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Daily Briefs

Daily Brief Health Care: Asahi Intecc, Henry Schein, Shulan Health Management, Immix Biopharma Inc, IN8bio , Tenax Therapeutics , Waters Corp, BB Biotech AG, Bio-Rad Laboratories A and more

By | Daily Briefs, Healthcare

In today’s briefing:

  • 2024 High Conviction Update: Asahi Intecc (7747 JP)- Q3FY24 Margins Take Hit; Tepid Q4 Expected
  • Henry Schein Inc.: A Tale Of An Improving Market Position with New Products – Major Drivers
  • Shulan Health Management Pre-IPO – Still Ramping up but Only a Small Player
  • Immix Biopharma – All roads lead to NEXICART-2
  • INAB: 1Q:24 Results
  • TENX: First Quarter Results
  • Waters Corporation: Is It Really Seeing Improving Traction of New Products? – Major Drivers
  • BB Biotech – A recovering sector with a healthy prognosis
  • Bio-Rad Laboratories Inc.: Exciting New Product Launches Can Propel Their Revenue Growth? – Major Drivers


2024 High Conviction Update: Asahi Intecc (7747 JP)- Q3FY24 Margins Take Hit; Tepid Q4 Expected

By Tina Banerjee

  • In Q3FY24, Asahi Intecc (7747 JP) reported 8% YoY increase in revenue to ¥26B, ahead of estimate of ¥24B, mainly driven by the exchange rate impact of higher foreign currencies.
  • Higher SG&A expenses impacted the profitability. Q3FY24 operating profit margin declined to 23.3% from 26.6% in Q3FY23, while net profit margin decreased to 16.0% from 18.5% during the same time.
  • In Q4FY24, revenue is expected to decline 3% YoY to ¥19.6B. Operating and net profits are anticipated to plunge 74% and 26%, YoY to ¥417M and ¥832M, respectively.

Henry Schein Inc.: A Tale Of An Improving Market Position with New Products – Major Drivers

By Baptista Research

  • Henry Schein Inc, the leading global healthcare solutions provider, recently reported its results for the first quarter of 2024.
  • The company reported solid earnings driven by gross profit and gross margin expansion as it recovers from last quarter’s cyber-incident.
  • It’s worth noting that even with the cyber incident, Henry Schein marked an improvement in its merchandise sales growth.

Shulan Health Management Pre-IPO – Still Ramping up but Only a Small Player

By Ethan Aw

  • Shulan Health Management (1807987D CH)  is looking to raise around US$150m in its Hong Kong IPO. 
  • Shulan Health Management (SHM) is a technology-driven healthcare group in China that integrates healthcare services and medical research and education.
  • In this note, we talk about the firm’s historical performance.

Immix Biopharma – All roads lead to NEXICART-2

By Edison Investment Research

Immix Biopharma’s Q124 report reflected a period focused on its lead CAR-T asset, NXC-201, targeting amyloid light chain amyloidosis (ALA), which was recently bolstered by incremental NEXICART-1 data. The quarter saw a pick-up in preparatory activities in advance of the US NEXICART-2 trial initiation with the finalization of a manufacturing facility in California and selection of the lead clinical trial site. We await the first-patient dosing, expected in mid-2024. We also expect an update on the addition of the autoimmune indication for NXC-201 by year end. The Q1 operating loss of $5.6m was in line with our expectations, and Immix anticipates it will maintain a cash runway through Q225 ($29.3m cash at hand at end-Q124). Our valuation adjusts to $139.5m or $5.3/share, slightly changed from $142.2m or $5.4/share, previously, with the roll forward of our model and quarterly update.


INAB: 1Q:24 Results

By Zacks Small Cap Research

  • IN8Bio is a clinical-stage, oncology-focused biotechnology company using ?d T cells against solid and hematological tumors.
  • Its pipeline is built on the DeltEx platform & drug resistant immunotherapy (DRI) technology which have produced clinical candidates targeting leukemia & GBM. INB-100 is evaluating leukemia in a Ph1 study, while INB-200 & INB-400 are Ph1 and Ph2 assets evaluating GBM. INB-100 is an allogeneic DeltEx-produced cell therapy for leukemia patients undergoing HSCT transplant.
  • Leukemia patients see a high rate of recurrence which may be effectively treated by INB-100.

TENX: First Quarter Results

By Zacks Small Cap Research

  • Tenax has licensed the calcium sensitizer/K-ATP activator levosimendan and is pursuing approval for an indication in Group 2 Pulmonary Hypertension in the US and Canada.
  • The drug has been approved in over 60 countries with 35 published trials supporting its safety and efficacy and has over 1 million patient exposures.
  • In January 2018 Tenax announced a new indication for Levo and met with the FDA to confirm trial design.

Waters Corporation: Is It Really Seeing Improving Traction of New Products? – Major Drivers

By Baptista Research

  • Based on Waters Corporation’s earnings, the company demonstrated strong operational performance in Q1, although the market conditions were as expected with cautious customer spending and late budget releases.
  • Sales landed at the high end of the guidance but declined 7% as reported and 9% in organic constant currency.
  • It had a strong start to 2024, with sales coming in at the high end of expectations, reflecting the firm’s drive to accelerated the benefits of their science with their innovative portfolio.

BB Biotech – A recovering sector with a healthy prognosis

By Edison Investment Research

BB Biotech (BION) offers investors exposure to the innovative, rapidly expanding biotech sector. It is the largest biotech investor among its investment company peers, focused on high-quality biotech assets that target substantial market opportunities. BION’s performance has picked up in recent months, supported by an improvement in the market environment. Its managers are optimistic about the outlook as declines in interest rates, whenever they eventuate, begin to boost investor sentiment towards the sector, especially the mid- and small-cap companies that BION favours. The fund’s managers also expect ongoing progress by portfolio holdings, as several reach key milestones over the coming months. Unlike most of its peers, BION pays an attractive 5% dividend, calculated on average share price over December each year.


Bio-Rad Laboratories Inc.: Exciting New Product Launches Can Propel Their Revenue Growth? – Major Drivers

By Baptista Research

  • Bio-Rad Laboratories, a multinational firm delivering scientific research products and clinical diagnostics, reported its first-quarter 2024 financial results performing as per their internal estimates.
  • The primary factor for their performance fluctuations was the macroeconomic and market trends due to the biotech and biopharma segments in countries such as China and Russia.
  • The company observed a decline in the Life Science Group, albeit in line with their expectations.

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Daily Brief Consumer: Kfc Holdings Japan, L’Occitane, Li Auto , Star Entertainment Group, Mandarin Oriental International, Shakey’s Pizza, Wynn Resorts, China Resources Beverage, Crocs Inc and more

By | Consumer, Daily Briefs

In today’s briefing:

  • Carlyle To Take KFC Japan (9873) Private at ¥6,500/Share – Big Win For All, a Model Transaction
  • L’Occitane (973 HK): Who Owns What, And When
  • KFC Holdings Japan (9873 JP): Carlyle Finger Lickin’ Tender Offer at JPY6,500
  • Li Auto (LI US): 1Q24, A List of Bad News
  • Star Entertainment (SGR AU): Hard Rock Rolls The Dice
  • Mandarin Oriental: Don’t Lose Money
  • Shakey’s Pizza (PIZZA PM) Q1 FY24 Concall: Margin Recovery in H2 FY24
  • Wynn Resorts: Macau Operations
  • Pre-IPO China Resources Beverage – Here Are the Concerns and the Risks Behind
  • Crocs Inc.: Global Expansion and Revenue Growth through New Store Openings! – Major Drivers


Carlyle To Take KFC Japan (9873) Private at ¥6,500/Share – Big Win For All, a Model Transaction

By Travis Lundy

  • Carlyle has a deal to buy Kfc Holdings Japan (9873 JP). ¥6,500/share is a 78% premium to undisturbed as a professional holder sells in an auction to the highest bidder.
  • That’s a great format for achieving a great price. And we got one. This should get done easily.
  • Importantly, the Bidco is named Crispy KK. It is 100% owned by Juicy KK. Juicy KK itself is 100% owned by Crispy Holdings L.P. Someone had some fun.

L’Occitane (973 HK): Who Owns What, And When

By David Blennerhassett

  • A fortnight ago, I sought access to L’Occitane (973 HK)‘s lesser-known shareholder register, a byproduct of investigative disclosure reports under Chapter 571, s329 of the Securities and Futures Ordinance.
  • This is the same register I discussed in Giordano (709 HK): A Closer Look At The Shareholder Register Ahead Of The SGM; and one also used by proxy solicitors. 
  • The register confirms what has been long rumoured about a certain shareholder activist. It is also informative for what isn’t present. 

KFC Holdings Japan (9873 JP): Carlyle Finger Lickin’ Tender Offer at JPY6,500

By Arun George

  • Kfc Holdings Japan (9873 JP) has recommended a tender offer from Carlyle Group / (CG US) at JPY6,500 per share, a 20.4% premium to the last close. 
  • The transaction is a two-step acquisition through a cash tender offer and subsequent squeeze-out. The lower limit of the tender offer is set at a 31.54% ownership ratio.
  • Due to the Mitsubishi Corp (8058 JP) irrevocable, the minimum acceptance condition requires a 48.6% minority acceptance rate. The acceptance condition is achievable as the offer is a knockout bid. 

Li Auto (LI US): 1Q24, A List of Bad News

By Ming Lu

  • Operating profit turned negative in 1Q24 compared to 1Q23 due to the price war and the failure of new model.
  • The company disappeared from the industry top-10 list of sales volume and revenue growth slowed down to zero in April.
  • All cross-sectional comparisons suggest a Sell rating for the stock.

Star Entertainment (SGR AU): Hard Rock Rolls The Dice

By David Blennerhassett

  • Troubled casino operator Star Entertainment (SGR AU) announced it had “received inbound interest” from several parties, including “Hard Rock Hotels & Resorts … a local partner of Hard Rock”.
  • Star is in the doghouse, again,  as the regulator conducts (another) review amid concerns Star did not do enough to remedy the problems identified in the first review. 
  • Facing “serious and systemic non-compliance” with anti-money laundering laws, Star faces the distinct possibility of losing is casino licence in Sydney; and potentially the one in Queensland.  

Mandarin Oriental: Don’t Lose Money

By Superfluous Value

  • Mandarin owns the One Causeway Bay precinct which is likely worth more than the company’s current Enterprise Value ($2.4b) having recieved an offer of $3.8b for the site in 2017.

  • For those unfamiliar, this site is being massively re-developed into retail and office- not a hotel as might be expected given the company.

  • Mandarin is transitioning to a capital light hotel management model by selling its owned hotels and maintaining management contracts with the purchasers.


Shakey’s Pizza (PIZZA PM) Q1 FY24 Concall: Margin Recovery in H2 FY24

By Sameer Taneja

  • Shakey’s Pizza (PIZZA PM) reported Q1 FY24 systemwide sales up 15% YoY, but profits down by 15% YoY due to margin compression owing to higher opex costs.
  • Management stuck to its mid-teens YoY revenue/profit growth guidance, citing that margin expansion will happen in the latter half of the year due to its visibility on costs.
  • Trading at 13x FY24e PE, with a long runway for growth owing to the success in expanding Potato Corner, we believe the company can be a multi-bagger.

Wynn Resorts: Macau Operations

By Baptista Research

  • The first quarter of 2024 marked a period of continued momentum for Wynn Resorts.
  • The company’s earnings call transcript highlighted several significant developments, representing positive and negative factors that could be relevant for potential investors.
  • Starting on the bright side, Wynn Resorts reported an all-time record property EBITDAR of $647 million during Q1 2024, owing to the company’s solid team delivering five-star service and unique experiences to their guests.

Pre-IPO China Resources Beverage – Here Are the Concerns and the Risks Behind

By Xinyao (Criss) Wang

  • Over 92% of CR Beverage’s revenue is from packaged drinking water products, but YoY growth this business is already below industry CAGR, raising concerns about whether future growth will stall.
  • The revenue scale/profitability of CR Beverage are far inferior to Nongfu Spring. In terms of cost control, operational efficiency and the strength of supply chain, CR Beverage is lagging behind.
  • For low-priced packaging water, the nationwide expansion is not a simple task, which will lead to significant cash outflow. Valuation of CR Beverage should be lower than that of peers. 

Crocs Inc.: Global Expansion and Revenue Growth through New Store Openings! – Major Drivers

By Baptista Research

  • Crocs, Inc. reported strong first quarter results that exceeded guidance both on revenue and net profit.
  • Revenue rose by 7% compared to the prior year, driven by a 16% increase in Crocs brand sales.
  • Adjusted gross margins improved 180 basis points to 56%, and adjusted earnings per share grew 16% to $3.02.

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Most Read: Renesas Electronics, Korea Stock Exchange KOSPI 200, Kfc Holdings Japan, L’Occitane, Mitsui Matsushima, EcoPro Materials, Shift Up and more

By | Daily Briefs, Most Read

In today’s briefing:

  • Renesas (6723) – Denso Selldown Starts; Fourth Large Renesas Block in 6mos (Two More To Come)
  • FSS Head’s Aggressive Remarks for Value-Up at NY Event, Incl. Short Selling Resumption Late June
  • Merger Arb Mondays (20 May) – L’Occitane, China TCM, SciClone, Malaysia Airports, I’rom, Hollysys
  • Carlyle To Take KFC Japan (9873) Private at ¥6,500/Share – Big Win For All, a Model Transaction
  • L’Occitane (973 HK): Who Owns What, And When
  • Renesas Block  – While Not Particularly Well Flagged, Recent Selldowns in the Stock Have Done Well
  • JAPAN ACTIVISM: Murakami-Related Buyers Go from 5% to 20% of Mitsui Matsushima (1518) In 5 Days. Hmm
  • Block Deal Sales of 200 Billion Won Worth of Ecopro Materials by BRV Capital
  • KFC Holdings Japan (9873 JP): Carlyle Finger Lickin’ Tender Offer at JPY6,500
  • Shift Up IPO Preview


Renesas (6723) – Denso Selldown Starts; Fourth Large Renesas Block in 6mos (Two More To Come)

By Travis Lundy

  • Today post-close, Denso Corp (6902 JP) (via BofA) announced a selldown of 78,127,800 shares of Renesas Electronics (6723 JP). This is the latest in a line of block exits.  
  • There was the 130mm offering in November last year by INCJ. There was 123mm shares in Jan 2024 by NEC and Hitachi. A month later, 50mm shares from Mitsubishi Electric.
  • In general, they have been absorbed, but one hasn’t needed to buy in the market. Some have broken price. Here, the pricing range is aggressive.

FSS Head’s Aggressive Remarks for Value-Up at NY Event, Incl. Short Selling Resumption Late June

By Sanghyun Park

  • Lee Bok-hyun hopes for short selling to resume by late June. Given his influence on the Value-up policy, it’s likely to happen.
  • Lee expects key tax incentives for the value-up program to be included in the July tax reform bill, showing a market-friendly stance.
  • Yesterday’s New York event had a very positive atmosphere with more attendees than expected, showing genuine investor interest, likely ensuring sustained interest in Korea’s Value-up program.


Carlyle To Take KFC Japan (9873) Private at ¥6,500/Share – Big Win For All, a Model Transaction

By Travis Lundy

  • Carlyle has a deal to buy Kfc Holdings Japan (9873 JP). ¥6,500/share is a 78% premium to undisturbed as a professional holder sells in an auction to the highest bidder.
  • That’s a great format for achieving a great price. And we got one. This should get done easily.
  • Importantly, the Bidco is named Crispy KK. It is 100% owned by Juicy KK. Juicy KK itself is 100% owned by Crispy Holdings L.P. Someone had some fun.

L’Occitane (973 HK): Who Owns What, And When

By David Blennerhassett

  • A fortnight ago, I sought access to L’Occitane (973 HK)‘s lesser-known shareholder register, a byproduct of investigative disclosure reports under Chapter 571, s329 of the Securities and Futures Ordinance.
  • This is the same register I discussed in Giordano (709 HK): A Closer Look At The Shareholder Register Ahead Of The SGM; and one also used by proxy solicitors. 
  • The register confirms what has been long rumoured about a certain shareholder activist. It is also informative for what isn’t present. 

Renesas Block  – While Not Particularly Well Flagged, Recent Selldowns in the Stock Have Done Well

By Clarence Chu

  • Denso Corp (6902 JP) is looking to raise US$1.39bn from selling a portion of its stake in Renesas Electronics (6723 JP).
  • DENSO’s selldown is a small one at just 4.3 days of ADV. While there is an overhang of around 4% of TSO, DENSO will be locked up for 270 days.
  • In this note, we will talk about the placement and run the deal through our ECM framework.

JAPAN ACTIVISM: Murakami-Related Buyers Go from 5% to 20% of Mitsui Matsushima (1518) In 5 Days. Hmm

By Travis Lundy

  • Mitsui Matsushima (1518 JP) was a coal company starting over 100yrs ago. A bunch of years ago it started a solar energy business and then started M&A to diversify.
  • Coal closed last year and since, MMH has become an investment holdco for “basic businesses” (drinking straws, conveyor system chains, document shredders, weighing machines, crystal measuring devices, mask blanks, etc).
  • Murakami Group accumulated 4.98% in five weeks, then the next 14.9% in five days. Pump & Dump like Pacific Metals? Activism like JAFCO? Or something else more interesting?

Block Deal Sales of 200 Billion Won Worth of Ecopro Materials by BRV Capital

By Douglas Kim

  • After the market close on 20 May, it was reported that Blue Run Ventures (BRV) sold 204.1 billion won (US$150 million) worth of EcoPro Materials in a block deal sale. 
  • The block deal sale price was 93,000 won, a 9.7% discount to the closing price on 20 May (103,000 won).
  • This block deal sale at a big discount is likely to raise overhang concerns about further block deal sales by BRV Capital in the coming years. 

KFC Holdings Japan (9873 JP): Carlyle Finger Lickin’ Tender Offer at JPY6,500

By Arun George

  • Kfc Holdings Japan (9873 JP) has recommended a tender offer from Carlyle Group / (CG US) at JPY6,500 per share, a 20.4% premium to the last close. 
  • The transaction is a two-step acquisition through a cash tender offer and subsequent squeeze-out. The lower limit of the tender offer is set at a 31.54% ownership ratio.
  • Due to the Mitsubishi Corp (8058 JP) irrevocable, the minimum acceptance condition requires a 48.6% minority acceptance rate. The acceptance condition is achievable as the offer is a knockout bid. 

Shift Up IPO Preview

By Douglas Kim

  • Shift Up (462870 KS) is getting ready to complete its IPO in KOSPI in June 2024. Established in 2013, Shift Up is one of the leading game developers in Korea.
  • The IPO price range is 47,000 won to 60,000 won. The IPO offering amount is 340.8 billion won to 435 billion won.
  • According to the bankers’ valuation, the market capitalization range of the company ranges from 2.73 trillion won to 3.4 trillion won. This is the second largest IPO in Korea YTD.

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Daily Brief Quantitative Analysis: TWSE Foreign Holding Weekly (May 17th): TSMC and more

By | Daily Briefs, Quantitative Analysis

In today’s briefing:

  • TWSE Foreign Holding Weekly (May 17th): TSMC, Yang Ming Marine, Quanta Computer, Mediatek
  • KRX Foreign Holding Weekly (May 17th): Sk Hynix, Samsung Electronics
  • TWSE Short Interest Weekly (May 17th): Hon Hai, Wiwynn, Quanta Computer, Asia Vital, Unimicron Tech


TWSE Foreign Holding Weekly (May 17th): TSMC, Yang Ming Marine, Quanta Computer, Mediatek

By Ke Yan, CFA, FRM

  • We analyzed the changes in foreign holdings of TWSE Stocks as of May 17th which has an aggregated holding worth USD4,271.1bn.
  • We estimate that foreign flows to be inflows of USD16,618mln. We tabulate the league table for top changes by value for 1W/4W/1Y and top stocks held by foreign institutions.
  • We highlight foreign changes in TSMC, Yang Ming Marine, Quanta Computer, Mediatek, Evergreen Marine, Inventec, Alchip Tech, Wistron, Delta Elec, Ctbc Financial.

KRX Foreign Holding Weekly (May 17th): Sk Hynix, Samsung Electronics

By Ke Yan, CFA, FRM

  • We analyzed the changes in foreign holdings of KRX Stocks as of May 17th which has an aggregated holding worth USD545.3bn.
  • We estimate that foreign flows to be inflows of USD720mln. We tabulate the league table for top changes by value for 1W/4W/1Y and top stocks held by foreign institutions.
  • We highlight foreign changes in Sk Hynix (000660 KS),  Samsung Electronics (005930 KS).

TWSE Short Interest Weekly (May 17th): Hon Hai, Wiwynn, Quanta Computer, Asia Vital, Unimicron Tech

By Ke Yan, CFA, FRM

  • We analyzed the changes in short interest of TWSE Stocks as of May 17th which has an aggregated short interest worth USD98.9bn.
  • 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 Hon Hai, Wiwynn, Quanta Computer, Asia Vital, Unimicron Tech, Shihlin Elec&Eng, Ap Memory Tech, Yang Ming Marine, China Airlines.

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Daily Brief ESG: A Market with Small Value Stocks and Investment Opportunities Due to Delisting and more

By | Daily Briefs, ESG

In today’s briefing:

  • A Market with Small Value Stocks and Investment Opportunities Due to Delisting, Although Taking Time


A Market with Small Value Stocks and Investment Opportunities Due to Delisting, Although Taking Time

By Aki Matsumoto

  • Excluding the special factor of companies applying transitional measures moving to standard, the pace of natural decrease of prime market listed companies is moderate.
  • Companies with high foreign shareholdings and large market capitalization are already highly valued. Companies that are not have investment opportunities that are often at a discount due to liquidity.
  • Nearly half of the companies are companies with large shareholders holding more than 20% equity; investment opportunities are expected to increase as companies go private through TOBs and MBOs.

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Daily Brief Thematic (Sector/Industry): Japan Weekly | Dow Jones Hits 40 and more

By | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

  • Japan Weekly | Dow Jones Hits 40,000 Amidst Rate Cut Expectations
  • China Railway Stocks Back on Track
  • GEMWeekly (17 May 2024): China, India, Malaysia Macro; NetEase, Kakao, Prosus, Naspers


Japan Weekly | Dow Jones Hits 40,000 Amidst Rate Cut Expectations

By Mark Chadwick

  • Friday marked a historic milestone as the Dow soared past the 40,000 mark for the first time, buoyed by promising data that supported expectations of Fed interest rate cuts
  • Nvidia’s financial results announcement on the 22nd is the key event to watch in the coming week
  • Shares in Isetan Mitsukoshi rose by over 20% after reporting FY23 operating profit up 83.6% to ¥54.3bn, driven by strong department store sales and cost reforms.

China Railway Stocks Back on Track

By David Mudd

  • China has unveiled measures to emphasize a major push for passenger and freight movement by railroad
  • Rolling stock companies  play catch-up from the COVID under-investment years
  • High speed freight trains on near term horizon to compete with highway for e-commerce business

GEMWeekly (17 May 2024): China, India, Malaysia Macro; NetEase, Kakao, Prosus, Naspers

By Wium Malan, CFA

  • The Global Emerging Markets Weekly summarizes the key news and related developments impacting the largest countries and constituents of the Global Emerging Markets equity indices.
  • Macro data points: Chinese loan growth, inflation, and economic activity data. Indian inflation. Malaysian GDP growth.
  • Companies mentioned:NetEase (9999 HK), Kakao Corp (035720 KS), Prosus NV (PRX NA), Naspers (NPN SJ)

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Daily Brief Credit: Morning Views Asia: Hopson Development and more

By | Credit, Daily Briefs

In today’s briefing:

  • Morning Views Asia: Hopson Development, Vedanta Resources


Morning Views Asia: Hopson Development, Vedanta Resources

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.


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Daily Brief ECM: Lalatech Holdings: FCF Growth Accelerated and more

By | Daily Briefs, ECM

In today’s briefing:

  • Lalatech Holdings: FCF Growth Accelerated, Margins Improved, Fair Value May Be North of $10B
  • Giant Biogene (2367.HK) Placement – A Turning Point in Performance Growth Has Emerged
  • ECM Weekly (20th May 2024) -Lalatech, Go Digit, Aadhar, TBO Tek, Ecopro, Nexus, Modec, Hyundai Heavy


Lalatech Holdings: FCF Growth Accelerated, Margins Improved, Fair Value May Be North of $10B

By Andrei Zakharov

  • Lalatech Holdings, a technology based global logistics company, has updated its application for Hong Kong IPO and disclosed financial results for 2023.
  • Lalatech Holdings is aiming to raise up to $1B and the company’s IPO looks imminent in the coming months as cash flow growth accelerated, while margins and profitability improved. 
  • My fair valuation of Lalatech Holdings is close to $10B and investors should buy into upcoming IPO given the company’s substantial scale, massive network effects and operating efficiency.

Giant Biogene (2367.HK) Placement – A Turning Point in Performance Growth Has Emerged

By Xinyao (Criss) Wang

  • Despite high growth in 2023, the accelerated growth of Giant Biogene has entered a turning point, and its performance has begun to slow down. Long-term growth momentum is highly uncertain. 
  • Giant Biogene plans to prioritize the market entry of Class III medical device products.Due to increasing competition/challenges in marketing/promotion, it takes time to verify if the second growth curve works. 
  • Reasonable valuation for Giant Biogene is P/E of 20-30x.If based on RMB1.8 billion 2024, market value is RMB36-54 billion. Short-term catalyst is the Online 618 Shopping Festival and 24H1 report.  

ECM Weekly (20th May 2024) -Lalatech, Go Digit, Aadhar, TBO Tek, Ecopro, Nexus, Modec, Hyundai Heavy

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, Indian IPOs continued to do well, we also looked at two upcoming deals in Hong Kong.
  • On the placement front, last week ended up being one of the busiest ones so far this year with five deals live just on Thursday night alone. 

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Daily Brief Event-Driven: FSS Head’s Aggressive Remarks for Value-Up at NY Event and more

By | Daily Briefs, Event-Driven

In today’s briefing:

  • FSS Head’s Aggressive Remarks for Value-Up at NY Event, Incl. Short Selling Resumption Late June
  • HK Connect SOUTHBOUND Flows (To 17 May 2024); Banks, Banks, Banks, Tencent, and Big SOEs
  • Merger Arb Mondays (20 May) – L’Occitane, China TCM, SciClone, Malaysia Airports, I’rom, Hollysys
  • Hang Seng Index (HSI) Rebalance: BYD Electronics Added; Country Garden Services Deleted
  • HSCEI Index Rebalance: Zijin Mining In; Xinyi Solar Out; SenseTime Survives (For Now)
  • HSTECH Index Rebalance: Float & Capping Changes Result in 8% Turnover & US$2.5bn Round-Trip Trade
  • A/H Premium Tracker (To 17 May 2024):  Hs Rally Huge Vs As, Again. Avg A/H Premium Lowest in 4yrs
  • Weekly Deals Digest (19 May) – ESR Group, L’Occitane, CPMC, Malaysia Airports, I’Rom, Modec
  • EQD / NSE Volatility Update / 13-May-24 to 17-May-24
  • Mainland Connect NORTHBOUND Flows (To 17 May 2024):


FSS Head’s Aggressive Remarks for Value-Up at NY Event, Incl. Short Selling Resumption Late June

By Sanghyun Park

  • Lee Bok-hyun hopes for short selling to resume by late June. Given his influence on the Value-up policy, it’s likely to happen.
  • Lee expects key tax incentives for the value-up program to be included in the July tax reform bill, showing a market-friendly stance.
  • Yesterday’s New York event had a very positive atmosphere with more attendees than expected, showing genuine investor interest, likely ensuring sustained interest in Korea’s Value-up program.

HK Connect SOUTHBOUND Flows (To 17 May 2024); Banks, Banks, Banks, Tencent, and Big SOEs

By Travis Lundy

  • 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.


Hang Seng Index (HSI) Rebalance: BYD Electronics Added; Country Garden Services Deleted

By Brian Freitas


HSCEI Index Rebalance: Zijin Mining In; Xinyi Solar Out; SenseTime Survives (For Now)

By Brian Freitas


HSTECH Index Rebalance: Float & Capping Changes Result in 8% Turnover & US$2.5bn Round-Trip Trade

By Brian Freitas

  • As expected, there are no constituent changes for the Hang Seng TECH Index (HSTECH INDEX) in June. However, there are float and capping changes.
  • Estimated one-way turnover is 8% leading to a round-trip trade of HK$19.2bn (US$2.46bn). There is over 3x ADV to buy in Li Auto (2015 HK)
  • Short interest is quite elevated on a lot of stocks both in terms of days of ADV and in terms of free float.

A/H Premium Tracker (To 17 May 2024):  Hs Rally Huge Vs As, Again. Avg A/H Premium Lowest in 4yrs

By Travis Lundy

  • 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 was interrupted again this past week, but they still net bought, as did NORTHBOUND. HK stocks continued their rise with liquid Hs outperforming their As by 3.8%. 
  • There were some BIG moves the past two weeks and Average AH Premia are now the lowest in nearly four years vs near 5yr wides less than 12 weeks ago. 

Weekly Deals Digest (19 May) – ESR Group, L’Occitane, CPMC, Malaysia Airports, I’Rom, Modec

By Arun George


EQD / NSE Volatility Update / 13-May-24 to 17-May-24

By Sankalp Singh

  • Curtail Short Gamma & Short Vega exposure as Vol-regime has switched to “High & Up” state.  
  • Short-Dated IVs traded markedly lower, driven by recovering equities & the 20-May market holiday
  • Nifty50 vol curve is exhibiting unusual kinked shape. Monthly IVs are commanding a large vol markup relative to rest of the curve. 

Mainland Connect NORTHBOUND Flows (To 17 May 2024):

By Travis Lundy

  • 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 8.8bn of A-shares on lower gross volumes. NORTHBOUND bought Luxshare, CMB, and CATL. AH Premia now lowest in 4yrs.
  • Foreign attitudes to HK stocks different than to mainland stocks. This may continue.

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Daily Brief Equity Bottom-Up: TSMC (2330.TT; TSM.US): A16 Technology Continues to Evolve in 1H27. and more

By | Daily Briefs, Equity Bottom-Up

In today’s briefing:

  • TSMC (2330.TT; TSM.US): A16 Technology Continues to Evolve in 1H27.
  • Pinduoduo(PDD US): Growth Stock Priced as Value Play
  • BYD Electronic (285 HK): Will HSI Inclusion Be a Kiss of Death?
  • Taiwan Dual-Listings Monitor: TSMC Spread Trading at New High Range, CHT Spread at Short Levels
  • China Consumption (20 May 2024): Leapmotor, Stellantis, GAC, Honda, Li Auto, ZTO, Tencent Music
  • China Healthcare Weekly (May.19)- Decoupling Deadline with WuXi,Biotech Classification,Deals Cooling
  • Hamamatsu Photonics (6965 JP): Look Cautiously to the Long Term
  • Arista Networks: Artificial Intelligence (AI) Networking
  • Bangkok Dusit Medical Services (BDMS TB): Thai and International Patients Drives 1Q24 Result
  • The Hershey Company: How Are The Latest North America Confectionery Market Developments Impacting Them? – Major Drivers


TSMC (2330.TT; TSM.US): A16 Technology Continues to Evolve in 1H27.

By Patrick Liao

  • After Taiwan Semiconductor (TSMC) – ADR (TSM US) N2 technology in 2H25F, A16 technology will be pilot-production in 2H26 and likely unveiled in around 1H27.
  • TSMC A16 technology will be utilizing best-in-class backside power delivery solution.
  • Si Photonics co-exists with traditional Substrates packages, linked with fiber.

Pinduoduo(PDD US): Growth Stock Priced as Value Play

By Eric Chen

  • We are more bullish on PDD’s 1Q24 results on the back of better monetization of domestic e-commerce business and fast and quality growth of TEMU.
  • We now expect 1Q24 adjusted earnings to almost double yoy to RMB20 billion, much higher than our previous estimate of 50% yoy growth and exceeding consensus by ~30%.
  • Moreover, we believe earnings growth will be steady throughout 2024 instead of slowing down as we thought. 10x FY24 earnings against 80% yoy growth lead us to see 50%+ upside.

BYD Electronic (285 HK): Will HSI Inclusion Be a Kiss of Death?

By Osbert Tang, CFA

  • While historically many new inclusions to the HSI have performed disappointingly after their addition, BYD Electronic (285 HK) looks unlikely to follow such a pattern.  
  • Its share price has underperformed YTD, absolute PER valuations are not stretched and forward P/B multiple is only at the historical average level. These provide a good buffer.
  • Its industry and business are not at structural and cyclical peaks, with further growth prospects from AI-enhanced products and solutions. A 33% surge in 1Q24 earnings also adds comfort.

Taiwan Dual-Listings Monitor: TSMC Spread Trading at New High Range, CHT Spread at Short Levels

By Vincent Fernando, CFA

  • TSMC: +17% Premium; Has Remained Above 15% for Over Nearly Two Weeks
  • ASE: +11.8% Premium; We Continue to View 14%+ as Range to Short From
  • CHT: +0.6% Premium; Can Consider Shorting the Spread at Current Level

China Consumption (20 May 2024): Leapmotor, Stellantis, GAC, Honda, Li Auto, ZTO, Tencent Music

By Ming Lu

  • Stellantis invested in Leapmotor and their joint venture will sell electric cars in Europe.
  • Two vehicle producers, GAC and Li Auto, are dismissing employees.
  • Tencent Music’s music revenue grew by 43% YoY in 1Q24.

China Healthcare Weekly (May.19)- Decoupling Deadline with WuXi,Biotech Classification,Deals Cooling

By Xinyao (Criss) Wang

  • In 24Q1, the innovative drug projects and medical device projects ranked top two in domestic investment and financing deals, but investment in the field of AI cooled down.
  • For biotech that located in China and only for China markets, it’s hard for them to generate good returns. It is recommended not to spend too much time on them.
  • As the US House Committee advances the BIOSECURE Act to restrict WuXi AppTec/WuXi Bio last week, we listed some points worth the attention at this stage.This is far from over.

Hamamatsu Photonics (6965 JP): Look Cautiously to the Long Term

By Scott Foster

  • The company has slashed FY Sep-24 guidance after missing 1H sales and profit targets by wide margins. Dividend maintained, 2-for-1 split planned and buyback under consideration.
  • Capex has been cut, reflecting lower growth expectations. R&D also. Inventory adjustments will eventually be completed, but Chinese competiton will remain a problem.
  • The share price has dropped 30% in the past year and 10.5% since May 8, putting the shares on 27 times EPS guidance. Still not cheap, but getting there.

Arista Networks: Artificial Intelligence (AI) Networking

By Baptista Research

  • Arista Networks is well-positioned to take advantage of the rapidly growing opportunities in the artificial intelligence (AI) and cloud computing landscape.
  • For the first quarter of 2024, the company reported revenue of $1.57 billion, representing a 16.3% year-over-year growth.
  • Contributing a substantial 16.9% of this revenue was services and software support renewals.

Bangkok Dusit Medical Services (BDMS TB): Thai and International Patients Drives 1Q24 Result

By Tina Banerjee

  • Bangkok Dusit Medical Services (BDMS TB) posted double-digit growth revenue, EBITDA, and net profit in 1Q24. International and Thai patients reported revenue growth of 12% and 10%, YoY, respectively.
  • EBITDA grew at a faster pace of 13% YoY to THB6.8B, due to tight cost control. Net profit of THB4.1B beat estimates.
  • BDMS opened one secondary care hospital with 113 registered beds in March. Phuket Cancer Center is expected to start operation in 3Q24.

The Hershey Company: How Are The Latest North America Confectionery Market Developments Impacting Them? – Major Drivers

By Baptista Research

  • The Hershey Company reported optimistic market share trends in their Q1 2024 earnings.
  • The firm has seen strong performances especially in seasonal sales and takeaway, with innovation being a significant growth driver.
  • Its Reese’s Caramel product was quite popular among customers, with it not only being well received, but also helping drive strong merchandising especially around the Super Bowl season.

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