Smartkarma Daily Briefs

Back in February this year, various media sources reported that the key shareholders of warehouse/fund management play ESR Group (1821 HK), were exploring options, including a privatisation.
Long-Term holders Warburg Pincus and Canadian pension fund OMERS hold 14% and 10.7% respectively. ESR co-founders/directors Jeffrey Shen, Stuart Gibson, Charles de Portes, and Hwee Chiang collectively hold another ~23%.
Shares in ESR were suspended this morning “pursuant to the Hong Kong Code on Takeovers and Mergers“.

ESR Group (1821 HK): Starwood Capital and SSW Partners Gauging a Privatisation Bid

ESR Group (1821 HK) is on a trading halt. Press reports suggest a consortium featuring Starwood Capital Group and SSW Partners is considering a buyout.
Starwood and SSW are approaching other shareholders to join the consortium. The other members are likely Warburg Pincus, OMERS, Jinchu Shen, and Hwee Chiang Lim.
The offer is likely to be structured as a Cayman privatisation scheme. Our best guess is that an offer of at least HK$14.00 per share would be needed.

Cafe De Coral (341 HK): Immediate Upside

By Henry Soediarko

Cafe De Coral Holdings (341 HK) share price never really rebounded post COVID despite its operating numbers gradually improving.
Haidilao International Holding (6862 HK) share price has rallied along with the Hang Seng Index (HSI INDEX) and Hang Seng China Enterprises Index (HSCEI INDEX) but not Cafe de Coral.
Recent profit alert that, excluding pandemic subsidies, the group’s net profit will rise 470% YoY.

CSI Medical Service Index Rebalance Preview: Repeat of the December Rebal Could See Big Gains

The review period ended on 30 April, there are just over 2 weeks to announcement of the changes, and implementation will be done at the close on 14 June.
We forecast 5 potential changes for the index in June where there could be buying of 1.6-2.6x ADV on the adds and selling of 0.7-2.6x ADV on the deletes.
At the December 2023 rebalance, the adds outperformed the deletes in the weeks prior to announcement of the changes and then spiked post-announcement. Repeat this time?

China Consumption Weekly (13 May 2024): Guangzhou Auto, NIO, CALT, Kuaishou, Trip.com, Seres

By Ming Lu

The new energy vehicle producers’ ranks changed a lot in April.
GAC began to sell batteries to outside new energy vehicle producers.
Kuaishou’s GMV (Gross Merchandise Value) increased by 420% YoY during the Labor Day.

Breton Technology Pre-IPO Tearsheet

By Ethan Aw

Breton Technology (1884270D CH) is looking to raise up to US$200m in its upcoming HK IPO. The deal will be run by CICC and CMB International.
Breton Technology is a clean energy solution provider in China, focusing on the design, development and commercialization of engineering machinery powered by new energy sources.
Such engineering machinery includes battery-electric loaders and wide-body dump trucks, each offering a variety of payload and battery capacities.

China National Medicines (600511.CH) – After Restructuring, Performance Growth Is Guaranteed

By Xinyao (Criss) Wang

The “Entrusted Management Agreement” indicates that horizontal competition issue will be completely solved within three years.This could pave the way for a future merger between Guorui and Shanghai Shyndec Pharmaceutical.
The spin-off of Guorui won’t have material impact on China National Medicines Corporation (CNMC). After restructuring, CNMC will focus on “Beijing area pharmaceutical distribution + nationwide distribution of anesthesia/psychotropic drugs”.
Based on strong/stable fundamentals as well as the dominant position in anesthesia and psychotropic drug business, CNMC’s future growth potential is promising. We share our views on the Company’s valuation.

Chongho Bridge Pre-IPO – Broad Offering Catered to Rural Consumers, However, Market Is Fragmented

By Clarence Chu

Chongho Bridge (2314866D CH) is looking to raise about US$500m in its upcoming Hong Kong IPO.
Chongho Bridge (CB) is an integrated services provider to China’s rural population. It offers rural inclusive credit services, agricultural production services, rural consumer goods and rural clean energy services.
In this note, we look at the firm’s past performance.

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May 14

Daily Brief Credit: Tata Motors – Earnings Flash – FY 2023-24 Results – Lucror Analytics and more

By Smartkarma Daily Briefs | Credit, Daily Briefs

In today’s briefing:

Tata Motors – Earnings Flash – FY 2023-24 Results – Lucror Analytics

Tata Motors – Earnings Flash – FY 2023-24 Results – Lucror Analytics

By Trung Nguyen

Tata Motors’ Q4 and FY 2023-24 results were excellent in our view, with record high revenue and earnings. Net debt plunged by such a large amount that the Indian business has turned net cash, and the group remained on track to be overall net automotive debt free in FY 2024-25.

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May 14

Daily Brief Event-Driven: ESR Group (1821 HK): Offer Musings and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

ESR Group (1821 HK): Offer Musings
ESR Group (1821 HK): Starwood Capital and SSW Partners Gauging a Privatisation Bid
Blackstone to Take I’rom (2372 JP) Private in MBO at ¥2800/Share (49% Premium)
Aozora (8304) – Daiwa Securities Group (8601) Tie-Up – Daiwa To Buy 15+%
Toppan Printing (7911) Accelerates Buyback Pace and Amount; But Crossholder Sales Lurk
Luxottica Buys Washin Optical, Paris Miki Next?
Softbank (9984 JP): Has Group NAV Peaked?
CSI Medical Service Index Rebalance Preview: Repeat of the December Rebal Could See Big Gains
I’rom Group (2372 JP): Blackstone-Sponsored Pre-Conditional MBO at JPY2,800
A Comparison Between Ecopro Materials & HD Hyundai Marine Solution Post IPO

ESR Group (1821 HK): Offer Musings

Back in February this year, various media sources reported that the key shareholders of warehouse/fund management play ESR Group (1821 HK), were exploring options, including a privatisation.
Long-Term holders Warburg Pincus and Canadian pension fund OMERS hold 14% and 10.7% respectively. ESR co-founders/directors Jeffrey Shen, Stuart Gibson, Charles de Portes, and Hwee Chiang collectively hold another ~23%.
Shares in ESR were suspended this morning “pursuant to the Hong Kong Code on Takeovers and Mergers“.

ESR Group (1821 HK): Starwood Capital and SSW Partners Gauging a Privatisation Bid

ESR Group (1821 HK) is on a trading halt. Press reports suggest a consortium featuring Starwood Capital Group and SSW Partners is considering a buyout.
Starwood and SSW are approaching other shareholders to join the consortium. The other members are likely Warburg Pincus, OMERS, Jinchu Shen, and Hwee Chiang Lim.
The offer is likely to be structured as a Cayman privatisation scheme. Our best guess is that an offer of at least HK$14.00 per share would be needed.

Blackstone to Take I’rom (2372 JP) Private in MBO at ¥2800/Share (49% Premium)

Today SMO and CRO operator I’Rom Group (2372 JP) announced an MBO where Blackstone would be the sponsor.
From outward appearances, it would seem to be an estate management exercise. It’s not particularly rich as a bid, but it isn’t awful.
I expect this gets done as Mori-san and family and friends appear to have 58% going in. Expected to start in June.

Aozora (8304) – Daiwa Securities Group (8601) Tie-Up – Daiwa To Buy 15+%

Pre-Open on February 1 2024, Aozora Bank Ltd (8304 JP) announced writedowns and a forecast revision, lowering full-year net profit expectations from +¥24bn to -¥28bn.
Shares which had been trading relatively richly (and heavily shorted) fell sharply over the following days, then noted activist Murakami-san started buying in. Then he bought more and went silent.
Today, Aozora reported full-year earnings – much worse than expected and Mar25 guidance lower than already low Street estimates. And they are selling 15% stake to Daiwa Securities Group. Oof!

Toppan Printing (7911) Accelerates Buyback Pace and Amount; But Crossholder Sales Lurk

Toppan Printing (7911 JP) established a new Medium-Term Management Plan with targets in May 2023. 8% ROE, PBR >1.0x. More DX business. More management modernisation. More ESG. Mooooarrrrr!
They also promised capital measures: ¥100bn of buybacks over three years. Total shareholder return of 50%+ over three years. More progress in selling down cross-holdings.
Today the company reported better-than expected full-year revenues, OP, and Net Profit, added more to the buybacks, and shortened the buyback period to two years. Details matter.

Luxottica Buys Washin Optical, Paris Miki Next?

By Michael Causton

EssilorLuxottica has always played a long game in Japan but since 2018 the eyewear giant has been investing in local production and a growing store network.
As reported by Mark Chadwick,Travis Lundy and myself, Luxottica has a stake in Paris Miki Holdings (7455 JP) and the Japanese firm is a key strategic interest for EssilorLuxottica.
That Luxottica is increasing its investments in Japan retail through acquisition is evidenced by its takeover of Washin Optical, a 70-store eyewear chain, last month.

Softbank (9984 JP): Has Group NAV Peaked?

By Victor Galliano

Arm’s valuation has driven the group NAV to a new high at fiscal year-end in March; with Arm accounting for 45% of group equity value, NAV downside risk is high
JPY depreciation has been NAV supportive, but this could reverse; SVF2 remains very exposed to financing costs, with 87% of its equity value in private companies
Softbank shares trade at a 57% discount to the estimated NAV; yet the downside risks to Arm’s valuation, along with SVF2 valuation headwinds, should keep the discount wide

CSI Medical Service Index Rebalance Preview: Repeat of the December Rebal Could See Big Gains

The review period ended on 30 April, there are just over 2 weeks to announcement of the changes, and implementation will be done at the close on 14 June.
We forecast 5 potential changes for the index in June where there could be buying of 1.6-2.6x ADV on the adds and selling of 0.7-2.6x ADV on the deletes.
At the December 2023 rebalance, the adds outperformed the deletes in the weeks prior to announcement of the changes and then spiked post-announcement. Repeat this time?

I’rom Group (2372 JP): Blackstone-Sponsored Pre-Conditional MBO at JPY2,800

I’Rom Group (2372 JP) recommended a Blackstone (BX US)-sponsored pre-conditional MBO at JPY2,800, a 49.5% premium to the undisturbed price.
Approvals under the competition laws of Japan and Australia are a precondition. The tender offer is expected to start in mid-June.
The offer is attractive and requires a 37% minority acceptance rate. While the timing of regulatory approvals is a risk, the transaction is a done deal.

A Comparison Between Ecopro Materials & HD Hyundai Marine Solution Post IPO

By Douglas Kim

In this insight, we make comparisons between EcoPro Materials (450080 KS) and HD Hyundai Marine Solution (443060 KS) post their IPOs
Ecopro Materials’ share price is likely to face continued weakness, especially with the potential for a major block deal sale by BRV Capital and end of the lock up period.
We believe that HD Hyundai Marine Solution’s share price has surged above its intrinsic value. More insiders are likely to start selling HD Hyundai Marine Solution in the coming months.

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May 14

Daily Brief Macro: Steno Signals #99 – Freddie Mac gearing up to unleash trillions for consumption? and more

By Smartkarma Daily Briefs | Daily Briefs, Macro

In today’s briefing:

Steno Signals #99 – Freddie Mac gearing up to unleash trillions for consumption?
Future US Productivity Growth: Crucial for Disinflation, Fed Policy Conduct, and Corporate Profits
The Week At A Glance: It’s getting hot in here! CPI week..
Investors Flock Back Into Commodity Funds & New Cocoa Narrative
The CrossASEAN Week That Was in ASEAN@Smartkarma – GoTo Transformed, Sido Muncul, and Great Eastern
US Politics: Taking Trump At His Word
Viktor Shvets on How the Fed Has Become a Prisoner of Its Own Making
India CPI Inflation 4.83% y-o-y (consensus 4.8%) in Apr-24
Indonesia Economics: Steady Growth Due to Public Spending Expansion
Regional Economics: Reduced Trade Diversification Implies New Economic Strategies

Steno Signals #99 – Freddie Mac gearing up to unleash trillions for consumption?

By Andreas Steno

Last week we learned that the so-called “excess savings pool” from the pandemic had vanished into thin air in the US, or rather that personal savings have been running sub-trend long enough to bring savings back to a normalized state.
This does not mean that US households have run out of savings, it merely means that savings rates are running below trend, which is not out of the ordinary during late-cycle economies.
We have recreated the study on German numbers and found much less “alarming” trends in German households, which goes to show that the methodology developed by the San Fran Fed ought to be taken with a pinch, if not even a truckload, of salt.

Future US Productivity Growth: Crucial for Disinflation, Fed Policy Conduct, and Corporate Profits

By Said Desaque

The period of easy US monetary policy after the global financial crisis did not produce excessive private investment in the real economy, while financial markets became the major beneficiaries.
US productivity growth has persistently struggled to replicate the impressive performance witnessed during the late-1990s, thereby forcing companies to raise selling prices in the post-pandemic environment to preserve operating margins.
The recent stalling of the US disinflationary process may reflect the continuation of disappointing productivity growth as firms continue are still relying on price rise to preserve profit margins.

The Week At A Glance: It’s getting hot in here! CPI week..

By Andreas Steno

Welcome to the weekly “The week at a glance” publication where we look at the key figures during the week ahead and how to trade them.
We have already been banging the drum on the upside risks to the US CPI, but the risk picture is also tilted in a hawkish direction for GBP and SEK rates over the next week.
Meanwhile, we expect China to surprise negatively, which once again puts the spotlight on the USD/CNY fixing.

Investors Flock Back Into Commodity Funds & New Cocoa Narrative

By The Commodity Report

Investors Flock Back Into Commodity Funds Investors are increasingly flocking to commodity funds again.
A net €353 million flowed into funds from the Morningstar Broad Basket Commodities category in Europe in April.
This was by far the best month for the category in over two years.

The CrossASEAN Week That Was in ASEAN@Smartkarma – GoTo Transformed, Sido Muncul, and Great Eastern

By Angus Mackintosh

The past week saw insights on GoTo Gojek Tokopedia (GOTO IJ), Sido Muncul (SIDO IJ), Great Eastern Holdings (GE SP), Singapore Airlines (SIA SP), and Lippo Malls Indonesia Retail Trust.
There were also macro insights on Malaysia, the Philippines, and Singapore, and the latest CrossASEAN Ground Zero insight on the digital economy and other ASEAN themes.
The Week That Was in ASEAN@Smartkarma is filled with an eclectic mix of differentiated, substantive, and actionable insights, macro and equity bottom-up, from across Southeast Asia.

US Politics: Taking Trump At His Word

By Alastair Newton

Donald Trump may return to the White House in 2025 with a potentially damaging agenda for Europe.
This agenda could have significant economic and political implications for Europe.
Europeans are advised to pay closer attention to Trump’s speeches and take his words seriously.

Viktor Shvets on How the Fed Has Become a Prisoner of Its Own Making

By Odd Lots

Bloomberg Audio Studios podcasts offer news and analysis on various topics
Discussion on FOMC presser and Fed’s reaction to inflation and interest rates
Impact of US economy on global markets and the role of central banks explained by strategist Victor Schwetz

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

India CPI Inflation 4.83% y-o-y (consensus 4.8%) in Apr-24

By Heteronomics AI

India’s CPI inflation in April 2024 was 4.83% y-o-y, consistent with expectations and the previous month’s rate.
This rate represents the lowest inflation since May 2023.
The current inflation rate is below both the one-year average and long-run average, potentially impacting economic policies and decisions.

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

Indonesia Economics: Steady Growth Due to Public Spending Expansion

By Manu Bhaskaran

Indonesia’s 5.1% growth in 1Q24 was underpinned by a larger contribution by public expenditures due to election financing and state-led capital projects
Net exports, however, entered contraction as the economy’s reliance on commodities and China as an export market start to take their toll.
Even if headline growth remains stable for the year, the downside risks from a muted trade outlook and domestic policy uncertainty warrant caution.

Regional Economics: Reduced Trade Diversification Implies New Economic Strategies

By Manu Bhaskaran

Asian exports have become more concentrated in the past decade, both in terms of a narrower set of export partners, as well as lower levels of diversification of export products.
While some of this concentration is driven by benign factors, reduced trade diversification comes with key risks that have become more salient in the current geopolitical environment.
Government strategies in the region are underway to remedy some of the downsides, and this will be a key component in the broader trend of supply-chain realignments in the region.

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May 14

Daily Brief Crypto: Crypto Crisp: Your Move and more

By Smartkarma Daily Briefs | Crypto, Daily Briefs

In today’s briefing:

Crypto Crisp: Your Move, Gary Gensler

Crypto Crisp: Your Move, Gary Gensler

By Mads Eberhardt

We have entered the week before the U.S. Securities and Exchange Commission (SEC) must decide on VanEck’s Ethereum spot ETF application, with a decision due next Thursday, May 23.
It is expected that the outcome for this application will set a precedent for all the other Ethereum ETF applications.
This issue of Crypto Crisp focuses extensively on the Ethereum spot ETF.

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May 14

Most Read: Great Eastern Holdings, JD.com , ESR Group , I’Rom Group, Aozora Bank Ltd, Toppan Printing, Taiwan Semiconductor (TSMC), Softbank Group, Shinva Medical Instrument A and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

Great Eastern (GE SP): OCBC’s S$25.60 Unconditional Offer
HSTECH Index Rebalance Preview: Round-Trip Trade of US$2.4bn in June
ESR Group (1821 HK): Offer Musings
ESR Group (1821 HK): Starwood Capital and SSW Partners Gauging a Privatisation Bid
Blackstone to Take I’rom (2372 JP) Private in MBO at ¥2800/Share (49% Premium)
Aozora (8304) – Daiwa Securities Group (8601) Tie-Up – Daiwa To Buy 15+%
Toppan Printing (7911) Accelerates Buyback Pace and Amount; But Crossholder Sales Lurk
TSMC Surges As April Revenue Soars 60% YoY
Softbank (9984 JP): Has Group NAV Peaked?
CSI Medical Service Index Rebalance Preview: Repeat of the December Rebal Could See Big Gains

Great Eastern (GE SP): OCBC’s S$25.60 Unconditional Offer

OCBC (OCBC SP) has made a voluntary unconditional general Offer for the 11.56% in Great Eastern Holdings (GE SP) not held.
The S$25.60 cash Offer for the life/non-life insurer is a 36.9% premium to last close; and a 30% discount to its S$36.59/share embedded value (as at 31st Dec 2023).
The Offer is unconditional in all respects. This will trade tight. A delisting Offer is next on the cards.

HSTECH Index Rebalance Preview: Round-Trip Trade of US$2.4bn in June

We do not forecast any constituent changes for the Hang Seng TECH Index (HSTECH INDEX) in June but there could be capping changes for 7 stocks.
Capping changes will result in a one-way turnover of 7.6% leading to a round-trip trade of US$2.4bn. 17 stocks will have over 0.5x ADV to trade from passive trackers.
Li Auto (2015 HK) will have the largest inflow while there will be big outflows from Meituan (3690 HK), Xiaomi Corp (1810 HK), JD.com (9618 HK) and Tencent (700 HK).

ESR Group (1821 HK): Offer Musings

Back in February this year, various media sources reported that the key shareholders of warehouse/fund management play ESR Group (1821 HK), were exploring options, including a privatisation.
Long-Term holders Warburg Pincus and Canadian pension fund OMERS hold 14% and 10.7% respectively. ESR co-founders/directors Jeffrey Shen, Stuart Gibson, Charles de Portes, and Hwee Chiang collectively hold another ~23%.
Shares in ESR were suspended this morning “pursuant to the Hong Kong Code on Takeovers and Mergers“.

ESR Group (1821 HK): Starwood Capital and SSW Partners Gauging a Privatisation Bid

ESR Group (1821 HK) is on a trading halt. Press reports suggest a consortium featuring Starwood Capital Group and SSW Partners is considering a buyout.
Starwood and SSW are approaching other shareholders to join the consortium. The other members are likely Warburg Pincus, OMERS, Jinchu Shen, and Hwee Chiang Lim.
The offer is likely to be structured as a Cayman privatisation scheme. Our best guess is that an offer of at least HK$14.00 per share would be needed.

Blackstone to Take I’rom (2372 JP) Private in MBO at ¥2800/Share (49% Premium)

Today SMO and CRO operator I’Rom Group (2372 JP) announced an MBO where Blackstone would be the sponsor.
From outward appearances, it would seem to be an estate management exercise. It’s not particularly rich as a bid, but it isn’t awful.
I expect this gets done as Mori-san and family and friends appear to have 58% going in. Expected to start in June.

Aozora (8304) – Daiwa Securities Group (8601) Tie-Up – Daiwa To Buy 15+%

Pre-Open on February 1 2024, Aozora Bank Ltd (8304 JP) announced writedowns and a forecast revision, lowering full-year net profit expectations from +¥24bn to -¥28bn.
Shares which had been trading relatively richly (and heavily shorted) fell sharply over the following days, then noted activist Murakami-san started buying in. Then he bought more and went silent.
Today, Aozora reported full-year earnings – much worse than expected and Mar25 guidance lower than already low Street estimates. And they are selling 15% stake to Daiwa Securities Group. Oof!

Toppan Printing (7911) Accelerates Buyback Pace and Amount; But Crossholder Sales Lurk

Toppan Printing (7911 JP) established a new Medium-Term Management Plan with targets in May 2023. 8% ROE, PBR >1.0x. More DX business. More management modernisation. More ESG. Mooooarrrrr!
They also promised capital measures: ¥100bn of buybacks over three years. Total shareholder return of 50%+ over three years. More progress in selling down cross-holdings.
Today the company reported better-than expected full-year revenues, OP, and Net Profit, added more to the buybacks, and shortened the buyback period to two years. Details matter.

TSMC Surges As April Revenue Soars 60% YoY

By William Keating

April revenue ~NT$236.02 billion, +20.9% MoM & + 59.6% YoY
It was the company’s second highest monthly revenue ever, made all the more remarkable by the fact that it occurred during its seasonally low first half year
Our April YoY Taiwan monthly revenue comps are flashing green across the board with just one exception, Globalwafers

Softbank (9984 JP): Has Group NAV Peaked?

By Victor Galliano

Arm’s valuation has driven the group NAV to a new high at fiscal year-end in March; with Arm accounting for 45% of group equity value, NAV downside risk is high
JPY depreciation has been NAV supportive, but this could reverse; SVF2 remains very exposed to financing costs, with 87% of its equity value in private companies
Softbank shares trade at a 57% discount to the estimated NAV; yet the downside risks to Arm’s valuation, along with SVF2 valuation headwinds, should keep the discount wide

CSI Medical Service Index Rebalance Preview: Repeat of the December Rebal Could See Big Gains

The review period ended on 30 April, there are just over 2 weeks to announcement of the changes, and implementation will be done at the close on 14 June.
We forecast 5 potential changes for the index in June where there could be buying of 1.6-2.6x ADV on the adds and selling of 0.7-2.6x ADV on the deletes.
At the December 2023 rebalance, the adds outperformed the deletes in the weeks prior to announcement of the changes and then spiked post-announcement. Repeat this time?

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May 14

Daily Brief Industrials: Toppan Printing, Innospace, SCREEN Holdings, Breton Technology, CBAK Energy Technology , Verisk Analytics, Virco Mfg. and more

By Smartkarma Daily Briefs | Daily Briefs, Industrials

In today’s briefing:

Toppan Printing (7911) Accelerates Buyback Pace and Amount; But Crossholder Sales Lurk
Innospace IPO Valuation Analysis
Screen Holdings (7735 JP): Guiding for Lower Profits in H2
Breton Technology Pre-IPO Tearsheet
CBAT: Reports strong margins and improved outlook for 2024. Increasing our EPS estimates and target valuation to 2.50.
Verisk Analytics Inc.: Capitalizing on the Catastrophe Bond Market! – Major Drivers
Virco Mfg. Corp (VIRC) – Sunday, Feb 11, 2024

Toppan Printing (7911) Accelerates Buyback Pace and Amount; But Crossholder Sales Lurk

Toppan Printing (7911 JP) established a new Medium-Term Management Plan with targets in May 2023. 8% ROE, PBR >1.0x. More DX business. More management modernisation. More ESG. Mooooarrrrr!
They also promised capital measures: ¥100bn of buybacks over three years. Total shareholder return of 50%+ over three years. More progress in selling down cross-holdings.
Today the company reported better-than expected full-year revenues, OP, and Net Profit, added more to the buybacks, and shortened the buyback period to two years. Details matter.

Innospace IPO Valuation Analysis

By Douglas Kim

Our base case valuation of Innospace is target price of 51,481 won per share (12 month view), which is 28% higher than the midpoint of the IPO valuation range.
We estimate Innospace to generate sales of 1.8 billion won in 2024, 28.7 billion won in 2025, and 58.3 billion won in 2026.
Innospace is involved in the satellite launch vehicle production and launch service business.

Screen Holdings (7735 JP): Guiding for Lower Profits in H2

By Scott Foster

FY Mar-24 results were ahead of guidance, but management’s FY Mar-25 forecast has sales flat and profits down in the second half.
The shares have dropped back 24% from their all-time high, bringing the forward P/E ratio down to 22X.
China and foundry remain strong while North America and memory pick up. Guidance is probably conservative. Buy into the weakness.

Breton Technology Pre-IPO Tearsheet

By Ethan Aw

Breton Technology (1884270D CH) is looking to raise up to US$200m in its upcoming HK IPO. The deal will be run by CICC and CMB International.
Breton Technology is a clean energy solution provider in China, focusing on the design, development and commercialization of engineering machinery powered by new energy sources.
Such engineering machinery includes battery-electric loaders and wide-body dump trucks, each offering a variety of payload and battery capacities.

CBAT: Reports strong margins and improved outlook for 2024. Increasing our EPS estimates and target valuation to 2.50.

By Zacks Small Cap Research

CBAK Energy Technology is poised to benefit from a sharp uptick in portable energy systems and home energy storage.
Despite pricing pressures in the industry, CBAK’s strong relationships with key customers and solid safety record enabled has enabled it to retain pricing power which boosted battery margins significantly in the first quarter as raw material continued to fall.
As investors begin to focus on the growing and profitable battery business, we believe there is substantial upside for the stock which is now trading at just over 3 times our 2024 EPS estimate.

Verisk Analytics Inc.: Capitalizing on the Catastrophe Bond Market! – Major Drivers

In the first quarter 2024, Verisk Analytics, Inc. reported solid performance with organic constant currency revenue growth of 6.9%, driven partially by broad-based subscription growth of 7.8% across most of its businesses.
The result was aligned with guidance for 2024 and highlighted the company’s efforts to evolve into an integrated insurance-focused enterprise.
CEO Lee Shavel stated that Verisk is driving predictable and consistent growth by partnering with the insurance ecosystem to address their major challenges.

Virco Mfg. Corp (VIRC) – Sunday, Feb 11, 2024

Late 90s/early 00’s had stock volatility based on undisclosed news, while recent market movements show stocks moving significantly without any news
Example of stock Virco dropping 18% with no news and high trading volume, despite company having positive financial indicators
Virco has small outstanding share count, manageable net debt, and attractive valuation multiples based on estimated future earnings

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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May 14

Daily Brief Energy/Materials: EcoPro Materials, John Wood, Wheaton Precious Metals, Martin Marietta Materials, Vitesse Energy and more

By Smartkarma Daily Briefs | Daily Briefs, Energy & Materials Sector

In today’s briefing:

A Comparison Between Ecopro Materials & HD Hyundai Marine Solution Post IPO
Sidara/John Wood: Awaiting a Sweetened Offer
Wheaton Precious Metals – A strong start to FY24
Martin Marietta Materials: Growth Prospects Amidst U.S. Infrastructure Spending Surge! – Major Drivers
Vitesse Energy, Inc. – Execution Drives 5% Dividend Boost

A Comparison Between Ecopro Materials & HD Hyundai Marine Solution Post IPO

By Douglas Kim

In this insight, we make comparisons between EcoPro Materials (450080 KS) and HD Hyundai Marine Solution (443060 KS) post their IPOs
Ecopro Materials’ share price is likely to face continued weakness, especially with the potential for a major block deal sale by BRV Capital and end of the lock up period.
We believe that HD Hyundai Marine Solution’s share price has surged above its intrinsic value. More insiders are likely to start selling HD Hyundai Marine Solution in the coming months.

Sidara/John Wood: Awaiting a Sweetened Offer

By Jesus Rodriguez Aguilar

On 12 May, The Times reported that Sidara was planning to make a higher bid for Wood after its initial offer was turned down by the company last week.
This proposal was unsolicited and conditional. Premium is 30%, implied equity value £1,418 million (c.$1.775 million), implied EV £2,508 million; 5.3x EV/Fwd NTM EBITDA. Sidara recognizes value.
Shares are trading at a lower spread than at the time of Apollo’s 240p proposal. Nevertheless, without a significant sweetening, the likelihood of a deal seems relatively low.

Wheaton Precious Metals – A strong start to FY24

By Edison Investment Research

Wheaton’s (WPM’s) Q124 results exceeded both our and the market’s forecasts. It produced more (with the single exception of gold, which recorded a small negative variance in production) and sold more at higher prices than our prior expectations for the period. This led to a positive 5.6% (US$15.8m) variance in sales that was minimally counteracted by a US$0.8m negative variance in costs (including G&A costs) to result in a US$15.3m (10.3%) positive variance in pre-tax profits that, to all intents and purposes, fell straight through to the bottom line.

Martin Marietta Materials: Growth Prospects Amidst U.S. Infrastructure Spending Surge! – Major Drivers

The Q1 2024 earnings for Martin Marietta showed some level of optimism for the company’s growth prospects, though the transcript also raises some potential concerns.
Mr.
Ward Nye, the CEO, highlighted various positive aspects including steady product demand, favorable commercial dynamics, and recent transactions aimed at optimizing the company’s portfolio.

Vitesse Energy, Inc. – Execution Drives 5% Dividend Boost

By Water Tower Research

Vitesse increased its 2Q24 quarterly dividend 5% to $0.525, reflecting a strong production outlook driven by the execution of management’s strategy to grow the asset base with near-term development acquisitions and organic growth projects that surpass its economic hurdle rates. The current yield is 8.7%.
Vitesse’s business philosophy is built on the premise of compounding cash invested in oil-oriented producing assets in the Bakken play to sustain and grow the asset base in a fiscally conservative manner to support a fixed dividend.
Management’s capital allocation framework revolves around returning cash to shareholders through the dividend policy.

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May 14

Daily Brief TMT/Internet: Taiwan Semiconductor (TSMC), Softbank Group, Asustek Computer, ASE Technology Holding , Ubiquiti Inc., Immersion Corporation, WM Technology , MoneyHero , ZoomInfo Technologies , Automatic Data Processing and more

By Smartkarma Daily Briefs | Daily Briefs, TMT/Internet

In today’s briefing:

TSMC Surges As April Revenue Soars 60% YoY
Softbank (9984 JP): Has Group NAV Peaked?
Asustek: Margin Beat, Guides More Upside; Qualcomm for AI PCs; Why Asus Confident in AI PC Up-Cycle
Tech Supply Chain Tracker (14-May-2024): ASE to speed up 2H24 sales growth.
UI: Signs of a Rebound
Immersion Corp (IMMR) – Sunday, Feb 11, 2024
Wm Technology Inc (MAPS) – Sunday, Feb 11, 2024
MoneyHero – Money saver in South-East Asia
Zoominfo Techno Inc (ZI) – Tuesday, Feb 13, 2024
Automatic Data Processing (ADP): Investments in Gen AI for Improving Service and Sales Efficiency! – Major Drivers

TSMC Surges As April Revenue Soars 60% YoY

By William Keating

April revenue ~NT$236.02 billion, +20.9% MoM & + 59.6% YoY
It was the company’s second highest monthly revenue ever, made all the more remarkable by the fact that it occurred during its seasonally low first half year
Our April YoY Taiwan monthly revenue comps are flashing green across the board with just one exception, Globalwafers

Softbank (9984 JP): Has Group NAV Peaked?

By Victor Galliano

Arm’s valuation has driven the group NAV to a new high at fiscal year-end in March; with Arm accounting for 45% of group equity value, NAV downside risk is high
JPY depreciation has been NAV supportive, but this could reverse; SVF2 remains very exposed to financing costs, with 87% of its equity value in private companies
Softbank shares trade at a 57% discount to the estimated NAV; yet the downside risks to Arm’s valuation, along with SVF2 valuation headwinds, should keep the discount wide

Asustek: Margin Beat, Guides More Upside; Qualcomm for AI PCs; Why Asus Confident in AI PC Up-Cycle

By Vincent Fernando, CFA

Asus’s 1Q24 earnings beat consensus by 46% thanks to major increase in operating margin driven by costs optimization. Adjusted Asus brand Op profit rose 227% YoY and 98% QoQ.
Asus will host a major AI PC launch event May 21st, with additional AI PCs launched at Computex in Taiwan June 4th. Will feature Qualcomm Inc (QCOM US) Snapdragon processors.
Asus confident in an PC upgrade cycle and has guided for sales to rise and margins to expand in the coming quarters. We maintain our Structural Long rating for Asus.

Tech Supply Chain Tracker (14-May-2024): ASE to speed up 2H24 sales growth.

By Tech Supply Chain Tracker

ASE plans to boost sales in the second half of 2024 with cutting-edge technology and innovative solutions. Introspect CEO discusses how their GDDR7 memory test system outperforms competitors, helping customers stay ahead of the curve.
Taiwan’s space dreams face hurdles from regulations and geopolitics, hindering progress. N Chandrasekaran becomes chair of Tata Electronics, signaling entry into semiconductor industry. Indian GaN startup targets global expansion in telecom and EV markets for growth.
Triton ignites Taiwan’s push for satellite self-sufficiency; Apple partnership speculation with a leading EV startup generates buzz. Lam Research seeks chipmaking tool partners in India to drive innovation and collaboration. #Apple #EVstartup #newsroundup

UI: Signs of a Rebound

By Hamed Khorsand

UI reported fiscal third quarter (March) results in line with our revenue forecasts suggesting the business could be on the rebound after two years in a challenging environment
The performance in the June quarter comes even though peers have been reporting a tough selling environment with extended sales process as customers took time to make their decision
The increase in product availability did backfire in the quarter with Ubiquiti taking a charge for obsolete inventory. Nevertheless, Ubiquiti’s results show a business that is improving

Immersion Corp (IMMR) – Sunday, Feb 11, 2024

Immersion Corp. is a high-margin licensing business with no debt and significant cash reserves
Recent settlement with Meta in patent lawsuit could exceed company’s current enterprise value
Previous settlements with Apple resulted in significant increase in Immersion’s share price, potential upside not fully reflected in current share price due to limited access to court documents, presenting possible investment opportunity

Wm Technology Inc (MAPS) – Sunday, Feb 11, 2024

Choking off investment is leading to undervaluation of companies like MAPS in the cannabis sector
MAPS has a dominant position in the market with a strong brand and large user base
MAPS presents a compelling investment opportunity with potential upside due to its low valuation and ability to capitalize on evolving industry trends and regulations

MoneyHero – Money saver in South-East Asia

By Edison Investment Research

MoneyHero is a leading South-East Asian personal finance aggregator and comparison platform, covering the full suite of personal finance products. Its goal is to educate and empower consumers on personal finance through engaging content and rewards on financial products. The company partners with leading local and global financial institutions to ensure it has the most attractive products and offers for its user base. Management has ambitious plans to grow market share and attractive product verticals, such as insurance. Having raised c $87m in net proceeds from a deSPAC transaction in October 2023, the company paid down all debt and had a net cash position of $68.6m at end FY23, meaning it is well capitalised to fund the acceleration in growth.

Zoominfo Techno Inc (ZI) – Tuesday, Feb 13, 2024

Zoominfo’s stock rose by 24% after hours following positive earnings, attributed to its unique database and high ROI for salespeople
Challenges such as decelerating sales, shrinkage in the software sector, and competition from copycat companies have impacted Zoominfo’s growth
The company is looking to bounce back and derisk its story for investors with a strong data offering

Automatic Data Processing (ADP): Investments in Gen AI for Improving Service and Sales Efficiency! – Major Drivers

The latest earnings for Automatic Data Processing (ADP) saw a robust performance of the company’s third quarter fiscal performance for the year 2024.
Two key figures stood out in the discussion, a 7% revenue growth and a 14% adjusted diluted EPS growth, indicating a solid financial performance despite a competitive business environment.
Positively, the company achieved strong Employer Services (ES) new business bookings growth, achieving record bookings for the Q3 period, which keeps the company on track for its full-year outlook.

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May 14

Daily Brief Health Care: I’Rom Group, Shinva Medical Instrument A, Olympus Corp, China National Medicines A, Shofu Inc, GSK , Achieve Life Sciences , Aethlon Medical , IDEXX Laboratories and more

By Smartkarma Daily Briefs | Daily Briefs, Healthcare

In today’s briefing:

Blackstone to Take I’rom (2372 JP) Private in MBO at ¥2800/Share (49% Premium)
CSI Medical Service Index Rebalance Preview: Repeat of the December Rebal Could See Big Gains
I’rom Group (2372 JP): Blackstone-Sponsored Pre-Conditional MBO at JPY2,800
Olympus Corp (7733 JP): ¥100B Buyback Plan Offers an Attractive Exit Opportunity Amid Bleak Outlook
China National Medicines (600511.CH) – After Restructuring, Performance Growth Is Guaranteed
Shofu (7979 JP) – A Compounding Franchise Business Stepping up a Gear
GlaxoSmithKline plc: Will Its Ongoing Investment In Oncology & Vaccines Pay Off? – Major Drivers
ACHV: First Quarter Results
The in vitro testing examined the removal of EVs directly from plasma & was reviewed and examined by an independent 3rd party commercial lab & by NAMSA
IDEXX Laboratories: Fusion Of Innovation & Service Excellence In Veterinary Diagnostics! – Major Drivers

Blackstone to Take I’rom (2372 JP) Private in MBO at ¥2800/Share (49% Premium)

Today SMO and CRO operator I’Rom Group (2372 JP) announced an MBO where Blackstone would be the sponsor.
From outward appearances, it would seem to be an estate management exercise. It’s not particularly rich as a bid, but it isn’t awful.
I expect this gets done as Mori-san and family and friends appear to have 58% going in. Expected to start in June.

CSI Medical Service Index Rebalance Preview: Repeat of the December Rebal Could See Big Gains

The review period ended on 30 April, there are just over 2 weeks to announcement of the changes, and implementation will be done at the close on 14 June.
We forecast 5 potential changes for the index in June where there could be buying of 1.6-2.6x ADV on the adds and selling of 0.7-2.6x ADV on the deletes.
At the December 2023 rebalance, the adds outperformed the deletes in the weeks prior to announcement of the changes and then spiked post-announcement. Repeat this time?

I’rom Group (2372 JP): Blackstone-Sponsored Pre-Conditional MBO at JPY2,800

I’Rom Group (2372 JP) recommended a Blackstone (BX US)-sponsored pre-conditional MBO at JPY2,800, a 49.5% premium to the undisturbed price.
Approvals under the competition laws of Japan and Australia are a precondition. The tender offer is expected to start in mid-June.
The offer is attractive and requires a 37% minority acceptance rate. While the timing of regulatory approvals is a risk, the transaction is a done deal.

Olympus Corp (7733 JP): ¥100B Buyback Plan Offers an Attractive Exit Opportunity Amid Bleak Outlook

By Tina Banerjee

Olympus Corp (7733 JP) has announced a buyback plan for up to 60M shares, representing 5.15% of outstanding shares, by spending ¥100B from May 13 to December 31, 2024.
The company has posted mixed FY24 results, with revenue beating and operating and net profits missing guidance. Olympus has guided for just 9% revenue growth for FY25.
Overall business outlook of the company seems to be bleak. With limited upside potential expected, it will be wise to tender shares through the company’s buyback offer.

China National Medicines (600511.CH) – After Restructuring, Performance Growth Is Guaranteed

By Xinyao (Criss) Wang

The “Entrusted Management Agreement” indicates that horizontal competition issue will be completely solved within three years.This could pave the way for a future merger between Guorui and Shanghai Shyndec Pharmaceutical.
The spin-off of Guorui won’t have material impact on China National Medicines Corporation (CNMC). After restructuring, CNMC will focus on “Beijing area pharmaceutical distribution + nationwide distribution of anesthesia/psychotropic drugs”.
Based on strong/stable fundamentals as well as the dominant position in anesthesia and psychotropic drug business, CNMC’s future growth potential is promising. We share our views on the Company’s valuation.

Shofu (7979 JP) – A Compounding Franchise Business Stepping up a Gear

By Astris Advisory Japan

Demonstrating solid execution – Q1-4 FY3/24 results were ahead of company guidance, with Shofu demonstrating solid execution of its strategic initiative for overseas expansion and sales mix improvement.
By delivering sustained double-digit sales and earnings growth with record-high profitability, we believe the outlook remains positive for the medium to longer term with production capacity increases being a major theme of the company’s new medium-term plan.
Whilst working capital requirements and capital intensity will rise, we believe this will result in Shofu reaching its target of ¥50bn annual sales with an enduring model for shareholder value generation.

GlaxoSmithKline plc: Will Its Ongoing Investment In Oncology & Vaccines Pay Off? – Major Drivers

GlaxoSmithKline demonstrated robust quarterly performance, continuing its commitment to creating long-term value for its stakeholders.
The company managed to deliver double-digit growth for the quarter, with sales increasing by 13% to GBP 7.4 billion, core operating profit going up by 35% to GBP 2.4 billion, and core earnings per share increasing by 37%.
Underpinning GlaxoSmithKline’s solid financial results is the successful launch and strong delivery of its new products, reflecting the company’s ability to continue growing and innovating in the highly competitive pharmaceutical industry.

ACHV: First Quarter Results

By Zacks Small Cap Research

Achieve Life Sciences is developing cytisinicline for use as a smoking cessation treatment in the United States and rest of world.
Topline results from ORCA-2 were reported in April 2022 and for ORCA-3 in May 2023.
Results exceeded expectations on safety & efficacy parameters.

The in vitro testing examined the removal of EVs directly from plasma & was reviewed and examined by an independent 3rd party commercial lab & by NAMSA

By Zacks Small Cap Research

The in vitro testing examined the removal of EVs directly from plasma & was reviewed and examined by an independent 3rd party commercial lab & by NAMSA, AEMD’s CRO for its planned Australian oncology study.
The data is a critical element enabling the company to move the Hemopurifier forward in clinical oncology studies towards potential regulatory approval and commercialization.
The next step is for AEMD to add the data to its Clinical Investigator Brochure, which it will then submit to the Ethics Committees at clinical sites interested in participating in the planned trials in Australia and India.

IDEXX Laboratories: Fusion Of Innovation & Service Excellence In Veterinary Diagnostics! – Major Drivers