Smartkarma Daily Briefs

On 21 February, Bloomberg reported that due to the steep share price declines, major ESR Group (1821 HK) shareholders are considering options for their stakes, including ESR’s privatisation.
The reports also noted buyer interest in ESR’s significant assets. Past share dealings suggest that Warburg Pincus and the co-founders are the likely consortium to lead a potential privatisation.
The offer probability is low as a scheme would likely require a HK$16.00 offer, posing a funding challenge. Nevertheless, the upside remains as ESR trades at an undemanding valuation.

STAR100 Index Rebalance: Ten Changes a Side; Adds Outperforming as Expected

There are 10 changes for the STAR100 Index in March. We correctly forecast all 10 deletes and got 8 of the 10 adds right.
Estimated one-way turnover is 6.8% and that results in a one-way trade of CNY 1.79bn. Nearly all constituent changes have more than 1 day of ADV to trade.
The adds have started to outperform the deletes and the index over the last couple of weeks and there could be more outperformance in the next two weeks.

Trip.com Q4 Quick Take: Strong Top-Line Growth | Impressive Expense Control | And Not Expensive

By Daniel Hellberg

Trip.com reported a strong set of Q4 and FY23 earnings results last week
Company has held the line on SG&A expenses; look for strong H124 growth
We believe shares are cheap and recommend investors buy below US$43/ADS

Merger Arb Mondays (26 Feb) – China TCM, Azure, A2B, Boral, CSR, Outsourcing, Snow Peak, Genetron

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 Probiotec Ltd (PBP AU), JSR Corp (4185 JP), Shinko Electric Industries (6967 JP), CSR Ltd (CSR AU), China Traditional Chinese Medicine (570 HK), Lithium Power International (LPI AU).
Lowest spreads – Tietto Minerals Ltd (TIE AU), Orecorp Ltd (ORR AU), Pact Group Holdings (PGH AU), CPMC Holdings (906 HK), T&K Toka Co Ltd (4636 JP), Snow Peak.

ECM Weekly (26th Feb 2024) – Trial Holdings, Juniper, Xiaocaiyuan, Union Bank, Orica, Azure

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, we looked at Trial Holdings (5882 JP) refiling and Xiaocaiyuan International Holding .
For placements, it was an action packed week in India, again, with Australia joining in as well.

Luckin Coffee (LKNCY US): Feeling Lucky in a Challenging Market

By Osbert Tang, CFA

Luckin Coffee (LKNCY US) concluded FY23 with a 203.3% surge in non-GAAP net profit to Rmb3.2bn, benefiting from higher store count and monthly transacting customers.
Luckin plans to lift store count by at least 23%, with total to reach over 20,000 in FY24. Product innovation, promotional discount reduction, and better store efficiency are profit drivers.
Net cash reached Rmb3.8bn, or 7% of market cap. With a consensus EPS forecast of 28% CAGR in the next two years, its 15.1x and 11.7x PERs are not stretched.

Ping An Healthcare and Technology (1833.HK) – Valuation Logic May Completely Change Due to New Path

By Xinyao (Criss) Wang

Fang Weihao’s departure means PAGD’s strategic transformation failed. The business model of being a “vassal” of Ping An Group seems hard to bring high valuation due to “discounted” growth potential.
PAGD is at a crossroads. The question is which development path will the new CEO choose – Follow Fang Weihao’s strategy or return to the traditional Internet healthcare business model?
Both directions have painful costs that investors will not be happy with. Therefore, we recommend that investors remain sober and rational in the face of the bullish view on PAGD.

Morning Views Asia: Powerlong Commercial Management Holdings

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.

Powerlong Commercial Management Holdings

QuantumPharm (Xtalpi) Pre-IPO – The Positives – Grand Ambitions to Open New Monetisation Channels

By Clarence Chu

QuantumPharm (QUP HK) (Xtalpi) is looking to raise US$200m in its upcoming Hong Kong IPO.
QuantumPharm is a R&D platform, utilizing quantum physics-based first-principles calculation, advanced AI, high-performance cloud computing, and scalable and standardized robotic automation to provide drug and material science R&D solutions.
In this note, we will talk about the positive aspects of the deal.

💡 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

Feb 26

Daily Brief Japan: Keisei Electric Railway Co and more

By Smartkarma Daily Briefs | Daily Briefs, Japan

In today’s briefing:

Keisei Electric Rail (9009) – A BUYBACK! But It’s Likely To Be Crossholders Selling in ToSTNeT-3

Keisei Electric Rail (9009) – A BUYBACK! But It’s Likely To Be Crossholders Selling in ToSTNeT-3

Keisei Electric Railway Co (9009 JP) has long been the target of activist-ish-y holders who seek to have the company monetise its 20+% stake in Oriental Land (4661 JP).
Last autumn (17-Oct-2023), Keisei was the subject of a presentation by activist-ish-y fund Palliser Capital who called the stock 43% undervalued. They want Keisei to sell some OLC shares.
Palliser wanted Keisei to use resulting monies for growth capex+shareholder return, improve IR/governance, shrink board, adopt KPIs, etc. Thursday we got an announcement of a 2.9% stock buyback.

💡 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

Feb 26

Daily Brief Industrials: Keisei Electric Railway Co, Superloop Ltd, Airbus , Millennium Services Group Ltd and more

By Smartkarma Daily Briefs | Daily Briefs, Industrials

In today’s briefing:

Keisei Electric Rail (9009) – A BUYBACK! But It’s Likely To Be Crossholders Selling in ToSTNeT-3
Aussie Broadband’s Non-Binding Indicative Offer for Superloop
Airbus Se (EADSY) – Sunday, Nov 26, 2023
Guidance and scheme of arrangement on track
Millennium Services Group Ltd – Guidance and Scheme of Arrangement on Track

Keisei Electric Rail (9009) – A BUYBACK! But It’s Likely To Be Crossholders Selling in ToSTNeT-3

Keisei Electric Railway Co (9009 JP) has long been the target of activist-ish-y holders who seek to have the company monetise its 20+% stake in Oriental Land (4661 JP).
Last autumn (17-Oct-2023), Keisei was the subject of a presentation by activist-ish-y fund Palliser Capital who called the stock 43% undervalued. They want Keisei to sell some OLC shares.
Palliser wanted Keisei to use resulting monies for growth capex+shareholder return, improve IR/governance, shrink board, adopt KPIs, etc. Thursday we got an announcement of a 2.9% stock buyback.

Aussie Broadband’s Non-Binding Indicative Offer for Superloop

Right on the heels of acquiring Symbio Holdings (SYM AU), Aussie Broadband (ABB AU) has made a non-binding indicative offer to take Superloop (SLC AU) private.
Superloop (SLC AU) had initiated the proposal to take Symbio Holdings (SYM AU) private before Aussie Broadband (ABB AU) swooped in. Now ABB has SLC in its sights.
The offer is a small premium and Aussie Broadband Pty Ltd (ABB AU)‘s 33.2% premium claim is disingenuous at best. Expect pushback from the Superloop Ltd (SLC AU) Board.

Airbus Se (EADSY) – Sunday, Nov 26, 2023

Key points

Honeywell CEO optimistic about strong performance of long-cycle Aero business, particularly aero cycle
Predicts double-digit growth in 2024 and sustained high growth rates until 2030
Airbus experiencing strong orders and growing backlog, production challenges in matching supply with demand indicate tight aircraft market

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.

Guidance and scheme of arrangement on track

Human services company Millennium Services Group Ltd (ASX:MIL) has released its H1 FY24 interim result, with both revenue (pre-disclosed) and EBITDA in line with RaaS estimates.
Adjusted H1 FY24 EBITDA increased ~100% on the back of 15% revenue growth, a 20bps increase in gross margin and a well-controlled cost base.
Management has reiterated both revenue and EBITDA guidance for FY24 which are reflected in current RaaS estimates.

Millennium Services Group Ltd – Guidance and Scheme of Arrangement on Track

Human services company Millennium Services Group Ltd (ASX:MIL) has released its H1 FY24 interim result, with both revenue (pre-disclosed) and EBITDA in line with RaaS estimates.
Adjusted H1 FY24 EBITDA increased ~100% on the back of 15% revenue growth, a 20bps increase in gross margin and a well-controlled cost base.
Management has reiterated both revenue and EBITDA guidance for FY24 which are reflected in current RaaS estimates.

💡 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

Feb 26

Daily Brief Energy/Materials: Hyosung Corporation, Alumina Ltd, Petroleum Geo-Services and more

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

In today’s briefing:

Hyosung Corp (004800 KS): Spin-Off & KOSPI200 Index Implications
Alumina (AWC AU) Agrees To Alcoa’s Offer
T G S/P G S: Delayed by Competition Review, Spread

Hyosung Corp (004800 KS): Spin-Off & KOSPI200 Index Implications

Hyosung Corporation (004800 KS) has announced that it is spinning off part of its business holdings to Hyosung New Holding Corporation in a 0.818:0.182 ratio.
The stock will remain suspended from late June to late July. We expect Hyosung Corporation (004800 KS) to maintain its index membership while the New Entity will not be added.
The dynamics between listed ETFs and non-listed passive trackers differ and we take a look at the potential index flows.

Alumina (AWC AU) Agrees To Alcoa’s Offer

By David Blennerhassett

Pittsburgh-Based Alcoa (AA US) is offering 0.02854 of its own shares for each Alumina Ltd (AWC AU) share, a 13% premium to last close. Alumina recommends the Offer to shareholders.
Alumina owns a 40% stake in Alcoa World Alumina & Chemicals, a JV with Alcoa that operates bauxite mining, alumina refining, and aluminium smelting operations. Alcoa owns the remaining 60%.
Separately, Alcoa announced it has entered into an agreement with Allan Gray Australia that gives it the right to acquire up to 19.9% of Alumina. CITIC also holds 18.9%.

T G S/P G S: Delayed by Competition Review, Spread

By Jesus Rodriguez Aguilar

TGS is seizing an opportunity by acquiring a competitor at a low valuation, in an all-share deal 0.06829 TGS NO x 1 PGS NO, departing from its traditional asset-light approach.
The Merger is subject to ongoing review by UK and Norwegian competition authorities. I believe the deal will be cleared, but might be delayed until Q4.
The dividend-adjusted gross spread is 6.7%. Regulatory approval concerns seem overblown. I would set up the spread.

💡 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

Feb 26

Daily Brief Industrials: Keisei Electric Railway Co, Superloop Ltd, Airbus , Millennium Services Group Ltd and more

By Smartkarma Daily Briefs | Daily Briefs, Industrials

In today’s briefing:

Keisei Electric Rail (9009) – A BUYBACK! But It’s Likely To Be Crossholders Selling in ToSTNeT-3
Aussie Broadband’s Non-Binding Indicative Offer for Superloop
Airbus Se (EADSY) – Sunday, Nov 26, 2023
Guidance and scheme of arrangement on track
Millennium Services Group Ltd – Guidance and Scheme of Arrangement on Track

Keisei Electric Rail (9009) – A BUYBACK! But It’s Likely To Be Crossholders Selling in ToSTNeT-3

Keisei Electric Railway Co (9009 JP) has long been the target of activist-ish-y holders who seek to have the company monetise its 20+% stake in Oriental Land (4661 JP).
Last autumn (17-Oct-2023), Keisei was the subject of a presentation by activist-ish-y fund Palliser Capital who called the stock 43% undervalued. They want Keisei to sell some OLC shares.
Palliser wanted Keisei to use resulting monies for growth capex+shareholder return, improve IR/governance, shrink board, adopt KPIs, etc. Thursday we got an announcement of a 2.9% stock buyback.

Aussie Broadband’s Non-Binding Indicative Offer for Superloop

Right on the heels of acquiring Symbio Holdings (SYM AU), Aussie Broadband (ABB AU) has made a non-binding indicative offer to take Superloop (SLC AU) private.
Superloop (SLC AU) had initiated the proposal to take Symbio Holdings (SYM AU) private before Aussie Broadband (ABB AU) swooped in. Now ABB has SLC in its sights.
The offer is a small premium and Aussie Broadband Pty Ltd (ABB AU)‘s 33.2% premium claim is disingenuous at best. Expect pushback from the Superloop Ltd (SLC AU) Board.

Airbus Se (EADSY) – Sunday, Nov 26, 2023

Key points

Honeywell CEO optimistic about strong performance of long-cycle Aero business, particularly aero cycle
Predicts double-digit growth in 2024 and sustained high growth rates until 2030
Airbus experiencing strong orders and growing backlog, production challenges in matching supply with demand indicate tight aircraft market

Guidance and scheme of arrangement on track

Human services company Millennium Services Group Ltd (ASX:MIL) has released its H1 FY24 interim result, with both revenue (pre-disclosed) and EBITDA in line with RaaS estimates.
Adjusted H1 FY24 EBITDA increased ~100% on the back of 15% revenue growth, a 20bps increase in gross margin and a well-controlled cost base.
Management has reiterated both revenue and EBITDA guidance for FY24 which are reflected in current RaaS estimates.

Millennium Services Group Ltd – Guidance and Scheme of Arrangement on Track

Human services company Millennium Services Group Ltd (ASX:MIL) has released its H1 FY24 interim result, with both revenue (pre-disclosed) and EBITDA in line with RaaS estimates.
Adjusted H1 FY24 EBITDA increased ~100% on the back of 15% revenue growth, a 20bps increase in gross margin and a well-controlled cost base.
Management has reiterated both revenue and EBITDA guidance for FY24 which are reflected in current RaaS estimates.

💡 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

Feb 26

Daily Brief TMT/Internet: Taiwan Semiconductor (TSMC) – ADR, Alibaba (ADR), Chipmos Technologies, Asia Vital Components and more

By Smartkarma Daily Briefs | Daily Briefs, TMT/Internet

In today’s briefing:

Taiwan Dual-Listings Monitor: TSMC Post-CNY Spread Persisting; Why UMC Discount Could Flip Positive
ECM Weekly (26th Feb 2024) – Trial Holdings, Juniper, Xiaocaiyuan, Union Bank, Orica, Azure
ChipMOS: Valuation at Risk Given Latest Results; Short Interest Shows Sentiment Has Room to Shift
Asia Vital Components (3017) – Sunday, Nov 26, 2023

Taiwan Dual-Listings Monitor: TSMC Post-CNY Spread Persisting; Why UMC Discount Could Flip Positive

By Vincent Fernando, CFA

TSMC: +17.3% Premium, High Double Digit Level Persisting Since CNY
UMC: -1.5% Discount, We Believe Spread Biased to Go Positive
ChipMOS: +0.6% Premium, Collapsed from +4.6%. Now Within Typical Range.

ECM Weekly (26th Feb 2024) – Trial Holdings, Juniper, Xiaocaiyuan, Union Bank, Orica, Azure

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, we looked at Trial Holdings (5882 JP) refiling and Xiaocaiyuan International Holding .
For placements, it was an action packed week in India, again, with Australia joining in as well.

ChipMOS: Valuation at Risk Given Latest Results; Short Interest Shows Sentiment Has Room to Shift

By Vincent Fernando, CFA

ChipMOS Margin Rebound Sputters, Guidance Implies Margins Could Remain Under Pressure
Valuation Appears Precarious In Light of Latest Results and Guidance
Valuation Appears Precarious In Light of Latest Results and Guidance

Asia Vital Components (3017) – Sunday, Nov 26, 2023

Key points

AI is a rapidly growing trend in the global market, with Taiwanese manufacturer AVC experiencing significant growth in their stock value.
AVC has shown strong financial performance in recent years, with impressive average revenue and margin metrics.
The company is expected to continue its growth trend in 2023, with higher margins than historical averages, as the impact of technology and COVID has been beneficial for AVC.

💡 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

Feb 26

Daily Brief Health Care: Bio-Thera Solutions Ltd, China Traditional Chinese Medicine, Akums Drugs and Pharmaceuticals, QuantumPharm and more

By Smartkarma Daily Briefs | Daily Briefs, Healthcare

In today’s briefing:

STAR100 Index Rebalance: Ten Changes a Side; Adds Outperforming as Expected
Merger Arb Mondays (26 Feb) – China TCM, Azure, A2B, Boral, CSR, Outsourcing, Snow Peak, Genetron
Akums Drugs and Pharmaceuticals Pre-IPO Tearsheet
QuantumPharm (Xtalpi) Pre-IPO – The Positives – Grand Ambitions to Open New Monetisation Channels

STAR100 Index Rebalance: Ten Changes a Side; Adds Outperforming as Expected

There are 10 changes for the STAR100 Index in March. We correctly forecast all 10 deletes and got 8 of the 10 adds right.
Estimated one-way turnover is 6.8% and that results in a one-way trade of CNY 1.79bn. Nearly all constituent changes have more than 1 day of ADV to trade.
The adds have started to outperform the deletes and the index over the last couple of weeks and there could be more outperformance in the next two weeks.

Merger Arb Mondays (26 Feb) – China TCM, Azure, A2B, Boral, CSR, Outsourcing, Snow Peak, Genetron

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 Probiotec Ltd (PBP AU), JSR Corp (4185 JP), Shinko Electric Industries (6967 JP), CSR Ltd (CSR AU), China Traditional Chinese Medicine (570 HK), Lithium Power International (LPI AU).
Lowest spreads – Tietto Minerals Ltd (TIE AU), Orecorp Ltd (ORR AU), Pact Group Holdings (PGH AU), CPMC Holdings (906 HK), T&K Toka Co Ltd (4636 JP), Snow Peak.

Akums Drugs and Pharmaceuticals Pre-IPO Tearsheet

By Ethan Aw

Akums Drugs and Pharmaceuticals (0200361D IN) is looking to raise >US$100m in its upcoming India IPO. The deal will be run by ICICI Securities, Axis Capital, Citigroup and Ambit.
Akums Drugs and Pharmaceuticals (ADP) is a pharmaceutical contract development and manufacturing organization (CDMO) offering a comprehensive range of pharmaceutical products and services in India and overseas.
As a CDMO, it produces a range of dosage forms including tablets, capsules, liquid orals, vials, ampoules, blow-filled seals, topical preparations, eye drops, dry powder injections, and gummies, among others.

QuantumPharm (Xtalpi) Pre-IPO – The Positives – Grand Ambitions to Open New Monetisation Channels

By Clarence Chu

QuantumPharm (QUP HK) (Xtalpi) is looking to raise US$200m in its upcoming Hong Kong IPO.
QuantumPharm is a R&D platform, utilizing quantum physics-based first-principles calculation, advanced AI, high-performance cloud computing, and scalable and standardized robotic automation to provide drug and material science R&D solutions.
In this note, we will talk about the positive aspects of the deal.

💡 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

Feb 26

Daily Brief Financials: ESR Group , Korea Stock Exchange KOSPI 200, Powerlong Real Estate Holdings, SDCL EDGE Acquisition Corp and more

By Smartkarma Daily Briefs | Daily Briefs, Financials

In today’s briefing:

ESR Group (1821 HK): Evaluating a Potential Privatisation
Details of Korea Value-Up Initiatives & Index, Announced This Morning
Morning Views Asia: Powerlong Commercial Management Holdings
Crafty Copper Collaboration

ESR Group (1821 HK): Evaluating a Potential Privatisation

On 21 February, Bloomberg reported that due to the steep share price declines, major ESR Group (1821 HK) shareholders are considering options for their stakes, including ESR’s privatisation.
The reports also noted buyer interest in ESR’s significant assets. Past share dealings suggest that Warburg Pincus and the co-founders are the likely consortium to lead a potential privatisation.
The offer probability is low as a scheme would likely require a HK$16.00 offer, posing a funding challenge. Nevertheless, the upside remains as ESR trades at an undemanding valuation.

Details of Korea Value-Up Initiatives & Index, Announced This Morning

By Sanghyun Park

The rollout of the Korea Value-Up Index has encountered a minor delay. Completion of the index is slated for 3Q, with ETFs scheduled for release in 4Q.
The government will encourage the National Pension Service to utilize it as a benchmark.
Dividend payout ratio, dividend yield, PER, and cash flow will be included as screening factors for this index, in addition to the already known factors of PBR and ROE.

Morning Views Asia: Powerlong Commercial Management Holdings

By Leonard Law, CFA

Powerlong Commercial Management Holdings

Crafty Copper Collaboration

By subSPAC

SPAC dealmaking surged in the last week with several new deals being announced, including an Italian copper company, a consumer electronics firm, and an oncology-focused business.
Also, a space exploration company saw its shares skyrocket after successfully landing its spacecraft on the moon, and a struggling truck maker sells part of its assets.
Read on to find out the latest about all things SPACs.

💡 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

Feb 26

Daily Brief Consumer: Walgreens Boots Alliance, Trip.com, Aritzia Inc, AdvisorShares Pure US Cannabis ETF, Luckin Coffee, Ping An Healthcare and Technol and more

By Smartkarma Daily Briefs | Consumer, Daily Briefs

In today’s briefing:

Walgreens Boots Alliance (WBA US) – How Do Dow Jones Deletes Do Historically?
Trip.com Q4 Quick Take: Strong Top-Line Growth | Impressive Expense Control | And Not Expensive
Aritzia (ATZ) – Sunday, Nov 26, 2023
MSOS – Going Higher!
Luckin Coffee (LKNCY US): Feeling Lucky in a Challenging Market
Ping An Healthcare and Technology (1833.HK) – Valuation Logic May Completely Change Due to New Path

Walgreens Boots Alliance (WBA US) – How Do Dow Jones Deletes Do Historically?

On 31 January, Walmart (WMT US) announced a 3:1 stock split. For cognoscenti, that meant a Dow Jones Industrial Avg might be in the offing.
The last change to the index was in Aug-2020, spurred by the 4:1 split for Apple (AAPL US). This time, the likely deletion candidate was Walgreens Boots Alliance (WBA US).
Indeed, last week, the Index Keepers announced Amazon.com Inc (AMZN US) would replace Walgreens Boots Alliance on 26 Feb (i.e. WBA would be booted on the close of 23 Feb).

Trip.com Q4 Quick Take: Strong Top-Line Growth | Impressive Expense Control | And Not Expensive

By Daniel Hellberg

Trip.com reported a strong set of Q4 and FY23 earnings results last week
Company has held the line on SG&A expenses; look for strong H124 growth
We believe shares are cheap and recommend investors buy below US$43/ADS

Aritzia (ATZ) – Sunday, Nov 26, 2023

Key points

Aritzia has potential for significant share price upside, with potential returns between 170% to 344% over a 3-year period
The author has previously exited the stock at $50 but is considering going long again due to the brand’s continued strength despite recent challenges
The analysis questions whether Aritzia’s targets for fiscal year 2027 are reasonable and raises concerns about the company’s potential for future growth

MSOS – Going Higher!

By Rikki Malik

A bombed-out sector down 80% from the peak is worth another look
Weaker companies have exited the industry or have already gone under
The sector ETF has a good risk reward with catalysts ahead

Luckin Coffee (LKNCY US): Feeling Lucky in a Challenging Market

By Osbert Tang, CFA

Luckin Coffee (LKNCY US) concluded FY23 with a 203.3% surge in non-GAAP net profit to Rmb3.2bn, benefiting from higher store count and monthly transacting customers.
Luckin plans to lift store count by at least 23%, with total to reach over 20,000 in FY24. Product innovation, promotional discount reduction, and better store efficiency are profit drivers.
Net cash reached Rmb3.8bn, or 7% of market cap. With a consensus EPS forecast of 28% CAGR in the next two years, its 15.1x and 11.7x PERs are not stretched.

Ping An Healthcare and Technology (1833.HK) – Valuation Logic May Completely Change Due to New Path

By Xinyao (Criss) Wang

Fang Weihao’s departure means PAGD’s strategic transformation failed. The business model of being a “vassal” of Ping An Group seems hard to bring high valuation due to “discounted” growth potential.
PAGD is at a crossroads. The question is which development path will the new CEO choose – Follow Fang Weihao’s strategy or return to the traditional Internet healthcare business model?
Both directions have painful costs that investors will not be happy with. Therefore, we recommend that investors remain sober and rational in the face of the bullish view on PAGD.

💡 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

Feb 25

Most Read: East Buy Holding , China Unicom Hong Kong, Amazon.com Inc, Jusung Engineering, Celltrion Inc, Taiwan Semiconductor (TSMC), Trip.com Group , Korea Stock Exchange KOSPI 200, Hygon Information Technology C, China International Capital Corporation and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

Hang Seng Internet & IT Index Rebalance: Three Changes & One Big Surprise
HSCEI Index Rebalance: Third Time Unlucky for Zhongsheng (881 HK) As China Unicom (762 HK) In
Dow Jones Industrials (INDU) Index Rebalance: Amazon (AMZN) Replaces Walgreen Boots (WBA)
FnGuide Semiconductor Top10 Index Rebalance Preview: One Change Likely; Close Among Potential Adds
FnGuide Top10 Equal Weight Index Rebalance Preview: Celltrion Could Replace Samsung SDI
TSMC (2330.TT; TSM.US): The Implications of Feb Sales, TSMC 2nd Japanese Fab and NVDA Stock Price.
Hong Kong/China Finally Bottoming?; Bullish Outlook Intact; DXY Rolling Over; Buys in Discretionary
EQD | Where to BUY the KOSPI On The Upcoming Pullback
Index Rebalance & ETF Flow Recap: HSCEI, HSCI, HSTECH, HSIII, STTF, Top50, Div+, FXI, FnGuide
A/H Premium Tracker (To 23 Feb 2024): Liquid AH Premia See Sharpest Fall in a LOONG (He-He) Time

Hang Seng Internet & IT Index Rebalance: Three Changes & One Big Surprise

There will be 3 changes for the Hang Seng Internet & Information Technology Index (HSIII) at the March rebalance. There are some surprises.
Estimated one-way turnover at the rebalance is 5.6% resulting in a round-trip trade of HK$3.26bn (US$416m). 6 stocks will have over 1x ADV to trade.
There is huge short interest on East Buy Holding (1797 HK) and there could be some short covering ahead of the inclusion of the stock in the index.

HSCEI Index Rebalance: Third Time Unlucky for Zhongsheng (881 HK) As China Unicom (762 HK) In

After narrowly avoiding deletion at the last two index reviews, Zhongsheng Group will be deleted from the HSCEI INDEX in March and replaced with China Unicom (762 HK).
Zhongsheng Group (881 HK) is down 25% for the year while China Unicom Hong Kong (762 HK) is up 10%.
There appears to be positioning on both stocks though the increase in shorts and jump in cumulative excess volume on Zhongsheng Group (881 HK) point to higher positioning.

Dow Jones Industrials (INDU) Index Rebalance: Amazon (AMZN) Replaces Walgreen Boots (WBA)

Amazon.com Inc (AMZN US) will replace Walgreens Boots Alliance (WBA US) in the Dow Jones Industrial Average (INDU INDEX) at the close on 23 February.
Passives will need to sell a lot of Walmart (WMT US) following the 3:1 stock split and buy a lot of Amazon.com Inc (AMZN US).
Given the ad hoc nature of the rebalances and the short timeline between announcement and implementation, the stocks could move over the rest of the week.

FnGuide Semiconductor Top10 Index Rebalance Preview: One Change Likely; Close Among Potential Adds

ISC Co Ltd (095340 KS) could replace Wonik Ips (240810 KS) in the FnGuide Semiconductor Top10 Index at the April rebalance.
Jusung Engineering (036930 KS) is ranked just behind ISC Co Ltd (095340 KS) and could be added to the index instead depending on relative price performance.
Shorts on ISC Co (095340 KS) have been stable over the last few months while there has been big covering on Wonik Ips (240810 KS) and Jusung Engineering (036930 KS).

FnGuide Top10 Equal Weight Index Rebalance Preview: Celltrion Could Replace Samsung SDI

The Samsung KODEX Fn Top10 Equal Weight ETF (395170 KS) tracks the FnGuide Top 10 Equal Weight Index and has an AUM of US$241m.
We expect Celltrion Inc (068270 KS) will replace Samsung SDI (006400 KS) in the index at the March rebalance.
There will be 0.26x ADV to buy in Celltrion Inc (068270 KS) while passives will need to sell 0.17x ADV of Samsung SDI (006400 KS).

TSMC (2330.TT; TSM.US): The Implications of Feb Sales, TSMC 2nd Japanese Fab and NVDA Stock Price.

By Patrick Liao

Usually, February is typically the month with the fewest working days of the year, and therefore, revenue is likely to be at its lowest as well.
We consider that the Taiwanese government may desire TSMC to build fabs in countries aligned with those who signed the “Wassenaar Arrangement.”
The price hike of NVIDIA Corp (NVDA US) by US$785.38 on February 22 in the US market could signal an important development in the AI sector.

Hong Kong/China Finally Bottoming?; Bullish Outlook Intact; DXY Rolling Over; Buys in Discretionary

By Joe Jasper

Since early November 2023 we have been expecting global equities (MSCI ACWI) to stage a year-end rally that would continue into the early part of 2024.
As we progress through the “early part” of 2024, more global indexes and Sectors are breaking out and starting to participate in the upside. This is classic bull market behavior.
Our outlook remains bullish; continue to ride this trend higher, and treat pullbacks as buying opportunities. Actionable Themes: Hong Kong/China, Consumer Discretionary, Industrials, Energy/Coal, and Polish Banks

EQD | Where to BUY the KOSPI On The Upcoming Pullback

By Nico Rosti

The KOSPI 200 INDEX has been rallying since January 2022, roughly up +22.5%, the rally can continue, but soon there could be a pullback, possibly this coming week.
If the index falls from its current highs, where are the best support levels to go LONG again?
The price area between 355 and 345 is where the index could find support and resume the uptrend.

Index Rebalance & ETF Flow Recap: HSCEI, HSCI, HSTECH, HSIII, STTF, Top50, Div+, FXI, FnGuide

The changes for the SSE STAR50 (STAR50 INDEX) and STAR100 Index were announced post market close on Friday.
The coming week is a full one with capping cutoffs, review cutoffs, announcements and implementations apart from futures expiries.
With China open after Lunar New Year, the National Team is back pouring money into ETFs with the largest inflows to the CSI 300, CSI 500, ChiNext and STAR50 indices.

A/H Premium Tracker (To 23 Feb 2024): Liquid AH Premia See Sharpest Fall in a LOONG (He-He) Time