Smartkarma Daily Briefs

BYD (1211 HK) raised US$5.6bn in a secondary offering a few weeks ago and the stock is trading a lot higher than the placement price.
Buying from global index trackers is done, but there will be more passive buying from Hang Seng Index (HSI) and Hang Seng China Enterprises Index (HSCEI) trackers later this month.
With the release of the God’s Eye advanced driver-assistance system (ADAS), the stock could be added to the Hang Seng TECH Index (HSTECH INDEX) in June, bringing more passive inflows.

Skyworth (751 HK): Another Buyback

On 27 March, Skyworth Group Limited (751 HK) launched a conditional buyback to acquire a maximum of 350.0m shares (15.67% of outstanding) at HK$3.11, a 15.2% premium to undisturbed price.
Unlike the previous buybacks, the controlling shareholder can vote. Therefore, while the buyback offer is unattractive, the shareholder vote will pass.
Based on the irrevocables, a 100% share minority participation rate implies a minimum proration of 37.84%. The actual proration was around twice the minimum proration for the previous two.

A/H Premium Tracker (To 28 Mar 2025): AH Premia Still Falling; Expect Curve Torsion or AH Widening

AH Premia bounce higher. Spread curve torsion was as expected. Narrow spreads saw Hs suffer more. Wide spreads saw H outperformance.
The last few weeks I said warning signs were flashing and spreads could widen. This week they widened despite big SOUTHBOUND buying.
I expect the right thing to do is hunker down and be flat H/A risk.

HK Connect SOUTHBOUND Flows (To 28 Mar 2025); Banks and Divs Bought Again

Q1 saw record quarterly inflows by SOUTHBOUND investors at HK$435bn, beating the previous record of Q1 2021 by more than HK$100bn. This week was +HK$37bn.
That’s decent net buying still. Keeping that pace would mean a new record. It IS possible this excess flow is state-managed (or state-insisted as insurers up equity investment ratios).
Included is a summary of important China Stocks-relevant news as I saw it this week, but tariffs, retaliation, US growth prospects, etc will all matter more.

Tencent (700 HK): Volatility Plays and Skew Top Trades

By Gaudenz Schneider

Over the past five trading days, Tencent (700 HK) multi-leg option strategies showcased a variety of approaches. Strategy highlights and volatility context are provided.
With short-term implied volatility below its median, long volatility strategies dominate, with a balanced mix of bullish and bearish positions.
Open interest spread across monthly and quarterly expiries, with some notable strategies taking advantage of longer expiration dates, and a steep negatively sloped skew $475.

QingSong Health Corporation – Pain Points of the Business Model and the Outlook

By Xinyao (Criss) Wang

The business model of QingSong is a platform offering comprehensive healthcare services and tailored financial resources. By connecting different stakeholders, QingSong can monetize its user base, creating a virtuous cycle.
Qingsong’s revenue structure has undergone significant changes. However, if Qingsong’s future business focus is on Qingsong Healthcare services, it may be difficult to generate large-scale profits in the end.
Listed insurance intermediary platforms have been in the shadow of a decline in stock prices. So, there is concerns that future share price performance of QingSong may not be optimistic.

Dongfang Electric (1072 HK): Returning to Growth in 1Q25 Despite Weak FY24

By Osbert Tang, CFA

Dongfang Electric (1072 HK)‘s 1Q25 express report suggested earnings may increase 15-25% YoY, reversing the YoY decline in 4Q24 and FY24. This is encouraging.
Its signs record new orders in FY24, fuelling its order backlog to Rmb152.6bn, which equals 2x the FY25F revenue. 2H24 new order momentum is better than 1H24.
The pending A-share placement, while diluting EPS, will enhance book value for the H-share holders. Its 6.4x PER and 7.3% dividend yield are inexpensive.

Longfor Group – Earnings Flash – FY 2024 Results

By Leonard Law, CFA

Longfor Group’s FY 2024 results were acceptable.
The earnings decline was in line with expectations, driven by lower revenues and margins from the property development segment.
We project that Longfor’s contracted sales will continue declining in FY 2025, given the company’s slowdown in land bank replenishment.

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Apr 01

Daily Brief United States: Amcor , Chagee Holdings, UiPath Inc, Natural Gas, Tegna Inc, C3.ai Inc, Mastec Inc, Phillips 66, Aaon Inc, Middleby Corp and more

By Smartkarma Daily Briefs | Daily Briefs, United States

In today’s briefing:

Amcor’s $8B+ Berry Pick: A Juicy Shake-Up for the US Index
Chagee Holdings Limited (CHA): Peeking at the IPO Prospectus of China’s Premium Tea Brand
UiPath: A Tale Of Cloud Transition & SaaS Growth With An Astounding 98% Retention!
WTI’s Recovery Wavers While Henry Hub Regains Momentum
TEGNA’s Bold Bet on AI & Automation To Expand Margins—Here’s What’s Coming Next!
C3.ai’s 460% Surge in Deals Signals a Breakout Moment—Is This the Best AI Stock to Buy Today?
MasTec’s Clean Energy Boom: New Client Wins & Rising Margins Could Fuel Solid Growth In 2025!
Phillips 66 Gets a Wake-Up Call From Activist Investor — Why Elliott Investments’ Intervention Could Unlock Value!
Can AAON Capitalize On The Data Center Boom With Game-Changing $1 Billion Expansion Plan?
Middleby Corporation Is On A Buying Spree—Is M&A The ONLY Feasible Way For Them To Grow?

Amcor’s $8B+ Berry Pick: A Juicy Shake-Up for the US Index

By Harry Kalfas

Amcor (AMCR US) and Berry Global Group (BERY US) all-stock merger creates a $24B packaging leader with $650M in synergies by year three.
Berry Global Group (BERY US) shareholders to receive 7.25 Amcor (AMCR US) shares per share held, with the deal expected to close soon.
The merger’s impact on major U.S. indices expected on an intra-quarter basis.

Chagee Holdings Limited (CHA): Peeking at the IPO Prospectus of China’s Premium Tea Brand

By IPO Boutique

As of December 31, 2024, their network comprised 6,440 teahouses, including 6,284 located in China.
Their net revenues increased by 844% to RMB4,640.2 million in 2023 from RMB491.7 million in 2022.
We anticipate this company to set terms (share size, price range) and debut in the second half of April.

UiPath: A Tale Of Cloud Transition & SaaS Growth With An Astounding 98% Retention!

UiPath reported its fourth-quarter and full-year fiscal 2025 financial performance, marking several high and low points that are critical for investors to examine as they consider their future involvement with the company.
On the positive side, UiPath achieved a quarterly revenue of $424 million, with only a slight impact from foreign exchange fluctuations.
For the full fiscal year, revenue increased to $1.43 billion, reflecting a 9% improvement year-over-year.

WTI’s Recovery Wavers While Henry Hub Regains Momentum

By Suhas Reddy

WTI rebounded in March due to geopolitical risks, but oversupply concerns and Trump’s unpredictable policies may limit further gains as OPEC increases output from April.
Henry Hub rallied in 2025, driven by strong LNG demand, supply constraints, and below-average inventories, positioning it for sustained support despite short-term volatility.
Henry Hub’s technicals indicate a potential bullish reversal, while WTI’s bullish momentum shows signs of weakening, suggesting divergent trends in the near term.

TEGNA’s Bold Bet on AI & Automation To Expand Margins—Here’s What’s Coming Next!

TEGNA Inc. recently presented its fourth-quarter and full-year 2024 financial results, demonstrating both opportunities and challenges for potential investors.
The company reported a significant 20% year-over-year increase in total revenue for the fourth quarter, amounting to $871 million, primarily driven by political advertising revenues.
However, the political advertising performance nearly matched that of the 2020 election cycle, indicating the cyclical nature of this revenue stream.

C3.ai’s 460% Surge in Deals Signals a Breakout Moment—Is This the Best AI Stock to Buy Today?

C3.ai has exhibited a solid performance in the third fiscal quarter of 2025, ending January 31, 2025, with both positive developments and certain challenges.
The company reported total revenue of $98.8 million, representing a 26% increase year-over-year.
Subscription revenue, constituting the majority of its revenue, grew by 22% to $85.7 million.

MasTec’s Clean Energy Boom: New Client Wins & Rising Margins Could Fuel Solid Growth In 2025!

MasTec Inc. has reported strong financial results for the fourth quarter and full year 2024.
The company’s performance exceeded expectations across several key metrics, including revenue, adjusted EBITDA, and earnings per share (EPS).
For the fourth quarter, MasTec achieved a revenue of $3.4 billion with an adjusted EBITDA of $271 million, marking a 20% year-over-year increase.

Phillips 66 Gets a Wake-Up Call From Activist Investor — Why Elliott Investments’ Intervention Could Unlock Value!

The battle for boardroom influence at Phillips 66 has entered a new phase.
On March 25, 2025, activist hedge fund Elliott Investment Management filed a lawsuit against Phillips 66 and its board, demanding that four board seats be opened for election at the upcoming annual shareholder meeting.
This move comes just weeks after Elliott revealed it had increased its stake in the oil refiner to $2.5 billion and nominated seven directors.

Can AAON Capitalize On The Data Center Boom With Game-Changing $1 Billion Expansion Plan?

AAON, Inc.’s recent earnings for the fourth quarter of 2024 provided investors with a detailed overview of the company’s financial performance, strategic initiatives, and outlook.
The company, which boasts a strong position in the heating and cooling industry, highlighted both its achievements and challenges during the year.
On the positive side, AAON reported a substantial increase in bookings and backlog, signaling strong future demand.

Middleby Corporation Is On A Buying Spree—Is M&A The ONLY Feasible Way For Them To Grow?

The Middleby Corporation has recently reported on various strategic changes and an earnings summary for the fourth quarter of 2024.
The company announced its decision to spin off its Food Processing business to form a separate publicly traded entity, aiming to create two distinct companies: Middleby Corporation focusing on commercial and residential kitchen equipment, and Middleby Food Processing.
This move is expected to allow each business to sharpen its strategic and operational focus, optimize capital structure, and align more strategically with its respective market opportunities.

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Apr 01

Daily Brief Japan: Fast Retailing, Toyota Motor, Mixi Inc, Topcon Corp, Asahi Intecc and more

By Smartkarma Daily Briefs | Daily Briefs, Japan

In today’s briefing:

Fast Retailing (9983) | Buying Opportunity Ahead of Q2 Results
The Toyota Way Is Not to Rush, but to Gain a Foothold and Proceed with Caution
MIXI Inc. (2121 JP) – A Potentially Game-Changing Deal
(Mostly) Asia M&A, Mar 2025 Wrap: ENN Energy, Gold Road, Spartan, Aeon Delight, Sinarmas, Topcon
Asahi Intecc (7747 JP): Softer H2 Expected; Positive Long-Term Outlook Amid Tariff Noises

Fast Retailing (9983) | Buying Opportunity Ahead of Q2 Results

By Mark Chadwick

Fast Retailing (9983 JP) is set to report its second-quarter results on April 10, and we see an opportunity to buy ahead of a strong earnings release
We expect Fast Retailing to post Q2 sales of ¥905bn (+15% YoY), above consensus estimates of ¥881bn. EBIT projected at ¥133bn (+21% YoY), ahead of street expectations of ¥125bn.
Domestic Uniqlo monthly sales and quarterly results from global peers suggest strong sales momentum.

The Toyota Way Is Not to Rush, but to Gain a Foothold and Proceed with Caution

By Aki Matsumoto

It’s unlikely that the transition to ‘company with audit committee’ will enhance the supervisory function, but it’s likely to speed up the decision-making process by delegating authority to executive directors.
Instead of achieving 30% female board member and moving to Company with US-type 3 Committees at once, Toyota will implement Toyota’s way firmly with BOD that is half independent directors.
The only way for Toyota, which faces several governance challenges, to uphold tradition of Toyoda family being at the top of management is to make the returns expected by investors.

MIXI Inc. (2121 JP) – A Potentially Game-Changing Deal

By Astris Advisory Japan

MIXI has announced an all-cash deal worth ¥35.2bn for PointsBet Holdings (PBH), an Australian sports and racing online betting company operating in Australia and Canada.
The deal is due to close in mid-June 2025. We view this transaction as aligned with MIXI’s strategies of business diversification and overseas expansion, leveraging the expertise gained from TIPSTAR in Japan’s keirin and auto-race betting businesses to enter the Australian market, thereby accelerating the growth of both TIPSTAR and PointsBet.
MIXI is demonstrating a positive and active allocation of its capital, with a high intent to accelerate the development of its Sports business and make it a key earnings pillar.

(Mostly) Asia M&A, Mar 2025 Wrap: ENN Energy, Gold Road, Spartan, Aeon Delight, Sinarmas, Topcon

By David Blennerhassett

For the month of March 2025, 13 new transactions (firm and non-binding) were discussed on Smartkarma with an overall announced deal size of ~US$14bn.
The average premium for the new transactions announced (or first discussed) in March was ~53%, with a year-to-date average also of 55%.
The average premiums for transactions in 2024 (129 transactions), (2023 (117), 2022 (106), 2021 (165), 2020 (158), and 2019 (145 ) were 43%, 39%, 41%, 33%, 31%, and 31% .

Asahi Intecc (7747 JP): Softer H2 Expected; Positive Long-Term Outlook Amid Tariff Noises

By Tina Banerjee

Asahi Intecc (7747 JP) announced double-digit growth across all the key parameters in H1FY25. Market share expansion of medical division and favorable Fx drove growth.
Reiteration of FY25 guidance implies a softer H2 performance. In H2FY25, revenue is expected to increase 4% YoY, while both operating and net profit are likely to decline.
The U.S. contributes ~20% of medical division’s revenue of Asahi Intecc, which is lower than other large Japanese medtech companies. This should limit tariff exposure.

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Apr 01

Most Read: NetEase , BayCurrent Consulting , KOSDAQ 150 Index, BYD, Hang Seng TECH Index, Hanwha Corporation, Skyworth Group Limited, Fast Retailing, China Merchants Bank H and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

Hang Seng Indexes: FAF Methodology Change for Secondary Listings; Over US$1bn to Buy in NetEase
Nikkei 225 Mar25 Rebal – A Big Buy With Buying Shadow, A Bigger Sell, And $2bn of Funding Flows
Korea Short Selling: Off to the Races
BYD (1211 HK): God’s Eye & Potential HSTECH Index Inclusion
ETF Flows in Q1: Inflows for Taiwan, Outflows for China
Hanwha’s Surprise Gift Disclosure: Three Major Takeaways
Skyworth (751 HK): Another Buyback
Fat Inheritance Taxes for Hanwha Group Chairman Kim’s Three Sons Post Receiving Hanwha Corp Shares
Fast Retailing (9983) | Buying Opportunity Ahead of Q2 Results
A/H Premium Tracker (To 28 Mar 2025): AH Premia Still Falling; Expect Curve Torsion or AH Widening

Hang Seng Indexes: FAF Methodology Change for Secondary Listings; Over US$1bn to Buy in NetEase

Hang Seng Indexes has announced a change in the FreeFloat-Adjusted Factor (FAF) methodology for Secondary Listings that will be implemented from the next rebalance in June.
NetEase (9999 HK), Baidu (9888 HK), Trip.com (9961 HK), NIO (9866 HK), New Oriental Education & Techn (9901 HK) and Weibo (9898 HK) benefit; GDS Holdings (9698 HK) loses out.
The FAF changes along with capping changes will result in a round-trip trade of HK$34.2bn (US$4.4bn) at the June rebalance with the largest turnover for the Hang Seng TECH Index.

Nikkei 225 Mar25 Rebal – A Big Buy With Buying Shadow, A Bigger Sell, And $2bn of Funding Flows

The Nikkei 225 March 2025 rebalance is today. The ADD is big, with more to buy later. The SELL is a really big sell in terms of float.
The Sell, Mitsubishi Logistics (9301 JP), means Max Real World Float doubles. It’s like a huge offering, with warning.
There’s a big cap trade on Fast Retailing (9983 JP) where timing is not on its side, leaving US$2bn to buy in funding. 25 names at 0.4x ADV to buy.

Korea Short Selling: Off to the Races

Short selling in Korea resumes in a couple of hours. Expect heightened volatility for a few days before things settle down.
Foreign investors have increased their holdings over the last five weeks and there could be further buying in select stocks on stock price drops.
The KOSPI 200 INDEX has outperformed the KOSDAQ 150 Index, and the forecast index deletes have underperformed the indices indicating that there will be positioning for the short-sell resumption.

BYD (1211 HK): God’s Eye & Potential HSTECH Index Inclusion

BYD (1211 HK) raised US$5.6bn in a secondary offering a few weeks ago and the stock is trading a lot higher than the placement price.
Buying from global index trackers is done, but there will be more passive buying from Hang Seng Index (HSI) and Hang Seng China Enterprises Index (HSCEI) trackers later this month.
With the release of the God’s Eye advanced driver-assistance system (ADAS), the stock could be added to the Hang Seng TECH Index (HSTECH INDEX) in June, bringing more passive inflows.

ETF Flows in Q1: Inflows for Taiwan, Outflows for China

The largest ETF inflows in the region have been in Taiwan as investors rush into indices that have higher dividend yields.
China had large inflows last year as markets floundered. With markets trading in a range over the last 6 months, those flows have reversed in Q1 this year.
Australia has seen net inflows this year, while there have been net outflows from Hong Kong, India and Japan focused ETFs.

Hanwha’s Surprise Gift Disclosure: Three Major Takeaways

By Sanghyun Park

The chances of a Hanwha Corp-Hanwha Energy merger just dropped significantly. With the brothers now owning 43%, the merger’s effectively off.
The three brothers face a KRW 200B gift tax bill and need liquidity. They’ll raise cash via Hanwha Energy’s IPO, with the youngest brother set to sell a 10% stake.
Hanwha Corp will likely fund its Hanwha Aerospace rights issue through a rights offering, using KRW 1.3 trillion from Hanwha Energy, after shutting down merger rumors.

Skyworth (751 HK): Another Buyback

On 27 March, Skyworth Group Limited (751 HK) launched a conditional buyback to acquire a maximum of 350.0m shares (15.67% of outstanding) at HK$3.11, a 15.2% premium to undisturbed price.
Unlike the previous buybacks, the controlling shareholder can vote. Therefore, while the buyback offer is unattractive, the shareholder vote will pass.
Based on the irrevocables, a 100% share minority participation rate implies a minimum proration of 37.84%. The actual proration was around twice the minimum proration for the previous two.

Fat Inheritance Taxes for Hanwha Group Chairman Kim’s Three Sons Post Receiving Hanwha Corp Shares

By Douglas Kim

Hanwha Group Chairman Kim Seung-youn (born in 1952) made a major move to give 11.32% of his shares in Hanwha Corporation (000880 KS) to his three sons.
It is estimated that the three sons will need to pay nearly 222 billion won in inheritance taxes associated with receiving additional stakes in Hanwha Corp.
Because the three sons need to pay for the high amounts of inheritance taxes, Hanwha Corp is likely to raise the dividend payout in the next several years.

Fast Retailing (9983) | Buying Opportunity Ahead of Q2 Results

By Mark Chadwick

Fast Retailing (9983 JP) is set to report its second-quarter results on April 10, and we see an opportunity to buy ahead of a strong earnings release
We expect Fast Retailing to post Q2 sales of ¥905bn (+15% YoY), above consensus estimates of ¥881bn. EBIT projected at ¥133bn (+21% YoY), ahead of street expectations of ¥125bn.
Domestic Uniqlo monthly sales and quarterly results from global peers suggest strong sales momentum.

A/H Premium Tracker (To 28 Mar 2025): AH Premia Still Falling; Expect Curve Torsion or AH Widening

AH Premia bounce higher. Spread curve torsion was as expected. Narrow spreads saw Hs suffer more. Wide spreads saw H outperformance.
The last few weeks I said warning signs were flashing and spreads could widen. This week they widened despite big SOUTHBOUND buying.
I expect the right thing to do is hunker down and be flat H/A risk.

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Mar 31

Daily Brief Quantitative Analysis: Thailand Short Interest Weekly (Mar 28th): CP AXTRA and more

By Smartkarma Daily Briefs | Daily Briefs, Quantitative Analysis

In today’s briefing:

Thailand Short Interest Weekly (Mar 28th): CP AXTRA, Thai Oil, Central Pattana, Indorama Ventures
TWSE Foreign Holding Weekly (Mar 28th): TSMC, Hon Hai Precision, Quanta Computer, Asustek Computer
Gold Miners: Off the Radar
KRX Foreign Holding Weekly (Mar 28th): Samsung Electronics, Hanwha Aerospace, SK Hynix
TWSE Short Interest Weekly (Mar 28th): Quanta Computer, Eva Airways, Macronix Intl
A-H Premium Weekly (Mar 28th): Great Wall Motor, China Oilfield Services, Tsingtao Brewery, Cmoc

Thailand Short Interest Weekly (Mar 28th): CP AXTRA, Thai Oil, Central Pattana, Indorama Ventures

We analyzed the changes in short interest of Stock Exchange of Thailand as of Mar 28th.We estimate that they had an aggregated short interest worth USD0.8bn.
We tabulate league table for top short by value and short as multiple of ADT, as well as weekly increases & decreases in short value, short as multiple of ADT.
We highlight short interest changes in CP AXTRA NVDR, Thai Oil, Central Pattana, Indorama Ventures, PTT E&P, Airports of Thailand, Kasikornbank, Bangkok Bank, CP ALL.

TWSE Foreign Holding Weekly (Mar 28th): TSMC, Hon Hai Precision, Quanta Computer, Asustek Computer

We analyzed the changes in foreign holdings of TWSE Stocks as of Mar 28th which has an aggregated holding worth USD902.6bn.
We estimate that foreign flows to be outflows of USD2,403mln. We tabulate the league table for top changes by value for 1W/4W/1Y and top stocks held by foreign institutions.
We highlight changes of foreign holdings in TSMC, Hon Hai Precision Industry, Quanta Computer, Asustek Computer, Eva Airways.

Gold Miners: Off the Radar

By Steven Holden

Despite gold hitting record highs this month, ownership of key gold mining stocks among EM managers remains muted.
AngloGold Ashanti and Harmony Gold Mining have both experienced consistent gains in ownership since their 2023 lows.
Oaktree, Overstone and Vontobel EM strategies hold some of the larger portfolio positions in select Gold stocks.

KRX Foreign Holding Weekly (Mar 28th): Samsung Electronics, Hanwha Aerospace, SK Hynix

We analyzed the changes in foreign holdings of KRX stocks as of Mar 28th which has an aggregated holding worth USD490.5bn.
We estimate that foreign flows to be inflows of USD1,292mln. We tabulate the league table for top changes by value for 1W/4W/1Y and top stocks held by foreign institutions.
We highlight changes of foreign holdings in Samsung Electronics, Hanwha Aerospace, SK Hynix, Hyundai Motor, Kia.

TWSE Short Interest Weekly (Mar 28th): Quanta Computer, Eva Airways, Macronix Intl

We analyzed the changes in short interest of TWSE Stocks as of Mar 28th which has an aggregated short interest worth USD20.8bn.
We tabulate league table for top short by value and short as multiple of ADT, as well as weekly increases & decreases in short value, short as multiple of ADT.
We highlight short interest changes in Quanta Computer, Eva Airways, Macronix International, Sinopac Financial, Largan Precision, Chang Hwa Commercial Bank.

A-H Premium Weekly (Mar 28th): Great Wall Motor, China Oilfield Services, Tsingtao Brewery, Cmoc

We analyse the changes of A-H premium on 150 stocks over the last week.
The average A-H premium was 85.0% as of Mar 28th. The average A-H premium changed by 1.8ppt week-on-week, led by real estate, communication services, financials.
We highlight weekly changes in A-H premium for Great Wall Motor, China Oilfield Services, Tsingtao Brewery, Cmoc, Xinhua Winshare Publishing And Media.

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Mar 31

Daily Brief ECM: ECM Weekly (31st Mar 2025) – Xiaomi and more

By Smartkarma Daily Briefs | Daily Briefs, ECM

In today’s briefing:

ECM Weekly (31st Mar 2025) – Xiaomi, NIO, FCT, Gigabyte, DN Sol, Nanshan Al, Zenergy, LXJ, Veeda

ECM Weekly (31st Mar 2025) – Xiaomi, NIO, FCT, Gigabyte, DN Sol, Nanshan Al, Zenergy, LXJ, Veeda

By Sumeet Singh

Aequitas Research’s weekly update on the IPOs, placements, lockup expiry and other ECM linked events that were covered by the team over the past week.
On the IPO front, DN Solutions (298440 KS)‘s range looks a little pricey, while Eco-Shop Marketing (ECO MY) could trade ahead of its listed peers, in our view.
On the placements front, Xiaomi Corp (1810 HK) matched BYD (1211 HK) in size, but couldn’t do so in returns.

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Mar 31

Daily Brief Thematic (Sector/Industry): Ohayo Japan | Markets Rattled by Tariff Threats and Soaring Inflation Fears and more

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

In today’s briefing:

Ohayo Japan | Markets Rattled by Tariff Threats and Soaring Inflation Fears
Japan Morning Connection: US Defense Secretary Hegseth Reconfirming Commitment to Japan
DeekSeek May Not Be The “Game Changer” In China Healthcare – Time to Be Rational

Ohayo Japan | Markets Rattled by Tariff Threats and Soaring Inflation Fears

By Mark Chadwick

Stocks plunged Friday as trade policy uncertainty and inflation concerns rattled markets. The S&P 500 fell 2% and the Nasdaq sank 2.7%.
Mitsui Sumitomo Insurance will spend ¥420bn to acquire a 15% stake in US insurer W.R. Berkley, gaining expertise in specialty insurance.
SoftBank Group plans to invest around ¥1,000bn in industrial parks across the US, featuring AI-equipped factories. The parks will utilise humanoid robots and AI in production processes

Japan Morning Connection: US Defense Secretary Hegseth Reconfirming Commitment to Japan

By Andrew Jackson

Tech and AI down again ahead of Trump’s tariff ‘liberation day’ on April 2.
Wolfspeed -51% puts Renesas’s $2bn advance payment for SiC under jeopardy.
Dead rat, anyone? Should be positive for Yoshinoya as Sukiya shutters most stores.

DeekSeek May Not Be The “Game Changer” In China Healthcare – Time to Be Rational

By Xinyao (Criss) Wang

Although DeepSeek’s continuous updates, iterations, and deep integration with more and more healthcare enterprises in China will bring positive market sentiment, we have seen certain limitations and even risks behind.
Currently, AI healthcare relies heavily on government subsidies or hardware sales in China, which lacks sustainable payment scenarios and profit model. The data security/privacy/compliance issue may not be completely solve.
For the companies that have integrated with DeepSeek, investors need to verify their afterwards financial performance and fundamentals. If it does not meet expectations, investors are recommended sell in time.

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Mar 31

Daily Brief Event-Driven: [Japan Activism] – KKR and JIC Buy Out Topcon (7732 JP) At ¥3 and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

[Japan Activism] – KKR and JIC Buy Out Topcon (7732 JP) At ¥3,300/Share
Weekly Deals Digest (30 Mar) – Seven & I, Topcon, ENN Energy, Jinke Smart, Sinarmas Land, Gold Road
Korea Short Selling: Off to the Races
Jinke Smart Services (9666 HK): Boyu to Launch a Privatisation Offer?
Vesync (2148 HK): Scheme Vote on 23 April
Merger Arb Mondays (31 Mar) – ENN Energy, ESR, Vesync, Seven & I, Topcon, Sinarmas Land, Gold Road
Vesync (2148 HK): 23rd April Scheme Vote. Done Deal
The Reject Shop: Dollarama’s Done Deal
MFE Tunes In to ProSieben for a Pan-European Broadcast Power Play

[Japan Activism] – KKR and JIC Buy Out Topcon (7732 JP) At ¥3,300/Share

The difference between an LBO (Leveraged Buy Out) and an MBO (Management Buy Out) is that an MBO is usually just an LBO where the buyers don’t replace the CEO.
After 4+mos of speculation/noise since a Bloomberg article said Topcon was weighing takeover bids, we have a deal. KKR and JIC will buy out Topcon in an “MBO” at ¥3,300/share.
Unusually, the lower limit is 50.1%. This is an OK exit for the “Bad Cops” but not a great one. It should be higher. Start delayed for 4 months.

Weekly Deals Digest (30 Mar) – Seven & I, Topcon, ENN Energy, Jinke Smart, Sinarmas Land, Gold Road

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: DN Solutions (298440 KS) seeks to raise US$1.1 billion in a KRX IPO.
Event-Driven developments: Seven & I Holdings (3382 JP), Topcon Corp (7732 JP), ENN Energy (2688 HK), Jinke Smart Services (9666 HK), Sinarmas Land (SML SP), Gold Road Resources (GOR AU).

Korea Short Selling: Off to the Races

Short selling in Korea resumes in a couple of hours. Expect heightened volatility for a few days before things settle down.
Foreign investors have increased their holdings over the last five weeks and there could be further buying in select stocks on stock price drops.
The KOSPI 200 INDEX has outperformed the KOSDAQ 150 Index, and the forecast index deletes have underperformed the indices indicating that there will be positioning for the short-sell resumption.

Jinke Smart Services (9666 HK): Boyu to Launch a Privatisation Offer?

Jinke Smart Services (9666 HK) is in a trading halt “pending the release of an announcement pursuant to the Hong Kong Code on Takeovers and Mergers which constitutes inside information.”
It is likely that Boyu, the largest shareholder, is seeking to privatise Jinke. The privatisation of PRC-incorporated entities is usually done through a merger by absorption.
I use several methods to triangulate the likely offer price, which suggests a price range of HK$10.00-16.86, with an average of HK$12.47, a 45% premium to the last close.

Vesync (2148 HK): Scheme Vote on 23 April

Vesync (2148 HK)’s IFA opines that the Yang family’s HK$5.60 cash offer is fair and reasonable. The IFA does not recommend the scrip option. The vote is on 23 April.
Key conditions include approval by at least 75% of independent shareholders (<10% of independent shareholders rejection). The offer price is final.
The vote is low-risk due to a lack of opposition. At the last close and for the 15 May payment, the gross/annualised spread is 2.9%/28.7%.

Merger Arb Mondays (31 Mar) – ENN Energy, ESR, Vesync, Seven & I, Topcon, Sinarmas Land, Gold Road

We summarise the latest spreads and newsflow of merger arb situations we cover across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
Highest spreads: ENN Energy (2688 HK), Seven & I Holdings (3382 JP), OneConnect Financial Technology (OCFT US), Insignia Financial (IFL AU), Smart Share Global (EM US), Soundwill Holdings (878 HK).
Lowest spreads: Makino Milling Machine Co (6135 JP), Shibaura Electronics (6957 JP), PointsBet Holdings (PBH AU), Millennium & Copthorne Hotels Nz (MCK NZ), Tonami Holdings (9070 JP).

Vesync (2148 HK): 23rd April Scheme Vote. Done Deal

By David Blennerhassett

On the 27th December, Vesync (2148 HK), a manufacturer of small home appliances, announced an Offer, by way of a Scheme, from the Yang family controlling ~69.04% of Vesync.
The Cancellation Price of $5.60/share – declared final – was a 33.3% premium to undisturbed, and above the 2020 IPO price of HK$5.52/share.
The Scheme Doc is now out, with a Court Meeting on the 23rd April, and expected payment on or before the 15th May. The IFA (Somerley) says “fair & reasonable”.

The Reject Shop: Dollarama’s Done Deal

By David Blennerhassett

Reject Shop (TRS AU), a discount variety store, has entered into a Scheme Implementation Deed with Canadian outfit Dollarama (DOL CN).
Dollarama is offering A$6.68/share, a 112% premium to last close. The Offer does NOT require FIRB signing off. The Offer has the unanimous backing of both boards.
The Offer also has the backing of TRS’ largest shareholder, Kin Group (20.8%). Implementation is expected July 2025. This is done.

MFE Tunes In to ProSieben for a Pan-European Broadcast Power Play

By Jesus Rodriguez Aguilar

MFE’s €5.70/share offer reflects strategic aims, not a traditional control premium, and values ProSieben near peer multiples amid industry disruption and weak organic growth prospects.
The deal structure and German takeover law enable MFE to carry out a creeping takeover strategy, allowing it to gradually increase its stake post-settlement without launching a new public offer.
Estimated net synergies of €1.00–1.39 per share, boosting the deal’s potential strategic return.Market skepticism is visible in the -10.2% gross spread.

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Mar 31

Daily Brief Credit: EM Spreads – Weekly News & Views and more

By Smartkarma Daily Briefs | Credit, Daily Briefs

In today’s briefing:

EM Spreads – Weekly News & Views

EM Spreads – Weekly News & Views

By Leandro Gubler

Argentina’s $20 Billion IMF Deal Could Calm Markets Ahead of Midterms
Pemex Monthly Report: February/Minerva Positioned to Benefit from China’s Shift in Protein Imports
Cemex: Stable Outlook Affirmed Despite Hybrid Reclassification Dragging Metrics/ YPF Launches “Vaca Muerta Institute” to Support Shale Growth

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

Mar 31

Daily Brief Equity Bottom-Up: Taiwan Dual-Listings Monitor: TSMC Spread Close to Long Level; UMC & ASE Deep Discounts and more

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

In today’s briefing:

Taiwan Dual-Listings Monitor: TSMC Spread Close to Long Level; UMC & ASE Deep Discounts
CICC (3908 HK): Underestimated by the Market
Global Digital Niaga (BELI IJ) – Firmer Underfoot for the Dark Horse
Edelweiss: Growing Well and Unlocking Value
Nuvama: Yet Another Strong Quarter
Nesco: Strong Q3FY25
Delta Taiwan Vs. Thailand Monitor: Delta Thailand Crash Closes Gap, But Still Relatively Expensive
HCG: Strong Q3FY25 and Promoter Change Update
RPPL: Weak Q3FY25, However Medium-Term Outlook Is Strong
Sariguna Primatirta (CLEO IJ) – Pure Water on the Move

Taiwan Dual-Listings Monitor: TSMC Spread Close to Long Level; UMC & ASE Deep Discounts

By Vincent Fernando, CFA

TSMC: +14.9% Premium; Spread Has Fallen Close to Long Levels
UMC: -2.6% Discount; Good Level to Go Long the Spread
ASE: -3.2% Discount; Spread at Extreme Low, Good Level to Go Long

CICC (3908 HK): Underestimated by the Market

By Osbert Tang, CFA

China International Capital Corporation (3908 HK)‘s 2H24 net profit surged 33.6% in 2H24, reversing the downtrend in 1H24. It has benefited from lower staff and other operating costs.
Better 1Q25 market turnover and activities, more IPOs and placements and improved cost dynamics imply that the consensus forecasts are too conservative.
Its 0.55x P/B cannot adequately reflect better profitability. Despite the denial, CICC’s potential merger with China Galaxy Securities (H) (6881 HK) cannot be completely ruled out.

Global Digital Niaga (BELI IJ) – Firmer Underfoot for the Dark Horse

By Angus Mackintosh

Global Digital Niaga (BELI IJ) booked a strong finish to 2024, driven by its 3P retail and institutional business, although 1P retail and physical stores also performed well.
The company continues to see improving take rates in FY2024, whilst its average order value increased through a more favourable product mix, with gross margins and cash flows improving significantly.
Global Digital Niaga continued to expand its physical stores for monobrand and multibrand stores, adding Huawei as a brand. Valuations look reasonable given growth prospects and progress towards profitability.

Edelweiss: Growing Well and Unlocking Value

Edelweiss reported a decent Q3FY25 with ex-Insurance PAT of INR 185cr, a growth of 16% YoY excluding NBFC PAT. Growth was led by Asset Management and Insurance businesses.
Within the Credit business, the Home Finance business which operates under the brand Nido is scaling up well. It disbursed INR 400cr+ worth of retail loans during Q3FY25.
Edelweiss is focusing on unlocking value and has already filed DRHP for its Alternative Asset Management business. Once approved, it will proceed for an IPO with OFS of INR 1500cr.

Nuvama: Yet Another Strong Quarter

Nuvama continues to post strong earnings. Its Q3FY25 revenues grew 30% YoY to INR 723cr. Q3FY25 PAT grew 43% YoY to INR 252cr.
Q3FY25 performance was surprisingly led by the Asset Services segment where revenue grew 77% YoY with addition of new clients and positive asset flow, leading to market share gain.
Together the Wealth and Asset Management segments performed steady with revenue growth of 18% YoY. Net flows in 9MFY25 in ARR and MPIS assets exceeded that for whole of FY24.

Nesco: Strong Q3FY25

Nesco reported a strong Q3FY25 with 16% YoY revenue growth and 17% YoY PAT growth. The exhibitions (BEC) segment grew 13% YoY and the IT Parks segment grew 16% YoY.
Nesco Foods segment reported 29% YoY growth in revenues led by improved BEC footfalls and scaling up of the Food Court and Restaurants business.
Recently, Nesco also received IOD from the municipal corporation of Mumbai, thus paving way for receiving future approvals for Tower 2. Tower 2 construction is expected to commence in Q3FY26.

Delta Taiwan Vs. Thailand Monitor: Delta Thailand Crash Closes Gap, But Still Relatively Expensive

By Vincent Fernando, CFA

Delta Thailand Has Dramatically Underperformed Delta Taiwan — Delta Thailand Now Finally Trading at a Less Extreme Level vs. Delta Taiwan
Latest Relative Growth Profiles — Delta Taiwan Has Higher Growth Profile in 2025E
Even After the Major Pricing Reversion Since Mid-February, Delta Thailand Remains Overvalued Relative to Delta Taiwan

HCG: Strong Q3FY25 and Promoter Change Update

HealthCare Global Enterprises (“HCG”) reported a strong Q3FY25 despite Q3 being a seasonally weak quarter. Revenue growth was strong across both the established centers and the emerging centers.
Revenue from established centers grew 20% YoY while that from emerging centers grew 25% YoY in Q3FY25. Within emerging centers, Kolkata led the growth with 40% YoY rise in revenues.
HCG saw promoter change in Feb 2025. KKR announced acquisition of 54% stake from CVC who owns around 60%+. Dr. BS Ajaikumar, the founder promoter, will continue to own 10%+.

RPPL: Weak Q3FY25, However Medium-Term Outlook Is Strong