Equity Bottom-Up

• Travelsky Technology Ltd H (696 HK) is the IT provider for airports in China thus it should be one of the stocks to benefit from China’s reopening.
• Despite already operating at a profit, the share price is still lagging behind the other travel-related names that are still loss-making.
• Its operating numbers have already reached the 2019 level, a pre-COVID era, thus the opportunity to rebound is abundant. 

• Melco shares have been hammered worse than peers during covid having fallen as low as a range ~US$4. Other factors contributed to downside, since eliminated.
• 1Q23 earnings release shows strong recovery arc in progress both in Macau and Manila.
• With two markets firing and a third ready to open we see an attractive entry point here.

• Since we released our piece suggesting closing our original Long Asustek vs. Short Acer, and reversing to Long ACER vs. Short Asustek, this new trade has earned a 6.9% spread.
• Given the latest performance between the two shares and the latest results from Asustek, we believe one can now close out Long Acer/Short Asustek… and reverse the trade again.
• Hence we now like Long Asustek vs. Short Acer based on relative share performance and latest guidance from Asustek.

• With the launch of new products and their accelerated admission to hospitals, Acotec’s revenue streams become more diversified, which would enhance its own risk resistance ability and core competitiveness.
• Considering market size/increasing competition, Acotec’s growth ceiling is obvious if relies solely on domestic market. It becomes crucial whether Boston Scientific’s acquisition would bring expected value or have other intentions.
• How much room for improvement in future valuation depends on Acotec’s performance in overseas markets. After all, if there is no internationalization breakthrough, Acotec’s valuation logic would not be reshaped.

• We find good value in Jiangsu Expressway (H) (177 HK) – its 8.3x PER is cheap relative to 10.4% EPS CAGR and P/B multiple of 1.06x is below historical average.
• It has an extremely secured dividend stream for the next two years, yielding at least 6.3%. 1Q23 result showed a solid recovery, and potentially adding upside to earnings outlook.
• Key drivers are stronger traffic recovery, rise in contribution from clean energy, margin expansion through cost control and completion of new projects in the next two years.

• This week is relatively in terms of earnings. Applied Materials (AMAT US) will however be reporting on the 18th U.S. time.
• Hon Hai sees the PC market bottoming; Separately, we’ve closed our Long Acer vs. Short Asus and reversed it to Long Asus vs. Short Acer again.
• Quant shares have surged post results, dramatically outperforming Apple and other key Apple suppliers.

• Cisarua Mountain Dairy booked a solid +25% YoY growth in sales in 1Q2023, with a flat performance from dairy from a high base but very strong consumer foods growth. 
• Powdered milk prices and packaging costs have started to decline which will help to boost margins as the year progresses since Cisarua Mountain Dairy bought forward last year.
• Cisarua Mountain Dairy is an increasingly interesting consumer proxy catering to Indonesia’s middle classes but increasingly focusing on the less affluent mass market as it grows distribution in general trade.

• 2023 is a crucial year for Zai Lab.It’s the first time for Zai Lab to demonstrate the profitability of license-in model.If it fails, investors would lose confidence in the company.
• There is little correlation between the four commercialized products, which makes commercialization difficult and leads to low efficiency/high costs for sales team. So, breakeven could be more distant than expected.
• Zai Lab’s current pipelines are hard to make money. There are concerns whether its business model is sustainable in the long term. As its valuation lacks an “anchor”, risk is high.

• Q1’23 revenues of NT$ 102,376 million, down 13% QoQ and down 20% YoY
• Forecasting PC segment +20% but Components segment -5% QoQ in Q2’23 
• Outperforming both peers & the market with >50% revenues now coming from gaming…

• In our view, Hon Hai 3Q23 results showcased stability for 2023E ahead of expected growth in 2024E-2025E.
• The company has maintained its 2025E 10% gross margin target and highlighted how its EV business expansion is continuing.
• While Consumer Electronics revenue is expected to fall this year, PC Products is expected to grow given the company believes the PC market has bottomed. Stay Long Hon Hai.

• There are three main ways for Chinese pharmaceutical companies to enter global markets, but the results are completely different. Investors are advised to make cautious judgments based on different cases. 
• Speed is a crucial factor in the competition for drug development, but there’re precedents in history that late-comers are still able to turn things around, such as GLP-1/weight loss drugs.
• We remain conservative about the future commercialization performance of Bio-Heart’s BRS and Iberis 2nd. However, the product launch is a catalyst for share price, which provides a good short-term trade opportunity.

In this upcoming flash webinar, Insight Provider Travis Lundy will discuss the recent privatisation offer from SBI Holdings (8473 JP) for SBI Shinsei Bank (8303 JP). Japan’s SBI Holdings Inc said last Friday that it would take SBI Shinsei Bank private by launching a 154.2 billion yen (US$1.14 billion) tender offer, at 2,800 yen per share. Travis will go over the background and opportunities ahead of Monday’s Japan trading hours.

The Webinar will be hosted on Monday, 15 May 2023, 07:30 SGT.

Travis Lundy has 20+ years of experience in Asia doing alternative strategies (i.e. non-delta1 non long-only) in fixed income, equity derivatives, and activist/catalyst/event-driven and long-short equity strategies, with most of that time spent managing money.

• Takeda reported FQ4 and full-year FY03/2023 results. Reported revenue increased 9.5% YoY to ¥956.2bn (vs consensus ¥938.6bn) and OP of ¥88.6bn (vs consensus ¥144.5bn) vs an operating loss in 4QFY03/22.
• Full-Year revenue and OP increased 12.8% and 6.4% YoY to ¥4.0trn and ¥490.5bn respectively. While reported revenue beat guidance and consensus, OP fell slightly below these two.
• Takeda Pharmaceutical (4502 JP) ’s FY03/2024E guidance is too conservative as we think that the company has been careful not to disappoint investors if it fails to meet its own target.

• JD reported 1Q23 revenue in-line vs. cons., while non-GAAP net income beat cons and our est. 99% and 74%, respectively.   
• It’s early to say whether JD is getting out of the puddle, as (1) revenue grew just 1.4% YoY in 1Q23,  (2) the effect of its management change remains uncertain.
• We maintain SELL, but raise JD’s 2023 non-GAAP net margin from prior 3.2% to 3.34%, and raise TP to US$ 30.  

• JDHealth (JDH) reported C1Q23 top line and non-IFRS operating profit 56% and 78% of our C1H23 estimates. 
• We now take a more positive view on JDH’s ability to at manage the issue at certain periods and certain areas;
• We raise TP from HK$44 to HK$57 and rating to BUY. Possible risks include renewed margin pressure from prescription drugs

• Q1’23 revenues of ¥109.9 billion, better than forecasted, down 6.4% QoQ but up 10% YoY.
• Q2’23 forecasted flat sequentially, no full year 2023 forecast provided
• There’s a major headwind looming on the horizon for the broader silicon wafer segment…

• 4QFY22 saw the best result for the Vision Funds since 3QFY21; SVF private companies saw minimal valuation write-downs last quarter, and we suspect valuations may still be too optimistically marked
• Masa’s debts to SoftBank stand at USD5.2bn in 4QFY22; in addition, the group’s credit risk exposure to troubled company WeWork was over USD1.1bn at fiscal year end and going higher
• Softbank shares trade at a 46% discount to the stated NAV; with the Alibaba valuation “cushion” largely consumed, the potential Arm IPO is critical but private company valuations remain questionable

• Cotti Coffee has become a head-to-head competitor of Mixue’s Lucky Cup, and to a lesser degree, Luckin. 
• But what is behind Cotti’s agenda, in our view, is its founder Charles Lu’s aspiration to return to Luckin;
• The biggest obstacle for Charles to repeat the playbook of Steve Jobs is Chinese security regulator’s refusal, so far, to allow franchised chain to list

• XL Axiata reported a robust set of 1Q2023 results as the competitive environment remains rational allowing it to raise prices, whilst its convergence strategy is starting to gain traction. 
• XL’s convergence penetration grew in 1Q2023 but the key announcement was that Link Net will become a pure fibre player whilst the retail element of fixed broadband will fall under XL.
• XL Axiata (EXCL IJ) has seen the MAUs for its digital platform reach 26m with increased user transactions and higher spending. Valuations remain attractive on 4.1x FY2023E EV/EBITDA.

• Dr. Reddy’s Laboratories (DRRD IN) announced mixed Q4FY23 result, with revenue beating consensus and net profit missing expectations. Both revenue and net profit grew YoY but declined sequentially.
• North America grew 27% YoY (but declined 17% QoQ) to INR25.3B, driven by new product launches, growing market share in certain existing products, and favorable Fx movement.
• Revenue from India business increased 32% YoY and 14% QoQ to INR12.8B, driven by favorable price variance, new product launches including acquired/in-licensed products, and non-core brand divestments.

• IMMR reported first quarter results reflecting the slowdown in smartphone shipments and the benefits of the Company’s investing activity
• Of the $150.3 million invested, at the end of March 2023, equity securities were $56.5 million of the portfolio compared to $53.3 million in December 2022
• IMMR’s legal pursuit of patent infringing parties could become an option on the current valuation of the stock

• We expect that Shopee is spending more in recent months to defend from TikTok Ecommerce’s growth; 
• Further, we see increased marketing to maintain <FreeFire’s> user base, especially in Indonesia; We suggest that SEA’s strong margin performance in 4Q22 was temporary. 
• We forecast that 1Q23’s net margin is 11.2% vs. 4Q22’s 17.9%. We maintain our SELL rating and US$ 62 TP, implying 27x FY23 P/E.

• JD replaces its CEO, Mr. L Xu, with the former CFO, Ms. S. Xu.
• As we expect, the revenue growth slowed down and the operating margin improved in 1Q23.
• We believe the stock has an upside of 92% for 2024.

• Li Auto reported solid 1Q23 performance, with top line in line with cons/our est., and non-GAAP net margin beating cons/our estimate by 4.0/2.7ppt. 
• We reiterate Li Auto as our top pick, because of 1) positive growth outlook in 2023 driven by strong model cycle (L9/L8/L7) and channel expansion; 
• 2) margin upside due to improved opex efficiency. Our TP implies 2.8x PS.

• Zai Lab (ZLAB) reported C1Q23 top line in-line with our estimate but operating/net loss much smaller than our estimate due to cut in R&D spending. 
• ZLAB’s narrower losses in C4Q22 and C1Q23, achieved through R&D cut, do demonstrate the viability of the company achieving commercial breakeven by 2023 and full breakeven by 2025. 
• We still think these viabilities have difficulties to achieve and even achieved, hurt the LT value of the company; We raised our TP from US$25 to US$29 but maintain SELL.

• Aekyung Chemical produces materials and additives for sodium-ion batteries. If sodium-ion batteries become more popular for EV batteries, Aekyung Chemical could benefit from this trend. 
• Aekyung Chemical is increasingly likely to be included in KOSPI 200 index in 2H 2023 or 2024.
• The Aekyung Group completed the merger of three chemical businesses (Aekyung Petrochemical, AK ChemTech, and Aekyung Chemical) into one entity (Aekyung Chemical) in 2021. 

• CPNG reported C1Q23 top-line, EBITDA, and non-GAAP net income in-line, 8.1%, and (3.7%) vs. our est., and 3.1%, 8.2%, and in-line vs. cons., respectively. 
• We estimate CPNG’s penetration of its 3P marketplace fulfilment (FLC) rose 6ppts~ YoY to 20%~ in 1Q23. 
• We maintain our BUY rating and raise our TP to US$21.

• PHC Holdings (6523 JP) announced FY23 result, which is in-line with previously announced downward revised guidance. For FY23, revenue increased 5% to ¥356B, driven by diagnostics and life sciences business.
• Despite an impairment loss of ¥8.7B in Epredia, operating profit grew 145% to ¥20B. FY23 net loss narrowed to ¥3.2B from ¥8.5B in FY22.
• PHC has initiated FY24 guidance and guided for FY24 revenue of ¥355.5B (down 0.3% YoY). The company is expected to turn profitable in FY24, with net profit of ¥15.6B.

• Unity’s 1Q23 top line was in line with our estimate, and  bottom line was USD 34mn, vs. our est./cons. of USD 4/(3)mn, due to headcount reductions.
• We expect it to outperform in coming quarters because: 1) Create solutions are reducing low margin businesses with low churn rate, 
• 2) Growth solutions continue to gain share driven by integrated Mediation platform, 3) announced AI products with accumulated R&D further diversify Unity toolsets.

• In 2022, Heineken delivered strong profit growth despite the challenging market environment, driven by volume recovery post pandemic, premiumization, pricing, and cost savings
• Heineken keeps working on improving and building its business for the long-term as it invests behind its brands
• We believe Heineken’s new, more balanced approach to driving shareholder value is likely to yield a period of accelerated organic and margin growth that deserves a higher-than-peer valuation

SenSen Networks (SNS) reported its ninth consecutive quarter of year-on-year record cash receipts in Q323, with growth across all key verticals and no customer churn. The company has also introduced further measures to achieve cash flow positivity and profitability from Q423, focusing on upselling to existing customers and introducing a salary sacrifice scheme for senior staff. We moderate our revenue growth forecasts to reflect these measures but upgrade our profitability and cash forecasts as a result. The short to medium term is likely to see greater focus on the smart cities segment, where the company has established a promising international market presence and where it has considerable scope to expand its engagements in its existing customer base. This positions SenSen well to scale more profitably in the mid-term.

• Vedant Fashions (MANYAVAR IN) , (VFL) had recently debuted on the bourse in 2022. 
• The company has grown to be one of the largest brands in the wedding/celebration apparel industry, boasting a network of 595 stores and 300+ franchises as of March 2022.
• When it comes to the forensics, there are slight grey areas observed with respect to the accounting complications. The insight also highlights key governance takeaways.

• Panasonic reported a 13% increase in sales and a 4% increase in net profit for fiscal 2023, driven by strong performance in its lifestyle, automotive, and connect segments.
• Panasonic expects to beat Street consensus operating profit forecasts, reflecting the recovery of auto demand and recognition of tax credits for its battery production
• Panasonic is a key beneficiary of continued expansion of EV market. Stock cheap at 8x EV/EBIT vs historical average of 11x

• Chinese electric-car giant BYD Co. got a green light from regulators to take over a bankrupt online insurance unit of the scandal-plagued conglomerate Tomorrow Holding Co. Ltd. with plans to turn it into an auto insurance provider.
• The China Banking and Insurance Regulatory Commission (CBIRC) said Tuesday that it approved BYD’s 100% acquisition of E An Property & Casualty Insurance Co. Ltd.
• Chinese authorities seized the company three years ago.

• One of the biggest breakthroughs in the global EV rechargeable battery industry this year has been CATL and BYD’s launch of hybrid sodium-ion and lithium-ion batteries in 2H 2023.
• This is expected to take away market share from Korean EV battery makers including LG Energy Solution and Samsung SDI.
• It is expected that eventually, that sodium-ion batteries could be about 30-40% cheaper than conventional lithium-ion batteries.

• Beenos Inc (3328 JP), despite missing earnings and offering smaller-than-expected buybacks, is potentially a deeply undervalued investment.
• Beenos holds 38% of its market-cap in cash 14% in GoTo shares 72% in VC investments and 9% in investment securities, which amounts to over 133% of its current market-cap.
• Distributing these excess assets to investors could potentially generate more than 100% upside.

NagaCorp (3918 HK – US$3.5 billion) is a Hong Kong-listed casino operator based in Cambodia’s capital city of Phnom Penh.

Its two “NagaWorld” casinos with 480 gaming tables and 3,700 slot machines, and hotels with 2,700 rooms and related commercial properties.

What makes NagaWorld unique is that it has a monopoly on running casinos in a 200km radius of Phnom Penh, lasting until 2045.

• Q1’23 revenues of $1.84 billion, -12% QoQ ,- 5% YoY, but at the high end of the guided range
• Remains on track for >50% wafer capacity growth between 2021 and 2024
• Muted CY’23 outlook sends shares down ~10% by close. Buying opportunity?

• Fujifilm delivered its 4Q and full-year FY03/2023 results today. Revenue and OP increased 15.0% and 63.2% YoY to ¥764.7bn (vs consensus ¥715.7bn) and ¥70.4bn (vs consensus ¥62.5bn) respectively.
• The company’s full-year revenue and OP were above its own guidance as well as consensus, and we think FUJIFILM Holdings (4901 JP) ’s guidance for FY03/2024E is too conservative.
• The market continues to value Fujifilm as an imaging company and not in line with healthcare peers suggesting there is significant upside to the current valuation multiples.

• Shineway’s 23Q1 performance growth exceeded expectations, mainly driven by TCM formula granules products and injection products. A surge of COVID infection rate in China since 22Q4 was an important reason. 
• Based on data, revenue proportion of COVID-19 related products is not low. So, related sales growth in following quarters this year would decrease as the dividend period of pandemic ends.  
• As the growth of TCM formula granules is expected to offset the slowdown of COVID-19 TCM products, Shineway’s overall revenue growth would still be strong in 2023. Valuation isn’t cheap.

• kopi-C with Pan United’s Group Head of Corporate Development: “We are decarbonising the world with concrete” Jim Teh, Group Head of Corporate Development of Pan United, believes in fighting climate change by innovating in its concrete products.
• Pan-United Corporation Ltd (Pan-United) is a listed Asia-based technology company (SGX:P52) catalysing change in the ready-mix concrete and logistics space.

• Uniqlo is such a mainstay of Japanese retailing, and indeed life, that its dominance seems inevitable and unchanging. 
• Yet it has morphed from a mess of poorly judged acquisitions and failed overseas experiments into Japan’s biggest retail export – and still manages to pull off 20% growth.
• Its latest target of ¥10 trillion in 10 years is far-fetched but its history of persistent determination suggests continued expansion is a certainty.

• We believe total revenue will grow by 6% in 1Q23, compared to four stagnant quarters in 2022.
• We also believe operating margin will improve by 2 percentage points YoY in 1Q23 due to the layoff in 1Q22.
• We believe the stock has an upside of 48%, but we reduce our price target from HK$563 to HK$505.

• It’s barely three weeks since the annual results in April, and now Shakey’s Pizza (PIZZA PM) / The Keepers Holdings (KEEPR PM) will declare their Q1 2023 results mid-May. 
• Both results are expected around the 14th/15th of May, with a confirmation of Shakey’s Pizza (PIZZA PM) holding its post-results call on the 17th of May. 
• We expect stellar Q1 results and good guidance for 2023 for both companies. 

• In this insight, we provide an update of Naver Corp which is our 2023 high conviction stock. Naver’s shares are up 19% YTD, outperforming KOSPI which is up 12% YTD. 
• The total transaction amount of Naver Commerce was 11.6 trillion won (up 19.7% YoY) in 1Q 2023. Poshmark also generated positive EBITDA in 1Q 2023. 
• Naver plans to cancel about 1.6 million treasury shares per year (1% of outstanding shares) in the next three years (for a combined 3% of outstanding shares). 

• We believe revenue will grow by 5.6% YoY in 4Q23 and by 9% in FY2023 versus 2.7% in FY2022.
• We also believe operating margin will improve slightly to 8.9% in 4Q23 versus 8.2% in 4Q22.
• We believe the stock has an upside of 63% for March 2024.

• Recruit Holdings (6098 JP) will report FQ4 results on 15th May. Consensus expectations are ¥844.4bn and ¥92.5bn in revenue and EBITDA respectively.
• The company revised its previous guidance in February and expects revenues and OP of ¥823bn and ¥89.2bn respectively for 4QFY03/2023.
• Our revenue forecast for 4QFY03/2023 is in line with Recruit’s guidance, while we expect the company’s adjusted EBITDA to be slightly higher than the guidance.

• Shockwave Medical Inc (SWAV US) reported better-than-expected Q1 results, due to continued geography expansion and strong demand of its IVL catheters for the treatment of coronary and peripheral artery diseases.
• Shockwave projects 2023 revenue of $700–720M, which represents 43–47% YoY growth. This compares to previous 2023 revenue guidance of $660–680M.
• According to a new media report, the acquisition talks between Boston Scientific (BSX US) and Shockwave have hit a snag as both the parties could not agree on a price.

• China government guided no commission capping on real estate brokerage business, but the ladder-pricing system may lead to moderate commission rate reduction for Beike.
• We estimate that 0.1% of Lianjia commission rate cut can imply to 1.2% of revenue reduction for Beike in 2023. 
• Therefore, we lowered revenue by (2.8%) and net income by (5.3%) to factor in the potential changes.  We maintain BUY rating but cut the TP by US$2 to US$21.  

• Much market sentiment continues to await more evidence that recovery in Macau can be sustained long term towards reaching baseline 2019 revenue levels.
• MGM China Holdings Ltd. market share tracked under double digits pre-covid but is now poised to rise to low to mid teens going forward.
• We see the shares as undervalued because its ramp ahead starts at a lower base than peers and is poised for significant sequential earnings beats ahead.

• BeiGene (BGNE) reported C1Q23 top line 7% and gross margin 1.5ppt above our estimates, leading to non-GAA operating loss 23% narrower than our estimate. 
• We raise BRUKINSA’s peak year sales from US$5bn to US$5.8bn while cutting Tislelizumab’s peak sales from US$1.5bn to US$1.2bn. 
• With transition to a biopharma complete, BGNE should enjoy a higher multiple; We raised TP from US$219 to US$254 and maintain BUY.

• Ferrari NV (RACE IM) has been a steady compounder of earnings growing operating profits at 14% CAGR and sales volumes at 6% CAGR over the last 20 years. 
• The company has expanded EBITDA margins from 25% in 2014 to 35% in 2022 and is expected to increase by another 300 bps in FY23 to 38%, as per guidance. 
• At 41x/35x FY23e/FY24e, we conceded it is a tad expensive, but we would look at investing in this company over the long term.

• Hoya has an impressive business model that results in high Returns on Invested Capital
• Hoya reported strong Q4 results but there is little for investors to get excited about in the outlook
• We see a lack of catalysts and an expensive valuation as working against the stock in the short term

• Nissin Foods Holdings (2897 JP) to report FQ4 results on May 10th with ¥158.5bn revenue and ¥8.1bn operating profit expected according to revised Feb 2023 guidance.
• Consensus predicts Nissin Foods’ operating profit to be ¥6.6bn from a revenue of ¥167.8bn, which is lower than the company’s latest annual guidance.
• Meanwhile, a higher FQ4 operating profit of ¥10.5bn is expected based on our analysis, exceeding consensus by 59%.

• Alfresa Holdings (2784 JP) revised its consolidated performance forecast for FY23. Revenue, operating profit, and net profit forecast have been raised by 3%, 2%, and 21%, respectively.
• This is attributed to greater-than-expected growth in ethical pharmaceuticals market and the company’s recovery from the bidding nomination suspension from medical institutions stemming from a violation of the Antimonopoly Act.
• In March 2023, Alfresa received a cease and desist order and a surcharge payment order from the Japan Fair Trade Commission (FTC) in relation to violation of the Antimonopoly Act.

• Q1’23 revenues of NT$18.6 billion, up 14.2% YoY and up ~1% QoQ.
• No specific Q2’23 forecast provided but we fully expect a sequential decline and the end of a 13 quarter growth streak 
• YTD silicon carbide revenues have already exceeded full year 2022 revenues, albeit coming from a low base.

• Danaher successfully navigated a dynamic operating environment in this quarter to deliver an all-around beat.
• The strength of its customer base business grew by 6% in this quarter.
• For the quarter, the gross profit margin was 61% and the operating margin was down due to lower COVID volume in its diagnostics and biotechnology businesses.

• We expect CPNG to report C1Q23 top-line and non-GAAP net income 2.0% and 4.8% vs. consensus, respectively. 
• AliExpress became S. Korea’s most downloaded app after increasing spending, but product overlap with Coupang is limited, while other S. Korean competitors recorded declining MAU, in our understanding.
• South Korean economic indicators, including CPI and retail data, point towards a recovery. We maintain our BUY rating and US$19 TP.

• There’s an obvious declining trend in net profit YoY growth.Considering unsatisfactory growth of MI and IVD in 22H2,if it weren’t for the strong growth of PMLS,Mindray’s overall growth could have been “surprising”.
• The current question is whether IVD and MI segments would have high enough growth to offset the potential performance decline of PMLS segment in post-pandemic era. Problems may emerge afterwards.
• There are still some unresolved technical challenges that constrain the development of Mindray. Without good performance in internationalization, there is no incremental market. Thus no reason to maintain high valuation.

• Biogen had a successful first quarter with an all-around beat.
• The company executed the launch of Leqembi, an immediate transformative product in the Alzheimer’s disease therapeutic area.
• Biogen has been experiencing a lot of competition, making it necessary to think about how to grow the business in the future.

• GE’s stock has been on a strong upward momentum and delivered an all-around beat in the quarter.
• The top-line momentum was strong, with strong market demand as well as execution driving growth.
• In this report, we have carried out a fundamental analysis of the historical financial statements of the company.

• We look for the new MTP to present a growth outlook in the Aerospace division driven by a recovery in the civilian aircraft market
• IHI is a key beneficiary of structural growth themes of higher defense spending and energy transition
• We believe that the market has been overly concerned about a growth plateau. At 9x TEV / NTM EBIT, the stock is a bargain versus global peers

• Chinese authorities have begun to ban public opinion against non-state-owned companies.
• These actions were the opposite to what the authorities did in past years.
• We believe the authorities need non-state-owned companies to bail the unemployed young people out of the weak job market.

• Hong Kong retail sales strongly rebounded 41% yoy in March
• During May Day Holiday (Apr 29 – May 3), there was 625k mainland visitors to Hong Kong, around 63% of pre-COVID level
• Among all RE sub-sectors, retail and residential will be the first to recover (already seeing recovery), office will be lagging and the last. 

• Deposit outflows for 1Q23 in the most affected of the mid-sized US banks were in low double digits, much less severe than the deposit collapse suffered by First Republic
• In fact, since the end of 1Q23, some smaller banks have reported slightly positive deposit flows, and the recent usage of Fed and FHLB funding lines is not alarming
• We review a select group of mid-sized US banks focusing in on a number of key metrics; despite the challenging times, we like M&T Bank and Western Alliance

• China Energy Engineering (3996 HK) is a laggard in this round of “China style valuation” rally. With strong earnings and project backlog, there is good room to catch up.
• Its 1Q23 earnings growth is ahead of the infrastructure trio, and so as the new contracts signed. Moreover, it has a faster growth in overseas market. 
• The 3-year EPS CAGR is projected at 16.3%, yet it just trades on 5x PER. Its ROE of 9.4% makes it attractively priced at only 0.4x P/B for FY23.

• A significant change in 23Q1 was not just a narrowing of net loss, but a sudden turnaround in sales profit under the rapid revenue growth, which was an important leap.
• BeiGene’s commercialization capabilities largely rely on high expense level that significantly deviating from the industry average, making eventual commercialization success more difficult. BeiGene is an “outlier” even among global peers.
• How to control expenses while ensuring sustained sales growth and long-term competitiveness is an important issue for BeiGene. If no new blockbuster product emerges ultimately, high valuation would not last.

• Acer shares slumped 7% in a day after the company missed analyst expectations. Acer has now underperformed Asustek since our March 21st Long Asustek vs. Short Acer recommendation.
• Despite the earnings miss, Acer management said it believed 1Q23 will be the trough for the business and metrics should be improving going forward.
• We believe one can consider reversing our Long Asustek vs. Short Acer Trade to become Long ACER vs. Short Asustek, and hold this trade through Asustek’s upcoming earnings results.

• Major earnings this week including Hon Hai, Novatek, Wistron, Asustek, and more.
• We believe one can consider Long Acer vs. Short Asustek into Asustek’s results this week.
• Apple Suppliers — Quanta has tracked Apple’s success while others have lagged by a large margin.

• Amaero International Ltd (ASX:3DA) is a global specialist in metal additive manufacturing for the defence, aerospace, and other industrial sectors.
• The company has provided to shareholders an executive summary from the Frost & Sullivan Feasibility Study for its titanium powder project in Abu Dhabi which concludes that the project is feasible across technical, financial and market parameters, and supports the Chairman’s prior guidance to shareholders.
• Amaero is progressing an 827-tonne a year titanium powder facility in the United Arab Emirates which it expects to greenlight before the end of this financial year.

• Tofflon needs to go through a considerable period of adjustment after experiencing the high point of performance. Its “periodicity” is obvious, which means the performance high growth is not sustainable.
• The decline in growth rate of contract liabilities suggests that the future prospects is highly uncertain. Overall margins could continue to drop due to reduction in high margin overseas orders.
• Unless there’s a major catalyst, it’s difficult to see significant valuation boost in short term. Given the current downward trend in performance, valuation may continue to decline in the future.

• ACMR reported C1Q23 top-line, GAAP EBIT and non-IFRS net profit (2.8%), 42% and 35% vs. our est., and in-line, and positive vs. negative, respectively. 
• We estimate ACMR’s China wafer clean/ECD share was 11%/45%~ in 1Q23, +4/28ppts YoY, while guidance implies 45%/50%~ in 4Q23, respectively; 
• We maintain BUY and US$ 30 TP, implying 2.0x FY24 EV/Sales

• Chipmos Technologies (8150 TT) reported results last week, beating expectations and showing an increase in capacity utilization QoQ.
• The company reported notable strength in Display Driver related demand, and capacity utilization for the segment may have bottomed back in 3Q22.
• Memory is expected to have a delayed recovery according to ChipMOS, potentially coming in 3Q23. Adjusted our model — We continue to believe ChipMOS is cheap through the cycle.

• MIR forecasts China’s industrial robot market growth to accelerate to ~12% y/y in 2023 and will sustain at double digit y/y for the next several years.
• Management sees order growth back to normal in Mar and Apr. 
• Industrial robot sales volume is expected to increase to ~25K in 2023, growing by ~45% y/y. 

• Many people have begun to pay attention to whether there would be a second wave of COVID-19 in China. We think it is necessary to share our views.
• The overvaluation or undervaluation of China’s core assets cannot be explained solely by classic valuation models such as PE/PB/DCF, but rather by considering the deep meaning represented by the companies.
• Lifetech’s future growth space depend more on the performance of pacemakers and IBS, but they are facing different challenges. Therefore, we recommend short-term trade rather than long term hold.

• Clinuvel Pharmaceuticals (CUV AU) recorded 19% YoY revenue growth in H1FY23, driven by the growth of network of prescriber, treatment demand, and number of prescriptions of Scenesse.  
• In March, Clinuvel announced the test launch of the first dermatocosmetic product Cyacêlle, a polychromatic screen, formulated to protect skin against ultraviolet A & B and high-energy visible lights.
• Clinuvel has published encouraging initial readouts of the DNA repair programs. In March 2023, the company has initiated Prénumbra Instant trial in acute ischemic stroke patients.

• Q1’23 was Acer’s fifth consecutive quarter of sequentially declining revenues
• Called Q1’23 the trough but no specific guidance on the current quarter
• Chromebook sales surged 44.4% QoQ. What was the reason for this?

• Go Air Limited (GO IN)‘s resistance to put its operational woes aside, has come to an end as the company has filed for insolvency.
• In our previous IPO insight, Go Air IPO- In Search Of Smooth Landing we had highlighted several issues that were haunting the company, including the Pratt and Whitney trouble.
• Now that the company has filed for insolvency, the search of smooth landing extends to the shareholders and the lenders.

• The sharp rebound of Advanced Micro Devices, Inc. (NASDAQ:AMD) over the recent months came to a sudden halt after market participants were once again surprised by the deteriorating outlook for the company.
• Prompted by the bear market rally in equities, AMD’s stock has almost doubled in a matter of just a couple of months from October of last year to March 2023.
• While everyone was cheering the new wave of AI-driven demand, the quarterly report from earlier this week is a warning that should not be ignored.

• Prodia booked a softer set of numbers in 1Q2023 but reflected a higher COVID base plus 1Q2023 was impacted by the fasting month but the testing mix was positive.
• The company will significantly increase capex this year with more outlet expansion and more investment into its digital business, which is becoming an increasingly important growth driver. 
• Prodia (PRDA IJ) stands out as the unique diagnostic leader in Indonesia,  which trades at a significant discount to both local healthcare players and Indian diagnostic peers.

• For 2022, SK Biopharmaceuticals Co Ltd (326030 KS) recorded Xcopri U.S. revenue of KRW169B, up 116% YoY. This year, the company expects to secure Xcopri sales of ~KRW300B in U.S.
• Thus far, Xcopri has been launched in 15 countries in Europe. The company expects to launched Xcopri in eight more countries in Europe this year.
• By 2025, SKBP plans to submit sNDA for cenobamate in primary generalized tonic-clonic (PGTC) seizures and pediatric patients, and carisbamate for orphan pediatric epilepsy.

• Nihon M&A reported 4QFY03/2023 results last week. Revenue increased 86.7% YoY to ¥11.4bn (vs consensus ¥10.0bn) while OP for the quarter more than quadrupled to ¥4.2bn (vs consensus ¥4.9bn).
• Full-Year FY03/2023 revenue of ¥41.3bn and OP of ¥15.3bn were slightly below guidance of ¥42bn and ¥18bn respectively and the company has put aside its medium-term growth plan by 2years.
• We continue to prefer Baycurrent over Nihon M&A Center (2127 JP) in the Japanese consulting/M&A space as Baycurrent continues to make strong progress.

• Q1’23 revenues of NT$95.7 billion, down 11.6% sequentially and 33% year-over-year.
• Q2’23 revenues sequentially flat at the midpoint. Longer replacement cycles and growing refurbishment market will see 2023 unit shipments decline a further ~10% YoY.
• Strength in Smart Edge products (TV, Tablet, Telco, Automotive) continues to offset weakness in smartphones

• It was a successful Q4 for Cleveland-Cliffs as the company managed an all-around beat with lower-than-expected losses.
• Cleveland-Cliffs supplies over 7 million tons of steel to the automotive industry, including 5 million tons of direct sales and over 2 million tons of indirect sales.
• With typical volumes of 5 million tons per year, the company expects its full-year 2023 carbon flat-rolled steel selling price to increase to $1,415 per net ton, a $115 per net ton increase year over year.

• RemeGen’s C1Q23 top line came in as 31% of our C1H23 estimate while IFRS operating loss came in as 55%. 
• C1Q23 gross margin exceeded our C1H23 estimate by 12ppt, mainly due to restraining in shipment
• We cut our product sales estimates and raise WACC by 1ppt to reflect concentrated risk, leading to TP reduction from US$64 to US$46.

• This morning, Trigon Metals Inc. (TM:TSXV), announced additional high-grade drill results from its Kombat Mine in Namibia.
• The Company reported drill results from 12 holes totalling 996m at the Kavango West area, 150m west of the Main Kavango Pit (Figure 1).
• These results build upon the already reported high-grade copper drill results from the Main Kavango Pit and East 400 area (150m east of the Kavango Pit), highlighting the strong mineralization across the Kombat trend.

Epwin’s FY22 results highlight both the challenging trading environment but also management’s ability to successfully handle inflationary pressures. Well-established long-term growth trends imply that Epwin is well placed to leverage off increasing demand for its energy efficient and low-maintenance building products. The acquisition of Poly-Pure and Mayfield underscore the company’s ambition and ability to self-finance accretive expansion. We anticipate further deals in the foreseeable future. Epwin trades on a P/E of 8.3x for FY23e versus a long-term average of 10.9x, with upside as and when margins recover further.