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Smartkarma Daily Briefs

Feb 05
0

Daily Brief South Korea: Ssangyong Cement Industrial and more

By | Daily Briefs, South Korea

In today’s briefing:

  • Hahn & Co Launches a Tender Offer on Remaining Shares of Ssangyong C&E

Hahn & Co Launches a Tender Offer on Remaining Shares of Ssangyong C&E

By Douglas Kim

  • On 4 February, the local media reported that Hahn & Co private equity firm is launching a tender offer on the remaining shares of Ssangyong Cement Industrial (003410 KS) (Ssangyong C&E).
  • Tender offer price is 7,000 won (9.2% higher than the closing price on 2 February) and the tender offer amount is 702 billion won. 
  • We believe Ssangyong C&E’s shares are likely close to the tender offer price today. We believe there is higher probability of Hahn & Co successfully completing this tender offer. 

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Feb 05
0

Daily Brief Singapore: Cosmosteel Holdings and more

By | Daily Briefs, Singapore

In today’s briefing:

  • Silchester takes ComfortDelGro stake above 7%

Silchester takes ComfortDelGro stake above 7%

By Geoff Howie

  • CapitaLand Investment again led the buyback consideration tally, buying back 5 million shares at an average price of S$2.92 per share on Jan 26.
  • It also led the share buyback consideration tally in January, followed by Yangzijiang Financial Holding, Singapore Technologies Engineering, Venture Corporation and OUE.
  • Aside from Jardine Matheson Holdings, ComfortDelGro also ranked among the 10 stocks that booked the highest net institutional inflow in January.

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Feb 05
0

Daily Brief Indonesia: Bank Rakyat Indonesia and more

By | Daily Briefs, Indonesia

In today’s briefing:

  • Bank Rakyat Indonesia (BBRI IJ) – Pushing the Margins of Profitability

Bank Rakyat Indonesia (BBRI IJ) – Pushing the Margins of Profitability

By Angus Mackintosh

  • Bank Rakyat Indonesia’s results reflected its ability to offset a tighter liquidity environment with a higher margin loan mix as it continues to shift to commercial Kupedes microloans. 
  • The bank has also seen the benefit of increasing digitalisation benefitting costs with more BRILink agents and users of mobile banking through BRIMO, which has also helped to grow CASA.
  • Guidance for 2024 remains positive on loan growth, NIMs,  increasing leverage, and rising loan yields, with stable credit quality. Valuations look attractive relative to a forecast ROE of above 20%. 

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Feb 05
0

Daily Brief United States: Hollysys Automation Technologies and more

By | Daily Briefs, United States

In today’s briefing:

  • Merger Arb Mondays (05 Feb) – Hollysys, JSR, Benesse, Benefit One, Glosel, OreCorp, QV Equities

Merger Arb Mondays (05 Feb) – Hollysys, JSR, Benesse, Benefit One, Glosel, OreCorp, QV Equities

By Arun George

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Feb 05
0

Daily Brief India: Bharti Hexacom and more

By | Daily Briefs, India

In today’s briefing:

  • Bharti Hexacom Pre-IPO Tearsheet

Bharti Hexacom Pre-IPO Tearsheet

By Ethan Aw

  • Bharti Hexacom (6597372Z IN) is looking to raise up to US$1bn in its upcoming India IPO. The bookrunners are SBI Capital, Axis Capital, BOB Capital, ICICI Securities and IIFL Securities.
  • Bharti Hexacom (BH) is a communications solutions provider offering consumer mobile services, fixed-line telephone and broadband services to customers in the Rajasthan and the North East telecommunication circles in India.
  • It offers its services under the brand ‘Airtel’. BH relies on a robust network infrastructure with a mix of owned and leased assets.

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Feb 05
0

Daily Brief China: Meituan, Trip.com, WuXi AppTec and more

By | China, Daily Briefs

In today’s briefing:

  • Meituan (3690 HK): Turning Cautiously Positive
  • Monthly Chinese Tourism Tracker | China’s 2023 Recovery in Ten Charts | (January 2024)
  • Latest Impact of the US Biosecure Act on WuXi AppTec/WuXi Bio/WuXi XDC – China CXO Really Game Over?

Meituan (3690 HK): Turning Cautiously Positive

By Eric Chen

  • Share price of Meituan has fallen by 25% since we flagged the name as high-conviction sell for 2024 last December, due in large to its weakening fundamental and earnings cut.
  • We believe its competitive positioning in food delivery remains rock solid and estimates Meituan will likely command over 2/3 market share in in-store business, at the expense of margin.
  • The company trades at 12x/8.6x 2024/25 consensus earnings. Current valuation already priced in rather bearish outlook amidst macro concerns and intensified competition in our view. We see value emerging.

Monthly Chinese Tourism Tracker | China’s 2023 Recovery in Ten Charts | (January 2024)

By Daniel Hellberg

  • By one metric, outbound tourism in December improved to 89% of 2019 levels
  • Meanwhile, domestic activity in December remained close to pre-Covid levels
  • In this month’s edition we track the tourism recovery in ten illustrative charts

Latest Impact of the US Biosecure Act on WuXi AppTec/WuXi Bio/WuXi XDC – China CXO Really Game Over?

By Xinyao (Criss) Wang

  • Based on the latest updates, it’s still uncertain to see a positive turnaround.There’ve been no effective ways to evade.Debate about restricting Chinese biopharmaceuticals has never gone away in US politics.
  • Nobody can say with 100% certainty whether the Bill will be passed/how much impact it will have. Until the dust settles, any rebound in share prices is difficult to sustain.
  • The market is preparing for the worst-case scenario, but if the final Bill is less stringent than expected, shares of WuXi AppTec and its subsidiaries would rebound.Here’re different bottom-fishing strategies.

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Feb 05
0

Daily Brief Japan: JSR Corp, BayCurrent Consulting , Aozora Bank Ltd and more

By | Daily Briefs, Japan

In today’s briefing:

  • JSR (4185) – Possible Trouble in Arb Land as SUNY/CNSE Files Suit Against JSR Sub Inpria
  • JSR Corporation (4185 JP): An Unwelcome US Lawsuit as Tender Start Looms
  • Japan – Increasing Shorts on Some Interesting** Stocks
  • Aozora Bank (8304 JP) – Two Bets Too Far

JSR (4185) – Possible Trouble in Arb Land as SUNY/CNSE Files Suit Against JSR Sub Inpria

By Travis Lundy

  • JSR Corp (4185 JP)  announced 2 February on its website that the Research Foundation for the State University of New York (“RF SUNY”) filed suit against JSR subsidiary Inpria 25 January.
  • JSR claims no wrongdoing. A court order from the US District Court for the Northern District of New York denied RF SUNY’s request for a hearing by 5 February.
  • This may put a short-term damper on sentiment in the name, and I expect the JICC people have been working on this for a week. 

JSR Corporation (4185 JP): An Unwelcome US Lawsuit as Tender Start Looms

By Arun George

  • The Research Foundation of the State University of New York (SUNY RF) has filed a patent infringement lawsuit against JSR Corp (4185 JP) and its subsidiary, Inpria.
  • SUNY RF claims the “planned tender offer will irreparably harm SUNY RF absent preliminary relief” and filed a motion for a preliminary injunction to stop JSR licensing patents to JIC.
  • JSR has yet to file a response, making it hard to judge the lawsuit’s merits. The best case is the PI is not granted, delaying the tender by a month.  

Japan – Increasing Shorts on Some Interesting** Stocks

By Brian Freitas

  • There are some Japanese stocks that have dropped in price even as the broader market has powered higher. That could lead to the stocks being deleted from global portfolios.
  • The deletion from passive portfolios will lead to a liquidity event at the end of February where passive trackers will need to sell multiple days of ADV.
  • BayCurrent Consulting (6532 JP) is a dark horse for inclusion in the Nikkei 225 (NKY INDEX) in March and this deletion could take the stock lower before the Nikkei 225 announcement.

Aozora Bank (8304 JP) – Two Bets Too Far

By Victor Galliano

  • 3QFY23 results reveal losses related to Aozora’s US CRE exposure and securities portfolio; management forecasts a FY23 loss and a 50% cut in the previously forecast FY2023 dividend
  • US CRE exposure is 6.6% of total loans and Aozora’s US CRE deterioration propelled the NPL ratio to 2.87% up 162bps QoQ, the worst NPL ratio of the peer group
  • The securities portfolio hits are in US MBS and US bond ETFs; SMFG and Mizuho have large relative FX bond exposures, but they have less duration risk

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Feb 04
0

Daily Brief Industrials: SCREEN Holdings, Hyundai Motor, Outsourcing Inc, Lockheed Martin, Benefit One Inc, 3M Co, Paccar Inc, Raytheon Technologies and more

By | Daily Briefs, Industrials

In today’s briefing:

  • Screen Holdings (7735): Share Price Straight Up, Financials Not so Simple
  • Samhyun IPO Preview
  • (Mostly) Asia-Pac Weekly Risk Arb Wrap: QV Equities, Orecorp, Benesse, Glosel, Outsourcing
  • Lockheed Martin: How Bad Is The Impact of Delays in Government Budget? – Major Drivers
  • Weekly Deals Digest (04 Feb) – Benefit One, Benesse, Outsourcing, Glosel, Hollysys, OreCorp, QVE
  • Last Week in Event SPACE: Benefit One, Guoco, Outsourcing, Hang Lung, Hollysys, Dalek
  • 3M Company: How Geographic Shifts and Portfolio Magic Could Boost Growth! – Major Drivers
  • PACCAR Inc: Can The Newly Refreshed Product Lineup Change The Game? – Major Drivers
  • RTX Corporation: Can Their Investments In Differentiated Technologies Further Build Their Competitive Moat? – Major Drivers

Screen Holdings (7735): Share Price Straight Up, Financials Not so Simple

By Scott Foster

  • The share price was up 4.4% on Friday – and up 2.3x since the end of October – raising forward valuations to the high side of their usual range.
  • Management raised FY Mar-24 operating profit guidance slightly after 3Q results that were strong YoY but flat QoQ. 4Q should be better as finished goods inventory is shipped.
  • Operating efficiency has improved and a new semiconductor up-cycle has begun, but the numbers suggest caution. Take profits and reassess.

Samhyun IPO Preview

By Douglas Kim

  • Samhyun is getting ready to complete its IPO on the KOSDAQ exchange in March. The IPO total offering amount is 40 billion won to 50 billion won. 
  • The company generated sales of 99.8 billion won (up 45.5% YoY) and operating profit of 9.8 billion won (up 250% YoY) in 2023.
  • Samhyun developed one of the world’s first CVVD (Continuously Variable Valve Duration) technology for automobile engines, which improves fuel efficiency by controlling the engine’s valve opening time. 

(Mostly) Asia-Pac Weekly Risk Arb Wrap: QV Equities, Orecorp, Benesse, Glosel, Outsourcing

By David Blennerhassett

Lockheed Martin: How Bad Is The Impact of Delays in Government Budget? – Major Drivers

By Baptista Research

  • Lockheed Martin Corporation held its fourth quarter and year-end earnings conference call for 2023, outlining its performance, financial results, and future expectations.
  • The company emphasized strong performance in 2023, driven by considerable demand for its aircraft, helicopters, satellites, radar systems, and other products and services.
  • Lockheed Martin reported a record backlog of $161 billion, with sales for the full year of $67.6 billion, reflecting a 2% year-on year growth.

Weekly Deals Digest (04 Feb) – Benefit One, Benesse, Outsourcing, Glosel, Hollysys, OreCorp, QVE

By Arun George

Last Week in Event SPACE: Benefit One, Guoco, Outsourcing, Hang Lung, Hollysys, Dalek

By David Blennerhassett

3M Company: How Geographic Shifts and Portfolio Magic Could Boost Growth! – Major Drivers

By Baptista Research

  • 3M has shown solid operational improvements in its fourth-quarter results, which could translate into an exciting year ahead for the company, despite the ongoing pandemic-related challenges.
  • The company reported strong adjusted EPS growth of 11% and operating margin expansion of 180 basis points, with significant contributions from its restructuring program aimed at streamlining operations, reducing costs and improving productivity.
  • 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.

PACCAR Inc: Can The Newly Refreshed Product Lineup Change The Game? – Major Drivers

By Baptista Research

  • PACCAR, a leading American truck manufacturing company, showcased impressive performance in their fourth quarter 2023 earnings conference call.
  • The company reported record annual revenues of $35.1 billion and a net income of $4.6 billion, marking an impressive after-tax return on revenue of 13.1%.
  • This positive trend was primarily driven by record deliveries of the company’s DAF, Kenworth and Peterbilt trucks, strong results in its parts division and consistent financial services performance.

RTX Corporation: Can Their Investments In Differentiated Technologies Further Build Their Competitive Moat? – Major Drivers

By Baptista Research

  • RTX Corporation held its Q4 2023 earnings conference call with senior executives such as Chairman and CEO Greg Hayes, incoming CEO Chris Calio and Chief Financial Officer Neil Mitchill.
  • The call highlighted a leadership change with the transition of current CEO, Greg Hayes, to Executive Chairman, and Chris Calio assuming the role of CEO.
  • The company reported strong full-year results with $74.3 billion in adjusted sales, a growth of 11% organically, and adjusted EPS of $5.06, a growth of 6% year-over-year.

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Feb 04
0

Daily Brief TMT/Internet: DISCO Corp, Bluesheets , Alphabet , China Mobile, Texas Instruments, Verizon Communications and more

By | Daily Briefs, TMT/Internet

In today’s briefing:

  • Index Rebalance & ETF Flow Recap: N225, ASX, STAR50, NIFTY50, KRX New Deal, UOL SP, Korea Passive
  • Bluesheets Raises US$6.5M in Series A Led by Illuminate Financial
  • Alphabet Inc.: Is It Losing The AI Race? Or Can It Still Catch Up? – What Investors Need to Know! – Major Drivers
  • HK Connect SOUTHBOUND Flows (To 2 Feb 2024); Net Selling (Much Tech), Net SOE Buying, Still
  • Texas Instruments: A Tale of Strong Cash Generation and Capital Management! – Major Drivers
  • Verizon Communications – Increasing Contribution from Fixed Wireless Access & Other Major Drivers

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

By Brian Freitas

Bluesheets Raises US$6.5M in Series A Led by Illuminate Financial

By e27

  • Singapore-based AI automation software company Bluesheets today announced that it has secured US$6.5 million in a Series A funding round led by Illuminate Financial, a UK-based financial-services-focused VC fund that is backed by BNY Mellon, J.P Morgan, Citi, SGX, Barclays, Euroclear, S&P Global, Jefferies and Deutsche Börse Group.
  • The company’s early investors, such as 1982 Ventures and Insignia Ventures Partners, and new investor Antler Elevate Fund also participated in the round.
  • In a press statement, Bluesheets said that the funding will play a crucial role in advancing its exclusive AI capabilities, enabling them to assist a broader range of clients in digitalising and automating their processes, ensuring competitiveness in the AI-driven era.

Alphabet Inc.: Is It Losing The AI Race? Or Can It Still Catch Up? – What Investors Need to Know! – Major Drivers

By Baptista Research

  • Alphabet Inc.’s fourth quarter results for 2023 reflect signs of solid growth and sustained technological innovation as the company maintains a strong trajectory for 2023.
  • An investor would focus on Alphabet’s robust earnings performance, demonstrated by substantial revenues of $307 billion, an increase of 9% from 2022.
  • Take the case of Alphabet’s primary business.

HK Connect SOUTHBOUND Flows (To 2 Feb 2024); Net Selling (Much Tech), Net SOE Buying, Still

By Travis Lundy

  • A bad week for HK and Chinese shares. National Team buying seems lighter into the waning days of the Year of the Rabbit. 
  • Net SOUTHBOUND selling was HK$9.4bn on the week, with net selling every day as the market fell hard – both in HK and the mainland.
  • Remarkable this past week was the tendency to net sell names which were down hard, and net buy names which have been performing well. 

Texas Instruments: A Tale of Strong Cash Generation and Capital Management! – Major Drivers

By Baptista Research

  • Texas Instruments, an American multinational company, has shared their Q4 2023 earnings release.
  • The financial results indicated a downturn in revenue, decreased by 10% sequentially and 13% year-on-year to $4.1 billion.
  • This decrease was largely due to declining sales in the Analog segment (12% YoY), the Embedded Processing segment (10% YoY), and the Other segment (25% YoY).

Verizon Communications – Increasing Contribution from Fixed Wireless Access & Other Major Drivers

By Baptista Research

  • Verizon released its most recent results which were fairly good though we can develop a more balanced investment thesis for this telecommunications giant consists of highlighting several positives and negatives from the results of the fourth quarter of 2023.
  • Of the uplifting notes, Verizon saw a 3.2% YoY growth in wireless service revenue, hitting $76.7 billion in 2023.
  • The fourth quarter saw a strong finish with significant increases in customers embracing the offerings.

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Feb 04
0

Daily Brief Energy/Materials: Baker Hughes, Halliburton Co and more

By | Daily Briefs, Energy & Materials Sector

In today’s briefing:

  • Baker Hughes Company: Improving Consumer Demand For Integrated Solutions! – Major Drivers
  • Halliburton Company: Will The Recent Technology Advancements Become Their Biggest Growth Catalyst? – Major Drivers

Baker Hughes Company: Improving Consumer Demand For Integrated Solutions! – Major Drivers

By Baptista Research

  • Baker Hughes Company’s Q4 2023 financial performance reveals an overall strong growth and a positive outlook for 2024.
  • The company made substantial progress and saw records broken for all primary financial metrics like orders, revenue, EBITDA, EPS, and free cash flow.
  • This growth trend shows a successful financial strategy and beneficial operational improvements.

Halliburton Company: Will The Recent Technology Advancements Become Their Biggest Growth Catalyst? – Major Drivers

By Baptista Research

  • Halliburton Company in its fourth quarter 2023 earnings call reported a strong year with both its divisions, completion and production, and drilling and evaluation achieving their highest operating margins in over a decade.
  • The company generated full-year total company revenue of $23 billion, a 13% increase year-over-year, and operating income of $4.1 billion, an increase of 33% compared to 2022 adjusted operating income.
  • International business grew robustly with revenue up 17% year on-year despite the company’s exit from Russia in August of 2022.

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