Category

Daily Briefs

May 25
0

Daily Brief Quantitative Analysis: Hong Kong Buybacks Weekly (May 24th): Tencent and more

By | Daily Briefs, Quantitative Analysis

In today’s briefing:

  • Hong Kong Buybacks Weekly (May 24th): Tencent, Hang Seng Bank, Techtronic Industries
  • ASX Short Interest Weekly (May 17th): Woodside Energy, Seven, ANZ, Car

Hong Kong Buybacks Weekly (May 24th): Tencent, Hang Seng Bank, Techtronic Industries

By Ke Yan, CFA, FRM

  • We analyze statistics on top repurchases over one week, one month, one quarter and one year periods ended on May 24th based on HKEx daily reports.
  • In the past 7 days, the top 3 companies that repurchased the most shares from the market were Tencent (700 HK), Hang Seng Bank (11 HK), Techtronic Industries (669 HK).
  • In the past 30 days, the top 3 companies that repurchased the most shares from the market were Tencent (700 HK), Hang Seng Bank (11 HK), Meituan (3690 HK).

ASX Short Interest Weekly (May 17th): Woodside Energy, Seven, ANZ, Car

By Ke Yan, CFA, FRM

  • We analyzed the changes in short interest of ASX Stocks as of May 17th (reported today) which has an aggregated short interest worth USD20.3bn.
  • We tabulate league table for top short by value and short as multiple of ADT, as well as weekly increases & decreases in short value, short as multiple of ADT.
  • We highlight short interest changes in Woodside Energy, Seven, ANZ, Car.

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May 25
0

Daily Brief Thematic (Sector/Industry): Themes of India: Construction Equipment Industry and more

By | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

  • Themes of India: Construction Equipment Industry
  • #4Business Buzz: Chinese Bond, Recovery in Adani, Alibaba & AI, Jio’s Deal of 36000Cr
  • Thematic Report: Indian Markets at All Time; Should You Invest Now?
  • Japan Weekly | Global Markets in Flux; MS&AD, Fujikura, Fuji Elec
  • [Blue Lotus Daily]: 300274SZ/DQ US/CSIQ US/JKSUS/601615SH/2208HK/601012SH/XPEV/1211HK/LI/NIO/TSLA

Themes of India: Construction Equipment Industry

By Sudarshan Bhandari

  • India’s construction equipment sector surged by 26% in FY23, hitting a milestone of over 100,000 units sold, driven by infrastructure and railway demand.
  • Obust growth in infrastructure projects, valued at USD 7.9 Bn in 2023, with an estimated growth to USD 12.4 Bn by 2029, highlights a thriving market.
  • 2 Companies in India is riding on the wave of this fast growing construction equipment industry.

#4Business Buzz: Chinese Bond, Recovery in Adani, Alibaba & AI, Jio’s Deal of 36000Cr

By Nimish Maheshwari

  • China saw 3.9 trillion yuan shift from cash to bonds and wealth products in April 2024.
  • Adani Enterprises (ADE IN) has fully recovered the $30 billion stock loss from the Hindenburg Report.
  • Alibaba Group Holding (BABA US) raised $4.5 billion via convertible bonds for buybacks and AI investments.

Thematic Report: Indian Markets at All Time; Should You Invest Now?

By Sudarshan Bhandari

  • Data and historical trends suggest that investing at all time highs can still be profitable in the long run.
  • It is important to focus on earnings growth, long term time frames, and the power of compounding. Indian markets have a track record of generating multi-bagger returns.
  • All time highs should not be feared, but rather seen as a sign of a growing and healthy market.

Japan Weekly | Global Markets in Flux; MS&AD, Fujikura, Fuji Elec

By Mark Chadwick

  • Overseas markets face pressure from Fed comments and strong economic data, finding relief in earnings, but uncertainty persists into next week.
  • Japanese equities react to US moves, with Topix down slightly; inflation aligns with expectations, but pressure remains for tighter policy.
  • MS&AD Insurance Group surges 14% with robust shareholder returns; Fujikura rises 12% on revised earnings and improved outlook, while Fuji Electric falls 10% on conservative growth projections.

[Blue Lotus Daily]: 300274SZ/DQ US/CSIQ US/JKSUS/601615SH/2208HK/601012SH/XPEV/1211HK/LI/NIO/TSLA

By Eric Wen

  • 300274 SZ/DQ US/CSIQ US/JKS US/601615 SH/2208 HK/601012 SH: Domestic new energy installed capacity further slows downDomestic new energy installed capacity further slows down (/////////////)
  • XPEV US: Xpeng Motors’ losses narrowed slightly in the first quarter of 2024 as software sales to Volkswagen increased gross profits (+)
  • 1211HK/LIUS/NIOUS/XPEVUS/TSLAUS:20th week of 2024, BYD fell back a bit while Tesla recovered most of lost ground, Nio and Xiaomi had strong deliveries, and LI once again beat AITO (-/+/+/-/+)

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May 25
0

Daily Brief Event-Driven: SciClone Pharma (6600 HK): Scheme Vote on 19 June and more

By | Daily Briefs, Event-Driven

In today’s briefing:

  • SciClone Pharma (6600 HK): Scheme Vote on 19 June
  • KOSPI200 June ’24 Rebalance: Index Changes Released, 6 Additions & 6 Deletions
  • Unexpected Inclusion of Cosmo AM&T in KOSPI 200 Sparks Notable One-Day Flow Via KOSPI 200 IT
  • EQD | Hang Seng Down: How Low Can the Pullback Go?
  • Iberdrola/Avangrid: Spread

SciClone Pharma (6600 HK): Scheme Vote on 19 June

By Arun George

  • Sciclone Pharmaceuticals (6600 HK)‘s scheme document is out, and the court meeting is scheduled for 19 June. The IFA considers the HK$18.80 per share offer fair and reasonable. 
  • The key condition is approval by at least 75% of disinterested shareholders (<10% of all disinterested shareholders rejection). No independent shareholder holds a blocking stake.
  • This is a done deal. At the last close and for the 12 July payment, the gross and annualised spread is 2.2% and 17.3%, respectively.

KOSPI200 June ’24 Rebalance: Index Changes Released, 6 Additions & 6 Deletions

By Charlotte van Tiddens, CFA

  • The KRX have announced the index changes for the KOSPI200 June review.
  • The index will be rebalanced in the closing auction on Thursday the 13th of June.
  • There will be 6 additions to the index and 6 deletions.

Unexpected Inclusion of Cosmo AM&T in KOSPI 200 Sparks Notable One-Day Flow Via KOSPI 200 IT

By Sanghyun Park

  • Unexpectedly, KRX included Cosmo AM&T (005070 KS) despite not meeting the market cap cutoff and excluded DB Hitek (000990 KS) and Lotte Energy Materials (020150 KS).
  • Cosmo AM&T’s unexpected inclusion triggers a significant one-day passive flow event through the KOSPI 200 IT, the sector index with the largest AUM.
  • Sector index rebalancing, a single-day event managed by one ETF operator, more significantly correlates flow direction with price impact. We should consider a long-short setup for these on June 13th.

EQD | Hang Seng Down: How Low Can the Pullback Go?

By Nico Rosti

  • The Hang Seng Index has been rallying for 3 weeks but then last week the rise was halted and the index gave up a good chunk of the gains.
  • It seems the index has become quite volatile but this week it could go up again, or otherwise next week, the reversal is imminent given its oversold condition.
  • It’s hard to predict if the rally can continue after the bounce, the index seems a bit long-term overbought, albeit short-term oversold. A contradiction, but that is the situation now.

Iberdrola/Avangrid: Spread

By Jesus Rodriguez Aguilar

  • Post-March announcement, investors bought shares of Avangrid (AGR US)  in the hope of an offer sweetening, which was flagged here, as Iberdrola got $6 billion from its Mexico exit.
  • The improved $35.75/shareoffer was made in response to potential resistance from prospective minority shareholders, as the deal needs the approval of a majority of these non-Iberdrola stakeholders.
  • Spread is 3.2%/5.55% (gross/annualised) assuming $1.4667 in dividend payments (three dividends of $0.44 and a prorated dividend of $0.1467) and settlement on 30 December. Long.

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May 25
0

Daily Brief Equity Bottom-Up: Formosa Sumco Technology – Earnings and more

By | Daily Briefs, Equity Bottom-Up

In today’s briefing:

  • Formosa Sumco Technology – Earnings, Returns, Financial Position, Worsening Dramatically
  • Tech Supply Chain Tracker (25-May-2024): Global EV charger market & key players
  • [PDD Holdings (PDD US,BUY,TP US$172) TP Change]:Squeezing Supplier Base for Its Own Benefit,Globally
  • Japanese Bigger-Cap Banks – Rates Story Continues, with the Prospect of Equity Holdings Disposals
  • [Kuaishou (1024 HK, BUY, TP HK$83) Target Price Change]: Out-Performance in Off-Season Thanks to GAI
  • Uber Technologies: Partnership Strategy and Advancements in Autonomous Vehicles! – Major Drivers
  • Exact Sciences Corporation: Leveraging Health Systems and Electronic Ordering Channels To Catalyze Growth! – Major Drivers
  • Insulet Corporation: Will Its Innovative Edge In The Insulin Pump Market Last? – Major Drivers
  • Duolingo Inc.: Investment in English Learning Content and Use of Generative AI! – Major Drivers
  • Hyatt Hotels Corporation: Favorable China Dynamics

Formosa Sumco Technology – Earnings, Returns, Financial Position, Worsening Dramatically

By Daniel Tabbush

  • The company recently announced poor earnings down 56% YoY in 1Q24
  • Dwindling cash is another major concern especially with higher debt/ebitda
  • At 15-25% ROE is sensible but now back toward 5% there is less enthusiasm

Tech Supply Chain Tracker (25-May-2024): Global EV charger market & key players

By Tech Supply Chain Tracker

  • Global EV charger market overview with key players highlighted in the industry, including a focus on technological advancements.
  • Ex-IBM Chief Accessibility Officer seeks to revolutionize digital inclusion in Taiwan’s manufacturing sector through innovative strategies and initiatives.
  • Updates on notebook shipment for April 2024, global smartphone sales in the first quarter of 2024 as well as collaborations such as SDC & Lenovo teaming up to launch slidable display devices by 2025.

[PDD Holdings (PDD US,BUY,TP US$172) TP Change]:Squeezing Supplier Base for Its Own Benefit,Globally

By Ying Pan

  • PDD reported C1Q24 top-line, non-GAAP EBIT, and non-GAAP net income 1.3%, 67.0%, and 80.0% vs. our estimate, and 13.9%, 82.0%, and 94.7% vs. consensus, respectively;
  • Temu unit economics improvement drove the 1Q beat. Per order outlay on marketing and fulfilment declined 20-25% qoq, we estimate;
  • PDD continues to effectively squeeze merchants for its benefit,while also benefiting from weak consumer sentiment in China and overseas. We maintain BUY,and raise TP to US$172, implying 12.3x CY24 PE.

Japanese Bigger-Cap Banks – Rates Story Continues, with the Prospect of Equity Holdings Disposals

By Victor Galliano

  • The continued “higher for longer” interest rates in the US, along with widening JGB yields adds weight to the Bank of Japan potentially raising benchmark rates further
  • In this report, we expand our coverage of the bigger cap banks’ metrics to include the equity holdings of the top six market caps and the banks’ BoJ deposits
  • We see further upside for Japanese bank shares, especially those geared into higher domestic rates and with the potential for equity holdings disposals; we like Resona, Mizuho, SMFG and Concordia

[Kuaishou (1024 HK, BUY, TP HK$83) Target Price Change]: Out-Performance in Off-Season Thanks to GAI

By Ying Pan

  • Kuaishou reported C1Q24 revenue, IFRS OP, and IFRS Net income inline, 58%, and 78% vs. our estimates; and inline, 67% and 86% vs. consensus
  • Company suggested contribution of Generative AI (GAI) to the growth of the advertising business to be substantial;
  • We reiterate our BUY rating and raised target price to HK$83, implying 17x PE in 2025.

Uber Technologies: Partnership Strategy and Advancements in Autonomous Vehicles! – Major Drivers

By Baptista Research

  • Uber has kicked off 2024 with positive growth, reporting a 21% year-on-year increase in rides, which equates to its gross bookings growth rate. Their user base expanded by 15%, underpinned by 7.1 million drivers and couriers operating on the platform. The firm’s record adjusted EBITDA of $1.4 billion and the generation of $4.2 billion in free cash flow over the last year reflect a significant financial upswing. However, the world of automobiles is shifting towards autonomous vehicles (AVs), posing both challenges and opportunities for Uber. The firm needs to strategize to withstand expected competition from entities like Tesla. CEO Dara Khosrowshahi maintains that breakthroughs in AV technology will eventually prove profitable for Uber, as they promise safer rides and broader accessibility. However, the transition period from human-driven to autonomous vehicles will demand a balanced approach, exploiting both to keep the business steady. 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. In this report, we have carried out a fundamental analysis of the historical financial statements of the company. We have added reasonable forecasts of the annualized income statement and cash flows and carried out a DCF valuation of the company using its Weighted Average Cost of Capital (WACC) to determine a forecasted share price. We have further incorporated a sensitivity analysis/ scenario analysis to understand how changes in key assumptions could impact the valuation under 3 scenarios – a base case, a bull case, and a bear case. These additional layers of analysis serve to provide a comprehensive and robust valuation, giving investors a nuanced understanding of the inherent risks and opportunities.

Exact Sciences Corporation: Leveraging Health Systems and Electronic Ordering Channels To Catalyze Growth! – Major Drivers

By Baptista Research

  • Exact Sciences Corporation’s first quarter 2024 earnings. The quarter demonstrated robust performance with first quarter revenue growing by 6% to $638 million. Particularly noteworthy was the 7% increase in screening revenue to $475 million, which is attributed to the company’s successful optimization of billing and patient compliance systems. However, Exact Sciences faces a tough comparison base, as its growth in the previous year was buoyed by enhancements to billing and patient compliance systems and a weak flu season. The expansion of Precision Oncology revenue by 5% to $163 million also contributed to the company’s growth. 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. In this report, we have carried out a fundamental analysis of the historical financial statements of the company. We have added reasonable forecasts of the annualized income statement and cash flows and carried out a DCF valuation of the company using its Weighted Average Cost of Capital (WACC) to determine a forecasted share price. We have further incorporated a sensitivity analysis/ scenario analysis to understand how changes in key assumptions could impact the valuation under 3 scenarios – a base case, a bull case, and a bear case. These additional layers of analysis serve to provide a comprehensive and robust valuation, giving investors a nuanced understanding of the inherent risks and opportunities.

Insulet Corporation: Will Its Innovative Edge In The Insulin Pump Market Last? – Major Drivers

By Baptista Research

  • Insulet Corporation reported an excellent first quarter of 2024 that has exceeded expectations. The demand for Omnipod 5 continues to rise, the leading insulin delivery system, fueling a robust revenue growth. Performance-wise, the company achieved an overall Omnipod revenue growth of 21%, including a US growth of 23% and an international growth of 15%.
  • The Omnipod 5 has brought significant success to Insulet in both the US and international markets, thanks to its simplicity and affordability. This offering has assisted in driving market growth, as demonstrated by the fact that during the quarter, approximately 85% of new starts came from people previously utilizing multiple daily injections. This pattern of new starts is encouraging because these new starters originated from Insulet’s target market. 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. In this report, we have carried out a fundamental analysis of the historical financial statements of the company. We have added reasonable forecasts of the annualized income statement and cash flows and carried out a DCF valuation of the company using its Weighted Average Cost of Capital (WACC) to determine a forecasted share price. We have further incorporated a sensitivity analysis/ scenario analysis to understand how changes in key assumptions could impact the valuation under 3 scenarios – a base case, a bull case, and a bear case. These additional layers of analysis serve to provide a comprehensive and robust valuation, giving investors a nuanced understanding of the inherent risks and opportunities.

Duolingo Inc.: Investment in English Learning Content and Use of Generative AI! – Major Drivers

By Baptista Research

  • Duolingo Inc. recently released its Q1 2024 shareholder letter, announcing positive financial results while outlining future initiatives. The company achieved revenue and bookings growth of 45% and 41% respectively and saw active daily users grow by 54% YoY, signaling the effectiveness of their product-driven flywheel. The strategy of offering efficient language tutoring, driving user growth, and converting users to subscribers has proven to be beneficial for the platform. Duolingo also announced record profitability for the quarter. 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. In this report, we have carried out a fundamental analysis of the historical financial statements of the company. We have added reasonable forecasts of the annualized income statement and cash flows and carried out a DCF valuation of the company using its Weighted Average Cost of Capital (WACC) to determine a forecasted share price. We have further incorporated a sensitivity analysis/ scenario analysis to understand how changes in key assumptions could impact the valuation under 3 scenarios – a base case, a bull case, and a bear case. These additional layers of analysis serve to provide a comprehensive and robust valuation, giving investors a nuanced understanding of the inherent risks and opportunities.

Hyatt Hotels Corporation: Favorable China Dynamics

By Baptista Research

  • Hyatt revealed in its Q1 Earnings that the year has started vigourously for them, displaying growth in multiple dimensions and expanding fees. The occupancy and RevPAR trends they have been observing are strong, driven by noteworthy demands across all customer segments. An increase of 5.5% in system-wide RevPAR was seen in Q1 on the back of robust leisure travel trends. While there is expectation of a subdued year-over-year growth rate, the rates are noticeably above pre pandemic levels. They also observed healthy business transient revenue indicating resumption in business travel. Furthermore, Hyatt’s loyalty program saw a growth of 22% over the past year, reaching a total of approximately 46 million members. 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. In this report, we have carried out a fundamental analysis of the historical financial statements of the company. We have added reasonable forecasts of the annualized income statement and cash flows and carried out a DCF valuation of the company using its Weighted Average Cost of Capital (WACC) to determine a forecasted share price. We have further incorporated a sensitivity analysis/ scenario analysis to understand how changes in key assumptions could impact the valuation under 3 scenarios – a base case, a bull case, and a bear case. These additional layers of analysis serve to provide a comprehensive and robust valuation, giving investors a nuanced understanding of the inherent risks and opportunities.

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May 25
0

Daily Brief Australia: RAS Technology Holdings and more

By | Australia, Daily Briefs

In today’s briefing:

  • Ras Technology Holdings Ltd (RTH) – Friday, Feb 23, 2024

Ras Technology Holdings Ltd (RTH) – Friday, Feb 23, 2024

By Value Investors Club

  • Racing and Sports provides data, content, and SaaS solutions to global racing and wagering industries
  • Despite challenges post-IPO, such as founders selling stakes and market volatility, RAS shows solid execution and progress towards profitability
  • Considered undervalued by investors due to strong business model and impressive financial metrics, RAS remains promising in sports wagering industry

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 25
0

Daily Brief Macro: CrossASEAN Ground Zero – Food Panda Sale and more

By | Daily Briefs, Macro

In today’s briefing:

  • CrossASEAN Ground Zero – Food Panda Sale, Lazada Fundraising, ACommerce, and PropertyGuru’s Loss
  • Trading Idea Post Changes to KOSPI 200 and KOSDAQ 150
  • Portfolio Watch: Trading the next of the rolling melt-ups
  • Malaysia CPI Inflation 1.8% y-o-y (consensus 1.9%) in Apr-24
  • Quant Signals: PCA model and Backtesting Features
  • HEW: Punting On As Good As It Gets
  • Walker’s Weekly: Dr. Jim’s Summary of Key Global Macro Developments – 24 May 2024

CrossASEAN Ground Zero – Food Panda Sale, Lazada Fundraising, ACommerce, and PropertyGuru’s Loss

By Angus Mackintosh

  • This week we look at the sale of Food Panda Taiwan to Uber and what is next for Southeast Asian operations, and we look at the management changes at GoTo.
  • We also look at Lazada’s latest capital raising, aCommerce’s results, and PropertyGuru (PGRU US), which slipped back into the red in 1Q2024. 
  • CrossASEAN Ground Zero is a thematic weekly product that focuses on key Southeast Asian themes and technology trends with a core focus on Indonesia.

Trading Idea Post Changes to KOSPI 200 and KOSDAQ 150

By Douglas Kim

  • KRX announced changes to KOSPI 200 and KOSDAQ 150 indices. In KOSPI 200, 6 were added and 6 were removed. In KOSDAQ 150, 13 were added and 13 were removed. 
  • The six additions to KOSPI 200 had an average share price increase of 17.7% YTD. The six deletions had an average share price decline of 2.5% YTD.
  • One trading idea post the announcement of the KOSPI 200 and KOSDAQ 150 rebalances is to highlight the potential underperformers (including 20 lowest market cap stocks in KOSPI200/KOSDAQ150 post rebalance). 

Portfolio Watch: Trading the next of the rolling melt-ups

By Andreas Steno

  • Welcome to our weekly Portfolio Watch.
  • We have had a decent week as our short bet on Utilities has started to deliver, while a continued long bet in technology (and ETH) has been the game in town in the risk asset space.
  • The liquidity trajectory is slightly murky over the next 2-3 weeks before a major reversal from mid-June and onwards as the net issuance pace of T-bills will be ramped up again into July tapping liquidity from the ON RRP along the way.

Malaysia CPI Inflation 1.8% y-o-y (consensus 1.9%) in Apr-24

By Heteronomics AI

  • Malaysia’s CPI inflation in April 2024 remained at 1.8% year-on-year, against the consensus expectation of a rise to 1.9%.
  • The current rate is just 0.1 percentage points lower than the one-year average.
  • This confirms broader stability at a near-target inflation rate.
This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

Quant Signals: PCA model and Backtesting Features

By Andreas Steno

  • Steno Research PCA model Using a Principal Component Analysis (PCA) model to analyze assets across financial markets provides a powerful framework for investment decisions.
  • By mapping out the macro anatomy of a given asset, PCA identifies key trends and underlying patterns that influence price fluctuations and market dynamics.
  • In this process, we have defined what we see as the most important global macro factors, ensuring that our analysis is comprehensive and targeted.

HEW: Punting On As Good As It Gets

By Phil Rush

  • UK inflation was lowered due to falling utility prices, prompting a general election on 4 July. However, the fall and Ofgem cap cut were smaller than expected, leading to a delay in BoE rate cut pricing.
  • Indicators suggest that real growth may have peaked and PMIs are expected to seasonally retrace.
  • The upcoming week is relatively quiet due to a bank holiday and half-term breaks. The highlight is Friday’s flash HICP inflation data, with a consensus forecast of 2.5%. Colombia is one of the few countries with upcoming monetary policy decisions.

Walker’s Weekly: Dr. Jim’s Summary of Key Global Macro Developments – 24 May 2024

By Dr. Jim Walker

  • Indonesia’s President-elect Prabowo Subianto’s impact on the economy is uncertain, with a need for increased foreign direct investment and improved economic strategies.
  • China’s steady economic recovery features strong exports and government efforts to stabilize the property market, with a growing demand for wealth management products and longer-term bonds.
  • The US Federal Reserve is expected to maintain higher interest rates throughout 2024 due to strong employment and high inflation, contrasting with more favorable borrowing conditions in China.

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May 25
0

Daily Brief South Korea: Hanmi Semiconductor, DB Hitek Co., Ltd. and more

By | Daily Briefs, South Korea

In today’s briefing:

  • KOSPI200 June ’24 Rebalance: Index Changes Released, 6 Additions & 6 Deletions
  • Unexpected Inclusion of Cosmo AM&T in KOSPI 200 Sparks Notable One-Day Flow Via KOSPI 200 IT

KOSPI200 June ’24 Rebalance: Index Changes Released, 6 Additions & 6 Deletions

By Charlotte van Tiddens, CFA

  • The KRX have announced the index changes for the KOSPI200 June review.
  • The index will be rebalanced in the closing auction on Thursday the 13th of June.
  • There will be 6 additions to the index and 6 deletions.

Unexpected Inclusion of Cosmo AM&T in KOSPI 200 Sparks Notable One-Day Flow Via KOSPI 200 IT

By Sanghyun Park

  • Unexpectedly, KRX included Cosmo AM&T (005070 KS) despite not meeting the market cap cutoff and excluded DB Hitek (000990 KS) and Lotte Energy Materials (020150 KS).
  • Cosmo AM&T’s unexpected inclusion triggers a significant one-day passive flow event through the KOSPI 200 IT, the sector index with the largest AUM.
  • Sector index rebalancing, a single-day event managed by one ETF operator, more significantly correlates flow direction with price impact. We should consider a long-short setup for these on June 13th.

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May 25
0

Daily Brief Singapore: UOB and more

By | Daily Briefs, Singapore

In today’s briefing:

  • STI Banks Book S$500M YTD Net Institutional Inflows

STI Banks Book S$500M YTD Net Institutional Inflows

By Geoff Howie

  • DBS, OCBC and UOB have booked S$500 million in combined net institutional inflow for the 2024 year through to 23 May.
  • Combined net interest income (NII) for the trio was S$8.3 billion in 1QFY24, the sixth consecutive quarter combined NII surpassed S$8.0 billion, and up 46% from the combined S$5.7 billion in 4QFY19.
  • This compares to the trio averaging 5.8% total returns for the full 2023 year, with S$2.5 billion of combined net institutional outflow.

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May 25
0

Daily Brief United States: Uber Technologies , Exact Sciences, Insulet Corp, Warner Music Group , ROBLOX , Fox , Duolingo, Hyatt Hotels Corp Cl A, New York Times Co A, Chesapeake Financial Shares In and more

By | Daily Briefs, United States

In today’s briefing:

  • Uber Technologies: Partnership Strategy and Advancements in Autonomous Vehicles! – Major Drivers
  • Exact Sciences Corporation: Leveraging Health Systems and Electronic Ordering Channels To Catalyze Growth! – Major Drivers
  • Insulet Corporation: Will Its Innovative Edge In The Insulin Pump Market Last? – Major Drivers
  • Warner Music Group: A Tale Of Increasing Presence in Dynamic Music Markets! – Major Drivers
  • Roblox Corporation: Will Enabling In-World Advertising Catalyze Revenue Growth? – Major Drivers
  • Fox Corporation: A Robust Network Portfolio and Targeted Content Strategy! – Major Drivers
  • Duolingo Inc.: Investment in English Learning Content and Use of Generative AI! – Major Drivers
  • Hyatt Hotels Corporation: Favorable China Dynamics
  • The New York Times: A Story Of Increased Subscriber Engagement and Monetization Opportunities! – Major Drivers
  • CPKF: Initiating our 2025 Estimates

Uber Technologies: Partnership Strategy and Advancements in Autonomous Vehicles! – Major Drivers

By Baptista Research

  • Uber has kicked off 2024 with positive growth, reporting a 21% year-on-year increase in rides, which equates to its gross bookings growth rate. Their user base expanded by 15%, underpinned by 7.1 million drivers and couriers operating on the platform. The firm’s record adjusted EBITDA of $1.4 billion and the generation of $4.2 billion in free cash flow over the last year reflect a significant financial upswing. However, the world of automobiles is shifting towards autonomous vehicles (AVs), posing both challenges and opportunities for Uber. The firm needs to strategize to withstand expected competition from entities like Tesla. CEO Dara Khosrowshahi maintains that breakthroughs in AV technology will eventually prove profitable for Uber, as they promise safer rides and broader accessibility. However, the transition period from human-driven to autonomous vehicles will demand a balanced approach, exploiting both to keep the business steady. 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. In this report, we have carried out a fundamental analysis of the historical financial statements of the company. We have added reasonable forecasts of the annualized income statement and cash flows and carried out a DCF valuation of the company using its Weighted Average Cost of Capital (WACC) to determine a forecasted share price. We have further incorporated a sensitivity analysis/ scenario analysis to understand how changes in key assumptions could impact the valuation under 3 scenarios – a base case, a bull case, and a bear case. These additional layers of analysis serve to provide a comprehensive and robust valuation, giving investors a nuanced understanding of the inherent risks and opportunities.

Exact Sciences Corporation: Leveraging Health Systems and Electronic Ordering Channels To Catalyze Growth! – Major Drivers

By Baptista Research

  • Exact Sciences Corporation’s first quarter 2024 earnings. The quarter demonstrated robust performance with first quarter revenue growing by 6% to $638 million. Particularly noteworthy was the 7% increase in screening revenue to $475 million, which is attributed to the company’s successful optimization of billing and patient compliance systems. However, Exact Sciences faces a tough comparison base, as its growth in the previous year was buoyed by enhancements to billing and patient compliance systems and a weak flu season. The expansion of Precision Oncology revenue by 5% to $163 million also contributed to the company’s growth. 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. In this report, we have carried out a fundamental analysis of the historical financial statements of the company. We have added reasonable forecasts of the annualized income statement and cash flows and carried out a DCF valuation of the company using its Weighted Average Cost of Capital (WACC) to determine a forecasted share price. We have further incorporated a sensitivity analysis/ scenario analysis to understand how changes in key assumptions could impact the valuation under 3 scenarios – a base case, a bull case, and a bear case. These additional layers of analysis serve to provide a comprehensive and robust valuation, giving investors a nuanced understanding of the inherent risks and opportunities.

Insulet Corporation: Will Its Innovative Edge In The Insulin Pump Market Last? – Major Drivers

By Baptista Research

  • Insulet Corporation reported an excellent first quarter of 2024 that has exceeded expectations. The demand for Omnipod 5 continues to rise, the leading insulin delivery system, fueling a robust revenue growth. Performance-wise, the company achieved an overall Omnipod revenue growth of 21%, including a US growth of 23% and an international growth of 15%.
  • The Omnipod 5 has brought significant success to Insulet in both the US and international markets, thanks to its simplicity and affordability. This offering has assisted in driving market growth, as demonstrated by the fact that during the quarter, approximately 85% of new starts came from people previously utilizing multiple daily injections. This pattern of new starts is encouraging because these new starters originated from Insulet’s target market. 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. In this report, we have carried out a fundamental analysis of the historical financial statements of the company. We have added reasonable forecasts of the annualized income statement and cash flows and carried out a DCF valuation of the company using its Weighted Average Cost of Capital (WACC) to determine a forecasted share price. We have further incorporated a sensitivity analysis/ scenario analysis to understand how changes in key assumptions could impact the valuation under 3 scenarios – a base case, a bull case, and a bear case. These additional layers of analysis serve to provide a comprehensive and robust valuation, giving investors a nuanced understanding of the inherent risks and opportunities.

Warner Music Group: A Tale Of Increasing Presence in Dynamic Music Markets! – Major Drivers

By Baptista Research

  • Warner Music Group (WMG) demonstrates its influence in the music industry with a global team that continuously delivers for its artists and drives the business forward. In the second quarter earnings call transcript, Warner Music Group specified that the total revenue increased by 7% with Recorded Music and Music Publishing increasing by 4% and 19% respectively. This growth reflects the company’s efficacy in creating and promoting music in various genres and throughout all stages of artists’ development. 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. In this report, we have carried out a fundamental analysis of the historical financial statements of the company. We have added reasonable forecasts of the annualized income statement and cash flows and carried out a DCF valuation of the company using its Weighted Average Cost of Capital (WACC) to determine a forecasted share price. We have further incorporated a sensitivity analysis/ scenario analysis to understand how changes in key assumptions could impact the valuation under 3 scenarios – a base case, a bull case, and a bear case. These additional layers of analysis serve to provide a comprehensive and robust valuation, giving investors a nuanced understanding of the inherent risks and opportunities.

Roblox Corporation: Will Enabling In-World Advertising Catalyze Revenue Growth? – Major Drivers

By Baptista Research

  • Roblox Corporation reported its results of their first quarter 2024 earnings and reported that daily active users (DAUs) hit over 77 million, marking a 17% increase from the same period the year before. Year-on-year growth for users above the age of 13 was particularly impressive, at 22%.
  • Japan, a significant gaming market, reported a growth surge of 50%, while India saw similar success, boasting a growth rate of 58%.
  • There was also positive news relating to revenue, which hit $801 million, marking a 22% year-on-year rise and exceeding the company’s own projected range of $755 million to $780 million. Bookings were $923.8 million, landing firmly within the predicted guidance range of $910 million to $940 million. However, Baszucki highlighted expectations were for a higher figure, sparking some concern. 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. In this report, we have carried out a fundamental analysis of the historical financial statements of the company. We have added reasonable forecasts of the annualized income statement and cash flows and carried out a DCF valuation of the company using its Weighted Average Cost of Capital (WACC) to determine a forecasted share price. We have further incorporated a sensitivity analysis/ scenario analysis to understand how changes in key assumptions could impact the valuation under 3 scenarios – a base case, a bull case, and a bear case. These additional layers of analysis serve to provide a comprehensive and robust valuation, giving investors a nuanced understanding of the inherent risks and opportunities.

Fox Corporation: A Robust Network Portfolio and Targeted Content Strategy! – Major Drivers

By Baptista Research

  • Fox Corporation reported strong Q3 fiscal year 2024 results, demonstrating its ability to distinguish itself from its peers with a 7% EBITDA growth and the steady performance of its brands. However, these results were compared against last year’s Q3 which benefited significantly from the windfall of Super Bowl LVII.
  • Fox’s total affiliate revenue fees showed promising growth, with a 4% increase driven by the benefits of recent renewals. This was evident in both the Television and Cable segments. However, advertising revenues were down due to the absence of the Super Bowl and fewer NFL broadcasts compared to the previous year. If the shortfall from NFL games were disregarded, overall advertising revenues would have increased slightly. 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. In this report, we have carried out a fundamental analysis of the historical financial statements of the company. We have added reasonable forecasts of the annualized income statement and cash flows and carried out a DCF valuation of the company using its Weighted Average Cost of Capital (WACC) to determine a forecasted share price. We have further incorporated a sensitivity analysis/ scenario analysis to understand how changes in key assumptions could impact the valuation under 3 scenarios – a base case, a bull case, and a bear case. These additional layers of analysis serve to provide a comprehensive and robust valuation, giving investors a nuanced understanding of the inherent risks and opportunities.

Duolingo Inc.: Investment in English Learning Content and Use of Generative AI! – Major Drivers

By Baptista Research

  • Duolingo Inc. recently released its Q1 2024 shareholder letter, announcing positive financial results while outlining future initiatives. The company achieved revenue and bookings growth of 45% and 41% respectively and saw active daily users grow by 54% YoY, signaling the effectiveness of their product-driven flywheel. The strategy of offering efficient language tutoring, driving user growth, and converting users to subscribers has proven to be beneficial for the platform. Duolingo also announced record profitability for the quarter. 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. In this report, we have carried out a fundamental analysis of the historical financial statements of the company. We have added reasonable forecasts of the annualized income statement and cash flows and carried out a DCF valuation of the company using its Weighted Average Cost of Capital (WACC) to determine a forecasted share price. We have further incorporated a sensitivity analysis/ scenario analysis to understand how changes in key assumptions could impact the valuation under 3 scenarios – a base case, a bull case, and a bear case. These additional layers of analysis serve to provide a comprehensive and robust valuation, giving investors a nuanced understanding of the inherent risks and opportunities.

Hyatt Hotels Corporation: Favorable China Dynamics

By Baptista Research

  • Hyatt revealed in its Q1 Earnings that the year has started vigourously for them, displaying growth in multiple dimensions and expanding fees. The occupancy and RevPAR trends they have been observing are strong, driven by noteworthy demands across all customer segments. An increase of 5.5% in system-wide RevPAR was seen in Q1 on the back of robust leisure travel trends. While there is expectation of a subdued year-over-year growth rate, the rates are noticeably above pre pandemic levels. They also observed healthy business transient revenue indicating resumption in business travel. Furthermore, Hyatt’s loyalty program saw a growth of 22% over the past year, reaching a total of approximately 46 million members. 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. In this report, we have carried out a fundamental analysis of the historical financial statements of the company. We have added reasonable forecasts of the annualized income statement and cash flows and carried out a DCF valuation of the company using its Weighted Average Cost of Capital (WACC) to determine a forecasted share price. We have further incorporated a sensitivity analysis/ scenario analysis to understand how changes in key assumptions could impact the valuation under 3 scenarios – a base case, a bull case, and a bear case. These additional layers of analysis serve to provide a comprehensive and robust valuation, giving investors a nuanced understanding of the inherent risks and opportunities.

The New York Times: A Story Of Increased Subscriber Engagement and Monetization Opportunities! – Major Drivers

By Baptista Research

  • The New York Times Company (NYT) reported a strong beginning to the year in its Q1 2024 earnings. The company’s strategy – aiming to become the essential subscription for people seeking to understand and engage with the world – is performing well, contributing to its sustained growth in a dynamic media environment. Among key drivers of this growth are the company’s diverse products serving various consumer needs and its deeply engaged subscriber base. Additionally, the high level of subscriber engagement observed reinforces NYT’s belief in its ability to grow the digital-only Average Revenue Per User (ARPU), anticipated to rise on a yearly basis, given multiple pricing and monetization levers. 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. In this report, we have carried out a fundamental analysis of the historical financial statements of the company. We have added reasonable forecasts of the annualized income statement and cash flows and carried out a DCF valuation of the company using its Weighted Average Cost of Capital (WACC) to determine a forecasted share price. We have further incorporated a sensitivity analysis/ scenario analysis to understand how changes in key assumptions could impact the valuation under 3 scenarios – a base case, a bull case, and a bear case. These additional layers of analysis serve to provide a comprehensive and robust valuation, giving investors a nuanced understanding of the inherent risks and opportunities.

CPKF: Initiating our 2025 Estimates

By Zacks Small Cap Research

  • We are slightly decreasing our diluted EPS estimate for 2024 by a penny, from $2.20 to $2.19, a 2% gain from 2023’s actual diluted EPS of $2.15.
  • Our initial estimate for 2025 is $2.35 per diluted share, representing a 7% gain over our 2024 estimate.
  • We expect moderate gains in net interest income in 2024 and 2025 as solid loan growth, estimated at 8% in 2024 and 8% in 2025, will be partly offset by a lower net interest margin.

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May 25
0

Daily Brief Japan: Sumitomo Mitsui Financial Group and more

By | Daily Briefs, Japan

In today’s briefing:

  • Japanese Bigger-Cap Banks – Rates Story Continues, with the Prospect of Equity Holdings Disposals

Japanese Bigger-Cap Banks – Rates Story Continues, with the Prospect of Equity Holdings Disposals

By Victor Galliano

  • The continued “higher for longer” interest rates in the US, along with widening JGB yields adds weight to the Bank of Japan potentially raising benchmark rates further
  • In this report, we expand our coverage of the bigger cap banks’ metrics to include the equity holdings of the top six market caps and the banks’ BoJ deposits
  • We see further upside for Japanese bank shares, especially those geared into higher domestic rates and with the potential for equity holdings disposals; we like Resona, Mizuho, SMFG and Concordia

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