1H 2024.

Zinka Logistics Pre-IPO – Continued Financial Underperformance in a Highly Fragmented Market

By Akshat Shah

  • Blackbuck (1355652D IN) is looking to raise around US$130m in its India IPO.
  • Zinka Logistics (Blackbuck) is India’s largest digital platform for truck operators (in terms of number of users), with 963,345 truck operators transacting on its platform in FY24, as per Redseer.
  • In this note, we talk about the company’s historical performance.

GMM Group Pre-IPO: Tuning into Thailand’s Digital Music Boom

By Nicholas Tan

  • GMM Music (2465778D TB) is looking to raise at least US $100m in its upcoming Thai IPO.
  • It is part of the largest, sprawling, public listed media conglomerate, GMM Grammy, and  operates a pure play music business covering the entire value chain.
  • In this note, we look at the firm’s past performance.

Niva Bupa Health Insurance IPO Trading – Demand Lagged Recent Listings

By Clarence Chu

  • Niva Bupa Health Insurance (1226871D IN) raised around US$260m in its India IPO.
  • Niva Bupa Health Insurance (Niva Bupa) is a health insurance firm. Its portfolio consists of health (including retail and group), personal accident, and travel insurance.
  • We have looked at the company’s past performance and valuations in our earlier notes. In this note, we talk about the trading dynamics.

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Nov 14
0

Daily Brief Event-Driven: Seven & I Holdings (3382 JP): The Rumoured MBO Price Underscores the Trapped Value and more

By | Daily Briefs, Event-Driven

In today’s briefing:

  • Seven & I Holdings (3382 JP): The Rumoured MBO Price Underscores the Trapped Value
  • KEPCO (9503 JP): Index Implications of US$3.5bn Primary + Secondary Offering
  • NTPC Green Energy IPO: Offer Details & Index Inclusion Timeline
  • StubWorld: Hanwha Corp; Genscript Biotech/Legend Biotech
  • INDIA: Index Changes Due to the 45 New Additions to the F&O Segment
  • 7&I (3382 JP) – An ITO Family MBO? With Itochu? At ¥9trln? Maybe. Information Is Scarce
  • Go Digit IPO Lockup – Promoters and Investors Could Look to Sell in the US$2.1bn Release

Seven & I Holdings (3382 JP): The Rumoured MBO Price Underscores the Trapped Value

By Arun George

  • In response to media reports, Seven & I Holdings (3382 JP) confirmed receiving a non-binding proposal from Junro Ito (founder’s son) and Ito-Kogyo. No terms were disclosed.
  • Bloomberg suggests an MBO deal worth up to JPY9 trillion (US$58 billion), which implies an offer of JPY3,467.89, a 39.3% premium to the last close price.
  • The “white knight” MBO undermines Alimentation Couche-Tard (ATD CN)’s offer and is a proxy for the restructuring plan’s value. Couche-Tard will likely walk if a binding MBO proposal emerges.

KEPCO (9503 JP): Index Implications of US$3.5bn Primary + Secondary Offering

By Brian Freitas

  • Kansai Electric Power (9503 JP) is looking to raise up to US$3.5bn via a primary offering and a sale of Treasury shares. Pricing date is between 26-29 November.
  • Kansai Electric Power (9503 JP) is among the better performing stocks from the Electric Utilities industry and trades at higher valuations compared to its peers.
  • There will be a fair bit of passive buying with around 29% of the offering being bought at the time of settlement of the shares.

NTPC Green Energy IPO: Offer Details & Index Inclusion Timeline

By Brian Freitas

  • NTPC Green Energy Ltd (2214556D IN) is looking to raise INR 100bn (US$1.19bn) in its IPO. That will value the company at INR 910bn (US$10.8bn) at the top end. 
  • The anchor allocations will be completed early next week, and the stock is expected to start trading on 27 November.
  • The stock will not get Fast Entry to global indices with the earliest inclusion scheduled for June 2025. So, limited passive buying in the medium-term.

StubWorld: Hanwha Corp; Genscript Biotech/Legend Biotech

By David Blennerhassett

  • Hanwha Corporation (000880 KS) is “expensive” on my monitor. But that doesn’t paint the whole picture. And what’s up with Genscript Biotech (1548 HK)‘s deconsolidation of Legend Biotech (LEGN US)?
  • Preceding my comments on Hanwha and Genscript Biotech/Legend Biotech are the current setup/unwind tables for Asia-Pacific Holdcos.
  • These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation >20%.

INDIA: Index Changes Due to the 45 New Additions to the F&O Segment

By Brian Freitas

7&I (3382 JP) – An ITO Family MBO? With Itochu? At ¥9trln? Maybe. Information Is Scarce

By Travis Lundy

  • Yesterday a news article from Bloomberg suggested 7&i was “considering” an MBO. Seven & I Holdings (3382 JP) later confirmed they had received a non-binding proposal from ITO Junro/family.
  • The initial number was ¥9trln. If market cap? High. If EV, too low. That would have implied a price just over the first “grossly inadequate” ACT price.
  • There is a lot we don’t know. This changes the landscape. It probably shifts the range trade, but it will shift more when we get more clarity on ITO-san’s price.

Go Digit IPO Lockup – Promoters and Investors Could Look to Sell in the US$2.1bn Release

By Sumeet Singh

  • Go Digit General Insurance raised US$315m in its India IPO in May 2024, via selling a mix of primary and secondary shares. Its IPO lockup is set to expire soon.
  • Go Digit General Insurance is a digital full stack insurance company, offering motor insurance, health insurance, travel insurance, property insurance, marine insurance, liability insurance and other insurance products.
  • In this note, we will talk about the lockup dynamics and possible placement.

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Nov 14
0

Daily Brief Equity Bottom-Up: Tencent (700 HK): 3Q24 and more

By | Daily Briefs, Equity Bottom-Up

In today’s briefing:

  • Tencent (700 HK): 3Q24, Better Game Revenue and Better Gross Margins
  • Trump Trade: Korean Construction Vs Military Stocks Amid Potential End of War in Ukraine?
  • Sea (SE US): Strong 3Q, Upbeat Management Talk Fires up the Stock
  • Episode 93: Arm/QCOM Earnings, Trump Presidency Impact on Semis, NVDA Preview
  • Technically Speaking, Breakouts and Breakdowns: HONG KONG (NOVEMBER 13)
  • Never Too Late to Chase the Rally! Prologis, the World’s Leading Logistics Company
  • Paladin Pummelled 29% on Production Downgrade
  • SharkNinja Inc.: Its Efforts Towards Product Innovation & Diversification & Major Drivers
  • Tech Supply Chain Tracker (14-Nov-2024): Foxconn reforms boost Sharp’s profits.
  • Nexon (3659) | Down 17% on Quarterly Miss!

Tencent (700 HK): 3Q24, Better Game Revenue and Better Gross Margins

By Ming Lu

  • In 3Q24, game revenue increased by 13% YoY, higher than our estimate, 9% YoY.
  • The gross margins of all business lines improve in 3Q24, especially “others”.
  • We set the upside at 50% and the price target at HK$605 for the end of 2025. Buy.

Trump Trade: Korean Construction Vs Military Stocks Amid Potential End of War in Ukraine?

By Douglas Kim

  • Although it is UNCERTAIN when the wars in Ukraine and the Middle East will end, if these wars indeed come to an end, this could POSITIVELY IMPACT Korean construction sector.
  • The end of the wars in Ukraine and the Middle East is likely to NEGATIVELY IMPACT the Korean military/defense sector. 
  • The major Korean construction companies have low valuation multiples. On the other hand, the major Korean military/defense companies have high valuation multiples.

Sea (SE US): Strong 3Q, Upbeat Management Talk Fires up the Stock

By Devi Subhakesan

  • Sea (SE US) ‘s management expects all three business segments – ecommerce, financial services and entertainment – to deliver high growth and profitability in 2025, supported by strong macro-eceonomic tailwind.
  • It’s GAAP revenue was US$4.3 billion, up 30.8% year-on-year and net income was US$153.3 million, as compared to total net loss of US$(144.0) million for 3Q2023.
  • Its e-commerce business achieved positive adjusted EBITDA in 3Q 2024 in both Asia markets and Brazil.

Episode 93: Arm/QCOM Earnings, Trump Presidency Impact on Semis, NVDA Preview

By The Circuit

  • ARM reported good numbers with steady guidance for the coming quarter.
  • Qualcomm’s earnings performed well, but concerns exist over rising costs and potential loss of customers.
  • Uncertainty surrounds US government policies on semiconductor manufacturing and trade with China, impacting industry players like Intel and Nvidia.

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

Technically Speaking, Breakouts and Breakdowns: HONG KONG (NOVEMBER 13)

By David Mudd

Never Too Late to Chase the Rally! Prologis, the World’s Leading Logistics Company

By Jacob Cheng

  • US market continues to see historical high; in the real estate space, we look at Prologis, the world’s largest logistics company
  • We like the sector on the back of strong structural demand drivers and depleting supply.  Logistics is the future and we think Prologis is the name to own
  • Broader real estate index is up 8.3% YTD, while PLD is down -15% YTD.  Valuation is attractive, we think PLD has room to catch up

Paladin Pummelled 29% on Production Downgrade

By Money of Mine

  • Paladin Energy faces water supply disruptions from NAM Water in Namibia, leading to a drop in guidance for Langer Heinrich uranium mine.
  • The company has adjusted its FY25 uranium production guidance from 4-4.2 million pounds to 3-3.6 million pounds.
  • Despite the challenges, Paladin Energy remains confident in meeting customer delivery obligations and has flexibility in contracts to manage the situation.

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

SharkNinja Inc.: Its Efforts Towards Product Innovation & Diversification & Major Drivers

By Baptista Research

  • SharkNinja’s third quarter of 2024 financial performance highlighted several strengths and strategic initiatives that point to its robust market position and growth trajectory, balanced by some areas of concern that underline potential risks.
  • Displaying a strong performance in adjusted net sales and adjusted EBITDA growth, SharkNinja reported substantial year-over-year increases, demonstrating resilience and strategic agility in a fluctuating economic environment.
  • The global teams’ efforts mirrored in a 35% rise in adjusted net sales and 26% growth in adjusted EBITDA, showcasing strong operational execution and market responsiveness.

Tech Supply Chain Tracker (14-Nov-2024): Foxconn reforms boost Sharp’s profits.

By Tech Supply Chain Tracker

  • Foxconn’s reforms at Sharp result in significant profit growth in 2Q24.
  • Taiwan supply chains brace for impact of Trump’s imminent global tariffs.
  • Apple to boost iPhone production in India following Trump victory, taking advantage of evolving global trade dynamics.

Nexon (3659) | Down 17% on Quarterly Miss!

By Mark Chadwick

  • Nexon’s 3Q24 earnings report saw its stock dip -17% as revenue missed guidance and foreign exchange losses weighed on the bottom line.
  • Nexon’s operating profit rose +11% y/y to ¥51 billion, with an operating margin of 38%
  • The stock is trading at 8.5x EBITDA, which makes it very attractive versus the sector

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Nov 14
0

Daily Brief Macro: Weather Favorable For Rubber In Thailand But Can Trouble Indonesia and more

By | Daily Briefs, Macro

In today’s briefing:

  • Weather Favorable For Rubber In Thailand But Can Trouble Indonesia, Vietnam
  • The Drill: A Look at Trump’s Policy and Their Impacts
  • US CPI Keeps December Cut Alive
  • Steno Signals #126: Disentangling the ECB Schnabel Speech – How Will QT Develop from Here?
  • At Any Rate: Treasury Futures Quarterly Roll

Weather Favorable For Rubber In Thailand But Can Trouble Indonesia, Vietnam

By Vinod Nedumudy

  • Thailand likely to receive less rains in the coming one-month period  
  • Indonesia, Vietnam, Cambodia likely to have above normal rains  
  • WMO predicts 60% chances of La Nina developing

The Drill: A Look at Trump’s Policy and Their Impacts

By Ulrik Simmelholt

  • Before we get to Trump, we need to quickly discuss OPEC and their recent cut in demand forecasts.
  • This reduction hints at an unwillingness to increase production in the near future.
  • Saudi Arabia is key here, as it holds the largest excess capacity, and a production hike from them could swing the market and send prices below $50 USD in the blink of an eye.

US CPI Keeps December Cut Alive

By Phil Rush

  • US inflation’s unsurprising October print should reassure market expectations for a December rate cut after pricing became overextended by post-election exuberance.
  • Although the seasonally adjusted rates annualised above the target again, unadjusted rates are trending at dovishly subdued levels, with no headline exceptions since April.
  • These numbers are arguably old news but don’t discourage a December cut. The shocks from Trump policies won’t hit until 2025 and pre-empting them seems too presumptive.

Steno Signals #126: Disentangling the ECB Schnabel Speech – How Will QT Develop from Here?

By Andreas Steno

  • We’re at a critical juncture in sovereign bond markets, with liquidity running razor-thin and the game changing fast.
  • German Bunds, traditionally rock-solid, are now trading through swaps and nearing zero on cross-currency swaps (ESTRON/SOFR) – a first in modern market history.
  • The takeaway? Major central banks, especially the ECB, are pressing too hard on QT, and the markets are about to hit back hard if they don’t ease up soon.

At Any Rate: Treasury Futures Quarterly Roll

By At Any Rate

  • Discussion on US elections and Fed policy implications
  • Impact of policy uncertainty on calendar spreads and wild card options
  • Investor positioning and its influence on various bond contracts

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

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