Category

Daily Briefs

Jul 08
0

Daily Brief Consumer: Delta Djakarta, Lululemon Athletica, Tokyo Stock Exchange Tokyo Price Index Topix and more

By | Consumer, Daily Briefs

In today’s briefing:

  • Delta Djakarta (DLTA IJ): Cheaper Higher Yield Option to Multi Bintang
  • Lululemon: Underestimated Is An Understatement
  • Although It Is Commendable that Voting Behavior of Some Domestic Institutional Investors Has Changed

Delta Djakarta (DLTA IJ): Cheaper Higher Yield Option to Multi Bintang

By Sameer Taneja

  • Delta Djakarta (DLTA IJ) is a cheaper small-cap option to play the recovery of tourism in Indonesia instead of Multi Bintang Indonesia (MLBI IJ) 
  • It’s 5Yr/10Yr average ROCE is 22%/29% lower than MLBI IJ due to the high net cash on the balance sheet, ~25% of the market capitalization.
  • Trading at 11x PE and 10% dividend yield on normalized earnings (Assuming a 110% payout ratio since the 5 Yr average is 120%), the stock is super cheap.

Lululemon: Underestimated Is An Understatement

By Pearl Gray Equity and Research

  • The company’s international sales growth is somewhat of a hidden asset, as the arena is underserved.
  • Lululemon’s regional brand exposure is expanding with new store openings.
  • The stock is theoretically undervalued, which is why the stock is undervalued.

Although It Is Commendable that Voting Behavior of Some Domestic Institutional Investors Has Changed

By Aki Matsumoto

  • It remains to be seen whether domestic institutional investors will support shareholder proposals on shareholder returns, which had low approval rate among domestic institutional investors at the previous year’s AGM.
  • If domestic institutional investors are voting in favor of shareholder proposals, it wouldn’t be surprising if more companies passed them. It’s doubtful that passive funds have the same voting practices.
  • There is concern about critical tone regarding the legally binding nature of the resolution of AGMs, which appears to come from companies feeling threatened by declining shareholdings by banks/business partners.

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Jul 08
0

Daily Brief Quantitative Analysis: Hong Kong Buybacks Weekly (Jul 7th): Tencent and more

By | Daily Briefs, Quantitative Analysis

In today’s briefing:

  • Hong Kong Buybacks Weekly (Jul 7th): Tencent, AIA, Kuaishou Technology

Hong Kong Buybacks Weekly (Jul 7th): Tencent, AIA, Kuaishou Technology

By Ke Yan, CFA, FRM

  • We analyze statistics on top repurchases over one week, one month, one quarter and one year periods ended on Jul 7th based on HKEx daily reports.
  • In the past 7 days, the top 3 companies that repurchased the most shares from the market were Tencent (700 HK), AIA (1299 HK), Kuaishou Technology (1024 HK).
  • In the past 30 days, the top 3 companies that repurchased the most shares from the market were Tencent (700 HK), AIA (1299 HK), CK Asset (1113 HK).

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Jul 08
0

Daily Brief ESG: Although It Is Commendable that Voting Behavior of Some Domestic Institutional Investors Has Changed and more

By | Daily Briefs, ESG

In today’s briefing:

  • Although It Is Commendable that Voting Behavior of Some Domestic Institutional Investors Has Changed

Although It Is Commendable that Voting Behavior of Some Domestic Institutional Investors Has Changed

By Aki Matsumoto

  • It remains to be seen whether domestic institutional investors will support shareholder proposals on shareholder returns, which had low approval rate among domestic institutional investors at the previous year’s AGM.
  • If domestic institutional investors are voting in favor of shareholder proposals, it wouldn’t be surprising if more companies passed them. It’s doubtful that passive funds have the same voting practices.
  • There is concern about critical tone regarding the legally binding nature of the resolution of AGMs, which appears to come from companies feeling threatened by declining shareholdings by banks/business partners.

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Jul 08
0

Daily Brief ECM: Black Sesame Pre-IPO: Earnings Show Strong Potential and more

By | Daily Briefs, ECM

In today’s briefing:

  • Black Sesame Pre-IPO: Earnings Show Strong Potential
  • RoboSense Technology: A Risky IPO As LiDAR Stocks Underperformed

Black Sesame Pre-IPO: Earnings Show Strong Potential

By Shifara Samsudeen, ACMA, CGMA

  • Chinese autonomous driving chip maker (SoCs) Black Sesame Technologies (BLACKSES HK) has filed for HKEx IPO and plans to raise around US$200m which will be spent on R&D and  commercialisation.
  • According to Frost & Sullivan, Black Sesame was ranked the third largest provider of automotive- grade high computing power SoCs, based on shipment in 2022.
  • The company is in early stages of commercialisation, and the top line has expanded significantly in 2022 with launch of SoCs in 2021. Black Sesame’s earnings show significant growth potential.

RoboSense Technology: A Risky IPO As LiDAR Stocks Underperformed

By Andrei Zakharov

  • RoboSense Technology, one of the leading providers of LiDAR sensor systems and AI perception software, filed for a Hong Kong IPO with J.P. Morgan and China Renaissance leading the offering.
  • RoboSense Technology is a high-growth mass producer of LiDAR products with mounting operating losses. The company is growing revenue in double digits and still has heavy losses.  
  • I believe RoboSense Technology IPO is risky due to the company’s high cash burn rate, fierce competition, pricing pressure and unhealthy fundamentals. Moreover, LiDAR stocks continue to underperform.

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Jul 08
0

Daily Brief Credit: Weekly Wrap – 07 Jul 2023 and more

By | Credit, Daily Briefs

In today’s briefing:

  • Weekly Wrap – 07 Jul 2023

Weekly Wrap – 07 Jul 2023

By Charles Macgregor

Lucror Analytics Weekly Wraps provide an overview of all Morning Views comments and reports published by our analyst team in the past week, and also showcase a list of the most-read reports.

In this Insight:

  1. Greentown China
  2. First Pacific Co
  3. Vedanta Resources
  4. China Jinmao Holdings
  5. Lifestyle International Holdings

and more…

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Jul 08
0

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

By | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

  • Japan Weekly | Kawasaki Kisen, Z Holdings, Rakuten, Uniqlo, Yaskawa
  • A Quasi Bank Run at MG Community Credit Cooperative – What’s Next?
  • SPAC Talk – SPACs and the EV Blow-Up
  • Mat-Chem Notes For the Week Ended June 30, 2023

Japan Weekly | Kawasaki Kisen, Z Holdings, Rakuten, Uniqlo, Yaskawa

By Mark Chadwick

  • Japanese stocks headed lower this week, tracking weaker US stocks. 
  • With a bout of profit-taking, we are also seeing some rotation out of high-valuation, strong momentum stocks into “cheap” laggards. 
  • Marine transportation stocks the big winners this week. Investors love those high dividends and low PBs

A Quasi Bank Run at MG Community Credit Cooperative – What’s Next?

By Douglas Kim

  • One of the biggest stories in the Korean economy in the past two days have been the quasi bank run at MG Community Credit Cooperative (MGCCC) (새마을금고).
  • The negative news about this has contributed to KOSPI falling two consecutive days (down 2% from July 5th to 7th). 
  • MGCCC’s delinquency rate jumped from 1.93% at the end of 2021 to 3.59% at the end of 2022 and 6.18% as of June 29th 2023.

SPAC Talk – SPACs and the EV Blow-Up

By Water Tower Research

  • As IBC deal cancellations continue to accelerate…. June brought 12 deal termination announcements, which happens to be the largest number of deal cancellations to occur in any one month ever.

  • Among the deal casualties in June is SPAC TKB Critical Technologies 1’s (USCT) proposed merger with already de-SPACed once WEJO.

  • This particular deal cancellation was always in the cards after the UK-based vehicle data provider filed for bankruptcy at the end of May.

Mat-Chem Notes For the Week Ended June 30, 2023

By Water Tower Research

  • WTR-CMI last week. In an up-week for the market, our WTR-CMI index of 30 chemical and material technology companies appreciated 4.8%, surpassing both the S&P 500 and Russell 2000 returns of 2.3% and 3.7%, respectively.

  • FUL’s 13.2% appreciation led our index, as the company delivered strong margins in 2QFY23 (May- 23) and provided solid EBITDA guidance for the year.

  • The stock was also helped by FUL’s announcement of two bolt- on acquisitions, Adhezion Biomedical, a privately held medical adhesives company, and XCHEM International, a UAE specialty adhesives manufacturer with a strong position in MENA. 

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Jul 08
0

Daily Brief Equity Bottom-Up: Delta Djakarta (DLTA IJ): Cheaper Higher Yield Option to Multi Bintang and more

By | Daily Briefs, Equity Bottom-Up

In today’s briefing:

  • Delta Djakarta (DLTA IJ): Cheaper Higher Yield Option to Multi Bintang
  • TOA Paint (Thailand) (TOA TB) – An Unfortunate Turn of Events
  • Eisai Co Ltd (4523 JP): Becomes the Best Alzheimer’s Disease Play After Full FDA Nod
  • Taishin – Monthly Profit Surge at +253% in May Suggests Strong Quarterly Numbers
  • Bangladesh Stock Picks | Quarterly Updates | OLYMPI, SQTT, BPML
  • Lululemon: Underestimated Is An Understatement
  • Amazon: Monetary Conditions Are In The Driver’s Seat And Higher Margins Are Already Priced-In

Delta Djakarta (DLTA IJ): Cheaper Higher Yield Option to Multi Bintang

By Sameer Taneja

  • Delta Djakarta (DLTA IJ) is a cheaper small-cap option to play the recovery of tourism in Indonesia instead of Multi Bintang Indonesia (MLBI IJ) 
  • It’s 5Yr/10Yr average ROCE is 22%/29% lower than MLBI IJ due to the high net cash on the balance sheet, ~25% of the market capitalization.
  • Trading at 11x PE and 10% dividend yield on normalized earnings (Assuming a 110% payout ratio since the 5 Yr average is 120%), the stock is super cheap.

TOA Paint (Thailand) (TOA TB) – An Unfortunate Turn of Events

By Angus Mackintosh

  • TOA Paint is Thailand’s leading decorative paints player with a 48% market share and a good track record but it has become caught up by association with STARK Corporation.
  • This looks like a guilt by association sell down given there are no visible business connections between STARK and TOA Paint but the eldest son of the family controls Stark.
  • The second son of the Patriarch is CEO of TOA Paint, which is otherwise enjoying a strong recovery in demand plus lower input costs. Valuations have declined to attractive levels. 

Eisai Co Ltd (4523 JP): Becomes the Best Alzheimer’s Disease Play After Full FDA Nod

By Tina Banerjee

  • Eisai Co Ltd (4523 JP) has received FDA traditional approval for Leqembi injection for the treatment of Alzheimer’s Disease. Following the approval, CMS confirmed broader Medicare coverage for Leqembi.
  • Leqembi is the first and only approved treatment shown to reduce the rate of disease progression and to slow cognitive and functional decline in adults with Alzheimer’s Disease.
  • Eisai pegged peak sales of Leqembi at $7.3 billion in 2030. The projection is based on the company’s estimate that about 2.5M people will be eligible for treatment by 2030.

Taishin – Monthly Profit Surge at +253% in May Suggests Strong Quarterly Numbers

By Daniel Tabbush

  • The monthly profit figures at Taishin are rising substantially, suggesting a strong 2Q23
  • Taishin’s LDR had declined dramatically in 1Q23, monthly figures may suggest expansion
  • With declining credit costs, to match lower NPLs, the outlook for Taishin’s profit is strong

Bangladesh Stock Picks | Quarterly Updates | OLYMPI, SQTT, BPML

By Pranav Bhavsar

  • Olympic Industries (OLYMPI BD)  experienced weak 3Q earnings due to moderated growth, contraction of margins, and the impact of high inflation.
  • Square Textiles (SQTT BD) recorded weak 3Q numbers due to factors such as a decline in yarn production, increased energy costs, and decreased yarn prices in the international market.
  • Bashundhara Paper Mills (BPML BD)  delivered strong 3Q earnings driven by increased sales, leading to improved profitability.

Lululemon: Underestimated Is An Understatement

By Pearl Gray Equity and Research

  • The company’s international sales growth is somewhat of a hidden asset, as the arena is underserved.
  • Lululemon’s regional brand exposure is expanding with new store openings.
  • The stock is theoretically undervalued, which is why the stock is undervalued.

Amazon: Monetary Conditions Are In The Driver’s Seat And Higher Margins Are Already Priced-In

By Vladimir Dimitrov, CFA

  • Amazon has significantly underperformed the broader equity market, in spite of the recent rally.
  • The narrative for generative AI is strong, but the share price is currently driven by other factors.
  • Margin improvements are being priced-in, which significantly limits any potential upside, without monetary conditions becoming supportive.

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Jul 08
0

Daily Brief Macro: The Weekly Market Monitor (27) – Will the Bull Survive? and more

By | Daily Briefs, Macro

In today’s briefing:

  • The Weekly Market Monitor (27) – Will the Bull Survive?
  • CX Daily: Historic China Heat Wave Takes Toll on Lives and Crops
  • AFC Iraq Fund June 2023 Update: “Construction Activity and Stability”
  • Capital Gearing Trust Interview
  • TPW Advisory Friday Musings: Digestion Time

The Weekly Market Monitor (27) – Will the Bull Survive?

By Jeroen Blokland

  • Our Fear & Frenzy Sentiment Index has moved into Frenzy territory aggressively, suggesting a pullback in equity markets is upon us.
  • Based on the historical relationship between the ISM Manufacturing and the S&P 500 Index, the latest drop to 46 suggests an index level of 3,400.
  • This week, we highlight the chart showing the change in the number of bankruptcies and the spread on US high-yield bonds. Where did spreads go?

CX Daily: Historic China Heat Wave Takes Toll on Lives and Crops

By Caixin Global

  • Heat wave /: Historic China heat wave takes toll on lives and crops
  • Hong Kong /: Hong Kong may lower the bar for top talent visas
  • Funds /Chart of the Day: Chinese mutual funds reap rewards from AI, offshore investments

AFC Iraq Fund June 2023 Update: “Construction Activity and Stability”

By Asia Frontier Capital

  • The AFC Iraq Fund, and the market, rebounded strongly in June.
  • The AFC Iraq Fund was up 5.8%, outperforming its benchmark, the Rabee Securities RSISX USD Index, which was up 4.4%.
  • For the year, the AFC Iraq Fund is up 38.6%, outperforming its benchmark’s 30.4% increase.

Capital Gearing Trust Interview

By ByteTree Asset Management

  • In theory, government bonds are risk-free because they pay an income guaranteed by the government, but that doesn’t mean that prices can’t be volatile, as markets showed last year.
  • To demonstrate this, I show the synthetic prices of UK Government bonds, known as Gilts, since 1990.
  • The 2-year bond is relatively stable, with low “duration”, while the 30-year bond is a beast, with high duration. 

TPW Advisory Friday Musings: Digestion Time

By TPW Advisory

  • There have been big moves a plenty in the 1st H of the year with Nasdaq having one of its best 1st Half’s ever, Japan & Brazil both gaining nearly 20% last Q while several of our favored Cyclical sectors enjoyed double digit gains last month.
  • Elsewhere, Global Sov bond yields have risen back to levels last seen in 2008 while record breaking Mexican Peso strength & Yen weakness finally reversed a bit.
  • Here’s one for the books – Brent crude oil has now declined for four quarters in a row, the longest such stretch in 35 years! We like energy for the 2ndH.

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Jul 08
0

Most Read: Socionext, Li Auto, S.F. Holding, BeiGene Ltd, Samsung Heavy Industries Pref, Hyundai Green Food, LG Uplus Corp and more

By | Daily Briefs, Most Read

In today’s briefing:

  • Socionext (6526 JP) – Pre-IPO Lockup Expiry Offering Will Double Real World Float
  • Hang Seng Index Rebalance Preview: 80 Member Target Achieved; What Next?
  • Socionext Placement – A US$1.8bn Cleanup, Will Have to Give up Some of Its 6x Listing Gains
  • HSCEI Index Rebalance Preview: Deletions Fairly Certain; Uncertainty Among the Adds
  • SF Holdings A/H Listing – Early Look – Front Running
  • Quiddity Leaderboard for Hang Seng Index Sep 23: Beigene Vs Peers An Interesting Trade
  • Delisting of 5 Korean Preferred Stocks on 17 July
  • Hyundai G.F. Holdings’ Stock Swap with Hyundai Green Food & Hyundai Dept Store
  • The Rise of the Fourth Telco in Korea – Breaking the Oligopoly
  • Hong Kong Buybacks Weekly (Jul 7th): Tencent, AIA, Kuaishou Technology

Socionext (6526 JP) – Pre-IPO Lockup Expiry Offering Will Double Real World Float

By Travis Lundy

  • Today after the close, SoC and market darling Socionext (6526 JP) announced that DBJ, Fujitsu, and Panasonic would offer the remaining shares they in a US$1.8bn secondary offering.
  • Pshaw…. that’s only 2.5 days of 20-day ADV… Not a lot. But in fact, that is a LOT of stock. 
  • I harp on understanding shareholder structure. I think it worthwhile. Here it matters too.

Hang Seng Index Rebalance Preview: 80 Member Target Achieved; What Next?

By Brian Freitas

  • We finally got to 80 Hang Seng Index constituents in June. Now comes the next step of moving up to 100 index constituents though there is no timeline for completion.
  • The conclusions of the market consultation on the inclusion of foreign stocks in the Hang Seng Index should be announced soon though implementation could start only in December.
  • We highlight 10 potential inclusions to the index with passive trading impact varying from 1.5-5.6 days of ADV. There are large shorts on some of the stocks.

Socionext Placement – A US$1.8bn Cleanup, Will Have to Give up Some of Its 6x Listing Gains

By Sumeet Singh

  • Three shareholders of Socionext (6526 JP) aim to raise around US$1.8bn via selling all of their shares in Socionext.
  • Socionext was listed on 12th Oct 2022, when it raised US$457m in its upsized Japan IPO. Its six-month lockup expired in Apr 2023. Its shares are up 6x since listing.
  • In this note, we talk about the deal dynamics and run the deal through our ECM framework.

HSCEI Index Rebalance Preview: Deletions Fairly Certain; Uncertainty Among the Adds

By Brian Freitas

SF Holdings A/H Listing – Early Look – Front Running

By Sumeet Singh

  • S.F. Holding (002352 CH) (SFH), China’s largest express delivery company, aims to raise around US$2-3bn in its H-share listing in Hong Kong.
  • SFH is the largest integrated express logistics service provider in China and the fourth largest in the world. It has been listed on the Shenzhen Stock Exchange since 2017
  • In this note, we look at its past performance and other deal dynamics that might impact the listing.

Quiddity Leaderboard for Hang Seng Index Sep 23: Beigene Vs Peers An Interesting Trade

By Janaghan Jeyakumar, CFA

  • In this insight, we take a look at some of the names with high likelihood of being involved in index changes for the Hang Seng Index in September 2023.
  • The index changes for the September 2023 rebalance could be announced in mid-August and implemented in early-September.
  • Although the index methodology is highly subjective and predicting index changes is extremely tricky, the HSI is an important index in the region and here are our thoughts for September. 

Delisting of 5 Korean Preferred Stocks on 17 July

By Douglas Kim

  • The Korea Exchange officially announced today that the following five preferred stocks will be delisted on 17 July.
  • These five stocks including Samsung Heavy Industries Pref, SK Networks Pref,  DB Hitek Pref, Hyundai BNG Steel Pref, and Heungkuk Fire & Marine Insurance Pref 2B fell sharply today.   
  • Despite the warning by the Korea Exchange since end of May, it was not until today that these five stocks dropped sharply. On average, these five stocks fell 44% today. 

Hyundai G.F. Holdings’ Stock Swap with Hyundai Green Food & Hyundai Dept Store

By Sanghyun Park

  • Hyundai G.F. Holdings will conduct a tender offer to Hyundai Green Food and Hyundai Dept Store shareholders. The tendering period is August 11-September 1.
  • The target volume is 10,125,700 (Hyundai Green Food) and 4,669,556 (Hyundai Dept Store), corresponding to 29.89% and 19.95% of the outstanding shares, respectively.
  • We should approach this event trading with caution, taking into account the risk of an unhedged setup while monitoring the potential widening of the spread opening during the tendering period.

The Rise of the Fourth Telco in Korea – Breaking the Oligopoly

By Douglas Kim

  • The Korean government announced today that it will allow a fourth telco in Korea in order to reduce the oligopoly structure dominated by the three existing telcos.
  • This decision to allow another telco in Korea will have a major negative impact on the existing three telcos in Korea.
  • On a relative basis, we think that this could have a worse impact than LG Uplus as compared to SK Telecom due to greater price sensitivity of LG Uplus’ customers.

Hong Kong Buybacks Weekly (Jul 7th): Tencent, AIA, Kuaishou Technology

By Ke Yan, CFA, FRM

  • We analyze statistics on top repurchases over one week, one month, one quarter and one year periods ended on Jul 7th based on HKEx daily reports.
  • In the past 7 days, the top 3 companies that repurchased the most shares from the market were Tencent (700 HK), AIA (1299 HK), Kuaishou Technology (1024 HK).
  • In the past 30 days, the top 3 companies that repurchased the most shares from the market were Tencent (700 HK), AIA (1299 HK), CK Asset (1113 HK).

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Jul 07
0

Daily Brief India: Bank Of Baroda and more

By | Daily Briefs, India

In today’s briefing:

  • Bank of Baroda (BOB IN) – A Diamond in the Rough, on the Sidelines of the HDFC Bank-HDFC Merger

Bank of Baroda (BOB IN) – A Diamond in the Rough, on the Sidelines of the HDFC Bank-HDFC Merger

By Victor Galliano

  • The investor spotlight is on the HDFC Bank-HDFC merger, and we continue to favour HDFC Bank with its positive passive investor momentum, premium returns and merger synergy potential
  • Bank of Baroda, although not in the limelight like HDFC bank, is our value stand-out among the Indian bank peer group and it warrants increasing investor attention, in our view
  • Bank of Baroda is delivering on improving asset quality and returns; the shares have positive momentum, and we see great value on its 1x PBV ratio to ROE of 15%

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