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Smartkarma Daily Briefs

Aug 03
0

Daily Brief Health Care: Novartis AG Reg, Tenet Healthcare and more

By | Daily Briefs, Healthcare

In today’s briefing:

  • Pullback Continues $ACWI; Stick With Defensives; More Countries With Improving Price and RS Trends
  • Tenet Healthcare Corporation: Focus on Ambulatory Surgical Centers (ASC) Growth & Enhanced Operational Management! – Major Drivers

Pullback Continues $ACWI; Stick With Defensives; More Countries With Improving Price and RS Trends

By Joe Jasper

  • We believe a 1-4-month pullback/consolidation is ongoing, and we would look for an important low to be made near the U.S. election.
  • Supports to watch continue to be $110 on $ACWI and $41-42 on MSCI EM $EEM, and whether these levels hold or not will determine the severity of the pullback.
  • Primary reasons for this bearish expectation include major bullish RS inflections for defensive Sectors, and bearish price action in the U.S. (SPX), Japan (TOPIX/Nikkei 225), and Europe (EURO STOXX 50)

Tenet Healthcare Corporation: Focus on Ambulatory Surgical Centers (ASC) Growth & Enhanced Operational Management! – Major Drivers

By Baptista Research

  • Tenet Healthcare Corporation delivered robust financial results in the second quarter of 2024, surpassing expectations with net operating revenues recorded at $5.1 billion.
  • The performance was marked by a notable 12% year-over-year growth in consolidated adjusted EBITDA, which reached $945 million, translating to an adjusted EBITDA margin of 18.5%.
  • This growth is primarily attributed to strong operational execution and strategic expansions across its segments.

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Aug 03
0

Daily Brief Industrials: Waste Connections , United Rentals, Fortive , Republic Services, Norcros PLC, Otis Worldwide and more

By | Daily Briefs, Industrials

In today’s briefing:

  • Waste Connections Inc.: Expansion of Core Solid Waste Pricing & Other Major Drivers
  • United Rentals Inc.: An Analysis Of Their Acquisition-Led Growth & Competitive Advantage! – Major Drivers
  • Fortive Corporation: How Is The Strategic De-risking in Advanced Market Engagements Working Out? – Major Drivers
  • Republic Services Group: Strategic Acquisitions
  • Norcros – Termination of coverage
  • Otis Worldwide Corporation: A Story Of Geographic Diversification and Regional Performance Optimization! – Major Drivers

Waste Connections Inc.: Expansion of Core Solid Waste Pricing & Other Major Drivers

By Baptista Research

  • Waste Connections demonstrated strong financial performance in the latest quarter, driven by solid waste pricing and effective cost management.
  • The company’s revenue grew by over 11%, with core solid waste pricing contributing significantly to this growth.
  • Despite a slight decline in volumes, the company’s strategic approach to pricing and contract renewals has maintained revenue quality, offsetting the negative impact of lower special waste volumes and other cyclical challenges.

United Rentals Inc.: An Analysis Of Their Acquisition-Led Growth & Competitive Advantage! – Major Drivers

By Baptista Research

  • United Rentals recently discussed its financial performance and strategic direction, presenting a mixed but robust picture of its operational and financial health.
  • The company reported a notable increase in total revenue, which rose by 6% year-over-year to $3.8 billion in the second quarter, with rental revenue climbing 8% to $3.2 billion.
  • This growth was bolstered by fleet productivity, which also saw an improvement of 4.6%.

Fortive Corporation: How Is The Strategic De-risking in Advanced Market Engagements Working Out? – Major Drivers

By Baptista Research

  • Fortive Corporation’s recent earnings report underscores its strategic focus and financial agility in today’s economic environment.
  • The firm showcased a robust display of financial discipline and strategic execution, achieving earnings and free cash flow at the high end of expectations.
  • Despite facing a low growth environment, Fortive demonstrated a remarkable 90 basis points of adjusted operating margin expansion and a 9% growth in adjusted earnings, which highlights its operational efficacy and resilience.

Republic Services Group: Strategic Acquisitions

By Baptista Research

  • Republic Services has reported robust second quarter results, continuing its positive momentum with strategic execution in key areas including customer engagement, digital transformation, and sustainable practices.
  • Revenue growth in the quarter stood at 9%, while adjusted EBITDA grew by 13%, reflecting strong operational performance and efficient management strategies.
  • This growth was driven by a focus on high-quality customer service and organic growth, maintaining a customer retention rate above 94%.

Norcros – Termination of coverage

By Edison Investment Research

Edison Investment Research is terminating coverage on AGBA (AGBA) and Norcros (NXR). 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 our website.

Otis Worldwide Corporation: A Story Of Geographic Diversification and Regional Performance Optimization! – Major Drivers

By Baptista Research

  • Otis Worldwide Corporation demonstrated stable performance during the second quarter of 2024, amidst a mixed economic environment.
  • The company’s results reflected both their successes and the ongoing challenges in the global market.
  • On the positive side, the Service segment continued to serve as a strong growth vector for Otis, with a reported mid-single-digit organic sales increase.

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Aug 03
0

Daily Brief Financials: KB Financial, Hana Financial, Bitcoin, Moody’s Corp, Agile Property Holdings, AGBA Group Holding , Aruhi Corp, Dream Incubator and more

By | Daily Briefs, Financials

In today’s briefing:

  • Alpha Generating Opportunities from the Corporate Value Up Disclosures on the KIND System
  • South Korean Banks; Hana Financial (086790 KS) And Woori (316140 KS) Are Our Positive Picks
  • Crypto Moves #37 – Three Factors to Rule the Remainder of 2024
  • Ether ETFs Are Looking for a Bitcoin Style Love
  • Moody’s Corporation: Expanding Transaction Revenue and Strong Issuance Growth! – Major Drivers
  • Agile Group – ESG Report – Lucror Analytics
  • AGBA – Termination of coverage
  • Aruhi Corp (7198 JP): Q1 FY03/25 flash update
  • Dream Incubator (4310 JP): Q1 FY03/25 flash update

Alpha Generating Opportunities from the Corporate Value Up Disclosures on the KIND System

By Douglas Kim

  • One of the key takeaways of the Corporate Value Up disclosures on the KIND system is that it could potentially lead to alpha generating investing opportunities. 
  • Since the last week of May, there have been 7 companies that provided specific Corporate Value up programs; (4 major financials) have outperformed KOSPI.
  • Companies such as KB Financial and Shinhan Financial that provide more meaningful Corporate Value Up action plans are likely to have greater impact on their share prices. 

South Korean Banks; Hana Financial (086790 KS) And Woori (316140 KS) Are Our Positive Picks

By Victor Galliano

  • Delinquency ratios continued to worsen into 2Q24, with a couple of the South Korean banks seeing accelerating growth in NPL ratios; despite this, there are buy opportunities
  • Our bigger cap pick is Hana Financial for its very attractive valuations, PEG and equity risk premia, as well as its solid core capital ratio and strong credit quality credentials
  • Among the smaller caps, Woori stands out in terms of valuation, PEG ratio, credit quality and it has registered improving post-provision returns

Crypto Moves #37 – Three Factors to Rule the Remainder of 2024

By Mads Eberhardt

  • August 1st marks the beginning of the final five months of 2024, a year that has already been extraordinary for the crypto industry.
  • This year has been unforgettable, with the crypto sector making a significant entrance on Wall Street with the launch of the first U.S. Bitcoin and Ethereum spot ETFs. The U.S. regulatory stance has also become more favorable towards crypto, recognizing it as a pivotal factor in the 2024 U.S. Presidential Election.
  • Over and above that, banks and other financial institutions are eagerly lining up to offer crypto services.

Ether ETFs Are Looking for a Bitcoin Style Love

By Trillions

  • Successful launch of bitcoin ETF’s led to the filing and approval of Ethereum ETF’s
  • Ethereum is the second largest cryptocurrency after bitcoin, with distinct differences in technology and operation
  • The purpose of an ether ETF is to provide investors with exposure to the growing cryptocurrency market and decentralized technology.

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

Moody’s Corporation: Expanding Transaction Revenue and Strong Issuance Growth! – Major Drivers

By Baptista Research

  • Moody’s Corporation reported strong financial results for the latest quarter, showcasing significant growth across key metrics while also acknowledging areas of uncertainty that could impact future performance.
  • The company achieved 22% revenue growth and an adjusted operating margin of nearly 50%, reflecting the firm’s ability to leverage its strong market position and disciplined cost management to generate substantial operating leverage.
  • Additionally, Moody’s adjusted diluted EPS grew by 43%, further demonstrating its profitability and financial health.

Agile Group – ESG Report – Lucror Analytics

By Leonard Law, CFA

Lucror Analytics’ ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable).
We view Agile Group’s ESG as “Adequate”, in line with its Environmental and Social scores. That said, Governance is “Weak”. Controversies are “Immaterial” and Disclosure is “Adequate”.

AGBA – Termination of coverage

By Edison Investment Research

Edison Investment Research is terminating coverage on AGBA (AGBA) and Norcros (NXR). 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 our website.

Aruhi Corp (7198 JP): Q1 FY03/25 flash update

By Shared Research

  • Operating revenue: JPY5.5bn (+19.0% YoY), driven by full consolidation of SBI Estate Finance group, origination-related revenue decreased.
  • Operating expenses: JPY4.7bn (+11.6% YoY), driven by finance costs increase, personnel expenses decrease, and commission expenses increase.
  • Pre-tax profit: JPY795mn (+77.1% YoY), with a pre-tax profit margin of 14.5%, reflecting a one-off factor in personnel expenses.

Dream Incubator (4310 JP): Q1 FY03/25 flash update

By Shared Research

  • In Q1 FY03/25, consolidated sales were JPY1.6bn (+38.5% YoY), with an operating profit of JPY48mn (JPY182mn loss in Q1 FY03/24).
  • Business Production segment reported sales of JPY1.1bn (+15.0% YoY) and an operating loss of JPY70mn (JPY107mn profit in Q1 FY03/24).
  • Venture Capital segment reported sales of JPY520mn (+145.3% YoY) and an operating profit of JPY378mn (JPY17mn loss in Q1 FY03/24).

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Aug 03
0

Daily Brief Consumer: BrainBees Solutions, Ola Electric, TSE Tokyo Price Index TOPIX, Ford Motor Co, O’Reilly Automotive, Whirlpool Corp, Kameda Seika, Kitwave Group and more

By | Consumer, Daily Briefs

In today’s briefing:

  • Brainbees Solutions (FirstCry) IPO – Not Very Attractive but It Is Relatively Cheap
  • Ola Electric IPO- Forensic Analysis
  • Reducing Cross Shareholdings Is Necessary to Increase the Effectiveness of Engagement
  • Ford Motor Company: EV Segment Losses & Surging Warranty Costs Are A Major Concern! – Major Drivers
  • O’Reilly Automotive Inc.: What Major Challenges Did They Face & How Is The Management Overcoming Them? – Major Drivers
  • Whirlpool Corporation: How Is The Management Executing Global Market Penetration and Diversification! – Major Drivers
  • Kameda Seika (2220 JP): Q1 FY03/25 flash update
  • Kitwave Group Plc (KITW) – Thursday, May 2, 2024

Brainbees Solutions (FirstCry) IPO – Not Very Attractive but It Is Relatively Cheap

By Sumeet Singh

  • BrainBees Solutions is looking to raise up to US$500m in its upcoming India IPO.
  • FirstCry is India’s largest multi-channel retailing platform for Mothers’, Babies’ and Kids’ products in terms of GMV, for the year ending Dec 2022 (9M23), according to RedSeer.
  • In our previous notes, we looked at the company’s past performance. In this note, we will talk about valuations.

Ola Electric IPO- Forensic Analysis

By Nitin Mangal

  • Ola Electric (1700674D IN) is launching its IPO, consisting of fresh issue worth INR 5.5 bn and offer for sale upto 84.9 mn shares.
  • The company delivered its first electric scooter in December 2021, and since then it has grown immensely to become a market leader with a share of 35%.
  • As far as forensics go, one should look out for related party transactions with promoters, some accounting policies, constant losses, need for capex, trend of expenses, etc.

Reducing Cross Shareholdings Is Necessary to Increase the Effectiveness of Engagement

By Aki Matsumoto

  • Signs of change in companies that have improved their capital profitability and valuations can be seen in their policy shareholdings/total assets. 
  • Companies with fewer policy shareholdings, as measured by (policy shareholdings + equity holdings)/total assets, tend to have the best values for valuation, ROE, and ROA, and vice versa.
  • To measure the seriousness of reducing cross-shareholdings, as long as the company has the voting right of cross-shareholdings in retirement benefit trust, the deemed shares should be included in cross-shareholdings.

Ford Motor Company: EV Segment Losses & Surging Warranty Costs Are A Major Concern! – Major Drivers

By Baptista Research

  • Ford Motor Company’s second quarter 2024 performance offers a comprehensive snapshot of a transitional phase in the company’s long-standing history.
  • The quarter reflects their advancing Ford+ strategic plan which aims to refine operational efficiencies and bolster profit margins through structural adaptations and technological advancements.
  • Baptista Research looks to evaluate the different factors that could influence the company’s price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology.

O’Reilly Automotive Inc.: What Major Challenges Did They Face & How Is The Management Overcoming Them? – Major Drivers

By Baptista Research

  • O’Reilly Automotive, Inc. faced a challenging second quarter in 2024, with performance below expectations due to broader industry demand headwinds.
  • Despite these challenges, the company reported a 2.3% increase in comparable store sales, continuing to outperform the industry.
  • Adjustments in full-year outlook for operating profit and earnings per share were made following these results.

Whirlpool Corporation: How Is The Management Executing Global Market Penetration and Diversification! – Major Drivers

By Baptista Research

  • Whirlpool Corporation reported its second quarter earnings for 2024, reflecting a mixed performance amid a challenging macroeconomic environment.
  • The company showed strong sequential global margin expansion and reiterated its net sales guidance at $16.9 billion.
  • However, it faced downward pressure on discretionary demand due to the soft housing market, particularly affecting the North American market.

Kameda Seika (2220 JP): Q1 FY03/25 flash update

By Shared Research

  • Sales rose JPY1.8bn (8.3%) YoY, driven by higher sales in Domestic Rice Cracker, Overseas, and Food businesses.
  • Operating profit increased JPY375mn (53.6%) YoY, with significant profit growth in Domestic Rice Cracker and Food businesses.
  • Revised FY03/25 forecast projects sales of JPY102.0bn (+6.8% YoY) and net income of JPY3.8bn (+68.4% YoY).

Kitwave Group Plc (KITW) – Thursday, May 2, 2024

By Value Investors Club

  • U.K.-based food distributor specializing in delivering a variety of products to convenience stores and foodservice providers
  • Targets independent establishments with low minimum order values
  • National scale gives them bargaining power over suppliers, providing a competitive edge

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

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Aug 02
0

Daily Brief Quantitative Analysis: ASX Short Interest Weekly (Jul 26th): Woodside Energy and more

By | Daily Briefs, Quantitative Analysis

In today’s briefing:

  • ASX Short Interest Weekly (Jul 26th): Woodside Energy, Fortescue, ANZ, CSL, Altium, Telstra
  • Screening for GEMs: August 2024

ASX Short Interest Weekly (Jul 26th): Woodside Energy, Fortescue, ANZ, CSL, Altium, Telstra

By Ke Yan, CFA, FRM

  • We analyzed the changes in short interest of ASX Stocks as of Jul 26th (reported today) which has an aggregated short interest worth USD20.3bn.
  • 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 Woodside Energy, Fortescue, ANZ, CSL, Altium, Telstra.

Screening for GEMs: August 2024

By Wium Malan, CFA

  • An overview (and output) of our machine learning-driven GEM screening model, which seeks to find the best medium-term long ideas within the top 100 stocks in the MSCI GEM Index.
  • The model is based on 1) a quantitative multifactor screening model, enhanced by two AI Technology-based approaches; 2) a Deep Neural Network model, and 3) a Recurrent Neural Network model.
  • Developed over roughly 4 years and implemented in its current state for over 3 years, the model has a solid real-world alpha-generating performance track record, discussed in detail below.

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Aug 02
0

Daily Brief ECM: WeRide Pre-IPO – The Positives – Large Monetisation Opportunity on the Horizon and more

By | Daily Briefs, ECM

In today’s briefing:

  • WeRide Pre-IPO – The Positives – Large Monetisation Opportunity on the Horizon
  • Brainbees Solutions (FirstCry) IPO – RHP Updates – Growing but Slowing
  • Ola Electric IPO: Valuation Analysis. A High-Voltage EV Play
  • Brainbees Solutions (FirstCry) IPO: The Investment Case
  • WeRide Pre-IPO – The Negatives – Losses Have Widened, Still in the Early Stages of Commercialization

WeRide Pre-IPO – The Positives – Large Monetisation Opportunity on the Horizon

By Clarence Chu

  • WeRide Corp (WER CH) is looking to raise around US$300m in its upcoming US IPO.
  • WeRide provides autonomous driving products and services from L2 to L4 of driving automation.
  • In this note, we will talk about the positive aspects of the deal.

Brainbees Solutions (FirstCry) IPO – RHP Updates – Growing but Slowing

By Sumeet Singh

  • BrainBees Solutions is looking to raise up to US$500m in its upcoming India IPO. 
  • FirstCry is India’s largest multi-channel retailing platform for Mothers’, Babies’ and Kids’ products in terms of GMV, for the year ending Dec 2022 (9M23), according to RedSeer.
  • We have looked at the company’s past performance in our previous notes. In this note, we will talk about its updated financials in the RHP.

Ola Electric IPO: Valuation Analysis. A High-Voltage EV Play

By Devi Subhakesan

  • Ola Electric (1700674D IN) ‘s IPO appears attractive versus peers based on valuation analysis, supported by detailed sales and revenue projections.  
  • Expect strong near-term revenue growth driven by its dominant market presence, e-mobility expansion, and potential entry into the e-motorcycle segment.
  • With a significant head start in the rapidly growing e2W sector, Ola’s robust product lineup, competitive pricing, and strong brand make it a compelling EV play.

Brainbees Solutions (FirstCry) IPO: The Investment Case

By Arun George

WeRide Pre-IPO – The Negatives – Losses Have Widened, Still in the Early Stages of Commercialization

By Clarence Chu

  • WeRide Corp (WER CH) is looking to raise around US$300m in its upcoming US IPO.
  • WeRide provides autonomous driving products and services from L2 to L4 of driving automation.
  • In this note, we will talk about the not so positive aspects of the deal.

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Aug 02
0

Daily Brief Thematic (Sector/Industry): Ohayo Japan | Recession Fears and more

By | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

  • Ohayo Japan | Recession Fears
  • Japan Morning Connection: Tech Tumbles
  • China’s Solar Sector Must Consolidate Amid Mounting Losses, Industry Group Warns
  • # 39 India Insight: JSW Cement Bid Orient Cement, Dixon New Plant, IndiaMart Weak Subscriber Growth
  • Episode 77: Asia Semis Tour
  • [Blue Lotus Daily-TMT Update]:BZ US/3690HK/PDD US/BABA US/SE US/JD US/700HK/NTES US/BIDU/MSFT/TCOM
  • [Blue Lotus Daily]:LI US/1211 HK/1810 HK/ NIO US/ XPEV US/BEKE/Macro News Update/China Manufacturing

Ohayo Japan | Recession Fears

By Mark Chadwick

  • Stocks tumbled on Thursday, with the Dow Jones dropping 494 points amid recession fears
  • Japan’s manufacturing PMI fell to 49.1 in July, indicating contraction. New orders declined due to weak domestic and international demand
  • Hitachi’s Q1 net profit surged 2.5-fold to 175 billion yen, driven by strong AI-related demand in IT services and power distribution

Japan Morning Connection: Tech Tumbles

By Andrew Jackson

  • Big tech reversal after yesterdays gains and a horrible earnings print for INTC sends it -20% in AH trading setting a very bleak tone for JP tech
  • AMZN miss after-mkt on its e-commerce seller services and advertising will weigh on likes of 4755 Rakuten and 4689 LY Corp.
  • Flight to perceived safety in names such as P&G, CL and KMB may provide a bid for related plays in JP such as 4452 Kao, 4912 Lion, and 8113 Unicharm.

China’s Solar Sector Must Consolidate Amid Mounting Losses, Industry Group Warns

By Caixin Global

  • Many Chinese solar manufacturers slowed or halted production altogether in the first half of this year, as they struggled to survive amid overcapacity and an ensuing price war, prompting an industry group to call for faster consolidation among the firms.
  • “It’s rare for the whole industry to lose money,” Wang Bohua, honorary chairman of the China Photovoltaic Industry Association (CPIA), said at a solar conference in the eastern province of Zhejiang on Thursday.
  • “Among the companies in the main industrial chain that have released their half-year forecasts, most are in a state of loss,” Wang said.

# 39 India Insight: JSW Cement Bid Orient Cement, Dixon New Plant, IndiaMart Weak Subscriber Growth

By Sudarshan Bhandari

  • JSW Cement bids for CK Birla’s stake in Orient Cement, reflecting ongoing industry consolidation.
  • Dixon plans new Chennai plant for laptop production, expanding IT manufacturing capabilities.
  • IndiaMART shares fall after weak subscriber growth, despite strong profit and revenue increase.

Episode 77: Asia Semis Tour

By The Circuit

  • High level macro themes include challenges of semiconductors in China and broader consumer trends
  • Overall sentiment in China remains relatively positive despite concerns in the semiconductor industry
  • Huawei’s comeback and success in the semiconductor market is contributing to increasing optimism in the industry, especially in the electronics sector

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

[Blue Lotus Daily-TMT Update]:BZ US/3690HK/PDD US/BABA US/SE US/JD US/700HK/NTES US/BIDU/MSFT/TCOM

By Ying Pan

  • BZ US: Enterprises’ Recruitment Confidence Shows Slight Recovery in July(+)
  • 3690HK: Meituan and Restaurant Brands Collaborate to Establish Take-out Satellite Stores, Further Penetrating Offline Catering in China.(+)
  • PDD US/BABA US /SHEIN/SE US: Hundreds of Temu merchants protest at Guangzhou headquarters (-/+/+)

[Blue Lotus Daily]:LI US/1211 HK/1810 HK/ NIO US/ XPEV US/BEKE/Macro News Update/China Manufacturing

By Eric Wen

  • Macro News Update: Central Economic Work Conference in July shifts focus of short-term economic efforts to promoting consumption.（+）
  • LI US/1211 HK/1810 HK/ NIO US/ XPEV US: New energy vehicle deliveries generally rose in the 30th week of 2024, with BYD, Ideal and Xiaomi hitting new highs （/////////）
  • BEKE US:A subsidiary of Beike acquires two commercial and residential land in Xi’an (/)

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Aug 02
0

Daily Brief Credit: Morning Views Asia: MGM China Holdings and more

By | Credit, Daily Briefs

In today’s briefing:

  • Morning Views Asia: MGM China Holdings

Morning Views Asia: MGM China Holdings

By Leonard Law, CFA

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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Aug 02
0

Daily Brief Event-Driven: [JAPAN ACTIVISM] – Murakami Group Bigger and Bolder on Exedy – STILL Room to Run and more

By | Daily Briefs, Event-Driven

In today’s briefing:

  • [JAPAN ACTIVISM] – Murakami Group Bigger and Bolder on Exedy – STILL Room to Run
  • Pacific Metals (5541 JP): Here We Go Again Murakami Becomes a Substantial Shareholder
  • Quiddity Leaderboard KOSPI 200 Dec 24: Up to 5 ADDs & 6 DELs Possible
  • Japan – Passive Selling in a Few Weeks & Shorts Build Up

[JAPAN ACTIVISM] – Murakami Group Bigger and Bolder on Exedy – STILL Room to Run

By Travis Lundy

  • In late May, Toyota Group member Aisin (7259 JP) announced it would sell its 37% stake in Exedy Corp (7278 JP). The market dropped. But that was an opportunity. 
  • There was an announcement, a ToSTNeT-3 buyback, the offering, and more buyback to come. On 30 May, I said “Buy the deal, buy in the market. It’s cheap and vulnerable.”
  • Exedy is up 21% since. On 17 June, activist Murakami-san’s group went over 5%. Then they bought more. Now they have 15%. Or more. Still cheap. Still vulnerable. 

Pacific Metals (5541 JP): Here We Go Again Murakami Becomes a Substantial Shareholder

By Arun George

  • Murakami’s entity, City Index Eleventh, and daughter reported a 5.40% stake in Pacific Metals (5541 JP). The shares were purchased from 27 May to 25 July.
  • Murakami’s average buy-in price is JPY1,259 per share, an 11.1% discount to the last close price. Murakami has been a substantial shareholder twice before.
  • Murakami’s previous dealings in Pacific Metals were a pump-and-dump where he built up around 8% stake, only to sell into the share price pop subsequently. Expect more of the same.  

Quiddity Leaderboard KOSPI 200 Dec 24: Up to 5 ADDs & 6 DELs Possible

By Travis Lundy

  • KOSPI 200 is a Korean blue-chip index that tracks the 200 largest and most-liquid names listed in the KOSPI section of the Korea Exchange (KRX).
  • In this insight, we take a look at the names leading the race to become ADDs and DELs during the upcoming semiannual review in December 2024.
  • We expect up to five ADDs and six DELs in the KOSPI 200 index during the December 2024 index rebal event based on the latest available data.

Japan – Passive Selling in a Few Weeks & Shorts Build Up

By Brian Freitas

  • Up to 12 stocks could be deleted from global passive portfolios in August. The deletion will lead to liquidity events where trackers will need to sell multiple days of ADV.
  • There has been a buildup of shorts on nearly all these stocks though the extent of the pre-positioning varies.
  • The increase in shorts is smaller than the estimated passive selling, though there is a fair amount of variability across the names. 

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Aug 02
0

Daily Brief Equity Bottom-Up: High Conviction 2024 – CyberAgent: Strong Recovery Across All Three Business Segments and more

By | Daily Briefs, Equity Bottom-Up

In today’s briefing:

  • High Conviction 2024 – CyberAgent: Strong Recovery Across All Three Business Segments
  • Budweiser APAC (1876 HK): Weak 2Q2024. Premium Beer, Cheap Valuations
  • Amazon Q2 Earnings: Eyes on AWS Margins, Website Traffic, and Advancements in Chips
  • DPC Dash (1405.HK): 1H24 Profit Alert Validating Investment Case
  • [Earnings Preview] Exxon Braces for Profit Hit as Refining Margins Tighten
  • Meta Surges 7% on Strong Q2 Report; Driven by Ad Growth, Q3 Forecast and AI Investments
  • Tech Supply Chain Tracker (02-Aug-2024): E Ink & Himax reveal color e-paper controller.
  • Digi Plus Interactive (PLUS PM): Bingo Plus Platform, Trading At 7x PE with >100% Growth In 2024
  • Freelancer – Using AI to enhance revenue and profit growth
  • [Luckin Coffee (LKNCY US, SELL, TP US$16.5) TP Change]: Milkteaization Diminishes Differentiation

High Conviction 2024 – CyberAgent: Strong Recovery Across All Three Business Segments

By Shifara Samsudeen, ACMA, CGMA

  • CyberAgent Inc (4751 JP)  reported 3QFY09/24 results yesterday. Both revenue and OP grew YoY, while revenue beat consensus marginally, OP beat consensus by a huge margin.
  • All three business segments showed strong recovery with notable improvement in gaming business as newly released titles perform well including the newly released UMA MUSUME: Pretty Derby movie.
  • Media business reported OP for the second consecutive quarter and the company has plans to further strengthen monetisation around AbemaTV.

Budweiser APAC (1876 HK): Weak 2Q2024. Premium Beer, Cheap Valuations

By Devi Subhakesan

  • Budweiser Brewing APAC (1876 HK)‘s  performance could improve from 2H2024, driven by a likely recovery in China’s premium beer market and favourable commodity prices.
  • Stock’s upside potential from current price levels seem to outweigh downside risk.
  • With a high dividend payout and strong free cash flow generation, Budweiser trades at a 5% dividend yield and an 11% FCF yield.

Amazon Q2 Earnings: Eyes on AWS Margins, Website Traffic, and Advancements in Chips

By Uttkarsh Kohli

  • Amazon anticipates a 13% YoY rise in Q2 2024 revenue to $148.67 billion and a 58% YoY jump in EPS to $1.03, highlighting robust earnings.
  • AWS is expected to see a $1 billion increase in quarterly revenue, reflecting an 18% year-over-year growth, driven by custom AI chips and model training services.
  • Analysts have reaffirmed buy ratings for Amazon, with an average target price of $228, reflecting strong confidence in the company’s growth prospects.

DPC Dash (1405.HK): 1H24 Profit Alert Validating Investment Case

By Eric Chen

  • Company issued 1H24 profit alert after market yesterday which significantly beat even the high-end sell-side expectations. 
  • Impressive SSSG and store-level unit economics imply sizable potential for operating leverage and earnings growth in the mid to long term.
  • The profit alert, along with 2Q operating data released earlier, reinforced our confidence in earnings estimates of RMB130 million/RMB300 million for FY24/25 respectively. 

[Earnings Preview] Exxon Braces for Profit Hit as Refining Margins Tighten

By Suhas Reddy

  • ExxonMobil anticipates a USD 1.1 billion to USD 1.5 billion dent on its Q2 earnings due to the industry-wide contraction in refining margins.
  • Exxon Mobil anticipates the USD 300 million to USD 700 million negative impact on earnings from lower gas prices to be offset by gains from higher oil prices.
  • Since acquiring Pioneer, Exxon more than doubled production to 1.3 mboepd from 2023. Full merger effects are expected in Q3.

Meta Surges 7% on Strong Q2 Report; Driven by Ad Growth, Q3 Forecast and AI Investments

By Uttkarsh Kohli

  • Meta’s Q2 revenue of $39.1B surpassed expectations, up 22% YoY. EPS jumped 73% YoY to $5.16, beating estimates.
  • Ad revenue within the Family of Apps rose 22% YoY, driven by online commerce and strong performance in Europe and the Rest of the World.
  • Q3 revenue forecasted between $38.5B and $41B. Meta’s AI investments are set to enhance ad delivery and support long-term growth, despite increasing CapEx.

Tech Supply Chain Tracker (02-Aug-2024): E Ink & Himax reveal color e-paper controller.

By Tech Supply Chain Tracker

  • E Ink and Himax introduce new color e-paper controller to enhance display technology, offering improved visual experience.
  • Taiwan’s Economic Minister outlines plans to boost global competitiveness, focusing on strategic initiatives to strengthen economy.
  • Shanghai commits $13.7 billion investment in IC, AI, and biopharma industries, driving growth in technology sectors.

Digi Plus Interactive (PLUS PM): Bingo Plus Platform, Trading At 7x PE with >100% Growth In 2024

By Sameer Taneja

  • DigiPlus Interactive (PLUS PM) is the Philippines platform for Bingo Plus and other e-casino games, trading at 7x in the midst of >100% growth in revenue/profitability in 2024. 
  • The company is net cash with a >50% ROE and is in an industry forecast by PAGCOR (regulator) to grow at least 15% CAGR in the future years.
  • We expect explosive Q2 revenue/profit growth of 226%/298% YoY which would act as a share price catalyst. We calculate a dividend of 0.80-1 peso/share (30-40% payout ratio), equating to a 4-5% yield.

Freelancer – Using AI to enhance revenue and profit growth

By Edison Investment Research

Freelancer reported a mixed performance in H124, with Escrow.com volumes down significantly after a very strong Q123, while the Freelancer platform benefited from growth in the Loadshift business. There are several promising opportunities in the enterprise business, including providing AI model training services and integration into new verticals within Escrow.com, that could reinvigorate growth from H224. Management is focused on making incremental improvements to the core marketplace platform with the aim of encouraging clients to become regular users of the platform and expanding the size of projects.

[Luckin Coffee (LKNCY US, SELL, TP US$16.5) TP Change]: Milkteaization Diminishes Differentiation

By Eric Wen

  • Luckin’s SSSG declined 20.9%YoY in the peak season, indicating diseconomies of scale for Luckin and a deteriorated competitive environment. We do not expect a quick turnaround in the near term.
  • We think Luckin has limited capability to further raise its prices in 3Q24, and expect its NPM to be 11.9%/7.1% in 3Q24/4Q24 as the new norm.
  • We keep SELL rating and lower TP to US$16.5/ADS. The stock trading at 20x/16x PE in 2024/2025, and we expect the NI to increase 15%CAGR in the next 2 years.

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