Equity Bottom-Up: Grab, Sembcorp Marine, LG Energy Solution, Softbank Group, Uni-Asia Group, Inpex Corp, Chiyoda Corp, Dr. Reddy’s Laboratories, MK Restaurants Group and more

• The headlines for Grab‘s recent results looked encouraging but the higher driver and consumer incentives hit revenues and profitability towards the end of the year but this is temporary.
• Grab (GRAB US) is facing stiffer competition in the region, especially from GoTo and Shopee Food but is defending its lead and preparing for higher growth in mobility requiring investment.
• Increasing exposure in digital financial services plus more focus on verticals such as online groceries bodes well for future growth. A market cap of US$12.5bn with US$6.8bn in net cash.

• After a 35% price decline in 2021 and 11% performance YTD, we are exploring if SMM is able to capitalize on the high oil price environment.
• We will look at its recent financial performance, orderbook, and financial forecast in 2022.
• We will also look at how to value the company and the key risk with our valuation.

• LG Energy offers extremely inflated valuation multiples that are even more stretched than frothy peers. 
• It also offers numerous other red flags due to fire risks and a regional production capacity spread that could prove disadvantageous. 
• Recent commodity price surges also impair the competitiveness of EVs overall but also LG Energy’s NMC chemistry vs. LFP.

• Both Alibaba (-6%) and Didi (-12% pre-market) are down on regulatory pressure 
• Vision Fund valuation losses are approaching $20bn for Q4 and the current (unrealized) portfolio has turned negative
• NAV/Share and the share price are at two-year lows and gains from the post-Covid tech run are largely gone

For our next Corporate Webinar, we are glad to welcome Uni-Asia Group (UAG SP) Group CFO Lim Kai Ching.

In the upcoming Webinar, Kai Ching will share a short company presentation, after which he will engage in a fireside chat with Smartkarma Insight Provider Osbert Tang. The Corporate Webinar will include a live Q&A session.

The Corporate Webinar will be hosted on Tuesday, 22 March 2022, 17:00 SGT.

Uni-Asia Group Limited is an alternative investment company, which offers structured financing, ship charter arrangement, shipping and maritime asset management, and real estate investments. The Group has 10 wholly-owned bulk carriers under the Group’s ship-owning and chartering segment, and another eight bulk carriers through joint-investment companies.

Uni-Asia also invests in property projects in Hong Kong, of which two projects have been completed and are currently in the market for strata-title sales. The Group is also invested in three other property projects in Hong Kong, which are currently under construction. Within Japan, the Group has been investing and developing small residential property projects termed the “ALERO” series for the past 10 years and continues to see great success with these projects.

Corporate Webinars by Smartkarma Corporate Solutions feature discussions with IROs and Executives, discussing their companies, the challenges they face, and the opportunities in their sectors and markets.

• While Inpex has almost tripled from its late 2020 bottom the stock is up just 17.5% compared to the beginning of Jan 2020. 
• With crude prices 77% higher than at that time that suggests that there is plenty of upside left in this trade. 
• This is further supported by plans for volume expansion and relatively healthy reserves.

• Recent events in Ukraine should be highly favourable for Chiyoda as they raise the potential for LNG capex. 
• US to Europe deliveries could involve significant liquefaction capacity build-out at good pricing points and even hydrogen could be in the mix. 
• If orders come through and rising profit drives the share price up that could also lead to positive capital structure changes.

• Dr. Reddy’s Laboratories (DRRD IN) is outperforming the domestic pharma industry and aims to expand its market share. Currently, India business contributes 19% of revenue. 
• The company’s largest revenue segment, the U.S. generic business continues to see pricing pressure. It plans to launch new products, including complex generics to combat the impact of price erosion.
• Dr. Reddy also has around 13% revenue exposure to Russia and other CIS countries. Sharp depreciation of Russian currency will negatively impact revenue from the region.

• Yesterday analyst meeting came out with a positive tone. We reiterate our BUY rating for M with a target price of Bt61.0 based on 25xPE’22E,Asia ex-Japan consumer staple sector average
• Management target same-stores-sales-growth (SSSG) at above 30% in 2022 from -15% in 2021.SSSG has strongly recovered at +15% in Jan-Feb 2022 supported by resuming dine-in services together with restoring consumer 
• After resuming dine-in services,GPM recovered to 66.9% in 4Q21.We believe GPM to increase to 66% in 2022E from 64.1% in 2021 supported by a higher revenue contribution from dine-in service