Category

Daily Briefs

Apr 01
0

Daily Brief ESG: The Good Case Companies Had More Opportunities to Reflect on Cost of Capital and Return on Capital and more

By | Daily Briefs, ESG

In today’s briefing:

  • The Good Case Companies Had More Opportunities to Reflect on Cost of Capital and Return on Capital

The Good Case Companies Had More Opportunities to Reflect on Cost of Capital and Return on Capital

By Aki Matsumoto

  • Characteristic of companies TSE introduced as good disclosure examples is that they include more companies with a high foreign ownership and those that pay relatively close attention to cash allocation.
  • Not all companies that are good examples have increased their valuations noticeably compared to before TSE market restructuring, but TSE has chosen them based on the content of their initiatives.
  • These companies didn’t create their cash allocation policies abruptly, but had more opportunities to think through cost of capital, return on capital and stock price through engagements with overseas investors.

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Apr 01
0

Daily Brief Thematic (Sector/Industry): Semiconductor Real Time Indicators Update and more

By | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

  • Semiconductor Real Time Indicators Update
  • Ohayo Japan | US PCE In-Line with Expectations
  • China Property Developers In Distress – Weekly News & Announcements Tracker | Mar 22-28, 2024

Semiconductor Real Time Indicators Update

By William Keating

  • Taiwan companies are required to report revenue on a monthly basis. These updates can help us understand how a given quarter is progressing & predict quarterly earnings ahead of time
  • Initially we focused on MoM %  increase/decrease. This is useful, but one needs to account for anomalies such as seasonality and potential non-linearity month to month within a given quarter 
  • We now also provide the monthly YoY revenue comparison. This eliminates anomalies due to both seasonality and intra-quarter non-linearity, enabling a clearer perspective on where the industry is at. 

Ohayo Japan | US PCE In-Line with Expectations

By Mark Chadwick

  • The personal consumption expenditures price index, which excludes food and energy, rose by 2.8% YoY, meeting expectations. Compared to the previous month, it also went up by 0.3%, as predicted.
  • The ratio of cashless payments to total consumption in Japan hit a record high of 39.3% in 2023, marking a 3.3 percentage point increase from the previous year
  • Denso announced its decision to divest all Toyota Industries shares; Miura Kogyo announced its acquisition of Cleaver-Brooks, a US-based company  

China Property Developers In Distress – Weekly News & Announcements Tracker | Mar 22-28, 2024

By Robert Ciemniak

  • This note is a weekly curated selection of Chinese news articles and company announcements focused on developers in distress
  • We look for their deals, updates, specific project progress news (‘local signals’), as well as relevant local research commentaries about the market
  • We do not verify the underlying data or provide any opinion, we only select and summarize the information; See direct links to sources

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Apr 01
0

Daily Brief Credit: Morning Views Asia: China Vanke and more

By | Credit, Daily Briefs

In today’s briefing:

  • Morning Views Asia: China Vanke , First Pacific Co, Xiaomi Corp

Morning Views Asia: China Vanke , First Pacific Co, Xiaomi Corp

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.

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Apr 01
0

Daily Brief ECM: HD Hyundai Marine Solutions IPO: The Investment Case and more

By | Daily Briefs, ECM

In today’s briefing:

  • HD Hyundai Marine Solutions IPO: The Investment Case

HD Hyundai Marine Solutions IPO: The Investment Case

By Arun George

  • HD Hyundai Marine Solution (443060 KS), the ship after-service subsidiary of HD Hyundai (267250 KS), aims to raise up to US$550 million.   
  • The international book-building will run from 8 to 22 April, while the domestic book will open from 16 to 22 April. Pricing will be announced on 24 April.
  • The investment case rests on solid top-line growth, a healthy order book, rising margins, cash generation, and modest leverage.

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Apr 01
0

Daily Brief Event-Driven: A/H Premium Tracker (To 28 Mar 2024):  Liquid AH Premia Still Very Wide and more

By | Daily Briefs, Event-Driven

In today’s briefing:

  • A/H Premium Tracker (To 28 Mar 2024):  Liquid AH Premia Still Very Wide
  • Updated Tool (31Mar24) & “Diff File Generator” For TSE “Mgmt Conscious of Capital Cost/Stock Price”
  • Merger Arb Mondays (01 Apr) – SciClone, IntelliCentrics, CIMC Vehicles, Lawson, Roland DG, MMA
  • SciClone Pharma (6600 HK): Privatisation At IPO Price
  • EQD / NSE Volatility Update / 25-Mar-24 to 29-Mar-24

A/H Premium Tracker (To 28 Mar 2024):  Liquid AH Premia Still Very Wide

By Travis Lundy

  • The New/Better A-H Premium Tracker has tables, charts, measures galore to track A/H premium positioning, southbound and northbound positioning/volatility in pairs over time, etc.
  • SOUTHBOUND’s consecutive buying streak ended on Monday, and a new buying streak started Tuesday. NORTHBOUND net bought the dip. Last week’s (double long) choice Longyuan Power was up 5.24%.
  • Narrow AH premia narrowed some. Wider AH premia saw Hs outperform. There is a LOT of spread left in this market.  7 recommendations this week.

Updated Tool (31Mar24) & “Diff File Generator” For TSE “Mgmt Conscious of Capital Cost/Stock Price”

By Travis Lundy

  • In mid-January, the TSE announced a “name-and-shame” list where they listed all the companies which had put forth a disclosure about 【資本コストや株価を意識した経営の実現に向けた対応】. But they did not actually shame.
  • The list shows which companies have disclosed a policy/consideration. But no data/links. We have the links, and we are weeks ahead of the TSE. Working to get months ahead.
  • We created a tool to name everyone, show their reports, provide links, and now a new tool. Put in a name, see the difference between the Old/New Reports.

Merger Arb Mondays (01 Apr) – SciClone, IntelliCentrics, CIMC Vehicles, Lawson, Roland DG, MMA

By Arun George

SciClone Pharma (6600 HK): Privatisation At IPO Price

By David Blennerhassett

EQD / NSE Volatility Update / 25-Mar-24 to 29-Mar-24

By Sankalp Singh

  • On-The-Run Quarterly Options now capture India General Elections. Position buildup can be seen in the 21,000 put and 24,000 call strikes
  • Weekly and Monthly contract risk premia being squeezed lower due to holiday shortened trading but Quarterly contracts exhibit vol richness
  • Scale back short gamma exposure as reward-risk unappealing at current IV levels

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Apr 01
0

Daily Brief Equity Bottom-Up: Taiwan Dual-Listings Monitor: TSMC Continues Falling from Extreme Level; CHT at Unusual Discount and more

By | Daily Briefs, Equity Bottom-Up

In today’s briefing:

  • Taiwan Dual-Listings Monitor: TSMC Continues Falling from Extreme Level; CHT at Unusual Discount
  • Mediatek: Accelerating Momentum in Automotive, Data Center, and AI Memory Solutions
  • Taiwan Tech Weekly: Quanta Surging on Nvidia Server Orders; Nanya Results Ahead; Intel Foundry Event
  • Monthly Chinese Tourism Tracker | Decision to Slow Capacity Rebuild in Mid-2023 Now Looks Prudent
  • Centurion Corp (CENT SP) – Paving the Way for Workers and Students
  • Tencent/Netease: Both Zeroed in March Game Approval
  • China Healthcare Weekly (Mar.31)- Milestone of Chinese Pharmaceutical Assets, Weight Loss Drug, Aier
  • Post Nvidia GTC Industry Impact: Large Quanta Server Win Just the Beginning of an Order Wave?
  • Reborn from Ashes and Possible Target
  • WuXi XDC Cayman (2268.HK) – Don’t Rush to Bottom Fish This Stock

Taiwan Dual-Listings Monitor: TSMC Continues Falling from Extreme Level; CHT at Unusual Discount

By Vincent Fernando, CFA

  • TSMC: +11.8% Premium — Falling Closer to Its Historical Range
  • ASE: +9.2% Premium; Further Breakdown Could Indicate Return to Previous Trading Range
  • CHT: -1.8% Discount — Good Level to Long the Spread

Mediatek: Accelerating Momentum in Automotive, Data Center, and AI Memory Solutions

By Vincent Fernando, CFA

  • Mediatek is advancing full speed with recent industry collaborations for automotive chips, data center connectivity solutions, and AI memory solutions.
  • In particular, the company has entered the market for Co-Packaged Optics (CPO), with partnerships announced with Foxconn and Ranovus.
  • While the stock has rallied and re-rated, consensus forward estimates do not appear overly demanding and could still have room to increase further.

Taiwan Tech Weekly: Quanta Surging on Nvidia Server Orders; Nanya Results Ahead; Intel Foundry Event

By Vincent Fernando, CFA

  • Quanta surged with major server wins from Meta, Alphabet, and Amazon. Nanya Tech results are two weeks ahead and Intel will host a webinar this week about its Foundry business.
  • Mediatek: Accelerating Momentum in Automotive, Data Center, and AI Memory Solutions 
  • Hon Hai (Foxconn): After the 50% Surge, Where Can It Go From Here? 

Monthly Chinese Tourism Tracker | Decision to Slow Capacity Rebuild in Mid-2023 Now Looks Prudent

By Daniel Hellberg

  • Chinese outbound travel demand continued to recover nicely in February
  • Major airlines’ decision to slow capacity rebuild now looks very prudent
  • But the airlines have underperformed, surprisingly; Buy Trip.com below US$43

Centurion Corp (CENT SP) – Paving the Way for Workers and Students

By Angus Mackintosh

  • Centurion Corp (CENT SP) is the leading light in purpose workers’ accommodation in Singapore and Malaysia, with high occupancy rates and healthy rental reversions, with a long-term secular growth backdrop.
  • The company is also involved in purpose-built student accommodation in centres of excellence for education including the UK, Australia, and the US in a highly sought-after asset space.
  • The outlook for both worker and student accommodation looks positive for the coming two years. Valuations look attractive with Centurion Corp trading at a 56% discount to NAV.

Tencent/Netease: Both Zeroed in March Game Approval

By Ke Yan, CFA, FRM

  • China announced game approval for the Feb batch. The number of games approved remained at a higher level than 2023.
  • The pace of China game approval appears to have accelerated to the same level as pre-tightening.
  • However, neither Tencent and Netease got any approval in March.

China Healthcare Weekly (Mar.31)- Milestone of Chinese Pharmaceutical Assets, Weight Loss Drug, Aier

By Xinyao (Criss) Wang

  • Licensing-Out deals of Chinese pharmaceutical assets are indeed significant milestones, but we should not exaggerate its significance. The product strength itself/subsequent progress are the true sources of clinical benefits/commercial value.
  • In the field of weight loss drugs, first-mover advantage may not be that obvious. The possibility of latecomers to disrupt first-mover would not be that low or time-consuming.
  • For Aier, 23Q4 results could show an obvious rebound, leading to relatively high growth in 2023 full year. However, Aier’s problems are still there, which means Aier is not undervalued.

Post Nvidia GTC Industry Impact: Large Quanta Server Win Just the Beginning of an Order Wave?

By Vincent Fernando, CFA

  • Just a week after Nvidia’s GTC conference, Quanta has reportedly secured large orders for new Nvidia Blackwell-based servers from Google, Amazon AWS, and Meta. 
  • Other firms showcasing Nvidia servers at GTC include Wiwynn, Gigabyte, Pegatron, Asus, Hon Hai (Ingrasys), Wistron, Dell, and Super Micro. There could be a higher probability of new order wins.
  • Stock Focus: Asustek — Improving outlook as a play on both AI PCs and AI servers.

Reborn from Ashes and Possible Target

By Jesus Rodriguez Aguilar

  • The Italian Treasury sold an additional 12.5% stake in Banca Monte dei Paschi di Sien (BMPS IM), raising €650 million as part of re-privatization efforts following the 2021 failed attempt.
  • The Treasury’s divestment makes BMPS more appealing for buyers. BMPS still trades at attractive valuation multiples. The bank announces approval from the ECB for a €0.25 cash dividend per share. 
  • Economy Minister Giorgetti and PM Meloni aim to boost competition through privatization, favoring a merger with another mid-sized Italian bank, possibly BPER Banca or Banco BPM.

WuXi XDC Cayman (2268.HK) – Don’t Rush to Bottom Fish This Stock

By Xinyao (Criss) Wang

  • Theoretically, there’s no need to doubt WuXi XDC’s growth momentum. What needs to be proven is how large the actual ADC market is, which determines how much valuation it deserves.
  • However, the biggest problem currently is geopolitical risks, which make performance forecasts groundless. In the context of Sino-US confrontation, there is “a hesitation” towards sustained high growth of WuXi XDC.
  • If several pieces of news are put together, this is not just about China CXO/TikTok being sanctioned by US. New balance point in the game between great powers will emerge.

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Apr 01
0

Daily Brief Macro: Is a Major RMB Depreciation on the Cards? and more

By | Daily Briefs, Macro

In today’s briefing:

  • Is a Major RMB Depreciation on the Cards?
  • The Stock Market’s Q2 Challenges
  • Secondary Indicators of Fed Policy Do Not Indicate Overly-Restrictive Stance
  • Spotlighting “Underlying” Inflation
  • Why the First Fed Rate Cut Will Be Later Than June

Is a Major RMB Depreciation on the Cards?

By Rikki Malik

  • Further weakness in the JPY poses a risk to RMB stability
  • If major stimulus is unleashed in China, it is likely the RMB will weaken
  • Continued incremental easing will benefit the economy in the long term but may disapoint equity investors looking for a quick fix despite Chinese data improving

The Stock Market’s Q2 Challenges

By Cam Hui

  • The S&P 500 ended the quarter exhibiting a series of “good overbought” conditions which are signals of strong momentum. Can the bullish momentum continue?
  • Equity price momentum in Q2 is dependent on continued rising EPS estimates, a tame bond market response to higher Treasury coupon issuance, and a possible liquidity squeeze. 
  • The market is vulnerable to a setback. A lot has to go right.

Secondary Indicators of Fed Policy Do Not Indicate Overly-Restrictive Stance

By Said Desaque

  • Fed Chairman Powell’s assessment that monetary conditions are restrictive is questionable due to issues surrounding the neutral federal funds rate. Secondary signals of the Fed’s policy stance are worth following.
  • Commodity and risky asset price trends, exchange rate movements and yield curve changes are viewed as secondary indicators of the Fed’s policy stance. 
  • Policy is not tight based on commodity and risky asset prices. Exchange rate movements are inconclusive. Yield curve inversion is associated with tight money, but this condition no longer holds. 

Spotlighting “Underlying” Inflation

By Thomas Lam

  • The incoming inflation data has received more attention and scrutiny as G3 (Fed, BoJ and ECB) policymakers up the ante  
  • Ideally, the emphasis should be on “trend” or “underlying” inflation, not the monthly data wiggles  
  • My estimate of the G3 underlying inflation rate is currently hovering around 1.5%-points above the pre-pandemic average     

Why the First Fed Rate Cut Will Be Later Than June

By Cam Hui

  • We believe the market hasn’t discounted Powell’s political need for unanimity for the first decision to cut rates in an election year. 
  • Current consensus expectations call for the first quarter-point rate cut at the June FOMC meeting, which is probably a stretch for FOMC members.
  • It will be difficult to form a consensus for a June cut in the absence of either lower inflation data or weakness in the labour market.

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Mar 31
0

Daily Brief Industrials: Samsung C&T, Contemporary Amperex Technology (CATL) and more

By | Daily Briefs, Industrials

In today’s briefing:

  • Samsung C&T: Why Is Lee Seo-Hyun Returning as the President?
  • Mainland Connect NORTHBOUND Flows (To 28 Mar 2024): NB Turns Net Buyer Again, Flows Go Idiosyncratic

Samsung C&T: Why Is Lee Seo-Hyun Returning as the President?

By Douglas Kim

  • On 29 March, it was reported that Lee Seo-Hyun has been appointed as the President of Samsung C&T (028260 KS), returning to the company after more than five years.
  • Lee Seo-Hyun is the third child of the late Samsung Chairman Lee Kun-Hee. She will be in charge of the overall strategic planning of Samsung C&T.
  • Many investors will likely to question this move, since they may question her ability to make strategic decisions that are in the best interests of all the minority investors. 

Mainland Connect NORTHBOUND Flows (To 28 Mar 2024): NB Turns Net Buyer Again, Flows Go Idiosyncratic

By Travis Lundy

  • The Quiddity Mainland Connect NORTHBOUND Monitor. Like the A/H Premium Monitor and HK Connect SOUTHBOUND Monitor. Lots of Flows/Position Tables and Charts with which to play.
  • Last week saw NORTHBOUND net BUY RMB 5.4bn of A-shares on decent volume after buying RMB 25bn net the two weeks before.
  • The volume is still chasing momentum, and dip buying on the buys. Selling dips on losers. CATL the big buy, and less passive-feeling than last week.

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Mar 31
0

Daily Brief TMT/Internet: Roland DG Corp, Tencent and more

By | Daily Briefs, TMT/Internet

In today’s briefing:

  • Weekly Deals Digest (31 Mar) – Roland DG, Lawson, SciClone, Probiotec, MMA Offshore, Bharti Hexacom
  • HK Connect SOUTHBOUND Flows (To 28 Mar 2024); Strong Net Buying on Tencent, Telcos, and Energy

Weekly Deals Digest (31 Mar) – Roland DG, Lawson, SciClone, Probiotec, MMA Offshore, Bharti Hexacom

By Arun George

HK Connect SOUTHBOUND Flows (To 28 Mar 2024); Strong Net Buying on Tencent, Telcos, and Energy

By Travis Lundy

  • A shares were down on the week, but rallied Thursday and Friday.
  • Net SOUTHBOUND buying was +HK8.5bn after $57bn the two weeks before. SOUTHBOUND ended its consecutive net daily buy streak Monday, then started buying again.
  • The flavour of SOUTHBOUND buying has been high-div SOEs for months and months. That is starting to change slightly. Tencent was the top net buy this week. Again.

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Mar 31
0

Daily Brief Industrials: Samsung C&T, Contemporary Amperex Technology (CATL) and more

By | Daily Briefs, Industrials

In today’s briefing:

  • Samsung C&T: Why Is Lee Seo-Hyun Returning as the President?
  • Mainland Connect NORTHBOUND Flows (To 28 Mar 2024): NB Turns Net Buyer Again, Flows Go Idiosyncratic

Samsung C&T: Why Is Lee Seo-Hyun Returning as the President?

By Douglas Kim

  • On 29 March, it was reported that Lee Seo-Hyun has been appointed as the President of Samsung C&T (028260 KS), returning to the company after more than five years.
  • Lee Seo-Hyun is the third child of the late Samsung Chairman Lee Kun-Hee. She will be in charge of the overall strategic planning of Samsung C&T.
  • Many investors will likely to question this move, since they may question her ability to make strategic decisions that are in the best interests of all the minority investors. 

Mainland Connect NORTHBOUND Flows (To 28 Mar 2024): NB Turns Net Buyer Again, Flows Go Idiosyncratic

By Travis Lundy

  • The Quiddity Mainland Connect NORTHBOUND Monitor. Like the A/H Premium Monitor and HK Connect SOUTHBOUND Monitor. Lots of Flows/Position Tables and Charts with which to play.
  • Last week saw NORTHBOUND net BUY RMB 5.4bn of A-shares on decent volume after buying RMB 25bn net the two weeks before.
  • The volume is still chasing momentum, and dip buying on the buys. Selling dips on losers. CATL the big buy, and less passive-feeling than last week.

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