In today’s briefing:
- Sumber Alfaria Trijaya (AMRT IJ) – Lawson Taking Up the Reins of Convenience
- Freshworks: Insiders Keep Buying Shares. Path To Sustainable FCF Positive Business Looks Clear
- Green Lawson: More Eco and Avatars
- An Update to the Long-Short Pair Trade on Hyundai Motor & Tesla
- Merck Puts Eye-Popping $9.3B in ADC Deal with Kelun – The “New Story” Is About to Begin
- Taiwan Tech Weekly: Samsung Will Keep Expanding Capacity, China Chip Restrictions Tighten Further
- Royal Caribbean Cruises Ltd.: Initiation of Coverage – Business Recovery & Key Developments
- McKesson Corporation: Initiation of Coverage – Business Strategy & Recent Developments
- The Mosaic Company: Initiation of Coverage – Business Strategy & Other Drivers
- What Will Crypto SPACs Look Like in 2023?
Sumber Alfaria Trijaya (AMRT IJ) – Lawson Taking Up the Reins of Convenience
- Sumber Alfaria Trijaya through its Alfamart and Alfamidi formats is one of the largest mini-market operators in Indonesia but is now expanding aggressively into the convenience store space through Lawson.
- The company should have a strong finish to the year with an additional 1,200-1,300 new stores being added over the period plus margins improving as Alfamart adds new services.
- Sumber Alfaria Trijaya is a core proxy to the winning mini-market format in Indonesia plus it is looking to replicate its success in the Philippines in Collaboration with SM Investments.
Freshworks: Insiders Keep Buying Shares. Path To Sustainable FCF Positive Business Looks Clear
- Freshworks (FRSH US) shares underperformed in 2022, with shares down ~47% YTD versus a 33% loss on the Nasdaq Composite. US software stocks lost ~51% on average over the year.
- Insiders keep buying shares. VC firm Accel, a 5%+ shareholder, acquired ~$50 million worth of Freshworks (FRSH US) shares in 2H22. Strong insider buying indicates the stock could hit bottom.
- We estimate Freshworks (FRSH US) crossed the $500M ARR mark in 3QCY22. The company may report strong 4QCY22 results and surprise investors and analysts.
Green Lawson: More Eco and Avatars
- Lawson introduced a new store format in Tokyo last month called Green Lawson, touting new ways to save energy and reduce waste.
- The new store also features an early version of a retail advertising system that emulates Familymart Vision.
- The latest updates emphasise the continued investment by the big three convenience stores to remain relevant and improve sales efficiency while also countering the labour shortage.
An Update to the Long-Short Pair Trade on Hyundai Motor & Tesla
- In this insight, we provide an update to our long-short pair trade of Hyundai Motor (long) and Tesla Motors (short), which we presented back in June 2022.
- Since 9 June 2022, Hyundai Motor’s share price is down 13.4% and Tesla’s share price is down 48.6% in the same period, resulting in net gains of 35.2%.
- We discuss five major factors impacting Tesla’s share price this year including market share losses, Musk’s acquisition of Twitter, valuation multiples decline, China operations, and global recessionary fears in 2023.
Merck Puts Eye-Popping $9.3B in ADC Deal with Kelun – The “New Story” Is About to Begin
- Merck entered into an agreement with Kelun to develop seven new ADC candidates. Merck will pay an upfront payment of US$175 million, with milestone payments worth up to US$9.3 billion.
- It’s a strong signal that Merck gives up acquiring Seagen and fully embraces Kelun. Merck may not just simply recognize Kelun’s ADC candidates but is optimistic about its ADC platform/technology.
- Chinese pharmaceutical enterprises are becoming more pragmatic and peaceful in licensing cooperation, which has more trend significance for the development of industry than the value of a product or an enterprise.
Taiwan Tech Weekly: Samsung Will Keep Expanding Capacity, China Chip Restrictions Tighten Further
- While most of the semi industry is reducing capex due to market weakness — Samsung says it will still expand capacity next year.
- China chip restrictions get more severe — Now Arm is not selling its most advanced chip architectures to Chinese firms.
- TSMC in advanced talks to set up its first European production capacity in Germany.
Royal Caribbean Cruises Ltd.: Initiation of Coverage – Business Recovery & Key Developments
- This is our first report on Royal Caribbean Cruises, a well-known player operating three cruise vacation brands, including Royal Caribbean International, Celebrity Cruises and Silversea Cruises.
- Royal Caribbean Cruises has seen strong demand, fighting off inflation, and continues to focus on its value proposition of providing the best-quality vacations in the world.
- We initiate coverage on the stock of Royal Caribbean Cruises with a ‘Hold’ rating.
McKesson Corporation: Initiation of Coverage – Business Strategy & Recent Developments
- This is our first report on leading U.S. healthcare distributor, McKesson.
- The company delivered a mixed quarterly result with revenues of $70.2 billion falling short of the Wall Street consensus.
- McKesson is also extending its services to additional channels like the government, consumer, and direct-to-home sectors in response to the requirements of the patients.
The Mosaic Company: Initiation of Coverage – Business Strategy & Other Drivers
- This is our first report on the Mosaic Company, one of the largest producers and marketers of concentrated phosphate and potash crop nutrients.
- The company delivered a disappointing set of results in the last quarter failing to meet Wall Street expectations in terms of revenues as well as earnings.
- The good news is that it did generate a sizable amount of cash flow, which enables the company to return a large amount of capital to shareholders while simultaneously continuing to invest in future growth.
What Will Crypto SPACs Look Like in 2023?
- If 2021 was the year when crypto SPACs became mainstream, 2022 was the year of what could have been.
- This week, Peter Theil-backed crypto exchange Bullish finally called it quits on its $9 billion merger with Far Peak Acquisition Corp, nearly seventeen months after announcing the transaction in July 2021.
- Bullish isn’t the only though; several large Crypto SPAC transactions, like Circle, Roxe, and eToro, have all been called off their mega-mergers this year due to regulatory hell.
💡 Before it’s here, it’s on Smartkarma
Sign Up for Free
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
