In today’s briefing:
- Deciphering the Dynamics of a Tachiaigai Bunbai Offering
- Bumitama Agri: Lagging CPO Price Action; Large Special Dividend Possible at FY21 Results Briefing
- BABA Triple Low or More to Go?
- CPO Plays Lag Palm Oil Prices As ESG Issues Weigh
- Risk Appetites Improving; Buying Cyclicals (Hotels/Resorts/Casinos, Metals/Mining)
- Easing supply chain, ramp-up in exports to drive growth
- Eicher Motors: Weak Quarter; Gradual Improvement in Supply Chain
- Kuala Lumpur Kepong (KLKK.KL) – A Strong Start To Fy22 E
- Lumax Industries: Near-Term Headwinds Persist; Long-Term Outlook Intact
Deciphering the Dynamics of a Tachiaigai Bunbai Offering
- In Japan, there is a type of offering called a tachiaigai bunbai offering which is used by companies to conduct small, relatively low-cost, offerings to increase liquidity or shareholder breadth.
- These are conducted with a bit over a week of warning, and there are usually very low limits of shares purchasable per applicant.
- There are certain dynamics surrounding such tachiaigai bunbai which are worth understanding.
Bumitama Agri: Lagging CPO Price Action; Large Special Dividend Possible at FY21 Results Briefing
- Bumitama Agri (BAL SP) is a pure-play CPO play on SGX which like the rest of its peers has lagged the price of CPO by a mile.
- What could be the catalyst to change this? We preview FY21 results which will be announced on 28th February and its dividend outlook going into FY22.
- BAL should take a page from the Geo Energy Resources (GERL SP) playbook and start to pay out aggressive bi-annual dividends to get Mr. Market’s attention.
BABA Triple Low or More to Go?
- BABA’s slide has been in line. Two key directional break points stand out that will drive the intermediate cycle. The current technical reading remains weak.
- MACD has drifted higher into the neutral zone while price has traded in a bearish flat range setting up a sell. MACD will be coiled for a fresh down leg.
- Well defined directional break points lies at 135 (trendline and price pivot) and 100 (triple low support).
CPO Plays Lag Palm Oil Prices As ESG Issues Weigh
- Palm oil prices are up 177% since May 2020 and 66% since June of last year. Palm oil touched a record high of RM5,700/mt the 31 January.
- Yet while palm oil has enjoyed a meteoric price rise, the performance of listed palm oil plays has bifurcated.
- Valuations appear largely constrained by environmental, social, and governance concerns, resulting in plantation stocks trading below their historical averages.
Risk Appetites Improving; Buying Cyclicals (Hotels/Resorts/Casinos, Metals/Mining)
- While we are not yet out of the woods, we are seeing several encouraging signals that indicate improving risk appetites.
- Additionally, we are starting to see improvement within the Consumer Discretionary (hotels/resorts, casinos, leisure, cruises), Transportation (airlines), and Materials (metals/mining) Sectors — we highlight several attractive stocks to buy.
- The fact that more areas are becoming attractive (and not just Energy and Financials) is a step in the right direction for bulls.
Easing supply chain, ramp-up in exports to drive growth
- The performance miss in EIM was led by lower realization and launch/event related marketing spends.
- With supply chain issues showing some signs of improvement, the management expects volume performance to be better.
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Eicher Motors: Weak Quarter; Gradual Improvement in Supply Chain
- Eicher Motors Ltd (Eicher) Q3FY22 performance was marginally below our estimates
- Eicher reported standalone net revenues of Rs 2,838 Cr in Q3FY22 (our estimate: Rs 2,934 Cr), flat YoY
- We maintain our HOLD rating on the stock with a revised TP of Rs 2,800/share (Rs 2,850 earlier), resulting in an upside of 9% from the current levels.
Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.
Kuala Lumpur Kepong (KLKK.KL) – A Strong Start To Fy22 E
- Near term outlook remains bright
- New acquisitions and high CPO ASP lifted upstream
- Downstream profits grew while property softened
- Raising EPS forecasts to factor in higher CPO ASPs
Lumax Industries: Near-Term Headwinds Persist; Long-Term Outlook Intact
- Lumax Industries (Lumax Inds) reported a weak set of results in Q3FY22 which stood below our estimates
- It reported revenue for the quarter at Rs 435 Cr (our estimate – Rs 467 Cr), registering a de-growth of 4% QoQ
- We retain our BUY rating on the stock with a revised target price of Rs 1,350/share (earlier Rs 1,600/share), implying an upside of 26% from the CMP.
Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.
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