Smartkarma Daily Briefs

Shandong Xinjufeng Technology Packaging (301296 CH) disclosed a pre-conditional voluntary offer for Greatview Aseptic Packaging (468 HK) at HK$2.65, a 26.2% premium to the undisturbed price.
The pre-condition relates to Chinese regulatory approvals and Shandong Xinjufeng shareholder approval. The offer is conditional on a 50% minimum acceptance condition.
Shandong Xinjufeng’s previous acquisition of Jardine Matheson’s 28.22% stake elicited a defensive move by China Mengniu Dairy Co (2319 HK). This development is likely to force a Mengniu competing VGO.

HEC CJ Pharma (1558 HK): Pre-Conditional Share Exchange Offer from Largest Shareholder

Yichang HEC Changjiang Pharma (1558 HK)‘s pre-conditional privatisation from Sunshine Lake Pharma comprises scrip (0.263614 new offeror H Share per HEC CJ Pharma share) and cash (special dividend of HK$1.5).
The pre-condition is regulatory approvals from NDRC, MOFCOM, and SAFE. The key condition is approval by at least 75% of independent H Shareholders (<10% of all independent H Shareholders rejection).
There is valuation uncertainty as the offeror is unlisted, and its valuation hinges on pipeline products. Nevertheless, with no shareholder close to a blocking stake, the deal should get up.

Weekly Deals Digest (12 May) – China TCM, GA Pack, HEC CJ Pharma, CPMC, Alps Logistics, Infocom

A weekly summary of key developments across ECM and Event-Driven names tracked by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Thailand, Korea, India and Chinese ADRs.
ECM developments: HD Hyundai Marine Solution (443060 KS) and ZEEKR (ZK US) have strong IPO debuts.
Event-Driven developments China Traditional Chinese Medicine (570 HK), Greatview Aseptic Packaging (468 HK), Yichang HEC Changjiang Pharma (1558 HK), CPMC Holdings (906 HK), Alps Logistics (9055 JP), Infocom Corp (4348 JP).

(Mostly) Asia-Pac M&A: Namoi Cotton, Great Eastern, GAPack, Nihon, Chilled & Frozen, Shinko Electric

Tally 49 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal.
Six(!) new deals was discussed on Smartkarma this week: Perpetual (PPT AU), Alps Logistics (9055 JP), Namoi Cotton (NAM AU)‘; Great Eastern (GE SP); Nihon Housing (4781 JP) and GAPack (468 HK)‘.
Key updates took place on: QANTM Intellectual Property (QIP AU), Adbri (ABC AU), L’Occitane (973 HK), Chilled & Frozen Logistics Holdings (9099 JP), and Shinko Electric Industries (6967 JP).

HK Connect SOUTHBOUND Flows (To 10 May 2024); Banks, Coal, and High-Div Energy/Materials Names

By Travis Lundy

A-Shares only two days of the week and were up small Monday and Tuesday. H-shares took a breather Wednesday after trailing A-shares, then rallied hard on Thursday and Friday.
Net SOUTHBOUND buying was +HK11.3bn. Thursday saw a break of the SOUTHBOUND buying streak.
The big news in China markets this week was the idea that mainland investors through SOUTHBOUND would no longer be hit with a 20% w/h tax on dividends.

Cosmecca Korea Plans to Switch Listing from KOSDAQ to KOSPI

By Douglas Kim

On 10 May, Cosmecca Korea (241710 KS) announced that it plans to switch its listing from KOSDAQ to KOSPI.
The company plans to convene an extraordinary general meeting of shareholders on 29 August to finalize on the switching of Cosmecca Korea listing from KOSDAQ to KOSPI.
Cosmecca Korea is one of the leading Korean ODM manufacturers of cosmetic products.

Last Week in Event SPACE: Alps Logistics, L’Occitane, Hanon Systems, Perpetual Ltd

KKR’s Offer for Alps Logistics (9055 JP) is a knock-out price. HUGE MINORITY WIN. This trades a little wide because the “gap risk” is so large, but it’s still safe.
It’s reasonable to expect the listing of various components of L’Occitane (973 HK) other than in HK, would (should) be hugely accretive; for those investors who can (or may) participate.
Hankook Tire & Technology (161390 KS) seeks a controlling stake in Hanon Systems (018880 KS).

Quiddity Leaderboard NIFTY Sep 24: Strong Flow Rationale for LONG Jio Financial – SHORT SBI Cards

By Janaghan Jeyakumar, CFA

NIFTY 50 represents the 50 largest stocks listed in the National Stock Exchange (NSE) of India and the NIFTY Next 50 index tracks the next 50 largest names.
In this insight, we take a look at the names leading the race to become ADDs/DELs during the September 2024 index rebal event.
More than 50% of the 6-month reference period is now complete. There are a couple of changes to the expected ADDs/DELs list since my last insight.

Underexposed Flow Trading Opportunity: LONG Banks & SHORT LG Chem/Energy on June 14

By Sanghyun Park

Despite time until screening, predictions likely hold due to market cap gaps; all candidates are banks, benefiting from recent momentum.
Historical patterns show profit-taking selling affecting price impact, particularly on additions with significant pre-inclusion price rises. Monitor banks’ pre-June 14th price appreciation to anticipate impact distortions.
Shorting LG Chem and LG Energy Solution based on high price cointegration, consider basket-trading them before the rebalancing, using the battery sector as a long hedge.

Mainland Connect NORTHBOUND Flows (To 10 May 2024): So-So Volumes, As Did Not Play Catchup

By Travis Lundy

The Quiddity Mainland Connect NORTHBOUND Monitor. Like the A/H Premium Monitor and HK Connect SOUTHBOUND Monitor. Lots of Flows/Position Tables and Charts with which to play.
Last week saw NORTHBOUND net BUY RMB 4.8bn of A-shares on high gross low net volume in the two days. NORTHBOUND bought Kweichow Moutai, banks, Haier Smarthome, etc.
HUGE week in H vs A (since the 30 April close). This may be colouring foreigner activity in As quite a bit.

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May 12

Daily Brief Macro: Overview #4 – Analysis of Chinese Travel Data Is on the Wrong Path. and more

By Smartkarma Daily Briefs | Daily Briefs, Macro

In today’s briefing:

Overview #4 – Analysis of Chinese Travel Data Is on the Wrong Path.

Overview #4 – Analysis of Chinese Travel Data Is on the Wrong Path.

By Rikki Malik

A weekly review of recent events impacting our investment themes
Changing consumer preferences impact the Chinese May day travel data
Cosnumers in the US and Japan face different issues with real incomes declining

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May 12

Daily Brief Equity Bottom-Up: Gravita India Ltd- Forensic Analysis and more

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

In today’s briefing:

Gravita India Ltd- Forensic Analysis
Sirius XM Holdings: Improving Conversion
Lear Corporation: Industrial Automation
Corning Incorporated: Are The Returns On Its Display Business Good Enough? – Major Drivers
Gartner Inc.: Increasing Interest In Artificial Intelligence (AI) & Its Expected Impact On The Top-Line! – Major Drivers
Eli Lilly & Co: The Story Behind The Increasing Demand vs. Production of Orforglipron & Progress of Other Drugs! – Major Drivers
Incyte Corporation: Can It Capitalize On The Potential For Expansion Into Dermatology? – Major Drivers
Ecolab Inc.: Leveraging Digital Capabilities For The Pest Elimination Business! – Major Drivers
Mastercard Incorporated: Cross-Border Travel and Consumer Behaviors Impact! – Major Drivers
Archer-Daniels-Midland Company: Strengthening Margins Through Operational Improvements & Renewable Production! – Major Drivers

Gravita India Ltd- Forensic Analysis

By Nitin Mangal

In FY24, Gravita India (GRAV IN) had faced qualified opinion from the auditors regarding its accounting pertaining to share based payments, which in a way boosted the earnings.
However, the unusual accounting behaviour is not for the company. We have seen some irregular line items in the past as well, w.r.t. gains and losses on commodities and forex.
Other key takeaways include negative free cash flows and difficulty in cash generation, revenues from traded goods not being in sync, fresh contingent liabilities, etc.

Sirius XM Holdings: Improving Conversion

SiriusXM Holdings Inc. delivered a strong financial performance for its first quarter of 2024, with an encouraging 7% year-over-year increase in advertising revenue to over $400 million.
This growth in ad revenue, driven by a growing addressable advertising audience and a strengthening ad market, helped offset a slight 1% drop in subscription revenue.
The firm’s adjusted EBITDA was up 4% year over-year and delivered a margin of 30%, up 1 percentage point from the previous year.

Lear Corporation: Industrial Automation

Lear Corporation’s record-setting first quarter revenues of $6 billion show an increase of 3%.
Core operating earnings were up 6% at $280 million, while adjusted earnings per share rose 14% to $3.18.
Operating cash flow matched that of the same period the previous year.

Corning Incorporated: Are The Returns On Its Display Business Good Enough? – Major Drivers

Based on the Q1 2024 earnings, Corning Incorporated appears to be in a position of growth and profitability.
With sales close to $3.3 billion and EPS of $0.38, the company exceeds its guidance predictions.
There was a year-over-year gross margin growth of 160 basis points to 36.8%, and a substantial improvement in free cash flow by $300 million.

Gartner Inc.: Increasing Interest In Artificial Intelligence (AI) & Its Expected Impact On The Top-Line! – Major Drivers

In Q1 2024, Gartner delivered strong profitability and free cash flow, which both surpassed expectations, leading the company to increase its guidance for the year.
The company proved its resilience in what’s described as a “complex environment”, with contract value growth in the high single digits.
However, there remain several challenges to face.

Eli Lilly & Co: The Story Behind The Increasing Demand vs. Production of Orforglipron & Progress of Other Drugs! – Major Drivers

In Q1 2024, Eli Lilly and Company achieved strong growth and strategic milestones, with revenue growing by 26% and new products increasing by nearly $1.8 billion in comparison to the same period last year.
The company’s new products, primarily Mounjaro and Zepbound, primarily drove the growth.
Eli Lilly also accomplished various pipeline milestones during this period.

Incyte Corporation: Can It Capitalize On The Potential For Expansion Into Dermatology? – Major Drivers

Incyte Corp’s first quarter 2024 earnings pointed towards the company’s steady performance during the quarter and provided an update on its ongoing projects.
The company’s total revenue grew by 9% in Q1 as compared to the same period last year, with growth driven largely by the drugs Jakafi and Opzelura.
In particular, Jakafi’s net product revenue was $572 million, not fully reflecting its demand growth due to an increase in total patients, particularly those with PV and GVHD. Similarly, Opzelura’s net product revenues in the first quarter were $86 million, indicating a 52% growth when compared to the same period last year.

Ecolab Inc.: Leveraging Digital Capabilities For The Pest Elimination Business! – Major Drivers

Ecolab Inc.’s first-quarter 2024 earnings showcased strong progress with adjusted earnings per share increasing by 52%.
This impressive outcome can be attributed to a 5% growth in organic sales and the expansion of organic operating income margin by 400 basis points.
The company is also expected to maintain its long-term earnings growth of 12% to 15%.

Mastercard Incorporated: Cross-Border Travel and Consumer Behaviors Impact! – Major Drivers

Mastercard Inc.’s Q1 2024 earnings showcased the company’s firm position in the payments sector, underpinned by robust revenue and adjusted net income growth on a non-GAAP, currency-neutral basis.
The company’s strong results go beyond the uptake in consumer spending, extending to the rapid growth in cross-border volumes.
There are several factors at play that make Mastercard attractive from an investment standpoint.

Archer-Daniels-Midland Company: Strengthening Margins Through Operational Improvements & Renewable Production! – Major Drivers

In its first quarter 2024, Archer-Daniels-Midland (ADM) reported adjusted earnings per share of USD1.46, and an adjusted segment operating profit of USD1.3bn, representing an on-year decrease of 24%.
ADM also achieved a trailing 4-quarter average of 11.2% for its adjusted Return on Invested Capital (ROIC) during the same quarter, while maintaining a strong balance sheet and healthy cash flows.
Although the global grain and oilseed supply is expected to increase throughout the year amid an anticipated improvement in weather conditions, ADM proactively managed the risk of falling margins by driving the structural earnings, ROIC, and cash flow generation, enabling the company to continue investing in its business and returning cash to its shareholders.

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May 12

Most Read: Fast Retailing, Deep Yellow Ltd, Shenyang Xingqi Pharmaceutical, Eoflow, Greatview Aseptic Packaging, Yichang HEC Changjiang Pharma, China Traditional Chinese Medicine, OCBC, Korea Stock Exchange KOSPI 200, Cosmecca Korea and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

Nikkei 225 Index Rebalance Preview (Sep 2024): Ranking, Capping, Funding & Other Changes
ASX200 Index Rebalance Preview: Potential Changes Prior to the June Rebalance
ChiNext/ChiNext50 Index Rebalance Preview: Outperformance Continues
Eoflow Announced that US Federal Court Has Decided to Suspend the Effect of 1st Injunction Decision
Greatview Aseptic (468 HK): Shandong Xinjufeng VGO Could Force Mengniu to Act
HEC CJ Pharma (1558 HK): Pre-Conditional Share Exchange Offer from Largest Shareholder
Weekly Deals Digest (12 May) – China TCM, GA Pack, HEC CJ Pharma, CPMC, Alps Logistics, Infocom
(Mostly) Asia-Pac M&A: Namoi Cotton, Great Eastern, GAPack, Nihon, Chilled & Frozen, Shinko Electric
EQD | KOSPI 200 Ready to Pullback
Cosmecca Korea Plans to Switch Listing from KOSDAQ to KOSPI

Nikkei 225 Index Rebalance Preview (Sep 2024): Ranking, Capping, Funding & Other Changes

By Brian Freitas

The review period for the Nikkei 225 (NKY INDEX) September rebalance ends in July. There could be three changes at the rebalance with sector balance in focus for the additions.
Depending on the changes, passive trackers will need to buy between 5-16x ADV (10.1%-24% of real float) on the inclusions and sell between 4-42x ADV on the deletions.
Fast Retailing (9983 JP) will be capped to 10% of the index weight while Tokyo Electron (8035 JP) is also close to the 10% cap.

ASX200 Index Rebalance Preview: Potential Changes Prior to the June Rebalance

By Brian Freitas

Seven Group Holdings (SVW AU)‘s holding in Boral Ltd (BLD AU) continues to increase and that could lead to an index change at the June rebalance, if not earlier.
The Silver Lake Resources (SLR AU)/ Red 5 Ltd (RED AU) merger could lead to an index change early June.
Cie De Saint-Gobain (SGO FP)‘s acquisition of CSR Ltd (CSR AU) could lead to another index change just ahead of the regular June rebalance.

ChiNext/ChiNext50 Index Rebalance Preview: Outperformance Continues

By Brian Freitas

With the review period now complete, we forecast 7 changes for the ChiNext Index (SZ399006 INDEX) and 5 changes for the ChiNext 50 Index in June.
There are 4 stocks that could be added to both indices while some stocks will also have same way flows from CSI Smallcap 500 Index (SH000905 INDEX) trackers.
The potential adds have outperformed the potential deletes over the last 6 months. There has been a big move higher in the potential adds over the last few weeks.

Eoflow Announced that US Federal Court Has Decided to Suspend the Effect of 1st Injunction Decision

By Douglas Kim

On 8 May, Eoflow announced that the U.S. federal court has decided to suspend the effect of the first injunction decision.
While the effect of the second preliminary injunction decision remains intact, Eoflow has requested a review of the suspension of the effect of the second revised injunction decision as well.
There has been a renewed optimism on Eoflow (294090 KS)’s share price in the past week which increased by 46% from 7 May to 10 May.

Greatview Aseptic (468 HK): Shandong Xinjufeng VGO Could Force Mengniu to Act

Shandong Xinjufeng Technology Packaging (301296 CH) disclosed a pre-conditional voluntary offer for Greatview Aseptic Packaging (468 HK) at HK$2.65, a 26.2% premium to the undisturbed price.
The pre-condition relates to Chinese regulatory approvals and Shandong Xinjufeng shareholder approval. The offer is conditional on a 50% minimum acceptance condition.
Shandong Xinjufeng’s previous acquisition of Jardine Matheson’s 28.22% stake elicited a defensive move by China Mengniu Dairy Co (2319 HK). This development is likely to force a Mengniu competing VGO.

HEC CJ Pharma (1558 HK): Pre-Conditional Share Exchange Offer from Largest Shareholder

Yichang HEC Changjiang Pharma (1558 HK)‘s pre-conditional privatisation from Sunshine Lake Pharma comprises scrip (0.263614 new offeror H Share per HEC CJ Pharma share) and cash (special dividend of HK$1.5).
The pre-condition is regulatory approvals from NDRC, MOFCOM, and SAFE. The key condition is approval by at least 75% of independent H Shareholders (<10% of all independent H Shareholders rejection).
There is valuation uncertainty as the offeror is unlisted, and its valuation hinges on pipeline products. Nevertheless, with no shareholder close to a blocking stake, the deal should get up.

Weekly Deals Digest (12 May) – China TCM, GA Pack, HEC CJ Pharma, CPMC, Alps Logistics, Infocom

A weekly summary of key developments across ECM and Event-Driven names tracked by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Thailand, Korea, India and Chinese ADRs.
ECM developments: HD Hyundai Marine Solution (443060 KS) and ZEEKR (ZK US) have strong IPO debuts.
Event-Driven developments China Traditional Chinese Medicine (570 HK), Greatview Aseptic Packaging (468 HK), Yichang HEC Changjiang Pharma (1558 HK), CPMC Holdings (906 HK), Alps Logistics (9055 JP), Infocom Corp (4348 JP).

(Mostly) Asia-Pac M&A: Namoi Cotton, Great Eastern, GAPack, Nihon, Chilled & Frozen, Shinko Electric

Tally 49 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal.
Six(!) new deals was discussed on Smartkarma this week: Perpetual (PPT AU), Alps Logistics (9055 JP), Namoi Cotton (NAM AU)‘; Great Eastern (GE SP); Nihon Housing (4781 JP) and GAPack (468 HK)‘.
Key updates took place on: QANTM Intellectual Property (QIP AU), Adbri (ABC AU), L’Occitane (973 HK), Chilled & Frozen Logistics Holdings (9099 JP), and Shinko Electric Industries (6967 JP).

EQD | KOSPI 200 Ready to Pullback

By Nico Rosti

This is an update to our previous insight published on April 22nd: “EQD | KOSPI 200 WEEKLY Bounce: Rally or Not?“.
The KOSPI 200 INDEX has performed a nearly +6% rally in the last 3 weeks, closing up 3 weeks in a row (CC=+3).
We have something to say about this pattern that was identified 3 weeks and ago and so we wanted to post this insight to explicit our view.

Cosmecca Korea Plans to Switch Listing from KOSDAQ to KOSPI

By Douglas Kim

On 10 May, Cosmecca Korea (241710 KS) announced that it plans to switch its listing from KOSDAQ to KOSPI.
The company plans to convene an extraordinary general meeting of shareholders on 29 August to finalize on the switching of Cosmecca Korea listing from KOSDAQ to KOSPI.
Cosmecca Korea is one of the leading Korean ODM manufacturers of cosmetic products.

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May 12

Daily Brief Industrials: Alps Logistics, Paccar Inc, Republic Services and more

By Smartkarma Daily Briefs | Daily Briefs, Industrials

In today’s briefing:

Last Week in Event SPACE: Alps Logistics, L’Occitane, Hanon Systems, Perpetual Ltd
PACCAR Inc.: What Are The Market Share Growth Across Different Segments? – Major Drivers
Republic Services Inc.: Continued Growth Poised by Pricing! – Major Drivers

Last Week in Event SPACE: Alps Logistics, L’Occitane, Hanon Systems, Perpetual Ltd

KKR’s Offer for Alps Logistics (9055 JP) is a knock-out price. HUGE MINORITY WIN. This trades a little wide because the “gap risk” is so large, but it’s still safe.
It’s reasonable to expect the listing of various components of L’Occitane (973 HK) other than in HK, would (should) be hugely accretive; for those investors who can (or may) participate.
Hankook Tire & Technology (161390 KS) seeks a controlling stake in Hanon Systems (018880 KS).

PACCAR Inc.: What Are The Market Share Growth Across Different Segments? – Major Drivers

10.7% share in the first quarter compared to 8.6% in the same period last year.
DAF trucks are highly desired by customers in South America and the region is an important part of PACCAR’s growth and success.
In the third quarter of last year, PACCAR announced a commercial vehicle battery joint venture.

Republic Services Inc.: Continued Growth Poised by Pricing! – Major Drivers

Republic Services, during their first quarter 2024 earnings, highlighted strong financial results underpinned by profit-oriented growth.
During the quarter, they saw revenue growth of 8%, an adjusted EBITDA growth of 12%, an expansion of adjusted EBITDA margin by 120 basis points.
The adjusted earnings per share were $1.45 and the adjusted free cash flow produced was $535 million.

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May 12

Daily Brief Energy/Materials: Greatview Aseptic Packaging, Gravita India, LG Chem , Ecolab Inc, Oneok Inc and more

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

In today’s briefing:

Greatview Aseptic (468 HK): Shandong Xinjufeng VGO Could Force Mengniu to Act
Gravita India Ltd- Forensic Analysis
Underexposed Flow Trading Opportunity: LONG Banks & SHORT LG Chem/Energy on June 14
Ecolab Inc.: Leveraging Digital Capabilities For The Pest Elimination Business! – Major Drivers
ONEOK Inc.: Expansion of Data Centers

Greatview Aseptic (468 HK): Shandong Xinjufeng VGO Could Force Mengniu to Act

Shandong Xinjufeng Technology Packaging (301296 CH) disclosed a pre-conditional voluntary offer for Greatview Aseptic Packaging (468 HK) at HK$2.65, a 26.2% premium to the undisturbed price.
The pre-condition relates to Chinese regulatory approvals and Shandong Xinjufeng shareholder approval. The offer is conditional on a 50% minimum acceptance condition.
Shandong Xinjufeng’s previous acquisition of Jardine Matheson’s 28.22% stake elicited a defensive move by China Mengniu Dairy Co (2319 HK). This development is likely to force a Mengniu competing VGO.

Gravita India Ltd- Forensic Analysis

By Nitin Mangal

In FY24, Gravita India (GRAV IN) had faced qualified opinion from the auditors regarding its accounting pertaining to share based payments, which in a way boosted the earnings.
However, the unusual accounting behaviour is not for the company. We have seen some irregular line items in the past as well, w.r.t. gains and losses on commodities and forex.
Other key takeaways include negative free cash flows and difficulty in cash generation, revenues from traded goods not being in sync, fresh contingent liabilities, etc.

Underexposed Flow Trading Opportunity: LONG Banks & SHORT LG Chem/Energy on June 14

By Sanghyun Park

Despite time until screening, predictions likely hold due to market cap gaps; all candidates are banks, benefiting from recent momentum.
Historical patterns show profit-taking selling affecting price impact, particularly on additions with significant pre-inclusion price rises. Monitor banks’ pre-June 14th price appreciation to anticipate impact distortions.
Shorting LG Chem and LG Energy Solution based on high price cointegration, consider basket-trading them before the rebalancing, using the battery sector as a long hedge.

Ecolab Inc.: Leveraging Digital Capabilities For The Pest Elimination Business! – Major Drivers

Ecolab Inc.’s first-quarter 2024 earnings showcased strong progress with adjusted earnings per share increasing by 52%.
This impressive outcome can be attributed to a 5% growth in organic sales and the expansion of organic operating income margin by 400 basis points.
The company is also expected to maintain its long-term earnings growth of 12% to 15%.

ONEOK Inc.: Expansion of Data Centers

ONEOK, a midstream service provider in the natural gas industry, revealed substantial financial growth in its first-quarter 2024 earnings call.
The company reported healthy year-over-year volume growth in the Rocky Mountain region and meaningful contributions from the Refined Products and Crude segment.
ONEOK’s satisfactory performance in Q1 2024 was driven by favourable industrial fundamentals and the realization of commercial and cost synergies – increasing its full-year financial guidance for 2024.

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May 12

Daily Brief Industrials: Alps Logistics, Paccar Inc, Republic Services and more

By Smartkarma Daily Briefs | Daily Briefs, Industrials

In today’s briefing:

Last Week in Event SPACE: Alps Logistics, L’Occitane, Hanon Systems, Perpetual Ltd
PACCAR Inc.: What Are The Market Share Growth Across Different Segments? – Major Drivers
Republic Services Inc.: Continued Growth Poised by Pricing! – Major Drivers

Last Week in Event SPACE: Alps Logistics, L’Occitane, Hanon Systems, Perpetual Ltd

KKR’s Offer for Alps Logistics (9055 JP) is a knock-out price. HUGE MINORITY WIN. This trades a little wide because the “gap risk” is so large, but it’s still safe.
It’s reasonable to expect the listing of various components of L’Occitane (973 HK) other than in HK, would (should) be hugely accretive; for those investors who can (or may) participate.
Hankook Tire & Technology (161390 KS) seeks a controlling stake in Hanon Systems (018880 KS).

PACCAR Inc.: What Are The Market Share Growth Across Different Segments? – Major Drivers

10.7% share in the first quarter compared to 8.6% in the same period last year.
DAF trucks are highly desired by customers in South America and the region is an important part of PACCAR’s growth and success.
In the third quarter of last year, PACCAR announced a commercial vehicle battery joint venture.

Republic Services Inc.: Continued Growth Poised by Pricing! – Major Drivers

Republic Services, during their first quarter 2024 earnings, highlighted strong financial results underpinned by profit-oriented growth.
During the quarter, they saw revenue growth of 8%, an adjusted EBITDA growth of 12%, an expansion of adjusted EBITDA margin by 120 basis points.
The adjusted earnings per share were $1.45 and the adjusted free cash flow produced was $535 million.

💡 Before it’s here, it’s on Smartkarma

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

✓ Unlimited Research Summaries
✓ Personalised Alerts
✓ Custom Watchlists
✓ Company Data and News
✓ Events & Webinars

May 12

Daily Brief TMT/Internet: Advanced Micro Devices, Corning Inc, Gartner Inc, Mastercard, Pinterest , Qualcomm Inc, Skyworks Solutions, Super Micro Computer, Zebra Technologies Corp and more

By Smartkarma Daily Briefs | Daily Briefs, TMT/Internet

In today’s briefing:

Advanced Micro Devices Inc. (AMD): Growth Opportunities in Data Center CPU & Artificial Intelligence (AI) – Major Drivers
Corning Incorporated: Are The Returns On Its Display Business Good Enough? – Major Drivers
Gartner Inc.: Increasing Interest In Artificial Intelligence (AI) & Its Expected Impact On The Top-Line! – Major Drivers
Mastercard Incorporated: Cross-Border Travel and Consumer Behaviors Impact! – Major Drivers
Pinterest Inc.: Operating On A Niche In The Digital Advertising Ecosystem! – Major Drivers
Qualcomm Incorporated: Will The Solid Momentum in Augmented and Virtual Reality Last? – Major Drivers
Skyworks Solutions Inc.: Continued Investment in Technology and Product Roadmaps! – Major Drivers
Super Micro Computer Inc.: Role of AI and Green Computing in Market Leadership! – Major Drivers
Zebra Technologies Corporation: Will The Growth In Asia Market

Advanced Micro Devices Inc. (AMD): Growth Opportunities in Data Center CPU & Artificial Intelligence (AI) – Major Drivers

In the first quarter of 2024, Advanced Micro Devices (AMD), under the chairmanship and CEO-ship of Dr.
Lisa Su, achieved multiple milestones.
Revenue rose to $5.5 billion, showing both quarter over-quarter and year-over-year growth, while the company’s gross margin expanded by more than 2 percentage points; they also saw enhanced profitability with Data Center and Client segment sales each growing by over 80% year-over-year.

Corning Incorporated: Are The Returns On Its Display Business Good Enough? – Major Drivers

Based on the Q1 2024 earnings, Corning Incorporated appears to be in a position of growth and profitability.
With sales close to $3.3 billion and EPS of $0.38, the company exceeds its guidance predictions.
There was a year-over-year gross margin growth of 160 basis points to 36.8%, and a substantial improvement in free cash flow by $300 million.

Gartner Inc.: Increasing Interest In Artificial Intelligence (AI) & Its Expected Impact On The Top-Line! – Major Drivers

In Q1 2024, Gartner delivered strong profitability and free cash flow, which both surpassed expectations, leading the company to increase its guidance for the year.
The company proved its resilience in what’s described as a “complex environment”, with contract value growth in the high single digits.
However, there remain several challenges to face.

Mastercard Incorporated: Cross-Border Travel and Consumer Behaviors Impact! – Major Drivers

Mastercard Inc.’s Q1 2024 earnings showcased the company’s firm position in the payments sector, underpinned by robust revenue and adjusted net income growth on a non-GAAP, currency-neutral basis.
The company’s strong results go beyond the uptake in consumer spending, extending to the rapid growth in cross-border volumes.
There are several factors at play that make Mastercard attractive from an investment standpoint.

Pinterest Inc.: Operating On A Niche In The Digital Advertising Ecosystem! – Major Drivers

Pinterest reported healthy growth trends with bright prospects, although there are challenges and areas in need of improvement, making an investment thesis mix of cautious optimism and risk mitigation.
Positively, Pinterest revealed impressive progress in terms of both user engagement and operational efficiency.
The platform has surpassed 500 million global Monthly Active Users (MAUs) for the first time, increasing by 12%, marking its seventh quarter of consecutive acceleration.

Qualcomm Incorporated: Will The Solid Momentum in Augmented and Virtual Reality Last? – Major Drivers

The Qualcomm Inc. second quarter 2024 earnings focused on recent achievements and future expectations.
The company reported non-GAAP revenues of $9.4 billion, surpassing its guidance, with chipset business revenues of $8 billion, on the strength of Android smartphones and automotive momentum.
Underpinned by its technology leadership, Qualcomm expects to continue growing in both the mobile and automotive markets.

Skyworks Solutions Inc.: Continued Investment in Technology and Product Roadmaps! – Major Drivers

Skyworks Solutions Inc. management shared both encouraging and concerning updates in its recent earnings.
On the positive side, the company demonstrated solid financial performance in the second fiscal quarter of 2024, including revenue of $1.046 billion, earnings per share of $1.55, and generation of $300 million in operating cash flow.
The company sees significant opportunities in the edge IoT market with a robust design win pipeline for WiFi 6E and WiFi 7, indicating a possible multiyear upgrade cycle.

Super Micro Computer Inc.: Role of AI and Green Computing in Market Leadership! – Major Drivers

In the latest Q3 2024, the Super Micro Computer management shared about its ongoing growth and mentioned that the strong results reflect the increasing demand for their rack-scale plug and play total ai solutions.
For the quarter, the firm achieved record-breaking revenues of $3.85 billion, a year-on-year increase of 200% and non-GAAP earnings per share of $6.65, a 308% YoY increase.
Super Micro anticipates AI growth over many quarters, if not years, based on its financial performance and market trends, which is positive for the firm.

Zebra Technologies Corporation: Will The Growth In Asia Market