In today’s briefing:
- LS Materials: A Sharp Increase in Short Selling Post Block Deal Sale
- 3M Company: Global Market Dynamics and Restructuring Initiatives! – Major Drivers
- Bullish Outlook Intact; Downgrading Industrials and Transportation to Underweight
- Hutchmed China Ltd (13.HK/HCM.US) – Time to Reassess Valuation Prospects Despite the Pain Points
- 4Q Follow-Up – Copro-Holdings (7059 JP)
- Sustainable Investing Surveyor – Focus on CBAK Energy Technology, Inc. (CBAT)
- Stanley Black & Decker Inc.: How Are They Executing Product Innovation and Supply Chain Optimization? – Major Drivers
LS Materials: A Sharp Increase in Short Selling Post Block Deal Sale
- On 14 June, KeiStone Partners sold 2.51 million shares (3.7% of outstanding shares) of LS Materials at the block deal sales price of 26,350 won per share.
- In the next several weeks/months, there will likely be increased concerns about additional selling of LS Materials by KeiStone Partners.
- Due to recent block deal sale, higher short selling volume, and concerns about additional selling by Keistone Partners, LS Materials shares could face further weakness in the next 6-12 months.
3M Company: Global Market Dynamics and Restructuring Initiatives! – Major Drivers
- In the first quarter of 2024, 3M reported significant achievements and detailed the financial impacts of strategic decisions, including the successful spin-off of its Health Care business, now known as Solventum.
- The separation into two distinct entities is designed to enhance focused growth and improve capital allocation tailored to different market dynamics, thereby representing a strategic realignment to boost shareholder value.
- This quarter also saw the company addressing its legal challenges with settlements in the Public Water Suppliers and Combat Arms litigation, resulting in predictable future cash flows related to these issues.
Bullish Outlook Intact; Downgrading Industrials and Transportation to Underweight
- Despite some more mixed signals, a majority of market dynamics still suggests a risk-on environment. Our bullish outlook since early November 2023 remains intact with SPX and QQQ uptrends intact.
- Near-Term we continue to expect to see support at the 20-day MA and 21-day EMA on the SPX (currently 5325-5330) and QQQ (currently $460-462).
- Longer-Term, we’re bullish as long as the SPX is above 5191 and QQQ is above $449. We’d need to see breakdowns below these levels in order to shift to neutral.
Hutchmed China Ltd (13.HK/HCM.US) – Time to Reassess Valuation Prospects Despite the Pain Points
- Takeda’s sales team is fully prepared for the launch of fruquintinib in EU. 2024 full-year overseas sales may once again beat the expectations. High growth is expected from 2024 to 2026.
- Peak sales of fruquintinib + savolitinib + surufatinib that recorded in HUTCHMED’s revenue is expected to be over US$750 million.Without considering other revenue, market value would reach about US$4.5 billion.
- HUTCHMED’s pipeline lacks blockbuster products and the indications are small. With the rise of PROTAC, small molecule drugs would face challenges, which would test the management’s resilience in the future.
4Q Follow-Up – Copro-Holdings (7059 JP)
- FY2024/3 Earnings Result Summary: COPRO-HOLDINGS. Co., Ltd., (hereafter, the Company) announced the full year results for FY2024/3 after the market close on Tuesday, May 14, 2024.
- The key consolidated figures include net sales of ¥24,098 mn (+28.2% YoY), operating profit of ¥2,141 mn (+62.0% YoY), ordinary profit of ¥2,211 mn (+67.0% YoY), and profit attributable to owners of parent (hereafter, net profit) of ¥1,463 mn (+69.3% YoY).
- Having posted a dramatic increase in net sales due to record hiring, COPRO CONSTRUCTION. Co., Ltd., which operates the Company’s core construction technician dispatching business, made substantial contributions to increased earnings.
Sustainable Investing Surveyor – Focus on CBAK Energy Technology, Inc. (CBAT)
- The WTR Sustainable Index was down 1.7% W/W versus the S&P 500 Index (up 1.6%), the Russell 2000 Index (down 1.0%), and the Nasdaq Index (up 3.5%).
- Energy Technology (14.8% of the index) was down by 0.6%, while Industrial Climate and Ag Technology (59.7% of the index) was up by 0.3%, ClimateTech Mining was down 11.4%, and Advanced Transportation Solutions (19.9% of index) was down 6.6%.
- Top 10 Performers: NRM, LICY, BRDS, KULR, NEOV, PSIX, AMSC, FLUX, EOSE, VLI
Stanley Black & Decker Inc.: How Are They Executing Product Innovation and Supply Chain Optimization? – Major Drivers
- Stanley Black & Decker’s first quarter of 2024 revealed a financial landscape marked by both strategic progress and ongoing market challenges.
- The company’s emphasis on gross margin expansion and cash flow enhancement is key to navigating an uncertain macroeconomic environment that has negatively impacted market demand, particularly in the consumer and DIY sectors.
- On a positive note, Stanley Black & Decker’s global cost reduction program is advancing well, with $1.2 billion of the planned $2 billion in cost savings already achieved.
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