Daily Briefs

• Nine months have passed since Aisin announced a transformative MTP. Investors remain sceptical that it will deliver higher returns. 
• Improving margins on hybrid transmissions, new products for BEVs and better capital allocation could deliver 70% upside for investors.
• The key risk is the assumption that operating margins can rise above 8% versus the historical average of 5%. 

• In this insight, we highlight the recent pricing gap divergences of the major Korean holdcos and opcos which could provide trading opportunities in 3Q 2024.
• Of the 38 pair trades, 21 of them involved holdcos outperforming opcos in the past six months, suggesting increased capital allocation to Korean holdcos relative to their opcos.
• These pairs could generate trading opportunities in terms of their pricing gaps closing reversal (Doosan Corp vs. Doosan Enerbility; Hyundai Mobis vs Hyundai Motor).

• Niche Player in Cotton yarn spinning and Technical Textile with decadal experience.
• Expansion in Technical Textile during FY24 will significantly improve the margin profile and revenue for the company.
• Peer Comparison and assessment at multiple metrics to assess the suitability of investment.

• In this insight, we discuss numerous gap trades involving Korean preferred and common shares in 3Q 2024.
• The recent push for Korea Value Up program has helped to push up prices of numerous Korean preferred stocks including Hyundai Motor (005385 KS). 
• On a longer timeframe (3-4 years), we believe this discount could narrow further to the 20-25% range, which provides additional opportunities for the Korean preferred shares to further make gains.

• Despite achieving significant milestones, Elon Musk’s $56 billion compensation package was voided in January 2024 due to a flawed approval process, ruled a Delaware judge.
• Tesla’s shareholders voted to reinstate Musk’s package in June 2024, but the lawsuit continues, and the contract’s future remains uncertain.
• Tesla faces challenges with slow EV sales growth, rising competition, and the need for lower-cost models, which may impact stock performance despite Musk’s ongoing leadership.

• Toyo Corporation is a trading company specializing in measurement technologies.
• With several initiatives and strong structural demand in the electric vehicles space in particular, we expect the company to achieve higher revenue and profitability.
• Higher recurring revenue and proprietary product ratios will support a margin improvement in the future. 

• Indian smartphone exports boosted by iPhone makers as Xiphera introduces quantum security improvements in crypto solutions
• Ola Electric pioneers solid-state batteries for electric vehicles, while SK Hynix invests $75 billion to dominate HBM Market for AI Chips
• China nationalizes rare earth resources as airlines struggle with high costs to achieve sustainable fuel goals, Foxconn denies mistreating married women in India

• We compile our selection of small and mid-cap names with our desired characteristics of high dividend yields, value, and margin of safety.
• Our top picks are Perfect Medical Health (1830 HK), The Keepers Holdings (KEEPR PM), Taste Gourmet (8371 HK), Uchi Technologies (UCHI MK), and Ginebra San Miguel (GSMI PM).
• Despite weak data, HK stock earnings and dividend payouts in the results have been resilient, resulting in solid dividend yields of over 10%.

• Operating profit for 1Q (Jan-Mar) FY2024/12 was ¥985 mn, already achieving 65.7% of progress in 1Q against the full-year target.
• Reason: a steady growth in programmatic advertising business including the collaboration business with Dentsu and the drastic cost reduction implemented in 2023 helped, while the bottoming out of reservation-based advertising business was not yet recognized in 1Q FY2024/12.
• In addition, the phasing out of the use of third-party Cookies in Google Chrome, which was included in the initial performance plan as a downside risk, has been postponed to 2025 or later. 

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.