In today’s briefing:
- HDFC Bank: An Update
- Dickson Concept (113 HK) Update: Trading at 40% Discount to NCAV, 8% Dividend Yield
- State Gas – Final Construction Stage with Commissioning Imminent
- The Big Blend
- Lonking (3339 HK): A Yield Play?
- Memory Monitor: Microsoft Copilot Will Supercharge Demand for DRAM; SK Hynix, Nanya Tech, Micron
- Sam Goi adds to PSC, JB Foods and GSH stakes
- REIT Watch – 26 S-Reits confirm schedule for upcoming earnings season
- Gushengtang (2273.HK) – Some New Business Updates and Positive Performance Forecasts
HDFC Bank: An Update
- HDFC Bank reported earnings last week. The next day the stock fell 8% followed by another 4% the day after.
- HDFC Bank is one of India’s bluest blue chip stocks with a reputation for being a high quality compounder.
- What happened and where do we go from here? First, some lessons from another life.
Dickson Concept (113 HK) Update: Trading at 40% Discount to NCAV, 8% Dividend Yield
- Dickson Concepts Intl (113 HK) reported the best result in its last six semi-annuals in H1 FY24, with profits rising 42% YoY.
- Net cash on the balance sheet was 9.6 HKD/share (vs. share price of 4.54 HKD/share). Gross cash was over 12 HKD/share.
- The company increased its interim dividend by 25% to 10 cents for the first time after four years (the expected full-year dividend is 37-40 cents).
State Gas – Final Construction Stage with Commissioning Imminent
- State Gas Limited (ASX:GAS) is a junior energy producer and explorer with assets concentrated in the Bowen Basin, Queensland.
- The Rolleston West CNG Project in the Bowen Basin is now in the final stage with mechanical completion and tie-in of the Rougemont-2/3 well anticipated within the next week to be followed by pre-commissioning activities.
- Importantly, first production and shipments are tantalisingly close and whilst the rate will initially be modest, up to 0.75TJd, the project has intrinsic growth potential (up to 1.7TJd) which could fund modest appraisal and evaluation works, particularly converting contingent gas to bankable reserves.
The Big Blend
- The previous week was packed with deals, IPOs, and other SPAC-related events.
- Four new deals were announced, including SPACs taking a conglomerate, an eVTOL company, and Korean and Chinese Biotech firms public.
- Also, a new SPAC priced its IPO, and SPAC rules could come under the microscope in the week ahead when the SEC meets.
Lonking (3339 HK): A Yield Play?
- While the 2H23 result of Lonking Holdings (3339 HK) may disappoint due to a plunge in sales volume, it is a yield play given the high historical payout ratio.
- Assuming a DPS of HK$0.10 for FY23-25 as in FY22, yielding 8.3%, the total dividend will amount to Rmb1.2bn. This only equals 22% of its net cash (including short-term investments).
- Its controlling shareholders bought 7.3m shares since 27 Dec, raising the stake by 0.13pp to 56.2%, demonstrating their positive view on the share’s value and long-term outlook.
Memory Monitor: Microsoft Copilot Will Supercharge Demand for DRAM; SK Hynix, Nanya Tech, Micron
- MSFT’s new AI features for Windows will need computers with at least 16GB of DRAM to run effectively. MSFT is asking manufacturers for this as a minimum for AI models.
- MSFT announced Copilot Pro for individuals and small businesses last week. The desire to use generative AI and the minimum required DRAM will drive accelerated PC upgrades.
- We note relative strength in 16GB DRAM prices; In Memory space, we continue to see relative value in SK Hynix, however, Nanya has the opportunity to Outperform in Taiwan.
Sam Goi adds to PSC, JB Foods and GSH stakes
- Sam Goi adds to PSC, JB Foods and GSH stakes CapitaLand Investment again led the buyback consideration tally, buying back 13,197,700 shares at an average price of S$2.98 per share over the five sessions.
- The principal activities of GSH corporation are its property development business, hospitality business, in addition to its frozen food trading business.
REIT Watch – 26 S-Reits confirm schedule for upcoming earnings season
- Schedule of S-Reits earnings or business update Lendlease Global Commercial REIT 1-Feb Frasers Centrepoint Trust (FCT) will kick off the current financial reporting season for S-Reits with the release of its first quarter (ended Dec 31, 2023) business update after the close of trading on Jan 22, 2024.
Gushengtang (2273.HK) – Some New Business Updates and Positive Performance Forecasts
- 23Q3 revenue would increase by 15% QoQ/over 40% YoY. 23Q4 revenue would increase 8-10% QoQ/over 45% YoY. 2023 full-year revenue growth would be 42-43%.Profit growth is more optimistic than revenue.
- In the first week of January 2024, YoY high growth momentum continued from December 2023, without any impact of consumption downgrades so far.In 2024, Gushengtang would accelerate pace of M&A.
- Gushengtang’s business model has been successfully validated. Different from Aier, Gushengtang is still in a period of rapid expansion. The Company remains our top pick in China’s medical service sector.
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