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Smartkarma Daily Briefs

Apr 11
0

Daily Brief Consumer: PDD Holdings Inc, Trial Holdings, Seven & I Holdings, Manyo Factory, Zomato, Dignity PLC, Copper, WD-40 Company, ChopValue Manufacturing Ltd and more

By | Consumer, Daily Briefs

In today’s briefing:

  • Pinduoduo (PDD) Short Review: Third-Party Retailers “Bombarded” Direct Sales
  • Trial IPO to Drive Tech Innovation Targeting Convenience Stores
  • Seven & I: Earnings Peak and Valuation Multiples Nearing Breaking Point
  • Manyo Factory IPO Preview
  • Zomato (ZOMATO IN) | Houston, We Have A “Pincode” Problem
  • New Unconditional Date
  • Between Chilean Copper Woes & Brazilian Sugar Rush
  • WDFC: Slippery Times for the Stock
  • ChopValue Scores US$7.7M Funding to Recycle Chopsticks into Furniture, Home Elements

Pinduoduo (PDD) Short Review: Third-Party Retailers “Bombarded” Direct Sales

By Ming Lu

  • PDD’s small retailers bought out products of direct sales and claimed full refund.
  • The story happened to Alibaba more than ten years ago.
  • It can be hard for PDD to enter the high quality market.

Trial IPO to Drive Tech Innovation Targeting Convenience Stores

By Michael Causton

  • A lot has been said and written about Trial’s IPO but much of this relates to pass performance and comparing it to supermarkets.
  • As the company’s latest Trial Go store in Fukuoka shows,  Trial is a tech-based retailer and a true discounter, and discounting is where the growth is in Japanese FMCG.
  • Trial thinks its technology can reduce costs significantly, improving margins while allowing it to roll out more small format stores to compete with convenience stores. It may be right.

Seven & I: Earnings Peak and Valuation Multiples Nearing Breaking Point

By Oshadhi Kumarasiri

  • Seven & I Holdings (3382 JP) was down as much as 5% on Friday on weak FQ4 earnings as the company’s revenue and OP missed consensus by 1.9% and 2.6% respectively.
  • Earnings likely peaked in FQ3 as fuel retail margin and merchandise sales trend reversed in FQ4.
  • Given the reversal of fuel retail margin and merchandise sales trend and the negative impact of the exchange rate, the risk rewards appear favourable for a short trade.

Manyo Factory IPO Preview

By Douglas Kim

  • Manyo Factory is well known for its functional skin care products made from naural ingredients. Its products have been enjoying excellent sales in Japan and Korea.
  • Given the company’s superior sales growth and operating margins than its peers combined with the large IPO discount, there is likely to be a strong interest in Manyo Factory IPO. 
  • Unlike other major Korean cosmetic companies with poor sales and operating profit in the past three years, Manyo Factory experienced excellent growth of its sales and profits in this period. 

Zomato (ZOMATO IN) | Houston, We Have A “Pincode” Problem

By Pranav Bhavsar

New Unconditional Date

By Jesus Rodriguez Aguilar

  • On 6 April, Bidco and Dignity confirmed that the FCA Change in Control Condition had been satisfied on 5 April. The new Unconditional Date is 4 May 2023.
  • Bidco has so far irrevocables and letters of intent in respect of 39.12%. The end of the life of Dignity as a listed company is nigh.
  • Spread to cash offer is 3.6%/42% (gross/annualised, assuming settlement on 18 May). Long/tender to the cash offer. The Alternative Offers are either Valderrama D shares (unlisted) or Castelnau shares (illiquid).

Between Chilean Copper Woes & Brazilian Sugar Rush

By The Commodity Report

  • As the new season commences in April, Brazil is predicted to manufacture 40.3 million tonnes of sugar, marking the second highest yield ever recorded.
  • This is primarily due to the favorable climate conditions and the sufficient capitalization of mills, allowing for the proper care of crops.
  • As per a report by Job Economia, mills are likely to concentrate on sugar production, reducing ethanol production, since the cost of sugar futures is at its highest in over six years.

WDFC: Slippery Times for the Stock

By Hamed Khorsand

  • WDFC reported fiscal second quarter (February) results continuing to depict a soft demand environment. WDFC reported a decline in unit volume across all major geographies
  • WDFC reported fiscal second quarter sales of $130.2 million compared to $124.9 million achieved in fiscal first quarter.
  • The Company reduced its inventory level only to raise its accounts receivable by more than the decline in inventory and the increase in sales

ChopValue Scores US$7.7M Funding to Recycle Chopsticks into Furniture, Home Elements

By e27

  • ChopValue, a Canadian startup designing and manufacturing products using an innovative, high-performance material engineered from recycled chopsticks, has closed a US$7.7 million funding round.
  • Two unnamed high-profile technology entrepreneurs with expansion interests in Asia Pacific and Europe led the round.
  • Several corporate VC funds and existing investors (VC funds in the climate-tech space and institutional investors such as EDC and BDC) also participated.

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Apr 11
0

Daily Brief Thematic (Sector/Industry): China TMT Update(Apr.10): 700.HK/IQ/NIO/ZLAB/1801HK – Tencent Video and Douyin Reach Cooperation and more

By | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

  • China TMT Update(Apr.10): 700.HK/IQ/NIO/ZLAB/1801HK – Tencent Video and Douyin Reach Cooperation
  • ByteDance’s Douyin and Tencent Reach Video Cooperation Deal as Tensions Thaw
  • China TMT Update(Apr.12/Pt2)-LKNCY/BGNE/9969HK/ZLAB – Abbview & J&J Voluntarily Withdrew
  • China TMT Update(Apr.11/Pt1) – PDD/JD/Li – PDD Launches Electronic Product Consumption Promotion
  • The Highlights : Cannabis News for the Week Ending April 7, 2023
  • TSMC March Revenue Falls 10.9% MoM
  • Weekly Sustainable Investing Surveyor : Week Ended April 7, 2023

China TMT Update(Apr.10): 700.HK/IQ/NIO/ZLAB/1801HK – Tencent Video and Douyin Reach Cooperation

By Shawn Yang

  • 700.HK/ IQ： Tencent Video and Douyin reach strategic cooperation （+/-）
  • NIO: NIO to allow consumers to lock in EC7 orders starting Apr 10 （+）
  • ZLAB/1801HK: ZaiLab started FGFR2 mAb Phase III trial for Gastric Cancer in China (+)

ByteDance’s Douyin and Tencent Reach Video Cooperation Deal as Tensions Thaw

By Caixin Global

  • Rivals ByteDance Ltd.’s Douyin and Tencent Holdings Ltd. have reached a deal to collaborate on video content, marking the latest move toward reconciliation between the two Chinese tech giants that have been locked in copyright disputes for years.
  • Under the agreement, Douyin — the Chinese version of TikTok — and Tencent Video will explore cooperating on areas including joint promotion of long and short videos as well as generation of secondary content, Douyin said in a statement on Friday.
  • The short-video platform said that Tencent Video will authorize the use of its copyrighted long videos to Douyin, and that rules over the creation of secondary content and publication have been clarified.

China TMT Update(Apr.12/Pt2)-LKNCY/BGNE/9969HK/ZLAB – Abbview & J&J Voluntarily Withdrew

By Shawn Yang

  • LKNCY: Luckin Coffee launch new flavor Mint Coconut latte, and co-brand with Doraemon, but with no expectation to be the next blockbuster(+)
  • BGNE/9969HK:Abbview & J&J voluntarily withdrew two major indication of IMBRUVICA, a known positive to BeiGene but within our expectations (+)
  • ZLAB: GSK’s court battle loss to AZ likely will not affect Zai Lab’s royalty obligation on Zejula (/)

China TMT Update(Apr.11/Pt1) – PDD/JD/Li – PDD Launches Electronic Product Consumption Promotion

By Shawn Yang

  • PDD / JD: PDD launches electronic product consumption promotion (-/-)
  • JD: JD to implement new AI model for customer service (+)
  • LI: Li Auto to unveil all-electric solution on Apr 18 (+)

The Highlights : Cannabis News for the Week Ending April 7, 2023

By Water Tower Research

  • Stock indexes finished the holiday-shortened week almost exactly flat, as the MSCI World Index and the S&P 500 ended at 0.01% and -0.05%, respectively.
  • Smalls caps followed suit, with the Russell 2000 down 0.01%.
  • As has been the trend lately, cannabis stocks declined. The US cannabis-focused MSOS ETF dropped 6.36%, led by Curaleaf (CSE: CURA, OTCQX: CURLF), which was down 15.35%.

TSMC March Revenue Falls 10.9% MoM

By William Keating

  • Q1 2023 revenue of ~US$16.7 billion was at the bottom end of the guided range 
  • Despite the inauspicious start, Q1 revenue still represents sequential growth of 3.6% year on year.
  • TSMC’s earnings commentary on April 20 next will set the stage for how recovery looks across the broader semiconductor industry

Weekly Sustainable Investing Surveyor : Week Ended April 7, 2023

By Water Tower Research

  • WTR Sustainable Index: During the week ended April 7, 2023, the WTR Sustainable Index underperformed the broader market, falling 9.0% W/W versus the S&P 500 Index (down 0.1%), the Russell 2000 Index (down 2.7%), and the Nasdaq Composite Index (down 1.1%).
  • Advanced Transportation Solutions (70.0% of the index) contributed to the index underperformance, falling 10.4%, while Industrial Climate and Ag Technology (22.3% of the index) was down 4.5% and Energy Technology was down 8.9%.
  • Valuation: Based on forward 12-month consensus estimates, the current P/E ratio of the WTR Sustainable index is 26.6x versus 18.8x for the S&P 500.

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Apr 11
0

Daily Brief Event-Driven: TOPIX Big April Basket 23: 100% Hit Rate for High Conviction Basket; Focus on Surprises Next and more

By | Daily Briefs, Event-Driven

In today’s briefing:

  • TOPIX Big April Basket 23: 100% Hit Rate for High Conviction Basket; Focus on Surprises Next
  • Kotak Mahindra Bank (KMB IN): Potential MSCI Upweight in May to Bring Close to US$1bn Passive Buying
  • Target May 15th for LONG Youlchon Chemical with Dongkuk Steel’s Split Approval
  • Caverion Switches to Triton’s Offer
  • New Unconditional Date

TOPIX Big April Basket 23: 100% Hit Rate for High Conviction Basket; Focus on Surprises Next

By Janaghan Jeyakumar, CFA

  • The TOPIX liquidity factor removal names (upweights) for April 2023 were announced after the close on Friday 7th April 2023 as expected.
  • According to the announcement, 22 names will see their Liquidity Factors removed and experience index inflows later this month. 
  • Today was the first day of trading post-announcement and the 22 names gained +1.1% (+0.47% vs the TOPIX Index). I feel there could be more upside for some names.

Kotak Mahindra Bank (KMB IN): Potential MSCI Upweight in May to Bring Close to US$1bn Passive Buying

By Brian Freitas

  • Kotak Mahindra Bank (KMB IN) was added to the MSCI India Index at the November 2020 SAIR. However, a LIF of 0.5 was applied due to the low foreign room.
  • The latest shareholding pattern as of end-March shows a foreign room higher than 25%. That should result in a removal of the LIF at the May QCIR.
  • The increase in foreign room is a result of FPIs selling the stock despite the inclusion of Kotak Mahindra Bank (KMB IN) in a global index in March.

Target May 15th for LONG Youlchon Chemical with Dongkuk Steel’s Split Approval

By Sanghyun Park

  • Through the regular rebalancing, Kum Yang and Cosmo Chemical will be included in KOSPI 200, and Youlchon Chemical will be included as an ad-hoc change due to Dongkuk Steel’s deletion.
  • We should prepare for an aggressive long position on Youlchon Chemical from a day trading perspective, targeting May 15th, the day after Dongkuk Steel’s general meeting.
  • If the meeting is scheduled for the morning, we should consider entering the position in the afternoon of the 12th.

Caverion Switches to Triton’s Offer

By Jesus Rodriguez Aguilar

  • Triton’s consortium reduced the acceptance threshold to 2/3rds of all shares, and, as expected,  the board of Caverion changed its recommendation in favour of the Triton consortium’s proposal. 
  • Nearly a third of the shares supporting the offer are held by each party. Bain’s consortium hasn’t improved Triton’s offer and expects the latter will encounter antitrust hurdles.
  • Triton would make a cumulative IRR of about 20% if it sold the business for 7.5x EBITDA by year 7. Long and tender to Triton’s offer (spread is 2.63%/3.75% gross/annualised).

New Unconditional Date

By Jesus Rodriguez Aguilar

  • On 6 April, Bidco and Dignity confirmed that the FCA Change in Control Condition had been satisfied on 5 April. The new Unconditional Date is 4 May 2023.
  • Bidco has so far irrevocables and letters of intent in respect of 39.12%. The end of the life of Dignity as a listed company is nigh.
  • Spread to cash offer is 3.6%/42% (gross/annualised, assuming settlement on 18 May). Long/tender to the cash offer. The Alternative Offers are either Valderrama D shares (unlisted) or Castelnau shares (illiquid).

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Apr 11
0

Daily Brief Macro: Inflation Watch: 10 Reasons Why No One Will Talk Inflation in 6 Months from Now and more

By | Daily Briefs, Macro

In today’s briefing:

  • Inflation Watch: 10 Reasons Why No One Will Talk Inflation in 6 Months from Now
  • Macro Strategy – Slow Walking into a Recessionary Credit Crunch
  • South Korea’s Economic and Geopolitical Risks Pose Strategic Quandary
  • China’s Economy Remains Fragile Despite Headline Recovery
  • Australian Dollar
  • Will North Korea Spring a Nasty Surprise?
  • Between Chilean Copper Woes & Brazilian Sugar Rush

Inflation Watch: 10 Reasons Why No One Will Talk Inflation in 6 Months from Now

By Andreas Steno

  • All major forward looking indicators point to disinflation in coming quarters
  • Even sticky prices now seem to be fading in various indicators
  • No one will talk inflation in six months from now 

Macro Strategy – Slow Walking into a Recessionary Credit Crunch

By Andreas Steno

  • The weakest 2-week change in bank lending on record over the course of March
  • Banks take extremely conservative decisions on the back of SVB
  • If bank lending continues to contract, Real Estate will be the first victim 

South Korea’s Economic and Geopolitical Risks Pose Strategic Quandary

By Manu Bhaskaran

  • The sluggish semiconductors market will weigh against the cyclical outlook via manufacturing activity and exports. China’s reopening in trade and tourism is unlikely to compensate. 
  • The severe population headwinds are caused by entrenched and interlinked factors including labour market rigidities, costs of household formation, and cultural legacies. 
  • Geopolitical tensions also pose questions for South Korea’s export-driven model of industrialization. Other Asian markets wishing to emulate this path should be cautious.

China’s Economy Remains Fragile Despite Headline Recovery

By Manu Bhaskaran

  • The central bank’s depositors’ survey shows signs of recovery in sentiment, but household behaviour still leans towards rebuilding financial buffers and precautionary savings. 
  • Exporters are also facing difficulties, spurring policy support. A nascent recovery in the property sector, although this needs to be spread geographically for a significant upside. 
  • These pockets of fragility mean that spillovers from China’s re-opening may be less than hoped, although outbound tourism remains a bright spot given pent-up demand.

Australian Dollar

By Untying The Gordian Knot

  • The Australian Dollar is at a medium and long-term inflexion point.
  • The first question it raises is, does the Australian Dollar holds support and makes a sustainable rally or take the next major leg down?
  • Secondly, is it a cause or an effect of weakening Global Demand for industrial commodities? 

Will North Korea Spring a Nasty Surprise?

By Manu Bhaskaran

  • The chances of destabilizing actions emanating from Pyongyang have increased due to changes in domestic and external dynamics in the regime’s decision-making. 
  • Pyongyang’s history of calibrated but high-risk provocations points to the regime trying to pressure the US to recognize the regime and nuclear power, bypassing Seoul. 
  • A series of weapons tests and demonstrations, a severance of communications, and domestic troubles mean that the risk of foreign adventurism has risen.

Between Chilean Copper Woes & Brazilian Sugar Rush

By The Commodity Report

  • As the new season commences in April, Brazil is predicted to manufacture 40.3 million tonnes of sugar, marking the second highest yield ever recorded.
  • This is primarily due to the favorable climate conditions and the sufficient capitalization of mills, allowing for the proper care of crops.
  • As per a report by Job Economia, mills are likely to concentrate on sugar production, reducing ethanol production, since the cost of sugar futures is at its highest in over six years.

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Apr 11
0

Daily Brief Equity Bottom-Up: Pinduoduo (PDD) Short Review: Third-Party Retailers “Bombarded” Direct Sales and more

By | Daily Briefs, Equity Bottom-Up

In today’s briefing:

  • Pinduoduo (PDD) Short Review: Third-Party Retailers “Bombarded” Direct Sales
  • China Internet Weekly (10Apr2023): Tencent, Douyin, Bilibili, Alibaba, Baidu, World Perfect
  • Seven & I: Earnings Peak and Valuation Multiples Nearing Breaking Point
  • MTR (66 Hk): Now if You Missed the First Bounce
  • China Comm Const (1800 HK): We See More Stories Coming
  • Zomato (ZOMATO IN) | Houston, We Have A “Pincode” Problem
  • [Alibaba (BABA US, BUY, TP US$109) Earnings Preview]: Recovery Is on the Way Amid Weakness in C1Q23
  • China Shineway Pharmaceutical (2877.HK) – Strong Growth Momentum Is Expected to Continue in 2023
  • Smartkarma Corporate Webinar | Vividthree: Monetising Content Through Multimedia
  • Huawei’s 2022 Profit Plunges 69% Amid Sanctions and Heavy R&D Outlays

Pinduoduo (PDD) Short Review: Third-Party Retailers “Bombarded” Direct Sales

By Ming Lu

  • PDD’s small retailers bought out products of direct sales and claimed full refund.
  • The story happened to Alibaba more than ten years ago.
  • It can be hard for PDD to enter the high quality market.

China Internet Weekly (10Apr2023): Tencent, Douyin, Bilibili, Alibaba, Baidu, World Perfect

By Ming Lu

  • Tencent authorized video editing right to Douyin, one of its main competitors.
  • Some of Bilibili’s video uploaders cannot survive the hard time.
  • Both Alibaba and Baidu launched their ChatGPT-like apps, but Baidu’s app was .

Seven & I: Earnings Peak and Valuation Multiples Nearing Breaking Point

By Oshadhi Kumarasiri

  • Seven & I Holdings (3382 JP) was down as much as 5% on Friday on weak FQ4 earnings as the company’s revenue and OP missed consensus by 1.9% and 2.6% respectively.
  • Earnings likely peaked in FQ3 as fuel retail margin and merchandise sales trend reversed in FQ4.
  • Given the reversal of fuel retail margin and merchandise sales trend and the negative impact of the exchange rate, the risk rewards appear favourable for a short trade.

MTR (66 Hk): Now if You Missed the First Bounce

By Henry Soediarko

  • MTR Corp (66 HK) is the lagging stock in Hong Kong although it is a key beneficiary to more Chinese tourists that will arrive soon.
  • HK Government has launched a few initiatives to invite tourists to visit Hong Kong that will boost higher ridership for the company. 
  • It is now trading at the level prior to COVID with the potential of higher earnings that will come from the ridership increase. 

China Comm Const (1800 HK): We See More Stories Coming

By Osbert Tang, CFA

  • China Communications Construction (1800 HK) is expected to generate higher shareholder return through improvement in profitability/cash flow, spin-off, asset disposal and issuance of REITs.
  • Operationally, backlog reached Rmb3.39trn at end-FY22, enough to cover 3.9x FY23F revenue. It expects revenue to grow at least 7% and new contract by no less than 9.8% in FY23. 
  • Employee incentive scheme has been adopted with targets including FY21-23 earnings CAGR of at least 8% and FY23 return on net assets of 7.7%. This aligns employee interests with shareholders’. 

Zomato (ZOMATO IN) | Houston, We Have A “Pincode” Problem

By Pranav Bhavsar

[Alibaba (BABA US, BUY, TP US$109) Earnings Preview]: Recovery Is on the Way Amid Weakness in C1Q23

By Shawn Yang

  • We expect BABA to report C1Q23 (F4Q23) top-line and non-IFRS net income (5.0%) and (5.9%) vs. consensus, respectively, 
  • Due to: 1) weak sales of Taobao, Tmall and 1P sales; 2) the on-going move of a key Cloud client; 
  • We maintain US$109 TP as: 1) Taobao and Tmall sales shows recovery trend; 2) near-term benefit of unveiling its LLM AI; and 3) benefit from the new business unit structure.

China Shineway Pharmaceutical (2877.HK) – Strong Growth Momentum Is Expected to Continue in 2023

By Xinyao (Criss) Wang

  • Shineway’s 2022 performance was outstanding.Its TCM formula granules business would seize more market share and maintain strong growth momentum, which would continue to be the main performance driver in 2023.
  • Considering obvious policy preferences and lower price reduction of TCM in VBP, we recommend investors to leave a place for TCM company in portfolio, and Shineway deserves investors’ attention.
  • Shineway is cash rich. Together with promising growth potential and solid financial performance, Shineway’s share price is expected to perform well, which could be a good trading target for investors.

Smartkarma Corporate Webinar | Vividthree: Monetising Content Through Multimedia

By Smartkarma Research

For our next Corporate Webinar, we are glad to welcome Vividthree’s CEO, Jonathan Zhang.

In the upcoming webinar, Jonathan will share a short company presentation after which, he will engage in a fireside chat with Smartkarma Insight Provider, Angus Mackintosh. The Corporate Webinar will include a live Q&A session.

The Corporate Webinar will be hosted on Tuesday, 18 April 2023, 17:00 SGT.

About Vividthree

Headquartered in Singapore with subsidiaries in Malaysia and China, Vividthree Holdings Ltd. specialises in Visual Effects (“VFX”), animation and Virtual Reality (“VR”) for content creation and services across the Digital Entertainment and Out-of-Home Entertainment sectors, as well as collaborations in Meetings, Incentives, Conferences, Exhibitions (“MICE”) projects.

Since its establishment in 2006, Vividthree has secured its position as Singapore’s leading 3D animation and VFX studio with its multi-award-winning track record. In 2017, the Company expanded into the immersive media space with virtual reality (VR) and augmented reality (AR) capabilities. The Vividthree brand of excellence can be found in many works, including Singapore’s box-office-breaking trilogy Ah Boys to Men, SG50 Future of Us Exhibition, NS50 Home Team parade and Train to Busan VR Tour show.

Vividthree has secured the exclusive rights to develop a VR tour show for Peninsula, the sequel to the 2016 Korean box office hit, Train to Busan, as well as acquired the intellectual property rights to the popular webcomic, Silent Horror.

Huawei’s 2022 Profit Plunges 69% Amid Sanctions and Heavy R&D Outlays

By Caixin Global

  • Huawei Technologies Co. posted its lowest profit margin ever for 2022 but managed a slight revenue gain in the third year of U.S. sanctions that forced the Chinese electronics giant to diversify its business into new sectors from cloud computing to automobiles.
  • The company reported net profit of 35.6 billion yuan ($5.18 billion) for 2022, a 69% decline from 2021, on revenue of 642.3 billion, up 0.9% from a year ago.
  • Its profit margin fell to a record low of 5.5%.

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Apr 10
0

Daily Brief United States: Keurig Dr Pepper Inc, OpenAI and more

By | Daily Briefs, United States

In today’s briefing:

  • Keurig Dr Pepper: The Recent Share Price Drop Might Not Last For Long
  • AI minus the BS (Part 2)

Keurig Dr Pepper: The Recent Share Price Drop Might Not Last For Long

By Vladimir Dimitrov, CFA

  • Keurig Dr Pepper share price has been under pressure over the recent months due to higher than expected drop in profitability.
  • Beverage segments, however, continue to perform well and would most likely offset weaknesses in coffee.
  • Investors should not expect a quick rebound in the company’s free cash flow.

AI minus the BS (Part 2)

By Value Punks

  • In Part 1 of this series, we emphasized that despite the considerable hype and fear-mongering surrounding it, ChatGPT and recent development in the field of AI deserves a closer look.
  • Then we explored ChatGPT’s basic capabilities.
  • If you just look at the summary of what it can do, you might conclude that we have just invented a magical unicorn that spews rainbows across the sky as it flies.

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Apr 10
0

Daily Brief Australia: Genesis Minerals and more

By | Australia, Daily Briefs

In today’s briefing:

  • Merger Arb Mondays (10 Apr) – Genesis, Estia, Newcrest, Pushpay, Mincor, Golden Energy, Toyo

Merger Arb Mondays (10 Apr) – Genesis, Estia, Newcrest, Pushpay, Mincor, Golden Energy, Toyo

By Arun George

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Apr 10
0

Daily Brief China: Tencent, Pop Mart International Group Limited, ZJLD Group and more

By | China, Daily Briefs

In today’s briefing:

  • Last Week in Event SPACE: ANZ/​Suncorp, JCNC, Adani, Khan Bank/HS Holdings, Hong Kong Buybacks
  • Popmart (9992 HK): Long Term Constraints Cloud Near Term Recovery
  • ZJLD Group Pre-IPO – Thoughts on Valuation

Last Week in Event SPACE: ANZ/​Suncorp, JCNC, Adani, Khan Bank/HS Holdings, Hong Kong Buybacks

By David Blennerhassett

  • In a dealbreak, ANZ (ANZ AU) will either have enough capital in a downturn or excess capital it could use to buy back stock. If behavioural remedies, SunCorp is cheaper. 
  • Jardine Cycle & Carriage (JCNC SP)‘s implied stub value is around its highest-ever level, dating back to 2004.
  • There is no good reason to be long Adani names, even if GQG is up 25% on his money so far.

Popmart (9992 HK): Long Term Constraints Cloud Near Term Recovery

By Eric Chen

  • Markets expect Popmart to deliver fast growth for years to come, yet we are skeptical because the pop toy business, by definition, is a niche market.
  • Blaming COVID for Popmart’s weak results risks focusing too much on near-term cyclical recovery but overlooking structural bottlenecks to growth.
  • While we are cautious for long term, continued improvement in business and news flow leading to 1H results will likely result in share price rebound and provide tactical trading opportunity.

ZJLD Group Pre-IPO – Thoughts on Valuation

By Clarence Chu

  • ZJLD Group (ZJLD HK) is looking to raise up to US$500m in its upcoming Hong Kong IPO.
  • ZJLD Group (ZJLD) is a Chinese liquor company primarily producing baijiu.
  • In this note, we discuss our earnings assumptions and share our thoughts on ZJLD’s valuation.

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Apr 10
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Daily Brief Indonesia: Bundamedik Tbk PT and more

By | Daily Briefs, Indonesia

In today’s briefing:

  • PT Bundamedik Tbk (BMHS IJ): Growing Core Business; Eyeing Mid-Teens Revenue Growth in 2023

PT Bundamedik Tbk (BMHS IJ): Growing Core Business; Eyeing Mid-Teens Revenue Growth in 2023

By Tina Banerjee

  • Bundamedik Tbk PT (BMHS IJ) reported 15% decline in revenue in 2022. However, non-COVID business recorded revenue growth of 17%. Contribution of core business to total revenue increased to 92%.
  • All the key operating parameters improved significantly from pre-COVID level. Occupancy rate of the existing hospitals improved to 66% in 2022 from 58% in 2021. New hospitals recorded 71% occupancy.
  • The company aims to achieve revenue growth of ~17% YoY and EBITDA growth of 23–24% YoY in 2023, supported by the significant development of the company’s core business.

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Apr 10
0

Daily Brief Japan: Tokyo Stock Exchange Tokyo Price Index Topix and more

By | Daily Briefs, Japan

In today’s briefing:

  • ROE up Modestly, but ROE Plus DOE Is Expected to Reach a Record High This Fiscal Year

ROE up Modestly, but ROE Plus DOE Is Expected to Reach a Record High This Fiscal Year

By Aki Matsumoto

  • ROE has not risen at the pace expected, but dividends have begun to increase, and in FY2021 DOE rose to the 3% range for the first time.
  • While ROE alone will not surpass the record high of FY2017, ROE plus DOE (ROE+DOE) is expected to slightly surpass the record high of FY2017 in FY2022.
  • Even in FY2021, when DOE increased, Equity Ratio increased (and total assets also increased), so there is still room to increase shareholder returns, given that cash on hand increased.

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