Category

Daily Briefs

Oct 23
0

Daily Brief Thailand: Delta Electronics Thai, Krung Thai Bank Pub and more

By | Daily Briefs, Thailand

In today’s briefing:

  • Delta Taiwan Vs. Thailand Monitor: Market Cap Metric Breaches Key Level For 1st Time Since Dec 2022
  • Thai Banks 3Q23 Screener; Stick with Krung Thai and Ayudhya

Delta Taiwan Vs. Thailand Monitor: Market Cap Metric Breaches Key Level For 1st Time Since Dec 2022

By Vincent Fernando, CFA

  • Delta Thailand shares haven’t recovered from their sharp drop at the end of September, which happened after the parent Delta Taiwan sold a stake in the Thai subsidiary.
  • Delta Thailand shares fell to the point that its market cap finally became smaller than Delta Taiwan, for the first time since December 2022.
  • Delta Thailand’s market cap should be substantially smaller than its parent Delta Taiwan. We analyze what history tells us the further relative downside for Delta Thailand could be.

Thai Banks 3Q23 Screener; Stick with Krung Thai and Ayudhya

By Victor Galliano

  • Krung Thai ranks second from top in terms of post-provision profitability and it has double digit ROE with a healthy balance sheet, along with attractive PBV and PE ratios
  • We also like Ayudhya, with its sound pre and post-provision profitability metrics with healthy ROE and ROA, its sound credit quality metrics and undemanding valuations
  • Kasikorn’s TTM cost of risk remain high versus the peers, and in 3Q23 it continued to worsen; its pre-provision profitability is healthy but there is, as yet, no CoR improvement

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Oct 23
0

Daily Brief Credit: Morning Views Asia: Hopson Development and more

By | Credit, Daily Briefs

In today’s briefing:

  • Morning Views Asia: Hopson Development

Morning Views Asia: Hopson Development

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.

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Oct 23
0

Daily Brief ECM: CaiNiao Smart Logistics Pre-IPO Part 3 | Key Comps and more

By | Daily Briefs, ECM

In today’s briefing:

  • CaiNiao Smart Logistics Pre-IPO Part 3 | Key Comps, Valuation Multiples | 310 Bn CNY Justifiable

CaiNiao Smart Logistics Pre-IPO Part 3 | Key Comps, Valuation Multiples | 310 Bn CNY Justifiable

By Daniel Hellberg

  • In this insight we first consider which comparables are the most appropriate for CaiNiao
  • We then discuss which valuation multiples make sense, plus some potential pitfalls 
  • We believe CaiNiao and their bankers could justify a valuation up to 310 bn CNY

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Oct 23
0

Daily Brief South Korea: Korea Stock Exchange KOSPI 200 and more

By | Daily Briefs, South Korea

In today’s briefing:

  • EQD | KOSPI 200 Falling, LONG Support

EQD | KOSPI 200 Falling, LONG Support

By Nico Rosti

  • The KOSPI 200 INDEX closed down last week (CC=-1) and is going towards the Q2/median support at 314. The index is also OVERSOLD MONTHLY (CC=-3)
  • One possible scenario is to see the index downtrending into early/mid-November, find a bottom, and then begin a counter-rally from there.
  • The index could go down more this week, but a LONG trade could begin at 314 support, and if that does not hold, the next support area is at 306.

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Oct 23
0

Daily Brief Equity Bottom-Up: TSMC. Robust Defence Of Process Technology Leadership and more

By | Daily Briefs, Equity Bottom-Up

In today’s briefing:

  • TSMC. Robust Defence Of Process Technology Leadership
  • Taiwan Dual Listings Monitor: Sharp Premium Drops Most Recently; Key Levels to Long or Short
  • Topsports (6110 HK):  High Dividend Yield Supported By Strong Free Cash Flow
  • Shortlist Of High Conviction Ideas: Income, Value, and Margin of Safety – October 2023
  • Taiwan Tech Weekly: Watch for Intel, Microsoft, Mediatek, ASE, UMC Results; AI Names Top Losers
  • Delta Taiwan Vs. Thailand Monitor: Market Cap Metric Breaches Key Level For 1st Time Since Dec 2022
  • Gushengtang (2273.HK) – 2023 Full-Year Performance Would Exceed Expectations
  • Thai Banks 3Q23 Screener; Stick with Krung Thai and Ayudhya
  • Monthly Chinese Express Tracker | A New Price War Among China’s ‘Sort & Transport’ Express Names

TSMC. Robust Defence Of Process Technology Leadership

By William Keating

  • Q323 revenues of $17.28 billion. In US$ terms, this represented a 10.2% increase QoQ, but still down 14.6% YoY.
  • TSMC’s forecasted Q423 revenues of $19.2 billion at the midpoint, representing a 10% QoQ increase
  • CEO C.C Wei robustly rebuffed Intel’s popular claim to be on track for process technology leadership by 2025

Taiwan Dual Listings Monitor: Sharp Premium Drops Most Recently; Key Levels to Long or Short

By Vincent Fernando, CFA

  • Premiums have generally fallen sharply most recently, likely driven by weaker global markets.
  • Key earnings: TSMC reported last week; UMC and ASE to report this week.
  • We describe our latest recommended premium/discount levels to Long or Short the spreads.

Topsports (6110 HK):  High Dividend Yield Supported By Strong Free Cash Flow

By Steve Zhou, CFA

  • Topsports International Holdings (6110 HK) announced first half FY24 (fiscal year ending February) results last week, with net profit up 17% yoy.
  • The company trades at a 7% dividend yield, backed by strong free cash flow.
  • The stock is not only a yield play, but also a call option on the recovery of Nike and Adidas’ retail performance in China.

Shortlist Of High Conviction Ideas: Income, Value, and Margin of Safety – October 2023

By Sameer Taneja

Taiwan Tech Weekly: Watch for Intel, Microsoft, Mediatek, ASE, UMC Results; AI Names Top Losers

By Vincent Fernando, CFA

  • This week will see a wave of earnings releases for the industry including Intel, Microsofot, Mediatek, ASE, and UMC.
  • TSMC results last week provided positive color on the 2024E onwards outlook for the company as well as comments regarding a turn around for PC and mobile.
  • Taiwan AI names were some of the top losers across our Taiwan Tech universe last week.

Delta Taiwan Vs. Thailand Monitor: Market Cap Metric Breaches Key Level For 1st Time Since Dec 2022

By Vincent Fernando, CFA

  • Delta Thailand shares haven’t recovered from their sharp drop at the end of September, which happened after the parent Delta Taiwan sold a stake in the Thai subsidiary.
  • Delta Thailand shares fell to the point that its market cap finally became smaller than Delta Taiwan, for the first time since December 2022.
  • Delta Thailand’s market cap should be substantially smaller than its parent Delta Taiwan. We analyze what history tells us the further relative downside for Delta Thailand could be.

Gushengtang (2273.HK) – 2023 Full-Year Performance Would Exceed Expectations

By Xinyao (Criss) Wang

  • 3Q23 is expected to achieve over 40% YoY growth. 2023 overall performance would be better than previous guidance- Revenue up 40+% YoY and adjusted net profit up about 45% YoY.
  • With abundant cash flow, Gushengtang has increased dividend payouts and share buyback, indicating that the current stock price is undervalued and has not yet reflected its high growth expectations/healthy fundamentals.
  • Gushengtang has cross-regional expansion capability. The “sustainability” + “high growth” of performance are worth noting. Depressed sentiment/complex external environment provide a good buying opportunity. Rebound in stock price is expected.

Thai Banks 3Q23 Screener; Stick with Krung Thai and Ayudhya

By Victor Galliano

  • Krung Thai ranks second from top in terms of post-provision profitability and it has double digit ROE with a healthy balance sheet, along with attractive PBV and PE ratios
  • We also like Ayudhya, with its sound pre and post-provision profitability metrics with healthy ROE and ROA, its sound credit quality metrics and undemanding valuations
  • Kasikorn’s TTM cost of risk remain high versus the peers, and in 3Q23 it continued to worsen; its pre-provision profitability is healthy but there is, as yet, no CoR improvement

Monthly Chinese Express Tracker | A New Price War Among China’s ‘Sort & Transport’ Express Names

By Daniel Hellberg

  • In this month’s Tracker, we focus on a new price war among the ‘sort & transport’ names
  • Q3 ASPs at these express companies fell by -12% Y/Y, and volume growth softened
  • We believe margins are under increasing pressure in China’s mainstream express segment

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Oct 23
0

Daily Brief Macro: Central Bank Watch: The Fed has gone from QE to QT to QB and more

By | Daily Briefs, Macro

In today’s briefing:

  • Central Bank Watch: The Fed has gone from QE to QT to QB
  • Fade the War Hysteria
  • Portfolio Watch: Time to consider (EUR) bonds?
  • Positioning Watch: Shifting Gears without Panic
  • EM by EM #26: Biden, Blinken, Barrels & Beijing
  • US Treasury Watch: An opportunity of a decade or still the pain trade?
  • US Corporate Animal Spirits Dented by Fed Policy Normalisation, but Profits Remain Resilient
  • Is the Unemployment Rate Drifting Higher or Lower?

Central Bank Watch: The Fed has gone from QE to QT to QB

By Andreas Steno

  • The extreme volatility in the USD curve continues and Jay Powell gave a green light to further curve steepening by hinting that term premias could drive up the curve allowing the Fed to tighten a little less in the front.
  • In this piece, we are going to take a deep dive into central balance sheet structures in the US and in Europe, which reveals that the ECB is much more determined in its attempts to bring liquidity down relative to the Fed.
  • This is another reason to expect EUR-flation to drop faster than USD-flation.

Fade the War Hysteria

By Cam Hui

  • Oil prices have jumped over $6 a barrel since the Hamas attack on Israel as a geopolitical risk premium became embedded in the oil price.
  • Our review of the military backdrop, oil supply-demand factors and the market response to the crisis leads us to conclude that investors should fade any hysteria over a Mideast conflict.
  • However, regional equity markets like Israel and Saudi Arabia should be avoided, each for their own idiosyncratic reasons.

Portfolio Watch: Time to consider (EUR) bonds?

By Emil Moller

  • We of course have been totally explicit about how stocks have been a minefield to go long since August and while I entertained the thought of a brief comeback on the back of a potential breather at the long-end of the UST curve, it is rather obvious that none of that is really playing out.

  • The bond market is in a sad state and risk assets struggle to keep afloat and we grace ourselves of having no net exposure to either asset class.

  • We are currently in the process of thoroughly reviewing our portfolio and are actively considering the inclusion of bonds to profit from the prevailing disinflationary pressures and the overall subdued economic outlook

Positioning Watch: Shifting Gears without Panic

By Emil Moller

  • Another week of blood and drama. But fear not, we’re here to wrap up the week with our usual watch series, where we’ll gauge the current market sentiment using the latest positioning data.

  • First things first, let’s take a quick peek at the chart of the week down below. In yesterday’s Portfolio Watch, we spilled the beans about some big changes we’re planning for our portfolio.

  • One of the main reasons we’re making these moves now is because of what we see in this chart: The S&P 500 just dipped below its 200-day moving average support line, waving a red flag that suggests we might be in for a bumpy ride in the coming weeks

EM by EM #26: Biden, Blinken, Barrels & Beijing

By Emil Moller

  • Both Biden and Xi find themselves walking on thin ice as domestic economic challenges pose a significant challenge to their foreign policy goals.
  • Amidst the considerable volatility in risk assets and US Treasury bonds, we believe that commodities could present a favorable risk-reward opportunity.
  • Our forecast of a possible recession is further complicated by price pressures arising from the pending restocking and the geopolitical risksIt’s hard to overlook the remarkable resilience of the US economy and the current turbulence in global bond markets.

US Treasury Watch: An opportunity of a decade or still the pain trade?

By Elias Lisberg Glistrup

  • Some much-needed bids provided relief to the bedrock treasury market last week, and yields eased off a bit.
  • The relief was short-lived though, and this week’s yields continue its climb.
  • But, is now a golden opportunity for buying bonds, or is the cocktail of vast issuance, some CBs unwinding their holdings, and still poor appetite bound to send yields even higher?

US Corporate Animal Spirits Dented by Fed Policy Normalisation, but Profits Remain Resilient

By Said Desaque

  • US economic resilience can be explained by corporations not experiencing the same magnitude of interest rate hikes endured by banking customers due to their ability to raise capital market funding. 
  • US corporate buyback activity has fallen significantly since 2022 Q1 due to uncertainty about the economic outlook. The new 1% buyback tax has hitherto not significantly impacted S&P500 operating EPS. 
  • Animal spirits within the corporate sector are difficult to gauge. Proxies for animal spirits do not currently indicate high levels and are seemingly at odds with tight labour market conditions.

Is the Unemployment Rate Drifting Higher or Lower?

By Thomas Lam

  • Arguably, the current normalization of inflation, including the future path of Fed policy, is linked to the unsettled labor market dynamics
  • The Beveridge curve, depicting an inverse relationship between vacancies and unemployment, offers clues on the ongoing labor market rebalancing   
  • While my exercise suggests that the unemployment rate is likely to drift up as vacancies decline, the extent of the rise remains uncertain    

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Oct 23
0

Daily Brief Japan: Persol Holdings and more

By | Daily Briefs, Japan

In today’s briefing:

  • Japan – Increase in Shorts on Some Interesting** Stocks

Japan – Increase in Shorts on Some Interesting** Stocks

By Brian Freitas

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Oct 23
0

Daily Brief Indonesia: Multi Bintang Indonesia and more

By | Daily Briefs, Indonesia

In today’s briefing:

  • Shortlist Of High Conviction Ideas: Income, Value, and Margin of Safety – October 2023

Shortlist Of High Conviction Ideas: Income, Value, and Margin of Safety – October 2023

By Sameer Taneja

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Oct 23
0

Daily Brief China: Topsports International Holdings, Cainiao Smart Logistics, Gushengtang, Hopson Development, ZTO Express Cayman and more

By | China, Daily Briefs

In today’s briefing:

  • Topsports (6110 HK):  High Dividend Yield Supported By Strong Free Cash Flow
  • CaiNiao Smart Logistics Pre-IPO Part 3 | Key Comps, Valuation Multiples | 310 Bn CNY Justifiable
  • Gushengtang (2273.HK) – 2023 Full-Year Performance Would Exceed Expectations
  • Morning Views Asia: Hopson Development
  • Monthly Chinese Express Tracker | A New Price War Among China’s ‘Sort & Transport’ Express Names

Topsports (6110 HK):  High Dividend Yield Supported By Strong Free Cash Flow

By Steve Zhou, CFA

  • Topsports International Holdings (6110 HK) announced first half FY24 (fiscal year ending February) results last week, with net profit up 17% yoy.
  • The company trades at a 7% dividend yield, backed by strong free cash flow.
  • The stock is not only a yield play, but also a call option on the recovery of Nike and Adidas’ retail performance in China.

CaiNiao Smart Logistics Pre-IPO Part 3 | Key Comps, Valuation Multiples | 310 Bn CNY Justifiable

By Daniel Hellberg

  • In this insight we first consider which comparables are the most appropriate for CaiNiao
  • We then discuss which valuation multiples make sense, plus some potential pitfalls 
  • We believe CaiNiao and their bankers could justify a valuation up to 310 bn CNY

Gushengtang (2273.HK) – 2023 Full-Year Performance Would Exceed Expectations

By Xinyao (Criss) Wang

  • 3Q23 is expected to achieve over 40% YoY growth. 2023 overall performance would be better than previous guidance- Revenue up 40+% YoY and adjusted net profit up about 45% YoY.
  • With abundant cash flow, Gushengtang has increased dividend payouts and share buyback, indicating that the current stock price is undervalued and has not yet reflected its high growth expectations/healthy fundamentals.
  • Gushengtang has cross-regional expansion capability. The “sustainability” + “high growth” of performance are worth noting. Depressed sentiment/complex external environment provide a good buying opportunity. Rebound in stock price is expected.

Morning Views Asia: Hopson Development

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.

Monthly Chinese Express Tracker | A New Price War Among China’s ‘Sort & Transport’ Express Names

By Daniel Hellberg

  • In this month’s Tracker, we focus on a new price war among the ‘sort & transport’ names
  • Q3 ASPs at these express companies fell by -12% Y/Y, and volume growth softened
  • We believe margins are under increasing pressure in China’s mainstream express segment

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Oct 23
0

Daily Brief Industrials: Persol Holdings, ZTO Express Cayman and more

By | Daily Briefs, Industrials

In today’s briefing:

  • Japan – Increase in Shorts on Some Interesting** Stocks
  • Monthly Chinese Express Tracker | A New Price War Among China’s ‘Sort & Transport’ Express Names

Japan – Increase in Shorts on Some Interesting** Stocks

By Brian Freitas

Monthly Chinese Express Tracker | A New Price War Among China’s ‘Sort & Transport’ Express Names

By Daniel Hellberg

  • In this month’s Tracker, we focus on a new price war among the ‘sort & transport’ names
  • Q3 ASPs at these express companies fell by -12% Y/Y, and volume growth softened
  • We believe margins are under increasing pressure in China’s mainstream express segment

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  • ✓ Company Data and News
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