Daily Brief Equity Bottom-Up: Seiren (3569) | Synthetic Leather and more

• Activist investor, Oasis Management, recently disclosed that they had taken a significant 6.3% stake in the company
• I suspect that Oasis don’t need to be overly aggressive with this one. Given the fundamental outlook, we see the financial model delivering double digit earnings growth
• After a strong Q1 report, we expect an upward revision to guidance. The stock is cheap at <11x earnings. We see over 30% upside

• RPPL reported a strong Q1FY25 led by margin improvement. EBITDA margin rose to 14.7% vs 13.5% QoQ and 12.0% YoY. Stability in raw material pricing and operating efficiencies helped margins. 
• While growth in overall revenues was average at 8.3% YoY, growth in high-margin packaging products segment, which contributes 80% of total revenues, was strong at 16% YoY. 
• Exports at INR 9.2cr were below the INR 10cr+ run-rate, however, the growth momentum is intact. RPPL is in process of finalizing an export contract with a major global distributor.

• Spatial display market focuses on distribution optimization, demographic targeting, and visibility enhancement to boost sales and engagement.
• Panel makers shift to chip packaging as consumer electronics industry slows down, while Taiwan plans its own Starlink due to satellite launch delay.
• Texas offers incentives to attract Taiwan chip giants, Apple Intelligence foresees revenue growth, and MediaTek anticipates an upturn with Dimensity 9400.

• This Insight focuses on Industrials, particularly those that derive a significant portion of their revenue from Air Conditioners (ACs).
• Companies in focus are Voltas Ltd (VOLT IN), Johnson Controls-Hitachi Air Conditioning India (JCHAC IN),
• Blue Star Ltd (BLSTR IN) and Havells India (HAVL IN) 

• 2024 would be the low point in performance/valuation of Sinopharm. Due to the low base in 2024, revenue/net profit in 2025 is expected to rebound (e.g. high single-digit positive growth).
• Declining financial cost ratio is key driving force for profitability.Since the Fed would cut interest rate, a low interest rate environment helps Sinopharm reduce financial costs, thereby increasing profit margin.
• Since China hopes to establish a valuation system with Chinese characteristics, it would help drive up valuation of SOEs.Thus, there’s valuation repair opportunity for Sinopharm (e.g. P/E return to 8).

• 10 Questions for https://investors.sgx.com/_security-types/stocks/M14 What are some of the latest updates from InnoTek with reference to its financial performance? Net profit for 1H24 remained steady at S million, unchanged from the previous year, which includes a S million provision for inventory obsolescence.
• In the past two years, InnoTek has diversified its customer base into technologically advanced sectors such as GPU servers, gaming machines, medical equipment, and ATMs.

• Allegiant Gold is a leading gold explorer with five assets in Nevada.
• Its flagship, the Eastside District, hosts a 1.4Moz Au and 9Moz Ag deposit.
• AUAU has commenced a 5,000m drill program at Eastside, part of which will focus on resource expansion and the rest on exploration targets.

• Sai Gon Cargo Service (SCS VN) reported yet another strong month of data, with cargo volumes for August 2024 up 40% YoY. YTD volumes are up 43%. 
• At this run rate, the company will comfortably beat its volume guidance of 248,000 tons for  FY24 (>30% YoY). Q3FY24 will benefit from the full effect of the tariff hikes.
• With the recent correction, the stock trades at 11.9x FY24e and has an 8% dividend yield. The company’s next catalyst would be its Q3 FY24 result in November. 

• Shield is a commercial-stage pharma company delivering specialty products that address the unmet medical need of patients with iron deficiency (ID).
• Since its July 2021 US launch, Shield and Viatris have increased physician awareness of the differentiating characteristics of ACCRUFeR® as an oral ID drug, in order to generate sales traction.
• 1H’24 results have confirmed that sales continue to progress well, while costs have been closely controlled.

OSE Immunotherapeutics has announced the initiation of its Phase III registrational study (Artemia) for lead cancer vaccine Tedopi, with the trial launching in the US, Canada, Europe and the UK. Artemia is a confirmatory pivotal trial designed to assess the efficacy and safety of Tedopi as a monotherapy versus the standard of care (SoC) in HLA-A2 positive patients with metastatic non-small cell lung cancer (NSCLC) and secondary (acquired) resistance to immune checkpoint inhibitors (ICIs). The primary endpoint is overall survival (OS) and we expect top-line results in 2027. If the data are positive, this should support a regulatory registration in the second-line setting in Europe and North America.