In today’s briefing:
- SEA & TSMC ADR Single Stock Futures
- China ADRs Delisting – SEC Sets the Clock Ticking and Sends China ADRs Tripping
- Grab (GRAB US) – A Rough Ride for Now but Smoother Terrain Ahead
- Hong Kong Buybacks: China Gas
- LG Energy – Electrifying Downside Potential
SEA & TSMC ADR Single Stock Futures
- The SGX (SGX SP) has launched Single Stock Futures (SSF) on Sea Ltd (SE US) and Taiwan Semiconductor Sp Adr (TSM US) and both products starting trading on 28 February.
- The introduction of SSF on SEA takes on added significance following the inclusion of the ADR in the SIMSCI INDEX and the significant weight of the ADR in the index.
- We take a look at how market participants can use the Single Stock Futures for exposure to the stock, hedging and portfolio risk management.
China ADRs Delisting – SEC Sets the Clock Ticking and Sends China ADRs Tripping
- On 8th Mar 2022, Securities Exchange Commission (SEC) added five China ADR names to its provisional list of issuers under the Holding Foreign Companies Accountable Act (HFCAA).
- There is nothing new about the list, on 2nd Dec 2021, SEC had issued final amendments to implement the HFCAA which had already spoken about the list and its implications.
- In this note, we’ll talk about the latest developments its possible timelines and implications.
Grab (GRAB US) – A Rough Ride for Now but Smoother Terrain Ahead
- The headlines for Grab‘s recent results looked encouraging but the higher driver and consumer incentives hit revenues and profitability towards the end of the year but this is temporary.
- Grab (GRAB US) is facing stiffer competition in the region, especially from GoTo and Shopee Food but is defending its lead and preparing for higher growth in mobility requiring investment.
- Increasing exposure in digital financial services plus more focus on verticals such as online groceries bodes well for future growth. A market cap of US$12.5bn with US$6.8bn in net cash.
Hong Kong Buybacks: China Gas
- We analyze statistics on top repurchases over one week, one month, one quarter and one year periods ended on Mar 11 based on HKEx daily reports.
- In the past 7 days, the top 3 companies that repurchased the most shares from the market were China Gas (384 HK), Dynam Japan (6889 HK), Tianli Education (1773 HK).
- In the past 30 days, the top 3 companies that repurchased the most shares from the market were China Mobile (941 HK), China Gas (384 HK), Man Wah (1999 HK).
LG Energy – Electrifying Downside Potential
- LG Energy offers extremely inflated valuation multiples that are even more stretched than frothy peers.
- It also offers numerous other red flags due to fire risks and a regional production capacity spread that could prove disadvantageous.
- Recent commodity price surges also impair the competitiveness of EVs overall but also LG Energy’s NMC chemistry vs. LFP.
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