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Smartkarma Daily Briefs

Mar 20
0

Daily Brief Indonesia: Cisarua Mountain Dairy, MGM China Holdings and more

By | Daily Briefs, Indonesia

In today’s briefing:

  • Cisarua Mountain Dairy (CMRY IJ) – Increasingly Accessible Protein Provider
  • Morning Views Asia: Delta Dunia Makmur, MGM China Holdings

Cisarua Mountain Dairy (CMRY IJ) – Increasingly Accessible Protein Provider

By Angus Mackintosh

  • Cisarua Mountain Dairy (CMRY IJ) held an analyst call after its results, revealing a positive outlook for dairy products and premium consumer foods, with potentially higher margins ahead.
  • The company launched several new products in 2023, with more of a focus on affordability through yoghurt sticks. It will launch more affordable Kanzler Singles in 2H2024.
  • Cisarua Mountain Dairy will expand distribution through general trade and Miss Cimory MCM, with ongoing sales & marketing spending. Valuations remain attractive relative to growth and returns. 

Morning Views Asia: Delta Dunia Makmur, MGM China Holdings

By Leonard Law, CFA

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

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Mar 20
0

Daily Brief India: Aditya Birla Sun Life AMC, Edelweiss Financial Services, Baazar Style Retail , Nuvama Wealth Management and more

By | Daily Briefs, India

In today’s briefing:

  • Aditya Birla Sun Life AMC OFS – Share Price Has Corrected in Anticipation of the Current Deal
  • Edelweiss: Scaling Up Well
  • Baazar Style Retail Limited Pre-IPO Tear Sheet
  • Nuvama: Stellar Growth Continues

Aditya Birla Sun Life AMC OFS – Share Price Has Corrected in Anticipation of the Current Deal

By Clarence Chu

  • Promoters in Aditya Birla Sun Life AMC (ABSLAMC IN) are looking to raise US$189m via an offer for sale (OFS). This assumes that the over-allotment option is exercised.
  • This appears to be done in a bid to meet SEBI’s 75% free-float requirement for listed firms in India. .
  • News of the selldown had surfaced a week earlier leading to a correction in share price. As such, we would argue that the deal here is well flagged

Edelweiss: Scaling Up Well

By Ankit Agrawal, CFA

  • Edelweiss Financial Services (“Edelweiss”) reported a steady Q3FY24 led by robust profitability from across businesses except insurance, which is in gestation phase. All its businesses are scaling up well.
  • Edelweiss’ credit business reported good traction in co-lending. 80% and 32% of the disbursals in the NBFC and the HFC businesses, respectively, came from co-lending. 
  • Within the asset management vertical, the mutual fund business is growing well with 23% YoY growth in overall AUM and 47% YoY growth in equity AUM.

Baazar Style Retail Limited Pre-IPO Tear Sheet

By Tina Banerjee

  • Baazar Style Retail (1635104D IN) is the fastest growing value retailer in eastern and north- eastern India, with market leadership in West Bengal, Odisha, and Assam.
  • The proposed IPO is a combination of fresh issue of equity shares worth INR1,850M and OFS of up to 16.9M equity shares by promoter group entities and other selling shareholders. 
  • The company may consider raising INR370M in a pre-IPO placement round. If the pre-IPO placement is undertaken, the amount raised from such placement will be reduced from the fresh issue.

Nuvama: Stellar Growth Continues

By Ankit Agrawal, CFA

  • Nuvama Wealth Management (“Nuvama”) has been seeing strong growth across all its businesses. Wealth management business is scaling up well. Capital markets business continues to benefit from the upbeat cycle.
  • The asset management business is in its infancy but is scaling up well. Nuvama launched a new real estate fund via a 50:50 JV with Cushman & Wakefield.
  • Given wealth management is still nascent in India; the growth potential is huge for Nuvama. At the current valuation, an investment in Nuvama has potential to more than triple.

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Mar 20
0

Daily Brief United States: Reddit , Southern Copper, Endeavor Group Holdings , Global Business Travel Group I, GoodRx Holdings Inc, Autozone Inc, Synopsys Inc, Vail Resorts, BJ’s Wholesale Club Holdings, elf Beauty Inc and more

By | Daily Briefs, United States

In today’s briefing:

  • Reddit IPO – Well-Known Brand but Sustainability of Growth Is Questionable
  • Upgrading Materials to Market Weight; Rotation into Commodity Sectors; SPX/NDX Holding Above Support
  • Endeavor Group Holdings (EDR) – Tuesday, Dec 19, 2023
  • Global Business Travel Group Inc.: Initiation Of Coverage – Emphasis on Digital Transactions
  • GoodRx Holdings Inc.: Initiation Of Coverage – 4 Pivotal Factors That Are Shaping Its Growth Journey! – Major Drivers
  • AutoZone Inc.: 6 Pivotal Factors That Are Shaping Its Growth Journey! – Major Drivers
  • Synopsys Inc (SNPS) – Tuesday, Dec 19, 2023
  • Vail Resorts: Initiation Of Coverage – Its Dynamic Pricing Strategy & High Customer Loyalty Are Potential Game Changers! – Major Drivers
  • BJ’s Wholesale Club Holdings: Initiation Of Coverage – Decoding the 4 Primary Contributors to Its Growth Surge! – Major Drivers
  • e.l.f. Beauty Inc.: Initiation Of Coverage – The 4 Fundamental Aspects Fueling Its Growth Uncovered! – Major Drivers

Reddit IPO – Well-Known Brand but Sustainability of Growth Is Questionable

By Ethan Aw

  • Reddit (RDDT US) is looking to raise up to US$750m in its US IPO. 
  • Reddit is an online social media platform where users are able to join communities, engage in conversations, research, exchange goods and services as well as create new communities.  
  • In this note, we talk about the company’s historical performance.

Upgrading Materials to Market Weight; Rotation into Commodity Sectors; SPX/NDX Holding Above Support

By Joe Jasper

  • We have discussed for weeks that we will need to see the SPX and Nasdaq 100 close below their 20-day MAs for 2-3 consecutive days in order to get cautious.
  • This still hasn’t happened (short-term trend remains bullish). If we get 2-3 closes below the 20-dayMAs, next support would be 4983-5050 on SPX, $425-$433 on QQQ (gap supports from 2/22/24)
  • If some or all of these gaps remain unfilled, it is a sign that bulls remain in control. We are seeing a rotation into commodity Sectors, we highlight several buys

Endeavor Group Holdings (EDR) – Tuesday, Dec 19, 2023

By Value Investors Club

  • EDR is likely to be acquired at a premium price in the near future, offering an attractive risk-reward opportunity for investors.
  • Key assets like a stake in TKO, talent representation business (WME), and events business (EE&R) are considered valuable to potential buyers.
  • EDR announced a review of strategic alternatives on 10/25/23, with CEO Ariel Emanuel noting the need to maximize value for shareholders due to a disconnection between stock price and asset value.

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.

Global Business Travel Group Inc.: Initiation Of Coverage – Emphasis on Digital Transactions

By Baptista Research

  • This is our first report on American Express Global Business Travel (GBT).
  • The company recently released Q4 2023 earnings.
  • On a positive note, the company delivered impressive financial results, with standout numbers including 24% year-over-year revenue growth and a roughly fourfold increase in adjusted EBITDA. Paul Abbott, CEO, attributed this strong performance to share gains and a focus on margin expansion.

GoodRx Holdings Inc.: Initiation Of Coverage – 4 Pivotal Factors That Are Shaping Its Growth Journey! – Major Drivers

By Baptista Research

  • This is our first report on GoodRx Holdings Inc.
  • The company announced its fourth-quarter earnings and highlighted significant progress which included saving consumers approximately $15 billion last year, increasing their access to affordable medications while expanding their relationships with retail partners through hybrid retail direct and Pharmacy Benefit Manager (PBM) contracting and cost savings initiatives.
  • 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.

AutoZone Inc.: 6 Pivotal Factors That Are Shaping Its Growth Journey! – Major Drivers

By Baptista Research

  • AutoZone’s Q2 2024 earnings were decent and the company reported an increase in total sales by 4.6%, and same-store sales by 1.5% on a constant currency basis.
  • The management is banking on strong international growth prospects for the short and long terms and has plans to accelerate new store openings over the coming years.
  • Operating profit and earnings per share grew by double-digit rates, a continuation of the strong performance seen in recent years.

Synopsys Inc (SNPS) – Tuesday, Dec 19, 2023

By Value Investors Club

  • Synopsys (SNPS) is recommended as a good long-term holding
  • Software Integrity business likely to be divested to improve overall profitability
  • EDA and IP divisions of the company have been performing well with adjusted operating margins of over 30%

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.

Vail Resorts: Initiation Of Coverage – Its Dynamic Pricing Strategy & High Customer Loyalty Are Potential Game Changers! – Major Drivers

By Baptista Research

  • This is our first report on Vail Resorts.
  • The company’ fiscal 2024 second quarter results, presented during their recent earnings call, reflect a business model demonstrating resilience despite unfavorable conditions across its North American resorts.
  • There was approximately 42% lower snowfall across their Western North American resorts compared to the same period in the previous year.

BJ’s Wholesale Club Holdings: Initiation Of Coverage – Decoding the 4 Primary Contributors to Its Growth Surge! – Major Drivers

By Baptista Research

  • This is our first report on BJ’s Wholesale Club.
  • In the fourth quarter of 2023, BJ’s Wholesale Club Holdings delivered strong results underpinned by the growth in membership, traffic, and market share.
  • The company achieved comparable club sales growth (excluding gas sales) of 0.5% for the quarter, bringing the full-year figure to 1.7%.

e.l.f. Beauty Inc.: Initiation Of Coverage – The 4 Fundamental Aspects Fueling Its Growth Uncovered! – Major Drivers

By Baptista Research

  • This is our first report on cosmetics player, e.l.f Beauty.
  • The company’s third quarter 2022 earnings call ended with the company experiencing significant growth across the board.
  • CEO, Tarang Amin highlighted that net sales increased by 85%, gross margin by nearly 350 basis points and adjusted EBITDA by 61%, compared to the previous year.

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Mar 20
0

Daily Brief China: Swire Pacific (A), Sciclone Pharmaceuticals, Tencent, Sun Art Retail, Longfor Properties, West China Cement, WuXi AppTec, Taste Gourmet and more

By | China, Daily Briefs

In today’s briefing:

  • Swire Pac (19 HK): Flying High
  • SciClone Pharma (6600 HK): GL Capital Consortium Reload?
  • Tencent (700 HK): Gross Margins, Cost Cutting Likely to Be Focus Going into Q4 FY23 Results
  • SciClone Pharma (6600 HK): Privatisation Déjà Vu All over Again?
  • Sun Art (6808 HK):  Potential Divestiture By Alibaba Worth A Bet
  • Morning Views Asia: Adani Green Energy, Azure Power Global Ltd, Greenko Energy Holdings
  • Morning Views Asia: Adani Green Energy, Azure Power Global Ltd, Greenko Energy Holdings
  • West China Cement – Earnings Flash – FY 2023 Results – Lucror Analytics
  • WuXi AppTec (2359.HK/603259.CH) 2023 Results – Time to Prepare for the Worst
  • Taste Gourmet (8371 HK): Earnings Preview FY24

Swire Pac (19 HK): Flying High

By David Blennerhassett

SciClone Pharma (6600 HK): GL Capital Consortium Reload?

By David Blennerhassett

  • A little over a year ago, shareholders approved Sciclone Pharmaceuticals (6600 HK)‘s buyback, which lifted GL Capital’s holding to 31.63% from 28.09%, enabling creep provisions.
  • After the share price gained 14% yesterday, SciClone was suspended pursuant to the Code on Takeovers and Mergers before trading commenced this morning. Mmm.
  • GL Capital, together with CDH Investments, Ascendent Capital Partner, Ocean Falcon Limited, and Boying Investments Limited, took SciClone private in 2017. Time for another privatisation?

Tencent (700 HK): Gross Margins, Cost Cutting Likely to Be Focus Going into Q4 FY23 Results

By Charlotte van Tiddens, CFA

  • Tencent is due to release FY23 results tomorrow morning after the HK close. The earnings call is scheduled for 14:00 SAST.
  • The market is expecting 1.8% QoQ revenue growth, 8.6% YoY. Strong QoQ revenue growth of 10% is expected for the advertising segment.
  • QoQ revenue growth for the gaming sector is expected to decline by 4.9%. Domestic gaming revenue is expected to fall by 7.6%, international gaming revenue expected to increase by 9.6%.

SciClone Pharma (6600 HK): Privatisation Déjà Vu All over Again?

By Arun George

  • After rising 14% on Monday, Sciclone Pharmaceuticals (6600 HK) entered a trading halt “pending the release of an announcement pursuant to the Code on Takeovers and Mergers.”
  • SciClone US was listed on NASDAQ in March 1992 and was privatised in October 2017 by a GL Capital-led consortium. It was relisted on the HKEx on 3 March 2021.
  • A GL Capital-led consortium will likely once again lead the privatisation. An offer price at or slightly above the IPO price (HK$18.80) would be sufficient to get the vote up.

Sun Art (6808 HK):  Potential Divestiture By Alibaba Worth A Bet

By Steve Zhou, CFA

  • According to public news two days ago, COFCO Group is rumored to be a potential suitor for Alibaba’s 78% stake in Sun Art Retail (6808 HK).
  • Alibaba wants to eventually get rid of the Sun Art stake, especially after Alibaba’s management change in late 2023.  
  • Given limited downside, I believe it is worth a bet on the uncertain timeline but certain intention of the eventual divestiture of Sun Art by Alibaba.

Morning Views Asia: Adani Green Energy, Azure Power Global Ltd, Greenko Energy Holdings

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.

Morning Views Asia: Adani Green Energy, Azure Power Global Ltd, Greenko Energy Holdings

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.

West China Cement – Earnings Flash – FY 2023 Results – Lucror Analytics

By Leonard Law, CFA

West China Cement’s (WCC) FY 2023 results were soft, but in line with expectations. The company’s profitability in Mainland China continued to weaken, albeit this was partly offset by rising sales volumes and ASP from its African operations. As a result, operating profit in Africa climbed above that for Mainland China for the first time, with the African segment accounting for 31% of total revenue and 74% of operating profit.

In our view, the key risk for investors is WCC’s seemingly relentless expansion in Africa, which is likely to further weaken its leverage. Moreover, we are concerned that further expansion in this region will fundamentally change WCC’s risk profile from a relatively stable infrastructure-led Chinese business to one that is highly exposed to event risks in frontier markets. The company’s African businesses could be exposed to higher geopolitical, regulatory and ESG risks, which are less well understood by investors.

WuXi AppTec (2359.HK/603259.CH) 2023 Results – Time to Prepare for the Worst

By Xinyao (Criss) Wang

  • WuXi AppTec’s 2023 results were disappointing. The decline in performance in 23H2 was quite severe. 2024 performance guidance could be meaningless because the biggest concern now is the geopolitical conflicts.
  • If the bill is passed, valuation logic would completely change – not based on DCF/PE, but on PB, market value falling below RMB100 billion. We cannot rule out another privatisation.
  • We hope that WuXi AppTec can prepare contingency plans for the worst-case scenario that may occur, rather than simply denying or mitigating the impact of BIOSECURE Act on the Company

Taste Gourmet (8371 HK): Earnings Preview FY24

By Sameer Taneja

  • Taste Gourmet (8371 HK) will report its FY24 results in the third week of June. We estimate revenue/earnings growth of 38%/40% YoY. 
  • We expect the company to end FY24 with >180 mn HKD of net cash on the balance sheet, representing 32% of the mkt cap (9MFY23 cash 148 mn HKD)
  • Maintaining a 50% dividend payout ratio, we expect the company to declare a final DPS of 7 cents ( H1FY24 5.5 cents HKD), representing an 8.5% yield for FY24

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Mar 20
0

Daily Brief Japan: Shinko Electric Industries, Sakura internet, Snow Peak Inc, LIFULL, Trial Holdings, TSE Tokyo Price Index TOPIX and more

By | Daily Briefs, Japan

In today’s briefing:

  • Shinko Electric (6967 JP): Tender State of Play
  • Sakura Internet (3778) | Estimating the Value of 2,500 GPUs
  • Snow Peak: Cheap MBO
  • 1Q Follow-Up – LIFUL (2120 JP)
  • Trial Holdings IPO Trading – Demand and Valuation Are Towards the Higher Side
  • Continued Creation of JPX Prime 150-Type Passive Funds Will Help Solve TOPIX Challenges

Shinko Electric (6967 JP): Tender State of Play

By Arun George

  • Shinko Electric Industries (6967 JP) pre-conditional tender offer from the JIC alliance is JPY5,920 per share. The gross spread has narrowed from a high of 10.4% to the current 4.2%. 
  • The narrowing spread can be attributed to the JSR Corp (4185 JP) tender launch, which suggests likely China SAMR approval, and Ibiden Co Ltd (4062 JP) giving up recent gains. 
  • Like JSR, we expect China SAMR to allow JIC to withdraw its Shinko merger control filing. There is a good chance the tender launches before the guided late August start.

Sakura Internet (3778) | Estimating the Value of 2,500 GPUs

By Mark Chadwick

  • The share price of Sakura Internet has risen by over 500%, adding Y230 billion in market cap, since investors began pricing in the AI opportunity
  • We use pricing data from Amazon AWS to model the revenue opportunity for Sakura’s GPU AI-cloud
  • We estimate that 2,500 H100 GPUs could yield an equity value of Y49 billion, far less than the value the market has ascribed

Snow Peak: Cheap MBO

By Michael Causton

  • Snow Peak agreement with Bain Capital to take the outdoor brand private next month seems to have been in the works for a couple of years. 
  • Although sales are expected to rebound this year to near record highs, Snow Peak insists the domestic camping boom is over and will look at long-term growth overseas instead.
  • Even so, the MBO price looks cheap. Snow Peak is likely to see a rebound in domestic sales in FY2024 and its plans for overseas expansion are solid.

1Q Follow-Up – LIFUL (2120 JP)

By Sessa Investment Research

  • LIFULL reported an 8% increase in net sales to ¥8.1 bn, driven by overseas acquisitions made during the second quarter of the previous FY.
  • OP from comparable operations remained steady at around ¥0.15bn. In the previous year, the company recorded an operating profit of ¥0.8bn, but this included ¥0.66bn in profits from the sale of Rakuten LIFULL STAY, a hotel and lodging platform operator, in October of 2022.
  • In the current term, the company recorded a net loss of ¥0.05bn, but this included about ¥0.2bn in one-off costs for the transition to a new management structure in the overseas business. 

Trial Holdings IPO Trading – Demand and Valuation Are Towards the Higher Side

By Sumeet Singh

  • Trial Holdings (5882 JP) (TH) raised around US$259m after pricing its IPO at the top-end in its Japan IPO.
  • TH operates a network of retail stores that offer one-stop shopping under its everyday low price model, across a variety of daily necessities, food items and other products.
  • We have looked at the company’s past performance in our previous notes. In this note, we talk about the trading dynamics.

Continued Creation of JPX Prime 150-Type Passive Funds Will Help Solve TOPIX Challenges

By Aki Matsumoto

  • TOPIX-Type passive funds have the challenges of buying stocks that aren’t of high quality and of not providing sufficient engagement. JPX Prime 150 is expected to resolve these issues.
  • Some believe that JPX Prime 150, a market capitalization-weighted index, shows little difference in performance from TOPIX. However, more careful engagement will contribute to value creation in the long run.
  • The continued creation of passive funds linked to the JPX Prime 150 Index is expected to further highlight high quality companies.

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Mar 20
0

Daily Brief ESG: Continued Creation of JPX Prime 150-Type Passive Funds Will Help Solve TOPIX Challenges and more

By | Daily Briefs, ESG

In today’s briefing:

  • Continued Creation of JPX Prime 150-Type Passive Funds Will Help Solve TOPIX Challenges

Continued Creation of JPX Prime 150-Type Passive Funds Will Help Solve TOPIX Challenges

By Aki Matsumoto

  • TOPIX-Type passive funds have the challenges of buying stocks that aren’t of high quality and of not providing sufficient engagement. JPX Prime 150 is expected to resolve these issues.
  • Some believe that JPX Prime 150, a market capitalization-weighted index, shows little difference in performance from TOPIX. However, more careful engagement will contribute to value creation in the long run.
  • The continued creation of passive funds linked to the JPX Prime 150 Index is expected to further highlight high quality companies.

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Mar 20
0

Daily Brief Technical Analysis: Upgrading Materials to Market Weight; Rotation into Commodity Sectors; SPX/NDX Holding Above Support and more

By | Daily Briefs, Technical Analysis

In today’s briefing:

  • Upgrading Materials to Market Weight; Rotation into Commodity Sectors; SPX/NDX Holding Above Support

Upgrading Materials to Market Weight; Rotation into Commodity Sectors; SPX/NDX Holding Above Support

By Joe Jasper

  • We have discussed for weeks that we will need to see the SPX and Nasdaq 100 close below their 20-day MAs for 2-3 consecutive days in order to get cautious.
  • This still hasn’t happened (short-term trend remains bullish). If we get 2-3 closes below the 20-dayMAs, next support would be 4983-5050 on SPX, $425-$433 on QQQ (gap supports from 2/22/24)
  • If some or all of these gaps remain unfilled, it is a sign that bulls remain in control. We are seeing a rotation into commodity Sectors, we highlight several buys

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Mar 20
0

Daily Brief Thematic (Sector/Industry): Japan – Rising Rates: Focus On Banks With High Cash And Low Margins and more

By | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

  • Japan – Rising Rates: Focus On Banks With High Cash And Low Margins
  • Democracy’s Market Dance: Elections and Economic Sentiment in India

Japan – Rising Rates: Focus On Banks With High Cash And Low Margins

By Daniel Tabbush

  • We look at which Japan banks have the most cash which can see a major boost to returns.
  • Banks with lower margins can see a higher net interest income pick up from rising rates.
  • Loan growth in Japan has been relatively strong, supportive of rising rates from BOJ.

Democracy’s Market Dance: Elections and Economic Sentiment in India

By Nimish Maheshwari

  • Indian elections significantly sway stock markets, with pre-election rallies and post-election stability reflecting investor sentiment and policy expectations.
  • Historical data unveils market surges preceding elections, highlighting the importance of economic reforms and policy promises in driving investor confidence.
  • Amidst market volatility, strategic investing demands a focus on long-term fundamentals over short-term fluctuations, emphasizing informed, adaptable approaches for sustainable growth.

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Mar 20
0

Daily Brief Credit: Morning Views Asia: Adani Green Energy and more

By | Credit, Daily Briefs

In today’s briefing:

  • Morning Views Asia: Adani Green Energy, Azure Power Global Ltd, Greenko Energy Holdings
  • West China Cement – Earnings Flash – FY 2023 Results – Lucror Analytics
  • Morning Views Asia: Delta Dunia Makmur, MGM China Holdings

Morning Views Asia: Adani Green Energy, Azure Power Global Ltd, Greenko Energy Holdings

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.

West China Cement – Earnings Flash – FY 2023 Results – Lucror Analytics

By Leonard Law, CFA

West China Cement’s (WCC) FY 2023 results were soft, but in line with expectations. The company’s profitability in Mainland China continued to weaken, albeit this was partly offset by rising sales volumes and ASP from its African operations. As a result, operating profit in Africa climbed above that for Mainland China for the first time, with the African segment accounting for 31% of total revenue and 74% of operating profit.

In our view, the key risk for investors is WCC’s seemingly relentless expansion in Africa, which is likely to further weaken its leverage. Moreover, we are concerned that further expansion in this region will fundamentally change WCC’s risk profile from a relatively stable infrastructure-led Chinese business to one that is highly exposed to event risks in frontier markets. The company’s African businesses could be exposed to higher geopolitical, regulatory and ESG risks, which are less well understood by investors.

Morning Views Asia: Delta Dunia Makmur, MGM China Holdings

By Leonard Law, CFA

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

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Mar 20
0

Daily Brief ECM: Aditya Birla Sun Life AMC OFS – Share Price Has Corrected in Anticipation of the Current Deal and more

By | Daily Briefs, ECM

In today’s briefing:

  • Aditya Birla Sun Life AMC OFS – Share Price Has Corrected in Anticipation of the Current Deal
  • Jeil Machine & Solution IPO Preview
  • Reddit IPO – Well-Known Brand but Sustainability of Growth Is Questionable
  • Trial Holdings IPO Trading – Demand and Valuation Are Towards the Higher Side
  • Baazar Style Retail Limited Pre-IPO Tear Sheet

Aditya Birla Sun Life AMC OFS – Share Price Has Corrected in Anticipation of the Current Deal

By Clarence Chu

  • Promoters in Aditya Birla Sun Life AMC (ABSLAMC IN) are looking to raise US$189m via an offer for sale (OFS). This assumes that the over-allotment option is exercised.
  • This appears to be done in a bid to meet SEBI’s 75% free-float requirement for listed firms in India. .
  • News of the selldown had surfaced a week earlier leading to a correction in share price. As such, we would argue that the deal here is well flagged

Jeil Machine & Solution IPO Preview

By Douglas Kim

  • Jeil Machine & Solution is getting ready for an IPO in April in the Korean stock market. The IPO price range is 15,000 won to 18,000 won. 
  • The total offering amount ranges from 36 billion won to 43.2 billion won. The book building for the institutional investors will last from 5 to 12 April. 
  • According to the bankers’ assessment, the implied market cap of the company ranges from 309 billion won to 371 billion won. 

Reddit IPO – Well-Known Brand but Sustainability of Growth Is Questionable

By Ethan Aw

  • Reddit (RDDT US) is looking to raise up to US$750m in its US IPO. 
  • Reddit is an online social media platform where users are able to join communities, engage in conversations, research, exchange goods and services as well as create new communities.  
  • In this note, we talk about the company’s historical performance.

Trial Holdings IPO Trading – Demand and Valuation Are Towards the Higher Side

By Sumeet Singh

  • Trial Holdings (5882 JP) (TH) raised around US$259m after pricing its IPO at the top-end in its Japan IPO.
  • TH operates a network of retail stores that offer one-stop shopping under its everyday low price model, across a variety of daily necessities, food items and other products.
  • We have looked at the company’s past performance in our previous notes. In this note, we talk about the trading dynamics.

Baazar Style Retail Limited Pre-IPO Tear Sheet

By Tina Banerjee

  • Baazar Style Retail (1635104D IN) is the fastest growing value retailer in eastern and north- eastern India, with market leadership in West Bengal, Odisha, and Assam.
  • The proposed IPO is a combination of fresh issue of equity shares worth INR1,850M and OFS of up to 16.9M equity shares by promoter group entities and other selling shareholders. 
  • The company may consider raising INR370M in a pre-IPO placement round. If the pre-IPO placement is undertaken, the amount raised from such placement will be reduced from the fresh issue.

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