Daily Briefs

SOUTHBOUND was again a net buyer for HK$18.6bn on strong two-way volumes. The top three net buys of the week were SOE banks. Some may be Central Huijin.
Some of this may be driven by the dividend w/h tax cancellation on H divs and by significant H-share discounts, but high-div CNOOC was the biggest net sell.
No end to the inflows, and HK valuations are not at a place where they would hamper continued flows. Alibaba making HK a Primary will spur more inflows over time.

A/H Premium Tracker (To 24 May 2024): HK Stocks Have a BAD Week and AH Premium Rebounds In

The New/Better A-H Premium Tracker has tables, charts, measures galore to track A/H premium positioning, southbound and northbound positioning/volatility in pairs over time, etc.
SOUTHBOUND’s buy streak continued this past week; every day was net positive. NORTHBOUND was net positive too. It is not clear how much is National Team buying. Much may be.
AH Premia rebounded off multi-year lows, on average, this past week as Hang Seng and other HK indices fell sharply and A-shares did not fall as much.

Merger Arb Mondays (27 May) – L’Occitane, SciClone, GA Pack, KFC Japan, CF Logistics, Best World

We summarise the latest spreads and newsflow of merger arb situations we cover across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
Highest spreads: Yichang HEC Changjiang Pharma (1558 HK), Hollysys Automation Technologies (HOLI US), Ansarada Group Ltd (AND AU), Malaysia Airports Holdings (MAHB MK), China Traditional Chinese Medicine (570 HK).
Lowest spreads: Chilled & Frozen Logistics Holdings (9099 JP), Mma Offshore (MRM AU), Great Eastern Holdings (GE SP), Mimasu Semiconductor Industry (8155 JP), Boral Ltd (BLD AU).

Offshore China ETFs Rebalance Preview: Three Changes in June; Cutoff Today

Based on the close of 24 May, there could be three changes for the iShares A50 China (2823 HK)/ CSOP China A50 (HKD) (2822 HK) in June.
COSCO SHIPPING (601919 CH), CRRC (601766 CH) and China National NuclearPower (601985 CH) could replace LONGi GreenEnergy (601012 CH), CSC Financial (601066 CH) and China Tourism Group DutyFree (601888 CH).
There are a couple of stocks that are close adds and could become adds if they outperform higher ranked stocks in trading today.

FXI Rebalance Preview: Cutoff Today; Two Changes Likely in June

With a day to go in the review period, there could be 2 changes for the iShares China Large-Cap (FXI) (FXI US) in June.
There should be more than 1x ADV to buy on one of the adds while there will be nearly 5x ADV to sell on one of the deletes.
There will be positioning in all the potential changes but there appears to be higher interest in one of the potential adds and one of the potential deletes.

Shanghai Henlius Biotech (2696.HK) – Behind the Trading Halt and Privatization Rumor

There are many rumors about Henlius’s trading halt, but Fosun Pharma had applied for the resumption of trading in H Shares, which makes us confused whether this is really privatization.
Henlius is in “an awkward position” in capital market. Fosun is to blame for Henlius’s low valuation. The high debt problem makes the profits generated from drug sales meaningless.
If Henlius cannot break away from the system controlled by Fosun, the complexity of corporate governance brought about by the relationship between Henlius and Fosun would inevitably affect investment judgment.

Mainland Connect NORTHBOUND Flows (To 24 May 2024): Weak Net Buy, Weak Gross, Idiosyncratic Flows

The Quiddity Mainland Connect NORTHBOUND Monitor. Like the A/H Premium Monitor and HK Connect SOUTHBOUND Monitor. Lots of Flows/Position Tables and Charts with which to play.
Last week saw NORTHBOUND net BUY RMB 0.8bn of A-shares on lower gross volumes. NORTHBOUND bought CATL, China Yangtze Power, and Luxshare. AH Premia bounced, but net volumes are suspect.
There is some question as to whether the NORTHBOUND volumes to the buy side are all foreigners. Some suspect there is national team buying mixed in, as was expected.

China Healthcare Weekly (May.26)-VBP Scope Expands, Optimistic About Glove Industry, China Resources

The NHSA issued a Notice on “improving the quality and expanding the scope of VBP”. The trend of full coverage of VBP of conventional drugs/consumables is determined.TCM is under pressure.
We analyzed the potential demand growth rate of the glove industry, which is already better than most cyclical stocks. Therefore, we see no need to remain pessimistic about this industry.
Holding platform companies have valuation discounts.HK$50-60 billion is reasonable market value for China Resources Pharmaceutical.Better to go long when share price is below HK$5 and then hold to receive dividends.

Baidu: Priced to Fail

By Wium Malan, CFA

Since late 2020, Search’s share of digital advertising revenue has stabilised at around 8-10%, seemingly retaining its core advertising customers and industries.
Baidu management expects AI Cloud to maintain strong revenue growth momentum in the upcoming quarters.
Baidu trades on a 3.6x NTM EV/EBITDA multiple, well below one standard deviation lower than its 5-year historical average trading range and the lowest it has ever been.

China Consumption Weekly (27 May 2024): Xpeng, Tongcheng, Kanzhun, Gaotu, KE, Bilibili, and Weibo

By Ming Lu

In 1Q24, Revenues of Xpeng, Tongcheng, Kanzhun, and Gaotu grew by 62% YoY, 50%, YoY, 43% YoY and 34% YoY.
KE’s revenue decreased by 20% YoY in 1Q24 due to the weak property market.
Bilibili’s value added services revenue grew by 17% YoY and advertising revenue grew by 31% YoY.

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May 27

Daily Brief Japan: Chilled & Frozen Logistics Holdings, Hoshino Resorts Reit, Renesas Electronics, TSE Tokyo Price Index TOPIX and more

By Smartkarma Daily Briefs | Daily Briefs, Japan

In today’s briefing:

Chilled & Frozen Logistics (9099 JP): Irrational Exuberance Takes Hold
Hoshino Resorts REIT Placement – Another Raising to Fund an Accretive Acquisition
ECM Weekly (27th May 2024) – Renesas, AUB, Modec, Tata Tech, MUFG, Shift Up, Novelis, Shulan
Many Companies Still Consider Engagement with Investors to Be Someone Else’s Business

Chilled & Frozen Logistics (9099 JP): Irrational Exuberance Takes Hold

Chilled & Frozen Logistics Holdings (9099 JP) shares are trading 85.7% above AZ-Com Maruwa Holdings (9090 JP) JPY3,000 offer due to the disclosure of four counterbidders.
The white knight “winning” bidder can secure the Board’s recommendation if it is the highest offer (likely well below the last close) and does not result in AZ-COM Maruwa-type dis-synergies.
AZ-COM Maruwa would face the dilemma of bumping, particularly if the white knight bidder secures irrevocables and the Board presents a compelling case to support the white knight bidder.

Hoshino Resorts REIT Placement – Another Raising to Fund an Accretive Acquisition

By Clarence Chu

Hoshino Resorts Reit (3287 JP) is looking to raise US$125m from a primary follow-on. Proceeds will be used to acquire the OMO7 Osaka asset.
The REIT has been active on the acquisition front, undertaking a number of capital raisings in recent years.
In this note, we will talk about the placement and run the deal through our ECM framework.

ECM Weekly (27th May 2024) – Renesas, AUB, Modec, Tata Tech, MUFG, Shift Up, Novelis, Shulan

By Sumeet Singh

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, Go Digit managed to do well despite somewhat tepid subscription rates, while Shift Up (462870 KS) was looking to be the next hot listing in Korea.
On the placement front, Renesas Electronics (6723 JP) mega-block kept the cross-shareholding unwind going.

Many Companies Still Consider Engagement with Investors to Be Someone Else’s Business

By Aki Matsumoto

Although it’s possible to move AGM forward given the timing of financial reporting, 70% of companies will hold their AGM during the 3 days of the last week of June.
As long as the concentration of AGM dates continues, the start of electronic provision of AGM documents should at least be accelerated to allow time to review the agenda.
Only slightly less than 30% of prime market listed companies provide English translations of all convocation notices, including business reports and financial statements.

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May 27

Most Read: Korea Stock Exchange Kospi Index, Chilled & Frozen Logistics Holdings, Meituan, Modec Inc, Techwing Inc, Hoshino Resorts Reit, Great Wall Motor, L’Occitane, COSCO SHIPPING Holdings , China Molybdenum Co Ltd H and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

KRX Announces Final Version of Value-Up Disclosure Guidelines Alongside Dedicated Website Launch
Chilled & Frozen Logistics (9099 JP): Irrational Exuberance Takes Hold
HK Connect SOUTHBOUND Flows (To 24 May 2024); Strong Bank Buying and Tech Selling Continues
Weekly Deals Digest (26 May) – Henlius, HKTV, SciClone, KFC, Best World, PropertyGuru, Modec
KOSDAQ150 Index Rebalance: Short Sell Ban Definitely Helping
Hoshino Resorts REIT Placement – Another Raising to Fund an Accretive Acquisition
A/H Premium Tracker (To 24 May 2024): HK Stocks Have a BAD Week and AH Premium Rebounds In
Merger Arb Mondays (27 May) – L’Occitane, SciClone, GA Pack, KFC Japan, CF Logistics, Best World
Offshore China ETFs Rebalance Preview: Three Changes in June; Cutoff Today
FXI Rebalance Preview: Cutoff Today; Two Changes Likely in June

KRX Announces Final Version of Value-Up Disclosure Guidelines Alongside Dedicated Website Launch

By Sanghyun Park

Starting May 27th, KRX-listed firms can voluntarily disclose value-up details, publicly available on the website. Additionally, view five investment indicators for all KRX-listed companies below.
Finalized version similar to draft, with added content requested by listed companies, like R&D investment growth rate. Tax incentives excluded, awaiting alignment with Ministry’s plan in July.
KRX keeps a screening framework for the index akin to March’s criteria, with ROE likely having the highest weight. Recent signals hint at increasing dividend weighting.

Chilled & Frozen Logistics (9099 JP): Irrational Exuberance Takes Hold

Chilled & Frozen Logistics Holdings (9099 JP) shares are trading 85.7% above AZ-Com Maruwa Holdings (9090 JP) JPY3,000 offer due to the disclosure of four counterbidders.
The white knight “winning” bidder can secure the Board’s recommendation if it is the highest offer (likely well below the last close) and does not result in AZ-COM Maruwa-type dis-synergies.
AZ-COM Maruwa would face the dilemma of bumping, particularly if the white knight bidder secures irrevocables and the Board presents a compelling case to support the white knight bidder.

HK Connect SOUTHBOUND Flows (To 24 May 2024); Strong Bank Buying and Tech Selling Continues

SOUTHBOUND was again a net buyer for HK$18.6bn on strong two-way volumes. The top three net buys of the week were SOE banks. Some may be Central Huijin.
Some of this may be driven by the dividend w/h tax cancellation on H divs and by significant H-share discounts, but high-div CNOOC was the biggest net sell.
No end to the inflows, and HK valuations are not at a place where they would hamper continued flows. Alibaba making HK a Primary will spur more inflows over time.

Weekly Deals Digest (26 May) – Henlius, HKTV, SciClone, KFC, Best World, PropertyGuru, Modec

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: Modec Inc (6269 JP) prices its US$535 million secondary offering.
Event-Driven developments: Shanghai Henlius Biotech (2696 HK), Hong Kong Television Network (1137 HK). Sciclone Pharmaceuticals (6600 HK), Kfc Holdings Japan (9873 JP), Best World International (BEST SP), PropertyGuru (PGRU US).

KOSDAQ150 Index Rebalance: Short Sell Ban Definitely Helping

There are 13 inclusions and 13 exclusions for the KOSDAQ 150 Index (KOSDQ150 INDEX) at the June rebalance to be implemented at the close on 13 June.
For the second consecutive review, Fadu (440110 KS) and Shinsung DeltaTech (065350 KS) have been kept out of the index. Not sure what the index committee’s beef with them is.
The adds have outperformed the deletes and the KOSDAQ150 since the start of the review period. This has been helped, in no small, part by the ban on short selling.

Hoshino Resorts REIT Placement – Another Raising to Fund an Accretive Acquisition

By Clarence Chu

Hoshino Resorts Reit (3287 JP) is looking to raise US$125m from a primary follow-on. Proceeds will be used to acquire the OMO7 Osaka asset.
The REIT has been active on the acquisition front, undertaking a number of capital raisings in recent years.
In this note, we will talk about the placement and run the deal through our ECM framework.

A/H Premium Tracker (To 24 May 2024): HK Stocks Have a BAD Week and AH Premium Rebounds In

The New/Better A-H Premium Tracker has tables, charts, measures galore to track A/H premium positioning, southbound and northbound positioning/volatility in pairs over time, etc.
SOUTHBOUND’s buy streak continued this past week; every day was net positive. NORTHBOUND was net positive too. It is not clear how much is National Team buying. Much may be.
AH Premia rebounded off multi-year lows, on average, this past week as Hang Seng and other HK indices fell sharply and A-shares did not fall as much.

Merger Arb Mondays (27 May) – L’Occitane, SciClone, GA Pack, KFC Japan, CF Logistics, Best World

We summarise the latest spreads and newsflow of merger arb situations we cover across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
Highest spreads: Yichang HEC Changjiang Pharma (1558 HK), Hollysys Automation Technologies (HOLI US), Ansarada Group Ltd (AND AU), Malaysia Airports Holdings (MAHB MK), China Traditional Chinese Medicine (570 HK).
Lowest spreads: Chilled & Frozen Logistics Holdings (9099 JP), Mma Offshore (MRM AU), Great Eastern Holdings (GE SP), Mimasu Semiconductor Industry (8155 JP), Boral Ltd (BLD AU).

Offshore China ETFs Rebalance Preview: Three Changes in June; Cutoff Today

Based on the close of 24 May, there could be three changes for the iShares A50 China (2823 HK)/ CSOP China A50 (HKD) (2822 HK) in June.
COSCO SHIPPING (601919 CH), CRRC (601766 CH) and China National NuclearPower (601985 CH) could replace LONGi GreenEnergy (601012 CH), CSC Financial (601066 CH) and China Tourism Group DutyFree (601888 CH).
There are a couple of stocks that are close adds and could become adds if they outperform higher ranked stocks in trading today.

FXI Rebalance Preview: Cutoff Today; Two Changes Likely in June

With a day to go in the review period, there could be 2 changes for the iShares China Large-Cap (FXI) (FXI US) in June.
There should be more than 1x ADV to buy on one of the adds while there will be nearly 5x ADV to sell on one of the deletes.
There will be positioning in all the potential changes but there appears to be higher interest in one of the potential adds and one of the potential deletes.

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May 27

Daily Brief Industrials: Chilled & Frozen Logistics Holdings, COSCO SHIPPING Holdings , Adani Ports & Special Economic Zone, Contemporary Amperex Technology (CATL), AP Moeller – Maersk A/S, Pluxee and more

By Smartkarma Daily Briefs | Daily Briefs, Industrials

In today’s briefing:

Chilled & Frozen Logistics (9099 JP): Irrational Exuberance Takes Hold
Offshore China ETFs Rebalance Preview: Three Changes in June; Cutoff Today
SENSEX Index Rebalance: And That’s a Googly
Mainland Connect NORTHBOUND Flows (To 24 May 2024): Weak Net Buy, Weak Gross, Idiosyncratic Flows
Monthly Container Shipping Tracker | Pricing Still Firm | Share Prices Converging | (May 2024)
Pluxee (PLX.PA) – Sunday, Feb 25, 2024

Chilled & Frozen Logistics (9099 JP): Irrational Exuberance Takes Hold

Chilled & Frozen Logistics Holdings (9099 JP) shares are trading 85.7% above AZ-Com Maruwa Holdings (9090 JP) JPY3,000 offer due to the disclosure of four counterbidders.
The white knight “winning” bidder can secure the Board’s recommendation if it is the highest offer (likely well below the last close) and does not result in AZ-COM Maruwa-type dis-synergies.
AZ-COM Maruwa would face the dilemma of bumping, particularly if the white knight bidder secures irrevocables and the Board presents a compelling case to support the white knight bidder.

Offshore China ETFs Rebalance Preview: Three Changes in June; Cutoff Today

Based on the close of 24 May, there could be three changes for the iShares A50 China (2823 HK)/ CSOP China A50 (HKD) (2822 HK) in June.
COSCO SHIPPING (601919 CH), CRRC (601766 CH) and China National NuclearPower (601985 CH) could replace LONGi GreenEnergy (601012 CH), CSC Financial (601066 CH) and China Tourism Group DutyFree (601888 CH).
There are a couple of stocks that are close adds and could become adds if they outperform higher ranked stocks in trading today.

SENSEX Index Rebalance: And That’s a Googly

Adani Ports & Special Economic Zone (ADSEZ IN) will replace Wipro Ltd (WPRO IN) in the S&P BSE SENSEX Index at the close on 21 June.
Adani Ports & Special Economic Zone (ADSEZ IN)‘s inclusion is a big surprise and there should be a move higher in the stock in the short-term.
Wipro Ltd (WPRO IN)‘s deletion was expected and there is positioning in the stock. But there is a lot that passives need to sell too.

Mainland Connect NORTHBOUND Flows (To 24 May 2024): Weak Net Buy, Weak Gross, Idiosyncratic Flows

The Quiddity Mainland Connect NORTHBOUND Monitor. Like the A/H Premium Monitor and HK Connect SOUTHBOUND Monitor. Lots of Flows/Position Tables and Charts with which to play.
Last week saw NORTHBOUND net BUY RMB 0.8bn of A-shares on lower gross volumes. NORTHBOUND bought CATL, China Yangtze Power, and Luxshare. AH Premia bounced, but net volumes are suspect.
There is some question as to whether the NORTHBOUND volumes to the buy side are all foreigners. Some suspect there is national team buying mixed in, as was expected.

Monthly Container Shipping Tracker | Pricing Still Firm | Share Prices Converging | (May 2024)

By Daniel Hellberg

Our index shows April pricing momentum remained positive in deep-sea trades
Evergreen Marine posted strong revenue and earnings growth in Q124
Container carriers have performed well YTD in 2024; we expect convergence

Pluxee (PLX.PA) – Sunday, Feb 25, 2024

Pluxee is a spin-off company with a strong business model, offering an attractive investment opportunity.
The company’s undervalued stock price and potential for growth make it a compelling choice for investors.
With large insider ownership, new initiatives, and the Bellon family as controlling shareholders, Pluxee is expected to see improvements and long-term success.

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.

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May 27

Daily Brief TMT/Internet: Techwing Inc, CosmoAM&T , Taiwan Semiconductor (TSMC) – ADR, Vanguard Intl Semiconductor, Renesas Electronics, Baidu and more

By Smartkarma Daily Briefs | Daily Briefs, TMT/Internet

In today’s briefing:

KOSDAQ150 Index Rebalance: Short Sell Ban Definitely Helping
KOSPI200 Index Rebalance: Index Committee Knows Best; Cosmo AM&T the Winner
Taiwan Tech Weekly: TSMC’s Latest Sub-Industry Guidance; PC Names Strong; Computex & Apple WDC Ahead
Vanguard (5347.TT): Planning to Announce the Construction of a 12″ Fab in Singapore in 2024.
ECM Weekly (27th May 2024) – Renesas, AUB, Modec, Tata Tech, MUFG, Shift Up, Novelis, Shulan
Baidu: Priced to Fail

KOSDAQ150 Index Rebalance: Short Sell Ban Definitely Helping

There are 13 inclusions and 13 exclusions for the KOSDAQ 150 Index (KOSDQ150 INDEX) at the June rebalance to be implemented at the close on 13 June.
For the second consecutive review, Fadu (440110 KS) and Shinsung DeltaTech (065350 KS) have been kept out of the index. Not sure what the index committee’s beef with them is.
The adds have outperformed the deletes and the KOSDAQ150 since the start of the review period. This has been helped, in no small, part by the ban on short selling.

KOSPI200 Index Rebalance: Index Committee Knows Best; Cosmo AM&T the Winner

There will be 6 additions and 6 deletions for the Korea Stock Exchange KOSPI 200 (KOSPI2 INDEX) at the June rebalance that will be implemented on 13 June.
The index committee has used a boatload of discretion in the inclusion of CosmoAM&T (005070 KS) and the deletion of some of the stocks.
The adds and deletes from the Information Technology sector will also have passive flow from the sector ETF and will increase the impact of the changes.

Taiwan Tech Weekly: TSMC’s Latest Sub-Industry Guidance; PC Names Strong; Computex & Apple WDC Ahead

By Vincent Fernando, CFA

TSMC’s Latest 2024E Industry Guidance Provided at Symposium in Taiwan
More Potential Details on Nvidia & Mediatek’s AI PC Chip to Compete with Qualcomm & Intel
Samsung’s HBM DRAM Chips Face Challenges in Meeting Nvidia’s AI Requirements

Vanguard (5347.TT): Planning to Announce the Construction of a 12″ Fab in Singapore in 2024.

By Patrick Liao

Vanguard should declare to established 12″ Fab in Singapore within 2014.
Vanguard is likely to announce the establishment of 2 sets of 12″ fabs in the next 6 months.
China is expanding 28/22nm and above technologies, and we believe it’s more appropriate for Vanguard to compete with others rather than TSMC.

ECM Weekly (27th May 2024) – Renesas, AUB, Modec, Tata Tech, MUFG, Shift Up, Novelis, Shulan

By Sumeet Singh

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, Go Digit managed to do well despite somewhat tepid subscription rates, while Shift Up (462870 KS) was looking to be the next hot listing in Korea.
On the placement front, Renesas Electronics (6723 JP) mega-block kept the cross-shareholding unwind going.

Baidu: Priced to Fail

By Wium Malan, CFA

Since late 2020, Search’s share of digital advertising revenue has stabilised at around 8-10%, seemingly retaining its core advertising customers and industries.
Baidu management expects AI Cloud to maintain strong revenue growth momentum in the upcoming quarters.
Baidu trades on a 3.6x NTM EV/EBITDA multiple, well below one standard deviation lower than its 5-year historical average trading range and the lowest it has ever been.

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May 27

Daily Brief Energy/Materials: China Molybdenum Co Ltd H, Natural Gas, UPL Ltd and more

By Smartkarma Daily Briefs | Daily Briefs, Energy & Materials Sector

In today’s briefing:

FXI Rebalance Preview: Cutoff Today; Two Changes Likely in June
Global Commodities: Gas be nimble, gas be quick…but there will be repercussions
Morning Views Asia: Lenovo, UPL Ltd, Xiaomi Corp

FXI Rebalance Preview: Cutoff Today; Two Changes Likely in June

With a day to go in the review period, there could be 2 changes for the iShares China Large-Cap (FXI) (FXI US) in June.
There should be more than 1x ADV to buy on one of the adds while there will be nearly 5x ADV to sell on one of the deletes.
There will be positioning in all the potential changes but there appears to be higher interest in one of the potential adds and one of the potential deletes.

Global Commodities: Gas be nimble, gas be quick…but there will be repercussions

By At Any Rate

Market fears production return will impact prices, with Wood McKenzie predicting increase in June production
Northeast, Permian, and Haynesville expected to see production rebound in the coming months
Price rally in US market driven by short summer positions, but weather will play a key role in price movements, with heat expected in the coming days potentially mitigating any retracement

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

Morning Views Asia: Lenovo, UPL Ltd, Xiaomi Corp

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.

Lenovo
UPL Ltd
Xiaomi Corp

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May 27

Daily Brief Industrials: Chilled & Frozen Logistics Holdings, COSCO SHIPPING Holdings , Adani Ports & Special Economic Zone, Contemporary Amperex Technology (CATL), AP Moeller – Maersk A/S, Pluxee and more

By Smartkarma Daily Briefs | Daily Briefs, Industrials

In today’s briefing:

Chilled & Frozen Logistics (9099 JP): Irrational Exuberance Takes Hold
Offshore China ETFs Rebalance Preview: Three Changes in June; Cutoff Today
SENSEX Index Rebalance: And That’s a Googly
Mainland Connect NORTHBOUND Flows (To 24 May 2024): Weak Net Buy, Weak Gross, Idiosyncratic Flows
Monthly Container Shipping Tracker | Pricing Still Firm | Share Prices Converging | (May 2024)
Pluxee (PLX.PA) – Sunday, Feb 25, 2024

Chilled & Frozen Logistics (9099 JP): Irrational Exuberance Takes Hold

Chilled & Frozen Logistics Holdings (9099 JP) shares are trading 85.7% above AZ-Com Maruwa Holdings (9090 JP) JPY3,000 offer due to the disclosure of four counterbidders.
The white knight “winning” bidder can secure the Board’s recommendation if it is the highest offer (likely well below the last close) and does not result in AZ-COM Maruwa-type dis-synergies.
AZ-COM Maruwa would face the dilemma of bumping, particularly if the white knight bidder secures irrevocables and the Board presents a compelling case to support the white knight bidder.

Offshore China ETFs Rebalance Preview: Three Changes in June; Cutoff Today

Based on the close of 24 May, there could be three changes for the iShares A50 China (2823 HK)/ CSOP China A50 (HKD) (2822 HK) in June.
COSCO SHIPPING (601919 CH), CRRC (601766 CH) and China National NuclearPower (601985 CH) could replace LONGi GreenEnergy (601012 CH), CSC Financial (601066 CH) and China Tourism Group DutyFree (601888 CH).
There are a couple of stocks that are close adds and could become adds if they outperform higher ranked stocks in trading today.

SENSEX Index Rebalance: And That’s a Googly

Adani Ports & Special Economic Zone (ADSEZ IN) will replace Wipro Ltd (WPRO IN) in the S&P BSE SENSEX Index at the close on 21 June.
Adani Ports & Special Economic Zone (ADSEZ IN)‘s inclusion is a big surprise and there should be a move higher in the stock in the short-term.
Wipro Ltd (WPRO IN)‘s deletion was expected and there is positioning in the stock. But there is a lot that passives need to sell too.

Mainland Connect NORTHBOUND Flows (To 24 May 2024): Weak Net Buy, Weak Gross, Idiosyncratic Flows

The Quiddity Mainland Connect NORTHBOUND Monitor. Like the A/H Premium Monitor and HK Connect SOUTHBOUND Monitor. Lots of Flows/Position Tables and Charts with which to play.
Last week saw NORTHBOUND net BUY RMB 0.8bn of A-shares on lower gross volumes. NORTHBOUND bought CATL, China Yangtze Power, and Luxshare. AH Premia bounced, but net volumes are suspect.
There is some question as to whether the NORTHBOUND volumes to the buy side are all foreigners. Some suspect there is national team buying mixed in, as was expected.

Monthly Container Shipping Tracker | Pricing Still Firm | Share Prices Converging | (May 2024)

By Daniel Hellberg

Our index shows April pricing momentum remained positive in deep-sea trades
Evergreen Marine posted strong revenue and earnings growth in Q124
Container carriers have performed well YTD in 2024; we expect convergence

Pluxee (PLX.PA) – Sunday, Feb 25, 2024

Pluxee is a spin-off company with a strong business model, offering an attractive investment opportunity.
The company’s undervalued stock price and potential for growth make it a compelling choice for investors.
With large insider ownership, new initiatives, and the Bellon family as controlling shareholders, Pluxee is expected to see improvements and long-term success.

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May 27

Daily Brief Health Care: HLB Life Science, Shanghai Henlius Biotech , China Resources Pharmaceutical, Jiangxi Rimag Group and more

By Smartkarma Daily Briefs | Daily Briefs, Healthcare

In today’s briefing:

What’s Still Concerning in the HLB Situation & HLB Life Science’s Stock Rights Trading Next Week
Shanghai Henlius Biotech (2696.HK) – Behind the Trading Halt and Privatization Rumor
China Healthcare Weekly (May.26)-VBP Scope Expands, Optimistic About Glove Industry, China Resources
Jiangxi Rimag IPO: FCF Generation and Margin Expansion. Expect ~30 New Imaging Centers By 2026

What’s Still Concerning in the HLB Situation & HLB Life Science’s Stock Rights Trading Next Week

By Sanghyun Park

HLB expects Jiangsu Hengrui to receive another CRL from the FDA, but specifics on CMC issues remain unclear. Due to the lack of clarity, it’s advisable to avoid trading HLB.
HLB IR stated they’ll apply for KOSPI transfer listing after FDA approval when asked by local media, suggesting it’s currently not under consideration.
We should instead consider short-term trading opportunities in HLB Life Science. Anticipate a surge in forfeited shares from Day 1, reminiscent of last year’s CJ CGV rights offer event.

Shanghai Henlius Biotech (2696.HK) – Behind the Trading Halt and Privatization Rumor

There are many rumors about Henlius’s trading halt, but Fosun Pharma had applied for the resumption of trading in H Shares, which makes us confused whether this is really privatization.
Henlius is in “an awkward position” in capital market. Fosun is to blame for Henlius’s low valuation. The high debt problem makes the profits generated from drug sales meaningless.
If Henlius cannot break away from the system controlled by Fosun, the complexity of corporate governance brought about by the relationship between Henlius and Fosun would inevitably affect investment judgment.

China Healthcare Weekly (May.26)-VBP Scope Expands, Optimistic About Glove Industry, China Resources

The NHSA issued a Notice on “improving the quality and expanding the scope of VBP”. The trend of full coverage of VBP of conventional drugs/consumables is determined.TCM is under pressure.
We analyzed the potential demand growth rate of the glove industry, which is already better than most cyclical stocks. Therefore, we see no need to remain pessimistic about this industry.
Holding platform companies have valuation discounts.HK$50-60 billion is reasonable market value for China Resources Pharmaceutical.Better to go long when share price is below HK$5 and then hold to receive dividends.

Jiangxi Rimag IPO: FCF Generation and Margin Expansion. Expect ~30 New Imaging Centers By 2026

By Andrei Zakharov

Jiangxi Rimag Group, China’s largest medical group with focus on medical imaging services, updated its PHIP and may enter the public market in June.
Terms of an IPO have not yet been set. The expected price range and the size of the offering were not disclosed in the company’s filings.
I’m positive on Jiangxi Rimag Group given the fast-growing TAM: third-party medical imaging center market accounts only for ~1% of the PRC medical imaging service market today.

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May 27

Daily Brief Financials: Korea Stock Exchange Kospi Index, Hoshino Resorts Reit, NIFTY Index, ICICI Securities Ltd and more

By Smartkarma Daily Briefs | Daily Briefs, Financials

In today’s briefing:

KRX Announces Final Version of Value-Up Disclosure Guidelines Alongside Dedicated Website Launch
Hoshino Resorts REIT Placement – Another Raising to Fund an Accretive Acquisition
EQD / NSE Volatility Update / 20-May-24 to 24-May-24
Icici Securities (NSE:ISEC) – Sunday, Feb 25, 2024

KRX Announces Final Version of Value-Up Disclosure Guidelines Alongside Dedicated Website Launch

By Sanghyun Park

Starting May 27th, KRX-listed firms can voluntarily disclose value-up details, publicly available on the website. Additionally, view five investment indicators for all KRX-listed companies below.
Finalized version similar to draft, with added content requested by listed companies, like R&D investment growth rate. Tax incentives excluded, awaiting alignment with Ministry’s plan in July.
KRX keeps a screening framework for the index akin to March’s criteria, with ROE likely having the highest weight. Recent signals hint at increasing dividend weighting.

Hoshino Resorts REIT Placement – Another Raising to Fund an Accretive Acquisition

By Clarence Chu

Hoshino Resorts Reit (3287 JP) is looking to raise US$125m from a primary follow-on. Proceeds will be used to acquire the OMO7 Osaka asset.
The REIT has been active on the acquisition front, undertaking a number of capital raisings in recent years.
In this note, we will talk about the placement and run the deal through our ECM framework.

EQD / NSE Volatility Update / 20-May-24 to 24-May-24

By Sankalp Singh

Multiple factors help IVs stabilize after last week’s spike. “High & Up” vol state to persist until elections results on 04-June-2024.
SEBI makes changes to Dynamic Price-band Mechanism. Will impact options market-making & should have an overall Vol suppressing effect.
Nifty50 10-delta Risk-reversals extend to -8.5% as the Index reaches 23000. Risk-premia favouring puts over calls is looking over-extended.

Icici Securities (NSE:ISEC) – Sunday, Feb 25, 2024

Recommendation to buy ISEC shares at Rs 840 per share with a price target of Rs 1200 per share
Dissatisfaction among minority shareholders due to insider’s attempt to acquire remaining shares at a lower price
Illiquidity and limited institutional investors due to Parent owning 75% of shares, potential merger poses a risk but shareholders can extract fair value even in a merger scenario

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May 27

Daily Brief Consumer: Meituan, Great Wall Motor, L’Occitane, TSE Tokyo Price Index TOPIX, XPeng , Warby Parker Inc and more

By Smartkarma Daily Briefs | Consumer, Daily Briefs

In today’s briefing:

HK Connect SOUTHBOUND Flows (To 24 May 2024); Strong Bank Buying and Tech Selling Continues
A/H Premium Tracker (To 24 May 2024): HK Stocks Have a BAD Week and AH Premium Rebounds In
Merger Arb Mondays (27 May) – L’Occitane, SciClone, GA Pack, KFC Japan, CF Logistics, Best World
Many Companies Still Consider Engagement with Investors to Be Someone Else’s Business
China Consumption Weekly (27 May 2024): Xpeng, Tongcheng, Kanzhun, Gaotu, KE, Bilibili, and Weibo
Warby Parker Inc (WRBY) – Friday, Feb 23, 2024

HK Connect SOUTHBOUND Flows (To 24 May 2024); Strong Bank Buying and Tech Selling Continues

SOUTHBOUND was again a net buyer for HK$18.6bn on strong two-way volumes. The top three net buys of the week were SOE banks. Some may be Central Huijin.
Some of this may be driven by the dividend w/h tax cancellation on H divs and by significant H-share discounts, but high-div CNOOC was the biggest net sell.
No end to the inflows, and HK valuations are not at a place where they would hamper continued flows. Alibaba making HK a Primary will spur more inflows over time.

A/H Premium Tracker (To 24 May 2024): HK Stocks Have a BAD Week and AH Premium Rebounds In

The New/Better A-H Premium Tracker has tables, charts, measures galore to track A/H premium positioning, southbound and northbound positioning/volatility in pairs over time, etc.
SOUTHBOUND’s buy streak continued this past week; every day was net positive. NORTHBOUND was net positive too. It is not clear how much is National Team buying. Much may be.
AH Premia rebounded off multi-year lows, on average, this past week as Hang Seng and other HK indices fell sharply and A-shares did not fall as much.

Merger Arb Mondays (27 May) – L’Occitane, SciClone, GA Pack, KFC Japan, CF Logistics, Best World

We summarise the latest spreads and newsflow of merger arb situations we cover across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
Highest spreads: Yichang HEC Changjiang Pharma (1558 HK), Hollysys Automation Technologies (HOLI US), Ansarada Group Ltd (AND AU), Malaysia Airports Holdings (MAHB MK), China Traditional Chinese Medicine (570 HK).
Lowest spreads: Chilled & Frozen Logistics Holdings (9099 JP), Mma Offshore (MRM AU), Great Eastern Holdings (GE SP), Mimasu Semiconductor Industry (8155 JP), Boral Ltd (BLD AU).

Many Companies Still Consider Engagement with Investors to Be Someone Else’s Business

By Aki Matsumoto

Although it’s possible to move AGM forward given the timing of financial reporting, 70% of companies will hold their AGM during the 3 days of the last week of June.
As long as the concentration of AGM dates continues, the start of electronic provision of AGM documents should at least be accelerated to allow time to review the agenda.
Only slightly less than 30% of prime market listed companies provide English translations of all convocation notices, including business reports and financial statements.

China Consumption Weekly (27 May 2024): Xpeng, Tongcheng, Kanzhun, Gaotu, KE, Bilibili, and Weibo

By Ming Lu

In 1Q24, Revenues of Xpeng, Tongcheng, Kanzhun, and Gaotu grew by 62% YoY, 50%, YoY, 43% YoY and 34% YoY.
KE’s revenue decreased by 20% YoY in 1Q24 due to the weak property market.
Bilibili’s value added services revenue grew by 17% YoY and advertising revenue grew by 31% YoY.

Warby Parker Inc (WRBY) – Friday, Feb 23, 2024