Daily Briefs

The review period ends on 31 October, the changes should be announced on 29 November and will be effective after the close of trading on 13 December.
We forecast 4 potential changes for the index in December where there could be buying of 0.5-3x ADV in the adds and selling of between 0.5-1.3x ADV in the deletes.
The forecast adds have drifted lower versus the forecast deletes following the rally in the markets and the large ETF creations. That could reverse from now till review period end.

China Resources Beverage (2460 HK) IPO: Index Inclusions & Stock Connect in 2025

China Resources Beverage (CRB HK) is offering 347.8m shares in its IPO at a price range of HK$13.5-14.5/share. With the overallotment option, the IPO could raise up to HK$5.8bn (US$474m).
Cornerstone investors will take up nearly half 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 – that will also result in Stock Connect inclusion. The next index inclusion will take place in June.

China Consumption Weekly (14 Oct 2024): Tencent, Lalatech, Seres, BYD, NIO, Trip.com

Tencent repurchased 250 million shares and the market has not paid any attention to its significant margin improvements.
Lalatech updated its IPO file for 1H24, in which both GTV and revenue were up by 18% YoY.
Seres expects its revenue will grow by 518% YoY to 559% YoY for 3Q24.

HK Connect SOUTHBOUND Flows (To 14 Oct 2024); A HUGE 5td; Net Flows Strong but BABA Dominant

SOUTHBOUND was a net buyer the last five trading days (from before GW to 14 Oct). HUGE gross flows. Decent net flows. Very big in few names (BABA included).
The Guotai Junnan/Haitong merger pushed H-share brokers hard, but SB wasn’t buying. They bought Alibaba Group Holding (9988 HK), Semiconductor Manufacturing International Corp (SMIC) (981 HK), Xiaomi Corp (1810 HK).
Things may settle down a little bit as the fiscal policy announcements are out of the way, but I expect the trend is still your friend (until it bends).

Anta Sports (2020 HK): Healthy in Financials, Leader in Market, But High in Price

Anta top line outperformed competitors, both overseas and domestic brands, in China.
We believe all margins will be stable and EPS will rise by 41% in 2024.
However, we believe Anta is overvalued at the current price.

A/H Premium Tracker (To 14 Oct 2024): AH Premia Drop Sharply; High Premia May Contract More

A big “week” of 5 trading days from 30 Sep to 14 Oct, inclusive. Average AH premia dropped a lot. Liquid AH premia dropped less. Brokers are big winners.
Average AH 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.
Sharply differing onshore and offshore opinion regarding the nature and vibe of Chinese stimulus will lead to interesting dispersion. Identify the trend, then market make around it.

Anhui Conch (914 HK): Sharp Price Hikes Boost Our Confidence in 4Q Turnaround

By Eric Chen

Recent significant clinker price hikes in Yangtze river region boost our confidence that 4Q will likely see the company’s earnings double Y/Y, ending 14 consecutive quarters of decline since 2Q21.
Beijing’s bazooka stimulus package to lift the property market and revive economy also improve industry outlook in 2025.
Consensus has been slow to adjust for the changes in industry dynamics. Our 2024 earnings is now 15% above consensus. We expect upward earnings revision will support P/B expansion.

CIMC Enric (3899 HK): Mispriced, with Good Upside

By Osbert Tang, CFA

CIMC Enric Holdings (3899 HK) has underperformed benchmark Indices YTD, and its business segments are undervalued based on their earnings performance.
The clean energy segment is only valued at HK$3.4bn, or 24% of the stock’s total. However, it is the largest earnings generator in 1H24, contributing 60% of 1H24 profit.
CLPT’s earnings contribution is 22% more than CIMC Safeway’s, but it is only valued at 27% of the latter, equivalent to an undemanding 9.8x annualised PER.

Quiddity Leaderboard SSE50/180 Dec 24: Multiple Changes to Expectations; US$2.2bn One-Way

SSE 50 and SSE 180, respectively, aim to represent the performance of the 50 and 180 largest and most liquid A-share stocks listed on the Shanghai Stock Exchange.
In this insight, we take a look at the names leading the race to become ADDs and DELs during the December 2024 index rebal event.
While our SSE 50 expected ADDs/DELs list remains unchanged, there have been multiple changes to our SSE 180 expected ADDs/DELs list.

Quick Take on J&T Global Express Q324: Volume Growth in All Segments Slowed Dramatically

By Daniel Hellberg

Last week J&T Global Express reported Q324 express parcel volume by segment
Volume growth in all segments slowed dramatically compared to Q224
Without needed context, we believe the numbers undermine J&T growth story

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Oct 15

Daily Brief Japan: Mazda Motor, Neos Corp and more

By Smartkarma Daily Briefs | Daily Briefs, Japan

In today’s briefing:

Unloved Japan Round-Up
Neos Corp (3627 JP): 1H FY02/25 flash update

Unloved Japan Round-Up

By Michael Allen

Below is a sample of the unloved Japanese stocks we focus on at Azabu Research, with key valuation metrics and latest news.
The average PBR in this week’s list is 0.5x and the average P/E is 5.9x.
Most of the stocks in this week’s round up are related to either the auto supply chain or the electric power grid.

Neos Corp (3627 JP): 1H FY02/25 flash update

By Shared Research

In 1H FY02/25, TECMIRA reported revenue of JPY5.6bn, a 34.4% YoY increase, with a net loss of JPY67mn.
IoT & Devices segment revenue rose 13.9% YoY, with segment profit increasing 12.7% YoY due to improved production efficiency.
AI & Cloud segment profit surged 594.4% YoY, driven by AI chatbot productization and infrastructure migration to Microsoft Azure.

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Oct 15

Most Read: Fuji Soft Inc, KraneShares CSI China Internet ETF, CAR Group , Korea Zinc, Hyundai Motor India , QuantumPharm, Hanjin KAL Corp, Intouch Holdings and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

Bain Bids Bigger, Goes Hard on Fuji Soft (9749); I’ve Got 🍿🍿🍿
Korea Zinc Raises Share Buyback and Tender Offer Price to 890,000 Won
Hyundai Motor India: Index Entry Timing for India’s Biggest IPO
China ETF Inflows & Implications: YTD Inflows Nearing US$150bn
S&P/ASX Index Rebalance Preview (Dec 2024): Big Impact as Shorts Ramp Up
MBK’s Korea Zinc & Young Poong Precision Tender Results Officially Out
Hyundai Motor India IPO: Valuation Insights
Quiddity Leaderboard Hang Seng Biotech Dec 24: Two Changes Expected + Capping Flows
Korea Value-Up ETFs: Latest Market Info on Initial AUM Setup & Resulting Passive Impacts
Intouch? Or Perhaps “Out Of” Touch

Bain Bids Bigger, Goes Hard on Fuji Soft (9749); I’ve Got 🍿🍿🍿

As they had announced was their intention, Bain has made a binding offer for Fuji Soft Inc (9749 JP), bidding ¥9,450 against KKR’s ¥8,800. They aim to launch late October.
There is no minimum and no maximum. The Founding Nozawa family had thrown their lot in with Bain not KKR and that 18.5% is tied up.
There are conditions, and those are ALL-important. And I expect we see in the next week or so how coercive KKR’s “non-coercive” scheme change was. I’ve got 🍿🍿🍿.

Korea Zinc Raises Share Buyback and Tender Offer Price to 890,000 Won

By Douglas Kim

Korea Zinc raised the share buyback and tender offer price from 830,000 won to 890,000 won. Korea Zinc’s share price closed up by only 0.6% today to 794,000 won.
As a result, the amount of capital involved in this share buyback and tender offer would increase from 2.7 trillion won to 3.2 trillion won.
Despite higher share buyback/tender offer of Korea Zinc by Choi family, we believe that this fight for the control of Korea Zinc is increasingly in favor of MBK/Jang family.

Hyundai Motor India: Index Entry Timing for India’s Biggest IPO

Hyundai Motor India (1342Z IN) is looking to list on the exchanges by selling up to INR 279bn (US$3.3bn) of stock at a valuation of up to INR 1,593bn (US$19bn).
The anchor allocations will be completed early next week, and the stock is expected to start trading on 22 October.
The stock will not get Fast Entry to global indices. Inclusion at regular rebalances should take place in February and June next year.

China ETF Inflows & Implications: YTD Inflows Nearing US$150bn

Nearly US$140bn has flowed into mainland China listed ETFs year to date and there have been big creations in the last few weeks as stocks have surged.
97% of all inflows are in ETFs benchmarked to the CSI300, CSI1000, CSI500, SSE50, ChiNext and STAR50 indices. But over US$4bn has gone into other ETFs in the last week.
The large ETF inflows over the last few weeks has led to index rebalance strategies underperforming in China. But that should reverse from now to rebalance implementation.

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

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.

MBK’s Korea Zinc & Young Poong Precision Tender Results Officially Out

MBK officially disclosed that they scooped up 5.34% of the Korea Zinc (010130 KS) shares in the tender that wrapped up today.
MBK scored a partial win by securing more voting rights than Choi, with unexpected backing from foreign and local institutions, likely due to proration risk over legal issues.
Still, securing just 5.34% puts MBK in a tough position, requiring them to navigate minority shareholder votes while pushing hard on the legal front to block the buyback.

Hyundai Motor India IPO: Valuation Insights

By Arun George

Hyundai Motor India (1342Z IN), a subsidiary of Hyundai Motor (005385 KS), aims to raise up to US$3.3 billion at a valuation of US$19 billion.
We previously discussed the IPO in Hyundai Motor India IPO: The Bull Case, Hyundai Motor India IPO: The Bear Case and Hyundai Motor India IPO: The Investment Case.
Our valuation analysis suggests that the IPO price range of Rs1,865-1,960 per share is attractive. Therefore, we would participate in the IPO.

Quiddity Leaderboard Hang Seng Biotech Dec 24: Two Changes Expected + Capping Flows

The HS HK-Listed Biotech Index (“Hang Seng Biotech Index”) represents the 50 largest biotech companies listed in Hong Kong (HKEX).
In this insight, we take a look at the final rankings of potential ADDs/DELs and our capping flow expectations for the December 2024 index rebal event.
We expect two changes for the HSHKBIO index in December 2024.

Korea Value-Up ETFs: Latest Market Info on Initial AUM Setup & Resulting Passive Impacts

KRX will launch 12 ETFs tracking the Korea Value-Up Index on November 4—9 passive and 3 active—aiming for an initial AUM exceeding 1 trillion KRW.
KRX is pressuring ETF operators to reveal initial capital by November 4, with expectations to exceed 1 trillion KRW due to government pressure.
Early signs of position buildup are emerging, so it’s essential to monitor stocks with significant passive impact closely moving forward.

Intouch? Or Perhaps “Out Of” Touch

By David Blennerhassett

Intouch (INTUCH TB)‘s strange journey with Gulf Energy (GULF TB) continues. In April 2021, GULF made a surprising VTO for INTUCH. This past July, the two companies announced an amalgamation.
The merger was not fair to INTUCH shareholders, with an estimated earnings value destruction of ~26.5% (for FY24E). But that didn’t stop shareholders overwhelmingly approving the 3rd October EGM resolutions.
What now? The next step is the low-balled VTOs for Advanced Info Service (ADVANC TB) and Thaicom (THCOM TB). Then amalgamation. Then, arguably, the next unorthodox development will take place.

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Oct 15

Daily Brief Utilities: Consolidated Water Co Ltd. and more

By Smartkarma Daily Briefs | Daily Briefs, Utilities Sector

In today’s briefing:

Consolidated Water Co Inc (CWCO) – Monday, Jul 15, 2024

Consolidated Water Co Inc (CWCO) – Monday, Jul 15, 2024

CWCO is a utility company operating in the water infrastructure sector, providing resilience to its earnings
The company’s strong balance sheet, underestimated receivables, and potential for higher-than-expected earnings in 2025/26 make it undervalued compared to peers
With limited sell-side coverage and a market cap around $400 million, CWCO is underfollowed, offering room for growth potential in the evolving water infrastructure market

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

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Oct 15

Daily Brief TMT/Internet: Intouch Holdings, Taiwan Semiconductor (TSMC), Tencent, ARM Holdings, Super Micro Computer, Hon Hai Precision Industry, Shengyi Electronics, Unifiedpost Group, Microstrategy Inc Cl A, Neos Corp and more

By Smartkarma Daily Briefs | Daily Briefs, TMT/Internet

In today’s briefing:

Intouch? Or Perhaps “Out Of” Touch
How Big Is the AI Accelerator Market? AMD, Broadcom, Nvidia, SK Hynix, TSMC
China Consumption Weekly (14 Oct 2024): Tencent, Lalatech, Seres, BYD, NIO, Trip.com
Arm Holdings plc (ARM): The Tale Of Rising Royalty Rates & New Architecture Adoption! – Major Drivers
Super Micro Shipping Over 100,000 AI GPUs Each Quarter! What It Means for Investors
Tech Supply Chain Tracker (15-Oct-2024): Foxconn doubles down on Zhengzhou investments.
Quiddity Leaderboard STAR 50/100 Dec 24: Shocking Changes to Expectations After Wild Market Swings
Unifiedpost Group (EPR:UPG)
Microstrategy Inc (MSTR) – Monday, Jul 15, 2024
Neos Corp (3627 JP): 1H FY02/25 flash update

Intouch? Or Perhaps “Out Of” Touch

By David Blennerhassett

Intouch (INTUCH TB)‘s strange journey with Gulf Energy (GULF TB) continues. In April 2021, GULF made a surprising VTO for INTUCH. This past July, the two companies announced an amalgamation.
The merger was not fair to INTUCH shareholders, with an estimated earnings value destruction of ~26.5% (for FY24E). But that didn’t stop shareholders overwhelmingly approving the 3rd October EGM resolutions.
What now? The next step is the low-balled VTOs for Advanced Info Service (ADVANC TB) and Thaicom (THCOM TB). Then amalgamation. Then, arguably, the next unorthodox development will take place.

How Big Is the AI Accelerator Market? AMD, Broadcom, Nvidia, SK Hynix, TSMC

By Nicolas Baratte

Following AMD AI conference on 10 Oct, many question AMD’s estimate of the AI Accelerators market reaching US$500bn by 2028 (from $45bn in 2023).
AI Accelerators market value is increasing by 150% in 2024, reaching US$113bn. Based on TSMC CoWoS capacity, we think reasonable to expect 115% growth over 2025-26 or US$276bn in 2026.
TSMC makes all the chips. HBM is dominated by Hynix. Nvidia should remain the dominant vendor for years. AMD and Broadcom should grow faster than NVDA. Outsourcing: Alchip, Marvel, Mediatek.

China Consumption Weekly (14 Oct 2024): Tencent, Lalatech, Seres, BYD, NIO, Trip.com

Tencent repurchased 250 million shares and the market has not paid any attention to its significant margin improvements.
Lalatech updated its IPO file for 1H24, in which both GTV and revenue were up by 18% YoY.
Seres expects its revenue will grow by 518% YoY to 559% YoY for 3Q24.

Arm Holdings plc (ARM): The Tale Of Rising Royalty Rates & New Architecture Adoption! – Major Drivers

Arm Holdings plc recently reported its financial results for the first quarter of fiscal year 2025, showcasing a surge in revenue and solidifying its status as a key player in chip design, particularly with its focus on AI and CPU technology.
The company’s revenue hit $939 million, up 39% year-over-year, a testament to both burgeoning license and royalty streams.
Licensing revenue, often an indicator of future royalties, climbed by an impressive 72% due to increased demand for Arm’s technology across a multitude of applications including AI, data centers, and mobile devices.

Super Micro Shipping Over 100,000 AI GPUs Each Quarter! What It Means for Investors

In a major development that’s turning heads on Wall Street, Super Micro Computer (SMCI) announced it is now shipping over 100,000 GPUs per quarter, specifically targeting the surging artificial intelligence (AI) market.
This is a significant leap for the company as it seeks to capitalize on the growing demand for high-performance computing power required by AI training models and data-heavy applications.
With AI dominating conversations across industries, GPUs have become critical components in data centers, and Super Micro’s ability to ship these units at scale, coupled with its competitive pricing, could potentially generate billions in revenue.

Tech Supply Chain Tracker (15-Oct-2024): Foxconn doubles down on Zhengzhou investments.

By Tech Supply Chain Tracker

Foxconn increases investments in Zhengzhou, shifting focus to electric vehicles from phones.
Home solar energy storage options becoming more affordable with incentives.
Luxgen’s N7 LR deliveries to start in November, Hikvision’s RD department facing layoffs.

Quiddity Leaderboard STAR 50/100 Dec 24: Shocking Changes to Expectations After Wild Market Swings

STAR 50 index is a tech-focused, blue-chip index in Mainland China which tracks the top 50 largest and most liquid names in the STAR market of the Shanghai Stock Exchange.
STAR 100 index tracks the next 100 names (51st-150th ranks) and it represents the mid-cap segment of the STAR market.
In this insight, we take a look at the potential ADDs/DELs for the STAR 50 and STAR 100 indices for the December 2024 index rebal event.

Unifiedpost Group (EPR:UPG)

By Hurdle Rate

Continuing the trend of having a noticeable focus on e-invoicing, I can present the Unifiedpost Group (‘UPG’) business.
UPG founded in 2001 by existing CEO, Hans Leybaert (12% shareholder) and has scaled up over the years to what is now a business with over 1,000 employees operating in over 30 countries.
Its products are predominately focused on e-invoicing (80% of revenue) with a base subscription revenue in order to access the platform and transactional component on top which allows the group to benefit from volume through a usage-based fee.

Microstrategy Inc (MSTR) – Monday, Jul 15, 2024

MicroStrategy, founded by Michael Saylor, has gained attention for its large investment in Bitcoin
The company’s core business has shown stagnant financial performance with flat revenue and decreasing profits
Some analysts view MicroStrategy as a speculative bubble, but caution is necessary when taking short positions due to unpredictable market behavior

Neos Corp (3627 JP): 1H FY02/25 flash update

By Shared Research

In 1H FY02/25, TECMIRA reported revenue of JPY5.6bn, a 34.4% YoY increase, with a net loss of JPY67mn.
IoT & Devices segment revenue rose 13.9% YoY, with segment profit increasing 12.7% YoY due to improved production efficiency.
AI & Cloud segment profit surged 594.4% YoY, driven by AI chatbot productization and infrastructure migration to Microsoft Azure.

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Oct 15

Daily Brief Industrials: Hanjin KAL Corp, Evergreen Marine Corp, Mazda Motor, CIMC Enric Holdings, J&T Global Express , GXO Logistics, Sai Gon Cargo Service , Triumph Group, Trimas Corp, Ashtead Group and more

By Smartkarma Daily Briefs | Daily Briefs, Industrials

In today’s briefing:

Korea Value-Up ETFs: Latest Market Info on Initial AUM Setup & Resulting Passive Impacts
Yuanta/P-Shares Taiwan Div+ ETF Rebalance Preview: Big Impact and US$3bn Round-Trip Trade
Unloved Japan Round-Up
CIMC Enric (3899 HK): Mispriced, with Good Upside
Quick Take on J&T Global Express Q324: Volume Growth in All Segments Slowed Dramatically
GXO Logistics Exploring A Sale! A Hidden Gem for Strategic Buyers and Financial Sponsors?
Saigon Cargo Services (SCS VN): Q3 2024 Preview Strong As Ever
Triumph Group in Play for Potential Buyout – What’s Driving the Interest?
Why TriMas Could Be A Perfect Target For AIP: 4 Key Reasons Behind the Takeover Speculation!
Ashtead Group Plc (ASHTY) – Monday, Jul 15, 2024

Korea Value-Up ETFs: Latest Market Info on Initial AUM Setup & Resulting Passive Impacts

KRX will launch 12 ETFs tracking the Korea Value-Up Index on November 4—9 passive and 3 active—aiming for an initial AUM exceeding 1 trillion KRW.
KRX is pressuring ETF operators to reveal initial capital by November 4, with expectations to exceed 1 trillion KRW due to government pressure.
Early signs of position buildup are emerging, so it’s essential to monitor stocks with significant passive impact closely moving forward.

Yuanta/P-Shares Taiwan Div+ ETF Rebalance Preview: Big Impact and US$3bn Round-Trip Trade

Using data from the close on 11 October, there could be 6 adds and 5 deletes for the Yuanta/P-Shares Taiwan Dividend Plus ETF in December.
There will also be capping and funding flows that will lead to a one-way turnover of 15% and a one-way trade of TWD 49bn (US$1.52bn)
Shorts have been building up in some of the forecast deletes and in a couple of the forecast adds as well.

Unloved Japan Round-Up

By Michael Allen

Below is a sample of the unloved Japanese stocks we focus on at Azabu Research, with key valuation metrics and latest news.
The average PBR in this week’s list is 0.5x and the average P/E is 5.9x.
Most of the stocks in this week’s round up are related to either the auto supply chain or the electric power grid.

CIMC Enric (3899 HK): Mispriced, with Good Upside

By Osbert Tang, CFA

CIMC Enric Holdings (3899 HK) has underperformed benchmark Indices YTD, and its business segments are undervalued based on their earnings performance.
The clean energy segment is only valued at HK$3.4bn, or 24% of the stock’s total. However, it is the largest earnings generator in 1H24, contributing 60% of 1H24 profit.
CLPT’s earnings contribution is 22% more than CIMC Safeway’s, but it is only valued at 27% of the latter, equivalent to an undemanding 9.8x annualised PER.

Quick Take on J&T Global Express Q324: Volume Growth in All Segments Slowed Dramatically

By Daniel Hellberg

Last week J&T Global Express reported Q324 express parcel volume by segment
Volume growth in all segments slowed dramatically compared to Q224
Without needed context, we believe the numbers undermine J&T growth story

GXO Logistics Exploring A Sale! A Hidden Gem for Strategic Buyers and Financial Sponsors?

GXO Logistics, a leading global provider of supply chain solutions, has been in the news recently for exploring strategic options including a possible sale.
The company has positioned itself well as a potential acquisition target.
Since its spinoff from XPO Inc. in 2021, GXO has experienced steady growth, signing $270 million of new business in the second quarter and expanding its pipeline to a record $2.3 billion.

Saigon Cargo Services (SCS VN): Q3 2024 Preview Strong As Ever

By Sameer Taneja

Sai Gon Cargo Service (SCS VN) reported strong September numbers, with cargo volumes increasing 40% YoY.
With the tariff hikes in effect, we expect revenues/profits to rise 45% YoY/40% YoY in Q3 2024,
Trading at 10.7x PE FY24 and a 9% dividend yield, we cover catalysts such as the Long Thanh airport bidding and the corporate tax change to 20% in 2025.

Triumph Group in Play for Potential Buyout – What’s Driving the Interest?

Triumph Group’s first quarter fiscal year 2025 results offer a multifaceted view of the company’s current strategic and financial positioning.
On the one hand, Triumph showcased several positive developments, such as year over-year sales growth led by strong aftermarket demand and successful debt reduction efforts.
Additionally, the company received credit rating upgrades from major agencies, Moody’s and S&P, signaling an improved financial outlook to investors and stakeholders.

Why TriMas Could Be A Perfect Target For AIP: 4 Key Reasons Behind the Takeover Speculation!

TriMas Corporation’s second-quarter 2024 earnings report presents a mixed performance across its business segments.
The company experienced moderate revenue growth compared to the previous year but faced significant challenges in certain areas.
The highlights of the earnings reveal both encouraging signs of recovery and concerns around persistent operational difficulties.

Ashtead Group Plc (ASHTY) – Monday, Jul 15, 2024

Ashtead, known as Sunbelt, is the second largest equipment rental company in the US
Despite cyclical concerns and minor operational issues, it is seen as a strong investment opportunity due to organic growth potential
Sunbelt has a diverse fleet of equipment and focuses on non-residential construction, industrial clients, and maintenance operations, improving efficiency for customers.

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Oct 15

Daily Brief Health Care: Inner Mongolia Furui Medical Scie, Galera Therapeutics , Legend Biotech Corp, Windtree Therapeutics , Neurocrine Biosciences, Seres Therapeutics, Stevanato Group SpA and more

By Smartkarma Daily Briefs | Daily Briefs, Healthcare

In today’s briefing:

CSI Medical Service Index Rebalance Preview: Four Potential Changes in December
Galera Therapeutics Inc (GRTX) – Saturday, Jul 13, 2024
Legend Biotech (LEGN.US) Offer Update – Is the Deal Really Dead?
WINT: Lead Drug Candidates, Multiple Programs, Several Upcoming Expected Milestones
Neurocrine Biosciences: Recent Innovations & Strategic Commercial Preparations for Crinecerfont Driving Our Optimism! – Major Drivers
Why Seres Therapeutics Could Be Nestlé’s Next Big Acquisition Target?
Stevanato Group S.p.A.: What Is Their Market Outlook & How Are They Adapting To Customer and Regulatory Requirements? – Major Drivers

CSI Medical Service Index Rebalance Preview: Four Potential Changes in December

The review period ends on 31 October, the changes should be announced on 29 November and will be effective after the close of trading on 13 December.
We forecast 4 potential changes for the index in December where there could be buying of 0.5-3x ADV in the adds and selling of between 0.5-1.3x ADV in the deletes.
The forecast adds have drifted lower versus the forecast deletes following the rally in the markets and the large ETF creations. That could reverse from now till review period end.

Galera Therapeutics Inc (GRTX) – Saturday, Jul 13, 2024

Positive results from a Phase 3 clinical trial show that avasopasem reduces the severity of symptomatic oral mucositis (SOM) and decreases the need for opioid analgesics.
Galera Therapeutics plans to submit a New Drug Application (NDA) to the FDA based on these promising results.
There is potential for avasopasem to become a new standard of care for patients receiving radiation therapy for head and neck cancer.

Legend Biotech (LEGN.US) Offer Update – Is the Deal Really Dead?

By Xinyao (Criss) Wang

We do not want to make a premature conclusion about this acquisition too early. For both Legend Bio and Genscript, this acquisition is worth considering, given the geopolitical risks.
There could be difference in expectations between buyers and sellers regarding the acquisition price. For fear of losing their jobs, Legend Bio’s management may not be happy about being acquired.
Considering the high uncertainty, our suggestion is that investors spend more time on the fundamentals of Legend Bio, rather than just betting on the success of the acquisition.

WINT: Lead Drug Candidates, Multiple Programs, Several Upcoming Expected Milestones

By Zacks Small Cap Research

Zacks Small-Cap Research Note for Windtree Therapeutics (WINT)

Neurocrine Biosciences: Recent Innovations & Strategic Commercial Preparations for Crinecerfont Driving Our Optimism! – Major Drivers

Neurocrine Biosciences, in its second quarter earnings call for 2024, highlighted significant achievements and strategic movements, setting a dynamic course for its future.
As CEO Kevin Gorman prepares to step down, the company reported a robust year with strong financial and clinical developments, though faced challenges typical of a biotech firm scaling its operations and research endeavors.
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.

Why Seres Therapeutics Could Be Nestlé’s Next Big Acquisition Target?

Seres Therapeutics, a leading microbiome therapeutics company, recently held its second-quarter 2024 earnings call.
The company is refining its strategic direction, focusing on live biotherapeutics, while simultaneously divesting its VOWST business to Nestlé Health Science.
This transaction, expected to close soon, involves the sale of the VOWST commercial rights for $155 million.

Stevanato Group S.p.A.: What Is Their Market Outlook & How Are They Adapting To Customer and Regulatory Requirements? – Major Drivers

Stevanato Group’s second quarter 2024 earnings results reflect a mixed performance characterized by robust revenue growth in the Biopharmaceutical and Diagnostic Solutions (BDS) segment, offset by challenges in the Engineering segment.
Challenges included project delays and higher costs primarily related to supply chain disruptions.
Stevanato Group provided comprehensive updates on operational initiatives aimed at optimizing production and improving efficiency across their locations, especially in Denmark and Italy.

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Oct 15

Daily Brief Industrials: Hanjin KAL Corp, Evergreen Marine Corp, Mazda Motor, CIMC Enric Holdings, J&T Global Express , GXO Logistics, Sai Gon Cargo Service , Triumph Group, Trimas Corp, Ashtead Group and more

By Smartkarma Daily Briefs | Daily Briefs, Industrials

In today’s briefing:

Korea Value-Up ETFs: Latest Market Info on Initial AUM Setup & Resulting Passive Impacts
Yuanta/P-Shares Taiwan Div+ ETF Rebalance Preview: Big Impact and US$3bn Round-Trip Trade
Unloved Japan Round-Up
CIMC Enric (3899 HK): Mispriced, with Good Upside
Quick Take on J&T Global Express Q324: Volume Growth in All Segments Slowed Dramatically
GXO Logistics Exploring A Sale! A Hidden Gem for Strategic Buyers and Financial Sponsors?
Saigon Cargo Services (SCS VN): Q3 2024 Preview Strong As Ever
Triumph Group in Play for Potential Buyout – What’s Driving the Interest?
Why TriMas Could Be A Perfect Target For AIP: 4 Key Reasons Behind the Takeover Speculation!
Ashtead Group Plc (ASHTY) – Monday, Jul 15, 2024

Korea Value-Up ETFs: Latest Market Info on Initial AUM Setup & Resulting Passive Impacts

KRX will launch 12 ETFs tracking the Korea Value-Up Index on November 4—9 passive and 3 active—aiming for an initial AUM exceeding 1 trillion KRW.
KRX is pressuring ETF operators to reveal initial capital by November 4, with expectations to exceed 1 trillion KRW due to government pressure.
Early signs of position buildup are emerging, so it’s essential to monitor stocks with significant passive impact closely moving forward.

Yuanta/P-Shares Taiwan Div+ ETF Rebalance Preview: Big Impact and US$3bn Round-Trip Trade

Using data from the close on 11 October, there could be 6 adds and 5 deletes for the Yuanta/P-Shares Taiwan Dividend Plus ETF in December.
There will also be capping and funding flows that will lead to a one-way turnover of 15% and a one-way trade of TWD 49bn (US$1.52bn)
Shorts have been building up in some of the forecast deletes and in a couple of the forecast adds as well.

Unloved Japan Round-Up

By Michael Allen

Below is a sample of the unloved Japanese stocks we focus on at Azabu Research, with key valuation metrics and latest news.
The average PBR in this week’s list is 0.5x and the average P/E is 5.9x.
Most of the stocks in this week’s round up are related to either the auto supply chain or the electric power grid.

CIMC Enric (3899 HK): Mispriced, with Good Upside

By Osbert Tang, CFA

CIMC Enric Holdings (3899 HK) has underperformed benchmark Indices YTD, and its business segments are undervalued based on their earnings performance.
The clean energy segment is only valued at HK$3.4bn, or 24% of the stock’s total. However, it is the largest earnings generator in 1H24, contributing 60% of 1H24 profit.
CLPT’s earnings contribution is 22% more than CIMC Safeway’s, but it is only valued at 27% of the latter, equivalent to an undemanding 9.8x annualised PER.

Quick Take on J&T Global Express Q324: Volume Growth in All Segments Slowed Dramatically

By Daniel Hellberg

Last week J&T Global Express reported Q324 express parcel volume by segment
Volume growth in all segments slowed dramatically compared to Q224
Without needed context, we believe the numbers undermine J&T growth story

GXO Logistics Exploring A Sale! A Hidden Gem for Strategic Buyers and Financial Sponsors?

GXO Logistics, a leading global provider of supply chain solutions, has been in the news recently for exploring strategic options including a possible sale.
The company has positioned itself well as a potential acquisition target.
Since its spinoff from XPO Inc. in 2021, GXO has experienced steady growth, signing $270 million of new business in the second quarter and expanding its pipeline to a record $2.3 billion.

Saigon Cargo Services (SCS VN): Q3 2024 Preview Strong As Ever

By Sameer Taneja

Sai Gon Cargo Service (SCS VN) reported strong September numbers, with cargo volumes increasing 40% YoY.
With the tariff hikes in effect, we expect revenues/profits to rise 45% YoY/40% YoY in Q3 2024,
Trading at 10.7x PE FY24 and a 9% dividend yield, we cover catalysts such as the Long Thanh airport bidding and the corporate tax change to 20% in 2025.

Triumph Group in Play for Potential Buyout – What’s Driving the Interest?

Triumph Group’s first quarter fiscal year 2025 results offer a multifaceted view of the company’s current strategic and financial positioning.
On the one hand, Triumph showcased several positive developments, such as year over-year sales growth led by strong aftermarket demand and successful debt reduction efforts.
Additionally, the company received credit rating upgrades from major agencies, Moody’s and S&P, signaling an improved financial outlook to investors and stakeholders.

Why TriMas Could Be A Perfect Target For AIP: 4 Key Reasons Behind the Takeover Speculation!

TriMas Corporation’s second-quarter 2024 earnings report presents a mixed performance across its business segments.
The company experienced moderate revenue growth compared to the previous year but faced significant challenges in certain areas.
The highlights of the earnings reveal both encouraging signs of recovery and concerns around persistent operational difficulties.

Ashtead Group Plc (ASHTY) – Monday, Jul 15, 2024

Ashtead, known as Sunbelt, is the second largest equipment rental company in the US
Despite cyclical concerns and minor operational issues, it is seen as a strong investment opportunity due to organic growth potential
Sunbelt has a diverse fleet of equipment and focuses on non-residential construction, industrial clients, and maintenance operations, improving efficiency for customers.

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Oct 15

Daily Brief Energy/Materials: Korea Zinc, Copper, Welspun Corp, Dyna Mac Holdings, Chc Resources, Anhui Conch Cement, SGX Rubber Future TSR20, Valvoline , Iron Ore, Silver and more

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

In today’s briefing:

MBK’s Korea Zinc & Young Poong Precision Tender Results Officially Out
What China’s trajectory mean for commodities (Huw McKay)
The Beat Ideas: Welspun Corp- Growth, Capex, Acquisition & Revival of Bankrupt Companies
Dyna-Mac (DMHL SP): No Alternative As Hanwha Group Bumps
WisdomTree Oct 24 Emerging Market Rebalance: Top Net Buys and Sells Across DGS, SOE & DEM
Anhui Conch (914 HK): Sharp Price Hikes Boost Our Confidence in 4Q Turnaround
Malaysia Raring To Cross RM30 Bn In Rubber And Products Exports In 2024
Valvoline Inc.: Dealing With Challenges of Maintaining Service Quality During Rapid Expansion & Other Significant Risks! – Major Drivers
[IO Technicals Weekly 2024/41] Iron Ore Prices Drop Amid Disappointing Stimulus Signals
Silver Soars Amid China’s Stimulus and Investment Demand

MBK’s Korea Zinc & Young Poong Precision Tender Results Officially Out

MBK officially disclosed that they scooped up 5.34% of the Korea Zinc (010130 KS) shares in the tender that wrapped up today.
MBK scored a partial win by securing more voting rights than Choi, with unexpected backing from foreign and local institutions, likely due to proration risk over legal issues.
Still, securing just 5.34% puts MBK in a tough position, requiring them to navigate minority shareholder votes while pushing hard on the legal front to block the buyback.

What China’s trajectory mean for commodities (Huw McKay)

By Money of Mine

Hugh Mackay provides insights into the future of iron ore, copper, and steel dynamics
China’s recent stimulus announcement and its impact on global commodity markets
Challenges faced by Chinese authorities in addressing deflation and household sector confidence.

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

The Beat Ideas: Welspun Corp- Growth, Capex, Acquisition & Revival of Bankrupt Companies

By Sudarshan Bhandari

Welspun Corp (WLCO IN) expanded from just SAW pipe company to DI Pipe, TMT Bars, Building solutions and PVC Pipes as well.
Company is known for reviving bankrupt companies, On the path to revive Sintex and ABG Shipyard.
high growth from US, Saudi and India driving the growth with capex

Dyna-Mac (DMHL SP): No Alternative As Hanwha Group Bumps

By David Blennerhassett

On the 11th September, Hanwha Ocean (042660 KS) and Hanwha Aerospace (012450 KS), collectively holding 25.36%, made a S$0.60/share cash Offer for shares not owned, conditional on a 50% acceptance.
The transaction stalled on the 24th September, when the estate of Dyna-Mac’s founding shareholder, Desmond Lim Tze Jong (holding ~35% currently) reckoned the Offer “does not adequately reflect” Dyna-Mac’s value.
Hanwha Group has now bumped terms by 11.67% to S$0.67/share, best & final. That’s a 35.4% premium to undisturbed, and a decade high. No word, yet, from the Lim estate.

WisdomTree Oct 24 Emerging Market Rebalance: Top Net Buys and Sells Across DGS, SOE & DEM

By Charlotte van Tiddens, CFA

In this short insight, we include our flow estimates for all additions and deletions taking place in the range of WisdomTree EM Funds at the rebalance this Wednesday (16 October).
We show the top 40 buys and sells across DEM, XSOE and DGS.
The top buys include Chc Resources (9930 TT) & Uchi Technologies (UCHI MK). The top sells include Impack Pratama Industri Tbk (IMPC IJ) and Hap Seng Consolidated (HAP MK).

Anhui Conch (914 HK): Sharp Price Hikes Boost Our Confidence in 4Q Turnaround

By Eric Chen

Recent significant clinker price hikes in Yangtze river region boost our confidence that 4Q will likely see the company’s earnings double Y/Y, ending 14 consecutive quarters of decline since 2Q21.
Beijing’s bazooka stimulus package to lift the property market and revive economy also improve industry outlook in 2025.
Consensus has been slow to adjust for the changes in industry dynamics. Our 2024 earnings is now 15% above consensus. We expect upward earnings revision will support P/B expansion.

Malaysia Raring To Cross RM30 Bn In Rubber And Products Exports In 2024

By Vinod Nedumudy

USTR clamping 50% duty on Chinese gloves from Jan comes in handy
Over 35% Malaysian rubber glove exports directed to the US
Malaysia’s rubber and products exports rise to RM15.5 bn in H1 2024

Valvoline Inc.: Dealing With Challenges of Maintaining Service Quality During Rapid Expansion & Other Significant Risks! – Major Drivers

Valvoline Inc. reported its third-quarter fiscal year 2024 results, featuring a strong performance with significant top-line growth and operational enhancements.
For this quarter, which ended June 30, 2024, the company reported a system-wide store sales growth of 12.4%, reaching $809 million.
This consistent growth across the company’s franchise and owned stores contributed to a same-store sales increase of 6.5%.

[IO Technicals Weekly 2024/41] Iron Ore Prices Drop Amid Disappointing Stimulus Signals

By Pranay Yadav

Iron ore prices dropped below $105/ton on 8 Oct after China’s NDRC failed to announce new stimulus measures, tempering bullish sentiment from earlier liquidity injections.
Chinese portside inventories grew by 590k tons, reaching 147.84 million tons by 11 Oct, driven by higher arrivals and slower post-holiday consumption.
While RSI signals bullish momentum, MACD shows a fading rally. Prices approach the critical 200-day moving average at $110/ton, posing a potential resistance point.

Silver Soars Amid China’s Stimulus and Investment Demand

By Pranay Yadav

China’s largest post-pandemic stimulus package, freeing 1 trillion yuan in liquidity, spurred a 4% silver rally, boosting both industrial demand and consumer spending.
U.S.-Listed silver ETFs saw $942 million in inflows since July, with $400 million added after the Fed’s rate cut, as lower rates increase demand for non-yielding assets like silver.
Global solar installations are up 29% year-over-year, driving silver demand, with forecasts raised after China’s mid-year reversal of installation restrictions.

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Oct 15

Daily Brief Consumer: China Resources Beverage, WH Group, Anta Sports Products, KT&G Corporation, Great Wall Motor, Hyundai Motor India , Tri Pointe Group, Costco Wholesale, Seres Group , Newell Rubbermaid and more

By Smartkarma Daily Briefs | Consumer, Daily Briefs

In today’s briefing:

China Resources Beverage (2460 HK) IPO: Index Inclusions & Stock Connect in 2025
HK Connect SOUTHBOUND Flows (To 14 Oct 2024); A HUGE 5td; Net Flows Strong but BABA Dominant
Anta Sports (2020 HK): Healthy in Financials, Leader in Market, But High in Price
FCP Capital Sends a Proposal to KT&G to Buy Korea Ginseng Corp for 1.9 Trillion Won
A/H Premium Tracker (To 14 Oct 2024): AH Premia Drop Sharply; High Premia May Contract More
Hyundai Motor India IPO: The Good, The Bad and The Valuation. Not for Quick Gain Seekers
Tri Pointe Homes Inc.: Enhanced Geographic Diversification
Costco Wholesale Corporation: Its Cost Structure & Membership Model Enabling Its Stability & Expansion! – Major Drivers
Quiddity Leaderboard SSE50/180 Dec 24: Multiple Changes to Expectations; US$2.2bn One-Way
Duplicate of Newell Brands: A Solid Strategic Business Unit Performance and Innovation Implementation Drives Our Optimism!! – Major Drivers

China Resources Beverage (2460 HK) IPO: Index Inclusions & Stock Connect in 2025

China Resources Beverage (CRB HK) is offering 347.8m shares in its IPO at a price range of HK$13.5-14.5/share. With the overallotment option, the IPO could raise up to HK$5.8bn (US$474m).
Cornerstone investors will take up nearly half 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 – that will also result in Stock Connect inclusion. The next index inclusion will take place in June.

HK Connect SOUTHBOUND Flows (To 14 Oct 2024); A HUGE 5td; Net Flows Strong but BABA Dominant

SOUTHBOUND was a net buyer the last five trading days (from before GW to 14 Oct). HUGE gross flows. Decent net flows. Very big in few names (BABA included).
The Guotai Junnan/Haitong merger pushed H-share brokers hard, but SB wasn’t buying. They bought Alibaba Group Holding (9988 HK), Semiconductor Manufacturing International Corp (SMIC) (981 HK), Xiaomi Corp (1810 HK).
Things may settle down a little bit as the fiscal policy announcements are out of the way, but I expect the trend is still your friend (until it bends).

Anta Sports (2020 HK): Healthy in Financials, Leader in Market, But High in Price

Anta top line outperformed competitors, both overseas and domestic brands, in China.
We believe all margins will be stable and EPS will rise by 41% in 2024.
However, we believe Anta is overvalued at the current price.

FCP Capital Sends a Proposal to KT&G to Buy Korea Ginseng Corp for 1.9 Trillion Won

By Douglas Kim

On 14 October, FCP Capital sent a proposal to KT&G to purchase Korea Ginseng Corp for 1.9 trillion won.
Although KT&G stated that it has no intentions to sell Korea Ginseng Corp, this proposal highlights the ongoing pressure by FCP Capital to improve further value in KT&G.
The 1.9 trillion won in proposed purchase price is higher than the 1.2 trillion won to 1.3 trillion won that KT&G revealed as the intrinsic value of Korea Ginseng Corp.

A/H Premium Tracker (To 14 Oct 2024): AH Premia Drop Sharply; High Premia May Contract More

A big “week” of 5 trading days from 30 Sep to 14 Oct, inclusive. Average AH premia dropped a lot. Liquid AH premia dropped less. Brokers are big winners.
Average AH 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.
Sharply differing onshore and offshore opinion regarding the nature and vibe of Chinese stimulus will lead to interesting dispersion. Identify the trend, then market make around it.

Hyundai Motor India IPO: The Good, The Bad and The Valuation. Not for Quick Gain Seekers

By Devi Subhakesan

Hyundai Motor India (HMIL) ‘s USD 3 billion+ IPO opens today, 15th October, at 10:00 am IST. The bidding will remain open until 4:30 pm IST on 17th October.
Near-Term Outlook: Limited Short-Term Gain Potential. While Hyundai is likely to outperform Maruti Suzuki given the valuation discount, it may underperform the broader sector in the near term.
Long-Term Opportunity: For investors with a longer-term horizon, Hyundai presents a relatively low-risk opportunity. Its established brand and world-class manufacturing facilities offer the potential for steady, long-term growth.

Tri Pointe Homes Inc.: Enhanced Geographic Diversification

Tri Pointe Homes delivered a robust performance in the second quarter of 2024, showcasing an adept response to current market conditions and strategic planning.
The company reported a substantial increase in home deliveries, up by 45%, leading to significant revenue growth.
Home sales revenue rose to $1.1 billion, marking a 38% upsurge from the previous year, primarily driven by increased community counts and optimized cycle times.

Costco Wholesale Corporation: Its Cost Structure & Membership Model Enabling Its Stability & Expansion! – Major Drivers

Costco Wholesale Corporation’s fourth-quarter financial performance for fiscal year 2024 highlighted a neutral set of results that reflect both commendable operational successes and ongoing challenges.
Comparing the results with the same period last year, Costco showed an increase in net income, with the figure reaching $2.354 billion, translating to $5.29 per diluted share.
This is a notable rise from $2.16 billion, or $4.86 per diluted share, the year before, accounting for a 9% increase.

Quiddity Leaderboard SSE50/180 Dec 24: Multiple Changes to Expectations; US$2.2bn One-Way

SSE 50 and SSE 180, respectively, aim to represent the performance of the 50 and 180 largest and most liquid A-share stocks listed on the Shanghai Stock Exchange.
In this insight, we take a look at the names leading the race to become ADDs and DELs during the December 2024 index rebal event.
While our SSE 50 expected ADDs/DELs list remains unchanged, there have been multiple changes to our SSE 180 expected ADDs/DELs list.

Duplicate of Newell Brands: A Solid Strategic Business Unit Performance and Innovation Implementation Drives Our Optimism!! – Major Drivers