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Smartkarma Daily Briefs

Jun 06
0

Daily Brief Consumer: Hyundai Motor, Webtoon Entertainment, Alibaba Group Holding , TSE Tokyo Price Index TOPIX, Midea Group Co Ltd A, CP Axtra , Vera Bradley and more

By | Consumer, Daily Briefs

In today’s briefing:

  • Value-Up Tax Support Revealed by End of June: Local Market Eyes Corporate Tax Cut Beneficiaries
  • Webtoon Entertainment Pre-IPO – The Positives – Just Turned Profitable
  • China E-Commerce: Stabilizing Property Market Matters a Lot
  • Companies with High Corporate Governance Practices Have High ROE, but Not Vice Versa
  • Pre-IPO Midea Group H Share – Even in the Face of Challenges, There Is Still Investment Value
  • CP Axtra (CPAXT TB) – Symbiotic Alliance
  • VRA: 1Q Preview: Looking Forward to the New Day; Reiterate Buy, $10 PT
  • Webtoon Entertainment Pre-IPO – The Negatives – Korea Revenue Declined, JP Acquisition to the Rescue

Value-Up Tax Support Revealed by End of June: Local Market Eyes Corporate Tax Cut Beneficiaries

By Sanghyun Park

  • A high-ranking official from the local financial regulatory authority has confirmed to several local media outlets that the tax benefits for the value-up program will be unveiled this month.
  • Corporate tax cuts and separate taxation on dividend income will be included. The short-term impact at the time of the announcement will likely be more significant for corporate tax cuts.
  • Local market is focused on screening large companies within the KOSPI 200 that have substantial pre-tax profits in anticipation of the corporate tax cut momentum to be announced this month.

Webtoon Entertainment Pre-IPO – The Positives – Just Turned Profitable

By Ethan Aw

  • Webtoon Entertainment (WBTN US) is looking to raise up to US$500m in its US IPO.
  • Webtoon Entertainment is a global storytelling platform where a community of creators and users discover, create and share new content. 
  • In this note, we talk about the positive aspects of the deal.

China E-Commerce: Stabilizing Property Market Matters a Lot

By Eric Chen

  • A stabilizing property market matters more than other factors such as industry rivalry and shareholder return policies for the performance of leading China e-commerce players in our view.
  • China’s worst property market downturn is probably behind us. This will gradually help restore consumer confidence and lift consumer propensity to spend, improving growth outlook for China e-commerce sector.
  • We believe China e-commerce players will in general benefit from a stabilizing housing market. Alibaba remains the most attractive play in the space. 

Companies with High Corporate Governance Practices Have High ROE, but Not Vice Versa

By Aki Matsumoto

  • Companies in the 0% to 8% ROE group have low stock valuations and are in trouble because they are unable to step into value-creating management.
  • Companies in this group, which includes many prime market listed companies, have done what is required by Corporate Governance Code, but could not take action to increase their ROE.
  • The lack of significant differences in corporate governance practices for group with ROEs above 10% is due to foreign ownership not being significantly differentiated from other groups.

Pre-IPO Midea Group H Share – Even in the Face of Challenges, There Is Still Investment Value

By Xinyao (Criss) Wang

  • Although Midea’s performance keeps growing, it is difficult for the home appliance industry to return to rapidly growing incremental market as it was during the robust development of real estate.
  • As Midea’s To C business encounters growth bottleneck, To B business has become new performance driver and second growth curve, but several new businesses are facing challenges in 24Q1.
  • For mature leading enterprises in home appliance industry, a valuation of 10-20x PE is reasonable, which means market value of RMB370-740 billion, assuming 2024 net profit would reach RMB37 billion.

CP Axtra (CPAXT TB) – Symbiotic Alliance

By Angus Mackintosh

  • CP Axtra (CPAXT TB) is a merger upon a merger combining the Makro wholesale business and the Lotus hypermarket and supermarket businesses, along with a hybrid mall operation. 
  • The combined entity continues to realise operational synergies in sourcing and logistics, with a strong B2B element. Omnichannel makes up more than 16% of sales and is growing rapidly.
  • CP Axtra (CPAXT TB) provides an alternative retail exposure to its parent CP ALL (CPALL TB) with ongoing restructuring benefits still to be realised. Valuations look attractive relative to growth.  

VRA: 1Q Preview: Looking Forward to the New Day; Reiterate Buy, $10 PT

By Small Cap Consumer Research

  • We are reiterating our Buy rating, $10 price target and projections for Vera Bradley with the company announcing 1QFY25 (April) results before the open on Wednesday.
  • We believe, more than the 1Q results, which we expect to reflect the company’s desire to reduce inventory and start afresh, will be management commentary on their new relaunch of the Vera Bradley brand.
  • We expect the “New Day,” which will launch on July 11th, to focus on core styles/categories, a new store look and expanding the appeal of Vera Bradley to a wider range of customers.

Webtoon Entertainment Pre-IPO – The Negatives – Korea Revenue Declined, JP Acquisition to the Rescue

By Ethan Aw

  • Webtoon Entertainment (WBTN US) is looking to raise up to US$500m in its US IPO.
  • Webtoon Entertainment is a global storytelling platform where a community of creators and users discover, create and share new content.
  • In this note, we talk about the not-so-positive aspects of the deal.

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Jun 05
0

Daily Brief ECM: MMG (1208 HK) – $1.1bn+ Rights Offering – Expect Regular Rights Trading Dynamics and more

By | Daily Briefs, ECM

In today’s briefing:

  • MMG (1208 HK) – $1.1bn+ Rights Offering – Expect Regular Rights Trading Dynamics
  • MMG (1208 HK): US$1.2bn Highly Dilutive Rights Issue
  • Raspberry Pi IPO Valuation Analysis

MMG (1208 HK) – $1.1bn+ Rights Offering – Expect Regular Rights Trading Dynamics

By Travis Lundy

  • Mmg Ltd (1208 HK) today announced a 2:5 Rights Offering to raise US$1.15bn at HK$2.62/share in order to pay down debt from their recent Botswanan copper mine acquisition. 
  • It was a sizeable acquisition, and the near-term EV/EBITDA of the acquisition is 10x or above. The longer-term EV/EBITDA is in the 3s based on expansion later this decade.
  • The Rights Offering is underwritten, supported by its 67.5% owner. SOUTHBOUND holds 10+%. There are short dynamics, arb dynamics, “don’t wanna spend more” dynamics. There’s a path here.

MMG (1208 HK): US$1.2bn Highly Dilutive Rights Issue

By Arun George

  • Mmg Ltd (1208 HK) will raise HK$9.1bn (US$1.2bn) through 2 rights shares for every 5 existing shares rights offering. The rights price is HK$2.62, a 24.7% discount to the TERP.
  • The rights proceeds will be used to repay existing debt, which will allow it to use other funds to better support the ongoing development of the operating mines.
  • MMG shares should continue to decline heading into the ex-rights date. The shares go ex-rights on 11 June, and the rights start trading from 24 June to 2 July (inclusive).

Raspberry Pi IPO Valuation Analysis

By Douglas Kim

  • Raspberry Pi is expected to raise about £157 million in this IPO. The conditional trading for this IPO is expected to be take place on 11 June.
  • We estimate Raspberry Pi to generate sales of US$342.1 million (up 28.7% YoY) and operating profit of US$48.5 million (up 29.3% YoY) in 2024.
  • Our base case valuation of Raspberry Pi is market cap of £772 million or £4 per share (43% higher than the high end of the initial IPO price range). 

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Jun 05
0

Daily Brief Thematic (Sector/Industry): Episode 70!!! NPUs!!!!!!!! and more

By | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

  • Episode 70!!! NPUs!!!!!!!!
  • #11Business Buzz: India’s Stock Market Plunge, Intel Vs. Nvidia, and China’s Fundraising Frenzy
  • Ohayo Japan | Commodities Smoked
  • Corporations Learned The Maximum Amount They Can Charge For a Product
  • #7 India Insights: Weaker Modi Mandate, Plunging PSUs, Tata Steel Credit Profile, Reliance, Airtel
  • [Blue Lotus Daily – TMT Update]:PDD/SHEIN/AMZN/BABA US/JD US/3690 HK/1810 HK/700 HK/MNSO US
  • [Blue Lotus Daily]:BEKE US/9926 HK/1211 HK/ LI US
  • Portfolio Update: May 2024

Episode 70!!! NPUs!!!!!!!!

By The Circuit

  • Paul Karazuba is the vice president of marketing at Expedera, an NPU IP startup in Silicon Valley.
  • NPU, or neural processing unit, is a key topic of discussion in the podcast, with its unique ability to process at a much lower wattage compared to CPU and GPU cores.
  • The necessity for dedicated NPU cores in running AI workloads, to allow CPU and GPU cores to focus on other tasks, is highlighted by both Paul and Austin.

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

#11Business Buzz: India’s Stock Market Plunge, Intel Vs. Nvidia, and China’s Fundraising Frenzy

By Nimish Maheshwari

  • India’s stock market dropped $386 billion after election results showed a narrower-than-expected lead for Modi
  • Intel’s CEO introduced new AI products at Computex, challenging Nvidia’s market dominance
  • Chinese companies rush to raise funds amid a stock market rebound, driven by investor optimism and future uncertainty

Ohayo Japan | Commodities Smoked

By Mark Chadwick

  • Weaker-Than-Expected job openings data prompted hopes for Fed rate cuts, pushing Treasury yields down for the fourth consecutive day
  • A coalition of over 400 Japanese companies plans to establish a $1 billion fund by September to enhance hydrogen supply chains
  • UNIQLO’s May 2024 same-store sales in Japan, including online, rose by 8.4% year-on-year, attributed to strong business during the Golden Week holiday

Corporations Learned The Maximum Amount They Can Charge For a Product

By Odd Lots

  • McDonald’s uses price pack architecture with varying prices for different purchasing methods
  • Pricing strategies raise questions about fairness, data privacy, and macroeconomic implications
  • Surge pricing in fast food is already present, similar to dynamic pricing in other industries

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

#7 India Insights: Weaker Modi Mandate, Plunging PSUs, Tata Steel Credit Profile, Reliance, Airtel

By Sudarshan Bhandari

[Blue Lotus Daily – TMT Update]:PDD/SHEIN/AMZN/BABA US/JD US/3690 HK/1810 HK/700 HK/MNSO US

By Ying Pan

  • PDD/SHEIN/AMZN: U.S. CBP suspends customs brokers handling cross-border parcels for Temu and SHEIN (-/-/+)
  • BABA US/JD US/PDD US/3690 HK:The upcoming regulatory policies on internet platform fees should not be overly negatively interpreted(///////)
  • BABA US/JD US/3690 HK/1810 HK:Beijing Follows up with Subsidies for Replacing Old Appliances with New Ones, but National Subsidies Are Still Lacking(+/+/+/+)

[Blue Lotus Daily]:BEKE US/9926 HK/1211 HK/ LI US

By Eric Wen

  • BEKE US:  Takeaways from Beike Investor Day on June 3(/)
  • 9926 HK: Akeso adds sales rights to AK112 in developing countries, possibly preparing for overall sale(/)
  • 1211 HK/ LI US: BYD launches fifth-generation hybrid petrol-electric technology, which can run 2,100 kilometers on full-tank+full-battery(///)

Portfolio Update: May 2024

By Contrarian Cashflows

  • Welcome back to the portfolio updates series!

  • I recently read Michael J. Mauboussin’s book, More Than You Know, which is full of practical investment lessons drawn from various fields not necessarily related to investing.

  • The quote below is from a chapter discussing market efficiency and cautioning investors against misusing behavioral finance to conclude that humans are irrational, and therefore, markets must be irrational as well.

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Jun 05
0

Daily Brief Credit: Morning Views Asia: China Vanke and more

By | Credit, Daily Briefs

In today’s briefing:

  • Morning Views Asia: China Vanke

Morning Views Asia: China Vanke

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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Jun 05
0

Daily Brief Event-Driven: Shinko Electric (6967) – Break/Gap Risk Early June 2024 Update and more

By | Daily Briefs, Event-Driven

In today’s briefing:

  • Shinko Electric (6967) – Break/Gap Risk Early June 2024 Update
  • HSI, HSCEI, HSTECH, HSIII: Rebalance Flows Post Capping (June 2024)
  • MSC May Rebalance: SA & China Net Sells, NPN, PRX & Tencent Sold Down on Buybacks
  • StubWorld: What Now With Langham (1270 HK)?
  • HSI/HSCEI/HSTECH June 2024 Rebal Final Re-Capping (Or Re-Re-Capping) Flows
  • Northern Minerals (NMI AU): Chinese Investors Forced To Exit
  • Quiddity ChiNext/ChiNext 50 Jun 24 Rebalance: ~US$700mn One-Way Flows; Thoughts on Surprises
  • China TCM (570.HK) Privatization Update – Investors May Need to Prepare for a Longer Wait
  • GS Retail: Equity Spin Off of Parnas Hotel and Freshmeat Subsidiaries
  • MV Australia A-REITs Index Rebalance Preview: ASK May Be Deleted; HMC Close Add; Capping Changes

Shinko Electric (6967) – Break/Gap Risk Early June 2024 Update

By Travis Lundy

  • When this deal was announced, it was light. But the timing, JSR influence, large-ish float, ensured FUD would make this trade wide. It traded wider.
  • Nearly 5mos ago, Shinko had much-underperformed peer Ibiden, meaning downside gap risk from undisturbed was negative as spreads were wide. I reco’d a buy. Then 12wks ago, recommended taking profits.
  • Shinko had outperformed Ibiden, gross spreads had narrowed 5+% on JSR approval. Spreads are now 2.6% wider than at narrowest. In May, gap risk narrowed as Shinko underperformed Ibiden.

HSI, HSCEI, HSTECH, HSIII: Rebalance Flows Post Capping (June 2024)

By Brian Freitas

MSC May Rebalance: SA & China Net Sells, NPN, PRX & Tencent Sold Down on Buybacks

By Charlotte van Tiddens, CFA

  • MSC indices were rebalanced in the closing auction on Friday. Turnover for the day on the JSE was R41.9bn, R25bn traded in the closing auction (60%).
  • Turnover at the February rebalance was R25.6bn. Most SA constituents were pushed lower in the closing auction and for the day, consistent with the downweighting of SA Inc.
  • China was downweighted in the ACWI and EM indices for a second straight quarter, reducing the country weight in ACWI by 6bps to 2.69%.

StubWorld: What Now With Langham (1270 HK)?

By David Blennerhassett

  • Unexpectantly, Great Eagle Holdings (41 HK) said it would not proceed with an Offer; and Hong Kong hotel-play Langham Hospitality (1270 HK) promptly cratered. But why the flip flop?
  • Preceding my comments on GE, Langham and Champion REIT (2778 HK), are the current setup/unwind tables for Asia-Pacific Holdcos.
  • These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation >20%.

HSI/HSCEI/HSTECH June 2024 Rebal Final Re-Capping (Or Re-Re-Capping) Flows

By Travis Lundy

Northern Minerals (NMI AU): Chinese Investors Forced To Exit

By David Blennerhassett

  • Back in February last year, the Aussie Treasurer prohibited Yuxiao Fund from buying an additional 9.92% in Northern Minerals (NTU AU) which would have increased its stake to 19.9%.
  • On the 20th November 2023, Yuxiao sought the removal of Nicholas Curtis as director of the rare-metal play at an EGM; however Curtis resigned his post and the EGM cancelled.
  • The Aussie Treasurer has now made orders requiring Yuxiao and four (deemed) associated investors to sell their holdings (~10.4% all-in) within 60 days. 

Quiddity ChiNext/ChiNext 50 Jun 24 Rebalance: ~US$700mn One-Way Flows; Thoughts on Surprises

By Janaghan Jeyakumar, CFA

  • The June 2024 index review results for the ChiNext and ChiNext 50 indices were announced yesterday.
  • There will be seven changes for the ChiNext index and five changes for the ChiNext 50 index. Some of these names surprised us.
  • In this insight, we take a look at our final flow expectations for the confirmed index changes and our thoughts on the selection process.

China TCM (570.HK) Privatization Update – Investors May Need to Prepare for a Longer Wait

By Xinyao (Criss) Wang

  • The approval/filing process of China TCM’s privatization is complicated and would take some time, but there’re almost no cases of disapproval. It also depends on the adequacy of materials submitted.
  • Due to the extension of time for the despatch of Scheme Document, this process would be delayed for more months.But we should receive clear information by October at the latest.
  • For arbitrageurs, China TCM is an investment opportunity of high success rate, which becomes more attractive if HK stock market is depressed.It’s better suited to idle funds considering potential risks/returns.

GS Retail: Equity Spin Off of Parnas Hotel and Freshmeat Subsidiaries

By Douglas Kim

  • On 3 June, GS Retail (007070 KS) announced that it will spin off Parnas Hotel and Freshmeat subsidiaries to simplify its business structure and enhance shareholder value.
  • The company plans to create a new entity tentatively called Parnas Holdings which will include Parnas hotel and Freshmeat (a meat processing company). 
  • We have a positive view of GS Retail’s decision to conduct this equity spin off which simplifies the business structures and it could raise the valuation multiples of GS Retail. 

MV Australia A-REITs Index Rebalance Preview: ASK May Be Deleted; HMC Close Add; Capping Changes

By Brian Freitas

  • The review period for the June rebalance ended last week. There could be one deletion from the index and a bunch of capping changes.
  • There is one stock that is close to inclusion zone but may not make it in June.
  • The expected index changes will lead to a one-way turnover of 2.5% resulting in a one-way trade of A$14m. That will increase if there is an inclusion.

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Jun 05
0

Daily Brief Equity Bottom-Up: Pop Mart (9992 HK):  Accelerating Momentum Internationally; Raising My Estimates and more

By | Daily Briefs, Equity Bottom-Up

In today’s briefing:

  • Pop Mart (9992 HK):  Accelerating Momentum Internationally; Raising My Estimates
  • Tech Supply Chain Tracker (05-Jun-2024): Gelsinger forecasts Intel Taiwan party for 40th anniversary.
  • Using AI to Detect Fraud and Protect Your Investments
  • Chow Tai Fook (1929 HK): What if Special Dividends Are Declared?
  • Tosei (8923) | Strong Performance with Dalton’s Governance Watch
  • MMG Limited’s Rights Issue (1208.HK)
  • KOSAIDO Holdings (7868) – Pursuing Comprehensive Growth
  • Carnival Corporation &Amp; Plc (CCL) – Tuesday, Mar 5, 2024
  • Amaero International Ltd – Atomiser commissioned ahead of June 30 deadline
  • MNOV: Multiple Abstracts Presented at 92nd EAS Congress

Pop Mart (9992 HK):  Accelerating Momentum Internationally; Raising My Estimates

By Steve Zhou, CFA

  • In 1Q24, Pop Mart International Group L (9992 HK)‘s international sales grew around 250% yoy, and made up around one quarter of sales (vs. 17% of sales in 2023). 
  • I now expect 39% sales growth in 2024, driven by 140% yoy growth in the international business and 18% growth in domestic China business. 
  • I further expect a 50% yoy growth in net profit growth in 2024 driven by a 0.8ppt increase in gross margin and 0.5ppt in operating leverage. 

Tech Supply Chain Tracker (05-Jun-2024): Gelsinger forecasts Intel Taiwan party for 40th anniversary.

By Tech Supply Chain Tracker

  • Gelsinger excited for AI PC breakthrough at Computex 2024, plans Intel’s 40th anniversary event in Taiwan next year.
  • MediaTek unveils AI and wireless advancements at Computex 2024, demonstrating commitment to technology innovation.
  • Nvidia CEO predicts rise of robots in the future; Taiwan’s LEO satellite program delayed by funding and tech transfer issues.

Using AI to Detect Fraud and Protect Your Investments

By Mark Jolley

  • Accounting fraud costs the global economy at least US$1 trillion each year in losses to investors, suppliers and consumers
  • Detecting accounting fraud early gives investors valuable intel to rethink certain stock or bond holdings.
  • Transparently.AI’s AI-powered solution is highly accurate in measuring and detecting accounting manipulation and fraud.

Chow Tai Fook (1929 HK): What if Special Dividends Are Declared?

By Osbert Tang, CFA

  • The market’s assumption of no special dividends in Chow Tai Fook Jewellery (1929 HK)‘s upcoming FY24 result is conservative, and this does not fit into its usual pattern. 
  • Should it pay special DPS, the dividend yield may reach an attractive 10.7%. With its net cash position, CTF can financially maintain the average 135.6% payout ratio. 
  • A return to its historical average dividend yield of 7.4% means that CTF’s share price will need to go up by 45% from the current level.

Tosei (8923) | Strong Performance with Dalton’s Governance Watch

By Mark Chadwick

  • Tosei achieved record revenue and profit, driven by robust growth in its fund management business and a balanced portfolio of stable and sales-driven operations.
  • Activist investor Dalton acquired a 5.02% stake, highlighting concerns over recent governance decisions and potential Board independence dilution due to the Nagoya Railroad alliance.
  • Dalton’s involvement ensures heightened scrutiny, promising better governance, and potentially favorable outcomes for minority shareholders amid Tosei’s continued strong business performance.

MMG Limited’s Rights Issue (1208.HK)

By Rikki Malik

  • Short term overhang from expanded share count and selling from unwilling participants
  • The copper supply and demand story is intact and the fundamentals of the company remain strong
  • Parent’s uptake of the rights is positive but the stock will take time to build a base for the next leg up 

KOSAIDO Holdings (7868) – Pursuing Comprehensive Growth

By Astris Advisory Japan

  • Results underline high earnings visibility in Profit-Generating Funeral Services – Q1-4 FY3/24 results were in line with guidance, with positive high growth momentum being sustained at Profit- Generating Funeral Services.
  • The legacy businesses (Information and HR) missed forecasts, highlighting turnaround challenges.
  • However, the new business Asset Consulting has started strongly as a high-margin activity, and the outlook is positive. 

Carnival Corporation &Amp; Plc (CCL) – Tuesday, Mar 5, 2024

By Value Investors Club

  • Carnival Corporation is the world’s largest cruise ship operator with a large fleet and significant market share
  • The company was severely impacted by the COVID-19 pandemic, halting service for 15 months and taking on substantial debt
  • Since resuming cruises in July 2021, Carnival has seen a rebound in revenues driven by strong demand for post-COVID travel, but still faces challenges with cashflow and debt sustainability

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.

Amaero International Ltd – Atomiser commissioned ahead of June 30 deadline

By Research as a Service (RaaS)

  • RaaS Research Group has published a flash comment on advanced materials manufacturing group Amaero International (ASX:3DA) following its announcement that the first atomiser has been commissioned at its Tennessee facility ahead of schedule.
  • The commissioning is an important step toward the production of C103 and specialty alloy powder at the facility and allows the company to move to the next step of achieving qualification and, ultimately, commercialisation.
  • Amaero’s announcement underpins our confidence in the production timing we have applied to our estimates.

MNOV: Multiple Abstracts Presented at 92nd EAS Congress

By Zacks Small Cap Research

  • On May 28, 2024, MediciNova, Inc. (MNOV) announced that two abstracts regarding MN-001 (tipelukast) and MN-002 were presented as posters at the 92nd European Atherosclerosis Society (EAS) 2024 Congress.
  • The poster on MN-001 discussed the objectives and design of the ongoing Phase 2 clinical trial enrolling patients with Type 2 diabetes, dyslipidemia, and NAFLD, which has now enrolled a total of 33 patients.
  • The other presentation regarded the mechanism of action of MN-001/MN-002 in lipid metabolism.

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Jun 05
0

Daily Brief Crypto: April Showers Bring May Flowers and more

By | Crypto, Daily Briefs

In today’s briefing:

  • April Showers Bring May Flowers
  • Crypto Crisp: Three In A Row

April Showers Bring May Flowers

By Delphi Digital

  • BTC Spot ETFs Net $2Bn in May: Discover how consistent ETF inflows are driving Bitcoin’s impressive rally and near all-time highs.
  • BTC Market Structure Insights: Learn about the consolidation patterns and market scenarios that could lead to Bitcoin breaking new highs.
  • Upcoming Token Unlocks: Stay informed about significant upcoming token unlocks and their potential market impact.

Crypto Crisp: Three In A Row

By Mads Eberhardt

  • In the past one and a half months, exchange-traded crypto funds have been launched in two countries.
  • Hong Kong introduced both Bitcoin and Ethereum exchange-traded products in late April, followed by the UK doing the same last week.
  • Tomorrow, Australia will launch its Bitcoin spot ETF, but like the recent launches in Hong Kong and the UK, we do not expect it to be a major success.

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Jun 05
0

Daily Brief Macro: ETFs Are Reaching Way Beyond Passive Investing and more

By | Daily Briefs, Macro

In today’s briefing:

  • ETFs Are Reaching Way Beyond Passive Investing
  • Impact of China’s Economic Deceleration on EM Economies
  • Energy Cable: OPEC needs a big rebound on the demand side
  • Market Trends and Strategy: Hong Kong Bull Market Broadens
  • Positioning Watch – Turmoil in Markets Is Returning
  • UK/Europe: Softly, Softly…
  • Switzerland CPI Inflation 1.4% y-o-y (consensus 1.4%) in May-24

ETFs Are Reaching Way Beyond Passive Investing

By Srinidhi Raghavendra

  • ETFs are synonymous with passive investing. It passive investing and beyond. ETFs have been stealing breakfast, lunch and dinner away from mutual funds.
  • Active ETFs have jumped from obscurity to ubiquity. >70% of new ETF launches in the US over the last seven years have been active ETFs.
  • Active ETFs in the cheapest quintile command AUM of USD 325 billion while those in the most expensive quintile hold merely USD 35 billion.

Impact of China’s Economic Deceleration on EM Economies

By Alex Ng

  • China’s economic growth is expected to decelerate from the previous high-growth period in the 2000s and early 2010s. This will have an impact on other EMs. 
  • We track the impact from the angles of China’s commodity imports, supply-chain position, and foreign investment.
  • Commodity producer countries can be more heavily impacted. The impact on Asia will be mixed, suffering from regional trade, but some supply chains could be diverted away from China.

Energy Cable: OPEC needs a big rebound on the demand side

By Andreas Steno

  • Evening from Europe!What a bloodbath in long oil bets today, and we are bleeding alongside the crowd as we are down 5.7% in our long bets in the CLN4 future.
  • The OPEC+ meeting over the weekend did not fuel a bullish supply narrative as we can (at best) expect the status quo.
  • The supply cuts were prolonged (as was our base-case), but assuming that the cuts will actually be reversed by June or September 2025, which seems to be the forward guidance from OPEC now, we’d have to see a much stronger business cycle in Manufacturing for that to match with the demand side.

Market Trends and Strategy: Hong Kong Bull Market Broadens

By David Mudd

  • High dividend yield  names continue to outperform the broader market.  Energy and Materials sectors are best performers over the last year.
  • Mainland buying has continued to buoy the Hong Kong market even through the pullback in May.
  • Short selling is declining and market breadth is increasing supporting rotational buying between sectors.

Positioning Watch – Turmoil in Markets Is Returning

By Andreas Steno

  • Hello everyone, and welcome back to our weekly positioning watch.
  • The divergence between market-cap weighted and and non market-cap weighted indices is slowly normalizing, but the impact that NVIDIA (and some of the other big tech firms) has on both broad equity returns is notable with the 5 largest companies in the S&P 500 accounting for roughly 30% of the index by now.
  • This does not only have implications for the distribution of returns between bigger indices (Nasdaq vs Dow Jones for instance), but also on indices option volatility, with the VIX ex NVIDIA hitting lows of around 9 in May (2017/2018 lows).

UK/Europe: Softly, Softly…

By Alastair Newton

  • Labour’s dual strategy towards Europe could potentially enhance the UK’s economy.
  • Despite the potential benefits, it is unlikely to yield significant results until the end of the next parliamentary term.
  • This suggests that even in a best-case scenario, the economic impact may not be immediate.

Switzerland CPI Inflation 1.4% y-o-y (consensus 1.4%) in May-24

By Heteronomics AI

  • Switzerland’s CPI inflation rate was stable at 1.4% year-on-year in May 2024, aligning with consensus expectations and the rate of the previous month, with slight variations from historical averages.
  • There was a 0.3% month-on-month CPI increase in May 2024.
  • A 0.6% month-on-month PPI increase in April 2024 suggests controlled price transmission and effective measures to maintain consumer price stability.
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 05
0

Daily Brief Australia: Mmg Ltd, Northern Mining, Dexus Property, Amaero International Ltd and more

By | Australia, Daily Briefs

In today’s briefing:

  • MMG (1208 HK) – $1.1bn+ Rights Offering – Expect Regular Rights Trading Dynamics
  • MMG (1208 HK): US$1.2bn Highly Dilutive Rights Issue
  • Northern Minerals (NMI AU): Chinese Investors Forced To Exit
  • MV Australia A-REITs Index Rebalance Preview: ASK May Be Deleted; HMC Close Add; Capping Changes
  • MMG Limited’s Rights Issue (1208.HK)
  • Amaero International Ltd – Atomiser commissioned ahead of June 30 deadline

MMG (1208 HK) – $1.1bn+ Rights Offering – Expect Regular Rights Trading Dynamics

By Travis Lundy

  • Mmg Ltd (1208 HK) today announced a 2:5 Rights Offering to raise US$1.15bn at HK$2.62/share in order to pay down debt from their recent Botswanan copper mine acquisition. 
  • It was a sizeable acquisition, and the near-term EV/EBITDA of the acquisition is 10x or above. The longer-term EV/EBITDA is in the 3s based on expansion later this decade.
  • The Rights Offering is underwritten, supported by its 67.5% owner. SOUTHBOUND holds 10+%. There are short dynamics, arb dynamics, “don’t wanna spend more” dynamics. There’s a path here.

MMG (1208 HK): US$1.2bn Highly Dilutive Rights Issue

By Arun George

  • Mmg Ltd (1208 HK) will raise HK$9.1bn (US$1.2bn) through 2 rights shares for every 5 existing shares rights offering. The rights price is HK$2.62, a 24.7% discount to the TERP.
  • The rights proceeds will be used to repay existing debt, which will allow it to use other funds to better support the ongoing development of the operating mines.
  • MMG shares should continue to decline heading into the ex-rights date. The shares go ex-rights on 11 June, and the rights start trading from 24 June to 2 July (inclusive).

Northern Minerals (NMI AU): Chinese Investors Forced To Exit

By David Blennerhassett

  • Back in February last year, the Aussie Treasurer prohibited Yuxiao Fund from buying an additional 9.92% in Northern Minerals (NTU AU) which would have increased its stake to 19.9%.
  • On the 20th November 2023, Yuxiao sought the removal of Nicholas Curtis as director of the rare-metal play at an EGM; however Curtis resigned his post and the EGM cancelled.
  • The Aussie Treasurer has now made orders requiring Yuxiao and four (deemed) associated investors to sell their holdings (~10.4% all-in) within 60 days. 

MV Australia A-REITs Index Rebalance Preview: ASK May Be Deleted; HMC Close Add; Capping Changes

By Brian Freitas

  • The review period for the June rebalance ended last week. There could be one deletion from the index and a bunch of capping changes.
  • There is one stock that is close to inclusion zone but may not make it in June.
  • The expected index changes will lead to a one-way turnover of 2.5% resulting in a one-way trade of A$14m. That will increase if there is an inclusion.

MMG Limited’s Rights Issue (1208.HK)

By Rikki Malik

  • Short term overhang from expanded share count and selling from unwilling participants
  • The copper supply and demand story is intact and the fundamentals of the company remain strong
  • Parent’s uptake of the rights is positive but the stock will take time to build a base for the next leg up 

Amaero International Ltd – Atomiser commissioned ahead of June 30 deadline

By Research as a Service (RaaS)

  • RaaS Research Group has published a flash comment on advanced materials manufacturing group Amaero International (ASX:3DA) following its announcement that the first atomiser has been commissioned at its Tennessee facility ahead of schedule.
  • The commissioning is an important step toward the production of C103 and specialty alloy powder at the facility and allows the company to move to the next step of achieving qualification and, ultimately, commercialisation.
  • Amaero’s announcement underpins our confidence in the production timing we have applied to our estimates.

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Jun 05
0

Daily Brief South Korea: GS Retail and more

By | Daily Briefs, South Korea

In today’s briefing:

  • GS Retail: Equity Spin Off of Parnas Hotel and Freshmeat Subsidiaries

GS Retail: Equity Spin Off of Parnas Hotel and Freshmeat Subsidiaries

By Douglas Kim

  • On 3 June, GS Retail (007070 KS) announced that it will spin off Parnas Hotel and Freshmeat subsidiaries to simplify its business structure and enhance shareholder value.
  • The company plans to create a new entity tentatively called Parnas Holdings which will include Parnas hotel and Freshmeat (a meat processing company). 
  • We have a positive view of GS Retail’s decision to conduct this equity spin off which simplifies the business structures and it could raise the valuation multiples of GS Retail. 

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