In today’s briefing:
- Ohayo Japan | Unconditional Surrender
- “Buy the Worst” HSI Strategy: Solid Gains in 1H25
- Japan Morning Connection: Risk-Off Tape Unlikely to Last with Regime Change the Most Likely Outcome
- GDS and VNET – Recent Pullback Provides Entry Opportunity, Long-Term AI Growth Solid and Strong
- Valuations, Visas & Venture Pullback: An Equity + M&A Overview of the Education Sector in Q1 2025
- [Blue Lotus Daily-TMT Update]:BABA US/JD US/1810 HK/700 HK/NTES US/BIDU US/E-Commerce
- [Blue Lotus Daily]:1211 HK/ TSLA US/LI US/ 1810 HK /XPEV US/New Energy Vehicles
- #163 India Insight: Steel Tax To Cut Imports By 50%, ADD on Chemicals, BAT to Exit ITC Hotel’s Stake
- Charted Insights: Evaluating Indian Sectoral Positioning After FY25 Earnings
- Middle East FX & Egypt, June 17th 2025
Ohayo Japan | Unconditional Surrender
- US stocks fell Tuesday as escalating tensions between the US and Iran weighed on sentiment, with President Trump calling for Iran’s “unconditional surrender”
- Honda’s subsidiary successfully demonstrated a reusable small rocket, launching and landing a 6.3-meter craft in Hokkaido, targeting suborbital space by 2029.
- Nissan Motor announced the redesign of its Leaf electric vehicle, the first update in eight years, transforming it into a compact SUV
“Buy the Worst” HSI Strategy: Solid Gains in 1H25
- The “Buy the worst” basket has outperformed the HSI by a massive 16.7pp YTD, mainly boosted by Chow Tai Fook Jewellery (1929 HK) and Wuxi Biologics (2269 HK).
- The best-performing constituents in 2024, however, lagged behind the HSI, dragged down by Trip.com Group (9961 HK) and Meituan (3690 HK).
- Government’s consumption boost should benefit Chow Tai Fook Jewellery (1929 HK), Budweiser Brewing APAC (1876 HK), and Hang Lung Properties (101 HK) in 2H25.
Japan Morning Connection: Risk-Off Tape Unlikely to Last with Regime Change the Most Likely Outcome
- Defense related plays stronger as the potential for US direct involvement in Iran grows…watch heavies for more upside.
- Kioxia squeeze unlikely to last now lock-up expiry now past.
- Nintendo back at the highs, but with record sales already priced in and Switch2 sold out a correction from here looks likely.
GDS and VNET – Recent Pullback Provides Entry Opportunity, Long-Term AI Growth Solid and Strong
- Both GDS and VNET declined more than 70% from all time high. We think both stocks are over-penalized by market from top-down macro-economic reasons and geo-political tensions
- We think there is a dis-connect between the share price and solid company fundamentals. The explosive growth in demand for AI and Cloud computing infrastructure remains strong
- GDS is a mature, blue-chip name that offers sustainable profitability while on de-leveraging. VNET is a high-growth, high-risk turnaround play with its wholesale offering higher short-term upside
Valuations, Visas & Venture Pullback: An Equity + M&A Overview of the Education Sector in Q1 2025
- The education sector remains resilient despite headline privatisations, with market cap only slightly down to US$142bn after the removal of PowerSchool Holdings (PWSC US) and Instructure Holdings (INST US).
- AI disruption is reshaping the landscape, with key players like Chegg Inc (CHGG US) collapsing while innovators like Duolingo (DUOL US) surge, highlighting a potential shift in investor focus.
- M&A and IPO activity is reawakening, with KinderCare Learning (KLC US) ‘s IPO, India’s robust upcoming pipeline, and renewed private equity interest pointing to a cyclical upturn.
[Blue Lotus Daily-TMT Update]:BABA US/JD US/1810 HK/700 HK/NTES US/BIDU US/E-Commerce
- BABA US: Eleme to Invest Additional RMB1 Billion in Merchant Support Over Next Three Months(-)
- JD US/1810 HK:May Retail Sales Growth Exceeds Expectations, Online Growth Slightly Accelerates (+/+)
- JD US : JD.com Sponsors “Jiangsu Super League” . (+)
[Blue Lotus Daily]:1211 HK/ TSLA US/LI US/ 1810 HK /XPEV US/New Energy Vehicles
- 1211 HK : BYD Issues Super Short-Term Commercial Paper. (-)
- 1211 HK/ TSLA US/LI US/1810 HK /XPEV US:2025 June 9 – June 15 NEV Delivery Rankings(+/+/-/-//)
- New Energy Vehicles: Lithium Carbonate Price Falls to 60,000 Yuan/Ton (+)
#163 India Insight: Steel Tax To Cut Imports By 50%, ADD on Chemicals, BAT to Exit ITC Hotel’s Stake
- India expects steel imports to fall by 50% as new tax supports local industry. Rising demand shows the steel sector is set for strong growth.
- India imposes five-year anti-dumping duties on Vitamin A Palmitate and Insoluble Sulphur imports to protect domestic producers, signaling stronger trade enforcement amid global competition.
- British American Tobacco (BATS LN) plans to exit its 14.55% stake in ITC Hotels post-demerger, focusing on core operations. The move may reshape ownership and boost institutional participation.
Charted Insights: Evaluating Indian Sectoral Positioning After FY25 Earnings
- BSE500 PAT growth slowed over 50% to 10%, not demand-led, with revenue stable below 10% This warrants careful sectoral positioning due to cost-driven margins.
- Pharma, FMCG, Paints are at peak 10-year margins, offering limited upside. Durables, Chemicals, Cement, QSR offer margin potential if demand improves.
- Persistent EPS downgrades across key sectors like Export Auto (-11%), Non-lending Financials (-7%), Apparel/Retail (-6%), and Pharmaceuticals imply stretched valuations whereas telecom and consumer services avoided negative revision of EPS.
Middle East FX & Egypt, June 17th 2025
- Some observations : with the events, we got to discover the living rooms and studies of many Middle East intelligence and military consultants/specialists/experts.
- All commenting a bit far from the action but some are interesting even though it doesn’t in anyway preclude what is going to happen next, only Israel PM Mr Netanyahu and Iran’s Supreme Leader Ali Khameini might know.
- One thing that is rarely mentioned or talked about is a similar operation that Israel undertook in June 1981 and codenamed Operation Babylon that saw a daring air force raid destroyed an unfinished nuclear reactor a short distance away from Baghdad.
💡 Before it’s here, it’s on Smartkarma
Sign Up for Free
The Smartkarma Preview Pass is your entry to the Independent Investment Research Network
- ✓ Unlimited Research Summaries
- ✓ Personalised Alerts
- ✓ Custom Watchlists
- ✓ Company Data and News
- ✓ Events & Webinars
