Daily Briefs

A weekly summary of key developments across ECM and Event-Driven names tracked by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Thailand, Korea, India and Chinese ADRs.
ECM developments: Ola Electric (1700674D IN) and BrainBees Solutions (0172540D IN) IPOs.
Event-Driven developments: A8 New Media (800 HK), Asia Cement China (743 HK), CPMC Holdings (906 HK), Fancl Corp (4921 JP), Sun Corp (6736 JP), Pacific Metals (5541 JP).

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Aug 04

Daily Brief Thematic (Sector/Industry): Japan Weekly | BOJ Surprises; Lots of Results and more

By Smartkarma Daily Briefs | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

Japan Weekly | BOJ Surprises; Lots of Results

Japan Weekly | BOJ Surprises; Lots of Results

By Mark Chadwick

The Bank of Japan’s decision to raise the overnight rate to 0.25% significantly impacted financial markets this week
The Federal Reserve’s decision to keep rates unchanged fueled concerns that it might be lagging in rate cuts.
Advantest’s share price surged 15% this week due to a positive outlook and strong Q1 results

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Aug 04

Daily Brief Equity Bottom-Up: Otsuka Holdings (4578 JP): H1 Revenue Rises 17% on Rexulti; Picks Up Jnana Therapeutics for $800M and more

By Smartkarma Daily Briefs | Daily Briefs, Equity Bottom-Up

In today’s briefing:

Otsuka Holdings (4578 JP): H1 Revenue Rises 17% on Rexulti; Picks Up Jnana Therapeutics for $800M
[Earnings Review] BP Surges Past Profit Estimates on Soaring Oil Prices and Robust Retail Earnings

Otsuka Holdings (4578 JP): H1 Revenue Rises 17% on Rexulti; Picks Up Jnana Therapeutics for $800M

By Tina Banerjee

During 1H24 Otsuka Holdings (4578 JP) reported 18% YoY growth in revenue from pharmaceuticals segment to ¥767B, mainly driven by a 27% YoY growth in Rexulti revenue to ¥122B.
The company has revised upward 2024 revenue and business profit, while reduced 2024 operating and net profit guidance due to the recording of an impairment loss.
Otsuka is acquiring Jnana Therapeutics for $800M. The transaction includes JNT-517, a potential first-in-class oral treatment for Phenylketonuria, a rare inherited metabolic disorder. The acquisition will close in 3Q24.

[Earnings Review] BP Surges Past Profit Estimates on Soaring Oil Prices and Robust Retail Earnings

By Suhas Reddy

BP’s operating revenue declined by 2.55% YoY, falling short of estimates by 9.78%, while underlying net profit increased by 6.45% YoY, exceeding EPS estimates by 8.75%.
Strong performance from the Oil Production & Operations and Customers & Products segments drove underlying net profit growth.
BP announced a 10% increase in its interim dividend to 8 cents/share and completed USD 1.75 billion in share buybacks in Q2.

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Aug 04

Daily Brief Event-Driven: (Mostly) Asia-Pac M&A:Ansarada and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

(Mostly) Asia-Pac M&A:Ansarada, Southern Cross Gold, A8 New Media, CPMC, Mandala Multifinance, Fancl
HK Connect SOUTHBOUND Flows (To 2 Aug 2024); ETFs Get Sold; Tencent, SOEs, Utilities Bought
A/H Premium Tracker (To 2 Aug 2024): Policy Commentary Supports Consumers, AH Premia Drifting Wider
Asia Cement China (743 HK): Scheme Vote on 26 August Has a High Deal Break Risk
Asia Cement (743 HK): 26th August Vote. Shareholders Should Reject Terms
Last Week in Event SPACE: Rio Tinto, Ryohin Keikaku/Fast Retailing, WH Group, ThaiBev/F&N, PCCW
Mainland Connect NORTHBOUND Flows (To 2 Aug 2024): Small Net Positive Week But…

(Mostly) Asia-Pac M&A:Ansarada, Southern Cross Gold, A8 New Media, CPMC, Mandala Multifinance, Fancl

I tally 45 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal.
Quite week – no new deals were discussed this week on Smartkarma ….
Key updates took place on Ansarada Group (AND AU), Southern Cross Gold (SXG AU), A8 New Media (800 HK), CPMC Holdings (906 HK), Mandala Multifinance (MFIN IJ), and Fancl (4921 JP).

HK Connect SOUTHBOUND Flows (To 2 Aug 2024); ETFs Get Sold; Tencent, SOEs, Utilities Bought

SOUTHBOUND was again a net buyer, for HK$9.2bn this week (now 26wks in a row of net buying), on smallish two-way volumes.
I’ve thought national team was buying banks for months. They were gone for a couple of weeks. Feels like they are back.
There were three ETFs in the top five SOUTHBOUND sells this past week, reversing last week. Energy, Utilities, Telecoms bought.

A/H Premium Tracker (To 2 Aug 2024): Policy Commentary Supports Consumers, AH Premia Drifting Wider

The New/Better A-H Premium Tracker has tables, charts, measures galore to track A/H premium positioning, southbound and northbound positioning/volatility in pairs over time, etc.
SOUTHBOUND inflow strong. SOEs, Tencent, and Xiaomi leading. NORTHBOUND down four of five days this week, but net inflows on the week. Consumer discretionary bad.
Hs underperformed As again. 20d AH Premia performance is at the top of its multi-year range. I’d expect AH Premia to decline the next couple of weeks.

Asia Cement China (743 HK): Scheme Vote on 26 August Has a High Deal Break Risk

Asia Cement China (743 HK)’s IFA opines that Asia Cement (1102 TT)’s HK$3.22 privatisation offer is fair and reasonable. The scheme vote is on 26 August.
The IFA valiantly justifies that an offer materially below net cash is fair and reasonable. The crux of the justification lies in the fortuitous disclosure of material capex requirements.
While no shareholder holds the 10% blocking stake, the high AGM minority participation rates, retail opposition and unconvincing IFA report suggest a high chance of a deal break.

Asia Cement (743 HK): 26th August Vote. Shareholders Should Reject Terms

Back on the 5th June, Chinese cement play Asia Cement China (743 HK) announced a rubbish HK$3.22/share Offer from its parent Asia Cement (1102 TT).
This best & final cash Offer was a ~ 45% premium to undisturbed, and a 37% discount to FY23’s net cash. It’s a 39% discount to 1H24’s net cash.
The Scheme Doc is now out, with a 26th August independent shareholder vote. And payment (if it were to occur) on 20th September. The IFA (unsurprisingly) says fair and reasonable.

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

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.

Mainland Connect NORTHBOUND Flows (To 2 Aug 2024): Small Net Positive Week But…

The Quiddity Mainland Connect NORTHBOUND Monitor. Like the A/H Premium Monitor and HK Connect SOUTHBOUND Monitor. Lots of Flows/Position Tables and Charts with which to play.
Last week saw NORTHBOUND net BUY RMB 3.2bn of A-shares. Wednesday was a BIG buy day. Every other day was a net sell.
HK and Mainland large caps generally performed equally, down but much better than the rest of the world, but Hs in H/A pairs underperformed.

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Aug 04

Daily Brief Macro: Heard From Fortress Hill: Weekly Market Observations (2 Aug 2024) and more

By Smartkarma Daily Briefs | Daily Briefs, Macro

In today’s briefing:

Heard From Fortress Hill: Weekly Market Observations (2 Aug 2024)
US July Job Reports: Shifting Away to Services Sector

Heard From Fortress Hill: Weekly Market Observations (2 Aug 2024)

By Alex Ng

The FED FOMC ended on Thursday and most analysts predict two to three rate cuts this year, while we forecast there will only be an one off rate cut.
Our forecast already incorporate the nil prediction we were aiming at earlier, since the FOMC members have leaked their intents towards more rate cut.
But we are still affirmative that there will only be a one-off rate cut this September, as various currencies like JPY have rebounded visibly.

US July Job Reports: Shifting Away to Services Sector

By Alex Ng

Employers added just 114,000 jobs in July — 35% fewer than expected — and unemployment, now at 4.3%, is the highest since October 2021, the Labor Department reported Friday.
Hourly wages rose just 3.6% from July 2023, the smallest year-over-year gain since May 2021, and another sign that inflation could be heading closer to the Fed’s target.
July job gains were concentrated in healthcare and social assistance firms, which added 64,000 jobs last month, accounting for 56% of hiring. Restaurants, hotels and bars added nearly 26,000 jobs.

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Aug 04

Daily Brief Australia: Rio Tinto Ltd and more

By Smartkarma Daily Briefs | Australia, Daily Briefs

In today’s briefing:

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

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

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.

💡 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 04

Daily Brief China: Tencent, China Longyuan Power, Asia Cement China, China National Nuclear Power C and more

By Smartkarma Daily Briefs | China, Daily Briefs

In today’s briefing:

HK Connect SOUTHBOUND Flows (To 2 Aug 2024); ETFs Get Sold; Tencent, SOEs, Utilities Bought
A/H Premium Tracker (To 2 Aug 2024): Policy Commentary Supports Consumers, AH Premia Drifting Wider
Asia Cement China (743 HK): Scheme Vote on 26 August Has a High Deal Break Risk
Asia Cement (743 HK): 26th August Vote. Shareholders Should Reject Terms
Mainland Connect NORTHBOUND Flows (To 2 Aug 2024): Small Net Positive Week But…

HK Connect SOUTHBOUND Flows (To 2 Aug 2024); ETFs Get Sold; Tencent, SOEs, Utilities Bought

SOUTHBOUND was again a net buyer, for HK$9.2bn this week (now 26wks in a row of net buying), on smallish two-way volumes.
I’ve thought national team was buying banks for months. They were gone for a couple of weeks. Feels like they are back.
There were three ETFs in the top five SOUTHBOUND sells this past week, reversing last week. Energy, Utilities, Telecoms bought.

A/H Premium Tracker (To 2 Aug 2024): Policy Commentary Supports Consumers, AH Premia Drifting Wider

The New/Better A-H Premium Tracker has tables, charts, measures galore to track A/H premium positioning, southbound and northbound positioning/volatility in pairs over time, etc.
SOUTHBOUND inflow strong. SOEs, Tencent, and Xiaomi leading. NORTHBOUND down four of five days this week, but net inflows on the week. Consumer discretionary bad.
Hs underperformed As again. 20d AH Premia performance is at the top of its multi-year range. I’d expect AH Premia to decline the next couple of weeks.

Asia Cement China (743 HK): Scheme Vote on 26 August Has a High Deal Break Risk

Asia Cement China (743 HK)’s IFA opines that Asia Cement (1102 TT)’s HK$3.22 privatisation offer is fair and reasonable. The scheme vote is on 26 August.
The IFA valiantly justifies that an offer materially below net cash is fair and reasonable. The crux of the justification lies in the fortuitous disclosure of material capex requirements.
While no shareholder holds the 10% blocking stake, the high AGM minority participation rates, retail opposition and unconvincing IFA report suggest a high chance of a deal break.

Asia Cement (743 HK): 26th August Vote. Shareholders Should Reject Terms

Back on the 5th June, Chinese cement play Asia Cement China (743 HK) announced a rubbish HK$3.22/share Offer from its parent Asia Cement (1102 TT).
This best & final cash Offer was a ~ 45% premium to undisturbed, and a 37% discount to FY23’s net cash. It’s a 39% discount to 1H24’s net cash.
The Scheme Doc is now out, with a 26th August independent shareholder vote. And payment (if it were to occur) on 20th September. The IFA (unsurprisingly) says fair and reasonable.

Mainland Connect NORTHBOUND Flows (To 2 Aug 2024): Small Net Positive Week But…

The Quiddity Mainland Connect NORTHBOUND Monitor. Like the A/H Premium Monitor and HK Connect SOUTHBOUND Monitor. Lots of Flows/Position Tables and Charts with which to play.
Last week saw NORTHBOUND net BUY RMB 3.2bn of A-shares. Wednesday was a BIG buy day. Every other day was a net sell.
HK and Mainland large caps generally performed equally, down but much better than the rest of the world, but Hs in H/A pairs underperformed.

💡 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 04

Daily Brief India: Ola Electric and more

By Smartkarma Daily Briefs | Daily Briefs, India

In today’s briefing:

Weekly Deals Digest (04 Aug) – Ola, Brainbees, A8, Asia Cement, CPMC, Fancl, Sun Corp, Heiwa

Weekly Deals Digest (04 Aug) – Ola, Brainbees, A8, Asia Cement, CPMC, Fancl, Sun Corp, Heiwa

A weekly summary of key developments across ECM and Event-Driven names tracked by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Thailand, Korea, India and Chinese ADRs.
ECM developments: Ola Electric (1700674D IN) and BrainBees Solutions (0172540D IN) IPOs.
Event-Driven developments: A8 New Media (800 HK), Asia Cement China (743 HK), CPMC Holdings (906 HK), Fancl Corp (4921 JP), Sun Corp (6736 JP), Pacific Metals (5541 JP).

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

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

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

Aug 04

Daily Brief United States: BP PLC and more

By Smartkarma Daily Briefs | Daily Briefs, United States

In today’s briefing:

[Earnings Review] BP Surges Past Profit Estimates on Soaring Oil Prices and Robust Retail Earnings

[Earnings Review] BP Surges Past Profit Estimates on Soaring Oil Prices and Robust Retail Earnings

By Suhas Reddy

BP’s operating revenue declined by 2.55% YoY, falling short of estimates by 9.78%, while underlying net profit increased by 6.45% YoY, exceeding EPS estimates by 8.75%.
Strong performance from the Oil Production & Operations and Customers & Products segments drove underlying net profit growth.
BP announced a 10% increase in its interim dividend to 8 cents/share and completed USD 1.75 billion in share buybacks in Q2.

💡 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 04

Daily Brief Japan: Fancl Corp, Otsuka Holdings and more

By Smartkarma Daily Briefs | Daily Briefs, Japan

In today’s briefing:

(Mostly) Asia-Pac M&A:Ansarada, Southern Cross Gold, A8 New Media, CPMC, Mandala Multifinance, Fancl
Otsuka Holdings (4578 JP): H1 Revenue Rises 17% on Rexulti; Picks Up Jnana Therapeutics for $800M

(Mostly) Asia-Pac M&A:Ansarada, Southern Cross Gold, A8 New Media, CPMC, Mandala Multifinance, Fancl