Smartkarma Daily Briefs

• On 25 June, Midea Real Estate Holding (3990 HK) disclosed an in-specie distribution of its PD&S business through a scrip or cash (HK$5.90 per share, 57.33% premium to undisturbed price).
• The key condition will be approval of the distribution by at least 75% of disinterested shareholders (<10% of all disinterested shareholders rejection).
• Midea RE will remain listed with an asset-light retained business, which is estimated to be worth HK$1.93. The Group’s estimated value is HK$7.83, a 17.6% upside to the last close.

• Despite the recent rally in Bandhan Bank Ltd (BANDHAN IN), the stock should be deleted from the NSE Nifty Bank Index (NSEBANK INDEX) in September.
• Canara Bank (CBK IN) should be added to the NSE Nifty Bank Index (NSEBANK INDEX) and passive trackers will need to buy 1x ADV and over 2x delivery volume.
• Bandhan Bank Ltd (BANDHAN IN) is safe for now but could be deleted from a large global index in the next few months on further underperformance.

• Exceeding our upgraded FY24 PAT estimate of INR 350cr+, Nesco reported PAT of INR 363cr, led by Q4Y24 PAT of INR 105cr, a rise of 24% YoY and 12%+ QoQ.
• Q4FY24 revenues grew 6%+ QoQ and 20%+ YoY. Growth was driven by BEC where revenues grew 6% QoQ and 31%+ YoY. IT Park revenue grew 2% QoQ and 13% YoY.
• For FY25, we estimate that Nesco could post a PAT of INR 420cr+. Per our FY25 exit P/E of 26x+, Nesco could be valued at around INR 11000cr.

We view New World Development (NWD) as “Medium Risk” on the LARA scale. The company is one of the leading Hong Kong-based property developers and the flagship real estate arm of the Chow Tai Fook (CTF) group. NWD has an established property-development track record in Hong Kong and Mainland China, as well as a sizeable and growing portfolio of investment properties (under the premium K11 brand) in both regions. In addition, it has a large land bank (particularly in Hong Kong), which would support its development pipeline.

Overall, we believe NWD’s credit profile is underpinned by expectation of support from the CTF group, as well as its high quality and mostly unencumbered investment property portfolio. That said, the company has high leverage and weak financial metrics.

Our fundamental Credit Bias on NWD is “Negative”. This is mainly on account of the challenging industry environment, which has pressured the company’s property development contracted sales and margins. Going forward, NWD is likely to gradually grow its rental income from investment properties, supported by contributions from newly completed assets. Positively, management has communicated a deleveraging plan, albeit this may hinge on the company’s ability to carry out further non-core asset disposals.  

Controversies are “Immaterial”. In 2021, NWD had to demolish and rebuild two out of seven blocks at The Pavilia Farm Phase 3 project, after the building contractor found construction defects during concrete strength tests. That said, the company adequately compensated affected homebuyers and commissioned an independent third party to carry out tests on the project’s Phase 1 and 2 sections. In 2008, NWD became the subject of a minor controversy after it appointed a former top civil servant (Leung Chin-man, who was Hong Kong’s Permanent Secretary for Housing, Planning and Lands from 2002 to 2005) as deputy MD and ED of NWCL. The appointment was subsequently rescinded after a public outcry. Overall, the ESG Impact on Credit is “Neutral”. 

We initiate coverage on NWD with a “Hold” recommendation on the NWDEVL notes. We believe investors with a higher risk appetite can consider investing in the three NWDEVL perpetual securities that contain coupon step-ups (in the event of non-call at their respective first call dates), considering the attractive YTC. 

• eXp World Holdings is a cloud-based real estate brokerage business with a stock price of $9.91 and a market cap of $1,562 million
• The company offers agents an 80% commission retention through a revenue share agreement, a significant improvement over the industry standard
• eXp World Holdings operates without physical offices, providing a cost-effective and innovative alternative to traditional real estate brokers.

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• Freshworks, a prominent software development company, showcased a robust financial performance in the first quarter of 2021, achieving a notable 20% year-over-year revenue growth, bringing its total revenue to $165.1 million.
• This impressive growth was complemented by a strong free cash flow of $38.7 million, reflecting a free cash flow margin of 23%.
• The company’s strategic initiatives highlight its dedication to innovation, particularly in artificial intelligence (AI), which has significantly enhanced efficiency and customer satisfaction across its product offerings.

• DFIN offers software solutions with potential for revenue growth
• Strong balance sheet and focus on recurring revenue provide stability and growth potential
• Target price range of $80 – $100 per share indicates significant upside potential for investors

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

Molten Ventures saw a stabilisation and recovery in portfolio valuations in H224, as well as a pick-up in realisation processes, with two agreed exits (Endomag and Perkbox) at valuations modestly above last carrying values. Consequently, management now expects around £100m of realisation proceeds in FY25 (to end-March 2025). Its updated capital allocation policy assumes a focus on attractively priced primary and secondary investments (with an emphasis on the latter), as well as a minimum of 10% of realisation proceeds earmarked for share buybacks.

CoinShares International (CS) är en pionjär och en väletablerad aktör i den framväxande och snabbväxande branschen för digitala tillgångar. Bolaget införde nyligen en utdelningspolicy att betala ut mellan 20 % och 40 % av det sammanlagda totalresultatet justerat för valutaomräkningsdifferenser. Detta underbyggs av stabila intäkter från förvaltningsavgifter och aktiviteter inom kapitalmarknadsinfrastruktur, inklusive belöningar från insättning av digitala tillgångar, framför allt Ether efter de senaste stora uppgraderingarna av Ethereums blockkedjenätverk.

• BTC fights to hold multi-month range lows amidst aggressive liquidations and market volatility.
• Altcoin market faces significant losses, with some sectors down 30%+ from yearly highs.
• Upcoming ETH spot ETF launch offers potential bullish catalyst despite current market weakness.