Smartkarma Daily Briefs

BellRing Brands recently reported its earnings for the third quarter of the fiscal year 2024.
The company, which is known for its Premier Protein and Dymatize brands, showcased a mixture of strengths and areas poised for improvement.
BellRing Brands has demonstrated robust growth, showing a notable increase in net sales and adjusted EBITDA, indicative of effective operational management and solid demand for its products.

BFAM US: These Are The 4 Biggest Factors Impacting Its Performance In 2025 & Beyond!

Bright Horizons Family Solutions, a renowned provider of child care, early education, and work-life servcies, recently reported a robust performance for the second quarter of 2024 in their latest earnings call.
CEO, Stephen Kramer, highlighted substantial revenue growth in full service and back-up care segments and a nearly 40% increase in adjusted EPS, surpassing the company’s expectations due to improved operational efficiency across all three segments.
In light of these results, the company has raised its full-year guidance for both revenue and EPS.

The Boston Beer Company Inc.: An Analysis Of Their Competitive Positioning & Major Growth Drivers! – Financial Forecasts

Boston Beer Company’s second-quarter 2024 earnings reflected a mixed performance amid shifting market dynamics and consumer preferences.
The company, widely recognized for its innovative approach and diversified portfolio, reported a 4% decline in depletions and a 6.4% decrease in shipments compared to the previous year.
This was primarily attributed to declines in the Truly Hard Seltzers segment, which could not be wholly offset by growth in Twisted Tea and Sun Cruiser brands.

Axalta Coating Systems Ltd.: Expansion into New Markets & 4 Other Factors Driving Growth! – Financial Forecasts

Axalta Coating Systems recently disclosed its financial performance for the second quarter of 2024, showcasing record-breaking results in the face of challenging market conditions.
The company reported a 4% rise in net sales, reaching $1.35 billion, with a significant boost in volumes across all end markets.
Additionally, adjusted EBITDA increased notably by $64 million year-over-year to $291 million, reflecting a 400 basis-point improvement in margins to 21.5%.

Elanco Animal Health: Leveraging Portfolio Synergy & Market Access To Catalyze Growth! – Major Drivers

Elanco Animal Health Incorporated showed promising performance in its second quarter of 2024, demonstrating consistent operational results and strategic progress in various key areas.
With a fourth consecutive quarter of underlying revenue growth, the company has displayed resilience and growth in its core segments.
The adjusted EBITDA and adjusted EPS metrics surpassed the estimates by achieving higher figures than projected in previous guidance, indicating efficient operational and cost management.

DENTSPLY SIRONA Inc.: An Insight Into Dental Industry Trends & Transformation Initiatives! – Major Drivers

DENTSPLY SIRONA Inc., a major player in the dental solutions and technologies market, reported a mixed second quarter performance for the fiscal year 2024.
The company faced notable challenges, including a decline in revenue to $984 million, primarily impacted by lower sales in its Connected Technology Solutions (CTS) segment.
This was attributed to ongoing pressures in the capital equipment market, partially influenced by macroeconomic conditions, pricing degradation, and suboptimal performance in key markets.

Century Communities Inc.: Focus on Affordable Housing through Century Complete & Other Major Drivers

Century Communities reported a strong performance for the second quarter of 2024, showcasing significant improvements in key financial metrics and operational achievements that underline the company’s robust position in the homebuilding industry.
The company delivered 2,617 homes, marking a 17% increase year-over year and an 11% sequential increase.
Home sales revenues also saw a notable rise, reaching $1 billion, a 24% increase year-over-year and a 10% increase sequentially.

Bassett Furniture Industries, Inc. – 3QFY24 Adjusted EPS Of ($0.41) As Conditions Remain Tough

By Water Tower Research

BSET posted an adjusted EPS loss of ($0.41) for 3QFY24, down $0.11 from the prior year and $0.08 below our estimate of ($0.33).
While the quarter was affected by continued challenging industry conditions, including the weak housing market (housing is a traditional driver of residential furniture sales) and wary consumers (many of whom updated their homes during COVID), the earnings miss was also, in part, a consequence of a July hack of Bassett’s IT systems that forced the firm to sideline production for a week, costing the firm $1-2 million on the bottom line from lost sales and associated manufacturing inefficiencies.
We estimate that this production shutdown cost Bassett $0.085 to $0.17 in EPS.

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Oct 12

Daily Brief Indonesia: Vale Indonesia Tbk and more

By Smartkarma Daily Briefs | Daily Briefs, Indonesia

In today’s briefing:

Vale Indonesia: Potential Lull Before Big Transition For Pure Nickel Play

Vale Indonesia: Potential Lull Before Big Transition For Pure Nickel Play

By Graeme Cunningham

Pure nickel play PT Vale Indonesia, a leading global producer, could transform significantly over the next few years with plans to take stakes in projects more than doubling current output
However, we see risks of a lull into 2025 as production is near capacity, the nickel price could potentially remain pressured from major global oversupply and operating costs could rise
Given the weak consensus 2025E ROE of 5%, a 1.6x P/B is not particularly inexpensive, although for longer-term investors considering the expansion potential this could be an entry point

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Oct 12

Daily Brief India: Shui On Land, Hyundai Motor India , Mouri Tech Limited, Varindera Constructions Ltd and more

By Smartkarma Daily Briefs | Daily Briefs, India

In today’s briefing:

Weekly Wrap – 11 Oct 2024
Hyundai Motor India IPO: The Investment Case
Mouri Tech Pre-IPO Tearsheet
Varindera Constructions Pre-IPO Tearsheet

Weekly Wrap – 11 Oct 2024

By Felix Fischer

Lucror Analytics Weekly Wraps provide an overview of all Morning Views comments and reports published by our analyst team in the past week, and also showcase a list of the most-read reports.

In this Insight:

and more…

Hyundai Motor India IPO: The Investment Case

By Arun George

Hyundai Motor India (1342Z IN), a subsidiary of Hyundai Motor (005385 KS), aims to raise up to US$3.3 billion at a valuation of US$19 billion.
We previously discussed the IPO in Hyundai Motor India IPO: The Bull Case and Hyundai Motor India IPO: The Bear Case. In this note, we examine RHP.
The RHP shows that the positives (recovering lost market share, top-quartile operating and FCF margin profile) more than offset the negatives (bottom-quartile growth).

Mouri Tech Pre-IPO Tearsheet

By Rosita Fernandes

Mouri Tech Limited (MT IN) is planning to raise about US$179m through its upcoming IPO in India. The bookrunners for the deal are Nuvama Wealth, ICICI Securities, and JM Financial.
Mouri Tech Limited (MTL) is a global IT solutions provider focused on intelligent enterprise resource planning (iERP) and digital transformation services.
The company operates across four key areas: iERP, digital transformation, infrastructure services, and program management. MTL leverages advanced technologies.

Varindera Constructions Pre-IPO Tearsheet

By Akshat Shah

Varindera Constructions Ltd (1606813D IN) is looking to raise about US$143m in its upcoming India IPO. The deal will be run by ICICI, Equirus and IIFL.
Varindera Constructions Limited (VCL) is an integrated engineering, procurement and construction (EPC) company undertaking construction projects with a focus on building constructions.
According to the CRISIL Report, it was one of the fastest growing construction companies in terms of revenue from operations, compared to major listed construction companies, over FY19-24.

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Oct 12

Daily Brief China: Hang Seng Index, Shui On Land, Lenovo, 111 Inc and more

By Smartkarma Daily Briefs | China, Daily Briefs

In today’s briefing:

EQD | The HSI Rally: Go LONG Now or Wait?
Weekly Wrap – 11 Oct 2024
3Q24 PC Shipments Are Flat YoY. Lenovo, Acer, Asus. Compal, Quanta, Wistron.
Morning Views Asia: China Oil And Gas, Continuum Green Energy, China International Marine Containers A
111, Inc. – Continuing to Build Up a Robust and Nimble Warehousing & Distribution Network

EQD | The HSI Rally: Go LONG Now or Wait?

By Nico Rosti

In our previous insight about the Hang Seng Index‘s we theorized a probable continuation of the rally in October, after some resistance, but the index just shoot up straight.
Resistance appeared last week, from an area considered a tail by our SHORT model, so it was not possible to make a forecast from there.
The question now is: can the index re-start to rally from here? Or will it pull back more this coming week?

Weekly Wrap – 11 Oct 2024

By Felix Fischer

Lucror Analytics Weekly Wraps provide an overview of all Morning Views comments and reports published by our analyst team in the past week, and also showcase a list of the most-read reports.

In this Insight:

and more…

3Q24 PC Shipments Are Flat YoY. Lenovo, Acer, Asus. Compal, Quanta, Wistron.

By Nicolas Baratte

IDC reported 3Q24 PC shipments declining -2% YoY, Canalys an increase of +1%. Let’s call this flat. If 4Q24 is “average seasonal”, 2024 will reach ~265m, or the pre-Covid range.
No AI fever, no accelerated replacement cycle, for now. If it happens, it will take time, ie compelling AI apps that only run locally and need a new PC.
In Asia, PC vendors: Lenovo, Acer, Asus. Taiwan ODM: Compal, Quanta, Wistron. Semi with high exposure: Novatek, Realtek.

Morning Views Asia: China Oil And Gas, Continuum Green Energy, China International Marine Containers A

By Leonard Law, CFA

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.

China Oil And Gas
Continuum Green Energy
China International Marine Containers A
Shui On Land

111, Inc. – Continuing to Build Up a Robust and Nimble Warehousing & Distribution Network

By Water Tower Research

Two fulfillment centers added. In line with its goal to establish a national pharmaceutical logistics network (Kunpeng), 111 announced that it has added two new fulfillment centers.
This brings its network up from 11 to 13 centers across China. One of the new additions is in Guangzhou, Guangdong province in the South, with the other in Wuhan, in the central province of Hubei.
The two new centers expand the scale and capabilities of the company’s existing fulfillment operations in each of those populous regions.

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Oct 12

Daily Brief Japan: SAMTY HOLDINGS Co Ltd, Shift Inc, Hokuhoku Financial Group, Hisamitsu Pharmaceutical Co, TSE Tokyo Price Index TOPIX, EJ Holdings Inc, Shin Pro Maint, Usen-Next Holdings Co Ltd and more

By Smartkarma Daily Briefs | Daily Briefs, Japan

In today’s briefing:

Hillhouse To Buy Out Minorities In Samty Holdings (187A) – Small Premium, High Leverage, Hmmm
Shift Inc (3697 JP): Full-year FY08/24 flash update
Japanese Midcap Banks – Three Key Picks
Hisamitsu Pharmaceutical (4530 JP): H1FY25 Witness Strong Growth; FY25 Guidance Reiterated
Reducing Cross-Shareholdings Returns Companies to Basics of Sustained Growth in Shareholder Returns
EJ Holdings Inc (2153 JP): Q1 FY05/25 flash update
Shin Pro Maint (6086 JP): 1H FY02/25 flash update
Usen-Next Holdings Co Ltd (9418 JP): Full-year FY08/24 flash update

Hillhouse To Buy Out Minorities In Samty Holdings (187A) – Small Premium, High Leverage, Hmmm

Today, Hillhouse announced it would buy the 63% of SAMTY HOLDINGS Co Ltd (187A JP) not owned by Daiwa Securities Group (8601 JP) at an 18% premium.
It’s a highly-levered real estate company. Huge inventory. Decent margins on sale so embedded profit sitting in inventory. Not a very big premium, but an all-time high.
Retail including some large former insiders and passive own the vast bulk of the float here. The former get this done. Or not.

Shift Inc (3697 JP): Full-year FY08/24 flash update

In FY08/24, the company reported sales of JPY110.6bn (+25.7% YoY) and operating profit of JPY10.5bn (-8.9% YoY).
Software Testing Related Services segment sales reached JPY71.3bn (+22.4% YoY), with operating profit of JPY16.2bn (+11.4% YoY).
For FY08/25, the company forecasts sales of JPY130.0bn (+17.5% YoY) and operating profit of JPY13.5bn (+28.1% YoY).

Japanese Midcap Banks – Three Key Picks

By Victor Galliano

We analyse ten Japanese midcap banks to target beneficiaries of the realization of strategic shareholdings, as well as beneficiaries of the improving interest rate outlook
We add Hachijuni Bank and Hokuhoku Financial to the buy list, based on the potential for realization of strategic holdings; these share-holdings are large relative to their respective market capitalizations
We maintain Gunma Bank on the buy list, primarily for its very strong gearing into the rising interest cycle and its attractive PE multiples

Hisamitsu Pharmaceutical (4530 JP): H1FY25 Witness Strong Growth; FY25 Guidance Reiterated

By Tina Banerjee

Hisamitsu Pharmaceutical Co (4530 JP) has reported double-digit revenue growth in H1FY25, mainly driven by 17% YoY growth in OTC pharmaceutical product, Salonpas. Net profit grew 8%.
Rx business revenues grew 5% as Zicthoru, Apohide etc clocked healthy numbers, while Mohrus product line continues to decline. Since Q1FY24, Zicthoru’s quarterly revenue run-rate has been surpassing ¥1B.
Hisamitsu has reiterated its FY25 guidance of ¥152B revenue, operating profit of ¥14.5B, and net profit of ¥15.8B. With H1FY25 progress rate, the company is expected to beat the guidance.

Reducing Cross-Shareholdings Returns Companies to Basics of Sustained Growth in Shareholder Returns

By Aki Matsumoto

Business portfolio reforms are lagging and improving profitability, the driver of ROE, will take more time. Further Reducing policy shareholdings and cash on hand are needed to improve capital profitability.
In days of cross-shareholdings, management tended to be less conscious of the goal of sustainable growth in shareholder interests because they need not listen to opinions of other minority shareholders.
Cross-Shareholdings have decreased, and management is now required to be more conscious of capital profitability. ”TSE’s request” will hopefully prevent this change from going backwards.

EJ Holdings Inc (2153 JP): Q1 FY05/25 flash update

Revenue for Q1 FY05/25 was JPY3.1bn, a decrease of 3.9% YoY, with an operating loss of JPY1.1bn.
Orders received in Q1 FY05/25 totaled JPY9.0bn, an 8.4% YoY decrease, aligning with initial expectations.
Full-year earnings forecast remains unchanged due to stable production performance and order backlog, despite uncertain subsidiary impact.

Shin Pro Maint (6086 JP): 1H FY02/25 flash update

Revenue increased 15.0% YoY to JPY13.2bn, driven by strong performance in Emergency and Preventive Maintenance Services.
Operating profit rose 22.5% YoY to JPY921mn, with an operating profit margin increase of 0.4pp to 7.0%.
The company expanded market share by acquiring new customers and projects, focusing on air conditioning and ventilation systems.

Usen-Next Holdings Co Ltd (9418 JP): Full-year FY08/24 flash update

FY08/24 revenue was JPY326.7bn (+18.2% YoY), with operating profit at JPY29.1bn (+35.0% YoY), exceeding forecasts.
Subscriber growth and merger boosted FY08/24 revenue to JPY109.1bn (+31.1% YoY), operating profit rose 39.2% YoY.
FY08/25 forecast: revenue JPY360.0bn (+10.2% YoY), operating profit JPY31.0bn (+6.5% YoY), EBITDA JPY42.5bn (+7.5% YoY).

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Oct 12

Most Read: Seven & I Holdings, Shin Kong Financial Holding, Midea Group, Adani Ports & Special Economic Zone, Hyundai Motor India , Kokusai Electric , CELSYS, Korea Zinc, SAMTY HOLDINGS Co Ltd and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

7&I Results and Plans – The Good, The Bad, The Ugly, The Respectable, Unfortunate, and Encouraging
7-Eleven Corporation: A Clear Strategy for Long-Term Value, Founding Family Return to Super-Stores
Shin Kong and Taishin – There’s a Good Value Swap Trade To Do Here
HSCI Index Rebalance Preview: Midea Group (300 HK) To Be Added in December; Stock Connect Next Week
SENSEX Index Rebalance: And That’s a Googly
Hyundai Motor India: Index Entry Timing for India’s Biggest IPO
Quiddity Mar25 Nikkei 225 Rebal: Likely 2 IN, 2 OUT, Again; Minimal Surprise Factor
TOPIX Inclusions: Who Is Ready (Oct 2024)
Another Play to Consider: Spread Trading Korea Zinc Single-Stock Futures
Hillhouse To Buy Out Minorities In Samty Holdings (187A) – Small Premium, High Leverage, Hmmm

7&I Results and Plans – The Good, The Bad, The Ugly, The Respectable, Unfortunate, and Encouraging

H1 sales were GOOD. H1 earnings were BAD. New forecasts are UGLY. The CVS initiatives are RESPECTABLE, but US CVS market environment UNFORTUNATE. The creation of the new Holdco ENCOURAGING.
The Couche-Tard Bid? That’s SEPARATE. Confidential. But three weeks after receiving the new proposal, it hasn’t been publicly rejected. So that’s a thing.
7&i is progressing with its Standalone Plan, as it should, because ACT’s bid is more a show of faith for discussions. The York Holdings structure is INTERESTING.

7-Eleven Corporation: A Clear Strategy for Long-Term Value, Founding Family Return to Super-Stores

By Michael Causton

Seven & I released 1H24 earnings today as well as details on planned restructuring of its business. Results included some one-off items hitting operating profit as well as lower footfall.
The bigger news was the plan to hive off the non-CVS retail operations into a new company, York Holdings, leaving a newly named 7-Eleven Corporation running CVS globally.
Unusually, Seven also mentioned the possibility of new strategic partners investing in York, including even the “original founding families”, suggesting one way of holding on to control.

Shin Kong and Taishin – There’s a Good Value Swap Trade To Do Here

Media reports indicate that the shareholder base of Shin Kong Financial Holding (2888 TT) and Taishin Financial Holding (2887 TT) have approved their merger.
Shin Kong meeting results were public just before the market closed. The results from Taishin were known earlier. The market and spread were un-moved. If anything, things widened a little.
Next, the two companies try to get fair Trade Commission, FSC, and Exchange approval to join to become Taishin Shin Kong FHC. And there’s a good trade to do here.

HSCI Index Rebalance Preview: Midea Group (300 HK) To Be Added in December; Stock Connect Next Week

By Brian Freitas

There were only 13 new listings on the Main Board of the HKEX (388 HK) in the third quarter of the year.
Of those stocks, we only see Midea Group (300 HK) having a chance of being added to the HSCI in December.
Midea Group (300 HK) should be added to Southbound Stock Connect next week after the price stabilisation period has ended.

SENSEX Index Rebalance: And That’s a Googly

By Brian Freitas

Adani Ports & Special Economic Zone (ADSEZ IN) will replace Wipro Ltd (WPRO IN) in the S&P BSE SENSEX Index at the close on 21 June.
Adani Ports & Special Economic Zone (ADSEZ IN)‘s inclusion is a big surprise and there should be a move higher in the stock in the short-term.
Wipro Ltd (WPRO IN)‘s deletion was expected and there is positioning in the stock. But there is a lot that passives need to sell too.

Hyundai Motor India: Index Entry Timing for India’s Biggest IPO

By Brian Freitas

Hyundai Motor India (1342Z IN) is looking to list on the exchanges by selling up to INR 279bn (US$3.3bn) of stock at a valuation of up to INR 1,593bn (US$19bn).
The anchor allocations will be completed early next week, and the stock is expected to start trading on 22 October.
The stock will not get Fast Entry to global indices. Inclusion at regular rebalances should take place in February and June next year.

Quiddity Mar25 Nikkei 225 Rebal: Likely 2 IN, 2 OUT, Again; Minimal Surprise Factor

The Sep24 Nikkei 225 Rebal was odd. They could have done 3. They did 2. For now, I see 2 IN and 2 OUT for the Mar25 Nikkei 225 Rebal.
There is also a capping event for Fast Retailing which on mild outperformance could become a double-capping event.
There is a bit of a tech bent to potential ADDs. Some Consumer Goods stocks need stock splits to get in. The Committee will regret not adding PPIH last time.

TOPIX Inclusions: Who Is Ready (Oct 2024)

By Janaghan Jeyakumar, CFA

Quiddity’s “Who is Ready” series of insights aims to objectively identify names listed on the Tokyo Stock Exchange that are potential additions to the TOPIX Index in future.
Our long-term pre-event candidate CELSYS (3663 JP) has moved to TSE Prime. There will be a TOPIX Inclusion event on 30-Oct-24. The stock has outperformed TOPIX by 43% since July.
PKSHA Technology (3993 JP) and GENOVA (9341 JP) also moved to the TSE Prime market in September and will be having TOPIX Inclusion events at the end of October 2024.

Another Play to Consider: Spread Trading Korea Zinc Single-Stock Futures

By Sanghyun Park

Another play is spread trading Korea Zinc single-stock futures: go long on the front-month and short on the farther-out contract to profit from price convergence.
The key is when longer-dated futures’ volume will rise and if the basis difference with front-month futures will create arbitrage opportunities. November’s volume seems more for hedging than arbitrage.
MBK is likely to launch a second tender offer, potentially extending the spread trading timeline and giving us more chances to hit sweet spots.

Hillhouse To Buy Out Minorities In Samty Holdings (187A) – Small Premium, High Leverage, Hmmm