In today’s briefing:
- NIO HK Listing – Ticking the Box
- Edvantage – Solid Execution Not Priced In
- Coupang: No Substance to The Steady State EBITDA Guidance
- Farm Fresh IPO: Valuation Insights
- RPSG Ventures: Tepid FMCG Growth, But Long-Term Prospects Intact
- Ohsho Food Service (9936): Solid February Sales Despite Omicron Impact. Positive Effects of TV Show
- ICHI: Bright Outlook in 2022 and Beyond
- Entry in foods business: A DCF accretive move
NIO HK Listing – Ticking the Box
- NIO announced that it would look to list in the HK by way of introduction with trading set to begin on 10th March 2022.
- Unlike a secondary or a dual primary listing, there will be no new capital raised and there will be no secondary shares sold either.
- In this note we take a quick look at the deal dynamics.
Edvantage – Solid Execution Not Priced In
- Edvantage Group (382 HK), a play on higher education and vocation in China, now trades at 4.9x FY22e/3.8x FY23e. Concerns over the regulatory overhang are overdone, although they do exist.
- With a 30% payout ratio, the stock now trades at dividend yields of 6.1% FY22e/7.9% FY23e, assuming an EPS CAGR of 30% from FY21-23e.
- The company continues to execute positively in its release in Q1 FY22 with a 62% increase in gross profits YoY, and it has low gearing at 21.7% net debt/equity.
Coupang: No Substance to The Steady State EBITDA Guidance
- With attention on profitability of e-commerce increasing, Coupang provided guidance on its steady state margins. However, it lacked substance and only slightly better than consensus medium term expectations.
- Coupang (CPNG US)’s 4Q21 results, released after markets closed yesterday, was also disappointing as both revenue and OP fell short of consensus expectations.
- With the fair valuation as low as 50% of the current valuation, we think this earnings miss offers an opportunity on the short side with 50% potential returns.
Farm Fresh IPO: Valuation Insights
- Farm Fresh Berhad (FF MY) is a leading vertically integrated dairy player in Malaysia. It has launched an IPO to raise $239 million.
- In Farm Fresh IPO Initiation: Bet the Farm, we stated that the IPO is worth a closer look on a fundamental basis. The offer period is from 28 February-10 March.
- 30 cornerstone investors will take up c.80% of the institutional offering tranche. Our valuation analysis suggests that the IPO price is attractive.
RPSG Ventures: Tepid FMCG Growth, But Long-Term Prospects Intact
- RPSG Ventures reported strong Q3FY22 earnings, led by the BPO business where revenues grew 5% QoQ in INR terms and EBIT grew ~20% QoQ.
- The FMCG business however saw tepid performance with revenues declining to INR 95cr vs INR 100cr QoQ, due to temporary headwinds, however, the long-term prospects remain promising.
- The sports business is in nascent stage currently but the newly acquired IPL Lucknow franchise holds good promise.
Ohsho Food Service (9936): Solid February Sales Despite Omicron Impact. Positive Effects of TV Show
Monthly data for February: Positive impression
Ohsho Food Service (9936, the company) disclosed monthly data for its directly-owned stores for February (on a preliminary basis)
The company maintained solid sales despite Omicron impact, which gives us a positive impression.
ICHI: Bright Outlook in 2022 and Beyond
- Analyst meeting came out with a positive tone. we expect 2022-24E earnings to continue to grow at 19%CAGR supported by new products launch and market expansion in SEA, especially
- Both product and market expansion will be key growth drivers in 2022.
- Cut 2022-24E forecast to reflect the sluggish economy. Announce annual DPS of Bt0.50 (XD on 5 May).
Entry in foods business: A DCF accretive move
- Varun will start contract manufacturing for Pepsi’s snack brand Kurkure Puffcorn and we believe it is a step in right direction.
- Depending on the Varun’s progress in Kurkure Puffcorn business, we expect Pepsi to offer more products and regions to Varun.
- As of now Varun will set up a plant in Uttar Pradesh for Rs200-250mn and will produce Kurkure Puffcorn.
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.
Before it’s here, it’s on Smartkarma
