Category

Daily Briefs

Health Care: Microport Scientific, Mani Inc and more

By | Daily Briefs, Healthcare

In today’s briefing:

  • Microport Scientific (853.HK)-The “unique” Development Mode Leads to Lower-Than-Expected Performance
  • Mani Inc (7730 JP): Q2 Result Exceeds Expectation Aided by Demand Recovery; FY22 Guidance Reiterated

Microport Scientific (853.HK)-The “unique” Development Mode Leads to Lower-Than-Expected Performance

By Xinyao (Criss) Wang

  • Due to the centralized procurement in PRC market and decreasing volume of operations in overseas markets during pandemic, Microport Scientific (853 HK)’s 2021 performance missed expectations. 
  • Even if Microport could finally digest the negative impact of centralized procurement, its “unique” development mode would still put pressure and uncertainties on future performance/outlook, leading to lower-than-expected results.
  • Our earnings estimate of Microport in 2022 could be about HK$-1.7, and revenue estimate could be about HK$7.3 billion. It’s quite possible that the Company will not end up profitable.

Mani Inc (7730 JP): Q2 Result Exceeds Expectation Aided by Demand Recovery; FY22 Guidance Reiterated

By Tina Banerjee

  • Mani Inc (7730 JP) reported Q2FY22 revenue ahead of guidance, mainly driven by demand recovery in the surgical segment and positive effect of foreign exchange. However, profitability declined year-over-year.
  • Despite revenue beat in H1FY22, management reiterated FY22 guidance due to geographical risk. Outlook seems to be uncertain for China and India, which together contribute 33% of total revenue.
  • Mani shares plunged 20% since I published bearish note on the company in January 2022. Investors should avoid Mani due to its uncertain revenue outlook and deteriorating profitability in short-term.

Before it’s here, it’s on Smartkarma

TMT: Gcl Poly Energy Holdings Limited, Link Administration, M Cash Integrasi PT and more

By | Daily Briefs, TMT/Internet

In today’s briefing:

  • FTSE All-World/​​All-Cap Index Rebalance Preview: Some Big Changes in China
  • Merger Arb Mondays (04 Jul) – Link Admin, Ramsay, DTAC/True, Australian Unity Office Fund, Yashili
  • PT M Cash Integrasi Tbk – New Partnerships Bearing Fruits

FTSE All-World/​​All-Cap Index Rebalance Preview: Some Big Changes in China

By Brian Freitas

  • The price review period for the FTSE All-World/All-Cap September 2022 SAIR ended on 30 June. The changes are expected to be announced on 19 August and implemented on 19 September.
  • There are a lot of potential inclusions to the indices for China -some changes are a result of stocks being included in Northbound Stock Connect.
  • Gcl Poly Energy Holdings Limited (3800 HK) is the largest potential inclusion (in terms of passive flow) in the index following resumption of trading in November 2021.

Merger Arb Mondays (04 Jul) – Link Admin, Ramsay, DTAC/True, Australian Unity Office Fund, Yashili

By Arun George


PT M Cash Integrasi Tbk – New Partnerships Bearing Fruits

By SCCM Asia Research

  • 1Q22 saw robust performances: Revenue was -7.4% YoY to IDR3,044bn in 1Q22, largely driven by -67% YoY decline in digital products & services (on the flip side, this segment saw 2pp expansion in GPM).
  • Streamlining top-line estimates: We revised down our revenue estimates slightly by -0.5%/-2%/-4% to IDR15,044bn/IDR17,198bn/IDR19,135bn in FY22E/23E/24E, due to downward revisions for digital products and cloud advertising segments, offset by upward revisions for SaaS, Clean Energy, and the additional revenue streams from latest partnerships (E-wholesale, Audio Visual, and Content & Entertainment).
  • Improving PATMI margins from FY22-24E: Our PATMI margin estimates have mostly remained the same and on upward trends at 0.3%/0.5%/0.7% (prior: 0.3%/0.4%/0.7%) in FY22E/23E/24E, respectively, as MCAS leverages on its dist.

Before it’s here, it’s on Smartkarma

Indonesia: Indo Tambangraya Megah, M Cash Integrasi PT, Sawit Sumbermas Sarana and more

By | Daily Briefs, Indonesia

In today’s briefing:

  • A Layman’s Thesis for ITMG
  • PT M Cash Integrasi Tbk – New Partnerships Bearing Fruits
  • Morning Views Asia: China South City, Country Garden Holdings Co

A Layman’s Thesis for ITMG

By Sameer Taneja

  • Indo Tambangraya Megah (ITMG IJ) is a 2.3 bn USD company with ~880 mn USD net cash adding >100 mn USD of free cash flow a month.
  • At a 103 USD/ton ASP the company made a 475 mn USD profit for 2021. We estimate prices are easily around 200 USD/ton for the company in the current environment.
  • Indo Tambangraya Megah (ITMG IJ) has a track record of paying >70% of its profits as dividends since 2009 ( implying a yield of 37% for FY22 ). 

PT M Cash Integrasi Tbk – New Partnerships Bearing Fruits

By SCCM Asia Research

  • 1Q22 saw robust performances: Revenue was -7.4% YoY to IDR3,044bn in 1Q22, largely driven by -67% YoY decline in digital products & services (on the flip side, this segment saw 2pp expansion in GPM).
  • Streamlining top-line estimates: We revised down our revenue estimates slightly by -0.5%/-2%/-4% to IDR15,044bn/IDR17,198bn/IDR19,135bn in FY22E/23E/24E, due to downward revisions for digital products and cloud advertising segments, offset by upward revisions for SaaS, Clean Energy, and the additional revenue streams from latest partnerships (E-wholesale, Audio Visual, and Content & Entertainment).
  • Improving PATMI margins from FY22-24E: Our PATMI margin estimates have mostly remained the same and on upward trends at 0.3%/0.5%/0.7% (prior: 0.3%/0.4%/0.7%) in FY22E/23E/24E, respectively, as MCAS leverages on its dist.

Morning Views Asia: China South City, Country Garden Holdings Co

By Charles Macgregor

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.


Before it’s here, it’s on Smartkarma

Macro: The Seven Reasons Why This Cycle Is Different and more

By | Daily Briefs, Macro

In today’s briefing:

  • The Seven Reasons Why This Cycle Is Different
  • When Does The Pain End?

The Seven Reasons Why This Cycle Is Different

By Cam Hui

  • The main reason why stock prices haven’t skidded further in the face of earnings downgrades is because this cycle is different from others.
  • This has been an extraordinarily rapid rate hike cycle. Not only has the market discounted a recession, it may already be discounting Fed easing in 2023.
  • The acid test for market psychology will be Q2 earnings season. More immediately, the June Employment Report will serve as another guidepost for the trajectory of monetary policy.

When Does The Pain End?

By Cam Hui

  • The market is very worried about falling growth and an inflation rate that’s slow to decelerate.
  • Few have considered a scenario of a combination of small improvements in supply and demand destruction from higher rates is just enough to soft-land the economy.
  • The rise of recession hysteria has meant that risk/reward is becoming tilted to the upside for equity investors.

Before it’s here, it’s on Smartkarma

Consumer: Seven & I Holdings, Taste Gourmet Group, Tassal, China Tourism Group Duty Free Corp Ltd, Sawit Sumbermas Sarana and more

By | Consumer, Daily Briefs

In today’s briefing:

  • Seven & I Sale of Sogo Seibu Moves Closer
  • Taste Gourmet: Terrible Q4 2022, Q1 2023 off to a Good Start
  • Tassal: Cooke Remains a Determined Suitor
  • CTG Duty Free (601888 CH) Pre-IPO: Revival of H-Share IPO
  • Morning Views Asia: China South City, Country Garden Holdings Co

Seven & I Sale of Sogo Seibu Moves Closer

By Michael Causton

  • Initial reports suggest that Fortress Investment, part of the Softbank group of funds, is now the frontrunner in negotiations to acquire Sogo Seibu department stores from Seven & I.
  • Reports suggest Fortress is already in discussions with privately owned retailer Yodobashi Camera to take over management of the chain’s better stores, beginning with Seibu Ikebukuro.
  • The loss of ¥500 billion or so in turnover won’t be missed not will the ¥8.8 billion losses but activist investors won’t stop there.

Taste Gourmet: Terrible Q4 2022, Q1 2023 off to a Good Start

By Sameer Taneja

  • Taste Gourmet Group (8371 HK) reported worse numbers than we expected for Q4 2022 during the restrictions; Checks indicate recovery in Q1 2023 is far better than our expectations. 
  • Cash declining from 96 to 65 mn HKD QoQ resulted in the company having to declare a smaller final dividend of 1.6 HKD cents ( interim: 4 HKD cents ) 
  • Trading at 5.4x FY23 and 11.1% dividend yield (assuming a 60% payout ratio), the company represents an excellent investment opportunity with >100% upside at the very least.

Tassal: Cooke Remains a Determined Suitor

By Arun George

  • On 1 July, Cooke, the spurned suitor, disclosed that it further increased its stake from 5.40% to 7.60% at an average price of A$4.59 per share. 
  • The Tassal (TGR AU) Board decided not to engage with Cooke as its third offer of A$4.85 per share did not reflect the fundamental value of the business. 
  • Cooke’s recent actions suggest that it will not be easily deterred. We think that it is likely that Cooke returns with another offer which will force the Board to engage.

CTG Duty Free (601888 CH) Pre-IPO: Revival of H-Share IPO

By Osbert Tang, CFA

  • China Tourism Group Duty Free Corp Ltd (601888 CH) has revived its H-share IPO plan by re-submitting the Application Proof to the Hong Kong Stock Exchange on 1 Jul. 
  • While there is no material changes in the Proof, weaker 1Q22 result, negative impact of pandemic and new agreements signed with Guangzhou Airport are recent developments that should be noted.
  • We think CDFC’s H-shares, based on similar valuation before cancellation of the previous IPO plan, look less attractive given the sharp pull back of its peers in Hong Kong. 

Morning Views Asia: China South City, Country Garden Holdings Co

By Charles Macgregor

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.


Before it’s here, it’s on Smartkarma

China: Gcl Poly Energy Holdings Limited, Taste Gourmet Group, Tianqi Lithium, Microport Scientific, China Tourism Group Duty Free Corp Ltd, Sawit Sumbermas Sarana and more

By | China, Daily Briefs

In today’s briefing:

  • FTSE All-World/​​All-Cap Index Rebalance Preview: Some Big Changes in China
  • Taste Gourmet: Terrible Q4 2022, Q1 2023 off to a Good Start
  • Weekly Deals Digest (03 Jul) – Tianqi Lithium, Thai Life, Li Auto, Link Admin, Tassal, DTAC/True
  • Microport Scientific (853.HK)-The “unique” Development Mode Leads to Lower-Than-Expected Performance
  • CTG Duty Free (601888 CH) Pre-IPO: Revival of H-Share IPO
  • Morning Views Asia: China South City, Country Garden Holdings Co

FTSE All-World/​​All-Cap Index Rebalance Preview: Some Big Changes in China

By Brian Freitas

  • The price review period for the FTSE All-World/All-Cap September 2022 SAIR ended on 30 June. The changes are expected to be announced on 19 August and implemented on 19 September.
  • There are a lot of potential inclusions to the indices for China -some changes are a result of stocks being included in Northbound Stock Connect.
  • Gcl Poly Energy Holdings Limited (3800 HK) is the largest potential inclusion (in terms of passive flow) in the index following resumption of trading in November 2021.

Taste Gourmet: Terrible Q4 2022, Q1 2023 off to a Good Start

By Sameer Taneja

  • Taste Gourmet Group (8371 HK) reported worse numbers than we expected for Q4 2022 during the restrictions; Checks indicate recovery in Q1 2023 is far better than our expectations. 
  • Cash declining from 96 to 65 mn HKD QoQ resulted in the company having to declare a smaller final dividend of 1.6 HKD cents ( interim: 4 HKD cents ) 
  • Trading at 5.4x FY23 and 11.1% dividend yield (assuming a 60% payout ratio), the company represents an excellent investment opportunity with >100% upside at the very least.

Weekly Deals Digest (03 Jul) – Tianqi Lithium, Thai Life, Li Auto, Link Admin, Tassal, DTAC/True

By Arun George


Microport Scientific (853.HK)-The “unique” Development Mode Leads to Lower-Than-Expected Performance

By Xinyao (Criss) Wang

  • Due to the centralized procurement in PRC market and decreasing volume of operations in overseas markets during pandemic, Microport Scientific (853 HK)’s 2021 performance missed expectations. 
  • Even if Microport could finally digest the negative impact of centralized procurement, its “unique” development mode would still put pressure and uncertainties on future performance/outlook, leading to lower-than-expected results.
  • Our earnings estimate of Microport in 2022 could be about HK$-1.7, and revenue estimate could be about HK$7.3 billion. It’s quite possible that the Company will not end up profitable.

CTG Duty Free (601888 CH) Pre-IPO: Revival of H-Share IPO

By Osbert Tang, CFA

  • China Tourism Group Duty Free Corp Ltd (601888 CH) has revived its H-share IPO plan by re-submitting the Application Proof to the Hong Kong Stock Exchange on 1 Jul. 
  • While there is no material changes in the Proof, weaker 1Q22 result, negative impact of pandemic and new agreements signed with Guangzhou Airport are recent developments that should be noted.
  • We think CDFC’s H-shares, based on similar valuation before cancellation of the previous IPO plan, look less attractive given the sharp pull back of its peers in Hong Kong. 

Morning Views Asia: China South City, Country Garden Holdings Co

By Charles Macgregor

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.


Before it’s here, it’s on Smartkarma

Event-Driven: Gcl Poly Energy Holdings Limited, Seven & I Holdings, Link Administration, SK IE Technology, Australian Unity Office Fund, Tassal and more

By | Daily Briefs, Event-Driven

In today’s briefing:

  • FTSE All-World/​​All-Cap Index Rebalance Preview: Some Big Changes in China
  • Seven & I Sale of Sogo Seibu Moves Closer
  • Merger Arb Mondays (04 Jul) – Link Admin, Ramsay, DTAC/True, Australian Unity Office Fund, Yashili
  • WISE Theme Indexes (TIGER ETFs): Rebalancing Flow Estimations
  • AOF Trading at the Dividend-Adjusted Unaffected Price
  • Tassal: Cooke Remains a Determined Suitor

FTSE All-World/​​All-Cap Index Rebalance Preview: Some Big Changes in China

By Brian Freitas

  • The price review period for the FTSE All-World/All-Cap September 2022 SAIR ended on 30 June. The changes are expected to be announced on 19 August and implemented on 19 September.
  • There are a lot of potential inclusions to the indices for China -some changes are a result of stocks being included in Northbound Stock Connect.
  • Gcl Poly Energy Holdings Limited (3800 HK) is the largest potential inclusion (in terms of passive flow) in the index following resumption of trading in November 2021.

Seven & I Sale of Sogo Seibu Moves Closer

By Michael Causton

  • Initial reports suggest that Fortress Investment, part of the Softbank group of funds, is now the frontrunner in negotiations to acquire Sogo Seibu department stores from Seven & I.
  • Reports suggest Fortress is already in discussions with privately owned retailer Yodobashi Camera to take over management of the chain’s better stores, beginning with Seibu Ikebukuro.
  • The loss of ¥500 billion or so in turnover won’t be missed not will the ¥8.8 billion losses but activist investors won’t stop there.

Merger Arb Mondays (04 Jul) – Link Admin, Ramsay, DTAC/True, Australian Unity Office Fund, Yashili

By Arun George


WISE Theme Indexes (TIGER ETFs): Rebalancing Flow Estimations

By Sanghyun Park

  • Among the local theme indexes in Korea, we have three noteworthy ones for July. They are the WISE theme indexes. They will all rebalance on July 15.
  • Due to some constituents’ recent significant price movements, we can now expect some notable passive flows.
  • These names are worthy of our attention: SKIET, Solus Advanced, Kangwon Land, Hanatour, T’way Air, Yong Pyong Resort, HYBE, CJ ENM, and Studio Dragon.

AOF Trading at the Dividend-Adjusted Unaffected Price

By Arun George

  • Australian Unity Office Fund (AOF AU) has extended Aliro’s exclusive due diligence to 15 July. Shares slid 1.8% on concerns of Aliro lowering the offer or walking away. 
  • Encouragingly, Aliro confirmed its intention to pursue the proposal at a price not lower than the offer price and will return with an updated proposal within two weeks.
  • The offer price (including Sep distribution) of A$2.465 is 14.7% above the last close. The downside is low as the shares are trading in line with the dividend-adjusted unaffected price. 

Tassal: Cooke Remains a Determined Suitor

By Arun George

  • On 1 July, Cooke, the spurned suitor, disclosed that it further increased its stake from 5.40% to 7.60% at an average price of A$4.59 per share. 
  • The Tassal (TGR AU) Board decided not to engage with Cooke as its third offer of A$4.85 per share did not reflect the fundamental value of the business. 
  • Cooke’s recent actions suggest that it will not be easily deterred. We think that it is likely that Cooke returns with another offer which will force the Board to engage.

Before it’s here, it’s on Smartkarma

Equity Capital Markets: Tianqi Lithium, China Tourism Group Duty Free Corp Ltd and more

By | Daily Briefs, IPOs and Placements

In today’s briefing:

  • Weekly Deals Digest (03 Jul) – Tianqi Lithium, Thai Life, Li Auto, Link Admin, Tassal, DTAC/True
  • CTG Duty Free (601888 CH) Pre-IPO: Revival of H-Share IPO

Weekly Deals Digest (03 Jul) – Tianqi Lithium, Thai Life, Li Auto, Link Admin, Tassal, DTAC/True

By Arun George


CTG Duty Free (601888 CH) Pre-IPO: Revival of H-Share IPO

By Osbert Tang, CFA

  • China Tourism Group Duty Free Corp Ltd (601888 CH) has revived its H-share IPO plan by re-submitting the Application Proof to the Hong Kong Stock Exchange on 1 Jul. 
  • While there is no material changes in the Proof, weaker 1Q22 result, negative impact of pandemic and new agreements signed with Guangzhou Airport are recent developments that should be noted.
  • We think CDFC’s H-shares, based on similar valuation before cancellation of the previous IPO plan, look less attractive given the sharp pull back of its peers in Hong Kong. 

Before it’s here, it’s on Smartkarma

Financials: Tokyo Stock Exchange Tokyo Price Index Topix, Bitcoin and more

By | Daily Briefs, Financials

In today’s briefing:

  • Reason for the Declining Concentration of June AGM Dates in Japan Is Likely Mixed
  • On-Chain Financial Analysis

Reason for the Declining Concentration of June AGM Dates in Japan Is Likely Mixed

By Aki Matsumoto

  • While we want to believe that “increased awareness of corporate governance has led to downward trend in the concentration of AGM dates,” in reality they were spread over 3 days.
  • The use of the platform for electronic exercise of voting rights has made progress since it was included in the listing criteria for the prime market.
  • The provision of convocation notices in English has not made much progress since it was not specifically stated in the Corporate Governance Code, which was included in the listing criteria.

On-Chain Financial Analysis

By Etherbridge

  • On-chain analysis can provide investors with an edge when it comes to assessing where the market is and where it may go, providing better risk/reward opportunities than someone who is just purely looking at price. 
  • However, most of the data that is currently available focuses on layer one protocols. This leaves a huge gap when it comes to assessing projects further up the blockchain stack.
  • This is where something like Token Terminal fits in. Token Terminal is a platform that aggregates financial data on blockchains and the decentralised applications that run on a blockchain. 

Before it’s here, it’s on Smartkarma

Most Read: Gcl Poly Energy Holdings Limited, Seven & I Holdings, Link Administration, SK IE Technology and more

By | Daily Briefs, Most Read

In today’s briefing:

  • FTSE All-World/​​All-Cap Index Rebalance Preview: Some Big Changes in China
  • Index Rebalance & ETF Flow Recap: FTSE JP, HSTECH, HSCEI, PCOMP, GCL Tech, Tencent, Tianqi Lithium
  • Seven & I Sale of Sogo Seibu Moves Closer
  • Merger Arb Mondays (04 Jul) – Link Admin, Ramsay, DTAC/True, Australian Unity Office Fund, Yashili
  • WISE Theme Indexes (TIGER ETFs): Rebalancing Flow Estimations

FTSE All-World/​​All-Cap Index Rebalance Preview: Some Big Changes in China

By Brian Freitas

  • The price review period for the FTSE All-World/All-Cap September 2022 SAIR ended on 30 June. The changes are expected to be announced on 19 August and implemented on 19 September.
  • There are a lot of potential inclusions to the indices for China -some changes are a result of stocks being included in Northbound Stock Connect.
  • Gcl Poly Energy Holdings Limited (3800 HK) is the largest potential inclusion (in terms of passive flow) in the index following resumption of trading in November 2021.

Index Rebalance & ETF Flow Recap: FTSE JP, HSTECH, HSCEI, PCOMP, GCL Tech, Tencent, Tianqi Lithium

By Brian Freitas


Seven & I Sale of Sogo Seibu Moves Closer

By Michael Causton

  • Initial reports suggest that Fortress Investment, part of the Softbank group of funds, is now the frontrunner in negotiations to acquire Sogo Seibu department stores from Seven & I.
  • Reports suggest Fortress is already in discussions with privately owned retailer Yodobashi Camera to take over management of the chain’s better stores, beginning with Seibu Ikebukuro.
  • The loss of ¥500 billion or so in turnover won’t be missed not will the ¥8.8 billion losses but activist investors won’t stop there.

Merger Arb Mondays (04 Jul) – Link Admin, Ramsay, DTAC/True, Australian Unity Office Fund, Yashili

By Arun George


WISE Theme Indexes (TIGER ETFs): Rebalancing Flow Estimations

By Sanghyun Park

  • Among the local theme indexes in Korea, we have three noteworthy ones for July. They are the WISE theme indexes. They will all rebalance on July 15.
  • Due to some constituents’ recent significant price movements, we can now expect some notable passive flows.
  • These names are worthy of our attention: SKIET, Solus Advanced, Kangwon Land, Hanatour, T’way Air, Yong Pyong Resort, HYBE, CJ ENM, and Studio Dragon.

Before it’s here, it’s on Smartkarma