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Smartkarma Daily Briefs

May 27
0

Daily Brief Equity Bottom-Up: Meituan: Strong 1Q with Operating Profits; No Disclosure on User Numbers and Delivery Costs and more

By | Daily Briefs, Equity Bottom-Up

In today’s briefing:

  • Meituan: Strong 1Q with Operating Profits; No Disclosure on User Numbers and Delivery Costs
  • Indian Banks Screener: Adding Value Pick Bank of Baroda, Stick with HDFC Bank for Quality
  • GoTo (GOTO IJ) – Key Initiatives and Foundations
  • Intel Has Big Problems Ahead
  • Classys (214150 KS): Strong 1Q23 Result Lifted by Overseas Performance and Consumables Sales
  • NetEase (NTES US, BUY, TP US$106) Earnings Review: Justice Mobile Is the Next Catalyst
  • The Mosaic Company: A Structural Transition Away from Exports in Phosphates – Key Drivers
  • Eli Lilly and Company: Can Rezvoglar Destroy Sanofi’s Insulin Market Share? – Key Drivers
  • Domino’s Pizza Inc.: Store Additions Continue To Drive Growth – Key Drivers
  • DexCom Inc.: Launch of G6 Glucose Monitoring System & Other Drivers

Meituan: Strong 1Q with Operating Profits; No Disclosure on User Numbers and Delivery Costs

By Shifara Samsudeen, ACMA, CGMA

  • Meituan (3690 HK) ’s 1Q2023 earnings beat consensus estimates and the key highlight was the company turning into adjusted operating profits after two years.
  • Revenue from Core local commerce continued to see strong growth in earnings though we expected growth rates to decline with pandemic conditions easing off.
  • Meituan has launched its food delivery app “KeeTa” in Hong Kong which is dominated by Foodpanda and Deliveroo.

Indian Banks Screener: Adding Value Pick Bank of Baroda, Stick with HDFC Bank for Quality

By Victor Galliano

  • We add value play Bank of Baroda to the peer group, and to our buy list; we also add liquidity and funding screens and a PEG ratio valuation metric
  • We keep HDFC Bank as our higher quality bank, with its strong balance sheet, especially on NPA coverage, and further positive momentum from the upcoming HDFC merger
  • We remain negative on State Bank of India, and we are also cautious on ICICI Bank; Axis bank remains a name to watch, although valuations are far from compelling

GoTo (GOTO IJ) – Key Initiatives and Foundations

By Angus Mackintosh

  • GoTo released a Newsletter for May which reiterated its progress toward profitability as well as some key initiatives including increasing service fees and expanding use cases for GoPay Coins rewards.   
  • The newsletter also highlighted the release of the Annual Report and its Sustainability report, which are both important documents for longer-term and increasingly ESG-focused investors. 
  • GoTo also highlights a report from the University of Indonesia regarding the company’s socioeconomic impact in the country, which remains huge given its socio-economic reach through ODS and Tokopedia. 

Intel Has Big Problems Ahead

By Kevin George

  • The chip industry is seeing two “transitions” Intel is being phased out with the GPU shift, according to the company.
  • The company is also expected to be phased out of the chip industry with the next generation of processors.
  • The chip company is expected to have a new generation of chips in the coming years.

Classys (214150 KS): Strong 1Q23 Result Lifted by Overseas Performance and Consumables Sales

By Tina Banerjee

  • Classys (214150 KS) reported solid performance in 1Q23, with double-digit revenue growth, driven by expansion of domestic consumables sales for Shrink Universe and growth in overseas device and consumables sales.
  • Operating profit increased 19% YoY to KRW 19.9 billion, leading to 380 basis point margin expansion to 51%. Net profit increased 46% YoY to KRW 18.8 billion.
  • Classys continues to strengthen its competitiveness through product line and geography expansion. The company has reiterated 2023 revenue guidance of KRW170 billion, representing year-over-year increase of 20%.

NetEase (NTES US, BUY, TP US$106) Earnings Review: Justice Mobile Is the Next Catalyst

By Shawn Yang

  • NetEase reported in-line revenue for 1Q23, while non-GAAP net income exceeded our estimate by 22%. 
  • <Justice Mobile> is set to launch by the end of June. We anticipate that investors may need to wait for some time after June for NetEase’s next potential hit title. 
  • Maintain a BUY with TP unchanged, implying 18X PE in 2023.

The Mosaic Company: A Structural Transition Away from Exports in Phosphates – Key Drivers

By Baptista Research

  • The Mosaic Company had a mixed quarter with revenues of $3.6 billion that were above Wall Street expectations but the company missed out on earnings.
  • While supply issues are still a worry, this is drawing growers back to the market.
  • We give The Mosaic Company a ‘Buy’ rating with a revised target price.

Eli Lilly and Company: Can Rezvoglar Destroy Sanofi’s Insulin Market Share? – Key Drivers

By Baptista Research

  • Eli Lilly is off to a mixed start in 2023, with volume-driven revenue growth led by its incretin portfolio, Verzenio and Jardiance.
  • The new product category delivered $574 million in sales, while the new product and growth product categories together contributed 20 percentage points to volume increase.
  • We give Eli Lilly and Company a ‘Hold’ rating with a revised target price.

Domino’s Pizza Inc.: Store Additions Continue To Drive Growth – Key Drivers

By Baptista Research

  • Domino’s Pizza had a mixed quarter.
  • The company’s revenues were below Wall Street expectations but its operating income margin increased by 100 basis points year-over-year resulting in an earnings beat.
  • In the first quarter, Domino’s international company opened 143 new stores while closing 37 others, totaling 106 net new stores.

DexCom Inc.: Launch of G6 Glucose Monitoring System & Other Drivers

By Baptista Research

  • DexCom had a strong quarter and managed an all-around beat with strong organic revenue growth of 19% compared to last year.
  • The company’s momentum in global CGM adoption remains high, driven by the growing recognition of the unique experience DexCom provides.
  • The launch of their G7 system has been met with enthusiasm, supported by a successful Super Bowl commercial that generated significant engagement and awareness.

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May 27
0

Daily Brief Thematic (Sector/Industry): Global Banks:  Positioning Deep Dive and more

By | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

  • Global Banks:  Positioning Deep Dive
  • Japan Weekly | Advantest, Ibiden, Kawasaki Heavy, SK Kaken, NCHD
  • Asia Ex-Japan Energy: Stalled Recovery

Global Banks:  Positioning Deep Dive

By Steven Holden

  • Among active Global equity funds, exposure to Banking stocks is at the lower end of the decade long range
  • Over the last 6-months, Banks experienced the largest drop in average fund weight of -0.4%, suffered fund outflows of $-1.98bn and had 40 more sellers than buyers over the period.
  • The failure of SVB Financial, First Republic and Signature Bank has effected sentiment in US Banks, but elsewhere we see strong momentum in Singaporean Banks, Indonesian Banks and Indian Banks.  

Japan Weekly | Advantest, Ibiden, Kawasaki Heavy, SK Kaken, NCHD

By Mark Chadwick

  • It was a relatively quiet week for the broader index. However, there was a big sector shift towards tech and AI winners.
  • Japanese Heavy Equipment makers have technologies that will be in demand for decades. KHI trades below book. 
  • As we head into AGM season, we take a look at interesting activist campaigns. 

Asia Ex-Japan Energy: Stalled Recovery

By Steven Holden

  • The recovery in Energy allocations among Asia Ex-Japan funds has stalled, and has started to reverse
  • Selling in Reliance Industries (RIL IN), Offshore Oil Engineering A (600583 CH) and CNOOC Ltd (883 HK) were the key drivers behind the move
  • Versus the iShares MSCI AAJX ETF, Energy is the largest sector underweight alongside Materials and Utilities, with managers overweight the Consumer sectors and Information Technology.  

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May 27
0

Daily Brief Macro: Weekly Market Monitor – Week 21 – Embracing the AI Boom and more

By | Daily Briefs, Macro

In today’s briefing:

  • Weekly Market Monitor – Week 21 – Embracing the AI Boom
  • UK: Return to Flattened Trend in Apr-23
  • CX Daily: China’s Holiday Spending Boom Masks Patchy Recovery
  • US 2-Year Futures
  • TPW Advisory Friday Musings: Patience

Weekly Market Monitor – Week 21 – Embracing the AI Boom

By Jeroen Blokland

  • NVIDIA’s recent earnings report confirms the reality and arrival of the AI boom, with projected sales far exceeding estimates.
  • Commodity prices have dropped, suggesting a high likelihood of a recession in the US.
  • Market breadth indicates weakness, with AI hype overshadowing other indicators. Big Tech companies’ market capitalization has surged, while other stocks have seen declines, raising valuation concerns.

UK: Return to Flattened Trend in Apr-23

By Phil Rush

  • UK retail sales in April 2023 showed an unexpected rebound with 0.5% m-o-m growth, outperforming the previous month’s -1.2% contraction and beating the 0.3% consensus. 
  • This rise represents the highest growth rate since February 2023 and positions April’s sales performance above the 1-year and long-run averages.
  • It reinforces recent signs of recovery in the UK retail sector, breaking the downward trend and providing crucial insights into the economic landscape.

CX Daily: China’s Holiday Spending Boom Masks Patchy Recovery

By Caixin Global

  • Consumption /Analysis: China’s holiday spending boom masks patchy recovery
  • LGFVs /: Kunming scrambles to pay off $170 million of financing vehicle debt
  • China-U.S. /: Top trade officials from China and U.S. to meet at APEC

US 2-Year Futures

By Untying The Gordian Knot

  • The two-year futures broke a bear flag pattern and stopped at the Monthly Pivot S2.
  • We will likely see a temporary pause and a verification of the broken flag.
  • The 2-year HLC Bar chart is difficult to read due to spikes in the data.

TPW Advisory Friday Musings: Patience

By TPW Advisory

  • Patience is a virtue, patience is a virtue – that’s the mantra running through our head as debt ceiling talks drone on and the Curtain of FUD (Fear, Uncertainty & Doubt) continues to obscure the prospects for the brighter future we envision.
  • The oscillating nature of economic data and cross asset market pricing has tried the patience of bull and bear alike.
  • The bulls have had to be content with roughly 10% gains ytd for global equities while the media drumbeat continues to hammer recession, rate hikes and the utility of cash – notwithstanding its weak relative performance YTD.

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May 27
0

Most Read: Kum Yang, AMP Ltd, Stockland, Youlchon Chemical, Rakuten Bank , LTIMindtree, NVIDIA Corp, Hong Kong Hang Seng Index, Eoflow, ISC Co Ltd and more

By | Daily Briefs, Most Read

In today’s briefing:

  • KOSPI200 Index Rebalance: Two Sets of Changes
  • MVIS Australia Equal Weight Index Rebalance: Potential Deletes & Capping Changes
  • MVIS Australia A-REITs Index Rebalance Preview: Capping Changes & Flows
  • KOSPI200 Ad Hoc Index Rebalance: Youlchon Chem to Replace Dongkuk Steel Mill
  • Rakuten Bank & SBI Sumishin Net Bank: Upcoming Passive Flow
  • HDFC/​​​​​HDFC Bank Mega Merger Expected to Complete in a Few Weeks: Index Implications
  • Nvidia Results Blow-Out: Multi-Year Growth Ahead; Wiwynn in Taiwan, Plus a Smallcap Wildcard AI Play
  • EQD | Asian Derivative YTD Range Trade Ideas
  • EOFlow Tender Offer: Preconditions for Closure, Cancellation Risk, & Targetable Allocation
  • ISC’s Tender Offer Possibility Is Decreasing, Indicating a Potential Shorting Opportunity

KOSPI200 Index Rebalance: Two Sets of Changes

By Brian Freitas

MVIS Australia Equal Weight Index Rebalance: Potential Deletes & Capping Changes

By Brian Freitas

  • There are unlikely to be any inclusions to the index in June while there are three stocks that are close to the deletion threshold.
  • Even if there are no constituent changes, there will be capping changes that will result in one-way turnover of over 4% and a one-way trade of A$78m.
  • Short interest on AMP Ltd (AMP AU) has been increasing as the stock has dropped and a further decline in the stock could lead to deletion.

MVIS Australia A-REITs Index Rebalance Preview: Capping Changes & Flows

By Brian Freitas

  • We do not expect any constituent changes in June (that could change though!). The only flows are likely to be from capping the constituents at 10% of the index weight.
  • Capping changes will lead to a one-way turnover of 2.15% resulting in a one-way trade of A$14m. There are two stocks with over A$5m to trade.
  • Stockland (SGP AU) will be the most affected stock with passive trackers needing to sell over 1 day of ADV. The stock has run up and shorts are increasing.

KOSPI200 Ad Hoc Index Rebalance: Youlchon Chem to Replace Dongkuk Steel Mill

By Brian Freitas

Rakuten Bank & SBI Sumishin Net Bank: Upcoming Passive Flow

By Brian Freitas

HDFC/​​​​​HDFC Bank Mega Merger Expected to Complete in a Few Weeks: Index Implications

By Brian Freitas

Nvidia Results Blow-Out: Multi-Year Growth Ahead; Wiwynn in Taiwan, Plus a Smallcap Wildcard AI Play

By Vincent Fernando, CFA

  • Nvidia’s results and guidance sparked a massive rally in the shares, marking one of the largest single-day increases in market cap in U.S. stock market history.
  • The company sees a multi-year growth cycle of data center upgrades ahead. Key supply chain partners TSMC and ASML are rising as well.
  • Wiwynn in Taiwan should be a key winner. We also highlight a potential wildcard smallcap AI play that we will investigate further.

EQD | Asian Derivative YTD Range Trade Ideas

By Leon Gross

EOFlow Tender Offer: Preconditions for Closure, Cancellation Risk, & Targetable Allocation

By Sanghyun Park

  • The likelihood of the merger review not being approved appears to be low. Additionally, the purchase of only 3.8M additional shares is required, leading to a negligible cancellation risk.
  • It is particularly noteworthy that the offering price of ₩30,000, targeting minority shareholders, may be adjusted upward depending on future share price increases.
  • While there is a potential allocation risk, as Medtronic aims to delist the company, they are unlikely to lower the target quantity in the tender offer to a risky level.

ISC’s Tender Offer Possibility Is Decreasing, Indicating a Potential Shorting Opportunity

By Sanghyun Park

  • The possibility of SKC securing additional shares other than the planned 40% through a tender offer seems low. This is a basis for the recent short position build-up in ISC.
  • ISC began to experience an influx of short selling, leading to it being designated as an overheated short-selling stock, and short selling was restricted for one day on the 26th.
  • We need to pay attention to the potential disappointment in the market, which could lead to a sustained downward correction in the stock price.

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May 27
0

Daily Brief Industrials: Roper Technologies, American Airlines Group and more

By | Daily Briefs, Industrials

In today’s briefing:

  • Roper Technologies Inc.: A Disciplined Approach to Capital Deployment – Key Drivers
  • American Airlines Group Inc.: Improving Premium Cabin Demand Is A Positive Sign – Key Drivers

Roper Technologies Inc.: A Disciplined Approach to Capital Deployment – Key Drivers

By Baptista Research

  • Roper had a strong quarter which happened to be an all-around beat.
  • With a solid start to the year, Roper increased its full-year organic growth outlook and EPS guidance, further reinforcing its strong position in the market.
  • Roper Technologies’ backlog at the end of the first quarter of 2023 was $4.4 billion, up 14% from the end of the fourth quarter of 2022.

American Airlines Group Inc.: Improving Premium Cabin Demand Is A Positive Sign – Key Drivers

By Baptista Research

  • In 2023, American Airlines Group got off to a good start with revenues above expectations in the latest quarterly result as well as an earnings beat.
  • In addition to delivering a profit for the quarter, the American Airlines team outperformed its initial EPS projection of roughly breakeven.
  • American Airlines is also satisfied with its domestic and short-haul international unit revenue results.

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May 27
0

Daily Brief Consumer: Tata Motors Ltd, Etsy Inc, Golden Eagle Retail, Comcast Corp Class A, Keurig Dr Pepper Inc, Domino’s Pizza, Unilever PLC, OPAP SA, Skechers Usa Inc Cl A, Thai Foods Group Public Company Limited and more

By | Consumer, Daily Briefs

In today’s briefing:

  • Tata Motors – ESG Report – Lucror Analytics
  • Etsy Inc.: Can It Really Outperform The Major Indices? – Key Drivers
  • Weekly Wrap – 26 May 2023
  • Comcast Corporation: Subscriber Growth Slowdown & Growing Peacock Losses Are Concerning – Key Drivers
  • Keurig Dr Pepper Inc.: Does The Long-Term Growth Potential of Single-Serve Pod Business Make It A Buy? – Key Drivers
  • Domino’s Pizza Inc.: Store Additions Continue To Drive Growth – Key Drivers
  • Unilever ADR: M&A Strategy Continuing to Pay Off? – Key Drivers
  • OPAP – Revenue growth and margin leverage in Q123
  • Skechers U.S.A. Inc.: Acquisition Of Sports Connection Holding & Other Drivers
  • Thaifoods Group (TFG TB) – 2024E Earnings to Grow by 15%; Expecting a HoH Recovery in 2H23E

Tata Motors – ESG Report – Lucror Analytics

By Trung Nguyen

Lucror Analytics’ ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable).
We view Tata Motors’ ESG as “Adequate”, with “Adequate” Governance and Social pillars, while its Environmental pillar is “Strong”. Controversies are “Immaterial” and Disclosure is “Strong”.

Etsy Inc.: Can It Really Outperform The Major Indices? – Key Drivers

By Baptista Research

  • Etsy reported another strong performance and kickstarted the year with an all-around beat.
  • With a roughly 11% increase in revenue to $641 million, the company’s adjusted EBITDA margin was once again very high at 26.6%.
  • Etsy also witnessed strong trends in apparel, particularly in personalized and pop culture-related tops, tees, hoodies, sweatshirts, bags, purses, and gift goods.

Weekly Wrap – 26 May 2023

By Charles Macgregor

Lucror Analytics Weekly Wraps provide an overview of all Morning Views comments and reports published by our analyst team in the past week, and also showcase a list of the most-read reports.

In this Insight:

  1. Lenovo
  2. Vedanta Resources
  3. China Jinmao Holdings
  4. Lifestyle International Holdings
  5. Geely Auto

and more…

Comcast Corporation: Subscriber Growth Slowdown & Growing Peacock Losses Are Concerning – Key Drivers

By Baptista Research

  • Comcast Corporation started off with 2023 on a mixed note.
  • While its revenues and earnings were above Wall Street expectations, the total company revenue of $29.7 billion fell 4%.
  • We give Comcast Corporation a ‘Hold’ rating with a revised target price.

Keurig Dr Pepper Inc.: Does The Long-Term Growth Potential of Single-Serve Pod Business Make It A Buy? – Key Drivers

By Baptista Research

  • The last quarter proved to be a successful one for Keurig Dr Pepper.
  • Their U.S. refreshment beverages segment performed exceptionally well, with share gains in multiple categories and significant market share growth for brands like Dr.
  • Pepper.

Domino’s Pizza Inc.: Store Additions Continue To Drive Growth – Key Drivers

By Baptista Research

  • Domino’s Pizza had a mixed quarter.
  • The company’s revenues were below Wall Street expectations but its operating income margin increased by 100 basis points year-over-year resulting in an earnings beat.
  • In the first quarter, Domino’s international company opened 143 new stores while closing 37 others, totaling 106 net new stores.

Unilever ADR: M&A Strategy Continuing to Pay Off? – Key Drivers

By Baptista Research

  • Unilever made a good start to the year and delivered double-digit underlying sales growth that was above Wall Street expectations.
  • The underlying sales growth was 10.5% in the quarter.
  • Unilever made good progress in executing its strategic priorities, beginning with innovation and brands.

OPAP – Revenue growth and margin leverage in Q123

By Edison Investment Research

OPAP’s Q123 results demonstrated continued strong growth in revenue, helped by improvements to both the retail and online product offering, and profits, with the support of a more favourable macroeconomic background as inflation has declined. The ongoing rejuvenation of the gaming offer is leading to growing player engagement and frequency of use. Management’s unchanged guidance for FY23 looks well-supported. The valuation and dividend yield (9.1%) look attractive relative to the peers.

Skechers U.S.A. Inc.: Acquisition Of Sports Connection Holding & Other Drivers

By Baptista Research

  • Skechers delivered a good financial performance for the quarter, outperforming Wall Street expectations in terms of both its top and bottom lines.
  • Additionally, Skechers made great strides in controlling its inventory levels, which fell 17% from the previous quarter.
  • Furthermore, the company introduced its Skechers Plus loyalty program in Canada, the UK, Germany, and Spain during the first quarter.

Thaifoods Group (TFG TB) – 2024E Earnings to Grow by 15%; Expecting a HoH Recovery in 2H23E

By Waraporn Wiboonkanarak

  • KTX has revised up our rating to Buy (fair value of Bt5.55, based on the earnings yield and a required rate of return of 9.0%).
  • The valuation metrics suggest that the tactical downside risk is limited after the share price drop of over 20% since before Songkran, and we have a positive view on the fundamentals in both the short and long term; we expect earnings growth of 15% YoY in 2024E due to the recovery in the gross profit margin and the expansion of the retail business.
  • TFG should also see the lowest operating expenses to sales amongst peers at around 6.2%, making the profit margin immune to pressure from meat price fluctuations.

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May 27
0

Daily Brief Financials: Bank Of Baroda, iShares MSCI ACWI ETF, S&U PLC and more

By | Daily Briefs, Financials

In today’s briefing:

  • Indian Banks Screener: Adding Value Pick Bank of Baroda, Stick with HDFC Bank for Quality
  • No Traction Above $93 on ACWI-US or 4400-4415 on EURO STOXX 50. Buys in Defensives/Japan/EM
  • S&U – Results on track to meet FY24 expectations

Indian Banks Screener: Adding Value Pick Bank of Baroda, Stick with HDFC Bank for Quality

By Victor Galliano

  • We add value play Bank of Baroda to the peer group, and to our buy list; we also add liquidity and funding screens and a PEG ratio valuation metric
  • We keep HDFC Bank as our higher quality bank, with its strong balance sheet, especially on NPA coverage, and further positive momentum from the upcoming HDFC merger
  • We remain negative on State Bank of India, and we are also cautious on ICICI Bank; Axis bank remains a name to watch, although valuations are far from compelling

No Traction Above $93 on ACWI-US or 4400-4415 on EURO STOXX 50. Buys in Defensives/Japan/EM

By Joe Jasper

  • There continues to be little traction above $93 on MSCI ACWI (ACWI-US), which remains the top-end of our anticipated 2023 trading range. Important downside targets are $86, $84, and $75-77.
  • Additionally, the EURO STOXX 50 remains below 2-year resistance at 4400-4415.
  • We remain overweight Europe, Japan, and India, and we prefer to only add exposure on a pullback — especially in Japan where indexes are bullish yet extended.

S&U – Results on track to meet FY24 expectations

By Edison Investment Research

S&U, the specialist motor and property finance lender, reported a good start to the financial year with profit before tax (PBT) up £0.3m in the period to 24 May despite group borrowing costs increasing by £3m versus the same period last year. A new £230m funding facility has increased total funding facilities to £280m, giving the group just under £100m to fund its growth plans over the next two years. Although rising interest rates are a headwind, credit quality remains strong, and S&U expects growth to continue in FY24. Our estimates remain unchanged.

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May 27
0

Daily Brief Industrials: Roper Technologies, American Airlines Group and more

By | Daily Briefs, Industrials

In today’s briefing:

  • Roper Technologies Inc.: A Disciplined Approach to Capital Deployment – Key Drivers
  • American Airlines Group Inc.: Improving Premium Cabin Demand Is A Positive Sign – Key Drivers

Roper Technologies Inc.: A Disciplined Approach to Capital Deployment – Key Drivers

By Baptista Research

  • Roper had a strong quarter which happened to be an all-around beat.
  • With a solid start to the year, Roper increased its full-year organic growth outlook and EPS guidance, further reinforcing its strong position in the market.
  • Roper Technologies’ backlog at the end of the first quarter of 2023 was $4.4 billion, up 14% from the end of the fourth quarter of 2022.

American Airlines Group Inc.: Improving Premium Cabin Demand Is A Positive Sign – Key Drivers

By Baptista Research

  • In 2023, American Airlines Group got off to a good start with revenues above expectations in the latest quarterly result as well as an earnings beat.
  • In addition to delivering a profit for the quarter, the American Airlines team outperformed its initial EPS projection of roughly breakeven.
  • American Airlines is also satisfied with its domestic and short-haul international unit revenue results.

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May 27
0

Daily Brief Health Care: Eoflow, Jiangxi Rimag Group, Classys, Resmed Inc, Dexcom Inc, Eli Lilly & Co, Iqvia Holdings, Merck & Co Inc., Abbvie Inc and more

By | Daily Briefs, Healthcare

In today’s briefing:

  • EOFlow Tender Offer: Preconditions for Closure, Cancellation Risk, & Targetable Allocation
  • Jiangxi Rimag IPO Preview: Empowering The Future of Medical Imaging Services in China
  • Classys (214150 KS): Strong 1Q23 Result Lifted by Overseas Performance and Consumables Sales
  • ResMed Inc.: On Track to Meet Global Demand for Connected CPAP and APAP Devices – Key Drivers
  • DexCom Inc.: Launch of G6 Glucose Monitoring System & Other Drivers
  • Eli Lilly and Company: Can Rezvoglar Destroy Sanofi’s Insulin Market Share? – Key Drivers
  • IQVIA Holdings Inc.: Major Partnership With CENTOGENE & Other Drivers
  • Merck & Co. Inc.: Acquisition of Prometheus Biosciences & Other Drivers
  • AbbVie Inc.: Is The CytomX Collaboration Failure A Big Setback? – Key Drivers

EOFlow Tender Offer: Preconditions for Closure, Cancellation Risk, & Targetable Allocation

By Sanghyun Park

  • The likelihood of the merger review not being approved appears to be low. Additionally, the purchase of only 3.8M additional shares is required, leading to a negligible cancellation risk.
  • It is particularly noteworthy that the offering price of ₩30,000, targeting minority shareholders, may be adjusted upward depending on future share price increases.
  • While there is a potential allocation risk, as Medtronic aims to delist the company, they are unlikely to lower the target quantity in the tender offer to a risky level.

Jiangxi Rimag IPO Preview: Empowering The Future of Medical Imaging Services in China

By Andrei Zakharov

  • Jiangxi Rimag Group (JIR HK), a China-based medical imaging center operator and provider of Rimag cloud services, filed for a Hong Kong IPO.
  • Jiangxi Rimag Group (JIR HK) was backed by Goldman Sachs, leading VC firms in Asia, Baidu Inc., JD Health, and American healthcare investment firm OrbiMed. 
  • China’s medical imaging industry is experiencing a remarkable transformation, driven by rapid technological advancements, evolving healthcare needs, and supportive government policies.

Classys (214150 KS): Strong 1Q23 Result Lifted by Overseas Performance and Consumables Sales

By Tina Banerjee

  • Classys (214150 KS) reported solid performance in 1Q23, with double-digit revenue growth, driven by expansion of domestic consumables sales for Shrink Universe and growth in overseas device and consumables sales.
  • Operating profit increased 19% YoY to KRW 19.9 billion, leading to 380 basis point margin expansion to 51%. Net profit increased 46% YoY to KRW 18.8 billion.
  • Classys continues to strengthen its competitiveness through product line and geography expansion. The company has reiterated 2023 revenue guidance of KRW170 billion, representing year-over-year increase of 20%.

ResMed Inc.: On Track to Meet Global Demand for Connected CPAP and APAP Devices – Key Drivers

By Baptista Research

  • ResMed delivered a strong set of financial results in the last quarter and managed an all-around beat.
  • While they are still addressing some supply chain challenges with the AirSense 11 platform, they are on track to meet the global demand for connected CPAP and APAP devices by the end of 2023.
  • In this report, we have carried out a fundamental analysis of the historical financial statements of the company.

DexCom Inc.: Launch of G6 Glucose Monitoring System & Other Drivers

By Baptista Research

  • DexCom had a strong quarter and managed an all-around beat with strong organic revenue growth of 19% compared to last year.
  • The company’s momentum in global CGM adoption remains high, driven by the growing recognition of the unique experience DexCom provides.
  • The launch of their G7 system has been met with enthusiasm, supported by a successful Super Bowl commercial that generated significant engagement and awareness.

Eli Lilly and Company: Can Rezvoglar Destroy Sanofi’s Insulin Market Share? – Key Drivers

By Baptista Research

  • Eli Lilly is off to a mixed start in 2023, with volume-driven revenue growth led by its incretin portfolio, Verzenio and Jardiance.
  • The new product category delivered $574 million in sales, while the new product and growth product categories together contributed 20 percentage points to volume increase.
  • We give Eli Lilly and Company a ‘Hold’ rating with a revised target price.

IQVIA Holdings Inc.: Major Partnership With CENTOGENE & Other Drivers

By Baptista Research

  • The last quarter proved to be yet another successful period for IQVIA as they delivered an all-around beat.
  • With an 11% organic growth in revenue, IQVIA demonstrated the strength and diversification of their short- and long-cycle businesses, enabling them to navigate the macroeconomic dynamics effectively.
  • The demand environment for the industry remained robust, with global clinical trial activity showing resilience and positive prospects for their commercial business.

Merck & Co. Inc.: Acquisition of Prometheus Biosciences & Other Drivers

By Baptista Research

  • Merck & Co. made a strong start to the year, with an all-around beat and a good underlying performance across its major growth pillars.
  • Excluding the impact of LAGEVRIO and foreign exchange, the company produced 15% underlying growth.
  • In the United States, KEYTRUDA increased in all major tumor types and continues to gain popularity in earlier-stage malignancies.

AbbVie Inc.: Is The CytomX Collaboration Failure A Big Setback? – Key Drivers

By Baptista Research

  • AbbVie delivered a decent result in the first quarter of the year with revenues above Wall Street expectations and earnings in line with the analyst consensus.
  • Skyrizi and Rinvoq continued to perform well in the first quarter and are still on track to produce more than $11 billion in combined sales this year.
  • Growth rates for both products in the first quarter are in line with the company’s estimation for the entire year.

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May 27
0

Daily Brief Energy/Materials: Sayona Mining, Mosaic Co/The, Chevron Corp, Lyondellbasell Indu Cl A, Exxon Mobil, TotalEnergies , Valero Energy and more

By | Daily Briefs, Energy & Materials Sector

In today’s briefing:

  • Sayona Mining Placement – Has Remained on Schedule with Increased Coverage
  • The Mosaic Company: A Structural Transition Away from Exports in Phosphates – Key Drivers
  • Chevron Corporation: Acquisition of PDC Energy As A Part Of Oil & Gas Industry Consolidation & Other Drivers
  • LyondellBasell: Delivering On Its Strategy, Without Sacrificing Shareholder Returns
  • Exxon Mobil Corporation: Acquisition Of Drilling Rights In Arkansas & Other Drivers
  • TotalEnergies SE: Launch Of Battery Energy Storage Project & Other Developments
  • Valero Energy Corporation: Capacity Expansion Update & Other Drivers

Sayona Mining Placement – Has Remained on Schedule with Increased Coverage

By Ethan Aw

  • Sayona Mining (SYA AU) is looking to raise around US$129m in its primary follow-on offering. Proceeds will be used for CAPEX needs and working capital, amongst others. 
  • The deal is a slightly large one to digest at 17.9 days of ADV and 12.1% dilution.
  • In this note, we will talk about the deal dynamics and run the deal through our ECM framework.

The Mosaic Company: A Structural Transition Away from Exports in Phosphates – Key Drivers

By Baptista Research

  • The Mosaic Company had a mixed quarter with revenues of $3.6 billion that were above Wall Street expectations but the company missed out on earnings.
  • While supply issues are still a worry, this is drawing growers back to the market.
  • We give The Mosaic Company a ‘Buy’ rating with a revised target price.

Chevron Corporation: Acquisition of PDC Energy As A Part Of Oil & Gas Industry Consolidation & Other Drivers

By Baptista Research

  • Chevron once again produced impressive financial results in the most recent quarter and delivered an all-around beat.
  • Despite 20% lower oil prices, adjusted first-quarter earnings increased by more than $200 million over the previous year.
  • Adjusted upstream earnings decreased due to realizations, while adjusted downstream earnings grew due to greater refining margins.

LyondellBasell: Delivering On Its Strategy, Without Sacrificing Shareholder Returns

By Vladimir Dimitrov, CFA

  • LyondellBasell’s share price delivered strong returns, even in the face of continued headwinds and business restructuring.
  • The management is focused on making long-term investments in key areas while at the same time streamlining the business.
  • The company is now offering a dividend yield of 5.6%.

Exxon Mobil Corporation: Acquisition Of Drilling Rights In Arkansas & Other Drivers

By Baptista Research

  • Despite lower energy prices and refining margins, ExxonMobil produced an all-around beat in the first quarter.
  • This 250,000 barrel per day development is the biggest refinery addition in the US, helping to meet society’s ongoing demand for transportation fuels.
  • In addition, ExxonMobil acquired drilling rights in Arkansas to enter the crucial mineral mining industry.

TotalEnergies SE: Launch Of Battery Energy Storage Project & Other Developments

By Baptista Research

  • TotalEnergies had a mixed result in the last quarter with revenues below expectations given that Brent was down 9% and European gas dropped by 50% compared to the previous quarter.
  • European gas has been above $15 per barrel and Brent above $18 per barrel, which is still high by historical standards.
  • Renewable power generation capacity increased by over 1 gigawatt to the previous quarter.

Valero Energy Corporation: Capacity Expansion Update & Other Drivers

By Baptista Research

  • Valero Energy had another strong quarter, with all segments performing well and the company delivering an all-around beat.
  • Notably, Valero achieved a significant milestone by completing and successfully starting up the Port Arthur Coker project, which is expected to enhance the refinery’s capacity and operational efficiency.
  • The company also initiated the production of a new coker at Port Arthur as a capacity expansion initiative.

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