Thematic (Sector/Industry)

The stars are aligned for a rally in the Japanese equity markets – Earnings, Activism, and Capital Allocation.
We highlight some of the stocks that moved the market this week – Toyota excited the market with promises of Solid State battery production
Shareholders continue to test Japanese management with a barrage of proposals

Only Half of Chinese Insurers Made Money Abroad Last Year

By Caixin Global

Chinese insurance companies’ overseas investments remained flat in 2022, and only half of them made profits on the investments, a recent survey showed.
Foreign investments in 2022 by Chinese insurers totaled $83.2 billion, about the same as in 2021. The funds were invested mostly in Hong Kong and the U.S., according to the survey of 52 Chinese insurance companies.
The average return on investments was 1.32%, with a median of 0.22%. Returns were lower than insurers’ returns of 3.76% on total investments at home and abroad. About 54% of the insurers made money on the investments, down 19 percentage points from 2021, the survey showed.

Major Philippines’ Telco Banks On Rapid Digital Services Uptake, CEO Says

By Caixin Global

Philippine telecommunications conglomerate Globe Telecom Inc. is ramping up expansion of its e-wallet unit and online medical business by capitalizing on the widespread adoption of digital services in the Southeast Asian nation, the firm’s chief executive told Caixin.
The uptake of digital services for transactions surged during the Covid-19 pandemic — especially in the fintech, medical, and healthcare sectors.
The trend has continued even after the Philippines relaxed virus controls, Globe Telecom President and CEO Ernest Cu said in an interview on the sidelines of the Asia New Vision Forum in Singapore Monday

NeoCon/Design Days : Office Manufacturers Display Wares Amid Macro Uncertainty

Office furniture manufacturers assembled in Chicago this week for an annual trade show.
NeoCon®, the legacy name of the show, is a registered trademark of Merchandise Mart Properties, Inc
It pertains only to Mart tenants. Several major players moved away from the Mart to Fulton Market and renamed their show Design Days.

Short Note: US Rate Pause, China Stimulus, and the HK Rebound

By Jacob Cheng

The US paused the rate hike, but delivered a hawkish surprise to the market that showed a median projection of 2 additional rate hikes instead of one
In China, PBoC cut 7 day repo rate for 10bps, and then cut MLF by also 10bps from 2.75% to 2.65%
Stock market is always looking forward and trades on expectations of the fundamentals; BUY Chinese names COLI 688 HK, HLP 101 HK, and HK name NWD 17 HK

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Jun 16

Daily Brief Thematic (Sector/Industry): Ohayo Japan |SPX Continues to Defy Gravity; NUGGET: SON-San Rebirth Like a Phoenix- A Helping ARM and more

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

In today’s briefing:

Ohayo Japan |SPX Continues to Defy Gravity; NUGGET: SON-San Rebirth Like a Phoenix- A Helping ARM
Postcard from Uttarakhand | The Landslide Edition
China Property – Today’s Macro Property Data (NBS) For May
China Banks – Unseasoned Loans, Institutional Ownership, Corporate Losses
China TMT Update – 700.HK/NTES/BGNE/2352.SZ: Tencent’s In-Development Project “Paradise” Start Test.
China/Asia TMT Update-PDD/CPNG/SE/BEKE/BILI:PDD’s Temu Plans to Come to ASEAN and South Korea

Ohayo Japan |SPX Continues to Defy Gravity; NUGGET: SON-San Rebirth Like a Phoenix- A Helping ARM

OVERSEAS. US Equity Rally Continues in spite of Recession fears/profit slowdown; SPX 1.2% as all sectors positive as Defensives led overnight; Rally broading out out beyond Tech..it would seem
JAPAN. NKY Futs -0.1% disc vs Cash; BOJ Decision Day- No change expected in policy stance; Kishida says no Snap elections
NUGGET. Son-san/Softbank poised for a rebirth like a Phoenix from the ashes thanks to ARM IPO.

Postcard from Uttarakhand | The Landslide Edition

By Pranav Bhavsar

Uttarakhand, a state in northern India, is known for its stunning landscapes, pilgrimage sites, and the title “Land of the Gods.”
Despite the potential for tourism development, there are challenges in infrastructure, including transportation networks, accommodations, and bureaucratic processes.
The holiday trip, including being stuck in a landslide with limited connectivity, transformed us, enhancing personal growth, analytical skills, and commitment to serving investor clients.

China Property – Today’s Macro Property Data (NBS) For May

By Robert Ciemniak

The May data was weak, though the 12-month Y/Y metrics keep showing improvements, “less negative”; everyone expects more stimulus, a big question is its scope and the extent
The indicators for land sales/acquisitions improved, though, on most metrics in May
May was the third month in a row with a downward revision to some 2022 data

China Banks – Unseasoned Loans, Institutional Ownership, Corporate Losses

Unseasoned loans are especially high for 2 banks and very low for 2 others, divergent risks
Worsening China economy, geopolitical concerns, beware of well-held China banks
Rising losses at China’s corporate suggests worse asset quality than reported

China TMT Update – 700.HK/NTES/BGNE/2352.SZ: Tencent’s In-Development Project “Paradise” Start Test.

700.HK/NetEase: Tencent’s in-development project codenamed “Paradise” started recruiting players for its closed beta test.
BGNE: AbbVie sued BeiGene over patent infringement on BRUKINSA (-)
002352.SZ: SF Express may cooperate with J&T on international logistics (+)

China/Asia TMT Update-PDD/CPNG/SE/BEKE/BILI:PDD’s Temu Plans to Come to ASEAN and South Korea

PDD/CPNG/SE: PDD’s Temu plans to come to Southeast Asia and South Korea, negative to Shopee and Coupang (+/-/-)
KE Holding: New home sales remain lukewarm in May, leaving more space for potential incentive policies.
BILI: Bilibili’s top anchor achieved a single-session GMV of 28 million yuan during the 618 live-streaming sales event (+)

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Jun 15

Daily Brief Thematic (Sector/Industry): Ohayo Japan |Hawkish Fed Pause; SPX Falters; NUGGET: The Japan Renewables(+Nuclear) Opportunity and more

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

In today’s briefing:

Ohayo Japan |Hawkish Fed Pause; SPX Falters; NUGGET: The Japan Renewables(+Nuclear) Opportunity
Carnage in the Swedish Housing Market
Korea’s Large Banks & Hanwah Ocean – Credit Reversals or Overhang?
China TMT Update June 15 – 1810.HK/700HK/LI: India Issues Xiaomi Show Cause Notice

Ohayo Japan |Hawkish Fed Pause; SPX Falters; NUGGET: The Japan Renewables(+Nuclear) Opportunity

OVERSEAS. Hawkish Fed Pause is Powell telegraphs +50bps hikes this year; SPX flat with most Sectors in the Red; PPI comfort as shows inflation declining; NVIDIA on the roll Again
JAPAN. NKY Futs +0.3% vs Cash; Positive earning revisions driving NKY; Investors Cheer Toyotas revamped EV strategy + votes back in board; Oasis tgts Tsuruha board; Slow Uniqlo China momentum
NUGGET. The Japan Renewables(+Nuclear) Opportunity. Japan is lagging in it’s Renewables ramp. The government’s 2030 GHG reduction commitment presents signifcant opportunities.

Carnage in the Swedish Housing Market

By Andreas Steno

Along with the rest of Europe Swedish Real Estate has been hit hard. Most of the loans being 3m to 5y variable rates have been especially painful for Swedish households.
However optimism is returning to the market as consumers seem to have forgotten that a credit contraction follows pivot hopes
The cure is simple for the Riksbank: Lower rate. Good luck with that in the current inflationary environment

Korea’s Large Banks & Hanwah Ocean – Credit Reversals or Overhang?

Daewoo Shipping & Marine Engineering early in May 2023 agreed to takeover by Hanwah Group
Hanwah Ocean, the re-named entity, reported financial stress for years, a lumpy NPL for banks
C&P CIQ data suggests that all four major Korean banks are creditors to Hanwah Ocean

China TMT Update June 15 – 1810.HK/700HK/LI: India Issues Xiaomi Show Cause Notice

1810.HK: India Enforcement Directorate issues Xiaomi show cause notice (-)
700HK: Tencent launched “White Night Aurora” on June 13th (+)
LI: Li Auto ‘s weekly delivery reaches 8.4k units (+)

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Jun 14

Daily Brief Thematic (Sector/Industry): The Curious Case of $60M of Bogus US Postage or ‘How Can They Can Make Money Exporting $5 Shirts?!’ and more

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

In today’s briefing:

The Curious Case of $60M of Bogus US Postage or ‘How Can They Can Make Money Exporting $5 Shirts?!’
Ohayo Japan |Next: Fed Pause=>HALT! Stocks N; NUGGET: EV Growth => +ve JP Elect Cmpnent Suppliers
China TMT Update June 13-3690.HK/XPEV/NIO-Douyin Gives up Food Delivery Target,NIO Cut Price,G6 Sale
ESG Sustainability Report 2023 Metals & Mining ASX 13062023.pdf
What if God was a hedge fund manager?
China TMT Update June 14-Luckin/Nayuki/3690.HK:Luckin Sold 39mn Cups of Coffee in the First Week
Weekly Sustainable Investing Surveyor : Week Ended June 9, 2023

The Curious Case of $60M of Bogus US Postage or ‘How Can They Can Make Money Exporting $5 Shirts?!’

By Daniel Hellberg

The scale of fraud in a new US federal criminal complaint – US$60M of fake postage – mirrors the recent dramatic growth of Chinese e-commerce platforms that target US consumers
The case also highlights the importance of securing cheap last-mile US distribution for the Chinese e-commerce platforms selling inexpensive goods directly to US consumers
It’s unclear which of the Chinese platforms benefited from the scheme, but the incident should refocus investors’ attention on logistics as a critical piece of their business models

Ohayo Japan |Next: Fed Pause=>HALT! Stocks N; NUGGET: EV Growth => +ve JP Elect Cmpnent Suppliers

OVERSEAS. Markets Cheers Slowing CPI, Anticipate a Fed “HALT” to Hikes; SPX 0.7% as only Utilities Sector in the Red; China to Roll out Stimulus; AMD News chips -NVIDIA Challenge
JAPAN. NKY Futs 1.2% vs Cash; Japan Bid Continues; Toyota AGM as EV Strat in Focus; Good news for Softbank -ARM courts Apple, Alphabet as IPO Investors, INTEL is in.
NUGGET. EV Revolution – Business set to Boom for Electronics Components Makers

China TMT Update June 13-3690.HK/XPEV/NIO-Douyin Gives up Food Delivery Target,NIO Cut Price,G6 Sale

3690.HK: Douyin gives up on its food delivery GTV target for 2023 (+)
XPEV: XPeng G6 gets over 25k orders 72 hours after pre-sale starts (+)
Nio: NIO cuts car prices by RMB 30k for all models by making battery swapping benefits optional

ESG Sustainability Report 2023 Metals & Mining ASX 13062023.pdf

By ACF Equity Research

Navigating the ESG landscape is challenging for small and mid-caps
For smaller companies access to competitively priced capital is perhaps the single most important challenge
ESG / Sustainability Report provides an opportunity for small and mid-cap miners on the ASX

What if God was a hedge fund manager?

By Investment Talk

Bill Miller1 once asked himself; “What if God himself was an investor?”.
Whether you believe in a higher power or not, the idea is that God is blessed with divine omniscience; he knows everything that is and everything that will be.
With precision foresight and a long-term outlook, it reasons that he would be a pretty solid stock picker.

China TMT Update June 14-Luckin/Nayuki/3690.HK:Luckin Sold 39mn Cups of Coffee in the First Week

Luckin Coffee: Luckin Coffee sold 39mn cups of coffee in the first week of full launch of RMB9.9 per cup.
Nayuki: Media report that Nayuki may begin the franchise business in July
3690.HK/Douyin app is currently creating independent “entrances” and a “mall” for food delivery.

Weekly Sustainable Investing Surveyor : Week Ended June 9, 2023

WTR Sustainable Index: During the week ended June 9, 2023, the WTR Sustainable Index outperformed the broader market, rising 9.7% W/W versus the S&P 500 Index (up 0.4%), the Russell 2000 Index (up 1.9%), and the Nasdaq Composite Index (up 0.1%).
Advanced Transportation Solutions (73.6% of the index) drove the index’s performance, rising 12.8%, while Energy Technology (6.8% of the index) was up 2.1% and Industrial Climate and Ag Technology was up 2.5%.
Valuation: Based on forward 12-month consensus estimates, the current P/E ratio of the WTR Sustainable index is 25.0x versus 20.0x for the S&P 500.

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Jun 13

Daily Brief Thematic (Sector/Industry): Ohayo Japan |BIG TECH BACK ! NUGGET: Nidec Succession Headaches-Resolution in Sight But… and more

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

In today’s briefing:

Ohayo Japan |BIG TECH BACK ! NUGGET: Nidec Succession Headaches-Resolution in Sight But…
Graphcore. A Cautionary Tale For Would-Be NVIDIA Challengers
China TMT UpdateXPEV/TESLA/Nayuki/PDD/4385.JP/ 4689.JP/4755.JP: Pre-Sales of G6, Temu Comes to Japan
The Stocks to Own in Asia – Vol. 41
The Stocks to Own in ASEAN – Vol. 43
SPAC Talk : SPACs and the AI Wave
Tech Talk: Cybersecurity : What’s the Latest? How Big Is It? Who Is in the Game?
The Cyclicality of China Healthcare – Policy Environment, the Industry, and Investment Opportunities
JD/PDD/E-Commerce Sector Report: JD May Have Better-Than-Expected Performance in 618

Ohayo Japan |BIG TECH BACK ! NUGGET: Nidec Succession Headaches-Resolution in Sight But…

OVERSEAS. NDX100 +1.8% SOX +3.3% vs. SPX +0.9% DOW +0.6%; Tech back ahead of Fed; Energy a different story as Oil fell on D-S worries; All eyes remain on CPI/Fed
JAPAN. NKY Futs +0.7% premium vs Cash; Japan lead yesterday vs US..rarity; Expect continued Equity follow through; Seino HD(9076) -Massive Buyback, Div hike; TOYOTA-Path to Solid State Battery Commercialization?
NUGGET. Nidec Succession Resolution in Sight, but Nagamori Premium May Dissappear

Graphcore. A Cautionary Tale For Would-Be NVIDIA Challengers

By William Keating

Once valued at ~$2.8 billion, the former UK Unicorn is but a shadow of its original self.
Their IPU design was far too ambitious from the outset leading them to over promise and under deliver.
Unless you are a Google or an Amazon, designing and building your own AI processor from scratch to compete with NVIDIA is a fool’s errand.

China TMT UpdateXPEV/TESLA/Nayuki/PDD/4385.JP/ 4689.JP/4755.JP: Pre-Sales of G6, Temu Comes to Japan

XPEV: XPeng begins pre-sales of G6 with starting price at RMB 225k (+)
Nayuki: Chabaidao finished a round of private equity financing at RMB18bn valuation
PDD/ 4385.JP/ 4689.JP/ 4755.JP/ AMZN.US/ Shein: Temu could soon launch in Japan (+/-/-/-/-/-)

The Stocks to Own in Asia – Vol. 41

By Dr. Andrew Stotz, CFA

We highlight 14 stocks in Asia that look interesting to us based on our FVMR methodology
Portfolio changes: One stock remains and 13 stocks are added
Since its inception, it has generated a before-fee total return of 116% versus the MSCI Asia ex Japan of 60%

The Stocks to Own in ASEAN – Vol. 43

By Dr. Andrew Stotz, CFA

We highlight 14 stocks in ASEAN that look interesting to us based on our FVMR Methodology
Portfolio changes: Four stocks remain, 10 stocks added to our portfolio
Since its inception, the portfolio has generated a before-fee total return of 181% versus MSCI ASEAN’s 24%

SPAC Talk : SPACs and the AI Wave

There are no new SPAC IPOs to report for month of June so far, nor any new IPO registrations.
YTD, there have been only 15 IPO pricings, of which six came in February, and only nine new S-1 registrations have been filed thus far.
The SPAC IPO pipeline stands at just 45 versus a number that peaked at 310 in September 2021.

Tech Talk: Cybersecurity : What’s the Latest? How Big Is It? Who Is in the Game?

The global cybersecurity market was valued at $105 billion in 2022 and is projected to grow to $266 billion by 2027, a CAGR of 8.9%.
The number of cyberattacks is growing at a significant rate.
In 2021, there were more than 6.5 billion cyberattacks worldwide.

The Cyclicality of China Healthcare – Policy Environment, the Industry, and Investment Opportunities

By Xinyao (Criss) Wang

Policies will determine the development direction of the industry, which would then determine the profit model of companies. Companies that align with policy direction would outperform in the coming cycle.
The prosperity of the industry would determine the development trend of companies. For China healthcare, without a significant policy shift, it would be difficult for industry beta to emerge.
Domestic companies cannot achieve successful commercialization/internationalization mainly because they don’t have excellent enough products. It must be innovation that keeps companies alive and then thrive, rather than relying on policy changes.

JD/PDD/E-Commerce Sector Report: JD May Have Better-Than-Expected Performance in 618

Our recent channel check suggests that JD’s YoY growth during this year’s 618 major promotion event may exceed 15%, higher than the 10% growth seen in 2022.
The increase in air conditioner sales due to hot weather and the boost in sales of subsidized products are expected to be the main drivers.
We raise JD’s TP to US$ 32 and lower PDD’s TP to US$ 91 but have maintained JD’s SELL rating and PDD’s BUY rating.

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Jun 12

Daily Brief Thematic (Sector/Industry): Ohayo Japan|SPX Up Again; Fed Pause/Hike? NUGGET: Kyocera ISS Recommended Vote Doomed and more

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

In today’s briefing:

Ohayo Japan|SPX Up Again; Fed Pause/Hike? NUGGET: Kyocera ISS Recommended Vote Doomed, But…
KOSPI Index – Banks Hardly Participating
Weekly Stock Bullfinder – Week of 6/12

Ohayo Japan|SPX Up Again; Fed Pause/Hike? NUGGET: Kyocera ISS Recommended Vote Doomed, But…

OVERSEAS. SPX Closed +0.1% on Friday/WoW +0.4% confirming Bull Market; Fed Decision this week – Market See Pause; TESLA +4.1% Seals Deal with GM on its Super Chargers
JAPAN. NKY Futs flat vs Cash; Japan Continues to focus on AGMs; Record number Proposals submitted to 90 companies; Buybacks to hit record in 2023 say SMBC Nikko
NUGGET. Kyocera: ISS recommended AGM vote doomed but there is good news…

KOSPI Index – Banks Hardly Participating

The KOSPI Index has done well in recent weeks, months, but financials are hardly participating
There are vast differences amongst the financial in Korea, not only large Chaebol-like banks
Kakaobank, one of few listed internet banks in the world, is unique with ROA expansion

Weekly Stock Bullfinder – Week of 6/12

By Weekly Stock Bull Finder

“Big Infrastructure”- Under the Surface Megatrend Continues While AI/semiconductors and related Big Tech names such as Microsoft, Nvidia, Meta, Alphabet, etc. capture significant attention within the business media today, secular growth pockets in the infrastructure space don’t seem to be gathering as much attention as it probably should deserve in the infrastructure space.
As shown in recent legislation, one of the few areas of agreement within a divided US Congress is infrastructure investment and spending.
Passed in November 2021, the the $1.2 trillion bipartisan Infrastructure Investment and Jobs Act unleashed $550 billion in new spending for things like roads and bridges ($110B), power grid modernization ($65B), railroads ($66B), water infrastructure ($55B), airports ($25B), etc.

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Jun 11

Daily Brief Thematic (Sector/Industry): Semiconductor Events Deserving Your Attention @ 10/6/23 and more

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

In today’s briefing:

Semiconductor Events Deserving Your Attention @ 10/6/23
HDFC Ltd – Funding Benefits Can Be Immediate, Substantial
GEM Weekly (9 Jun 2023): China and Taiwan Trade, Inflation; TSMC, Realtek, MediaTek

Semiconductor Events Deserving Your Attention @ 10/6/23

By William Keating

WSTS updates global semiconductor FY2023 forecast to reflect a 10% YoY decline
TSMC’s May revenue jumps 19.4% MoM reflecting the generative AI-driven surge in orders from NVIDIA
Intel plumbs new depths with a ridiculous IDC SAM analysis

HDFC Ltd – Funding Benefits Can Be Immediate, Substantial

HDFC Ltd will merge into HDFC Bank perhaps within some weeks
Amalgamation presumed benefits are a long list: scale, cross-sell, funding, loan mix, etc
Improvements in total funding costs may be immediate and significant, beyond expectations

GEM Weekly (9 Jun 2023): China and Taiwan Trade, Inflation; TSMC, Realtek, MediaTek

By Wium Malan, CFA

The Global Emerging Markets Weekly provides a summary of the key news and related developments impacting the largest countries and constituents of the Global Emerging Markets equity indices.
Macro data points:Chinese foreign trade and inflation data, Taiwan exports
Companies mentioned:Taiwan Semiconductor (TSMC) (2330 TT), Realtek Semiconductor (2379 TT), Mediatek Inc (2454 TT)

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Jun 10

Daily Brief Thematic (Sector/Industry): Japan Weekly | IHI and more

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

In today’s briefing:

Japan Weekly | IHI, KHI, Kyocera
Tencent/SEA/Unity/Krafton: More Shooting Games Are Emerging, a Summary of Our Recent Channel Checks
Chinese Computer Maker Says Its Chip Was Made With ‘Support’ From Intel

Japan Weekly | IHI, KHI, Kyocera

Japanese stocks up +2% for the week taking year-to-date gains to 18%.
Lots of thematic reasons to buy – AI, Hydrogen, foreign buying, weak yen, and “not China”
ISS has Kyocera in its cross-hairs. We still think IHI and KHI are cheap despite this weeks wins

Tencent/SEA/Unity/Krafton: More Shooting Games Are Emerging, a Summary of Our Recent Channel Checks

We recently visited some start-up game companies in China and concluded that the Chinese gaming market has entered a matured period of competition for existing users;
Tencent’s games remain relatively stable, but information about new RMB 10bn level blockbusters is still unknown. New shooting games continue to appear, putting pressure on existing survival shooting games;
We (1) maintain our BUY for Tencent and Unity, (2) maintain SELL for Sea, and (3) downgrade Krafton to SELL to reflect the new competition that shooting games will face.

Chinese Computer Maker Says Its Chip Was Made With ‘Support’ From Intel

By Caixin Global

Chinese computer manufacturer Powerleader Computer System Co. Ltd. is fending off allegations that its new central processing unit (CPU) is an old Intel chip in disguise, saying it was developed with support from the U.S. chipmaking giant.
The Shenzhen-based company unveiled its first-generation Powerstar P3-01105 CPU in early May.
Chairman Li Ruijie said at the launch event that the chip, designed mainly for desktops in the commercial market, is based on Intel’s x86 architecture under a collaboration with the U.S. firm.

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Jun 09

Daily Brief Thematic (Sector/Industry): Ohayo Japan |Jobless Claims Surge Powers SPX to Bull Mkt; NUGGET: Embrace Activists ! Says JPX CEO and more

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

In today’s briefing:

Ohayo Japan |Jobless Claims Surge Powers SPX to Bull Mkt; NUGGET: Embrace Activists ! Says JPX CEO
China Tourism and Hospitality Industry: Set for Stronger Momentum Ahead
Thoughts On The Luxury Market
AMZN/PDD/Shein/FUTU/TikTok: TikTok Launching “Mall” and “fully Managed” Model in the USA and UK

Ohayo Japan |Jobless Claims Surge Powers SPX to Bull Mkt; NUGGET: Embrace Activists ! Says JPX CEO

OVERSEAS. Surge in Jobless Claims lifts Bonds, rejuvinates Tech, and pushes SPX into Bull market territory ; Fed PAUSE seems a done deal; Another win for TESLA-GM joins Ford
JAPAN. NKY Futs +0.6% vs Cash; After yesterdays, stunning Value vs Growth reversal, now look for the reversal of that reversal ! Major SQ today. Remain bullish Japan.
NUGGET. Embrace Activists – Says JPX CEO. JPX playing their part; Investors doing their part. Corporates, your turn…still a lot to do..

China Tourism and Hospitality Industry: Set for Stronger Momentum Ahead

By Osbert Tang, CFA

Despite solid 1Q23 result, share price performance for China’s tourism and hospitality companies has been unexciting. This is unjustified and we expect a pick-up going forward.
While their earnings multiples are high at 31.0x and 21.6x for FY23 and FY24 respectively, they should be interpreted in the context of impressive FY23-24 average EPS growth of 51.4%.
Anecdotal evidences showed that positive momentum will sustain – Tongcheng Travel Holdings (780 HK), Trip.com (9961 HK), H World Group (1179 HK) and Fosun Tourism (1992 HK) will stay as beneficiaries.

Thoughts On The Luxury Market

By Alexis Dwek

Luxury stocks have been a key way for investors to play China reopening. The play on the rebound has clearly paid off.
European luxury companies, such as LVMH, Hermes, Richemont, Kering, and others, are seeing strong demand, somewhat dusting off Chinese data concerns.
However, data coming out of China is somewhat concerning. April shaky, May better.

AMZN/PDD/Shein/FUTU/TikTok: TikTok Launching “Mall” and “fully Managed” Model in the USA and UK

AMZN/PDD/ Shein: Amazon temporarily display the same discount and coupons (-)
FUTU: HK stock turnover remains lukewarm, while Futu is gaining market share in HK（-）
PDD/Shein: TikTok launching “Mall” and “fully managed” model in the USA and UK (-/-)

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Jun 08

Daily Brief Thematic (Sector/Industry): Ohayo Japan |Canada Hikes-Impacts US ?! NUGGET:M&A Rsrch(9552) and more

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

In today’s briefing:

Ohayo Japan |Canada Hikes-Impacts US ?! NUGGET:M&A Rsrch(9552), AI-Driven Ways of Doing Old Things
The Europeanization of the US Banking System Is on Its Way!
ANZ’s Suncorp Takeover – In Jeopardy
Blue Lotus Macro: No Short-Term Investors in the Short Term, Summary of Our Tour of China.
The Great Divide: Isetan and Hankyu Break Records as Regional Department Stores Close
China TMT Update: Ke/Nio/JD/BABA/PDD-Douyin Launches Self-Operated (1P) Store; Nio’s ET5;

Ohayo Japan |Canada Hikes-Impacts US ?! NUGGET:M&A Rsrch(9552), AI-Driven Ways of Doing Old Things

OVERSEAS. SPX fell -0.4% as UST Yields rose on back of surprise Canada hike; US swaps now pricing 67% Fed June skips vs 77% before; China Exports Collapse in May
JAPAN. NKY Futs -0.2% Discount to Cash; Likely Consolidation in Japan today with Tech weakness; Govt Passes Defense Bill to support Industry profits; SBI HD to start Carbon Trading Exchange
NUGGET. M&A Research (9552) -AI Driven Ways of Doing Old things in helping to solve the critical succession problem plaguing Japan’s SMEs

The Europeanization of the US Banking System Is on Its Way!

By Andreas Steno

The Fed is likely to present a new direction for regulation by the end of this month according to sources.
A 20% increase in capital requirements for bigger banks is being pondered, but how will it impact liquidity and credit in case?
The end-game is likely increased buffers and bond/cash holdings of banks. Bad for credit and lending growth but good for Government Bonds.

ANZ’s Suncorp Takeover – In Jeopardy

New RBA rate hike puts increased pressure on banks, furthering rift between banks
ACCC deadline to approve ANZ’s takeover of Suncorp Bank is moved to 28 July 2023
Significant change in Australian banking metrics from July 2022 takeover proposal

Blue Lotus Macro: No Short-Term Investors in the Short Term, Summary of Our Tour of China.

We continue to chat with venture capitalists (VC’s) and hedge fund managers in our tour of China.
Our takeaway is that Chinese government intend to nurture local governments into VC’s to (partially) replace land finance as a pillar of fiscal revenue;
The resulted policy measures and shifts will benefit STAR SSE as a politically oriented destination and EV/renewable sectors as national championships, at the expense of the consumer sector.

The Great Divide: Isetan and Hankyu Break Records as Regional Department Stores Close

By Michael Causton

Some Japanese department stores enjoyed record sales in FY2022 but the gap in performance accelerated between city centre stores and the rest.
While numerous regional properties continue to struggle, the best exemplars of urban department store retailing are flourishing as they become true luxury emporiums for the wealthy.
Department stores have rarely provided growth in either sales or OP but there is now a chance that the better chains will emerge as quite profitable entities.

China TMT Update: Ke/Nio/JD/BABA/PDD-Douyin Launches Self-Operated (1P) Store; Nio’s ET5;