In today’s briefing:
- Hong Kong Aerospace Tech’s (1725 HK) US$1bn Rocket-Launch Site
- IQIYI Follow-On Offering – Might Be Expected but Its Track Record Is…
- ETF Arbitrage in Korea: Names Suitable for Pair Trades
- Money Forward: Top Line Expands, Yet to See Meaningful Turnaround in Profitability
Hong Kong Aerospace Tech’s (1725 HK) US$1bn Rocket-Launch Site
- On the 9th of January, 2023, the Republic of Djibouti signed an MOU with Hong Kong Aerospace Technology (1725 HK) (HKAT) to develop a (reported) US$1bn international commercial “spaceport”.
- In the middle of last year, Djibouti announced plans to launch two nanosatellites to facilitate farming and other related activities.
- HKAT, a recent back-door listing, has a market cap of US$258mn. Wholly-owned subsidiary Gang Hang Ke (Shenzhen) Space Technology, has been successfully involved in the launch of ten satellites.
IQIYI Follow-On Offering – Might Be Expected but Its Track Record Is…
- IQIYI aims to raise around US$500m via a follow-on ADS offering.
- While the company hasn’t stated its use of proceeds, it will probably use most of it to redeem convertible notes
- In this note, we will talk about the deal dynamics and run the deal through our ECM framework.
ETF Arbitrage in Korea: Names Suitable for Pair Trades
- As for the one using the creation/redemption mechanism, the tracking error (market value – NAV) is still too tight to call this an arbitrage opening.
- Then, at this point, we need to pay attention to ETF arbitrage from a pair trade perspective. There are a total of 3 pairs we can consider for this.
- The mean reversion cycle is still not short. However, the diversion range is not extensive, so we can aim for a relatively stable setup in a market with increased volatility.
Money Forward: Top Line Expands, Yet to See Meaningful Turnaround in Profitability
- Money Forward (3994 JP) reported 4QFY11/2022 results yesterday. Revenue increased 42.5% YoY to JPY6.2bn (vs consensus JPY6.0bn) driven by growth in both MF Business and MF Home.
- Operating losses for the quarter widened to JPY2.2bn (34.8% of revenue) from JPY661m (15.2% of revenue) in the same quarter last year (vs consensus JPY2.0bn).
- Though MF’s top line continues to grow, we have not yet seen a meaningful improvement in its profitability, and we think, MF’s shares are overvalued compared to its counterpart freee.
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