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Smartkarma Daily Briefs

Aug 16
0

Daily Brief TMT/Internet: Paypal Holdings, Qualcomm Inc, Immersion Corporation, Shopify , Fidelity National Info Serv, Cognizant Tech Solutions A, Quarterhill Inc and more

By | Daily Briefs, TMT/Internet

In today’s briefing:

  • PayPal Holdings Inc.: Can Stablecoin Become The Future of Digital Payments? – Major Drivers
  • Qualcomm Incorporated: Collaboration With Sony & Other Major Developments
  • IMMR: Gains Affirm Value
  • Shopify Inc.: 5 Details Behind Their Improving Revenues! – Key Drivers
  • Fidelity National Information Services Inc.: 3 Catalysts Behind Its Surprising Growth! – Financial Forecasts
  • Cognizant Technology Solutions: Launch Of Cognizant Ocean & Other Major Drivers
  • Small-Caps with Torque to Infrastructure Spending

PayPal Holdings Inc.: Can Stablecoin Become The Future of Digital Payments? – Major Drivers

By Baptista Research

  • PayPal managed to surpass the revenue and earnings expectations of Wall Street.
  • The company’s strategic priorities, including branded checkout, merchant solutions, and digital wallets, drive innovation and growth, supported by AI and data utilization investments.
  • In addition, PayPal introduced the development of a stablecoin pegged to the U.S. dollar called PayPal USD.

Qualcomm Incorporated: Collaboration With Sony & Other Major Developments

By Baptista Research

  • Qualcomm 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.
  • Its chipset and licensing business’s strong performance supported the company’s revenues.
  • Qualcomm’s success in delivering premium mobile experiences, advancing 5G adoption, and expanding its presence in areas like automotive and IoT underscores its commitment to innovation and market leadership.

IMMR: Gains Affirm Value

By Hamed Khorsand

  • IMMR reported second quarter results where the income from the Company’s securities portfolio led to earnings exceeding our expectations. 
  • IMMR’s revenue declined more than expected as softer unit volumes resulted in lower royalty revenue. We would expect a recovery in smartphone units to result in higher revenue in 2024
  • The utilization of haptics within automobiles remains the most promising source of revenue growth for IMMR. The market is broadening to lower priced models

Shopify Inc.: 5 Details Behind Their Improving Revenues! – Key Drivers

By Baptista Research

  • Shopify Inc. managed to exceed analyst expectations in terms of revenue as well as earnings with strong financial results.
  • The company’s focus on improving the merchant experience, including pricing changes and innovative product offerings, contributed to strong top-line growth and attachment rates across the Merchant Solutions product suite.
  • In this report, we have carried out a fundamental analysis of the historical financial statements of the company.

Fidelity National Information Services Inc.: 3 Catalysts Behind Its Surprising Growth! – Financial Forecasts

By Baptista Research

  • Fidelity National Information Services exceeded Wall Street’s revenue and earnings expectations in the last quarter.
  • In the quarter, revenue, adjusted EBITDA, and adjusted EPS exceeded expectations, driven by strong execution across their three business divisions and a continued emphasis on expenditure restraint.
  • Fidelity National Information is seeing strong traction, with increased penetration in atypical sectors like large corporates, insurance, and auto loan organizations.

Cognizant Technology Solutions: Launch Of Cognizant Ocean & Other Major Drivers

By Baptista Research

  • Cognizant Technology Solutions managed to exceed the revenue expectations as well as the earnings expectations of Wall Street.
  • The company exceeded expectations in the second quarter for adjusted operating margins and revenue at the high end of its target range.
  • We give Cognizant Technology Solutions Corporation a ‘Hold’ rating with a revised target price.

Small-Caps with Torque to Infrastructure Spending

By Atrium Research

  • Due to decades of underinvestment, North American infrastructure has aged and deteriorated significantly to a point where governments are beginning to rapidly increase spending in the sector.
  • The declining stability of the electrical grid as well as electrification trends only exacerbate the issues at hand.
  • This report highlights five small-cap Canadian equities with torque to thematic trends in infrastructure spending. 

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Aug 16
0

Daily Brief Macro: China Not Yet in a Deflationary Spiral but the Risks Are Mounting and more

By | Daily Briefs, Macro

In today’s briefing:

  • China Not Yet in a Deflationary Spiral but the Risks Are Mounting
  • China’s Ongoing Real Estate Disaster Is Pushing Emerging Markets to the Brink
  • Investment Screening: Why Biden’s Order is Actually a Good Sign for US-China Relations
  • Malaysian Politics: Stalemate in Malaysia’s State Elections Buys Anwar Breathing Space
  • The Energy Cable #33 – The handoff – From positioning to fundamentals
  • UK: Jobs Melt with Wages Burning Hot
  • China Watch: The People’s Bank Pickle – is 7.30 the line in the sand?

China Not Yet in a Deflationary Spiral but the Risks Are Mounting

By Manu Bhaskaran

  • Consumer and producer prices in China fell in July, a symptom of its sluggish economy. However, fears of a deflationary spiral are premature, given the still-healthy core and services inflation. 
  • Growing slack in the economy, depressed economic sentiment, weak credit demand and the struggles of the trade-oriented manufacturing sector could, however, lead to deficient demand and downward price pressures.
  • Beijing is ramping up stimulus efforts but it needs to overcome its half-heartedness, lest a deflationary mindset becomes entrenched among consumers and firms.

China’s Ongoing Real Estate Disaster Is Pushing Emerging Markets to the Brink

By Jeroen Blokland

  • Financial markets are increasingly being dominated by headlines from China, where it is becoming clearer every day that the country is facing a historic real estate recession.
  • Despite the barrage of stimulus measures, Chinese and Emerging Market equity indices are trending down and is now within 1.5% of the 200-day moving average.
  • The 200-day moving average is a powerful sentiment indicator, distinguishing between positive and negative market returns.

Investment Screening: Why Biden’s Order is Actually a Good Sign for US-China Relations

By Mikkel Rosenvold

  • On August 9th, President Biden signed an executive order which addresses investment from US companies and individuals into China.
  • The executive order is a follow-up on the October 7, 2022 order to ban exports of advanced chips and other strategic technology, but the executive order focuses on investment in Chinese firms that operate in these areas, which was seen as a loophole in the October 7 order.
  • The Investment Screening order stipulates certain areas that are simply banned from investments, some areas where the government needs to be notified and then some areas that are completely exempt.

Malaysian Politics: Stalemate in Malaysia’s State Elections Buys Anwar Breathing Space

By Manu Bhaskaran

  • Malaysians in six states cast votes in state elections that were seen as an early referendum for the government of Anwar Ibrahim, in particular of its support among Malay voters. 
  • Anwar’s coalition did well enough to ensure his government’s viability, with a virtual tie in terms of control of state governments and the popular vote. 
  • His coalition is likely to remain intact and a lull in the electoral calendar gives it room to pursue its domestic and foreign policy agenda. 

The Energy Cable #33 – The handoff – From positioning to fundamentals

By Ulrik Simmelholt

  • Steno Research: Stubbornness despite Chinese demand woes As China’s economic woes deepen with the housing market slumps, we note that the demand side in the energy space looks just as fragile as the supply side.
  • Sure, China might be taking advantage of the Russian discount, but the Ruble is down some 30% against the CNY year-to-date so it is not catching a bid that one would otherwise expect.
  • With Country Garden (potentially) defaulting on fixed-income payments expect more weakness to show up in CNY pairs, which in turn adds even weaker commodity demand from China.

UK: Jobs Melt with Wages Burning Hot

By Phil Rush

  • Another surprise 0.2pp jump in the UK unemployment rate to 4.2% in June suggests the labour market suffered even before the BoE’s panicked 50bp hike.
  • Weakness still looks genuine to us, with 0.1pp monthly steps as the current underlying trend. However, underemployment and job vacancy data haven’t softened recently. 
  • The tightness and second-round effects stoked another wage surge, which the BoE needs to break. This inflation pressure should encourage a 25bp hike in September.

China Watch: The People’s Bank Pickle – is 7.30 the line in the sand?

By Emil Moller

  • Conclusions up-front: – As the PBoC confronts Yuan depreciation and counters deflationary momentum, the continued divergence between these challenges will strain the central bank’s ability to effectively manage both – Whatever policy trajectory PBoC chooses there will be uncomfortable trade-offs – We remain confident that the PBoC will defend the Yuan at the 7.30 levelIn light of the ongoing measures taken by Chinese authorities to tackle issues within the real estate sector, the recent rate cuts announcement, along with discouraging concrete data and the persistent depreciation of the Yuan, we find it pertinent to examine the existing state of monetary policy in China:PBoC is essentially caught between a rock and a hard place if the current headwinds keep mounting.
  • Eventually, they could be forced to pick a side between two objectives:On one hand, China is dealing with a declining nominal demand problem which is reflected in the depressed CPI.
  • That is what last night’s rate cuts are designed to address.

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Aug 16
0

Daily Brief Industrials: InterGlobe Aviation Ltd, Tokyo Electron, AviChina Industry & Technology H, Nidec Corp, Sanyo Trading, WILLs and more

By | Daily Briefs, Industrials

In today’s briefing:

  • Interglobe Aviation (Indigo) Placement – Selldowns Are Becoming Increasingly Regular
  • Tokyo Electron (8035 JP): Saved from Disaster by China
  • StubWorld: AviChina Is Coming Up “Cheap”
  • Nidec (6594 JP): Favorable Margin Trends
  • Sanyo Trading (3176) – Well-Positioned for Sustainable Growth
  • WILLs (4482) – Highest Quarterly Customer Acquisition in Two Years

Interglobe Aviation (Indigo) Placement – Selldowns Are Becoming Increasingly Regular

By Ethan Aw

  • InterGlobe Aviation Ltd (INDIGO IN)’s co-founder, Rakesh Gangwal and his wife, aim to raise up to US$450m through the bulk sale of 15.6m shares (4% of TSO).
  • He had earlier stated his intention to pare down his stake after a long drawn battle with his co-founder Rahul Bhatia. He last sold in Sep 2022 and Feb 2023.
  • In this note, we will talk about the placement and run the deal through our ECM framework.

Tokyo Electron (8035 JP): Saved from Disaster by China

By Scott Foster

  • Thanks to strong demand from China, 1Q results at Tokyo Electron (TEL) were just bad, not horrible. Operating profit was down 30% YoY on a 17% decline in sales.
  • 1H guidance implies that 2Q will also be weak. Full-year FY Mar-24 guidance implies an unlikely 50% sequential increase in net profit, putting the shares on 32x projected EPS.
  • A return to peak EPS next fiscal year would drop the P/E ratio to 21x, which used to be the top of TEL’s P/E range. Sell. 

StubWorld: AviChina Is Coming Up “Cheap”

By David Blennerhassett

  • As a PRC aviation/defense play, AviChina Industry & Technology H (2357 HK)‘s fundamentals are undemanding. 
  • Preceding my comments on AviChina are the current setup/unwind tables for Asia-Pacific Holdcos.
  • These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation >20%.

Nidec (6594 JP): Favorable Margin Trends

By Scott Foster

  • EV motors are out of the red, profits on appliance, commercial and industrial products are up, and the yen is much weaker than management’s forecast assumes.
  • Despite economic uncertainty, achieving FY Mar-24 profit guidance should not be difficult. 
  • Operating margin trends are generally positive and valuations not too high for longer-term investors. Buy into current pull-back.

Sanyo Trading (3176) – Well-Positioned for Sustainable Growth

By Astris Advisory Japan

  • Businessdiversificationpayingoff–Q1-3FY9/2023resultsshowed double-digit growth for sales at 15.3% YoY and OP at 26.8% YoY, despite high hurdles YoY.
  • The Machinery & Industrial Products segment continues to be the core earnings driver, contributing approximately 60% of total operating profit, and growing segmental profits by 71.4% YoY.
  • A rebound in industrial material-related products due to Japanese auto production recovery and the contribution of Scrum Inc., consolidated in February 2022 boosted profits. 

WILLs (4482) – Highest Quarterly Customer Acquisition in Two Years

By Astris Advisory Japan

  • Positive development over new customer acquisition – WILLs’ positive execution resulted in the net acquisition of five new customers for its Premium Benefits Service during Q2 FY12/2023, the highest level for two years.
  • Positive thematic tailwinds are a combination of digital transformation needs as well as improving share trading liquidity for listed entities, and the company remains well positioned to cater to this in our view.
  • WILLs also made significant progress in growing its Advertising business, generating positive segmental profits from losses in the previous year. 

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Aug 16
0

Daily Brief Financials: Japan Post Bank, Gresham House PLC, SBFC Finance Limited, Hang Lung, Fedbank Financial Services, Yanlord Land, Howard Hughes Corp, NatWest Group, Vista Land & Lifescapes and more

By | Daily Briefs, Financials

In today’s briefing:

  • Japan Post Bank – JPY234bn in Gains More than Offsets Cratering Net Interest Income
  • Smartkarma Webinar | Top Trade Ideas in European Event-Driven
  • SBFC Finance IPO Trading – Strong Demand but Priced at Fair Value
  • Hong Kong CEO & Director Dealings (15 August): The Chans Chip Away At Hang Lung
  • Fedbank Financial Services Pre-IPO Tearsheet
  • Yanlord Land – Earnings Flash – H1 FY 2023 Results – Lucror Analytics
  • HHH: Waiting for Earnings Horsepower
  • Natwest Group PLC: Will The SME Targeting Efforts Bear Fruit For This Banking Behemoth? – Key Drivers
  • Morning Views Asia: Vista Land & Lifescapes

Japan Post Bank – JPY234bn in Gains More than Offsets Cratering Net Interest Income

By Daniel Tabbush

  • Results show dramatically lower NIM, net interest income, but stock gains in spades
  • The only way to analyze 7182 is to have a view on its stock, bonds, investment gains
  • Unrealized gains more than doubled to JPY472bn: fire-power remains, but is it valuable?

Smartkarma Webinar | Top Trade Ideas in European Event-Driven

By Smartkarma Research

  • In the next installment of our Webinar series, we go live with Smartkarma Insight Provider Jesus Rodriguez Aguilar. 
  • He will be sharing with us his top trade ideas and insights in the European event-driven space. 
  • From current opportunities, to what we can expect next in the region, join us as we get the full picture from Jesus. 

The webinar will be hosted on Wednesday, 23 August 2023, 17:00 SGT/HKT.

Jesus Rodriguez Aguilar is an Event-Driven Analyst looking across sectors at opportunities arising from securities mispricing (both credit and equity), share classes, bid announcements, prospective bids, and special situations. 

SBFC Finance IPO Trading – Strong Demand but Priced at Fair Value

By Ethan Aw

  • SBFC Finance Limited (1547353D IN) raised around US$131m in its India IPO, after the deal was priced at INR57/share, the top end of its IPO price range.
  • SBFC Finance is a systematically important, non-deposit taking non-banking finance company (NBFC-ND-SI), offering secured MSME Loans and Loans against Gold. 
  • In this note, we will talk about the demand for the deal and other trading dynamics.

Hong Kong CEO & Director Dealings (15 August): The Chans Chip Away At Hang Lung

By David Blennerhassett

  • The data in this insight is collated from the “shareholding disclosure” link on the HKEx website.
  • Often there is a corresponding HKEx announcement on the increase – or decrease – in the shareholding by directors. Or pledging. However, such disclosures are by no means an absolute.
  • The key stocks mentioned in this regular insight are Hang Lung (10 HK) and Hang Lung Properties (101 HK).

Fedbank Financial Services Pre-IPO Tearsheet

By Clarence Chu

  • Fedbank Financial Services (0702066D IN) is looking to raise about US$200m in its upcoming India IPO.
  • Fedbank Financial Services (Fedbank) is a retail-focused non-banking finance company (NBFC) promoted by The Federal Bank Limited.
  • As per CRISIL, the firm had the second lowest cost of borrowing across the MSMEs, gold loan and MSME & gold loan peer set in India in FY23. 

Yanlord Land – Earnings Flash – H1 FY 2023 Results – Lucror Analytics

By Leonard Law, CFA

Yanlord Land’s H1/23 results were acceptable, in our view, with the company reporting strong top-line growth. That said, the gross margin contracted, as Yanlord delivered projects outside of Tier 1 cities. Still, cash collection was strong, which supported net debt reduction and deleveraging.

Going forward, the company faces material near-term debt maturities, including a USD 600 mn syndicated loan and the USD 376 mn YLLGSP 6.8 24 (both due February 2024). Our base case assumes that Yanlord can refinance its syndicated loan, and repay the USD bond using cash on hand. We also expect the company to continue rolling over its secured SGD loan.

Overall, Yanlord’s credit profile is underpinned by its clean debt structure and moderately sizeable portfolio of investment properties. This is as the company may be able to monetise its unencumbered investment properties in China and Singapore to raise funds. Management is exploring a CMBS issuance backed by Yanlord Landmark in Chengdu. In addition, Yanlord may be able to pledge the Yanlord Reverie Plaza in Shenzhen for bank financing, as the asset has reached more than 80% occupancy (since its soft opening in late 2022). Moreover, the company’s unencumbered investment properties in Singapore may be used as credit enhancement to support the offshore notes in the unlikely event of default.

HHH: Waiting for Earnings Horsepower

By Hamed Khorsand

  • HHH continues to exhibit the benefits of having operating assets as part of its MPCs. These operating assets provide essential cash flow to the rest of HHH
  • Operating assets becoming the core part of the business and HHH no longer requiring debt to fund its expansion needs
  • The Company has six unstabilized properties that could add $13.7 million of NOI by 2025 and has another six properties under construction to be completed by 2026.

Natwest Group PLC: Will The SME Targeting Efforts Bear Fruit For This Banking Behemoth? – Key Drivers

By Baptista Research

  • Natwest Group PLC managed to surpass the revenue expectations as well as the earnings expectations of Wall Street.
  • With the liquidity portfolio being predominantly composed of central bank deposits, the liquidity coverage ratio was 141%, providing Natwest with a comfortable excess above the minimum requirements.
  • We give Natwest Group PLC a ‘Hold’ rating with a revised target price.

Morning Views Asia: Vista Land & Lifescapes

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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Aug 16
0

Daily Brief Health Care: Value Added Technologies, Grifols SA, Kaken Pharmaceutical, AmerisourceBergen Corp, Aspira Women’s Health and more

By | Daily Briefs, Healthcare

In today’s briefing:

  • KOSDAQ150 Ad Hoc Index Rebalance Preview: VAT Could Replace Lutronic
  • Liquid Universe of European Ordinary and Preferred Shares: August‘23 Report
  • Kaken Pharmaceutical (4521 JP): Q1 Revenue Is Flat; Profit Falls; Bleak Outlook for FY24
  • AmerisourceBergen Corporation: 4 Pillars Behind Their Revenue Growth! – Financial Forecasts
  • Aspira Women’s Health, Inc. – Reports In-Line 2Q23

KOSDAQ150 Ad Hoc Index Rebalance Preview: VAT Could Replace Lutronic

By Brian Freitas

Liquid Universe of European Ordinary and Preferred Shares: August‘23 Report

By Jesus Rodriguez Aguilar

  • Since mid-July, spreads have not followed a clear pattern across the European liquid universe of ordinary and preferred shares (9 have tightened, 9 widened, 1 at same level).
  • Spreads could further widen in the short-term. Recommended trades long ordinary / short preferred shares: Fuchs, Henkel, Schindler, SSAB Svenska Stal.
  • Recommended trades long preferred / short ordinary shares: Carlsberg, Media-for-Europe, Sixt, VW, Grifols, Atlas Copco.

Kaken Pharmaceutical (4521 JP): Q1 Revenue Is Flat; Profit Falls; Bleak Outlook for FY24

By Tina Banerjee

  • Kaken Pharmaceutical (4521 JP) reported muted operating performance for Q1FY24. Revenue was flat compared to year-ago quarter, while operating profit declined 19% YoY. Net profit decreased 14% YoY.
  • The company has reiterated FY24 guidance of flat revenue and 5% YoY decline in operating profit. However, net profit is expected to increase 23% YoY in FY24 on low base.
  • Kaken is not expected to see any immediate respite as the contribution from the new products will not compensate for the revenue loss from its top selling products.

AmerisourceBergen Corporation: 4 Pillars Behind Their Revenue Growth! – Financial Forecasts

By Baptista Research

  • AmerisourceBergen Corporation managed to surpass the revenue and earnings expectations of Wall Street in the last quarter.
  • The company observed continued progress across its businesses in the quarter, producing significant revenue growth.
  • We give AmerisourceBergen Corporation a ‘Hold’ rating with a revised target price.

Aspira Women’s Health, Inc. – Reports In-Line 2Q23

By Water Tower Research

  • Aspira Women’s Health reported in-line 2Q23 financial results. Revenues in the quarter were $2.5 million, below our estimate of $3.2 million.

  • EPS for the quarter was ($0.28), above our estimate of ($0.66).

  • AWH continues its good expense control, showing its ability to continue to grow revenue and test volumes, while keeping expenses well under control.

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Aug 16
0

Daily Brief Consumer: GoTo Gojek Tokopedia Tbk PT, Amorepacific Corp, The Keepers Holdings, Home Product Center, Yum! Brands Inc, SOCAR, Cvs Health Corp, Kraft Heinz Co, XWELL and more

By | Consumer, Daily Briefs

In today’s briefing:

  • GoTo (GOTO IJ) – Shifting the Needle?
  • Amorepacific Corp: Return of the Korean Cosmetics King With End of Ban on Chinese Group Tours
  • Keepers Holdings: Q2 2023 Conference Call: Upbeat Good Momentum into H2 2023
  • GoTo: Cost Cutting Measures Pay Off but What About Growth?
  • Home Product Center (HMPRO TB): Return To Growth
  • Yum! Brands Inc.: Improving Same-Store Sales & Other Key Drivers
  • SoCar Lock-Up – Close to All-Time Low but Can Expect Some Post-Lockup Selling
  • CVS Health Corporation: 5 Key Growth Factors Every Investor Must Know! – Major Drivers
  • The Kraft Heinz Company: Mid-Single Digit Growth Strategy Revealed! – Major Drivers
  • XWELL, Inc. – 2Q23 Results; Company Making Progress Toward Return to Profitability

GoTo (GOTO IJ) – Shifting the Needle?

By Angus Mackintosh

  • GoTo is laser-focused on shifting the needle towards a semblance of profitability and likely with renewed vigour with a new management team in place. 
  • 2Q2023 results will likely reflect a slower headline GMV but should show an improvement in take rates and contribution margin. More colour on recent initiatives would be welcomed by investors.
  • GoTo has launched a standalone GoPay app which should help to boost its off-platform usage and has the potential to nurture more collaboration with Bank Jago.

Amorepacific Corp: Return of the Korean Cosmetics King With End of Ban on Chinese Group Tours

By Douglas Kim

  • Amorepacific Corp (090430 KS) is likely to be one of the biggest beneficiaries of the return of Chinese group tours in Korea.
  • Now that the Chinese government is allowing group tours to South Korea, this will likely lead to a sharp improvement in the company’s sales and profits in 2023-2024.
  • We expect the consensus to raise sales estimates of Amorepacific Corp by about 3-5%+ and operating profit estimates by 20-30%+ in 2023 and 2024. 

Keepers Holdings: Q2 2023 Conference Call: Upbeat Good Momentum into H2 2023

By Sameer Taneja

  • The Keepers Holdings (KEEPR PM) conference call was upbeat, with the guidance of improved results from Bodegas W&H and sequential seasonal improvement from H12023 to H2 2023.
  • Unrealized gross profits of 203 mn pesos ( H1 gross profit 1.8 bn pesos) due to in-transit goods from Bodegas W&H should provide an upside to margins in H2 2023. 
  • Trading at 8.54x/7.1x PE FY23e/24e and net cash with a dividend yield of 4.6%/5.3% FY23e/24e, a monopoly position in imported spirit distribution (>70% Mkt share), a name worth exploring. 

GoTo: Cost Cutting Measures Pay Off but What About Growth?

By Shifara Samsudeen, ACMA, CGMA

  • GoTo Gojek Tokopedia Tbk PT (GOTO IJ) reported 2Q2023 results. Gross revenue increased 5.6% YoY to IDR5.83trn while adj. EBITDA losses further narrowed down to IDR1.21trn vs IDR4.3trn in 2Q2022.
  • The company’s cost discipline measures have helped cut down on losses but growth rates have seen huge declines over the last few quarters.
  • Demand for food delivery has declined in Indonesia while entry of TikToK Shop has posed significant threat on Tokopedia, Shopee and other e-commerce platforms in the country.

Home Product Center (HMPRO TB): Return To Growth

By Steve Zhou, CFA

  • Home Product Center (HMPRO TB) is a play on improving Thailand consumer sentiment driven by easing inflation, formation of new Thai government, and continued return of tourists.
  • The company is expected to open 10 new stores in 2023, a major pick up in growth from only 1.7% sales CAGR in 2017-2023. 
  • Strong track record of management in execution and reputation. Valuation also reasonable. 

Yum! Brands Inc.: Improving Same-Store Sales & Other Key Drivers

By Baptista Research

  • Brands delivered mixed results in its most recent result, with revenues falling short of Wall Street expectations but above-par earnings.
  • The company produced same-store sales growth of 9% and unit growth of 6% for the quarter, with KFC setting the standard with a remarkable system sales growth on the back of Yum’s industry-leading development momentum, standout marketing initiatives, and pertinent new product layers like the introduction of original recipe hand-breaded chicken nuggets in the U.S.
  • Taco Bell’s global system sales increased for the quarter, driven by unit expansion and same-store sales growth as the management continued elevating the brand and launching digital initiatives.

SoCar Lock-Up – Close to All-Time Low but Can Expect Some Post-Lockup Selling

By Ethan Aw

  • SOCAR (403550 KS) was listed on 22nd Aug 2022, where it raised US$78m in its Korea IPO. Its one-year lockup will expire on 21st Aug 2023. 
  • SoCar is a Korean car sharing business aiming to become an all-in-one mobility solutions provider, with approximately 83% domestic market share in the car sharing space as of 1H23. 
  • In this note, we will talk about the lock-up dynamics and updates since our last note.

CVS Health Corporation: 5 Key Growth Factors Every Investor Must Know! – Major Drivers

By Baptista Research

  • CVS Health Corporation exceeded the revenue and earnings expectations of Wall Street, achieving key milestones in its strategy to deliver superior health experiences.
  • The acquisitions of Signify Health and Oak Street Health have strengthened its position in value-based care, and efforts to connect these assets with CVS Health’s existing offerings are expected to accelerate growth.
  • We give CVS Health Corporation a ‘Buy’ rating with a revised target price.

The Kraft Heinz Company: Mid-Single Digit Growth Strategy Revealed! – Major Drivers

By Baptista Research

  • The Kraft Heinz Company delivered a mixed result in the recent quarter, with revenues below market expectations but managed to surpass the analyst consensus regarding earnings.
  • Although price gaps remained wider than what the Kraft Heinz management would have liked throughout the quarter, the company still managed to deliver mid-single-digit top-line growth that was within the team’s expectations.
  • Their strategies started to work, producing better outcomes throughout the quarter, creating momentum for the second half of the year.

XWELL, Inc. – 2Q23 Results; Company Making Progress Toward Return to Profitability

By Water Tower Research

  • XWELL reported sequential top-line growth and continued expense reduction, with revenues up 15% and expenses down 13% sequentially, thus continuing on its way toward a return to profitability.

  • XWELL now has 26 domestic stores and 10 international stores, with at least one additional international location set to open for the remainder of the year.

  • XWELL is finding that post COVID, the sweet spot for its stores might be a smaller footprint and more automated services, such as the automated massage chairs and the autonomous manicure machines. 

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Aug 16
0

Daily Brief Thailand: Home Product Center and more

By | Daily Briefs, Thailand

In today’s briefing:

  • Home Product Center (HMPRO TB): Return To Growth

Home Product Center (HMPRO TB): Return To Growth

By Steve Zhou, CFA

  • Home Product Center (HMPRO TB) is a play on improving Thailand consumer sentiment driven by easing inflation, formation of new Thai government, and continued return of tourists.
  • The company is expected to open 10 new stores in 2023, a major pick up in growth from only 1.7% sales CAGR in 2017-2023. 
  • Strong track record of management in execution and reputation. Valuation also reasonable. 

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Aug 16
0

Daily Brief Australia: Ionic Rare Earths and more

By | Australia, Daily Briefs

In today’s briefing:

  • Ionic Rare Earths Ltd (IXR) Core Investment Case UPDATE 15082023

Ionic Rare Earths Ltd (IXR) Core Investment Case UPDATE 15082023

By ACF Equity Research

  • Ionic Tech begins REO recycled magnet production at Belfast facility; 
  • IXR’s flagshipMakuutu Rare Earths project is significant given its ionic adsorption clayhostedgeology
  • In Sep22 IXR received a £1.72m grant from the UK government todevelop its demonstration magnet recycling plant in Belfast, UK.

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Aug 16
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Daily Brief Indonesia: GoTo Gojek Tokopedia Tbk PT and more

By | Daily Briefs, Indonesia

In today’s briefing:

  • GoTo (GOTO IJ) – Shifting the Needle?
  • GoTo: Cost Cutting Measures Pay Off but What About Growth?

GoTo (GOTO IJ) – Shifting the Needle?

By Angus Mackintosh

  • GoTo is laser-focused on shifting the needle towards a semblance of profitability and likely with renewed vigour with a new management team in place. 
  • 2Q2023 results will likely reflect a slower headline GMV but should show an improvement in take rates and contribution margin. More colour on recent initiatives would be welcomed by investors.
  • GoTo has launched a standalone GoPay app which should help to boost its off-platform usage and has the potential to nurture more collaboration with Bank Jago.

GoTo: Cost Cutting Measures Pay Off but What About Growth?

By Shifara Samsudeen, ACMA, CGMA

  • GoTo Gojek Tokopedia Tbk PT (GOTO IJ) reported 2Q2023 results. Gross revenue increased 5.6% YoY to IDR5.83trn while adj. EBITDA losses further narrowed down to IDR1.21trn vs IDR4.3trn in 2Q2022.
  • The company’s cost discipline measures have helped cut down on losses but growth rates have seen huge declines over the last few quarters.
  • Demand for food delivery has declined in Indonesia while entry of TikToK Shop has posed significant threat on Tokopedia, Shopee and other e-commerce platforms in the country.

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Aug 16
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Daily Brief South Korea: Value Added Technologies, Amorepacific Corp, SOCAR and more

By | Daily Briefs, South Korea

In today’s briefing:

  • KOSDAQ150 Ad Hoc Index Rebalance Preview: VAT Could Replace Lutronic
  • Amorepacific Corp: Return of the Korean Cosmetics King With End of Ban on Chinese Group Tours
  • SoCar Lock-Up – Close to All-Time Low but Can Expect Some Post-Lockup Selling

KOSDAQ150 Ad Hoc Index Rebalance Preview: VAT Could Replace Lutronic

By Brian Freitas

Amorepacific Corp: Return of the Korean Cosmetics King With End of Ban on Chinese Group Tours

By Douglas Kim

  • Amorepacific Corp (090430 KS) is likely to be one of the biggest beneficiaries of the return of Chinese group tours in Korea.
  • Now that the Chinese government is allowing group tours to South Korea, this will likely lead to a sharp improvement in the company’s sales and profits in 2023-2024.
  • We expect the consensus to raise sales estimates of Amorepacific Corp by about 3-5%+ and operating profit estimates by 20-30%+ in 2023 and 2024. 

SoCar Lock-Up – Close to All-Time Low but Can Expect Some Post-Lockup Selling

By Ethan Aw

  • SOCAR (403550 KS) was listed on 22nd Aug 2022, where it raised US$78m in its Korea IPO. Its one-year lockup will expire on 21st Aug 2023. 
  • SoCar is a Korean car sharing business aiming to become an all-in-one mobility solutions provider, with approximately 83% domestic market share in the car sharing space as of 1H23. 
  • In this note, we will talk about the lock-up dynamics and updates since our last note.

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