Equity Bottom-Up

• United Microelectronics ADRs trading at a discount, risk-reward appears compelling.
• TSMC has normalized; and reports are that it may launch a Singapore-based 12-inch semiconductor fab.
• ChipMOS discount still compelling; and we now have detailed coverage of the company.

• Based on our recent checks, we expect that Tmall sales in the march promo were weaker-than-expected, especially in apparel and beauty make-up. 
• Meanwhile, we maintain our prior forecast for Douyin’s overall eCommerce growth, and we expect that Douyin Mall’s share of Douyin eCommerce GMV is now higher than we previously estimated.
• We cut the GMV growth of Taobao and Tmall from 4.4% YoY to 1.4% YoY in FY24, and cut BABA’s TP to US$ 100, implying 12.6x FY23 PE.

• Bukwang Pharmaceutical (003000 KS) has reported operating loss of KRW1.2 billion in 2022 due to the increased R&D cost, driven by the clinical progress of JM-010.
• Bukwang’s subsidiary, Contera Pharma, is developing JM-010 as a treatment for dyskinesia in patients with Parkinson’s disease. JM-010 is in phase 2 clinical trial in the U.S. and Europe.
• Bukwang has been aiming to list Contera Pharma to secure funds for clinical research, which has still not materialized. With current low-risk appetite, Contera Pharma IPO may not sail smooth.

• The heavy equipment dealership industry, known for its lucrative opportunities, has consolidated significantly in recent years, with major players acquiring smaller dealerships.
• Alta Equipment, based in Michigan, has emerged as a beneficiary of this trend, expanding its geographic reach and gaining access to trained technicians, giving it a competitive advantage over smaller players.
• However, as the industry continues to consolidate, will Alta be able to maintain its momentum, or will it face challenges from larger rivals?

• Tesla’s sales growth is yet to revert to a linear distribution, given Tesla’s market share and the exponential growth attached to the EV space.
• Rumors of a lithium mine acquisition and an additional Gigafactory indicate that Tesla is working toward a lower cost base.
• It has been a rollercoaster ride for Tesla, Inc. (NASDAQ:TSLA) stock recently, as various market-based and idiosyncratic features coalesced to ramp up the asset’s volatility.

• Jcr Pharmaceuticals (4552 JP)‘s cash cow Growject, recombinant human growth hormone, is reporting decelerating revenue due to insurance price revision. The drug is also facing competition.  
• JCR’s latest marketed product Izcargo is on a strong growth trajectory. However, the drug is not big enough to compensate for the revenue loss from Growject.  
• The company’s bottom-line is under pressure due to elevated R&D expenses. Cash position has also deteriorated. No near-term product launch is anticipated.  

• Playmates Toys (869 HK) just published its FY22 results showing a decrease in revenues of 19% but a consistent dividend of 2c HKD
• More importantly, it shared more details about the TMNT upcoming movie launch
• Reiterate thesis that upon TMNT relaunch Playmates toys could be a major beneficiary

• In C4Q22, JD reported in-line total revenue and beat in profit. We trimmed down our forecast on C1Q23 total revenue by 4% due to slower-than-expected rebound in retail spending. 
• JD is shifting its strategy to be more focused on low price and user, and we suggest that the repositioning period could be painful for the company.
• We cut our revenue forecast by 5%. Our estimates on top and bottom lines in 2023 are (6%) and (28%) below cons. Maintain SELL rating and cut TP to US$27.

• The current slowdown in volume can be attributed to both the broader macroeconomic slowdown & the pausing of the inventory system during the COVID, which has resulted in some mismanagement.
• However, the slowdown is not due to a loss of market share, product quality, or adverse distributor policies, indicating a cyclical issue rather than a structural one.
• In case of a gradual recovery of the macroeconomic situation and appropriate measures taken by Page Industries (PAG IN) , volume growth may pick up in the future.

• Through operating luxury shopping malls in China, Hang Lung Properties is the only HK-listed stock that provides exposure to the China luxury consumption story.  It is trading at attractive valuation.
• Major concerns are 1) leakage of retail sales after re-opening and 2) impact on luxury consumption from negative wealth effect.  Most of the risks are priced in at current valuation.
• Short-Term, China consumption will recover post-COVID as consumer sentiment rebounds.  Long-term, the structural story of China consumption remains intact, supported by growing middle class and increasing disposable income and savings.

• In C4Q22, JDL reported in line results for both revenue and profit. In C1Q23, we expect JDL’s topline growth continue to decelerate due to decline of parcels. 
• JD has adopted the low-price strategy, which hinders the growth of JDL. The price competition in eCommerce negatively affects JDL but benefits ZTO.
• We cut our 2023 revenue forecast by 6%, which is (5%) below cons. Downgrade JDL to SELL with TP of HK$10.

Immix Biopharma has expanded both its clinical and technology portfolio with the in-licensing of its first CAR-T cell therapy, NXC-201. The treatment is being investigated in a Phase Ib/II open-label study for multiple myeloma (MM) and light chain amyloidosis (ALA). The trial intends to recruit up to 100 patients and management believes positive results may potentially support early regulatory approval. In our view, NXC-201 may provide Immix with the scope to expand into new indications within oncology, particularly among hematological malignancies. NXC-201’s clinical development is being independently financed under a subsidiary of Immix (Nexcella, of which Immix owns 98%). Our valuation of Immix is US$61.5m or US$4.4 per share (previously US$55.4m or US$4.0 per share). We await further NXC-201 clinical data and communication on its development plan before including it in our valuation.

JDC Group (JDC) reported preliminary FY22 results that were on the lower side of the guided range for revenues and on the higher end for EBITDA. FY22 revenue increased by 6.3%, compared to 18% in 2021, reflecting low German consumer confidence especially in December. This led to weaker demand especially for life insurance products. JDC expects FY23 revenue growth to accelerate, to 17% at the midpoint of guidance (€175–190m) based on cooperation agreements that are already signed. The EBITDA margin is also expected to increase based on a guided EBITDA range of €11.5–13.0m. We will review our valuation after the final results, which will be published on 31 March.

• 2022 results were solid, exceeding guidance. 2024: Guidance in-line with consensus
• Defense industry on fire. Refer to initial note for further info regarding increased defense budgets
• Given the very strong performance YTD, we recommend taking some profit here for shorter-term investors. For long-term investors TP remains €12.80. We like the sector

• LKQ Corporation delivered a significantly below part result in the year’s final quarter.
• Revenue declined in the quarter as compared to the last year, driven by the divestiture of PGW and FX translation.
• Organic revenue of parts and services increased but the overall top-line was below analyst expectations.

paragon has announced the result of the Eurobond tender offer at 60% of nominal, securing just under €1.7m nominal out of a potential €5m. The offer forms part of the ongoing debt reduction programme that will see the majority of the outstanding bond liabilities (both Swiss franc and euro) redeemed over the next few months (see our previous note). While the shares and bonds have been responding well to the management initiatives, these appear to pose a considerable potential opportunity for investors, assuming the operational growth strategy is successfully implemented.

• Following Jehoshaphat’s allegations that profits are inflated dramatically over a decade with manipulative accounting, Techtronic Industries (669 HK) has issued a rebuttal clarifying that the accusations are without any merit.
• TTI’s beyond comparison performance is due to world class brands such as Milwaukee, Ryobi and Hoover which have helped top line grow at 13% CAGR over the past 13 years.
• Nevertheless, we have assessed some of the company’s clarifications here which seemed too good to be true.

• Shougang Fushan Resources (639 HK) trades at 4.5x/5.1x FY22e/23e with 50% of the market cap in cash and a 17.8%/15.8% FY23e/24e dividend yield (based on an 80% payout ratio).
• Since our call in FY21, close to 64 cents of the share price (25% of the current share price value) has been returned as dividends making it a dividend machine. 
• We forecast at least another 70 cents of dividend for H2 FY22 and FY23, bringing the dividend in 3.5 years to more than half the current share price. 

• JD’s revenue growth rate reached its historical low in 2022, but we believe it will recover in following two years.
• JD’s operating margin hit its historical high in 2022 and we believe the improvement will continue.
• We believe EPS will grow by more than 100% in 2022 and the stock has an upside of 42%.

• In this insight, we discuss the alpha generation through companies that have been buying back their shares in the Korean stock market in 1Q 2023.
• We provide a list of 23 stocks in the Korean stock market that have announced share buyback programs in 1Q 2023.
• Some of the larger companies (with more than 1 trillion won in market cap) that have recently announced share buybacks including Celltrion Healthcare have been outperforming the market.

• What may appear duplicative asset segment in MGM actually spreads risk and improves overall margin of safety for both stocks.
• MGM China is a pure Macau play while MGM Resorts International is a strong bet on global reach of its gaming properties.
• Buying both is insurance against a possible recession downside because of the geographically and demographically diverse customer bases of both enities.

• We stay bearish on SITC International (1308 HK) despite record net profit in FY22. The collapse in spot freight rate will take a toll on FY23 earnings.
• Management is also conservative on outlook, citing both demand and supply issues. It expects gross margin to return to pre-pandemic levels (17-20%) in the future, vs. 41.8% in 2H22.
• Market consensus is just too optimistic, projecting just 37% YoY decline in earnings for FY23. We believe actual earnings may be at least 18-27% lower than current street forecasts. 

• Perfect Medical Health (1830 HK) released an operating update during market hours (see: Operations Update) that signaled China has turned around to almost normalized (pre-covid) revenues. 
• While Feb is very late in the financial year (March End FY), and data turning around now does not move the needle for FY23e, it bodes well for FY24e profits. 
• The stock trades at 14.7x/11.5x FY23e/24e PE(x) with a 7.2%/9.2% FY23e/FY24e dividend yield with net cash and LT investments at 14% of market cap), making this an exciting investment.

• 2022: Consolidated sales of €39bn (+16.7 percent); Adjusted EBIT of €2bn (+5.2 percent).    CEO: We succeeded in reaching sales and earning targets for the year, “a respectable result”
• 2023: Conti expects higher earnings supported by sustained market recovery
• Our TP remains €86. Given the strong performance since our initial note, the recovery in margins being better understood and €1bn in headwinds in 2023, we recommend taking profit here

• Sea Ltd’s 4Q2022 results were nothing short of spectacular, with the company booking a net profit more than a year ahead of expectations, underlining management’s ability to thrive in adversity.
• The company cut costs and most notably A&P spend on e-commerce but it still managed to grow GMV and booked positive adjust EBITDA for all its core Asian markets.  
• Sea Ltd (SE US) now stands out well ahead of its peers on profitability and should trade at a premium but it will have to continue to execute.

• Sea Ltd (SE US) shares went up by 22% yesterday as the company’s top-line beat consensus by 13% and recorded its first-ever operating profit of $342.9m (consensus: -$344m).
• Main growth drivers such as GMV, orders, Gaming active users and Gross-Bookings indicate that growth could stall. Meanwhile, competition is heating up, sidelining the importance of cost discipline in e-commerce.
• Turning unprofitable yet-again could be a hard thing to swallow, even for those firmly believing in Shopee. Therefore, Sea could fall a lot more than the previous-bottom next-time it falls.

• JD Health’s dependence on direct sales business wouldn’t change. But the gross profit of prescription drugs is low. If JD Health increases its revenue proportion, overall gross margin would decline.
• The business supporting JD Health’s high growth in the future is more dependent on the second growth point, but we haven’t seen any new business with high certainty so far.
• The essence of JD Health’s business is “product sale e-commerce” rather than “a comprehensive online healthcare platform” at the current stage, which cannot support high valuation in our view.

• Digital Turbine, Inc.’s misfortunes are about to pivot, providing ad spending reverts to its average growth trajectory.
• The company has a novel business model, and constant expansion by integrating growth ideas such as a Shopify-esque platform could yield substantial financial benefits, according to the company.
• Digital Turbine, Inc. (NASDAQ:APPS) stock has suffered from a trying time during the past year, conveyed by its more than 70% year-over-year drawdown.

• Oracle’s strategy is being acknowledged by one of its major peers – Salesforce.
• Oracle does not appear among the top three cloud infrastructure players, but it doesn’t need to.
• Oracle is expected to deliver another strong quarter, investors should remain focused on the long-term positioning of the business.

• SE reported C4Q22 total revenue 10% and 14% higher than our est. and cons., thanks to the improvement in monetization rate of eCommerce segment. 
• We expect the weak trend to continue into 2023, with intensified competition from eCommerce competitors and weak performance of Free Fire.
• We raise our TP to US$62, which implies 2.5X PS/6X PE/4X PS for eCommerce/gaming/fintech in 2023. Maintain SELL rating due to challenging growth outlook. 

• Before market open on March 8, HNI announced the acquisition of Kimball International (NASDAQ: KBAL), a smaller competitor of HNI’s Workplace Furnishings segment.
• HNI will pay about $485 million, consisting of cash ($9/KBAL share), stock (0.1301 HNI/KBAL share), and ~$46 million in KBAL net debt.
• We see the deal as an excellent fit on strategic and cultural levels. 

IP Group’s NAV per share came in at 132.9p at end 2022, down 20% year-on-year in total return terms but only 2% below the end-June 2022 level. The NAV decline during 2022 was primarily due to the £428.5m loss from listed holdings (before FX changes, mostly Oxford Nanopore Technologies, ONT), while private holdings contributed gains before FX of c £101.4m (or 5.8% of opening NAV). Excluding ONT, IP Group posted a £25.2m profit in 2022. The company will focus on driving short- to medium-term returns from its more developed holdings and devote resources to its ‘priority companies’, which it believes will underpin its self-sustaining model (its top 20 holdings make up 71% of portfolio value).

• Gaia reported 4Q22 revenues of $19.6 million versus $20.8 million in 4Q21, and 2022 revenues of $82.0 million versus $79.6 million in 2021.
• Given the small Yoga International acquisition in December 2021, this implies some revenue contraction in the core business for 2022.
• Despite the top-line challenge, net income was slightly positive for the year after adjusting for one-time legal fees and the anticipated SEC settlement accrual, which confirms the resilience of Gaia’s financial model.

• X2M Connect Limited (ASX:X2M) has reported a 23% reduction in RaaS-adjusted EBITDA losses (to $2.4m) for H1 FY23 on the back of operating leverage from 96% sales growth, 135% gross profit growth and just a 14% increase in operating costs.
• While sales growth was driven by hardware sales (connected devices +100% over the pcp), hardware margins have improved ~500bps and connected devices in the field ultimately drive SaaS/maintenance fees (platform fees).
• Cash at bank was $3.05m with an additional net $0.5m received in January 2023 from an R&D tax credit. 

• JD launched “10bn subsidy” campaign on March 5th. Smartphone and electronics is the main product category and the prices for comparable products are relatively the same as PDD. 
• We estimate that total GMV generated from subsidized products may reach to about 1.5% in 2023, and the incremental cost will be about RMB5bn in 2023.
• We cut our forecast of JD’s non-GAAP net income to RMB21bn in 2023, which is 34% below cons. Maintain SELL with an updated TP of US$42, which implies 22x P/2023E.

• Advantest is a market leader in semiconductor testing and will be a major beneficiary of a multi-year AI tailwind
• Catalyst: News flow around new AI applications, increased investment dollars flowing into the space and visible acceleration in Nvidia’s data centre GPU growth
• Market concern over near-term correction in semiconductor market is giving investors an opportunity to buy Advantest at a 15% discount to its intrinsic value

• After failing to take Calbee Inc (2229 JP) forward for 4+ years, CEO Mr. Shuji Ito is retiring at the end of the next quarter.
• He is being replaced by the current COO and the former EVP of Calbee’s Overseas business Mr. Makoto Ehara.
• From what he has done since he was appointed the COO and in the Overseas business, we are hopeful that he will turn Calbee’s fortunes around in the medium term.

• GrafTech International Ltd (EAF US) results for Q4 2022 were worse than expected, and guidance for volumes down 50% in H1 2023e was shocking.
• In summary, our intrinsic value was too aggressive, and there was a low margin of safety on the investment. Constant execution issues in a favorable environment didn’t help our cause.
• The stock isn’t as cheap when trading at 11.1x/9.5x FY23e/FY24e. The deleveraging story now gets pushed out to the end of FY25. The investment is dead money for two years.

• Prodia (PRDA IJ) has released a new app called U by Prodia. Initially, U by Prodia users will be able to access laboratory examination, health supplement purchasing, and home services.
• Given its expected miniscule contribution of 15–17% to total revenue, digital platform even if being on a higher growth trajectory, cannot be a significant revenue driver.
• Declining COVID testing revenue are negatively impacting diagnostic players globally. During 9M2022, Prodia reported revenue of IDR1,580B, representing 21% decline, while net profit plunged 46% to IDR275B.

• We expect NIO to see a share loss in 2023 due to 1) late delivery of its key models; 2) conservative channel expansion plan; 3) uncompetitive pricing. 
• We see headwinds for NIO’s 2023 GPM, including 1) ~10% discount on its legacy models in Q1; 2) weaker product mix toward low-price ET5 into Q3.
• 3) limited expansion of scale economy due to diminished momentum. ● DG to SELL for weak momentum and ongoing margin pressure into 3Q22.

• PT Nippon Indosari Corpindo (ROTI IJ) booked results well above market expectations despite pressure from wheat flour and packaging costs, with greater efficiencies and cost savings boosting operating margins.
• Modern trade continues to be the growth driver but general trade continues to grow plus the company’s new Sari Kue cake products showed a strong performance at the margin. 
• PT Nippon Indosari Corpindo (ROTI IJ) should see further positive growth in 2023, with the potential for improving margins as input costs subside. Valuations are significantly below historical levels.

MGI – Media and Games Invest (MGI) is increasingly focused on its vertically integrated multichannel advertising platform, retaining a core of games that serve to generate first-party data and provide an efficient sandpit for developing new services. FY22 results were at the top end of guidance (as revised upwards at Q322), despite the headwind of lower market advertising rates. This scenario has continued in Q123, and we have taken a cautionary approach to our revised FY23 forecasts, which will be reviewed when management issues guidance for the year at the Q1 update. Medium-term guidance remains for a revenue CAGR of 25–30%. The shares are valued well below peers and the level indicated by a discounted cash flow (DCF).

• Despite the fact that 2022 was a challenging year for Xerox Holdings, the company managed an all-around beat in the last result.
• Supply chain challenges, surging inflation, currency disruption, the Ukraine war, higher interest rate, and an uncertain macroeconomic environment impacted revenue and profitability overall.
• Equipment revenue grew significantly in Print and Managed Print Services due to improved product supply.

• JD’s “10bn subsidy” program mainly subsidizes uncleared stale (avg. 339 days since launch) Xiaomi smartphone inventory for JD’s 1P/3P distributors but is not conductive for incremental Xiaomi unit demand. 
• Although JD subsidies help clear stale inventory, Xiaomi itself doesn’t benefit as these devices were sold last year and were already considered a sale.
• JD’s program is not conductive of unit volume sell-through for new Xiaomi phone sales given its shallow breadth of stale SKU.  Re-iterate our SELL rating and HK$7.3 TP.

• Two JD.com departments began to try fresh food front-line warehouse again.
• Radio and Television Administration plans to clean the content in short video.
• Herman Yu, Baidu’s chief strategy officer and formerly CFO, just resigned.

• Hon Hai reports YoY increase in January + February sales, maintains outlook.
• Hewlett Packard results: CEO says does not expect significant PC recovery in FY2023E. Fitipower results show display ICs potentially bottoming earlier than most segments.
• Memory Monitor: Two latest signals indicate lower margins and extended high inventories; biased Long Micron vs. Short Nanya Tech.

• BILI’s 4Q22 top line was basically in line, while non-GAAP net loss beat cons. by 8.28%. We largely dial down 2023 revenue forecast. 
• Moreover, we also suggest that recent meeting by the National Radio and Television Administration (NRTA) to curb short video addiction for minor protection would heavily impact BILI.
• Maintain SELL and cut TP to US$ 15.4, which implies 1.85X PS in 2023.

• Luckin Coffee reported its 4Q22 revenue, non-GAAP operating income, and non-GAAP net income (9.1%), (11.4%), (57.9%) lower than our estimate. 
• The store temporary close due to Covid impact is the main reason for revenue miss, and the higher income tax payment is the reason for the miss on NI.  
• We expect Luckin to catch up the store expansion schedule in 1Q23 at 730 new stores, and reach to 10,500 total stores by the end of 2023. 

• South Korea’s largest e-commerce company, Coupang (CPNG US) sank around 20% leading up to 4Q22 earnings. It dropped another 9% soon after the earnings report to around $14.0 per ADS.
• Meanwhile, the valuation remains expensive compared to regional peers as Coupang is trading at an 80% premium to the second most expensive e-commerce name in the region.
• If the share price breaks the trend line here, we think shares could go on to fall below the last year’s bottom of $8.98 per ADS.

• Global Health (Medanta) (MEDANTA IN) reported double-digit growth in revenue, EBITDA, and net profit during Q3 and 9MFY23, driven by increasing footfalls, rising ARPOB, and faster-than-expected ramp-up of new hospitals.
• The company plans to add 1,000–1,500 beds in next 2–3 years, with ~70% of the planned bed addition being at existing hospitals, thereby entailing lower capex per bed.
• Recently, Medanta has announced a new asset light partnership to launch a 300-bed hospital in Indore under operations and management arrangement. The hospital is expected to commence operation in FY27.  

• IDEXX had a strong finish to the year, reflected in the company’s all-around beat in the last quarter.
• Its revenues increased organically, driven by organic gains in CAG Diagnostic and strong growth in its water and software businesses.
• Organic revenue growth in the quarter was supported by solid organic growth across its major business segments and growth in diagnostic imaging and veterinary software revenues.

• Valero had a solid year-end, with refineries running at 97% of their capacity in a positive refining margin situation.
• Besides, significantly discounted sour crude oils and fuel oils helped its refinery.
• High natural gas costs in Europe also encouraged refiners to process sweet crude oils rather than sour crude oils, placing additional pressure on sour crude oils.

• Diageo’s share price has been underperforming for far too long due to outside factors that have little to do with the business itself.
• The premium brand portfolio in combination with the well-executed acquisition strategy creates a unique opportunity.
• The company is well-positioned to retain and even improve its industry-leading margins.

• Enterprise Product Partners delivered a mixed set of results in the quarter.
• Enterprise moved a record 11.2 million barrels of oil equivalent per day which helped it deliver an all-around beat.
• They believe that a wide gas-to-crude differential could result in a considerable cost advantage for American petrochemicals globally.

• SK Bioscience (302440 KS) reported sluggish performance in 2022, with revenue and net profit declining 51% and 66%, YoY, respectively, due to the weakening demand of the COVID-19 vaccines.
• Although the company’s shingles vaccine is the leader in domestic market, it is facing new competition as an international player has launched a new shingles vaccine in Korea this year.
• SK Bioscience stopped production of its bread-and-butter earning flu vaccine to focus on COVID-19 vaccine, thereby losing market share to rival. Re-entering the market will not be easy.  

• Signal #1 — Micron’s CFO warns that margins will be coming in lower than expected and inventories will remain elevated through FY2023E.
• Signal #2 — South Korea semiconductor inventories jump 28% MoM, 39.5% YoY.
• Implications for memory chip manufacturers: Biased to Long Micron vs. Short Nanya.

• It’s unrealistic to turn losses into profits by relying on BRUKINSA alone. BeiGene needs to have three blockbuster products with US$1 billion sales, which is difficult considering current pipeline situation. 
• If investors are optimistic about BeiGene, to some extent, they are betting on the success of BeiGene’s model, but of course, they should also bear the corresponding risks and costs. 
• BeiGene is overvalued, and its current market value has already priced in all positive factors. In this position, we think the risks far outweigh the benefits, because miracles don’t always happen.   

• Upward trend in new orders suggest that guidance is conservative.
• Long-Term prospects good with digitalization, 5G and optical-electronic technology for 6G.
• Lagging share price offers attractive valuations and 42% potential upside to previous high.

• Whitehaven Coal (WHC AU) underwhelming capital allocation in H1 2023 may have disappointed investors, but armed with a war chest of 2.47 bn AUD (35% mkt cap), we remain optimistic.
• The company aims to purchase 240 mn shares ( or about 25% of outstanding shares ) over and above the 10% it completed from last year’s buyback phase. 
• Trading at 2.2x/3.2x  FY23e/FY24e, the stock is extremely cheap with a conservative dividend yield of 9.1%/6.3% FY23e/FY24e ( assuming a 20% dividend-only payout ratio). 

• The General Office of the State Council issued favorable policy for TCM industry. However, TCM still has to face VBP, therefore Zhangzhou Pientzehuang Pharmaceutical Co. (600436 CH) and Gushengtang are our top picks..
• Pfizer is in talks to acquire Seagen in a deal worth over US$30 billion, but we remain conservative about whether this transaction would ultimately bring expected contributions to Pfizer.
• Haohai’s business model fails to bring ideal performance. Increasing competition/declining gross margin cast doubts on the outlook of medical aesthetics business. We’re not optimistic about its potential valuation upside.

• Broadcom remains as one of the best-positioned semiconductors stocks, but lower topline growth is to be expected going forward.
• Broadcom has so far done a great job at expanding its product and service offerings through M&A deals.
• Broadcom Inc. (NASDAQ:AVGO) has just reported yet another strong fiscal Q1 2023 quarter, marked by high top and bottom line growth.

• Abbott saw another highly successful quarter and managed an all-around beat as routine testing trends and hospital-based procedures continued to improve progressively in several areas.
• In the quarter, the sales growth was impacted negatively by a year-over-year decline in the Covid test sales.
• With the recovery of the manufacturing brand, production of its non-WIC brands has increased.

• Plug Power’s performance in the quarter was very disappointing as it failed to meet the revenue expectations of analysts.
• The company reported wider than expected losses and it continues to deliver weak results adversely affecting its market sentiment.
• Plug electrolyzers and cryogenic equipment is anticipated to be used in their operations to create and deliver liquid hydrogen via Plug trailers.

• Veeva Systems finished the year on a strong note with both, its revenues as well as earnings exceeding the expectations of analysts as well as the management.
• The management claims that it was a watershed year for clinical data management, with significant momentum in emergent areas like Safety, Link, and Compass.
• We give Veeva Systems a ‘Hold’ rating with a revised target price.

• Las Vegas Sands delivered a highly disappointing result as it failed to meet Wall Street expectations in terms of revenues as well as earnings.
• The track record in the non-gaming, scale, and diversity makes Las Vegas Sands uniquely position to cater to all the segments of the market.
• We provide the stock of Las Vegas Sands with a ‘Hold’ rating with a revision in the target price.

• Lowe’s Companies delivered a mixed set of results in the fourth quarter.
• Another notable category, Paint, saw strong pro-growth driven by its MVPs Pro Paint Rewards and Pro JobSIGHT delivery.
• Among other updates, Lowe’s collaborated with Klein Tools to give Klein Tools a strong presence in the electrical and tool departments of Lowe’s.

• Merck has delivered a strong quarterly result to end 2022 and surpassed the analyst consensus estimates in terms of revenues as well as earnings.
• The top-line performance was driven by strength across the company’s key pillars, hospitals, vaccines, and oncology, and a significant contribution from LAGEVRIO.
• The animal health business of Merck delivered strong operational growth.

• Okta delivered a strong fourth-quarter performance which was highlighted by an all-around beat as well as a significant improvement in profitability and cash flow.
• The end of the 2023 fiscal was strong, with sustained improvement in its go-to-market business performance.
• In this report, we have carried out a fundamental analysis of the historical financial statements of the company.

• Bilibili reported 4Q2022 results. Net revenue increased 6.2% YoY to RMB6,142m (vs consensus RMB6,154m) while operating losses expanded to RMB2,327M (vs consensus RMB1,905.9m).
• Mobile Games revenues declined 11.5% YoY in 4Q2022 due to the restructuring of the games biz to focus on self-developed gaming titles.
• We expect Bilibili’s earnings to remain under pressure with aggressive cost controls to impact growth and Mobile games to slow-down in 2023E with lack of new titles for launch.

• Indo Tambangraya Megah (ITMG IJ) dividend yield at an assumed 150 USD/ton price in FY23e ( FY22 px: 192 USD/ton) is over 20% (FY22 yield 25-28%).  
• Investors staying over FY22/FY23e will get 45-48% of the share price returned in dividends assuming a 70% payout ratio, and the company’s cash pile will be >1.5 bn USD.
• Coal prices have been softer recently, but the recent mining incident threatens a slower rebound in coal production from China. The company looks cheap at 3-3.5x PE FY23e.

• Of the six Malaysian banks screened, we keep RHB Bank and CIMB on the buy list; PB Bank and Maybank are quality but seem fully valued by comparison
• RHB Bank has, in the December quarter, maintained its improved its pre-provision profitability versus its peers; RHB’s high CET1 ratio understates its ROE, and it is attractive on PE multiples
• CIMB once again improved its positive post-provision returns which should support CIMB’s share price given its modest valuations and attractive PEG versus peers; its high NPL ratio is fully provisioned

• Occidental Petroleum had a weak financial performance in the last quarter and failed to meet Wall Street expectations with respect to revenues as well as earnings.
• Storm effects in the Permian and Rockies were largely countered by superior performance in the Gulf of Mexico and the Al Hosn.
• While Midstream and marketing earnings were within projections, OxyChem’s performance exceeded expectations due to stronger-than-anticipated market dynamics.

• NetEase delivered a mediocre set of results for the last quarter as it failed to meet market expectations with respect to net revenues.
• The company’s legacy titles, including the Westward Journey Online series and Fantasy Westward Journey Online did perform well and helped deliver an earnings beat.
• The company’s new game, the Egg Party, hit the Chinese market by storm this quarter.

• Celltrion Inc (068270 KS) reported Q4 results, with revenue, operating profit, and net profit declined YoY and QoQ. Absence of COVID-related products dragged revenue, while non-recurring expenses impacted margins.
• Pricing pressure in biosimilar products and elevated R&D expenses are negatively impacting bottom line. With pipeline progress and upcoming product launches, R&D expenses are expected to remain elevated.
• Celltrion expects to launch Humira biosimilar in the US in July 2023. This year, 8 players are expected to launch Humira biosimilar.

• Viatris delivered a mixed set of results as it failed to meet the revenue expectations of Wall Street but managed an earnings beat.
• They dealt with intense competition for important products like Wixela and the loss of exclusivity for Miacalcin and Perforomist.
• In addition, they acquired Oyster Point Pharma and Famy Life Sciences in January to create their new Viatris Eye Care division.

On 21 February 2023, Wheaton Precious Metals (WPM) announced that it had produced and sold 286,985oz and 293,234oz gold, respectively, and 23,979koz and 21,570koz silver, respectively in FY22. Subject to any historical restatements in its FY22 financial results next week (possible but unlikely and very unlikely to be material), this implies that it produced and sold 66,025oz and 68,996oz gold and 5,353koz and 4,935koz silver, respectively, in Q4. In the case of gold, in particular, this was below our prior forecast (see Exhibit 1), but is consistent with the 14.7% quarter-on-quarter decline in copper production at Salobo announced by Vale on 31 January on account of ‘major maintenance’. This note updates our forecasts for Q422 and FY22 in the light of WPM’s actual production and sales numbers and for FY23 in the light of maiden, detailed guidance.

• ASRT could significantly benefit from a new guideline set by American Society for Gastrointestinal Endoscopy (“ASEG”) this week related to the use of indomethacin (Indocin) post ERCP surgery.
• Indocin is ASRT’s largest source of revenue and nearly all the revenue from off-line use related to post ERCP surgery.
• We updated our earnings model when ASRT issued preliminary fourth quarter results. We believe the ASEG guidance could lead to accelerated market expansion in coming months

According to BB Biotech’s (BION’s) investment team, the biotech industry remains in a very good position. Following a sell-off in the last two years, valuations are still close to the levels seen three years ago, reflecting ongoing challenges and despite the fundamental industry strength. In the sector, BION is differentiated from the Nasdaq Biotechnology Index by its concentrated portfolio (c 30 stocks). The investment team anticipates that 2023 will include multiple catalysts for the sector and for BION portfolio companies, including product launches, important clinical trial results, licensing deals and renewed M&A activity. During 2022 the investment manager, Bellevue Asset Management, strengthened the investment team with three new members (two data scientists and one neurologist).