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Smartkarma Daily Briefs

Daily Brief ESG: More Companies Will Choose to Go Private Because They Can’t Find an Effective Use for Their Cash and more

By | Daily Briefs, ESG

In today’s briefing:

  • More Companies Will Choose to Go Private Because They Can’t Find an Effective Use for Their Cash
  • Reno De Medici – ESG Report – Lucror Analytics


More Companies Will Choose to Go Private Because They Can’t Find an Effective Use for Their Cash

By Aki Matsumoto

  • The problem lies in the fact that even with a 10% increase in net profit, ROE only grew by 0.5%. This is due to having too much cash on hand.
  • TSE has provided an opportunity for companies to develop measures to increase their corporate value. However, not many companies can derive concrete ways to effectively use cash.
  • Since many companies are expected to take time to find concrete solution to this problem, an increasing number of companies are expected to go private once they have done so.

Reno De Medici – ESG Report – Lucror Analytics

By Leonard Law, CFA

Lucror Analytics’ ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable).
We assess Reno de Medici’s ESG as “Adequate”, in line with its Environmental and Governance scores. The company has a “Strong” score for the Social pillar. Controversies are “Immaterial” and Disclosure is “Strong”. 


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Daily Brief Thematic (Sector/Industry): Japan Weekly | Nikkei Takes a Dive and more

By | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

  • Japan Weekly | Nikkei Takes a Dive
  • AUCTUS ON FRIDAY – 19/04/2024
  • [Blue Lotus Daily]:1810 HK/1211 HK/LI US/XPEV US/NIO US/BEKE US/300750 SZ
  • [Blue Lotus Daily – TMT Update]:PDD US /BABA US /JD US /3690 HK/VIPS/NTES US/BIDU US/SHEIN/AMZN 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. 

AUCTUS ON FRIDAY – 19/04/2024

By Auctus Advisors

  • Tethys Oil (TETY SS)C; target price of SEK100 per share: Increasing further the size of the prize/Considering Algeria – The South Lahan area on Block 58 is estimated to hold 55-523 mmbl prospective resources (P90-P10 case) with a mean case of 251.8 mmbbl prospective resources across six prospects in the Ara Carbonate.
  • Combined with the previously disclosed prospective resources of the Fahd area in the north-eastern part of Block 58, Tethys Oil’s unrisked recoverable prospective resources on the block are estimated to be 435.9 mmbbl (Pmean).
  • The geological chance of success ranges from 6% to 11% for the six new prospects.

[Blue Lotus Daily]:1810 HK/1211 HK/LI US/XPEV US/NIO US/BEKE US/300750 SZ

By Eric Wen

  • 1810HK/1211HK/LI/XPEV/NIO: The growth rate of new energy vehicles fell back in the 15th week of 2024,BYD and Li delivered stably,AITO slowed down due to L6,XiaomiSU7 impacting TeslaM3 and BYDHan(/)
  • BEKE US: Residential new home sales value fell by 30% YoY in 1Q24, but slightly better than consensus(+)
  • 300750 SZ: CATL’s first quarter results show strong pricing power amid fierce price war(/)

[Blue Lotus Daily – TMT Update]:PDD US /BABA US /JD US /3690 HK/VIPS/NTES US/BIDU US/SHEIN/AMZN US

By Ying Pan

  • PDD/BABA/JD/3690.HK/VIPS: NBS publishes data social retail data for March 2024 (+/////-)
  • NTES US: NetEase’s <Naraka Mobile>, has completed its pre-launch testing phase with overall positive feedback, and pre-registration reached 25 million. (+)
  • BABA US/3690 HK : Eleme launches semi-managed mode for retail merchants, adding pressure to Meituan instashopping

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Daily Brief Technical Analysis: Pullback Underway; Further Downside Limited?; Buys in Defensives and Commodity-Related Sectors and more

By | Daily Briefs, Technical Analysis

In today’s briefing:

  • Pullback Underway; Further Downside Limited?; Buys in Defensives and Commodity-Related Sectors


Pullback Underway; Further Downside Limited?; Buys in Defensives and Commodity-Related Sectors

By Joe Jasper

  • A pullback in global equities is underway following steep uptrend violations on MSCI ACWI (ACWI-US) and EURO STOXX 50. Both are 4-5% off their highs; further downside may be limited.
  • Several 5%-10% pullbacks are to be expected in any given year, particularly after the historic 5-month rallies, so we view this as healthy and normal within the ongoing bull market.
  • ACWI-US is currently testing important support at $105; if this area were to break, next major supports are $102 and $99; this is where we would be buying.

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Daily Brief Credit: Morning Views Asia: China Jinmao Holdings and more

By | Credit, Daily Briefs

In today’s briefing:

  • Morning Views Asia: China Jinmao Holdings, JSW Steel Ltd, Sands China, Yuexiu Property


Morning Views Asia: China Jinmao Holdings, JSW Steel Ltd, Sands China, Yuexiu Property

By Leonard Law, CFA

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.


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Daily Brief ECM: Will the Hyundai Marine Solution IPO Follow in Ecopro Materials’ Footsteps After It Goes Public? and more

By | Daily Briefs, ECM

In today’s briefing:

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


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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Daily Brief Event-Driven: Quiddity Leaderboard S&P 500 June 2024 – Minimal Changes Expected but Intrareview Changes Possible and more

By | Daily Briefs, Event-Driven

In today’s briefing:

  • Quiddity Leaderboard S&P 500 June 2024 – Minimal Changes Expected but Intrareview Changes Possible
  • Quiddity Leaderboard KOSPI 200 Jun 24: Four Changes Likely
  • EQD | S&P500 Futures (ES) Deeply Oversold WEEKLY, Reversal (Probably) Imminent


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

By Travis Lundy

  • 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

By Travis Lundy

  • 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.

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.

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Daily Brief Equity Bottom-Up: ASML. Maintaining 2024 Guidance Despite Sharp Decline In New Bookings and more

By | Daily Briefs, Equity Bottom-Up

In today’s briefing:

  • ASML. Maintaining 2024 Guidance Despite Sharp Decline In New Bookings
  • China Tourism Group Duty Free (1880 HK):  Headwinds Persist
  • Vinfast (VFS US) – Some Respite from the US
  • PT Avia Avian (AVIA IJ) – An Attractive Tint to 2024 Prospects
  • Braze Inc.: First-Party Data Investment As An Important Business Model! – Major Drivers
  • Nike Inc.: A Tale Of Brand Elevation Through Greater Market Presence! – 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
  • Potential Domestic Rate Hike Impacts Highlighted in the BoJ’s Latest Financial System Report
  • Mmg Limited 1208.HK – It’s Got It All – Copper, EV’s, and AI!


ASML. Maintaining 2024 Guidance Despite Sharp Decline In New Bookings

By William Keating

  • ASML reported Q124 revenues of €5.3 billion, in line with expectations, down 27% QoQ and down 21% YoY.
  • Guided Q224 for €5.95 billion, down ~23% YoY. This implies H224 will have to be much stronger than H124 in order to maintain full year 2024 guidance of flat YoY
  • New order intake was €3.6 billion, down significantly from the €9.2 billion in the prior quarter, and challenging the narrative of a strong growth year in 2025

China Tourism Group Duty Free (1880 HK):  Headwinds Persist

By Steve Zhou, CFA

  • Since my previous insight on China Tourism Group Duty Free (1880 HK) in October 2023, the stock has declined 33%, and year-to-date, the stock has declined 13%.
  • The company faces headwinds from continued overall weakness in Hainan duty free sales and potentially increased competition in Hainan.
  • The company already announced preliminary 1Q24 results, with sales down 9% yoy and net profit flat.  The company is trading at 18x 2024 earnings.

Vinfast (VFS US) – Some Respite from the US

By Angus Mackintosh

  • Vinfast (VFS US) released 1Q2023 results, with its revenues increasing three-fold YoY but falling QoQ due to the seasonal impact of Lunar New Year on both EVs and EV motorbikes.
  • The company saw a significant pick up in its sales to the US and continued to increase its dealer network which should drive future sales along with new models.
  • More than half of Vinfast sales were to related parties, which is an overhang in terms of the sustainability of its business models, whilst valuations remain above peers.

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.

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

By Baptista Research

  • 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.

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

By Baptista Research

  • 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.

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

By Baptista Research

  • 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

By Baptista Research

  • 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.

Potential Domestic Rate Hike Impacts Highlighted in the BoJ’s Latest Financial System Report

By Victor Galliano

  • The Financial System Report published on April 18th focuses on the key Japanese bank issues, including the prospect of domestic rate hikes
  • We focus primarily on the key take-aways from the BoJ report, in particular with relation to potential rate hikes; our key picks appear to be better geared than the average
  • We highlight Resona, Mizuho and Concordia in the bigger caps, with positive views on Suruga, Gunma and Tokyo Kiraboshi in the regional banks

Mmg Limited 1208.HK – It’s Got It All – Copper, EV’s, and AI!

By Rikki Malik

  • Low-Cost producer of copper and zinc with two of the biggest  ten mines in the world.
  • Recent mine acquisition and increased production at existing mines will grow earnings.
  • The supply and demand imbalance in copper will lead to higher prices.

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Daily Brief Macro: The Liquidity ‘Air Pocket’: A Short Update After US Tax Filing-Week and more

By | Daily Briefs, Macro

In today’s briefing:

  • The Liquidity ‘Air Pocket’: A Short Update After US Tax Filing-Week
  • Global Funds Q1 Review: Benefiting from Underweights in Apple & Tesla
  • Walker’s Weekly: Dr. Jim’s Summary of Key Global Macro Developments – 19 Apr 2024
  • HEW: Reflating Tighter for Longer
  • The Weekly Market Monitor – Rockets Roar While Hawks Take Off


The Liquidity ‘Air Pocket’: A Short Update After US Tax Filing-Week

By Michael J. Howell

  • Global Liquidity has been the key factor driving risk assets higher. It faces a short-term air pocket that investors need to understand
  • Three factors are dragging Global Liquidity — the US Fed, the PBoC and the rising MOVE Index
  • Most important near-term, the US money market liquidity has suffered a major hit this week following the April 15th Tax-filing deadline. Next up the QFA at month-end

Global Funds Q1 Review: Benefiting from Underweights in Apple & Tesla

By Steven Holden

  • Strong start to 2024, but majority underperform: Average returns of 7.6% lags the SPDRs MSCI ACWI ETF by -0.33%, with 44% of funds outperforming.
  • USA Technology Drives Returns: US Tech sector accounts for 1/4 of total returns in Q1. China & India Financials a drag on performance.
  • Apple and Tesla Positions Outperform: Underweights in both stocks help claw back losses made due to NVIDIA underweights.

Walker’s Weekly: Dr. Jim’s Summary of Key Global Macro Developments – 19 Apr 2024

By Dr. Jim Walker

  • China’s GDP Performance: China’s first quarter GDP growth exceeded expectations at 5.3%, sparking debates about data accuracy and manipulation.
  • Singapore’s Economic Revisions: Singapore’s initial growth estimate of 0.5% was later revised down to 0.1%, underscoring challenges in producing accurate forecasts.
  • Regional Trade Dynamics: While China reported a contraction in exports, a closer look revealed modest export growth. Japan and Korea struggled with declining exports and imports, highlighting challenges in domestic demand.

HEW: Reflating Tighter for Longer

By Phil Rush

  • Despite no policy decisions this week, hawkish moves continued as UK price and wage inflation exceeded expectations and FOMC comments suggested another rate hike. The belief remains that the BoE should cut later than the Fed.
  • The upcoming week is expected to be quiet for monetary policy announcements, with the BOJ and Bank Indonesia being the main ones.
  • The flash PMIs are the data highlight of the week, along with the Q1 GDP, March PCE and durable goods data from the US.

The Weekly Market Monitor – Rockets Roar While Hawks Take Off

By Jeroen Blokland

  • Geopolitical tensions and worries about inflation are overshadowing intrinsically bullish market sentiment and decent earnings reports.
  • Contrary to what has become the latest market muse, higher interest rates do not explain the resilience of the US consumer and economy.
  • China’s data dump raises serious questions about its true underlying growth momentum, suggesting that its consumers will continue to buy gold.

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Daily Brief Energy/Materials: Azure Minerals, HighPeak Energy Inc, Jericho Energy Ventures , Ocean Power Technologies and more

By | Daily Briefs, Energy & Materials Sector

In today’s briefing:

  • Azure Min’s (AZS AU)’s “Boost” As Gina Ups Stake in Lynas
  • HighPeak Energy, Inc. -Moderating Growth for Free Cash Flow Generation
  • JEV: Exploring Spin-off for Hydrogen Assets
  • Ocean Power Technologies, Inc. – Announces MDAS Agreement…


Azure Min’s (AZS AU)’s “Boost” As Gina Ups Stake in Lynas

By David Blennerhassett

  • 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.

HighPeak Energy, Inc. -Moderating Growth for Free Cash Flow Generation

By Water Tower Research

  • HighPeak has pivoted its FY24 development plan to concentrate on free cash flow generation from growth.
  • Our updated adjusted EBITDA and free cash flow estimates, incorporating NYMEX reference prices of $79.19/bbl for oil and $2.33/MMBtu for natural gas, are $858 million and $168 million, respectively.
  • FY23 free cash flow was negative $271 million.

JEV: Exploring Spin-off for Hydrogen Assets

By Atrium Research

  • What you need to know: • JEV announced that it has commenced a strategic process to explore the spin-off of its hydrogen portfolio.
  • We view this as a strong positive for shareholders.
  • • Over the past month, JEV also closed a $2.2M private placement and amended the terms on its debentures, setting up the Company for this transaction.

Ocean Power Technologies, Inc. – Announces MDAS Agreement…

By Water Tower Research

  • OPT has entered into a teaming agreement with a major international defense contractor to offer OPT’s Merrows suite of solutions in specific international regions.
  • The partnership aims to improve maritime domain awareness through OPT’s Maritime Domain Awareness Solution (MDAS).
  • The agreement grants the defense contractor exclusive rights to sell MDAS in certain areas. 

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Daily Brief Utilities: ENN Energy and more

By | Daily Briefs, Utilities Sector

In today’s briefing:

  • ENN Energy – Tear Sheet – Lucror Analytics


ENN Energy – Tear Sheet – Lucror Analytics

By Leonard Law, CFA

We view ENN Energy as “Low Risk” on the LARA scale. This reflects the company’s large scale and diversified business profile across Mainland China as well as its robust financial position, with low leverage. These are balanced against ENN Energy’s exposure to commodity price risks and potential changes in government policies. In addition, the company has ongoing related-party transactions.

Our fundamental Credit Bias on ENN Energy is “Stable”, supported by the defensive nature of the industry and the company’s good cash-flow generation. ENN Energy has maintained c. 1.0x net leverage over the past five years.

Controversies are “Immaterial” and the ESG Impact on Credit is “Neutral”. While natural gas is a fossil fuel, it has a lower carbon footprint compared to coal, and has been regarded as a “transition fuel” for countries currently dependent on coal (e.g. China and Indonesia). This will likely support strong gas demand over the next decade, particularly in developing countries.

We have a “Hold” recommendation on the XINAOG notes, with the 2.625 ’30s at 83.9/5.6%/5.7 years.


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