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Smartkarma Daily Briefs

Apr 07
0

Most Read: Shenzhen New Industries Biomedical Engineering-A, ZOZO Inc, Li Auto , Hanwha Aerospace, Kokusai Electric , Hanmi Science, Citic Resources Holdings, JSR Corp, Talgo SA and more

By | Daily Briefs, Most Read

In today’s briefing:

  • CSI300 Index Rebalance Preview: Potential Adds Outperforming Despite ETF Inflows
  • Index Rebalance & ETF Flow Recap: NKY, ASX, CSI300, A50, STTF, LowVol30, Value Up
  • HSTECH Index Rebalance Preview: Round-Trip Trade of US$1.5bn in June
  • Hanwha Aerospace: Spin Off of Semiconductor Equipment and Video Surveillance Units
  • Weekly Deals Digest (07 Apr) – Kokusai Electric, HD Hyundai Marine, Langham, Jastec, JSR, Best World
  • Hanmi Science: If Talks With Mum and Sister Break Down, Then KKR May Provide a Partial Tender Offer
  • Citic Resource Holdings (1205.HK) – A Play on Oil and Coal Demand
  • (Mostly) Asia-Pac M&A: Austal, Best World, Isetan Singapore, Langham Hospitality, Azure, Genex Power
  • Japan Weekly | Stocks Lower but Global Economy Remains Strong
  • Ganz-Mavag/Talgo: Request for Offer Authorisation

CSI300 Index Rebalance Preview: Potential Adds Outperforming Despite ETF Inflows

By Brian Freitas

  • With 85% of the review period complete, we see 11 changes for the Shanghai Shenzhen CSI 300 Index (SHSZ300 INDEX) in June.
  • We estimate one-way turnover of 1.2% at the rebalance leading to a one-way trade of CNY 7.3bn (US$1bn). There are a lot of stocks with multiple days ADV to trade.
  • The potential adds have outperformed the potential deletes despite large flows from the National Team into ETFs tracking the CSI 300 Index. That support for the potential deletes will reverse.

Index Rebalance & ETF Flow Recap: NKY, ASX, CSI300, A50, STTF, LowVol30, Value Up

By Brian Freitas

  • There were a few rebalance announcements in the last week and the SSE STAR50 (STAR50 INDEX) and STAR100 Index rebalances were implemented at the close on Friday.
  • There are a lot of rebalances that will be implemented at the close on the coming Thursday and Friday.
  • Another big week of inflows for onshore China ETFs with Central Huijin likely behind the big flows to ETFs tracking the Shanghai Shenzhen CSI 300 Inde (SHSZ300 INDEX). 

HSTECH Index Rebalance Preview: Round-Trip Trade of US$1.5bn in June

By Brian Freitas

  • With no stocks in outright inclusion or deletion zone, we do not expect any constituent changes for the Hang Seng TECH Index (HSTECH INDEX) in June.
  • Capping changes will result in a one-way turnover of 5.3% leading to a round-trip trade of US$1.51bn.
  • Li Auto (2015 HK) is expected to be the largest buy in June following the stock being the largest sell at the March rebalance (also due to capping).

Hanwha Aerospace: Spin Off of Semiconductor Equipment and Video Surveillance Units

By Douglas Kim

  • On 5 April, Hanwha Aerospace (012450 KS) formally announced that it will spin off its semiconductor equipment and video surveillance units which contributed to about 16% of its revenue. 
  • We are Negative on Hanwha Aerospace mainly due to valuations. Its share price has risen so much in the past year that its valuations are no longer attractive.
  • Hanwha Aerospace is trading at premium valuation to Lockheed Martin on an EV/EBITDA basis. Despite its recent strong growth, Hanwha Aerospace is no Lockheed Martin. 

Weekly Deals Digest (07 Apr) – Kokusai Electric, HD Hyundai Marine, Langham, Jastec, JSR, Best World

By Arun George

Hanmi Science: If Talks With Mum and Sister Break Down, Then KKR May Provide a Partial Tender Offer

By Douglas Kim

  • The 2024 AGM of Hanmi Science is over and the two Lim brothers have control of the company. Nonetheless, the fight for the control of Hanmi Science is not over.
  • There is an increasingly probable scenario where the KKR private equity firm gets involved, joining hands with the Lim brothers.
  • If mum and sister do not sell their shares (which seems to be the higher likely scenario), then KKR may issue a tender offer to the remaining minority shareholders.

Citic Resource Holdings (1205.HK) – A Play on Oil and Coal Demand

By Rikki Malik

  • One of a basket of Hong Kong commodity stocks we like
  • One off issues in 2023 which should reverse in 2024
  • Can also be viewed as  a tangential play on India’s industrial growth

(Mostly) Asia-Pac M&A: Austal, Best World, Isetan Singapore, Langham Hospitality, Azure, Genex Power

By David Blennerhassett

Japan Weekly | Stocks Lower but Global Economy Remains Strong

By Mark Chadwick

  • US stocks recovered on Friday after a blow-out US jobs report. However, US 10 year yields ended the week up 19bps at 4.4%
  • Japanese stocks sank for a second week as tech stocks came under selling pressure
  • The 10% move in Sumitomo Metal Mining on higher copper prices highlights strength in global economy and perhaps sign of renewed growth in China

Ganz-Mavag/Talgo: Request for Offer Authorisation

By Jesus Rodriguez Aguilar

  • Ganz Mavag, a public/private consortium, requests authorisation for its €5/share offer for 100% of Talgo SA (TLGO SM). It needs approvals from Spain and seven other EMEA regulators.
  • Yesterday’s close remains similar to the announcement date (7 March), gross spread of 11.3%, indicating uncertainty regarding timeline and development. The market is pricing a 48% probability of deal completion.
  • The Spanish Government will delay the authorization process. Vs. comparables and considering uncertainties regarding backlog execution, investing in the company seems somewhat risky. The risk/reward ratio is not particularly attractive.

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Apr 07
0

Daily Brief United States: Rubrik , Acadia Healthcare Co, Boston Beer Company Inc A, Tenet Healthcare, Chemed Corp, Dentsply International, Elanco Animal Health , Globus Medical Inc A, Graphic Packaging Holding Company, Ionis Pharmaceuticals and more

By | Daily Briefs, United States

In today’s briefing:

  • Rubrik IPO Preview and Valuation Analysis: 2024’s Hottest SaaS Investment Opportunity
  • Acadia Healthcare Company Inc.: Initiation Of Coverage – Investment in technology to optimize infrastructure and clinical outcomes! – Major Drivers
  • The Boston Beer Company Inc.: Initiation Of Coverage – Is Its Positioning In The Hard Seltzer Market Its Biggest Competitive Advantage? – Major Drivers
  • Tenet Healthcare Corporation: Initiation Of Coverage – Its Focus on Higher Acuity Services in Hospitals & Other Core Strategies! – Major Drivers
  • Duplicate of Tenet Healthcare Corporation: Initiation Of Coverage – Its Focus on Higher Acuity Services in Hospitals & Other Core Strategies! – Major Drivers
  • DENTSPLY SIRONA Inc.: Initiation Of Coverage – What Is Its Core Business Strategy? – Major Drivers
  • Elanco Animal Health: Initiation Of Coverage – A Story Of Concentration on Pet Health and Livestock Sustainability! – Major Drivers
  • Globus Medical Inc.: Initiation Of Coverage – Increasing Portfolio Range & 3 Critical Growth Factors
  • Graphic Packaging Holding Company: Initiation Of Coverage – These Are The 3 Biggest Challenges In Its Path! – Major Drivers
  • Ionis Pharmaceuticals Inc.: Initiation Of Coverage – Its New wholly-owned medicines and Independent launches Can Catalyze Growth? – Major Drivers

Rubrik IPO Preview and Valuation Analysis: 2024’s Hottest SaaS Investment Opportunity

By Andrei Zakharov

  • Rubrik, a leading VC-backed security software company, filed for a long-awaited IPO in the United States, with Goldman Sachs, Citigroup, Barclays and Wells Fargo leading the offering. 
  • The technology company is focused on data protection and helps organizations to protect their data and recover it in case of cyberattacks.
  • Rubrik was founded by Bipul Sinha, Arvind Nithrakashyap, Arvind Jain and Soham Mazumdar, and backed by VC investors, including Lightspeed Venture Partners, Greylock Partners and Khosla Ventures.

Acadia Healthcare Company Inc.: Initiation Of Coverage – Investment in technology to optimize infrastructure and clinical outcomes! – Major Drivers

By Baptista Research

  • Acadia Healthcare delivered a robust financial performance for 2023, marked by a 12.2% annual revenue growth, 13.1% adjusted EBITDA growth, and 14.3% adjusted EPS growth compared to 2022.
  • In the fourth quarter, its same-facility revenue rose by 10.3% on the back of rate improvements and patient day growth.
  • Acadia also saw consistent improvement in its labor trends throughout 2023.

The Boston Beer Company Inc.: Initiation Of Coverage – Is Its Positioning In The Hard Seltzer Market Its Biggest Competitive Advantage? – Major Drivers

By Baptista Research

  • The Boston Beer Company’s Fourth Quarter 2023 Earnings revealed an operational performance meeting the midpoint of their forecast, with depletions down by 6% for the year and gross margins achieving an improvement of 120 basis points.
  • However, net loss for the quarter indicated challenges, standing at $18.1 million, or $1.49 per diluted share.
  • Baptista Research looks to evaluate the different factors that could influence the company’s price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology.

Tenet Healthcare Corporation: Initiation Of Coverage – Its Focus on Higher Acuity Services in Hospitals & Other Core Strategies! – Major Drivers

By Baptista Research

  • Tenet Healthcare’s Q4 2023 earnings indicated a strong performance, with net operating revenues of $20.5 billion, and consolidated adjusted EBITDA of $3.54 billion, which translates into an attractive 17.2% adjusted EBITDA margin.
  • The company has demonstrated its ability to maintain profitability while focusing on quality and innovation.
  • Yet, some challenges were also mentioned during the earnings call.

Duplicate of Tenet Healthcare Corporation: Initiation Of Coverage – Its Focus on Higher Acuity Services in Hospitals & Other Core Strategies! – Major Drivers

By Baptista Research

  • Chemed Corporation reported their fourth quarter 2023 earnings with continued improvement in their VITAS operational metrics, including a 7% increase in admissions over the prior year period and an average daily census of 1,918.
  • This is an 11% increase in comparison to the prior year and suggests that a hiring and retention program initiated in 2022 to remedy any potential worker turnover and expand clinical workforce capacity has been successful in maintaining VITAS’ operational performance.
  • Baptista Research looks to evaluate the different factors that could influence the company’s price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology.

DENTSPLY SIRONA Inc.: Initiation Of Coverage – What Is Its Core Business Strategy? – Major Drivers

By Baptista Research

  • Examining the fourth quarter 2023 earnings for Dentsply Sirona reveals an investment thesis that emphasizes the company’s successful strategies, robust performance and rigorous financial discipline, alongside ambitious future business growth targets and consistent value creation for its stakeholders.
  • Starting with the positives, Dentsply Sirona achieved over 2% organic sales growth for 2023, outperforming projections via growth in three of its four business segments.
  • Notably, its orthodontic business experienced double-digit growth with both Byte and SureSmile.

Elanco Animal Health: Initiation Of Coverage – A Story Of Concentration on Pet Health and Livestock Sustainability! – Major Drivers

By Baptista Research

  • In Q4 2023, Elanco Animal Health reported a 5% constant currency revenue growth, driven by innovations, the strength of the farm animal business, improved conditions in the European Pet Health retail market, and increased pricing.
  • The strong performance in 2023 indicates that the company’s innovation, portfolio, and productivity strategy are working, leading to confidence in the potential success of future investments.
  • Going into 2024, the company aims to focus on three priorities: sustained revenue growth, innovation, and improved cash conversion.

Globus Medical Inc.: Initiation Of Coverage – Increasing Portfolio Range & 3 Critical Growth Factors

By Baptista Research

  • Globus Medical, a leading musculoskeletal solutions provider, has reported record revenues of $1.569 billion for the full year 2023, marking a growth of 53% compared to the previous year.
  • The strong performance includes four months of sales after its merger with NuVasive.
  • This remarkable growth maintained the company’s industry-leading profitability, generating a record non-GAAP EPS of $2.32 and an adjusted EBITDA of 30%.

Graphic Packaging Holding Company: Initiation Of Coverage – These Are The 3 Biggest Challenges In Its Path! – Major Drivers

By Baptista Research

  • Globus Medical, a leading musculoskeletal solutions provider, has reported record revenues of $1.569 billion for the full year 2023, marking a growth of 53% compared to the previous year.
  • The strong performance includes four months of sales after its merger with NuVasive.
  • This remarkable growth maintained the company’s industry-leading profitability, generating a record non-GAAP EPS of $2.32 and an adjusted EBITDA of 30%.

Ionis Pharmaceuticals Inc.: Initiation Of Coverage – Its New wholly-owned medicines and Independent launches Can Catalyze Growth? – Major Drivers

By Baptista Research

  • Ionis Pharmaceuticals Inc. had a remarkable year in 2023, with significant advancements in their RNA targeting platform and a steady stream of upcoming independent medicines delivering directly to patients.
  • The company’s forward-looking stratagem involves expanding their technology and broadening its applicability to cater to patients’ needs.
  • Baptista Research looks to evaluate the different factors that could influence the company’s price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology.

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Apr 07
0

Daily Brief Thematic (Sector/Industry): The GLP-1 Landscape in Asia and more

By | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

  • The GLP-1 Landscape in Asia
  • Japan Weekly | Stocks Lower but Global Economy Remains Strong
  • GEMWeekly (5 Apr 2024): China, South Korea Macro; Xiaomi, TSMC, NIO, SK Hynix

The GLP-1 Landscape in Asia

By Avien Pillay

  • The obesity problem has escalated at an alarming rate in Asia. 
  • Expect strong growth for GLP-1s over the next few years, however, companies that produce next-generation drugs will take the lead.
  • The significant increase in newly approved drugs will result in margin pressure – pricing will be key.

Japan Weekly | Stocks Lower but Global Economy Remains Strong

By Mark Chadwick

  • US stocks recovered on Friday after a blow-out US jobs report. However, US 10 year yields ended the week up 19bps at 4.4%
  • Japanese stocks sank for a second week as tech stocks came under selling pressure
  • The 10% move in Sumitomo Metal Mining on higher copper prices highlights strength in global economy and perhaps sign of renewed growth in China

GEMWeekly (5 Apr 2024): China, South Korea Macro; Xiaomi, TSMC, NIO, SK Hynix

By Wium Malan, CFA

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Apr 07
0

Daily Brief Equity Bottom-Up: Yaskawa (6506 JP): Start of a New Factory Automation Growth Cycle and more

By | Daily Briefs, Equity Bottom-Up

In today’s briefing:

  • Yaskawa (6506 JP): Start of a New Factory Automation Growth Cycle
  • Acadia Healthcare Company Inc.: Initiation Of Coverage – Investment in technology to optimize infrastructure and clinical outcomes! – Major Drivers
  • The Boston Beer Company Inc.: Initiation Of Coverage – Is Its Positioning In The Hard Seltzer Market Its Biggest Competitive Advantage? – Major Drivers
  • Tenet Healthcare Corporation: Initiation Of Coverage – Its Focus on Higher Acuity Services in Hospitals & Other Core Strategies! – Major Drivers
  • DENTSPLY SIRONA Inc.: Initiation Of Coverage – What Is Its Core Business Strategy? – Major Drivers
  • Duplicate of Tenet Healthcare Corporation: Initiation Of Coverage – Its Focus on Higher Acuity Services in Hospitals & Other Core Strategies! – Major Drivers
  • Elanco Animal Health: Initiation Of Coverage – A Story Of Concentration on Pet Health and Livestock Sustainability! – Major Drivers
  • Fresenius Medical Care: Initiation Of Coverage – Innovation with AR in Dialysis Training & 4 Other Major Drivers
  • Globus Medical Inc.: Initiation Of Coverage – Increasing Portfolio Range & 3 Critical Growth Factors
  • Graphic Packaging Holding Company: Initiation Of Coverage – These Are The 3 Biggest Challenges In Its Path! – Major Drivers

Yaskawa (6506 JP): Start of a New Factory Automation Growth Cycle

By Scott Foster

  • The outlook for factory automation is improving with inventory clearance, the upturn in the semiconductor industry and an AI-enhanced response to the labor shortage.
  • Yaskawa’s margins should continue to rise with renewed growth in Robotics, efficiency gains and an upgraded product line. 
  • Valuation stretched at 30x EPS guidance for FY Feb-25, but current weakness looks like a long term buying opportunity.

Acadia Healthcare Company Inc.: Initiation Of Coverage – Investment in technology to optimize infrastructure and clinical outcomes! – Major Drivers

By Baptista Research

  • Acadia Healthcare delivered a robust financial performance for 2023, marked by a 12.2% annual revenue growth, 13.1% adjusted EBITDA growth, and 14.3% adjusted EPS growth compared to 2022.
  • In the fourth quarter, its same-facility revenue rose by 10.3% on the back of rate improvements and patient day growth.
  • Acadia also saw consistent improvement in its labor trends throughout 2023.

The Boston Beer Company Inc.: Initiation Of Coverage – Is Its Positioning In The Hard Seltzer Market Its Biggest Competitive Advantage? – Major Drivers

By Baptista Research

  • The Boston Beer Company’s Fourth Quarter 2023 Earnings revealed an operational performance meeting the midpoint of their forecast, with depletions down by 6% for the year and gross margins achieving an improvement of 120 basis points.
  • However, net loss for the quarter indicated challenges, standing at $18.1 million, or $1.49 per diluted share.
  • Baptista Research looks to evaluate the different factors that could influence the company’s price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology.

Tenet Healthcare Corporation: Initiation Of Coverage – Its Focus on Higher Acuity Services in Hospitals & Other Core Strategies! – Major Drivers

By Baptista Research

  • Tenet Healthcare’s Q4 2023 earnings indicated a strong performance, with net operating revenues of $20.5 billion, and consolidated adjusted EBITDA of $3.54 billion, which translates into an attractive 17.2% adjusted EBITDA margin.
  • The company has demonstrated its ability to maintain profitability while focusing on quality and innovation.
  • Yet, some challenges were also mentioned during the earnings call.

DENTSPLY SIRONA Inc.: Initiation Of Coverage – What Is Its Core Business Strategy? – Major Drivers

By Baptista Research

  • Examining the fourth quarter 2023 earnings for Dentsply Sirona reveals an investment thesis that emphasizes the company’s successful strategies, robust performance and rigorous financial discipline, alongside ambitious future business growth targets and consistent value creation for its stakeholders.
  • Starting with the positives, Dentsply Sirona achieved over 2% organic sales growth for 2023, outperforming projections via growth in three of its four business segments.
  • Notably, its orthodontic business experienced double-digit growth with both Byte and SureSmile.

Duplicate of Tenet Healthcare Corporation: Initiation Of Coverage – Its Focus on Higher Acuity Services in Hospitals & Other Core Strategies! – Major Drivers

By Baptista Research

  • Chemed Corporation reported their fourth quarter 2023 earnings with continued improvement in their VITAS operational metrics, including a 7% increase in admissions over the prior year period and an average daily census of 1,918.
  • This is an 11% increase in comparison to the prior year and suggests that a hiring and retention program initiated in 2022 to remedy any potential worker turnover and expand clinical workforce capacity has been successful in maintaining VITAS’ operational performance.
  • Baptista Research looks to evaluate the different factors that could influence the company’s price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology.

Elanco Animal Health: Initiation Of Coverage – A Story Of Concentration on Pet Health and Livestock Sustainability! – Major Drivers

By Baptista Research

  • In Q4 2023, Elanco Animal Health reported a 5% constant currency revenue growth, driven by innovations, the strength of the farm animal business, improved conditions in the European Pet Health retail market, and increased pricing.
  • The strong performance in 2023 indicates that the company’s innovation, portfolio, and productivity strategy are working, leading to confidence in the potential success of future investments.
  • Going into 2024, the company aims to focus on three priorities: sustained revenue growth, innovation, and improved cash conversion.

Fresenius Medical Care: Initiation Of Coverage – Innovation with AR in Dialysis Training & 4 Other Major Drivers

By Baptista Research

  • Fresenius Medical Care’s Q4 2023 earnings highlighted the progress made against their strategic plan that was set out a year prior.
  • The plan focused on significant structural, operational and cultural changes, with the operating model being transformed at the start of 2023.
  • This allowed the company to introduce a new financial report with increased transparency, which reflected a commitment to their operational turnaround initiatives that aided organic growth in both segments and improved operational performance.

Globus Medical Inc.: Initiation Of Coverage – Increasing Portfolio Range & 3 Critical Growth Factors

By Baptista Research

  • Globus Medical, a leading musculoskeletal solutions provider, has reported record revenues of $1.569 billion for the full year 2023, marking a growth of 53% compared to the previous year.
  • The strong performance includes four months of sales after its merger with NuVasive.
  • This remarkable growth maintained the company’s industry-leading profitability, generating a record non-GAAP EPS of $2.32 and an adjusted EBITDA of 30%.

Graphic Packaging Holding Company: Initiation Of Coverage – These Are The 3 Biggest Challenges In Its Path! – Major Drivers

By Baptista Research

  • Globus Medical, a leading musculoskeletal solutions provider, has reported record revenues of $1.569 billion for the full year 2023, marking a growth of 53% compared to the previous year.
  • The strong performance includes four months of sales after its merger with NuVasive.
  • This remarkable growth maintained the company’s industry-leading profitability, generating a record non-GAAP EPS of $2.32 and an adjusted EBITDA of 30%.

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Apr 07
0

Daily Brief Macro: Out of the Box: 6 Reasons the Fed Will Be Hiking Rates in 2024 and more

By | Daily Briefs, Macro

In today’s briefing:

  • Out of the Box: 6 Reasons the Fed Will Be Hiking Rates in 2024
  • The Weekly Market Monitor – Gold Bugs, Debt Bubbles, and Volatility Bites
  • Portfolio Watch: The Real World Is Reflating Again

Out of the Box: 6 Reasons the Fed Will Be Hiking Rates in 2024

By Ulrik Simmelholt

  • Even though the Santa rally in US STIRS has largely been reversed, markets are still pricing in 2.5 full cuts by the end of this year or so with the first to come around summer time.
  • Currently, one of the most unappreciated risks by markets would be the Fed actually hiking rates in 2024 and thus we thought we would present 6 compelling and thought provoking arguments for why the Fed hiking in 2024 might not be impossible after all (our base case is a hold).
  • The first argument has to do with year-on-year inflation seemingly having reached its equilibrium at 3%, a range in which it has found itself for the last year or so.

The Weekly Market Monitor – Gold Bugs, Debt Bubbles, and Volatility Bites

By Jeroen Blokland

  • This week, the price of gold surged past USD 2,300 per Troy Ounce for the first time, and it was not because Western investors were rushing in.
  • Equity markets refuse to decline due to excessive fiscal stimulus, central bank eagerness to cut rates, and improving economic momentum.
  • Despite falling bond volatility, the MOVE index remains elevated relative to the VIX index, a sign of changing times.

Portfolio Watch: The Real World Is Reflating Again

By Elias Lisberg Glistrup

  • Welcome to this week’s rundown of our portfolio, its performance, and our most clear-cut conviction for the period ahead.
  • The cocktail of better economic activity and geopolitical tensions provided tailwinds for our long crude bet, which reached its take profit level Tuesday, and hence we are out of our oil position with a significant profit.
  • Most notably, and reflecting our still cyclically tilted portfolio allocations, we see growth trending higher in the cyclical parts of the economy through April on our models and nowcasts.

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Apr 07
0

Daily Brief Japan: Kokusai Electric , JSR Corp, Yaskawa Electric, Rakuten and more

By | Daily Briefs, Japan

In today’s briefing:

  • Weekly Deals Digest (07 Apr) – Kokusai Electric, HD Hyundai Marine, Langham, Jastec, JSR, Best World
  • (Mostly) Asia-Pac M&A: Austal, Best World, Isetan Singapore, Langham Hospitality, Azure, Genex Power
  • Yaskawa (6506 JP): Start of a New Factory Automation Growth Cycle
  • Last Week in Event SPACE: JSR, Austal, Rakuten, Hyundai Home Shopping, Hanmi Science

Weekly Deals Digest (07 Apr) – Kokusai Electric, HD Hyundai Marine, Langham, Jastec, JSR, Best World

By Arun George

(Mostly) Asia-Pac M&A: Austal, Best World, Isetan Singapore, Langham Hospitality, Azure, Genex Power

By David Blennerhassett

Yaskawa (6506 JP): Start of a New Factory Automation Growth Cycle

By Scott Foster

  • The outlook for factory automation is improving with inventory clearance, the upturn in the semiconductor industry and an AI-enhanced response to the labor shortage.
  • Yaskawa’s margins should continue to rise with renewed growth in Robotics, efficiency gains and an upgraded product line. 
  • Valuation stretched at 30x EPS guidance for FY Feb-25, but current weakness looks like a long term buying opportunity.

Last Week in Event SPACE: JSR, Austal, Rakuten, Hyundai Home Shopping, Hanmi Science

By David Blennerhassett

  • Murakami to tender stake in JSR Corp (4185 JP)? Maybe the “double arb”: i.e. short on swap, long on cash, will tender the cash, remain short the back end.
  • Austal Ltd (ASB AU) rejected (for now) Hanwha Ocean (042660 KS)‘s bid based on regulatory concerns.  Hanwha reckons these should not be an issue.
  • If you can tolerate owning the mobile biz, buy Rakuten (4755 JP) on dips. If not, avoid Rakuten Group and Rakuten Bank short-term; buy Rakuten Bank on larger dips.

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Apr 07
0

Daily Brief Event-Driven: (Mostly) Asia-Pac M&A: Austal and more

By | Daily Briefs, Event-Driven

In today’s briefing:

  • (Mostly) Asia-Pac M&A: Austal, Best World, Isetan Singapore, Langham Hospitality, Azure, Genex Power
  • Last Week in Event SPACE: JSR, Austal, Rakuten, Hyundai Home Shopping, Hanmi Science

(Mostly) Asia-Pac M&A: Austal, Best World, Isetan Singapore, Langham Hospitality, Azure, Genex Power

By David Blennerhassett

Last Week in Event SPACE: JSR, Austal, Rakuten, Hyundai Home Shopping, Hanmi Science

By David Blennerhassett

  • Murakami to tender stake in JSR Corp (4185 JP)? Maybe the “double arb”: i.e. short on swap, long on cash, will tender the cash, remain short the back end.
  • Austal Ltd (ASB AU) rejected (for now) Hanwha Ocean (042660 KS)‘s bid based on regulatory concerns.  Hanwha reckons these should not be an issue.
  • If you can tolerate owning the mobile biz, buy Rakuten (4755 JP) on dips. If not, avoid Rakuten Group and Rakuten Bank short-term; buy Rakuten Bank on larger dips.

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Apr 07
0

Daily Brief ECM: Weekly Deals Digest (07 Apr) – Kokusai Electric and more

By | Daily Briefs, ECM

In today’s briefing:

  • Weekly Deals Digest (07 Apr) – Kokusai Electric, HD Hyundai Marine, Langham, Jastec, JSR, Best World
  • Rubrik IPO Preview and Valuation Analysis: 2024’s Hottest SaaS Investment Opportunity

Weekly Deals Digest (07 Apr) – Kokusai Electric, HD Hyundai Marine, Langham, Jastec, JSR, Best World

By Arun George

Rubrik IPO Preview and Valuation Analysis: 2024’s Hottest SaaS Investment Opportunity

By Andrei Zakharov

  • Rubrik, a leading VC-backed security software company, filed for a long-awaited IPO in the United States, with Goldman Sachs, Citigroup, Barclays and Wells Fargo leading the offering. 
  • The technology company is focused on data protection and helps organizations to protect their data and recover it in case of cyberattacks.
  • Rubrik was founded by Bipul Sinha, Arvind Nithrakashyap, Arvind Jain and Soham Mazumdar, and backed by VC investors, including Lightspeed Venture Partners, Greylock Partners and Khosla Ventures.

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Apr 06
0

Daily Brief Industrials: AKR Corporindo, Hanwha Aerospace, Citic Resources Holdings, GDI Integrated Facility Services, Gibraltar Industries, Talgo SA and more

By | Daily Briefs, Industrials

In today’s briefing:

  • AKR Corporindo (AKRA IJ) – Industrial Chameleon
  • Hanwha Aerospace: Spin Off of Semiconductor Equipment and Video Surveillance Units
  • Citic Resource Holdings (1205.HK) – A Play on Oil and Coal Demand
  • Gdi Integrated Facility Svcs (GDI.) – Thursday, Jan 4, 2024
  • Gibraltar Industries: Investment in Digital Transformation
  • Ganz-Mavag/Talgo: Request for Offer Authorisation

AKR Corporindo (AKRA IJ) – Industrial Chameleon

By Angus Mackintosh

  • AKR Corporindo (AKRA IJ) booked an impressive finish to the year despite slower revenue growth from its trading & distribution business boosted by strong industrial plot sales at JIIPE.
  • The company expects trading & industrial volumes to improve in 2024, with retail petroleum becoming more significant with JIIPE expected to see increasing recurrent utilities earnings starting in 2H2024. 
  • AKR Corporindo has a strong pipeline of potential tenants for JIIPE and expects to expand its BP JV retail petrol stations by 40-50 this year. Valuations remain attractive.

Hanwha Aerospace: Spin Off of Semiconductor Equipment and Video Surveillance Units

By Douglas Kim

  • On 5 April, Hanwha Aerospace (012450 KS) formally announced that it will spin off its semiconductor equipment and video surveillance units which contributed to about 16% of its revenue. 
  • We are Negative on Hanwha Aerospace mainly due to valuations. Its share price has risen so much in the past year that its valuations are no longer attractive.
  • Hanwha Aerospace is trading at premium valuation to Lockheed Martin on an EV/EBITDA basis. Despite its recent strong growth, Hanwha Aerospace is no Lockheed Martin. 

Citic Resource Holdings (1205.HK) – A Play on Oil and Coal Demand

By Rikki Malik

  • One of a basket of Hong Kong commodity stocks we like
  • One off issues in 2023 which should reverse in 2024
  • Can also be viewed as  a tangential play on India’s industrial growth

Gdi Integrated Facility Svcs (GDI.) – Thursday, Jan 4, 2024

By Value Investors Club

  • Fragmented industry with growth opportunities
  • Successful acquisitions and expansion
  • Focus on customer service and reputation for excellence

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.

Gibraltar Industries: Investment in Digital Transformation

By Baptista Research

  • Gibraltar Industries’ Q4 2023 financial results presented a robust year-end performance.
  • The company’s leadership positions were expanded, the quality of earnings improved, and strong cash flows were generated.
  • Both Residential and Infrastructure perform strongly, and although the Renewable segment faced industry headwinds, it demonstrated excellent margin expansion.

Ganz-Mavag/Talgo: Request for Offer Authorisation

By Jesus Rodriguez Aguilar

  • Ganz Mavag, a public/private consortium, requests authorisation for its €5/share offer for 100% of Talgo SA (TLGO SM). It needs approvals from Spain and seven other EMEA regulators.
  • Yesterday’s close remains similar to the announcement date (7 March), gross spread of 11.3%, indicating uncertainty regarding timeline and development. The market is pricing a 48% probability of deal completion.
  • The Spanish Government will delay the authorization process. Vs. comparables and considering uncertainties regarding backlog execution, investing in the company seems somewhat risky. The risk/reward ratio is not particularly attractive.

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Apr 06
0

Daily Brief Energy/Materials: Crude Oil, Indika Energy, Medco Energi, Alternus Clean Energy Inc and more

By | Daily Briefs, Energy & Materials Sector

In today’s briefing:

  • Oil Prices Surge on OPEC+ Decision, US Inventory Buildup Slows Momentum
  • Indika Energy – Earnings Flash – FY 2023 Results – Lucror Analytics
  • Medco Energi – Earnings Flash – FY 2023 Results – Lucror Analytics
  • Alternus Clean Energy, Inc. – JV with Acadia Energy to Develop 200 MW of Microgrid Projects

Oil Prices Surge on OPEC+ Decision, US Inventory Buildup Slows Momentum

By Suhas Reddy

  • OPEC+ decides to keep output targets intact till June. Iraq and Kazakhstan vow to compensate for overproduction.
  • OPEC+ pressed its members to improve compliance with production quotas in Q22024.
  • Expansion in US crude stockpiles slightly dampens the bull run of oil prices. While gasoline and distillate drawdowns come in better-than-expectations.

Indika Energy – Earnings Flash – FY 2023 Results – Lucror Analytics

By Trung Nguyen

Indika Energy’s FY 2023 numbers were soft as projected, owing to lower coal prices and the impact of the new licence for 91%-owned PT Kideco Jaya Agung. While Indika’s financial risk profile deteriorated significantly, the credit metrics remained robust within the rating category. Liquidity stayed sound.

The company should have a more difficult year in FY 2024, with decreased selling prices, revenue and earnings expected. That said, we still believe Indika can generate positive FCF, given its low-cost position.

The company is set to redeem the c. USD 294 mn outstanding USD 5.875% 11/24 notes on May 3rd at par. While the redemption will be leverage neutral, we view the move as credit positive. Indika will only have the USD 2025 bonds remaining after the 2024 notes redemption, and these can be almost fully funded by the holdco’s cash position.

Medco Energi – Earnings Flash – FY 2023 Results – Lucror Analytics

By Leonard Law, CFA

Medco Energi’s FY 2023 numbers were acceptable in our view. The top line and margins softened, weighed down by reduced oil & gas (O&G) selling prices and slightly lower production volumes. FCF was negative and net debt increased, owing to the acquisition of a 20% stake in two O&G blocks at Oman in December. While leverage weakened, Net Debt/EBITDA remained acceptable at 2.5x at FYE 2023.

We believe earnings may continue declining in FY 2024, as management has guided for production to decrease further (mainly driven by lower working interest at Corridor Block PSC). Still, we believe Medco can generate slightly positive FCF in FY 2024 if it does not undertake new acquisitions. Liquidity is sound, and we note positively that the company’s sizeable equity stake in copper and gold mining JV Amman Mineral Internasional (listed on IDX) would provide it with meaningful financial flexibility if needed.

We revise our LARA to “Medium Risk” from “High Risk”, considering Medco’s longer reserve life and track record of proactive debt management.

Alternus Clean Energy, Inc. – JV with Acadia Energy to Develop 200 MW of Microgrid Projects

By Water Tower Research

  • Alternus Clean Energy and Acadia Energy have announced a joint venture to co-develop 200 MW of Sustainability Hub™ microgrid projects in New York State.
  • Acadia has a pipeline of 1.5-2.0 GW of renewable energy projects in New York, with an average size of 20-50 MW per project.
  • The partnership aims to develop and operate a portfolio of scalable microgrid projects over the next two to three years, which are expected to begin achieving commercial operations within two years.

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