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Smartkarma Daily Briefs

Feb 23
0

Daily Brief Consumer: Trip.com, Trip.com Group , Fast Retailing, Trial Holdings, Adeia, Airbnb , Marriott International, Miniso, Xiaocaiyuan International Holding, Coca Cola Co and more

By | Consumer, Daily Briefs

In today’s briefing:

  • Trip.com (9961 HK, TCOM US): 4Q23, Revenue Up by 105%, But Reached Our Last Price Target
  • Trip.com (9961 HK): Looks to Reap More Recovery Benefits
  • HK CEO & Director Dealings (23 Feb 2024): Fast Retailing, Far East Consortium, Pharmaron Beijing
  • Trial Holdings IPO: The Investment Case
  • ADEA: Adding More Licensees
  • Airbnb Inc: Increased Supply & Better Conversion Rates Can Lead To A Solid 2024? – Major Drivers
  • Marriott International: Increased Demand from Corporates and Leisure Customers Changing The Game? – Major Drivers
  • [Miniso Group (MNSO US, BUY, TP US$33) Company Update]: CNY Foot Traffic Growth Support Decent C1Q24
  • Xiaocaiyuan International Holding Pre-IPO – Strong Network Expansion and Same Store Sales Growth
  • The Coca-Cola Company: What Is The Impact Of Changing North American Market Dynamics? – Major Drivers

Trip.com (9961 HK, TCOM US): 4Q23, Revenue Up by 105%, But Reached Our Last Price Target

By Ming Lu

  • The main businesses, hotel and air ticket bookings increased by 131% YoY and 86% YoY in 4Q23.
  • The Chinese traveling market continued its recovery after the lift of the lockdown at the end of 2022.
  • The stock price is close to our last price target – Downgrade to Hold.

Trip.com (9961 HK): Looks to Reap More Recovery Benefits

By Osbert Tang, CFA

  • Trip.com Group (9961 HK) has a remarkable 4Q23 with adjusted net profit surged 437.1% YoY. Higher volume and better market efficiency have resulted in massive margin expansion.
  • Net cash has ballooned to about 15% of its share price, and this has allowed it to carry out a massive US$300m Capital Return Program in 2024.
  • Business has outperformed the industry in CNY, with domestic hotel and air business volume increased by 60% and 50% YoY. Its overseas platform also saw double-digit growth.

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

By David Blennerhassett

Trial Holdings IPO: The Investment Case

By Arun George

  • Trial Holdings (5882 JP), a discount store operator in Japan, is seeking to raise US$235 million at the IPO reference price of JPY1,550 per share. Pricing on 11 March.
  • Trial aims to act as a one-stop shopping store where consumers can buy whatever they want at a great price. Trial’s basic pricing strategy is Every Day Low Price.
  • The investment case rests on steady revenue growth, industry-leading same-store sales growth, solid margin profile and cash generation.

ADEA: Adding More Licensees

By Hamed Khorsand

  • ADEA reported fourth quarter results showcasing debt reduction through free cash flow generation. ADEA had eight license signings of which two were brand new licensees
  • Reported fourth quarter results showcasing debt reduction through free cash flow generation. ADEA had eight license signings of which two were brand new licensees
  • ADEA has started to invest more in R&D, which resulted in ADEA ending 2023 with nearly 11,000 patents compared to approximately 10,000 in the year prior

Airbnb Inc: Increased Supply & Better Conversion Rates Can Lead To A Solid 2024? – Major Drivers

By Baptista Research

  • Airbnb’s Fourth Quarter earnings for 2023 revealed significant financial growth, with 99 million Nights and Experiences booked in Q4, marking Airbnb’s highest ever fourth-quarter results.
  • Revenue increased by 70% year on year to reach $2.2 billion.
  • However, the net loss for the company stood at $249 million.

Marriott International: Increased Demand from Corporates and Leisure Customers Changing The Game? – Major Drivers

By Baptista Research

  • Marriott International delivered strong results in 2023 due to robust demand for travel and an increasing portfolio of over 30 leading brands.
  • The global room revenue per available room (RevPAR) grew nearly 15%, and net rooms increased 4.7%, driving profitable growth in earnings and cash flows.
  • For the fourth quarter, global RevPAR rose over 7% year-on-year, propelled by roughly equal growth in average daily rate (ADR) and occupancy levels.

[Miniso Group (MNSO US, BUY, TP US$33) Company Update]: CNY Foot Traffic Growth Support Decent C1Q24

By Eric Wen

  • Intra-Urban mobility in major cities and foot traffic in leading shopping malls in China have demonstrated decent growth during 2024 CNY holiday period.
  • We estimate Miniso domestic store sales increased 35% yoy during CNY-holiday and 11% yoy during Jan to mid-Feb 2024. We expect Miniso total revenue to increase 26% yoy in 1Q24.
  • We maintain the stock as BUY and maintain TP at US$33/ADS.

Xiaocaiyuan International Holding Pre-IPO – Strong Network Expansion and Same Store Sales Growth

By Ethan Aw

  • Xiaocaiyuan International Holding (XCY HK) is looking to raise up to US$200m in its upcoming HK IPO.
  • Xiaocaiyuan is a Chinese home-style cuisine restaurant operator. It prices its menus’ items to achieve average spending per consumer between RMB50 and RMB70 for its dine-in customers at its restaurants. 
  • In this note, we talk about the company’s historical performance.

The Coca-Cola Company: What Is The Impact Of Changing North American Market Dynamics? – Major Drivers

By Baptista Research

  • Coca-Cola provided overall positive results despite the ongoing global challenges they faced.
  • James Quincey, Chairman and CEO, specifically highlighted their “all-weather strategy,” which allowed them to attain 8% comparable earnings per share growth, despite notable headwinds from a 7% currency impact.
  • He attributed the year’s success to the company’s strategy and improved capabilities, making Coca-Cola a more agile and efficient global organization.

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Feb 22
0

Most Read: Gree Inc, China Traditional Chinese Medicine, Korea Stock Exchange Kospi Index, Azure Minerals, Itoki Corp, Union Bank Of India, Hanwha Corporation and more

By | Daily Briefs, Most Read

In today’s briefing:

  • Gree (3632 JP) – Overnight Offering in Asset-Rich Value Trap as KDDI Sells Out
  • China Traditional Chinese Medicine (570.HK) – New Information on Privatization
  • Korea NPS Abruptly Joins Corporate Value Up Program: According to Document Obtained from NPS
  • Azure Minerals (AZS AU): MinRes Selling Out Paves the Way for the Scheme
  • Itoki (7972 JP) – Worth Thinking About Post Mega ToSTNeT-3 Buyback
  • Azure (AZS AU): MinRes’ Discounted Exit
  • Union Bank of India (UNBK IN) Placement: Using Index Inclusion Well
  • NPS Plans to Select Three Asset Management Companies For “Corporate Value Up” Program
  • China Traditional Chinese Medicine (570 HK): Sinopharm-Led Pre-Conditional Offer at HK$4.60
  • TCM (570 HK): Sinopharm’s $4.60/Share Offer

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

By Travis Lundy

  • 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) – New Information on Privatization

By Xinyao (Criss) Wang

  • Since China TCM doesn’t deny the rumors so far after the trading halt, privatization is becoming likely this time.Rumor said formal negotiations may not begin until after the Lantern Festival.
  • CNPGC may not want to pay high prices on privatization.Weak sentiment/share price may help with the negotiations.But the key is to obtain the consent of other shareholders, especially Ping An.
  • There’s underlying logic for Taiji Group to drive this privatization. A price of higher than HKD5.1 is possible. If the price could reach HKD6 (or higher), it has exceeded expectations.

Korea NPS Abruptly Joins Corporate Value Up Program: According to Document Obtained from NPS

By Sanghyun Park

  • NPS abruptly joins ‘Corporate Value Up Program’, plans to select three asset managers. Deadline: this month’s 29th; results: March 19th, possibly linked to Korea Premium Index ETF launch in mid-May.
  • The document outlines guidelines, allocating 90-100% to value stocks, with KOSDAQ under 20%. While benchmarked to the internally-built index, it will likely focus on Korea Premium Index and KOSDAQ Global.
  • The fund size is crucial. NPS will disclose details later. But still, there is considerable room to this year’s ceiling for local equity; a significant amount could flow into this.

Azure Minerals (AZS AU): MinRes Selling Out Paves the Way for the Scheme

By Arun George

  • The AFR reports that JPMorgan is selling 14.5% of Azure Minerals (AZS AU) shares at A$3.42. The primary seller is said to be Mineral Resources (MIN AU), seeking to exit.
  • MinRes’ decision to sell out a discount rather than accept the scheme A$3.70 offer reflects the cost of securing a say on Andover and the opportunity cost of capital. 
  • The transaction booklet will be despatched in early March. At the last close and for an early May scheme payment, the gross/annualised spread is 2.5%/13.4%. 

Itoki (7972 JP) – Worth Thinking About Post Mega ToSTNeT-3 Buyback

By Travis Lundy

  • As discussed in Itoki (7972) Mammoth Buyback Coming Imminently After 35% Jump, the company was going to do a mega ToSTNeT-3 buyback between then and end-Feb. That happened this morning.
  • The company bought back 7.966mm shares (13.96%) for ¥15.9bn. That should have cleared out the bulk of the risk of the original warrant holders who bought in 2020. But…
  • The dilution/accretion don’t offset perfectly, and there is a clause suggesting how this might play out from here. But we can infer things from other data we now have.

Azure (AZS AU): MinRes’ Discounted Exit

By David Blennerhassett

  • JPMorgan is placing MinRes (MIN AU)‘s 14.5% stake in Azure Minerals (AZS AU) at A$3.42/share, a 5% discount to last close and a 7.6% discount to the A$3.70/share Scheme price. 
  • It was reported last month that MinRes, who paid up to ~A$4.00/share for some of its stake, was looking to exit. But cash now vs. ~8% more in two months?
  • Given the recent rout in lithium and nickel prices, one wonders if a MAC landmine lurks. Or, quite simply, MinRes just needs the cash. Expect Azure to fall tomorrow.

Union Bank of India (UNBK IN) Placement: Using Index Inclusion Well

By Brian Freitas

  • Union Bank Of India (UNBK IN) is looking to raise up to INR 30bn (US$362m) with the floor price set at INR 142.78/share and a maximum discount of 5%.
  • The stock has run up a lot and with index inclusion around the corner, this is as good a time as any to issue stock.
  • Union Bank Of India (UNBK IN) trades cheaper than peers and could continue to outperform over the near-term.

NPS Plans to Select Three Asset Management Companies For “Corporate Value Up” Program

By Douglas Kim

  • On 21 February, NPS announced that it will select three domestic asset management companies to manage funds that will be allocated to the “corporate value up” program. 
  • NPS plans to accept proposals from the local asset management and investment advisory companies from 21 to 29 February. NPS is likely to finalize the selected candidates sometime in March. 
  • We provide a list of 34 companies where the NPS has at least 5% ownership stake, with PBR of 0.5x or less, and included in KOSPI 200.

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

By Arun George

  • 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. 

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

By David Blennerhassett

  • $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.

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Feb 22
0

Daily Brief ESG: Investors Want to See a Shift in Management to Create Value and more

By | Daily Briefs, ESG

In today’s briefing:

  • Investors Want to See a Shift in Management to Create Value, Not Just Meet Government Target Numbers

Investors Want to See a Shift in Management to Create Value, Not Just Meet Government Target Numbers

By Aki Matsumoto

  • In 2023, % Woman Board Members increased progressively even in companies with lower corporate governance scores. Many companies are unanimous in their commitment to appointing women board members.
  • Together with the fact that business challenges have not been solved by only having people who think alike, 90% of institutional investors said that information on women’s activities is important.
  • Companies with over 25% women on their boards have superior values in profitability and stock valuation. Managers should implement the promotion of women in order to transition to value-creating management.

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Feb 22
0

Daily Brief Thematic (Sector/Industry): Ohayo Japan | AI Fever; Nvidia +9% After-Hours and more

By | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

  • Ohayo Japan | AI Fever; Nvidia +9% After-Hours
  • [Blue Lotus Daily]: 1211 HK/300750 SZ/1810 HK/ATAT/HTHT/3690 HK/BEKE
  • [Blue Lotus Daily – TMT Update]: NTES/700 HK/PDD/AMZN/SHEIN/ZTO/1519 HK/PDD/BABA
  • Earnings (LSCC, ANET, GFS, Tokyo Electron, SITM, ENTG, AMAT)

Ohayo Japan | AI Fever; Nvidia +9% After-Hours

By Mark Chadwick

  • Nvidia Q4 revenue +260% to $22 billion; Q1 guidance $24 billion; beats already high expectations
  • Nikkei Futures point to a higher open; expect domestic market to on semicon names
  • Inflation expectations are on the rise in Japan. Honda announces largest wage increase since 1989

[Blue Lotus Daily]: 1211 HK/300750 SZ/1810 HK/ATAT/HTHT/3690 HK/BEKE

By Eric Wen

  • 1211 HK: BYD’s battery subsidiary FinDreams signed a lithium iron phosphate battery production agreement with Borg Warner (+)
  • 1810 HK: OPPO AI strategic press conference officially announced to be held on February 20, dubbed as ‘Opening the era of AI phones for all’ (-)
  • BEKE: Real Estate Industry: Existing home sales increased 70% yoy in CNY holiday(+)

[Blue Lotus Daily – TMT Update]: NTES/700 HK/PDD/AMZN/SHEIN/ZTO/1519 HK/PDD/BABA

By Ying Pan

  • NTES/700 HK: Tencent’s <Dream Star> didn’t perform as well as NetEase’s <Eggy Party> during the Spring Festival.(+/-)
  • PDD/AMZN/SHEIN: Temu search queries pass SHEIN after running Super Bowl ads (+/-/-)
  • ZTO/1519 HK/PDD/BABA: Parcel volume delivery increased ~31% during the Spring Festival period (+)

Earnings (LSCC, ANET, GFS, Tokyo Electron, SITM, ENTG, AMAT)

By Douglas O’Laughlin

  • Lattice is just too expensive for what it is. It’s one of the highest multiples in the space, but I acknowledge we are closer to the trough than the peak.

  • Tokyo Electron continues to be bullish high aspect etch and reports that they are winning in DRAM and hopefully in NAND in the future.

  • Arista says that AI revenue is yet to come, and 800G will mostly be in 2025, not 2024. The market got ahead of itself.

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Feb 22
0

Daily Brief Technical Analysis: Small Caps Outperform Despite “Hot” Inflation Reports; Equal-Weighted S&P 500 Breakout and more

By | Daily Briefs, Technical Analysis

In today’s briefing:

  • Small Caps Outperform Despite “Hot” Inflation Reports; Equal-Weighted S&P 500 Breakout

Small Caps Outperform Despite “Hot” Inflation Reports; Equal-Weighted S&P 500 Breakout

By Joe Jasper

  • In spite of last week’s hotter-than-expected inflation reports, the Russell 2000 (IWM) outperformed relative to the SPX and QQQ, and ended the week at YTD weekly closing highs.
  • The fact that small- and mid-caps outperformed during a week with two hot inflation reports is a sign we could see more outperformance in the weeks/months ahead.
  • Adding to the risk-on theme, the DXY displays a false breakout at $104.60-$104.70. Our bullish outlook that we have had since early November 2023 remains intact. 

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Feb 22
0

Daily Brief ECM: Gree (3632 JP) – Overnight Offering in Asset-Rich Value Trap as KDDI Sells Out and more

By | Daily Briefs, ECM

In today’s briefing:

  • Gree (3632 JP) – Overnight Offering in Asset-Rich Value Trap as KDDI Sells Out
  • Azure Minerals Block – Removal of Overhang but Still a Risky Bet
  • Union Bank of India QIP – Well-Flagged and Just in Time for Index Inclusion
  • Brainbees Solutions (FirstCry) IPO | Channel Feedback
  • Trial Holdings Pre-IPO – Updated Peer Comparison and Valuation
  • Pre-IPO Numans Health Food Holdings – Due to Flawed Business Model, Future Growth Is Uncertain

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

By Travis Lundy

  • 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.

Azure Minerals Block – Removal of Overhang but Still a Risky Bet

By Ethan Aw

  • Mineral Resources (MIN AU) is looking to raise up to A$229m (US$150m) via a secondary block trade in Azure Minerals (AZS AU), which will be a clean-up. 
  • The deal is a large one to digest, at approximately 51.6 days of three month ADV and 13.8% of current mcap. 
  • In this note, we’ll run the deal through our ECM framework and comment on deal dynamics.

Union Bank of India QIP – Well-Flagged and Just in Time for Index Inclusion

By Sumeet Singh

Brainbees Solutions (FirstCry) IPO | Channel Feedback

By Pranav Bhavsar

  • We visited FirstCry Franchisee stores in Ajmer (Rajasthan), and Hosur (Tamil Nadu).
  • FirstCry has a high brand recall, limited competition, and healthy franchisee relations.
  • The ability to leverage FirstCry and Baby Oye is a good margin lever.

Trial Holdings Pre-IPO – Updated Peer Comparison and Valuation

By Sumeet Singh

  • Trial Holdings (5882 JP) (TH) is now looking to raise around US$234m in its Japan IPO, after having canceled its prior listing attempt last year.
  • TH operates a network of retail stores that offer one-stop shopping under its everyday low price model, across a variety of daily necessities, food items and other products.
  • We have looked at the company’s past performance in our previous notes. In this note, we provide our updated thoughts on valuation.

Pre-IPO Numans Health Food Holdings – Due to Flawed Business Model, Future Growth Is Uncertain

By Xinyao (Criss) Wang

  • Numans values light asset model, which helps reduce cost/expenditures, and thereby increase profits. However, such business model has flaws – no R&D/production, only terminal sales/brand operation, no control over upstream.
  • Revenue growth of core business Algal oil DHA products declined.Numans attempts to change its monotonous product line and enter milk powder industry, but the results weren’t ideal. Numans suffered losses. 
  • If Numans only plays the role of a “porter” of finished products from abroad and lacks core competitiveness/technological content, it will face multiple challenges to achieve sustained high performance growth.

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Feb 22
0

Daily Brief Credit: Morning Views Asia: and more

By | Credit, Daily Briefs

In today’s briefing:

  • Morning Views Asia:

Morning Views Asia:

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.

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    Feb 22
    0

    Daily Brief Event-Driven: Korea NPS Abruptly Joins Corporate Value Up Program: According to Document Obtained from NPS and more

    By | Daily Briefs, Event-Driven

    In today’s briefing:

    • Korea NPS Abruptly Joins Corporate Value Up Program: According to Document Obtained from NPS
    • Itoki (7972 JP) – Worth Thinking About Post Mega ToSTNeT-3 Buyback
    • Azure Minerals (AZS AU): MinRes Selling Out Paves the Way for the Scheme
    • Union Bank of India (UNBK IN) Placement: Using Index Inclusion Well
    • Azure (AZS AU): MinRes’ Discounted Exit
    • NPS Plans to Select Three Asset Management Companies For “Corporate Value Up” Program
    • China Traditional Chinese Medicine (570 HK): Sinopharm-Led Pre-Conditional Offer at HK$4.60
    • TCM (570 HK): Sinopharm’s $4.60/Share Offer
    • CSR Ltd (CSR AU): Saint-Gobain’s A$9/Share Offer
    • CSR (CSR AU): Saint-Gobain’s Non-Binding Proposal at A$9.00

    Korea NPS Abruptly Joins Corporate Value Up Program: According to Document Obtained from NPS

    By Sanghyun Park

    • NPS abruptly joins ‘Corporate Value Up Program’, plans to select three asset managers. Deadline: this month’s 29th; results: March 19th, possibly linked to Korea Premium Index ETF launch in mid-May.
    • The document outlines guidelines, allocating 90-100% to value stocks, with KOSDAQ under 20%. While benchmarked to the internally-built index, it will likely focus on Korea Premium Index and KOSDAQ Global.
    • The fund size is crucial. NPS will disclose details later. But still, there is considerable room to this year’s ceiling for local equity; a significant amount could flow into this.

    Itoki (7972 JP) – Worth Thinking About Post Mega ToSTNeT-3 Buyback

    By Travis Lundy

    • As discussed in Itoki (7972) Mammoth Buyback Coming Imminently After 35% Jump, the company was going to do a mega ToSTNeT-3 buyback between then and end-Feb. That happened this morning.
    • The company bought back 7.966mm shares (13.96%) for ¥15.9bn. That should have cleared out the bulk of the risk of the original warrant holders who bought in 2020. But…
    • The dilution/accretion don’t offset perfectly, and there is a clause suggesting how this might play out from here. But we can infer things from other data we now have.

    Azure Minerals (AZS AU): MinRes Selling Out Paves the Way for the Scheme

    By Arun George

    • The AFR reports that JPMorgan is selling 14.5% of Azure Minerals (AZS AU) shares at A$3.42. The primary seller is said to be Mineral Resources (MIN AU), seeking to exit.
    • MinRes’ decision to sell out a discount rather than accept the scheme A$3.70 offer reflects the cost of securing a say on Andover and the opportunity cost of capital. 
    • The transaction booklet will be despatched in early March. At the last close and for an early May scheme payment, the gross/annualised spread is 2.5%/13.4%. 

    Union Bank of India (UNBK IN) Placement: Using Index Inclusion Well

    By Brian Freitas

    • Union Bank Of India (UNBK IN) is looking to raise up to INR 30bn (US$362m) with the floor price set at INR 142.78/share and a maximum discount of 5%.
    • The stock has run up a lot and with index inclusion around the corner, this is as good a time as any to issue stock.
    • Union Bank Of India (UNBK IN) trades cheaper than peers and could continue to outperform over the near-term.

    Azure (AZS AU): MinRes’ Discounted Exit

    By David Blennerhassett

    • JPMorgan is placing MinRes (MIN AU)‘s 14.5% stake in Azure Minerals (AZS AU) at A$3.42/share, a 5% discount to last close and a 7.6% discount to the A$3.70/share Scheme price. 
    • It was reported last month that MinRes, who paid up to ~A$4.00/share for some of its stake, was looking to exit. But cash now vs. ~8% more in two months?
    • Given the recent rout in lithium and nickel prices, one wonders if a MAC landmine lurks. Or, quite simply, MinRes just needs the cash. Expect Azure to fall tomorrow.

    NPS Plans to Select Three Asset Management Companies For “Corporate Value Up” Program

    By Douglas Kim

    • On 21 February, NPS announced that it will select three domestic asset management companies to manage funds that will be allocated to the “corporate value up” program. 
    • NPS plans to accept proposals from the local asset management and investment advisory companies from 21 to 29 February. NPS is likely to finalize the selected candidates sometime in March. 
    • We provide a list of 34 companies where the NPS has at least 5% ownership stake, with PBR of 0.5x or less, and included in KOSPI 200.

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

    By Arun George

    • 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. 

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

    By David Blennerhassett

    • $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.

    CSR Ltd (CSR AU): Saint-Gobain’s A$9/Share Offer

    By Brian Freitas

    • Cie De Saint-Gobain (SGO FP) has approached CSR Ltd (CSR AU) with a non-binding indicative offer to acquire all of CSR’s shares at A$9/share via a scheme of arrangement.
    • At the last close of CSR (pre-trading halt) the gross spread to the offer price is 13.21%. That will close significantly once the stock resumes trading.
    • Given the large premium to the last close, at a price higher than the highest high, and support from the CSR Board, the deal should go through.

    CSR (CSR AU): Saint-Gobain’s Non-Binding Proposal at A$9.00

    By Arun George

    • In response to media speculation, Cie De Saint-Gobain (SGO FP) confirmed a non-binding proposal for CSR Ltd (CSR AU) at A$9.00, a 32.9% premium to the undisturbed price.
    • Saint-Gobain is conducting confirmatory due diligence. CSR is at a trading halt concerning receiving a proposal regarding a potential material transaction involving CSR.
    • Shareholders should be supportive as the offer represents a 15-year high. The timing of a binding agreement is the key risk.  

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    Feb 22
    0

    Daily Brief Equity Bottom-Up: Shortlist Of High Conviction Ideas: Income and more

    By | Daily Briefs, Equity Bottom-Up

    In today’s briefing:

    • Shortlist Of High Conviction Ideas: Income, Value, and Margin of Safety – February 2024
    • United Microelectronics Is Becoming a Great Long-Term Acquisition Target for Intel
    • Taiwan Tech Weekly: AI Plays Weak Ahead of Nvidia Results Today; Intel & UMC; ARM & Novatek
    • Singapore Airlines – Onset of Earnings Normalization to Heighten Focus on Efficiency
    • From Nvidia Results to See Supply Chain Stories?
    • ASEAN EV Ecosystem Update: Further Initiatives to Build a Regional EV Ecosystem
    • Monthly Container Shipping Tracker | LNY Timing, Red Sea Re-Routes Boosted Revenue | (February 2024)
    • R1 Rcm Inc (RCM) – Wednesday, Nov 22, 2023
    • ESG Brew with Lendlease REIT’s CEO: “I live more sustainably by taking public transport”
    • Asahi Kagaku Kogyo

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

    By Sameer Taneja

    United Microelectronics Is Becoming a Great Long-Term Acquisition Target for Intel

    By Vincent Fernando, CFA

    • UMC spoke at an investment bank’s recent conference, providing additional color on guidance and its collaboration with Intel for 12nm chip production.
    • UMC comments imply the key synergies between the two companies, whereby each can solve the other’s key problem,
    • While UMC most likely needs to remain a “Taiwanese company” in terms of optics given its history, Intel’s synergies with UMC establishes acquisition-value support for UMC shares in our view.

    Taiwan Tech Weekly: AI Plays Weak Ahead of Nvidia Results Today; Intel & UMC; ARM & Novatek

    By Vincent Fernando, CFA

    • Key Events: 1) Nvidia Results Coming Today in the U.S. 2) Elan & ChipMOS Tomorrow in Taiwan 3) U.S. PC Maker Results Next Week
    • Why United Microelectronics Is Becoming a Great Long-Term Acquisition Target for Intel 
    • Novatek a Top Gainer After Reports of Alliance with ARM to Build Neoverse V2 for AI

    Singapore Airlines – Onset of Earnings Normalization to Heighten Focus on Efficiency

    By Neil Glynn

    • We cut our SIA operating profit by 9% to S$2.6bn in FY24 and by 17% to S$1.5bn in FY25 versus consensus of S$2.1bn.
    • SIA’s cost control is under-examined and we publish a deep dive on a concerning level of inflation relative to key peers, which actually escalated in 3Q24.
    • Cargo broke even in peak season, and Scoot’s margins present a conundrum as it may need to be further utilization to help SIA with cost management.

    From Nvidia Results to See Supply Chain Stories?

    By Andrew Lu

    • Post 35% price gain in a quarter, many good news we expected and other analysts expected already factored into the share price. We believe the risk/reward not attractive here.
    • TSMC guides stronger 1Q24 and 2024, helped by Nvidia and copy cat AI GPU/ASIC orders. We see greater opportunities for alternative copy cat solutions like AMD and Alchip.
    • We attribute Nvidia customers’ sales discrepancy to AI server is cannibalizing non-AI server and Nvidia is allocating more GPUs to premium price paying customers in 1H24 and reverse in 2H24.

    ASEAN EV Ecosystem Update: Further Initiatives to Build a Regional EV Ecosystem

    By Shifara Samsudeen, ACMA, CGMA

    • EV supply chain is at a nascent stage in ASEAN and EV adoption in the region lags behind developed markets despite boasting a large population with a burgeoning middle class.
    • However, Governments in the region continue to introduce new initiatives and offer incentives to promote the sector, while companies continue to attract large investment to develop the EV market.
    • The four companies we looked at have reported earnings and we have discussed their latest results and our investment thesis.

    Monthly Container Shipping Tracker | LNY Timing, Red Sea Re-Routes Boosted Revenue | (February 2024)

    By Daniel Hellberg

    • January pricing momentum improved, helped by more operating days & re-routes
    • Throughput growth remained strong last month, including +18% into WC ports
    • Near term reality far rosier than downbeat view from industry giant Maersk

    R1 Rcm Inc (RCM) – Wednesday, Nov 22, 2023

    By Value Investors Club

    Key points

    • Analysts believe R1 (RCM) presents a compelling investment opportunity despite recent challenges
    • Predictions suggest profitability improvements and potential doubling of stock value over the next few years
    • Long-term outlook remains strong due to industry-leading position and growth potential in healthcare IT sector

    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.

    ESG Brew with Lendlease REIT’s CEO: “I live more sustainably by taking public transport”

    By Geoff Howie

    • kopi-C with Lendlease REIT’s CEO The first Singapore REIT to reach net zero emissions, Lendlease Global Commercial REIT has its next target in sight: absolute zero by 2040.
    • When it comes to sustainability, Lendlease Global Commercial REIT is ahead of its peers.

    Asahi Kagaku Kogyo

    By Altay Capital

    • Asahi Kagaku Kogyo’s Facility in Kunshan, China Asahi Kagaku Kogyo (TYO 7928) is a $12m market cap net-net industrial plastics manufacturer that over the last 10 years mostly operates around breakeven.
    • The business itself isn’t interesting, but it’s a positive that they aren’t losing money.
    • There also isn’t a single writeup on this company or any mentions of it on X/Twitter, so it’s definitely under the radar.

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    Feb 22
    0

    Daily Brief Macro: Indonesia’s Election – When the Music’s Over? and more

    By | Daily Briefs, Macro

    In today’s briefing:

    • Indonesia’s Election – When the Music’s Over?
    • 5 Things We Watch – Meeting Minutes, Cyclical Momentum, Natural Gas, Excess Retirements & China
    • Labour Nugget: Could the next move be a hike?
    • Indonesia Policy Rate 6.0% (consensus 6.0%) in Feb-24
    • Strong US and Weak Japanese Data Shifts Interest Rate Expectations – Implications for Stock Markets?

    Indonesia’s Election – When the Music’s Over?

    By Angus Mackintosh

    • Prabowo looks to have scored a resounding victory in Indonesia’s Presidential election, according to quick count results, with around 58% of the vote, which is positive from a visibility perspective.
    • Initial reaction suggests continuity from Jokowi’s legacy, with concerns centred around potentially nationalistic policies and increased government borrowing in the future, which may pressurise Indonesia’s budgetary position. 
    • We remain positive on the outlook for Indonesia, with increased government spending to fast-track Jokowi’s legacy projects. Prabowo also looks set on driving higher GDP growth next year.

    5 Things We Watch – Meeting Minutes, Cyclical Momentum, Natural Gas, Excess Retirements & China

    By Andreas Steno

    • The possibility of a comeback for both the manufacturing sector and inflationary pressures have reached the desks of macro enthusiasts, but markets have yet to fully acknowledge and factor in such possibilities, with initial bearish price action after both price releases being traded back within days, signaling that markets are still all about the direction of travel towards rate cuts.
    • Let’s dive right into this week’s 5 themes, and how to trade them!
    • This week we are watching out for the following 5 topics within global macro:
      • Meeting Minutes
      • Cyclical Momentum
      • Natural Gas
      • Excess Retirements
      • China

    Labour Nugget: Could the next move be a hike?

    By Andreas Steno

    • “The labor market remains tight, but supply and demand conditions continue to come into better balance,” We have heard Powell using this phrase continuously since last autumn and it has been a key ingredient in the dovish pivot in Q4.
    • But is the labour market truly coming into better balance, or is the post-pandemic equilibrium of higher wages and tighter labour market conditions of a more permanent character?
    • “Excess retirements” have grown sharply through 2023 again on improving wealth effects due to the rebound in equities, housing and crypto.

    Indonesia Policy Rate 6.0% (consensus 6.0%) in Feb-24

    By Heteronomics AI

    • Bank Indonesia’s decision to hold the BI-Rate at 6.00% balances persistent financial market uncertainties against strong domestic economic growth and the need for Rupiah stabilization.
    • Anticipated pressures from the global financial environment and domestic economic activities will dictate the future direction of interest rate policies, with a continued emphasis on ensuring Rupiah stability and controlling inflation within the set targets.
    • The central bank’s commitment to leveraging pro-market monetary tools and enhancing financial system digitalization underscores a forward-looking approach to monetary policy aimed at bolstering economic resilience and inclusion.
    This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

    Strong US and Weak Japanese Data Shifts Interest Rate Expectations – Implications for Stock Markets?

    By Rikki Malik

    • Some recent US data has been stronger than expected especially on the inflation front.
    • Japanese domestic economy confirmed to be  in recession as we expected
    • Both markets remain buoyant – the question is for how long?

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