Smartkarma Daily Briefs, Author at Smartkarma

Apr 08

Daily Brief United States: S&P 500 and more

By Smartkarma Daily Briefs | Daily Briefs, United States

In today’s briefing:

SPX 4,100 Bull Turn

SPX 4,100 Bull Turn

By Thomas Schroeder

SPX met the 4,100 long target and NDX turned higher off of 13,000 support that are expected to induce a secondary April rally.
A push back toward SPX 4,200 will put the final touches on the buoyant April recovery cycle toward SPX 4,200/20. There is risk the rally falters below 4,200.
US 10yr yield hovering above 3.20% lower wedge support per call for an undershoot below 3.35%.

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Apr 08

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

By Smartkarma Daily Briefs | Daily Briefs, Japan

In today’s briefing:

Changing Japanese Companies Is Not TSE Request but Inflation that Changes Mindset of All Managers

Changing Japanese Companies Is Not TSE Request but Inflation that Changes Mindset of All Managers

By Aki Matsumoto

For Japanese companies that take time to take action while watching their surroundings, it’s skeptical of the expectation that individual managers will initiate measures in response to a “TSE request.
The shift from deflation to inflation won’t only affect company’s profit structure and balance-sheet, but will also force Japanese companies to change as it resets the mindset of all managers.
Since there’s little economic rationale for holding cash under inflation, all companies, rather than individual management decisions, will be forced to use cash for investment in growth and shareholder returns.

💡 Before it’s here, it’s on Smartkarma

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

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Apr 08

Daily Brief China: Miniso, Atour Lifestyle Holdings, Nayuki Holdings and more

By Smartkarma Daily Briefs | China, Daily Briefs

In today’s briefing:

[Miniso Group (MNSO US）]: Strong Offline Traffic Bodes Well for C1Q23 Growth
[Atour Lifestyle (ATAT US, BUY, TP US$34) Target Price Change]: A Steady Expanding Year in 2023
[Nayuki Holding (2150 HK) Target Price Change]: Business Model Change Has Risky Consequence

[Miniso Group (MNSO US）]: Strong Offline Traffic Bodes Well for C1Q23 Growth

By Shawn Yang

We expect Miniso to report C1Q23 revenue, operating profit, and net income 3.6%, 18.3% and 16.7% higher than consensus.
We think the strong foot traffic to offline stores post CNY bodes well for Miniso’s domestic store sales in 2023;
We maintain the Buy rating, and raise TP by US$1 to US$25 to factor in the sales recovery from higher foot traffic and ARPU.

[Atour Lifestyle (ATAT US, BUY, TP US$34) Target Price Change]: A Steady Expanding Year in 2023

By Shawn Yang

Atour reported its 4Q22 revenue/non-GAAP operating profit/non-GAAP net income 8.0%/78.3%/114.6% higher than our estimate.
We adjust Atour’s hotel expansion estimate from 2.4k to 1.9k until 2025 due to its low appetite in expanding midscale segment.
We raise our 2023 earnings estimate due to better operating efficiency, but trimmed its hotel network expanding pace in 2023-2025, leading to TP cut by US$2.5 to US$34.

[Nayuki Holding (2150 HK) Target Price Change]: Business Model Change Has Risky Consequence

By Shawn Yang

Nayuki reported C2H22 top line 0.9% below our estimate but 18% below consensus，due to deteriorating cost ratios;
Company chose to drastically expand store count by ~600 in 2023. Our concern is that Nayuki stores now are drastically different from its past.
The company is abandoning its premium teahouse position, which begets unknown consequences in our opinion; We keep the TP unchanged at HK 3.1 and maintain SELL.

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Apr 08

Daily Brief Industrials: Amaero International Ltd and more

By Smartkarma Daily Briefs | Daily Briefs, Industrials

In today’s briefing:

Amaero International (ASX:3DA) – “Plan B” Brings Risk but Potentially Greater Returns
Amaero International Ltd – “Plan B” Brings Risk but Potentially Greater Returns

Amaero International (ASX:3DA) – “Plan B” Brings Risk but Potentially Greater Returns

By Research as a Service (RaaS)

Amaero has substantially shifted its strategy to focus on titanium powder production with a new project planned for the UAE.
With the greenlight slated for the end of June 2023, we conservatively anticipate first production in H1 FY25, powder qualification in H1 FY27 and “at capacity” production in H1 FY2.
We have substantially restruck our earnings forecasts to reflect this new project.

Amaero International Ltd – “Plan B” Brings Risk but Potentially Greater Returns

By Research as a Service (RaaS)

Amaero International Ltd (ASX:3DA) is a global specialist in metal additive manufacturing for the defence, aerospace, and other industrial sectors.
Following a strategic review, Amaero has shifted its focus to titanium powder production and has created a new United Arab Emirates-based enterprise, Amaero Advanced Metals Ltd, to build an 827-tonne a year titanium powder operation within Abu Dhabi’s KEZAD industrial park.
The nuances of the focus have shifted since the company first announced plans to concentrate on the UAE and titanium powder operations but “Plan B” allows Amaero shareholders to retain 100% ownership of the project which has been scaled back to focus on the opportunity with the greatest economic return.

💡 Before it’s here, it’s on Smartkarma

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Apr 08

Daily Brief Industrials: Amaero International Ltd and more

By Smartkarma Daily Briefs | Daily Briefs, Industrials

In today’s briefing:

Amaero International (ASX:3DA) – “Plan B” Brings Risk but Potentially Greater Returns
Amaero International Ltd – “Plan B” Brings Risk but Potentially Greater Returns

Amaero International (ASX:3DA) – “Plan B” Brings Risk but Potentially Greater Returns

By Research as a Service (RaaS)

Amaero has substantially shifted its strategy to focus on titanium powder production with a new project planned for the UAE.
With the greenlight slated for the end of June 2023, we conservatively anticipate first production in H1 FY25, powder qualification in H1 FY27 and “at capacity” production in H1 FY2.
We have substantially restruck our earnings forecasts to reflect this new project.

Amaero International Ltd – “Plan B” Brings Risk but Potentially Greater Returns

By Research as a Service (RaaS)

Amaero International Ltd (ASX:3DA) is a global specialist in metal additive manufacturing for the defence, aerospace, and other industrial sectors.
Following a strategic review, Amaero has shifted its focus to titanium powder production and has created a new United Arab Emirates-based enterprise, Amaero Advanced Metals Ltd, to build an 827-tonne a year titanium powder operation within Abu Dhabi’s KEZAD industrial park.
The nuances of the focus have shifted since the company first announced plans to concentrate on the UAE and titanium powder operations but “Plan B” allows Amaero shareholders to retain 100% ownership of the project which has been scaled back to focus on the opportunity with the greatest economic return.

💡 Before it’s here, it’s on Smartkarma

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

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Apr 08

Daily Brief TMT/Internet: S&P 500, GigaVis, X2M Connect ltd and more

By Smartkarma Daily Briefs | Daily Briefs, TMT/Internet

In today’s briefing:

SPX 4,100 Bull Turn
Gigavis IPO Valuation Analysis
X2M Connect (ASX:X2M) – China Contract Adds to H2 Progress
X2M Connect Ltd – China Contract Adds to H2 Progress

SPX 4,100 Bull Turn

By Thomas Schroeder

SPX met the 4,100 long target and NDX turned higher off of 13,000 support that are expected to induce a secondary April rally.
A push back toward SPX 4,200 will put the final touches on the buoyant April recovery cycle toward SPX 4,200/20. There is risk the rally falters below 4,200.
US 10yr yield hovering above 3.20% lower wedge support per call for an undershoot below 3.35%.

Gigavis IPO Valuation Analysis

By Douglas Kim

Our base case valuation of Gigavis IPO is target price of 61,755 won per share, representing 56% higher than the high end of the IPO price range.
We estimate the company to generate sales of 126.6 billion won (up 27% YoY) in 2023 and 150.9 billion won (up 19.2% YoY) in 2024.
Our base case valuation is based on 21.8x P/E using our estimated net profit of 35.9 billion won in 2023.

X2M Connect (ASX:X2M) – China Contract Adds to H2 Progress

By Research as a Service (RaaS)

X2M Connect (ASX:X2M), which is focused on digitising the utilities sector across APAC, has secured $1.8m in hardware water quality sensor sales in China with three new contract.
The contracts bring the contribution from China to $3.4m this financial year which exceeds the revenue generated from China in FY22;
While this announcement is in our numbers, it provides comfort for both near-term and longer-term estimates as units in the field support future recurring subscription fees.

X2M Connect Ltd – China Contract Adds to H2 Progress

By Research as a Service (RaaS)

X2M Connect Ltd (ASX:X2M) has developed and is commercialising a patented proprietary Internet of Things (IoT) solution predominantly focused on the utilities sector across the Asia Pacific region, converting legacy meters into smart meters.
The company has announced it has secured $1.8m in hardware water quality sensor sales in China with three new contracts.
The contracts bring the contribution from China to $3.4m this financial year to date which exceeds the revenue generated from China in FY22.

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Apr 08

Daily Brief Energy/Materials: Empire Energy and more

By Smartkarma Daily Briefs | Daily Briefs, Energy & Materials Sector

In today’s briefing:

Empire Energy Group (ASX:EEG) – Gas Bells Are Ringing
Empire Energy Group Ltd – Gas Bells Are Ringing

Empire Energy Group (ASX:EEG) – Gas Bells Are Ringing

By Research as a Service (RaaS)

Carpentaria-2H testing results continue to build the economic case for EEG
IP30 gas flow of 3.0 mmcfd/1000m (normalised) is on the button and early analysis suggests gas recoveries of 6-8Bcf/well could be achievable
The business case is building with upgraded resource certification to come heading to a FID target date of end-2023.

Empire Energy Group Ltd – Gas Bells Are Ringing

By Research as a Service (RaaS)

Empire Energy Group Limited (ASX:EEG) is an oil and gas producer/developer, with onshore Northern Territory (NT) and US oil/gas production assets.
EEG has the largest tenement position in the highly prospective Greater McArthur Basin, which includes the Beetaloo Sub-basin.
The NT energy basins are fast developing as strategic high-calorific gas bolsters for east coast Australia’s future domestic requirements, growing Gladstone LNG ullage and potential supply for Darwin’s expanding LNG export terminals, amid funding support from Territory and Federal governments.

💡 Before it’s here, it’s on Smartkarma

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Apr 08

Daily Brief Financials: Atour Lifestyle Holdings and more

By Smartkarma Daily Briefs | Daily Briefs, Financials

In today’s briefing:

[Atour Lifestyle (ATAT US, BUY, TP US$34) Target Price Change]: A Steady Expanding Year in 2023

[Atour Lifestyle (ATAT US, BUY, TP US$34) Target Price Change]: A Steady Expanding Year in 2023

By Shawn Yang

Atour reported its 4Q22 revenue/non-GAAP operating profit/non-GAAP net income 8.0%/78.3%/114.6% higher than our estimate.
We adjust Atour’s hotel expansion estimate from 2.4k to 1.9k until 2025 due to its low appetite in expanding midscale segment.
We raise our 2023 earnings estimate due to better operating efficiency, but trimmed its hotel network expanding pace in 2023-2025, leading to TP cut by US$2.5 to US$34.

💡 Before it’s here, it’s on Smartkarma

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

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Apr 08

Daily Brief Consumer: Miniso, PT Surya Citra Media Tbk, Step One Clothing Pty Ltd, Nayuki Holdings, Tokyo Stock Exchange Tokyo Price Index Topix and more

By Smartkarma Daily Briefs | Consumer, Daily Briefs

In today’s briefing:

[Miniso Group (MNSO US）]: Strong Offline Traffic Bodes Well for C1Q23 Growth
PT Surya Citra Media (SCMA IJ) – Primed for Reset in 2023
Step One Clothing Ltd – Underwear Under Valued
[Nayuki Holding (2150 HK) Target Price Change]: Business Model Change Has Risky Consequence
Step One Holdings Ltd – Underwear Under Valued
Changing Japanese Companies Is Not TSE Request but Inflation that Changes Mindset of All Managers

[Miniso Group (MNSO US）]: Strong Offline Traffic Bodes Well for C1Q23 Growth

By Shawn Yang

We expect Miniso to report C1Q23 revenue, operating profit, and net income 3.6%, 18.3% and 16.7% higher than consensus.
We think the strong foot traffic to offline stores post CNY bodes well for Miniso’s domestic store sales in 2023;
We maintain the Buy rating, and raise TP by US$1 to US$25 to factor in the sales recovery from higher foot traffic and ARPU.

PT Surya Citra Media (SCMA IJ) – Primed for Reset in 2023

By Angus Mackintosh

PT Surya Citra Media Tbk (SCMA IJ) had an exciting 2022, with a ramp-up in new audience share-winning original content along with the boost from the Word Cup rights.
Both SCTV and IVM gained significant audience share in 2022, and Vidio led the charge on OTT driven by killer content, finishing the year with 5m paying subscribers.
Profitability was hit by a sharp rise in production costs and investment in Vidio but we expect significant improvement in 2023. Valuations are attractive with SCMA on 12x FY2023E PER.

Step One Clothing Ltd – Underwear Under Valued

By Research as a Service (RaaS)

Step One Clothing (ASX:STP) is a Direct to Consumer (DTC), 100%-own-brand underwear retailer specialising in anti-chafe bamboo underwear across men’s and women’s wear, with a core colour range supplemented by regular limited-edition releases, all with FSC (Forest Stewardship Council) certification throughout the supply chain.
The company has operations in Australia (67% of sales), UK, (30% of sales) and the US (3% of sales). A H1 FY23 sales decline of 5.7% was better than our industry average estimate of-19% cycling lockdown, while lower sales and marketing spend saw EBITDA in-line with the pcp at $7.6m, the highest of any industry peer.
H2 FY23 should see similar trends and deliver EBITDA well above consensus.

[Nayuki Holding (2150 HK) Target Price Change]: Business Model Change Has Risky Consequence

By Shawn Yang

Nayuki reported C2H22 top line 0.9% below our estimate but 18% below consensus，due to deteriorating cost ratios;
Company chose to drastically expand store count by ~600 in 2023. Our concern is that Nayuki stores now are drastically different from its past.
The company is abandoning its premium teahouse position, which begets unknown consequences in our opinion; We keep the TP unchanged at HK 3.1 and maintain SELL.

Step One Holdings Ltd – Underwear Under Valued

By Research as a Service (RaaS)

Step One Clothing (ASX:STP) is a Direct to Consumer (DTC), 100%-own-brand underwear retailer specialising in anti-chafe bamboo underwear across men’s and women’s wear.,
A H1 FY23 sales decline of 5.7% was better than our industry average estimate of -19%, while EBITDA was in-line with the pcp, the highest of any industry peer.
On our estimates this superior business model currently trades at a PER of 1.0x ex-cash. Inventory is the key risk, currently representing ~two years’ sales, but is low fashion risk.leared.

Changing Japanese Companies Is Not TSE Request but Inflation that Changes Mindset of All Managers

By Aki Matsumoto

For Japanese companies that take time to take action while watching their surroundings, it’s skeptical of the expectation that individual managers will initiate measures in response to a “TSE request.
The shift from deflation to inflation won’t only affect company’s profit structure and balance-sheet, but will also force Japanese companies to change as it resets the mindset of all managers.
Since there’s little economic rationale for holding cash under inflation, all companies, rather than individual management decisions, will be forced to use cash for investment in growth and shareholder returns.

💡 Before it’s here, it’s on Smartkarma

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

✓ Unlimited Research Summaries
✓ Personalised Alerts
✓ Custom Watchlists
✓ Company Data and News
✓ Events & Webinars

Apr 08

Daily Brief ESG: Changing Japanese Companies Is Not TSE Request but Inflation that Changes Mindset of All Managers and more

By Smartkarma Daily Briefs | Daily Briefs, ESG

In today’s briefing:

Changing Japanese Companies Is Not TSE Request but Inflation that Changes Mindset of All Managers

Changing Japanese Companies Is Not TSE Request but Inflation that Changes Mindset of All Managers

By Aki Matsumoto

For Japanese companies that take time to take action while watching their surroundings, it’s skeptical of the expectation that individual managers will initiate measures in response to a “TSE request.
The shift from deflation to inflation won’t only affect company’s profit structure and balance-sheet, but will also force Japanese companies to change as it resets the mindset of all managers.
Since there’s little economic rationale for holding cash under inflation, all companies, rather than individual management decisions, will be forced to use cash for investment in growth and shareholder returns.

💡 Before it’s here, it’s on Smartkarma

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

✓ Unlimited Research Summaries
✓ Personalised Alerts
✓ Custom Watchlists
✓ Company Data and News
✓ Events & Webinars

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