In today’s briefing:
- AVTL: Storage Platform Poised for Growth Amid Demand Visibility
- Tongcheng Travel (780 HK): Regaining Momentum, Better Choice than Trip.com
- Fabrinet – Fabrinet: The Rise of 1.6T Datacom Products & 4 Solid Growth Catalysts!
- Guangdong Investment (270): Stable Diversifier and USD 1.3 Bn FCF
- Ashok Leyland(AL IN)-Robust Growth ; Value Unlocking from Subsidiary Ahead
- NALCO (NACL IN): Record FY25 Profit; Alumina-Led Fall Likely Priced In, Execution Remains Key Risk
- Jade Group: Magaseek and Locondo Stall
- Empire Energy Group Ltd – All that’s remaining is the gas rate
AVTL: Storage Platform Poised for Growth Amid Demand Visibility
- Aegis Vopak Terminals is raising Rs2,800 crore via a fresh issue to repay debt and fund expansion, marking its transition into a listed infrastructure platform.
- LPG capacity is set to triple by FY26, with new industrial terminals planned under a Rs4,500 crore capex; revenue and EBITDA are projected to grow 20–25% CAGR through FY27.
- Key risks include high dependence on group entities for revenue, delayed utilization of new capacity, and exposure to regulatory or energy demand shifts affecting LPG and chemical flows.
Tongcheng Travel (780 HK): Regaining Momentum, Better Choice than Trip.com
- Tongcheng Travel Holdings (780 HK)‘s 1Q25 adjusted net profit surged 41.1%, suggesting an accelerating momentum. It should continue to outperform Trip.com Group (9961 HK).
- Good cost management, even as revenue rose 13.2%, has enhanced adjusted EBITDA margin by 5.3pp YoY – this trend will sustain.
- More visa convenience will boost inbound and outbound travel. At end-1Q25, net cash equals 14% of market capitalisation, and it can still generate ROE of 12-15%.
Fabrinet – Fabrinet: The Rise of 1.6T Datacom Products & 4 Solid Growth Catalysts!
- Fabrinet has reported strong results for the third quarter of fiscal year 2025, which ended on March 28, 2025.
- The company achieved a revenue of $872 million, surpassing its guidance range, and non-GAAP earnings per share stood at $2.52, also above expectations.
- This performance highlights Fabrinet’s robust execution capabilities, especially in the optical communications sector where telecom revenue demonstrated significant growth, counterbalancing a predicted decline in datacom revenue.
Guangdong Investment (270): Stable Diversifier and USD 1.3 Bn FCF
- Guangdong Investment (270 HK) exposure in water distribution provides the much-needed stability (low volatility). While its Real Estate exposure could provide some growth.
- With low valuation and healthy dividend yield, owning GDI during the tumultuous period will provide healthy diversification for your portfolio and a hedge during Trump’ tariff period.
- The water sector is undervalued, mainly due to the characteristically low growth, but free cash flow is generally quite strong yet undervalued. GDI generated USD 1.3 bn Free cash flow.
Ashok Leyland(AL IN)-Robust Growth ; Value Unlocking from Subsidiary Ahead
- Ashok Leyland (AL IN) posted 38% YoY PAT growth in Q4, driven by cost efficiency, premium product mix, and strong EBITDA margin improvement.
- HLF IPO and Switch India’s PAT target for FY26 positions for significant value unlocking and improved subsidiary contribution.
- CV demand, export momentum, and alt-fuel investments support a strong FY26 outlook, with valuations supported by improving profitability and resilient balance sheet. 4o
NALCO (NACL IN): Record FY25 Profit; Alumina-Led Fall Likely Priced In, Execution Remains Key Risk
- NALCO has guided for alumina realizations around $400/t in FY26, with earnings further impacted by delays in ramp-up of its 1 MTPA alumina expansion project.
- Q4 FY25 results were strong, but earnings outlook has weakened significantly with the steep drop in alumina prices.
- Valuations appear inexpensive on FY27 earnings at 5x EV/EBITDA, however peristent delays in capacity rampup is concerning.
Jade Group: Magaseek and Locondo Stall
- Jade Group (3558 JP) made some wild promises about its potential to grow its online fashion mall business last year when it acquired Magaseek.
- But recent results suggest what many feared: building scale without due regard for the quality of the assets acquired does not an empire make.
- With Magaseek contracting and e-commerce overall showing muted growth, Jade Group´s capacity to escape the shadow of the big three looks limited.
Empire Energy Group Ltd – All that’s remaining is the gas rate
- Empire Energy Group Limited (ASX:EEG) is a gas development company, with onshore Northern Territory (NT) gas exploration and development assets.
- EEG has the largest tenement position in the highly prospective Greater McArthur Basin, which includes the Beetaloo Sub-basin.
- Having successfully completed a $27.75m equity capital raise, with an additional $3.25m subject to shareholder approval and SPP take-up, the company should be funded through to first gas from the Carpentaria Pilot Project by around end-2025.
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