In today’s briefing:
- Daihatsu Diesel’s (6023) Big Buyback and Quasi Change of Control
- Sigma Healthcare (SIG AU): Shareholders Approves CWG Merger
- CyberAgent 1Q: Media Business Continues to Show Solid Growth
- Makita (6586) | Powering Up
- Jafco Co Ltd (8595 JP): Q3 FY03/25 flash update
- [Earnings Review] Halliburton Q4 Performance Impacted by North America Weakness
- Jafco- Continues to Perform
- Thai Banks 4Q24 Screener; Krung Thai (KTB TB) Is in the Early Re-Rating Stages
- Did Hynix Meet Expectations ?
- [Pre Earnings Options Flash] Chevron’s Options Activity Reflects Market Caution Ahead of Q4 Earnings
Daihatsu Diesel’s (6023) Big Buyback and Quasi Change of Control
- Yesterday, Daihatsu Diesel Mfg (6023 JP) announced that it would buy back shares in a Tender Offer and that its controlling “parent” would also sell shares to a private company.
- The accretion is significant, and the shareholder structure changes significantly. It is not quite an Exedy-like situation though. The register changes but it doesn’t clear.
- But the backdrop is considerably different than the MTMP, and that means this smallcap is worth a closer look.
Sigma Healthcare (SIG AU): Shareholders Approves CWG Merger
- Sigma Healthcare (SIG AU) announced that more than 99% of the shareholders cast vote in favor of the merger with CWG. The merger now remains subject to court approval.
- The court hearing is scheduled on February 3, 2025. If the Court approves the merger, it is expected that implementation of the merger scheme will occur on February 12, 2025.
- CWG continued healthy performance, with double-digit like-for-like retail network sales growth and 400bps EBIT margin expansion in H1FY25. We are bullish on the long-term growth prospect of the merged entity.
CyberAgent 1Q: Media Business Continues to Show Solid Growth
- CyberAgent Inc (4751 JP) reported 1QFY09/2025 results today. 1Q revenues beat consensus but reported OP fell below consensus due to weak gaming margins.
- The key highlight of the quarter was the strong results of the Media business whose revenues saw strong growth with strengthened profitability.
- Though game earnings were slightly weak during 1Q, we would not be too worried as app analysis data reveals that the segment is off to a strong start in 2QFY09/2025.
Makita (6586) | Powering Up
- Margin recovery drives stock higher – Operating profit beat estimates, margins rebounded to 13.6%, and forex gains provided a boost despite weak sales.
- European rebound offers upside – Makita, with 20% market share, is set to benefit from a forecasted 2025 construction sector recovery after two years of contraction.
- Valuation remains attractive – With improving ROIC, inventory normalisation, and steady growth prospects, a DCF model suggests an 18% upside for the stock.
Jafco Co Ltd (8595 JP): Q3 FY03/25 flash update
- Revenue increased by 73.9% YoY to JPY25.4bn, with operating profit rising 149.6% YoY to JPY11.2bn.
- Capital gains reached JPY10.9bn, with JPY7.6bn from IPO-related share sales and JPY3.4bn from unlisted shares.
- Total investment executed in cumulative Q3 FY03/25 was JPY30.6bn, with JPY14.5bn for domestic VC investments.
[Earnings Review] Halliburton Q4 Performance Impacted by North America Weakness
- Halliburton’s Q4 revenue fell by 2.3% YoY and missed estimates by 0.4% due to weakness in North America. However, its EPS beat estimates by 0.7%.
- Completion & Production revenue fell 4.2% YoY due to reduced activity in North and Latin America. Drilling & Evaluation revenue grew 0.4% YoY driven by growth in the Middle East.
- In Q4, Halliburton repurchased USD 309 million in stock and generated USD 1.1 billion in free cash flow. Full-year repurchases totalled USD 1.6 billion.
Jafco- Continues to Perform
- The company has had good 2024 absolute and relative to Topix performance.
- Will Jafco continue this winning streak into 2025 and beyond?
- Results for the quarter ending December 2024 are encouraging with exit multiples increasing
Thai Banks 4Q24 Screener; Krung Thai (KTB TB) Is in the Early Re-Rating Stages
- Krung Thai remains our core value pick among the Thai banks driving its solid post-provision profitability higher, delivering double-digit ROE, a sound balance sheet and attractive PBV and PE ratios
- Krung Thai has the highest core capital ratios as well as delivering the best ROE of the peer group, along with one of the best efficiency ratios versus its peers
- Its share price performance has been strong, yet we believe that this positive momentum should continue as Krung Thai still has scope to narrow the valuation gap with SCBx
Did Hynix Meet Expectations ?
- As we hit Chinese New Year break, we want to examine if Hynix’s earnings and investor call met investor expectations
- 6 key questions going in and where we are post SK Hynix (000660 KS) reporting and before Samsung Electronics (005930 KS) reports early February
- The consensus is that the key questions were not answered. Well, not all answered and some remains to be seen.
[Pre Earnings Options Flash] Chevron’s Options Activity Reflects Market Caution Ahead of Q4 Earnings
- Chevron to report its Q4 earnings on 31/Jan, with revenue and EPS projected to fall sequentially and annually. For 2024 also, revenue and EPS are expected to drop.
- As of 29/Jan, Chevron’s implied volatility (IV) stands at 21.12%, with an IV rank of 43.95% and an IV percentile of 75%.
- Chevron’s OI by strike for the 31/ Jan expiry shows calls concentrated at strikes 162.5, 165, and 167.5, while puts are prominent at strikes of 150, 152.5, and 155.
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