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Smartkarma Daily Briefs

Daily Brief Thailand: Valeura Energy Inc and more

By | Daily Briefs, Thailand

In today’s briefing:

  • Valeura Energy (TSX: VLE): Net cash up by >US$40 mm since YE23


Valeura Energy (TSX: VLE): Net cash up by >US$40 mm since YE23

By Auctus Advisors

  • 1Q24 production was 21.9 mbbl/d in line with our expectations.
  • Production at the end of March was ~23 mbbl/d.
  • Net cash of US$193.6 mm (US$176.3 mm unrestricted) was high given that the company sold only 1.8 mmbbl in 1Q24 with inventory building-up ~0.21 mmbbl vs YE23 to 0.9 mmbbl.

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Daily Brief South Korea: ICTK and more

By | Daily Briefs, South Korea

In today’s briefing:

  • ICTK IPO Preview


ICTK IPO Preview

By Douglas Kim

  • ICTK is getting ready to complete its IPO in KOSDAQ in May. The IPO price range is from 13,000 won to 16,000 won. 
  • According to the bankers’ valuation, the expected market cap of the company after the listing is 171 billion won to 210 billion won. 
  • ICTK is a security company specializing in Internet of Things (IoT) based on physical copy prevention technology. 

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Daily Brief Singapore: Elite Commercial REIT and more

By | Daily Briefs, Singapore

In today’s briefing:

  • Smartkarma Corporate Webinar | Elite Commercial REIT: Essential Assets at an Attractive Yield


Smartkarma Corporate Webinar | Elite Commercial REIT: Essential Assets at an Attractive Yield

By Smartkarma Research

For our next Corporate Webinar we are glad to welcome Elite Commercial REIT’s CEO, Mr Joshua Liaw.

In the upcoming webinar, Joshua will share a short company presentation after which, he will engage in a fireside chat with Smartkarma Insight Provider, Sumeet Singh

Sumeet will also be providing an industry overview, featuring landscape commentary and returns analysis. The Corporate Webinar will include a live Q&A session.

In the spirit of giving back to our community, one of the attendees will also be awarded an Amazon Kindle as part of our exclusive lucky draw. 

The Corporate Webinar will be hosted on Monday, 15 April 2024, 19:00 SGT.

About Elite Commercial REIT

Elite Commercial REIT (“Elite REIT”) is a Singapore real estate investment trust established with the investment strategy of principally investing, directly or indirectly, in commercial real-estate related assets in the United Kingdom (“UK”). Elite REIT is the only UK REIT listed in Pound sterling on the Singapore Exchange.

Elite REIT’s portfolio (“Portfolio”) comprises predominantly freehold properties strategically located mainly in town centres, and near amenities and transportation nodes. The Portfolio offers a stable government-backed income stream with over 99% of the gross rental income derived from the UK Government, backed by AA-rated sovereign credit strength. The leases are on triple net basis and Elite REIT is one of the largest providers of critical social infrastructure to the Department for Work and Pensions (“DWP”) and other UK Government departments. The DWP is the UK’s largest public service department that is responsible for welfare, pensions and child maintenance policy, serving over 20 million claimants and customers. The Portfolio is part of the crucial social infrastructure through which the DWP provides services to local communities.


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Daily Brief United States: Copper, iShares MSCI Emerging Markets, Netgear Inc and more

By | Daily Briefs, United States

In today’s briefing:

  • Will Copper Shine Brighter than Gold?
  • Long-Term Breakouts for Emerging and Frontier Markets; Treasury Yields and Commodities Rising YTD
  • NTGR: The Value of an Upgrade Cycle


Will Copper Shine Brighter than Gold?

By Pranay Yadav

  • Copper supply facing headwinds with a shortage of copper ore which has led to spiraling copper refining margins.
  • Copper futures trading sharply higher than cash prices and term structure for copper futures has steepened. 
  • Gold to copper ratio can be used to express a bullish view on copper prices with relatively lower risk compared to a straightforward long copper position. 

Long-Term Breakouts for Emerging and Frontier Markets; Treasury Yields and Commodities Rising YTD

By Joe Jasper

  • The bullish outlook we initiated in early November 2023 remains intact. The SPX and QQQ still refuse to close below their 20-day MAs/21-day EMAs for more than 2-3 consecutive days.
  • Even if/when they do, important supports are close by, including 4983-5050 on the S&P 500 and $425-$433 on QQQ (gap supports from 2/22/24). Anything above 4800 SPX is a buy.
  • We continue to get an ever-increasing number of global indexes/Sectors with long-term breakouts, the latest being the MSCI Emerging Market and Frontier indexes. Clearly risk-on behavior.

NTGR: The Value of an Upgrade Cycle

By Hamed Khorsand

  • The first quarter is seasonally the softest for selling wireless routers. The expectations for NTGR are for the firm to generate positive free cash flow while revenue declines sequentially. 
  • We are anticipating NTGR’s cash per share to reach approximately $12 for the March quarter and maintain a forecast of $14 per share by the end of 2024
  • The price competition at the lower end remains unchanged and dependent on NTGR clearing out inventory ahead of the peak selling period in the second half of the year

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Daily Brief India: Bharti Hexacom and more

By | Daily Briefs, India

In today’s briefing:

  • Bharti Hexacom IPO: Index Inclusion Timeline


Bharti Hexacom IPO: Index Inclusion Timeline

By Brian Freitas

  • Telecommunications Consultants India Limited (TCIL) raised US$513m by selling 15% of the shares outstanding in Bharti Hexacom (6597372Z IN). Post the sale, they still hold 15% of the company.
  • Bharti Hexacom (6597372Z IN) will start trading on 12 April and the grey market indicates the stock will open at INR 664/share, 16.5% higher than the IPO price.
  • Bharti Hexacom should be added to one smallcap index in August and another smallcap index in December. A move above INR 700/share could result in midcap inclusion in December.

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Daily Brief China: 3peak , Bank of Communications , CSPC Innovation Pharmaceutical-A, China Shineway Pharmaceutical, China Vanke and more

By | China, Daily Briefs

In today’s briefing:

  • Quiddity Leaderboard STAR 50 Jun 24: 3 ADDs/DELs Possible but Should Be Monitored Closely
  • SSE50 Index Rebalance Preview: 5 Changes and US$2.7bn Round-Trip Trade
  • Quiddity Leaderboard ChiNext & ChiNext 50 Jun 24: Bullish Names Outperform Bearish Names Again
  • China Shineway Pharmaceutical (2877.HK) – 24H1 Looks Challenging, but Things Get Better in 24H2
  • Morning Views Asia: China Vanke , Melco Resorts and Entertainment (Philippines)


Quiddity Leaderboard STAR 50 Jun 24: 3 ADDs/DELs Possible but Should Be Monitored Closely

By Janaghan Jeyakumar, CFA

  • STAR 50 Index is a tech-focused, blue-chip index in Mainland China which tracks the top 50 largest and most liquid names in the STAR market of the Shanghai Stock Exchange.
  • In this insight, we take a look at our expectations for potential ADDs and DELs for the STAR 50 index during the June 2024 index rebal event.
  • I currently expect three changes resulting in a one-way flow of around US$531mn but there is still room for the expectations to change.

SSE50 Index Rebalance Preview: 5 Changes and US$2.7bn Round-Trip Trade

By Brian Freitas

  • With the review period nearing completion, 6 stocks are in inclusion zone and 8 are in deletion zone. However, there can be a maximum of 5 changes at a review.
  • We estimate a one-way turnover of 7% at the June rebalance leading to a one-way trade of CNY 9.7bn (US$1.34bn). Index arb balances could increase the impact on the stocks.
  • The inflows into mainland China ETFs have further increased the flow and impact on the potential changes. The potential adds have continued to outperform the potential deletes.

Quiddity Leaderboard ChiNext & ChiNext 50 Jun 24: Bullish Names Outperform Bearish Names Again

By Janaghan Jeyakumar, CFA

  • The ChiNext Index represents the performance of the 100 largest and most liquid A-share stocks listed on the ChiNext Market of the Shenzhen Stock Exchange.
  • The ChiNext 50 index is a subset of the ChiNext Index and it consists of the top 50 names in the ChiNext index with the highest daily average turnover.
  • In this insight, we take a look at the names leading the race to become ADDs and DELs in the June 2024 index rebal event.

China Shineway Pharmaceutical (2877.HK) – 24H1 Looks Challenging, but Things Get Better in 24H2

By Xinyao (Criss) Wang

  • Shineway’s performance in 23H2 was disappointing, mainly due to the VBP of formula granules and anti-corruption campaign. Accordingly, TCM injection and TCM formula granule businesses had negative growth in 23Q4.
  • As the NHSA has further lifted the reimbursement restrictions on Chinese medicine injections, Shineway’s injection business is expected to help “hedge against” the headwinds in TCM formula granule business.
  • 24H1 growth is under pressure due to 23H1 high base. Growth in 24H2 would pick up.As long as TCM favorable policies remain, profit is expected to increase by 20%-30% annually.

Morning Views Asia: China Vanke , Melco Resorts and Entertainment (Philippines)

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 Japan: Aozora Bank Ltd, Chilled & Frozen Logistics Holdings, Sompo Holdings, Trial Holdings, Amvis Holdings Inc and more

By | Daily Briefs, Japan

In today’s briefing:

  • JAPAN ACTIVISM: Murakami’s Aozora Bet Not Going Anywhere, But No Sales Yet
  • Chilled & Frozen Logistics (9099 JP): Pass The🍿as the Board Responds to AZ-COM Maruwa (9090 JP)
  • Sompo Holdings Cross-Shareholding – At Least US$8bn of Cross-Shareholding to Sell
  • Trial to Become 5th Biggest Supermarket Post-IPO
  • Amvis Holdings Inc (7071 JP): Buy the Dip; Time to Reap Benefit of Business Expansion


JAPAN ACTIVISM: Murakami’s Aozora Bet Not Going Anywhere, But No Sales Yet

By Travis Lundy

  • Just under 6 weeks ago, Japanese activist Murakami-san’s company and daughter reported a 5+% stake in Aozora Bank Ltd (8304 JP). They bought after a sharp dip caused CRE-related writedowns. 
  • As is normal, they bought more (now 8.92%) post-5%-filing-trigger, but before the actual first filing. And as is normal these days, the stock popped on the first filing.
  • Then it fell, and hasn’t recovered much. So far, on a weighted basis, they are up 1% vs TOPIX Banks Index. 

Chilled & Frozen Logistics (9099 JP): Pass The🍿as the Board Responds to AZ-COM Maruwa (9090 JP)

By Arun George

  • The Chilled & Frozen Logistics Holdings (9099 JP) Board has responded with several questions regarding AZ-Com Maruwa Holdings (9090 JP)’s pre-conditional hostile offer of JPY3,000 per share.
  • The Board questions the transaction’s schedule, terms and potential synergies. The Board has also used the ruse that due diligence access would justify a higher offer price.
  • Expect several rounds of Q&A and a delay to the tender start. If shares continue trading through terms ahead of the tender start, AZ-COM Maruwa will likely have to bump. 

Sompo Holdings Cross-Shareholding – At Least US$8bn of Cross-Shareholding to Sell

By Sumeet Singh

  • The Japanese Financial Services Agency has asked the general insurers to reduce/eliminate their cross-shareholdings.
  • Sompo Holdings (8630 JP) had a stake over US$100m in at least 16 listed Japanese stocks, amounting to a total of around US$6bn.
  • In this note, we take a look at its stakes in various companies to see which ones could possibly be candidates for further selldowns.

Trial to Become 5th Biggest Supermarket Post-IPO

By Michael Causton

  • Trial, the discount FMCG and retail technology company, completed its IPO last month, achieving an initial market capitalisation higher than most of its rivals in the supermarket sector. 
  • If forecasts for FY2023 are achieved, it will become the 5th largest chain in the country and its proprietary technology should give it an important advantage in the medium term.
  • But its position at the centre of the fast-growing discount sector will drive the real growth, and the Kyushu-based firm will emerge as challenger to leading retailers.

Amvis Holdings Inc (7071 JP): Buy the Dip; Time to Reap Benefit of Business Expansion

By Tina Banerjee

  • Amvis Holdings Inc (7071 JP) opened 57 facilities during FY20–23, which raised total borrowings 37% YoY to ¥17B in FY23 and further to ¥19B at the end of Q1FY24.
  • The impact of the monetary policy is expected to be immaterial based on the current interest incidence of just 0.44%. Interest expenses account for less than 1% of revenue.
  • Amvis started FY24 on a solid note, with all key parameters reporting more than 30% YoY growth in Q1FY24. The company has reiterated full-year FY24 guidance.

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Most Read: China Traditional Chinese Medicine, Deep Yellow Ltd, HD Hyundai Marine Solution , KT Corp, Aozora Bank Ltd, 3peak , Chilled & Frozen Logistics Holdings, Bank of Communications and more

By | Daily Briefs, Most Read

In today’s briefing:

  • China TCM (570.HK) – Latest Updates on Privatization and the Potential Merger with Taiji Group
  • Let’s Talk Aussie Franking Credits
  • S&P/​​​​​​​​​ASX Index Rebalance Preview: Potential Changes from Now to June
  • HD Hyundai Marine Solution IPO Valuation Analysis
  • Early Sign of AI GPU Market Inflection Point?
  • KT’s Foreign Room Below 7.5%, Weight Down-Adjustment Expected in May, Resulting in 3x ADTV Outflow
  • JAPAN ACTIVISM: Murakami’s Aozora Bet Not Going Anywhere, But No Sales Yet
  • Quiddity Leaderboard STAR 50 Jun 24: 3 ADDs/DELs Possible but Should Be Monitored Closely
  • Chilled & Frozen Logistics (9099 JP): Pass The🍿as the Board Responds to AZ-COM Maruwa (9090 JP)
  • SSE50 Index Rebalance Preview: 5 Changes and US$2.7bn Round-Trip Trade


China TCM (570.HK) – Latest Updates on Privatization and the Potential Merger with Taiji Group

By Xinyao (Criss) Wang

  • Since “no dividend was proposed for the year ended 31 December 2023”, the privatization is highly likely to succeed. It may not be wise for investors to bet against privatization.
  • The recent high-level personnel changes in Taiji is “thought-provoking”, which seems to be preparing for the next step of integrating with China TCM. Spin-offs and integrations are expected within Taiji.
  • We analyzed possible playbook. In this way, CNPGC is able to solve the problem of horizontal competition. China TCM could also relist in A-share to gain higher valuations/better liquidity.

Let’s Talk Aussie Franking Credits

By David Blennerhassett

  • To an Australian individual investor, franking credits simply recognise tax already paid by a company on their earnings. These credits may reduce tax you would otherwise pay on dividend income.
  • This dividend imputation system prevents double taxation and essentially treats company tax paid as a prepayment of shareholder tax.
  • The system makes a lot of sense. It’s a curious thing so few countries have adopted a similar corporate tax structure.

S&P/​​​​​​​​​ASX Index Rebalance Preview: Potential Changes from Now to June

By Brian Freitas

  • With three-quarters of the review period complete, there could be a bunch of changes across the S&P/ASX family of indices in June.
  • The Red 5 Ltd (RED AU) / Silver Lake Resources (SLR AU) merger could lead to an ad hoc change prior to the implementation of the June rebalance.
  • There will be 1.6-25 days of ADV to buy from passives in the inclusions while the impact on the deletions will range between 0.8-11 days of ADV.

HD Hyundai Marine Solution IPO Valuation Analysis

By Douglas Kim

  • Our base case valuation of HD Hyundai Marine Solution is target price of 98,254 won per share, representing an 18% upside from the high end of the IPO price range.
  • The company’s ROE averaged 67% in 2022 and 2023. In comparison, the comps’ ROE averaged 10.6% in the same period. [HD Hyundai Marine Solution > Comps]
  • Our base case valuation is based on 24.7x P/E (comps’ average) using our estimated net profit of 178.7 billion won for the company in 2024. 

Early Sign of AI GPU Market Inflection Point?

By Andrew Lu

  • Taiwan Dell said “AI GPU shortage issue has been resolved. The lead time has been cut from 40 weeks by the end of 2023 to 8-12 weeks or less now.
  • We see this news short term positive but medium term negative to AI GPU supply chain vendors but need more information to confirm if this is an inflection point.
  • 1. Taiwan Dell got priority supply? 2. Earlier overbooking over? 3. Lead time cut by supply upside? 4. Cooling company said the same; 5. Will lead time continue to shrink?

KT’s Foreign Room Below 7.5%, Weight Down-Adjustment Expected in May, Resulting in 3x ADTV Outflow

By Sanghyun Park

  • KT’s foreign ownership declined since January, below 7.5% by last month. If it remains, the adjustment factor halves to 0.25, impacting KT’s Global Index weight.
  • With the May review screening date estimated for April 17th, swift reversal of foreign inflows seems improbable. Thus, KT’s adjustment factor dropping to 0.25 is likely.
  • This could lead to an outflow of 1.6M shares, approximately 3x ADTV. Given the prolonged price impact on telcos, exploring a long-short setup with SKT might be prudent.

JAPAN ACTIVISM: Murakami’s Aozora Bet Not Going Anywhere, But No Sales Yet

By Travis Lundy

  • Just under 6 weeks ago, Japanese activist Murakami-san’s company and daughter reported a 5+% stake in Aozora Bank Ltd (8304 JP). They bought after a sharp dip caused CRE-related writedowns. 
  • As is normal, they bought more (now 8.92%) post-5%-filing-trigger, but before the actual first filing. And as is normal these days, the stock popped on the first filing.
  • Then it fell, and hasn’t recovered much. So far, on a weighted basis, they are up 1% vs TOPIX Banks Index. 

Quiddity Leaderboard STAR 50 Jun 24: 3 ADDs/DELs Possible but Should Be Monitored Closely

By Janaghan Jeyakumar, CFA

  • STAR 50 Index is a tech-focused, blue-chip index in Mainland China which tracks the top 50 largest and most liquid names in the STAR market of the Shanghai Stock Exchange.
  • In this insight, we take a look at our expectations for potential ADDs and DELs for the STAR 50 index during the June 2024 index rebal event.
  • I currently expect three changes resulting in a one-way flow of around US$531mn but there is still room for the expectations to change.

Chilled & Frozen Logistics (9099 JP): Pass The🍿as the Board Responds to AZ-COM Maruwa (9090 JP)

By Arun George

  • The Chilled & Frozen Logistics Holdings (9099 JP) Board has responded with several questions regarding AZ-Com Maruwa Holdings (9090 JP)’s pre-conditional hostile offer of JPY3,000 per share.
  • The Board questions the transaction’s schedule, terms and potential synergies. The Board has also used the ruse that due diligence access would justify a higher offer price.
  • Expect several rounds of Q&A and a delay to the tender start. If shares continue trading through terms ahead of the tender start, AZ-COM Maruwa will likely have to bump. 

SSE50 Index Rebalance Preview: 5 Changes and US$2.7bn Round-Trip Trade

By Brian Freitas

  • With the review period nearing completion, 6 stocks are in inclusion zone and 8 are in deletion zone. However, there can be a maximum of 5 changes at a review.
  • We estimate a one-way turnover of 7% at the June rebalance leading to a one-way trade of CNY 9.7bn (US$1.34bn). Index arb balances could increase the impact on the stocks.
  • The inflows into mainland China ETFs have further increased the flow and impact on the potential changes. The potential adds have continued to outperform the potential deletes.

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Daily Brief Quantitative Analysis: KRX Short Interest Weekly (Apr 5th): Eo Technics and more

By | Daily Briefs, Quantitative Analysis

In today’s briefing:

  • KRX Short Interest Weekly (Apr 5th): Eo Technics


KRX Short Interest Weekly (Apr 5th): Eo Technics

By Ke Yan, CFA, FRM

  • We analyzed the changes in short interest of KRX Stocks as of Apr 5th which has an aggregated short interest worth USD6.9bn.
  • 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 estimate the week on week changes of short interest to be -6.9% and highlight short interest changes in Eo Technics.

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Daily Brief Technical Analysis: Long-Term Breakouts for Emerging and Frontier Markets; Treasury Yields and Commodities Rising YTD and more

By | Daily Briefs, Technical Analysis

In today’s briefing:

  • Long-Term Breakouts for Emerging and Frontier Markets; Treasury Yields and Commodities Rising YTD


Long-Term Breakouts for Emerging and Frontier Markets; Treasury Yields and Commodities Rising YTD

By Joe Jasper

  • The bullish outlook we initiated in early November 2023 remains intact. The SPX and QQQ still refuse to close below their 20-day MAs/21-day EMAs for more than 2-3 consecutive days.
  • Even if/when they do, important supports are close by, including 4983-5050 on the S&P 500 and $425-$433 on QQQ (gap supports from 2/22/24). Anything above 4800 SPX is a buy.
  • We continue to get an ever-increasing number of global indexes/Sectors with long-term breakouts, the latest being the MSCI Emerging Market and Frontier indexes. Clearly risk-on behavior.

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