Equity Bottom-Up

• Revenue grew by 2% YoY in 3Q22, as the decrease of online sales offset the increase of physical stores.
• The operating margin began to improve, as the company cut sales and marketing expenses in minor businesses.
• We believe the stock has an upside of 78% for March 2024 and the price target will be HK$170.

• A correction in Perfect Medical Health’s (1830 HK) share price recently has led to it trading at a decent multiple of 15.2x/11.6x FY23e/24e PE(x) with a 6.9%/9.1% FY23e/24e dividend yield. 
• We estimate the lockdowns in China from Oct-Dec last year will impact the H2 FY23 result, leading to softer revenue growth of 4.8% for FY23 (profit 11% YoY). 
• We are optimistic about China re-opening and cross-border travel and believe that >20% revenue growth can materialize in FY24, led by a recovery in China/HK revenue. 

• Following several years of sustained revenue share loss, Search’s digital advertising revenue market share has stabilised, having seemingly retained its core advertising customers.
• With China’s economic growth recovery, Baidu is perfectly positioned to accelerate its core marketing revenue growth, which is also a high-margin operation.
• Baidu is set up for significant group margin expansion as the higher-margin core marketing business returns to positive annualised growth and it continues to expand AI Cloud margins.

• We’re now two-thirds through the Taiwan Semiconductor earnings season and about one-third through the Taiwan Hardware earnings season.
• Semiconductor gross margins declines have been relatively large, and we believe are tracking to be worse than what consensus expected going into the earnings season.
• There have been few examples of inventory situations improving for semicondcutor companies; results data released so far indicates a potentially deeper trough than previously expected.

• Aeon’s main GMS arm, Aeon Retail, is on track to post a net profit in FY2023 after a 4-fold increase in OP in 1H2022.
• This is largely thanks to stronger sales and footfall and the success of efficiency measures introduced over the past few years.
• The improvements look sustainable and should lead to improved results for Aeon longer-term adding to the already good results from the drugstore, real estate and overseas businesses.

• Guangzhou Automobile Group Co. Ltd. (GAC) (601238.SH -0.51%) is working to get more domestically produced microchips into its vehicles.
• It relies on overseas suppliers for about 90% of its automotive chips.
• GAC Capital Co. Ltd. sees plenty of opportunity to increase the share of domestic chips in the automaker’s cars.

• The three companies Nvidia, TSMC, and ASML are all key global leaders in the AI industry chain.
• Nvidia’s latest results indicate that the company could be returning to a period of multi-year growth and an inflection point for AI demand.
• One can consider going Long a basket of Nvidia, ASML, and TSMC based on a structural growth thesis for AI demand.

• We turn bullish on Kubota. Macro indicators point to stabilization 
• Management guidance for 2023 surprised the market, but we think it is realistic
• We think that quarterly results will be a catalyst to convince investors that profitability is improving

• Apollo Hospitals Enterprise (APHS IN) recorded 19% revenue growth in Q3. The largest segment, healthcare services, which contributed 51% of total revenue, grew 10%. However, net profit dropped 33%.
• The company’s bottom line bled mainly due to high operating cost of the digital healthcare services platform, Apollo 24/7. Excluding operating cost of Apollo 24/7 EBITDA would have grown 10%.
• The company believes that it is at the peak burn rate for Apollo 24/7 operating cost this quarter and expects losses to moderate from here on.

• U.S. Commerce Secretary gave a new speech providing additional public detail about the U.S. CHIPS Act aimed at re-shoring the manufacture of semiconductors in the U.S.
• Emphasis on national security means that financial cost is now secondary for the U.S. and we should not expect any loosening of chip restrictions for China.
• Taiwan companies are straddling a “sweet spot” given they are not restricted, can invest in the U.S. expansion, maintain local non-U.S. advantages, and have had their China-based competition weakened.

• Operating costs moved to USD8.9bn in 4Q22 from USD8.0bn in 3Q22
• Continued high growth in QoQ credit costs up 33% QoQ in 4Q22
• Net fee income seems to be shrinking about USD100m quarterly

• Although the sell-side has lowered their immediate and medium-term targets, our analysis points to another surprise to the downside for Sea Ltd (SE US) in 4Q22.
• Having exhausted pretty much all the cost-cutting in the past few quarters, we don’t see much room for Sea Ltd to further reduce its losses in the e-commerce business.
• With the sell-side optimistic once again expecting a narrower loss, a big miss in the fourth quarter could send Sea Ltd shares back towards their Nov 2022 lows.

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

About Audience Analytics

Audience Analytics is a well-established business enabler with a presence in Singapore,
Cambodia, China, Hong Kong, India, Indonesia, Macau, Malaysia, the Philippines, South Korea,
Sri Lanka, Taiwan, Thailand, United Arab Emirates and Vietnam. With products ranging from
printed publications and online portals to exhibitions and business award programs, Audience
Analytics partners with business owners to grow their businesses. The Group’s portfolio
includes SME Magazine, HR Asia, Capital Asia, Mega Career Fair, SME Solutions Expo,
Malaysia Career & Training Fair, Post Graduate Education Fair, ITX Asia, SME 100 Award,
Golden Bull Award, HR Asia Best Companies to Work for in Asia Award and CXP Best
Customer Experience Award.

• IQ released a set of clean-beat 4Q results, marking the end of turnaround and the start of high-quality growth.
• Years of investments in original content production capabilities paid off and solidified IQ’s leadership in China’s long form video industry. 
• Successful refinancing removed debt overhang. We expect IQ to generate RMB3.5 billion net profit out of RMB32 billion revenue for 2023 and see further upside to share price.  

• GoTo (GOTO IJ)  announced last week that it is accelerating its profit targets and aims to achieve positive adjusted EBITDA by 4QFY2023, advanced by five quarters.
• The company also expects Group’s contribution margin to become positive within the first quarter of 2023 accelerated by four quarters compared to the company’s previous guidance.
• Having analyzed the company’s revenue and cost base, we think this is too much to ask for as aggressive cost cutting would lead to giving up future growth opportunities.

• Huge operating margin and FCF beat as PANW is maintaining efficiency with slower headcount growth and supply chain issues abating supporting gross margins. 
• Deal sizes continue to grow dramatically: $1M deals grew 20% YoY, and  transactions size grew nearly 60%. $5M+ deals grew 84% YoY and $10M+ deals grew 140%.
• Prisma’ Access’ SASE product continues to be the catalyst driving 2.5x revenue lift vs. legacy firewalls.

• Results have come out for both companies. Delta Thailand has delivered massive growth in 2022 however in 2023 consensus expects Delta Taiwan to grow faster.
• One way to outperform the Thailand SET Index in 2023E could be to simply hold the index stocks but exclude Delta Thailand.
• By essentially any fundamental metric, Delta Thailand is over-priced relative to Delta Taiwan and it’s hard to see what the next outperformance driver could be in 2023E.

• In 2022, Eubiologics (206650 KS) reported revenue growth of 41% YoY to KRW55.47B, driven by increased supply of cholera vaccine to UNICEF following the outbreak of cholera worldwide.
• In 2022, more than 29 countries reported cholera cases or outbreaks, up from 20 countries five year ago. Globally cholera vaccine is in short supply.
• Eubiologic’s vaccine manufacturing capacity is expected to go up to 90 million doses after completion of the expansion project this year, which will drive sustainable sales growth.

• FY 2022 earnings were above expectations, execution remains strong. Upgrades coming
• FY 2023 outlook: double-digit margins, positive FCF; announcement of a share buyback program of €1.5bn + €4.2 ordinary dividend
• We remain bullish on Stellantis, our top OEM pick for 2023. Valuation very supportive. 

• Despite a challenging quarter, Walt Disney managed to deliver an all-around beat and expanded internationally.
• The sequential improvement was driven by lower SG&A costs and higher revenue at DTC.
• At Domestic Parks and Experiences, significant operating income and revenue growth in the quarter was achieved.

• Alibaba Group (9988 HK)‘s 3QFY23 results scheduled to release this Thursday is yet again going to be somewhat disappointing with our analysis indicating around RMB35.0bn OP cf. RMB49.7bn in 3QFY21.
• Nevertheless, 3QFY23 results could beat the conservative consensus revenue estimate by 2.8% while the OP is likely to be in line with consensus.
• Having risen 100%+ in few months, a small beat is unlikely to drive-up the share price any longer. Renewed US-China tensions are likely going to be a much bigger driver.

• Kuaishou Technology (1024 HK) will report 4Q2022 and full-year results on 23rd March 2023.
• The company’s livestreaming revenues have made significant progress since 4Q2021 while its domestic business reported an operating profit for the first time in 3Q2022.
• Though the company’s share price has not moved up yet, we think there is further upside to the current share price driven by improved earnings.

• Contemporary Amperex Technology Co. Ltd. (CATL), the world’s largest electric-vehicle (EV) battery-maker, is in talks to offer automakers steeply discounted prices in exchange for sourcing the vast bulk of their power cells from the company in a bid to stave off growing competition from smaller rivals, Caixin has learned.
• If the plan goes ahead, CATL will sell the strategic clients EV batteries made from self-manufactured lithium carbonate at a low price.
• In return, they will be required to sign a contract committing them to buy 80% of their EV batteries from CATL over the next three years, a person close to the company told Caixin on Sunday.

• Devyani International (DEVYANI IN)  has outperformed Jubilant in terms of growth, revenue, and EPS.
• Devyani International (DEVYANI IN)’s focus on KFC and Costa Coffee benefits from the “Dine In” trend, while Jubilant faces increased competition.
• DEVYANI’s plans to double store count and penetrate underrepresented categories justify its premium over Jubilant Foodworks (JUBI IN) .

• The balance sheet is in great shape and could fund a much more aggressive growth strategy (or higher shareholder returns)
• JT lags peers in the higher growth vape & oral markets. Ploom X needs investment to be a global hit. The balance sheet can easily fund both
• Why bullish? The stock is trading cheap and offering a higher yield than its five-year average

At its capital markets day (CMD) Molten Ventures highlighted its successful growth since it listed in 2016, having grown its gross portfolio value by a CAGR of 59% (supported by several capital raises). We note that Molten posted a six-year NAV total return (TR) to end-September 2022 of c 15% pa. Since IPO, Molten has deployed an average £133m in capital per year (excluding secondary investments) and received £452m in total realisation proceeds. Portfolio growth has been underpinned by the 24% pa growth in European venture capital (VC) series A, B and C deal volumes (Molten’s ‘sweet spot’) between 2015 and 2022 (based on PitchBook data).

• Mannkind Corp (MNKD US) has multiple revenue stream, with two marketed products. Flagship drug Afrezza, an inhaled insulin recorded 11% YoY revenue growth to $10.8M in Q3.
• Due to high R&D and SG&A expenses, Mannkind records operating loss. However, gross profit margin is improving, with Afrezza gross margin improving to 81% in 3Q22 from 61% in 3Q21.
• Mannkind’s inhaled clofazimine (MNKD 101) is advancing to Phase 2/3 study for potential treatment of nontuberculous mycobacterial (NTM) lung disease. ~86K people in US are living with NTM lung disease.

Respiri has announced the successful completion of the Michigan Children’s Hospital’s pilot programme assessing the wheezo SAAS (Respiri and partner Access Telehealth) platform. The initial March 2022 agreement enabled pulmonologists to employ wheezo to increase the engagement of paediatric patients with asthma. The hospital will include the wheezo RPM programme in its current standard of care for eligible asthma patients. We expect the paediatric population to be one of the cohorts to find the most utility from the wheezo monitoring protocol (given this population is not always able to self-identify and flag symptoms) and usage feedback from these patients is anticipated to be crucial for Respiri. We also note the Michigan Children’s Hospital is a part of the of the NYSE-listed Tenet Healthcare Corporation (over 60 hospitals across the US) and uptake, if encouraging, can support a broader roll out.

• General Mills continued to outperform the market, in spite of the sharp drop in share price in recent months.
• The company now trades closer to fair value, but weakness in the pet food segment was largely unexpected.
• The drop in volumes is unsettling, but the company now trading closer to a fair value.

• Since our last update in January 2023, Inter Parfums (IPAR) has released its preliminary fourth quarter sales results and there has been more data affirming consumer demand for fragrances
• The reopening of China was earlier than IPAR’s management’s forecasts, which could have a material boost to sales in 2023.
• The addition of Lacoste to the product portfolio remains the catalyst for 2024 sales growth

• Berkshire’s TSMC U-Turn. Berkshire’s TSMC stake was sold down by 86.2% just months after acquiring it. One had to wonder what the about-face on the investment was based on.
• Applied Materials results well received by the market, however provided some caveates in terms of how fast the Memory chip industry recovery will come. (Readthrough: Nanya Tech, Micron, SK hynix)
• TSMC believes that the automotive chip crunch is now easing, which should be good news for the auto industry, especially EV.

• Rakuten Inc (4755 JP)’s 4Q22 results were not all that great with operating loss exceeding consensus by ¥8.4bn mainly through fair value losses in minority investments.
• The domestic e-commerce and fintech businesses did reasonably well with 23.4% and 16.4% YoY OP growth while the mobile business managed to narrow its quarterly loss by ¥8.2bn.
• However, we think the main catalysts for shares to rise 12% following earnings are Rakuten Symphony, Rakuten Energy and a possibly attractive valuation for the Rakuten Bank IPO.

• TY Holdings (363280 KS) is the 19th company in our Korea Small Cap Gems series.
• Our NAV analysis of TY Holdings suggests NAV of 925.5 billion won or NAV per share of 18,172 won per share, which is 47.4% higher than current share price.
• The key catalysts include earnings improvements at SBS and Ecorbit, potential corporate activism on SBS, and potential change in regulation to allow foreigners to invest in SBS (terrestrial broadcasting company). 

• This weekend at the NBA All-Star weekend, we saw the NBA commissioner Adam Silver unveil an in-game streaming experience which had the internet in awe.
• Many have decided to brand the ‘Metaverse’ a sham, a dystopian digital experience or something that just plain won’t work.
• When Mark Zuckerberg changed Facebook’s name to ‘Meta’ to indicate the direction of travel he thinks the world is heading in — we should probably have sat up and said “there might be something there”

• Alight (NYSE: ALIT, $4.5b market cap) is a well-established company providing health, wealth, payroll administration, and human capital management cloud advisory services to most of the leading companies in the United States.
• The company exhibits many qualities that make it an attractive long-term investment: this is an extremely sticky business with 97% revenue retention, high levels of recurring revenues, a market-leading position, and a blue-chip customer base.
• Management also has many levers to accelerate growth further and improve profitability.

• Post the Powertrain spin-off, Conti’s automotive business is more robust and of higher quality, now more focused on rapidly growing areas such as autonomous mobility and safety and motion.
• The Tires division is resilient by nature and generates strong cash flow.
• The Company benefits from long-term structural trends. Valuation is supportive, with 25% upside from current levels

• Unilever had a decent performance in 2022.
• It achieved underlying sales growth of 9.2% and a fair level of operating margin aligned with expectations despite the volatile period.
• Prestige Beauty delivered outstanding double-digit growth with a strong performance by Paula’s Choice.

• Hilton Worldwide Holdings delivered an all-around beat in its last result with strong free cash flows.
• It distributed over $1.7 billion to shareholders for the entire year due to strong profits and increased margins.
• We give Hilton Worldwide Holdings a ‘Hold’ rating with a revised target price.

• Royce Value Trust is ideally placed to benefit from a change in market risk attribution.
• The fund’s IR ratio suggests its managers provide value for money.
• In addition, the CEF’s fee structures are favorable.

abrdn Private Equity Opportunities Trust (APEO) reported a robust 14.1% NAV total return (TR) in FY22 (ended September), as underlying portfolio valuations were up by 10.5% excluding the FX impact (with co-investments particularly strong) and a higher US$/£ rate. Earnings momentum remained high with LTM revenue and EBITDA across APEO’s top 50 holdings at 22.7% and 23.8% in FY22, respectively. This, together with solid exit activity (£210.2m distributions) at an average 20% uplift to carrying values two quarters prior, helped offset lower public valuation multiples.

• Advantest’s share price has risen by 21.5% since the beginning of January, but sales and profits are peaking and YoY comparisons are becoming increasingly difficult.
• Competitor Teradyne’s results and guidance give an indication of potential near-term risk, which could be more than 20%. 
• Visibility is deteriorating and the longer-term outlook uncertain. We doubt the share price can hold up as profits decline. 

• The company was founded in 1828 as a British trading house, active across rubber plantations, tin smelting, trading of oil products, shipping, distribution of consumer goods and more.
• After Singapore become an independent country, Boustead Singapore was spun off from its Malaysian and British counterparts.
• In 1996, the company became controlled by entrepreneur FF Wong. 

• The FY22 profit warning for China Longyuan Power (916 HK) reflected mostly items of one-off in nature and the weak result should be a matter of the past.
• The Jan overall generation growth of 30.6% and wind power growth of 44.4% are very solid performance. With economic rebound and low comparison base, we expect growth to sustain.
• Asset injection from CHN Energy and improvement in financial position through subsidy collection are positives, making its below 10x PERs for FY23 and FY24 attractive. 

• The second wave of pandemic is important logic to drive up Fu Shou Yuan’s share price, but the peak value/lethality could be lower than first wave, leading to lower-than-expected demand.
• Whether the second wave can “arrive as expected” may not depend on pandemic itself, but on “whether to let it happen”,especially when China’s making every effort to promote economic recovery.
• Besides solid fundamentals/optimistic performance, hot market sentiment is very essential if Fu Shou Yuan (1448 HK)’s share price is to outperform. Policy changes are also a potential source of unease.

• Chinese online game revenue decreased year over year for the first time since the statistic started.
• From 2018, the Press and Publishing Administration had significantly reduced the number of new game license.
• Short video has been gradually taking time on site from online game.

• The Chinese online game market shrank for the first time in 2022.
• Tencent’s WeChat plans to launch a cooked food delivery platform.
• Douyin dismissed 15% employees in PICO, which is Douyin’s virtual reality team.

• TSMC – Premium holding up despite Berkshire investment sale news. We maintain a model on the company.
• UMC – ADR now trading at a discount. Pretty clear opportunity for a reversion back to a premium.
• ChipMOS – At parity, results coming February 23rd. We maintain a model on the company.

• AMD’s revenue and margins hit an all-time high, and that’s bad news for AMD.
• Investors should pay close attention to decisions regarding capital allocation, according to the product roadmap.
• AMD is no longer the only game in town for semiconductors, and this is bad news to AMD.

• Toyota delivered strong set of results in the quarter despite the changing business environment especially given the company lagging behind in the global shift to EVs.
• The company’s focus on hybrid vehicles and its avoidance of shifting to EVs is hurting its market share immensely in many key markets.
• In this report, we have carried out a fundamental analysis of the historical financial statements of the company.

• Ford Motor delivered a disappointing result in the last quarter.
• The performance was below the expectation of the management as well as Wall Street and its industrial performance was not up to the mark.
• However, Ford’s balance sheet liquidity stays strong, and the ability of the company to generate free cash flow has improved.

• PayPal Holdings delivered strong results in the last quarter surpassing Wall Street expectations in terms of revenues as well as earnings.
• In the quarter, eBay Marketplaces revenue fell by 31%, and the take rate on these volumes dropped from 2.29% to 1.95%.
• We give PayPal Holdings a ‘Buy’ rating with a revised target price.

• Philip Morris ended 2022 on a positive note and delivered another all-around beat.
• The company’s volume increased significantly due to the ongoing IQOS development and steady cigarette volume.
• Over a third of the total Philip Morris and more than 50% in 70 markets had smoke-free net revenues for the entire year.

• Hershey ended the year on a strong note despite macroeconomic uncertainty, continued supply chain disruptions, and inflation.
• Consolidated net sales, organic, constant currency net sales, and reported net income increased and the company managed an all-around beat.
• The growth in net sales was driven mainly by net price realization, with steady consumer demand behind increased capacity and higher advertising levels.

• Strong passenger traffic year-to-date indicates that full-year passenger throughput for 2023 will be on par with 2019.
• Concerns that China resuming outbound travel could turn domestic tourists away from Hainan are overblown, overlooking the huge pent-up leisure travel demand over last three years.
• We expect investors will focus on pace and sustainability of the recovery when company announces 2022 results. Being eligible for Stock Connect Program in 2023 will be a key catalyst. 

• Kolte Patil reported weaker than expected Q3FY23 accounting earnings due to slight delay in arrival of OC for some projects. However, sales velocity and business development activity was robust.
• Reported Q3FY23 earnings had weak margins due to revenue contribution from two low-margin projects.
• Q4FY23 is on track to be strong both in terms of reported earnings (which depends on the timing of OC) and sales velocity.

• Q3FY23 tends to be the weakest quarter seasonally. Volume de-growth was -10% QoQ, in line with the expectation as per historical seasonality trend.
• Q4FY23 is all set to be a strong quarter. Management is confident of closing FY23 as per the previously stated revenue and margin guidance.
• The new value-added segment, Barrier Packaging, has started to contribute meaningfully to the revenue. Tube Laminates, another value-added segment, will also start to contribute soon.

• BEC revenues continue to match the pre-COVID level suggesting that the business has now normalized fully post-COVID. COVID led shift in working habits has had no structural impact.
• IT Office Leasing revenues grew 6%+ QoQ, led by the improvement in occupancy rates. Profitability also improved led by operating efficiencies. 
• BEC’s EBIT margin came in significantly lower than expected due to one-off expense of INR 15cr for demolition of a factory shed to build a new exhibition hall.

• Classys (214150 KS) reported strong performance in 2022, with highest ever revenue and profit, driven by increased sales of equipment and consumables due to increased global awareness of major products.
• Revenue from export recorded a CAGR of 30% during 2017–2022, mainly driven by strong growth in Brazil. Classys launched Shrink Universe in Korea and Ultraformer MPT in global market.
• For 2023, Classys has guided for revenue of KRW170B (+20% YoY), driven by Shrink Universe’s expansion into the global market, full-fledged domestic sales of Volumemers, and increasing volume of consumables.

• Fresenius Medical Care Ag & Co (FME GR) is reporting decelerating organic revenue growth and earnings decline. The company has revised 2022 revenue and earnings guidance twice in last year.  
• Earnings are heavily impacted by the unprecedented US labor market situation constraining capacity and accelerating wage inflation, and worsening macroeconomic environment driving cost inflation and supply chain disruptions.
• For 2022, the company expects low single-digit percentage revenue growth and high teens to mid-twenties percentage decline in net income. CEO has stepped down within two months of taking charge.

• We discuss the increasing likelihood of formation of another Internet bank, challenger banks, and other measures to foster competition and increase social contribution on the Korean banking sector in 2023.  
• The Korean banks underperformed in the past week due to President Yoon pointing out “banks and telcos need to share the increasing living costs.”
• We believe Kakao Bank is likely to underperform the market in the next several months as investors fear about greater competitive pressure, especially on the existing Internet banks.

• Clorox delivered a solid set of results in the previous quarter with organic sales growth in 3 to 4 segments, double-digit earnings growth, and gross margin expansion, despite the challenges in the market due to an unstable global operating environment.
• The company delivered an all-around beat and continued to work on the enhancement of its brand equity.
• Clorox has been encountering different challenges in the macro environment for the past few quarters especially after the Covid-19 tailwinds have receded.

• Estee Lauder delivered a highly disappointing result despite surpassing Wall Street expectations in terms of revenues as well as earnings.
• With its business continuing to be pressured by external headwinds resulting from the pandemic, the organic net sales and the earnings per share decreased in the quarter for Estee Lauder.
• Estee Lauder should also benefit from the acquisition of Tom Ford in competing with L’Oréal.

• 4Q22 results confirm that Nubank is the benchmark among EM neobanks in terms of activity rates, as well as trends in revenues and costs per client and digital efficiencies
• We see further potential for broadening and deepening the product offer to customers, at little incremental cost especially in Brazil, to drive cost effective revenue growth
• Our proprietary Nubank model forecasts are broadly in sync with positive consensus estimates; we forecast group ROE of close to 30% in FY 2025, despite high cost of credit assumptions

• UBTech Robotics (1683374D HK) is engaged in smart service robotics solutions in China and has filed for an IPO on the Hong Kong Stock Exchange.
• Though the company operates across a number of business segments, the growth prospects seems limited for most of these businesses.
• UBTECH’s cashflow and liquidity also seems to be getting drained as the company needs to spend heavily on R&D and marketing to keep up with constantly evolving technology.

• Samsung C&T announced the cancellation of its entire treasury shares over the next five years. It has 24.7 million shares of common shares (accounting for 13.2% of common shares outstanding).
• We like a pair trade between Samsung C&T (go long) and Samsung Electronics (go short). Samsung C&T’s share cancellation is likely to have a positive impact on its shares.
• The recent sell-down of most of its shares in TSMC by Berkshire Hathaway is also likely to be viewed negatively by some investors in Samsung Electronics. 

For our next Corporate Webinar we are glad to welcome New Horizon Health’s CFO, Yu Gao.

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

• JD’s post-CNY recovery is slower than expected, based on our checks. We suggest JD would face an unfavourable external environment going forward due to: 1) the comeback of offline commerce; 
• 2) PDD’s growing penetration in high-tier cities and brand products; 3) Meituan Instashopping offers faster delivery than JD.
• We cut JD’s FY23 revenue YoY growth forecast from 13% to 11%. Our top and bottom line estimates for FY23 are (3%) and (5%) below cons. Downgrade to SELL

• The Keepers Holdings (KEEPR PM) will announce its FY22 results in the second week of April 2023. Good results(>50% YoY profit)/high dividend payout(50%) have been catalysts for the share price.
• We believe Q1 2023 business momentum will also be good, rendering the growth story intact. The company also made a very small acquisition of “Island Mixers” from Diageo Philippines. 
• Despite the move recently, the stock trades at 9.4x/7.3x FY22/23e with 8-9% of the market cap in cash. With an attractive dividend yield of 5.3% for FY23. 

• We were too early to turn bearish on Asics. Recent stock price performance has been strong
• Although rising inventories have yet to impact on margins, they are a potential red flag
• The stock is not cheap at 29x PE. The long-term financial model suggests limited upside from here

• We expect NIO to report 4Q22 top line of RMB 16.7bn and GPM of 13.2%, missing consensus by (4%)/(0.8ppt), primarily due to COVID-related supply-chain issues and lower ASP. 
• We cut TP to US$ 13, due to weak momentum and the ongoing margin pressure in 1H23. We maintain BUY, as 1) intact model cycle starting from 2H23;
• 2) the upcoming ET5 station wagon in 2H23 and the mass-market/low-end brands in 2024 will expand its scale economy, which in turn will justify the sustainability of its business model.

• We believe the 11.4% decline in share price of Orient Overseas International (316 HK) YTD is not sufficient to reflect the plunge in freight rate and weakened load performance.
• Its 4Q22 average revenue/TEU of US$1,822.3 has returned to 2Q21 level; but with latest spot rate already plunged to early-2020 times, there is further downside for OOIL’s realised rate.
• Export outlook is uninspiring as well, indicating pressure on demand. With similar ROE, OOIL only trades at 0.3x P/B in FY20, that makes its current P/B of 0.9x expensive.

• We expect Miniso to report C4Q22 top line, non-GAAP operating profit and GAAP net income 1.7%, (1.5%) and in-line vs. consensus. Our C1Q23 top line is 3.7% vs. the consensus; 
• MNSO’s sustained growth driver to be bringing Made-In-China merchandises to the mall economies around the world; We re-evaluate the stock and maintain the Buy rating, with TP at US$22.
• The downward revisions of EPADS：1) slower offline resumption pace from Covid impact in 2022, 2) rescheduled oversea expansion paces, compared to our previous update on Nov. 23rd, 2021.

• We expect ACMR to report C4Q22 top-line, non-IFRS operating profit, and IFRS net income in-line, 21% and 96% vs. consensus, respectively. 
• New SPE import limits provide ACMR with a multi category quasi-monopoly. Thus, we raise our FY23 market share estimate for ECD/wafer clean/furnace to 51%/32%/2% from prior 25%/25%/0%.
• ACMR’s quasi-monopoly position in multiple categories sustain its long-run growth, which underlines a 58% TP increase to US$ 30 and continued status as our top hardware pick.

• We met with the management of Oriental Watch (398 HK).  HK demand continues to be sluggish, while China sales were resilient with single-digit SSSG growth. 
• The company will continue with its conservative policy of not expanding as Rolex/Patek restrict watch supply. It will only foray into boutique expansions if KPIs on return/brands etc., are met.
• With its generous >100% payout ratio, the stock trades at a 15% dividend yield based on our estimated 6.9x FY23 PE, with >50% of its market capitalization in net cash.

• We estimate SEA’s 4Q22 revenue to be largely in line with cons., while non-GAAP net loss to be narrower than cons. 
• We see SEA to continue to experience challenges in top-line growth because of inflation, competition with TikTok, and weak performance of Free Fire. Yet, the losses will be better managed.
• We slightly raise SE’s TP by 6% to US$55 to reflect 4Q22’s margin beat, yet maintain SELL because of the mid-to-long-term challenges.

• Last week, Japanese dairy play Morinaga Milk Industry Co (2264 JP) acquired a soy-based food company in the US and a baby formula distribution company in Vietnam
• These acquisitions are in keeping with Moringa’s medium-term business plan (to Mar-2025) to achieve an overseas sale ratio of 13%, compared to 8.7% last year.
• 3Q23 results were also announced with 9M23 sales and operating profit of ¥405.2bn and ¥20.5bn, a change of +16.8% and -7.2% yoy.

• In its earnings update, troubled Aussie casino operator Star Entertainment (SGR AU) said revenue was down 1% on pre-COVID levels, and expects FY23 EBITDA of $330mn-$360mn vs A$525mn in FY19.
• But the big news was the possible $400mn to $1.6bn non-cash impairment charge in relation to disciplinary fines from regulators and new casino duties. 
• Shares tanked and are currently trading around a lifetime low. One for the brave or one to ignore?

• Pharmaessentia Corp (6446 TT) recorded revenue of NT$232M (+259% YoY) for its sole marketed product Besremi in January 2023. For 2022, Besremi reported revenue of NT$2.9B (+339% YoY).
• Thus far, Besremi received approval in US, EU, Switzerland, Israel, South Korea, Macao, and Taiwan. Besremi is expected to obtain approval in Japan and China in 2Q23 and 1Q24, respectively.
• Besremi is in phase 3 trial for essential thrombocythemia, which is a myeloproliferative neoplasm characterized by an overproduction of platelets in the blood resulting from a genetic mutation.

• We estimate JOYY’s 4Q22 top line/bottom line to miss cons. by (3%)/(12%), as TikTok’s influence in major market expands. 
• We suggest that a much slower recovery in 1Q23 does not bode well for its full year outlook. Our top line and bottom line are (2%)/(14%) lower than cons.
• Maintain SELL and cut TP to US$25.1, implying 12.8X PE in 2023.

• EDG is one of the highest grade at-surface discoveries in Canada with grade open along strike and to depth
• Simplistic gold camp in the making – Idyllic access to infrastructure, within 10km of another permitted operation, low permitting risk in comparison to the Golden Triangle
• Resource has potential to be several million ounces – Orogenic gold deposit confirmed over a 1.5km trend and gold anomalies spanning across the property Endurance Gold’s flagship Reliance Gold Project is the primary driver of our valuation for the Company as it is showing early-yet-strong signs of becoming a multi-million-ounce high-grade gold deposit with economical ounces just kilometers from another permitted gold operation.

For Q223, Target Healthcare REIT declared a second quarterly DPS of 1.69p, supported by inflation-linked rental growth and improving rent collection, which are in turn protected by fixed costs on 96% of borrowings. Yield widening across the broad property sector affected the portfolio’s property valuations, although the effect was significantly mitigated by the quality of Target’s portfolio and long-term, indexed leases.

• Thermo Fisher produced a solid set of results in the fourth quarter, with impressive growth in the low teens for the quarter and mid-teens for the entire year.
• The management saw a decent growth in industrial and produced significant year-over-year growth in the businesses of mass spectrometry, chromatography, and electron microscopy.
• Overall, we give Thermo Fisher a ‘Hold’ rating with a revised target price.

Deutsche Beteiligungs (DBAG) posted a 7% increase in NAV per share in Q123 (ending 31 December 2022), supported by a €23.9m positive effect related to the higher earnings of portfolio companies, mostly due to the shift from 2022 to 2023 budgeted earnings in their carrying values. This was further strengthened by €36.5m valuation tailwinds from higher multiples amid the rally in public equities in the last quarter of 2022, as well as the recognition of agreed disposal prices (most notably for BTV Multimedia). DBAG’s shares trade at a 6% discount to NAV, while historically they have traded at a premium (6% on average in the last five years), reflecting the value of the fund services business.

• Rescinding of Rs 200 bn FPO deprives the company of much needed long-term funds
• Company has a liquidity issue as this analyst estimates its short term borrowing exceeds its short term borrowing limit and it requires long term funds to bridge the gap
• With foreign and private sector banks unwilling to increase exposure, the company needs to inject funds from founder entities, divest assets, reduce capex and improve working capital to infuse liquidity.

• Shimano’s Q4 results were on track, but management is guiding for a GFC-level slump in 2023
• Management cites macro concerns, but these are well-known, discounted, and already recovering…probably
• Shimano’s stock price is trading at 23x bearish guidance versus its historical average of 25x. 

• Q4 results largely met our expectations with modest improvements QoQ for mobile operating losses and decent growth for eCommerce and fintech
• A meaningful rebound for the mobile segment is more likely to fall in H2 as cost reductions take time to kick in 
• Results for eCommerce and fintech were more encouraging but less relevant as long as the mobile segment struggles.  We remain at Neutral

• Pentamaster Corp (PENT MK) specialises in the manufacturing of automated testing equipment (ATE segment) and the provision of factory automated solutions (FAS segment). 
• Pentamaster’s solid track record, exposure to structural trends (electric vehicles), profitability, cash generation and healthy balance sheet are attractive. The shares are up 12.9% YTD.
• However, the shares reflect this story and the valuation looks full compared to peers and historical multiples. We like the fundamentals and would be buyers of any prolonged weakness.

• Due to the recent news by the Malaysian government that aims to in-house the e-government service, My E.G. Services (MYEG MK) share price fell, similar to the 2018 event.
• Revenue from the Philippines business went up 5x and contributed up to USD 91 million, or around 52% of FY 2021 total revenue. 
• It gives a great opportunity for investors who believe in MYEG’s story to start building position.

• freee (4478 JP) reported 2QFY06/2023 results today. Revenue increased 35.3% YoY to JPY4,479m (vs consensus JPY4,469.5m) while operating losses for the quarter widened to JPY1,281m (vs consensus JPY1,574.5m).
• Both ARPU and no. of paying customers continue to increase and the company’s strategy of onboarding large corporates seems to pay off.
• Widening operating loss is no major concern as it is a matter of time before freee cuts down advertising and other costs given the expanding revenue base and excessive GPM.

• We have been bullish on Nagacorp for over three years. We long expected it to recover from covid damage on a pace propelled by rapidly easing travel bans.
• Annual results show dramatic increases in GGR across almost all customer segments.
• We see a return to double digit sales growth sustainable through the end of 1H this year.

• WuXi AppTec is facing how to keep high growth momentum under the high base of last year’s performance.If there’s no high growth point with certainty,high valuation is hard to sustain.
• The US wouldn’t stop tightening monetary policy until “it’s fully prepared”.Investors need to consider a situation that high interest rate environment is longer than expected,under which CXO remains in trouble.
• Market sentiment towards CXO has changed. We think CXO isn’t suitable for long-term hold but only for short-term trade in 2023. Buying low and selling high is a better strategy.

Dentsu reported record full-year headline results in FY22, which were bolstered by a final quarter in which the company delivered organic net revenue growth of 3.5%. Good progress continues to be made in Customer Transformation and Technology (CT&T), which grew 17.5% y-o-y and constituted 32% of revenues in the year. Management forecasts 4% organic revenue growth for FY23, reflecting the tougher macroeconomic environment. Guidance on the underlying operating margin in FY23 is for a retrenchment to 17.5% as investment is made to drive CT&T and support the One dentsu initiative. This is set to rebound to 18.0% in FY24 as the benefits start to flow through. Year-end net cash of ¥71.3bn and an appetite for leverage of 1.0–1.5x provides ample resource for both capex and M&A. Our FY23 estimates are under review.

• Gibson Energy’s revenues for 2021 increased to c$7.2bn recording a major percentage spike of 46.03% com- pared to revenues of 2020.
• Similar uptrend showed the main profitability indicators in 2021 (EBT, EATAM).
• Partial or total lifting of restrictive measures across the global economy in 2022 as well as an ongoing energy crisis, contributed to an increase in oil demand, setting the company on track to achieve record high profitability.