Daily Brief Equity Bottom-Up: Fushan Energy (639 HK): Coking Coal Prices To Strengthen With Anglo Accident and more

• Shougang Fushan Resources (639 HK) is a play on strengthening coking coal prices with downside protection due to its net cash reserves of 1.1 bn USD (Vs. Mkt Cap 2.1).
• At the lower end of the cost curve, its EBITDA margins have averaged 54% (last 16 years), with its lowest EBITDA number of 19% in FY15.
• With an 80% payout, the company trades at a trailing yield of 9% (the average spot price assumed is 1900 RMB/ton).

• Mineral Resources is a founder-led diversified infrastructure and mining business that has seen significant growth since its IPO.
• The business is divided into two segments, with the infrastructure business, “Infraco,” playing a crucial role in the company’s success.
• The company’s CEO believes they are just getting started and can grow to many multiples of their current size.

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• Shares of integrated private healthcare provider Raffles Medical Group (RFMD SP) are currently languishing around a three low. RMG does look attractive compared to regional healthcare plays. 
• FY23 numbers did no favours – top/bottom line y-o-y contraction of 14.1% and 37.1% respectively.  Yet its emerging China ops show promise. 
• Of interest is Loo Choon Yong, RMG’s founder and major shareholder, who continues adding to his stake, and now holds 54.944%, up from 53.033% at the beginning of the year.

• Apple Increasing Chip Orders with TSMC — Expecting iPhone 16 Sales to be Much Stronger Than iPhone 15 Thanks to AI
• Google Said to be Shifting to TSMC from Samsung for Next Generation AI Mobile Phone Chips
• This June 28th piece appears to be timely — Memory Monitor: Micron’s Shares May Be Falling But Results’ Industry Implications Are Positive

• Blackrock is a massive asset management firm with $10 trillion in assets under management
• Blackrock recently made a transformative acquisition of Global Infrastructure Partners (GIP)
• The deal has wide-ranging effects for the private capital industry and is a wake-up call for Wall Street firms to rethink their strategies and partnerships

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

• Taiwan plans to release offshore wind regulations by 3Q24, boosting the renewable energy sector’s growth and investment opportunities.
• Chinese investment in 8.6G OLED technology is boosting the South Korean display equipment industry, leading to potential economic growth.
• VinFast’s Indian factory may open earlier than expected, while mobile device suppliers show interest in using edge AI to enhance the market.

• On July 2, Eli Lilly & Co (LLY US) has received FDA approval for its Alzheimer’s disease drug Kisunla, which will compete head-on-head with Eisai Co Ltd (4523 JP)‘s Leqembi.  
• Efficacy and indications of both the drugs are similar. Price comparison is tricky. However, Kisunla can be stopped when amyloid plaques are removed, which is not the case for Leqembi.
• Eisai is not expected to face immediate competition and should comfortably meet Leqembi FY25 revenue target of ¥56.5B, including ¥43.5B from the U.S. Recently, Leqembi has been launched in China.

• Taiwan set to release offshore wind regulations by 3Q24, opening doors for growth and innovation in the industry.
• China’s significant investment in OLED technology boosts South Korean display equipment sector, creating opportunities for growth.
• Telecoms facing challenges with slow 5G adoption, pushing them to adapt and transform strategies to overcome obstacles.

• On 2 July, Paradise Co Ltd (034230 KS) announced that it will construct a new high end luxury hotel in Seoul spending about 500 billion won to 550 billion won. 
• We believe that this construction of the new luxury hotel will have a negative impact on shares of Paradise. 
• Rather than investing a large sum of money to build a new hotel, many investors would rather have preferred Paradise to increase share buybacks and dividends. 

• Allied Blenders & Distillers‘ recent IPO spotlighted India’s alcoholic beverage sector, which bucks global trends with strong volume and value growth.
• India is the third largest alcoholic beverage market globally, and the second largest for spirits. It is projected to grow at a CAGR of more than 10% over the near-term.
• Incumbent players in this highly regulated sector can benefit from strong market moats and evolving growth opportunities if they can effectively navigate the highly regulated business  environment.