Equity Bottom-Up

• A SELL note from a broker on Ecopro BM Co Ltd (247540 KS) was a key reason for the 7% and 8+% fall for Ecopro Co Ltd (086520 KS) .  
• Is this finally start of the end of the rally for the poster boy for Korean EV 
• When will earnings matter and what are the catalysts that could start the downfall?

• Bukalapak (BUKA IJ) announced 1Q2023 results with encouragingly strong headline growth coupled with even stronger revenues as take rates increased, with its marketplace being the standout driven by specialty verticals. 
• Mitra Bukalapak also registered solid growth, with increasing active Mitra’s with greater frequency, higher take rates, and an improvement in contribution margin which should turn positive over the next 2Qs. 
• Take rates should continue to improve as the specialty businesses pick up momentum, and once the Mitra business turns CM positive, growth in that segment will also accelerate.

• Japan Tobacco’s 1Q23 performance exceeded consensus expectations, with revenue and OP surpassing by 5.3% and 12.3%, respectively.
• Consensus expected no volume growth for Japan Tobacco in declining combustible tobacco market; targeted mid-single digit constant currency revenue growth via pricing.
• Higher cigarette prices are expected to contribute to Japan Tobacco (2914 JP)‘s OP growth, which we anticipate will exceed its historical peak levels in the next few years.

• China Communications Construction (1800 HK) should see more valuation upside as it narrows the discount to book through more asset disposal, spin-off, restructuring and securitisation.
• Healthy 1Q23 earnings demonstrated underlying business strength. We expect new contract growth to accelerate in the rest of this year. Backlog estimated to cover 4.7x FY23F revenue.
• Gross margin has stabilised in 1Q23 when compared with 1Q in previous years. Contribution from concessions will improve as traffic recovers and projects get mature. 

For our next Corporate Webinar, we are glad to welcome NFC Indonesia’s Group Head of Corporate Finance & Strategy, Stanley Tijandra.

In the upcoming webinar, Stanley will share a short company presentation after which, he will engage in a fireside chat with Smartkarma Insight Provider, Angus Mackintosh. The Corporate Webinar will include a live Q&A session.

The Corporate Webinar will be hosted on Tuesday, 09 May 2023, 17:00 SGT.

About NFC Indonesia

PT NFC Indonesia Tbk (IDX: NFCX), a subsidiary of PT M Cash Integrasi Tbk (IDX: MCAS), is a digital customer experience company that offers a complete suite of services aimed at assisting the retail industry in improving customer engagement and competitiveness, in Indonesia’s growing economic biosphere, through its five main initiatives: Digital Product Aggregator, Digital Cloud Advertising, Content & Entertainment, Digital Wholesale, and Clean Energy.

• We expect Hua Hong to report C1Q23 top-line, IFRS operating income, and IFRS net income in-line, 14.1% and 19.1% vs. consensus, respectively. 
• Our sample of 1Q23 A-share fabless balance sheets showed that inventory days rose, which we expect will lead to a slowdown in wafer orders beginning in 2Q23.
• Despite near-term weakness, we are positive the longer-term benefits of (1) localization, and (2) EV demand. We maintain BUY and raise TP to HKD35.

• China Fortune Land Development Co. Ltd said it successfully restructured more than 80% of its 219 billion yuan ($31.7 billion) debt overhang.
• The cash-strapped private developer returned to profitability after two years of liquidity crisis
• Hebei province-based China Fortune Land signed agreements with creditors to restructure 180.6 billion yuan of debts through various means by the end of 2022, accounting for 82.4% of total outstanding debt

Vection Technologies’ Q323 activities report confirms that contract growth continued to accelerate in H223, with the company reporting 100% total contract value (TCV) growth from the end of January to 28 April. The momentum in TCV growth indicates that management is well-positioned to deliver the triple-digit half-on-half top-line growth required to reach its FY23 expectations. Cash receipts on a quarterly and nine-month basis increased year-on-year. Vection Technologies’ balance sheet is set to be sustained by a further A$3.5m in Q423 from an R&D tax receipt and outstanding invoices, supporting the company’s M&A pipeline.

Shield Therapeutics reported its FY22 preliminary results and Q123 business update, the key emphasis of which was the growing traction of Accrufer in the US following the December 2022 co-commercialisation deal with Viatris. The FY22 revenue of £4.5m (+194% y-o-y) was driven by Accrufer US sales (£2.9m vs £0.1m in FY21) and underpinned by a material q-o-q growth in prescriptions during FY22 (25,200 vs 2,500 in FY21). Encouragingly, this trend has continued in Q123 (10,500 prescriptions; +12% q-o-q growth) despite initial operational disruptions related to the integration. With the salesforce approaching full strength (total 100 people) by May, we anticipate H223 to be a vital period for sales traction and market coverage. We have updated our FY23–24 pricing and costs estimates for the FY22 results but maintain our long-term Accrufer growth assumptions. Our revised valuation is £388.9m (£403.4m previously).

• Beenos Inc (3328 JP) is currently one of the cheapest stocks in the Japanese e-commerce sector with a consensus FY+2 EV/OP of 4.5x with an OP CAGR of around 130%.
• In addition, the relatively cheap-looking valuation multiple excludes the current valuation of Beenos’ incubation program investments.
• We think Beenos can sell its stake in GoTo in the short-term to conduct a big share buyback as the management thinks that Beenos is unfairly valued by the market.

• Mitra Adiperkasa (MAPI IJ) 1Q2023 numbers reflected a strong start to the New Year, with vibrant sales growth, improved profitability, and growth across all segments.
• The company maintained the momentum behind its omnichannel strategy with online sales making up 8.1% of total sales despite more offline activity as COVID restrictions were dropped.
• Mitra Adiperkasa continues to expand its footprint both in Indonesia and with selective brands in South-East Asia, most recently in the Philippines. Valuations are attractive versus historical levels.

• Q1’23 revenues of $5.4 billion, down 3.5% QoQ, down 9% YoY, but marginally ahead of the guided midpoint.
• AMD’s outlook for the current quarter is for revenues of $5.3 billion at the midpoint, basically flat sequentially:
• Data center revenues will grow 50% sequentially in H2’23 compared to H1’23

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

• Meituan has recently implemented three strategies to compete with Douyin: a low-price strategy, the addition of more video/live streaming content, and a management reorganization.
• The low-price strategy has already shown some promising results, as seen in the slowdown of Douyin’s local service GTV and the number of new merchants joining its platform.
• However, the effectiveness of the other two strategies, particularly Meituan’s push to add more video content, remains unclear.

• Urbanization and brand premiumization are Focus Media’s two long term structural drivers which will keep broadening its audience and advertiser base.
• 1Q23 results end a 5-quarter streak of profit decline and  mark the start of new profit cycle. This will usher in a meaningful stock re-rating if history is a guide.  
• We expect at least 30% upside by the end of 2023 by applying 25x P/E (still at large discount to last profit cycle) on RMB4.9 billion net profit for 2023. 

• Fiserv’s delivered a 30% return since October of last year, when I laid out my full investment thesis.
• Fiserv is laying the groundwork for long-term growth, says the company’s market commentators.
• The company continues to outmaneuver its direct competitors, according to analysts.

• Kazatomprom is the world’s largest Uranium miner with the lowest cost of production.  
• The company has strong fundamentals with demand supply dynamics expected to steadily become more favorable going forward.
• Geopolitical concerns, which is the main reason for its low P/E, should subside as time passes by. 

• Black Rock Mining Ltd (ASX:BKT) is developing the Mahenge natural graphite project in Tanzania, eastern Africa and is well advanced in defining and planning a low capex, high margin, high return operation.
• The company holds an 84% interest in Mahenge with the Tanzanian government retaining a free-carried 16% stake.
• Mahenge is one of the largest JORC-compliant flake graphite resources globally and is well positioned to benefit from growing global demand for natural graphite from use in Li-ion batteries. 

• FY Mar-24 guidance – sales down 14%, operating profit down 37% – is not extreme compared with previous cycles. 
• History shows that downturns at Advantest can last for two or even three years, not just one. Weak economic conditions add to this possibility.
• The share price has rebounded from the recent sell-off, but optimism is unwarranted. Historical valuation ranges suggest potential downside of 20% or more.

• Taste Gourmet (8371 HK) will report FY23 (March YE) results on June 23rd. Channel checks indicate strong momentum in Q4 Vs. Q3 FY23.
• Based on our estimates of 72/112 mn HKD for FY23/24e, the stock trades at 8x/5x FY23e/FY24e with a 7.6%/11.9% dividend yield assuming a 60% payout ratio.
• The company has 114 mn HKD of cash (20% of market cap), which is earmarked for restaurant expansion by 6-10 outlets and dividend payout (50-60% of earnings) in HK/China.

• Aier’s performance slowed significantly in 2022, with revenue and net profit growth rates at their lowest in nearly a decade.Although performance rebounded in 23Q1, the growth rate lags behind peers.
• In front of increasing competition and difficulty of finding good acquisition targets, Aier’s poor operational capabilities and endogenous growth cannot support rapid growth. The beautiful story has shown obvious cracks.
• Future single-digit growth is inevitable. Aier is significantly overvalued due to problematic long logic. It should be noted that there would be four further holdings reductions for Aier this year.

• Another major earnings week with AMD, Qualcomm, Apple, Acer, Winbond, Wistron, Micro-Star, and more.
• Hon Hai could terminate its investment deal in U.S.-based Lordstown Motors as per an exchange notice posted by Lordstown.
• AMD reportedly transfers some 4nm chip business to Samsung from TSMC.

• While meeting expectations in 1Q23, Sinotrans (598 HK) has relied on a 105.2% surge in other income, mostly government subsidies. Without them, pre-tax profit would have dropped 21%.
• For most business areas, volume has come down YoY and QoQ, highlighting challenging operating environment. JV contribution, mostly DHL-Sinotrans, has also declined 11.5% YoY.
• While we like its long-term fundamentals and undemanding multiples, we have concerns on near-term headwinds and weakened earnings quality; and risks of profit downgrades.  

• The ramp-up in public housing supply in Singapore could be an opportunity for Kimly Ltd to fast-track expansion given its outlets, food-stalls are mostly located in public housing blocks. 
• Bigger F&B retail players like Kimly are better positioned versus others to weather the multiple headwinds faced by Singapore F&B retail sector today. 
• Upcoming 1H FY2023 results can trigger an up move in the stock if the company reports a meaningful margin recovery. Current undemanding valuations reflect heightened investor concerns.  

• We believe JD’s growth rate will continue to slow down and its margin will continue to improve in 1Q23.
• However, we also believe revenue growth will recover from 2Q23.
• We set a price target of HK$256, implying an upside of 85%. Buy.

• SAP delivered a highly disappointing set of results failing to meet the revenue expectations as well as the earnings expectations of Wall Street.
• The current cloud backlog and cloud revenue for S/4HANA increased by 79% which is why Q1 revenue increased by 9% overall.
• Their SaaS and PaaS portfolios continued to expand by 25%, with SaaS cloud revenue increasing by 22% and PaaS cloud revenue increasing by 45%.

• Philip Morris International’s Q1 results exceeded analyst expectations on the earnings front but were below par in terms of revenues despite some decent underlying momentum from IQOS, ZYN, and its combustible business.
• The company’s Q1 organic net revenues had solid growth.
• This highlights the ongoing strength of IQOS as a step-up in pricing but was somewhat mitigated by anticipated HTU inventory movement.

• Yerbaé posted full-year 2022 financial results that beat our estimates.
• 2022 net revenue came in at $7.2M vs. our estimate of $6.8M, representing 19% YoY growth
• Gross margin came in at 59% in 2022 vs. our estimate of 58%

• Alibaba (ADR) (BABA US) Cloud will cut prices for its elastic computing services using Arm and Intel-based chips by 15-20% and Nvidia’s V100 and T4 graphics processing units by 41-47%.
• It seems like the company is trying to combat increasing competition in the only way it knows how, by further subsidizing its already-subsidized cloud services.
• Price may not be the main reason for companies to avoid using Alibaba Group (9988 HK)‘s Cloud services. Government initiatives to nationalize the cloud-computing market could be a bigger factor.

• 4Q22 result beat and 1Q23 result was roughly in line
• Revenue growth to accelerate and margin to improve in 2023
• Long-Term targets remain unchanged and the valuation becomes attractive now

• M3 Inc (2413 JP)  reported 4QFY03/2023 results on Friday. Both revenue and OP increased 3.1% and 52.0% YoY to ¥55.7bn (vs consensus ¥60.8bn) and ¥16.0bn (vs consensus ¥17.8bn) respectively.
• We previously raised concerns over slowdown in medical platform earnings, and it seems that m3 has not been able to generate meaningful growth from its overseas businesses.
• The company expects FY03/2024E revenue growth to further drop to about 8.3% marking the slowest annual increase in revenue over the last two decades.

• The market should be happy with the 43.9% YoY growth in recurring earnings at Dongfang Electric (1072 HK) in 1Q23. Gross margin of 18.7% is the highest since 2Q21.
• New orders surged 26.1% YoY and 92.4% QoQ to a record Rmb22.6bn in 1Q23. We estimate backlog equals to 1.42x FY23F consensus revenue, meaning a very secured pipeline.
• While EPS dilution is a concern, this has already been reflected in share price. The acquisitions of subsidiaries will enhance FY23 earnings. Its 8x PER and 0.8x P/B are inexpensive.

• In 2022, Hygeia maintained stable revenue growth but with lower-than-expected profit performance. We think Hygeia’s profitability would improve gradually in the future as more and more new hospitals become break-even.
• Different from Aier/Topchoice, Hygeia’s acquired hospitals would be directly incorporated into the listed company, which means all aspects of consideration would be prudent. This is clearly more beneficial for investors/shareholders.
• Hygeia’s business model has proven to be replicable.The implementation of DRG policy has no significant impact on profitability. Hygeia is expected to have higher valuation than Aier/Topchoice in the future.

• We expect SMIC to report C1Q23 top-line, IFRS operating income, and non-IFRS net income (2.6%), (31%), and (29%) vs. consensus, respectively.
• Our sample of 1Q23 earnings for A-listed fabless firms found that (1) inventory days grew 18% QoQ to 191 days, and (2) revenues declined 9% QoQ. 
• Despite potential earnings miss, SMIC’s BUY case is strengthened positive externalities. We maintain BUY and raise TP to HK$24.

• Hospitality S-Reits among April’s top performers, averaging 6% gains However, by sub-segments within the index, hospitality S-Reits were the best performing segment with average total returns of 6.1 per cent followed by data centre S-Reits at 1.7 per cent.
• The top five performing trusts and their respective total returns were: CapitaLand Ascott Trust (8.5 per cent), Frasers Hospitality Trust (6.7 per cent), Mapletree Logistics Trust (5.6 per cent), Far East Hospitality Trust (5.1 per cent) and CDL Hospitality Trusts (4.2 per cent).

• SHEN reported first quarter results benefiting from non-recurring termination revenue and tax refunds. SHEN’s revenue and profitability were aided in the quarter with $1.7 million in termination fee
• Net income benefited from a one-time refund on sales tax and interest earned on tax refunds more than offsetting SHEN’s interest expense
• SHEN ended the first quarter with 28,793 Glo Fiber subscribers, up 4,507 from the fourth quarter 2022

• Radico Khaitan (RDCK IN) had succeeded in getting de-leveraged to a strong extent,  as mentioned in our previous insight, Radico Khaitan Limited: On the Path of Getting Debt Free 
• The company has entered into the new capex phase and has accumulated some debt, the annual report F22 also highlights few irregularities on the forensic side.
• These include complex structure for land purchase, receivables provisioning, deviation between RoU and lease assets, etc. 

• Voltas Ltd (VOLT IN) has experienced a decline in revenue due to a slowdown in demand, increased competition, and higher commodity prices. 
• The Voltas Beko brand has been a ray of hope for the company, with strong growth in demand and market share.
• While there may be an upside in volumes as capex kicks in,  but better to be on the sidelines until there is a change in the structure of the industry.

• Bajaj Auto Ltd (BJAUT IN) is optimistic about the future of their exports and expects a recovery in exports as a critical catalyst for the stock over the near term.
• The company’s EV endeavors in both 2-wheelers and 3-wheelers are expected to surprise on the upside, which can deliver upside than what is currently factored in.
• The stock also trades at undemanding valuations (16x FY25 consensus estimates), offering adequate comfort with an optionality of EV and Exports.

• Sheng Siong (SSG SP) management hinted at possible accelerated store growth referring to news reports about Singapore ramping up public housing to meet strong demand. 
• Singapore minister’s comment on public housing BTO projects under construction to increase to 150 in 2025 (from 100 currently) suggests a strong project pipeline in the next few years too.
• Muted 1Q2023 performance reported- decline in revenues and profits, yoy – in line with expectations as shopping ‘normalize’ post-COVID.

• Torrent Pharmaceuticals (TRP IN) continues to report double-digit revenue growth from India business. Leadership positioning in chronic therapeutic areas underpinned by Curatio acquisition is driving the domestic business.
• The company expects the India business to continue its growth momentum, backed by new launch, top brand performance, increase in field force productivity, and continued performance of Curatio portfolio.
• The U.S. business also witnessed revival in FY23 after a downturn in FY22, which should provide impetus to the company’s bottom line to a great extent.

• GoTo (GOTO IJ) 1Q2023 were impressive given the group is now contribution margin positive for all its divisions plus making good headway towards positive Adjusted EBITDA by 4Q2023. 
• This came at a cost with substantial QoQ declines in GTV for both ODS and e-commerce but better take rates offset this decline. Further significant declines may raise concerns.
• GoTo Logistics and GoPay’s lending business are key foundational focus areas to underpin a lower cost to serve and higher future growth. Valuations remain reasonable relative to peers. 

• Mediatek results showed it may be in one of the stronger positions through this cycle, part of the stronger group of company’s in what appears a ‘two-track’ semi industry recovery.
• The company reported notable strength in TV end-demand relative to the rest of the consumer electronics space.
• The company implied 2Q23E could be the company’s cycle bottom.

• Shekel Brainweigh Limited (ASX:SBW) reported FY22 sales growth of 14% to US$26.3m, which included 117% growth in Retail Innovation sales to $US2.0m.
• Revenue growth has continued into Q1 FY23 with 13% underlying growth, driven by 32% growth in the Self-Checkout division.
• We estimate an adjusted FY22 EBITDA loss (before amortisation, one-off costs and share-based payments) of US$3.3m, in-line with CY21 and impacted by a ~530bps decline in gross margin, predominantly in H2 FY22.

• Southbound will close for 3 days due to holiday, we view it as a good time to buy the stock on short-term momentum
• Investment thesis for CNOOC is similar to China Mobile: Strong southbound flows and A/H premium to narrow to support H share price
• Valuation is attractive.  Potential share buybacks and trading dual counter (to narrow AH gap) are the upcoming catalysts

• Both Delta Electronics Thailand and its parent Delta Electronics Taiwan reported results; both reports came in below analyst expectations.
• Delta Thailand shares have dropped 19% since our recent update. The company also did a 10 for 1 share split in an apparent bid to make the shares look ‘cheaper’.
• Delta’s EV business grew 100% YoY and is becoming a significant driver for the company. The pricing mis-alignment between Delta Thailand and Taiwan has corrected substantially.

• The real foothold of a pharmaceutical company lies in  “Development” rather than “Research”. After the clinical development has reached the first-class level, what remains is the vision of the leaders.
• For China biotech, we think they would go through four stages- Stage 1 (2015 – 2019), Stage 2 (2019 – present), Stage 3 (2026-2028) and Stage 4 (starting from 2030).
• If without Merck’s deal, Kelun’s profit improvement was mainly due to effective cost control. If Kelun could maintain double-digit revenue growth, with net profit margin around 10%, it’s already good.

• We expect the consensus to increase their operating profit estimates for Hotel Shilla in 2023 and 2024 by as much as 10-20% in 2023 and 2024.  
• Higher earnings will likely be driven by Hotel Shilla winning new licenses to operate duty free at the Incheon International Airport and much better than expected profits in 1Q 2023.
• With improved momentum (both operationally and share price basis), we think that the Hotel Shilla (pref) could outperform Hotel Shilla (common) in the coming weeks. 

• Siloam International Hospitals (SILO IJ) booked a very strong set of 1Q2023 results, despite a seasonally slower period, with all of its ramping-up hospitals now generating positive EBITDA.
• The company saw marked improvement in its patient metric in 1Q2023, both for inpatients and outpatients plus an improving payee mix with more corporate and insurance payments.
• Siloam put through price increases in 1Q2023, which will positively impact the next few quarters. It will also focus more on diagnostics this year as a new area for growth.

• Astellas Pharma (4503 JP) recorded 17% growth in revenue to ¥1,519B in FY23, driven by 24% growth of Xtandi. Core operating profit grew 17% and core net profit increased 18%.
• The company has guided for flat revenue and core operating profit for FY24, mainly due to negative impact of Fx.  
• Astellas expects to obtain FDA approval for fezolinetant for vasomotor symptoms associated with menopause in May 2023. The company will file for marketing approval for zolbetuximab in Q1FY24.

• ASE’s results commentary for its semiconductor packaging and testing service said that inventory problems for the industry are taking longer than expected to improve.
• The weaker than expected environment was only realized towards the end of 1Q23. The company’s utilization is near an all-time low which is expected to persist through 2Q23E.
• Automotive remains a bright spot for the company, with Auto-linked revenue rising 30% YoY.

• Herbalife has a strong position in the wellness industry, with net sales of $5.2b in 2022 and a market cap of $1.46b.
• The company was founded in 1980, and it employs an estimated 9,900 people worldwide.
• First, the company has a strong brand name and loyal customer base, which can support long-term growth prospects for Herbalife Nutrition (NYSE:HLF).

• The ‘end of the dollar’ has been nigh since 2005.
• The U.S. dollar will be the last to go crash, says CNN.com’s John Sutter.com.com/Doom merchants are back.
• The end of thedollar has been in place since 2005, says Sutter.

• In spite of the operating and economic climate difficulties, Chewy managed to deliver an all-around beat, surpassing the revenue, profitability, and free cash flow expectations of Wall Street.
• Their net sales climbed 13% to $10 billion during the fourth quarter, representing an annual growth rate of roughly 14%.
• Baptista Research looks to evaluate the different factors that could influence the company’s price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology.

• Stock has become attractive at its still under the radar price.
• Nomura projects Singapore revenues are trending rapidly back to 90% of pre-covid levels.
• Adj. EBITDA of SG$774 (US$580m) for FY22—income attributable to holders up 85%

• SK Hynix and Samsung reported results in the last week, showing major losses for their memory businesses. More evidence of a ‘two-track recovery’ for different parts of the chip industry.
• SK Hynix’s inventory situation worsened based on our analysis; Micron appears to be managing inventory moderately better than peers based on recent results.
• Long Micron vs. Short Nanya Technology: Micron has continued to outperform Nanya Tech, as well as SK Hynix and Samsung.

• Adjusted net profit at China Education Group (839 HK) grew 15.1% in 1H23, accelerated from 5% in 2H22. We are delighted to see resumption of interim DPS at Rmb0.164.
• FY23 outlook will be underpinned by higher education student enrollment and tuition increase. Strengthened financial position offers opportunities for both organic and M&A growth.
• Potential upside will also come from completion of for-profit conversion at Jiangxi University of Technology. We consider its 7.9x PER, 1x P/B, 13.3% ROE and 5.5% yield attractive.

• We think the coffee price competition, mainly between Luckin and COTTI, is temporary, and will have little impact to Luckin’s gross margin. 
• We also think COTTI’s low pricing strategy is unsustainable, and its franchisees are keen for price hike.  
• We maintain the stock as BUY and maintain TP at US$41.

• Accelerating de facto standardization of the Iq System
• Guiding for double-digit growth in sales and profit in FY23/3
• Roadmap for sustainable growth. Takamiya is currently implementing its medium-term management plan ending in FY2024/3.

• Strong demand for Eicher Motors (EIM IN) ‘s Royal Enfield bikes with returning customers.
• The model “Hunter” is expanding the market and attracting a new set of customers.
• Royal Enfield entering a new growth phase with new launches and customer service focus.

• Tencent will report 1Q2023E earnings on 17th May. Online gaming revenues have declined YoY for 4-consecutive quarters while social networks revenue has been down for the last two quarters.
• Our app data analysis suggests that grossing ranks of some of Tencent’s key domestic titles have dropped during 1Q2023 while international titles show an improvement during the quarter.
• Our regression model suggests that Tencent’s internet value-added services biz’s revenues would grow at lower single digits in 1Q2023E and is still playing catch up with its own self.

• Krung Thai Bank Pub (KTB TB) remains our pick; it ranks top in terms of post-provision profitability, screens well on NPL coverage, funding and valuations, including its attractive PEG ratio
• We also like Bank Of Ayudhya (BAY TB), with its sound pre and post-provision profitability in 1Q23, strong credit quality metrics and very attractive valuations
• Kasikorn has seen its high cost of risk come down in 1Q23, but this remains elevated versus its domestic peers; Kasikorn may be a 2023 opportunity, one for the watchlist

Immix Biopharma continues to share encouraging data from the Phase Ib/II open-label NEXICART-1 trial. This study is investigating NXC-201, a CAR-T therapy, for the treatment of multiple myeloma (MM) and light chain amyloidosis (ALA). At the European Society for Blood and Marrow Transplantation 49th Annual Meeting in Paris, Immix announced positive results for the 58 patients enrolled so far. An overall response rate (ORR) of 92% was reported for patients with MM, and an ORR of 100% for patients with ALA. The therapy has also continued to show a favorable safety profile, building on a comprehensive data package to support NXC-201 as the first potential outpatient CAR-T therapy, offering significant market differentiation, in our view. Management plans to submit a biologics license application (BLA) for FDA approval in MM once 100 patients have been treated, and in ALA once 30–40 patients have been treated.

• ADEA has seen its stock price decline in the past month since announcing license agreements with two major NAND memory makers
• This could have put too much emphasis on the semiconductor side of the business even though it is purely additive to the business model
• The expected year over year decline in first quarter 2023 revenue is related to one-time license payment last year

• Alibaba Group Holding Ltd. slashed prices for its core cloud services by as much as 50% and offered free trials of some cloud products for as long three months, fueling competition in an already crowded market. 
• Through the price cut, Alibaba Cloud hopes to make the cost of its cloud services significantly lower than costs offered by other data centers
• The valuation of cloud companies is generally based on the price-to-sales ratio rather than the price-to-earnings ratio

• Recent research conducted by industry players – most notably OpenAI – about the impact of generative AI on labor markets provides a framework for gauging its monetization potential.
• We take a small step forward to apply them to two specific occupations in China including translators and computer programmers, which combined represent RMB1,400 bn TAM.
• For China’s internet giants such as Alibaba, generative AI could result in cost savings of up to RMB20 bn, or 14% of its FY2023 net profit.

• FY Mar-23 results fell short of expectations and management is guiding for a weak 1H in the new fiscal year. This looks like a buying opportunity.
• The E-Axle business should reach break-even this year. Rising EV demand in China, Europe and elsewhere, plus general electrification, should take the overall Automotive operating margin to 10%.
• Projected valuations are attractive even if sales do not reach management’s ambitious target.

• AKR Corporindo1Q2023 results demonstrated its resilience with its petroleum and chemicals division continuing to grow in 1Q2023 with the added kicker of a large land sale at JIIPE. 
• The company’s JIIPE Industrial Estate will become an increasingly important earnings contributor but chemical distribution will be driven by smelters and fuel by the BP retail JV at the margin,
• AKR Corporindo is an increasingly interesting proxy for the next stage of Indonesia’s economic growth through its exposure to smelters through its chemicals business and the overall economy through fuel. 

• GoTo (GOTO IJ) reported 1Q2023 results yesterday. Gross revenue increased 14.3% YoY to IDR5.98trn while adjusted EBITDA losses further declined to IDR3.52trn from IDR5.94trn in 1Q2022.
• However, all growth matrices point towards a slowdown compared to the previous quarter with gross revenues of all segments and On-demand take rate declining QoQ in 1Q2023.
• With GoTo prioritising profits over growth, we expect the company’s growth rates to further decline and wonder if the company could hold it for long?

• Air China Ltd (H) (753 HK)‘s 1Q23 result demonstrated a significant YoY and QoQ reduction in losses. At Rmb2.9bn, this is the smallest losses in last six quarters.  
• We witnessed a solid spike in overall yield and sharp margin recovery in the quarter. There is also encouraging performance in operating cash flow which turned around YoY to positive.
• Its associate Cathay Pacific Airways (293 HK) has seen Mar capacity returned to 50% of pre-pandemic level with over 90% load. More resumption of international flights will drive 2H23.

• Bank Negara Indonesia achieved a strong set of 1Q2023 numbers despite moderate loan growth, where the headline masked some significant growth areas, whilst asset quality improvements led to lower provisions.
• The bank continues to stride ahead with its digital initiatives with a multi-touchpoint approach, which has led to increased transactions and a positive impact on CASA and hence funding costs. 
• Bank Negara Indonesia remains an interesting proxy to the overall Indonesian economy through its high exposure to corporate and consumer lending. Valuations are attractive on 1.1x PBV for 15% ROE.

• Tianneng Power International (819 HK) is a supplier of Chinese EV 2-wheelers and has enjoyed decent growth in the past few years. 
• The correlation of top-line growth with its customers suddenly turned negative, a warning sign.
• Is it really cheap at 0.6x PBV? Maybe not, given the current status and the lead time before the recycling business is fully operational. 

• Samsung Biologics (207940 KS) reported year-over-year improvement in sales and operating profit in 1Q23. However, net profit declined 4% YoY due to one-off factor stemming from an acquisition last year.
• The company expects stronger growth in H2 due to revenue contribution of Plant 4 and the launch of Humira biosimilar in the U.S.  
• Based on the strength of CMO business, Samsung Biologics has raised 2023 revenue growth guidance to 15–20% YoY from 10–15% YoY announced in January.

• Millennium Services Group Ltd (ASX:MIL) has announced an update on Q3 FY23 revenue and cash flow from operating activities.
• MIL achieved the first positive quarterly revenue growth since Q1 FY22 at +3.5%, while contract revenue growth was ~+12.6% on the pcp (excludes ad-hoc revenue).
• The COVID-related ad-hoc revenue has now all but cycled out of the quarterly numbers while new contract wins cycle in. 

• The biggest story in the Korean stock market in the past three days has been the crash in 8 stocks related to CFD derivatives.
• As a result of the CFD related margin call selling, the following are the major impact on the 8 related stocks and the overall Korean stock market in our view.
• They include a) overshooting on the downside on 8 related names, b) negative impact on the major rechargeable battery names, and c) negative impact on the overall Korean stock market. 

• The removal of COVID-19 testing requirements for Chinese tourists is expected to increase tourist arrivals from the Greater China region.
• In addition, consensus estimates for Skylark Co Ltd (3197 JP) are increasing due to the company’s faster-than-expected same-store sales recovery.
• Skylark’s annual operating profit could reach ¥20bn if revenues return to pre-COVID levels, which is significantly higher than consensus of ¥5.2bn and guidance of ¥6.0bn.

• We discuss the importance of Hyundai Motor generating nearly 11.5 trillion won in operating profit in 2023, which is likely to be the highest among all Korean companies. 
• Hyundai Motor and Kia Corp combined are expected to generate operating profit of 20.7 trillion won in 2023, representing 57% of total operating profit of the top 10 Korean companies.
• In 2023, Hyundai Motor plans a full-scale world-wide roll-out of its EV Ioniq 6. Furthermore, it set a dividend payout ratio at 25% or higher.

• Isetan Shinjuku has always outperformed competitors by a large distance but the store’s management is intent on widening this gap further. 
• The key will be a focus on premium customers with ever more granular data sets to personalise marketing. 68% of sales now come from cardholders, compared to 50% in 2018.
• While dependence on just a few stores makes Isetan Mitsukoshi Holdings Ltd (3099 JP) vulnerable to downturns – such as the loss of tourist traffic – these stores are also resilient.

• CA reported 2QFY09/2023 results today. Revenue increased 2.4% YoY to ¥195.6bn (vs consensus ¥191.0bn) while operating profit declined 27.0% YoY to ¥18.8bn (vs consensus ¥18.0bn).
• The viewership for AbemaTV has fallen back to pre-FIFA levels and revenue growth from AbemaTV has been on a declining trend.
• CA didn’t release any gaming titles despite mentioning about 3 for 2022. The company has mentioned about 2 titles for FY09/2023 and the segment seems struggling with producing hit titles.

• Vonovia to sell €1bn residential portfolio to US investor Apollo. 
• The transaction could have a signal effect on the struggling German real estate market
• Share price is +13% since our initial note. This could be just the beginning of share price appreciation

• We expect ACMR to report C1Q23 top-line and IFRS net income 2.8% and 83% vs. consensus, respectively. 
• We expect it to raise FY the mid-point of its guidance to US$560mn~, due to YMTC orders and 4Q23 order visibility; 
• We are buyers into earnings but avoid long-positions between reporting dates due to geopolitical risk exposure.

• ASRT is purchasing Spectrum Pharmaceuticals (SPPI) in an all-stock transaction that adds ROLVEDON to its product portfolio.
• The initial reaction to the deal has been materially negative after ASRT added it would maintain a majority of SPPI’s operating expenses.
• ASRT’s management has been looking for an asset that would help diversify the revenue stream away from Indocin. The purchase of SPPI achieves such a goal

• Shakey’s Pizza (PIZZA PM) came in higher than analysts on earnings for FY22, posting an 873 mn peso bottom line number (vs. a 728 mn peso Bloomberg consensus).   
• Systemwide sales grew 101% YoY to 14.1 bn pesos, with 4.5 bn pesos in the last quarter, up 113% YoY. Excluding Potato Corner, growth for the year was 37% YoY.
• Based on their guidance for FY23 of 20% growth on the topline/bottom line, the stock trades at 13.7x FY23e PE with future growth in the mid-teens CAGR. 

• This insight is a short note that aims to ride on short term momentum for the stock
• Since April, southbound trade contributes to 72% of China Mobile H-share turnover.  So, southbound trade is the major share driver
• For entire market, A-share is trading at 40% premium to H-share.  For China mobile, the A/H premium is currently at 80%. Strong upside for H-share if premium is to narrow

• Shimano reported Q1 results post close. Operating profit fell 26% YoY and full year guidance was cut 21%
• We believe that sales in 2023 have simply reverted back to trend. We expect sales to grow in 2024 as underlying demand drivers remain intact
• With the stock down 9% over the past year, we believe the market has discounted the profit revision. We see good value at 17x EV/EBIT

• We estimate that Tencent 1Q23’s rev./non-IFRS net income beat cons. by 3.6%/4.5%. We forecast that VAS/ads/others will have 6.5%/15.3% /17.6% YoY growth in 1Q23. 
• We maintain BUY rating for Tencent because of 1) video account, especially the rapid growth of Wechat Beans (微信豆); and 2) recovery of ads revenue from Ecommerce and gaming.
• We remove Tencent from our top buy ideas because: 1) current consensus has been high; 2) lack of hit title in upcoming pipeline; and 3) launch of DNF casts shadow

• Wynn’s issuance of US$600m in convertible bonds for its Macau subsidiary pushes out maturities by five years, easing investor concerns about debt levels.
• The Macau gaming market is in early stages of pent up demand recovery compared with Las Vegas which is in a mature stage of the cycle.
• Premium mass and VIP customers key to Wynn Macau business model are returning at a faster rate than industry observers have judged. Decline of junkets not hurting VIP in 2023.

• The census and statistics department data for watches and jewelry showed a sharp rebound for HK in Jan-Feb 2023 (up 63% YoY). China sales, we estimate, continue to be resilient.
• Over the last month, secondhand watch pricing has also shown an uptrend of 3-4%. This leads us to believe that demand is having a decent uptick in April. 
• The stock trades at 7.2x PE FY23e, with >50% of the market capitalization in cash and a 15% dividend yield (assuming a 100% payout ratio). 

• We see the recent sell-down of CIMC Enric Holdings (3899 HK) unjustified. 1Q23 revenue grew a healthy 19.6%, and management indicated excellent margin expansion as well. 
• New orders signed accelerated in Mar to 21.6%, from just 10.7% in Jan-Feb. Its order backlog reached Rmb18.9bn (+22.3%). For hydrogen business, new orders even grew 61%. 
• Guidances are for double-digit revenue growth in FY23, and besides better gross margin, lower tax rates have benefited net margin. We estimate 1Q23 profit may have increased ~50%.

• UMP Healthcare (“UMP”) is Hong Kong’s leading private medical service network. Its network spans 1100+ service providers, 1mm+ scheme members, 2000+ contract customers, and over 1.13mm+ annual clinic visits.
• Despite the consistent track record, UMP trades at a 61% discount to its IPO price, 6x PE, and 8% yield with 45% of its market cap in net cash. 
• We see ingredients in place for a multi-year re-rate, backed by HK’s new Healthcare Policy and the company’s strategic tilt towards higher margin service lines supporting future profit growth.

• Excluding COVID-19 projects, some of WuXi AppTec’s conventional CXO business growth rate has declined significantly. So, the fading of COVID-19 dividend period is not the only reason for the performance decline.
• The supply-side reform of innovative drugs is further deepened, and the effect of industry clearing is obvious. So, the “winner-takes-all” logic will be gradually deduced in the future.
• WuXi AppTec’s controlling shareholders seem to “have foreseen something”- They could continue to reduce holdings on rallies in the future. Together with longer-than-expected industry winter, valuation center could further decline.

• For 2022, Vivendi reported a solid set of results as both revenues and EBITA grew strongly despite the challenging market environment
• For 2023, positive momentum is expected to be sustained, as management stays confident in the growth prospects.
• Underlying market growing close 4.6% CAGR to 2026. Solid growth prospects for the Company

• The latest release of the USDA Rice Crop Outlook Report (April 13) provides useful data on the global and US rice markets, which has implications for the rice-related businesses within Ricegrowers Limited, trading as SunRice (ASX:SGLLV).
• The global rice market is forecast to see the second consecutive year of demand exceeding supply (due mainly to supply issues), with global-ending rice stocks expected to be the lowest since 2017/2018 and equal to just four months’ demand.
• Prices for most grades, as a result, remain at record highs (US-medium-grain, which is a proxy for Australian grades) or trending higher in recent months (including Thailand +4%-5% and Vietnam +7%).