Smartkarma Daily Briefs

The second tranche of the FFW methodology change for the Tokyo Stock Exchange Tokyo Price Index Topix (TPX INDEX) will be implemented at the close of trading today.
One way flow is ~JPY 745bn and will be spread across ~2170 stocks. The largest inflow will be on NTT (9432 JP) and the largest outflow on Toyota Motor (7203).
The stocks with the largest inflows have outperformed the stocks with the largest outflows over the last month and the outperformance could continue going into the last tranche in June.

MSCI May 2022 Index Rebalance: Flows at the Close Today & Performance So Far

For Asia Pacific, there are 48 adds/76 deletes for the Standard Indices and 166 adds/147 deletes for the Small Cap Index that will be implemented at the close today.
The adds have outperformed the deletes on average over the last few weeks/months. A long adds/short deletes trade performed better for Small Caps as compared to the Standard index.
There are a lot of stocks that will have same-way flow from other index trackers over the next few weeks and there could be a higher impact on these names.

Tsingtao Placement – Ending the Selldowns with the Biggest One so Far

By Sumeet Singh

Fosun aims to raise around US$527m via selling a 3.5% stake in Tsingtao.
This is not the first selldown by Fosun, we have covered three prior deals in Dec 2020, Apr 2021 and Dec 2021.
In this note, we will talk about the deal dynamics and run the deal through our ECM framework.

AGL Drops Demerger Proposal – Back To Square Two

By Travis Lundy

After 14 months of Strategic Review and preparation for a Demerger of its generation and distribution businesses, the Board has dropped the Demerger Proposal in face of shareholder opposition.
While it isn’t clear exactly how much opposition there was, Michael Cannon-Brookes held 11+% and General Meetings have garnered 50-75% of investors for a vote which needed 75% approval.
CEO and Chair have announced their resignations, two other board members will leave, and now the Board will start another strategic review using preparation at hand.

CCASS: Why Large Moves Continue To Matter

By David Blennerhassett

In this latest installment in a series dating back to March 2018, I’ve analysed 5,500 moves over three years inside CCASS, targeting >5% of shares outstanding of individual stocks.
The data continues to bear out the overall underperformance of stocks that exhibit such moves.
Additionally, the movement of large blocks of shares may illustrate that the beneficial owner of those shares has pledged them as collateral for a loan.

Before it’s here, it’s on Smartkarma

May 31

Macro: Kissinger’s Warning that Ukraine Must Give Russia Territory – A Key Inflection Point for KOSPI? and more

By Smartkarma Daily Briefs | Daily Briefs, Macro

In today’s briefing:

Kissinger’s Warning that Ukraine Must Give Russia Territory – A Key Inflection Point for KOSPI?
Yuan Devaluation (CNY): China At A Turning Point?
The Week That Was in ASEAN@Smartkarma – Avian Paint, Grab’s Surprise, and Heineken for Tourists
Asian Monetary Policy: Hawkish Moves To Continue, Albeit In A Graduated Manner
Increased US-China Contestation: Near-Term Risks Likely Contained

Kissinger’s Warning that Ukraine Must Give Russia Territory – A Key Inflection Point for KOSPI?

By Douglas Kim

Henry Kissinger’s statement that Ukraine must give Russia some territory could be a crucial inflection point in the global markets.
Most of the market rebound in KOSPI in the past 100 days have occurred in the past one week.
The rally in global equity markets in the past week seems to suggest some higher probability that the war in Ukraine could be ended in the next several months.

Yuan Devaluation (CNY): China At A Turning Point?

By Michael J. Howell

Chinese economy skidding badly, buffeted by C-19 lockdowns and strong US dollar. Domestic economic weakness alongside strong dollar are two critical facts.
US dollar has been weaponized and pointed towards the Chinese Yuan. Growing pressure on Yuan to devalue
US policy is to drive Fed balance sheet lower and US dollar higher, forcing credit funders back to the US unit

The Week That Was in ASEAN@Smartkarma – Avian Paint, Grab’s Surprise, and Heineken for Tourists

By Angus Mackintosh

The Week That Was in ASEAN@Smartkarma is filled with an eclectic mix of differentiated, substantive, and actionable insights, macro and equity bottom-up, from across South East Asia.
The past week saw insights on PT Avia Avian (AVIA IJ), Mitra Adiperkasa (MAPI IJ), Grab (GRAB US), Heineken Malaysia Bhd (HEIM MK) and a lot more besides.
There were also sector pieces on Asian Tourism, Thai Banks, and Indonesian Banks plus our usual value-added commentary on the past week’s developments in South-East Asia.

Asian Monetary Policy: Hawkish Moves To Continue, Albeit In A Graduated Manner

By Nicholas Chia

There remains a pronounced preference to support growth and look past the supply-side factors driving inflation across Asian central banks.
But, it is unlikely that Asian central banks can withstand the wave of monetary tightening elsewhere in the world.
Expect a faster pace of monetary tightening across the region.

Increased US-China Contestation: Near-Term Risks Likely Contained

By Manu Bhaskaran

The US and China are trying to be better-positioned for more purposeful talks than the unproductive exchanges that have been held thus far between Beijing and the Biden Administration.
BUT For the longer term, however, there is little doubt that the contestation between the two big powers over the Indo-Pacific region has hardened.
Political risks will grow but there could be silver linings in terms of production relocation from China to Southeast Asia.

Before it’s here, it’s on Smartkarma

May 30

Japan: NTT (Nippon Telegraph & Telephone), Japan Airport Terminal Co, Life Corp, Takashimaya, Tokyo Stock Exchange Tokyo Price Index Topix, Shiseido Company and more

By Smartkarma Daily Briefs | Daily Briefs, Japan

In today’s briefing:

TOPIX Rebalance: Flows at the Close
Japan Airport (9706): Not the Best Proxy for Japan Reopening.
Life Opens Supermarket 4.0: A Hybrid Online-Offline Store
Takashimaya to Close Tachikawa
About an Article on ESG Investors
Shiseido (4911 JP) | Q2 Results Will Make Analysts Blush

TOPIX Rebalance: Flows at the Close

The second tranche of the FFW methodology change for the Tokyo Stock Exchange Tokyo Price Index Topix (TPX INDEX) will be implemented at the close of trading today.
One way flow is ~JPY 745bn and will be spread across ~2170 stocks. The largest inflow will be on NTT (9432 JP) and the largest outflow on Toyota Motor (7203).
The stocks with the largest inflows have outperformed the stocks with the largest outflows over the last month and the outperformance could continue going into the last tranche in June.

Japan Airport (9706): Not the Best Proxy for Japan Reopening.

By Henry Soediarko

Japan’s reopening has started and pre-departure and on arrival tests for vaccinated tourists have also been abolished.
The beneficiary of this theme is less obvious for Japan Airport Terminal Co (9706 JP) while it is very obvious for Keisei Electric Railway Co (9009 JP) .
Japan Airport is trading at a PBR premium to Keisei while the former has a higher debt than the latter.

Life Opens Supermarket 4.0: A Hybrid Online-Offline Store

Life opened a new, upscale supermarket last month in central Tokyo that is designed to process online orders as easily as serving in-store customers.
The new store, replacing Mitsukoshi in Ebisu Garden Place, includes a backroom that acts as a dark store for online orders.
This frees up space in the store for higher margin items like deli foods and is a sign of the supermarket’s intentions going forward.

Takashimaya to Close Tachikawa

Takashimaya will close its store in Tachikawa early next year.
This can be seen as a further sign of an improving outlook for a smaller department store sector.
More closures will rid the sector of excess capacity and solidify positioning as a genuinely upscale format for the affluent.

About an Article on ESG Investors

By Aki Matsumoto

I will discuss the Nikkei article, “Shareholder proposals on ESG issues may increase in Japan, but the road to their passage will not be easy and should be watched closely.”
Japanese asset management companies have begun to move toward ESG compliance. However, a survey conducted by FSA indicated that many asset management companies don’t have personnel specializing in ESG issues.
The key to getting shareholder proposals on ESG passed or for a company to become more active in ESG initiatives is for foreign shareholder ratio to be in 30% range.

Shiseido (4911 JP) | Q2 Results Will Make Analysts Blush

By Mark Chadwick

Chinese lockdowns are taking their toll on Q2 sales. We expect the upcoming report to be much worse than the last
Estee Lauder’s recent results suggest that travel retail will be a negative shock too
We believe there is one large downgrade to full-year guidance and consensus numbers. Too early turn bullish

Before it’s here, it’s on Smartkarma

May 30

India: Adani Enterprises, IOL Chemicals And Pharmaceuticals Ltd, City Union Bank, Colgate Palmolive (India), Container Corp of India, Hindalco Industries, Hitachi Home & Life Solutions India Ltd, Muthoot Finance, Page Industries, Praj Industries and more

By Smartkarma Daily Briefs | Daily Briefs, India

In today’s briefing:

NIFTY Indices: Quiddity Leaderboard for September 2022
J B Chemicals and Pharmaceuticals – Strong Growth in Contract Manufacturing Bus
City Union Bank – Credit Growth +ve; Lower Treasury Gains to Cap ROE
Colgate-Palmolive (India) – Margin Surprises but Growth Disappoints
Container Corporation of India – No Clarity yet on Land Licence Fees; Higher Ca
Hindalco Industries Ltd – Prudent Capex Amidst Macro Risks; Retain BUY with Lower TP
Johnson Controls-Hitachi Air Conditioning India – Margin Pressure Offsets Topline Growth
Muthoot Finance – Competition Impact Visible
Page Industries – Strong Set of Numbers; Long-Term Growth Visible
Praj Industries Ltd – Growth Engines Fired, Aided by Strong Execution

NIFTY Indices: Quiddity Leaderboard for September 2022

By Janaghan Jeyakumar, CFA

The NIFTY Index Family has a series of broad equity indices that represents large, mid and small market capitalisation segments of the Indian public equity market.
The review of broad market indices will be done on a semi-annual basis and the changes will be implemented at the end of March and September every year.
Below is a look at the names leading the race to become Adds and Deletes for NIFTY 50, NIFTY 100, and NIFTY 500 in September 2022.

J B Chemicals and Pharmaceuticals – Strong Growth in Contract Manufacturing Bus

JB Chem reported revenue at Rs6,246mn, up 18.2% YoY and 4% QoQ. EBITDA stood at Rs1,249mn, up .8% YoY but down 2.5% QoQ.
EBITDA margin stood at 20%, down 344bps YoY and 133bps QoQ. PAT stood at Rs849mn, down 15.7% YoY but up 1.2% QoQ.
Domestic Formulations sales at Rs2,870mn grew by 29.9% YoY and 3.2% QoQ.

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.

City Union Bank – Credit Growth +ve; Lower Treasury Gains to Cap ROE

Guiding for low-to-mid double digit credit growth: Overall loan book increased by 11.6% YoY and 7.1% QoQ.

Recoveries remain strong; repayment trends improving: Absolute GNPA declined by Rs0.65bn (down 3.3% QoQ) to Rs19.3bn.

NIM stable QoQ; weak treasury outlook to impact profit: NII growth for 4QFY22 was 16.8% YoY and 2.2% QoQ.

Colgate-Palmolive (India) – Margin Surprises but Growth Disappoints

4QFY22 headline performance: CLGT’s 4QFY22 revenue (including other operating income) grew by 1.4% YoY to Rs13bn (vs est. Rs13.6bn).

FY22 performance: Sales, EBITDA and APAT grew by 5.3%, 3.7% and 4.1% YoY, respectively.

Other highlights: (1) India is identified as the key emerging market to contribute to the overall growth of the parent, so the focus on growth will remain.

Container Corporation of India – No Clarity yet on Land Licence Fees; Higher Ca

(1) The company has paid LLF of Rs4.65bn in FY22 against expectation of Rs4.50bn (as stated by management).

(2) Export volume grew marginally by 0.5% QoQ in 4QFY22 due to container shortage amid the Russia- Ukraine crisis and higher freight costs.

(3) The land policy is still under discussion with the government.

Hindalco Industries Ltd – Prudent Capex Amidst Macro Risks; Retain BUY with Lower TP

Novelis (Results reported on 11th May): EBITDA/tonne declined to $437/tonne (Q3FY22 at $544 and Q4FY21 at $514/tonne).
Aluminium India: EBITDA stood at a record high at Rs 4,050 Cr, up 123% YoY and 20% QoQ and stood ahead of our estimate by 5% led by higher realised prices, higher sales volume (Q4FY22: 336kt, Q3FY22 at 325kt and Q4FY21 at 329kt and higher VAP sales (Q4FY22: 93kt, Q3FY22 at 86kt and Q4FY21 at 92kt).
Copper India: EBITDA stood at Rs 387 Cr up 20% YoY and flat QoQ due to operational efficiencies and improved by-product realizations.

Johnson Controls-Hitachi Air Conditioning India – Margin Pressure Offsets Topline Growth

Strong performance expected in 1QFY23: JCH-IN has grown by 60.4% over the 4QFY20 base.

Expect margins to improve going forward: EBITDA margin contracted by 770bps YoY to 5.7% in 4QFY22 mainly due to commodity cost pressures (raw material costs were up 40.7% YoY).

Capital employed increased: Capital employed for Cooling Products rose to Rs5.53bn in 4QFY22 from Rs4.39bn in 4QFY21.

Muthoot Finance – Competition Impact Visible

Volume growth slows; guiding for 12-15% growth in FY23: Overall gold loan AUM increased by 10.8% YoY and 6.1% QoQ.

While we note the growth in absolute value, underlying trends indicate this was driven by a higher ticket size and increasing customer leverage while customer growth indicators weakened, possibly due to heightened competition from smaller NBFCs and banks.

Total stock of gold holding (in tonnes) increased to 187, up 9.4% YoY and 5.1% QoQ.

Page Industries – Strong Set of Numbers; Long-Term Growth Visible

Healthy demand outlook: Demand for consumer discretionary remains intact for PAGE even though it is tepid for others – due to value for money products with reasonable prices to hold on to consumers.

Margins: The management undertook price hikes by ~8% during Dec ’21 in response to input cost increases, the effect of which can be attributed to this quarter.

Distribution reach expansion: PAGE will continue to maintain the pace of outlet expansion both across EBOs and MBOs and is looking to reach ~1,50,000 MBO outlets in the next couple of years and double the EBO count from 1,000 EBOs in the next 4 years.

Praj Industries Ltd – Growth Engines Fired, Aided by Strong Execution

Strong Demand for Domestic Grain: During Q4FY22,66% of the new orderbook was for Grain-based capacity(starchy feedstock), indicating momentum in Grain-based distilleries.
Key Business Updates: India has achieved the highest-ever Ethanol blend of ~10% in 2022.
Strong Execution: The company is witnessing more growth in Grain-based distilleries which has reduced the seasonality of the business which was predominantly based on the sugar cycle.

Before it’s here, it’s on Smartkarma

May 30

Financials: Bank Mandiri Persero, Korea Stock Exchange Kospi 200 Index, Tokyo Stock Exchange Tokyo Price Index Topix, City Union Bank, Ethereum, Muthoot Finance and more

By Smartkarma Daily Briefs | Daily Briefs, Financials

In today’s briefing:

Indonesian Banks Screener; Bank Mandiri Is Our Top Pick
Asia Faces Short Lived Push Above Key Trendline Barriers
About an Article on ESG Investors
City Union Bank – Credit Growth +ve; Lower Treasury Gains to Cap ROE
Options Trading With Hegic
Muthoot Finance – Competition Impact Visible

Indonesian Banks Screener; Bank Mandiri Is Our Top Pick

By Victor Galliano

The six Indonesian banks have strong capital adequacy ratios, healthy credit quality and good NPL coverage; also, GDP recovery supports positive cost of risk trends and the bank earnings outlook
We believe that Bank Mandiri screens best, with its attractive pre-provision profitability and steadily improving cost of risk, whilst trading on undemanding multiples versus peers; we also like Bank Rakyat
We see Bank Permata as a potential “turn around” stock, especially if management can improve credit quality, and keep lowering its cost of risk to boost returns

Asia Faces Short Lived Push Above Key Trendline Barriers

By Thomas Schroeder

Our May 20th insight outlined risk of a dip and pressure to challenge key barriers in Japan, Korea, Taiwan and the HSI. ST push and fade later this week.
The SPX push through 4,100 added rally fuel. Added long in Euro banks and the CAC (bull wedge breakouts.
Korea the favored market for a ST short squeeze, then re set short with NKY next in line. Taiwan short near 16,700. HK tech index bear triangle/HK bearish.

About an Article on ESG Investors

By Aki Matsumoto

I will discuss the Nikkei article, “Shareholder proposals on ESG issues may increase in Japan, but the road to their passage will not be easy and should be watched closely.”
Japanese asset management companies have begun to move toward ESG compliance. However, a survey conducted by FSA indicated that many asset management companies don’t have personnel specializing in ESG issues.
The key to getting shareholder proposals on ESG passed or for a company to become more active in ESG initiatives is for foreign shareholder ratio to be in 30% range.

City Union Bank – Credit Growth +ve; Lower Treasury Gains to Cap ROE

Guiding for low-to-mid double digit credit growth: Overall loan book increased by 11.6% YoY and 7.1% QoQ.

Recoveries remain strong; repayment trends improving: Absolute GNPA declined by Rs0.65bn (down 3.3% QoQ) to Rs19.3bn.

NIM stable QoQ; weak treasury outlook to impact profit: NII growth for 4QFY22 was 16.8% YoY and 2.2% QoQ.

Options Trading With Hegic

By Etherbridge

Our journey into Decentralised Finance (DeFi) has so far covered several essential activities one can participate in, including exchanging with Uniswap, earning with Aave, yearn.finance and MakerDAO, staking with Lido and trading perpetual contracts with dYdX.
Our journey continues this week as we learn how to trade decentralised options contracts with Hegic.
What is Hegic? – Hegic is an onchain peer to peer options trading protocol built on Ethereum.

Muthoot Finance – Competition Impact Visible

Volume growth slows; guiding for 12-15% growth in FY23: Overall gold loan AUM increased by 10.8% YoY and 6.1% QoQ.

While we note the growth in absolute value, underlying trends indicate this was driven by a higher ticket size and increasing customer leverage while customer growth indicators weakened, possibly due to heightened competition from smaller NBFCs and banks.

Total stock of gold holding (in tonnes) increased to 187, up 9.4% YoY and 5.1% QoQ.

Before it’s here, it’s on Smartkarma

May 30

Health Care: Beijing Tongrentang Co A, Huadong Medicine Co Ltd A, Sequent Scientific and more

By Smartkarma Daily Briefs | Daily Briefs, Healthcare

In today’s briefing:

SSE180/SSE380 Index Rebalance: Potential MSCI/FTSE Adds & Deletes
Huadong Medicine Co Ltd (000963.CH) – A “Dark Horse” to Reverse Performance Dilemma
Sequent Scientific – Recovery in API Business; Gross Margin Remains Below FY21

SSE180/SSE380 Index Rebalance: Potential MSCI/FTSE Adds & Deletes

There are 18 changes to the SSE180 Index and 38 changes to the SSE380 Index that will be implemented at the close of trading on 9 June.
There will be 9 deletions from the MSCI Standard Index and 22 deletions from the FTSE All-World/All-Cap indices at the close on 9 June.
Currently, 16 stocks meet the threshold/are close for inclusion in the MSCI China Index while there are 38 stocks that meet the threshold for inclusion in the FTSE All-World/All-Cap indices.

Huadong Medicine Co Ltd (000963.CH) – A “Dark Horse” to Reverse Performance Dilemma

By Xinyao (Criss) Wang

The most recent two quarters have maintained positive growth. It is of great significance for Huadong, who once suffered a significant decline and now in a critical period of transformation.
The large growth potential of medical cosmetology and industrial microbiology would be important driver for future development. It’s also wise to strike a balance between current performance and future strategy.
Huadong’s revenue growth would be above 10% in next few years. It would have higher valuation than Imeik. Investors are advised to follow Huadong. It could be a “dark horse”.

Sequent Scientific – Recovery in API Business; Gross Margin Remains Below FY21

4QFY22 Earnings Highlights: SSL reported revenue of Rs3,837mn, up 6% YoY and 7.2% QoQ.

Formulations business reported sales at Rs2,563mn, up 2.3% YoY and 0.3% QoQ.

Europe formulations business reported sales at Rs1,034mn, down 7.1% YoY and 1.8% QoQ.

Before it’s here, it’s on Smartkarma

May 30

South Korea: F&F, Korea Stock Exchange Kospi 200 Index and more

By Smartkarma Daily Briefs | Daily Briefs, South Korea

In today’s briefing:

Korea Stub Trades: F&F Holdings Pair in a Substantial Diversion with F&F’s KOSPI 200 Inclusion
Asia Faces Short Lived Push Above Key Trendline Barriers

Korea Stub Trades: F&F Holdings Pair in a Substantial Diversion with F&F’s KOSPI 200 Inclusion

By Sanghyun Park

F&F Holdings is a single-subsidiary PURE STUB PLAY with no operating assets. It currently trades at a 54.30% discount to its NAV, and its 20-day MA sigma sits below -2.0.
The pair is currently in a substantial diversion. The passive inflow caused by F&F’s KOSPI 200 inclusion appears to have caused a flow imbalance.
F&F is becoming a primary target for KOSPI 200’s post-rebalancing shorting events. Then, we can consider using F&F Holdings as a long hedge, in addition to outright shorting for F&F.

Asia Faces Short Lived Push Above Key Trendline Barriers

By Thomas Schroeder

Our May 20th insight outlined risk of a dip and pressure to challenge key barriers in Japan, Korea, Taiwan and the HSI. ST push and fade later this week.
The SPX push through 4,100 added rally fuel. Added long in Euro banks and the CAC (bull wedge breakouts.
Korea the favored market for a ST short squeeze, then re set short with NKY next in line. Taiwan short near 16,700. HK tech index bear triangle/HK bearish.

Before it’s here, it’s on Smartkarma

May 30

Consumer: F&F, Life Corp, Takashimaya, Shiseido Company, V-Mart Retail, Bata India Ltd, Walmart, Colgate Palmolive (India), Hitachi Home & Life Solutions India Ltd, Page Industries and more

By Smartkarma Daily Briefs | Consumer, Daily Briefs

In today’s briefing:

Korea Stub Trades: F&F Holdings Pair in a Substantial Diversion with F&F’s KOSPI 200 Inclusion
Life Opens Supermarket 4.0: A Hybrid Online-Offline Store
Takashimaya to Close Tachikawa
Shiseido (4911 JP) | Q2 Results Will Make Analysts Blush
V-Mart Retail – Macro Challenges Cut Footfall and SSSG
Bata India – FY25 Revenue Goal Implies Significant Acceleration
Target Vs. Walmart: Which One Is Better Buy?
Colgate-Palmolive (India) – Margin Surprises but Growth Disappoints
Johnson Controls-Hitachi Air Conditioning India – Margin Pressure Offsets Topline Growth
Page Industries – Strong Set of Numbers; Long-Term Growth Visible

Korea Stub Trades: F&F Holdings Pair in a Substantial Diversion with F&F’s KOSPI 200 Inclusion

By Sanghyun Park

F&F Holdings is a single-subsidiary PURE STUB PLAY with no operating assets. It currently trades at a 54.30% discount to its NAV, and its 20-day MA sigma sits below -2.0.
The pair is currently in a substantial diversion. The passive inflow caused by F&F’s KOSPI 200 inclusion appears to have caused a flow imbalance.
F&F is becoming a primary target for KOSPI 200’s post-rebalancing shorting events. Then, we can consider using F&F Holdings as a long hedge, in addition to outright shorting for F&F.

Life Opens Supermarket 4.0: A Hybrid Online-Offline Store

Life opened a new, upscale supermarket last month in central Tokyo that is designed to process online orders as easily as serving in-store customers.
The new store, replacing Mitsukoshi in Ebisu Garden Place, includes a backroom that acts as a dark store for online orders.
This frees up space in the store for higher margin items like deli foods and is a sign of the supermarket’s intentions going forward.

Takashimaya to Close Tachikawa

Takashimaya will close its store in Tachikawa early next year.
This can be seen as a further sign of an improving outlook for a smaller department store sector.
More closures will rid the sector of excess capacity and solidify positioning as a genuinely upscale format for the affluent.

Shiseido (4911 JP) | Q2 Results Will Make Analysts Blush

By Mark Chadwick

Chinese lockdowns are taking their toll on Q2 sales. We expect the upcoming report to be much worse than the last
Estee Lauder’s recent results suggest that travel retail will be a negative shock too
We believe there is one large downgrade to full-year guidance and consensus numbers. Too early turn bullish

V-Mart Retail – Macro Challenges Cut Footfall and SSSG

Competition to impact footfalls: With major conglomerates penetrating into organized retail territory, footfalls are expected to get impacted in the near term.

Why we like V-Mart Retail: VRL is among the few pure play value apparel retailers that are catering to Tier- 2/Tier-3/Tier-4 cities of India.

We see a huge runway for growth as it is currently concentrated only in the states of Uttar Pradesh and Bihar.

Bata India – FY25 Revenue Goal Implies Significant Acceleration

4QFY22 performance: Gross margin, EBITDA and PAT outperformed our estimates significantly though revenue came in short due to higher-than-expected impact of Omicron in the initial part of the quarter (see table below)

Sales were up 7% over 4QFY20 and could have been 11-12% had it not been for the third covid wave in January 2022. The EBTIDA margin surprise could have been a lot larger had the lost sales come through.

Bata being recognized as a sneaker destination: BIL’s sneaker portfolio continues to outperform all other products.

Target Vs. Walmart: Which One Is Better Buy?

By Cappuccino Finance

In the past couple of weeks, big box retail stocks got hammered. The largest retailer Walmart missed EPS expectations by a large margin
The results certainly caught investors and analysts by surprise, and it seemed like their management was surprised too
Some item sales (grills, plants, and pool chemicals) were impacted by weather, and high inflation was causing consumers to buy cheaper goods

Colgate-Palmolive (India) – Margin Surprises but Growth Disappoints

4QFY22 headline performance: CLGT’s 4QFY22 revenue (including other operating income) grew by 1.4% YoY to Rs13bn (vs est. Rs13.6bn).

FY22 performance: Sales, EBITDA and APAT grew by 5.3%, 3.7% and 4.1% YoY, respectively.

Other highlights: (1) India is identified as the key emerging market to contribute to the overall growth of the parent, so the focus on growth will remain.

Johnson Controls-Hitachi Air Conditioning India – Margin Pressure Offsets Topline Growth

Strong performance expected in 1QFY23: JCH-IN has grown by 60.4% over the 4QFY20 base.

Expect margins to improve going forward: EBITDA margin contracted by 770bps YoY to 5.7% in 4QFY22 mainly due to commodity cost pressures (raw material costs were up 40.7% YoY).

Capital employed increased: Capital employed for Cooling Products rose to Rs5.53bn in 4QFY22 from Rs4.39bn in 4QFY21.

Page Industries – Strong Set of Numbers; Long-Term Growth Visible

Healthy demand outlook: Demand for consumer discretionary remains intact for PAGE even though it is tepid for others – due to value for money products with reasonable prices to hold on to consumers.

Margins: The management undertook price hikes by ~8% during Dec ’21 in response to input cost increases, the effect of which can be attributed to this quarter.

Distribution reach expansion: PAGE will continue to maintain the pace of outlet expansion both across EBOs and MBOs and is looking to reach ~1,50,000 MBO outlets in the next couple of years and double the EBO count from 1,000 EBOs in the next 4 years.

Before it’s here, it’s on Smartkarma

May 30

United States: Splunk Inc, Redbox Entertainment, Ethereum, Walmart and more

By Smartkarma Daily Briefs | Daily Briefs, United States

In today’s briefing:

1QFY23 Revenue Growth Accelerated As Cloud-Driven Transformation Goes Well
Could This Be the Meme Stock of 2022?
Options Trading With Hegic
Target Vs. Walmart: Which One Is Better Buy?

1QFY23 Revenue Growth Accelerated As Cloud-Driven Transformation Goes Well

By Andrei Zakharov

Splunk Inc (SPLK US) , a leading American provider of machine-generated data platform and established software vendor, announced strong 1QFY23 earnings results.
Total revenues grew to $674M, up 34% YoY, the highest revenue growth rate for the last 3 years. Cloud revenues jumped by 66%, reflecting customer adoption of the cloud platform.
WSJ reported that Cisco made a $20B+ takeover offer for Splunk. However, no deal was on the table, but if talks resume, Cisco could pay $20B+, according to The NYT.

Could This Be the Meme Stock of 2022?

By subSPAC

Markets rejoiced this week after a string of weak economic data, which left many to consider if the economy was strong enough to handle further monetary policy tightening.
This, combined with the upcoming midterms, has left many to forecast that the Federal Reserve could pivot away from its tough stance and hit the pause on rate hikes.
With markets bouncing back from the lows of the month, meme stocks surged, and trading activity also saw a pickup.

Options Trading With Hegic

By Etherbridge

Our journey into Decentralised Finance (DeFi) has so far covered several essential activities one can participate in, including exchanging with Uniswap, earning with Aave, yearn.finance and MakerDAO, staking with Lido and trading perpetual contracts with dYdX.
Our journey continues this week as we learn how to trade decentralised options contracts with Hegic.
What is Hegic? – Hegic is an onchain peer to peer options trading protocol built on Ethereum.

Target Vs. Walmart: Which One Is Better Buy?

By Cappuccino Finance

In the past couple of weeks, big box retail stocks got hammered. The largest retailer Walmart missed EPS expectations by a large margin
The results certainly caught investors and analysts by surprise, and it seemed like their management was surprised too
Some item sales (grills, plants, and pool chemicals) were impacted by weather, and high inflation was causing consumers to buy cheaper goods

Before it’s here, it’s on Smartkarma

May 30

Indonesia: Link Net, PT Avia Avian, Bank Mandiri Persero and more

By Smartkarma Daily Briefs | Daily Briefs, Indonesia

In today’s briefing:

Merger Arb Mondays (30 May) – Yancoal, Link Net, Link Admin, Alliance Aviation, True Corp, DTAC
PT Avia Avian (AVIA IJ) – Painting Indonesia From Top to Bottom
Indonesian Banks Screener; Bank Mandiri Is Our Top Pick

Merger Arb Mondays (30 May) – Yancoal, Link Net, Link Admin, Alliance Aviation, True Corp, DTAC

By Arun George

We summarise the latest spreads and newsflow of merger arb situations covered by us across Hong Kong, Australia, New Zealand, Singapore, Indonesia, Thailand and Chinese ADRs.
This week, the highest gross spreads are Sezzle Inc (SZL AU), 21Vianet Group (VNET US), Link Administration Holdings (LNK AU), Alliance Aviation Services (AQZ AU), True Corp Pcl (TRUE TB).
Lowest gross spreads are Yancoal Australia (3668 HK), Hwa Hong Corp (HWAH SP), AKM Industrial (1639 HK), Virtus Health (VRT AU), Irongate Group (IAP AU), Uniti Group Ltd (UWL AU).

PT Avia Avian (AVIA IJ) – Painting Indonesia From Top to Bottom

By Angus Mackintosh

PT Avia Avian (AVIA IJ) is the leading decorative paint and coatings player in Indonesia listing last December and trading 20% below its IPO price but with an institutional following.
1Q2022 results were weaker due to a high base last year but has seen a strong pick-up since. It has raised prices twice to offset higher raw material prices.
PT Avia Avian is an interesting proxy for the recovery in the domestic economy together with the property market plus M&A could be a further catalyst this year.

Indonesian Banks Screener; Bank Mandiri Is Our Top Pick

By Victor Galliano

The six Indonesian banks have strong capital adequacy ratios, healthy credit quality and good NPL coverage; also, GDP recovery supports positive cost of risk trends and the bank earnings outlook
We believe that Bank Mandiri screens best, with its attractive pre-provision profitability and steadily improving cost of risk, whilst trading on undemanding multiples versus peers; we also like Bank Rakyat
We see Bank Permata as a potential “turn around” stock, especially if management can improve credit quality, and keep lowering its cost of risk to boost returns

Before it’s here, it’s on Smartkarma