Category

Daily Briefs

Jun 29
0

Daily Brief Consumer: Mattel Inc, Madison Square Garden Sports Corp., GameStop, Casey’s General Stores, Dutch Bros Inc, Gildan Activewear , Light & Wonder , Lucid Group , Planet Fitness Inc Cl A, Polaris Industries and more

By | Consumer, Daily Briefs

In today’s briefing:

  • Mattel Inc.: Will The Focus On Entertainment Vertical Expansion Lead To A Jump In Revenues? – Major Drivers
  • Madison Square Garden Sports Corp.: Strengthening Of Local & National Media Rights Agreements & Major Drivers
  • GameStop Corp.: What Are The Biggest Factors That Give It Any Kind Of Upside? – Financial Forecasts
  • Casey’s General Stores Inc.: Expanding Market Share Through Innovation In Food Service! – Major Drivers
  • Dutch Bros Inc.: These Are The 4 Most Pivotal Factors Driving Them Forward! – Financial Forecasts
  • Gildan Activewear Inc.: What Is The Expected Bottom-line Impact Of Cost Input and Manufacturing Optimization? – Major Drivers
  • Light & Wonder Inc.: Enhanced Direct-to-Consumer Platforms Catalyzing The Top-line Growth! – Major Drivers
  • Lucid Group: How Are They Carrying Out The Expansion of Product Lineup and Addressable Market? – Major Drivers
  • Planet Fitness Inc.: Why We Are Neutral Despite Their Membership Growth and Retention Focus! – Major Drivers
  • Polaris Inc.: What Is Their Market Positioning & Their Biggest Competitive Advantage?

Mattel Inc.: Will The Focus On Entertainment Vertical Expansion Lead To A Jump In Revenues? – Major Drivers

By Baptista Research

  • Mattel Inc.’s first quarter 2024 financial results reflected a mixed performance, demonstrating resilience in some areas while facing challenges in others.
  • The company reported a slight decline in net sales, down 1% both as reported and in constant currency, totaling $810 million for the quarter.
  • Despite the dip in sales, Mattel showed considerable strength in profitability metrics.

Madison Square Garden Sports Corp.: Strengthening Of Local & National Media Rights Agreements & Major Drivers

By Baptista Research

  • Madison Square Garden Sports Corp. has recently shared its fiscal 2024 second quarter results, offering a mix of solid strengths and areas for cautious observation.
  • The company reported revenues of approximately $327 million and an adjusted operating income of $37 million for the quarter.
  • This reflects a dynamic scenario where, despite 9 fewer Knicks and Rangers home games comparative to the prior year, per game revenues across the majority of categories including tickets, suites, food, beverage, and merchandise increased, indicating robust per unit profitability and consumer spending resilienc 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.

GameStop Corp.: What Are The Biggest Factors That Give It Any Kind Of Upside? – Financial Forecasts

By Baptista Research

  • GameStop has exhibited a transformative rebound in the challenging retail sector environment over the recent years.
  • The efforts to reshape its operational and financial structures have manifested into some noticeable improvements in its financial health and operational strategy, as detailed in recent company reviews.
  • GameStop management has successfully navigated through burdensome debt, strained vendor relationships, and a dwindling cash position that marked the beginning of 2021.

Casey’s General Stores Inc.: Expanding Market Share Through Innovation In Food Service! – Major Drivers

By Baptista Research

  • Casey’s General Stores recently reported results for the fiscal fourth quarter and full year of 2024, showcasing robust performance with a range of strategic expansions and operational enhancements that underscore the company’s resilience and proactivity in a volatile retail environment.
  • Positive outcomes were plentiful in the report.
  • Casey’s notably achieved a record diluted earnings per share at $13.43, a 13% increase year-over-year, with net income also hitting a new high at $502 million.

Dutch Bros Inc.: These Are The 4 Most Pivotal Factors Driving Them Forward! – Financial Forecasts

By Baptista Research

  • Dutch Bros Inc. showcased robust financial performance and operational growth in its first quarter of fiscal 2024 results.
  • The company reported a significant 39% year-over-year increase in revenue, totaling $275 million.
  • This growth was driven by an impressive 10% same-shop sales growth, representing the strongest single-quarter performance since the fourth quarter of 2021.

Gildan Activewear Inc.: What Is The Expected Bottom-line Impact Of Cost Input and Manufacturing Optimization? – Major Drivers

By Baptista Research

  • Gildan Activewear showcased a mixed performance in the first quarter of 2024, reflecting a combination of strengths in certain product categories and challenges in others, alongside strategic refinements under new leadership.
  • The company reported a slight decline in total revenue, with sales of $696 million, down 1% year-on-year, in line with forecast expectations.
  • This top-line result was primarily due to an offset between a 1% growth in Activewear and a 10% decrease in the hosiery and underwear segment.

Light & Wonder Inc.: Enhanced Direct-to-Consumer Platforms Catalyzing The Top-line Growth! – Major Drivers

By Baptista Research

  • Light & Wonder, during its 2024 first-quarter performance presentation, revealed strong financial and operational progress, underlining its vigorous posture within the gaming industry.
  • The company reported substantial revenue growth and provided a detailed update on its performance across various segments including gaming, SciPlay, and iGaming.
  • Recognizing the positives from the report, Light & Wonder marked its twelfth consecutive quarter of year-over-year revenue growth and highlighted robust performance across all business lines.

Lucid Group: How Are They Carrying Out The Expansion of Product Lineup and Addressable Market? – Major Drivers

By Baptista Research

  • Lucid Group’s Q1 2024 financial update presents a company in the thick of navigating the complexities of expanding the electric vehicle (EV) market footprint while managing production efficiency and scaling operations.
  • On the bright side, Lucid Group reported better-than-expected production and delivery figures during the quarter, with a 39.9% year-over-year increase in deliveries, totaling 1,967 Lucid Air models.
  • This performance marks Lucid’s best quarter to date for deliveries, reflecting a robust demand trajectory for its premium EV offerings.

Planet Fitness Inc.: Why We Are Neutral Despite Their Membership Growth and Retention Focus! – Major Drivers

By Baptista Research

  • Planet Fitness has provided a detailed update on its performance and strategic plans during the first quarter of 2024.
  • The company reported a growth in its membership base, ending the quarter with approximately 19.6 million members.
  • This represents an increase from the prior period but fell short of the company’s expectations for what is typically a robust quarter for new memberships.

Polaris Inc.: What Is Their Market Positioning & Their Biggest Competitive Advantage?

By Baptista Research

  • Polaris Inc. recently discussed its financial performance for the first quarter of 2024, presenting a mixed outcome influenced by various factors including seasonal trends and strategic inventory management.
  • Here, we lay out an investment thesis and concise result summary that centers around the firm’s operational strategies, product launches, and market conditions.
  • Beginning with revenue, Polaris reported a 20% decline to $1.7 billion, a figure that aligned with expectations.

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Jun 29
0

Most Read: China Traditional Chinese Medicine, MMG, Aisin , Brilliance China Automotive, LG Electronics, SK Networks, Emcure Pharmaceuticals, Bank Rakyat Indonesia and more

By | Daily Briefs, Most Read

In today’s briefing:

  • China TCM (570.HK) Privatization Update – Investors May Need to Prepare for a Longer Wait
  • TCM (570 HK): Where’s The Floor?
  • MMG (1208 HK) Rights Trading Dynamics
  • Big Aisin (7259) Offering Sets Stage for First Toyota Group Full Unwind
  • Aisin (7259 JP): A US$1.1 Billion Secondary Offering
  • Brilliance China (1114 HK): Reversing Out of Passive Portfolios
  • Initial Thoughts on LG Electronics India IPO
  • SK Square + SK Networks Merger Swap: A Guide to Pre-Merger Arb Spread Calculations
  • Emcure Pharmaceuticals Pre-IPO: IPO Price Band Set; Steep Valuation Offers Limited Upside Potential
  • Bank Rakyat Indonesia (BBRI IJ) – Special Mention on the Turn

China TCM (570.HK) Privatization Update – Investors May Need to Prepare for a Longer Wait

By Xinyao (Criss) Wang

  • The approval/filing process of China TCM’s privatization is complicated and would take some time, but there’re almost no cases of disapproval. It also depends on the adequacy of materials submitted.
  • Due to the extension of time for the despatch of Scheme Document, this process would be delayed for more months.But we should receive clear information by October at the latest.
  • For arbitrageurs, China TCM is an investment opportunity of high success rate, which becomes more attractive if HK stock market is depressed.It’s better suited to idle funds considering potential risks/returns.

TCM (570 HK): Where’s The Floor?

By David Blennerhassett

  • Just plain ugly. China Traditional Chinese Medicine (570 HK) (“TCM”) fell 11.7% yesterday. It’s down another 7.9%, on large volume, as I type.  The stock is now ~35% below terms
  • Depending on who you talk to, the sudden move was triggered by a couple of event pods dumping stock; or the incoming CNPGC chairman is not supportive. Or perhaps both. 
  • Since rumours surfaced early Feb as to an Offer, a basket of TCM’s peers are up 8% on average. The HSI is up 15%. TCM’s downside from here appears limited.

MMG (1208 HK) Rights Trading Dynamics

By Travis Lundy

  • The MMG (1208 HK) rights, designed to raise US$1.15bn to pay off loans to the parent for the purchase of a large copper asset, start trading 24 June 2024. 
  • There is some risk up for grabs, and it is likely to trade according to standard Hong Kong Rights Trading Dynamics. Shorts are down somewhat, but covering should be expected. 
  • There is path-dependency to the Rights Trading, and while they trade for 7 trading days through Tuesday next, one should expect the volume to trade this week. 

Big Aisin (7259) Offering Sets Stage for First Toyota Group Full Unwind

By Travis Lundy

  • Today (27 June 2024) after the close, Aisin (7259 JP) announced three Toyota Group companies (Toyota, Toyota Industries, and Denso) would sell shares in Aisin in a ¥180bn offering.
  • This is ALL of Denso’s holdings, 63% of Toyota Industries stake, and ~12% of Toyota’s stake. Separately, Aisin announced a 17mm share (6.3%) ¥100bn buyback and a 3:1 split Oct1.
  • The recent yuho shows us the progress of Aisin’s promised selldown of crossholdings. There are three large chunks left. One is easy. The climb to capital allocation credibility easier too.

Aisin (7259 JP): A US$1.1 Billion Secondary Offering

By Arun George

  • Aisin (7259 JP) has announced a secondary offering of up to 38.9 million shares (including overallotment) and a buyback worth a maximum of JPY100 billion or 17 million shares.
  • Denso Corp (6902 JP), Toyota Industries (6201 JP), and Toyota Motor (7203 JP) are the selling shareholders. The offering aims to reconfigure the company’s shareholder mix and reduce cross-shareholdings.
  • Looking at recent large Japanese placements is instructive for understanding the potential offer price. The pricing date will fall between 8 and 10 July (likely 8 July).

Brilliance China (1114 HK): Reversing Out of Passive Portfolios

By Brian Freitas

  • Brilliance China Automotive (1114 HK) is up 220% on a total return basis since we first published our insight in August 2023.
  • The company paid a special dividend in April this year and will pay a large special dividend of HK$4.3/share going ex-div on 3 July.
  • The resultant drop in market cap will result in deletion of the stock from large global passive portfolios at the close on 3 July.

Initial Thoughts on LG Electronics India IPO

By Douglas Kim

  • According to local media, LG Electronics is reviewing for a potential IPO of LG Electronics India. LG Electronics has approached JP Morgan and Morgan Stanley to be potential IPO underwriters.
  • If LG Electronics’ Indian subsidiary is listed, it is expected to be able to raise at least $500 million from the stock market.
  • Post IPO, the market value of LG Electronics India is estimated to be between $2.1 billion (3 trillion won) and $4.3 billion (6 trillion won).

SK Square + SK Networks Merger Swap: A Guide to Pre-Merger Arb Spread Calculations

By Sanghyun Park

  • SK Square’s market cap exceeds SK Networks’ by over 10 times, qualifying this merger as small-scale. Thus, only SK Networks needs shareholder approval and grants appraisal rights solely to shareholders.
  • The current arbitrage spread for SK Networks’ appraisal rights is 1.95%, and for the swap, it’s 4.16%. These are nominal values excluding trading costs and taxes.
  • Today’s SK Square and SK Networks prices reflect arbitrage spreads. Yesterday’s 8% spread widened, focusing on narrowing appraisal rights and swap spreads, essential before next week’s announcement.

Emcure Pharmaceuticals Pre-IPO: IPO Price Band Set; Steep Valuation Offers Limited Upside Potential

By Tina Banerjee

  • Emcure Pharmaceuticals seeks to raise INR19.5B in upcoming IPO through a fresh issue of INR8B and an OFS of 11.4M shares. IPO price band has been set at INR960–1,008.
  • The issue will open for subscription on July 3 and close on July 5. Bidding for anchor investors will open on July 2. Lot size for bidding is 14 shares.
  • IPO proceeds will be used to repay debt. As at March 31, 2024, the company’s outstanding borrowings stood at INR21B against cash balance of INR2B.  

Bank Rakyat Indonesia (BBRI IJ) – Special Mention on the Turn

By Angus Mackintosh

  • Bank Rakyat Indonesia (BBRI IJ) have seen a significant correction on the back of concerns over credit quality, as provisions increased in 1Q2024, the bank addressed its problem micro-loans
  • The bank is addressing these loans with some further provisions likely over the coming quarter but special mention loans should plateau in July signifying a turn. 
  • Bank Rakyat Indonesia will slow micro-lending and grow corporate loans this year to address the cost of credit. Profits will likely be flat and dividend payout up. Valuations are attractive.

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Jun 29
0

Daily Brief Quantitative Analysis: ASX Short Interest Weekly (Jun 21st): Telstra and more

By | Daily Briefs, Quantitative Analysis

In today’s briefing:

  • ASX Short Interest Weekly (Jun 21st): Telstra, BHP, Aristocrat Leisure, Sonic Healthcare
  • Hong Kong Buybacks Weekly (Jun 28th): Tencent, Meituan, Aia

ASX Short Interest Weekly (Jun 21st): Telstra, BHP, Aristocrat Leisure, Sonic Healthcare

By Ke Yan, CFA, FRM

  • We analyzed the changes in short interest of ASX Stocks as of Jun 21st (reported today) which has an aggregated short interest worth USD19.1bn.
  • 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 Telstra, BHP, Aristocrat Leisu, Sonic Healthcare, Treasury Wine, Fortescue, Westpac, NAB, ANZ.

Hong Kong Buybacks Weekly (Jun 28th): Tencent, Meituan, Aia

By Ke Yan, CFA, FRM

  • We analyze statistics on top repurchases over one week, one month, one quarter and one year periods ended on Jun 28th based on HKEx daily reports.
  • In the past 7 days, the top 3 companies that repurchased the most shares from the market were Tencent (700 HK), Meituan (3690 HK), AIA (1299 HK).
  • In the past 30 days, the top 3 companies that repurchased the most shares from the market were Tencent (700 HK), Meituan (3690 HK), AIA (1299 HK).

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Jun 29
0

Daily Brief Thematic (Sector/Industry): Japan Financials – Buybacks Strongest at Japan Post Insurance and more

By | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

  • Japan Financials – Buybacks Strongest at Japan Post Insurance, Japan Post Holdings, Yamaguchi
  • #20 India Insight: Ultratech Cement Acquisition, India’s Bond in JP Morgan, Ather Energy Investment
  • Japan Weekly | IHI, Sumi Pharma, Toho, Sawai, JEOL
  • [Blue Lotus Daily – TMT Update]:700 HK/BIDU US/BABA US/0020 HK/NTES US/3690 HK
  • AUCTUS ON FRIDAY – 28/06/2024

Japan Financials – Buybacks Strongest at Japan Post Insurance, Japan Post Holdings, Yamaguchi

By Daniel Tabbush

  • Of the nearly 200 financials in Japan, on average shares outstanding are up 3% over the past several years
  • Japan Post Insurance, Japan Post Holdings, and Yamaguchi Financial are at the extreme opposite end with shares outstanding at -22%
  • MS&AD features well ranking #11 of financials in our sample, with shares outstanding at -7%, adding well to its commitment on dividends, cross-shareholdings sales

#20 India Insight: Ultratech Cement Acquisition, India’s Bond in JP Morgan, Ather Energy Investment

By Sudarshan Bhandari

  • Ather Energy to Invest Over Rs 2,000 Crore in Maharashtra Plant
  • UltraTech Cement to acquire 23% stake in India Cements for Rs 1,885 crore
  • India’s government bonds included in JP Morgan Emerging Market index

Japan Weekly | IHI, Sumi Pharma, Toho, Sawai, JEOL

By Mark Chadwick

  • U.S. economy: Mixed signals with Q1 GDP growth revised up to 1.4%, driven by business investment and trade, while jobless claims hit a high, raising unemployment concerns.
  • Japan’s Nikkei 225: Strong performance, up 986 yen for the week, fueled by major stock rebounds and IPO interest, despite dollar-yen depreciation to 161 yen.
  • Market outlook: Nikkei up 2.2% in June, nearing 40,000 yen; cautious sentiment prevails with U.S. markets closed on July 4th and UK elections ahead

[Blue Lotus Daily – TMT Update]:700 HK/BIDU US/BABA US/0020 HK/NTES US/3690 HK

By Ying Pan

  • 700 HK/BIDU US/BABA US/0020 HK: Chinese Domestic AI Model Providers Announce Discount Policies to Capture Market Following OpenAI’s Withdrawal from China(+//////)
  • 700 HK: Tencent Releases 2024 Summer Vacation Playtime Schedule for Minors(/)
  • NTES US: <World of Warcraft Official> Servers to Launch on August 1, All Players Get 14 Days Free Game Time (+)

AUCTUS ON FRIDAY – 28/06/2024

By Auctus Advisors

  • AUCTUS PUBLICATIONS ________________________________________ Chariot (CHAR LN)C: target price of £0.50 per share: Key step towards developing future gas to industry business onshore Morocco – Chariot has signed Heads of Terms with Vivo Energy for the future offtake from the Loukos onshore licence where natural gas has been encountered at Dartois.
  • Up to 3 mmcf/d would be initially sold to the CNG midstream business under a long-term gas sales agreement.
  • Vivo intends to design, fund, construct and operate a CNG plant and virtual distribution network to transport natural gas from a number of sources to existing and new industrial customers in Morocco.

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Jun 29
0

Daily Brief Technical Analysis: Reiterating Japan Overweight — Add Exposure; Nikkei 225 and more

By | Daily Briefs, Technical Analysis

In today’s briefing:

  • Reiterating Japan Overweight — Add Exposure; Nikkei 225, TOPIX, TOPIX Small All Breaking Out

Reiterating Japan Overweight — Add Exposure; Nikkei 225, TOPIX, TOPIX Small All Breaking Out

By Joe Jasper

  • Our bullish outlook (since early-November 2023) remains intact. We continue to recommend buying dips as long as MSCI $ACWI and $EEM remain above important supports at $110 and $41-$42, respectively.
  • We are reiterating Japan as an Overweight — Add Exposure; Nikkei 225, TOPIX, TOPIX Small All Breaking Out. And 2+ year RS uptrends remain intact on TOPIX and Nikkei 225
  • We take a break from recommending Technology (though we are still bullish) and highlight buys within global Energy, Health Care, Telecommunications, and Utilities

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Jun 29
0

Daily Brief ECM: Emcure Pharmaceuticals Pre-IPO: IPO Price Band Set; Steep Valuation Offers Limited Upside Potential and more

By | Daily Briefs, ECM

In today’s briefing:

  • Emcure Pharmaceuticals Pre-IPO: IPO Price Band Set; Steep Valuation Offers Limited Upside Potential
  • Sanil Electric IPO Industry Analysis

Emcure Pharmaceuticals Pre-IPO: IPO Price Band Set; Steep Valuation Offers Limited Upside Potential

By Tina Banerjee

  • Emcure Pharmaceuticals seeks to raise INR19.5B in upcoming IPO through a fresh issue of INR8B and an OFS of 11.4M shares. IPO price band has been set at INR960–1,008.
  • The issue will open for subscription on July 3 and close on July 5. Bidding for anchor investors will open on July 2. Lot size for bidding is 14 shares.
  • IPO proceeds will be used to repay debt. As at March 31, 2024, the company’s outstanding borrowings stood at INR21B against cash balance of INR2B.  

Sanil Electric IPO Industry Analysis

By Douglas Kim

  • With the development of new and renewable energy, transmission and distribution network bottlenecks are worsening in many countries, and there is a strong demand for new transmission and distribution networks.
  • China is virtually excluded from competition for the US market. This situation has resulted in increased new orders for companies such as Sanil Electric. 
  • Our base case valuation of Sanil Electric is target price of 58,593 won, which is 95% higher than the high end of the IPO price range (30,000 won).

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Jun 29
0

Daily Brief Event-Driven: SK Square + SK Networks Merger Swap: A Guide to Pre-Merger Arb Spread Calculations and more

By | Daily Briefs, Event-Driven

In today’s briefing:

  • SK Square + SK Networks Merger Swap: A Guide to Pre-Merger Arb Spread Calculations
  • EQT/Keywords Studios: Lower Revised Offer
  • EQD | The Nikkei’s Rally May Be About To Restart
  • Esseco/Ercros: Bidding War

SK Square + SK Networks Merger Swap: A Guide to Pre-Merger Arb Spread Calculations

By Sanghyun Park

  • SK Square’s market cap exceeds SK Networks’ by over 10 times, qualifying this merger as small-scale. Thus, only SK Networks needs shareholder approval and grants appraisal rights solely to shareholders.
  • The current arbitrage spread for SK Networks’ appraisal rights is 1.95%, and for the swap, it’s 4.16%. These are nominal values excluding trading costs and taxes.
  • Today’s SK Square and SK Networks prices reflect arbitrage spreads. Yesterday’s 8% spread widened, focusing on narrowing appraisal rights and swap spreads, essential before next week’s announcement.

EQT/Keywords Studios: Lower Revised Offer

By Jesus Rodriguez Aguilar

  • On June 27, Keywords Studios (KWS LN) received an updated cash offer of 2,450p/share from EQT (3.9% lower than initial 2,550p), 66.7% premium, implied EV €2,405 million, 13.2x EV/fwd NTM EBITDA,
  • 22.4x Fwd P/E. The likelihood of a strategic buyer making an offer is low, while the offer from EQT is opportunistic, which will seek to merge Keywords with Virtuos.
  • The revised lower offer and the small extension to the PUSU deadline do not inspire optimism. Nevertheless, EQT remains a credible bidde. Gross spread stands at 5.9%. Maintain long.

EQD | The Nikkei’s Rally May Be About To Restart

By Nico Rosti

  • The Nikkei 225 Index rallied last week, and closed the week up.
  • Although slightly overbought, our models are not pointing to a SHORT opportunity here.
  • If the index pulls back this coming week, it may be a good idea to BUY, in order to take advantage of a possible reprise of the rally.

Esseco/Ercros: Bidding War

By Jesus Rodriguez Aguilar

  • Esseco, an Italian manufacturer of chlorine and sulfur-based chemicals,  has made a competing all-cash offer at €3.84/share, cum dividend, valuing 100% of Ercros (ECR SM)  at €351 million.
  • Putting 25e EBITDA of €70 million (source: IBES consensus), on the median of comparables, the stand-alone fair-value per share of Ercros is €4.4. Neither bid accounts for synergies. 
  • The strategic fit of Ercros for both bidders and its intrinsic value suggest a likely bidding war, given the scarcity of listed companies similar to Ercros. Reiterate long.

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Jun 29
0

Daily Brief Equity Bottom-Up: Broadcom’s AI-Driven Growth Signals Upside Amid Stock Split Surges and more

By | Daily Briefs, Equity Bottom-Up

In today’s briefing:

  • Broadcom’s AI-Driven Growth Signals Upside Amid Stock Split Surges
  • Bank Rakyat Indonesia (BBRI IJ) – Special Mention on the Turn
  • Ecocare Indo Pasifik (HYGN IJ) – Hygiene Is a Secular Growth Story in Indonesia
  • The Beat Ideas- Ramkrishna Forgings: A Strategic Growth Opportunity
  • Tech Supply Chain Tracker (29-Jun-2024): Notebook shipment update May 2024
  • Grab Holdings (GRAB US) – Facing Off the Competition
  • Rajshree Polypack (RPPL): All Set for a Strong FY25
  • Jyoti Resins and Adhesives- Forensic Analysis
  • Mattel Inc.: Will The Focus On Entertainment Vertical Expansion Lead To A Jump In Revenues? – Major Drivers
  • RANI: GLP-2 Deal Announced

Broadcom’s AI-Driven Growth Signals Upside Amid Stock Split Surges

By Uttkarsh Kohli

  • Broadcom’s Strong Q2 Performance: Broadcom’s Q2 revenue surged 43% year-over-year to USD 12.5 billion, driven by AI demand and VMware contributions.
  • Dominance in AI ASIC Market: Broadcom holds a 60% market share in AI-specific integrated circuits, serving major clients like Alphabet and Meta.
  • Lead up to Stock Split Upside Potential: Mega caps have seen an average 17% outperformance relative to S&P 500 from announcement to actual stock split, signaling sharp upside for Broadcom.

Bank Rakyat Indonesia (BBRI IJ) – Special Mention on the Turn

By Angus Mackintosh

  • Bank Rakyat Indonesia (BBRI IJ) have seen a significant correction on the back of concerns over credit quality, as provisions increased in 1Q2024, the bank addressed its problem micro-loans
  • The bank is addressing these loans with some further provisions likely over the coming quarter but special mention loans should plateau in July signifying a turn. 
  • Bank Rakyat Indonesia will slow micro-lending and grow corporate loans this year to address the cost of credit. Profits will likely be flat and dividend payout up. Valuations are attractive.

Ecocare Indo Pasifik (HYGN IJ) – Hygiene Is a Secular Growth Story in Indonesia

By Angus Mackintosh

  • Recently listed Ecocare Indo Pasifik (HYGN IJ) is a small-cap with significant potential as a leader in hygiene services in Indonesia, which is a segment with a secular growth story.
  • The company operates a rental model which means recurrent revenues with a high retention rate and annual price increases in a market with high barriers to entry. 
  • Ecocare Indo Pasifik (HYGN IJ) has entered the pest control market with services that can be offered to its existing 13,000 corporate customers, with cleaning services as an additional add-on. 

The Beat Ideas- Ramkrishna Forgings: A Strategic Growth Opportunity

By Sudarshan Bhandari

  • Rising exports, as it has higher margins and Growth in Non-Auto sectors
  • Acquisition of ACIL, JMT auto, TSUYO, and Multitech Auto will drive revenue
  • Reducing dependency on a single product or categories and single customer

Tech Supply Chain Tracker (29-Jun-2024): Notebook shipment update May 2024

By Tech Supply Chain Tracker

  • South Korean battery makers stand to benefit from Tesla’s production issues with 46800 cells, boosting profitability in May 2024.
  • STMicro and Panasonic Cycle Tech team up to introduce AI technology in e-bikes, making safety enhancements more affordable and accessible.
  • Axelera AI secures US$68 million for global expansion in AI, recognizing computing as the new currency and focusing on growth in the tech industry.

Grab Holdings (GRAB US) – Facing Off the Competition

By Angus Mackintosh

  • Grab Holdings (GRAB US) continues to face off the competition with product-led initiatives which continue to gain traction, improving retention rates, and increasing user spend and frequency.
  • Competition from new players in Singapore is evident but given Grab’s market position, which allows it to virtually guarantee driver’s daily income, whilst competition often affects smaller players more.
  • Grab Holdings (GRAB US) continues to reinvest excess margins in growth but the real kicker will come next year once new product initiatives fully take hold. 

Rajshree Polypack (RPPL): All Set for a Strong FY25

By Ankit Agrawal, CFA

  • RPPL executed well in FY24 with sales volume growth at 18% YoY. However, sudden and significant contraction in raw material prices dampened FY24 sales value growth to just 9% YoY.
  • Exports sustained its quarterly run-rate of INR 10cr+ in Q4FY24, resulting in FY24 aggregate exports sales at INR 42cr. Exports contributed 15% of revenues in FY24 vs 5% in FY23.
  • RPPL is also making good progress with its new initiatives. Its Olive Ecopak venture began commercial production in Mar 2024. Its injection molding segment is also scaling up well.

Jyoti Resins and Adhesives- Forensic Analysis

By Nitin Mangal

  • Jyoti Resins and Adhesives (JRA IN) engages in manufacturing of synthetic wood adhesives under ‘Euro’ brand and claims to be the second largest player in its respective market.
  • While on ground, Euro has gained good traction and has received positive feedbacks, there are however several takeaways noticed on the forensic end.
  • These include Lack of clarity on revenue figures, low FA base, lack of disclosures of important accounting policies such as leases and customer rewards, etc.

Mattel Inc.: Will The Focus On Entertainment Vertical Expansion Lead To A Jump In Revenues? – Major Drivers

By Baptista Research

  • Mattel Inc.’s first quarter 2024 financial results reflected a mixed performance, demonstrating resilience in some areas while facing challenges in others.
  • The company reported a slight decline in net sales, down 1% both as reported and in constant currency, totaling $810 million for the quarter.
  • Despite the dip in sales, Mattel showed considerable strength in profitability metrics.

RANI: GLP-2 Deal Announced

By Zacks Small Cap Research

  • Rani is a clinical-stage biotherapeutics company developing the ingestible robotic RaniPill (RP) that enables oral delivery of biologics & other large molecules.
  • Its pipeline features clinical assets RT-102 (teriparatide for osteoporosis) & RT-111 (ustekinumab for psoriasis).
  • Both programs have completed Ph1 trials characterizing safety tolerability & pharmaco-kinetics.

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Jun 29
0

Daily Brief Macro: Southern Copper: In a League of Its Own and more

By | Daily Briefs, Macro

In today’s briefing:

  • Southern Copper: In a League of Its Own
  • Walker’s Weekly: Dr. Jim’s Summary of Key Global Macro Developments – 28 Jun 2024
  • Does Modest Increase in Debt Level of France and Japan Create Problem for Their Economies?
  • HEW: Holding Patterns
  • Biden’s Catastrophic Debate Likely to Lead to 1968-Repeat; Can It End Differently?
  • The Heat Is On: News Flow and Sentiment in HONG KONG
  • CX Daily: China’s Popular Plastic Bag Replacement Is Less Green Than It Seems

Southern Copper: In a League of Its Own

By Sameer Taneja

  • Southern Copper (SCCO US) in the equity space is the best way to play bullish copper long-term with its long-term (10-year) ROCE of >22% 
  • With low-cost production assets in Peru and Mexico, the company has managed EBITDA margins of> 39% across the cycle (last 15 years) and averaging 50%.
  • A 100% payout results in a dividend yield of 3.5%. We believe there is a price for everything, and in the event of a 20% correction, it would be attractive.

Walker’s Weekly: Dr. Jim’s Summary of Key Global Macro Developments – 28 Jun 2024

By Dr. Jim Walker

  • Japanese Yen: The yen has significantly weakened, leading the US to label Japan as a potential currency manipulator; interest rate differentials and potential sales of US Treasuries are key factors.
  • Singapore Inflation: Inflation remains high at 3.1%, with historical parallels suggesting potential appreciation of the Singapore dollar by 4-5% if inflation doesn’t fall below 2%.
  • US Economic Indicators: Despite perceptions of a strong economy, recent US activity indicators, including manufacturing and services, show persistent weaknesses.

Does Modest Increase in Debt Level of France and Japan Create Problem for Their Economies?

By Alex Ng

  • France and Japan have seen a large increase in total non-financial sector debt/GDP since 2007, though these have been exceeded by China.  What are the consequences of this build up? 
  • Most of the surge in debt/GDP in Japan and 40% in France is due to higher government debt.
  • The adverse impact of higher debt and debt servicing on France’s and Japan’s economies should be small given a property crash or anti Euro government are avoided.

HEW: Holding Patterns

By Phil Rush

  • Central banks in Sweden, Mexico, and the Philippines have maintained their rates this week, with EA activity remaining stable according to ESI survey data, and political campaigns nearing their end.
  • The upcoming week is expected to be quieter with no significant central bank decisions on the horizon.
  • EA inflation data on Tuesday and US payrolls on Friday are the key events to watch, with the latter potentially having a larger impact on global markets.

Biden’s Catastrophic Debate Likely to Lead to 1968-Repeat; Can It End Differently?

By Prasenjit K. Basu

  • Pres. Biden’s disastrous debate performance (in which he looked senile and cognitively incapacitated) has led Democrats to call on him to step aside in favour of an alternate Democrat nominee.
  • In 1968, LBJ stepped aside before most primaries, and VP Humphrey won nomination at the convention. He lost the general mainly because third party candidate Wallace ate into Democrat votes. 
  • Trump landslide would be inflationary (because of 10% tariffs on all imports, more on China), plus the embarrassment of having a convicted felon as president. Near-term negative for US. 

The Heat Is On: News Flow and Sentiment in HONG KONG

By David Mudd

  • China ETF flows in June continued to show positive momentum while other categories remained flat.  Southbound Connect Flows were positive while Northbound Connect recorded a Net Sell.
  • Midea Real Estate Holdings jumped on plans to privatize its property development business
  • Shanghai Microport fell after launching a share placement at a 15% discount.  The share price  is hitting all time lows.

CX Daily: China’s Popular Plastic Bag Replacement Is Less Green Than It Seems

By Caixin Global

  • Bags / In Depth: China’s popular plastic bag replacement is less green than it seems Li Jingjing is a firm believer in making use of whatever’s around her.
  • Corruption /: Two of China’s former defense ministers expelled from Communist Party
  • Personnel /: ‘Big Six’ bank executive looks set to become Everbright Bank’s new president

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Jun 28
0

Daily Brief Thailand: Valeura Energy Inc and more

By | Daily Briefs, Thailand

In today’s briefing:

  • Valeura Energy (TSX: VLE): Operational Blip Offers an Opportunity for Investors

Valeura Energy (TSX: VLE): Operational Blip Offers an Opportunity for Investors

By Auctus Advisors

  • Production at Wassana has been suspended following the discovery of a crack within one of the MOPU’s steel jack-up legs that could pose a risk to the structural integrity of the MOPU.
  • The company is conducting further inspections and analysis to plan next steps.
  • Further visibility is expected in the coming weeks.

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