Smartkarma Daily Briefs

Rentokil Initial (RTO) is trading at a historically low valuation despite being in a resilient industry like pest control
Rentokil is well-managed with a long-tenured management team that consistently exceeds guidance and has a track record of double-digit EPS growth
With a P/E ratio of 17.5x, Rentokil presents an attractive investment opportunity with potential for a 30%+ return by the end of 2025 if targets are met and the multiple reverts to historical averages

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.

Rolls-Royce: Turbines and Tribulations – [Business Breakdowns, EP.174]

By Business Breakdowns

Rolls Royce is a British company known for its power business, mainly converting stored energy into kinetic energy through big engines such as airplane engines.
The company’s core business is in civil aerospace, with a focus on engineering excellence and a history dating back to the early 1900s.
The publicly traded entity of Rolls Royce Holdings focuses on the aerospace market, specifically in the production of airplane engines for large commercial planes and business.

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

Blackline Safety Corp (BLN.TO) – Wednesday, Apr 17, 2024

Blackline Safety provides gas detection and safety monitoring services, currently undervalued at 2.3x NTM sales
Transitioning from hardware to SaaS will potentially double the company’s value in 3 years
Management’s experience in the industry supports the company’s potential for future success and 100% upside over the next 3 years through revenue growth and margin improvement.

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Jul 19

Daily Brief TMT/Internet: KT Corp, Taiwan Semiconductor (TSMC) – ADR, Mediatek Inc, Dell Technologies , SilverSun Technologies , Singtel, Kinatico and more

By Smartkarma Daily Briefs | Daily Briefs, TMT/Internet

In today’s briefing:

Reasons Why KT’s Foreign Room Is Likely to Fall Below the 3.75% Cutoff Level
TSMC (2330.TT; TSM.US): The Outlook of 3Q24 Is Pretty Much In-Line, and GM Could Be Better.
We See TSMC’s Margins Increasing Much Higher Than Guidance in Long-Term; 2Q24 Shows Apple Ramping Up
MediaTek (2454.TT): 3Q24 Might Grow Slightly QoQ, While AI PCs Could Be Delivered in 2H25.
S&P 500 September Forecasts: Saved by the Dell?
Silversun Technologies Inc (SSNT) – Wednesday, Apr 17, 2024
Tech Supply Chain Tracker (19-Jul-2024): China’s auto exports, 2023.
Kinatico Ltd – FY24 NPAT up 225% and 60% ahead of RaaS forecasts
Kinatico (ASX:KYP) Georg Chmiel Interview

Reasons Why KT’s Foreign Room Is Likely to Fall Below the 3.75% Cutoff Level

By Sanghyun Park

KT’s foreign room has been exhausted due to value-up trading inflows, NPS selling shares, and KT canceling treasury stocks.
Hyundai Motor may sell 0.5% of its KT stake, likely to overseas investors. KT’s 700,000 share cancellation will lower foreign ownership to the low-4% range, possibly below 3.75% by November.
Focus on the stock price surge from ETF recall requests around the effective date, and note that passive outflow corrections typically occur afterward.

TSMC (2330.TT; TSM.US): The Outlook of 3Q24 Is Pretty Much In-Line, and GM Could Be Better.

By Patrick Liao

TSMC expects sales to grow by mid-20% YoY in USD in 2024, compared to low to mid-20% previously.
The N3/N5 capacity is very tight, and they are even working with customers for 2026 capacity requirements, while N2 is on track to enter MP in 4Q25.
A16 will enter MP in 2H26, and it’s first process starts adopting backside power.

We See TSMC’s Margins Increasing Much Higher Than Guidance in Long-Term; 2Q24 Shows Apple Ramping Up

By Vincent Fernando, CFA

Significant revenue guidance hike — TSMC reported 2Q24 results, increasing 2024E revenue growth guidance to exceed ‘mid-20’s’ percent, a significant hike from previous guidance.
Management is low-balling LT margins — Latest figures and long-term margin color makes us believe that TSMC will be able to increase GM much higher than current official LT guidance.
Signs of Apple expecting strong iPhone 16 sales — TSMC reported strength in smartphone end-applications and we believe this is reflective of Apple ramping up re: stronger iPhone volume expectations.

MediaTek (2454.TT): 3Q24 Might Grow Slightly QoQ, While AI PCs Could Be Delivered in 2H25.

By Patrick Liao

Mediatek Inc (2454 TT) is forecasted to experience slight growth in 3Q24 compared to 2Q24.
Qualcomm Inc (QCOM US) is expected to introduce AI PCs in 2024, while Mediatek Inc (2454 TT) scheduled for this product is anticipated to delivered in 2H25.
The shipment forecast for the Dimensity 9400 is approximately 5 million sets in 2H24.

S&P 500 September Forecasts: Saved by the Dell?

By Dimitris Ioannidis

Dell Technologies (DELL US) is the main candidate for addition-transition with uncertainty arising from the ‘Multiple Share Classes’ criterion. Forecasted demand is ~$7bn and ~4 ADV.
Williams Sonoma (WSM US) is one of the top candidates for addition-migration with uncertainty due to the migrations’ inconsistent market cap selection pattern. Forecasted demand is $840m and ~2.6 ADV.
American Airlines Group (AAL US) is one of the main candidates for deletion with uncertainty due to price hence ranking fluctuations until cut-off. Forecasted supply is $290m and ~0.8 ADV.

Silversun Technologies Inc (SSNT) – Wednesday, Apr 17, 2024

By Research as a Service (RaaS)

Author admires Brad Jacobs’ entrepreneurial success but questions high valuation of SilverSun Technologies
Conversion of SSNT into stake in QXO implies optimistic market capitalization of $46 billion
Author remains skeptical of QXO valuation despite Jacobs’ successful track record

Tech Supply Chain Tracker (19-Jul-2024): China’s auto exports, 2023.

By Tech Supply Chain Tracker

XPeng and Baidu leading China’s autonomous driving technology advancements in 2023
Malaysia’s semiconductor sector set for growth in 3Q24 with talent recruitment and AI integration
Singtel partners with SK Telecom for 6G and AI innovation, while automakers persist in V2X development efforts

Kinatico Ltd – FY24 NPAT up 225% and 60% ahead of RaaS forecasts

RaaS Research Group has published an update report on ‘Know Your People’ regtech company, Kinatico (ASX:KYP) following its Q4 FY24 result which confirmed the company delivered NPAT of $0.8m for FY24, up 225% on FY23 and 60% ahead of our forecast.
Q4 SaaS revenue jumped 40% on the pcp to $2.8m and was 12% ahead of Q3 and was ahead of our expectations.
Transactional revenue of $4.5m for the quarter was flat on Q3 and down 12% on the pcp.

Kinatico (ASX:KYP) Georg Chmiel Interview

By Research as a Service (RaaS)

RaaS Research Group recently interviewed Kinatico Non Executive Director Georg Chmiel on what attracted him to join the KYP board in September 2023.
We discussed the merits of platform businesses and his experiences with technology platform companies.
Mr Chmiel noted the merits of recurring revenues, including higher margins than one-time or transactional revenue, and lower costs as the platform becomes more scalable.

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Jul 19

Daily Brief Industrials: Pylon Technologies , Ryanair Holdings, Rentokil Initial , Rolls-Royce Holdings, Blackline Safety and more

By Smartkarma Daily Briefs | Daily Briefs, Industrials

In today’s briefing:

Quiddity Leaderboard STAR 50 Sep 24: Final Ranks; Some Question Marks over Ninebot Re-Inclusion
Ryanair – Pricing Appears to Be Softening; Re-Setting Profitability Expectations
Rentokil Initial Plc (RTO) – Wednesday, Apr 17, 2024
Rolls-Royce: Turbines and Tribulations – [Business Breakdowns, EP.174]
Blackline Safety Corp (BLN.TO) – Wednesday, Apr 17, 2024

Quiddity Leaderboard STAR 50 Sep 24: Final Ranks; Some Question Marks over Ninebot Re-Inclusion

By Janaghan Jeyakumar, CFA

STAR 50 Index is a tech-focused, blue-chip index in Mainland China which tracks the top 50 largest and most liquid names in the STAR market of the Shanghai Stock Exchange.
Unlike the other popular Chinese indices (CSI, SSE, ChiNext, etc.) that rebalance semiannually, the STAR 50 index has a quarterly rebalance cycle and the next rebalance will be in September.
With the reference period for the September 2024 STAR 50 index rebal event coming to an end, we have presented our final expectations for ADDs and DELs in this insight.

Ryanair – Pricing Appears to Be Softening; Re-Setting Profitability Expectations

By Neil Glynn

Latest fare data suggests an incrementally more concerning trend for Ryanair pricing from June.
Concerns over pricing continue to increase in Europe, following Lufthansa’s profit warning last week.
We cut our FY25 net income by 9% to €2,289m albeit remain above consensus of €2,170m.

Rentokil Initial Plc (RTO) – Wednesday, Apr 17, 2024

Rentokil Initial (RTO) is trading at a historically low valuation despite being in a resilient industry like pest control
Rentokil is well-managed with a long-tenured management team that consistently exceeds guidance and has a track record of double-digit EPS growth
With a P/E ratio of 17.5x, Rentokil presents an attractive investment opportunity with potential for a 30%+ return by the end of 2025 if targets are met and the multiple reverts to historical averages

Rolls-Royce: Turbines and Tribulations – [Business Breakdowns, EP.174]

By Business Breakdowns

Rolls Royce is a British company known for its power business, mainly converting stored energy into kinetic energy through big engines such as airplane engines.
The company’s core business is in civil aerospace, with a focus on engineering excellence and a history dating back to the early 1900s.
The publicly traded entity of Rolls Royce Holdings focuses on the aerospace market, specifically in the production of airplane engines for large commercial planes and business.

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

Blackline Safety Corp (BLN.TO) – Wednesday, Apr 17, 2024

Blackline Safety provides gas detection and safety monitoring services, currently undervalued at 2.3x NTM sales
Transitioning from hardware to SaaS will potentially double the company’s value in 3 years
Management’s experience in the industry supports the company’s potential for future success and 100% upside over the next 3 years through revenue growth and margin improvement.

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Jul 19

Daily Brief Health Care: Capitol Health, Grifols , Staar Surgical Co, Evotec AG, Medicus Pharma , Tonix Pharmaceuticals Holding and more

By Smartkarma Daily Briefs | Daily Briefs, Healthcare

In today’s briefing:

Capitol Health (CAJ AU): Binding Merger with Integral Diagnostics (IDX AU)
Capitol Health (CAJ AU)/Integral Diagnostics (IDX AU): An Improved Image – Now Firmed
Liquid Universe of European Ordinary and Preferred Shares: July‘24 Report
STAAR Surgical Takeover Speculation: 4 Reasons Why We Are Optimistic! – Major Drivers
Evotec SE Potential Takeover: Does It Have What It Takes To Get Acquired? – Major Drivers
Medicus Pharma Ltd. – Medicus Submits Updated Phase 2 Clinical Protocol
TNXP: High Interest in Tonmya Seen in Initial Findings from Market Opportunity Analysis

Capitol Health (CAJ AU): Binding Merger with Integral Diagnostics (IDX AU)

Capitol Health (CAJ AU) has entered a binding merger proposal with Integral Diagnostics (IDX AU) at 0.12849 Integral shares per Capitol share.
The transaction will require approval from the ACCC and Capitol shareholders. Due to the minimal geographic overlap, ACCC clearance should be forthcoming.
The offer is attractive compared to historical exchange ratios, trading ranges and peer multiples. At the last close, the gross spread was 8.0%.

Capitol Health (CAJ AU)/Integral Diagnostics (IDX AU): An Improved Image – Now Firmed

By David Blennerhassett

Back on the 17th June, diagnostic imaging provider Capitol Health (CAJ AU) announced it had entered into a process deed with Integral Diagnostics (IDX AU). Terms are now firmed.
IDX will issue 0.12849 new IDX shares for each Capitol share. Scrip terms are unchanged from that announced previously. Upon completing the transaction, Integral would hold 63% in the NewCo.
Apart from ACCC signing off, this transaction looks priced to complete.

Liquid Universe of European Ordinary and Preferred Shares: July‘24 Report

By Jesus Rodriguez Aguilar

Since mid-June, share-price spreads have generally tightened across our European liquid universe of ordinary and preferred shares (13 have tightened, 5 widened, 1 remained at same level).
Recommended trades long preferred / short ordinary shares: Atlas Copco, Grifols (see section on the company), Media-for-Europe, Sixt.
Recommended trades long ordinary / short preferred shares: Henkel, SSAB Svenska Stal.

STAAR Surgical Takeover Speculation: 4 Reasons Why We Are Optimistic! – Major Drivers

By Baptista Research

The first quarter of 2024 saw STAAR Surgical achieve a noteworthy result by generating net sales of $77.4 million, surpassing the expectations set for this period.
This result underscores the effectiveness of STAAR Surgical’s refined commercial strategy and the high uptake of its proprietary EVO ICL technology across all key geographical regions.
With a year-over-year increase represented by these figures, the company successfully navigated the challenges of a market predominantly inclined towards laser vision correction, where it successfully captured additional market share.

Evotec SE Potential Takeover: Does It Have What It Takes To Get Acquired? – Major Drivers

By Baptista Research

In assessing Evotec SE’s Q1 2024 fiscal results and its potential for acquisition, a reflection on both financial metrics and strategic initiatives offers insight.
Evotec SE, amidst a challenging market environment, reported a slight revenue decrease of 2% year-over-year, totaling EUR 208.8 million in Q1 2024.
The company’s primary revenue contraction stemmed from its Shared R&D business, which saw a decline of 23% compared to the same quarter in the previous year.

Medicus Pharma Ltd. – Medicus Submits Updated Phase 2 Clinical Protocol

By Zacks Small Cap Research

Medicus Pharma Ltd. (TSXV:MDCX) is focused on acquiring or partnering with life-science companies that are developing novel therapeutics for unmet healthcare needs that are already in the clinical trial stage.
Management plans fast-track these specific therapies through FDA clinical trials toward commercialization.
The company’s first acquisition was SkinJect, which has a novel, patented transdermal patch for the treatment of BCC.

TNXP: High Interest in Tonmya Seen in Initial Findings from Market Opportunity Analysis

By Zacks Small Cap Research

On May 13, 2024, Tonix Pharmaceuticals Holding Corp. (TNXP) announced financial results for the first quarter of 2024 and provided a business update.
Tonix will be filing a New Drug Application (NDA) for Tonyma (TNX-102 SL cyclobenzaprine HCl) for fibromyalgia in the second half of 2024 based on positive results from the Phase 3 RELIEF and RESILIENT trials.
The company recently announced key findings from the initial phase of a market opportunity analysis for Tonmya by EVERSANA, including a high dissatisfaction rate with currently prescribed drugs for fibromyalgia patients, a high unmet need for effective therapies, and a high level of interest in Tonmya with an intended use of 40% among surveyed physicians.

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Jul 19

Daily Brief Financials: Huafa Property Services Group, Invincible Investment, Kyoto Financial Group , iShares 20+ Year Treasury Bond ETF, Cls Holdings and more

By Smartkarma Daily Briefs | Daily Briefs, Financials

In today’s briefing:

Huafa Property Services (982 HK): Wide Spread Ahead of the 28 August Vote
Invincible Investment Corp Placement – Another Accretive Acquisition, past Deals Have Done Well
Kyoto Financial Group (5844 JP) – Limited Shareholdings Unwind, for Now
Ishare 20+ Year Treasury Bond Etf (TLT – Nov 15th 2024 $100 ) – Wednesday, Apr 17, 2024
CLS Holdings USA, Inc. – Water Tower Hour Recap

Huafa Property Services (982 HK): Wide Spread Ahead of the 28 August Vote

Huafa Property Services Group (982 HK)’s IFA opines that Huafa Industrial Co., Ltd. Zhuhai (600325 CH)’s HK$0.29 privatisation offer is fair and reasonable. The vote is on 28 August.
Key conditions include approval by at least 75% of independent shareholders (<10% of independent shareholders rejection) and a headcount test. The offer price is final.
No shareholder holding a blocking stake, low AGM minority participation rate and calm retail boards suggest low vote risk. At the last close, the gross/annualised spread is 9.4%/52.5%.

Invincible Investment Corp Placement – Another Accretive Acquisition, past Deals Have Done Well

By Clarence Chu

Invincible Investment (8963 JP) is looking to raise around US$375m in its primary follow-on offering. The proceeds will be used to partially acquire 12 assets from its Sponsor’s affiliates.
The REIT has been very active on the acquisition front, and has highlighted its ongoing discussions with its Sponsor for acquisitions. Thus, the current deal should be well flagged.
In this note, we talk about the deal dynamics and run the deal through our ECM framework.

Kyoto Financial Group (5844 JP) – Limited Shareholdings Unwind, for Now

By Victor Galliano

Kyoto Financial’s stakes in three key listed Japanese corporates are valued at over 85% of its market capitalization with its total equity holdings accounting for 130%+ of its market capitalization
Kyoto management intends to retain the bulk of the bank’s equity holdings, opposing the growing trend for Japanese listed companies to unwind crossholdings; management will review this policy in November
In the near term, we see no major catalyst for Kyoto to accelerate its equity holdings unwind and so, combined with its underwhelming fundamentals, we are negative on Kyoto Financial

Ishare 20+ Year Treasury Bond Etf (TLT – Nov 15th 2024 $100 ) – Wednesday, Apr 17, 2024

Consider purchasing Nov 15th 2024 calls with a $100 strike price for TLT as a hedge against inflation and US debt concerns
Analyst behind recommendation has seen success with asymmetrical portfolio hedges in the past, turning small investments into significant returns
Investing in these calls could provide a sanity hedge and offensive strategy for the future, potential for significant gains if market trends continue as predicted

CLS Holdings USA, Inc. – Water Tower Hour Recap

By Water Tower Research

Seeing the medical benefits of cannabis inspired Ramalho to dedicate his career to helping others.
He shares how he started at CLS as budtender, advanced to management roles, and eventually became COO of the company.
We cover the CLS’ key assets including Oasis Cannabis Dispensary, a popular retail cannabis store for locals and visitors.

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Jul 19

Daily Brief Consumer: Honda Motor, Thai Beverage, MercadoLibre , Lands’ End Inc, Dollar General, Betterware de Mexico Sab de CV, Health And Happiness (H&H), Perfect Medical Health and more

By Smartkarma Daily Briefs | Consumer, Daily Briefs

In today’s briefing:

Big Honda (7267) Offering – Flow Timing Matters
Thai Bev (THBEV SP): Exits Property, Boosts F&N Stake. Deal Valuation Seem Excessive
MercadoLibre: Analyzing the Market Reaction to S&P’s Outlook Change
LE: Mgmt. Meetings Confirm Positives; Raising PT to $20 (From $17); Reit. Buy
Dollar General Corp (DG) – Wednesday, Apr 17, 2024
BWMX: 2Q Preview: Another Quarter of Strong Proof; Reiterate Buy, $22.50 PT
Morning Views Asia: Anton Oilfield, Health And Happiness (H&H), Vedanta Resources
Perfect Medical (1830 HK): Gleanings from the Annual Report and Presentation For FY24

Big Honda (7267) Offering – Flow Timing Matters

By Small Cap Consumer Research

The ¥500bn Offering of Honda shares is now priced (¥1,664.5/share) making it ¥497.46bn. Bookbuilding for retail – 80% of the book – is now. The price today closed at ¥1,665/share.
The Offering has follow-on “non-discretionary” demand which is non-negligible. It is worth understanding the amounts and timing.
The lockups and non-discretionary demand, along with Honda’s relative cheapness as a large cap OEM and likely upcoming offerings on competitors means it has support.

Thai Bev (THBEV SP): Exits Property, Boosts F&N Stake. Deal Valuation Seem Excessive

By Devi Subhakesan

Thai Beverage(THBEV SP) has proposed a share swap-deal with a promoter company to acquire additional stake in FraserAnd Neave(FNN SP) in exchange for Frasers Property at negotiated valuations, not market prices.
Post-Completion of the swap deal with the promoter-owned entity, which requires shareholder approval, Thai Bev will hold a 69.6% stake in F&N and no stake in Fraser Property (FPL).
If the stake swap were valued at yesterday’s closing share prices, it would imply a drop in the total stake value for Thai Bev after the proposed deal.

MercadoLibre: Analyzing the Market Reaction to S&P’s Outlook Change

By Leandro Gubler

S&P revised MELI’s credit rating outlook to positive from stable and affirmed its BB+ issuer credit rating.
MELI’s credit metrics are considerably stronger than its peers in the high-yield rating category
MELI’s bonds have arguably already been trading at the investment grade level, supported by the company’s solid credit metrics for the rating category.

LE: Mgmt. Meetings Confirm Positives; Raising PT to $20 (From $17); Reit. Buy

We are reiterating our Buy rating and projections and raising our price target to $20 (from $17) after meeting with Lands’ End management at their headquarters in Dodgeville, Wisconsin.
We believe management is laser focused on continuing to drive higher overall returns to the company, from shifting the product mix, lowering inventories, realizing higher pricing, focusing on features and stories to drive deeper customer interaction and loyalty, deepening licensing penetration on non-core categories, expanding internationally and driving stronger results at the Outfitters segment.
The emphasis on leveraging the highly trusted Lands’ End moniker to maximize brand equity, drive higher returns and create an even more compelling lifestyle story is still in the early stages and, we believe, will drive multi-period growth.

Dollar General Corp (DG) – Wednesday, Apr 17, 2024

By Small Cap Consumer Research

Author may buy or sell securities related to discussed issuer without informing readers
Information presented is believed to be accurate but not guaranteed in terms of accuracy or completeness
Author’s views are opinion-based and subject to change at any time; readers advised to do their own research and not base investment decisions on the note

BWMX: 2Q Preview: Another Quarter of Strong Proof; Reiterate Buy, $22.50 PT

We are reiterating our Buy rating, $22.50 price targe and projections for Betterware de Mexico with the company reporting 2Q24 (June) results after the close on Thursday.
We believe, while the Betterware division may be a drag (due primarily to foreign exchange), JAFRA continued to shine and the expansion into the United States has slowly begun to gain momentum at both Betterware and JAFRA.
Further, we expect management to remain positive over key trends and for the company to once again reiterate overall guidance for 2024.

Morning Views Asia: Anton Oilfield, Health And Happiness (H&H), Vedanta Resources

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.

Anton Oilfield
Health And Happiness (H&H)
Vedanta Resources

Perfect Medical (1830 HK): Gleanings from the Annual Report and Presentation For FY24

By Sameer Taneja

We analyze the audited annual report of Perfect Medical Health (1830 HK) released on the 16th of July. We also analyzed the company’s FY24 presentation.
The key takeaway is that the company will endeavor to improve its efficiency by cross-selling more services through Beauty Supermarket and expanding the sleep therapy business with Goku.
Trading at a 12.5% dividend yield with 17% of its market cap in cash and >50% ROEs, the business is solid and worth exploring as an investment.

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Jul 19

Most Read: Aisin , Hygeia Healthcare Group, Kokusai Electric , KT Corp, Honda Motor, Samson Holding, Huafa Property Services Group, Thai Beverage, Advanced Info Service, Capitol Health and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

Toyota Group Cross-Holding Structure Primer – Holdings, Unwind Progress, Buyback Policies, Etc
Hong Kong: Stocks Facing the Passive Boot in August
Kokusai Electric Placement Updates – Misbehaving
Reasons Why KT’s Foreign Room Is Likely to Fall Below the 3.75% Cutoff Level
Big Honda (7267) Offering – Flow Timing Matters
Samson (531 HK): MBO Via A Scheme
Huafa Property Services (982 HK): Wide Spread Ahead of the 28 August Vote
Thai Bev (THBEV SP): Exits Property, Boosts F&N Stake. Deal Valuation Seem Excessive
GULF/INTUCH Merger & ADVANC/THCOM VTO’s
Capitol Health (CAJ AU): Binding Merger with Integral Diagnostics (IDX AU)

Toyota Group Cross-Holding Structure Primer – Holdings, Unwind Progress, Buyback Policies, Etc

Last September in the release of its new Mid-Term Management Plan, Toyota Group member Aisin (7259 JP) announced a plan to cut cross-holdings to zero. JTEKT Corp (6473 JP) followed suit.
It started with a selldown of Denso Corp (6902 JP), then Toyota Industries (6201 JP), now Aisin. Last FY, Toyota Group cos reduced crossholdings by ¥870bn. This year will be more.
Attached below is a general breakdown of Toyota Group cross-holdings, discussion of cross-holding policies, and analysis of what is next, and what is not.

Hong Kong: Stocks Facing the Passive Boot in August

By Brian Freitas

There are a bunch of stocks listed in Hong Kong that have underperformed the HSCEI INDEX and their peers and could be deleted from global passive portfolios in August.
The deletion from passive portfolios will lead to a liquidity event at the end of August where passive trackers will need to sell multiple days of ADV.
There has been a big jump in cumulative excess volume in some stocks and the A/H premium on a lot of the names has jumped over the last few months.

Kokusai Electric Placement Updates – Misbehaving

By Sumeet Singh

KKR and KSP Kokusai Investments are looking to raise approximately US$1.7bn through an extended secondary follow-on offering, via selling approximately 22.3% of Kokusai Electric (6525 JP).
We have looked at the lockup expiry and deal dynamics in our earlier notes.
In this note, we talk about share price performance since then.

Reasons Why KT’s Foreign Room Is Likely to Fall Below the 3.75% Cutoff Level

By Sanghyun Park

KT’s foreign room has been exhausted due to value-up trading inflows, NPS selling shares, and KT canceling treasury stocks.
Hyundai Motor may sell 0.5% of its KT stake, likely to overseas investors. KT’s 700,000 share cancellation will lower foreign ownership to the low-4% range, possibly below 3.75% by November.
Focus on the stock price surge from ETF recall requests around the effective date, and note that passive outflow corrections typically occur afterward.

Big Honda (7267) Offering – Flow Timing Matters

The ¥500bn Offering of Honda shares is now priced (¥1,664.5/share) making it ¥497.46bn. Bookbuilding for retail – 80% of the book – is now. The price today closed at ¥1,665/share.
The Offering has follow-on “non-discretionary” demand which is non-negligible. It is worth understanding the amounts and timing.
The lockups and non-discretionary demand, along with Honda’s relative cheapness as a large cap OEM and likely upcoming offerings on competitors means it has support.

Samson (531 HK): MBO Via A Scheme

By David Blennerhassett

Furniture trader Samson Holding (531 HK) has announced a Scheme from Shan Huei Kuo, Samson’s Chairman.
The Cancellation price is $0.48, a 50% to last close. The premium is more pronounced if going back a month. The price is final.
This looks done. But Samson is an illiquid micro cap.

Huafa Property Services (982 HK): Wide Spread Ahead of the 28 August Vote

Huafa Property Services Group (982 HK)’s IFA opines that Huafa Industrial Co., Ltd. Zhuhai (600325 CH)’s HK$0.29 privatisation offer is fair and reasonable. The vote is on 28 August.
Key conditions include approval by at least 75% of independent shareholders (<10% of independent shareholders rejection) and a headcount test. The offer price is final.
No shareholder holding a blocking stake, low AGM minority participation rate and calm retail boards suggest low vote risk. At the last close, the gross/annualised spread is 9.4%/52.5%.

Thai Bev (THBEV SP): Exits Property, Boosts F&N Stake. Deal Valuation Seem Excessive

By Devi Subhakesan

Thai Beverage(THBEV SP) has proposed a share swap-deal with a promoter company to acquire additional stake in FraserAnd Neave(FNN SP) in exchange for Frasers Property at negotiated valuations, not market prices.
Post-Completion of the swap deal with the promoter-owned entity, which requires shareholder approval, Thai Bev will hold a 69.6% stake in F&N and no stake in Fraser Property (FPL).
If the stake swap were valued at yesterday’s closing share prices, it would imply a drop in the total stake value for Thai Bev after the proposed deal.

GULF/INTUCH Merger & ADVANC/THCOM VTO’s

By Brian Freitas

In 2021, Gulf Energy Development (GULF TB) made an offer to acquire all Intouch Holdings (INTUCH TB) shares at THB65/share. Singtel (ST SP) did not tender their then 21% stake.
Now Gulf Energy Development (GULF) and Intouch Holdings (INTUCH) are looking to merge and that will result in VTO’s for Advanced Info Service (ADVANC TB) and Thaicom Pcl (THCOM TB).
The merger will result in an inclusion to the SET 50 Index in the first quarter of 2025. There is the December rebalance before that.

Capitol Health (CAJ AU): Binding Merger with Integral Diagnostics (IDX AU)

Capitol Health (CAJ AU) has entered a binding merger proposal with Integral Diagnostics (IDX AU) at 0.12849 Integral shares per Capitol share.
The transaction will require approval from the ACCC and Capitol shareholders. Due to the minimal geographic overlap, ACCC clearance should be forthcoming.
The offer is attractive compared to historical exchange ratios, trading ranges and peer multiples. At the last close, the gross spread was 8.0%.

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Jul 19

Daily Brief Quantitative Analysis: ASX Short Interest Weekly (Jul 12th): Wesfarmers and more

By Smartkarma Daily Briefs | Daily Briefs, Quantitative Analysis

In today’s briefing:

ASX Short Interest Weekly (Jul 12th): Wesfarmers, Mineral Resource, Macquarie, South32, Car

ASX Short Interest Weekly (Jul 12th): Wesfarmers, Mineral Resource, Macquarie, South32, Car

By Ke Yan, CFA, FRM

We analyzed the changes in short interest of ASX Stocks as of Jul 12th (reported today) which has an aggregated short interest worth USD20.9bn.
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 Wesfarmers, Mineral Resource, Macquarie, South32, Car.

💡 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

Jul 19

Daily Brief ECM: Big Honda (7267) Offering – Flow Timing Matters and more

By Smartkarma Daily Briefs | Daily Briefs, ECM

In today’s briefing:

Big Honda (7267) Offering – Flow Timing Matters
Invincible Investment Corp Placement – Another Accretive Acquisition, past Deals Have Done Well
Premier Energies Pre-IPO – Still Ramping up but Already Profitable

Big Honda (7267) Offering – Flow Timing Matters