This weekly newsletter pulls together summaries of the top ten most-read Insights across Macro and Cross Asset Strategy on Smartkarma.
Receive this weekly newsletter keeping 45k+ investors in the loop
1. Korea Value Up Index – Surprising Inclusions and Exclusions
- There are some major surprises (both inclusions and exclusions) in the Korea Value Up index.
- In particular, the telecom sector (SK Telecom and KT) and large cap holding companies (Samsung C&T and LG Corp) are surprising exclusions in the index.
- There are many surprising inclusions in the Korea Value Up Index. We provide 30 companies are surprising inclusions in the Korea Value Up Index (19 KOSDAQ and 11 KOSPI listed).
2. Global Commodities: All systems go for precious metals
- Gold prices have been supported by rising interest rates and central bank demand, but investor flow is now becoming the key driver for further sustained rally.
- Physical demand in China has decreased, but investor demand, particularly in ETFs, has been increasing over the past four months.
- The upcoming direction of gold prices will depend on the pace of Fed cuts and the shift in investor ownership from money market funds to gold ETFs.
This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.
3. Overview #10 -China Knocks It Out of the Park
- A review of recent events/data impacting our investment themes or outlook
- China announces a barrage of fiscal and monetary stimulus plans
- New LDP leader and Japan Prime Minister impacts the markets
4. Direct-reduced iron: India carving its path to meet ‘green’ steel ambitions
- Direct Reduced Iron (DRI) is playing a significant role in India’s steel industry, accounting for 33% of total steel output
- India’s DRI market is characterized by rapid growth driven by steel production targets and sustainable steel making practices
- DRI production is concentrated in central and eastern parts of India, with states like Chhattisgarh and Odisha being prominent producers and trade hubs.
This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.
5. Indonesia: Sentiment Weakens as Key Sectors and Stocks Lose Ground
- Indonesia’s exposure among EM funds is beginning to taper, with 2.3% of funds closing positions and 6.3% shifting to underweight over the past six months
- Bank Central Asia and Bank Rakyat reached record ownership highs this year but have since faced closures by select funds
- On the fund level, closures have outpaced openings, led by Aubrey and BlackRock, with the majority of funds now holding allocations below 5%.
6. Toby Rodes – Unlocking Value in Japan (EP.407)
- Toby Rhodes became interested in Japan due to his grandfather’s stories about the country and its culture
- Toby is the co-founder and managing partner of Konami Capital, a value and quality oriented manager of small cap Japanese equities
- He discusses the past false starts of Japanese activism, recent changes in corporate governance, and Konami’s process for taking advantage of opportunities in the Japanese market
This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.
7. OVER THE HORIZON: HK/CHINA No Longer the Stock Market Pinata!
- HK/China markets have entered a Bull market trend which was sparked by Beijing’s multi-faceted stimulus program.
- An overhang of extreme pessimism on China’s economy and markets will gradually dissipate as the media/analyst narrative will follow the market higher.
- As discussed in previous insights, a turn in sentiment is the key to not only moving the market but also to reviving the Chinese consumer.
8. Positioning Watch – Markets Are Moving Away from the US (in FI)
- Hello everyone, and welcome back to our weekly positioning update!
- Everything is about China these days, with both the PBoC and the Politburo preparing stimulus packages to save the Chinese economy from its nasty downturn.
- While the stimulus initiatives are not very large, relatively speaking (roughly a percentage of GDP on average across stimulus packages), markets clearly see the heavy amounts of proposed stimulus as a “whatever it takes” signal, sparking a strong momentum trend in the Hang Seng and China proxies.
9. Indonesia Strategy – Caught in a Perfect Updraft?
- Indonesia has been the recipient of significant investment flows for foreign investors with more of a “risk on” environment with a large portion flowing into Indonesian banks.
- Indonesia stacks up from an investment perspective with a stable political environment, solid GDP growth of around 5% YoY, rising flows of FDI, and a more stable IDR.
- Despite the JCI knocking on all-time highs, valuations continue to look attractive with prospects of a better 2H2024 and lower interest rates. Top picks: Banks, property, consumer, and selective elsewhere.
10. China Steps Up Monetary Support, But Not a Game Changer
- China has surprised and cut the 7 day reverse repo rate by 20bps to 1.5%, with a 50bps cuts in the RRR rate.
- Combined with other measures this is a step-up in support and could help GDP on the margin, but the measures are not game changers as monetary policy is currently ineffective.
- While further fiscal easing will likely arrive in the next few weeks, we still maintain our forecast of 4.0% GDP growth for 2025.
This weekly newsletter pulls together summaries of the top ten most-read Insights across Tech Hardware and Semiconductor on Smartkarma.
Receive this weekly newsletter keeping 45k+ investors in the loop
1. Taiwan Dual-Listings Monitor: TSMC Returning to Higher Trading Range? ASE’s Two Upcoming Events
- TSMC: +16.6% Premium; Returning to the 15 – 20% Trading Range?
- UMC: +0.5% Premium; Near the Middle of the Historical Trading Range
- ASE: +5.2% Premium; Participating in Two Investor Conferences in Next Two Weeks
2. Lattice Semiconductor
- It’s an exciting time when your favorite semiconductor CEO comes out of “retirement” to return as a CEO.
- Mine is personally Ford Tamer, who drove Inphi to ship the best DSP in the market against much larger competitors at a much faster pace.
- In my opinion, Inphi was almost a miracle story in semiconductors. It was a literal David versus Goliath, and the man who led the team was Ford.
3. Intel. US DoD & AWS Deals Are Distractions While The Head Remains Firmly In The Sand
- US DoD & AWS deals are little more than distractions from the main event
- Making Intel Foundry a subsidiary won’t make one whit of a difference but may just be the next step in its eventual spin-off
- The core issue, the GM collapse in Q224, was not addressed in the BM update from the CEO. That’s a problem.
4. Taiwan Tech Weekly: TSMC Apple Arizona Production Milestone, Samsung 3nm Yield Still Weak Vs. TSMC
- TSMC’s U.S. Production Strategy Achieves Major Milestone – Begins Production of Apple A16 Chips in Arizona
- Reports of Apple’s Disappointing Initial iPhone 16 Sales Data; Key Taiwan Suppliers Top Losers Recently
- Samsung Falling Behind TSMC – New Report of Low Yields Continuing to Plague Samsung’s 3nm AI Processors
5. Hezbollah’s Pager Explosions and South Korea’s Security Breach – Implications for Tech Supply Chains
- Explosive pagers linked to Hezbollah attacks spark controversy for a Taiwanese brand.
- Not just Lebanon – today it was reported that the South Korean military removed Chinese-made CCTV cameras after secret backdoors were detected.
- A counter-intuitive conclusion: Despite recent news, is the trend ultimately positive for Taiwanese tech hardware makers?
6. PC Monitor: Microsoft Copilot Wave 2 Unveils Major AI Boost; Reiterate Structural Long for PC Makers
- Microsoft today announced a major Copilot update, called “Wave 2”, introducing a new collaborative interface and enhanced Copilot capabilities across all major Office apps.
- Copilot continues to gain momentum with large corporations, as Microsoft announced today that Vodafone has adopted it for 68,000 employees.
- We remain Structurally Long PC Makers – We continue to believe Microsoft’s Copilot will drive PC upgrades as users recognize the productivity benefits of faster ‘AI PCs’.
7. Current Semi Surge Still Strong
- The semiconductor market is currently enjoying an AI-driven demand surge
- The past two demand-driven surges have turned into collapses as growth returned to the long-term trend
- When we compare the past two cycles to the current one, it appears that a collapse could occur relatively soon
8. ChatGPT o1 (Strawberry) and Memory
- Strawberry was a breakthrough. Some people ask, “What’s the big deal?” but feasibly, there is a new scaling law working in tandem with training, and that’s the Chain of Thought / Inference.
- The chart below is a bit confusing, but the conclusion is the longer the model “thinks,” the better the answer.
- The new model has another log-linear scaling law. It pretty much computes, and the Bitter Lesson wins again.
9. Global Semi Sales Strength Continues In July. How Long Can It Last?
- Global semiconductor sales for the month of July 2024 amounted to $51.3 billion, representing an increase of 18.7% increase YoY and a 2.7% increase MoM
- The July revenue number was the second highest monthly semiconductor revenue ever recorded, the highest being $51.7 billion in May 2022
- Increasing memory prices along with modest recoveries in both PC and Smartphone unit shipments will continue to drive semi sales higher through EOY 2024.
10. Kokusai Electric (6525 JP): Sell-Off Presents Buying Opportunity
- Kokusai has dropped 44% from its July peak, offering a long-term opportunity at reasonably attractive valuations. Management’s guidance looks conservative.
- KKR has reduced its stake from 43.4% to 23.2%, increasing the float while indicating that it still sees a long-term opportunity. Applied Materials has bought 14.7% of the company.
- The completion of a new factory in Japan should double production capacity to meet demand from makers of AI processors, high-bandwidth memory, 3D NAND and power devices.
This weekly newsletter pulls together summaries of the top ten most-read Insights across Equity Capital Markets on Smartkarma.
Receive this weekly newsletter keeping 45k+ investors in the loop
1. Midea Group H Share Listing (300 HK): Trading Debut
- Midea Group Co Ltd A (000333 CH) priced its H Share at HK$54.80 to raise HK$31,014 million (US$4.0 billion) in gross proceeds. The H Share will be listed tomorrow.
- The H Share listing price implies an AH discount of 21.4% at the A Share price of RMB63.51. This compares to Haier Smart Home (6690 HK)‘s AH discount of 13.8%.
- Futu grey market data shows that the H Shares closed 5.1% higher at HK$57.60. Our valuation analysis suggests that the H Share listing price is attractive.
2. Midea Group: Offer Upsized at Top Tier. Updated Valuation Analysis
- Midea Group(000333 CH) has increased the shares on offer in Hong Kong by 15% to 565.9 million shares, priced at the top end of the range at HKD54.8 per share.
- With strong investor interest, the company may exercise an over allotment option that could take the deal size to USD 4.6 billion.
- Midea’s Hong Kong pricing reflects a nearly 21% discount to its A-share closing price, compared to the average 33% discount for dual-listed companies between Hong Kong and Shanghai or Shenzhen.
3. Pre-IPO Midea Group H Share – Here Are the Risks Behind
- For the reasons why Midea is eager to IPO in HK, investors shouldn’t just look at the surface of its glory, but delve into the “real motives” behind capital operations.
- The policy of subsidizing the trade-in of home appliances belongs to “early overdraft of demand” and is unsustainable. Valuation logic for the performance increment brought by such policy is P/B.
- If Midea cannot achieve the expected breakthroughs in To B business or internationalization in 2025-2026 to hedge against the weak domestic business, Midea’s performance/valuation in following years would inevitable decline.
4. Auckland Airport Placement – Large NZ$1.4bn Raising, with ACC’s Overhang to Contend With
- Auckland Intl Airport (AIA NZ) is looking to raise NZ$1.4bn (US$863m) in its primary follow-on offering. The offering includes a NZ$1.2bn underwritten placement, together with a NZ$200m non-underwritten retail offer.
- The underwritten placement alone is a large one for the stock to digest at 168 days of three month ADV.
- In this note, we run the deal through our ECM framework and comment on deal dynamics.
5. Kuaishou Placement – US$480m Secondary Block Deal a Small One to Digest
- DCM Investments is looking to raise US$484m via selling its remaining stake in Kuaishou Technology (1024 HK).
- While the current block deal isn’t entirely well flagged per se, it appears that DCM has since been trimming its stake on the open market.
- In this note, we run the deal through our ECM framework and comment on deal dynamics.
6. Bajaj Housing Finance IPO – Valuation Might Get Stretched from Demand Overflow
- Bajaj Housing Finance (BHF IN) raised around US$800m in its India IPO.
- BHF is a non-deposit taking housing finance company engaged in mortgage lending since FY18. Its mortgage products include home loans, loans against property, lease rental discounting and developer financing.
- In our previous notes, we looked at the company’s past performance and valuation. In this note, we will talk about the trading dynamics.
7. K Bank IPO – The Positives – Fast Growth
- K Bank (279570 KS) plans to raise up to US$740m in its upcoming South Korean IPO.
- K Bank is one of three Internet-only banks in Korea. It provides a full range of commercial banking products and services.
- In this note, we talk about the positive aspects of the deal.
8. K Bank IPO Valuation Analysis
- Our base case valuation of K Bank is target price of 9,151 won per share, which is 4% lower than the low end of the IPO price range.
- Given the lack of upside in our target price relative to the IPO price range, we would avoid in subscribing to the IPO.
- Our base case valuation is based on 1.6x P/B multiple using the company’s equity post IPO (2.35 trillion won).
9. ECM Weekly (16th Sep 2024) – Midea, Bajaj Housing, 99 Speed, P N Gadgil, Hozon, Trial, NextDC, Via
- Aequitas Research’s weekly update on the IPOs, placements, lockup expiry and other ECM linked events that were covered by the team over the past week.
- On the IPO front, Midea Group Co Ltd A (000333 CH) hogged much of the limelight this week, although Bajaj Housing Finance (BHF IN) created some history as well.
- We covered the Nextdc Ltd (NXT AU) and Terumo Corp (4543 JP) placements and looked at the possible deals in Trial Holdings (5882 JP) and Via Technologies (2388 TT).
10. K Bank IPO: The Bull Case
- K Bank (279570 KS) is a Korean internet bank. It has launched an IPO to raise up to US$734 million.
- K Bank began operations in April 2017 as the first internet-only bank in Korea. KT Corp (030200 KS) and Woori Bank (000030 KS) are the two largest shareholders.
- The bull case rests on rising market share, solid deposit growth, robust loan book growth, stable NIM, rising margins and a low NPL ratio.
This weekly newsletter pulls together summaries of the top ten most-read Insights across Event-Driven and Index Rebalance on Smartkarma.
Receive this weekly newsletter keeping 45k+ investors in the loop
1. Quiddity Leaderboard KOSPI 200 Dec 24: Up to 4 ADDs & 5 DELs Possible
- KOSPI 200 is a Korean blue-chip index that tracks the 200 largest and most-liquid names listed in the KOSPI section of the Korea Exchange (KRX).
- In this insight, we take a look at the names leading the race to become ADDs and DELs during the upcoming semiannual review in December 2024.
- We expect up to four ADDs and five DELs for the KOSPI 200 index during this index rebal event based on the latest available data. And we have a trade.
2. ASX100/ASX200 Index: Replacement Candidates for Virgin Money (VUK AU)
- Following its acquisition by Nationwide, Virgin Money UK Plc (VUK AU) is scheduled to stop trading on the ASX Ltd (ASX AU) after market close on 25 September.
- Virgin Money UK Plc (VUK AU) is a member of the S&P/ASX100 Index and S&P/ASX 200 (AS51 INDEX) and there will be adhoc inclusions at the close on 25 September.
- There are a couple of stocks vying for inclusion in each index and the next couple of days will determine which ones make it.
3. Trancom (9058) – Another Bain MBO Done Too Cheaply Where “Activist” Dalton Rolls In To The Bid
- Logistics takeovers are hot this year. Any cutting-edge-of-efficiencies business in the space is likely to get a look. Trancom Co Ltd (9058 JP) is one.
- But while logistics assets put into bidding competition like Alps Logistics and Chilled & Frozen get high EV/EBITDA multiples, MBO transactions without competition get done too cheaply.
- Here again, an “Value Activist” “selling into the bid” to reinvest in the levered back end (at the takeover price). That tells you this deal is being done too cheaply.
4. Auckland Airport (AIA NZ) Placement: Index Impact
- Auckland Intl Airport (AIA NZ) has announced an underwritten placement of NZ$1.2bn and a non-underwritten retail offer to raise NZ$200m.
- The stock is trading near the low end of its range over the last few years and the 7% discount from the last close should attract investor interest.
- We estimate passive trackers will need to buy around 13.5% of the placement shares coinciding with the settlement date on 20 September.
5. Fuji Soft (9749 JP): Checkmate as KKR Switches to a Two-Stage Tender
- KKR has rejigged its Fuji Soft Inc (9749 JP) tender offer into a two-stage offer at an unchanged JPY8,800 price. The first stage has no minimum acceptance condition.
- The first stage is designed to facilitate KKR’s acquisition of 3D and Farallon shares, which have tendered and will not withdraw their tenders without KKR’s consent.
- By securing 3D/Farallon’s shares, KKR has effectively blocked a Bain tender offer. Bain could launch a partial offer but it would be constrained by the tradeable share ratio criteria.
6. The New FEFTA List (With 7&I (3382) As “Core”) Is Not a Big Hurdle for Couche-Tard
- On Friday 13 September, the Ministry of Finance of Japan released revisions to the list (Japanese, English) of company classifications under the Foreign Exchange and Foreign Trade Act (FEFTA)
- It appears 72 names were newly upgraded to “Core” (“3”), 21 newly listed companies (since the last list in Nov 2021) were labeled “3”, and six lost their Type3 designation.
- Seven & I Holdings (3382 JP) saw breathless news articles Friday suggesting a foreign takeover became more difficult. Not really.
7. Competition to Take Over Shin Kong (2888 TT) – CTBC in a Bit of a A Sticky Wicket, Wot?
- In late August, Taishin Financial Holding (2887 TT) and Shin Kong Financial Holding (2888 TT) agreed to merge in what appeared to be a hastily papered deal discussed here.
- CTBC Financial Holding (2891 TT) put forth its own proposal at a big premium. Shin Kong traded up. Both deals need FSC approval. Taishin’s deal has a vote 9 October.
- Taishin recently upped terms. And now the FSC has said “no” to CTBC’s proposal. But it’s weird. It’s not “NO”; more like, “not this.” Bit of a sticky wicket here.
8. MV Australia Equal Weight Index Rebalance: One Add, Two Deletes, Capping to Drive Flow
- Pro Medicus Ltd (PME AU) will be added to the MV Australia Equal Weight Index while IGO Ltd (IGO AU) and nib holdings (NHF AU) will be deleted.
- Constituent changes, float changes and capping changes result in a one-way turnover of 6.9% leading to a round-trip trade of A$330m.
- Shorts are pretty big in Pro Medicus Ltd (PME AU) while there has been a recent spike in short interest for IGO Ltd (IGO AU).
9. MV Global Rare Earth/Strategic Metals Index Rebalance: One Deletion & Other Changes
- Sayona Mining (SYA AU) will be deleted from the VanEck Rare Earth/Strategic Me (REMX US) at the close of trading on 20 September.
- Constituent changes, float changes and capping changes result in an estimated one-way turnover of 5.7% and in a round-trip trade of US$35m.
- The largest inflows will be in Eramet, Tronox and Lithium Americas Argentina while the largest outflows will be from Lynas Corp, Sayona Mining and MP Materials (MP US).
10. Merger Arb Mondays (16 Sep) – China TCM, Canvest, GA Pack, Raysum, Seven & I, Fuji Soft, Dyna-Mac
- We summarise the latest spreads and newsflow of merger arb situations we cover across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
- Highest spreads: Yichang HEC Changjiang Pharma (1558 HK), Raysum Co Ltd (8890 JP), Canvest Environmental Protection Group (1381 HK), Greatview Aseptic Packaging (468 HK), China Traditional Chinese Medicine (570 HK).
- Lowest spreads: Fuji Soft Inc (9749 JP), Dyna Mac Holdings (DMHL SP), Seven & I Holdings (3382 JP), Tohokushinsha Film (2329 JP), Alps Logistics (9055 JP).
This weekly newsletter pulls together summaries of the top ten most-read Insights across Macro and Cross Asset Strategy on Smartkarma.
Receive this weekly newsletter keeping 45k+ investors in the loop
1. Announcement of Value-Up Index in Korea on 24 September
- The Korea Exchange is expected to announce its long awaited KRX Korea Value-Up index on 24 September. However, the actual launch of this index will begin on 30 September.
- It is expected to produce two types of indices including a basic price index (PR) and a total return index (TR) under the name of KRX Korea Value-Up index.
- In this insight, we also provide a list of 20 small cap stocks that could be included in the Korea Value Up index.
2. Steno Signals #117 – 25bp equals mayhem, while 50bp equals panic?
- After a major dash for cash at the start of September, markets regained some optimism last week (much to my surprise, in all transparency).
- A weak USD, soft USD rates, and soaring precious metals characterized the week, especially after Mr. Fed source #1, Nick Timiraos, wrote an article suggesting that a 50bp cut is in play.
- USD weakness is something we often observe when the Fed begins cutting rates, as they are perceived to be much more reactive and aggressive than their peers.
3. Just when I Thought I Was Out, They Pull Me Back In – Time for Another Tradeable Rally in the HSI?
- Sentiment, positioning and valuation provide a similar setup to January 2024
- External macro events leading to a better fundamental environment for China
- Foreign Investors’ disappointment in minimal fiscal stimulus provides an asymmetric opportunity
4. Portfolio Watch: Buy Bonds, Wear Diamonds (or Gold)?
- We’ve generally experienced a “softer” September than anticipated in terms of interest rates.
- The typical September issuance seasonality takes a back seat to the upcoming first Fed cut in this cycle.
- Nick Timiraos has hinted that some officials are seriously considering going big already next week, so we may be in for a ride.
5. The Week at a Glance – Is a 50bps Cut Good if Paired with Economic Weakness?
- Good morning from Copenhagen.
- It’s make-or-break this week with Powell taking the stage on Wednesday to reveal whether the rumors from Nick Timiraos about the Fed considering a 50bps cut were actually true after all.
- Markets have been desperately hoping for the 50bps cut, as evidenced by the price action where Fixed Income is being bought regardless of the economic news.
6. The Drill: The Party Seems Over In Freight Rates
- Take aways: Freight rates dropped for the first time since 2022, signaling a slowdown in factors driving rate increases.
- Trade tariffs may have minimal impact on the USD and inflation, with fiscal policies playing a larger role.
- A BRICS monetary union could create instability, while Trump’s policies may push the U.S. toward economic risks.
7. In China: THE SKY FALLING? In the US: TREES GROW TO THE SKY?
- China continues to be the outcast of the investment community even though its GDP is still projected to grow by 4.5% to 5% this year.
- China’s economy has substantial hurdles to overcome but is not in the dire situation portrayed by most commentators and not headed for “Japanification”.
- On the other hand, the US economy has steadied itself but is not in the “Goldilocks” period implied by the media.
8. US Rates: Schrodinger’s Cut
- The Fed is expected to cut rates by 50 basis points on Wednesday, with additional cuts expected in November and December
- There is uncertainty in the markets with regards to the size of the rate cut, with equal probabilities for a 25 or 50 basis point cut
- Near term uncertainty is high, leading to bullishness on volatility in the markets
This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.
9. Fed: 50bps Cut and 175bps More to Follow
- The 50bps cut in the Fed Funds rate to 4.75-5.00% will likely be followed with two 25bps cuts in November and December.
- For 2025, we now look for 125bps rather than 150bps, given our soft landing view and also the 50bps being delivered at the September meeting.
- This would be a 3.00-3.25% Fed Funds rate and just above the revised long run estimate of 2.9%.
10. The Slow March to Fiscal Dominance
- The sovereign debt levels of major developed economies are well on the path to fiscal dominance, underpinned by the U.S. fiscal trajectory.
- Mario Draghi’s proposals for European competitiveness also highlighted a need for debt-financed investments that will also substantially raise EU debt to GDP ratios.
- Investors should expect a regime shift toward higher term premiums on bonds and from paper assets to hard assets in the coming years.
Smartkarma has been included in Tracxn’s 2024 Soonicorn Club of Singapore, recognizing its potential to become a catgegory-leading FinTech company.
SINGAPORE, 17 September 2024: Smartkarma, a leading global investment intelligence platform, is proud to announce its inclusion in the 2024 “Soonicorn Club of Singapore” by Tracxn. This prestigious accolade highlights Smartkarma as one of Singapore’s top Tech companies with significant potential for growth and impact in the financial technology sector.
The Soonicorn Club is an exclusive list curated by Tracxn, celebrating startups that have demonstrated remarkable growth and innovation, with the potential to become unicorns. The selection is based on a rigorous analysis by Tracxn’s specialist teams, which evaluate companies across various metrics, including market size, investment by marquee investors, execution excellence, and future growth prospects.
“We are honored to be recognized in Tracxn’s 2024 Soonicorn Club of Singapore. This accolade is a testament to our team’s dedication to delivering innovative solutions and impactful insights to our clients and partners. At Smartkarma, we are committed to pushing the boundaries of investment intelligence and continuously evolving to meet the needs of the ever-changing financial landscape,” said Raghav Kapoor, CEO and Co-Founder of Smartkarma.
Smartkarma continues to revolutionize the investment intelligence landscape by leveraging the growing ecosystem of independent research providers, with a strong focus on integrating cutting-edge AI technology. Smartkarma remains committed to empowering investors and strategic decision-makers with real-time actionable insight, premium data analytics, and direct connectivity to top-ranked investment analysts.
—–ENDS—–
Media Contact
Arham Jain
Email: [email protected]
About Smartkarma
Smartkarma is a global investment intelligence platform based in Singapore. It provides institutional investors with actionable insights, high-touch analyst access and specialist data subscriptions to make informed investment decisions. With a focus on innovation and technology, Smartkarma offers a wide range of data solutions and analytics across various sectors, including equities and commodities. Smartkarma Shareholders include the Singapore Exchange (SGX), Enterprise Singapore Seeds Capital, Peak XV (formerly Sequoia Capital), Wavemaker and Jungle Ventures. Learn more at smartkarma.com.
This weekly newsletter pulls together summaries of the top ten most-read Insights across Tech Hardware and Semiconductor on Smartkarma.
Receive this weekly newsletter keeping 45k+ investors in the loop
1. Advantest (6857 JP): High Valuation, Low Visibility
- Visibility is poor. Following excellent 1Q results, management raised FY Mar-25 sales guidance by 14%, operating profit guidance by 53% and net profit guidance by 57%.
- Strong demand for AI processors and memory should support more than 35% growth in IC tester revenues and a doubling of operating profit in the two years to Mar-26.
- The shares have dropped to the bottom of their recent trading range, but are still selling at more than 30x our EPS estimate for next fiscal year.
2. Taiwan Dual-Listings Monitor: TSMC 33% Growth, UMC Headroom Decrease, ASE Historically Low Premium
- TSMC: +15.9% Premium; Sales Rose 33% YoY in August & Headroom Increased
- UMC: +1.8% Premium; Largest Monthly Decrease in ADR Headroom, Has Consistently Been Decreasing Since May
- ASE: +2.0% Premium; At Current Level Can Consider Going Long the Premium
3. Taiwan Tech Weekly: TSMC Becoming More Dominant; Apple’s AI Opportunity; Taiwan Market Hammered
- TSMC Extends Global Foundry Dominance Amid 33% Sales Surge – A Buy on Weakness Despite Market Concerns
- Apple ‘Glowtime’ AI Announcements: Mixed Analyst and Media Reactions May Overlook Key Advantage — Apple Is Best Positioned to Seamlessly Integrate AI Into Your Smartphone Experience
- Taiwan Market Gainers & Losers: Consumer Electronics & Memory Names Some of the Hardest Hit
4. Silicon Wafers. Recovery Is Nigh Yet Valuations Have Slumped To 5 Year Lows. But Why?
- During Q224, the top 4 silicon wafer manufacturers saw their revenues increase 12.3% QoQ to ~$2.5 billion. This was down 3% YoY.
- Silicon wafer area shipments in Q224 amounted to 3,035 million square inches (MSI), an increase of 7.1% QoQ but a decline of 8.9% YoY.
- The Silicon wafer segment is entering a recovery phase. Yet, you can buy the key players today for the same price you would have paid 5 years ago. That’s nice..
This weekly newsletter pulls together summaries of the top ten most-read Insights across Equity Capital Markets on Smartkarma.
Receive this weekly newsletter keeping 45k+ investors in the loop
1. Midea Group H Share Listing (300 HK): Valuation Insights
- Midea Group Co Ltd A (000333 CH) has launched its H Share listing at HK$52.00-54.80 per share. Pricing will be on 13 September, and the listing on 17 September.
- We previously discussed the listing in Midea Group H Share Listing: Latest Updates Points to a Business in Rude Health and Midea Group H Share Listing: AH Discount Views.
- Our valuation analysis suggests that the H Share listing range is attractive. We would participate in the listing.
2. Midea Group HK IPO Valuation Analysis
- We would subscribe to the HK offering of Midea Group due to its attractive valuations, strong fundamentals, and meaningful price discount relative to the A shares.
- We believe a premium valuation relative to the comps is appropriate for Midea Group due to its higher sales growth, EBIT margin, and ROE.
- Pricing of this offering is expected to be completed on 13 September and listing on 17 September.
3. Midea HK Listing: Valuation Insights
- Chinese home appliance maker Midea has announced the terms for its IPO. The company plans to raise $3.46bn at an indicative price range of HK$52.0-54.8 per share.
- The company has a diversified product portfolio, well-balanced exposure to domestic as well as overseas markets and a growing robotics business.
- As we expected, the HK offering is priced at around 25% discount to it’s A-shares and our analysis suggests that Midea’s HK offering is priced attractively.
4. Midea A/H Listing – Bigger Deal, Better Pricing
- Midea Group Co Ltd A (000333 CH) aims to raise up to US$3.5bn in its H-share listing, the deal is somewhat larger than what was being spoken about earlier.
- Midea Group is one of the world’s largest home appliance manufacturing companies with a presence in over 200 countries. Its A-shares have been listed since 2013.
- We have covered the deal background in our previous notes. In this note, we talk about valuations.
5. K Bank IPO – The Biggest IPO in Korea in 2024
- K Bank is the biggest IPO in Korea in 2024. The IPO price range is from 9,500 won to 12,000 won. It is offering 82 million shares in this IPO.
- According to the bankers’ valuation, the expected market cap of the company is from 4.0 trillion won to 5.0 trillion won.
- The IPO deal size is 779 billion (US$579 million) to 984 billion won (US$732 million).
6. Pre-IPO Midea Group H Share (PHIP Updates) – Some Points Worth the Attention
- China’s home appliance industry is facing challenges. Even with large-scale “trade in” activities, its expansion effect on market size still appears limited, making it difficult to trigger significant growth momentum.
- However, Midea still achieved strong performance growth in 24H1. Both revenue and net profit showed double-digit growth rates. Midea’s business expansion and product profitability are much better than peers.
- Performance drivers are overseas business and air conditioners. Our forecast is Midea’s 2024 net profit would reach about RMB37 billion. Valuation of Midea could be higher than Haier Smart Home.
7. Terumo Placement Follow-Up – Correction Has Been Inline with Recent Cross-Shareholding Unwind
- A group of shareholders are looking to raise around US$1.36bn from selling ~5% stake in Terumo Corp (4543 JP).
- We have covered the background of the deal in our earlier note, Terumo Placement – US$1.4bn Secondary Selldown, Buyback Should Aid Deal Dynamics.
- In this note, we talk about the updates since and look at the performance of some of the past large Japan deals.
8. Terumo (4543 JP): The Current Playbook
- Since the US$1.4 billion secondary placement announcement, Terumo Corp (4543 JP)’s shares are down 3.5% from the undisturbed price of JPY2,771 per share (29 August).
- Looking at recent large Japanese placements is instructive to understand the potential trading pattern. So far, Terumo’s shares have followed the pattern of previous large placements.
- The offering will likely be priced on 10 September. Despite Kokusai and Honda’s disappointing performance, the average large Japanese placement tends to generate positive returns.
9. LG Electronics India IPO: Potential Big Gains. Booming Demand, Buoyant Valuations
- LG Electronics’s India business IPO could be valued above USD 7 billion, exceeding market expectations, driven by its dominant position in India’s growing home appliances market and strong sector valuations.
- Favourable market conditions and robust sector growth make now an ideal time for LG Electronics (066570 KS) to launch its India IPO, securing high investor interest and compelling valuations.
- In a recent interview, LG Electronics(066570 KS) CEO William Cho mentioned that an Indian market debut is one of several options being considered to revitalise the company’s consumer electronics business.
10. Bajaj Housing Finance IPO- Forensic Analysis
- Bajaj Housing Finance (BHF IN) upcoming IPO is worth INR 65.6 bn, comprising of fresh issue worth INR 35.6 bn and offer for sale worth INR 30 bn.
- The company reports strong KPIs and has been better than peers in several aspects. AUM growth is strong and is driven by Developer Financing and Lease Rental Discounting.
- There are few important cautions regarding the NHB observations and assignments.
This weekly newsletter pulls together summaries of the top ten most-read Insights across Event-Driven and Index Rebalance on Smartkarma.
Receive this weekly newsletter keeping 45k+ investors in the loop
1. Midea Group (300 HK): IPO Open Now; Upcoming Index Flows
- The Midea Group (300 HK) IPO is being offered at a price range of HK$52-54.8/share, a discount of 20.9%-25% to Midea Group. That will raise US$3.28bn-US$3.46bn for the company.
- Midea Group (300 HK) will not get Fast Entry to the HSCI but will be added to Southbound Stock Connect on 14 October once the price stabilisation period has ended.
- Midea Group (300 HK) should get Fast Entry to one global index and that could lead to inclusion in the iShares China Large-Cap (FXI) (FXI US) too.
2. Select Sector Indices: Inflows to Apple, Palantir, Dell Will Add to SPX Buying
- Constituent changes to the S&P 500 INDEX and weight changes as a result of the market consultation proposals being adopted will result in a round-trip trade of US$31.5bn.
- The largest one-way turnover is expected in the Consumer Staples Select Sector SPDR Fund, Technology Select Sector SPDR, Materials Select Sector SPDR and Communication Services Select Sector SPDR Fund.
- The inflows to Apple (AAPL US), Palantir Technologies (PLTR US) and Dell Technologies (DELL US) will add to the buying from the S&P 500 INDEX (SPX INDEX) trackers.
3. CSI300 Index Rebalance Preview: Round-Trip Trade Tops US$6bn as ETF Creations Soar
- There could be 17 changes at the December rebalance with the Industrials sector gaining 3 index spots and the Information Technology sector losing 3 spots.
- We estimate one-way turnover of 2.9% at the rebalance leading to a one-way trade of CNY 21.96bn (US$3.1bn). There are 22 stocks with over 3x ADV to trade.
- Impact on the stocks has increased as creations in ETFs linked to the CSI 300 Index continue. That flow will reverse from the deletions in the next few months.
4. Midea Group (300 HK): Priced at Top End; Offer Size Adj Option Exercise Would Ease Index Fast Entry
- Media reports indicate that Midea Group (000333 CH) has priced its H-shares IPO at HK$54.8/share, the top of the range. That is a 19.85% discount to the A-shares.
- Reports also indicate that the IPO was oversubscribed multiple times with Hillhouse and GIC putting in large orders. That could result in the Offer Size Adjustment Option being exercised.
- The exercise of the Offer Size Adjustment Option will take the IPO raise to HK$31bn (US$3.98bn) and index inclusion in some of the larger indices will become a lot easier.
5. S&P/ASX Index Rebalance (Sep 2024): Two Big Surprises; Positioning Is Mixed
- There are 2 changes for the S&P/ASX100 Index, 3 changes for the S&P/ASX 200 (AS51 INDEX) and 16 adds/ 8 deletes for the S&P/ASX300 Index.
- The two big surprises are the inclusion of Guzman Y Gomez (GYG AU) and Yancoal Australia (YAL AU) in the S&P/ASX 200 (AS51 INDEX) and S&P/ASX300 Index.
- The adds to the indices have outperformed the deletes over the last few months and there could be profit-taking in the next few days.
6. MBK’s Dual Tenders for Korea Zinc and Youngpoong Precision: The Largest Deal Ever in Korea
- MBK launches a tender offer to acquire 14.6% of Korea Zinc at ₩660,000 per share, a ₩2T deal with an 18.7% premium. Offer runs from September 13 to October 4.
- On top of that, MBK’s also rolling out a tender offer for Young Poong Precision at ₩20,000 per share—a hefty 113% premium over yesterday’s close.
- Spread action is possible if the Choi family counters, driving volatility. The market’s watching for a higher bid, which could create trading opportunities amid rising spread volatility.
7. 7&I Rejects ACT’s Bid As Too Low, Not Worth Discussing, ACT Whines, 7&I Taps The Sign
- Late last week, the Nikkei reported Seven & I Holdings (3382 JP) would send a letter to Couche-Tard saying they reviewed ACT’s Proposal and deemed it “inadequate.” Indeed it was.
- 7&i then published the Board’s letter, saying 7&i remained open to discussions but ACT’s Offer “grossly undervalued” 7&i’s intrinsic value and lacked in other areas. ACT responded with a “letter.”
- But ACT’s “letter” was a press release aimed not at 7&i but the public. 7&i released a terse response today. ACT is the suitor. It needs to act like it.
8. SENSEX Index Rebalance Preview: Trent Could Replace Bajaj Finserv; BUT F&O Adds Could Change That
- As things stand, Trent Ltd (TRENT IN) could replace Bajaj Finserv (BJFIN IN) in the S&P BSE SENSEX Index (SENSEX INDEX) at the close on 20 December.
- Addition to the F&O list could see Zomato (ZOMATO IN) added to the index instead. That could then result in two changes to the S&P BSE SENSEX Index in December.
- Trent Ltd (TRENT IN) is also an inclusion to the NIFTY Index (NIFTY INDEX) later this month and the pool of shares available for active investors is getting smaller.
9. Taking Advantage of Terumo (4543) Weakness And After-Offering Flow
- Terumo Corp (4543 JP) was able to hang in well after the announcement, up until the day or two before pricing date, then the shares were walloped into Pricing.
- After pricing, they have fallen and erased most of the discount. That’s an opportunity.
- The shares have underperformed Peers, and there is flow to come. This deal was, as advertised, smaller than it first appeared.
10. Seven & I Holdings (3382 JP): State of Play
- Despite Seven & I Holdings (3382 JP)‘s rejection, Alimentation Couche-Tard (ATD CN) remains prepared to enter collaborative and friendly discussions to focus on finding greater value for 7&i shareholders.
- Couche-Tard’s options are to return with a revised offer, go hostile or walk away. Couche-Tard will likely test the Board’s resolve by returning with a higher offer.
- The Board’s options are to go through the motions (appointing IFAs), conduct a market check or launch a more aggressive action plan to placate restive shareholders.
This weekly newsletter pulls together summaries of the top ten most-read Insights across Macro and Cross Asset Strategy on Smartkarma.
Receive this weekly newsletter keeping 45k+ investors in the loop
1. Global Commodities: The art of keeping up with yesterday and avoiding tomorrow
- Output hikes announced in fourth quarter
- Various commodities including copper, natural gas, and grain oilseeds have experienced sharp declines
- Oil prices influenced by economic indicators, strong underlying demand, and declining global visible oil inventories
This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.
2. Korea Exchange Plans to List Additional 39 Stock Futures and 6 Stock Options
- On 12 September, the Korea Exchange announced that it plans to list additional 39 stock futures (27 KOSPI and 12 KOSDAQ) and 6 stock options on 4 November.
- With these listings, the stock options will also be available for most of the top stocks in the stock market, including Samsung Biologics and Samsung Life Insurance.
- Given that shorting of stocks is still essentially banned in Korea, the use of stock futures and options are likely to be increasingly used by investors to improve risk management.
3. Don’t Shoot the Piano Player
- The undulating prospect of a 25bps or 50bps cut at the September Fed meeting coupled with a foggy future rate path is weighing on market sentiment
- The state of financial market conditions–broadly and narrowly defined–may abruptly influence the outcome of upcoming Fed meeting/s, or vice versa
- My weekly estimate of market leverage in the US hedge fund sector in total, which remains elevated at this time, warrants more attention
4. Positioning Watch: Markets Are Positioned for Softness (in Rates)
- Hello everyone, and welcome back to our weekly positioning watch.
- A lot is happening in markets ahead of what could be a significant turning point in sentiment, with the August CPI report landing in our inboxes at 14:30 CPH time.
- The debate between Harris and Trump seems to have set the tone in markets leading up to the event, with the USD selling off as markets agree that Trump is likely the more bullish of the two on USD.
5. EM Watch: The Non-Feasible Return of the EM Carry Case Amidst a Global Slowdown
- Welcome to our weekly EM Watch, where we examine Emerging Markets (with a particular focus on China) through the lens of Western investors.
- It’s been a rough month for anything linked to China, including industrially sensitive commodities.
- According to one of the most reliable live gauges of Chinese energy demand—the Singapore Gasoil-Dubai Crude Crack Swap—we are still on a slippery slope toward weaker demand from China.
6. Steno Signals #116 – Here comes the dash for USD cash!
- Happy Sunday, folks—if you can stay upbeat in the current market environment, that is.
- We have had September 100% spot on, and the developments late on Friday support our notion that a dash for USD cash will arrive through the month.
- The USD started rebounding alongside the sell-off in commodities and risk assets, following Waller’s appearance during the FOMC Q&A.
7. EM Watch: China was WEAKENING even before the decline in Western demand
- Since July, US macroeconomic momentum has weakened substantially.
- We are now back on a negative trajectory for cyclical growth, with signs of fading momentum in some service sectors, including leisure and hospitality.
- In the spring, we observed a significant build-up of orders relative to inventories as manufacturers sought to bypass the latent pressure from trade tariffs by front-loading activity.
8. China Equities: More of the Same
- We are strategically underweight China Equities in global and EM equity baskets, due to the structural slowing of growth and low EPS prospects.
- Event risk around the U.S. presidential election will also start to be considered.
- Further targeted policies from China authorities could cause intermittent trading driven short-covering, but aggressive game changing policy would be required to sustain a rally.
9. How to Trade the Seasonal Weakness
- The stock market is due for a period of sloppiness and corrective action in the next two months
- However, macro and technical indicators do not point to a major market top.
- We have outlined a number of bullish tripwires for traders to take advantage of a pending sale on stock prices and buy the dip.
10. US: Harris Wins the Presidential Debate Hands Down, but Impact on Race Still Mild
- In possibly the only Trump-Harris presidential debate, VP Kamala Harris clearly won, according to polls/focus groups conducted by FoxNews and CNN, as well as the vast majority of commentators.
- Harris largely remained focused on centrist positions, and was able to bait Trump into angry outbursts and digressions away from his key talking points. The economy remained her Achilles Heel.
- Weakness on the economy, and the failure to highlight her “freedom” theme, meant that Harris didn’t score a slam dunk. The race is a dead heat, Harris a nose ahead.