Smartkarma Daily Briefs

Nidec faces challenges amid global EV sales decline, with shares and valuations reflecting market pessimism.
Anticipated catalysts include forthcoming guidance, potential MTP reassessment, and a strategic acquisition opportunity.
At 18x EBIT, Nidec looks a compelling play on secular themes of electrification, automation, and energy efficiency.

HD Hyundai Marine Solution IPO – Thoughts on Valuation

HD Hyundai Marine Solution (443060 KS) is looking to raise up to US$551m in its Korean IPO.
HD Hyundai Marine Solution (HMS from hereon) is a ship aftermarket service provider that provides necessary services throughout a ship’s life cycle after the delivery of a new ship.
In our previous notes, we talked about the company’s historical performance and undertook a peer comparison. In this note, we share our thoughts on valuation.

PGT Innovations Inc.: Initiation Of Coverage – Maintaining A Robust Growth Trajectory Despite Market Uncertainties! – Major Drivers

In the third quarter of 2023, PGT Innovations displayed a strong financial performance despite operating in an unpredictable market environment.
The company’s balanced exposure to new construction and repair and remodeling channels has enabled them to deliver consistent record sales and impressive profits over the year.
By combining a continued focus on operational efficiency and productivity, PGT Innovations managed to achieve a total revenue of $400 million and an adjusted EBITDA of $78 million in the third quarter.

Sai Gon Cargo Services (SCS VN) Update: Price Hikes, Strong Q1 2024 Operational Numbers

By Sameer Taneja

Sai Gon Cargo Service (SCS VN) announced an increase in its pricing (details in note) effective April 1st, with a 10% increase across most categories.
March cargo numbers showed a substantial 47% YoY increase, as cooperation with Qatar Airways got underway in February. Q1 FY24 numbers were up 34% YoY.
The stock trades at 12.5x FY24e numbers with an 8% yield, assuming a 20%YoY revenue and profit growth (and a 100% payout), with an upside to these conservative numbers.

European Airlines – Bridging Flag Carrier 1Q24 and 2024 Prospects

By Neil Glynn

We publish quarterly earnings bridges through 1Q-4Q24 for Air France-KLM, IAG and Lufthansa, which illustrate 1Q will be difficult yoy.
This renders forward commentary extremely important and summer pricing prospects are encouraging. Delta kicks off airline reporting season globally on 10 April and is likely to set a bullish tone
However the European low cost carriers easyJet, Ryanair and Wizz Air are seeing greater earnings momentum than the flag carriers given short haul fare strength.

SiteOne Landscape Supply Inc.: Initiation Of Coverage – Strategic Acquisitions & 3 Other Fundamental Aspects Fueling Its Growth! – Financial Forecasts

SiteOne Landscape Supply Inc. ended the year 2023 with notable growth in their 4th quarter, coupled with a modest increase in adjusted EBITDA, an 8% growth in net sales, and a record operating cash flow.
The company also made 11 acquisitions, adding companies with strong customer relationships while also expanding their product lines.
However, 2023 presented some challenges including lower market demand, mounting operating costs, gross margin normalization, and commodity price deflation.

Zongmu Technology Pre-IPO Tearsheet

Zongmu Technology (1491595D CH) is looking to raise up to US$150m in its upcoming HK IPO. The deal will be run by Huatai and BNP Paribas.
Zongmu Technology is a Chinese advanced driver assistance system (ADAS) solutions provider, offering solutions with comprehensive autonomous driving functions.
As a Tier 1 supplier, it undertakes software design, hardware design, system design and the integration of these components to develop solutions for mass deployment.

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Apr 05

Daily Brief Energy/Materials: Hanwha Corporation, Crude Oil, Rio Tinto Ltd, Steel, SigmaRoc, Panoro Energy ASA, Omai Gold Mines, ADF Group , Ring Energy Inc and more

By Smartkarma Daily Briefs | Daily Briefs, Energy & Materials Sector

In today’s briefing:

Hanwha Group’s Restructuring to Positively Benefit Hanwha Corp but Negatively Impact Hanwha Ocean
Dominant US Crude Production Has Transformed the Importance and Size of Strategic Petroleum Reserve
Selected European HoldCos and DLC: March’24 Report
China to Limit Steel Output as Prices Slide and Demand Falls
Sigmaroc (SRC) – Wednesday, Jan 3, 2024
Panoro Energy ASA (OSE: PEN): Heads of terms for high potential EG block
OMG: Highly Economic PEA on the Wenot Open Pit
DRX: Q4 Financials Preview
Ring Energy, Inc. – Scaling Business Through Acquisitions & Development

Hanwha Group’s Restructuring to Positively Benefit Hanwha Corp but Negatively Impact Hanwha Ocean

By Douglas Kim

We believe the new restructuring plan of the Hanwha Group is likely to have a positive impact on Hanwha Corp but could negatively impact Hanwha Ocean.
Our NAV analysis of Hanwha Corp suggests NAV of 3.2 trillion won or NAV per share of 43,168 won, which is 50% higher than current share price.
The biggest component of the valuation is Hanwha Corp’s 34% stake in Hanwha Aerospace which is worth 4.1 trillion won. (187% of Hanwha Corp’s market cap).

Dominant US Crude Production Has Transformed the Importance and Size of Strategic Petroleum Reserve

By Suhas Reddy

USA’s Strategic Petroleum Reserves (SPR) is currently at its lowest in 40 years. Should this be a source of concern? Perhaps not.
USA is the world’s largest producer of crude oil. From being vulnerable to imported oil, US has become self-reliant.
SPR expressed differently now, stands at 188 days of net imports compared to less than 100 days as was seen in the 1980s, 1990s, and early 2000s.

Selected European HoldCos and DLC: March’24 Report

By Jesus Rodriguez Aguilar

The Discounts to NAV of covered holdcos mainly widened during March. Discounts to NAV: C.F.Alba, 47.3% (vs. 47.1%); GBL, 38.15 (vs. 37.7%); Heineken Holding, 16.7% (vs. 16.5%);
Industrivärden C, 1.4% (vs. 4.4%); Investor B, 6.1% (vs. 5.6%); Porsche Automobile Holding, 45.4% (vs. 43.7%). Rio DLC spread tightened to 24.9% (vs. 25.6%), and on 26 March reached 27.7%.
What seems interesting: listed assets vs. Industrivärden C and the Rio DLC (long RIO LN/short RIO AU).

China to Limit Steel Output as Prices Slide and Demand Falls

By Caixin Global

Chinese authorities are to limit steel production while pushing forward industrywide structural adjustments as steel mills suffer from growing losses amid sluggish demand.
Several ministries led by the National Development and Reform Commission (NDRC) Wednesday said regulators will continue efforts to control crude steel production this year, focusing on energy conservation and carbon reduction.
The authorities will foster industry strengths and weed out weak players to promote the structural adjustment and optimization of the steel industry.

Sigmaroc (SRC) – Wednesday, Jan 3, 2024

By Value Investors Club

SigmaRoc (SRC) is a European aggregates/limestone operator with a strong investment opportunity due to a recent transformational acquisition
SRC is trading at a favorable valuation compared to US competitors and has outperformed in terms of EPS growth and cash flow conversion
SRC has potential for significant returns over a 3-year period supported by strong cash generation, pricing power, and limited downside risk, making it an attractive investment prospect for growth and value appreciation

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.

Panoro Energy ASA (OSE: PEN): Heads of terms for high potential EG block

By Auctus Advisors

Panoro has agreed heads of terms for the award of Block-23 in EG. Panoro could hold up to 80% WI in the block.
There will now be a period of exclusive negotiations to finalise a Production Sharing Contract.
Block EG-23 is located offshore Equatorial Guinea north of Bioko Island and adjacent to the producing Alba gas and condensate field.

OMG: Highly Economic PEA on the Wenot Open Pit

By Atrium Research

Omai announced its initial PEA on the Wenot Open Pit, reporting a highly profitable, low capex project, with substantial upside.
The PEA reported a low AISC of US$1,009/oz, IRR of 19.8%, and an after-tax NPV5% of US$556M (at US$1,950/oz Au).
The average annual production is expected to be 142Koz over a 13-year mine life, mining an average grade of 1.51 g/t Au at 92.5% recovery.

DRX: Q4 Financials Preview

By Atrium Research

ADF Group will be reporting Q4 & FY24 financial results on April 11th before market open.
For Q4, we are expecting revenue of $77.1M (+50% YoY), gross margin of 22% (vs.
18% last year), and adjusted EBITDA of $13.6M (+132% YoY).

Ring Energy, Inc. – Scaling Business Through Acquisitions & Development

By Water Tower Research

Acquisitions are expected to remain a centerpiece of management’s three-pronged strategy to increase scale in the asset base, reduce outstanding debt, and ultimately position the company to return cash to shareholders.
The Stronghold acquisition in 3Q22, followed by the Founders acquisition in 3Q23, added operational scale and inventory depth on the southern portion of the Central Basin Platform (CBP).
Together with Ring’s Northwest Shelf (NWS) assets, the inventory provides a diverse set of horizontal and vertical development opportunities.

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Apr 05

Daily Brief TMT/Internet: NVIDIA Corp, Douzone Bizon, Integral Ad Science Holding , Gorilla Technology Group and more

By Smartkarma Daily Briefs | Daily Briefs, TMT/Internet

In today’s briefing:

The Data Center is the New Compute Unit: Nvidia’s Vision for System-Level Scaling
Douzone Bizon: To Become the Fourth Internet Bank in Korea?
Integral Ad Science Holding Corp.: Initiation Of Coverage – Highlighting the 4 Central Pillars of Its Growth Dynamics! – Major Drivers
Gorilla Technology Group, Inc. – FY23 Net Earnings Turn Profitable; Revenue Up 189% Y/Y

The Data Center is the New Compute Unit: Nvidia’s Vision for System-Level Scaling

By Douglas O’Laughlin

Nvidia CEO Jensen Huang has repeatedly emphasized that the data center is the new unit of compute.
While this concept seemed straightforward at first, the deeper implications became clearer after Nvidia’s presentations at GTC and OFC 2024.
I only recently grasped exactly what is happening, and a simple reframing of the underlying principles that drove Moore’s Law makes the entire picture clearer.

Douzone Bizon: To Become the Fourth Internet Bank in Korea?

By Douglas Kim

On 4 April, Douzone Bizon (012510 KS) announced that it plans to become the fourth Internet bank in Korea. Following this news, Douzone Bizon’s share price increased by 21%.
If the company succeeds in receiving the license to operate an Internet bank, this could meaningfully impact the company’s long-term sales and profits.
If Douzone Bizone expands into the Internet banking services, it may need additional backing from strategic/financial partners including Bain Capital which has a 10.2% stake in Douzone Bizon.

Integral Ad Science Holding Corp.: Initiation Of Coverage – Highlighting the 4 Central Pillars of Its Growth Dynamics! – Major Drivers

IAS 2023 fourth quarter and full year results depict a robust performance that exceeded expectations, noting an increase of 14% in quarter four revenue to reach $134.3 million and a year growth of 16% to reach $474.4 million.
This growth marks a path for IAS’s strong commitment toward advancing the industry with its AI-driven measurement systems and optimization solutions.
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.

Gorilla Technology Group, Inc. – FY23 Net Earnings Turn Profitable; Revenue Up 189% Y/Y

By Water Tower Research

Gorilla Technology reported a very strong FY23, with adjusted EBITDA of $29.0 million, compared with ($6.0) million for FY22.
Revenue jumped 189% to $64.7 million, while gross margin increased nearly 30 points to 69.1%.
Full-year 2023 net income of $19.9 million was also a turnaround from the $87.5 million loss in 2022.

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Apr 05

Daily Brief Health Care: Basilea Pharmaceutica Ag, D.Western Therapeutics Institute Inc., SIGA Technologies and more

By Smartkarma Daily Briefs | Daily Briefs, Healthcare

In today’s briefing:

Basilea Pharmaceutica – Zevtera crosses key US regulatory hurdle
D. Western Therapeutics Institute (4576 JP) – Flurry of Pipeline Activity in 2023
SIGA Technologies – Positive signals abound

Basilea Pharmaceutica – Zevtera crosses key US regulatory hurdle

By Edison Investment Research

Basilea has announced the FDA approval of its second lead asset, Zevtera (ceftobiprole), for the treatment of severe bacterial infections (three indications), marking a major commercial win. The US is the most commercially lucrative market for Zevtera, accounting for 85–90% of its total market potential. Zevtera is already approved in several countries (including in Europe) and the FDA nod is based on three Phase III studies (including the ERADICATE and TARGET studies with R&D partly funded by the BARDA). Note that the drug holds the Qualified Infectious Disease Product (QIDP) designation, which will provide up to 10-years of market exclusivity following approval. As we await more details on the US commercial partner (expected by mid-2024), we upgrade our US probability of success (PoS) to 100%, bumping our valuation to CHF1,008.6m or CHF84.0/share (from CHF80.7/share).

D. Western Therapeutics Institute (4576 JP) – Flurry of Pipeline Activity in 2023

By Sessa Investment Research

Major milestones with high expectations coming in the next 2-3 years: 1) Phase IIb US trials for H-1337 as “first choice as a second-line Glaucoma drug” for patients who do not respond to PGs
2) 2024 application/approval and 2025 launch of DW- 1002 in Japan, 2023 application and 2024 approval/launch in China, as well as orphan drug designation for combination formula MembraneBlue-DualⓇ (DW-1002 + trypan blue) in the US,
3) in Japan, start P2 clinical trials in 2024, P3 trials in late 2025 though 2026, and normal schedule application for approval for regenerative cell-therapy DWR-2206 in 2027

SIGA Technologies – Positive signals abound

By Edison Investment Research

SIGA Technologies announced a strategic step in fortifying its distribution partner, Meridian, allowing greater control over planning and executing its international development efforts, a key growth pillar. The amended terms allow the company to actively manage future promotion activities outside the US (effective 1 June 2024). While Meridian will continue to administer existing international contracts, we expect the renegotiated terms to benefit the bottom line in the medium term as SIGA gains traction internationally. In a separate development, and one that could have a positive read-across for SIGA’s TPOXX, Bavarian Nordic, a key vaccine peer, has commenced the commercial launch of its mpox vaccine Jynneos in the US, which has only been available through the strategic national stockpile to date. We view this as a positive milestone for this therapeutic group and SIGA as TPOXX is the only approved anti-viral treatment for a range of orthopox viruses (including mpox) in Europe and is currently undergoing clinical trials in the US for expansion into mpox (presently approved for smallpox).

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Apr 05

Daily Brief Industrials: Nidec Corp, HD Hyundai Marine Solution , Pgt Inc, Sai Gon Cargo Service , International Consolidated Airlines Group, Siteone Landscape Supply, Zongmu Technology and more

By Smartkarma Daily Briefs | Daily Briefs, Industrials

In today’s briefing:

Nidec (6594) | Forget the EV Slump
HD Hyundai Marine Solution IPO – Thoughts on Valuation
PGT Innovations Inc.: Initiation Of Coverage – Maintaining A Robust Growth Trajectory Despite Market Uncertainties! – Major Drivers
Sai Gon Cargo Services (SCS VN) Update: Price Hikes, Strong Q1 2024 Operational Numbers
European Airlines – Bridging Flag Carrier 1Q24 and 2024 Prospects
SiteOne Landscape Supply Inc.: Initiation Of Coverage – Strategic Acquisitions & 3 Other Fundamental Aspects Fueling Its Growth! – Financial Forecasts
Zongmu Technology Pre-IPO Tearsheet

Nidec (6594) | Forget the EV Slump

Nidec faces challenges amid global EV sales decline, with shares and valuations reflecting market pessimism.
Anticipated catalysts include forthcoming guidance, potential MTP reassessment, and a strategic acquisition opportunity.
At 18x EBIT, Nidec looks a compelling play on secular themes of electrification, automation, and energy efficiency.

HD Hyundai Marine Solution IPO – Thoughts on Valuation

HD Hyundai Marine Solution (443060 KS) is looking to raise up to US$551m in its Korean IPO.
HD Hyundai Marine Solution (HMS from hereon) is a ship aftermarket service provider that provides necessary services throughout a ship’s life cycle after the delivery of a new ship.
In our previous notes, we talked about the company’s historical performance and undertook a peer comparison. In this note, we share our thoughts on valuation.

PGT Innovations Inc.: Initiation Of Coverage – Maintaining A Robust Growth Trajectory Despite Market Uncertainties! – Major Drivers

In the third quarter of 2023, PGT Innovations displayed a strong financial performance despite operating in an unpredictable market environment.
The company’s balanced exposure to new construction and repair and remodeling channels has enabled them to deliver consistent record sales and impressive profits over the year.
By combining a continued focus on operational efficiency and productivity, PGT Innovations managed to achieve a total revenue of $400 million and an adjusted EBITDA of $78 million in the third quarter.

Sai Gon Cargo Services (SCS VN) Update: Price Hikes, Strong Q1 2024 Operational Numbers

By Sameer Taneja

Sai Gon Cargo Service (SCS VN) announced an increase in its pricing (details in note) effective April 1st, with a 10% increase across most categories.
March cargo numbers showed a substantial 47% YoY increase, as cooperation with Qatar Airways got underway in February. Q1 FY24 numbers were up 34% YoY.
The stock trades at 12.5x FY24e numbers with an 8% yield, assuming a 20%YoY revenue and profit growth (and a 100% payout), with an upside to these conservative numbers.

European Airlines – Bridging Flag Carrier 1Q24 and 2024 Prospects

By Neil Glynn

We publish quarterly earnings bridges through 1Q-4Q24 for Air France-KLM, IAG and Lufthansa, which illustrate 1Q will be difficult yoy.
This renders forward commentary extremely important and summer pricing prospects are encouraging. Delta kicks off airline reporting season globally on 10 April and is likely to set a bullish tone
However the European low cost carriers easyJet, Ryanair and Wizz Air are seeing greater earnings momentum than the flag carriers given short haul fare strength.

SiteOne Landscape Supply Inc.: Initiation Of Coverage – Strategic Acquisitions & 3 Other Fundamental Aspects Fueling Its Growth! – Financial Forecasts

SiteOne Landscape Supply Inc. ended the year 2023 with notable growth in their 4th quarter, coupled with a modest increase in adjusted EBITDA, an 8% growth in net sales, and a record operating cash flow.
The company also made 11 acquisitions, adding companies with strong customer relationships while also expanding their product lines.
However, 2023 presented some challenges including lower market demand, mounting operating costs, gross margin normalization, and commodity price deflation.

Zongmu Technology Pre-IPO Tearsheet

Zongmu Technology (1491595D CH) is looking to raise up to US$150m in its upcoming HK IPO. The deal will be run by Huatai and BNP Paribas.
Zongmu Technology is a Chinese advanced driver assistance system (ADAS) solutions provider, offering solutions with comprehensive autonomous driving functions.
As a Tier 1 supplier, it undertakes software design, hardware design, system design and the integration of these components to develop solutions for mass deployment.

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Apr 05

Daily Brief Consumer: Hyundai Home Shopping Network, Best World International, Crizac, Anta Sports Products, Papa John’S Intl, DPC Dash, Arcos Dorados Holdings , Post Holdings, Sprouts Farmers Market, Calavo Growers and more

By Smartkarma Daily Briefs | Consumer, Daily Briefs

In today’s briefing:

Hyundai Home Shopping (057050 KS)’s Partial Offer
Best World (BEST SP): Not the Best Exit Offer
Crizac Pre-IPO Tearsheet
Anta Sports (2020 HK): Sustains Strengths into FY24
Papa John’s International Inc.: Initiation Of Coverage – Are Its Growth Prospects As Delicious As Its Pizza? – Major Drivers
DPC Dash (1405 HK): Margin Potential Underappreciated
Arcos Dorados Holdings Inc.: Initiation Of Coverage – Exploring the 4 Core Influencers of Its Growth Trajectory! – Major Drivers
Post Holdings Inc.: Initiation Of Coverage – Is Its Resilient Supply Chain Performance Likely To Last? – Major Drivers
Sprouts Farmers Market Inc.: Initiation Of Coverage – Effective Private Brand Expansion & 3 Critical Growth Drivers In 2024 & Beyond! – Financial Forecasts
Calavo Growers Inc (CVGW) – Thursday, Jan 4, 2024

Hyundai Home Shopping (057050 KS)’s Partial Offer

Yesterday, the 3rd April, Hyundai G.F. Holdings (005440 KS) announced it would conduct a Tender Offer for 3mn shares, or 25% of Hyundai Home Shopping Network (057050 KS) (HHSN).
A successful Tender would lift Holdings stake to 50% from 25% currently, satisfying the 30% holding company threshold introduced in 2022.
Minimum proration is 33%. Shares popped 13.8% on the news. That looks a bit too aggressive.

Best World (BEST SP): Not the Best Exit Offer

Best World International (BEST SP) has disclosed an exit offer through selective capital raising and delisting. The offer of S$2.50 is a 42.9% premium to the undisturbed price of S$1.75.
The key conditions are approval for the selective capital reduction (at least 75% of eligible shareholders) and delisting resolution (a majority holding not less than 75% in value).
The headcount test is a risk. The offer is light as only 66.7% of retained earnings will be distributed and the consideration will be covered 1.6x by the net cash.

Crizac Pre-IPO Tearsheet

By Sumeet Singh

Crizac is looking to raise US$120m in its upcoming India IPO. The bookrunners on the deal are Equirus and Anand Rathi.
Crizac is an education platform offering international student recruitment solutions to global institutions of higher education in the United Kingdom, Canada, Republic of Ireland, Australia and New Zealand (ANZ).
Crizac is one of the largest student recruitment solutions providers from India to the UK with a market share of 13.0%, in terms of the number of students in 2023.

Anta Sports (2020 HK): Sustains Strengths into FY24

By Osbert Tang, CFA

After a solid FY23, Anta Sports Products (2020 HK)‘s outlook for FY24 looks equally encouraging. Its various brands are expected to grow by 10-30% YoY still.
Listing of Amer Sports (AS US) will provide Rmb1.6bn non-recurring gain in 1H24. For the full year, there will be a positive swing in its profit contribution.
Anta Sports can be considered as a sportswear brand incubator, and its premium PERs of 18.3x and 15.9x for FY24 and FY25 reflect the ability to brew new brands.

Papa John’s International Inc.: Initiation Of Coverage – Are Its Growth Prospects As Delicious As Its Pizza? – Major Drivers

Papa John’s International, Inc. reported another year of record global system-wide sales for the fourth consecutive year of positive North America comps in 2023.
The company’s success is attributed to the dedication and focus of its team, franchisees, and the restructuring efforts, especially the foundation improvements to restaurant operations, menu amelioration with novel products, the digital advancements of their operations platforms, and the expansion of the restaurant footprint.
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.

DPC Dash (1405 HK): Margin Potential Underappreciated

By Eric Chen

We believe consensus has not fully captured the company’s margin upside for FY24/25, likely due to management’s excessively conservative guidances.
Our confidence is underpinned by positive SSSG trend, accelerating store expansion and clear trajectory for store margin improvement.
We expect the company to generate RMB150/320 million adjusted net profit for FY24/25 respectively, compared to RMB30/150 million baked in consensus. Reiterate buy with HK$80 target price (30x FY25 earnings).

Arcos Dorados Holdings Inc.: Initiation Of Coverage – Exploring the 4 Core Influencers of Its Growth Trajectory! – Major Drivers

Arcos Dorados Holdings Inc., also known as “Golden Arches,” recorded a strong performance for the full financial year and fourth quarter of 2023, supported by the company’s 3D’s strategy – Digital, Delivery, and Drive-thru.
This strategy emphasizes expanding digital sales using mobile apps and self-order kiosks, which have quickly penetrated every market.
Arcos Dorados also emphasized delivery sales and modernizing its restaurants to improve customer experience.

Post Holdings Inc.: Initiation Of Coverage – Is Its Resilient Supply Chain Performance Likely To Last? – Major Drivers

Post Holdings began fiscal 2024 with a strong first quarter, with manufacturing performance, pricing and cost management aiding in growth momentum.
Diverse channel, product, and price point offerings have allowed the company to weather various volume fluctuations.
Although volume decreases were observed in branded retail businesses, Foodservice remained strong with shifts toward value offerings and positive momentum in their Refrigerated Retail business.

Sprouts Farmers Market Inc.: Initiation Of Coverage – Effective Private Brand Expansion & 3 Critical Growth Drivers In 2024 & Beyond! – Financial Forecasts

Sprouts Farmers Market’s 4th Quarter 2023 Earnings demonstrated a decent performance.
Positives include a 7% sales growth for the year while maintaining a stable margin, as well as a 19% increase in their adjusted diluted earnings per share.
The company’s focus on specialty positioning in order to provide quality, differentiated, and healthy food products appears to be paying off, as indicated in the results.

Calavo Growers Inc (CVGW) – Thursday, Jan 4, 2024

By Value Investors Club

Calavo, a key player in the avocado industry, is currently experiencing a minor turnaround
The investment thesis is based on “information arbitrage” and potential growth in earnings and share price
Despite previous short write-ups, the focus now is on Calavo’s near-term turnaround rather than industry issues

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Apr 05

Daily Brief Financials: Suruga Bank Ltd, Langham Hospitality Inv Ss, ZhongAn Online P&C Insurance C, H&T Group Plc, Bitcoin, China Vanke and more

By Smartkarma Daily Briefs | Daily Briefs, Financials

In today’s briefing:

Suruga Bank (8358 JP) – New Div, New Buyback, New KPIs, New 6yr High Price
Great Eagle Seeks To Delist Langham Hospitality (1270 HK)
Baba’s Babies: Co-Parenting Works! Zhong An Online P&C Insurance
H&T Group (HAT): Core franchise build, short-term retail noise
Crypto Moves #22 – The 2024 Bitcoin Halving Will Be A ‘Buy the Rumor, Sell the News’ Event
Morning Views Asia: China Vanke , Indika Energy, Vedanta Resources

Suruga Bank (8358 JP) – New Div, New Buyback, New KPIs, New 6yr High Price

By Travis Lundy

10+ Months ago, Suruga Bank Ltd (8358 JP) announced it would sell a large chunk of its treasury shares to Credit Saison and would then buy back ¥22bn of stock.
I liked the odds in Suruga Bank (8358) To Sell, Then Buy Back 17% of the Bank, but HOW Is Key. They spent the ¥22bn. The stock rose a lot.
Today, we get a div hike for H2 (implying a div hike for this year too), another buyback, a huge share cancellation, and new KPIs. As always, details matter.

Great Eagle Seeks To Delist Langham Hospitality (1270 HK)

Hong Kong hotel-play Langham Hospitality (1270 HK) was spun-off from Great Eagle (41 HK) on the 30 May 2013. Now GE intends to take the company back into the fold.
Covid was devastating to the hospitality sector. As were the 2019 demonstrations. Langham’s share price never recovered, and is currently trading at a lifetime low and a P/B of 0.21x.
No price was mentioned in the announcement. Expect a healthy premium to undisturbed, should a firm Offer unfold. But I wouldn’t expect a knockout price.

Baba’s Babies: Co-Parenting Works! Zhong An Online P&C Insurance

By David Mudd

ZhongAn Online P&C Insurance C (6060 HK) is benefiting from the cross-selling opportunities generated through the eco-systems of Alibaba Group Holding (9988 HK) and Tencent (700 HK), its parent companies
Largest solely online insurance company in China with Rmb 30B gross premiums written in 2023.
Expertise and cross-selling from Ping An Insurance (H) (2318 HK) , another parent company with a jointly run auto insurance business.

H&T Group (HAT): Core franchise build, short-term retail noise

By Hardman & Co

In our 15 March 2023 initiation, ‘Pawnbroking royalty, with strong, profitable growth’, and subsequent notes, we have highlighted the strong market for pawnbroking and why H&T, as the market leader, is uniquely placed to take advantage of these opportunities.
These results reconfirmed both, with the pledge book up 28% and net pawnbroking revenue up 36%.
Like many in the retail space, H&T faced the challenge of customers focusing on lower-value, lower-margin items in the key run-up to Christmas 2023.

Crypto Moves #22 – The 2024 Bitcoin Halving Will Be A ‘Buy the Rumor, Sell the News’ Event

By Mads Eberhardt

We are swiftly approaching the fourth Bitcoin halving, which is expected to take place at block number 840,000.
Currently, the network has reached a block height of approximately 837,700.
Bitcoin experiences a halving event every 210,000 blocks.

Morning Views Asia: China Vanke , Indika Energy, 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.

China Vanke
Indika Energy
Vedanta Resources

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Apr 05

Most Read: Kokusai Electric , Li Auto , Hyundai Home Shopping Network, Best World International, Suruga Bank Ltd, Langham Hospitality Inv Ss, Nidec Corp, Oriental Watch, HD Hyundai Marine Solution and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

Kokusai Electric (6525 JP): The US$4.8 Billion Lock up Expiry
HSTECH Index Rebalance Preview: Round-Trip Trade of US$1.5bn in June
Langham Hospitality Investments (1270 HK): Great Eagle (41 HK)’s Possible Scheme Privatisation
Hyundai Home Shopping (057050 KS)’s Partial Offer
Best World (BEST SP): Not the Best Exit Offer
Suruga Bank (8358 JP) – New Div, New Buyback, New KPIs, New 6yr High Price
Great Eagle Seeks To Delist Langham Hospitality (1270 HK)
Nidec (6594) | Forget the EV Slump
Oriental Watch 398 HK: Slow 4Q FY24, Resting On A 14% Yield, With 70% of Mkt Cap in Cash
HD Hyundai Marine Solution IPO – Thoughts on Valuation

Kokusai Electric (6525 JP): The US$4.8 Billion Lock up Expiry

Kokusai Electric (6525 JP)’s 180-day IPO lock-up period for 71% of outstanding shares expires on 22 April. The shares exiting the lock-up period are worth US$4.8 billion.
The likely seller will be KKR & (KKR US) as it was the sole selling shareholder in the IPO. The shares are currently trading at 2.4x the IPO price.
Kokusai anticipates a return to growth and margin improvement in FY24. However, Kokusai trades at a material premium to peer multiples and is fully priced.

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).

Langham Hospitality Investments (1270 HK): Great Eagle (41 HK)’s Possible Scheme Privatisation

Langham Hospitality Inv Ss (1270 HK) received a notice from Great Eagle Holdings (41 HK), the largest unitholder, that it intends to present a detailed proposal for scheme privatisation.
The privatisation interest is unsurprising, as the unit price has declined by 43% over the last twelve months. A tough 2023 did not help the declining sentiment.
Our methodology for triangulating the potential offer price results in a range of HK$0.63-1.76. Our best guess is an offer of around HK$0.85, a 47% premium to the last close.

Hyundai Home Shopping (057050 KS)’s Partial Offer

Yesterday, the 3rd April, Hyundai G.F. Holdings (005440 KS) announced it would conduct a Tender Offer for 3mn shares, or 25% of Hyundai Home Shopping Network (057050 KS) (HHSN).
A successful Tender would lift Holdings stake to 50% from 25% currently, satisfying the 30% holding company threshold introduced in 2022.
Minimum proration is 33%. Shares popped 13.8% on the news. That looks a bit too aggressive.

Best World (BEST SP): Not the Best Exit Offer

Best World International (BEST SP) has disclosed an exit offer through selective capital raising and delisting. The offer of S$2.50 is a 42.9% premium to the undisturbed price of S$1.75.
The key conditions are approval for the selective capital reduction (at least 75% of eligible shareholders) and delisting resolution (a majority holding not less than 75% in value).
The headcount test is a risk. The offer is light as only 66.7% of retained earnings will be distributed and the consideration will be covered 1.6x by the net cash.

Suruga Bank (8358 JP) – New Div, New Buyback, New KPIs, New 6yr High Price

By Travis Lundy

10+ Months ago, Suruga Bank Ltd (8358 JP) announced it would sell a large chunk of its treasury shares to Credit Saison and would then buy back ¥22bn of stock.
I liked the odds in Suruga Bank (8358) To Sell, Then Buy Back 17% of the Bank, but HOW Is Key. They spent the ¥22bn. The stock rose a lot.
Today, we get a div hike for H2 (implying a div hike for this year too), another buyback, a huge share cancellation, and new KPIs. As always, details matter.

Great Eagle Seeks To Delist Langham Hospitality (1270 HK)

Hong Kong hotel-play Langham Hospitality (1270 HK) was spun-off from Great Eagle (41 HK) on the 30 May 2013. Now GE intends to take the company back into the fold.
Covid was devastating to the hospitality sector. As were the 2019 demonstrations. Langham’s share price never recovered, and is currently trading at a lifetime low and a P/B of 0.21x.
No price was mentioned in the announcement. Expect a healthy premium to undisturbed, should a firm Offer unfold. But I wouldn’t expect a knockout price.

Nidec (6594) | Forget the EV Slump

Nidec faces challenges amid global EV sales decline, with shares and valuations reflecting market pessimism.
Anticipated catalysts include forthcoming guidance, potential MTP reassessment, and a strategic acquisition opportunity.
At 18x EBIT, Nidec looks a compelling play on secular themes of electrification, automation, and energy efficiency.

Oriental Watch 398 HK: Slow 4Q FY24, Resting On A 14% Yield, With 70% of Mkt Cap in Cash

By Sameer Taneja

Oriental Watch (398 HK) has begun Q4 2024 slowly, with its SSSG dropping by double-digit levels in all its major markets (HK/China and Macau).
As the year almost draws to a close, we expect profits to drop 10-15% YoY for FY24 and the company to pay out 100%, resulting in a 14% dividend yield.
The company also has 1.2 bn HKD of net cash, representing 70% of its market capitalization. Additionally, it has 700 mn HKD of investment property.

HD Hyundai Marine Solution IPO – Thoughts on Valuation

HD Hyundai Marine Solution (443060 KS) is looking to raise up to US$551m in its Korean IPO.
HD Hyundai Marine Solution (HMS from hereon) is a ship aftermarket service provider that provides necessary services throughout a ship’s life cycle after the delivery of a new ship.
In our previous notes, we talked about the company’s historical performance and undertook a peer comparison. In this note, we share our thoughts on valuation.

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✓ Unlimited Research Summaries
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✓ Custom Watchlists
✓ Company Analytics and News
✓ Events & Webinars

Apr 05

Daily Brief Quantitative Analysis: Northbound Flows (Mar): $3.7bn of Inflows and more

By Smartkarma Daily Briefs | Daily Briefs, Quantitative Analysis

In today’s briefing:

Northbound Flows (Mar): $3.7bn of Inflows
Hong Kong Connect Flows (Mar): 12 Month High of $9.8bn Inflows
ASX Short Interest Weekly (Mar 29th): Brambles, Bellevue Gold, Domino’s Pizza

Northbound Flows (Mar): $3.7bn of Inflows

By Ke Yan, CFA, FRM

We analyze the monthly Shanghai/Shenzhen northbound Connect flows with our data engine.
Industrials, Consumer Staples, Financials led the inflows while Health Care led the outflows.
We highlight flows for CATL, Wuliangye, Midea, Zijin Mining, Will Semi, Wuxi Apptec, Foxconn, Mindray.

Hong Kong Connect Flows (Mar): 12 Month High of $9.8bn Inflows

By Ke Yan, CFA, FRM

We analyze the monthly Hong Kong Connect flows with our data engine.
We tabulate the top stocks by inflows, outflows, and holding by mainland investors.
We highlight inflows for Bank of China, Tencent, China Mobile, CNOOC, ZTO, Anta.

ASX Short Interest Weekly (Mar 29th): Brambles, Bellevue Gold, Domino’s Pizza

By Ke Yan, CFA, FRM

We analyzed the changes in short interest of ASX Stocks as of Mar 29th (reported today) which has an aggregated short interest worth USD18.6bn.
We tabulate league table for top short by value and short as multiple of ADT, as well as weekly increases & decreases in short value, short as multiple of ADT.
We highlight short interest changes in Brambles, Bellevue Gold, Domino’s Pizza.

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

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

Apr 05

Daily Brief Thematic (Sector/Industry): A Surprising Winner in the US-China Chip Wars and more

By Smartkarma Daily Briefs | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

A Surprising Winner in the US-China Chip Wars
Ohayo Japan | Market Volatility Ahead of Jobs Report
China’s Conventional Carmakers Try to Cash In on Hybrids’ Growing Popularity

A Surprising Winner in the US-China Chip Wars

By Behind the Money

Penang is experiencing a new boom in semiconductor chip manufacturing, attracting investment from international companies
Malaysia has a 50-year history in the semiconductor supply chain, with a focus on the back end processes such as packaging, assembly, and testing
Malaysia is capitalizing on the US-China chip war and emerging as an unexpected winner in the global supply chain, receiving $12.8 billion in foreign direct investment in 2023

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

Ohayo Japan | Market Volatility Ahead of Jobs Report