Financials

• With FY23 earnings in May, Toyota Motor (7203 JP) announced a ¥1trn buyback (410mm shares, 3.04%). Given shares were ¥3,599 the day before, it meant fewer shares or a Tender.
• Like Honda (who hadn’t bought pre-offering), Toyota hadn’t bought back in the first couple of months. We knew there was bank and insurer overhang. That overhang lasts for years. 
• Today, Toyota announced an “organised” 410mm share ¥1trln Tender Offer Buyback. Several financial institutions have announced plans to tender. This provides guidance on supply/demand for the rest of the year.

• In this insight, we take a look at the potential index changes for ASX 200, 100, 50, and 20 in the run-up to the September 2024 index rebal event.
• We see one ASX 100 change and two ASX 200 changes but there are a couple of names lurking just outside the border which have to be monitored carefully.
• For ASX 300, we see 13 ADDs and 6 DELs. Many of these expected ADDs and DELs could have more than 10 days of volume to trade.

• The Hang Seng Index has been falling in June and July, but our MONTHLY seasonal pattern model indicates the index has a very good chance to close August up.
• The condition we need, to forecast that August will be closing up, is to have July closing down, i.e. <17718.61.
• The index is WEEKLY OVERSOLD, so the timing to buy will be critical, because you want to get in early, but not too early (and July must close down).

• First, the crypto market has seen substantial gains in the past week, particularly Bitcoin, which is now trading at $67,000 for the first time since mid-June, having previously traded as low as $53,500.
• Please do not make the mistake of thinking that we cannot go higher in the near future.
• Let us reiterate the bullish outlook we have put forward in what feels like forever.

• ACRE is a commercial real estate REIT sponsored by Ares Management Corp, a major investment manager with over $400 billion in assets.
• ACRE has a $2.2 billion portfolio of 47 loans in various sectors, but has been underperforming compared to competitors in the commercial mortgage REIT space.
• Despite underperformance, ACRE and Ares Management are actively working to improve the situation and potentially increase returns for investors.

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.

• In this note, we put pawnbroking into a global and historical context: i) the global market is large, ca.$40bn, UK just ca.5%; ii) pawnbroking is widely adopted across a range of cultures/geographies from China, India, Islamic countries to US, Europe and UK; iii) many UK immigrants are comfortable with pawnbroking from experiences in their country of origin; iv) the largest listed pawnbrokers trade at over 2x the PER rating of H&T with similar forward earnings growth; iv) it is generally a regulated business with largely favourable regulators’ comments, as in the UK.
• Pawnbroking has been available globally for centuries, debunking the misconception some have of it as a UK Dickensian practice.

• Invest in Rithm Capital (RITM), a diverse REIT operating as a holding company
• Rithm expected to break up into separate public companies, becoming a pure-play asset manager
• Potential for stock price to reach $15-$20 per share with higher management fees and a 9.1% dividend yield, resulting in a total return of over 60% in the next few years.

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.

• The major framework of this realignment is likely decided, integrating KOSPI and KOSDAQ into a tiered system based on liquidity, market cap, and financial status, with periodic replacements.
• The KOSPI 200’s continued existence is uncertain under the new realignment plan, which may shift its role to the value-up index, resembling Japan’s market restructuring model.
• The first-tier market’s entry requirements will likely reflect value-up index criteria, suggesting greater speculative money movement toward the value-up index starting in September.

• Kakao’s Kim Beom-su has been arrested over alleged stock price manipulation in the SM Entertainment buyout, marking a new peak in the company’s legal troubles.
• Kakao Corp’s stock might drop due to the absence of a key figure. KakaoBank could also struggle from uncertainty about its largest shareholder and weakened business ties.
• Kakao’s potential sale of SM Entertainment shares could initially hurt the stock price, but potential bidding interest might boost it.

Baillie Gifford China Growth Trust (BGCG) focuses on innovative, growing Chinese companies with exposure to the massive opportunities generated by China’s vast market, its positive long-term economic outlook and its transition to a more diversified, innovation-led growth model. BGCG’s performance has lagged the declining market over recent years, despite the strong operational performance of most of its portfolio holdings. But the Chinese New Year heralded an improvement in market sentiment and, in recent months, BGCG has made outright gains and outperformed the market. In the three months to end-June 2024, the trust returned 3.3% in NAV terms, compared to a benchmark return of 0.4%. Its managers are cautiously optimistic about the prospects for the economy and the trust, and they have been taking advantage of still low valuations to enhance exposure to China’s best high-growth companies across a range of industries.

• The housing sector in Mexico has solid fundamentals, with attractive growth expectations for listed developers considering their healthy financial position and access to financing sources.
• As a result, these companies are poised to capture the increased demand that the housing deficit generates during the coming years.
• Since the start of the bankruptcy processes of the three largest housing developers (GEO, HOMEX, and URBI) in 2014, housing production has maintained a downward trend.

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.

• Powerlong Commercial Management Holdings
• Reliance Industries
• Sino-Ocean Service

• Weekly IVs marked significantly higher. Options demand returns post holiday-shortened week. Market focuses on 23.07.2024 Budget & Corporate Earnings announcements. 
• Put-Call Ratio compression + Rising IVs indicative of call-buying activity. Significant Open-Interest buildup seen in 25000 calls.
• Vol Term-structure: Entire curve in Backwardation. Much of which can be attributed to the India Budget event. Curve expected to flatten out post event.

• My great colleague, Mads Eberhardt, is off on a well-deserved mini-summer break, accordingly handing me the keys to the weekly crypto editorial.
• As Mads is probably currently stuck with the same feeling I have when I hand the iPad to my almost 80-year-old dad, I’ll stick to connecting the dots between liquidity, the recent sell-off in crypto, and the current sell-off in technology.
• Do current developments square, or can we find value trades here?

• Our bullish outlook (since early-November 2023) remains intact. Continue to ride this trend higher and buy dips as long as ACWI-US and EEM-US remain above supports at $110 and $41-$42.
• In our previous Int’l Compass (June 27) we discussed the rotation that we believed was starting, whereby global Technology (IXN-US) would consolidate as investors rotate to laggard areas.
• This rotation has continued while Technology goes through a healthy consolidation. Continue to focus on other more value-oriented Sectors while Technology/growth consolidates

• The Nikkei 225 INDEX pulled back last week, and it may continue to fall for another 1-2 weeks.
• Make sure you read the Market Reversal Matrix – Charts Analysis section below: we are introducing a possibile new Premium Service using our trend prediction models in algorithmic trading format.
• The price support area to buy the Nikkei 225 would be between 39800 and 39300, this coming week (or the next).

• Drivers of growth include increased customer numbers, transaction volumes, and expanded product offering
• Equals Group PLC has a strong balance sheet with minimal debt and solid cash reserves
• Stock presents an attractive short-term opportunity for investors due to ongoing strategic review and potential for sale at significant premium

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.

• LPL Financial is the largest independent broker-dealer in the US, providing technology and service solutions for financial advisors
• CEO Dan Arnold has led the company to heavily invest in technology, expanding their market opportunities
• With the trend of financial advisors turning towards independence, LPL Financial is well-positioned for significant market growth, potentially undervalued by the market

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.

• 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 (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’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

• 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

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.

• 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. 

• Andrew Walker hosts the podcast and introduces John Haskell, CIO at Ulta Global Management
• Ulta Global focuses on international public real estate investing, particularly in emerging markets
• Despite negative perception and underperformance in emerging markets, there are opportunities for value investing in international real estate

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

• Ciputra Development (CTRA IJ) continued to book strong marketing sales in 1H2024 and looks well on track to meet or beat its FY2024E guidance with a strong pipeline of projects.
• CTRA has the most geographically diversified portfolios in the sector and operates an asset-light joint operating scheme strategy allowing for faster expansion and a good portion of recurrent rental income. 
• The VAT exemption program looks set to continue to drive residential demand in 2H2024 with CTRA riding the affordability wave having also repositioned its target market. 

• Niva Bupa Health Insurance (1226871D IN) is looking to raise US$360m in its upcoming India IPO. The bookrunners on the deal are MS, Kotak, Axis, ICICI, HDFC, and Motilal Oswal.
• Niva Bupa Health Insurance (Niva Bupa) is a health insurance firm. Its portfolio consists of health (including retail and group), personal accident, and travel insurance.
• As per Redseer, the firm was one of India’s largest and fastest growing standalone health insurers (SAHI) based on overall health gross direct premium income (GDPI) in FY24. 

Record reported FY24 PBT of £12.9m, down 12% y-o-y and in line with our estimate of £12.8m. Underlying PBT was £14.8m, up 2% y-o-y on record assets under management (AUM), which grew 16.5% to $102.2bn. The final ordinary dividend surprised positively at 2.45p, above our 2.36p forecast, and a special dividend of 0.6p was declared. As new CEO Dr Jan Witte continues to refocus the strategy over the next six months, the company is guiding to relatively flat management fees. We have cut our FY25 PBT estimate to £12.1m (previously £14.8m) on a weaker fee revenue projection. We also initiate FY26 PBT and diluted EPS estimates at £14.0m and 5.43p, respectively. The cash-generative business model enables the group to continue to pay an attractive ordinary dividend.

• Zip (ZIP AU) plans to raise around US$145m in order to repay its outstanding debt.
• The company has undertaken a number of deals in the past and has a mixed track record.
• In this note, we will talk about the placement and run the deal through our ECM framework.

• BTC reclaims multi-month range lows, hinting at potential bullish momentum despite recent sell pressure.
• Spot ETF inflows surge, showing resilience even as BTC faced significant market cap erosion.
• ETH spot ETF launch set for July 23, could spark renewed market interest and opportunities.

• Revenue was JPY17.1bn (+17.6% YoY), with life insurance commission revenue at JPY16.4bn (+18.2% YoY).
• Operating profit was JPY2.7bn (-0.2% YoY), with an OPM decrease of 2.8pp YoY to 15.7%.
• Acquisition of 333,000 treasury shares for JPY1.0bn, with cancellation scheduled for August 30, 2024.

• The UK government has more than halved its stake in NatWest Group (NWG LN) over the last two years reflecting an improving financial health for the lender.
• The UK government is a strategic shareholder and the selling is forecasted to cause a passive fund demand in the next two months across four indices.
• At close of 20 September 2024, the aggregate passive fund demand for NatWest Group (NWG LN) is currently estimated at 22.8m shares, $95.7m and 0.73 days of volume.

• The crypto market has recently diverged not only from the rapidly improving liquidity conditions in the broader economy but also from various positive crypto-specific factors such as declining exchange balances, regulatory clarity, reduced Bitcoin miners’ reserves, the historically positive post-Halving period, and the imminent launch of Ethereum spot ETFs.
• This decoupling has been driven by the German government selling nearly 50,000 bitcoins over the past few weeks, most of which were sold last week, along with the start of repayments to Mt. Gox creditors.
• The substantial rebound in crypto assets this weekend, as the German Bitcoin selling ended on Friday, highlights that the tumbling prices in recent weeks were merely due to the German government, Mt. Gox, and, not least, the unjustified fear of substantial selling pressure, as we argued in last week’s Crypto Crisp titled ‘Buy the Dip’.

• Onex Corporation has experienced a 50% increase in stock price
• Despite slow fundraising, Onex remains a strong investment due to pruning and optimization efforts
• Recent leadership change and shareholder approval for phasing out founder’s control increase potential for growth

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.

• SOUTHBOUND was again a net buyer, for HK$7.3bn this week, on smallish two-way volumes. Major buying was mostly SOEs.
• The more I watch, the more I think the last few months have had serious national team buying of banks and energy, perhaps ahead of shareholder return policy changes.
• But valuations are acceptable. Flows are good. Policy changes are afoot. SOUTHBOUND may continue to see inflows – national team and otherwise.

• IVs for Monthly & Quarterly contracts rose as options market baked in additional risk premia for the Budget Announcement. 
• Vega bid & Gamma offered  – Monthly IVs higher by +2.3 vols & Weekly IVs lower by -0.5 vols.  Short-Dated IVs closed lower in spite of upcoming earnings events 
• Term structure is trading with a kinked shape, with Monthly IVs trading at a markup to rest of the curve

• CSI 300 represents the 300 largest stocks by market cap and liquidity from the Shanghai and Shenzhen Exchanges. CSI 500 is the next 500.
• In this insight, we take a look at the potential ADDs and DELs leading the race for the semiannual index rebal event in December 2024.
• There have been multiple changes to our expected ADDs/DELs list since our last insight.

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.

• HPCL-Mittal Energy Ltd
• JSW Steel Ltd
• Lenovo
• Lippo Malls Indonesia Retail Trust
• Tata Steel Thailand

• Management is targeting a USD40bn IPO valuation for Revolut; the last funding round in 2021 valued it at USD33bn, but current year investor valuations have ranged from USD19.9bn to USD25.7bn
• We provide key fintech and bank ratios for the UK digital banks; Revolut is more an FX paytech with a small loan book; Starling is a more “balanced” digital bank
• Relative to its UK unlisted peers and select listed digital peers, Revolut’s target IPO valuation does appear to be rich; it is also still seeking a UK bank licence

• There is no Crypto Moves today.
• Instead, today’s note marks our first trade for our Crypto Portfolio, along with the rationale behind this decision.
• This trade aims to indirectly benefit from the imminent launch of U.S.-based Ethereum ETFs, without directly increasing our Ethereum exposure.

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.

• Lippo Karawaci

• Navigating a challenging macro environment with conflicting signals on Fed policy and inflation risks.
• Global liquidity contractions impact BTC, but future easing could spark a market revival.
• Crypto markets face headwinds, yet long-term growth potential and institutional adoption remain strong.

• The KOSPI 200 INDEX started a modest pullback and is entering a BUY area, but it could fall further this coming week, caution is advised.
• The support levels to buy are between 383-371, this coming week.
• Alternatively buy the Close, if the WEEKLY Close is negative, next Friday.

• After five days of increases in the quotes of its primary indices, the local market ends the week on a high note.
• On the one hand, the IPC climbs 5.01%, marking its best weekly performance since last December.
• In contrast, the FTSE BIVA indicated a 4.87% rise.