Equity Bottom-Up

• After peaking in H122, container rates have tumbled back to pre-Covid levels in Q123
• We believe core profitability has also declined to pre-Covid levels for some carriers
• Evergreen Marine Corp (2603 TT) no longer looks expensive, trading at 70-75% of replacement  cost.

• JD Health reported 2H2022 results. 2H revenue increased 55.5% YoY to RMB26.5bn (RMB24.2bn) while fall in GPM and an increase in fulfilment costs led to operating losses during the period.
• Product revenues (JD Pharmacy) continues to account for a majority of JD Health’s revenues that generate lower GPM compared to Marketplace and other revenues.
• JD Health’s share price has moved up over the last few months but further decline in GPM  could pull the share price down suggesting it could be a Good Short.

• 2023 will be a transitional year for SD Biosensor (137310 KS), with revenue and earnings taking a massive hit due to the declining revenue contribution of the COVID-19 tests.
• The company is reaping the benefits of its continuous effort in adding new growth engines through M&A and global expansion of its all-in-one molecular diagnostic system called the Standard M10.
• SD Biosensor is set to enter the US market through the acquisition of Meridian. With ~40% share of the global IVD market, the US has big potential.

• Yilli’s aggressive marketing in 2Q raised market concerns over intensifying competition
• An outright price war is unlikely as its closest competitor, Mengniu, is not willing to follow suit
• Margin remains under pressure on rising input cost
• Trimmed fair value to CNY22.5 (from CNY26.1)

• Net profit up 3% on higher toll revenue and operating margin expansion.
• Longer term concerns remain, maintain IDR4,900 TP.
• With 62% of Indonesia’s toll roads by length, JSMR offers exposure to Indonesia’s ongoing urbanisation and infrastructure spending plans. Near term, government intervention in toll tariffs will likely weigh on the stock.

FY22 was the first year since its inception that CVC Income & Growth (CVC IG) saw a negative NAV total return (TR). Its euro and sterling share classes produced NAV total negative returns of c 8.3% and 6.8%, respectively, which compares with 3.3% and 1.9% negative TRs by the Credit Suisse Western European Leveraged Loan Index (CS WELLI) in euro and sterling terms, respectively. This was primarily the result of downward mark-to-market valuation adjustments (resulting in unrealised losses for CVC IG), driven by price declines in the European loan market amid higher risk aversion. Meanwhile, defaults in the European loan market remained low at 0.4% in 2022, based on the Morningstar European Leveraged Loan Index (with no defaults in CVC IG’s portfolio). Subsequently, European loan markets rebounded strongly in January and February 2023, leading to 6.7% and 6.9% returns for CVC IG’s euro and sterling share classes, respectively (therefore allowing CVC IG to almost fully recoup the 2022 loss).

• Qualcomm has appeared on the radar for attractive dividend plays.
• The current yield is among the highest in the sector and also appears safe based on historical data.
• There are a number of important risks that overshadow Qualcomm’s ability to consistently increase its dividend.

• Steelcase reported 4QFY23 on March 22 after the close, with a beat on adjusted EPS and revenues. Guidance for FY24 beat estimates, then in print.
• 4QFY23 adjusted EPS was $0.19, above our estimate of $0.12 and consensus of $0.11. GAAP EPS was $0.13, above our estimate of $0.06. 4QFY23 revenue of $802 million was a ~$50 million positive surprise.
• The positive earnings and revenue surprises were due primarily to core corporate business in the Americas and EMEA segments.

• UI is coming off a strong performance in the December quarter but should continue to show improving margins as the Company maintains products in stock and at higher prices
• The March quarter can be seasonally challenging. For Ubiquiti, it could end up being a period where customers are able to find the products they are looking for in stock 
• In the March quarter Ubiquiti has maintained a higher level of product availability than what we had been observing in the prior year

• 1H18 net profit of MYR3.83bn grew 14% yoy, driven by higher interest income growth and continued cost management. Interim dividend of 25 sen consisting of 15 sen cash portion and 10 sen electable portion.
• Group gross impaired loans ratio picked up in 2Q largely due to deterioration in Singapore corporate book (classified Hyflux group exposure of MYR1.95bn as impaired and provisioned ~RM315.1mn in 2Q).
• Fair value reduced to MYR11 implying 1.6x p/b. FY18 targets were maintained. Focus ahead on continued costs controls and margins after taking cautious approach on liquidity in 1H.

• Headlines for GoTo 4Q2022 and FY2022 headlines do not tell the whole story, given large one-off charges for goodwill write-downs, without which significant progress has been made towards profitability. 
• GoTo significantly reduced incentive&product marketing spending in 4Q but also posted decent growth, albeit at a slower pace, with an increasing emphasis on building foundational products to drive future profitability.
• 1H2023 will see slower headline growth from a COVID base but 1Q2023 should see improving take rates and CM breakeven. This is the transient stage of the long-term GoTo story.

• Oisix is Japan’s largest online food retailer but sales were flat in 1Q-3Q2022 as people returned to work and cooked less, and profits suffered as inflation brought increases in costs. 
• The company’s US operation also shrank as fewer people bought food online now that many Japanese are back to normal working patterns again.
• But other international subsidiaries and its expanded wholesale businesses at home all grew strongly.

• XPeng Inc. has predicted that revenue and vehicle deliveries will nosedive in the current quarter after the Chinese electric-vehicle (EV) upstart reported slowing sales growth and a loss that nearly doubled in 2022.
• The company’s revenue will likely plunge 43.7% to 46.3% year-on-year to between 4 billion yuan ($581 million) and 4.2 billion yuan in the first quarter of 2023.
• The outlook is based on an estimate that its deliveries will plummet 45% to 47.9% year-on-year in the same quarter to around 18,000 to 19,000 vehicles.

• China Huarong Asset Management Co. Ltd. expects to post a net loss of 27.6 billion yuan ($4 billion) for 2022.
• Citing factors including volatility in the capital markets leading to declines in the value of some assets, business transition and the real estate industry slump.
• The bad-debt manager said it adjusted its business structure last year, resulting in less nonperforming asset acquisition and restructuring and less revenue.

• Once a major hit with young women, Samantha Thavasa has struggled to find relevance in the past five years.
• Despite an injection of capital and management from new parent, Konaka, the business has continued to close stores.
• While Konaka is restructuring the business, the brand’s low levels of recognition with the younger generation will likely mean further retreat.

• There’s been a major disconnect between performance of the Philly Semiconductor Index and the Taiwan market recently.
• Semi optimism has picked up substantially in U.S. markets and institutional favor towards the Taiwan market could improve as a result.
• We indentify US$1bn+  market cap stocks most under-held by institutions, as well as those who may be most at risk of a short squeeze.

• 4Q22 results release on 23rd February 2023.
• Expect NIM expansion of ~20bps quarter-on-quarter (QoQ) for 4Q22E, while FY23’s NIM guidance and updates on its Citi consumer business integration would be of focus.
• Citi acquisition to add to full year NIMs and growth prospects from FY23, despite potential uptick in asset quality risks, which should be manageable.

• If WuXi Chemistry’s performance shows downward trend, the overall performance growth won’t be satisfactory. The negative growth of WuXi DDSU means that ineffective competition for domestic innovative drugs is decreasing.
• The asset structure is shifting from light asset to heavy asset.It’s particularly crucial whether business model of “one-stop end-to-end service+royalty income” can enable WuXi AppTec to explore new growth points. 
• The current sentiment on CXO is “fragile” because CXO doesn’t have performance sustainability and stability, with “risk discount” problem. Its valuation haven’t reached inflection point. Without industry beta,alpha is useless.

• China approved its first homegrown Covid-19 vaccine using the advanced mRNA technology, months after the country pivoted from its “zero-Covid” strategy toward living with the virus.
• The vaccine, developed by CSPC Pharmaceutical Group Ltd., was approved for emergency use by the National Medical Products Administration.
• The shot, known as SYS6006, primarily targets the omicron variant BA.5 and can be stored at 2 to 8 degrees Celsius (36 to 46 degrees Fahrenheit) “for a long time,”.

• Tencent reported 4Q22 top line/ bottom line of 0.3%/(3.7%) vs cons. Online ads is stronger, while gaming and G&A slightly missed our est. 
• We expect that ads will be the main driver, thanks to video accounts. Gaming will have better performance after more approved game codes.
• We raise 2023 ads growth from 12% YoY to 15% YoY. Raise TP to HK$ 433. Maintain Tencent as one of the top picks in China Internet

• Following the collapse of SVB and Signature Bank last week, Japan’s big four banks have fallen by around 15% due to their exposure to US government bonds.
• However, the Japanese banks have managed the interest rate risk far better than the collapsed US banks and therefore, we feel the price drop is unwarranted.
• With Japan likely to scrap its zero rates policy, we think this could be a rather intriguing opportunity to make generous gains on the long side in Japan’s banking sector.

• Good news from Nike’s Q3 report, which bodes well for Asics March quarter
• Why was Nike’s stock down? Margins were down 330bps on inventory mark downs
• Running is recession proof according to the footwear makers themselves

• We believe both 4Q22 and 1Q23 can be weak quarters.
• However, we believe operating losses will shrink significantly in 4Q22 and 2023.
• We believe the stock has an upside of 77% for year end 2023.

For our next Corporate Webinar, in partnership with the SGX, we are glad to welcome Uni-Asia’s Group CFO, Lim Kai Ching.

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

About Uni-Asia

Uni-Asia Group Limited is an alternative investment group specialising in creating alternative investment opportunities and providing integrated services relating to such investments. The Group’s alternative investment targets mainly include dry bulk ships and properties. The Group also has extensive know-how and a network relating to such alternative investments and provides services relating to these investments. The two main alternative asset classes the Group focuses on are Shipping and Property.

• Three major catalysts of Poya International include easing of mask mandates/COVID restrictions, strong growth in dividends and earnings, and market share gains from competitors. 
• Poya International is the dominant supplier of cosmetics, health care products, personal care products and household products in Taiwan.
• The company continues to execute its business strategy better than its competitors and this is evidenced in its strong growth in profits and dividends in the past year. 

• As we expected in the preview, total revenue stopped decreasing in 4Q22.
• WeChat advertising recovered in 4Q22 earlier than we expected in the preview.
• We believe game-related revenues will grow by 8% in 2023 and 19% in 2024.

• CSPC Pharmaceutical Group (1093 HK) reported 11% YoY revenue growth in 2022. The finished drug business maintained steady growth in 2022, with a continued increase in contribution from new products.
• Within the next 5 years, more than 40 innovative drugs are expected to be approved, which will provide continuous momentum for the company’s development.
• In March 2023, CSPC’s COVID-19 mRNA vaccine SYS6006 has become the first independently developed mRNA vaccine product in China that has been granted for emergency use.

• Tencent (700 HK) reported 4Q2022 results yesterday. Revenue increased 0.5% YoY to RMB145bn (vs consensus RMB)143.5bn while adjusted OP increased 30.1% YoY to RMB28.4bn (vs consensus RMB37.2bn).
• Online advertising revenues saw a 14.8% YoY increase during 4Q2022 after 4-consecutive quarters of decline with January and February showing sustained recovery.
• Though Domestic gaming revenues declined in 4Q2022, with new gaming licenses and international expansion, we expect gaming revenues to start growing from 1Q2023.

• While adjusted net profit of Tongcheng Travel Holdings Ltd (780 HK) plummeted in 4Q22, the positive momentum in 1Q23 as revealed supports a sharp recovery in FY23.
• Its huge exposure to lower-tier cities will fuel outlook while increase in monetisation will support profitability rebound. Success at Blackwhale membership program is another growth engine.  
• Management is confident that revenue growth and better efficiency will lead the return of FY23 margin to pre-pandemic levels. Net cash position (12% of share price) is an added strength. 

• Tencent Music (TME US) reported 4Q2022 results yesterday. Revenue decreased 2.4% YoY to RMB7.4bn (vs consensus RMB7.3bn) while reported operating profit more than doubled to RMB1.4bn (vs consensus RMB1.3bn).
• Online music revenues grew 24% YoY while social entertainment business continues to see decline in paying users and ARPU. Margin improvements were driven by spending cuts.
• Social Entertainment is losing its importance and the segment continues to remain under pressure due to competition from other platforms.

• International Housewares Retail (1373 HK) is an interesting value/growth (5-10% CAGR) play with a high-dividend yield of >10%, trading at 8.1x FY23 PE. 
• The claim to fame for this company is the investment of legendary HK mid/small cap investor David Webb (who has a 6.9% stake in this company). 
• At a market cap of 2 bn HKD, the company has about 400 mn HKD net cash (20% of market cap), making it 6.9x ex-cash PE.

• Del Monte Pacific reported a steep decline in profits led by a fall in gross margins and a steep rise in interest costs for the quarter ending 31st Jan 2023.
• The company’s gearing has risen to 5.8x led by (1) the refinancing of preference shares and expensive debt (2) acquisition of the Kitchen basics brand (3) increased working capital loan.  
• Del Monte’s precariously bloated debt levels and tighter operating conditions, given inflation-led cost pressures and moderating demand, in the current high-interest rate environment heightens the company’s financial risk.

• The stock is down sharply over the past few weeks as investors price in higher interest rates and weaker spending on durables
• Mitsubishi recently unveiled its mid-term plan and further details on its electrification strategy
• If management can hit its targets, the stock would have significant upside. We have our doubts

• Nvidia CEO to unveil new developments at the company’s GTC developer conference tonight Asia time. TSMC and ASML could have read-throughs from the event given their key roles.
• AUO’s chairman said that he expects PC panel demand to return to normal levels later this year; indicating another sign of potential improvement in the PC and display space.
• PC maker Asustek was a top loser in the past week; we highlight it as a potential Long/Short opportunity.

• With the impact of cost-cutting and monetisation wearing out, consensus looks overly aggressive to expect revenue and OP CAGRs of 24% and 35% respectively over the next two years.
• Based on Pinduoduo (PDD US)’s revenue and cost trends discussed below, we think the steady state OP margin could be substantially lower than consensus.
• Expecting consensus to downgrade expectations, we don’t think it is worthwhile paying up to 45.0x FY+2 OP (on our steady-state OP margin) for Pinduoduo at its current EV of $80.5bn.

• The Korean government removed mask mandates for public transportation in Korea as of Monday, 20 March including in buses, taxis, and subways.
• There are four major reasons why it will take much longer time for most people in Korea to stop wearing masks. 
• As millions of people stop wearing masks in the coming year, there will be clear, visible higher demand for cosmetics, which should benefit companies such as Korea Kolmar. 

• GoTo (GOTO IJ) reported 4Q2022 and full-year 2022 results yesterday. Gross revenue increased 18.0% YoY to IDR6.3trn while adjusted EBITDA losses declined to IDR3.1trn vs IDR6.5trn in 4Q2021.
• However, adjusted EBITDA as % of net revenues has increased considerably compared to 3Q2022 due to increase in variable costs.
• GoTo’s ambitious profitability target would prevent the company from fully exploiting growth opportunities which will lead to further decline in growth rates.

• Over the past 12 months, we have written insights on 14 stocks in the small/mid-cap space with high dividend yields, inexpensive valuations, and a great margin of safety. 
• We re-examine these to shortlist 3-4 names of our highest conviction amidst the current macroeconomic climate.
• Our high conviction shortlist includes Water Oasis (1161 HK), Perfect Medical Health (1830 HK), The Keepers Holdings (KEEPR PM), and Taste Gourmet (8371 HK).

• Neuren Pharmaceuticals (NEU AU)‘s lead product Daybue (trofinetide) has obtained FDA approval for the treatment of Rett syndrome in adult and pediatric patients two years of age and older.  
• Daybue is expected to be available in the US in April, 2023. Neuren is eligible to receive royalties on net sales of trofinetide in North America, plus milestone payments.  
• Geography expansion of trofinetide (mainly European approval and launch), label expansion possibility of trofinetide, and Neuren’s pipeline progress can act as potential upside catalysts for the stock.

• Fu Shou Yuan (1448 HK)’s 2022 results were below our expectations. Affected by the 22Q4 pandemic, the performance recovery in 22H2 was lower than expected. 
• The high demand due to soaring death rate since 22Q4 would be reflected in 23H1 results. Together with low base last year, strong performance rebound in 23H1 is worth expecting.
• The reason behind short-term trade and long-term hold is different. But considering the Company has no obvious flaws in its long logic, every pullback can be a good buying opportunity.

• Global branded food and beverage outfit Del Monte Pacific (DELM SP) recently announced group sales grew by 3% to US$68mn in the 3Q23 (April Y/E).
• However net profit declined by 62% to US$9.8mn due to lower operating results and increased interest expense from higher cost bank loans.
• Del Monte’s net debt, net gearing, and net debt/EBITDA were S$2.2bn, 582.5%, and 6.1x, compared to S$1.45bn, 211%, and 4.2x a year ago. 

• For FY2022–Total Buyback of 5.9 million shares (HK$18.3 million) at average price of $3.10
• Funds Management Business – Extended Platform to provide Family Office Solutions
• Funds Management Unit – Total AUM increased 21% to US$975 million in 2022 with external capital accounting for 46.5%

• We believe total revenue grew 18% in 4Q22 and 22% in 2023.
• We believe operating losses decreased YoY in 4Q22 and the company will report an operating profit in 2023.
• We expect the stock has an upside of 47% for year end 2023.

• Baidu launched a beta test of a ChatGTP-like function, WXYY.
• Tencent announced it will close its digital collection platform, Huanhe, in June.
• KE’s revenue decreased by 25% and new losses were RMB1.4 billion.

• After a dip in earnings in FY22, Fu Shou Yuan (1448 HK) guides for an encouraging rebound in FY23 with at least 35% revenue and 30-35% net profit growth.
• We think the 12.7% growth in earnings in 2H22, against -28.9% in 1H22, showed that pandemic impact has faded. It is still very well positioned to benefit from aging population. 
• Net cash equals 19% of its share price and its 13.9x PER for FY23 is not expensive relative to peers. We estimate, ex-cash, ROE is at a high of 24%. 

• In 4Q22, revenue grew by 46% YoY, lower than consensus, but higher than competitors.
• The operating margin improved significantly from 7% in 2021 to 23% in 2022.
• We believe the stock has an upside of 31% and a price target of US$120.

• A tour of the Hikone factory last week left us impressed with Screen’s efficiency and the timing of its capacity expansion.
• The company’s semiconductor production equipment sales are likely to decline this year, but outperform the industry as a whole due to low exposure to memory. 
• Buy for longer-term recovery after the recent advance has been digested.

• Takeda Pharmaceutical (4502 JP)  revealed over the weekend that experimental drug TAK-279 (acquired from Nimbus) for psoriasis is showing positive results suggesting it could become the best of its type.
• On the other hand, Takeda’s dengue vaccine Qdenga has been granted approval in Brazil, a country with high prevalence of dengue.
• Takeda’s top selling drug Entyvio’s exclusivity in the US will end in 2026 and the company continues to see strong progress with its development pipeline and M&A deals.

• Asustek, Acer, and HP’s recent quarterly results indicate decreases in inventory days, highlighting potential improvement happening at the leading edge of the PC industry chain.
• Asustek (Asus) has substantially underperformed Acer YTD with one factor likely being Asus reporting worse margin performance. Asus is flat YTD after its post-results drop vs. +15% YTD for Acer.
• Long/Short: One can explore Long Asustek vs. Short Acer based on expectations of normalization of relative operational performance.

• We don’t think that a strong-looking demand in the domestic market is sufficient to warrant an upside to Fast Retailing (9983 JP)’s current consensus FY+2 EV/OP of 19.9x.
• Although on the downside we see significant risks with China’s rebound, decelerating revenue growth in high growth markets and margin pressure from wage hikes and inventory growth.
• Therefore, we think the company’s FY+2 EV/OP could potentially go down to around 15.0x, which is towards the bottom end of Fast Retailing’s pre-COVID FY+2 EV/OP range.

• Upcoming banking crisis will accelerate in the coming few weeks, it is very likely Fed will slow down rate hike or re-start a rate cut cycle
• To position for this:  BUY Hong Kong property developers New World Development 17 HK, Henderson 12 HK, Sun Hung Kai Properties 16 HK
• Apart from HK RE developers, buy China’s name Hang Lung (101 HK) and crypto-currency (BTC and ETH)

• Recruit Holdings (6098 JP)  share price is down 18% YTD and the valuation multiples have more than halved since their peak in November 2021.
• The company’s recent 3QFY03/2022 earnings pointed towards declining profitability with mismatch in the labour markets easing off.
• The job openings in the US have further declined in January suggesting that Recruit’s share price has more room to fall as consensus has further downgraded estimates.

• Air China (H) (753 HK) underperformed China Southern (1055 HK) YTD as domestic traffic recovery is faster than international, but its momentum will accelerate in the rest of the year.
• With Jan-Feb domestic traffic returned to 92.6% of 2019, CSA’s upside is relative limited. Air China, instead, will benefit from more profound international rebound which only back by 10.3%. 
• Recent developments including resumption of visa issuance and outbound international group travels, removal of pre-flight negative PCR tests and recovery of visitors to HK all bode well for Air China.

• BEKE (Beike) reported 4Q22 revenue in-line/4.9% vs our est./cons. Non-GAAP operating income 65% higher than our estimate and non-GAAP net income 59%/122% higher than our est./cons. 
• We estimate 1Q23/2023 revenue to rise 46%/24% YoY. We think Beike’s strategy on focusing quality above scale is suitable under current real estate market trend, bode well for profitability.
• We maintain BUY rating and raise the TP by US$2 to US$23 to reflect 1) the gross margin improvement, 2)narrower loss-making in new initiatives.

• ZTO guided at least 1.5ppt market share gain in 2023, which exceeds our previous expectation. 
• ZTO, leveraging its highest market share, is the most likely to expand its own end-to-end ecosystem, which leads to improvement in operating efficiency, increase of doorstep delivery, and pricing power.
• Maintain BUY and TP due to share gain, efficiency improvement, and early-mover advantage in expanding ecosystem. Our TP implies 23x P/2023E.

• Akeso achieved outstanding product sales last year, mainly due to off-label prescriptions.It means Akeso has “overdrawn” AK104’s performance on other indications in advance. Sales could significantly slow down over time.
• It is difficult to turn loss into profit by selling drugs alone. As the profits from selling drugs are far lower than R&D expenditures, losses are the norm.
• Akeso is overvalued, but if AK112 is successful in head-to-head trial with Keytruda, Akeso would be a player to compete on international stage. Its valuation would reach a new level.

• Comms Group Ltd (ASX:CCG) operates in the broad IT and communication space both domestically and offshore.
• Domestically, CCG provides a full range of IT and communication services in the highly fragmented MSP/ICT market, a sector expected to grow on the back of digitalisation, an increasingly remote workforce, the need for cyber security, and increasing complexity.
• Internationally, CCG is a niche player in the provision of corporate voice solutions for enterprises with an established, capital-light network particularly strong in the Asia Pacific. 

• We suggest that the recent strong performance of <Eggy Party> could be sustainable because of the absence of competitive games…
• …an emerging user-generated-content (UGC) ecosystem with much potential, social connections among players, and popularity on social media. 
• We maintain our previous estimation that <Eggy Party> could at least contribute RMB 4-5 bn this year. NetEase is one of our top picks in China internet.

• 25% reduction on hardware cost of car production in one year would be remarkable if achieved
• Integrating two sales systems into one is a positive move, but not good enough in our view.
• Mr. He taking direct resposibility of styling design division is a sign that the company acknowledges that it is a key improvement area for estabilishing brand image

• For the better part of two decades, Singaporean real estate investment trusts (REITs) have provided an efficient and popular exposure to quality large-scale commercial properties. 
• Yet as global central banks hike interest rates to address inflationary pressures, can REITs retain their attractiveness?
• SREITs have corrected as Singaporean interest rates have increased. The question is whether higher interest rates are baked in, and which SREITs will hold up; and which ones will not?

• PDD stock price has been increasingly driven by TEMU as of late, thanks to TEMU’s fast growth and aggressive geographical expansion.
• TEMU rollout introduces more variables to upcoming 4Q results , especially with regard to incremental investments that pose downside risks to earnings, which will sharply decelerate in 4Q and beyond.
• We are turning more constructive on TEMU, but acknowledge the challenges in trading off between topline growth and bottom line deceleration in a potentially prolonged tightening cycle. Stay neutral.

• Addition of Writing Legends to existing maths and literacy apps will create more opportunities to upsell and cross-sell. 
• Brightpath, the recently acquired assessments technology provider, adds a new horizontal with the potential to reduce school customer churn
• Competition is high from groups such as DreamBox, IXL, ABC Mouse, Khan Academy and BYJU’S . 3P Learning remains a significant player with a strong customer base and improving product portfolio.

• RPSG Ventures Limited (RPSGVENT IN) [“RPSGV”] continues to scale up its FMCG business. Q3FY23 FMCG revenues saw a YoY growth of 23%. QoQ, there was some de-growth due to seasonality.
• Excluding one-off other income, Firstsource Solutions (FSOL IN) reported weak Q3FY23 earnings led by sluggish growth and weak margins.
• RPSGV remains a deep-value holding company that is trading at a discount of >85%. As its FMCG and Sports businesses scale up, the stock has potential to re-rate significantly.

• SanBio Co Ltd (4592 JP) recorded operating loss of ¥7.9B for FY23, better than guidance of ¥8.1B. For FY24, the company guided for operating loss of ¥4.6B, in-line with consensus.
• SanBio’s cash position improved with cash and cash equivalents of ¥6.7B at the end of FY23, up from ¥4.6B at the end of the previous fiscal year.
• The company aims to obtain approval of its lead candidate SB623 as a treatment for chronic motor deficit from traumatic brain injury during the current fiscal year.

• The leader in rental equipment industry offers attractive returns, in spite of short-term risk of recession.
• United Rentals’ well thought out growth strategy has created an important competitive advantage.
• High free cash flow allows the management to increase shareholder distributions, while also reinvesting back into the business, according to the company.

• African Rainbow Minerals Limited’s near 30% year-to-date drawdown has presented a value gap.
• The company’s security’s undervalued status, coupled with a dividend yield of above 15%, present us with optimism.
• We assign a strong buy rating to African Rainbow minerals Limited with an indefinite horizon.

The Competition and Markets Authority (CMA) has finished its Phase 1 investigation and has concluded that it has concerns that the UnitedHealth takeover of EMIS could reduce competition in certain areas. It has given both parties five working days to offer legally binding proposals in lieu of a Phase 2 investigation. EMIS expects to be able to provide a further update on or around 31 March, which is the statutory deadline for the CMA to determine whether these undertakings are acceptable in principle.

On 13 March, Pan African Resources (PAF) announced the completion of the final component in its funding package for its Mintails dump retreatment project outside Johannesburg. The funding is in the form of an innovative transaction with Rand Merchant Bank (RMB) in the style of a synthetic forward sale agreement, whereby Pan African will sell 4,846oz of gold per month to RMB for 24 months, commencing in March at a fixed price of ZAR1,025,000/kg (US$1,750/oz at the prevailing forex rate), in return for an upfront premium of ZAR400m (US$22.0m). Including the upfront premium, the effective price at which the group will sell these ounces (representing c 30% of annual group production) will be ZAR1,135,604/kg (US$1,938/oz at prevailing rates) over the full 24-month period.

• Realty Income Corporation’s sustainable growth rate has stalled, resulting in an intrinsic value below its traded market price.
• Realty Income’s market-based features, including dividend growth and low volatility, are favorable.
• However, we think the REITs valuation is a significant risk.

• We believe revenue will grow by 2.5% YoY in 4Q22 and 9% in 2023.
• We believe EPS will decrease by 62% YoY in 4Q22 and increase by 16% in 2023.
• We expect the stock has an upside of 42% for yearend 2023. Buy.

• Like all department stores, Iwataya in Fukuoka is keen to grow services for its wealthiest customers. 
• It already has special lounges for high spending customers and has now opened a new, invitation-only lounge for its top 300 clients, many of whom are under 40.
• Capturing more share of the wealth market is the only real hope department stores have to grow.

• Berli Jucker (BJC TB) released a strong set of 4Q2022 numbers reflecting the benefit of increasing tourism numbers in Thailand significantly positively impacting 25 of its stores. 
• The company strategically reduced its B2B business, whilst growing its Don Chai stores quite aggressively. Berli Jucker plans to increase its store numbers further in 2023.
• Berli Jucker‘s packaging supply chain business will see new aluminium can capacity this year in Thailand and should see a 2H2023 growth pick-up. Overall a more positive outlook for 2023.

• I was complaining recently that I couldn’t find any cheap stocks, but I will take that back!
• I got another one, Pagseguro (PAGS). A Brazilian payment processor and online bank and potential compounder. 
• PAGS trades at about 8x through earnings, has been growing quite rapidly and could see explosive short term earnings growth if they can bring down their financing costs.

• The slight dip in FY22 earnings for AviChina Industry & Technology H (2357 HK) is due to product restructuring at Avicopter (600038 CH) and higher impairment/fair value losses.
• It should return to growth track in the next two years, with rise in product demand, recovery in Avicopter, further restructuring and M&As being major drivers. 
• Share price has increased 15.9% YTD but it is just on 9.2x FY23 PER. Its market cap is at 58.5% discount to holdings in its four listed A-share subsidiaries. 

• Chinese solar wafer giant LONGi Green Energy Technology Co. Ltd. will partner with U.S. solar developer Invenergy to build a $600 million, 5-gigawatt solar panel assembly factory in Ohio
• The project will be LONGi’s first entrance into the U.S. manufacturing market.
• What will eventually be the largest crystalline silicon solar panel factory in the U.S. will create 850 jobs, and operations are expected to start by the end of 2023

• Giant Biogene has been added to Hong Kong Stock Connect.There’s also positive sentiment driven by the consumption recovery after China reopens. But the Company is overvalued if compared with peers.
• The subsequent product pipeline progress is relatively slow, with a gap of nearly two years in the middle. So, Giant Biogene’s stock price performance may be relatively weak after 2024.
• Due to various restrictions, the actual market space of collagen in the future may not be as large as expected. This is a point investors need to be aware of.

Oryzon Genomics has announced it has enrolled the first patient in its Phase Ib FRIDA study investigating iadademstat in combination with Astellas’ FDA-approved FLT3 inhibitor gilteritinib to treat FLT3+ relapsed/refractory (r/r) acute myeloid leukaemia (AML) patients. The FRIDA study is central to Oryzon’s overall strategy as management believes the second-line AML setting may represent a potentially quicker route to market for iadademstat, targeting an AML patient population with limited and sub-optimal treatment options. FRIDA will recruit up to 45 patients across 10–15 trial sites in the United States and, in our view, its initiation marks a significant clinical milestone for the company.

• Final funding for Project Dorothy is now secured, with energization scheduled for the first week of April, pending approval from ERCOT. 
• Soluna recently announced $7.5 million in funding from existing project investor Spring Lane Capital (SLC) that will be used to complete the final energization of Dorothy and support corporate expenses.
• SLC’s stake in the 25 MW Dorothy 1A increases to ~85% from 32%, but Soluna retains the right to 50% of 1A’s profits after SLC achieves an 18% IRR hurdle.

• CEO Matt Fisch’s first earnings call announced revenue of $1.1 million in 4Q22, in line with quarterly expectations.
• CFO Bob Brown announced that he is leaving the company effective March 31.
• Fisch said the company is “in the process of developing a strategic plan and timeline that builds on [our] significant achievements made to date.”

• SVB Financial’s (SVBF) liquidity risk sparked by high interest rate is unlikely to happen on Futu, as the two have different asset structures and business models. 
• Futu is benefits under the rising interest rate environment, as its interest income generated from clients’ idle cash goes up, 
• With also help from the floating rate of margin financing and mortgage lending business. We maintain BUY rating and the TP at US$51.

• Samco is a beneficiary of rising power semiconductor investment for electric vehicles
• The company is focused on SPE equipment for the growing silicon carbide power chip market
• New investment from the likes of Mitsubishi Electric should drive structural growth for SiC equipment

• Supermax Corp (SUCB MK) reported first-ever quarterly loss in Q2FY23 due to continued fall in rubber gloves ASP, rising input cost, and weakening of the USD against the local currency.
• The challenging operating environment for glove will persist into 2023. Amid continued weak global demand for gloves, declining ASP, and rising input cost, Supermax will take time to regain profitability.   
• Global demand for rubber gloves is not expected to recover soon. In the foreseeable future, the market will remain weak, competition continue to be intense, and profitability adversely impacted.

For our next Corporate Webinar we are glad to welcome Comba Telecom’s Executive Director and Group CFO, Ken Chang Fei Fu.

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

About Comba Telecom

Established in 1997 and listed on the Main Board of the Hong Kong Stock Exchange in 2003 and the Main Board of the Singapore Stock Exchange in 2013, Comba Telecom is a global leading wireless solutions provider with its own R&D facilities, manufacturing base, and sales and service teams. The Company offers a comprehensive suite of products and services including base station antennas and subsystems, wireless access, wireless enhancement, and wireless transmission to its global customers. Headquartered in Hong Kong, with manufacturing bases and R&D centres in China, Comba Telecom provides wireless communication solutions and information application services to customers in more than 100 countries and regions around the world.

• Greentree Hospitality (GHG) is a Chinese hotel franchiser and operator that trades at a large discount to other US traded peers and had some rumours floating around in 2022 that it would be taken private by its controlling shareholder who owns 88.7% economic interest in the shares.
• The controlling shareholder also indicated that the reason for its late Q1 2021 report was that they had hired capital market consultants to explore a take-private offer.
• It does have some hair on it, but let’s first focus on the positives

• Hon Hai results slightly beat on revenue and slightly missed on EPS, but overall the result was decent since China COVID margin impact was well managed.
• The company has reiterated its 2025 target for gross margin to rise to 10% and over NT$1 trillion of revenue by 2025 from its new Electric Vehicle platform business. 
• While 2023E revenue was guided to be flat YoY, this was already roughly expected. We maintain our structural Long view on the shares.

• After surging past 20.0x consensus FY+2 EV/OP multiple in 2012-2013, MonotaRO Co Ltd (3064 JP)’s consensus FY+2 EV/OP has fallen below 20.0x on one very rare occasion.
• We see no major change in the fundamentals of MonotaRo aside from a temporary hike in Opex through concurrently running old and new distribution centres for the past 3 quarters.
• Currently trading at 22.5x consensus FY+2 OP, we think this is a good opportunity to benefit from the company’s depressed valuation.

• Market participants are re-repricing risk, says iShares 20+ Year Treasury Bond ETF.
• Policymakers are in a tough spot where they need to combat inflation while also providing liquidity for the banking sector.
• iShares are once again in the spotlight as market participants are Re-re pricing risk.

• HSBC Holdings plc agrees to acquire SVB Financial Group’s UK-based business for merely £1.
• HSBC stock’s current risks pertain to a newly evolved countercyclical environment and mainstream’s “flight to safety” instead of potential structural breaks within the firm.
• In a drastic turn of events, HSBC Holdings plc (OTCPK:HBCYF) has snapped up SVB Financial Group’s (NASDAQ:SIVB) UK lending division.

• The big online malls continue to grow at higher rates than many branded e-commerce stores, meaning consecutive annual gains in market share. 
• Amazon’s lead now seems to be widening while Rakuten is also pulling ahead of Z Holdings, which continues to struggle with poor integration of assets, and we see little upside.
• Amazon is now Japan’s 2nd biggest retailer but, despite its problems in Mobile, Rakuten is proving a relentless competitor in e-commerce and we remain bullish on its e-commerce prospects.