Smartkarma Daily Briefs, Author at Smartkarma

Jun 07

Daily Brief Equity Bottom-Up: Toyota Industries (6201) – TMC’s Sale of TI Shares Is Innocuous and more

By Smartkarma Daily Briefs | Daily Briefs, Equity Bottom-Up

In today’s briefing:

Toyota Industries (6201) – TMC’s Sale of TI Shares Is Innocuous, TI’s Valuation Remains Uncompelling
Lasertec. Colossal Fraud Or Multi-Award Winning Mask Inspection Supplier?
Meituan Is the Biggest Beneficiary of China’s Domestic Travel Recovery
MT/ Meituan (3690 HK): 1Q24, Total Revenue Up by 25% and Initiatives Loss Down by 45%
Jardine Matheson – The Slow Grind Lower Can Continue
Water Oasis (1161 HK): Dividend Cut As Company Gets Conservative
TSMC (2330.TT; TSM.US): ASML’s High-NA EUV Machine Will Not Be Required Until 2027 at TSMC.
Saizeriya (7581 JP): Buy On Any Weakness On A More Profitable Japan And Continued Strength In China
Tech Supply Chain Tracker (07-Jun-2024): Air Liquide to invest $250M in US location for Micron gas.
ASEAN EV Ecosystem Update: Initiatives to Build a Regional EV Ecosystem Continues

Toyota Industries (6201) – TMC’s Sale of TI Shares Is Innocuous, TI’s Valuation Remains Uncompelling

By Travis Lundy

Last September, Toyota Motor (7203 JP) Group affiliate Aisin (7259 JP) said they would get rid of ALL their cross-holdings. That signalled a future sea change in Toyota intra-group relations.
It meant all Toyota group companies could do that. The big moves started with a multi-party offering of Denso Corp (6902 JP) shares – Toyota, Toyota Industries, and Aisin sold.
Then others. Then in March, Denso announced a 2.5yr selldown of ~¥460bn of Toyota Industries shares. That meant a TI buyback was likely. We got one. Now we have details.

Lasertec. Colossal Fraud Or Multi-Award Winning Mask Inspection Supplier?

By William Keating

Activist short seller Scorpion alleges Lasertec is a “colossal fraud” and “ticking time bomb”
Most of their allegations relate to problems with Lasertec’s EUV mask inspection tools
Lasertec achieved Intel’s distinguished supplier ward for the past six years and last December landed an award from TSMC for “Distinguished EUV Mask Inspection and Metrology Collaboration”. What gives?

Meituan Is the Biggest Beneficiary of China’s Domestic Travel Recovery

By Andy Fu

During the upcoming Dragon Boat Festival, both flight and railway traffic seems sluggish, indicating a cooled-down enthusiasm for long-distance trips due to budget constraints.
Data points to booming short-distance travel with self-driving as the major means, helped by lower price;
Benefiting from hotel booking and catering, Meituan is the biggest beneficiary of such consumption downgrade.

MT/ Meituan (3690 HK): 1Q24, Total Revenue Up by 25% and Initiatives Loss Down by 45%

By Ming Lu

Total revenue increased by 25% YoY and all business lines grew strongly.
In 1Q24, the operating losses from new initiatives decreased by 45% YoY, but new initiatives revenue still grow.
We conclude that the price target can be double of the market price.

Jardine Matheson – The Slow Grind Lower Can Continue

By Daniel Tabbush

There is nothing in the main investments at JM that suggests the grind lower on ROE and net profit will suddenly reverse, rather it should continue
Astra International, Hong Kong Land, and DFI Retail are key to JM and there is little joy here, with HKL potentially having more valuation impairments
Quarterly figures from Astra, which are a window on the current interim for JM, are not positive, with the worst quarter in over one year

Water Oasis (1161 HK): Dividend Cut As Company Gets Conservative

By Sameer Taneja

Water Oasis (1161 HK) reported profits down 30% YoY (ex-one-off profits down 9% YoY only), but commentary cited headwinds in the business due to muted HK economic sentiment.
Anticipating these headwinds, the company cut its semi-annual dividend by 50% to only 3.5 cents (implying a 7% yield on the current share price) despite a massive cash buildup.
Net cash at 396 mn HKD is now 58% of the market cap. Given the current economic backdrop, we see a conservative approach to dividend payment in the medium term.

TSMC (2330.TT; TSM.US): ASML’s High-NA EUV Machine Will Not Be Required Until 2027 at TSMC.

By Patrick Liao

Taiwan Semiconductor (TSMC) – ADR (TSM US) is planning to launch its 2nm in 2025.
TSMC is expected to acquire one High-NA EUV machine this year for R&D purposes, but it will not be used for commercial production.
TSMC is expected to increase the cost of its Chip-on-Wafer-on-Substrate (CoWoS) package by around 15% in 2H24.

Saizeriya (7581 JP): Buy On Any Weakness On A More Profitable Japan And Continued Strength In China

By Steve Zhou, CFA

After a strong 68% increase in share price in 2023, Saizeriya (7581 JP) has been trading range bound, and up 8% year-to-date in 2024.
Continued weakness in Japan on the profitability front in 1HFY24 offset continued strong performance in China.
Japan’s operating profit is set to improve in the second half of the current fiscal year (ending August), and China’s strength will continue on the back of accelerating store openings.

Tech Supply Chain Tracker (07-Jun-2024): Air Liquide to invest $250M in US location for Micron gas.

By Tech Supply Chain Tracker

Air Liquide investing $250M in new US facility for Micron gas supply, reflecting commitment to growth and sustainability.
Maruti Suzuki focusing on renewable energy expansion in India, showing dedication to environmental initiatives and reducing carbon footprint.
EVs driving demand for high-tech satellite dishes, while Nvidia aims to hire 50% foreign workers for new R&D center in Taiwan. EU-China tariff risks highlighted.

ASEAN EV Ecosystem Update: Initiatives to Build a Regional EV Ecosystem Continues

By Shifara Samsudeen, ACMA, CGMA

Countries across the ASEAN region continue to invest on developing their respective EV markets with governments introducing new initiatives and offering further incentives.
The price war among Chinese EV players has escalated in recent month, causing pressure on non-Chinese players. European and Japanese EV makers are increasingly looking at ASEAN for cost advantage.
The four companies we looked at have reported earnings and we have discussed their latest results and our investment thesis.

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Jun 07

Daily Brief Australia: Guzman Y Gomez, Altium Ltd, IDP Education, Brookside Energy and more

By Smartkarma Daily Briefs | Australia, Daily Briefs

In today’s briefing:

Guzman Y Gomez IPO – The Positives – Network Growing, Sales Have Outpaced Network Growth
Altium (ALU AU): Scheme Vote on 12 July
MV Australia Equal Weight Index Rebalance Preview: Close Deletions in June
Guzman Y Gomez IPO – The Negatives – Lawsuits and Management Churn
Altium (ALU AU)’s 12th July Scheme Vote. Renesas’ Done Deal
Brookside Energy (BRK) – Thursday, Mar 7, 2024

Guzman Y Gomez IPO – The Positives – Network Growing, Sales Have Outpaced Network Growth

By Sumeet Singh

Guzman Y Gomez plans to raise around US$160m in its Australian IPO.
GYG is a quick service restaurant business with more than 200 restaurants globally. It mainly focuses on fresh, made-to-order, Mexican-inspired food.
In this note, we look at the company’s prior performance and future prospects.

Altium (ALU AU): Scheme Vote on 12 July

By Arun George

The Altium Ltd (ALU AU) IE considers Renesas Electronics (6723 JP)’ A$68.50 scheme offer fair and reasonable as it is above the midpoint of the A$62.37 to A$70.27 valuation range.
The offer is conditional on remaining regulatory approvals (FIRB, CFIUS) and shareholder approval.
The offer price is attractive and 31% above the all-time high. At the last close and for the 1 August payment, the gross/annualised spread was 1.7%/11.6%.

MV Australia Equal Weight Index Rebalance Preview: Close Deletions in June

By Brian Freitas

With the review period complete, there are 3 stocks that are close to the deletion zone and could be removed from the index at the June rebalance.
Even if there are no constituent changes, capping changes will lead to one-way turnover of 3.6% and a one-way trade of A$83m.
There are 6 stocks with over A$5m to trade from passive trackers but the impact on the stocks is not very high.

Guzman Y Gomez IPO – The Negatives – Lawsuits and Management Churn

By Sumeet Singh

Guzman Y Gomez plans to raise around US$160m in its Australian IPO.
GYG is a quick service restaurant business with more than 200 restaurants globally. It mainly focuses on fresh, made-to-order, Mexican-inspired food.
In this note, we talk about the not-so-positive aspects of the deal.

Altium (ALU AU)’s 12th July Scheme Vote. Renesas’ Done Deal

By David Blennerhassett

Back on the 15th Feb, Renesas Electronics (6723 JP), a supplier of advanced semiconductors, entered into a Scheme with Altium Ltd (ALU AU).
Altium shareholders are being offered A$68.50/share, in cash, a lifetime high.
The Scheme Booklet is now out, with a Scheme Meeting to be held on the 12th July. Expected implementation on the 1 August. The IE says fair & reasonable.

Brookside Energy (BRK) – Thursday, Mar 7, 2024

By Value Investors Club

Long Brookside Energy offers high-quality assets at a significant discount to its net present value and reserves value
Investors are essentially getting 5,000 acres, 1,400 barrels of production, and 12 million barrels of reserves in the South SCOOP play in Oklahoma for a bargain
Management is actively buying back shares to take advantage of the undervaluation, with plans for more buybacks in the future

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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Jun 07

Daily Brief Thailand: Energy Absolute and more

By Smartkarma Daily Briefs | Daily Briefs, Thailand

In today’s briefing:

ASEAN EV Ecosystem Update: Initiatives to Build a Regional EV Ecosystem Continues

ASEAN EV Ecosystem Update: Initiatives to Build a Regional EV Ecosystem Continues

By Shifara Samsudeen, ACMA, CGMA

Countries across the ASEAN region continue to invest on developing their respective EV markets with governments introducing new initiatives and offering further incentives.
The price war among Chinese EV players has escalated in recent month, causing pressure on non-Chinese players. European and Japanese EV makers are increasingly looking at ASEAN for cost advantage.
The four companies we looked at have reported earnings and we have discussed their latest results and our investment thesis.

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Jun 07

Daily Brief Macro: China’s Declining Population Growth and more

By Smartkarma Daily Briefs | Daily Briefs, Macro

In today’s briefing:

China’s Declining Population Growth, Labor Participation, and Aging Population
Precious Perspectives Part 1: China’s Silver Scarcity Pushes Silver Higher
Precious Perspectives Part 2: Recessionary Fears Fuel Upside Potential in Gold Silver Ratio
ECB Steps Onto Obscured Path
ECB Refi Rate 4.25% (consensus 4.25%) in Jun-24
Switzerland Unemployment Rate 2.4% in May-24

China’s Declining Population Growth, Labor Participation, and Aging Population

By Alex Ng

China’s total population declinied by 850K or 0.06% and 356K or 0.02% respectively in 2022 and 2023. Total population growth is projected to be negative in years to come.
The negative population growth raises questions about China’s long-term economic growth prospects.
This article addresses the impact of China’s demographic trends on medium- to long-term economic growth and draws comparisons from other Asian economies such as Japan and South Korea

Precious Perspectives Part 1: China’s Silver Scarcity Pushes Silver Higher

By Pranay Yadav

SHFE silver premium over COMEX silver has escalated to 7%, exacerbated by falling SHFE silver inventories, indicating a deepening shortage in China.
Surging demand from China’s rapidly growing solar industry and renewable data centers is deepening the global silver deficit, now projected to continue at record levels for a fourth year.
The strong bullish outlook for silver suggests that the bullishness in silver prices is likely to continue in the near-term.

Precious Perspectives Part 2: Recessionary Fears Fuel Upside Potential in Gold Silver Ratio

By Pranay Yadav

Continued strong gold demand from central banks, especially the People’s Bank of China, drives gold prices up despite high interest rates, challenging conventional expectations.
Weakening economic indicators in the US, like falling job openings and PMI, increase likelihood of rate cuts, potentially elevating the Gold-Silver Ratio (GSR) even in a lower interest rate environment.
Anticipating a recession in late 2024, the paper describes a strategic long stance on GSR, leveraging price divergence in gold and silver amid economic slowdown.

ECB Steps Onto Obscured Path

By Phil Rush

The ECB cut its policy rates by 25bps in June as stability in its inflation forecast provided sufficient confidence of success for all except one policymaker.
Recent resilience has left enough doubt for the ECB to resist signalling this step as being the first on an easing path. It needs data to clear the uncertainty obscuring the path.
Cuts outside recessions are often reversed, and the ECB is prone to mistakes. However, we expect another ECB rate cut in September, contingent on the Fed cutting then too.

ECB Refi Rate 4.25% (consensus 4.25%) in Jun-24

By Heteronomics AI

The ECB has cut key interest rates by 25 basis points, reflecting an improved inflation outlook and the effective transmission of previous rate hikes, maintaining restrictive financing conditions.
Future interest rate decisions will be data-driven and flexible, based on ongoing assessments of inflation, economic data, and the strength of monetary policy transmission, without pre-committing to a specific rate path.
Economic and financial risks, including geopolitical tensions and global trade dynamics, will influence the ECB’s policy adjustments to ensure the stability and effectiveness of monetary policy transmission.

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

Switzerland Unemployment Rate 2.4% in May-24

By Heteronomics AI

Switzerland’s unemployment rate rose to 2.4% in May 2024, indicating potential labour market weakness.
Mixed economic indicators such as negative consumer confidence and contracting manufacturing activity were observed.
Despite these challenges, modest GDP growth and robust retail sales were reported, suggesting underlying economic challenges.

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

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Jun 07

Daily Brief Singapore: Jardine Matheson Holdings and more

By Smartkarma Daily Briefs | Daily Briefs, Singapore

In today’s briefing:

Jardine Matheson – The Slow Grind Lower Can Continue

Jardine Matheson – The Slow Grind Lower Can Continue

By Daniel Tabbush

There is nothing in the main investments at JM that suggests the grind lower on ROE and net profit will suddenly reverse, rather it should continue
Astra International, Hong Kong Land, and DFI Retail are key to JM and there is little joy here, with HKL potentially having more valuation impairments
Quarterly figures from Astra, which are a window on the current interim for JM, are not positive, with the worst quarter in over one year

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Jun 07

Daily Brief South Korea: Shift Up, Lock&Lock and more

By Smartkarma Daily Briefs | Daily Briefs, South Korea

In today’s briefing:

What Did FSS Point Out to Shift Up? & What Impact Would It Have on Bookbuilding Sentiment?
Affinity Equity Partners Seeking Delisting of Lock & Lock Through Comprehensive Stock Exchange

What Did FSS Point Out to Shift Up? & What Impact Would It Have on Bookbuilding Sentiment?

By Sanghyun Park

FSS wants Nikke’s MAU data to address revenue concerns. They also seek April and May sales data for Stellar Blade to address valuation concerns despite its recent launch.
Shift Up updated the prospectus with Nikke’s increasing MAU data but didn’t include Stellar Blade sales data. FSS may request further revisions, possibly delaying the IPO again.
Nikke’s MAU has risen but plateaued versus the previous quarter, and uncertainty surrounds Stellar Blade’s April-May sales, potentially impacting IPO pricing.

Affinity Equity Partners Seeking Delisting of Lock & Lock Through Comprehensive Stock Exchange

By Douglas Kim

On 5 June, Affinity Equity Partners (AEP) announced that it is seeking a delisting of Lock&Lock (115390 KS) shares through a comprehensive stock exchange.
It has been reported that the second tender offer failed. Only 1.5% of the outstanding shares participated in the second tender offer, falling short of the 9.5% participation required.
Affinity plans to transfer the shares of Lock&Lock held by an overseas corporation to a domestic corporation (investment-in-kind) and then go through a comprehensive stock exchange procedure.

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Jun 07

Daily Brief United States: Silver, Salesforce.Com Inc, Lululemon Athletica, Marvell Technology , C3.ai Inc, Abercrombie & Fitch Co Cl A, Nutanix Inc, Dell Technologies , Dick’s Sporting Goods, Okta and more

By Smartkarma Daily Briefs | Daily Briefs, United States

In today’s briefing:

Precious Perspectives Part 1: China’s Silver Scarcity Pushes Silver Higher
Salesforce.com Inc.: Integration & Implementation Of platforms
Lululemon 1Q’24 Update
Marvell Technology Group Ltd.: Will The Anticipated Recovery in Enterprise Networking and Carrier Business Pan Out? – Major Drivers
C3.ai Inc.: The Story Of Increasing Demand for Its Cutting-Edge Technology in the Defense Sector! – Major Drivers
Abercrombie & Fitch Co.: Continuing Customer Acquisition
Nutanix Inc.: Growth in Annual Contract Value and Renewal Performance & Other Major Drivers
Dell Technologies: A Disappointing Performance But Can Accelerated Adoption of Artificial Intelligence Solutions Catalyze Future Growth? – Major Drivers
DICK’S Sporting Goods Inc.: Expansion of GameChanger Program & Other Major Drivers
Okta Inc.: Opportunities Within Zero Trust & Secure Access Service Edge (SASE) Projects! – Major Drivers

Precious Perspectives Part 1: China’s Silver Scarcity Pushes Silver Higher

By Pranay Yadav

SHFE silver premium over COMEX silver has escalated to 7%, exacerbated by falling SHFE silver inventories, indicating a deepening shortage in China.
Surging demand from China’s rapidly growing solar industry and renewable data centers is deepening the global silver deficit, now projected to continue at record levels for a fourth year.
The strong bullish outlook for silver suggests that the bullishness in silver prices is likely to continue in the near-term.

Salesforce.com Inc.: Integration & Implementation Of platforms

By Baptista Research

Salesforce Inc.’s Q1 2025 results saw revenue growth of 11% year-over-year to $9.13 billion, with the CRM provider leading market share worldwide for the 11th consecutive year, according to the latest IDC software tracker.
The company is managing over 250 petabytes of data for its customers as it continues to drive transformation in artificial intelligence (AI).
The company maintained its FY ’25 revenue guidance of $37.7 billion to $38 billion, representing a growth of 8-9% year-over-year.

Lululemon 1Q’24 Update

By MBI Deep Dives

Lululemon was facing some really thorny questions from Mr. Market ever since 4Q’23 earnings. Today’s earnings should help calm some nerves.
Here are my highlights from tonight’s call. Sales Growth by Region At first glance, one may find confirmation to plenty of concerns for LULU. US sales, which was ~61% of overall sales this quarter, grew by only 2%.
Growth momentum in international markets, especially in China helped mask the weakness in the US.

Marvell Technology Group Ltd.: Will The Anticipated Recovery in Enterprise Networking and Carrier Business Pan Out? – Major Drivers

By Baptista Research

Marvell Technology, Inc.’s Q1 2025 earnings report reflects a strong start to the fiscal year with revenue of $1.16 billion, surpassing the midpoint of guidance.
The overachievement was largely driven by higher-than predicted results from the company’s data center operations, which reported $816 million in revenue for the quarter.
The company anticipates such performance and growth to continue throughout the fiscal year, especially in light of initial shipments of their custom AI compute programs.

C3.ai Inc.: The Story Of Increasing Demand for Its Cutting-Edge Technology in the Defense Sector! – Major Drivers

By Baptista Research

C3.ai Inc.’s 2024 fourth quarter financial results and their fiscal year report have illustrated continuous growth and increased profitability.
With a record revenue of $310.6 million for the full year, indicating a 16% increase from last year, and Q4 revenue at $86.6 million, the company has significantly exceeded analyst expectations and its own guidance estimates.
Its subscription revenue reached an impressive $278.1 million, a 21% rise from last year’s figures.

Abercrombie & Fitch Co.: Continuing Customer Acquisition

By Baptista Research

Abercrombie & Fitch had a successful start to the fiscal year 2024, as reported in their first quarter’s earning call.
Producing record sales and operating income, the company reported net sales of $1 billion, a growth of 22% year-over-year.
The operating income reached $130 million, making the first quarter of 2024 an unprecedented quarter in the history of Abercrombie & Fitch.

Nutanix Inc.: Growth in Annual Contract Value and Renewal Performance & Other Major Drivers

By Baptista Research

Nutanix, in their latest Q3 2024 earnings, reported robust results that outpaced the company’s guidance.
This was primarily driven by steady demand for their solutions, particularly from businesses prioritizing digital transformation and infrastructure modernization initiatives, aiming to optimize their total cost of ownership or TCO.
Nutanix’s quarterly revenue hit $525 million, and the Annual Recurring Revenue (ARR) climbed 24% year-over-year to $1.82 billion, indicating a healthy and growing customer base.

Dell Technologies: A Disappointing Performance But Can Accelerated Adoption of Artificial Intelligence Solutions Catalyze Future Growth? – Major Drivers

By Baptista Research

Dell Technologies Inc’s stock price crashed after a disappointing set of earnings.
The company reported its first quarter results for the fiscal year 2025, highlighting a 6% increase in revenue to $22.2 billion.
The revenue growth was attributed to remarkable growth in servers and a return to growth in the commercial PC business.

DICK’S Sporting Goods Inc.: Expansion of GameChanger Program & Other Major Drivers

By Baptista Research

Dick’s Sporting Goods Inc. is demonstrating strong performance as evidenced by its Q1 2024 results, driven by its strategic focus on an omnichannel athlete experience, differentiated product assortment, deep engagement with the Dick’s brand, and commitment to creating a best-in-class teammate experience.
This quarter’s sales increased by 6.2% to just over $3 billion, and comparable sales saw an uptick of 5.3%.
Additionally, growth was recorded in cross-channel transactions, indicating more purchases from athletes and an increase in average ticket expenditure compared to previous years.

Okta Inc.: Opportunities Within Zero Trust & Secure Access Service Edge (SASE) Projects! – Major Drivers

By Baptista Research

Okta Inc., a leading independent identity provider, posted encouraging results for the first quarter of the fiscal year 2025, and market observers have drawn several insights from the company’s earnings call.
One positive aspect of Okta’s performance is its remarkable profitability and cash flow.
The company achieved record profitability and posted a free cash flow margin of 35%.

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Jun 07

Daily Brief Indonesia: Sumber Alfaria Trijaya Tbk Pt and more

By Smartkarma Daily Briefs | Daily Briefs, Indonesia

In today’s briefing:

Sumber Alfaria Trijaya (AMRT IJ) – About Competition and Initiatives

Sumber Alfaria Trijaya (AMRT IJ) – About Competition and Initiatives

By Angus Mackintosh

A follow-up call with Alfamart management confirmed the positive growth outlook for the coming year despite a slower store build-out and a sanguine view of the competitive environment.
Alfamart will slow its store build-out for Lawson as it optimises its existing stores but will still open 250 new Lawson outlets out of a total of 1,500 new outlets.
The company will expand more aggressively in the outer islands and build five new DCs to support expansion, with Alfamidi seeing a pick-up in new store openings. Valuations are reasonable.

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Jun 07

Daily Brief Japan: Softbank Group, Toyota Industries, Lasertec Corp, CELSYS, Saizeriya, Geniee Inc, Duskin Co Ltd and more

By Smartkarma Daily Briefs | Daily Briefs, Japan

In today’s briefing:

Softbank (9984 JP): This Time, It’s Different
Toyota Industries (6201) – TMC’s Sale of TI Shares Is Innocuous, TI’s Valuation Remains Uncompelling
Lasertec. Colossal Fraud Or Multi-Award Winning Mask Inspection Supplier?
TOPIX Inclusions: Who Is Ready (June 2024)
Saizeriya (7581 JP): Buy On Any Weakness On A More Profitable Japan And Continued Strength In China
Geniee (6562) – Pursuing an Earnings Recovery and a Major Capital Restructuring
Duskin (4665 JP) – Prospects for Further Progress on Positive Transformation

Softbank (9984 JP): This Time, It’s Different

By Victor Galliano

Elliott Management has emerged as a 2%+ shareholder in SoftBank group and is driving for share buybacks of upto USD15bn; we see this as a game changer for minority shareholders
Recent moves to enhance corporate governance in Japan have taken root, yet we see Softbank group as a laggard on corporate governance which been targeted by an experienced activist
Softbank shares trade at a 54% discount to the estimated NAV; an activist like Elliott on board could meaningfully drive shareholder value creation and a narrowing of the NAV discount

Toyota Industries (6201) – TMC’s Sale of TI Shares Is Innocuous, TI’s Valuation Remains Uncompelling

By Travis Lundy

Last September, Toyota Motor (7203 JP) Group affiliate Aisin (7259 JP) said they would get rid of ALL their cross-holdings. That signalled a future sea change in Toyota intra-group relations.
It meant all Toyota group companies could do that. The big moves started with a multi-party offering of Denso Corp (6902 JP) shares – Toyota, Toyota Industries, and Aisin sold.
Then others. Then in March, Denso announced a 2.5yr selldown of ~¥460bn of Toyota Industries shares. That meant a TI buyback was likely. We got one. Now we have details.

Lasertec. Colossal Fraud Or Multi-Award Winning Mask Inspection Supplier?

By William Keating

Activist short seller Scorpion alleges Lasertec is a “colossal fraud” and “ticking time bomb”
Most of their allegations relate to problems with Lasertec’s EUV mask inspection tools
Lasertec achieved Intel’s distinguished supplier ward for the past six years and last December landed an award from TSMC for “Distinguished EUV Mask Inspection and Metrology Collaboration”. What gives?

TOPIX Inclusions: Who Is Ready (June 2024)

By Janaghan Jeyakumar, CFA

Quiddity’s “Who is Ready” series of insights aims to objectively identify names listed on the Tokyo Stock Exchange that are potential additions to the TOPIX Index in future.
There have been no TOPIX Inclusions in 2024 so far although dozens of companies have been able to meet the key Section Transfer requirements on paper for several months.
However, there are some pre-event candidates we believe are worth monitoring as they have previously confirmed their desire to move to the Prime Market.

Saizeriya (7581 JP): Buy On Any Weakness On A More Profitable Japan And Continued Strength In China

By Steve Zhou, CFA

After a strong 68% increase in share price in 2023, Saizeriya (7581 JP) has been trading range bound, and up 8% year-to-date in 2024.
Continued weakness in Japan on the profitability front in 1HFY24 offset continued strong performance in China.
Japan’s operating profit is set to improve in the second half of the current fiscal year (ending August), and China’s strength will continue on the back of accelerating store openings.

Geniee (6562) – Pursuing an Earnings Recovery and a Major Capital Restructuring

By Astris Advisory Japan

Earnings rebound for FY3/25 – Q1-4 FY3/24 results missed guidance, with underperformance experienced in the Overseas and Marketing SaaS businesses.
The core domestic Ad Platform business maintained a stable growth profile with its competitive technology and market position, and we believe will continue to act as the core earnings driver for the medium term.
FY3/25 guidance points to a recovery profile YoY with high double-digit sales and earnings growth, with sustained growth in the domestic online ad market, customer acquisition in Marketing SaaS, and a recovery in the Overseas business through a combination of cross-selling activities and cost reductions.

Duskin (4665 JP) – Prospects for Further Progress on Positive Transformation

By Astris Advisory Japan

Food Group driving earnings – Q1-4 FY3/24 results were ahead of revised guidance for earnings, driven by solid growth at the Food Group with ‘Mister Donut’ chain restaurant experiencing increasing footfall and price hikes YoY.
Profits were also boosted by lower- than-planned investment costs at the Direct Selling Group (due in part to delays), although this highlights the challenges of raising sales volume in this mature business.
With the RFID investment project mostly complete, the company is in a position to benefit from cost savings YoY.

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Jun 07

Daily Brief China: Meituan, Water Oasis, QuantumPharm, Greentown China and more

By Smartkarma Daily Briefs | China, Daily Briefs

In today’s briefing:

Meituan Is the Biggest Beneficiary of China’s Domestic Travel Recovery
MT/ Meituan (3690 HK): 1Q24, Total Revenue Up by 25% and Initiatives Loss Down by 45%
Water Oasis (1161 HK): Dividend Cut As Company Gets Conservative
QuantumPharm IPO – Most of the Potential Has Already Been Baked In
Morning Views Asia: Greentown China, HPCL-Mittal Energy Ltd, Lippo Karawaci, Citicore Renewable Energy
Morning Views Asia: Greentown China, HPCL-Mittal Energy Ltd, Lippo Karawaci, Citicore Renewable Energy

Meituan Is the Biggest Beneficiary of China’s Domestic Travel Recovery

By Andy Fu

During the upcoming Dragon Boat Festival, both flight and railway traffic seems sluggish, indicating a cooled-down enthusiasm for long-distance trips due to budget constraints.
Data points to booming short-distance travel with self-driving as the major means, helped by lower price;
Benefiting from hotel booking and catering, Meituan is the biggest beneficiary of such consumption downgrade.

MT/ Meituan (3690 HK): 1Q24, Total Revenue Up by 25% and Initiatives Loss Down by 45%

By Ming Lu

Total revenue increased by 25% YoY and all business lines grew strongly.
In 1Q24, the operating losses from new initiatives decreased by 45% YoY, but new initiatives revenue still grow.
We conclude that the price target can be double of the market price.

Water Oasis (1161 HK): Dividend Cut As Company Gets Conservative

By Sameer Taneja

Water Oasis (1161 HK) reported profits down 30% YoY (ex-one-off profits down 9% YoY only), but commentary cited headwinds in the business due to muted HK economic sentiment.
Anticipating these headwinds, the company cut its semi-annual dividend by 50% to only 3.5 cents (implying a 7% yield on the current share price) despite a massive cash buildup.
Net cash at 396 mn HKD is now 58% of the market cap. Given the current economic backdrop, we see a conservative approach to dividend payment in the medium term.

QuantumPharm IPO – Most of the Potential Has Already Been Baked In

By Clarence Chu

QuantumPharm (QUP HK) is looking to raise US$144m from its Hong Kong IPO.
QuantumPharm is a R&D platform, utilizing quantum physics-based first-principles calculation, advanced AI, high-performance cloud computing, and scalable and standardized robotic automation to provide drug and material science R&D solutions.
In our previous notes, we looked at the firm’s past performance and PHIP updates. In this note, we share our thoughts on valuations.

Morning Views Asia: Greentown China, HPCL-Mittal Energy Ltd, Lippo Karawaci, Citicore Renewable Energy

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.