From Union Budget to Japan Watch to Perfect Medical here's what you need to know this week.

The Smartkarma Weekly Starter is a newsletter published every Sunday and pulls together the top research notes published over the last 7-days from across our platform.

In this week's edition of the Smartkarma Weekly Starter, we get a quick rundown on the top engaged insights for the week.

Start your week off on the right foot with:

JAPAN ACTIVISM: Strategic Capital Target Daido (3205) Now A Murakami Target Too

Daidoh was targeted by activist Strategic Capital for 18mos. They bought to 32% and this past AGM "won" small. Murakami-san has joined the fight making the next AGM/EGM more likely an activist win.

• Small cap Japanese manufacturer and purveyor of apparel Daidoh Ltd (3205 JP) has consistently been a target for value investors. In late 2022, Strategic Capital went over 5%.
• They have bought more, and as of end-March, they declared 24.85% of TSO (28% of voting rights), but they have 33%. They made proposals for the AGM. They won one.?
• Now Murakami-san has bought in, going over 5%. This gets interesting. Together they have 39.4% as of last week, and probably more now. That should get them 50+% next AGM/EGM.

By Travis Lundy in Event-Driven

NVIDIA's Conundrum...

When Intel dominated the data centre and minted tens of billions annually, its customers benefited even more, minting hundreds of billions. Will it be the same for NVIDIA?

• NVIDIA's data center revenues tripled YoY in CY 2023 and are on track to more than double in CY 2024
• When Intel dominated the data centre and minted tens of billions annually, its customers benefited even more, minting hundreds of billions.?
• If NVIDIA's business model succeeds, its customers will succeed even more. This will make it extremely difficult for NVIDIA to remain the #1 global market cap stock.?

By William Keating in Equity Bottom-Up

The Beat Ideas- Ratnaveer Precision Engineering: Fueled with Capacity Expansion

Expansion of capacity to double the capacity and fund raise to increase the bottom line, with waste converted into raw material for economies of scale.

• 23,000 MT Capacity expansion would double the current capacity to 49,000 MT??
• INR 65 crores of Fund Raise would help increase the bottom line
• Backward integration of waste converted into raw material, ensuring economies of scale

By Sudarshan Bhandari in Equity Bottom-Up

Perfect Medical (1830 HK): Resilient FY24 And 12.5% Trailing Dividend Yield

We summarize the FY24 results of Perfect Medical. With an attractive trailing yield of 12.5%, net cash and ROE> 50% this is a company worth exploring

• Perfect Medical Health (1830 HK) reported flat revenue/profit growth for FY24 due to a weak Q4 that plagued the entire HK consumer space. H2FY24? revenue/profit growth was -6.3%/-12.5%
• The company paid a generous dividend of 31.5 cents for FY24 (vs. 30.0 cents), resulting in a 12.5% dividend yield.
• We will follow up with more details after the earnings call and presentation.?

By Sameer Taneja in Equity Bottom-Up

Shortlist Of High Conviction Ideas: Income, Value, and Margin of Safety - July 2024

We compile our selection of small and mid-cap names with our desired characteristics of high dividend yields, value, and margin of safety.? We filter our top picks amongst those names.

• We compile our selection of small and mid-cap names with our desired characteristics of high dividend yields, value, and margin of safety.
• Our top picks are Perfect Medical Health (1830 HK), The Keepers Holdings (KEEPR PM), Taste Gourmet (8371 HK), Uchi Technologies (UCHI MK), and Ginebra San Miguel (GSMI PM).
• Despite weak data, HK stock earnings and dividend payouts in the results have been resilient, resulting in solid dividend yields of over 10%.

By Sameer Taneja in Equity Bottom-Up

Union Budget 2024- What to Expect?

The upcoming Union Budget 2024 under Modi Government 3.0 will focus on job creation, agriculture, infrastructure, and improving fiscal deficit without touching capital gains tax.

• All eyes will be on the upcoming Union Budget 2024 in July, marking the first of Modi Government 3.0.
• Job creation, tackling agriculture woes including farmers income and sustaining expenditure on infra are expected to be the core deliverables.
• Moreover, fiscal deficit is expected to continue its improvement run. Capital gains tax would not be touched but GST network could broaden.

By Nitin Mangal in Macroeconomics

Precot Limited: A Niche Technical Textile Player

Decade-old company specializing in cotton yarn spinning and technical textile set to boost margins and revenue through expansion in FY24, with peer comparison for investment assessment.

• Niche Player in Cotton yarn spinning and Technical Textile with decadal experience.
• Expansion in Technical Textile during FY24 will significantly improve the margin profile and revenue for the company.
• Peer Comparison and assessment at multiple metrics to assess the suitability of investment.

By Sudarshan Bhandari in Equity Bottom-Up

Japan Watch – Why BoJ Will NOT Intervene Anytime Soon

• Recently, numerous JPY pairs have breached the levels where the BoJ / MoF intervened in April/May, prompting markets to wonder if (and when) authorities might step in again to support the Yen.
• The reaction in USDJPY post key events/meetings has been consistently uniform for the past 12-18 months.
• Markets build up a hawkish narrative prior to the event, only to unwind positions when the news turns out to be less hawkish than anticipated.

By Andreas Steno in Macroeconomics

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