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Smartkarma Daily Briefs

Aug 22
0

Daily Brief Macro: Emerging Markets:  Structural Shifts as Allocations Stabilise Among Global Funds. and more

By | Daily Briefs, Macro

In today’s briefing:

  • Emerging Markets:  Structural Shifts as Allocations Stabilise Among Global Funds.
  • Great Game – Another cease-fire fata morgana?
  • Indonesia Policy Rate 6.25% (consensus 6.25%) in Aug-24
  • China: Growth Inevitably Set to Flag as All Monetary Easing Proves Inefficacious
  • CX Daily: Domestic Carriers Add Global Routes as Foreign Rivals Quit China Amid Sluggish Demand
  • Thailand Policy Rate 2.5% (consensus 2.5%) in Aug-24
  • Actinver Research – Macro Daily: Preliminary Inflation 1h-Aug
  • Actinver Research – Macro Daily: Preliminary Foreign Investment 2Q-24

Emerging Markets:  Structural Shifts as Allocations Stabilise Among Global Funds.

By Steven Holden

  • Emerging Market allocations are stabilizing among active Global equity funds.
  • Country-Level shifts show China & HK allocations more than halving since 2022, while Taiwan has seen strong gains. India becomes the top country underweight.
  • Alibaba has declined to record lows, Tencent ownership is stabilizing, and TSMC has reached new highs.

Great Game – Another cease-fire fata morgana?

By Mikkel Rosenvold

  • Welcome to this week’s Great Game, where we continue to cover the situations most likely to impact global markets.
  • Currently, that’s the war in the Middle East and the potential harbor strike on the US East Coast.
  • Doha cease-fire talks: The latest Gaza ceasefire talks in Doha ended without a breakthrough, but new negotiations are set for next week in Cairo.

Indonesia Policy Rate 6.25% (consensus 6.25%) in Aug-24

By Heteronomics AI

  • Bank Indonesia’s decision to keep the BI-Rate steady at 6.25% aligns with expectations, reinforcing a pro-stability stance to manage inflation and Rupiah stability amid global uncertainties.
  • The easing of global financial market uncertainty amid solid domestic growth influences interest rate decisions that focus on balancing inflation control and sustaining economic momentum.
  • Bank Indonesia’s commitment to Rupiah stabilization and maintaining inflation within the target range remains central to its monetary policy, supported by effective interventions and optimized monetary operations.
This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

China: Growth Inevitably Set to Flag as All Monetary Easing Proves Inefficacious

By Prasenjit K. Basu

  • China’s M2 (USD42.04trn) is double the size of US M2, having risen 10.4-fold in 18 years (far faster than the 3.1-fold increase in US M2 over that period). 
  • Attempts at further monetary ease (RRR/rate cuts, QE) are futile, as they induce larger capital flight, and fail to rekindle credit demand amid PPI deflation and real-estate over-capacity. 
  • RGDP growth is likely to weaken in H2CY24 as FAI and industrial growth flag, and retail sales stay sluggish. A larger trade surplus won’t help, as FX reserves stagnate. 

CX Daily: Domestic Carriers Add Global Routes as Foreign Rivals Quit China Amid Sluggish Demand

By Caixin Global

  • Airlines / In Depth: Domestic carriers add global routes as foreign rivals quit China amid sluggish demand, Russia ban Since China dropped the Covid-era restrictions that slowed international flights to a trickle, the experience of domestic and foreign airlines has diverged sharply.
  • Many foreign carriers are scaling back their operations in China and in some cases completely withdrawing from the market, largely because the need to avoid Russian airspace has sent their costs spiraling and made them uncompetitive against Chinese rivals who can still fly over the country’s northern neighbor.
  • Meanwhile, Chinese airlines are ramping up their overseas routes, particularly to the Middle East.

Thailand Policy Rate 2.5% (consensus 2.5%) in Aug-24

By Heteronomics AI

  • The Bank of Thailand maintained the Policy Rate at 2.5% by a 6 to 1 vote, reflecting confidence that current monetary policy is appropriate for balancing economic recovery and inflation management despite underlying structural challenges.
  • Economic growth is driven by tourism and domestic demand. Uneven recovery across sectors and structural headwinds in exports and manufacturing necessitate close monitoring of risks to private investment and consumption.
  • Inflation is expected to return to the target range by the end of 2024, with concerns over credit quality deterioration in SMEs and households prompting the Committee to support targeted measures aimed at maintaining financial stability.
This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

Actinver Research – Macro Daily: Preliminary Inflation 1h-Aug

By Actinver

  • We expect inflation for the first half of August to be 0.02% bw, as agricultural prices continue to reverse the increases observed in June and July.
  • On Thursday, in addition to inflation data, new consumer basket weights will be released.
  • Typically, inflation for this fortnight averages 0.29% bw.

Actinver Research – Macro Daily: Preliminary Foreign Investment 2Q-24

By Actinver

  • The Ministry of Economy released preliminary estimates of foreign direct investment for the second quarter of the year.
  • Up to June, USD 31 billion arrived at the country, concentrated in Mexico City, in the manufacturing sector and in the reinvestment component.
  • In the first half of the year, foreign investment increased 7.2% annually, showing a sustained expansion since 2022. 

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Aug 22
0

Daily Brief Singapore: Singapore Post, Trek 2000 International and more

By | Daily Briefs, Singapore

In today’s briefing:

  • Singapore Post – Q1 profits more than double
  • kopi-C with Trek 2000’s Group President: ‘Everybody is an inventor’

Singapore Post – Q1 profits more than double

By Edison Investment Research

The Q125 results shine a light on the latest initiatives to underpin the inherent value within Singapore Post, which include a review of the Australian operations and ongoing discussions with the Singapore government on postal services. SingPost’s transformation from a post and parcel delivery company into a global logistics operator appears to have slipped under the radar of investors and now offers an opportunity for investors to reassess its potential. Our forecasts and valuation are unchanged and we believe there is now c 60% upside in the share price.

kopi-C with Trek 2000’s Group President: ‘Everybody is an inventor’

By Geoff Howie

  • Technology firm Trek 2000 has grown through innovation.
  • If you have ever used the ubiquitous thumb drive or transferred your holiday photographs wirelessly from your camera, it’s the innovation of Singaporean technology firm Trek 2000 International Ltd. (Trek2000) that made it possible.
  • Tan emphasises that concentrating on these three P’s is how Trek 2000 will distinguish itself in the increasingly crowded renewable energy market.

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Aug 22
0

Daily Brief Australia: Webjet Ltd, Westgold Resources, Yancoal Australia and more

By | Australia, Daily Briefs

In today’s briefing:

  • Thoughts On Webjet (WEB AU)’s Demerger
  • S&P/​​​​​​​​​ASX Index Rebalance Preview: Review Period Nearly Done; Big Impact Changes
  • Was it Worth it, Yancoal?

Thoughts On Webjet (WEB AU)’s Demerger

By David Blennerhassett

  • Back on the 22 May, global travel outfit Webjet (WEB AU)  announced it was exploring the separation of its two divisions – Webjet and Webjet B2C – via a demerger. 
  • If the demerger is implemented, shareholders will receive one Webjet B2C share for every Webjet share; plus retain their existing shares in Webjet (to be renamed WEB Travel Group).
  • A demerger booklet has been dispatched, with a 17th September vote on the in-specie distribution. If approved, WEB Travel (ex-entitlement) and Webjet B2C commence trading on the 23rd September.  

S&P/​​​​​​​​​ASX Index Rebalance Preview: Review Period Nearly Done; Big Impact Changes

By Brian Freitas

  • With 2 trading days left in the review period, there could be 30 adds/deletes across the S&P/ASX family of indices in September.
  • Passive trackers will need to trade a lot of stock in the forecast changes, with the impact being especially large for the changes to the S&P/ASX 200 and S&P/ASX 300.
  • The forecast adds have hugely outperformed the forecast deletes. Borrow recall on the deletes and increased borrow availability on the adds could result in underperformance following announcement of the changes.

Was it Worth it, Yancoal?

By Money of Mine

  • Company had strong half year results with 990 million in operating EBITDA and 420 million NPAT
  • They have 1.55 billion in cash and are debt-free, with majority of revenue from thermal coal production
  • Despite recent 20% drop in share price, company is on track and has good long-term prospects

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

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Aug 22
0

Daily Brief South Korea: Eoflow, LG Electronics, DB Hitek Co., Ltd., S.M.Entertainment Co and more

By | Daily Briefs, South Korea

In today’s briefing:

  • Eoflow: Rights Offering of 82 Billion Won and [Medtronic & Eoflow – Don’t You Forget About Me]
  • LG Electronics’ Value-Up Disclosure Today: Impact on Initial Flow Sizing for the Value-Up Index
  • Trading Situation Arising from Local Pensions’ Unusual Buying of DB HiTek
  • SM Entertainment: Disposal of Non Core Assets – SM C&C and KeyEast

Eoflow: Rights Offering of 82 Billion Won and [Medtronic & Eoflow – Don’t You Forget About Me]

By Douglas Kim

  • After the market close on 21 August, Eoflow (294090 KS) announced a rights offering capital raise of 9.1 million new shares, representing share dilution of 23%.
  • Based on the expected rights offering issue price of 9,040 won, the company is expected to raise 82.2 billion won in this capital raise. 
  • Eoflow has monthly cash burn rate of about 3.3 billion won. If the rights offering is successful, it would have adequate capital resources for about a couple of years. 

LG Electronics’ Value-Up Disclosure Today: Impact on Initial Flow Sizing for the Value-Up Index

By Sanghyun Park

  • LG Electronics aims for 7% growth, a 7x EV/EBITDA multiple, and a ₩1,000 DPS with a 25% payout ratio, likely disclosing details by late October or early November.
  • LG Electronics’ value-up disclosure highlights major non-financial companies’ participation before the value-up index launch, driven by regulatory pressure and concerns about index inclusion.
  • Samsung and Hyundai are likely to disclose value-up plans by early September, prompting an upward revision of flow size predictions for the value-up index launch.

Trading Situation Arising from Local Pensions’ Unusual Buying of DB HiTek

By Sanghyun Park

  • From early June until yesterday, local pension funds have purchased nearly 4% of DB HiTek’s SO. This places DB HiTek in a dominant first position in their net buying list.
  • The timing of local pension funds beginning to buy DB HiTek coincidentally aligns with May 22, when DB Inc was requested by the KFTC to transition into a holding company.
  • Focus on potential price impact from DB Inc.’s buying and value-up index inflows. Considering a relative overweight in DB HiTek may be strategic despite some risk.

SM Entertainment: Disposal of Non Core Assets – SM C&C and KeyEast

By Douglas Kim

  • On 21 August, SM Entertainment announced that it will sell its non-core assets including its controlling stakes in SK C&C and KeyEast.
  • The combined sales amount could be about 110 billion won or more, representing 7% or more of SM Entertainment’s market cap. 
  • Sale of SM C&C and KeyEast is likely to have a positive impact on SM Entertainment by selling its non-core assets and improving its balance sheet for higher shareholder returns.

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Aug 22
0

Daily Brief United States: Workday Inc Class A, Expedia Group, Inc., IonQ , Trade Desk /, Martin Marietta Materials, SharkNinja , Gilead Sciences, Viatris, Royalty Pharma , Akamai Technologies and more

By | Daily Briefs, United States

In today’s briefing:

  • Quiddity Leaderboard S&P500 Sep 24 Rebal: Palantir, Apollo, Workday Racing for Mega$ Flows
  • Expedia Group Inc.: A Bear’s Perspective! – Major Drivers
  • IonQ Inc.: Acceleration of Quantum Computing Milestones Driving Our Optimism! – Major Drivers
  • The Trade Desk Inc.: A Story Of Expanded Connected TV (CTV) Partnerships & Retail Media Network Expansion! – Major Drivers
  • Martin Marietta Materials: Leveraging Long-Term Contracts and Increased DOT Spending! – Major Drivers
  • SharkNinja Inc.: These Are The 5 Pivotal Factors Impacting Its Performance In 2025 & Beyond! – Financial Forecasts
  • Gilead Sciences: Innovations in Oncology & Cellular Therapy Along With Anti-Viral Focus! – Major Drivers
  • Viatris Inc.: Unlocking The Dry Eye Disease Market With Tyrvaya! – Major Drivers
  • Royalty Pharma: Expanding Clinical and Regulatory Event Horizons! – Major Drivers
  • Akamai Technologies: Will The Acquisition of API Security Leader Noname Security Be A Game Changer? – Major Drivers

Quiddity Leaderboard S&P500 Sep 24 Rebal: Palantir, Apollo, Workday Racing for Mega$ Flows

By Travis Lundy

  • The S&P 500 index tracks the 500 largest names listed in the US and it is one of the most highly-tracked indices in the world.
  • In this insight, we take a look at the upcoming constituent changes in the run up to the September 2024 index rebal event.
  • We expect two regular changes in September 2024. There are also several live M&A events which could trigger intra-review index changes in the late-2024/early-2025.

Expedia Group Inc.: A Bear’s Perspective! – Major Drivers

By Baptista Research

  • Expedia Group, in its second-quarter 2024 earnings, exhibited a dual-faced performance characterized by significant achievements and emerging challenges that mirror the broader complexities of the travel industry.
  • The management has focused on revitalizing core brands, particular emphasis on enhancing execution within the company’s consumer segment, and fine-tuning their long-term strategic direction.
  • Under her leadership, Expedia Group has seen a robust growth in room nights and gross bookings indicating a strong recovery trajectory from previous downturns.

IonQ Inc.: Acceleration of Quantum Computing Milestones Driving Our Optimism! – Major Drivers

By Baptista Research

  • IonQ’s second quarter financial and operational performance for 2024 reveals a mix of significant technological advancements and robust commercial progress, underscoring both opportunities and challenges as the company advances in the quantum computing sector.
  • Starting with the financial metrics, IonQ reported a revenue of $11.4 million, surpassing the upper range of its guidance.
  • This indicates effective contract execution and perhaps a growing demand for their quantum computing solutions.

The Trade Desk Inc.: A Story Of Expanded Connected TV (CTV) Partnerships & Retail Media Network Expansion! – Major Drivers

By Baptista Research

  • The Trade Desk reported a robust performance for the second quarter of 2024, with notable year-over-year revenue growth of 26%, totaling $585 million.
  • This growth considerably surpasses the growth rates experienced by peer companies within the digital marketing sector, emphasizing The Trade Desk’s consistent ability to capture increased market share.
  • This trend is particularly highlighted in areas like Connected TV (CTV), which continues to be a strong driver of the company’s expansion.

Martin Marietta Materials: Leveraging Long-Term Contracts and Increased DOT Spending! – Major Drivers

By Baptista Research

  • Martin Marietta’s second quarter 2024 earnings highlighted several key developments and challenges that reflect both positive and negative aspects impacting its performance and future outlook.
  • The company experienced a decrease in product shipments primarily due to an unprecedented increase in rainfall, specifically in the Dallas Fort Worth area, which is a critical market for Martin Marietta.
  • Furthermore, the lagging effects of restrictive monetary policy also pressured demand for private construction, exacerbating the decrease in shipments.

SharkNinja Inc.: These Are The 5 Pivotal Factors Impacting Its Performance In 2025 & Beyond! – Financial Forecasts

By Baptista Research

  • SharkNinja reported its second quarter 2024 earnings with a remarkably robust performance, significantly accelerating its financial growth and expanding its market presence.
  • The company achieved a 38% increase in adjusted net sales and a substantial 48% rise in adjusted EBITDA, indicating strong organic growth.
  • Adjusted earnings per share also soared by 51%, reflecting a successful operational strategy focused on innovation and market expansion.

Gilead Sciences: Innovations in Oncology & Cellular Therapy Along With Anti-Viral Focus! – Major Drivers

By Baptista Research

  • Gilead Sciences Inc. showcased a solid performance for the second quarter of 2024, marked by robust commercial execution and growth across key therapeutic areas such as HIV, liver diseases, and oncology.
  • Notably, Biktarvy, an HIV treatment, observed an 8% year-over-year growth, while Trodelvy in oncology saw a 23% increase, and cell therapy revenues increased by 11%.
  • Additionally, the company reported disciplined management of operating expenses which significantly contributed to bottom-line growth.

Viatris Inc.: Unlocking The Dry Eye Disease Market With Tyrvaya! – Major Drivers

By Baptista Research

  • Viatris has delivered a solid performance in the second quarter of 2024, marking the fifth consecutive quarter of operational revenue growth.
  • Under the leadership of CEO Scott Smith, the company, which was formed from the merging of Mylan and Upjohn, a division of Pfizer, has effectively integrated two global entities and streamlined its operations through strategic divestitures.
  • This strategic realignment has evidently positioned Viatris at a pivotal point for future growth, focusing strongly on expanding its innovative products alongside its stable base business.

Royalty Pharma: Expanding Clinical and Regulatory Event Horizons! – Major Drivers

By Baptista Research

  • Royalty Pharma experienced a strong second quarter for the 2024 fiscal year, outperforming earlier guidance with a 12% increase in portfolio receipts which include royalty and other income.
  • The company’s robust performance can be attributed to an 11% growth in royalty receipts, indicating solid recurring cash flow from their extensive and high-quality portfolio of more than 35 commercial products.
  • Baptista Research looks to evaluate the different factors that could influence the company’s price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology.

Akamai Technologies: Will The Acquisition of API Security Leader Noname Security Be A Game Changer? – Major Drivers

By Baptista Research

  • Akamai Technologies’ second quarter of 2024 earnings presentation highlighted a mix of sustained growth and evolving strategic focus amidst industry challenges.
  • The company reported a 5% increase in total revenue year over-year, amounting to $980 million, reflecting steady growth particularly in its security and compute sectors, despite ongoing macroeconomic and geopolitical challenges.
  • Baptista Research looks to evaluate the different factors that could influence the company’s price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology.

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Aug 22
0

Daily Brief India: Ecom Express Limited, Bajaj Housing Finance and more

By | Daily Briefs, India

In today’s briefing:

  • Ecom Express Pre-IPO Tearsheet
  • Bajaj Housing Finance Pre-IPO – Peer Comparison – Bigger and Faster

Ecom Express Pre-IPO Tearsheet

By Akshat Shah

  • Ecom Express Limited (1062300D IN) is looking to raise about US$310m in its upcoming India IPO. The deal will be run by Axis, IIFL Securities, Kotak and UBS.
  • Ecom Express operates a pan-India express logistics network covering first-mile pick-up, mid-mile transportation and last-mile delivery as well as reverse logistics (returns) and fulfilment services (warehousing).
  • According to Redseer, the company had the widest pan-India coverage and in Tier 2+ regions compared to its peers, covering over 27,000 PIN codes, as of March 31, 2024.

Bajaj Housing Finance Pre-IPO – Peer Comparison – Bigger and Faster

By Sumeet Singh

  • Bajaj Housing Finance (BHF IN) is looking to raise around US$830m in its upcoming India IPO.
  • BHF is a non-deposit taking housing finance company engaged in mortgage lending since FY18. Its mortgage products include home loans, loans against property, lease rental discounting and developer financing.
  • We have looked at the company’s past performance in our earlier notes. In this note we will undertake a peer comparison.

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Aug 22
0

Daily Brief China: JD.com , China Traditional Chinese Medicine, Xiaomi Corp, ZTO Express Cayman , China East Education , Shanghai International Airport and more

By | China, Daily Briefs

In today’s briefing:

  • JD.com (9618 HK): Index Implications of Walmart Placement
  • China Traditional Chinese Medicine (570 HK): Never a Dull Moment as Profit Warning Lands
  • Xiaomi (1810 HK): 2Q24, Revenue up by 32%, Electric Vehicle Profit to Follow, Buy
  • TCM (570 HK): Profit Warning Is No Biggie
  • ZTO Express Q224 Results: Slow Top-Line Growth | Margin Compression in Core Express Business | AVOID
  • China East Education (667 HK): Rock Solid Improvements
  • Shanghai International Airport (600009 CH | BUY | TP:CNY44): Slow but Steady Earnings Recovery

JD.com (9618 HK): Index Implications of Walmart Placement

By Brian Freitas

  • Media reports indicate that Walmart (WMT US) is looking to sell 144.5m shares of JD.com (JD US) to raise up to US$3.74bn. That would be substantially all of its stake.
  • There will be passive buying from global index trackers at the time of settlement of the placement shares and could absorb around 12% of the placement shares.
  • There will be no passive buying from HSI, HSCEI, HSTECH and HSIII trackers in the short-term. An increase in CCASS holdings should result in passive buying in December.

China Traditional Chinese Medicine (570 HK): Never a Dull Moment as Profit Warning Lands

By Arun George

  • China Traditional Chinese Medicine (570 HK) profit warning notes that the 1H24 net profit would decrease by 60%-70% YoY due to pricing pressure, higher impairment losses and remedial taxes. 
  • The profit warning could pose a risk to the scheme, as the consortium can withdraw if there is an adverse material change in China TCM’s profits or prospects.
  • If there were a danger of triggering the MAC clause, the consortium would not have made the regulatory submissions. The flip side is that the warning helps the shareholders vote. 

Xiaomi (1810 HK): 2Q24, Revenue up by 32%, Electric Vehicle Profit to Follow, Buy

By Ming Lu

  • Excluding the new business electrical vehicle, total revenue increased by 23% YoY in 2Q24.
  • Smartphone shipments grew faster than Samsung and Apple in 2Q24.
  • We believe electrical vehicle will bring significant gross profit in following two years.

TCM (570 HK): Profit Warning Is No Biggie

By David Blennerhassett

  • China Traditional Chinese Medicine (570 HK) flagged a 60-70% drop in its 1H24E net profit versus 1H23, due to reduced sales/profit of TCM concentrate, bad debt provisions, and remedial taxes. 
  • MAC triggers? No – Sinopharm won’t exercise such right, even if one was ostensibly triggered. I’d be surprised if Sinopharm wasn’t fully aware of TCM’s underlying operations. 
  • Get involved on any dips today. Trading wide at a 11.7%/38.7% gross/annualised spread, assuming Dec-end payment.

ZTO Express Q224 Results: Slow Top-Line Growth | Margin Compression in Core Express Business | AVOID

By Daniel Hellberg

  • Headline numbers for ZTO in Q224 were +10% Revenue, +12% EBITDA
  • But gross margin in core express segment fell, as did Operating Cash Flow
  • ZTO left guidance unchanged for FY24; we recommend investors AVOID it

China East Education (667 HK): Rock Solid Improvements

By Osbert Tang, CFA

  • China East Education (667 HK)‘s 1H24 result is impressive with a 58% YoY increase in adjusted net profit. Good cost control is a key contributing factor. 
  • Profitability has improved in all business segments. Its strategy to focus on higher-value courses has led to further improvement in annualised tuition per student. 
  • The 1H24 result equals 68% of the full-year consensus, implying an upside in market expectations. Its net cash, at 35% of market capitalisation, is unmatched by peers.

Shanghai International Airport (600009 CH | BUY | TP:CNY44): Slow but Steady Earnings Recovery

By Mohshin Aziz

  • Chinese airports are enjoying a steady passenger traffic growth of 5% YTD; Shenzhen and Shanghai airports are growing much faster.  
  • Shanghai International Airport (600009 CH)is our top pick given its size, liquidity, strong balance sheet, and its strong earnings growth potential.  
  • Our target price for Shanghai International Airport (600009 CH) is CNY44, pegged to global airport peer average FY25 EV/EBITDA of 12x.   

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Aug 22
0

Daily Brief Japan: Alps Logistics, TSE Tokyo Price Index TOPIX, Aoyama Zaisan Networks Co Lt, Polaris Holdings and more

By | Daily Briefs, Japan

In today’s briefing:

  • Logisteed/KKR Bigly Bid for Alps Logistics (9055) Goes Live Tomorrow. Still A Shocking Multiple
  • Cash on Hand Has Built up to a Level Where Small Shareholder Returns Are No Longer Sufficient
  • Aoyama Zaisan Networks Company (8929 JP) – Q2 FY12/24 Results Update
  • Polaris Holdings (3010 JP) – Solid Execution with Strategic Growth Potential

Logisteed/KKR Bigly Bid for Alps Logistics (9055) Goes Live Tomorrow. Still A Shocking Multiple

By Travis Lundy

  • The Logisteed/KKR entity received its approvals between the last week of July and this past week, and told Alps Logistics (9055 JP) it wanted to launch its tender 22 August.
  • It will do so. Approvals were reasonably quick (as expected) and the Special Committee and Board decided nothing material had changed. No reason to change their opinion.
  • This is still a HUGE price. And everyone will be out by mid-October if they want. This is an easy deal. And a GIGANTIC win for minorities.

Cash on Hand Has Built up to a Level Where Small Shareholder Returns Are No Longer Sufficient

By Aki Matsumoto

  • The increase in net profit from the previous year outpaced the growth in dividends, which increased cash on hand for listed companies to a record high level. 
  • Since the equity ratio of manufacturing sector is over 40% and there’s little room for debt repayment, there’s room for a considerable increase in dividends in conjunction with share repurchases.
  • If free cash flow isn’t used to invest in growth and return profits to shareholders, rather than to pay small dividends to shareholders, cash on hand will continue to increase.

Aoyama Zaisan Networks Company (8929 JP) – Q2 FY12/24 Results Update

By Astris Advisory Japan

  • Q1-2 FY12/24 results demonstrated sustained double-digit earnings growth, driven by the Wealth Consulting business through customer acquisition and the rising number of concluded contracts.
  • The Real Estate Solutions business has further raised assets under management and despite the increasing challenges in finding suitable assets, there were five transactions conducted for the ADVANTAGE CLUB business.
  • Although the company has maintained FY12/24 guidance, we believe earnings momentum remains positive with the 1) increase in consultant numbers, 2) customer acquisitions, and 3) business investment in personnel as well as IT to boost productivity. We have left our earnings estimates unchanged.

Polaris Holdings (3010 JP) – Solid Execution with Strategic Growth Potential

By Astris Advisory Japan

  • Establishing a track record of positive change – Q1 FY3/25 results were in line with guidance, as the company demonstrated solid execution for domestic and overseas hotel operations, supported by continued positive market demand.
  • Occupancy rates remain stable at a high level, and ADR and RevPAR remained on an uptrend YoY.
  • We note that the company has reported three consecutive quarters of high single-digit OPM, reflecting an improvement in the quality of earnings, and management’s strategies are delivering a sustained operational turnaround. 

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Aug 22
0

Daily Brief Industrials: Alps Logistics, Ecom Express Limited, ZTO Express Cayman , Shanghai International Airport, Singapore Post, SharkNinja , Parker Hannifin and more

By | Daily Briefs, Industrials

In today’s briefing:

  • Logisteed/KKR Bigly Bid for Alps Logistics (9055) Goes Live Tomorrow. Still A Shocking Multiple
  • Ecom Express Pre-IPO Tearsheet
  • ZTO Express Q224 Results: Slow Top-Line Growth | Margin Compression in Core Express Business | AVOID
  • Shanghai International Airport (600009 CH | BUY | TP:CNY44): Slow but Steady Earnings Recovery
  • Singapore Post – Q1 profits more than double
  • SharkNinja Inc.: These Are The 5 Pivotal Factors Impacting Its Performance In 2025 & Beyond! – Financial Forecasts
  • Parker-Hannifin Corporation: An Evolving Market Vertical Coverage Driving Growth! – Major Drivers

Logisteed/KKR Bigly Bid for Alps Logistics (9055) Goes Live Tomorrow. Still A Shocking Multiple

By Travis Lundy

  • The Logisteed/KKR entity received its approvals between the last week of July and this past week, and told Alps Logistics (9055 JP) it wanted to launch its tender 22 August.
  • It will do so. Approvals were reasonably quick (as expected) and the Special Committee and Board decided nothing material had changed. No reason to change their opinion.
  • This is still a HUGE price. And everyone will be out by mid-October if they want. This is an easy deal. And a GIGANTIC win for minorities.

Ecom Express Pre-IPO Tearsheet

By Akshat Shah

  • Ecom Express Limited (1062300D IN) is looking to raise about US$310m in its upcoming India IPO. The deal will be run by Axis, IIFL Securities, Kotak and UBS.
  • Ecom Express operates a pan-India express logistics network covering first-mile pick-up, mid-mile transportation and last-mile delivery as well as reverse logistics (returns) and fulfilment services (warehousing).
  • According to Redseer, the company had the widest pan-India coverage and in Tier 2+ regions compared to its peers, covering over 27,000 PIN codes, as of March 31, 2024.

ZTO Express Q224 Results: Slow Top-Line Growth | Margin Compression in Core Express Business | AVOID

By Daniel Hellberg

  • Headline numbers for ZTO in Q224 were +10% Revenue, +12% EBITDA
  • But gross margin in core express segment fell, as did Operating Cash Flow
  • ZTO left guidance unchanged for FY24; we recommend investors AVOID it

Shanghai International Airport (600009 CH | BUY | TP:CNY44): Slow but Steady Earnings Recovery

By Mohshin Aziz

  • Chinese airports are enjoying a steady passenger traffic growth of 5% YTD; Shenzhen and Shanghai airports are growing much faster.  
  • Shanghai International Airport (600009 CH)is our top pick given its size, liquidity, strong balance sheet, and its strong earnings growth potential.  
  • Our target price for Shanghai International Airport (600009 CH) is CNY44, pegged to global airport peer average FY25 EV/EBITDA of 12x.   

Singapore Post – Q1 profits more than double

By Edison Investment Research

The Q125 results shine a light on the latest initiatives to underpin the inherent value within Singapore Post, which include a review of the Australian operations and ongoing discussions with the Singapore government on postal services. SingPost’s transformation from a post and parcel delivery company into a global logistics operator appears to have slipped under the radar of investors and now offers an opportunity for investors to reassess its potential. Our forecasts and valuation are unchanged and we believe there is now c 60% upside in the share price.

SharkNinja Inc.: These Are The 5 Pivotal Factors Impacting Its Performance In 2025 & Beyond! – Financial Forecasts

By Baptista Research

  • SharkNinja reported its second quarter 2024 earnings with a remarkably robust performance, significantly accelerating its financial growth and expanding its market presence.
  • The company achieved a 38% increase in adjusted net sales and a substantial 48% rise in adjusted EBITDA, indicating strong organic growth.
  • Adjusted earnings per share also soared by 51%, reflecting a successful operational strategy focused on innovation and market expansion.

Parker-Hannifin Corporation: An Evolving Market Vertical Coverage Driving Growth! – Major Drivers

By Baptista Research

  • Parker-Hannifin Corporation delivered a robust performance in fiscal 2024, continually strengthening through strategic portfolio transformation and a particularly standout year for the Aerospace Systems segment.
  • Although the company saw low single-digit sales growth overall, it succeeded in expanding margins significantly by 200 basis points in its Aerospace sector.
  • This was highlighted by an 18% increase in earnings per share, a notable achievement following a 15% earnings growth in the previous fiscal year, and generating a record free cash flow of $3 billion.

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Aug 22
0

Daily Brief Energy/Materials: Westgold Resources, Yancoal Australia, Martin Marietta Materials, Cheniere Energy, Pembina Pipeline , Petroleo Brasileiro and more

By | Daily Briefs, Energy & Materials Sector

In today’s briefing:

  • S&P/​​​​​​​​​ASX Index Rebalance Preview: Review Period Nearly Done; Big Impact Changes
  • Was it Worth it, Yancoal?
  • Martin Marietta Materials: Leveraging Long-Term Contracts and Increased DOT Spending! – Major Drivers
  • Cheniere Energy Inc.: Dealing With The Global Energy Market Dynamics! – Major Drivers
  • Pembina Pipeline Corporation: An Analysis Of Its Diversified Energy Transportation and Marketing Strategy & Other Major Drivers
  • Petróleo Brasileiro S.A. – Petrobras (PBR): Will Their Strategic Investments in Renewable Energy Yield Results? – Major Drivers

S&P/​​​​​​​​​ASX Index Rebalance Preview: Review Period Nearly Done; Big Impact Changes

By Brian Freitas

  • With 2 trading days left in the review period, there could be 30 adds/deletes across the S&P/ASX family of indices in September.
  • Passive trackers will need to trade a lot of stock in the forecast changes, with the impact being especially large for the changes to the S&P/ASX 200 and S&P/ASX 300.
  • The forecast adds have hugely outperformed the forecast deletes. Borrow recall on the deletes and increased borrow availability on the adds could result in underperformance following announcement of the changes.

Was it Worth it, Yancoal?

By Money of Mine

  • Company had strong half year results with 990 million in operating EBITDA and 420 million NPAT
  • They have 1.55 billion in cash and are debt-free, with majority of revenue from thermal coal production
  • Despite recent 20% drop in share price, company is on track and has good long-term prospects

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

Martin Marietta Materials: Leveraging Long-Term Contracts and Increased DOT Spending! – Major Drivers

By Baptista Research

  • Martin Marietta’s second quarter 2024 earnings highlighted several key developments and challenges that reflect both positive and negative aspects impacting its performance and future outlook.
  • The company experienced a decrease in product shipments primarily due to an unprecedented increase in rainfall, specifically in the Dallas Fort Worth area, which is a critical market for Martin Marietta.
  • Furthermore, the lagging effects of restrictive monetary policy also pressured demand for private construction, exacerbating the decrease in shipments.

Cheniere Energy Inc.: Dealing With The Global Energy Market Dynamics! – Major Drivers

By Baptista Research

  • Cheniere Energy’s second-quarter earnings for 2024 show a company that is navigating its growth and contractual commitments adeptly amidst a fluctuating energy market.
  • The company, led by President and CEO Jack Fusco, announced exceeding expectations on financial metrics and operational execution, which bodes well for its strategic positioning as a major LNG supplier.
  • Baptista Research looks to evaluate the different factors that could influence the company’s price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology.

Pembina Pipeline Corporation: An Analysis Of Its Diversified Energy Transportation and Marketing Strategy & Other Major Drivers

By Baptista Research

  • Pembina Pipeline Corporation reported a strong second quarter, showcasing significant increases in several financial metrics, most notably achieving record adjusted EBITDA of $1.091 billion and record adjusted cash flow from operating activities of $837 million.
  • These achievements were underpinned by strategic acquisitions, notably the closure of the Alliance and Aux Sable acquisition early in April, resulting in increased ownership and contributing positively to Pembina’s financial performance.
  • These assets, including the full acquisition of Aux Sable’s U.S. operations, are reportedly exceeding expectations.

Petróleo Brasileiro S.A. – Petrobras (PBR): Will Their Strategic Investments in Renewable Energy Yield Results? – Major Drivers

By Baptista Research

  • In analyzing Petrobras’ earnings for the second quarter of 2024, several key factors emerge highlighting the company’s current performance and future outlook.
  • The leadership, under CEO Magda Chambriard, emphasized solid quarterly results shaped mainly by a blend of recurring and nonrecurring financial activities, alongside a strategic pivot towards sustainable energy practices and robust exploration activities.
  • Despite the complex overlay of global economic conditions, such as significant exchange rate volatility, Petrobras managed to navigate these with agility, thereby safeguarding its financial stability.

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