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Daily Briefs

Daily Brief TMT/Internet: Appier Group, Sindoh Co Ltd, Sea , Samsung SDI, Lenovo, Taiwan Semiconductor (TSMC) – ADR, Freee KK, KLA-Tencor Corp, Hon Hai Precision Industry, Semiconductor Manufacturing International Corp (SMIC) and more

By | Daily Briefs, TMT/Internet

In today’s briefing:

  • Appier (4180) | Be Happier
  • Korea Small Cap Gem #24: Sindoh Co [Net Cash More than 220% of Market Cap]
  • Sea Ltd 2Q23: Revenue Should Align with Consensus, Profitability a Puzzle
  • Samsung SDI (006400KS): Controversy on Battery Fire Impacting Reputation and Financial Performance
  • Lenovo – Tear Sheet – Lucror Analytics
  • Taiwan Tech Weekly: Hon Hai AI Servers Taking Share, Asus Specifies When AI PCs Will Drive Market
  • Freee: Earnings in Line With Guidance; Medium-Term Plan Seems Attainable
  • KLA Corporation: Tech Transitions Powering Their Value! – Major Drivers
  • Hon Hai AI Server Business Expected to Take Market Share 2H23E, Structural Long
  • [SMIC (981 HK, BUY, TP HK$24) TP Change]: Margins Will Decline on No-Profit 8” Wafers Orders


Appier (4180) | Be Happier

By Mark Chadwick

  • Strong Q2 results with revenue +42% yoy versus +33% in Q1
  • Gross margin expansion to 51.3% on improving AI algorithm performance
  • Stock down around 20% over past couple of months, No change to bullish growth forecasts.

Korea Small Cap Gem #24: Sindoh Co [Net Cash More than 220% of Market Cap]

By Douglas Kim

  • Sindoh Co Ltd (029530 KS) is the 24th company in our Korea Small Cap Gems series. 
  • Sindoh has one of the highest net cash/market cap ratios in the entire Korean stock market. Net cash at end of 1Q 2023 was 226% of its market cap. 
  • Sindoh’s operations turned around in 1Q 2023. It had sales of 105.5 billion won (up 26.6% YoY) and operating profit of 9.8 billion won (turned black) in 1Q 2023.

Sea Ltd 2Q23: Revenue Should Align with Consensus, Profitability a Puzzle

By Oshadhi Kumarasiri

  • We remain bearish on Sea (SE US) leading upto Q2 results on 15th August 2023.
  • Our analysis suggests Sea Ltd could hit around $3.25bn revenue in 2Q23, in line with consensus. However, profitability could fall short of consensus expectations.
  • Nonetheless, any downside stemming from a minor earnings shortfall could be rather limited given the existing low consensus and the lackluster price performance leading up to the Q2 earnings announcement.

Samsung SDI (006400KS): Controversy on Battery Fire Impacting Reputation and Financial Performance

By Heejeong (Hollie) Park

  • Samsung SDI is currently facing legal challenges in the United States stemming from a scooter fire during charging and a separate incident involving a lithium-ion battery fire. 
  • These incidents are part of a series of recurring battery fire controversies involving Samsung SDI dating back to 2016. 
  • Notably, the ESG (Environmental, Social, and Governance) risk level for Samsung SDI has been assessed as ‘High,’ supported by an ESG risk score of 2.7.

Lenovo – Tear Sheet – Lucror Analytics

By Trung Nguyen

We view Lenovo as “Low Risk” on the LARA scale, mainly due to the business’ large size, track record and strong balance sheet. Lenovo is the world’s largest PC maker, with the PC segment being the company’s key profit centre. The Mobile segment has been scaled back to certain markets, and has turned profitable. The Data Centre/Server business is promising and has grown impressively, albeit still suffering losses.

Negatively, all three of the company’s market segments are becoming commoditised. The PC markets, having previously experienced a structural decline due to changes in user behaviour as well as substitutes (smartphones and tablets), has enjoyed strong demand as more people have been working from home amid the pandemic.

Our Credit Bias on Lenovo remains “Stable”, as the growth outlook is subdued due to weak post-COVID-19 PC demand. We do not expect the credit to improve further. That said, the strong balance sheet, sound liquidity and solid working-capital management would cushion Lenovo from the PC segment’s inventory adjustment period.

Controversies are “Immaterial” and the ESG Impact on Credit is “Moderately Positive”. ESG-compliant funds may find Lenovo attractive due to its strong ESG. The company has done very well in terms of environmental factors, with a strong management team as well as a long and positive track record. Lenovo is mainly exposed to geopolitical risk, albeit it has managed this very well amid the US-China trade war.


Taiwan Tech Weekly: Hon Hai AI Servers Taking Share, Asus Specifies When AI PCs Will Drive Market

By Vincent Fernando, CFA

  • Hon Hai beat expecations by nearly 30% but reduced 2023E sales guidance. However, the company’s AI server business is expected to take market share and its EV business is developing.
  • Asustek management provided some clarity on when AI PCs might turn from dream into reality — 3Q24E is when the company believes they will contribute significantly to sales volume.
  • Himax reported some improvement in demand from China beleaguered automotive industry and said it expects its dominant global market position for automotive display drivers to continue.

Freee: Earnings in Line With Guidance; Medium-Term Plan Seems Attainable

By Shifara Samsudeen, ACMA, CGMA

  • Freee reported 4QFY06/23 results today. Revenue increased 39.6% YoY to ¥5.4bn (vs consensus ¥5.32bn) while operating losses increased to ¥3.0bn from ¥724m in 4QFY06/2022 (vs consensus ¥2.5bn).
  • Freee KK (4478 JP) ’s full-year revenues and operating losses were in line with the company’s guidance, and increased losses were due to investments related to growth and customer acquisition.
  • The company’s medium-term plan expects revenues of more than ¥50.0bn by FY06/2027E and operating profits by FY06/2025E which seems attainable to us.

KLA Corporation: Tech Transitions Powering Their Value! – Major Drivers

By Baptista Research

  • KLA Corporation delivered a positive result and managed an all-around beat in the last quarter.
  • KLA demonstrated consistent execution amid a competitive market by delivering results at the upper end of the guidance and commitment range.
  • We give KLA Corporation a ‘Hold rating with a revised target price.

Hon Hai AI Server Business Expected to Take Market Share 2H23E, Structural Long

By Vincent Fernando, CFA

  • Hon Hai’s 2Q23 results beat earnings street expectations by nearly 30%, thanks to AI server demand and gross margin rising.
  • Tightening China tech restrictions highlight Hon Hai’s advantageous position for EV development.
  • Structural Long. Any weakness over worries about Apple/consumer products demand is an opportunity to accumulate. Investors shouldn’t let cyclical expectations fluctuations blur their focus on Hon Hai’s structural story.

[SMIC (981 HK, BUY, TP HK$24) TP Change]: Margins Will Decline on No-Profit 8” Wafers Orders

By Shawn Yang

  • SMIC reported C2Q23 top-line, EBIT, and non-IFRS net profit in-line, (10%), and (20%) vs. our est., and in-line, (35%), and (8%) vs. cons., respectively.
  • SMIC guided 3Q revenues up 3-5% QoQ, but gross profit flattish QoQ. This suggests SMIC is shipping 8” wafers with low, or negative profit per wafer.
  • We maintain BUY on Huawei exposure but cut our TP to HK$ 24 to reflect the low profitability of 8” wafer orders that could persist given weak demand.

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Daily Brief Health Care: ImmuneOnco Biopharmaceuticals (Shanghai), EMIS Group PLC, Shionogi & Co, Respiri Ltd, Astrazeneca Plc Spons Adr, OpGen , Bristol Myers Squibb Co and more

By | Daily Briefs, Healthcare

In today’s briefing:

  • Pre-IPO ImmuneOnco Biopharmaceuticals (PHIP Updates) – Slow Development Progress and Gloomy Outlook
  • UnitedHealth/​​EMIS: Provisional Clearance, Estimated Timeline
  • Shionogi & Co (4507 JP): Non-Recurring Income Lifts Q1 Revenue; FY24 Guidance Reiterated
  • Respiri – Raise anticipated to fund the Access acquisition
  • AstraZeneca PLC: What Is The Blueprint For Their Recent Performance? – Key Drivers
  • OpGen – Cash concerns dampen active Q2
  • Bristol-Myers Squibb Company: Can Opdualag’s Launch Save Its Market Position? – Key Drivers


Pre-IPO ImmuneOnco Biopharmaceuticals (PHIP Updates) – Slow Development Progress and Gloomy Outlook

By Xinyao (Criss) Wang

  • ImmuneOnco’s execution/R&D efficiency is far from satisfactory. After about seven years since the establishment in 2015, there are no candidates entering phase III trials or close to market launch.
  • The biggest concerns are druggability and safety profile of CD47-targeted candidates. There could be potential R&D failure risks. The pipeline layout around CD47 also makes it hard to diversify risks.
  • It’s challenging for ImmuneOnco Biopharmaceuticals (Shanghai) (IOB HK) to hit high-quality license-out deals with reputable big pharma, leading to uncertainties on internationalization. We’re conservative about the outlook. 

UnitedHealth/​​EMIS: Provisional Clearance, Estimated Timeline

By Jesus Rodriguez Aguilar

  • The CMA provisionally found that the acquisition of EMIS Group PLC (EMIS LN) may not result in a substantial lessening of competition. Final decision to be published on 5 October.
  • The Court sanctioning could take place on 16 October. The scheme would become effective on 17 October. Assuming settlement by 31 October, spread is 0.99%/4.81% (gross/annualised).
  • Assuming a break of 1,292p, the market is pricing a 97% probability of deal completion (vs. 6% by 15 June).

Shionogi & Co (4507 JP): Non-Recurring Income Lifts Q1 Revenue; FY24 Guidance Reiterated

By Tina Banerjee

  • In Q1FY24, Shionogi & Co (4507 JP) recorded 52% YoY revenue growth to ¥109B, reflecting a one-time payment received for the transfer of co-development and co-commercialization license for ADHD drugs.  
  • Shionogi has reiterated FY24 guidance. The company expects FY24 revenue of ¥450B (up 6% YoY), operating profit of ¥150B (up 1% YoY), and net profit of ¥155B (down 16% YoY).
  • Despite competition, Xocova captured a 60% market share of the treatment group patients in Japan. Over a six-month period since emergency approval, more than 70K patients have used Xocova.

Respiri – Raise anticipated to fund the Access acquisition

By Edison Investment Research

Following the proposed acquisition of Access Managed Services in May 2023, Respiri announced that it has raised the A$3m as planned as part of the share purchase plan (SPP), which we believe are the funds needed to close the acquisition (10 August scheduled closing date). The company has raised a total of A$4.35m (including a convertible note with Obsidian Global) to cover the upfront payment (US$1.25m) for the acquisition, working capital to accelerate US commercialisation and the US$0.25m acquisition purchase consideration due three months post-close. Also, in Q423 (ending June 2023), Respiri signed three new remote patient monitoring (RPM) agreements, increasing the total contracted healthcare customers to 13 (across eight US states), while also bolstering its sales pipeline. The acquisition of the Access platform is a key component of management’s commercialization strategy and we anticipate Respiri to be on track to reach break-even in mid-CY24.


AstraZeneca PLC: What Is The Blueprint For Their Recent Performance? – Key Drivers

By Baptista Research

  • AstraZeneca PLC managed to exceed analyst expectations in terms of revenue and earnings.
  • The first half of the year saw a rise in total revenue.
  • We give AstraZeneca PLC a ‘Hold’ rating with a revised target price.

OpGen – Cash concerns dampen active Q2

By Edison Investment Research

Despite the active second quarter with developments across all operational fronts, OpGen’s cash concerns have increased the risk of the company as a going concern. With a cash balance of $3.2m at end Q223, OpGen has a cash runway into September 2023, meaning the need for immediate financing will be critical. Key quarterly highlights included the extension of the FIND R&D collaboration, a non-exclusive distribution agreement with Fisher Healthcare and new commercial contracts for both Unyvero and ARES services. While topline growth was a little subdued year-on-year due to one-off income in Q222, the operating loss for the period slightly improved to $5.2m (vs $5.3m in Q222), reflecting tighter cost controls and low clinical activity. If management is able to bridge the funding gap, its efforts in building the commercial groundwork could benefit the second half of the year across Unyvero, Acuitas and ARES. Due to the funding announcement, we have put our estimates and valuation on hold and will reassess as financing updates become available.


Bristol-Myers Squibb Company: Can Opdualag’s Launch Save Its Market Position? – Key Drivers

By Baptista Research

  • Bristol-Myers Squibb’s results were a major disappointment as the company failed to meet the revenue expectations as well as the earnings expectations of Wall Street.
  • The second quarter’s total company sales were boosted by the sustained strength of its in-line and new product portfolio.
  • Several of their major products throughout the portfolio, including Reblozyl, their cell treatments Breyanzi and Abecma, as well as Camzyos and Zeposia, were responsible for this impressive result.

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Daily Brief Financials: Japan Post Bank, IDFC First Bank Limited, National Australia Bank, S&P 500 INDEX, S&U PLC, Tether, Goldman Sachs Group, Essential Properties Realty and more

By | Daily Briefs, Financials

In today’s briefing:

  • Japan Post Bank (7182) – The October TOPIX FFW Adjustment
  • IDFC First Bank – Mkt Cap Up Big, Can Gain More Interest, With Improved Fundamentals & Amalgamation
  • NAB – Pillar 3 Data Shows Worst PD Buckets Highest Growth, Best Buckets Down, Risk To Credit Costs
  • EQD | SPX MONTHLY Proxy Supports for APAC Markets
  • S&U – Softer volumes but solid EBITDA growth expected
  • Curve 3pool Sees $175m Outflows
  • GS – 2 Quarters Of Falling Net Int Inc, Fees Topping Out, Very High Costs, Credit Metrics Worsening
  • Essential Properties: Rising Cash-On-Cash Returns, But Beware Of Emerging Risks


Japan Post Bank (7182) – The October TOPIX FFW Adjustment

By Travis Lundy

  • Japan Post Bank (7182 JP) was effectively re-IPOed in March when Japan Post Holdings (6178 JP) offered more than a BILLION shares against the 400mm shares then in float. 
  • It was a huge offering. A huge increase in float. Lots of immediate liquidity. A PERFECT opportunity for the TSE to do an ad hoc FFW change. But they didn’t. 
  • Then in June they lowered the FFW (on a technicality). That leaves a big upweight in October. In this insight we measure the opportunity.

IDFC First Bank – Mkt Cap Up Big, Can Gain More Interest, With Improved Fundamentals & Amalgamation

By Daniel Tabbush

  • IDFC First Bank is now at USD7bn market cap, and it will now be seen by more than before
  • Net interest income rising from INR27.5bn to INR37.5bn is amongst best in India banking
  • Credit metrics improving dramatically, but credit costs have yet to trail lower – to come

NAB – Pillar 3 Data Shows Worst PD Buckets Highest Growth, Best Buckets Down, Risk To Credit Costs

By Daniel Tabbush

  • We turn to granular Pillar 3 disclosure of NAB seeing divergent moves in PD buckets
  • Its worst PD buckets are seeing sharp rise, while best buckets are falling, flat-ish
  • LT credit cost data, PD buckets, timely CBA data, suggests higher provision costs

EQD | SPX MONTHLY Proxy Supports for APAC Markets

By Nico Rosti

  • The 2023 multi-month rally in APAC markets started roughly in autumn 2022, in sync with the US market rally, then stalled when the US market began to pull back.
  • We propose an analysis of the S&P500 MONTHLY, to find support levels to be used as a proxy for predicting APAC bloc’s markets supports.
  • Main forecast: August/September could be down, but the current MRM pattern reading is bullish – the correction (currently at Q2 supports) should not last beyond end of September.

S&U – Softer volumes but solid EBITDA growth expected

By Edison Investment Research

S&U held a cautious approach to new lending in H124, emphasising higher-quality customers and avoiding competition directly on price. Consequently, net receivables were 5% below our expectations in H124. Encouragingly, S&U has experienced a rise in transactions and new customer pipeline in the past two months in the Advantage motor business, but weakening consumer confidence, higher interest rates and paydowns are likely to curtail the usual rate of growth in Aspen for FY24. Despite this, impairments and arrears are below budget, which should provide some resilience to the net interest margin. We have marginally lowered our estimates for FY24 and FY25 but still expect EBITDA growth of 16% and 15%, respectively.


Curve 3pool Sees $175m Outflows

By Kaiko

  • The Curve 3pool – long one of the most important sources of liquidity for DAI, USDC, and USDT – has continued to bleed this summer, shrinking by $175mn.
  • This outflow has been primarily led by USDC; users have withdrawn $125mn of Circle’s stablecoin.
  • By this metric, USDT has remained roughly even while $60mn DAI has been removed, $25mn of which came in just three transactions on July 31.

GS – 2 Quarters Of Falling Net Int Inc, Fees Topping Out, Very High Costs, Credit Metrics Worsening

By Daniel Tabbush

  • Quarterly figures are poor, with net interest income growth negative, again
  • Fees appear to be topping out, with operating costs at very high levels
  • 7 August letter from Senator Warren: congressional scrutiny on SVB

Essential Properties: Rising Cash-On-Cash Returns, But Beware Of Emerging Risks

By Pearl Gray Equity and Research

  • Essential Properties Realty Trust, Inc. has held up well compared to other REITs this year, suggesting it has unique strengths.
  • The REIT’s cash-on-cash returns have increased, indicating a high rental yield relative to purchase price, but valuation risks remain, according to the REIT.
  • Essential Properties Realty Trust, Inc. (NYSE:EPRT), unlike many other real estate investment trusts, or REITs, has held up quite well this year, suggesting it possesses significant idiosyncratic strengths.

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Daily Brief Industrials: Japan Post Holdings, Honeywell International, HNI Corp, Carrier Global , Norfolk Southern, Northrop Grumman, Textron Inc and more

By | Daily Briefs, Industrials

In today’s briefing:

  • Japan Post Holdings (6178) Starts Its Bigly Buyback With a Sale from the MOF-Boffins
  • Honeywell International Inc.: Can The SCADAfence Acquisition Strengthen Its Portfolio? – Key Drivers
  • HNI Corporation – Revising Estimate to Correct Modeling Error(S)
  • Carrier Global Corporation: 4 Major Catalysts Of Their Growth! – Financial Forecasts
  • Norfolk Southern Corporation: The Strategy That Keeps Them Confident! – Key Drivers
  • Northrop Grumman Corporation: 4 Factors Powering Their Revenue Surge! – Key Drivers
  • Textron Inc.: Unmasking the Strategic Advancements Behind the Rising Aviation & Industrial Revenues! – Key Drivers


Japan Post Holdings (6178) Starts Its Bigly Buyback With a Sale from the MOF-Boffins

By Travis Lundy


Honeywell International Inc.: Can The SCADAfence Acquisition Strengthen Its Portfolio? – Key Drivers

By Baptista Research

  • Honeywell International delivered a mixed set of results for the quarter, with revenues well below Wall Street expectations but managed an earnings beat.
  • The company’s organic sales increased year on year in the quarter, led by double-digit growth in commercial aerospace, process solutions, and UOP.
  • We give Honeywell International a ‘Hold’ rating with a revised target price.

HNI Corporation – Revising Estimate to Correct Modeling Error(S)

By Water Tower Research

  • We are revising our recent estimates for HNI to correct a significant error in our understanding of guidance for the contribution to revenue and earnings from the Kimball International (KII) acquisition.

  • We misunderstood the guidance for 2H revenue for KII to be in the range of $340-370 million.

  • That number applies to the full-year contribution, including $52 million already reported. 


Carrier Global Corporation: 4 Major Catalysts Of Their Growth! – Financial Forecasts

By Baptista Research

  • Carrier Global managed to surpass the revenue as well as the earnings expectations of analysts.
  • Carrier Global achieved double-digit growth in light commercial and commercial HVAC and worldwide truck and trailer controls and aftermarkets.
  • Growth in Fire & Security was broad-based, encompassing security, residential, commercial, and industrial fire.

Norfolk Southern Corporation: The Strategy That Keeps Them Confident! – Key Drivers

By Baptista Research

  • Norfolk Southern delivered a disappointing set of results as the company was unable to meet the revenue and earnings expectations of Wall Street.
  • Materials, Automotive shipping was strong owing to new lane offerings and a weak local crop in the Southeast.
  • Despite increased export volumes, the mix of export steam and export metallurgical coal shifted negatively, and lower seaborne coal prices resulted in poorer revenue per unit.

Northrop Grumman Corporation: 4 Factors Powering Their Revenue Surge! – Key Drivers

By Baptista Research

  • Northrop Grumman managed to exceed analyst expectations in terms of revenue as well as earnings.
  • The company’s revenues increased in the second quarter, with each of its 4 business sectors making significant contributions.
  • Global demand for their products is also increasing as their allies increase defense spending to combat emerging threats.

Textron Inc.: Unmasking the Strategic Advancements Behind the Rising Aviation & Industrial Revenues! – Key Drivers

By Baptista Research

  • Textron delivered a positive result and managed an all-around beat in the last quarter.
  • In Aviation, Textron delivered jets down from last year and commercial turboprops up from the last year.
  • Also, this quarter Aviation delivered the foremost passenger-configured Cessna SkyCourier to Lana’I Air for the Hawaiian interisland routes.

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Daily Brief Consumer: Brilliance China Automotive, Tokyo Stock Exchange Tokyo Price Index Topix, Procter & Gamble Co, Mondelez International, Ford Motor Co, Serve Robotics, Cocoa Futures and more

By | Consumer, Daily Briefs

In today’s briefing:

  • Brilliance China (1114 HK): Driving Back Into Passive Portfolios
  • Now Is the Time to Seek Ingenuity in Cash Allocation, Not Lament the Decline in Equity Financing
  • Procter & Gamble: The Driving Force Behind their Amazing Organic Sales! – Key Drivers
  • Mondelez International Inc.: Why They Are Called the Titans of the Snack World! – Key Drivers
  • Ford Motor Company: Does It Have Any Kind Of Competitive Edge In This EV Wave? – Key Drivers
  • Serve It Up
  • Cocoa Market Started Collapsing // Soybean Spreads crash down


Brilliance China (1114 HK): Driving Back Into Passive Portfolios

By Brian Freitas

  • Brilliance China Automotive (1114 HK) was deleted from local and global indices following its prolonged trading suspension from April 2021 to September 2022.
  • Following the resumption of trading, Brilliance China Automotive (1114 HK) was added to the HSCI in March and subsequently to Southbound Stock Connect.
  • The stock should be bought by global passive trackers over the next few months and there should be substantial passive inflows.

Now Is the Time to Seek Ingenuity in Cash Allocation, Not Lament the Decline in Equity Financing

By Aki Matsumoto

  • Companies enjoy the benefits of going public, as a larger market capitalization expands their financing and makes it easier to acquire other companies, without capital raising through equity issuance.
  • In a market economy, cash returned to shareholders through share buybacks etc is rationally allocated by investing it in companies that need more funds or are worthy of investment.
  • Companies should successfully communicate their strategies for expanding corporate value and how to use cash to do so. More such companies will lead to the expansion of Tokyo market.

Procter & Gamble: The Driving Force Behind their Amazing Organic Sales! – Key Drivers

By Baptista Research

  • Procter & Gamble surpassed the revenue and earnings expectations of Wall Street.
  • Growth was widespread across the company’s segments, with organic sales increasing in all ten product categories.
  • Fabric Care, Home Care, and Hair Care increased by high single digits, while Skin and Personal Care, Baby Care, Family Care, and Grooming increased by mid-singles.

Mondelez International Inc.: Why They Are Called the Titans of the Snack World! – Key Drivers

By Baptista Research

  • Mondelez International managed to surpass the revenue expectations as well as the earnings expectations of Wall Street.
  • The company managed double-digit organic net revenue growth across each area, good pricing execution, decent profit dollar growth, and carried out considerable brand investments.
  • We give Mondelez International a ‘Hold’ rating with a revised target price.

Ford Motor Company: Does It Have Any Kind Of Competitive Edge In This EV Wave? – Key Drivers

By Baptista Research

  • Ford Motor delivered an all-around beat in the previous quarter.
  • With over $47 billion in liquidity at the end of the quarter, Ford Motor has sufficient funds for future investments.
  • We give Ford Motor Company a ‘Hold’ rating with a revised target price.

Serve It Up

By subSPAC

  • The delivery market is booming, set to hit a whopping $1 trillion by 2030. And right in the middle of this rush is Serve Robotics.
  • Fresh from a new deal with Uber Eats, Serve Robotics has made headlines, revealing plans to go public via a SPAC merger.
  • The company’s big plan is to shake up the delivery game by blending AI, robotics, and autonomy

Cocoa Market Started Collapsing // Soybean Spreads crash down

By The Commodity Report

  • Cocoa Market Started Collapsing Run-ups in commodity markets tend to be slow but steady but meltdowns on the other hand fast and sharp – a bit comparable with equity markets but definitely more volatile.
  • Especially Parabolic advances, like the one in cocoa futures, often end with a sweeping reversal.
  • Fortunately, the soybean complex is one we covered intensively during this year.

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Daily Brief Australia: BrainChip Holdings, National Australia Bank, Respiri Ltd and more

By | Australia, Daily Briefs

In today’s briefing:

  • [Update] Tax-Loss Selling In Australia – Closing the Circle on the Rebound Trade
  • NAB – Pillar 3 Data Shows Worst PD Buckets Highest Growth, Best Buckets Down, Risk To Credit Costs
  • Respiri – Raise anticipated to fund the Access acquisition


[Update] Tax-Loss Selling In Australia – Closing the Circle on the Rebound Trade

By Travis Lundy

  • Originally, this was an analysis of tax-loss selling baskets over the years, and seasonal performance of baskets of stocks with certain attributes. On average, they fell vs index.
  • Of course, on average, they also rose vs index after the selling was done.
  • This insight puts a cap on the 2023 edition with results across the four baskets. The sell made 4.2% vs ASX200 in May, then is up

NAB – Pillar 3 Data Shows Worst PD Buckets Highest Growth, Best Buckets Down, Risk To Credit Costs

By Daniel Tabbush

  • We turn to granular Pillar 3 disclosure of NAB seeing divergent moves in PD buckets
  • Its worst PD buckets are seeing sharp rise, while best buckets are falling, flat-ish
  • LT credit cost data, PD buckets, timely CBA data, suggests higher provision costs

Respiri – Raise anticipated to fund the Access acquisition

By Edison Investment Research

Following the proposed acquisition of Access Managed Services in May 2023, Respiri announced that it has raised the A$3m as planned as part of the share purchase plan (SPP), which we believe are the funds needed to close the acquisition (10 August scheduled closing date). The company has raised a total of A$4.35m (including a convertible note with Obsidian Global) to cover the upfront payment (US$1.25m) for the acquisition, working capital to accelerate US commercialisation and the US$0.25m acquisition purchase consideration due three months post-close. Also, in Q423 (ending June 2023), Respiri signed three new remote patient monitoring (RPM) agreements, increasing the total contracted healthcare customers to 13 (across eight US states), while also bolstering its sales pipeline. The acquisition of the Access platform is a key component of management’s commercialization strategy and we anticipate Respiri to be on track to reach break-even in mid-CY24.


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Daily Brief Singapore: Sea , Genting Singapore and more

By | Daily Briefs, Singapore

In today’s briefing:

  • Sea Ltd 2Q23: Revenue Should Align with Consensus, Profitability a Puzzle
  • Fortress Minerals’ CEO Ivan Chee raises his stake


Sea Ltd 2Q23: Revenue Should Align with Consensus, Profitability a Puzzle

By Oshadhi Kumarasiri

  • We remain bearish on Sea (SE US) leading upto Q2 results on 15th August 2023.
  • Our analysis suggests Sea Ltd could hit around $3.25bn revenue in 2Q23, in line with consensus. However, profitability could fall short of consensus expectations.
  • Nonetheless, any downside stemming from a minor earnings shortfall could be rather limited given the existing low consensus and the lackluster price performance leading up to the Q2 earnings announcement.

Fortress Minerals’ CEO Ivan Chee raises his stake

By Geoff Howie

  • Share buybacks by primary listed companies 4 – 10 Aug 2023 Institutions were net buyers of Singapore stocks over the four trading sessions through to Aug 10, with S$136 million of net institutional inflow, with eight primary-listed companies conducting buybacks with a total consideration of S$7.7 million.
  • The previous mandate saw the company buy back 14,250,100 of its shares which represented 2.12 per cent of its total number of issued shares (excluding treasury shares).

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Daily Brief South Korea: Sindoh Co Ltd, Samsung SDI and more

By | Daily Briefs, South Korea

In today’s briefing:

  • Korea Small Cap Gem #24: Sindoh Co [Net Cash More than 220% of Market Cap]
  • Samsung SDI (006400KS): Controversy on Battery Fire Impacting Reputation and Financial Performance


Korea Small Cap Gem #24: Sindoh Co [Net Cash More than 220% of Market Cap]

By Douglas Kim

  • Sindoh Co Ltd (029530 KS) is the 24th company in our Korea Small Cap Gems series. 
  • Sindoh has one of the highest net cash/market cap ratios in the entire Korean stock market. Net cash at end of 1Q 2023 was 226% of its market cap. 
  • Sindoh’s operations turned around in 1Q 2023. It had sales of 105.5 billion won (up 26.6% YoY) and operating profit of 9.8 billion won (turned black) in 1Q 2023.

Samsung SDI (006400KS): Controversy on Battery Fire Impacting Reputation and Financial Performance

By Heejeong (Hollie) Park

  • Samsung SDI is currently facing legal challenges in the United States stemming from a scooter fire during charging and a separate incident involving a lithium-ion battery fire. 
  • These incidents are part of a series of recurring battery fire controversies involving Samsung SDI dating back to 2016. 
  • Notably, the ESG (Environmental, Social, and Governance) risk level for Samsung SDI has been assessed as ‘High,’ supported by an ESG risk score of 2.7.

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Daily Brief United States: S&P 500 INDEX, Honeywell International, Ford Motor Co, Mondelez International, Procter & Gamble Co, HNI Corp, KLA-Tencor Corp, Norfolk Southern, Northrop Grumman, OpGen and more

By | Daily Briefs, United States

In today’s briefing:

  • EQD | SPX MONTHLY Proxy Supports for APAC Markets
  • Honeywell International Inc.: Can The SCADAfence Acquisition Strengthen Its Portfolio? – Key Drivers
  • Ford Motor Company: Does It Have Any Kind Of Competitive Edge In This EV Wave? – Key Drivers
  • Mondelez International Inc.: Why They Are Called the Titans of the Snack World! – Key Drivers
  • Procter & Gamble: The Driving Force Behind their Amazing Organic Sales! – Key Drivers
  • HNI Corporation – Revising Estimate to Correct Modeling Error(S)
  • KLA Corporation: Tech Transitions Powering Their Value! – Major Drivers
  • Norfolk Southern Corporation: The Strategy That Keeps Them Confident! – Key Drivers
  • Northrop Grumman Corporation: 4 Factors Powering Their Revenue Surge! – Key Drivers
  • OpGen – Cash concerns dampen active Q2


EQD | SPX MONTHLY Proxy Supports for APAC Markets

By Nico Rosti

  • The 2023 multi-month rally in APAC markets started roughly in autumn 2022, in sync with the US market rally, then stalled when the US market began to pull back.
  • We propose an analysis of the S&P500 MONTHLY, to find support levels to be used as a proxy for predicting APAC bloc’s markets supports.
  • Main forecast: August/September could be down, but the current MRM pattern reading is bullish – the correction (currently at Q2 supports) should not last beyond end of September.

Honeywell International Inc.: Can The SCADAfence Acquisition Strengthen Its Portfolio? – Key Drivers

By Baptista Research

  • Honeywell International delivered a mixed set of results for the quarter, with revenues well below Wall Street expectations but managed an earnings beat.
  • The company’s organic sales increased year on year in the quarter, led by double-digit growth in commercial aerospace, process solutions, and UOP.
  • We give Honeywell International a ‘Hold’ rating with a revised target price.

Ford Motor Company: Does It Have Any Kind Of Competitive Edge In This EV Wave? – Key Drivers

By Baptista Research

  • Ford Motor delivered an all-around beat in the previous quarter.
  • With over $47 billion in liquidity at the end of the quarter, Ford Motor has sufficient funds for future investments.
  • We give Ford Motor Company a ‘Hold’ rating with a revised target price.

Mondelez International Inc.: Why They Are Called the Titans of the Snack World! – Key Drivers

By Baptista Research

  • Mondelez International managed to surpass the revenue expectations as well as the earnings expectations of Wall Street.
  • The company managed double-digit organic net revenue growth across each area, good pricing execution, decent profit dollar growth, and carried out considerable brand investments.
  • We give Mondelez International a ‘Hold’ rating with a revised target price.

Procter & Gamble: The Driving Force Behind their Amazing Organic Sales! – Key Drivers

By Baptista Research

  • Procter & Gamble surpassed the revenue and earnings expectations of Wall Street.
  • Growth was widespread across the company’s segments, with organic sales increasing in all ten product categories.
  • Fabric Care, Home Care, and Hair Care increased by high single digits, while Skin and Personal Care, Baby Care, Family Care, and Grooming increased by mid-singles.

HNI Corporation – Revising Estimate to Correct Modeling Error(S)

By Water Tower Research

  • We are revising our recent estimates for HNI to correct a significant error in our understanding of guidance for the contribution to revenue and earnings from the Kimball International (KII) acquisition.

  • We misunderstood the guidance for 2H revenue for KII to be in the range of $340-370 million.

  • That number applies to the full-year contribution, including $52 million already reported. 


KLA Corporation: Tech Transitions Powering Their Value! – Major Drivers

By Baptista Research

  • KLA Corporation delivered a positive result and managed an all-around beat in the last quarter.
  • KLA demonstrated consistent execution amid a competitive market by delivering results at the upper end of the guidance and commitment range.
  • We give KLA Corporation a ‘Hold rating with a revised target price.

Norfolk Southern Corporation: The Strategy That Keeps Them Confident! – Key Drivers

By Baptista Research

  • Norfolk Southern delivered a disappointing set of results as the company was unable to meet the revenue and earnings expectations of Wall Street.
  • Materials, Automotive shipping was strong owing to new lane offerings and a weak local crop in the Southeast.
  • Despite increased export volumes, the mix of export steam and export metallurgical coal shifted negatively, and lower seaborne coal prices resulted in poorer revenue per unit.

Northrop Grumman Corporation: 4 Factors Powering Their Revenue Surge! – Key Drivers

By Baptista Research

  • Northrop Grumman managed to exceed analyst expectations in terms of revenue as well as earnings.
  • The company’s revenues increased in the second quarter, with each of its 4 business sectors making significant contributions.
  • Global demand for their products is also increasing as their allies increase defense spending to combat emerging threats.

OpGen – Cash concerns dampen active Q2

By Edison Investment Research

Despite the active second quarter with developments across all operational fronts, OpGen’s cash concerns have increased the risk of the company as a going concern. With a cash balance of $3.2m at end Q223, OpGen has a cash runway into September 2023, meaning the need for immediate financing will be critical. Key quarterly highlights included the extension of the FIND R&D collaboration, a non-exclusive distribution agreement with Fisher Healthcare and new commercial contracts for both Unyvero and ARES services. While topline growth was a little subdued year-on-year due to one-off income in Q222, the operating loss for the period slightly improved to $5.2m (vs $5.3m in Q222), reflecting tighter cost controls and low clinical activity. If management is able to bridge the funding gap, its efforts in building the commercial groundwork could benefit the second half of the year across Unyvero, Acuitas and ARES. Due to the funding announcement, we have put our estimates and valuation on hold and will reassess as financing updates become available.


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Daily Brief China: Brilliance China Automotive, ImmuneOnco Biopharmaceuticals (Shanghai), Lenovo, AAC Technologies Holdings, Semiconductor Manufacturing International Corp (SMIC) and more

By | China, Daily Briefs

In today’s briefing:

  • Brilliance China (1114 HK): Driving Back Into Passive Portfolios
  • Pre-IPO ImmuneOnco Biopharmaceuticals (PHIP Updates) – Slow Development Progress and Gloomy Outlook
  • Lenovo – Tear Sheet – Lucror Analytics
  • Morning Views Asia: AAC Technologies Holdings, Sino-Ocean Service
  • [SMIC (981 HK, BUY, TP HK$24) TP Change]: Margins Will Decline on No-Profit 8” Wafers Orders


Brilliance China (1114 HK): Driving Back Into Passive Portfolios

By Brian Freitas

  • Brilliance China Automotive (1114 HK) was deleted from local and global indices following its prolonged trading suspension from April 2021 to September 2022.
  • Following the resumption of trading, Brilliance China Automotive (1114 HK) was added to the HSCI in March and subsequently to Southbound Stock Connect.
  • The stock should be bought by global passive trackers over the next few months and there should be substantial passive inflows.

Pre-IPO ImmuneOnco Biopharmaceuticals (PHIP Updates) – Slow Development Progress and Gloomy Outlook

By Xinyao (Criss) Wang

  • ImmuneOnco’s execution/R&D efficiency is far from satisfactory. After about seven years since the establishment in 2015, there are no candidates entering phase III trials or close to market launch.
  • The biggest concerns are druggability and safety profile of CD47-targeted candidates. There could be potential R&D failure risks. The pipeline layout around CD47 also makes it hard to diversify risks.
  • It’s challenging for ImmuneOnco Biopharmaceuticals (Shanghai) (IOB HK) to hit high-quality license-out deals with reputable big pharma, leading to uncertainties on internationalization. We’re conservative about the outlook. 

Lenovo – Tear Sheet – Lucror Analytics

By Trung Nguyen

We view Lenovo as “Low Risk” on the LARA scale, mainly due to the business’ large size, track record and strong balance sheet. Lenovo is the world’s largest PC maker, with the PC segment being the company’s key profit centre. The Mobile segment has been scaled back to certain markets, and has turned profitable. The Data Centre/Server business is promising and has grown impressively, albeit still suffering losses.

Negatively, all three of the company’s market segments are becoming commoditised. The PC markets, having previously experienced a structural decline due to changes in user behaviour as well as substitutes (smartphones and tablets), has enjoyed strong demand as more people have been working from home amid the pandemic.

Our Credit Bias on Lenovo remains “Stable”, as the growth outlook is subdued due to weak post-COVID-19 PC demand. We do not expect the credit to improve further. That said, the strong balance sheet, sound liquidity and solid working-capital management would cushion Lenovo from the PC segment’s inventory adjustment period.

Controversies are “Immaterial” and the ESG Impact on Credit is “Moderately Positive”. ESG-compliant funds may find Lenovo attractive due to its strong ESG. The company has done very well in terms of environmental factors, with a strong management team as well as a long and positive track record. Lenovo is mainly exposed to geopolitical risk, albeit it has managed this very well amid the US-China trade war.


Morning Views Asia: AAC Technologies Holdings, Sino-Ocean Service

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.


[SMIC (981 HK, BUY, TP HK$24) TP Change]: Margins Will Decline on No-Profit 8” Wafers Orders

By Shawn Yang

  • SMIC reported C2Q23 top-line, EBIT, and non-IFRS net profit in-line, (10%), and (20%) vs. our est., and in-line, (35%), and (8%) vs. cons., respectively.
  • SMIC guided 3Q revenues up 3-5% QoQ, but gross profit flattish QoQ. This suggests SMIC is shipping 8” wafers with low, or negative profit per wafer.
  • We maintain BUY on Huawei exposure but cut our TP to HK$ 24 to reflect the low profitability of 8” wafer orders that could persist given weak demand.

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