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Smartkarma Daily Briefs

Jun 07
0

Daily Brief Industrials: Adi Sarana Armada, MARUKA FURUSATO and more

By | Daily Briefs, Industrials

In today’s briefing:

  • Adi Sarana Armada (ASSA IJ) – Synergies Continue to Manifest Themselves
  • MARUKA FURUSATO Corporation (7128 JP) – 1Q Follow-Up

Adi Sarana Armada (ASSA IJ) – Synergies Continue to Manifest Themselves

By Angus Mackintosh

  • ASSA continues to demonstrate the ability to adapt to the changing environment in 1Q2023 with growth in its car fleet and improving profitability for logistics and the last mile. 
  • Anteraja has seen a slowdown in e-commerce revenues but is focusing more on building offline customers, whilst ASSA logistics is increasingly focused on mid-mile and cold-chain logistics. 
  • JBA Auction is seeing a strong recovery to pre-pandemic levels and maintains 40% market share, whilst Caroline is targeting 3,000-4,000 used car sales in 2023, whilst expanding its offline network.

MARUKA FURUSATO Corporation (7128 JP) – 1Q Follow-Up

By Sessa Investment Research

  • In 1Q FY12/23, net sales rose 12.8%, and operating profit increased 20.3%; thus, MARUKA FURUSATO made good progress toward achieving 1H forecasts of 9.2% increase in net sales and 9.4% decline in operating profit.
  • As a large percentage of the company’s earnings comes from business orders, short-term earnings are unlikely to change much.
  • It appears, however, that the company is making greater than initially expected progress in reducing its order backlog as supply constraints, such as shortage of semiconductors, are eliminated.

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Jun 07
0

Daily Brief TMT/Internet: Alibaba (ADR), Taiwan Semiconductor (TSMC) – ADR, Sanken Electric, KT Corp, Hewlett Packard Co, Tencent, Broadcom and more

By | Daily Briefs, TMT/Internet

In today’s briefing:

  • Alibaba Potential IPOs – The Final Part – Quick Look at Investees and Eventual Holdco
  • Taiwan Tech Weekly: TSMC Cuts Capex; Hon Hai AI Servers in Demand; ASE Winning TSMC Orders
  • Alibaba IPOs, Freshippo IPO: Conflict of Interest Arising from Competition with Tmall Supermarket
  • Sanken (6707)| Attractive for Activists and Growth Investors
  • KT CORPORATION: Fines, Favoritism, and ESG Risks
  • Dell, HP, Qualcomm Signal AI-Driven PC Refresh Cycle, 2024E PC Growth, Accelerated Windows Upgrades
  • Tencent Investee Selldown – JD.com Done, Meituan Done, Two More Still Left
  • Broadcom: Proceed With Caution

Alibaba Potential IPOs – The Final Part – Quick Look at Investees and Eventual Holdco

By Sumeet Singh

  • On 28th Mar 2023, Alibaba (ADR) (BABA US) announced that it would adopt a new organizational and governance structure, splitting into six major business groups and other investments.
  • Alibaba also stated that each of the business groups would be set up as an independent entity with its own board and the groups will eventually seek to list.
  • In this note, we will talk about some of the company’s investments and how the overall Holdco would look post restructuring.

Taiwan Tech Weekly: TSMC Cuts Capex; Hon Hai AI Servers in Demand; ASE Winning TSMC Orders

By Vincent Fernando, CFA

  • TSMC reduced capex guidance to the bottom of its guidance range but maintained revenue expectations and still expects substantial growth in 2024E.
  • Dell, HP, and Qualcomm comments signal an AI-Driven PC refresh cycle ahead and 2024E PC Growth. Windows 11 upgrades could be accelerated as new PC AI applications roll out.
  • Hon Hai reported that it gained market share globally in 2022, and that it has 40% global market share for servers. Hon Hai’s AI servers expected to experience triple-digit growth.

Alibaba IPOs, Freshippo IPO: Conflict of Interest Arising from Competition with Tmall Supermarket

By Oshadhi Kumarasiri

  • Freshippo (Hema) is set to be the first Alibaba (ADR) (BABA US) company to have an IPO after the business split into six units.
  • Two key concerns for Freshippo’s IPO are its failure to secure outside funding in two attempts last year and the potential conflict of interest arising from competition with Tmall Supermarket.
  • While it is still premature to make a definitive assessment of Freshippo’s IPO prospects, we maintain a level of skepticism towards the company.

Sanken (6707)| Attractive for Activists and Growth Investors

By Mark Chadwick

  • Sanken benefits from the structural growth in EVs, which should underpin revenue growth and margin accretion. 
  • DCF valuation suggests the stock is slightly undervalued. However, better-than-expected revenue trends could easily drive significant upside. 
  • Almost 30% of shares are held by activist investors – there is an attractive 57% upside to a SOTP valuation that could be realised over time.

KT CORPORATION: Fines, Favoritism, and ESG Risks

By Heejeong (Hollie) Park

  • Domestic telecom company faced significant fines for false advertising of 5G, the second-largest penalty ever imposed. 
  • Investigations into the telecom market, dominated by a long-term duopoly, are expanding. 
  • Within KT Group’s subcontracting process, allegations of favoritism and manipulation in project allocation are currently under investigation by the prosecution.

Dell, HP, Qualcomm Signal AI-Driven PC Refresh Cycle, 2024E PC Growth, Accelerated Windows Upgrades

By Vincent Fernando, CFA

  • HP and Dell’s industry outlook after their results last week indicate a PC market stabilizing and set for growth in 2024E. Qualcomm provided AI comments at a recent conference.
  • Both HP and Dell managed to beat earnings expectations despite experiencing 20%+ YoY revenue declines. Neither stock’s price has made a significant move since results.
  • AI incorporated into Windows 11 and PC’s themselves could be a major reason for companies and consumers to buy new PC’s. PC’s are being designed to run AI capabilities locally.

Tencent Investee Selldown – JD.com Done, Meituan Done, Two More Still Left

By Sumeet Singh

  • Tencent has been busy distributing shares in some of its investments over the past two years, with JD.com’s distribution announced in 2021 and Meituan’s in 2022.
  • In our earlier note in 2022, Tencent Investee Selldown – The US$120bn Global Overhang, we had looked at its overall investment portfolio.
  • With two of its large investments spun-out, we now re-look at Tencent’s shareholding in various companies to try and gauge which ones it could sell out of and how. 

Broadcom: Proceed With Caution

By Vladimir Dimitrov, CFA

  • Broadcom Inc. has been the best-performing semiconductor stock over the past 3-month period.
  • Robust demand partially justifies the recent share price increase, but not all the way to a near double-digit revenue multiple.
  • Just three months ago, I analyzed Broadcom Inc.’s (NASDAQ:AVGO) strong business model through the lens of profitability, competitive advantages and capital allocation.

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Jun 07
0

Daily Brief Health Care: Beauty Farm Medical and Health Industry, Evotec AG, Kelun Biotech, HealthCare Global Enterprises and more

By | Daily Briefs, Healthcare

In today’s briefing:

  • Beauty Farm Medical (BFM HK): Expectations Are Flying Too High; 1H23 Result Will Set the Path
  • Quiddity Flow Expectations for DAX Jun 23 Rebal: Evotec Is the Main Surprise
  • Pre-IPO Kelun Biotech (PHIP Updates) – Some Points Worth the Attention
  • HCG: Emerging Centers Are Inching Closer to Maturity

Beauty Farm Medical (BFM HK): Expectations Are Flying Too High; 1H23 Result Will Set the Path

By Tina Banerjee

  • Beauty Farm Medical and Health Industry (BFM HK) reported decline in revenue and net profit in 2022, due to the implementation of nationwide pandemic prevention and control policies.
  • The company is seeing recovery in 2023. During January–May, customer traffic and average transaction value achieved double-digit growth YoY, while customer spending increased 20%+ YoY.
  • In 2023, revenue and EPS are expected to grow 34% and 106%, YoY, respectively. The preliminary business operation overview seems to fall short of the expectations.

Quiddity Flow Expectations for DAX Jun 23 Rebal: Evotec Is the Main Surprise

By Janaghan Jeyakumar, CFA

  • The June 2023 index changes for the DAX index family were confirmed after the close yesterday.
  • As expected, there were no changes announced for the DAX index.
  • There will be four changes for MDAX, one change for SDAX, and one change for TecDAX.

Pre-IPO Kelun Biotech (PHIP Updates) – Some Points Worth the Attention

By Xinyao (Criss) Wang

  • We don’t think A166 makes much sense on the commercialization level when faced with DS-8201. Unsatisfactory sales of Trodelvy also makes us start worrying about SKB264 after its market launch.
  • MNCs are scrambling to in-license ADC products, which actually reflected their “general anxiety”, leading to a “sentiment-driven valuation premium”. Would the final outcome of ADC be the same as PD-1?
  • We’re “confused” about the valuation of Kelun-Biotech if look deeper. The valuation in last round of financing before IPO wasn’t cheap, which makes us cautious considering the outlook and sentiment.

HCG: Emerging Centers Are Inching Closer to Maturity

By Ankit Agrawal, CFA

  • HCG ended FY23 with decent profitability and is on track to see significant scale up over the next 12-18 months as its emerging centers become mature.
  • During the course of the next couple of years, HCG is also looking to enhance its presence through the inorganic route.
  • We project that HCG may do a PAT of INR 200cr by FY25. At the current market cap of INR 4450cr, HCG is attractively valued at 22x per FY25E PAT. 

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Jun 07
0

Daily Brief Financials: Korea Stock Exchange Kospi Index, Mitsubishi UFJ Financial (MUFG), Amman Mineral Internasional, Cons Tomoka Land Co Florida, Country Garden Holdings Co and more

By | Daily Briefs, Financials

In today’s briefing:

  • No Foreigner ID/Trade Report Obligation Starting Dec 14: Impact on Event Trading in Korea
  • MUFG – What if No Yield Curve Control Relief?
  • Amman Mineral Internasional IPO: Valuation Insights
  • CTO Realty Growth: One Of The Few Investable REITs Out There
  • Morning Views Asia: Country Garden Holdings Co, Yuexiu Property

No Foreigner ID/Trade Report Obligation Starting Dec 14: Impact on Event Trading in Korea

By Sanghyun Park

  • The abolition of the foreign investor registration system was approved in a Cabinet meeting. They will be promulgated on June 13th and implemented starting December 14th of this year.
  • This change is not just about reducing administrative tasks, as it also eliminates the reporting obligations of foreign investors, thereby reducing their position exposure risk.
  • This could improve event outcome and price prediction accuracy. Therefore, it is crucial to keep a close eye on event trading when this measure takes effect in December.

MUFG – What if No Yield Curve Control Relief?

By Daniel Tabbush

  • There may be no imminent yield curve control relief in Japan
  • MUFG market capitalization is up 2-3x and at a near decade peak level
  • Without YCC relief maybe the bank’s 60% rise in NPLs in the past 4 years is better noticed

Amman Mineral Internasional IPO: Valuation Insights

By Arun George

CTO Realty Growth: One Of The Few Investable REITs Out There

By Pearl Gray Equity and Research

  • CTO Realty Growth, Inc. possesses the necessary characteristics to outperform the market.
  • Diminishing credit spreads and more predictable inflation could result in tailwinds for best-in-class cyclical REITs such as CTO.
  • Real Estate Investment Trusts (“REITs”) situated in the United States have underperformed the S&P 500 (SP500) by approximately 10% during the past year, which should not be a surprise as factors such as rising credit

Morning Views Asia: Country Garden Holdings Co, Yuexiu Property

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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Jun 07
0

Daily Brief Consumer: Lifedrink , Challenger Technologies, Rakuten, iShares Russell 2000 ETF, Heineken Holding NV and more

By | Consumer, Daily Briefs

In today’s briefing:

  • Lifedrink Company (2585 JP) Ascends to TSE Prime and TOPIX But An Offering Produces Overhang
  • Challenger Technologies (CHLG SP): Unconditional and Final Offer at S$0.60
  • Rakuten’s Seiyu Sell off Will Boost Netsuper Business
  • Challenger Tech: Offer Bumped & Declared Final
  • Russell 2000 Breakout Attempt Underway; Small-Cap Breadth Improving; KRE, KBE, XRT Test Key Levels
  • Selected European HoldCos and DLC: May’23 Report

Lifedrink Company (2585 JP) Ascends to TSE Prime and TOPIX But An Offering Produces Overhang

By Travis Lundy

  • On 1 June, Lifedrink (2585 JP), which listed in early 2022, announced it would move to TSE Prime in late June, leading to a TOPIX inclusion in late July. 
  • The offset to that was an announcement of an offering, whereby the PE Fund which brought the company to market would sell up to 3.87mm shares, effectively doubling float. 
  • The offering is larger than the TOPIX inclusion. The stock fell the next day, rebounded, then rebounded 11% Monday. Now it’s up more and hit a lifetime closing high.

Challenger Technologies (CHLG SP): Unconditional and Final Offer at S$0.60

By Arun George

  • Challenger Technologies (CHLG SP) has disclosed a final voluntary unconditional offer from Dymon Asia and the Loo Family at S$0.60 per share, a 7.1% premium to the previous S$0.56 offer. 
  • As predicted, the offer followed the recent SGX unconditional offer playbook – a lowball offer followed by declaring the offer final after a cursory bump.
  • The modest offer premium will still leave minorities aggrieved. Hitting the 90% compulsory threshold implies a minority acceptance rate of 31.3%. At the last close, the gross spread is 3.4%.

Rakuten’s Seiyu Sell off Will Boost Netsuper Business

By Michael Causton

  • Rakuten sold its 20% stake in Seiyu to KKR at the end of May, divesting from direct ownership in physical supermarkets. 
  • This provides a much needed injection of cash for Rakuten’s digital projects and should also help the online platform build trust with other supermarket chains interested in joining its platform.
  • Both companies reaffirmed their commitment to build the largest online food retail platform within the next two years.

Challenger Tech: Offer Bumped & Declared Final

By David Blennerhassett

  • After consumer electronics retailer Challenger Technologies (CHLG SP) announced a voluntary unconditional cash offer of S$0.56/share on the 30 May, it has closed through terms every day. 
  • At a 3.1% and 4.3% to undisturbed and one-month VWAP, the Offer was low-balled. The Offeror (Dymon Asia and Challenger’s CEO Loo Leong Thye) have now bumped to S$0.60/share. 
  • The price has been declared final. It is still only a 9.1% premium to undisturbed. But it is a lifetime high. 

Russell 2000 Breakout Attempt Underway; Small-Cap Breadth Improving; KRE, KBE, XRT Test Key Levels

By Joe Jasper

  • The S&P 500 broke above 4200 and the 2-month megaphone pattern on Friday, and is already approaching the 4300-4325 area which we have anticipated would cap upside for 2023.
  • While we would be cautious at these levels given our expectation for inflation to remain elevated, we cannot get too bearish if the S&P 500 is above 4165-4200.
  • Breadth remains weak within the S&P 500, but we are starting to see breadth improvement within small-cap Russell 2000 (IWM). More on that below, IWM targets include $190 and $200-202.

Selected European HoldCos and DLC: May’23 Report

By Jesus Rodriguez Aguilar

  • Discounts to NAV of covered holdcos have generally tightened during May. Discounts to NAV: C.F.Alba, 50.1%; GBL, 40.5% (!); Heineken Holding, 16.0%; Industrivärden C, 5.2%; Investor B, 11.6%; Porsche Automobile Holding, 45.1%. 
  • The spread of Rio Tinto DLC widened to 17.2%. Rio Tinto is a candidate for an Australian top hat structure.
  • Recommended trades: Heineken Holding/Heineken, Porsche SE/vs. listed assets and Rio DLC.

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Jun 06
0

Daily Brief Singapore: Sea and more

By | Daily Briefs, Singapore

In today’s briefing:

  • Shopee Faces Decision on Brazil Amid Tax Changes

Shopee Faces Decision on Brazil Amid Tax Changes

By Oshadhi Kumarasiri

  • Most Brazilian e-commerce platforms evade taxes by treating orders as individual transactions instead of business operations, despite the 60% tax on international e-commerce shipments by companies.
  • The Brazillian government plans to address this tax loophole by strengthening oversight and implementing administrative measures.
  • If Sea (SE US) cannot find a viable solution to navigate this tax, there is a strong possibility that Shopee will exit the Brazilian market.

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Jun 06
0

Daily Brief Australia: Austal Ltd, Carly Holdings, Paradigm Biopharmaceuticals and more

By | Australia, Daily Briefs

In today’s briefing:

  • Austal (ASB AU): Privatisation on the Cards?
  • Carly Holdings Limited – Becoming a Layer of the Auto Industry
  • Paradigm Biopharma – Bolstering the iPPS data package for OA

Austal (ASB AU): Privatisation on the Cards?

By Brian Freitas

  • Media reports indicate that Austal Ltd (ASB AU) is in the crosshairs of investors looking to take the company private.
  • In an announcement, Austal Ltd (ASB AU) said it is regularly involved in discussion with strategic parties to create value for shareholders.
  • The recent large contract from the US Navy, potentially more contracts in the pipeline and a weak AUD could result in investors paying up to take the company private.

Carly Holdings Limited – Becoming a Layer of the Auto Industry

By Research as a Service (RaaS)

  • Carly Holdings Limited (ASX:CL8) operates a vehicle subscription business, which it launched in March 2019.
  • Car subscription allows business and retail customers to pay a single monthly fee to access a car for 30 days or more and is an alternative to purchasing or financing a vehicle.
  • Carly has attracted larger automotive industry businesses as shareholders, with a model that facilitates sales volumes of new vehicles and delivers a new recurring revenue stream for automotive manufacturers and dealers. 

Paradigm Biopharma – Bolstering the iPPS data package for OA

By Edison Investment Research

Paradigm is focused on the development of injectable pentosan polysulfate (iPPS) for the treatment of osteoarthritis (OA). While the company has several active human clinical trials, it is also assessing iPPS in a canine model due to the similarities in disease biology. Furthermore, since dogs have a shorter lifespan than humans, the full progression of the condition can be assessed over a condensed period. Management believes that this could be advantageous in evaluating the disease-modifying OA drug (DMOAD) status of iPPS, a key goal for Paradigm. The latest data show that iPPS demonstrates durable effects on pain, function and cartilage volume in the canine OA model at the three-year human equivalent time point (canine 26 weeks). These positive results add to a growing data package to support iPPS as a potential DMOAD. Paradigm intends to present this to the FDA and EMA in H2 CY23, and the outcome of these discussions could represent a significant catalyst for the company, in our view.

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Jun 06
0

Daily Brief United States: Apple Inc, Adeia, Elevance Health , Copper, Godaddy Inc Class A, Hyatt Hotels Corp Cl A, Mckesson Corp, Paypal Holdings, Royal Caribbean Cruises, Teleflex Inc and more

By | Daily Briefs, United States

In today’s briefing:

  • History Could Repeat For Apple With A Hardware High
  • ADEA: Undiscovered AI
  • Elevance Health: A Critical Update (Rating Downgrade)
  • The World Has a New No. 2 Copper Supplier – El Nino Effects Start to Sink In?
  • GoDaddy Inc: Tapping Into The AI Market For Growth? – Major Drivers
  • Hyatt Hotels Corporation: The New Extended Stay Offering Could Be A Game Changer? – Key Drivers
  • McKesson Corporation: A Streamlined Portfolio After Recent Divestitures – Key Drivers
  • PayPal Holdings Inc.: AI-Driven Innovations & TPV Growth Are A Positive Sign – Key Drivers
  • Royal Caribbean Cruises Ltd.: Poised For An Improved 2023? – Key Drivers
  • Teleflex Incorporated: New Launches & Other Key Drivers

History Could Repeat For Apple With A Hardware High

By Kevin George

  • Apple’s stock reached an all-time high ahead of the 2023 Worldwide Developer Conference.
  • The company unveiled its mixed-reality headset, Apple Vision Pro, which could revolutionize communications and be a game-changer for the metaverse.
  • McKinsey predicts that the headset could be a $5 trillion opportunity by 2030.

ADEA: Undiscovered AI

By Hamed Khorsand

  • ADEA could be the most under the radar artificial intelligence (“AI”) beneficiary through its patent portfolio related to hybrid bonding
  • Hybrid bonding is expected to help usher the next generation of semiconductors to handle the growing need for speed and bandwidth with lower power consumption
  • ADEA’s stock has been mainly valued on the free cash flow it is able to generate from its media patent portfolio with little value given to ADEA’s semiconductor patent portfolio

Elevance Health: A Critical Update (Rating Downgrade)

By Pearl Gray Equity and Research

  • Elevance Health, Inc. has been active in the M&A market with the divestiture of its life disability business and a “new markets” acquisition.
  • However, evidence suggests that success is not guaranteed, according to the company.
  • The company’s stock has been downgraded to a moderate buy.

The World Has a New No. 2 Copper Supplier – El Nino Effects Start to Sink In?

By The Commodity Report

  • El Nino effects start to sink in? During last week grain prices saw building up some momentum.
  • The DSCI drought index also surged after many weeks of continuous declines.
  • Nevertheless, we should actually see lots of rain during the summer in the US if we’ll see a classic El Nino.

GoDaddy Inc: Tapping Into The AI Market For Growth? – Major Drivers

By Baptista Research

  • In the first quarter, GoDaddy drove double-digit growth in its Commerce and Applications segment, supported by 10% ARR growth in its Create and Grow products.
  • The Core Platform revenue of GoDaddy was $698 million, with a strong normalized EBITDA margin.
  • The newly managed WooCommerce store offering of GoDaddy replaced its old managed WordPress Commerce offering.

Hyatt Hotels Corporation: The New Extended Stay Offering Could Be A Game Changer? – Key Drivers

By Baptista Research

  • Hyatt Hotels delivered a mixed set of results in its most recent quarter with revenues above Wall Street expectations but below-par earnings.
  • Hyatt achieved significant net room expansions, with more than 5000 rooms added on a gross in the quarter.
  • In the quarter, Hyatt completes its Dream Hotel Group acquisition.

McKesson Corporation: A Streamlined Portfolio After Recent Divestitures – Key Drivers

By Baptista Research

  • McKesson managed an all-around beat in the last quarter, closing out a solid fiscal 2023 with full-year revenues of $277 billion and adjusted earnings per diluted share of $25.94.
  • The core Pharmaceutical Distribution business supported growth in the U.S.
  • Pharmaceutical segment, and they divested their European operations to streamline their portfolio.

PayPal Holdings Inc.: AI-Driven Innovations & TPV Growth Are A Positive Sign – Key Drivers

By Baptista Research

  • PayPal had a successful quarter and managed an all-around beat as it experienced stronger-than-expected growth across its key financial metrics.
  • The Total Payment Volume (TPV) from branded checkout significantly accelerated, while unbranded TPV growth also saw a notable increase.
  • The company has made significant strides in upgrading its merchant and consumer experiences and is committed to executing cost-effectively and efficiently.

Royal Caribbean Cruises Ltd.: Poised For An Improved 2023? – Key Drivers

By Baptista Research

  • Royal Caribbean delivered a solid result managed an all-around beat in the last quarter.
  • For both ticket and onboard, solid demand for Caribbean itineraries is translated into advanced load factors at quite a better-than-expected pricing.
  • Moreover, secular tailwinds continued benefitting Royal Caribbean, with consumers shifting spending and preferences from goods to experiences, resulting in strong travel and entertainment spend.

Teleflex Incorporated: New Launches & Other Key Drivers

By Baptista Research

  • Teleflex had a strong start to 2023 with an all-around beat.
  • For the first quarter, the revenues of Teleflex were $710.9 million, a year-over-year increase.
  • Teleflex continues to benefit from its diversified portfolio and viewed strength across its largest product categories, including OnControl, balloon pumps, and complex catheters.

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Jun 06
0

Daily Brief South Korea: Eoflow, Douzone Bizon and more

By | Daily Briefs, South Korea

In today’s briefing:

  • EOFLOW/Medtronic Tender: Risk/Reward Profile
  • Douzone Bizon: Deeply Oversold, Ready for a Turnaround

EOFLOW/Medtronic Tender: Risk/Reward Profile

By Arun George

  • Medtronic Plc (MDT US) aims to acquire Eoflow (294090 KS) through share purchase agreements (SPA), a share subscription agreement (SSA) and a public tender offer at KRW30,000.
  • The shares are trading wide to terms due to key risks – regulatory approvals and the minimum acceptance condition (Medtronic owns 53.02% of the post-SSA outstanding shares).
  • The regulatory approvals should be forthcoming due to minimum competition issues. The minimum acceptance condition requires a minority acceptance rate of 15.7%, which is achievable due to an attractive offer.

Douzone Bizon: Deeply Oversold, Ready for a Turnaround

By Douglas Kim

  • We believe shares of Douzone Bizon are deeply oversold and ready for a turnaround.
  • The company is increasingly buying back shares. Treasury shares as a percentage of total outstanding shares increased from 0% at end of 2021 to 9.3% at end of 1Q 2023. 
  • Korean government’s plans to boost the domestic software industry by spending more than 560 billion won in the software industry is also likely to positively benefit the company this year. 

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Jun 06
0

Daily Brief Indonesia: BFI Finance Indonesia, GoTo, Amman Mineral Internasional and more

By | Daily Briefs, Indonesia

In today’s briefing:

  • BFI Finance Indonesia (BFIN IJ) – Enter the Era of High Returns
  • GoTo: In Need of More Cash as Growth Begins to Decelerate
  • Amman Mineral International IPO – Promising Assets with Decent Prospects

BFI Finance Indonesia (BFIN IJ) – Enter the Era of High Returns

By Angus Mackintosh

  • BFI Finance Indonesia management recently confirmed its expectations for receivables growth of +20% YoY this year, which looks conservative after a strong start to the year, with +53.9% new-financing growth. 
  • The company booked a strong set of 1Q2023 numbers with strong new bookings growth,  improving net interest spreads, low NPLs, and an ROE of over 22%
  • BFI Finance Indonesia has the lowest cost of funds of the multi-finance companies in Indonesia, with a long track record of strong risk management, and remains a top pick.

GoTo: In Need of More Cash as Growth Begins to Decelerate

By Shifara Samsudeen, ACMA, CGMA

  • GoTo (GOTO IJ) is seeking shareholder approval to raise new capital through a private placement of shares (118.4bn A shares). Shareholder meeting will be held on 30th June.
  • The company’s strategy to prioritise profits have put pressure on growth rates and it seems that the company is in need of more funds to refuel its decelerating growth rates.
  • Though profit matrices have improved, some important growth matrices such as GTV have shown a downward trend and the company is still burning cash.

Amman Mineral International IPO – Promising Assets with Decent Prospects

By Ethan Aw

  • Amman Mineral Internasional (1416286D IJ) is looking to raise around US$880m in its Indonesian IPO. 
  • Amman Mineral International (AMI) carries out exploration, development, mining, processing. The company operates an open pit copper and gold mine known as the Batu Hijau mine in Indonesia.
  • AMI’s profitability grew dramatically over the track record period. However, copper prices might possibly be on a downtrend in the near term.

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