Global Research and Evidence Lab 13 August 2024 | --- | --- | --- | --- | --- | --- | --- | --- | --- | |---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------|-------------|-------------|--------------|--------------|-------------------------------------------|-------------------------|--- ...

Industry Investment Rating - The report provides a stock ranking for the Japan Food Sector, with Buy and Neutral ratings for various companies in the Beer & Beverage, Processed Food, and Tobacco/Others categories [5] Core Investment Thesis - The report highlights that share prices reacted sharply to concrete earnings figures during the April-June period, with stocks that reported stronger Q1 results than guidance and had high visibility of profit growth for the next fiscal year being favored [2] - Stocks with high medium- and long-term growth prospects but short-term earnings falling short of consensus were overly penalized by the market, presenting potential investment opportunities [2] Stock Recommendations - Nissin Foods is recommended as a Buy due to: 1) Q1 profit stagnation being attributed to a time lag in recording costs, 2) overseas instant noodle sales growing at a high single-digit rate, and 3) outperforming the market in terms of volumes in the US despite price mix issues [3] - Coca-Cola Bottlers Japan is recommended as a Buy due to: 1) strong monthly sales indicating continued positive news flow, and 2) high visibility for the next fiscal year with full contribution from price increase effects [3] Stock Ranking Details - Buy-rated stocks include Coca-Cola Bottlers Japan, Nissin Foods, Asahi GHD, Japan Tobacco, Kikkoman, and Toyo Suisan Kaisha among others [5] - Neutral-rated stocks include Suntory Beverage & Food, Dydo GHD, Itoen, Morinaga Milk, and Yakult among others [5]

Global Research and Evidence Lab 13 August 2024 Japan Equity Strategy & Thematic Research Event Watch: Focus on micro factors while also monitoring macro conditions Equity Strategy Japan Nozomi Moriya Strategist nozomi.moriya@ubs.com +81-3-5208 6260 Miranda Zhang Associate Analyst miranda.zhang@ubs.com +81-3-5208 6283 Focus on Japan-specific corporate change while monitoring macro conditions Having edged down 0.5% in July, Japan's TOPIX index fell by 20% in just three days in August in reaction to the BoJ's ...

Investment Rating - The report assigns a 12-month rating of Neutral to Evolution Mining [2][14]. Core Insights - FY25 guidance aligns broadly with a solid FY24 result, highlighting a final dividend of 5Acps in line with consensus [2]. - The price target remains unchanged at A$3.70, reflecting a neutral valuation stance [2][5]. - Key financial metrics show a revenue of A$3,216 million, surpassing UBS estimates of A$3,118 million and consensus of A$3,179 million [2]. Financial Performance - Underlying EBITDA reached A$1,513 million, exceeding UBS estimates of A$1,221 million and consensus of A$1,378 million [2]. - Underlying NPAT was A$482 million, compared to UBS estimates of A$297 million and consensus of A$354 million [2]. - Basic EPS was reported at 22Acps, above UBS estimates of 15Acps and consensus of 19Acps [2]. Guidance and Projections - FY25 guidance includes gold production of 710-780koz, with UBS estimates at 727koz and consensus at 743koz [2]. - Copper production is projected at 70-80kt, aligning with UBS and consensus estimates of 77kt [2]. - AISC is expected to be A$1,475-1,575/oz, with UBS estimates at A$1,460/oz and consensus at A$1,470/oz [2]. Valuation and Market Metrics - The report indicates a forecast price appreciation of -2.9% and a forecast dividend yield of 5.2%, leading to a forecast stock return of 2.4% [3]. - The market return assumption is set at 9.2%, resulting in a forecast excess return of -6.8% [3]. - Evolution Mining operates six mines across Australia and Canada, focusing on optimizing and upgrading asset quality [4].

Investment Rating - The report assigns a 12-month rating of Neutral to Orora, with a price target of A$2.16 [2][16]. Core Insights - FY24 results exceeded expectations, supporting a re-basing of FY25 consensus estimates. Revenue increased by 9% to A$4.7 billion, and EBIT rose by 26% to A$404 million [2][3]. - The company is undergoing a strategic review and is in discussions to potentially divest its North American Packaging Solutions (OPS) business [2][3]. Summary by Sections Financial Performance - FY24 revenue increased by 9% to A$4.7 billion, EBIT up by 26% to A$404 million, and net profit after tax (UNPAT) rose by 10% to A$224 million [2][3]. - Australasia Beverage EBIT grew by 2% to A$156 million, driven by a 2.5% increase in cans volume [2][3]. - North America EBIT remained flat at A$167 million, with OPS revenue down 11% in USD terms due to price deflation and lower volumes [2][3]. Outlook and Guidance - Orora did not provide formal Group earnings guidance but expects OPS EBIT to align with the 2HFY24 exit run-rate due to transformation benefits and cost management [2][3]. - Australasia EBIT is anticipated to be slightly lower in FY25, with growth in cans offset by the impact of furnace reline [2][3]. Valuation Metrics - Key financial metrics include a forecasted revenue growth to A$5.011 billion in FY25 and an EBIT margin of 7.9% [2][3]. - The report indicates a forecast dividend yield of 4.1% and a forecast stock return of -0.8% [4].

Investment Rating - The report assigns a 12-month investment rating of "Buy" for MatsukiyoCocokara & Co. with a price target of ¥2,960.0 [1][14]. Core Insights - The Q1 FY3/25 operating profit (OP) was ¥17.3 billion, a 1% year-over-year decline, which missed both the forecast of ¥18.7 billion and the IBES consensus of ¥18.8 billion. However, sales and gross profit exceeded expectations, while SG&A costs were higher than anticipated [1]. - The company plans to increase investment in human capital and IT for medium-term growth while maintaining OP targets. Consumption tax-free sales showed strength, increasing their share to 5.5-6% [1]. - FY3/25 guidance remains unchanged, targeting sales of ¥1,050 billion (up 3% year-over-year) and OP of ¥77.5 billion (up 2%). The IBES consensus for OP is ¥81.6 billion, indicating potential for downward adjustments [1]. Financial Forecasts - Forecast price appreciation is estimated at 30.5%, with a dividend yield of 1.9%, leading to a total forecast stock return of 32.3% [2]. - Revenue projections for FY3/25 are set at ¥1,054.6 billion, with operating profit expected to be ¥79.7 billion [1]. - The report anticipates a gradual increase in EPS from ¥128.7 in FY3/25E to ¥158.9 in FY3/29E [1]. Company Overview - MatsukiyoCocokara is a leading drugstore operator in Japan, known for its strong presence in central shopping districts and a high ratio of cosmetics and medical product sales. The company was formed from the merger of Matsumoto Kiyoshi Holdings and Cocokara Fine in October 2021 [3].

Investment Rating - The report assigns a 12-month rating of "Buy" for Amotiv Limited, with a price target of A$13.00 [2][15]. Core Insights - The report indicates that Amotiv Limited's FY24 results were in line with expectations, showcasing solid cash conversion and a balance sheet that is in much better shape compared to previous forecasts [2][3]. - Revenue for the company reached A$987 million, reflecting an 8% year-over-year increase, while EBITDA was A$224 million, marking a 6% increase year-over-year [2][3]. - The outlook for FY25 suggests further revenue growth and underlying EBITA, with expectations of stable new vehicle sales and resilience in wear and repair services [2][3]. Summary by Sections Key Numbers - Revenue: A$987 million (+8% y/y) vs UBS estimate of A$997 million (-1% miss) - EBITDA: A$224 million (+6% y/y) vs UBS estimate of A$221 million (+1% beat) - NPATA: A$119 million (+5% y/y) vs UBS estimate of A$117 million (+2% beat) - EPS: 84.4 cents per share vs UBS estimate of 82.3 cents (+3% beat) [2][3]. Result Highlights - 4WD & Trailering revenue increased by 5% y/y to A$349 million, while LP&E revenue rose by 13% y/y to A$325 million - Operating cash flow decreased by 17% y/y to A$171 million, with cash conversion around 93% - Net debt stood at A$329 million, with a net debt to EBITDA ratio of approximately 1.6x [2][3]. Valuation - The price target of A$13.00 is based on DCF/SOTP valuation methodologies, indicating a forecast price appreciation of 27.8% and a forecast dividend yield of 4.7% [4][6]. Guidance - The company anticipates continued growth in revenue and underlying EBITA for FY25, with corporate costs expected to be around A$14 million and capital expenditures projected at A$25 million [2][3].

Global Research and Evidence Lab 14 August 2024 First Read AGL Energy UBS SnapShot: 2H24 Results ONE LINER Solid in-line result with underlying EBITDA and NPAT finishing FY24 2% ahead of consensus estimates and FY25 guidance in line with expectations. A $250m acquisition of Firm Power & Terrain Solar adds battery development sites to AGL's portfolio. KEY NUMBERS 1) Underlying 2H24 NPAT $413m vs UBSe ($386m) and consensus ($397m) 2) Underlying 2H24 EBITDA $1,142m vs UBSe ($1,087m) and consensus ($1,104m) 3) ...

Global Research and Evidence Lab 14 August 2024 First Read BWP Trust UBS SnapShot: FY24 Result ONE LINER Strong result and g'dance for growth KEY NUMBERS NPAT (adj. for straight lining rent) $120.5m vs UBSe $117.5m (+1%). Distributable amount $124.1m and DPS 18.3c (pre-announced). RESULT HIGHLIGHTS 1. Comp. rental growth 4.2% (4.8% 1H24). Five Bunnings market rent reviews were finalised for the period, resulting in a 4.4% increase in rents. In FY24, rent reviews are split between CPI (51) and fixed (101) wi ...

First Read Commonwealth Bank of Australia UBS Snapshot: FY24 Result ONE LINER In-line result but not enough in our view given current mkt rating KEY NUMBERS (FY24 seq., continuing operations unless stated otherwise) (1) PPOP $15.0B, (in-line with cons); (2) Impairments $802M, 11% better than cons ($900M) and 12% above UBSe ($913M); (3) Cash NPAT $9.8B (~1% above cons); (4) Cash Diluted EPS (incl. discontinued) 582.6cps (in-line with UBSe 582.7cps, +6% above cons 550.7cps); (5) Interim div 250cps (UBSe 238cp ...