Daily Brief Consumer: Li Auto, S.M.Entertainment Co, Tokyo Stock Exchange Tokyo Price Index Topix and more

In today’s briefing:

Li Auto: First Quarterly Profit, Route to Sustained Annual Profits Will Be Harder
(Mostly) Asia-Pac Weekly Risk Arb Wrap: Healius, Mincor, Osstem, Golden Energy, S.M.Entertainment
Passive Funds, Silent Shareholders, Are a Barrier to Corporate Governance

Li Auto: First Quarterly Profit, Route to Sustained Annual Profits Will Be Harder

First quarterly profit in 4Q’22 (first amongst the 3 main emerging brands) has raised expectations of full year profitability in ‘2023
Launch of BEV will increase production, R&D, platform depreciation and marketing costs
Despite our expection of revenues doubling y/y in ’23, profitability may not increase accordingly

There are 42 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal.
Four new deal was discussed on Smartkarma this past week: Australian Clinical Labs (ACL AU)/Healius (HLS AU), Wyloo/Mincor (MCR AU), JIC/Toshiba Corp (6502 JP), and MBk/ Osstem Implant (048260 KS).
Key updates took place for Essential Metals (ESS AU), Golden Energy & Resources (GER SP), and S.M.Entertainment Co (041510 KS).

While policy holdings have declined, passive funds have appeared among the top shareholders of many companies. The Bank of Japan’s ETF purchases have accelerated this growth.
The question is whether the passive funds that have appeared as major shareholders in each company are exercising their voting rights on reasonably reasonable basis that fulfills their fiduciary duties.
In reality, engagement is limited to a few companies due to the large number of portfolio companies and low management fees.This implies that the same is true for proxy voting.

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

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