Daily Briefs

Even if you were an activist, or a trader with an activism tilt, be long Keisei Electric Railway Co (9009 JP) vs. Oriental Land (4661 JP).
Reportedly, Singtel (ST SP) is negotiating a sale of Optus. Both Singtel and Optus scotch those rumours.
Alumina Ltd (AWC AU) and Alcoa (AA US) enter into a Scheme. As expected. The key question: is CITIC, with 18.9% of shares out, supportive?

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Mar 17

Daily Brief India: Wipro Ltd and more

By Smartkarma Daily Briefs | Daily Briefs, India

In today’s briefing:

Quiddity Leaderboard BSE/SENSEX Jun 24: Who Will Replace Wipro?

Quiddity Leaderboard BSE/SENSEX Jun 24: Who Will Replace Wipro?

By Janaghan Jeyakumar, CFA

In this insight, we take a look at the Potential ADDs/DELs for the BSE SENSEX, 100, and 200 Indices in the June 2024 index rebal event.
As things stand, there could be one index change for the SENSEX index but there is room for these names to change during the remainder of the reference period.
Separately, there could be five ADDs/DELs for the BSE 100 index and six ADDs/DELs for the BSE 200 index.

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

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

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

Mar 17

Daily Brief Japan: NEC Corp, TSE Tokyo Price Index TOPIX, JSR Corp and more

By Smartkarma Daily Briefs | Daily Briefs, Japan

In today’s briefing:

NEC (6701 JP): Generative AI Is the Spark, Not the Driver
Updated Tool and New “Diff File Generator” for TSE “Mgmt Conscious of Capital Cost/Stock Price”
(Mostly) Asia-Pac M&A:QV Equities, TASK, Qantm, Superloop, CIMC Vehicle, JSR, Roland DG, Outsourcing
Weekly Deals Digest (17 Mar) – JSR, Roland DG, CIMC Vehicles, Li Ning, Alumina, QV Equities, Japfa

NEC (6701 JP): Generative AI Is the Spark, Not the Driver

By Scott Foster

The P/E ratio has risen above 20x this fiscal year from no more than 13x in the previous four years, reflecting successful restructuring and investor enthusiasm for AI.
Profit margins are rising, but remain moderate in absolute terms with room for further improvement. The shares may consolidate, but they do not look overvalued.
Management is aiming for generative AI sales of ¥50 billion in three years time. This is less than 2% of total sales, but a positive indicator for NEC’s software business.

Updated Tool and New “Diff File Generator” for TSE “Mgmt Conscious of Capital Cost/Stock Price”

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. On Feb 1, the TSE put out a presentation and set of case studies.
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.

(Mostly) Asia-Pac M&A:QV Equities, TASK, Qantm, Superloop, CIMC Vehicle, JSR, Roland DG, Outsourcing

I tally 50 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal.
Two new deals were discussed this week on Smartkarma: WAM Leaders (WLE AU) scrip-deal for QV Equities (QVE AU); and TASK Group (TSK AU)‘s Scheme with PAR Technology (PAR US).
Key updates took place on: Qantm Intellectual Property (QIP AU), Superloop (SLC AU), CIMC Vehicle (1839 HK), JSR Corp (4185 JP), Roland DG Corp (6789 JP), and Outsourcing (2427 JP).

Weekly Deals Digest (17 Mar) – JSR, Roland DG, CIMC Vehicles, Li Ning, Alumina, QV Equities, Japfa

By Arun George

A weekly summary of key developments across ECM and Event-Driven names tracked by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Thailand, Korea, India and Chinese ADRs.
ECM developments: Trial Holdings (5882 JP) and Lianlian DigiTech (2104619D CH) IPOs.
Event-Driven developments: JSR Corp (4185 JP), Roland DG Corp (6789 JP), Yaizu Suisankagaku Industry (2812 JP), Alumina Ltd (AWC AU), QV Equities Ltd (QVE AU), CIMC Vehicles.

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

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

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

Mar 17

Daily Brief China: Tencent, KE Holdings , Contemporary Amperex Technology (CATL), Ganfeng Lithium and more

By Smartkarma Daily Briefs | China, Daily Briefs

In today’s briefing:

HK Connect SOUTHBOUND Flows (To 15 Mar 2024); Strong Net Buying on Tencent and ETFs
[KE Holdings (BEKE US, BUY, TP US$24) Review]: Investor Friendly & Best-In-Class…Reiterate BUY
Mainland Connect NORTHBOUND Flows (To 15 Mar 2024): Biggest Net Buying in a While, CATL a Big Buy
A/H Premium Tracker (To 15 Mar 2024): Liquid AH Premia Starting to Narrow

HK Connect SOUTHBOUND Flows (To 15 Mar 2024); Strong Net Buying on Tencent and ETFs

A shares were up small on the week. The spivvier the better. HK was up better, especially among the liquid names.
Net SOUTHBOUND buying was +HK$21.4bn in the fourth post-holiday week vs +HK$17bn the week before. SOUTHBOUND has net bought every day since the end of Chinese New Year.
The flavour of SOUTHBOUND buying has been high-div SOEs for months and months. That is starting to change slightly. Tencent was a net buy the second week in a row.

[KE Holdings (BEKE US, BUY, TP US$24) Review]: Investor Friendly & Best-In-Class…Reiterate BUY

By Eric Wen

KE Holdings’ (BEKE) reported C4Q23 revenue 6.2%/7.5% above our est./cons.. Its non-GAAP net income miss our est. by 8.3%, due to bad debt write-off and year-end bonus
Although recovery in new home market remains muddy, we view Beike’s commitment to deliver 5% yield through dividend and stock buyback as investor friendly.
We reiterate BUY rating and maintain TP at US$24/ADS .

Mainland Connect NORTHBOUND Flows (To 15 Mar 2024): Biggest Net Buying in a While, CATL a Big Buy

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 32.8bn of A-shares on decent volume after one RMB-3bn week following 5 weeks straight of net buying total RMB +63bn. Foreigners are in.
The volume now is back to chasing momentum, but given so much net buying, much of it appears to be passive plus a CATL kicker.

A/H Premium Tracker (To 15 Mar 2024): Liquid AH Premia Starting to Narrow

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 a net buyer every day since the end of Chinese New Year. NORTHBOUND a huge net buyer this week, now net buyers in size (RMB +93bn) over 7 weeks.
For the first time in a while, AH premia among liquid stocks fell convincingly. Narrow AH premia pairs saw Hs outperform more than wide AH premia Hs (vs As).

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

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✓ Company Data and News
✓ Events & Webinars

Mar 17

Daily Brief Quantitative Analysis: A-H Premium Weekly (Mar 15th): Air China and more

By Smartkarma Daily Briefs | Daily Briefs, Quantitative Analysis

In today’s briefing:

A-H Premium Weekly (Mar 15th): Air China, QHD Port, Datang Intl, Wuxi Apptec, PetroChina, CGN Power
HK Short Interest Weekly: Zijin Mining, Techtronic Ind, CNOOC, Kuaishou, HSBC, Trip.Com
Hong Kong Connect Flows (Mar 15th): BOC, Tencent, CNOOC, Zto Express, Kuaishou, Anta Sports
Northbound Flows (Mar 15th): $5bn of Inflows Last Week
TWSE Short Interest Weekly (Mar 15th): Wistron, Hon Hai, Asia Vital, Wt, Umc, Unimicron Tech, Wiwynn

A-H Premium Weekly (Mar 15th): Air China, QHD Port, Datang Intl, Wuxi Apptec, PetroChina, CGN Power

We analyse the changes of A-H premium on 146 stocks over the last week. The average A-H premium was 123.2% as of Mar 15th.
The average A-H premium changed by -0.1ppt week-on-week, led by communication services, utilities, energy and offset by consumer staples, real estate, health care.
We highlight weekly changes in A-H premium for Air China, QHD Port, Datang Intl, Wuxi Apptec, PetroChina, CGN Power.

HK Short Interest Weekly: Zijin Mining, Techtronic Ind, CNOOC, Kuaishou, HSBC, Trip.Com

We analyzed the latest HK SFC report for aggregate short position as of Mar 8th.
Top short increases and decreases were tabulated for one week and four week period.
We highlight short changes in Zijin Mining, Techtronic Ind, CNOOC, Kuaishou, HSBC, Trip.Com.

Hong Kong Connect Flows (Mar 15th): BOC, Tencent, CNOOC, Zto Express, Kuaishou, Anta Sports

We analyze the weekly Hong Kong Connect flows with our data engine for holding position as of March 15th.
The top stocks by inflows and outflows were tabulated for all market, HSCEI, mid cap and s/mid cap groups.
We highlight flows for Bank Of China, Tencent, CNOOC, Zto Express, Kuaishou Technology, Anta Sports Products.

Northbound Flows (Mar 15th): $5bn of Inflows Last Week

We analyze the weekly Shanghai/Shenzhen northbound Connect flows with our data engine for holding position as of March 15th.
We estimate the weekly inflows to be US$5,038.2 million, led by industrials, consumer discretionary, consumer staples sectors.
We highlight flows for CATL, Wuliangye, China Tourism, Moutai, Midea.

TWSE Short Interest Weekly (Mar 15th): Wistron, Hon Hai, Asia Vital, Wt, Umc, Unimicron Tech, Wiwynn

We analyzed the changes in short interest of TWSE Stocks as of Mar 15th which has an aggregated short interest worth USD70.1bn.
We tabulate league table for top short by value and short as multiple of ADT, as well as weekly increases & decreases in short value, short as multiple of ADT.
We highlight short interest changes in Wistron, Hon Hai, Asia Vital, Wt, Umc, Unimicron Tech, Wiwynn, Mediatek.

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

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✓ Company Data and News
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Mar 17

Daily Brief Thematic (Sector/Industry): India’s Mutual Fund Stress Testing Is Not the Solution Which Is Need of Hour. and more

By Smartkarma Daily Briefs | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

India’s Mutual Fund Stress Testing Is Not the Solution Which Is Need of Hour.
[Blue Lotus Daily]9926HK/1801HK/1877HK/BGNE/ZLAB/9995HK/1211HK/XPEV/1810HK/Chery Automobile/LI/NIO
[Blue Lotus Daily – TMT Update]:BABA/002352 SZ/1519 HK/3690 HK/META/700 HK/259960 KRX

India’s Mutual Fund Stress Testing Is Not the Solution Which Is Need of Hour.

By Nimish Maheshwari

What is a stress test? How it is being calculated?
Key Takeaways of Mutual Fund’s Stress Test Results. What should investors know?
Flaws in SEBI’s Stress Testing Results and Way Ahead for investors

[Blue Lotus Daily]9926HK/1801HK/1877HK/BGNE/ZLAB/9995HK/1211HK/XPEV/1810HK/Chery Automobile/LI/NIO

By Eric Wen

9926 HK /1801 HK /1877 HK/ BGNE/ ZLAB/9995 HK: US lobbying group distanced itself from Wuxi AppTec after being accused（/）
1211 HK/ XPEV/ 1810 HK：GAC AION orders surged after price cuts（/）
Chery Automobile:It Is Reported that Chery Automobile Is in Talks with the Italian government to build a factory（/）

[Blue Lotus Daily – TMT Update]:BABA/002352 SZ/1519 HK/3690 HK/META/700 HK/259960 KRX

By Ying Pan

BABA/002352.SZ/1519.HK: Taobao/Tmall adjusts algorithm to favor merchants with better service capabilities (+/+/-)
3690 HK: Meituan QuanQuan shift from direct operating into third party operating, and cut nearly 200 BD job positions(+)
700 HK/259960 KRX:The development team of <PUBG> has unveiled its major game update plan for 2024.(+)

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

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

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

Mar 17

Daily Brief Event-Driven: HK Connect SOUTHBOUND Flows (To 15 Mar 2024); Strong Net Buying on Tencent and ETFs and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

HK Connect SOUTHBOUND Flows (To 15 Mar 2024); Strong Net Buying on Tencent and ETFs
Updated Tool and New “Diff File Generator” for TSE “Mgmt Conscious of Capital Cost/Stock Price”
(Mostly) Asia-Pac M&A:QV Equities, TASK, Qantm, Superloop, CIMC Vehicle, JSR, Roland DG, Outsourcing
Investigating the Size and Timing of Korea’s Local Dividend Arbitrage Traders’ Position Liquidation
Weekly Deals Digest (17 Mar) – JSR, Roland DG, CIMC Vehicles, Li Ning, Alumina, QV Equities, Japfa
Mainland Connect NORTHBOUND Flows (To 15 Mar 2024): Biggest Net Buying in a While, CATL a Big Buy
A/H Premium Tracker (To 15 Mar 2024): Liquid AH Premia Starting to Narrow
Quiddity Leaderboard BSE/SENSEX Jun 24: Who Will Replace Wipro?
Last Week in Event SPACE: Keisei Electric /Oriental Land, SingTel, Alumina/Alcoa, Li Ning

HK Connect SOUTHBOUND Flows (To 15 Mar 2024); Strong Net Buying on Tencent and ETFs

A shares were up small on the week. The spivvier the better. HK was up better, especially among the liquid names.
Net SOUTHBOUND buying was +HK$21.4bn in the fourth post-holiday week vs +HK$17bn the week before. SOUTHBOUND has net bought every day since the end of Chinese New Year.
The flavour of SOUTHBOUND buying has been high-div SOEs for months and months. That is starting to change slightly. Tencent was a net buy the second week in a row.

Updated Tool and New “Diff File Generator” for TSE “Mgmt Conscious of Capital Cost/Stock Price”

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. On Feb 1, the TSE put out a presentation and set of case studies.
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.

(Mostly) Asia-Pac M&A:QV Equities, TASK, Qantm, Superloop, CIMC Vehicle, JSR, Roland DG, Outsourcing

I tally 50 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal.
Two new deals were discussed this week on Smartkarma: WAM Leaders (WLE AU) scrip-deal for QV Equities (QVE AU); and TASK Group (TSK AU)‘s Scheme with PAR Technology (PAR US).
Key updates took place on: Qantm Intellectual Property (QIP AU), Superloop (SLC AU), CIMC Vehicle (1839 HK), JSR Corp (4185 JP), Roland DG Corp (6789 JP), and Outsourcing (2427 JP).

Investigating the Size and Timing of Korea’s Local Dividend Arbitrage Traders’ Position Liquidation

By Sanghyun Park

Estimating FINANCIAL INVESTMENT’s dividend arbitrage positions’ exact size and liquidation plans is challenging. Yet, past trading patterns suggest a substantial portion may be liquidated soon, akin to January’s volume (≥₩2T).
Many local market participants expect a scenario unfolding post-March, aligning with KOSPI companies rescheduling ex-dividend dates. Expect substantial position liquidation by April’s end, likely impacting index negatively, akin to January.
Position setups should adapt to short-term index corrections, leveraging earnings season for earnings-based spreads using index short hedging.

Weekly Deals Digest (17 Mar) – JSR, Roland DG, CIMC Vehicles, Li Ning, Alumina, QV Equities, Japfa

By Arun George

A weekly summary of key developments across ECM and Event-Driven names tracked by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Thailand, Korea, India and Chinese ADRs.
ECM developments: Trial Holdings (5882 JP) and Lianlian DigiTech (2104619D CH) IPOs.
Event-Driven developments: JSR Corp (4185 JP), Roland DG Corp (6789 JP), Yaizu Suisankagaku Industry (2812 JP), Alumina Ltd (AWC AU), QV Equities Ltd (QVE AU), CIMC Vehicles.

Mainland Connect NORTHBOUND Flows (To 15 Mar 2024): Biggest Net Buying in a While, CATL a Big Buy

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 32.8bn of A-shares on decent volume after one RMB-3bn week following 5 weeks straight of net buying total RMB +63bn. Foreigners are in.
The volume now is back to chasing momentum, but given so much net buying, much of it appears to be passive plus a CATL kicker.

A/H Premium Tracker (To 15 Mar 2024): Liquid AH Premia Starting to Narrow

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 a net buyer every day since the end of Chinese New Year. NORTHBOUND a huge net buyer this week, now net buyers in size (RMB +93bn) over 7 weeks.
For the first time in a while, AH premia among liquid stocks fell convincingly. Narrow AH premia pairs saw Hs outperform more than wide AH premia Hs (vs As).

Quiddity Leaderboard BSE/SENSEX Jun 24: Who Will Replace Wipro?

By Janaghan Jeyakumar, CFA

In this insight, we take a look at the Potential ADDs/DELs for the BSE SENSEX, 100, and 200 Indices in the June 2024 index rebal event.
As things stand, there could be one index change for the SENSEX index but there is room for these names to change during the remainder of the reference period.
Separately, there could be five ADDs/DELs for the BSE 100 index and six ADDs/DELs for the BSE 200 index.

Last Week in Event SPACE: Keisei Electric /Oriental Land, SingTel, Alumina/Alcoa, Li Ning