In today’s briefing:
- SJM Holdings Ltd: Large Refi of Debt Buys Time for Grand Lisboa Palace to Prove Its US$3b Cost
- China Healthcare Weekly (May.26)- 9th National VBP, China’s Strength in ADC Field, Ovctek, Eyebright
- RPPL: Q4 Weaker than Expected But On Track for Strong Earnings Growth Through FY25
- Textron Inc.: Major Contracts With The U.S
- International Paper Company: How Long Will The Struggles Continue? – Key Drivers
- Cloudflare Inc.: Does It Have A Sustainable Competitive Advantage? – Key Drivers
- First Solar Inc.: The Evolar AB Acquisition May Be Small But Is Key For Future Growth – Major Drivers
SJM Holdings Ltd: Large Refi of Debt Buys Time for Grand Lisboa Palace to Prove Its US$3b Cost
- Legacy concessionaire SJM needs a strong performance from its Cotai flagship to create positive cash flow to service debt and keep gains in mass market share.
- The company has closed 5 satellite casinos, a move that indicates a shift in strategic goals aimed at building out from its two IRs.
- Thus far, SJM has not fully participated in the early Macau recovery cycle to make it a BUY but it needs to build on its 81% of mass revenue.
China Healthcare Weekly (May.26)- 9th National VBP, China’s Strength in ADC Field, Ovctek, Eyebright
- The 9th national VBP is drawing near. As all drugs under national/provincial VBP are scheduled to be executed before 2025/12/31, there should be new policies in 2026 and beyond.
- The capabilities of Chinese pharmaceutical companies in ADC field have at least stepped onto a platform to compete with international giants, which is clearly more progressive than during PD-1 era.
- We analyzed key points of Ovctek. Its investment logic has changed and centralized procurement will break investors’ expectations for Ovctek’s future performance growth. Valuation may continue to be under pressure.
RPPL: Q4 Weaker than Expected But On Track for Strong Earnings Growth Through FY25
- Rajshree Polypack’s (RPPL’s) Q4FY23 came in weaker than expected on both the sales volume and the margins front. Higher depreciation and interest costs led by capex further dampened the profitability.
- However, RPPL is executing well on its revenue growth targets led by regular capex led investments. It is on track to do INR 450cr revenues by FY25.
- RPPL has potential to post a PAT of INR 30cr+ by FY25, suggesting that RPPL is available at around 6x P/E on a base of FY25E PAT.
Textron Inc.: Major Contracts With The U.S
- It was a mixed first quarter for Textron as the company failed to meet the revenue expectations of Wall Street given the lower revenues observed at Bell.
- Despite the Aviation, Industrial, and Systems segments offsetting the decline, Textron’s revenues were below expectations though it did manage an earnings beat.
- Textron Aviation received an initial award on the US Navy Multi-engine Training System contract, and fleet utilization remained strong, contributing to aftermarket revenue growth.
International Paper Company: How Long Will The Struggles Continue? – Key Drivers
- International Paper had a challenging start to 2023 as its revenue was slightly down though still above analyst expectations.
- International Paper reported $65 million of year-over-year incremental earnings benefits from building better IP initiatives, but lower prices across their portfolio and weaker demand impacted margins.
- Despite these challenges, International Paper remained focused on their key priorities of taking care of employees, customers and maximizing shareholder value.
Cloudflare Inc.: Does It Have A Sustainable Competitive Advantage? – Key Drivers
- Q1 was a challenging quarter for Cloudflare as the company failed to meet the revenue expectations of Wall Street as a result of various the headwinds.
- However, macroeconomic uncertainty lengthened sales cycles and affected close rates, resulting in a back-end weighted quarter.
- Despite these challenges, Cloudflare remains resilient and profitable, with an operating profit of $19.4 million and generating $13.9 million of free cash flow.
First Solar Inc.: The Evolar AB Acquisition May Be Small But Is Key For Future Growth – Major Drivers
- First Solar had a very disappointing result in the last quarter as it failed to meet the revenue expectations as well as the earnings expectations of Wall Street.
- With their CadTel technology, vertically integrated manufacturing process, and commitment to Responsible Solar, First Solar could stand out from competitors and maintains long-term competitiveness.
- The recent acquisition of the European perovskite company, Evolar AB was also a part of the expansion strategy.
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