Equity Analyst

Xin Yu, CFA

Equity Bottom-Up

<ul>
<li>Minth's stock price has been weak in the past year but its improving fundamentals started to reflect in the results in 2H22. </li>
<li>2023 revenue growth will be supported by the overseas auto market recovery and fast-growing battery housing business. </li>
<li>Minth's valuation is near historical low and is at a discount to its peers</li>
</ul>


Minth's stock price has been weak in the past year but its improving fundamentals started to reflect in the results in 2H22. 
2023 revenue growth will be supported by the overseas auto market recovery and fast-growing battery housing business. 
Minth's valuation is near historical low and is at a discount to its peers


Asian Insight Provider - Actionable ideas, CrossASEAN Research

Henry Soediarko

Asian Insight Provider - Actionable ideas

CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

<ul>
<li>Share price sell-off is overdone as the prospect of the war worsening is less likely.</li>
<li>Channel checks have shown that EV sales remain upbeat despite the war.</li>
<li>The long-term prospect to participate in the growing EV industry through battery housing and body parts remain intact. </li>
</ul>


Share price sell-off is overdone as the prospect of the war worsening is less likely.
Channel checks have shown that EV sales remain upbeat despite the war.
The long-term prospect to participate in the growing EV industry through battery housing and body parts remain intact. 


<ul>
<li>
<a href="https://www.smartkarma.com/entities/minth-group-ltd" target="_blank" data-smartkarma-citation="entities:9232:1" rel="noopener">Minth Group Ltd (425 HK)</a> has a new product, battery housing, that allows it to participate in the EV value chain including Tesla. </li>
<li>Aluminum content in EV is expected to double from 10 to 20%.</li>
<li>Trading at a deep discount (19x) vs other EV OEMs and EVs suppliers. </li>
</ul>



Minth Group Ltd (425 HK) has a new product, battery housing, that allows it to participate in the EV value chain including Tesla. 
Aluminum content in EV is expected to double from 10 to 20%.
Trading at a deep discount (19x) vs other EV OEMs and EVs suppliers. 


<p>1H 2021 result for <a href="https://www.smartkarma.com/entities/byd-co-ltd-h" target="_blank" data-smartkarma-citation="entities:20962:1" rel="noopener">BYD (1211 HK)</a> was a good topline growth but not followed with a good bottom-line growth due to the gross profit margin contraction from the handset business while the auto business is still producing solid growth with more catalysts to come. </p><div>If investors are willing to take BYD Electronics' prospects, or long-only investors, when buying <a href="https://www.smartkarma.com/entities/byd-co-ltd-h" target="_blank" data-smartkarma-citation="entities:20962:1" rel="noopener">BYD (1211 HK)</a> then having BYD only is not a bad idea. However, if a long-short investor prefers not to have exposure to BYD Electronics while still very much in love with the BYD Auto business, then shorting BYD Electronics in addition to going long on BYD can be considered. </div><div>The ratio should be:</div><div>1. Long 100 shares of <a href="https://www.smartkarma.com/entities/byd-co-ltd-h" target="_blank" data-smartkarma-citation="entities:20962:1" rel="noopener">BYD (1211 HK)</a> </div><div>2. Short 50 shares of <a href="https://www.smartkarma.com/entities/byd-electronic-international-co-ltd" target="_blank" data-smartkarma-citation="entities:1927:1" rel="noopener">BYD Electronics (285 HK)</a> .</div>

1H 2021 result for BYD (1211 HK) was a good topline growth but not followed with a good bottom-line growth due to the gross profit margin contraction from the handset business while the auto business is still producing solid growth with more catalysts to come. If investors are willing to take BYD Electronics' prospects, or long-only investors, when buying BYD (1211 HK) then having BYD only is not a bad idea. However, if a long-short investor prefers not to have exposure to BYD Electronics while still very much in love with the BYD Auto business, then shorting BYD Electronics in addition to going long on BYD can be considered. The ratio should be:1. Long 100 shares of BYD (1211 HK) 2. Short 50 shares of BYD Electronics (285 HK) .

Fuyao Glass Industry Group / Equity Bottom-Up

<div class="content-remarks">
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/210/904/original/image_62803801921622698789619.png?1622698789" class="editor-image img-responsive" data-smartkarma-image-id="210904"></figure><p>source: Reuters</p>
</div><p>The above chart indicates that the correlation between Fuyao and Xinyi Glass broke in Q1 2021 as the former hit a break while the latter kept on accelerating further. The initial reaction is that Fuyao Glass will surely play catch up to Xinyi Glass and the trade is to go Long Fuyao Glass and Short Xinyi Glass. </p><p>However, the fundamental tells a different story. Xinyi Glass has a small part of their business in the energy-saving architectural glass that ticked the ESG box while Fuyao Glass's largest exposure is in auto glass, which has suffered due to the chip shortage but may soon bounce if the semiconductors ramp up their production activities. </p>


source: Reuters
The above chart indicates that the correlation between Fuyao and Xinyi Glass broke in Q1 2021 as the former hit a break while the latter kept on accelerating further. The initial reaction is that Fuyao Glass will surely play catch up to Xinyi Glass and the trade is to go Long Fuyao Glass and Short Xinyi Glass. However, the fundamental tells a different story. Xinyi Glass has a small part of their business in the energy-saving architectural glass that ticked the ESG box while Fuyao Glass's largest exposure is in auto glass, which has suffered due to the chip shortage but may soon bounce if the semiconductors ramp up their production activities. 

China

Minth Group Ltd. manufactures exterior automobile body parts.  The Company produces structural body parts, decorative parts, and trim.  Minth supplies multinational automobile manufacturers operating in China.

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Minth Group Ltd (425 HK)

Minth: Buy

Minth's revenue will be driven by the fast-growing battery housing business and recovery of US and EU auto markets this year. Each segment's GM is...

Xin Yu, CFA

Minth (425): Hop On

Post sell-off and recent downgrades by the sell-side, it may be a good entry point to own Minth again considering the potential from providing EV...

Henry Soediarko

Minth (425 HK): EV Is Next

Minth (425.HK) new battery housing for EV has prompted investors to consider them as part of EVs value chain and channel check suggested aluminum...

Henry Soediarko

Byd (1211) Vs BYDE (285): Carry On

Long BYD and Short BYDE - the way to go for having a positive outlook in the NEV business while less positive in the handset business as the latter...

Henry Soediarko

Fuyao Glass Vs Xinyi Glass: Which One?

The short-term outlook for Fuyao Glass Industry Group (3606 HK)is much more positive compared to Xinyi Glass as it has exposure to the auto sector,...

Henry Soediarko

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