India

• Posco DX (022100 KS) continues to drop following its section transfer from the KOSDAQ market to the KOSPI market. Short interest in the stock nearly halved in December.
• There were big net inflows to China ETFs with creations in CSI 300 Index ETFs and redemptions in ETFs tracking the CSI 500 Index and CSI 1000 Index.
• Creations continued in the iShares Emerging Markets ex China (EMXC US) ETF with units outstanding reaching a new high.

Lucror Analytics Weekly Wraps provide an overview of all Morning Views comments and reports published by our analyst team in the past week, and also showcase a list of the most-read reports.

In this Insight:

1. Agile Property Holdings
2. China Vanke
3. Indika Energy
4. SK Hynix
5. Vedanta Resources

and more…

• Ola Electric (1700674D IN), the largest Indian electric two-wheel vehicles (E2W) player, is seeking US$660 million from a primary raise along with a secondary raise at a US$7-8 billion valuation. 
• Ola is the best-selling E2W brand in India in terms of monthly E2W registrations on the VAHAN Portal of the Ministry of Road Transport and Highways.
• The bull case rests on rising market share in a growing market, a rapid growth phase, increasing gross margin and a favourable cash conversion cycle.   

• Bajaj Finance Ltd (“BAF”) reported key performance metrics for Q3FY24. It reported strong growth, particularly in AUM which grew 7%+ QoQ and 35% YoY to reach INR 311,000cr.
• Customer franchise grew 5%+ QoQ to reach 80.41mm, surpassing the 80mm mark. New loans booked grew to 9.86mm, a growth of 26% YoY and 15%+ QoQ.
• The liability book also did well with deposits growing at around 6% QoQ and 35% YoY to reach INR 58,000cr.

• Nearing the end of the review period, we see 6 potential changes for the NSE Nifty Next 50 Index (NIFTYJR INDEX) using the current index methodology.
• Estimated one-way turnover is 13.9% resulting in a one-way trade of INR 26.9bn. There will be more than 1.5x ADV to sell on nearly all deletes.
• The potential adds have outperformed the potential deletes by 35% over the last two months and some stocks are looking extremely frothy.

• Bank Of Baroda (BOB IN)  has become the second-best PSU bank in India after SBIN, in terms of improvement in asset quality and profitability.
• Medium-Term ROE Forecast 16% to 18%; ROA >1% consistently; Asset Quality problems receding; Strategy is to diversify loan book towards retail further and focus on improving efficiencies
• Despite the recent rally, P/BV is cheap at 0.9x FY25e for high teen ROE business. BOB can easily re-rate to P/BV of 1.3x FY25e in the near term

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.

• Indika Energy
• Lippo Malls Indonesia Retail Trust
• SK Hynix
• Vedanta Resources

• Shriram Finance (SHFL IN) is a high probability add and UPL Ltd (UPLL IN) is a high probability delete at the NIFTY Index (NIFTY INDEX) rebalance in March.
• There is a lower probability of Bharat Electronics (BHE IN) or Trent Ltd (TRENT IN) replacing Bharat Petroleum Corp (BPCL IN) at the rebalance.
• Jio Financial Services (JIOFIN IN), Avenue Supermarts Ltd (DMART IN) and Zomato (ZOMATO IN) will enter the running once added to the F&O segment of the market.

• Canara Bank (CBK IN) could replace Bandhan Bank Ltd (BANDHAN IN) in the NSE Nifty Bank Index (NSEBANK INDEX) at the March rebalance.
• Passive trackers will need to buy 2 days of ADV on Canara Bank (CBK IN) while selling over 1 day of ADV on Bandhan Bank Ltd (BANDHAN IN). 
• The impact is even higher where passives will need to buy nearly 6x delivery volumes in Canara Bank and sell 3x delivery volumes in Bandhan Bank Ltd.

• For this edition, we focus on our 2023 Bloopers, to improvise rather than get embarrassed.  We also share some thoughts on potential enhancements that can be anticipated going forward.
• On the NIFTY Index (NIFTY INDEX), we are still not bearish but do not find the markets to be very attractive either.
• Bloopers in focus include Zomato (ZOMATO IN); CarTrade (CARTRADE IN) ; Hero Motocorp (HMCL IN) and Aavas Financiers Ltd (AAVAS IN). 

• We visited the core of the Hindi Hinterland, the “City of Patna,” the capital and largest city of Bihar, the country’s third most populous state.
• While the trip paints an opportunistic and optimistic picture of Bihar, the situation of unemployment is something that still warrants attention.
• Focus companies: Aditya Vision (AVL IN) , Eicher Motors (EIM IN)  , Hero Motocorp (HMCL IN) and Fino Payments Bank Ltd (FINOPB IN). 

• Datamatics Global Services (DATA IN) or DGSL has seen a good operational performance especially since F23, on the back of a difficult IT macro environment. 
• Yet there are some discomforts on the forensic side, especially related to cash component. Low cash yield due to significant current account balances in subsidiaries raises alarm bells. 
• We find opaqueness regarding some important disclosures including Ind AS 115- Revenues and Ind AS 116- Leases. Decision to increase remuneration cap size also leaves us perplexed.

• Nuvama reported its first quarterly result since its listing, as a demerged entity. It reported strong growth across all its business segments.
• Wealth management revenues grew 30% YoY, adjusted for one-off accounting impact. Cyclical recovery in the capital markets segment further helped.
• Nuvama has potential to scale up rapidly and grow its profitability exponentially led by growth and operating leverage. At the current valuation, an investment in Nuvama has potential to triple.

• Aequitas Research puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs.
• On the IPO front, things started to cool down into the year end with some smaller issuers still trying their luck to get listed before the year ends.
• On the placement front, most of the action continued to come from India. 

• Edelweiss reported a decent Q2FY24 with ex-Insurance PAT of INR 153cr vs INR 133cr YoY. All the businesses – ARC, Asset Management and Credit – performed well.
• Edelweiss is making decent progress in the Credit business aided by the co-lending business model. 80% of disbursals in NBFC and 30% in Housing Finance in Q2FY24 were through co-lending.
• Edelweiss is in process of selling a minority stake in its Alternative Asset Management business for value unlocking. It plans to sell 10-20% equity stake for INR 1500-2000cr.

Lucror Analytics Weekly Wraps provide an overview of all Morning Views comments and reports published by our analyst team in the past week, and also showcase a list of the most-read reports.

In this Insight:

1. Meituan
2. Lippo Malls Indonesia Retail Trust
3. SK Hynix
4. China Jinmao Holdings
5. Geely Auto

and more…

• Emcure Pharmaceuticals has re-submitted DRHP to the SEBI for the second time. The IPO consists of a fresh issue of INR8 billion and an offer-for-sale of up to ~14M shares.
• In the re-submitted DRHP, the company has trimmed the sizes of both the fresh issue and OFS. Emcure originally planned to launch IPO its in 2022.
• Emcure has added latest financial performances in re-filed DRHP.  During H1FY24, revenue from India increased only 3% YoY to INR16.4M, due to lower sales of anti-viral HIV products.