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Smartkarma Daily Briefs

Jul 16
0

Daily Brief Equity Bottom-Up: BUY/SELL/HOLD: Hong Kong Stocks Update (July 15) and more

By | Daily Briefs, Equity Bottom-Up

In today’s briefing:

  • BUY/SELL/HOLD: Hong Kong Stocks Update (July 15)
  • Money Forward (3994) | Metronomic Growth
  • Wasion (3393): Smart Power Meter
  • DCI Indonesia (DCII IJ) – More Than a Concept
  • Vega’s Lowya Expanding Omnichannel to Grow Audience
  • China Shineway Pharmaceutical (2877.HK) – Negative Growth in 24H1 Seems Inevitable
  • APAC Luxury Industry Series Update: Travel Rebounds While Goods Decline
  • Centurion CEO Kong Chee Min adds to interest at S$0.59 per share
  • BRBY: New CEO & Yet More Bad News for the Troubled Retailer
  • Hisamitsu Pharmaceutical (4530 JP): Mixed Performance in Q1FY25; No Change in FY25 Guidance

BUY/SELL/HOLD: Hong Kong Stocks Update (July 15)

By David Mudd

  • Hong Kong market still trades at a substantial discount to Analyst year end price targets.
  • Budweiser APAC is dependent on China’s consumer to lift sales while Anta Sports is targeting increased sales from the upcoming Paris Olympics.
  • Sunny Optical is seeing substantial growth from it EV segment and Haitian continues to grow its international sales.  Shineway RX is a rare value play in the pharmaceutical sector.

Money Forward (3994) | Metronomic Growth

By Mark Chadwick

  • Money Forward released Q2 results post market close on Friday. Revenue growth of +41% YoY beat our estimates by 7%.
  • We highlight continued solid financial metrics supported by growth in SaaS ARR and in particular mid-sized corporate growth.
  • No change to our bullish long-term view on the company. Stock has run up around 11% ahead of earnings but we see further 20%+ upside from here. 

Wasion (3393): Smart Power Meter

By Henry Soediarko

  • Energy is scarce, thus, besides renewable energy, energy efficiency should also be the key focus. 
  • Wasion Group Holdings (3393 HK) customers have grown from domestic grids to both non-grid and grid domestic as well as overseas customers (Latin America). 
  • Despite a 65% YTD return, it is still trading at 11x PER, with a 4% dividend yield, 6x EV/EBITDA, and 1.2x PBR. 

DCI Indonesia (DCII IJ) – More Than a Concept

By Angus Mackintosh

  • DCI Indonesia (DCII IJ) is Indonesia’s leading operator of Tier 4 data centres, which require the highest operational standards, with its main business in co-location services.
  • The company has a long track record of growth in both sales and profits, making it more than a concept, with a well-thought-out expansion at its three existing data centres.
  • DCI Indonesia is hard to justify on current valuations but has a strong track record on execution with a high pedigree management team and customer base, with backing from Salim.

Vega’s Lowya Expanding Omnichannel to Grow Audience

By Michael Causton

  • Lowya began as an online furniture retailer and is still one of the largest in e-commerce, but limited brand awareness has held it back and sales fell last year. 
  • Vega Corporation, Lowya’s parent, is now expanding physical stores and offering omnichannel solutions to fix the problem.
  • This makes sense in a market where stores remain preeminent and are likely to remain so.

China Shineway Pharmaceutical (2877.HK) – Negative Growth in 24H1 Seems Inevitable

By Xinyao (Criss) Wang

  • Three business segments of Shineway showed negative YoY growth in 24Q1. 24Q2 performance could remain sluggish. We’re not optimistic about the 24H1 results due to the high base in 23H1.
  • It is expected that Shineway’s growth in 24H2 would pick up. If revenue growth of Shineway in 2024 full-year could be double-digit (e.g. 10-15% YoY), it is already good.
  • Shineway is undervalued. It has sufficient cash (cash balance of RMB5.9 billion by 2023) and is willing to distribute dividends (usually twice a year). Shineway is suitable for long-term holding.

APAC Luxury Industry Series Update: Travel Rebounds While Goods Decline

By Oshadhi Kumarasiri

Centurion CEO Kong Chee Min adds to interest at S$0.59 per share

By Geoff Howie

  • Centurion CEO Kong Chee Min adds to interest at S$0.59 per share CapitaLand Investment led the buyback consideration tally, acquiring 8,312,600 shares at an average price of S$2.64 per share.
  • On Jul 4, Centurion Corp CEO Kong Chee Min acquired 115,000 shares, at an average price of S$0.59 cents per share.

BRBY: New CEO & Yet More Bad News for the Troubled Retailer

By Investment Talk

  • It was hard to imagine a worse first quarter for Burberry.
  • At a time when investors were desperate for some positive news following a torrentially bad fiscal 2024, Burberry’s Q1 trading update emphasised a “luxury market that is proving more challenging than expected” with the weakness highlighted coming into FY25 having “deepened” .
  • Retail revenue for the quarter of £458 million came in 22% below the prior year.

Hisamitsu Pharmaceutical (4530 JP): Mixed Performance in Q1FY25; No Change in FY25 Guidance

By Tina Banerjee

  • Hisamitsu Pharmaceutical Co (4530 JP) has reported double-digit growth in revenue and net profit in Q1FY25. However, operating profit decreased 5% YoY due to higher expenses.  
  • Topline growth was mainly driven by Salonpas, which was named the world’s no. 1 OTC topical analgesic patch band for the eighth consecutive year.  
  • The company reiterated FY25 guidance of 7% revenue growth and low double-digit operating and net profit growth, as an increase in operating profit is expected for the full-year as planned.

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Jul 16
0

Daily Brief Macro: Steno Signals #108 – A messianic Donald and more

By | Daily Briefs, Macro

In today’s briefing:

  • Steno Signals #108 – A messianic Donald
  • The Week At A Glance: Another inflation shocker in the UK paired with a rebound in US retail sales?
  • The Week That Was in ASEAN@Smartkarma – Delfi the Chocolatier, Second Chance Property, and Jollibee.
  • Oil: An Unsustainable Uptick?
  • Political Upheavals Fail to Curb Markets’ Appetite for Risk
  • US June 2024 Retail Sales Preview – A Possible Turing Point for the Economy
  • Energy Cable: Copper Prices Are Too High!
  • U.S. Oil and Gas Rig Count Continues on Downward Trend
  • Mega Copper M&A Manoeuvres
  • Regional Economics: Services or Manufacturing, Where Does the Future of Growth Lie?

Steno Signals #108 – A messianic Donald

By Andreas Steno

  • Happy Sunday from Copenhagen after the atrocious assassination attempt in Pennsylvania late Saturday.
  • Trump was apparently struck by some fragments but managed to raise his fist and greet his supporters in a strong show of defiance as he was escorted off the stage.
  • This incident will undoubtedly dominate the campaign in the coming days and weeks, transforming his appearance at the upcoming Republican Convention into a near-messianic event.

The Week At A Glance: Another inflation shocker in the UK paired with a rebound in US retail sales?

By Andreas Steno

  • Morning from Europe! Remember that we release our “Week at a glance” publication instead of the “Something for your Espresso” every Monday before lunch-time.
  • Our aim is to digest the release calendar in an actionable way and assess the risk/reward around the macro themes in the context of the economic release calendar.
  • This week, we will focus on the US consumer (Retail Sales), UK inflation (CPI) and the EUR rates (ECB meeting).

The Week That Was in ASEAN@Smartkarma – Delfi the Chocolatier, Second Chance Property, and Jollibee.

By Angus Mackintosh

Oil: An Unsustainable Uptick?

By Alastair Newton

  • The Opec secretariat has made a bullish July forecast for oil demand, which deviates from the industry’s near-consensus.
  • The industry’s consensus is more aligned with the International Energy Agency’s assessment.
  • Given this, the recent increase in the price of Brent crude should be approached with caution.

Political Upheavals Fail to Curb Markets’ Appetite for Risk

By Said Desaque

  • European financial markets have been remarkably calm in the wake of political upheaval, particularly in France. Continued weak potential GDP growth lays the foundations for capital migration to the US.
  • US political turbulence has not unnerved financial markets, despite inflationary implications of President Trump’s agenda. High retail investor participation in the rally in US equities is sending a warning signal.
  • US equities are priced to perfection in absolute valuation and relative to inflation. Secular valuations appear rich relative to history, suggesting a period of consolidation would be a welcome development. 

US June 2024 Retail Sales Preview – A Possible Turing Point for the Economy

By Alex Ng

  • Due 16 July, US June retail sale is expected to see a weak end to Q2 from US retail sales, with a 0.6% decline, and a 0.3% decline ex autos.
  • Industry data suggests a significant dip in auto sales though trend in autos continues to have no clear direction. Gasoline prices look set to restrain sales values.
  • June retail sales seems set to convey an end to economic prosperity and will be sending signal of an upcoming economic down turn.

Energy Cable: Copper Prices Are Too High!

By Ulrik Simmelholt

  • Takeaways: Copper diverging from its fundamentals – we continue to hold a bearish outlook as prices and positioning appear disconnected from macro variables
  • Inventories in the US are building
  • Shipping lanes are easing, and our Trump basket gives you the green light to continue in crude et. al. 

U.S. Oil and Gas Rig Count Continues on Downward Trend

By Suhas Reddy

  • US oil and gas rig count fell by 1 to 584 for the week ending 12/Jul, after rising by 4 the previous week. 
  • US oil rig count fell by 1 to 478, indicating 59 fewer oil rigs as compared to the same week last year. It is at its lowest since December 2021.
  • Despite a decline in the US oil rig count, US crude oil production matched the all-time high production of 13.3m bpd for the week ending 5/Jul, according to the EIA.

Mega Copper M&A Manoeuvres

By Money of Mine

  • BHP and Lundin rumored to be considering a joint bid for Filo Mining in the Vicuna district, an emerging copper super district in Chile and Argentina.
  • Lundin Mining owns the most advanced project, Jose Maria, in the region which is permitted and fid ready.
  • Argentina now has a supportive business regime, making it an optimal time for development in the region. Lundin Group retains a 33% stake in Filo while BHP owns a 6% stake.

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

Regional Economics: Services or Manufacturing, Where Does the Future of Growth Lie?

By Manu Bhaskaran

  • Even if it is premature to proclaim the death of manufacturing-led growth, the strategy that drove the success of the East Asian miracles may no longer be easily replicated. 
  • The services sector has several advantages such as a large degree of labour absorption and continued momentum in international trade. But there are other limitations. 
  • There is little need to place all of a country’s eggs in a single industry’s basket; the menu of policies that are beneficial to both is not a short one. 

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Jul 16
0

Daily Brief South Korea: Korea Stock Exchange KOSPI 200, SK Innovation and more

By | Daily Briefs, South Korea

In today’s briefing:

  • Recently Observed Market Flow Movements Related to Korea’s Value-Up Initiatives
  • SK Innovation and SK E&S to Discuss a Potential Merger on 17 July

Recently Observed Market Flow Movements Related to Korea’s Value-Up Initiatives

By Sanghyun Park

  • Nine companies disclosed value-up plans, with four official and five pending disclosures. Initially, these announcements boosted stock prices, but long-term correlations were inconclusive. Yet, shareholder returns notably rose in H1.
  • NPS increased stakes in three of the nine recently announced value-up companies. They share traits in value-up trading (large caps & low PBR), potentially guiding our strategy as NPS enters.
  • BlackRock’s Hong Kong branch has recently engaged with six Korean asset management firms for potential entrustment of its Asian fund’s Korean investment portion, focusing on the value-up policy.

SK Innovation and SK E&S to Discuss a Potential Merger on 17 July

By Douglas Kim

  • SK Innovation (096770 KS) and SK E&S plan to hold a board meeting on 17 July to discuss the potential merger between the two companies.
  • If this merger is successful, it would create the eighth largest company in Korea with a combined assets of 106 trillion won (US$77 billion). 
  • Although the merger ratio is not yet available, we believe that this potential merger could potentially benefit SK E&S and SK Inc but could be negative on SK Innovation.

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Jul 16
0

Daily Brief Singapore: Hour Glass, Mandarin Oriental International, ARA US Hospitality Trust and more

By | Daily Briefs, Singapore

In today’s briefing:

  • Centurion CEO Kong Chee Min adds to interest at S$0.59 per share
  • APAC Luxury Industry Series Update: Travel Rebounds While Goods Decline
  • REIT Watch – Demand boosts hospitality S-Reits’ hotel RevPAR

Centurion CEO Kong Chee Min adds to interest at S$0.59 per share

By Geoff Howie

  • Centurion CEO Kong Chee Min adds to interest at S$0.59 per share CapitaLand Investment led the buyback consideration tally, acquiring 8,312,600 shares at an average price of S$2.64 per share.
  • On Jul 4, Centurion Corp CEO Kong Chee Min acquired 115,000 shares, at an average price of S$0.59 cents per share.

APAC Luxury Industry Series Update: Travel Rebounds While Goods Decline

By Oshadhi Kumarasiri

REIT Watch – Demand boosts hospitality S-Reits’ hotel RevPAR

By Geoff Howie

  • Demand boosts hospitality S-Reits’ hotel RevPAR Among the seven S-Reit sub-sectors, hospitality S-Reits are the fourth largest in terms of combined market capitalisation.
  • The five, in terms of market capitalisation, are: CapitaLand Ascott Trust, Far East Hospitality Trust, CDL Hospitality Trusts, Frasers Hospitality Trust, and ARA US Hospitality Trust.

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Jul 16
0

Daily Brief Indonesia: DCI Indonesia Tbk PT and more

By | Daily Briefs, Indonesia

In today’s briefing:

  • DCI Indonesia (DCII IJ) – More Than a Concept

DCI Indonesia (DCII IJ) – More Than a Concept

By Angus Mackintosh

  • DCI Indonesia (DCII IJ) is Indonesia’s leading operator of Tier 4 data centres, which require the highest operational standards, with its main business in co-location services.
  • The company has a long track record of growth in both sales and profits, making it more than a concept, with a well-thought-out expansion at its three existing data centres.
  • DCI Indonesia is hard to justify on current valuations but has a strong track record on execution with a high pedigree management team and customer base, with backing from Salim.

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Jul 16
0

Daily Brief United States: Crude Oil, Copper, Bitcoin, CVR Partners, JAKKS Pacific , Avita Medical , Platinum, Bassett Furniture Inds and more

By | Daily Briefs, United States

In today’s briefing:

  • U.S. Oil and Gas Rig Count Continues on Downward Trend
  • Mega Copper M&A Manoeuvres
  • Crypto Crisp: No Fear, Prices Soar
  • Cvr Partners Lp (UAN) – Monday, Apr 15, 2024
  • JAKK: Initiating Coverage of JAKKS with Buy, $24 PT; Building a Better Model
  • Avita Medical Inc (RCEL) – Monday, Apr 15, 2024
  • It Got Quiet around Platinum and Palladium
  • Bassett Furniture Industries, Inc. – 2QFY24 Results Were Ugly

U.S. Oil and Gas Rig Count Continues on Downward Trend

By Suhas Reddy

  • US oil and gas rig count fell by 1 to 584 for the week ending 12/Jul, after rising by 4 the previous week. 
  • US oil rig count fell by 1 to 478, indicating 59 fewer oil rigs as compared to the same week last year. It is at its lowest since December 2021.
  • Despite a decline in the US oil rig count, US crude oil production matched the all-time high production of 13.3m bpd for the week ending 5/Jul, according to the EIA.

Mega Copper M&A Manoeuvres

By Money of Mine

  • BHP and Lundin rumored to be considering a joint bid for Filo Mining in the Vicuna district, an emerging copper super district in Chile and Argentina.
  • Lundin Mining owns the most advanced project, Jose Maria, in the region which is permitted and fid ready.
  • Argentina now has a supportive business regime, making it an optimal time for development in the region. Lundin Group retains a 33% stake in Filo while BHP owns a 6% stake.

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

Crypto Crisp: No Fear, Prices Soar

By Mads Eberhardt

  • The crypto market has recently diverged not only from the rapidly improving liquidity conditions in the broader economy but also from various positive crypto-specific factors such as declining exchange balances, regulatory clarity, reduced Bitcoin miners’ reserves, the historically positive post-Halving period, and the imminent launch of Ethereum spot ETFs.
  • This decoupling has been driven by the German government selling nearly 50,000 bitcoins over the past few weeks, most of which were sold last week, along with the start of repayments to Mt. Gox creditors.
  • The substantial rebound in crypto assets this weekend, as the German Bitcoin selling ended on Friday, highlights that the tumbling prices in recent weeks were merely due to the German government, Mt. Gox, and, not least, the unjustified fear of substantial selling pressure, as we argued in last week’s Crypto Crisp titled ‘Buy the Dip’.

Cvr Partners Lp (UAN) – Monday, Apr 15, 2024

By Value Investors Club

  • UAN is undervalued due to market volatility and has potential for future share price increases
  • The company’s strategic location and cost advantages in production and distribution make it a strong player in the nitrogen fertilizer market
  • UAN has a normalized FCF yield of 17% and offers a significant increase in share price, making it an attractive investment opportunity

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

JAKK: Initiating Coverage of JAKKS with Buy, $24 PT; Building a Better Model

By Small Cap Consumer Research

  • We are initiating coverage of JAKKS Pacific, Inc. (“JAKKS” or the company), a leading designer, producer, marketer, seller and distributor of multi-brand licensed toys and related products, with a Buy rating and a $24 price target, or 7.5X our 2025 EPS projection of $3.20.
  • We believe, after a rough start to 2024, driven by weak content-led movie driven results, JAKKS is nearing a stabilization of the business and, with new licensing relationships (The Simpsons and Authentic Brands) and content-led movies (Moana 2, Sonic the Hedgehog 3) coming to the fore, is positioned for upside.
  • Further, as of 1Q24, JAKKS is debt free for the first time in recent history, with cash per share of over $3.40 and tangible book value of over $14.75 per share.

Avita Medical Inc (RCEL) – Monday, Apr 15, 2024

By Value Investors Club

  • AVITA Medical has a 75% market share in the burns market, surpassing competitors
  • The company’s recent financial performance has been strong, with an 84% increase in revenue in 2020
  • AVITA Medical has significant potential for growth and value creation in the future, given its position in the burns industry and growing market opportunity

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

It Got Quiet around Platinum and Palladium

By The Commodity Report

  • It Got Quiet around Platinum and Palladium While sales of EVs around the world continue to surge, it kind of became obvious that BEVs or mild hybrids are the choice for many consumers going forward.
  • Those systems offer people the option to drive fully electric within the city and use the combustion system for further destinations.
  • If the demand for BEVs continues to surge, two metals could be supported by that fact which builds the investment case for platinum and palladium.

Bassett Furniture Industries, Inc. – 2QFY24 Results Were Ugly

By Water Tower Research

  • Herein, we analyze and discuss Bassett’s 2QFY24 earnings report.
  • Management reported its results for the interim period that ended on June 1, 2024, on Wednesday after market close.
  • It also conducted its “first-ever” management-sponsored and conducted earnings conference call on Thursday before market open, taking and answering analyst questions live.

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Jul 16
0

Daily Brief India: Sagility India, Vedanta Resources and more

By | Daily Briefs, India

In today’s briefing:

  • Sagility India Pre-IPO Tearsheet
  • Morning Views Asia: Adani Ports & Special Economic Zone, Vedanta Resources

Sagility India Pre-IPO Tearsheet

By Ethan Aw

  • Sagility India (2058883D IN) is looking to raise up to US$500m in its upcoming India IPO. The deal will be run by ICICI Securities, IIFL Securities, Jefferies and JP Morgan. 
  • Sagility India is a pure-play healthcare focused solutions and services provider to Payers (U.S. health insurance companies), and Providers (primarily hospitals, physicians, and diagnostic and medical devices companies). 
  • It supports the core business operations of both Payer and Provider clients. 

Morning Views Asia: Adani Ports & Special Economic Zone, Vedanta Resources

By Leonard Law, CFA

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

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Jul 16
0

Daily Brief China: China Traditional Chinese Medicine, Legend Biotech Corp, Budweiser Brewing APAC , Wasion Group Holdings, Beijing-Shanghai High Speed Ra, DiDi Global, Victory Giant Technology -A, China Shineway Pharmaceutical, Yifeng Pharmacy Chain , Hello Group and more

By | China, Daily Briefs

In today’s briefing:

  • China Traditional Chinese Medicine (570 HK): Update Provides Fodder for Bulls and Bears
  • Legend Biotech (LEGN US): Takeover Interest – Possible but Tough to Pull Off
  • BUY/SELL/HOLD: Hong Kong Stocks Update (July 15)
  • Wasion (3393): Smart Power Meter
  • Quiddity Leaderboard SSE50/180 Dec 24: US$1.6bn+ One-Way; Some Changes to Expectations.
  • Remember DiDi Global? We Check in on China’s Dominant Rideshare Company and Review Recent Results
  • CSI500 Index Rebalance Preview: 50 Changes; 11% Turnover; US$3.4bn Round-Trip Trade
  • China Shineway Pharmaceutical (2877.HK) – Negative Growth in 24H1 Seems Inevitable
  • Yifeng Pharmacy (603939 CH) – Monday, Apr 15, 2024
  • Hello Group Inc (MOMO) – Monday, Apr 15, 2024

China Traditional Chinese Medicine (570 HK): Update Provides Fodder for Bulls and Bears

By Arun George

  • China Traditional Chinese Medicine (570 HK)’s monthly update provides ammunition to both the bulls and bears. Since falling on no news on 26 June, the spread has widened to 31.8%. 
  • The bull view is that while the timelines are delayed, the privatisation remains on track as the update shows ongoing progress in satisfying the pre-condition. 
  • The bear view is that progress remains glacial, as the consortium wants to withdraw from a binding offer by failing to satisfy the pre-condition before the long stop date.

Legend Biotech (LEGN US): Takeover Interest – Possible but Tough to Pull Off

By Arun George

  • Legend Biotech Corp (LEGN US) shares increased 12% on Friday as a Street Insider report claimed it received takeover interest and hired Centerview Partners to help review the offer.
  • Genscript Biotech (1548 HK), the largest shareholder, shares rose 25%. Genscript responsded that it is not aware of any reasons for these share price movements and any inside information.
  • The chances for an offer are low as the offeror would face several hurdles. Nevertheless, without an offer, the upcoming CARVYKTI commercial production in 2H24 will support the share price.   

BUY/SELL/HOLD: Hong Kong Stocks Update (July 15)

By David Mudd

  • Hong Kong market still trades at a substantial discount to Analyst year end price targets.
  • Budweiser APAC is dependent on China’s consumer to lift sales while Anta Sports is targeting increased sales from the upcoming Paris Olympics.
  • Sunny Optical is seeing substantial growth from it EV segment and Haitian continues to grow its international sales.  Shineway RX is a rare value play in the pharmaceutical sector.

Wasion (3393): Smart Power Meter

By Henry Soediarko

  • Energy is scarce, thus, besides renewable energy, energy efficiency should also be the key focus. 
  • Wasion Group Holdings (3393 HK) customers have grown from domestic grids to both non-grid and grid domestic as well as overseas customers (Latin America). 
  • Despite a 65% YTD return, it is still trading at 11x PER, with a 4% dividend yield, 6x EV/EBITDA, and 1.2x PBR. 

Quiddity Leaderboard SSE50/180 Dec 24: US$1.6bn+ One-Way; Some Changes to Expectations.

By Janaghan Jeyakumar, CFA

  • SSE 50 and SSE 180, respectively, aim to represent the performance of the 50 and 180 largest and most liquid A-share stocks listed on the Shanghai Stock Exchange.
  • In this insight, we take a look at the names leading the race to become ADDs and DELs during the December 2024 index rebal event.
  • There have been some changes to the SSE 180 expected ADDs/DELs lists since our last insight.

Remember DiDi Global? We Check in on China’s Dominant Rideshare Company and Review Recent Results

By Daniel Hellberg

  • First, we offer a recent history of Didi going back to its June 2021 IPO 
  • Next, we review the company’s annual results from 2020-23 plus Q124
  • Finally, we try to answer the question, “Does Didi need to raise cash soon?”

CSI500 Index Rebalance Preview: 50 Changes; 11% Turnover; US$3.4bn Round-Trip Trade

By Brian Freitas

  • With 70% of the review period now complete, we forecast 50 changes (the maximum permitted) for the CSI Smallcap 500 Index at the close on 13 December.
  • We estimate a one-way turnover of 11.3% at the rebalance resulting in a one-way trade of CNY12.08bn (US$1.7bn). The Information Technology and HealthCare sectors gain at the expense of Industrials.
  • The potential adds have outperformed the potential deletes and the CSI Smallcap 500 Index (SH000905 INDEX) since the start of the year with the outperformance gradually picking up.

China Shineway Pharmaceutical (2877.HK) – Negative Growth in 24H1 Seems Inevitable

By Xinyao (Criss) Wang

  • Three business segments of Shineway showed negative YoY growth in 24Q1. 24Q2 performance could remain sluggish. We’re not optimistic about the 24H1 results due to the high base in 23H1.
  • It is expected that Shineway’s growth in 24H2 would pick up. If revenue growth of Shineway in 2024 full-year could be double-digit (e.g. 10-15% YoY), it is already good.
  • Shineway is undervalued. It has sufficient cash (cash balance of RMB5.9 billion by 2023) and is willing to distribute dividends (usually twice a year). Shineway is suitable for long-term holding.

Yifeng Pharmacy (603939 CH) – Monday, Apr 15, 2024

By Value Investors Club

  • Yifeng is a leading pharmacy chain in China with 13,000 stores nationwide, primarily in East and Southcentral regions
  • Revenue is mostly derived from prescription and over-the-counter drugs, with Traditional Chinese Medicine and non-medicine products also contributing
  • Despite already being a top pharmacy chain in China, Yifeng still has room to grow and capture more market share in the industry

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

Hello Group Inc (MOMO) – Monday, Apr 15, 2024

By Value Investors Club

  • Investment opportunity in MOMO, Chinese ADR trading at 70% of net cash and 5x EPS/FCF
  • Core business may be in decline, but management has shown good cost discipline and capital allocation
  • Potential for MOMO to return $200m per year to shareholders, offering potential 50% return on investment as a cigar butt investment similar to HUYA success.

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

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Jul 16
0

Daily Brief Japan: ASICS Corp, TIS, Money Forward , Honda Motor, Vega Corp, TSE Tokyo Price Index TOPIX, Hisamitsu Pharmaceutical Co, Neos Corp and more

By | Daily Briefs, Japan

In today’s briefing:

  • Asics (7936 JP): Huge Forecast Revision to Offset Limited Passive Buying
  • Japan – Yet Another Big Round of Passive Selling Expected in August
  • Money Forward (3994) | Metronomic Growth
  • Honda Motor Placement – Past Large Deals Analysis – Could Do with a Bit More Correction
  • Vega’s Lowya Expanding Omnichannel to Grow Audience
  • Determine Whether Shareholder Return Is a Temporary Measure or a Shift to Value-Creating Management
  • Hisamitsu Pharmaceutical (4530 JP): Mixed Performance in Q1FY25; No Change in FY25 Guidance
  • Neos Corp (3627 JP): Q1 FY02/25 flash update

Asics (7936 JP): Huge Forecast Revision to Offset Limited Passive Buying

By Brian Freitas

  • 15 shareholders are looking to sell between 73.9-85m shares (US$1.2bn-US$1.38bn) of ASICS Corp (7936 JP) in a secondary offering that will likely be priced on 23 July.
  • ASICS Corp (7936 JP) has also announced a huge upward revision to its sales and profit forecasts with EPS expected to increase 61% from earlier estimates.
  • Passive buying will be extremely limited in the short-term with the downward pressure offset to a large extent by the sales and earnings revisions.

Japan – Yet Another Big Round of Passive Selling Expected in August

By Brian Freitas

  • There are a bunch of stocks that have underperformed the Nikkei 225 (NKY INDEX) and their peers and could be deleted from global passive portfolios in August.
  • The deletion from passive portfolios will lead to a liquidity event at the end of August where passive trackers will need to sell multiple days of ADV.
  • Shorts have been built up on all the stocks over the last few months and the extent of the positioning varies across stocks.

Money Forward (3994) | Metronomic Growth

By Mark Chadwick

  • Money Forward released Q2 results post market close on Friday. Revenue growth of +41% YoY beat our estimates by 7%.
  • We highlight continued solid financial metrics supported by growth in SaaS ARR and in particular mid-sized corporate growth.
  • No change to our bullish long-term view on the company. Stock has run up around 11% ahead of earnings but we see further 20%+ upside from here. 

Honda Motor Placement – Past Large Deals Analysis – Could Do with a Bit More Correction

By Sumeet Singh

  • A group of shareholders aims to raise up to US$3.2bn via selling around 5% of Honda Motor (7267 JP).
  • The possibility of such a selldown was flagged by Reuters prior to the deal launch.
  • In our earlier note, we spoke about the deal dynamics. In this note, we talk about the updates since then.

Vega’s Lowya Expanding Omnichannel to Grow Audience

By Michael Causton

  • Lowya began as an online furniture retailer and is still one of the largest in e-commerce, but limited brand awareness has held it back and sales fell last year. 
  • Vega Corporation, Lowya’s parent, is now expanding physical stores and offering omnichannel solutions to fix the problem.
  • This makes sense in a market where stores remain preeminent and are likely to remain so.

Determine Whether Shareholder Return Is a Temporary Measure or a Shift to Value-Creating Management

By Aki Matsumoto

  • The dissolution of cross-shareholdings and changing environment in which foreign ownership has risen to 30% have changed the view of activist investors. TSE is one such example of big change.
  • It’s convenient that activist investors can use “TSE requested” language that is both easily understood and undeniable by the company when communicating with the portfolio company to improve its issues.
  • We must determine whether this is a temporary return to shareholders until the activist investors are removed from the shareholder list, or a shift to value-creating management.

Hisamitsu Pharmaceutical (4530 JP): Mixed Performance in Q1FY25; No Change in FY25 Guidance

By Tina Banerjee

  • Hisamitsu Pharmaceutical Co (4530 JP) has reported double-digit growth in revenue and net profit in Q1FY25. However, operating profit decreased 5% YoY due to higher expenses.  
  • Topline growth was mainly driven by Salonpas, which was named the world’s no. 1 OTC topical analgesic patch band for the eighth consecutive year.  
  • The company reiterated FY25 guidance of 7% revenue growth and low double-digit operating and net profit growth, as an increase in operating profit is expected for the full-year as planned.

Neos Corp (3627 JP): Q1 FY02/25 flash update

By Shared Research

  • In Q1 FY02/25, TECMIRA reported revenue of JPY2.8bn (+53.7% YoY), operating loss of JPY42mn, and net loss of JPY31mn.
  • Revenue growth was driven by strong sales of new Nintendo Switch software and first-time consolidation of Wellmira.
  • AI & Cloud segment saw significant revenue increase due to AI chatbot services, while IoT & Devices segment grew 2.6x YoY.

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Jul 16
0

Daily Brief Energy/Materials: SK Innovation, Copper, Crude Oil, CVR Partners, Platinum, Vedanta Resources and more

By | Daily Briefs, Energy & Materials Sector

In today’s briefing:

  • SK Innovation and SK E&S to Discuss a Potential Merger on 17 July
  • Mega Copper M&A Manoeuvres
  • U.S. Oil and Gas Rig Count Continues on Downward Trend
  • Cvr Partners Lp (UAN) – Monday, Apr 15, 2024
  • It Got Quiet around Platinum and Palladium
  • Morning Views Asia: Adani Ports & Special Economic Zone, Vedanta Resources

SK Innovation and SK E&S to Discuss a Potential Merger on 17 July

By Douglas Kim

  • SK Innovation (096770 KS) and SK E&S plan to hold a board meeting on 17 July to discuss the potential merger between the two companies.
  • If this merger is successful, it would create the eighth largest company in Korea with a combined assets of 106 trillion won (US$77 billion). 
  • Although the merger ratio is not yet available, we believe that this potential merger could potentially benefit SK E&S and SK Inc but could be negative on SK Innovation.

Mega Copper M&A Manoeuvres

By Money of Mine

  • BHP and Lundin rumored to be considering a joint bid for Filo Mining in the Vicuna district, an emerging copper super district in Chile and Argentina.
  • Lundin Mining owns the most advanced project, Jose Maria, in the region which is permitted and fid ready.
  • Argentina now has a supportive business regime, making it an optimal time for development in the region. Lundin Group retains a 33% stake in Filo while BHP owns a 6% stake.

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

U.S. Oil and Gas Rig Count Continues on Downward Trend

By Suhas Reddy

  • US oil and gas rig count fell by 1 to 584 for the week ending 12/Jul, after rising by 4 the previous week. 
  • US oil rig count fell by 1 to 478, indicating 59 fewer oil rigs as compared to the same week last year. It is at its lowest since December 2021.
  • Despite a decline in the US oil rig count, US crude oil production matched the all-time high production of 13.3m bpd for the week ending 5/Jul, according to the EIA.

Cvr Partners Lp (UAN) – Monday, Apr 15, 2024

By Value Investors Club

  • UAN is undervalued due to market volatility and has potential for future share price increases
  • The company’s strategic location and cost advantages in production and distribution make it a strong player in the nitrogen fertilizer market
  • UAN has a normalized FCF yield of 17% and offers a significant increase in share price, making it an attractive investment opportunity

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

It Got Quiet around Platinum and Palladium

By The Commodity Report

  • It Got Quiet around Platinum and Palladium While sales of EVs around the world continue to surge, it kind of became obvious that BEVs or mild hybrids are the choice for many consumers going forward.
  • Those systems offer people the option to drive fully electric within the city and use the combustion system for further destinations.
  • If the demand for BEVs continues to surge, two metals could be supported by that fact which builds the investment case for platinum and palladium.

Morning Views Asia: Adani Ports & Special Economic Zone, Vedanta Resources

By Leonard Law, CFA

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

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