Daily Brief Equity Bottom-Up: What Did NPS Buy and Sell in 3Q 2023? and more

• In this insight, we provide the major changes in NPS’ stakes in 25 Korean companies in 3Q 2023.
• In 3Q 2023, NPS reduced its stakes in the IT, construction, and contents related stocks. On the other hand, NPS increased its stakes in China’s re-opening and cosmetics related stocks.
• Five Korean cosmetics stocks that NPS net purchased in 3Q 2023 are up on average 12.8% from end of June 2023 to as of 6 October 2023. 

• Cost at PNB are high and rising, a major drag on its ROA and RORWA, which largely offsets better credit metrics.
• There are many market positives in India banks, but relative to all large peers, Punjab National Bank (PNB IN)has the lowest RORWA
• There is no LDR expansion at PNB. NIM is languishing. Its high 20% govt loans/total loans is high, with 2 peers’ even higher, but better returns.

• Selamat Sempurna remains one of the most interesting industrial players in Indonesia, as an auto and heavy equipment components manufacturer, leading the replacement filter market, and exporting to 100 countries. 
• The company booked growth in sales in 1H2023, despite coming from a high post-COVID base, with margins improving due to lower raw material input prices, without any price rises.
• Selamat Sempurna (SMSM IJ) remains confident in the outlook for the rest of the year and expects sales growth to pick up in 2024 to around +15%. Valuations are attractive.

• Legend Biotech Corp (LEGN US) reported six-fold jump in revenue to $73M in 2Q20, driven by strong uptake of the sole commercialized drug, Carvykti, which generated worldwide revenue of $117M.
• Label expansion applications have been submitted to the FDA and EMA seeking approval of Carvykti for the earlier treatment of patients with relapsed or refractory multiple myeloma.
• Legend Biotech has 11 pipeline programs covering hematologic malignancies and solid tumors. Recent financing activities have fueled the company’s cash balance to $1.5B, which should provide cash runway through 2025.

• Calima Energy (CE1 AU); target price of A$0.45 per share: Operating update in Canada – The 3-well Pisces drilling programme has now been completed.
• 3Q23 production levels continue to be affected by weather related energy cuts and unforeseen work-overs.
• Valeura Energy (VLE CN)C; target price of C$6.40 per share: 3Q23 update – 3Q23 production was 19,961 boe/d.

• Universal Display Corporation managed to exceed the revenue expectations as well as the earnings expectations of Wall Street.
• The company announced $147 million in revenue, $59 million in operating profit, and $50 million in net income, or $1.04 per diluted share, for the second quarter of 2023.
• Universal Display’s revenue guidance range for the year has been reduced from $560 million to $600 million.

• Discovery, Inc. delivered a disappointing set of results as the company could not meet the revenue and earnings expectations of Wall Street.
• The company generated almost $1.7 billion in free cash flow this quarter, and the team anticipates around the same in Q3.
• Their global direct-to-consumer business was mildly EBITDA positive for the first half of this year and nearly breakeven in the second quarter.

• During the recent quarter, McCormick showcased mediocre performance with below-par revenues and on-par earnings.
• In terms of highlights, the company reported constant currency sales growth and noted an improvement in volume performance, excluding China, throughout the year.
• In the Flavor Solutions segment, McCormick continued its exceptional growth momentum, with the third quarter marking its tenth consecutive quarter of double-digit constant currency sales growth.

• Qualys, Inc. delivered an all-around beat in the previous quarter.
• The channel’s share of revenue stayed at 43% from the previous quarter.
• By geo, their overseas business rose 12%, outpacing the 16% rise in the U.S.

Pan American Silver (PAAS) announced the temporary suspension of all operating activities at its La Colorada mine in Mexico due to security concerns at the mine site following the concentrate robbery. The company has not yet provided any indication of the potential restart of mining activities. We currently maintain our estimates and valuation, awaiting more clarity on the timing of the restart.