In today’s briefing:
- India Channel Insight #47 | Go Fashion, Lux Industries
- London Stock Exchange Group: Record Holdings
- Sawai Group Holdings (4887 JP): Continued Price Erosion Is Weakening Earnings Prowess
- Adi Sarana Armada (ASSA IJ) – Harnessing Logistics and Autos
- Danaher Corporation: Initiation of Coverage – Business Strategy & Key Drivers
- Illinois Tool Works Inc.: Initiation of Coverage – Diversified Business Lines & Other Drivers
- Jinxin Fertility Co Ltd (1951.HK) – Hard to Achieve Performance Reversal in 2023
- An Update to Our Pair Trade Between Emart & Coupang
India Channel Insight #47 | Go Fashion, Lux Industries
- Our flash checks for Go Fashion India (GOCOLORS IN) and LUX Industries Ltd (LUX IN) suggest weak consumer sentiment continues to prevail.
- Competitive intensity is an area of concern for category creator and leader Go Fashion India (GOCOLORS IN)
- Rupa & Company (RUPA IN) is giving a tough fight to LUX Industries Ltd (LUX IN) in the rural markets.
London Stock Exchange Group: Record Holdings
- Percentage of UK funds invested in the LSE Group has risen from under 10% in 2012 to a record 41.8% today
- Rise in ownership has been driven by high growth investors, with both Aggressive Growth and Growth strategies at their highest levels of ownership on record
- The LSE Group has risen to the 22nd most widely held stock in the UK and the 12th largest on an average weight basis.
Sawai Group Holdings (4887 JP): Continued Price Erosion Is Weakening Earnings Prowess
- Sawai Group Holdings (4887 JP) is negatively impacted by drug reimbursement pricing in Japan. H1FY23 revenue, operating profit, net profit decreased 1%, 36% y/y, and 29%, y/y, respectively.
- Generic pharmaceutical companies are more affected by the drug price revisions than their branded counterparts. In addition, APIs are impacted by increases in the cost of oil and exchange rates.
- The sustainability of the U.S. business rebound is still uncertain. We want to watch Sawai from sidelines and wait for full-year FY23 results, FY24 guidance, and NHI pricing decision.
Adi Sarana Armada (ASSA IJ) – Harnessing Logistics and Autos
- Adi Sarana Armada (ASSA IJ) continues to represent a unique proxy to play both transport and logistics in Indonesia through its auto business plus logistics including last-mile player Anteraja.
- ASSA Rent is the largest car leasing leader in Indonesia, with Autopedia leading auto auctions and a leader in used car sales through Caroline, which is expanding its presence fast.
- Anteraja has seen rapid growth and may see some slowdown from e-commerce but continues to gain share and ASSA logistics continue to diversify. Valuations are attractive on 10x FY2023E PER.
Danaher Corporation: Initiation of Coverage – Business Strategy & Key Drivers
- This is our first report on Danaher Corporation, a well-known manufacturer and provider of instruments and various other offerings to the medical, diagnostics, and environmental sectors.
- The company had a strong quarter and managed to surpass Wall Street expectations in terms of revenues as well as earnings.
- It delivered market share gains and strong price execution amid strong foreign exchange headwinds and an inflationary environment.
Illinois Tool Works Inc.: Initiation of Coverage – Diversified Business Lines & Other Drivers
- This is our first report on industrials giant, Illinois Tool Works.
- The company achieved a 13% revenue increase on the top line, with 16% organic growth from its core businesses which is a good sign.
- While the recent results were good, Illinois Tool Works is far from being immune to the potential macro problems and uncertainties ahead.
Jinxin Fertility Co Ltd (1951.HK) – Hard to Achieve Performance Reversal in 2023
- We have seen some positive policies released in China to support assisted reproduction. However, domestic policy support is more of a short-term catalyst and would not fundamentally change Jinxin’s prospects.
- The number of assisted reproductive centers in China is close to supply-demand equilibrium. It’s hard to support Jinxin’s valuation expansion by relying on China market. The breakthrough point is internationalization.
- Jinxin’s 2023 performance wouldn’t rebound largely. Investors could do short-term trade based on positive news/policy related to ARS in China.There’s no signal to support the complete reversal of share price.
An Update to Our Pair Trade Between Emart & Coupang
- In this insight, we discuss an update of pair trade between Emart (long) and Coupang (short).
- Back on 1 August 2022, we recommended a pair trade between E Mart Inc (139480 KS) (long) and Coupang (CPNG US) (short).
- This pair trade has worked well in the past five months and we continue to like this pair trade (long Emart and short Coupang).
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