Daily Brief Equity Bottom-Up: Plover Bay 1523 HK Earnings Preview: Strong H1 FY24 and more

• We expect strong 30-35% YoY earnings growth in Plover Bay Technologies (1523 HK) for its earnings to be released in July for H1 FY24. 
• We expect the company to continue its 80% dividend payout ratio, which will result in a 4% semi-annual yield (8% annualized). 
• Trading at 12.2x with >50% ROEs and net cash of >30 mn USD, we expect the strong results to catalyze a further multiple rerate.

• Today, according to public news, Kirin Holdings will launch a tender offer for Fancl Corp (4921 JP) at a likely 30% premium. 
• The beauty industry is historically ripe with M&A deals.  It is not hard to see why, as the global beauty sector trades at a hefty valuation multiple. 
• In this insight, we brainstorm for potential buyers of Shiseido Company (4911 JP) and analyze the viability of such. 

• Dickson Concepts Intl (113 HK) reported earnings growth of 39% YoY, led mostly by an increase in interest income on the 9.6 HKD/share of net cash/investments on the balance sheet. 
• The company’s net current asset value (NCAV) expanded to 8.2 HKD/share (Vs. FY23: 7.6 HKD/share), and with the stock at 5.2 HKD/share, it trades at a 37% discount to NCAV. 
• The dividend was increased to 45 cents ( from FY23:35 cents/share), placing the stock at an attractive dividend yield of 8.6%.

• Nokia and Foxconn are collaborating to manufacture 5G products in northern Vietnam, potentially boosting the country’s tech industry.
• Huawei’s entry into the automotive tier-1 market raises questions about its impact on traditional car manufacturers.
• The UK semiconductor industry and Taiwan Semiconductor Manufacturing Company (TSMC) are highlighted at London Tech Week, showcasing their importance in the tech world.

• Intel’s 2023 10K includes two new risk sections relating to its foundry plans and Smart Capital approach to funding them. 
• It labels its foundry plan as “Highly Risky” and rates its chances of success as “highly uncertain”
• They also helpfully warn that they have “limited experience” with the third party foundry business, just FYI

• Forensic Forsight will be a bi-monthly report covering Indian companies having corporate governance issues guiding investors on strengthening their ESG investment framework
• The issue covers SEBI warning against ICICI Bank for manipulation in delisting process of its key subsidiary.
• The report also covers how a EV company disguises shareholders while an Indian renewable energy company is under scrutiny owing to Independent Director Resignation

• Revenue increased by 9.2% YoY to JPY5.8bn, driven by economic recovery and increased inbound demand.
• Operating profit decreased by 52.5% YoY to JPY567mn due to higher advertising and promotional expenses.
• Financial business revenue rose 14.9% YoY to JPY2.5bn, with a 29.4% YoY decrease in operating profit to JPY371mn.

Oryzon Genomics has reported positive interim data from the Phase Ib FRIDA study, evaluating iadademstat in combination with gilteritinib in advanced acute myeloid leukaemia (AML) patients. Results from the first two cohorts (13 patients) showed a favourable safety profile and efficacy signals, with 69% of patients reporting bone marrow (BM) blast cell clearance in the first cycle. Moreover, 38% of patients achieved complete remission with full or partial hematologic or blood count recovery. While we caution against direct read across between clinical trials, this compares favourably to the 26.3% rate (excluding remissions after bone marrow transplantation during the trial) delivered by gilteritinib in the Phase III ADMIRAL study, potentially supporting the synergy of the combination. Oryzon noted that the first two cohorts achieved full target engagement and indicated the scope for dose reduction (to aid faster platelet recovery) under the FDA’s OPTIMUS guidance. A third cohort is being recruited following this guidance.

• Revenue for 1H FY10/24 was JPY85.9bn, up 35.5% YoY, with a business profit of JPY2.2bn, up 146.1% YoY.
• RENOSY Marketplace business revenue was JPY83.6bn, up 35.3% YoY, and ITANDI business revenue was JPY2.1bn, up 34.1% YoY.
• FY10/24 company forecast revised to JPY185.0bn in revenue and JPY3.7bn in business profit, with EPS unchanged at JPY45.90.

• UnitedHealth Group has reported its first quarter financial results for 2024, which reflect the resilience and adaptive capacity of the organization amidst significant challenges, most notably the Change Healthcare cyberattack.
• In addressing the cyberattack, UnitedHealth Group has showcased robust crisis management capabilities, responding swiftly to ensure continuity in care provision and financial support for affected healthcare providers.
• The financial impact of the cyberattack has been substantial, with approximately $870 million in total impact to the quarter and an anticipated full-year impact in the range of $1.15 to $1.35 per share.