Smartkarma Daily Briefs

The GoI is looking to raise up to US$248m from selling its stake in Neyveli Lignite (NLC IN).
This seems to be part of the GoI’s ongoing divestment drive across PSUs, with the recent selldowns in other PSUs having done well.
The GoI had also sold some stake in the firm earlier in Oct 2017.

Morning Views Asia: Adani Green Energy

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.

Adani Green Energy

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

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

✓ Unlimited Research Summaries
✓ Personalised Alerts
✓ Custom Watchlists
✓ Company Data and News
✓ Events & Webinars

Mar 08

Daily Brief China: JD.com Inc (ADR), China Vanke (H), Sasseur REIT, Li Auto , SenseTime Group , Fu Shou Yuan, Shanghai REFIRE Group, Sun Hung Kai Properties, Vinda International, SITC International and more

By Smartkarma Daily Briefs | China, Daily Briefs

In today’s briefing:

JD.com (JD US): Improved Shareholder Return Is Key
China Vanke: Should Investors Be Worried?
Sasseur REIT (SGX: CRPU) – A Play On China Consumption Via The Operations-Focused Outlet Sector
Quiddity HSTECH Jun 24 Leaderboard: Capping Flows Li Auto, Meituan, and XPeng
Quiddity HSCEI Jun 24 Flow Expectations: Many Reasons to Follow the Developments Closely
Fu Shou Yuan (1448 HK): Proposing a Special Dividend
Shanghai REFIRE Group Pre-IPO Tearsheet
HK RE Series (2): Market Is Still Bearish but Bottom Is Near, Few Things Needed for Re-Rating
Vinda (3331 HK): Offer Now Open
SITC International (1308 HK): Bidding Farewell to the Trough

JD.com (JD US): Improved Shareholder Return Is Key

By Steve Zhou, CFA

JD.com Inc (ADR) (JD US) reported a set of better-than-expected 4Q23 results yesterday, as the ADR rose 16% last night in US trading session.
The improvement in net profit margin showed that being more price competitive did not lead to lower margins.
I believe the key takeaway, aside from the resilient 4Q23 results and solid 2024 outlook, is the much improved shareholder return measures.

China Vanke: Should Investors Be Worried?

By Fern Wang

China Vanke has caused jitters as it was reported to be closely watched by some insurers as it seeks to rollover some of its debt with insurers.
It is reported that it has sufficient funding to repay its bond due on March 11th and is lining up a HK$1.5 billion syndication loan.
Vanke warrants close monitoring as there is no sign of turning in its reducing contract sales, deteriorating cash position, shrinking financing ability.

Sasseur REIT (SGX: CRPU) – A Play On China Consumption Via The Operations-Focused Outlet Sector

By Robert Ciemniak

The Smartkarma Corporate Webinar | Sasseur REIT: A Glimpse into China’s Outlet Industry on Feb 29 explored the Oulet sector with Sasseur REIT, a Singapore REIT focused on China Outlets.
Sasseur REIT is 57.85% owned by the Sasseur Group operating China outlets since 2008, with 4 outlets in 3 major Tier-2 cities currently in the REIT, with room for expansion.
Sasseur REIT is a play on China consumption and outlet operations. 2023 EMA rental income +10.7% Y/Y. The 9.1% dividend yield stands out, at a relatively low aggregate leverage.

Quiddity HSTECH Jun 24 Leaderboard: Capping Flows Li Auto, Meituan, and XPeng

By Janaghan Jeyakumar, CFA

The HSTECH Index tracks the performance of the top 30 technology companies listed in Hong Kong that have high business exposure to certain technology themes.
In this insight, we take a look at the rankings of potential ADDs and potential DELs for the June 2024 index rebal event.
While there are no expected ADDs/DELs for HSTECH in June 2024, some index members like Li Auto (2015 HK), Meituan (3690 HK), and XPeng (9868 HK) could experience capping flows.

Quiddity HSCEI Jun 24 Flow Expectations: Many Reasons to Follow the Developments Closely

By Janaghan Jeyakumar, CFA

The HSCEI serves as a benchmark to reflect the overall performance of the top 50 “Mainland China” securities listed in Hong Kong.
In this insight, we take a look at the potential index changes and the resultant capping flows for HSCEI index rebal event in June 2024.
Based on the current data, I see two low-conviction ADDs and two low-conviction DELs.

Fu Shou Yuan (1448 HK): Proposing a Special Dividend

By Osbert Tang, CFA

Fu Shou Yuan (1448 HK) is likely to declare a special dividend in its FY23 result announcement as indicated in its board meeting notification.
Net cash at end-1H23 amounted to 14.5% of its current share price, providing room for imagination of the amount of special dividends.
Besides raising its yield, returning excess cash should raise its ROE. This will also demonstrate the management’s confidence on the outlook and its financial position.

Shanghai REFIRE Group Pre-IPO Tearsheet

By Sumeet Singh

Shanghai REFIRE Group (SRG) is looking to raise around US$100m in its upcoming Hong Kong IPO. The bookrunner for the deal is CICC.
SRG designs, develops, manufactures, and sells hydrogen fuel cell systems, hydrogen production systems, and related components, as well as provides fuel cell engineering and technical services.
According to Frost & Sullivan (F&S), it ranked first in the hydrogen fuel cell system market in China, with a market share of 25.9%.

HK RE Series (2): Market Is Still Bearish but Bottom Is Near, Few Things Needed for Re-Rating

By Jacob Cheng

Markets continue to be extremely bearish on HK/China, we look at the latest property market fundamentals and macro indicators, as well as company updates of our top picks
In the latest budget, the HK government just announced to scrap all spicy measures on property market and eased mortgage policy
With government support, we view the bottom of physical market is near. For further re-rating, we need interest rate to go down, as well as resumed fund flows.

Vinda (3331 HK): Offer Now Open

By David Blennerhassett

PRC regulatory approvals were satisfied on the 4th March for the Tanoto family’s HK$23.50 pre-conditional Offer for Vinda International (3331 HK).
The Circular has been dispatched, and the Offer is now open for acceptances.
With a 50% minimum acceptance condition and irrevocables of 72.624% (plus Tanoto’s 7.69% direct stake), this should turn unconditional on or before the 19th March

SITC International (1308 HK): Bidding Farewell to the Trough

By Osbert Tang, CFA

The 72.5% decline in SITC International (1308 HK)‘s FY23 earnings is disappointing but should already reflected in the share price given the profit warning. Instead, this may be the trough.
Spot freight rates for key intra-Asia routes have already recovered since 3Q23, with the YTD level higher than the 2H23 average. The 1H24 result may show a sequential rebound.
Even assuming flat YoY earnings in FY24, it still sits on a 9% dividend yield. The projected ROE of over 24% and net cash position mean 1.6-1.7x P/B undemanding.

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

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

✓ Unlimited Research Summaries
✓ Personalised Alerts
✓ Custom Watchlists
✓ Company Data and News
✓ Events & Webinars

Mar 08

Daily Brief Japan: Keisei Electric Railway Co, Oriental Land, JSR Corp, Shinko Electric Industries, Ryohin Keikaku, Nikkei 225, Alphapolis, TSE Tokyo Price Index TOPIX and more

By Smartkarma Daily Briefs | Daily Briefs, Japan

In today’s briefing:

Oriental Land (4661) Placement by Keisei Rail (9009) Says “That’s the Door”
Oriental Land Co Placement – Relatively Small One to Digest, Overhang Might Not Be as Large
JSR (4185) – Reporters Reportedly Report Conditions Such That JIC Deal Could Come Soon
Shinko Electric (6967) – Break/Gap Risk Is Considerably Changed Now
JSR Corporation (4185 JP): Response to SUNY RF Lawsuit and Rumours of SAMR Approval
Ryohin Keikaku (7453): Q1 FY08/24 Update
EQD | Nikkei 225 Pullback: Buy-The-Dip Opportunity
Alphapolis (9467) – Thursday, Dec 7, 2023
From the Reality of 4%, Mandatory English Disclosure of Annual Securities Reports Is a High Hurdle

Oriental Land (4661) Placement by Keisei Rail (9009) Says “That’s the Door”

Over two decades, Keisei Electric Railway Co (9009 JP) has been the subject of softer and harder activist efforts to have Keisei monetise its stake in affiliate Oriental Land (4661).
The most recent efforts were by Palliser last fall, briefly discussed here two weeks ago when Keisei announced a buyback.
Today, Keisei announced (Japanese only) an Accelerated Block Offering of 1% of Oriental Land shares. The accompanying announcement is worth reading. It’s pretty clear.

Oriental Land Co Placement – Relatively Small One to Digest, Overhang Might Not Be as Large

Keisei Electric Railway Co (9009 JP) is looking to raise up to US$553m from selling a 1% stake in Oriental Land (4661 JP).
Palliser Capital, has been pushing Keisei Electric Railway to reduce its stake in OLC to unlock shareholder value owing to the wide discrepancy between carrying/market value of the former’s investment.
Selling just 1% of shares outstanding, the deal wouldn’t be a very large one to digest, representing 4.7 days of OLC’s three month ADV.

JSR (4185) – Reporters Reportedly Report Conditions Such That JIC Deal Could Come Soon

JSR Corp (4185 JP) saw its stock pop Monday when an article in a Japanese paper said the Tender Offer would start “within the month.”
Investors went from “concerned about delay or worse” to “anticipating resolution.” Then Wednesday just before the close the stock popped as media outlets reportedly reported no SAMR approval was required.
There has been no comment from either JIC or JSR but the discount to terms has gone from 6.9% last Friday to a 1.7% discount now.

Shinko Electric (6967) – Break/Gap Risk Is Considerably Changed Now

Seven weeks ago I wrote about Shinko Electric Industries (6967 JP)‘s changing Break/Gap Risk as comps had gained. Shinko was cheap to its main comp and peers vs Announcement Date.
Since then, Shinko is +4.1% and direct peer Ibiden Co Ltd (4062 JP) is -14.5%. This has erased Shinko’s underperformance since announcement, and shrunk a 9% spread to 3.3% yesterday.
With the spread tighter and tech showing some weakness, I’d be happy unwinding at yesterday’s closing spread (3.3%).

JSR Corporation (4185 JP): Response to SUNY RF Lawsuit and Rumours of SAMR Approval

JSR Corp (4185 JP) has filed a solid response to SUNY RF’s lawsuit. SUNY RF will counter with a response by 13 March.
The response suggests that SUNY RF’s lawsuit will not be harmed if JIC proceeds with TOB, which is the strongest indication that JIC is comfortable taking on the litigation risk.
A media article stating that SAMR has allowed JIC to withdraw its merger control filing helps explain the current tight spread. However, the article needs to be treated with caution.

Ryohin Keikaku (7453): Q1 FY08/24 Update

By Shared Research

Ryohin Keikaku (7453 JP) offers products covering all aspects of daily life.
For FY08/23, Ryohin Keikaku reported consolidated operating revenue of JPY581.4bn , operating profit of JPY33.1bn, recurring profit of JPY36.2bn, and net income attributable to owners of the parent of JPY22.1bn.
The company’s full-year FY08/24 forecast calls for operating revenue of JPY640.0bn, operating profit of JPY48.0bn, recurring profit of JPY46.0bn and net income attributable to shareholders of the parent of JPY33.3bn.

EQD | Nikkei 225 Pullback: Buy-The-Dip Opportunity

By Nico Rosti

The Nikkei 225 INDEX is initiating a pullback that should be a buy-the-dip opportunity.
The first buyable area for a LONG trade, this week, is 39600 and 39300 (this week) and down to 38100 (next week).
The index should restart its rally after the pullback, and there is a good chance the pullback won’t last for more than 1-2 weeks.

Alphapolis (9467) – Thursday, Dec 7, 2023

By Value Investors Club

Alphapolis is a high-margin publisher of novels and manga, leveraging user-generated content to create salable products
The company is expanding into anime, opening up new potential revenue streams
Despite trading at a 5-year low, Alphapolis stands out with impressive sales and profit growth, offering good growth prospects and potential for a 2-3x return on investment on a 5-year horizon

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

From the Reality of 4%, Mandatory English Disclosure of Annual Securities Reports Is a High Hurdle

By Aki Matsumoto

TSE has published a proposal to require simultaneous disclosure of financial statements and timely disclosure information in both Japanese and English from April 2025 (for March fiscal year end companies).
The elimination of time gap between disclosure of financial statements in Japanese and English and the expansion of English-language disclosure of timely disclosure information are advances resulting from this revision.
As TSE continues to consider expanding the range of documents covered, the focus is on when English-language disclosure of annual securities reports, which cover all important information, will become mandatory.

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

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

✓ Unlimited Research Summaries
✓ Personalised Alerts
✓ Custom Watchlists
✓ Company Data and News
✓ Events & Webinars

Mar 07

Most Read: Woori Financial Group , Alumina Ltd, Titan Co Ltd, Fast Retailing, New World Development, IDP Education, ARM Holdings, Kumho Petro Chemical, Shenzhen New Industries Biomedical Engineering-A, Shinhan Financial and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

Investigating Potential Block Deals Involving Korea’s Financial Holding Companies
Alumina (AWC AU): Further Thoughts on Alcoa’s Proposal
NIFTY100 Low Volatility 30 Index Rebalance Preview: Titan Could Replace IOCL
Sep24 Nikkei 225 Rebal – 2 ADDs, 2 DELETEs Maybe, but Rebals Tougher, and Fastie+TEL Are the FUN
StubWorld: Troubling Signs For NWD (17 HK)
MVIS Australia Equal Weight Index Rebalance Preview: Three Close Deletions
ARM Holdings IPO Lock-Up Expiry – A US$127bn Lockup Release Might Be Too Tempting to Pass On
Interpreting Kumho Petro Chemical’s Unexpected Move to Cancel Treasury Shares
CSI300 Index Rebalance Preview: Potential Adds Outperforming Despite ETF Inflows
Shinhan Financial Group Placement – Recent Selldowns Have Held up Since, Momentum Is Strong as Well

Investigating Potential Block Deals Involving Korea’s Financial Holding Companies

By Sanghyun Park

Stake sales by Affinity and Bearing PE are attractive due to the absence of special partnerships with Shinhan Financial Group, indicating favorable exit potential at current stock prices.
KB Financial draws attention due to Carlyle’s ₩240B EB investment in 2020. Carlyle can now convert to shares at ₩48,000/share, yielding 37.08%.
Woori Financial is intriguing. IMM PE and Eugene PE hold stakes, investing ₩450B and ₩386B respectively. Their yields are 32.55% and 10.45% respectively. No constraints on divestment.

Alumina (AWC AU): Further Thoughts on Alcoa’s Proposal

I have received several questions from readers on Alcoa (AA US)’s non-binding proposal for Alumina Ltd (AWC AU) in the context of the current gross spread of 9.2%.
The questions primarily concerned Citic Resources Holdings (1205 HK) voting intentions, the probability of a bump and the likelihood of Aloca shareholders supporting the transaction.
CITIC Resources’ lack of public endorsement of the transaction is due to HKEx listing requirements and not an indication of a NO vote risk.

NIFTY100 Low Volatility 30 Index Rebalance Preview: Titan Could Replace IOCL

With the review period complete, Titan Co Ltd (TTAN IN) should replace Indian Oil Corp (IOCL IN) in the Nifty100 Low Volatility 30 Index at the close on 27 March.
Constituent changes, volatility changes and capping changes will result in one-way turnover of 13.2% resulting in a one-way trade of INR 4.2bn.
The flows on the stocks are not very large but there will be same side and offsetting flows from other index trackers at the same time.

Sep24 Nikkei 225 Rebal – 2 ADDs, 2 DELETEs Maybe, but Rebals Tougher, and Fastie+TEL Are the FUN

Now that the March 2024 Nikkei 225 Rebalance is decided, we have a model for the Sep 2024 Review. As previously discussed on Smartkarma, actual name changes get tough now.
As of now, there should be two ADDs and two DELETEs. They might not occur. But there are two other situations which create interesting dynamics around big names.
The dynamics of Fast Retailing and Tokyo Electron promise more fun than the actual name changes in September 2024. It impacts how you trade Nikkei vs TOPIX and tech internals.

StubWorld: Troubling Signs For NWD (17 HK)

By David Blennerhassett

Despite the lifting of the “spicy” property cooling measures last week, New World Development (17 HK) has plumbed fresh P/B lows after a (very) brief respite.
Preceding my comments on NWD are the current setup/unwind tables for Asia-Pacific Holdcos.
These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation >20%.

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.

ARM Holdings IPO Lock-Up Expiry – A US$127bn Lockup Release Might Be Too Tempting to Pass On

By Sumeet Singh

Softbank raised around US$4.9bn via selling some of its stake in ARM Holdings (ARM US)’ US IPO. Its remaining 90% stake will be released from its IPO linked lockup soon.
ARM develops and licenses high-performance, low-cost, and energy-efficient CPU products and related technology, which is used by semiconductor companies and OEMs to develop their own products.
In this note, we talk about the upcoming lock-up expiry and possible deal dynamics.

Interpreting Kumho Petro Chemical’s Unexpected Move to Cancel Treasury Shares

By Sanghyun Park

Kumho Petro Chemical (011780 KS) intends to retire 50% of its common shares, totaling 2,624,417 shares, starting from the 2024 fiscal year until the 2026 fiscal year.
With the annual general meeting nearing, NPS hasn’t revealed its support, causing unease for Park Chan-gu. Considering NPS’s obligation to the Value-Up policy, cancellation seems inevitable for Park Chan-gu.
Whether the battle persists hinges on NPS’s stance. If NPS backs Park Chan-gu, their stake surpassing 25% could deter the opposition’s financial strength. Conversely, NPS’s neutrality could escalate the battle.

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.

Shinhan Financial Group Placement – Recent Selldowns Have Held up Since, Momentum Is Strong as Well

EQT (EQT SS) , via Supreme, is looking to raise US$311m from selling its stake in Shinhan Financial (055550 KS).
Momentum on the stock has been strong over the past few months, and the recent selldowns in the stock have held up by the end of the week.
The share sale here will be a cleanup one, and a small one to digest at just 5.3 days of ADV.

💡 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 Analytics and News
✓ Events & Webinars

Mar 07

Daily Brief Utilities: China Power International and more

By Smartkarma Daily Briefs | Daily Briefs, Utilities Sector

In today’s briefing:

China Power International (2380 HK): We See More Upside

China Power International (2380 HK): We See More Upside

By Osbert Tang, CFA

China Power International (2380 HK)‘s Jan power sales showed a sharp 41.2% YoY growth. More importantly, this marks sustaining a solid MoM trend in the last few months.
Recovery of the hydropower generation is encouraging as this was a drag last year. Meanwhile, higher coal-fired generation will capture the better profitability of this segment.
CPI’s strongest earnings CAGR in the sector has made its earnings multiples increasingly cheap over the next two years. After +15.7% YTD in its share price, there is further upside.

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

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

✓ Unlimited Research Summaries
✓ Personalised Alerts
✓ Custom Watchlists
✓ Company Data and News
✓ Events & Webinars

Mar 07

Daily Brief Energy/Materials: Kumho Petro Chemical, Azure Minerals, Silver, Daiichi Kigenso Kagaku Kogyo, CNX Resources and more

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

In today’s briefing:

Interpreting Kumho Petro Chemical’s Unexpected Move to Cancel Treasury Shares
Kumho Petrochemical – A Significant Shares Cancellation Announcement
Azure Minerals (AZS AU): Scheme Vote on 8 April
Silver: Is a Breakout Imminent?
Daiichi Kigenso Kagaku-Kogyo (4082) – Awaiting Solid Execution
CNX Resources: Hit the Gas – [Business Breakdowns, EP.152]

Interpreting Kumho Petro Chemical’s Unexpected Move to Cancel Treasury Shares

By Sanghyun Park

Kumho Petro Chemical (011780 KS) intends to retire 50% of its common shares, totaling 2,624,417 shares, starting from the 2024 fiscal year until the 2026 fiscal year.
With the annual general meeting nearing, NPS hasn’t revealed its support, causing unease for Park Chan-gu. Considering NPS’s obligation to the Value-Up policy, cancellation seems inevitable for Park Chan-gu.
Whether the battle persists hinges on NPS’s stance. If NPS backs Park Chan-gu, their stake surpassing 25% could deter the opposition’s financial strength. Conversely, NPS’s neutrality could escalate the battle.

Kumho Petrochemical – A Significant Shares Cancellation Announcement

By Douglas Kim

After the market close on 6 May, Kumho Petrochem announced a significant shares cancellation program which is likely to have a positive impact on its share price.
The company announced that it will cancel 430 billion won worth of its common shares in the next three years, representing nearly 10.5% of its market cap.
Park Chul Wan, nephew of Kumho Petrochem Chairman Park Chan Koo, has been very vocal about the need for Kumho Petrochem to improve its corporate governance in past several years.

Azure Minerals (AZS AU): Scheme Vote on 8 April

The Azure Minerals (AZS AU) IE considers Sociedad Quimica y Minera de Chile (SQM US)/Hancock’s scheme and takeover offer fair and reasonable as it is above its A$2.03-2.93 valuation range.
The scheme is conditional on FIRB approval, which should be forthcoming as Azure’s key asset (Andover) will be majority-owned by Australian entities.
The scheme vote will get up due to irrevocables and retail support. At the last close and for the 18 April payment, the gross/annualised spread was 3.1%/29.2%.

Silver: Is a Breakout Imminent?

By Untying The Gordian Knot

Gold and Silver have remained unresponsive to lower rates, escalating geopolitical risks and higher China and India seasonal demand.
Notably, early February saw the emergence of two contrarian signals that merited closer attention.
While these signals are not foolproof market timing tools, they warrant attention when they align with technical support levels within an established consolidation pattern.

Daiichi Kigenso Kagaku-Kogyo (4082) – Awaiting Solid Execution

By Astris Advisory Japan

Q1-3 FY3/24 results were in line with company guidance, reflecting the strategic importance for DKK to scale its new growth initiatives.
Ongoing positive developments related to semiconductor, secondary battery, and biomaterial applications were offset by weakness in electronics and the mature profile of the core automotive catalyst business.
Operating a business model that is externally driven (such as FX movements and raw materials market pricing), the company has disclosed ROIC targets that coincide with its current 10-year plan for FY3/32.

CNX Resources: Hit the Gas – [Business Breakdowns, EP.152]

By Business Breakdowns

CNX is an ENP exploration and production business focusing on natural gas with a long history in the energy sector
CNX evolved from a coal company to a natural gas producer under new management led by CEO Nick
The current business model focuses on monetizing assets, separating coal business, and leveraging the productive Marcellus shale for low-cost advantage.

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

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

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

✓ Unlimited Research Summaries
✓ Personalised Alerts
✓ Custom Watchlists
✓ Company Data and News
✓ Events & Webinars

Mar 07

Daily Brief Industrials: Japan Airlines, Angel Robotics , Forward Air and more

By Smartkarma Daily Briefs | Daily Briefs, Industrials

In today’s briefing:

Japanese Airlines – ANA’s Margin Outperformance Poses Big Questions for JAL
Angel Robotics: IPO Preview
Forward Air (FWRD US | BUY | TP:USD59.5): A Toad, but There Is a Prince Inside

Japanese Airlines – ANA’s Margin Outperformance Poses Big Questions for JAL

By Neil Glynn

We refresh estimates for ANA and JAL, and highlight we think the strength of FY24 makes it difficult for ANA to avoid an earnings decline in FY25.
However, ANA’s superior recovery to JAL poses bigger questions for JAL as it revisits its medium term plan on 21 March
Our deep dive on margin management at each carrier suggests a revenue problem rather than a cost problem at JAL; but without revenue improvements, it will have to cut costs

Angel Robotics: IPO Preview

By Douglas Kim

Angel Robotics is getting ready to complete its IPO in KOSDAQ in March. The IPO price range is from 11,000 won to 15,000 won.
The IPO offering amount is from 17.6 billion won to 24 billion won. At the IPO price range, the company’s valuation ranges from 154 billion won to 210 billion won.
Angel Robotics is likely to be compared to Doosan Robotics and Rainbow Robotics.

Forward Air (FWRD US | BUY | TP:USD59.5): A Toad, but There Is a Prince Inside

By Mohshin Aziz

A highly unpopular acquisition driving investors and sell-side analysts up the wall. Forward Air is OVERSOLD on almost all technical indicators and valuations are the lowest in its history
Our analysis suggests it is not all that bad, the business will still be profitable and generate positive free cash flow
Our fair value of USD59.50 (+97% UPSIDE) is derived by 2x current Book Value. A potential double-bagger, will be rewarding for the patient investors

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

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

✓ Unlimited Research Summaries
✓ Personalised Alerts
✓ Custom Watchlists
✓ Company Data and News
✓ Events & Webinars

Mar 07

Daily Brief TMT/Internet: Hua Hong Semiconductor, ARM Holdings, Taiwan Semiconductor (TSMC), Sakura internet, Wiwynn Corp, Redbubble Ltd, Globalwafers, Hewlett Packard Enterprise and more

By Smartkarma Daily Briefs | Daily Briefs, TMT/Internet

In today’s briefing:

Hua Hong Semiconductor: AI, EV and New Energy Opportunities at a Leading Chinese Foundry
ARM Holdings (ARM US): Lock up Expiry on 12 March
Emerging Markets Ex-China: Looking Back… And Forward
Sakura Internet (3778) | Blossoming in the Cloud?
Wiwynn GDRs Early Look – US$1.3bn Taiwan GDR Would Be Easily Digested
Dear COVID Darling
GlobalWafers (6488.TT): 1Q24F Is a Down Quarter; Anticipating a Much Better Growth Rate in 2025F.
Hewlett Packard Enterprise (HPE) – Wednesday, Dec 6, 2023

Hua Hong Semiconductor: AI, EV and New Energy Opportunities at a Leading Chinese Foundry

By Smartkarma Research

For our next Corporate Webinar, we are glad to welcome Hua Hong Seminconductor’s Chief Financial Officer, Daniel Yu-Cheng Wang.

In the upcoming webinar, Daniel will share a short company presentation after which, he will engage in a fireside chat with Smartkarma Insight Provider, Eric Wen. The Corporate Webinar will include a live Q&A session.

The Corporate Webinar will be hosted on Tuesday, 12 March 2024, 16:00 SGT.

Register for the Webinar here

About Hua Hong Semiconductor

Hua Hong Semiconductor Limited, an investment holding company, manufactures and sells semiconductor products. The company provides embedded non-volatile memory, standard logic and mixed-signal, radio frequency, power management integrated circuits, power discrete, and automotive solutions. It also offers foundry services; and design services comprising standard and customized IP development, full-custom layout design, and customer-specific integrated solutions, as well as design support and tape out services. In addition, the company provides multi-project wafer services; mask making services; and backend services, such as in-house testing, backside processing and dicing, and backend turnkey services, as well as assembly and testing services.

Further, it engages in real estate development. Its products are used in consumer electronics, communications, computing, industrial, and automotive markets in the People’s Republic of China, North America, Europe, Japan, and other Asian countries. The company was founded in 1997 and is headquartered in Shanghai, the People’s Republic of China. Hua Hong Semiconductor Limited is a subsidiary of Shanghai Alliance Investment Ltd.

ARM Holdings (ARM US): Lock up Expiry on 12 March

Softbank Group (9984 JP)’s 180-day lock-up period on its 89.75% ARM Holdings (ARM US) shareholding expires on 12 March. SoftBank’s stake is worth US$124 billion.
SoftBank will likely monetise its ARM stake using the Alibaba (ADR) (BABA US) playbook. This playbook uses prepaid forward contracts to raise capital with eventual settlement through shares.
ARM is currently trading 2.6x its IPO price on AI-driven hype. ARM trades at a premium multiple to NVIDIA Corp (NVDA US), despite forecasted lower growth and margin.

Emerging Markets Ex-China: Looking Back… And Forward

We first wrote about the iShares Emerging Markets ex-China (EMXC US) ETF 3 years ago when AUM was less than US$500m. AUM now stands at US$11bn.
IShares Emerging Markets ex-China (EMXC US) has outperformed iShares Emerging Markets (EEM US) and iShares Emerging Markets Asia (EEMA US) with lower volatility and a lower drawdown.
With the Chinese economy misfiring and markets under pressure, we could see a further shift in positioning away from China and that means inflows to other Emerging Markets.

Sakura Internet (3778) | Blossoming in the Cloud?

By Mark Chadwick

Sakura Internet, a Japanese cloud provider, has seen a significant surge in stock price and market capitalization due to entry into AI cloud services.
The company plans to invest in NVIDIA H100 GPUs for AI servers, expecting substantial demand but with uncertain revenue and profitability projections.
Risks include concentrated ownership, lack of analyst coverage, potential shareholder pressure, and competition from larger cloud providers like AWS with advanced AI computing capabilities.

Wiwynn GDRs Early Look – US$1.3bn Taiwan GDR Would Be Easily Digested

Wiwynn Corp (6669 TT) is looking to raise up to US1.3bn in its upcoming global depository receipts (GDRs) offering.
Wiwynn recently reported its board’s resolution to issue up to 17m new shares in the form of GDRs for purchasing overseas raw materials, debt repayment, investing overseas and others.
Similar to previous GDR listings, the deal is a long drawn out process with the firm required to jump through a number of board/shareholder/regulatory approval loops.

Dear COVID Darling

By The Mikro Kap

Redbubble was a bubble. On the wings of pandemic mania, the stock price increased 13 times from March 2020 to January 2021.
Reaching a 1.9B market cap. Today, the situation looks quite different.
The stock is down 93% from its highs of 7 AUD and currently sits at 0.

GlobalWafers (6488.TT): 1Q24F Is a Down Quarter; Anticipating a Much Better Growth Rate in 2025F.

By Patrick Liao

The sales in January 2024 were the lowest during the period of 2022-2024, indicating a likely downtrend for the first quarter of 2024.
Demand is expected to be flat or slightly increase in 2Q24F for GlobalWafers, which is encouraging.
The market for 12″ raw wafers is expected to have a more stable demand-supply balance, while raw wafers of 8” and smaller sizes could experience reduced demand in 1H24F.

Hewlett Packard Enterprise (HPE) – Wednesday, Dec 6, 2023

By Value Investors Club

Key points

HPE is a $21.5 billion provider of networking, servers, and storage products, with a focus on higher quality businesses and services
The company generates cash from operations and divestitures, presenting an attractive investment opportunity with potential for upside to $29/share or a 35% IRR through 10/2025
HPE’s recent Security Analysts Meeting emphasized its business segments, particularly highlighting opportunities in the Compute segment for AI inferencing needs and Proliant Gen 11 servers

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

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

✓ Unlimited Research Summaries
✓ Personalised Alerts
✓ Custom Watchlists
✓ Company Data and News
✓ Events & Webinars

Mar 07

Daily Brief Health Care: Shenzhen New Industries Biomedical Engineering-A, UMP Healthcare, Pharmaessentia Corp and more

By Smartkarma Daily Briefs | Daily Briefs, Healthcare

In today’s briefing:

CSI300 Index Rebalance Preview: Potential Adds Outperforming Despite ETF Inflows
UMP Medical (722 HK): Slow H124, Deep Value, Execution Remains Key
Pharmaessentia Corp (6446 TT): Readying for Next Growth Phase with Besremi’s Continued Traction

CSI300 Index Rebalance Preview: Potential Adds Outperforming Despite ETF Inflows