Smartkarma Daily Briefs

SOUTHBOUND flows showing momentum tendencies this past week on a single-stock basis. Hs up vs As quite strongly. Liquid Hs even better.
SOUTHBOUND saw HK$1.2bn of net IN-flows in the 3-day week to 29 Dec. Total flows were HK$88bn.
Bullish end to year for SOUTHBOUND owners but they did not mark the close. They were, however, big buyers of high-div SOEs.

(Mostly) Asia-Pac Weekly Risk Arb Wrap: Meldia DC, Boart Longyear, Orecorp, Symbio, Shidax, Hollysys

I tally 50 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal.
Two new deals discussed this week: Seedheiwa (1739 JP)‘s (now Meldia DC) Tender Offer; and Boart Longyear (BLY AU)‘s ignominious exit.
Key updates took place on: Orecorp (ORR AU), Symbio Holdings (SYM AU), IJTT (7315 JP), Shidax Corp (4837 JP), Ohizumi Mfg (6618 JP), and Hollysys Automation Technologies (HOLI US).

Last Week in Event SPACE: Fujitsu General, Swire Pacific, Li Ning, IJJT

The BIG Risk is that Fujitsu Ltd (6702 JP) sells its stake in Fujitsu General (6755 JP) to someone in a below-market tender offer.
Swire Pacific (A) (19 HK) may still see more outperformance from its latest buyback. But it’s up ~29% since the company announced it was buying both the As and Bs.
Li Ning (2331 HK)‘s shares continue to edge up after its founder recently increased its stake.

Mainland Connect NORTHBOUND Flows (To 29 Dec 23): Renewables Are a BIG NET BUY This Week

The Quiddity Mainland Connect NORTHBOUND Monitor. Like the A/H Premium Monitor and HK Connect SOUTHBOUND Monitor. Lots of Flows/Position Tables and Charts with which to play.
Last week saw NORTHBOUND net BUY RMB 18.7bn of A-shares on stronger average activity. BIG net buying flows on Weds and Thursday.
Looking at the change in the weekly position charts over the last year is striking (easiest in the Sectors table to start). Still.

A/H Premium Tracker (To 29 Dec 23): STAY Long Hs Vs As, Wide Premia in Renewables Look Vulnerable

The New and Better (5mos old) A-H Premium Tracker has tables, charts, measures galore to track A/H premium positioning, southbound and northbound positioning/volatility in pairs over time, etc.
SOUTHBOUND flows flat/light and NORTHBOUND flows a significant net buy, respectively, but liquid Hs with H/A pairs OUT-perform As on average by 200+bp.
STILL time to go long Hs vs As for the new year. 52wk wide discounts were just last week. Wide A/H premia in renewables space look vulnerable.

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Dec 31

Daily Brief Equity Bottom-Up: Media IC Monitor: Himax Showing Relative Display Strength Thanks to Auto Exposure; CES Event Ahead and more

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

In today’s briefing:

Media IC Monitor: Himax Showing Relative Display Strength Thanks to Auto Exposure; CES Event Ahead

Media IC Monitor: Himax Showing Relative Display Strength Thanks to Auto Exposure; CES Event Ahead

By Vincent Fernando, CFA

Himax shares have performed relatively well during December but have still significantly underperformed other fabless Media IC names over the last six months.
Comparing results data across all names, Himax has exhibited relative strength in Display IC revenue thanks to its strong position supplying automakers with automotive display technology.
Himax will be speaking at Nomura’s CES 2024 event and presenting its new edge AI camera products; This creates potential for positive news flow within two weeks.

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✓ Personalised Alerts
✓ Custom Watchlists
✓ Company Data and News
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Dec 31

Daily Brief Macro: Part Four: The Sharply Slowing UK Economy and more

By Smartkarma Daily Briefs | Daily Briefs, Macro

In today’s briefing:

Part Four: The Sharply Slowing UK Economy
China Property: 2023 In Word Frequency Charts
Part Three: Australian Dollar and AGB Yields

Part Four: The Sharply Slowing UK Economy

The UK economy has been facing a series of challenges in recent weeks.
Economic data has been disappointing, with weak unemployment, earnings, GDP, industrial production, manufacturing, services, and trade balance.
As I write this report, 10-year UK government bond yields have fallen by 20 basis points (bps) in the past two days.

China Property: 2023 In Word Frequency Charts

By Robert Ciemniak

We gauge the intensity of certain topics and narratives concerning China’s property sector via the analysis of the mainstream Chinese media headlines.
Overall, 2023 was marked by the initial market recovery ‘talk’ which then faded, followed by the spike in policy support for the sector, though less so towards the year-end.
Certain topics have jumped in prominence in H2 on policy directives: affordable housing and renovating urban villages.

Part Three: Australian Dollar and AGB Yields

The Aussie Dollar is acting as a delta one to the Chinese Economic data, as the People’s Bank of China (PBOC) remains committed to maintaining the stability of the CNY.
The AUDJPY has formed an intermediate double-top pattern.
While it is likely to rebound, it could also be influenced by the difference in export growth between ROW with China and Japan.

💡 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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Dec 31

Daily Brief TMT/Internet: China Mobile, Hollysys Automation Technologies, LONGi Green Energy Technology, Mediatek Inc and more

By Smartkarma Daily Briefs | Daily Briefs, TMT/Internet

In today’s briefing:

HK Connect SOUTHBOUND Flows (To 29Dec23); CNOOC & Telcos to the BUY Side, Tracker Fund Sold Bigly
(Mostly) Asia-Pac Weekly Risk Arb Wrap: Meldia DC, Boart Longyear, Orecorp, Symbio, Shidax, Hollysys
Mainland Connect NORTHBOUND Flows (To 29 Dec 23): Renewables Are a BIG NET BUY This Week
Media IC Monitor: Himax Showing Relative Display Strength Thanks to Auto Exposure; CES Event Ahead

HK Connect SOUTHBOUND Flows (To 29Dec23); CNOOC & Telcos to the BUY Side, Tracker Fund Sold Bigly

SOUTHBOUND flows showing momentum tendencies this past week on a single-stock basis. Hs up vs As quite strongly. Liquid Hs even better.
SOUTHBOUND saw HK$1.2bn of net IN-flows in the 3-day week to 29 Dec. Total flows were HK$88bn.
Bullish end to year for SOUTHBOUND owners but they did not mark the close. They were, however, big buyers of high-div SOEs.

(Mostly) Asia-Pac Weekly Risk Arb Wrap: Meldia DC, Boart Longyear, Orecorp, Symbio, Shidax, Hollysys

I tally 50 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal.
Two new deals discussed this week: Seedheiwa (1739 JP)‘s (now Meldia DC) Tender Offer; and Boart Longyear (BLY AU)‘s ignominious exit.
Key updates took place on: Orecorp (ORR AU), Symbio Holdings (SYM AU), IJTT (7315 JP), Shidax Corp (4837 JP), Ohizumi Mfg (6618 JP), and Hollysys Automation Technologies (HOLI US).

Mainland Connect NORTHBOUND Flows (To 29 Dec 23): Renewables Are a BIG NET BUY This Week

The Quiddity Mainland Connect NORTHBOUND Monitor. Like the A/H Premium Monitor and HK Connect SOUTHBOUND Monitor. Lots of Flows/Position Tables and Charts with which to play.
Last week saw NORTHBOUND net BUY RMB 18.7bn of A-shares on stronger average activity. BIG net buying flows on Weds and Thursday.
Looking at the change in the weekly position charts over the last year is striking (easiest in the Sectors table to start). Still.

Media IC Monitor: Himax Showing Relative Display Strength Thanks to Auto Exposure; CES Event Ahead

By Vincent Fernando, CFA

Himax shares have performed relatively well during December but have still significantly underperformed other fabless Media IC names over the last six months.
Comparing results data across all names, Himax has exhibited relative strength in Display IC revenue thanks to its strong position supplying automakers with automotive display technology.
Himax will be speaking at Nomura’s CES 2024 event and presenting its new edge AI camera products; This creates potential for positive news flow within two weeks.

💡 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

Dec 31

Daily Brief Energy/Materials: Ganfeng Lithium and more

By Smartkarma Daily Briefs | Daily Briefs, Energy & Materials Sector

In today’s briefing:

A/H Premium Tracker (To 29 Dec 23): STAY Long Hs Vs As, Wide Premia in Renewables Look Vulnerable

A/H Premium Tracker (To 29 Dec 23): STAY Long Hs Vs As, Wide Premia in Renewables Look Vulnerable

The New and Better (5mos old) A-H Premium Tracker has tables, charts, measures galore to track A/H premium positioning, southbound and northbound positioning/volatility in pairs over time, etc.
SOUTHBOUND flows flat/light and NORTHBOUND flows a significant net buy, respectively, but liquid Hs with H/A pairs OUT-perform As on average by 200+bp.
STILL time to go long Hs vs As for the new year. 52wk wide discounts were just last week. Wide A/H premia in renewables space look vulnerable.

💡 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

Dec 31

Daily Brief Financials: GBP, Swire Pacific (A), AUD and more

By Smartkarma Daily Briefs | Daily Briefs, Financials

In today’s briefing:

Part Four: The Sharply Slowing UK Economy
Last Week in Event SPACE: Fujitsu General, Swire Pacific, Li Ning, IJJT
Part Three: Australian Dollar and AGB Yields

Part Four: The Sharply Slowing UK Economy

The UK economy has been facing a series of challenges in recent weeks.
Economic data has been disappointing, with weak unemployment, earnings, GDP, industrial production, manufacturing, services, and trade balance.
As I write this report, 10-year UK government bond yields have fallen by 20 basis points (bps) in the past two days.

Last Week in Event SPACE: Fujitsu General, Swire Pacific, Li Ning, IJJT

The BIG Risk is that Fujitsu Ltd (6702 JP) sells its stake in Fujitsu General (6755 JP) to someone in a below-market tender offer.
Swire Pacific (A) (19 HK) may still see more outperformance from its latest buyback. But it’s up ~29% since the company announced it was buying both the As and Bs.
Li Ning (2331 HK)‘s shares continue to edge up after its founder recently increased its stake.

Part Three: Australian Dollar and AGB Yields

The Aussie Dollar is acting as a delta one to the Chinese Economic data, as the People’s Bank of China (PBOC) remains committed to maintaining the stability of the CNY.
The AUDJPY has formed an intermediate double-top pattern.
While it is likely to rebound, it could also be influenced by the difference in export growth between ROW with China and Japan.

💡 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

Dec 30

Most Read: Nexchip Semiconductor , Posco DX, Kum Yang, ASICS Corp, Nikkei 225, Li Ning, Jusung Engineering, Nihon Kohden and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

STAR50 Index Rebalance Preview: Four High Impact Changes in March
Index Rebalance & ETF Flow Recap: STAR50, SET50, AMFI, KOSDAQ150
Kum Yang: Announces Its Shares Will Be Listed on the US Stock Market Through ADRs
Asics (7936) | Footwear Fallout as Nike’s Q2 Sends Sector Shockwaves
EQD | The Nikkei Will Pullback Within 1-3 Weeks
“Buy the Worst” HSI Strategy: A Tragic 2023 and What About 2024?
HK CEO & Director Dealings (29 Dec 2023): Li Ning, Meitu
Investigating the Use of SSF Listing Events as Fresh Flow Trading Opportunities in Korea
Nihon Kohden (6849 JP): Apart from Apple Smartwatch Ban, Three More Reasons to Buy Shares
EM by EM #36: What Goldman got wrong about China in 2023

STAR50 Index Rebalance Preview: Four High Impact Changes in March

By Brian Freitas

The review period for the March rebalance ends 31 January. We expect the changes to be announced 23 February with the implementation taking place after the close on 8 March.
We expect the index committee to continue using a 6-month minimum listing history resulting in four changes to the index.
One way turnover is estimated at 3.3% resulting in a one-way trade of CNY 4,717m. The impact on the deletions will be much larger than that on the inclusions.

Index Rebalance & ETF Flow Recap: STAR50, SET50, AMFI, KOSDAQ150

By Brian Freitas

The adhoc KOSDAQ 150 Index rebalance and the regular Nifty200 Momentum30 Index rebalance will be implemented on Thursday and the SET 50 Index rebalance will be implemented on Friday.
The review cutoff period for a whole bunch of indices ends on 29 December and the announcement of the results and implementation will take place early next year.
There were big inflows to China ETFs and to Emerging Market ETFs including iShares Core Emerging Mar (IEMG US), Vanguard Emerging Markets (VWO US) and iShares Emerging Markets (EMXC US).

Kum Yang: Announces Its Shares Will Be Listed on the US Stock Market Through ADRs

By Douglas Kim

On 27 December, Kum Yang announced that its shares will be listed on the US stock market in the form of DRs, resulting in its shares rising by 11.7%.
The listing of Kum Yang ADRs is likely to have a short-term positive impact on its share price as this is likely to reduce free float of local common shares.
Nonetheless, over the next 6-12 months, we expect Kum Yang’s share price to trade much lower (30% or more) as its shares are highly overvalued.

Asics (7936) | Footwear Fallout as Nike’s Q2 Sends Sector Shockwaves

By Mark Chadwick

Nike’s Q2 results lead to a 12% drop in its shares, affecting sector peers Onon, Skechers, and Asics with significant declines.
Challenging trading conditions in China and Europe, coupled with a subdued digital traffic outlook from Nike, raise broader concerns for the sector.
Asics stock declines 20% post-Nike’s fall, presenting an attractive buying opportunity with an estimated 20% upside, positioning Asics as a cost-effective play in the global performance running market.

EQD | The Nikkei Will Pullback Within 1-3 Weeks

By Nico Rosti

The Nikkei 225 (NKY INDEX) is about to close up for the 3rd consecutive week (CC=+3), it’s towards the Q3 resistance level at 33984: it’s short-term overbought.
There is a good chance that the index will pull back in the next 1-3 weeks, at the moment it looks like the rally has “stalled”.
The pullback may be an opportunity to buy again, and ride a rebound to previous highs, we will discuss LONG levels in a separated insight.

“Buy the Worst” HSI Strategy: A Tragic 2023 and What About 2024?

By Osbert Tang, CFA

2023 is the worst year for our “Buy the Worst” strategy as it returned -34.5% YTD, underperforming the HSI by 20.7pp. The two property names are the key drags.
Despite a poor 2023, the strategy has still outperformed the HSI by 17.9pp for 2018-2023. It remains significantly better than buying the winners in the current year.
For 2024, our strategy is to switch to Li Ning (2331 HK), Country Garden Services (6098 HK), Meituan (3690 HK), Wuxi Biologics (2269 HK), and Zhongsheng Group (881 HK).

HK CEO & Director Dealings (29 Dec 2023): Li Ning, Meitu