Category

Daily Briefs

Nov 27
0

Daily Brief Japan: Asahi Group Holdings, Zensho Holdings and more

By | Daily Briefs, Japan

In today’s briefing:

  • Asahi Group Placement – Follow Up – Shaping up for a Christmas Cheer
  • Zensho Placement – Good Price to Raise At, at Least for the Company

Asahi Group Placement – Follow Up – Shaping up for a Christmas Cheer

By Clarence Chu

Zensho Placement – Good Price to Raise At, at Least for the Company

By Sumeet Singh

  • Zensho Holdings (7550 JP) aims to raise around US$300m via a public offering.
  • As per the company it will use the proceeds from the deal for potential M&A transactions.
  • In this note, we will talk about the deal dynamics and run the deal through our ECM framework.

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Nov 26
0

Daily Brief Quantitative Analysis: TWSE Short Interest Weekly (Nov 24th): Lite-On Tech and more

By | Daily Briefs, Quantitative Analysis

In today’s briefing:

  • TWSE Short Interest Weekly (Nov 24th): Lite-On Tech, Compeq Mfg, Inventec, Gigabyte Tech

TWSE Short Interest Weekly (Nov 24th): Lite-On Tech, Compeq Mfg, Inventec, Gigabyte Tech

By Ke Yan, CFA, FRM

  • We analyzed the changes in short interest of TWSE Stocks as of Nov 24th which has an aggregated short interest worth USD15.0bn.
  • We tabulate league table for top short by value and short as multiple of ADT, as well as weekly increases & decreases in short value, short as multiple of ADT.
  • We highlight short interest changes in Lite-On Tech, Compeq Mfg, Inventec, Gigabyte Tech.

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Nov 26
0

Daily Brief ESG: Investors Will Again Demand Concrete Measures to Raise ROE and Boost Shareholder Returns in FY3/2025 and more

By | Daily Briefs, ESG

In today’s briefing:

  • Investors Will Again Demand Concrete Measures to Raise ROE and Boost Shareholder Returns in FY3/2025
  • Techem – ESG Report – Lucror Analytics

Investors Will Again Demand Concrete Measures to Raise ROE and Boost Shareholder Returns in FY3/2025

By Aki Matsumoto

  • The carryback of pension obligations and expenses resulting from higher bond yields is a factor in the increase in operating profit.
  • While this’ll lead to higher EPS, which should lead to higher dividends and more room for stock price appreciation, there’s concern that inflating the B/S will lead to stagnant ROE.
  • In addition, since FY3/2024 profits will be boosted by pension financing factors unrelated to the core business, lower profit growth rate in FY3/2025 will put pressure on the stock price.

Techem – ESG Report – Lucror Analytics

By Charles Macgregor

Lucror Analytics’ ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable).

We assess Techem’s ESG as “Adequate”, in line with its Environmental, Social and Governance scores. Controversies are “Immaterial” and Disclosure is “Adequate”.

International energy services provider Techem offers consumption-based billing services in the sub-metering industry.

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Nov 26
0

Daily Brief ECM: ZEEKR IPO Valuation Analysis: Next BYD or Tesla? and more

By | Daily Briefs, ECM

In today’s briefing:

  • ZEEKR IPO Valuation Analysis: Next BYD or Tesla?
  • ECM Weekly (26th Nov 2023) – Zeekr, Cirrus, Tata Tech, IREDA, FedBank, Juniper, GS Yuasa, AZ Com

ZEEKR IPO Valuation Analysis: Next BYD or Tesla?

By Andrei Zakharov

  • ZEEKR is expected to IPO in December. The company plans to raise up to $1B and Geely Auto may purchase additional shares of ZEEKR in a concurrent private placement.
  • I have a favorable view of the upcoming ZEEKR U.S. IPO and value ZEEKR shares using a 50/50 blend of EV/Sales analysis and long-term discounted cash flows analysis.
  • ZEEKR’s last round was a $750M Series A in February 2023 at a $13B post-money valuation. My ~$21B target valuation suggests 61% potential upside vs. last round valuation of $13B.

ECM Weekly (26th Nov 2023) – Zeekr, Cirrus, Tata Tech, IREDA, FedBank, Juniper, GS Yuasa, AZ Com

By Sumeet Singh

  • Aequitas Research puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs.
  • In the IPO space, Tata Technologies didn’t disappoint Tata Group fans, at least on the subscription front.
  • The placements continued to flow in this week as well in Japan.

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Nov 26
0

Daily Brief Thematic (Sector/Industry): Education Sector YTD: Volatility in Public Equities and more

By | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

  • Education Sector YTD: Volatility in Public Equities, PE Stalking with Take Private Offers
  • Chinese Carmakers Ship More Workers Abroad for Expansion, White Paper Says
  • GEMWeekly (24 Nov 2023): Thailand, China, Indonesia Macro; TSMC, Baidu, Alibaba

Education Sector YTD: Volatility in Public Equities, PE Stalking with Take Private Offers

By Anik Siwach

  • EdTech Market Volatility: Docebo and Tribal Group report significant YTD gains of +27% and +32%, while Janison and LTG Group face steep declines of -59% and -45%.
  • AI Disruption and Adaptation: Chegg introduces a GPT-style assistant in response to AI challenges, while Duolingo excels with 83.1M monthly users, expanding beyond language tuition.
  • Shifts in Private Funding: Private EdTech funding declines in 2023, with strategic investors and family offices driving deals, amidst a broader reduction in venture capital investments.

Chinese Carmakers Ship More Workers Abroad for Expansion, White Paper Says

By Caixin Global

  • About 70% of more than 20 Chinese carmakers with a presence outside of China are expected to see an uptick in the number of employees sent to work overseas in 2023, reflecting their increased bet on international expansion as they face intensifying competition at home.
  • That’s an estimate from a white paper jointly published Monday by three subsidiaries of New York-based risk adviser Marsh McLennan.
  • It came against the backdrop of China having overtaken Japan as the world’s largest car exporter by volume earlier this year.

GEMWeekly (24 Nov 2023): Thailand, China, Indonesia Macro; TSMC, Baidu, Alibaba

By Wium Malan, CFA

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Nov 26
0

Daily Brief Event-Driven: CES China Semiconductor Chips Index Rebalance: Another Inclusion for Hygon and more

By | Daily Briefs, Event-Driven

In today’s briefing:

  • CES China Semiconductor Chips Index Rebalance: Another Inclusion for Hygon
  • T&K TOKA (4636 JP): Imminent TOB Launch? Imminent Bump Needed?
  • Index Rebalance & ETF Flow Recap: HSI, HSCEI, HSTECH, HSCI, Div+, Top50, ASX, FXI, Xiaomi, Tata Tech
  • STAR50 Index Rebalance: Big Impact Expected; Inclusion Up 40% in One Month
  • A/H Premium Tracker (To 24 Nov 23): H Down Vs A, SOUTHBOUND Selling Continues, Tech Still Sold
  • Weekly Deals Digest (26 Nov) – JSR, Taisho, Origin, OreCorp, Eoflow, Hollysys, Zeekr, Tata Tech
  • Last Week in Event SPACE: JSR, Prosus/Tencent, Hollysys, Tata Consultancy, Geely, EOFlow
  • Mainland Connect NORTHBOUND Flows (To 24 Nov 23): Chongqing Changan (Bought) Vs BYD (Sold)
  • (Mostly) Asia-Pac Weekly Risk Arb Wrap: Origin Energy, Healius, OreCorp, Haitong Int., Taisho Pharma
  • SSE50 Index Rebalance: Five Changes; Adds & Deletes Moving in Lockstep

CES China Semiconductor Chips Index Rebalance: Another Inclusion for Hygon

By Brian Freitas

  • There are 3 changes for the CES China Semiconductor Chips Index that will be implemented at the close on 8 December.
  • Hygon Information Technology C (688041 CH) will be added to a global index in a week and then there will be multiple index inflows at the close on 8 December.
  • After underperforming from May to September, the adds have gained ground on the deletes over the last two months and there could be further outperformance over the next two weeks.

T&K TOKA (4636 JP): Imminent TOB Launch? Imminent Bump Needed?

By Travis Lundy

  • In August, T&K Toka Co Ltd (4636 JP) announced a TOB by Bain with a clearance hurdle of selling a 3.51% stake in Hangzhou Toka Ink (SH:688571) before launch.
  • Friday, the company announced that they put up a 3.6% stake for auction, with the sale to be executed that day. That likely triggers an early launch of the TOB.
  • The TOB Price is offensively cheap at 0.63x “official” book, and 0.53x book adjusted for equity affiliate price. The shares have traded through terms since launch. This should get bumped.

Index Rebalance & ETF Flow Recap: HSI, HSCEI, HSTECH, HSCI, Div+, Top50, ASX, FXI, Xiaomi, Tata Tech

By Brian Freitas

  • The capping for the Hang Seng family of indices will use closing prices from 28 November while implementation will take place at the close on 1 December.
  • The changes for the next S&P/ASX 200 (AS51 INDEX) rebalance will be announced after the close of trading on 1 December.
  • It was another week of inflows for the iShares Emerging Markets (EMXC US) to take units outstanding to a new high.

STAR50 Index Rebalance: Big Impact Expected; Inclusion Up 40% in One Month

By Brian Freitas

A/H Premium Tracker (To 24 Nov 23): H Down Vs A, SOUTHBOUND Selling Continues, Tech Still Sold

By Travis Lundy

  • The New and Better (17 weeks old) A-H Monitor has tables, charts, measures galore to track A/H premium positioning, southbound and northbound positioning/volatility in pairs over time, etc.
  • Hs with H/A pairs under-perform their As on average. H/A Pair intracorrelation is up and A premia continue to trend better.
  • SOUTHBOUND and NORTHBOUND were net sells overall. Everybody sold tech.

Weekly Deals Digest (26 Nov) – JSR, Taisho, Origin, OreCorp, Eoflow, Hollysys, Zeekr, Tata Tech

By Arun George

Last Week in Event SPACE: JSR, Prosus/Tencent, Hollysys, Tata Consultancy, Geely, EOFlow

By David Blennerhassett

Mainland Connect NORTHBOUND Flows (To 24 Nov 23): Chongqing Changan (Bought) Vs BYD (Sold)

By Travis Lundy

  • This is the somewhat-brand-spanking-new Quiddity Mainland Connect NORTHBOUND Monitor. We work off the same presentation as the A/H Premium Monitor and HK Connect SOUTHBOUND Monitor.
  • The same few names continue at the top of the gross flows list – Kweichow Moutai, Contemporary Amperex, Zhongji Innolight, etc, but the nets are changing (and Chongqing Changan)
  • Last week, NORTHBOUND were again net sellers (RMB -3.16bn), but Shanghai saw net buys. The top two flows were Chongqing Changan Automobile Company (200625 CH) to buy, BYD to sell.

(Mostly) Asia-Pac Weekly Risk Arb Wrap: Origin Energy, Healius, OreCorp, Haitong Int., Taisho Pharma

By David Blennerhassett

SSE50 Index Rebalance: Five Changes; Adds & Deletes Moving in Lockstep

By Brian Freitas

  • There are 5 changes for the SSE50 Index (SSE50 INDEX) that will be implemented at the close on 8 December. There is over 1x ADV to trade on some stocks.
  • We estimate a one-way turnover of 5.4% at the December rebalance leading to a one-way trade of CNY 4.85bn. Index arb activity could add to the impact on the stocks.
  • The adds, deletes and SSE50 Index (SSE50 INDEX) have moved nearly in lockstep since May and the passive flows could move things around a bit.

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Nov 26
0

Daily Brief Credit: Wanda Unit Seeks Extension for $600 Million Dollar Bonds and more

By | Credit, Daily Briefs

In today’s briefing:

  • Wanda Unit Seeks Extension for $600 Million Dollar Bonds

Wanda Unit Seeks Extension for $600 Million Dollar Bonds

By Caixin Global

  • The property management unit of Dalian Wanda Group Co. wants to push back the maturity of a $600 million bond by nearly a year, highlighting the property conglomerate’s deepening liquidity crunch.

  • Dalian Wanda Commercial Management Group Co. said Tuesday that it is seeking to delay the payment on the 7.25% note by 11 months due to liquidity pressures.

  • The 10-year dollar-denominated notes, issued by its subsidiary Wanda Properties International Co., are set to mature on Jan. 29, 2024, Wanda Commercial, the guarantor of the bond, said in a filing to the Hong Kong stock exchange.

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Nov 26
0

Daily Brief Equity Bottom-Up: ELS Losses Related to Hong Kong H-Index Could Top Nearly 3 Trillion for Major Korean Banks in 2024 and more

By | Daily Briefs, Equity Bottom-Up

In today’s briefing:

  • ELS Losses Related to Hong Kong H-Index Could Top Nearly 3 Trillion for Major Korean Banks in 2024
  • Singapore Airlines:
  • Uchi Technologies (UCHI MK): Solid Q3 2023,ROE >30%/Div Yield >7%
  • Classys (214150 KS): Record High Quarterly Performance in Q3; 2024 to Continue to Be Radiant

ELS Losses Related to Hong Kong H-Index Could Top Nearly 3 Trillion for Major Korean Banks in 2024

By Douglas Kim

  • The FSS has launched a formal investigation into KB Kookmin bank due to potentially massive losses related to the HSCEI linked ELS products. 
  • The three major listed banking groups (KB Financial, Shinhan Financial, and Hana Financial) could be burdened with nearly 86% of the HSCEI linked ELS losses (close to 2.6 trillion won). 
  • Major Korean banks may need a “Hail Mary” pass to avoid this disaster. Such positive outlook would include sharply rising HSCEI index in 2024, similar to what happened in 2016. 

Singapore Airlines:

By Neil Glynn

  • Following 2Q24 , our operating profit of S$2.9bn and a net profit of S$2.6bn, stand considerably higher than consensus of S$2.5bn and S$2.3bn respectively. 
  • SIA’s continue to suffer more inflation than most peers (ex-Qantas). However, 1H24 illustrated that continued restoration of capacity is diluting pressure and narrowing the gap to peers.
  • The true test for SIA will be management of normalizing profitability beyond FY24. We model operating profit of S$1.8bn/net profit of S$1.5bn in FY25, versus consensus of S$1.5bn/S$1.2bn.

Uchi Technologies (UCHI MK): Solid Q3 2023,ROE >30%/Div Yield >7%

By Sameer Taneja

  • Uchi Technologies (UCHI MK) reported a 15% YoY revenue growth/ 27% YoY operating profit growth led by constant USD revenue growth of 10% YoY and 4.5% MYR depreciation. 
  • Profit grew only 3.5% YoY due to an increase in the effective tax rate from 2.8% to 21.0% as the company’s tax holidays lapsed earlier this year.
  • Trading 12x PE, 7.5% dividend yield (based on a 90% payout), >30% ROE, and more than 10% of the market cap in cash; this a stock to explore. 

Classys (214150 KS): Record High Quarterly Performance in Q3; 2024 to Continue to Be Radiant

By Tina Banerjee

  • Classys (214150 KS) reported solid performance in 3Q23, with revenue and operating profit growing 45% and 41%, YoY, respectively, mainly driven by export in devices and domestic sales of consumables.  
  • Despite being an offseason, Q3 2023 witnessed increase in both the number of countries selling the new product Ultraformer MPT and the monthly average domestic sales of Volnewmer.
  • Continued improvement in equipment sale and increasing consumables contribution should drive growth in 2024. Entry into the U.S. and China will be the key for re-rating of the stock.   

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Nov 26
0

Daily Brief Macro: Unpacking Implications of OPEC Meeting Postponement and more

By | Daily Briefs, Macro

In today’s briefing:

  • Unpacking Implications of OPEC Meeting Postponement

Unpacking Implications of OPEC Meeting Postponement

By Srinidhi Raghavendra

  • OPEC meeting rescheduled by five days. What’s the big deal? Turns out that is. Brent crude prices tanked nearly 5% on the announcement.
  • Oil options turned sharply bearish too with the Brent crude put option volumes surging to 211,000 on Wednesday, the biggest volume on record.
  • OPEC majors are determined to keep oil prices trading in the range of $80-$100 a barrel. Given the infighting, don’t discount the possibility of this deal imploding.

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Nov 26
0

Most Read: iSoftStone Information Technology Group, HKEX, Celltrion Healthcare , HDC Hyundai Development Co-Engineering & Construction, Orion Corp, Taisho Pharmaceutical Holdin, Hygon Information Technology C, KB Financial, Banco Pan SA and more

By | Daily Briefs, Most Read

In today’s briefing:

  • CSI300 Index Rebalance Preview: 13 Potential Changes in December
  • CSI500 Index Rebalance Preview: Potential Adds Starting to Close the Gap
  • Index Rebalance & ETF Flow Recap: FRTIB, Japan, CSI300, CSI500, STAR50, WuXi XDC, Asahi
  • KOSDAQ150 Index Rebalance: 17 Changes a Side; Many Surprises
  • KOSPI200 Index Rebalance: Mostly Expected Though Some Discretion Used
  • 2024 High Conviction: Orion Corp
  • Taisho Pharmaceutical (4581 JP): MBO Tender Offer at JPY8,620
  • CES China Semiconductor Chips Index Rebalance: Another Inclusion for Hygon
  • ELS Losses Related to Hong Kong H-Index Could Top Nearly 3 Trillion for Major Korean Banks in 2024
  • EM Neobanks – Positive on Banco PAN, Cautious on Nubank & KakaoBank Is One to Watch

CSI300 Index Rebalance Preview: 13 Potential Changes in December

By Brian Freitas

  • With the review period for the December rebalance of the Shanghai Shenzhen CSI 300 Inde (SHSZ300 INDEX) complete, there could be 13 changes for the index.
  • We estimate one-way turnover of 1.94% at the December rebalance leading to a one-way trade of CNY 6.98bn. There are a lot of stocks with over 1x ADV to trade.
  • Over the last 6 months, the potential adds and potential deletes have tracked each other and underperformed the index. Positioning has led to outperformance in the last week.

CSI500 Index Rebalance Preview: Potential Adds Starting to Close the Gap

By Brian Freitas

  • With the review period for the December rebalance of the CSI500 Index complete, we forecast 50 changes (the maximum permitted) for the index at the close on 8 December.
  • Estimated one-way turnover is 9.66% at the December rebalance resulting in a one-way trade of CNY 6.36bn. There are 29 stocks with over 1 day of ADV to trade.
  • The potential deletes have outperformed the potential adds over the last 6 months though there has been a narrowing of the gap recently. Position for a further narrowing.

Index Rebalance & ETF Flow Recap: FRTIB, Japan, CSI300, CSI500, STAR50, WuXi XDC, Asahi

By Brian Freitas

  • The FRTIB benchmark switch from the EAFE Index to the ACWI IMI ex-USA ex-China ex-Hong Kong Index will result in a round trip trade of around US$56bn.
  • The changes for the CSI 300, CSI 500, STAR50, SSE50 and a bunch of other mainland China indices will be announced after market close on Friday.
  • Relatively quiet week for ETF flows with no major creations or redemptions during the week.

KOSDAQ150 Index Rebalance: 17 Changes a Side; Many Surprises

By Brian Freitas

  • There are 17 inclusions and 17 exclusions for the KOSDAQ 150 Index (KOSDQ150 INDEX) at the December rebalance to be implemented at the close on 14 December.
  • While most of the inclusions were expected, there are many differences on the deletes. Trading the strategy becomes tougher with the short sell ban in place.
  • The adds have started to outperform the deletes over the last month and there could be more movement over the next 3 weeks to implementation.

KOSPI200 Index Rebalance: Mostly Expected Though Some Discretion Used

By Brian Freitas

2024 High Conviction: Orion Corp

By Douglas Kim

  • We are positive on Orion Corp. Regardless of the overall market movement next year (up or down), we believe Orion Corp could outperform KOSPI in the next 6-12 months.
  • The company has millions of loyal customers in major overseas countries including China, Russia, and Vietnam. Despite difficult operating conditions, Orion continues to generate stable growth in sales and profits.
  • Orion Corp’s valuations are attractive. Orion Corp is currently trading at 2024E EV/EBITDA of 4.4x (42% lower than average valuation multiple from 2019 to 2023).

Taisho Pharmaceutical (4581 JP): MBO Tender Offer at JPY8,620

By Arun George

  • Taisho Pharmaceutical Holdin (4581 JP) has recommended an MBO tender offer of JPY8,620 per share, a 55.5% premium to the undisturbed (24 November). 
  • The transaction is a two-step acquisition through a cash tender offer and subsequent squeeze-out. The lower limit of the tender offer is set at a 66.67% ownership ratio.
  • Irrevocables represent a 40.31% ownership ratio. The minimum acceptance condition requires a 44% minority acceptance rate. The offer is attractive vs. historical and peer multiples.

CES China Semiconductor Chips Index Rebalance: Another Inclusion for Hygon

By Brian Freitas

  • There are 3 changes for the CES China Semiconductor Chips Index that will be implemented at the close on 8 December.
  • Hygon Information Technology C (688041 CH) will be added to a global index in a week and then there will be multiple index inflows at the close on 8 December.
  • After underperforming from May to September, the adds have gained ground on the deletes over the last two months and there could be further outperformance over the next two weeks.

ELS Losses Related to Hong Kong H-Index Could Top Nearly 3 Trillion for Major Korean Banks in 2024

By Douglas Kim

  • The FSS has launched a formal investigation into KB Kookmin bank due to potentially massive losses related to the HSCEI linked ELS products. 
  • The three major listed banking groups (KB Financial, Shinhan Financial, and Hana Financial) could be burdened with nearly 86% of the HSCEI linked ELS losses (close to 2.6 trillion won). 
  • Major Korean banks may need a “Hail Mary” pass to avoid this disaster. Such positive outlook would include sharply rising HSCEI index in 2024, similar to what happened in 2016. 

EM Neobanks – Positive on Banco PAN, Cautious on Nubank & KakaoBank Is One to Watch

By Victor Galliano

  • We turn positive on Banco PAN, for its consistently improving operational metrics to 3Q23, attractive valuations and sound capital adequacy
  • Nubank is operationally strong but we remain cautious on Nubank shares as we see this neobank to be challenged by capital constraints, as well as being on stretched valuations
  • Inter has been improving operationally, and is sound on capital but is in the shadow of PAN in terms of valuations; KakaoBank is sound operationally and one to watch

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