Category

Daily Briefs

Sep 04
0

Daily Brief Industrials: Wisdom Marine Lines and more

By | Daily Briefs, Industrials

In today’s briefing:

  • Yuanta ETFs Rebalance: AI-Frenzy Means Tech Replaces Industrials; Shorts Surge; Big Positioning
  • Quiddity TDIV/​50/​100 Sep 23 Rebal: ALL 15 Changes Expected; US$420mn One-Way

Yuanta ETFs Rebalance: AI-Frenzy Means Tech Replaces Industrials; Shorts Surge; Big Positioning

By Brian Freitas

  • There are 4 changes to the Yuanta/​P-Shares Taiwan Top 50 ETF and 1 deletion for the Yuanta/​P-Shares Taiwan Dividend Plus ETF in September.
  • The impact on the inclusions is larger in terms of flow but smaller in terms of days to ADV to buy. Shorts are higher on the deletions.
  • There appears to be big positioning on a lot of the stocks. But the ETF adds could move higher in the short-term on short covering.

Quiddity TDIV/​50/​100 Sep 23 Rebal: ALL 15 Changes Expected; US$420mn One-Way

By Janaghan Jeyakumar, CFA

  • The September 2023 index changes for the TDIV, T50, and T100 Indices were confirmed after the close on Friday 1st September 2023.
  • In this insight, we take a look at our final flow expectations for these index changes and the capping flow expectations for the TDIV index.
  • There could US$420mn one-way flows across these three indices during this rebalance event.

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Sep 04
0

Daily Brief Financials: Korea Stock Exchange KOSPI 200, KE Holdings , Investor AB and more

By | Daily Briefs, Financials

In today’s briefing:

  • EQD | KOSPI 200 Index Approaching Resistance
  • [KE (BEKE US, BUY, TP US$24) TP Change]: Silver Lining Appear in Industry Cycle, Maintain BUY
  • Selected European HoldCos and DLC: August’23 Report

EQD | KOSPI 200 Index Approaching Resistance

By Nico Rosti

  • The KOSPI 200 INDEX last week started to rally, so we want to look at WEEKLY resistance levels to evaluate where the current rally could end.
  • MRM Resistance Levels where the rally could stop are: 339, 348, 356.
  • Based on the current MRM pattern reading we expect the index to either roll down this week, or to rally for +2 more weeks (CC=+4) and then go down.

[KE (BEKE US, BUY, TP US$24) TP Change]: Silver Lining Appear in Industry Cycle, Maintain BUY

By Shawn Yang

  • KE Holdings (Beike) reported 2Q23 GTV 5.6% lower than our estimate, revenue (2.6%)/0.4% vs. our estimate/consensus, and non-GAAP NI 21.8%/42.9% higher than our estimate/consensus. 
  • We think 3Q23 is the trough and expect a rebound in 4Q23 as more substantial supportive policies laying out in China. 
  • We maintain the stock as BUY rating and raised TP by US$2 to US$24/ADS

Selected European HoldCos and DLC: August’23 Report

By Jesus Rodriguez Aguilar

  • The discounts to NAV of covered holdcos have not shown a clear pattern during August, some widened while others tightened. Discounts to NAV: C.F.Alba, 46.6% (vs. 47.5%); GBL, 36.2% (vs. 39.1%); 
  • Heineken Holding, 17.9% (vs.16.4%);  Industrivärden C, 7.8% (vs. 6.6%); Investor B, 16.6% (vs. 15%); Porsche Automobile Holding, 41.5% (vs. 43.8%). The spread of Rio Tinto DLC tightened to 17.8% (vs. 19%).
  • What seems interesting: holding trades, Investor B vs. listed assets, Porsche SE/vs. listed assets and the Rio DLC, long RIO LN/short RIO AU.

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Sep 04
0

Daily Brief Health Care: Eoflow , Lunit , LianBio, Aier Eye Hospital Group and more

By | Daily Briefs, Healthcare

In today’s briefing:

  • Merger Arb Mondays (04 Sep) – Eoflow, JSR, Seiko PMC, ENM, NWS, Costa, Symbio, Origin
  • KOSDAQ150 Index Rebalance Preview: Strong Momentum Leads to Outperformance
  • LianBio (LIAN.US) – Some Points Worth the Attention
  • Aier Eye Hospital Group (300015.CH) 23H1 – Time to Face the Gap Between Ideal and Reality

Merger Arb Mondays (04 Sep) – Eoflow, JSR, Seiko PMC, ENM, NWS, Costa, Symbio, Origin

By Arun George

KOSDAQ150 Index Rebalance Preview: Strong Momentum Leads to Outperformance

By Brian Freitas

  • Over two-thirds of the way through the review period, we see 14 potential changes for the KOSDAQ 150 Index (KOSDQ150 INDEX) at the December rebalance.
  • There could be index changes even before the December rebalance if there are delistings and stocks migrate from the KOSDAQ Market to the KOSPI Market.
  • Momentum in Korea has been strong. The potential adds have outperformed the potential deletes over the last few months and there could be further outperformance.

LianBio (LIAN.US) – Some Points Worth the Attention

By Xinyao (Criss) Wang

  • Mavacamten is expected to be LianBio’s first commercialized product. Due to low diagnostic rate/doctors’ insufficient cognition of HCM, whether it can become a blockbuster drug in China is still uncertain.
  • There’s an “insurmountable obstacle” to license-in model, and its “fault-tolerant space” is small. LianBio has to go all the way to the end.Otherwise, the license-in projects will eventually become worthless.
  • Due to high cost rate, it’s difficult for LianBio to make profit even with large drug sales. Although pipeline is good, LianBio could still fail to bring investors good returns.

Aier Eye Hospital Group (300015.CH) 23H1 – Time to Face the Gap Between Ideal and Reality

By Xinyao (Criss) Wang

  • Aier’s revenue would be up 20%+ YoY in 2023, but one risk is the slowing growth rate of refractive/other consumption upgrading projects in the context of sluggish consumption in 23H2.
  • The positive impact of aging on performance would not be able to hedge against the negative impact of declining birth rate, ultimately leading to a decline in overall performance growth.
  • When Aier’s external expansion model fails and endogenous growth is lower-than-expectation, we suggest that Aier increase dividends/stock buybacks instead of ineffective expansion. This would make Aier more attractive to investors.

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Sep 04
0

Daily Brief Consumer: Ferrari N.V., Great Wall Motor, SHEIN, Tokyo Stock Exchange Tokyo Price Index Topix and more

By | Consumer, Daily Briefs

In today’s briefing:

  • Quiddity ES50 Sep 23 Rebal: Ferrari/Vonovia Change Confirmed + Another US$2bn+ Flow Surprise!
  • Quiddity A/H Premium Weekly (Sep 1): China Life, Wide Premia Industrials, Banks Starting To Move
  • Why Is SHEIN Getting Into Bed with Forever 21? | Plus, More Legal and Political Challenges in US
  • Since It Is Unclear Whether Director Nomination Process Is Working, Voting Becomes More Important

Quiddity ES50 Sep 23 Rebal: Ferrari/Vonovia Change Confirmed + Another US$2bn+ Flow Surprise!

By Janaghan Jeyakumar, CFA

  • The September 2023 index changes for the ES50 index was confirmed after the close on Friday 1st September 2023.
  • There will be two ADDs and two DELETEs. One set of changes was well anticipated by us. The other set comes as a major surprise to us.
  • Collectively, the two ADDs could see ~US$2.4bn index flows and the two DELs could see ~US$2.9bn index flows, with US$500mm of reverse funding flows.

Quiddity A/H Premium Weekly (Sep 1): China Life, Wide Premia Industrials, Banks Starting To Move

By Travis Lundy

  • The Brand-Spanking New (three weeks old) A-H Monitor has tables, charts, measures galore. 
  • Last week was slightly disappointing but the Recommendations Outperformed the universe.
  • New stimulus measures are partly supply side, and a little bit demand side, but they’re not big enough yet to move the needle. Mainland ETF buying smells like National Team.

Why Is SHEIN Getting Into Bed with Forever 21? | Plus, More Legal and Political Challenges in US

By Daniel Hellberg

  • In this insight we analyze the drivers of a new relationship between SHEIN and Forever 21
  • We think SHEIN agreed to the deal in part to become more “mainstream” in the US
  • We also believe SHEIN takes seriously the legal and political risks it faces ahead of US IPO

Since It Is Unclear Whether Director Nomination Process Is Working, Voting Becomes More Important

By Aki Matsumoto

  • While it’s commendable that increasing numbers of companies are publishing skill matrices, there is not enough verification that the skill items are useful in expanding the value of the company.
  • It is a prerequisite that the process of selecting skill items and the nominating committee that governs it are functioning and independent.
  • Even if a governance framework and tools such as the skills matrix are introduced, whether they actually function depends largely on the quality of management.

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Sep 04
0

Daily Brief Quantitative Analysis: A-H Premium Weekly (Sep 1st):Zhejiang Shiba and more

By | Daily Briefs, Quantitative Analysis

In today’s briefing:

  • A-H Premium Weekly (Sep 1st):Zhejiang Shiba, Cansino Biolog, Nanjing Panda, China Railway
  • Hong Kong Connect Flows (Sep 1st): Meituan, Xpeng, CNOOC, HKEx, Kuaishou Technology
  • Northbound Flows (Sep 1st): BYD, CATL, Wuliangye, Citic Securities, Ping An Bank, Moutai

A-H Premium Weekly (Sep 1st):Zhejiang Shiba, Cansino Biolog, Nanjing Panda, China Railway

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 119.3% as of Sep 1st.
  • The average A-H premium changed by 2.6ppt week on week, led by information technology, consumer discretionary, health care and offset by financials, utilities.
  • We highlight weekly changes in A-H premium for Zhejiang Shiba, Cansino Biolog, Nanjing Panda, China Railway, Hua Hong Semi and Cc Securities.

Hong Kong Connect Flows (Sep 1st): Meituan, Xpeng, CNOOC, HKEx, Kuaishou Technology

By Ke Yan, CFA, FRM

  • We analyze the weekly Hong Kong Connect flows with our data engine for holding position as of September 1st.
  • 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, Xpeng, CNOOC, HKEx, Kuaishou Technology.

Northbound Flows (Sep 1st): BYD, CATL, Wuliangye, Citic Securities, Ping An Bank, Moutai

By Ke Yan, CFA, FRM

  • We analyze the weekly Shanghai/Shenzhen northbound Connect flows with our data engine for holding position as of September 1st.
  • We estimate the weekly outflows to be US$2,251.0 million, led by financials, consumer staples, and offset by consumer discretionary, information technology, health care.
  • We highlight flows for BYD, CATL, Wuliangye, Citic Securities, Ping An Bank, Moutai, East Money Information, Haitian Flavouring.

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Sep 04
0

Daily Brief ESG: Since It Is Unclear Whether Director Nomination Process Is Working and more

By | Daily Briefs, ESG

In today’s briefing:

  • Since It Is Unclear Whether Director Nomination Process Is Working, Voting Becomes More Important

Since It Is Unclear Whether Director Nomination Process Is Working, Voting Becomes More Important

By Aki Matsumoto

  • While it’s commendable that increasing numbers of companies are publishing skill matrices, there is not enough verification that the skill items are useful in expanding the value of the company.
  • It is a prerequisite that the process of selecting skill items and the nominating committee that governs it are functioning and independent.
  • Even if a governance framework and tools such as the skills matrix are introduced, whether they actually function depends largely on the quality of management.

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Sep 04
0

Daily Brief ECM: Why Is SHEIN Getting Into Bed with Forever 21? | Plus and more

By | Daily Briefs, ECM

In today’s briefing:

  • Why Is SHEIN Getting Into Bed with Forever 21? | Plus, More Legal and Political Challenges in US

Why Is SHEIN Getting Into Bed with Forever 21? | Plus, More Legal and Political Challenges in US

By Daniel Hellberg

  • In this insight we analyze the drivers of a new relationship between SHEIN and Forever 21
  • We think SHEIN agreed to the deal in part to become more “mainstream” in the US
  • We also believe SHEIN takes seriously the legal and political risks it faces ahead of US IPO

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Sep 04
0

Daily Brief Thematic (Sector/Industry): Japan Weekly | Kubota and more

By | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

  • Japan Weekly | Kubota, Hitachi Construction, Ain
  • Ohayo Japan|US Stocks Cap Strong Week; JAPAN X: Daikin, Melco to Benefit from US Heat Pump Growth
  • [Blue Lotus Hardware Sector Update]: Huawei Mate 60 Is a Win-Win for Both US and China

Japan Weekly | Kubota, Hitachi Construction, Ain

By Mark Chadwick

  • Japanese stocks had a good week with Topix up +3.68% and +24.21% year-to-date
  • Japanese exporters are seeing better pricing power in key overseas markets – the weak yen is an additional tailwind
  • Weakness in the Chinese economy is impacting stocks that benefit from a strong Chinese consumer and inbound tourism

Ohayo Japan|US Stocks Cap Strong Week; JAPAN X: Daikin, Melco to Benefit from US Heat Pump Growth

By Mark Chadwick

  • OVERSEAS: US Stock Cap strong week with positive gains; Payrolls jumped, but so did Unemployment rate=past peak rates ?  China slowdown fueling worries about Contagion.
  • JAPAN: NKY Futures +0.2% vs Cash; USDJPY 146.2; Japan Govt to Shorten Assessment Period for Off-Shore Wind; Japan-UK to cooperate in next Gen nuclear plants; ARM Pricing ~50 billion USD.
  • JAPAN X: Daikin and Mitsubishi Electric Poised to Benefit from US Heat Pump Growth.

[Blue Lotus Hardware Sector Update]: Huawei Mate 60 Is a Win-Win for Both US and China

By Shawn Yang

  • From what we understand, the Kirin 9000s that powers Huawei’s new 5G phone is the same 9000 that launched in 2020, only refitted from TSMC’s 5nm to SMIC’s 7nm. 
  • The good news is capacity will likely reach 50-60mn a year, or 17% of China’s smartphone volume in 2022;
  • Huawei’s launch of 5G does speak volumes about the strides China’s semiconductor supply chain has made, but its timing also takes advantage of the defusing of geopolitical tensions.

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Sep 04
0

Daily Brief Credit: Morning Views Asia: O-Net Technologies (Group) and more

By | Credit, Daily Briefs

In today’s briefing:

  • Morning Views Asia: O-Net Technologies (Group)

Morning Views Asia: O-Net Technologies (Group)

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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Sep 04
0

Daily Brief Event-Driven: Carlyle Group Tender Offer for Seiko PMC (4963) At 89% Premium and more

By | Daily Briefs, Event-Driven

In today’s briefing:

  • Carlyle Group Tender Offer for Seiko PMC (4963) At 89% Premium
  • S&P/​​​​ASX Index Rebalance (Sep 2023): Mostly Expected with a Few Surprises
  • Yuanta ETFs Rebalance: AI-Frenzy Means Tech Replaces Industrials; Shorts Surge; Big Positioning
  • China ETFs: Inflows Continue to Support the Market
  • MVIS Global Rare Earth/​​​​​​​​​Strategic Metals Index Rebalance Preview: Review Period Complete
  • Quiddity ES50 Sep 23 Rebal: Ferrari/Vonovia Change Confirmed + Another US$2bn+ Flow Surprise!
  • Quiddity TDIV/​50/​100 Sep 23 Rebal: ALL 15 Changes Expected; US$420mn One-Way
  • Merger Arb Mondays (04 Sep) – Eoflow, JSR, Seiko PMC, ENM, NWS, Costa, Symbio, Origin
  • Quiddity A/H Premium Weekly (Sep 1): China Life, Wide Premia Industrials, Banks Starting To Move
  • Seiko PMC (4963 JP): Carlyle’s JPY1,070 Tender Offer

Carlyle Group Tender Offer for Seiko PMC (4963) At 89% Premium

By Travis Lundy

  • Carlyle Group is buying Seiko Pmc Corp (4963 JP) from 54+% owner Dic Corp (4631 JP) and minorities in a Tender Offer with optical premium of 89%. 
  • It looks good, takes advantage of tax code particularities, and the nature of the company disguises some value. Shareholder structure means this is basically a done deal before it starts.
  • With minimal foreign active investor ownership, and significant crossholder, ESOP, and director ownership, only a bit of retail actually needs to tender to make this successful.

S&P/​​​​ASX Index Rebalance (Sep 2023): Mostly Expected with a Few Surprises

By Brian Freitas

  • There is 1 change for the S&P/ASX100 Index, 5 adds/ 6 deletes for the S&P/ASX 200 INDEX, and 10 adds/ 8 deletes for the S&P/ASX300 Index at the September rebalance.
  • There will be 4-14 days of ADV to trade on the S&P/ASX100 Index and S&P/ASX 200 INDEX adds while the impact on the deletions is between 3-12 days of ADV.
  • On average, the adds to the S&P/ASX 200 (AS51 INDEX) and S&P/ASX 300 Index have outperformed the deletes over the last few months.

Yuanta ETFs Rebalance: AI-Frenzy Means Tech Replaces Industrials; Shorts Surge; Big Positioning

By Brian Freitas

  • There are 4 changes to the Yuanta/​P-Shares Taiwan Top 50 ETF and 1 deletion for the Yuanta/​P-Shares Taiwan Dividend Plus ETF in September.
  • The impact on the inclusions is larger in terms of flow but smaller in terms of days to ADV to buy. Shorts are higher on the deletions.
  • There appears to be big positioning on a lot of the stocks. But the ETF adds could move higher in the short-term on short covering.

China ETFs: Inflows Continue to Support the Market

By Brian Freitas

  • Money continues to flow into mainland China ETFs taking the total inflows since 18 July to over US$25bn. This has likely helped stabilise the market and prevent a bigger fall.
  • The inflows continue to be largest on ETFs tracking headline indices – CSI 300, STAR50, CSI1000, CSI 500, SSE50, ChiNext. Plus there are inflows on some sectoral and thematic ETFs.
  • The skew between stocks gaining 20%+ over the period vs those dropping -20% or more has improved significantly over the last week.

MVIS Global Rare Earth/​​​​​​​​​Strategic Metals Index Rebalance Preview: Review Period Complete

By Brian Freitas

  • The review period for the MVIS Global Rare Earth/Strategic Metals Index ended 31 August. The changes will be announced on 8 September and implemented at the close on 15 September.
  • Coming in around the 85% cutoff, Rising Nonferrous Metals Share (600259 CH) is a potential inclusion. There are two stocks that are very close to the 98% deletion threshold.
  • Lake Resources Nl (LKE AU) is a deletion from the S&P/ASX 200 (AS51 INDEX) at the September rebalance and there could be more to sell if deleted from this index.

Quiddity ES50 Sep 23 Rebal: Ferrari/Vonovia Change Confirmed + Another US$2bn+ Flow Surprise!

By Janaghan Jeyakumar, CFA

  • The September 2023 index changes for the ES50 index was confirmed after the close on Friday 1st September 2023.
  • There will be two ADDs and two DELETEs. One set of changes was well anticipated by us. The other set comes as a major surprise to us.
  • Collectively, the two ADDs could see ~US$2.4bn index flows and the two DELs could see ~US$2.9bn index flows, with US$500mm of reverse funding flows.

Quiddity TDIV/​50/​100 Sep 23 Rebal: ALL 15 Changes Expected; US$420mn One-Way

By Janaghan Jeyakumar, CFA

  • The September 2023 index changes for the TDIV, T50, and T100 Indices were confirmed after the close on Friday 1st September 2023.
  • In this insight, we take a look at our final flow expectations for these index changes and the capping flow expectations for the TDIV index.
  • There could US$420mn one-way flows across these three indices during this rebalance event.

Merger Arb Mondays (04 Sep) – Eoflow, JSR, Seiko PMC, ENM, NWS, Costa, Symbio, Origin

By Arun George

Quiddity A/H Premium Weekly (Sep 1): China Life, Wide Premia Industrials, Banks Starting To Move

By Travis Lundy

  • The Brand-Spanking New (three weeks old) A-H Monitor has tables, charts, measures galore. 
  • Last week was slightly disappointing but the Recommendations Outperformed the universe.
  • New stimulus measures are partly supply side, and a little bit demand side, but they’re not big enough yet to move the needle. Mainland ETF buying smells like National Team.

Seiko PMC (4963 JP): Carlyle’s JPY1,070 Tender Offer

By Arun George

  • Seiko Pmc Corp (4963 JP) has recommended Carlyle Group / (CG US)’s tender offer of JPY1,070 per share, an 88.7% premium to the undisturbed price.
  • Dic Corp (4631 JP) will not tender but vote for the share consolidation at the EGM. Post consolidation, DIC will sell its 54.51% stake to Carlyle at JPY799 per share.
  • Achieving the minimum ownership ratio (12.16%) requires a 26.7% acceptance rate, which is doable as the offer is attractive. The tender offer runs from 4 September to 17 October. 

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