In today’s briefing:
- Korean Air: Earnings Remain Elevated but Premium May Continue to Unwind as Cargo Yields Re-Set
- LG Energy Solution: A Big Earnings Miss in 4Q 2023
- Initiation – Arara (4015 JP)
- BluSmart raises $24m to develop large-scale EV charging hubs
- Interglobe Aviation (Indigo) Lockup – Still Has US$3bn+ Stake Left, After Three Prior Selldowns
Korean Air: Earnings Remain Elevated but Premium May Continue to Unwind as Cargo Yields Re-Set
- We forecast EBITDAR of KRW3.35trn for Korean Air in 2023 (KRW3.8trn previously) with EBITDAR/ATK up 50% on 2019/32% on 2018. We remain at KRW2.9trn in 2024 (EBITDAR/ATK +28% vs 2019).
- Unwinding cargo yields may fully eliminate earnings gains but cost management safeguards future prospects despite Asiana merger uncertainty.
- Cost inflation management inflected negatively in 3Q as labour costs rose – control crucial as market conditions normalize and low cost competitors expand.
LG Energy Solution: A Big Earnings Miss in 4Q 2023
- LG Energy Solution reported disappointing preliminary earnings in 4Q 2023. The company reported operating profit of 338.2 billion won (43.5% lower than consensus).
- Post a major earnings miss for LGES in 4Q 2023, the consensus is likely to reduce earnings estimates of the company in 2024 and 2025.
- Major EV players such as Tesla were reducing prices in the past year causing higher pressures on EV battery makers such as LGES to reduce their prices as well.
Initiation – Arara (4015 JP)
- Overview: arara primarily serves retailers such as supermarkets and restaurant chains, offering Dokuji Pay (branded currency payment + marketing) and high-speed e-mail delivery software as a service.
- With its Dokuji Pay service, where clients are the issuers, the company has a certain level of distinction from its competitors in this niche field, and is solidifying its market position.
- Starting in March 2024, the company plans to integrate its digital signage- related business as well, aiming to quickly accelerate its retail marketing platform strategy to help retail stores strengthen their connection with consumers both inside and outside their stores.
BluSmart raises $24m to develop large-scale EV charging hubs
- BluSmart Unlike other players in India’s crowded EV scene, BluSmart Mobility does not build its own electric vehicles.
- Instead, the company is a ride-hailing firm that leases EV models like the Tata e-Tigor, MG ZS, and Hyundai Kona to be part of its 5,500-strong fleet.
- But an equally important of BluSmart’s business is its charging infrastructure division.
Interglobe Aviation (Indigo) Lockup – Still Has US$3bn+ Stake Left, After Three Prior Selldowns
- InterGlobe Aviation Ltd (INDIGO IN)’s co-founder Rakesh Gangwal’s 25%+ stake will be released from lock-up tomorrow.
- He had earlier stated his intention to pare down his stake. He has sold shares in Sep 2022, Feb 2023 and Aug 2023.
- In this note, we will talk about the lockup dynamics and possible placement.
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