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Smartkarma Daily Briefs

Jun 14
0

Equity Bottom-Up: MINISO Group Holdings, Kiatnakin Bank, Yaskawa Electric and more

By | Daily Briefs, Equity Bottom-Up

In today’s briefing:

  • Miniso: Genuinely Undervalued & A Decent Long Hedge to Increase Short Exposure to Chinese E-Commerce
  • KKP – Small Enough To Grow
  • Yaskawa (6506) | Further 20% Downside on Higher Rate Cycle

Miniso: Genuinely Undervalued & A Decent Long Hedge to Increase Short Exposure to Chinese E-Commerce

By Oshadhi Kumarasiri

  • After hitting the bottom during the COVID crisis, the only direction left for MINISO Group Holdings (MNSO US) to move is up.
  • Given the current valuations, Miniso could generate multi-bagger returns during favourable market conditions.
  • In addition, Miniso could help investors generate sizable returns in the short-term on the short side with increased short exposure to Chinese E-commerce.

KKP – Small Enough To Grow

By Daniel Tabbush

  • This smaller Thai bank can more easily grow due to relatively small loan base
  • Strong core fundamentals of rising interest income and falling funding costs
  • Credit costs remain inflated, falling figures can support strong ROA growth

Yaskawa (6506) | Further 20% Downside on Higher Rate Cycle

By Mark Chadwick

  • Stay short ahead of Q1 results. Full year guidance remains too high and will likely be cut later this year
  • Yaskawa remains a cyclical stock that correlates with the SOX index – higher interest rates are impacting valuation multiples
  • We see 20% downside risk towards 3x price to book

Related tickers: Kiatnakin Bank (KKP.BK), Yaskawa Electric (6506.T)

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Jun 13
0

South Korea: LG Energy Solution, SK Telecom and more

By | Daily Briefs, South Korea

In today’s briefing:

  • LG Energy Solution: End of 6 Months Lock-Up Period & Valuation Sensitivity Analysis
  • KOSPI200 Lockup Release Events: LG Energy Solution, HYBE, Lotte Chilsung, & Krafton
  • SK Telecom & KT LONG/SHORT Swing Trading for Mean Reversion

LG Energy Solution: End of 6 Months Lock-Up Period & Valuation Sensitivity Analysis

By Douglas Kim

  • Our base case valuation LG Energy Solution is implied market cap of 75 trillion won or target price of 319,089 won, representing 25% below current share price.
  • Currently, LGES is trading at a premium valuation multiple on a EV/EBITDA (2023E) versus CATL. We believe LGES should trade at a discount to CATL in the next 6-12 months. 
  • LGES’s 6 months lock-up ends on 27 July and there are 4.3% of outstanding shares that can be sold which is likely to put negative pressure on share price.

KOSPI200 Lockup Release Events: LG Energy Solution, HYBE, Lotte Chilsung, & Krafton

By Sanghyun Park

  • HYBE and LG Energy have overhang risks. 2% of SO for HYBE and 3% for LG Energy will potentially hit the market. These are 4.46x and 19.89x ADTVs, respectively.
  • LG Energy is awaiting FTSE inclusion (June 17) and Solactive ETF inclusion (end-October). Still, from a timing perspective, these passive inflows are unlikely to offset the July 27 lockup release.
  • Their short interest is 1.63% (HYBE) and 0.46% (LG Energy), respectively. So, we need to consider a position buildup when their short interest shows significant upside movements.

SK Telecom & KT LONG/SHORT Swing Trading for Mean Reversion

By Sanghyun Park

  • Price decoupling relative to KT started after SKT’s foreign room trend began to reverse on May 23. The monthly price yield difference between these two is over 7%p.
  • From a short-term perspective, it seems that SKT seems to have entered somewhat oversold territory due to the FTSE outflow event.
  • Additional selling by the FTSE event this week will likely provide a suitable entry timing for a LONG/SHORT pair setup with KT on a swing-term window for mean reversion.

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Jun 13
0

India: La Opala Rg Ltd, Siemens Ltd, V-Guard Industries Ltd and more

By | Daily Briefs, India

In today’s briefing:

  • La Opala RG – Positive Demand Outlook; Bright Prospects for Borosilicate
  • Siemens – Robust Topline Growth
  • V-Guard Industries – Expects ECD Segment Margin to Improve Gradually

La Opala RG – Positive Demand Outlook; Bright Prospects for Borosilicate

By Nirmal Bang

  • Strong underlying demand, shift towards premium range and rising salience of e- commerce:

    4QFY22 revenue was well above pre-covid level and similar momentum has continued in 1QFY23, led by growth across channels

  • LOG has an edge in Borosilicate despite being a late entrant: Borosilicate capacity is expected to be commissioned in 2HFY24 and should start contributing to revenue meaningfully from FY25 (peak revenue potential of Rs1.25bn).
  • Revamping distribution strategy: Appointment of dedicated persons to lead the channels has led to improvement overall total distribution reach (19,000 outlets compared to 14,000 a couple of years ago) as well as its quality.

Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Siemens – Robust Topline Growth

By HDFC Securities

  • Q2FY22 highlights: Revenue: INR 36.3bn (+8.2%/+12% YoY/QoQ, 8.3% miss) driven largely by the digital industries (DI), energy (SE), mobility (MO) and smart infra (SI).
  • All segments other than mobility recorded sequential growth with SE/ SI/DI/portfolio companies/others recording sequential growth of 9.8%/21%/- 10%/11%/18%80% respectively.
  • EBITDA: INR 4.5bn (+0.9%/+34.2% YoY/QoQ, 0.6% miss). EBITDA margin: 12.3%(-88/+203bps YoY/QoQ) vs. estimate of 11.3%.

Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

V-Guard Industries – Expects ECD Segment Margin to Improve Gradually

By Nirmal Bang

  • The management highlighted that VIL has a strong brand equity, vast established distribution and good brand recall in South India.
  • VIL also uses South markets for incubating new categories.
  • It highlighted that it is working on expanding distribution and improving brand awareness in the Non-South region
  •  

Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

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Jun 13
0

Japan: Toyo Construction, Asahi Intecc, KOMEDA Holdings Co Ltd, MonotaRO Co Ltd, Torikizoku and more

By | Daily Briefs, Japan

In today’s briefing:

  • Toyo Construction – YFO Standstill Against TC Hostility
  • Asahi Intecc (7747 JP): Recovery From COVID-19 to Drive Double-Digit Revenue Growth in Near-Term
  • Komeda Holdings (3543): Solid Wholesale Sales in May; Accelerating Overseas Expansion
  • MonotaRO (3064): Positive Impression on May Sales
  • Torikizoku Holdings (3193): Izakaya Earnings No Longer Tricky but Predictable

Toyo Construction – YFO Standstill Against TC Hostility

By Travis Lundy

  • Three weeks ago, Yamauchi No 10 Family Office (YFO) announced its intentions to launch a Tender Offer by end-June. Toyo Construction (1890 JP) got upset and called YFO names.
  • TC announced a Poison Pill, they talked, TC accused YFO in the AGM Convocation of “extreme dishonesty.” They have since met again, and finally signed a long standstill agreement. 
  • But the Poison Pill will be put to shareholders (ISS recommends against), and shareholders have to decide from the public documents whether they believe Toyo Construction. 

Asahi Intecc (7747 JP): Recovery From COVID-19 to Drive Double-Digit Revenue Growth in Near-Term

By Tina Banerjee

  • Asahi Intecc (7747 JP) reported 27% y/y revenue growth during first nine months of FY22. For full-year FY22 and FY23, the company expects 22% and 11% revenue growth, respectively.
  • The company targets a consolidated revenue of more than ¥100 billion in FY26 through continued growth in the existing business and introduction of new business.
  • Asahi Intecc enjoys dominant market share in PTCA guide wires in major global markets. The company’s direct distribution strategy is further expanding its market share.

Komeda Holdings (3543): Solid Wholesale Sales in May; Accelerating Overseas Expansion

By Mita Securities

  • Wholesale sales to franchisees (same-store basis) in May were 109.0% vs. May 2021 (103.7% for April), 146.1% vs. May 2020 (195.1% for April), and 104.3% vs. May 2019 (103.6% for April)
  • The number of stores at the end of May was 966 (flat MoM). Komeda opened one new store in Japan.
  • Menu prices were raised on April 1 for company-owned stores and on April 28 for franchise stores. Wholesale price hikes are scheduled in 2H.

MonotaRO (3064): Positive Impression on May Sales

By Mita Securities

  • Parent company sales in May were 16.401bn yen (+20.9% YoY), above the company’s monthly target
  • The number of business days was 19, one day more than in May 2021. The sales growth rate per business day was +14.5% YoY (+23.4% for April)
  • The negative impact of the Shanghai lockdown appears to be limited so far.

Torikizoku Holdings (3193): Izakaya Earnings No Longer Tricky but Predictable

By Mita Securities

  • Sales were 13.260bn yen (-6.9% YoY), OP was -2.583bn yen (vs. -2.588bn yen in 1-3Q FY7/21), and RP was 1.817bn yen (vs. -2.027bn yen in 1-3Q FY7/21)
  • RP includes subsidy income of 4.404bn yen (vs. 389m yen in 1-3Q FY7/21). Same-store sales growth for company-owned stores was -6.6% YoY.
  • On April 28, the company raised the price of all dishes from 327 yen (298 yen without tax) to 350 yen (319 yen without tax) at all Torikizoku stores

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Jun 13
0

TMT: LG Energy Solution, Link Administration, V.S. Industry and more

By | Daily Briefs, TMT/Internet

In today’s briefing:

  • LG Energy Solution: End of 6 Months Lock-Up Period & Valuation Sensitivity Analysis
  • Merger Arb Mondays (13 Jun) – China VAST, True/DTAC, Hwa Hong, Link Admin, Ramsay Health, Link Net
  • V.S. Industry (VSID.KL) – Foreign Labour Arriving In Stages

LG Energy Solution: End of 6 Months Lock-Up Period & Valuation Sensitivity Analysis

By Douglas Kim

  • Our base case valuation LG Energy Solution is implied market cap of 75 trillion won or target price of 319,089 won, representing 25% below current share price.
  • Currently, LGES is trading at a premium valuation multiple on a EV/EBITDA (2023E) versus CATL. We believe LGES should trade at a discount to CATL in the next 6-12 months. 
  • LGES’s 6 months lock-up ends on 27 July and there are 4.3% of outstanding shares that can be sold which is likely to put negative pressure on share price.

Merger Arb Mondays (13 Jun) – China VAST, True/DTAC, Hwa Hong, Link Admin, Ramsay Health, Link Net

By Arun George

V.S. Industry (VSID.KL) – Foreign Labour Arriving In Stages

By Maybank Research

  • Maintain HOLD; Labour and raw mat issues remain
  • Addt’l 3k workers to arrive in the coming months
  • One-off levy and recruitment costs could drag 4Q NP
  • Costs impact within expectations

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Jun 13
0

Consumer: LG Energy Solution, KOMEDA Holdings Co Ltd, La Opala Rg Ltd, Torikizoku and more

By | Consumer, Daily Briefs

In today’s briefing:

  • KOSPI200 Lockup Release Events: LG Energy Solution, HYBE, Lotte Chilsung, & Krafton
  • Komeda Holdings (3543): Solid Wholesale Sales in May; Accelerating Overseas Expansion
  • La Opala RG – Positive Demand Outlook; Bright Prospects for Borosilicate
  • Torikizoku Holdings (3193): Izakaya Earnings No Longer Tricky but Predictable

KOSPI200 Lockup Release Events: LG Energy Solution, HYBE, Lotte Chilsung, & Krafton

By Sanghyun Park

  • HYBE and LG Energy have overhang risks. 2% of SO for HYBE and 3% for LG Energy will potentially hit the market. These are 4.46x and 19.89x ADTVs, respectively.
  • LG Energy is awaiting FTSE inclusion (June 17) and Solactive ETF inclusion (end-October). Still, from a timing perspective, these passive inflows are unlikely to offset the July 27 lockup release.
  • Their short interest is 1.63% (HYBE) and 0.46% (LG Energy), respectively. So, we need to consider a position buildup when their short interest shows significant upside movements.

Komeda Holdings (3543): Solid Wholesale Sales in May; Accelerating Overseas Expansion

By Mita Securities

  • Wholesale sales to franchisees (same-store basis) in May were 109.0% vs. May 2021 (103.7% for April), 146.1% vs. May 2020 (195.1% for April), and 104.3% vs. May 2019 (103.6% for April)
  • The number of stores at the end of May was 966 (flat MoM). Komeda opened one new store in Japan.
  • Menu prices were raised on April 1 for company-owned stores and on April 28 for franchise stores. Wholesale price hikes are scheduled in 2H.

La Opala RG – Positive Demand Outlook; Bright Prospects for Borosilicate

By Nirmal Bang

  • Strong underlying demand, shift towards premium range and rising salience of e- commerce:

    4QFY22 revenue was well above pre-covid level and similar momentum has continued in 1QFY23, led by growth across channels

  • LOG has an edge in Borosilicate despite being a late entrant: Borosilicate capacity is expected to be commissioned in 2HFY24 and should start contributing to revenue meaningfully from FY25 (peak revenue potential of Rs1.25bn).
  • Revamping distribution strategy: Appointment of dedicated persons to lead the channels has led to improvement overall total distribution reach (19,000 outlets compared to 14,000 a couple of years ago) as well as its quality.

Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Torikizoku Holdings (3193): Izakaya Earnings No Longer Tricky but Predictable

By Mita Securities

  • Sales were 13.260bn yen (-6.9% YoY), OP was -2.583bn yen (vs. -2.588bn yen in 1-3Q FY7/21), and RP was 1.817bn yen (vs. -2.027bn yen in 1-3Q FY7/21)
  • RP includes subsidy income of 4.404bn yen (vs. 389m yen in 1-3Q FY7/21). Same-store sales growth for company-owned stores was -6.6% YoY.
  • On April 28, the company raised the price of all dishes from 327 yen (298 yen without tax) to 350 yen (319 yen without tax) at all Torikizoku stores

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Jun 13
0

Event-Driven: Bumi Resources Minerals Tbk, Toyo Construction, PetroChina, LG Energy Solution, Link Administration, Ramsay Health Care, SK Telecom and more

By | Daily Briefs, Event-Driven

In today’s briefing:

  • MVIS Global Junior Gold Miners Index Rebalance: Big Flows & Impact
  • Toyo Construction – YFO Standstill Against TC Hostility
  • HSCEI Index Rebalance Preview: Four Sets of Changes from July to September
  • LG Energy Solution: End of 6 Months Lock-Up Period & Valuation Sensitivity Analysis
  • KOSPI200 Lockup Release Events: LG Energy Solution, HYBE, Lotte Chilsung, & Krafton
  • Merger Arb Mondays (13 Jun) – China VAST, True/DTAC, Hwa Hong, Link Admin, Ramsay Health, Link Net
  • Weekly Deals Digest (12 Jun): Thai Life, Link Admin, Ramsay, Link Net, China VAST, Suchuang Gas
  • SK Telecom & KT LONG/SHORT Swing Trading for Mean Reversion

MVIS Global Junior Gold Miners Index Rebalance: Big Flows & Impact

By Brian Freitas

Toyo Construction – YFO Standstill Against TC Hostility

By Travis Lundy

  • Three weeks ago, Yamauchi No 10 Family Office (YFO) announced its intentions to launch a Tender Offer by end-June. Toyo Construction (1890 JP) got upset and called YFO names.
  • TC announced a Poison Pill, they talked, TC accused YFO in the AGM Convocation of “extreme dishonesty.” They have since met again, and finally signed a long standstill agreement. 
  • But the Poison Pill will be put to shareholders (ISS recommends against), and shareholders have to decide from the public documents whether they believe Toyo Construction. 

HSCEI Index Rebalance Preview: Four Sets of Changes from July to September

By Brian Freitas

LG Energy Solution: End of 6 Months Lock-Up Period & Valuation Sensitivity Analysis

By Douglas Kim

  • Our base case valuation LG Energy Solution is implied market cap of 75 trillion won or target price of 319,089 won, representing 25% below current share price.
  • Currently, LGES is trading at a premium valuation multiple on a EV/EBITDA (2023E) versus CATL. We believe LGES should trade at a discount to CATL in the next 6-12 months. 
  • LGES’s 6 months lock-up ends on 27 July and there are 4.3% of outstanding shares that can be sold which is likely to put negative pressure on share price.

KOSPI200 Lockup Release Events: LG Energy Solution, HYBE, Lotte Chilsung, & Krafton

By Sanghyun Park

  • HYBE and LG Energy have overhang risks. 2% of SO for HYBE and 3% for LG Energy will potentially hit the market. These are 4.46x and 19.89x ADTVs, respectively.
  • LG Energy is awaiting FTSE inclusion (June 17) and Solactive ETF inclusion (end-October). Still, from a timing perspective, these passive inflows are unlikely to offset the July 27 lockup release.
  • Their short interest is 1.63% (HYBE) and 0.46% (LG Energy), respectively. So, we need to consider a position buildup when their short interest shows significant upside movements.

Merger Arb Mondays (13 Jun) – China VAST, True/DTAC, Hwa Hong, Link Admin, Ramsay Health, Link Net

By Arun George

Weekly Deals Digest (12 Jun): Thai Life, Link Admin, Ramsay, Link Net, China VAST, Suchuang Gas

By Arun George

SK Telecom & KT LONG/SHORT Swing Trading for Mean Reversion

By Sanghyun Park

  • Price decoupling relative to KT started after SKT’s foreign room trend began to reverse on May 23. The monthly price yield difference between these two is over 7%p.
  • From a short-term perspective, it seems that SKT seems to have entered somewhat oversold territory due to the FTSE outflow event.
  • Additional selling by the FTSE event this week will likely provide a suitable entry timing for a LONG/SHORT pair setup with KT on a swing-term window for mean reversion.

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Jun 13
0

China: PetroChina, Angelalign Technology, Lonking Holdings, Kwg Property Holding and more

By | China, Daily Briefs

In today’s briefing:

  • HSCEI Index Rebalance Preview: Four Sets of Changes from July to September
  • Angelalign Technology (6699.HK) – There Is Still Plenty of Downside, but Limited Upside Potential
  • Lonking (3339 HK): Not Out of the Woods Yet
  • Morning Views Asia: Kawasan Industri Jababeka, Jingrui Holdings, KWG Living Group

HSCEI Index Rebalance Preview: Four Sets of Changes from July to September

By Brian Freitas

Angelalign Technology (6699.HK) – There Is Still Plenty of Downside, but Limited Upside Potential

By Xinyao (Criss) Wang

  • Due to pandemic/lockdown/economic downturn, the case shipments could further decline. Our revenue forecast this year is below 20%, or even below 15%. We also lowered our forecast on profit margins.
  • Limited qualified orthodontists in China and challenging internationalization cast doubts on Angelalign’s long term growth prospects. We can’t see high growth potential of Angelalign with certainty.
  • Angelalign’s performance in 2022 would be under pressure. Although PE/TTM reached about 73 by the end of June 10 after corrections, it’s still overvalued. The upside potential could be limited.

Lonking (3339 HK): Not Out of the Woods Yet

By Osbert Tang, CFA

  • Share price of Lonking Holdings (3339 HK) has seen muted reaction to weak industry figures recently but it is still unexciting in near-term, based on our catch-up with the company. 
  • It has underperformed industry sales volume in 5M22 across all product categories, with that for wheel loader behind 4pp and excavator by 10pp. Forklift sales were down 18% YoY. 
  • Both gross margin and investment income are set to contract in this year, making it highly likely to see significant earnings downgrade after 1H22 result announcement in Aug. 

Morning Views Asia: Kawasan Industri Jababeka, Jingrui Holdings, KWG Living Group

By Charles Macgregor

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

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Jun 13
0

Indonesia: Bumi Resources Minerals Tbk and more

By | Daily Briefs, Indonesia

In today’s briefing:

  • MVIS Global Junior Gold Miners Index Rebalance: Big Flows & Impact

MVIS Global Junior Gold Miners Index Rebalance: Big Flows & Impact

By Brian Freitas

Before it’s here, it’s on Smartkarma

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Jun 13
0

Industrials: Toyo Construction, Lonking Holdings, MonotaRO Co Ltd, Siemens Ltd, V-Guard Industries Ltd and more

By | Daily Briefs, Industrials

In today’s briefing:

  • Toyo Construction – YFO Standstill Against TC Hostility
  • Lonking (3339 HK): Not Out of the Woods Yet
  • MonotaRO (3064): Positive Impression on May Sales
  • Siemens – Robust Topline Growth
  • V-Guard Industries – Expects ECD Segment Margin to Improve Gradually

Toyo Construction – YFO Standstill Against TC Hostility

By Travis Lundy

  • Three weeks ago, Yamauchi No 10 Family Office (YFO) announced its intentions to launch a Tender Offer by end-June. Toyo Construction (1890 JP) got upset and called YFO names.
  • TC announced a Poison Pill, they talked, TC accused YFO in the AGM Convocation of “extreme dishonesty.” They have since met again, and finally signed a long standstill agreement. 
  • But the Poison Pill will be put to shareholders (ISS recommends against), and shareholders have to decide from the public documents whether they believe Toyo Construction. 

Lonking (3339 HK): Not Out of the Woods Yet

By Osbert Tang, CFA

  • Share price of Lonking Holdings (3339 HK) has seen muted reaction to weak industry figures recently but it is still unexciting in near-term, based on our catch-up with the company. 
  • It has underperformed industry sales volume in 5M22 across all product categories, with that for wheel loader behind 4pp and excavator by 10pp. Forklift sales were down 18% YoY. 
  • Both gross margin and investment income are set to contract in this year, making it highly likely to see significant earnings downgrade after 1H22 result announcement in Aug. 

MonotaRO (3064): Positive Impression on May Sales

By Mita Securities

  • Parent company sales in May were 16.401bn yen (+20.9% YoY), above the company’s monthly target
  • The number of business days was 19, one day more than in May 2021. The sales growth rate per business day was +14.5% YoY (+23.4% for April)
  • The negative impact of the Shanghai lockdown appears to be limited so far.

Siemens – Robust Topline Growth

By HDFC Securities

  • Q2FY22 highlights: Revenue: INR 36.3bn (+8.2%/+12% YoY/QoQ, 8.3% miss) driven largely by the digital industries (DI), energy (SE), mobility (MO) and smart infra (SI).
  • All segments other than mobility recorded sequential growth with SE/ SI/DI/portfolio companies/others recording sequential growth of 9.8%/21%/- 10%/11%/18%80% respectively.
  • EBITDA: INR 4.5bn (+0.9%/+34.2% YoY/QoQ, 0.6% miss). EBITDA margin: 12.3%(-88/+203bps YoY/QoQ) vs. estimate of 11.3%.

Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

V-Guard Industries – Expects ECD Segment Margin to Improve Gradually

By Nirmal Bang

  • The management highlighted that VIL has a strong brand equity, vast established distribution and good brand recall in South India.
  • VIL also uses South markets for incubating new categories.
  • It highlighted that it is working on expanding distribution and improving brand awareness in the Non-South region
  •  

Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Before it’s here, it’s on Smartkarma

Learn More