Daily Brief Equity Bottom-Up: Smartkarma Corporate Webinar | Elite Commercial REIT: Essential Assets at an Attractive Yield and more

For our next Corporate Webinar we are glad to welcome Elite Commercial REIT’s CEO, Mr Joshua Liaw.

In the upcoming webinar, Joshua will share a short company presentation after which, he will engage in a fireside chat with Smartkarma Insight Provider, Sumeet Singh. 

Sumeet will also be providing an industry overview, featuring landscape commentary and returns analysis. The Corporate Webinar will include a live Q&A session.

In the spirit of giving back to our community, one of the attendees will also be awarded an Amazon Kindle as part of our exclusive lucky draw. 

The Corporate Webinar will be hosted on Monday, 15 April 2024, 19:00 SGT.

About Elite Commercial REIT

Elite Commercial REIT (“Elite REIT”) is a Singapore real estate investment trust established with the investment strategy of principally investing, directly or indirectly, in commercial real-estate related assets in the United Kingdom (“UK”). Elite REIT is the only UK REIT listed in Pound sterling on the Singapore Exchange.

Elite REIT’s portfolio (“Portfolio”) comprises predominantly freehold properties strategically located mainly in town centres, and near amenities and transportation nodes. The Portfolio offers a stable government-backed income stream with over 99% of the gross rental income derived from the UK Government, backed by AA-rated sovereign credit strength. The leases are on triple net basis and Elite REIT is one of the largest providers of critical social infrastructure to the Department for Work and Pensions (“DWP”) and other UK Government departments. The DWP is the UK’s largest public service department that is responsible for welfare, pensions and child maintenance policy, serving over 20 million claimants and customers. The Portfolio is part of the crucial social infrastructure through which the DWP provides services to local communities.

• TSMC snags $6.6 billion in US CHIPS Act funding, along with loans up to $5 billion and tax credits up to 25% on eligible capital expenditures
• TSMC has committed to building a third fab in Arizona, scheduled to begin operations around 2030
• TSMC’s reiteration of their world class CAGR, Gross Margin & ROE numbers shines a light on Intel’s vastly inferior performance outlook.

• Amvis Holdings Inc (7071 JP) opened 57 facilities during FY20–23, which raised total borrowings 37% YoY to ¥17B in FY23 and further to ¥19B at the end of Q1FY24.
• The impact of the monetary policy is expected to be immaterial based on the current interest incidence of just 0.44%. Interest expenses account for less than 1% of revenue.
• Amvis started FY24 on a solid note, with all key parameters reporting more than 30% YoY growth in Q1FY24. The company has reiterated full-year FY24 guidance.

• The first quarter is seasonally the softest for selling wireless routers. The expectations for NTGR are for the firm to generate positive free cash flow while revenue declines sequentially. 
• We are anticipating NTGR’s cash per share to reach approximately $12 for the March quarter and maintain a forecast of $14 per share by the end of 2024
• The price competition at the lower end remains unchanged and dependent on NTGR clearing out inventory ahead of the peak selling period in the second half of the year

• Shineway’s performance in 23H2 was disappointing, mainly due to the VBP of formula granules and anti-corruption campaign. Accordingly, TCM injection and TCM formula granule businesses had negative growth in 23Q4.
• As the NHSA has further lifted the reimbursement restrictions on Chinese medicine injections, Shineway’s injection business is expected to help “hedge against” the headwinds in TCM formula granule business.
• 24H1 growth is under pressure due to 23H1 high base. Growth in 24H2 would pick up.As long as TCM favorable policies remain, profit is expected to increase by 20%-30% annually.

• 1Q24 production was 21.9 mbbl/d in line with our expectations.
• Production at the end of March was ~23 mbbl/d.
• Net cash of US$193.6 mm (US$176.3 mm unrestricted) was high given that the company sold only 1.8 mmbbl in 1Q24 with inventory building-up ~0.21 mmbbl vs YE23 to 0.9 mmbbl.

• The farm-out transaction with Energean has now completed.
• Chariot has received the US$10 mm cash upfront payment and retains 30% of in the Lixus licence (where the Anchois project is located) and 37.5% of the Rissana licence, offshore Morocco.
• A rig contract has also been signed with Stena Drilling to drill the high impact Anchois-East appraisal and development well in 3Q24.

• TRX is focused on the development and commercialisation of two proprietary processing technologies for the repair of soft tissue (dCELL®) and bone (BioRinse®).
• It has a broad portfolio of products used in biosurgery, orthopaedics and dental markets.
• Investment in tissue processing, manufacturing capacity and strong commercial partners, together with its “4S” strategy, has generated six consecutive reporting periods of strong growth, with TRX turning EBITDA-positive in 2023.

• BQE will be reporting Q4 & 2023 financial results in ~2 weeks, we are expecting proportional revenue of $4.2M, gross margin of 45%, and adj. EBITDA of $0.6M (14% margin).
• Metals prices have been rising steadily over the last month with copper up 9%.
• BQE’s China JV has leverage to the copper price as it sells recovered metals.

Utilico Emerging Markets Trust’s (UEM’s) manager Charles Jillings, at specialist investor ICM, is very excited about the prospects for the trust’s investee companies. He believes that investors underappreciate the quality of these businesses and the teams that manage them. Jillings travels extensively, along with deputy portfolio managers Jacqueline Broers and Jonathan Groocock, meeting with current portfolio and other firms and relevant organisations in emerging markets. They report first hand that companies in the fund are performing very well, with robust top-line growth and cost reductions leading to higher margins. Because of the nature of UEM’s holdings in infrastructure and utility assets, the fund has a consistently low beta. Successful stock selection has led to the trust’s NAV outperformance versus the MSCI Emerging Markets Index over the last one, three, five and 10 years – most notably over the last three years. Since inception in 2005, UEM’s NAV total return compounded at 9.5% per year.