In today’s briefing:
- Merged Lotte Confectionery: Nearly Guaranteed Early Bird for KOSPI 200 Inclusion
- BYD 300-10 Short Zone to Press on 240 Support
- Amorepacific Stub: Reversion Trading on Current Diversion Ahead of 2Q Earnings Release
- Cyberagent (4751) | More than a One-Hit Wonder
- China Internet Weekly (25Jul2022): Alibaba, Tencent, NetEase, IQiyi, Miss Fresh
- AGM Is the Highest Body for a Company, but Have Japanese Companies Got Too Used to It Not Being So?
Merged Lotte Confectionery: Nearly Guaranteed Early Bird for KOSPI 200 Inclusion
- Lotte Confectionery’s screening period for the upcoming rebalancing will be July 20 to October 31, with an increased number of listed shares resulting from the merger.
- To fail inclusion, it must fall below Hyundai Greenfood. There is a market cap gap of ₩300B, suggesting the possibility of inclusion in December is quite high.
- Lotte Confectionery may benefit from concentrated flow from an early stage, given that the outline of inclusion/exclusion candidates for the upcoming rebalancing is still relatively vague.
BYD 300-10 Short Zone to Press on 240 Support
- BYD (1211 HK) is a short on upticks near the gap and physical resistance for a decline to pressure intermediate support at 240 (break expected).
- Sell volumes spiked on the jolt down with sellers waiting overhead on a secondary bounce attempt.
- RSI shows a compelling bearish set up after topping at the 70+ sell zone with bear divergence that supports a downside surprise.
Amorepacific Stub: Reversion Trading on Current Diversion Ahead of 2Q Earnings Release
- At last Friday’s close, the Amorepacific Group (002790 KS) stub deserves our attention as it is in a diversion at a -1.58σ on a 20D moving average.
- Recent valuation trends and institutional flows also do not show anything unusual. So the current diversion between them should be seen as a temporary distortion.
- Amorepacific reacts more sensitively than AmoreG in the event of a lower-than-expected result on the 2Q earnings release. So now may be the right entry time to target reversion trading.
Cyberagent (4751) | More than a One-Hit Wonder
- Supersized profits in the game division will of course normalise, but there are strategies to extend profits in the segment
- At 7x EV/EBITDA we think the market has become too pessimistic on the long-term outlook for not only games, but also internet advertising and media
- The company will release Q3 results in three days time – we expect a them to beat consensus
China Internet Weekly (25Jul2022): Alibaba, Tencent, NetEase, IQiyi, Miss Fresh
- Alibaba’s Freshippo expands to two inland cities, which reflects its success in coastal areas.
- Online game’s revenue and players decreased for the first time in 14 years.
- NetEase set up the second game studios in the United States.
AGM Is the Highest Body for a Company, but Have Japanese Companies Got Too Used to It Not Being So?
- The fact at least 80% of votes are approved in company agenda shows how large the presence of ruling shareholders is and how little interest there is from ordinary shareholders.
- The ruling shareholder structure with cross-shareholdings has made this watered-down for Japanese companies. Companies should strive to increase shareholder interest. To this end, information disclosure efforts must be promoted.
- Companies are encouraged to make efforts to disclose sufficient information to shareholders, not after AGM, but before it, which is the highest body of the company in the first place.
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