Daily Briefs

ADM’s Q2 results underperformed analyst expectations with both EPS and revenue missing analyst estimates.
Operating profit declined for Ag Services & Oilseeds (ASO) and Nutrition, while Carbohydrate Solutions saw an uptick, driven by margin and volume expansion in Starches and Sweeteners.
ADM expects weak Q3 for AS&O and Carbohydrate Solutions, with improvements expected in H2 2024. Nutrition is expected to perform strongly due to cost efficiency and volume expansion.

Copper Tracker August 5th, 2024: Physical/Equity Screens And Trades, Positive Signs For Copper

By Sameer Taneja

Copper declined below the 9,000 USD/ton levels (WoW by -0.5%) due to weakness in financial markets caused by the Federal Reserve’s slowness in cutting rates.
Positive signs for copper were the Yangshan Copper Premium inflecting into positive territory and combined inventory on all exchanges being drawn down by almost 5%.
Lundin Mining (LUN CN) and BHP Group Ltd (BHP AU) will acquire Filo (FIL CN) for 4.1 bn CAD and develop the Josemaria project in Argentina.

Intel’s Market Meltdown: Analyzing the Struggles of a Semiconductor Leader

By Baptista Research

In a shocking turn of events, Intel Corporation, a long-standing leader in the semiconductor industry, witnessed one of its worst days on Wall Street, losing over a quarter of its market value in a single trading session.
The drastic drop followed the company’s announcement of a $1.6 billion net loss for the second quarter of 2024, a stark contrast to the $1.47 billion profit reported in the same period the previous year.
Intel’s share price plummeted by 27%, marking its steepest decline since 1974, as the company grappled with disappointing earnings, a bleak forecast, and a massive restructuring plan.

[CB 30/2024] Corn & Soy Tumble on Improving Weather; Chinese Demand Likely to Support Soy

North Dakota accounts for 51% of total US spring wheat production. The region’s projected 2024 crop yield 15% higher YoY at an average of 54.5 bushels per acre.
Large old-crop corn inventories record yield of 183-185 bpa collectively dragging corn prices down.
Wheat vols rebounded last week after falling the prior week. Prices face uncertainty as strong exports, lower production in EU & China provides support against massive US harvest.

Viacom Inc – Paramount Global in Takeover Crosshairs: What Investors Need to Know!

By Baptista Research

In a dynamic and evolving media landscape, Paramount Global finds itself the subject of takeover speculation, igniting interest among investors.
Reports suggest that Edgar Bronfman Jr., the former CEO of Warner Music and Seagram, is considering a bid for Paramount’s parent company, National Amusements, with backing from Bain Capital.
This development emerges just as Paramount is concluding a 45-day “go-shop” period related to a potential deal with Skydance Media, expiring on August 21st.

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Aug 05

Daily Brief India: Ola Electric, BrainBees Solutions, NIFTY Index and more

By Smartkarma Daily Briefs | Daily Briefs, India

In today’s briefing:

ECM Weekly (5th Aug 2024) – Ola Electric, Brainbees, WeRide, Sanil, CR Beverages, Carote, Fortescue
Brainbees Solutions (FirstCry) IPO: Valuation Insights
EQD / NSE Vol Update / Coffee Boost for Sleepy Vol Mkts as Risk Sentiment Sours into the Weekend

ECM Weekly (5th Aug 2024) – Ola Electric, Brainbees, WeRide, Sanil, CR Beverages, Carote, Fortescue

By Sumeet Singh

Aequitas Research’s weekly update on the IPOs, placements, lockup expiry and other ECM linked events that were covered by the team over the past week.
On the IPO front, the coming week will see see the listing of Akums Drugs while books will be open for Ola Electric, BrainBees Solutions and Black Sesame Technologies.
On the placement front, there were two large deals in Fortescue Metals (FMG AU) and Adani Transmission (ADANIT IN).

Brainbees Solutions (FirstCry) IPO: Valuation Insights

BrainBees Solutions (0172540D IN), India’s largest multi-channel retailing platform for mothers’, babies’ and kids’ products, will launch an IPO to raise up to US$500 million.
We previously discussed the IPO in Brainbees Solutions (FirstCry) IPO: The Bull Case, Brainbees Solutions (FirstCry) IPO: The Bear Case and Brainbees Solutions (FirstCry) IPO: The Investment Case.
Our valuation analysis suggests that the IPO price range of Rs440-465 per share is attractive. Therefore, we would participate in the IPO.

EQD / NSE Vol Update / Coffee Boost for Sleepy Vol Mkts as Risk Sentiment Sours into the Weekend

By Sankalp Singh

Implied Volatilities (IVs) fell post-FOMC, but reversed course as market sentiment worsened late -week. IV-jump expected as Indian markets catch up to Friday’s U.S. price action
Vol-Regime Model still in a “High & Down” vol state. Will switch if large IV change on the open. Short Vega & Risk-Reversal positions will need to be reevaluated.
Low PCR, OI call bias & Skew compression: All point to unguarded downside in Nifty50. Next stop 24000.

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Aug 05

Daily Brief Japan: Shinko Electric Industries, Sumitomo Forestry, MS&AD Insurance, TSE Tokyo Price Index TOPIX, CELSYS, Daiwabo Holdings and more

By Smartkarma Daily Briefs | Daily Briefs, Japan

In today’s briefing:

Update: Shinko Electric (6967) Shorter-Dated and Break Risk Small but GAP RISK Now Much Higher
Sumitomo Forestry (1911 JP): Selloff Provides Entry for Potential Index Inclusion
Japan CorpGovReport Details: TSE “Mgmt Conscious of Capital Cost/Stock Price” Details (Aug24)
Sustainability Has Many Companies Confused About Linking Financial and Non-Financial Information
CELSYS (3663 JP): 1H FY12/24 flash update, revision of dividend forecast
Daiwabo Holdings (3107 JP): Q1 FY03/25 flash update

Update: Shinko Electric (6967) Shorter-Dated and Break Risk Small but GAP RISK Now Much Higher

When this deal was announced, it was light. But the timing, JSR influence, large-ish float, ensured FUD would make this trade wide. It traded wider.
Nearly 7mos ago, Shinko had much-underperformed peer Ibiden, meaning downside gap risk from undisturbed was negative as spreads were wide. I reco’d a buy. Then 5mos ago, recommended taking profits.
Ibiden has now underperformed Shinko by 25+% in 2-plus weeks. GAP RISK is higher but this is a short-timer. HUGE yield to “expected” start date, so everyone assumes a delay.

Sumitomo Forestry (1911 JP): Selloff Provides Entry for Potential Index Inclusion

Sumitomo Forestry (1911 JP) is a potential inclusion to a global index at the August rebalance. If added, passive trackers will need to buy over 6x ADV.
Sumitomo Forestry (1911 JP) has traded lower on risk-off sentiment and further downside provides an entry point that could pay off if the stock is added to the index.
Sumitomo Forestry (1911 JP) has outperformed its peers but trades at similar valuations to some stocks. A long/short trade could protect the downside.

Japan CorpGovReport Details: TSE “Mgmt Conscious of Capital Cost/Stock Price” Details (Aug24)

July saw 825 new Corporate Governance Reports filed and 8 new “Mgmt Conscious of Capital Cost/Stock Price” policies filed. June saw 1,673 and 5, respectively. That’s 2500 cos.
We created a tool show every report, provide links to every document, and now a new diff file tool. Put in a name, see the difference between the Old/New Reports.
We hope this tool will help. It is designed to be a shelf reference. We update the tool once a month, a couple of weeks ahead of the TSE.

Sustainability Has Many Companies Confused About Linking Financial and Non-Financial Information

By Aki Matsumoto

Sustainable management should be considered in the sustainable expansion of corporate value, including shareholders’ interest, and non-financial information should provide direction based on information that isn’t feasible, including financial information.
Starting with appointing people who are diverse in nationality and gender to the board of directors will lead to discussing management issues with diverse opinions.
Significant differences exist between those companies that have improved their efforts to improve board practices and capital profitability and achieved results, and those that have only formally put board practices.

CELSYS (3663 JP): 1H FY12/24 flash update, revision of dividend forecast

By Shared Research

Celsys reported 1H FY12/24 sales of JPY4.1bn (-4.5% YoY), operating profit of JPY1.1bn (+51.6% YoY), and net income of JPY944mn.
Content Production Solutions segment achieved sales of JPY3.5bn (+16.6% YoY) and operating profit of JPY1.5bn (+26.1% YoY).
Content Distribution Solutions segment recorded sales of JPY522mn (+2.8% YoY) and operating loss of JPY359mn (JPY327mn loss in FY12/23).

Daiwabo Holdings (3107 JP): Q1 FY03/25 flash update

By Shared Research

Revenue for FY03/22 was JPY227.8bn (+8.8% YoY), with IT Infrastructure Distribution segment revenue rising 17.4% YoY.
Operating profit for FY03/22 was JPY4.3bn (-13.4% YoY), with a temporary drop in profit margin due to competition.
Daiwabo Holdings’ FY03/25 forecast includes revenue of JPY1.0tn (+4.6% YoY) and net income of JPY21.8bn (+409.0% YoY).

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Aug 05

Daily Brief China: Chongqing Taiji Industry (Group) A, Shanghai Henlius Biotech , Black Sesame Technologies, CPMC Holdings and more

By Smartkarma Daily Briefs | China, Daily Briefs

In today’s briefing:

China Healthcare Weekly (Aug.4)- Taiji Group & China TCM, TCM Formula Granules VBP, Keymed’s Trouble
Merger Arb Mondays (05 Aug) – Henlius, Asia Cement, Canvest, GA Pack, CPMC, A8, Fancl
Black Sesame IPO – Paying Up-Front for Its Monetization Potential
CPMC Holdings (906.HK) Privatization Update- Due to Risk Behind ORG’s Offer, Baosteel Is a Wiser Bet

China Healthcare Weekly (Aug.4)- Taiji Group & China TCM, TCM Formula Granules VBP, Keymed’s Trouble

TCM formula granules VBP would cause some disturbance to related enterprises’ performance, but the substitution of TCM formula granules for TCM decoction pieces is a trend, indicating long-term optimistic growth.
Keymed’s CM310 would probably miss the NRDL negotiation this year, which will put the Company in passive situation. Based on competitive landscape, we are worried about the performance of Keymed.
Unsatisfactory performance of Taiji’s shares is related to concerns on China TCM’s privatization/24H1 results.However, even without the integration with China TCM, Taiji’s market value should be more than RMB20 billion.

Merger Arb Mondays (05 Aug) – Henlius, Asia Cement, Canvest, GA Pack, CPMC, A8, Fancl

We summarise the latest spreads and newsflow of merger arb situations we cover across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
Highest spreads: Yichang HEC Changjiang Pharma (1558 HK), China Traditional Chinese Medicine (570 HK), Asia Cement China (743 HK), Canvest Environmental Protection Group (1381 HK), Shanghai Henlius Biotech (2696 HK).
Lowest spreads: Fancl Corp (4921 JP), Second Chance Properties (SCE SP), Tatsuta Electric Wire & Cable (5809 JP), Mimasu Semiconductor Industry (8155 JP), Alps Logistics (9055 JP).

Black Sesame IPO – Paying Up-Front for Its Monetization Potential

By Clarence Chu

Black Sesame Technologies (BLACKSES HK) is looking to raise US$143m in its Hong Kong IPO.
Black Sesame International Holdings (BSIH) is an automotive-grade computing SoC and SoC-based intelligent vehicle solution provider.
In our earlier notes, we looked at the past performance of the deal. In this note, we discuss peers and share our thoughts on valuation.

CPMC Holdings (906.HK) Privatization Update- Due to Risk Behind ORG’s Offer, Baosteel Is a Wiser Bet

Baosteel’s choice to maintain its original Offer may partly reflect its “confidence” in the deal. If investors bet that Huarui Offer will succeed, they need to bear some risks.
If investors choose to arbitrage at HK$7.21/share, annualized return is 9% assuming privatization would be completed in mid-Jan 2025.Such return may not be attractive considering the uncertainties behind the deal.
If investors are optimistic about Baosteel’s final acquisition of CPMC, they can consider buying Baosteel shares, as Baosteel will become the new industry leader, with greater upside potential for valuation.

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Aug 05

Most Read: Nippon Express Holdings, Fast Retailing, Shinko Electric Industries, Rio Tinto Ltd, Sumitomo Forestry, Chongqing Taiji Industry (Group) A, Samsung Electronics Pref Shares, Nuvoton Technology, MS&AD Insurance, Taiwan Semiconductor (TSMC) – ADR and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

Japan – Passive Selling in a Few Weeks & Shorts Build Up
Fast Retailing (9983) | Q3 Masterclass
Update: Shinko Electric (6967) Shorter-Dated and Break Risk Small but GAP RISK Now Much Higher
Last Week in Event SPACE: Rio Tinto, Ryohin Keikaku/Fast Retailing, WH Group, ThaiBev/F&N, PCCW
Sumitomo Forestry (1911 JP): Selloff Provides Entry for Potential Index Inclusion
China Healthcare Weekly (Aug.4)- Taiji Group & China TCM, TCM Formula Granules VBP, Keymed’s Trouble
Local Market Observations on Timing Samsung Electronics 1P Discount Narrowing
Yuanta/P-Shares Taiwan Div+ ETF Rebalance Preview: Nuvoton Deletion & Positioning
Japan CorpGovReport Details: TSE “Mgmt Conscious of Capital Cost/Stock Price” Details (Aug24)
Taiwan Dual-Listings Monitor: TSMC and ASE Premiums Break Down Again; ASE Spread Near 1-Year Lows

Japan – Passive Selling in a Few Weeks & Shorts Build Up

Up to 12 stocks could be deleted from global passive portfolios in August. 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.

Fast Retailing (9983) | Q3 Masterclass

By Mark Chadwick

Fast Retailing delivered an impressive Q3 report. Sales +10% YoY were +3% above our expectations.
Big jump in profitability. OP +31% YoY to Y145b driven by +57% jump in Uniqlo Japan earnings. Record consolidated OPM ~19%
Uniqlo’s performance is leaving global peers in its wake. Profitability now rivalling Inditex. However, valuations remain at a premium

Update: Shinko Electric (6967) Shorter-Dated and Break Risk Small but GAP RISK Now Much Higher

When this deal was announced, it was light. But the timing, JSR influence, large-ish float, ensured FUD would make this trade wide. It traded wider.
Nearly 7mos ago, Shinko had much-underperformed peer Ibiden, meaning downside gap risk from undisturbed was negative as spreads were wide. I reco’d a buy. Then 5mos ago, recommended taking profits.
Ibiden has now underperformed Shinko by 25+% in 2-plus weeks. GAP RISK is higher but this is a short-timer. HUGE yield to “expected” start date, so everyone assumes a delay.

Last Week in Event SPACE: Rio Tinto, Ryohin Keikaku/Fast Retailing, WH Group, ThaiBev/F&N, PCCW

By David Blennerhassett

At a time when the LSE has dumbed down the checks and balances for listed companies, now may be the right time to consider collapsing Rio Tinto (RIO AU)‘s DLC.
Re: Sep24 Nikkei 225 Rebal, long Ryohin Keikaku (7453 JP) vs. Fast Retailing (9983 JP), but this may not last. It has worked very well.
Unless we see a significant (and sustainable) reversal in WH Group (288 HK)‘s US/Mexican ops in the interim results, now hardly appears the opportune time for a Smithfield IPO.

Sumitomo Forestry (1911 JP): Selloff Provides Entry for Potential Index Inclusion

Sumitomo Forestry (1911 JP) is a potential inclusion to a global index at the August rebalance. If added, passive trackers will need to buy over 6x ADV.
Sumitomo Forestry (1911 JP) has traded lower on risk-off sentiment and further downside provides an entry point that could pay off if the stock is added to the index.
Sumitomo Forestry (1911 JP) has outperformed its peers but trades at similar valuations to some stocks. A long/short trade could protect the downside.

China Healthcare Weekly (Aug.4)- Taiji Group & China TCM, TCM Formula Granules VBP, Keymed’s Trouble

TCM formula granules VBP would cause some disturbance to related enterprises’ performance, but the substitution of TCM formula granules for TCM decoction pieces is a trend, indicating long-term optimistic growth.
Keymed’s CM310 would probably miss the NRDL negotiation this year, which will put the Company in passive situation. Based on competitive landscape, we are worried about the performance of Keymed.
Unsatisfactory performance of Taiji’s shares is related to concerns on China TCM’s privatization/24H1 results.However, even without the integration with China TCM, Taiji’s market value should be more than RMB20 billion.

Local Market Observations on Timing Samsung Electronics 1P Discount Narrowing

By Sanghyun Park

Local traders see interest rate cuts and value-up disclosures as key for timing Samsung Electronics 1P discount narrowing.
Samsung’s only realistic value-up goal beyond 50% FCF return is improving ROE, likely through a pref-skewed buyback or cancellation program.
If Samsung announces a value-up plan during the Bank of Korea’s rate cuts, local traders expect the 1P discount to reverse, targeting October-November for position entry.

Yuanta/P-Shares Taiwan Div+ ETF Rebalance Preview: Nuvoton Deletion & Positioning

Nuvoton Technology (4919 TT) should be deleted from the Yuanta/P-Shares Taiwan Dividend Plus ETF in September and that will trigger selling of over 4 days of ADV.
Nuvoton Technology (4919 TT) has underperformed most of its peers since the start of the calendar year and shorts have started to increase in the stock.
Positioning appears light and the recent deletion from an index has increased the real float of the stock. Recent semiconductor weakness could further pressure the stock.

Japan CorpGovReport Details: TSE “Mgmt Conscious of Capital Cost/Stock Price” Details (Aug24)

July saw 825 new Corporate Governance Reports filed and 8 new “Mgmt Conscious of Capital Cost/Stock Price” policies filed. June saw 1,673 and 5, respectively. That’s 2500 cos.
We created a tool show every report, provide links to every document, and now a new diff file tool. Put in a name, see the difference between the Old/New Reports.
We hope this tool will help. It is designed to be a shelf reference. We update the tool once a month, a couple of weeks ahead of the TSE.

Taiwan Dual-Listings Monitor: TSMC and ASE Premiums Break Down Again; ASE Spread Near 1-Year Lows

TSMC: Premium Breaks Back Down to +8.3%; 5-15% Could Now Be the Key Range
UMC: -2.2% Discount; Good Level to Go Long the Premium
ASE: Premium Breaks Down Again, Now Only +1.5%; Consider Going Long

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Aug 05

Daily Brief Energy/Materials: CPMC Holdings, Copper and more

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

In today’s briefing:

CPMC Holdings (906.HK) Privatization Update- Due to Risk Behind ORG’s Offer, Baosteel Is a Wiser Bet
Copper Tracker August 5th, 2024: Physical/Equity Screens And Trades, Positive Signs For Copper

CPMC Holdings (906.HK) Privatization Update- Due to Risk Behind ORG’s Offer, Baosteel Is a Wiser Bet

Baosteel’s choice to maintain its original Offer may partly reflect its “confidence” in the deal. If investors bet that Huarui Offer will succeed, they need to bear some risks.
If investors choose to arbitrage at HK$7.21/share, annualized return is 9% assuming privatization would be completed in mid-Jan 2025.Such return may not be attractive considering the uncertainties behind the deal.
If investors are optimistic about Baosteel’s final acquisition of CPMC, they can consider buying Baosteel shares, as Baosteel will become the new industry leader, with greater upside potential for valuation.

Copper Tracker August 5th, 2024: Physical/Equity Screens And Trades, Positive Signs For Copper

By Sameer Taneja

Copper declined below the 9,000 USD/ton levels (WoW by -0.5%) due to weakness in financial markets caused by the Federal Reserve’s slowness in cutting rates.
Positive signs for copper were the Yangshan Copper Premium inflecting into positive territory and combined inventory on all exchanges being drawn down by almost 5%.
Lundin Mining (LUN CN) and BHP Group Ltd (BHP AU) will acquire Filo (FIL CN) for 4.1 bn CAD and develop the Josemaria project in Argentina.

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✓ Company Data and News
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Aug 05

Daily Brief Health Care: Chongqing Taiji Industry (Group) A, Shanghai Henlius Biotech and more

By Smartkarma Daily Briefs | Daily Briefs, Healthcare

In today’s briefing:

China Healthcare Weekly (Aug.4)- Taiji Group & China TCM, TCM Formula Granules VBP, Keymed’s Trouble
Merger Arb Mondays (05 Aug) – Henlius, Asia Cement, Canvest, GA Pack, CPMC, A8, Fancl

China Healthcare Weekly (Aug.4)- Taiji Group & China TCM, TCM Formula Granules VBP, Keymed’s Trouble

TCM formula granules VBP would cause some disturbance to related enterprises’ performance, but the substitution of TCM formula granules for TCM decoction pieces is a trend, indicating long-term optimistic growth.
Keymed’s CM310 would probably miss the NRDL negotiation this year, which will put the Company in passive situation. Based on competitive landscape, we are worried about the performance of Keymed.
Unsatisfactory performance of Taiji’s shares is related to concerns on China TCM’s privatization/24H1 results.However, even without the integration with China TCM, Taiji’s market value should be more than RMB20 billion.

Merger Arb Mondays (05 Aug) – Henlius, Asia Cement, Canvest, GA Pack, CPMC, A8, Fancl

We summarise the latest spreads and newsflow of merger arb situations we cover across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
Highest spreads: Yichang HEC Changjiang Pharma (1558 HK), China Traditional Chinese Medicine (570 HK), Asia Cement China (743 HK), Canvest Environmental Protection Group (1381 HK), Shanghai Henlius Biotech (2696 HK).
Lowest spreads: Fancl Corp (4921 JP), Second Chance Properties (SCE SP), Tatsuta Electric Wire & Cable (5809 JP), Mimasu Semiconductor Industry (8155 JP), Alps Logistics (9055 JP).

💡 Before it’s here, it’s on Smartkarma

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

Aug 05

Daily Brief TMT/Internet: Shinko Electric Industries, Samsung Electronics Pref Shares, Nuvoton Technology, Taiwan Semiconductor (TSMC) – ADR, Black Sesame Technologies, United Microelectron Sp Adr, Microsoft Corp, Intel Corp, Daiwabo Holdings and more

By Smartkarma Daily Briefs | Daily Briefs, TMT/Internet

In today’s briefing:

Update: Shinko Electric (6967) Shorter-Dated and Break Risk Small but GAP RISK Now Much Higher
Local Market Observations on Timing Samsung Electronics 1P Discount Narrowing
Yuanta/P-Shares Taiwan Div+ ETF Rebalance Preview: Nuvoton Deletion & Positioning
Taiwan Dual-Listings Monitor: TSMC and ASE Premiums Break Down Again; ASE Spread Near 1-Year Lows
Black Sesame IPO – Paying Up-Front for Its Monetization Potential
Taiwan Tech Weekly: Tough Start for Nvidia and Apple Supply Chains; Asustek, Novatek Results Ahead
UMC Signals Non-AI Industry Inventory Correction Through 2024E; Why Intel Is Increasingly Important
Microsoft’s Strong Q2: Solid Revenue and Earnings Growth Despite Cloud Concerns
Intel’s Market Meltdown: Analyzing the Struggles of a Semiconductor Leader
Daiwabo Holdings (3107 JP): Q1 FY03/25 flash update

Update: Shinko Electric (6967) Shorter-Dated and Break Risk Small but GAP RISK Now Much Higher

When this deal was announced, it was light. But the timing, JSR influence, large-ish float, ensured FUD would make this trade wide. It traded wider.
Nearly 7mos ago, Shinko had much-underperformed peer Ibiden, meaning downside gap risk from undisturbed was negative as spreads were wide. I reco’d a buy. Then 5mos ago, recommended taking profits.
Ibiden has now underperformed Shinko by 25+% in 2-plus weeks. GAP RISK is higher but this is a short-timer. HUGE yield to “expected” start date, so everyone assumes a delay.

Local Market Observations on Timing Samsung Electronics 1P Discount Narrowing

By Sanghyun Park

Local traders see interest rate cuts and value-up disclosures as key for timing Samsung Electronics 1P discount narrowing.
Samsung’s only realistic value-up goal beyond 50% FCF return is improving ROE, likely through a pref-skewed buyback or cancellation program.
If Samsung announces a value-up plan during the Bank of Korea’s rate cuts, local traders expect the 1P discount to reverse, targeting October-November for position entry.

Yuanta/P-Shares Taiwan Div+ ETF Rebalance Preview: Nuvoton Deletion & Positioning

Nuvoton Technology (4919 TT) should be deleted from the Yuanta/P-Shares Taiwan Dividend Plus ETF in September and that will trigger selling of over 4 days of ADV.
Nuvoton Technology (4919 TT) has underperformed most of its peers since the start of the calendar year and shorts have started to increase in the stock.
Positioning appears light and the recent deletion from an index has increased the real float of the stock. Recent semiconductor weakness could further pressure the stock.

Taiwan Dual-Listings Monitor: TSMC and ASE Premiums Break Down Again; ASE Spread Near 1-Year Lows

TSMC: Premium Breaks Back Down to +8.3%; 5-15% Could Now Be the Key Range
UMC: -2.2% Discount; Good Level to Go Long the Premium
ASE: Premium Breaks Down Again, Now Only +1.5%; Consider Going Long

Black Sesame IPO – Paying Up-Front for Its Monetization Potential

By Clarence Chu

Black Sesame Technologies (BLACKSES HK) is looking to raise US$143m in its Hong Kong IPO.
Black Sesame International Holdings (BSIH) is an automotive-grade computing SoC and SoC-based intelligent vehicle solution provider.
In our earlier notes, we looked at the past performance of the deal. In this note, we discuss peers and share our thoughts on valuation.

Taiwan Tech Weekly: Tough Start for Nvidia and Apple Supply Chains; Asustek, Novatek Results Ahead

Tough Start to the Week — Negative News for Nvidia and Apple Supply Chains
Key Events: Asustek & Novatek Results; Mediatek & TSMC July Sales Data
UMC Signals Non-AI Industry Inventory Correction Through 2024E; Why Intel Is Increasingly Important

UMC Signals Non-AI Industry Inventory Correction Through 2024E; Why Intel Is Increasingly Important

UMC’s latest results indicate a mild recovery for consumer, communications, and computing industries. UMC’s capacity utilization to continue improving but industry inventory correction could last until end-2024E.
UMC maintained 2024E capex guidance however it’s increasingly clear UMC can’t keep up the capex arms race alone. Hence we see UMC & Intel becoming closer and closer partners.
We continue to view UMC as a long-term accumulate, and rate the stock as Structural Long, this however requires a longer than usual multi-year holding period.

Microsoft’s Strong Q2: Solid Revenue and Earnings Growth Despite Cloud Concerns

By Uttkarsh Kohli

Q2 revenue of $64.73 billion and EPS of $2.95 surpassed expectations of $64.39 billion and $2.93, respectively. Intelligent Cloud revenue reached $28.52 billion but below analysts’ $28.68 billion expectation.
Activision acquisition boosted revenue by 3 points but cut EPS by $0.06 due to lower operating income.
While Microsoft’s core cloud business slowed, it increased capex significantly. Uncertain GenAI monetization might shift wealth from Microsoft shareholders to Nvidia shareholders.

Intel’s Market Meltdown: Analyzing the Struggles of a Semiconductor Leader

By Baptista Research

In a shocking turn of events, Intel Corporation, a long-standing leader in the semiconductor industry, witnessed one of its worst days on Wall Street, losing over a quarter of its market value in a single trading session.
The drastic drop followed the company’s announcement of a $1.6 billion net loss for the second quarter of 2024, a stark contrast to the $1.47 billion profit reported in the same period the previous year.
Intel’s share price plummeted by 27%, marking its steepest decline since 1974, as the company grappled with disappointing earnings, a bleak forecast, and a massive restructuring plan.

Daiwabo Holdings (3107 JP): Q1 FY03/25 flash update

By Shared Research

Revenue for FY03/22 was JPY227.8bn (+8.8% YoY), with IT Infrastructure Distribution segment revenue rising 17.4% YoY.
Operating profit for FY03/22 was JPY4.3bn (-13.4% YoY), with a temporary drop in profit margin due to competition.
Daiwabo Holdings’ FY03/25 forecast includes revenue of JPY1.0tn (+4.6% YoY) and net income of JPY21.8bn (+409.0% YoY).

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Aug 05

Daily Brief Financials: MS&AD Insurance, NIFTY Index and more

By Smartkarma Daily Briefs | Daily Briefs, Financials

In today’s briefing:

Japan CorpGovReport Details: TSE “Mgmt Conscious of Capital Cost/Stock Price” Details (Aug24)
EQD / NSE Vol Update / Coffee Boost for Sleepy Vol Mkts as Risk Sentiment Sours into the Weekend

Japan CorpGovReport Details: TSE “Mgmt Conscious of Capital Cost/Stock Price” Details (Aug24)

July saw 825 new Corporate Governance Reports filed and 8 new “Mgmt Conscious of Capital Cost/Stock Price” policies filed. June saw 1,673 and 5, respectively. That’s 2500 cos.
We created a tool show every report, provide links to every document, and now a new diff file tool. Put in a name, see the difference between the Old/New Reports.
We hope this tool will help. It is designed to be a shelf reference. We update the tool once a month, a couple of weeks ahead of the TSE.

EQD / NSE Vol Update / Coffee Boost for Sleepy Vol Mkts as Risk Sentiment Sours into the Weekend

By Sankalp Singh

Implied Volatilities (IVs) fell post-FOMC, but reversed course as market sentiment worsened late -week. IV-jump expected as Indian markets catch up to Friday’s U.S. price action
Vol-Regime Model still in a “High & Down” vol state. Will switch if large IV change on the open. Short Vega & Risk-Reversal positions will need to be reevaluated.
Low PCR, OI call bias & Skew compression: All point to unguarded downside in Nifty50. Next stop 24000.

💡 Before it’s here, it’s on Smartkarma

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

✓ Unlimited Research Summaries
✓ Personalised Alerts
✓ Custom Watchlists
✓ Company Data and News
✓ Events & Webinars

Aug 05

Daily Brief Consumer: Sumitomo Forestry, KT&G Corporation, Ola Electric, BrainBees Solutions, Archer Daniels Midland Co, Dairy Farm International Holdings, TSE Tokyo Price Index TOPIX, New Wave Group Ab, Ferrari N.V., Corn Active Contract and more

By Smartkarma Daily Briefs | Consumer, Daily Briefs

In today’s briefing:

Sumitomo Forestry (1911 JP): Selloff Provides Entry for Potential Index Inclusion
KT&G: A Strong Candidate for Outperformance Amid Increased Signs of Market Fears
ECM Weekly (5th Aug 2024) – Ola Electric, Brainbees, WeRide, Sanil, CR Beverages, Carote, Fortescue
Brainbees Solutions (FirstCry) IPO: Valuation Insights
[Q2 Earnings Review] ADM Falls Short of Expectations on Weak Results in AS&O & Nutrition Businesses
DFI Retail (DFI SP): 1H2024.Pivoting to Profitable Growth with RTE Foods
Sustainability Has Many Companies Confused About Linking Financial and Non-Financial Information
New Wave – Vaulting to Glory?
Ferrari (RACE US) Q2 2024: Margin Uptrend Continues, No Demand Weakness
[CB 30/2024] Corn & Soy Tumble on Improving Weather; Chinese Demand Likely to Support Soy

Sumitomo Forestry (1911 JP): Selloff Provides Entry for Potential Index Inclusion

Sumitomo Forestry (1911 JP) is a potential inclusion to a global index at the August rebalance. If added, passive trackers will need to buy over 6x ADV.
Sumitomo Forestry (1911 JP) has traded lower on risk-off sentiment and further downside provides an entry point that could pay off if the stock is added to the index.
Sumitomo Forestry (1911 JP) has outperformed its peers but trades at similar valuations to some stocks. A long/short trade could protect the downside.

KT&G: A Strong Candidate for Outperformance Amid Increased Signs of Market Fears

By Douglas Kim

In this insight, we provide an update of KT&G Corporation (033780 KS) which is a strong candidate for outperformance amid increased signs of market fears.
We continue to believe that there is an increasing probability of cigarette price hikes in Korea in 2H24. Last time that KT&G hiked its cigarette prices was in January 2015.
The company’s shareholder return policy is to provide cash dividends of 1.8 trillion won and share buyback/cancellations worth 1 trillion won from 2024 to 2026.

ECM Weekly (5th Aug 2024) – Ola Electric, Brainbees, WeRide, Sanil, CR Beverages, Carote, Fortescue

By Sumeet Singh

Aequitas Research’s weekly update on the IPOs, placements, lockup expiry and other ECM linked events that were covered by the team over the past week.
On the IPO front, the coming week will see see the listing of Akums Drugs while books will be open for Ola Electric, BrainBees Solutions and Black Sesame Technologies.
On the placement front, there were two large deals in Fortescue Metals (FMG AU) and Adani Transmission (ADANIT IN).

Brainbees Solutions (FirstCry) IPO: Valuation Insights

BrainBees Solutions (0172540D IN), India’s largest multi-channel retailing platform for mothers’, babies’ and kids’ products, will launch an IPO to raise up to US$500 million.
We previously discussed the IPO in Brainbees Solutions (FirstCry) IPO: The Bull Case, Brainbees Solutions (FirstCry) IPO: The Bear Case and Brainbees Solutions (FirstCry) IPO: The Investment Case.
Our valuation analysis suggests that the IPO price range of Rs440-465 per share is attractive. Therefore, we would participate in the IPO.

[Q2 Earnings Review] ADM Falls Short of Expectations on Weak Results in AS&O & Nutrition Businesses

ADM’s Q2 results underperformed analyst expectations with both EPS and revenue missing analyst estimates.
Operating profit declined for Ag Services & Oilseeds (ASO) and Nutrition, while Carbohydrate Solutions saw an uptick, driven by margin and volume expansion in Starches and Sweeteners.
ADM expects weak Q3 for AS&O and Carbohydrate Solutions, with improvements expected in H2 2024. Nutrition is expected to perform strongly due to cost efficiency and volume expansion.

DFI Retail (DFI SP): 1H2024.Pivoting to Profitable Growth with RTE Foods

By Devi Subhakesan

Strong recovery in 1H2024 profit growth YoY was driven by margin improvements in the food and convenience segments.
Double-Digit sales growth in the Ready-to-Eat (RTE) foods segment boosted margins, offsetting reduced cigarette volumes from last year’s tax increases in Hong Kong.
While weak consumer confidence in North Asia impacted sales, good growth in the expanding Southeast Asia business provided a positive offset.

Sustainability Has Many Companies Confused About Linking Financial and Non-Financial Information

By Aki Matsumoto

Sustainable management should be considered in the sustainable expansion of corporate value, including shareholders’ interest, and non-financial information should provide direction based on information that isn’t feasible, including financial information.
Starting with appointing people who are diverse in nationality and gender to the board of directors will lead to discussing management issues with diverse opinions.
Significant differences exist between those companies that have improved their efforts to improve board practices and capital profitability and achieved results, and those that have only formally put board practices.

New Wave – Vaulting to Glory?

By Investment Talk

After a warm-up week of swimming, rowing and archery, the Olympics now kicks into top gear with the athletics.
Among the hottest of track and field gold medal prospects is Armand ‘Mondo’ Duplantis of Sweden.
On Monday evening, the 24-year-old will contest the men’s pole vault final as the defending champion from Tokyo.

Ferrari (RACE US) Q2 2024: Margin Uptrend Continues, No Demand Weakness

By Sameer Taneja

Ferrari N.V. (RACE US) reported another strong Q2 2024, with revenues up 16% and profits up 25% YoY. EBITDA margins expanded to 39% due to pricing/personalization(20%).
The company raised its guidance on revenue/EPS by 2.3%/5%, flagging Q3 would be weak as it transitions to its new ERP, but we believe the company is being conservative.
Trading at 48.7x FY24e, the stock seems a tad expensive, but it’s up 28% YTD because of upgrades, which we believe will continue.

[CB 30/2024] Corn & Soy Tumble on Improving Weather; Chinese Demand Likely to Support Soy