In today’s briefing:
- Samsung C&T: Entrance into the Global Aerospace Industry [Watch What They Do, Not What They Say]
- Metaplanet (3350) | Japan’s Bitcoin Rocket
- Tencent/Netease: None Gets Approvals for Domestic Games
- Canara Bank (CBK IN) Vs. Punjab National Bank (PNB IN): A Relative Value Opportunity
- IndusInd Bank Crisis: More Discrepancies, Losses, Suspected Fraud
- [Sea Limited (SE US, SELL, TP US$134) Rating Change]: Three Has Been a Charm…DG to SELL
- [Tencent (700 HK, BUY, TP HK$584) TP Change]: C1Q25 Review: Outperformance in Low Game Season
- Godawari Power: Expansion Led Growth Ahead Despite Near-Term Delays
- ABDL Q4 Update: A Transformational Year with Record Performance and Premiumization Drive
- Update on Innovent Biologics (1801 HK)
Samsung C&T: Entrance into the Global Aerospace Industry [Watch What They Do, Not What They Say]
- On 20 May, Samsung C&T (028260 KS) made an important announcement that it started research and development on a space project that includes a rocket launch facility construction.
- This is a signal that the Samsung Group may be interested in expanding in the global defense/aerospace industry once again.
- The recent news flow on Samsung’s expansion into aerospace business including Samsung C&T’s development of rocket launch facility is likely to positively impact Samsung C&T’s share price.
Metaplanet (3350) | Japan’s Bitcoin Rocket
- Metaplanet’s secret weapon? Moving-strike warrants that raise equity into strength—fueling BTC buys while sidestepping the deep discounts typical of Japan’s small-cap raises.
- Forget buybacks. Metaplanet is redefining shareholder value by issuing stock, not retiring it—turning dilution into accretion via Bitcoin per-share growth.
- A 4.6x mNAV premium gives Metaplanet unmatched BTC buying power—creating a capital flywheel that most traditional treasuries can only envy.
Tencent/Netease: None Gets Approvals for Domestic Games
- China announced game approval for the May batch. The number of games approved remained at a higher level than 2023.
- The pace of China’s game approval appears to have accelerated to the same level as pre-tightening.
- Of the companies that we are monitoring, none of them got approval for domestic games but a handful approvals of imported games save their day.
Canara Bank (CBK IN) Vs. Punjab National Bank (PNB IN): A Relative Value Opportunity
- The Canara Bank (CBK IN) vs. Punjab National Bank (PNB IN) price-ratio has deviated more than two standard deviations from its one-year average, presenting a potential relative value opportunity.
- The relative value opportunity has a target return of approximately 6% and can be implemented through stocks, derivatives, or as relative over-/underweights in a long only context.
- Trade setup, statistical properties, factor exposure, risk management strategies, and key events are discussed.
IndusInd Bank Crisis: More Discrepancies, Losses, Suspected Fraud
- Indusind Bank (IIB IN) faces significant accounting discrepancies, leadership resignations, and suspicions of fraud, with the bank announcing a net loss of Rs 2,329Crs in Q4 FY25 due to this.
- The escalating situation, involving fraud suspicions and leadership resignations, raises concerns about the bank’s internal controls, financial reporting, and governance.
- IndusInd Bank’s path forward hinges on transparent investigations, fixing internal control systems, and restoring leadership accountability. Investors should closely monitor the regulatory response and management’s corrective actions.
[Sea Limited (SE US, SELL, TP US$134) Rating Change]: Three Has Been a Charm…DG to SELL
- SEA reported C1Q25 top line, non-GAAP operating profit and GAAP net income (3.7%), 10% and 8.4% vs. our estimates and 1.4%, (16%) and 31% vs. consensus.
- SEA has weathered the return of TikTok Shop better than rivals three quarters in a roll, but we see its e-commerce business vulnerable to future attacks.
- We raised TP from US$75 to US$134 but DG to a SELL on rich valuation
[Tencent (700 HK, BUY, TP HK$584) TP Change]: C1Q25 Review: Outperformance in Low Game Season
- Tencent reported C1Q25 rev., IFRS op. profit, and IFRS net inc, in-line, (3.1%), (5.6%) vs. our est. and 3.8%, (2.3%), (4.9%) vs. cons.
- As predicted, Tencent maintained a transitional game quarter well, going forward new game launches shall fill the pipeline while recovering consumption helping on advertising and fintech.
- We raised our TP to HK$584 for better outlook and place Tencent back to the TOP BUY list. Our TP implies 21x PE.
Godawari Power: Expansion Led Growth Ahead Despite Near-Term Delays
- Iron ore mining capacity expansion from 2.35 MTPA to 6 MTPA and pellet capacity from 2.7 MTPA to 4.7 MTPA expected by 3QFY26 with full ramp-up by Q4 FY26.
- 4QFY25 consolidated revenues of ₹1,468 crore, with EBITDA at ₹318 crore and PAT at ₹221 crore, reflecting a slight decline year-on-year due to lower realizations.
- Valuations appear reasonable driven by steady earnings growth backed by capacity addition, mine expansion and operational efficiencies.
ABDL Q4 Update: A Transformational Year with Record Performance and Premiumization Drive
- Allied Blenders & Distillers (9844250Z IN)‘s FY25 marked a pivotal shift with record profitability, fueled by premiumization, cost efficiency, and expansion into international markets, notably through its luxury portfolio.
- Record profitability and a strengthened balance sheet position ABDL for aggressive expansion in the high-margin super-premium and luxury segments, supported by strategic CapEx.
- ABD’s transformation into a premium-focused brand with significant global expansion potential, particularly in luxury segments, positions it for sustained growth and higher margins.
Update on Innovent Biologics (1801 HK)
- Strong results reflect progress of existing approved drugs including key oncology drugs.
- Mazdutide is set to be released in 2025, and the company is currently making plans for the release.
- Innovent Biologics continues to add to its drug development portfolio.
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