In today’s briefing:
- Ciputra Development (CTRA IJ) – The Cosmopolitan Developer
- FDR’s Trade Embargo on Oil (Japan) & Biden’s Sanctions on China’s Semi Sector – Prelude to Disaster?
- Carnival Corp: New Cruise Ship Additions & Other Drivers
- Akamai Technologies: Malware Protection For APIs and Apps
- Banorte (GFNORTEO MX) – No Longer Bidding for Banamex, but Tougher Fundamental Hurdles into 2023
- CarMax Inc: Major Drivers
- Philip Morris International: Expansion In The Philippines
- Phillips 66: Potential Acquisition of DCP Midstream & Other Drivers
- PolyNovo Ltd (PNV AU): Shares Are Rallying Fueled by Strong US Sales and New Product Approval
- Walgreens Boots Alliance: The CareCentrix Acquisition & Other Drivers
Ciputra Development (CTRA IJ) – The Cosmopolitan Developer
- Ciputra Development (CTRA IJ) is Indonesia’s most geographically diversified and land bank-rich property developers, and also the pioneer of joint operating schemes that have allowed for faster expansion.
- The company reported a solid set of 1H2022 results with strong 9M2022 marketing sales pointing towards higher growth ahead, with guidance already revised upwards.
- Ciputra Development is a core proxy for the ongoing residential market recovery in Indonesia and valuations are significantly below the 5-year average on both PBV and PER.
FDR’s Trade Embargo on Oil (Japan) & Biden’s Sanctions on China’s Semi Sector – Prelude to Disaster?
- In the past couple of weeks, there have been tremendous sanctions by the US government on China’s semiconductor sector.
- In this insight, we compare this move to the US government putting a trade embargo on oil against Japan nearly 81 years ago.
- If there are severe disruptions to the semiconductor market in China, this will likely to have negative impact on the two Korean semi giants Samsung Electronics and SK Hynix.
Carnival Corp: New Cruise Ship Additions & Other Drivers
- Carnival Corp has continued its string of disappointing results and the company failed to meet Wall Street expectations in terms of revenues as well as earnings in the last quarter as well.
- Given the resumption of the guest cruise operations, the company saw its adjusted EBITDA being positive for the first time.
- The revenue of the last quarter increased by around 80% in comparison to the previous quarter.
Akamai Technologies: Malware Protection For APIs and Apps
- After a steady correction over the past few months, Akamai’s stock has been appreciating steadily with its results being a few days away.
- Akamai has been leveraging its financial strength to make substantial investments in cloud computing and financial strength.
- The company’s security portfolio of zero trust enterprise has been performing well with several significant customer wins.
Banorte (GFNORTEO MX) – No Longer Bidding for Banamex, but Tougher Fundamental Hurdles into 2023
- Banorte pulls out of the Banamex bidding, leaving two Mexican groups as potential bidders; this now removes the risk of a capital raise for Banorte and a potential dividend cut
- Banorte delivered a strong set of 3Q22 results, yet we believe that its returns could be close to peaking and that we expect a profitability downturn in 2023
- The withdrawal from the Banamex bidding is shareholder positive, but we see that current valuations do not reflect 2023 risks, especially from higher cost of risk and squeezed credit spreads
CarMax Inc: Major Drivers
- CarMax’s stock has been on a downward trajectory since the last quarterly result which had been a major disappointment.
- In response to consumer demand and the current environment, CarMax continued to offer a higher mix of lower-priced vehicles.
- We provide the stock of CarMax a ‘Hold’ rating with a revision in the target price.
Philip Morris International: Expansion In The Philippines
- Philip Morris continued to demonstrate a strong underlying momentum with positive volume that supported a better than expected top-line growth in the last quarter.
- The company delivered yet another all-around beat as net revenues of pro forma grew organically, which reflects continued strong growth in IQOS as well as the ongoing recovery of combustible business in various markets.
- Strong quarter pro forma user growth and continued excellent IQOS performance were very impressive.
Phillips 66: Potential Acquisition of DCP Midstream & Other Drivers
- With the results of Phillips 66 around the corner, the stock price has been appreciating over the past few weeks.
- Among major updates, Phillips 66 has offered to acquire the public units of DCP Midstream, the natural gas company, to boost its business of natural gas liquids.
- We provide the stock of Phillips 66 a ‘Hold’ rating and a revision in the target price.
PolyNovo Ltd (PNV AU): Shares Are Rallying Fueled by Strong US Sales and New Product Approval
- PolyNovo Ltd (PNV AU) reported 73% y/y revenue growth to A$12.5M in Q1FY23, driven by the U.S. The company reported record high monthly sales of A$5.4M in September 2022.
- The company is aggressively expanding team and the increased headcount is having the desired impact on sales growth and loss continues to be minimized compared to business expansion.
- PolyNovo received FDA clearance for NovoSorb MTX, which expands PolyNovo’s U.S. addressable market by ~A$500M. The company plans to launch SynPath in the U.S. in 2023 (addressable market ~$400M).
Walgreens Boots Alliance: The CareCentrix Acquisition & Other Drivers
- Walgreens’ stock had a disappointing performance during the course of the year but there as been some recovery after a decent result.
- In the quarter pharmacy performance benefitted from the improved trends from maintenance medications and seasonal scripts.
- We provide the stock of Walgreens with a ‘Hold’ rating and a revision in the target price.dditional workstreams for its consumer-facing digital assistant.
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