Daily Briefs

Up to 9 stocks could be deleted from global passive portfolios in November. The deletion will lead to liquidity events where trackers will need to sell multiple days of ADV.
There has been a buildup of shorts on nearly all these stocks though the extent of the pre-positioning varies.
The increase in shorts is smaller than the estimated passive selling, though there is a fair amount of variability across the names.

7&I Holdings (3382 JP) – Artisan Writes Another Letter – Based on Content, They Should Sell Any Pop

Some two weeks after it became apparent Alimentation Couche-Tard (ATD CN) had lobbied a bid in for Seven & I Holdings (3382 JP), Artisan Partners wrote a letter.
It was full of misguided analysis, ungrounded insinuation of a general nature without specifying where they would have a problem. It seemed to be complaint for the sake of complaint.
Today another public letter. This time there are a couple of worthwhile suggestions, some accusations of fiduciary impropriety based on no evidence, and an implicit admission they should have sold?

Wa Inc (7683 JP) – Equity Offering, and TOPIX Inclusion But Very Lopsided Register

Yesterday WA Inc (7683 JP) announced that on the five year anniversary of its listing in 2019, the stock would move to TSE Prime on 1 November 2024
They also announced a secondary offering of 2.86mm shares including greenshoe. That’s 15% of shares out but the offering will double total float. This is almost a re-IPO.
This will lead to a TOPIX inclusion on 27 December which will be smaller than the offering. This will be all retail.

Fair for Managers Who Are Protected by Cross-Shareholding and Get Inflated Payout Due to Weak Yen?

By Aki Matsumoto

It’s understandable that compensation is paid for managing a global business and achieving significant growth, but it’s also paid for bloated performance in yen terms due to the weak yen.
Employee engagement is very important for value-added products and more money should be spent on human capital. Otherwise, higher profit margins are unlikely to be achieved.
The election of directors at AGMs rarely results in rejection of the company’s proposal. Cross-shareholdings should be reduced so that managers whose “employment” is protected by cross-shareholdings don’t receive commensurate compensation.

Daiichi Sankyo (4568 JP) Valuation Update – Are We There Yet?

By Avien Pillay

At a 51 NPE, Daiichi Sankyo was priced for perfection.
We do like their focus on the high growth oncology segment, however, we felt that the valuation left no room for error.
Post the two disappointing trial announcements, at a 39 NPE, the valuation is become more palatable and getting closer to our mid-thirties target entry point.

GENOVA (9341 JP): 70% Rally Over the Last Two Months; Here’s Why Outperformance to Continue

By Tina Banerjee

GENOVA (9341 JP) recorded better-than-expected sales and operating profit in Q1FY25, driven by continued strong demand. With the progress achieved in Q1FY25, the company is expected to beat H1FY25 guidance.
Medical Platform business has been experiencing steady growth in both the number of articles and page views, leading to creation of multiple contracts and improve the platform’s unit contract price.
The company had 14K customers for the Medical Platform Business and the Smart Clinic Business in Q1FY25, a mere 8% of its estimated potential customer base of 173K clinics.

Onward Goes Young with Wego

By Michael Causton

Most of Onward’s current customers are in their 40s and older but the purchase of casual clothing retailer, Wego, increases its exposure to people in their teens and 20s.
It will accelerate development of new omnichannel brands to match as part of plans to grow sales by 50% in the next six years and more than double operating profits.
Onward itself has been transformed by a switch to omnichannel and after years of slashing stores and sales now looks set to become a growth business again.

IDOM Inc (7599 JP): 1H FY02/25 flash update

In 1H FY02/25, sales rose JPY46.0bn (22.6%) YoY, driven by large store operations and retail unit sales.
Operating profit increased JPY3.0bn (42.1%) YoY, with gross profit per retail unit rising to JPY440,000 (+60,000 YoY).
Revised FY02/25 forecast projects sales of JPY500.0bn (+19.1% YoY), operating profit of JPY20.3bn (+26.0% YoY).

Takashimaya (8233 JP): 1H FY02/25 flash update

The company revised its FY02/25 forecast, projecting operating revenue of JPY495.0bn and operating profit of JPY55.0bn.
Operating revenue and profit grew YoY across segments, with notable growth in Domestic Department Store and Contract and Design.
Takashimaya Financial Partners Co., Ltd. saw increased revenue from card transactions and expanded its Social Lending business.

Vector Inc (6058 JP): 1H FY02/25 flash update

Revenue decreased 4.1% YoY to JPY27.4bn, while operating profit increased 39.5% YoY to JPY2.1bn.
PR and Advertising saw significant profit growth due to provisions reversal, while Direct Marketing faced profit decline.
Revenue forecast downgraded; 1H revenue fell short due to client loss and food safety impact.

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Oct 17

Daily Brief China: China Traditional Chinese Medicine, Haitong Securities Co Ltd (H), UMP Healthcare, BYD, Tasly Pharmaceutical Group, BenQ BM Holding Cayman Corp., JD Industrial Technology , Horizon Robotics, Genting Bhd and more

By Smartkarma Daily Briefs | China, Daily Briefs

In today’s briefing:

China Traditional Chinese Medicine (570 HK): Theatre of the Absurd
GJS/Haitong Merger Musings
Smartkarma Corporate Webinar | UMP Healthcare: Undervalued Gem in Hong Kong’s Healthcare Market
TCM (570 HK): “Uncertain” To Spook Shares
BYD (1211 HK) Quick Note: Company and Industry Sales Up by 46% YoY and 51% YoY
CR Sanjiu (000999.CH) To Acquire Tasly (600535.CH) Update – This Is Already a Done Deal
BenQ BM Pre-IPO – Core Operations Are Steady but Has Been Losing Market Share
JD Industrials Pre-IPO – Refiling Updates – Few Hits, Few Misses
Horizon Robotics IPO – Peers Are Down a Lot, Its Valuation Isn’t
Morning Views Asia: Adani Green Energy, Anton Oilfield

China Traditional Chinese Medicine (570 HK): Theatre of the Absurd

By Arun George

China Traditional Chinese Medicine (570 HK)’s monthly update notes that the consortium has secured SAMR approval and made progress in obtaining the other regulatory approvals.
As expected, the precondition will not be satisfied before the 18 October long stop date. Unexpectedly, whether the consortium members will consent to the extension remains uncertain.
The extension will be forthcoming as the delay is procedural, there is a reputational risk from a deal break, the time investment is significant, and the warning was legally required.

GJS/Haitong Merger Musings

Back in March, the CSRC said it aimed to “form two to three investment banks and institutions with international competitiveness and market leadership by 2035″.
Last week’s announced merger between China’s leading state-backed brokerages, Guotai Junan Securities (2611 HK) and Haitong (6837 HK), is a move in that direction. Expect more scrip mergers to follow.
There have also been some media reports that the GJS/Haitong terms disadvantage holders of other Hong Kong broker stocks if potentially acquired in a merger. It’s not quite that simple.

Smartkarma Corporate Webinar | UMP Healthcare: Undervalued Gem in Hong Kong’s Healthcare Market

By Smartkarma Research

For our next Corporate Webinar, we are glad to welcome UMP Healthcare’s Chief Financial Officer and Company Secretary, Patrick Cheung.

In the upcoming webinar, Patrick will share a short company presentation after which, he will engage in a fireside chat with Smartkarma Insight Provider, Sameer Taneja. The Corporate Webinar will include a live Q&A session.

The webinar will be hosted on Wednesday, 23 October 2024, 15:00 SGT/HKT.

Register for the Webinar here

About UMP Healthcare

Founded in 1990, UMP Healthcare is a medical group listed on the main board of the Hong Kong Stock Exchange (stock code 722. HK) and is one of the leading comprehensive healthcare service platforms in the Hong Kong market. They are committed to “providing comprehensive, diversified, and coordinated care for everyone” by creating a network of high-quality and effective medical services for patients, payers, providers, and partners.

Along with providing healthcare services that address a wide range of individual needs, UMP closely works with more than 2,000 local and international businesses and insurance organizations to establish and administer corporate healthcare benefit programs for members. The medical service network spans over 1,000 self-owned and affiliated institutions across Hong Kong, Macau, and Mainland China, offering services such as family medicine, specialist consultation, dental care, diagnostic imaging and laboratory testing, preventive medicine and health examination, physical therapy, day surgery, and endoscopy, among others. In 2024, the annual volume of outpatient visits under UMP exceeded 1.3 million.

TCM (570 HK): “Uncertain” To Spook Shares

China Traditional Chinese Medicine (570 HK) (TCM) will fall today. Perhaps a lot.
With two days left on the clock to secure the pre-conditions (18th October), the Offeror said “it remains uncertain” whether it can secure an extension from the investor group.
Such wording could be viewed as boilerplate SFC legalise. I would argue the use of “uncertain” is superfluous, unhelpful, and for investors, downright worrying.

BYD (1211 HK) Quick Note: Company and Industry Sales Up by 46% YoY and 51% YoY

By Ming Lu

BYD’s deliveries growth accelerated to 36% YoY in Aug and 46% YoY Sep.
The whole domestic NEV (New Energy vehicle) market has been accelerating for for the entire third quarter.
We believe the EU and the US market are not concerns, as both domestic and other emerging markets are promising.

CR Sanjiu (000999.CH) To Acquire Tasly (600535.CH) Update – This Is Already a Done Deal

By Xinyao (Criss) Wang

Since Tasly’s performance growth has long stagnated and Yan Kaijing has no better way to turn the situation around, selling Tasly to SOE and cashing out becomes a good choice.
Upon completion of all approvals (e.g. the SASAC, SAMR, shareholders’ meeting of CR Sanjiu, etc.), the deal aims to be completed in 25Q1. We think the deal will get up.
Tasly’s share price should be at least higher than RMB14.85/share based on the cash transfer price. Its P/E would reach 30 in the future after the integration with CR Sanjiu.

BenQ BM Pre-IPO – Core Operations Are Steady but Has Been Losing Market Share

By Nicholas Tan

BenQ BM Holding Cayman Corp. (BBHC HK) is looking to raise at least $US100m in its upcoming Hong Kong IPO.
It is a leading private for-profit general hospital group in mainland China, operating two general hospitals – Nanjing BenQ Hospital and Suzhou BenQ Hospital.
In this note, we look at the firm’s past performance.

JD Industrials Pre-IPO – Refiling Updates – Few Hits, Few Misses

JD Industrial Technology is looking to raise about US$1bn in its upcoming HK IPO.
JDI is a leading industrial supply chain technology and service provider in China in terms of GMV in each year during the Track Record Period, according to CIC.
We have looked at the company background and provided our initial thoughts on valuations in our previous notes. In this note, we will talk about the refiling updates.

Horizon Robotics IPO – Peers Are Down a Lot, Its Valuation Isn’t

Horizon Robotics is looking to raise up to US$696m in its Hong Kong IPO.
Horizon Robotics (HR) is a provider of advanced driver assistance systems (ADAS) and autonomous driving (AD) solutions for passenger vehicles, empowered by its proprietary software and hardware technologies.
We have looked at the company’s past performance in our previous notes. In this note, we will talk about the IPO valuations.

Morning Views Asia: Adani Green Energy, Anton Oilfield

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.

Adani Green Energy
Anton Oilfield

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Oct 17

Most Read: Horizon Robotics, Mazda Motor, Taiwan Semiconductor (TSMC) – ADR, China Traditional Chinese Medicine, Korea Zinc, Seven & I Holdings, Baimtec Material , Haitong Securities Co Ltd (H), Inox Wind Ltd and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

China TCM (570.HK) Privatization Update – The Long Stop Date to Extend or Not?
Horizon Robotics (9660 HK) IPO: Index Inclusion Possibility & Timelines
Japan: Potential Passive Selling in November
Taiwan Dual-Listings Monitor: TSMC Premium Holding Up; ASE & CHT See Sharp Drops
China Traditional Chinese Medicine (570 HK): Theatre of the Absurd
Scenario Analysis of Korea Zinc’s Share Buyback, Cancellation, and Tender Offer + NPS’s Five Options
7&I Holdings (3382 JP) – Artisan Writes Another Letter – Based on Content, They Should Sell Any Pop
CSI 500 Index Rebalance Preview: 50 Changes; 11% Turnover; US$5bn Round-Trip Trade
GJS/Haitong Merger Musings
Clean Energy & Global Water ETFs: Changes for Asia & Impact

China TCM (570.HK) Privatization Update – The Long Stop Date to Extend or Not?

By Xinyao (Criss) Wang

Investors are concerned the Long Stop Date may be extended.But the style of SOEs is rigorous, which means CNPGC has anticipated the potential delays and reserved more time in advance.
Although CNPGC can extend Long Stop Date, this indicates CNPGC fails to complete the set work in scheduled time, which is equivalent to admitting its previous work arrangement was “inappropriate”.
If there’re unexpected circumstances, one possible scenario is privatization would be completed before the Chinese New Year.Because entering 2025, integrating China TCM and Taiji will be the focus of CNPGC.

Horizon Robotics (9660 HK) IPO: Index Inclusion Possibility & Timelines

Horizon Robotics (1395186D CH) is offering 1.355bn shares in its IPO at a price range of HK$3.73-3.99/share. With the overallotment option, the IPO could raise up to HK$6.2bn (US$801m).
Cornerstone investors will take up a third of the offer. Those shares will be locked up for 6 months and will significantly reduce the free float of the stock.
Index inclusions will commence with the HSCI in March 2025 – however, as a stock with Weighted Voting Rights, inclusion in Southbound Stock Connect will only take place in May.

Japan: Potential Passive Selling in November

Up to 9 stocks could be deleted from global passive portfolios in November. The deletion will lead to liquidity events where trackers will need to sell multiple days of ADV.
There has been a buildup of shorts on nearly all these stocks though the extent of the pre-positioning varies.
The increase in shorts is smaller than the estimated passive selling, though there is a fair amount of variability across the names.

Taiwan Dual-Listings Monitor: TSMC Premium Holding Up; ASE & CHT See Sharp Drops

By Vincent Fernando, CFA

TSMC: +15.6% Premium; Relatively Aggressive Trade is to Long Premium
ASE: -3.0% Discount; Good Level to Go Long the Premium
CHT: -2.8% Discount; Good Level to Go Long the Premium

China Traditional Chinese Medicine (570 HK): Theatre of the Absurd

By Arun George

China Traditional Chinese Medicine (570 HK)’s monthly update notes that the consortium has secured SAMR approval and made progress in obtaining the other regulatory approvals.
As expected, the precondition will not be satisfied before the 18 October long stop date. Unexpectedly, whether the consortium members will consent to the extension remains uncertain.
The extension will be forthcoming as the delay is procedural, there is a reputational risk from a deal break, the time investment is significant, and the warning was legally required.

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.

7&I Holdings (3382 JP) – Artisan Writes Another Letter – Based on Content, They Should Sell Any Pop

Some two weeks after it became apparent Alimentation Couche-Tard (ATD CN) had lobbied a bid in for Seven & I Holdings (3382 JP), Artisan Partners wrote a letter.
It was full of misguided analysis, ungrounded insinuation of a general nature without specifying where they would have a problem. It seemed to be complaint for the sake of complaint.
Today another public letter. This time there are a couple of worthwhile suggestions, some accusations of fiduciary impropriety based on no evidence, and an implicit admission they should have sold?

CSI 500 Index Rebalance Preview: 50 Changes; 11% Turnover; US$5bn Round-Trip Trade

With 95% of the review period now complete, we forecast 50 changes (the maximum permitted) for the CSI Smallcap 500 Index at the close on 13 December.
We estimate a one-way turnover of 11% at the rebalance resulting in a one-way trade of CNY17.56bn (US$2.48bn). The Information Technology and HealthCare sectors gain at the expense of Industrials.
After drifting lower over the last couple of months, the forecast adds have outperformed the forecast deletes over the last couple of weeks. There should be more to go here.

GJS/Haitong Merger Musings

Back in March, the CSRC said it aimed to “form two to three investment banks and institutions with international competitiveness and market leadership by 2035″.
Last week’s announced merger between China’s leading state-backed brokerages, Guotai Junan Securities (2611 HK) and Haitong (6837 HK), is a move in that direction. Expect more scrip mergers to follow.
There have also been some media reports that the GJS/Haitong terms disadvantage holders of other Hong Kong broker stocks if potentially acquired in a merger. It’s not quite that simple.

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

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.

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Oct 17

Daily Brief Industrials: Inox Wind Ltd, Hyundai Rotem Company, COSCO SHIPPING International (Singapore), Cintas Corp, SharkNinja , SIG PLC, UFP Industries and more

By Smartkarma Daily Briefs | Daily Briefs, Industrials

In today’s briefing:

Clean Energy & Global Water ETFs: Changes for Asia & Impact
Korea: Stocks with Potential Passive Flows in November
kopi-C with COSCO SHIPPING International (Singapore)’s Chairman and President: ‘Success comes to those who are prepared’
Cintas Corp (CTAS) – Wednesday, Jul 17, 2024
Shark Ninja (SN US) – Wednesday, Jul 17, 2024
SIG Plc – ESG Report – Lucror Analytics
UFP Industries Inc.: Dealing With The Risks Of Supply Chain Volatility & Market Adaptation!

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

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.

Korea: Stocks with Potential Passive Flows in November

There are a few stocks in Korea that have outperformed/ underperformed their peers and could be added to or deleted from global passive portfolios next month.
There could be buying in Hyundai Rotem, while there could be selling in KT Corp, Celltrion Pharm, Kum Yang, Hyundai Engineering & Construction, Hyundai Steel, CosmoAM&T and L&F.
Based on our estimate of passive assets, trackers will need to trade between US$57m to US$230m of the stocks. Impact will vary between 3x-14.5x of ADV to trade.

kopi-C with COSCO SHIPPING International (Singapore)’s Chairman and President: ‘Success comes to those who are prepared’

By Geoff Howie

Integrated logistics company COSCO SHIPPING International (Singapore) is combining acquisitions and other investments with a focus on digitalisation and sustainability to grow.
Since 2018, the company has invested significantly, including acquiring logistics company Cogent Holdings, to shift its main business from ship building, ship repairing and marine engineering to integrated logistics.
COSCO SHIPPING International (Singapore) Co., Ltd. aims to become the best integrated logistics service provider in South and Southeast Asia.

Cintas Corp (CTAS) – Wednesday, Jul 17, 2024

CTAS initially benefited from peak demand due to post-Covid conditions, leading to significant pricing power
However, the company is now facing challenges as demand decreases and competition increases, impacting its market share
CTAS’s aggressive approach has led to stealing market share from competitors like VSTS, highlighting the importance of adapting to changing market conditions in business.

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.

Shark Ninja (SN US) – Wednesday, Jul 17, 2024

SN US is a profitable company spun off from JS Global, driving profits for its parent company
The company focuses on the US market and has seen impressive growth at a 25% CAGR over the past five years
SN US business is divided into Shark and Ninja segments, offering a variety of products and focusing on growing market share and innovation.

SIG Plc – ESG Report – Lucror Analytics

Lucror Analytics’ ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable).
We assess SIG plc’s ESG as “Adequate”, in line with its Environmental, Social and Governance scores. Controversies are “Immaterial” and Disclosure is “Adequate”.

UFP Industries Inc.: Dealing With The Risks Of Supply Chain Volatility & Market Adaptation!

UFP Industries Inc. reported mixed results for the second quarter of 2024, with performance reflecting varied impacts across its segments due to shifting market conditions and strategic changes.
While the company is well positioned with significant capital for future investments, it faces challenges that are affecting its performance and strategic outlook.
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 17

Daily Brief Utilities: NTPC Green Energy Ltd and more

By Smartkarma Daily Briefs | Daily Briefs, Utilities Sector

In today’s briefing:

NTPC Green Pre-IPO – The Negatives – Competitive Marketspace and Some Risks to Watch

NTPC Green Pre-IPO – The Negatives – Competitive Marketspace and Some Risks to Watch

By Clarence Chu

NTPC Green Energy Ltd (2214556D IN) is looking to raise around US$1.2bn in its upcoming India IPO.
NTPC Green Energy Limited (NGEL) is a renewable energy public sector enterprise and a wholly owned subsidiary of NTPC Limited, a Maharatna central public sector enterprise (PSU).
In this note, we will talk about the not so positive aspects of the deal.

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Oct 17

Daily Brief Health Care: China Traditional Chinese Medicine, UMP Healthcare, Tasly Pharmaceutical Group, BenQ BM Holding Cayman Corp., Dr. Wu Skincare, Daiichi Sankyo, Masimo Corp, GENOVA , Exelixis Inc and more

By Smartkarma Daily Briefs | Daily Briefs, Healthcare

In today’s briefing:

China Traditional Chinese Medicine (570 HK): Theatre of the Absurd
Smartkarma Corporate Webinar | UMP Healthcare: Undervalued Gem in Hong Kong’s Healthcare Market
TCM (570 HK): “Uncertain” To Spook Shares
CR Sanjiu (000999.CH) To Acquire Tasly (600535.CH) Update – This Is Already a Done Deal
BenQ BM Pre-IPO – Core Operations Are Steady but Has Been Losing Market Share
Dr Wu Skincare (6523) – Thursday, Jul 18, 2024
Daiichi Sankyo (4568 JP) Valuation Update – Are We There Yet?
Masimo Corporation: Expansion into Consumer Health Products & Other Major Drivers
GENOVA (9341 JP): 70% Rally Over the Last Two Months; Here’s Why Outperformance to Continue
Exelixis Inc.: Expansion Of Cabometyx

China Traditional Chinese Medicine (570 HK): Theatre of the Absurd

By Arun George

China Traditional Chinese Medicine (570 HK)’s monthly update notes that the consortium has secured SAMR approval and made progress in obtaining the other regulatory approvals.
As expected, the precondition will not be satisfied before the 18 October long stop date. Unexpectedly, whether the consortium members will consent to the extension remains uncertain.
The extension will be forthcoming as the delay is procedural, there is a reputational risk from a deal break, the time investment is significant, and the warning was legally required.

Smartkarma Corporate Webinar | UMP Healthcare: Undervalued Gem in Hong Kong’s Healthcare Market

By Smartkarma Research

For our next Corporate Webinar, we are glad to welcome UMP Healthcare’s Chief Financial Officer and Company Secretary, Patrick Cheung.

The webinar will be hosted on Wednesday, 23 October 2024, 15:00 SGT/HKT.

Register for the Webinar here

About UMP Healthcare

TCM (570 HK): “Uncertain” To Spook Shares

China Traditional Chinese Medicine (570 HK) (TCM) will fall today. Perhaps a lot.
With two days left on the clock to secure the pre-conditions (18th October), the Offeror said “it remains uncertain” whether it can secure an extension from the investor group.
Such wording could be viewed as boilerplate SFC legalise. I would argue the use of “uncertain” is superfluous, unhelpful, and for investors, downright worrying.

CR Sanjiu (000999.CH) To Acquire Tasly (600535.CH) Update – This Is Already a Done Deal

By Xinyao (Criss) Wang

Since Tasly’s performance growth has long stagnated and Yan Kaijing has no better way to turn the situation around, selling Tasly to SOE and cashing out becomes a good choice.
Upon completion of all approvals (e.g. the SASAC, SAMR, shareholders’ meeting of CR Sanjiu, etc.), the deal aims to be completed in 25Q1. We think the deal will get up.
Tasly’s share price should be at least higher than RMB14.85/share based on the cash transfer price. Its P/E would reach 30 in the future after the integration with CR Sanjiu.

BenQ BM Pre-IPO – Core Operations Are Steady but Has Been Losing Market Share

By Nicholas Tan

BenQ BM Holding Cayman Corp. (BBHC HK) is looking to raise at least $US100m in its upcoming Hong Kong IPO.
It is a leading private for-profit general hospital group in mainland China, operating two general hospitals – Nanjing BenQ Hospital and Suzhou BenQ Hospital.
In this note, we look at the firm’s past performance.

Dr Wu Skincare (6523) – Thursday, Jul 18, 2024

Dr. Wu Skincare is a leading skincare brand from developed Asia known for its skin vitamins and strong financial performance
Despite not being cheap from a tangible NAV perspective, the brand is considered undervalued with high margins, ROE, and cash returns to shareholders
Dr. Wu, structured as a pure marketing company with no manufacturing, has top market share in key sales channels in Taiwan and continues to grow and maintain a 5% dividend yield

Daiichi Sankyo (4568 JP) Valuation Update – Are We There Yet?

By Avien Pillay

At a 51 NPE, Daiichi Sankyo was priced for perfection.
We do like their focus on the high growth oncology segment, however, we felt that the valuation left no room for error.
Post the two disappointing trial announcements, at a 39 NPE, the valuation is become more palatable and getting closer to our mid-thirties target entry point.

Masimo Corporation: Expansion into Consumer Health Products & Other Major Drivers

Masimo Corporation’s second quarter of 2024 earnings conference call came with updates that carry implications of both strength and ongoing challenges.
The company, primarily known for its healthcare technologies, showed a robust performance in its healthcare segment, with a noticeable 23% year-on-year growth in healthcare revenues, totaling $344 million for the quarter.
This growth is supported by a 29% increase in consumables and service revenue, reflecting strong demand for Masimo sensors, driven by hospital conversions and normalization of installations.

GENOVA (9341 JP): 70% Rally Over the Last Two Months; Here’s Why Outperformance to Continue

By Tina Banerjee

GENOVA (9341 JP) recorded better-than-expected sales and operating profit in Q1FY25, driven by continued strong demand. With the progress achieved in Q1FY25, the company is expected to beat H1FY25 guidance.
Medical Platform business has been experiencing steady growth in both the number of articles and page views, leading to creation of multiple contracts and improve the platform’s unit contract price.
The company had 14K customers for the Medical Platform Business and the Smart Clinic Business in Q1FY25, a mere 8% of its estimated potential customer base of 173K clinics.

Exelixis Inc.: Expansion Of Cabometyx

Exelixis, Inc. presented its second-quarter 2024 financial results, revealing a period of strong performance and strategic advancements in its portfolio.
The company highlighted significant growth in both its top and bottom lines, primarily driven by the success of the cabozantinib franchise, demonstrating a robust market presence, especially in renal cell carcinoma (RCC).
Globally, net product revenues from the cabozantinib franchise, along with revenues from partnerships, showed significant increases, totaling $618 million for the quarter.

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Oct 17

Daily Brief TMT/Internet: ASML Holding NV, JD Industrial Technology , Horizon Robotics, King Yuan Electronics Co, Ltd., Dell Technologies , Dave , Serverworks, Toumei , Acal PLC and more

By Smartkarma Daily Briefs | Daily Briefs, TMT/Internet

In today’s briefing:

ASML Tanks Semis On Tepid 2025 Outlook
ASML 3Q24: The Huge Reset Is Mostly the Result of Company’s Miscalculations
JD Industrials Pre-IPO – Refiling Updates – Few Hits, Few Misses
Horizon Robotics IPO – Peers Are Down a Lot, Its Valuation Isn’t
KYEC (2449.TT): 4Q24 Outlook Brightening; NVDA Will Become #1 Client in 2025
Tech Supply Chain Tracker (17-Oct-2024): Hyundai races to catch up in global AV competition.
Dave Inc (DAVE) – Wednesday, Jul 17, 2024
Serverworks (4434 JP): 1H FY02/25 flash update
Toumei (4439 JP): Full-year FY08/24 flash update
discoverIE Group – Orders stabilising, EPS & margin targets on track

ASML Tanks Semis On Tepid 2025 Outlook

By William Keating

ASML reported revenues of €7.5 billion, +19% QoQ and +11.9% YoY. This was €200 million above the high end of the guided range. Q424 guided to €9 billion
Logic Fab delays and a collapse in sales to China caused ASML to reduce their 2025 forecast to the low end of the €30 -€40 billion guided in November 2022
Despite these challenges, ASML’s latest forecast still implies 16% YoY growth in 2025

ASML 3Q24: The Huge Reset Is Mostly the Result of Company’s Miscalculations

By Nicolas Baratte

Comments focus on low bookings in 3Q24. The reset is much larger than this. ASML has capacity for 90 low-NA EUV machines in 2025-26. Demand in 2025 is below 50.
Bullish 2025-28 guidance (revenue / capacity) provided by ASML end of 2022 is finally resetting. 2025 Consensus Net Income forecast could reset by ~20%, 2026 by ~30%.
ASML finally factors in 1) weak end demand in all segments except for AI 2) Fab push out or cancellation 3) China accelerated Capex and over capacity are slowing.

JD Industrials Pre-IPO – Refiling Updates – Few Hits, Few Misses

JD Industrial Technology is looking to raise about US$1bn in its upcoming HK IPO.
JDI is a leading industrial supply chain technology and service provider in China in terms of GMV in each year during the Track Record Period, according to CIC.
We have looked at the company background and provided our initial thoughts on valuations in our previous notes. In this note, we will talk about the refiling updates.

Horizon Robotics IPO – Peers Are Down a Lot, Its Valuation Isn’t

Horizon Robotics is looking to raise up to US$696m in its Hong Kong IPO.
Horizon Robotics (HR) is a provider of advanced driver assistance systems (ADAS) and autonomous driving (AD) solutions for passenger vehicles, empowered by its proprietary software and hardware technologies.
We have looked at the company’s past performance in our previous notes. In this note, we will talk about the IPO valuations.

KYEC (2449.TT): 4Q24 Outlook Brightening; NVDA Will Become #1 Client in 2025

By Patrick Liao

We expect King Yuan Electronics Co, Ltd. (2449 TT)‘s 4Q24 outlook to be a seasonal uptrend with a slight increase quarter-over-quarter.
NVIDIA Corp (NVDA US) will become the top client at KYEC, and Mediatek Inc (2454 TT) is expected to become the second-largest client in the outlook for 2025.
The focus will primarily be on currently available sources, particularly KYEC for production.

Tech Supply Chain Tracker (17-Oct-2024): Hyundai races to catch up in global AV competition.

By Tech Supply Chain Tracker

Hyundai is competing against the US and China in the global autonomous vehicle market, trying to keep up with the latest technological developments.
Tesla’s new Robotaxi and self-driving bus have been unveiled, but doubts linger about whether they will be commercially successful in the long run.
TsangYow is planning for growth as Asian markets recover, with a Malaysian plant set to launch in 2027. HK startups are utilizing AI for growth in education and tourism sectors.

Dave Inc (DAVE) – Wednesday, Jul 17, 2024

Dave offers financial products to financially challenged Americans, including early wage access loans and digital checking accounts
Dave faces regulatory challenges in the fintech industry but is still considered a good long-term investment
The collapse of Synapse and regulatory scrutiny on banking partners like Evolve have raised concerns about the fast growth of fintech companies without proper supervision, highlighted in articles from WSJ and Bloomberg

Serverworks (4434 JP): 1H FY02/25 flash update

Serverworks reported revenue of JPY17.3bn (+38.6% YoY) and operating profit of JPY603mn (+49.6% YoY).
Resale services revenue reached JPY15.4bn (+40.7% YoY), driven by increased AWS usage and new customer acquisition.
Cloud Integration revenue was JPY1.1bn (+30.2% YoY), with 280 projects and 136 customers by end-Q2.

Toumei (4439 JP): Full-year FY08/24 flash update

Toumei’s FY08/24 revenue reached JPY23.9bn (+16.5% YoY), with operating profit at JPY2.3bn (+40.3% YoY), achieving record highs.
For FY08/25, Toumei forecasts revenue of JPY30.0bn (+25.4% YoY) and operating profit of JPY2.9bn (+24.0% YoY).
Toumei’s NEXT GROWTH 2027 plan targets FY08/27 revenue of JPY40.2bn and operating profit of JPY4.6bn.

discoverIE Group – Orders stabilising, EPS & margin targets on track

By Edison Investment Research

discoverIE’s H125 trading update confirmed that underlying earnings expectations for FY25 are unchanged. Destocking by industrial customers reduced in H125, with some now starting to place orders, resulting in a stabilisation in group order intake. Design wins in H125 with an estimated lifetime value (ELV) of £205m provide a strong foundation for future growth once destocking is complete. We maintain our FY25 and FY26 EPS forecasts despite reducing our revenue forecasts to reflect FX headwinds and lower organic growth in H125, reflecting continued good cost control and reducing interest rates.

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Oct 17

Daily Brief Industrials: Inox Wind Ltd, Hyundai Rotem Company, COSCO SHIPPING International (Singapore), Cintas Corp, SharkNinja , SIG PLC, UFP Industries and more

By Smartkarma Daily Briefs | Daily Briefs, Industrials

In today’s briefing:

Clean Energy & Global Water ETFs: Changes for Asia & Impact
Korea: Stocks with Potential Passive Flows in November
kopi-C with COSCO SHIPPING International (Singapore)’s Chairman and President: ‘Success comes to those who are prepared’
Cintas Corp (CTAS) – Wednesday, Jul 17, 2024
Shark Ninja (SN US) – Wednesday, Jul 17, 2024
SIG Plc – ESG Report – Lucror Analytics
UFP Industries Inc.: Dealing With The Risks Of Supply Chain Volatility & Market Adaptation!

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

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.

Korea: Stocks with Potential Passive Flows in November

There are a few stocks in Korea that have outperformed/ underperformed their peers and could be added to or deleted from global passive portfolios next month.
There could be buying in Hyundai Rotem, while there could be selling in KT Corp, Celltrion Pharm, Kum Yang, Hyundai Engineering & Construction, Hyundai Steel, CosmoAM&T and L&F.
Based on our estimate of passive assets, trackers will need to trade between US$57m to US$230m of the stocks. Impact will vary between 3x-14.5x of ADV to trade.

kopi-C with COSCO SHIPPING International (Singapore)’s Chairman and President: ‘Success comes to those who are prepared’

By Geoff Howie

Integrated logistics company COSCO SHIPPING International (Singapore) is combining acquisitions and other investments with a focus on digitalisation and sustainability to grow.
Since 2018, the company has invested significantly, including acquiring logistics company Cogent Holdings, to shift its main business from ship building, ship repairing and marine engineering to integrated logistics.
COSCO SHIPPING International (Singapore) Co., Ltd. aims to become the best integrated logistics service provider in South and Southeast Asia.

Cintas Corp (CTAS) – Wednesday, Jul 17, 2024

CTAS initially benefited from peak demand due to post-Covid conditions, leading to significant pricing power
However, the company is now facing challenges as demand decreases and competition increases, impacting its market share
CTAS’s aggressive approach has led to stealing market share from competitors like VSTS, highlighting the importance of adapting to changing market conditions in business.

Shark Ninja (SN US) – Wednesday, Jul 17, 2024

SN US is a profitable company spun off from JS Global, driving profits for its parent company
The company focuses on the US market and has seen impressive growth at a 25% CAGR over the past five years
SN US business is divided into Shark and Ninja segments, offering a variety of products and focusing on growing market share and innovation.

SIG Plc – ESG Report – Lucror Analytics

UFP Industries Inc.: Dealing With The Risks Of Supply Chain Volatility & Market Adaptation!

UFP Industries Inc. reported mixed results for the second quarter of 2024, with performance reflecting varied impacts across its segments due to shifting market conditions and strategic changes.
While the company is well positioned with significant capital for future investments, it faces challenges that are affecting its performance and strategic outlook.
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 17

Daily Brief Energy/Materials: SGX Rubber Future TSR20, Berry Global Group, BP Prudhoe Bay Royalty Trust, West Fraser Timber, Alpha Metallurgical Resources, ICL Group , Alkane Resources, Kinross Gold Corp, Sonoco Products Co and more

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

In today’s briefing:

Rubber Board Says Q1 FY25 Production Near Stable But ATMA Disputes
Berry Global Group Inc (BERY) – Wednesday, Jul 17, 2024
Bp Prudhoe Bay Royalty Trust (BPT) – Wednesday, Jul 17, 2024
West Fraser Timber Co.: These Are The 4 Biggest Challenges That Make Us Pessimistic!
Alpha Metallurgical Resources: Dealing With Supply Chain Vulnerability. Fluctuating Market Demand & Pricing Instability! – Major Drivers
ICL Group Ltd: An Insight Into Its Financial Performance and Shareholder Value Proposition! – Major Drivers
Alkane Resources – Seamlessly shifting to Roswell
Kinross Gold Corporation: An Insight Into Its Competitive Positioning! – Major Drivers
Sonoco Products Company: An Analysis Of Its Strategy & Enhanced Productivity Initiatives! – Major Drivers

Rubber Board Says Q1 FY25 Production Near Stable But ATMA Disputes

By Vinod Nedumudy

Consumption declines by .3% to 356,000 tons in Q1 FY 25
ATMA says April-Sept 2024 production 37% lower year on year
ATMA asks Rubber Board to expedite data publishing

Berry Global Group Inc (BERY) – Wednesday, Jul 17, 2024

BERRY (BERY) has had a challenging start to the year but recent market trends have created an interesting investment opportunity for the company.
BERY had been in a strategic review process for its HH&S business, with expectations for a sale to improve their balance sheet, but instead announced a spin off with Glatfelter Corporation (GLT), causing a drop in stock price.
The stock is now in a state of “DEAL PURGATORY” until the transaction is completed, leading to a selloff in the stock price and possible undervaluation for investors to consider.

Bp Prudhoe Bay Royalty Trust (BPT) – Wednesday, Jul 17, 2024

Investment opportunity in BPT, a grantor trust with royalty interest in Prudhoe Bay
Cash flow offset against increasing costs, risky but potentially lucrative
Factors affecting profitability include production levels, WTI prices, costs, and taxes; predicted decrease in value over next 12 months

West Fraser Timber Co.: These Are The 4 Biggest Challenges That Make Us Pessimistic!

West Fraser’s Q2 2024 results present a nuanced profile, shaped by diverse business segments and market dynamics.
The financial highlights and strategic movements of the company were thoroughly discussed during the earnings call hosted by Sean McLaren, President and CEO, alongside Senior Vice President and Chief Financial Officer Chris Virostek and other senior executives.
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.

Alpha Metallurgical Resources: Dealing With Supply Chain Vulnerability. Fluctuating Market Demand & Pricing Instability! – Major Drivers

Alpha Metallurgical Resources reported its financial results for the second quarter of 2024, delivering a performance that reflects both the resilience and challenges faced by the metallurgical coal industry.
The company announced an adjusted EBITDA of $116 million and total shipments of 4.6 million tons during the quarter.
Despite a decrease in adjusted EBITDA from $190 million in the previous quarter, the figures indicate strategic navigation through prevailing tough market conditions, characterized by weakened steel demand and subsequent impact on metallurgical coal markets.

ICL Group Ltd: An Insight Into Its Financial Performance and Shareholder Value Proposition! – Major Drivers

ICL Group Ltd’s second quarter financial performance showcased both strength and areas of concern amid challenging external factors such as geopolitical tensions and evolving market dynamics.
Let’s delve into the specifics of the recent financial outcomes and the implications for businesses and investors alike.
Financial performance highlights included a notable uptick in sales which were recorded at $1,752 million, a consecutive increase for the second quarter.

Alkane Resources – Seamlessly shifting to Roswell

By Edison Investment Research

On 14 October, Alkane released its Q125 quarterly activities report, showing almost all of its operating parameters in line with both guidance and our expectations for the full year. The exceptions were its head grade, which exceeded the upper end of the guidance range by 6.1%, and AISC, which improved upon the lower end of the guidance range by 9.1%. Most significant however was confirmation that AISC guidance reflects a one-off cost for decline development that is accounted as sustaining capital (rather than as an operating expense) and as a result we have increased our earnings estimates for FY25 by A$21.2m, or 85.8x (8,479%).

Kinross Gold Corporation: An Insight Into Its Competitive Positioning! – Major Drivers

Kinross Gold Corporation expressed a strong performance in the second quarter of 2024, which boosted the company’s financial and operational outlook.
The company reported a substantial 20% growth in operating margins compared to the previous quarter, largely driven by optimal functioning at its major mines, notably Tasiast and Paracatu.
The increase in gold prices positively impacted the profitability, enhancing free cash flow to $346 million for the quarter.

Sonoco Products Company: An Analysis Of Its Strategy & Enhanced Productivity Initiatives! – Major Drivers

Sonoco Products Company’s second quarter earnings call presented a mixed picture of the company’s financial performance and strategic direction.
For the second quarter, Sonoco reported sales of $1.6 billion, reflecting a decrease from previous periods.
The adjusted EBITDA stood at $262 million, with EBITDA margins maintaining strength at 16%.

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Oct 17

Daily Brief Consumer: Mazda Motor, Seven & I Holdings, WA Inc, BYD, TSE Tokyo Price Index TOPIX, Volkswagen (Pref), Genting Bhd, Onward Holdings, Taste Gourmet, IDOM Inc and more

By Smartkarma Daily Briefs | Consumer, Daily Briefs

In today’s briefing:

Japan: Potential Passive Selling in November
7&I Holdings (3382 JP) – Artisan Writes Another Letter – Based on Content, They Should Sell Any Pop
Wa Inc (7683 JP) – Equity Offering, and TOPIX Inclusion But Very Lopsided Register
BYD (1211 HK) Quick Note: Company and Industry Sales Up by 46% YoY and 51% YoY
Fair for Managers Who Are Protected by Cross-Shareholding and Get Inflated Payout Due to Weak Yen?
Liquid Universe of European Ordinary and Preferred Shares: October‘24 Report
Morning Views Asia: Adani Green Energy, Anton Oilfield
Onward Goes Young with Wego
Shortlist Of High Conviction Ideas: Income, Value, and Margin of Safety – October 2024
IDOM Inc (7599 JP): 1H FY02/25 flash update

Japan: Potential Passive Selling in November

Up to 9 stocks could be deleted from global passive portfolios in November. The deletion will lead to liquidity events where trackers will need to sell multiple days of ADV.
There has been a buildup of shorts on nearly all these stocks though the extent of the pre-positioning varies.
The increase in shorts is smaller than the estimated passive selling, though there is a fair amount of variability across the names.

7&I Holdings (3382 JP) – Artisan Writes Another Letter – Based on Content, They Should Sell Any Pop

Some two weeks after it became apparent Alimentation Couche-Tard (ATD CN) had lobbied a bid in for Seven & I Holdings (3382 JP), Artisan Partners wrote a letter.
It was full of misguided analysis, ungrounded insinuation of a general nature without specifying where they would have a problem. It seemed to be complaint for the sake of complaint.
Today another public letter. This time there are a couple of worthwhile suggestions, some accusations of fiduciary impropriety based on no evidence, and an implicit admission they should have sold?

Wa Inc (7683 JP) – Equity Offering, and TOPIX Inclusion But Very Lopsided Register

Yesterday WA Inc (7683 JP) announced that on the five year anniversary of its listing in 2019, the stock would move to TSE Prime on 1 November 2024
They also announced a secondary offering of 2.86mm shares including greenshoe. That’s 15% of shares out but the offering will double total float. This is almost a re-IPO.
This will lead to a TOPIX inclusion on 27 December which will be smaller than the offering. This will be all retail.

BYD (1211 HK) Quick Note: Company and Industry Sales Up by 46% YoY and 51% YoY

By Ming Lu

BYD’s deliveries growth accelerated to 36% YoY in Aug and 46% YoY Sep.
The whole domestic NEV (New Energy vehicle) market has been accelerating for for the entire third quarter.
We believe the EU and the US market are not concerns, as both domestic and other emerging markets are promising.

Fair for Managers Who Are Protected by Cross-Shareholding and Get Inflated Payout Due to Weak Yen?

By Aki Matsumoto

It’s understandable that compensation is paid for managing a global business and achieving significant growth, but it’s also paid for bloated performance in yen terms due to the weak yen.
Employee engagement is very important for value-added products and more money should be spent on human capital. Otherwise, higher profit margins are unlikely to be achieved.
The election of directors at AGMs rarely results in rejection of the company’s proposal. Cross-shareholdings should be reduced so that managers whose “employment” is protected by cross-shareholdings don’t receive commensurate compensation.

Liquid Universe of European Ordinary and Preferred Shares: October‘24 Report

By Jesus Rodriguez Aguilar

Since mid-September, share-price spreads have generally widened across our European liquid universe of ordinary and preferred shares (9 have tightened, 10 widened).
Recommended trades long preferred / short ordinary shares: Atlas Copco, Grifols SA, Media-for-Europe, Volkswagen.
Recommended trades long ordinary / short preferred shares: Carlsberg, Henkel, SSAB Svenska Stal.

Morning Views Asia: Adani Green Energy, Anton Oilfield

Adani Green Energy
Anton Oilfield

Onward Goes Young with Wego

By Michael Causton

Most of Onward’s current customers are in their 40s and older but the purchase of casual clothing retailer, Wego, increases its exposure to people in their teens and 20s.
It will accelerate development of new omnichannel brands to match as part of plans to grow sales by 50% in the next six years and more than double operating profits.
Onward itself has been transformed by a switch to omnichannel and after years of slashing stores and sales now looks set to become a growth business again.

Shortlist Of High Conviction Ideas: Income, Value, and Margin of Safety – October 2024

By Sameer Taneja

We compile our selection of small and mid-cap names with our desired characteristics of high dividend yields, value, and margin of safety.
Our top picks are Perfect Medical Health (1830 HK), The Keepers Holdings (KEEPR PM), Taste Gourmet (8371 HK), Uchi Technologies (UCHI MK), and Ginebra San Miguel (GSMI PM).
We preview Taste Gourmet’s (8371 HK) earnings for H1 FY24, which will be declared in November.

IDOM Inc (7599 JP): 1H FY02/25 flash update