In today’s briefing:
- BYD (1211 HK): Some Threats Before 1Q25 Result
- Big Crypto Money Move in Korea – Impact on Key Listed Korean Companies
- MSL: High ROCE, Strong Moat – Rides Energy Capex Surge
- ENN Energy (2688 HK): Privatisation Progressing Well Ahead
- Korea Value Up (3 Winners and 7 Losers Among KOSPI 200 Companies) In March and April 2025
- India’s Biggest Small-Cap Shell Game
- Adastria: Cautious on the Platform Narrative, But Optimistic on Margins and Valuation Rebound
- Shandong Fengxiang (9977.HK) Privatization – Long-Term Investors May Be Unhappy with the Offer Price
- Asia Real Estate Tracker (21-Apr-2025): Mapletree sells Scotland student housing.
- Chugai Pharmaceutical (4519 JP): Positive Phase 3 Results Of Orforglipron Augurs Well
BYD (1211 HK): Some Threats Before 1Q25 Result
- The growth rate of sales volume slowed down in March 2025.
- Geely’s sales volume reached 46% of BYD’s in 1Q25, compared to 23% in 2024.
- We set a downside of 18% and a price target of HK$300 for the next twelve months.
Big Crypto Money Move in Korea – Impact on Key Listed Korean Companies
- There has been a big crypto money move in Korea. Market cap of crypto currencies held in crypto exchanges in Korea nearly doubled from October to November 2024.
- We discuss 8 major listed companies in Korea that are major beneficiaries (directly and indirectly) of this big move into crypto currencies in Korea.
- Some of the major beneficiaries include Kakao Corp, KT Corp, Hanwha Securities, Woori Technology Investment, and Vidente.
MSL: High ROCE, Strong Moat – Rides Energy Capex Surge
- Market leader with 55% share in seamless pipes, Rs2,400 Cr net cash, and stable Rs15,000–17,000/ton EBITDA backed by strong oil & gas demand.
- Efficient capital allocator delivering 20%+ ROCE, with consistent insider buying reflecting high promoter confidence.
- 26% profit CAGR over 5 years, yet trades at ~12x P/E, offering value in a structurally growing industry.
ENN Energy (2688 HK): Privatisation Progressing Well Ahead
- ENN Energy (2688 HK) is not required to submit a merger control filing to the SAMR, suggesting it is making a step ahead in meeting the pre-conditions.
- The use of onshore bank loans and cash balance as a refinancing source and consideration payment will lower financing costs, boosting the value of ENN Natural Gas H-share.
- The current share price is 9.3 and 17.7% below the low-bound and high-bound of our estimated value range. It is also less vulnerable to the current tariff war.
Korea Value Up (3 Winners and 7 Losers Among KOSPI 200 Companies) In March and April 2025
- In this insight, we provide the details of the 10 most recent companies in KOSPI 200 that have announced their Corporate Value Up plans (April and March 2025).
- These 10 companies in KOSPI 200 that have announced their Corporate Value Up plans are down on average 1.3% versus KOSPI which is down 2% in the same period.
- Three companies that have outperformed KOSPI (since their Corporate Value Up report announcement) include Hanmi Semiconductor, Hyundai Engineering & Construction, and Samyang Foods.
India’s Biggest Small-Cap Shell Game
- The Mahadev Betting Scam exposed the infiltration of illegal gambling money into the stock market, manipulating small-cap stocks through offshore shell companies and pump-and-dump strategies.
- This scandal demonstrates how vulnerable markets are to operator-driven speculation, leading to artificial stock price surges, which mislead investors and undermine market integrity, creating systemic risks.
- The episode emphasizes the need for heightened due diligence, transparency, and scrutiny of foreign portfolio investors, encouraging investors to be more cautious of unexplained stock movements and shell company involvement.
Adastria: Cautious on the Platform Narrative, But Optimistic on Margins and Valuation Rebound
- Adastria’s “5th CHANGE” outlines a strategic pivot from specialty retail to a platform model aimed at scaling across brands, categories, and geographies while navigating domestic headwinds and evolving consumer behaviors.
- While Adastria Co Ltd (2685 JP)’s narrative emphasizes transformation, actual targets for user growth and GMV expansion appear modest, suggesting limited operational changes.
- Despite mixed views on the mid-term plan, we remain optimistic on Adastria. Gross margin normalization could drive meaningful OP upside, potentially surpassing mid-term plan targets.
Shandong Fengxiang (9977.HK) Privatization – Long-Term Investors May Be Unhappy with the Offer Price
- Based on our forecast, growth may be under pressure in 2025, but would recover in 2026/2027.The Cancellation Price is attractive for investors who want to cash out in short term.
- Some long-term investors may hope to see an improvement in Fengxiang’s fundementals and long-term performance after PAG/Abu Dhabi Investment step in. Their attitude may bring uncertainties to the privatization.
- The business logic of PAG is not a simple financial investment, but a higher pursuit. Fengxiang is a high-quality asset for PAG.Share Alternative Offer could help increase the success rate
Asia Real Estate Tracker (21-Apr-2025): Mapletree sells Scotland student housing.
- Mapletree, a real estate firm, has sold Scottish student housing to a Dutch fund manager, expanding its international portfolio.
- Shanghai office rents have decreased for the 12th consecutive quarter, reflecting a downward trend in the local real estate market.
- Central Tokyo office rents have increased due to rising construction costs, impacting rates for new supply and attracting investor interest.
Chugai Pharmaceutical (4519 JP): Positive Phase 3 Results Of Orforglipron Augurs Well
- Eli Lilly & Co (LLY US) has recently announced positive topline Phase 3 results for orforglipron, the GLP 1 RA drug candidate they licensed from Chugai Pharma in 2018.
- At the top dose, patients lost 7.3 kg of the 90.2 kg they weighed at the start of the trial, bettering Ozempic’s trial results.
- Once approved and commercialized, orforglipron should provide a long-term revenue visibility for Chugai Pharmaceutical (4519 JP) through milestone and royalty receipts from Lilly.
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