In today’s briefing:
- Toshiba – As Bad As It Gets?
- Macro Watch: The Banking Crisis Is Likely to Accelerate in Coming Weeks
- StubWorld: Impairments Weigh Down Kingsoft Solid Results
- MSCI Korea May QCIR: Potential Adds, Deletes & ‘Extreme Price Increase’ Triggers
- CUBox IPO Valuation Analysis
- HK Buybacks Q1 2023: 8 Names Are 90% of the Total – AIA, Tencent, StanChart, Greatwall the Big 4
- Merdeka Battery Materials IPO – Commercializing One of the World’s Largest Nickel Mines
- Singapore Banks: Breaking Out
- ACCC Sour on ANZ/Suncorp Bank Deal Makes for A Good Trade
- Merdeka Battery Materials IPO Peer Comparison & Valuation – Might Be Worth a Shot
Toshiba – As Bad As It Gets?
- Toshiba results looked rather poor at the headline on account of additional one-off costs leading to a guidance downgrade to ¥95bn in OP.
- Despite that, we see some small positive signs across the various industrial segments.
- On balance, however, the downgrade and tight lips on the JIP bid leave little to be positive about in the near term.
Macro Watch: The Banking Crisis Is Likely to Accelerate in Coming Weeks
- The banking crisis will continue to rage until the Fed and the ECB accept the underlying reason for the deposit flight
- Banks cannot cope with an über-inverted yield curve, why cuts are needed asap to contain the situation
- It will likely get worse before it gets better consequently
StubWorld: Impairments Weigh Down Kingsoft Solid Results
- Despite the topline growth of 20%, Kingsoft Corp (3888 HK) recorded a loss in FY22 after a large impairment for its holding in Kingsoft Cloud (KC US).
- Preceding my comments on Kingsoft are the weekly setup/unwind tables for Asia-Pacific Holdcos.
- These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation >20%.
MSCI Korea May QCIR: Potential Adds, Deletes & ‘Extreme Price Increase’ Triggers
- Based on closing price from 3 April, we forecast 5 adds and 4 deletes for the MSCI Korea Index at the May QCIR.
- Three of the adds are close to triggering the extreme price increase criteria – if triggered, index inclusion could be deferred to a subsequent index review.
- Retail investors have been buying three of the potential adds, while foreign investors have taken the lead on two. Foreign investors have been sellers on all the potential deletions.
CUBox IPO Valuation Analysis
- Our base case valuation of CUBox is target price of 34,172 won per share, which is 47% higher than the high end of the IPO price range of 23,200 won.
- Our base case valuation uses our estimated sales of 24.5 billion won for the company in 2023 and P/S multiple of 17.2x.
- Given that CUBox is a leading player in the AI technology driven facial recognition in Korea, many investors are likely to pay higher premium for its technology.
HK Buybacks Q1 2023: 8 Names Are 90% of the Total – AIA, Tencent, StanChart, Greatwall the Big 4
- In Q1 2023, 86 different Hong Kong-listed companies bought back shares either locally or on foreign exchanges. Total buybacks were HK$22.856bn.
- 8 Companies made up 90% of the total. On average, they bought back shares 4 days out of every 10 within the quarter.
- A lot of the smaller companies doing buybacks were significant portions of their volume.
Merdeka Battery Materials IPO – Commercializing One of the World’s Largest Nickel Mines
- Merdeka Battery Materials (2012725D IJ) is looking to raise around US$580m in its Indonesian IPO.
- It has the largest resource globally in terms of contained nickel at the Konawe Nickel Mine (the SCM Mine), according to Wood Mackenzie.
- MBM aims to become a vertically integrated battery materials player. Through a series of acquisitions, it owns one of the world’s largest nickel mines.
Singapore Banks: Breaking Out
- A record 25.3% of Global funds have exposure to Singapore Banks, breaking out of a range of between 18% and 24% over the last decade.
- DBS Group favoured by investors, owned by 17.7% of funds compared to 11.2% in UOB and 7% in OCBC.
- After the recent rotation, Singapore Banks are now the 4th most widely held Bank exposure, behind US, Indian and Canadian Banks but ahead of fellow European and Asian peers.
ACCC Sour on ANZ/Suncorp Bank Deal Makes for A Good Trade
- This morning, ACCC announced that it had released a “Statement of Preliminary Views” on the ANZ/Suncorp deal and sought further views.
- For now, the ACCC questions “the nature, likelihood, and extend of claimed public benefits” including synergies or claims regarding investment in Queensland.
- Based on my reading of the document, this view is likely to carry over through the final decision due mid-June 2023. That means there’s likely a trade here.
Merdeka Battery Materials IPO Peer Comparison & Valuation – Might Be Worth a Shot
- Merdeka Battery Materials (2012725D IJ) is looking to raise around US$580m in its Indonesian IPO.
- It has the largest resource globally in terms of contained nickel at the Konawe Nickel Mine (the SCM Mine), according to Wood Mackenzie
- In this note, we undertake a quick peer comparison, talk about our earnings assumptions, and share our thoughts on valuation.
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