Daily Briefs

China Traditional Chinese Medicine (570 HK) (TCM) has been a frustrating deal, for a deal that shouldn’t be frustrating.
As feared from its 16th October monthly update, the inability to secure investor group consents appears to have torpedoed the transaction. Will we eventually find out why this got stonewalled?
This deal lapse changes the Hong Kong M&A landscape; if you can’t rely on SOE transactions to get up, what next? The immediate question now is downside support on Monday.

Horizon Robotics (9660 HK) IPO: The Bear Case

Horizon Robotics (9660 HK), a provider of autonomous driving products and services, is seeking to raise up to US$696 million through a HKEx IPO.
In Horizon Robotics (9660 HK) IPO: The Bull Case, we highlighted the key elements of the bull case. In this note, we outline the bear case.
The bear case rests on high related parties’ revenue, customer concentration risk, pricing pressure, uncertain path to profitability, high cash conversion cycle and FCF burn.

A/H Premium Tracker (To 18 Oct 2024): AH Premia Drop Sharply; High Premia May Contract More

Huge volumes traded on the mainland, Southbound volumes dropped, AH Premia contracted a little bit, but not much. Things are starting to stabilise.
Average AH pairwise volatility is super high. Intracorrelation of spreads quite low. Lots of room to market-make wide spreads/high premia. High premia may continue to contract on speculation.
Continuing different onshore and offshore opinion regarding the nature and vibe of Chinese stimulus will continue to lead to interesting dispersion. Identify the trend, then market make around it.

HK Connect SOUTHBOUND Flows (To 18 Oct 2024); Net Flows Big, Selling in Brokers, Buying in Props

This past week saw mainland investors trade HK$476bn of stock. Not as big as last “week” but still big. BABA buying has slowed, but net buying was still HK$24.4bn
The buying is starting to see a longer tail of net positive names, and properties this week saw big net buying, even before the Sunac placement which added more.
High-Div SOEs are seeing outflows as beta sees inflows. I expect this to continue.

Weekly Deals Digest (20 Oct) – China TCM, GA Pack, Tokyo Metro, Rigaku, CR Beverage, Horizon Robotic

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: Tokyo Metro (9023 JP), Rigaku Holdings (268A JP), Horizon Robotics (9660 HK), China Resources Beverage (2460 HK) and Hyundai Motor India (1342Z IN) IPOs.
Event-Driven developments: China Traditional Chinese Medicine (570 HK), Greatview Aseptic Packaging (468 HK), Sun Art Retail (6808 HK), Fuji Soft Inc (9749 JP), Dyna Mac Holdings (DMHL SP).

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Oct 20

Daily Brief Japan: Fuji Soft Inc, Allegro MicroSystems , Seven & I Holdings, Nextage Co Ltd, TSE Tokyo Price Index TOPIX and more

By Smartkarma Daily Briefs | Daily Briefs, Japan

In today’s briefing:

Fuji Soft (9749) Reiterates Support for KKR Tender#1, Recos Shareholders Wait, Ignores Nozawa Letter
(Mostly) Asia-Pac M&A: GJS/Haitong, Fuji Soft, Bossini, Dyna-Mac, Beijing Capital Grand, TCM
Allegro MicroSystems Inc.: Enhanced Product Portfolio With Focus on Automotive & E-mobility Applications Driving Our Bullishness! – Major Drivers
Last Week in Event SPACE: Seven & I/Couche-Tard, Intouch, SAMTY, Korea Zinc/Young Poong
NextAge (3186): What Went Wrong?
A Compensation Model Should Be Created to Maximize Outside Directors’ Abilities as Necessary Talents

Fuji Soft (9749) Reiterates Support for KKR Tender#1, Recos Shareholders Wait, Ignores Nozawa Letter

On Tuesday, Fuji Soft Inc (9749 JP) said they had received the legally-binding Bain proposal on 11 October, but noted they could not confirm founder Nozawa-san’s agreement or intentions.
Founder Nozawa Hiroshi responded with a pair of impassioned letters Thursday criticising process, asking Fuji Soft to withdraw support for KKR, and switch to or allow the Bain Offer.
Fuji Soft on Friday reiterated support for the KKR First Tender, but interestingly, saw a majority resolve to suggest common shareholders NOT tender because of the optionality.

(Mostly) Asia-Pac M&A: GJS/Haitong, Fuji Soft, Bossini, Dyna-Mac, Beijing Capital Grand, TCM

I tally 44 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal.
One new deals discussed this week: Bossini International (592 HK) low-balled scrip Offer from Viva Goods (933 HK). Beijing Capital Grand (1329 HK) also suspended due to the Takeovers code.
Key updates took place on: GJS (2611 HK)/Haitong Securities (600837 CH), Fuji Soft Inc (9749 JP), Hotel Property Investments (HPI AU), TCM (570 HK) and Dyna Mac Holdings (DMHL SP)

Allegro MicroSystems Inc.: Enhanced Product Portfolio With Focus on Automotive & E-mobility Applications Driving Our Bullishness! – Major Drivers

Allegro MicroSystems presented their first fiscal quarter 2025 results, positioning themselves within a competitive and challenging market environment.
Positive indicators can be discerned from their performance, although there remain areas of concern which reflect broader market conditions and segment-specific issues.
Starting with the positives, Allegro MicroSystems reported first-quarter sales of $167 million, which was above the midpoint of their guidance.

Last Week in Event SPACE: Seven & I/Couche-Tard, Intouch, SAMTY, Korea Zinc/Young Poong

Couche-Tard execs do the rounds in Tokyo, complaining about not being able to do the rounds. This sounds like they are trying to make themselves sound nice. For now
First the low-balled VTOs for AIS (ADVANC TB) and Thaicom (THCOM TB). Then the Intouch (INTUCH TB)/Gulf Energy (GULF TB) amalgamation. Then, arguably, the next unorthodox development will take place.
Investors buying SAMTY HOLDINGS (187A JP) in size may withhold shares, either they’ll try to become the fulcrum investor to get into the Bidco OR they will try for a bump.

NextAge (3186): What Went Wrong?

By Michael Allen

Sales per outlet and gross margin per vehicle were supposed to rise in Q3. Instead, both went south, causing management to lower FY guidance about 50%.
Evidence from the 1st and 2nd quarters that indicated an immanent turnaround simply vanished in the 3rd quarter.
We lower our rating form “Massive Growth at Huge Discount” to “Decent Growth at Reasonable Price, No immanent catalyst.”

A Compensation Model Should Be Created to Maximize Outside Directors’ Abilities as Necessary Talents

By Aki Matsumoto

Outside director compensation is increasing, but there is a considerable difference in compensation for outside directors between large and small companies and between small and medium-sized publicly traded companies.
Every time a scandal occurs, there is a lack of shareholder-oriented management and a smattering of outside board members who turn a blind eye to the scandal.
A compensation model that includes equity compensation should be created to maximize the power of outside directors, with “management from the perspective of shareholders” as a necessary condition.

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Oct 20

Most Read: CAR Group , Korea Zinc, Inox Wind Ltd, Tower Ltd, China Traditional Chinese Medicine, Fuji Soft Inc, Allegro MicroSystems and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

S&P/ASX Index Rebalance Preview (Dec 2024): Big Impact as Shorts Ramp Up
Scenario Analysis of Korea Zinc’s Share Buyback, Cancellation, and Tender Offer + NPS’s Five Options
Clean Energy & Global Water ETFs: Changes for Asia & Impact
China Traditional Chinese Medicine (570 HK): Disaster as Offer Lapses, Potential Deal Break Price
S&P/NZX 50 Index Rebalance: Tower (TWR) Replaces Arvida (ARV)
TCM (570 HK): Likely Rush for The Exits As Deal Busts
Fuji Soft (9749) Reiterates Support for KKR Tender#1, Recos Shareholders Wait, Ignores Nozawa Letter
Japan Weekly | Insane AI Demand
(Mostly) Asia-Pac M&A: GJS/Haitong, Fuji Soft, Bossini, Dyna-Mac, Beijing Capital Grand, TCM
Allegro MicroSystems Inc.: Enhanced Product Portfolio With Focus on Automotive & E-mobility Applications Driving Our Bullishness! – Major Drivers

S&P/ASX Index Rebalance Preview (Dec 2024): Big Impact as Shorts Ramp Up

By Brian Freitas

With three quarters of the review period complete, there could be one change for the S&P/ASX 50 Index and two changes for the S&P/ASX 200 (AS51 INDEX) in December.
There are two stocks that could be deleted from global indexes in November and that could keep those names under pressure for the next few weeks.
Passive trackers will need to buy between 4-5x ADV in the forecast adds and sell between 2-8x ADV in the forecast deletes. Shorts have been building up in some names.

Scenario Analysis of Korea Zinc’s Share Buyback, Cancellation, and Tender Offer + NPS’s Five Options

By Douglas Kim

We discuss the next steps in the fight for the control of Korea Zinc, after the completion of the tender offer by the MBK Partners and Young Poong alliance.
After the tender offer, MBK and Young Poong’s stake in Korea Zinc increased from 33.13% to 38.47%, coming close to more than half of the voting rights.
We continue to believe that at current stage, MBK/Young Poong alliance has the advantage in the fight for the control of Korea Zinc.

Clean Energy & Global Water ETFs: Changes for Asia & Impact

By Brian Freitas

There are 3 adds and 2 deletes for the iSharesGlobal Clean Energy ETF while there are 2 adds and 2 deletes for the iShares Global Water UCITS ETF.
With US$5bn benchmarked to the iSharesGlobal Clean Energy and related ETFs, and US$3.5bn benchmarked to the iShares Global Water and related ETFs, there is multiple days of ADV to trade.
We see a noticeable rise in cumulative excess volume over the last two trading sessions, so there will be positioning in the stocks.

China Traditional Chinese Medicine (570 HK): Disaster as Offer Lapses, Potential Deal Break Price

Shockingly, the Sinopharm-led consortium’s offer for China Traditional Chinese Medicine (570 HK) has lapsed as the precondition long stop date has not been extended.
This deal break caught many, including me, off guard. There are lessons to be learnt and questions to be asked.
Shareholders will have a bruising Monday. Our analysis suggests a deal break price of around HK$3.44, a 10% downside to the last close.

S&P/NZX 50 Index Rebalance: Tower (TWR) Replaces Arvida (ARV)

By Brian Freitas

Arvida (ARV NZ) will be deleted from the S&P/NZX 50 Index following its acquisition by Stonepeak Alps BidCo. Tower Ltd (TWR NZ) will be added to the index.
Passive NZX50 Index trackers will need to buy nearly 18m shares of Tower Ltd (TWR NZ) – that is over 26 days of ADV.
There has been a lot of positioning in Tower Ltd (TWR NZ) since Stonepeak’s offer for Arvida (ARV NZ). There should be enough supply for the passive trackers.

TCM (570 HK): Likely Rush for The Exits As Deal Busts

China Traditional Chinese Medicine (570 HK) (TCM) has been a frustrating deal, for a deal that shouldn’t be frustrating.
As feared from its 16th October monthly update, the inability to secure investor group consents appears to have torpedoed the transaction. Will we eventually find out why this got stonewalled?
This deal lapse changes the Hong Kong M&A landscape; if you can’t rely on SOE transactions to get up, what next? The immediate question now is downside support on Monday.

Fuji Soft (9749) Reiterates Support for KKR Tender#1, Recos Shareholders Wait, Ignores Nozawa Letter

On Tuesday, Fuji Soft Inc (9749 JP) said they had received the legally-binding Bain proposal on 11 October, but noted they could not confirm founder Nozawa-san’s agreement or intentions.
Founder Nozawa Hiroshi responded with a pair of impassioned letters Thursday criticising process, asking Fuji Soft to withdraw support for KKR, and switch to or allow the Bain Offer.
Fuji Soft on Friday reiterated support for the KKR First Tender, but interestingly, saw a majority resolve to suggest common shareholders NOT tender because of the optionality.

Japan Weekly | Insane AI Demand

By Mark Chadwick

U.S. stocks showed a “slightly bullish” trend this week, driven by stronger-than-expected September Retail Sales, which pushed the S&P 500 up 0.9%
Japan’s stock market experienced a volatile week, with the Nikkei 225 Index declining 1.6% and the broader Topix Index down 0.6%
ASML’s cautious guidance hit Japanese SPE Stocks, but AI-related chip demand remains “insane” according to TSMC

(Mostly) Asia-Pac M&A: GJS/Haitong, Fuji Soft, Bossini, Dyna-Mac, Beijing Capital Grand, TCM

I tally 44 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal.
One new deals discussed this week: Bossini International (592 HK) low-balled scrip Offer from Viva Goods (933 HK). Beijing Capital Grand (1329 HK) also suspended due to the Takeovers code.
Key updates took place on: GJS (2611 HK)/Haitong Securities (600837 CH), Fuji Soft Inc (9749 JP), Hotel Property Investments (HPI AU), TCM (570 HK) and Dyna Mac Holdings (DMHL SP)

Allegro MicroSystems Inc.: Enhanced Product Portfolio With Focus on Automotive & E-mobility Applications Driving Our Bullishness! – Major Drivers

Allegro MicroSystems presented their first fiscal quarter 2025 results, positioning themselves within a competitive and challenging market environment.
Positive indicators can be discerned from their performance, although there remain areas of concern which reflect broader market conditions and segment-specific issues.
Starting with the positives, Allegro MicroSystems reported first-quarter sales of $167 million, which was above the midpoint of their guidance.

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Oct 20

Daily Brief Industrials: Evergreen Marine Corp, Sensata Technologies Holding P and more

By Smartkarma Daily Briefs | Daily Briefs, Industrials

In today’s briefing:

Monthly Container Shipping Tracker: As Momentum Wanes, Best to Avoid Carriers’ Shares (October 2024)
Sensata Technologies Holding plc: Will Its Expansion into High-Value Sensing and Electrical Protection Be A Game Changer? – Major Drivers

Monthly Container Shipping Tracker: As Momentum Wanes, Best to Avoid Carriers’ Shares (October 2024)

By Daniel Hellberg

In the September data are clear signs of slowing momentum & price moderation
Seasonality, NAM de-stocking, anniversary of Red Sea re-routes all contributing
Without catalysts, we would AVOID holding shares of global container names

Sensata Technologies Holding plc: Will Its Expansion into High-Value Sensing and Electrical Protection Be A Game Changer? – Major Drivers

Sensata Technologies repoted its Q2 2024 earnings with positive insights alongside challenges reflected in their financial outcomes.
During Q2 2024, Sensata reported revenue of approximately $1.036 billion compared to $1.062 billion in the same period in 2023.
Despite the decline, the company executed product elimination strategies targeting underperforming products, which, adjusted for, would depict a stable revenue curve slightly ahead of guidance.

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Oct 20

Daily Brief TMT/Internet: Fuji Soft Inc, Horizon Robotics, Allegro MicroSystems , Tencent, Blackbaud Inc, Tenable Holdings Inc, Teradata Corp, Viavi Solutions, Vontier Corp and more

By Smartkarma Daily Briefs | Daily Briefs, TMT/Internet

In today’s briefing:

Fuji Soft (9749) Reiterates Support for KKR Tender#1, Recos Shareholders Wait, Ignores Nozawa Letter
(Mostly) Asia-Pac M&A: GJS/Haitong, Fuji Soft, Bossini, Dyna-Mac, Beijing Capital Grand, TCM
Horizon Robotics (9660 HK) IPO: The Bear Case
Allegro MicroSystems Inc.: Enhanced Product Portfolio With Focus on Automotive & E-mobility Applications Driving Our Bullishness! – Major Drivers
HK Connect SOUTHBOUND Flows (To 18 Oct 2024); Net Flows Big, Selling in Brokers, Buying in Props
Blackbaud Inc.: Is The Recent Underperformance Here To Stay? – Major Drivers
Tenable Holdings Inc.: Can Its Robust Pipeline in Public Sector Opportunities Be Its Biggest Growth Factor? – Major Drivers
Teradata Corporation: Increased Cloud Adoption & Services Expansion Catapulting Growth! – Major Drivers
Viavi Solutions Inc.: Is Its Leadership in Anti-Counterfeiting & 3D Sensing Technologies Here To Stay? – Major Drivers
Vontier Corporation: These Are The 4 Biggest Challenges In Its Path! – Major Drivers

Fuji Soft (9749) Reiterates Support for KKR Tender#1, Recos Shareholders Wait, Ignores Nozawa Letter

On Tuesday, Fuji Soft Inc (9749 JP) said they had received the legally-binding Bain proposal on 11 October, but noted they could not confirm founder Nozawa-san’s agreement or intentions.
Founder Nozawa Hiroshi responded with a pair of impassioned letters Thursday criticising process, asking Fuji Soft to withdraw support for KKR, and switch to or allow the Bain Offer.
Fuji Soft on Friday reiterated support for the KKR First Tender, but interestingly, saw a majority resolve to suggest common shareholders NOT tender because of the optionality.

(Mostly) Asia-Pac M&A: GJS/Haitong, Fuji Soft, Bossini, Dyna-Mac, Beijing Capital Grand, TCM

I tally 44 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal.
One new deals discussed this week: Bossini International (592 HK) low-balled scrip Offer from Viva Goods (933 HK). Beijing Capital Grand (1329 HK) also suspended due to the Takeovers code.
Key updates took place on: GJS (2611 HK)/Haitong Securities (600837 CH), Fuji Soft Inc (9749 JP), Hotel Property Investments (HPI AU), TCM (570 HK) and Dyna Mac Holdings (DMHL SP)

Horizon Robotics (9660 HK) IPO: The Bear Case

Horizon Robotics (9660 HK), a provider of autonomous driving products and services, is seeking to raise up to US$696 million through a HKEx IPO.
In Horizon Robotics (9660 HK) IPO: The Bull Case, we highlighted the key elements of the bull case. In this note, we outline the bear case.
The bear case rests on high related parties’ revenue, customer concentration risk, pricing pressure, uncertain path to profitability, high cash conversion cycle and FCF burn.

Allegro MicroSystems Inc.: Enhanced Product Portfolio With Focus on Automotive & E-mobility Applications Driving Our Bullishness! – Major Drivers

Allegro MicroSystems presented their first fiscal quarter 2025 results, positioning themselves within a competitive and challenging market environment.
Positive indicators can be discerned from their performance, although there remain areas of concern which reflect broader market conditions and segment-specific issues.
Starting with the positives, Allegro MicroSystems reported first-quarter sales of $167 million, which was above the midpoint of their guidance.

HK Connect SOUTHBOUND Flows (To 18 Oct 2024); Net Flows Big, Selling in Brokers, Buying in Props

This past week saw mainland investors trade HK$476bn of stock. Not as big as last “week” but still big. BABA buying has slowed, but net buying was still HK$24.4bn
The buying is starting to see a longer tail of net positive names, and properties this week saw big net buying, even before the Sunac placement which added more.
High-Div SOEs are seeing outflows as beta sees inflows. I expect this to continue.

Blackbaud Inc.: Is The Recent Underperformance Here To Stay? – Major Drivers

Blackbaud, Inc. reported a strong second quarter in 2024, showing significant improvement in various financial metrics and advancing its strategic initiatives.
The company, a leading provider of software to power social impact, has focused on product innovation tailored for non-profit organizations while implementing crucial revenue initiatives and maintaining careful attention to cost management and cash flow enhancement.
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.

Tenable Holdings Inc.: Can Its Robust Pipeline in Public Sector Opportunities Be Its Biggest Growth Factor? – Major Drivers

Tenable’s Q2 2024 earnings report presents a mixed picture, with various strengths and areas of concern that are pivotal for investors to consider.
The company, a notable player in the cybersecurity space, reported revenues and earnings that surpassed expectations, but encountered headwinds with calculated current billings (CCB), which fell short of projected figures.
This discrepancy signals a challenging selling environment and prompts a cautious outlook for the rest of the year.

Teradata Corporation: Increased Cloud Adoption & Services Expansion Catapulting Growth! – Major Drivers

Teradata’s second quarter earnings for the 2024 fiscal year demonstrated a mixed performance in a challenging macroeconomic environment.
On the positive side, Teradata highlighted significant growth in its cloud-based analytics revenue, which grew by 32% in constant currency.
The company also mentioned a strong cloud net expansion rate of 123%, indicating robust customer expansions within its cloud segment.

Viavi Solutions Inc.: Is Its Leadership in Anti-Counterfeiting & 3D Sensing Technologies Here To Stay? – Major Drivers

Viavi Solutions reported its fourth quarter and full year results for fiscal 2024, showcasing varied performance across its different segments.
For the fourth quarter, the company posted net revenue of $252 million, at the midpoint of its guidance range of $246 million to $258 million and reflected a 2.4% sequential increase but a 4.4% decline year-over-year.
The full-year revenue stood at $1 billion, marking a 9.6% decline year-over-year, influenced predominantly by subdued spending from service providers and Network Equipment Manufacturers (NEMs).

Vontier Corporation: These Are The 4 Biggest Challenges In Its Path! – Major Drivers

Vontier Corporation, in its recent earnings call for the second quarter of 2024, presented a mixed financial performance impacted by several external factors.
The company reported a core decline in sales by approximately 3%, primarily due to delays in customer projects and discretionary spending which affected orders and shipments towards the end of the quarter.
These delays were noted across Vontier’s Environmental & Fueling Solutions segment and Alternative Energy business, significantly impacting the quarter’s results.

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Oct 20

Daily Brief Consumer: Seven & I Holdings, Puregold Price Club, Nextage Co Ltd, frontdoor Inc, Gentex Corp, Sonos Inc, TSE Tokyo Price Index TOPIX and more

By Smartkarma Daily Briefs | Consumer, Daily Briefs

In today’s briefing:

Last Week in Event SPACE: Seven & I/Couche-Tard, Intouch, SAMTY, Korea Zinc/Young Poong
Asian Dividend Gems: Puregold Price Club
NextAge (3186): What Went Wrong?
frontdoor Inc.: Engagement & Upscaling via Technological Advancements & Other Major Developments
Gentex Corporation: Recent Expansion of Full Display Mirror (FDM) Adoption
Sonos Inc.: The Tale Of Market Expansion Through Category Diversification! – Major Drivers
A Compensation Model Should Be Created to Maximize Outside Directors’ Abilities as Necessary Talents

Last Week in Event SPACE: Seven & I/Couche-Tard, Intouch, SAMTY, Korea Zinc/Young Poong

Couche-Tard execs do the rounds in Tokyo, complaining about not being able to do the rounds. This sounds like they are trying to make themselves sound nice. For now
First the low-balled VTOs for AIS (ADVANC TB) and Thaicom (THCOM TB). Then the Intouch (INTUCH TB)/Gulf Energy (GULF TB) amalgamation. Then, arguably, the next unorthodox development will take place.
Investors buying SAMTY HOLDINGS (187A JP) in size may withhold shares, either they’ll try to become the fulcrum investor to get into the Bidco OR they will try for a bump.

Asian Dividend Gems: Puregold Price Club

By Douglas Kim

Puregold has built an enormous moat in the Philippines around its hypermarket, supermarket, and discount/membership stores, which is evident on its steady growth in sales and profits amid challenging environment.
Puregold has attractive valuations. Puregold is trading at attractive valuations of 2.7x EV/EBITDA, P/E of 8.6x, and P/B of 0.9x, based on 2025 consensus earnings estimates.
In the next several years, the Philippines is expected to move into the upper middle-income economy which should have a positive impact on the consumption-led categories including supermarkets and hypermarkets.

NextAge (3186): What Went Wrong?

By Michael Allen

Sales per outlet and gross margin per vehicle were supposed to rise in Q3. Instead, both went south, causing management to lower FY guidance about 50%.
Evidence from the 1st and 2nd quarters that indicated an immanent turnaround simply vanished in the 3rd quarter.
We lower our rating form “Massive Growth at Huge Discount” to “Decent Growth at Reasonable Price, No immanent catalyst.”

frontdoor Inc.: Engagement & Upscaling via Technological Advancements & Other Major Developments

Frontdoor, Inc. delivered a robust financial performance for the second quarter of 2024, with notable progress on strategic fronts, despite facing macroeconomic challenges and a tough real estate environment.
The company reported a revenue increase of 4% reaching $542 million and observed a significant expansion in gross margin, up by 470 basis points to 56%.
Adjusted EBITDA improved by 31% to $158 million, and free cash flow saw a substantial rise, more than doubling to $91 million.

Gentex Corporation: Recent Expansion of Full Display Mirror (FDM) Adoption

Gentex Corporation reported its financial results for the second quarter of 2024, revealing challenges in light vehicle production and sales.
Net sales for the quarter were $572.9 million, a decrease from $583.5 million in the same period last year.
The decline is attributed to a 3% drop in light vehicle production in North America, Europe, and Japan/Korea.

Sonos Inc.: The Tale Of Market Expansion Through Category Diversification! – Major Drivers

Sonos, a key player in the audio technology sector, presented its third quarter fiscal 2024 results that signaled both promises and challenges.
The call, led by Patrick Spence, CEO of Sonos, detailed the current predicaments mainly centered around the recent overhaul of their mobile application, alongside highlights of new product introductions and financial metrics.
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.

A Compensation Model Should Be Created to Maximize Outside Directors’ Abilities as Necessary Talents

By Aki Matsumoto

Outside director compensation is increasing, but there is a considerable difference in compensation for outside directors between large and small companies and between small and medium-sized publicly traded companies.
Every time a scandal occurs, there is a lack of shareholder-oriented management and a smattering of outside board members who turn a blind eye to the scandal.
A compensation model that includes equity compensation should be created to maximize the power of outside directors, with “management from the perspective of shareholders” as a necessary condition.

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The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

✓ Unlimited Research Summaries
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Oct 20

Daily Brief Health Care: China Traditional Chinese Medicine, 10X Genomics, Halozyme Therapeutics, Teladoc Health, Inc. and more

By Smartkarma Daily Briefs | Daily Briefs, Healthcare

In today’s briefing:

TCM (570 HK): Likely Rush for The Exits As Deal Busts
Weekly Deals Digest (20 Oct) – China TCM, GA Pack, Tokyo Metro, Rigaku, CR Beverage, Horizon Robotic
10x Genomics Inc.: How Are They Adapting to Market Conditions & Customer Needs? – Major Drivers
Halozyme Therapeutics Inc.: New Launches
Teladoc Health Inc.: Expansion into Insurance for BetterHelp & Other Major Drivers

TCM (570 HK): Likely Rush for The Exits As Deal Busts

China Traditional Chinese Medicine (570 HK) (TCM) has been a frustrating deal, for a deal that shouldn’t be frustrating.
As feared from its 16th October monthly update, the inability to secure investor group consents appears to have torpedoed the transaction. Will we eventually find out why this got stonewalled?
This deal lapse changes the Hong Kong M&A landscape; if you can’t rely on SOE transactions to get up, what next? The immediate question now is downside support on Monday.

Weekly Deals Digest (20 Oct) – China TCM, GA Pack, Tokyo Metro, Rigaku, CR Beverage, Horizon Robotic

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: Tokyo Metro (9023 JP), Rigaku Holdings (268A JP), Horizon Robotics (9660 HK), China Resources Beverage (2460 HK) and Hyundai Motor India (1342Z IN) IPOs.
Event-Driven developments: China Traditional Chinese Medicine (570 HK), Greatview Aseptic Packaging (468 HK), Sun Art Retail (6808 HK), Fuji Soft Inc (9749 JP), Dyna Mac Holdings (DMHL SP).

10x Genomics Inc.: How Are They Adapting to Market Conditions & Customer Needs? – Major Drivers

10x Genomics, a leader in single-cell and spatial technologies, presented a mixed financial and operational report for Q2 2024, characterized by modest revenue growth alongside strategic advancements and evident pressures from the external economic environment.
On the financial front, 10x Genomics reported a revenue increment of 4% year-over-year, reaching $153 million, driven particularly by robust demand for spatial consumables and a sequential increase in single-cell consumables.
Notably, the company achieved a free cash flow positive status during the quarter.

Halozyme Therapeutics Inc.: New Launches

Halozyme’s recent quarterly performance underscored a strong trajectory in its financial and operational fronts.
The company, which specializes in the ENHANZE drug delivery technology, reported robust second-quarter earnings, with total revenue hitting $231 million, showing a growth that aligns with the company’s full-year expectations of 13% to 22%.
Notably, royalty revenues increased by 12%, reaching $125 million.

Teladoc Health Inc.: Expansion into Insurance for BetterHelp & Other Major Drivers

Teladoc Health’s second quarter 2024 financial results present a complex yet promising terrain as the virtual healthcare provider continues to navigate challenges while identifying avenues for growth and improvement.
Despite reporting a net loss, Teladoc Health demonstrated strategic areas of strength, particularly in its Integrated Care business, which noted a revenue increase and solid EBITDA performance.
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.

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Oct 20

Daily Brief Energy/Materials: China Oilfield Services H, Crude Oil and more

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

In today’s briefing:

A/H Premium Tracker (To 18 Oct 2024): AH Premia Drop Sharply; High Premia May Contract More
OPEC, EIA, and IEA Slash Demand Forecasts Again; EIA Sees US LNG Exports Boosting Henry Hub Prices

A/H Premium Tracker (To 18 Oct 2024): AH Premia Drop Sharply; High Premia May Contract More

Huge volumes traded on the mainland, Southbound volumes dropped, AH Premia contracted a little bit, but not much. Things are starting to stabilise.
Average AH pairwise volatility is super high. Intracorrelation of spreads quite low. Lots of room to market-make wide spreads/high premia. High premia may continue to contract on speculation.
Continuing different onshore and offshore opinion regarding the nature and vibe of Chinese stimulus will continue to lead to interesting dispersion. Identify the trend, then market make around it.

OPEC, EIA, and IEA Slash Demand Forecasts Again; EIA Sees US LNG Exports Boosting Henry Hub Prices

By Suhas Reddy

OPEC cuts demand growth estimates for the third consecutive month, lowering its 2024 and 2025 forecasts by 4.9% and 5.7%, respectively, citing demand weakness in China.
Total production of OPEC members obliged to implement supply cuts averaged 21.32m bpd in September, exceeding the target by 180k bpd.
The EIA reduced its 2024 and 2025 oil price forecasts due to September’s sharp decline but expects prices to rise from current levels on declining oil inventories.

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✓ Custom Watchlists
✓ Company Data and News
✓ Events & Webinars

Oct 20

Daily Brief Industrials: Evergreen Marine Corp, Sensata Technologies Holding P and more

By Smartkarma Daily Briefs | Daily Briefs, Industrials

In today’s briefing:

Monthly Container Shipping Tracker: As Momentum Wanes, Best to Avoid Carriers’ Shares (October 2024)
Sensata Technologies Holding plc: Will Its Expansion into High-Value Sensing and Electrical Protection Be A Game Changer? – Major Drivers

Monthly Container Shipping Tracker: As Momentum Wanes, Best to Avoid Carriers’ Shares (October 2024)

By Daniel Hellberg

In the September data are clear signs of slowing momentum & price moderation
Seasonality, NAM de-stocking, anniversary of Red Sea re-routes all contributing
Without catalysts, we would AVOID holding shares of global container names

Sensata Technologies Holding plc: Will Its Expansion into High-Value Sensing and Electrical Protection Be A Game Changer? – Major Drivers