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Smartkarma Daily Briefs

May 09
0

Daily Brief Health Care: China Traditional Chinese Medicine, WuXi AppTec, Dr. Reddy’s Laboratories, Oryzon Genomics, Abbvie Inc, X4 Pharmaceuticals , Elanco Animal Health , HCA Healthcare, Inc. and more

By | Daily Briefs, Healthcare

In today’s briefing:

  • China Traditional Chinese Medicine (570 HK): Evaluating Deal-Break Risks
  • WuXi AppTec (2359.HK/603259.CH) – The Pain of 2024 Has Just Begun
  • Dr. Reddy’s Laboratories (DRRD IN): Q4 Result- Sequentially Weak Quarter; Time to Book Profit
  • Oryzon Genomics – Doubling down on clinical activity in 2024
  • AbbVie Inc.: Acquisition of Landos Biopharma to Enhance Autoimmune Disease Treatments & Other Major Developments
  • XFOR: Data from Phase 2 CN Trial Expected in June 2024
  • Elanco Animal Hlth Inc (ELAN) – Wednesday, Feb 7, 2024
  • HCA Healthcare: How Long Is The Continued Strength In Demand for Healthcare Services Expected To Last? – Major Drivers

China Traditional Chinese Medicine (570 HK): Evaluating Deal-Break Risks

By Arun George

  • On 21 February, China Traditional Chinese Medicine (570 HK) announced a privatisation offer from the Sinopharm-led consortium at HK$4.60 per share, a 47.4% premium to the undisturbed price.
  • The wide gross spread (7.0%) reflects risks around the re-rating of peers, the slow pace of satisfying the pre-condition, the completion timetable and Ping An’s blocking stake. 
  • The key risk is the deal close timing due to the slow pace of regulatory approvals, which increases the chance that the vote will held after the August interim.   

WuXi AppTec (2359.HK/603259.CH) – The Pain of 2024 Has Just Begun

By Xinyao (Criss) Wang

  • The growth of TIDES business slowed down, and revenue decreased QoQ despite increasing production capacity.As the main growth point of WuXi AppTec’s future performance, this is not a good signal.
  • Due to BIOSECURE Act, US companies have been negotiating with other contract manufacturers so as to reduce reliance on WuXi AppTec.Let’s see the situation of new orders in following quarters.
  • WuXi AppTec’s performance recovery is closely related to the pace of Fed’s interest rate cuts. From the perspective of growth outlook/macro environment/geopolitical conflicts, WuXi AppTec is still in “dangerous period”.

Dr. Reddy’s Laboratories (DRRD IN): Q4 Result- Sequentially Weak Quarter; Time to Book Profit

By Tina Banerjee

  • Dr. Reddy’s Laboratories (DRRD IN) reported 13% revenue growth to INR71.1B in Q4FY24. EBITDA climbed 15% to INR18.7B, while net profit zoomed 36% to INR13.1B.
  • North America revenue grew 29% YoY to INR32.6B, driven by increase in volumes of base business, contribution from new launches, integration of Mayne portfolio, partly offset by price erosion.
  • After adjusting for brand divestment, revenue from India increased 11% YoY. Gross margin improved 140bps YoY and 10bps QoQ to 58.6%, due to better product mix and cost savings.

Oryzon Genomics – Doubling down on clinical activity in 2024

By Edison Investment Research

Oryzon’s Q124 results emphasised the company’s focus on advancing and expanding its CNS and oncology pipelines, driven by its core assets, vafidemstat and iadademstat. Operating performance was in line, with the lower opex (37% y-o-y decline to €3.2m) driven by reduced R&D spending following completion of the Phase IIb PORTICO trial. Notwithstanding the mixed PORTICO results in borderline personality disorder (BPD), we expect clinical activity to pick up in the coming months, with the initiation of the iadademstat combination studies in first-line AML (Phase Ib) and SCLC (Phase Ib/II) in Q224, and the planned end of Phase II (EoP2) meeting with the FDA in BPD. We also expect interim readouts from the Phase Ib FRIDA study in advanced AML (to be presented at the European Hematology Association conference in June this year). We keep our assumptions broadly unchanged and incorporate the latest net debt figure (€3.7m at end-Q124) in our estimates. Our valuation adjusts to €12.1/share.

AbbVie Inc.: Acquisition of Landos Biopharma to Enhance Autoimmune Disease Treatments & Other Major Developments

By Baptista Research

  • Leading pharmaceutical company AbbVie Inc. has outperformed expectations in its first quarter 2024 results.
  • The financial results and current business outlook reflect the strength and momentum of AbbVie’s diversified pharmaceutical portfolio, which is projected to have long-term growth prospects.
  • The company reported adjusted earnings per share of $2.31 and total net revenues of $12.3 billion, exceeding expectations by $400 million.

XFOR: Data from Phase 2 CN Trial Expected in June 2024

By Zacks Small Cap Research

  • On May 7, 2024, X4 Pharmaceuticals, Inc. (XFOR) announced financial results for the first quarter of 2024.
  • The company will be hosting an investor event in June 2024 to present interim results from the ongoing Phase 2 trial of mavorixafor in chronic neutropenia (CN).
  • The company has initiated the launch of XOLREMDI (mavorixafor) for use in patients 12 years of age and older with WHIM syndrome.

Elanco Animal Hlth Inc (ELAN) – Wednesday, Feb 7, 2024

By Value Investors Club

  • Elanco Animal Health Inc is a leading global provider of pharmaceutical products for Companion Animals and Farm Animals
  • Stock has declined around 50% since early 2020 due to challenges such as the Covid pandemic and disappointing guidance for FY 2022
  • Activist engagement from Sachem Head and a stock price trading at a wide discount to peers make Elanco an intriguing investment opportunity for those willing to weather industry turbulence

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.

HCA Healthcare: How Long Is The Continued Strength In Demand for Healthcare Services Expected To Last? – Major Drivers

By Baptista Research

  • HCA Healthcare, one of the largest U.S. health systems, has shown robust quarterly results backed by sustained fundamentals in their business.
  • The momentum primarily results from broad-based volume growth, improved payer mix, and healthy operating margins.
  • While HCA Healthcare generally presents a promising outlook for the rest of the year, the management underscores uncertainties that diverse risks may pose.

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May 09
0

Daily Brief Financials: Perpetual Ltd, Greentown China, Pioneer Credit, Aon , SK Finance Limited and more

By | Daily Briefs, Financials

In today’s briefing:

  • Perpetual (PPT AU): Shareholders Divided Over Carve Out
  • Morning Views Asia: Adaro Energy, Greentown China, Vedanta Resources
  • Pioneer Credit Ltd – Expected investment guidance upgrade
  • Aon plc: What Will Be The Impact Of The Acceleration of 3×3 Plan On Its 2024 & 2025 Revenues? – Major Drivers
  • SK Finance Pre-IPO Tearsheet

Perpetual (PPT AU): Shareholders Divided Over Carve Out

By David Blennerhassett

  • Back in December last year, Aussie-listed equities manager Perpetual Ltd (PPT AU) rejected Washington H. Soul Pattinson (SOL AU)‘s $3bn all-scrip non-binding indicative proposal. 
  • Yet Soul Patt’s proposal was in sync with Perpetual’s previously flagged intentions to explore a potential separation of its corporate trust and wealth management businesses, from its asset management business.
  • Perpetual has now entered a Scheme, to carve out the corporate trust and wealth management businesses to KKR for A$2.175bn. A lack of clarity on net proceeds saw shares rollover.

Morning Views Asia: Adaro Energy, Greentown China, Vedanta Resources

By Leonard Law, CFA

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

Pioneer Credit Ltd – Expected investment guidance upgrade

By Research as a Service (RaaS)

  • Pioneer Credit Limited (ASX:PNC) is one of the leading acquirers and managers of impaired credit in Australia and has gained its status by maintaining positive customer engagement, an unblemished compliance record with ASIC, and strong relationships with Australia’s largest bank and non-bank lenders.
  • PNC purchases debt from numerous Australian vendor partners (18 different vendors in the past 12 months) with long-term partnership purchasing arrangements in place with Commonwealth Bank of Australia (ASX:CBA).
  • Pioneer’s success in purchasing large debt portfolios at attractive IRRs since October highlights the strong position the company occupies in the marketplace, now enhanced by the recent purchases on attractive IRRs.

Aon plc: What Will Be The Impact Of The Acceleration of 3×3 Plan On Its 2024 & 2025 Revenues? – Major Drivers

By Baptista Research

  • Aon Plc has delivered a strong start to the year, reporting 5% overall organic revenue growth, a 100 basis point margin expansion, and 9% EPS growth.
  • He highlighted that the company managed to deliver solid results during the quarter despite commercial risk pressures and a slow rebound in M&A and IPO activity.
  • Regardless, Aon Plc was able to close its acquisition of NFP, which is said to strengthen its position in the fast-growing $31 billion North American middle market.

SK Finance Pre-IPO Tearsheet

By Clarence Chu

  • SK Finance Limited (0893736D IN) is looking to raise US$260m in its upcoming India IPO. The bookrunners on the deal are Kotak, Jefferies, Motilal Oswal, and Nomura.
  • SK Finance is a non-deposit non-banking finance company middle layer (NBFC ML) operating in two main verticals, vehicle financing and financing for micro, small and medium enterprises (MSMEs).
  • As per the CRISIL report in the DRHP, the firm was the fastest growing player in the vehicle financing and MSME financing segments based on AUM growth over FY21-23.

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May 09
0

Daily Brief Consumer: Alibaba Group Holding , Swiggy, IMAX China Holding, Ferrari N.V., Shoppers Stop, ADT , Columbia Sportswear Co, Harley Davidson, Colgate Palmolive Co, Mohawk Industries and more

By | Consumer, Daily Briefs

In today’s briefing:

  • Alibaba (BABA US): Margin Pressure Overstated
  • Swiggy Pre-IPO Early Look – Innovation Leader, Profitability Laggard
  • Flagging a potentially interesting situation: IMAX China (HKG: 1970)
  • Ferrari Q1 FY24: Another Beat, Conservative Guidance And High-Quality Growth
  • Earnings Playbook | Shoppers Stop (SHOP IN) | Target of Quadrupling Network
  • ADT Inc.: A Streamlined Business Model Driving Growth! – Major Drivers
  • Columbia Sportswear Company: What Is The Expected Impact Of The Recovery Of U.S. Consumer Activity> – Major Drivers
  • Harley-Davidson Inc.: Investment in LiveWire segment & The Impact On revenue! – Major Drivers
  • Colgate-Palmolive Company: What Is Its New Consumer Behavior Management Strategy? – Major Drivers
  • Mohawk Industries Inc.: Is Expectation of Consumer Confidence and Housing Market Improvement Realistic? – Major Drivers

Alibaba (BABA US): Margin Pressure Overstated

By Eric Chen

  • We feel consensus overstates margin pressure for Alibaba’s March quarter results. We expect its group adjusted EBITA to deliver single-digit growth vs. investors’ concern about earnings retreat.
  • March quarter should mark start of an earnings recovery cycle in our view, as improving China macro and well-executed business revamp plan put Alibaba back on growth track.
  • This also means an end to its multiple contraction which lasted for five quarters. We see 50% upside on double-digit earnings growth and multiple expansion over next 12 months.

Swiggy Pre-IPO Early Look – Innovation Leader, Profitability Laggard

By Sumeet Singh

  • Swiggy aims to raise US$1.25bn in its upcoming India IPO. The company has filed confidentially for its IPO, which is likely to be launched towards the end of the year.
  • Swiggy, along with Zomato, operates a duopoly that has come to dominate the food delivery market in India. In 1H24, Swiggy serviced over 274,000 restaurants via its 370,000 delivery partners.
  • In this note, we will take an early look at the company based on the publicly available financials. 

Flagging a potentially interesting situation: IMAX China (HKG: 1970)

By Acid Investments

  • IMAX Corp, listed on the NYSE, is a 71% shareholder of IMAX China, a HKEX listed subsidiary – in charge of the release of IMAX films in Greater China.

  • IMAX HK is rather illiquid – 7.15 HK is a mere $0.93 USD – with no investor presentations, no earnings calls – again, as is common with ideas in this blog, we are dealing with a company that is more or less “unownable” for most, flies under the radar, and therefore sports a, for a lack of a better word, shite valuation.

  • Whilst IMAX Corp, the parent company, trades at ~8x EBITDA, the “backwater” subsidiary IMAX HK, trades at a mere ~5x EBITDA, despite margins being more than 10 pts higher.

Ferrari Q1 FY24: Another Beat, Conservative Guidance And High-Quality Growth

By Sameer Taneja

  • Ferrari N.V. (RACE US) reported yet another high-quality quarter with 11%/18% YoY revenue/net profit growth on a flat YoY(%) volume quarter driven by mix improvement.
  • Although there seems to be earnings upside, and the street was literally searching for it in the concall, management stuck to their 6.5%/9% revenue/net profit growth guidance for FY24.
  • Trading at 50x FY24, the stock seems expensive, but the strong branding and order book implies very visible earnings growth into the future.  

Earnings Playbook | Shoppers Stop (SHOP IN) | Target of Quadrupling Network

By Pranav Bhavsar

ADT Inc.: A Streamlined Business Model Driving Growth! – Major Drivers

By Baptista Research

  • The first quarter 2024 results of ADT Inc. highlight the company’s positive growth and future investment opportunities.
  • The company continues to focus on its consumer-oriented core security and smart home business, serving a vast market.
  • Being an industry leader, ADT benefits from its trusted brand, national footprints, and the ability to tap stable and predictable cash flows to service and reduce its debt obligations.

Columbia Sportswear Company: What Is The Expected Impact Of The Recovery Of U.S. Consumer Activity> – Major Drivers

By Baptista Research

  • Columbia Sportswear demonstrated solid management of its inventory and its operational costs.
  • The company reported a 37% year-over-year reduction in inventory and the implementation of an inventory reduction plan that has reaped substantial benefits.
  • Columbia Sportswear’s strong balance sheet supports its maneuvers to tackle the impact of coronavirus-induced disruptions and realign inventory.

Harley-Davidson Inc.: Investment in LiveWire segment & The Impact On revenue! – Major Drivers

By Baptista Research

  • Harley-Davidson had a mixed performance in the recent result.
  • The company delivered in line with expectations, reporting a 6% growth in North America, the most important region.
  • However, this growth was offset by soft performances in Europe and the Asia Pacific primarily due to regional macroeconomic conditions.

Colgate-Palmolive Company: What Is Its New Consumer Behavior Management Strategy? – Major Drivers

By Baptista Research

  • Colgate-Palmolive’s Q1 2024 earnings reveal a positive start to the year, with balanced top-line growth and consistent earnings per share growth.
  • The company recorded organic sales growth across all four of its categories and all six of its divisions, as well as volume and pricing growth on a total company basis.
  • This balanced growth enabled a 6% net sales growth, despite a nearly 4% headwind from foreign exchange.

Mohawk Industries Inc.: Is Expectation of Consumer Confidence and Housing Market Improvement Realistic? – Major Drivers

By Baptista Research

  • Mohawk Industries’ Q1 2024 earnings call detailed a challenging period marked by economic headwinds and mixed performance.
  • The company’s net sales for the first quarter were $2.7 billion, a drop of 4.5% compared to the previous year.
  • However, the adjusted earnings per share increased by 6% year-over-year to $1.86.

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May 08
0

Daily Brief Australia: Namoi Cotton Co Operative, Pureprofile Ltd, Recce Ltd and more

By | Australia, Daily Briefs

In today’s briefing:

  • Namoi Cotton (NAM AU): Bloom Times As Louis Dreyfus & Olam Agri Tangle
  • Pureprofile Ltd – EBITDA margin guidance upgraded
  • Recce Pharmaceuticals – Advances on several fronts

Namoi Cotton (NAM AU): Bloom Times As Louis Dreyfus & Olam Agri Tangle

By David Blennerhassett

  • Singapore’s Olam Agri and global commodity merchant Louis Dreyfus Company (LDC) are duking it out for Namoi Cotton Co Operative (NAM AU), Australia’s largest cotton producer.
  • After both initially lobbed competing Schemes, both have now tabled off-market Offers – A$0.67/share from LDC, A$0.66/share from Olam – each contingent on a 50.1% acceptance hurdle, FIRB, and ACCC. 
  • LDC, currently holding 17%, announced it will reject Olam Agri’s Offer. Top shareholder Samuel Terry Asset Management, with 24.5%, is expected to support the winning (or superior) bid.  

Pureprofile Ltd – EBITDA margin guidance upgraded

By Research as a Service (RaaS)

  • Pureprofile Ltd (ASX:PPL) is a data analytics and consumer insights company underpinned by proprietary technology, servicing business decision makers in brands and media companies as well as market researchers.
  • Pureprofile reported a 6% increase in Q3 FY24 revenue to $10.9m and a 49% decline in Q3 EBITDA to $0.5m versus the previous corresponding period (pcp).
  • Q3 is seasonally the weakest quarter for PPL and EBITDA was affected, in part, by the change in executive remuneration policy to cash-based payments.

Recce Pharmaceuticals – Advances on several fronts

By Edison Investment Research

Recce Pharmaceuticals has reported several encouraging developments in recent weeks for its lead development compound RECCE® 327 (R327). The intravenous (IV) R327 formulation is advancing to a higher dose level (4,000mg) in its ongoing Phase I/II rapid infusion study and the company is progressing in its plan to submit a US Investigational New Drug (IND) application to commence a US Phase II complicated urinary tract infection (cUTI) study before end-CY24. Recce is also planning to start an Indonesian Phase III registrational study in Q3 CY24, which we anticipate could lead to initial commercialisation in South-East Asia in H2 CY26. We have made minor adjustments to our valuation and now obtain a risk-adjusted net present value (rNPV) of A$661.3m (or A$3.27/share), versus A$644.4m previously.

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May 08
0

Daily Brief South Korea: SeAH Steel Holdings and more

By | Daily Briefs, South Korea

In today’s briefing:

  • Quiddity Leaderboard KOSPI 200 Jun 24: One Last-Minute Change to Rankings

Quiddity Leaderboard KOSPI 200 Jun 24: One Last-Minute Change to Rankings

By Travis Lundy

  • KOSPI 200 is a Korean blue-chip index that tracks the 200 largest and most-liquid names listed in the KOSPI section of the Korea Exchange (KRX).
  • The reference period for the June 2024 index rebal event ended recently. In this insight, we take a look at our final expected ADDs/DELs.
  • There has been one change to our list of expected ADDs presented in my last insight (link).

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May 08
0

Daily Brief Singapore: Singapore Airlines and more

By | Daily Briefs, Singapore

In today’s briefing:

  • Singapore Airlines – 4Q Likely to Extend the Theme of Earnings Normalization as FY25 Comes into View

Singapore Airlines – 4Q Likely to Extend the Theme of Earnings Normalization as FY25 Comes into View

By Neil Glynn

  • We expect Singapore Airlines to report a disappointing 4Q24 on 15 May, as earnings normalisation continues.
  • Inflationary pressure is a key theme at SIA, with it suffering one of the highest levels of inflation in the APAC region.
  • Our forecasts for FY25, which suggest further earnings normalisation, are c.20% below consensus at the operating level.

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May 08
0

Daily Brief United States: S&P 500 INDEX, Bitcoin Pro, Titan International , Gaia, Gevo, Leef Brands , Adeia, Zimvie , Cheniere Energy, East West Bancorp and more

By | Daily Briefs, United States

In today’s briefing:

  • Major Risk-On Developments; Bullish Outlook Intact; Downgrading Health Care $XLV to Underweight
  • Bitcoin Battles ETF Outflows
  • TWI: Titan announces 1st quarter 2024 results and updates the investor community on industry conditions.
  • Gaia, Inc. – Solid Top-Line Momentum Continues in 1Q24
  • Gevo, Inc. – 1Q24 Results: Share Repurchase Underway
  • LEEF Brands, Inc. – Announces Debt Restructuring, Settlement for Equity, and Equity Offering
  • ADEA: Setting Course for New Licensees
  • Zimvie Inc (ZIMV) – Tuesday, Feb 6, 2024
  • Cheniere Energy Inc (LNG) – Tuesday, Feb 6, 2024
  • East West Bancorp Inc (EWBC) – Tuesday, Feb 6, 2024

Major Risk-On Developments; Bullish Outlook Intact; Downgrading Health Care $XLV to Underweight

By Joe Jasper

  • Over the past two weeks we’ve discussed the possibility that further downside was limited (4/23/24 Compass) and mounting evidence that suggests the pullback lows may be in (4/30/24 Compass).
  • Major risk-on developments for the broad equity market have continued to roll in over the past week, which we discuss below.
  • We continue to believe the lows are in, and we see the pullback to the 100-day MA on the S&P 500 as healthy/normal within the ongoing bull market.

Bitcoin Battles ETF Outflows

By Delphi Digital

  • BTC Spot ETFs Unlock Institutional Capital: Explore the impact of Bitcoin Spot ETFs, opening doors to institutional investment.
  • Market Insights Drive BTC Performance: Understand BTC’s resilience and trajectory through market dynamics and performance analysis.
  • Token Unlocks Shape Market Dynamics: Stay ahead of market shifts by monitoring upcoming token unlocks.

TWI: Titan announces 1st quarter 2024 results and updates the investor community on industry conditions.

By Zacks Small Cap Research

  • Titan International is a global manufacturer of off-the-road tires, wheels and undercarriages.
  • The company serves the agricultural, earthmoving / construction, and consumer markets.
  • Recent strategic actions have created higher margins in recent years and brought the leverage ratio down to 2.0x.

Gaia, Inc. – Solid Top-Line Momentum Continues in 1Q24

By Water Tower Research

  • Gaia reported strong 1Q24 results, with revenue of $21.7 million (up 11%), 33,000 net member additions for a total membership count of 839,000 (all-time high), and strong operating cash flow of $5.9 million.
  • International revenue growth was particularly strong at 20.4%, compared with respectable US growth of 3.7%.
  • Member acquisition costs decreased 10%, partly as a result of a focus on direct-to-paid marketing campaigns, whereby free trial periods are replaced by special incentives to lock in longer-term membership commitments at attractive rates. This also fueled healthy deferred revenue growth of $2.0 million during the quarter.

Gevo, Inc. – 1Q24 Results: Share Repurchase Underway

By Water Tower Research

  • Gevo has begun repurchasing shares under the company’s previously announced program.
  • The company has so far repurchased 5.5 million shares for $3.7 million, leaving $21.3 million available for repurchases.
  • Gevo revised spending on its Net-Zero 1 plant project. 

LEEF Brands, Inc. – Announces Debt Restructuring, Settlement for Equity, and Equity Offering

By Water Tower Research

  • LEEF Brands (CSE: LEEF, OTCQX: LEEEF) is a scaled, vertically integrated operator in California.
  • It holds the largest cultivation permit in Santa Barbara County, owns LEEF Labs, one of the state’s largest manufacturing companies, and has The Leaf dispensary in Palm Springs.
  • The company recently successfully restructured its debt. 

ADEA: Setting Course for New Licensees

By Hamed Khorsand

  • ADEA signed ten license agreements and reduced debt by approximately $40 million in the first quarter. ADEA has yet to announce a new major OTT license aside from Paramount renewing.
  • The investment case for owning ADEA’s stock has centered on the Company’s ability to sign more license agreements
  • ADEA remains on pace to generate $150 million of free cash flow to help reduce the Company’s debt balance further.

Zimvie Inc (ZIMV) – Tuesday, Feb 6, 2024

By Value Investors Club

  • ZimVie Inc. historically focused on dental and spine industries since spinning out from Zimmer Biomet in 2022
  • Company faced challenges with large debt burden and declining spine business, leading to discounted valuation
  • Recent sale of spine business to HIG Capital for $375 million expected to eliminate overhangs, simplify valuation, and position company for stronger future performance

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.

Cheniere Energy Inc (LNG) – Tuesday, Feb 6, 2024

By Value Investors Club

  • Cheniere Energy (LNG) expected to have significant performance catalyst in 2024 with 4Q23 EPS print on 2/22/24
  • Sell side has adjusted numbers for 2024 despite recent underperformance
  • Anticipated conservative guidance for 2024 sets up positive surprise for investors due to focus on “tariff” type earnings and long-term contracts in place

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.

East West Bancorp Inc (EWBC) – Tuesday, Feb 6, 2024

By Value Investors Club

Key points

  • Short shares of EWBC, a medium-sized regional bank serving the Chinese/Asian expat community
  • Trading at 1.5x price/TBV with compression in NIM and increased deposit costs
  • Concerns about CRE exposure, uninsured deposits, investments in China/HK, and creditworthiness due to uniquely correlated customer base and soft guidance from management

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.

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May 08
0

Daily Brief Indonesia: Greentown China and more

By | Daily Briefs, Indonesia

In today’s briefing:

  • Morning Views Asia: Adaro Energy, Greentown China, Vedanta Resources

Morning Views Asia: Adaro Energy, Greentown China, Vedanta Resources

By Leonard Law, CFA

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

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May 08
0

Daily Brief India: Quint Digital , Delta Corp Ltd, Greentown China and more

By | Daily Briefs, India

In today’s briefing:

  • Quint Digital: The New Era of Raghav Bahal
  • Delta Corp’s Links to Mahadev App Scam Reveal Cash Exchange
  • Morning Views Asia: Adaro Energy, Greentown China, Vedanta Resources

Quint Digital: The New Era of Raghav Bahal

By Sudarshan Bhandari

  • Quint Digital (QUINT IN) announces alterations to its MoA, changing its name and expanding its digital ventures, including joint ventures and acquisitions.
  • Quintype Technologies India Limited’s impressive growth and the acquisition of Lee Enterprises (LEE US) highlight Quint Digital’s ambitions and potential.
  • Despite debt concerns, Quint Digital’s strategic investments in digital media and technology position it for substantial growth, potentially reshaping the digital publishing landscape.

Delta Corp’s Links to Mahadev App Scam Reveal Cash Exchange

By Nimish Maheshwari

  • Delta Corp Ltd (DELTA IN) sells its Nepal casino business to Ability Games amidst allegations of connections to illegal betting and money laundering.
  • The ED’s investigations into Mahadev Online Book reveal a Rs 3,916 crore scam, freezing of Rs 580.78 crore assets, and involvement of companies like Ability Games.
  • CEO of Delta Corp Ltd (DELTA IN)mentioned in ED statement that they have agreed for 10Crs over and above the transaction value.

Morning Views Asia: Adaro Energy, Greentown China, Vedanta Resources

By Leonard Law, CFA

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

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May 08
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Daily Brief Japan: Fast Retailing, Kawasaki Kisen Kaisha, Chilled & Frozen Logistics Holdings, Nintendo, TSE Tokyo Price Index TOPIX, Dic Corp, Seven & I Holdings and more

By | Daily Briefs, Japan

In today’s briefing:

  • Nikkei 225 Index Rebalance Preview (Sep 2024): Ranking, Capping, Funding & Other Changes
  • KLINE (9107) – More Profit, More Shareholder Return 3mo Buyback Inbound
  • Chilled & Frozen’s Target Opinion Statement; Chotto Matte (Four Counterbidders)
  • Nintendo (7974) | Negative Surprise….Not Really
  • A Common Case of a Company with a Low ROE but with the Founding Family Serving as Successive CEOs
  • DIC (4631): Full-Year FY12/23 Update
  • Seven & I Letting Go of Ito-Yokado at Last?

Nikkei 225 Index Rebalance Preview (Sep 2024): Ranking, Capping, Funding & Other Changes

By Brian Freitas

  • The review period for the Nikkei 225 (NKY INDEX) September rebalance ends in July. There could be three changes at the rebalance with sector balance in focus for the additions.
  • Depending on the changes, passive trackers will need to buy between 5-16x ADV (10.1%-24% of real float) on the inclusions and sell between 4-42x ADV on the deletions.
  • Fast Retailing (9983 JP) will be capped to 10% of the index weight while Tokyo Electron (8035 JP) is also close to the 10% cap.

KLINE (9107) – More Profit, More Shareholder Return 3mo Buyback Inbound

By Travis Lundy

  • Kawasaki Kisen Kaisha (9107 JP) today announced earnings. Ocean Network Express earnings were out earlier and beyond that, Consolidated Revs beat, OP faltered, but NP was spot on guidance.
  • Guidance for the year to March 2025 is well ahead of consensus on revenue, slightly ahead on OP, and just a wee bit ahead on NP. 
  • But the company raised its 5yr MTMP Shareholder Return from ¥500bn to ¥700bn and set a new ¥100bn (5.5%) buyback to be executed in the next 3 months.

Chilled & Frozen’s Target Opinion Statement; Chotto Matte (Four Counterbidders)

By Travis Lundy

  • Today, after the close, Chilled & Frozen Logistics Holdings (9099 JP) released a required (by the FIEA) Target Opinion Statement saying “Opinion Withheld.”
  • C&F notes that it had received 9 possible counter-proposals, offered due dili to a certain extent, and by May 1, had 4 binding offers. 
  • There are interesting competitive dynamics at play here, but cross-holding concentration matters. The question is… How much is enough?

Nintendo (7974) | Negative Surprise….Not Really

By Mark Chadwick

  • Operating profit: FY3/24 OP was 529 billion yen (+4.9% YoY) vs analyst estimates of 537 billion (1.5% miss)
  • FY3/25 Operating guidance is 400 billion yen, significantly below analyst expectations of 480 billions (-16% miss).
  • The initial market reaction may be negative, we would use that as an opportunity to buy into the stock for the cyclical upturn in FY3/26.

A Common Case of a Company with a Low ROE but with the Founding Family Serving as Successive CEOs

By Aki Matsumoto

  • The reason why the approval for the shareholder proposal on profit appropriation exceeded 40% is that the proposal was easy to understand and easy to get approval from other shareholders.
  • Although domestic institutional investors don’t currently vote against a low ROE when it comes to improvement measures, they may take a more aggressive stance if ISS raises its ROE criteria.
  • The trend of top management being reappointed even with continued low ROE is likely to continue for a while longer, but the time frame is definitely getting smaller.

DIC (4631): Full-Year FY12/23 Update

By Shared Research

  • Dic Corp is a chemical company with a top global market share in products such as printing ink, organic pigments, and PPS compounds.
  • DIC recorded FY12/23 sales of JPY1,038.7bn, operating profit of JPY17.9bn, recurring profit of JPY9.2bn, and net loss attributable to owners of the parent of JPY39.9bn.
  • On February 13, 2024, DIC Corporation announced revisions to its long-term management targets in DIC Vision 2030.

Seven & I Letting Go of Ito-Yokado at Last?

By Michael Causton

  • Seven & I’s plans to consolidate its supermarket operations and list in 2027 remain speculative but the timing shows that management was swayed more by the founder’s death than activists.
  • It will need to bring Ito-Yokado (IY) back to profit first and, although it wants to keep at least a 15% stake, there is the strong possibility of a sale.
  • What matters more is not IY stores but the new SIP format. With CVS saturated, SIP is only way to grow within Japan but this depends on Ito-Yokado supply chains.

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