In today’s briefing:
- MTR (66): Should Start to Move
- Keisei Electric (9009): Ridership and Price Hike
- Komatsu (6301) | The Back Test Worked. Now What?
- Japan Elevator Service Holdings (6544): Going up to Reach New Heights
- Blue Lotus IPO Outlook/J&T Express: Cash Crunch as Prices Slump, Overseas Volume Ramps
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MTR (66): Should Start to Move
- The share price of MTR Corp (66 HK) has not moved and lagged behind other transport operators in Asia.
- High-Frequency numbers from the company has shown improvement and signs that the Chinese tourists are gradually returning.
- The reopening of the checking in facility in downtown Hong Kong is another sign that more tourists are expected to come.
Keisei Electric (9009): Ridership and Price Hike
- YTD performance of 61% has been stellar and index beating but the concern remains whether there will be more left.
- Keisei Electric Railway Co (9009 JP) April 23 ridership and revenue growth provide momentum despite the still non-existence arrival of Chinese tourists.
- Chinese tourists’ arrival in 2H 23 may be slow but chances are that they will arrive in Japan and will boost both ridership and revenue.
Komatsu (6301) | The Back Test Worked. Now What?
- We remain bullish on Komatsu despite returning a positive 37% return over the past year.
- Q1 results are likely to exceed expectations and guidance is likely to be cautious, due to forex, pricing and cost factors.
- Komatsu is still attractively valued compared to its peers and historical averages, and has 20% upside potential.
Japan Elevator Service Holdings (6544): Going up to Reach New Heights
Initiating coverage
- A successful market disruptor – Japan Elevator Service (JES) has been executing its growth strategy, increasing market share in the domestic elevator maintenance market via organic and acquisitive growth.
- Operating in a market dominated by OEMs, it is making solid headway by 1) offering a cost-effective solution, 2) a differentiated service offering technical services and availability of parts on par with the OEMs, and 3) experiencing rapid growth through by establishing a nationwide network providing regionally rooted services.
- Pursuing growth opportunities – we highlight two drivers for the company; 1) secular growth as building owners convert to reputable independent providers for cost management, and 2) structural demand from aging elevators requiring modernization.
Blue Lotus IPO Outlook/J&T Express: Cash Crunch as Prices Slump, Overseas Volume Ramps
- J&T’s China growth will slow from a lack of (1) M&A targets, and (2) cash to sustain a price war. SEA’s growth will slow, and profit margin decline due to
- (1) Shopee in-sourcing of high-profit parcels(2) PE-backed rivals using price wars to gain market share. Lower penetration of China supply-chain platforms will stunt J&T’s growth in New Markets, we expect.
- In our base case we value J&T at US$ 10 bn, which is (25%) vs. J&T’s valuation in its latest round of funding.