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Smartkarma Daily Briefs

Feb 11
0

Daily Brief Thematic (Sector/Industry): GEMWeekly (9 Feb 2024): China Macro; Hyundai Motor and more

By | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

  • GEMWeekly (9 Feb 2024): China Macro; Hyundai Motor, SMIC, Tencent, TSMC, Baidu

GEMWeekly (9 Feb 2024): China Macro; Hyundai Motor, SMIC, Tencent, TSMC, Baidu

By Wium Malan, CFA

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Feb 11
0

Daily Brief Australia: SiteMinder and more

By | Australia, Daily Briefs

In today’s briefing:

  • Quiddity Leaderboard ASX Mar 24: Five ASX 200 Changes Possible Including One Surprise

Quiddity Leaderboard ASX Mar 24: Five ASX 200 Changes Possible Including One Surprise

By Janaghan Jeyakumar, CFA

  • In this insight, we take a look at the potential index changes for ASX 300, 200, 100, 50, and 20 in the run-up to the March 2024 index review.
  • I expect one change for ASX 20, one change for ASX 100, and five changes for ASX 200 including a surprise deletion due to long term suspension of a stock.
  • The official index changes will be announced after the close on Friday 1st March 2024.

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Feb 11
0

Daily Brief Macro: Where Are We In the Global Liquidity Cycle? and more

By | Daily Briefs, Macro

In today’s briefing:

  • Where Are We In the Global Liquidity Cycle?
  • EIA Forecasts Crude Oil Prices to Fall in 2025 Due to Weak Demand Growth

Where Are We In the Global Liquidity Cycle?

By Michael J. Howell

  • January 2024 another strong month for Global Liquidity which hits US$171.7 trillion
  • US Fed and China’s PBoC are in the forefront of adding liquidity
  • Global Liquidity Cycle trough in October 2022. Next peak late-2025

EIA Forecasts Crude Oil Prices to Fall in 2025 Due to Weak Demand Growth

By Suhas Reddy

  • EIA forecasts oil prices to gain during the first half of 2024 due to the Red Sea conflict and inventory withdrawals.
  • Downward pressure from lukewarm oil demand and oversupply to keep prices low in 2025.
  • US commercial crude oil inventories grew by 1.3% on a weekly basis but are 4% below the five year average for this time of year.

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Feb 11
0

Daily Brief Equity Bottom-Up: China Semi Foundry: Fierce Competition & Sluggish Rebound In Year Of The Dragon and more

By | Daily Briefs, Equity Bottom-Up

In today’s briefing:

  • China Semi Foundry: Fierce Competition & Sluggish Rebound In Year Of The Dragon
  • Asics (7936) | Slow Out of the Blocks
  • Bajaj Finance (BAF): A Sustained Growth Powerhouse
  • Johnson Controls International: Initiation Of Coverage – A Strategic Overhaul That Could Be A Game Changer! – Major Drivers
  • Tesla Sold A Whopping One Car in January in South Korea
  • Royal Caribbean Cruises Ltd.: How They’re Sailing Towards Improved Profitability With These Strategies! – Major Drivers
  • Terumo Corp (4543 JP): 3Q Result Beat Estimate; Currency Depreciation Led Full-Year Guidance Raise
  • Microchip Technology: How Their Latest Innovations Are Set to Dominate the Market! – Major Drivers
  • Parker-Hannifin Corporation: Increased Global Frontline Performance & Improved Margins Saving The Day? – Major Drivers
  • [KE Holdings (BEKE US, BUY, TP US$24) Target Price Change]: Benefiting from Structural Change

China Semi Foundry: Fierce Competition & Sluggish Rebound In Year Of The Dragon

By William Keating

  • Both SMIC & Hua Hong reported Q423 earnings in line with expectations and both guided Q124 flat to slightly down. SMIC expects FY24 mid single digit growth YoY.
  • The downturn has exposed inherent weakness in China’s Semi Foundry segment relative to peers as exemplified by the significant GM disparity
  • China’s two leading semi foundries have ~80% domestic dependence. Right now, that’s a headwind

Asics (7936) | Slow Out of the Blocks

By Mark Chadwick

  • Asics absolutely smashed the last MTP; this year they have a more measured approach
  • Full-Year OP guidance for FY24 is a little shy of street expectations, but this should not impact the share price
  • Asics has a decent runway for growth ahead and will benefit from channel mix improvements. The stock remains undervalued relative to peers

Bajaj Finance (BAF): A Sustained Growth Powerhouse

By Ankit Agrawal, CFA

  • Q3FY24 performance was slightly below expectation led by NIM margin compression and marginally elevated credit costs. Certain regulatory restrictions also dampened growth and profitability.
  • However, from a medium-term perspective, BAF is setting up well to be a sustained growth powerhouse. It has widened its product catalogue and is deepening the product availability per branch.
  • Led by growth tailwinds and market share gains, BAF has potential to grow at 25%+ for a prolonged period. The current headwinds seem temporary and provide a buying opportunity.

Johnson Controls International: Initiation Of Coverage – A Strategic Overhaul That Could Be A Game Changer! – Major Drivers

By Baptista Research

  • This is our first report on diversified technology and multi industrial player, Johnson Controls.
  • The company reported its Q1 2024 earnings recently.
  • The company is facing some momentum after overcoming a considerable cyber disruption early in the quarter.

Tesla Sold A Whopping One Car in January in South Korea

By Douglas Kim

  • Tesla Motors (TSLA US) sold one car in January 2024 in South Korea. In comparison, Tesla sold 1,022 vehicles in December 2023 and 13,885 units in 2023.
  • The key reason for the sharp plunge in vehicle sales in January has been due to the government’s slashing EV subsidies for vehicles with Chinese LFP based batteries.
  • Furthermore, many consumers avoided buying Tesla vehicles in January as they waited for the government’s announcements of new EV subsidies. 

Royal Caribbean Cruises Ltd.: How They’re Sailing Towards Improved Profitability With These Strategies! – Major Drivers

By Baptista Research

  • The latest earnings of the Royal Caribbean Group exhibited an optimistic financial position for the Q4 and full-year 2023 and the company flourished particularly with the debut of the revolutionary product, Icon of the Seas.
  • By delivering the best vacation experiences, 2023 marked an exceptional year with net yields up by 13.5% compared to 2019 levels, thereby boosting net income by approximately $1 billion.
  • 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.

Terumo Corp (4543 JP): 3Q Result Beat Estimate; Currency Depreciation Led Full-Year Guidance Raise

By Tina Banerjee

  • Terumo Corp (4543 JP) posted highest ever quarterly and YTD revenue and operating profit in Q3FY24. Double-digit growth in C&V and TBCT businesses are the main revenue growth driver.
  • During 9MFY24, gross profit margin expanded 50bps YoY to 52%, while operating profit margin improved 40bps to 15.5%. Profitability improvement through price increases and cost reduction is on track.
  • Terumo has revised both FY24 revenue and profit upward to reflect continuing positive impacts from yen depreciation. The company is aiming for record high revenue and profit in FY24.

Microchip Technology: How Their Latest Innovations Are Set to Dominate the Market! – Major Drivers

By Baptista Research

  • Microchip Technology, a leading provider of microcontroller and analogue semiconductors, reported its third quarter 2024 financial results which were below expectations as net sales dropped 21.7% sequentially and 18.6% year-over-year due to increased business uncertainty, slowing economic activity, and higher inventory levels among customers.
  • Despite a challenging environment, the company’s non-GAAP gross and operating margins showed some resilience at 63.8% and 41.2% respectively.
  • 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.

Parker-Hannifin Corporation: Increased Global Frontline Performance & Improved Margins Saving The Day? – Major Drivers

By Baptista Research

  • With respect to Parker-Hannifin’s latest earnings, a few distinctive factors paint a broad picture of the company’s current status and future prospects.
  • With record sales of $4.8 billion in Q2, a 3% progression from the previous year, the company has expressed confidence in sustaining incrementals of over 100% and expanding upon the adjusted segment operating margin which stood at a record 24.5%, marking a 3% increase on a year-to-year basis.
  • This strong performance has primarily been driven by their Aerospace Systems, while both Industrial Silos also made valuable contributions.

[KE Holdings (BEKE US, BUY, TP US$24) Target Price Change]: Benefiting from Structural Change

By Eric Wen

  • We expect KE Holdings (Beike) C4Q23 revenue to be in-line with consensus, with non-GAAP NI 15.6% higher than consensus, mainly due to better existing home sales.
  • Although overall home living demand remains lukewarm in 2023, the structural substitution from purchasing new home to existing home has accelerated, benefiting Beike, in our view.
  • We maintain the stock as BUY rating and trim down TP by US$0.5 to US$24.0/ADS to factor in the weak new home sales.

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Feb 11
0

Daily Brief Event-Driven: (Mostly) Asia-Pac Weekly Risk Arb Wrap: Silver Lake and more

By | Daily Briefs, Event-Driven

In today’s briefing:

  • (Mostly) Asia-Pac Weekly Risk Arb Wrap: Silver Lake, Ssangyong Cement, Vinda, Benefit One, Hollysys
  • Index Rebalance & ETF Flow Recap: STAR100, NEXT50, LowVol30, KOSPI200, TW50, NWD, ITC, India Float
  • Last Week in Event SPACE: Mitsui Fudosan/Oriental Land, Giordano, JSR, Pasona, Lawson, L’Occitane
  • Quiddity Leaderboard ASX Mar 24: Five ASX 200 Changes Possible Including One Surprise

(Mostly) Asia-Pac Weekly Risk Arb Wrap: Silver Lake, Ssangyong Cement, Vinda, Benefit One, Hollysys

By David Blennerhassett

Index Rebalance & ETF Flow Recap: STAR100, NEXT50, LowVol30, KOSPI200, TW50, NWD, ITC, India Float

By Brian Freitas

  • There will be a bunch of rebalance announcements towards the start and at the end of the coming week. This includes the HSI, HSCEI, HSTECH, HSCI, HSIII and global indices.
  • The review period for the March rebalance of the S&P/ASX 200 and related indices ends on 16 February. The announcement of the changes will come couple of weeks later.
  • There were HUGE inflows to mainland China ETFs for yet another week as Central Huijin indicated that they would continue to buy/create ETFs units.

Last Week in Event SPACE: Mitsui Fudosan/Oriental Land, Giordano, JSR, Pasona, Lawson, L’Occitane

By David Blennerhassett

  • Apparently Elliott is requesting Mitsui Fudosan (8801 JP) conduct a very large buyback and to sell down its stake in Oriental Land (4661 JP).
  • Some 17 months after the Cheng Family failed to secure 50%+ of Giordano International (709 HK), the family are now calling an SGM to install friendly directors.
  • TheLawson (2651 JP) deal is not terribly surprising. It’s not terribly surprising that it is being done cheaply. It IS being done too cheaply. This is bumpable by force. 

Quiddity Leaderboard ASX Mar 24: Five ASX 200 Changes Possible Including One Surprise

By Janaghan Jeyakumar, CFA

  • In this insight, we take a look at the potential index changes for ASX 300, 200, 100, 50, and 20 in the run-up to the March 2024 index review.
  • I expect one change for ASX 20, one change for ASX 100, and five changes for ASX 200 including a surprise deletion due to long term suspension of a stock.
  • The official index changes will be announced after the close on Friday 1st March 2024.

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  • ✓ Custom Watchlists
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  • ✓ Events & Webinars
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Feb 11
0

Daily Brief United States: Crude Oil, Johnson Controls, Tesla Motors, Royal Caribbean Cruises, Microchip Technology, Parker Hannifin, Honeywell International, Rockwell Automation, Amazon.com Inc, Tractor Supply Company and more

By | Daily Briefs, United States

In today’s briefing:

  • EIA Forecasts Crude Oil Prices to Fall in 2025 Due to Weak Demand Growth
  • Johnson Controls International: Initiation Of Coverage – A Strategic Overhaul That Could Be A Game Changer! – Major Drivers
  • Tesla Sold A Whopping One Car in January in South Korea
  • Royal Caribbean Cruises Ltd.: How They’re Sailing Towards Improved Profitability With These Strategies! – Major Drivers
  • Microchip Technology: How Their Latest Innovations Are Set to Dominate the Market! – Major Drivers
  • Parker-Hannifin Corporation: Increased Global Frontline Performance & Improved Margins Saving The Day? – Major Drivers
  • Honeywell International – Heavy Investment in Aerospace & Other Futuristic Strategies Propelling Them Forward! – Major Drivers
  • Rockwell Automation: Strong End-Market Demand & 5 Other Factors Driving Its Growth! – Financial Forecasts
  • Amazon.com Inc: Increased Efforts to Improve Cost Efficiency and Innovation & 5 Other Strategies For 2024! – Financial Forecasts
  • Tractor Supply Company: Strategic Focus On Exclusive Brands Expansion & Other Key Drivers

EIA Forecasts Crude Oil Prices to Fall in 2025 Due to Weak Demand Growth

By Suhas Reddy

  • EIA forecasts oil prices to gain during the first half of 2024 due to the Red Sea conflict and inventory withdrawals.
  • Downward pressure from lukewarm oil demand and oversupply to keep prices low in 2025.
  • US commercial crude oil inventories grew by 1.3% on a weekly basis but are 4% below the five year average for this time of year.

Johnson Controls International: Initiation Of Coverage – A Strategic Overhaul That Could Be A Game Changer! – Major Drivers

By Baptista Research

  • This is our first report on diversified technology and multi industrial player, Johnson Controls.
  • The company reported its Q1 2024 earnings recently.
  • The company is facing some momentum after overcoming a considerable cyber disruption early in the quarter.

Tesla Sold A Whopping One Car in January in South Korea

By Douglas Kim

  • Tesla Motors (TSLA US) sold one car in January 2024 in South Korea. In comparison, Tesla sold 1,022 vehicles in December 2023 and 13,885 units in 2023.
  • The key reason for the sharp plunge in vehicle sales in January has been due to the government’s slashing EV subsidies for vehicles with Chinese LFP based batteries.
  • Furthermore, many consumers avoided buying Tesla vehicles in January as they waited for the government’s announcements of new EV subsidies. 

Royal Caribbean Cruises Ltd.: How They’re Sailing Towards Improved Profitability With These Strategies! – Major Drivers

By Baptista Research

  • The latest earnings of the Royal Caribbean Group exhibited an optimistic financial position for the Q4 and full-year 2023 and the company flourished particularly with the debut of the revolutionary product, Icon of the Seas.
  • By delivering the best vacation experiences, 2023 marked an exceptional year with net yields up by 13.5% compared to 2019 levels, thereby boosting net income by approximately $1 billion.
  • 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.

Microchip Technology: How Their Latest Innovations Are Set to Dominate the Market! – Major Drivers

By Baptista Research

  • Microchip Technology, a leading provider of microcontroller and analogue semiconductors, reported its third quarter 2024 financial results which were below expectations as net sales dropped 21.7% sequentially and 18.6% year-over-year due to increased business uncertainty, slowing economic activity, and higher inventory levels among customers.
  • Despite a challenging environment, the company’s non-GAAP gross and operating margins showed some resilience at 63.8% and 41.2% respectively.
  • 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.

Parker-Hannifin Corporation: Increased Global Frontline Performance & Improved Margins Saving The Day? – Major Drivers

By Baptista Research

  • With respect to Parker-Hannifin’s latest earnings, a few distinctive factors paint a broad picture of the company’s current status and future prospects.
  • With record sales of $4.8 billion in Q2, a 3% progression from the previous year, the company has expressed confidence in sustaining incrementals of over 100% and expanding upon the adjusted segment operating margin which stood at a record 24.5%, marking a 3% increase on a year-to-year basis.
  • This strong performance has primarily been driven by their Aerospace Systems, while both Industrial Silos also made valuable contributions.

Honeywell International – Heavy Investment in Aerospace & Other Futuristic Strategies Propelling Them Forward! – Major Drivers

By Baptista Research

  • The fourth quarter 2023 earnings for Honeywell International took place in a dynamic backdrop; the company delivered on its 2023 commitments despite this.
  • Honeywell’s Accelerator operating system and differentiated technologies allowed it to meet the full year guidance for organic growth, adjusted earnings per share, and free cash flow.
  • As a result of leadership changes, Vimal Kapur, CEO, has been elected to additionally serve as Chairman, starting from June after the current Executive Chairman, Darius Adamczyk, retires.

Rockwell Automation: Strong End-Market Demand & 5 Other Factors Driving Its Growth! – Financial Forecasts

By Baptista Research

  • In the Rockwell Automation results, it’s important to start by appreciating that the company registered first quarter growth, even amidst the challenging economic landscape.
  • Rockwell Automation registered a 3.6% year-over-year increase in total sales led by North America.
  • This performance is attributable partly to the company’s broad business portfolio which has helped spread risk.

Amazon.com Inc: Increased Efforts to Improve Cost Efficiency and Innovation & 5 Other Strategies For 2024! – Financial Forecasts

By Baptista Research

  • Amazon.com reported bullish Q4 2023 financial results.
  • Revenue stood at $170 billion, indicating an upsurge of 13% year-over-year, barring the impact of foreign exchange rates.
  • Operating income hiked up to $13.2 billion, showing a YoY growth of 383% or a surge of $10.5 billion.

Tractor Supply Company: Strategic Focus On Exclusive Brands Expansion & Other Key Drivers

By Baptista Research

  • Tractor Supply Company concluded its fiscal year of 2023 with solid results and several significant milestones, even though the year was marked by many challenges.
  • Situated against a challenging backdrop of unfavorable weather, rising interest rates, and inflation impacting consumer spending habits, Tractor Supply Company extracted cause for optimism from developments and improvements in various areas of operations.
  • The company’s robust, needs-based business model has withstood various economic conditions since its inception in 1938.

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Feb 11
0

Daily Brief India: Infosys Ltd, Bajaj Finance Ltd and more

By | Daily Briefs, India

In today’s briefing:

  • Index Rebalance & ETF Flow Recap: STAR100, NEXT50, LowVol30, KOSPI200, TW50, NWD, ITC, India Float
  • Bajaj Finance (BAF): A Sustained Growth Powerhouse

Index Rebalance & ETF Flow Recap: STAR100, NEXT50, LowVol30, KOSPI200, TW50, NWD, ITC, India Float

By Brian Freitas

  • There will be a bunch of rebalance announcements towards the start and at the end of the coming week. This includes the HSI, HSCEI, HSTECH, HSCI, HSIII and global indices.
  • The review period for the March rebalance of the S&P/ASX 200 and related indices ends on 16 February. The announcement of the changes will come couple of weeks later.
  • There were HUGE inflows to mainland China ETFs for yet another week as Central Huijin indicated that they would continue to buy/create ETFs units.

Bajaj Finance (BAF): A Sustained Growth Powerhouse

By Ankit Agrawal, CFA

  • Q3FY24 performance was slightly below expectation led by NIM margin compression and marginally elevated credit costs. Certain regulatory restrictions also dampened growth and profitability.
  • However, from a medium-term perspective, BAF is setting up well to be a sustained growth powerhouse. It has widened its product catalogue and is deepening the product availability per branch.
  • Led by growth tailwinds and market share gains, BAF has potential to grow at 25%+ for a prolonged period. The current headwinds seem temporary and provide a buying opportunity.

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

  • ✓ Unlimited Research Summaries
  • ✓ Personalised Alerts
  • ✓ Custom Watchlists
  • ✓ Company Data and News
  • ✓ Events & Webinars
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Feb 11
0

Daily Brief China: Semiconductor Manufacturing International Corp (SMIC), KE Holdings and more

By | China, Daily Briefs

In today’s briefing:

  • China Semi Foundry: Fierce Competition & Sluggish Rebound In Year Of The Dragon
  • [KE Holdings (BEKE US, BUY, TP US$24) Target Price Change]: Benefiting from Structural Change

China Semi Foundry: Fierce Competition & Sluggish Rebound In Year Of The Dragon

By William Keating

  • Both SMIC & Hua Hong reported Q423 earnings in line with expectations and both guided Q124 flat to slightly down. SMIC expects FY24 mid single digit growth YoY.
  • The downturn has exposed inherent weakness in China’s Semi Foundry segment relative to peers as exemplified by the significant GM disparity
  • China’s two leading semi foundries have ~80% domestic dependence. Right now, that’s a headwind

[KE Holdings (BEKE US, BUY, TP US$24) Target Price Change]: Benefiting from Structural Change

By Eric Wen

  • We expect KE Holdings (Beike) C4Q23 revenue to be in-line with consensus, with non-GAAP NI 15.6% higher than consensus, mainly due to better existing home sales.
  • Although overall home living demand remains lukewarm in 2023, the structural substitution from purchasing new home to existing home has accelerated, benefiting Beike, in our view.
  • We maintain the stock as BUY rating and trim down TP by US$0.5 to US$24.0/ADS to factor in the weak new home sales.

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  • ✓ Personalised Alerts
  • ✓ Custom Watchlists
  • ✓ Company Data and News
  • ✓ Events & Webinars
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Feb 11
0

Daily Brief Japan: Benefit One Inc, ASICS Corp, Lawson Inc, Terumo Corp and more

By | Daily Briefs, Japan

In today’s briefing:

  • (Mostly) Asia-Pac Weekly Risk Arb Wrap: Silver Lake, Ssangyong Cement, Vinda, Benefit One, Hollysys
  • Asics (7936) | Slow Out of the Blocks
  • Last Week in Event SPACE: Mitsui Fudosan/Oriental Land, Giordano, JSR, Pasona, Lawson, L’Occitane
  • Terumo Corp (4543 JP): 3Q Result Beat Estimate; Currency Depreciation Led Full-Year Guidance Raise

(Mostly) Asia-Pac Weekly Risk Arb Wrap: Silver Lake, Ssangyong Cement, Vinda, Benefit One, Hollysys

By David Blennerhassett

Asics (7936) | Slow Out of the Blocks

By Mark Chadwick

  • Asics absolutely smashed the last MTP; this year they have a more measured approach
  • Full-Year OP guidance for FY24 is a little shy of street expectations, but this should not impact the share price
  • Asics has a decent runway for growth ahead and will benefit from channel mix improvements. The stock remains undervalued relative to peers

Last Week in Event SPACE: Mitsui Fudosan/Oriental Land, Giordano, JSR, Pasona, Lawson, L’Occitane

By David Blennerhassett

  • Apparently Elliott is requesting Mitsui Fudosan (8801 JP) conduct a very large buyback and to sell down its stake in Oriental Land (4661 JP).
  • Some 17 months after the Cheng Family failed to secure 50%+ of Giordano International (709 HK), the family are now calling an SGM to install friendly directors.
  • TheLawson (2651 JP) deal is not terribly surprising. It’s not terribly surprising that it is being done cheaply. It IS being done too cheaply. This is bumpable by force. 

Terumo Corp (4543 JP): 3Q Result Beat Estimate; Currency Depreciation Led Full-Year Guidance Raise

By Tina Banerjee

  • Terumo Corp (4543 JP) posted highest ever quarterly and YTD revenue and operating profit in Q3FY24. Double-digit growth in C&V and TBCT businesses are the main revenue growth driver.
  • During 9MFY24, gross profit margin expanded 50bps YoY to 52%, while operating profit margin improved 40bps to 15.5%. Profitability improvement through price increases and cost reduction is on track.
  • Terumo has revised both FY24 revenue and profit upward to reflect continuing positive impacts from yen depreciation. The company is aiming for record high revenue and profit in FY24.

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Feb 10
0

Daily Brief Industrials: Regional Container Line, Cathay Pacific Airways, Copa Holdings SA, Japan Elevator Service Holding and more

By | Daily Briefs, Industrials

In today’s briefing:

  • Asian Dividend Gems: Regional Container Line (RCL)
  • Cathay Pacific – Strong Pax Momentum Suggests 2024 Can Outperform Expectations
  • Copa Holdings – A Slow-Growth Year in 2024 – Impressive Gain on Pre-Pandemic Economics Sustainable?
  • Japan Elevator Service Holdings (6544) – Business Model Generating Value and Proving Resilient

Asian Dividend Gems: Regional Container Line (RCL)

By Douglas Kim

  • Regional Container Line is the largest container shipping company in Thailand. It has attractive valuations, strong balance sheet, and has a major tailwind of higher global shipping freight rates. 
  • RCL’s dividend yield averaged 9.6% from 2019 to 2022. The biggest factor driving higher shipping freight rates in 2024 has been the Suez crisis resulting from Houthi drone attacks. 
  • We used Smartkarma’s Smart Score Screener system to find Regional Container Line (RCL TB).

Cathay Pacific – Strong Pax Momentum Suggests 2024 Can Outperform Expectations

By Neil Glynn

  • Cathay Pacific’s strong end to 2023 has been well flagged but we think expectations are too low for 2024.
  • ANA, JAL and Korean Air have each seen unit pax revenue momentum accelerate into calendar 4Q23 which bodes well for 2024 prospects, particularly as manpower challenges slow capacity restoration.
  • Our 2024 EBITDAR is 5% ahead of consensus while we are 11% ahead at the net income level.

Copa Holdings – A Slow-Growth Year in 2024 – Impressive Gain on Pre-Pandemic Economics Sustainable?

By Neil Glynn

  • Copa’s 2023 EBITDAR of $1,117m was achieved while growing unit revenues, while capacity expanded 13% with a 17% unit fuel cost tailwind. Not an easy feat.
  • In 2024, we expect only 5% EBITDAR growth on 10% capacity growth as unit revenues decline (following the emergence of this theme in 2H23) and EBITDAR-level unit costs grow.
  • We model Copa’s EBITDAR/ASM premium to 2019 down to a still-impressive 35% in 2024 but new route selection and efficiency will need to be strong to sustain these economics.

Japan Elevator Service Holdings (6544) – Business Model Generating Value and Proving Resilient

By Astris Advisory Japan

  • Solid execution, high earnings visibility – Q1-3 FY3/2024 results demonstrated a continuation of positive developments in 1) sustained growth in maintenance and repair services, and 2) stronger than expected demand for modernization services.
  • We believe JES is providing in-demand high-quality services driven by secular growth as building owners convert to reputable independent providers for cost management, and structural demand driving modernization of aging elevators.
  • The company is on track to increase service capacity with the new JES Innovation Center Kansai (JIK) due to commence operations in April 2024.

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