Financials

• Today’s press release unveils details on new flow trading events in Korea’s local market from the second half of this year, highlighting two key points.
• Firstly, the disclosure rule starts with block deals from August 23rd. Secondly, a 30% or greater stock price correction on disclosure day may cancel the transaction plan.
• This highlights the need to consider cancellation risks in pre-disclosure positions and design setups with consideration for the potential for reverse flows as stock prices approach 30% corrections.

• Before we dive into this Monday’s edition of Crypto Crisp, we want to announce a format change.
• Starting today, the ‘Charting Crypto’ section will only feature the most intriguing charts we have discovered over the past week.
• Instead of showcasing four to five recurring charts that may not always be interesting, we will focus solely on the most noteworthy ones.

• HDFC Bank is the largest private sector bank in India known for its strong track record of compounding book value and EPS
• The recent merger with Housing Development Finance Company initially received positive market reaction but has since caused a decline in HDFC Bank’s stock price
• Despite the stock underperformance, the merger offers potential cross-selling opportunities and a bright future for HDFC Bank

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.

• Secondary placement taking place, ~29million share on offer via accelerated bookbuild, for total offer size of ~USD100 million 
• Discount of 0-2.4% relative to market close 9 July, discount depends on demand
• Free float will increase by 0.5% to 8.4%, which is low but typical for Vietnamese government linked (GLC) stocks 

• As of end of H1, NAV was SEK 156 billion (SEK 361/share). NAV increased by 4%, gains in portfolio compensated by leverage increase. 5-y total return of 78.6% (OMX30, 76.4%).
• Industrivärden C shares are trading at a 4.8% discount to NAV (vs. 8.3% average for last 5-years). It seems risky to bet on a further discount reduction, rather a reversal.
• My target NAV is SEK 176,893 million. My TP for the C shares of Industrivärden, assuming a 5% discount to NAV, is SEK 360.3 (4.6% upside).

• BTC hits multi-month range lows amid heavy liquidations and bearish market structure.
• Altcoins experience significant losses, with many sectors down 20%-50% in recent weeks.
• ETH and SOL spot ETFs signal growing institutional interest despite current market struggles.

• OMH expects 1H24 revenue increased >110% y/y.
• OMH views its technology & data as competitive advantages & cites recently launched HomerAI & Property Mgmt.
• unit as key factors behind expected growth.

• SSIC stock recommended by Dakota at $8.85, now up by $1.00 with $1.58 cash distributions
• Recent corporate transaction with REFI expected to benefit SSIC stockholders
• SSIC is a BDC founded by Wall Street veterans, with strong balance sheet, no debt, and management owning significant portion of shares

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.

• Public market investor has been investing in multifamily REITs for over a decade
• Mid-America is seen as a solid investment with a 2-3 year time horizon
• Company owns over 100,000 apartment units in Sunbelt cities, trades at 6.8% cap rate, and has a free cash flow yield of 6.5% to 7.0%, expected to grow over time

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.

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.

• China Jinmao Holdings

• Last year, the GPIF as a whole returned 22.67% in yen terms. As a whole, GPIF outperformed its benchmarks by 0.04% after paying 0.02% in fees and costs.
• GPIF traded ¥30trln of assets – relatively high turnover for a fund which espouses very low turnover – but there’s a reason for that. There were also sharp active/passive moves.
• This year is the last year in the “cycle” of the “old” Policy Allocation Framework. A new one is likely to be introduced this year.

• With all regulatory approvals received, the Scheme Meeting for Renesas Electronics (6723 JP)‘ acquisition of Altium Ltd (ALU AU) will take place on 12 July.
• If approved at the Scheme Meeting and at the Second Court Hearing, Altium Ltd (ALU AU) will stop trading from the close on 19 July.
• The replacements for Altium Ltd (ALU AU) in the ASX100/200 indices could be announced late this week with implementation at the close on 19 July.

• SOUTHBOUND was again a net buyer, for HK$10.9bn this week, on smallish two-way volumes. Banks were a big buy.
• 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.

• Regular Spot-Vol Correlations reasserted – Implied Volatilities (IVs) traded lower as Equity Markets continued making new Highs.
• As expected, Vol-Regime Switching Model is stuck in “High & Down” state. IVs projected to grind lower over an elongated period.      
• Changes in Vol term-structure + Skew/ Smile compression – indicative of reduced risk-premia for July-end India Budget event.

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.

• Greentown China
• NagaCorp Ltd
• Vedanta Resources
• Yuexiu Property

• A weekly summary of key developments across ECM and Event-Driven names tracked by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Thailand, Korea, India and Chinese ADRs.
• ECM developments: Aisin (7259 JP), Honda Motor (7267 JP) placements; Sanil Electric (062040 KS), Shift Up (462870 KS) and Timee Inc (215A JP) IPOs.
• Event-Driven developments: ESR Group (1821 HK), L’Occitane (973 HK), Hollysys Automation Technologies (HOLI US). 

• Kim Byung-hwan addressed criticism of weak incentives in tax support for the value-up policy, emphasizing boosting dividends. His background suggests effective advocacy for tax reforms in his new role.
• He prioritized abolishing the FIIT in the National Assembly, citing its hindrance to capital market liquidity and investment promotion, indicating a robust approach to the value-up policy.
• Kim’s appointment as FSC Chairman signals the government’s commitment to advancing the value-up policy. He emphasizes boosting dividends and aligning tax policies accordingly, shaping trading strategies toward dividend-expanding companies.

• After an explosive rally in April, the Hang Seng Index has been in a downtrend since mid-May, many are wondering where the index is headed next.
• July 2024, based on our seasonal pattern analysis, does not have a great chance to close higher (it could, but the odds are not good).
• If the index goes down in the next 2 weeks, buy the 17600-17300 price area.

• Morguard REIT (MRT) is considered undervalued due to its exposure to commercial real estate, particularly in the office sector
• MRT, a part of the Morguard group, is expected to unlock its value through a catalyst similar to Temple Hotels (TPH)
• Despite being part of Morguard Corp (MRC), MRT has traditionally traded at a discount to its own NAV, with an estimated value of $7.5+ per unit and potential development asset upside, offering a projected downside of $4.5 per unit.

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.

• Predicting KOSPI 200 rebalancing is straightforward, focusing on quantitative screening rather than qualitative factors, unlike other indices.
• Accurate simulation of KOSPI 200 requires daily data on shares, volume, and prices for six months, typically sourced from KOSCOM due to limitations in free data access.
• I plan to share a practical KOSPI 200 simulation file with Smartkarma readers, leveraging freely available data from Google Finance.

• There is renewed interest in HDFC Bank given potential for stock index re-balancing as well as an acquisition for one of its subsidiaries
• The story with HDFC Bank is strong regardless of these new ancillary positives, where growth is incredibly stable, and credit metrics shine
• We remind that the amalgamation of HDFC Finance remains new, and gains are still not fully reflected, but a look at costs/assets shows progress

• On March 7 of this year, we dedicated an entire edition of Crypto Moves to discussing our belief that this crypto bull market is the least speculative one yet.
• This edition, Crypto Moves #18, was aptly named: “The Least Speculative Bull Market,” and included the following summary:“The crypto market is getting less speculative by the minute.
• There is no need to chase the next big thing by risking funds on obscure altcoins or memecoins.

Heliad reported a net asset value (NAV) per share of €18.20 at end-March 2024, roughly unchanged compared to end-September 2023 (€18.17), as the 25% share price increase of the listed flatexDEGIRO (Heliad’s largest holding) offset some fair value reductions in Heliad’s private portfolio. Meanwhile, several of its portfolio companies announced important developments. This includes solid FY23 results from Raisin and Clark, the combination of Razor Group with Perch, FINN’s €100m funding round and Enpal’s €1.1bn debt raise. While venture capital (VC) deal activity and exit opportunities remain subdued, there are initial signs of a stabilisation and recovery.

• Bloomberg reports that the bidding consortium is in talks to bring in other partners, such as QIA, PIF, and CPP Investment Board, to aid in privatising ESR Group (1821 HK).
• Warburg Pincus and OMERS have blocking stakes for a Cayman scheme. Warburg Pincus is seemingly supportive, and the consortium’s expansion talks suggest confidence in meeting OMERS’ price expectations.
• Our best guess is that an offer is around HK$14.00. ESR’s current valuation is undemanding, with its forward EV/EBITDA multiple at a 40% discount compared to the median peers’ multiple.

• Blackrock is a massive asset management firm with $10 trillion in assets under management
• Blackrock recently made a transformative acquisition of Global Infrastructure Partners (GIP)
• The deal has wide-ranging effects for the private capital industry and is a wake-up call for Wall Street firms to rethink their strategies and partnerships

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

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.

• China Vanke
• Lippo Malls Indonesia Retail Trust

• Affirm Holdings Inc. reported a strong fiscal third quarter for 2024, reflecting robust growth and strategic initiatives that seem to be paying off, while also highlighting areas that warrant caution.
• Firstly, the positives emerging from the quarter include notable advancements in volume growth.
• Gross Merchandise Volume (GMV) increased by 36%, which is compelling evidence of the company’s capability to attract and retain users despite a competitive landscape.

• This month (June) saw 1,673 Corporate Governance Reports filed and 5 new “Mgmt Conscious of Capital Cost/Stock Price” policies filed. 
• We created a tool show every report, provide links to every document, and now a new diff file tool. Put in a name, see the difference between the Old/New Reports.
• We hope this took will help. It is designed to be a shelf reference. We update the tool once a month, a couple of weeks ahead of the TSE.

• Foreign shareholding in HDFC Bank (HDFCB IN) has dropped to 54.83% and that results in foreign room crossing the ‘magical’ 25% mark.
• The increase in foreign room could lead to passive trackers of a global index needing to buy 256m shares (US$5.3bn; 11.5x ADV) at the end of August.
• There will definitely be positioning in the stock but there should still be upside in the stock. The HDFC Bank (ADR) (HDB US) line was up 4.5% overnight.

Deutsche Beteiligungs (DBAG) completed an issue of €100m senior unsecured convertible bonds on 28 July, with proceeds to be used for co-investments alongside DBAG and ELF Capital funds, and for general corporate purposes. The bonds will bear interest at a fixed rate of 5.5% pa and mature in 2030. They are convertible into up to c 3.25m of new and/or existing DBAG shares, which is the equivalent of 17.3% of the currently outstanding number of shares.

• Jackson Financial is the 9th largest retail annuity company in the US with $12.8 billion in annuity sales in 2023
• Spun from Prudential in 2021, JXN currently trades at 4x P/E and around 50% of book value
• Plans to return $550-$650 million of capital to shareholders this year, representing 11-13% of its market cap, through dividends and share repurchases, with potential for growth in the future

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$9.3bn this week, on smallish two-way volumes. Banks were a big buy.
• It is not clear how much of this is H/A discounts, expected dividend tax removal, shareholder return KPIs for SOE CEOs, upcoming Third Plenum policy, or national team buying…
• But valuations are acceptable. Flows are good. Policy changes are afoot. SOUTHBOUND may continue to see inflows – national team and otherwise.

Lucror Analytics’ ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable).
We assess New World Development’s ESG as “Strong”, in line with its Environmental score, while the Social and Governance scores are “Adequate”. Controversies are “Immaterial” and Disclosure is “Strong”.

Target Healthcare REIT has sold four of its care homes for £44.5m to the incumbent tenant, modestly ahead of the carried value. The homes have performed well since being acquired as part of the significant portfolio transaction in late 2021, but their sale enhances key portfolio average metrics such as age, floor space and unexpired lease term, has been completed at a lower yield than the portfolio average and enables the company to reduce exposure to more expensive debt.

Edison Investment Research is terminating coverage on Oxford Cannabinoid Technologies (OCTP), Britvic (BVIC), Ultimovacs (ULTI), DFR Gold (DFR), The Merchants Trust (MRCH), PB Holding (PBH) and Biodexa Pharmaceuticals (BDRX). 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.

• As we step into July, anticipation surrounds the distribution of 141,686 bitcoins from the defunct Mt. Gox exchange to its creditors, most of whom are former clients.
• Despite the looming release of these bitcoins, which have been locked away for over a decade, the crypto market saw an uptick over the weekend.
• This rise occurred even after the German government transferred an additional $94 million worth of bitcoins to exchanges this morning.

On 27 June, Moody’s upgraded Alpha Bank’s long-term senior-unsecured debt rating by two notches to Baa3 (Ba2 previously), its long- and short-term deposit ratings by one notch to Baa3/P-3 (Ba1/NP previously) and its long- and short-term counterparty credit risk (CCR) rating by one notch to Baa2/P-2 (Baa3/P-3 previously). The move takes Moody’s key ratings on Alpha to investment grade for the first time in 14 years. This is a further positive development for Alpha as it continues to execute its strategy and demonstrate recurring profitability and capital generation. S&P, Fitch and Capital Intelligence currently assign BB- (sub-investment grade) long-term debt ratings to Alpha Bank.

• We review Citibank’s upcoming division of CitiBanamex and the forthcoming legacy Banamex IPO; given the market’s recent wobbles, we shave down the Banamex IPO valuation
• Sector trends to January show continued loan growth; although funding costs have not risen to April, credit costs are worsening, with some evidence of rising NPL ratios
• BanBajio generates an ROE of 27%, whilst well capitalized and on very modest multiples; we are now neutral on Banorte, from being cautious, due to its less demanding valuation

• While the street is getting excited about Bandhan Bank (assuming a change in management, end of a bad asset cycle, and lower valuations), we are not.
• We believe the next set of problems for the bank are yet to be unleashed, and a change in management will only intensify the challenges ahead.
• We believe the worst is yet to come for the bank. 

• Nuvama Wealth Management (“Nuvama”)  continues to report strong growth with Q4FY24 revenue at INR 596cr, a growth of 35% YoY. Q4FY24 PAT grew 57% YoY to reach INR 181cr. 
• Overall, FY24 revenue and PAT ended strong at INR 2063cr (YoY growth of 31%) and INR 597cr (YoY growth of 62%), respectively.
• FY24 growth was led by the capital markets (revenue grew 64% YoY) segment, aided by favorable cycle and market-share gains. Wealth and asset management segments are also scaling up well.

• Implied Volatilities (IVs) continued to rise as the underlying index tried to break above critical resistance – marking a break-down of usual spot-vol correlations.
• Vol surface smile & skew characteristics held steady at the 25-Delta point of curve, while dynamics at the 10-Delta zone extended further.
• Nifty50 Back-end Term Structure is in Backwardation as Monthly options enjoy markups based on July-end Indian Budget release.   

• Metalpha is a small-cap Chinese supply chain company that has transitioned into an OTC underwriter focused on crypto derivatives through a reverse-merger.
• Despite being one of the smallest market cap crypto companies, it is not perceived as a “crypto” play by investors leading to low trading volume and lack of visibility.
• As the company gains recognition and the team continues to deliver results, it is expected to see a significant increase in valuation, potentially offering 4-17x returns to shareholders in the next 24-36 months.

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.