In today’s briefing:
- Rohm (6963): Costs Up, FX Gains Up More, Small Buyback, Cheap (And N225 Inclusion In the Distance)
- Tencent and China Unicom Tie Up in New Joint Venture
- ADARO Solid 3Q 2022 : But Prefer ITMG
- Panasonic (6752) | Following the Yellow Brick Road to Battery Profits
- M3: Covid Related Trials and Yen Depreciation Support Earnings Beat
- CanSino Biologics (6185.HK/688185.CH) – Time to Offload; the Rally May Not Last Long
- KT&G Announces a Share Buyback Worth 350 Billion Won
- A Pair Trade Between Nongshim Co & Nongshim Holdings (Youlchon Chem Is Breaking Out)
- Meta Platforms: Is The Hyper Growth Story Over? (11/22)
- Bristol-Myers Squibb: The Turning Point Acquisition & Oncology Expansion
Rohm (6963): Costs Up, FX Gains Up More, Small Buyback, Cheap (And N225 Inclusion In the Distance)
- ROHM Co Ltd (6963 JP) announced salutary H1 results on Nov 1. The numbers were good, the innards suggested cost pressures. The revised forecasts suggested conservativeness, or risk of weakness.
- The company also announced a stock buyback. It’s only about 2% of shares out, which is 5-10% of Real World Float, but the stock has a low-beta risk character.
- And it is quite cheap on a capital construct basis. EV/EBITDA to Mar23 on conservative guidance is 4.6x. Adj EV/EBITDA Mar23e deducing securities and net receivables? 3.7x.
Tencent and China Unicom Tie Up in New Joint Venture
- Chinese social media giant Tencent Holdings Ltd. and state telecom operator China Unicom were cleared by the country’s antitrust regulator to set up a joint venture to develop data and cloud-related businesses.
- The new business, one of 15 investment deals that cleared antitrust review Tuesday, will focus on content delivery networks and edge computing.
- The partnership is another tie-up between Tencent and China Unicom after a 2017 investment in which the social media giant acquired a 5.18% stake in the telecom company.
ADARO Solid 3Q 2022 : But Prefer ITMG
- Adaro Energy (ADRO IJ) showed a sequential decline in earnings owing to a 6.8% QoQ decrease in pricing as discounts for their coal continued to build Vs. Newcastle.
- While the stock trades at a 2.8x FY22 PE and 1.3x EV-EBTIDA FY22E with a 21% dividend yield, the market is pricing in a substantial decline in coal prices.
- Adaro offers a significant margin of safety with 25% of the market cap in cash and decent capital allocation, but we prefer ITMG for its superior grades.
Panasonic (6752) | Following the Yellow Brick Road to Battery Profits
- The US Inflation Reduction Act will have a massively positive impact on Panasonic’s battery earnings for a decade
- Panasonic has just broken ground on a new battery plant in Kansas – the yellow brick road to further profitability
- We see a further 25% upside to the share price from the IRA impact on current battery capacity and even more on Kansas
M3: Covid Related Trials and Yen Depreciation Support Earnings Beat
- M3 Inc (2413 JP) reported 2QFY03/2023 results yesterday. Revenue grew 10.6% YoY to JPY56.7bn (vs consensus JPY54.7bn) while OP increased 31.5% YoY to JPY17.9bn (vs consensus JPY17.0bn).
- The company’s earnings were mainly driven by Covid-19 related trials and a weaker Yen which mainly helped the overseas business post strong results.
- M3’s growth prospects remain stagnant and the company’s valuation multiple is still expensive as earnings expectation has started to decline.
CanSino Biologics (6185.HK/688185.CH) – Time to Offload; the Rally May Not Last Long
- The fake news about China reopen and the COVID-19 vaccine business are the major driving force for the rally of CanSino’s share price. However, such rally would not last long.
- CanSino didn’t perform well in Q3 and 2022 would be a difficult year for CanSino. The major turning point of CanSino performance still lies in MCV4, not COVID-19 vaccines.
- CanSino’s H-share valuation has become more reasonable,but the downside risk in HKEX is hard to predict. Investors could consider offload and secure the gains. There’s better opportunity to long ahead.
KT&G Announces a Share Buyback Worth 350 Billion Won
- On 3 November, KT&G announced that it will buy back 350 billion won worth of common shares (3.7 million shares).
- KT&G has mentioned that it could increase its DPS by at least 200 won in 2022. Assuming DPS of 5,000 won in 2022 would suggest a dividend yield of 5.3%.
- KT&G had another solid results in 3Q 2022 slightly beating the consensus sales and operating profit estimates.
A Pair Trade Between Nongshim Co & Nongshim Holdings (Youlchon Chem Is Breaking Out)
- In this insight, we discuss a pair trade of Nongshim Holdings (072710 KS) (go long) and Nongshim Co Ltd (004370 KS) (go short).
- We believe the price gap between these two stocks have widened too much in the past six months and this gap is likely to decrease again.
- Nongshim Holdings’ stake in Youlchon Chem has been rising rapidly in the past six months which should also act as a positive catalyst on Nongshim Holdings.
Meta Platforms: Is The Hyper Growth Story Over? (11/22)
- Meta Platforms delivered a highly disappointing set of results with a huge earnings miss.
- The company’s ballooning costs to fund its virtual reality vision have resulted in a drop in profitability.
- We provide the stock of Meta Platforms with a ‘Hold’ rating and a revision in the target price.
Bristol-Myers Squibb: The Turning Point Acquisition & Oncology Expansion
- Bristol-Myers delivered another all-around beat as the management continued to make an effort to expand its new product range and inline franchise.
- In this quarter, the inline and new product portfolio grew by 13%, and the company managed to deliver non-GAAP EPS growth of 3%.
- Revenues in the third quarter were approximately $11.2 billion and the inline and new product portfolio grew strongly up to 13%.
💡 Before it’s here, it’s on Smartkarma
Sign Up for Free
The Smartkarma Preview Pass is your entry to the Independent Investment Research Network
- ✓ Unlimited Research Summaries
- ✓ Personalised Alerts
- ✓ Custom Watchlists
- ✓ Company Data and News
- ✓ Events & Webinars
