Category

Daily Briefs

Dec 18
0

Daily Brief Health Care: Shanghai Junshi Biosciences , Shenzhen Mindray Bio-Medical Electronics, TSE Tokyo Price Index TOPIX, WuXi AppTec and more

By | Daily Briefs, Healthcare

In today’s briefing:

  • A/H Premium Tracker (To 15 Dec 23): Time To Go Long Hs Vs As.
  • Mainland Connect NORTHBOUND Flows (To 15 Dec 23): Mindray Consistently Bought, Midea Sold
  • Determining the Cause of the Sluggish ROE Growth Is More Important for Future ROE Increases
  • WuXi AppTec (2359.HK/603259.CH) – How Bad Things Could Be?

A/H Premium Tracker (To 15 Dec 23): Time To Go Long Hs Vs As.

By Travis Lundy

  • The New and Better (5mos old) 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 were both sells, respectively, but liquid Hs with H/A pairs OUT-perform As on average by 100+bp. Liquidation by overseas investors feels finished. 
  • Time to go long Hs vs As for the new year at 52wk wide discounts. 3 Short H/A pairs now switched to long. 3 new pairs long this week. 

Mainland Connect NORTHBOUND Flows (To 15 Dec 23): Mindray Consistently Bought, Midea Sold

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 to play with.
  • Last week saw NORTHBOUND net sell RMB 18.6bn of A-shares on slightly lighter activity. Friday saw large NORTHBOUND net buys early in the day but ended a net sell.
  • Looking at the change in the weekly position charts over the last year is striking (easiest in the Sectors table to start). Still. 

Determining the Cause of the Sluggish ROE Growth Is More Important for Future ROE Increases

By Aki Matsumoto

  • TSE data (April 2022-October 2023) shows that the correlation between TOPIX and ROE for prime market listed companies is extremely low, while the correlation between TOPIX and BPS is high.
  • It may be that a company that can sustainably increase cash flow and build up net assets is more trustworthy than a temporary increase in profits.
  • It’s presumed that the company increased EPS to the extent that it did not reduce ROE and implemented a certain degree of shareholder return to slow the increase in BPS.

WuXi AppTec (2359.HK/603259.CH) – How Bad Things Could Be?

By Xinyao (Criss) Wang

  • Recent business updates of WuXi Bio led to a decline in WuXi AppTec’s share price and changed investors’ expectations for CXO. Now is the time to adjust forecasts.
  • We analyzed the growth rate of various business of WuXi AppTec in 2024. In a neutral scenario, growth next year could fall short of management’s guidance.Reversal in 2025 is uncertain.
  • If WuXi AppTec “unexpectedly” receives blockbuster orders, which are large enough to hedge against the downward trend of WuXi AppTec’s other businesses, then it will help to change performance expectations.

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

Sign Up for Free

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
Sign Up for Free


Dec 18
0

Daily Brief Industrials: Walsin Lihwa, Octillion Energy Holdings, JSW Infrastructure and more

By | Daily Briefs, Industrials

In today’s briefing:

  • Yuanta/​P-Shares Taiwan Div+ ETF: Day 1 Flows & Stock Moves
  • Octillion Energy Holdings Pre-IPO Tearsheet
  • Morning Views Asia: JSW Infrastructure, Lippo Malls Indonesia Retail Trust, SK Hynix

Yuanta/​P-Shares Taiwan Div+ ETF: Day 1 Flows & Stock Moves

By Brian Freitas

  • The Yuanta/P-shares Dividend Plus ETF (0056 TT) started to rebalance its holdings on Friday and will continue to do so for the next 4 trading days.
  • Stocks with buy flows dropped 0.51% on average on Friday while the stocks with sell flows dropped 0.92%. On a flow weighted basis, the numbers were -0.21% vs -0.75%.
  • Since the start of November, the adds have outperformed the deletes and the TWSE INDEX. There has been significant outperformance in just the last week.

Octillion Energy Holdings Pre-IPO Tearsheet

By Clarence Chu

  • Octillion Energy Holdings (OE HK) is looking to raise US$400m in its upcoming Hong Kong IPO.
  • Octillion Energy Holdings (OE) primarily designs, manufactures and markets tailor-made battery systems for electric vehicles (EVs), and to a lesser extent, electric storage systems (ESS) and battery management systems (BMS).
  • As per F&S, OE had a 9.6% market share and was ranked the third largest EV battery system provider for passenger battery EVs (BEVs) in China by FY22 shipment units.

Morning Views Asia: JSW Infrastructure, Lippo Malls Indonesia Retail Trust, SK Hynix

By Charles Macgregor

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

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

Sign Up for Free

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
Sign Up for Free


Dec 18
0

Daily Brief Energy/Materials: Adbri and more

By | Daily Briefs, Energy & Materials Sector

In today’s briefing:

  • Adbri (ABC AU) Warms To CRH/Barro’s Offer

Adbri (ABC AU) Warms To CRH/Barro’s Offer

By David Blennerhassett

  • Construction play Adbri (ABC AU) has entered into a process and exclusivity deed with CRH (CRH US) and 42.7%-shareholder Raymond Barro (Chairman) in order to progress to a firm transaction.
  • CRH/Barro’s non-binding indicative proposal of $3.20/share (in cash), by way of a Scheme, is a 41% premium to last close. The proposal is best & final. 
  • Subject to DD being carried out by CRH, this looks done. 

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

Sign Up for Free

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
Sign Up for Free


Dec 18
0

Daily Brief Industrials: Walsin Lihwa, Octillion Energy Holdings, JSW Infrastructure and more

By | Daily Briefs, Industrials

In today’s briefing:

  • Yuanta/​P-Shares Taiwan Div+ ETF: Day 1 Flows & Stock Moves
  • Octillion Energy Holdings Pre-IPO Tearsheet
  • Morning Views Asia: JSW Infrastructure, Lippo Malls Indonesia Retail Trust, SK Hynix

Yuanta/​P-Shares Taiwan Div+ ETF: Day 1 Flows & Stock Moves

By Brian Freitas

  • The Yuanta/P-shares Dividend Plus ETF (0056 TT) started to rebalance its holdings on Friday and will continue to do so for the next 4 trading days.
  • Stocks with buy flows dropped 0.51% on average on Friday while the stocks with sell flows dropped 0.92%. On a flow weighted basis, the numbers were -0.21% vs -0.75%.
  • Since the start of November, the adds have outperformed the deletes and the TWSE INDEX. There has been significant outperformance in just the last week.

Octillion Energy Holdings Pre-IPO Tearsheet

By Clarence Chu

  • Octillion Energy Holdings (OE HK) is looking to raise US$400m in its upcoming Hong Kong IPO.
  • Octillion Energy Holdings (OE) primarily designs, manufactures and markets tailor-made battery systems for electric vehicles (EVs), and to a lesser extent, electric storage systems (ESS) and battery management systems (BMS).
  • As per F&S, OE had a 9.6% market share and was ranked the third largest EV battery system provider for passenger battery EVs (BEVs) in China by FY22 shipment units.

Morning Views Asia: JSW Infrastructure, Lippo Malls Indonesia Retail Trust, SK Hynix

By Charles Macgregor

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

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

Sign Up for Free

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
Sign Up for Free


Dec 18
0

Daily Brief Financials: Tomony Holdings, LIC Housing Finance, S&P/ASX 200 and more

By | Daily Briefs, Financials

In today’s briefing:

  • Tomony Holdings (8600 JP) – Regional Bank NEW SHARE Issue – Not What You Want To See, But Buy Anyway
  • LICHF: H2FY24 Guided to Be Strong
  • EQD | S&P/ASX200 Pullback This Week: Where to Re-Enter LONG?

Tomony Holdings (8600 JP) – Regional Bank NEW SHARE Issue – Not What You Want To See, But Buy Anyway

By Travis Lundy

  • On 5 December, Tomony Holdings (8600 JP) – a holding company for two regional banks based in Tokushima Prefecture and Kagawa Prefecture – announced (gasp!) a NEW SHARE OFFERING. 
  • It offered 28mm shares + 4.2mm greenshoe – a share count increase of 20%. At 0.27x book. This IS unusual. Especially when banks are being asked to produce better ROC. 
  • The deal priced at ¥366. We’re there now. Banks have been sold. It is worth looking at where we are and what could happen next. It’s cheap.

LICHF: H2FY24 Guided to Be Strong

By Ankit Agrawal, CFA

  • LICHF reported a decent Q2FY24 led by a strong NIM (3.04%). Growth has been somewhat subdued due to technical issues, however, these have been resolved and October is tracking well.
  • LICHF reiterated its full-year FY24 NIM guidance at 2.6-2.8%. Credit cost, except for one-off item of INR 104cr in Q2FY24, continues to be below 50bp annualized.
  • Despite a subdued H1FY24, LICHF has maintained its FY24 AUM growth guidance to 10%+. This implies that LICHF can grow AUM at 5%+ QoQ over the next two quarters.

EQD | S&P/ASX200 Pullback This Week: Where to Re-Enter LONG?

By Nico Rosti

  • The S&P/ASX 200 INDEX is currently up 3 weeks and OVERBOUGHT, a correction is expected very soon, probably this week.
  • The pullback is an opportunity to add LONG positions, the area to enter LONG is 7400-7300.
  • If the rally continues after the pullback, it can continue into the end of January.

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

Sign Up for Free

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
Sign Up for Free


Dec 18
0

Daily Brief Consumer: Meituan, Hankook & Company, Great Wall Motor, SHEIN, Water Oasis, Haier Smart Home , REPT BATTERO Energy, Volkswagen (Pref) and more

By | Consumer, Daily Briefs

In today’s briefing:

  • 2024 High Conviction Idea: More Downside for Meituan
  • Hankook & Company (000240 KS): MBK Raises Partial Offer to KRW24,000
  • HK Connect SOUTHBOUND Flows (To 15Dec23); CNOOC/Telecom/Mobile All Now To The Buy Side, Tencent NOT
  • Hankook & Co Tender: Clues to Gauge Cancellation Risk Obtained Through Local Channels So Far
  • Could US Lawmakers Actually Stop SHEIN’s US IPO? No, But They Sure Could Make Things Difficult
  • Water Oasis ( 1161 HK ) FY23 Results: Resilient Set Up For a >10% Yield in FY24
  • Haier Smart Home (6690 HK): Further Expansion of Footprint
  • REPT BATTERO Energy IPO Trading – Needs to Correct by 20-30%, at Least
  • Liquid Universe of European Ordinary and Preferred Shares: December‘23 Report

2024 High Conviction Idea: More Downside for Meituan

By Eric Chen

  • We don’t consider Douyin an existential threat to Meituan, but we see the company’s growth increasingly be constrained by its business model itself.
  • We believe Meituan will disappoint the market with regard to its bottom line growth in 2024, barring major overhaul of its new initiative businesses.
  • Meituan will have to make tough choice between growth and profitability and either scenario won’t bode well for its valuation. We value the company at RMB410 billion, meaning 18% downside.

Hankook & Company (000240 KS): MBK Raises Partial Offer to KRW24,000

By Arun George

  • MBK Partners has increased its Hankook & Company (000240 KS) partial tender offer to KRW24,000 per share, 20.0% and 51.4% above its previous offer and the last close, respectively.
  • While the offer is attractive, we estimate that the minimum acceptance condition of 19.3 million shares (20.35% of outstanding shares) requires an 84.3% minority acceptance rate. 
  • The minority acceptance rate is challenging unless MBK can secure a ruling preventing share purchases from Cho Yang-rai, who disclosed a 2.72% stake on 14 December and opposes the tender. 

HK Connect SOUTHBOUND Flows (To 15Dec23); CNOOC/Telecom/Mobile All Now To The Buy Side, Tencent NOT

By Travis Lundy

  • SOUTHBOUND flows showing reversion tendencies continues for a fourth week. Hs rebound vs their As on the week – especially the liquid ones.
  • SOUTHBOUND saw HK$9.9bn of OUTflows on the week to 15 Dec, ALL of which was net sales of Tracker Fund of Hong Kong (2800 HK) and Tencent (700 HK). 
  • High-Div SOEs again saw action. This time with both CNOOC Ltd (883 HK) and China Telecom (728 HK) seeing net buying as a percentage of volume. 

Hankook & Co Tender: Clues to Gauge Cancellation Risk Obtained Through Local Channels So Far

By Sanghyun Park

  • Critical now is estimating MBK’s achievable volume in the tender offer, a key indicator for assessing cancellation risk. Evidence suggests few allies for Cho Hyun-beom, prompting MBK’s strategic persistence.
  • MBK can secure 23.58%, but NPS’s involvement is pivotal. If neutral, MBK aims for 19.55%, below the minimum. MBK proceeds with a revised offering price, anticipating NPS participation.
  • Though the FSS investigation may favor MBK, a successful tender offer depends on achieving 87% participation. The higher-than-expected likelihood of success hints at a strong upward stock adjustment from Monday.

Could US Lawmakers Actually Stop SHEIN’s US IPO? No, But They Sure Could Make Things Difficult

By Daniel Hellberg

  • Since SEC operates in US executive branch, Congress lacks power to stop IPOs
  • But by passing new laws, Congress could potentially undermine SHEIN’s IPO
  • Given current political climate in the US, SHEIN IPO faces real political risks

Water Oasis ( 1161 HK ) FY23 Results: Resilient Set Up For a >10% Yield in FY24

By Sameer Taneja

  • Water Oasis (1161 HK) reported 16%/65% YoY revenue/PAT growth for FY23. For H2 FY23 revenue/PAT decelerated to 7% YoY/31% YoY. The company guided a positive outlook for FY24.
  • Net cash increased to 271 mn HKD, representing 28% of market capitalization (990 mn HKD), as the company benefitted from positive working capital cycle changes. 
  • Water Oasis (1161 HK) declared a 7-cent dividend for H2 FY23, bringing the overall dividend for FY23 to 14 cents (9.6% div yield). 

Haier Smart Home (6690 HK): Further Expansion of Footprint

By Osbert Tang, CFA

  • Haier Smart Home (6690 HK)‘s acquisition of Carrier commercial refrigeration business is earnings accretive. It will also be strategically positive to its growth outlook. 
  • With net cash of Rmb17.3bn, HSH has no problem funding the deal internally. Instead of earning a single-digit return on cash, the business’ 9% earnings yield is attractive. 
  • The transaction will extend HSH’s application scenarios from household to commercial while elevating its competitiveness in Europe and allowing it to capture the B-end customers. 

REPT BATTERO Energy IPO Trading – Needs to Correct by 20-30%, at Least

By Sumeet Singh

  • REPT BATTERO Energy (REPT) raised around US$270m in its Hong Kong IPO.
  • REPT is a lithium-ion battery manufacturer in China, focusing on R&D, production, and sales of EV/ESS lithium-ion battery products such as battery cells, modules and packs.
  • We have covered various aspects of the deal in our previous note. In this note, we will talk about the demand and trading dynamics.

Liquid Universe of European Ordinary and Preferred Shares: December‘23 Report

By Jesus Rodriguez Aguilar

  • Since mid-November, spreads have generally widened across our European liquid universe of ordinary and preferred shares (9 have tightened, 10 widened).
  • Recommended trades long preferred / short ordinary shares: Media-for-Europe, Sixt, Volkswagen (still the most interesting situation).
  • Recommended trades long ordinary / short preferred shares: Fuchs, Henkel, SSAB Svenska Stal.

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

Sign Up for Free

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
Sign Up for Free


Dec 18
0

Daily Brief Australia: Adbri, S&P/ASX 200 and more

By | Australia, Daily Briefs

In today’s briefing:

  • Adbri (ABC AU) Warms To CRH/Barro’s Offer
  • EQD | S&P/ASX200 Pullback This Week: Where to Re-Enter LONG?

Adbri (ABC AU) Warms To CRH/Barro’s Offer

By David Blennerhassett

  • Construction play Adbri (ABC AU) has entered into a process and exclusivity deed with CRH (CRH US) and 42.7%-shareholder Raymond Barro (Chairman) in order to progress to a firm transaction.
  • CRH/Barro’s non-binding indicative proposal of $3.20/share (in cash), by way of a Scheme, is a 41% premium to last close. The proposal is best & final. 
  • Subject to DD being carried out by CRH, this looks done. 

EQD | S&P/ASX200 Pullback This Week: Where to Re-Enter LONG?

By Nico Rosti

  • The S&P/ASX 200 INDEX is currently up 3 weeks and OVERBOUGHT, a correction is expected very soon, probably this week.
  • The pullback is an opportunity to add LONG positions, the area to enter LONG is 7400-7300.
  • If the rally continues after the pullback, it can continue into the end of January.

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

Sign Up for Free

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
Sign Up for Free


Dec 18
0

Daily Brief South Korea: Hankook & Company, JSW Infrastructure and more

By | Daily Briefs, South Korea

In today’s briefing:

  • Hankook & Company (000240 KS): MBK Raises Partial Offer to KRW24,000
  • Hankook & Co Tender: Clues to Gauge Cancellation Risk Obtained Through Local Channels So Far
  • Morning Views Asia: JSW Infrastructure, Lippo Malls Indonesia Retail Trust, SK Hynix

Hankook & Company (000240 KS): MBK Raises Partial Offer to KRW24,000

By Arun George

  • MBK Partners has increased its Hankook & Company (000240 KS) partial tender offer to KRW24,000 per share, 20.0% and 51.4% above its previous offer and the last close, respectively.
  • While the offer is attractive, we estimate that the minimum acceptance condition of 19.3 million shares (20.35% of outstanding shares) requires an 84.3% minority acceptance rate. 
  • The minority acceptance rate is challenging unless MBK can secure a ruling preventing share purchases from Cho Yang-rai, who disclosed a 2.72% stake on 14 December and opposes the tender. 

Hankook & Co Tender: Clues to Gauge Cancellation Risk Obtained Through Local Channels So Far

By Sanghyun Park

  • Critical now is estimating MBK’s achievable volume in the tender offer, a key indicator for assessing cancellation risk. Evidence suggests few allies for Cho Hyun-beom, prompting MBK’s strategic persistence.
  • MBK can secure 23.58%, but NPS’s involvement is pivotal. If neutral, MBK aims for 19.55%, below the minimum. MBK proceeds with a revised offering price, anticipating NPS participation.
  • Though the FSS investigation may favor MBK, a successful tender offer depends on achieving 87% participation. The higher-than-expected likelihood of success hints at a strong upward stock adjustment from Monday.

Morning Views Asia: JSW Infrastructure, Lippo Malls Indonesia Retail Trust, SK Hynix

By Charles Macgregor

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

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

Sign Up for Free

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
Sign Up for Free


Dec 18
0

Daily Brief Singapore: JSW Infrastructure and more

By | Daily Briefs, Singapore

In today’s briefing:

  • Morning Views Asia: JSW Infrastructure, Lippo Malls Indonesia Retail Trust, SK Hynix

Morning Views Asia: JSW Infrastructure, Lippo Malls Indonesia Retail Trust, SK Hynix

By Charles Macgregor

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

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

Sign Up for Free

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
Sign Up for Free


Dec 18
0

Daily Brief United States: Marvell Technology and more

By | Daily Briefs, United States

In today’s briefing:

  • Marvell Industry Analyst Day

Marvell Industry Analyst Day

By Douglas O’Laughlin

  • Marvell reported earnings recently, and I wanted to mention that at least before I continued onwards because that is a good context-setting event for the industry day.

  • Revenue exceeded expectations, but the mix beneath the results was illustrative.

  • Datacenter revenue grew 20% QoQ, cloud over 30% QoQ; while networking was strong, they guided for a 40% QoQ decline, consistent with networking OEM results.

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

Sign Up for Free

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
Sign Up for Free