Equity Bottom-Up

• The recent spike in the share price has discounted the positive scenario for sales and earnings, which is represented by management’s guidance for FY Mar-24.
• The negative scenario – weaker than expected foundry demand, tougher than expected restrictions on exports to China – implies a significant downward revision to that guidance.
• The share price is up 77.5% year-to-date and 36% since the end of April. That should be enough for now. 

• Shanghai Pharmaceuticals Holding (2607 HK) reported 16% YoY revenue growth to RMB66B in 1Q23, driven by 17% YoY growth in pharmaceutical service segment, which contributed 88% of revenue.
• During the quarter, the company recorded net profit of RMB1.5B, up 21% YoY. Net margin expanded 9bps to 2.29%, driven by margin expansion in pharmaceutical manufacturing segment.
• Consolidating position in pharma distribution business, surging pharmaceutical manufacturing business, late-stage innovative drug pipeline, and accelerating internationalization strategy enhance conviction on SPH’s ability to maintain double-digit growth through 2025.

• Amvis Holdings Inc (7071 JP) recorded 42% revenue growth to ¥14.7B in H1FY23, driven by 33% increase in bed capacity and stable utilization rate. Operating profit grew 37% to ¥3.9B.
• The company has guided for FY23 revenue of ¥30.7B (+33% YoY), operating profit of ¥7.9B (+28% YoY), and net profit of ¥5.4B (+26% YoY).
• Amvis announced plans to open 16 facilities, steadily progressing to achieve the target of opening 23 facilities in FY24. The company targets utilization rate of 82–85% for existing facilities.

• BILI reported 1Q23 revenue/non-GAAP net income (4.2%)/in-line vs. our estimate, but BILI’s suggested 2Q23 revenue and gross margin are (10%) and (3.5ppts) lower vs. our prior est.; 
• Gaming will be BILI’s major swing factor.  Although BILI indicated that 2Q23 gaming revenue could decline 10% YoY, we expect that gaming revenue will still grow 6%~ YoY in 2023.; 
• We maintain SELL rating and cut TP to US$ 14.1. 1Q23’s earning indicates that BILI’s cost saving measures have led to declining MAU.

• IWI held an in-person briefing for 3Q FY23/6 results on Friday, May 12 at the Securities Analysts Association of Japan Kabutocho Heiwa Bldg. Annex 3F, which was also livestreamed via IR.
• Stock Investment Information portal site Bridge Salon.
• In SIR’s opinion, this 3Q results presentation hosted by IWI’s CEO and Representative Director Kunimitsu Sato was the most upbeat since he assumed office in Sep-2020. 

• Despite a recovery in Chinese retail sales, JD.com’s revenue growth slow-down has accelerated, losing market share to disruptive online competitors amidst ramped-up pricing pressure.
• Margin progression remains on track as JD.com refocuses on its core operations, optimizing its product mix and sales channels to improve operating efficiency.
• JD.com trades on only a 4.1x Dec-23f PE multiple when excluding its net cash balance sheet and associates at book value.

• Intel’s CFO boosted the current quarter outlook to the higher end of the guided range of $12 billion +/- $500 million
• Intel’s share price was up 4.8% in overnight trading, presumably a result of the forecast boost
• While Intel’s CFO thinks Intel is set to ride an AI wave, we think it will be more like riding a ripple across a rising tide that lifts all boats. 

• Despite the enormous demand for Black Pink concerts and the expected launch of the new girl-group band BabyMonster, we believe shares of Yg Entertainment (122870 KS) have overextended this year.
• Black Pink remains a fan-favorite group and their contribution to sales and profits are likely to peak this year. Valuations for YG Entertainment is also unattractive.
• Although BabyMonster is likely to become popular, the higher probability scenario is for them to fall below expectations. We do not believe BabyMonster could become the next Black Pink. 

For our next Corporate Webinar, we are glad to welcome BHG Retail’s CEO, Chan Iz-Lynn.

In the upcoming webinar, Iz-Lynn will share a short company presentation after which, she will engage in a fireside chat with Smartkarma Insight Provider, Osbert Tang, CFA. The Corporate Webinar will include a live Q&A session.

The webinar will be hosted on Tuesday, 06 June 2023, 17:00 SGT/HKT.

About BHG Retail REIT

Listed on Singapore Exchange Securities Trading Limited, BHG Retail REIT has a diversified portfolio of six retail properties strategically located in major cities in China, namely Beijing, Chengdu, Hefei, Xining and Dalian. BHG Retail REIT’s asset portfolio consists of community focused retail properties situated in high population density areas frequented by growing middle class professionals and families. Designed as lifestyle destinations, each multi-tenanted mall features a compelling mix of shopping, dining, education and entertainment establishments.

• BILI’s revenue grew by zero YoY in 1Q22, but operating losses shrank significantly.
• The company reduced the subsidies to video uploaders, so that uploaders have been leaving the app.
• We believe the stock has an upside of 13% for yearend 2023. Downgrade to Hold.

• Tenancy sharing growth is supported by 5G where Cellnex is well positioned to benefit from its leading market position within the European 5G ecosystem.
• New CEO starting on June 4th. Target: to deliver on organic growth, reach investment grade, improve free cash flow generation
• Remains a takeover target. Trades on a discount to peers

• Bilibili Inc (BILI US) ’s 1Q2023 top line growth remained flat (+0.3%) while cost control measures helped reduce losses. This marks the lowest quarterly revenue growth for the company since 2017.
• Mobile games revenue further decreased while Value Added Services (VAS) revenue growth dropped to 5.1% during the quarter, lowest ever for the segment.
• There was no disclosure on paying user numbers and we do not expect any significant recovery in top line growth over the next 2-3 quarters.

• Sawai Group Holdings (4887 JP) reported muted FY23 result, with all parameters missing guidance. Miss was due to the lower-than-expected performance in Japan, which contributed 82% of revenue.
• Sawai’s U.S. business revenue increased 22% YoY to ¥36.6B, beating guidance of ¥32.2B. The U.S. business is now back to profitability by reporting higher-than-expected operating profit of ¥930M.
• Sawai guided for 8% revenue growth in FY24. Core operating income is projected to decline due to the soaring raw material and energy prices and an increase in upfront costs.

• Most of the red flags that I have outlined before are now being taken care of, but I remain cautious for the time being.
• The market continues to react negatively to what was in my view a very good quarter, says Salesforce’s chief executive.
• A lot has changed since I first covered Salesforce (NYSE:CRM), back in December of 2020.

• Datadog had a good Q1 as they exceeded analyst expectations on all fronts, with revenue of $482 million, a 33% YoY increase, and added approximately 1,400 net new customers.
• The company observed growth from existing customers and continued to see customers optimizing their cloud spend.
• In addition, Datadog made significant advancements in its product offerings, introducing new security capabilities such as Application Vulnerability Management and enhancing its Cloud Security Management product.

• The potential spin-off listing of Alibaba Group (9988 HK) Cloud faces significant challenges from various factors, making the timing particularly challenging for the spin-off.
• The Cloud Business is experiencing intensifying price competition, while simultaneously facing substantial regulatory risks, particularly with the Chinese Government’s plans to nationalize the cloud computing market.
• Due to the ongoing price war and the potential risk of nationalization, we believe that Alibaba (ADR) (BABA US) Cloud’s fair value is substantially below $10bn.

• Mitra Keluarga (MIKA IJ) recently booked 1Q2023, where headlines did not reflect the true recovery of the core business given COVID was still a factor boosting last year’s revenues. 
• Non-COVID inpatient and outpatient volumes were up by +19% YoY reflecting the strength of the recovery as the environment normalizes but occupancy rates still have a significant upside.
• Mitra Keluarga has started to put foot-to-pedal in terms of expanding new hospitals and increasing capacity at existing hospitals combined with increased efficiencies. Valuations are attractive versus history.

• We tend to shy away from the restaurant industry but decided to make an exception for Tam Jai;
• The brand has become a household name in Hong Kong and delivers attractive business economics for owners from its home market;
• However, we see multiple red/yellow flags when it comes to the management’s capital allocation, particularly relating to overseas expansion.

• Perfect Medical Health’s (1830 HK) share price correction seems overdone. News that COVID cases are expected to rise to over 65 million a week by June in China: the culprit.
• The stock presents an excellent opportunity to invest with a 8.9%/11.8% FY23e/24e dividend yield and 20% of the market capitalization in cash. Such excessive pessimism in this name is unwarranted.
• Catalysts for the stock would be the FY23 March-end results to be declared on June 28th, 2023. 

• As projected, Nesco’s BEC business has completely normalized and clocked INR 45cr+ revenues in Q4FY23. With this, Nesco clocked FY23 PAT of INR 290cr+, well above our INR 250cr+ estimate.
• Alongside the BEC business, Nesco’s foods business has also seen significant recovery led by footfalls from the BEC. Independent of BEC also, Nesco Foods is growing significantly on its own.
• Nesco is on track to earn PAT of INR 320cr+ for FY24, suggesting that at the current market cap of INR 4250cr, it is valued attractively at 13x P/E.

• Water Oasis (1161 HK) H1 FY23 results were encouraging and a step in the positive direction as revenue/PAT improved by 27%/116% YoY ( although below our estimates by 10%/30%).
• The company paid a semi-annual dividend of 7 cents (9% annualized yield) for an 82% payout ratio. Net cash of 243 mn HKD represents 25% of market capitalization.
• The company has made several investments in new locations and spent heavily on advertising ( costs up 76% YoY); A positive inflection of trends will bear fruit in H2 2023.

• According to “Ophthalmology Drugs Global Market Report 2021: COVID 19 Impact and Recovery to 2030” issued by the Business Research Company in Feb-2021, the global ophthalmology drugs market is expected to grow from $22.03 billion in 2020 to $32.64 billion in 2025 (+8.2% CAGR).
• M&A in this segment has become active in recent years, with global eye care leader Alcon (SIX/NYSE:ALC) acquiring DWTI’s closest rival in the US, Aerie Pharmaceuticals, Inc. in Nov-2022, adding Rhopressa® (similar to DWTI’s GLANATEC®) among others, and Aerie’s development pipeline.
• Over time with progress in execution of the development pipeline, and as part of growth strategy to diversify revenue streams, DWTI’s basic business model of drug discovery and early out-licensing has evolved to include 1) from 2015, in-licensing of later stage development products, 2) from 2018, collaborative drug creation applying DWTI’s technical expertise to assist in joint R&D of products of other firms, and 3) from 2018, extending development of original in-house products beyond early out-licensing as far as proof of concept (PoC) through Phase IIb.

• S&P has raised Naturgy Energy Group SA (NTGY SM)‘s credit outlook from negative to stable considering that the company may not finally carry out the Gemini spin-off project.
• Naturgy’s shares do not trade on fundamentals, rather on expectations that IFM tries to increase its stake (free float is just 15%). There’s some potential overhang risk though.
• IFM has not acquired any significant stake since April, but I would not short the shares as IFM could resume share purchases on an opportunistic basis.

• Kolte Patil delivered on the optimistic expectations for Q4FY23 which led to a stellar close for FY23 with all-time-high pre-sales and robust deliveries.
• Its flagship project, Life Republic, was at an inflection point as outlined in our original thesis. It contributed immensely in FY23 and is now all set for accelerated growth.
• Despite high base of FY23, Kolte Patil is all set to post a strong FY24 with 25% pre-sales growth, led by new launches and strong sustenance sales.

• The biggest expectation on CARsgen is to break through solid tumor technology (from zero to one).However, it depends on the choices of doctors/patients to see how much clinical benefits would be.
• The investment value of CARsgen has been transferred from R&D progress of pipeline to its future commercialization outlook/market potential, which however, are the major concerns that investors have for CARsgen.
• Due to “practical obstacles” in the application of CAR-T therapy, CARsgen’s commercialization prospects are still vague. Share price could remain weak, but its valuation should be higher than JW Therapeutics. 

• Investment levels in BYD Company Limited H Shares have reached record highs among active Emerging Market funds.
• On a fund level, between 10/31/2022 and 04/30/2023, 22 funds opened new positions in BYD, led by Vontobel MTX Sustainable (+2.4%) and Putnam Emerging Markets (+1.95%).
• BYD has risen up the ranks to become the most widely held and largest weight in the autos sector, surpassing Kia Corp and Mahindra & Mahindra over the last 2-years.

• 1Q massive beat was driven by TEMU, higher-than expected take rates and other income, in order of importance. 
• We remain confident PDD’s China online marketplace business will face increasing growth headwinds, but also acknowledge that TEMU has been growing on track with lower-than-expected losses.
• Earnings growth from PDD’s domestic business will be largely offset by losses incurred by TEMU for 2023. Strong 1Q has not fundamentally changed deceleration trend of full-year bottom-line growth trajectory. 

• We are bullish on KHI and see around 40% upside for the share price
• Over the next two years, we expect strong profit growth on recovery in aircraft parts, jet engines and military equipment
• KHI is likely to be a key beneficiary of the Hydrogen economy and is well placed to build a new earnings driver over the next decade

• Canon was late to market with its 193-nm immersion litho tool developed in 2007 causing it to cede the leading-edge litho race to ASML and, to a lesser extent, Nikon
• The company has been working on NanoImprint Lithography as an alternative to EUV since 2004 & was supposedly fast tracked by the acquisition of Molecular Imprints in 2014
• Commercial launch was originally slated for 2015. We’re still waiting. Why?

• Medtronic Plc (MDT US) reported 6% YoY revenue growth to $8.5B, ahead of expectations, driven by procedure volume recovery, supply improvements, and innovative product introductions.
• Medtronic intends to acquire Korea-based Eoflow (294090 KS), manufacturer of a tubeless, wearable, full-disposable insulin delivery device, for $738M. The transaction is expected to close in 2H23.  
• Medtronic guided for FY24 adjusted EPS of $5.00–5.10, including ~6% unfavorable impact from Fx. The company forecasts 4.0–4.5% organic revenue growth in FY24, accelerating from 2.1% in FY23.

• On May 4, GOLFTEC announced the launch of “SkyTrak+,” a premium version of the award-winning and No.1 best-selling consumer launch monitor, now offering tour level accuracy and performance at a price that is still only a fraction of the top-ofthe-line commercial-use product.
• Having largely completed the integration of SkyTrak business during the 1Q, the GOLFTEC ANYWHERE initiative is now going into full swing.
• Since our 4Q FY22/12 Follow-up Report, GDO’s share price has declined another 12.7%, the decline from the peak now equal to the -64% seen in the case 1 shown below. 

• NFC Indonesia (NFCX IJ) provides exposure to Indonesia’s O2O ecosystem as a technology-driven digital product aggregator, FMCG supplier, and advertiser covering modern trade, general trade, and e-commerce. 
• The company provides screen-based iCloud-enabled indoor advertising across mini-markets and increasingly for general trade. This provides a high-margin recurring income base which only currently covers 50% of mini-markets currently.
• NFCX is the current leader in the 2W EV market in Indonesia through its Volta brand, with the most extensive battery swapping buildout, and with further capacity expansion to come.

• Schrole Group Ltd (ASX:SCL) is an Australian software company focused on providing human resource technology solutions to the international education and training sector.
• Schrole has developed a suite of five HR Software-as-a-Service (SaaS) offerings including the core product, Schrole Connect, a SaaS-based staff recruitment platform.
• Schrole Group has held its CY22 annual general meeting in Perth, noting that it has an ambition of reaching a 25% share of the international schools’ HR SaaS market in the medium term. 

• LICHF reported a strong Q4FY23 with a PAT of INR 1180cr. This takes the FY23 PAT to INR 2891cr, well above our estimate of INR 2700cr.
• Asset quality worsened as Stage 2 assets increased to 5.25% vs 3.92%. However, this is temporary due to one-off interest rate hike related technical issues in EMI payments.
• LICHF has guided for a strong FY24, led by margin expansion and AUM growth. As credit costs remain benign, profitability should jump significantly.

• Nvidia’s CEO is in Taiwan this week for Computex and the company continues to dominate the headlines announcing Mediatek, Softbank, and WPP key partnerships.
• Semiconductor shorts have been squeezed after the global rally sparked by Nvidia’s monster results; We released our latest Taiwan Shorts Monitor to identify short squeezes.
• Earnings: Light this week for Taiwan, however PC industry leaders Hewlett Packard Co (HPQ US) and Dell Technologies Inc (DELL US) will report.

• In 1Q23, total revenue grew by 58% YoY and the operating margin improved to 18% versus 9% in the same period last year.
• We believe the company benefited from its low-price products and the low comparison base last year.
• We conclude the stock has an upside of 40% and a price target of US$100.

• The street is excited about Zomato (ZOMATO IN) ‘s profitability, we are not.
• Zomato’s execution is strong, driving improved profitability despite the margin-dilutive Gold offering.
• Caution warranted due to market dynamics: slow growth, margin pressure, and increased competition.

• Investors in the U.S. market seem to be having a more bullish outlook towards U.S.-listed semiconductor names than investors are having for Taiwan’s semi names so far.
• Stocks with highest short interest as % of float — Some of the top names squeezed… Is HTC next? Also can consider Long Wiwynn vs. Short Wistron.
• Highest short ratios — Asus, UMC, Transcend shorts squeezed… Could WPG be next? Also can consider continuing Long Asus vs. Short Acer.

• Indocement overperformed the overall Indonesian cement market in 1Q2023 in terms of growth, especially in the bulk market, where it also benefited from the contribution from its Maros plant. 
• The company kept costs under control with 100% use of DMO coal during 1Q2023 despite the lower use of alternative fuels due to heavy rains and margins consequently improved. 
• There is still some lingering cost pressure from gypsum and kraft paper but these are expected to subside by 2H2023, with Indocement’s volumes expected to increase +15-20% as demand recovers.

• Jeisys Medical (287410 KS) recorded 15% YoY revenue growth in 1Q23, mainly driven by a 25% YoY growth in consumables due to the increasing number of aesthetic procedures globally.
• As of 1Q23, cumulative sales of two major devices of Jeisys, LinearFirm/LinearZ and Potenza reached 3,411 and 2,431 units, respectively. Expanding installed base should further drive consumables revenue growth.
• Jeisys has launched a new device in domestic market and Japan in current quarter. The company aims to accelerate growth momentum through entry in to new market, including China.

• Universal Entertainment and Dynam Japan bave moved off total dependence on pure historic pachinko revenue flows as total market continues to slide.
• Universal’s move to the casino sector as a core profit center and Dynam’s strong hall closure strategy are keys to future of the sector.
• Dynam has been fighting off inflationary headwinds in opperating costs of their halls and sharp depreciation of equipment responsible for profit decline.

• PDD Holdings Inc (PDD US) shares rose 19% on last Friday following 1Q23 revenue of RMB 37.6bn (consensus: RMB 31.9bn) and OP of RMB 6.9bn (consensus: RMB 5.0bn).
• The declining margin trend is a significant concern as Pinduoduo won’t appear cheap if margins fall short of expectations.
• Meanwhile, the existence of Temu could be at risk if the US government takes measures to address the De minimis loophole.

• Unchanged outlook commentary versus February 23 results commentary: QIP expects continued organic growth and  underlying EBITDA margin improvement.
• Increased sense of urgency around transformation programme execution with IP management platform upgrades and redundant data centre commissioning scheduled in coming months.
• Reiteration of EBITDA margin target of low 30s medium term versus  c. 27% currently.

• Besides COLI, we also like CRL, being another SOE play (no bankruptcy risk), with dual growth engine from residential development business and shopping mall business
• Major share price drivers includes its contract sales trend, retail sales, rental performance as well as property policy from government
• CRL is trading HKD30, there is no placement risk until it trades at HKD HKD39 (P/B =1x).  We recommend buying if stock trades <HKD35 as a technical indicator

• Q1’23 revenues of $7.19 billion, down 13% from a year ago but up 19% sequentially and ~10% higher than the guided midpoint.
• Current quarter outlook for revenues of $11 billion, a ~55% sequential increase, sparked mayhem in the markets and sent NVIDIA’s stock soaring over 24% in after hours trading
• Don’t go chasing waterfalls, there are many other ways to rise with the tide

• The recent discrimination incident will likely affect traffic recovery pace of Cathay Pacific Airways (293 HK) negatively if it turns into a full-scale boycott by mainland passengers.
• The scenario of CX becoming majority-owned by Air China Ltd (H) (753 HK) is getting increasingly possible. This may not be totally positive to CX given CA’s weaker service ranking.
• Consensus forecasts now look somewhat bullish following the incident, and the stock’s 0.7x P/B does not stand out as attractive relative to history or ROE (7% in FY25F).

• The semiconductor stock rally in the U.S. caused by Nvidia’s monster results and guidance last week has caused multiple ADR premiums to surge to near all-time highs.
• TSMC and UMC’s ADR premiums don’t appear sustainable given their trading history.
• Telecom CHT wasn’t affected by the Nvidia rally and now has one of the lowest ADR discounts in its history.

• In this insight, we explore the investment thesis and major share price drivers for 688 HK
• COLI saw share price weakness, and is trading at 0.46x P/B.  Potential risks are 1) fail to meet 20% growth target 2) slower than expected land acquisition
• We see value emerging from the stock, and recommend BUY as long as the stock trades below HKD20 (as a technical indicator)

• New Horizon Health (NHH) achieved high performance growth last year. However, we recommend investors take a calm and objective view of NHH’s current high growth rate if they see the real story.
• NHH’s dual attributes of medical+consumption means large growth potential/strong profitability. Thus, the real expectation for NHH is not just about achieving breakeven, but more about how to achieve high profitablity.
• If market education level falls short of expectations in the future, it’s difficult for NHH to achieve expected scale/profit margin. There would be greater valuation downward risk at that time.

• SPACs are often synonymous with high-risk, cash-intensive early-stage companies making their public debut, but occasionally, a SPAC deal like CCC Intelligent Solutions emerges and shifts the narrative.
• CCC is a SaaS business with four decades of operational history in the property and casualty insurance sector that went public through a SPAC in 2021.
• Over the company’s history, it has processed over $1 trillion in transactions for 30,000 businesses.

• Legacy concessionaire SJM needs a strong performance from its Cotai flagship to create positive cash flow to service debt and keep gains in mass market share.
• The company has closed 5 satellite casinos, a move that indicates a shift in strategic goals aimed at building out from its two IRs.
• Thus far, SJM has not fully participated in the  early Macau recovery cycle to make it a BUY but it needs to build on its 81% of mass revenue.

• The 9th national VBP is drawing near. As all drugs under national/provincial VBP are scheduled to be executed before 2025/12/31, there should be new policies in 2026 and beyond.
• The capabilities of Chinese pharmaceutical companies in ADC field have at least stepped onto a platform to compete with international giants, which is clearly more progressive than during PD-1 era.
• We analyzed key points of Ovctek. Its investment logic has changed and centralized procurement will break investors’ expectations for Ovctek’s future performance growth. Valuation may continue to be under pressure.

• Rajshree Polypack’s (RPPL’s) Q4FY23 came in weaker than expected on both the sales volume and the margins front. Higher depreciation and interest costs led by capex further dampened the profitability.
• However, RPPL is executing well on its revenue growth targets led by regular capex led investments. It is on track to do INR 450cr revenues by FY25.
• RPPL has potential to post a PAT of INR 30cr+ by FY25, suggesting that RPPL is available at around 6x P/E on a base of FY25E PAT.

• It was a mixed first quarter for Textron as the company failed to meet the revenue expectations of Wall Street given the lower revenues observed at Bell.
• Despite the Aviation, Industrial, and Systems segments offsetting the decline, Textron’s revenues were below expectations though it did manage an earnings beat.
• Textron Aviation received an initial award on the US Navy Multi-engine Training System contract, and fleet utilization remained strong, contributing to aftermarket revenue growth.

• International Paper had a challenging start to 2023 as its revenue was slightly down though still above analyst expectations.
• International Paper reported $65 million of year-over-year incremental earnings benefits from building better IP initiatives, but lower prices across their portfolio and weaker demand impacted margins.
• Despite these challenges, International Paper remained focused on their key priorities of taking care of employees, customers and maximizing shareholder value.

• Q1 was a challenging quarter for Cloudflare as the company failed to meet the revenue expectations of Wall Street as a result of various the headwinds.
• However, macroeconomic uncertainty lengthened sales cycles and affected close rates, resulting in a back-end weighted quarter.
• Despite these challenges, Cloudflare remains resilient and profitable, with an operating profit of $19.4 million and generating $13.9 million of free cash flow.

• First Solar had a very disappointing result in the last quarter as it failed to meet the revenue expectations as well as the earnings expectations of Wall Street.
• With their CadTel technology, vertically integrated manufacturing process, and commitment to Responsible Solar, First Solar could stand out from competitors and maintains long-term competitiveness.
• The recent acquisition of the European perovskite company, Evolar AB was also a part of the expansion strategy.

• Meituan (3690 HK) ’s 1Q2023 earnings beat consensus estimates and the key highlight was the company turning into adjusted operating profits after two years.
• Revenue from Core local commerce continued to see strong growth in earnings though we expected growth rates to decline with pandemic conditions easing off.
• Meituan has launched its food delivery app “KeeTa” in Hong Kong which is dominated by Foodpanda and Deliveroo.

• We add value play Bank of Baroda to the peer group, and to our buy list; we also add liquidity and funding screens and a PEG ratio valuation metric
• We keep HDFC Bank as our higher quality bank, with its strong balance sheet, especially on NPA coverage, and further positive momentum from the upcoming HDFC merger
• We remain negative on State Bank of India, and we are also cautious on ICICI Bank; Axis bank remains a name to watch, although valuations are far from compelling

• GoTo released a Newsletter for May which reiterated its progress toward profitability as well as some key initiatives including increasing service fees and expanding use cases for GoPay Coins rewards.   
• The newsletter also highlighted the release of the Annual Report and its Sustainability report, which are both important documents for longer-term and increasingly ESG-focused investors. 
• GoTo also highlights a report from the University of Indonesia regarding the company’s socioeconomic impact in the country, which remains huge given its socio-economic reach through ODS and Tokopedia. 

• The chip industry is seeing two “transitions” Intel is being phased out with the GPU shift, according to the company.
• The company is also expected to be phased out of the chip industry with the next generation of processors.
• The chip company is expected to have a new generation of chips in the coming years.

• Classys (214150 KS) reported solid performance in 1Q23, with double-digit revenue growth, driven by expansion of domestic consumables sales for Shrink Universe and growth in overseas device and consumables sales.
• Operating profit increased 19% YoY to KRW 19.9 billion, leading to 380 basis point margin expansion to 51%. Net profit increased 46% YoY to KRW 18.8 billion.
• Classys continues to strengthen its competitiveness through product line and geography expansion. The company has reiterated 2023 revenue guidance of KRW170 billion, representing year-over-year increase of 20%.

• NetEase reported in-line revenue for 1Q23, while non-GAAP net income exceeded our estimate by 22%. 
• <Justice Mobile> is set to launch by the end of June. We anticipate that investors may need to wait for some time after June for NetEase’s next potential hit title. 
• Maintain a BUY with TP unchanged, implying 18X PE in 2023.

• The Mosaic Company had a mixed quarter with revenues of $3.6 billion that were above Wall Street expectations but the company missed out on earnings.
• While supply issues are still a worry, this is drawing growers back to the market.
• We give The Mosaic Company a ‘Buy’ rating with a revised target price.

• Eli Lilly is off to a mixed start in 2023, with volume-driven revenue growth led by its incretin portfolio, Verzenio and Jardiance.
• The new product category delivered $574 million in sales, while the new product and growth product categories together contributed 20 percentage points to volume increase.
• We give Eli Lilly and Company a ‘Hold’ rating with a revised target price.

• Domino’s Pizza had a mixed quarter.
• The company’s revenues were below Wall Street expectations but its operating income margin increased by 100 basis points year-over-year resulting in an earnings beat.
• In the first quarter, Domino’s international company opened 143 new stores while closing 37 others, totaling 106 net new stores.

• DexCom had a strong quarter and managed an all-around beat with strong organic revenue growth of 19% compared to last year.
• The company’s momentum in global CGM adoption remains high, driven by the growing recognition of the unique experience DexCom provides.
• The launch of their G7 system has been met with enthusiasm, supported by a successful Super Bowl commercial that generated significant engagement and awareness.

• Nvidia’s results and guidance sparked a massive rally in the shares, marking one of the largest single-day increases in market cap in U.S. stock market history.
• The company sees a multi-year growth cycle of data center upgrades ahead. Key supply chain partners TSMC and ASML are rising as well.
• Wiwynn in Taiwan should be a key winner. We also highlight a potential wildcard smallcap AI play that we will investigate further.

• Q1’23 revenues of ¥764 billion, up 15% YoY and 2.6% QoQ
• FY2022, revenues grew by 13.2% to ¥2,859 while net income grew by 3.9% to ¥219.4.
• Electronic Materials set to grow from ¥180 billion in ’22 to ¥500 billion by ’30

• Berli Jucker‘s 1Q2023 results were driven by growth across its segments from modern retail to packaging to the consumer, and healthcare & Technical, with margin improvements at the same time. 
• The key near-term catalyst for Berli Jucker will be the IPO of Big C Retail, which will provide a separate market valuation for its retail assets. 
• Berli Jucker is a beneficiary of the resurgence of tourism in Thailand through both its retail and packaging businesses plus it benefits from lower commodity prices across its other divisions. 

• In 1Q23, total revenues grew by 27% YoY with all business lines up by more than 10% YoY.
• The real operating profits turned positive after nine quarters’ losses.
• We believe the stock has an upside of 35% for yearend 2023. Buy.

• In this Insight, we review the recent performance of ABB India Ltd (ABB IN) , Siemens Ltd (SIEM IN) , Polycab India (POLYCAB IN) and Havells India (HAVL IN). 
• ABB posted a strong start, SIEM has a black dot with respect to its recent sale of subsidiary. POLYCAB continues to perform, and HAVL is back to capex mode. 
• Our picks remain the same, ABB instead of SIEM, POLYCAB instead of HAVL.

• XPeng reported soft 1Q23 results, with topline of RMB 4.03bn, missing cons by (4.4%); GPM of 1.7% missing cons. and our est. by (4.5ppt)/(4.8ppt. 
• The 2Q23 guidance implies a QoQ recovery of 15.2%-20.7%, thanks to increasing order intake of the all-new P7i and recent channel transformation. 
• We maintain BUY. We cut TP to US$ 10 due to pressure amid intensified competition.

• VIPS reported C1Q23 top-line, GAAP operating profit, and non-GAAP net income 6.6%, 27%, and 31% vs. our est., and 5.6%, 20%, and 36% vs. cons.; 
• We expect VIPS profitability to remain steady given its relative immunity to competitor price competition, mainly due to its high apparel exposure, high member loyalty, and differentiated product sourcing strategy; 
• Given improving apparel demand and EPADS on share buy-backs, we maintain BUY and US$ 16.3 TP, implying 8.1x 2023 non-GAAP P/E.  

• Xiaomi reported C1Q23 top-line and non-IFRS net income (6.9%) and 20.7% vs. our est., and in-line and 39.9% vs. consensus; 
• We suggest that higher margins are transitory, as (1) key IC component prices may have bottomed, (2) EV spend is likely to ramp up further. 
• We maintain SELL and HK$ 8.2 TP, implying 26x FY23 PE.

• 1Q operating profit rose 18%, on a 19% rise in sales. Net profit rose 10%.
• According to the company’s data, the pace of increase in orders has been increasing since around the last week of 1Q, indicating a potential for stronger results in this FY.
• Management Consulting business sales rose 14%.

• Futu reported 1Q23 revenue 12.7%/14.8% higher than our est./cons., non-GAAP NI 21.2%/19.5% higher than our est./cons., mainly due to strong margin financing and security lending activities during volatile market; 
• Futu’s operation and client trading behaviours remain steady in 1Q23 after the implement of rectification measures from regulators. 
• On the other side, overseas expansion in Japan and Malaysia may start to kick-off in 2H23; We maintain BUY rating on FUTU and maintain TP at US$51.