In today’s briefing:
- BYD (1211 HK): Largest Producer in Dramatically Expanding Market
- Rept Battero IPO: The Bull Case
- Allwyn (Formerly Sazka) – ESG Report – Lucror Analytics
- Denso Corp Placement – Not Quite Shaping up for a Win Yet
- [Miniso Group (MNSO US, BUY, TP US$31) Company Update]: Management Reassured Future Growth Prospects
- Rept Battero IPO (PHIP Updates): Margin Sustainability Is Concerning
BYD (1211 HK): Largest Producer in Dramatically Expanding Market
- China NEV market grew by 35% YoY in first ten months and by 39% YoY in October 2023.
- BYD’s production is significantly larger than other NEV producers in China.
- We believe the stock has an upside of 80% and a price target of HKD387. Buy.
Rept Battero IPO: The Bull Case
- REPT BATTERO Energy (1998104D CH), a leading EV battery manufacturer, is premarketing a US$300 million HKEx IPO, according to press reports.
- According to Frost & Sullivan, in 1H23, Rept was the tenth-largest lithium-ion battery manufacturer globally for annual installations for new energy applications.
- The bull case rests on rapid ESS revenue growth, reducing customer concentration risks, ambitious capacity expansion plans, promising margin trajectory and improving cash collection cycle.
Allwyn (Formerly Sazka) – ESG Report – Lucror Analytics
- Lucror Analytics’ ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable).
- We assess Allwyn’s ESG as “Adequate”, in line with its Environmental, Social and Governance scores. Controversies are “Immaterial” and Disclosure is “Adequate”.
- Allwyn (formerly Sazka) is one of the largest pan-European lottery operators, and is active in all major EU countries where lotteries have been privatised (Czech Republic, Cyprus, Austria, Greece and Italy).
Denso Corp Placement – Not Quite Shaping up for a Win Yet
- On 28th Nov 2023, Toyota (7203 JP) announced that it would sell around 9.4% of Denso (6902 JP) in order to reduce its cross-shareholding.
- Since then the shares haven’t corrected by much, as compared to prior large secondary deals.
- We have covered the deal background in our earlier notes. In this note, we talk about deal dynamics, as compared to prior deals.
[Miniso Group (MNSO US, BUY, TP US$31) Company Update]: Management Reassured Future Growth Prospects
- MNSO management hosted a conference call today which reiterated normal operation of business, guided C4Q23 revenue above consensus, gross margin up QoQ, and non-GAAP net profit margin stable;
- MNSO management refuted short seller’s thesis, commented distributor inventory levels at healthy levels and provided backgrounds on disclosed insider share sales;
- We welcome MNSO management’s timely communication and believe its business model to be solid. We reiterate BUY and TP.
Rept Battero IPO (PHIP Updates): Margin Sustainability Is Concerning
- REPT BATTERO Energy (1998104D CH) is a lithium-ion battery manufacturer focusing EV and ESS battery products. The company’s application for a HKEx IPO has been approved.
- Though the company had reported strong growth in revenue over the last 3-4 years, the company has been struggling to make profits.
- Rept Battero has started to generate GPM, however, our analysis suggests that there is very little room for GPM to improve.
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