In today’s briefing:
- Suruga Bank – Only 33% of Buyback Done, Profit Guidance to Rise a Lot, Credit Saison Support Growth
- All Nippon Airways: Difficult to Outperform Expectations – In Contrast to JAL
- Money Forward (3394) | Looking Forward – Q4 Preview
- Fushan Energy: Coking Coal Prices High and Dividend Yield >10% with ~50% of Mkt Cap in Cash
- Adi Sarana Armada (ASSA IJ) – Leading Player in People and Goods Mobility
- [KE Holdings(BEKE US, BUY, TP US$24.5) Update]: Singaporization of Real Estate Has LT Plus, ST Minus
- [Week 16] Namaste India 🙏 | More Smoke for Bandhan?
- Tongcheng Travel (780 HK): We Are Back
- Rain Industries (RAIN.NSE)
- 10 in 10 with OEL (Holdings) – Entering the MedTech Sector
Suruga Bank – Only 33% of Buyback Done, Profit Guidance to Rise a Lot, Credit Saison Support Growth
- Only about 1/3 of of the recently announced share buy back is done, the remainder will come from now through end of March 2024.
- Earnings are far higher than the bank’s forecast, and there should be a major revision in coming weeks.
- Credit Saison collaboration and exiting BOJ negative rate policy, should provide a multitude of positives, for revenue growth.
All Nippon Airways: Difficult to Outperform Expectations – In Contrast to JAL
- Our FY24 to March 2024 EBIT forecast for ANA of ¥ 196bn is considerably higher than company guidance of ¥ 140bn, supported by our analysis of historical earnings seasonality.
- However, we are only narrowly above consensus of ¥186bn, and narrowly below consensus of ¥204bn, ¥208bn in FY25, FY26.
- In contrast, we see considerably greater upside to expectations at JAL, where our FY24 EBIT is 27% above consensus.
Money Forward (3394) | Looking Forward – Q4 Preview
- Since releasing Q3 results, Money Forward’s stock price has fallen from 4,800 yen to the present 4,000 yen.
- Results on Friday could herald a stronger outlook for the share price. The market is fixated on quarterly earnings and ad spend – these should improve sequentially.
- Money Forward will release guidance for the coming fiscal year, which could see the company turn profitable at the EBITDA level.
Fushan Energy: Coking Coal Prices High and Dividend Yield >10% with ~50% of Mkt Cap in Cash
- Shougang Fushan Resources (639 HK) energy, a pure play on high coking coal prices, now trades at 5.7x FY24 PE (1.5x EV-EBITDA), assuming 2,200 RMB/ton prices (vs spot 2500).
- The company has ~7.5 bn HKD of net cash (on H12023), representing 50% of the market cap despite conducting a recent buyback of 5% and paying all its outstanding dividends/taxes.
- With an 80% payout, we can also expect a dividend yield of 14% for FY24 if prices average 2200 RMB/ton.
Adi Sarana Armada (ASSA IJ) – Leading Player in People and Goods Mobility
- Adi Sarana Armada (ASSA IJ) represents one of the most interesting plays on people and goods mobility and end-to-end logistics in Indonesia, being market leaders in auto leasing and auctions.
- Revenues slowed in 9M2023 due to a slowdown in Anteraja because of slower e-commerce but other areas saw strong growth, especially its auction and used car business.
- Adi Sarana Armada continues to build its renamed Cargoshare end-to-end logistics business with new customers and a move into cold chain logistics. Valuations are attractive relative to growth.
[KE Holdings(BEKE US, BUY, TP US$24.5) Update]: Singaporization of Real Estate Has LT Plus, ST Minus
- A new draft measure suggested Shenzhen is planning to accelerate its shantytown renovation and offer more Affordable Houses to meet demand of low-income groups, mimicking Singapore’s HDB flat policy.
- As China’s property market gradually heading to the Singapore model, we expect the existing home market to enlarge and new home market to shrink.
- We expect Beike existing home business and renovation business to benefit, while new home business hurts. We maintained the stock as BUY rating and TP at US$24.5/ADS.
[Week 16] Namaste India 🙏 | More Smoke for Bandhan?
- The upcoming earnings season, along with the forthcoming Budget and Elections, should all contribute to keeping the undertone bullish for the NIFTY Index (NIFTY INDEX).
- Bandhan Bank Ltd (BANDHAN IN) reported a minor dip in collections for the non-EEB portfolio, which has probably spooked the street.
- Other names discussed include MMFS, POONAWAL, AUBANK, LTFH, and AAVAS.
Tongcheng Travel (780 HK): We Are Back
- The upcoming Chinese New Year travel rush is expected to see air passenger volume reach 80m, a 9.8% increase vs. 2019. Tongcheng Travel Holdings (780 HK) is a key beneficiary.
- In addition to air ticket booking, Tongcheng can gain from demand for related services and products. The focus on lower-tier cities will make it better satisfy their demand.
- Its FY24F PER of 15.2x is lower than sector average of 16.4x, yet 3-year EPS CAGR of 30.7% is higher. Its underperformance against Trip.com (TCOM US) can be reversed.
Rain Industries (RAIN.NSE)
Rain Industries is an Indian small-cap company (~$660M) that manufactures 2 carbon-based inputs for Aluminium Industry (10% of global market share).
It also has a cement & value-added chemical business
The Company is ignored by market likely due to its ‘commodity’ nature, debt on their balance sheet and small market cap which drives most investors away.
10 in 10 with OEL (Holdings) – Entering the MedTech Sector
10 in 10 with OEL (Holdings) – Entering the MedTech Sector
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