In today’s briefing:
- CTG Duty Free H Share Listing: Another False Dawn?
- Keepers Holdings (KEEPR PM): Stellar Results. Significant Upside Ahead
- Kirin: With Myanmar in the Rear-View Mirror, an Additional 30% Upside Is Quite Possible
- Hong Kong CEO & Director Dealings – 10th August 2022
- Rakuten (Neutral) – Q2 22 Results Reaction: Mobile Losses Narrow but Little Good News Beyond That
- STI Index Rebalance Preview (Sep): Close to the Cutoffs
- Betagro Pre-IPO – The Positives – Vertically Integrated and Weathered COVID Well
- Denso (6902) | No Reason to Be Uber-Bearish
- Shakey’s Pizza: Q2 2022 Recovery Far Better Than Expectations, Management Guidance Extremely Bullish
- Phu Nhuan Jewelry JSC (PNJ VN) – Update – Remaining positive in 2H22
CTG Duty Free H Share Listing: Another False Dawn?
- China Tourism Group Duty Free Corp Ltd (601888 CH)/CTGDF, the largest travel retail operator in the world, aims to launch an H Share listing to raise US$2-3 billion on Friday.
- CTGDF is a play on the normalization of domestic travel. However, the H Share listing timing is not ideal as a vital summer travel market, Sanya, is under renewed lockdown.
- The recovery timing has again shifted, with expectations of a 4Q recovery, but 2022 consensus expectations look slightly optimistic. We prefer to remain on the sidelines.
Keepers Holdings (KEEPR PM): Stellar Results. Significant Upside Ahead
- The Keepers Holdings, Inc. (KEEPR PM) reported solid growth in its Q2 2022 results, with 30% revenue growth YoY(%) and 44% profit growth ahead of our expectations.
- The stock trades at 4.5x PE ex-cash (with ~50% of the market capitalization in cash), making it a cheap discretionary consumption plays in the Philippines with good execution.
- Further catalysts include the potential for making an accretive acquisition. More to follow once the company has its investor call on Friday the 12th of August 2022.
Kirin: With Myanmar in the Rear-View Mirror, an Additional 30% Upside Is Quite Possible
- Kirin Holdings (2503 JP)’s 2Q22 normalized OP of ¥46.2bn from ¥500.3bn revenue was slightly above the consensus OP of ¥45.9bn from ¥500.8bn revenue.
- Kirin raised its 2022 revenue and normalized OP guidance by ¥40.0bn and ¥6.0bn respectively, due to the progress of profit improvement measures mainly in Coke-Northeast and Kyowa Kirin in 1H22.
- Meanwhile, Kirin is due ¥22.4bn from MEHL for the Myanmar JV. Even though this is not the fair value, receiving at least something is a bonus in our opinion.
Hong Kong CEO & Director Dealings – 10th August 2022
- The data in this insight is collated from the “shareholding disclosure” link on the HKEx website.
- Often there is a corresponding HKEx announcement on the increase – or decrease – in the shareholding by directors. However, such disclosures are by no means an absolute.
- These insights also flag those companies where shares have been pledged, both recently and ongoing.
Rakuten (Neutral) – Q2 22 Results Reaction: Mobile Losses Narrow but Little Good News Beyond That
- Mobile losses narrowed sequentially as expected but not by much as the company missed consensus and Redex expectations for profitability
- Rakuten also reported a 220K net subscriber loss in the quarter as point-chasing free users churned off when zero-yen tiers were cancelled but worringly, network coverage/capacity was also a factor
- If there is a silver lining, fintech businesses Rakuten Bank and Securities posted solid results and remain on pace to IPO but negative mobile sentiment is unlikely to change
STI Index Rebalance Preview (Sep): Close to the Cutoffs
- Emperador (EMI SP) currently is just outside the inclusion zone for the FTSE Straits Times Index (STI) (STI INDEX) and a small price bump is needed for index inclusion.
- If Emperador (EMI SP) is added to the index, Comfortdelgro Corp (CD SP) could be deleted as the lowest ranked index constituent.
- Emperador (EMP PM) is a high probability inclusion to the FTSE All-World Index at the September SAIR and the stock could move higher over the next couple of weeks.
Betagro Pre-IPO – The Positives – Vertically Integrated and Weathered COVID Well
- Betagro Group (1737144D TB) is looking to raise about US$600m in its upcoming Thailand IPO.
- Betagro is an integrated agro-industrial and food business in Thailand. The firm’s products cover all stages of the food value chain including upstream, midstream and downstream.
- Betagro operates a vertically integrated model with its own production and processing capabilities. Furthermore, it utilizes a range of distribution channels for both domestic and international sales.
Denso (6902) | No Reason to Be Uber-Bearish
- Denso started the fiscal year with an overly optimistic view of Toyota production – it is now too bearish
- Chip shortages and supply disruptions are starting to ease, making it easier for automakers to meet end demand
- We are bullish on the stock as we believe that Denso’s earnings will beat lowered guidance and valuations are at the bottom of the range
Shakey’s Pizza: Q2 2022 Recovery Far Better Than Expectations, Management Guidance Extremely Bullish
- Shakey’s Pizza (PIZZA PM) reported a strong SWS of 77% YoY in H1 and 121% YoY in Q2 2022. Excluding Potato Corner (PC), recovery tracked >90% of 2019 levels.
- The management guided that ex-PC recovery was over 100% in May and July, and numbers will improve with a resurgence in people at work, resulting in an upside to SWS.
- We see margin upside as dine-in numbers are set to increase in H2 and the company beds down its PC acquisition; the stock trades at 16x/10x FY22/FY23e.
Phu Nhuan Jewelry JSC (PNJ VN) – Update – Remaining positive in 2H22
Analyst meeting update We participated in the analyst meeting of Phu Nhuan Jewelry JSC (PNJ) about its 1H22 business update and the board’s viewpoints on PNJ’s prospects in 2H22: ▪ PNJ’s business results recovered for the third consecutive quarter since 3Q21, with improving same-store sales growth, as: 1) Vietnam’s consumption continued to rally in 1H22, as Vietnam returned to new normalcy; and 2) PNJ’s marketing programs have served as effective promotion.
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.
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