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Smartkarma Daily Briefs

Jan 04
0

Daily Brief Consumer: BYD, Amorepacific Corp, Kweichow Moutai, TSE Tokyo Price Index TOPIX and more

By | Consumer, Daily Briefs

In today’s briefing:

  • BYD (1211 HK): Sales Volume Up by 62% in 2023
  • Korean Holdcos Vs Opcos Gap Trading Opportunities in 1Q 2024
  • Kweichow Moutai (600519 CH):  Stability Amidst Overall Industry Weakness
  • For Increasing TOBs and MBOs, Managers Should Be Aware of Listing Costs and PE Market Should Expand

BYD (1211 HK): Sales Volume Up by 62% in 2023

By Ming Lu

  • BYD’s sales volume grew by 45% YoY in December, higher than 31% YoY in November.
  • For the whole year 2023, BYD’s total sales volume rose by 62%.
  • We conclude the stock has an upside of 74% for 2024.

Korean Holdcos Vs Opcos Gap Trading Opportunities in 1Q 2024

By Douglas Kim

  • In this insight, we highlight the recent pricing gap divergences of the major Korean holdcos and opcos which could provide trading opportunities in 1Q 2024. 
  • We highlight 38 pair trades that involve Korean holdcos and opcos.
  • Of the 38 pair trades, 26 of them involved holdcos outperforming opcos in the past six months and 12 of them involved opcos outperforming holdcos in the same period.

Kweichow Moutai (600519 CH):  Stability Amidst Overall Industry Weakness

By Steve Zhou, CFA

  • Kweichow Moutai (600519 CH) announced the preliminary result for FY23, with sales and net profit both up 17% yoy. 
  • The overall weak consumer sentiment in China has not spared the Chinese liquor sector, as overall Chinese liquor demand has been lukewarm. 
  • The current valuation for Moutai has become very attractive, and even if no rerating, the return is likely to be around 15% through earnings growth plus 2% from dividend yield.

For Increasing TOBs and MBOs, Managers Should Be Aware of Listing Costs and PE Market Should Expand

By Aki Matsumoto

  • Companies with large shareholders’ interests of 20% or more account for 779 of 1,784 companies in Metrical Universe. A number of companies are investment targets as TOB  and MBO candidates.
  • Companies with large shareholder influence may feel distanced from general corporate governance practices, but their interests are aligned with those of minority shareholders in terms of shareholder-oriented management.
  • For quality markets, it’s necessary to reduce the number of companies by increasing TOBs and MBOs, and to do so, managers need to be aware of the cost of listing.

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Jan 04
0

Daily Brief Financials: Jio Financial Services, HKEX, Bank Of Baroda, Lippo Malls Indonesia Retail Trust and more

By | Daily Briefs, Financials

In today’s briefing:

  • NIFTY NEXT50 Index Rebalance Preview: Potential Adds Skyrocketing
  • HKEX – Worsening Property Transactions, Underscores Ailments for Hong Kong
  • Bank Of Baroda (BOB IN): Initiating Coverage – Best Value Bet Among Indian Banks
  • Morning Views Asia: Indika Energy, Lippo Malls Indonesia Retail Trust, SK Hynix, Vedanta Resources

NIFTY NEXT50 Index Rebalance Preview: Potential Adds Skyrocketing

By Brian Freitas

  • Nearing the end of the review period, we see 6 potential changes for the NSE Nifty Next 50 Index (NIFTYJR INDEX) using the current index methodology.
  • Estimated one-way turnover is 13.9% resulting in a one-way trade of INR 26.9bn. There will be more than 1.5x ADV to sell on nearly all deletes.
  • The potential adds have outperformed the potential deletes by 35% over the last two months and some stocks are looking extremely frothy.

HKEX – Worsening Property Transactions, Underscores Ailments for Hong Kong

By Daniel Tabbush

  • HKEX (388 HK) outlook has been withering for some time, and new data on property transactions, shows that this remains weak.
  • SGX (SGX SP) in a less volatile geopolitical financial center, has a much lower market capitalization while its earnings outlook is far stronger.
  • Two major differences between these two entities is their ROE and ROA, although the former may be more relevant. SGX (SGX SP) has an ROE that is nearly 50% higher.

Bank Of Baroda (BOB IN): Initiating Coverage – Best Value Bet Among Indian Banks

By Raj Saya, CA, CFA

  • Bank Of Baroda (BOB IN)  has become the second-best PSU bank in India after SBIN, in terms of improvement in asset quality and profitability.
  • Medium-Term ROE Forecast 16% to 18%; ROA >1% consistently; Asset Quality problems receding; Strategy is to diversify loan book towards retail further and focus on improving efficiencies
  • Despite the recent rally, P/BV is cheap at 0.9x FY25e for high teen ROE business. BOB can easily re-rate to P/BV of 1.3x FY25e in the near term

Morning Views Asia: Indika Energy, Lippo Malls Indonesia Retail Trust, SK Hynix, Vedanta Resources

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.

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Jan 04
0

Most Read: WuXi XDC Cayman , Livent, BYD, Shriram Finance , Celltrion Pharm, Posco International Corporation, Amorepacific Corp, Douzone Bizon and more

By | Daily Briefs, Most Read

In today’s briefing:

  • Allkem+Livent=Arcadium : Expected Index Flows
  • HSCI Index Rebalance Preview and Stock Connect: Potential Changes in March
  • Allkem + Livent = Arcadium : Updated Expected Index Flows
  • BYD (1211 HK): Sales Volume Up by 62% in 2023
  • NIFTY50 Index Rebalance Preview: One Change, Maybe Two, Low Probability of Three
  • Celltrion Pharm (068760 KS) Looks Frothy
  • End of Mandatory Lock-Up Periods for 41 Companies in Korea in January 2024
  • Korean Holdcos Vs Opcos Gap Trading Opportunities in 1Q 2024
  • KRX New Deal Index Rebalance Preview: Changes with Flow & Impact
  • Ohayo Japan | Stocks Tumble; Japan Resilient in Face of Tragedy

Allkem+Livent=Arcadium : Expected Index Flows

By Travis Lundy

  • Yesterday during the day, Allkem Ltd (AKE AU) shareholders approved the Scheme and Livent (LTHM US) shareholders approved the merger. The deal is done. Allkem last trades 21 Dec.
  • NEWCO starts trading 4 January in the US but the Arcadium Lithium CDIs start trading 22 Dec in Australia. S&P/ASX announced they will replace Allkem in the ASX200.
  • But I have been asked for a breakdown of flows and timing again, so I have put it into a handy table which I hope makes it less confusing.

HSCI Index Rebalance Preview and Stock Connect: Potential Changes in March

By Brian Freitas

  • We see 30 potential adds (including plenty of new listings) and 28 potential deletes (on market cap and liquidity) for the Hang Seng Composite Index in March.
  • We expect 26 stocks to be added to Southbound Stock Connect following the rebalance while 25 stocks could be deleted from the trading link and become Sell-only.
  • There are stocks that have a very high percentage of holdings via Stock Connect and there could be some unwinding prior to the stocks becoming Sell-only.

Allkem + Livent = Arcadium : Updated Expected Index Flows

By Travis Lundy

  • Allkem Ltd (AKE AU) saw its last day of trading on 21 December. There was large volume at the close as one major index provider gave it the boot. 
  • Another delayed their treatment at the last minute, and eliminated a cross-flow.
  • But there is still a lot of net buy flow tomorrow (3 Jan) and the next day in the US. Perhaps more than I expected. 

BYD (1211 HK): Sales Volume Up by 62% in 2023

By Ming Lu

  • BYD’s sales volume grew by 45% YoY in December, higher than 31% YoY in November.
  • For the whole year 2023, BYD’s total sales volume rose by 62%.
  • We conclude the stock has an upside of 74% for 2024.

NIFTY50 Index Rebalance Preview: One Change, Maybe Two, Low Probability of Three

By Brian Freitas

Celltrion Pharm (068760 KS) Looks Frothy

By David Blennerhassett

End of Mandatory Lock-Up Periods for 41 Companies in Korea in January 2024

By Douglas Kim

  • We discuss the end of the mandatory lock-up periods for 41 stocks in Korea in January 2024, among which 4 are in KOSPI and 37 are in KOSDAQ.
  • These 41 stocks on average could be subject to further selling pressures in January and could underperform relative to the market.
  • Among these 41 stocks, top five market cap stocks include Posco International, Doosan Robotics, Rainbow Robotics, Qualitas Semiconductor, and PhilEnergy.

Korean Holdcos Vs Opcos Gap Trading Opportunities in 1Q 2024

By Douglas Kim

  • In this insight, we highlight the recent pricing gap divergences of the major Korean holdcos and opcos which could provide trading opportunities in 1Q 2024. 
  • We highlight 38 pair trades that involve Korean holdcos and opcos.
  • Of the 38 pair trades, 26 of them involved holdcos outperforming opcos in the past six months and 12 of them involved opcos outperforming holdcos in the same period.

KRX New Deal Index Rebalance Preview: Changes with Flow & Impact

By Brian Freitas

Ohayo Japan | Stocks Tumble; Japan Resilient in Face of Tragedy

By Mark Chadwick

  • Overseas: SPX -0.8%, Nasdaq -1.2% extending losses for second day; Apple downgraded. 10Y yields above 4%. 
  • Today: NKY Futs -1.2% v cash. JPY143; Expect weak start to year’s trading. Oil prices up +3%
  • Japan: Earthquake aftermath disrupts retail, services, and transport; 55 confirmed dead, with widespread destruction. Despite short-term challenges, Japanese equity markets historically resilient to earthquake impacts.

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Jan 04
0

Daily Brief Quantitative Analysis: ASX Short Interest Weekly (Dec 22nd): BHP and more

By | Daily Briefs, Quantitative Analysis

In today’s briefing:

  • ASX Short Interest Weekly (Dec 22nd): BHP, Wisetech Global, Woodside Energy, Telstra, Fortescue

ASX Short Interest Weekly (Dec 22nd): BHP, Wisetech Global, Woodside Energy, Telstra, Fortescue

By Ke Yan, CFA, FRM

  • We analyzed the changes in short interest of ASX Stocks as of Dec 22nd (reported today) which has an aggregated short interest worth USD19.9bn.
  • We tabulate league table for top short by value and short as multiple of ADT, as well as weekly increases & decreases in short value, short as multiple of ADT.
  • We highlight short interest changes in BHP, Wisetech Global, Woodside Energy, Telstra, Fortescue, Macquarie, Allkem, Santos.

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Jan 04
0

Daily Brief ESG: For Increasing TOBs and MBOs and more

By | Daily Briefs, ESG

In today’s briefing:

  • For Increasing TOBs and MBOs, Managers Should Be Aware of Listing Costs and PE Market Should Expand

For Increasing TOBs and MBOs, Managers Should Be Aware of Listing Costs and PE Market Should Expand

By Aki Matsumoto

  • Companies with large shareholders’ interests of 20% or more account for 779 of 1,784 companies in Metrical Universe. A number of companies are investment targets as TOB  and MBO candidates.
  • Companies with large shareholder influence may feel distanced from general corporate governance practices, but their interests are aligned with those of minority shareholders in terms of shareholder-oriented management.
  • For quality markets, it’s necessary to reduce the number of companies by increasing TOBs and MBOs, and to do so, managers need to be aware of the cost of listing.

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

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

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  • ✓ Custom Watchlists
  • ✓ Company Data and News
  • ✓ Events & Webinars
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Jan 04
0

Daily Brief Technical Analysis: Upgrading Staples and Health Care to Market Weight; Shift to Value; Failed Breakouts for ARKK and more

By | Daily Briefs, Technical Analysis

In today’s briefing:

  • Upgrading Staples and Health Care to Market Weight; Shift to Value; Failed Breakouts for ARKK, IPO

Upgrading Staples and Health Care to Market Weight; Shift to Value; Failed Breakouts for ARKK, IPO

By Joe Jasper

  • As the saying goes, “sector rotation is the lifeblood of a bull market.” That appears to be exactly what is going on as we kick off 2024.
  • Leadership areas that have significantly outperformed since the October 2023 lows are starting to pull back rather hard — and on above average volume (XLK, SMH, IGV, ARKK, IPO, BITQ)
  • Other Sectors are picking up the slack, namely Health Care (XLV), Staples (XLP), Utilities (XLU), Energy (XLE), Financials (XLF), and Real Estate (XLRE). Shift exposure toward value and defensives

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Jan 04
0

Daily Brief South Korea: Celltrion Pharm, Amorepacific Corp, Douzone Bizon, Samsung Electronics Pref Shares, Lippo Malls Indonesia Retail Trust and more

By | Daily Briefs, South Korea

In today’s briefing:

  • Celltrion Pharm (068760 KS) Looks Frothy
  • Korean Holdcos Vs Opcos Gap Trading Opportunities in 1Q 2024
  • KRX New Deal Index Rebalance Preview: Changes with Flow & Impact
  • Gap Trades in Korean Prefs Vs Common Share Pairs in 1Q 2024
  • Morning Views Asia: Indika Energy, Lippo Malls Indonesia Retail Trust, SK Hynix, Vedanta Resources

Celltrion Pharm (068760 KS) Looks Frothy

By David Blennerhassett

Korean Holdcos Vs Opcos Gap Trading Opportunities in 1Q 2024

By Douglas Kim

  • In this insight, we highlight the recent pricing gap divergences of the major Korean holdcos and opcos which could provide trading opportunities in 1Q 2024. 
  • We highlight 38 pair trades that involve Korean holdcos and opcos.
  • Of the 38 pair trades, 26 of them involved holdcos outperforming opcos in the past six months and 12 of them involved opcos outperforming holdcos in the same period.

KRX New Deal Index Rebalance Preview: Changes with Flow & Impact

By Brian Freitas

Gap Trades in Korean Prefs Vs Common Share Pairs in 1Q 2024

By Douglas Kim

  • In this insight, we discuss numerous gap trades involving Korean preferred and common shares in 1Q 2024. 
  • The excessive gaps in the preferred and common shares of Kumho Petro Chemical, Amorepacific Corp, and Samsung Electronics could reverse in the next several months.
  • We see some attractive longer-term opportunities for Amorepacific, Doosan Fuel Cell, LG Electronics, and CJ Cheiljedang which have especially high discounts for the preferred shares versus their counterpart common shares.

Morning Views Asia: Indika Energy, Lippo Malls Indonesia Retail Trust, SK Hynix, Vedanta Resources

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.

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Jan 04
0

Daily Brief Singapore: Lippo Malls Indonesia Retail Trust and more

By | Daily Briefs, Singapore

In today’s briefing:

  • Morning Views Asia: Indika Energy, Lippo Malls Indonesia Retail Trust, SK Hynix, Vedanta Resources

Morning Views Asia: Indika Energy, Lippo Malls Indonesia Retail Trust, SK Hynix, Vedanta Resources

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.

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Jan 04
0

Daily Brief Thematic (Sector/Industry): Ohayo Japan | Stocks Tumble; Japan Resilient in Face of Tragedy and more

By | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

  • Ohayo Japan | Stocks Tumble; Japan Resilient in Face of Tragedy
  • Semiconductor Outlook 2024: AI’s Adolescence
  • [Blue Lotus Daily – TMT Update]: BABA/BIDU/700 HK/0728 HK/JD/VIPS/PDD/2618 HK
  • [Blue Lotus Daily]: 1810 HK/XPEV/NIO/1211HK/LKNCY/1347.HK/688469.SH/603290.SH/605111.SH
  • Fads and Second Acts

Ohayo Japan | Stocks Tumble; Japan Resilient in Face of Tragedy

By Mark Chadwick

  • Overseas: SPX -0.8%, Nasdaq -1.2% extending losses for second day; Apple downgraded. 10Y yields above 4%. 
  • Today: NKY Futs -1.2% v cash. JPY143; Expect weak start to year’s trading. Oil prices up +3%
  • Japan: Earthquake aftermath disrupts retail, services, and transport; 55 confirmed dead, with widespread destruction. Despite short-term challenges, Japanese equity markets historically resilient to earthquake impacts.

Semiconductor Outlook 2024: AI’s Adolescence

By Douglas O’Laughlin

  • The year 2023 began with a significant downturn in the semiconductor market.
  • Significant capacity additions were brought on after the historic shortages due to COVID-19, and then demand wobbled as interest rates quickly rose.
  • Supply outpaced demand, and the market turned into a period of oversupply.

[Blue Lotus Daily – TMT Update]: BABA/BIDU/700 HK/0728 HK/JD/VIPS/PDD/2618 HK

By Ying Pan

  • BABA/BIDU/700.HK/0728.HK: Alibaba layoffs staff in hybrid cloud and IoT division (+/-/-/+)
  • JD/VIPS/BABA/PDD/2618.HK: JD announces minimum 20% salary increase for retail group employees (-/-/-/-/+)
  • JD/BABA/PDD/VIPS/2618.HK: JD also launched refund without returning the product for 3P merchants (+/-/-/-/-)

[Blue Lotus Daily]: 1810 HK/XPEV/NIO/1211HK/LKNCY/1347.HK/688469.SH/603290.SH/605111.SH

By Eric Wen

  • 1810 HK/XPEV/NIO/1211HK: ZEEKR 007 hits the market, starting at 209,900 yuan (-)
  • LKNCY: Luckin plans to set up the third roasting factory, with annual capacity of 55k tons.(+)
  • 1347.HK/688469.SH/603290.SH/605111.SH: Analog Devices raising semiconductor prices by 10-20% for China customers (+)

Fads and Second Acts

By Investment Talk

  • Beanie Babies, Tamagotchis, fidget spinners, heelys, silly bandz, pogs, pet rocks, mood rings, cabbage patch kids…
  • Every generation has its share of fad products, fashion statements, and hairstyles.
  • But what separates a fad from a sustainable trend? Understanding the difference between the two can be challenging.

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Jan 04
0

Daily Brief United States: Ubiquiti Inc., Health Care Select Sector SPDR, PNM Resources and more

By | Daily Briefs, United States

In today’s briefing:

  • UI: New Products Surging Interest
  • Upgrading Staples and Health Care to Market Weight; Shift to Value; Failed Breakouts for ARKK, IPO
  • Avangrid (Iberdrola) Terminates Merger Agreement with PNM Resources

UI: New Products Surging Interest

By Hamed Khorsand

  • New product introductions have historically resulted in revenue growth at Ubiquiti (UI) and fiscal second quarter 2024 (December 2023) had several of them
  • Ubiquiti has introduced a series of new products. The biggest change at Ubiquiti is the availability of paid for tech support
  • There are several products that have stood out this past quarter. Including, a new Dream Machine meant for the home, called UniFi Express. The device immediately sold out

Upgrading Staples and Health Care to Market Weight; Shift to Value; Failed Breakouts for ARKK, IPO

By Joe Jasper

  • As the saying goes, “sector rotation is the lifeblood of a bull market.” That appears to be exactly what is going on as we kick off 2024.
  • Leadership areas that have significantly outperformed since the October 2023 lows are starting to pull back rather hard — and on above average volume (XLK, SMH, IGV, ARKK, IPO, BITQ)
  • Other Sectors are picking up the slack, namely Health Care (XLV), Staples (XLP), Utilities (XLU), Energy (XLE), Financials (XLF), and Real Estate (XLRE). Shift exposure toward value and defensives

Avangrid (Iberdrola) Terminates Merger Agreement with PNM Resources

By Jesus Rodriguez Aguilar

  • Iberdrola SA (IBE SM)‘s U.S. subsidiary Avangrid (AGR US) terminated its $8.3 billion deal for PNM Resources (PNM US) as it could not New Mexico regulatory approval by 31 December 2023.
  • Iberdrola lost its patience but freed up €11.5 billion from that deal, together with €5.5 billion from assets sold to the Mexican Government. That’s a lot for inorganic growth. 
  • PNM, at 9.7x EV/Fwd EBITDA, is trading in line with comparables, thus on a multiples basis there should be limited downside to the share price.

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