Category

Daily Briefs

Sep 29
0

Daily Brief Japan: Lasertec Corp, Seven Bank Ltd, Istyle Inc, Carta Holdings, Inc. and more

By | Daily Briefs, Japan

In today’s briefing:

  • Nikkei 225 Rebal – Beating a Dead Horse
  • Seven Bank – Assets 39x Loans | Strong 7% Loan Growth | ATM Transactions +8% | Retail Accounts +9%
  • IStyle Growth Following Amazon Shareholding
  • Carta Holdings (3688 Jp) -Pushing Forward with Earnings Structure Improvements

Nikkei 225 Rebal – Beating a Dead Horse

By Travis Lundy

  • The September 2023 Nikkei 225 Rebalance is tomorrow at the close. This will engender a lot of buying of three names, and a lot of selling of 3 names.  
  • It will also engender a funding trade of nearly ¥460bn. 
  • I am going to beat the dead horse and warn about certain issues with this rebalance.

Seven Bank – Assets 39x Loans | Strong 7% Loan Growth | ATM Transactions +8% | Retail Accounts +9%

By Daniel Tabbush

  • Seven Bank Ltd (8410 JP) is the 7-11 convenience store bank, which focuses on ATM fees more than loans, so its cash is JPY952bn vs loans JPY35bn at FY23.
  • Loan growth in 1Q24 is 7% YoY, one of strongest in Japan and it is accelerating in recent periods, alongside 8-9% growth in ATM transactions, retail accounts
  • Exceptionally strong ATM transactions abroad at 92.4m in 1Q24 vs 66.5m in 1Q23, including US, Indonesia and Philippines.

IStyle Growth Following Amazon Shareholding

By Michael Causton

  • @Cosme continues to carve out a significant share of the cosmetics market, with record sales last year. 
  • @Cosme appeals to a wide cross section of the population but this is about to get even wider once it starts selling via Amazon, its biggest shareholder.
  • While there is debate about whether Amazon will increase its stake, what is certain is that Amazon will help drive iStyle’s sales growth.

Carta Holdings (3688 Jp) -Pushing Forward with Earnings Structure Improvements

By Sessa Investment Research

  • Specific measures for structural reforms are being implemented one after another.

  • CARTA Holdings had announced the withdrawal from unprofitable businesses (game and hometown tax payment businesses), a ¥1 bn reduction in SG&A expenses centered on fixed costs, the integration of four direct sales subsidiaries, and other streamlining measures leading up to the 2Q FY23/12 earnings announcement, and on September 5, 2023, the company’s board of directors newly approved a resolution to call for voluntary retirement.

  • While the macroeconomic downturn was particularly noticeable in the April-June 2023 earnings results, with advertising companies downwardly revising their forecasts one after another, no other company has implemented such drastic measures like CARTA Holdings has, and this move is worth highlighting for its future sharp recovery.

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Sep 29
0

Daily Brief Health Care: Kalbe Farma, Fresenius Medical Care & , Davita Healthcare Partners, Henry Schein, Royalty Pharma and more

By | Daily Briefs, Healthcare

In today’s briefing:

  • Kalbe Farma (KLBF IJ) – Back to The Future
  • Fresenius Medical Care (FME GR): Improved Guidance on Strong 1H23 Show; Turnaround Plan on Track
  • DaVita Inc.: Improved Patient Care and Treatment Volumes Driving Growth! – Major Drivers
  • Henry Schein Inc.: The Global Growth Engine Driven by Cloud-Based Solutions! – Major Drivers
  • Royalty Pharma plc: How Trelegy and Spinraza Are Changing The Game! – Major Drivers

Kalbe Farma (KLBF IJ) – Back to The Future

By Angus Mackintosh

  • Kalbe Farma (KLBF IJ) is one of the key proxies for increasing healthcare penetration and health consciousness in Indonesia through prescription drugs, consumer health, and nutritional products.
  • The company saw a solid sales performance in 1H2023 driven by prescription drugs. There was some lingering margin pressure from higher materials but this should abate in 2H2023.
  • Kalbe Farma continues to develop its digital capabilities, as well as export markets helping to drive efficiencies and growth. Valuations remain below the historical average despite strong earnings recovery ahead.

Fresenius Medical Care (FME GR): Improved Guidance on Strong 1H23 Show; Turnaround Plan on Track

By Tina Banerjee

  • Fresenius Medical Care & (FME GR) reported accelerated organic revenue growth of 6% YoY in 2Q23, driven by both operating segments including sequentially stable treatment volumes in the U.S.
  • Execution on turnaround plan translates into visible productivity improvements in care delivery segment achieving a Q2 margin at the lower end of the 2025 target margin band of 10–14%.
  • The company now expects 2023 operating income to remain flat or decline by up to a low-single-digit percentage (previous target: remain flat or decline by up to a high-single-digit percentage).

DaVita Inc.: Improved Patient Care and Treatment Volumes Driving Growth! – Major Drivers

By Baptista Research

  • DaVita Inc. exceeded analyst expectations in revenue and earnings, with $432 million in adjusted operating revenue and $2.08 in adjusted profits per share.
  • These outcomes were driven by advancements in their financial trinity of treatment volume, revenue per treatment, and patient care expenses.
  • In this report, we have carried out a fundamental analysis of the historical financial statements of the company.

Henry Schein Inc.: The Global Growth Engine Driven by Cloud-Based Solutions! – Major Drivers

By Baptista Research

  • Henry Schein delivered a mixed set of results in the recent quarter with revenues falling short of Wall Street expectations but above-par earnings.
  • Strong equipment sales and steady general merchandise sales, along with continued strength in technology and value-added services, implants, biomaterials, and endodontic products, have contributed to this performance.
  • The technology and value-added services business, including Henry Schein One, is experiencing global growth, driven by cloud-based practice management software and revenue cycle management services.

Royalty Pharma plc: How Trelegy and Spinraza Are Changing The Game! – Major Drivers

By Baptista Research

  • Royalty Pharma plc delivered a strong result and managed an all-around beat last quarter.
  • As a result, the company delivered adjusted EBITDA growth of 4% for the quarter, substantially in line with the team’s top-line growth.
  • The company’s total royalty receipts increased by 1%.

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Sep 29
0

Daily Brief Industrials: Posco International Corporation, Cainiao Smart Logistics, Marco Polo Marine, Parker Hannifin and more

By | Daily Briefs, Industrials

In today’s briefing:

  • Warren Buffett’s Investments in Japanese Trading Firms: Impact on Korean Trading Companies
  • Cainiao Pre-IPO – The Negatives – Growth Still Driven by China Ops, Pricing Pressure Persists
  • What’s Trending: Oil plays in spotlight as crude prices rise
  • Parker-Hannifin Corporation: The Strategic Shift That Doubled Their Presence in Key Industries! – Major Drivers

Warren Buffett’s Investments in Japanese Trading Firms: Impact on Korean Trading Companies

By Douglas Kim

  • We believe that Warren Buffett’s investments in Japanese trading companies have also positively impacted several Korean trading companies in the past three years. 
  • We highlighted seven Korean trading companies three years ago including Posco International and their share prices are up more than 76% on average in this period. 
  • Despite their outstanding share price performance in the past three years, there could be some significant headwinds ahead, as evidenced by the steep inverted yield curve.

Cainiao Pre-IPO – The Negatives – Growth Still Driven by China Ops, Pricing Pressure Persists

By Sumeet Singh

  • Cainiao Smart Logistics, Alibaba Group Holding (9988 HK)’s logistics linked arm, is planning to raise at least US$1bn in its Hong Kong IPO.
  • Cainiao is the largest provider of cross-border e-commerce logistics services globally and a leader in China logistics services, according to CIC.
  • In this note, we talk about the not-so-positive aspects of the deal.

What’s Trending: Oil plays in spotlight as crude prices rise

By Geoff Howie

  • What you need to know about the SG market #whatstrending feat. #whatstrending is a new series addressing some of the most trending questions/topics on the markets for investors.
  • Global oil demand growth expected to exceed supply growth in 2023 What are companies that have benefitted from higher oil prices?.

Parker-Hannifin Corporation: The Strategic Shift That Doubled Their Presence in Key Industries! – Major Drivers

By Baptista Research

  • In the fourth quarter, Parker-Hannifin achieved a decent performance across all aspects of its operations.
  • Safety remained a top priority, with a remarkable 20% reduction in recordable incidents, placing the company in the top quartile for safety.
  • Sales for the quarter reached a record-breaking $5.1 billion, marking a substantial 22% increase compared to the previous year, with organic growth contributing to 6% of this growth.

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Sep 29
0

Daily Brief TMT/Internet: Lasertec Corp, SK Inc, Micron Technology, Kahoot! ASA, King Yuan Electronics Co, Ltd., Istyle Inc, SUSE, Arlo Technologies Inc, Carta Holdings, Inc., Take Two Interactive Software, Inc and more

By | Daily Briefs, TMT/Internet

In today’s briefing:

  • Nikkei 225 Rebal – Beating a Dead Horse
  • Londian Wason Energy Tech: Planning an IPO in the US in 2024 (Impact on SK Inc)
  • Micron Management Calls Memory Price Trough, Improving Pricing & Profitability Ahead
  • GS AM Consortium/Kahoot: Waiving of Minimum Acceptance, Spread
  • KYEC (2449.TT): Beneficiary of AI with Contribution of CoWoS Testing
  • IStyle Growth Following Amazon Shareholding
  • Offer Results and Interim Dividend
  • ARLO: Preview of the Discounted Value
  • Carta Holdings (3688 Jp) -Pushing Forward with Earnings Structure Improvements
  • Take-Two Interactive Software: The Games Driving Their Billion-Dollar Bookings! – Major Drivers

Nikkei 225 Rebal – Beating a Dead Horse

By Travis Lundy

  • The September 2023 Nikkei 225 Rebalance is tomorrow at the close. This will engender a lot of buying of three names, and a lot of selling of 3 names.  
  • It will also engender a funding trade of nearly ¥460bn. 
  • I am going to beat the dead horse and warn about certain issues with this rebalance.

Londian Wason Energy Tech: Planning an IPO in the US in 2024 (Impact on SK Inc)

By Douglas Kim

  • According to SCMP, Londian Wason is getting ready for an IPO in the US in 2024. Londian Wason is planning to raise nearly US$500 million in pre-IPO funding and IPO.
  • SK Inc owns about 30% stake in Londian Wason, a leading copper foil maker in China. It is estimated that SK Inc’s stake is worth about US$1.1 billion. 
  • In 2022, Londian Wason generated sales of 1.47 trillion won. Since SK’s investment in Londian Wason in 2019, the company’s sales has been growing at more than 50% per annum.

Micron Management Calls Memory Price Trough, Improving Pricing & Profitability Ahead

By Vincent Fernando, CFA

  • Micron’s FY4Q23 results beat expectations. The company expects to return to a positive margin by FY2H24, however projected a higher FY1Q24 loss than consensus expected.
  • As suggested would be the case in our pre-results piece, the company said it sees memory prices bottoming and expects improving pricing and profitability ahead for the industry.
  • While next quarter’s guidance may be weaker than some expected, we believe the key take-away is that Micron is seeing a memory prices bottom.

GS AM Consortium/Kahoot: Waiving of Minimum Acceptance, Spread

By Jesus Rodriguez Aguilar

  • On 28 September, Kangaroo Bidco announced that it waives the Minimum Acceptance Condition (>90% acceptances) of its best and final NOK 35/share offer for Kahoot! ASA (KAHOOT NO).
  • Acceptances so far total 69.29%. The only remaining conditions are regulatory approvals from both China and United States.
  • As of early afternoon 28 September, spread is 0.63%/5.55% (gross/annualised). Although volumes are thin, I expect higher volumes in the last stretch of the offer period. Recommendation: long and tender.

KYEC (2449.TT): Beneficiary of AI with Contribution of CoWoS Testing

By Patrick Liao

IStyle Growth Following Amazon Shareholding

By Michael Causton

  • @Cosme continues to carve out a significant share of the cosmetics market, with record sales last year. 
  • @Cosme appeals to a wide cross section of the population but this is about to get even wider once it starts selling via Amazon, its biggest shareholder.
  • While there is debate about whether Amazon will increase its stake, what is certain is that Amazon will help drive iStyle’s sales growth.

Offer Results and Interim Dividend

By Jesus Rodriguez Aguilar

  • The Offer has been accepted for 19.2% of the current share capital, which means that EQT will control 98.2% of the shares.
  • Those who tendered will receive a €3.2/share interim dividend (€2.72/share net) on 4 October, and €12.8/share on 6 October. EQT doesn’t intend to seek a squeeze-out.
  • Investors in SUSE who have not tendered will become soonish shareholders in an unlisted company. Buying now means an 18.8% yield (net), and hoping for a future purchase offer.

ARLO: Preview of the Discounted Value

By Hamed Khorsand

  • ARLO reporting better than expected third quarter results would rely on paid subscriber additions remaining on their current trajectory
  • The pause in ARLO’s stock price creates greater upside potential as ARLO demonstrates its ability to generate positive earnings and free cash flow with each passing quarter
  • ARLO has released a new line up of Essential cameras. ARLO had previously indicated it would update its Essentials cameras this year ahead of the holidays

Carta Holdings (3688 Jp) -Pushing Forward with Earnings Structure Improvements

By Sessa Investment Research

  • Specific measures for structural reforms are being implemented one after another.

  • CARTA Holdings had announced the withdrawal from unprofitable businesses (game and hometown tax payment businesses), a ¥1 bn reduction in SG&A expenses centered on fixed costs, the integration of four direct sales subsidiaries, and other streamlining measures leading up to the 2Q FY23/12 earnings announcement, and on September 5, 2023, the company’s board of directors newly approved a resolution to call for voluntary retirement.

  • While the macroeconomic downturn was particularly noticeable in the April-June 2023 earnings results, with advertising companies downwardly revising their forecasts one after another, no other company has implemented such drastic measures like CARTA Holdings has, and this move is worth highlighting for its future sharp recovery.

Take-Two Interactive Software: The Games Driving Their Billion-Dollar Bookings! – Major Drivers

By Baptista Research

  • Take-Two Interactive Software delivered a mixed set of results for the previous quarter with revenues above the analyst consensus.
  • Notable successes were observed in titles like Graft Theft Auto Online, Grand Theft Auto V, and NBA 2K23, surpassing projections.
  • The launch of San Andreas Mercenaries for Grand Theft Auto Online brought fresh content, including new missions, vehicles, and fan-requested improvements.

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Sep 29
0

Daily Brief Energy/Materials: Taiwan Cement, EcoPro Materials, Nickel Asia, Vedanta Resources, Longboat Energy, Marco Polo Marine and more

By | Daily Briefs, Energy & Materials Sector

In today’s briefing:

  • Taiwan Cement GDRs Early Look – While Momentum Is Not the Greatest, the Deal Is Very Well Flagged
  • Passive Flow Schedule Driven by Local Sector ETFs for Ecopro Materials
  • Ecopro Materials IPO – Pushing Ahead with Listing Despite the Controversies
  • PCOMP Adhoc Index Rebalance: NIKL to Replace UBP in a BIG Move
  • Morning Views Asia: Vedanta Resources
  • Longboat Energy plc (AIM: LBE): Repositioning the business
  • What’s Trending: Oil plays in spotlight as crude prices rise

Taiwan Cement GDRs Early Look – While Momentum Is Not the Greatest, the Deal Is Very Well Flagged

By Clarence Chu

  • Taiwan Cement (1101 TT) is looking to raise US$400m in its upcoming global depository receipts (GDRs) offering. Included is another planned raising of US$500m via convertible bonds.
  • Similar to previous GDR listings, the deal is a long drawn out process with TC requiring multiple approvals, and thus providing ample time for investors to position for the raising. 
  • As of last close, the amount of shares to be offered under the equity component is around 388m shares, or 19.5 days of three month ADV. 

Passive Flow Schedule Driven by Local Sector ETFs for Ecopro Materials

By Sanghyun Park

  • Ecopro Materials will benefit from passive flows generated by being a part of the battery-themed ETFs in the Korean local ETF market. And this will create noteworthy flow instances.
  • There will be a total of six flow events occurring consecutively from March to June next year. For all except for K-New Deal, there is a high likelihood of inclusion
  • In particular, it appears that we should target the rebalancing trading of the TIGER Secondary Cell ETF, which occurs on the second Thursday of April next year.

Ecopro Materials IPO – Pushing Ahead with Listing Despite the Controversies

By Ethan Aw

  • EcoPro Materials (ECO123 KS) is looking to raise up to US$500m in its Korean IPO. 
  • Ecopro Materials (EPM) manufactures and sells high-nickel precursors, one of the key materials for high-nickel cathode materials for secondary (rechargeable) batteries. 
  • Ecopro Materials’ revenue has grown by more than three times over the track record period.  However, its parent company Ecopro and sister company Ecopro BM have been mired in controversy.

PCOMP Adhoc Index Rebalance: NIKL to Replace UBP in a BIG Move

By Brian Freitas

Morning Views Asia: Vedanta Resources

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.

Longboat Energy plc (AIM: LBE): Repositioning the business

By Auctus Advisors

  • Taking into account the investment by JAPEX to secure 49.9% of Longboat Norge, Longboat plc holds £10.9 mm in cash.
  • This includes £5.3 mm representing Longboat’s share of the cash in Longboat Norge (50.1% of £10.6 mm).
  • Overall, we forecast that Longboat plc will hold ~£4 mm in cash at YE23.

What’s Trending: Oil plays in spotlight as crude prices rise

By Geoff Howie

  • What you need to know about the SG market #whatstrending feat. #whatstrending is a new series addressing some of the most trending questions/topics on the markets for investors.
  • Global oil demand growth expected to exceed supply growth in 2023 What are companies that have benefitted from higher oil prices?.

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Sep 29
0

Daily Brief Industrials: Posco International Corporation, Cainiao Smart Logistics, Marco Polo Marine, Parker Hannifin and more

By | Daily Briefs, Industrials

In today’s briefing:

  • Warren Buffett’s Investments in Japanese Trading Firms: Impact on Korean Trading Companies
  • Cainiao Pre-IPO – The Negatives – Growth Still Driven by China Ops, Pricing Pressure Persists
  • What’s Trending: Oil plays in spotlight as crude prices rise
  • Parker-Hannifin Corporation: The Strategic Shift That Doubled Their Presence in Key Industries! – Major Drivers

Warren Buffett’s Investments in Japanese Trading Firms: Impact on Korean Trading Companies

By Douglas Kim

  • We believe that Warren Buffett’s investments in Japanese trading companies have also positively impacted several Korean trading companies in the past three years. 
  • We highlighted seven Korean trading companies three years ago including Posco International and their share prices are up more than 76% on average in this period. 
  • Despite their outstanding share price performance in the past three years, there could be some significant headwinds ahead, as evidenced by the steep inverted yield curve.

Cainiao Pre-IPO – The Negatives – Growth Still Driven by China Ops, Pricing Pressure Persists

By Sumeet Singh

  • Cainiao Smart Logistics, Alibaba Group Holding (9988 HK)’s logistics linked arm, is planning to raise at least US$1bn in its Hong Kong IPO.
  • Cainiao is the largest provider of cross-border e-commerce logistics services globally and a leader in China logistics services, according to CIC.
  • In this note, we talk about the not-so-positive aspects of the deal.

What’s Trending: Oil plays in spotlight as crude prices rise

By Geoff Howie

  • What you need to know about the SG market #whatstrending feat. #whatstrending is a new series addressing some of the most trending questions/topics on the markets for investors.
  • Global oil demand growth expected to exceed supply growth in 2023 What are companies that have benefitted from higher oil prices?.

Parker-Hannifin Corporation: The Strategic Shift That Doubled Their Presence in Key Industries! – Major Drivers

By Baptista Research

  • In the fourth quarter, Parker-Hannifin achieved a decent performance across all aspects of its operations.
  • Safety remained a top priority, with a remarkable 20% reduction in recordable incidents, placing the company in the top quartile for safety.
  • Sales for the quarter reached a record-breaking $5.1 billion, marking a substantial 22% increase compared to the previous year, with organic growth contributing to 6% of this growth.

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Sep 29
0

Daily Brief Financials: Seven Bank Ltd, ICICI Securities Ltd, Seoul Guarantee Insurance, Square Inc, Bakkt and more

By | Daily Briefs, Financials

In today’s briefing:

  • Seven Bank – Assets 39x Loans | Strong 7% Loan Growth | ATM Transactions +8% | Retail Accounts +9%
  • ICICI Securities Delisting: A Deja Vu of Troubles
  • Seoul Guarantee Insurance Pre-IPO Thoughts on Valuation – Needs a Discount to Its Larger Peers
  • Block Inc.: Buy Now
  • Bakkt Holdings, Inc – Bakkt Highlights the Latest in Cryptocurrencies

Seven Bank – Assets 39x Loans | Strong 7% Loan Growth | ATM Transactions +8% | Retail Accounts +9%

By Daniel Tabbush

  • Seven Bank Ltd (8410 JP) is the 7-11 convenience store bank, which focuses on ATM fees more than loans, so its cash is JPY952bn vs loans JPY35bn at FY23.
  • Loan growth in 1Q24 is 7% YoY, one of strongest in Japan and it is accelerating in recent periods, alongside 8-9% growth in ATM transactions, retail accounts
  • Exceptionally strong ATM transactions abroad at 92.4m in 1Q24 vs 66.5m in 1Q23, including US, Indonesia and Philippines.

ICICI Securities Delisting: A Deja Vu of Troubles

By Nimish Maheshwari

Seoul Guarantee Insurance Pre-IPO Thoughts on Valuation – Needs a Discount to Its Larger Peers

By Clarence Chu

  • Seoul Guarantee Insurance (031210 KS) is looking to raise around US$270m in its Korean IPO.
  • Seoul Guarantee Insurance (SGI) is a guarantee insurance firm operating predominantly in Korea.
  • We have looked at the firm’s past performance and undertaken a peer comparison in earlier notes. In this note, we discuss our thoughts on valuation.

Block Inc.: Buy Now

By Baptista Research

  • Block, Inc. managed to surpass analyst prospects in terms of revenue as well as earnings, with gross profit reaching $1.87 billion, marking a 27% increase year-over-year.
  • Turning to the performance of Square and Cash App, Square achieved $888 million in gross profit, reflecting an 18% increase year-over-year.
  • The Buy Now, Pay Later (BNPL) platform contributed $84 million of gross profit to both Square and Cash App in the second quarter, with GMV reaching $6.4 billion, a 22% year-over-year increase.

Bakkt Holdings, Inc – Bakkt Highlights the Latest in Cryptocurrencies

By Water Tower Research

  • Founded in 2018, Bakkt builds solutions that enable its clients to grow with the crypto economy.

  • Through institutional-grade custody, trading, and on-ramp capabilities, its clients leverage technology that’s built for sustainable, long-term involvement in crypto.

  • Bakkt Chief Product Officer Dan O’Prey joined us on The Water Tower Hour podcast to discuss Bakkt’s crypto infrastructure business, its history as part of ICE, cryptocurrency differences, its custody focus, and why it is different. 

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Sep 29
0

Daily Brief Consumer: Hengan International Group, Tyson Foods Inc Cl A and more

By | Consumer, Daily Briefs

In today’s briefing:

  • Hengan/Vinda: Pulp Friction
  • Tyson Foods Inc.: Chicken’s Comeback and What That Means for the Market! – Major Drivers

Hengan/Vinda: Pulp Friction

By David Blennerhassett

  • Hengan International Group (1044 HK) and Vinda International (3331 HK) are both market leaders in China’s personal care industry.
  • Hengan’s operations have greater exposure to sanitary napkins and diapers; whereas tissues account for 83% of Vinda’s revenue. Both companies have been impacted by an increase in wood pulp prices.
  • Hengan is trading cheap; but Vinda’s bottom line is forecast to return to its glory days. Plus rumours of a possible takeover of Vinda continue to do the rounds. 

Tyson Foods Inc.: Chicken’s Comeback and What That Means for the Market! – Major Drivers

By Baptista Research

  • Tyson Foods, Inc. delivered disappointing results as the company could not meet the revenue and earnings expectations of Wall Street.
  • Lower profitability in their Beef and Chicken segments accounted for more than 90% of the reduction in adjusted operating profit.
  • In this report, we have carried out a fundamental analysis of the historical financial statements of the company.

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Sep 28
0

Daily Brief ESG: At the Root of the Diversity Issue Is Traditional Familism in Society and the Workplace and more

By | Daily Briefs, ESG

In today’s briefing:

  • At the Root of the Diversity Issue Is Traditional Familism in Society and the Workplace
  • Metalsa – ESG Report – Lucror Analytics

At the Root of the Diversity Issue Is Traditional Familism in Society and the Workplace

By Aki Matsumoto

  • Increase in the number of non-regular workers is a factor in gender wage disparity and has also put pressure on profit margin since labor was invested in low value-added jobs.
  • In Japan, childcare is assumed to be dependent on the efforts of the family, and there is little thought of society solving childcare issues, and government policies reflect this idea.
  • Problems also exist on the part of employers, with low rates of men taking childcare leave, and the top reason being an atmosphere that makes it difficult take childcare leave.

Metalsa – ESG Report – Lucror Analytics

By Charles Macgregor

  • Lucror Analytics’ ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable).
  • We view Metalsa’s ESG as “Adequate”, in line with its “Adequate” scores for the Environmental, Social and Governance pillars. Controversies are “Immaterial” and Disclosure is “Strong”.
  • Metalsa is a Tier 1 automotive parts supplier of structural components for light and commercial vehicles, headquartered in Monterrey (Mexico).

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Sep 28
0

Daily Brief Equity Bottom-Up: Li Ning (2331 HK):  No Positive Catalysts In Sight and more

By | Daily Briefs, Equity Bottom-Up

In today’s briefing:

  • Li Ning (2331 HK):  No Positive Catalysts In Sight
  • Edelweiss: Ripe for Re-Rating
  • HKEX (388 HK) – Exceptional Cost Controls, New Revenue Streams, Quarterly Profit Momentum
  • Nihon M&A: Not Many Catalysts to Move the Stock Price Up
  • Mitra Keluarga Karyasehat (MIKA IJ) – Well Adjusted For a Rapid Recovery
  • MercadoLibre’s Bullish Run Continues
  • Axonics (AXNX US): Large Underserved Market And Superior Portfolio Ensure Multi-Year Growth
  • Chinese Semiconductor Beneficiary
  • Nesco: FY24 Earnings on Track to Be Strong
  • Fortinet Inc.: Launch Of Data Center Firewalls With AI Support & Other Major Developments

Li Ning (2331 HK):  No Positive Catalysts In Sight

By Steve Zhou, CFA

Edelweiss: Ripe for Re-Rating

By Ankit Agrawal, CFA

  • Edelweiss reported a strong Q1FY24 earnings led by its asset management and ARC businesses. In particular, the asset management business is scaling up well for Edelweiss.
  • In the ARC business, Edelweiss saw strong recoveries during Q1FY24. Also, gradually, Edelweiss is scaling up the retail ARC business.
  • The credit business continues to see reduction in the wholesale loan book AUM. Asset quality remains stabilized and the co-lending model is helping Edelweiss to grow well.

HKEX (388 HK) – Exceptional Cost Controls, New Revenue Streams, Quarterly Profit Momentum

By Daniel Tabbush

  • HKEX (388 HK) announced strong results, defying some worsening trends in volume, new listings, with quarterly profit growth rising from 11% to 28% to 34% YoY from 4Q22 to 2Q23
  • Cost controls have been key to 31% 1H23 profit growth, with 0% growth depreciation, amortization, financing costs, and taxation, which can continue to support profit delta
  • Revenue growth of 18-19% YoY in each of the past 2 quarters is partly driven by new revenue streams, which can offset some weaknesses in traditional metrics

Nihon M&A: Not Many Catalysts to Move the Stock Price Up

By Shifara Samsudeen, ACMA, CGMA

  • Nihon M&A Center’s share price has dropped more than 50% YTD despite several news media outlets reporting that there has been a surge in M&A activity among Japanese companies.
  • At the same time, the Japanese government also issued new guidelines to promote more M&A activities in the nation to boost competitiveness.
  • The no. of M&A transactions for the company has continued to grow however, value per transaction has been on a declining trend suggesting these deals are smaller in size.

Mitra Keluarga Karyasehat (MIKA IJ) – Well Adjusted For a Rapid Recovery

By Angus Mackintosh

  • Mitra Keluarga (MIKA IJ) is in the midst of a recovery not yet reflected in headline numbers as the effects of inflated COVID revenues fade and core business takes off.
  • The company is a key beneficiary of the new health bill allowing foreign doctors to practice in Indonesia given its best-in-class hospitals located in affluent catchment areas.  
  • Mitra Keluarga Karyasehat continues to expand its hospital network, increase treatment intensity, and digitalise its operations. Valuations are attractive given the highest returns amongst its peers, with recovery in motion.

MercadoLibre’s Bullish Run Continues

By Steven Holden

  • Despite MercadoLibre’s non-benchmark status, ownership among active EM managers has reached new highs.
  • MercadoLibre has been the beneficiary of significant manager rotation over the last year, with 131 funds increasing weights and 29 opening new positions.
  • MercadoLibre is now the 8th largest holding on an average weight basis and has recently overtaken AIA Group as the largest overweight stock position across all regions.

Axonics (AXNX US): Large Underserved Market And Superior Portfolio Ensure Multi-Year Growth

By Tina Banerjee

  • Axonics (AXNX US) believes that the U.S. sacral neuromodulation market is now worth of ~$800M, which is poised to double over the next five years to $1.6B.
  • The company has been reporting superior revenue growth since 2020. Axonics raised 2023 revenue guidance to $358M, up 32% YoY. The company has become adjusted EBITDA positive in 2022.
  • With superior product portfolio in terms of patient satisfaction, longer product life, and smaller size, Axonics is the stronger player in the U.S. duopoly sacral neuromodulation market.

Chinese Semiconductor Beneficiary

By Douglas O’Laughlin

  • ACM Research is a bit of an oddball stock. It’s a US listing of a Chinese company, with 82% ownership of the Chinese subsidiary.
  • The US listing is the parent company and has been in the crossfire of US-China trade tensions for years.
  • It is probably the best Chinese Semicap company and has real orders with multinational companies, notably SK Hynix.

Nesco: FY24 Earnings on Track to Be Strong

By Ankit Agrawal, CFA

  • Q1 tends to be a seasonally weak quarter for the exhibition business (BEC) and as a result, the revenues declined on a QoQ basis.
  • However, in YoY terms, BEC revenues grew 75%+ and exceeded pre-COVID levels, i.e. the revenues are up 7% vs that in Q1FY20.
  • The IT Parks business saw marginal improvement of 1% QoQ growth suggesting that the occupancy level is steady. Occupancy is 97% in Tower 4 and 82% in Tower 3.

Fortinet Inc.: Launch Of Data Center Firewalls With AI Support & Other Major Developments

By Baptista Research

  • Fortinet Inc. delivered a mixed set of results in its most recent result, with revenues falling short of Wall Street expectations but above-par earnings.
  • Their quarter was marked by impressive total revenue growth of 26%, driven primarily by solid service revenue expansion exceeding 30% for the second consecutive quarter.
  • In this report, we have carried out a fundamental analysis of the historical financial statements of the company.

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