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Smartkarma Daily Briefs

Jan 27
0

Daily Brief China: Tencent, Hang Seng Index, Remegen and more

By | China, Daily Briefs

In today’s briefing:

  • Tencent/Netease: Game Approval Accelerates, but Not for Big Names
  • EQD | HSI Short-Sellers Prepare for a Rally in February
  • [RemeGen (9995 HK, BUY, TP HK$34) Rating Change]: Time to Do Some Bottom Fishing…UG to BUY

Tencent/Netease: Game Approval Accelerates, but Not for Big Names

By Ke Yan, CFA, FRM

  • China announced game approval for the Jan batch. The number of games approved has increased compared to recent months.
  • The pace of China game approval appears to be accelerating, to the same level as pre-tightening.
  • Tencent gets one game approved but we don’t see that the acceleration of game approval benefits big names proportionally.

EQD | HSI Short-Sellers Prepare for a Rally in February

By Nico Rosti

  • The Hang Seng Index this week reversed up and close the week up, after 3 weeks down. This may not be the usual opportunity to go SHORT.
  • The index may rise for another 1 week and then pullback, but our seasonal matrix model says there is a good probability the HSI rallies in February.
  • Based on this market reading we advise HSI Short Sellers to be particularly careful when setting up SHORT trades between here and the end of February.

[RemeGen (9995 HK, BUY, TP HK$34) Rating Change]: Time to Do Some Bottom Fishing…UG to BUY

By Eric Wen

  • We believe RemeGen has bottom fishing value because its Systemic Lupus Erythematosus (SLE) drug Telitacicept (RC18) has already been approved for sale in China.
  • Earliest data read in US clinical trial for IgA Nephropathy is already available, with SLE data read available in C3Q24 and MS in C4Q24;
  • We don’t think a leading biotech from the wealthy city of Yantai will run out of cash. We assume RemeGen will be able to mitigate its liquidity problem.

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Jan 27
0

Daily Brief Japan: Pacific Metals and more

By | Daily Briefs, Japan

In today’s briefing:

  • JAPAN ACTIVISM:  Murakami-San Goes Substantial on Pacific Metals (5541)…. Again

JAPAN ACTIVISM:  Murakami-San Goes Substantial on Pacific Metals (5541)…. Again

By Travis Lundy

  • Yesterday after the close, activist Murakami-san’s entity City Index Eleventh reported a 5.76% position in beleaguered-now-smallcap ferro-nickel and nickel producer Pacific Metals (5541 JP). 
  • The company continues to lose a LOT of money. It is cheap at 0.4x book. 
  • But there are interesting things going on. And Murakami-san has a…. uh…. history here.

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Jan 26
0

Daily Brief Industrials: Okuma Corp, Gol Linhas Aereas Intel-Adr, easyJet PLC, Wizz Air Holdings, Frontier Group Holdings, Trimas Corp, GlobalData and more

By | Daily Briefs, Industrials

In today’s briefing:

  • Japanese Laggard Opportunity #2: Okuma Corp (6103 JP)
  • GOL – Chapter 11 Filing In a Bid to Ensure Financial Sustainability
  • EasyJet – On Track for >£600m PBT in FY24 and Another Record Summer
  • Wizz Air – Distortion Continues but Conditions Favourable to Pass Key Summer Test
  • US Airlines – Second Tier Strives for Financial Sustainability
  • TRS: Discounted Valuation
  • GlobalData – New three-year growth plan

Japanese Laggard Opportunity #2: Okuma Corp (6103 JP)

By Mohshin Aziz

  • Okuma Corp (6103 JP) is flagged as a good candidate to boost its shareholder value, it has a net cash balance sheet, P/BV of 0.9x and low PE of 10.7x  
  • Management has elaborated a detailed plan to boost its P/BV ratio, with targets to boost revenues and profit margins, as well as a 35% dedicated payout for dividends 
  • Okuma should trade at least 1x Book given its strong business positioning and brand name; we derive a fair value of JPY7,300 (11% UPSIDE) using FY2024’s forecast book value 

GOL – Chapter 11 Filing In a Bid to Ensure Financial Sustainability

By Neil Glynn

  • GOL has filed for CH11 in a New York court and will look to restructure, as major competitors/peers LATAM Group, Avianca and Aeromexico did when COVID struck, disadvantaging GOL.
  • To illustrate GOL’s disadvantage; in 9M23, GOL’s financing costs outweighed its EBITDAR to drive a negative PBT, whereas LATAM’s PBT represented 29% of EBITDAR, despite lower EBITDAR margins of 22%. 
  • Based on recent precedents, we expect the process may take two years.

EasyJet – On Track for >£600m PBT in FY24 and Another Record Summer

By Neil Glynn

  • EasyJet reported a strong 1Q24 (to December 2023) result, outperforming expectations, while issuing positive guidance on pricing prospects for the rest of winter and summer.
  • Pricing for the rest of winter appears benign, but easyJet highlights summer pricing is “well ahead yoy”, calming concerns that pricing strength will roll over.
  • Winter losses remain very difficult to manage, with easyJet likely to see a £3-4 per seat drag on pre-pandemic winter EBITDAR generation. Future opportunity and risk.

Wizz Air – Distortion Continues but Conditions Favourable to Pass Key Summer Test

By Neil Glynn

  • Wizz Air held guidance for FY24 to March 2024, or net income of €350m-€400m, but only due to compensation from Pratt & Whitney.
  • With no capacity growth in FY25 to March 2025, and costs apparently under control, Wizz Air should be able to drive significant earnings improvements.
  • Wizz Air seems set to receive over €200m in P&W compensation for aircraft groundings in 4Q24 to March; read across for other airlines operating grounded GTFs.

US Airlines – Second Tier Strives for Financial Sustainability

By Neil Glynn

  • Coverage launch on Frontier Airlines, JetBlue and Spirit Airlines following the rejection of the JetBlue/Spirit deal by the US.
  • High leverage and above-sector cost inflation put each carrier in a difficult competitive position, driving the need for significant structural earnings improvements to achieve financial sustainability
  • We are 10% above consensus 2024 EBITDAR for Frontier, narrowly above for JetBlue but 17% below consensus for Spirit.

TRS: Discounted Valuation

By Hamed Khorsand

  • The industry headwinds TriMas Corp. (TRS) experienced in 2023 are showing signs of abating and should result in TRS growing earnings in 2024
  • TRS spent 2023 restructuring its packaging business after customers began to change their ordering habits in 2022.
  • Recent quarterly results from Proctor & Gamble (PG) and preliminary sales from Inter Parfums (IPAR) shed positive light on unit volume growth in consumer packaging

GlobalData – New three-year growth plan

By Edison Investment Research

Having completed its five-year growth plan a year ahead of schedule, despite the intervening pandemic, GlobalData has now set out its ambitions for the next three years. These build on the group’s strengths in platform and proprietary data across its three segments in healthcare (36% of FY23e revenue), consumer (36%) and tech (28%). M&A is a key element, with the group’s financial strength significantly bolstered by the deal with Inflexion in December, where Inflexion took a 40% stake in GlobalData’s healthcare business at an implied valuation equivalent to c 75% of the group’s then market capitalisation. The share price has yet to reflect the benefits of this deal or the value inherent in the rest of the GlobalData.

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Jan 26
0

Daily Brief Utilities: ENN Natural Gas and more

By | Daily Briefs, Utilities Sector

In today’s briefing:

  • Morning Views Asia: ENN Natural Gas

Morning Views Asia: ENN Natural Gas

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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Jan 26
0

Daily Brief Health Care: Bio-Rad Laboratories A, Catalent Inc, Homology Medicines Inc and more

By | Daily Briefs, Healthcare

In today’s briefing:

  • Bio-Rad Laboratories: Initiation of Coverage – How China’s New Policies and a Global Recession Are Rocking Its Market! – Major Drivers
  • Catalent: Initiation of Coverage – How Their Ongoing Strategic Review Could Unleash Unprecedented Growth! – Major Drivers
  • Quick Ideas #7

Bio-Rad Laboratories: Initiation of Coverage – How China’s New Policies and a Global Recession Are Rocking Its Market! – Major Drivers

By Baptista Research

  • This is our first report on clinical diagnostic products manufacturer, Bio-Rad Laboratories.
  • The company’s financial results for the third quarter of 2023 show varying performances across segments.
  • The call highlighted key issues including the impacts of Bio-pharma and the challenges in the economic conditions in China on the company’s performances.

Catalent: Initiation of Coverage – How Their Ongoing Strategic Review Could Unleash Unprecedented Growth! – Major Drivers

By Baptista Research

  • This is our first report on healthcare tech solutions provider, Catalent Inc.
  • The company’s first quarter of fiscal year 2024 earnings call highlighted a solid start to the fiscal year despite turbulence in several markets.
  • The management noted improved focus on cash flow, citing benefits from better working capital management and increased analytical rigor around capital expenditure spending.

Quick Ideas #7

By Turtles all the way down

  • I want to close a few positions. First Homology (FIXX) a busted biotech mentioned here about 2 months ago.
  • A terrible reverse merger was inflicted on FIXX shareholders, and I was hoping the deal would be changed or some activist shareholder would jump in.
  • So far that has not happened while the stock is up 18%, so I am closing it here. 

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Jan 26
0

Daily Brief Energy/Materials: Chandra Asri Petrochemical, Foosung Co Ltd, Aptargroup Inc, Evolution Petroleum, Panoro Energy ASA and more

By | Daily Briefs, Energy & Materials Sector

In today’s briefing:

  • IDX30/​​LQ45 Index Rebalance: Four Changes for Each Index
  • Foosung: Announces a Rights Offering of 101 Billion Won
  • AptarGroup Inc: Initiation of Coverage – Cost-Cutting Mastery: How AptarGroup’s Strategic Moves Are Poised to Increased Profits! – Major Drivers
  • Evolution Petroleum Corp. -SCOOP/STACK Acquisition Supportive of Dividend Strategy
  • Panoro Energy ASA (OSE: PEN): ~45% production growth in 2024

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

By Brian Freitas

Foosung: Announces a Rights Offering of 101 Billion Won

By Douglas Kim

  • Foosung announced a rights offering worth 101 billion won. The estimated rights offering price is 7,850 won which is 22% discount to closing price on 25 January (10,070 won). 
  • The rights offering will involve 12.9 million shares (13.7% of outstanding shares). Of the 101 billion won in rights offering, the company will use 88.3 billion won in facility investments.
  • We are negative on Foosung overall and on the rights offering. Despite the company’s turnaround this year, there are concerns about share dilution plus valuations are not particularly attractive. 

AptarGroup Inc: Initiation of Coverage – Cost-Cutting Mastery: How AptarGroup’s Strategic Moves Are Poised to Increased Profits! – Major Drivers

By Baptista Research

  • This is our first report on Aptar Group Inc., a leading global supplier of consumer dispensing, active packaging and drug delivery solutions.
  • In the earnings call, the company reported core sales growth of 2% and double-digit EPS growth of $1.39 per share.
  • These successes are largely attributed to high market demand for Aptar’s proprietary pharma dosing and dispensing systems as well as their fragrance dispensing technologies.

Evolution Petroleum Corp. -SCOOP/STACK Acquisition Supportive of Dividend Strategy

By Water Tower Research

  • Evolution announced a $43.5 million acquisition of non- operated working interest in the SCOOP/STACK unconventional development play in central Oklahoma on January 9, 2024.
  • Our modeling suggests the accretive acquisition supports Evolution’s free cash flow profile and its dividend, which is a critical element of management’s total shareholder return strategy.
  • The properties include ~1,550 BOE/d of production from ~230 producing wells on ~3,700 net leasehold acres as of the November 1, 2023, effective date.

Panoro Energy ASA (OSE: PEN): ~45% production growth in 2024

By Auctus Advisors

  • FY23 production was ~8.5 mbbl/d, implying ~9.5-9.7 mbbl/d in 4Q23. 
  • The electrical issue at the ESPs on Dussafu has not been fully resolved and continues to negatively impact gross production.
  • Valuation We are now forecasting US$85.5/bbl for Brent in 2024 (US$90/bbl previously) and we have paired back our FY24 production forecast from ~13.4 mbbl/d to 12.7 mbbl/d.

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Jan 26
0

Daily Brief Industrials: Okuma Corp, Gol Linhas Aereas Intel-Adr, easyJet PLC, Wizz Air Holdings, Frontier Group Holdings, Trimas Corp, GlobalData and more

By | Daily Briefs, Industrials

In today’s briefing:

  • Japanese Laggard Opportunity #2: Okuma Corp (6103 JP)
  • GOL – Chapter 11 Filing In a Bid to Ensure Financial Sustainability
  • EasyJet – On Track for >£600m PBT in FY24 and Another Record Summer
  • Wizz Air – Distortion Continues but Conditions Favourable to Pass Key Summer Test
  • US Airlines – Second Tier Strives for Financial Sustainability
  • TRS: Discounted Valuation
  • GlobalData – New three-year growth plan

Japanese Laggard Opportunity #2: Okuma Corp (6103 JP)

By Mohshin Aziz

  • Okuma Corp (6103 JP) is flagged as a good candidate to boost its shareholder value, it has a net cash balance sheet, P/BV of 0.9x and low PE of 10.7x  
  • Management has elaborated a detailed plan to boost its P/BV ratio, with targets to boost revenues and profit margins, as well as a 35% dedicated payout for dividends 
  • Okuma should trade at least 1x Book given its strong business positioning and brand name; we derive a fair value of JPY7,300 (11% UPSIDE) using FY2024’s forecast book value 

GOL – Chapter 11 Filing In a Bid to Ensure Financial Sustainability

By Neil Glynn

  • GOL has filed for CH11 in a New York court and will look to restructure, as major competitors/peers LATAM Group, Avianca and Aeromexico did when COVID struck, disadvantaging GOL.
  • To illustrate GOL’s disadvantage; in 9M23, GOL’s financing costs outweighed its EBITDAR to drive a negative PBT, whereas LATAM’s PBT represented 29% of EBITDAR, despite lower EBITDAR margins of 22%. 
  • Based on recent precedents, we expect the process may take two years.

EasyJet – On Track for >£600m PBT in FY24 and Another Record Summer

By Neil Glynn

  • EasyJet reported a strong 1Q24 (to December 2023) result, outperforming expectations, while issuing positive guidance on pricing prospects for the rest of winter and summer.
  • Pricing for the rest of winter appears benign, but easyJet highlights summer pricing is “well ahead yoy”, calming concerns that pricing strength will roll over.
  • Winter losses remain very difficult to manage, with easyJet likely to see a £3-4 per seat drag on pre-pandemic winter EBITDAR generation. Future opportunity and risk.

Wizz Air – Distortion Continues but Conditions Favourable to Pass Key Summer Test

By Neil Glynn

  • Wizz Air held guidance for FY24 to March 2024, or net income of €350m-€400m, but only due to compensation from Pratt & Whitney.
  • With no capacity growth in FY25 to March 2025, and costs apparently under control, Wizz Air should be able to drive significant earnings improvements.
  • Wizz Air seems set to receive over €200m in P&W compensation for aircraft groundings in 4Q24 to March; read across for other airlines operating grounded GTFs.

US Airlines – Second Tier Strives for Financial Sustainability

By Neil Glynn

  • Coverage launch on Frontier Airlines, JetBlue and Spirit Airlines following the rejection of the JetBlue/Spirit deal by the US.
  • High leverage and above-sector cost inflation put each carrier in a difficult competitive position, driving the need for significant structural earnings improvements to achieve financial sustainability
  • We are 10% above consensus 2024 EBITDAR for Frontier, narrowly above for JetBlue but 17% below consensus for Spirit.

TRS: Discounted Valuation

By Hamed Khorsand

  • The industry headwinds TriMas Corp. (TRS) experienced in 2023 are showing signs of abating and should result in TRS growing earnings in 2024
  • TRS spent 2023 restructuring its packaging business after customers began to change their ordering habits in 2022.
  • Recent quarterly results from Proctor & Gamble (PG) and preliminary sales from Inter Parfums (IPAR) shed positive light on unit volume growth in consumer packaging

GlobalData – New three-year growth plan

By Edison Investment Research

Having completed its five-year growth plan a year ahead of schedule, despite the intervening pandemic, GlobalData has now set out its ambitions for the next three years. These build on the group’s strengths in platform and proprietary data across its three segments in healthcare (36% of FY23e revenue), consumer (36%) and tech (28%). M&A is a key element, with the group’s financial strength significantly bolstered by the deal with Inflexion in December, where Inflexion took a 40% stake in GlobalData’s healthcare business at an implied valuation equivalent to c 75% of the group’s then market capitalisation. The share price has yet to reflect the benefits of this deal or the value inherent in the rest of the GlobalData.

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Jan 26
0

Daily Brief TMT/Internet: Renesas Electronics, Alibaba Group Holding , Tesla Motors, ASML Holding NV, SK Hynix, Huawei Technology, Microstrategy Inc Cl A, Vanguard Intl Semiconductor and more

By | Daily Briefs, TMT/Internet

In today’s briefing:

  • Renesas (6723 JP) ANOTHER Clean-Up Block Trade as Hitachi/NEC Exit
  • Renesas Electronics (6723 JP): Passives Will Need to Buy a LOT This Year
  • Renesas Electronics Placement – Another US$2bn Deal, Momentum and Index Weights Should Help
  • Alibaba’s Share Prices Are Lacking Further Catalysts After Jack Ma and Joe Tsai’s Stock Acquisition
  • Good Entry Point as Tesla Stabilizes Its 4Q23 Asp and Profits Per EV
  • ASML Guides Q124 Down 27% QoQ, Shares Surge >8%. What Gives?
  • What SK Hynix’s Latest Results Indicate for PC & Mobile Makers into 2025E, Including Apple
  • Huawei’s Latest Operating System Completely Breaks with Android
  • MicroStrategy: Initiation of Coverage – Revolutionary AI and Cloud Surge! Why MicroStrategy Could Be Your Next Goldmine in Tech Investment! – Major Drivers
  • Vanguard (5347.TT): 1Q24F Revenue Outlook Is Down QoQ; 2024F Demand to Grow by Around 10% YoY.

Renesas (6723 JP) ANOTHER Clean-Up Block Trade as Hitachi/NEC Exit

By Travis Lundy

  • Last November saw the clean-up trade of INCJ getting out of Renesas Electronics (6723 JP). That was 180+mm shares, well over-subscribed.  
  • Today we have news Hitachi and NEC are getting out of their stakes. That’s 123mm shares in an Accelerated Block Offering of about US$2bn. I expect it will go well.
  • Recent gains in semiconductor stocks globally make this larger discount attractive. I expect a little heaviness but not much. There are index repercussions for international indices.

Renesas Electronics (6723 JP): Passives Will Need to Buy a LOT This Year

By Brian Freitas

Renesas Electronics Placement – Another US$2bn Deal, Momentum and Index Weights Should Help

By Sumeet Singh

  • Hitachi Ltd (6501 JP) and NEC Corp (6701 JP) aim to raise around US$2.1bn via a sell-down of  their stake in Renesas Electronics (6723 JP). 
  • The stock has seen a number of deals over the past few years with the most recent one being a cleanup in Nov 2023, which did well.
  • In this note, we will talk about the placement and run the deal through our ECM framework.

Alibaba’s Share Prices Are Lacking Further Catalysts After Jack Ma and Joe Tsai’s Stock Acquisition

By Fern Wang

  • Investor confidence toward the Chinese tech sector remains fragile after the government crackdown, and Alibaba Group was particularly hard hit due to Jack Ma’s previous conflicts with Chinese regulators.
  • Growth of its main eCommerce business is in question given the softening Chinese economy and intense competitions. Additionally, the growth of its cloud computing unit is also slowing down. 
  • China’s stock market stabilization fund is not likely to benefit Alibaba directly as it will be used to buy onshore stocks only. 

Good Entry Point as Tesla Stabilizes Its 4Q23 Asp and Profits Per EV

By Andrew Lu

  • Blended ASP of decline of 1% q/q in the past two quarters in 2H23, better than 3-10% q/q decline during 3Q22-2Q23, resulting in Tesla’s blended ASP decline to decelerate.
  • Due to Tesla’s cost cutting efforts with nice inventory control, we calculates profits/EV rebounded nicely by 21% q/q to US$3,490 per EV in 4Q23, much nicer than no profits.
  • Good improvement on its FSD Beta version 12.1.2 lately might become a pure profits/EV boost by incremental subscription of US$10,000-15,000 per EV or monthly fee by existing Tesla owners.

ASML Guides Q124 Down 27% QoQ, Shares Surge >8%. What Gives?

By William Keating

  • ASML reported Q423 revenues of €7.2 billion, up 7.5% QoQ and ~€100 million above the guided midpoint for the quarter.
  • ASML guided Q124 at €5.25 billion, down a very significant 27% sequentially. Also reiterated their previous forecast for 2024 revenues to be remain flat with 2023
  • ASML shares surged >8% in overnight trading. What’s going on here?

What SK Hynix’s Latest Results Indicate for PC & Mobile Makers into 2025E, Including Apple

By Vincent Fernando, CFA

  • SK Hynix results surpised consensus with a swing to positive operating profit; The company expects industry demand growth to exceed supply growth by a wide margin in 2024E.
  • Management suggests optimism not just for 2024E, but also for 2025E. 2025E is when a much larger positive demand impact from AI is expected as AI products will expand substantially.
  • SK Hynix comments regarding AI phones imply that consumers will most likely need to upgrade their phones, including iPhones, to take full advantage of AI capabilities

Huawei’s Latest Operating System Completely Breaks with Android

By Caixin Global

  • Huawei Technologies Co. Ltd. on Thursday launched the latest version of its own operating system — HarmonyOS NEXT, which will no longer support Android apps and can only accommodate apps specifically developed for it.
  • The Chinese telecom equipment giant said the Beta version for developers will be released in the second quarter, and the general version for consumers in the fourth quarter.
  • Insiders from Huawei expect the new Mate smartphones to be released in the second half with the HarmonyOS NEXT installed.

MicroStrategy: Initiation of Coverage – Revolutionary AI and Cloud Surge! Why MicroStrategy Could Be Your Next Goldmine in Tech Investment! – Major Drivers

By Baptista Research

  • This is our first report on MicroStrategy, a company at the forefront of enterprise analytics software.
  • In the third quarter of 2023, the company revealed notable developments in both its primary software ventures and its strategic Bitcoin investments.
  • The overall revenue for this period reached $129.5 million, marking a 3% year-over year increase, with a significant 16% rise in software license revenues, totaling $45 million.

Vanguard (5347.TT): 1Q24F Revenue Outlook Is Down QoQ; 2024F Demand to Grow by Around 10% YoY.

By Patrick Liao

  • The current market outlook is expected to improve, although the demand is still down in 1Q24F.
  • The 2Q24F revenue could potentially increase by a high single digits QoQ at least.
  • The demand is expected to grow by around 10% YoY in 2024F. This indicates a rebound, although not a strong one.

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Jan 26
0

Daily Brief Financials: Frasers Centrepoint Trust, Thai Credit Bank PCL, Mandala Multifinance, Newmark Property REIT, Nexus Mutual, iShares iBoxx High Yield Corpo, FinLab AG, Grupo Financiero Banorte SAB d, Bakkt, Sun Hung Kai Properties and more

By | Daily Briefs, Financials

In today’s briefing:

  • Frasers Centrepoint Trust Placement – Relative Large Dilution for Smallish Accretion
  • Thai Credit Bank IPO – Sentiment Isn’t the Best, but Valuations Aren’t Demanding
  • Mandala Multifinance (MFIN IJ): 13th Feb Change Of Control Vote
  • BWP Trust/Newmark Prop REIT: More Bunnings Under One Roof
  • DeFi Cover: An Emerging Sector to Watch
  • The Anonymous Meme Account Chronicling Credit Market Craziness
  • Heliad – Starting a new chapter
  • Banorte (GFNORTEO MM) – Triple Jeopardy in Play for 2024?
  • Bakkt Holdings, Inc. – Broadens Latin American Footprint While Entering Asia
  • HK CEO & Director Dealings (26 Jan 2024): Sun Hung Kai, Wuxi Bio, Sichuan Kelun-Bio, Wisdom Sports

Frasers Centrepoint Trust Placement – Relative Large Dilution for Smallish Accretion

By Sumeet Singh

  • Frasers Centrepoint Trust (FCT SP) aims to raise around US$152m in order to partly fund its purchase of an additional stake in NEX mall.
  • The company had purchased its initial stake in the property nearly a year ago.
  • In this note, we comment on the deal dynamics and run the deal through our ECM framework.

Thai Credit Bank IPO – Sentiment Isn’t the Best, but Valuations Aren’t Demanding

By Clarence Chu

  • Thai Credit Bank PCL (3674238Z TB) is looking to raise up to US$281m in its Thailand IPO.
  • TCB is a commercial bank that focuses on providing business loans to small and medium-size enterprises (SMEs), nano loans and micro credits to merchants, and home loans for individual customers.
  • In this note, we will look at the updates since, undertake a quick peer comparison, and share our thoughts on valuation.

Mandala Multifinance (MFIN IJ): 13th Feb Change Of Control Vote

By David Blennerhassett

  • On the 26th June 2023, MUFG (8306 JP) and 92.7%-held Adira Dinamika (ADMF IJ) entered into SPAs with key shareholders to acquire an 80.6% stake in Mandala Multifinance (MFIN IJ).
  • Although not explicit in various company announcements, MUFG/Adira are paying an estimated IDR 3,297/share. The SPAs are subject to regulatory approvals, primarily Indonesia’s OJK.
  • An EGM for MFIN’s shareholders has now been tabled for 13th Feb to vote on this change of control. Presumably, you wouldn’t progress to the EGM without OJK’s conditional approval. 

BWP Trust/Newmark Prop REIT: More Bunnings Under One Roof

By David Blennerhassett

  • BWP Trust (BWP AU), the owner of  75 properties (mostly Bunnings Warehouses), will merge with smaller landlord Newmark Property REIT (NPR AU), whose tenants also include Bunnings.
  • Via an off-market transaction, BWP is offering NPR unitholders 0.4 new BWP units for every NPR unit held, for an implied Offer price of $1.36/unit, a 43.1% premium to undisturbed.
  • The key condition is a 50.1% tendering threshold. 18.3% of NPR have given an irrevocable. This looks done; although NPR was listed at A$1.89/unit a little over two years ago.

DeFi Cover: An Emerging Sector to Watch

By Ocular

  • In our 2023 thematic outlook, we highlighted that on-chain insurance is a DeFi sub-sector that remains underdeveloped.
  • Today, DeFi has largely covered the services offered by TradFi, such as payments, lending and exchanges; as well as central, commercial and investment banking services.
  • There is also DeFi insurance (or more accurately termed as ‘DeFi cover,’ since the solutions provided are more discretionary than contractual; and may not be regulated), but presently it is not being offered as extensively as traditional insurance

The Anonymous Meme Account Chronicling Credit Market Craziness

By Odd Lots

  • The podcast will feature an anonymous source who will be disguised and have their voice altered, similar to investigative shows.
  • The guest, known as high yield Harry, runs social media accounts and a newsletter where they chronicle events in the credit markets.
  • The discussion will focus on the credit markets, investor demand, the impact of higher interest rates, and the players involved in making loans and deals.

This podcast is sourced from an online content aggregator through publicly available sources and is displayed below for general informational purposes only.

Heliad – Starting a new chapter

By Edison Investment Research

Heliad Equity Partners (HEP) and FinLab completed their merger in Q423. Heliad, the new combined entity, has seen positive developments across its three largest holdings recently. flatexDEGIRO, while still affected by the low trading activity across the market, in Q323 generated its highest quarterly EBITDA since the meme stock hype in 2021. Raisin has shown sustained strong growth in assets under management (AUM) and last year crossed the €50bn mark. Finally, Enpal more than doubled its revenue to €900m in 2023. All three are profitable and the value of Heliad’s stakes in these companies more than covers its current market cap and net liabilities. Heliad recently invested in AI21 Labs, which develops proprietary text-generating AI technology. Heliad’s shares are now available at a 48% discount to the last reported NAV.

Banorte (GFNORTEO MM) – Triple Jeopardy in Play for 2024?

By Victor Galliano

  • Banorte delivered a strong close to 2023, with ROE of close to 22% for the group, efficiency ratio of under 40%, healthy core capital adequacy and a low delinquency ratio
  • There were few amber warnings in the 4Q 2023 figures, with the exception of non-interest costs, especially those relating to IT and digital banking capex, and slightly on funding costs
  • Management’s 2024 guidance is, in our view, optimistic; we see potential erosion of the net interest margin, structurally higher opex – due mainly to digital competition – and worsening delinquency

Bakkt Holdings, Inc. – Broadens Latin American Footprint While Entering Asia

By Water Tower Research

  • In its continuing push in international markets, Bakkt announced on January 24 that it activated its crypto capabilities in several new international markets in Asia, Europe, North America, and South America with existing clients Hapi and SogoTrade.
  • Bakkt crypto trading is now live in Hong Kong and Singapore with SogoTrade.
  • Bakkt is excited about its entry into these markets given the rapid growth in their crypto economies. 

HK CEO & Director Dealings (26 Jan 2024): Sun Hung Kai, Wuxi Bio, Sichuan Kelun-Bio, Wisdom Sports

By David Blennerhassett

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Jan 26
0

Daily Brief Consumer: Fujitsu General, New Oriental Education & Techn, Patek Philippe , Hyundai Motor, Cello World Limited, Haier Smart Home , FirstCry, Whirlpool Corp, Norwegian Cruise Line Holdings, TSE Tokyo Price Index TOPIX and more

By | Consumer, Daily Briefs

In today’s briefing:

  • Fujitsu General (6755) – UGLY Forecast Change but Fujitsu Still Wants Out
  • New Oriental Education (EDU US/9901 HK):  A Better Business Model In The Post “Double Reduction” Era
  • Patek Philippe: Watch Perfection – [Business Breakdowns, EP.146]
  • Tracking Dividend Record Dates: Hyundai Motor Leads, Best Monitoring Channel Revealed
  • Cello World Ltd- Forensic Analysis
  • Haier Smart Home (6690 HK): Update Suggests Resilience to Sustain
  • Brainbees Solutions (FirstCry) IPO: The Bull Case
  • Whirlpool Corporation: Initiation of Coverage – Volume Victory: How Whirlpool’s Bold Moves Promise to Increase Its Market Share and Margins! – Major Drivers
  • Norwegian Cruise Line Holdings: Initiation of Coverage – An Unprecedented Financial U-Turn: How Norwegian Cruise Line is Transforming Its Future Fortunes! – Major Drivers
  • Size of Market Capitalization Will Make a Difference in Corporate Governance and Value Creation

Fujitsu General (6755) – UGLY Forecast Change but Fujitsu Still Wants Out

By Travis Lundy

  • Fujitsu General (6755 JP) came out with an ugly Q3 and ugly full-year forecast change. It appears there is lots of inventory-clearing in the channel in addition to macroeconomic headwinds. 
  • The split is a little difficult to discern, but the reason for channel-clearing makes a lot of sense from the distributor side. How long it lasts hard to know.
  • This creates the impetus for more cost-cutting/restructuring measures before a delayed v-bound to March 2025. Fujitsu STILL wants to sell. It may make extraordinary proposals to get it done.

New Oriental Education (EDU US/9901 HK):  A Better Business Model In The Post “Double Reduction” Era

By Steve Zhou, CFA

  • New Oriental Education & Techn (9901 HK) reported better than expected FY2Q24 results last night, with sales up 36% yoy and net profit up 183% yoy.
  • The company further guided a 42-45% sales growth in FY3Q24, well above market consensus. 
  • The visibility for the next 2-3 years is actually quite high post-“double reduction” policy.

Patek Philippe: Watch Perfection – [Business Breakdowns, EP.146]

By Business Breakdowns

  • Investment firms are using ten east to diversify their personal portfolios
  • Business Breakdowns is a series of conversations with investors and operators diving deep into a single business
  • John Reardon from Collectibility discusses what makes Patek Philippe such a special brand, including its history, craftsmanship, and exclusivity.

This podcast is sourced from an online content aggregator through publicly available sources and is displayed below for general informational purposes only.

Tracking Dividend Record Dates: Hyundai Motor Leads, Best Monitoring Channel Revealed

By Sanghyun Park

  • Yesterday, five companies disclosed dividend record dates and amounts. Hyundai Motor set record dates before March futures expired. Hyundai Motor offers single stock futures, presenting arbitrage opportunities.
  • Daily updates and monitoring of dividend arbitrage spread are crucial. Despite limited English support, KLCA webpage proves effective with prompt updates, simplifying the process.
  • KLCA webpage offers real-time updates and intuitive layout, ideal for dividend arbitrage trading preparation in the Korean market.

Cello World Ltd- Forensic Analysis

By Nitin Mangal

  • Cello World Limited (CW IN) is a renowned company in the consumer products market. The company primarily operates in houseware, stationary and moulded furniture industry.
  • The promoters recently undertook a major corp. restructuring post which several promoter entities were acquired by CWL. This has led to abnormally high ROCEs.
  • Other forensic takeaways pertain to RPT, poor cash management, mysterious sale proceeds of PPE, subsidiaries audit, etc.

Haier Smart Home (6690 HK): Update Suggests Resilience to Sustain

By Osbert Tang, CFA

  • Haier Smart Home (6690 HK)‘s management is confident about the FY24 outlook, with net profit growth of 12-13% can be sustained.  
  • Casarte will continue to lead with 10-15% revenue increase. There is room for further margin expansion led by overseas markets and process optimisation in the domestic market.
  • The plunge in real estate market does not have a material impact on sales and HSH is positive on replacement/upgrade demand. Its FY24F PER of 10.1x is undemanding.

Brainbees Solutions (FirstCry) IPO: The Bull Case

By Arun George

  • FirstCry (0172540D IN), India’s largest multi-channel retailing platform for mothers’, babies’ and kids’ products, has filed for a US$700 million IPO. 
  • The substantial shareholders are Softbank Group (9984 JP) Vision Fund (25.55% of shares), Mahindra & Mahindra (MM IN) (10.98%), Premji Invest (10.36%) and Supam Maheshwari – founder and CEO (5.95%).
  • The bull case rests on growing addressable markets, strong market positioning, robust GMV growth and strong organic growth.   

Whirlpool Corporation: Initiation of Coverage – Volume Victory: How Whirlpool’s Bold Moves Promise to Increase Its Market Share and Margins! – Major Drivers

By Baptista Research

  • This is our first report on electronics major, Whirlpool Corporation.
  • The company delivered a solid third quarter performance in a challenging macro environment, supported by satisfying North American growth and improved cost-management measures.
  • The company also successfully achieved $300 million in cost takeout actions, a performance that charts Whirlpool on course to deliver over $800 million of cost takeout actions in 2023.

Norwegian Cruise Line Holdings: Initiation of Coverage – An Unprecedented Financial U-Turn: How Norwegian Cruise Line is Transforming Its Future Fortunes! – Major Drivers

By Baptista Research

  • This is our first report on cruise operator, Norwegian Cruise Line Holdings.
  • The company achieved record revenue, meeting or exceeding the guidance on all key metrics.
  • In this report, we have carried out a fundamental analysis of the historical financial statements of the company.

Size of Market Capitalization Will Make a Difference in Corporate Governance and Value Creation

By Aki Matsumoto

  • It is premature to start discussions on stopping raising the hurdles of the Corporate Governance Code when Japan’s boards are not dominated by a majority of independent directors.
  • If listed companies are left to voluntarily improve their corporate governance practices, differences in corporate governance practice efforts among listed companies are expected to widen.
  • Companies with high percentage of foreign shareholders, primarily those with large market capitalization, are expected to continue to improve their corporate governance practices through engagement by overseas investors. vice versa

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