Daily Briefs

The Brand-Spanking New (6 weeks old) A-H Monitor has tables, charts, measures galore to track A/H premium positioning, southbound and northbound positioning in pairs over time, etc.
We used to do it and decided to bring it back better. There are lots of cool interactive tables, and charts, heat maps, and comparative data. And 41 Trade Recommendations.
The last five weeks (since the instantiation of the new Monitor and Portfolio 6 weeks ago) have seen net portfolio performance of +0.50%, +1.35%, +0.14%, +0.47%, +0.15%.

SK Telecom (017670 KS): Foreign Room & Passive Inflows

Foreign room in SK Telecom (017670 KS) increased above 15% in July and is currently just above 16%. Foreign investors have resumed buying again and foreign room is moving lower.
Foreign room staying above 15% for another month could result in passive buying at the end of November. SK Telecom (017670 KS) has outperformed peers over the last few weeks.
Foreign buying over the next month could lead to foreign room dropping below 15% in which case there will be no passive inflows. But the stock could be higher.

Intel’s Data Centre Meltdown

By William Keating

Year to date, Intel’s data center revenues are down 28% YoY.
By comparison, AMD’s year-to-date revenues are down just 6% YoY
Why is AMD performing so much better than Intel in the data center and will their market share growth continue?

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Sep 18

Daily Brief Industrials: AviChina Industry & Technology H, T.S. Lines and more

By Smartkarma Daily Briefs | Daily Briefs, Industrials

In today’s briefing:

AviChina Industry (2357 HK): This Is Just the Beginning
TS Lines Pre-IPO | Slimming Down Fleet | Intra-Asia Market Update | Latest From Key Comp Wan Hai

AviChina Industry (2357 HK): This Is Just the Beginning

By Osbert Tang, CFA

AviChina Industry & Technology H (2357 HK) is expected to see sustained profit upturn in 2H23 following a 26.8% growth in 1H23. Continued geopolitical turmoil will still benefit it.
All its listed A-share subsidiaries recorded a pick-up in earnings momentum in 2Q23, and this indicates solid underlying demand as well as the impact of product developments.
Avicopter PLC (600038 CH) has seen volume and price recovery after product portfolio refinement while new products have stimulated the ancillary system and related business.

TS Lines Pre-IPO | Slimming Down Fleet | Intra-Asia Market Update | Latest From Key Comp Wan Hai

By Daniel Hellberg

So far in 2023 TS Lines has sold off close to one quarter of its shipping capacity
In the company’s core market, Intra-Asia, it appears rates have bottomed out here in Q323
We also review Q2 financial results from TS Lines’ main comp, Wan Hai Lines (WHL)

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Sep 18

Daily Brief Health Care: Eoflow and more

By Smartkarma Daily Briefs | Daily Briefs, Healthcare

In today’s briefing:

Merger Arb Mondays (18 Sep) – Eoflow, Costa, Liontown, Pact, T&K Toka, IMAX, Poly Culture

Merger Arb Mondays (18 Sep) – Eoflow, Costa, Liontown, Pact, T&K Toka, IMAX, Poly Culture

By Arun George

We summarise the latest spreads and newsflow of merger arb situations we cover across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
Highest spreads – 111 Inc (YI US), Eoflow (294090 KS), Symbio Holdings (SYM AU), Costa Group Holdings (CGC AU), Orecorp Ltd (ORR AU), Mason Group Holdings (273 HK), JSR.
Lowest spreads – Healius (HLS AU), Toyo Construction (1890 JP), Yaizu Suisankagaku Industry (2812 JP), Pacific Current (PAC AU), Pact Group Holdings (PGH AU), T&K Toka Co Ltd (4636 JP).

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Sep 18

Daily Brief Consumer: Descente Ltd, I-TAIL , Costa Group Holdings and more

By Smartkarma Daily Briefs | Consumer, Daily Briefs

In today’s briefing:

Itochu Buying Descente (8114) – ANTA Selldown Offset Or Creeping Takeover?
SET50 Index Rebalance Preview: Two Potential Changes in December
Costa Mulls Paine Schwartz’s Lower Bid

Itochu Buying Descente (8114) – ANTA Selldown Offset Or Creeping Takeover?

Four years after Itochu got to 40.0% of votes in Descente (8114) in a hostile Tender Offer, Descente partner ANTA, which supported Itochu at the time started selling its stake.
A few months later, Itochu started buying shares of Descente in the market. As of 7 Sep, Itochu had bought Descente shares 81 days straight (9.7% of ADV).
This begs the question: Is Itochu ensuring they maintain voting control as ANTA sells? Or are they buying to lift their stake prior to another bid?

SET50 Index Rebalance Preview: Two Potential Changes in December

There could be two changes for the SET50 INDEX with JMT Network Services (JMT TB) and I-TAIL (ITC TB) replacing Srisawad Power (SAWAD TB) and Ngern Tid Lor (TIDLOR TB).
With no further inclusions on the Market Surveillance Measure list, Delta Electronics Thai (DELTA TB) should be safe at the December rebalance.
There are a couple of stocks that are close to passing/failing the liquidity tests and that could result in further changes to the index.

Costa Mulls Paine Schwartz’s Lower Bid

By David Blennerhassett

Back on the 4 July, Paine Schwartz Partners (PSP) made an A$3.50/share NBIO for Costa Group (CGC AU) by way of a Scheme. PSP held 14.84% at the time.
The due diligence period came and went, or so it appeared, but Costa said it remained ongoing. Rumours circulated that PSP had gone cold. 1H23 results were also delayed.
Costa has now announced this morning that PSP has returned with a $3.20/share Offer – best and final – reduced for any permitted dividend of up to A$0.04, if declared.

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Sep 18

Daily Brief Financials: Wharf Holdings, Korea Stock Exchange KOSPI 200, Chicago Board Options Exchange Volatility Index, LIC Housing Finance, Road King Infrastructure and more

By Smartkarma Daily Briefs | Daily Briefs, Financials

In today’s briefing:

Wharf Holdings (4 HK): Improved Liquidity & Passive Buying
EQD | KOSPI 200 Index WEEKLY OVERBOUGHT (Or Break-Out Rally?)
EQD | VIX Index WEEKLY Suggests Upcoming Increase in Volatility
LICHF: On Track for a Record FY24 PAT
Morning Views Asia: Road King Infrastructure

Wharf Holdings (4 HK): Improved Liquidity & Passive Buying

Improved liquidity and a higher stock price could see passive trackers buying Wharf Holdings (4 HK) within the next couple of months.
Wharf Holdings (4 HK) trades cheaper than the average and median of its peers on EV/Sales, EV/EBITDA and price to book value.
Wharf Holdings (4 HK) has already started to move higher and there could be a bigger move in the stock over the next month.

EQD | KOSPI 200 Index WEEKLY OVERBOUGHT (Or Break-Out Rally?)

By Nico Rosti

The KOSPI 200 INDEX WEEKLY did rise last week and is approaching OVERBOUGHT territory based on the current short-term trend pattern (Q3 resistance is at 346).
The current pattern is bearish, but if the market gains momentum and rallies for 2 more weeks, it could reach 357 during the 3rd week up (not earlier).
The alternative scenario, a better fit for this bearish pattern, is that the index starts to pull back this week, or remains weak this week and falls the next.

EQD | VIX Index WEEKLY Suggests Upcoming Increase in Volatility

By Nico Rosti

The VIX INDEX is currently OVERSOLD from a time perspective, but not yet from a price perspective: if it falls <13, there is a high probability it will reverse up.
A spike in the VIX will correspond to a drawdown in equities, globally. The MRM model indicates a 1-2 weeks duration for the event, price targets between 16 and 18.
After the spike, the VIX could start to fall again, so this upcoming volatility spike should be a brief, short-lived event.

LICHF: On Track for a Record FY24 PAT

By Ankit Agrawal, CFA

LIC Housing Finance (LICHF IN) posted a strong Q1FY24, despite an adverse one-off reversible impact. Q1FY24 PAT came in at INR 1319cr vs INR 1191cr QoQ and INR 927cr YoY.
With the interest rates stabilizing, housing demand has been improving. LICHF’s asset quality has been also improving, adjusted for one-off technical glitch related deterioration.
At around 6x P/E based on our projected FY24E PAT, LICHF is available quite cheap and has potential to more than double from the current levels.

Morning Views Asia: Road King Infrastructure

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.

Road King Infrastructure

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Sep 17

Daily Brief Quantitative Analysis: TWSE Short Interest Weekly (Sep 15th): Wiwynn and more

By Smartkarma Daily Briefs | Daily Briefs, Quantitative Analysis

In today’s briefing:

TWSE Short Interest Weekly (Sep 15th): Wiwynn, Alchip Tech, Realtek Semi

TWSE Short Interest Weekly (Sep 15th): Wiwynn, Alchip Tech, Realtek Semi

By Ke Yan, CFA, FRM

We analyzed the changes in short interest of TWSE Stocks as of Sep 15th which has an aggregated short interest worth USD14.0bn.
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 Wiwynn, Alchip Tech, Realtek Semi.

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Sep 17

Daily Brief Thematic (Sector/Industry): GEMWeekly (15 Sep 2023): China and more

By Smartkarma Daily Briefs | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

GEMWeekly (15 Sep 2023): China, India Macro Data; Alibaba, Tencent, Baidu, Byju’s

GEMWeekly (15 Sep 2023): China, India Macro Data; Alibaba, Tencent, Baidu, Byju’s

By Wium Malan, CFA

The Global Emerging Markets Weekly provides a summary of the key news and related developments impacting the largest countries and constituents of the Global Emerging Markets equity indices.
Macro data points: China inflation, industrial production, retail sales, and RRR cut; India industrial and manufacturing output.
Companies mentioned:Alibaba Group Holding (9988 HK), Tencent (700 HK), Baidu (9888 HK), BYJU’S (1391510D IN)

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Sep 17

Daily Brief ECM: Seoul Guarantee Insurance Corp IPO Valuation Analysis and more

By Smartkarma Daily Briefs | Daily Briefs, ECM

In today’s briefing:

Seoul Guarantee Insurance Corp IPO Valuation Analysis
ECM Weekly (17th Sep 2023) – ARM, VNG, Doosan, Tuhu, IMotion, Seibu Giken, RR Kabel, Viva, Innovent
CaiNiao & SF Holding Enjoy More Avenues to Growth Than “Plain Vanilla” Express Companies
Klaviyo IPO Preview and Valuation Analysis: A Fast-Growing Marketing Automation Unicorn

Seoul Guarantee Insurance Corp IPO Valuation Analysis

By Douglas Kim

Our base case valuation of Seoul Guarantee Insurance is target price of 48,052 won which is within the IPO price range of 39,500 won to 51,800 won.
Given the lack of upside relative to the IPO price range, we have a negative view of this deal.
We are not impressed with the company’s lack of top-line sales growth and worsening operating profit in 2023. The valuation range as proposed by the bankers is also not attractive.

ECM Weekly (17th Sep 2023) – ARM, VNG, Doosan, Tuhu, IMotion, Seibu Giken, RR Kabel, Viva, Innovent

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, ARM’s IPO seems to have set the ball rolling for the traditionally busy year end across the region.
In the placement space, finally a Hong Kong placement mangaed to hold up, even as a large Aussie one gave way.

CaiNiao & SF Holding Enjoy More Avenues to Growth Than “Plain Vanilla” Express Companies

By Daniel Hellberg

CaiNiao and JD Logistics have grown far faster than their parents’ platforms in recent years, and also far faster than “plain vanilla” Chinese express companies
CaiNiao, JD Logistics, and SF Holding enjoy more avenues to growth than just the continued gradual expansion of China’s domestic e-commerce activity
In the medium-term, we believe shares of market leader SF Holding can outperform a basket of shares from SF’s “plain vanilla” peers in express

Klaviyo IPO Preview and Valuation Analysis: A Fast-Growing Marketing Automation Unicorn

By Andrei Zakharov

Klaviyo, a Shopify-powered marketing automation platform provider for SMBs, mid-market, and B2B companies, filed to go public and plans to list on the New York Stock Exchange.
The fast-growing company was backed by Summit Partners, Shopify, and top-tier VC firms, including Accomplice, Accel, Sands Capital Ventures, Astral Capital, Cross Creek, and W Ventures.
Klaviyo is expected to IPO next week. S-1/A put the price range at $25-$27, implying a market cap of $6.5B at the midpoint, or $8.4B on a fully diluted basis.

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Sep 17

Daily Brief Event-Driven: Last Week in Event SPACE: Japan Post and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

Last Week in Event SPACE: Japan Post, Sun Hung Kai, LVS/Sands China, Kenedix REIT Complex, JFE
Quiddity Mainland Connect NORTHBOUND Flows (Week to 15Sep23) : Zhongzhi Innolight, BYD, and Amperex
Index Rebalance & ETF Flow Recap: HSCEI, HSTECH, CSI500, STAR50, FnGuide Top10
EQD | Volatility Update: Weekly Review of Vol Changes and Best Trades-Central Banks Decide
Quiddity Leaderboard ChiNext & ChiNext 50: A Potential Basket Trade
Quiddity Leaderboard CSI 300/500 Dec 23: US$2.8bn One-Way; Might Be Time for a Basket Trade
Quiddity Leaderboard SSE50/180 Dec 23: US$937mn One-Way; Some Changes to Expectations
Quiddity Leaderboard STAR 50 Dec 23: One ADD and One DEL; Ninebot Could Underperform AIMA
(Mostly) Asia-Pac Weekly Risk Arb Wrap: Origin, United Malt, T&K Toka, Golden Eagle Energy, JMDC
Quiddity HK Connect SOUTHBOUND Flows (Week to 15Sep23) Banks, Real Estate, Telcos, and Big ETF Sales

Last Week in Event SPACE: Japan Post, Sun Hung Kai, LVS/Sands China, Kenedix REIT Complex, JFE

By David Blennerhassett

The Japan Post Holdings (6178 JP)/ Japan Post Bank (7182 JP) ratio looks more attractive as JPB climbs with other banks as the possibility of Offering-induced retail overhang increases.
The ACCC has until 28 September 2023 to make its decision on Origin Energy (ORG AU). Expect ACCC to be supportive – they haven’t built a strong “against” case.
There should be more for the Kenedix REIT complex on a fundamental basis, a future equity capital raise accretion basis, and because of significant net buying for index purposes.

Quiddity Mainland Connect NORTHBOUND Flows (Week to 15Sep23) : Zhongzhi Innolight, BYD, and Amperex

This is the 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 data on liquid names is presented for 5 days and four weeks and anything seen can be ranked in tables or selected and charted (names, sectors, outperformance, etc).
We like the nifty interactive tables and charts and welcome feedback. This week saw RMB 15bn+ of net selling. That’s six weeks in a row of respectably large outflows.

Index Rebalance & ETF Flow Recap: HSCEI, HSTECH, CSI500, STAR50, FnGuide Top10

It was a busy Friday with a bunch of indices rebalancing at the close and big volumes trading on a lot of stocks.
Brilliance China Automotive (1114 HK) had a good week with the stock rallying on Thursday and Friday on huge volumes amid expectations of upcoming passive buying.
A quiet week for ETFs with mainland China ETFs seeing some outflows after the huge inflows over the last couple of months.

EQD | Volatility Update: Weekly Review of Vol Changes and Best Trades-Central Banks Decide

By Simon Harris

Weekly summary of vol changes and moves across Global Markets
Analysing ATM volatility and skew changes over the last 5 days
We suggest a few trades to take advantage of the implied vol surfaces

Quiddity Leaderboard ChiNext & ChiNext 50: A Potential Basket Trade

The ChiNext Index represents the performance of the 100 largest and most liquid A-share stocks listed on the ChiNext Market of the Shenzhen Stock Exchange.
The ChiNext 50 index is a subset of the ChiNext Index and it consists of the top 50 names in the ChiNext index with the highest daily average turnover.
In this insight, we take a look at the names leading the race to become ADDs and DELETEs in the December 2023 Rebalance.

Quiddity Leaderboard CSI 300/500 Dec 23: US$2.8bn One-Way; Might Be Time for a Basket Trade

CSI 300 represents the 300 largest stocks by market capitalization and liquidity from the entire universe of Shanghai and Shenzhen Stock Exchanges. CSI 500 represents the next largest 500 names.
In this insight, we take a look at the potential ADDs/DELs for the CSI 300 and CSI 500 rebalance in December 2023.
Our latest estimates show that the combined one-way flow for CSI 300 and CSI 500 could be around US$2.8bn.

Quiddity Leaderboard SSE50/180 Dec 23: US$937mn One-Way; Some Changes to Expectations

SSE 50 and SSE180, respectively, aim to represent the performance of the 50 and 180 largest and most liquid A-share stocks listed on Shanghai Stock Exchange.
In this insight, we take a look at our expectations for potential index changes for SSE 50 and SSE 180 during the December 2023 Rebalance event.
I currently expect 5 ADDs/DELETEs for the SSE 50 index 18 ADDs/DELs for the SSE 180 index. Some of these names are different from my previous expectations.

Quiddity Leaderboard STAR 50 Dec 23: One ADD and One DEL; Ninebot Could Underperform AIMA

STAR 50 Index is a tech-focused, blue-chip index in Mainland China which tracks the top 50 largest and most liquid names in the STAR market of the Shanghai Stock Exchange.
In this insight, we take a look at our expectations for potential ADDs and DELs for the STAR 50 index during the December 2023 Rebalance event.
I currently expect one ADD and one DEL for the STAR 50 index in December 2023.

(Mostly) Asia-Pac Weekly Risk Arb Wrap: Origin, United Malt, T&K Toka, Golden Eagle Energy, JMDC

By David Blennerhassett

I tally 50 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal.
Four new deals this week: Pact Group Holdings (PGH AU); Golden Eagle Energy (SMMT IJ); Takisawa Machine Tool (6121 JP); and JMDC (4483 JP).
Key updates took place for: Origin Energy (ORG AU), United Malt (UMG AU), Liontown Resources (LTR AU), Poly Culture (3636 HK), IMAX China Holding (1970 HK), and T&K Toka (4636 JP).

Quiddity HK Connect SOUTHBOUND Flows (Week to 15Sep23) Banks, Real Estate, Telcos, and Big ETF Sales