Thematic (Sector/Industry)

Overseas: SPX +0.4% , Nasdaq +0.7%; Exxon Mobil to buy Pioneer Natural Resources for $60b: Birkenstock slumps 12% on debut.
Today: NKY Futs v cash +0.3%. JPY 149/$; Surge in profits at ABC Mart and Bic Camera
JapanX: Why TSMC Chose Japan as a place to invest…it wasn’t just the subsidies

China TMT Update Oct.12-Pdd/Baba/4385jp/BABA/LI/NIO/XPEV-TikTok Shop US/Taobao Management Change

PDD/BABA/4385JP：TikTok Shop US opened up, initial target categories in Mercari, ETSY and eBay（/）
BABA ：rumor says Taobao/Tmall looking to shuffle CEO（ / ）
LI/NIO/XPEV: AITO’s sales performance during the National Day holiday see good performance（-）

[Blue Lotus Internet Sector Update]: Increasing Marginalization of Middle-Sized Companies

We view the recent cooperation between Alimama and Tencent a true change that both parties need to enter a new paradigm of business priorities in China Internet;
Middle-Sized social/video companies like Kuaishou and Bilibili have historically exploited the disconnect between Alibaba’s e-commerce merchandise shelf and Tencent’s advertising inventory. This opportunity is diminishing;
We raised Tencent’s TP by 4% to HK$417 while keeping Alibaba unchanged. We cut Kuaishou and Bilibili’s TP by 8% and 3% and maintain SELL.

CHina TMT Update Oct.12-Pt.2-BABA/BILI/U:：Taobao Upgrades Membership/Bilibili Aims to Double DAU

BABA：Taobao upgrades its membership program in preparation for 11.11（ / ）
BILI: Bilibili Reiterates User Growth Goal: Doubling Mobile DAU( / )
U: Unity CEO Resigns After the Runtime Fees Incident ( + )

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Oct 11

Daily Brief Thematic (Sector/Industry): Ohayo Japan | SPX +0.5%; Pause in Rates; Son Tells Japan to Embrace AI and more

By Smartkarma Daily Briefs | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

Ohayo Japan | SPX +0.5%; Pause in Rates; Son Tells Japan to Embrace AI
Samsung and SK Hynix China Factories Win U.S. Waivers

Ohayo Japan | SPX +0.5%; Pause in Rates; Son Tells Japan to Embrace AI

OVERNIGHT: The S&P 500 rose for a third consecutive day, buoyed by Amazon’s Prime subscriber sale and a bullish forecast from PepsiCo.
TODAY: Mitsubishi Elec/Denso to invest $1b in Coherent’s SIC business; SONY PS Slim
JAPAN X: According to Masayoshi Son, AI is not the enemy but a friend and partner in propelling Japan forward.

Samsung and SK Hynix China Factories Win U.S. Waivers

By Caixin Global

The U.S. cleared Samsung Electronics Co. and SK Hynix Inc. to supply U.S. chip equipment to their China factories without a separate approval process, South Korea’s presidential office said Monday.
The two South Korean companies received notification that the decision takes effect immediately, South Korea’s presidential economic adviser Choi Sang-mok told reporters Monday at a briefing, according to the Yonhap News Agency.
SK Hynix and Samsung both have major production operations in China, where imports of advanced semiconductor manufacturing equipment and high-performance graphics processing units (GPUs) from the U.S. have been limited under sweeping restrictions rolled out by the Biden administration last October.

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Oct 10

Daily Brief Thematic (Sector/Industry): Ohayo Japan: Stocks Ignore Conflict; Japan’s Used Car Sales to Russia Hit the Brakes and more

By Smartkarma Daily Briefs | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

Ohayo Japan: Stocks Ignore Conflict; Japan’s Used Car Sales to Russia Hit the Brakes
US – Fed Liquidity Moves USD147bn Lower In Past 3 Weeks, Pace Is Accelerating
Luxury Goods – What Makes a Brand Unique?
China TMT Update-Oct.10-Baba/LI/NIO/XPEV/Tencent/NetEase-Huawei Wenjie’s New M7/New Taobao Rules
Cannabis News for the Week Ending October 6, 2023

Ohayo Japan: Stocks Ignore Conflict; Japan’s Used Car Sales to Russia Hit the Brakes

Overnight: S&P gained 0.6% as market shook off initial concerns over conflict in Middle East. Bond market closed; Oil +4%
Japan: BlackRock, the world’s largest asset manager, is looking to collaborate with Japanese businesses to invest in decarbonization technology.
JapanX: Japan has recently imposed strict restrictions on its used car sales to Russia, significantly impacting a thriving trade worth nearly $2 billion annually

US – Fed Liquidity Moves USD147bn Lower In Past 3 Weeks, Pace Is Accelerating

US Federal Reserve Bank balance sheets are released weekly and more current than commercial banks. Latest Fed B/S is for 4 October, shows -USD47bn WoW in loans, securities, repos.
Liquidity conditions in the US banking system are becoming tighter faster, with the most recent week showing loans, securities, repos at -9.4% YoY vs -8.3% four weeks ago.
With tighter liquidity we should expect less loan growth, but also more difficult conditions for cash-strapped companies, prompting more defaults, and higher credit costs at banks.

Luxury Goods – What Makes a Brand Unique?

By Alexis Dwek

Why do certain brands like LV, Hermes and Cartier keep on delivering extraordinary results?
Which luxury brands will be able to continue to raise their prices well above inflation in the medium and long term?
If you don’t have a story for your brand, what is your brand worth?

China TMT Update-Oct.10-Baba/LI/NIO/XPEV/Tencent/NetEase-Huawei Wenjie’s New M7/New Taobao Rules

BABA：SME merchants benefited from new Taobao rules ( + )
LI/NIO/XPEV: The cumulative large deposit order volume of Wenjie’s new M7 has exceeded 50,000 units(-)
Gaming Industry: August Market Sustains Ongoing Recovery with Impressive 46% YoY Growth in Domestic Market(+)

Cannabis News for the Week Ending October 6, 2023

By Water Tower Research

Global equities ended the week up modestly, with the MSCI World Index returning 0.07%. US indices fared worse, with the S&P 500 -0.48%, NASDAQ -0.59%, and Russell 2000 -1.56%. Most of the declines were due to a strong jobs report that sent interest rates higher, and stocks lower.
Cannabis stocks fell again this week with the US cannabis MSOS ETF falling 10.83% and the global YOLO ETF dropping 8.19%.
MSOS has now retraced more than 50% of the gains since the HHS announcement on August 30.

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Oct 09

Daily Brief Thematic (Sector/Industry): Semiconductor Events Deserving Your Attention @7/10/23 and more

By Smartkarma Daily Briefs | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

Semiconductor Events Deserving Your Attention @7/10/23
China’s Weight Loss Drug Market – The Investment Opportunities and the Risks Behind
US Banks – Cash +USD90bn in Week, CRE -0.55% YoY, C&I +0.36% YoY, Book Value Growth Dwindles 3 Wks
October Restrictions, AEHR Earnings, TSMC Monthly Revenue, and Intel’s PSG Spin

Semiconductor Events Deserving Your Attention @7/10/23

By William Keating

TSMC reported revenues for September 2023 of ~NT$180.43 billion, a decrease of 4.4% MoM and a decrease of 13.4 % YoY.
Intel announces intent to spin out its Altera division, its latest endeavour to unlock greater shareholder value
Anthropic seeks yet further billions in funding after just closing an AWS deal worth up to $4 billion

China’s Weight Loss Drug Market – The Investment Opportunities and the Risks Behind

By Xinyao (Criss) Wang

Due to the popularity of GLP-1 target, the entire GLP-1 upstream and downstream industry chain has received great enthusiasm. We analyzed related investment opportunities but also concerns in this market.
Domestic CXOs should focus on securing orders for overseas weight loss drugs. The market value increment brought by weight loss drugs to CXO should be higher than that of APIs.
Due to increasing competition/potential price war, how big the real market space is uncertain. So, the market value increment of weight loss drugs business for pharmaceutical companies could be lower-than-expected.

US Banks – Cash +USD90bn in Week, CRE -0.55% YoY, C&I +0.36% YoY, Book Value Growth Dwindles 3 Wks

US large banks’ new balance sheet data for 27 September show surging cash at +USD90bn in the week putting YoY growth highest all year, at 11.6%. This is risk aversion.
Commercial & Industrial lending, shows another subdued week, down USD1bn to 27 Sept WoW, and YoY growth at 0.36% compared with 12.5% early this year. Suggests a weak underlying economy.
CRE lending growth remains negative, and book value growth worsens in past 2 weeks, from +USD9.4bn to +USD4.0bn and now to +0.4bn WoW.

October Restrictions, AEHR Earnings, TSMC Monthly Revenue, and Intel’s PSG Spin

By Douglas O’Laughlin

Reuters reported on Monday that a new round of export controls just hit the Office of Management and Budget office.
That means it’s already been finalized by the Departments of State, Defense, Commerce, and Energy.
We are almost at the one-year anniversary of the October 7th export controls that tanked semiconductor stocks last year; this time, the stocks are looking way more sanguine.

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Oct 08

Daily Brief Thematic (Sector/Industry): Japan Weekly | Kusuri No Aoki and more

By Smartkarma Daily Briefs | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

Japan Weekly | Kusuri No Aoki, Inpex, Mit Motors, Rinnai
China TMT Update(Oct.8)-TSLA/JD/ATAT/TCOM/3690.HK-JD.com Launches “Enjoy Now, Pay Later” Service

Japan Weekly | Kusuri No Aoki, Inpex, Mit Motors, Rinnai

Market: The broader Topix Index ended the week 59 points, or -2.6%,
Movers: Kusuri No Aoki Holdings shares rose sharply this week after the Japanese drugstore operator’s first-quarter profit climbed (+49% yoy)
Activist Watch: Dalton have also taken significant positions in Rinnai and Nitta

China TMT Update(Oct.8)-TSLA/JD/ATAT/TCOM/3690.HK-JD.com Launches “Enjoy Now, Pay Later” Service

TSLA/JD：JD.com will launch Tesla car ordering service ( + )
JD：JD.com launches “Enjoy now, pay later” service, with high barriers and limited impact (/)
ATAT/TCOM: Highway traffic during national holiday will reach historicalhigh（ +）

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Oct 07

Daily Brief Thematic (Sector/Industry): China Banks; Deep Value Despite the Rising Credit Quality Risks and more

By Smartkarma Daily Briefs | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

China Banks; Deep Value Despite the Rising Credit Quality Risks

China Banks; Deep Value Despite the Rising Credit Quality Risks

By Victor Galliano

In this China banks screen, we focus on the credit quality headwinds going forward, as well as the returns trends that can absorb potentially worsening cost of risk charges
China bank shares continue to be poor performers; yet we see selective contrarian buy opportunities, for those banks with deeply discounted valuations and strong balance sheets including credit quality metrics
We stick with Industrial Bank and CCB as buys, adding Ping An Bank to the buys both of which have attractive valuations; Minsheng remains our fundamental sell

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Oct 06

Daily Brief Thematic (Sector/Industry): Ohayo Japan | Stocks Down as Investors Await Payrolls; Downbeat on Airline Sustainability Plans and more

By Smartkarma Daily Briefs | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

Ohayo Japan | Stocks Down as Investors Await Payrolls; Downbeat on Airline Sustainability Plans
China Property Developers In Distress – Weekly News & Announcements Tracker | 29 Sep – 5 Oct, 2023

Ohayo Japan | Stocks Down as Investors Await Payrolls; Downbeat on Airline Sustainability Plans

OVERSEAS: Stocks weaker ahead of Friday Non-farm payroll data; yields ease slightly; UK’s Metro Bank stock -30%
JAPAN: Nikkei futures point to flat opening; Kyowa Kirin to acquire UK biotech company; Honda N-Box best selling car in Japan
JapanX – Reality starting to sink in as airlines worry about the costs of sustainability

China Property Developers In Distress – Weekly News & Announcements Tracker | 29 Sep – 5 Oct, 2023

By Robert Ciemniak

A weekly curated selection of Chinese news articles and company announcements focused on developers in distress
We look for their deals, updates, specific project progress news (‘local signals’), as well as relevant local research commentaries about the market
We do not verify the underlying data or provide any opinion, we only select and summarize the information; See direct links to sources

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Oct 05

Daily Brief Thematic (Sector/Industry): Ohayo Japan | Stocks Recover; Hitachi Zosen’s Cheap Cuts of Lab-Grown Meat and more

By Smartkarma Daily Briefs | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

Ohayo Japan | Stocks Recover; Hitachi Zosen’s Cheap Cuts of Lab-Grown Meat
Indian Life Insurance (And Savings) Sector Primer – Long-Term Potential and Strong Operating Margins
Australia – New Insolvencies Data: Construction Appointments at 829 Vs 588 YoY | Credit Risk Worsens
Mat-Chem Notes For the Week Ended September 29, 2023

Ohayo Japan | Stocks Recover; Hitachi Zosen’s Cheap Cuts of Lab-Grown Meat

OVERSEAS: SPX +0.8% as stocks recover from recent steep losses; ADP data hints at slower pace of job growth; bond yields eased off
JAPAN: Nikkei Futures (+0.5% v cash) point to stronger open, JPY 149/$. Toyota signs long-term battery deal with LG Energy; Docomo takes stake in Monex.
JapanX: Hitachi Zosen slashes lab-grown meat protein cost by 90%

Indian Life Insurance (And Savings) Sector Primer – Long-Term Potential and Strong Operating Margins

By Raj Saya, CA, CFA

Indian Life Insurance Sector is a play on lucrative Indian demographics, under-penetration of life insurance and retirement savings across cohorts of the population.
The large firmsSBI Life, HDFC Life , LIC IN , ICICI Pru, MAXF IN are ripe for long-term secular growth for decades to come as they dominate the market.
This “Primer” sets the stage for the company-specific notes to follow. Here we discuss the sector level issues, key metrics and relative valuations. See attached PDF- Free access.

Australia – New Insolvencies Data: Construction Appointments at 829 Vs 588 YoY | Credit Risk Worsens

Australia Securities & Investment Commission produces high-frequency data on insolvencies, which is valuable data for analyzing banks. There is pronounced deterioration in at least 3 sectors.
In construction, total appointments rose to 829 YTD to 10 Sept 2023 from 588 a year ago and from 250 in the preceding comparable period.
Hotel & food services and retail trade are also seeing high growth of insolvencies. Australia’s banks will likely face more defaults, NPLs and credit costs.

Mat-Chem Notes For the Week Ended September 29, 2023

By Water Tower Research

WTR-CMI last week. The third quarter ended on a down note, with the S&P 500 losing 3.7% and the Russell 2000 dropping 2.7%.
Our WTR-CMI index slightly underperformed the Russell 2000, declining 3.0% for the week. Coincidently, RYAM led the performance of stocks in our index, appreciating 18% last week, as news spread of one of its main competitors in commodity markets announcing the intention to shut down a major wood pulp production plant in the US
Lithium (LAC and PLL) and ag- chem stocks (FMC and AVD) were the worst performers in our index last week on lower lithium prices and signs of slowing EV demand, and a weaker farmer outlook for 2024/25 season.

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Oct 04

Daily Brief Thematic (Sector/Industry): Ohayo Japan | Turmoil in Washington and more

By Smartkarma Daily Briefs | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

Ohayo Japan | Turmoil in Washington, Stocks & JPY; Japan Rail Lifting Tourist Pass Prices
Singapore – New Monthly B/S: Trade Finance Loans -24% YoY, Fixed Deposits +37% YoY at 50% of Total

Ohayo Japan | Turmoil in Washington, Stocks & JPY; Japan Rail Lifting Tourist Pass Prices

OVERSEAS: US stocks sink, bond yields surge on hot jobs data. SPX dropped -1.4%
JAPAN: NKY futures continue to decline -1.6% vs cash. JPY volatility as hits 150/$. Weak September sales at Uniqlo; strong US sales for Toyota
JAPAN X – JR companies raising prices for tourist passes another sign that bosses keen to protect ROE

Singapore – New Monthly B/S: Trade Finance Loans -24% YoY, Fixed Deposits +37% YoY at 50% of Total

New monthly balance sheet is out for Singapore banks, so we have a window on 3Q23 with data through 1 August. Total loans -6.0% YoY worse than -5.5% preceding month.
Trade finance loans are moving well lower. Growth rate is -24% YoY in latest month with negative double digit growth YoY since January.
Fixed deposits are surging, latest month +37% YoY and these higher cost monies are now 50% of total deposits, compared with 37% of total one year ago.

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Oct 03

Daily Brief Thematic (Sector/Industry): Ohayo Japan: US Big Tech Higher; Shipping Giants Join Hydrogen Supply Chain and more

By Smartkarma Daily Briefs | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

Ohayo Japan: US Big Tech Higher; Shipping Giants Join Hydrogen Supply Chain
Mattress Imports – July Imports Drop Sharply; ITC Preliminary Finding Favors US Petitioners

Ohayo Japan: US Big Tech Higher; Shipping Giants Join Hydrogen Supply Chain