Daily Brief Equity Bottom-Up: US Masters (URF AU): Almost Too Good To Be True and more

• US Masters Residential Property Fund (URF AU), an ASX-listed real estate trust investing in single-family homes in gentrifying New York metropolitan neighbourhoods  – what could go wrong? 
• Quite a lot, apparently. Shares are down bigly from the 2011 listing; the responsible entity faced ASIC-backed court proceedings for misleading clients; plus dissent emerged over appointing a new RE. 
• URF is gradually offloading its entire portfolio, and buying back shares, which are trading at 0.49x price-to-book.  So, where’s the rub?

• Boeing is a globally recognized company in the aerospace industry that was founded in 1916 by William Boeing.
• The company’s business model includes three segments: commercial, defense, and services, with the commercial segment being the largest, accounting for nearly 40% of its revenues.
• Boeing has played a crucial role in the evolution of the aviation industry, from fabric airplanes to carbon fiber composite jetliners that can fly long distances without stopping.

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• Money Forward’s Corporate SaaS business is thriving, with +44% year-over-year growth in ARR, a 139,000-strong customer base, and a healthy CAC-to-LTV ratio of 3.7x.
• Despite strong fundamentals, the stock’s 20% decline is attributed to market fixation on quarterly earnings and concerns about rising interest rates.
• The company’s untapped potential lies in the mid-market segment, where cross-selling opportunities across 18 paid products could significantly boost ARPA, tapping into a TAM estimated at $15 billion.

• Country Garden’s offshore debt default is happening. Its time to investor to revisit their position as restructuring is looming.
• Investors may not have any access to Country Garden’s onshore assets under its current offshore issuance structure.
• Evergrande’s offshore debt issuing structure could be more favourable compared to that of Country Garden in bankruptcy, depending on how the court interprets its Keepwell agreement.

• On 16 October, Douzone Bizon (012510 KS) announced that it is entering the global software-as-a service (SaaS) market in cooperation with Amazon Web Services (AWS). 
• The agreement stipulates that Douzone Bizon will develop global SaaS through AWS support and enter overseas markets. 
• We believe shares of Douzone Bizon have been oversold. Valuations have become more attractive and its cooperation with AWS is also likely to improve the company’s overseas sales and profits. 

• There is downside risk to SoftBank’s NAV, due to valuations relating to Arm and the Vision Funds including LatAm; on aggregate, these holdings account for 70% of group equity value
• We believe that Arm’s super-premium valuation is unsustainable; there is lack of transparency on the valuations relating to the unlisted Vision Fund holdings, especially in SVF2
• We estimate that SoftBank shares trade at a 44% NAV discount, tighter than the average at the end of the last eight quarters; add to this Arm’s current over valuation

• Triveni Turbine (TRIV IN)  is one of the leading players in manufacturing of steam turbines, which in turn has uses across various energy intensive industries. 
• The company has recovered well from covid, has a robust order book in conjuction with healthy financial position. Balance sheet is debt-free, high cash and lean WC cycle. 
• The only possible risk that comes to the balance sheet would be of potential statutory disputes. The contingent liabilities remain under-stated.

• Our long held strong conviction on  LVS has not faltered despite its chronically undervalued.
• Monthly gross gaming win trends do not reflect sagging China economy.
• Imminent 3Q23  earnings release may well  hold upside surprises. We sense a beat.

• Philippine Stock Exchange (PSE PM) is a monopoly making >60%>/45% EBITDA/NPAT margins across its history with ex-cash ROCE’s >30% (cash at five bn pesos is 33% of market cap).
• With a relatively low penetration of brokerage accounts (1.5%), an underowned market with 100mn USD volume, and low fee structures, there is ample low-hanging fruit on earnings growth.
• The stock trades at 18x PE (9x ex-cash and real estate). With an 80-100% payout, the dividend yield is 5-6%, so you are paid to wait for future catalysts. Our meeting with management in Manila last week gives us added confidence. 

• Medikaloka Hermina (HEAL IJ) remains a differentiated hospital player in Indonesia given its focus on the treatment of women and children plus its doctor partnership model in its hospitals.
• The company booked a strong rebound in both inpatient and outpatient volumes in 1H2023, and we expect this to continue into 2H, with two new hospitals opened in 3Q2023.
• Despite exhibiting the strongest growth amongst its peers, the company still trades at a significant discount to Mitra Keluarga Karyasehat Tbk (MIKA IJ) on 10.2x FY2024E EV/EBITDA.