In today’s briefing:
- ITMG Q3 2022: 25% FY22 Dividend Yield 40% of Mkt Cap in Cash, Coal Stronger For Longer
- China Funeral Industry – Investment Opportunity with Both Alpha and Beta Superposition
- Keepers Holdings: Highlights From The Q3 2022 Call / A Multibagger In The Making
- GoTo: Long-Term Profitability Is Worrying
- Kuaishou (1024 HK): 3Q22, Promising Live Streaming, Better Margin, 39% Upside
- ZTO Express (2057 HK/ZTO US): Solid Upward Momentum Stays Intact
- Laser Photonics Inc. – Investment Thesis
- Organicell Regenerative Medicine Inc. – Investment Thesis
- Save Foods Inc. – Investment Thesis, Key Drivers, Financial & Price Forecasts, DCF Valuation 11/22
- Sharps Technology – Investment Thesis, Key Drivers, Financial & Price Forecasts, DCF Valuation 11/22
ITMG Q3 2022: 25% FY22 Dividend Yield 40% of Mkt Cap in Cash, Coal Stronger For Longer
- Coal stronger for longer is making Indo Tambangraya Megah (ITMG IJ) a significant value investment with 40% of the market cap in cash and 2.5x PE FY22 after going ex-dividend.
- The company continues to churn out 6-7% of the market cap in cash every month, with coal prices at Newcastle over 300$/ton (current spot at 350$/ton).
- Paying out >70% of its profits, the company trades at a 25% dividend yield at the very least, with a normalized yield of 10% at a 130-150$/ton coal price.
China Funeral Industry – Investment Opportunity with Both Alpha and Beta Superposition
- China funeral industry has large growth potential.The total market scale would be about RMB400 billion if based on annual death toll of 10 million and per capita expenditure of RMB40,000.
- Information asymmetry weakens the bargaining power of buyers. Administrative barriers raise the threshold of market access and weaken competition. So, related companies usually have high profitability and return on capital.
- Changes in population structure would have a negative impact on most consumer goods, but demand of funeral industry would continue to rise. Investors would have both alpha and beta superposition.
Keepers Holdings: Highlights From The Q3 2022 Call / A Multibagger In The Making
- The Keepers Holdings, Inc. (KEEPR PM) trades at 7.1x/5.6x FY22e/FY23e on revised numbers (including earnings from the W&H acquisition) and has 10% of its market cap in net cash.
- The outlook from the conference call was bullish, and the Q4 2022 revenue growth trend is expected to be similar to the 9M2022 (34% YoY) and future structural teens growth.
- At a 300 mn USD market cap, you get a virtual monopoly (>70% marketshare by volume) of the imported spirits business with sole distributorship of the most recognizable brands.
GoTo: Long-Term Profitability Is Worrying
- GoTo (GOTO IJ) reported 3Q2022 results on Monday. Gross revenue increased 30.4% YoY to IDR5.9trn while adjusted EBITDA (losses) dropped to 81.3% of net revenues vs 289% in 3Q2021.
- There has been notable improvement in the company’s earnings (decline in losses in particular) driven by huge cost cuts on promotions which helped reduce losses.
- However, cutting down promotions/marketing costs could lead to drop in top line growth and market share.
Kuaishou (1024 HK): 3Q22, Promising Live Streaming, Better Margin, 39% Upside
- There are three positive signs in online marketing despite the business slowed down.
- For living streaming, both active user base and time spent grew rapidly.
- The operating margin improved significantly to -13% in 3Q22 from -37% in 3Q21.
ZTO Express (2057 HK/ZTO US): Solid Upward Momentum Stays Intact
- ZTO Express Cayman Inc (2057 HK)‘s 63.1% surge in 3Q22 adjusted net profit demonstrated its ability to thrive even amid the challenging operating environment.
- It is positive on FY23 outlook and believes industry volume can return to double-digit growth. ZTO is confident of market share gain, better cost management and stable pricing.
- We think its premium valuations are highly justified by strong cash generating ability. The increase of US$500m and lengthening of one year in share repurchase are very welcomed.
Laser Photonics Inc. – Investment Thesis
- This is our first report on Laser Photonics and we look to provide a detailed account of the various drivers that will be responsible for the company’s growth in the coming years.
- The revenues of Laser Photonics have more than doubled in the last two years.
- We believe that there is a good chance the company’s offering may become universally accepted in the years to come.
Organicell Regenerative Medicine Inc. – Investment Thesis
- This is our first report on Organicell and we look to provide a detailed account of the various drivers that will be responsible for the company’s growth in the coming years.
- Organicell’s drug candidates’ utilization of extracellular vesicles and perinatal-derived nanoparticles, represent the technological revolution of regenerative biologic drug treatments.
- Overall, we believe that Organicell has phenomenal growth prospects and is an excellent investment prospect.
Save Foods Inc. – Investment Thesis, Key Drivers, Financial & Price Forecasts, DCF Valuation 11/22
- This is our first report on Save Foods and we look to provide a detailed account of the various drivers that will be responsible for the company’s growth in the coming years.
- Despite catering to a sizable addressable market, Save Foods is currently trading at valuation ratios far lower than its competitors.
- Baptista Research looks to evaluate the different factors that could influence Save Foods’ price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology to determine a suitable price for the company’s stock.
Sharps Technology – Investment Thesis, Key Drivers, Financial & Price Forecasts, DCF Valuation 11/22
- This is our first report on Sharps Technology and we look to provide a detailed account of the various drivers that will be responsible for the company’s growth in the coming years.
- As the company starts reporting revenues in 2023, Sharps is expected to see its stock fly.
- With the Nephron transaction and income generation from the Hungarian facility, this is anticipated to start reporting a positive top-line starting in Q1 2023.
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