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Smartkarma Daily Briefs

Apr 14
0

Daily Brief ESG: Isn’t It Not Strong Enough to Raise ROE by Higher Profit Margin Due to Escape from Deflation? and more

By | Daily Briefs, ESG

In today’s briefing:

  • Isn’t It Not Strong Enough to Raise ROE by Higher Profit Margin Due to Escape from Deflation?

Isn’t It Not Strong Enough to Raise ROE by Higher Profit Margin Due to Escape from Deflation?

By Aki Matsumoto

  • Since 2020, there has been a divergence between P/B and TOPIX movements, complicating matters for listed companies that have been asked to raise their P/Bs.
  • Expectations are high for a rise in ROE, which has a certain correlation with nominal GDP, which is also increasingly correlated with TOPIX, as deflation exits.
  • If price pass-through fails, escaping deflation may not lead directly to higher profit margins. If profit margin increase is insufficient, reducing cash on hand is essential to increase ROE.

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Apr 14
0

Daily Brief Equity Bottom-Up: Asian Dividend Gems: Golden Throat Holdings and more

By | Daily Briefs, Equity Bottom-Up

In today’s briefing:

  • Asian Dividend Gems: Golden Throat Holdings
  • Nanya. Tailwinds Mount Albeit Profits Still Elude
  • ESR: A Diversified Fund Manager and Good Alternative Stock to Own in This Chaotic Time
  • VietNam Holding – Introducing redeemable shares

Asian Dividend Gems: Golden Throat Holdings

By Douglas Kim

  • Golden Throat Holdings is a gem. It has excellent fundamentals including an eye-catching dividend yield (17.9% in 2023) and a blistering DPS growth (10x from 2020 to 2023). 
  • It also benefits from a compelling long-term theme (relieving sore throats caused by worsening air quality/smog/fine dust problems along with recurrent regular cold/flu symptoms among millions of people in China). 
  • Golden Throat Holdings is one of the leading throat lozenges manufacturers in China. Its net margin averaged 24% from 2019 to 2023.

Nanya. Tailwinds Mount Albeit Profits Still Elude

By William Keating

  • Nanya’s quarterly revenue was NT$ 9.5 billion, up 9.2% QoQ & up 47.9% YoY
  • Nanya still had a net loss of NT$1.2 billion, its sixth loss making quarter in a row
  • Larger peers doubling down on HBM, structural reduction in memory wafer capacity & shortages likely triggered by Taiwan earthquake are all mounting tailwinds for Nanya

ESR: A Diversified Fund Manager and Good Alternative Stock to Own in This Chaotic Time

By Jacob Cheng

  • While most HK/China stocks continue to be traded at depressed valuation, we view ESR as an interesting play among most real estate stocks
  • The investment highlights of ESR are: 1) as a leading fund manager with growing AUM and fee income 2) leader in new economy sector, and 3) APAC focused
  • ESR’s EBIT mainly comes from 3 segments: investment, fund management and new economy development.  ESR is now trading at deep discount to NAV

VietNam Holding – Introducing redeemable shares

By Edison Investment Research

VietNam Holding (VNH) posted a solid net asset value (NAV) per share total return (TR) in 2023 of 15.8% (22.4% in US dollar terms), outperforming the Vietnam All Share index (VNAS), which posted an 11.7% return, and its direct peers. The investment manager remains confident that 2024 will be strong for Vietnamese equities, underpinned by average 20% y-o-y expected earnings per share (EPS) growth. VNH recently introduced a share redemption facility (on top of regular share buybacks), which allows shareholders to redeem their shares at NAV each September. We believe that this has contributed to the recent narrowing of VNH’s share discount to NAV to 3.0% compared to its three-year average of 14.1%.

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Apr 14
0

Daily Brief Thematic (Sector/Industry): GEMWeekly (12 Apr 2024): South Korea and more

By | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

  • GEMWeekly (12 Apr 2024): South Korea, China Macro; Wipro, TSMC, Samsung Electronics, NetEase

GEMWeekly (12 Apr 2024): South Korea, China Macro; Wipro, TSMC, Samsung Electronics, NetEase

By Wium Malan, CFA

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Apr 14
0

Daily Brief Event-Driven: Genex Power (GNX AU): J-Power’s Binding Proposal as Skip’s Intentions Remain Unknown and more

By | Daily Briefs, Event-Driven

In today’s briefing:

  • Genex Power (GNX AU): J-Power’s Binding Proposal as Skip’s Intentions Remain Unknown
  • Roland DG (6789) – Brother Still Not Making Friends
  • Ansarada (AND AU): Scheme Vote on 14 June
  • (Mostly) Asia-Pac M&A: APM Human Services, Jastec, Genex, JSR Corp, Chilled & Frozen, Lawson
  • Weekly Deals Digest (14 Apr) – L’Occitane, CGN New Energy, Azure, Genex, C&F Logistics, Riso Kyoiku
  • Genex (GNX AU) & J-Power (Finally) Firm Terms
  • Last Week in Event SPACE: Mitsui Fudosan, Melco, Aozora Bank, CGN New Energy

Genex Power (GNX AU): J-Power’s Binding Proposal as Skip’s Intentions Remain Unknown

By Arun George

  • Genex Power Ltd (GNX AU) has entered a transaction implementation deed with Electric Power Development C (9513 JP) for a scheme (A$0.275) and an off-market takeover offer (A$0.270). 
  • Skip could vote against the scheme due to the low 10% premium to its 2022 offer and Genex’s operational capacity rising by 2.7x by the end of 2024.
  • The likely scenario is that J-POWER succeeds with its takeover offer. At the last close, the gross spread of the scheme and takeover offer was 3.8% and 1.9%, respectively.   

Roland DG (6789) – Brother Still Not Making Friends

By Travis Lundy

  • Taiyo Pacific’s Tender Offer for Roland DG Corp (6789 JP) was to end Friday, but it was extended 10 days. 
  • Roland DG provided an update regarding the status of the Brother overbid. It did not show as much strategic-mindedness as it might have.
  • Shares are now trading at a post-overbid high. Strategic missteps up the risk but Brother can pay more.

Ansarada (AND AU): Scheme Vote on 14 June

By Arun George

  • The Ansarada Group Ltd (AND AU) IE considers Datasite’s A$2.50 scheme offer fair and reasonable. However, the inter-conditional carve-out transaction is NOT fair but reasonable. 
  • ACCC clearance (findings on 6 June) is a prerequisite for FIRB approval (scheme condition). As Datasite has a limited Australian presence, ACCC approval should be forthcoming. 
  • The offer is attractive, with no vocal shareholder opposition. At the last close and for the 1 July payment, the gross/annualised spread was 2.5%/12.2%.

(Mostly) Asia-Pac M&A: APM Human Services, Jastec, Genex, JSR Corp, Chilled & Frozen, Lawson

By David Blennerhassett

Weekly Deals Digest (14 Apr) – L’Occitane, CGN New Energy, Azure, Genex, C&F Logistics, Riso Kyoiku

By Arun George

Genex (GNX AU) & J-Power (Finally) Firm Terms

By David Blennerhassett

  • On the 4 March, Genex Power (GNX AU) announced an A$0.275/share NBIO from Electric Power (9513 JP) (J-Power), by way of a Scheme, in tandem with an off-market A$0.27/share Offer.
  • Due diligence was afforded. Exclusivity was extended twice, before a firm offer was inked at the same terms on the 12th April.  The Scheme meeting is expected mid-July; implementation late-July.
  • And Scott Farquhar’s Skip Enterprises, which holds 19.9% in Genex, and who had previously pitched a A$0.25/share NBIO in 2022? No word. And no irrevocable. 

Last Week in Event SPACE: Mitsui Fudosan, Melco, Aozora Bank, CGN New Energy

By David Blennerhassett

  • 9 weeks ago, the FT reported Elliott Management had a stake in Mitsui Fudosan (8801 JP) and had asked them to sell cross-holdings and do a ¥1trln buyback. Mitsui responds.
  • Lawrence Ho is buying Melco(200 HK). While it often pays to follows where the family invests, Melco is trading too tight for what is a simple holding company structure.
  • Avoid being long Aozora Bank Ltd (8304 JP) vs the Banks Index, a portfolio of other cheaper banks, etc. Minimal/negligible upside in following Murakami-san here. And Activism on Banks is difficult.

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Apr 14
0

Daily Brief Financials: ESR Group , Mitsui Fudosan and more

By | Daily Briefs, Financials

In today’s briefing:

  • ESR: A Diversified Fund Manager and Good Alternative Stock to Own in This Chaotic Time
  • Last Week in Event SPACE: Mitsui Fudosan, Melco, Aozora Bank, CGN New Energy

ESR: A Diversified Fund Manager and Good Alternative Stock to Own in This Chaotic Time

By Jacob Cheng

  • While most HK/China stocks continue to be traded at depressed valuation, we view ESR as an interesting play among most real estate stocks
  • The investment highlights of ESR are: 1) as a leading fund manager with growing AUM and fee income 2) leader in new economy sector, and 3) APAC focused
  • ESR’s EBIT mainly comes from 3 segments: investment, fund management and new economy development.  ESR is now trading at deep discount to NAV

Last Week in Event SPACE: Mitsui Fudosan, Melco, Aozora Bank, CGN New Energy

By David Blennerhassett

  • 9 weeks ago, the FT reported Elliott Management had a stake in Mitsui Fudosan (8801 JP) and had asked them to sell cross-holdings and do a ¥1trln buyback. Mitsui responds.
  • Lawrence Ho is buying Melco(200 HK). While it often pays to follows where the family invests, Melco is trading too tight for what is a simple holding company structure.
  • Avoid being long Aozora Bank Ltd (8304 JP) vs the Banks Index, a portfolio of other cheaper banks, etc. Minimal/negligible upside in following Murakami-san here. And Activism on Banks is difficult.

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  • ✓ Unlimited Research Summaries
  • ✓ Personalised Alerts
  • ✓ Custom Watchlists
  • ✓ Company Data and News
  • ✓ Events & Webinars
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Apr 14
0

Daily Brief TMT/Internet: Roland DG Corp, Ansarada Group Ltd, Nanya Technology and more

By | Daily Briefs, TMT/Internet

In today’s briefing:

  • Roland DG (6789) – Brother Still Not Making Friends
  • Ansarada (AND AU): Scheme Vote on 14 June
  • Nanya. Tailwinds Mount Albeit Profits Still Elude

Roland DG (6789) – Brother Still Not Making Friends

By Travis Lundy

  • Taiyo Pacific’s Tender Offer for Roland DG Corp (6789 JP) was to end Friday, but it was extended 10 days. 
  • Roland DG provided an update regarding the status of the Brother overbid. It did not show as much strategic-mindedness as it might have.
  • Shares are now trading at a post-overbid high. Strategic missteps up the risk but Brother can pay more.

Ansarada (AND AU): Scheme Vote on 14 June

By Arun George

  • The Ansarada Group Ltd (AND AU) IE considers Datasite’s A$2.50 scheme offer fair and reasonable. However, the inter-conditional carve-out transaction is NOT fair but reasonable. 
  • ACCC clearance (findings on 6 June) is a prerequisite for FIRB approval (scheme condition). As Datasite has a limited Australian presence, ACCC approval should be forthcoming. 
  • The offer is attractive, with no vocal shareholder opposition. At the last close and for the 1 July payment, the gross/annualised spread was 2.5%/12.2%.

Nanya. Tailwinds Mount Albeit Profits Still Elude

By William Keating

  • Nanya’s quarterly revenue was NT$ 9.5 billion, up 9.2% QoQ & up 47.9% YoY
  • Nanya still had a net loss of NT$1.2 billion, its sixth loss making quarter in a row
  • Larger peers doubling down on HBM, structural reduction in memory wafer capacity & shortages likely triggered by Taiwan earthquake are all mounting tailwinds for Nanya

💡 Before it’s here, it’s on Smartkarma

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The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

  • ✓ Unlimited Research Summaries
  • ✓ Personalised Alerts
  • ✓ Custom Watchlists
  • ✓ Company Data and News
  • ✓ Events & Webinars
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Apr 14
0

Daily Brief Utilities: Genex Power Ltd and more

By | Daily Briefs, Utilities Sector

In today’s briefing:

  • Genex Power (GNX AU): J-Power’s Binding Proposal as Skip’s Intentions Remain Unknown
  • Genex (GNX AU) & J-Power (Finally) Firm Terms

Genex Power (GNX AU): J-Power’s Binding Proposal as Skip’s Intentions Remain Unknown

By Arun George

  • Genex Power Ltd (GNX AU) has entered a transaction implementation deed with Electric Power Development C (9513 JP) for a scheme (A$0.275) and an off-market takeover offer (A$0.270). 
  • Skip could vote against the scheme due to the low 10% premium to its 2022 offer and Genex’s operational capacity rising by 2.7x by the end of 2024.
  • The likely scenario is that J-POWER succeeds with its takeover offer. At the last close, the gross spread of the scheme and takeover offer was 3.8% and 1.9%, respectively.   

Genex (GNX AU) & J-Power (Finally) Firm Terms

By David Blennerhassett

  • On the 4 March, Genex Power (GNX AU) announced an A$0.275/share NBIO from Electric Power (9513 JP) (J-Power), by way of a Scheme, in tandem with an off-market A$0.27/share Offer.
  • Due diligence was afforded. Exclusivity was extended twice, before a firm offer was inked at the same terms on the 12th April.  The Scheme meeting is expected mid-July; implementation late-July.
  • And Scott Farquhar’s Skip Enterprises, which holds 19.9% in Genex, and who had previously pitched a A$0.25/share NBIO in 2022? No word. And no irrevocable. 

💡 Before it’s here, it’s on Smartkarma

Sign Up for Free

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

  • ✓ Unlimited Research Summaries
  • ✓ Personalised Alerts
  • ✓ Custom Watchlists
  • ✓ Company Data and News
  • ✓ Events & Webinars
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Apr 14
0

Daily Brief Consumer: Golden Throat Holdings, Lawson Inc, L’Occitane, TSE Tokyo Price Index TOPIX and more

By | Consumer, Daily Briefs

In today’s briefing:

  • Asian Dividend Gems: Golden Throat Holdings
  • (Mostly) Asia-Pac M&A: APM Human Services, Jastec, Genex, JSR Corp, Chilled & Frozen, Lawson
  • Weekly Deals Digest (14 Apr) – L’Occitane, CGN New Energy, Azure, Genex, C&F Logistics, Riso Kyoiku
  • Isn’t It Not Strong Enough to Raise ROE by Higher Profit Margin Due to Escape from Deflation?

Asian Dividend Gems: Golden Throat Holdings

By Douglas Kim

  • Golden Throat Holdings is a gem. It has excellent fundamentals including an eye-catching dividend yield (17.9% in 2023) and a blistering DPS growth (10x from 2020 to 2023). 
  • It also benefits from a compelling long-term theme (relieving sore throats caused by worsening air quality/smog/fine dust problems along with recurrent regular cold/flu symptoms among millions of people in China). 
  • Golden Throat Holdings is one of the leading throat lozenges manufacturers in China. Its net margin averaged 24% from 2019 to 2023.

(Mostly) Asia-Pac M&A: APM Human Services, Jastec, Genex, JSR Corp, Chilled & Frozen, Lawson

By David Blennerhassett

Weekly Deals Digest (14 Apr) – L’Occitane, CGN New Energy, Azure, Genex, C&F Logistics, Riso Kyoiku

By Arun George

Isn’t It Not Strong Enough to Raise ROE by Higher Profit Margin Due to Escape from Deflation?

By Aki Matsumoto

  • Since 2020, there has been a divergence between P/B and TOPIX movements, complicating matters for listed companies that have been asked to raise their P/Bs.
  • Expectations are high for a rise in ROE, which has a certain correlation with nominal GDP, which is also increasingly correlated with TOPIX, as deflation exits.
  • If price pass-through fails, escaping deflation may not lead directly to higher profit margins. If profit margin increase is insufficient, reducing cash on hand is essential to increase ROE.

💡 Before it’s here, it’s on Smartkarma

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The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

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  • ✓ Personalised Alerts
  • ✓ Custom Watchlists
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  • ✓ Events & Webinars
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Apr 13
0

Daily Brief Australia: EML Payments Limited and more

By | Australia, Daily Briefs

In today’s briefing:

  • EML Payments – Cutting the final link to PFS vendors

EML Payments – Cutting the final link to PFS vendors

By Edison Investment Research

EML Payments has entered into an agreement to settle all the outstanding deferred consideration payments relating to the acquisition of Prepaid Financial Services Group (PFS) for £15.0m/A$28.8m, which represents a £7.9m/A$15.2m discount to the originally agreed amount. This agreement concludes all outstanding actual and potential liabilities relating to the PFS acquisition in 2020. Combined with the agreed sale of Sentenial for A$54m, this substantially strengthens EML’s balance sheet and simplifies the group’s structure.

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Apr 13
0

Daily Brief Indonesia: Mitra Adiperkasa and more

By | Daily Briefs, Indonesia

In today’s briefing:

  • Mitra Adiperkasa (MAPI IJ) – Less Seasonal Cheer, More New Year’s Resolutions

Mitra Adiperkasa (MAPI IJ) – Less Seasonal Cheer, More New Year’s Resolutions

By Angus Mackintosh

  • Mitra Adiperkasa (MAPI IJ) has revealed more detail on the impact of boycotts stemming from the Gaza conflict on some of its brands, most notably Starbucks but also including Zara. 
  • Management remains upbeat about the outlook for the expansion of new retail outlets across its brand portfolio in Indonesia and Southeast Asia but has reduced guidance for Starbucks. 
  • Mitra Adiperkasa remains the best proxy for Indonesian retail with any weakness in the share price an opportunity, with valuations remaining attractive. 

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