Category

Daily Briefs

Mar 03
0

Daily Brief Macro: HONG KONG ALPHA PORTFOLIO (February 2025) and more

By | Daily Briefs, Macro

In today’s briefing:

  • HONG KONG ALPHA PORTFOLIO (February 2025)
  • Bessent Gets His Wish, But Not In A Good Way
  • What Should You Buy As the Magnificent Seven Falters?
  • Copper Tracker 3rd March 2025: China TSF And PMI Rebound A Major Boost, All Eyes On the NPC
  • Glacial Bank of Japan Policy Normalisation Intact, but Wage Inflation and Geopolitics Pose Risks
  • Iron Ore Tracker (04-Mar-2025): PMI Rebound And China TSF Looking Good, All Eyes On NPC

HONG KONG ALPHA PORTFOLIO (February 2025)

By David Mudd

Bessent Gets His Wish, But Not In A Good Way

By Cam Hui

  • Treasury Secretary Scott Bessent recently declared that the Trump Administration was mainly focused on lower the 10-year Treasury yield. He seems to be accomplishing his goals, but at a price.
  • The U.S. economy is increasingly dependent on the high-end consumer, whose wealth is reliant on continuing increases in stock and property prices. But cracks are appearing in both markets.
  • We expect a reset in growth expectations will lead to a short and sharp correction, but no prolonged recession-induced bear market.

What Should You Buy As the Magnificent Seven Falters?

By Cam Hui

  • A global rotation analysis reveals a rotation away from U.S. equities. Europe is poised to sustain leadership, and our favourite sector is European financials.
  • China has shown signs of relative strength, but doesn’t appear to be sustainable.
  • The most vulnerable countries appear to be the resource exporters such as Australia, Canada, Brazil, Indonesia and South Africa.

Copper Tracker 3rd March 2025: China TSF And PMI Rebound A Major Boost, All Eyes On the NPC

By Sameer Taneja

  • Copper prices remained tepid last week, owing to a weak global market sentiment with Trump’s tariffs. Funds cut their bullish Comex positions as premiums crashed by 40% from the peak.  
  • China’s Manufacturing PMI rose to 50.2 in February, surpassing the expected 49.9, while the record Total Social Financing in January also contributed significantly to this positive outlook.
  • The NPC 2025, taking place on March 5, will be closely watched for China’s fiscal policy roadmap, which is expected to influence commodity consumption.

Glacial Bank of Japan Policy Normalisation Intact, but Wage Inflation and Geopolitics Pose Risks

By Said Desaque

  • The Bank of Japan (BoJ) has embraced the Fed’s practice of gradualism in normalising policy settings. Private securities holdings make it difficult for the BoJ’s balance sheet to fall rapidly.   
  • The BoJ’s inflation gauge has been rising again since July 2024, suggesting gradually tighter policy will not reintroduce deflation.  Rising wages are the inflation game changer after years of stagnation.
  • Monetary policy settings in Japan will remain accommodative in 2025, albeit less so.  The attraction of the yen carry trade could fall, but the demand for dollars will remain elevated.

Iron Ore Tracker (04-Mar-2025): PMI Rebound And China TSF Looking Good, All Eyes On NPC

By Sameer Taneja

  • The Trump administration’s announcement of a 60% tariff on Chinese steel imports affected the market sentiment, leading to a 3% decline in iron ore prices last week.
  • China’s Manufacturing PMI rose to 50.2 in February, surpassing the expected 49.9, while the record Total Social Financing in January also contributed significantly to this positive outlook.
  • Iron ore prices can remain rangebound (95-110 USD/ton), with the positive demand-side catalysts from China outweighing the long-term supply fears from Rio’s Simandou project. 

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Mar 03
0

Daily Brief China: Xiamen Amoytop Biotech Co Ltd, Weichai Power Co Ltd H, Alibaba Group Holding , JD.com , Chifeng Jilong Gold Mining, Hang Seng China Enterprises Index, Mixue Group, Hang Seng Index, BeiGene and more

By | China, Daily Briefs

In today’s briefing:

  • STAR50/STAR100 Index Rebalance: Methodology Changes & Some Surprises
  • A/H Premium Tracker (To 28 Feb 2025):  AH Premia Continue to Fall; Expect Widening
  • HK Connect SOUTHBOUND Flows (To 28 Feb 2025); Big Volumes, HUGE Net Buys on Blue Chips, Tech-Y Names
  • Box Trades Explained: How Traders Execute Near Risk-Free Arbitrage in Hong Kong’s Options Market
  • Chifeng Jilong Gold Mining (6693 HK) IPO: H-Share Offering Details & Index Inclusion
  • HSCEI Index Options Weekly (Feb 24-28): Shifting Sentiment
  • MIXUE IPO Trading – Strong Demand, Set to Break the Tea Chain Jinx
  • Hong Kong Single Stock Options Weekly (Feb 24 – 28): Broad Deterioration
  • BeiGene (6160.HK/​ONC US) 2024 Results – The Performance Is Outstanding
  • Chifeng Jilong A/H Listing: Why Not Own International Peers Instead?

STAR50/STAR100 Index Rebalance: Methodology Changes & Some Surprises

By Brian Freitas

  • There are 3 constituent changes for the STAR50 INDEX and 6 changes for the STAR100 Index at the March rebalance that will be implemented at the close on 14 March.
  • The last-minute methodology change could lead to under/over positioning on some names and those stocks could move the most over the next few days.
  • Performance has been mixed in the changes to the STAR50 INDEX but the outright adds have continued to outperform the outright deletes for the STAR100 Index.

A/H Premium Tracker (To 28 Feb 2025):  AH Premia Continue to Fall; Expect Widening

By Travis Lundy

  • AH Premia continue to fall. Spread curve torsion reverses again with narrow premia trades seeing Hs perform the best. 
  • Warning signs are starting to flash on spreads. This week I have the biggest week of changes recommended that I have ever had. By a long ways.
  • This week threatens to be a very strange week geopolitically. Being smaller in crowded trades is probably a good thing.

HK Connect SOUTHBOUND Flows (To 28 Feb 2025); Big Volumes, HUGE Net Buys on Blue Chips, Tech-Y Names

By Travis Lundy

  • Gross SOUTHBOUND volumes cleared HK$800bn for the second week in a row. NET buying by SOUTHBOUND was HK$75bn which was perhaps a new record.
  • Notable again is the HUGE back-and-forth. If HK$865bn traded and SOUTHBOUND “only” bought HK$75bn, HK$395bn was round-tripped for short-term purposes.
  • Last week I flipped to short Alibaba Group Holding (9988 HK). Sentiment may worsen and there’s lots to sell later this week. Staying short Alibaba for now. 

Box Trades Explained: How Traders Execute Near Risk-Free Arbitrage in Hong Kong’s Options Market

By Gaudenz Schneider

  • Box trades are gaining popularity on the Hong Kong Stock Exchange. These arbitrage strategies exploit price discrepancies in options markets for near risk-free profits.
  • Long box trades involve simultaneously buying bull call spreads and bear put spreads with identical strikes and expiration dates, creating a fixed payoff regardless of the underlying asset’s price movement.
  • Box trades require careful execution consideration of spreads, commissions, margins, and fees, with risks primarily in execution and operations rather than market exposure.

Chifeng Jilong Gold Mining (6693 HK) IPO: H-Share Offering Details & Index Inclusion

By Brian Freitas

  • Chifeng Jilong Gold Mining (600988 CH) has launched an H-share offering that could raise up to US$554m if the offer size adjustment option and overallocation option are both exercised.
  • The price range of HK$13.72-HK$15.83/share is a discount of 18.7-29.5% to the A-shares and between 17-26% of the offering will be allocated to cornerstone investors.
  • The small issue size will result in the stock staying out the global indices for the foreseeable future. Inclusion in Southbound Stock Connect will take place in April.

HSCEI Index Options Weekly (Feb 24-28): Shifting Sentiment

By John Ley

  • Put trading as a percentage of total volume continues to increase and coupled with a shift in the skew highlights changing sentiment.
  • Volatile price action this week with Wednesday and Friday both moving ~3.50%.
  • Implied and historic volatilities were all up on the week and seasonal setup over next two weeks not favorble. 

MIXUE IPO Trading – Strong Demand, Set to Break the Tea Chain Jinx

By Sumeet Singh

  • Mixue Group (2097 HK) raised around US$450m in its Hong Kong IPO.
  • MIXUE Group (MIXUE) is a freshly-made drinks company providing affordable products to consumers, including freshly-made fruit drinks, tea, ice cream and coffee, typically priced at around one USD per item.
  • We have covered various aspects of the deal in our previous notes. In this note, we will talk about the trading dynamics.

Hong Kong Single Stock Options Weekly (Feb 24 – 28): Broad Deterioration

By John Ley

  • Broad based weakness, less than ½ of optionable stocks were up on the week with the average size of losses larger than average size of gains.
  • Total single stock Put option volume the highest in the past 4 months pushing the Put/Call ratio to a local extreme. 
  • Laggards from the rally holding on, rally leaders broadly weak.

BeiGene (6160.HK/​ONC US) 2024 Results – The Performance Is Outstanding

By Xinyao (Criss) Wang

  • BeiGene’s 2024 results beat expectations, mainly driven by strong sales growth of BRUKINSA. In 2025, BRUKINSA’s sales would exceed Calquence for the first time.But sales performance of tislelizumab remains lackluster.
  • Based on positive trend, turning losses into profits is just a matter of time. BeiGene is expected to achieve positive GAAP operating income in 2025, which is an inflection point.
  • US$24.5-26.5 billion is the valuation bottom line, below which BeiGene is undervalued. Our forecast is that market value would reach US$37.5 billion. So, there is still upside potential in valuation.

Chifeng Jilong A/H Listing: Why Not Own International Peers Instead?

By Nicholas Tan

  • Chifeng Jilong Gold Mining (600988 CH) , a gold mining company in China, is now looking to raise up to US$419m in its H-share listing in Hong Kong.
  • It operates six gold mines in Asia and Africa and has been listed on the Shenzhen Stock Exchange since 2004.
  • We have covered the company and deal background in our previous notes. In this note, we talk about the IPO pricing.

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Mar 03
0

Most Read: Xiamen Amoytop Biotech Co Ltd, AEON Mall, Shenzhen Bluetrum Technology, Weichai Power Co Ltd H, JX Advanced Metals, Aeon Delight, Alibaba Group Holding , Snt Corp, JD.com , Japan Post Holdings and more

By | Daily Briefs, Most Read

In today’s briefing:

  • STAR50/STAR100 Index Rebalance: Methodology Changes & Some Surprises
  • Aeon (8267) And Aeon Mall (8905) To Be a Guess The Ratio Trade
  • STAR Chip Index Rebalance: Shenzhen Bluetrum (688332) Replaces JoulWatt (688141)
  • A/H Premium Tracker (To 28 Feb 2025):  AH Premia Continue to Fall; Expect Widening
  • JX Advanced Metals IPO Preview
  • Aeon Tender Offer for Aeon Delight (9787) At ¥5,400/Share
  • HK Connect SOUTHBOUND Flows (To 28 Feb 2025); Big Volumes, HUGE Net Buys on Blue Chips, Tech-Y Names
  • Sparx Launches Another Offensively Underpriced Takeover at a Fat Premium – SNT (6319) +94%
  • Box Trades Explained: How Traders Execute Near Risk-Free Arbitrage in Hong Kong’s Options Market
  • Weekly Deals Digest (02 Mar) – Japan Post Bank, 7&I, Aeon Delight, Tonami, Mixue, JXAM

STAR50/STAR100 Index Rebalance: Methodology Changes & Some Surprises

By Brian Freitas

  • There are 3 constituent changes for the STAR50 INDEX and 6 changes for the STAR100 Index at the March rebalance that will be implemented at the close on 14 March.
  • The last-minute methodology change could lead to under/over positioning on some names and those stocks could move the most over the next few days.
  • Performance has been mixed in the changes to the STAR50 INDEX but the outright adds have continued to outperform the outright deletes for the STAR100 Index.

Aeon (8267) And Aeon Mall (8905) To Be a Guess The Ratio Trade

By Travis Lundy

  • On 28-Feb-25, the last day of their fiscal year, Aeon Co Ltd (8267 JP) signed a deal to acquire Aeon Delight via Tender Offer and Aeon Mall via scrip exchange.
  • For Aeon Mall, that means negotiation on the share exchange ratio over the next 5-6 weeks. 
  • While I have an opinion on the fair ratio (explained below), I find “Guess The Ratio” trades fraught with bad governance outcomes. The 3-month average is often used.

STAR Chip Index Rebalance: Shenzhen Bluetrum (688332) Replaces JoulWatt (688141)

By Brian Freitas

  • CSI announced the changes for the March rebalance after market close on 28 February and the changes will be effective after the close of trading on 14 March.
  • As expected, Shenzhen Bluetrum Technology (688332 CH) will be added to the index while JoulWatt Technology Co (688141 CH) will be deleted.
  • Shenzhen Bluetrum Technology (688332 CH) outperformed JoulWatt Technology Co (688141 CH) in the last quarter of 2024 and there has been a reversal of fortunes this calendar year.

A/H Premium Tracker (To 28 Feb 2025):  AH Premia Continue to Fall; Expect Widening

By Travis Lundy

  • AH Premia continue to fall. Spread curve torsion reverses again with narrow premia trades seeing Hs perform the best. 
  • Warning signs are starting to flash on spreads. This week I have the biggest week of changes recommended that I have ever had. By a long ways.
  • This week threatens to be a very strange week geopolitically. Being smaller in crowded trades is probably a good thing.

JX Advanced Metals IPO Preview

By Douglas Kim

  • JX Advanced Metals (5016 JP) is seeking to raise about ¥460 billion in the upcoming IPO on the Tokyo Stock Exchange. The indicative IPO price is ¥862 per share.
  • The final IPO pricing will be on 10 March. JX Advanced Metals will be listed on 19 March. Eneos is selling as many as 534.9 million shares in the IPO.
  • The company has a strong customer base. It is a key supplier to TSMC, Samsung, Intel, SK Hynix, and Micron for sputtering targets and high-purity metals.

Aeon Tender Offer for Aeon Delight (9787) At ¥5,400/Share

By Travis Lundy

  • Bowing before bureaucratic, governmental, societal, and perhaps finally shareholder pressure, Aeon Co Ltd (8267 JP) Friday announced it is rolling up two big subsidiaries. 
  • Aeon Mall will be merged with Aeon in a share exchange and Aeon Delight (9787 JP) will be taken over via slightly long-dated Tender Offer which starts Monday.
  • This is probably the wrong price, but it isn’t egregiously wrong I expect. And it would be difficult to block. I expect it gets done easily.

HK Connect SOUTHBOUND Flows (To 28 Feb 2025); Big Volumes, HUGE Net Buys on Blue Chips, Tech-Y Names

By Travis Lundy

  • Gross SOUTHBOUND volumes cleared HK$800bn for the second week in a row. NET buying by SOUTHBOUND was HK$75bn which was perhaps a new record.
  • Notable again is the HUGE back-and-forth. If HK$865bn traded and SOUTHBOUND “only” bought HK$75bn, HK$395bn was round-tripped for short-term purposes.
  • Last week I flipped to short Alibaba Group Holding (9988 HK). Sentiment may worsen and there’s lots to sell later this week. Staying short Alibaba for now. 

Sparx Launches Another Offensively Underpriced Takeover at a Fat Premium – SNT (6319) +94%

By Travis Lundy

  • Sparx on Friday announced a Tender Offer at 0.55x book and an EV of less than inventory (<20% of revenue) for Snt Corp (6319 JP) – another metal monozukuri company.
  • Last year they did it on IJTT Co., Ltd. (7315 JP). That one got bumped. This one could too, but cross-holders own nearly 60%.  
  • This kind of company has skill-sets which may be portable but the product line is tied to old Japan. The takeover 

Box Trades Explained: How Traders Execute Near Risk-Free Arbitrage in Hong Kong’s Options Market

By Gaudenz Schneider

  • Box trades are gaining popularity on the Hong Kong Stock Exchange. These arbitrage strategies exploit price discrepancies in options markets for near risk-free profits.
  • Long box trades involve simultaneously buying bull call spreads and bear put spreads with identical strikes and expiration dates, creating a fixed payoff regardless of the underlying asset’s price movement.
  • Box trades require careful execution consideration of spreads, commissions, margins, and fees, with risks primarily in execution and operations rather than market exposure.

Weekly Deals Digest (02 Mar) – Japan Post Bank, 7&I, Aeon Delight, Tonami, Mixue, JXAM

By Arun George

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Mar 03
0

Daily Brief Australia: Airtasker, Iron Ore and more

By | Australia, Daily Briefs

In today’s briefing:

  • Airtasker Ltd – Media deals drive positive revenue trends
  • Iron Ore Tracker (04-Mar-2025): PMI Rebound And China TSF Looking Good, All Eyes On NPC

Airtasker Ltd – Media deals drive positive revenue trends

By Research as a Service (RaaS)

  • Airtasker Limited (ASX:ART) is an online marketplace for local services, connecting people and businesses who need work done with people who want to work.
  • ART’s reported H1 FY25 results are messy, with a number of non-cash items including media capital spend distorting reported numbers.
  • On an adjusted basis revenue growth was 11%, with Airtasker marketplace growth closer to 15%.

Iron Ore Tracker (04-Mar-2025): PMI Rebound And China TSF Looking Good, All Eyes On NPC

By Sameer Taneja

  • The Trump administration’s announcement of a 60% tariff on Chinese steel imports affected the market sentiment, leading to a 3% decline in iron ore prices last week.
  • China’s Manufacturing PMI rose to 50.2 in February, surpassing the expected 49.9, while the record Total Social Financing in January also contributed significantly to this positive outlook.
  • Iron ore prices can remain rangebound (95-110 USD/ton), with the positive demand-side catalysts from China outweighing the long-term supply fears from Rio’s Simandou project. 

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Mar 03
0

Daily Brief United States: Middleby Corp, Copper, Sage Therapeutics, SpringWorks Therapeutics Inc and more

By | Daily Briefs, United States

In today’s briefing:

  • Weekly Update (MIDD, SNDK, RHLD, SNRE)
  • Copper Tracker 3rd March 2025: China TSF And PMI Rebound A Major Boost, All Eyes On the NPC
  • Strategic Reviews, Mergers, and Asset Sales: Analyzing Upside Potential in Active Portfolio Ideas
  • SSI Weekly Newsletter Highlights: SWTX and NATH Potential Buyouts, LQDA FDA Update and More

Weekly Update (MIDD, SNDK, RHLD, SNRE)

By Richard Howe

  • On Monday, Western Digital (WDC) spun off its NAND flash business, Sandisk (SNDK).

  • On Friday, CompoSecure (CMPO) spun off its management company, Resolute Holdings (RHLD).

  • During the week, we got earnings from Howard Hughes (HHH) and Sunrise Communications (SNRE).

Copper Tracker 3rd March 2025: China TSF And PMI Rebound A Major Boost, All Eyes On the NPC

By Sameer Taneja

  • Copper prices remained tepid last week, owing to a weak global market sentiment with Trump’s tariffs. Funds cut their bullish Comex positions as premiums crashed by 40% from the peak.  
  • China’s Manufacturing PMI rose to 50.2 in February, surpassing the expected 49.9, while the record Total Social Financing in January also contributed significantly to this positive outlook.
  • The NPC 2025, taking place on March 5, will be closely watched for China’s fiscal policy roadmap, which is expected to influence commodity consumption.

Strategic Reviews, Mergers, and Asset Sales: Analyzing Upside Potential in Active Portfolio Ideas

By Special Situation Investments

  • Sage Therapeutics rejected Biogen’s $7.22/share offer, initiating a strategic review for potential sale, indicating a possible higher premium.
  • SPAR Group’s merger with Highwire Capital faces uncertainty due to funding issues, with potential for significant stock price decline.
  • Kronos Bio’s strategic review follows clinical trial discontinuation, with potential sale or reverse merger, trading below net cash value.

SSI Weekly Newsletter Highlights: SWTX and NATH Potential Buyouts, LQDA FDA Update and More

By Special Situation Investments

  • SpringWorks Therapeutics (SWTX) is in late-stage acquisition talks with Merck KGaA, with a potential buyout offer at $85/share.
  • Liquidia (LQDA) had its FDA case denied, delaying Yutrepia’s market entry until May 2025, with commercialization on track.
  • ContextLogic (LOGC) received a $150m strategic investment from BC Partners, enhancing its cash balance and NOL monetization potential.

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Mar 03
0

Daily Brief Japan: JX Advanced Metals, Snt Corp, Japan Post Holdings, Seven & I Holdings, AEON Mall, TSE Tokyo Price Index TOPIX, Japan Post Bank, Nikkei 225 and more

By | Daily Briefs, Japan

In today’s briefing:

  • JX Advanced Metals IPO Preview
  • Sparx Launches Another Offensively Underpriced Takeover at a Fat Premium – SNT (6319) +94%
  • Weekly Deals Digest (02 Mar) – Japan Post Bank, 7&I, Aeon Delight, Tonami, Mixue, JXAM
  • Merger Arb Mondays (03 Mar) – Seven & I, Makino, Aeon Delight, Tonami, Tam Jai, Vesync, Insignia
  • Aeon Mall (8905 JP): Aeon (8267 JP)’s Potential Share Exchange Offer
  • The Only Way to Know if a Company Are Improving in Real Terms Is if It Is Creating Value
  • ECM Weekly (3rd Mar 2025) – Japan Post Bank, JX Advance, Mixue, Chifeng, JSW Cement, Premier, Guzman
  • Nikkei Index Options Weekly (Feb 24 – 28): The Range Breaks

JX Advanced Metals IPO Preview

By Douglas Kim

  • JX Advanced Metals (5016 JP) is seeking to raise about ¥460 billion in the upcoming IPO on the Tokyo Stock Exchange. The indicative IPO price is ¥862 per share.
  • The final IPO pricing will be on 10 March. JX Advanced Metals will be listed on 19 March. Eneos is selling as many as 534.9 million shares in the IPO.
  • The company has a strong customer base. It is a key supplier to TSMC, Samsung, Intel, SK Hynix, and Micron for sputtering targets and high-purity metals.

Sparx Launches Another Offensively Underpriced Takeover at a Fat Premium – SNT (6319) +94%

By Travis Lundy

  • Sparx on Friday announced a Tender Offer at 0.55x book and an EV of less than inventory (<20% of revenue) for Snt Corp (6319 JP) – another metal monozukuri company.
  • Last year they did it on IJTT Co., Ltd. (7315 JP). That one got bumped. This one could too, but cross-holders own nearly 60%.  
  • This kind of company has skill-sets which may be portable but the product line is tied to old Japan. The takeover 

Weekly Deals Digest (02 Mar) – Japan Post Bank, 7&I, Aeon Delight, Tonami, Mixue, JXAM

By Arun George

Merger Arb Mondays (03 Mar) – Seven & I, Makino, Aeon Delight, Tonami, Tam Jai, Vesync, Insignia

By Arun George

Aeon Mall (8905 JP): Aeon (8267 JP)’s Potential Share Exchange Offer

By Arun George

  • AEON Mall (8905 JP) and Aeon Co Ltd (8267 JP) announced a MoU for the potential privatisation of Aeon Mall through a share exchange offer.
  • The terms of the share exchange are expected to be announced in early April and be implemented in July. 
  • Aeon’s 58.16% shareholding facilitates passing the Aeon Mall shareholder vote. My analysis suggests a potential share exchange (Aeon Mall/Aeon) ratio range of 0.60x-0.69x.

The Only Way to Know if a Company Are Improving in Real Terms Is if It Is Creating Value

By Aki Matsumoto

  • In Japan, where there’s strong peer pressure, people are reluctant to do something before someone else does, and tend to follow the trend once the majority of formality is known.
  • When numbers are specified and rules are established, Japanese companies tend to scramble to match the numbers. Thus, many companies have not voluntarily improved their board practices.
  • There’re companies that only have good board practices but aren’t generating value .Therefore, we should focus on whether they are doing actions that create value in addition to board practices.

ECM Weekly (3rd Mar 2025) – Japan Post Bank, JX Advance, Mixue, Chifeng, JSW Cement, Premier, Guzman

By Sumeet Singh

Nikkei Index Options Weekly (Feb 24 – 28): The Range Breaks

By John Ley

  • Sideways range finally breaks giving way to higher 1M implied vols, now above the 75th percentile.
  • Move lower potentially exacerbated by short gamma positions around the 38,000 strike.
  • Seasonals not favorable for Nikkei over the next two weeks.

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Mar 03
0

Daily Brief Health Care: Xiamen Amoytop Biotech Co Ltd, BeiGene , Medexus Pharmaceuticals, Sage Therapeutics, SpringWorks Therapeutics Inc and more

By | Daily Briefs, Healthcare

In today’s briefing:

  • STAR50/STAR100 Index Rebalance: Methodology Changes & Some Surprises
  • BeiGene (6160.HK/​ONC US) 2024 Results – The Performance Is Outstanding
  • Best Idea of 2025: Medexus Pharmaceuticals
  • Strategic Reviews, Mergers, and Asset Sales: Analyzing Upside Potential in Active Portfolio Ideas
  • SSI Weekly Newsletter Highlights: SWTX and NATH Potential Buyouts, LQDA FDA Update and More

STAR50/STAR100 Index Rebalance: Methodology Changes & Some Surprises

By Brian Freitas

  • There are 3 constituent changes for the STAR50 INDEX and 6 changes for the STAR100 Index at the March rebalance that will be implemented at the close on 14 March.
  • The last-minute methodology change could lead to under/over positioning on some names and those stocks could move the most over the next few days.
  • Performance has been mixed in the changes to the STAR50 INDEX but the outright adds have continued to outperform the outright deletes for the STAR100 Index.

BeiGene (6160.HK/​ONC US) 2024 Results – The Performance Is Outstanding

By Xinyao (Criss) Wang

  • BeiGene’s 2024 results beat expectations, mainly driven by strong sales growth of BRUKINSA. In 2025, BRUKINSA’s sales would exceed Calquence for the first time.But sales performance of tislelizumab remains lackluster.
  • Based on positive trend, turning losses into profits is just a matter of time. BeiGene is expected to achieve positive GAAP operating income in 2025, which is an inflection point.
  • US$24.5-26.5 billion is the valuation bottom line, below which BeiGene is undervalued. Our forecast is that market value would reach US$37.5 billion. So, there is still upside potential in valuation.

Best Idea of 2025: Medexus Pharmaceuticals

By Richard Howe

  • Medexus (MDP.TO / MEDXF) is my best idea for 2025. The stock trades at a distressed valuation despite the current launch of a new drug that could double revenue and triple EBITDA within 3 years.
  • I see 100% upside in 2025, but there is the potential for 400% to 500% upside over a three year period.
  • Downside is limited as Medexus has minimal debt (net debt to EBITDA of 0.7x) and a stable base business.

Strategic Reviews, Mergers, and Asset Sales: Analyzing Upside Potential in Active Portfolio Ideas

By Special Situation Investments

  • Sage Therapeutics rejected Biogen’s $7.22/share offer, initiating a strategic review for potential sale, indicating a possible higher premium.
  • SPAR Group’s merger with Highwire Capital faces uncertainty due to funding issues, with potential for significant stock price decline.
  • Kronos Bio’s strategic review follows clinical trial discontinuation, with potential sale or reverse merger, trading below net cash value.

SSI Weekly Newsletter Highlights: SWTX and NATH Potential Buyouts, LQDA FDA Update and More

By Special Situation Investments

  • SpringWorks Therapeutics (SWTX) is in late-stage acquisition talks with Merck KGaA, with a potential buyout offer at $85/share.
  • Liquidia (LQDA) had its FDA case denied, delaying Yutrepia’s market entry until May 2025, with commercialization on track.
  • ContextLogic (LOGC) received a $150m strategic investment from BC Partners, enhancing its cash balance and NOL monetization potential.

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Mar 03
0

Daily Brief Industrials: Weichai Power Co Ltd H, Japan Post Holdings, Middleby Corp and more

By | Daily Briefs, Industrials

In today’s briefing:

  • A/H Premium Tracker (To 28 Feb 2025):  AH Premia Continue to Fall; Expect Widening
  • Weekly Deals Digest (02 Mar) – Japan Post Bank, 7&I, Aeon Delight, Tonami, Mixue, JXAM
  • Weekly Update (MIDD, SNDK, RHLD, SNRE)

A/H Premium Tracker (To 28 Feb 2025):  AH Premia Continue to Fall; Expect Widening

By Travis Lundy

  • AH Premia continue to fall. Spread curve torsion reverses again with narrow premia trades seeing Hs perform the best. 
  • Warning signs are starting to flash on spreads. This week I have the biggest week of changes recommended that I have ever had. By a long ways.
  • This week threatens to be a very strange week geopolitically. Being smaller in crowded trades is probably a good thing.

Weekly Deals Digest (02 Mar) – Japan Post Bank, 7&I, Aeon Delight, Tonami, Mixue, JXAM

By Arun George

Weekly Update (MIDD, SNDK, RHLD, SNRE)

By Richard Howe

  • On Monday, Western Digital (WDC) spun off its NAND flash business, Sandisk (SNDK).

  • On Friday, CompoSecure (CMPO) spun off its management company, Resolute Holdings (RHLD).

  • During the week, we got earnings from Howard Hughes (HHH) and Sunrise Communications (SNRE).

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Mar 03
0

Daily Brief TMT/Internet: Hang Seng China Enterprises Index, Pentamaster International, Hang Seng Index, Airtasker, Plover Bay Technologies and more

By | Daily Briefs, TMT/Internet

In today’s briefing:

  • HSCEI Index Options Weekly (Feb 24-28): Shifting Sentiment
  • Pentamaster (1665 HK): Pricing WAS Fair As Offer Comfortably Gets Up
  • Hong Kong Single Stock Options Weekly (Feb 24 – 28): Broad Deterioration
  • HSI Index Options Weekly (Feb 24-28): Volatility Increases as Rally Reverses
  • Airtasker Ltd – Media deals drive positive revenue trends
  • Plover Bay (1523 HK): Brilliant FY24 Results/Growth To Continue

HSCEI Index Options Weekly (Feb 24-28): Shifting Sentiment

By John Ley

  • Put trading as a percentage of total volume continues to increase and coupled with a shift in the skew highlights changing sentiment.
  • Volatile price action this week with Wednesday and Friday both moving ~3.50%.
  • Implied and historic volatilities were all up on the week and seasonal setup over next two weeks not favorble. 

Pentamaster (1665 HK): Pricing WAS Fair As Offer Comfortably Gets Up

By David Blennerhassett

  • Pentamaster International (1665 HK)‘s Scheme overwhelmingly gets up after a wild week of trading.
  • After touching an intra-day low of HK$0.78/share on the 25th Feb – 28% adrift of the HK$1.00/share terms – shares closed at HK$0.97/share prior the results of the Scheme Meeting. 
  • 58.2% of disinterested shareholders opted to vote. Just 0.5% of those shareholders present voted against the Scheme; or just 0.29% of total disinterested shareholders. Not even close.

Hong Kong Single Stock Options Weekly (Feb 24 – 28): Broad Deterioration

By John Ley

  • Broad based weakness, less than ½ of optionable stocks were up on the week with the average size of losses larger than average size of gains.
  • Total single stock Put option volume the highest in the past 4 months pushing the Put/Call ratio to a local extreme. 
  • Laggards from the rally holding on, rally leaders broadly weak.

HSI Index Options Weekly (Feb 24-28): Volatility Increases as Rally Reverses

By John Ley

  • HSI down 1.64% on the week but under the hood volatility was percolating with a larger weekly range and 2 daily moves > 3%.
  • Volatilities rise across the board and shift in the skew favoring Puts.
  • Trading dynamics between spot and implied vol continue to evolve and seasonal setup over the next two weeks not favourable for HSI.

Airtasker Ltd – Media deals drive positive revenue trends

By Research as a Service (RaaS)

  • Airtasker Limited (ASX:ART) is an online marketplace for local services, connecting people and businesses who need work done with people who want to work.
  • ART’s reported H1 FY25 results are messy, with a number of non-cash items including media capital spend distorting reported numbers.
  • On an adjusted basis revenue growth was 11%, with Airtasker marketplace growth closer to 15%.

Plover Bay (1523 HK): Brilliant FY24 Results/Growth To Continue

By Sameer Taneja

  • Plover Bay Technologies (1523 HK) reported FY24 revenues/profits up 23.9%/35.4% YoY. H2 FY24 revenue/profit growth was steady at 20%/20% YoY.
  • On the conference call, the company did not provide explicit guidance for FY25 but mentioned that growth has been healthy for the six weeks of FY25 and will continue. 
  • Trading at 19x/16.4x FY24/25e (assuming 20% growth and flat margins), with a dividend yield of 5.8% and 10% of the market cap in net cash, the stock is worth exploring.

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Mar 03
0

Daily Brief Energy/Materials: JX Advanced Metals, Chifeng Jilong Gold Mining, Copper, Iron Ore and more

By | Daily Briefs, Energy & Materials Sector

In today’s briefing:

  • JX Advanced Metals IPO Preview
  • Chifeng Jilong Gold Mining (6693 HK) IPO: H-Share Offering Details & Index Inclusion
  • Chifeng Jilong A/H Listing: Why Not Own International Peers Instead?
  • Copper Tracker 3rd March 2025: China TSF And PMI Rebound A Major Boost, All Eyes On the NPC
  • Iron Ore Tracker (04-Mar-2025): PMI Rebound And China TSF Looking Good, All Eyes On NPC

JX Advanced Metals IPO Preview

By Douglas Kim

  • JX Advanced Metals (5016 JP) is seeking to raise about ¥460 billion in the upcoming IPO on the Tokyo Stock Exchange. The indicative IPO price is ¥862 per share.
  • The final IPO pricing will be on 10 March. JX Advanced Metals will be listed on 19 March. Eneos is selling as many as 534.9 million shares in the IPO.
  • The company has a strong customer base. It is a key supplier to TSMC, Samsung, Intel, SK Hynix, and Micron for sputtering targets and high-purity metals.

Chifeng Jilong Gold Mining (6693 HK) IPO: H-Share Offering Details & Index Inclusion

By Brian Freitas

  • Chifeng Jilong Gold Mining (600988 CH) has launched an H-share offering that could raise up to US$554m if the offer size adjustment option and overallocation option are both exercised.
  • The price range of HK$13.72-HK$15.83/share is a discount of 18.7-29.5% to the A-shares and between 17-26% of the offering will be allocated to cornerstone investors.
  • The small issue size will result in the stock staying out the global indices for the foreseeable future. Inclusion in Southbound Stock Connect will take place in April.

Chifeng Jilong A/H Listing: Why Not Own International Peers Instead?

By Nicholas Tan

  • Chifeng Jilong Gold Mining (600988 CH) , a gold mining company in China, is now looking to raise up to US$419m in its H-share listing in Hong Kong.
  • It operates six gold mines in Asia and Africa and has been listed on the Shenzhen Stock Exchange since 2004.
  • We have covered the company and deal background in our previous notes. In this note, we talk about the IPO pricing.

Copper Tracker 3rd March 2025: China TSF And PMI Rebound A Major Boost, All Eyes On the NPC

By Sameer Taneja

  • Copper prices remained tepid last week, owing to a weak global market sentiment with Trump’s tariffs. Funds cut their bullish Comex positions as premiums crashed by 40% from the peak.  
  • China’s Manufacturing PMI rose to 50.2 in February, surpassing the expected 49.9, while the record Total Social Financing in January also contributed significantly to this positive outlook.
  • The NPC 2025, taking place on March 5, will be closely watched for China’s fiscal policy roadmap, which is expected to influence commodity consumption.

Iron Ore Tracker (04-Mar-2025): PMI Rebound And China TSF Looking Good, All Eyes On NPC

By Sameer Taneja

  • The Trump administration’s announcement of a 60% tariff on Chinese steel imports affected the market sentiment, leading to a 3% decline in iron ore prices last week.
  • China’s Manufacturing PMI rose to 50.2 in February, surpassing the expected 49.9, while the record Total Social Financing in January also contributed significantly to this positive outlook.
  • Iron ore prices can remain rangebound (95-110 USD/ton), with the positive demand-side catalysts from China outweighing the long-term supply fears from Rio’s Simandou project. 

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