Daily Briefs

Media reports indicate that Walmart (WMT US) is looking to sell 144.5m shares of JD.com (JD US) to raise up to US$3.74bn. That would be substantially all of its stake.
There will be passive buying from global index trackers at the time of settlement of the placement shares and could absorb around 12% of the placement shares.
There will be no passive buying from HSI, HSCEI, HSTECH and HSIII trackers in the short-term. An increase in CCASS holdings should result in passive buying in December.

China Traditional Chinese Medicine (570 HK): Never a Dull Moment as Profit Warning Lands

China Traditional Chinese Medicine (570 HK) profit warning notes that the 1H24 net profit would decrease by 60%-70% YoY due to pricing pressure, higher impairment losses and remedial taxes.
The profit warning could pose a risk to the scheme, as the consortium can withdraw if there is an adverse material change in China TCM’s profits or prospects.
If there were a danger of triggering the MAC clause, the consortium would not have made the regulatory submissions. The flip side is that the warning helps the shareholders vote.

Xiaomi (1810 HK): 2Q24, Revenue up by 32%, Electric Vehicle Profit to Follow, Buy

By Ming Lu

Excluding the new business electrical vehicle, total revenue increased by 23% YoY in 2Q24.
Smartphone shipments grew faster than Samsung and Apple in 2Q24.
We believe electrical vehicle will bring significant gross profit in following two years.

TCM (570 HK): Profit Warning Is No Biggie

China Traditional Chinese Medicine (570 HK) flagged a 60-70% drop in its 1H24E net profit versus 1H23, due to reduced sales/profit of TCM concentrate, bad debt provisions, and remedial taxes.
MAC triggers? No – Sinopharm won’t exercise such right, even if one was ostensibly triggered. I’d be surprised if Sinopharm wasn’t fully aware of TCM’s underlying operations.
Get involved on any dips today. Trading wide at a 11.7%/38.7% gross/annualised spread, assuming Dec-end payment.

ZTO Express Q224 Results: Slow Top-Line Growth | Margin Compression in Core Express Business | AVOID

By Daniel Hellberg

Headline numbers for ZTO in Q224 were +10% Revenue, +12% EBITDA
But gross margin in core express segment fell, as did Operating Cash Flow
ZTO left guidance unchanged for FY24; we recommend investors AVOID it

China East Education (667 HK): Rock Solid Improvements

By Osbert Tang, CFA

China East Education (667 HK)‘s 1H24 result is impressive with a 58% YoY increase in adjusted net profit. Good cost control is a key contributing factor.
Profitability has improved in all business segments. Its strategy to focus on higher-value courses has led to further improvement in annualised tuition per student.
The 1H24 result equals 68% of the full-year consensus, implying an upside in market expectations. Its net cash, at 35% of market capitalisation, is unmatched by peers.

Shanghai International Airport (600009 CH | BUY | TP:CNY44): Slow but Steady Earnings Recovery

By Mohshin Aziz

Chinese airports are enjoying a steady passenger traffic growth of 5% YTD; Shenzhen and Shanghai airports are growing much faster.
Shanghai International Airport (600009 CH)is our top pick given its size, liquidity, strong balance sheet, and its strong earnings growth potential.
Our target price for Shanghai International Airport (600009 CH) is CNY44, pegged to global airport peer average FY25 EV/EBITDA of 12x.

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Aug 22

Daily Brief Japan: Alps Logistics, TSE Tokyo Price Index TOPIX, Aoyama Zaisan Networks Co Lt, Polaris Holdings and more

By Smartkarma Daily Briefs | Daily Briefs, Japan

In today’s briefing:

Logisteed/KKR Bigly Bid for Alps Logistics (9055) Goes Live Tomorrow. Still A Shocking Multiple
Cash on Hand Has Built up to a Level Where Small Shareholder Returns Are No Longer Sufficient
Aoyama Zaisan Networks Company (8929 JP) – Q2 FY12/24 Results Update
Polaris Holdings (3010 JP) – Solid Execution with Strategic Growth Potential

Logisteed/KKR Bigly Bid for Alps Logistics (9055) Goes Live Tomorrow. Still A Shocking Multiple

The Logisteed/KKR entity received its approvals between the last week of July and this past week, and told Alps Logistics (9055 JP) it wanted to launch its tender 22 August.
It will do so. Approvals were reasonably quick (as expected) and the Special Committee and Board decided nothing material had changed. No reason to change their opinion.
This is still a HUGE price. And everyone will be out by mid-October if they want. This is an easy deal. And a GIGANTIC win for minorities.

Cash on Hand Has Built up to a Level Where Small Shareholder Returns Are No Longer Sufficient

By Aki Matsumoto

The increase in net profit from the previous year outpaced the growth in dividends, which increased cash on hand for listed companies to a record high level.
Since the equity ratio of manufacturing sector is over 40% and there’s little room for debt repayment, there’s room for a considerable increase in dividends in conjunction with share repurchases.
If free cash flow isn’t used to invest in growth and return profits to shareholders, rather than to pay small dividends to shareholders, cash on hand will continue to increase.

Aoyama Zaisan Networks Company (8929 JP) – Q2 FY12/24 Results Update

By Astris Advisory Japan

Q1-2 FY12/24 results demonstrated sustained double-digit earnings growth, driven by the Wealth Consulting business through customer acquisition and the rising number of concluded contracts.
The Real Estate Solutions business has further raised assets under management and despite the increasing challenges in finding suitable assets, there were five transactions conducted for the ADVANTAGE CLUB business.
Although the company has maintained FY12/24 guidance, we believe earnings momentum remains positive with the 1) increase in consultant numbers, 2) customer acquisitions, and 3) business investment in personnel as well as IT to boost productivity. We have left our earnings estimates unchanged.

Polaris Holdings (3010 JP) – Solid Execution with Strategic Growth Potential

By Astris Advisory Japan

Establishing a track record of positive change – Q1 FY3/25 results were in line with guidance, as the company demonstrated solid execution for domestic and overseas hotel operations, supported by continued positive market demand.
Occupancy rates remain stable at a high level, and ADR and RevPAR remained on an uptrend YoY.
We note that the company has reported three consecutive quarters of high single-digit OPM, reflecting an improvement in the quality of earnings, and management’s strategies are delivering a sustained operational turnaround.

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Aug 22

Daily Brief Industrials: Alps Logistics, Ecom Express Limited, ZTO Express Cayman , Shanghai International Airport, Singapore Post, SharkNinja , Parker Hannifin and more

By Smartkarma Daily Briefs | Daily Briefs, Industrials

In today’s briefing:

Logisteed/KKR Bigly Bid for Alps Logistics (9055) Goes Live Tomorrow. Still A Shocking Multiple
Ecom Express Pre-IPO Tearsheet
ZTO Express Q224 Results: Slow Top-Line Growth | Margin Compression in Core Express Business | AVOID
Shanghai International Airport (600009 CH | BUY | TP:CNY44): Slow but Steady Earnings Recovery
Singapore Post – Q1 profits more than double
SharkNinja Inc.: These Are The 5 Pivotal Factors Impacting Its Performance In 2025 & Beyond! – Financial Forecasts
Parker-Hannifin Corporation: An Evolving Market Vertical Coverage Driving Growth! – Major Drivers

Logisteed/KKR Bigly Bid for Alps Logistics (9055) Goes Live Tomorrow. Still A Shocking Multiple

The Logisteed/KKR entity received its approvals between the last week of July and this past week, and told Alps Logistics (9055 JP) it wanted to launch its tender 22 August.
It will do so. Approvals were reasonably quick (as expected) and the Special Committee and Board decided nothing material had changed. No reason to change their opinion.
This is still a HUGE price. And everyone will be out by mid-October if they want. This is an easy deal. And a GIGANTIC win for minorities.

Ecom Express Pre-IPO Tearsheet

By Akshat Shah

Ecom Express Limited (1062300D IN) is looking to raise about US$310m in its upcoming India IPO. The deal will be run by Axis, IIFL Securities, Kotak and UBS.
Ecom Express operates a pan-India express logistics network covering first-mile pick-up, mid-mile transportation and last-mile delivery as well as reverse logistics (returns) and fulfilment services (warehousing).
According to Redseer, the company had the widest pan-India coverage and in Tier 2+ regions compared to its peers, covering over 27,000 PIN codes, as of March 31, 2024.

ZTO Express Q224 Results: Slow Top-Line Growth | Margin Compression in Core Express Business | AVOID

By Daniel Hellberg

Headline numbers for ZTO in Q224 were +10% Revenue, +12% EBITDA
But gross margin in core express segment fell, as did Operating Cash Flow
ZTO left guidance unchanged for FY24; we recommend investors AVOID it

Shanghai International Airport (600009 CH | BUY | TP:CNY44): Slow but Steady Earnings Recovery

By Mohshin Aziz

Chinese airports are enjoying a steady passenger traffic growth of 5% YTD; Shenzhen and Shanghai airports are growing much faster.
Shanghai International Airport (600009 CH)is our top pick given its size, liquidity, strong balance sheet, and its strong earnings growth potential.
Our target price for Shanghai International Airport (600009 CH) is CNY44, pegged to global airport peer average FY25 EV/EBITDA of 12x.

Singapore Post – Q1 profits more than double

By Edison Investment Research

The Q125 results shine a light on the latest initiatives to underpin the inherent value within Singapore Post, which include a review of the Australian operations and ongoing discussions with the Singapore government on postal services. SingPost’s transformation from a post and parcel delivery company into a global logistics operator appears to have slipped under the radar of investors and now offers an opportunity for investors to reassess its potential. Our forecasts and valuation are unchanged and we believe there is now c 60% upside in the share price.

SharkNinja Inc.: These Are The 5 Pivotal Factors Impacting Its Performance In 2025 & Beyond! – Financial Forecasts

SharkNinja reported its second quarter 2024 earnings with a remarkably robust performance, significantly accelerating its financial growth and expanding its market presence.
The company achieved a 38% increase in adjusted net sales and a substantial 48% rise in adjusted EBITDA, indicating strong organic growth.
Adjusted earnings per share also soared by 51%, reflecting a successful operational strategy focused on innovation and market expansion.

Parker-Hannifin Corporation: An Evolving Market Vertical Coverage Driving Growth! – Major Drivers

Parker-Hannifin Corporation delivered a robust performance in fiscal 2024, continually strengthening through strategic portfolio transformation and a particularly standout year for the Aerospace Systems segment.
Although the company saw low single-digit sales growth overall, it succeeded in expanding margins significantly by 200 basis points in its Aerospace sector.
This was highlighted by an 18% increase in earnings per share, a notable achievement following a 15% earnings growth in the previous fiscal year, and generating a record free cash flow of $3 billion.

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Aug 22

Daily Brief Energy/Materials: Westgold Resources, Yancoal Australia, Martin Marietta Materials, Cheniere Energy, Pembina Pipeline , Petroleo Brasileiro and more

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

In today’s briefing:

S&P/ASX Index Rebalance Preview: Review Period Nearly Done; Big Impact Changes
Was it Worth it, Yancoal?
Martin Marietta Materials: Leveraging Long-Term Contracts and Increased DOT Spending! – Major Drivers
Cheniere Energy Inc.: Dealing With The Global Energy Market Dynamics! – Major Drivers
Pembina Pipeline Corporation: An Analysis Of Its Diversified Energy Transportation and Marketing Strategy & Other Major Drivers
Petróleo Brasileiro S.A. – Petrobras (PBR): Will Their Strategic Investments in Renewable Energy Yield Results? – Major Drivers

S&P/ASX Index Rebalance Preview: Review Period Nearly Done; Big Impact Changes

With 2 trading days left in the review period, there could be 30 adds/deletes across the S&P/ASX family of indices in September.
Passive trackers will need to trade a lot of stock in the forecast changes, with the impact being especially large for the changes to the S&P/ASX 200 and S&P/ASX 300.
The forecast adds have hugely outperformed the forecast deletes. Borrow recall on the deletes and increased borrow availability on the adds could result in underperformance following announcement of the changes.

Was it Worth it, Yancoal?

By Money of Mine

Company had strong half year results with 990 million in operating EBITDA and 420 million NPAT
They have 1.55 billion in cash and are debt-free, with majority of revenue from thermal coal production
Despite recent 20% drop in share price, company is on track and has good long-term prospects

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

Martin Marietta Materials: Leveraging Long-Term Contracts and Increased DOT Spending! – Major Drivers

Martin Marietta’s second quarter 2024 earnings highlighted several key developments and challenges that reflect both positive and negative aspects impacting its performance and future outlook.
The company experienced a decrease in product shipments primarily due to an unprecedented increase in rainfall, specifically in the Dallas Fort Worth area, which is a critical market for Martin Marietta.
Furthermore, the lagging effects of restrictive monetary policy also pressured demand for private construction, exacerbating the decrease in shipments.

Cheniere Energy Inc.: Dealing With The Global Energy Market Dynamics! – Major Drivers

Cheniere Energy’s second-quarter earnings for 2024 show a company that is navigating its growth and contractual commitments adeptly amidst a fluctuating energy market.
The company, led by President and CEO Jack Fusco, announced exceeding expectations on financial metrics and operational execution, which bodes well for its strategic positioning as a major LNG supplier.
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.

Pembina Pipeline Corporation: An Analysis Of Its Diversified Energy Transportation and Marketing Strategy & Other Major Drivers

Pembina Pipeline Corporation reported a strong second quarter, showcasing significant increases in several financial metrics, most notably achieving record adjusted EBITDA of $1.091 billion and record adjusted cash flow from operating activities of $837 million.
These achievements were underpinned by strategic acquisitions, notably the closure of the Alliance and Aux Sable acquisition early in April, resulting in increased ownership and contributing positively to Pembina’s financial performance.
These assets, including the full acquisition of Aux Sable’s U.S. operations, are reportedly exceeding expectations.

Petróleo Brasileiro S.A. – Petrobras (PBR): Will Their Strategic Investments in Renewable Energy Yield Results? – Major Drivers

In analyzing Petrobras’ earnings for the second quarter of 2024, several key factors emerge highlighting the company’s current performance and future outlook.
The leadership, under CEO Magda Chambriard, emphasized solid quarterly results shaped mainly by a blend of recurring and nonrecurring financial activities, alongside a strategic pivot towards sustainable energy practices and robust exploration activities.
Despite the complex overlay of global economic conditions, such as significant exchange rate volatility, Petrobras managed to navigate these with agility, thereby safeguarding its financial stability.

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Aug 22

Daily Brief Health Care: China Traditional Chinese Medicine, Eoflow, Gilead Sciences, Viatris, Royalty Pharma , NeuroBo Pharmaceuticals and more

By Smartkarma Daily Briefs | Daily Briefs, Healthcare

In today’s briefing:

China Traditional Chinese Medicine (570 HK): Never a Dull Moment as Profit Warning Lands
Eoflow: Rights Offering of 82 Billion Won and [Medtronic & Eoflow – Don’t You Forget About Me]
TCM (570 HK): Profit Warning Is No Biggie
Gilead Sciences: Innovations in Oncology & Cellular Therapy Along With Anti-Viral Focus! – Major Drivers
Viatris Inc.: Unlocking The Dry Eye Disease Market With Tyrvaya! – Major Drivers
Royalty Pharma: Expanding Clinical and Regulatory Event Horizons! – Major Drivers
NRBO: Data from Part 1 of Phase 1 Trial of DA-1726 in 3Q24

China Traditional Chinese Medicine (570 HK): Never a Dull Moment as Profit Warning Lands

China Traditional Chinese Medicine (570 HK) profit warning notes that the 1H24 net profit would decrease by 60%-70% YoY due to pricing pressure, higher impairment losses and remedial taxes.
The profit warning could pose a risk to the scheme, as the consortium can withdraw if there is an adverse material change in China TCM’s profits or prospects.
If there were a danger of triggering the MAC clause, the consortium would not have made the regulatory submissions. The flip side is that the warning helps the shareholders vote.

Eoflow: Rights Offering of 82 Billion Won and [Medtronic & Eoflow – Don’t You Forget About Me]

By Douglas Kim

After the market close on 21 August, Eoflow (294090 KS) announced a rights offering capital raise of 9.1 million new shares, representing share dilution of 23%.
Based on the expected rights offering issue price of 9,040 won, the company is expected to raise 82.2 billion won in this capital raise.
Eoflow has monthly cash burn rate of about 3.3 billion won. If the rights offering is successful, it would have adequate capital resources for about a couple of years.

TCM (570 HK): Profit Warning Is No Biggie

China Traditional Chinese Medicine (570 HK) flagged a 60-70% drop in its 1H24E net profit versus 1H23, due to reduced sales/profit of TCM concentrate, bad debt provisions, and remedial taxes.
MAC triggers? No – Sinopharm won’t exercise such right, even if one was ostensibly triggered. I’d be surprised if Sinopharm wasn’t fully aware of TCM’s underlying operations.
Get involved on any dips today. Trading wide at a 11.7%/38.7% gross/annualised spread, assuming Dec-end payment.

Gilead Sciences: Innovations in Oncology & Cellular Therapy Along With Anti-Viral Focus! – Major Drivers

Gilead Sciences Inc. showcased a solid performance for the second quarter of 2024, marked by robust commercial execution and growth across key therapeutic areas such as HIV, liver diseases, and oncology.
Notably, Biktarvy, an HIV treatment, observed an 8% year-over-year growth, while Trodelvy in oncology saw a 23% increase, and cell therapy revenues increased by 11%.
Additionally, the company reported disciplined management of operating expenses which significantly contributed to bottom-line growth.

Viatris Inc.: Unlocking The Dry Eye Disease Market With Tyrvaya! – Major Drivers

Viatris has delivered a solid performance in the second quarter of 2024, marking the fifth consecutive quarter of operational revenue growth.
Under the leadership of CEO Scott Smith, the company, which was formed from the merging of Mylan and Upjohn, a division of Pfizer, has effectively integrated two global entities and streamlined its operations through strategic divestitures.
This strategic realignment has evidently positioned Viatris at a pivotal point for future growth, focusing strongly on expanding its innovative products alongside its stable base business.

Royalty Pharma: Expanding Clinical and Regulatory Event Horizons! – Major Drivers

Royalty Pharma experienced a strong second quarter for the 2024 fiscal year, outperforming earlier guidance with a 12% increase in portfolio receipts which include royalty and other income.
The company’s robust performance can be attributed to an 11% growth in royalty receipts, indicating solid recurring cash flow from their extensive and high-quality portfolio of more than 35 commercial products.
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.

NRBO: Data from Part 1 of Phase 1 Trial of DA-1726 in 3Q24

By Zacks Small Cap Research

On August 14, 2024, NeuroBo Pharmaceuticals, Inc. (NRBO) announced financial results for the second quarter of 2024 and provided a business update.
The company recently completed enrollment in the single ascending dose (SAD) Part 1 portion of the Phase 1 trial of DA-1726 and we anticipate topline results in the third quarter of 2024.
The multiple ascending dose (MAD) Part 2 portion of the Phase 1 trial is enrolling and topline results are expected in the first quarter of 2025.

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Aug 22

Daily Brief TMT/Internet: DB Hitek Co., Ltd., Xiaomi Corp, Taiwan Semiconductor (TSMC), Workday Inc Class A, Taiwan Semiconductor (TSMC) – ADR, Hon Hai Precision Industry, IonQ , Trade Desk /, ams AG and more

By Smartkarma Daily Briefs | Daily Briefs, TMT/Internet

In today’s briefing:

Trading Situation Arising from Local Pensions’ Unusual Buying of DB HiTek
Xiaomi (1810 HK): 2Q24, Revenue up by 32%, Electric Vehicle Profit to Follow, Buy
TSMC Foundry 2.0: Strategic Shift Or Brand Tinkering?
Quiddity Leaderboard S&P500 Sep 24 Rebal: Palantir, Apollo, Workday Racing for Mega$ Flows
Taiwan Tech Weekly: Taiwan Rebound Lagging Nvidia; Why TSMC’s ‘Foundry 2.0’ Is Significant
Tech Supply Chain Tracker (22-Aug-2024): SE Asia & India semi supply chains deployment
Hon Hai & Zhen Ding Show No Major AI Slowdown; Taiwan AI Supply Chain Names Lag Nvidia’s Rebound
IonQ Inc.: Acceleration of Quantum Computing Milestones Driving Our Optimism! – Major Drivers
The Trade Desk Inc.: A Story Of Expanded Connected TV (CTV) Partnerships & Retail Media Network Expansion! – Major Drivers
AMS Osram – ESG Report – Lucror Analytics

Trading Situation Arising from Local Pensions’ Unusual Buying of DB HiTek

From early June until yesterday, local pension funds have purchased nearly 4% of DB HiTek’s SO. This places DB HiTek in a dominant first position in their net buying list.
The timing of local pension funds beginning to buy DB HiTek coincidentally aligns with May 22, when DB Inc was requested by the KFTC to transition into a holding company.
Focus on potential price impact from DB Inc.’s buying and value-up index inflows. Considering a relative overweight in DB HiTek may be strategic despite some risk.

Xiaomi (1810 HK): 2Q24, Revenue up by 32%, Electric Vehicle Profit to Follow, Buy

By Ming Lu

Excluding the new business electrical vehicle, total revenue increased by 23% YoY in 2Q24.
Smartphone shipments grew faster than Samsung and Apple in 2Q24.
We believe electrical vehicle will bring significant gross profit in following two years.

TSMC Foundry 2.0: Strategic Shift Or Brand Tinkering?

By William Keating

TSMC Foundry 2.0 more than doubles its addressable market and resets its market share to 28%, down from the ~60% share it has long enjoyed in the “traditional” foundry market
The lion’s share of this new market will come from IDM, a combination of increased outsourcing (e.g. Intel) and new JV deals (e.g. Germany and Japan)
Foundry 2.0 reflects the reality of how the semi industry is evolving and it’s the polar opposite of Intel’s IDM 2.0

Quiddity Leaderboard S&P500 Sep 24 Rebal: Palantir, Apollo, Workday Racing for Mega$ Flows

The S&P 500 index tracks the 500 largest names listed in the US and it is one of the most highly-tracked indices in the world.
In this insight, we take a look at the upcoming constituent changes in the run up to the September 2024 index rebal event.
We expect two regular changes in September 2024. There are also several live M&A events which could trigger intra-review index changes in the late-2024/early-2025.

Taiwan Tech Weekly: Taiwan Rebound Lagging Nvidia; Why TSMC’s ‘Foundry 2.0’ Is Significant

By Vincent Fernando, CFA

Taiwan Tech Stocks Rally, But Lag Nvidia’s Massive Rally; Prepare for Nvidia, Dell, HP Results Next Week
Hon Hai & Zhen Ding Show No Major AI Slowdown; Taiwan AI Supply Chain Names Lag Nvidia’s Rebound
TSMC Foundry 2.0: Strategic Shift Or Brand Tinkering? Why It Is Significant

Tech Supply Chain Tracker (22-Aug-2024): SE Asia & India semi supply chains deployment

By Tech Supply Chain Tracker

SE Asia & India deploying semi supply chains for efficiency & cost reduction, with focus shifting to automotive & mobile ventures.
Taiwan leveraging strong semiconductor industry to attract foreign students & enhance industry leadership.
Wiwynn suing Musk’s X over unpaid server bills, UK reassessing semiconductor strategy amid US & China influence. Apple’s Foxconn to manufacture iPhone Pro in India, AMD entering AI market with $4.9 billion investment. TSMC building EUR10B fab in Dresden to boost semiconductor industry.

Hon Hai & Zhen Ding Show No Major AI Slowdown; Taiwan AI Supply Chain Names Lag Nvidia’s Rebound

By Vincent Fernando, CFA

Hon Hai’s Latest Key Take Aways — No Slowdown for AI Server or Mobile Demand Indicated
Zhen Ding — Delivers Higher Than Expected 2Q24 Growth; No Indication of AI Server or Mobile Slowdown
Taiwan AI Supply Chain Names Have Lagged Nvidia’s Massive Rebound Since August 9th

IonQ Inc.: Acceleration of Quantum Computing Milestones Driving Our Optimism! – Major Drivers

IonQ’s second quarter financial and operational performance for 2024 reveals a mix of significant technological advancements and robust commercial progress, underscoring both opportunities and challenges as the company advances in the quantum computing sector.
Starting with the financial metrics, IonQ reported a revenue of $11.4 million, surpassing the upper range of its guidance.
This indicates effective contract execution and perhaps a growing demand for their quantum computing solutions.

The Trade Desk Inc.: A Story Of Expanded Connected TV (CTV) Partnerships & Retail Media Network Expansion! – Major Drivers

The Trade Desk reported a robust performance for the second quarter of 2024, with notable year-over-year revenue growth of 26%, totaling $585 million.
This growth considerably surpasses the growth rates experienced by peer companies within the digital marketing sector, emphasizing The Trade Desk’s consistent ability to capture increased market share.
This trend is particularly highlighted in areas like Connected TV (CTV), which continues to be a strong driver of the company’s expansion.

AMS Osram – ESG Report – Lucror Analytics

By Leonard Law, CFA

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

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Aug 22

Daily Brief Industrials: Alps Logistics, Ecom Express Limited, ZTO Express Cayman , Shanghai International Airport, Singapore Post, SharkNinja , Parker Hannifin and more

By Smartkarma Daily Briefs | Daily Briefs, Industrials

In today’s briefing:

Logisteed/KKR Bigly Bid for Alps Logistics (9055) Goes Live Tomorrow. Still A Shocking Multiple
Ecom Express Pre-IPO Tearsheet
ZTO Express Q224 Results: Slow Top-Line Growth | Margin Compression in Core Express Business | AVOID
Shanghai International Airport (600009 CH | BUY | TP:CNY44): Slow but Steady Earnings Recovery
Singapore Post – Q1 profits more than double
SharkNinja Inc.: These Are The 5 Pivotal Factors Impacting Its Performance In 2025 & Beyond! – Financial Forecasts
Parker-Hannifin Corporation: An Evolving Market Vertical Coverage Driving Growth! – Major Drivers

Logisteed/KKR Bigly Bid for Alps Logistics (9055) Goes Live Tomorrow. Still A Shocking Multiple

The Logisteed/KKR entity received its approvals between the last week of July and this past week, and told Alps Logistics (9055 JP) it wanted to launch its tender 22 August.
It will do so. Approvals were reasonably quick (as expected) and the Special Committee and Board decided nothing material had changed. No reason to change their opinion.
This is still a HUGE price. And everyone will be out by mid-October if they want. This is an easy deal. And a GIGANTIC win for minorities.

Ecom Express Pre-IPO Tearsheet

By Akshat Shah

Ecom Express Limited (1062300D IN) is looking to raise about US$310m in its upcoming India IPO. The deal will be run by Axis, IIFL Securities, Kotak and UBS.
Ecom Express operates a pan-India express logistics network covering first-mile pick-up, mid-mile transportation and last-mile delivery as well as reverse logistics (returns) and fulfilment services (warehousing).
According to Redseer, the company had the widest pan-India coverage and in Tier 2+ regions compared to its peers, covering over 27,000 PIN codes, as of March 31, 2024.

ZTO Express Q224 Results: Slow Top-Line Growth | Margin Compression in Core Express Business | AVOID

By Daniel Hellberg

Headline numbers for ZTO in Q224 were +10% Revenue, +12% EBITDA
But gross margin in core express segment fell, as did Operating Cash Flow
ZTO left guidance unchanged for FY24; we recommend investors AVOID it

Shanghai International Airport (600009 CH | BUY | TP:CNY44): Slow but Steady Earnings Recovery

By Mohshin Aziz

Chinese airports are enjoying a steady passenger traffic growth of 5% YTD; Shenzhen and Shanghai airports are growing much faster.
Shanghai International Airport (600009 CH)is our top pick given its size, liquidity, strong balance sheet, and its strong earnings growth potential.
Our target price for Shanghai International Airport (600009 CH) is CNY44, pegged to global airport peer average FY25 EV/EBITDA of 12x.

Singapore Post – Q1 profits more than double

By Edison Investment Research

SharkNinja Inc.: These Are The 5 Pivotal Factors Impacting Its Performance In 2025 & Beyond! – Financial Forecasts

SharkNinja reported its second quarter 2024 earnings with a remarkably robust performance, significantly accelerating its financial growth and expanding its market presence.
The company achieved a 38% increase in adjusted net sales and a substantial 48% rise in adjusted EBITDA, indicating strong organic growth.
Adjusted earnings per share also soared by 51%, reflecting a successful operational strategy focused on innovation and market expansion.

Parker-Hannifin Corporation: An Evolving Market Vertical Coverage Driving Growth! – Major Drivers

Parker-Hannifin Corporation delivered a robust performance in fiscal 2024, continually strengthening through strategic portfolio transformation and a particularly standout year for the Aerospace Systems segment.
Although the company saw low single-digit sales growth overall, it succeeded in expanding margins significantly by 200 basis points in its Aerospace sector.
This was highlighted by an 18% increase in earnings per share, a notable achievement following a 15% earnings growth in the previous fiscal year, and generating a record free cash flow of $3 billion.

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Aug 22

Daily Brief Consumer: JD.com , Webjet Ltd, LG Electronics, 99 Speed Mart Retail Holdings, S.M.Entertainment Co, Expedia Group, Inc., China East Education , TSE Tokyo Price Index TOPIX, Dexelance and more

By Smartkarma Daily Briefs | Consumer, Daily Briefs

In today’s briefing:

JD.com (9618 HK): Index Implications of Walmart Placement
Thoughts On Webjet (WEB AU)’s Demerger
LG Electronics’ Value-Up Disclosure Today: Impact on Initial Flow Sizing for the Value-Up Index
99 Speed Mart IPO: The Bear Case
99 Speedmart Holdings IPO – Digestible Valuation
SM Entertainment: Disposal of Non Core Assets – SM C&C and KeyEast
Expedia Group Inc.: A Bear’s Perspective! – Major Drivers
China East Education (667 HK): Rock Solid Improvements
Cash on Hand Has Built up to a Level Where Small Shareholder Returns Are No Longer Sufficient
Dexelance: An Emerging Serial Acquirer of Luxury Brands

JD.com (9618 HK): Index Implications of Walmart Placement

Media reports indicate that Walmart (WMT US) is looking to sell 144.5m shares of JD.com (JD US) to raise up to US$3.74bn. That would be substantially all of its stake.
There will be passive buying from global index trackers at the time of settlement of the placement shares and could absorb around 12% of the placement shares.
There will be no passive buying from HSI, HSCEI, HSTECH and HSIII trackers in the short-term. An increase in CCASS holdings should result in passive buying in December.

Thoughts On Webjet (WEB AU)’s Demerger

Back on the 22 May, global travel outfit Webjet (WEB AU) announced it was exploring the separation of its two divisions – Webjet and Webjet B2C – via a demerger.
If the demerger is implemented, shareholders will receive one Webjet B2C share for every Webjet share; plus retain their existing shares in Webjet (to be renamed WEB Travel Group).
A demerger booklet has been dispatched, with a 17th September vote on the in-specie distribution. If approved, WEB Travel (ex-entitlement) and Webjet B2C commence trading on the 23rd September.

LG Electronics’ Value-Up Disclosure Today: Impact on Initial Flow Sizing for the Value-Up Index

LG Electronics aims for 7% growth, a 7x EV/EBITDA multiple, and a ₩1,000 DPS with a 25% payout ratio, likely disclosing details by late October or early November.
LG Electronics’ value-up disclosure highlights major non-financial companies’ participation before the value-up index launch, driven by regulatory pressure and concerns about index inclusion.
Samsung and Hyundai are likely to disclose value-up plans by early September, prompting an upward revision of flow size predictions for the value-up index launch.

99 Speed Mart IPO: The Bear Case

99 Speed Mart Retail Holdings (99SPD MK), a leading grocery retailer in Malaysia, is seeking to raise US$530 million at RM1.65 per share.
In 99 Speed Mart IPO: The Bull Case, we highlighted the key elements of the bull case. In this note, we outline the bear case.
The bear case rests on lacklustre outlet KPIs, indications of margin pressure, significant pre-IPO dividends and a significant secondary offering.

99 Speedmart Holdings IPO – Digestible Valuation

By Clarence Chu

99 Speed Mart Retail Holdings (99SPD MK) is looking to raise US$530m in its Malaysia IPO. The IPO will be a mix of primary and secondary shares.
99 Speed Mart Retail Holdings (99 Speedmart) operates the “99 Speedmart” chain of mini-market outlets, retailing daily necessities across Malaysia.
In our previous notes, we looked at the firm’s past performance. In this note, we undertake a peer comparison and discuss our thoughts on valuation.

SM Entertainment: Disposal of Non Core Assets – SM C&C and KeyEast

By Douglas Kim

On 21 August, SM Entertainment announced that it will sell its non-core assets including its controlling stakes in SK C&C and KeyEast.
The combined sales amount could be about 110 billion won or more, representing 7% or more of SM Entertainment’s market cap.
Sale of SM C&C and KeyEast is likely to have a positive impact on SM Entertainment by selling its non-core assets and improving its balance sheet for higher shareholder returns.

Expedia Group Inc.: A Bear’s Perspective! – Major Drivers

Expedia Group, in its second-quarter 2024 earnings, exhibited a dual-faced performance characterized by significant achievements and emerging challenges that mirror the broader complexities of the travel industry.
The management has focused on revitalizing core brands, particular emphasis on enhancing execution within the company’s consumer segment, and fine-tuning their long-term strategic direction.
Under her leadership, Expedia Group has seen a robust growth in room nights and gross bookings indicating a strong recovery trajectory from previous downturns.

China East Education (667 HK): Rock Solid Improvements

By Osbert Tang, CFA

China East Education (667 HK)‘s 1H24 result is impressive with a 58% YoY increase in adjusted net profit. Good cost control is a key contributing factor.
Profitability has improved in all business segments. Its strategy to focus on higher-value courses has led to further improvement in annualised tuition per student.
The 1H24 result equals 68% of the full-year consensus, implying an upside in market expectations. Its net cash, at 35% of market capitalisation, is unmatched by peers.

Cash on Hand Has Built up to a Level Where Small Shareholder Returns Are No Longer Sufficient

By Aki Matsumoto

The increase in net profit from the previous year outpaced the growth in dividends, which increased cash on hand for listed companies to a record high level.
Since the equity ratio of manufacturing sector is over 40% and there’s little room for debt repayment, there’s room for a considerable increase in dividends in conjunction with share repurchases.
If free cash flow isn’t used to invest in growth and return profits to shareholders, rather than to pay small dividends to shareholders, cash on hand will continue to increase.

Dexelance: An Emerging Serial Acquirer of Luxury Brands

By Contrarian Cashflows

I recently spoke with Bogumil Baranowski, a fellow value investor and friend of mine, who shared his approach to finding attractive investments in industries facing temporary challenges but benefiting from long-term positive trends.

The luxury goods industry exemplifies this strategy. While short-term concerns such as potentially weakening consumer demand due to recessionary fears exist, these are outweighed by the long-term rise in global income and wealth levels.

Dexelance, the company I am discussing today, is currently attractively priced and stands to benefit from the enduring growth of the luxury goods sector.

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Aug 22

Daily Brief Financials: Aoyama Zaisan Networks Co Lt, Information Services, Bajaj Housing Finance, Nuam Exchange and more

By Smartkarma Daily Briefs | Daily Briefs, Financials

In today’s briefing:

Aoyama Zaisan Networks Company (8929 JP) – Q2 FY12/24 Results Update
Information Services Corporation – Cash flow fuelling ambitious growth plan
Bajaj Housing Finance Pre-IPO – Peer Comparison – Bigger and Faster
Nuam Exchange (NUAM CI, NUAMCO CB, NUAM ) – Wednesday, May 22, 2024

Aoyama Zaisan Networks Company (8929 JP) – Q2 FY12/24 Results Update

By Astris Advisory Japan

Q1-2 FY12/24 results demonstrated sustained double-digit earnings growth, driven by the Wealth Consulting business through customer acquisition and the rising number of concluded contracts.
The Real Estate Solutions business has further raised assets under management and despite the increasing challenges in finding suitable assets, there were five transactions conducted for the ADVANTAGE CLUB business.
Although the company has maintained FY12/24 guidance, we believe earnings momentum remains positive with the 1) increase in consultant numbers, 2) customer acquisitions, and 3) business investment in personnel as well as IT to boost productivity. We have left our earnings estimates unchanged.

Information Services Corporation – Cash flow fuelling ambitious growth plan

By Edison Investment Research

Information Services Corporation (ISC) has entered a new era of strategic growth, striving to double both revenue and adjusted EBITDA (on an FY23 basis) by 2028. Its Registry Operations will be a strong foundation to enable this growth, generating more than C$1.3bn in cash flow to 2053. Registry revenue was up 27.5% y-o-y in H124 due to a full year of fee uplifts combined with robust market activity in Saskatchewan. The Services segment continues to demonstrate strong organic growth, with revenues up 14% y-o-y. Continued organic growth in both the Services and Technology Solutions segment is essential for ISC to reach its 2028 targets. We value ISC at C$40/share (48% upside to the current price).

Bajaj Housing Finance Pre-IPO – Peer Comparison – Bigger and Faster

By Sumeet Singh

Bajaj Housing Finance (BHF IN) is looking to raise around US$830m in its upcoming India IPO.
BHF is a non-deposit taking housing finance company engaged in mortgage lending since FY18. Its mortgage products include home loans, loans against property, lease rental discounting and developer financing.
We have looked at the company’s past performance in our earlier notes. In this note we will undertake a peer comparison.

Nuam Exchange (NUAM CI, NUAMCO CB, NUAM ) – Wednesday, May 22, 2024

By Value Investors Club

NUAM Exchange is a Chilean holding company formed from a merger of stock exchanges in Chile, Colombia, and Peru in October 2023
Shareholders of the previous exchanges received varying percentages of ownership in NUAM
The company is in the process of merging operations to create a single equity market, trading system, and team by the end of 2025; reported pro forma 2023 numbers of 129.9 million in revenues, 50.1 million in EBITDA, and 30.9 million in net profits.

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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Aug 22

Most Read: JD.com , Hang Seng Index, China Traditional Chinese Medicine, Guzman Y Gomez, Webjet Ltd, Techwing Inc, Eoflow, Alps Logistics, LG Electronics, DB Hitek Co., Ltd. and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

JD.com (9618 HK): Index Implications of Walmart Placement
Hang Seng Index (HSI) Rebalance: Meh (Or Will We Ever Get to 100 Stocks?)
China Traditional Chinese Medicine (570 HK): Never a Dull Moment as Profit Warning Lands
Guzman Y Gomez (GYG AU): Free Float to Determine Index Inclusion
Thoughts On Webjet (WEB AU)’s Demerger
FnGuide Semiconductor Top10 Index Rebalance Preview: Two Changes Likely in October
Eoflow: Rights Offering of 82 Billion Won and [Medtronic & Eoflow – Don’t You Forget About Me]
Logisteed/KKR Bigly Bid for Alps Logistics (9055) Goes Live Tomorrow. Still A Shocking Multiple
LG Electronics’ Value-Up Disclosure Today: Impact on Initial Flow Sizing for the Value-Up Index
Trading Situation Arising from Local Pensions’ Unusual Buying of DB HiTek

JD.com (9618 HK): Index Implications of Walmart Placement

Media reports indicate that Walmart (WMT US) is looking to sell 144.5m shares of JD.com (JD US) to raise up to US$3.74bn. That would be substantially all of its stake.
There will be passive buying from global index trackers at the time of settlement of the placement shares and could absorb around 12% of the placement shares.
There will be no passive buying from HSI, HSCEI, HSTECH and HSIII trackers in the short-term. An increase in CCASS holdings should result in passive buying in December.

Hang Seng Index (HSI) Rebalance: Meh (Or Will We Ever Get to 100 Stocks?)

In a surprise (maybe should not have been!), there are no constituent changes for the Hang Seng Index (HSI INDEX) in September. However, there are float and capping changes.
Estimated one-way turnover is 1% and estimated round-trip trade is HK$3.73bn (US$478m). There are no stocks with over +/-0.5x ADV to trade but flows could add to/offset other index flows.
We remain at 82 index constituents and the road to 100 constituents appears to be a long drawn out torturous one. At this glacial pace, could be an eternity away.

China Traditional Chinese Medicine (570 HK): Never a Dull Moment as Profit Warning Lands

China Traditional Chinese Medicine (570 HK) profit warning notes that the 1H24 net profit would decrease by 60%-70% YoY due to pricing pressure, higher impairment losses and remedial taxes.
The profit warning could pose a risk to the scheme, as the consortium can withdraw if there is an adverse material change in China TCM’s profits or prospects.
If there were a danger of triggering the MAC clause, the consortium would not have made the regulatory submissions. The flip side is that the warning helps the shareholders vote.

Guzman Y Gomez (GYG AU): Free Float to Determine Index Inclusion

Guzman Y Gomez (GYG AU) listed on 20 June and is eligible for inclusion in the S&P/ASX family of indices at the September rebalance.
Whether the stock is included in indices depends on the index providers estimate of free float. We expect index providers to assign floats of between 25-35% for the stock.
Inclusion in one global index could come in November and another in December. Inclusion in the S&P/ASX indices will depend on whether float is higher than 30% or lower.

Thoughts On Webjet (WEB AU)’s Demerger

Back on the 22 May, global travel outfit Webjet (WEB AU) announced it was exploring the separation of its two divisions – Webjet and Webjet B2C – via a demerger.
If the demerger is implemented, shareholders will receive one Webjet B2C share for every Webjet share; plus retain their existing shares in Webjet (to be renamed WEB Travel Group).
A demerger booklet has been dispatched, with a 17th September vote on the in-specie distribution. If approved, WEB Travel (ex-entitlement) and Webjet B2C commence trading on the 23rd September.

FnGuide Semiconductor Top10 Index Rebalance Preview: Two Changes Likely in October

With the start of the review period around the corner, there could be two changes for the FnGuide Semiconductor Top10 Index at the October rebalance.
Wonik Ips (240810 KS) and Techwing Inc (089030 KS) are potential adds while ISC Co Ltd (095340 KS) and Dongjin Semichem (005290 KS) are potential deletes.
Passives will need to trade more than 2x ADV on two potential changes and more than 1x ADV on another potential change.

Eoflow: Rights Offering of 82 Billion Won and [Medtronic & Eoflow – Don’t You Forget About Me]

By Douglas Kim

After the market close on 21 August, Eoflow (294090 KS) announced a rights offering capital raise of 9.1 million new shares, representing share dilution of 23%.
Based on the expected rights offering issue price of 9,040 won, the company is expected to raise 82.2 billion won in this capital raise.
Eoflow has monthly cash burn rate of about 3.3 billion won. If the rights offering is successful, it would have adequate capital resources for about a couple of years.

Logisteed/KKR Bigly Bid for Alps Logistics (9055) Goes Live Tomorrow. Still A Shocking Multiple

The Logisteed/KKR entity received its approvals between the last week of July and this past week, and told Alps Logistics (9055 JP) it wanted to launch its tender 22 August.
It will do so. Approvals were reasonably quick (as expected) and the Special Committee and Board decided nothing material had changed. No reason to change their opinion.
This is still a HUGE price. And everyone will be out by mid-October if they want. This is an easy deal. And a GIGANTIC win for minorities.

LG Electronics’ Value-Up Disclosure Today: Impact on Initial Flow Sizing for the Value-Up Index

LG Electronics aims for 7% growth, a 7x EV/EBITDA multiple, and a ₩1,000 DPS with a 25% payout ratio, likely disclosing details by late October or early November.
LG Electronics’ value-up disclosure highlights major non-financial companies’ participation before the value-up index launch, driven by regulatory pressure and concerns about index inclusion.
Samsung and Hyundai are likely to disclose value-up plans by early September, prompting an upward revision of flow size predictions for the value-up index launch.

Trading Situation Arising from Local Pensions’ Unusual Buying of DB HiTek