In today’s briefing:
- CJ Corp: FTC Could Crack Down on CJ Olive Young With Huge Fines
- Rakuten Mobile Could Be Churning Profits Next Year
- Korea Small Cap Gem #25: Taeyoung E&C [P/E of 1x and P/B of 0.2x]
- APAR Industries- Forensic Analysis
- Chinese Interest in Solaris Resources Highlights Value in Junior Copper Equities
- Micron. Con Te Partirò
- DocuSign Inc.: Mastering Omnichannel Strategy for Growth & Scalability! – Major Drivers
- AutoZone Inc.: Discover the Profit Engines Driving Growth! – Major Drivers
- Hugel Inc (145020 KS): Achieves Record High Revenue in 2Q23; Resubmits Marketing Application in US
- Cirrus Logic Inc.: Exploring The Factors That Broaden Revenue and Market Diversity! – Major Drivers
CJ Corp: FTC Could Crack Down on CJ Olive Young With Huge Fines
- CJ Corp’s share price declined sharply by 10.7% to reach 80,200 won on 4 October. CJ Olive Young is the number one health & beauty store chain in Korea.
- According to local media, CJ Olive Young is in danger of being fined large amounts of money by the Fair Trade Commission (FTC).
- It appears likely that CJ Corp’s share price could fall further close to the five year low end of the trading range (60,000 won) in the next several weeks.
Rakuten Mobile Could Be Churning Profits Next Year
- Rakuten Group (4755 JP)‘s shares plummeted 80% in 8 years, reaching ¥500 in June 2023 due to ¥1.3 trillion mobile business losses.
- Expecting a positive shift as Rakuten Mobile approaches platinum band access and subscribers poised for exponential growth following the KDDI agreement.
- We are expecting Rakuten Mobile to turn profitable next year, while the consensus is projecting an operating loss of around ¥200bn for the business.
Korea Small Cap Gem #25: Taeyoung E&C [P/E of 1x and P/B of 0.2x]
- Taeyoung Engineering & Construction (009410 KS) is the 25th company in our Korea Small Cap Gems series.
- Taeyoung E&C is a mid-sized construction company in Korea with a market cap of 146 billion won. Its shares are trading at P/E of 1x and P/B of 0.2x.
- At the end of 1H 2023, the company had 6.1 trillion won in order backlog, representing a backlog/sales ratio is 2.3x.
APAR Industries- Forensic Analysis
- Apar Industries (APR IN) is the global leader in aluminum and alloy conductor manufacturing. The company is also India’s largest and world’s third largest transformer oil manufacturers.
- After two silent years during covid, the company’s operations have taken off and there is growth reported in each of its three business segments.
- The balance sheet has also shown improvement and looks stable. But, our principle concerns remain on the operating cash flow side, which looks to be misstated.
Chinese Interest in Solaris Resources Highlights Value in Junior Copper Equities
- Solaris Resources (SLS CN) yesterday announced it engaged Chinese investment bank CICC to help it with unsolicited M&A approaches.
- Solaris, Filo, Entree Resources, and Los Andes Copper are just four of the junior copper miners screening extremely well on M&A criteria.
- Most copper supply/demand models forecast a large supply shortage of copper in the coming decade. Junior copper miners with large deposits will become increasingly valuable.
Micron. Con Te Partirò
- Despite beating guidance, Micron’s latest earnings report confirms a still-toxic memory market environment
- ASPs for both DRAM and NAND have now declined sequentially for the past eight quarters
- Their HBM3E solution is an unfortunate case of too much, too late.
DocuSign Inc.: Mastering Omnichannel Strategy for Growth & Scalability! – Major Drivers
- DocuSign, Inc. delivered an all-around beat in the previous quarter, continuing to build momentum in its business by progressing on key projects and enhancing its product offering.
- With a non-GAAP operating margin of 25%, Q2 total sales of $688 million was up 11% from the same quarter last year.
- DocuSign shipped and announced several new, highly developed features for its Web Forms offering during the quarter.
AutoZone Inc.: Discover the Profit Engines Driving Growth! – Major Drivers
- AutoZone delivered an all-around beat in the most recent quarterly result.
- The company achieved a total sales growth of 7.4% for the fiscal year, accompanied by a 12.9% increase in earnings per share.
- Additionally, the company has introduced new reporting metrics to provide enhanced visibility, including same-store sales results for domestic, international, and total company operations.
Hugel Inc (145020 KS): Achieves Record High Revenue in 2Q23; Resubmits Marketing Application in US
- Hugel Inc (145020 KS) reported 28% YoY growth in both revenue and operating profit to KRW81.6B and KRW28B in 2Q23, respectively, driven by solid performance of botulinum toxins and fillers.
- Hugel has resubmitted marketing application for botulinum toxin in the U.S. for the third time, with approval expected in 1Q24. The U.S. is the world’s single largest botulinum toxin market.
- The company is seeing North America, Australia, New Zealand, and China as future growth engines to achieve its long-term target revenue of KRW1 trillion and operating profit margin of 45%.
Cirrus Logic Inc.: Exploring The Factors That Broaden Revenue and Market Diversity! – Major Drivers
- Cirrus Logic, Inc. delivered an all-around beat in the most recent quarterly result.
- With the help of its products, shipments, and smartphones, Cirrus Logic achieved revenue of $317 million, which was near the high end of its forecast for the quarter.
- Beyond the laptop market, Cirrus Logic also continues to invest in additional products and client relationships that, in the long run, may increase both its revenue and market variety.
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