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• A weekly summary of key developments across ECM and Event-Driven names tracked by us across Hong Kong, Australia, New Zealand, Singapore, Indonesia, Malaysia, Thailand, Korea and Chinese ADRs.
• On the ECM front, Tianqi Lithium (9696 HK) listed its H Shares, WCP (WCP KS) plans to launch a KRW900 billion (US$692 million) IPO in August. 
• Event-Driven developments at Link Administration (LNK AU), DTAC/True, BYD (1211 HK), Genting Singapore (GENS SP), Tassal (TGR AU), Resapp Health (RAP AU), Dongzheng Automotive Finance (2718 HK).      

• With discounting delayed, Fast Retailing (9983 JP)’s 3QFY22 was a surprise to the upside as its OP grew 36.5% YoY to ¥81.8bn (consensus:¥65.8bn) to exceed the pre-COVID level by 9.7%.
• Nevertheless, the upside seems limited in the short-term, with shares already trading at a stretched valuation of 22.2x consensus FY+2 OP, compared to the historical median of 15.5x.
• At around ¥290.0bn FY+1 OP, a fair price should be somewhere around ¥58,000-60,000, which implies a downside of around 25%.

• Galaxy presents a bull case as Macau still struggles with Beijing zero tolerance policy.
• Its huge cash position will comfortably outlast the monthly burn rate for at least three to five years ahead by which time, covid might be long gone.
• Galaxy stock is caught in the overall bearish outlook on the sector. Time to accumulate with a relatively low risk on.

• Berkshire appears set to exit BYD (1211 HK) partially or in full. But why signal to market well in advance?
• United Tractors (UNTR IJ)‘s buyback should be impactful. They could do another one afterwards as they have lots of cash. This is a raging buy. Buy now. With both hands.
• The BOJ was expected to change its ETF allocations. It stopped buying Nikkei 225 and JPX Nikkei 400 ETFs. As the world moves more to passive, expect float to decrease.

• SOCAR revised its IPO prospectus. What has changed is the date when the book building for the institutional investors starts (4 August). 
• The IPO price range remains at 34,000 won to 45,000 won. The IPO base offering size is also between US$120 million to US$159 million. 
• We maintain our base case valuation of Socar (target price of 27,967 won), which is 18% lower than the low end of the IPO price range of 34,000 won. 

• Aequitas Research puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs.
• Tianqi’s soggy debut in Hong Kong despite its wide discount will probably put Hong Kong ECM back in snooze mode for a while
• There were no major placements this week and its likely to remain that was as we approach the half-yearly results season.

• There are 44 – 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 this week: Kanemi Co Ltd (2669 JP)‘s tender Offer, and Glory Star New Media Group Holdings (GSMG US)‘s underwhelming MBO.
• Key updates took place for: AGL Energy Ltd (AGL AU), Link Administration (LNK AU) & Genting Singapore (GENS SP) 

• Bloomberg is reporting Genting Singapore (GENS SP) has been attracting suitors, including MGM Resorts International (MGM US).
• With Macau all-but emulating a Shanghai-style lockdown, including the recent shuttering of all casinos, large global casino operators will be looking to diversify their revenue base. 
• But with Singapore potentially emerging as Asia’s go-to gaming destination going forward, it’s unlikely the Lim family will exit their Genting flagship.

• Bloomberg reported MGM Resorts International (MGM US) recently approached Genting Singapore (GENS SP)’s controlling shareholder, Genting Bhd (GENT MK), to express an interest in a deal.  
• While the discussions with MGM Resorts have fizzled out, other potential suitors are reportedly interested. Shares are in a trading halt pending a response to an SGX query.
• Genting Singapore trades at a discount to peers. Precedent transactions suggest a potential privatisation price of at least S$1.00 per share, a 33% premium to the last close. 

• We recommend BUY for M supported by three main reason:1) a strong earnings recovery outlook in 2022-24,2) net cash position with upside from new M&A deal and LCS franchise fees
• Earnings is expected to turn positive and strongly QoQ improvement in 2Q22 We expect 2Q22 net profit to be at Bt444m (+64%QoQ), recovery from a loss of Bt99m in 2Q21
• Rising food costs are manageable   Most of costs are raw material costs and the major portion of food cost are pork and poultry.

• Tatas are scripting India’s early journey in electric cars – Tata Motors Ltd (TTMT IN) accounted for 87% of the 8077 electric cars sold in Q1FY23 (1605 units in Q1FY22).
• The rapid roll-out of charging infrastructure across the country by Tata Power (TPWR IN) and the success of Tata’s electric car (compact SUV). Tata Nexon EV, are key factors. 
• Demand and infrastructure for electric cars seem to be in place but market growth is restricted by a lack of choice/adequate supply in the popular price range (<USD 20K).

• Inside is a recap of movements in the last week relating to the Shanghai and Shenzhen-Hong Kong Stock Connect facilities, broken down by company and industry.
• Overall, the net outflow over the past week was ~US$0.56bn, split (-US$0.44bn) for Shanghai and (-US$0.12bn) for Shenzhen.
• The largest inflows were into Geely Auto (175 HK) and Hang Seng H Share Index ETF (2828 HK). The largest outflow was in Meituan (3690 HK) and CNOOC (883 HK).

• There must be a rationale for car sharing to receive a higher valuation than the traditional rental car business. For this, profit per vehicle must be provided, not sales.
• Also, whether SOCAR can justify its valuation built on the relatively high valuation premiums granted to ccOS and FMS companies is still questionable.
• Concerning fund flow, it is positive that SOCAR can aim for LG Energy’s six-month lockup release. But it is unclear how much flow will be left for SOCAR after WCP.

• Astra International (ASII IJ) is coming up cheap after United Tractors (UNTR IJ) positively responded to its large share buyback announcement. Yet both companies are looking attractive here. 
• Preceding my comments on Astra and United Tractor 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%.

• According to Reuters, Alibaba Group (9988 HK)’s supermarket chain Freshippo is seeking to raise around $400-500m from a fresh funding round which values the loss making company at $6.0bn.
• The fact that Alibaba is willing to dilute ownership at a significant discount to its expected valuation is an additional sign that Alibaba could be running into some financial difficulties.
• Having slashed spending budgets of its smaller investments and more down rounds expected in ventures that are considered too big to fail, we anticipate a challenging time ahead.   

• Strong Q1 results have pushed up the share price offering a good entry point for Shorts
• We think that full year guidance remains a risk given input costs and ability to push through higher prices
• Given the risks, persistently low margins and returns to equity, we remain bearish

• The EURO STOXX 50 Index is one of the most highly-tracked indices in mainland Europe and the annual index review takes place in September.
• Historically, these Rebalance events have had significant volume impact and they generally involve large cap names. 
• In this insight, we take a look the names leading the race to become ADDs/DELs for the upcoming index review in September 2022.

• We are initiating coverage of WD-40 Company (WDFC) with a Sell Rating and $88 target.
• We believe WDFC is prone to an earnings decline stemming from higher input costs and the Company’s first in first out accounting practice.
• People are no longer staying indoors. The squeaking door is not bothering anyone like it used to. WDFC benefited from people staying home during pandemic. Now inventory is rising

• Innova Captab (1605221D IN)  is looking to raise about US$115m in its upcoming India IPO. The deal will be run by ICICI and JM Financial.
• Innova Captab is an integrated pharmaceutical company in India with a presence across the pharmaceuticals value chain including research and development, manufacturing, drug distribution and marketing and exports. 
• Its business includes a contract development and manufacturing organization (CDMO) business providing manufacturing services to Indian pharmaceutical companies, a domestic branded generics business and an international branded generics business.

• This post explains how the rebalancing of the KOSPI 200 and KOSDAQ 150 is calculated. So, please note that this post does not have any investment recommendations.
• Both indices have the same calculation method. However, the thresholds are different. They screen stocks using the three metrics: Market Cap, ADTV, and Market Cap Ranking (buffer).
• The concept itself of these three metrics is not difficult. However, ranking it cumulatively often confuses us.

• In this insight, we discuss a pair trade involving going long on Inner Mongolia Yili Industrial Group (A) (600887 CH)(“Yili”) and going short on China Mengniu Dairy Co (2319 HK).
• Yili has more impressive financial metrics than China Mengniu Dairy in terms of ROE, operating margins, and sales growth. However, Yili is trading at lower EV/EBITDA than China Mengniu Dairy.
• Yili should be trading at premium valuation than China Mengniu Dairy. Therefore, we believe Yili is well poised to outperform China Mengniu Dairy’s share price in the next 12 months. 

• SML Group (SMLGZ HK) is looking to raise about US$200m in its upcoming Hong Kong IPO. The deal will be run by BNP Paribas.
• SML Group (SMLG) is a vertically integrated digital identification solutions provider. It primarily engages in developing, manufacturing and selling label and tag products with RFID, a leading item-level identification technology.
• SMLG operates globally across 24 countries and as of the latest practicable date (17 Jun 22), had 23 production facilities in 18 countries.

• India’s Open Network for Digital Commerce (ONDC) is expected to break duopolies across the digital commerce ecosystem including e-marketplaces like Flipkart Online Services (1398508D IN) & Amazon.com Inc (AMZN US). 
• We think it is the other way around. We expect them to thrive and become even more dominant in case the market expands as envisioned under ONDC. 
• While it could be too early & premature, Walmart (WMT US) thanks to its investments in Flipkart and the path chosen by PhonePe is better placed compared to Amazon in India.

• Faraday has been actively looking for financing as cash on hand in April was only $222m and its cash-burn in Q1 ran at $173m.
• On top of SEC & DoJ investigations, Faraday’s financing efforts are further hampered by a recent proxy battle against the Board of Directors launched by Faraday’s founder.
• Faraday “believes” it has enough cash to see the launch its first EV in Q3, but Q2 results may show it has little cash left for a successful ramp-up.  

• Just days after BYD (1211 HK) surpassed Tesla Motors (TSLA US) as the world’s largest electric vehicle producer by sales, is Warren Buffet cashing in his chips?
• 225mn shares of BYD  – 7.73% of the H shares – moved into CCASS yesterday. These are Berkshire Hathaway’s shares. 
• For a shareholder who has kept his holding in share certificates for 13 years, this development suggests the possibility of a partial or full exit. 

• The price diversion between LG Chem and LG Energy has deepened considerably over the past two days. The sigma is currently -2.35. It is virtually the most extreme level year-to-date.
• LG Energy’s immediate-term overhang risk will likely offset the upcoming passive inflow event. In addition, the intensity of their price cointegration has not been weakened in recent months.
• Therefore, we should consider setting up reversion trading from this point on, aimed at the lockup release on July 27.

• Topsports International (6110 HK) is trading cheap to peers Anta Sports Products (2020 HK) and Li Ning (2331 HK), and to partners Nike (NKE US) and Adidas AG (ADS GR).
• Like for so many companies in China, the combination of severe lockdown restrictions and global supply chain disruptions has impacted Topsports operations.
• Yet forward operational updates may surprise to the upside.  Management appears confident of their “immersive shopping experience” strategy, and recently declared a special dividend for FY22 (Feb Y/E). 

• The increase of 225.2 million CCASS shares deposited with Citibank matches Berkshire Hathaway Inc Cl B (BRK/B US)’s stake. BYD (1211 HK) closed -12% down on speculation of a selldown.   
• The H Share recently touched all-time highs and trades at a significant premium to historical multiples. BYD has a recent history of a selldown by a substantial shareholder (Himalaya Capital).
• Berkshire has made a 33x gain on its BYD investment, excluding dividends. Taking money off the table would align with Berkshire’s value investing mandate.

• Topsports International Holdings (TIH) is now trading close to its all time lows, after the shares corrected by 50% over the past year.
• The company is one of the largest retailers for Nike (NKE US) and Adidas AG (ADS GR) in China.
• Given then on/off lockdowns the near term outlook isn’t great, but the stock appears cheap for those willing to take a longer view.

• We turn bullish on Fast Retail as the current quarter marks the bottom for China sales
• The company continues to surprise in its mastery of gross margins and operating costs
• China is key, but the US is emerging as a new (and profitable) growth driver

• Topsports suffered the first decline in performance since FY2018. Besides pandemic outbreaks and inventory shortage due to global supply chain disruption, over-reliance on Nike and Adidas is also the reason.
• This is the best opportunity to reduce the number of stores based on “Select+Optimize” strategy. With resumption of sports events and good prospects of China’s sports industry, Topsports could rebound.
• Topsports is undervalued compared with its peers, but we are now in a complicated macro environment. Share prices may not rise as expected, which should be aware of by investors. 

• SOCAR (403550 KS) is looking to raise up to US$159m in its upcoming Korea IPO.
• SoCar is a Korean car sharing business which aims to become an all-in-one mobility solutions provider beyond car sharing, with approximately 80% domestic market share in the car sharing space.
• The firm remains loss-making with no signs of being profitable in the near/medium term. In this note, we will take a look at its valuations vs that of listed peers.

• One of the key reasons why we are bearish on this stock (despite cheap valuations) is that the valuations may become even cheaper. 
• The CCP remains intent on maintaining its ZERO COVID policy which means continued sporadic lockdowns and social distancing measures, which is negative for sports apparel products.
• All in all, we believe that a better time to get back into Topsports International is when the CCP becomes more vocal about finally relenting on its ZERO COVID policy. 

• TikTok’s business model advantage: short form video creates greater signal for algorithmic addiction is forcing rivals to react (where possible).
• META is best positioned to copy TikTok, and is trading at a valuation approximating cable networks during cord cutting.
• Netflix is worst positioned… as YouTube, Instagram, and Snap incorporate TikTok’s short form video, more attention will be drawn away from the streaming services. Tough spot to be in.

• 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. However, such disclosures are by no means an absolute. 
• This insight also flags those companies where shares have been pledged, both recently and ongoing.

• Just as investors were starting to get comfortable investing in Chinese big tech, the Government has imposed new fines on a range of tech companies.
• Meanwhile, the June ending quarter could yet again be a disspointment with growth curtailed through lack of funding for loss making businesses.
• Having gained around 50% in June 2022 through signs of easing the tech crackdown, these new fines and a weak June-ending quarter could resend tech valuations to March-2022 lows.    

• Pan Pacific International Holdings (7532 JP) has announced a Tender Offer on Kanemi Co Ltd (2669 JP) to buy out the remaining shares of its one-time co-owner, Familymart. 
• The Tender Offer is for 11.83% of shares (ex-Treasury) at a 3% discount to last. It will get PPIH to near 40%, but together with friendlies, they own ~70%.
• There is a small but extraordinarily illiquid opportunity here. I’d avoid, but there is an interesting potential put option. 

• A recent webinar hosted by Smartkarma with Golden Agri Resources revealed a company confident in the outlook for both its plantation and its value-added processing businesses.
• Golden Agri Resources leads the industry in terms of the yields on its plantations versus both Indonesia and Malaysia and continues to replant with higher-yielding varieties.
• The company has plentiful processing capacity for its own needs and those of third parties, which will help maintain margins. Management is confident in the outlook for palm oil prices.

• JD.com opened a physical shopping mall and we believe it is following Alibaba.
• JD.com signed contract with a state-owned power company for two reasons.
• Two suppliers applied for the liquidation of Suning.com to the court.

• Blue Tower Asset Management provides portfolio management services to individuals, financial advisers, and institutions.
• With Q2 2022, the Blue Tower Global Value strategy composite returned 12.09% net of fees in the second quarter (12.41% gross) against a decline of -15.66% in the MSCI ACWI index.
• The sanctions on Russian investments have dramatically increased the internal dispersion of our composite performance results.
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• Blue Tower Asset Management provides portfolio management services to individuals, financial advisers, and institutions.
• With Q2 2022, the Blue Tower Global Value strategy composite returned 12.09% net of fees in the second quarter (12.41% gross) against a decline of -15.66% in the MSCI ACWI index.
• The sanctions on Russian investments have dramatically increased the internal dispersion of our composite performance results.
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• FGV posted strong 1QFY22 core earnings of RM345m on the back of stronger plantation earnings.
• The strong set of results were above our and the consensus forecasts, making up 36% and 42% of full-year expectations, respectively.
• Nevertheless, we make no changes to our forecasts as we expect to see continuous margin pressure from the sugar segment. No dividend was declared for the quarter. Maintain Neutral with an unchanged TP of RM1.61.

Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

• Hope Education Group Co Ltd (1765 HK) achieved good student enrollment quota increase for 2022/2023 academic year and student recruitment results at overseas schools are also very encouraging. 
• Improvement in teaching quality and better facilities should narrow the gap of fees per student (Rmb11,814) with the national average (Rmb20,000), driving net profit growth in 3-5 years. 
• Capex will come down over time given good upside in utilisation and the removal of management fees will relieve financial position. Its relative valuation is also inexpensive. 

Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.