In today’s briefing:
- China Insurance: PICC P&C Vs. CPIC
- Erajaya Swasembada (ERAA IJ) – Smartphones and Retail in One
- PT Surya Citra Media Tbk (SCMA IJ) – A Vote of Confidence in Vidio
- Raccoon: Valuation Has Come Down but The Growth Momentum Remains Strong
- M3: Valuation to Further Drop as Earnings Momentum Slows Down
- RPSG Ventures: IPL Media Rights Auction Update
- TISCO : A High Dividend Stock
- Okada Manila Mess: How to Play This Chaotic Legal Drama Between Universal and Its Ousted Founder
- TMT Quick Hits: DIS/Cricket Rights, GOOGL/TTD/EU
- Cellid (299660 KS): Promising Immunotherapeutic Platform; Well-Funded to Commercialize Pipeline
China Insurance: PICC P&C Vs. CPIC
- China’s motor insurance has been showing signs of growth after years of decline due to deregulations and reforms in the sector.
- Motor insurance tailwind will benefit large players the most. Bullish on PICC P&C since it’s the largest player in motor insurance and to likely benefit the most from the tailwind.
- Bearish on CPIC since its P&C business is much smaller than PICC P&C and Ping An P&C, while its L&H growth continues to be under pressure.
Erajaya Swasembada (ERAA IJ) – Smartphones and Retail in One
- Erajaya‘s 1Q2022 results do not reflect the company’s prospects for FY2022, given the impact of Omicron, the chip shortage, and significant IT upgrades taking place, all of which depressed performance.
- The company is stepping up its outlet expansion this year, with plans to add 400-500 new outlets in an effort to gain market share post-pandemic by expanding its network.
- Erajaya is adding new retail JVs outside its handset and IoT businesses including JD Sports, Wellings Pharmacy, Grand Lucky, and Paris Baguette, jointly managing these JVs.
PT Surya Citra Media Tbk (SCMA IJ) – A Vote of Confidence in Vidio
- The news that PT Surya Citra Media’s digital platform Vidio has raised an additional US$45m from Sinarmas, Grab (GRAB US), and Bali United should be seen as a positive.
- Vidio is Indonesia’s leading OTT platform with 61m subs and 2.5m paying subs forecast to grow to 4m by year-end with Champions League, World Cup, and Original Drama driving demand.
- PT Surya Citra Media looks cheap relative to its holding in Vidio, which is worth 71% of its market cap, and trading at a discount to 5-year average forward PER.
Raccoon: Valuation Has Come Down but The Growth Momentum Remains Strong
- Raccoon Holdings, Inc. (3031 JP) is currently maintaining the COVID growth momentum while all others in Japanese e-commerce are face a significant drop-off in demand conditions.
- If this outperformance continues, valuation multiples that look somewhat decent today could look cheap beyond any reasonable doubts in a few years.
- In addition, if Raccoon succeeds in bringing down advertising spending to the pre-COVID level, the share price could rise above the previous peak of ¥3,300.
M3: Valuation to Further Drop as Earnings Momentum Slows Down
- M3’s shares have declined 53.2% over the last 12-months to JPY3,566 from JPY7,613 per share. Share price has lost 15% since 4QFY03/2022 earnings in April.
- The company’s Medical Platform business was a key beneficiary of pandemic which saw accelerated transformation in pharma marketing.
- However, with pandemic conditions easing off, m3’s earnings growth has begun to decelerate and we think there is further downside with weakening of core earnings.
RPSG Ventures: IPL Media Rights Auction Update
- We had highlighted in our prior note that IPL Media Rights for next 5Y (2023-27) could fetch a value of over INR 40,000cr.
- The bidding concluded recently. Total value of IPL Media Rights came in at INR 48,390cr, well above the INR 40,000cr expectation and closer to our optimistic scenario of INR 50,000cr.
- RPSGV’s IPL team will receive INR 480cr+ per year from its share in media rights vs INR 300-350cr projected earlier. This improves IRR for RPSGV’s investment in IPL team substantially.
TISCO : A High Dividend Stock
- Maintain BUY for TISCO with a target price of Bt106.00. We like its high dividend yield, expected at 8.4-9.3%for 2022-24.We maintain a moderate net profit growth of 6%CAGR for 2022-24.
- A mixed picture in 2Q22 We expect Tisco Financial Group (TISCO) to post a net profit of Bt1.74b in 2Q22, up 4.5% yoy (-3.1% qoq). The yoy rise will largely
- Lending growth in 2Q22 is likely to continue rising by 0.4% QoQ (1Q22: +0.4% QoQ), given elevated demand from corporate and SME lending despite muted new auto HP lending.
Okada Manila Mess: How to Play This Chaotic Legal Drama Between Universal and Its Ousted Founder
- The Philippine gaming market is recovering fast from covid with the future of hs biggest casino property plagued by legal battles.
- Founder Kazuo Okada dismissed in 2017 by the Universal board over his alleged financial self dealing, is seen behind a May 31st strong arm takeover of the property.
- The Manila government thus far remains neutral but plans for a Spac IPO by Universal and a US based hedge fund is delayed, but is scheduled to debut by September.
TMT Quick Hits: DIS/Cricket Rights, GOOGL/TTD/EU
- Indian Premiere League cricket auction has brought in $6.6B thus far, up 3x from the 2018-2022 package, though the per game increase is closer to 2.3x.
- Disney was smart to relinquish the digital rights, saving itself $3.6B in cash (~$2/share) rather than spending to drive worthless Hotstar+ subs (~$0.26/share).
- Google may open up YouTube advertising to 3rd party platforms to settle EU antitrust…a potential boon for The Trade Desk.
Cellid (299660 KS): Promising Immunotherapeutic Platform; Well-Funded to Commercialize Pipeline
- Cellid (299660 KS) is developing a rich pipeline of five cell-based anticancer therapeutic vaccines, for which there are no commercialized competing products at present. BVAC-C is the lead candidate.
- BVAC-C is being developed for cervical, head and neck, anal, and certain other cancers. It is the world’s first-in-class in terms of its complex and powerful anticancer action mechanism.
- Cellid has secured government funding of KRW8.9 billion for its COVID-19 vaccine candidate. The company is accelerating clinical trial of COVID-19 booster dose candidate.
Related tickers: PICC Property & Casualty H (2328.HK), Erajaya Swasembada (ERAA.JK), PT Surya Citra Media Tbk (SCMA.JK), Raccoon Holdings, Inc. (3031.T), M3 Inc (2413.T), Tisco Financial Group (TISCO.BK), Universal Entertainment (6425.T), The Walt Disney Co (DIS.N)
Before it’s here, it’s on Smartkarma
