In today’s briefing:
- SSE50 Index Rebalance: 5 Changes as Adds Give Up Recent Gains
- CSI300 Index Rebalance: 9 Changes as Discretion Used
- RPPL: Q4 Weaker than Expected But On Track for Strong Earnings Growth Through FY25
- International Paper Company: How Long Will The Struggles Continue? – Key Drivers
SSE50 Index Rebalance: 5 Changes as Adds Give Up Recent Gains
- There are 5 changes for the SSE50 Index that will be implemented at the close on 9 June. There is over 1x ADV to sell on a few deletions.
- We estimate a one-way turnover of 5.3% at the June rebalance leading to a one-way trade of CNY 3.84bn. Index arb activity could add to the impact on the stocks.
- The adds outperformed the deletes from February to April but have given up a lot of the outperformance over the last month.
CSI300 Index Rebalance: 9 Changes as Discretion Used
- There are 9 changes for the Shanghai Shenzhen CSI 300 Index (SHSZ300 INDEX) at the upcoming rebalance that will be implemented at the close of trading on 9 June.
- While nearly all the changes are in line with forecasts, there are some stocks that have not been added or deleted as the index committee has used discretion.
- The Energy sector is the biggest gainer in terms of index spots, while the Consumer Discretionary and Health Care sectors lose two index spots each.
RPPL: Q4 Weaker than Expected But On Track for Strong Earnings Growth Through FY25
- Rajshree Polypack’s (RPPL’s) Q4FY23 came in weaker than expected on both the sales volume and the margins front. Higher depreciation and interest costs led by capex further dampened the profitability.
- However, RPPL is executing well on its revenue growth targets led by regular capex led investments. It is on track to do INR 450cr revenues by FY25.
- RPPL has potential to post a PAT of INR 30cr+ by FY25, suggesting that RPPL is available at around 6x P/E on a base of FY25E PAT.
International Paper Company: How Long Will The Struggles Continue? – Key Drivers
- International Paper had a challenging start to 2023 as its revenue was slightly down though still above analyst expectations.
- International Paper reported $65 million of year-over-year incremental earnings benefits from building better IP initiatives, but lower prices across their portfolio and weaker demand impacted margins.
- Despite these challenges, International Paper remained focused on their key priorities of taking care of employees, customers and maximizing shareholder value.
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