In today’s briefing:
- MOG Digitech (1942 HK): What the Flow Is Going On?
- India – Positioning on Some Interesting Names
- China to Finally Allow Group Tours to Korea and Japan?
- Insulet’s Lawsuit Against Eoflow, Medtronic’s Tender Offer, and Eoflow’s “Special Sauce”
- Inpex (1605 JP) – Earnings, Forecasts and a BIGLY Buyback (Aug 2023 Version)
- Alibaba (9988 HK): 1Q24, Brilliant Result After Reorganization, 90% Upside
- Alibaba: A Quick Take on 1QFY24
- Hongkong Land: Exchange Square Sale Would Be BIG News. (If True)
- StubWorld: Japex/Inpex, Amorepacific, Wynn, Shimao, Takara, Silicon Integrated/United Micro
- Two Noteworthy Issues in Korea’s SSF/SSO Selection in September Round
MOG Digitech (1942 HK): What the Flow Is Going On?
- MOG Holdings (1942 HK) has been skyrocketing in price since the start of the year. Remarkably, there is little change in the number of shares that trade daily.
- MOG Holdings (1942 HK) has a market cap of US$6.44bn and trades at a modest Price/Sales ratio of 75x and an equally modest Price to Book Value of 89.5x.
- Liquidity has improved to the point where the stock could be added to some indices. However, there is a precedent of stocks not being added following market participant feedback.
India – Positioning on Some Interesting Names
- Power Finance, Astral, IDFC First Bank, Cummins India, HDFC Asset Management, Ashok Leyland, Polycab India and Supreme Industries have all run up over the recent past and have investor attention.
- The increase in market cap has put the stocks on active manager radars and could also result in the stocks being added to global indices in the near future.
- We take a look at the positioning on the stocks and recommend pair trades to reduce market risk while trying to capture alpha.
China to Finally Allow Group Tours to Korea and Japan?
- In the past several days, there have been numerous new flow that the Chinese government is likely to allow group tours to South Korea and Japan in the coming days.
- The group tours from China to South Korea which has been banned since March 2017, are expected to resume after six years, according to the Korean Embassy in China.
- Nikkei Asia also reported on 9 August that the Chinese government is ready to allow group tours to Japan as early as this week.
Insulet’s Lawsuit Against Eoflow, Medtronic’s Tender Offer, and Eoflow’s “Special Sauce”
- Insulet Corp (PODD US)’s lawsuit against Eoflow (294090 KS) caused a sharp decline in Eoflow’s share price today (down 10.7% to 24,950 won).
- Insulet is accusing Eoflow of hiring several senior personnel that have helped Eoflow to develop a product that could take away market share from Insulet.
- The most important factor may be Eoflow’s “special sauce” which is some kind of technology/mechanism that allows this 17% greater efficiency/convenience for the wearable EOPatch insulin device.
Inpex (1605 JP) – Earnings, Forecasts and a BIGLY Buyback (Aug 2023 Version)
- A year ago I wrote that same headline as Inpex Corp (1605 JP) reported H1 results, a change in forecasts, and a bigly buyback.
- Yesterday, Inpex reported FY2023 H1 results, a change in forecasts, and a bigly buyback.
- The mechanics are the same. The impact is a bit different, but it is worth looking at. Then there is the event on 28 February 2024.
Alibaba (9988 HK): 1Q24, Brilliant Result After Reorganization, 90% Upside
- The revenue growth rate rose to 14% in 1Q24, compared to the past four stagnant quarters.
- All businesses continued to improve their margins, so that the general operating margin rose to 19% in 1Q24 versus 12% in 1Q23.
- We believe the re-organization is successful and the stock price is overly impacted. Buy.
Alibaba: A Quick Take on 1QFY24
- Alibaba (ADR) (BABA US)‘s 1QFY24 revenue and OP beat consensus by RMB 9.2bn and RMB 14.4bn respectively, possibly on the back of a successful 6.18 shopping festival.
- It looks like Alibaba Group Holding (9988 HK) has decided to abandon its New Retail Strategy and instead, put more effort into e-commerce, especially on popular platforms like Taobao and Tmall.
- Although this is a good-sign and could rally the stock short-term, we would still steer clear of Alibaba as we remain skeptical about the overall health of the Chinese economy.
Hongkong Land: Exchange Square Sale Would Be BIG News. (If True)
- According to Sing Tao, two PRC firms and a mainland bank have formed a consortium to acquire Hongkong Land (HKL SP)‘s 33-storey Three Exchange Square.
- This “news” is straight out of left field. For its part, HKL said the market rumour is pure speculation.
- HKL’s P/B of 0.24x is closing in on its all-time low of 0.21x during the depths of Covid.
StubWorld: Japex/Inpex, Amorepacific, Wynn, Shimao, Takara, Silicon Integrated/United Micro
- For a change of pace, this insight briefly canvasses a clutch of Holdco’s trading at extreme levels.
- Preceding the chart-heavy insight are the current setup/unwind tables for Asia-Pacific Holdcos.
- These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation >20%.
Two Noteworthy Issues in Korea’s SSF/SSO Selection in September Round
- Recent information leaked through local media reveals that KRX has ultimately opted not to list Ecopro Co’s SSF in the upcoming September round.
- Given the unusually high trading volume of at-the-money (ATM) options in the local SSO market, the market’s interest in covered calls for dividend-yielding stocks can be substantial.
- So, we should pay attention to stocks whose SSO is already listed or will be newly listed in September among those that have shifted their ex-dividend dates to post-dividend confirmation.
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