Thomas J. Monaco

Actionable bottom-up long/short Insights on equities

Equity Bottom-Up

Alibaba Group Holding Limited operates as a holding company. The Company provides internet infrastructure, electronic commerce, online financial, and internet content services through its subsidiaries. Alibaba Group Holding offers its products and services worldwide.

<ul>
<li>In this insight, we analyzed the different share price movements of SK Telecom relative to KOSPI from 2005 to 2022 when foreign ownership remained above 99%.</li>
<li>Once MSCI announces the potential deletion of SK Telecom from MSCI Korea Index in the next several weeks, there could be some short term temporary weakness on SK Telecom.</li>
<li>Over a longer period, SK Telecom is well poised to outperform the market amid the market's rotation into value stocks and the company's strong earnings and cash flow growth.</li>
</ul>

Douglas Kim

Korea/Asia, New Economy, IPOs, Events

Lucror Analytics Weekly Wraps provide an overview of all Morning Views comments and reports published by our analyst team in the past week, and also showcase a list of the most-read reports.In this Insight:<ol><li><a href='/entities/china-jinmao-holdings-group' target='_blank' rel='noopener'>China Jinmao Holdings</a></li><li><a href='/entities/guangzhou-r-f-properties-h' target='_blank' rel='noopener'>Guangzhou R&F Properties</a></li><li><a href='/entities/sunac-china-holdings-ltd' target='_blank' rel='noopener'>Sunac China Holdings</a></li><li><a href='/entities/greenland-hong-kong-holdings-ltd' target='_blank' rel='noopener'>Greenland Hong Kong Holdings</a></li><li><a href='/entities/china-evergrande-group' target='_blank' rel='noopener'>Evergrande</a></li></ol>and more...

Charles Macgregor

Head of Asia

<ul>
<li>Unsurprisingly, the independent expert (IE) considers the offer for <a href="https://www.smartkarma.com/entities/irongate-group" target="_blank" data-smartkarma-citation="entities:30897:1" rel="noopener">Irongate Group (IAP AU)</a> to be fair and reasonable. We think that IE’s valuation approach is sound.</li>
<li>The key condition is approval from shareholders and regulatory authorities (FIRB, OIO, SARB). The scheme meeting is scheduled for 29 June. </li>
<li>We continue to think that offer is attractive. At the last close price and for the 15 July implementation date, the gross and annualised spread is 1.4% and 9.2%, respectively.</li>
</ul>

Arun George

IPOs and Catalysts/Events

<ul>
<li>The bleak retail performance of the previous two months reversed to a surprising extent as sales surged by 1.4%. Demand for booze dominated falling non-food store sales.</li>
<li>GDP seems only slightly less weak in Q2 as this bounce will probably prove short-lived around Easter. Falling real incomes squeezes sale volumes rather than raising values. </li>
<li>Crashing consumer confidence has now reached record lows in contrast to the business optimism that seems set for a rude awakening as customers baulk at higher prices.</li>
</ul>

Phil Rush

Chief Economist

The Chinese Property Weekly focuses on providing updates in the Chinese real-estate sector, including recent regulatory and company developments, top and bottom performers, rating actions, as well as a list of bond maturities in the next 30 days.

<ul>
<li>
Management Shake-up: Alibaba Group Holding (BABA.US) [Alibaba] announced that long-time CFO Maggie Wu will be stepping down in April 2022;</li>
<li>
Restructure: Alibaba also announced that it will be reorganizing its international and domestic e-commerce businesses; and</li>
<li>
Further Pressure:Just last month, Alibaba reduced its revenue growth forecast. The formation of a financial holding company will cause earnings to compress while capital requirements increase.</li>
</ul>

Silver Point

Silver Point is a boutique research firm that focuses on the broader financial services sector, with a particular focus on troubled institutions globally. 

Asia Ex Japan

<ul>
<li>Foreign investors hold 106.51m shares of <a href="https://www.smartkarma.com/entities/sk-telecom-co-ltd-bbccd86c-474d-4a4d-946d-10e911a225a2" target="_blank" data-smartkarma-citation="entities:395:1" rel="noopener">SK Telecom (017670 KS)</a> versus a limit of 107.23m shares. There are only 723k more shares (1 day of ADV) available for foreign buying.</li>
<li>MSCI will delete <a href="https://www.smartkarma.com/entities/sk-telecom-co-ltd-bbccd86c-474d-4a4d-946d-10e911a225a2" target="_blank" data-smartkarma-citation="entities:395:1" rel="noopener">SK Telecom (017670 KS)</a> from its indices once the foreign room reaches zero, while FTSE will likely reduce the investability weight in two tranches of 5% each.</li>
<li>
<a href="https://www.smartkarma.com/entities/sk-telecom-co-ltd-bbccd86c-474d-4a4d-946d-10e911a225a2" target="_blank" data-smartkarma-citation="entities:395:1" rel="noopener">SK Telecom (017670 KS)</a> could continue underperforming <a href="https://www.smartkarma.com/entities/kt-corp" target="_blank" data-smartkarma-citation="entities:1112:1" rel="noopener">KT Corp (030200 KS)</a> in the short-term due to passive selling and inability of foreign investors to buy the stock.</li>
</ul>

Brian Freitas

Pan-Asia Index Rebalances/Events/Delta One

<ul>
<li>Celltrion Inc (068270 KS)'s deletion seems pretty much a foregone conclusion as its average float-adjusted market cap on May 3-19 is way below the next one in line.</li>
<li>Shinhan Financial (055550 KS) is the one to replace Celltrion based on the numbers so far. There is close to a ₩1T gap with the next one, POSCO (005490 KS).</li>
<li>In this rebalancing, the flow impact of the addition/deletion is even more significant. So, their share price fluctuations on June 10 will likely be more substantial than last time.</li>
</ul>

Sanghyun Park

Korea / Special Sits, Pairs, Index Rebalancing

<ul>
<li>The EGM of <a href="https://www.smartkarma.com/entities/woodside-petroleum-ltd" target="_blank" data-smartkarma-citation="entities:177:1" rel="noopener">Woodside Petroleum (WPL AU)</a> today approved the BHP Petroleum merger in overwhelming fashion. 98.66% FOR. </li>
<li>They did not approve of the Climate Report the board submitted to vetting by shareholders for the first time. That got 51% "support."</li>
<li>But now that's done, people will talk about flows. So far the trade has worked but now time to think about how far to stretch it.</li>
</ul>

Travis Lundy

Pan-Asia Catalysts/Events

<ul>
<li>
<a href="https://www.smartkarma.com/entities/woolworths-ltd" target="_blank" data-smartkarma-citation="entities:500:1" rel="noopener">Woolworths Ltd (WOW AU)</a> proposes to acquire all shares in <a href="https://www.smartkarma.com/entities/mydeal-com-au-ltd" target="_blank" data-smartkarma-citation="entities:30939:1" rel="noopener">MyDeal.com.au Ltd (MYD AU)</a> other than those held by Sean Senvirtne and other key management personnel.</li>
<li>MyDeal shareholders will receive $1.05/share in cash, a punchy 62.8% premium to last close, but just 5% above its 2020 IPO price.</li>
<li>This proposal is being done by way of a Scheme with expected completion in Q3/Q4 2022.</li>
</ul>

David Blennerhassett

<ul>
<li>Most of the countries that <a href="https://www.smartkarma.com/entities/frasers-hospitality-trust" target="_blank" data-smartkarma-citation="entities:913:1" rel="noopener">Frasers Hospitality Trust (FHT SP)</a> has assets in have their borders already opened. </li>
<li>The full impact of the reopening will only be seen in the subsequent quarters thus it is almost certain that next quarter's result will be better than the past one.</li>
<li>The upside from privatization is mostly priced in but the recovery of the business is real albeit potentially gradual. </li>
</ul>

Alibaba Group

Alibaba Group Holding – Palace Intrigue