In today’s briefing:
- WH Group (288 HK) – Stronger, But Still WAY Cheap to Peers
- SET50 Index Rebalance: BLA, JMT, JMART Added; COM7, RATCH, STGT Out
- ThaiBev’s BeerCo IPO: Third Time’s the Charm?
- Smartkarma Corporate Webinar | Golden Agri-Resources: From Seed to Shelf
- DXN Holdings Pre-IPO Tearsheet
- Torikizoku Holdings (3193): Earnings Forecast Update. Raising Target Price
- Apollo Tyres – Maintaining FY26 Target of USD5bn Revenue with 12-15% ROCE
- Apollo Tyres – Margin Headwinds Owing to Rising RM Prices; Maintain BUY
WH Group (288 HK) – Stronger, But Still WAY Cheap to Peers
- WH Group has sharply outperformed both global peers and HK/China-listed peers since the last bullish insight pounded the table in mid-March 2022.
- Since then, the Pork/Feed ratio has been climbing in China and flat to down in the US, and pork prices in China are particularly robust recently.
- WH Group (288 HK) remains cheap as chips. And despite gains, still Cheapest in Yonks relatively speaking.
SET50 Index Rebalance: BLA, JMT, JMART Added; COM7, RATCH, STGT Out
- Bangkok Life Assurance (BLA), JMT Network Services (JMT) and Jaymart (JMART) will replace Com7 (COM7), Ratch Group (RATCH) and Sri Trang Gloves (STGT) in the SET50 INDEX.
- Estimated one-way turnover is 2.1% and will result in a one-way trade of THB 1,914m. There is little funding flow on the other index stocks.
- The inclusion of Bangkok Life Assurance (BLA TB) is a minor surprise. The deletion of Com7 PCL (COM7 TB) is a much bigger surprise.
ThaiBev’s BeerCo IPO: Third Time’s the Charm?
- Thai Beverage (THBEV SP)’s BeerCo is once again pre-marketing an SGX IPO to raise US$0.8-1.0 billion (vs US$2 billion previously), according to press reports.
- In 1HFY2022, the group revenue returned to growth due to Vietnam. The easing of restrictions in Thailand should boost volumes in 2HFY2022.
- Creditably despite rising raw material costs, the margins remained steady helped by forward buying contracts. However, the unwinding of the forward contracts will likely lead to margin pressures in FY2023.
Smartkarma Corporate Webinar | Golden Agri-Resources: From Seed to Shelf
For our next Corporate Webinar, we are glad to welcome Golden Agri Resources (GGR SP) Director, Investor Relations, Richard Fung. In the upcoming Webinar, Richard will share a short company presentation, after which he will engage in a fireside chat with Smartkarma Analyst Angus Mackintosh. A live Q&A session will follow.
The Corporate Webinar will be hosted on Tuesday, 5 July 2022, 17:00 SGT.
Listed on the Singapore Exchange since 1999, Golden Agri-Resources Ltd (GAR) is one of the leading integrated palm oil plantation companies in the world, with a market capitalisation of US$2.6 billion as of 31 May 2022. During 2021, it generated revenue of over US$10 billion and underlying profit of US$603 million. GAR’s integrated operations focus on the technology-driven production and distribution of an extensive portfolio of palm-based products.
GAR encompasses an efficient end-to-end supply chain, from responsible production to global delivery. It cultivates 536 thousand hectares of palm oil plantations in Indonesia, including plasma smallholders; harvesting and extracting fresh fruit bunches into crude palm oil and palm kernel; processing into a broad range of value-added products such as cooking oil, margarine, shortening, biodiesel, and oleochemicals.
GAR has a global market presence with destination refining, ex-tank operations, and sales representative offices in several markets. GAR’s products are sold globally to approximately 100 countries. GAR also has complementary businesses such as soybean-based products in China, sunflower-based products in India, and sugar businesses.
Corporate Webinars by Smartkarma Corporate Solutions feature discussions with IROs and Executives, discussing their companies, the challenges they face, and the opportunities in their sectors and markets.
DXN Holdings Pre-IPO Tearsheet
- DXN Holdings (2080694D MK) is looking to raise about US$300m in its upcoming Malaysia IPO. The deal will be run by Maybank, CIMB, CLSA and RHB.
- As a global health and wellness direct selling company, DXN’s portfolio consists of health and wellness consumer products such as fortified food and beverages, health and dietary supplements and more.
- It has 291 stock keeping units (SKUs) of health and wellness consumer products manufactured in-house and distribution footprints in 50 countries as of the Latest Practicable Date (30 Apr 2022).
Torikizoku Holdings (3193): Earnings Forecast Update. Raising Target Price
- We update our earnings forecast for Torikizoku Holdings (3193, the company) and raise our target price to 2,500 yen. We reiterate our Hold rating.
- On June 10, the company announced 1-3Q FY7/22 sales of 13.260bn yen (-6.9% YoY), OP of -2.583bn yen (-2.588bn yen in 1-3Q FY7/21), and RP of 1.817bn yen (-2.027bn yen in 1- 3Q FY7/21)
- We raise our FY7/22 OP forecast from -3.544bn yen to -2.289bn yen (-4.663bn yen in FY7/21), and RP forecast from -575m yen to 2.104bn yen (-315m yen in FY7/21)
Apollo Tyres – Maintaining FY26 Target of USD5bn Revenue with 12-15% ROCE
- In its analyst meet, APTY management reiterated its revenue target of USD5bn in FY26, implying a 15% CAGR over FY22-26E vs. a 9% CAGR over FY18-22.
- Management maintained the ROCE (pre-tax) target at 12-15% by FY26E (7% in FY22), led by better asset turnover and margins.
- In the near term, cost pressures due to an increase in prices of crude derivatives and a lag in the pass-through of commodity inflation are likely to impact margins.
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.
Apollo Tyres – Margin Headwinds Owing to Rising RM Prices; Maintain BUY
- Market share gains in TBR & PCR led by R&D investment: APTY’s R&D spends have been consistently ahead of competition over the last 5-10 years (Exhibit 5), which is reflected in its better quality TBR and PCR tyres.
- Demand outlook remains positive: The domestic replacement tyre market is witnessing signs of recovery, led by the PCR and T&B segments.
- Margin headwinds to persist with elevated crude prices and depreciated INR: Crude derivatives account for ~40% of the RM basket for APTY.
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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