In today’s briefing:
- Nikon (7731) – Beware The Bloomberg Headline But There’s Value Here
- Fanuc (6954) | Profitability Problems Persist
- Thai Banks 1Q24 Screener; We Stick with Krung Thai for Best Value, Kasikorn for Positive Catalysts
- Luk Fook 590.HK – Losing Its Shine?
- Advance Create (8798): Q1 FY09/24 Update
- Samsung Biologics (207940 KS): Mixed 1Q24 Result; Order Book Swells; New Drug Approval in Europe
- UMC (2303.TT; UMC.US): 2Q14F in Line; Singapore Fab Expansion Received Adds.
- TKC (9746): Q1 FY09/24 Update
- Mister Car Wash Inc.: Initiation Of Coverage – Increased Revenue Through Titanium 360 Rollout & Member Upgrades & Other Major Drivers
- Grocery Outlet Holding Corp.: Initiation Of Coverage – A Tale Of Increasing Operational Efficiency With Technology Implementation! – Major Drivers
Nikon (7731) – Beware The Bloomberg Headline But There’s Value Here
- Yesterday, post-close, Bloomberg reported a headline “*SILCHESTER REPORTS NIKON STAKE; MAY SEEK CAPITAL POLICY CHANGES“
- That was exciting. It was in all caps. It was activist-ish-y. Today the stock rose 10.3% and we got another article saying it was up because of Silchester’s filing.
- Beware the Bloomberg headline. Nuance is sometimes lost. They aren’t always designed to help investors invest. Often, the main purpose is clickbait.
Fanuc (6954) | Profitability Problems Persist
- Fanuc reported a -7% decline in revenue for FY3/24 and 26% decline in operating profit.
- The market will be disappointed by guidance for a further fall on the top line and 15% decline in profits as margins hit an all time low
- The valuation of 30x EV / EBIT suggests the market was hoping for a turnaround in profits this year. That recovery has now been pushed back
Thai Banks 1Q24 Screener; We Stick with Krung Thai for Best Value, Kasikorn for Positive Catalysts
- Krung Thai is our value pick among Thai banks, having solid post-provision profitability, close to double digit ROE with a healthy balance sheet, along with undemanding PBV and PE ratios
- We maintain Kasikorn on the buy list, as its cost of risk was well contained in 1Q24, a key positive catalyst for its improving post-provision returns
- Bank of Thailand is currently accepting applications for digital banking licenses until 19 September 2024; incumbent banks and domestic big corporates are likely to form the core of applicants
Luk Fook 590.HK – Losing Its Shine?
- March Same-Store sales in China disappoint mainly due to diamond jewellery demand
- Overall, gold demand in China continues to rise both in the retail and the official sector
- Visitor arrivals to Hong Kong pick up but are still ~40% below pre-Covid levels.
Advance Create (8798): Q1 FY09/24 Update
- Advance Create Co., Ltd. is an independent insurance agent that sells insurance products mainly to individuals on behalf of multiple insurance companies, also undertaking follow-up services on their behalf.
- In FY09/23, the company reported revenue of JPY10.2bn, operating loss of JPY2.0bn, recurring loss of JPY2.2bn, and net loss attributable to owners of the parent of JPY1.8bn
- On February 20, 2024, Advance Create Co., Ltd. announced that it expects to receive dividends from its consolidated subsidiary, Advance Create Reinsurance Incorporated.
Samsung Biologics (207940 KS): Mixed 1Q24 Result; Order Book Swells; New Drug Approval in Europe
- Samsung Biologics (207940 KS) reported mixed 1Q24 result, with revenue beating and operating profit missing estimates. Despite robust revenue growth, profitability is under pressure.
- With accumulated orders exceeding $12.5B (vs $12B at the end of 2023), the outlook remains strong. A gradual increase in Plant 4 operations is expected to drive sequential revenue growth.
- On April 23, Samsung Bioepis received marketing approval from European Commission (EC) for Pyzchiva, a biosimilar of Stelara, thereby becoming an early mover in a potential €2.5B market.
UMC (2303.TT; UMC.US): 2Q14F in Line; Singapore Fab Expansion Received Adds.
- UMC expects macro uncertainties and cost headwinds to linger into 2H24.
- The P3 project has received strong support from the Singapore government with a US$5 billion Capex.
- UMC has seen high interest from customers for its 14nm capacity.
TKC (9746): Q1 FY09/24 Update
- TKC Corporation provides accounting and tax services to accounting firms (and client companies they advise), local governments, and others using its own computational centers, while subsidiary TLP Corp.
- In full-year FY09/23, the company reported consolidated sales of JPY71.9bn, operating profit of JPY14.3bn, recurring profit of JPY14.8bn, and net income attributable to owners of the parent of JPY10.8bn.
- TKC does not release a medium-term business plan. However, it is pursuing the following four objectives in close cooperation with TKC National Federation.
Mister Car Wash Inc.: Initiation Of Coverage – Increased Revenue Through Titanium 360 Rollout & Member Upgrades & Other Major Drivers
- Mister Car Wash unveiled its financial performance for the fourth quarter and full fiscal year ending December 31, 2023.
- The annual results demonstrated solid progress driven by the company’s efforts to enhance its services, physical operations, and team.
- During Q4, sales rose 7% to $230 million, and adjusted EBITDA grew by 5% to $69.5 million.
Grocery Outlet Holding Corp.: Initiation Of Coverage – A Tale Of Increasing Operational Efficiency With Technology Implementation! – Major Drivers
- The Grocery Outlet management reported its full-year 2023 earnings results, which were slightly ahead of expectations.
- The company demonstrated strong customer acquisition and traffic, driven by competitive pricing and its treasure hunt shopping experience.
- The acquisition of United Grocery Outlet is one of the major highlights of the company’s performance, as it added 40 stores to the network.
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