Daily Briefs

Based on the second quarter 2024 results, Abbott Laboratories displayed a strong overall performance cementing its position in various segments, while also highlighting areas that require further attention.
The company reported organic sales growth of over 9%, excluding COVID testing sales, surpassing analyst expectations and marking a 16% sequential increase from the first quarter.
This led the company to raise guidance for the full year, now forecasting organic sales growth of 9.5% to 10%, and adjusted earnings per share between $4.61 and $4.71.

Intra-Cellular Therapies Inc.: Preparations for New Pipeline Developments and Indications! – Major Drivers

Intra-Cellular Therapies reported robust financial and operational results for the second quarter of 2024, underpinned by significant growth in their primary product, CAPLYTA.
This performance highlights several positive developments and a few areas of consideration for potential investors.
Baptista Research looks to evaluate the different factors that could influence the company’s price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology.

Maravai LifeSciences Holdings: Why It Is So Relevant For Repligen & For What Valuation? – Financial Forecasts

Maravai LifeSciences has emerged as a compelling acquisition target in the life sciences sector,particularly following recent developments and a sharp decline in its market value.
With its stock having fallen nearly 80% from its 2021 peak, the company has struggled to diversify beyond the COVID-19 vaccine boom.
However, Maravai’s strategic assets and innovative capabilities still hold significant value, making it an attractive prospect for companies like Repligen.

EDSA: EB05 Selected for BARDA-Funded Study in ARDS

By Zacks Small Cap Research

On August 9, 2024, Edesa Biotech, Inc. (EDSA) announced financial results for the third quarter of fiscal year 2024 that ended June 30, 2024 and provided a business update.
In June 2024, the company announced that EB05 was selected by the Biomedical Advanced Research and Development Authority (BARDA) for evaluation in a U.S. government-funded clinical trial in hospitalized adult patients with acute respiratory distress syndrome (ARDS).
The data from this study could provide additional support for expanding the use of EB05, with the ultimate goal being an approval for EB05 as a standard-of-care therapy for all-cause ARDS.

Ainos, Inc.( AIMD): AI Nose Expanding into Industrial Smart Manufacturing

By Water Tower Research

Advancing AI Nose beyond healthcare into smart manufacturing.
Ainos announced initial results from a VOC sensing program in industrial safety and smart manufacturing with its Japanese co-development partners.
As of August 15, 2024, AI Nose achieved 79% accuracy in detecting 22 different VOCs to identify 761 samples of potentially hazardous gases or contaminants.

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Aug 21

Daily Brief TMT/Internet: Iriso Electronics, Kuaishou Technology, Techwing Inc, Samsung Electronics, Lumir, Ai Holdings, Oddity Tech and more

By Smartkarma Daily Briefs | Daily Briefs, TMT/Internet

In today’s briefing:

Iriso Electronics (6908 JP): Murakami Becomes a Substantial Shareholder
KS / Kuaishou (1024 HK): 2Q24, Significant Margin Improvement and 100% Stock Upside
FnGuide Semiconductor Top10 Index Rebalance Preview: Two Changes Likely in October
Tech Supply Chain Tracker (21-Aug-2024): SDC closes Slovakia branch.
Lumir IPO Valuation Analysis
Ai Holdings (3076 JP): Full-year FY06/24 flash update
Oddity Tech Ltd.: Brand Development & Diverse Portfolio Driving Our Optimism! – Major Drivers

Iriso Electronics (6908 JP): Murakami Becomes a Substantial Shareholder

Murakami’s entities, City Index Eleventh and Aya Nomura, reported a 5.06% position in Iriso Electronics (6908 JP). The purchases were from 25 July to 13 August.
Murakami’s average buy-in price over the last 60 days was JPY2,378.90 per share, a 7.8% discount to the last close price.
Murakami’s disclosure suggests two possibilities: the start of an activist campaign or a short-term pump-and-dump play. The former is likely as Iriso is cash-rich with a P/B less than 1x.

KS / Kuaishou (1024 HK): 2Q24, Significant Margin Improvement and 100% Stock Upside

By Ming Lu

The gross margin improved 5 pp (percentage points) YoY and the operating margin improved 7 pp YoY in 2Q24.
In 2Q24, total revenue grew by 12% YoY, with the main business up by 22% YoY.
Three cross-sectional comparisons reach similar stock upsides about 100%. Buy.

FnGuide Semiconductor Top10 Index Rebalance Preview: Two Changes Likely in October

With the start of the review period around the corner, there could be two changes for the FnGuide Semiconductor Top10 Index at the October rebalance.
Wonik Ips (240810 KS) and Techwing Inc (089030 KS) are potential adds while ISC Co Ltd (095340 KS) and Dongjin Semichem (005290 KS) are potential deletes.
Passives will need to trade more than 2x ADV on two potential changes and more than 1x ADV on another potential change.

Tech Supply Chain Tracker (21-Aug-2024): SDC closes Slovakia branch.

By Tech Supply Chain Tracker

SDC closes Slovakia branch due to declining competitiveness in European market, experiencing challenges in the region.
SSFC remains optimistic about growth in China’s auto market despite market slowdown, seeing potential for expansion.
Global semiconductor industry strengthens in 2Q24, as per SEMI report, with Taiwanese IPC maker showcasing at Automation Expo 2024 in India.

Lumir IPO Valuation Analysis

By Douglas Kim

Base case valuation of Lumir is target price of 18,542 won per share. Given the low upside relative to IPO price range, we have a Negative view of this IPO.
Our net profit estimates in 2025 and 2026 are 38% and 63.3% lower than the company’s estimates.
Lumir provides key technologies for satellite systems, including small synthetic aperture radar (SAR) satellite systems and payloads.

Ai Holdings (3076 JP): Full-year FY06/24 flash update

By Shared Research

Sales increased by 7.4% YoY to JPY49.8bn, with operating profit up 4.4% YoY to JPY9.9bn.
Recurring profit rose 88.8% YoY to JPY19.9bn, driven by a JPY9.4bn equity method investment gain from Iwatsu Electric.
FY06/25 forecasts include sales of JPY68.0bn (+36.5% YoY) and operating profit of JPY10.5bn (+6.6% YoY).

Oddity Tech Ltd.: Brand Development & Diverse Portfolio Driving Our Optimism! – Major Drivers

ODDITY’s Q2 2024 earnings report shows substantial growth and operational efficiency, indicating strong performance and an aggressive growth trajectory.
The company posted a 28% increase in first-half revenue, reaching $404 million, alongside an impressive $110 million in adjusted EBITDA and $104 million in free cash flow.
Such figures not only indicate potent financial health but also highlight ODDITY’s strategic efficiency, outpacing legacy incumbents significantly.

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Aug 21

Most Read: Seven & I Holdings, Hang Seng Index, Korea Stock Exchange KOSPI 200, Colowide Co Ltd, KB Financial ADR, Iriso Electronics, Guzman Y Gomez and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

MEGA M&A! 7&I (3382 JP) Gets Non-Binding Bid from Alimentation Couche-Tard (ATD CN)
Seven & I Holdings (3382 JP): Couche-Tard “friendly” Proposal Likely to Go Nowhere
Hang Seng Index (HSI) Rebalance: Meh (Or Will We Ever Get to 100 Stocks?)
Korea FSS Releases Final Guidelines for Short Selling Compliance: Trading Implications
Colowide Placement – Needs a Very Large Correction
Couche-Tard Targets Seven & I: Seven & I’s Pride on the Line
COLOWIDE (7616) – UGLY Register On Expensive Co Needs a Capital Construct Upgrade, Won’t Get It Here
Trading Considerations for Won Appreciation & Korean ADR Premium Volatility
Iriso Electronics (6908 JP): Murakami Becomes a Substantial Shareholder
Guzman Y Gomez (GYG AU): Free Float to Determine Index Inclusion

MEGA M&A! 7&I (3382 JP) Gets Non-Binding Bid from Alimentation Couche-Tard (ATD CN)

By Travis Lundy

Today, part-way through the day, the Nikkei ran an article saying that Alimentation Couche-Tard (ATD CN) had made a confidential non-binding proposal to buy Seven & I Holdings (3382 JP).
7&i shares obviously went up (limit up in a hurry, staying there, large size traded limit up at close).
Now things get complicated. 7&i has said they received a non-binding proposal for all the shares. There will be a Special Committee of all Independent Directors. All stakeholders will matter.

Seven & I Holdings (3382 JP): Couche-Tard “friendly” Proposal Likely to Go Nowhere

Seven & I Holdings (3382 JP) shares rose 22.7% as it confirmed media reports that it had received a confidential, non-binding preliminary proposal from Alimentation Couche-Tard (ATD CN).
The interest is unsurprising due to the weak share price performance. Since ValueAct’s open letter on 25 January 2022, the shares are up 5.2% vs. the Nikkei 225 up 38.0%.
Couche-Tard aims for a friendly offer, which is challenging as it requires support from the founder’s family and the Japanese government. Therefore, the probability of a binding proposal is low.

Hang Seng Index (HSI) Rebalance: Meh (Or Will We Ever Get to 100 Stocks?)

In a surprise (maybe should not have been!), there are no constituent changes for the Hang Seng Index (HSI INDEX) in September. However, there are float and capping changes.
Estimated one-way turnover is 1% and estimated round-trip trade is HK$3.73bn (US$478m). There are no stocks with over +/-0.5x ADV to trade but flows could add to/offset other index flows.
We remain at 82 index constituents and the road to 100 constituents appears to be a long drawn out torturous one. At this glacial pace, could be an eternity away.

Korea FSS Releases Final Guidelines for Short Selling Compliance: Trading Implications

By Sanghyun Park

This final guideline formalizes earlier drafts by the FSS. Though not strictly mandatory, its detailed requirements mean it functions as a de facto rule that must be followed closely.
The new, stringent requirements are likely to eliminate common stock borrowing practices in Korea, making timely transactions difficult.
New trading patterns and market flows may emerge when short selling resumes in April, with increased importance of borrow balance data and potential rise in counter-flow trading.

Colowide Placement – Needs a Very Large Correction

By Sumeet Singh

Colowide Co Ltd (7616 JP) aims to raise around US$230m in order to fund its prospective M&A transactions over the next few years
While the company has undertaken a number of M&A transactions in the past, it hasn’t clearly stated its intended targets for this round.
In this note, we will talk about the deal dynamics and run the deal through our ECM framework.

Couche-Tard Targets Seven & I: Seven & I’s Pride on the Line

By Oshadhi Kumarasiri

It was reported yesterday that Alimentation Couche-Tard (ATD CN) has put forward a bold proposal to acquire Seven & I Holdings (3382 JP).
The offer price remains undisclosed, but the market may be anticipating a significant premium based on the share price movement following the news.
However, we believe the offer price could fall short of market expectations, and it is likely that Seven & i will reject the proposal.

COLOWIDE (7616) – UGLY Register On Expensive Co Needs a Capital Construct Upgrade, Won’t Get It Here

By Travis Lundy

Colowide Co Ltd (7616 JP) is an industrial fastish-food operator in Japan. They sell several dozen kinds of cuisine under several dozen brands, owned and franchised in Japan and overseas.
The company “philosophy” is “Everything we do is for our customers and employees.” The stock is up 30% in 10yrs. It pays no dividend, but it pays a big yutairimawari.
This means Real World Float is 100% owned by retail who want restaurant coupons. This offering will be bought by index, short covers, and another 20-30k coupon holders.

Trading Considerations for Won Appreciation & Korean ADR Premium Volatility

By Sanghyun Park

Increased exchange rate volatility affects the ADR premium, but past patterns show that exchange rate and ADR premium directions may not always align, requiring consideration of specific contextual factors.
If the won appreciates below the 1,300s range, overseas institutions may shift to asymmetric selling of underlying shares for foreign exchange profit, as shown by rising ADR premiums.
We should watch for peak conditions to capture significant ADR premiums. Trading options include borrowing underlying shares for ADR conversion, even under the current short-selling ban.

Iriso Electronics (6908 JP): Murakami Becomes a Substantial Shareholder

Murakami’s entities, City Index Eleventh and Aya Nomura, reported a 5.06% position in Iriso Electronics (6908 JP). The purchases were from 25 July to 13 August.
Murakami’s average buy-in price over the last 60 days was JPY2,378.90 per share, a 7.8% discount to the last close price.
Murakami’s disclosure suggests two possibilities: the start of an activist campaign or a short-term pump-and-dump play. The former is likely as Iriso is cash-rich with a P/B less than 1x.

Guzman Y Gomez (GYG AU): Free Float to Determine Index Inclusion

Guzman Y Gomez (GYG AU) listed on 20 June and is eligible for inclusion in the S&P/ASX family of indices at the September rebalance.
Whether the stock is included in indices depends on the index providers estimate of free float. We expect index providers to assign floats of between 25-35% for the stock.
Inclusion in one global index could come in November and another in December. Inclusion in the S&P/ASX indices will depend on whether float is higher than 30% or lower.

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Aug 20

Daily Brief Thematic (Sector/Industry): Ohayo Japan | Eighth Day of Gains and more

By Smartkarma Daily Briefs | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

Ohayo Japan | Eighth Day of Gains
Japan Morning Connection: Kose, 7&I, PPIH
Japan Retail: Market Concentration Accelerates Through M&A and Organic Growth
# 48 India Insight: Cabinet INR 33,700 Project, Adani Power Acquire Reliance Power, Hero Tax Notice
Indian Pharmaceutical Market: On A Healthy Growth Path; Momentum to Continue in Rest of the Year
Q224 DRAM, NAND Revenues Grow For The Fifth Quarter In a Row
Episode 79: Not Your Grandfathers Data Center
Biopharma Week in Review – August 19, 2024
The Highlights – Cannabis News for the Week Ending August 16, 2024

Ohayo Japan | Eighth Day of Gains

By Mark Chadwick

The S&P 500 and Nasdaq each marked their eighth consecutive day of gains, a first in 2024
Tokyo Metro is preparing for a late October listing on the Tokyo Stock Exchange, with an expected market capitalization of 640-700 billion yen
Canadian convenience store giant Alimentation Couche-Tard has made a takeover offer for Seven & I Holdings

Japan Morning Connection: Kose, 7&I, PPIH

By Andrew Jackson

Estee Lauder continues to underwhelm on its China strategy, making names with less country exposure such as Kose look increasingly attractive
While the 7&I deal outcome remains highly uncertain, NKY225 replacement candidates should see a lift in the short-term
This includes PPIH, which looks oversold after yesterdays negative price reaction to the Founder’s 22 year old son being promoted to a non-exec director.

Japan Retail: Market Concentration Accelerates Through M&A and Organic Growth

By Michael Causton

There has been a long-term trend of market concentration in Japan’s retail sector for more than a decade.
But consolidation is accelerating due to the pressures to find growth in a depopulating market and the winner takes all phenomenon which rewards the leading chains.
With higher growth and greater access to capital for the best retailers, the net result is dramatically higher levels of M&A in sectors like drugstores and even supermarkets.

# 48 India Insight: Cabinet INR 33,700 Project, Adani Power Acquire Reliance Power, Hero Tax Notice

By Sudarshan Bhandari

Cabinet Approves INR 33,700 Crore Infrastructure Project, including rail, and new airport
Adani Power in Negotiations to Acquire Reliance Power’s 600-MW Thermal Plant
Hero MotoCorp Faces INR 17 Crore Tax Notice from Delhi GST Authorities

Indian Pharmaceutical Market: On A Healthy Growth Path; Momentum to Continue in Rest of the Year

By Tina Banerjee

Q1FY25 results of the leading Indian pharmaceutical companies showed healthy and broad-based growth of the Indian pharmaceutical market, which grew 8.7% in Q1FY25.
Most of the top listed players registered double-digit revenue growth from their respective India formulation segments. Focus on chronic therapies remained major growth driver.
The Nifty Pharma Index has outperformed the benchmark Nifty 50, rising 32% YTD. The benchmark index has gained just 13% over the same period.

Q224 DRAM, NAND Revenues Grow For The Fifth Quarter In a Row

By William Keating

DRAM revenues amounted to $23.3 billion in Q224, representing increases of 28.3% QoQ and 110.5% YoY.
In the case of NAND, Q224 revenues amounted to $16.5 billion, representing increases of 17% QoQ and 83% YoY.
Unprecedented demand for HBM & DDR5, robustly increasing content per box for both PC & Smartphone, looming capacity constraints, more/better LTA coverage are all mounting tailwinds for the memory segment

Episode 79: Not Your Grandfathers Data Center

By The Circuit

Lots of inquiries and discussions about the semiconductor market this week, stock market movements relatively flat
Nvidia up 11%, AMD up 7%, Microsoft up 4% last week
Market experiencing a dialing back of hype, some names still overvalued, but overall growth dynamics in semiconductors still intact

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

Biopharma Week in Review – August 19, 2024

By Water Tower Research

We review last week’s biopharma news for meaningful clinical data, regulatory updates, research innovation, and M&A.
Last week, Medicare posted the first negotiated prices for Part D drugs, an additional 11% discount by our estimate.
Mpox declared a global emergency, as the SIGA antipox treatment drug failed study, but mpox vaccine makers BVNRY and GOVX got a boost.

The Highlights – Cannabis News for the Week Ending August 16, 2024

By Water Tower Research

The US cannabis MSOS ETF ended the week +7.05%, while the global YOLO ETF finished +7.03%.
The MJUS ETF rebalancing drove considerable volatility in the underlying, with MariMed (CSE: MRMD, OTCQX: MRMD) and TerrAscend (TSX: TSND, OTCQX: TSNDF) both up more than 30% in the last five sessions, while Curaleaf (TSX: CURA, OTCQX: CURLF) and Green Thumb Industries (CSE: GTII, OTCQX: GTBIF) ended in the red.
The top 10 MSOs (by enterprise value) have reported 2Q earnings.

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Aug 20

Daily Brief ESG: Amidst Changes in Purpose of Policy Shareholdings and more

By Smartkarma Daily Briefs | Daily Briefs, ESG

In today’s briefing:

Amidst Changes in Purpose of Policy Shareholdings, We Should Note Whether They Are Really Decreasing

Amidst Changes in Purpose of Policy Shareholdings, We Should Note Whether They Are Really Decreasing

By Aki Matsumoto

The increase in foreign ownership and the decline in cross-shareholdings have encouraged management reform. In order for engagement to be effective, it is essential to further reduce cross shareholdings.
Reasonable explanation of the reasons for such transfers as changes in the purpose of policy shareholding or contributions to retirement benefit trust must be provided in the annual securities report.
Rising stock prices increase the value of policy shareholdings. To accelerate the reduction of policy shareholdings, numerical targets should be published, such as by setting milestones.

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Aug 20

Daily Brief ECM: Peptron Rights Issue: The 25% Discount Is an Attractive Outright Position Opportunity and more

By Smartkarma Daily Briefs | Daily Briefs, ECM

In today’s briefing:

Peptron Rights Issue: The 25% Discount Is an Attractive Outright Position Opportunity
Lumir IPO Preview
99 Speed Mart IPO: The Bull Case
Zomato Placement – Momentum Is Very Strong, past Ant Related Deals Have Been Mixed
Star Asia Investment Corp Placement – Needs a Decent Correction Leading up to Pricing
Pre-IPO Medtide – The Industry, the Business and the Concerns
Hero Fincorp Pre-IPO – The Positives – Riding on the Parent’s Brand

Peptron Rights Issue: The 25% Discount Is an Attractive Outright Position Opportunity

By Sanghyun Park

Peptron’s lack of single-stock futures means no risk-free arbitrage but also less speculative selling, making the 25% discount an attractive outright position opportunity.
The low capital increase rate may stabilize the stock price, and more forfeited shares could lower the cost of securing subscription rights during the trading window.
Consider buying rights during the trading period or targeting forfeited shares. Conservatively estimate the final offering price range to set a profitable cost for securing rights.

Lumir IPO Preview

By Douglas Kim

Lumir is getting ready to complete its IPO on KOSDAQ in September. The IPO which is expected to raise between 49.5 billion won to 61.5 billion won.
Lumir specializes in the development of observation satellite technology including image data processing devices and onboard computers for a number of government satellite series.
Lumir had sales of 12.1 billion won (up 90.5% YoY) in 2023. Its sales surged by 477% YoY to reach 8.2 billion won in 1H24.

99 Speed Mart IPO: The Bull Case

99 Speed Mart Retail Holdings (99SPD MK), a leading groceries retailer in Malaysia, is seeking to raise US$530 million at RM1.65 per share.
99 Speed Mart is Malaysia’s largest mini-market player and leading grocery retailer, holding a market share of 40.1% and 11.6% in 2023, respectively.
The bull case rests on a large TAM, rising market share, robust revenue growth underpinned by SSSG, a store expansion-driven growth strategy, profitability, cash generation, and modest leverage.

Zomato Placement – Momentum Is Very Strong, past Ant Related Deals Have Been Mixed

By Sumeet Singh

AntFin is looking to raise around US$400m by selling around 2% of Zomato (ZOMATO IN).
Ant Group had earlier sold some of its stake in Nov 2023 and Mar 2024, with the deals producing a mixed bag result.
In this note, we talk about the deal dynamics and run the deal through our ECM framework.

Star Asia Investment Corp Placement – Needs a Decent Correction Leading up to Pricing

By Ethan Aw

Star Asia Investment (3468 JP) is looking to raise around US$118m in its primary follow-on offering to acquire four hotels. The acquisition will amount to a total of JPY34.7bn (US$237.5m).
The deal is a somewhat large one to digest, at 83 days of three month ADV and 13.3% of TSO .
In this note, we will talk about the deal dynamics and run the deal through our ECM framework.

Pre-IPO Medtide – The Industry, the Business and the Concerns

By Xinyao (Criss) Wang

Medtide relies heavily on limited number of customers to contribute performance. If there is any significant reduction in demand by its major customers, Medtide’s performance growth would be materially/adversely affected.
Due to geopolitical conflicts, pharmaceutical companies are becoming more cautious about their reliance on China CXO. So, the development of Medtide’s overseas business would become more uncertain in this context.
Medtide’s business scale is still small and its position in the global peptide CXO industry is not as strong as described. Valuation of Medtide should be lower than peers.

Hero Fincorp Pre-IPO – The Positives – Riding on the Parent’s Brand

By Sumeet Singh

Hero FinCorp (HF) is looking to raise around US$438m in its upcoming India IPO.
HF is a non-deposit taking NBFC. It offers a suite of financial products catering primarily to the retail segment and the MSME customer segment in India.
In this note, we talk about the positive aspets of the deal.

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Aug 20

Daily Brief Credit: Morning Views Asia: Continuum Green Energy and more

By Smartkarma Daily Briefs | Credit, Daily Briefs

In today’s briefing:

Morning Views Asia: Continuum Green Energy, Melco Resorts and Entertainment (Philippines)

Morning Views Asia: Continuum Green Energy, Melco Resorts and Entertainment (Philippines)

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.

Continuum Green Energy
Melco Resorts and Entertainment (Philippines)
West China Cement

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Aug 20

Daily Brief Event-Driven: MEGA M&A! 7&I (3382 JP) Gets Non-Binding Bid from Alimentation Couche-Tard (ATD CN) and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

MEGA M&A! 7&I (3382 JP) Gets Non-Binding Bid from Alimentation Couche-Tard (ATD CN)
Seven & I Holdings (3382 JP): Couche-Tard “friendly” Proposal Likely to Go Nowhere
FXI Rebalance Preview: China Tower (788 HK) Could Replace CICC (3908 HK)
HK CEO & Director Dealings (19th Aug 2024): Merlin Selling Swire Pac/Props; Chans Buying Hang Lung
Liquid Universe of European Ordinary and Preferred Shares: August‘24 Report
China A50 ETFs Rebalance Preview: Two High Probability Changes in Sep
Archimed Group Seeks Delisting of Jeisys Medical Through Stock Exchange
KOSDAQ150 Index Adhoc Rebalance Preview: Replacements for Jeisys Medical

MEGA M&A! 7&I (3382 JP) Gets Non-Binding Bid from Alimentation Couche-Tard (ATD CN)

By Travis Lundy

Today, part-way through the day, the Nikkei ran an article saying that Alimentation Couche-Tard (ATD CN) had made a confidential non-binding proposal to buy Seven & I Holdings (3382 JP).
7&i shares obviously went up (limit up in a hurry, staying there, large size traded limit up at close).
Now things get complicated. 7&i has said they received a non-binding proposal for all the shares. There will be a Special Committee of all Independent Directors. All stakeholders will matter.

Seven & I Holdings (3382 JP): Couche-Tard “friendly” Proposal Likely to Go Nowhere

Seven & I Holdings (3382 JP) shares rose 22.7% as it confirmed media reports that it had received a confidential, non-binding preliminary proposal from Alimentation Couche-Tard (ATD CN).
The interest is unsurprising due to the weak share price performance. Since ValueAct’s open letter on 25 January 2022, the shares are up 5.2% vs. the Nikkei 225 up 38.0%.
Couche-Tard aims for a friendly offer, which is challenging as it requires support from the founder’s family and the Japanese government. Therefore, the probability of a binding proposal is low.

FXI Rebalance Preview: China Tower (788 HK) Could Replace CICC (3908 HK)

With the review cutoff done, we expect just one change for the iShares China Large-Cap (FXI) (FXI US) ETF in September.
China Tower (788 HK) is a high probability inclusion while China International Capital Corporation (3908 HK) is a high probability deletion.
There has been an increase in cumulative excess volume for both stocks in the last few months, but the pace has slowed noticeably in the recent past.

HK CEO & Director Dealings (19th Aug 2024): Merlin Selling Swire Pac/Props; Chans Buying Hang Lung

By David Blennerhassett

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. Or pledging. However, such disclosures are by no means an absolute.
The key stocks mentioned in this regular insight include: Swire Pacific (19/87 HK)/Swire Properties (1972 HK) and Hang Lung (10 HK)/Hang Lung Properties (101 HK).

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

By Jesus Rodriguez Aguilar

Since mid-July, share-price spreads have generally widened across our European liquid universe of ordinary and preferred shares (9 have tightened, 8 widened, 2 remained at same level).
Recommended trades long preferred / short ordinary shares: Atlas Copco, Grifols SA (GRF SM) (see section on the company), Media-for-Europe, Sixt.
Recommended trades long ordinary / short preferred shares: Henkel, SSAB Svenska Stal.

China A50 ETFs Rebalance Preview: Two High Probability Changes in Sep

With the review cutoff done, there should be two changes for the CSOP FTSE China A50 (HKD) (2822 HK) / iShares FTSE/Xinhua A50 China (2823 HK) ETFs in September.
Huaneng Lancang River Hydropow (600025 CH) and China National Nuclear Power (601985 CH) should replace China Tourism Group Duty Free Corp (601888 CH) and Yihai Kerry Arawana (300999 CH).
China Tourism Group Duty Free (1880 HK) will be deleted from a global index later this month and there could be some opportunities to trade the A/H arb.

Archimed Group Seeks Delisting of Jeisys Medical Through Stock Exchange

By Douglas Kim

Jeisys Medical announced that it has decided to exchange shares with Syracus Subco, its largest shareholder. The stock exchange ratio between Syracus Subco and Jeisys Medical is 1 to 1.3575606.
The exchange date is 23 October. Through this stock exchange, Archimed Group (owner of Syracus Subco) seeks to delist Jeisys Medical (287410 KS).
Jeisys Medical also announced that it plans to cancel 1,075,838 common shares, representing 1.4% of its outstanding shares.

KOSDAQ150 Index Adhoc Rebalance Preview: Replacements for Jeisys Medical

Archimed, via its Korean entity Syracuse Subco, now holds 91.35% of Jeisys Medical (287410 KS) following the second tender offer. Jeisys shares will be delisted in the next couple months.
Jeisys Medical (287410 KS) is a KOSDAQ 150 Index (KOSDQ150 INDEX) constituent and there will be a replacement for the stock in the index.
Recent ad hoc replacements to the KOSDAQ 150 Index (KOSDQ150 INDEX) have traded well and that warrants positioning for this event.

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Aug 20

Daily Brief Equity Bottom-Up: China Consumption Weekly (19Aug2024): China Literature and more

By Smartkarma Daily Briefs | Daily Briefs, Equity Bottom-Up

In today’s briefing:

China Consumption Weekly (19Aug2024): China Literature, BEKE, Alibaba, JD, JD Health, Tencent Music
Grab Holdings (GRAB US) – Product-Led Sequential Growth Ahead
NAB – Profit Slightly Down in 3Q, Credit Costs Collapsed, but Bad Loans Are Rising Significantly
Pan Pacific International Holdings (7532 JP): Full-year FY06/24 flash update
Wharf REIC: Beta Play W Multiple Catalysts, Lower Rates, Weaker Currency and Returning of Shoppers
JD Logistics (2618 HK): There Are More Rooms
Tech Supply Chain Tracker (20-Aug-2024): Regional production helps Foxconn.
China Resources Beer Holdings – Interim Results Show Progress but Macro Headwinds Remain
Wheaton Precious Metals Corp.: Is The Risk of Over-dependence on Key Projects That Significant? – Major Drivers
Duolingo Inc.: Expansion of Motion Design Capabilities by Acquiring Hobbes & Other Major Drivers

China Consumption Weekly (19Aug2024): China Literature, BEKE, Alibaba, JD, JD Health, Tencent Music

By Ming Lu

China Literature’s revenue increased by 28% YoY in 1H24, because four novel copyrights for movies brought box office hits.
KE revenue increased by 20% YoY in 2Q24 compared with a 19% YoY decrease in 1Q24, as government policies supported existing home transaction.
Alibaba announced that it will recruit 1,000 fresh graduates for tech positions in 2025.

Grab Holdings (GRAB US) – Product-Led Sequential Growth Ahead

By Angus Mackintosh

Grab Holdings booked record GMV, revenue, FCF, MTUs, and EBITDA in 2Q2024 and flagged an optimistic outlook for 2H2024, with positive adjusted FCF expected to remain positive for FY2024.
The company continues to focus on its product-led and technology-driven initiatives to drive growth and profitability through mass-market and high-value products such as Grab Unlimited, advance bookings, and group bookings.
Concerns over competition from TikTok look overblown, with Grab already active on social media. Management expects positive sequential growth for the next 2Qs and a stronger growth outlook in FY2025,

NAB – Profit Slightly Down in 3Q, Credit Costs Collapsed, but Bad Loans Are Rising Significantly

By Daniel Tabbush

NAB reported its 3Q24 results with slightly lower profit, but major divergence inside the figures
The bank shows a staggering decline in credit costs in 3Q24, which means the results were flattered
This is despite a very sharp rise in bad loans in major segments, corporate and residential mortgages, up around 50% YoY annualized in 3Q24

Pan Pacific International Holdings (7532 JP): Full-year FY06/24 flash update

By Shared Research

FY06/24 results: Sales JPY2,095.1bn (+8.2% YoY), operating profit JPY140.2bn (+33.2% YoY), net income JPY88.7bn (+34.1% YoY).
FY06/25 forecast: Sales JPY2,220.0bn (+6.0% YoY), operating profit JPY150.0bn (+7.0% YoY), net income JPY86.5bn (-2.5% YoY).
Store count end-June 2024: 742 total, 632 domestic, 110 overseas; 24 new stores in Japan, 12 overseas.

Wharf REIC: Beta Play W Multiple Catalysts, Lower Rates, Weaker Currency and Returning of Shoppers

By Jacob Cheng

Wharf REIC reported 2% yoy core earnings growth, the first earnings increase since 2019. The results also show Hong Kong retail business is more resilient than expected
The upcoming catalysts include 1) lower interest rates, 2) weakening currency environment and 3) bottoming out of HK retail market
Market is forward-looking and we think the worst is behind us. Valuation is very compelling. The stock is a beta play. BUY

JD Logistics (2618 HK): There Are More Rooms

By Osbert Tang, CFA

Even after the 28% surge in share price since the 1H24 result, JD Logistics (2618 HK) still deserves a look as fundamentals have improved, especially with better cost control.
JDL is riding on scale economies with higher asset utilisation. Quarterly margins have sustained an uptrend, reaching the highest levels since 1Q21 and it will continue.
We like its lower reliance on JD.com (9618 HK) and net cash of HK$2.83/share (28% of the share price). There is a massive upside in consensus forecasts too.

Tech Supply Chain Tracker (20-Aug-2024): Regional production helps Foxconn.

By Tech Supply Chain Tracker

Foxconn benefits from regionalized production with improved efficiency, reduced shipping costs, and better supply chain integration.
AMEC is confident in their lawsuit against the US Department of Defense, showing strong belief in the merit of their legal case.
Japan’s economy faces uncertainty with financial resources at risk after Kishida’s resignation, raising concerns amidst the country’s economic landscape and supply chain players cautiously optimistic about AI server boom.

China Resources Beer Holdings – Interim Results Show Progress but Macro Headwinds Remain

By Rikki Malik

The company’s strategy of premiumisation continues to be executed to plan
Despite the derating, investors will wait until seeing concrete signs of a turn in the Chinese consumer
Continues to be a liquid proxy for Chinese consumption with no technology regulation risk

Wheaton Precious Metals Corp.: Is The Risk of Over-dependence on Key Projects That Significant? – Major Drivers

Wheaton Precious Metals has reported its second quarter results for 2024, demonstrating a robust financial and operational performance, reflecting the company’s successful business model and strategic asset management.
The company generated $234 million in operating cash flows and reached a record of over $450 million for the first half of the year.
Wheaton Precious Metals produced over 305,000 gold equivalent ounces year-to-date, keeping on track with the 2024 production guidance of 550,000 to 620,000 gold equivalent ounces.

Duolingo Inc.: Expansion of Motion Design Capabilities by Acquiring Hobbes & Other Major Drivers