In today’s briefing:
- Japan Tobacco High Conviction Call: No Price Hikes This Year, But Profits Poised to Soar
- Rio Tinto: Consolidating Its Mongolian Crown Jewel, Part 2
- Standard Chartered – Singapore Credit Growth Negative In July | Credit Costs Up 6x QoQ But Still Low
- SDR Earnings Snapshot: PTTEP beats estimates, correlation to oil price draws investors’ interest
- Peptidream (4587 JP): Solid Revenue Growth Continued in 1H23; 2023 Guidance Remains Unchanged
- HHH: NAV Reduction, PT to $110
Japan Tobacco High Conviction Call: No Price Hikes This Year, But Profits Poised to Soar
- Combustible tobacco is declining globally, but Japan Tobacco (2914 JP) is defying the odds by outperforming the industry significantly through capturing market share from competitors.
- Also in Heated Tobacco, Japan Tobacco is slowly but steadily capturing market share from IQOS and other heated tobacco makers.
- There will be no price hikes this year, but we think that there’s enough spillover from the price hikes in the past 3-4 years to maintain JT’s OP growth momentum.
Rio Tinto: Consolidating Its Mongolian Crown Jewel, Part 2
- Rio Tinto Ltd (RIO AU) invited the investing community to Mongolia in early July.
- During the briefing comments were made regarding its position in Entree Resources (ETG CN) which makes us believe a deal is imminent. These comments were later deleted from its transcript.
- We expect newsflow around Rio/Entree’s future relationship before arbitration starts in April 2024.
Standard Chartered – Singapore Credit Growth Negative In July | Credit Costs Up 6x QoQ But Still Low
- Singapore credit growth turned negative at -3% YoY in July where STAN has major exposure, while many regions, are not high growth, where credit metrics are worsening, like HK, China
- 88% of loans in well-developed countries, so that the old moniker of STAN being ‘an Emerging Market Bank’ may no longer apply, with NPLs as an overlying risk
- Credit costs rose 6x from 1Q23 to 2Q23, but the 19bps level in 2Q23 remains low relative to its longer-term 62bps average – which excludes the Asian Financial Crisis
SDR Earnings Snapshot: PTTEP beats estimates, correlation to oil price draws investors’ interest
- Since the launch of Thai Singapore Depository Receipts in May, the three inaugural Thai SDRs – Airports of Thailand (AOT) , CP All and PTT Exploration & Production (PTTEP) – collectively traded over S$11 million on the Singapore Exchange.
- The top traded SDR was PTTEP on the back of volatility in oil prices with max and daily trading ranges of (20 ticks) and 1% (7 ticks), respectively.
- Airports of Thailand PLC is the largest publicly traded company in Thailand and the world’s largest airport operator by market capitalization.
Peptidream (4587 JP): Solid Revenue Growth Continued in 1H23; 2023 Guidance Remains Unchanged
- Peptidream Inc (4587 JP) has reported strong result for H1 2023. Revenue jumped 88% YoY, and both the operating and net losses have narrowed compared with the year-ago period.
- 2023 guidance remains unchanged, with revenue of ¥30B (+12% YoY), core operating profit of ¥6.7B (-31% YoY), and net profit of ¥2.7B (-64% YoY).
- In the mid-term (over the next 3–4 years), Peptidream aims for revenue of ~¥50B. The company has set a goal to reach revenue of ~¥100B by 2030.
HHH: NAV Reduction, PT to $110
- HHH held its annual investor day updating investors on the continued increase in population at its MPC, but that was not enough to offset the decline in NAV
- HHH’s management reiterated the trends that have fueled the business have continued with price per square foot and acre having increased over the past year.
- HHH is now estimating its NAV at $129 compared to $170 last year. We are lowering our price target to $110 from $150 to reflect the erosion in the NAV
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