All Posts By

Smartkarma Daily Briefs

United States: Terra and more

By | Daily Briefs, United States

In today’s briefing:

  • This Week in Crypto – The Luna 2.0 Plan

This Week in Crypto – The Luna 2.0 Plan

By Coinstack

  • TerraForm Labs Prepares Airdrop for LUNA 2.0 Launch – The creators of LUNA and UST have announced plans to airdrop new LUNA tokens to holders as of the date stamp of May 7, 2022.
  • Old LUNA tokens will become called Luna Classic. While this is expected to represent much less than a penny on the dollar of the May 7 value, it gives Terra a chance to recover its ecosystem and builder community over time, which has been known for good UI/UX and ease of use.
  • While many wrote Ethereum off after the 2016 DAO Hack, Ethereum eventually more than recovered. We shall see what happens to Terra.

Before it’s here, it’s on Smartkarma

Japan: Tsuruha Holdings, Bank of Kyoto, Tokyo Stock Exchange Tokyo Price Index Topix, Otsuka Holdings, Fast Fitness Japan Inc and more

By | Daily Briefs, Japan

In today’s briefing:

  • MSCI Japan Index Rebalance: Short Build Up Continues as We Near Implementation Day
  • Bank of Kyoto (8369) Surprises With a Cross-Holding Sale Plan (Albeit Small)
  • About an Article on TSE Reorganization
  • Otsuka Holdings (4578 JP) 1Q22: Global Products Continued Double-Digit Revenue Growth
  • Fast Fitness Japan (7092): Confusion over Election of Directors

MSCI Japan Index Rebalance: Short Build Up Continues as We Near Implementation Day

By Brian Freitas

  • There are 22 deletions for the MSCI Japan Index at the May SAIR. The changes were expected and there was large short buildup prior to announcement of the changes.
  • Shorts have continued to increase to increase over the last week and there could be a reversal over the next few days as shorts start to cover.
  • Buying the deletions in the next few days and hedging with Tokyo Stock Exchange Tokyo Price Index Topix (TPX INDEX) futures could provide superior risk adjusted returns.

Bank of Kyoto (8369) Surprises With a Cross-Holding Sale Plan (Albeit Small)

By Travis Lundy

  • Bank of Kyoto (8369 JP) has been the poster child for “deep value” Japan traders and occasional wannabe activists. It has a huge equity portfolio which dwarfs market cap. 
  • Every year, twice a year (end of May and early December) Bank of Kyoto (8369 JP) releases a document for a meeting with analysts and press called Information Meeting.
  • This year’s is a little different in that it proposes sales of 10% of its equity portfolio. It’s “small” but worth thinking about. 

About an Article on TSE Reorganization

By Aki Matsumoto

  • I discussed the points of the Nikkei article on the prime market created by the TSE’s market reorganization.
  • Looking at the prime market as a whole, it is not significantly different from the TSE 1st Section. However, there were aspects where individual companies made progress in their efforts.
  • Since prime market has companies with small market capitalizations and depressed valuations, it is desirable to discuss increasing the quality companies that enhance profitability, growth potential and corporate governance.

Otsuka Holdings (4578 JP) 1Q22: Global Products Continued Double-Digit Revenue Growth

By Tina Banerjee

  • Otsuka Holdings (4578 JP) started 2022 on a strong note, with 13% y/y revenue growth in Q1. Growth was driven by four global products, which contributed 36% of total revenue.
  • Otsuka has terminated its global license agreements with Akebia Therapeutics related to vadadustat for the treatment of renal anemia and recorded an impairment loss of ¥24 billion.
  • Despite the impairment losses related to vadadustat, Otsuka reiterated 2022 guidance and expects double-digit growth in operating and net profits.

Fast Fitness Japan (7092): Confusion over Election of Directors

By Mita Securities

  • Fast Fitness Japan announced that 1) on April 25, it had received a letter from three of its major shareholders jointly proposing the election of directors and 2) on May 23, the company’s board of directors decided to oppose the shareholder proposal
  • The shareholder proposal was submitted in response to the board’s April 14 decision regarding director candidates
  • Despite the company’s solid fundamentals, such disruption in the governing structure could be an additional risk factor for the stock price in the near term

Before it’s here, it’s on Smartkarma

Financials: Bank of Kyoto, Dongzheng Automotive Finance, Tokyo Stock Exchange Tokyo Price Index Topix, Terra and more

By | Daily Briefs, Financials

In today’s briefing:

  • Bank of Kyoto (8369) Surprises With a Cross-Holding Sale Plan (Albeit Small)
  • SAIC Wins the Auction for the 71.04% Stake in Dongzheng, MGO Upcoming
  • About an Article on TSE Reorganization
  • This Week in Crypto – The Luna 2.0 Plan

Bank of Kyoto (8369) Surprises With a Cross-Holding Sale Plan (Albeit Small)

By Travis Lundy

  • Bank of Kyoto (8369 JP) has been the poster child for “deep value” Japan traders and occasional wannabe activists. It has a huge equity portfolio which dwarfs market cap. 
  • Every year, twice a year (end of May and early December) Bank of Kyoto (8369 JP) releases a document for a meeting with analysts and press called Information Meeting.
  • This year’s is a little different in that it proposes sales of 10% of its equity portfolio. It’s “small” but worth thinking about. 

SAIC Wins the Auction for the 71.04% Stake in Dongzheng, MGO Upcoming

By Arun George


About an Article on TSE Reorganization

By Aki Matsumoto

  • I discussed the points of the Nikkei article on the prime market created by the TSE’s market reorganization.
  • Looking at the prime market as a whole, it is not significantly different from the TSE 1st Section. However, there were aspects where individual companies made progress in their efforts.
  • Since prime market has companies with small market capitalizations and depressed valuations, it is desirable to discuss increasing the quality companies that enhance profitability, growth potential and corporate governance.

This Week in Crypto – The Luna 2.0 Plan

By Coinstack

  • TerraForm Labs Prepares Airdrop for LUNA 2.0 Launch – The creators of LUNA and UST have announced plans to airdrop new LUNA tokens to holders as of the date stamp of May 7, 2022.
  • Old LUNA tokens will become called Luna Classic. While this is expected to represent much less than a penny on the dollar of the May 7 value, it gives Terra a chance to recover its ecosystem and builder community over time, which has been known for good UI/UX and ease of use.
  • While many wrote Ethereum off after the 2016 DAO Hack, Ethereum eventually more than recovered. We shall see what happens to Terra.

Before it’s here, it’s on Smartkarma

Event-Driven: Tsuruha Holdings, Bank of Kyoto, Jiayuan Services Holdings Limited, Appen Ltd, Dongzheng Automotive Finance, Iljin Materials, Pushpay Holdings and more

By | Daily Briefs, Event-Driven

In today’s briefing:

  • MSCI Japan Index Rebalance: Short Build Up Continues as We Near Implementation Day
  • Bank of Kyoto (8369) Surprises With a Cross-Holding Sale Plan (Albeit Small)
  • Jinke & Jiayuan: Pledged Shares And Leveraged Property Developers
  • Appen (APX AU): Telus’ 48% Premium; 10% Short Interest; Potential ASX200 Deletion
  • SAIC Wins the Auction for the 71.04% Stake in Dongzheng, MGO Upcoming
  • Iljin Materials: Is the Potential Change in Compulsory Tender Offer Forcing Owner to Speed Up Sale?
  • BGH and Sixth Street to Lob an Offer for Pushpay?

MSCI Japan Index Rebalance: Short Build Up Continues as We Near Implementation Day

By Brian Freitas

  • There are 22 deletions for the MSCI Japan Index at the May SAIR. The changes were expected and there was large short buildup prior to announcement of the changes.
  • Shorts have continued to increase to increase over the last week and there could be a reversal over the next few days as shorts start to cover.
  • Buying the deletions in the next few days and hedging with Tokyo Stock Exchange Tokyo Price Index Topix (TPX INDEX) futures could provide superior risk adjusted returns.

Bank of Kyoto (8369) Surprises With a Cross-Holding Sale Plan (Albeit Small)

By Travis Lundy

  • Bank of Kyoto (8369 JP) has been the poster child for “deep value” Japan traders and occasional wannabe activists. It has a huge equity portfolio which dwarfs market cap. 
  • Every year, twice a year (end of May and early December) Bank of Kyoto (8369 JP) releases a document for a meeting with analysts and press called Information Meeting.
  • This year’s is a little different in that it proposes sales of 10% of its equity portfolio. It’s “small” but worth thinking about. 

Jinke & Jiayuan: Pledged Shares And Leveraged Property Developers

By David Blennerhassett

  • On the 21 May, Jinke Property (000656 CH) announced the forced sale of shares by its controlling shareholder. One day later, Jiayuan International (2768 HK) announced a similar event. 
  • Jinke’s 52.3%-owned Jinke Smart (9666 HK) has now announced an agreement to acquire Jiayuan International’s 73.56% stake in property service play Jiayuan Services Holdings (1153 HK). No price was announced.
  • In the past month, Jinke Property is down 24%, Jinke Smart 23%, Jiayuan International 54% and Jiayuan Services 80%. Jiayuan International and Jiayuan Services remain suspended.

Appen (APX AU): Telus’ 48% Premium; 10% Short Interest; Potential ASX200 Deletion

By Brian Freitas

  • Telus International (TIXT US) has made an unsolicited, conditional and non-binding indicative proposal to acquire 100% of Appen Ltd (APX AU) at A$9.5/share, valuing the company at A$1.17bn.
  • The offer is a 48% premium to the last close but a discount to longer-term VWAPs. It should require a bump for the Appen Board to unanimously recommend to shareholders.
  • Appen Ltd (APX AU) is a potential deletion from the S&P/ASX 200 (AS51 INDEX) at the June rebalance. Short interest is 10% of shares out. There will be covering.

SAIC Wins the Auction for the 71.04% Stake in Dongzheng, MGO Upcoming

By Arun George


Iljin Materials: Is the Potential Change in Compulsory Tender Offer Forcing Owner to Speed Up Sale?

By Douglas Kim

  • Heo Jae-Myeong, the CEO of Iljin Materials, is planning to sell his 53.3% stake in the company.
  • Potential buyers of Iljin Materials include Lotte, SK, LG, and POSCO.
  • The CEO Heo Jae-Myung could potentially receive greater amounts of money if he sells the company now, rather than waiting when the compulsory tender offer could be made into law.

BGH and Sixth Street to Lob an Offer for Pushpay?

By Arun George

  • Sixth Street and BGH Capital entered into a cooperation agreement with the aim to acquire Pushpay Holdings (PPH NZ) through a scheme of arrangement. They have a combined 20.3% stake. 
  • In addition to Sixth Street/BGH, Pushpay also noted expressions of interest from multiple parties. The high recurring revenue, profitability and cash generation make it a target. 
  • As the Australian takeover premium ranges from 20% to 40%, we think that a bid of at least A$1.46 (30% takeover premium) will be necessary for due diligence access. 

Before it’s here, it’s on Smartkarma

Consumer: Tsuruha Holdings, Britannia Industries, Aditya Birla Fashion and Retail Ltd, Kaveri Seed, Sapphire Foods, Jyothy Laboratories, Fast Fitness Japan Inc and more

By | Consumer, Daily Briefs

In today’s briefing:

  • MSCI Japan Index Rebalance: Short Build Up Continues as We Near Implementation Day
  • Britannia Industries (BRIT IN) | Time for a Good Snack
  • Aditya Birla Fashion and Retail – A Strong Recovery in Business, Particularly the Lifestyle
  • Kaveri Seeds – Revenue Fell 6% YoY in FY22 Due to Lower Cotton/Maize (Down 24%/16%) Volumes.
  • Sapphire Foods – Available Always in All Ways
  • Jyothy Laboratories – Sales in 4QFY22 Were in Line.
  • Fast Fitness Japan (7092): Confusion over Election of Directors

MSCI Japan Index Rebalance: Short Build Up Continues as We Near Implementation Day

By Brian Freitas

  • There are 22 deletions for the MSCI Japan Index at the May SAIR. The changes were expected and there was large short buildup prior to announcement of the changes.
  • Shorts have continued to increase to increase over the last week and there could be a reversal over the next few days as shorts start to cover.
  • Buying the deletions in the next few days and hedging with Tokyo Stock Exchange Tokyo Price Index Topix (TPX INDEX) futures could provide superior risk adjusted returns.

Britannia Industries (BRIT IN) | Time for a Good Snack

By Pranav Bhavsar

  • Aggression in adjacencies, market share gains and under indexed rural exposure presents an opportunity. 
  • COGS Inflation, Risk of downgrading in case of a further hike loom and is a potential risk. 
  • YTD Britannia Industries (BRIT IN) is an outperformer and could remain so.

Aditya Birla Fashion and Retail – A Strong Recovery in Business, Particularly the Lifestyle

By Motilal Oswal

  • A strong recovery in business, particularly the Lifestyle segment, saw 59% YoY jump in ABFRL’s 4QFY22 EBITDA backed by 25% YoY revenue growth and 210bp gross margin improvement.
  • Net debt at INR5b too was comfortable even after building inventory for the upcoming season and new stores.
  • With healthy recovery and growth momentum across verticals, we raise our FY23E/24E EBITDA by 7-8%, modeling strong 40% EBITDA CAGR over FY22-24E.
  •  

Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.


Kaveri Seeds – Revenue Fell 6% YoY in FY22 Due to Lower Cotton/Maize (Down 24%/16%) Volumes.

By Motilal Oswal

  • Revenue fell 6% YoY in FY22 due to lower cotton/maize (down 24%/16%) volumes.
  • Cotton seed volumes were impacted by lower cotton acreage and the use of illegal herbicide-tolerant Bt (HTBt) seeds, which impacted sales of branded seeds.
  •  
  • Maize volumes fell due to no sales to the government.

Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.


Sapphire Foods – Available Always in All Ways

By Motilal Oswal

  • The Indian Food Service Industry (FSI) is expected to clock 9% CAGR in the coming years, with QSRs likely to grow faster at 23% CAGR over FY20-25.
  • SAPPHIRE’s new scalable Restaurant economic model is a game-changer. Its omnichannel strategy and reduction in store sizes, along with other elements of the model, have led to a big shift in SAPPHIRE’s unit economics.
  • KFC India’s business is on a strong footing, with a healthy ADS and profitability.

Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.


Jyothy Laboratories – Sales in 4QFY22 Were in Line.

By Motilal Oswal

  • Sales in 4QFY22 were in line. Gross margin was affected due to elevated raw material prices.
  • Revenue growth is key for a company with sales of only ~INR22b. The likelihood of a consistent 15% sales growth (essential for any re-rating) continues to appear difficult, despite JYL’s efforts to ramp up its total and direct reach.
  • With margin likely to remain under pressure over the next few quarters due to high input costs, its earnings growth prospects remain weak.
  •  
  •  

Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.


Fast Fitness Japan (7092): Confusion over Election of Directors

By Mita Securities

  • Fast Fitness Japan announced that 1) on April 25, it had received a letter from three of its major shareholders jointly proposing the election of directors and 2) on May 23, the company’s board of directors decided to oppose the shareholder proposal
  • The shareholder proposal was submitted in response to the board’s April 14 decision regarding director candidates
  • Despite the company’s solid fundamentals, such disruption in the governing structure could be an additional risk factor for the stock price in the near term

Before it’s here, it’s on Smartkarma

Equity Capital Markets: Sayona Mining and more

By | Daily Briefs, IPOs and Placements

In today’s briefing:

  • Sayona Mining Placement – Speculative in Nature but past Deals Have Done Well

Sayona Mining Placement – Speculative in Nature but past Deals Have Done Well

By Clarence Chu

  • Sayona Mining (SYA AU) is looking to raise A$190m (approx US$135m) to restart its North American Lithium (NAL) mine.
  • On Monday (23rd May 2022), Sayona Mining had published a positive pre-feasibility study on the NAL mine, where shares have since corrected 26.8%.
  • The NAL mine is co-owned with US-based Lithium explorer, Piedmont Lithium, where Sayona Mining owns 75% interest, with the remainder 25% owned by Piedmont Lithium.

Before it’s here, it’s on Smartkarma

China: Jiayuan Services Holdings Limited, NetEase Inc, Dongzheng Automotive Finance, Imeik Technology Development, Powerlong Real Estate Holdings and more

By | China, Daily Briefs

In today’s briefing:

  • Jinke & Jiayuan: Pledged Shares And Leveraged Property Developers
  • NetEase (9999 HK): Steady Without New Games in 1Q22 and New Games in Pipeline, Buy
  • SAIC Wins the Auction for the 71.04% Stake in Dongzheng, MGO Upcoming
  • Imeik Technology Development (300896.CH) – Superficial Prosperity Hardly Masks Underlying Risks
  • Morning Views Asia: Powerlong Commercial Management Holdings

Jinke & Jiayuan: Pledged Shares And Leveraged Property Developers

By David Blennerhassett

  • On the 21 May, Jinke Property (000656 CH) announced the forced sale of shares by its controlling shareholder. One day later, Jiayuan International (2768 HK) announced a similar event. 
  • Jinke’s 52.3%-owned Jinke Smart (9666 HK) has now announced an agreement to acquire Jiayuan International’s 73.56% stake in property service play Jiayuan Services Holdings (1153 HK). No price was announced.
  • In the past month, Jinke Property is down 24%, Jinke Smart 23%, Jiayuan International 54% and Jiayuan Services 80%. Jiayuan International and Jiayuan Services remain suspended.

NetEase (9999 HK): Steady Without New Games in 1Q22 and New Games in Pipeline, Buy

By Ming Lu

  • Total revenue grew by 15% YoY and operating margin improved YoY in 1Q22.
  • The authorities began to grant licenses and new games will be launched in China and overseas.
  • We set an upside of 25% and a price target at US$120. Buy.

SAIC Wins the Auction for the 71.04% Stake in Dongzheng, MGO Upcoming

By Arun George


Imeik Technology Development (300896.CH) – Superficial Prosperity Hardly Masks Underlying Risks

By Xinyao (Criss) Wang

  • Imeik keeps its outstanding financial performance in 2021/2022Q1. On the surface, it looks prosperous, but its development strategy, product layout and resilience in front of risks would bring many uncertainties.
  • Considering the pandemic/lockdown and a slowing economy in China, the revenue growth in 2022 could fall to about 50%, then to about 40% and 30% in 2023 and 2024 respectively.
  • Imeik’s valuation is “unreasonably high”, which is expected to be lower than Bloomage in the future. Anything that deviates from fundamentals would inevitably return to the origin. 

Morning Views Asia: Powerlong Commercial Management Holdings

By Charles Macgregor

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.


Before it’s here, it’s on Smartkarma

TMT: Appen Ltd, NetEase Inc, United Microelectronics Corp, Iljin Materials, Pushpay Holdings, DFNN Inc and more

By | Daily Briefs, TMT/Internet

In today’s briefing:

  • Appen (APX AU): Telus’ 48% Premium; 10% Short Interest; Potential ASX200 Deletion
  • NetEase (9999 HK): Steady Without New Games in 1Q22 and New Games in Pipeline, Buy
  • UMC (UMC.US; 2303.TT): 3Q22 Order Is Full- The Demand from Asia Is Turning Weak, but US Is Stronger
  • Iljin Materials: Is the Potential Change in Compulsory Tender Offer Forcing Owner to Speed Up Sale?
  • BGH and Sixth Street to Lob an Offer for Pushpay?
  • Penny Stock Philippine Tech Gambling Company DFNN Has First Mover Position in Fast Recovering Market

Appen (APX AU): Telus’ 48% Premium; 10% Short Interest; Potential ASX200 Deletion

By Brian Freitas

  • Telus International (TIXT US) has made an unsolicited, conditional and non-binding indicative proposal to acquire 100% of Appen Ltd (APX AU) at A$9.5/share, valuing the company at A$1.17bn.
  • The offer is a 48% premium to the last close but a discount to longer-term VWAPs. It should require a bump for the Appen Board to unanimously recommend to shareholders.
  • Appen Ltd (APX AU) is a potential deletion from the S&P/ASX 200 (AS51 INDEX) at the June rebalance. Short interest is 10% of shares out. There will be covering.

NetEase (9999 HK): Steady Without New Games in 1Q22 and New Games in Pipeline, Buy

By Ming Lu

  • Total revenue grew by 15% YoY and operating margin improved YoY in 1Q22.
  • The authorities began to grant licenses and new games will be launched in China and overseas.
  • We set an upside of 25% and a price target at US$120. Buy.

UMC (UMC.US; 2303.TT): 3Q22 Order Is Full- The Demand from Asia Is Turning Weak, but US Is Stronger

By Patrick Liao

  • We believe UMC’s 3Q22 order is full, but the growth could be within 3% QoQ.
  • Asian clients are turning weak, and US clients are getting stronger.
  • The mainland China demand could be making an impact because of the COVID-19 pandemic.

Iljin Materials: Is the Potential Change in Compulsory Tender Offer Forcing Owner to Speed Up Sale?

By Douglas Kim

  • Heo Jae-Myeong, the CEO of Iljin Materials, is planning to sell his 53.3% stake in the company.
  • Potential buyers of Iljin Materials include Lotte, SK, LG, and POSCO.
  • The CEO Heo Jae-Myung could potentially receive greater amounts of money if he sells the company now, rather than waiting when the compulsory tender offer could be made into law.

BGH and Sixth Street to Lob an Offer for Pushpay?

By Arun George

  • Sixth Street and BGH Capital entered into a cooperation agreement with the aim to acquire Pushpay Holdings (PPH NZ) through a scheme of arrangement. They have a combined 20.3% stake. 
  • In addition to Sixth Street/BGH, Pushpay also noted expressions of interest from multiple parties. The high recurring revenue, profitability and cash generation make it a target. 
  • As the Australian takeover premium ranges from 20% to 40%, we think that a bid of at least A$1.46 (30% takeover premium) will be necessary for due diligence access. 

Penny Stock Philippine Tech Gambling Company DFNN Has First Mover Position in Fast Recovering Market

By Howard J Klein

  • Launched in late 2020, inPlay.ph is the first pure play online real money gambling platform aimed at attacking revenue of illegal sites.
  • DFNN is also licensed for electronic gaming machines, a sports betting exchange and pari-mutuel betting for the government run Pagcor sector.
  • Income from interactive tech platforms including the online gaming unit increased 116.6% for the quarter to 229.3m php.

Before it’s here, it’s on Smartkarma

India: Britannia Industries, Steel Authority of India, Jyothy Laboratories, Kajaria Ceramics, Kaveri Seed, Mindspace Business Parks REIT, Nuvoco Vistas, Sapphire Foods, Aditya Birla Fashion and Retail Ltd and more

By | Daily Briefs, India

In today’s briefing:

  • Britannia Industries (BRIT IN) | Time for a Good Snack
  • SAIL: Outlook Challenging Despite Robust Performance; Downgrade to HOLD
  • Jyothy Laboratories – Sales in 4QFY22 Were in Line.
  • Kajaria Ceramics – Ramping up of Capacity Shall Support Volume; Operating Margi
  • Kaveri Seeds – Revenue Fell 6% YoY in FY22 Due to Lower Cotton/Maize (Down 24%/16%) Volumes.
  • Mindspace Business Parks REIT – Strong Revival in Physical Occupancy; ROFO Asse
  • Nuvoco Vistas Corporation Ltd – Good Results Amid Challenging Environment
  • Sapphire Foods – Available Always in All Ways
  • Aditya Birla Fashion and Retail – A Strong Recovery in Business, Particularly the Lifestyle
  • Sail – Earnings Beat Driven by Lower RM Costs

Britannia Industries (BRIT IN) | Time for a Good Snack

By Pranav Bhavsar

  • Aggression in adjacencies, market share gains and under indexed rural exposure presents an opportunity. 
  • COGS Inflation, Risk of downgrading in case of a further hike loom and is a potential risk. 
  • YTD Britannia Industries (BRIT IN) is an outperformer and could remain so.

SAIL: Outlook Challenging Despite Robust Performance; Downgrade to HOLD

By Axis Direct

  • SAIL Q4FY22 results were largely in line with our estimates. The company delivered a strong sales volume of 4.706 Million Tonnes (MT), up 8% YoY and 23% QoQ, marginally ahead of our estimate of 4.6 MT.
  • Topline stood at Rs 30,759 Cr, a slight beat vs our estimate of Rs 29,236 Cr and up 32% YoY and 22% QoQ, led by higher steel prices and sales volumes
  • We downgrade the rating on SAIL to HOLD from BUY and value it at 4.0x FY24E EBITDA to arrive at a target price of Rs 75/share (Rs 125/share earlier), against the CMP of Rs74/share.

Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.


Jyothy Laboratories – Sales in 4QFY22 Were in Line.

By Motilal Oswal

  • Sales in 4QFY22 were in line. Gross margin was affected due to elevated raw material prices.
  • Revenue growth is key for a company with sales of only ~INR22b. The likelihood of a consistent 15% sales growth (essential for any re-rating) continues to appear difficult, despite JYL’s efforts to ramp up its total and direct reach.
  • With margin likely to remain under pressure over the next few quarters due to high input costs, its earnings growth prospects remain weak.
  •  
  •  

Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.


Kajaria Ceramics – Ramping up of Capacity Shall Support Volume; Operating Margi

By Nirmal Bang

  • Revenue grew by 15.7% YoY and 3.1% QoQ to Rs11,018mn: KCL reported revenue of Rs11,018mn in 4QFY22, up 15.7% YoY and 3.1% QoQ.
  • Revenue from in-house tiles segment grew by 19.1% YoY to Rs5,587mn in 4QFY22 due to growth in blended pricing and volume.
  • The company has taken price hikes at regular intervals, which led to blended realization growth of Rs424/sq mt in 4QFY22 vs Rs417/sq mt in 3QFY22.

Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.


Kaveri Seeds – Revenue Fell 6% YoY in FY22 Due to Lower Cotton/Maize (Down 24%/16%) Volumes.

By Motilal Oswal

  • Revenue fell 6% YoY in FY22 due to lower cotton/maize (down 24%/16%) volumes.
  • Cotton seed volumes were impacted by lower cotton acreage and the use of illegal herbicide-tolerant Bt (HTBt) seeds, which impacted sales of branded seeds.
  •  
  • Maize volumes fell due to no sales to the government.

Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.


Mindspace Business Parks REIT – Strong Revival in Physical Occupancy; ROFO Asse

By Nirmal Bang

  • Revenue up by 5.9% QoQ and 7.5% YoY in 4QFY22 to Rs4,666mn: Revenue increased by 5.9% QoQ and 7.5% YoY to Rs4,666mn in 4QFY22.
  • EBITDA margin contracts by 190bps QoQ but expands by 690bps YoY in 4QFY22 to 75.1%
  • Adjusted PAT stood at Rs1,262mn in 4QFY22 v/s Rs1,362mn in 3QFY22 and Rs1,143mn in 4QFY21

Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.


Nuvoco Vistas Corporation Ltd – Good Results Amid Challenging Environment

By Nirmal Bang

  • 4QFY22 performance: Nuvoco has reported extremely good set of numbers given the challenging environment with EBITDA of Rs4.25bn against our expectation of Rs3.8bn.
  • Capex update: Nuvoco plans to augment its cement volume by ~2.4mn mt from both north and east regions.
  • Outlook: Given the increased competition in the eastern region post recent capex by various companies, it will be challenging for Nuvoco to sustain this performance.

Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.


Sapphire Foods – Available Always in All Ways

By Motilal Oswal

  • The Indian Food Service Industry (FSI) is expected to clock 9% CAGR in the coming years, with QSRs likely to grow faster at 23% CAGR over FY20-25.
  • SAPPHIRE’s new scalable Restaurant economic model is a game-changer. Its omnichannel strategy and reduction in store sizes, along with other elements of the model, have led to a big shift in SAPPHIRE’s unit economics.
  • KFC India’s business is on a strong footing, with a healthy ADS and profitability.

Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.


Aditya Birla Fashion and Retail – A Strong Recovery in Business, Particularly the Lifestyle

By Motilal Oswal

  • A strong recovery in business, particularly the Lifestyle segment, saw 59% YoY jump in ABFRL’s 4QFY22 EBITDA backed by 25% YoY revenue growth and 210bp gross margin improvement.
  • Net debt at INR5b too was comfortable even after building inventory for the upcoming season and new stores.
  • With healthy recovery and growth momentum across verticals, we raise our FY23E/24E EBITDA by 7-8%, modeling strong 40% EBITDA CAGR over FY22-24E.
  •  

Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.


Sail – Earnings Beat Driven by Lower RM Costs

By Motilal Oswal

  • SAIL reported an inline revenue at INR308b (up 32 % YoY and 22 % QoQ) in 4QFY22, driven by an improved mix of higher ASP and sales volume.
  • Recently, the government announced various measures to cool down prices (refer Exhibit 1).
  • Coking coal has been hovering above USD 500 for the last four months, The La-Nina phenomenon in Australia is over.

Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.


Before it’s here, it’s on Smartkarma

Health Care: Imeik Technology Development, Otsuka Holdings and more

By | Daily Briefs, Healthcare

In today’s briefing:

  • Imeik Technology Development (300896.CH) – Superficial Prosperity Hardly Masks Underlying Risks
  • Otsuka Holdings (4578 JP) 1Q22: Global Products Continued Double-Digit Revenue Growth

Imeik Technology Development (300896.CH) – Superficial Prosperity Hardly Masks Underlying Risks

By Xinyao (Criss) Wang

  • Imeik keeps its outstanding financial performance in 2021/2022Q1. On the surface, it looks prosperous, but its development strategy, product layout and resilience in front of risks would bring many uncertainties.
  • Considering the pandemic/lockdown and a slowing economy in China, the revenue growth in 2022 could fall to about 50%, then to about 40% and 30% in 2023 and 2024 respectively.
  • Imeik’s valuation is “unreasonably high”, which is expected to be lower than Bloomage in the future. Anything that deviates from fundamentals would inevitably return to the origin. 

Otsuka Holdings (4578 JP) 1Q22: Global Products Continued Double-Digit Revenue Growth

By Tina Banerjee

  • Otsuka Holdings (4578 JP) started 2022 on a strong note, with 13% y/y revenue growth in Q1. Growth was driven by four global products, which contributed 36% of total revenue.
  • Otsuka has terminated its global license agreements with Akebia Therapeutics related to vadadustat for the treatment of renal anemia and recorded an impairment loss of ¥24 billion.
  • Despite the impairment losses related to vadadustat, Otsuka reiterated 2022 guidance and expects double-digit growth in operating and net profits.

Before it’s here, it’s on Smartkarma