Equity Bottom-Up

• Last week, Filipino food manufacturer Monde Nissin Corp (MONDE PM) announced FY22 top-line growth of 6.7%. 
• However, the bottom line spilled red ink after booking impairment losses relating to its Quorn meat alternative ops. 
• The thrust of Quorn/Impossible/Beyond alternatives was that meat eaters would sacrifice their burgers without having to sacrifice anything at all. Yet the Big Meat appetite is not so easily swayed. 

• CSL Ltd (CSL AU) is well-positioned to report double-digit revenue and profit growth through FY25, driven by strong performance of existing business and new growth engines.
• CSL will launch FDA-approved gene therapy Hemgenix for Hemophilia B in the US in 2H23. With estimated global annual peak sales of $2.4B, Hemgenix is a compelling opportunity for CSL.
• During H1FY23, CSL reported record level of plasma collections, with 36% growth in                volume. Current plasma collection is 10% above the pre-pandemic. Higher volume and yield will improve profitability.

• A surprise OPEC cut has sent oil prices higher, a surprise cut could leave the SPR depleted.
• An oil surge could see lower growth and a return to inflation, an oil surge.
• A return toflation could be seen in the future, according to a report by the U.S. Department of Energy.

UK equity capital market (ECM) activity has remained subdued and Numis does not expect a near-term revival. Nevertheless, its strategy of investing in diversification is bearing fruit with M&A advisory showing continued strength and private markets transactions showing signs of picking up. Numis’s strong balance sheet allows it to take opportunities to recruit and maintain investment in technology in the downcycle. This should pay dividends in a stronger market and underpin longer-term growth.

• BHP Group Limited’s recent drawdown presents a lucrative opportunity for investors seeking to lower their portfolio cost basis.
• BHP’s exploration pipeline and planned pivot out of coal might add volume to its stock’s valuation.
• BHP is yet to realize the benefits of higher base metals prices.

• This is our first report on Masco Corporation, a major global player involved in the design, manufacture and distribution of home improvement and building products.
• Plumbing increased by 2% in local currency, with a 7% increase in overseas plumbing offsetting a 1% fall in North American plumbing.
• Over the year, DIY paint saw low single-digit growth, while professional paint saw over 25% growth.

Oryzon has announced promising results from an interim analysis of the Phase IIb PORTICO study, a trial evaluating vafidemstat as a treatment for borderline personality disorder (BPD). An independent data monitoring committee (IDMC) conducted an analysis of the first 90 patients who completed the treatment and recommended that the trial continue without any modifications to the design. These interim results, along with positive safety data reported in September 2022, are encouraging for the clinical development of vafidemstat in this indication, in our view. Management anticipates that top-line data will be shared in early 2024 and we believe this represents the next most significant catalyst for the PORTICO trial.

• This is our first report on the American software giant, Pegasystems Inc.
• The company ended 2022 on a positive note with an all-around beat and a 16% ACV growth.
• Pega Cloud innovation has sped up adoption, and they have made great strides toward modernizing its clients.

• Trigon is cashed up (~$C34M) to initiate and ramp production 5x from FY24 to FY27. We are expecting $31M in operating cash flow in FY25
• Tier-1 copper camp in the making; 500 Blbs of copper found on just 4.2km of the 35km strike. Significant exploration upside still exists and cashflow from operations will allow TM to explore without dilution
• TM is trading at just 0.2x NAV compared to copper producing peers at 0.7x NAV

• Time spent on apps increased by 15% in China in 2022.
• In 2022, total advertising market decreased by 9%, but online advertising market increased by 1%.
• We believe online advertising market will grow significantly higher than total advertising market in 2023.

• This is the Fourth and Final of the HRTech Sector series and we will be discussing Ceridian, ADP, Recruit and Visional performance over the last quarter.
• The remarkable growth spurt experienced post-Covid seems to be slowing down and margins and revenues have mostly returned to pre-COVID levels.
• With digitisation of workplace, the market is expected to see further advancement in categories such as employee experience, talent intelligence, contract workforce management, etc.

• Santen Pharmaceutical (4536 JP) is not seeing any change in competitive landscape of its key drug, Eylea, which contributes 27% of total revenue. No immediate biosimilar launch is expected.
• Approval of bioidentical authorized generic version of Eylea in Japan, label expansion, and potential launch of high dose of the same drug will enable to combat with upcoming biosimilar competition.
• Santen expects China market to revive in FY24. Additionally new products launch and widening geographic presence to drive mid-to-long-term growth of the company.

• Diabetes care growing strongly, with continuous market share gain, now reaching close to 35%
• New chapter of growth has started as Novo makes strides in obesity, a larger market than diabetes.
• Capex for 2023 and beyond is expected to double as Novo prepares capacity to supply a growing demand for its products

• Our focus charts this month are on Brazil banks’ liquidity and capital adequacy trends, which seem reassuring to us, as these are currently topical bank ratios in investors’ minds
• The February NPL trends due to seasonal factors, we are concerned at the pace of NPL ratio worsening and arrears, especially in household credit
• YoY system loan growth to February decelerated further to +12.6%, largely due to slower corporate loan growth; credit spread trends were mixed with individual spreads widening, and corporate spreads eroding

• No matter how good a story is, it needs to be supported by sales data.If sales of Toumai cannot scale up, the complete closed-loop of surgical robot+consumables+solution/service would be groundless.
• The commercialization dilemma has become “a dark cloud” for Medbot. Before Medbot makes any breakthrough in internationalization or establishes an effective profit model in China, the Company lacks investment logic.
• The catalyst for stock prices from favorable policies is not lasting. Weaker-than-expected financial performance would quickly throw valuations into correction. As things stand, Medbot is only suitable for short-term trade.

• Dongfang Electric (1072 HK)‘s 35.1% increase in FY22 recurring earnings demonstrated its healthy operations. Slowdown in 4Q22 (+14.4% YoY) is more a result of pandemic disruption. 
• Record new orders of Rmb65.6bn were signed FY22 (+16.3% YoY), and 4Q22 even saw a 25% growth. End-FY22 backlog is estimated to be enough to cover 1.66x FY22 revenue.
• DEC targets a 35% growth in power generation equipment production volume in FY23. Power storage, including pumped storage, and hydrogen energy are important engines going forward.

• Considering DS-8201’s outstanding data and strong competing drugs, RC48 would probably contribute revenue to RemeGen mainly from GC and UC indications in China.Overseas revenue would be mainly from UC indication.
• After Pfizer acquired Seagen, there are concerns that RC48 (a “Me-Worse”) may be returned by Pfizer. If it is the case, only the revenue in China market should be considered.
• Based on 2022 annual results, we think it is time to reassess the outlook and sales forecast of RC48 and RC18, because the story has changed for RemeGen.

• FY22 results announced last week were in line excluding non-recurring items. The results provided latest evidence of monetization potential of its passenger traffic and insights into its cost base.
• We trim 2023 net profit estimate by 10% to RMB520 million and maintain RMB1 billion net profit estimate for 2025.  Expect 25%/150% return by 2023/25 respectively based on 20x P/E.
• Duty-Free concession agreement renewal in 2025 is a key positive catalyst, but we also caution potential follow-on share issuance this year could be an overhang on stock price.  

• This week, space launch company Virgin Galactic’s funding woes escalated as emergency talks with potential investors fell through.
• As a result, the company announced a staggering 85% workforce reduction and paused operations until further funding is secured.
• Since going public in 2021 with a $3.7 billion valuation, Virgin Orbit’s value has plummeted by 99% as of its last close, highlighting the realities of space investing.

• The 8th national VBP released results, with an average price reduction of 56%. On the whole, the peak period of the impact of VBP on pharmaceutical companies has passed.
• VBP document of Chinese patent medicines was released, which would affect a market with scale of RMB300 billion. Enterprises with rich product matrices/new products can better cope with this VBP.
• For AIM, we listed several key points. Since the management are more interested in short term capital gains rather than developing a superior portfolio, AIM doesn’t have long-term investment value.

• This is our first report on Global Payments Inc., a financial technology company providing payment solutions and services in the U.S.
• The company managed an all-around beat in its last result with a strong performance in Global Payments despite the increased global macroeconomic uncertainties.
• The most significant development was that their core Issuer business once more produced sequential financial and operational improvement, in line with their expectations and the strongest results since their merger with TSYS in 2019.

• This is our first report on Burlington Stores, Inc., one of the major off-price retailer chains in the U.S.
• The company delivered a strong quarter, with sizable, consecutive improvement in its sales trends.
• Comparable store sales increased by 6% and the the result was an all-around beat.

• The valuation divergence between Delta Electronics Thai (DELTA TB) and its parent Delta Electronics (2308 TT) has hit a new extreme.
• Delta Thailand surged 9.3% Thursday on no news, even prompting the Thailand Stock Exchange to query the company.
• Delta Taiwan’s stake in Delta Thailand is now worth more than all of Delta Taiwan. The valuation divergence would seem unsustainable, however when things revert is uncertain.

• While all eyes are on Alibaba splitting its business into six mini-Babas, some were quick to conclude that Tencent could be the next candidate for a similar split.
• Unlike Alibaba (ADR) (BABA US) whose business units have clear divisions and stand on its own, Tencent (700 HK) ’s businesses are interconnected making a similar split very difficult.
• Having looked at Tencent’s business units and past regulatory probe on the company, it seems unlikely for the company to be the next candidate for an Alibaba style separation.

• RH is the only luxury lifestyle brand at scale on this planet;
• Both qualitative and quantitative evidence point to the emerging and probably widening economic moat around the business;
• We see rich optionality regarding RH’s growth trajectory moving forward;

• Synergy Green Industries (SYGIL IN)  is engaged in the business of foundry i.e., manufacturing of wind turbine casting and other large precision castings.
• The company has been quite aggressive regarding its capex in the last few years especially, but the value add of these projects remains to be seen.
• Levered balance sheet, volatile business operations coupled with high related party transactions are some of the discomforts on the forensic front.

• Siloam International Hospitals (SILO IJ) is coming out of the COVID period with guns blazing as base case revenues continue to grow, surpassing pre-pandemic levels and with margins improving. 
• 2022 was a year of two halves and 2H2022 saw a clear resumption of base case patient activity, Siloam also saw the benefits of unified pricing and improved efficiencies.
• Siloam looks well-positioned to grow its base case revenues further in the coming year, with a healthy cost base and more beneficial pricing. Valuations are attractive on 9.4x FY2023E EV/EBITDA.

• Another smallish one, but EV of ~$500m (bigger than PRST but still illiquid b.c. low free-float).
• Equity is probably not worth much more than $0. I’m not short this yet, because I fear that management still has some fight left in it to ride the AI-hype.
• I want to get my timing right. It is a heavily shorted stock which has been the victim of squeezes multiple times in the past. And I don’t much fancy getting my head ripped off.

• The company’s financial statements reveal a few critical concerns relating to a receivables build-up, increasing credit allowances, and high short-term borrowing.
• The firm’s misfortunes were due to non-core events such as impairments, marketable security losses, and abnormal inflation.
• The economy is on a knife’s edge, and cyclical stocks such as Ford Motor Company (NYSE:F) look like 50:50 bets.

During H123 Quadrise made further progress on the three projects that provide the company with the fastest and most material paths to commercialisation. Assuming that the ongoing discussions regarding a licence agreement with Valkor in Utah complete soon, management expects Quadrise to generate its first commercial revenues, which would be from IP licencing, during Q423 (Q2 CY23).

As a specialist lender, S&U is sensitive to the economic background, but in its main motor finance business it has a strong track record of managing and growing through bumpy conditions. The newer property bridging business is maturing and shares a focus on customer service and a conservative underwriting approach. This provides the group with a sound basis for sustainable long-term growth.

The US Food and Drug Administration (FDA) has granted Breakthrough Device designation (BDD) to Pixium’s wireless Prima bionic vision system (BVS), which is currently being assessed in the European PRIMAvera pivotal study in patients with geographic atrophy due to age-related macular degeneration (GA-AMD). This achievement suggests that the FDA recognises GA-AMD is an irreversibly debilitating human disease and that Prima BVS has the potential to provide an effective treatment in this area of unmet need. Pixium remains on track to report top-line data from PRIMAvera in or around year-end 2023. If positive, a CE Mark regulatory marketing submission can be filed in 2024, which we estimate could lead to commercialisation of the Prima system in H125.

• Alibaba Group (9988 HK)‘s shares rallied after announcing the business split, with investors believing that the sum of parts could be worth more than the current valuation.
• Our analysis shows that NAV is only 12% higher than the current valuation, contrary to the idea of a significantly higher sum of parts value.
• Therefore, we would be looking to short Alibaba (ADR) (BABA US) yet again once this initial excitement settles.

• Bukalapak (BUKA IJ) may have disappointed some in missing on TPV but that is unimportant when it executes convincingly on improving take rates for both marketplace and its Mitra business. 
• The number of Mitra Bukalapak partners has increased to over 16m, with active Mitras taking increasing services and higher take rate products from Buka’s marketplace and specialty stores.
• Bukalapak beat on revenues and adjusted EBITDA and its guidance for adjusted EBITDA-positive by 4Q2023, with continuing improvements to take rates driving improvements. Valuations are attractive at <1x FY2024E EV/Sales.

• ADR premiums for dual-listed Taiwan shares have overall been on the uptrend this week, as semiconductor industy optimism in the U.S. as increased.
• TSMC’s ADR premium appears to be trading at a new higher range in the last few months.
• Other spreads have risen as well lately; it’s probably best to wait for significant reversals, which usually happen within two weeks at most.

• Cisarua Mountain Dairy (CMRY IJ) is one of the most interesting consumer staples players in Indonesia, with a leading position in dairy and specifically yoghurt, and increasingly premium consumer foods.
• 4Q2022 saw a slowdown in sales growth as consumers returned to the mall due to inflationary pressure but December saw a sharp recovery and 2023 should see continued recovery.
• Flavoured UHT Milk and a new Yoghurt stick aimed at the mass market will help to fuel growth and raw material cost pressures have started to alleviate. Valuations are attractive. 

• Kuaishou’s 4Q22 top line beat our est. by 3.9%, and non-IFRS net income was higher than our est. by 85% due to cost-saving measures.  
• We raise forecasts for its ads and eCommerce growth due to on-track macro recovery. However, we are still concerned about the intensified competition from WeChat Video Account.
• Maintain SELL for competition scenario, but slightly raise TP to HK$ 58 to reflect macro recovery. Our TP implies 2.1X PS/239X PE in 2023.

• Prodia (PRDA IJ) FY2022 results saw declines in revenues and profits but from a COVID-high base and the numbers are now well-above 2019, with strong prospects ahead.
• The company is seeing a return to routine testing with tests per visit back to pre-COVID and revenues per visit also rising strongly, with a diverse customer base providing comfort.
• Prodia also has an increasing digital angle with the rising use of its app and a new app that tracks patients’ health just launched. Prodia (PRDA IJ) is too cheap.

• Dr Lal PathLabs Ltd (DLPL IN) reported 2% and 8% revenue and net profit decline in Q3FY23, respectively. Q3 results were dragged by an 80% YoY decline in COVID-19 revenue.
• While non-COVID revenue increased 9% YoY to INR4.78 billion, it declined 7% QoQ. In fact, Q3FY23 non-COVID revenue was the lowest over the last three quarters.
• Although diagnostics is a big and attractive market opportunity in India, the sector is overcrowded, leading to heated price competition and declining realization per test.

• We review Taiwan’s recently completed earnings season for both the Semiconductor and Tech Hardware sectors.
• Companies by and large missed expectations, with the % of revenue and earnings misses substantially higher for the 4Q22 earnings season than was the case for the 3Q22 earnings season.
• High inventory levels have persisted in both Semiconductors and Hardware, however appear to have leveled off at high levels rather than having become worse.

• We rate Bank Mandiri as our top pick with its attractive valuations including PEG ratio relative to solid returns and strong balance sheet – including liquidity –  metrics
• We also continue to favour Bank Negara, but it is our secondary value pick to Mandiri; Bank Central Asia, albeit fully valued, has impressive liquidity and return metrics
• Bank Rakyat had mixed returns in 4Q22, with pre-provision returns declining sharply QoQ although cost of risk continued to improve, due to better credit quality, thereby supporting post-provision profits

• Vonovia has a high negative correlation to interest rates. What if interest rates were to stabilize or fall?
• Feedback from discussion with Head of IR gives confidence in the long-term prospects of the group
• Share price -32% ytd. Vonovia trades on a ~70% discount to its adjusted NTA

• Mitsui OSK is up 460% since June 2020. Almost gravity defying. Strong Container profits have lead to high dividends. Now Shareholders hang on for one more big payoff
• Container rates have just about to reverted to pre-pandemic levels. Utilization is falling; Capacity coming on; Customers using spot. All points to potential losses next year for  Containers and ONE
• We expect a major profit decline=>div cut; How far could share price fall ? See the share price vs Shanghai Container Index correlation below.  We are bearish Mitsui OSK. 

• Sunpower Group (SPWG SP) announced it agreed to a 2-year extension of its CBs with two Chinese P/E funds that have been supporting it since 2017
• The extension is unexpectedly favorable to Sunpower equity holders and removes a major overhang
• After two difficult years with spiking coal prices and rolling lockdowns in China, the company can finally be valued on the merits of its GI business once again

• Loyalty points offer a significant incentive for consumers when deciding where to buy and many surveys confirm that points are a key factor in selection of online store.  
• With inflation biting, the big loyalty programmes are promoting points as a way to save on future purchases.
• Rakuten is by far the largest provider (10 pts above anyone else) and is enjoying strong growth – which could help adoption of its mobile store.

• Core earnings of Kunlun Energy (135 HK) rose 25.2% in FY22, providing solid evidence for its strength against peers. We are delighted to see dollar margin even expanded 4.1%.
• Pace of new project addition has not weakened as it secured 25 new projects in FY22. Collectively, they will increase sales volume by 3.2bn cu.m., 7% of FY22 volume.
• Net cash of Rmb13.6bn equals 28% of share price, making 8.9% ROE look decent. Market earnings forecast is too low; and even so, it trades on just 7.2x FY23 PER.

• Pokarna Ltd (POKR IN) is principally engaged in the business of quarrying, manufacturing & processing and selling of Granite & manufacturing and selling of Apparel under the brand name ‘Stanza’.
• One of the key audit matters related to IT systems risk, and these are reflected by some of the accounting misclassifications.
• Other forensic concerns include high cost of debt on and ICDs and director loans, added WC burden, inventory valuation, etc.

• Capital Expenditure – New Investment in Mexico Plant in 2023
• The company achieved a solid performance in its Recycled Lead business and Power Solutions business with a revenue growth of 18% and 13%, respectively, as compared to 2021.
• The revenue for Recycled Lead business and Power Solutions business was RMB2,413 million and RMB10,433 million respectively. 

• Chinese restaurant sector could see 15% YoY revenue growth in Q1 2023, as Total Retail Sales of Meals in China rose 16.4% YoY during Jan-Feb 2023.
• Yum China Holdings Inc (9987 HK)‘s 1Q23 OP may reach a record high of $350m, and annual profitability is expected to double as restaurant footfall recovers.
• We suggest buying Yum China for potential multiple expansion due to rapid profitability growth.

• Telekomunikasi Indonesia (TLKM IJ) results reflect a company increasingly digital in nature with legacy services fading away and an increasing focus on building both quality infrastructure and subscribers. 
• Despite losing subscribers last year, customer data consumption picked up and the ARPUs also improved reflecting a more profitable subscriber base. Indihome continues to see growth in its customer base.
• Telkom continues to strengthen its presence in the cloud business and data centres as future growth drivers. Valuations are attractive versus historical levels with strong growth prospects ahead. 

• AKR Corporindo (AKRA IJ) booked an impressive set of numbers significantly above consensus with net profit increasing +117% YoY driven by strong performance across all segments.
• Trading & Distribution will be driven by both the demand for petroleum products together with chemicals, especially from the increasing number of smelters in Indonesia, both for copper and nickel.
• JIIPE industrial estate booked 44.5 ha of sales, above guidance, with expectations for 70-75 hectares of land sales this year. Valuations are significantly below the historical average and consensus low.

• FY22 is definitely bad for Shenzhen International (152 HK) given the 64.9% profit plunge. However, negative contributors like Shenzhen Airlines and exchange losses will be removed in this year.
• Earnings for Shenzhen Expressway (548 HK) will improve and 1Q23 has witnessed good traffic recovery. Logistics profit will benefit from higher occupancy, REIT issuance and new projects.
• Upside will come from logistics park transformation with profit from Yicheng Qiwanli pre-sale potentially to be booked. Consensus earnings forecast of HK$4.1bn is at low-end of our estimate. 

• Seven & I has revamped its corporate board and announced an updated MTP that improves capital allocation. However…
• Activist investor ValueAct has turned hostile and is seeking to replace the President and three other directors
• The stock price has declined by 12% from its year high and we see substantial upside to our intrinsic valuation

• Consensus estimates suggest that Nitori Holdings (9843 JP)‘s gross margin will experience a sudden change affecting profitability for a few quarters, before returning to 6-8% below the long-term trend.
• We see no apparent reason for a drastic change in Nitori’s profitability and expect it to remain slightly below trend, in line with guidance.
• Nitori is expected to reach ¥140bn and ¥150bn OP for FY24 and FY25, with valuation at 13.3x and 12.4x OP. This is reasonable given Nitori’s rare history of low multiples.

• Meituan reported C4Q22 total revenue 4% higher than cons. Non-IFRS net margin beat cons. by 0.4ppt due to strong cost control during lockdowns.  
• Meituan has limited options against Douyin’s fast expansion of new service categories and customized offerings. The competition against Douyin will continue to pressure the in-store business in the long run.
• Maintain SELL and cut TP to HK$125. Our TP implies 3x PS, 10x PE and 1x PS for on-demand delivery, in-store, and new initiatives, respectively.

• In-depth presentation of retail digitalization raises expectation of retail spin-off. Asset disposals and increased DPS potential 2H catalysts
• Limited impact from trade tensions; oil tailwind
• Following 2 years of single-digit earnings growth, growth is likely to accelerate to double digit as headwinds from strong euro/GBP and weak oil prices eases and global economy continues to rebound.

• Zydus Lifesciences Ltd (ZYDUSLIF IN) reported total revenue of INR43.6B, up by 20% YoY and 6% QoQ, in Q3FY23. Key markets, India and the U.S. continued to deliver robust performance.
• U.S. business is on track to register QoQ growth in near-term, with the launches of new products. Zydus plans to launch 2–3 transdermal products in U.S. in FY24.
• For its India business, the company aims to outperform the industry growth sustainably in the medium to long term. Lipaglyn is expected to be among top 25 products of India.

• Home First Finance (HOMEFIRS IN) lends to a customer segment exposed to high income volatility.
• Soft bounces are used by customers to manage their cash flow, with bounce charge collection done on a best-effort basis, management attitude towards financial discipline warrants attention. 
• While there may not be any immediate asset quality issues, caution is warranted. 

• Indosat (ISAT IJ) has come back from being the loss-making underdog amongst the Indonesian telcos and is now well and truly on the rebound, with significant potential upside.
• The acquisition of Hutchison’s “3” has propelled the company into the number two spot in terms of market share and enabled better quality coverage after a well-orchestrated merger. 
• Indosat now has a 4G footprint in Java greater than Telkomsel and with significant potential to gain share ex-Java, which provides higher returns. Valuations remain attractive. 

• Interim results beat with strong results across most business lines
• Life insurance new business value growth reversed to positive growth in 2Q and should accelerate
• Fair value trimmed to HKD98 but headwinds abating in 2H

• Net profit up 19% YoY on strong revenue growth. New order flow remains decent.
• Maintain IDR 2,300 TP, valuations look attractive
• With a diversified portfolio of private construction and public infrastructure projects, WIKA offers broad exposure to Indonesia’s infrastructure investment growth

• Micron earnings this week, will provide insight on the outlook for the memory chip space.
• The Taiwanese market has substantially lagged the surge in the Philadelphia Semiconductor Index.
• Chinese firms are trying to poach engineers from TSMC and UMC by offering 2-3x their salaries.

• Samsung FN REIT announced its IPO book building results. The IPO price was determined at 5,000 won per share. The demand ratio was 24.88 to 1. 
• The core investment thesis of Samsung FN REIT is that it is the only publicly listed Samsung affiliate that provides REIT services.
• It is a stable business with excellent locations for its existing properties and the company is expected to provide 5.6% annual dividend yield in the next three years.

• In 4Q22, the growth rates of total revenue and most business lines are better than our expectation.
• The operating margins have stayed at a low level for the third quarter.
• We believe the stock has an upside of 45% and a price target of HK$204 for year end 2023.

• After posting a decent FY22 result, earnings momentum for CIMC Enric Holdings (3899 HK) should sustain, underpinned by clean energy recovery and chemical and environmental equipment demand.  
• 2M23 new orders growth stayed healthy at 10.7%, evidencing positive demand outlook. Hydrogen Energy is a growing driver as revenue will reach Rmb700m in FY23 and Rmb3bn in FY25.
• The stock’s PERs of 11.7x and 9.5x for FY23 and FY24, respectively, appear inexpensive in view of 19% earnings CAGR. Net cash position also adds an appeal to us.

• Meituan (3690 HK) reported 4Q2022 results. Revenue increased 21.4% YoY to RMB60.1bn (vs consensus RMB57.7bn) while reported operating losses dropped to RMB732m (vs consensus RMB1.4bn) from RMB5.0bn in 4Q2021.
• Covid outbreak in China in 4Q2022 led to strong growth in food delivery service revenues, however, losses have widened compared to 3Q2022 due to increased rider costs and others.
• We expect Meituan’s top line growth to slow down and margins to remain under pressure with Douyin’s entry into food delivery and the company’s expansion into Hong Kong.

• Chinese Apps’ time on site decreased to 26.7 hours in 2022 from 28.5 hours in 2021.
• The Press and Publication Administration approved 27 imported games in March.
• Douyin launched a medium-duration video app, which can be Bilibili’s competitor.

• China Power International (2380 HK) will enjoy another year of strong earnings improvement in FY23, as coal-fired segment returns to profit and new energy capacity drives growth.
• Solar and wind capacity will increase 66.5% and 23.1%, respectively, raising new energy’s proportion to over 70%. Profitability for hydropower also looks to recover in this year.
• There is huge room for asset injection from SPIC given the parent’s new energy capacity of 139GW, with only 20GW in CPI. Its FY23 PER of 8.4x PER is attractive. 

• Hanmi Pharm (128940 KS) posted revenue of KRW1.33T in 2022, the largest ever in the company’s history. Strong product competitiveness driven by high R&D investment strengthened Hanmi’s dominant industry positioning.
• In October 2022, Hanmi’s US partner Spectrum Pharmaceuticals launched Rolvedon in the U.S. market. During 4Q22, Rolvedon generated revenue of $10.1M. Rolvedon is expected to report $100M revenue this year.
• By leveraging on its biopharmaceutical development and manufacturing capabilities, Hanmi plans to launch a large-scale CMO and CDMO, which can be the new growth engines of the company.

• RBC analysts noted that luxury fashion buying is dwindling.
• Luxury fashion buying has been down to sportswear, according to RBC analysts. RBC: “Squeezed consumers are turning to sportsswear. 
• NIKE (NYSE:NKE) recently released its Q3 earnings report which beat analyst estimates. 

• The pandemic has been a catalyst for change, propelling the edtech sector to unprecedented heights as traditional educational institutions scrambled to adapt.
• However, as we enter 2023, the landscape has shifted significantly from the edtech boom of 2021.
• Companies now face the challenges of customer retention, unit economics, and the looming shadow of inflation and recession concerns.

• First quarterly profit in 4Q’22 (first amongst the 3 main emerging brands) has raised expectations of full year profitability in ‘2023
• Launch of BEV will increase production, R&D, platform depreciation and marketing costs
• Despite our expection of revenues doubling y/y in ’23, profitability may not increase accordingly