Independent research on the U.S. markets, Baptista Research

Baptista Research

Independent research on the U.S. markets

Baptista Research is an independent financial research house focused on the U.S. markets. We provide equity research as well as credit research reports on the top-listed U.S. companies with most of our focus on technology, consumer goods and services, automobiles, industrials, oil and gas, pharma, and healthcare. Our research has served more than 3000 institutional investors including mutual funds, hedge funds, banks, family offices, and various buy-side firms. We operate a research subscription service where institutions, as well as retail investors, can have priority access to all our research. We also have a wide distribution of our research reports across some of the top global financial platforms. Apart from equity research and credit research, we also provide advisory services with respect to mergers & acquisitions (M&A), private equity/ venture capital fundraising, valuation reports, and investment management services for corporates.
Baptista Research is owned and managed by Ishan Majumdar, an ex-Venture Capitalist/ Investment Banker, a Chartered Accountant, and a Masters’ degree holder in Management from HEC Paris. Ishan has nearly a decade of experience in Mergers and Acquisitions, Leveraged Buyouts (LBOs), Venture Capital Investing, Corporate Strategy, and Valuation in front-office roles at the likes of BNP Paribas CIB, Credit Agricole CIB, Groupe Danone, and TIW Private Equity. He has worked on and closed multiple acquisition deals, leveraged buyouts, and start-up investment transactions.

Equity Bottom-Up

<ul><li>The AES Corporation presented its second quarter 2024 earnings with solid results that showcased significant strategic progress and financial achievements.</li><li>The quarter saw AES generating an adjusted EBITDA with tax attributes of $843 million and an adjusted EPS of $0.38, aligning with the company's broader 2024 financial objectives.</li><li>The performance reflected well-executed expansions, particularly in engagements with large technology customers and robust moves into renewable energy platforms, underlining AES's adaptability and strategic foresight in the energy sector.</li></ul>

The AES Corporation presented its second quarter 2024 earnings with solid results that showcased significant strategic progress and financial achievements.The quarter saw AES generating an adjusted EBITDA with tax attributes of $843 million and an adjusted EPS of $0.38, aligning with the company's broader 2024 financial objectives.The performance reflected well-executed expansions, particularly in engagements with large technology customers and robust moves into renewable energy platforms, underlining AES's adaptability and strategic foresight in the energy sector.

The AES Corporation: Geographical Diversification & Investment Shift Driving Our 'Buy' Rating? - Major Drivers

<ul><li>AES Corporation held a financial review for the first quarter of 2024, wherein they discussed the company's performance and future plans extensively.</li><li>The company announced adjusted EBITDA with tax attributes of $863 million, adjusted EBITDA of $635 million, and adjusted earnings per share (EPS) at $0.50.</li><li>These results show AES Corporation's ability to meet its targeted outcomes and reflect resilience amidst prevailing economic conditions like high interest rates and inflation.</li></ul>

AES Corporation held a financial review for the first quarter of 2024, wherein they discussed the company's performance and future plans extensively.The company announced adjusted EBITDA with tax attributes of $863 million, adjusted EBITDA of $635 million, and adjusted earnings per share (EPS) at $0.50.These results show AES Corporation's ability to meet its targeted outcomes and reflect resilience amidst prevailing economic conditions like high interest rates and inflation.

The AES Corporation: Initiation of Coverage - Does It Have A Sustainable Competitive Moat? - Major Drivers

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>Late Friday, S&amp;PDJI announced <a href="https://www.smartkarma.com/entities/nvidia-corp" target="_blank" data-smartkarma-citation="entities:5891:1" rel="noopener">NVIDIA Corp (NVDA US)</a> and <a href="https://www.smartkarma.com/entities/sherwin-williams-co-the" target="_blank" data-smartkarma-citation="entities:15539:1" rel="noopener">Sherwin Williams Co (SHW US)</a> would replace <a href="https://www.smartkarma.com/entities/intel-corp" target="_blank" data-smartkarma-citation="entities:16764:1" rel="noopener">Intel Corp (INTC US)</a> and <a href="https://www.smartkarma.com/entities/dow-inc" target="_blank" data-smartkarma-citation="entities:19107:1" rel="noopener">Dow (DOW US)</a> in the Dow Jones Industrial Avg.</li>
<li>This was done to "ensure a more representative exposure to the semiconductors industry and materials sector, respectively." This will be effective of 7 November close; only four days to trade. </li>
<li>The details merit a closer look. Calculating how much tracks the DJIA should be "easy" but I have questions. That said, <a href="https://www.smartkarma.com/entities/sherwin-williams-co-the" target="_blank" data-smartkarma-citation="entities:15539:1" rel="noopener">Sherwin Williams Co (SHW US)</a> could get exciting.</li>
</ul>


Late Friday, S&amp;PDJI announced NVIDIA Corp (NVDA US) and Sherwin Williams Co (SHW US) would replace Intel Corp (INTC US) and Dow (DOW US) in the Dow Jones Industrial Avg.
This was done to "ensure a more representative exposure to the semiconductors industry and materials sector, respectively." This will be effective of 7 November close; only four days to trade. 
The details merit a closer look. Calculating how much tracks the DJIA should be "easy" but I have questions. That said, Sherwin Williams Co (SHW US) could get exciting.


Dow Jones Industrial Avg Nov24 Rebalance - Sherwin Williams (SHW) Could Get Jiggy

Providing investors with a balanced perspective, Massif Capital

Massif Capital Research

Providing investors with a balanced perspective

Massif Capital

Research focused on providing investors with a balanced perspective on the environmental and economic realities of achieving a carbon-neutral economy for businesses within the Energy, Basic Materials and Industrial industries.

The Massif Capital Real Asset Strategy is a global long/short equity strategy built around bottom-up stock picking. We are focused on creating a portfolio of businesses from within the Energy, Basic Materials and Industrial sectors that balance the environmental and economic realities of achieving a carbon-neutral economy.

Macroeconomics

<div><ul style="list-style-type: disc;"><li>Outperformance of Metals and Mining sector: The fund's gold, copper, and lithium investments outperformed their respective industry performance.</li><li>Interesting trends in the gold market: We examine gold prices and propose a shift from wealth-driven to fear-driven consumption patterns. We also identify several events that could reduce fear and slow gold price momentum.</li><li>The evolving situation at OCI: The fund holds a 6% position in OCI, a global fertilizer business that announced two significant asset sales in December 2023, from which we expect to receive a substantial capital return in 2024.</li></ul></div>

Outperformance of Metals and Mining sector: The fund's gold, copper, and lithium investments outperformed their respective industry performance.Interesting trends in the gold market: We examine gold prices and propose a shift from wealth-driven to fear-driven consumption patterns. We also identify several events that could reduce fear and slow gold price momentum.The evolving situation at OCI: The fund holds a 6% position in OCI, a global fertilizer business that announced two significant asset sales in December 2023, from which we expect to receive a substantial capital return in 2024.

SGX Market Strategist, Equity & Fixed Income, Singapore Exchange Ltd (SGX)

Geoff Howie

SGX Market Strategist, Equity & Fixed Income

Asia’s leading multi-asset exchange

Singapore Exchange Ltd (SGX)

Singapore Exchange is Asia’s leading and trusted market infrastructure, facilitating the exchange of capital and ideas to create value for people, businesses and economies. As a multi-asset exchange operating equity, fixed income and derivatives markets to the highest regulatory standards, SGX is a vertically integrated business that provides listing, trading, clearing, settlement, depository and data services.

With about 40% of listed companies and over 80% of listed bonds originating outside of Singapore as well as established linkages across the region and in Europe, SGX is Asia’s most international and connected exchange. Offering a full suite of derivatives products across Asian equity indices, commodities and currencies, SGX is the world’s most liquid international market for the benchmark equity indices of China, India, Japan and ASEAN.

As Asia’s pioneering central counterparty, SGX is globally recognised for its risk management and clearing capabilities, and was one of the first globally to adopt the Principles for Financial Market Infrastructure.

Headquartered in AAA-rated Singapore, SGX has over 800 employees including offices in Beijing, Chicago, Hong Kong, London, New York, Mumbai, San Francisco, Shanghai and Tokyo.

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 <img src='https://api2.sgx.com/sites/default/files/2021-11/Capture_27.PNG' alt='Daiwa house logistics' />
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 <div class='content-caption'>Daiwa house logistics</div>
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Daiwa House Logistics Trust (DHLT), which has an initial portfolio (IPO Portfolio) of 14 logistics properties in Japan with an aggregate appraised value of approximately ¥80,570.0 million (S$952.9 million), made its debut on the Singapore Exchange last Friday (Nov 26). 
The initial public offer (IPO) attracted strong support from institutional, corporate, and retail investors.

The placement tranche was 4.9 times subscribed while the public tranche was 9.5 times subscribed. 
In addition, cornerstone investors, including Bangkok Life Assurance Public Co, Credit Suisse, DBS, DWS Investments Australia, Kuang Ming Investments, Nomura Singapore, Hazelview Securities, and Metro ARC Investments, have subscribed for an aggregate of 336 million units, which represents 49.8 per cent of the total number of outstanding units at the IPO.

Despite having an IPO portfolio of pure Japan assets, DHLT is established with the investment strategy of principally investing in a portfolio of income-producing logistics and industrial real estate assets located across Asia.

The Reit believes that there is strong growth potential for logistics and industrial assets throughout South-east Asia, where its sponsor, Daiwa House Industry, has completed 9 logistics assets across the region and has 5 logistics facility projects under development across Vietnam, Indonesia and Malaysia as at Sep 30, 2021. 
DHLT offers a diversified initial IPO portfolio of 14 assets which are spread across various regions in prime industrial locations in Japan.

The Reit manager believes that this diversified portfolio will minimise concentration risk and allow it to take advantage of markets which have traditionally been overlooked by existing Japanese-listed and private Reits.

The 14 properties are closely interlinked with transportation and shipping networks, which is attractive for DHLT's large third-party logistics (3PL) and e-commerce tenant base.

The Reit manager has strong commitment to environment, social and governance (ESG) principles, and noted that approximately 95.7 per cent of the IPO portfolio by NLA is certified green by the Development Bank of Japan (DBJ) Green Building Certification Programme, a rating system in Japan which evaluates and measures the environmental and social awareness characteristics of real estate properties.

As at Oct 1, 2021, the IPO portfolio's occupancy rate is 96.3 per cent with 26 tenants.

All of the properties are fully occupied, apart from DPL Sapparo Higashi Kariki and DPL Koriyama.

The aggregate weighted average lease expiry (WALE) for the IPO portfolio by occupied net lettable area (NLA) is 7.2 years as at Jun 30, 2021.

According to the IPO prospectus, the forecasted annualised distribution yield for the period between Oct 1, 2021 and Dec 31, 2021 is 6.3 per cent while the projected distribution yield for financial year 2022 is 6.5 per cent, representing respective spreads of 625 bps and 645 bps compared to the 10-year Japan government bond yield of 0.05 per cent as at Oct 1, 2021.

Following the listing of DHLT, the Singapore Reit and property trust sector now consists of 43 listed trusts of which 9 are industrial Reits (including DHLT).

The average distribution yield of the 9 industrial Reits is 6.1 per cent, including DHLT's forecasted annualised yield of 6.3 per cent for 2021. REIT Watch is a weekly column on The Business Times,<a href="https://www.businesstimes.com.sg/companies-markets/logistics-s-reit-with-pure-japan-assets-lists-on-sgx"> read </a>the original version.
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    Daiwa house logistics


Daiwa House Logistics Trust (DHLT), which has an initial portfolio (IPO Portfolio) of 14 logistics properties in Japan with an aggregate appraised value of approximately ¥80,570.0 million (S$952.9 million), made its debut on the Singapore Exchange last Friday (Nov 26).  
The initial public offer (IPO) attracted strong support from institutional, corporate, and retail investors.

The placement tranche was 4.9 times subscribed while the public tranche was 9.5 times subscribed.  
In addition, cornerstone investors, including Bangkok Life Assurance Public Co, Credit Suisse, DBS, DWS Investments Australia, Kuang Ming Investments, Nomura Singapore, Hazelview Securities, and Metro ARC Investments, have subscribed for an aggregate of 336 million units, which represents 49.8 per cent of the total number of outstanding units at the IPO.

Despite having an IPO portfolio of pure Japan assets, DHLT is established with the investment strategy of principally investing in a portfolio of income-producing logistics and industrial real estate assets located across Asia.

The Reit believes that there is strong growth potential for logistics and industrial assets throughout South-east Asia, where its sponsor, Daiwa House Industry, has completed 9 logistics assets across the region and has 5 logistics facility projects under development across Vietnam, Indonesia and Malaysia as at Sep 30, 2021.  
DHLT offers a diversified initial IPO portfolio of 14 assets which are spread across various regions in prime industrial locations in Japan.

The Reit manager believes that this diversified portfolio will minimise concentration risk and allow it to take advantage of markets which have traditionally been overlooked by existing Japanese-listed and private Reits.

The 14 properties are closely interlinked with transportation and shipping networks, which is attractive for DHLT's large third-party logistics (3PL) and e-commerce tenant base.

The Reit manager has strong commitment to environment, social and governance (ESG) principles, and noted that approximately 95.7 per cent of the IPO portfolio by NLA is certified green by the Development Bank of Japan (DBJ) Green Building Certification Programme, a rating system in Japan which evaluates and measures the environmental and social awareness characteristics of real estate properties.

As at Oct 1, 2021, the IPO portfolio's occupancy rate is 96.3 per cent with 26 tenants.

All of the properties are fully occupied, apart from DPL Sapparo Higashi Kariki and DPL Koriyama.

The aggregate weighted average lease expiry (WALE) for the IPO portfolio by occupied net lettable area (NLA) is 7.2 years as at Jun 30, 2021.

According to the IPO prospectus, the forecasted annualised distribution yield for the period between Oct 1, 2021 and Dec 31, 2021 is 6.3 per cent while the projected distribution yield for financial year 2022 is 6.5 per cent, representing respective spreads of 625 bps and 645 bps compared to the 10-year Japan government bond yield of 0.05 per cent as at Oct 1, 2021.

Following the listing of DHLT, the Singapore Reit and property trust sector now consists of 43 listed trusts of which 9 are industrial Reits (including DHLT).

The average distribution yield of the 9 industrial Reits is 6.1 per cent, including DHLT's forecasted annualised yield of 6.3 per cent for 2021.  REIT Watch is a weekly column on The Business Times, read the original version.



REIT Watch - Logistics S-Reit with pure Japan assets lists on SGX

United States

The AES Corporation acquires, develops, owns, and operates generation plants and distribution businesses in several countries. The Company sells electricity under long term contracts and serves customers under its regulated utility businesses. AES also mines coal, turns seawater into drinking water, and develops alternative sources of energy.

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Aes Corp (AES US)

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Baptista Research

Dow Jones Industrial Avg Nov24 Rebalance - Sherwin Williams (SHW) Could Get Jiggy

The DJIA (Dow30) is an odd anachronism. Price-weighted. Rebalances when it wants. No ranking system. Just a committee and some vague inputs. This...

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1st Quarter 2024 Letter to Investors

Outperformance of Metals and Mining sector: The fund's gold, copper, and lithium investments outperformed their respective industry...

Massif Capital Research

REIT Watch - Logistics S-Reit with pure Japan assets lists on SGX

Daiwa House Logistics Trust (DHLT), which has an initial portfolio (IPO Portfolio) of 14 logistics properties in Japan with an...

Singapore Exchange Ltd (SGX)

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