Daily Briefs

I tally 49 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal.
Three new deals discussed this week on Smartkarma: Samson Holding (531 HK)‘s Scheme, and VTOs for Advanced Info Service (ADVANC TB) and Thaicom Pcl (THCOM TB).
Key updates took place on Capitol Health (CAJ AU), Alumina (AWC AU), Ansarada (AND AU), TCM (570 HK), CPMC (906 HK), Fancl (4921 JP),and Hollysys Automation Technologies (HOLI US).

💡 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

Jul 21

Daily Brief United States: Hesai Group, Crowdstrike Holdings and more

By Smartkarma Daily Briefs | Daily Briefs, United States

In today’s briefing:

Baidu Teams Up With Hesai Group For Its Robotaxi Platform Yichi 06: A Big Win For Hesai Group
CrowdStrike: A Once-Promising Cybersecurity Titan’s Fall From Grace

Baidu Teams Up With Hesai Group For Its Robotaxi Platform Yichi 06: A Big Win For Hesai Group

Baidu, a Chinese multinational technology giant, chose Hesai Group to be the exclusive LiDAR supplier for its robotaxi fleet in China.
Baidu is uniquely positioned for growth in a self-driving robotaxis and its autonomous ride-hailing platform, Apollo Go Robotaxi, gains real traction.
Hesai Group may ship at least 300K LiDARs for Baidu’s sixth generation Apollo RT6 robotaxis that would translate into a revenue of up to $300M.

CrowdStrike: A Once-Promising Cybersecurity Titan’s Fall From Grace

By Baptista Research

CrowdStrike, once hailed as a beacon of innovation in the cybersecurity sector, now finds itself at a precarious crossroads.
Despite boasting a robust platform, impressive revenue growth, and high-profile clients, recent events have cast a long shadow over its future prospects.
The global IT outage linked to CrowdStrike’s software has brought its skyrocketing valuation down but is there a rock-bottom in sight?

💡 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

Jul 21

Daily Brief China: Zhihu Technology, Brilliance China Automotive, CK Infrastructure Holdings, InnoCare Pharma Ltd, Li Auto , Zhongsheng Group and more

By Smartkarma Daily Briefs | China, Daily Briefs

In today’s briefing:

Zhihu (ZH US/2390 HK): Negative EV Play Launches a Share Buyback at HK$9.11/US$3.50
Over Capacity in Chinese Auto Market
Last Week in Event SPACE: Gulf Energy/Intouch, CK Infra, Zhongsheng, Thai Beverage, Fraser & Neave
Brilliance China Automotive (1114 HK, NEUTRAL, TP:HKD3.90): Go for the >15% Dividend Yields
China Healthcare Weekly (July.21)-Rumor About Akeso, Takeover Bid for Legend Bio, InnoCare’s Trouble
LiAuto (LI US, BUY, TP:USD25.0): High Growth + Deep Value Stock
Zhongsheng Group Holdings (881 HK, BUY, TP:HKD15.0): Challenging Outlook and Reflected in Valuation

Zhihu (ZH US/2390 HK): Negative EV Play Launches a Share Buyback at HK$9.11/US$3.50

By Arun George

Zhihu Technology (ZH US) has launched a conditional share buyback offer to acquire a maximum of 46.9m Class A ordinary shares (15.93% of outstanding shares) at HK$9.11 (US$3.50 per ADS).
The offer is conditional on shareholder approval by a majority of votes cast at the EGM. There is no minimum acceptance condition. The EGM vote is done due to irrevocables.
Zhihu’s share buyback returns 19% of cash not subject to government controls, below Douyu International Holdings (DOYU US)’s comparable 34%. The minimum pro-ration is expected to be around 34%.

Over Capacity in Chinese Auto Market

By Alex Ng

News show that European car makers such as BMW is moving out of China, leaving the Auto market to the local players
Stocks like Brilliance China will suffer losses as they lose some of the most famous co-brand.
Foreign firm exits may give relief to local auto makers as it resolves part of the over-capacity problems

Last Week in Event SPACE: Gulf Energy/Intouch, CK Infra, Zhongsheng, Thai Beverage, Fraser & Neave

The Gulf Energy (GULF TB)/Intouch (INTUCH TB) merger is an opportunistic, bullying method designed to have GULF shareholders buy INTUCH and therefore AIS (ADVANC TB) at too low a price.
CK Infrastructure Holdings (1038 HK)‘s interest in a possible London listing coincides with the LSE undergoing a listing regime change.
Management continue to creep their stake in Zhongsheng Group (881 HK), and now hold a shade under 50%.

Brilliance China Automotive (1114 HK, NEUTRAL, TP:HKD3.90): Go for the >15% Dividend Yields

Business is struggling due to legacy luxury brands such as BMW losing its positioning in China. Local brands are eating into market share fast.
Thankfully, the company is cash rich and its trading nature enables steady supply of dividends and have been known to pay special dividends.
Share price has been under pressure, now trading at ~15% dividend yield based on 50% payout, appealing to yield seekers.

China Healthcare Weekly (July.21)-Rumor About Akeso, Takeover Bid for Legend Bio, InnoCare’s Trouble

By Xinyao (Criss) Wang

There’re rumor that Akeso’s AK112 and AK104 2024 revenue is RMB300 million and RMB1.5-1.6 billion respectively. Sales of AK104 may be below expectations, so Akeso decided to enter NRDL reimbursement.
Regardless of whether there is a takeover offer, reasonable valuation of Legend Bio is between US$12.5bn-US$15bn based on solid fundamentals. This deal is “a test” for the management of Genscript.
Current stock price of InnoCare just reflects its essence. If no new catalysts (e.g. breakthroughs in clinical data, new licensing agreement, etc.), we are not optimistic about the prospects of InnoCare.

LiAuto (LI US, BUY, TP:USD25.0): High Growth + Deep Value Stock

Share price under pressure due to industry challenges and transition of new product line-ups.
2024 is a blip, things will normalise 2025 and deliver strong topline and bottomline growth.
LiAuto is trading at bargain levels for a company delivering 3-year earnings CAGR of 38%, net cash balance sheet and churns high free cash flow.

Zhongsheng Group Holdings (881 HK, BUY, TP:HKD15.0): Challenging Outlook and Reflected in Valuation

Most brands under control (Mercedes, Lexus, Toyota) are undergoing popularity downtrend by consumers in China.
There will remain a loyal niche supporter base, every legacy auto does, but it also means Zhongsheng will be a smaller and niche distributor going forward.
Share price has plunged significantly YTD, trading at only ~5x, which we think is overdone. Yield hunters will like its ~8% DY.

💡 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

Jul 21

Daily Brief Industrials: Samsung C&T, Hesai Group and more

By Smartkarma Daily Briefs | Daily Briefs, Industrials

In today’s briefing:

Examining Market Interest in the Potential Samsung C&T and SDS Restructuring
Baidu Teams Up With Hesai Group For Its Robotaxi Platform Yichi 06: A Big Win For Hesai Group

Examining Market Interest in the Potential Samsung C&T and SDS Restructuring

By Sanghyun Park

Maximizing Lee Jae-yong’s dividend income is crucial, making Samsung SDS’s ₩5.5T cash assets key, thus prompting the merger of Samsung C&T and Samsung SDS’s BPO division.
With no legal risks for Lee Jae-yong, Samsung C&T needs the merger to increase assets and avoid forced holding company conversion, making the acquisition of Samsung SDS’s BPO division necessary.
We should target a setup for likely appraisal rights for C&T. Monitor and capture the spread between the stock price and appraisal rights exercise price.

Baidu Teams Up With Hesai Group For Its Robotaxi Platform Yichi 06: A Big Win For Hesai Group

Baidu, a Chinese multinational technology giant, chose Hesai Group to be the exclusive LiDAR supplier for its robotaxi fleet in China.
Baidu is uniquely positioned for growth in a self-driving robotaxis and its autonomous ride-hailing platform, Apollo Go Robotaxi, gains real traction.
Hesai Group may ship at least 300K LiDARs for Baidu’s sixth generation Apollo RT6 robotaxis that would translate into a revenue of up to $300M.

💡 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

Jul 21

Daily Brief Utilities: CK Infrastructure Holdings and more

By Smartkarma Daily Briefs | Daily Briefs, Utilities Sector

In today’s briefing:

Last Week in Event SPACE: Gulf Energy/Intouch, CK Infra, Zhongsheng, Thai Beverage, Fraser & Neave

Last Week in Event SPACE: Gulf Energy/Intouch, CK Infra, Zhongsheng, Thai Beverage, Fraser & Neave

The Gulf Energy (GULF TB)/Intouch (INTUCH TB) merger is an opportunistic, bullying method designed to have GULF shareholders buy INTUCH and therefore AIS (ADVANC TB) at too low a price.
CK Infrastructure Holdings (1038 HK)‘s interest in a possible London listing coincides with the LSE undergoing a listing regime change.
Management continue to creep their stake in Zhongsheng Group (881 HK), and now hold a shade under 50%.

💡 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

Jul 21

Daily Brief Industrials: Samsung C&T, Hesai Group and more

By Smartkarma Daily Briefs | Daily Briefs, Industrials

In today’s briefing:

Examining Market Interest in the Potential Samsung C&T and SDS Restructuring
Baidu Teams Up With Hesai Group For Its Robotaxi Platform Yichi 06: A Big Win For Hesai Group

Examining Market Interest in the Potential Samsung C&T and SDS Restructuring

By Sanghyun Park

Maximizing Lee Jae-yong’s dividend income is crucial, making Samsung SDS’s ₩5.5T cash assets key, thus prompting the merger of Samsung C&T and Samsung SDS’s BPO division.
With no legal risks for Lee Jae-yong, Samsung C&T needs the merger to increase assets and avoid forced holding company conversion, making the acquisition of Samsung SDS’s BPO division necessary.
We should target a setup for likely appraisal rights for C&T. Monitor and capture the spread between the stock price and appraisal rights exercise price.

Baidu Teams Up With Hesai Group For Its Robotaxi Platform Yichi 06: A Big Win For Hesai Group

Baidu, a Chinese multinational technology giant, chose Hesai Group to be the exclusive LiDAR supplier for its robotaxi fleet in China.
Baidu is uniquely positioned for growth in a self-driving robotaxis and its autonomous ride-hailing platform, Apollo Go Robotaxi, gains real traction.
Hesai Group may ship at least 300K LiDARs for Baidu’s sixth generation Apollo RT6 robotaxis that would translate into a revenue of up to $300M.

💡 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

Jul 21

Daily Brief Consumer: Brilliance China Automotive, Thai Beverage, Fancl Corp, Li Auto , Zhongsheng Group and more

By Smartkarma Daily Briefs | Consumer, Daily Briefs

In today’s briefing:

Over Capacity in Chinese Auto Market
Consumer Tales & Trends #July 11-20: THBEV SP Swap Deal, Bad Debts in Thailand, AI in Beauty.
(Mostly) Asia-Pac M&A: AIS/Thaicom, Capitol Health, Alumina, Ansarada, TCM, CPMC, Fancl, Hollysys
Brilliance China Automotive (1114 HK, NEUTRAL, TP:HKD3.90): Go for the >15% Dividend Yields
LiAuto (LI US, BUY, TP:USD25.0): High Growth + Deep Value Stock
Zhongsheng Group Holdings (881 HK, BUY, TP:HKD15.0): Challenging Outlook and Reflected in Valuation

Over Capacity in Chinese Auto Market

By Alex Ng

News show that European car makers such as BMW is moving out of China, leaving the Auto market to the local players
Stocks like Brilliance China will suffer losses as they lose some of the most famous co-brand.
Foreign firm exits may give relief to local auto makers as it resolves part of the over-capacity problems

Consumer Tales & Trends #July 11-20: THBEV SP Swap Deal, Bad Debts in Thailand, AI in Beauty.

By Devi Subhakesan

Welcome to Consumer Tales & Trends, your weekly roundup of the latest corporate developments, investment reports and sector events in the consumer industry.
Thai Beverage (THBEV SP)‘s proposed swap deal with promoter company raises several questions for shareholders. Start with the back story about how Fraser And Neave (FNN SP) joined the group.
Bigger weddings could become a trend in India – Read why we like Kalyan Jewellers(KALYANKJ IN) . Also, household debt in Thailand as % of GDP is highest in ASEAN.

(Mostly) Asia-Pac M&A: AIS/Thaicom, Capitol Health, Alumina, Ansarada, TCM, CPMC, Fancl, Hollysys

I tally 49 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal.
Three new deals discussed this week on Smartkarma: Samson Holding (531 HK)‘s Scheme, and VTOs for Advanced Info Service (ADVANC TB) and Thaicom Pcl (THCOM TB).
Key updates took place on Capitol Health (CAJ AU), Alumina (AWC AU), Ansarada (AND AU), TCM (570 HK), CPMC (906 HK), Fancl (4921 JP),and Hollysys Automation Technologies (HOLI US).

Brilliance China Automotive (1114 HK, NEUTRAL, TP:HKD3.90): Go for the >15% Dividend Yields

Business is struggling due to legacy luxury brands such as BMW losing its positioning in China. Local brands are eating into market share fast.
Thankfully, the company is cash rich and its trading nature enables steady supply of dividends and have been known to pay special dividends.
Share price has been under pressure, now trading at ~15% dividend yield based on 50% payout, appealing to yield seekers.

LiAuto (LI US, BUY, TP:USD25.0): High Growth + Deep Value Stock

Share price under pressure due to industry challenges and transition of new product line-ups.
2024 is a blip, things will normalise 2025 and deliver strong topline and bottomline growth.
LiAuto is trading at bargain levels for a company delivering 3-year earnings CAGR of 38%, net cash balance sheet and churns high free cash flow.

Zhongsheng Group Holdings (881 HK, BUY, TP:HKD15.0): Challenging Outlook and Reflected in Valuation

Most brands under control (Mercedes, Lexus, Toyota) are undergoing popularity downtrend by consumers in China.
There will remain a loyal niche supporter base, every legacy auto does, but it also means Zhongsheng will be a smaller and niche distributor going forward.
Share price has plunged significantly YTD, trading at only ~5x, which we think is overdone. Yield hunters will like its ~8% DY.

💡 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

Jul 21

Daily Brief TMT/Internet: Zhihu Technology, Intouch Holdings, Crowdstrike Holdings and more

By Smartkarma Daily Briefs | Daily Briefs, TMT/Internet

In today’s briefing:

Zhihu (ZH US/2390 HK): Negative EV Play Launches a Share Buyback at HK$9.11/US$3.50
Weekly Deals Digest (21 Jul) – Intouch/Gulf, China TCM, Huafa, Samson, Zhihu, Asics, Kokusai, Timee
CrowdStrike: A Once-Promising Cybersecurity Titan’s Fall From Grace

Zhihu (ZH US/2390 HK): Negative EV Play Launches a Share Buyback at HK$9.11/US$3.50

By Arun George

Zhihu Technology (ZH US) has launched a conditional share buyback offer to acquire a maximum of 46.9m Class A ordinary shares (15.93% of outstanding shares) at HK$9.11 (US$3.50 per ADS).
The offer is conditional on shareholder approval by a majority of votes cast at the EGM. There is no minimum acceptance condition. The EGM vote is done due to irrevocables.
Zhihu’s share buyback returns 19% of cash not subject to government controls, below Douyu International Holdings (DOYU US)’s comparable 34%. The minimum pro-ration is expected to be around 34%.

Weekly Deals Digest (21 Jul) – Intouch/Gulf, China TCM, Huafa, Samson, Zhihu, Asics, Kokusai, Timee

By Arun George

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: ASICS Corp (7936 JP) and Kokusai Electric (6525 JP) placements; Sanil Electric (062040 KS) and Timee Inc (215A JP) IPOs.
Event-Driven developments China Traditional Chinese Medicine (570 HK), Huafa Property Services Group (982 HK), Samson Holding (531 HK), Zhihu Technology (ZH US), Intouch Holdings (INTUCH TB), Gulf Energy Development (GULF TB).

CrowdStrike: A Once-Promising Cybersecurity Titan’s Fall From Grace

By Baptista Research

CrowdStrike, once hailed as a beacon of innovation in the cybersecurity sector, now finds itself at a precarious crossroads.
Despite boasting a robust platform, impressive revenue growth, and high-profile clients, recent events have cast a long shadow over its future prospects.
The global IT outage linked to CrowdStrike’s software has brought its skyrocketing valuation down but is there a rock-bottom in sight?

💡 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

Jul 21

Daily Brief Health Care: InnoCare Pharma Ltd and more

By Smartkarma Daily Briefs | Daily Briefs, Healthcare

In today’s briefing:

China Healthcare Weekly (July.21)-Rumor About Akeso, Takeover Bid for Legend Bio, InnoCare’s Trouble

China Healthcare Weekly (July.21)-Rumor About Akeso, Takeover Bid for Legend Bio, InnoCare’s Trouble

By Xinyao (Criss) Wang

There’re rumor that Akeso’s AK112 and AK104 2024 revenue is RMB300 million and RMB1.5-1.6 billion respectively. Sales of AK104 may be below expectations, so Akeso decided to enter NRDL reimbursement.
Regardless of whether there is a takeover offer, reasonable valuation of Legend Bio is between US$12.5bn-US$15bn based on solid fundamentals. This deal is “a test” for the management of Genscript.
Current stock price of InnoCare just reflects its essence. If no new catalysts (e.g. breakthroughs in clinical data, new licensing agreement, etc.), we are not optimistic about the prospects of InnoCare.

💡 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

Jul 21

Daily Brief Equity Bottom-Up: Over Capacity in Chinese Auto Market and more

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

In today’s briefing:

Over Capacity in Chinese Auto Market
Consumer Tales & Trends #July 11-20: THBEV SP Swap Deal, Bad Debts in Thailand, AI in Beauty.
Brilliance China Automotive (1114 HK, NEUTRAL, TP:HKD3.90): Go for the >15% Dividend Yields
China Healthcare Weekly (July.21)-Rumor About Akeso, Takeover Bid for Legend Bio, InnoCare’s Trouble
Baidu Teams Up With Hesai Group For Its Robotaxi Platform Yichi 06: A Big Win For Hesai Group
Zhongsheng Group Holdings (881 HK, BUY, TP:HKD15.0): Challenging Outlook and Reflected in Valuation
LiAuto (LI US, BUY, TP:USD25.0): High Growth + Deep Value Stock
CrowdStrike: A Once-Promising Cybersecurity Titan’s Fall From Grace

Over Capacity in Chinese Auto Market

By Alex Ng

News show that European car makers such as BMW is moving out of China, leaving the Auto market to the local players
Stocks like Brilliance China will suffer losses as they lose some of the most famous co-brand.
Foreign firm exits may give relief to local auto makers as it resolves part of the over-capacity problems

Consumer Tales & Trends #July 11-20: THBEV SP Swap Deal, Bad Debts in Thailand, AI in Beauty.

By Devi Subhakesan

Welcome to Consumer Tales & Trends, your weekly roundup of the latest corporate developments, investment reports and sector events in the consumer industry.
Thai Beverage (THBEV SP)‘s proposed swap deal with promoter company raises several questions for shareholders. Start with the back story about how Fraser And Neave (FNN SP) joined the group.
Bigger weddings could become a trend in India – Read why we like Kalyan Jewellers(KALYANKJ IN) . Also, household debt in Thailand as % of GDP is highest in ASEAN.

Brilliance China Automotive (1114 HK, NEUTRAL, TP:HKD3.90): Go for the >15% Dividend Yields

Business is struggling due to legacy luxury brands such as BMW losing its positioning in China. Local brands are eating into market share fast.
Thankfully, the company is cash rich and its trading nature enables steady supply of dividends and have been known to pay special dividends.
Share price has been under pressure, now trading at ~15% dividend yield based on 50% payout, appealing to yield seekers.

China Healthcare Weekly (July.21)-Rumor About Akeso, Takeover Bid for Legend Bio, InnoCare’s Trouble

By Xinyao (Criss) Wang

There’re rumor that Akeso’s AK112 and AK104 2024 revenue is RMB300 million and RMB1.5-1.6 billion respectively. Sales of AK104 may be below expectations, so Akeso decided to enter NRDL reimbursement.
Regardless of whether there is a takeover offer, reasonable valuation of Legend Bio is between US$12.5bn-US$15bn based on solid fundamentals. This deal is “a test” for the management of Genscript.
Current stock price of InnoCare just reflects its essence. If no new catalysts (e.g. breakthroughs in clinical data, new licensing agreement, etc.), we are not optimistic about the prospects of InnoCare.

Baidu Teams Up With Hesai Group For Its Robotaxi Platform Yichi 06: A Big Win For Hesai Group

Baidu, a Chinese multinational technology giant, chose Hesai Group to be the exclusive LiDAR supplier for its robotaxi fleet in China.
Baidu is uniquely positioned for growth in a self-driving robotaxis and its autonomous ride-hailing platform, Apollo Go Robotaxi, gains real traction.
Hesai Group may ship at least 300K LiDARs for Baidu’s sixth generation Apollo RT6 robotaxis that would translate into a revenue of up to $300M.

Zhongsheng Group Holdings (881 HK, BUY, TP:HKD15.0): Challenging Outlook and Reflected in Valuation

Most brands under control (Mercedes, Lexus, Toyota) are undergoing popularity downtrend by consumers in China.
There will remain a loyal niche supporter base, every legacy auto does, but it also means Zhongsheng will be a smaller and niche distributor going forward.
Share price has plunged significantly YTD, trading at only ~5x, which we think is overdone. Yield hunters will like its ~8% DY.

LiAuto (LI US, BUY, TP:USD25.0): High Growth + Deep Value Stock