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Smartkarma Daily Briefs

Mar 14
0

Daily Brief China: ZTO Express, Meituan, JD Logistics, Shenzhen Mindray Bio-Medical Electronics, Country Garden Holdings Co, Kanzhun and more

By | China, Daily Briefs

In today’s briefing:

  • China Internet Weekly (13Mar2023): ZTO, Meituan, Alibaba, Trip.com, Dada, JD.com
  • Meituan: Scaling Back Ride-Hailing Business to Maintain Margins
  • JD Logistics (2618 HK): 4Q22, Outside Customer Revenue Continued Surging, Buy
  • Shenzhen Mindray Bio-Medical Electronics (300760.CH) – Shareholders’ Stock Selling and the Outlook
  • Morning Views Asia: Adani Transmission, Country Garden Holdings Co
  • [Kanzhun Ltd. (BZ US) Rating Change]: Nearing a Saturation Point…DG to SELL

China Internet Weekly (13Mar2023): ZTO, Meituan, Alibaba, Trip.com, Dada, JD.com

By Ming Lu

  • Grizzly Research LLC publishes a short selling report on ZTO.
  • Meituan plans to shift car hailing from direct operation to a platform for third-party operators.
  • Dada, which was acquired by JD.com last year, posts good 4Q22 results.

Meituan: Scaling Back Ride-Hailing Business to Maintain Margins

By Shifara Samsudeen, ACMA, CGMA

  • Several news media outlets reported last week that Meituan (3690 HK) is restructuring its ride-hailing services business to cut down costs as top line growth is slowing down.
  • Meituan launched ride-hailing services as a stand-alone app in 2017, it was merged into Meituan Super App in 2019. Relaunched as a stand-alone app in 2021 following Didi’s app removal.
  • Meituan has increased its headcount to compete with Douyin while has started hiring riders to launch services in Hong Kong which would likely to further drag down margins.

JD Logistics (2618 HK): 4Q22, Outside Customer Revenue Continued Surging, Buy

By Ming Lu

  • Total revenue increased by 41% YoY and revenue from external customers increased by 69% YoY in 4Q22.
  • We believe total revenue will grow by 26% in 2023 and 17% in 2024.
  • We also believe the stock has an upside of 58% and a price target of HK$20.

Shenzhen Mindray Bio-Medical Electronics (300760.CH) – Shareholders’ Stock Selling and the Outlook

By Xinyao (Criss) Wang

  • Several original shareholders reduced their holdings of Mindray, which indicates that the senior executives and major shareholders aren’t optimistic about Mindray’s outlook, putting the Company’s long-term growth under scrutiny.
  • Mindray’s performance in overseas markets could be under pressure, which is an uncertain factor to drag down this year’s performance growth. Supply chain issue would hinder Mindray’s breakthrough in high-end fields.
  • Performance slowdown could continue if without breakthroughs in new growth points or internationalization. Our forecast on 2023 growth is about 15%-18%. Mindray’s valuation may fall back to 30-35 PE TTM.

Morning Views Asia: Adani Transmission, Country Garden Holdings Co

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.

[Kanzhun Ltd. (BZ US) Rating Change]: Nearing a Saturation Point…DG to SELL

By Shawn Yang

  • We are concerned that BZ will incur higher sales marketing cost to maintain its increasingly sluggish MAU growth. 
  • We expect BZ to post C4Q22 revenue 2% higher than consensus, but with non-GAAP net margin 5.7ppt lower, due to lower GM and higher S&M.
  • We downgrade BZ from BUY to SELL rating, and cut TP to US$12.4, imply 51x PE in 2023, and the stock currently trading at 76x PE in 2023.

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Mar 14
0

Daily Brief Australia: Ricegrowers Ltd and more

By | Australia, Daily Briefs

In today’s briefing:

  • Ricegrowers Limited (SunRice) – H1 FY23 Highlights Relative Freight Opportunity

Ricegrowers Limited (SunRice) – H1 FY23 Highlights Relative Freight Opportunity

By Research as a Service (RaaS)

  • We have compiled a summary of the results and outlook statements for our assessed peers of Ricegrowers Limited, trading as SunRice (ASX:SGLLV), with a particular focus on trading conditions, product pricing, freight costs, outlook statements and consensus earnings changes.
  • The overwhelming summary of trading conditions over CY22 was ‘challenging’ outside of Treasury Wine Estates (ASX:TWE) and Ridley Corporation (ASX:RIC).
  • The overwhelming outlook commentary assumes normalising weather conditions, price increases recouping cost inflation, lower freight costs, improved labour availability and higher earnings. 

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Mar 14
0

Daily Brief India: Sona BLW Precision Forgings, Adani Transmission, Country Garden Holdings Co and more

By | Daily Briefs, India

In today’s briefing:

  • Sona Blw Precision Placement – US$585m Clean-Up Sale by Blackstone Will Lift the Overhang
  • Quiddity Leaderboard for BSE/​SENSEX Jun 23: NMDC Could Be a BSE 200 ADD
  • Morning Views Asia: Adani Transmission, Country Garden Holdings Co

Sona Blw Precision Placement – US$585m Clean-Up Sale by Blackstone Will Lift the Overhang

By Clarence Chu

  • Singapore VII Topco III (Blackstone-affiliate) is looking to raise at least US$585m in its stake sale of Sona BLW Precision Forgings (SONACOMS IN) . 
  • The share sale is a clean-up one and will lift the overhang on the stock.
  • The block is marketed at a floor price of INR400/share, at a 8.3% discount to last close. 

Quiddity Leaderboard for BSE/​SENSEX Jun 23: NMDC Could Be a BSE 200 ADD

By Janaghan Jeyakumar, CFA

  • In this insight, we take a look at the Potential ADDs/DELs for the BSE SENSEX, 100, 200, and 500 Indices in the June 2023 Rebalance.
  • The BSE AllCap March 2023 Rebalance results were announced and this changes the main universe from which SENSEX, BSE 100, and BSE 200 members are selected.
  • In this insight, we take a look at the recent updates to my expectations and the price and volume performance of the candidates.

Morning Views Asia: Adani Transmission, Country Garden Holdings Co

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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Mar 14
0

Daily Brief South Korea: K Car, LX International, SK Networks, Hanwha Aerospace, Lutronic Corp and more

By | Daily Briefs, South Korea

In today’s briefing:

  • Names for a Preemptive Long Short Setup for KOSPI 200 June Rebalancing
  • Shorting Event on LX International’s Potential Rights Offer for HMM Takeover
  • SK Networks: 100 Billion Won in Share Buyback + 70 Billion Won in Treasury Shares Cancellation
  • MSCI Korea Potential Adds & Deletes in May 2023 Amid Heightened Market Volatility
  • Lutronic Corp (085370 KS): Record-High Performance in 2022; Litigation May Limit Upside Potential

Names for a Preemptive Long Short Setup for KOSPI 200 June Rebalancing

By Sanghyun Park

  • Kum Yang and Youlchon Chemical are within the borderline for inclusion, whereas Hwaseung Enterprise and K Car are in the deletion zone.
  • Since the review period has reached 75%, it seems reasonable to consider a somewhat aggressive buildup for them.
  • We can also consider setting up preemptive positions only for Kum Yang and Hwaseung Enterprise and then sequentially look for entry opportunities for Youlchon and K Car later on.

Shorting Event on LX International’s Potential Rights Offer for HMM Takeover

By Sanghyun Park

  • The opinion rapidly spreading in the local market is that LX International is increasing its available shares by twice the amount to plan a paid-in increase for the HMM acquisition.
  • The size of an offering is estimated at ₩1.2T to ₩1.5T. The short-term price impact will undoubtedly be significant for LX International having a market cap of ₩1.2T.
  • The market has already witnessed a preemptive position buildup targeting this. However, since there is a time gap until the offering announcement, an entry point opportunity may still be available.

SK Networks: 100 Billion Won in Share Buyback + 70 Billion Won in Treasury Shares Cancellation

By Douglas Kim

  • SK Networks announced that it will repurchase 100 billion won in common shares and also cancel nearly 70 billion won of existing treasury shares.
  • The combined share buyback and treasury shares cancellation will represent nearly 14% of the company’s total outstanding shares.  
  • The combined share buyback and treasury shares cancellation which will represent nearly 14% of the company’s total outstanding shares, will likely have a positive impact on SK Network’s share price.

MSCI Korea Potential Adds & Deletes in May 2023 Amid Heightened Market Volatility

By Douglas Kim

  • In this insight, we discuss the potential inclusions and exclusions in the next MSCI Korea Index rebalance announcement in May 2023 amid heightened market volatility.
  • The potential inclusions (high probability) in the MSCI Korea index in May are Hanwha Aerospace and Ecopro. Potential adds (low probability) include POSCO International, Cosmo AM&T, and SM Entertainment.
  • The three most likely exclusions in the MSCI Korea index in May include Lotte Shopping, SD Biosensor, and S1 Corporation.

Lutronic Corp (085370 KS): Record-High Performance in 2022; Litigation May Limit Upside Potential

By Tina Banerjee

  • Lutronic Corp (085370 KS) recorded its highest ever revenue and operating profit in 2022, driven by strong performance of overseas business, which contributed 88% of revenue and grew 62% YoY.
  • Overall, business has recovered with the reopening of the dermatology clinics and resumption of elective procedures globally. In addition to product sales, sales of consumables and services are steadily increasing.
  • Despite stellar performance in 2022, ongoing lawsuit against U.S.-based competitor remains an overhang on Lutronic’s overseas growth aspirations, especially in the U.S.

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Mar 14
0

Daily Brief Singapore: Halcyon Agri, ARA US Hospitality Trust, GK Goh Holdings and more

By | Daily Briefs, Singapore

In today’s briefing:

  • Halcyon Agri’s Offer: IFA Says Fair. Independent Directors Say Accept
  • REIT Watch – Hospitality S-REITs’ DPU rebound 32% in 2022
  • G.K.Goh’s Offer Doc Out. No New News Otherwise

Halcyon Agri’s Offer: IFA Says Fair. Independent Directors Say Accept

By David Blennerhassett

  • Halcyon Agri (HACL SP) has issued the circular in response to China Hainan Rubber Industry (601118 CH)‘s conditional MGO.
  • The IFA reckons the Offer is fair and reasonable. The Independent Directors recommend that shareholders accept the Offer.
  • The first close is the 24 March. Hainan Rubber is under no obligation to extend the Offer beyond this date. 

REIT Watch – Hospitality S-REITs’ DPU rebound 32% in 2022

By Geoff Howie

  • Of the 30 S-REITs which have declared full year 2022 distributions, median change in distribution per unit (DPU) increased marginally by 0.2 per cent year-on-year (y-o-y).
  • The five trusts with the highest y-o-y DPU increments for FY22 are: ARA US Hospitality Trust (760 per cent), Paragon REIT (34 per cent), CDL Hospitality Trusts (32 per cent), CapitaLand Ascott Trust (31 per cent) and Far East Hospitality Trust (24 per cent).
  • CDL Hospitality Trusts (CDLHT) declared a DPS of 5.63 Singapore cents for FY22, up 31.9 per cent y-o-y.

G.K.Goh’s Offer Doc Out. No New News Otherwise

By David Blennerhassett

  • The Offer Document for GK Goh Holdings (GKG SP)‘s MBO has been dispatched. The Offer price of $1.26/share, which is final, is a 38.5% premium to last close. 
  • The Offer is conditional on the Goh family holding 90%, which may be reduced to 50%. GKG Investment, with 62.89%, has given an irrevocable to tender. 
  • There is no IFA opinion in the Offer Doc. This will be present in the Circular which is expected to be sent out by the 28th March, at the latest.

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Mar 14
0

Daily Brief United States: ZKH Group, Westwater Resources, Cf Industries Holdings, Crude Oil, Davita Healthcare Partners, AmerisourceBergen Corp, Parker Hannifin, Sprott Physical Platinum and Palladium Trust, USD Coin, Fmc Corp and more

By | Daily Briefs, United States

In today’s briefing:

  • ZKH Group IPO: The Bull Case
  • Impressive Progress on Multiple Fronts to End the Year
  • CF Industries Holdings Inc.: Initiation of Coverage – Business Strategy & Key Drivers
  • Our Oil Price Analysis // FED is Willing to Break the Market
  • DaVita Inc.: Initiation of Coverage – Strong Value Proposition & Key Drivers
  • AmerisourceBergen Corporation: Initiation of Coverage – Acquisition of PharmaLex & Key Drivers
  • Parker-Hannifin Corporation: Initiation of Coverage – The Meggitt Synergies & Other Drivers
  • SPPP: Betting Big On Platinum And Palladium
  • The Aftermath: What Happened to USDC?
  • FMC Corporation: Initiation of Coverage – Business Strategy & Key Drivers

ZKH Group IPO: The Bull Case

By Arun George

  • ZKH Group (ZKH US), a leading MRO (maintenance, repair, and operations) procurement service platform in China, is pre-marketing an NYSE IPO to raise US$200-300 million.
  • The ZKH platform is for enterprise customers and the GBB platform is for micro businesses. Key backers include Tencent (700 HK) and Tiger Global.
  • The key elements of the bull case rest on large addressable markets, solid customer loyalty, improving gross margin, lower operating losses and a strong balance sheet.

Impressive Progress on Multiple Fronts to End the Year

By Water Tower Research

  • WWR provided an investor update for 4Q22 and FY22 results, which included a full-year net loss of $11.1 million, compared with a $16.1 million loss in 2021, driven by lower product development costs, partially offset by higher general and administrative costs, as the company continues to add to its team.
  • For the year, WWR spent $52.8 million in capex on Phase I of its Kellyton, AL graphite plant and has $75 million in cash remaining on its balance sheet as of the end of 2022, with no debt.
  • Agreement with Tier I battery OEM. WWR has entered into an agreement with a Tier I EV battery manufacturer that can result in a finalized offtake agreement for potentially all graphite anode material from the plant.

CF Industries Holdings Inc.: Initiation of Coverage – Business Strategy & Key Drivers

By Baptista Research

  • This is our first report on one of the largest producers of nitrogen products in the world – CF Industries.
  • CF’s overall performance was fairly good against the backdrop of a continually tight global supply-demand balance for nitrogen.
  • We initiate coverage on the stock of CF Industries with an ‘Outperform’ rating.

Our Oil Price Analysis // FED is Willing to Break the Market

By The Commodity Report

  • According to S&P Global, the renewable output by the grid operator MISO averaged 333,012 GWh in Q4.
  • Despite Bonneville Power Administration’s (BPA) renewable output slipping 12% in Q4, it remained the footprint with the most renewable market share at 75.6% of its total fuel mix for Q4.
  • The latest ACP data shows that the total installed solar capacity in the US grew by 17% year on year, reaching 74.126 GW in Q4.

DaVita Inc.: Initiation of Coverage – Strong Value Proposition & Key Drivers

By Baptista Research

  • This is our first report on major healthcare provider, DaVita.
  • DaVita produced an adjusted operating income of $317 million and adjusted profits per share from continuing operations of $1.11 for the fourth quarter, bringing the entire year squarely at the top of the revised target range it provided last quarter.
  • During the previous quarter, the international adjusted operating income fell by $15 million.

AmerisourceBergen Corporation: Initiation of Coverage – Acquisition of PharmaLex & Key Drivers

By Baptista Research

  • This is our first report on major pharmaceutical sourcing and distribution services provider, AmerisourceBergen.
  • Among major updates, AmerisourceBergen added PharmaLex to its portfolio of specialty solutions to expand its capabilities.
  • In this report, we have carried out a fundamental analysis of the historical financial statements of the company.

Parker-Hannifin Corporation: Initiation of Coverage – The Meggitt Synergies & Other Drivers

By Baptista Research

  • This is our first report on Parker-Hannifin Corporation, a global leader in motion and control technologies.
  • Parker-Hannifin delivered strong operating performance throughout the second quarter of the current fiscal and delivered an all-around beat.
  • We initiate coverage on the stock of Parker-Hannifin Corporation with a ‘Hold’ rating.

SPPP: Betting Big On Platinum And Palladium

By Pearl Gray Equity and Research

  • Sprott Physical Platinum & Palladium Trust has a nearly equally-weighted portfolio of physical Platinum and Palladium.
  • The closed-ended trust has an expense ratio of only 0.5% and is trading below its short and long-term moving averages.
  • Platinum Group Metal (“PGM”) prices offer researchers an exciting topic, given the velocity of the recent shift in supply and demand-side variables that influence PGM prices.

The Aftermath: What Happened to USDC?

By Kaiko

  • In the hours following Sillicon Valley Bank’s collapse, news emerged that Circle, issuer of the USDC stablecoin, held $3.3bn of reserves in SVB, triggering panic that the stablecoin was no longer fully backed.
  • As of Sunday night, we know that Circle’s reserves are safe, but over the weekend both centralized and decentralized markets descended into chaos.
  • Today, we’ll walk you through what exactly happened.

FMC Corporation: Initiation of Coverage – Business Strategy & Key Drivers

By Baptista Research

  • This is our first report on FMC Corporation, a major agricultural sciences company in the U.S.
  • FMC achieved significant results in the quarter because of high volume growth and aggressive pricing and it managed to deliver an all-around beat.
  • Its new product sales are growing quickly, nearly doubling year over year, accounting for 11% of overall sales in the quarter.

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Mar 14
0

Daily Brief Japan: Japan Post Bank, SBI Sumishin Net Bank, Fuji Oil Holdings, Tokyo Stock Exchange Tokyo Price Index Topix, MonotaRO Co Ltd, Trial Holdings and more

By | Daily Briefs, Japan

In today’s briefing:

  • Japan Post Bank (7182 JP): Offering Price Decided; Buyback & Passive Flow Coming Up
  • Japan Post Bank (7182 JP): JPY1,131 Offer Price; Updated Playbook
  • SBI Sumishin Net Bank IPO – It Was All Good, till Friday
  • Fuji Oil: Probably The Last Chance For Itochu to Scoop Up Fuji Oil at a Bargain
  • What’s Solution for TSE Growth Market, Where IPOs Became the Goal and Lost Growth Due to Burnout?
  • Monotaro (3064) | Pricing in Downside Risks
  • Trial Holdings Pre-IPO – The Positives – Steady past Performance with an Expanding Footprint

Japan Post Bank (7182 JP): Offering Price Decided; Buyback & Passive Flow Coming Up

By Brian Freitas

  • Japan Post Bank (7182 JP) has announced that the offering price has been set at JPY 1131/share, a 2.08% discount to the closing price. Settlement is on 20 March.
  • The buyback will run from 22 March to 12 May and at last prices will mop up 1.85% of shares outstanding or 4.62% of post-offering float.
  • In the short-term, we expect buying from Topix (TPX INDEX), MSCI and other global trackers to support the stock price. 

Japan Post Bank (7182 JP): JPY1,131 Offer Price; Updated Playbook

By Arun George

  • Japan Post Bank (7182 JP) priced its offer at JPY1,131, a discount of 2.1% to the last close. JPB’s on-market buyback period runs from 22 March to 12 May.
  • Japan Post Holdings (6178 JP)/ JPH’s 2021 offering suggests that the share price will have support to trade above the offer price at delivery date and the on-market buyback period.
  • The offer price’s forward P/B of 0.45x and yield of 4.42% are attractive vs peers. JPB’s price ratio at the offer price is undemanding vs TOPIX Banks ETF and JPH.

SBI Sumishin Net Bank IPO – It Was All Good, till Friday

By Sumeet Singh

  • SBI Sumishin Net Bank (7163 JP) (SSNB) is looking to raise around US$390m in its second listing attempt.
  • SBI Sumishin Net Bank is a Japanese digital bank set up as a 50-50 joint venture between Sumitomo Mitsui Trust Bank, Japan’s largest trust bank, and SBI Group.
  • In this note, we talk about implied valuations in the IPO price range

Fuji Oil: Probably The Last Chance For Itochu to Scoop Up Fuji Oil at a Bargain

By Oshadhi Kumarasiri

  • Having conducted several acquisitions and reinvested most of the operating cashflows into building its overseas business base, Fuji Oil Holdings (2607 JP) seems ready to unleash its earnings potential.
  • There could be more than a 100% upside to Fuji Oil shares if ROE returns to the historical median of 9% in the next few years.
  • Therefore, if Itochu Corp (8001 JP) has plans to takeover Fuji-Oil, the current price and the position in the business-cycle present the best opportunity to buy-out Fuji-Oil at a bargain.

What’s Solution for TSE Growth Market, Where IPOs Became the Goal and Lost Growth Due to Burnout?

By Aki Matsumoto

  • Few companies have generally achieved significant growth since listing, and about half of the companies are below their market capitalization at the IPO, which is challenges in TSE Growth Market.
  • Even if the number of companies subject to such shares is limited, the use of multiple voting shares shouldn’t be ruled out if the dilution of voting rights hinders fundraising.
  • The key to solving the challenges of TSE Growth Market, where few companies have growth potential and have financing needs, is the ability of management to realize growth potential post-listing.

Monotaro (3064) | Pricing in Downside Risks

By Mark Chadwick

  • We reassess our long-term financial model for Monotaro following 2 consecutive months of weak monthly data
  • Just two months into the new fiscal year, but YTD sales growth of 13% is far short of the full year target
  • Our DCF valuation highlights further 21% downside assuming 10y CAGR of 10.5%

Trial Holdings Pre-IPO – The Positives – Steady past Performance with an Expanding Footprint

By Sumeet Singh

  • Trial Holdings (5882 JP)‘s is looking to raise around US$375m in its Japan IPO.
  • TH operates a network of retail stores that offer one-stop shopping under its everyday low price model, across a variety of daily necessities, food items and other products.
  • In this note, we will talk about the positive aspects of the deal.

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Mar 14
0

Daily Brief Equity Bottom-Up: China Internet Weekly (13Mar2023): ZTO and more

By | Daily Briefs, Equity Bottom-Up

In today’s briefing:

  • China Internet Weekly (13Mar2023): ZTO, Meituan, Alibaba, Trip.com, Dada, JD.com
  • Meituan: Scaling Back Ride-Hailing Business to Maintain Margins
  • JD Logistics (2618 HK): 4Q22, Outside Customer Revenue Continued Surging, Buy
  • Fuji Oil: Probably The Last Chance For Itochu to Scoop Up Fuji Oil at a Bargain
  • Shenzhen Mindray Bio-Medical Electronics (300760.CH) – Shareholders’ Stock Selling and the Outlook
  • Monotaro (3064) | Pricing in Downside Risks
  • Ricegrowers Limited (SunRice) – H1 FY23 Highlights Relative Freight Opportunity
  • REIT Watch – Hospitality S-REITs’ DPU rebound 32% in 2022
  • Lutronic Corp (085370 KS): Record-High Performance in 2022; Litigation May Limit Upside Potential
  • Impressive Progress on Multiple Fronts to End the Year

China Internet Weekly (13Mar2023): ZTO, Meituan, Alibaba, Trip.com, Dada, JD.com

By Ming Lu

  • Grizzly Research LLC publishes a short selling report on ZTO.
  • Meituan plans to shift car hailing from direct operation to a platform for third-party operators.
  • Dada, which was acquired by JD.com last year, posts good 4Q22 results.

Meituan: Scaling Back Ride-Hailing Business to Maintain Margins

By Shifara Samsudeen, ACMA, CGMA

  • Several news media outlets reported last week that Meituan (3690 HK) is restructuring its ride-hailing services business to cut down costs as top line growth is slowing down.
  • Meituan launched ride-hailing services as a stand-alone app in 2017, it was merged into Meituan Super App in 2019. Relaunched as a stand-alone app in 2021 following Didi’s app removal.
  • Meituan has increased its headcount to compete with Douyin while has started hiring riders to launch services in Hong Kong which would likely to further drag down margins.

JD Logistics (2618 HK): 4Q22, Outside Customer Revenue Continued Surging, Buy

By Ming Lu

  • Total revenue increased by 41% YoY and revenue from external customers increased by 69% YoY in 4Q22.
  • We believe total revenue will grow by 26% in 2023 and 17% in 2024.
  • We also believe the stock has an upside of 58% and a price target of HK$20.

Fuji Oil: Probably The Last Chance For Itochu to Scoop Up Fuji Oil at a Bargain

By Oshadhi Kumarasiri

  • Having conducted several acquisitions and reinvested most of the operating cashflows into building its overseas business base, Fuji Oil Holdings (2607 JP) seems ready to unleash its earnings potential.
  • There could be more than a 100% upside to Fuji Oil shares if ROE returns to the historical median of 9% in the next few years.
  • Therefore, if Itochu Corp (8001 JP) has plans to takeover Fuji-Oil, the current price and the position in the business-cycle present the best opportunity to buy-out Fuji-Oil at a bargain.

Shenzhen Mindray Bio-Medical Electronics (300760.CH) – Shareholders’ Stock Selling and the Outlook

By Xinyao (Criss) Wang

  • Several original shareholders reduced their holdings of Mindray, which indicates that the senior executives and major shareholders aren’t optimistic about Mindray’s outlook, putting the Company’s long-term growth under scrutiny.
  • Mindray’s performance in overseas markets could be under pressure, which is an uncertain factor to drag down this year’s performance growth. Supply chain issue would hinder Mindray’s breakthrough in high-end fields.
  • Performance slowdown could continue if without breakthroughs in new growth points or internationalization. Our forecast on 2023 growth is about 15%-18%. Mindray’s valuation may fall back to 30-35 PE TTM.

Monotaro (3064) | Pricing in Downside Risks

By Mark Chadwick

  • We reassess our long-term financial model for Monotaro following 2 consecutive months of weak monthly data
  • Just two months into the new fiscal year, but YTD sales growth of 13% is far short of the full year target
  • Our DCF valuation highlights further 21% downside assuming 10y CAGR of 10.5%

Ricegrowers Limited (SunRice) – H1 FY23 Highlights Relative Freight Opportunity

By Research as a Service (RaaS)

  • We have compiled a summary of the results and outlook statements for our assessed peers of Ricegrowers Limited, trading as SunRice (ASX:SGLLV), with a particular focus on trading conditions, product pricing, freight costs, outlook statements and consensus earnings changes.
  • The overwhelming summary of trading conditions over CY22 was ‘challenging’ outside of Treasury Wine Estates (ASX:TWE) and Ridley Corporation (ASX:RIC).
  • The overwhelming outlook commentary assumes normalising weather conditions, price increases recouping cost inflation, lower freight costs, improved labour availability and higher earnings. 

REIT Watch – Hospitality S-REITs’ DPU rebound 32% in 2022

By Geoff Howie

  • Of the 30 S-REITs which have declared full year 2022 distributions, median change in distribution per unit (DPU) increased marginally by 0.2 per cent year-on-year (y-o-y).
  • The five trusts with the highest y-o-y DPU increments for FY22 are: ARA US Hospitality Trust (760 per cent), Paragon REIT (34 per cent), CDL Hospitality Trusts (32 per cent), CapitaLand Ascott Trust (31 per cent) and Far East Hospitality Trust (24 per cent).
  • CDL Hospitality Trusts (CDLHT) declared a DPS of 5.63 Singapore cents for FY22, up 31.9 per cent y-o-y.

Lutronic Corp (085370 KS): Record-High Performance in 2022; Litigation May Limit Upside Potential

By Tina Banerjee

  • Lutronic Corp (085370 KS) recorded its highest ever revenue and operating profit in 2022, driven by strong performance of overseas business, which contributed 88% of revenue and grew 62% YoY.
  • Overall, business has recovered with the reopening of the dermatology clinics and resumption of elective procedures globally. In addition to product sales, sales of consumables and services are steadily increasing.
  • Despite stellar performance in 2022, ongoing lawsuit against U.S.-based competitor remains an overhang on Lutronic’s overseas growth aspirations, especially in the U.S.

Impressive Progress on Multiple Fronts to End the Year

By Water Tower Research

  • WWR provided an investor update for 4Q22 and FY22 results, which included a full-year net loss of $11.1 million, compared with a $16.1 million loss in 2021, driven by lower product development costs, partially offset by higher general and administrative costs, as the company continues to add to its team.
  • For the year, WWR spent $52.8 million in capex on Phase I of its Kellyton, AL graphite plant and has $75 million in cash remaining on its balance sheet as of the end of 2022, with no debt.
  • Agreement with Tier I battery OEM. WWR has entered into an agreement with a Tier I EV battery manufacturer that can result in a finalized offtake agreement for potentially all graphite anode material from the plant.

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Mar 14
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Daily Brief ESG: What’s Solution for TSE Growth Market and more

By | Daily Briefs, ESG

In today’s briefing:

  • What’s Solution for TSE Growth Market, Where IPOs Became the Goal and Lost Growth Due to Burnout?

What’s Solution for TSE Growth Market, Where IPOs Became the Goal and Lost Growth Due to Burnout?

By Aki Matsumoto

  • Few companies have generally achieved significant growth since listing, and about half of the companies are below their market capitalization at the IPO, which is challenges in TSE Growth Market.
  • Even if the number of companies subject to such shares is limited, the use of multiple voting shares shouldn’t be ruled out if the dilution of voting rights hinders fundraising.
  • The key to solving the challenges of TSE Growth Market, where few companies have growth potential and have financing needs, is the ability of management to realize growth potential post-listing.

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Mar 14
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Daily Brief Credit: Morning Views Asia: Adani Transmission and more

By | Credit, Daily Briefs

In today’s briefing:

  • Morning Views Asia: Adani Transmission, Country Garden Holdings Co

Morning Views Asia: Adani Transmission, Country Garden Holdings Co

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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