Equity Bottom-Up

• 1Q23 shows strong Value Of New Business (VONB), not sure of profit flow through
• Comparative to 1H22 is easy vs loss of USD556m in the period, but risk to downside
• Despite, stock buybacks, increased dividends market cap down 34% since peak this year

• New release shows surge in Australia residential mortgage non-performing exposures QoQ
• From March 2023 to June 2023 these NPLs rose by 10.5% and this is not an annualized rate
• Its total NZ non-performing loans rose from AUD671m to AUD741m or 10.4% QoQ

• Share buybacks by primary listed companies 11 – 17 Aug 2023 Institutions were net buyers of Singapore stocks over the five trading sessions through to Aug 17, with S$256 million of net institutional inflow, while 21 primary-listed companies conducting buybacks with a total consideration of S$36 million.
• On Aug 15, QAF joint group managing director and executive director Lin Kejian acquired 450,000 shares at an average price of S$0.79 per share.

• Taobao and Tmall have implemented two major reforms: 1) The launch of the Wanxiangtai Platform Unlimited Edition; 2) Changing the rules for displaying merchant sales volume from monthly to annual.
• Although the new Wanxiangtai differs from PDD’s “Fangxintui” and “Quanzhantui” , the idea is to simplify and automate merchant promotion. We anticipate that this change will boost the take rate.
• We increased our core e-commerce take rate estimate for BABA in FY24/FY25 to 3.85%/4.0%, respectively, and raised our TP to US$ 127.

• 10 largest weights of the iEdge S-Reit Index THE FTSE EPRA Nareit Developed Index is designed to track the performance of listed real estate companies and real estate investment trusts (Reits) worldwide.
• The 10 largest weights of the iEdge S-Reit Index make up close to 70 per cent of the index weights.

• Olympus Corp (7733 JP) announced muted Q1FY24 result. Revenue increased 8% YoY to ¥208B, while operating profit declined 50% YoY to ¥22B. A one-time gain has inflated the net profit.
• Revenue missed about 3% compared to the plan. Product shipment hold and parts supply shortages represented about 1.5% points out of the total miss of 3%.
• Olympus has reiterated FY24 guidance and expects FY24 revenue of ¥914B (+4% YoY) and operating profit of ¥163B (-13% YoY). In FY23, the company missed operating profit guidance.

• China MeiDong Auto (1268 HK) announced a profit warning this morning, expecting a 90% decline in net profit for 1H23. 
• Luxury auto dealer in China is facing major uncertainties in its business model, with no visibility in the near term. 
• However, Zhongsheng Group (881 HK) currently employs the best long-term strategy amidst industry transformation.  Suggest to keep a close eye on the name.

• Infineon’s big news is that they, too, will be building one of the largest Silicon Carbide fabs in the world. This makes Wolfspeed’s Siler City look puny in comparison.

• Infineon is now looking to be number three in the Silicon Carbide device game, targeting ~500 million in 2023.
• So given the impressive growth, Infineon is a bit late but plans to spend 5 billion dollars over five years for the factory in Kulim.

• Chinese express parcel volume growth was 11.7% in July, far slower than in Feb-May
• July ASP for all segments fell to 8.84 Yuan per piece, the lowest in at least ten years
• Industry leader SF Holding partly insulated from margin pressure by air, international 

• SDRL reporting second quarter results provided greater insight on the contribution of Aquadrill to SDRL’s financials and sets the course for how the business could benefit from current day rates
• SDRL has two drill ships set for contract expiration at year end and another two more vessels expected off contract by end of 2024, not including those with contract options
• Our new price target of $62 from $50 values SDRL in line with its peers even though SDRL is not levered

• Evergrande’s filing in itself does not signify a deterioration in its financials; it was already insolvent as of end 2021.
• The bankruptcy filing provides the benefits of automatic stay and is a necessary step to validate the Group’s offshore restructuring plan. 
• Evergrande’s long term viability still depends on recovery of the China property market. 

• Fu Shou Yuan (1448 HK) has a solid 1H23 with net profit jumped 78% YoY. Its margin reached the highest level, reflecting resurgance in demand and good cost control.
• Both volume and ASP growth led us to believe there is positive room for profitability improvements. Its balance sheet has also strengthened with net cash equals 17% of share price.
• A 18.4% increase in pre-need contracts signed suggests encouraging underlying demand. More M&As are added drivers to earnings prospects.

• In 2Q23, total revenue grew by 31% YoY and revenue from external customers grew by 56% YoY.
• The operating margin can still breakeven during the rapid growth.
• We believe the stock has an upside of 70% for yearend 2024. Buy.

• We have seen a general easing in ADR premiums since end-July, coming down as global markets have fallen.
• TSMC’s premium is easing down from the highs of June.
• UMC and ChipMos ADR discounts appear to be bottoming given their historical range.

• With its new more focused strategy implemented 18 months ago, Novartis continues to streamline its business activities
• Novartis’ pipeline has improved, and a new wave of promising drug candidates is coming and represents a major opportunity to regain momentum
• A strong H1 2023 gives confidence that we are at the beginning of a turnaround story. The Company screens cheap trading on 12x 2024e EPS (post Sandoz).

• Atour reported 2Q23 revenue 9.5%/11.7% higher than our estimate/ consensus, which leads to non-GAAP NI 15.1%/21.1% higher than our estimate/ consensus respectively. Both retail and hotel business have positive contribution.
• We think the strong sales momentum in 2Q23 hotel business is likely to continue in 3Q23 due to the strong summer season but gradually eased in 4Q23. 
• We maintain the stock as BUY rating, and raise TP by US$1.5 to US$36.5 to factor in the better operating efficiency in retail business.

• It is an indisputable fact that JD Health’s revenue growth has slowed down. The core reason is the industry beta brought by mobile Internet demographic dividend/COVID-19 dividend has faded away.
• JD Health’s performance could be under pressure in 2H23. If revenue growth continues to show a downward trend, whether the current profit margin/profitability can be maintained is a question mark.
• JD health is facing four major dilemmas, including both business and policy aspects. Long-term valuation outlook for JD Health is not optimistic. We advise investors to re-evaluate the Company. 

• For a considerable period of time, the industry has been speculating about when the large-scale VBP of TCM formula granules will officially begin. Now, here it comes. 
• Primary market and other financing except IPO in European and US biopharma industry shows a significant signal of recovery. However, IPOs remain stagnant. 
• We analyzed key points about China Resources Sanjiu. Sanjiu is expected to have better performance in 2023 than 2022, but we advise investors to allow a sufficient margin of safety.

• Mayne Pharma (MYX AU) divested its retail generic portfolio. The divestment is part of the transformation strategy which refocused the company on the U.S. women’s healthcare and dermatology markets.
• Mayne Pharma will announce FY23 result on August 25. With business restructuring and cost management, the company is expected to cut net loss significantly and turn EBITDA positive from FY24.
• Mayne Pharma announced a share buyback for up to 10% of issued capital, which will be funded through cash reserves. As of April 30, Mayne Pharma held A$239M in cash.

• BILI reported 2Q23 top-line in-line and non-GAAP net profit 7% better than consensus.  However, gaming revenue was weak, causing BILI to revise down its full-year revenue guidance.
• We believe e-commerce ads could become a new near-term driving force, but the rapid growth of game-related ads might fade post-Q3. 
• Also, the significant consolidation of ACG games could affect BILI’s future game performance. We maintain our US$ 12.3 TP and SELL rating.

• AMP released 1H23 numbers with 24-26% underlying NPAT growth in 2 key divisions
• AUD610m of returned capital in past 12 months will see AUD140m added by October
• AMP Bank is unlike peers, which is deposit-funded, small, focused on mortgages

On 7 August, Pan African Resources (PAF) announced FY23 production of 175,209oz, which was within 0.1% of its guidance of 175,000oz on 26 May. It also indicated all-in sustaining costs (AISC) of US$1,325–1,350/oz (at ZAR17.77/US$), reiterated output guidance of 178–190koz for FY24 and reported net senior debt of US$18.9m as at end-June (cf US$49.9m as at end-H123). In response to the announcement, we have reduced our FY23 normalised HEPS forecast for PAF by 8.3%, from 3.82c/share to 3.50c/share to reflect dollar costs, which were stickier at higher levels than we had hoped. However, our forecast remains above the market consensus. Moreover, our life-of-mine valuation of the company remains almost completely unchanged at 34.24c/share (see Exhibit 7 for full explanation), notwithstanding recent rand strength.

Dentsu experienced difficult trading conditions in its first half, with US client hesitancy, poor Chinese macro conditions and a one-off hit from a problematic project in the DACH region, compounded by demanding comparatives. These ease in H223, and trading should also benefit from one-off events like the Rugby World Cup, as well as the contribution from Tag, consolidated from 1 July. FY23 guidance is now for organic net revenue growth of 0% to -2% (was 1–2%) and a 17.0% operating margin (was 17.5%). With the inclusion of Tag, operational cost savings and lower interest following debt restructuring, guidance for EPS is unchanged. We have updated our forecasts to reflect this, with a knock-on into FY24. The valuation remains well below peers and long-term average metrics.

• MaxLinear’s acquisition of Silicon Motion has been abandoned, with both sides threatening arbitration. 
• It is difficult to understand why the acquisition would have resulted in the synergies projected by management.  The businesses are very different.
• Assuming the companies go different ways, expect for SiMo to perform as it has in the past.

Tomingley delivered Q423 gold production of 15,822oz, meeting its quarterly forecasts at an AISC of A$2,174/oz. These results concluded a strong year, with full year production of 70,253oz at an AISC of A$1,602/oz beating original FY23 guidance of 55,000–60,000oz production (at an AISC of A$1,650–1,900/oz), and meeting April 2023 production guidance of 65,000–73,000oz (at an AISC of A$1,550–1,750/oz). Full year gold sales totalled 70,498oz, generating revenue of A$190.5m at an average price of A$2,703/oz. FY24 guidance has been set for Tomingley at 60,000–65,000oz production at an AISC of A$1,750–2,100/oz as Alkane anticipates increased costs in wages, and electricity, fuel and reagent prices. Following Alkane’s updates since our last note in April, we have increased our FY23 EPS estimate by 26.8% to 7.38c (cf 5.82c previously).

• Global Health (Medanta) (MEDANTA IN) delivered robust revenue growth and profitability in Q1FY24. Revenue grew 27% YoY and 9% sequentially to INR7.9B. EBITDA margins expanded 250 bps YoY to 25.1%.
• All the key operating metrics including inpatient and outpatient volume, ARPOB, and ALOS improved. However, occupancy declined to 58.1% in Q1FY24 from 60% in Q1FY23 on increased bed capacity.   
• Medanta and DLF will develop a 400 bed multi-specialty hospital in Delhi. Ongoing expansion projects are on track to increase the bed capacity to 3,500–4,000 in FY25 from 2,725.

Immix reported Q223 results, which were largely as expected. Operational highlights included rolling positive newsflow for CAR-T therapy NXC-201 and interim results for IMX-110 in colorectal cancer patients. With the ramp-up in clinical activity, mainly the NEXICART-1 trial, as well as the two ongoing Phase Ib/IIa trials for IMX-110, management reported R&D expenses of $2.2m, notably higher than $0.6m in the previous year. At end June 2023, cash was $12.7m, supported by a $5m (gross) at-the-market fund-raise in H123. Based on our estimated cash burn, we continue to forecast an operating cash runway into Q224, consistent with management guidance. As we update our FY23 and FY24 expense estimates based on the H123 run rate, roll forward our model and update the net cash figure, our valuation adjusts to $81.1m versus $83.3m previously.

• Indosat (ISAT IJ) 2Q2023 saw the benefit of surging seasonal demand driving data usage coupled with its stronger network post the 3 integration. 
• The company saw a further increase in subscribers in 2Q2023 to over 100m, along with higher ARPUs, which rose by +8.6% YoY in 2Q2023 helping to improve returns.
• Indosat (ISAT IJ) continues to invest in maintaining the quality of its network as well as offering new value-added products to customers, boosting retention and profitability.

• McDonald’s Corporation delivered an all-around beat in the previous quarter.
• The second quarter was yet another example of their continually strong success, driven by their execution and guided by their Accelerating the Arches strategy.
• McDonald’s continued its outstanding success in Q2 by reaching global comparable sales of 11.7% and double-digit comparable sales in each of its sectors.

• Johnson & Johnson managed to exceed analyst expectations in terms of revenue as well as earnings.
• It was a strong quarter for Johnson & Johnson, with market-leading performance and significant advances in their innovative Pharmaceutical and MedTech pipelines.
• The company reported solid sales and earnings growth in the second quarter of 2023, raising expectations for the year.

• Sea (SE US) 2Q2023 results reflected some underlying slowdown but beneath the surface, the company’s core marketplace business saw accelerated growth, as it stepped up investment, and margins improved concurrently. 
• The company invested in live streaming, bringing on 1m influencers in 2Q2023, likely stemming the impact of TikTok. The gaming business showed meaningful signs of recovery QoQ in 2Q2023.
• Sea (SE US) grew its cash reserves in 2Q2023 to US$7.7bn signifying the success of its business model. The short-term sell-off looks overdone possibly triggered by talk of quarterly losses.

• About a week ago, it was announced that Chairman’s elder daughter Min-Jung Suh will take a long one year leave of absence.
• Chairman Suh is very dissatisfied with the company’s results in the past three years and wants to shake up the company to improve its operations, in our view. 
• Our base case NAV valuation of Amorepacific Group (002790 KS) is 39,611 won, which is 29% higher than current price.

• Bajaj Finance (BAF) reported a strong Q1FY24 earnings, led by an all-time-high quarterly AUM growth of INR 22718cr. With this, BAF has upgraded its FY24 AUM growth guidance to 29-31%.
• AUM growth was aided by the highest ever new loans in a quarter. New loans booked at 9.94mm in Q1FY24 were up 34% YoY and 31%+ QoQ.
• Opex-To-NII has come down to 34.0% vs 35%+ earlier, led by operational leverage and deceleration in investments. This has helped the ROE to jump to 24.0% vs 23.1% YoY.

• Chongqing Brewery Co A (600132 CH) announced a impressive earnings beat last night, with net profit up 24% yoy in 2Q23.  Stock is limit up (10%) today.
• The results confirm the premiumization thesis of the China beer sector is in tact.
• Buy China Resources Beer Holdings (291 HK); take advantage of the overall H-share market weakness and unfounded fear on deflation.   

• JD Health reported 1H2023 results yesterday. 1H revenue increased 34.0% YoY to RMB27.1bn (vs consensus RMB27.5bn) and reported an OP of RMB943.9m (vs consensus RMB753.2m) vs RMB60.1m in 1H2022.
• Though the company made OPM of 5.7% in 1Q2023, 1H2023 OPM was 3.5% in line with our analysis that OPM in excess of 2-3% may not be possible in LT.
• There is very little upside for GPM to improve unless the company’s high-margin service business takes off at a higher rate which seems unrealistic to us.

• Japan online retail stock broker, better average daily volume and rising new accounts
• Monthly data shows strong July average daily volume after an exceptional June
• Granular data on monthly new accounts is strong, now  at +31% in July YoY

• Advantest is highly geared to changes in sales, with average contribution margins of 36% and 51% at the gross and operating profit levels, respectively.
• This works on the downside as well as the upside, something that has perhaps not received sufficient attention as optimists imagine a repeat of the recent extraordinary up-cycle.
• The share price is down 19% from its July 18 high, but at the top of its 5-year P/E range even vs historical peak EPS.

• We attended the Shakey’s Pizza (PIZZA PM) conference call for H1 FY23. Management was upbeat and guided 30% top/bottom line growth for FY23 ( up from 20% in Q1 FY23)
• The company reported its highest-ever quarterly systemwide sales of 4.6 bn pesos ( up 29% YoY) due to network expansion, dine-in recovery, and, to a certain extent, price hikes.
• Trading at a 12.9x/9.9x FY23e/24e PE, the stock is cheap, and growth of 20% CAGR over the next 3-4 years is not being factored in. 

• JD reported 2Q results that were slightly better than the street expected.
• But the set of results did little to alleviate our concerns about the structural challenges JD need to combat.
• We still don’t think JD represents a viable investment case due to its lack of growth catalysts (vs. PDD) and attractive valuation (vs. Alibaba). We would stay on the sideline.

• The growth rate of advertising revenue rose to 36% YoY in 2Q23 from 22% YoY in 1Q23.
• Bilibili continued to cut costs and expenses by dismissing employees in a game studio.
• The share price has fallen enough, and we believe it is time to Buy.

• While our outlook for Sea (SE US)‘s 2Q23 was bearish, we didn’t anticipate such a substantial price reaction post-earnings, considering the existing low consensus.
• However, the market appears to have given more importance to the revenue miss and the deterioration of fundamentals in e-commerce, as indicated by the post-earnings price reaction of -28.7%.
• Shopee’s modest profitability, restrained growth fail to warrant an EV surpassing $7.0bn. The Gaming business is best valued around $3.0bn, while the Fintech arm should be valued at around $5.0bn.

• Sea reported CY2Q23 top-line that missed consensus by 3.4%, while non-GAAP net income beat  by 16%. Sea guided for the net margin to turn negative again in future quarters.
• We see deterioration of Sea’s competitive landscape as a long-term trend, hence we cut TP to US$35. The next swing factor is Temu’s ASEAN launch.
• Yet, we need to remind investors that Sea’s 3Q earning might have some upside, including user growth of Shopee, as well as stabilization of gaming metrics.

• VinFast (1905332D VN), a Vietnamese EV (electric vehicle) manufacturer and a majority-owned affiliate of Vingroup Jsc (VIC VN), completed its merger with Black Spade. 
• The shares closed 3.7x up on the first day with a market cap of US$86bn. The pop is partly due to low float resulting from the controlling shareholder’s 99.0% stake. 
• VinFast faces headwinds of poor reviews, declining customer traction, ongoing losses and cash burn. VinFast is trading at a material premium to peers on growth-adjusted multiples.  

• Recently awarded “Maharatna” status, only 12 companies, FY24 is first full year for this
• Growth is steady, with good returns, and major improvement in credit metrics
• Its 4.77% dividend yield is incredibly high and about 3x higher than peers

• Alibaba Group Holding Ltd.’s workplace collaboration platform DingTalk will split from the company’s cloud division and pursue its own IPO, a source familiar with the matter told Caixin, as the tech giant ramps up efforts to unlock growth following its major restructuring.
• DingTalk’s separation is expected to be completed before the Alibaba cloud unit’s own IPO, the source close to the e-commerce firm said.
• Alibaba announced in May that it would spin off its Cloud Intelligence Group via a stock dividend distribution to its shareholders over the next year with an eventual listing.

• In 2Q23, online advertising and FinTech revenues continued to grow rapidly.
• Game revenue was slow, but two existing games were still at the top of the game market.
• The operating margin improve significantly, benefiting from the layoff last year.

• GoTo Gojek Tokopedia (GOTO IJ) released results for 2Q2023, which reflected a slower growth environment exacerbated by lower incentive spend but some significant progress towards its profitability goals for 2023.
• The company continues to focus on maintaining high-quality users but with an increasing focus on more affordable offerings to expand its demographic reach with the potential to double its users.
• GoTo is undergoing a full assessment across all divisions, with a focus on improving synergies, with new strategies for growth to be revealed next quarter.

• Tencent (700 HK) reported 2Q2023 results today. Revenue grew 11.3% YoY to RMB149.2bn (vs consensus RMB151.1bn) while reported OP increased 34% YoY to RMB40.3bn (vs consensus RMB44.6bn).
• Rapid growth in ad business, video account monetisation and cost controls have contributed to Tencent’s 2Q2023 earnings despite domestic gaming business has slowed down.
• Though Tencent’s 2Q2023 results show a recovery in earnings, we would interpret the company’s earnings with caution given the slowdown in domestic gaming and social networks businesses.

• Tower to collect a cool $353 million termination fee from Intel
• Intel claims its foundry ambition to become the global #2 by end of the decade remains unchanged
• The key thing Intel needed from Tower was access to its broad, diverse portfolio of specialty process technologies. These will take Intel years to develop on their own.  

• Omron’s stock price has collapsed 20% after missing Q1 earnings estimates. 
• The recovery in demand has been pushed back – the company may cut its full year guidance at the interim stage
• On near-term earnings, the stock is around fair value. There is +20% upside for longer-term investors based on our DCF 

• GoTo is laser-focused on shifting the needle towards a semblance of profitability and likely with renewed vigour with a new management team in place. 
• 2Q2023 results will likely reflect a slower headline GMV but should show an improvement in take rates and contribution margin. More colour on recent initiatives would be welcomed by investors.
• GoTo has launched a standalone GoPay app which should help to boost its off-platform usage and has the potential to nurture more collaboration with Bank Jago.

• Thanks to strong demand from China, 1Q results at Tokyo Electron (TEL) were just bad, not horrible. Operating profit was down 30% YoY on a 17% decline in sales.
• 1H guidance implies that 2Q will also be weak. Full-year FY Mar-24 guidance implies an unlikely 50% sequential increase in net profit, putting the shares on 32x projected EPS.
• A return to peak EPS next fiscal year would drop the P/E ratio to 21x, which used to be the top of TEL’s P/E range. Sell. 

• Amorepacific Corp (090430 KS) is likely to be one of the biggest beneficiaries of the return of Chinese group tours in Korea.
• Now that the Chinese government is allowing group tours to South Korea, this will likely lead to a sharp improvement in the company’s sales and profits in 2023-2024.
• We expect the consensus to raise sales estimates of Amorepacific Corp by about 3-5%+ and operating profit estimates by 20-30%+ in 2023 and 2024. 

• Results show dramatically lower NIM, net interest income, but stock gains in spades
• The only way to analyze 7182 is to have a view on its stock, bonds, investment gains
• Unrealized gains more than doubled to JPY472bn: fire-power remains, but is it valuable?

• The Keepers Holdings (KEEPR PM) conference call was upbeat, with the guidance of improved results from Bodegas W&H and sequential seasonal improvement from H12023 to H2 2023.
• Unrealized gross profits of 203 mn pesos ( H1 gross profit 1.8 bn pesos) due to in-transit goods from Bodegas W&H should provide an upside to margins in H2 2023. 
• Trading at 8.54x/7.1x PE FY23e/24e and net cash with a dividend yield of 4.6%/5.3% FY23e/24e, a monopoly position in imported spirit distribution (>70% Mkt share), a name worth exploring. 

• The data in this insight is collated from the “shareholding disclosure” link on the HKEx website.
• Often there is a corresponding HKEx announcement on the increase – or decrease – in the shareholding by directors. Or pledging. However, such disclosures are by no means an absolute.
• The key stocks mentioned in this regular insight are Hang Lung (10 HK) and Hang Lung Properties (101 HK).

• GoTo Gojek Tokopedia Tbk PT (GOTO IJ) reported 2Q2023 results. Gross revenue increased 5.6% YoY to IDR5.83trn while adj. EBITDA losses further narrowed down to IDR1.21trn vs IDR4.3trn in 2Q2022.
• The company’s cost discipline measures have helped cut down on losses but growth rates have seen huge declines over the last few quarters.
• Demand for food delivery has declined in Indonesia while entry of TikToK Shop has posed significant threat on Tokopedia, Shopee and other e-commerce platforms in the country.

• PayPal managed to surpass the revenue and earnings expectations of Wall Street.
• The company’s strategic priorities, including branded checkout, merchant solutions, and digital wallets, drive innovation and growth, supported by AI and data utilization investments.
• In addition, PayPal introduced the development of a stablecoin pegged to the U.S. dollar called PayPal USD.

• Home Product Center (HMPRO TB) is a play on improving Thailand consumer sentiment driven by easing inflation, formation of new Thai government, and continued return of tourists.
• The company is expected to open 10 new stores in 2023, a major pick up in growth from only 1.7% sales CAGR in 2017-2023. 
• Strong track record of management in execution and reputation. Valuation also reasonable. 

• Kaken Pharmaceutical (4521 JP) reported muted operating performance for Q1FY24. Revenue was flat compared to year-ago quarter, while operating profit declined 19% YoY. Net profit decreased 14% YoY.
• The company has reiterated FY24 guidance of flat revenue and 5% YoY decline in operating profit. However, net profit is expected to increase 23% YoY in FY24 on low base.
• Kaken is not expected to see any immediate respite as the contribution from the new products will not compensate for the revenue loss from its top selling products.

• Strong Q2 results with revenue +42% yoy versus +33% in Q1
• Gross margin expansion to 51.3% on improving AI algorithm performance
• Stock down around 20% over past couple of months, No change to bullish growth forecasts.

• IDFC First Bank is now at USD7bn market cap, and it will now be seen by more than before
• Net interest income rising from INR27.5bn to INR37.5bn is amongst best in India banking
• Credit metrics improving dramatically, but credit costs have yet to trail lower – to come

• Sindoh Co Ltd (029530 KS) is the 24th company in our Korea Small Cap Gems series. 
• Sindoh has one of the highest net cash/market cap ratios in the entire Korean stock market. Net cash at end of 1Q 2023 was 226% of its market cap. 
• Sindoh’s operations turned around in 1Q 2023. It had sales of 105.5 billion won (up 26.6% YoY) and operating profit of 9.8 billion won (turned black) in 1Q 2023.

• We remain bearish on Sea (SE US) leading upto Q2 results on 15th August 2023.
• Our analysis suggests Sea Ltd could hit around $3.25bn revenue in 2Q23, in line with consensus. However, profitability could fall short of consensus expectations.
• Nonetheless, any downside stemming from a minor earnings shortfall could be rather limited given the existing low consensus and the lackluster price performance leading up to the Q2 earnings announcement.

• We turn to granular Pillar 3 disclosure of NAB seeing divergent moves in PD buckets
• Its worst PD buckets are seeing sharp rise, while best buckets are falling, flat-ish
• LT credit cost data, PD buckets, timely CBA data, suggests higher provision costs

• Share buybacks by primary listed companies 4 – 10 Aug 2023 Institutions were net buyers of Singapore stocks over the four trading sessions through to Aug 10, with S$136 million of net institutional inflow, with eight primary-listed companies conducting buybacks with a total consideration of S$7.7 million.
• The previous mandate saw the company buy back 14,250,100 of its shares which represented 2.12 per cent of its total number of issued shares (excluding treasury shares).

• In Q1FY24, Shionogi & Co (4507 JP) recorded 52% YoY revenue growth to ¥109B, reflecting a one-time payment received for the transfer of co-development and co-commercialization license for ADHD drugs.  
• Shionogi has reiterated FY24 guidance. The company expects FY24 revenue of ¥450B (up 6% YoY), operating profit of ¥150B (up 1% YoY), and net profit of ¥155B (down 16% YoY).
• Despite competition, Xocova captured a 60% market share of the treatment group patients in Japan. Over a six-month period since emergency approval, more than 70K patients have used Xocova.

• Hon Hai beat expecations by nearly 30% but reduced 2023E sales guidance. However, the company’s AI server business is expected to take market share and its EV business is developing.
• Asustek management provided some clarity on when AI PCs might turn from dream into reality — 3Q24E is when the company believes they will contribute significantly to sales volume.
• Himax reported some improvement in demand from China beleaguered automotive industry and said it expects its dominant global market position for automotive display drivers to continue.

• Ford Motor delivered an all-around beat in the previous quarter.
• With over $47 billion in liquidity at the end of the quarter, Ford Motor has sufficient funds for future investments.
• We give Ford Motor Company a ‘Hold’ rating with a revised target price.

• Mondelez International managed to surpass the revenue expectations as well as the earnings expectations of Wall Street.
• The company managed double-digit organic net revenue growth across each area, good pricing execution, decent profit dollar growth, and carried out considerable brand investments.
• We give Mondelez International a ‘Hold’ rating with a revised target price.

• Alibaba delivered a strong June quarter that beat consensus by a wide margin and across the board, showcasing an acceleration of recovery.
• The strong results were however clouded by China’s weak macro signals and investors’ lingering concern about China consumption of which Alibaba is commonly seen as a proxy.
• Alibaba trades at 9x our revised-up FY24 earnings. The most certain thing about Alibaba amidst all the uncertainties is it is getting cheaper and it is not a value trap.

• Paradise is one of the largest foreigners only casino operators in Korea which should benefit from the end of the ban of Chinese group tours to Korea.
• However, Paradise will face additional competition from the opening of the new Inspire Entertainment Resort in Incheon which is expected to open by the end of 2023. 
• Paradise is likely to benefit from a combination of higher earnings and valuation multiples in the coming months. 

• BABA reported CY2Q23 top-line and non-GAAP net profit 10% and in-line vs. our estimate, and 12% and 20% vs. consensus, respectively. Taobao/T-mall 3P, international retail, and DME beat our estimate.
• We suspect WeChat cooperation has been a main driver for increasing DAU of a cohort of previously untapped users. This also drove merchants to return to the platform.
• We maintain BUY and raise TP to US$ 120 to reflect (1) higher growth of Taobao/Tmall, and (2) improved profitability of most business groups.

• This is a quick profile of one of the many Japanese stocks that have caught my interest and are in my cheap Japanese basket.
• I’ll be doing more frequent short write ups on names in this basket over the coming months.
• Sapporo Clinical Laboratory is a $24m market cap operator of retail pharmacies and clinical testing facilities across Hokkaido, Japan. 

• THE first seven months of 2023 saw the iEdge S-Reit Index gain 3.9 per cent in total return terms, reversing its 11.9 per cent decline in 2022.
• This was followed by hospitality S-Reits with 5.8 per cent average total returns, after being the best performing sub-segment last year.
• PLife Reit declared a distribution per unit (DPU) of 7.29 Singapore cents for H1 2023, representing an increase of 3.3 per cent year on year.

• Bukalapak continues to demonstrate the effectiveness of circular nature of its business model in 2Q2023, with demand from its O2O business fueling growth in its marketplace, creating a flywheel effect.
• Although TPV growth slowed slightly in 2Q2023, revenues saw much stronger growth, especially its marketplace business, which booked much higher take-rates driven by its specialty verticals, including gaming and gadgets.
• Bukalapak will continue to benefit from expanding take rates as specialty, such as AlloFresh feed in more SKUs and new verticals gain traction. Valuations remain attractive on 0.85x FY2023E EV/Sales.

• Adi Sarana Armada remains an interesting way to play the used car theme in Indonesia with its leading car leasing business fuelling used car sales.
• The company continues developing its logistics capabilities, thrusting towards B2B and value-added cold chain logistics. Anteraja has slowed along with e-commerce but is more focused on profitability. 
• Adi Sarana Armada continues to benefit from synergies across its vehicle ecosystem through leasing, auction and used cars. Valuations are attractive with the company trading on 11x forward PER. 

• Recent share-price declines in healthcare is mainly related to anti-corruption campaigns. Here’re some updates.We recommend investors not to rush to buy the dip, but wait for the bottom.
• We recommend A-share healthcare companies to buy back shares/increase dividends, in which case, despite slowing growth, A-shares are still the RMB-asset with the greatest potential for increases in expected returns.
• CanSino Biologics (6185 HK) has entered a Framework Agreement with AstraZeneca, but investors should not be overly optimistic about the short-term or even medium-term performance contribution brought by this cooperation.

• Ford Motor Company’s recent selloff likely provides a lucrative entry point.
• Ford’s robust second quarter earnings paired with a positive output gap in the U.S. speaks volumes.
• Ford possesses high-quality characteristics, lending it the latitude to blossom as credit spreads recede.

• Asustek and Acer recently reported 2Q23 results with both companies showing a rebound in margins and normalized inventory levels. The cycle trough is clearly past.
• Asustek expects to grow its server product revenue by 500% by 2027 and is also developing AI PCs that could generate a significant sales volume by 3Q24.
• The latest results and comments not just make a coming PC up-cycle clear, but also imply that it could be stronger than previous cycles thanks to AI PCs.

• Rainbow Children’s Hospital (RAINBOW IN) recorded 21% YoY revenue growth in Q1FY24 to INR2.9B, driven by increase in pediatric surgical cases and deliveries, and addition of new bed capacities.
• Lower occupancies in new hospitals and higher expenses impacted profitability. In Q1FY24, EBITDA margin declined 407 bps YoY to 30.5%, while net profit margin contracted 190 bps YoY to 14.4%.
• The company will add 270 beds in the current financial year. By FY27, RCML aims to increase its bed capacity by 56% to 2,585 from current bed capacity of 1,655.  

• Roku Inc. managed to surpass the revenue expectations as well as the earnings expectations of Wall Street.
• The company demonstrated growth in scale, engagement, and platform revenue.
• Roku’s TV streaming platform and its innovation and scale continue to attract users, advertisers, streaming services, and content owners.

• Eastman Chemical Company delivered a mixed result in the recent quarter, with revenues below market expectations, but it managed to surpass the analyst consensus in terms of earnings.
• Despite signs of improvement and expectations for lessening destocking in the upcoming quarters, these challenges reduced the company’s earnings outlook for the rest of the year.
• We give Eastman Chemical Company a ‘Hold’ rating with a revised target price.

• Himax reported 2Q23 results — Showing a previously-guided margin drop due to the one-off impact of the exit from long-term capacity commitments.
• Positive developments — Inventory levels improved further, China’s automotive industry demand is rebounding from lows, and the company should maintain its already-dominant market share in automotive display drivers.
• Long Himax — Himax continues to represent structural exposure to dramatically increasing display content in vehicles. The stock’s previous all-time high is double the current level.