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Smartkarma Daily Briefs

Daily Brief Utilities: China Oil And Gas and more

By | Daily Briefs, Utilities Sector

In today’s briefing:

  • China Oil & Gas – Earnings Flash – FY 2023 Results – Lucror Analytics


China Oil & Gas – Earnings Flash – FY 2023 Results – Lucror Analytics

By Leonard Law, CFA

COG’s FY 2023 results were acceptable in our view. Importantly, the audit issues resulting in the belated publication of results appear to be minor, with auditor PwC giving a clean audit opinion overall. Leverage was largely stable despite the soft earnings, thanks to debt reduction. In addition, we view positively that the guarantees provided to associate Shandong Shengli (which we classify under debt) have largely fallen away. COG’s liquidity is adequate, as the company is poised to refinance the bridge loan using a new syndicated loan facility.

We move our recommendation to “Buy” from “Hold” on the CHIOIL 4.7 ’26s.


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Daily Brief Industrials: Keisei Electric Railway Co, Premier Energies Limited, Matthews Intl Corp Class A and more

By | Daily Briefs, Industrials

In today’s briefing:

  • Keisei Electric Rail (9009): For Relative Value Trade
  • Premier Energies Ltd IPO- Forensic Analysis
  • Matthews Intl Corp -Cl A (MATW) – Tuesday, Jan 30, 2024


Keisei Electric Rail (9009): For Relative Value Trade

By Henry Soediarko

  • The activist investor is back and has demanded further action to unlock value from Keisei Electric Railway Co (9009 JP)  management.
  • Operational numbers are still healthy, but growth is not as large due to the high base.
  • Immediate pressure to divest Oriental Land thus short Oriental Land (4661 JP)  and long Keisei.

Premier Energies Ltd IPO- Forensic Analysis

By Nitin Mangal

  • Premier Energies Limited (0377949D IN) is into manufacturing of solar cells and modules. The company is the second largest integrated player (cell+module) in India with a market share of 28%
  • The business has picked up in the last two years. Revenues, order book and capacities have increased and margins have also seen improvement. 
  • However, the company is struggling on cash conversion on the back of highly levered balance sheet. Focus should also be on few questionable related party transactions.

Matthews Intl Corp -Cl A (MATW) – Tuesday, Jan 30, 2024

By Value Investors Club

  • Matthews International is an undervalued diversified industrial company
  • The potential IPO of its machinery segment for dry battery electrodes could unlock value
  • The Industrial Technology segment, with Tesla as a customer, has significant potential for growth and value creation

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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Daily Brief Industrials: Keisei Electric Railway Co, Premier Energies Limited, Matthews Intl Corp Class A and more

By | Daily Briefs, Industrials

In today’s briefing:

  • Keisei Electric Rail (9009): For Relative Value Trade
  • Premier Energies Ltd IPO- Forensic Analysis
  • Matthews Intl Corp -Cl A (MATW) – Tuesday, Jan 30, 2024


Keisei Electric Rail (9009): For Relative Value Trade

By Henry Soediarko

  • The activist investor is back and has demanded further action to unlock value from Keisei Electric Railway Co (9009 JP)  management.
  • Operational numbers are still healthy, but growth is not as large due to the high base.
  • Immediate pressure to divest Oriental Land thus short Oriental Land (4661 JP)  and long Keisei.

Premier Energies Ltd IPO- Forensic Analysis

By Nitin Mangal

  • Premier Energies Limited (0377949D IN) is into manufacturing of solar cells and modules. The company is the second largest integrated player (cell+module) in India with a market share of 28%
  • The business has picked up in the last two years. Revenues, order book and capacities have increased and margins have also seen improvement. 
  • However, the company is struggling on cash conversion on the back of highly levered balance sheet. Focus should also be on few questionable related party transactions.

Matthews Intl Corp -Cl A (MATW) – Tuesday, Jan 30, 2024

By Value Investors Club

  • Matthews International is an undervalued diversified industrial company
  • The potential IPO of its machinery segment for dry battery electrodes could unlock value
  • The Industrial Technology segment, with Tesla as a customer, has significant potential for growth and value creation

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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Daily Brief Energy/Materials: Sumitomo Chemical, EcoPro Materials, Shin Etsu Chemical, GCC SAB de CV, West China Cement, Panoro Energy ASA, OCI NV, Orezone Gold , Cleveland-Cliffs Inc , Rent.com.au Ltd and more

By | Daily Briefs, Energy & Materials Sector

In today’s briefing:

  • Sumitomo Chemical (4005): Up Is Down
  • End of Mandatory Lock-Up Periods for 54 Companies in Korea in May 2024
  • Shin-Etsu (4063) – Too High, Too Fast
  • GCC (Outperform): Results 1Q24; Positive Q-Report Beating Our Estimates
  • Morning Views Asia: Nickel Industries , West China Cement
  • Panoro Energy ASA (OSE: PEN): Drilling to Restart in EG in June.
  • Oci N.V. (OCI NA) – Tuesday, Jan 30, 2024
  • Orezone Gold Corp (ORE.) – Monday, Jan 29, 2024
  • Cleveland-Cliffs Inc.: Focus On Decarbonization
  • Rent.com.au Ltd – Best ever revenue result, RentPay surpasses $250m


Sumitomo Chemical (4005): Up Is Down

By Michael Allen

  • Sumitomo issued new guidance for the year to 3/25 that was 40% higher than consensus estimates, but the stock cratered almost 5%.
  • We were able to think of at least 6 explanations for this odd reaction – all of them irrational.  
  • A reasonable person listening to the call should have been pleased by almost all that was new information. 

End of Mandatory Lock-Up Periods for 54 Companies in Korea in May 2024

By Douglas Kim

  • We discuss the end of the mandatory lock-up periods for 54 stocks in Korea in May 2024, among which 4 are in KOSPI and 50 are in KOSDAQ.
  • These 54 stocks on average could be subject to further selling pressures in May and could underperform relative to the market.
  • The top three market cap stocks including those of which at least 1% of outstanding shares could be sold in May include EcoPro Materials, Enchem, and Gaonchips. 

Shin-Etsu (4063) – Too High, Too Fast

By Michael Allen

  • On April 24, Shin-Etsu (4063) posted its fifth consecutive OP decline and guided for a sixth, but the stock has outperformed Topix by 22% in the past 12 months. 
  • OP for the year ended March 2024 was JPY141.5bn, vs. consensus estimates of JPY168.9bn. This was the fifth consecutive miss, and the fourth of more than 10%. 
  • The Chinese economy is killing the company’s core core Polyvinyl Chloride Resins business and seemingly interminable inventory issues are holding back a recovery in the semiconductor materials business. 

GCC (Outperform): Results 1Q24; Positive Q-Report Beating Our Estimates

By Actinver

  • GCC (Outperform): posted positive results, which are above our estimates.
  • Higher prices in cement and ready-mix supported solid results.
  • Consolidated EBITDA increased +32% YoY, while the EBITDA margin reached 30.4% (+4.6 pp. YoY).

Morning Views Asia: Nickel Industries , West China Cement

By Leonard Law, CFA

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.


Panoro Energy ASA (OSE: PEN): Drilling to Restart in EG in June.

By Auctus Advisors

  • Positive update in Gabon. 1Q24 gross production was 24,840 boe/d increasing to 29,800 boe/d to date in 2Q24 (Panoro WI: 17.5%).
  • The increasing production reflects the first Hibiscus South well coming on stream in March and encouraging production performance from two wells on ESP at Hibiscus.
  • A third Hibiscus well continues to produce on natural flow at high rate.

Oci N.V. (OCI NA) – Tuesday, Jan 30, 2024

By Value Investors Club

  • OCI N.V. is selling off assets to focus on a more streamlined operation and benefit from energy transition trends
  • The sale of OCI’s stake in Fertiglobe to ADNOC for $3.62 billion was a result of pressure from Inclusive Capital, led by Jeffrey Uben
  • The company will have a strong net cash position and is positioned to capitalize on future opportunities at a low multiple of normalized EBITDA

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.


Orezone Gold Corp (ORE.) – Monday, Jan 29, 2024

By Value Investors Club

  • Orezone owns a 90% stake in the Bomboré Gold Mine in Burkina Faso which is already in production and generating cash
  • The mine faced challenges in 2023 but saw improvements in ore processing and gold production in Q4
  • Completion of the Bomboré powerline project has reduced costs, presenting an attractive opportunity for investors in the growing gold sector in West Africa

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.


Cleveland-Cliffs Inc.: Focus On Decarbonization

By Baptista Research

  • Cleveland-Cliffs Inc in their Q1 2024 Earnings has placed particular emphasize on their tactic of share buybacks as an essential capital allocation method.
  • During this time period, the firm was able to procure over 30 million of its own shares, utilizing approximately $608 million from a previous $1 billion share buyback program announced in 2022.
  • Over the past few years, the company’s diluted share count has been lowered by over 100 million shares, reflecting a significant 17% reduction and pointing to an average purchase price of $18.79 per share, a price point considerably lower than the current trading price.

Rent.com.au Ltd – Best ever revenue result, RentPay surpasses $250m

By Research as a Service (RaaS)

  • Rent.com.au Limited (ASX:RNT) is a purpose-led company seeking to empower home renters through its technology platform and a growing number of aligned transactional services.
  • The company has reported its best ever quarterly revenue result with total revenue increasing 41% on the previous corresponding period (pcp) to $0.89m.
  • The result was driven by a 25% year-on-year improvement in search portal revenue and a 144% increase in RentPay revenue.

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Daily Brief TMT/Internet: Mediatek Inc, Krafton , Taiwan Semiconductor (TSMC) – ADR, Asustek Computer, Tech Mahindra, TBO Tek, Vanguard Intl Semiconductor, Visa, Texas Instruments, SmartRent and more

By | Daily Briefs, TMT/Internet

In today’s briefing:

  • Tech Supply Chain Tracker (30-Apr-2024): AI server cooling: liquid & air solutions
  • Alpha Generation Through Share Buybacks in Korea: Bi-Monthly (Mar and Apr 2024)
  • Deep Dive Into Samsung’s Memory & Foundry Results: TSMC, AI PC, Server, AI Phone Implications
  • PC Monitor: The Next Version of MSFT CoPilot Will Be the Killer App for a Global AI PC Upgrade Cycle
  • Mohit Joshi: The Man Behind Tech Mahindra’s Strategic Shift
  • TBO Tek Pre-IPO – Refiling Updates & Peer Comparison
  • Vanguard (5347.TT):  1Q24 Sales Did Reach the Bottom, and 2Q24F Rebounds ~15% QoQ in Sales.
  • Visa Inc.: How Is It Capturing Market Share From Domestic Card Networks? – Major Drivers
  • Texas Instruments: Fresh Investments In Manufacturing & Technology & 5 Critical Growth Drivers
  • Smartrent Inc (SMRT) – Tuesday, Jan 30, 2024


Tech Supply Chain Tracker (30-Apr-2024): AI server cooling: liquid & air solutions

By Tech Supply Chain Tracker

  • AI server cooling options include liquid & air solutions to improve efficiency and performance.
  • India is set to introduce a new chip incentive package to boost its semiconductor industry.
  • Apple’s supply chain expansion in Southeast Asia, especially Vietnam, has been significant, while MediaTek aims for 30% market share in China with upcoming flagship SoC.

Alpha Generation Through Share Buybacks in Korea: Bi-Monthly (Mar and Apr 2024)

By Douglas Kim

  • In this insight, we discuss the alpha generation through companies that announced share buybacks in Korea in March and April 2024.
  • We provide a list of 30 stocks in the Korean stock market that have announced share buyback programs in the past two months.
  • Major companies that have announced share buybacks in Korea in the past two months include Krafton (259960 KS), Celltrion Inc (068270 KS), and Woori Financial Group (316140 KS).

Deep Dive Into Samsung’s Memory & Foundry Results: TSMC, AI PC, Server, AI Phone Implications

By Vincent Fernando, CFA

  • Samsung 1Q24 results beat consensus by a wide margin and the company gave strong guidance for its Memory segment, guiding for further strength driven by servers, PCs, & phones needs.
  • Guided strong demand for PC/Mobile Memory in 2H24E driven by on-device AI, which supports the case of edge AI hardware beginning to drive demand in addition to cloud/server-based AI hardware.
  • Foundry segment’s losses reduced, but still loss-making? Samsung’s order backlog is at an all-time high but Samsung Foundry results suggest manufacturing yield performance likely well behind TSMC.

PC Monitor: The Next Version of MSFT CoPilot Will Be the Killer App for a Global AI PC Upgrade Cycle

By Vincent Fernando, CFA

  • Branded PC makers’ shares have been mostly lower in April, however Intel and Microsoft developments are providing strong signals for a future PC upgrade cycle into AI PCs.
  • Over 60% of Fortune 500 companies are now using Microsoft’s CoPilot AI assistant; Intel expects the industry to exceed its prior forecast for AI PC shipments in 2024E.
  • CoPilot is the killer app that will trigger a global enterprise PC upgrade cycle; The next generation of CoPilot will be an edge AI app that will require powerful hardware.

Mohit Joshi: The Man Behind Tech Mahindra’s Strategic Shift

By Sudarshan Bhandari

  • Under Mohit Joshi’s leadership, Tech Mahindra (TECHM IN) targets a 15%+ EBIT margin and revenue growth surpassing industry averages by FY2027, with a focus on operational reform and portfolio integration.
  • Project Fortius aims to achieve $250 million annual cost savings over 3 years, emphasizing high-margin services and organic growth, signaling a departure from  reliance on traditional acquisitions.
  • This strategic shift towards operational efficiency and organic growth alters the company’s outlook, positioning Tech Mahindra for sustainable growth and shareholder returns, underlining a commitment to long-term value creation.

TBO Tek Pre-IPO – Refiling Updates & Peer Comparison

By Ethan Aw

  • TBO Tek (0395045D IN) is looking to raise approximately US$200m in its upcoming India IPO.
  • TBO Tek is a global travel distribution platform. Its two-sided technology platform serves companies involved in the travel industry such as hotels, airlines, travel agencies and travel management companies.
  • In our previous note, we talked about the company’s historical performance. In this note, we talk about its refiling updates and undertake a peer comparison.

Vanguard (5347.TT):  1Q24 Sales Did Reach the Bottom, and 2Q24F Rebounds ~15% QoQ in Sales.

By Patrick Liao

  • 1Q24 sales reached 96% of 4Q23, the recent low of sales, but GM upside 1% QoQ.   
  • Demand is gradually picking up in 2Q24F, but inventory adjustments for industrial and automotive applications are ongoing.  
  • Specifically speaking, in 2Q24 we expect to see a revival in demand, with QCOQ and MPS potentially beginning to place orders in Fab 5.

Visa Inc.: How Is It Capturing Market Share From Domestic Card Networks? – Major Drivers

By Baptista Research

  • Visa’s Fiscal Second Quarter 2024 Earnings indicate that Visa appears to be standing on solid financial ground with plenty of room for growth.
  • The leading global payments technology company recorded $8.8 billion in net revenue for the quarter, marking a 10% increase.
  • Its GAAP Earnings Per Share (EPS) rose by 12%, while non-GAAP EPS also saw an upward movement by 20%.

Texas Instruments: Fresh Investments In Manufacturing & Technology & 5 Critical Growth Drivers

By Baptista Research

  • Texas Instruments (TI) reported a first quarter of 2024 revenue that met expectations, despite witnessing a 10% sequential and 16% year-over-year decrease to $3.7bn.
  • Revenue declined across all of its end markets as customers continued to pare their inventory levels.
  • In terms of individual revenue components, Analog revenue declined 14% year-over-year, Embedded Processing declined 22%, and the Other segment declined 33% from the year-ago quarter.

Smartrent Inc (SMRT) – Tuesday, Jan 30, 2024

By Value Investors Club

  • SmartRent aims to increase their market share in the smart home solutions industry, specifically in the multifamily real estate sector in the US
  • They leverage their innovative Smart Home Operating System to lower costs for landlords and increase revenues through enhanced property management capabilities
  • SmartRent’s three business lines offer a comprehensive and scalable solution for property owners, with a focus on professional services, hardware sales, and hosted services to capitalize on the growing demand for smart home technologies in the real estate market.

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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Daily Brief Health Care: Ono Pharmaceutical, S&P 500 INDEX, Hansoh Pharmaceutical Group , Novartis and more

By | Daily Briefs, Healthcare

In today’s briefing:

  • Ono Pharmaceutical (4528 JP): Deciphera Acquisition Will Not Bring Immediate Respite
  • Are the Lows “In” For This Pullback?; Market Dynamics Remain Bullish; Key Supports Holding
  • Hansoh Pharmaceutical (3692.HK) – Growth Would Remain Strong in 2024, but Ameile Is Facing Headwinds
  • Novartis AG: Positive Expectations for Scemblix & 5 Other Major Developments


Ono Pharmaceutical (4528 JP): Deciphera Acquisition Will Not Bring Immediate Respite

By Tina Banerjee

  • Ono Pharmaceutical (4528 JP) is acquiring Deciphera Pharmaceuticals (DCPH US) for $25.60/share in cash through a tender offer. The total equity value of the acquisition is approximately $2.4B.
  • Ono is expected to reap the benefit of Deciphera acquisition earliest from FY27. In the short-run, the company’s major problem of loss of revenue will not be addressed.
  • Ono needs to stretch its balance sheet to fund Deciphera acquisition. The acquisition will be earnings dilutive for Ono. Pricey valuation of the deal is another deterrent.

Are the Lows “In” For This Pullback?; Market Dynamics Remain Bullish; Key Supports Holding

By Joe Jasper

  • While we are not yet out of the woods, we continue to see evidence that suggests the lows may be “in” for this pullback.
  • Last week (4/23/24 Compass) we discussed the possibility that further downside was limited on the S&P 500 due to a multitude of reasons
  • We view the latest pullback to 100-day MA on SPX as healthy/normal within the ongoing bull market. Pullbacks to the 100-day provided ideal entry points throughout the 2021 bull market

Hansoh Pharmaceutical (3692.HK) – Growth Would Remain Strong in 2024, but Ameile Is Facing Headwinds

By Xinyao (Criss) Wang

  • Hansoh’s performance in 2023 beat expectations, which was mainly driven by collaboration revenue. Revenue proportion of innovative drug business made breakthrough and has become the major performance driver.
  • Ameile’s future revenue growth is critical to Hansoh, but it faces increasing competition. EGFR/c-MET BsAb represents the future trend. If HS-20117 is successful, then the story of EGFR would continue.
  • In 2024, Hansoh is expected to receive an upfront payment of US$185 million from GSK. According to the management, revenue is expected to have double digit growth this year.

Novartis AG: Positive Expectations for Scemblix & 5 Other Major Developments

By Baptista Research

  • In Q1 2024, Novartis delivered robust growth, reflecting in a double-digit sales growth and core margin expansion.
  • Sales were up by 11% in constant currency, and core operating income was up by 22%.
  • The core margin reached 38.4%, inching steadily towards the set goal of over 40% by 2027.

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Daily Brief Financials: HDFC Bank, HDFC Limited, Bank Negara Indonesia Persero, Kemper Corp and more

By | Daily Briefs, Financials

In today’s briefing:

  • HDFC Bank (HDFCB): Looking Beyond Short-Term Headwinds
  • Indian Banks Screener FYE24, Part 1: We like Quality Name HDFC Bank, Baroda Is the Value Pick
  • Bank Negara Indonesia (BBNI IJ) – The Bank Has Levers to Pull On
  • Kemper Corporation (KMPR) – Tuesday, Jan 30, 2024


HDFC Bank (HDFCB): Looking Beyond Short-Term Headwinds

By Ankit Agrawal, CFA

  • While HDFCB’s results have been somewhat lackluster over the past couple of quarters, this has been largely due to merger-related drags, tight liquidity and irrational competition in the marketplace.
  • From a medium-to-long-term perspective, the growth prospects for HDFCB remain tremendously attractive despite its large size, as evident from its consistent market share gains in deposits.
  • Q4FY24 earnings came largely in line with the expectation in terms of core earnings, except for one-off gain from an asset sale that was more than offset by floating provisions.

Indian Banks Screener FYE24, Part 1: We like Quality Name HDFC Bank, Baroda Is the Value Pick

By Victor Galliano

  • HDFC Bank results to FYE24 are improving and we retain it as a buy, with pre-provision returns improving slightly QoQ and best in peer group NPL ratio and coverage
  • Bank of Baroda is our core value Indian bank pick, for its undemanding valuations, healthy ROE and potential for NPL improvements
  • Bandhan bank is a potential contrarian pick for its value attributes; we are cautious on State Bank of India for its delinquency risks, low core capital ratio 

Bank Negara Indonesia (BBNI IJ) – The Bank Has Levers to Pull On

By Angus Mackintosh

  • Bank Negara Indonesia (BBNI IJ) booked a solid set of 1Q2024 results driven by +9.6% YoY growth in loans, despite being hampered by higher cost of funds amid tighter liquidity.
  • Loan growth was driven by corporate lending, with corporate SOE lending showing the strongest growth and consumer loans. Funding was driven by CASA growth which limited the squeeze on NIMs. 
  • Bank Negara Indonesia booked strong growth in fee income and a reduction in provisions which helped to offset the margin squeeze. Valuations remain attractive on 1.2x FY2024E PBV.

Kemper Corporation (KMPR) – Tuesday, Jan 30, 2024

By Value Investors Club

  • Kemper’s sale under this new structure in the third quarter of 2023 could boost shareholder value
  • It would bring Kemper’s valuation closer to its peers in the industry
  • Kemper’s profitable underwriting and unique business model make it an appealing investment for long-term value investors

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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Daily Brief Consumer: IDP Education, Endeavour Group /Australia, Super Hi International Holding, CJ Cheiljedang, Puig Brands , Astra International, L’Occitane, Tesla , Luckin Coffee, Netflix Inc and more

By | Consumer, Daily Briefs

In today’s briefing:

  • Tax-Loss Selling in Australia 2024 – Historical Analysis and A Trade Basket
  • Endeavour Group Placement – While There Is an Overhang, Selldown Now Appears Well Flagged
  • Super Hi International US ADS – Has Been Doing Well but Doesn’t Really Need the Cash
  • Leading Candidates for the First Value-Up Disclosure
  • Listing of a Beauty Giant
  • Astra International (ASII IJ) – Striking a Balance with Finance
  • (Mostly) Asia M&A, April 2024: Austal, L’Occitane, Langham Hosp., Jastec, Mimasu, Best World, Isetan
  • Tesla Inc.: Growth As An AI Company And Its Future in Power Generation and Distributed Computing! – Major Drivers
  • [Luckin (LKNCY US, SELL, TP US$17) Rating Change]: Old Tricks Might Have Run Out of Its Use
  • Netflix Inc.: A Shift In Reporting Focus from Subscriptions to Revenue and Engagement – But What Lies Ahead? – Major Drivers


Tax-Loss Selling in Australia 2024 – Historical Analysis and A Trade Basket

By Travis Lundy

  • I am not a tax advisor and I do not play one on TV but it is a subject of interest in Australia, as an AFR article from June 2022 shows.
  • The general gist: retail investors in Australia will take gains on stocks which run up in price, or get taken over, then look for losses to offset.
  • Below I present a study using data from 2012-2023 and this year’s portfolio.

Endeavour Group Placement – While There Is an Overhang, Selldown Now Appears Well Flagged

By Clarence Chu

  • Woolworths Ltd (WOW AU) is looking to raise A$468m (US$305m) from selling its stake in Endeavour Group /Australia (EDV AU).
  • Endeavour Group was demerged from Woolworths in Jun 2021 and it runs the drinks and hospitality business of Woolworths.
  • In this note, we will talk about the deal dynamics and run the deal through our ECM framework.

Super Hi International US ADS – Has Been Doing Well but Doesn’t Really Need the Cash

By Sumeet Singh

  • Super Hi International Holding (9658 HK) aims to raise around US$100m in its US ADR IPO. MS and Huatai are on the deal.
  • Super Hi International (SHI) is a Chinese cuisine restaurant brand, operating Haidilao hot pot restaurants in the international market. 
  • In this note, we talk about the deal dynamics and the listing impact.

Leading Candidates for the First Value-Up Disclosure

By Sanghyun Park

  • Of utmost importance in these guidelines will be the framework for Value-up disclosure. Local authorities aim to encourage proactive disclosure, starting with companies that are well-prepared.
  • Two companies are being closely watched as potential candidates for the first Value-up disclosure: CJ Cheiljedang (097950 KS) and Koh Young Technology (098460 KS).
  • The rationale for us to actively engage in alpha trading with these two names stems from the strong probability that they will emerge as cornerstone constituents of the Value-up index

Listing of a Beauty Giant

By Jesus Rodriguez Aguilar

  • Puig Brands (PUIG SM) will start trading next Friday 3 May at 12:00. The placement price was €24.5/share at the top of the range (which was increased due to investors’ demand).
  • Puig, valued at €13,900 million, has placed 32% of its capital among qualified investors. The Puig family will retain over 90% of the voting rights through their Class A shares.
  • Puig will foreseeably enter the Ibex 35 after the ordinary meeting of the Ibex Technical Advisory Committee corresponding to the month of December.

Astra International (ASII IJ) – Striking a Balance with Finance

By Angus Mackintosh

  • Astra International (ASII IJ) just released 1Q2024 results, which reflected the softer auto and heavy equipment markets, although buoyed by better earnings for its finance arm, 
  • The company’s headline net profit was down -14% YoY but stripping out value adjustments was only down -5% YoY, with management optimistic over the longer term. 
  • Astra continues to mirror the Indonesian economy, with its latest investment in geothermal but its nickel businesses also growing. Valuations attractive on 6.6x FY2024E PER and a 7.2% dividend yield. 

(Mostly) Asia M&A, April 2024: Austal, L’Occitane, Langham Hosp., Jastec, Mimasu, Best World, Isetan

By David Blennerhassett

  • For the month of April 2024, 7 new transactions (firm and non-binding) were discussed on Smartkarma with an overall announced deal size of ~US$4bn
  • The average premium for the new transactions announced (or first discussed) in April was ~55%. The average premium YTD is ~42%
  • This compares to the average premium for transactions in 2023 (117 transactions), 2022 (106), 2021 (165), 2020 (158), and 2019 (145 ) of 39%, 41%, 33%, 31%, and 31% respectively.

Tesla Inc.: Growth As An AI Company And Its Future in Power Generation and Distributed Computing! – Major Drivers

By Baptista Research

  • Tesla Inc.’s first-quarter earnings for 2024 offered a critical and insightful update on the electric vehicle manufacturer’s strategy and financial performance.
  • Tesla appears committed to its strategic focus on vehicle autonomy and digitisation, with CEO Elon Musk stating that the company should be viewed primarily as an AI (Artificial Intelligence) and robotics firm, underlining its commitment to Full Self-Driving (FSD) as a key future revenue stream.
  • Baptista Research looks to evaluate the different factors that could influence the company’s price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology.

[Luckin (LKNCY US, SELL, TP US$17) Rating Change]: Old Tricks Might Have Run Out of Its Use

By Eric Wen

  • Despite Cotti’s difficulties, we are seeing intensified competition with well-funded competitors like Starbucks and KFC, joining the price war, which poses challenges to Luckin’s effort at raising prices.
  • We see Luckin at losing its coffee differentiation. We revised down average store sales growth to (5%)/(10%)YoY due to weak sales caused by the narrowing scope of the RMB9.9 promotion
  • We downgrade the stock rating from BUY to SELL and lower TP to US$17/ADS.

Netflix Inc.: A Shift In Reporting Focus from Subscriptions to Revenue and Engagement – But What Lies Ahead? – Major Drivers

By Baptista Research

  • Netflix Inc.’s Q1 2024 earnings highlighted a number of impactful developments and strategic shifts that investors should consider.
  • The company’s management team made it clear that while they’ll no longer be reporting quarterly membership in ARM data starting in 2025, they will continue to provide updates on key metrics including revenue, OI, OI margin, net income, EPS, and free cash flow.
  • Baptista Research looks to evaluate the different factors that could influence the company’s price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology.

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Daily Brief Australia: WorleyParsons Ltd, Pacific Smiles, Deep Yellow Ltd, Iron Ore and more

By | Australia, Daily Briefs

In today’s briefing:

  • Worley Placement – Largest Shareholder Selling at an Attractive Discount
  • Worley (WOR): Impact of Dar Group’s A$1.4bn Sale
  • Pacific Smiles (PSQ AU): A Brace Of Offers
  • ASX200 Index Rebalance Preview: Potential Changes Prior to the June Rebalance
  • Iron Ore and The China Property/Auto Stimulus Angle


Worley Placement – Largest Shareholder Selling at an Attractive Discount

By Clarence Chu

  • DAR Group is looking to raise A$1.5bn (US$983m) from selling the majority of its stake in WorleyParsons Ltd (WOR AU).
  • DAR had attempted to privatize Worley in late 2016. Failing that attempt, it has been adding to its stake over the years.
  • As the deal isn’t a cleanup, there will be an overhang post-deal, although its a relatively small one at just 4.5% of DAR’s remaining stake; locked up for 30 days

Worley (WOR): Impact of Dar Group’s A$1.4bn Sale

By Brian Freitas

  • Dar Al-Handasah has sold 19% of WorleyParsons Ltd (WOR AU) overnight at A$14.35/share, a 12% discount to the last close, to raise A$1.44bn (US$943m).
  • This reduces Dar’s stake in WorleyParsons Ltd (WOR AU) to 4.5% and will trigger upweights from index providers in the next few days.
  • The stake sale could also lead to a re-rating of the stock with a large blocking stake off the share register.

Pacific Smiles (PSQ AU): A Brace Of Offers

By David Blennerhassett

  • On the 18th December 2023, Pacific Smiles (PSQ AU), an operator of dental centers, announced and rejected a A$1.40/share non-binding proposal from Genesis Capital. Genesis subsequently increased its stake to 19.90%.
  • Genesis then bumped its NBIO to A$1.75/share on the 19 March and was granted due diligence on a non-exclusive basis. PSQ said it would support the revised terms if firmed. 
  • PSQ has now entered a Scheme with National Dental Care at A$1.90/share. The Offer also requires FIRB signing-off. But the proposal is a non-starter if Genesis rejects terms. 

ASX200 Index Rebalance Preview: Potential Changes Prior to the June Rebalance

By Brian Freitas


Iron Ore and The China Property/Auto Stimulus Angle

By Sameer Taneja

  • The short term is suddenly looking bullish for iron ore, as rumors abound that tier-1 cities in China may remove home-buying restrictions in May, and auto stimulus measures were announced. 
  • Cities like Chengdu and Nanjing have already announced measures to make home-buying more attractive, such as removing purchase qualifications and pilot programs for old-for-new home housing. 
  • We like 62% Fe and see it trade up to its upper limit of 130 USD/ton (vs. current 117 USD/ton). On equities, we like Vale (VALE US) .

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Daily Brief Singapore: SHEIN, Mapletree Logistics Trust and more

By | Daily Briefs, Singapore

In today’s briefing:

  • SHEIN IPO: The Biggest IPO in 2024 in London?
  • LHT, Bumitama and JB Foods directors add to stakes


SHEIN IPO: The Biggest IPO in 2024 in London?

By Douglas Kim

  • Although Shein has yet to formally announce the listing destination, there is a growing anticipation that the listing venue could be London, rather than New York. 
  • It has been reported that the company has more than doubled its net profit to more than US$2 billion in 2023. 
  • The company is currently seeking a corporate value of nearly US$70 billion to US$90 billion in the Shein IPO which would be one of the biggest IPOs globally in 2024. 

LHT, Bumitama and JB Foods directors add to stakes

By Geoff Howie

  • LHT, Bumitama and JB Foods directors add to stakes City Developments again led the buyback consideration tally for the week, acquiring 2,439,900 shares at an average of S$5.93 per share.
  • Between Apr 19 and 23, LHT Holdings managing director Yap Mui Kee acquired 138,000 shares at an average price of S$1.186 per share.

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