Smartkarma Daily Briefs

By Research as a Service (RaaS)

At end-January 2023 it became clear activist Elliott Management had set its sights on Dai Nippon Printing (7912 JP). The stock popped and people got bullish.
I warned about the “complicated” nature of gains going forward here. Three weeks later they announced details of including ¥100bn of buybacks per year for 3yrs. That’s discussed here.
I rarely write bearishly about a huge buyback program but from next day open, over 1yr, total return has been 4.9%. Stage 2 starts 11 March with ¥50bn through end-Sep24.

JAL Mall: Gold from 30m Mileage Members

By Michael Causton

Amidst intense competition in online mall retailing, JAL and ANA both launched their own e-commerce malls last year to replace once popular catalogues.
Although a tough market to enter given the competition from the big 3 (Amazon, Rakuten and Yahoo), airlines have distinct advantages over other small malls.
In particular, they have data on millions of consumers and access to premium customers willing to spend ¥1 million on a case of wine.

Asian Dividend Gems: Precision Tsugami China

By Douglas Kim

Precision Tsugami China specializes in the production of precision machine tools. Precision Tsugami China is part of the broader Tsugami Corporation, a Japanese company founded in 1923.
The company’s dividend yield increased from 4.3% in FY2021 to 8.9% in FY2022 and 10.1% in FY2023.
We found Precision Tsugami China (1651 HK) using Smartkarma’s Smart Score Screener system.

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Mar 11

Daily Brief Financials: TSE Tokyo Price Index TOPIX, Pioneer Credit, HDFC Bank and more

By Smartkarma Daily Briefs | Daily Briefs, Financials

In today’s briefing:

EQD | A Systematic Look at the Post Earnings Announcement Drift Across Asia
Pioneer Credit Ltd – Strengthening profit outlook
HDFC Bank (HDFCB IN): Initiating Coverage – Long Term Compounder; But “Short” For Now

EQD | A Systematic Look at the Post Earnings Announcement Drift Across Asia

By Nicholas Pezolano

A cross-country study on the post earning announcement drift effect.
We explore the use of various options-implied analytics to systematically view returns around earnings announcements.
Options-Implied Analytics can provide empowering information to better inform investment decisions.

Pioneer Credit Ltd – Strengthening profit outlook

Pioneer Credit Limited (ASX:PNC) is one of the leading acquirers and managers of impaired credit in Australia and has gained its status by maintaining positive customer engagement, an unblemished compliance record with ASIC, and strong relationships with Australia’s largest bank and non-bank lenders.
PNC purchases debt from numerous Australian vendor partners (18 different vendors in the past 12 months) with long-term partnership purchasing arrangements in place with Commonwealth Bank of Australia (ASX:CBA).
Pioneer’s success in purchasing large debt portfolios at attractive IRRs since October highlights the strong position the company occupies in the marketplace.

HDFC Bank (HDFCB IN): Initiating Coverage – Long Term Compounder; But “Short” For Now

By Raj Saya, CA, CFA

HDFC Bank (HDFCB IN) has been the most successful bank in India over the last two decades, delivering best-in-class performance consistently; Things changed drastically with the merger with HDFC Ltd.
The negatives outweigh the positives in the near-term from the merger; the synergies, which are significant, are long-term in nature and hence would take time to play out.
We remain long-term believers, but it is a “Short” in the short-term as we expect further -20% correction in valuations

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Mar 11

Daily Brief Energy/Materials: Emerald Resources Nl, CNOOC Ltd and more

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

In today’s briefing:

MV Global Junior Gold Miners Index Rebalance: Over US$500m to Trade
A/H Premium Tracker (To 8 Mar 2024): Liquid AH Premia Still Wide

MV Global Junior Gold Miners Index Rebalance: Over US$500m to Trade

Emerald Resources Nl (EMR AU) will be added to the VanEck Vectors Junior Gold Miners ETF (GDXJ US) in March while there are 3 deletions for the index.
The constituent changes along with float and capping changes result in an estimated one-way turnover of 6.4% and a one-way trade of US$263m.
There are 9 stocks with more than US$10m to trade and 9 stocks with over 2x ADV to trade.

A/H Premium Tracker (To 8 Mar 2024): Liquid AH Premia Still Wide

The New/Better A-H Premium Tracker has tables, charts, measures galore to track A/H premium positioning, southbound and northbound positioning/volatility in pairs over time, etc.
SOUTHBOUND a net buyer every day since the end of Chinese New Year. NORTHBOUND a net seller this week for the first week in 6. AH premia slightly down.
Wide spreads continue to narrow and narrow spreads continue to widen.

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Mar 11

Daily Brief TMT/Internet: NVIDIA Corp, Tencent, Taiwan Semiconductor (TSMC) – ADR, Shinko Electric Industries, Softbank Group, NAURA Technology Group, S&P 500 INDEX, Kuaishou Technology and more

By Smartkarma Daily Briefs | Daily Briefs, TMT/Internet

In today’s briefing:

MV US Listed Semiconductor 25 Index Rebalance: Over US$1bn to Sell in NVIDIA
WisdomTree Indexes Special Rebalance: ESG Considerations Dropped
Taiwan Tech Weekly: TSMC Surge Leads Taiwan Stocks Higher; Advanced Chip Packaging in Focus
Merger Arb Mondays (11 Mar) – Shinko, JSR, Azure, Genex, OreCorp, Hollysys, CPMC, Vinda
ECM Weekly (11th Mar 2024) – Oriental Land, ARM, Tuhu, Wiwynn, Macrotech, Zomato, Trial Holding
HK Connect SOUTHBOUND Flows (To 8 Mar 2024); Big Net Buys of SOEs, Finally Tencent a Net Buy
Tencent (700 HK) 4Q23 Earnings Preview: Stable Growth and Margin Improvement Will Continue
Mainland Connect NORTHBOUND Flows (To 8 Mar 2024): Utilities and Semis a Buy
EQD | S&P500 WEEKLY Pull Back: BUY the Dip
KS (1024 HK) 4Q23 Earnings Preview: Will See Historical Profit

MV US Listed Semiconductor 25 Index Rebalance: Over US$1bn to Sell in NVIDIA

There are no constituent changes for the VanEck Vectors Semiconductor (SMH US) ETF in March but there are a lot of float and capping changes.
Taiwan Semiconductor (TSMC) – ADR (TSM US) is the largest buy while capping results in NVIDIA Corp (NVDA US) being the largest sell by far.
Estimated one-way turnover is 8.3% resulting in a round-trip trade of nearly US$3bn. There are a few stocks with more than 0.2x ADV to trade.

WisdomTree Indexes Special Rebalance: ESG Considerations Dropped

WisdomTree has dropped ESG considerations while selecting stocks for the EMXSOE, CHXSOE and WTEMXC indices.
That results in a lot of inclusions and fewer deletions across indices that will be implemented at the close on 15 March.
The round-trip trade across the indices will exceed US$500m with Tencent (700 HK) as the largest buy.

Taiwan Tech Weekly: TSMC Surge Leads Taiwan Stocks Higher; Advanced Chip Packaging in Focus

By Vincent Fernando, CFA

Massive TSMC Rises 13.8% in Just a Week; Mediatek a Top 10 Gainer for Second Week in a Row
TSMC (2330.TT; TSM.US): Sales Should Be Gradually Increasing QoQ in 2024F; IPhone 16 Is on Schedule.
PC Monitor: Long Dell Vs. Short Acer Update; Dell & HPQ Results Indicate Opportunity in Asus

Merger Arb Mondays (11 Mar) – Shinko, JSR, Azure, Genex, OreCorp, Hollysys, CPMC, Vinda

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: APM Human Services Internation (APM AU), Probiotec Ltd (PBP AU), Genex Power Ltd (GNX AU), China Traditional Chinese Medicine (570 HK), Genetron Holdings Ltd (GTH US).
Lowest spreads: Tietto Minerals Ltd (TIE AU), CIMC Vehicle Group Co Ltd (1839 HK), Pact Group Holdings (PGH AU), CPMC Holdings (906 HK), Payroll (4489 JP), Welbe Inc (6556 JP).

ECM Weekly (11th Mar 2024) – Oriental Land, ARM, Tuhu, Wiwynn, Macrotech, Zomato, Trial Holding

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, Trial Holdings (5882 JP) was hoping for better luck with its listing this time around.
For placements, it was a very busy week for a change with most regions, apart from Hong Kong, chipping in.

HK Connect SOUTHBOUND Flows (To 8 Mar 2024); Big Net Buys of SOEs, Finally Tencent a Net Buy

A shares were up small on the week. HK stock indices were down.
Net SOUTHBOUND buying was HK$17.1bn in the third post-holiday week. SOUTHBOUND has net bought every day since the end of Chinese New Year.
SOUTHBOUND continues to buy high-div SOEs. ex-div is still three months away, and given the new KPIs discussed late January by SASAC official, these still seem to be appropriate targets.

Tencent (700 HK) 4Q23 Earnings Preview: Stable Growth and Margin Improvement Will Continue

By Ming Lu

We believe total revenue will grow by 11% in 4Q23 and 2024.
We also believe the operating margin will improve slightly in 4Q23 and the following two years.
Tencent sold weak business to China Literature in December 2024.

Mainland Connect NORTHBOUND Flows (To 8 Mar 2024): Utilities and Semis a Buy

The Quiddity Mainland Connect NORTHBOUND Monitor. Like the A/H Premium Monitor and HK Connect SOUTHBOUND Monitor. Lots of Flows/Position Tables and Charts with which to play.
Last week saw NORTHBOUND net SELL RMB 3.1bn of A-shares on slightly slower average activity after net buying RMB +63bn the previous five trading weeks.
Lower activity into the end of the Two Sessions Week. First net selling by NORTHBOUND in many weeks.

EQD | S&P500 WEEKLY Pull Back: BUY the Dip

By Nico Rosti

The SPX has been rallying for 4 months, rising >+24%, is is OVERBOUGHT but we see the current pullback as a BUY opportunity.
The index could pullback another 1-2 weeks before it restarts the rally.
Price areas to buy are between 5069 and 5000, lower prices may indicate a deeper correction is unfolding (lasting up to 3 weeks down in total).

KS (1024 HK) 4Q23 Earnings Preview: Will See Historical Profit

By Ming Lu

We believe total revenue will increase by 17% YoY in 4Q23 and 15% in 2024.
We also believe KS will see historical high operating profit in 4Q23 and the year 2023.
We conclude that KS has an upside of 92% and a price target of HK$90. Buy.

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Mar 11

Daily Brief Industrials: Dai Nippon Printing, Japan Airlines, Precision Tsugami China and more

By Smartkarma Daily Briefs | Daily Briefs, Industrials

In today’s briefing:

Dai-Nippon Printing (7912) – Whoomp There It Is! Part Deux
JAL Mall: Gold from 30m Mileage Members
Asian Dividend Gems: Precision Tsugami China

Dai-Nippon Printing (7912) – Whoomp There It Is! Part Deux

At end-January 2023 it became clear activist Elliott Management had set its sights on Dai Nippon Printing (7912 JP). The stock popped and people got bullish.
I warned about the “complicated” nature of gains going forward here. Three weeks later they announced details of including ¥100bn of buybacks per year for 3yrs. That’s discussed here.
I rarely write bearishly about a huge buyback program but from next day open, over 1yr, total return has been 4.9%. Stage 2 starts 11 March with ¥50bn through end-Sep24.

JAL Mall: Gold from 30m Mileage Members

By Michael Causton

Amidst intense competition in online mall retailing, JAL and ANA both launched their own e-commerce malls last year to replace once popular catalogues.
Although a tough market to enter given the competition from the big 3 (Amazon, Rakuten and Yahoo), airlines have distinct advantages over other small malls.
In particular, they have data on millions of consumers and access to premium customers willing to spend ¥1 million on a case of wine.

Asian Dividend Gems: Precision Tsugami China

By Douglas Kim

Precision Tsugami China specializes in the production of precision machine tools. Precision Tsugami China is part of the broader Tsugami Corporation, a Japanese company founded in 1923.
The company’s dividend yield increased from 4.3% in FY2021 to 8.9% in FY2022 and 10.1% in FY2023.
We found Precision Tsugami China (1651 HK) using Smartkarma’s Smart Score Screener system.

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Mar 11

Daily Brief Health Care: PegBio, Microport Scientific, WuXi AppTec , Pro Medicus Ltd and more

By Smartkarma Daily Briefs | Daily Briefs, Healthcare

In today’s briefing:

PegBio IPO Preview: A Founder-Led Biopharma Player Fighting T2DM and Obesity in China
China Healthcare Week (Mar.8) – GLP-1s, “Crowding Out Effect” in Healthcare, Microport’s Trouble
WuXi AppTec (2359.HK/603259.CH) – Updates About the BIOSECURE Act and the Outlook
Pro Medicus Ltd (PME AU): Expanding Footprint in North America Is Making The Image Crystal Clear

PegBio IPO Preview: A Founder-Led Biopharma Player Fighting T2DM and Obesity in China

By Andrei Zakharov

PegBio, a VC-backed biotech company, plans to tap capital markets in Hong Kong. CICC is leading the offering, and an IPO date has yet to be announced.
The company’s pipeline features promising drug candidates designed for the treatment of type 2 diabetes mellitus (T2DM), obesity, NASH, OIC and congenital hyperinsulinemia.
PegBio employs a proprietary technology platform, called HECTOR, and has six drug candidates in the pipeline portfolio. PB-119 is their core product with the purpose to treat T2DM and obesity.

China Healthcare Week (Mar.8) – GLP-1s, “Crowding Out Effect” in Healthcare, Microport’s Trouble

By Xinyao (Criss) Wang

Since the domestic revenue scale of PD-1 has been much lower-than-expected, the market seems no longer willing to offer GLP-1 weight loss drug high expectations. However, that’s not right.
For China healthcare, the emergence of negative domestic policies is a time for reassessment and seeking opportunities, rather than a time of blind pessimism.
Issuing convertible bonds is clearly a bad decision for Microport, which chose to sacrifice the interests of minority shareholders. Together with weak fundamentals/cashflow pressure, the management needs to take responsibility.

WuXi AppTec (2359.HK/603259.CH) – Updates About the BIOSECURE Act and the Outlook

By Xinyao (Criss) Wang

A Senate committee moved the bill (S.3558) forward that would prohibit pharmaceutical companies from using foreign service providers like WuXi AppTec and its subsidiaries. However, rational voices are still expected.
Seemingly conflicting proposals are mostly “noise” and disturbances to stock prices. This means in the future, we‘ll see stock prices move sharply again due to latest developments on these bills.
WuXi AppTec should have “bottom-line thinking” and prepare some “backup solutions”.Investors don’t need to be overly pessimistic, because when global capital flows reverse, no one will mind these bills anymore.

Pro Medicus Ltd (PME AU): Expanding Footprint in North America Is Making The Image Crystal Clear

By Tina Banerjee

Pro Medicus Ltd (PME AU) reported record high revenue and net profit in H1FY24. The result was largely driven by a 37% YoY increase in revenue from North America.
In H1FY24, PME won four key contracts. These contracts have a total contract value of A$200M (at committed minimum exam volumes) with contract terms ranging from 7 to 10 years.
PME believes H2FY24 will be stronger than H1FY24. Assuming key contracts up for renewal are renewed at same rate, PME sees forward revenue of >A$608M over the next five years.

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Mar 11

Daily Brief Consumer: IDP Education, Trial Holdings, Japfa Ltd, Uni President China, PDD Holdings, JD.com Inc (ADR), Water Oasis, Pan Pacific International Holdings and more

By Smartkarma Daily Briefs | Consumer, Daily Briefs

In today’s briefing:

MV Australia Equal Weight Index Rebalance: Float & Capping Changes to Drive Flow
Weekly Deals Digest (10 Mar) – Trial, ARM, JSR, Nippon Express, Alumina, Azure, Genex, Vinda
Japfa (JAP SP): Evaluating a Potential Privatisation
Uni-President China (220 HK): 8% Dividend Yield Looks Sustainable
Pinduoduo (PDD US): Pricing in an Imminent Slowdown
China Consumption Weekly (11 Mar 2024): JD.com, JD Logisitics, BYD, Alibaba, NIO
Shortlist Of High Conviction Ideas: Income, Value, and Margin of Safety – March 2024
Pan Pacific International Holdings (7532): Revision to Full-Year FY06/24 Company Forecast

MV Australia Equal Weight Index Rebalance: Float & Capping Changes to Drive Flow

There are no constituent changes for the MVIS Australia Equal Weight Index at the March rebalance.
Float and capping changes will result in a one-way turnover of 4.4% and in a round-trip trade of A$195m.
We had Lendlease Group (LLC AU), IDP Education (IEL AU) and nib holdings (NHF AU) as close deletes and they will now have inflows due to capping.

Weekly Deals Digest (10 Mar) – Trial, ARM, JSR, Nippon Express, Alumina, Azure, Genex, Vinda

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: Trial Holdings (5882 JP) IPO, Nippon Express Holdings (9147 JP) placement and ARM Holdings (ARM US) lock-up expiry.
Event-Driven developments: JSR Corp (4185 JP), Alumina Ltd (AWC AU), Azure Minerals (AZS AU), Genex Power Ltd (GNX AU), Vinda International (3331 HK).

Japfa (JAP SP): Evaluating a Potential Privatisation

On March 8, Bloomberg reported that Japfa Ltd (JAP SP) owners were considering taking it private and started talks about a loan of around US$150 million.
Japfa has faced ongoing profitability issues since 2022 due to cost-of-living pressures. Privatisation interest is unsurprising, as the shares have been down 72% over the last three years.
An attractive premium would be required, irrespective of the offer structure. At a S$0.26 offer (20% premium to last close), Japfa would trade in line with peer multiples.

Uni-President China (220 HK): 8% Dividend Yield Looks Sustainable

By Steve Zhou, CFA

Uni President China (220 HK), a F&B company in China, has an impressive track record of paying near 100% or over 100% of net profit in dividends since 2018.
The company has two segments, food (mainly instant noodle), and beverage. Overall sales grew 1% yoy in 2023 while net profit jumped 36% yoy.
Given the reasonable valuation (13x forward PE), a near 40% net cash position, and most importantly a stable 8% dividend yield, the stock looks attractive.

Pinduoduo (PDD US): Pricing in an Imminent Slowdown

By Eric Chen

We see further upside to our previous above-consensus 4Q23 results estimates on low base, enhanced monetization, and faster TEMU expansion.
That said, we believe market focus already shifted to outlook for 2024, in particular an imminent slowdown in 1Q24 and renewed concern around US curb on TEMU.
30% share price correction is pricing in the above scenario and valuation should gradually improve as PDD delivers back-loaded bottom line growth in 2024.

China Consumption Weekly (11 Mar 2024): JD.com, JD Logisitics, BYD, Alibaba, NIO

By Ming Lu

JD.com stock price surged after its 4Q23 results and repurchase decision.
It is not big issue that BYD sales decreased in the weak season.
Alibaba began to close unprofitable Freshippo stores in February, but the company said it has expansion plan.

Shortlist Of High Conviction Ideas: Income, Value, and Margin of Safety – March 2024

By Sameer Taneja

We compile our selection of small and mid-cap names with our desired characteristics of high dividend yields, value, and margin of safety.
Our top picks are Perfect Medical Health (1830 HK), Water Oasis (1161 HK), Taste Gourmet (8371 HK), Uchi Technologies (UCHI MK), and The Keepers Holdings (KEEPR PM).
We also provide updates on released earnings for Uchi Technologies (UCHI MK), Plover Bay Technologies (1523 HK), UMP Healthcare (722 HK), and Sitoy Group Holdings (1023 HK).

Pan Pacific International Holdings (7532): Revision to Full-Year FY06/24 Company Forecast

By Shared Research

Pan Pacific International Holdings (7532 JP) is one of Japan’s top retailers whose core business is the Don Quijote discount store chain.
The company recorded FY06/23 sales of JPY1,936.8bn, operating profit of JPY105.3bn, recurring profit of JPY111.0bn, and net income attributable to owners of the parent of JPY66.2bn.
Pan Pacific International Holdings Corporation has announced a revision to its full-year earnings forecast for FY06/24, which was announced on August 16, 2023.

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Mar 10

Most Read: Yankuang Energy Group, Flight Centre Travel, DearU, Shenzhen New Industries Biomedical Engineering-A, Abacus Storage King, IDP Education, Hanon Systems, Nippon Express Holdings, Tencent, Keisei Electric Railway Co and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

Index Rebalance & ETF Flow Recap: STAR50/100, FXI, NIFTY/NEXT50, S&P500, KOSPI, Goodman, Ecopro BM
S&P/ASX Index Rebalance (Mar 2024): Changes, Flows, Impact, Shorts & Positioning
KRX BBIG K-New Deal Rebalancing: Official Results & Passive Flow Impacts
CSI300 Index Rebalance Preview: Potential Adds Outperforming Despite ETF Inflows
MVIS Australia A-REITs Index Rebalance Preview: One Deletion & Capping Changes
MVIS Australia Equal Weight Index Rebalance Preview: Three Close Deletions
Local Observations on Carlyle’s Possible Buyout of Hanon Systems
Nippon Express (9147 JP): The Current Playbook
[Tencent (700 HK, BUY, TP HK$362) TP Change]: Core Business Is Robust While VA Is Expanding Fast
Last Week in Event SPACE: Keisei Electric, New World Development, Alumina Ltd, Azure Minerals, TDCX

Index Rebalance & ETF Flow Recap: STAR50/100, FXI, NIFTY/NEXT50, S&P500, KOSPI, Goodman, Ecopro BM

The last week was a very busy one. The coming week has some announcements and implementations but is a relatively quieter one.
The SSE STAR50 (STAR50 INDEX) and STAR100 Index changes for March will be implemented at the close on Friday, the 8th.
Another week of inflows for the iShares Emerging Markets ex-China (EMXC US) ETF as creations cross US$2bn for 2024. ETF AUM has gone from US$420m in 2021 to US$11bn now!

S&P/ASX Index Rebalance (Mar 2024): Changes, Flows, Impact, Shorts & Positioning

There is 1 change for the S&P/ASX20 Index, 2 changes for the S&P/ASX100 Index, 4 changes for the S&P/ASX200 INDEX and 14 adds/10 deletes for the S&P/ASX300 Index in March.
The largest impact is expected on the changes to the S&P/ASX 200 (AS51 INDEX) while flows are large among changes to the S&P/ASX 20 Index and S&P/ASX 100 Index too.
There has been a steady increase in cumulative excess volume for most stocks but there are a few where there has been a spike recently.

KRX BBIG K-New Deal Rebalancing: Official Results & Passive Flow Impacts

By Sanghyun Park

After results were transitioned to non-public information, it has been observed that results are reflected in prices significantly later, with substantial price impact occurring close to the rebalancing trading day.
Even though the AUMs have recently decreased, the passive impact size is quite substantial, considering a recent pattern of price impact concentrating within a maximum of about two trading days.
A heavy Long-Short setup on these pairs, DearU / Douzone Bizon and SK Biopharmaceuticals / SK Bioscience (302440 KS), is something we should very actively consider.

CSI300 Index Rebalance Preview: Potential Adds Outperforming Despite ETF Inflows

With 85% of the review period complete, we see 11 changes for the Shanghai Shenzhen CSI 300 Index (SHSZ300 INDEX) in June.
We estimate one-way turnover of 1.2% at the rebalance leading to a one-way trade of CNY 7.3bn (US$1bn). There are a lot of stocks with multiple days ADV to trade.
The potential adds have outperformed the potential deletes despite large flows from the National Team into ETFs tracking the CSI 300 Index. That support for the potential deletes will reverse.

MVIS Australia A-REITs Index Rebalance Preview: One Deletion & Capping Changes

With the review period for the March rebalance complete, Abacus Storage King (ASK AU) could be deleted from the index and there will be capping changes.
The index changes will lead to a one-way turnover of 3.6% resulting in a one-way trade of A$21m. There are three stocks with over A$4m to trade.
Goodman Group (GMG AU) is an inclusion to a global index in March and that buying will far outweigh the selling from the Vaneck Vectors Australian Property ETF (MVA AU).

MVIS Australia Equal Weight Index Rebalance Preview: Three Close Deletions

With the review period complete, there are 3 stocks that are close to the deletion zone and could be removed from the index at the March rebalance.
Even if there are no constituent changes, capping changes will lead to one-way turnover of 4.4% and a one-way trade of A$97m.
There are 9 stocks with over A$5m to trade from passive trackers but the impact on the stocks is not very high.

Local Observations on Carlyle’s Possible Buyout of Hanon Systems

By Sanghyun Park

Carlyle’s renewed interest in acquiring Hanon Systems is evident from recent local market news, indicating outreach to bankers for a potential buyout, as confirmed by a local brokerage.
Carlyle eyes majority control of Hanon Systems, targeting 50.5% from Hahn & Co and 19.5% from Hankook Tire. Carlyle may extend a tender offer for the remaining 30%.
Still early stages; no solid info on deal certainty or specifics. Limited immediate trading opportunities, but worth monitoring as it progresses.

Nippon Express (9147 JP): The Current Playbook

Since the US$260 million secondary placement announcement, Nippon Express Holdings (9147 JP) shares are down 5.3% from the undisturbed price of JPY8,039 per share (1 March).
Looking at recent large Japanese placements is instructive to understand the potential trading pattern. So far, Nippon Express shares have followed the pattern of previous large placements.
The offering will likely be priced on 11 March. Investors who have participated in previous large Japanese placements tend to secure positive returns.

[Tencent (700 HK, BUY, TP HK$362) TP Change]: Core Business Is Robust While VA Is Expanding Fast

By Ying Pan

We expect Tencent to report C4Q23 revenue, IFRS op. profit and IFRS net income in line, (3.3%) and (4.9%) vs. consensus.
The robust topline growth was mainly contributed by fast growing WeChat VA (Video Account) and strong performances of <Dream Star> in December.
We cut our TP to HK$362 to reflect operating margin decline caused by increased sales and marketing.

Last Week in Event SPACE: Keisei Electric, New World Development, Alumina Ltd, Azure Minerals, TDCX

By David Blennerhassett

Keisei Electric Railway Co (9009 JP) places out 1% of Oriental Land (4661 JP), but rejects lowering its stake to 15%. That is the end of the near-term catalyst.
New World Development (17 HK) popped after property cooling measures were scrapped. Then gave those gains back. And then some, and is now trading at 0.11x P/B, its lowest-ever level.
The spreads for both Alumina Ltd (AWC AU) and Azure Minerals (AZS AU) are trading wide; both potentially FIRB-related.

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Mar 10

Daily Brief Quantitative Analysis: TWSE Short Interest Weekly (Mar 8th): TSMC and more

By Smartkarma Daily Briefs | Daily Briefs, Quantitative Analysis

In today’s briefing:

TWSE Short Interest Weekly (Mar 8th): TSMC, ASE, Mediatek, Yageo, Faraday Tech, Chung-Hsin, Momo.Com
A-H Premium Weekly (Mar 8th): CNOOC, Air China, China Southern Air, Guangzhou Auto
HK Short Interest Weekly: Meituan, Shk Ppt, Baba, Bud Apac, New World Dev
Hong Kong Connect Flows (Mar 8th): Meituan, China Mobile, CNOOC
Northbound Flows (Mar 8th): China Yangtze Power, CATL, Tongwei, Foxconn Industrial Internet

TWSE Short Interest Weekly (Mar 8th): TSMC, ASE, Mediatek, Yageo, Faraday Tech, Chung-Hsin, Momo.Com

We analyzed the changes in short interest of TWSE Stocks as of Mar 8th which has an aggregated short interest worth USD69.7bn.
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 TSMC, ASE, Mediatek, Yageo, Faraday Tech, Chung-Hsin, Momo.Com.

A-H Premium Weekly (Mar 8th): CNOOC, Air China, China Southern Air, Guangzhou Auto

We analyse the changes of A-H premium on 146 stocks over the last week. The average A-H premium was 123.2% as of Mar 8th.
The average A-H premium changed by -1.4ppt week-on-week, led by consumer staples, industrials, financials and offset by information technology, consumer discretionary, energy.
We highlight weekly changes in A-H premium for CNOOC, Air China, China Southern Air, Guangzhou Auto.

HK Short Interest Weekly: Meituan, Shk Ppt, Baba, Bud Apac, New World Dev

We analyzed the latest HK SFC report for aggregate short position as of Mar 1st.
Top short increases and decreases were tabulated for one week and four week period.
We highlight short changes in Meituan, Shk Ppt, Baba, Bud Apac, New World Dev.

Hong Kong Connect Flows (Mar 8th): Meituan, China Mobile, CNOOC

We analyze the weekly Hong Kong Connect flows with our data engine for holding position as of March 8th.
The top stocks by inflows and outflows were tabulated for all market, HSCEI, mid cap and s/mid cap groups.
We highlight flows for thre stocks, Meituan, China Mobile, and CNOOC.

Northbound Flows (Mar 8th): China Yangtze Power, CATL, Tongwei, Foxconn Industrial Internet