Daily Briefs

The U.S. oil and gas rig count remained unchanged for the fourth straight week at 589 for the week ending on 03/Jan.
For the week ending 27/Dec, U.S. oil production moderately fell to 13.57m bpd from 13.59m bpd the week prior.
The U.S. oil rig count declined by one to 482, while active gas rigs increased by one to 103. Producers added one rig in Texas and cut one in Louisiana.

AutoZone Inc.: A Tale Of Supply Chain Optimization and Tariff Management! – Major Drivers

AutoZone’s first quarter results for 2025 present a mixed bag of outcomes shaped by challenging economic conditions and strategic focus on growth initiatives, both domestically and internationally.
The overall sales for the quarter grew by 2.1% year-over-year, reaching $4.3 billion, with a marginal improvement in overall same-store sales, up by 1.8%.
Within the U.S., the company experienced subdued growth in domestic same-store sales at 0.3% and a 3.2% rise in commercial sales.

Nike’s Shocking Struggles: Will CEO Elliott Hill’s Turnaround Strategy Work?

Nike Inc. is at a pivotal moment as new CEO Elliott Hill endeavors to reverse a persistent sales slump and restore the company’s dominance in the highly competitive sportswear market.
Hill, who returned to Nike after a three-decade career with the company, has pledged to refocus on sports-centric innovation and strengthen the brand’s core offerings.
However, his task is compounded by significant missteps from his predecessor, John Donahoe, and mounting competitive threats that threaten Nike’s market position.

[US Nat Gas Options Weekly 2025/01] Henry Hub Drops Amid Volatile Weather and Demand Forecasts

U.S. natural gas prices dipped 0.9% for the week ending 03/Jan, as robust early-week gains were eroded by volatile weather forecasts.
Henry Hub Put/Call volume ratio jumped to 1.37 from 1.05 (27/Dec) the previous week as call volumes increased by 86.4% WoW, while put volumes surged by 141.6%.
Henry Hub OI PCR rose to 0.87 from 0.85 compared to last week. Call OI inched up by 4.9% WoW, while put OI increased by 8.5%.

American Eagle Outfitters: Expansion of Aerie Stores & New Categories As A Key Growth Catalyst! – Major Drivers

American Eagle Outfitters reported a positive performance for the third quarter of 2024, continuing the momentum seen in the earlier part of the year.
The company’s focus on its “Powering Profitable Growth” strategy seems to be paying dividends, as evidenced by a 3% growth in comparable sales for the quarter.
This continued momentum across both brands and various sales channels reflects a strong brand positioning among its target demographics.

[US Crude Oil Options Weekly 2025/01] WTI Rises for Second Straight Week on Improved Demand Outlook

By Small Cap Consumer Research

WTI futures rose 4.8% for the week ending 03/Jan, led by improving outlook on China and declining U.S. crude oil stockpiles.
WTI options Put/Call volume ratio rose to 1.03 from 0.97 (27/Dec) last week, as call volume grew by 57.9% WoW while put volume increased by 68.1%.  
WTI OI PCR rose to 0.93 from 0.89 last week. Call OI inched up by 4.1% WoW, while put OI rose by 8.9%.

BBW: 2025 Signposts: Drivers Apparent; Reiterate Buy Rating, $58 Price Target

We are reiterating our Buy rating, $58 price target and projections for Build-A-Bear Workshop as we look ahead to 2025.
After a series of records in 2024, driven by continued product innovation, third party/international franchisee store expansion, subtle shifts in the owned store base and further operating improvements, we believe Build-A-Bear is poised to drive even higher overall returns (already among the best in specialty retailing) and remain among the key leaders in experiential retailing; even after reaching all-time highs in 2024, we believe BBW, trading at 11.2 our FY25 EPS, remains undervalued, and we reiterate our Buy rating and $58 price target.

BCLI: Plans Coming Together for Phase 3b Trial of NurOwn in ALS

By Zacks Small Cap Research

On December 30, 2024, BrainStorm Cell Therapeutics, Inc. (BCLI) held a conference call to provide a corporate update.
The company remains on track to conduct a Phase 3b trial of NurOwn in patients with amyotrophic lateral sclerosis (ALS) to support a potential Biologics License Application (BLA) filing.
During 2024, BrainStorm reached agreement with the FDA on a Special Protocol Assessment (SPA) and the CMC aspects of the upcoming trial, which significantly de-risks the regulatory aspects of the program.

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Jan 07

Daily Brief China: Greatview Aseptic Packaging, Horizon Robotics, Meituan, Bloks Group, Tencent, BeiGene , Fosun Tourism, BYD, China Boqi Environmental Hol and more

By Smartkarma Daily Briefs | China, Daily Briefs

In today’s briefing:

GA Pack (468 HK): Shandong Xinjufeng’s Offer Gets a Boost as Mengniu Sells Down
HSCI Index Rebalance Preview and Stock Connect: Updated Potential Changes in March 2025
EQD | Meituan (3690 HK) In the Bear’s Grip – Popular Option Strategies and Top Trades
Bloks Group Likely To Price IPO at High End of Range: What To Expect From First Trading-Day?
Quiddity Leaderboard HSTECH Mar 25: One High-Conviction Change; US$475mn One-Way
EQD | Tencent (700 HK) – Popular Option Strategies and Top Trades, Low Vola Presents Opportunity
Quiddity Leaderboard Hang Seng Index: Healthcare Is Still the Most Under-Represented Industry Group
Fosun Tourism (1992.HK) – The Logic Behind the Share Buyback and the Outlook
BYD (1211 HK): Vehicle Deliveries Up by 40% in 2024
Boqi Env (2377 HK): Takeaways From The Partial Offer

GA Pack (468 HK): Shandong Xinjufeng’s Offer Gets a Boost as Mengniu Sells Down

China Mengniu Dairy Co (2319 HK), Greatview Aseptic Packaging (468 HK)‘s largest customer, has ceased to be a substantial shareholder. Mengniu opposes the Shandong Xinjufeng offer.
This development suggests that Mengniu has low confidence in a management competing offer and will likely shift its business away from GA Pack.
The stake sale will help the Shandong Xinjufeng Technology Packaging (301296 CH) offer turn unconditional as it will nudge minorities to tender, partly due to GA Pack’s uncertain outlook.

HSCI Index Rebalance Preview and Stock Connect: Updated Potential Changes in March 2025

We see 38 potential and close adds and 51 potential and close deletes for the Hang Seng Composite Index in March. Some of the stocks are close on market cap/liquidity.
There have been many new listings in the last weeks of December. Some of them are fairly large and will be added and that increases the number of potential deletions.
There are stocks that have a very high percentage of holdings via Stock Connect and there could be some unwinding prior to the stocks becoming Sell-only.

EQD | Meituan (3690 HK) In the Bear’s Grip – Popular Option Strategies and Top Trades

By Gaudenz Schneider

This Insight analyses Meituan (3690 HK) tailor-made option strategies traded over the last five trading days on the Hong Kong Exchange. Strategy highlights and volatility insights are provided.
The vast majority of traders opt for bearish strategies, but there are examples of contrarian trades.
Although one-month implied volatility is historically low in its 7th percentile, it is above realized volatility. With an implied just below 40%, option premiums are significant in absolute terms.

Bloks Group Likely To Price IPO at High End of Range: What To Expect From First Trading-Day?

By Andrei Zakharov

Bloks Group, a founder-led toy maker and owner of trusted brand “Blokees”, will price its IPO this week. Shares are set to begin trading on January 10, 2025.
I would expect strong first trading-day return as HK public offering was already 5,000+ times oversubscribed at high end of marketed price range.
I believe investors are rationally optimistic about the company. Bloks Group IPO attracted a surge of retail investors, and the stock may skyrocket above IPO price on first trading-day.

Quiddity Leaderboard HSTECH Mar 25: One High-Conviction Change; US$475mn One-Way

The HSTECH Index tracks the performance of the top 30 technology companies listed in Hong Kong that have high business exposure to certain technology themes.
In this insight, we take a look at the final rankings of potential ADDs and potential DELs for the March 2025 index rebal event.
We expect one change for the HSTECH index in March 2025 and combined with capping flows currently see US$475mn one-way flows.

EQD | Tencent (700 HK) – Popular Option Strategies and Top Trades, Low Vola Presents Opportunity

By Gaudenz Schneider

This Insight analyzes Tencent (700 HK) tailor-made option strategies traded over the last five trading days on the Hong Kong Exchange. Strategy highlights and volatility insights are provided.
Historically low implied volatility favors bullish or bearish long volatility strategies.
Calendar Spreads are a popular strategy. Bulls and bears are both very active in the market, expressing their views through trades.

Quiddity Leaderboard Hang Seng Index: Healthcare Is Still the Most Under-Represented Industry Group

The Hang Seng Index is the benchmark index for Hong Kong stocks. It follows a highly-subjective selection process which makes it difficult to predict index changes.
In this insight, we take a look at a group of names with reasonably high likelihood of being involved in index changes during the next review in March 2025.
The index changes for the March 2025 index rebal event will be announced after market close on 21st February 2025.

Fosun Tourism (1992.HK) – The Logic Behind the Share Buyback and the Outlook

By Xinyao (Criss) Wang

Without the buyback, it’s difficult to obtain reasonable market pricing by simply transferring the equity of Fosun Tourism or the equity of core assets, which is detrimental to Fosun Group.
To maximize returns, a wiser approach is to privatize Fosun Tourism first, then at a higher valuation level to spin off, sell, relist, attract strategic investment to “rationalize” the valuation.
Heavy assets of Taicang/Lijiang projects would be sold. For core assets Club Med/Atlantis, the future plans could be different. It’s necessary to take a look at the Share Alternative Option.

BYD (1211 HK): Vehicle Deliveries Up by 40% in 2024

By Ming Lu

BYD’s deliveries grew by 51% YoY in December 2024 and 41% in the year 2024.
The Brazil event will slow down overseas expansion, but overseas deliveries account for only 10% of total vehicles.
We believe the stock has an upside of 39% and a price target of HK$356 for the next twelve months.

Boqi Env (2377 HK): Takeaways From The Partial Offer

By David Blennerhassett

Back on the 23rd October, flue gas treatment play China Boqi Environmental Hol (2377 HK) announced a buyback of 15% of shares out, at HK$1.20/share, a 16.5% premium to undisturbed.
The Offer Doc was dispatched on the 28th November, and the Offer closed on the 3rd January.
304.6mn shares tendered against the buyback of 150.858mn shares, or a pro-ration of 49.53%. However, how the public shareholders tendered may provide a gauge for future Hong Kong Partial Offers.

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Jan 07

Daily Brief India: Sarla Performance Fibers Ltd, SGX Rubber Future TSR20, JSW Energy Ltd, Synergy Green Industries and more

By Smartkarma Daily Briefs | Daily Briefs, India

In today’s briefing:

Sarla Performance Fibers – India’s Prominent Player in Man Made Textile Yarn – Key Growth Drivers
Farmers Launch Stir Phase II; Rubber Board Warns Of Price Fall
Why Does JSW Energy’s Battery Foray Go into Deep Trouble?
The Beat Ideas: Synergy Green~Riding the Windmill Capex Theme

Sarla Performance Fibers – India’s Prominent Player in Man Made Textile Yarn – Key Growth Drivers

By Sreemant Dudhoria

Sarla Performance Fibers Limited is engaged in the manufacturing and export of high-performance polyester and nylon yarns.
Increasing capacity utilisation towards higher value-added products, such as Nylon 6 & 66 and high-tenacity yarn, is expected to boost revenue and improve operating margin.
A valuation re-rating is also possible if the return metrics (RoE, RoCE) improve as the utilisation level rise.

Farmers Launch Stir Phase II; Rubber Board Warns Of Price Fall

By Vinod Nedumudy

Farmer body asks farmers not to go for ‘summer tapping’
Rubber Board exhorts farmers to up tapping to discourage imports
Farmers allege Rubber Board catering to interests of tire-makers

Why Does JSW Energy’s Battery Foray Go into Deep Trouble?

By Nimish Maheshwari

JSW Energy faces a significant regulatory setback with the rejection of its proposed tariff for a 500 MW/1000 MWh Battery Energy Storage System project by the Central Electricity Regulatory Commission.
This decision highlights the vulnerability of renewable energy ventures to regulatory changes, potentially leading to project delays, tariff renegotiations, and broader market uncertainty, which could impact India’s renewable energy goals.
The impact of this could be multiple ripple effects including project delays, financial loss, viability concerns of battery storage business.

The Beat Ideas: Synergy Green~Riding the Windmill Capex Theme

By Sudarshan Bhandari

Synergy Green Industries (SYGIL IN) Expansion of foundry to add new capacity to supply new customers (Envision). Company plans to increase its capacity from 30,000 MT to 45,000 MT.
Machining unit to help improve margins as 50% of total machining would be done in-house. Solar power to add to EBITDA margins as electricity costs account for 8% of revenue.
Execution by management has been commendable due to experience in the industry.

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Jan 07

Daily Brief Japan: Fujitsu General, Kaken Pharmaceutical, Hiday Hidaka and more

By Smartkarma Daily Briefs | Daily Briefs, Japan

In today’s briefing:

Fujitsu General (6755) – Long Sale Process Finally Over. Unexciting but Uncomplicated Deal.
Fujitsu General (6755 JP): Fujitsu (6702 JP) Supports a Light Tender Offer
Kaken Pharmaceutical (4521 JP): Johnson Deal Is Good For Future, But For Now Bleak H2 Ahead
Hiday Hidaka (7611 JP): Q3 FY02/25 flash update

Fujitsu General (6755) – Long Sale Process Finally Over. Unexciting but Uncomplicated Deal.

By Travis Lundy

In December 2019, an article in slightly odd Japanese business magazine Sentaku (選択) suggested Fujitsu Ltd (6702 JP) would imminently seek to address dual listings of subs.
Some subs went early. The auction for Fujitsu General (6755 JP) started spring 2023, failed, started again, failed again, and the shares languished.
Two years later we have a deal. Large privately-held company Paloma-Rheem Holdings is the buyer in a split-price deal which comes at a decent but not exorbitant premium.

Fujitsu General (6755 JP): Fujitsu (6702 JP) Supports a Light Tender Offer

Fujitsu General (6755 JP) announced a preconditional tender offer from Paloma Rheem Holdings Co at JPY2,808 per share, a 23.5% premium to the last close.
The offer, which is preconditional on regulatory approvals and will open in early July, is attractive compared to historical trading ranges and peer multiples.
The process is lacking as Fujitsu declined to conduct an auction. The offer is below the midpoint of the IFA DCF valuation range, and the Board requested price.

Kaken Pharmaceutical (4521 JP): Johnson Deal Is Good For Future, But For Now Bleak H2 Ahead

By Tina Banerjee

Kaken Pharmaceutical (4521 JP) enters into a license agreement with J&J for the global development, manufacturing, and commercialization of a STAT6 program, which is being developed by Kaken.
Kaken will advance KP-723 to the completion of Phase I clinical trials, after which J&J will take over. Kaken will receive an upfront payment of $30M from J&J.
The deal is a boost for future revenue flow but offers no near-term respite for revenue loss from NHI drug price revision and generic competition for top selling products.

Hiday Hidaka (7611 JP): Q3 FY02/25 flash update

By Shared Research

Revenue increased by 13.5% YoY to JPY41.0bn, with record highs in cumulative Q3 FY02/25 revenue and profits.
Hidakaya restaurants contributed JPY38.9bn, or 95% of total revenue, with a 14.4% YoY increase in cumulative Q3.
The company plans two new store openings in Q4, with a focus on recruitment and HR development.

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Jan 07

Daily Brief Energy/Materials: Greatview Aseptic Packaging, Korea Zinc, Crude Oil, Gold, SGX Rubber Future TSR20, Synergy Green Industries, China Hongqiao, Natural Gas, New Zealand Energy and more

By Smartkarma Daily Briefs | Daily Briefs, Energy & Materials Sector

In today’s briefing:

GA Pack (468 HK): Shandong Xinjufeng’s Offer Gets a Boost as Mengniu Sells Down
NPS Stake in Korea Zinc Revealed: EGM Vote Locked, Short Play in Focus
U.S. Rig Count Steady for the Fourth Consecutive Week
EQD | Asia January Vol Roadmap: Outsized Moves, Outsized Volatility
Farmers Launch Stir Phase II; Rubber Board Warns Of Price Fall
The Beat Ideas: Synergy Green~Riding the Windmill Capex Theme
[US Crude Oil Options Weekly 2025/01] WTI Rises for Second Straight Week on Improved Demand Outlook
China Hongqiao – Event Flash – Roadshowing USD 3Y Regs Notes – Lucror Analytics
[US Nat Gas Options Weekly 2025/01] Henry Hub Drops Amid Volatile Weather and Demand Forecasts
New Zealand Energy Corp. (TSX-V: NZ): Tariki-5A well test performance towards the upper end of expectations

GA Pack (468 HK): Shandong Xinjufeng’s Offer Gets a Boost as Mengniu Sells Down

China Mengniu Dairy Co (2319 HK), Greatview Aseptic Packaging (468 HK)‘s largest customer, has ceased to be a substantial shareholder. Mengniu opposes the Shandong Xinjufeng offer.
This development suggests that Mengniu has low confidence in a management competing offer and will likely shift its business away from GA Pack.
The stake sale will help the Shandong Xinjufeng Technology Packaging (301296 CH) offer turn unconditional as it will nudge minorities to tender, partly due to GA Pack’s uncertain outlook.

NPS Stake in Korea Zinc Revealed: EGM Vote Locked, Short Play in Focus

By Sanghyun Park

NPS’s stake has dropped, and most minority shareholders are passive. NPS might oppose cumulative voting, so Choi’s chances of getting 67% support at the EGM on the 23rd are slim.
The showdown is between MBK’s 14 picks and Choi’s 7. Without cumulative voting, even with NPS’s shares, Choi’s chances of beating MBK are slim.
If you’re short on Korea Zinc, holding seems fine. Backwardation in Jan-Feb futures isn’t steep, so a new position before the EGM could also be worth a shot.

U.S. Rig Count Steady for the Fourth Consecutive Week

The U.S. oil and gas rig count remained unchanged for the fourth straight week at 589 for the week ending on 03/Jan.
For the week ending 27/Dec, U.S. oil production moderately fell to 13.57m bpd from 13.59m bpd the week prior.
The U.S. oil rig count declined by one to 482, while active gas rigs increased by one to 103. Producers added one rig in Texas and cut one in Louisiana.

EQD | Asia January Vol Roadmap: Outsized Moves, Outsized Volatility

By John Ley

Gold is historically a strong January performer, rising 65% of the time. Nifty declines 70% of the time in January with all January’s since 2019 negative.
Wide gap in Kospi vs Nikkei implied vol when viewed in light of their respective price performances over the past 1 and 3 months.
Most markets typically see peak volatility in the first week of the month with prices typically trading heavy in the 2nd half of the month.

Farmers Launch Stir Phase II; Rubber Board Warns Of Price Fall

By Vinod Nedumudy

Farmer body asks farmers not to go for ‘summer tapping’
Rubber Board exhorts farmers to up tapping to discourage imports
Farmers allege Rubber Board catering to interests of tire-makers

The Beat Ideas: Synergy Green~Riding the Windmill Capex Theme

By Sudarshan Bhandari

Synergy Green Industries (SYGIL IN) Expansion of foundry to add new capacity to supply new customers (Envision). Company plans to increase its capacity from 30,000 MT to 45,000 MT.
Machining unit to help improve margins as 50% of total machining would be done in-house. Solar power to add to EBITDA margins as electricity costs account for 8% of revenue.
Execution by management has been commendable due to experience in the industry.

[US Crude Oil Options Weekly 2025/01] WTI Rises for Second Straight Week on Improved Demand Outlook

WTI futures rose 4.8% for the week ending 03/Jan, led by improving outlook on China and declining U.S. crude oil stockpiles.
WTI options Put/Call volume ratio rose to 1.03 from 0.97 (27/Dec) last week, as call volume grew by 57.9% WoW while put volume increased by 68.1%.  
WTI OI PCR rose to 0.93 from 0.89 last week. Call OI inched up by 4.1% WoW, while put OI rose by 8.9%.

China Hongqiao – Event Flash – Roadshowing USD 3Y Regs Notes – Lucror Analytics

By Trung Nguyen

This morning, China Hongqiao held a roadshow to market USD benchmark-sized three-year RegS bonds.
The expected issuance size is USD 300-400 mn (capped at USD 400 mn).
The order book is reported at USD 2 bn (including USD 395 mn interest from the 15 joint global coordinators).

[US Nat Gas Options Weekly 2025/01] Henry Hub Drops Amid Volatile Weather and Demand Forecasts

U.S. natural gas prices dipped 0.9% for the week ending 03/Jan, as robust early-week gains were eroded by volatile weather forecasts.
Henry Hub Put/Call volume ratio jumped to 1.37 from 1.05 (27/Dec) the previous week as call volumes increased by 86.4% WoW, while put volumes surged by 141.6%.
Henry Hub OI PCR rose to 0.87 from 0.85 compared to last week. Call OI inched up by 4.9% WoW, while put OI increased by 8.5%.

New Zealand Energy Corp. (TSX-V: NZ): Tariki-5A well test performance towards the upper end of expectations

By Auctus Advisors

• Tariki-5A has been perforated over the top 8 m of the 20 m of gas bearing sands intersected.
Gas sales have commenced.
• The well initially flowed at estimated rates increasing from 2 to 5.5 mmcf/d during clean-up.

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Jan 07

Daily Brief Utilities: China Resources Power, JSW Energy Ltd, Ppl Corp and more

By Smartkarma Daily Briefs | Daily Briefs, Utilities Sector

In today’s briefing:

Quiddity Leaderboard HSCEI Mar 25: China Resources Power (836 HK) Could Replace Li Ning (2331 HK)
Why Does JSW Energy’s Battery Foray Go into Deep Trouble?
PPL Corporation: Successful Integration of Rhode Island Energy & Other Major Drivers

Quiddity Leaderboard HSCEI Mar 25: China Resources Power (836 HK) Could Replace Li Ning (2331 HK)

The HSCEI serves as a benchmark to reflect the overall performance of the top 50 “Mainland China” securities listed in Hong Kong.
In this insight, we take a look at the final rankings for the HSCEI potential ADDs and potential DELs for the index rebal event in March 2025.
We expect one change for the HSCEI index in March 2025 and capping flows of US$136mn one-way.

Why Does JSW Energy’s Battery Foray Go into Deep Trouble?

By Nimish Maheshwari

JSW Energy faces a significant regulatory setback with the rejection of its proposed tariff for a 500 MW/1000 MWh Battery Energy Storage System project by the Central Electricity Regulatory Commission.
This decision highlights the vulnerability of renewable energy ventures to regulatory changes, potentially leading to project delays, tariff renegotiations, and broader market uncertainty, which could impact India’s renewable energy goals.
The impact of this could be multiple ripple effects including project delays, financial loss, viability concerns of battery storage business.

PPL Corporation: Successful Integration of Rhode Island Energy & Other Major Drivers

PPL Corporation reported its third-quarter 2024 financial results, showing a mixed performance amid ongoing operational initiatives and strategic planning.
The company posted GAAP earnings of $0.29 per share, slightly down from $0.31 per share in the same quarter of the previous year.
Adjusted for special items, earnings from ongoing operations were $0.42 per share, a decrease of $0.01 compared to the third quarter of 2023.

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Jan 07

Most Read: Shinko Electric Industries, Horizon Robotics, Fujitsu General, Korea Stock Exchange KOSPI 200, Japfa Comfeed Indonesia, LG CNS, Jio Financial Services, Sigma Healthcare, Greatview Aseptic Packaging and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

Shinko Electric (6967) – Waiting for a Package
HSTECH Index Rebalance Preview: One Constituent Change & US$884m Trade
Fujitsu General (6755) – Long Sale Process Finally Over. Unexciting but Uncomplicated Deal.
Fujitsu General (6755 JP): Fujitsu (6702 JP) Supports a Light Tender Offer
Korea Short Selling Comeback: How Pre-Registering Accounts Will Affect the Trading Scene
LQ45 Index Rebalance Preview (Jan 2025): Identifying Potential Index Changes
LG CNS IPO: Valuation Insights
NIFTY50 Index Rebalance Preview: Yuuge Flow & Impact; Positioning Mixed
S&P/ASX Index Rebalance Preview: Lots of Change; Could Be More with Sigma/CWG Merger
GA Pack (468 HK): Shandong Xinjufeng’s Offer Gets a Boost as Mengniu Sells Down

Shinko Electric (6967) – Waiting for a Package

By Travis Lundy

Shinko Electric Industries (6967 JP) has been on the block. 2nd Round Bids were apparently due last month, but with “Economic Security” considerations, one wonders if that stretches a bit.
The stock is now at the low end of its range vs Ibiden, and the timing is right for a deal which could give it a pop.
A “split price” takeover seems reasonable as a structure. I expect upside. Still.

HSTECH Index Rebalance Preview: One Constituent Change & US$884m Trade

The review period for the March rebalance of the Hang Seng TECH Index (HSTECH INDEX) ended on 31 December.
There could be one constituent change in March. With capping changes, that could lead to a one-way turnover of 2.6% resulting in a round-trip trade of HK$6.88bn (US$884m).
Horizon Robotics (9660 HK) is also a potential inclusion to the HSCI Index in March, though inclusion in Southbound Stock Connect will only come through in May.

Fujitsu General (6755) – Long Sale Process Finally Over. Unexciting but Uncomplicated Deal.

By Travis Lundy

In December 2019, an article in slightly odd Japanese business magazine Sentaku (選択) suggested Fujitsu Ltd (6702 JP) would imminently seek to address dual listings of subs.
Some subs went early. The auction for Fujitsu General (6755 JP) started spring 2023, failed, started again, failed again, and the shares languished.
Two years later we have a deal. Large privately-held company Paloma-Rheem Holdings is the buyer in a split-price deal which comes at a decent but not exorbitant premium.

Fujitsu General (6755 JP): Fujitsu (6702 JP) Supports a Light Tender Offer

Fujitsu General (6755 JP) announced a preconditional tender offer from Paloma Rheem Holdings Co at JPY2,808 per share, a 23.5% premium to the last close.
The offer, which is preconditional on regulatory approvals and will open in early July, is attractive compared to historical trading ranges and peer multiples.
The process is lacking as Fujitsu declined to conduct an auction. The offer is below the midpoint of the IFA DCF valuation range, and the Board requested price.

Korea Short Selling Comeback: How Pre-Registering Accounts Will Affect the Trading Scene

By Sanghyun Park

KRX and FSS confirmed the NSDS is ready and account registration numbers will be issued, confirming short selling will resume on April 1st, despite no official FSC statement yet.
Today’s buzz is about pre-registration for short selling, with FSS tracking accounts down to individual desks. This could limit short-selling flexibility, despite addressing the overseas lending issue.
Exposing too much info on short-selling accounts could shrink securities lending participants, causing supply-demand imbalances, spiking borrowing fees, and creating unique trading opportunities early on.

LQ45 Index Rebalance Preview (Jan 2025): Identifying Potential Index Changes

The review period for the LQ45 Index January rebalance ended 31 December. The changes should be announced the last week of January, becoming effective after the close on 31 January.
We highlight 4 potential inclusions and 4 potential exclusions for the index at the rebalance. The actual number of changes could be lower at 2-3 a side.
Nearly all stocks will have over 1x ADV to trade from passive trackers if they are added to or deleted from the index.

LG CNS IPO: Valuation Insights

LG CNS (LGCNSZ KS), the IT service unit of LG Corp (003550 KS), seeks to raise up to US$837 million through a primary/secondary offering.
We previously discussed the IPO in LG CNS IPO: The Bull Case and LG CNS IPO: The Bear Case.
We examine the syndicate’s valuation methodology. Our analysis suggests that LG CNS is attractive in the IPO price range. We would participate in the IPO.

NIFTY50 Index Rebalance Preview: Yuuge Flow & Impact; Positioning Mixed

Zomato (ZOMATO IN) and Jio Financial Services (JIOFIN IN) should replace Bharat Petroleum Corp (BPCL IN) and Britannia Industries (BRIT IN) in the NIFTY Index (NIFTY INDEX) in March.
Passive NIFTY Index trackers will need to trade at least 4.5x ADV and 8.8x delivery volume on the stocks. There is some opposite flow from Nifty Next 50 Index trackers.
There does not appear to be a lot of positioning in Jio Financial Services (JIOFIN IN) and the stock could outperform its peers over the next few months.

S&P/ASX Index Rebalance Preview: Lots of Change; Could Be More with Sigma/CWG Merger

Nearing the end of the review period, there could be 36 adds/deletes across the S&P/ASX family of indices in March.
Passive trackers will need to trade a lot of stock in the forecast changes, with the impact being especially large for the changes to the S&P/ASX 200 and S&P/ASX 300.
Completion of the merger with Chemist Warehouse in February will set off huge passive buying in Sigma Healthcare (SIG AU) over the February to June period.

GA Pack (468 HK): Shandong Xinjufeng’s Offer Gets a Boost as Mengniu Sells Down

China Mengniu Dairy Co (2319 HK), Greatview Aseptic Packaging (468 HK)‘s largest customer, has ceased to be a substantial shareholder. Mengniu opposes the Shandong Xinjufeng offer.
This development suggests that Mengniu has low confidence in a management competing offer and will likely shift its business away from GA Pack.
The stake sale will help the Shandong Xinjufeng Technology Packaging (301296 CH) offer turn unconditional as it will nudge minorities to tender, partly due to GA Pack’s uncertain outlook.

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Jan 07

Daily Brief Industrials: Keppel Corp, China Boqi Environmental Hol, Sarla Performance Fibers Ltd and more

By Smartkarma Daily Briefs | Daily Briefs, Industrials

In today’s briefing:

Keppel – Is There More to the Keppel O&M Deal than Meets the Eye?
Boqi Env (2377 HK): Takeaways From The Partial Offer
Sarla Performance Fibers – India’s Prominent Player in Man Made Textile Yarn – Key Growth Drivers

Keppel – Is There More to the Keppel O&M Deal than Meets the Eye?

By Tan Yee Peng

This report aims to examine the rationale and structure of the transformative deal in February 2023 when Keppel spun out its Offshore and Marine (“O&M”) division.
This AssetCo transaction was selected because (1) The substantial size, at S$4.4bn, was equivalent to 14% of Keppel’s assets or 37% of its shareholder equity as of Dec 2022.
(2) Highly complex transaction with extremely generous financing terms granted by Keppel, which received no cash for selling legacy rigs at its carrying cost.

Boqi Env (2377 HK): Takeaways From The Partial Offer

By David Blennerhassett

Back on the 23rd October, flue gas treatment play China Boqi Environmental Hol (2377 HK) announced a buyback of 15% of shares out, at HK$1.20/share, a 16.5% premium to undisturbed.
The Offer Doc was dispatched on the 28th November, and the Offer closed on the 3rd January.
304.6mn shares tendered against the buyback of 150.858mn shares, or a pro-ration of 49.53%. However, how the public shareholders tendered may provide a gauge for future Hong Kong Partial Offers.

Sarla Performance Fibers – India’s Prominent Player in Man Made Textile Yarn – Key Growth Drivers

By Sreemant Dudhoria

Sarla Performance Fibers Limited is engaged in the manufacturing and export of high-performance polyester and nylon yarns.
Increasing capacity utilisation towards higher value-added products, such as Nylon 6 & 66 and high-tenacity yarn, is expected to boost revenue and improve operating margin.
A valuation re-rating is also possible if the return metrics (RoE, RoCE) improve as the utilisation level rise.

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✓ Custom Watchlists
✓ Company Data and News
✓ Events & Webinars

Jan 07

Daily Brief TMT/Internet: Horizon Robotics, LG Corp, Tencent, Black Sesame International Holding, ASML Holding NV, AAC Technologies Holdings, Koninklijke KPN and more

By Smartkarma Daily Briefs | Daily Briefs, TMT/Internet

In today’s briefing:

HSCI Index Rebalance Preview and Stock Connect: Updated Potential Changes in March 2025
LG Corp Plans to Buy 250 Billion Won of LG Chem and LG Electronics + 2 Major LG Group IPOs in 2025
Quiddity Leaderboard HSTECH Mar 25: One High-Conviction Change; US$475mn One-Way
EQD | Tencent (700 HK) – Popular Option Strategies and Top Trades, Low Vola Presents Opportunity
Quiddity Leaderboard Hang Seng Internet & IT March 25: 4 Changes Likely; Some Names Have High-Impact
Tech Supply Chain Tracker (07-Jan-2025): ASML CEO visits TSMC next week.
AAC Technologies – ESG Report – Lucror Analytics
What’s News in Amsterdam – 6 January (Ahold Delhaize | ING | KPN | PostNL / IDS | TomTom | Dutch housing market | Corporate agenda)

HSCI Index Rebalance Preview and Stock Connect: Updated Potential Changes in March 2025

We see 38 potential and close adds and 51 potential and close deletes for the Hang Seng Composite Index in March. Some of the stocks are close on market cap/liquidity.
There have been many new listings in the last weeks of December. Some of them are fairly large and will be added and that increases the number of potential deletions.
There are stocks that have a very high percentage of holdings via Stock Connect and there could be some unwinding prior to the stocks becoming Sell-only.

LG Corp Plans to Buy 250 Billion Won of LG Chem and LG Electronics + 2 Major LG Group IPOs in 2025

By Douglas Kim

On 6 January, LG Corp announced that it plans to purchase 250 billion won worth of LG Electronics and LG Chem from 6 January to 7 March 2025.
The share buybacks would represent 1.5% and 0.7% of LG Chem and LG Electronics’ market cap, respectively.
Our base case NAV valuation analysis of LG Corp suggests implied NAV of 14.7 trillion won or NAV per share of 93,430 won, which is 25% higher than current price.

Quiddity Leaderboard HSTECH Mar 25: One High-Conviction Change; US$475mn One-Way

The HSTECH Index tracks the performance of the top 30 technology companies listed in Hong Kong that have high business exposure to certain technology themes.
In this insight, we take a look at the final rankings of potential ADDs and potential DELs for the March 2025 index rebal event.
We expect one change for the HSTECH index in March 2025 and combined with capping flows currently see US$475mn one-way flows.

EQD | Tencent (700 HK) – Popular Option Strategies and Top Trades, Low Vola Presents Opportunity

By Gaudenz Schneider

This Insight analyzes Tencent (700 HK) tailor-made option strategies traded over the last five trading days on the Hong Kong Exchange. Strategy highlights and volatility insights are provided.
Historically low implied volatility favors bullish or bearish long volatility strategies.
Calendar Spreads are a popular strategy. Bulls and bears are both very active in the market, expressing their views through trades.

Quiddity Leaderboard Hang Seng Internet & IT March 25: 4 Changes Likely; Some Names Have High-Impact