Daily Briefs

Last Thurs the MBO died. Tuesday an article said the ACT deal had died. Then 7&i denied that. Yesterday an article said Bain’s York Holdings deal would be approved today.
That meant a Board meeting which would approve receipt of ~¥700bn of cash. What to do with it?
Just now, Bloomberg says Seven & I Holdings (3382 JP)‘s board will consider a massive buyback. THAT is the capital allocation news my last piece suggested necessary. It’s HUGE.

7&I (3382) – A Starting Point for the Standalone Plan – The Good, The Bad, The Ugly

Today, partway through the day, we got a Bloomberg article suggesting a large-scale buyback was to come. Post-close, we got the full details.
“Seven & i Holdings Announces Plan to Unlock Shareholder Value Through Leadership Changes and Transformational Capital and Business Initiatives”.
Sale of York. Management change. Update on Special Committee work with ACT. Commitment to return ¥2trln to shareholders via buybacks by FY2030. Higher divs. IPO of 7-Eleven Inc (US).

Nikkei 225 Index Rebalance: Baycurrent (6532) Replaces Mitsubishi Logistics (9301); Kokusai Elec👎

In a big surprise, there is only one change for the Nikkei 225 (NKY INDEX) in March with BayCurrent Consulting (6532 JP) replacing Mitsubishi Logistics (9301 JP).
The non-inclusion of Kokusai Electric (6525 JP) is a big surprise given that the stock was ranked among the top 75 stocks by liquidity. There could be selling near-term.
BayCurrent Consulting (6532 JP) has been added at a 0.5 PAF and that will increase to 1 in September. Fast Retailing (9983 JP) could be capped yet again in September.

HSI, HSCEI, HSTECH, HSIII Index Rebalance: US$5.3bn of Flows Post Capping (Mar 2025)

The March rebalance of the HSI, HSCEI INDEX, HSTECH and HSIII indices will use today’s closing prices to cap the index constituent weights at 8%/12%. This leads to large flows.
The gross round-trip trade across all stocks across the four indices is estimated at HK$41.1bn (US$5.3bn). The net round-trip trade is HK$37.3bn (US$4.8bn).
Meituan , JD.com, Baidu, Horizon Robotics, ICBC, BeiGene, Kuaishou Technology and China Construction Bank are the largest buys. Alibaba, Xiaomi, HSBC, ZhongAn Online and Tencent are the largest sells.

Sunevision (1686 HK): Data Center Rally Brings Passive Flows

The huge rally in SUNeVision Holdings (1686 HK) will bring passive inflows to the stock after being added to a global sector index.
Estimated passive buying is 19.4m shares (US$22m; 0.55x ADV) with implementation scheduled for the close of trading on 21 March.
Shorts have risen sharply in the last couple of weeks and cumulative excess volume has jumped too. But we see a similar pattern in a close peer.

Seven & I Holdings (3382 JP): Board’s Plan to Unlock Value Is a Stop-Gap Measure

By Arun George

The Seven & I Holdings (3382 JP) Board announced a plan to unlock and distribute significant value to shareholders.
The initial excitement focused on the positives of leadership changes, US Assets IPO, a higher-than-expected valuation for the Superstore Business and a considerable buyback.
The negatives of a long-dated buyback, inevitable rejection of the Couche-Tard offer, an uncertain US Assets IPO and ongoing HoldCo discount suggest the initial excitement will fizzle out.

Nikkei 225 Mar25 Rebal: BayCurrent (6532) IN, Mitsubishi Logi (9301) OUT (Re-IPO). Kokusai MIA

The March 2025 Nikkei 225 Average Review was announced last night. Something of a disaster for Team Quiddity. I had expected 2-3 ADDs and 2-3 DELETEs.
We got only one change, and that was my second choice ADD and second choice DELETE. Top 75 name Kokusai Electric (6525 JP) was missing in action. BIG Disappointment. 🤔
BayCurrent Consulting (6532 JP) is in at a PAF of 0.5, with an upweight end-Sep. Mitsubishi Logistics (9301 JP) is OUT. Fast Retailing (9983 JP) will see US$2.3bn of sells.

Select Sector Indices and S&P Equal Weight Rebalance Preview: Capping Changes & US$13bn Trade

Constituent changes to the S&P 500 INDEX (SPX INDEX), S&P Midcap400 Index and S&P SmallCap600 Index for the March rebalance will be announced after market close on Friday.
There will also be capping changes for the Select Sector indices that will result in a round-trip trade of US$13.1bn. Constituent changes will add to that flow.
The largest inflows will be in Amazon.com, Tesla, Microsoft, NVIDIA, Alphabet (GOOGL US) and Electronic Arts. Largest outflows are from Broadcom, Meta Platforms, Linde, Mcdonald’s Corp and Take Two Interactive.

Japan Post Bank US$4bn Deal Updates – Needs to Correct More. Discount Vs Deal Performance Analysis

By Sumeet Singh

Japan Post Holdings (6178 JP) (JPH) aims to sell around US$4bn worth of Japan Post Bank (7182 JP) (JPB), trimming its stake to below 50%.
JPH had last sold around US$9bn worth of JPB shares in Mar 2023. That deal had a similar structure and it didn’t end up performing well.
We have looked at the deal dynamics in our previous notes. In this note, we talk about updates and look at discounts vs performance for past secondary deals.

Nikkei 225 Sep25 Rebal: One ADD, One DELETE Probable – Less Interesting Than Before

The March 2025 Nikkei 225 review came out with a sparse set of changes. That gives us hints for the September 2025 review.
I see one ADD and one DELETE. Fast Retailing capping is right on the border. BayCurrent will see an upweight.
The lack of effort to address sector imbalances within the rules suggests the rules are not as hard as people thought. Intra-review changes could be more interesting in years ahead.

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Mar 07

Daily Brief Japan: Seven & I Holdings, Japan Post Bank, BayCurrent Consulting , JX Advanced Metals, Makino Milling Machine Co, Trial Holdings, PAL GROUP Holdings Co., Ltd., Mec Co Ltd and more

By Smartkarma Daily Briefs | Daily Briefs, Japan

In today’s briefing:

7&I (3382) Possibility of YUUUUUGE Buyback?
7&I (3382) – A Starting Point for the Standalone Plan – The Good, The Bad, The Ugly
Seven & I Holdings (3382 JP): Board’s Plan to Unlock Value Is a Stop-Gap Measure
Japan Post Bank US$4bn Deal Updates – Needs to Correct More. Discount Vs Deal Performance Analysis
Nikkei 225 Sep25 Rebal: One ADD, One DELETE Probable – Less Interesting Than Before
JX Advance Metals IPO: Priced Reasonably but The Timing Isn’t Great
Makino Milling Machine (6135 JP): State of Play
Trial a Top 10 Retailer After Seiyu Purchase from KKR (With Big Synergies)
PAL Group (2726JP): 3Coins Still Growing Very Fast
MEC Co., Ltd (4971 JP): Research Update

7&I (3382) Possibility of YUUUUUGE Buyback?

Last Thurs the MBO died. Tuesday an article said the ACT deal had died. Then 7&i denied that. Yesterday an article said Bain’s York Holdings deal would be approved today.
That meant a Board meeting which would approve receipt of ~¥700bn of cash. What to do with it?
Just now, Bloomberg says Seven & I Holdings (3382 JP)‘s board will consider a massive buyback. THAT is the capital allocation news my last piece suggested necessary. It’s HUGE.

7&I (3382) – A Starting Point for the Standalone Plan – The Good, The Bad, The Ugly

Today, partway through the day, we got a Bloomberg article suggesting a large-scale buyback was to come. Post-close, we got the full details.
“Seven & i Holdings Announces Plan to Unlock Shareholder Value Through Leadership Changes and Transformational Capital and Business Initiatives”.
Sale of York. Management change. Update on Special Committee work with ACT. Commitment to return ¥2trln to shareholders via buybacks by FY2030. Higher divs. IPO of 7-Eleven Inc (US).

Seven & I Holdings (3382 JP): Board’s Plan to Unlock Value Is a Stop-Gap Measure

By Arun George

The Seven & I Holdings (3382 JP) Board announced a plan to unlock and distribute significant value to shareholders.
The initial excitement focused on the positives of leadership changes, US Assets IPO, a higher-than-expected valuation for the Superstore Business and a considerable buyback.
The negatives of a long-dated buyback, inevitable rejection of the Couche-Tard offer, an uncertain US Assets IPO and ongoing HoldCo discount suggest the initial excitement will fizzle out.

Japan Post Bank US$4bn Deal Updates – Needs to Correct More. Discount Vs Deal Performance Analysis

By Sumeet Singh

Japan Post Holdings (6178 JP) (JPH) aims to sell around US$4bn worth of Japan Post Bank (7182 JP) (JPB), trimming its stake to below 50%.
JPH had last sold around US$9bn worth of JPB shares in Mar 2023. That deal had a similar structure and it didn’t end up performing well.
We have looked at the deal dynamics in our previous notes. In this note, we talk about updates and look at discounts vs performance for past secondary deals.

Nikkei 225 Sep25 Rebal: One ADD, One DELETE Probable – Less Interesting Than Before

By Shifara Samsudeen, ACMA, CGMA

The March 2025 Nikkei 225 review came out with a sparse set of changes. That gives us hints for the September 2025 review.
I see one ADD and one DELETE. Fast Retailing capping is right on the border. BayCurrent will see an upweight.
The lack of effort to address sector imbalances within the rules suggests the rules are not as hard as people thought. Intra-review changes could be more interesting in years ahead.

JX Advance Metals IPO: Priced Reasonably but The Timing Isn’t Great

JX Advance has announced the terms for its IPO and set the pricing at ¥810-820 per share, at a much lower pricing range than previously expected ¥862 per share.
ENEOS is planning to offer 465.2m shares at the IPO raising around ¥377-381bn (US$2.5bn) at a market capitalisation and EV of ¥760bn and ¥857bn respectively.
Our SOTP valuation suggests that JX Advanced Metals (5016 JP)’s shares are priced reasonably, however, given the negative sentiment over AI and tech stocks, we remain cautious.

Makino Milling Machine (6135 JP): State of Play

By Arun George

On 27 December, Nidec Corp (6594 JP) announced a hostile preconditional tender offer for Makino Milling Machine Co (6135 JP) at JPY11,000 per share.
The Board has raised several issues with the Nidec proposal through two questionnaires. Some assertions are valid, while others do not stand up to scrutiny.
The Board has launched an ambitious MTM plan to thwart the offer and hinted at potential competing offers. Nidec’s offer increasingly needs a bump.

Trial a Top 10 Retailer After Seiyu Purchase from KKR (With Big Synergies)

By Michael Causton

Trial was already one of Japan’s leading discount retailers with a strong network of stores down south in Japan although rather low margins.
Buying Seiyu transforms this local retailer into a national champion and one of the top 10, with a highly complementary set of stores, product expertise, warehouses and tech.
Together, the two will now be able to take on Aeon, Seven & I, PPI and other major retailers in building the first true national grocery chains in Japan.

PAL Group (2726JP): 3Coins Still Growing Very Fast

By Michael Causton

3Coins is the non-apparel part of PAL Group, and its fastest growing sub-brand.
With pressure from import costs due to the weak Yen, the company spent FY2024 looking to boost product-level profitability through price increases for higher end items and new ranges.
Results look positive and operating profit for the group is due to rise 23%.

MEC Co., Ltd (4971 JP): Research Update

By Nippon Investment Bespoke Research UK

MEC’s (4971 JP) reported FY24 (Dec year-end) results, producing OP of ¥4,562mil (+83.0% YoY) on sales of ¥18,234mil (+30.1% YoY).
FY24 Chemical segment sales rose +27.0% YoY to ¥17,478mil, thanks to 1) a steady increase in demand for chemicals used in high-end packages, and 2) a gradual recovery in demand associated with PCs, smartphones, and general servers.
MEC is guiding for FY25 1H OP of ¥2,250mil (-4.8% YoY) on sales of ¥9,600mil (+8.1% YoY), and full-year OP of ¥5,000mil (+9.6% YoY) on sales of ¥20,000mil (+9.7% YoY).

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Mar 07

Daily Brief Australia: Insignia Financial, Fluence Corp and more

By Smartkarma Daily Briefs | Australia, Daily Briefs

In today’s briefing:

Insignia Financial (IFL AU): The Field Narrows As Bain And CC Capital Bump Terms
Fluence Corp Ltd – Smoother water ahead

Insignia Financial (IFL AU): The Field Narrows As Bain And CC Capital Bump Terms

By David Blennerhassett

Bain Capital and CC Capital have both bumped indicative terms to $5/share, a 63% premium to Insignia Financial (IFL AU)’s undisturbed closing share price of $3.06 on December 11 2024.
Both suitors have been granted four weeks of exclusivity. Confirmatory due diligence is expected to be completed within six weeks. IFL’s board is supportive at A$5/share or more.
Where’s Brookfield on all this? A local media source previously reported that at least one suitor was losing interest.

Fluence Corp Ltd – Smoother water ahead

By Research as a Service (RaaS)

Fluence Corporation (ASX:FLC) specialises in the delivery of water and wastewater solutions in industrial, municipal and commercial industries across the globe.
The company has released its FY24 full year result which is in line with previously amended guidance.
The Q4 cashflow statement and a Q4 financial and operating update was released in January 2025 and included significant detail and guidance for FY25.

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Mar 07

Daily Brief South Korea: Nongshim Co Ltd, Korea Stock Exchange KOSPI 200, LS Corp and more

By Smartkarma Daily Briefs | Daily Briefs, South Korea

In today’s briefing:

Nongshim Raises Instant Noodles Prices
DN Solutions IPO Might Skip OC—A Unique Trading Opportunity
LS Corp: Chairman’s Words Have Big Impact on Share Price

Nongshim Raises Instant Noodles Prices

By Douglas Kim

Nongshim announced that it plans to increase the prices of its instant noodles and snack products starting next week.
Nongshim plans to raise the retail prices of 14 instant noodle products by 7.2% on average and three snack products by 7.4% starting Monday (10 March).
We estimate the consensus to raise their earnings estimates by 5-10%+ in 2025 and 2026, driven by the higher product prices of major instant noodles and snacks.

DN Solutions IPO Might Skip OC—A Unique Trading Opportunity

By Sanghyun Park

With cautious foreign interest, DN Solutions’ big IPO deal might skip the OC and go full local for bookbuilding, setting a new trend in Korean IPOs.
If foreign anchor orders drop, local players gain more negotiating power, leading to aggressive bidding and potentially a way more conservative IPO price.
Offshore funds passing investment review without an OC could grab more volume, benefiting from local-led down-pricing without lock-up restrictions.

LS Corp: Chairman’s Words Have Big Impact on Share Price

By Douglas Kim

On 6 March, LS Group Chairman Koo Ja-Eun publicly stated “If you think duplicate listings are a problem, then just don’t buy the stocks after the listing.”
Chairman Koo’s comment was not in the best interest of the major LS Group companies including LS Electric and LS Corp that are publicly traded.
LS Group is preparing to list at least five unlisted affiliates including LS E-Link, Essex Solutions, LS Cable, LS MnM, and KOC Electric in the next 1-3 years.

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Mar 07

Daily Brief Singapore: SGX Rubber Future TSR20, CapitaLand Ascendas REIT and more

By Smartkarma Daily Briefs | Daily Briefs, Singapore

In today’s briefing:

German Rubber Industry In The Throes Of Crisis As Relocations Loom
CLAR SP: Bullish in Singapore Industrial and Strong Asset Portfolio to Drive Shareholders Returns

German Rubber Industry In The Throes Of Crisis As Relocations Loom

By Vinod Nedumudy

One in five companies in rubber industry mulling shifting in 2025
Regulatory burdens and high energy costs among major concerns
Place ‘first-touch principle’ in EUDR, erase reverse burden of proof

CLAR SP: Bullish in Singapore Industrial and Strong Asset Portfolio to Drive Shareholders Returns

By Jacob Cheng

CLAR is Singapore’s largest industrial REIT with S$16bn of assets across key markets with exposure in business parks, logistics and data centers
We think CLAR has a well diversified and resilient asset portfolio which can withstand any external shocks and drive organic growth
We think there is some interest rate risk but in general the impact is limited. S-REITs were over-corrected YTD and valuation is not demanding

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Mar 07

Daily Brief Thailand: VGI PCL, Bumrungrad Hospital Pub Co and more

By Smartkarma Daily Briefs | Daily Briefs, Thailand

In today’s briefing:

Quiddity Leaderboard SET50 Jun25: One Intra-Review Replacement Soon! Three Regular Changes Later
Bumrungrad Hospital (BH TB): Dwindling International Revenue on Competition; No Near-Term Respite

Quiddity Leaderboard SET50 Jun25: One Intra-Review Replacement Soon! Three Regular Changes Later

By Janaghan Jeyakumar, CFA

The SET50 index tracks the performance of the top 50 largest and most liquid names listed on the Stock Exchange of Thailand (SET).
In this insight, we take a look at the potential ADDs/DELs for SET 50 in the run up to the index rebal event in June 2025.
The GULF-INTUCH M&A event could trigger an intra-review change within the next few weeks. Then there could be more regular index changes in June 2025.

Bumrungrad Hospital (BH TB): Dwindling International Revenue on Competition; No Near-Term Respite

By Tina Banerjee

Bumrungrad Hospital Pub Co (BH TB) reported marginal revenue growth in 2024, with margins expanding on lower expenses. Revenue from international patients witnesses contraction, while domestic patient volumes provide traction.
Competition from peers like BDMS remains a concern in near term. With the entire Ramadan period falling in 1Q25, Bumrungrad’s international patient revenue is expected to remain muted in 1Q25.
The share prices of Bumrungrad are expected to remain under pressure with the commencement of operation at BIH Phuket being the only near-term trigger for the company.

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Mar 07

Daily Brief Indonesia: Astra International, Vale Indonesia Tbk and more

By Smartkarma Daily Briefs | Daily Briefs, Indonesia

In today’s briefing:

Astra International (ASII IJ) – Resilience in Motion
Vale Indonesia: Q4/24 Earnings Drop on Volume, Nickel Price Decline

Astra International (ASII IJ) – Resilience in Motion

By Angus Mackintosh

Astra International recently released finely balanced set of FY2024 results, with weaker auto sales offset by stronger 2W and financial segment performance, with other segments also performing above expectations.
Financial services growth was driven by stronger multifinance growth, whilst the heavy equipment division saw stronger growth from mining contracting and gold offsetting slower growth from coal mining.
Astra continues investing in sustainable energy, nickel, and healthcare and looks for new opportunities. Valuations remain attractive on less than 6x forward PER and yield > 8%.

Vale Indonesia: Q4/24 Earnings Drop on Volume, Nickel Price Decline

By Graeme Cunningham

Vale Indonesia’s Q4/24 results came in -28% below expectations driven mainly by a revenue decline, as core costs fell, and other expenses and net financing income rose
The revenue drop was from by a -7.1% decline in volume and -11.5% drop in the nickel matte price, while fuel efficiency improved and fuel costs dropped overall
The P/B continued to slide in Q4/24 to 0.82, along with an ROE down to 1.0%, but even given the inexpensive multiple, weak nickel could weigh on the stock

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Mar 07

Daily Brief China: Sun Art Retail, Tencent, Semiconductor Manufacturing International Corp (SMIC), Hang Seng Index, Sigenergy, Cosco Shipping Ports, iQIYI Inc, Jardine Matheson Holdings, UMP Healthcare and more

By Smartkarma Daily Briefs | China, Daily Briefs

In today’s briefing:

Sun Art (6808 HK): IFA Says MGO Is Not Fair. Rightfully So
Tencent (700 HK): Risen 35% Since Our Last Buy, Good Preview for 4Q24
SMIC (981.HK): Speculation About the Deepseek Rumor Does Imply Continued Creative Works in the World
Hang Seng Index (HSI): Trends in PUT Strikes and Open Interest Visualized in Animation and Charts
Sigenergy Technology Pre-IPO Tearsheet
COSCO Shipping Ports (1199 HK): What’s Interesting After the CKH Port Sale?
IQIYI Inc.: How Is Its Competitive Positioning Against Tencent Video & Short-Form Platforms?
Asia Real Estate Tracker (06-Mar-2025): 7/10 Senior Directors Confident in Data Centres, But Talent Shortage Will Widen
Hang Seng Index (HSI): Trends in CALL Strikes and Open Interest Visualized in Animation and Charts
UMP Healthcare (722 HK): Solid H1 2025, Cost-Cutting Initiatives Bearing Fruit

Sun Art (6808 HK): IFA Says MGO Is Not Fair. Rightfully So

By David Blennerhassett

Late December 2024, Alibaba (9988 HK) entered an SPA with DCP Capital to offload its 78.7% stake in Sun Art (6808 HK) at HK$1.38/share, a 44.4% discount to last close.
The SPA completed on the 27th Feb, triggering an unconditional MGO, also at HK$1.38. FWIW, a deferred payment option raises the Offer Price to a maximum of HK$1.58/share.
The Composite Document is now out, with a Closing Date for tendering on the 27th March. This won’t be extended. The IFA (Somerley) says NOT fair & reasonable.

Tencent (700 HK): Risen 35% Since Our Last Buy, Good Preview for 4Q24

By Ming Lu

Tencent’s stock price has risen by 35% since our last buy rating. Downgrade to Hold.
Our EPS estimate for 2025 is 12% over the market consensus.
We believe both revenue growth and margin will improve in the coming 4Q24 results.

SMIC (981.HK): Speculation About the Deepseek Rumor Does Imply Continued Creative Works in the World

By Patrick Liao

There is speculation about Deepseek’s wafer manufacturing yield issue at Semiconductor Manufacturing International Corp (SMIC) (981 HK) these days.
The potential concern serves as a signal for a hot topic within the company, carrying two underlying meanings.
Although NVIDIA Corp (NVDA US) is making waves in AI applications, we must not overlook the potential for continued creative developments in the world, such as Deepseek’s solution.

Hang Seng Index (HSI): Trends in PUT Strikes and Open Interest Visualized in Animation and Charts

By Gaudenz Schneider

Hang Seng Index (HSI INDEX) put options show concentrated positioning at the 19,000 and 20,000 strike levels.
Traders continue to establish new positions approximately 15%-20% below current market levels, suggesting protection against major market corrections rather than minor pullbacks. The focus is on near-term risk.
Implied volatility has remained stable at 25-30% over the past two weeks, consistent with a broadly sideways movement in the index itself.

Sigenergy Technology Pre-IPO Tearsheet

By Troy Wong

Sigenergy (SIG CH) is looking to raise at least US$100m in its upcoming Hong Kong IPO. The deal will be run by CITIC and BNP Paribas.
It provides renewable energy solutions, catering to 1) residential, 2) commercial, and 3) industrial applications.
The group markets and sells to distributors and primarily serves the European market.

COSCO Shipping Ports (1199 HK): What’s Interesting After the CKH Port Sale?

By Osbert Tang, CFA

Following CK Hutchison Holdings (1 HK)‘s port disposal, Cosco Shipping Ports (1199 HK) looks interesting, given its portfolio of port projects, which spans globally.
Overseas ports accounted for 38.9% of its noncurrent assets. A disposal of half of such portfolio will generate HK$15.2bn of cash flow, equalling almost 89% of its market capitalisation.
Even without corporate activities, its 6.4x PER, 6.7% dividend yield, and 11.8x EV/EBITDA are inexpensive. The 0.36x P/B for FY25 also deeply undervalued its assets.

IQIYI Inc.: How Is Its Competitive Positioning Against Tencent Video & Short-Form Platforms?

iQIYI reported a mixed set of results for the fourth quarter and fiscal year 2024.
The company observed significant improvements in several operational metrics towards the end of the quarter, fueled by the strong performance of its top-tier content.
This uptick in content performance led to an increase in subscribing members and higher user engagement.

Asia Real Estate Tracker (06-Mar-2025): 7/10 Senior Directors Confident in Data Centres, But Talent Shortage Will Widen

By Asia Real Estate Tracker

70% of Senior Directors are confident in data centres, showing faith in their reliability and efficiency despite challenges.
HPL’s acquisition of InterContinental Auckland for $102M marks its entry into the New Zealand market, expanding its portfolio.
Stuart Grant’s appointment as head of Hongkong Land’s $8B Shanghai project highlights the company’s commitment to growth and development in the region.

Hang Seng Index (HSI): Trends in CALL Strikes and Open Interest Visualized in Animation and Charts

By Gaudenz Schneider

Market traders of Hang Seng Index (HSI INDEX) call options maintain significant holdings in lower strikes, with notable concentration at the 20,000 strike level.
Open interest data reveals significant increase in open interest for 25,000 and 26,000 strike calls since late February, reflecting active trading as traders built new positions.
Despite increased trading activity and changes in market positioning, implied volatility has remained stable at 25-30% over the past two weeks, reflecting a consistent market sentiment.

UMP Healthcare (722 HK): Solid H1 2025, Cost-Cutting Initiatives Bearing Fruit

By Sameer Taneja

UMP Healthcare (722 HK) reported a Revenue/PAT growth of -1.2%/45.7% YoY as cost-cutting initiatives bore fruit for the company in H1 FY25.
Net cash and investments reached 294 mn HKD (representing 88% of the market capitalization) due to robust operating profits and excellent working capital control.
Trading at 7.7x PE and 0.4x EV-EBITDA, with an 8% dividend yield, there is massive value in the name. The key lies in improving ROCE, which remains low- single digit.

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Mar 07

Daily Brief India: Gensol Engineering, IGI (India) Limited, AGS Transact Technologies, Kitex Garments, Travel Food Services Ltd, PMEA Solar Tech Solutions Limited and more

By Smartkarma Daily Briefs | Daily Briefs, India

In today’s briefing:

Gensol Engineering: Forensic Analysis
IGI Faces Headwinds: Growth Concerns, Market Risks & Uncertainties
Forensic Analysis – AGS Transact Technologies: A Story Of Financial Mismanagement
The Beat Ideas: Kitex Garments- A Global Inflant Wear Play
Travel Food Services Pre-IPO – Flourishing Takeoff and Takeout Services
PMEA Solar Pre-IPO – Strong Revenue Growth Paired With Shrinking Efficiency And High Debt

Gensol Engineering: Forensic Analysis

By Nimish Maheshwari

Gensol Engineering (GENSOL IN)’s credit rating was downgraded to default, triggering a 34% stock decline in just five days. ICRA flagged misleading financial disclosures, high promoter pledges raised serious concerns.
The company is grappling with delayed debt repayments, aggressive accounting policies, and uncertainty in equity infusion, impacting its ambitious EV manufacturing and solar EPC expansion plans.
Gensol’s governance issues, cross-default risks, and financial opacity create a high-risk scenario for investors. Management must provide clarity on debt servicing, pledged shares, and capital infusion to restore confidence.

IGI Faces Headwinds: Growth Concerns, Market Risks & Uncertainties

By Nimish Maheshwari

Steep fall in diamond prices leading to slowdown in demand for certification services since its not viable as much for a consumer as it used to be.
A leading jeweller in India reiterated that certification demand for diamonds is slowing down due to changing consumer preferences.
The International Gemmological Institute, the leading certification agency, is now facing headwinds evident from earnings growth slowdown.

Forensic Analysis – AGS Transact Technologies: A Story Of Financial Mismanagement

By Nimish Maheshwari

AGS Transact Technologies (AGSTRA IN)‘ stock plunged 85% in six months due to loan defaults, delayed payments, and severe cash flow issues.
The company is on the verge of insolvency as debt defaults, SLA breaches, and auditor concerns mount. Independent directors, executives, and key employees are resigning, signaling deep-rooted financial instability.
The management’s revival plan, including selling subsidiaries and restructuring loans, may be too late. The cash management business is highly sensitive to disruptions, making recovery uncertain.

The Beat Ideas: Kitex Garments- A Global Inflant Wear Play

By Sudarshan Bhandari

Kitex Garments (KTG IN) is the world’s second-largest manufacturer of ready-to-wear clothing for infants and children.
KGL is expanding its manufacturing capabilities by establishing two new integrated units in Warangal and Sitarampur, Telangana which will increase capacity to 10.68L pieces per day.
Kitex Garments is also planning to merge with Kitex Childrenswear Limited, which sell processed fabrics, rental agreements for factory premises, and special job work contracts for KGL.

Travel Food Services Pre-IPO – Flourishing Takeoff and Takeout Services

By Akshat Shah

Travel Food Services Ltd (1450229D IN) is looking to raise about US$238m in its upcoming India IPO.
Travel Food Services Limited (TFS) operates a network of travel quick service restaurants (Travel QSRs) and private lounges in airports.
In this note, we talk about the company’s historical performance.

PMEA Solar Pre-IPO – Strong Revenue Growth Paired With Shrinking Efficiency And High Debt

By Rosita Fernandes

PMEA Solar Tech Solutions Limited (0991151D IN) (PSTSL) is planning to raise about US$116m through its upcoming India IPO.
PSTSL specializes in manufacturing solar equipments, primarily focusing on module mounting assemblies and rolled products. Its other business includes manufacturing automotive components and other products.
The company held an estimated market share of 9% of the overall domestic market for solar tracking and mounting products used in solar trackers, as per CRISIL Report.

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Mar 07

Daily Brief United States: Amazon.com Inc, Booking Holdings, Trimble Navigation, Wingstop Inc, Bausch + Lomb, Visteon Corp, Exact Sciences, MNTN, Vera Bradley, Cf Industries Holdings and more

By Smartkarma Daily Briefs | Daily Briefs, United States

In today’s briefing:

Select Sector Indices and S&P Equal Weight Rebalance Preview: Capping Changes & US$13bn Trade
Booking Holdings: An Insight Into Its Merchant Model Expansion & Payment Innovations!
Trimble Inc.: Is The Strategic Pivot From Traditional Sales To A Subscription-Based Model Paying Off?
Wingstop Inc.: Innovative Kitchen Operating Platform To Set The Stage For Long-Term Growth!
Bausch + Lomb: Innovative Product Launches in the Surgical Business Can Truly Shape Their Future!
Visteon’s Bold Asia Expansion: Looking To Double Revenue by 2027?
Exact Sciences Corporation: Is The Oncology Product Pipeline Development to Capture A Lion’s Share of the Market?
MNTN, Inc. (MNTN) – Peeking at the IPO Prospectus of Performance Marketing Platform Software Company
VRA: 4Q Preview: More Green Shoots On the Way; Reiterate Buy, PT
CF Industries: Growth of Low Carbon Ammonia to Reinforce Leadership Position In Green Transitions!

Select Sector Indices and S&P Equal Weight Rebalance Preview: Capping Changes & US$13bn Trade

Constituent changes to the S&P 500 INDEX (SPX INDEX), S&P Midcap400 Index and S&P SmallCap600 Index for the March rebalance will be announced after market close on Friday.
There will also be capping changes for the Select Sector indices that will result in a round-trip trade of US$13.1bn. Constituent changes will add to that flow.
The largest inflows will be in Amazon.com, Tesla, Microsoft, NVIDIA, Alphabet (GOOGL US) and Electronic Arts. Largest outflows are from Broadcom, Meta Platforms, Linde, Mcdonald’s Corp and Take Two Interactive.

Booking Holdings: An Insight Into Its Merchant Model Expansion & Payment Innovations!

Booking Holdings, a major player in the global online travel industry, reported its fourth-quarter and full-year 2024 financial results, showcasing a strong performance across several key metrics.
The company achieved a 13% year-over-year growth in room nights during the fourth quarter, surpassing its expectations and reflecting robust demand across all major regions.
The growth in room nights contributed to a 17% increase in gross bookings and 14% revenue growth, both exceeding the company’s prior guidance.

Trimble Inc.: Is The Strategic Pivot From Traditional Sales To A Subscription-Based Model Paying Off?

Trimble Inc. concluded its fiscal year with robust performance, exceeding the midpoint of its guidance.
The company reported fourth-quarter revenue of $983 million, ARR of $2.26 billion, and EPS of $0.89.
On an as adjusted basis, the fourth-quarter revenue increased by 9%, while gross margins significantly exceeded 70% for the first time.

Wingstop Inc.: Innovative Kitchen Operating Platform To Set The Stage For Long-Term Growth!

Wingstop Inc. demonstrated robust financial performance in fiscal year 2024.
The company achieved record results, marked by a 19.9% increase in domestic same-store sales and a remarkable 15.8% unit growth with the opening of 349 net new restaurants.
This growth pushed system-wide sales up by 36.8% to $4.8 billion, while adjusted EBITDA surged by 44.8% to $212 million, emphasizing Wingstop’s strong operational and strategic foothold in the fast-casual dining sector.

Bausch + Lomb: Innovative Product Launches in the Surgical Business Can Truly Shape Their Future!

Bausch + Lomb delivered a robust financial performance in the fourth quarter of 2024, marking its fifth consecutive quarter of double-digit constant currency revenue growth.
The company achieved a 17% growth in constant currency revenue for the entire year.
This trajectory is attributed to the continuous introduction of new products and substantial enhancements in manufacturing processes, notably through the deployment of AI technologies.

Visteon’s Bold Asia Expansion: Looking To Double Revenue by 2027?

Visteon Corporation reported its financial results for the fourth quarter and full year 2024, reflecting a period of strategic progress and solid operational performance.
The company secured $3.87 billion in sales for the year, demonstrating alignment with key automotive industry trends, especially in digitalization, software-defined vehicles, and electrification.
Record levels were achieved in adjusted EBITDA, at $474 million, and adjusted free cash flow, amounting to $300 million, underscoring strong financial discipline and operational execution.

Exact Sciences Corporation: Is The Oncology Product Pipeline Development to Capture A Lion’s Share of the Market?

By Small Cap Consumer Research

Exact Sciences recently reported its fourth-quarter 2024 financial results, showcasing a mix of both positive momentum and certain challenges.
For the full year, Exact Sciences achieved a core revenue growth of 11%, reaching $2.75 billion, and notably expanded its adjusted EBITDA by nearly 48%.
The company also doubled its free cash flow and ended the year with a robust $1.04 billion in cash and securities.

MNTN, Inc. (MNTN) – Peeking at the IPO Prospectus of Performance Marketing Platform Software Company

By IPO Boutique

Their Performance TV software platform allows marketers to combine the powerful storytelling format of TV advertising with the targeting, measurement and attribution capabilities of paid search and social advertising.
They had revenue of $176.3 million and $225.6 million and net loss of $53.3 million and $32.9 million in 2023 and 2024, respectively.
We anticipate this company to set terms (share size, price range) and debut in the second half of March

VRA: 4Q Preview: More Green Shoots On the Way; Reiterate Buy, PT

We are reiterating our Buy rating, $5.50 price target and projections for Vera Bradley with the company reporting 4QFY25 (January) results before the open on Wednesday.
While we believe 4Q upside is limited, we expect management to point to signs of material progress as they shift the product and category mix to attract a younger generation.
Further, we expect the launch of the Spring collection in 1QFY26 has been a key positive and provides a road map to move Vera Bradley back into prominence.

CF Industries: Growth of Low Carbon Ammonia to Reinforce Leadership Position In Green Transitions!