In today’s briefing:
- Delta Djakarta (DLTA IJ): Cheaper Higher Yield Option to Multi Bintang
- TOA Paint (Thailand) (TOA TB) – An Unfortunate Turn of Events
- Eisai Co Ltd (4523 JP): Becomes the Best Alzheimer’s Disease Play After Full FDA Nod
- Taishin – Monthly Profit Surge at +253% in May Suggests Strong Quarterly Numbers
- Bangladesh Stock Picks | Quarterly Updates | OLYMPI, SQTT, BPML
- Lululemon: Underestimated Is An Understatement
- Amazon: Monetary Conditions Are In The Driver’s Seat And Higher Margins Are Already Priced-In
Delta Djakarta (DLTA IJ): Cheaper Higher Yield Option to Multi Bintang
- Delta Djakarta (DLTA IJ) is a cheaper small-cap option to play the recovery of tourism in Indonesia instead of Multi Bintang Indonesia (MLBI IJ)
- It’s 5Yr/10Yr average ROCE is 22%/29% lower than MLBI IJ due to the high net cash on the balance sheet, ~25% of the market capitalization.
- Trading at 11x PE and 10% dividend yield on normalized earnings (Assuming a 110% payout ratio since the 5 Yr average is 120%), the stock is super cheap.
TOA Paint (Thailand) (TOA TB) – An Unfortunate Turn of Events
- TOA Paint is Thailand’s leading decorative paints player with a 48% market share and a good track record but it has become caught up by association with STARK Corporation.
- This looks like a guilt by association sell down given there are no visible business connections between STARK and TOA Paint but the eldest son of the family controls Stark.
- The second son of the Patriarch is CEO of TOA Paint, which is otherwise enjoying a strong recovery in demand plus lower input costs. Valuations have declined to attractive levels.
Eisai Co Ltd (4523 JP): Becomes the Best Alzheimer’s Disease Play After Full FDA Nod
- Eisai Co Ltd (4523 JP) has received FDA traditional approval for Leqembi injection for the treatment of Alzheimer’s Disease. Following the approval, CMS confirmed broader Medicare coverage for Leqembi.
- Leqembi is the first and only approved treatment shown to reduce the rate of disease progression and to slow cognitive and functional decline in adults with Alzheimer’s Disease.
- Eisai pegged peak sales of Leqembi at $7.3 billion in 2030. The projection is based on the company’s estimate that about 2.5M people will be eligible for treatment by 2030.
Taishin – Monthly Profit Surge at +253% in May Suggests Strong Quarterly Numbers
- The monthly profit figures at Taishin are rising substantially, suggesting a strong 2Q23
- Taishin’s LDR had declined dramatically in 1Q23, monthly figures may suggest expansion
- With declining credit costs, to match lower NPLs, the outlook for Taishin’s profit is strong
Bangladesh Stock Picks | Quarterly Updates | OLYMPI, SQTT, BPML
- Olympic Industries (OLYMPI BD) experienced weak 3Q earnings due to moderated growth, contraction of margins, and the impact of high inflation.
- Square Textiles (SQTT BD) recorded weak 3Q numbers due to factors such as a decline in yarn production, increased energy costs, and decreased yarn prices in the international market.
- Bashundhara Paper Mills (BPML BD) delivered strong 3Q earnings driven by increased sales, leading to improved profitability.
Lululemon: Underestimated Is An Understatement
- The company’s international sales growth is somewhat of a hidden asset, as the arena is underserved.
- Lululemon’s regional brand exposure is expanding with new store openings.
- The stock is theoretically undervalued, which is why the stock is undervalued.
Amazon: Monetary Conditions Are In The Driver’s Seat And Higher Margins Are Already Priced-In
- Amazon has significantly underperformed the broader equity market, in spite of the recent rally.
- The narrative for generative AI is strong, but the share price is currently driven by other factors.
- Margin improvements are being priced-in, which significantly limits any potential upside, without monetary conditions becoming supportive.
💡 Before it’s here, it’s on Smartkarma
Sign Up for Free
The Smartkarma Preview Pass is your entry to the Independent Investment Research Network
- ✓ Unlimited Research Summaries
- ✓ Personalised Alerts
- ✓ Custom Watchlists
- ✓ Company Data and News
- ✓ Events & Webinars
