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Smartkarma Daily Briefs

Dec 29
0

Daily Brief TMT/Internet: Taiwan Semiconductor (TSMC), Delta Electronics Thailand and more

By | Daily Briefs, TMT/Internet

In today’s briefing:

  • TSMC (2330.TT; TSM.US): If Intel Was Split Up, What Impact Will It Have on the Foundry Industry?
  • Delta Taiwan Vs. Thailand Monitor: Parent Could Sell More of Its Stake; Thai 50x PER Vs. Taiwan 20x

TSMC (2330.TT; TSM.US): If Intel Was Split Up, What Impact Will It Have on the Foundry Industry?

By Patrick Liao

  • We assume that Intel’s current business model is unable to fully meet the manufacturing needs in that case.
  • As for the Intel Foundry Business, we believe that there is potential upside for growth.
  • If Intel was doing great in Wafer Manufacturing Business, then why does it have to consider splitting up?

Delta Taiwan Vs. Thailand Monitor: Parent Could Sell More of Its Stake; Thai 50x PER Vs. Taiwan 20x

By Vincent Fernando, CFA

  • Delta Thailand vs. Taiwan valuation differential has returned to an historically extreme level.
  • For 2024E & 2025E growth expectations continue to be similar for the two companies, yet Delta Thailand’s FY2024E PER is 50x while Delta Taiwan’s is 20x.
  • We see substantial relative value in Delta Taiwan and expect likely reversion of relative valuation due to latest return to historically extreme mismatch.

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Dec 29
0

Daily Brief Financials: Swire Pacific (A), Nikkei 225, iShares 20+ Year Treasury Bond ETF and more

By | Daily Briefs, Financials

In today’s briefing:

  • StubWorld: Swire Pac Trading “Rich” As Props Announces Big Write-Down
  • EQD | The Nikkei Will Pullback Within 1-3 Weeks
  • A closer look at stock bond correlation

StubWorld: Swire Pac Trading “Rich” As Props Announces Big Write-Down

By David Blennerhassett

  • Swire Pacific (19 HK)‘s NAV discount has narrowed, and implied stub widened, after announcing its latest buyback. Separately, Swire Properties (1972 HK) flagged a HK$4.5bn writedown on its investment property.
  • Preceding my comments on Swire are the current setup/unwind tables for Asia-Pacific Holdcos.
  • These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation >20%.

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.

A closer look at stock bond correlation

By Fallacy Alarm

  • For me, the most unexpected aspect of recent events has been that both bonds and stocks moved up together.
  • My expectation for this year was that equities do well.
  • But I thought they would eventually shake off bonds. Economic resilience (or in fact acceleration) would then force bond investors to chase equities. 

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Dec 29
0

Daily Brief Consumer: Li Ning, Aditya Vision, Mitsubishi Shokuhin and more

By | Consumer, Daily Briefs

In today’s briefing:

  • HK CEO & Director Dealings (29 Dec 2023): Li Ning, Meitu
  • Postcard from Patna | Breaking Sterotypes
  • Retail Media: A Major New Income Stream Even for Wholesalers

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

By David Blennerhassett

  • The data in this insight is collated from the “shareholding disclosure” link on the HKEx website
  • Often there is a corresponding HKEx announcement on the increase – or decrease – in the shareholding by directors. Or pledging. However, such disclosures are by no means an absolute.
  • The key stocks mentioned in this regular insight is Li Ning (2331 HK) and Meitu Inc (1357 HK).

Postcard from Patna | Breaking Sterotypes

By Pranav Bhavsar

Retail Media: A Major New Income Stream Even for Wholesalers

By Michael Causton

  • Seven Eleven and Familymart have already sent panic through the offices of major advertising agencies by setting up their own retail media networks. 
  • Now, Mitsubishi Shokuhin will do the same, using its trading company connections and  its existing ties to 10,000 clients at either end of the supply chain.
  • To personalise ads, it is working with the data analysis of geolocation company Unerry. 

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Dec 29
0

Daily Brief Thailand: Delta Electronics Thailand and more

By | Daily Briefs, Thailand

In today’s briefing:

  • Delta Taiwan Vs. Thailand Monitor: Parent Could Sell More of Its Stake; Thai 50x PER Vs. Taiwan 20x

Delta Taiwan Vs. Thailand Monitor: Parent Could Sell More of Its Stake; Thai 50x PER Vs. Taiwan 20x

By Vincent Fernando, CFA

  • Delta Thailand vs. Taiwan valuation differential has returned to an historically extreme level.
  • For 2024E & 2025E growth expectations continue to be similar for the two companies, yet Delta Thailand’s FY2024E PER is 50x while Delta Taiwan’s is 20x.
  • We see substantial relative value in Delta Taiwan and expect likely reversion of relative valuation due to latest return to historically extreme mismatch.

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Dec 29
0

Daily Brief Australia: Boart Longyear and more

By | Australia, Daily Briefs

In today’s briefing:

  • Boart Longyear’s (ASX:BLY) Ignominious Exit

Boart Longyear’s (ASX:BLY) Ignominious Exit

By David Blennerhassett

  • Drilling services company Boart Longyear (BLY AU) has agreed to a takeover by American Industrial Partners. Boart’s five largest shareholders – collectively holding 98.86% of shares out – are supportive.
  • Highly-Leveraged Boart copped the brunt of the GFC, and never fully recovered. American Industrial Partners’ Offer values Boart at A$543mn against its 2007 IPO value of A$2.3bn.
  • The takeover is expected to be completed in the first quarter of 2024. This is done.

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Dec 29
0

Daily Brief Quantitative Analysis: “Buy the Worst” HSI Strategy: A Tragic 2023 and What About 2024? and more

By | Daily Briefs, Quantitative Analysis

In today’s briefing:

  • “Buy the Worst” HSI Strategy: A Tragic 2023 and What About 2024?
  • Hong Kong Buybacks Weekly (Dec 22nd): Tencent, AIA, Li Ning

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

By Osbert Tang, CFA

Hong Kong Buybacks Weekly (Dec 22nd): Tencent, AIA, Li Ning

By Ke Yan, CFA, FRM

  • We analyze statistics on top repurchases over one week, one month, one quarter and one year periods ended on Dec 22nd based on HKEx daily reports.
  • In the past 7 days, the top 3 companies that repurchased the most shares from the market were Tencent (700 HK), AIA (1299 HK), Li Ning (2331 HK).
  • In the past 30 days, the top 3 companies that repurchased the most shares from the market were Tencent (700 HK), AIA (1299 HK), Wuxi Biologics (2269 HK).

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Dec 29
0

Daily Brief Thematic (Sector/Industry): Ohayo Japan | US Snoozes; More Firms to Delist from TSE and more

By | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

  • Ohayo Japan | US Snoozes; More Firms to Delist from TSE
  • China Property – New Home Sales Growth Less Negative (16 Cities) To Week Ending Dec 24
  • China Property Developers In Distress – Weekly News & Announcements Tracker | Dec 22-28, 2023

Ohayo Japan | US Snoozes; More Firms to Delist from TSE

By Mark Chadwick

  • Overseas: SPX +0.0%, Marginal gains on penultimate trading day. Oil -3%
  • Today: NKY Futs -0.3% v cash. JPY141; JGC to study hydrogen production on moon!
  • Japan: Japanese firms consider delisting to enhance management amid governance reforms, requiring Tokyo Stock Exchange Prime section companies to appoint external directors for increased board independence.

China Property – New Home Sales Growth Less Negative (16 Cities) To Week Ending Dec 24

By Robert Ciemniak

  • The weekly new home sales data indicates a smaller pace of decline for the select 16 major cities with consistent data towards the year-end.
  • Xi’an stands out as an outperformer. Recent policy easing in Beijing and Shanghai may not be fully reflected in the data yet.
  • The small-sample weekly data serves as a good directional indicator as to what to expect in the national figures for the same month (published in the middle of next month).

China Property Developers In Distress – Weekly News & Announcements Tracker | Dec 22-28, 2023

By Robert Ciemniak

  • This note is a weekly curated selection of Chinese news articles and company announcements focused on developers in distress
  • We look for their deals, updates, specific project progress news (‘local signals’), as well as relevant local research commentaries about the market
  • We do not verify the underlying data or provide any opinion, we only select and summarize the information; See direct links to sources

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Dec 29
0

Daily Brief Event-Driven: StubWorld: Swire Pac Trading “Rich” As Props Announces Big Write-Down and more

By | Daily Briefs, Event-Driven

In today’s briefing:

  • StubWorld: Swire Pac Trading “Rich” As Props Announces Big Write-Down
  • Boart Longyear’s (ASX:BLY) Ignominious Exit
  • ADNOC/Covestro: Bargaining On
  • EQD | The Nikkei Will Pullback Within 1-3 Weeks
  • HK CEO & Director Dealings (29 Dec 2023): Li Ning, Meitu

StubWorld: Swire Pac Trading “Rich” As Props Announces Big Write-Down

By David Blennerhassett

  • Swire Pacific (19 HK)‘s NAV discount has narrowed, and implied stub widened, after announcing its latest buyback. Separately, Swire Properties (1972 HK) flagged a HK$4.5bn writedown on its investment property.
  • Preceding my comments on Swire are the current setup/unwind tables for Asia-Pacific Holdcos.
  • These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation >20%.

Boart Longyear’s (ASX:BLY) Ignominious Exit

By David Blennerhassett

  • Drilling services company Boart Longyear (BLY AU) has agreed to a takeover by American Industrial Partners. Boart’s five largest shareholders – collectively holding 98.86% of shares out – are supportive.
  • Highly-Leveraged Boart copped the brunt of the GFC, and never fully recovered. American Industrial Partners’ Offer values Boart at A$543mn against its 2007 IPO value of A$2.3bn.
  • The takeover is expected to be completed in the first quarter of 2024. This is done.

ADNOC/Covestro: Bargaining On

By Jesus Rodriguez Aguilar

  • Covestro AG (1COV GR) has been the subject of a potential takeover from ADNOC since Bloomberg reported on 20 June. The last reported potential offer is €60/share (c.€11.3 billion).
  • ADNOC could be willing to offer €64.5 (7.1x EV/EBITDA on mid-cycle €2,110 million EBITDA), but Covestro is rumoured to seek €70/share (typical chemicals 6x on €2,675 million EBITDA, likely demanding).
  • Considering a takeout price of €60, gross spread is 11.7% and the shares are pricing a 64% probability of deal completion. I’d be long at €53/share, as downside seems limited.

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.

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

By David Blennerhassett

  • The data in this insight is collated from the “shareholding disclosure” link on the HKEx website
  • Often there is a corresponding HKEx announcement on the increase – or decrease – in the shareholding by directors. Or pledging. However, such disclosures are by no means an absolute.
  • The key stocks mentioned in this regular insight is Li Ning (2331 HK) and Meitu Inc (1357 HK).

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Dec 29
0

Daily Brief United States: iShares 20+ Year Treasury Bond ETF and more

By | Daily Briefs, United States

In today’s briefing:

  • A closer look at stock bond correlation

A closer look at stock bond correlation

By Fallacy Alarm

  • For me, the most unexpected aspect of recent events has been that both bonds and stocks moved up together.
  • My expectation for this year was that equities do well.
  • But I thought they would eventually shake off bonds. Economic resilience (or in fact acceleration) would then force bond investors to chase equities. 

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Dec 29
0

Daily Brief Indonesia: Kalbe Farma and more

By | Daily Briefs, Indonesia

In today’s briefing:

  • Kalbe Farma (KLBF IJ) – The End of a Long Transition

Kalbe Farma (KLBF IJ) – The End of a Long Transition

By Angus Mackintosh

  • Kalbe Farma (KLBF IJ) continued to experience a high post-COVID base effect in 3Q2023, with consumer habits shifting to leisure versus health plus there was a softening of consumer demand.
  • The company also experienced higher raw material prices and higher operating expenses which depressed margins but expectations are for a recovery in margins in 4Q2023 and FY2024. 
  • Kalbe Farma stands out as Indonesia’s largest pharmaceutical company with strong exposure to consumer health and nutritional products with rising health consciousness amongst Indonesians. Valuations do not reflect impending recovery.

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