Smartkarma Daily Briefs

• India’s inclusion in global bond indexes by JP Morgan is significant, but the expected foreign inflow is relatively small, not likely to impact exchange rates or interest rates significantly.
• The bond inclusion won’t strengthen the Rupee against the Dollar due to limited foreign inflows. A slight reduction in interest rates is expected with JP Morgan’s inclusion.
• Indian bonds offer attractive yields, but rising US bond yields and rupee depreciation could affect foreign investor interest. This development could lead to improved fiscal policies and Indian bond markets.

• In this insight, we discuss a pair trade between CTCI (long) and Ruentex Development (short). 
• We believe CTCI Corp is more attractive than Ruentex Development mainly due to different types of business mix and valuations. 
• CTCI’s construction of refinery plants, waste water treatment, and power plants could thrive in higher oil price environment. Ruentex’s construction of residential and commercial buildings could experience lower demand. 

• A new electric car powered by Huawei’s autonomous driving technology has hit the market with a bang, attracting tens of thousands of orders in less than a month and giving the telecom-equipment giant a confidence boost as it pushes further into China’s highly competitive auto market.
• As of Friday, more than 50,000 orders have been placed for the upgraded version of the Aito M7 SUV since it was launched on Sept. 12, said Richard Yu, chairman of Huawei’s smart car unit, in a social media post Saturday.
• For each order, customers paid a non-refundable deposit of 5,000 yuan ($695), according to information provided by Aito — a premium electric-vehicle (EV) brand co-developed by Huawei Technologies Co. Ltd. and automaker Seres Group Co. Ltd.

• In June quarter Starbucks comparable store sales increased 46% YoY and reached to 80% of the level in the same period of 2021.
• China revenue increase purely came from transaction, but not average ticket.
• We believe Starbucks China data can be a good monitor of Chinese economy.

• China Tourism Group Duty Free (1880 HK) announced preliminary results for 3Q23 which came in below market expectations.
• Compared to the previous quarter 2Q23, sales declined by 1% q-o-q, while net profit margin declined from 10.4% in 2Q23 to 8.9% in 3Q23. 
• The company (H-share) is trading at 26x 2023E PE and 23x 2024E PE, still expensive as visibility is low and derating continues. 

• Devyani International (DEVYANI IN) is one of the largest franchisee of Yum! Brands Inc (YUM US)  in India and operates brands like KFC, Pizza Hut and Costa Coffee, etc.
• After a turbulent pandemic, the company has reported growth in topline and robust profitability in F22 and F23. But, these have been boosted by several one-off items.
• The company also faces difficulty in generating positive FCFs while we also remain caution about the Nigerian Operations and the associated forex losses.

• Fair value gains are the single most important driver of good net profit at King’s Town Bank (2809 TT) in the most recent quarter.
• Monthly revenue figures show strong 179% growth YoY in September, which we can see before any 3Q23 release.
• Credit costs rose from 43bps to 83bps of loans from 1Q23 to 2Q23, which is a significant increase, may be more reflective of underlying operations.

• Cosmecca Korea (241710 KS) clocked revenue of KRW115.7B (up 15% YoY) and operating profit of KRW11.2B (up 265% YoY) in Q223. Operating profit margin expanded 670bps YoY to 9.7%.
• Cosmecca is a key beneficiary of the increasing global demand for the affordable indie cosmetics brands. These brands are now outpacing the overall beauty and personal care industry.
• Since reporting strong Q1 result in May, Cosmecca Korea shares are on fire. Cosmecca is expected to continue its growth momentum due to strong global demand for affordable cosmetics.

BlackRock Greater Europe Investment Trust (BRGE) manager Stefan Gries seeks high-quality growth stocks that he can hold for the long term. The manager prides himself on being an ‘investor in businesses, not a trader in shares’ and stresses that his selective approach of focusing on the best businesses that are based in Europe means that investors do not need to have a positive view on the European economy to consider the trust. BRGE has a solid five- and 10-year record of outperformance versus the Europe ex-UK market, despite a difficult period in 2022 when growth stocks came under pressure in a rising interest rate environment. The trust also ranks favourably versus the averages of its peers in the AIC Europe sector over the last one, three, five and 10 years.

• Genuine Parts Company delivered mixed results for the previous quarter, with revenues below the analyst consensus.
• The company reported total sales of $2.3 billion for the quarter, marking an impressive increase of $125 million.
• In this report, we have carried out a fundamental analysis of the historical financial statements of the company.