Daily Briefs

KRX plans to launch the Value-Up Index as two separate indices: the “Excellent Value-Up Index” and the “Promising Value-Up Index.”
The universe will include 150 constituents from KOSPI 200 and KOSDAQ 150. Allocation between indices is undecided, with sector limits on number and weight confirmed.
The key indicators (ROE, PBR, shareholder return rate) remain unchanged. The Promising Index’s weights are undisclosed, but the Excellent Index favors financial and automotive stocks.

The Biggish Sep 2024 “Thursday-Friday Trade”

Every year it’s the same trade. This year it is Thursday and Friday. There is some funkiness to Monday too.
There is meaningful directional buying on one day, which then kind of gets stretched a bit. This year, circumstances suggest high confidence buying should be at the top end.
This year, because circumstances, I expect the trade is a lot larger than last year. I’d say ¥1.6trln.

Tokyo Metro (9023 JP) IPO: The Bull Case

Tokyo Metro (TKYMETRO JP), a mass transit operator, is seeking to raise up to US$2.3 billion. Pricing is on 15 October, and the listing is on 23 October.
Tokyo Metro is held 53.42% by the Minister of Finance and 46.58% by the Tokyo Metropolitan Government.
The bull case rests on a core high-quality asset, future growth drivers, top-quartile profitability, high FCF generation, and peer-leading dividend payout.

Why MBK’s Move into Local Hostile Takeover Scene Matters: Focus on SK Inc and Lotte Corp

The new 100% mandatory tender offer rule could push buyers to lower premiums for major shareholders, potentially increasing hostile takeover attempts as costs get shared with minority shareholders.
It looks like MBK is eyeing this situation as a chance to redefine their strategy. This really shows how serious MBK is about the Korea Zinc deal.
Watch for top-tier assets available via hostile takeovers, particularly companies like SK Inc and Lotte Corp, where low shareholder stakes may lead to management conflicts.

What Are Locals Saying About Potential Allies to Choi Family in Fight for Korea Zinc?

In this insight, we discuss three particular allies that could help the Choi family that have been highlighted by the local media including Hanwha, KIS, and Softbank.
The Hanwha Group is one of the largest shareholders of Korea Zinc. In addition, Hanwha Group Vice Chairman Kim Dong-Kwan has a close relationship with Korea Zinc Chairman Choi Yoon-Beom.
Korea Zinc is planning to hold an important press conference on the 24 September to reveal its position on the tender offer of Korea Zinc shares by MBK.

All the Scoop on the Korea Value-Up Index

The index focuses on qualitative factors like capital efficiency and shareholder returns, but efforts to impose sector balance may have overextended its market benchmark role.
Some companies not fitting the ‘value-up’ narrative got included, while market favorites were sidelined by sector rankings, which is puzzling given the index’s original goal.
Still, with rebalancing cut down to once a year, we should expect the flow impact on the index names to hit harder than initially thought compared to their sector peers.

China’s [Maybe] Biggish [Quasi?] Bazooka

Today, in a press conference held jointly by the Governor of the PBOC, the Director of the Financial Regulatory Bureau, and Chairman of the CSRC, China announced market stimulus measures.
The PBOC will cut RRR 50bp, the 7-day repo rate 20bp, guide effective mortgage rate cuts, and lower minimum down payments on second homes. There are other commercial RE measures.
Three major stock market measures were announced. A RMB500bn collateral swap programme, PBOC backing RMB300bn bank loans for corps to buy stocks, and a Plan to increase Central Huijin investments.

Korea Exchange Announces The Korea Value Up Index

Korea Exchange announced the long awaited Korea Value Up Index (“K Value Up Index”) (composed of 100 stocks) today.
Korea Exchange used a 5-step screening process to select the 100 companies in this index including market cap, profitability, shareholder returns, market evaluation, and capital efficiency.
This Value Up index is part of the bigger “Corporate Value Up ” program in Korea. These efforts to improve Korea’s corporate governance policies is a marathon, not a sprint.

Tech: Japan’s Biggest IPO in 6 Years, Kioxia, Is Off. Here Is the Likely Reason

By Neil Campling

Significant peer price performance declines leaves IPO valuation stretched, the desired discount multiple to attract interest has suddenly become a premium
Investor interest in memory semiconductors, AI derivative stocks has cooled
Peer price sell-offs are extreme but could quickly change, reflecting the highly cyclical nature of the sector

Korea Value Up Index – Surprising Inclusions and Exclusions

There are some major surprises (both inclusions and exclusions) in the Korea Value Up index.
In particular, the telecom sector (SK Telecom and KT) and large cap holding companies (Samsung C&T and LG Corp) are surprising exclusions in the index.
There are many surprising inclusions in the Korea Value Up Index. We provide 30 companies are surprising inclusions in the Korea Value Up Index (19 KOSDAQ and 11 KOSPI listed).

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Sep 25

Daily Brief Industrials: Shanghai Shenzhen CSI 300 Inde, Tokyo Metro, Watts Water Technologies A, Aaon Inc, Avis Budget Group, API Group , Applied Industrial Tech and more

By Smartkarma Daily Briefs | Daily Briefs, Industrials

In today’s briefing:

China’s [Maybe] Biggish [Quasi?] Bazooka
Tokyo Metro IPO – The Positives – Quasi-Monopoly Status
Watts Water Technologies: Initiation Of Coverage – These Are The 4 Biggest Challenges In Its Path! – Major Drivers
AAON Inc.: Initiation Of Coverage – A Tale Of Refrigerant Transition and Product Evolution! – Major Drivers
Avis Budget Group: Initiation Of Coverage – Why Its Pricing Strategies and Market Adaptation Strategies Make Us Bullish? – Major Drivers
APi Group Corporation: Initiation Of Coverage – Increasing Project Margins through Enhanced Customer and Project Selection & Other Major Drivers
Applied Industrial Technologies: Initiation Of Coverage – Expansion of Engineered Solutions & Major Drivers

China’s [Maybe] Biggish [Quasi?] Bazooka

Today, in a press conference held jointly by the Governor of the PBOC, the Director of the Financial Regulatory Bureau, and Chairman of the CSRC, China announced market stimulus measures.
The PBOC will cut RRR 50bp, the 7-day repo rate 20bp, guide effective mortgage rate cuts, and lower minimum down payments on second homes. There are other commercial RE measures.
Three major stock market measures were announced. A RMB500bn collateral swap programme, PBOC backing RMB300bn bank loans for corps to buy stocks, and a Plan to increase Central Huijin investments.

Tokyo Metro IPO – The Positives – Quasi-Monopoly Status

By Sumeet Singh

Tokyo Metro (9023 JP)‘s shareholders aim to raise up to US$2.3bn in its upcoming Japan IPO.
Tokyo Metro (TKM) is one of the two metro network operators in the Tokyo region. It operates nine subway lines with a total of 180 stations.
In this note, we talk about the positive aspects of the deal.

Watts Water Technologies: Initiation Of Coverage – These Are The 4 Biggest Challenges In Its Path! – Major Drivers

Watts Water Technologies, Inc. delivered a strong-second quarter performance for 2024, with record sales, adjusted operating income, and earnings per share.
The results were boosted by better-than-expected organic sales in the Americas and APMEA regions, although partly offset by weaker sales in Europe.
The company’s ability to manage inventory and productivity effectively contributed to the positive financial results.

AAON Inc.: Initiation Of Coverage – A Tale Of Refrigerant Transition and Product Evolution! – Major Drivers

AAON, Inc. achieved significant financial and operational milestones in the second quarter of 2024, demonstrating a robust performance despite a challenging macroeconomic environment.
The company’s production issues from the previous quarter were largely addressed, allowing for increased volume output and productivity throughout its segments, leading to record sales, earnings, and backlog.
Baptista Research looks to evaluate the different factors that could influence the company’s price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology.

Avis Budget Group: Initiation Of Coverage – Why Its Pricing Strategies and Market Adaptation Strategies Make Us Bullish? – Major Drivers

Avis Budget Group reported its earnings for the second quarter of 2024, revealing mixed results that draw attention to the company’s ongoing strategy and challenges in the evolving rental car market.
The firm reported quarterly revenue surpassing $3 billion and adjusted EBITDA of $214 million.
These figures come amidst various strategic maneuvers intended to optimize fleet efficiency and profitability.

APi Group Corporation: Initiation Of Coverage – Increasing Project Margins through Enhanced Customer and Project Selection & Other Major Drivers

APi Group Corporation recently reported its second quarter 2024 earnings, encompassing various operational and financial aspects.
Distinctly evident from the discourse were the efforts and strategic path embarked upon by the company, marked by their pursuit of a recurring revenue model, margin improvement initiatives, and disciplined M&A activities.
Throughout the discourse, company leadership provided detailed insights into operational dynamics, financial results, strategic initiatives, and future prospects.

Applied Industrial Technologies: Initiation Of Coverage – Expansion of Engineered Solutions & Major Drivers

Applied Industrial Technologies ended its fiscal year 2024 with strong financial and operational results, despite facing a challenging and uncertain market.
The company’s focus on executing strategic initiatives and maintaining strong customer relationships played a key role in these achievements.
This assessment provides an objective overview of the company’s latest quarterly performance, touching on both positive developments and areas that require attention.

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Sep 25

Daily Brief Energy/Materials: Deepak Fertilisers & Petro, SGX Rubber Future TSR20, Newmont Mining, Natural Gas, Crude Oil, Criterium Energy, ADF Group and more

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

In today’s briefing:

The Beat Ideas: Deepak Fertilizers – Specialty Chemical, Capex, Debottlenecking!
China Opens War Front In Halo Butyl Rubber Trade
SPX Bull Trap Setting Up?; Neutral Outlook Intact; Keeping an Open Mind. Buys in Gold Miners
[US Nat Gas Options Weekly 2024/38] Henry Hub Rallies on Tight Storage Gains and Supply Cut Concerns
[US Crude Oil Options Weekly 2024/38] WTI Crude Rallies on Fed Rate Cut and Stronger Demand Outlook
Criterium Energy Ltd (TSX-V: CEQ): High production in September. The drilling programme has commenced
DRX: $55M in New Contracts Signed

The Beat Ideas: Deepak Fertilizers – Specialty Chemical, Capex, Debottlenecking!

By Sudarshan Bhandari

Deepak Fertilisers & Petro (DFPC IN) commissioned 500KT of ammonia plant that will remove their dependence on import of critical raw material.
DFPCL’s TAN capacity stands at 629 KTPA, with plans to increase it to 1,000 KTPA by FY26 through a new facility in Gopalpur, Odisha.
Deepak Fertilisers & Petro (DFPC IN) is about to complete its restructuring by creating a separate subsidiary for mining chemicals, which in future they may plan to list separately.

China Opens War Front In Halo Butyl Rubber Trade

By Farah Miller

ADD slapped on the US, the EU, the UK, and Singapore imports
ADD probe initiated against Canada, Japan and India
Russia to be a major beneficiary of the measures

SPX Bull Trap Setting Up?; Neutral Outlook Intact; Keeping an Open Mind. Buys in Gold Miners

By Joe Jasper

The S&P 500 (SPX) is approaching 5783, which is the upper-end of an important target/resistance area we have discussed for over a month (5670-5783).
2007 SPX topping analog has tracked the current market almost perfectly, suggests a 2% or less move above the prior all-time high set in July at 5670 before topping (i.e.,5783)
SPX is “breaking out” which is bullish, but time and time again we have seen bull/bear traps (false breakouts/breakdowns) at major turning points. Bull trap confirmed on break below 5670

[US Nat Gas Options Weekly 2024/38] Henry Hub Rallies on Tight Storage Gains and Supply Cut Concerns

By Suhas Reddy

US natural gas prices rose by 5.6% for the week ending 20/Sep, driven by a shrinking storage surplus and an improved demand outlook.
Henry Hub Put/Call volume ratio rose to 1.69 (20/Sep) from 1.45 the previous week as put volumes rose by 102.7% WoW, while call volumes grew by 74.4%.
Put OI surged for contracts expiring on 25/Sep, Oct, and Nov. Call OI rose for expiries on Dec, Jan, Feb, and Mar.

[US Crude Oil Options Weekly 2024/38] WTI Crude Rallies on Fed Rate Cut and Stronger Demand Outlook

By Suhas Reddy

WTI futures increased 3.4% for the week ending 20/Sep, driven by the Fed’s rate cut, supply disruptions in Libya, and falling US crude stockpiles, which alleviated demand concerns.
WTI options Put/Call volume ratio fell to 0.83 (20/Sep) from 1.30 (13/Sep) as put volume fell by 45.8% WoW while call volume fell by 14.6%.
WTI OI PCR grew to 0.77 for the week ending 20/Sep from 0.76 on 13/Sep. Call OI fell 16.7% WoW and put OI declined by 16.1%.

Criterium Energy Ltd (TSX-V: CEQ): High production in September. The drilling programme has commenced

By Auctus Advisors

Current production has reached 950 bbl/d, representing an increase of 90 bbl/d since August.
This reflects the very good performance of the work-over programme with 98 bbl/d incremental production from three new workovers in Tranche 3 from early August.
Overall, the programme (three tranches with a total of 11 work-overs so far) has delivered 227 bbl/d of incremental production.

DRX: $55M in New Contracts Signed

By Atrium Research

ADF announced $55M in new contracts across Quebec and the U.S. Midwest, including additional work for its U.S. pharmaceutical client.
Today’s announcement gives us further confidence that ADF can continue to grow the backlog as the infrastructure spending cycle prolongs.
ADF trades at 3.5x EBITDA, the lowest multiple we have seen since covering the stock and a major discount to its peers and precedent transactions.

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Sep 25

Daily Brief TMT/Internet: Samsung Electronics, Kioxia Holdings , Taiwan Semiconductor (TSMC), Silverlake Axis , Via Technologies, yutori , Enfusion, Compal Electronics, Boku Inc, Genpact Ltd and more

By Smartkarma Daily Briefs | Daily Briefs, TMT/Internet

In today’s briefing:

Korea Exchange Announces The Korea Value Up Index
Tech: Japan’s Biggest IPO in 6 Years, Kioxia, Is Off. Here Is the Likely Reason
TSMC: Caution as GEM Funds Switch to Underweight
Silverlake Axis (SILV SP): Circular Now Out. IFA Says Fair
Via Technologies GDR Offering – US$212m GDR Offering Will Be Easily Digested
Yutori Expands Through M&A Too
Is Enfusion About to Be Snapped Up? Here’s Why Acquirers Could Be Lining Up!
Tech Supply Chain Tracker (25-Sep-2024): Lenovo invests US$1 billion in AI over 3 years.
Boku – H124 revenue growth supports FY24 outlook
Genpact Limited: Initiation Of Coverage – These Are The 4 Biggest Factors Driving Its Performance In 2025 & Beyond! – Financial Forecasts

Korea Exchange Announces The Korea Value Up Index

Korea Exchange announced the long awaited Korea Value Up Index (“K Value Up Index”) (composed of 100 stocks) today.
Korea Exchange used a 5-step screening process to select the 100 companies in this index including market cap, profitability, shareholder returns, market evaluation, and capital efficiency.
This Value Up index is part of the bigger “Corporate Value Up ” program in Korea. These efforts to improve Korea’s corporate governance policies is a marathon, not a sprint.

Tech: Japan’s Biggest IPO in 6 Years, Kioxia, Is Off. Here Is the Likely Reason

By Neil Campling

Significant peer price performance declines leaves IPO valuation stretched, the desired discount multiple to attract interest has suddenly become a premium
Investor interest in memory semiconductors, AI derivative stocks has cooled
Peer price sell-offs are extreme but could quickly change, reflecting the highly cyclical nature of the sector

TSMC: Caution as GEM Funds Switch to Underweight

By Steven Holden

Average EM fund weights and active fund ownership hits record highs in TSMC
However, investor caution is starting to surface, with 13.4% of funds shifting to underweight in the last six months, driving the net underweight to a 15-year low of -1.21%.
Net outflows of $3 billion over the past six months, led by Invesco, JP Morgan, and MFS, and with four times more sellers than buyers.

Silverlake Axis (SILV SP): Circular Now Out. IFA Says Fair

By David Blennerhassett

On the 26 August, Goh Peng Ooi, founder and executive chair, made a voluntary unconditional general Offer for the 25.9% in Silverlake Axis (SILV SP) not held.
The Offer Doc for this S$0.36/share cash Offer was dispatched on the 26th August. The Circular is also now out, which incorporates the IFA opinion.
Trading through terms. The first close is the 7th October. I don’t expect a bump, and the share price gradually retraces back to cash terms.

Via Technologies GDR Offering – US$212m GDR Offering Will Be Easily Digested

By Clarence Chu

Via Technologies (2388 TT) is looking to raise US$212m in its global depository receipts (GDRs) offering. Proceeds will be used to purchase overseas raw materials, and to replenish working capital.
Similar to previous GDR listings, the deal has had a long drawn out approval process. Thus, the deal is a very well flagged one.
The deal is a relatively small one to digest at 5.8 days of the stock’s three month ADV.

Yutori Expands Through M&A Too

By Michael Causton

Zozo-Owned Yutori has just acquired a womenswear brand and plans a series of acquisitions, with ambitions to become the Zozo of the younger generation.
So far, it has grown very fast on the back of strong support from Japan’s youth looking for street fashion but this latest move will reach into new segments.
Unlike Zozo, Yutori is investing in a chain of stores which have helped push awareness and sales and is the right strategy for Japan’s store-addicted consumers.

Is Enfusion About to Be Snapped Up? Here’s Why Acquirers Could Be Lining Up!

Enfusion reported its second quarter 2024 earnings with results aligning closely with the company’s prior guidance and consistent performance expectations in the medium term.
The company posted $49.5 million in revenue, marking a 16% year-over-year growth.
The adjusted EBITDA came in at $10.1 million, translating to a 20.5% margin.

Tech Supply Chain Tracker (25-Sep-2024): Lenovo invests US$1 billion in AI over 3 years.

By Tech Supply Chain Tracker

Lenovo commits $1B to AI advancements, strengthens F1 collaboration, showcasing innovation in technology sector.
Garmin experiences growth in SEA sales for smart wearables, indicating a maturing market and strong consumer demand.
Taiwan’s Transcom gains from global surge in military spending, develops world’s first open-source 6G core network, while Stellantis partners Maserati with China’s Chery amidst struggles in German automotive industry.

Boku – H124 revenue growth supports FY24 outlook

By Edison Investment Research

Boku reported 24% y-o-y revenue growth in H124, with both digital wallet/account-to-account (A2A) payments and direct carrier billing (DCB) payments growing at double-digit rates. Adjusted EBITDA grew 18% y-o-y with a margin of 30.1%. With ambitions to become the best localised payment partner for global commerce, Boku continues to invest in enhancing its product portfolio and strengthening its compliance and treasury functions. A pipeline of new digital wallet/A2A launches for major merchants and seasonal factors support continued strong growth in H224 and 2025. With FY24 outlook maintained, our revenue and adjusted EBITDA forecasts are unchanged.

Genpact Limited: Initiation Of Coverage – These Are The 4 Biggest Factors Driving Its Performance In 2025 & Beyond! – Financial Forecasts

Genpact Limited’s Q2 2024 earnings report and conference call, led by CEO BK Kalra and CFO Michael Weiner, offered insights into the company’s performance and strategy, presenting a mixed outlook with both notable strengths and areas for improvement.
Genpact reported Q2 revenue of $1.18 billion, reflecting a 6% year-over-year increase, surpassing their guidance.
This growth was driven by strong performance across Data-Tech-AI and digital operations.

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Sep 25

Daily Brief Consumer: Xingda International, MINISO Group Holding , Crocs Inc, Samvardhana Motherson Automotive Systems Group BV, Guess? Inc, Meituan and more

By Smartkarma Daily Briefs | Consumer, Daily Briefs

In today’s briefing:

Xingda (1899 HK): No Premium Voluntary Conditional Offer to Ward off a Hostile Holder
Xingda (1899 HK)’s HK$1.30/Share Offer – Say What?
MINISO Bets Big on Yonghui. Should Investors Be Concerned About the Acquisition?
Choice Equities’ Mitchell Scott provides update on $CROX thesis and thoughts on Magnite $MGNI
Morning Views Asia: Samvardhana Motherson International Ltd, Wynn Macau Ltd, Yankuang Energy Group
GES: Snapping the Store – London – Fall Elevation Rising; Reiterate Buy, $29 PT
Morning Views Asia: Meituan

Xingda (1899 HK): No Premium Voluntary Conditional Offer to Ward off a Hostile Holder

By Small Cap Consumer Research

Xingda International (1899 HK) has disclosed a voluntary conditional offer from Mr Liu Jinlan (Chairman) at HK$1.30 per share, which aligns with the last close price.
The offer is conditional on the offeror and concert parties representing more than 50% of voting rights. The offeror and concert parties represent 37.03% of voting rights.
The offer is a reaction to Mr Zhao Yue’s “hostile” emergence as a substantial shareholder. It is unattractive and will require a bump to satisfy the minimum acceptance condition.

Xingda (1899 HK)’s HK$1.30/Share Offer – Say What?

By David Blennerhassett

After tyre component manufacturer Xingda International (1899 HK) was suspended recently pursuant to the Takeovers Code, an Offer seemed more likely, not another Partial Offer.
On cue, Liu Jinlan, chairman and executive director, plus concert parties (collectively holding 37.03%), have tabled a voluntary conditional Offer (50% acceptance hurdle). But the price? A surprising zero-premium HK$1.30/share
However, this Offer is a pre-emptive strike against former employee Yue Zhao, who holds 9.24%; and was recently appointed ED and vice-chairman of Shougang Concord (103 HK), Xingda’s major competitor.

MINISO Bets Big on Yonghui. Should Investors Be Concerned About the Acquisition?

By Devi Subhakesan

MINISO‘s acquisition of a 29.4% stake in the loss-making supermarket chain Yonghui for USD 890 million has been viewed negatively by investors, leading to a sharp decline in Miniso’s stock.
The deal’s size, combined with Yonghui Superstores (601933 CH) unprofitable track record and MINISO(9896 HK) ‘s unexpected move into the low-margin, highly competitive supermarket space, has likely fueled investor concerns.
However, we believe the acquisition provides Miniso with a strategic opportunity for growth and diversification to a sector that remains vital in the offline retail landscape at undemanding valuations.

Choice Equities’ Mitchell Scott provides update on $CROX thesis and thoughts on Magnite $MGNI

By Yet Another Value Podcast

Mitchell discusses the success and potential of Crocs, noting its growth and potential for continued success
Andrew asks if Crocs is a fad or a sustainable business, with Mitchell emphasizing the brand’s importance and continued innovation
Mitchell highlights Crocs’ success during the pandemic and discusses potential growth strategies for the future, including the importance of jibbets.

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

Morning Views Asia: Samvardhana Motherson International Ltd, Wynn Macau Ltd, Yankuang Energy Group

By Leonard Law, CFA

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

Samvardhana Motherson International Ltd
Wynn Macau Ltd
Yankuang Energy Group

GES: Snapping the Store – London – Fall Elevation Rising; Reiterate Buy, $29 PT

We are reiterating our Buy rating, $29 price target and projections after reviewing Guess?
stores in London.
As we near the peak Fall season, Guess?

Morning Views Asia: Meituan

By Leonard Law, CFA

Meituan

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Sep 25

Daily Brief Financials: Woori Financial Group , K Bank, Korea Stock Exchange KOSPI 200, Ethereum and more

By Smartkarma Daily Briefs | Daily Briefs, Financials

In today’s briefing:

All the Scoop on the Korea Value-Up Index
New Fast Entry Rule for KOSPI 200 & KOSDAQ 150: Post-IPO Price Swings Ramping Up
K Bank IPO: Valuation Insights
EQD | A Very Weak KOSPI 200 Is Ready to Pull Back Again
Crypto Crisp: The Final Liquidity Crunch, Then Up Only

All the Scoop on the Korea Value-Up Index

The index focuses on qualitative factors like capital efficiency and shareholder returns, but efforts to impose sector balance may have overextended its market benchmark role.
Some companies not fitting the ‘value-up’ narrative got included, while market favorites were sidelined by sector rankings, which is puzzling given the index’s original goal.
Still, with rebalancing cut down to once a year, we should expect the flow impact on the index names to hit harder than initially thought compared to their sector peers.

New Fast Entry Rule for KOSPI 200 & KOSDAQ 150: Post-IPO Price Swings Ramping Up

Besides ranking in the top 50 by market cap, it must also meet a minimum float-adjusted cap for K200 fast entry: at least 50% of the 50th-ranked stock’s market cap.
Even if new stocks meet KRX’s float cap, their actual float share volume may still be low, risking inflation from local pension funds’ preemptive passive inflows post-listing.
This could reduce predictability for KOSPI 200 fast entry, increasing price swings post-listing and forcing traders to develop new volatility strategies after IPOs.

K Bank IPO: Valuation Insights

K Bank (279570 KS) is a Korean internet bank. It has launched an IPO to raise up to US$734 million.
We previously discussed the IPO in K Bank IPO: The Bear Case and K Bank IPO: The Bull Case.
We examine the syndicate’s valuation methodology. Our analysis suggests that K Bank is unattractively valued in the IPO price range. We would pass on the IPO.

EQD | A Very Weak KOSPI 200 Is Ready to Pull Back Again

By Nico Rosti

The last 2 weeks have been painful for investors that were LONG the KOSPI 200 INDEX, and this week is not very promising either.
The index has advanced less than 3% since its last WEEKLY negative Close on September 6th.
The index is in its 3rd consecutive week up (to be confirmed this Friday at the Close) but the current pattern usually ends on the third week up and reverses.

Crypto Crisp: The Final Liquidity Crunch, Then Up Only

By Mads Eberhardt

Following the U.S. Federal Reserve’s decision last Wednesday to lower the dollar interest rate by 50 basis points, the crypto market has responded positively.
Bitcoin has climbed 5.56%, while Ethereum has surged 15.25%.
The market conditions are increasingly aligning for a major upward move.

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Sep 25

Daily Brief Industrials: Shanghai Shenzhen CSI 300 Inde, Tokyo Metro, Watts Water Technologies A, Aaon Inc, Avis Budget Group, API Group , Applied Industrial Tech and more

By Smartkarma Daily Briefs | Daily Briefs, Industrials

In today’s briefing:

China’s [Maybe] Biggish [Quasi?] Bazooka
Tokyo Metro IPO – The Positives – Quasi-Monopoly Status
Watts Water Technologies: Initiation Of Coverage – These Are The 4 Biggest Challenges In Its Path! – Major Drivers
AAON Inc.: Initiation Of Coverage – A Tale Of Refrigerant Transition and Product Evolution! – Major Drivers
Avis Budget Group: Initiation Of Coverage – Why Its Pricing Strategies and Market Adaptation Strategies Make Us Bullish? – Major Drivers
APi Group Corporation: Initiation Of Coverage – Increasing Project Margins through Enhanced Customer and Project Selection & Other Major Drivers
Applied Industrial Technologies: Initiation Of Coverage – Expansion of Engineered Solutions & Major Drivers

China’s [Maybe] Biggish [Quasi?] Bazooka

Today, in a press conference held jointly by the Governor of the PBOC, the Director of the Financial Regulatory Bureau, and Chairman of the CSRC, China announced market stimulus measures.
The PBOC will cut RRR 50bp, the 7-day repo rate 20bp, guide effective mortgage rate cuts, and lower minimum down payments on second homes. There are other commercial RE measures.
Three major stock market measures were announced. A RMB500bn collateral swap programme, PBOC backing RMB300bn bank loans for corps to buy stocks, and a Plan to increase Central Huijin investments.

Tokyo Metro IPO – The Positives – Quasi-Monopoly Status

By Sumeet Singh

Tokyo Metro (9023 JP)‘s shareholders aim to raise up to US$2.3bn in its upcoming Japan IPO.
Tokyo Metro (TKM) is one of the two metro network operators in the Tokyo region. It operates nine subway lines with a total of 180 stations.
In this note, we talk about the positive aspects of the deal.

Watts Water Technologies: Initiation Of Coverage – These Are The 4 Biggest Challenges In Its Path! – Major Drivers

Watts Water Technologies, Inc. delivered a strong-second quarter performance for 2024, with record sales, adjusted operating income, and earnings per share.
The results were boosted by better-than-expected organic sales in the Americas and APMEA regions, although partly offset by weaker sales in Europe.
The company’s ability to manage inventory and productivity effectively contributed to the positive financial results.

AAON Inc.: Initiation Of Coverage – A Tale Of Refrigerant Transition and Product Evolution! – Major Drivers

AAON, Inc. achieved significant financial and operational milestones in the second quarter of 2024, demonstrating a robust performance despite a challenging macroeconomic environment.
The company’s production issues from the previous quarter were largely addressed, allowing for increased volume output and productivity throughout its segments, leading to record sales, earnings, and backlog.
Baptista Research looks to evaluate the different factors that could influence the company’s price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology.

Avis Budget Group: Initiation Of Coverage – Why Its Pricing Strategies and Market Adaptation Strategies Make Us Bullish? – Major Drivers

Avis Budget Group reported its earnings for the second quarter of 2024, revealing mixed results that draw attention to the company’s ongoing strategy and challenges in the evolving rental car market.
The firm reported quarterly revenue surpassing $3 billion and adjusted EBITDA of $214 million.
These figures come amidst various strategic maneuvers intended to optimize fleet efficiency and profitability.

APi Group Corporation: Initiation Of Coverage – Increasing Project Margins through Enhanced Customer and Project Selection & Other Major Drivers

APi Group Corporation recently reported its second quarter 2024 earnings, encompassing various operational and financial aspects.
Distinctly evident from the discourse were the efforts and strategic path embarked upon by the company, marked by their pursuit of a recurring revenue model, margin improvement initiatives, and disciplined M&A activities.
Throughout the discourse, company leadership provided detailed insights into operational dynamics, financial results, strategic initiatives, and future prospects.

Applied Industrial Technologies: Initiation Of Coverage – Expansion of Engineered Solutions & Major Drivers

Applied Industrial Technologies ended its fiscal year 2024 with strong financial and operational results, despite facing a challenging and uncertain market.
The company’s focus on executing strategic initiatives and maintaining strong customer relationships played a key role in these achievements.
This assessment provides an objective overview of the company’s latest quarterly performance, touching on both positive developments and areas that require attention.

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Sep 25

Daily Brief Health Care: Capitol Health, Green Cross, Upstream Bio, Ainos , Medicus Pharma , Sichuan Kelun Pharmaceutical, Essa Pharma , Basilea Pharmaceutica Ag, Aethlon Medical and more

By Smartkarma Daily Briefs | Daily Briefs, Healthcare

In today’s briefing:

Capitol Health (CAJ AU): ACCC Overhang as Scheme Meeting Set for 31 October
Green Cross (006280 KS): Alyglo Is Accelerating U.S. Market Entry; Base Business Shows Strength
Upstream Bio IPO Preview: Severe Asthma/CRSwNP Program Advancing
Ainos, Inc. – Veldona Sjogren’s Study Start to Quickly Follow Oral Warts
Medicus Pharma Ltd. – Medicus Pharma Randomizes First Patient in SKNJCT-003 Phase 2 Clinical Trial
Sichuan Kelun Pharmaceutical (002422.CH) – The Real Breakthrough Point in Valuation Is ADC Pipeline
EPIX: Masofaniten Combination Therapy with Enzalutamide Increases rPFS Increasing Valuation to 33 per Share
AEMD has three sites in Australia that are moving towards near-term patient enrollment.
Basilea Pharmaceutica – BARDA backs Basilea’s anti-infectives programme
AEMD has three sites in Australia that are moving towards near-term patient enrollment.

Capitol Health (CAJ AU): ACCC Overhang as Scheme Meeting Set for 31 October

The Capitol Health (CAJ AU) IE considers Integral Diagnostics (IDX AU)’s merger proposal (0.12849 Integral shares per Capitol share) fair and reasonable.
While ACCC informal clearance is an overhang, the evidence suggests that clearance should be secured. The shareholder vote risk is low.
The offer terms are attractive. At the last close and for the 14 November payment, the gross/annualised spread is 4.7%/37.3%.

Green Cross (006280 KS): Alyglo Is Accelerating U.S. Market Entry; Base Business Shows Strength

By Tina Banerjee

Green Cross (006280 KS) has gained access to 80% of privately insured members in the U.S. for blood product Alyglo, which has been included in formularies of three major insurers.
Green Cross targets to generate $50M revenue from Alyglo this year. The target seems to be conservative. The company further aims to sustain annual growth of 50%+, which is achievable.
The company reported sequential improvement in 2Q24, with 17% QoQ revenue growth and significant improvement in gross margin. Revenue growth of 7–8% is expected during 2024–2026.

Upstream Bio IPO Preview: Severe Asthma/CRSwNP Program Advancing

By Andrei Zakharov

Upstream Bio, a clinical-stage biotech company developing novel therapies for inflammatory and allergic diseases, filed for an IPO in the United States.
The biotech firm was backed by premier investors, including OrbiMed, Access Industries, Maruho Co., Samsara BioCapital, Omega Funds, and Enavate Sciences, among others.
I believe that company’s lead compound, verekitug (UPB-101), has a broader commercial opportunity than many investors appreciate.

Ainos, Inc. – Veldona Sjogren’s Study Start to Quickly Follow Oral Warts

By Water Tower Research

Taiwan Veldona human study to start in Sjogren’s.
Ainos will initiate a Veldona clinical study in Taiwan for primary Sjogren’s syndrome in December 2024.
This follows the announcement of an oral warts in HIV+ clinical study planned for November 2024.

Medicus Pharma Ltd. – Medicus Pharma Randomizes First Patient in SKNJCT-003 Phase 2 Clinical Trial

Medicus Pharma Ltd. (TSXV:MDCX) is focused on acquiring or partnering with life-science companies that are developing novel therapeutics for unmet healthcare needs that are already in the clinical trial stage.
Management plans fast-track these specific therapies through FDA clinical trials toward commercialization.
The company’s first acquisition was SkinJect, which has a novel, patented transdermal patch for the treatment of BCC.

Sichuan Kelun Pharmaceutical (002422.CH) – The Real Breakthrough Point in Valuation Is ADC Pipeline

By Xinyao (Criss) Wang

The imagination brought to the market by Kelun’s traditional businesses (infusion business, antibiotics and bulk pharmaceutical chemicals, generic drugs) is not high. So, the only highlight is Kelun-bio’s ADC pipeline.
Considering that Kelun has lost pricing power due to VBP, and both Chuanning and Kelun bio have been spun off and listed independently, Kelun’s valuation will not be too high.
Our forecast is net profit attributable to shareholders in 2024-2026 is in the range of RMB3-5 billion. Reasonable market value is RMB30-50 billion. Subsidiary Kelun Bio is a better bet.

EPIX: Masofaniten Combination Therapy with Enzalutamide Increases rPFS Increasing Valuation to 33 per Share

On September 13, 2024, ESSA Pharma Inc. (EPIX) announced that updated dose escalation data for the ongoing Phase 1/2 clinical trial of masofaniten (EPI-7386) in combination with enzalutamide (Enz) was presented at the 2024 European Society for Medicinal Oncology (ESMO) Congress.
With 15.2 months of follow up, neither the median radiographic progression free survival (rPFS) or time to PSA progression (TTPP) have been reached.
Additionally, since the last trial update at ASCO-GU, one more patient has achieved PSA90, bringing the total to 14/16 (88%).

AEMD has three sites in Australia that are moving towards near-term patient enrollment.

AEMD has three sites in Australia that are moving towards near-term patient enrollment.
In Australia, Royal Adelaide is ready for enrollment and Kinara is expected to be open for enrollment shortly.
A third site in Sydney has submitted a request to be added to the study.

Basilea Pharmaceutica – BARDA backs Basilea’s anti-infectives programme

By Edison Investment Research

Basilea has bagged a multi-year agreement with the Biomedical Advanced Research and Development Authority (BARDA), potentially worth US$268m, to advance its anti-infectives franchise. The Other Transaction Agreement (OTA) will include an initial payment of US$29m to support clinical development work for fosmanogepix and BAL2062 as they prepare to enter the next phase of clinical development. The agreement will last up to 12 years and management expects it to cover 60% of its development costs related to the covered programmes over the period. These expected inflows have triggered another guidance upgrade for FY24 (revenue of CHF203m, from CHF196m previously) with a significant uptick in the bottom line on increased deferred taxes (net profit guided to be CHF60m vs CHF42m previously). We have adjusted our estimates to reflect the potential non-dilutive funding from BARDA, with our valuation increasing to CHF95.3/share, from CHF89.7/share previously.

AEMD has three sites in Australia that are moving towards near-term patient enrollment.