Category

Daily Briefs

Jul 07
0

Most Read: Socionext, Yachiyo Industry, Samsung Heavy Industries Pref, BeiGene Ltd, Rakuten Group , JSW Steel Ltd, Tryt Inc, Hyundai Green Food and more

By | Daily Briefs, Most Read

In today’s briefing:

  • Socionext (6526 JP) – Pre-IPO Lockup Expiry Offering Will Double Real World Float
  • Socionext Placement – A US$1.8bn Cleanup, Will Have to Give up Some of Its 6x Listing Gains
  • Socionext (6526 JP): US$1.9bn Secondary Placement
  • And Now For Something Truly Offensive – Honda Pays <0.5x Book for Yachiyo
  • Delisting of 5 Korean Preferred Stocks on 17 July
  • Quiddity Leaderboard for Hang Seng Index Sep 23: Beigene Vs Peers An Interesting Trade
  • Rakuten Securities IPO: Promising Business with Valuation Caveats
  • SENSEX Ad Hoc Rebalance: JSW Steel Replaces HDFC
  • TRYT IPO: Revised IPO Price Range Remains Unattractive
  • Hyundai G.F. Holdings’ Stock Swap with Hyundai Green Food & Hyundai Dept Store

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.

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.

Socionext (6526 JP): US$1.9bn Secondary Placement

By Arun George

  • Socionext (6526 JP) announced a pure secondary offering of 12.6 million or 37.50% of outstanding shares. At the last close, the placement is worth JPY277 billion (US$1.9 billion)
  • The selling shareholders’ primary motivation for exiting their shareholding is to capitalise on the extraordinary share price. Socionext shares are up 6x from the IPO price of JPY3,650 per share.
  • We think looking at recent large Japanese placements is instructive to understand the potential offer price. The pricing date will fall between 11 to 13 July (likely 11 July).

And Now For Something Truly Offensive – Honda Pays <0.5x Book for Yachiyo

By Travis Lundy

  • Every now and then, you get a tender offer proposal which is truly offensive. This is one. 
  • Yes, existing ICE-related autoparts makers are under the cosh as they face down obsolesence induced by competition from EVs. Fuel tank makers like Yachiyo are at risk. 
  • But this bid started at <0.3x book, and ended at <0.5x book, despite significant net financial assets and lots of unrecognised DTAs. 

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. 

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. 

Rakuten Securities IPO: Promising Business with Valuation Caveats

By Oshadhi Kumarasiri

  • Yesterday, Rakuten Group (4755 JP) announced that its consolidated subsidiary, Rakuten Securities, has applied for a listing on the Tokyo Stock Exchange.
  • Rakuten Securities has long-term growth potential through leveraging Rakuten’s ecosystem for steady securities account growth and exploring cross-selling opportunities for related services.
  • While the business seems promising, there may be concerns regarding its valuation, given its previous high trailing PE of 43.0x.

SENSEX Ad Hoc Rebalance: JSW Steel Replaces HDFC

By Brian Freitas

TRYT IPO: Revised IPO Price Range Remains Unattractive

By Arun George

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.

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Jul 07
0

Daily Brief Consumer: Rakuten Group , Hyundai Green Food, Multi Bintang Indonesia, Tesla Motors, Topbuild Corp and more

By | Consumer, Daily Briefs

In today’s briefing:

  • Rakuten Securities IPO: Promising Business with Valuation Caveats
  • Hyundai G.F. Holdings’ Stock Swap with Hyundai Green Food & Hyundai Dept Store
  • Multi Bintang (MLBI IJ): Recovery Story With High Cash Flow Generation and Dividend Pay Out
  • Tesla Earnings Preview: Cash Flow Negative And An Elephant In The Room
  • TopBuild: Another Splendid GARP Opportunity

Rakuten Securities IPO: Promising Business with Valuation Caveats

By Oshadhi Kumarasiri

  • Yesterday, Rakuten Group (4755 JP) announced that its consolidated subsidiary, Rakuten Securities, has applied for a listing on the Tokyo Stock Exchange.
  • Rakuten Securities has long-term growth potential through leveraging Rakuten’s ecosystem for steady securities account growth and exploring cross-selling opportunities for related services.
  • While the business seems promising, there may be concerns regarding its valuation, given its previous high trailing PE of 43.0x.

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.

Multi Bintang (MLBI IJ): Recovery Story With High Cash Flow Generation and Dividend Pay Out

By Sameer Taneja

  • Multi Bintang Indonesia (MLBI IJ) is Indonesia’s leading beer company, with a marketshare of 50% by volume. The company is 89% owned by Heineken. 
  • The company has maintained an average 5 Yr/10 Yr ROCE of over 72%/82% and paid out 80-100% of its profits as dividends.  It is also net cash.
  • The stock boasts a 6.5%-7% dividend yield and trades at 14-15x PE if profits normalize due to increased tourism in Indonesia, where we believe most of the demand is. 

Tesla Earnings Preview: Cash Flow Negative And An Elephant In The Room

By Kevin George

  • China accounts for over half of the automaker’s global sales.
  • There is also potential for Chinese brands to encroach on European markets.
  • Tesla’s valuation could be impacted by protectionism and nationalism, with questions over how China will tolerate overseas competitors in its electric vehicle market.

TopBuild: Another Splendid GARP Opportunity

By Pearl Gray Equity and Research

  • The stock has surged by more than 60% since the turn of the year.
  • The company’s acquisition strategy has resulted in significant market share and an ever-improving profit & loss statement.
  • The stock’s PEG ratio of 0.26 speaks volumes.

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Jul 07
0

Daily Brief Health Care: BeiGene Ltd, Genmab A/S, InMed Pharmaceuticals and more

By | Daily Briefs, Healthcare

In today’s briefing:

  • Quiddity Leaderboard for Hang Seng Index Sep 23: Beigene Vs Peers An Interesting Trade
  • Genmab A/S (GMAB US): Darzalex Continued to Be the Cash Cow; Epkinly Approval Adds Another Catalyst
  • UPDATE NOTE – InMed Pharmaceuticals, Inc. – July 6, 2023

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. 

Genmab A/S (GMAB US): Darzalex Continued to Be the Cash Cow; Epkinly Approval Adds Another Catalyst

By Tina Banerjee

  • Genmab A/S (GMAB US) recorded 30% YoY growth in royalty revenue on net sales of Darzalex to DKK1,952 million, representing 68% of total revenue in 1Q23.
  • Genmab has guided for 2023 Darzalex royalty revenue of DKK10.4–11.1B, compared to royalty revenue of DKK10.1B in 2022, based on estimated Darzalex 2023 net sales of $9.4 – 10.0B.
  • In May 2023, Genmab received FDA approval for Epkinly as the first and only T-cell engaging bispecific antibody for the treatment of relapsed or refractory diffuse large B-cell lymphoma.

UPDATE NOTE – InMed Pharmaceuticals, Inc. – July 6, 2023

By Water Tower Research

  • The bottom line from the INM-755 Phase II study’s top-line results.

  • InMed published top-line data for its most advanced drug development program, INM-755, a cannabinol (CBN)-based topical skin cream to treat symptoms associated with a rare genetic dermatological condition called epidermolysis bullosa (EB).

  • Using a wide lens approach, the Phase II study produced sufficient clinically important chronic itch relief data to support a pathway to further development and potentially bigger commercial opportunities.

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Jul 07
0

Daily Brief Financials: Nikkei 225, Bank Of Baroda, Korea Stock Exchange KOSPI 200, Agile Property Holdings, Ethereum and more

By | Daily Briefs, Financials

In today’s briefing:

  • Lead Shorts, Where to Cover and Re Set Longs.
  • Bank of Baroda (BOB IN) – A Diamond in the Rough, on the Sidelines of the HDFC Bank-HDFC Merger
  • EQD | KOSPI 200 Index WEEKLY: Time to Go LONG?
  • Morning Views Asia: Greentown China, Yuexiu Property
  • Is StETH Liquid Enough?

Lead Shorts, Where to Cover and Re Set Longs.

By Thomas Schroeder

  • Update on our top shorts as we get closer to our cover targets with some overlap.
  • SPX and NDX secondary short cover levels and where to add back to longs.
  • Minor new chart highs in store into mid-July with target adjustments.

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%

EQD | KOSPI 200 Index WEEKLY: Time to Go LONG?

By Nico Rosti

  • The Korea Stock Exchange KOSPI 200 (KOSPI2 INDEX EQUITY) has been (mildly) falling for 4 weeks, it may be now ready to resume its multi-month uptrend.
  • Friday July 7th would be a good time to enter this LONG trade at support prices between 337 and 333 (ideal range; it’s riskier below 333).
  • Hedge your bets in case the market keeps falling more next week and the following (it shouldn’t… but it can).

Morning Views Asia: Greentown China, Yuexiu Property

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.

Is StETH Liquid Enough?

By Kaiko

  • Three Arrows Capital famously blew up because of a series of bad trades, primarily Luna and GBTC.
  • What happened to Luna is obvious: it went to 0 because of UST’s flawed peg maintenance mechanism.
  • The GBTC situation was a bit more complex: “Grayscale allowed big investors like 3AC to purchase shares directly by giving Bitcoin to the trust.

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Jul 06
0

Daily Brief Singapore: Propnex Ltd and more

By | Daily Briefs, Singapore

In today’s briefing:

  • kopi-C with CEO of PropNex: ‘We’ve built a culture that can’t be replicated’

kopi-C with CEO of PropNex: ‘We’ve built a culture that can’t be replicated’

By Geoff Howie

  • kopi-C with CEO of PropNex: ‘We’ve built a culture that can’t be replicated’ So firmly ingrained is this belief in informed decision-making that PropNex’s CEO Mohamed Ismail Gafoor has been advocating consumer education in the last ten years.
  • As an integrated real estate services group, PropNex’s key business segments include real estate brokerage, training, property management and real estate consultancy.

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Jul 06
0

Daily Brief Crypto: #70 Superpowered superchains and more

By | Crypto, Daily Briefs

In today’s briefing:

  • #70 Superpowered superchains

#70 Superpowered superchains

By Carbono Insights

  • The second week in a row of good vibes. The crypto market is basking in a period of optimism, fueled by the momentum generated from the influx of numerous ETF filings.
  • Bitcoin and Ethereum, the leading cryptocurrencies, have experienced sustained upward trends in their values.
  • As a result, the vision of an interconnected on-chain, off-chain financial system is rekindled, and the hopes of a seamless integration of traditional and digital economies emerge again, with record inflows of capital into crypto to feed this hypothesis.

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Jul 06
0

Daily Brief Macro: 5 Things We Watch – The Equity Rally and more

By | Daily Briefs, Macro

In today’s briefing:

  • 5 Things We Watch – The Equity Rally, the Chinese Consumption Problem, Consumers Vs Corporates
  • Credit Watch – Why European Housing is likely going further south
  • CX Daily: China Mulls Scrapping Fixed Household Gas Rates as Winter Shortages Loom

5 Things We Watch – The Equity Rally, the Chinese Consumption Problem, Consumers Vs Corporates

By Andreas Steno

  • Happy Wednesday, and welcome back to our weekly ‘5 Things We Watch’ where we take you through some of the topics and events that we are looking out for currently. 
  • The equity rally continues, Xi is in the middle of structural issues, house lending is falling off a cliff in EZ and inflation is waning fast.
  • Read more about the 5 things that we watch currently in this week’s edition of ‘5 Things We Watch’.

Credit Watch – Why European Housing is likely going further south

By Andreas Steno

  • With the recent drop in house lending in the Eurozone, we take a closer look at how exposed European consumers and corporations actually are to further interest rate hikes. A teaser: It doesn’t look particularly great.
  • Everyone is starting to notice the EZ weakness that we have been pointing out recently, and it is probably the last place you would want to place excess capital currently.
  • But where does this weakness come from?

CX Daily: China Mulls Scrapping Fixed Household Gas Rates as Winter Shortages Loom

By Caixin Global

  • Natural gas /In Depth: China mulls scrapping fixed household gas rates as winter shortages loom
  • China-U.S. /: China, U.S. should prioritize setting up guiding principles for peaceful bilateral relationship, former Chinese ambassador says
  • Yellen /: Analysis: What does the market expect from Yellen’s China visit?

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Jul 06
0

Daily Brief ESG: Natura – ESG Report – Lucror Analytics and more

By | Daily Briefs, ESG

In today’s briefing:

  • Natura – ESG Report – Lucror Analytics
  • Telecom Italia – ESG Report – Lucror Analytics
  • The Key Is to Be Able to Use Cash on Hand Effectively in the Future

Natura – ESG Report – Lucror Analytics

By Charles Macgregor

Lucror Analytics’ ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable).
We assess Natura’s ESG as “Strong”, in line with its “Strong” Environmental and Social scores. The company has an “Adequate” score for the Governance pillar. Controversies are “Immaterial” and Disclosure is “Strong”. 

Telecom Italia – ESG Report – Lucror Analytics

By Charles Macgregor

Lucror Analytics’ ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable).
We assess Telecom Italia’s ESG as “Adequate”, in line with its “Adequate” Social and Governance scores. While the company has a “Strong” Environmental score, this pillar has the lowest weightage in our assessment of companies in the telecom sector. Controversies are “Immaterial” and Disclosure is “Strong”.

The Key Is to Be Able to Use Cash on Hand Effectively in the Future

By Aki Matsumoto

  • Although more companies have recently started to use their cash for shareholder returns, this is still not enough in terms of the dividend payout ratio.
  • Both sales and profits of companies haven’t increased by that amount for past 10 years. The question for the future is whether the cash on hand can be used effectively.
  • It is hoped that the quality of listed companies on prime market will improve as a result of M&As involving industry restructuring, the dissolution of parent-subsidiary listings and going private.

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Jul 06
0

Daily Brief Quantitative Analysis: Factor Olympics 2023 1H and more

By | Daily Briefs, Quantitative Analysis

In today’s briefing:

  • Factor Olympics 2023 1H

Factor Olympics 2023 1H

By Nicolas Rabener

  • All popular factors generated negative excess returns in 1H 2023
  • The best-performing stocks were small caps, while the lowest-risk stocks fared the worst.
  • Against all expectations, long short multi-factor products generated favorable returns.

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Jul 06
0

Daily Brief China: Robosense Technology, Zhejiang Yongtai Tech A, Lalatech Holdings Co Ltd and more

By | China, Daily Briefs

In today’s briefing:

  • Robosense Technology Pre-IPO Tearsheet
  • Zhejiang Yongtai Technology GDR Listing –  Discount Wider than Recent Deals & Inline with Average
  • Lalatech Holdings Limited Pre-IPO – Thoughts on Valuation – Needs a Very Big Cut from Pre-IPO Rounds

Robosense Technology Pre-IPO Tearsheet

By Sumeet Singh

  • Robosense Technology (ROBO HK) (RT) is looking to raise around US$300m (estimated) in its upcoming Hong Kong IPO. The deal will be run by JPM and China Renaissance.
  • As of Mar 23, it had earned design wins for mass production of LiDAR for 52 vehicles with 21OEMs and Tier 1 suppliers, ranking No. 1 globally, according to CIC.
  • As of Mar 23, it had served the largest number of automotive OEMs and Tier 1 suppliers, according to CIC.

Zhejiang Yongtai Technology GDR Listing –  Discount Wider than Recent Deals & Inline with Average

By Clarence Chu

  • Zhejiang Yongtai Tech A (002326 CH) is looking to raise US$107m in its London GDR listing. Huatai is the sole bookrunner on the deal.
  • The firm is offering 11.4m GDRs (1 GDR to 5 ordinary A-shares) for sale, at a fixed 12.7% discount to last close on its A-share leg.
  • The deal is a relatively small one for the firm to digest, representing just 3.9 days of three month ADV on its A-share leg.

Lalatech Holdings Limited Pre-IPO – Thoughts on Valuation – Needs a Very Big Cut from Pre-IPO Rounds

By Sumeet Singh

  • Lalatech Holdings Co Ltd (LALA HK) is looking to raise about US$1bn in its upcoming HK IPO.
  • Lalatech operates via a marketplace model serving merchants and carriers. Its platform facilitates closed-loop transactions from online shipping order booking to intelligent order matching, and automated dispatching to after-sale services.
  • We have looked at the company’s past performance and peer comparison in our earlier notes. In this note we will talk about valuations.

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