Smartkarma Daily Briefs

There is no suggestion of precondition breach attached to Outsourcing Inc (2427 JP)‘s impairment losses.
Seven Group, now holding 71.6%, has returned to the well, and made a cash/scrip Offer for shares not owned in Boral (BLD AU), with certain tendering thresholds triggering more cash.
Itoki Corp (7972 JP)‘s mega ToSTNeT-3 buyback is now done.

When Will Deflationary Mindset of Managers Disappear? Some Companies Have Begun to Change, Though

By Aki Matsumoto

Overseas investors have increased buying Japanese stocks in anticipation of acceleration in profit growth due to the shift to inflation. This is consistent with the trends of ROE and TOPIX.
As far as ROE trends are concerned, neither share buybacks nor dividends are sufficient. It may be said that many managers are still dominated by a deflationary mindset.
Companies with high foreign shareholdings are seeing changes that are starting to use cash more effectively. However, it’ll take time, as most companies will start to move after asking around.

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Feb 25

Daily Brief Industrials: A2B Australia, Deere & Co, Outsourcing Inc, AerCap Holdings NV, Baimtec Material , Ingersoll Rand and more

By Smartkarma Daily Briefs | Daily Briefs, Industrials

In today’s briefing:

A2B Australia (A2B AU): Scheme Vote on 25 March
Deere & Co: Expansion In Precision Agriculture & 5 Other Factors Driving Growth In 2024! – Major Drivers
Last Week in Event SPACE: Outsourcing, Boral, Itoki, CIMC Vehicle, Dissentient Shareholder Rights
AerCap (AER US): Splendid 2023, More to Come in 2024
STAR50 Index Rebalance: Three Changes a Side; One Surprise Change
Ingersoll Rand: A Tale Of Expansion of Addressable Market through Strategic M&A Activity! – Major Drivers

A2B Australia (A2B AU): Scheme Vote on 25 March

The A2B Australia (A2B AU) IE considers Comfortdelgro Corp (CD SP)’s A$1.45 offer fair and reasonable as it above the midpoint of its A$1.30-1.54 per share valuation range.
The scheme is conditional on ACCC approval, which should be forthcoming as ComfortDelGro is not a significant player in Australia.
Several substantial shareholders have sold or exited, lowering the scheme vote risk. At the last close and for the 11 April payment, the gross/annualised spread was 2.5%/22.3%.

Deere & Co: Expansion In Precision Agriculture & 5 Other Factors Driving Growth In 2024! – Major Drivers

Deere & Company’s earnings revealed a company operating well in the midst of an increasingly competitive market landscape, with stable demand across the majority of sectors.
The firm noted solid execution across the cycle with an 18.5% margin for equipment operations in the first quarter.
Land sales fell by 4% to $12.658 billion while equipment operations also dropped 8% to $10.486 billion.

Last Week in Event SPACE: Outsourcing, Boral, Itoki, CIMC Vehicle, Dissentient Shareholder Rights

There is no suggestion of precondition breach attached to Outsourcing Inc (2427 JP)‘s impairment losses.
Seven Group, now holding 71.6%, has returned to the well, and made a cash/scrip Offer for shares not owned in Boral (BLD AU), with certain tendering thresholds triggering more cash.
Itoki Corp (7972 JP)‘s mega ToSTNeT-3 buyback is now done.

AerCap (AER US): Splendid 2023, More to Come in 2024

By Mohshin Aziz

AerCap Holdings NV (AER US) (AerCap) 2023 result was excellent; record core profit of USD2.4b, 27% ROE, and share buyback of USD2.6b of shares (~18% shares in issue)
Management guided continued growth in 2024 and announced a further USD500m share buyback (~3% shares in issue). We think it can easily beat this lowball target
Poised for growth; aircraft lease rates and asset values are rising. Maintain BUY with higher TP of USD90.6 (+16% UPSIDE) pegged to FY24 P/BV of 0.94x (1SD above LT average)

STAR50 Index Rebalance: Three Changes a Side; One Surprise Change

There are three constituent changes for the SSE STAR50 (STAR50 INDEX) at the March rebalance. One inclusion and one non-inclusion are surprises.
One way turnover is estimated at 2.9% and will result in a one-way trade of CNY 4,075m with over 2.5x ADV to trade on all constituent changes.
The adds have outperformed the deletes over the last few months with a jump in the last few trading sessions. There could be more outperformance over the next two weeks.

Ingersoll Rand: A Tale Of Expansion of Addressable Market through Strategic M&A Activity! – Major Drivers

Ingersoll Rand reports strong performance for Q4 2023, marking another record-breaking year despite continued challenges within a fluctuating macroeconomic environment.
This performance reinforces the importance of Ingersoll Rand’s employee ownership mindset, which is being credited for the successful results.
In 2023, Ingersoll Rand delivered double-digit growth across revenue, adjusted EBITDA, adjusted EPS and free cash flow.

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Feb 25

Daily Brief Energy/Materials: Hyosung Corporation, Azure Minerals, Cf Industries Holdings, Martin Marietta Materials, Williams Cos, Albemarle Corp, Reliance Steel & Aluminum and more

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

In today’s briefing:

Hyosung Corp Split: Potential Mirror of December 2021 LX-LG Block Deal
Weekly Deals Digest (25 Feb) – Azure, A2B, Boral, CSR, China TCM, Outsourcing, Payroll, Snow Peak
CF Industries: Export Opportunities and Global Market Dynamics – Major Drivers
Martin Marietta Materials: Expected Improvements In Housing Market Conditions Could Help Them Recover In 2024 & Beyond! – Major Drivers
The Williams Companies Inc.: 6 Major Growth Drivers For Their Performance In 2024 & Beyond! – Major Drivers
Albemarle Corporation: Is The EV Demand Actually Flattening & Impacting Their Performance? – Major Drivers
Reliance Steel & Aluminum: A Tale Of Expansion Through Strategic Acquisitions! – Major Drivers

Hyosung Corp Split: Potential Mirror of December 2021 LX-LG Block Deal

By Sanghyun Park

Hyosung Corp’s split diverges from usual Korean market splits. No tender offer is expected post-new holding company formation, reducing value accretion opportunities.
Sibling separation in Hyosung Corp’s split mandates shares cross-transfers. Hence, block deals among siblings are plausible.
This scenario resembles the case in December 2021 when LX Koo Bon-joon disposed of LG Corp shares through a block deal instead of a swap, causing an 8% drop.

Weekly Deals Digest (25 Feb) – Azure, A2B, Boral, CSR, China TCM, Outsourcing, Payroll, Snow Peak

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: Toei Animation (4816 JP)‘s US$550 Million secondary offering and Trial Holdings (5882 JP) IPO.
Event-Driven developments: Azure Minerals (AZS AU), Boral Ltd (BLD AU), CSR Ltd (CSR AU), China Traditional Chinese Medicine (570 HK), Outsourcing Inc (2427 JP), Snow Peak Inc (7816 JP).

CF Industries: Export Opportunities and Global Market Dynamics – Major Drivers

CF Industries Holdings Inc., a global leader in nitrogen-based fertilizers, reported a strong performance for the full year and fourth quarter of 2023.
The company posted an adjusted EBITDA and net cash from operations of approximately $2.8 billion each, and a free cash flow of $1.8 billion.
This robust outcome was attributed to a balanced nitrogen supply-demand situation and energy spreads favoring the company’s low-cost production in North America..

Martin Marietta Materials: Expected Improvements In Housing Market Conditions Could Help Them Recover In 2024 & Beyond! – Major Drivers

Martin Marietta, a provider of aggregates and heavy building materials, presented a decent financial performance for the full year and fourth quarter of 2023.
Positive elements in the report include the company’s record financial performance, reaching a milestone of $2.1 billion in adjusted EBITDA. Additionally, the company noted that it had a successful, safe year without any major incidents.
This was also underpinned by the strong performance of the company’s aggregates business which drove revenues up by over 10% to $4.3 billion.

The Williams Companies Inc.: 6 Major Growth Drivers For Their Performance In 2024 & Beyond! – Major Drivers

The Williams Companies has reported strong performance in the third quarter of 2023 with significant advances in operational execution, project completion, and positive expansion achievements.
In an environment of low gas prices compared to the third quarter of 2022, the company saw an impressive uptick in several areas.
The first half of Transco’s Regional Energy Access project, which will increase natural gas transportation from the northeast part of the Marcellus Shale to markets in Pennsylvania, New Jersey, and Maryland, has been completed, and the second half is slated for completion in the last quarter of 2024.

Albemarle Corporation: Is The EV Demand Actually Flattening & Impacting Their Performance? – Major Drivers

Albemarle Corporation’s 2023 earnings reported net sales of $9.6 billion, a 31% rise compared to 2022 with volume growth contributing 21% to the increase.
The energy storage sector delivered 35% volumetric growth.
The corporation’s adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) for 2023 were $2.8 billion or $3.4 billion, excluding a lower-cost charge recorded in Q4.

Reliance Steel & Aluminum: A Tale Of Expansion Through Strategic Acquisitions! – Major Drivers

Reliance, Inc.
released its Fourth Quarter and Full Year 2023 financial results with officials highlighting the firm’s strong operational and financial performance for 2023 despite a challenging environment.
The company’s President and CEO, Karla Lewis, notably acknowledged the company’s recent name change from its original name which had included the words ‘steel’ and ‘aluminum.’ Lewis noted that the name change reflected the evolution of the company beyond metal in the form of being a family of diversified businesses.

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Feb 25

Daily Brief Consumer: Li Auto , Kweichow Moutai, Youngone Holdings, Hasbro Inc, DoorDash , Genuine Parts Co, TSE Tokyo Price Index TOPIX and more

By Smartkarma Daily Briefs | Consumer, Daily Briefs

In today’s briefing:

HK Connect SOUTHBOUND Flows (To 23 Feb 2024); Selling of Consumer Stocks, But Big Buys of SOEs
Mainland Connect NORTHBOUND Flows (To 23 Feb 2024): Foreigners Buy, Natl Team Buys; Retail Sells
Asian Dividend Gems: Youngone Holdings
Hasbro Inc: Increased Utility of Tabletop & Expansion Into Video Games Space & 5 Other Major Drivers! – Financial Forecasts
DoorDash Inc: What Is Their Master Plan to Dominate Global Markets? – Major Drivers
Genuine Parts Company: Why Are They Carrying Out The Expansion and Scaling of Company-owned Stores? – Major Drivers
When Will Deflationary Mindset of Managers Disappear? Some Companies Have Begun to Change, Though

HK Connect SOUTHBOUND Flows (To 23 Feb 2024); Selling of Consumer Stocks, But Big Buys of SOEs

A great week for HK and Chinese shares, especially the larger caps. Mainland indices were up 8 days in a row to Friday, helping HK shares stay bid.
Net SOUTHBOUND buying was HK$20.0bn in the first post-holiday week. LOTS of SOEs on the net buying side.
Remarkable this past week, was a new tendency to net sell names which were up a lot and net buy names which haven’t performed as well.

Mainland Connect NORTHBOUND Flows (To 23 Feb 2024): Foreigners Buy, Natl Team Buys; Retail Sells

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 BUY RMB 10.7bn of A-shares on strong average activity after RMB +16.1bn, +9.9bn and +12.1bn the three weeks before. More National Team buying this week.
Five of the top ten buys among liquid NORTHBOUND stocks were finance. Again. Info Tech saw net selling. Again. People trading long gamma now instead of short gamma.

Asian Dividend Gems: Youngone Holdings

By Douglas Kim

Youngone Holdings is an attractive deep value stock. Net cash (including short term investments) was 1.1 trillion won at the end of 3Q 2023 (79% of market cap).
Youngone Holdings is the holding company of Youngone Group. Youngone Corp is best known for its OEM apparel business for major branded companies such as The North Face and Patagonia.
We found Youngone Holdings using Smartkarma’s Smart Score Screener system.

Hasbro Inc: Increased Utility of Tabletop & Expansion Into Video Games Space & 5 Other Major Drivers! – Financial Forecasts

Hasbro Inc.
concluded its fourth quarter and 2023 full-year earnings report with a focus on the positive effects of the company’s refocusing strategy and a cautious outlook for 2024.
Chris Cocks, the CEO, outlined the recent strategies of Hasbro, which centered on their philosophy of fewer, bigger, better, leading to a reduction in SKUs and an emphasis on high-impact products.

DoorDash Inc: What Is Their Master Plan to Dominate Global Markets? – Major Drivers

DoorDash reported its Q4 2023 earnings, with the company’s representatives including co-founder, chair, and CEO, Tony Xu, and CFO Ravi Inukonda, discussing its investment strategies, outlook and financial performance.
Notably, in international markets and new verticals, DoorDash is seeking to find product-market fit and grow efficiently.
The company sees significant potential due to lower penetration levels, with investments destined towards improving product market fit, expanding its restaurant and retailer base, and launching subscription programs.

Genuine Parts Company: Why Are They Carrying Out The Expansion and Scaling of Company-owned Stores? – Major Drivers

Genuine Parts Company’s (GPC) latest Q4 2023 earnings reveal the company had a strong performance throughout the year, achieving a strong and solid fiscal year.
GPC’s total sales in 2023 exceeded $23 billion, a nearly $1 billion increase from the previous year, aligning with the company’s expectations.
Total company segment profit margins also improved by 50 basis points to nearly double digits, marking the third consecutive year of double-digit earnings growth for GPC. On top of this, the company returned $788 million to shareholders and reported a 68th consecutive annual increase in dividends.

When Will Deflationary Mindset of Managers Disappear? Some Companies Have Begun to Change, Though

By Aki Matsumoto

Overseas investors have increased buying Japanese stocks in anticipation of acceleration in profit growth due to the shift to inflation. This is consistent with the trends of ROE and TOPIX.
As far as ROE trends are concerned, neither share buybacks nor dividends are sufficient. It may be said that many managers are still dominated by a deflationary mindset.
Companies with high foreign shareholdings are seeing changes that are starting to use cash more effectively. However, it’ll take time, as most companies will start to move after asking around.

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Feb 25

Daily Brief Industrials: A2B Australia, Deere & Co, Outsourcing Inc, AerCap Holdings NV, Baimtec Material , Ingersoll Rand and more

By Smartkarma Daily Briefs | Daily Briefs, Industrials

In today’s briefing:

A2B Australia (A2B AU): Scheme Vote on 25 March
Deere & Co: Expansion In Precision Agriculture & 5 Other Factors Driving Growth In 2024! – Major Drivers
Last Week in Event SPACE: Outsourcing, Boral, Itoki, CIMC Vehicle, Dissentient Shareholder Rights
AerCap (AER US): Splendid 2023, More to Come in 2024
STAR50 Index Rebalance: Three Changes a Side; One Surprise Change
Ingersoll Rand: A Tale Of Expansion of Addressable Market through Strategic M&A Activity! – Major Drivers

A2B Australia (A2B AU): Scheme Vote on 25 March

The A2B Australia (A2B AU) IE considers Comfortdelgro Corp (CD SP)’s A$1.45 offer fair and reasonable as it above the midpoint of its A$1.30-1.54 per share valuation range.
The scheme is conditional on ACCC approval, which should be forthcoming as ComfortDelGro is not a significant player in Australia.
Several substantial shareholders have sold or exited, lowering the scheme vote risk. At the last close and for the 11 April payment, the gross/annualised spread was 2.5%/22.3%.

Deere & Co: Expansion In Precision Agriculture & 5 Other Factors Driving Growth In 2024! – Major Drivers

Deere & Company’s earnings revealed a company operating well in the midst of an increasingly competitive market landscape, with stable demand across the majority of sectors.
The firm noted solid execution across the cycle with an 18.5% margin for equipment operations in the first quarter.
Land sales fell by 4% to $12.658 billion while equipment operations also dropped 8% to $10.486 billion.

Last Week in Event SPACE: Outsourcing, Boral, Itoki, CIMC Vehicle, Dissentient Shareholder Rights

There is no suggestion of precondition breach attached to Outsourcing Inc (2427 JP)‘s impairment losses.
Seven Group, now holding 71.6%, has returned to the well, and made a cash/scrip Offer for shares not owned in Boral (BLD AU), with certain tendering thresholds triggering more cash.
Itoki Corp (7972 JP)‘s mega ToSTNeT-3 buyback is now done.

AerCap (AER US): Splendid 2023, More to Come in 2024

By Mohshin Aziz

AerCap Holdings NV (AER US) (AerCap) 2023 result was excellent; record core profit of USD2.4b, 27% ROE, and share buyback of USD2.6b of shares (~18% shares in issue)
Management guided continued growth in 2024 and announced a further USD500m share buyback (~3% shares in issue). We think it can easily beat this lowball target
Poised for growth; aircraft lease rates and asset values are rising. Maintain BUY with higher TP of USD90.6 (+16% UPSIDE) pegged to FY24 P/BV of 0.94x (1SD above LT average)

STAR50 Index Rebalance: Three Changes a Side; One Surprise Change

There are three constituent changes for the SSE STAR50 (STAR50 INDEX) at the March rebalance. One inclusion and one non-inclusion are surprises.
One way turnover is estimated at 2.9% and will result in a one-way trade of CNY 4,075m with over 2.5x ADV to trade on all constituent changes.
The adds have outperformed the deletes over the last few months with a jump in the last few trading sessions. There could be more outperformance over the next two weeks.

Ingersoll Rand: A Tale Of Expansion of Addressable Market through Strategic M&A Activity! – Major Drivers

Ingersoll Rand reports strong performance for Q4 2023, marking another record-breaking year despite continued challenges within a fluctuating macroeconomic environment.
This performance reinforces the importance of Ingersoll Rand’s employee ownership mindset, which is being credited for the successful results.
In 2023, Ingersoll Rand delivered double-digit growth across revenue, adjusted EBITDA, adjusted EPS and free cash flow.

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Feb 25

Daily Brief TMT/Internet: Intel Corp, Hygon Information Technology C, Twilio , Hubspot Inc, Applied Materials, Trade Desk /, Tyler Technologies, Zebra Technologies Corp, AppLovin , Fleetcor Technologies and more

By Smartkarma Daily Briefs | Daily Briefs, TMT/Internet

In today’s briefing:

Intel Snags Altman To Close Foundry Day Event
Index Rebalance & ETF Flow Recap: HSCEI, HSCI, HSTECH, HSIII, STTF, Top50, Div+, FXI, FnGuide
Twilio Inc: Growth Opportunities through Partnerships and Omnichannel Authentication Catalyzing Growth? – Major Drivers
HubSpot Inc: Are They Successfully Implementing AI In Their Operations? – Major Drivers
Applied Materials Inc (AMAT): Is The Escalation In Services Growth A Major Growth Catalyst In 2024? – Major Drivers
The Trade Desk Inc: Their Increasing Readiness for Identity Pivots A Potential Game Changer? – Major Drivers
Tyler Technologies: Growing Cloud Transactions & 5 Key Growth Catalysts! – Financial Forecasts
Zebra Technologies: Embedding Value Through Customized Solutions! – Major Drivers
AppLovin Corporation: Is The Robust Performance Of APP’s Software Platform Expected To Continue To Grow Revenues? – Major Drivers
FLEETCOR Technologies: A Story Of Improved Client Retention & Service Adoption! – Major Drivers

Intel Snags Altman To Close Foundry Day Event

By William Keating

Despite the high-profile announcement of his attendance, his segment was less than 3 minutes long!
Intel’s CEO alluded to a partnership with OpenAI and implied there’s more to come yet there’s been no public announcement of any such partnership.
Microsoft’s commitment to use Intel’s 18A is a vote of confidence in their foundry offering. Let’s see how it plays out.

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.

Twilio Inc: Growth Opportunities through Partnerships and Omnichannel Authentication Catalyzing Growth? – Major Drivers

Twilio’s recent quarterly results highlighted that the company exceeded its revenue and Non-GAAP income from operations targets for Q4 2023 by generating nearly $1.1 billion in revenue and $173 million in Non-GAAP income from operations.
The free cash flow was $211 million.
The company achieved $4.2 billion in revenue for the full year and improved its Non-GAAP operating results from a Non-GAAP operating loss of $4 million in 2022 to Non-GAAP operating income of $533 million in 2023.

HubSpot Inc: Are They Successfully Implementing AI In Their Operations? – Major Drivers

HubSpot, a leading software company, provided a generally positive update on the firm’s financial performance, strategic direction, and plans for future growth.
On the financial front, the firm reported solid results for Q4 2023.
Revenue grew by 21% year-on-year in constant currency terms, and by 25% for the full year 2023.

Applied Materials Inc (AMAT): Is The Escalation In Services Growth A Major Growth Catalyst In 2024? – Major Drivers

Applied Materials delivered a decent result and the management claims to have made a strong start to the current fiscal year, exceeding its earnings projections.
Strengths identified include the company’s innovation strategy and position at key industry inflections, such as new-foundry logic and developments in its DRAM market where it has captured over 50% of market share.
Revenue from its advanced packaging product portfolio is predicted to reach nearly $1.5 billion in 2024.

The Trade Desk Inc: Their Increasing Readiness for Identity Pivots A Potential Game Changer? – Major Drivers

The Trade Desk had a robust finish to the year 2023 with a record total spend on their platform reaching almost $10 billion and revenue for the fourth quarter crossing the $600 million mark for the first time.
This growth has significantly outpaced the digital advertising market with a year-on-year growth of 23%.
The company also reported an adjusted EBITDA of over $770 million in 2023 and free cash flow upwards of $543 million.

Tyler Technologies: Growing Cloud Transactions & 5 Key Growth Catalysts! – Financial Forecasts

Tyler Technologies reported promising Q4 results reflecting a robust end to 2023 and signaling a pivotal year in its cloud transition.
The company achieved all major objectives for the year with earnings and cash flow surpassing expectations.
Recurring revenues reportedly grew by 8% and accounted for 84% of the total revenues.

Zebra Technologies: Embedding Value Through Customized Solutions! – Major Drivers

Zebra Technologies has reported its latest quarterly and year-end financial results for 2023 that were significantly impacted by broad-based softness across end markets and regions.
The company realized sales of $1 billion demonstrating a 33% decline from the prior year, and adjusted EBITDA margin of 15.4%; a decrease of 7 points, and non-GAAP diluted earnings per share of $1.71, a 64% decrease from the prior year.
All product categories experienced declines, however, services and software remained a bright spot in the quarter from a revenue perspective.

AppLovin Corporation: Is The Robust Performance Of APP’s Software Platform Expected To Continue To Grow Revenues? – Major Drivers

AppLovin closed the fiscal year ended December 31, 2023 on a high note after surpassing the upper end of its forecast and demonstrating a pattern of exceptional performance throughout the year.
Despite a challenging 2022 characterized by stagnant growth, the company reported a 76% increase in revenue from its software platform in 2023, testament to the potential of its AI advertising engine, AXON. While the performance shows the company’s financial strength, uncertainties prevail woven within the statements of forward-looking nature minus respective obligations of updating these unless required by law.
Baptista Research looks to evaluate the different factors that could influence the company’s price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology.

FLEETCOR Technologies: A Story Of Improved Client Retention & Service Adoption! – Major Drivers

FLEETCOR Technologies Inc.
has reported mixed results for Q4 and full year 2023.
Revenue for Q4 reached $937 million, registering a 6% upsurge; while cash EPS recorded a rise of 10% at $4.44, and EBITDA was approximately $500 million, 11% higher than the previous period.

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Feb 25

Daily Brief Health Care: China Traditional Chinese Medicine, Alnylam Pharmaceuticals, Sichuan Kelun-Biotech Biopharm, Avantor and more

By Smartkarma Daily Briefs | Daily Briefs, Healthcare

In today’s briefing:

(Mostly) Asia-Pac Weekly Risk Arb Wrap: Boral, CSR, Ansarada, TCM, Snow Peak, Azure Min, Genetron
Alnylam Pharmaceuticals: Progress of the HELIOS-B Study & 4 Other Major Drivers
China Healthcare Weekly (Feb.23)- TCM Ushers in a Harvest Period, Biotech Bottom-Line, Kelun-Biotech
Avantor Inc: Is The Growth in the Aerospace and Defense Market Changing The Game? – Major Drivers

(Mostly) Asia-Pac Weekly Risk Arb Wrap: Boral, CSR, Ansarada, TCM, Snow Peak, Azure Min, Genetron

I tally 53 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal.
Five new deals discussed this week on Smartkarma! Boral Ltd (BLD AU), CSR Ltd (CSR AU), Ansarada Group Ltd (AND AU),TCM (570 HK), and Snow Peak Inc (7816 JP).
Key updates took place on Azure Minerals (AZS AU), CIMC Vehicle Group Co Ltd (1839 HK), Outsourcing Inc (2427 JP), and Genetron Holdings Ltd (GTH US).

Alnylam Pharmaceuticals: Progress of the HELIOS-B Study & 4 Other Major Drivers

Alnylam Pharmaceuticals reported solid progress across all business areas in 2023, delivering robust product growth for its four wholly-owned commercial medicines, and reaching a milestone of over 5,000 patients now on an Alnylam commercial RNAi therapeutic.
The company recorded $1.24 billion in global net product revenues.
Alnylam also extended its leadership in RNAi therapeutics, including pioneering delivery of RNAi therapeutics to adipose and muscle tissues.

China Healthcare Weekly (Feb.23)- TCM Ushers in a Harvest Period, Biotech Bottom-Line, Kelun-Biotech

By Xinyao (Criss) Wang

Thanks to the continuous support of policies, the TCM industry has ushered in a harvest period. So, TCM remains to be a relatively certain field for investment in China healthcare.
Biotech companies must meet several conditions in order to have good long-term development, such as sufficient financial support, at least one blockbuster product and high moral standard of the management.
Reasonable valuation of Sichuan Kelun-Biotech Biopharm (6990 HK) is about RMB15 billion. So, we think it is now overvalued. Meanwhile, restricted shares will be lifted 12 months after the IPO.

Avantor Inc: Is The Growth in the Aerospace and Defense Market Changing The Game? – Major Drivers

Avantor delivered fourth quarter business results at the high end of their guidance across key financial metrics, including a core organic revenue decline of 4.8%, adjusted EBITDA margin of 17.5% and adjusted EPS of $0.25.
They demonstrated robust cash flow management and considerable debt reduction, exceeding their guidance range.
The company experienced industry wide headwinds due to inventory destocking and cautious customer spending.

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Feb 25

Daily Brief Financials: China International Capital Corporation, Coinbase Global and more

By Smartkarma Daily Briefs | Daily Briefs, Financials

In today’s briefing:

A/H Premium Tracker (To 23 Feb 2024): Liquid AH Premia See Sharpest Fall in a LOONG (He-He) Time
Coinbase Global: Paradox of Its Market Dominance and Regulatory Hurdles! – Major Drivers

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

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 and NORTHBOUND flows net positive. AH premia on average fell so Hs OUTperformed As by 2.1%. Liquid Hs saw their H outperform the A by 3.1% on average.
Last week was the sharpest one-week fall in AH premium in a very long time. SOUTHBOUND Flows Monitor here. NORTHBOUND Flows Monitor here.

Coinbase Global: Paradox of Its Market Dominance and Regulatory Hurdles! – Major Drivers

This is our first report on Coinbase Global Inc, a leading cryptocurrency exchange company.
In the recent earnings, the management reported cost cuts of 45% year-over-year which led to positive net income of $95 million for the year, alongside total revenue of $3.1 billion and $964 million in positive adjusted EBITDA. According to the CEO, Brian Armstrong, the company’s success has been based on long-term thinking, regulatory compliance, and operational efficiency, despite the challenging crypto market environment.
Baptista Research looks to evaluate the different factors that could influence the company’s price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology.

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Feb 24

Most Read: China Traditional Chinese Medicine, Amazon.com Inc, Gree Inc, Jusung Engineering, Samsung C&T, Celltrion Inc, Fast Retailing, Reddit , Alteogen Inc and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

TCM (570 HK): Sinopharm’s $4.60/Share Offer
Dow Jones Industrials (INDU) Index Rebalance: Amazon (AMZN) Replaces Walgreen Boots (WBA)
Gree (3632 JP) – Overnight Offering in Asset-Rich Value Trap as KDDI Sells Out
China Traditional Chinese Medicine (570 HK): Sinopharm-Led Pre-Conditional Offer at HK$4.60
FnGuide Semiconductor Top10 Index Rebalance Preview: One Change Likely; Close Among Potential Adds
The Launch of 1st Corporate Value Up ETF on 27 February – Focus on Low PBR and Cash Flow
FnGuide Top10 Equal Weight Index Rebalance Preview: Celltrion Could Replace Samsung SDI
HK CEO & Director Dealings (23 Feb 2024): Fast Retailing, Far East Consortium, Pharmaron Beijing
Reddit IPO Preview
Alteogen (196170 KS): Modified License Agreement For Major Platform Technology Is A Hard Catalyst

TCM (570 HK): Sinopharm’s $4.60/Share Offer

$4.60/Share. That’s the number – by way of a Scheme – that only matters. Below the recently rumoured $6/share, and $5.10/share a little over three years ago. Terms are final.
As widely expected, the Offeror is SASAC-managed China National Pharmaceutical Group Corporation (CNPGC), indirectly owning 32.46% in China Traditional Chinese Medicine (570 HK) (TCM) via Sinopharm Group Hongkong,
Optically, the Offer price appears light. But this should still get up. TCM is trading rich to peers. No other competing bidder will emerge. Expect regulatory pre-cons to be fast-tracked.

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.

Gree (3632 JP) – Overnight Offering in Asset-Rich Value Trap as KDDI Sells Out

Today after the close, KDDI Corp (9433 JP) and Gree Inc (3632 JP) announced that KDDI would offer its 8,000,000 shares in Gree in an international offering through Mizuho Intl.
The deal comes at a decently large discount and the stock is quite downtrodden. Especially when compared to its venture assets and cash, assuming invested amount is remotely viable.
The problem is that too much of revenue isn’t earning much, so this sits in a Value Trap category. Shareholder structure makes it difficult to do buybacks.

China Traditional Chinese Medicine (570 HK): Sinopharm-Led Pre-Conditional Offer at HK$4.60

China Traditional Chinese Medicine (570 HK) announced a privatisation offer from the Sinopharm-led consortium at HK$4.60 per share, a 47.4% premium to the undisturbed price.
The pre-condition relates to various Chinese regulatory approvals. As SOE entities own the offeror, regulatory approvals will be a formality. The offer price is final.
Ping An Insurance (H) (2318 HK), which holds a blocking stake, will be supportive. The offer is fair when the previously (higher) rumoured offers are adjusted for the market downturn.

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).

The Launch of 1st Corporate Value Up ETF on 27 February – Focus on Low PBR and Cash Flow

By Douglas Kim

Samsung Asset Management announced today that it will be launching the first Corporate Value Up ETF on 27 February. It will focus on low PBR and positive cash flow generators.
This ETF which will be called KoAct Dividend Growth Active ETF. There are about 45 stocks that are expected to be included in this ETF.
Among the 92 companies in KOSPI 200 that are trading at less than 1x PBR, those that generate positive free cash flow are outperforming significantly.

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).

HK CEO & Director Dealings (23 Feb 2024): Fast Retailing, Far East Consortium, Pharmaron Beijing