Smartkarma Daily Briefs

In this insight, we highlight the recent pricing gap divergences of the major Korean holdcos and opcos which could provide trading opportunities in 2Q 2024.
Of the 38 pair trades, 26 of them involved holdcos outperforming opcos in the past six months, suggesting increased capital allocation to Korean holdcos relative to their opcos.
These pairs could generate trading opportunities in terms of their pricing gaps closing reversal. [CJ Corp vs CJ Cheiljedang & Hanjin KAL Corp vs Korean Air Lines].

Shenzhen Intl (152 HK): A Decent Rebound

Shenzhen International (152 HK) saw its FY23 earnings reaccelerated, supported by gains from the logistics park transformation business. Earnings even surged 169.1% YoY in 2H23.
REIT issuance on two logistics assets, increase in areas of logistics projects, gains from South China Logistics Park transformation, and better Shenzhen Expressway (548 HK) will fuel FY24.
A better debt structure will save finance costs. Its 0.45x P/B, or 1.5SD below the 5-year average, is cheap given its proven ability to realise underlying asset value.

Portfolio Update: March 2024

By Contrarian Cashflows

I recently had a conversation with a close friend and fellow investor, during which he shared his current research interest in the dollar store concept.
He emphasized that this business model aligns with criteria conducive to long-term shareholder returns.
Given the scarce presence of dollar stores in Germany, primarily due to socioeconomic factors, I sought clarification on the underlying concept from him.

Dongfang Electric (1072 HK): Good Profit, Record Orders

Dongfang Electric (1072 HK) reached another record year with net profit surging 24.2% in FY23. Favourable product mix has benefited gross margin which expanded 0.8pp YoY.
Record new orders of Rmb86.5bn (+31.9% YoY) have been signed and there is a recovery in momentum in 4Q23. Its end-FY23 backlog should be enough to cover 3.1x FY24F revenue.
DEC is well-positioned to capture the demand for hydrogen energy and power storage. With 19.3% 3-year earnings CAGR, its 5.1x PER and 8.2% dividend yield are attractive.

GMS Inc.: Initiation Of Coverage – A Story Of Improved Selling Prices and Anticipated Recovery in Single-Family Market! – Major Drivers

This is our first report on GMS Inc. Despite facing adverse weather conditions and steel price deflation, GMS reported a growth in net sales and lauded the volume growth across all its major product categories owing to its organic efforts and recent acquisitions.
Still, the company reported a net income of $51.9 million and adjusted EBITDA of $128 million, indicating robust financial performance.
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.

Griffon Corporation: 4 Major Catalysts For Its Growth In 2024 & Beyond! – Financial Forecasts

This is our first report on Griffon Corporation.
The company’s latest earnings for fiscal 2024’s first quarter showcased a company navigating the complexities of market demands, supply chain logistics, and strategic growth initiatives.
The company reported a commendable start to the fiscal year, marked by a robust free cash flow of $133 million, underscoring its operational efficiency and financial prudence.

MillerKnoll, Inc – 3QFY24 EPS Beats; Revenue Misses

As noted earlier, MillerKnoll’s 3QFY24 EPS beat expectations but revenue missed widely. 4QFY24 guidance was also below pre-report estimates.
With the misses, the stock gapped down by the mid-teens (~$5.00), closing at $24.76, thereby truncating and halting its recent rebound.
Y/Y revenue comparisons were negative in all three segments: Americas Contract (AC) at -9% to $441 million, International Contract & Specialty (IC&S) at -10.4% to $217 million, and Global Retail (GR) at -17% to $214 million.

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Apr 02

Daily Brief Energy/Materials: JSR Corp, Copper, Waaree Energies Limited, Talos Energy Inc, Vitesse Energy and more

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

In today’s briefing:

(Mostly) Asia M&A, Mar 2024: Chilled & Frozen, TDCX, MMA Offshore, JSR, Roland DG, SciClone
What the Baltimore Bride Collapse Means for Commodities
Waaree Energies Pre-IPO – Riding the Anti-China US Wave
Talos Energy Inc. – Targeting Free Cash Flow Waterfall in 2024
Vitesse Energy, Inc. – Compounding Capital to Support Dividend Strategy

(Mostly) Asia M&A, Mar 2024: Chilled & Frozen, TDCX, MMA Offshore, JSR, Roland DG, SciClone

By David Blennerhassett

For the month of March 2024, 8 new transactions (firm and non-binding) were discussed on Smartkarma with an overall announced deal size of ~US$4bn.
The average premium for the new transactions announced (or first discussed) in March was ~55%. The average premium YTD is ~39%.
This compares to the average premium for transactions in 2023 (117 transactions), 2022 (106), 2021 (165), 2020 (158), and 2019 (145 ) of 39%, 41%, 33%, 31%, and 31% respectively.

What the Baltimore Bride Collapse Means for Commodities

By The Commodity Report

Goldman also highlights that cyclical risks from the business cycle are fading.
An upswing in the global industrial cycle typically leads to broad metals upside over the next 12 months the investment bank added.
According to data from PIERS, a trade flow analytics tool within S&P Global, Baltimore port held just 4% share of the total trade volumes on the East Coast compared with other major regional ports like New York, with a nearly 38% share according to S&P Global.

Waaree Energies Pre-IPO – Riding the Anti-China US Wave

By Sumeet Singh

Waaree Energies is looking to raise up to US$400m in its upcoming India IPO.
Waaree Energies is a solar PV module manufacturer in India with an aggregate installed capacity of 12 GW, as of Jun 2023.
In this note, we talk about the company’s past performance.

Talos Energy Inc. – Targeting Free Cash Flow Waterfall in 2024

Talos’s FY24 operating plan prioritizes free cash flow generation. The midpoint of FY24 production guidance is nearly 40% above FY23 production, while the midpoint of the FY24 upstream capex budget is 7% lower than FY23.
Our modeling suggests the combination could generate $479 million of free cash flow in FY24, compared with $3 million in FY23.
The anticipated free cash flow waterfall could allow Talos to repay nearly $400 million of borrowings under the existing RBL credit facility.

Vitesse Energy, Inc. – Compounding Capital to Support Dividend Strategy

Vitesse’s strategy is to compound cash flow derived from its diverse portfolio of oil-prone assets in the Bakken/Three Forks play to fund capital returns to shareholders and reinvest in the underlying asset base.
Management’s preferred method for returning cash is through a sustainable fixed dividend, currently $2.00/share annualized.
The dividend is sacrosanct and lies at the heart of management’s capital allocation model.

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Apr 02

Daily Brief TMT/Internet: HYBE , Tencent, Globalwafers, Ibotta , Vanguard Intl Semiconductor and more

By Smartkarma Daily Briefs | Daily Briefs, TMT/Internet

In today’s briefing:

KRX Imposes a 20% Cap on Weight Ceiling in Sector ETFs with Few Constituents
China Consumption Weekly (1 Apr 2024): Tencent, Alibaba, Xiaomi, Midea
ECM Weekly (1st Apr 2024) – Shinhan, GlobalWafers, Mankind, Hyundai Marine, Bharti Hexacom, ChaPanda
Ibotta IPO Valuation Analysis
Vanguard (5347.TT): A Consensus View to Build a New 12″ Fab in Singapore.

KRX Imposes a 20% Cap on Weight Ceiling in Sector ETFs with Few Constituents

By Sanghyun Park

KRX limits individual stock weight to 20% in ETFs with few constituents. KRX confirms working on it, with an official announcement expected soon.
Excludes index ETFs like KOSPI 200. KRX hasn’t finalized criteria for constituent number but expected to involve fewer than 30 stocks.
This could open new passive trading opportunities. Sector ETF cap at 30%, large AUM ones offer noteworthy trading potential.

China Consumption Weekly (1 Apr 2024): Tencent, Alibaba, Xiaomi, Midea

By Ming Lu

There is a rumor in social media that Tencent will dismiss 10% – 30% of its employees.
Alibaba withdrew the IPO application of its subsidiary Cainiao and all the other IPOs were halted as well.
Xiaomi began to sell its first vehicle model SU7, but it is too late for the company to enter the market.

ECM Weekly (1st Apr 2024) – Shinhan, GlobalWafers, Mankind, Hyundai Marine, Bharti Hexacom, ChaPanda

By Sumeet Singh

Aequitas Research puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs.
On the IPO front, HD Hyundai Marine Solution (443060 KS) and Bharti Hexacom were in the market trying to raise over US$500m each.
Placements flow continued unabated this week as well, India, Taiwan and South Korea seeing large blocks.

Ibotta IPO Valuation Analysis

By Andrei Zakharov

In my insight, I discuss valuation framework for comparable company analysis and outline revenue growth scenario under my base case.
Considering Ibotta achieved profitability in 2023 driven by strong growth in the segment of third-party publishers, I view EV/Revenue as the most appropriate methodology to value Ibotta.
I have a positive view of the upcoming Ibotta IPO. The company’s efficient B2B2C business model, success-based marketing approach and scale provide Ibotta with a long runway of growth.

Vanguard (5347.TT): A Consensus View to Build a New 12″ Fab in Singapore.

By Patrick Liao

The utilization rate for Vanguard in 1Q24F is at a recent low of 50-53%, indicating that the utilization rate is expected to increase from 2Q24 onwards.
Vanguard should consider building a new 12″ Fab in Singapore, aligning with our potential acquisition of Taiwan Semiconductor (TSMC) – ADR (TSM US)’s 40nm and above business.
In conclusion, the future outlook appears promising for the coming 3~4 years.

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Apr 02

Daily Brief Industrials: HDC Hyundai Development Co-Engineering & Construction, Shenzhen International, Lindbergh SpA, Dongfang Electric, GMS Inc, Griffon Corp, MillerKnoll and more

By Smartkarma Daily Briefs | Daily Briefs, Industrials

In today’s briefing:

Korean Holdcos Vs Opcos Gap Trading Opportunities in 2Q 2024
Shenzhen Intl (152 HK): A Decent Rebound
Portfolio Update: March 2024
Dongfang Electric (1072 HK): Good Profit, Record Orders
GMS Inc.: Initiation Of Coverage – A Story Of Improved Selling Prices and Anticipated Recovery in Single-Family Market! – Major Drivers
Griffon Corporation: 4 Major Catalysts For Its Growth In 2024 & Beyond! – Financial Forecasts
MillerKnoll, Inc – 3QFY24 EPS Beats; Revenue Misses

Korean Holdcos Vs Opcos Gap Trading Opportunities in 2Q 2024

In this insight, we highlight the recent pricing gap divergences of the major Korean holdcos and opcos which could provide trading opportunities in 2Q 2024.
Of the 38 pair trades, 26 of them involved holdcos outperforming opcos in the past six months, suggesting increased capital allocation to Korean holdcos relative to their opcos.
These pairs could generate trading opportunities in terms of their pricing gaps closing reversal. [CJ Corp vs CJ Cheiljedang & Hanjin KAL Corp vs Korean Air Lines].

Shenzhen Intl (152 HK): A Decent Rebound

Shenzhen International (152 HK) saw its FY23 earnings reaccelerated, supported by gains from the logistics park transformation business. Earnings even surged 169.1% YoY in 2H23.
REIT issuance on two logistics assets, increase in areas of logistics projects, gains from South China Logistics Park transformation, and better Shenzhen Expressway (548 HK) will fuel FY24.
A better debt structure will save finance costs. Its 0.45x P/B, or 1.5SD below the 5-year average, is cheap given its proven ability to realise underlying asset value.

Portfolio Update: March 2024

By Contrarian Cashflows

I recently had a conversation with a close friend and fellow investor, during which he shared his current research interest in the dollar store concept.
He emphasized that this business model aligns with criteria conducive to long-term shareholder returns.
Given the scarce presence of dollar stores in Germany, primarily due to socioeconomic factors, I sought clarification on the underlying concept from him.

Dongfang Electric (1072 HK): Good Profit, Record Orders

Dongfang Electric (1072 HK) reached another record year with net profit surging 24.2% in FY23. Favourable product mix has benefited gross margin which expanded 0.8pp YoY.
Record new orders of Rmb86.5bn (+31.9% YoY) have been signed and there is a recovery in momentum in 4Q23. Its end-FY23 backlog should be enough to cover 3.1x FY24F revenue.
DEC is well-positioned to capture the demand for hydrogen energy and power storage. With 19.3% 3-year earnings CAGR, its 5.1x PER and 8.2% dividend yield are attractive.

GMS Inc.: Initiation Of Coverage – A Story Of Improved Selling Prices and Anticipated Recovery in Single-Family Market! – Major Drivers

This is our first report on GMS Inc. Despite facing adverse weather conditions and steel price deflation, GMS reported a growth in net sales and lauded the volume growth across all its major product categories owing to its organic efforts and recent acquisitions.
Still, the company reported a net income of $51.9 million and adjusted EBITDA of $128 million, indicating robust financial performance.
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.

Griffon Corporation: 4 Major Catalysts For Its Growth In 2024 & Beyond! – Financial Forecasts

This is our first report on Griffon Corporation.
The company’s latest earnings for fiscal 2024’s first quarter showcased a company navigating the complexities of market demands, supply chain logistics, and strategic growth initiatives.
The company reported a commendable start to the fiscal year, marked by a robust free cash flow of $133 million, underscoring its operational efficiency and financial prudence.

MillerKnoll, Inc – 3QFY24 EPS Beats; Revenue Misses

As noted earlier, MillerKnoll’s 3QFY24 EPS beat expectations but revenue missed widely. 4QFY24 guidance was also below pre-report estimates.
With the misses, the stock gapped down by the mid-teens (~$5.00), closing at $24.76, thereby truncating and halting its recent rebound.
Y/Y revenue comparisons were negative in all three segments: Americas Contract (AC) at -9% to $441 million, International Contract & Specialty (IC&S) at -10.4% to $217 million, and Global Retail (GR) at -17% to $214 million.

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

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Apr 02

Daily Brief Health Care: IntelliCentrics Global Holding, CSPC Pharmaceutical Group, Wuxi Biologics, BioNTech and more

By Smartkarma Daily Briefs | Daily Briefs, Healthcare

In today’s briefing:

IntelliCentrics (6819 HK): Special Dividend Vote on 18 April
CSPC Pharmaceutical (1093 HK): Deep Value High Dividend Yield Idea; New Launches to Drive Growth
Wuxi Biologics (2269.HK) – The Crisis Is Not Over
BioNTech SE: How Its Strengthened Pipeline & Portfolio Is Changing The Game!

IntelliCentrics (6819 HK): Special Dividend Vote on 18 April

By Arun George

The IntelliCentrics Global Holding (6819 HK) IFA considers the terms for the disposal of assets to symplr software as fair and reasonable. The EGM vote is on 18 April.
The consideration will be distributed to shareholders as a special dividend with a minimum and maximum of US$0.52 (HK$4.07) and US$0.55 (HK$4.30), respectively.
Irrevocables ensure that the EGM vote will pass. At the last close and for a 7 May payment, the gross and annualised spread of the minimum dividend is 2.8%/33.6%.

CSPC Pharmaceutical (1093 HK): Deep Value High Dividend Yield Idea; New Launches to Drive Growth

By Tina Banerjee

CSPC Pharmaceutical Group (1093 HK) reported steady growth in finished drugs in 2023. New products including Mingfule, Yilouda, and Anfulike achieved rapid sales ramp-up due to inclusion in the NRDL.
The company expects to launch 50 innovative drugs in the next five years, which will provide continuous momentum. The company further aims for 17 common generic launches during 2024–2025.
CSPC Pharmaceutical shares are trading at a P/E of 11.3x, lowest level seen in last five years, and cheaper than peers. Dividend yield remains attractive at 4%+.

Wuxi Biologics (2269.HK) – The Crisis Is Not Over

By Xinyao (Criss) Wang

WuXi Bio’s profit was disappointing.The 41 new orders added last December were small orders, which cannot contribute decent revenue/profits.The goal of gross margin to reach 45% by 2026 seems challenging.
The management has become more cautious in its guidance for 2024. 2024H1’s performance could be disappointing. The key is to see whether the performance in 2024 full-year would meet expectations.
Due to BIOSECURE Act, foreign CXOs are planning to seize WuXi Bio’s market share. We are not sure whether Europe (the US’s ally), will follow suit and enact similar legislation.

BioNTech SE: How Its Strengthened Pipeline & Portfolio Is Changing The Game!

This is our first report on biotechnology major, BioNTech.
The company recently reported its fourth quarter and full-year 2023 earnings.
BioNTech successfully advanced its clinical pipelines and improved its technology platforms, digital capabilities, and infrastructure while executing its key strategic initiatives.

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Apr 02

Daily Brief Consumer: Rakuten, Isetan Singapore, Amorepacific Corp, Tencent Music, TSE Tokyo Price Index TOPIX, Polestar Automotive Holding UK, Delta Djakarta, Nordstrom Inc, Group 1 Automotive and more

By Smartkarma Daily Briefs | Consumer, Daily Briefs

In today’s briefing:

If Rakuten (4755) Combines Financial Units… Who Wins and How? Well… It’s Complicated
Isetan Singapore (ISET SP): Isetan Mitsukoshi (3099 JP)’s 154% Premium Scheme Offer
Gap Trades in Korean Prefs Vs Common Share Pairs in 2Q 2024
Isetan Singapore (ISET SP): Mitsukoshi’s BIGLY Premium Offer
Tencent Music Entertainment Group: Initiation Of Coverage – Core Business Strategy
Solving the Issue of Increasing Trading Liquidity in Japanese Stocks Is More Than Analyst Coverage..
Polestar Automotive: Initiation Of Coverage – What Are The 3 Biggest Hindrances In Its Path For Profitable Growth? – Major Drivers
Delta Djakarta (DLTA IJ) Q4 2023: Return to Growth, Prefer MLBI IJ as Market Leader
Nordstrom Inc: Another Potential Takeover Attempt But What Is The Valuation Upside?
Group 1 Automotive: Is The Favorable Shift Towards Hybrid Vehicles Truly Benefitting The Company?

If Rakuten (4755) Combines Financial Units… Who Wins and How? Well… It’s Complicated

By Travis Lundy

A couple of years ago, Rakuten (4755 JP) – burning through cash to start its mobile business – announced it would its Bank and Securities units. Bank listed. Securities didn’t.
Mizuho ended up buying 49% of Securities. Today, it was announced there would be discussions to put Bank, Securities, Card, and Insurance in a new listed Holdco.
How this works will end up being complicated. More complicated than it should be. But the complexity would make this more of a win-win for everyone.

Isetan Singapore (ISET SP): Isetan Mitsukoshi (3099 JP)’s 154% Premium Scheme Offer

By Arun George

Isetan Singapore (ISET SP) disclosed privatisation through a scheme of arrangement from Isetan Mitsukoshi Holdings Ltd (3099 JP) at S$7.20 per share, a 153.5% premium to the last close.
The high takeover premium reflects the fair value of investment properties of S$300.4 million, i.e., S$7.28 per share, marginally above the offer price.
The offer is attractive and 2.1% higher than the all-time high. The vote should comfortably get up. The scheme meeting is from early to mid-July.

Gap Trades in Korean Prefs Vs Common Share Pairs in 2Q 2024

In this insight, we discuss numerous gap trades involving Korean preferred and common shares in 2Q 2024.
Although the discount on the preferred shares versus the common shares has been gradually narrowing in the past decade, this discount increased from end of 2021 to 1 April 2024.
On a longer timeframe (3-4 years), we believe this discount could narrow further to the 20-25% range, which provides additional opportunities for the Korean preferred shares to further make gains.

Isetan Singapore (ISET SP): Mitsukoshi’s BIGLY Premium Offer

By David Blennerhassett

Isetan Mitsukoshi Holdings Ltd (3099 JP), the controlling shareholder of department store operator Isetan Singapore (ISET SP), is offering $7.20/share, by way of a Scheme.
That’s a whopping 153.5% premium to last close. And a 178.9% premium to ISET’s NAV (as at 31 Dec 2023).
Apart from Mitsukoshi’s 52.73% stake, no other shareholder has >5%. This is a done deal. But why the large premium?

Tencent Music Entertainment Group: Initiation Of Coverage – Core Business Strategy

Tencent Music Entertainment Group (TME) posted robust results in its fourth quarter and full year 2023 earnings call.
Increasing subscribers and expedited revenue growth were notable positives, taking the total number of subscribers to the 100 million milestone due to the company’s focus on content leadership, platform value, and offering a high-quality user experience.
Yet, the company also faced some headwinds, particularly in the social entertainment business.

Solving the Issue of Increasing Trading Liquidity in Japanese Stocks Is More Than Analyst Coverage..

By Aki Matsumoto

Market structure is the main factor hindering trading liquidity. In addition to the cross-holdings that remain, ETFs held by the Bank of Japan cast a shadow over trading liquidity.
Companies are key on this issue. In addition to accelerating to reducte cross-shareholdings, English-language disclosure of annual securities reports, which are in high demand by long-term investors, should be promoted.
If long-term overseas investors get serious about investing in Japanese equities, the increase in trading liquidity in Japanese equities will be sustainable, and broker coverage will naturally expand.

Polestar Automotive: Initiation Of Coverage – What Are The 3 Biggest Hindrances In Its Path For Profitable Growth? – Major Drivers

This is our first report on Polestar.
The company saw their highest-ever delivery volume for the Q3 2023 period.
The said period witnessed record deliveries of 13,976 vehicles, representing a growth of 51% compared to the same period in the previous year.

Delta Djakarta (DLTA IJ) Q4 2023: Return to Growth, Prefer MLBI IJ as Market Leader

By Sameer Taneja

Delta Djakarta (DLTA IJ) came out with subpar FY23 results, with revenues/profits down 5%/13% YoY with a loss of marketshare to Multi Bintang Indonesia (MLBI IJ)
Q4 2023 showed an improvement, with revenues/profits up 1.5%/4% YoY, breaking a sequence of three consecutive quarters of negative growth.
Trading at 13x FY23 PE with 25% of the market cap in cash and 9-10% dividend yield, the stock is worth exploring, although we prefer Multi Bintang Indonesia (MLBI IJ)

Nordstrom Inc: Another Potential Takeover Attempt But What Is The Valuation Upside?

This is our first report on Nordstrom, Inc., a company that has captured the market’s attention given the recent rumors of a takeover offer from the founding family.
The company’s fourth quarter results delivered revenues of $4.3 billion and an earnings per share of $0.96, an improvement over the previous year.
Importantly, 2023 results met or exceeded company guidance.

Group 1 Automotive: Is The Favorable Shift Towards Hybrid Vehicles Truly Benefitting The Company?

Group 1 Automotive presented solid performance in the fourth quarter of 2023 through all lines of business, reaching a total revenue of $17.9 billion, marking the highest for the company and attaining a record of total gross profit exceeding $3 billion.
Though the company reported $131.2 million in adjusted net income, it is clearly driven by the parts and service gross profit, which amounted to $1.2 billion.This is our first report on retail player, the Kohl’s Corporation.
The company’s Fourth Quarter 2023 Earnings showed a mix of positives and negatives in terms of the company’s financial performance and future outlook.

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Apr 02

Daily Brief South Korea: HYBE , Amorepacific Corp, HDC Hyundai Development Co-Engineering & Construction and more

By Smartkarma Daily Briefs | Daily Briefs, South Korea

In today’s briefing:

KRX Imposes a 20% Cap on Weight Ceiling in Sector ETFs with Few Constituents
Gap Trades in Korean Prefs Vs Common Share Pairs in 2Q 2024
Korean Holdcos Vs Opcos Gap Trading Opportunities in 2Q 2024

KRX Imposes a 20% Cap on Weight Ceiling in Sector ETFs with Few Constituents

By Sanghyun Park

KRX limits individual stock weight to 20% in ETFs with few constituents. KRX confirms working on it, with an official announcement expected soon.
Excludes index ETFs like KOSPI 200. KRX hasn’t finalized criteria for constituent number but expected to involve fewer than 30 stocks.
This could open new passive trading opportunities. Sector ETF cap at 30%, large AUM ones offer noteworthy trading potential.

Gap Trades in Korean Prefs Vs Common Share Pairs in 2Q 2024

In this insight, we discuss numerous gap trades involving Korean preferred and common shares in 2Q 2024.
Although the discount on the preferred shares versus the common shares has been gradually narrowing in the past decade, this discount increased from end of 2021 to 1 April 2024.
On a longer timeframe (3-4 years), we believe this discount could narrow further to the 20-25% range, which provides additional opportunities for the Korean preferred shares to further make gains.

Korean Holdcos Vs Opcos Gap Trading Opportunities in 2Q 2024

In this insight, we highlight the recent pricing gap divergences of the major Korean holdcos and opcos which could provide trading opportunities in 2Q 2024.
Of the 38 pair trades, 26 of them involved holdcos outperforming opcos in the past six months, suggesting increased capital allocation to Korean holdcos relative to their opcos.
These pairs could generate trading opportunities in terms of their pricing gaps closing reversal. [CJ Corp vs CJ Cheiljedang & Hanjin KAL Corp vs Korean Air Lines].

💡 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

Apr 02

Daily Brief Singapore: Isetan Singapore, Kasikornbank PCL, Venture Corp and more

By Smartkarma Daily Briefs | Daily Briefs, Singapore

In today’s briefing:

Isetan Singapore (ISET SP): Isetan Mitsukoshi (3099 JP)’s 154% Premium Scheme Offer
Isetan Singapore (ISET SP): Mitsukoshi’s BIGLY Premium Offer
Expanded suite of 8 Thai SDRs tracking over 40% of Thailand’s SET50 Index
Union Steel co-founder Ang Yew Chye ups stake

Isetan Singapore (ISET SP): Isetan Mitsukoshi (3099 JP)’s 154% Premium Scheme Offer

By Arun George

Isetan Singapore (ISET SP) disclosed privatisation through a scheme of arrangement from Isetan Mitsukoshi Holdings Ltd (3099 JP) at S$7.20 per share, a 153.5% premium to the last close.
The high takeover premium reflects the fair value of investment properties of S$300.4 million, i.e., S$7.28 per share, marginally above the offer price.
The offer is attractive and 2.1% higher than the all-time high. The vote should comfortably get up. The scheme meeting is from early to mid-July.

Isetan Singapore (ISET SP): Mitsukoshi’s BIGLY Premium Offer

By David Blennerhassett

Isetan Mitsukoshi Holdings Ltd (3099 JP), the controlling shareholder of department store operator Isetan Singapore (ISET SP), is offering $7.20/share, by way of a Scheme.
That’s a whopping 153.5% premium to last close. And a 178.9% premium to ISET’s NAV (as at 31 Dec 2023).
Apart from Mitsukoshi’s 52.73% stake, no other shareholder has >5%. This is a done deal. But why the large premium?

Expanded suite of 8 Thai SDRs tracking over 40% of Thailand’s SET50 Index

By Geoff Howie

SGX welcomes 5 new Thai SDRs which allow investors to trade Thai blue-chip companies in the same way they would trade stocks listed in Singapore.
The 5 new SDRs are Advanced Info Service (SGX SDR stock code: TADD), Delta Electronics (TDED), Gulf Energy Development (TGED), Kasikornbank (TKKD) and Siam Cement Group (TSCD).
In total, the 8 Thai SDRs cover more than 40% of the SET50 benchmark and each of the 8 SDRs represent a different sector.

Union Steel co-founder Ang Yew Chye ups stake

By Geoff Howie

Union Steel co-founder Ang Yew Chye ups stake Digital Core Reit Management also continued to buy back units of Digital Core Reit over three of the four sessions.
Between Mar 25 and 26, Union Steel Holdings executive director Ang Yew Chye bought 930,000 shares at S$0.47 per share.

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Apr 02

Daily Brief United States: Ibotta , Copper, Nordstrom Inc, Group 1 Automotive, LCI Industries, Modine Manufacturing Co, Kohl’s Corp, Leggett & Platt, Lgi Homes Inc, MillerKnoll and more

By Smartkarma Daily Briefs | Daily Briefs, United States

In today’s briefing:

Ibotta IPO Valuation Analysis
What the Baltimore Bride Collapse Means for Commodities
Nordstrom Inc: Another Potential Takeover Attempt But What Is The Valuation Upside?
Group 1 Automotive: Is The Favorable Shift Towards Hybrid Vehicles Truly Benefitting The Company?
LCI Industries: Initiation Of Coverage – Is The RV Recovery & The Strength In The Aftermarket Sector Here To Stay? – Major Drivers
Modine Manufacturing Company: Initiation Of Coverage – Will The Scott Springfield Acquisition Be A Game Changer? – Major Drivers
Kohl’s Corporation: Initiation Of Coverage – Will It Make A Comeback After Its Failed Attempts To Explore A Potential Sale? – Major Drivers
Leggett & Platt Incorporated: Initiation Of Coverage – These 4 Pivotal Factors Are Driving Its Future Performance! – Financial Forecasts
LGI Homes: Initiation Of Coverage – What Is Its Geographic Expansion Strategy?
MillerKnoll, Inc – 3QFY24 EPS Beats; Revenue Misses

Ibotta IPO Valuation Analysis

By Andrei Zakharov

In my insight, I discuss valuation framework for comparable company analysis and outline revenue growth scenario under my base case.
Considering Ibotta achieved profitability in 2023 driven by strong growth in the segment of third-party publishers, I view EV/Revenue as the most appropriate methodology to value Ibotta.
I have a positive view of the upcoming Ibotta IPO. The company’s efficient B2B2C business model, success-based marketing approach and scale provide Ibotta with a long runway of growth.

What the Baltimore Bride Collapse Means for Commodities

By The Commodity Report

Goldman also highlights that cyclical risks from the business cycle are fading.
An upswing in the global industrial cycle typically leads to broad metals upside over the next 12 months the investment bank added.
According to data from PIERS, a trade flow analytics tool within S&P Global, Baltimore port held just 4% share of the total trade volumes on the East Coast compared with other major regional ports like New York, with a nearly 38% share according to S&P Global.

Nordstrom Inc: Another Potential Takeover Attempt But What Is The Valuation Upside?

This is our first report on Nordstrom, Inc., a company that has captured the market’s attention given the recent rumors of a takeover offer from the founding family.
The company’s fourth quarter results delivered revenues of $4.3 billion and an earnings per share of $0.96, an improvement over the previous year.
Importantly, 2023 results met or exceeded company guidance.

Group 1 Automotive: Is The Favorable Shift Towards Hybrid Vehicles Truly Benefitting The Company?

Group 1 Automotive presented solid performance in the fourth quarter of 2023 through all lines of business, reaching a total revenue of $17.9 billion, marking the highest for the company and attaining a record of total gross profit exceeding $3 billion.
Though the company reported $131.2 million in adjusted net income, it is clearly driven by the parts and service gross profit, which amounted to $1.2 billion.This is our first report on retail player, the Kohl’s Corporation.
The company’s Fourth Quarter 2023 Earnings showed a mix of positives and negatives in terms of the company’s financial performance and future outlook.

LCI Industries: Initiation Of Coverage – Is The RV Recovery & The Strength In The Aftermarket Sector Here To Stay? – Major Drivers

This is our first report on RV producer, Lippert (LCI Industries).
In its Q4 2023 earnings, LCI Industries reported net revenue of $3.8 billion.
This was a decline from the previous year’s revenue of $5.2 billion, mostly due to lower RV OEM and Marine industry production levels.

Modine Manufacturing Company: Initiation Of Coverage – Will The Scott Springfield Acquisition Be A Game Changer? – Major Drivers

This is our first report on HVAC player, Modine Manufacturing Company.
Its recent results showed that the company had another successful quarter, highlighted by strong margin expansion and earnings growth.
This is attributed to the company’s continued focus on faster-growing and higher margin businesses that has greatly improved their earnings profile.

Kohl’s Corporation: Initiation Of Coverage – Will It Make A Comeback After Its Failed Attempts To Explore A Potential Sale? – Major Drivers

This is our first report on retail player, the Kohl’s Corporation.
The company’s Fourth Quarter 2023 Earnings showed a mix of positives and negatives in terms of the company’s financial performance and future outlook.
Despite reporting a decrease of 1.1% in net sales and 4.3% in comparable sales for Q4, on the positive side, Kohl’s expressed optimism about its ability to realize growth through various strategic initiatives.

Leggett & Platt Incorporated: Initiation Of Coverage – These 4 Pivotal Factors Are Driving Its Future Performance! – Financial Forecasts

This is our first report on bedding and other specialty products manufacturer, Leggett & Platt.
The company has been facing some tough times but its management seems to remain optimistic amid challenging circumstances.
While lower volumes in residential end markets and certain pricing responses have elicited predictions of lower earnings for 2024 from the company, other factors like the advancement of key product growth and improvement in profitability, accompanying a refocused bedding strategy are cause for increased optimism.

LGI Homes: Initiation Of Coverage – What Is Its Geographic Expansion Strategy?

LGI Homes had a solid fourth quarter and met all of its operational and financial goals for the full year.
Despite being faced with a few challenges, the company manages to outperform its initial expectations.
Among the notable achievements included the delivery of 6,729 homes, which was on the high end of their original guidance and represented a 1.6% increase year-over-year.

MillerKnoll, Inc – 3QFY24 EPS Beats; Revenue Misses