Singapore

• This is our first report on IPG Photonics, one of the leading manufacturers of lasers and amplifiers catering to materials processing across the globe.
• The company was off to a strong start in 2022 profiting from increased demand in Europe, North America, and Japan.
• IPG Photonics also saw the expansion of medium-power and pulsed lasers, mainly fueled by increased demand for new applications.

• Qapita, a Singapore-based equity management startup, has acquired India-based ESOP Direct in a full cash transaction.
• The financial details of the deal, however, were not disclosed.
• ESOP Direct’s brand and leadership team will be retained after the acquisition, Ravi Ravulaparthi, CEO and co-founder of Qapita, told Tech in Asia.

• Given recent corporate events in S-REIT land, there could be some considerable money to be allocated to the sector near-term
• These flows come at a time when prices are down off highs and liquidity is low.
• There could be some price impact on certain types of S-REITs near-term.

• The Ong directors tried every trick in the book to derail the Hwa Hong Corp (HWAH SP) offer. The trump card was hiring Evercore to attract competing offers by 25 July.
• The Board confirmed today that there are no competing offers. This is a catalyst for shareholders sitting on the fence to accept the S$0.40 per share offer.
• The offer closes on 1 August. While meeting the 50%+ minimum acceptance condition will be a close-run, we think it will be met. The gross spread is 5.3%.     

• CarMax had a decent start to the 2023 fiscal and generated total sales of $9.3 billion in the first quarter, up 21% from the previous year’s period.
• Total unit sales in their retail division fell by 11% in the first quarter, and used unit comps dropped by 12.7% from the same period in 2017.
• The same broad macroeconomic factors that contributed to a market-wide decline in used car sales during the quarter drove CarMax’s performance.

• Carnival Corporation continued its recovery story from the pandemic and delivered a decent quarterly result by restarting 20 more ships, using 74% of its fleet’s capacity for guest cruise operations throughout the entire period.
• The company currently operates guest cruises with 91% of its fleet’s capacity which is a very positive sign.
• Regarding the ships in operation, occupancy for the second quarter was 69%, a significant improvement over the first quarter’s 54%.

• FedEx ended the 2022 fiscal year with its highest-ever revenue of $93.5 billion and adjusted operating income of $6.9 billion, both up 11% year over year, in the face of an increasingly difficult global backdrop.
• After a successful turnaround effort, the company has been enjoying the fruits of a successful long-term strategy.
• In this report, we have carried out a fundamental analysis of the historical financial statements of the company.

• This is our first report on process automation player, Alteryx.
• The company had a great start to 2022 and saw increasing traction with large enterprise customers.
• The company’s brand-new, integrated Alteryx Analytics Cloud platform now offers access to its entire cloud portfolio.

• Waste Management Inc is the market leader in the waste management business with a dominant share in the U.S. market.
• The company’s strong performance in the initial months of the year has set the tone for the remainder of 2022.
• Among major developments, the seventeenth R&D plant in their network and the fifth created by Waste Management will be coming online shortly in Oklahoma.

• Republic Services is a major player within the waste management and environmental services space.
• The management has invested more than $900 million in acquisitions that increased free cash flow and enhanced the market position of the company.
• Among major developments, Republic Services entered into a joint venture with Archaea Energy Inc. to develop 39 RNG projects over the U.S.

• This is our first report on environmental services player, Republic Services.
• The company has had a decent start to 2022 delivering EBITDA and revenue growth and showed an increase in the generated adjusted earnings.
• Also, Republic Services continues to realize the advantages of its investments in technology.

• This is our first report on Waste Management Inc, the market leader in the waste management business.
• Waste Management has also been working towards optimizing cost structures and reducing operating expenses.
• Among major developments, the seventeenth R&D plant in their network and the fifth created by Waste Management will be coming online shortly in Oklahoma.

• Consensus remains positive about Sea Ltd (SE US) with 12.3% QoQ revenue growth in Q2 and a 32.2% revenue CAGR over the next two years.
• However, with Free Fire losing active players and Shopee’s growth momentum in South East Asia broken, we expect a disappointing Q2 from Sea Ltd.
• Free Fire is on its last legs and Shopee has decided to halt its geographic expansion. Thus we think that there’s significant downside to Sea’s Q2 and medium-term consensus.

• This is our first report on UCaaS player, RingCentral.
• The company started off with 2022 reasonably well with solid revenue growth and expansion in both free cash flow and operating margins.
• Currently, it is the only company that offers a fully integrated solution that combines UCaaS and CCaaS on one bill.

• This is our first report on broadcasting giant, Sirius XM Holdings.
• The company reported strong first-quarter growth in subscription and advertising revenue, as well as strong cash flow generation.
• We initiate coverage on Sirius XM Holdings with a ‘Hold’ rating.

• This is our first report on Corteva, a major agricultural player within the seeds and crop protection domain.
• The company registered its Enlist Duo and Enlist One herbicides through 2029 with the U.S.
• EPA.

• This is our first report on rare disease specialist, BioMarin Pharma.
• The company had a decent start to 2022 recording $519 million in total revenues in the previous quarter.
• The $20 million in Voxzogo contributions during the first quarter increased the company’s full-year 2022 guidance to between $100 million and $125 million and will play a significant role in its future growth.

• Unsurprisingly, the independent financial advisor (IFA) considers WT Microelectronics (3036 TT)‘s S$1.93 offer for Excelpoint Technology (EXLP SP) to be fair and reasonable. We think that IFA’s valuation approach is sound. 
• The key condition is approval from shareholders and regulatory authorities (Taiwan pending). The scheme meeting is scheduled for 3:00 pm on 10 August. 
• We continue to think that offer is attractive. At the current price and for the 15 September payment date, the gross and annualised spread is 0.5% and 3.1%, respectively.

• On the 13 April, WT Microelectronics (3036 TT) entered into an agreement to acquire electronic component distributor Excelpoint Technology (EXLP SP) by way of a Scheme. 
• The cash consideration of S$1.93/share was a 7.8% premium to last close, but a 21.4% premium to the undisturbed price.
• The Scheme Doc is out. The Scheme Meeting will be held on the 10th August. The IFA considers the terms to be fair. Settlement is expected by the 15th September.

• There are 44 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal.
• Two new deals this week: Kanemi Co Ltd (2669 JP)‘s tender Offer, and Glory Star New Media Group Holdings (GSMG US)‘s underwhelming MBO.
• Key updates took place for: AGL Energy Ltd (AGL AU), Link Administration (LNK AU) & Genting Singapore (GENS SP) 

• Bloomberg is reporting Genting Singapore (GENS SP) has been attracting suitors, including MGM Resorts International (MGM US).
• With Macau all-but emulating a Shanghai-style lockdown, including the recent shuttering of all casinos, large global casino operators will be looking to diversify their revenue base. 
• But with Singapore potentially emerging as Asia’s go-to gaming destination going forward, it’s unlikely the Lim family will exit their Genting flagship.

• Bloomberg reported MGM Resorts International (MGM US) recently approached Genting Singapore (GENS SP)’s controlling shareholder, Genting Bhd (GENT MK), to express an interest in a deal.  
• While the discussions with MGM Resorts have fizzled out, other potential suitors are reportedly interested. Shares are in a trading halt pending a response to an SGX query.
• Genting Singapore trades at a discount to peers. Precedent transactions suggest a potential privatisation price of at least S$1.00 per share, a 33% premium to the last close. 

For our next Webinar, we are delighted to welcome back Analyst Henry Soediarko, who will go through his latest stock picks in the ASEAN region, and offer his outlook for 2H 2022.

The webinar will be hosted on Wednesday, 20 July 2022, 17:00 SGT/HKT.

Henry Soediarko is a Long & Short Investment Ideas generator for Asian Equities with 10 years of experience in a Hedge fund focused on bottom-up ideas, searching out mispriced ideas and misunderstood investment theses. He provides on-the-ground insights in various Asian markets with a sway towards ASEAN. 

• Bridgetown Holdings, a SPAC backed by Peter Thiel and Richard Li, is considering a potential merger with Singapore’s virtual telco Circles.Life (merger valuation could range US$1.5 billion to US$2.5 billion). 
• All in all, the valuation range of the proposed M&A merger of Bridgetown Holdings and Circles.Life needs to be reduced substantially, in order to generate more interest in this deal. 
• Otherwise, there is likely to be weak demand for this merger deal. In addition, the market environment for SPAC related M&A deals have deteriorated significantly in the past 6-12 months.