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Smartkarma Daily Briefs

Feb 12
0

Daily Brief Japan: Roland DG Corp, SCREEN Holdings, Lawson Inc, Welbe Inc, Nissan Motor, TSE Tokyo Price Index TOPIX and more

By | Daily Briefs, Japan

In today’s briefing:

  • Roland DG (6789) – Tender Offer by Taiyo Partners – Nice Premium But Too Cheap
  • Screen Holdings (7735 JP): Positioning & Potential Passive Buying
  • Weekly Deals Digest (11 Feb) – Lawson, Benefit One, Welbe, China TCM, L’Occitane, Hollysys
  • Welbe (6556 JP) – MBO by Polaris
  • ECM Weekly (12th Feb 2024) – Nissan/Renault, Metcash, Digital Core, SBFC, Thai Credit, Park Hotel
  • Investors Are Valuing Equities Thinking that Managers Are Still Slow to Put Cash to Good Use?

Roland DG (6789) – Tender Offer by Taiyo Partners – Nice Premium But Too Cheap

By Travis Lundy

  • Taiyo Pacific Partners took the original parent company (Roland Corp (7944 JP) of Roland DG Corp (6789 JP) private in 2014. It was re-listed in 2020. 
  • Roland DG is one of the world’s leading large format digital printer manufacturers. They also make some interesting medical devices and systemic tools, and 3D milling/printing/engraving/photo impact machines.
  • This TOB is at a 30.1% premium. Almost a 10yr high. But it is not expensive. And even if TPP has 20%, there is a LOT of float left over.

Screen Holdings (7735 JP): Positioning & Potential Passive Buying

By Brian Freitas

  • SCREEN Holdings (7735 JP) could be added to a global index at the end of the month and there will be a lot of buying in the stock.
  • There is a fair bit of positioning for the potential passive buying and there will be supply in the stock.
  • However, the stock trades cheaper than its peers and a correction could provide an opportunity for long-term investors to enter the stock.

Weekly Deals Digest (11 Feb) – Lawson, Benefit One, Welbe, China TCM, L’Occitane, Hollysys

By Arun George

Welbe (6556 JP) – MBO by Polaris

By Travis Lundy

  • On Thursday after the close, an entity tied to Polaris Capital announced an MBO of Welbe Inc (6556 JP). (Note this is Welbe not Welby Inc (4438 JP)). 
  • The MBO by Tender Offer is set at ¥1,089/share is at a 29.952% premium to Thursday’s last trade. Coincidentally. It is well below where it traded 3-5 years ago.
  • If large domestic financial investors want a bump, we might see some fun, but I expect there is enough ownership willing to tender to get this over the hump.

ECM Weekly (12th Feb 2024) – Nissan/Renault, Metcash, Digital Core, SBFC, Thai Credit, Park Hotel

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, Thai Credit Bank finally ended Thailand’s long dry spell, although it wasn’t a happy ending.
  • For placements, REITs appear to be coming back to life with rates now having peaked.

Investors Are Valuing Equities Thinking that Managers Are Still Slow to Put Cash to Good Use?

By Aki Matsumoto

  • EPS and BPS had run in parallel since June 2022, but BPS has accelerated at a more rapid pace since May 2023, and TOPIX has risen sharply since April 2023.
  • Since TOPIX is more correlated with BPS than EPS, the hypothesis that “stock prices are more reliant on BPS increases, including cash increases, than on EPS” would be considered.
  • Investors may believe that Japanese management still needs more time to use cash effectively, and evaluate companies based on their BPS, which indicates a movement toward improved cash flow.

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Feb 12
0

Daily Brief India: Zydus Lifesciences Ltd and more

By | Daily Briefs, India

In today’s briefing:

  • Zydus Lifesciences (ZYDUSLIF IN): Strong India Momentum; Q3 Net Profit Jumps 27%; Buyback Approved

Zydus Lifesciences (ZYDUSLIF IN): Strong India Momentum; Q3 Net Profit Jumps 27%; Buyback Approved

By Tina Banerjee

  • Zydus Lifesciences Ltd (ZYDUSLIF IN) reported 16% YoY and 7% QoQ growth in India formulation business revenue in Q3FY24 on the back of healthy volume growth and new product launches.
  • Profitability improvement continued, with Q3FY24 improving 200 basis points YoY to 24.5%. Net profit surged 27% YoY.
  • The Board approved INR6 billion buyback, representing 0.59% of total outstanding equity shares at a price of INR1005 per share (25% premium to last closing price) via tender offer route.

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Feb 11
0

Daily Brief TMT/Internet: Semiconductor Manufacturing International Corp (SMIC), Infosys Ltd, Microchip Technology, SiteMinder, Meta Platforms (Facebook), PTC Inc, Qorvo Inc, Apple , Amazon.com Inc and more

By | Daily Briefs, TMT/Internet

In today’s briefing:

  • China Semi Foundry: Fierce Competition & Sluggish Rebound In Year Of The Dragon
  • Index Rebalance & ETF Flow Recap: STAR100, NEXT50, LowVol30, KOSPI200, TW50, NWD, ITC, India Float
  • Microchip Technology: How Their Latest Innovations Are Set to Dominate the Market! – Major Drivers
  • Quiddity Leaderboard ASX Mar 24: Five ASX 200 Changes Possible Including One Surprise
  • Meta Platforms: A Spectacular End To 2023 But What Are The Bumps Ahead On The Road In 2024? – Major Drivers
  • PTC Inc: Can The ServiceMax Acquisition Be A Game Changer? – Major Drivers
  • Qorvo Inc: New Strategic Partnerships & Other Major Growth Drivers
  • Apple Inc.: An Impressive 2024 Lineup But What Does It Mean For Shareholders? – Major Drivers
  • Amazon.com Inc: Increased Efforts to Improve Cost Efficiency and Innovation & 5 Other Strategies For 2024! – Financial Forecasts

China Semi Foundry: Fierce Competition & Sluggish Rebound In Year Of The Dragon

By William Keating

  • Both SMIC & Hua Hong reported Q423 earnings in line with expectations and both guided Q124 flat to slightly down. SMIC expects FY24 mid single digit growth YoY.
  • The downturn has exposed inherent weakness in China’s Semi Foundry segment relative to peers as exemplified by the significant GM disparity
  • China’s two leading semi foundries have ~80% domestic dependence. Right now, that’s a headwind

Index Rebalance & ETF Flow Recap: STAR100, NEXT50, LowVol30, KOSPI200, TW50, NWD, ITC, India Float

By Brian Freitas

  • There will be a bunch of rebalance announcements towards the start and at the end of the coming week. This includes the HSI, HSCEI, HSTECH, HSCI, HSIII and global indices.
  • The review period for the March rebalance of the S&P/ASX 200 and related indices ends on 16 February. The announcement of the changes will come couple of weeks later.
  • There were HUGE inflows to mainland China ETFs for yet another week as Central Huijin indicated that they would continue to buy/create ETFs units.

Microchip Technology: How Their Latest Innovations Are Set to Dominate the Market! – Major Drivers

By Baptista Research

  • Microchip Technology, a leading provider of microcontroller and analogue semiconductors, reported its third quarter 2024 financial results which were below expectations as net sales dropped 21.7% sequentially and 18.6% year-over-year due to increased business uncertainty, slowing economic activity, and higher inventory levels among customers.
  • Despite a challenging environment, the company’s non-GAAP gross and operating margins showed some resilience at 63.8% and 41.2% respectively.
  • 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.

Quiddity Leaderboard ASX Mar 24: Five ASX 200 Changes Possible Including One Surprise

By Janaghan Jeyakumar, CFA

  • In this insight, we take a look at the potential index changes for ASX 300, 200, 100, 50, and 20 in the run-up to the March 2024 index review.
  • I expect one change for ASX 20, one change for ASX 100, and five changes for ASX 200 including a surprise deletion due to long term suspension of a stock.
  • The official index changes will be announced after the close on Friday 1st March 2024.

Meta Platforms: A Spectacular End To 2023 But What Are The Bumps Ahead On The Road In 2024? – Major Drivers

By Baptista Research

  • Meta delivered a spectacular Q4 FY 2023 Earnings and the company has managed to achieve substantial growth in the past year.
  • With more than 3.1 billion users engaging with at least one of Meta’s applications daily, the immense usage indicates the key role that the company plays in shaping online social interactions and connectivity globally.
  • A notable highlight of Meta’s 2023 performance was its increased revenue growth, showing remarkable financial strength.

PTC Inc: Can The ServiceMax Acquisition Be A Game Changer? – Major Drivers

By Baptista Research

  • The Q1 results of PTC were promising, marking a good start to fiscal 2024.
  • The firm demonstrated robust financial results and the smooth execution of the CEO succession process.
  • The company’s Chief Executive Officer, Jim Heppelmann, expressed his confidence in the incoming CEO, Neil Barua, who has shown a deep understanding of the PTC business model and possesses the complete trust of the executive team.

Qorvo Inc: New Strategic Partnerships & Other Major Growth Drivers

By Baptista Research

  • Qorvo, the American semiconductor company, in its Q3 earnings call of fiscal 2024, discussed its financial performance and future outlook.
  • Even during challenging times, the company delivered improved financial results.
  • Qorvo demonstrated resilience through robust sales figures and significant income for the period.

Apple Inc.: An Impressive 2024 Lineup But What Does It Mean For Shareholders? – Major Drivers

By Baptista Research

  • According to the latest Q1 earnings, Apple Inc.
  • showcased an upward trajectory with revenue reaching $119.6 billion for the December quarter – a 2% increase from a year ago.
  • The electronics giant reached revenue records in more than two dozen countries and regions, with substantial growth in many emerging markets.

Amazon.com Inc: Increased Efforts to Improve Cost Efficiency and Innovation & 5 Other Strategies For 2024! – Financial Forecasts

By Baptista Research

  • Amazon.com reported bullish Q4 2023 financial results.
  • Revenue stood at $170 billion, indicating an upsurge of 13% year-over-year, barring the impact of foreign exchange rates.
  • Operating income hiked up to $13.2 billion, showing a YoY growth of 383% or a surge of $10.5 billion.

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Feb 11
0

Daily Brief Industrials: Benefit One Inc, Honeywell International, Parker Hannifin, C.H. Robinson Worldwide, Fortive , Rockwell Automation and more

By | Daily Briefs, Industrials

In today’s briefing:

  • (Mostly) Asia-Pac Weekly Risk Arb Wrap: Silver Lake, Ssangyong Cement, Vinda, Benefit One, Hollysys
  • Honeywell International – Heavy Investment in Aerospace & Other Futuristic Strategies Propelling Them Forward! – Major Drivers
  • Parker-Hannifin Corporation: Increased Global Frontline Performance & Improved Margins Saving The Day? – Major Drivers
  • C.H. Robinson Worldwide – Efforts Towards Cost Reduction For Offsetting Inflation Bearing Fruit? – Major Drivers
  • Fortive Corporation: Excellent Potential for Portfolio Durability through M&A! – Major Drivers
  • Rockwell Automation: Strong End-Market Demand & 5 Other Factors Driving Its Growth! – Financial Forecasts

(Mostly) Asia-Pac Weekly Risk Arb Wrap: Silver Lake, Ssangyong Cement, Vinda, Benefit One, Hollysys

By David Blennerhassett

Honeywell International – Heavy Investment in Aerospace & Other Futuristic Strategies Propelling Them Forward! – Major Drivers

By Baptista Research

  • The fourth quarter 2023 earnings for Honeywell International took place in a dynamic backdrop; the company delivered on its 2023 commitments despite this.
  • Honeywell’s Accelerator operating system and differentiated technologies allowed it to meet the full year guidance for organic growth, adjusted earnings per share, and free cash flow.
  • As a result of leadership changes, Vimal Kapur, CEO, has been elected to additionally serve as Chairman, starting from June after the current Executive Chairman, Darius Adamczyk, retires.

Parker-Hannifin Corporation: Increased Global Frontline Performance & Improved Margins Saving The Day? – Major Drivers

By Baptista Research

  • With respect to Parker-Hannifin’s latest earnings, a few distinctive factors paint a broad picture of the company’s current status and future prospects.
  • With record sales of $4.8 billion in Q2, a 3% progression from the previous year, the company has expressed confidence in sustaining incrementals of over 100% and expanding upon the adjusted segment operating margin which stood at a record 24.5%, marking a 3% increase on a year-to-year basis.
  • This strong performance has primarily been driven by their Aerospace Systems, while both Industrial Silos also made valuable contributions.

C.H. Robinson Worldwide – Efforts Towards Cost Reduction For Offsetting Inflation Bearing Fruit? – Major Drivers

By Baptista Research

  • C.H. Robinson delivered mixed quarter four results for 2023 with gross profits of $618.6 million, down by 20% YoY due to a difficult freight market according to the company.
  • Total revenue was also down to $4.2 billion.
  • In terms of productivity initiatives, some improvements were made with a 17% improvement in North American Surface Transportation (NAST) and a 20% improvement in Global Forwarding.

Fortive Corporation: Excellent Potential for Portfolio Durability through M&A! – Major Drivers

By Baptista Research

  • In the Q4 and full year 2023 earnings call of Fortive Corporation, executives reported that Fortive delivered strong operational performance throughout 2023, displaying consistent performance amid a mixed macroeconomic environment.
  • Its adjusted operating margins approached 26%, a record high, pointing to the company’s resilience and successful execution of strategic planning.
  • Fortive also saw significant capital deployment across its segments.

Rockwell Automation: Strong End-Market Demand & 5 Other Factors Driving Its Growth! – Financial Forecasts

By Baptista Research

  • In the Rockwell Automation results, it’s important to start by appreciating that the company registered first quarter growth, even amidst the challenging economic landscape.
  • Rockwell Automation registered a 3.6% year-over-year increase in total sales led by North America.
  • This performance is attributable partly to the company’s broad business portfolio which has helped spread risk.

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Feb 11
0

Daily Brief Energy/Materials: Crude Oil, Royal Dutch Shell Plc (Adr) and more

By | Daily Briefs, Energy & Materials Sector

In today’s briefing:

  • EIA Forecasts Crude Oil Prices to Fall in 2025 Due to Weak Demand Growth
  • Shell PLC – Is Their Intensive Focus on Cost Reduction to Enhance Profitability Working Out? – Major Drivers

EIA Forecasts Crude Oil Prices to Fall in 2025 Due to Weak Demand Growth

By Suhas Reddy

  • EIA forecasts oil prices to gain during the first half of 2024 due to the Red Sea conflict and inventory withdrawals.
  • Downward pressure from lukewarm oil demand and oversupply to keep prices low in 2025.
  • US commercial crude oil inventories grew by 1.3% on a weekly basis but are 4% below the five year average for this time of year.

Shell PLC – Is Their Intensive Focus on Cost Reduction to Enhance Profitability Working Out? – Major Drivers

By Baptista Research

  • Royal Dutch Shell’s Q4 and full year 2023 financial results demonstrated strong performance despite external uncertainties and volatility.
  • The company reported the second-highest cash flow from operations in its history.
  • However, Shell’s personal safety results were slightly lower than in 2022, and teams are focused on improvement in 2024.

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Feb 11
0

Daily Brief Industrials: Benefit One Inc, Honeywell International, Parker Hannifin, C.H. Robinson Worldwide, Fortive , Rockwell Automation and more

By | Daily Briefs, Industrials

In today’s briefing:

  • (Mostly) Asia-Pac Weekly Risk Arb Wrap: Silver Lake, Ssangyong Cement, Vinda, Benefit One, Hollysys
  • Honeywell International – Heavy Investment in Aerospace & Other Futuristic Strategies Propelling Them Forward! – Major Drivers
  • Parker-Hannifin Corporation: Increased Global Frontline Performance & Improved Margins Saving The Day? – Major Drivers
  • C.H. Robinson Worldwide – Efforts Towards Cost Reduction For Offsetting Inflation Bearing Fruit? – Major Drivers
  • Fortive Corporation: Excellent Potential for Portfolio Durability through M&A! – Major Drivers
  • Rockwell Automation: Strong End-Market Demand & 5 Other Factors Driving Its Growth! – Financial Forecasts

(Mostly) Asia-Pac Weekly Risk Arb Wrap: Silver Lake, Ssangyong Cement, Vinda, Benefit One, Hollysys

By David Blennerhassett

Honeywell International – Heavy Investment in Aerospace & Other Futuristic Strategies Propelling Them Forward! – Major Drivers

By Baptista Research

  • The fourth quarter 2023 earnings for Honeywell International took place in a dynamic backdrop; the company delivered on its 2023 commitments despite this.
  • Honeywell’s Accelerator operating system and differentiated technologies allowed it to meet the full year guidance for organic growth, adjusted earnings per share, and free cash flow.
  • As a result of leadership changes, Vimal Kapur, CEO, has been elected to additionally serve as Chairman, starting from June after the current Executive Chairman, Darius Adamczyk, retires.

Parker-Hannifin Corporation: Increased Global Frontline Performance & Improved Margins Saving The Day? – Major Drivers

By Baptista Research

  • With respect to Parker-Hannifin’s latest earnings, a few distinctive factors paint a broad picture of the company’s current status and future prospects.
  • With record sales of $4.8 billion in Q2, a 3% progression from the previous year, the company has expressed confidence in sustaining incrementals of over 100% and expanding upon the adjusted segment operating margin which stood at a record 24.5%, marking a 3% increase on a year-to-year basis.
  • This strong performance has primarily been driven by their Aerospace Systems, while both Industrial Silos also made valuable contributions.

C.H. Robinson Worldwide – Efforts Towards Cost Reduction For Offsetting Inflation Bearing Fruit? – Major Drivers

By Baptista Research

  • C.H. Robinson delivered mixed quarter four results for 2023 with gross profits of $618.6 million, down by 20% YoY due to a difficult freight market according to the company.
  • Total revenue was also down to $4.2 billion.
  • In terms of productivity initiatives, some improvements were made with a 17% improvement in North American Surface Transportation (NAST) and a 20% improvement in Global Forwarding.

Fortive Corporation: Excellent Potential for Portfolio Durability through M&A! – Major Drivers

By Baptista Research

  • In the Q4 and full year 2023 earnings call of Fortive Corporation, executives reported that Fortive delivered strong operational performance throughout 2023, displaying consistent performance amid a mixed macroeconomic environment.
  • Its adjusted operating margins approached 26%, a record high, pointing to the company’s resilience and successful execution of strategic planning.
  • Fortive also saw significant capital deployment across its segments.

Rockwell Automation: Strong End-Market Demand & 5 Other Factors Driving Its Growth! – Financial Forecasts

By Baptista Research

  • In the Rockwell Automation results, it’s important to start by appreciating that the company registered first quarter growth, even amidst the challenging economic landscape.
  • Rockwell Automation registered a 3.6% year-over-year increase in total sales led by North America.
  • This performance is attributable partly to the company’s broad business portfolio which has helped spread risk.

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Feb 11
0

Daily Brief Financials: Bajaj Finance Ltd, KE Holdings and more

By | Daily Briefs, Financials

In today’s briefing:

  • Bajaj Finance (BAF): A Sustained Growth Powerhouse
  • [KE Holdings (BEKE US, BUY, TP US$24) Target Price Change]: Benefiting from Structural Change

Bajaj Finance (BAF): A Sustained Growth Powerhouse

By Ankit Agrawal, CFA

  • Q3FY24 performance was slightly below expectation led by NIM margin compression and marginally elevated credit costs. Certain regulatory restrictions also dampened growth and profitability.
  • However, from a medium-term perspective, BAF is setting up well to be a sustained growth powerhouse. It has widened its product catalogue and is deepening the product availability per branch.
  • Led by growth tailwinds and market share gains, BAF has potential to grow at 25%+ for a prolonged period. The current headwinds seem temporary and provide a buying opportunity.

[KE Holdings (BEKE US, BUY, TP US$24) Target Price Change]: Benefiting from Structural Change

By Eric Wen

  • We expect KE Holdings (Beike) C4Q23 revenue to be in-line with consensus, with non-GAAP NI 15.6% higher than consensus, mainly due to better existing home sales.
  • Although overall home living demand remains lukewarm in 2023, the structural substitution from purchasing new home to existing home has accelerated, benefiting Beike, in our view.
  • We maintain the stock as BUY rating and trim down TP by US$0.5 to US$24.0/ADS to factor in the weak new home sales.

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Feb 11
0

Daily Brief Health Care: Terumo Corp and more

By | Daily Briefs, Healthcare

In today’s briefing:

  • Terumo Corp (4543 JP): 3Q Result Beat Estimate; Currency Depreciation Led Full-Year Guidance Raise

Terumo Corp (4543 JP): 3Q Result Beat Estimate; Currency Depreciation Led Full-Year Guidance Raise

By Tina Banerjee

  • Terumo Corp (4543 JP) posted highest ever quarterly and YTD revenue and operating profit in Q3FY24. Double-digit growth in C&V and TBCT businesses are the main revenue growth driver.
  • During 9MFY24, gross profit margin expanded 50bps YoY to 52%, while operating profit margin improved 40bps to 15.5%. Profitability improvement through price increases and cost reduction is on track.
  • Terumo has revised both FY24 revenue and profit upward to reflect continuing positive impacts from yen depreciation. The company is aiming for record high revenue and profit in FY24.

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Feb 11
0

Daily Brief Consumer: ASICS Corp, Lawson Inc, Johnson Controls, Tesla Motors, Royal Caribbean Cruises, Tractor Supply Company and more

By | Consumer, Daily Briefs

In today’s briefing:

  • Asics (7936) | Slow Out of the Blocks
  • Last Week in Event SPACE: Mitsui Fudosan/Oriental Land, Giordano, JSR, Pasona, Lawson, L’Occitane
  • Johnson Controls International: Initiation Of Coverage – A Strategic Overhaul That Could Be A Game Changer! – Major Drivers
  • Tesla Sold A Whopping One Car in January in South Korea
  • Royal Caribbean Cruises Ltd.: How They’re Sailing Towards Improved Profitability With These Strategies! – Major Drivers
  • Tractor Supply Company: Strategic Focus On Exclusive Brands Expansion & Other Key Drivers

Asics (7936) | Slow Out of the Blocks

By Mark Chadwick

  • Asics absolutely smashed the last MTP; this year they have a more measured approach
  • Full-Year OP guidance for FY24 is a little shy of street expectations, but this should not impact the share price
  • Asics has a decent runway for growth ahead and will benefit from channel mix improvements. The stock remains undervalued relative to peers

Last Week in Event SPACE: Mitsui Fudosan/Oriental Land, Giordano, JSR, Pasona, Lawson, L’Occitane

By David Blennerhassett

  • Apparently Elliott is requesting Mitsui Fudosan (8801 JP) conduct a very large buyback and to sell down its stake in Oriental Land (4661 JP).
  • Some 17 months after the Cheng Family failed to secure 50%+ of Giordano International (709 HK), the family are now calling an SGM to install friendly directors.
  • TheLawson (2651 JP) deal is not terribly surprising. It’s not terribly surprising that it is being done cheaply. It IS being done too cheaply. This is bumpable by force. 

Johnson Controls International: Initiation Of Coverage – A Strategic Overhaul That Could Be A Game Changer! – Major Drivers

By Baptista Research

  • This is our first report on diversified technology and multi industrial player, Johnson Controls.
  • The company reported its Q1 2024 earnings recently.
  • The company is facing some momentum after overcoming a considerable cyber disruption early in the quarter.

Tesla Sold A Whopping One Car in January in South Korea

By Douglas Kim

  • Tesla Motors (TSLA US) sold one car in January 2024 in South Korea. In comparison, Tesla sold 1,022 vehicles in December 2023 and 13,885 units in 2023.
  • The key reason for the sharp plunge in vehicle sales in January has been due to the government’s slashing EV subsidies for vehicles with Chinese LFP based batteries.
  • Furthermore, many consumers avoided buying Tesla vehicles in January as they waited for the government’s announcements of new EV subsidies. 

Royal Caribbean Cruises Ltd.: How They’re Sailing Towards Improved Profitability With These Strategies! – Major Drivers

By Baptista Research

  • The latest earnings of the Royal Caribbean Group exhibited an optimistic financial position for the Q4 and full-year 2023 and the company flourished particularly with the debut of the revolutionary product, Icon of the Seas.
  • By delivering the best vacation experiences, 2023 marked an exceptional year with net yields up by 13.5% compared to 2019 levels, thereby boosting net income by approximately $1 billion.
  • 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.

Tractor Supply Company: Strategic Focus On Exclusive Brands Expansion & Other Key Drivers

By Baptista Research

  • Tractor Supply Company concluded its fiscal year of 2023 with solid results and several significant milestones, even though the year was marked by many challenges.
  • Situated against a challenging backdrop of unfavorable weather, rising interest rates, and inflation impacting consumer spending habits, Tractor Supply Company extracted cause for optimism from developments and improvements in various areas of operations.
  • The company’s robust, needs-based business model has withstood various economic conditions since its inception in 1938.

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Feb 11
0

Most Read: Chandra Asri Petrochemical, Jiangsu Hoperun Software, Suzhou Novosense Microelectron, Renesas Electronics, DISCO Corp, Semiconductor Manufacturing International Corp (SMIC), ASICS Corp, Infosys Ltd, TSE Tokyo Price Index TOPIX and more

By | Daily Briefs, Most Read

In today’s briefing:

  • IDX30/​​LQ45 Index Rebalance: Four Changes for Each Index
  • ChiNext/​​​ChiNext50 Index Rebalance Preview: Overlapping Names Increases Flow
  • STAR50 Index Rebalance Preview: Sustaining Outperformance on Expected Impact
  • Index Rebalance & ETF Flow Recap: CSI300, CSI500, SSE50, ChiNext, KOSPI200, Renesas, IDX30/LQ45
  • Index Rebalance & ETF Flow Recap: N225, ASX, STAR50, NIFTY50, KRX New Deal, UOL SP, Korea Passive
  • Where Are We In the Global Liquidity Cycle?
  • China Semi Foundry: Fierce Competition & Sluggish Rebound In Year Of The Dragon
  • Asics (7936) | Slow Out of the Blocks
  • Index Rebalance & ETF Flow Recap: STAR100, NEXT50, LowVol30, KOSPI200, TW50, NWD, ITC, India Float
  • Increasing Pressure from Investors for Dissolution of Parent-Subsidiary (Inc. Affiliates) Listings

IDX30/​​LQ45 Index Rebalance: Four Changes for Each Index

By Brian Freitas

ChiNext/​​​ChiNext50 Index Rebalance Preview: Overlapping Names Increases Flow

By Brian Freitas

  • Nearly halfway through the review period, we forecast 7 changes for the ChiNext Index (SZ399006 INDEX EQUITY) and 5 changes for the ChiNext 50 Index in June.
  • Some of the potential changes will also have passive flows from the CSI 500 Index trackers at the same time as the ChiNext Index rebalance.
  • The potential inclusions and deletions have slipped over the last couple of months along with the ChiNext Index, but the potential inclusions have outperformed as the deletions have dropped more.

STAR50 Index Rebalance Preview: Sustaining Outperformance on Expected Impact

By Brian Freitas

  • The review period for the March rebalance ended 31 January. We expect the changes to be announced 23 February with the implementation taking place after the close on 8 March.
  • We expect the index committee to continue using a 6-month minimum listing history resulting in three changes to the index.
  • The potential inclusions have dropped but there has been significant outperformance versus the potential deletions. That could continue as positioning continues for the high expected impact on the stocks.

Index Rebalance & ETF Flow Recap: CSI300, CSI500, SSE50, ChiNext, KOSPI200, Renesas, IDX30/LQ45

By Brian Freitas

  • The review period for the NIFTY family of indices, Nikkei 225, STAR50, the KRX New Deal Index and a global index ends on 31 January.
  • The January rebalance of the IDX30 and LQ45 indices will be implemented at the close of trading on 31 January.
  • There have been huge inflows into the CSI 300 Index ETFs for another week. This will increase the impact on the index changes at the next rebalance.

Index Rebalance & ETF Flow Recap: N225, ASX, STAR50, NIFTY50, KRX New Deal, UOL SP, Korea Passive

By Brian Freitas

Where Are We In the Global Liquidity Cycle?

By Michael J. Howell

  • January 2024 another strong month for Global Liquidity which hits US$171.7 trillion
  • US Fed and China’s PBoC are in the forefront of adding liquidity
  • Global Liquidity Cycle trough in October 2022. Next peak late-2025

China Semi Foundry: Fierce Competition & Sluggish Rebound In Year Of The Dragon

By William Keating

  • Both SMIC & Hua Hong reported Q423 earnings in line with expectations and both guided Q124 flat to slightly down. SMIC expects FY24 mid single digit growth YoY.
  • The downturn has exposed inherent weakness in China’s Semi Foundry segment relative to peers as exemplified by the significant GM disparity
  • China’s two leading semi foundries have ~80% domestic dependence. Right now, that’s a headwind

Asics (7936) | Slow Out of the Blocks

By Mark Chadwick

  • Asics absolutely smashed the last MTP; this year they have a more measured approach
  • Full-Year OP guidance for FY24 is a little shy of street expectations, but this should not impact the share price
  • Asics has a decent runway for growth ahead and will benefit from channel mix improvements. The stock remains undervalued relative to peers

Index Rebalance & ETF Flow Recap: STAR100, NEXT50, LowVol30, KOSPI200, TW50, NWD, ITC, India Float

By Brian Freitas

  • There will be a bunch of rebalance announcements towards the start and at the end of the coming week. This includes the HSI, HSCEI, HSTECH, HSCI, HSIII and global indices.
  • The review period for the March rebalance of the S&P/ASX 200 and related indices ends on 16 February. The announcement of the changes will come couple of weeks later.
  • There were HUGE inflows to mainland China ETFs for yet another week as Central Huijin indicated that they would continue to buy/create ETFs units.

Increasing Pressure from Investors for Dissolution of Parent-Subsidiary (Inc. Affiliates) Listings

By Aki Matsumoto

  • There are 167 companies of 1,784 companies in Metrical Universe (12/2023) with major shareholders holding over 50% stake, and 605 companies with major shareholders holding between 20% and 50% stake.
  • TSE has requests listed parent companies, listed subsidiaries, and affiliates to disclose the significance of parent-subsidiary (affiliates) listings. This will further increase pressure for the dissolution of parent-subsidiary (affiliates) listings.
  • Hitachi’s transformation into value-creating company, which once spawned numerous listed subsidiaries, has been a success story since it began full-fledged “selection and concentration” process through the dissolution of parent-subsidiary listings.

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