Category

Daily Briefs

Oct 30
0

Daily Brief Quantitative Analysis: A-H Premium Weekly (Oct 27th): Beigene and more

By | Daily Briefs, Quantitative Analysis

In today’s briefing:

  • A-H Premium Weekly (Oct 27th): Beigene, CMS, Guangzhou Auto, China Longyuan
  • Northbound Flows (Oct 27th): Moutai, CATL, Midea
  • TWSE Foreign Holding Weekly (Oct 27th): Taiwan Cement, TSMC, Hon Hai
  • Hong Kong Connect Flows (Oct 27th): Meituan, Semiconductor Manufacturing International, CNOOC

A-H Premium Weekly (Oct 27th): Beigene, CMS, Guangzhou Auto, China Longyuan

By Ke Yan, CFA, FRM

  • We analyse the changes of A-H premium on 146 stocks over the last week. The average A-H premium was 119.1% as of Oct 27th.
  • The average A-H premium changed by -1.7ppt week on week, led by utilities, consumer discretionary, industrials and offset by consumer staples.
  • We highlight weekly changes in A-H premium for Beigene, China Merchants Securities, Guangzhou Auto, China Longyuan.

Northbound Flows (Oct 27th): Moutai, CATL, Midea

By Ke Yan, CFA, FRM

  • We analyze the weekly Shanghai/Shenzhen northbound Connect flows with our data engine for holding position as of October 27th.
  • We estimate the weekly outflows to be US$50.4 million, led by information technology, financials, and offset by materials, utilities, communication services.
  • We have highlighted northbound flows for Moutai, CATL and Midea.

TWSE Foreign Holding Weekly (Oct 27th): Taiwan Cement, TSMC, Hon Hai

By Ke Yan, CFA, FRM

  • We analyzed the changes in foreign holdings of TWSE Stocks as of Oct 27th which has an aggregated holding worth USD603.3bn.
  • We tabulate league table for top changes by value for 1 week, one 4 weeks, 1 year and top stocks held by foreign instutions by dollar value.
  • We estimate that foreign flows to be outflows of USD1,558mln and highlight foreign changes in Taiwan Cement, TSMC, Hon Hai.

Hong Kong Connect Flows (Oct 27th): Meituan, Semiconductor Manufacturing International, CNOOC

By Ke Yan, CFA, FRM

  • We analyze the weekly Hong Kong Connect flows with our data engine for holding position as of October 27th.
  • The top stocks by inflows and outflows were tabulated for all market, HSCEI, mid cap and s/mid cap groups.
  • We highlight flows for Meituan, Semiconductor Manufacturing International and CNOOC.

💡 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


Oct 30
0

Daily Brief ECM: Cainiao Smart Logistics IPO: The Bear Case and more

By | Daily Briefs, ECM

In today’s briefing:

  • Cainiao Smart Logistics IPO: The Bear Case
  • Lalatech (货拉拉) Pre-IPO: To Understand Revenue Growth from Drivers’ Complaints and Strike

Cainiao Smart Logistics IPO: The Bear Case

By Arun George

  • Cainiao Smart Logistics (1437124D HK), a global leader in e-commerce logistics, has filed for a HKEx IPO to raise at least US$1 billion at a US$15-20 billion valuation.
  • In Cainiao Smart Logistics IPO: The Bull Case, we highlighted the key elements of the bull case. In this note, we outline the bear case.
  • The bear case rests on declining global cross-border market share, China logistics decelerating growth, high related-party transactions, and FCF burn. 

Lalatech (货拉拉) Pre-IPO: To Understand Revenue Growth from Drivers’ Complaints and Strike

By Ming Lu

  • Lalatech charges drivers more commissions but less membership fees to raise the general fees.
  • Drivers went on strike to protest against the income squeeze, but they did not  achieve their target.
  • We believe Lalatech is the dominator of the low-end truck-hiring market.

💡 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


Oct 30
0

Daily Brief Thematic (Sector/Industry): Ohayo Japan | Tech Rebounds but Markets in Correction; The New Lexus Concept Car and more

By | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

  • Ohayo Japan | Tech Rebounds but Markets in Correction; The New Lexus Concept Car
  • Japan Weekly | Fujitsu, Nidec, Ibiden
  • China Weekly Economic Wrap 10-29-2023

Ohayo Japan | Tech Rebounds but Markets in Correction; The New Lexus Concept Car

By Mark Chadwick

  • Overseas: SPX -0.5%, Nasdaq; +0.5%; Energy stocks weaker on poor results; US inflation still too high
  • Today: NKY Futs -1.3% v cash. JPY149.7; Weak results from Omron, Seiko, Sumi Chem
  • JapanX: Lexus’s LF-ZC concept car offers a 1,000 km range with advanced batteries, AI integration, and a commitment to luxury, signaling Toyota’s EV ambitions

Japan Weekly | Fujitsu, Nidec, Ibiden

By Mark Chadwick

  • Market Watch: Japanese equities flat over the week. Core inflation exceeds inflation; pressure on BoJ to normalize policy
  • Major Movers: Fujitsu stock soared by 12% this week; earnings in line; margin improvement in core Japan service solutions business.
  • Activist Watch: Murakami & co has added another 1-pt to their holding in Ryosan (10.4%)

China Weekly Economic Wrap 10-29-2023

By Fern Wang

  • China Huijin’s purchase of China ETF, signaling further support to the stock market
  • China, in a rare move in the middle of the year, planned to increase its fiscal deficit to 3.8% and issue RMB1Trn to support local governments 
  • China’s move is expected to support growth in 4Q and 1H24 without further burdening the local government financing.

💡 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


Oct 30
0

Daily Brief Equity Bottom-Up: KLAC. Bouncing Along The Bottom and more

By | Daily Briefs, Equity Bottom-Up

In today’s briefing:

  • KLAC. Bouncing Along The Bottom
  • M3: Margins Continue to Dip and Likely to Miss Full Year Guidance
  • CIMC Enric (3899 HK): Surge in Overall New Order Momentum
  • China Consumption Weekly (30 Oct 2023): Alibaba, Trip.com, New Oriental, Weibo
  • Aier Eye Hospital (300015.CH) 23Q3 – While Enjoy the Rebound, Recognize the Endgame Behind the Story
  • Fresenius Medical Care: Evaluating The New Strategic Plan & The Threat From Novo Nordisk
  • Monthly Container Shipping Tracker | Rebound in NAM Volume Could Be Inflection Point (October 2023)
  • HDFCL Vs SBIL: The Low Down on the Best Life Insurance Stocks In India Right Now (+SBIL 2Q24 Review)

KLAC. Bouncing Along The Bottom

By William Keating

  • Q323 revenues of $2.40 billion, at the upper end of the guidance range, up 2% QoQ but down 12.5% YoY
  • Current quarter revenue forecast of $2.45 billion, essentially flat sequentially
  • Services revenue on track for ~8% YoY growth despite overall revenues tracking to an 8.6% YoY decline..

M3: Margins Continue to Dip and Likely to Miss Full Year Guidance

By Shifara Samsudeen, ACMA, CGMA

  • M3 Inc (2413 JP) reported 2QFY03/2023 results on Friday. Revenues increased 3.0YoY while OP decreased 7.1% YoY, both revenues and OP fell below consensus estimates by 0.2% and 4.7% respectively.
  • Medical Platform’s earnings continue to deteriorate while we are yet to see a meaningful improvement in overseas segment’s earnings to drive the next phase of growth for m3.
  • Given continued decrease in profits, we think the company will struggle to meet its full-year guidance suggesting there is further downside to m3’s share price.  

CIMC Enric (3899 HK): Surge in Overall New Order Momentum

By Osbert Tang, CFA

  • CIMC Enric Holdings (3899 HK) has a solid 3Q23 with excellent new order pick-up, surging by 52.8% YoY on the back of strengths in clean energy and liquid food segments.
  • Hydrogen energy revenue is on target to reach Rmb700m in FY23. Meanwhile, management revealed that there is a slight gross margin expansion so far this year.
  • With order backlog rising 27.6% YoY to Rmb22.2bn at end-9M23, earnings outlook is well protected. Its net cash position is another credit, making its premium multiples justified.

China Consumption Weekly (30 Oct 2023): Alibaba, Trip.com, New Oriental, Weibo

By Ming Lu

  • JD is in fact competing with a broadcaster on Alibaba’s app, but not Alibaba itself.
  • Trip.com’s domestic orders during National Holidays were double last year.
  • New Oriental’s revenue increased strongly with new learning centers in 1Q24.

Aier Eye Hospital (300015.CH) 23Q3 – While Enjoy the Rebound, Recognize the Endgame Behind the Story

By Xinyao (Criss) Wang

  • Aier’s 23Q3 profit growth exceeded expectations. Considering the low base in 22Q4, Aier’s 23Q4 performance could show an obvious rebound. Then, the 2023 full-year results would be more certain.
  • Aier has a considerable amount of “off-balance-sheet profits” that can be incorporated into statements in the future. So, although Aier’s growth rate has decreased, it wouldn’t collapse in short term.
  • More hidden problems would be exposed in the process of transferring off-balance sheet profits to the on-balance sheet. All the repurchased shares should be cancelled to reduce Aier’s registered capital.

Fresenius Medical Care: Evaluating The New Strategic Plan & The Threat From Novo Nordisk

By Alexis Dwek

  • FMC has put in place a new strategic plan designed to improve operational performance, thereby unlocking value to achieve an operating profit margin of 10-14% by 2025
  • FMC has recently faced a potential threat to its dominant market position in renal care: Novo Nordisk. What’s Novo’s next move?
  • As the Company’s overall financial and operational performance improve, combined with the market’s realization that FMC is not going anywhere, we conclude that the stock should re-rate

Monthly Container Shipping Tracker | Rebound in NAM Volume Could Be Inflection Point (October 2023)

By Daniel Hellberg

  • Price momentum stagnant, but could North American volume surge be an inflection point?
  • Fuel price hasn’t risen since outbreak of violence in mideast, but no longer a tailwind, either
  • Look to Maersk results on November 3 for guidance, US inventory de-stocking commentary

HDFCL Vs SBIL: The Low Down on the Best Life Insurance Stocks In India Right Now (+SBIL 2Q24 Review)

By Raj Saya, CA, CFA

  • We make two arguments in this note (A) Why you should invest in the Indian Life Insurance Sector right now; (B) Why you should start with SBILIFE  over HDFCLIFE
  • Answers (A) The train has left-the-station on the long runway of double-digit growth in the sector; (B) The sector valuations are very reasonable due to short-term pressures, SBIL especially so.
  • We compare SBILIFE and HDFCL’s valuations, and narrow the focus on to One Crucial Factor showcasing the fundamental strength of these businesses.

💡 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


Oct 30
0

Daily Brief South Korea: Eoflow , L&F Co Ltd and more

By | Daily Briefs, South Korea

In today’s briefing:

  • Weekly Deals Digest (29 Oct) – Eoflow, Haitong Intl, Hollysys, Azure, Symbio, EcoPro, Cainiao
  • L&F (066970 KS): Index Implications of KOSDAQ to KOSPI Transfer

Weekly Deals Digest (29 Oct) – Eoflow, Haitong Intl, Hollysys, Azure, Symbio, EcoPro, Cainiao

By Arun George

L&F (066970 KS): Index Implications of KOSDAQ to KOSPI Transfer

By Brian Freitas

  • L&F Co Ltd (066970 KS) has applied to the KRX for a transfer from the KOSDAQ market to the KOSPI market.
  • Based on history, the approval for the transfer and the listing change could take place some time in December.
  • L&F (066970 KS) will not be short-sell eligible for 6 months or longer. That means short covering prior to index deletion and a possible overshoot in the stock price.

💡 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


Oct 30
0

Daily Brief Credit: Morning Views Asia: China Vanke and more

By | Credit, Daily Briefs

In today’s briefing:

  • Morning Views Asia: China Vanke , Gajah Tunggal, Reliance Industries, Xiaomi Corp

Morning Views Asia: China Vanke , Gajah Tunggal, Reliance Industries, Xiaomi Corp

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


Oct 30
0

Daily Brief Event-Driven: KDX (8972) – The Kenedix REIT Merger After a Disastrous Index Inclusion Trade and more

By | Daily Briefs, Event-Driven

In today’s briefing:

  • KDX (8972) – The Kenedix REIT Merger After a Disastrous Index Inclusion Trade
  • Weekly Deals Digest (29 Oct) – Eoflow, Haitong Intl, Hollysys, Azure, Symbio, EcoPro, Cainiao
  • L&F (066970 KS): Index Implications of KOSDAQ to KOSPI Transfer
  • Onewo (2602 HK) – Full Circulation & HSCI Inclusion
  • EQD | If the Nikkei Begings to Rally, Where Will It Encounter Resistance?
  • Merger Arb Mondays (30 Oct) – JSR, Eoflow, Azure Minerals, Symbio, Hollysys, Haitong Intl
  • TPG/Intervest: Agreed Offer, Spread
  • Quiddity HK Connect SOUTHBOUND (To 27-Oct-23); Meituan & Tech IN, High Div SOEs OUT, Financials MIA
  • Mainland Connect NORTHBOUND Flows (To 27Oct23): Net Selling Small, Foxconn & Tianqi Bought

KDX (8972) – The Kenedix REIT Merger After a Disastrous Index Inclusion Trade

By Travis Lundy

Weekly Deals Digest (29 Oct) – Eoflow, Haitong Intl, Hollysys, Azure, Symbio, EcoPro, Cainiao

By Arun George

L&F (066970 KS): Index Implications of KOSDAQ to KOSPI Transfer

By Brian Freitas

  • L&F Co Ltd (066970 KS) has applied to the KRX for a transfer from the KOSDAQ market to the KOSPI market.
  • Based on history, the approval for the transfer and the listing change could take place some time in December.
  • L&F (066970 KS) will not be short-sell eligible for 6 months or longer. That means short covering prior to index deletion and a possible overshoot in the stock price.

Onewo (2602 HK) – Full Circulation & HSCI Inclusion

By Brian Freitas

  • Onewo (2602 HK) has announced the full conversion of 1.05bn Domestic Shares and Unlisted Foreign Shares to H-shares. The increased market cap will help in HSCI inclusion.
  • Onewo (2602 HK) should be added to the HSCI in March and will be added to Southbound Stock Connect soon after index inclusion.
  • Onewo (2602 HK) has drastically underperformed its peers since listing and the HSCI inclusion could mark a turning point for the stock.

EQD | If the Nikkei Begings to Rally, Where Will It Encounter Resistance?

By Nico Rosti

  • Last week, the Nikkei closed down at 30991.69 (CC=-2). The index’s sell-off could end in November, marking a temporary bottom from which a rally could start.
  • MRM models say that if the Nikkei bounces this week, it could rise for 3 weeks and reach a price area between 31624 (Q3/CC=+1) and 32892 (Q3/Gen.Pattern Boxplot).
  • The upcoming rally comes as a reaction to quite OVERSOLD conditions, as previously discussed, but could be followed by another pullback. This insight points to where the rally may end.

Merger Arb Mondays (30 Oct) – JSR, Eoflow, Azure Minerals, Symbio, Hollysys, Haitong Intl

By Arun George

TPG/Intervest: Agreed Offer, Spread

By Jesus Rodriguez Aguilar

  • TPG will launch an agreed offer for turnaround-play Intervest Offices & Warehouses (INTO BB) at €21/share, 52% premium, with minimum acceptance condition of 50%+1 share. It has already secured 10.09% acceptances.
  • At 6.7% discount to last reported EPRA NTA, 5.5% discount to pro forma EPRA NTA, and 14.3x P/FFO 2023e, the offer price seems good exit value for shareholders.
  • Listed logistics European compas trade at c.11% premium EPRA NTA 2023e and 17x-18x P/FFO 2023e. Spread is 4.52%/16.04% (gross/annualised assuming settlement on 21 February). Risk/return looks interesting. Long.

Quiddity HK Connect SOUTHBOUND (To 27-Oct-23); Meituan & Tech IN, High Div SOEs OUT, Financials MIA

By Travis Lundy

  • This is the somewhat brand-spanking-new Quiddity HK Connect SOUTHBOUND Monitor. We work off the same presentation as the A/H Premium Monitor and Mainland Connect NORTHBOUND Monitor.
  • Last week, China Mobile (941), SMIC (981) and CNOOC (883) all saw total SOUTHBOUND turnover top 75% of value traded on a gross basis, indicating huge participation. 
  • Meituan was again the top SOUTHBOUND inflow, now net inflow every day for more than a month. Total Net Inflows at HK$6.9bn now 14 weeks straight in the positive column.

Mainland Connect NORTHBOUND Flows (To 27Oct23): Net Selling Small, Foxconn & Tianqi Bought

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 five names continue at the top of the gross flows list – Kweichow Moutai, Contemporary Amperex, Wuliangye Yibin, Foxconn Industrial, and BYD. Nets are dropping.
  • Overall net NORTHBOUND selling this week was small at RMB 445mm. Foxconn Industrial Internet (601138 CH) was net bought every day despite the investigation news the previous weekend.

💡 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


Oct 30
0

Daily Brief Indonesia: Gajah Tunggal and more

By | Daily Briefs, Indonesia

In today’s briefing:

  • Morning Views Asia: China Vanke , Gajah Tunggal, Reliance Industries, Xiaomi Corp

Morning Views Asia: China Vanke , Gajah Tunggal, Reliance Industries, Xiaomi Corp

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


Oct 30
0

Daily Brief Macro: Fed Not Concerned About Financial Conditions as US Equity Valuations Resemble Late-1990s and more

By | Daily Briefs, Macro

In today’s briefing:

  • Fed Not Concerned About Financial Conditions as US Equity Valuations Resemble Late-1990s
  • Steno Signals #71 – A First Taste of the Recession Sell-Off?
  • Could This Be The Start of a Major Bearish Episode?
  • What A Soft Landing Looks Like

Fed Not Concerned About Financial Conditions as US Equity Valuations Resemble Late-1990s

By Said Desaque

  • Fed Chairman Powell believes that current financial conditions are not tight by historic standards.  Normalising financial conditions could be prolonged due to the low term premium in US Treasuries.
  • Many investors believe the Fed will be forced to ease policy as tighter settings will eventually imperil financial stability, but high leverage is notably absent at broker-dealers. 
  • Narrow breadth in the S&P500 leadership in 2023 resembles conditions in the late-1990s that masked valuation compression for those constituents that were not market leaders.

Steno Signals #71 – A First Taste of the Recession Sell-Off?

By Andreas Steno

  • Happy Sunday from a wet and cloudy Copenhagen! Market fears are back and the rising term premiums and real rates are making their way through cross asset moves.
  • The biggest question to ask right now is whether the pandemic altered the geopolitical and- financial playing field to an extent that will allow >+2% real rates for the next 10-20 years and whether equity multiples can continue to live in a QE world if QE is no longer a thing.
  • The repricing of cross asset trends due to rising real rates may not be over yet.

Could This Be The Start of a Major Bearish Episode?

By Cam Hui

  • The S&P 500 is at a key technical crossroad as it tests support at 4100 
  • The market is oversold, but not as oversold as during the sell-offs in 2022, opening the door to further weakness. Sentiment is turning to indicate a near-term bottom.
  • We judge the odds of a year-end rally at 70% and further weakness at 30%.

What A Soft Landing Looks Like

By Cam Hui

  • The U.S. economy appears to be undergoing a soft landing. The global economy may be boosted by a new round of Chinese stimulus.
  • Investors can position for this scenario by rotating away from U.S. megacap growth equities to non-U.S. markets.
  • However, the risk of a credit event and overly strong U.S. growth may derail that bullish scenario.

💡 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


Oct 30
0

Daily Brief India: SBI Life Insurance Co Ltd and more

By | Daily Briefs, India

In today’s briefing:

  • HDFCL Vs SBIL: The Low Down on the Best Life Insurance Stocks In India Right Now (+SBIL 2Q24 Review)

HDFCL Vs SBIL: The Low Down on the Best Life Insurance Stocks In India Right Now (+SBIL 2Q24 Review)

By Raj Saya, CA, CFA

  • We make two arguments in this note (A) Why you should invest in the Indian Life Insurance Sector right now; (B) Why you should start with SBILIFE  over HDFCLIFE
  • Answers (A) The train has left-the-station on the long runway of double-digit growth in the sector; (B) The sector valuations are very reasonable due to short-term pressures, SBIL especially so.
  • We compare SBILIFE and HDFCL’s valuations, and narrow the focus on to One Crucial Factor showcasing the fundamental strength of these businesses.

💡 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