Smartkarma Daily Briefs

APR is getting ready to complete an IPO in KOSPI in February 2024. The IPO price range is from 147,000 won to 200,000 won.
According to the bankers’ valuation, the company’s valuation is expected to range from 1.1 trillion won to 1.6 trillion won post IPO.
The company’s best selling product is its skin care beauty device product called Medicube Age-R.

Insiders Related Daisy Partners Sells About 270 Billion Won of Ecopro Co and Ecopro BM

On 29 December, Ecopro Group announced large selling of Ecopro Co Ltd (086520 KS) and Ecopro BM (247540 KS) by Daisy Partners worth 272 billion won in December.
Daisy Partners is a company 100% owned by Chairman of Ecopro Group Lee Dong-Chae and his family members.
Daisy Partners is likely to sell more shares in Ecopro Co and Ecopro BM in the next several years to increase the foundation’s capital to about 500 billion won.

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Jan 02

Daily Brief Equity Bottom-Up: China’s Tourism Recovery Versus Other Major Tourist Sources in Asia: Delayed and more

By Smartkarma Daily Briefs | Daily Briefs, Equity Bottom-Up

In today’s briefing:

China’s Tourism Recovery Versus Other Major Tourist Sources in Asia: Delayed, Not Slower
CIMC Enric (3899 HK): One More Spin-Off Progressing
Company Update – BAE SYSTEMS PLC
[Week 15] Namaste India 🙏 | 2023 Bloopers Edition
China Consumption Weekly (1 Jan 2024): Tencent, NetEase, Alibaba, JD.com, PDD

China’s Tourism Recovery Versus Other Major Tourist Sources in Asia: Delayed, Not Slower

By Daniel Hellberg

China’s outbound tourism recovery started much later than others in the region
In particular, Taiwan & Korea began ramping outbound travel earlier (in Q222)
As destinations, Thailand & Vietnam recovered early, but now lag HK’s growth

CIMC Enric (3899 HK): One More Spin-Off Progressing

By Osbert Tang, CFA

CIMC Enric Holdings (3899 HK) has applied for its liquid food segment, under CLTP, to be quoted on the NEEQ. Subsequently, it plans to be listed on the BSE.
The move will not only provide an additional funding channel for this business but also enhance the valuations of CIMC Enric. BSE’s IPOs have historically performed very well.
Upon successful listing, the attributable market cap of its two listed subsidiaries will be greater than its current market cap. This means its clean energy business is free.

Company Update – BAE SYSTEMS PLC

Our estimations for FY 2023 annual revenue range at around £24,234 million and for 2024 at around £26,415 million.
The company’s annual revenue reached £21,258 million in 2022 compared to £19,521 million in 2021, posting an increase by 8.9%. BAE Systems operating profit for FY 2022 was £1,989 million, increased by 11.87% compared to £1,778 million for the corresponding period of 2021.
In addition, EBITDA amounted to £3,151 million in 2022, while EBT and EATAM amounted to £1,989 million and £1,591 million respectively.

[Week 15] Namaste India 🙏 | 2023 Bloopers Edition

By Pranav Bhavsar

For this edition, we focus on our 2023 Bloopers, to improvise rather than get embarrassed. We also share some thoughts on potential enhancements that can be anticipated going forward.
On the NIFTY Index (NIFTY INDEX), we are still not bearish but do not find the markets to be very attractive either.
Bloopers in focus include Zomato (ZOMATO IN); CarTrade (CARTRADE IN) ; Hero Motocorp (HMCL IN) and Aavas Financiers Ltd (AAVAS IN).

China Consumption Weekly (1 Jan 2024): Tencent, NetEase, Alibaba, JD.com, PDD

By Ming Lu

The authorities granted licenses to 105 new domestic games and promised to review the game law draft.
Alibaba is restructuring its main business unit, Taobao-Tmall, to reach flexibility.
Both Alibaba and JD.com changed their refund policies to follow PDD.

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Jan 02

Daily Brief Indonesia: Pyridam Farma and more

By Smartkarma Daily Briefs | Daily Briefs, Indonesia

In today’s briefing:

Pyridam Farma (PYFA IJ): Acquisition of Australian Contract Manufacturer to Add Long-Term Value

Pyridam Farma (PYFA IJ): Acquisition of Australian Contract Manufacturer to Add Long-Term Value

By Tina Banerjee

Pyridam Farma (PYFA IJ) is acquiring Probiotec Ltd (PBP AU), a leading contract manufacturer and packer of prescription and OTC pharmaceuticals, complementary medicines, consumer health products, and FMCG.
Under the terms of the scheme, Probiotec shareholders will receive cash consideration of A$3.00 per share. This implies an equity value of ~A$251M for Probiotec and enterprise value of ~A$326M.
The acquisition will add an attractive high-margin revenue stream to Pyridam. Through the acquisition of Probiotec, Pyridam will be capable to reach a wider market, thereby increasing its market share.

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Jan 02

Daily Brief ECM: APR IPO Preview and more

By Smartkarma Daily Briefs | Daily Briefs, ECM

In today’s briefing:

APR IPO Preview

APR IPO Preview

APR is getting ready to complete an IPO in KOSPI in February 2024. The IPO price range is from 147,000 won to 200,000 won.
According to the bankers’ valuation, the company’s valuation is expected to range from 1.1 trillion won to 1.6 trillion won post IPO.
The company’s best selling product is its skin care beauty device product called Medicube Age-R.

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

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

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✓ Personalised Alerts
✓ Custom Watchlists
✓ Company Data and News
✓ Events & Webinars

Jan 02

Daily Brief Event-Driven: HSCEI Index Rebalance Preview: Zhongsheng (881 HK) Should Go This Time and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

HSCEI Index Rebalance Preview: Zhongsheng (881 HK) Should Go This Time
Insiders Related Daisy Partners Sells About 270 Billion Won of Ecopro Co and Ecopro BM
NIFTY Bank Index Rebalance Preview: Canara Bank Could Replace Bandhan Bank
Pyridam Farma (PYFA IJ): Acquisition of Australian Contract Manufacturer to Add Long-Term Value
Selected European HoldCos and DLC: December’23 Report

HSCEI Index Rebalance Preview: Zhongsheng (881 HK) Should Go This Time

Zhongsheng Group (881 HK) pops up as a potential deletion yet again and a much lower rank raises the probability of deletion to just short of a near certainty.
With BeiGene (6160 HK) failing the Velocity Test for Tradeable Indexes, Zhongsheng Group (881 HK)‘s deletion from the index should result in China Unicom Hong Kong (762 HK)‘s inclusion.
Estimated one-way turnover at the rebalance is 1.47% resulting in a one-way trade of HK$946m. Passives will need to trade over 2.5x ADV on both stocks.

Insiders Related Daisy Partners Sells About 270 Billion Won of Ecopro Co and Ecopro BM

On 29 December, Ecopro Group announced large selling of Ecopro Co Ltd (086520 KS) and Ecopro BM (247540 KS) by Daisy Partners worth 272 billion won in December.
Daisy Partners is a company 100% owned by Chairman of Ecopro Group Lee Dong-Chae and his family members.
Daisy Partners is likely to sell more shares in Ecopro Co and Ecopro BM in the next several years to increase the foundation’s capital to about 500 billion won.

NIFTY Bank Index Rebalance Preview: Canara Bank Could Replace Bandhan Bank

Canara Bank (CBK IN) could replace Bandhan Bank Ltd (BANDHAN IN) in the NSE Nifty Bank Index (NSEBANK INDEX) at the March rebalance.
Passive trackers will need to buy 2 days of ADV on Canara Bank (CBK IN) while selling over 1 day of ADV on Bandhan Bank Ltd (BANDHAN IN).
The impact is even higher where passives will need to buy nearly 6x delivery volumes in Canara Bank and sell 3x delivery volumes in Bandhan Bank Ltd.

Pyridam Farma (PYFA IJ): Acquisition of Australian Contract Manufacturer to Add Long-Term Value

By Tina Banerjee

Pyridam Farma (PYFA IJ) is acquiring Probiotec Ltd (PBP AU), a leading contract manufacturer and packer of prescription and OTC pharmaceuticals, complementary medicines, consumer health products, and FMCG.
Under the terms of the scheme, Probiotec shareholders will receive cash consideration of A$3.00 per share. This implies an equity value of ~A$251M for Probiotec and enterprise value of ~A$326M.
The acquisition will add an attractive high-margin revenue stream to Pyridam. Through the acquisition of Probiotec, Pyridam will be capable to reach a wider market, thereby increasing its market share.

Selected European HoldCos and DLC: December’23 Report

By Jesus Rodriguez Aguilar

The discounts to NAV of covered holdcos have mainly widened during December. Discounts to NAV: C.F.Alba, 49.1% (vs. 47.1%); GBL, 36.6% (vs. 34.9%); Heineken Holding, 16.7% (vs. 14.5%);
Industrivärden C, 5.4% (vs.4.9%); Investor B, 13.5% (vs. 14.6%); Porsche Automobile Holding, 37.1% (vs. 39.9%). The spread of Rio DLC widened to 24.2% (vs.17.2%).
What seems interesting: in holding trades, Porsche SE/vs. listed assets and the Rio DLC: long RIO LN/short RIO AU.

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Jan 02

Daily Brief United States: Crude Oil, EURO/US DOLLAR and more

By Smartkarma Daily Briefs | Daily Briefs, United States

In today’s briefing:

Energy Cable #51: Tensions Increasing Fast in the Red Sea
Comment on Exchange Rate EUR/USD – December 15, 2023

Energy Cable #51: Tensions Increasing Fast in the Red Sea

By Andreas Steno

Happy New Year everybody and welcome to this year’s first edition of the Energy Cable.
Crude oil prices started rallying into and over the Christmas holiday period with focus on the Houthis’ attacks on vessels in the Red Sea which prompted us to have a look at the numbers.
The developments over the weekend have increased tensions, and we are eagerly awaiting the initial price action of the year to see how nervous the market is.

Comment on Exchange Rate EUR/USD – December 15, 2023

During the period under consideration, i.e. November 15th to December 15th, 2023, the EUR/USD exchange rate fluctuated between 1,084 and 1,095 in the initial period until November 27th, 2023.
After reaching 1,099 on November 28th, the exchange rate followed an immediate downtrend until the 11th of December (except for one session), although it remained higher than the levels seen at the beginning of November.
Conversely on December 12th, the pair recorded an ascent, finally settling at 1.0894.

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

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

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Jan 02

Daily Brief China: Zhongsheng Group, CIMC Enric Holdings, Trip.com, Tencent and more

By Smartkarma Daily Briefs | China, Daily Briefs

In today’s briefing:

HSCEI Index Rebalance Preview: Zhongsheng (881 HK) Should Go This Time
CIMC Enric (3899 HK): One More Spin-Off Progressing
China’s Tourism Recovery Versus Other Major Tourist Sources in Asia: Delayed, Not Slower
China Consumption Weekly (1 Jan 2024): Tencent, NetEase, Alibaba, JD.com, PDD

HSCEI Index Rebalance Preview: Zhongsheng (881 HK) Should Go This Time

Zhongsheng Group (881 HK) pops up as a potential deletion yet again and a much lower rank raises the probability of deletion to just short of a near certainty.
With BeiGene (6160 HK) failing the Velocity Test for Tradeable Indexes, Zhongsheng Group (881 HK)‘s deletion from the index should result in China Unicom Hong Kong (762 HK)‘s inclusion.
Estimated one-way turnover at the rebalance is 1.47% resulting in a one-way trade of HK$946m. Passives will need to trade over 2.5x ADV on both stocks.

CIMC Enric (3899 HK): One More Spin-Off Progressing

By Osbert Tang, CFA

CIMC Enric Holdings (3899 HK) has applied for its liquid food segment, under CLTP, to be quoted on the NEEQ. Subsequently, it plans to be listed on the BSE.
The move will not only provide an additional funding channel for this business but also enhance the valuations of CIMC Enric. BSE’s IPOs have historically performed very well.
Upon successful listing, the attributable market cap of its two listed subsidiaries will be greater than its current market cap. This means its clean energy business is free.

China’s Tourism Recovery Versus Other Major Tourist Sources in Asia: Delayed, Not Slower

By Daniel Hellberg

China’s outbound tourism recovery started much later than others in the region
In particular, Taiwan & Korea began ramping outbound travel earlier (in Q222)
As destinations, Thailand & Vietnam recovered early, but now lag HK’s growth

China Consumption Weekly (1 Jan 2024): Tencent, NetEase, Alibaba, JD.com, PDD

By Ming Lu

The authorities granted licenses to 105 new domestic games and promised to review the game law draft.
Alibaba is restructuring its main business unit, Taobao-Tmall, to reach flexibility.
Both Alibaba and JD.com changed their refund policies to follow PDD.

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

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

Jan 02

Daily Brief India: Canara Bank, Zomato and more

By Smartkarma Daily Briefs | Daily Briefs, India

In today’s briefing:

NIFTY Bank Index Rebalance Preview: Canara Bank Could Replace Bandhan Bank
[Week 15] Namaste India 🙏 | 2023 Bloopers Edition

NIFTY Bank Index Rebalance Preview: Canara Bank Could Replace Bandhan Bank

Canara Bank (CBK IN) could replace Bandhan Bank Ltd (BANDHAN IN) in the NSE Nifty Bank Index (NSEBANK INDEX) at the March rebalance.
Passive trackers will need to buy 2 days of ADV on Canara Bank (CBK IN) while selling over 1 day of ADV on Bandhan Bank Ltd (BANDHAN IN).
The impact is even higher where passives will need to buy nearly 6x delivery volumes in Canara Bank and sell 3x delivery volumes in Bandhan Bank Ltd.

[Week 15] Namaste India 🙏 | 2023 Bloopers Edition

By Pranav Bhavsar

For this edition, we focus on our 2023 Bloopers, to improvise rather than get embarrassed. We also share some thoughts on potential enhancements that can be anticipated going forward.
On the NIFTY Index (NIFTY INDEX), we are still not bearish but do not find the markets to be very attractive either.
Bloopers in focus include Zomato (ZOMATO IN); CarTrade (CARTRADE IN) ; Hero Motocorp (HMCL IN) and Aavas Financiers Ltd (AAVAS IN).

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

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

Jan 02

Daily Brief Macro: Energy Cable #51: Tensions Increasing Fast in the Red Sea and more

By Smartkarma Daily Briefs | Daily Briefs, Macro

In today’s briefing:

Energy Cable #51: Tensions Increasing Fast in the Red Sea
What the Politics of 2024 Tell Us About 2025
A Bull Market With Election Year Characteristics
US: Increase Weight in Bonds Vs Equities in the Early Part of 2024
Comment on Exchange Rate EUR/USD – December 15, 2023
Quarterly Macro Note – EUROZONE ECONOMY – 21 Dec 2023

Energy Cable #51: Tensions Increasing Fast in the Red Sea

By Andreas Steno

Happy New Year everybody and welcome to this year’s first edition of the Energy Cable.
Crude oil prices started rallying into and over the Christmas holiday period with focus on the Houthis’ attacks on vessels in the Red Sea which prompted us to have a look at the numbers.
The developments over the weekend have increased tensions, and we are eagerly awaiting the initial price action of the year to see how nervous the market is.

What the Politics of 2024 Tell Us About 2025

By Cam Hui

What does the political and economic landscape of 2024 mean for investors in 2025 under a Biden oe a Trump administration?
A Biden White House is more predictable using conventional economic analysis. Much depends on whether the Fed can achieve a soft landing of the economy.
The effects of a Trump White House will be more difficult to predict. The only certain investment bet under a Trump administration may be to buy volatility.

A Bull Market With Election Year Characteristics

By Cam Hui

Long-Term models are signaling the revival of a long-term equity bull.
But the market may be vulnerable to some choppiness in the next few months.
The intermediate-term outlook for stocks continues to be bullish and we expect a positive year for the S&P 500 in 2024.

US: Increase Weight in Bonds Vs Equities in the Early Part of 2024

By Prasenjit K. Basu

We expect the Fed Funds rate to decline a minimum of 50bp this year, starting with a 25bp cut in Jun’24. Consequently, bonds are likely to generate solidly positive returns.
Despite M2 contracting YoY for 12 months, core inflation still remains too deeply entrenched, and will consequently not allow any earlier easing. But a slower economy will help rein-in inflation.
The S&P500’s CAPE ratio is 32.27x, nearly double its mean of 17.07x, so equities are likely to struggle in Q1CY24. We recommend being Overweight Bonds and Underweight Equities this quarter.

Comment on Exchange Rate EUR/USD – December 15, 2023

During the period under consideration, i.e. November 15th to December 15th, 2023, the EUR/USD exchange rate fluctuated between 1,084 and 1,095 in the initial period until November 27th, 2023.
After reaching 1,099 on November 28th, the exchange rate followed an immediate downtrend until the 11th of December (except for one session), although it remained higher than the levels seen at the beginning of November.
Conversely on December 12th, the pair recorded an ascent, finally settling at 1.0894.

Quarterly Macro Note – EUROZONE ECONOMY – 21 Dec 2023