In today’s briefing:
- Taiwan Dual-Listings Monitor: TSMC Spread Close to Long Level; UMC & ASE Deep Discounts
- CICC (3908 HK): Underestimated by the Market
- Global Digital Niaga (BELI IJ) – Firmer Underfoot for the Dark Horse
- Edelweiss: Growing Well and Unlocking Value
- Nuvama: Yet Another Strong Quarter
- Nesco: Strong Q3FY25
- Delta Taiwan Vs. Thailand Monitor: Delta Thailand Crash Closes Gap, But Still Relatively Expensive
- HCG: Strong Q3FY25 and Promoter Change Update
- RPPL: Weak Q3FY25, However Medium-Term Outlook Is Strong
- Sariguna Primatirta (CLEO IJ) – Pure Water on the Move
Taiwan Dual-Listings Monitor: TSMC Spread Close to Long Level; UMC & ASE Deep Discounts
- TSMC: +14.9% Premium; Spread Has Fallen Close to Long Levels
- UMC: -2.6% Discount; Good Level to Go Long the Spread
- ASE: -3.2% Discount; Spread at Extreme Low, Good Level to Go Long
CICC (3908 HK): Underestimated by the Market
- China International Capital Corporation (3908 HK)‘s 2H24 net profit surged 33.6% in 2H24, reversing the downtrend in 1H24. It has benefited from lower staff and other operating costs.
- Better 1Q25 market turnover and activities, more IPOs and placements and improved cost dynamics imply that the consensus forecasts are too conservative.
- Its 0.55x P/B cannot adequately reflect better profitability. Despite the denial, CICC’s potential merger with China Galaxy Securities (H) (6881 HK) cannot be completely ruled out.
Global Digital Niaga (BELI IJ) – Firmer Underfoot for the Dark Horse
- Global Digital Niaga (BELI IJ) booked a strong finish to 2024, driven by its 3P retail and institutional business, although 1P retail and physical stores also performed well.
- The company continues to see improving take rates in FY2024, whilst its average order value increased through a more favourable product mix, with gross margins and cash flows improving significantly.
- Global Digital Niaga continued to expand its physical stores for monobrand and multibrand stores, adding Huawei as a brand. Valuations look reasonable given growth prospects and progress towards profitability.
Edelweiss: Growing Well and Unlocking Value
- Edelweiss reported a decent Q3FY25 with ex-Insurance PAT of INR 185cr, a growth of 16% YoY excluding NBFC PAT. Growth was led by Asset Management and Insurance businesses.
- Within the Credit business, the Home Finance business which operates under the brand Nido is scaling up well. It disbursed INR 400cr+ worth of retail loans during Q3FY25.
- Edelweiss is focusing on unlocking value and has already filed DRHP for its Alternative Asset Management business. Once approved, it will proceed for an IPO with OFS of INR 1500cr.
Nuvama: Yet Another Strong Quarter
- Nuvama continues to post strong earnings. Its Q3FY25 revenues grew 30% YoY to INR 723cr. Q3FY25 PAT grew 43% YoY to INR 252cr.
- Q3FY25 performance was surprisingly led by the Asset Services segment where revenue grew 77% YoY with addition of new clients and positive asset flow, leading to market share gain.
- Together the Wealth and Asset Management segments performed steady with revenue growth of 18% YoY. Net flows in 9MFY25 in ARR and MPIS assets exceeded that for whole of FY24.
Nesco: Strong Q3FY25
- Nesco reported a strong Q3FY25 with 16% YoY revenue growth and 17% YoY PAT growth. The exhibitions (BEC) segment grew 13% YoY and the IT Parks segment grew 16% YoY.
- Nesco Foods segment reported 29% YoY growth in revenues led by improved BEC footfalls and scaling up of the Food Court and Restaurants business.
- Recently, Nesco also received IOD from the municipal corporation of Mumbai, thus paving way for receiving future approvals for Tower 2. Tower 2 construction is expected to commence in Q3FY26.
Delta Taiwan Vs. Thailand Monitor: Delta Thailand Crash Closes Gap, But Still Relatively Expensive
- Delta Thailand Has Dramatically Underperformed Delta Taiwan — Delta Thailand Now Finally Trading at a Less Extreme Level vs. Delta Taiwan
- Latest Relative Growth Profiles — Delta Taiwan Has Higher Growth Profile in 2025E
- Even After the Major Pricing Reversion Since Mid-February, Delta Thailand Remains Overvalued Relative to Delta Taiwan
HCG: Strong Q3FY25 and Promoter Change Update
- HealthCare Global Enterprises (“HCG”) reported a strong Q3FY25 despite Q3 being a seasonally weak quarter. Revenue growth was strong across both the established centers and the emerging centers.
- Revenue from established centers grew 20% YoY while that from emerging centers grew 25% YoY in Q3FY25. Within emerging centers, Kolkata led the growth with 40% YoY rise in revenues.
- HCG saw promoter change in Feb 2025. KKR announced acquisition of 54% stake from CVC who owns around 60%+. Dr. BS Ajaikumar, the founder promoter, will continue to own 10%+.
RPPL: Weak Q3FY25, However Medium-Term Outlook Is Strong
- Earlier this month, RPPL announced a new factory to expand its thermoforming and extrusion capacity by 1250 MTPA and 1600 MTPA, respectively. This will come on-stream within a month.
- RPPL reported a weak Q3FY25 due to adverse fluctuation in raw material prices as well as seasonal impact. Q3 tends to be a weak quarter seasonally.
- RPPL’s capacity expansion has been leading to upfront expenses. The new Olive Ecopak JV also reported losses, share of which was INR -2.6cr in Q3FY25.
Sariguna Primatirta (CLEO IJ) – Pure Water on the Move
- Sariguna Primatirta (CLEO IJ) booked yet another quarter of impressive sequential growth in 4Q2024, hitting another record quarterly revenue, with margins improving at the same time, boosting profits.
- The company opened three factories in 2024 and plans three more in FY2025, with the total to 35 across Indonesia and further extending its scale and reach, and driving growth.
- The main driver for growth will come through general trade, which makes up 70% of distribution, with a factory opening push outside Java. Valuations are attractive versus growth.
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