Smartkarma Daily Briefs

On the 8th April, Azure Minerals (AZS AU) shareholders overwhelmingly approved the Sociedad Quimica y Minera (SQM US)/Gina Rhinehart’s Hancock transaction. Shares promptly closed down 7% on regulatory approval fears.
Those fears are unwarranted. China’s Tianqi Lithium would indirectly own just ~11% in Azure post-deal. China has recently lifted anti-dumping tariffs on a range of Aussie products. FIRB won’t block.
An expected approval may have spurred Gina to buy more shares in Lynas (LYC AU). Why buy now if FIRB dings Azure; that outcome would push the whole sector lower.

TDCX (TDCX US)’s $7.20/Share Short-Form Merger

On the 2 January, TDCX (TDCX US), a Singapore-headquartered digital customer experience (CX) provider, announced it had received a preliminary non-binding proposal from Laurent Junique to be acquired at $6.60/ADS.
On the 1st March, TDCX entered in a definitive agreement by way of a short form merger at US$7.20/ADS, a 48% premium to undisturbed.
As Laurent Junique holds 98.4% of the voting power, there is no shareholder vote on the merger. This is done. The Offer should close in the 2Q24.

Quiddity Leaderboard S&P 500 June 2024 – Minimal Changes Expected but Intrareview Changes Possible

The S&P 500 index tracks the 500 largest names listed in the US and it is one of the most highly-tracked indices in the world.
The index is reviewed quarterly. The next review will be in June 2024 and the evaluation date for the rankings for the constituent selection process is 6th June 2024.
In this insight, we take a look at the Potential ADDs and Potential DELs for the June 2024 index rebal event and the intra-review ADDs/DELs.

Quiddity Leaderboard KOSPI 200 Jun 24: Four Changes Likely

KOSPI 200 is a Korean blue-chip index that tracks the 200 largest and most-liquid names listed in the KOSPI section of the Korea Exchange (KRX).
In this insight, we take a look at the names leading the race to become ADDs and DELs during the upcoming semiannual review in June 2024.
We expect up to four changes in the KOSPI 200 index during the June 2024 index rebal event (down from 5 expected last month) based on the latest available data.

(Mostly) Asia-Pac M&A: Lynas, Tietto Minerals, JSR, Shinko Electric, TDCX

Tally 50 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal.
No new deals were discussed on Smartkarma this week; although a Lynas Corp Ltd (LYC AU) / MP Materials Corp (MP US)tie-in (again) rumoured.
Key updates took place on: Azure Minerals (AZS AU), Tietto Minerals (TIE AU), JSR Corp (4185 JP), Shinko Electric (6967 JP), TDCX (TDCX US), and Hollysys Automation Technologies (HOLI US).

Japan Weekly | Nikkei Takes a Dive

By Mark Chadwick

Geopolitical concerns and disappointing ASML earnings were the key triggers for sharp pull back in equities this week
Next week in Japan, all eyes will be on the Bank of Japan and the continued weakness in the exchange rate. Earnings season just around the corner too
Semiconductor names were hit hard this week – Lasertec (-21%), Tokyo Electron (-15%) and Disco (-11%) sharply lower.

Weekly Deals Digest (21 Apr) – Hollysys, Shinko, Inageya, Hang Lung, Kokusai, HD Hyundai Marine

By Arun George

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: Kokusai Electric (6525 JP) and J&T Global Express (1519 HK) lock-ups. HD Hyundai Marine Solution (443060 KS), ZEEKR (ZK US) and Sichuan Baicha Baidao Industrial (2555 HK) IPOs.
Event-Driven developments: Hollysys Automation Technologies (HOLI US), Shinko Electric Industries (6967 JP), Inageya Co Ltd (8182 JP), Hang Lung Properties (101 HK), Tietto Minerals Ltd (TIE AU).

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Apr 21

Daily Brief Thematic (Sector/Industry): GEMWeekly (19 Apr 2024): China Macro Data; Baidu and more

By Smartkarma Daily Briefs | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

GEMWeekly (19 Apr 2024): China Macro Data; Baidu, TSMC, SK Hynix

GEMWeekly (19 Apr 2024): China Macro Data; Baidu, TSMC, SK Hynix

By Wium Malan, CFA

The Global Emerging Markets Weekly summarizes the key news and related developments impacting the largest countries and constituents of the Global Emerging Markets equity indices.
Macro data points: China loan growth, GDP growth, Industrial production, Retail sales, New home prices.
Companies mentioned:Baidu (9888 HK), Taiwan Semiconductor (TSMC) (2330 TT), SK Hynix (000660 KS)

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Apr 21

Daily Brief Equity Bottom-Up: TSMC. How To Turn Chicken Salad Into Chicken Sh*t and more

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

In today’s briefing:

TSMC. How To Turn Chicken Salad Into Chicken Sh*t
Marksans Pharma- Forensic Analysis
Medikaloka Hermina (HEAL IJ) – Increasing Patient Velocity and Occupancy
Monthly Container Shipping Tracker | March Volumes Strong | Q1 Margins Likely Up Y/Y (April 2024)
Short Note: USDJPY Breaking 154: Positive for RE, Buy Japan Hotel REIT, Buy Japan RE
Intuitive Surgical (ISRG US): Beat-And-Raise 1Q24; Rising Demand for Robotic Surgery Propels Growth

TSMC. How To Turn Chicken Salad Into Chicken Sh*t

By William Keating

Q124 revenues of $18.87 billion, marginally above the high end of the guided range, up 12.9% YoY and down 3.8% QoQ. Guided Q224 +6% QoQ. Maintained full year 2024 outlook
Unnecessary, minor downward revisions for semi & foundry growth, combined with confusion about the reason triggered an allergic reaction on the markets. TSMC down ~8% since.
SMCI plunged 23% by Friday close, ARM down 16.9%, NVIDIA down 10%, AMD & Micron down ~5% etc. Nice one, TSMC!

Marksans Pharma- Forensic Analysis

By Nitin Mangal

Marksans Pharma (MRKS IN) has done well in recent years, growing at 15.2% on a 5Y CAGR.
The company has a good balance sheet, strong cash generation and also witnessed a recent uptick on the margins side. UK business especially has been the cash cow.
However, there are few impairment indicators; few subsidiaries are not audited while bad debts have appeared in the books lately. Company also has few disclosure issues.

Medikaloka Hermina (HEAL IJ) – Increasing Patient Velocity and Occupancy

By Angus Mackintosh

Medikaloka Hermina (HEAL IJ) booked a strong recovery in revenues and profits in FY2023 driven by rapidly rising inpatient and outpatient volume growth with JKN patient share rising.
The company also saw significant improvements in working capital in 2023 and will step up its capex and hospital expansion in FY2024E helping to drive growth.
Medikaloka Hermina is differentiated by its women & children specialisation, higher JKN exposure, and its doctor partnership model. It trades at a discount to peers with higher growth expectations.

Monthly Container Shipping Tracker | March Volumes Strong | Q1 Margins Likely Up Y/Y (April 2024)

By Daniel Hellberg

Our analysis suggests container rate momentum remained +ive in March
Despite higher fuel expense, core container margins likely rose Y/Y in Q124
Our L/S pair trade? It’s worked, a little, but Evergreen shares have stayed firm

Short Note: USDJPY Breaking 154: Positive for RE, Buy Japan Hotel REIT, Buy Japan RE

By Jacob Cheng

USDJPY is breaking 154, almost 20-year high. In general, weaker Yen is positive for investment in real estate as properties look cheaper from a foreign investor perspective
Yen weakness is also positive to tourism in Japan, as weak currency will drive tourist arrival and boost tourism
We like Japan Hotel REIT on the back of attractive valuation and weaker Yen. We also like other Japan RE names like 8801 and 8802

Intuitive Surgical (ISRG US): Beat-And-Raise 1Q24; Rising Demand for Robotic Surgery Propels Growth

By Tina Banerjee

In 1Q24, Intuitive Surgical (ISRG US) reported 11% YoY revenue growth to $1.89B, driven by growth in da Vinci procedure volume and an increase in the installed base of systems.
Worldwide da Vinci procedures grew 16%, matching the higher end of prior guidance range. The company placed 313 da Vinci surgical systems, including eight newly approved da Vinci 5.
Even after considering blip in bariatric surgery, delayed tender in China, and no benefit of patient backlog, the company has raised 2024 worldwide da Vinci procedure growth guidance to 14–17%.

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Apr 21

Daily Brief Event-Driven: (Mostly) Asia-Pac M&A: Lynas and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

(Mostly) Asia-Pac M&A: Lynas, Tietto Minerals, JSR, Shinko Electric, TDCX
Weekly Deals Digest (21 Apr) – Hollysys, Shinko, Inageya, Hang Lung, Kokusai, HD Hyundai Marine
Last Week in Event SPACE: Pasona/Benefit One, Hang Lung Properties, Hollysys, Azure Minerals

(Mostly) Asia-Pac M&A: Lynas, Tietto Minerals, JSR, Shinko Electric, TDCX

Tally 50 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal.
No new deals were discussed on Smartkarma this week; although a Lynas Corp Ltd (LYC AU) / MP Materials Corp (MP US)tie-in (again) rumoured.
Key updates took place on: Azure Minerals (AZS AU), Tietto Minerals (TIE AU), JSR Corp (4185 JP), Shinko Electric (6967 JP), TDCX (TDCX US), and Hollysys Automation Technologies (HOLI US).

Weekly Deals Digest (21 Apr) – Hollysys, Shinko, Inageya, Hang Lung, Kokusai, HD Hyundai Marine

By Arun George

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: Kokusai Electric (6525 JP) and J&T Global Express (1519 HK) lock-ups. HD Hyundai Marine Solution (443060 KS), ZEEKR (ZK US) and Sichuan Baicha Baidao Industrial (2555 HK) IPOs.
Event-Driven developments: Hollysys Automation Technologies (HOLI US), Shinko Electric Industries (6967 JP), Inageya Co Ltd (8182 JP), Hang Lung Properties (101 HK), Tietto Minerals Ltd (TIE AU).

Last Week in Event SPACE: Pasona/Benefit One, Hang Lung Properties, Hollysys, Azure Minerals

Pasona (2168 JP)will pay out 10-20% of the extraordinary gain from the Benefit One (2412 JP) sale. It will take its sweet time doing so. For no apparent reason.
Hang Lung Properties (101 HK)‘s first-ever scrip dividend provides the means for the Chan Family to indirectly chip away at minorities.
Hollysys Automation Technologies (HOLI US) accountant resignation announcement is a nothing burger. An update on PRC regulatory approvals would be welcome about now though.

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Apr 21

Daily Brief Macro: Macro Overview: A Review of Recent Events Impacting Our Investment Themes and more

By Smartkarma Daily Briefs | Daily Briefs, Macro

In today’s briefing:

Macro Overview: A Review of Recent Events Impacting Our Investment Themes

Macro Overview: A Review of Recent Events Impacting Our Investment Themes

By Rikki Malik

Federal Reserve “shocks’ markets by taking early rate cuts off the table
New tactics in the Russia/Ukraine war do not bode well for lower oil prices
China releases Q1 GDP data which is “stronger” than expected

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Apr 20

Daily Brief South Korea: Doosan Robotics , HD Hyundai Marine Solution and more

By Smartkarma Daily Briefs | Daily Briefs, South Korea

In today’s briefing:

Quiddity Leaderboard KOSPI 200 Jun 24: Four Changes Likely
Will the Hyundai Marine Solution IPO Follow in Ecopro Materials’ Footsteps After It Goes Public?

Quiddity Leaderboard KOSPI 200 Jun 24: Four Changes Likely

KOSPI 200 is a Korean blue-chip index that tracks the 200 largest and most-liquid names listed in the KOSPI section of the Korea Exchange (KRX).
In this insight, we take a look at the names leading the race to become ADDs and DELs during the upcoming semiannual review in June 2024.
We expect up to four changes in the KOSPI 200 index during the June 2024 index rebal event (down from 5 expected last month) based on the latest available data.

Will the Hyundai Marine Solution IPO Follow in Ecopro Materials’ Footsteps After It Goes Public?

By Sanghyun Park

The prospect of this IPO mirroring the post-listing rallies seen with Ecopro Materials is what keeps local institutions fixated on this IPO despite valuation issues.
The key factors are speculative trading frenzy among local retail investors and subsequent passive inflows through early entry into KOSPI 200/MSCI Standard.
Considering two factors is vital. Hyundai Marine Solution’s IPO size is twice Ecopro Materials’, potentially limiting speculative buying. Sector-wide rallies, crucial for Ecopro Materials, haven’t been as prominent in shipbuilding.

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Apr 20

Daily Brief Indonesia: PT Avia Avian and more

By Smartkarma Daily Briefs | Daily Briefs, Indonesia

In today’s briefing:

PT Avia Avian (AVIA IJ) – An Attractive Tint to 2024 Prospects

PT Avia Avian (AVIA IJ) – An Attractive Tint to 2024 Prospects

By Angus Mackintosh

PT Avia Avian (AVIA IJ) saw a pronounced pick up in sales in 4Q2023 and the ongoing benefit of lower raw material prices boosted margins to 5-year highs.
The company expanded its distribution in 2023 and will continue in 2024, which coupled with new product launches, especially of economic products, should help to drive higher growth in 2024.
PT Avia Avian continues to drive its express service, which also helps to push new product growth. Its market leadership and track record justify valuations with further support from dividends.

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Apr 20

Daily Brief United States: KKR & Co, S&P 500 INDEX, Nike, Braze Inc, Arrow Electronics, Teradata Corp, Varonis Systems, Adeia, Abercrombie & Fitch Co Cl A, Workiva Inc and more

By Smartkarma Daily Briefs | Daily Briefs, United States

In today’s briefing:

Quiddity Leaderboard S&P 500 June 2024 – Minimal Changes Expected but Intrareview Changes Possible
EQD | S&P500 Futures (ES) Deeply Oversold WEEKLY, Reversal (Probably) Imminent
Nike Inc.: A Tale Of Brand Elevation Through Greater Market Presence! – Major Drivers
Braze Inc.: First-Party Data Investment As An Important Business Model! – Major Drivers
Arrow Electronics: What Are The Biggest Challenges In Its Transition To The IT-As-A-Service Model? – Major Drivers
Teradata Corporation: How Long Will The Growth in Cloud Annual Recurring Revenue (ARR) Last? – Major Drivers
Varonis Systems: Will Its Transition to SaaS Offering Be Smooth Enough To Warrant A Bullish Rating? – Major Drivers
ADEA: Not Just Another Licensing Deal
AKA: Initiating Coverage of a.k.a. Brands with Buy and $14 PT: Upside Ahead
Workiva Inc.: Innovations in AI and Reporting Capabilities Are Upping Their Game! – Major Drivers

Quiddity Leaderboard S&P 500 June 2024 – Minimal Changes Expected but Intrareview Changes Possible

The S&P 500 index tracks the 500 largest names listed in the US and it is one of the most highly-tracked indices in the world.
The index is reviewed quarterly. The next review will be in June 2024 and the evaluation date for the rankings for the constituent selection process is 6th June 2024.
In this insight, we take a look at the Potential ADDs and Potential DELs for the June 2024 index rebal event and the intra-review ADDs/DELs.

EQD | S&P500 Futures (ES) Deeply Oversold WEEKLY, Reversal (Probably) Imminent

By Nico Rosti

The S&P500 has been falling for 3 weeks and 6 days, it is very oversold.
The current Market Reversal Matrix pattern suggests a high probability LONG trade for this coming week and the next.
The support price area where to enter LONG is the 4950-4900 but also higher prices between 5000 and 4950 could be a good entry point, although a bit riskier.

Nike Inc.: A Tale Of Brand Elevation Through Greater Market Presence! – Major Drivers

In the Q3 2024 earnings, NIKE, Inc. outlined how it is driving growth despite not performing to its potential.
The company is focusing on four key areas: a sharpened focus on sport, continuous product innovation, bolder and more distinctive brand marketing, and collaboration with wholesale partners to expand the marketplace.
A significant measure of progress is the alignment of the organization to focus on the consumer and sport.

Braze Inc.: First-Party Data Investment As An Important Business Model! – Major Drivers

Braze Inc. had a productive Q4 for the fiscal year 2024, reporting robust revenue growth and notable leaps in operational efficiency.
The company generated $131 million in revenue, up 33% year-over-year and 6% quarter over-quarter.
It is important to mention that these figures were achieved despite macroeconomic headwinds and tight scrutiny of budgets, reflecting the high ROI and enduring value of Braze’s customer engagement platform.

Arrow Electronics: What Are The Biggest Challenges In Its Transition To The IT-As-A-Service Model? – Major Drivers

Arrow Electronics had a decent performance in 2023 despite the challenging macroeconomic conditions and inventory-related issues.
Arrow Electronics managed to post a full-year revenue of $33.1 billion and a non-GAAP operating margin of 4.8%.
The company also reported strong cash flow from operations, enabling the repurchase of approximately $750 million in shares over the year.

Teradata Corporation: How Long Will The Growth in Cloud Annual Recurring Revenue (ARR) Last? – Major Drivers

Teradata Corporation, a leading hybrid multi-cloud analytics and data platform company, recently held its fourth quarter and full year 2023 earnings call, which indicates the company’s progress and future outlook in its sector.
The company emphasizes its focus on customer satisfaction by delivering solutions for complex data and analytics problems.
Baptista Research looks to evaluate the different factors that could influence the company’s price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology.

Varonis Systems: Will Its Transition to SaaS Offering Be Smooth Enough To Warrant A Bullish Rating? – Major Drivers

By Small Cap Consumer Research

Varonis Systems Inc. showcased strong performance in the fourth quarter and full year 2023 as they continued their transition towards Software-as-a-Service (SaaS).
The successful transition of their offerings led to an incredible growth of the SaaS Annual Recurring Revenue (ARR) from several million dollars in 2022 to approximately $125 million by the end of 2023.
This growth in SaaS ARR represented approximately 23% of the total company ARR at year-end.

ADEA: Not Just Another Licensing Deal

By Hamed Khorsand

ADEA announced it has licensed its intellectual property to Austrian service provider Magenta Telekom in what could be of bigger significance than what ADEA’s stock price portrays
The license is the first for ADEA with a European service provider. This is also the first major customer win ADEA has announced since becoming a standalone IP company
The size of the deal with Magenta is most likely small, but our focus is on what it could mean for ADEA. Magenta is owned by T-Mobile parent Deutsche Telekom.

AKA: Initiating Coverage of a.k.a. Brands with Buy and $14 PT: Upside Ahead

We are initiating coverage of a.k.a. Brands Holding Corp.
(“a.k.a. Brands” or the “company”), a leading owner of primarily online apparel-based brands focused on Generation Z and Millennial consumers, with a Buy rating and $14.00 price target, or 10.9X our 2025 EBITDA projection of $20.2 million.
The company’s brands include: 1) Princess Polly, focusing on 15 to 25 year-old women; 2) Petal & Pup, which offers feminine styles for 25 to 34 year-old women; 3) Culture Kings, a street wear destination; and 4) mnml, a high-quality street wear designer focused on bottoms.

Workiva Inc.: Innovations in AI and Reporting Capabilities Are Upping Their Game! – Major Drivers