In today’s briefing:
- Oriental Watch: Steady FY23, Dividend Yield 14%, Cash >50% of Market Cap
- Nikkei 225 Index Rebalance Preview (Sep 2023): Ranking, Capping, Funding & Other Changes
- Quiddity Leaderboard ES50 Sep 23: Ferrari Retains the Lead; US$1.26bn Potential Inflow
- Hero Motocorp (HMCL IN) | Course Correction
- Melco: Imminent Opening of Its Cyprus Resort Show Possible Upside in Sentiment Among Wary Investors
- Daehan Flour Millsㅣ ControversyㅣConfidential Information Leakage in ‘Gompyo Wheat Beer’ Supply Chain
- DoorDash Inc.: Is There A Real Boost From The DashPass? – Key Drivers
- 4Q Follow-Up – Asahi Broadcasting Group Holdings Corporation (9405 JP)
- Campbell Soup Company: 5 Revealing Facts From The Company’s Recent Performance -Financial Forecasts
- HKEX Launches Yuan Counter for Trading of Hong Kong-Listed Shares
Oriental Watch: Steady FY23, Dividend Yield 14%, Cash >50% of Market Cap
- Oriental Watch (398 HK) reported a steady result, with 2023 earnings <18% YoY ( adjusted for one-time gains in 2022 <5% YoY), which was broadly in line with our expectations.
- The DPS for FY23 was 61 cents (FY22: 74 cents) lower than our expectation of 65 cents, a 100% payout ratio equating to a 14% dividend yield.
- Cash at 1.07 bn represents > 50% of market capitalization. We believe the management will dip into reserves when it requires to manage a decent payout for shareholders.
Nikkei 225 Index Rebalance Preview (Sep 2023): Ranking, Capping, Funding & Other Changes
- The review period for the Nikkei 225 (NKY INDEX) September rebalance ends end July. We take another stab at identifying potential inclusions and exclusions.
- There will be a big impact on the potential index changes. Fast Retailing (9983 JP)‘s index weight could be capped and there will be a big funding trade.
- There are many things to watch out for that could affect the impact on the inclusions, including stock splits among potential adds and stepwise inclusion of stocks in the index.
Quiddity Leaderboard ES50 Sep 23: Ferrari Retains the Lead; US$1.26bn Potential Inflow
- The ES50 Index is one of the most highly-tracked indices in mainland Europe and the annual index review takes place in September.
- Historically, these Rebalance events have had significant volume and ADV impact and they generally involve large cap names.
- In this insight, we take a look the names leading the race to become ADDs/DELs for the upcoming index review in September 2023.
Hero Motocorp (HMCL IN) | Course Correction
- Hero Motocorp (HMCL IN) is undergoing a course correction, acknowledging its past mistakes.
- Multiple levers on the horizon arguing for a change of stance on HMCL.
- The stock is reasonably valued, and institutional holdings are at a 12-quarter low, signaling the need for attention.
Melco: Imminent Opening of Its Cyprus Resort Show Possible Upside in Sentiment Among Wary Investors
- Melco has lagged other Asian operators as Macau recovery pits up speed. Concerns over debt levels continue.
- Fair value estimated slightly above current trade largely reflecting 2022 results.Maca
- Macau and Manila tracking positive, Cyprus could provide accretive EBITDA before end of this year and beyond/
Daehan Flour Millsㅣ ControversyㅣConfidential Information Leakage in ‘Gompyo Wheat Beer’ Supply Chain
- A legal conflict over the brewing method has emerged between Seven Broi Brewery, the former manufacturer, and Daehan Flour Mills, the trademark holder.
- The court’s decision on Seven Broi Brewery’s injunction request could impact the production and sale of Gompyo Wheat Beer, with a competitor ready to enter the market.
- This incident falls under the category of ‘Anti-competitive Practices’ risks, and currently, Daehan Flour Mills’ company risk is rated at a medium level of 1.3.
DoorDash Inc.: Is There A Real Boost From The DashPass? – Key Drivers
- DoorDash delivered an all-around beat in the previous quarter.
- DoorDash’s expansion into new verticals, particularly the grocery delivery sector, yielded positive results, with improved product quality and a wider selection of offerings.
- The company’s focus on enhancing the customer experience, including accurate order fulfillment and convenient delivery options, contributed to the overall success.
4Q Follow-Up – Asahi Broadcasting Group Holdings Corporation (9405 JP)
- Over the last 5 years, share prices of major terrestrial TV broadcasters have substantially underperformed TOPIX, in large part due to the unprecedented, challenging environment as annual data by Dentsu showed total internet advertising expenditures exceeded total television media advertising expenditures in 2019 for the first time ever, and the annual MIC survey on average time spent using main media showed internet usage time exceeded TV real-time viewing in 2020.
- However, this underperformance trend has begun to change in 2023, as the stock market begins to discount the potential to commercialize the IP value of broadcaster content libraries.
- In February, USEN-NEXT HOLDINGS announced plans to acquire Premium Platform Japan, Inc. (PPJ), the operator of “Paravi” subscription video distribution service.
Campbell Soup Company: 5 Revealing Facts From The Company’s Recent Performance -Financial Forecasts
- Campbell Soup delivered a mixed result in the recent quarter, with revenues below market expectations but it managed to surpass the analyst consensus in terms of earnings.
- Organic net sales climbed 5% year on year in the third quarter, with favorable inflation-driven net price realisation offset in part by volume and mix decreases.
- We give Campbell Soup Company a ‘Hold’ rating with a revised target price.
HKEX Launches Yuan Counter for Trading of Hong Kong-Listed Shares
- The Hong Kong Stock Exchange (HKEX) launched its new dual-currency counter Monday, and the first batch of 24 stocks had a total turnover of 163 million yuan ($22.9 million) on the first day.
- The Hong Kong Dollar-yuan dual-currency counter allows investors to trade and settle designated shares in Hong Kong or mainland China currency, offering the potential to access new liquidity.
- The model also lays the groundwork to support the next phase of development to allow investors from the Chinese mainland to trade Hong Kong-listed yuan, or renminbi, securities through the southbound Stock Connect, the HKEX said.
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