Daily Brief Equity Bottom-Up: Max Healthcare (MAXHEALTH IN): Improving Operating Parameters; Well-Positioned for Long-Term Growth and more

• Max Healthcare Institute (MAXHEALT IN) reported improved occupancies, revenues, EBITDA and other operating and financial parameters in Q3FY23 versus year-ago period.   
• The company recorded highest-ever EBITDA – both in terms of absolute value and margins, EBITDA per bed, ARPOB, and ROCE for the third consecutive quarter in FY23.
• During the last three-year, Max had revenue and EBITDA CAGR of 12% and 59%, respectively. Consensus expects the company to report double-digit revenue and EPS growth through FY25.

• Fundamentally strong company with track record of high profitability and efficient operations. 
• Installed power generation capacity will more than double to ~5,500 MW by FY24 and another 4-5x by FY30. 
• Potential for DPS to improve from a trailing 1.70 INR to INR 2.50 by FY24, implying an attractive dividend yield of 7.5%. 

• MF reported 1QFY11/2023 results on Friday. Revenue increased 43.0% YoY to ¥6.8bn (vs consensus ¥6.5bn) while operating losses dropped to ¥1.59bn vs ¥1.65bn in 1QFY11/22 (vs consensus ¥2.0bn).
• The company’s S&M spending is the lowest during first quarter of the year, which drove losses down. However, the company has guided for higher S&M spending in 2Q.
• Our analysis on Money Forward (3994 JP) BO SAAS vs Non-BO SAAS shows that non-BO businesses’ GPM has continued to decline suggesting that these non-BO businesses only help inflate revenues.

• TSMC is cutting its 2023E capex plans by 12% according to Taiwan’s EDN. The company will also report earnings this Thursday.
• TSMC suppliers ASML and Lam Research will also be reporting this week. Realtek will report this week as well.
• Delta Thailand valuation still precarious relative to Delta Taiwan. Apple has continued to outperform the Quanta & Pegatron pair.

• Initiation of Coverage with a DCF valuation of $1.57/share. QIP is trading at a 60% discount to its nearest peer, IPH (ASX:IPH)
• Key areas of focus  are completing its business transformation programme and expanding geographically.
• Success will lead to EBITDA margin expansion, greater exposure to Asia, and a growing exposure to automated and IP technology.

• Micron Technology’s results in the quarter were disastrous as the company failed to meet the revenue expectations of Wall Street and reported wider-than-expected losses.
• Total fiscal revenue was down, whereas DRAM revenue represented 74% of the total revenue.
• Revenue from the Mobile Business Unit was up and Embedded Business Unit revenue was down.

• QANTM Intellectual Property Ltd (ASX:QIP) owns a group of intellectual property (IP) services businesses operating under the independent brands of Davies Collison Cave (DCC), FPA Patent Attorneys and Sortify.tm.
• It is a major player in the mature and regulated Australian patent, trade marks and IP legal services market with 16.5% market share (H1 FY23) in its key patents segment (68% of revenue) and a diversified mix of local and foreign clients (~45%/55% split; ~50% US$ revenue).
• QIP produces ~$97m service revenue (3.7% five-year CAGR) primarily via various workstreams underlying the patent and trade marks lifecycles, and has a history of profitability and cash flow generation which facilitates high dividend pay-outs. 

• Walgreens Boots Alliance produced a strong second quarter which happened to be an all-around beat.
• Also, this quarter served as a turning point in their transition to the healthcare industry.
• Besides that, Boots had a fantastic quarter in the international segment, achieving retail comp growth of 16% over the same period last year.

• Nike delivered another strong quarter with revenue growth across all geographies, channels, and brands.
• It had strong digital growth, fueled by increased traffic on its apps and mobile.
• In APLA, the brand momentum of Nike continues to fuel strong growth.

Notwithstanding the trials and tribulations that it has had to deal with in Ethiopia in recent years, KEFI believes that it is finally nearing the end of its approvals odyssey. Being first mover and also traversing the country’s turbulent swing to democracy has cost the company unpredictability, time and money. However, the new mining minister is reported to be serious – to the point of being enthusiastic – about developing KEFI’s Tulu Kapi project and the three substantive pre-conditions for final approval (the two banks having equal protections in the country, government installation of elevated security and the right for KEFI to administer its own banking and capital servicing arrangements) have been met or (in the case of the third) appear in the process of formalisation. With respect to security, KEFI reports that a disciplined formation of the Ethiopian Federal military has been deployed to secure mine sites throughout the country, including Tulu Kapi. In the meantime, the company has continued to upgrade and develop its assets in Saudi Arabia.