In today’s briefing:
- Long ANZ (ANZ AU), Short National Australia Bank (NAB AU): Banking on Statistical Arbitrage
- JX Advanced Metals (5714 JP) – Dominant in Sputtering, Recycling Pivot, Valuations Lag Peers
- Two Asian Life Insurance Stocks (Both Up >30% YTD) Worth Closer Looks
- ASICS (7936) | Nike Q4 Preview: Eyes on Margins and Momentum
- TechChain Insights: Himax Threatened by China Auto Chip Push? CPO Tech with TSMC Remains Bright Spot
- Defense Tech: Taiwan Advanced Submarine Trial & Global Turmoil Puts CSBC in the Investor Spotlight
- Relative Value Roundup: Performance Recap of Pair Trades in Asia-Pacific
- Apple Intelligence. What’s Another Year?
- Flynn Gold Ltd – Building the business
Long ANZ (ANZ AU), Short National Australia Bank (NAB AU): Banking on Statistical Arbitrage
- Context: Statistical analysis of a relative value opportunity in the Australian Banking industry between ANZ Group Holdings (ANZ AU) and National Australia Bank (NAB AU).
- Highlights: Going long ANZ and short NAB targets a 4.5% return to the statistical mean reversion level, with ANZ supported by cheaper valuations.
- Why Read: Essential for quantitative traders seeking mean-reversion opportunities, with detailed execution framework, risk management protocols, and historical simulation showing the statistical basis for this relative value play.
JX Advanced Metals (5714 JP) – Dominant in Sputtering, Recycling Pivot, Valuations Lag Peers
- Listed in March 2025 via Japan’s largest IPO since SoftBank 2018, JX Advanced Metals has since accelerated recycling, governance restructuring, and potential Toho Titanium consolidation.
- A global leader in high-purity sputtering targets (35–40% share) and thin film materials, it is scaling capacity and deepening foundry partnerships (TSMC, Samsung) to capture long-term semiconductor growth.
- Despite strong positioning, it trades at just ~7x EV/EBITDA FY25E—below peers—offering structural growth at value multiples amid recovering earnings and strategic asset backing.
Two Asian Life Insurance Stocks (Both Up >30% YTD) Worth Closer Looks
- Share prices of China Life and Prudential plc have been up by 33% and 40% – 50% YTD, respectively.
- China Life’s agency restructuring is bearing fruit, as evidenced by increasing agency productivity, and is expected to continue driving new business growth and margin expansion.
- Our previous thesis for Prudential plc remains largely intact. Albeit the strong share price performance YTD, valuation upside remains as its new business multiple continues to re-rate.
ASICS (7936) | Nike Q4 Preview: Eyes on Margins and Momentum
- Nike reports Q4 earnings Thursday. Focus for ASICS investors: (1) Sales momentum recovery, (2) Gross margin trends.
- Nike’s continued weakness (global footwear sales -8% YoY in MRQ) supports bullish near-term thesis on ASICS.
- However, signs of stabilization at Nike could signal increasing competitive pressure in H2/FY26.
TechChain Insights: Himax Threatened by China Auto Chip Push? CPO Tech with TSMC Remains Bright Spot
- China’s push for 100% auto chip localization by 2027 poses risk to Himax, which derived 75% of 1Q25 revenue from China. We engaged the company for comments./
- Himax may avoid direct targeting due to Taiwanese roots and local production via CN Nexchip, and we believe is less vulnerable than Western firms like NXP, TI, and Wolfspeed.
- Copackaged Optics (CPO) industry momentum continues to build as Himax continues role alongside TSMC and FOCI; industry moves from Nvidia, AMD validate long-term optical interconnect opportunity Himax is positioned for.
Defense Tech: Taiwan Advanced Submarine Trial & Global Turmoil Puts CSBC in the Investor Spotlight
- Submarine Milestone Validates CSBC’s Strategic Role: Taiwan’s June 17 maiden sea trial of the Hai Kun-class submarine highlights CSBC as the sole builder of Taiwan’s Indigenous Defense Submarine (IDS) program.
- Scale of Program Is Significant vs. Market Cap: Seven additional submarines are expected to follow, with a reported program budget of NT$284bn (~US$9.5bn), over 12x CSBC’s current US$760m market cap.
- Emerging Naval, Drones, & Energy Platforms Provide Optionality: Beyond submarines, CSBC is expanding into unmanned surface vessels (USVs) and offshore wind engineering, offering long-term exposure to Taiwan’s asymmetric defense.
Relative Value Roundup: Performance Recap of Pair Trades in Asia-Pacific
- Context: This Insight follows up on previously highlighted relative value opportunities, using a statistical methodology based on mean-reversion to identify opportunities in paired securities.
- Highlight: Six pair trade opportunities across three markets and three sectors persist. Two
- Why read: Statistical analysis offers a unique perspective on relative value. Gain insights into actionable statistical pair trade opportunities and monitor performance of previously highlighted pairs.
Apple Intelligence. What’s Another Year?
- Apple failed to deliver on the highly anticipated Siri makeover, noting that it didn’t meet their quality standards and effectively pushing it out for another full year
- Internal rivalries, divided opinions on the direction AI should take, organizational restructuring, unwillingness to do meaningful acquisitions would all appear to be contributing to Apple’s AI woes
- Apple’s peers are advancing their AI ambitions at warp speed, investing heavily, taking bold risks and mostly delivering on their promises. Apple is the polar opposite. What’s another year? Failure.
Flynn Gold Ltd – Building the business
- Flynn Gold Limited (ASX:FG1) is a junior gold explorer which holds a portfolio of tenements (20+3 in application) across Tasmania and Western Australia.
- The tenement package is prospective for several commodities, however, exploration efforts have largely focused on gold at the company’s flagship project, Golden Ridge, which is located in the north-east of Tasmania.
- Field work and ongoing drilling at the project over the past two years has resulted in FG1 developing critical mass at the project which is building up towards an inaugural JORC-compliant resource.
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