In today’s briefing:
- LG Corp: Updated NAV Analysis & Outperformance Likely Driven by Value Investors
- Champion REIT 2778 HK: Facing Multiple Headwinds, an Uphill Battle. Bearish
- Bank Mandiri (BMRI IJ) – Higher Returns While Livin’ It Up
- BBNI – Stock Split to Double Shares on 10 October | NPLs Are in Sharp Decline, Especially Loss Loans
- Monthly Container Shipping Tracker | Rates Stable | Fuel (Barely) Lower Y/Y | (September 2023)
- Caterpillar Inc.: North America’s Construction Boom: How Caterpillar Is Capitalizing on It! – Major Drivers
- F5 Networks Inc: The Future Of Networking & AI Integration! – Major Drivers
- Advanced Micro Devices (AMD): Setting the Pace in AI with New Acquisitions? – Major Drivers
- ANSYS Inc.: The Role of SMBs in Driving Growth! – Major Drivers
- Constellation Brands Inc.: Making Waves in the Beverage World! – Major Drivers
LG Corp: Updated NAV Analysis & Outperformance Likely Driven by Value Investors
- Our NAV analysis of LG Corp suggests an implied market cap of 16.9 trillion won or 107,217 won per share which is 28.4% higher than current share price.
- We believe that LG Corp could announce another share buybacks representing 2-3% of outstanding shares in the next 6-12 months.
- Another reason that could result in LG Corp’s shares outperforming other major LG related shares is due to the value investors increasing capital allocation to higher dividend paying LG Corp.
Champion REIT 2778 HK: Facing Multiple Headwinds, an Uphill Battle. Bearish
- Champion REIT is facing multiple headwinds, including weakness in its office building due to upcoming office supply
- Its retail asset Langham is doing better post COVID, but not enough to offset the weakness in office
- DPU may continue to decline over time. Therefore we stay bearish until we see turn-around signal
Bank Mandiri (BMRI IJ) – Higher Returns While Livin’ It Up
- Bank Mandiri (BMRI IJ) continues to positively surprise on loans, NIMs, and credit costs, with a consequential improvement in returns, only non-interest income seeing a slowdown but likely temporary.
- Digital banking initiatives through Livin’ and KOPRA continue to grow and help the bank drive higher CASA and fee income whilst reducing costs, with smart branches also improving returns.
- Bank Mandiri remains a core holding as a proxy to the Indonesian economy with its digital initiatives driving higher returns. Valuations remain attractive on 2.2x FY2023 PBV with 20% ROE.
BBNI – Stock Split to Double Shares on 10 October | NPLs Are in Sharp Decline, Especially Loss Loans
- The bank expects its 2 new for 1 old stock split to be done on 10 October
- Total shares should move from 18.6tr to 37.3tr after the stock split
- Compared with peers, BBNI has low market cap/assets, good ROA
Monthly Container Shipping Tracker | Rates Stable | Fuel (Barely) Lower Y/Y | (September 2023)
- Our index suggests pricing momentum remains depressed, but stable in Q3; fuel prices have begun to rise from Q2 lows, but probably don’t offer much lift to earnings now
- We looked at intra-Asian carrier TS Lines (which applied to list its shares in Hong Kong in April) and provided a quick update on market conditions in the Intra-Asian trade
- Shares of a few container shipping companies — including Evergreen Marine of Taiwan — have performed well YTD in 2023; we remain positive on the sector’s medium-term outlook
Caterpillar Inc.: North America’s Construction Boom: How Caterpillar Is Capitalizing on It! – Major Drivers
- Caterpillar managed to exceed analyst expectations in terms of revenue as well as earnings, with sales and revenues soaring by 22%, primarily driven by increased sales volume and price realization.
- This remarkable growth extended across all three primary segments: Construction Industries, Resource Industries, and Energy & Transportation, with sales to users registering a substantial 16% increase year-over-year.
- Energy & Transportation also witnessed a remarkable increase in sales to users across all applications, including oil and gas, power generation, industrial, and transportation.
F5 Networks Inc: The Future Of Networking & AI Integration! – Major Drivers
- F5 Networks Inc. delivered an all-around beat in the most recent quarterly result.
- F5 also continues to observe increased maintenance attach rates on older deployments due to customers worrying about their existing assets.
- Their product revenue increased by 1%, their systems revenue increased by 5%, and their software revenue decreased by 3%.
Advanced Micro Devices (AMD): Setting the Pace in AI with New Acquisitions? – Major Drivers
- Advanced Micro Devices Inc. (AMD) delivered mixed results for the previous quarter, with revenues above analyst expectations but below-par earnings, showcasing strategic execution and notable achievements.
- Despite a year-over-year decline in revenue, the company reported steady performance compared to the previous quarter.
- The data center segment experienced sequential growth, primarily attributed to cloud providers’ accelerated adoption of the fourth-gen EPYC CPUs.
ANSYS Inc.: The Role of SMBs in Driving Growth! – Major Drivers
- ANSYS Inc. delivered a solid result and managed an all-around beat in the last quarter, surpassing its financial guidance across all key metrics.
- During Q2, the company reported reliable performance, beating its ACV, revenue, operating margin, and EPS guidance.
- Total revenue for the quarter exceeded expectations, reflecting the positive impact of ACV outperformance and the mix of license types sold.
Constellation Brands Inc.: Making Waves in the Beverage World! – Major Drivers
- Constellation Brands, Inc. managed to exceed analyst expectations in terms of revenue as well as earnings.
- The company’s beer business generated significant growth for the quarter while steadily moving forward with all 4 of its strategic projects.
- Their larger premium and luxury brands in the higher-end wine area of their portfolio experienced weaker segment demand in April.
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