All Posts By

Smartkarma Daily Briefs

Jan 09
0

Daily Brief Indonesia: AAC Technologies Holdings and more

By | Daily Briefs, Indonesia

In today’s briefing:

  • Asia Monthly – 2024 Asia Credit Outlook And 2023 In Review – Lucror Analytics

Asia Monthly – 2024 Asia Credit Outlook And 2023 In Review – Lucror Analytics

By Charles Macgregor

In our inaugural Asian Monthly for 2024, we discuss the regional credit outlook for the year, with a focus on China, India, Indonesia as well as our favoured bonds. We also provide a review of 2023, including new Asian USD corporate bond issuances and defaults last year.

💡 Before it’s here, it’s on Smartkarma

Sign Up for Free

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

  • ✓ Unlimited Research Summaries
  • ✓ Personalised Alerts
  • ✓ Custom Watchlists
  • ✓ Company Data and News
  • ✓ Events & Webinars
Sign Up for Free


Jan 09
0

Daily Brief Credit: Asia Monthly – 2024 Asia Credit Outlook And 2023 In Review – Lucror Analytics and more

By | Credit, Daily Briefs

In today’s briefing:

  • Asia Monthly – 2024 Asia Credit Outlook And 2023 In Review – Lucror Analytics
  • Morning Views Asia: Adani Green Energy, Adani Ports & Special Economic Zone, ENN Natural Gas

Asia Monthly – 2024 Asia Credit Outlook And 2023 In Review – Lucror Analytics

By Charles Macgregor

In our inaugural Asian Monthly for 2024, we discuss the regional credit outlook for the year, with a focus on China, India, Indonesia as well as our favoured bonds. We also provide a review of 2023, including new Asian USD corporate bond issuances and defaults last year.

Morning Views Asia: Adani Green Energy, Adani Ports & Special Economic Zone, ENN Natural Gas

By Charles Macgregor

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.

💡 Before it’s here, it’s on Smartkarma

Sign Up for Free

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

  • ✓ Unlimited Research Summaries
  • ✓ Personalised Alerts
  • ✓ Custom Watchlists
  • ✓ Company Data and News
  • ✓ Events & Webinars
Sign Up for Free


Jan 09
0

Daily Brief Equity Bottom-Up: Fast Retailing (9983) | Q1 Preview – Slight Miss and more

By | Daily Briefs, Equity Bottom-Up

In today’s briefing:

  • Fast Retailing (9983) | Q1 Preview – Slight Miss
  • Power Finance – Largest NBFC in India, Direct Focus on Power Infrastructure, Steady, Strong Returns
  • Oriental Watch (398 HK): Ex-Dividend, Cash Levels To Mkt Cap at 60%, 6.8x PE, 14% Dividend Yield
  • Shift: High Conviction Review 2023
  • PDD (PDD US): Stopped Diversifying into ‘Local Life’ – A Rational Decision During Fast Growing
  • Japan Airlines: Seasonality Scrutiny Still Suggests Significant Upside to FY24 Guidance
  • Ferrotec (6890 JP): Return to Growth Led by Power Semiconductor Substrates
  • Bora Pharmaceuticals (6472 TT): Dual Growth Engines Set Stage for Accelerated Growth
  • Treatt – Termination of coverage
  • EMIS Group – Termination of coverage

Fast Retailing (9983) | Q1 Preview – Slight Miss

By Mark Chadwick

  • We anticipate a sluggish beginning to the fiscal year with 1Q8/24 earnings reflecting slower growth in Japan, China, and Southeast Asia.
  • Our forecast for 1Q24 operating profit stands at ¥130 billion, slightly below the consensus estimate of ¥138 billion. Assuming our estimates are accurate, we anticipate a slightly negative share-price reaction.
  • Our bearish stance on the stock persists, driven by the fact that it trades at a premium to our DCF and at a premium compared to global peers

Power Finance – Largest NBFC in India, Direct Focus on Power Infrastructure, Steady, Strong Returns

By Daniel Tabbush

  • Steady and strong profit is the key features of Power Finance and this is improving during FY24.
  • ROA expansion can continue to reach and possibly surpass the peaks of FY15 and FY16 with loan volume, contained costs, better credit metrics.
  • Recent quarterly data shows better loan volume and financial assets expanding more than financial liabilities, with credit costs in reverse.

Oriental Watch (398 HK): Ex-Dividend, Cash Levels To Mkt Cap at 60%, 6.8x PE, 14% Dividend Yield

By Sameer Taneja

  • Oriental Watch (398 HK)  went ex-dividend on the 4th of January and has settled at an appetizing valuation of 6.8x PE with 60% of the market cap in cash.
  • The market post-golden week and into the new year has been tepid.
  • We expect the company to continue paying out 100% of its profits as dividends, based on which the dividend yield is close to 14% at the current share price.

Shift: High Conviction Review 2023

By Shifara Samsudeen, ACMA, CGMA

  • Our conviction long Shift Inc (3697 JP) ‘s share price went up by more than 50% in 2023 driven by strong growth in top line alongside further improvement in margins.
  • The company’s margins fell in 2022 due to unprofitable projects, however, as these projects came to an end and the company being careful with projects, margins began to recover.
  • Shift’s share price has declined over the last few days which we think is temporary and offers an  opportunity to make an entry.  

PDD (PDD US): Stopped Diversifying into ‘Local Life’ – A Rational Decision During Fast Growing

By Ming Lu

  • PDD diversified into ‘local life’ businesses in December 2023, but stopped these businesses within two weeks.
  • We believe PDD’s low price advantage does not work in Meituan-like ‘local life’ and the top performer Meituan is hard to fight.
  • We believe the stock price has an upside of 88% for year end 2024.

Japan Airlines: Seasonality Scrutiny Still Suggests Significant Upside to FY24 Guidance

By Neil Glynn

  • We revisit FY24 prospects by highlighting that historical full service carrier (FSC) earnings seasonality suggests group EBIT guidance of ¥130bn is very conservative.
  • FSC FY24 EBIT guidance of ¥80bn implies only ¥9bn in 2H, 12% of 1H’s ¥71bn, whereas historically 2H has represented 74-83% of 1H. We model ¥59bn or 84% in 2H.
  • Our ¥176.5bn group EBIT for FY24 is 36% above guidance but also 27% above Visible Alpha consensus, largely due to lower costs, which position JAL strongly for the long-term.

Ferrotec (6890 JP): Return to Growth Led by Power Semiconductor Substrates

By Scott Foster

  • Ferrotec shares have dropped by a third since last July and are now selling at 8.2x EPS guidance and 0.6x book value.
  • Sales and operating should start to recover in 2H of FY Mar-24, led by power semiconductor substrates.
  • Buy for the upturn in the semiconductor cycle and capacity expansion in Japan, China and Malaysia. No significant damage from the Noto Peninsula earthquake has been reported.

Bora Pharmaceuticals (6472 TT): Dual Growth Engines Set Stage for Accelerated Growth

By Tina Banerjee

  • Through November 2023, Bora Pharmaceuticals (6472 TT) reported revenue of NT$13.2B, up 50% YoY. Going ahead, we are upbeat on both CDMO and pharmaceutical businesses of the company.
  • Bora’s foray into branded pharmaceutical market in U.S. should add a new revenue driver and improve margins. Generic portfolio should benefit from new launches amid better pricing environment.
  • Through the first nine months of 2023, Bora has added 13 new customers and 28 new products to its CDMO business. Both the numbers are way above full-year 2023 forecast.

Treatt – Termination of coverage

By Edison Investment Research

Edison Investment Research is terminating coverage on Kinarus Therapeutics (KNRS), Numis Corporation (NUM), EMIS Group (EMIS), Pixium Vision (PIX) and Treatt (TET). Please note you should no longer rely on any previous research or estimates for this company. All forecasts should now be considered redundant. Previously published reports can still be accessed via website

EMIS Group – Termination of coverage

By Edison Investment Research

Edison Investment Research is terminating coverage on Kinarus Therapeutics (KNRS), Numis Corporation (NUM), EMIS Group (EMIS), Pixium Vision (PIX) and Treatt (TET). Please note you should no longer rely on any previous research or estimates for this company. All forecasts should now be considered redundant. Previously published reports can still be accessed via website

💡 Before it’s here, it’s on Smartkarma

Sign Up for Free

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

  • ✓ Unlimited Research Summaries
  • ✓ Personalised Alerts
  • ✓ Custom Watchlists
  • ✓ Company Data and News
  • ✓ Events & Webinars
Sign Up for Free


Jan 09
0

Daily Brief Crypto: Crypto Moves #9 – Is It Too Obvious That 2024 is the Year of Crypto? and more

By | Crypto, Daily Briefs

In today’s briefing:

  • Crypto Moves #9 – Is It Too Obvious That 2024 is the Year of Crypto?

Crypto Moves #9 – Is It Too Obvious That 2024 is the Year of Crypto?

By Andreas Steno

  • Everyone is buzzing with anticipation, predicting a highly favorable year for crypto.
  • The general sentiment in the market suggests that 2024 will be a memorable year, drawing parallels to the positive environments witnessed in 2017 and 2021.
  • The crypto landscape was overshadowed by the dramatic collapse of FTX in November 2022, making 2022 end on a rather bleak note. 

💡 Before it’s here, it’s on Smartkarma

Sign Up for Free

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

  • ✓ Unlimited Research Summaries
  • ✓ Personalised Alerts
  • ✓ Custom Watchlists
  • ✓ Company Data and News
  • ✓ Events & Webinars
Sign Up for Free


Jan 09
0

Daily Brief Japan: Socionext, Fast Retailing, Inabata & Co, Shift Inc, Japan Airlines, Ferrotec Corp and more

By | Daily Briefs, Japan

In today’s briefing:

  • March 2024 Nikkei 225 Rebal:  Socionext, Disco, and a Consumer Goods Stock, Still
  • Fast Retailing (9983) | Q1 Preview – Slight Miss
  • Inabata & Co Placement – Should Come as a Surprise
  • Shift: High Conviction Review 2023
  • Japan Airlines: Seasonality Scrutiny Still Suggests Significant Upside to FY24 Guidance
  • Ferrotec (6890 JP): Return to Growth Led by Power Semiconductor Substrates

March 2024 Nikkei 225 Rebal:  Socionext, Disco, and a Consumer Goods Stock, Still

By Travis Lundy

  • No changes in the rankings since last time. Socionext (6526), Disco (6146), and a Consumer Goods stock (Zozo (3092) top-ranked, Ryohin Keikaku (7453) a better choice) are ADDs.
  • The DELETEs are still Takara Holdings (2531), Pacific Metals (5541), Sumitomo Osaka Cement (5232) with a dark horse candidate in Hitachi Zosen (7004) to replace Takara.
  • There is the upweight to Nitori (9843) but now less funkiness with Fast Retailing (9983). But it will continue being an interesting Nikkei 225 influence (for years to come).

Fast Retailing (9983) | Q1 Preview – Slight Miss

By Mark Chadwick

  • We anticipate a sluggish beginning to the fiscal year with 1Q8/24 earnings reflecting slower growth in Japan, China, and Southeast Asia.
  • Our forecast for 1Q24 operating profit stands at ¥130 billion, slightly below the consensus estimate of ¥138 billion. Assuming our estimates are accurate, we anticipate a slightly negative share-price reaction.
  • Our bearish stance on the stock persists, driven by the fact that it trades at a premium to our DCF and at a premium compared to global peers

Inabata & Co Placement – Should Come as a Surprise

By Ethan Aw

  • Sumitomo Chemical (4005 JP) and Mizuho Trust & Banking are looking to raise around US$180m through the sale of their stake in Inabata & Co (8098 JP).
  • The deal is a large one to digest, at 90 days of three month ADV and 15% of current mcap. 
  • In this note, we will talk about the deal dynamics and run the deal through our ECM framework.

Shift: High Conviction Review 2023

By Shifara Samsudeen, ACMA, CGMA

  • Our conviction long Shift Inc (3697 JP) ‘s share price went up by more than 50% in 2023 driven by strong growth in top line alongside further improvement in margins.
  • The company’s margins fell in 2022 due to unprofitable projects, however, as these projects came to an end and the company being careful with projects, margins began to recover.
  • Shift’s share price has declined over the last few days which we think is temporary and offers an  opportunity to make an entry.  

Japan Airlines: Seasonality Scrutiny Still Suggests Significant Upside to FY24 Guidance

By Neil Glynn

  • We revisit FY24 prospects by highlighting that historical full service carrier (FSC) earnings seasonality suggests group EBIT guidance of ¥130bn is very conservative.
  • FSC FY24 EBIT guidance of ¥80bn implies only ¥9bn in 2H, 12% of 1H’s ¥71bn, whereas historically 2H has represented 74-83% of 1H. We model ¥59bn or 84% in 2H.
  • Our ¥176.5bn group EBIT for FY24 is 36% above guidance but also 27% above Visible Alpha consensus, largely due to lower costs, which position JAL strongly for the long-term.

Ferrotec (6890 JP): Return to Growth Led by Power Semiconductor Substrates

By Scott Foster

  • Ferrotec shares have dropped by a third since last July and are now selling at 8.2x EPS guidance and 0.6x book value.
  • Sales and operating should start to recover in 2H of FY Mar-24, led by power semiconductor substrates.
  • Buy for the upturn in the semiconductor cycle and capacity expansion in Japan, China and Malaysia. No significant damage from the Noto Peninsula earthquake has been reported.

💡 Before it’s here, it’s on Smartkarma

Sign Up for Free

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

  • ✓ Unlimited Research Summaries
  • ✓ Personalised Alerts
  • ✓ Custom Watchlists
  • ✓ Company Data and News
  • ✓ Events & Webinars
Sign Up for Free


Jan 09
0

Daily Brief Event-Driven: Event Trading on KOSPI Transfer Listings: Notable Post-Listing Price Patterns and more

By | Daily Briefs, Event-Driven

In today’s briefing:

  • Event Trading on KOSPI Transfer Listings: Notable Post-Listing Price Patterns
  • March 2024 Nikkei 225 Rebal:  Socionext, Disco, and a Consumer Goods Stock, Still
  • Hang Seng Index (HSI) Rebalance Preview: Inclusion Candidates for March
  • Hollysys (HOLI US): 8th Feb Shareholder Vote. Dazheng Fails The Sniff Test
  • Quiddity Leaderboard BSE/​​​​SENSEX Jun 24: Wipro SENSEX Deletion Possible
  • An Early Look at the Potential KOSPI200 Rebalance Candidates in June 2024
  • EQD | S&P/ASX200 Going Down… (Approaching Support to Go LONG)

Event Trading on KOSPI Transfer Listings: Notable Post-Listing Price Patterns

By Sanghyun Park

  • In the past year, four KOSPI transfer listings showed similar patterns, with pre-listing price increases and substantial corrections in the first five trading days post-listing.
  • ChatGPTAmid a sideways market and a 54.2% YoY growth in the local ETF market last year, the impact of passive flow imbalances may have been more significant than before.
  • A key factor is the short-selling ban. Posco DX’s SSFs showed significant backwardation pre-KOSPI listing, concentrating proactive short positions, requiring caution in adjusting pre-listing short position costs.

March 2024 Nikkei 225 Rebal:  Socionext, Disco, and a Consumer Goods Stock, Still

By Travis Lundy

  • No changes in the rankings since last time. Socionext (6526), Disco (6146), and a Consumer Goods stock (Zozo (3092) top-ranked, Ryohin Keikaku (7453) a better choice) are ADDs.
  • The DELETEs are still Takara Holdings (2531), Pacific Metals (5541), Sumitomo Osaka Cement (5232) with a dark horse candidate in Hitachi Zosen (7004) to replace Takara.
  • There is the upweight to Nitori (9843) but now less funkiness with Fast Retailing (9983). But it will continue being an interesting Nikkei 225 influence (for years to come).

Hang Seng Index (HSI) Rebalance Preview: Inclusion Candidates for March

By Brian Freitas

  • At 82 index constituents currently, we expect the index committee to progress towards reaching 100 constituents. We are (highly) unlikely to reach the target this calendar year though.
  • We highlight nine stocks that have a decent chance at being added to the index over the next couple of rebalances. All companies are profitable and meet inclusion requirements.
  • The market consultation on proposed changes to the Hang Seng Industry Classification System (HSICS) could lead to more inclusions from the Information Technology sector from the June rebalance.

Hollysys (HOLI US): 8th Feb Shareholder Vote. Dazheng Fails The Sniff Test

By David Blennerhassett

  • Hollysys Automation Technologies (HOLI US) has announced that an EGM is scheduled for February 8th to vote on the merger agreement with Ascendent Capital Partners. 
  • The Offer price remains at US$26.50/ADS. The shareholder approval required is simple majority. Regulatory approvals include NDRC, MoC and SAFE. Maybe a national security review.
  • And the Dazheng consortium? Apparently insufficient information as to its financing sources and consortium structure ruled it out. Separately, the SGM to spill the board has now been called off. 

Quiddity Leaderboard BSE/​​​​SENSEX Jun 24: Wipro SENSEX Deletion Possible

By Janaghan Jeyakumar, CFA

  • In this insight, we take a look at the Potential ADDs/DELs for the BSE SENSEX, 100, and 200 Indices in the June 2024 index rebal event.
  • As things stand, there could be one index change for the SENSEX index. 
  • There could be four ADDs/DELs for the BSE 100 index and four ADDs/DELs for the BSE 200 index.

An Early Look at the Potential KOSPI200 Rebalance Candidates in June 2024

By Douglas Kim

  • We discuss the potential KOSPI200 rebalance candidates in June 2024. In the past several years, there have been a lot of alpha generating stocks arising from the KOSPI200 rebalances.
  • The following companies are likely candidates which could be included in KOSPI200 rebalance in June 2024, including Posco DX, Doosan Robotics, Hyosung Heavy Industries Corp, and DS Dansuk. 
  • For the potential exclusion candidates, we included 10 stocks that are in the bottom 5% market caps in KOSPI200.

EQD | S&P/ASX200 Going Down… (Approaching Support to Go LONG)

By Nico Rosti

  • The S&P/ASX 200 INDEX is oversold, currently down for 2 weeks (actually the second week down has just started), it has good chances to bounce this week.
  • The best set up would be: index closing the week down at the end of this week: GO LONG at Close (or at any high probability support level reached intra-week).
  • A reprise of the rally should last into the end of January (or longer).

💡 Before it’s here, it’s on Smartkarma

Sign Up for Free

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

  • ✓ Unlimited Research Summaries
  • ✓ Personalised Alerts
  • ✓ Custom Watchlists
  • ✓ Company Data and News
  • ✓ Events & Webinars
Sign Up for Free


Jan 09
0

Daily Brief China: Oriental Watch, Alibaba (ADR), PDD Holdings, MIXUE Group, S.F. Holding, Tencent, IVF Hospital Management Group Limited, AAC Technologies Holdings, Adani Green Energy and more

By | China, Daily Briefs

In today’s briefing:

  • Oriental Watch (398 HK): Ex-Dividend, Cash Levels To Mkt Cap at 60%, 6.8x PE, 14% Dividend Yield
  • Aequitas HK IPOs + Placements Broker Performance 2023
  • PDD (PDD US): Stopped Diversifying into ‘Local Life’ – A Rational Decision During Fast Growing
  • MIXUE Group Pre-IPO Tearsheet
  • Kerry Logistics Network to Pay Dividend in Form of KEX Shares | SF Holding’s Role & Objectives
  • Aequitas 2023 IPOs and Placements Performance Review – IPOs Forming a Low Base, Placements Pick Up
  • Pre-IPO IVF Hospital Management Group – The Industry, the Business and the Risks Behind
  • Asia Monthly – 2024 Asia Credit Outlook And 2023 In Review – Lucror Analytics
  • Morning Views Asia: Adani Green Energy, Adani Ports & Special Economic Zone, ENN Natural Gas

Oriental Watch (398 HK): Ex-Dividend, Cash Levels To Mkt Cap at 60%, 6.8x PE, 14% Dividend Yield

By Sameer Taneja

  • Oriental Watch (398 HK)  went ex-dividend on the 4th of January and has settled at an appetizing valuation of 6.8x PE with 60% of the market cap in cash.
  • The market post-golden week and into the new year has been tepid.
  • We expect the company to continue paying out 100% of its profits as dividends, based on which the dividend yield is close to 14% at the current share price.

Aequitas HK IPOs + Placements Broker Performance 2023

By Ethan Aw

  • In this note, we will take a look at broker performance for HK IPOs and placements in 2023. 
  • The following dataset includes all HK IPOs and placements above US$100m, which amounted to a total of 27 deals.
  • The deals you see in this note are based on our historical IPO and placement tracker. Feel free to drop us a message for additional information.

PDD (PDD US): Stopped Diversifying into ‘Local Life’ – A Rational Decision During Fast Growing

By Ming Lu

  • PDD diversified into ‘local life’ businesses in December 2023, but stopped these businesses within two weeks.
  • We believe PDD’s low price advantage does not work in Meituan-like ‘local life’ and the top performer Meituan is hard to fight.
  • We believe the stock price has an upside of 88% for year end 2024.

MIXUE Group Pre-IPO Tearsheet

By Clarence Chu

  • MIXUE Group (1860056D CH) is looking to raise about US$1bn in its upcoming Hong Kong IPO. The bookrunners on the deal are Bank of America, Goldman Sachs, and UBS.
  • MIXUE Group (MIXUE) is a freshly-made drinks company providing affordable products to consumers, including freshly-made fruit drinks, tea, ice cream and coffee, typically priced at around one USD per item.
  • The firm is the largest domestically freshly-made drinks company in terms of number of stores as of Sept 23, and number of cups sold during 9M23, according to CIC.

Kerry Logistics Network to Pay Dividend in Form of KEX Shares | SF Holding’s Role & Objectives

By Daniel Hellberg

  • Kerry Logistics Network will pay a special dividend in the form of KEX shares
  • This will trigger a general offer by SF Holding for all KEX shares at THB 5.50
  • Why is SF Holding doing this, & how could its int’l express business change?

Aequitas 2023 IPOs and Placements Performance Review – IPOs Forming a Low Base, Placements Pick Up

By Sumeet Singh

  • 2023 marked our eighth year covering Equity Capital Markets in Asia Pacific. In 2023, IPOs didn’t pick up much from the low base of 2022  while placements showed upward momentum.
  • We ended 2023 with an accuracy rate of 73.7% across 57 IPOs that we covered and 79.3% across 115 placements.
  • For those not familiar with our coverage, we aim to cover all IPOs and placements with a minimum deal size of US$100m across Asia-Pacific, including China ADRs.

Pre-IPO IVF Hospital Management Group – The Industry, the Business and the Risks Behind

By Xinyao (Criss) Wang

  • IVF Hospital’s profitability and growth momentum look good at this stage, but the Company is still in early stage of development, with obvious gap with leading players in the industry.
  • IVF penetration rate in China is not high and the rate of improvement is slow. With public hospitals accounting for over 90% market share, IVF Hospital’s growth space is limited.
  • Licensing is a big barrier for development, slowing down the pace of nationwide expansion. The “good story” should be based on internationalization, which is actually the weakness of IVF Hospital.

Asia Monthly – 2024 Asia Credit Outlook And 2023 In Review – Lucror Analytics

By Charles Macgregor

In our inaugural Asian Monthly for 2024, we discuss the regional credit outlook for the year, with a focus on China, India, Indonesia as well as our favoured bonds. We also provide a review of 2023, including new Asian USD corporate bond issuances and defaults last year.

Morning Views Asia: Adani Green Energy, Adani Ports & Special Economic Zone, ENN Natural Gas

By Charles Macgregor

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.

💡 Before it’s here, it’s on Smartkarma

Sign Up for Free

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

  • ✓ Unlimited Research Summaries
  • ✓ Personalised Alerts
  • ✓ Custom Watchlists
  • ✓ Company Data and News
  • ✓ Events & Webinars
Sign Up for Free


Jan 09
0

Daily Brief India: Ola Electric, Wipro Ltd, Power Finance, AAC Technologies Holdings, Adani Green Energy and more

By | Daily Briefs, India

In today’s briefing:

  • Ola Electric Mobility Pre-IPO Tearsheet
  • Quiddity Leaderboard BSE/​​​​SENSEX Jun 24: Wipro SENSEX Deletion Possible
  • Ola Electric IPO: The Bear Case
  • Power Finance – Largest NBFC in India, Direct Focus on Power Infrastructure, Steady, Strong Returns
  • Asia Monthly – 2024 Asia Credit Outlook And 2023 In Review – Lucror Analytics
  • Morning Views Asia: Adani Green Energy, Adani Ports & Special Economic Zone, ENN Natural Gas

Ola Electric Mobility Pre-IPO Tearsheet

By Clarence Chu

  • Ola Electric (1700674D IN) is looking to raise about US$1bn in its upcoming India IPO. The bookrunners are Kotak, Citigroup, BofA, Goldman Sachs, Axis, ICICI Sec, SBI Caps, BoB Caps.
  • Ola Electric Mobility is a vertically integrated pure EV player in India with manufacturing capabilities for EVs and EV components, including cells.
  • The firm manufactures EVs and certain core EV components like battery packs, motors and vehicle frames.

Quiddity Leaderboard BSE/​​​​SENSEX Jun 24: Wipro SENSEX Deletion Possible

By Janaghan Jeyakumar, CFA

  • In this insight, we take a look at the Potential ADDs/DELs for the BSE SENSEX, 100, and 200 Indices in the June 2024 index rebal event.
  • As things stand, there could be one index change for the SENSEX index. 
  • There could be four ADDs/DELs for the BSE 100 index and four ADDs/DELs for the BSE 200 index.

Ola Electric IPO: The Bear Case

By Arun George

  • Ola Electric (1700674D IN), the largest Indian electric two-wheel vehicles (E2W) player, is seeking US$660 million from a primary raise along with a secondary raise at a US$7-8 billion valuation.
  • In Ola Electric IPO: The Bull Case, we highlighted the key elements of the bull case. In this note, we outline the bear case.
  • The bear case rests on high R&D capitalization, ongoing losses, high attrition, declining contract liabilities, cash burn and deteriorating balance sheet. 

Power Finance – Largest NBFC in India, Direct Focus on Power Infrastructure, Steady, Strong Returns

By Daniel Tabbush

  • Steady and strong profit is the key features of Power Finance and this is improving during FY24.
  • ROA expansion can continue to reach and possibly surpass the peaks of FY15 and FY16 with loan volume, contained costs, better credit metrics.
  • Recent quarterly data shows better loan volume and financial assets expanding more than financial liabilities, with credit costs in reverse.

Asia Monthly – 2024 Asia Credit Outlook And 2023 In Review – Lucror Analytics

By Charles Macgregor

In our inaugural Asian Monthly for 2024, we discuss the regional credit outlook for the year, with a focus on China, India, Indonesia as well as our favoured bonds. We also provide a review of 2023, including new Asian USD corporate bond issuances and defaults last year.

Morning Views Asia: Adani Green Energy, Adani Ports & Special Economic Zone, ENN Natural Gas

By Charles Macgregor

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.

💡 Before it’s here, it’s on Smartkarma

Sign Up for Free

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

  • ✓ Unlimited Research Summaries
  • ✓ Personalised Alerts
  • ✓ Custom Watchlists
  • ✓ Company Data and News
  • ✓ Events & Webinars
Sign Up for Free


Jan 09
0

Daily Brief Macro: EM by EM #37: The Taiwan election & the Trade war and more

By | Daily Briefs, Macro

In today’s briefing:

  • EM by EM #37: The Taiwan election & the Trade war
  • Portfolio Watch: Chasing ships and fading narratives
  • A Pause That Refreshes the Uptrend
  • U.S. Debt Watch: Biden Lost $17B the First Day of 2024
  • Positioning Watch – Risk aversion is back?
  • Steno Signals #81 – Fed member promises that QT is effectively already over
  • USD-flation Watch: Still not softening as much as Europe
  • CrossASEAN Ground Zero – GoTo’s Sustainability Verified, 2W EVs, and the Stormy Year Ahead
  • Scandi-flation Watch: Finally a bit of respite?
  • US Employment Data Confirms a Weakening Economy

EM by EM #37: The Taiwan election & the Trade war

By Emil Moller

  • A victory for Lai in the upcoming election has the potential to significantly elevate geopolitical risks.
  • Should Taipei fail to maintain a satisfactory relationship with Beijing threats of retaliation will fuel derisking going forwardThe Taiwan election could reignite another round of cold trade sanctions between the United States and China.
  • Given the current hawkishness of the Biden administration, it’s unlikely that this stance will be softened in the upcoming U.S. election.

Portfolio Watch: Chasing ships and fading narratives

By Emil Moller

  • Hello everybody, and welcome back to our weekly Portfolio Watch!

  • The Hamas attack on October 7th coincided with a material repricing and a crash in oil prices, marking the peak in inflation expectations and the subsequent collapse of oil prices as 2023 came to an end.

  • Given our contrarian nature, we were far from convinced by this swift market move. We believed it was only a matter of time before reality would set in, and it appears that 2024 has indeed brought a harsh awakening for complacent optimists.

A Pause That Refreshes the Uptrend

By Cam Hui

  • The stock market is poised for a period of consolidation or pullback after a powerful breadth thrust.
  • We remain bullish on equities as such episodes of strong price momentum have usually led to higher prices 6–12 months ahead.
  • In the short term, we advise against traders trying to short this market as downside risk is probably limited.

U.S. Debt Watch: Biden Lost $17B the First Day of 2024

By Anne Sandager

  • The U.S is at risk of a partial government shutdown beginning Jan. 19th of departments responsible for Agriculture, Energy/Water, Military Construction/Veterans Affairs and Transportation.
  • However, investors need not be overly concerned. Both Democratic and Republican leadership are incentivized to get a deal done, so even if a partial shutdown were to commence, it will be short lived with little impact on markets. 
  • Republicans are keen on securing funding for the U.S-Mexico border and improve their image as a party that can actually govern. Democrats, meanwhile, need to eliminate the 1% across-the-board cut to non-discretionary spending imposed on Jan. 1st. These factors provide ample motivation for lawmakers to get spending bills done.

Positioning Watch – Risk aversion is back?

By Andreas Steno

  • The latter half of 2023 was all about the soft (perfect) landing narrative, which made markets party like there was no tomorrow.
  • It almost looked like people forgot about risks, but positioning data has turned a bit at the end of December / start of January, which hints at a risk aversion comeback.
  • Could 2024 be the year when asset prices are no longer determined based on interest rates alone?

Steno Signals #81 – Fed member promises that QT is effectively already over

By Andreas Steno

  • Quote of the week:“So, given the rapid decline of the ON RRP, I think it’s appropriate to consider the parameters that will guide a decision to slow the runoff of our assets. In my view, we should slow the pace of runoff as ON RRP balances approach a low level.”– Lorie Logan, FOMC member at the annual meetings of the International Banking, Economics and Finance Association and the American Economic Association.

  • The above quote was delivered on Friday in a speech by Dallas Fed president Lorie Logan and it may prove to be the most important quote by a central banker in 2024 so far.

  • Effectively, the quote is a promise that QT is already history as the impact of Fed policy on liquidity / bank reserves will remain neutral to slightly positive from here, which is essentially what we have told clients for a while now. 

USD-flation Watch: Still not softening as much as Europe

By Andreas Steno

  • The inflation release on Thursday is the most important release of the week and we find consensus to be decently aligned with the underlying trends in US inflation.
  • Core inflation is trending around 0.3% MoM in the US and we see no reason for a sharp change in that trend given our price observations and models, and we only see a minor hawkish tilt in our models compared to consensus, but expect the MoM core inflation to print accurately above 0.3%.
  • The consensus change for the MoM core inflation is very close to 0.25% given the expectation of 3.8% YoY inflation.

CrossASEAN Ground Zero – GoTo’s Sustainability Verified, 2W EVs, and the Stormy Year Ahead

By Angus Mackintosh

  • CrossASEAN Ground Zero is a new thematic weekly product that will focus on key Southeast Asian digital themes and technology trends with a core focus on Indonesia. 
  • This week is focused on GoTo’s sustainability credentials and the recent scientific validation of its emission targets. 
  • 2024 will also see a ramp-up of Indonesia’s 2W EV charging infrastructure to power growth in numbers. We also look at key themes in 2024 for the digital economy.

Scandi-flation Watch: Finally a bit of respite?

By Andreas Steno

  • Welcome to our Scandi inflation watch.
  • Based on public demand, we will release our SEK and NOK inflation views on a running basis as well.
  • December is typically a seasonally weak inflation month in Norway with declines in Clothing and Footwear prices, Food prices- and health prices.

US Employment Data Confirms a Weakening Economy

By Rikki Malik

  • The December US Employment report shows a weaker outlook than the headline suggests.  
  • A loss of over 1.5 million full-time jobs in December.
  • Excluding government jobs, an exceptionally low number of new full-time jobs were created over the last year.

💡 Before it’s here, it’s on Smartkarma

Sign Up for Free

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

  • ✓ Unlimited Research Summaries
  • ✓ Personalised Alerts
  • ✓ Custom Watchlists
  • ✓ Company Data and News
  • ✓ Events & Webinars
Sign Up for Free


Jan 08
0

Daily Brief Industrials: Inabata & Co, Comfortdelgro Corp, Millennium Services Group Ltd and more

By | Daily Briefs, Industrials

In today’s briefing:

  • Inabata & Co (8098) – LARGE Equity Secondary Offering by Sumitomo Chemical
  • Comfortdelgro (CD): The Chinese Is Back
  • Millennium Services Group Ltd – Bid Implies an EV/EBITDA Multiple In-Line with Peers

Inabata & Co (8098) – LARGE Equity Secondary Offering by Sumitomo Chemical

By Travis Lundy

  • On Friday after the close, Inabata & Co (8098 JP) announced Sumitomo Chemical (4005 JP) would sell down a large stake in a ~$200mm secondary equity offering. 
  • Mizuho Bank’s Retirement Benefit Trust account sells down too. Sumitomo Chem will keep 10+% and other crossholders remain. 
  • This is “big” at 80 days of ADV with limited early index demand, but a 10% fall would make this cheap enough to buy vs Peers.

Comfortdelgro (CD): The Chinese Is Back

By Henry Soediarko

  • The share price has increased by around 20% since mid-last year.
  • A new revenue stream from the booking fee through the Zig app and calls that, albeit small, it was never possible to share upside with cabbies before. 
  • Extension from 15 days to 30 days visa-free for Chinese tourists to come to Singapore on early 2024. 

Millennium Services Group Ltd – Bid Implies an EV/EBITDA Multiple In-Line with Peers

By Research as a Service (RaaS)

  • Human services company Millennium Services Group Ltd (ASX:MIL) has entered a Scheme of Arrangement with an entity associated with Softbank Robotics Singapore for the acquisition of 100% of shares at $1.15/share cash.
  • Shareholders also have the option to accept a mix of cash and scrip in the new unlisted entity, with certain management committing not less than a total of 30% for this option.
  • The bid price represents an 89% premium to the last RaaS update note (October 23) and 360% premium from July 1, 2023. 

💡 Before it’s here, it’s on Smartkarma

Sign Up for Free

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

  • ✓ Unlimited Research Summaries
  • ✓ Personalised Alerts
  • ✓ Custom Watchlists
  • ✓ Company Data and News
  • ✓ Events & Webinars
Sign Up for Free