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Smartkarma Daily Briefs

Dec 01
0

Daily Brief Industrials: Ametek Inc, Caterpillar Inc, C.H. Robinson Worldwide, Howmet Aerospace , Ingersoll Rand , Parker Hannifin, Quanta Services, Rockwell Automation, Stanley Black & Decker, Textron Inc and more

By | Daily Briefs, Industrials

In today’s briefing:

  • AMETEK Inc.: How Will The Acquisition Of Paragon Transform Their Tech Game? – Major Drivers
  • Caterpillar Inc.: Pioneering Sustainable Mining Technologies and Operations! – Major Drivers
  • C.H. Robinson Worldwide Inc.: A Bold Strategy to Transform Global Freight! – Major Drivers
  • Howmet Aerospace Inc.: What Is Its Biggest Competitive Advantage? – Major Drivers
  • Ingersoll Rand Inc.: Recent Acquisitions Of Oxywise
  • Parker-Hannifin Corporation: Energy-Agnostic Innovations Fueling Future Success! – Major Drivers
  • Quanta Services Inc.: Power Grid Expansion & Renewable Energy Projects Providing A Strategic Edge? – Major Drivers
  • Rockwell Automation Inc.: A Boost In Cybersecurity Prowess From The Verve Industrial Protection Acquisition – Key Drivers
  • Stanley Black & Decker Inc.: Navigating a Declining Revenue with Strategic Wins – What’s Next? – Major Drivers
  • Textron Inc.: Launch Of CITATION CJ3 Gen2 & Other Major Developments

AMETEK Inc.: How Will The Acquisition Of Paragon Transform Their Tech Game? – Major Drivers

By Baptista Research

  • AMETEK, Inc. delivered a mixed result in the recent quarter, with revenues below market expectations but it managed to surpass the analyst consensus in terms of earnings.
  • The operating income soared to a significant $438 million, demonstrating a 14% rise, and operating margins reached an all-time high of 27%.
  • Despite challenges such as normalizing inventory levels, the Electromechanical Group delivered solid results, with third-quarter sales of $487 million and operating margins at a commendable 26.2%.

Caterpillar Inc.: Pioneering Sustainable Mining Technologies and Operations! – Major Drivers

By Baptista Research

  • Caterpillar managed to surpass the revenue expectations as well as the earnings expectations of Wall Street.
  • Sales and revenues surged by 12%, surpassing the previous year’s figures.
  • Construction Industries in North America experienced a 6% increase in sales to users, driven by robust demand in non-residential and residential construction.

C.H. Robinson Worldwide Inc.: A Bold Strategy to Transform Global Freight! – Major Drivers

By Baptista Research

  • C.H.
  • Robinson Worldwide, Inc. delivered mixed results for the previous quarter, with revenues below the analyst consensus.
  • The managed service business exhibited a route guide depth of 1.15 in Q3, indicating primary freight providers accepting the majority of contractual freight, diminishing spot market opportunities.

Howmet Aerospace Inc.: What Is Its Biggest Competitive Advantage? – Major Drivers

By Baptista Research

  • Howmet Aerospace Inc. managed to exceed analyst expectations in terms of revenue as well as earnings, showcasing a 16% year-over-year revenue increase and a 1% sequential growth across all markets.
  • Commercial aerospace, marking its tenth consecutive quarter of growth, led the surge with a 23% year-over-year increase, constituting 49% of total revenue.
  • Besides, Engine Products, Fastening Systems, Engineered Structures, and Forged Wheels reported significant year-over-year revenue growth, with EBITDA margins showing improvement.

Ingersoll Rand Inc.: Recent Acquisitions Of Oxywise

By Baptista Research

  • Ingersoll Rand Inc. delivered a solid result and managed an all-around beat in the last quarter, characterized by double-digit growth in revenue, adjusted EBITDA, adjusted EPS, and free cash flow.
  • Despite the dynamic macroeconomic environment, the company demonstrated resilience and agility, delivering robust financial performance and surpassing expectations.
  • Notably, Ingersoll Rand raised its 2023 full-year guidance based on continued robust performance year-to-date.

Parker-Hannifin Corporation: Energy-Agnostic Innovations Fueling Future Success! – Major Drivers

By Baptista Research

  • Parker-Hannifin Corporation delivered a mixed result in the recent quarter, with revenues below market expectations, but it managed to surpass the analyst consensus in terms of earnings.
  • Prioritizing safety, the company achieved a notable 16% reduction in significant incidents, reinforcing its unwavering commitment to a secure work environment.
  • The quarter yielded sales of $4.8 billion, marking a substantial 15% increase over the previous year, driven by an impressive 2.3% organic growth.

Quanta Services Inc.: Power Grid Expansion & Renewable Energy Projects Providing A Strategic Edge? – Major Drivers

By Baptista Research

  • Quanta Services delivered an all-around beat in the previous quarter, marked by strong double-digit revenue growth and significant financial metrics.
  • The segments of the Electric Power Infrastructure Solutions and Renewable Energy Infrastructure Solutions spearheaded the revenue and profit surge, underlining the sustained capital infusion into grid modernization and resilience efforts.
  • The Renewable Infrastructure Solutions segment experienced a significant revenue upswing, propelled by increased construction activities in solar, wind, and battery storage projects.

Rockwell Automation Inc.: A Boost In Cybersecurity Prowess From The Verve Industrial Protection Acquisition – Key Drivers

By Baptista Research

  • Rockwell Automation, Inc. managed to exceed analyst expectations in terms of revenue as well as earnings, witnessing sales and adjusted earnings surge by over 20% compared to the previous year.
  • The Intelligent Devices Business segment experienced an 18% organic sales boost, particularly in independent car technology, concluding the fiscal year with over 50% growth in sales.
  • Information Solutions and Connected Services also achieved a 10% sales increase from the previous year, securing significant information solutions wins with Prometeon Tyre.

Stanley Black & Decker Inc.: Navigating a Declining Revenue with Strategic Wins – What’s Next? – Major Drivers

By Baptista Research

  • In the third quarter, Stanley Black & Decker managed a decent result including an earnings beat.
  • The company enhanced adjusted gross margin, earnings per share, and free cash flow compared to the previous year, demonstrating focused execution and strategic advancements.
  • Looking ahead to 2024, Stanley Black & Decker’s team anticipates additional gross margin gains and continues to focus on improving margins in uncertain market conditions.

Textron Inc.: Launch Of CITATION CJ3 Gen2 & Other Major Developments

By Baptista Research

  • Textron Inc. delivered a mixed result in the recent quarter, with revenues below market expectations, but it surpassed the analyst consensus regarding earnings.
  • Bell, Textron’s aerospace division, witnessed stable revenues with improved margins, with military revenues increasing.
  • Textron Systems reported higher revenues and margins, receiving a critical design review contract for the Army’s Future Tactical Unmanned Aircraft System and expanding its uncrewed aerial systems operations with the US.

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Dec 01
0

Daily Brief Health Care: Taisho Pharmaceutical Holdin, Sunho Biologics, Avantor , Biomarin Pharmaceutical, Bio Techne Corp, Exact Sciences, GlaxoSmithKline PLC, Humana Inc, IDEXX Laboratories, Immunogen Inc and more

By | Daily Briefs, Healthcare

In today’s briefing:

  • (Mostly) Asia M&A, Nov 2023: Taisho Pharma, CIMC Vehicle, CMIC, Japan Best Rescue, Shidax
  • Sunho Biologics (盛禾) Pre-IPO: Testing the Unproven Targets
  • Avantor Inc.: Unpacking Their Strategic Laboratory Relocation Services – A Game Changer? – Major Drivers
  • BioMarin Pharmaceutical Inc.: Voxzogo Supply Constraints & Commercial Growth As A Growth Catalyst! – Key Drivers
  • Bio-Techne Corporation: Impact Of China Funding & Economic Recovery! – Major Drivers
  • Exact Sciences Corporation: Cologuard Market Positioning & Long-Term Growth Strategy! – Major Drivers
  • GSK plc: Is Their Latest Financial Disappointment Might Be a Hidden Opportunity? – Major Drivers
  • Humana Inc.: Launch of At-Home Primary Care Program & Other Developments
  • IDEXX Laboratories Inc.: Navigating Clinical Challenges – Key Growth Strategies! – Major Drivers
  • Immunogen: The ELAHERE Breakthrough & An Expanding Pipeline! – A Potential Acquisition Target? – Major Drivers

(Mostly) Asia M&A, Nov 2023: Taisho Pharma, CIMC Vehicle, CMIC, Japan Best Rescue, Shidax

By David Blennerhassett

  • For the month of November 2023, 16 new deals (firm and non-binding) were discussed on Smartkarma with an overall announced deal size of ~US$13bn.
  • The average premium for the new deals announced (or first discussed) in November was 41%. The average YTD is 38% (97 deals).
  • This compares to the average premium for all deals in 2022 (106 deals), 2021 (165 deals), 2020 (158 deals), and 2019 (145 deals) of 41%, 33%, 31%, and 31% respectively.

Sunho Biologics (盛禾) Pre-IPO: Testing the Unproven Targets

By Ke Yan, CFA, FRM

  • Sunho Biologics, a China-based clinical-stage biotechnology company, plans to raise up to US$100m via a Hong Kong listing.
  • In this note, we examine the company’s three core products, namely IAP0971, IAE0972, and IAH0968, which target malignancies.
  • A large part of the company’s pipeline is testing the unproven targets. We also think the management and pre-IPO investors are of mediocre quality.

Avantor Inc.: Unpacking Their Strategic Laboratory Relocation Services – A Game Changer? – Major Drivers

By Baptista Research

  • Avantor had a decent quarter reported a revenue of $1.72 billion surpassing analyst expectations.
  • Despite a 7.9% decline in core organic revenue, the as-reported revenue remained flat sequentially, aligning with earlier guidance.
  • Avantor faced challenges in an environment marked by ongoing destocking and reduced demand in biopharma, advanced technologies, and applied materials.

BioMarin Pharmaceutical Inc.: Voxzogo Supply Constraints & Commercial Growth As A Growth Catalyst! – Key Drivers

By Baptista Research

  • BioMarin Pharmaceutical Inc. delivered a mixed set of results for the previous quarter, with revenues well below analyst expectations but managed earnings beat.
  • The company celebrates a robust 15% total revenue growth in the third quarter, propelled by the success of Voxzogo, slated to become the company’s inaugural blockbuster product.
  • In this report, we have carried out a fundamental analysis of the historical financial statements of the company.

Bio-Techne Corporation: Impact Of China Funding & Economic Recovery! – Major Drivers

By Baptista Research

  • Bio-Techne Corporation delivered a disappointing set of results as the company was unable to meet Wall Street’s revenue and earnings expectations.
  • Although the US biopharma funding challenges and evolving macroeconomic conditions in China exceeded initial expectations, Bio-Techne’s growth pillars, such as the GMP proteins business, ExoDx prostate, and ProteinSimple franchise, demonstrated robust performance.
  • In this report, we have carried out a fundamental analysis of the historical financial statements of the company.

Exact Sciences Corporation: Cologuard Market Positioning & Long-Term Growth Strategy! – Major Drivers

By Baptista Research

  • Exact Sciences Corporation delivered a positive result and managed an all-around beat in the quarter.
  • During the quarter, over 10,000 new healthcare professionals ordered Cologuard, contributing to a total of more than 331,000 orders since its launch.
  • Looking ahead, Exact Sciences raised its total revenue guidance for the year to a range of $2.476 billion to $2.486 billion.

GSK plc: Is Their Latest Financial Disappointment Might Be a Hidden Opportunity? – Major Drivers

By Baptista Research

  • GSK plc’s results were a major disappointment as the company failed to meet Wall Street’s revenue and earnings expectations.
  • Approvals for key medicines, including Arexvy and Apretude, strengthened the product portfolio, positioning GSK for substantial profitable growth.
  • In this report, we have carried out a fundamental analysis of the historical financial statements of the company.

Humana Inc.: Launch of At-Home Primary Care Program & Other Developments

By Baptista Research

  • Humana managed to surpass the revenue expectations as well as the earnings expectations of Wall Street.
  • Adjusted earnings per share stood at $7.78, with notable performance in Medicaid and primary care.
  • Looking ahead to 2024, Humana outlined its strategic approach to Medicare Advantage, emphasizing consumer preferences and maintaining or enhancing key benefits.

IDEXX Laboratories Inc.: Navigating Clinical Challenges – Key Growth Strategies! – Major Drivers

By Baptista Research

  • IDEXX Laboratories delivered a mixed result in the recent quarter, with revenues below market expectations, but it managed to surpass the analyst consensus in terms of earnings.
  • IDEXX experienced an impressive 8% organic growth in revenues, driven by a 9% surge in CAG Diagnostic recurring revenues.
  • Despite the headwinds from a decline in US clinical visits, IDEXX CAG Diagnostic recurring revenue growth remained resilient, surpassing sector growth levels.

Immunogen: The ELAHERE Breakthrough & An Expanding Pipeline! – A Potential Acquisition Target? – Major Drivers

By Baptista Research

  • This is a special one-time report on Immunogen, a biopharma player that has demonstrated notable progress and achievements in its recent earnings report.
  • ELAHERE generated over $105 million in net sales during the last quarter, resulting in cumulative revenue of over $210 million year-to-date.
  • Immunogen is not solely reliant on its current success; it is actively pursuing geographic expansion, with applications for European and Chinese approvals in progress.

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Dec 01
0

Daily Brief Consumer: Denso Corp, Ito En Ltd Preferred Shares, Sapporo Holdings, BYD, Meituan, PDD Holdings , CyberAgent Inc, Indofood CBP Sukses, Kobayashi Pharmaceutical Co, Tjx Companies and more

By | Consumer, Daily Briefs

In today’s briefing:

  • Denso – Thoughts On The Cross-Holdings Sell-Down
  • Itoen Pref (25935 JP) – Big Discount, Big Buyback, No Big Governance Change
  • Sapporo Holdings: Activist Investor 3D Investment Partners Assumes Majority Ownership
  • BYD (1211 HK) | Takeaways from India Showroom Visit | “Tata” Of China
  • 2024 High Conviction: Meituan / MT (3690 HK) – Big Opportunity Emerging After Plunge
  • Pinduoduo (PDD US): TEMU at Center Stage
  • 2024 High Conviction – CyberAgent: Worst Seems to Be Over
  • Indofood CBP Sukses (ICBP IJ) – FMCG On Track at Home and Abroad
  • Kobayashi Pharmaceutical Co (4967 JP): Q3 Shows Early Signs of Business Revival; Aims Big for US
  • GES: 3Q Review: Guess Goes Conservative for 4Q; Reiterate Buy, $32.50 Pt

Denso – Thoughts On The Cross-Holdings Sell-Down

By Mio Kato

  • The trend of governance reform in Japan continues with Toyota, Toyota Industries and Aisin selling shares of Denso. 
  • Denso is buffering some of the flow impact by repurchasing roughly half of the shares to be sold. 
  • While the size of these moves is relatively large we believe their impact could be disproportionately large for the market as a whole.

Itoen Pref (25935 JP) – Big Discount, Big Buyback, No Big Governance Change

By Travis Lundy

  • This is always a tough subject, but every now and then I throw myself on the mercy of the ho-humming crowd and write about the Ito En Prefs (25935 JP).
  • No strong catalyst. Limited capacity for strongly better governance. Even less apparent corporate interest in good governance. 
  • But we have a mini-catalyst, and it has been a while, and I think there IS a good way to think about this stock, so here’s another crack at it.

Sapporo Holdings: Activist Investor 3D Investment Partners Assumes Majority Ownership

By Oshadhi Kumarasiri

  • Last week, activist investor 3D Investment Partners raised its stake in Sapporo Holdings (2501 JP) by an additional 13%, cementing its position as the majority shareholder in the business.
  • This suggests the activist investor is optimistic about successfully advancing their proposals.
  • If investment properties are sold or spun off, and Alcoholic Beverages and Food & Soft Drinks undergo the suggested turnaround, we anticipate an additional 80-100% upside in the near term.

BYD (1211 HK) | Takeaways from India Showroom Visit | “Tata” Of China

By Pranav Bhavsar

  • We recently visited a BYD (1211 HK)  showroom in Ahmedabad, with the objective of understanding the preference for Electric Vehicles in India.
  • Pitched as the “Tata” of China, BYD offers 2 models ATTO 3 and e6 in India. 
  • Considering Tesla Motors (TSLA US) India interest, and Mahindra & Mahindra (MM IN) big bet on EV, BYD’s current operations in India seem to be minuscule and may find little success.

2024 High Conviction: Meituan / MT (3690 HK) – Big Opportunity Emerging After Plunge

By Ming Lu

  • The stock has been declining for about three years and plummeted after the 3Q23 results.
  • However, we believe MT and its corporate clients have been recovering and MT’s profits will rise by 129% in 2024.
  • We set an upside of 132% and a price target of HK$209 for 2024. Buy.

Pinduoduo (PDD US): TEMU at Center Stage

By Eric Chen

  • Stock rally on strong revenue growth suggests TEMU will be at center stage of the investment thesis for PDD down the road. 
  • Besides soaring GMV, TEMU achieved blowout performance likely due to much higher-than-expected take-rate and disciplined marketing, resulting in narrower-than-expected losses.
  • We expect the company’s growth will even accelerate in 4Q23 and generate adjusted net profit of US$12 bn for FY24, with a target market cap of US$240 bn (20xPE).

2024 High Conviction – CyberAgent: Worst Seems to Be Over

By Shifara Samsudeen, ACMA, CGMA

  • CyberAgent Inc (4751 JP) (CA) is a Japan-based media and entertainment company offering media, internet advertising, smart games and investment development businesses in Japan.
  • The gaming business of the company has collapsed with the slowdown of hit title UMA MUSUME while titles released after UMA MUSUME have failed to perform satisfactorily.
  • Profitability of Internet advertising and media are expected recover and seems that worst is over for the games business as several titles are slated for release in the near future.

Indofood CBP Sukses (ICBP IJ) – FMCG On Track at Home and Abroad

By Angus Mackintosh

  • Indofood CBP Sukses (ICBP IJ) has weathered the worst of higher raw material prices and is now seeing the benefits of lower input costs, benefiting margins.
  • The company is a core beneficiary of pre-election spending as its products are often given as gifts during campaigning. ICBP is also seeing strong performance in its export markets.
  • ICBP should increasingly be seen as an emerging market staples player, with globally recognised brands such as Indomie and Chitato. Valuations do not reflect this.

Kobayashi Pharmaceutical Co (4967 JP): Q3 Shows Early Signs of Business Revival; Aims Big for US

By Tina Banerjee

  • Kobayashi Pharmaceutical Co (4967 JP) witnessed business revival in Q3, especially in the domestic household and the U.S. business. In Q3, revenue increased 6% YoY and 13% QoQ to ¥45.4B.
  • Kobayashi has reiterated FY24 guidance. The company has guided for FY24 revenue of ¥172.0B (+4% YoY), operating income of ¥25.5B (-4% YoY), and net profit of ¥20.2B (-1% YoY).
  • By establishing the supplement business in North America and further expanding OTC medicines, the company aims to achieve sales of ¥34B in the U.S. in 2030, including ¥16B from healthcare.

GES: 3Q Review: Guess Goes Conservative for 4Q; Reiterate Buy, $32.50 Pt

By Small Cap Consumer Research

  • We are reiterating our Buy rating and $32.50 price target for Guess?, after the company reported mixed 3QFY24 (October) results, with EBITDA handily beating Street consensus, but EPS a miss, driven by a higher than expected tax rate and slightly weaker top line results, as Europe saw slowing traffic and the domestic stores remain negative.
  • Jeans), the recapture of the company’s license for domestic outerwear and a normalization of the expense base.
  • As such, we are reiterating our Buy rating and $32.50 price target on GES, which now translates to 6.5X our new FY25 EBITDA.

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Dec 01
0

Daily Brief South Korea: LS Materials and more

By | Daily Briefs, South Korea

In today’s briefing:

  • LS Materials IPO Bookbuilding Results Analysis

LS Materials IPO Bookbuilding Results Analysis

By Douglas Kim

  • LS Materials IPO price has been determined at 6,000 won per share, which is higher than the high end of the IPO price range (5,500 won). 
  • A total 2,025 institutional investors participated in this IPO book building. The demand ratio was 396.8 to 1. The IPO offering amount is 87.8 billion won. 
  • We believe that its share price is likely to trade higher than the high end of our valuation range (7,953 won per share) post IPO. 

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Dec 01
0

Daily Brief Australia: ADX Energy Ltd, Bell Financial, Pointerra Ltd, Rent.com.au Ltd and more

By | Australia, Daily Briefs

In today’s briefing:

  • ADX Energy (ASX: ADX): Equity raise to fund increased WI in Anshof
  • Bell Financial Group Ltd – ECM Markets Bouncing Back
  • Pointerra Ltd – A Second Half Story
  • Rent.com.au Ltd – Cash Burn Slowing, Annuity Revenue Growing

ADX Energy (ASX: ADX): Equity raise to fund increased WI in Anshof

By Auctus Advisors

  • • ADX is raising A$4.2 mm of new equity plus up to A$1 mm through an offer to shareholders at a price of A$0.10 per share. • We re-iterate our target price of A$0.80 per share as we factor (1) the dilution associated with the equity raise and (2) the increased interest in Anshof.
  • De-risking the 3P/3C resources at Anshof would add ~A$0.50/sh (~5x the current share price).

Bell Financial Group Ltd – ECM Markets Bouncing Back

By Research as a Service (RaaS)

  • Bell Financial Group Ltd (ASX:BFG) is a diversified provider of financial products and software solutions within, and increasingly outside, its traditional full-service stockbroking business.
  • Since our initiation in October 2023 there have been some positive developments across a number of divisions.
  • Against our forecast of $550m in equity raisings over H2 FY23 we now estimate $800m with a spike in activity over October and November. 

Pointerra Ltd – A Second Half Story

By Research as a Service (RaaS)

  • Pointerra Ltd (ASX:3DP) provides a powerful cloud-based solution (Pointerra3D) for managing, visualising, analysing, using and sharing massive 3D point clouds and datasets.
  • Pointerra3D is a proprietary digital twin SaaS platform which delivers predictive digital insights and definitive answers to complex physical asset management questions.
  • In an in-depth interview with RaaS and at the company’s AGM, the company’s CEO Ian Olson highlighted that the company expected to return to positive cashflows and EBITDA in H2 FY24 as a result of both the resumption of capex spending by US energy utility clients and Pointerra’s expanded customer base across the architecture, engineering and construction (AEC) sector, mining and oil and gas sectors and infrastructure clients.

Rent.com.au Ltd – Cash Burn Slowing, Annuity Revenue Growing

By Research as a Service (RaaS)

  • Rent.com.au Limited (ASX:RNT) is a purpose-led company seeking to empower home renters through its technology platform and a growing number of aligned transactional services.
  • The company has provided a trading update at its annual general meeting, noting that cash burn has slowed, with reductions in discretionary spend.
  • The company also highlighted that revenue from annuity income streams was growing and now around 13% of total revenue, compared with 7% in H1 FY23 and 10% in H2 FY23. 

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Dec 01
0

Daily Brief Thailand: KCE Electronics PCL, Valeura Energy Inc and more

By | Daily Briefs, Thailand

In today’s briefing:

  • SET50 Index Rebalance Preview: KCE Could Replace TIDLOR
  • Valeura Energy (TSX: VLE): Another good quarter. Re-iterating FY23 guidance

SET50 Index Rebalance Preview: KCE Could Replace TIDLOR

By Brian Freitas

Valeura Energy (TSX: VLE): Another good quarter. Re-iterating FY23 guidance

By Auctus Advisors

  • • 3Q23 production of 19,961 bbl/d and net cash at the end of September of ~US$103 mm had already been announced.
  • Current aggregate production from these two wells is ~1,600 bbl/d, which will support production from the field in 4Q23.
  • Our YE24 estimated net cash (>US$460 mm) represents ~1.5x the current market cap of the company.

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Dec 01
0

Daily Brief Singapore: OCBC and more

By | Daily Briefs, Singapore

In today’s briefing:

  • OCBC – Market Capitalization Rising, Unlike Peers | Insurance Is Lack Luster | Credit Costs Seem Low

OCBC – Market Capitalization Rising, Unlike Peers | Insurance Is Lack Luster | Credit Costs Seem Low

By Daniel Tabbush

  • OCBC has seen its mkt cap RISE by ~4% YTD. This is stark contrast to the ~6.5% lower mkt cap at DBS and around 10% lower mkt cap at UOB.
  • Net interest income had been strong, and this likely slows, a lot. Other areas are far from strong. Credit costs are up 103% YoY at 9M23.
  • Profit from insurance is down 12% YoY and down 16% QoQ, in 3Q23 (Great Eastern). Profit from associates is -1% YoY in the quarter and only +1% YoY

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Dec 01
0

Daily Brief India: BYD, Rajshree Polypack, Powerlong Real Estate Holdings and more

By | Daily Briefs, India

In today’s briefing:

  • BYD (1211 HK) | Takeaways from India Showroom Visit | “Tata” Of China
  • RPPL: Climbing Up the Value Chain | All Set for a Strong FY25
  • Morning Views Asia: Azure Power Global Ltd, Powerlong Commercial Management Holdings

BYD (1211 HK) | Takeaways from India Showroom Visit | “Tata” Of China

By Pranav Bhavsar

  • We recently visited a BYD (1211 HK)  showroom in Ahmedabad, with the objective of understanding the preference for Electric Vehicles in India.
  • Pitched as the “Tata” of China, BYD offers 2 models ATTO 3 and e6 in India. 
  • Considering Tesla Motors (TSLA US) India interest, and Mahindra & Mahindra (MM IN) big bet on EV, BYD’s current operations in India seem to be minuscule and may find little success.

RPPL: Climbing Up the Value Chain | All Set for a Strong FY25

By Ankit Agrawal, CFA

  • RPPL reported decent Q2FY24 earnings, led by volume growth and margin expansion. Revenue growth was somewhat tepid due to decline in realization led by volatility in raw material prices.
  • RPPL is seeing good traction in exports with improving mix of value-added products and enhanced geographic reach. Revenue from exports is guided to triple to INR 30cr+.
  • RPPL has also entered into In-mold Labeling (IML) in rigid plastic injection molding products. This could be a game changer for RPPL in terms of growth and target market potential.

Morning Views Asia: Azure Power Global Ltd, 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.

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Dec 01
0

Daily Brief Indonesia: Indofood CBP Sukses and more

By | Daily Briefs, Indonesia

In today’s briefing:

  • Indofood CBP Sukses (ICBP IJ) – FMCG On Track at Home and Abroad

Indofood CBP Sukses (ICBP IJ) – FMCG On Track at Home and Abroad

By Angus Mackintosh

  • Indofood CBP Sukses (ICBP IJ) has weathered the worst of higher raw material prices and is now seeing the benefits of lower input costs, benefiting margins.
  • The company is a core beneficiary of pre-election spending as its products are often given as gifts during campaigning. ICBP is also seeing strong performance in its export markets.
  • ICBP should increasingly be seen as an emerging market staples player, with globally recognised brands such as Indomie and Chitato. Valuations do not reflect this.

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Dec 01
0

Daily Brief United States: OpenAI, Micron Technology, NVIDIA Corp, Seadrill , Tjx Companies, Airbnb , Amgen Inc and more

By | Daily Briefs, United States

In today’s briefing:

  • Altman Allure at OpenAI: Where the Hunter Gets Hunted
  • Memory Monitor: Micron Expects 2025E to Be Best-Ever for Memory; But Valuations Have Run Up a Lot
  • Micron. The Rally Is Premature
  • Nvidia’s China Problems, Applied Materials, and Microsoft’s Accelerators
  • SDRL: Course for Free Cash Flow
  • GES: 3Q Review: Guess Goes Conservative for 4Q; Reiterate Buy, $32.50 Pt
  • EXPR: 3Q Review; Cleaning Up the Mess; Reiterate Buy, Lowering PT to $20
  • EXPR: Snapping the Store: Remedying Issues of Xmas Past; Reiterate Buy, $40 PT
  • Airbnb Inc.: The GamePlanner.AI Acquisition & Investments In AI – Major Drivers
  • Amgen Inc.: Expansion Of Oncology Research & Other Major Drivers

Altman Allure at OpenAI: Where the Hunter Gets Hunted

By Pranay Yadav

  • Sam returned as the CEO of OpenAI days after his surprise removal. Its board was overhauled with new members – Larry Summers and Bret Taylor.
  • The surprise removal of Sam was driven by philosophical differences over AI safety. Fears of employee exodus to Microsoft is the primary driver of his return to OpenAI leadership.
  • Recent events have solidified Microsoft’s partnership with OpenAI and Sam. Outcome from fallout suggests Microsoft will have a larger role in shaping OpenAI’s future.

Memory Monitor: Micron Expects 2025E to Be Best-Ever for Memory; But Valuations Have Run Up a Lot

By Vincent Fernando, CFA

  • Memory names have rallied strongly, with Nanya Tech outperforming since the start of November.
  • DRAM bottomed and NAND flash prices have jumped. Micron says that 2025E could be a record year for the Memory industry.
  • High valuations make near-term upside for Memory names uncertain. For Long/Shorts one can consider Long Micron vs. Short SK Hynix or Long Micron vs. Short Nanya Tech.

Micron. The Rally Is Premature

By William Keating

  • Improving outlook with Q1F24 revenue forecast slightly above the high end of the guided range
  • 2024 is being positioned as a “recovery year”, helping reset investor expectations about the nature and speed of the recovery
  • Micron’s share price typically rallies strongest into record revenue years. 2024 will not be a record revenue year. As such, we think the present rally is premature. 

Nvidia’s China Problems, Applied Materials, and Microsoft’s Accelerators

By Douglas O’Laughlin

  • Nvidia’s quarter was surprising to me because it was boring. There were a few incremental pieces, but the big news was everything to do with China.
  • As you know, there was another round of export restrictions with a myopic focus on AI Accelerators.
  • This impacted results and the outlook.

SDRL: Course for Free Cash Flow

By Hamed Khorsand

  • SDRL reported third quarter results exceeding expectations and announcing slight extensions to when near-term contracts would expire.
  • There had been minimal news from SDRL to expect contract extensions. SDRL’s peers had been reporting a slowing in contract activity.
  • The free cash flow SDRL is generating is being used for stock buy backs with the authorization doubled to a total of $500 million.

GES: 3Q Review: Guess Goes Conservative for 4Q; Reiterate Buy, $32.50 Pt

By Small Cap Consumer Research

  • We are reiterating our Buy rating and $32.50 price target for Guess?, after the company reported mixed 3QFY24 (October) results, with EBITDA handily beating Street consensus, but EPS a miss, driven by a higher than expected tax rate and slightly weaker top line results, as Europe saw slowing traffic and the domestic stores remain negative.
  • Jeans), the recapture of the company’s license for domestic outerwear and a normalization of the expense base.
  • As such, we are reiterating our Buy rating and $32.50 price target on GES, which now translates to 6.5X our new FY25 EBITDA.

EXPR: 3Q Review; Cleaning Up the Mess; Reiterate Buy, Lowering PT to $20

By Small Cap Consumer Research

  • We are cutting our projections and price target for Express, but maintaining our Buy rating after the company missed 3Q projections and guided to a materially weaker than expected 4Q.
  • Further, with inventories heavier than expected ahead of the Holiday season (up 14% YoY, or flat if Bonobos is excluded) we expect the season to remain aggressively promotional and, in the near term, offset any gains from cost savings and other S,G&A reductions (and probably spill over into Q1FY24).
  • Our new price target of $20 (down from $40) translates to 8.2X our new, materially lowered FY24 EBITDA projection.

EXPR: Snapping the Store: Remedying Issues of Xmas Past; Reiterate Buy, $40 PT

By Small Cap Consumer Research

  • We are reiterating our Buy rating, projections and price target for Express after visiting stores in Long Island and Connecticut.
  • We believe, after a tough Xmas last year, Express offerings are materially more versatile, priced better and more inline with the split between fashion and basics to create multiple exciting looks and outfits.
  • As such, we reiterate our Buy rating and price target for EXPR.

Airbnb Inc.: The GamePlanner.AI Acquisition & Investments In AI – Major Drivers

By Baptista Research

  • Airbnb delivered an all-around beat in the previous quarter, reporting a net income of $4.4 billion, including a one-time income tax benefit of $2.8 billion from releasing a valuation allowance.
  • Excluding this benefit, adjusted net income reached a significant $1.6 billion, representing a historic adjusted net income margin of 47%.
  • The quarter’s free cash flow amounted to $1.3 billion, with a trailing 12-month free cash flow hitting an all-time high of $4.2 billion.

Amgen Inc.: Expansion Of Oncology Research & Other Major Drivers

By Baptista Research

  • Amgen delivered a mixed set of results for the previous quarter, with revenues well below analyst expectations but managed earnings beat.
  • The company achieved significant quarterly sales for seven key brands and witnessed substantial volume growth across general medicine, inflammation, and hematology/oncology portfolios.
  • In bone health, Prolia reported a 14% year-over-year sales increase in the third quarter, buoyed by a 7% volume growth and higher net selling prices.

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