In today’s briefing:
- Unloved Japan Roundup-Rohm, Taiyo Yuden, Kose
- 2025 High Conviction: DFI Retail – Churning Free Cash by Turning the Right Levers
- Vesync (2148 HK): A Potential Privatisation?
- Ricegrowers (SunRice ASX:SGLLV) Interview Transcript 23 December 2024
- Ricegrowers Ltd – Branded focus paying off
- Empire Energy Group Ltd – The science says potential water impacts likely minor
- Monthly Chinese Express Tracker | November Volume, ASPs | Review of YTD Performance (December 2024)
Unloved Japan Roundup-Rohm, Taiyo Yuden, Kose
- Solar power will be cheaper than fossil fuels and EVs will be cheaper than ICE vehicles, but you can’t make either without the parts that Rohme excels in.
- Tesla is up 201% on speculation about its FSD, but Taiyo Yuden, which makes critical parts in FSD systems is down systems, is down 43%.
- Kose is down 49%, largely on China woes, but China is no longer big enough to be a problem, and Japan and other regions growth should start to take over.
2025 High Conviction: DFI Retail – Churning Free Cash by Turning the Right Levers
- DFI Retail Group Holdings (DFI SP), a leading retail player in Asia, is navigating sector headwinds through strategic pivots and cost cuts to drive superior margins and returns.
- After hitting a 10-year low in early August, DFI Retail’s stock rebounded, driven by strong 1H2024 earnings that reflected the impact of management’s initiatives.
- With an attractive dividend yield, strong cash flow, and a positive earnings growth outlook, DFI Retail offers a low-risk, high-return opportunity for investors in 2025.
Vesync (2148 HK): A Potential Privatisation?
- Vesync (2148 HK)‘s suspension may suggest privatisation by the Yang family (68.8% stake). With US$192m public float and US$216m net cash, out-of-pocket cash needed is limited.
- 1H24 is decent with a 37.5% earnings growth and 3.3pp margin expansion. The consensus forecast of 4.8% growth in 2H24 is conservative, providing a good opportunity for privatisation.
- Benchmarking the take-out price to the 3-year average P/B will mean a 33% upside while the sector’s average PER multiple implies ~70% higher than the pre-suspension price.
Ricegrowers (SunRice ASX:SGLLV) Interview Transcript 23 December 2024
- RaaS interviewed Ricegrowers Group CFO Dimitri Courtelis following the company’s H1 FY25 results.
- This is a full transcript of the interview.
Ricegrowers Ltd – Branded focus paying off
- RaaS has published an update on and interview with FMCG agri-group Ricegrowers which trades as SunRice (ASX:SGLLV) following the release of its interim report last week in which it delivered RaaS-adjusted EBITDA of $67.9m (+10%) in line with our forecasts and NPAT of $31.2m (+4%), below our forecasts due to a higher than expected tax rate (28% vs our 22%).Branded sales represent ~70% of total SGLLV sales, with the benefits of new brands, brand extensions and increased ranging evident in the H1 FY25 result.
- Across Rice Food, Riviana and CopRice EBITDA growth far outpaced revenue growth, with EBITDA margins for Rice Food +400bps, +330bps for CopRice and +140bps for Riviana.
- SGLLV added SavourLife and Simply Delish to the portfolio over the half and can be expected to add and extend further brands in pursuit of its 2030 revenue target of $3.0b.
Empire Energy Group Ltd – The science says potential water impacts likely minor
- RaaS has published a flash comment on NT-focused gas explorer/producer Empire Energy Group (ASX:EEG) following the recently released findings of the Independent Expert Scientific Committee (IESC) on unconventional gas in the Beetaloo which has assessed the potential environmental impact and risk on water resources to be ‘minor’ if appropriate mitigation strategies are implemented.
- The article published on the NT News website, also references comments from the Federal Department of Climate Change, Energy, Environment and Water (DCEEW) which concluded that exploration work (to date) did not meet the legal threshold of being a matter of national environmental significance to be assessed under national environmental law.
- In our view, these findings from both assessments are positive for operators with respect to current gas development plans and potential future phases of gas expansion.
Monthly Chinese Express Tracker | November Volume, ASPs | Review of YTD Performance (December 2024)
- Volume growth & price declines both moderated in November vs preceding months
- We believe most express companies should be experiencing margin expansion in Q424
- We finish with a review 2024’s winners and losers in China’s ecomm fulfillment space
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