In today’s briefing:
- Last Week In Event SPACE: Seven & I, CPMC, UBTech Robotics, Macromill, 2024 Best-Of
- Companies Have Begun to Be Aware of Cash Flow, but the Reality Is that It Doesn’t Produce Results
- A Potential Merger Between Honda and Nissan – Impact on Hyundai Motor and Kia Corp
- HSI, Nikkei 225, NIFTY 50, Kospi 200, ASX 200, CSI 300: Year-End Trends and Holiday Market Moves!
- China Healthcare Weekly (Dec.22) – Zai Lab, Junshi, How to Choose PA Good Doctor’s Special Dividend?
- A/H Premium Tracker (To 20 Dec 2024): Pairwise Intracorrelation and Vol Even Higher
Last Week In Event SPACE: Seven & I, CPMC, UBTech Robotics, Macromill, 2024 Best-Of
- The new article on Seven & I Holdings (3382 JP) from TV Tokyo is causing a dip on top of last week’s weakness. This is a dip to buy.
- CPMC Holdings (906 HK)‘s Offer is now open for tendering. Ignore the rumours. Zhang Wei will tender. Expect payment before Chinese New Year.
- Accounting solely for the pre-IPO investors, 164.6m shares (US$1.9bn) in UBTech Robotics (9880 HK) will be unlocked, ~39.2% of the firm’s total shares outstanding, and 91 days of three-month ADV.
Companies Have Begun to Be Aware of Cash Flow, but the Reality Is that It Doesn’t Produce Results
- Operating income and depreciation, the components of operating cash flow, have been sluggish. This has undeniably dampened expectations for expanding corporate value.
- Many companies have begun to be aware of cash flow, but have yet to see results. They are at the stage of producing results by selecting business to invest cash.
- In terms of “not being conscious of cash flow,” shareholder returns are still strongly net income oriented and not cash flow oriented.
A Potential Merger Between Honda and Nissan – Impact on Hyundai Motor and Kia Corp
- A potential merger between Nissan Motor and Honda Motor would create the third largest auto group in the world.
- If this merger is successful, it could have a short term positive impact on Hyundai Motor since it could result in a reduction of overlapping sales/marketing and production of Nissan.
- However, a merger of Honda and Nissan could negatively impact Hyundai Motor over the long term because the merged entity could produce more high quality, price competitive vehicles.
HSI, Nikkei 225, NIFTY 50, Kospi 200, ASX 200, CSI 300: Year-End Trends and Holiday Market Moves!
- As the year comes to its end, the trading calendar is impacted by two shortened weeks, with the Christmas holiday and New Year’s Day both falling midweek.
- Holidays market trends can be affected by various non-market factors but it’s always good to check the indexes probability of trend reversals, to avoid surprises.
- In this insight, we’ll take a quick look at the major Asia-Pacific market indices—a ‘Christmas Carousel of Odds‘ for Asian markets, if you will.
China Healthcare Weekly (Dec.22) – Zai Lab, Junshi, How to Choose PA Good Doctor’s Special Dividend?
- Increasing revenue without increasing profits is “a big denial” of a company’s business model. Unless Zai Lab significantly reduces costs and maintains revenue high growth, its investment value is low.
- Junshi’s 2024 revenue is likely to return to over RMB1.5 billion due to market share expansion in PD-1. Strict cost control will be the main theme for the future.
- If PAGD’s share price is higher than HK$6.12, there would be arbitrage opportunity. If Ping An hopes other shareholders to choose cash dividend, future stock price may fall below HK$6.12.
A/H Premium Tracker (To 20 Dec 2024): Pairwise Intracorrelation and Vol Even Higher
- AH Premia are all over the place this week. Despite that, pairwise intracorrelation is…. up? Yup. Average Pairwise Volatility is up even more.
- Some of this may be stocks being bullied by large SOUTHBOUND flows in a quieter end-of-year market.
- Finance is seeing big net SOUTHBOUND buying but that is not showing up in A/H premia. I expect things stay noisy through year-end.
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