In today’s briefing:
- Yamazaki Baking: Profitability to Double Over The Next Few Years
- Giant Biogene IPO – Reasonable Valuation but in Unreasonable Markets
- Costa Group’s Low-Hanging Fruit: Paine Schwartz Renews Interest
- Asia Gaming: Despite Continuing Covid Headwinds, Melco Remains Too Cheap to Ignore, as Dips Prevail
- Little Discussion of Listing Criteria Appropriate for Prime Market Listed Companies
- Netflix Inc: Subscriber Growth
- Omnicom Group Inc: Launch of Transact & Other Drivers
- Domino’s Pizza: Major Drivers
Yamazaki Baking: Profitability to Double Over The Next Few Years
- Yamazaki Baking (2212 JP)’s Q3 was mixed with revenue growing 5.6% YoY to surpass consensus by 3% but OP of ¥1.6bn was ¥650m below consensus.
- However, this was mostly priced-in, as shares are currently trading at the bottom end of the upward trend channel.
- With wheat prices down 23% from the peak, pressure from input price inflation should alleviate, resulting in margin upside in the fourth quarter.
Giant Biogene IPO – Reasonable Valuation but in Unreasonable Markets
- Giant Biogene (GB) is now looking to raise around US$80m in its Hong Kong IPO, down from its earlier target of US$500m raising.
- GB is a leader in the bioactive ingredient-based professional skin treatment product industry in China.
- We had looked at the company’s past performance and undertaken a peer comparison in our previous notes. In this note, we’ll talk about valuations and other deal dynamics.
Costa Group’s Low-Hanging Fruit: Paine Schwartz Renews Interest
- Costa Group Holdings (CGC AU), one of Australia’s largest fresh fruit and vegetable producer, is understood to be in the cross-hairs of Paine Schwartz Partners.
- According to the AFR, Paine is using Citi to buy shares up to $2.60/share a 16.6% premium to last close, with a 15% stake in mind.
- There’s a whiff of opportunism here after Costa’s recent EBITDA downgrade. However, the return of its major shareholder suggests value has emerged.
Asia Gaming: Despite Continuing Covid Headwinds, Melco Remains Too Cheap to Ignore, as Dips Prevail
- Melco Resorts & Entertainment will report 3Q22 results by November 11th. We expect sustaining recovery for its Manila and temporary Cyprus properties.
- Current valuations of the shares do not yet reflect some recovery expected from increased arrivals due to the re-opening of 4 China provinces and Shanghai, Sporadic closures happen.
- Threats of delisting fron last spring have significantly diminished as MLCO moved aggressively to meet NASDAQ concerns.
Little Discussion of Listing Criteria Appropriate for Prime Market Listed Companies
- It is anticipated that the plenary session will now begin the process of determining a deadline for transitional measures based on public comments.
- It is likely that a decision will be made on the direction to proceed with English disclosure with respect to the prime market and other market segments.
- In the meantime, a full-scale discussion on the listing criteria appropriate for prime market listed companies is awaited.
Netflix Inc: Subscriber Growth
- Netflix shareholders finally got some good news this quarter as the leading streaming entertainment company in the world finally posted some subscriber growth.
- Netflix successfully added a further 2.41 million net subscribers and now has 223.09 million paid subscribers globally.
- The management forecast indicates that it is expected to add more 4.5 million subscribers in the ongoing quarter.
Omnicom Group Inc: Launch of Transact & Other Drivers
- Omnicom had a decent financial performance this quarter with organic growth that was broad-based across its client sectors, regions, disciplines, and agencies.
- The introduction of Transact by Omnicom follows the blossoming interest from the agencies in getting a piece of the retail media pie.
- In this report, we have carried out a fundamental analysis of the historical financial statements of the company.
Domino’s Pizza: Major Drivers
- Domino’s Pizza delivered a disappointing result barely managing to meet analyst expectations with respect to its revenues and missing out on earnings.
- The company, along with its franchisees, opened more than 200 net new stores with net new store additions in 44 markets.
- We provide the stock of Domino’s Pizza with a ‘Hold’ rating and a revision in the target price.
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