Category

Daily Briefs

Mar 05
0

Daily Brief Australia: Genex Power Ltd and more

By | Australia, Daily Briefs

In today’s briefing:

  • Genex (GNX AU): J-Power’s Indicative Offer
  • Genex Power (GNX AU): J-Power’s Dual-Track Non-Binding Proposal

Genex (GNX AU): J-Power’s Indicative Offer

By David Blennerhassett

  • Back in July 2022, Aussie renewable energy player Genex (GNX AU) announced an A$0.23/share NBIO from Skip Enterprises and Stonepeak, subsequently bumped to A$0.25/share, and confirmatory due diligence provided.
  • Negotiations ceased in December that year.  As of today, Scott Farquhar’s Skip Enterprises continues to hold a 19.9% stake in Genex. 
  • This morning, Genex announced an A$0.275/share NBIO from Electric Power Development (9513 JP) (J-Power), by way of a Scheme. A concurrent off-market A$0.27/share is in place.

Genex Power (GNX AU): J-Power’s Dual-Track Non-Binding Proposal

By Arun George

  • Genex Power Ltd (GNX AU) has disclosed a non-binding scheme proposal from Electric Power Development C (9513 JP) at A$0.275, a 48.6% premium to the undisturbed price of A$0.185.
  • If the scheme fails, J-Power will launch an off-market takeover offer with a 50.1% minimum acceptance condition at A$0.270 per share. The dual-track bid is meant to counter Skip’s stake.
  • The Board has granted exclusive due diligence until 31 March. The offer is attractive, but the scheme’s completion hinges on Skip Capital’s acceptance.  

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Mar 05
0

Daily Brief China: Alibaba (ADR), NetEase Inc, Vinda International, BeiGene , Hang Seng Index, Trip.com, Vipshop Holdings, China Travel International Investment Hong Kong, China Construction Bank H and more

By | China, Daily Briefs

In today’s briefing:

  • China Consumption Weekly (4 Mar 2024): Alibaba, Sun Art, Li Auto, Nayuki, NetEase, Vipshop
  • [NetEase, Inc. (NTES US, BUY, TP US$122) TP Change]: Strong Games Pipelines Offering More Potentials
  • Vinda International (3331 HK): Pre-Condition Satisfied
  • BeiGene (6160.HK/​BGNE.US/688235.CH) – Pain Points Behind the High Growth
  • EQD | The Hang Seng Index’s Turning Point
  • Monthly Chinese Tourism Tracker | January & Initial Read On February Both Indicate Solid Growth
  • [Vipshop (VIPS US, BUY, TP US$20.4)TP Change]: Will Live for the Moment Consumption Persist in 2024?
  • China Travel Intl Inv (308 HK): A Laggard that Sets to Catch Up
  • Vinda (3331 HK): That’s A Wrap As Pre-Cons Done
  • CCB- Housing Rental Subsidiary Listing May Be Overshadowed By Weak Credit Metrics

China Consumption Weekly (4 Mar 2024): Alibaba, Sun Art, Li Auto, Nayuki, NetEase, Vipshop

By Ming Lu

  • Alibaba closed four more supermarkets at the end of February.
  • Alibaba is moving retailers from the discount app back to Taobao.
  • Li Auto’s deliveries increased by 62% YoY in the first two months of 2024.

[NetEase, Inc. (NTES US, BUY, TP US$122) TP Change]: Strong Games Pipelines Offering More Potentials

By Ying Pan

  • NetEase reported C4Q23 top line, GAAP operating profit and GAAP net income (4.8%), (16%) and (9.0%) vs. our estimates, and (3.6%), (12%) and (6.8%) vs. consensus， mainly due to..
  • The positive, however, is the acceleration of launch of <Naraka Mobile> by 1-2 quarters. Our estimate of the gross billing remains the same;
  • We remain optimistic about the upcoming pipeline, and we raise our TP to US$122. Our new TP implies 15.4X PE, which is 12% above current price.

Vinda International (3331 HK): Pre-Condition Satisfied

By Arun George

  • Vinda International (3331 HK) has announced the pre-condition for Sukanto Tanoto’s HK$23.50 voluntary offer is satisfied. The composite document will be despatched on or before 11 March. 
  • The offeror has received irrevocables from Essity (ESSITYB SS) and Mr Li, representing 72.62% of outstanding shares, which satisfies the 50% minimum acceptance condition.
  • Including irrevocables, the offeror currently represents 80.31% of outstanding shares. The offeror intends to exercise compulsory acquisition rights. The tight 0.4% gross spread reflects a done deal. 

BeiGene (6160.HK/​BGNE.US/688235.CH) – Pain Points Behind the High Growth

By Xinyao (Criss) Wang

  • Although people acknowledged BeiGene’s performance, it still makes us uneasy about a long-standing question: When will BeiGene be profitable?With current cost structure, there’s at least two years left until breakeven. 
  • BeiGene’s internationalization only proves decent increase in revenue, but it doesn’t yet verify its profitability.SG&A expense ratio completely deviates from the normal state of Biotech with over US$2 billion sales.
  • If BeiGene indeed has a plan to turn loss into profits, besides maintaining a high growth rate in sales, reasonable optimization in cost and expenses is the most basic “sincerity”.

EQD | The Hang Seng Index’s Turning Point

By Nico Rosti

  • The Hang Seng Index closed the month of February up, printing a +6.63% return, after months of uninterrupted downtrend.
  • The big question at this point is: has the index reached the turning point that many have been waiting for?
  • In this insight we will try to analyze what the possible short-term trend could be for the index after the recent trend reversal.

Monthly Chinese Tourism Tracker | January & Initial Read On February Both Indicate Solid Growth

By Daniel Hellberg

  • Adjusting for impact of LNY timing, January numbers still seem firm
  • Headline February / LNY 2024 traffic growth also appears solid
  • Our thesis remains that tourism recovery takes longer, strongest in H124

[Vipshop (VIPS US, BUY, TP US$20.4)TP Change]: Will Live for the Moment Consumption Persist in 2024?

By Ying Pan

  • Vipshop reported C4Q23 top-line, non-GAAP EBIT, and GAAP net profit in-line, 6.3% and 7.0% vs. our estimate, and 4.5%, 20.5%, and 23.9%, vs. consensus, respectively;
  • We expect the two themes of “live for the moment” consumption and consumption downgrade to persist in 2024. The former drives apparel spending, while the latter drives consumers to Vipshop
  • We maintain BUY and raise the TP to US$ 20.4, implying 7.7x CY24 non-GAAP P/E, and 4.9x CY24 EV/Earnings.

China Travel Intl Inv (308 HK): A Laggard that Sets to Catch Up

By Osbert Tang, CFA

  • China Travel International Investment Hong Kong (308 HK) has an impressive 2024 CNY with the volume and revenue of its tourist attractions increased by 46% to 123% YoY.
  • Relative to 2019 CNY, most businesses have fully recovered. 1H23 earnings is the highest since 1H20 and the market may have underestimated 2H23, providing upside surprise potential. 
  • The share price is still some 30% below the peak in late-2021 when earnings have yet to recover. Also, its net cash now equals 19% of the share price. 

Vinda (3331 HK): That’s A Wrap As Pre-Cons Done

By David Blennerhassett

  • On the 15 December 2023, the Tanoto family emerged with a HK$23.50 pre-conditional Offer for Vinda (3331 HK). PRC regulatory approval to one side, this Offer was a done deal.
  • Those regulatory approvals have now been satisfied. The Composite Doc will be dispatched on or before the 11th March, at which time the Offer will be open for acceptances. 
  • With a 50% minimum acceptance condition and irrevocables of 72.624% (plus Tanoto’s 7.69% direct stake), this should turn unconditional on or before the 20th March

CCB- Housing Rental Subsidiary Listing May Be Overshadowed By Weak Credit Metrics

By Daniel Tabbush

  • The large SOE bank indicates that it will list its housing rental subsidiary, although the proceeds may be inconsequential given the size of CCB.
  • CCB shows lower (and very low) credit costs despite what appears to be a major weakening in its NPL distribution.
  • Loss NPLs are up 2.5x from FY19 to 1H23 much more than its 1.5x rise in total NPLs, so that its declining and benign credit costs may not last.

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Mar 05
0

Daily Brief Singapore: UOL Group and more

By | Daily Briefs, Singapore

In today’s briefing:

  • Director filings and buyback momentum return

Director filings and buyback momentum return

By Geoff Howie

  • Director filings and buyback momentum return Singapore Technologies Engineering (ST Engg) led the buyback consideration tally, repurchasing 500,000 shares at an average price of S$3.97 each on Feb 29.
  • On Feb 26, LHT Holdings managing director Yap Mui Kee acquired 61,000 shares at an average price of S$1.05 per share.

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Mar 05
0

Daily Brief South Korea: SK Hynix, EcoPro Materials and more

By | Daily Briefs, South Korea

In today’s briefing:

  • Why HBM is the Hottest Thing in Memory
  • May Lockup Release & April SSF Listing May Lead to Weird Trading Dynamics for Ecopro Materials
  • Ecopro Materials: Potential Selling by Second Largest Shareholder Post End of Lockup Period in May

Why HBM is the Hottest Thing in Memory

By Douglas O’Laughlin

  • Investing in semiconductors can be pretty simple if you let it be.

  • At a high level, I believe you want to invest in the secular at a decent price or invest in places where there are unwarranted dislocations.

  • Sometimes the entire ecosystem says one thing and the stocks say another. Usually, the ecosystem is right.

May Lockup Release & April SSF Listing May Lead to Weird Trading Dynamics for Ecopro Materials

By Sanghyun Park

  • May 17th, all eyes on EcoPro Materials for a buzzed-about lockup release. BRV Capital holds 24.5% stake, 17M shares. Lockup ends May 16th; they’re free to sell off without constraints.
  • Apparently, they’re eager to cash out, with a profit margin around 30 times and 7 years invested. Many at Yeouido bet they’ll sell out once the lockup’s over.
  • We might start building a shorting position with futures targeting this lockup release from April 22nd. This could stir up some weird backwardation, which could give us another trading opportunity.

Ecopro Materials: Potential Selling by Second Largest Shareholder Post End of Lockup Period in May

By Douglas Kim

  • We discuss the strong likelihood of potential selling of EcoPro Materials by BRV Capital Management (the second largest shareholder of Ecopro Materials with a 24.7% stake) in May 2024. 
  • BRV Capital Management’s stake in Ecopro Materials is currently worth 3.1 trillion won. In the past seven years, BRV Capital Management has invested about 93 billion won in Ecopro Materials. 
  • On 4 March, Ecopro Materials announced it has entered into a contract to supply precursor to a U.S. auto company. There is some local speculation that this could be Tesla. 

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Mar 05
0

Daily Brief United States: Reddit , TDCX, Markel Corp, VanEck Gold Miners ETF/USA, Crude Oil, Bitcoin, Gold and more

By | Daily Briefs, United States

In today’s briefing:

  • Reddit IPO Valuation Analysis
  • TDCX (TDCX US)’s $7.20/Share Short-Form Merger
  • Portfolio Update: February 2024
  • Reddit IPO: The Right Time To Go Public At A Reasonable Valuation
  • Gold Miners: Refuge From the YOLO and FOMO Frenzy
  • Commodity Hedge Fund Positioning & Red Sea Update
  • Reddit IPO Valuation Analysis: $1B+ Revenue and Profitable Company in 2024
  • Crypto Crisp: Two Scenarios
  • Mining Monthly: February Edition

Reddit IPO Valuation Analysis

By Douglas Kim

  • Reddit plans to price its IPO between $31 to $34 a share, which would suggest equity value of US$6.0 billion to US$6.5 billion on a fully diluted basis.
  • Our base case valuation of Reddit is implied market cap of US$7.9 billion or implied price of US$41.2 per share. 
  • Given the moderate upside relative to the IPO price range, we have a Positive view of the Reddit IPO. 

TDCX (TDCX US)’s $7.20/Share Short-Form Merger

By David Blennerhassett

  • On the 2 January, TDCX (TDCX US), a Singapore-headquartered digital customer experience (CX) provider, announced it had received a preliminary non-binding proposal from Laurent Junique to be acquired at $6.60/ADS.  
  • On the 1st March, TDCX entered in a definitive agreement by way of a short form merger at US$7.20/ADS, a 48% premium to undisturbed.
  • As Laurent Junique holds 98.4% of the voting power, there is no shareholder vote on the merger. This is done. The Offer should close in the 2Q24.  

Portfolio Update: February 2024

By Contrarian Cashflows

  • Recently, a friend of mine asked me why I own positions in Markel and Brookfield, as they do not align with my typical investment style of small niche companies trading at attractive free cash flow yields. 
  • I consider both companies as alternatives to index funds, benefiting from the expertise of two exceptional capital allocators, Tom Gayner and Bruce Flatt, at no additional cost.
  • Over time, if my investment process proves itself as sound, the positions in Markel and Brookfield should naturally decrease in size.

Reddit IPO: The Right Time To Go Public At A Reasonable Valuation

By Andrei Zakharov

  • Reddit, an American social news aggregation, content rating, and forum social network, filed to go public. The company plans to trade on the NYSE under the ticker “RDDT”.
  • Reddit was founded in 2005 by Steven Huffman, Aaron Swartz and Alexis Ohanian. The company is forecasted to surpass $1B in total revenue in 2024.
  • They chose the right time to go public. I have a positive view of the upcoming Reddit IPO and looking forward to seeing them trade as a public company.

Gold Miners: Refuge From the YOLO and FOMO Frenzy

By Cam Hui

  • If you are concerned about the YOLO and FOMO frenzy in the stock market, you may wish to consider gold and gold mining stocks as refuges.
  • The technical pattern for gold is constructive, but not unabashedly bullish. 
  • Gold miners appear to be washed out against gold and present the best opportunity for gains in the next 6–12 months.

Commodity Hedge Fund Positioning & Red Sea Update

By The Commodity Report

  • CTA Positioning Update According to UBS’ biweekly CTA momentum study, CTAs bought oil and sold precious metals in size in February.
  • The investment bank expects ⅔ of those flows to reverse in the next two weeks.
  • CTA’s have meanwhile built a decent short position in agriculturals, and flows should remain negative there.

Reddit IPO Valuation Analysis: $1B+ Revenue and Profitable Company in 2024

By Andrei Zakharov

  • According to Pitchbook and their S-1, Reddit has raised ~$1.5B in equity financing. Their last private round, a Series F led by Fidelity in August 2021, was around ~$10B valuation.
  • I derive a target valuation for Reddit using a ~8x EV/Revenue multiple on my 2024 estimates. The multiple represents a top-range multiple of the peer group.
  • I arrived at my ~$9.6B target valuation, which implies 50% upside to indicative IPO valuation at the midpoint. I expect Reddit will trade above their last round valuation of $10B.

Crypto Crisp: Two Scenarios

By Mads Eberhardt

  • Last week was notably positive for the cryptocurrency market, particularly for Bitcoin and Ethereum, which both experienced impressive gains.
  • Bitcoin’s price has surged to $65,000, marking an increase of over 25%, while Ethereum has increased to $3,510, up by approximately 15%.
  • This puts Bitcoin close to its highest ever price, just below $69,000.

Mining Monthly: February Edition

By Atrium Research

  • Gold held flat in February, continuing a long period of consolidation, and most other metals were down modestly.
  • The precious metal equities further sold off in February, compounding the losses in January, highlighting to the market this industry is still out of favour.
  • We had several significant updates from companies within our coverage.

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Mar 05
0

Daily Brief Indonesia: Indo Tambangraya Megah, Medco Energi and more

By | Daily Briefs, Indonesia

In today’s briefing:

  • ITMG IJ: Q4 2023 Inline, Deep Value, 45% of the Mkt Cash and ~11% Dividend Yield on Spot
  • Medco Energi – ESG Report – Lucror Analytics

ITMG IJ: Q4 2023 Inline, Deep Value, 45% of the Mkt Cash and ~11% Dividend Yield on Spot

By Sameer Taneja

  • Indo Tambangraya Megah (ITMG IJ) reported its Q4 2023/FY23 numbers with revenues down 46%/35% YoY and profits down 58%/69% YoY on declining coal prices (113 USD/ton Vs 192 USD/ton) .
  • We expect spot coal prices to remain range-bound between 130-150 USD/ton, resulting in company profits ranging between 350-500 mn USD (4x-6x PE range) with dividend yield ranging from 11%-15%.
  • The company also has a cash buffer of 850 million USD, roughly 45% of the current market capitalization. 

Medco Energi – ESG Report – Lucror Analytics

By Leonard Law, CFA

Lucror Analytics’ ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable).
We assess Medco Energi’s ESG as “Adequate”, in line with its scores for the Environmental, Social and Governance pillars. Controversies are “Immaterial” and Disclosure is “Adequate”.

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Mar 05
0

Daily Brief India: Titan Co Ltd, Macrotech Developers and more

By | Daily Briefs, India

In today’s briefing:

  • NIFTY100 Low Volatility 30 Index Rebalance Preview: Titan Could Replace IOCL
  • Macrotech Developers Placement – Large Deal, and Not Cheap Per Se

NIFTY100 Low Volatility 30 Index Rebalance Preview: Titan Could Replace IOCL

By Brian Freitas

  • With the review period complete, Titan Co Ltd (TTAN IN) should replace Indian Oil Corp (IOCL IN) in the Nifty100 Low Volatility 30 Index at the close on 27 March.
  • Constituent changes, volatility changes and capping changes will result in one-way turnover of 13.2% resulting in a one-way trade of INR 4.2bn.
  • The flows on the stocks are not very large but there will be same side and offsetting flows from other index trackers at the same time.

Macrotech Developers Placement – Large Deal, and Not Cheap Per Se

By Clarence Chu

  • Macrotech Developers (LODHA IN) is looking to raise around US$398m via a QIP.
  • The deal here will be a well flagged one with LODHA’s board having announced its intention of raising up to INR50bn via a QIP earlier in Jan 2024.
  • That being said, while representing just 3% of LODHA’s shares outstanding, the deal would be a large one to digest at 30 days of its three month ADV.

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Mar 05
0

Daily Brief Japan: Socionext, JSR Corp, ZOZO Inc, Trial Holdings, Sanyo Trading, Srg Takamiya and more

By | Daily Briefs, Japan

In today’s briefing:

  • Mar24 Nikkei 225 Rebal – Socionext, Disco, Zozo IN; US$4bn One-Way; More Impactful Than It Looks
  • JSR Corporation (4185 JP): Something Is Brewing, but Nobody Knows Quite What
  • Nikkei 225 Index Rebalance: DISCO, Socionext, ZOZO In; PacMetals, Sumitomo Osaka, Takara Holding Out
  • Trial Holdings IPO – Not Wholly Convinced but a Strong Market Should Help
  • Sanyo Trading (3176 JP) – Small Secondary Offering as Banks Sell, More Later
  • 3Q Follow-Up – Takamiya (2445 JP)

Mar24 Nikkei 225 Rebal – Socionext, Disco, Zozo IN; US$4bn One-Way; More Impactful Than It Looks

By Travis Lundy

  • The changes to the Nikkei 225 Average for the March 2024 Review were announced today after the close. A little earlier than I expected. 
  • Socionext, Disco, Zozo IN; Takara Hldgs, Sumi Osaka Cement, Pacific Metals OUT. Nitori PAF increase. US$4bn+ to trade one way on 29Mar close. One interesting surprise. 
  • Overall more impactful than it looks. And it changes the front-end arithmetic on Fast Retailing (9983 JP). There may be fun on the DELETEs.

JSR Corporation (4185 JP): Something Is Brewing, but Nobody Knows Quite What

By Arun George

  • JSR Corp (4185 JP)’s shares rose 4.8% due to a Nikkan Kogyo article that states that JIC will start the tender within the month due to concluding negotiations with SAMR. 
  • Caution is warranted as JSR has not provided a customary timeline update, no confirmatory disclosure from SAMR and JSR’s response to SUNY RF’s claims are yet to be filed.
  • Based on current information, there are five possible tender scenarios. In the worst case, the downside risk on a deal break should be muted due to the market re-rating. 

Nikkei 225 Index Rebalance: DISCO, Socionext, ZOZO In; PacMetals, Sumitomo Osaka, Takara Holding Out

By Brian Freitas

Trial Holdings IPO – Not Wholly Convinced but a Strong Market Should Help

By Sumeet Singh

  • Trial Holdings (5882 JP) (TH) is now looking to raise up to US$259m in its Japan IPO, after having canceled its prior listing attempt last year.
  • TH operates a network of retail stores that offer one-stop shopping under its everyday low price model, across a variety of daily necessities, food items and other products.
  • We have looked at the company’s past performance in our previous notes. In this note, we talk about implied valuations in the IPO range.

Sanyo Trading (3176 JP) – Small Secondary Offering as Banks Sell, More Later

By Travis Lundy

  • Sanyo Trading (3176 JP) is a small specialised trading company (rubber, polymers, elastomers, etc). Niche, decent profitability/margins, highish ROE.
  • Banks in the MUFG and SMBC family are selling. Norinchukin is selling a bit too. 
  • This is small in size but big in impact. 20% of Max RWF. 50d ADV. Unlike other recent, larger, offerings, this has no flow mitigants. But it’s cheap.

3Q Follow-Up – Takamiya (2445 JP)

By Sessa Investment Research

  • Takamiya announced its 3Q FY24/3 consolidated sales of ¥32,183 mn (+4.9% YoY), operating profit of ¥2,405 mn (+49.7% YoY), ordinary profit of ¥2,526 mn (+46.5% YoY), and profit attributable to owners of parent (hereafter, net profit) of ¥1,727 mn (+46.9% YoY).
  • All the segments, sales business, rental business and overseas business, posted an increase in operating profit YoY.
  • Especially, rental business became a driving force of the expansion of the whole business. 

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Mar 04
0

Most Read: Nippon Express Holdings, TSE Tokyo Price Index TOPIX, Korea Stock Exchange Kospi Index, Yankuang Energy Group, Air Lease Corp, Flight Centre Travel, China Telecom (H), Great Wall Motor, Bizlink Holding and more

By | Daily Briefs, Most Read

In today’s briefing:

  • Nippon Express (9147) Secondary Offering – Banks, Sompo, Others Sell – “2024 Problem” Looms
  • JAPAN FLOW: Foreigners Vs Cross-Holding Unwinds Vs Buybacks Vs Pensions
  • Korea Value-Up Index: Probable Constituents & Impact of NPS’ US$8.2bn Allocation
  • Index Rebalance & ETF Flow Recap: STAR50/100, FXI, NIFTY/NEXT50, S&P500, KOSPI, Goodman, Ecopro BM
  • S&P 500/400/600 Index Rebal – It’s Not The Trade You Think
  • S&P/​​​​ASX Index Rebalance (Mar 2024): Changes, Flows, Impact, Shorts & Positioning
  • HK Connect SOUTHBOUND Flows (To 1 Mar 2024); Continued Big Buys of SOEs (Getting Boring to Say This)
  • Nippon Express (9147 JP): A US$260 Million Secondary Offering
  • A/H Premium Tracker (To 1 Mar 2024):  Liquid AH Premia Still Wide
  • Quiddity TDIV/​50/​100 Mar 24 Rebal: Disappointing Result but Trade Successful So Far; Bail Out Now!

Nippon Express (9147) Secondary Offering – Banks, Sompo, Others Sell – “2024 Problem” Looms

By Travis Lundy

  • Today post-close, Nippon Express Holdings (9147 JP) announced a secondary offering. Total size is ~¥30bn before considering where it will price; 11-12 days of ADV, 4.6% of shares out.
  • Various banks, Toyota-related auto cos, and Sompo Japan will sell. This is a start to the unwind, but it is a very small portion of the total cross-holding position. 
  • NX also announced an on-market  buyback of up to ¥10bn to run from 11April -31July 2024. This, and index demand, mitigate some heaviness. But The 2024 Problem looms large.

JAPAN FLOW: Foreigners Vs Cross-Holding Unwinds Vs Buybacks Vs Pensions

By Travis Lundy

  • For years I have tracked investor category flows in Japanese stocks because I find them quite informative. I write about them every so often in an insight series JAPAN FLOW.
  • The series, which I have written about for years, suggests foreign investors invest in Japan pro-cyclically and that correlates well to One (relatively) Simple Indicator.
  • Foreigners have a lot of ammunition left. But cross-holding unwinds are picking up, and buybacks are too, and dividend reinvestments are smaller than public pension selling. Which way next?

Korea Value-Up Index: Probable Constituents & Impact of NPS’ US$8.2bn Allocation

By Brian Freitas

  • Media reports indicate that the National Pension Service (NPS) could invest up to KRW 11tn (US$8.2bn) in a new index tracking stocks with low Price to Book ratios.
  • Filtering stocks with market cap higher than US$500m, ADTV of atleast US$1m, div yield of atleast 1.5% and Price to Book less than 1 throws up 94 potential index candidates.
  • Choosing an index of 50 stocks will require managers to buy between 1.7-3.4% of the float on the stocks. Increasing the number of constituents will reduce the impact.

Index Rebalance & ETF Flow Recap: STAR50/100, FXI, NIFTY/NEXT50, S&P500, KOSPI, Goodman, Ecopro BM

By Brian Freitas

  • The last week was a very busy one. The coming week has some announcements and implementations but is a relatively quieter one.
  • The SSE STAR50 (STAR50 INDEX) and STAR100 Index changes for March will be implemented at the close on Friday, the 8th.
  • Another week of inflows for the iShares Emerging Markets ex-China (EMXC US) ETF as creations cross US$2bn for 2024. ETF AUM has gone from US$420m in 2021 to US$11bn now!

S&P 500/400/600 Index Rebal – It’s Not The Trade You Think

By Travis Lundy

S&P/​​​​ASX Index Rebalance (Mar 2024): Changes, Flows, Impact, Shorts & Positioning

By Brian Freitas

  • There is 1 change for the S&P/ASX20 Index, 2 changes for the S&P/ASX100 Index, 4 changes for the S&P/ASX200 INDEX and 14 adds/10 deletes for the S&P/ASX300 Index in March.
  • The largest impact is expected on the changes to the S&P/ASX 200 (AS51 INDEX) while flows are large among changes to the S&P/ASX 20 Index and S&P/ASX 100 Index too.
  • There has been a steady increase in cumulative excess volume for most stocks but there are a few where there has been a spike recently.

HK Connect SOUTHBOUND Flows (To 1 Mar 2024); Continued Big Buys of SOEs (Getting Boring to Say This)

By Travis Lundy

  • A share indices were up on the week. HK stock indices were down except for HS Tech. H-shares with A-share pairs were up. 
  • Net SOUTHBOUND buying was HK$9.1bn in the second post-holiday week after being +HK$20bn in the first week. LOTS of SOEs on the net buying side. Still.
  • SOUTHBOUND continues to buy high-div SOEs. ex-div is still three months away, and given the new KPIs discussed late January by SASAC official, these still seem to be appropriate targets.

Nippon Express (9147 JP): A US$260 Million Secondary Offering

By Arun George

  • Nippon Express Holdings (9147 JP) has announced a secondary offering of up to 4.8 million shares (including overallotment). There are seven selling shareholders.
  • The secondary offering comes ahead of the implementation of regulatory restrictions on truck drivers’ overtime in April 2024, which is widely known as the ‘2024 Problem’.
  • Looking at recent large Japanese placements is instructive for understanding the potential offer price. The pricing date will likely fall between 11 and 13 March (likely 11 March).

A/H Premium Tracker (To 1 Mar 2024):  Liquid AH Premia Still 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 and NORTHBOUND flows net positive. NB 5 weeks in a row. AH premia rebounded slightly. AH Premia are still wide on average. Premia curves should still shift flatter.
  • Two Sessions seems like a good place to make positive public statements but recent speeches from the very top seem more oriented towards “The People Must Endure.”

Quiddity TDIV/​50/​100 Mar 24 Rebal: Disappointing Result but Trade Successful So Far; Bail Out Now!

By Janaghan Jeyakumar, CFA

  • The index changes for the March 2024 index rebal event for the T50/100 index family and the TDIV index were confirmed after market close on Friday 1st March 2024.
  • The confirmed changes for T50 and T100 were captured in our expectations but an additional change we expected did not materialize which adversely affected our flow expectations for March 2024.
  • In this insight, we take a close look at the breakdown of our final flow expectations for the upcoming Inclusion/Exclusion and Capping events.

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Mar 04
0

Daily Brief Industrials: Air Lease Corp, Bizlink Holding, Contemporary Amperex Technology (CATL), Nippon Express Holdings, CIMC Vehicles Group , RB Global and more

By | Daily Briefs, Industrials

In today’s briefing:

  • S&P 500/400/600 Index Rebal – It’s Not The Trade You Think
  • Quiddity TDIV/​50/​100 Mar 24 Rebal: Disappointing Result but Trade Successful So Far; Bail Out Now!
  • Mainland Connect NORTHBOUND Flows (To 1 Mar 2024): Foreigners Buy a New Set of Names
  • Nippon Express Placement – Lukewarm Track Record, Although Buyback Could Lift Share Price
  • CIMC Vehicles (301039 CH): Cheap And Steady Long Term Growth Potential
  • Rb Global Inc (RBA.) – Sunday, Dec 3, 2023

S&P 500/400/600 Index Rebal – It’s Not The Trade You Think

By Travis Lundy

Quiddity TDIV/​50/​100 Mar 24 Rebal: Disappointing Result but Trade Successful So Far; Bail Out Now!

By Janaghan Jeyakumar, CFA

  • The index changes for the March 2024 index rebal event for the T50/100 index family and the TDIV index were confirmed after market close on Friday 1st March 2024.
  • The confirmed changes for T50 and T100 were captured in our expectations but an additional change we expected did not materialize which adversely affected our flow expectations for March 2024.
  • In this insight, we take a close look at the breakdown of our final flow expectations for the upcoming Inclusion/Exclusion and Capping events.

Mainland Connect NORTHBOUND Flows (To 1 Mar 2024): Foreigners Buy a New Set of Names

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 23.5bn of A-shares on strong average activity after RMB +49bn the previous four trading weeks. More efforts by authorities to eliminate selling.
  • No finance names of any kind in the top ten this week after 5/10 the week before. Slight tendencies to trade on reversion.

Nippon Express Placement – Lukewarm Track Record, Although Buyback Could Lift Share Price

By Clarence Chu

  • A group of shareholders are looking to raise US$220m from selling their stakes in Nippon Express Holdings (9147 JP).
  • Overall, the deal would be a relatively large one to digest at 11 days of Nippon Express’ three month ADV, and 4.8% of the firm’s total shares outstanding.
  • Together with the announcement, the firm has also guided towards a share buyback program which should provide some share price support a month post-deal,  in our view.

CIMC Vehicles (301039 CH): Cheap And Steady Long Term Growth Potential

By Mohshin Aziz

  • CIMC Vehicles Group (301039 CH) (CIMCV) is a leading global manufacturer of semi-trailers and various truck bodies that is the mainstay of heavy ground goods transport  
  • 9M23 earnings surged by 216% and beat consensus, scope for further earnings upgrade as the business and management outlook statement is very positive   
  • Our target price of CNY12.50 (+31% UPSIDE) is based on 2024 PE 15x – a 10% discount against the industry leader Caterpillar 

Rb Global Inc (RBA.) – Sunday, Dec 3, 2023

By Value Investors Club

Key points

  • Ritchie Brothers has faced challenges such as contentious acquisition, activist involvement, dilutive financing, and firing of key executives
  • Despite these challenges, the company’s profitability has been improving significantly
  • Author believes RB Global’s earnings power will continue to grow, potentially reaching $5 per share by 2025, presenting a favorable comparison to the current share price in the $60s

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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