In today’s briefing:
- A Crash in 8 Korean Stocks Related to CFD Derivatives: Margin Call in Korea
- Skylark Holdings: A Big Upgrade to Guidance Could Be on The Horizon
- Hyundai Motor: Highest Operating Profit Among All Korean Companies in 2023
- Isetan-Mitsukoshi: ¥300 Billion from Just One Store
- CyberAgent: Growth Avenues Seem Limited and Further Downside to Consensus
- Vonovia: To Sell €1bn Residential Portfolio
- [ACM Research Inc. (ACMR US, BUY, TP US$30) Earnings Preview]: Tool Monopoly for Next YMTC Expansion
- ASRT: Rolling with Spectrum
- Shakeys Pizza: Q4 2022 Concall Guides For Teens CAGR Revenue Growth, Margins Flat
- Schrole Group Ltd – Strong Growth in Q1 Cash Receipts in a Usually Quiet Quarter
A Crash in 8 Korean Stocks Related to CFD Derivatives: Margin Call in Korea
- The biggest story in the Korean stock market in the past three days has been the crash in 8 stocks related to CFD derivatives.
- As a result of the CFD related margin call selling, the following are the major impact on the 8 related stocks and the overall Korean stock market in our view.
- They include a) overshooting on the downside on 8 related names, b) negative impact on the major rechargeable battery names, and c) negative impact on the overall Korean stock market.
Skylark Holdings: A Big Upgrade to Guidance Could Be on The Horizon
- The removal of COVID-19 testing requirements for Chinese tourists is expected to increase tourist arrivals from the Greater China region.
- In addition, consensus estimates for Skylark Co Ltd (3197 JP) are increasing due to the company’s faster-than-expected same-store sales recovery.
- Skylark’s annual operating profit could reach ¥20bn if revenues return to pre-COVID levels, which is significantly higher than consensus of ¥5.2bn and guidance of ¥6.0bn.
Hyundai Motor: Highest Operating Profit Among All Korean Companies in 2023
- We discuss the importance of Hyundai Motor generating nearly 11.5 trillion won in operating profit in 2023, which is likely to be the highest among all Korean companies.
- Hyundai Motor and Kia Corp combined are expected to generate operating profit of 20.7 trillion won in 2023, representing 57% of total operating profit of the top 10 Korean companies.
- In 2023, Hyundai Motor plans a full-scale world-wide roll-out of its EV Ioniq 6. Furthermore, it set a dividend payout ratio at 25% or higher.
Isetan-Mitsukoshi: ¥300 Billion from Just One Store
- Isetan Shinjuku has always outperformed competitors by a large distance but the store’s management is intent on widening this gap further.
- The key will be a focus on premium customers with ever more granular data sets to personalise marketing. 68% of sales now come from cardholders, compared to 50% in 2018.
- While dependence on just a few stores makes Isetan Mitsukoshi Holdings Ltd (3099 JP) vulnerable to downturns – such as the loss of tourist traffic – these stores are also resilient.
CyberAgent: Growth Avenues Seem Limited and Further Downside to Consensus
- CA reported 2QFY09/2023 results today. Revenue increased 2.4% YoY to ¥195.6bn (vs consensus ¥191.0bn) while operating profit declined 27.0% YoY to ¥18.8bn (vs consensus ¥18.0bn).
- The viewership for AbemaTV has fallen back to pre-FIFA levels and revenue growth from AbemaTV has been on a declining trend.
- CA didn’t release any gaming titles despite mentioning about 3 for 2022. The company has mentioned about 2 titles for FY09/2023 and the segment seems struggling with producing hit titles.
Vonovia: To Sell €1bn Residential Portfolio
- Vonovia to sell €1bn residential portfolio to US investor Apollo.
- The transaction could have a signal effect on the struggling German real estate market
- Share price is +13% since our initial note. This could be just the beginning of share price appreciation
[ACM Research Inc. (ACMR US, BUY, TP US$30) Earnings Preview]: Tool Monopoly for Next YMTC Expansion
- We expect ACMR to report C1Q23 top-line and IFRS net income 2.8% and 83% vs. consensus, respectively.
- We expect it to raise FY the mid-point of its guidance to US$560mn~, due to YMTC orders and 4Q23 order visibility;
- We are buyers into earnings but avoid long-positions between reporting dates due to geopolitical risk exposure.
ASRT: Rolling with Spectrum
- ASRT is purchasing Spectrum Pharmaceuticals (SPPI) in an all-stock transaction that adds ROLVEDON to its product portfolio.
- The initial reaction to the deal has been materially negative after ASRT added it would maintain a majority of SPPI’s operating expenses.
- ASRT’s management has been looking for an asset that would help diversify the revenue stream away from Indocin. The purchase of SPPI achieves such a goal
Shakeys Pizza: Q4 2022 Concall Guides For Teens CAGR Revenue Growth, Margins Flat
- Shakey’s Pizza (PIZZA PM) came in higher than analysts on earnings for FY22, posting an 873 mn peso bottom line number (vs. a 728 mn peso Bloomberg consensus).
- Systemwide sales grew 101% YoY to 14.1 bn pesos, with 4.5 bn pesos in the last quarter, up 113% YoY. Excluding Potato Corner, growth for the year was 37% YoY.
- Based on their guidance for FY23 of 20% growth on the topline/bottom line, the stock trades at 13.7x FY23e PE with future growth in the mid-teens CAGR.
Schrole Group Ltd – Strong Growth in Q1 Cash Receipts in a Usually Quiet Quarter
- Schrole Group Ltd (ASX:SCL) is an Australian software company focused on providing human resource technology solutions to the international education and training sector.
- Schrole has developed a suite of five HR Software-as-a-Service (SaaS) offerings including the core product, Schrole Connect, a SaaS-based staff recruitment platform.
- Schrole Group has reported a 23% increase in quarter-on- quarter cash receipts to $1.29m and a narrowed operating cash loss of $0.37m, in what Is a seasonally quiet quarter for the company.
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