Daily Briefs

In its latest monthly update, China Traditional Chinese Medicine (570 HK) fleshes out the latest on the various PRC regulatory applications.
Comparing the two most recent monthly updates side-by-side, apart from modifying the documentation for the MOC and NDRC process; the SAMR filing has been formally accepted, as previously flagged.
The upshot? These regulatory approvals will be secured. The key question is whether this can take place before the 18th October pre-condition long stop date. Or an extension is required.

Pre-IPO LinkChem Technology – The Business and the Concerns Behind

By Xinyao (Criss) Wang

The sudden high growth in 2023 was benefited from the cooperation with related party Shandong LinkChem. Is the performance growth driven by LinkChem’s reliance on related party transactions sustainable?
LinkChem relies heavily on limited number of customers to contribute performance but the customer stability is not strong.Due to “low voice” in front of customers, cash flow is under pressure.
The barrier of terbium chloride product is not high and LinkChem will face fierce competition in the future, leading to decreasing YoY growth revenue. Valuation should be lower than peers.

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Sep 18

Daily Brief Japan: Trancom Co Ltd, TSE Tokyo Price Index TOPIX, SanBio Co Ltd, Tokyo Tsushin Inc and more

By Smartkarma Daily Briefs | Daily Briefs, Japan

In today’s briefing:

Trancom (9058) – Another Bain MBO Done Too Cheaply Where “Activist” Dalton Rolls In To The Bid
Trancom (9058 JP): Bain-Sponsored MBO at JPY10,300
Can Investors Tolerate the Current Pace of Capital Profitability Improvement?
SanBio Co Ltd (4592 JP): 1H FY01/25 flash update
Tokyo Communications Group (7359 JP) – 2Q Follow-Up – Sep 4, 2024

Trancom (9058) – Another Bain MBO Done Too Cheaply Where “Activist” Dalton Rolls In To The Bid

Logistics takeovers are hot this year. Any cutting-edge-of-efficiencies business in the space is likely to get a look. Trancom Co Ltd (9058 JP) is one.
But while logistics assets put into bidding competition like Alps Logistics and Chilled & Frozen get high EV/EBITDA multiples, MBO transactions without competition get done too cheaply.
Here again, an “Value Activist” “selling into the bid” to reinvest in the levered back end (at the takeover price). That tells you this deal is being done too cheaply.

Trancom (9058 JP): Bain-Sponsored MBO at JPY10,300

Trancom Co Ltd (9058 JP) recommended a Bain-sponsored MBO at JPY10,300, a 40.5% and 42.9% premium to the last close and undisturbed price, respectively.
The offer represents an all-time high but is lower than the midpoint of the IFA’s DCF valuation range and implies multiples below precedent transaction multiples.
While the Dalton irrevocable has a counteroffer clause, Mr Takebe (the largest shareholder) does not. Therefore, there is a low probability of a competing bidder emerging.

Can Investors Tolerate the Current Pace of Capital Profitability Improvement?

By Aki Matsumoto

Few Japanese stocks that have advantages in profitability has led to the fact that investors who invest long-term in quality stocks have few Japanese stocks to choose from globally.
It’s the profit margin on sales that has had the greatest impact on changes in ROE. Companies must now get their core competencies once again to regain competitiveness and profitability.
Even if business selection and investment in promising businesses were to be implemented, it would be several years before they bear fruit. For many investors, this pace seems unacceptable.

SanBio Co Ltd (4592 JP): 1H FY01/25 flash update

By Shared Research

In 1H FY01/25, the company reported no operating revenue, an operating loss of JPY1.6bn, and R&D expenses of JPY1.0bn.
Non-operating income was JPY401mn, primarily from foreign-exchange gains, while non-operating expenses totaled JPY16mn, resulting in a recurring loss of JPY1.2bn.
The company received conditional marketing approval for SB623 in July 2024, with expected sales to begin in Q1 FY01/26.

Tokyo Communications Group (7359 JP) – 2Q Follow-Up – Sep 4, 2024

By Sessa Investment Research

On August 7, 2024, Tokyo Communications Group, Inc. (hereafter, the “Company”) announced its 1H FY2024/12 financial results.
Net sales fell 7.3% YoY to ¥2,771 mn, EBITDA was in the red with a loss of ¥16 mn (versus a positive EBITDA of ¥132 mn in 1H FY2023/12), and operating loss was at ¥211 mn, coming in worse than the ¥30 mn loss recorded in 1H FY2023/12.
Ordinary losses increased from ¥56 mn to ¥88 mn, and 1H net loss expanded from¥87 mn to ¥158 mn.

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Sep 18

Most Read: Midea Group Co Ltd A, Trancom Co Ltd, Platinum Asset Management, Ventia, China Traditional Chinese Medicine, HK inno.N, Pacific Smiles and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

Midea Group (300 HK): IPO Open Now; Upcoming Index Flows
Midea Group (300 HK): Priced at Top End; Offer Size Adj Option Exercise Would Ease Index Fast Entry
Midea A/H Listing – Strong Demand for Quality Asset, Index Flows Could Help in the near Term
Trancom (9058) – Another Bain MBO Done Too Cheaply Where “Activist” Dalton Rolls In To The Bid
Platinum (PTM AU): Regal’s Indicative Offer
ASX100/ASX200 Index: Replacement Candidates for Virgin Money (VUK AU)
TCM (570 HK): Inching Towards Regulatory Sign-Off
Korea Value-Up Index Drops on the 24th: Hunt for the Winners in the KOSDAQ Global Index
Trancom (9058 JP): Bain-Sponsored MBO at JPY10,300
Pacific Smiles (PSQ AU): Genesis’ Off-Market A$1.90/Share Offer

Midea Group (300 HK): IPO Open Now; Upcoming Index Flows

The Midea Group (300 HK) IPO is being offered at a price range of HK$52-54.8/share, a discount of 20.9%-25% to Midea Group. That will raise US$3.28bn-US$3.46bn for the company.
Midea Group (300 HK) will not get Fast Entry to the HSCI but will be added to Southbound Stock Connect on 14 October once the price stabilisation period has ended.
Midea Group (300 HK) should get Fast Entry to one global index and that could lead to inclusion in the iShares China Large-Cap (FXI) (FXI US) too.

Midea Group (300 HK): Priced at Top End; Offer Size Adj Option Exercise Would Ease Index Fast Entry

Media reports indicate that Midea Group (000333 CH) has priced its H-shares IPO at HK$54.8/share, the top of the range. That is a 19.85% discount to the A-shares.
Reports also indicate that the IPO was oversubscribed multiple times with Hillhouse and GIC putting in large orders. That could result in the Offer Size Adjustment Option being exercised.
The exercise of the Offer Size Adjustment Option will take the IPO raise to HK$31bn (US$3.98bn) and index inclusion in some of the larger indices will become a lot easier.

Midea A/H Listing – Strong Demand for Quality Asset, Index Flows Could Help in the near Term

By Sumeet Singh

Midea Group Co Ltd A (000333 CH) raised around US$4.6bn in its H-share listing (including over-allocation), after the deal was upsized.
Midea Group is one of the world’s largest home appliance manufacturing companies with a presence in over 200 countries. Its A-shares have been listed since 2013.
We have covered the deal background in our previous notes. In this note, we talk about the trading dynamics.

Trancom (9058) – Another Bain MBO Done Too Cheaply Where “Activist” Dalton Rolls In To The Bid

Logistics takeovers are hot this year. Any cutting-edge-of-efficiencies business in the space is likely to get a look. Trancom Co Ltd (9058 JP) is one.
But while logistics assets put into bidding competition like Alps Logistics and Chilled & Frozen get high EV/EBITDA multiples, MBO transactions without competition get done too cheaply.
Here again, an “Value Activist” “selling into the bid” to reinvest in the levered back end (at the takeover price). That tells you this deal is being done too cheaply.

Platinum (PTM AU): Regal’s Indicative Offer

Platinum Asset Management (PTM AU) has confirmed, and is “considering the merits” of an unsolicited confidential, non-binding, indicative proposal from Regal Partners (RPL AU).
Regal has offered, by way of a Scheme, 0.274 Regal shares for every Platinum share. A $0.24/share special dividend is permitted, and added. Regal holds an estimated 5.1% stake.
With funds under management down 27% yoy, a merger with Regal is just the tonic for Platinum’s long-suffering investors. Founder Kerr Neilson, holding 21.7%, will have the final say.

ASX100/ASX200 Index: Replacement Candidates for Virgin Money (VUK AU)

Following its acquisition by Nationwide, Virgin Money UK Plc (VUK AU) is scheduled to stop trading on the ASX Ltd (ASX AU) after market close on 25 September.
Virgin Money UK Plc (VUK AU) is a member of the S&P/ASX100 Index and S&P/ASX 200 (AS51 INDEX) and there will be adhoc inclusions at the close on 25 September.
There are a couple of stocks vying for inclusion in each index and the next couple of days will determine which ones make it.

TCM (570 HK): Inching Towards Regulatory Sign-Off

In its latest monthly update, China Traditional Chinese Medicine (570 HK) fleshes out the latest on the various PRC regulatory applications.
Comparing the two most recent monthly updates side-by-side, apart from modifying the documentation for the MOC and NDRC process; the SAMR filing has been formally accepted, as previously flagged.
The upshot? These regulatory approvals will be secured. The key question is whether this can take place before the 18th October pre-condition long stop date. Or an extension is required.

Korea Value-Up Index Drops on the 24th: Hunt for the Winners in the KOSDAQ Global Index

By Sanghyun Park

KOSDAQ stocks are expected to make up 10-15% of the Value-Up Index, with 10-15 names benefiting. Even with smaller passive funds, the impact on these stocks could be significant.
KOSDAQ Global Index criteria overlap with the Value-Up Index, and KRX’s push suggests many KOSDAQ Global stocks will also appear in the Value-Up Index.
In the past 30 days, the KOSDAQ Global Index dropped 5.14%, but 5 of the top 10 gainers either announced value-ups or received value-up picks from brokers.

Trancom (9058 JP): Bain-Sponsored MBO at JPY10,300

Trancom Co Ltd (9058 JP) recommended a Bain-sponsored MBO at JPY10,300, a 40.5% and 42.9% premium to the last close and undisturbed price, respectively.
The offer represents an all-time high but is lower than the midpoint of the IFA’s DCF valuation range and implies multiples below precedent transaction multiples.
While the Dalton irrevocable has a counteroffer clause, Mr Takebe (the largest shareholder) does not. Therefore, there is a low probability of a competing bidder emerging.

Pacific Smiles (PSQ AU): Genesis’ Off-Market A$1.90/Share Offer

After Crescent Capital ‘s National Dental Care’ (NDC) A$2.05/share Offer, by way of Scheme, failed on the 9 August. it was just a question of when Genesis re-loaded its Offer.
Genesis has now announced a A$1.90/share off-market Offer ( its 29 July A$1.90/share approach was a Scheme), conditional on a 90% minimum acceptance. Pricing falls within the IE’ fair value range.
Pacific Smiles (PSQ AU)‘s board previously gave unanimous support for NDC’s prior A$1.90/share Offer. The question is whether the 90% hurdle is met. I think it will.

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Sep 18

Daily Brief Industrials: Trancom Co Ltd, Ventia, Young Poong Precision, Amaero International Ltd, JET2, Epwin Group PLC, Enviri and more

By Smartkarma Daily Briefs | Daily Briefs, Industrials

In today’s briefing:

Trancom (9058) – Another Bain MBO Done Too Cheaply Where “Activist” Dalton Rolls In To The Bid
ASX100/ASX200 Index: Replacement Candidates for Virgin Money (VUK AU)
Trancom (9058 JP): Bain-Sponsored MBO at JPY10,300
NAV Valuation of Young Poong Precision and A Case Study for Future Tender Offers in Korea
Amaero International Ltd – Oversubscribed and upsized capital raise to fund growth
Jet2 Plc (Jet2) – Monday, Jun 17, 2024
Epwin Group – Third FY24 EPS uplift this year
Enviri Corp (NVRI) – Sunday, Jun 16, 2024

Trancom (9058) – Another Bain MBO Done Too Cheaply Where “Activist” Dalton Rolls In To The Bid

Logistics takeovers are hot this year. Any cutting-edge-of-efficiencies business in the space is likely to get a look. Trancom Co Ltd (9058 JP) is one.
But while logistics assets put into bidding competition like Alps Logistics and Chilled & Frozen get high EV/EBITDA multiples, MBO transactions without competition get done too cheaply.
Here again, an “Value Activist” “selling into the bid” to reinvest in the levered back end (at the takeover price). That tells you this deal is being done too cheaply.

ASX100/ASX200 Index: Replacement Candidates for Virgin Money (VUK AU)

Following its acquisition by Nationwide, Virgin Money UK Plc (VUK AU) is scheduled to stop trading on the ASX Ltd (ASX AU) after market close on 25 September.
Virgin Money UK Plc (VUK AU) is a member of the S&P/ASX100 Index and S&P/ASX 200 (AS51 INDEX) and there will be adhoc inclusions at the close on 25 September.
There are a couple of stocks vying for inclusion in each index and the next couple of days will determine which ones make it.

Trancom (9058 JP): Bain-Sponsored MBO at JPY10,300

By Research as a Service (RaaS)

Trancom Co Ltd (9058 JP) recommended a Bain-sponsored MBO at JPY10,300, a 40.5% and 42.9% premium to the last close and undisturbed price, respectively.
The offer represents an all-time high but is lower than the midpoint of the IFA’s DCF valuation range and implies multiples below precedent transaction multiples.
While the Dalton irrevocable has a counteroffer clause, Mr Takebe (the largest shareholder) does not. Therefore, there is a low probability of a competing bidder emerging.

NAV Valuation of Young Poong Precision and A Case Study for Future Tender Offers in Korea

By Douglas Kim

Our NAV valuation of Young Poong Precision suggests NAV of 325 billion won or NAV per share of 20,657 won which is 70% higher than current price.
Young Poong Precision tender offer could become one of the most important case studies for future tender offers in Korea.
The biggest component of the NAV is Young Poong Precision’s 1.85% stake in Korea Zinc which is worth 255 billion won (133% of its current market cap).

Amaero International Ltd – Oversubscribed and upsized capital raise to fund growth

RaaS Research Group has published a flash comment on advanced materials manufacturing group Amaero International (ASX:3DA) following the completion of an upsized institutional placement to raise $25m at $0.35/share to fund capital equipment purchases and further fit out its Tennessee facility.
The raise was not unexpected; we had factored in a $22.5m raise at $0.34/share in our modelling before 30 September.
We have incorporated the raise into our forecasts with no impact on current numbers.Post raise, the company will have pro-forma cash of approximately $37.5m to fund the capex programme ahead of ramping up production and transitioning to commercial sales.

Jet2 Plc (Jet2) – Monday, Jun 17, 2024

Jet2 stock has been accumulating over the last 6 months, trading at a lower valuation compared to competitor BKNG
Company has shifted focus to asset-light package holiday earnings, with majority of flight passengers now going on package holidays
Despite being range-bound since COVID-19, Jet2 has continued to grow and execute its plans, offering an attractive investment opportunity with low earnings multiple and smart fleet choices by founder

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

Epwin Group – Third FY24 EPS uplift this year

By Edison Investment Research

Epwin Group’s H124 results were robust, with management navigating inflationary pressures well. That said, we have reduced our revenue estimates reflecting the H1 performance, maintained underlying operating profit estimates and raised EPS forecasts due to the impact of the increased share buyback programme. Long-term, well-established growth trends imply that Epwin is well-placed to leverage increasing demand for its energy-efficient and low-maintenance building products. The company offers an attractive investment case with the potential for uplifts from additional self-funded M&A. It trades on an FY24e P/E ratio of 9.3x, below the long-term average of 10.5x, and yields more than 5%. The extended share buyback programme should help support the share price.

Enviri Corp (NVRI) – Sunday, Jun 16, 2024

Enviri (NVRI) is an environmental services company undergoing a transformation to increase shareholder value
Despite being overleveraged with near-term earnings challenges, the company has long-term growth opportunities in the environmental sector
Insider buying and self-help initiatives are in progress, making now an opportune time to invest in the company.

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Sep 18

Daily Brief Financials: Platinum Asset Management, K Bank, Commerzbank AG, Triple Point Social Housing REIT and more

By Smartkarma Daily Briefs | Daily Briefs, Financials

In today’s briefing:

Platinum (PTM AU): Regal’s Indicative Offer
K Bank IPO Valuation Analysis
Platinum Investment Mgmt (PTM AU): Regal Partners’ Indicative Offer
European Governments’ Bank Sell-Off: Boosting Confidence and Occasionally Free Float
K Bank IPO – The Positives – Fast Growth
Triple Point Social Housing REIT – Improving rent collection and fully covered DPS

Platinum (PTM AU): Regal’s Indicative Offer

Platinum Asset Management (PTM AU) has confirmed, and is “considering the merits” of an unsolicited confidential, non-binding, indicative proposal from Regal Partners (RPL AU).
Regal has offered, by way of a Scheme, 0.274 Regal shares for every Platinum share. A $0.24/share special dividend is permitted, and added. Regal holds an estimated 5.1% stake.
With funds under management down 27% yoy, a merger with Regal is just the tonic for Platinum’s long-suffering investors. Founder Kerr Neilson, holding 21.7%, will have the final say.

K Bank IPO Valuation Analysis

By Douglas Kim

Our base case valuation of K Bank is target price of 9,151 won per share, which is 4% lower than the low end of the IPO price range.
Given the lack of upside in our target price relative to the IPO price range, we would avoid in subscribing to the IPO.
Our base case valuation is based on 1.6x P/B multiple using the company’s equity post IPO (2.35 trillion won).

Platinum Investment Mgmt (PTM AU): Regal Partners’ Indicative Offer

Platinum Asset Management (PTM AU) confirmed it received a non-binding indicative proposal from Regal Partners (RPL AU) at 0.274 RPL shares per PTM share + special dividend of A$0.24.
The implied offer price of A$1.14 per share based on Regal’s undisturbed price of A$3.30 per share is a 15.6% premium to the undisturbed price of A$0.99 (16 September).
Despite the modest takeover premium, the offer is attractive compared to historical and peer multiples. Expect the Board to engage to facilitate an improved binding proposal.

European Governments’ Bank Sell-Off: Boosting Confidence and Occasionally Free Float

By Dimitris Ioannidis

AIB Group (AIBG IE) is expected to experience an increase in free float from 75% to 80% in November 2024 due to the Irish Government reducing its stake this month.
Commerzbank AG (CBK GR) is forecasted to have a ~2% points free float decrease in Global and European Indices as UniCredit bought more than what the German Government sold.
The UK Government continues slashing its stake in NatWest Group (NWG LN) with potential further free float increases coming in November and December 2024.

K Bank IPO – The Positives – Fast Growth

By Sumeet Singh

K Bank (279570 KS) plans to raise up to US$740m in its upcoming South Korean IPO.
K Bank is one of three Internet-only banks in Korea. It provides a full range of commercial banking products and services.
In this note, we talk about the positive aspects of the deal.

Triple Point Social Housing REIT – Improving rent collection and fully covered DPS

By Edison Investment Research

Triple Point Social Housing REIT (SOHO) returned to full dividend cover in H124, with EPRA earnings benefiting from inflation-linked, mostly uncapped rental growth and improving rent collection. Property valuations and NAV per share were lower, but progress with the two problem tenants and falling interest rates suggest this could reverse. Meanwhile, the shares yield more than 8% with the board targeting asset sales and share repurchases to address the discount to NAV.

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Sep 18

Daily Brief Industrials: Trancom Co Ltd, Ventia, Young Poong Precision, Amaero International Ltd, JET2, Epwin Group PLC, Enviri and more

By Smartkarma Daily Briefs | Daily Briefs, Industrials

In today’s briefing:

Trancom (9058) – Another Bain MBO Done Too Cheaply Where “Activist” Dalton Rolls In To The Bid
ASX100/ASX200 Index: Replacement Candidates for Virgin Money (VUK AU)
Trancom (9058 JP): Bain-Sponsored MBO at JPY10,300
NAV Valuation of Young Poong Precision and A Case Study for Future Tender Offers in Korea
Amaero International Ltd – Oversubscribed and upsized capital raise to fund growth
Jet2 Plc (Jet2) – Monday, Jun 17, 2024
Epwin Group – Third FY24 EPS uplift this year
Enviri Corp (NVRI) – Sunday, Jun 16, 2024

Trancom (9058) – Another Bain MBO Done Too Cheaply Where “Activist” Dalton Rolls In To The Bid

Logistics takeovers are hot this year. Any cutting-edge-of-efficiencies business in the space is likely to get a look. Trancom Co Ltd (9058 JP) is one.
But while logistics assets put into bidding competition like Alps Logistics and Chilled & Frozen get high EV/EBITDA multiples, MBO transactions without competition get done too cheaply.
Here again, an “Value Activist” “selling into the bid” to reinvest in the levered back end (at the takeover price). That tells you this deal is being done too cheaply.

ASX100/ASX200 Index: Replacement Candidates for Virgin Money (VUK AU)

Following its acquisition by Nationwide, Virgin Money UK Plc (VUK AU) is scheduled to stop trading on the ASX Ltd (ASX AU) after market close on 25 September.
Virgin Money UK Plc (VUK AU) is a member of the S&P/ASX100 Index and S&P/ASX 200 (AS51 INDEX) and there will be adhoc inclusions at the close on 25 September.
There are a couple of stocks vying for inclusion in each index and the next couple of days will determine which ones make it.

Trancom (9058 JP): Bain-Sponsored MBO at JPY10,300

By Research as a Service (RaaS)

Trancom Co Ltd (9058 JP) recommended a Bain-sponsored MBO at JPY10,300, a 40.5% and 42.9% premium to the last close and undisturbed price, respectively.
The offer represents an all-time high but is lower than the midpoint of the IFA’s DCF valuation range and implies multiples below precedent transaction multiples.
While the Dalton irrevocable has a counteroffer clause, Mr Takebe (the largest shareholder) does not. Therefore, there is a low probability of a competing bidder emerging.

NAV Valuation of Young Poong Precision and A Case Study for Future Tender Offers in Korea

By Douglas Kim

Our NAV valuation of Young Poong Precision suggests NAV of 325 billion won or NAV per share of 20,657 won which is 70% higher than current price.
Young Poong Precision tender offer could become one of the most important case studies for future tender offers in Korea.
The biggest component of the NAV is Young Poong Precision’s 1.85% stake in Korea Zinc which is worth 255 billion won (133% of its current market cap).

Amaero International Ltd – Oversubscribed and upsized capital raise to fund growth

RaaS Research Group has published a flash comment on advanced materials manufacturing group Amaero International (ASX:3DA) following the completion of an upsized institutional placement to raise $25m at $0.35/share to fund capital equipment purchases and further fit out its Tennessee facility.
The raise was not unexpected; we had factored in a $22.5m raise at $0.34/share in our modelling before 30 September.
We have incorporated the raise into our forecasts with no impact on current numbers.Post raise, the company will have pro-forma cash of approximately $37.5m to fund the capex programme ahead of ramping up production and transitioning to commercial sales.

Jet2 Plc (Jet2) – Monday, Jun 17, 2024

Jet2 stock has been accumulating over the last 6 months, trading at a lower valuation compared to competitor BKNG
Company has shifted focus to asset-light package holiday earnings, with majority of flight passengers now going on package holidays
Despite being range-bound since COVID-19, Jet2 has continued to grow and execute its plans, offering an attractive investment opportunity with low earnings multiple and smart fleet choices by founder

Epwin Group – Third FY24 EPS uplift this year

By Edison Investment Research

Enviri Corp (NVRI) – Sunday, Jun 16, 2024

Enviri (NVRI) is an environmental services company undergoing a transformation to increase shareholder value
Despite being overleveraged with near-term earnings challenges, the company has long-term growth opportunities in the environmental sector
Insider buying and self-help initiatives are in progress, making now an opportune time to invest in the company.

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Sep 18

Daily Brief Health Care: China Traditional Chinese Medicine, HK inno.N, Celltrion Inc, BioAge Labs, LinkChem Technology, SanBio Co Ltd and more

By Smartkarma Daily Briefs | Daily Briefs, Healthcare

In today’s briefing:

TCM (570 HK): Inching Towards Regulatory Sign-Off
Korea Value-Up Index Drops on the 24th: Hunt for the Winners in the KOSDAQ Global Index
Celltrion Inc (068270 KS)– Is the Sell-Side’s Bullishness Justified?
BioAge Labs IPO Preview: Investor Focus Has Turned To Azelaprag, A Huge Market Potential
Pre-IPO LinkChem Technology – The Business and the Concerns Behind
SanBio Co Ltd (4592 JP): 1H FY01/25 flash update

TCM (570 HK): Inching Towards Regulatory Sign-Off

In its latest monthly update, China Traditional Chinese Medicine (570 HK) fleshes out the latest on the various PRC regulatory applications.
Comparing the two most recent monthly updates side-by-side, apart from modifying the documentation for the MOC and NDRC process; the SAMR filing has been formally accepted, as previously flagged.
The upshot? These regulatory approvals will be secured. The key question is whether this can take place before the 18th October pre-condition long stop date. Or an extension is required.

Korea Value-Up Index Drops on the 24th: Hunt for the Winners in the KOSDAQ Global Index

By Sanghyun Park

KOSDAQ stocks are expected to make up 10-15% of the Value-Up Index, with 10-15 names benefiting. Even with smaller passive funds, the impact on these stocks could be significant.
KOSDAQ Global Index criteria overlap with the Value-Up Index, and KRX’s push suggests many KOSDAQ Global stocks will also appear in the Value-Up Index.
In the past 30 days, the KOSDAQ Global Index dropped 5.14%, but 5 of the top 10 gainers either announced value-ups or received value-up picks from brokers.

Celltrion Inc (068270 KS)– Is the Sell-Side’s Bullishness Justified?

By Avien Pillay

The biosimilar market is forecast to grow three to four times faster than the generic drug market over the next five years.
However, we believe that this high growth will not necessarily imply good profitability, given the early stage of the biosimilar market, complications and competition.
We also believe that the company’s guidance is too optimistic resulting in an expensive multiple. We prefer some room for error.

BioAge Labs IPO Preview: Investor Focus Has Turned To Azelaprag, A Huge Market Potential

By Andrei Zakharov

BioAge Labs, a clinical-stage biopharma company backed by a leading syndicate of biotech investors, filed to go public in the United States.
Anti aging and obesity biopharma startup is purely focused on chronic metabolic diseases and established partner agreements with Amgen and Eli Lilly.
I have a positive view of upcoming BioAge Labs IPO and expect a strong first-day return above the IPO offer price.

Pre-IPO LinkChem Technology – The Business and the Concerns Behind

By Xinyao (Criss) Wang

The sudden high growth in 2023 was benefited from the cooperation with related party Shandong LinkChem. Is the performance growth driven by LinkChem’s reliance on related party transactions sustainable?
LinkChem relies heavily on limited number of customers to contribute performance but the customer stability is not strong.Due to “low voice” in front of customers, cash flow is under pressure.
The barrier of terbium chloride product is not high and LinkChem will face fierce competition in the future, leading to decreasing YoY growth revenue. Valuation should be lower than peers.

SanBio Co Ltd (4592 JP): 1H FY01/25 flash update

By Shared Research

In 1H FY01/25, the company reported no operating revenue, an operating loss of JPY1.6bn, and R&D expenses of JPY1.0bn.
Non-operating income was JPY401mn, primarily from foreign-exchange gains, while non-operating expenses totaled JPY16mn, resulting in a recurring loss of JPY1.2bn.
The company received conditional marketing approval for SB623 in July 2024, with expected sales to begin in Q1 FY01/26.

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Sep 18

Daily Brief TMT/Internet: Intel Corp, Oracle Corp, Samsung Electronics, Adobe Systems, Tokyo Tsushin Inc and more

By Smartkarma Daily Briefs | Daily Briefs, TMT/Internet

In today’s briefing:

Intel. US DoD & AWS Deals Are Distractions While The Head Remains Firmly In The Sand
Oracle’s Cloud Wars: The Story Of Its Expansion and the Challenges That Could Threaten Its Growth! (9/24)
Samsung Electronics (005930-KR): Quality Generative AI Play, Trading at a Discount
Adobe’s Winning Formula for Double-Digit Growth: Creative Cloud, Document Cloud, and AI! (9/24)
Tokyo Communications Group (7359 JP) – 2Q Follow-Up – Sep 4, 2024

Intel. US DoD & AWS Deals Are Distractions While The Head Remains Firmly In The Sand

By William Keating

US DoD & AWS deals are little more than distractions from the main event
Making Intel Foundry a subsidiary won’t make one whit of a difference but may just be the next step in its eventual spin-off
The core issue, the GM collapse in Q224, was not addressed in the BM update from the CEO. That’s a problem.

Oracle’s Cloud Wars: The Story Of Its Expansion and the Challenges That Could Threaten Its Growth! (9/24)

Oracle Corporation’s Q1 FY 2025 results demonstrated a robust performance, underscored by significant revenue growth and strategic expansions in their cloud offerings.
The total revenue for the quarter was $13.3 billion, marking an 8% year-over-year increase.
Cloud revenue was a standout with SaaS and IaaS generating $5.6 billion, reflecting a 22% increase.

Samsung Electronics (005930-KR): Quality Generative AI Play, Trading at a Discount

By Wium Malan, CFA

Samsung Electronics (005930 KS) is a leading beneficiary of the recovery in global Smartphone demand, and strength in Memory prices, driven by the proliferation of Gen AI demand.
Global Memory prices have recovered by up to +80%y/y driven by demand from hyperscaler customers for leading-technology DDR5, HBM, and other high-value-added memory products.
Samsung Electronics trades more than one standard deviation below its 5-year historic average trading range, a historically proved to be an excellent buying point.

Adobe’s Winning Formula for Double-Digit Growth: Creative Cloud, Document Cloud, and AI! (9/24)

Adobe’s third-quarter fiscal year 2024 performance highlighted a strong trajectory, with substantial year-over-year revenue growth and positive developments across its major product lines.
Revenue stood at $5.41 billion, marking an 11% increase from the previous year.
This growth was fueled by the consistent strength in Creative Cloud, Document Cloud, and Experience Cloud.

Tokyo Communications Group (7359 JP) – 2Q Follow-Up – Sep 4, 2024

By Sessa Investment Research

On August 7, 2024, Tokyo Communications Group, Inc. (hereafter, the “Company”) announced its 1H FY2024/12 financial results.
Net sales fell 7.3% YoY to ¥2,771 mn, EBITDA was in the red with a loss of ¥16 mn (versus a positive EBITDA of ¥132 mn in 1H FY2023/12), and operating loss was at ¥211 mn, coming in worse than the ¥30 mn loss recorded in 1H FY2023/12.
Ordinary losses increased from ¥56 mn to ¥88 mn, and 1H net loss expanded from¥87 mn to ¥158 mn.

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Sep 18

Daily Brief Energy/Materials: Adaro Energy, Endurance Gold, ADX Energy Ltd and more

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

In today’s briefing:

Adaro Energy (ADRO IJ) – The Sustainable Leap
EDG: First 2024 Drill Results: All Holes Intercept High-Grade
ADX Energy (ASX: ADX): Production Boost at Anshof in October

Adaro Energy (ADRO IJ) – The Sustainable Leap

By Angus Mackintosh

Adaro Energy (ADRO IJ) has announced that it intends to spin off its thermal coal related assets under Adaro Andalan Indonesia, allowing it to focus purely on its sustainable businesses.
The move will potentially allow it to realise a higher valuation for its pure coal assets while paving the way for access to sustainable financing for its renewable businesses.
This will help the group accelerate the progress towards having more than 50% of its revenues from non-coal businesses by 2023. Adaro Energy (ADRO IJ) can trade at higher multiples.

EDG: First 2024 Drill Results: All Holes Intercept High-Grade

By Atrium Research

EDG announced assay results for its first six drill holes as part of its 10,000m 2024 drill program, it has completed 11 holes (3,500m) to date.
Today’s results confirm high-grade at-depth (~175m vertical) and extends the Imperial Zone ~100m to the northwest along strike (still open).
Assays for the next five drill holes are expected to be released in mid-October.

ADX Energy (ASX: ADX): Production Boost at Anshof in October

By Auctus Advisors

The ANS-2A sidetrack well has encountered a 6.5 m net vertical oil column in high quality Eocene-aged sandstone reservoir.
The reservoir quality encountered at ANS-2A is consistent with ANS-2 (porosity and permeability ~20% higher than at ANS-3).
The oil-water contact was encountered very close to the top of the water wet reservoir encountered at ANS-2.

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Sep 18

Daily Brief Consumer: Samvardhana Motherson International Ltd, Tube Investments of India , TSE Tokyo Price Index TOPIX, Henkel & KGaA, Signet Jewelers, Kroger Co, RH, CLS Holdings USA, Pvh Corp, Build A Bear Workshop and more

By Smartkarma Daily Briefs | Consumer, Daily Briefs

In today’s briefing:

Samvardhana Motherson QIP – Well Flagged US$780m QIP in a Decent Name
Tube Investments of India (TIINDIA IN) | On-Ground Update on EV Foray
Can Investors Tolerate the Current Pace of Capital Profitability Improvement?
Liquid Universe of European Ordinary and Preferred Shares: September‘24 Report
Signet Jewelers: Striking A Balance Between Merchandise and Pricing! – Major Drivers
The Kroger Co.: An Insight Into Its Competitive Positioning
RH (Restoration Hardware): Brand Image Transcendence & Other Major Drivers
CLS Holdings USA, Inc. – CLSH: Strong Cost Controls Help Offset Revenue Decline in FY24
Pvh Corp – VNCE: 2Q Review: Driving Upside, Remaining Conservative; Reiterate Buy, $3 PT
BBW: Snapping the Store: Halloween Rules (Already!); Reiterate Buy, $41 PT

Samvardhana Motherson QIP – Well Flagged US$780m QIP in a Decent Name

By Clarence Chu

Samvardhana Motherson International Ltd (MOTHERSO IN) is looking to raise up to US$780m in its QIP. Together with the offering is a US$270m compulsory convertible debenture (CCD) offering.
The deal is very well flagged, having gone through rounds of board/shareholder approvals. The QIP has also been covered by domestic media reports.
In this note, we run the deal through our ECM framework and comment on deal dynamics.

Tube Investments of India (TIINDIA IN) | On-Ground Update on EV Foray

By Pranav Bhavsar

Tube Investments of India (TIINDIA IN) is focused on clean mobility solutions through its subsidiary, TI Clean Mobility Private Limited.
The subsidiary’s Montra Electric 3-wheelers have quickly gained market share in southern India, targeting the last-mile mobility segment.
TI’s management is keenly focused on the EV segment, with upcoming launches of e-rickshaws and a new Cargo Version poised to drive substantial growth in the near future.

Can Investors Tolerate the Current Pace of Capital Profitability Improvement?

By Aki Matsumoto

Few Japanese stocks that have advantages in profitability has led to the fact that investors who invest long-term in quality stocks have few Japanese stocks to choose from globally.
It’s the profit margin on sales that has had the greatest impact on changes in ROE. Companies must now get their core competencies once again to regain competitiveness and profitability.
Even if business selection and investment in promising businesses were to be implemented, it would be several years before they bear fruit. For many investors, this pace seems unacceptable.

Liquid Universe of European Ordinary and Preferred Shares: September‘24 Report

By Jesus Rodriguez Aguilar

Since mid-August, share-price spreads have generally widened across our European liquid universe of ordinary and preferred shares (13 have tightened, 4 widened, 2 remained at same level).
Recommended trades long preferred / short ordinary shares: Atlas Copco, Grifols SA, Media-for-Europe, Sixt.
Recommended trades long ordinary / short preferred shares: Carlsberg, Henkel, SSAB Svenska Stal.

Signet Jewelers: Striking A Balance Between Merchandise and Pricing! – Major Drivers

Signet Jewelers has reported its financial results for the second quarter of fiscal 2025, highlighting several critical strategic successes and challenges.
The company’s CEO, Gina Drosos, emphasized the continued momentum in same-store sales, which improved over 5 points from the first quarter, driven notably by robust Fashion sales.
The merchandise margin and the average transaction value (ATV) also saw growth, reflecting the positive reception of Signet’s merchandise strategies even amidst an intensely dynamic industry landscape.

The Kroger Co.: An Insight Into Its Competitive Positioning

The Kroger Co. showcased a mixed performance in the second quarter of 2024.
The company continues its progression towards a strategic operating model which balances customer-centricity with internal efficiencies, maintaining a competitive edge, particularly with its own brands offerings.
Revenue enhancements through enhanced digital sales channels and personalized promotions were notable.

RH (Restoration Hardware): Brand Image Transcendence & Other Major Drivers