Equity Bottom-Up

• Share price of China Longyuan Power (916 HK) has been under pressure over the last two weeks due to concern on future offshore wind power project return.
• We believe the low tariff of Rmb0.19/kWh won by a Huaneng Power Group consortium in Fujian is more an exceptional case and should not be taken as a new normal.
• China Longyuan’s growth has been well secured by its project pipeline as well as 21GW potential injection from parent. This round of de-rating is just too excessive. 

• Supersized profits in the game division will of course normalise, but there are strategies to extend profits in the segment
• At 7x EV/EBITDA we think the market has become too pessimistic on the long-term outlook for not only games, but also internet advertising and media
• The company will release Q3 results in three days time – we expect a them to beat consensus 

• Alibaba’s Freshippo expands to two inland cities, which reflects its success in coastal areas.
• Online game’s revenue and players decreased for the first time in 14 years.
• NetEase set up the second game studios in the United States.

• China Resources Medical has more advantages than ordinary private medical institutions in terms of its State-owned Key Enterprises background, delicacy management, cost reduction and efficiency increase, resources/talents, industrial chain layout.
• However, due to the policy environment, China Resources Medical just represents “a small area of relatively little risk in a large area that is clearly risky”. 
• General hospitals have poor business model and profitability. Despite its strength, we are conservative about the outlook of China Resources Medical, which is difficult to achieve a higher valuation.

• One trend that has accelerated in the last few quarters is the pace of acquisitions being made by cash-rich companies.
• The significant Macroeconomic uncertainties that lie ahead, coupled with record cash balances at the largest firms on Wall Street, have only accelerated the pace of industry consolidation.
• It’s no secret that high-quality De-SPACs with strong earnings have been prime takeover/acquisition targets in recent months after seeing their shares take a beating through the year.

• Maintain BUY for BBL with a target price of Bt159. withstand uncertainty, sustainable profit growth, potential benefits from an upcycle of interest rates, and undemanding valuation. BBL’s 2Q22 net profit
• 2Q22 results BBL reported a net profit of Bt7.0bn in 2Q22, up 10% YoY           (-2% QoQ), which was 6% lower than expected on higher provisions. The YoY rise was supported
• Lending growth in 2Q22 increased by 2.5% QoQ due to large corporate loans and loans made through the international network.The NPL ratio slightly increased to 3.4% and the coverage ratio 

• Micron Technology delivered a decent quarter matching Wall Street expectations in terms of revenues but delivered an earnings beat.
• The company’s performance has been driven by the forte in DRAM shipments to game, console, PC, and cloud customers.
• Among new launches, Micron recently announced the launch of the i400 microSD card and partnership programs with IQ (Industrial Quotient).

• We have long been fans of this company due to its record of sound management decisions and asset allocation moves to expand steadily against demand.
• Six month results support our thesis that ASEAN casinos that have reopened are re-ramping revenues apace as Macau remains dead pooled by Beijing zero tolerance covid policies.
• At its current price we see mounting sentiment to the upside as sequential earnings improvements y.y can be expected in Qs 3 and 4.

• Maintain BUY for SCB with a target price of Bt139.00. SCB’s 2Q22 net profit came in line with our expectation of Bt10bn (+14% YoY, -1% QoQ). Asset quality remained resilient 
• Analyst meeting We are neutral after attending the analyst meeting on 21 July. SCB adjusted some2022 financial guidance to reflect its 1H22 performance and potential effects on the economic environment.
• Despite the volatility in the cryptocurrency market,SCB would continue to pursue its business expansion in digital asset businesses.  SCB mentioned that it had minimal cryptocurrency exposure of less than US$1m.

• Walgreens Boots Alliance is off to a strong start to the year with growth in first-quarter sales and adjusted earnings, a performance that was beyond Wall Street experience.
• The company had a particularly strong quarter online, which includes purchasing online pickup in-store.
• We provide the stock of Walgreens Boots Alliance with a ‘Hold’ rating with a revision in the target price.

• Paychex had a strong quarter with growth driven by strong retention and sales.
• The company delivered an all-around beat surpassing market expectations and there was an increase in total revenue as well as service revenue.
• We provide the stock of Paychex Inc. a ‘Hold’ rating with a revision in the target price.

• General Mills had a decent start to 2022 and its last quarter was another all-around beat.
• Most of the media spend is now digital and General Mills is leveraging the same to build a solid databank that can be helpful in improved customer targeting.
• We provide the stock of General Mills a ‘Hold’ rating with a revision in the target price.

• McCormick had a disappointing quarterly result as it failed to meet Wall Street expectations despite the fact that its revenues showed both volume and pricing growth.
• The growth of the company in flavor solutions was decent but supply chain and high-cost inflation are continuing challenges for the company.
• In EMEA, McCormick continues to have a robust share performance in most markets and categories.

• Arwana Citramulia‘s latest 1H2022 numbers unline its prowess in navigating a difficult operating environment with growing production volumes and better margins as it continues to improve its product mix.
• An ongoing shift to its higher-end products through line conversion to Digi Uno plus additional capacity for its ARNA porcelain tiles will underpin growth and pricing this year and next.
• Arwana Citramulia continues to expand its distribution through Catur Sentosa and now through MITRA10, which now sells ARNA tiles. Valuations are attractive and analyst forecasts look shy of the mark.

• Snap had yet another earnings related meltdown as management has lost all credibility in forecasting its business. 
• Because co-founders Spiegel and Murphy have 99.5% voting shares, there is not an opportunity for an activist to fix the situation like Pinterest and Twitter.
• The issues plaguing Snap are likely not hurting META as much given a broader ad base, better ROI on its ads, and a mgmt team that has already guided down.

• NTT announced it would build and operate a third trans-Pacific subsea cable (JUNO) with NEC as the vendor and a 2024 activation date
• This also represents the second trans-Pacific cable in five years and the one with the highest capacity to date
• This is not core to NTT’s business but it does highlight how capacity needs are expanding as network speeds accelerate and how those costs can be managed

• The Keepers Holdings, Inc. (KEEPR PM), the largest imported spirit distributor in the Philippines with >70% marketshare, now trades at 9.1x/7.6x FY22/FY23e with a 15-20% CAGR revenue/profit growth profile.
• The company has almost 50% of its market capitalization in cash, and we believe it is at the cusp of making an acquisition, making it more integrated. 
• We believe for the Q2 2022 results ( released before the 15th of August ), the company will continue to show a growth profit trajectory of >20% and execute well.

• FactSet has a fundamentally solid business model and its business has not been significantly affected despite the bearish trends in the S&P500.
• Asia Pacific continued to be a growth-driving geography with ASV growth at 14.3%, driven by demand from asset managers and vested owners.
• With greater expansion with asset owners and asset managers, respectively, both CTS and analytics contributed to growth.

• Intuitive Surgical (ISRG US) reported Q2 results, which missed expectations. Overall performance was impacted by COVID-19 resurgence and macro headwinds including inflation and supply chain constraint.
• Despite lockdowns in its second biggest market of China, the company reported worldwide da Vinci procedures growth of 14% y/y, in-line with earlier full-year guidance range of 12–16%.
• With China showing signs of recovery, Intuitive now expects worldwide da Vinci procedures to grow 14.0–16.5% in 2022. However, soft U.S. hospital capex remains an area of concern.  

• In its last result, Accenture delivered robust overall results, reflecting strong double-digit revenue growth across all areas of its business and ongoing operating margin expansion due to its ongoing large-scale investments in its company.
• Accenture continued with its acquisition-led growth approach and agreed to acquire The Stable.
• In a nutshell, Accenture is in a unique position to support both its clients’ growth objectives and cost-saving initiatives.

• FedEx ended the 2022 fiscal year with its highest-ever revenue of $93.5 billion and adjusted operating income of $6.9 billion, both up 11% year over year, in the face of an increasingly difficult global backdrop.
• After a successful turnaround effort, the company has been enjoying the fruits of a successful long-term strategy.
• In this report, we have carried out a fundamental analysis of the historical financial statements of the company.

• Amid a major decline in the Korean stock market (KOSPI down 19.6% YTD), one of the best outperformers has been Kia Corp (000270 KS) which is down only 2% YTD.
• Kia Corp is well poised to continue to outperform KOSPI in the next 6-12 months, mainly driven by its increasing market share for EVs globally and cheap EV/EBITDA valuation multiples.
• The company also reported outstanding 2Q 2022 results, which should boost near-term sentiment on the stock. Kia Corp plans to launch its flagship EV9 model (large sized SUV) in 2023.

• Carnival Corporation continued its recovery story from the pandemic and delivered a decent quarterly result by restarting 20 more ships, using 74% of its fleet’s capacity for guest cruise operations throughout the entire period.
• The company currently operates guest cruises with 91% of its fleet’s capacity which is a very positive sign.
• Regarding the ships in operation, occupancy for the second quarter was 69%, a significant improvement over the first quarter’s 54%.

• Tesla beat both our estimates and the Street’s by a wide margin, but the earnings call had some cautiousness regarding order backlogs, production ramps & 4680 cells.
• Tesla sold 75% of their Bitcoin holdings at a gain in Q2, which largely accounts for the earnings beat. It is also a sign of larger cash needs than expected. 
• The stock was only +1.5% after hours and it was noteworthy that the biggest Tesla bull on the Street said this huge beat wasn’t a “step change” to consensus. 

• Are the cuts a sign of discipline that we have been waiting for or
• Is it due to lack of ability to procure the equipment? 
• Seems a combination of both if you listen to the words of the Chairman

• Yamato Transport is Japan’s largest courier service, owning nearly 50% share, but even the biggest player needs to race to keep up with booming demand for e-commerce. 
• Over the past six years, it has gradually built an ecosystem of online tools and physical infrastructure to help vendors and customers, importing knowhow when needed.
• So far, these measures have helped it stay on top of spiralling demand but there remain pressures.

• Sanrio (8136 JP) , the company behind Hello Kitty, has bounced 12% since striking a deal with Alibaba’s IP licensing platform Alifish to produce and sell merchandise of 26 characters.
• This seems like a way to combat copyright infringements. However, we are sceptical that this agreement could stop cheap counterfeits from entering the market.
• Sanrio badly needs a revival. However, history is not on the company’s side as they have been trying to revive the business over the last 20 years.

• China’s central government formally launched a state-owned iron ore giant to consolidate China’s massive mining investments and coordinate global purchases of steelmaking materials for the world’s largest steel producing nation
• With registered capital of 20 billion yuan ($3 billion), China Mineral Resources Group was established Tuesday in the Xiongan New Area
• Creation of the enterprise is seen as part of China’s long-pursued goal of enhancing its position in the global iron ore trade

• Comirnaty had had a significant positive impact on Pfizer Inc (PFE US)’s revenue in 2021. 2022 will be no different. However, outlook for COVID-19 vaccine is uncertain beyond 2022.
• Apart from the existing blockbuster fast-growing drugs, Pfizer has a rich late-stage pipeline. Its alopecia areata drug candidate, ritlecitinib has potential to become a blockbuster drug.  
• Pfizer aims to add $25 billion revenue to its 2030 top-line expectations. Thus far, the company has announced two deals toward this ambition, entailing potential revenue addition of $7.5 billion.

• Alphyn Capital Management LLC (“ACML”) is a registered investment advisor in New York. We help clients invest in high quality public companies to both preserve and grow their wealth over the long-term.
• The Master Account, in which I am personally invested alongside SMA clients, returned -14.7% net in Q2 2022, as reported by our fund administrator.
• With the threat of increasing rates, investors have renewed their focus on profits.
• I try not to take a position on a discrete event, such as interest rates or quarterly earnings, as the odds of getting these right are too low, and the costs of getting these wrong are too high.

• Mayar Capital provides investment management services to institutions, family offices, and high net-worth individuals.
• For the three months ending March 31, 2021, Mayar Fund (Class A) was down 6.6% net of all expenses and fees.
• Several of our SMA clients have chosen to switch their investment to the Fund, so we expect Fund assets to increase to approximately $170 million once the transfer is complete.

• PT Metrodata Electronics remains one of the key enablers for the digital economy and overall digitalisation of corporate Indonesia through both providing hardware, software, solutions, and consulting services. 
• The key driver for its ICT distribution comes from PCs, laptops, smartphones, and gaming whilst its solutions and consulting business is driven increasingly by the formation of digital banks.  
• PT Metrodata Electronics is benefitting from increasing mobility, which has started to boost its higher margin solutions and consulting business. Valuations are attractive and it’s in a net cash position.

• Abbott Laboratories (ABT US) reported strong Q2 results, thanks to higher-than-expected COVID-19 test-related sales of $2.3 billion. However, base business remained muted due to nutrition product recall and manufacturing shutdown.
• FreeStyle Libre revenue grew 19% y/y to $1.1 billion in the quarter, with a global user base exceeding 4 million. Abbott received FDA approval for FreeStyle Libre 3 system.
• The company has raised 2022 EPS guidance 4% to $4.90 and ahead of consensus. COVID testing revenue guidance was also raised by 36% to $6.1 billion.

• Consensus remains positive about Sea Ltd (SE US) with 12.3% QoQ revenue growth in Q2 and a 32.2% revenue CAGR over the next two years.
• However, with Free Fire losing active players and Shopee’s growth momentum in South East Asia broken, we expect a disappointing Q2 from Sea Ltd.
• Free Fire is on its last legs and Shopee has decided to halt its geographic expansion. Thus we think that there’s significant downside to Sea’s Q2 and medium-term consensus.

• The planned eToro IPO via SPAC merger with FinTech V was terminated in early July, due delayed regulatory process as well as poor market conditions
• The now defunct SPAC deal had implied an eToro valuation in excess of USD10bn; post failed SPAC deal, its latest funding round implies a valuation range of USD5bn to USD6bn
• Softbank made its eToro investment through the Vision Fund 2 in 4Q 2020; Softbank had been counting on the SPAC deal with FinTech V as its partial eToro exit strategy

• Netflix’s quarter was modestly better than reset bearish expectations…but not by much. 1M subscriber gains projected for 3Q below consensus 1.7M.
• Timeline for reaccelerating subscriber growth from advertising and password sharing still seems shockingly long. 
• Netflix remains a top funding short for the forseeable future, we think $210 is the high end of the range, $170 the low end, but could justify $150.

• We estimate PTTEP’s 2Q22 net profit to surge 170%YoY and 83%QoQ on the back of higher sales volume and average selling price.The solid performance is expected to continue in 2H22 
• Bright 2Q22 earnings outlook We expect PTTEP to post 2Q22 net profit of Bt19.3bn (+170% YoY, +83% QoQ), driven by solid average selling price and sales volume.
• The average selling price (ASP) is forecasted to increase to US$56/BOE (+32% YoY, +8% QoQ) as the reference Dubai crude oil price rose to US$108/bbl (+61% YoY,+13% QoQ) and gas

• Innovent is expected to transform from a biotech to a biopharma. From the present point of view, the Company is a better comprehensive choice of certainty, elasticity and safety.  
• With high R&D efficiency, strong sales capability, top talent teams, and mindset keeping pace with the times, investors could consider to replace Hengrui with Innovent in the portfolio.  
• Innovent’s valuation anchor is HK$40 billion, below which it’s undervalued. Its market value could reach about RMB80 billion to RMB120 billion, based on sales of RMB10 billion to RMB15 billion. 

• The proxy fight between Faraday’s founder and its Board has heated up further, with the founder making two 13D filings to the Board in just 3 days. 
• The founder wants to replace a certain Board member with a candidate of his choice and said he has third party investors willing to inject $100M+ if the Board agrees. 
• The Board never replied and this shows how tight the cash crunch at Faraday has become. Q2 cash should come to only $60M, or roughly 1 month of operations.

• Nidec reported 1Q earnings with clear evidence that near-turn earnings have bottomed. Now the market can focus on what matters, E-Axles 
• The E-Axle outlook strong than ever across demand, production, and profitability  
• We are bullish on the stock at 30x forward earnings versus the 5-year average of 55x, especially as China accelerates policies to drive EV adoption

• Maintain BUY recommendation for CENTEL with a target price of Bt49.0. We expect the company performance to turn a profit at Bt57m in 2Q22 from Bt44m loss in 1Q22
• Strong recovery in hospitality business. We expect hotel revenue to hit nine quarter high at Bt1.4bn thanks to impressive performance for Thai hotels as RevPar for Bangkok and Upcountry hotels
• Food revenue is expected to hit 11 quarter high at Bt2.9bn (+24%YoY+11%QoQ) as we anticipate continuing SSSG at 6.1% compared with 0% and 10% in 2Q21 and 1Q22 respectively. 

• This is our first report on go-to-market intelligence and engagement platform, ZoomInfo Technologies which is catering to sales and marketing teams across the globe.
• The expanding Revel platform of the company is a positive development and its expanding database bodes well for its enterprise customers.
• ZoomInfo has recently partnered with Sales Confidence for empowering revenue professionals through data privacy compliance and sales solutions.

• This is our first report on broadcasting giant, Sirius XM Holdings.
• The company reported strong first-quarter growth in subscription and advertising revenue, as well as strong cash flow generation.
• We initiate coverage on Sirius XM Holdings with a ‘Hold’ rating.

• Coupang (CPNG US) has bounced sharply following a 13G filling which indicated a change of heart from the pre-IPO investor, Maverick Capital with the purchase of an additional 7.7m Coupang shares.
• Maverick seems to be expecting a significant improvement in profitability, in line with Q1. However, we think this is unrealistic, given Coupang’s marginal cost trends.
• Maverick’s investment decisions on Coupang lack objectivity and its supersized exposure create too big of a risk to Coupang’s share price.

• The current excess rainfall across India is so far not leading to any material damage in rural India. 
• Britannia Industries (BRIT IN) continues to operate in a favourable environment and is possibly even immune to down trading. 
• Dabur India Ltd (DABUR IN) channels remain optimistic about matching YoY value growth, however, in terms of volume there still is quite a bit of ambiguity. 

• This is our first report on game development software market leader, Unity Software.
• The company’s stock has taken a beating loke most other software players with a negative bottom-line.
• Its previous quarterly result was also below par despite the company generating $320 million, an increase of 36% from the previous year.

• Fosun Tourism (1992 HK) expects a sharp 87.5-92.5% reduction in its losses in 1H22, driven primarily by significant revival in its Club Med business, though China is weak.
• Outlook for 2H22 looks very encouraging as booking figures indicate good YoY volume growth and double-digit rate improvement in EMEA and Americas. 
• China also witnessed solid rebound in Jul and Aug after removal of lockdowns in 2Q22. New Club Med Joyview resorts including Changbaishan and Qiandaohu are added contributors. 

• Maintain BUY recommendation for BEM with a target price of Bt9.50.We expect the company to report 2Q22 net profit at Bt577m,the highest level in the past 11 quarter, mainly supported
• Strong recovery in earnings in2Q22 and 2H22 2Q22 Revenue shall be reported at Bt3.3bn (+36%YoY +6%QoQ) supported by solid rebound in daily average MRT ridership to 231k trips (+94%YoY +23%QoQ) 
• We anticipate average daily MRT ridership to recover substantially in 2H22 to around 310k trips by end of this year,the level last time we have seen in Nov’21. However, pre-COVID

• Medical tourism in India was negatively impacted by the pandemic. As the government is lifting travel restrictions, reopening border, and resuming international flight services, medical tourists have started returning back.
• Large corporate hospitals, having pan-India presence, like Apollo Hospitals Enterprise (APHS IN) are set to benefit from this trend. Medical tourism contributed 10% of revenue of Apollo in pre-pandemic era.
• Apollo’s market dominance and expansion plan in hospital and foray into online services have sharpened its competitive edge over competitors. Its healthcare business is expected to grow mid-teens this year.

• This is our first report on Corteva, a major agricultural player within the seeds and crop protection domain.
• The company registered its Enlist Duo and Enlist One herbicides through 2029 with the U.S.
• EPA.

• This is our first report on rare disease specialist, BioMarin Pharma.
• The company had a decent start to 2022 recording $519 million in total revenues in the previous quarter.
• The $20 million in Voxzogo contributions during the first quarter increased the company’s full-year 2022 guidance to between $100 million and $125 million and will play a significant role in its future growth.

• We have a Negative view of Soho China, despite the stock trading at 0.2x P/B. 
• The three biggest negative factors for the company include potential write down of assets, CFO being investigated for insider trading, and China’s emphasis on zero COVID policy.
• Two more significant concerning factors include 0.4 million people in China not able to withdraw their deposits and other large Chinese property developers defaulting on debt.

• New Horizon Health released positive profit alert last Friday. We speak with management post the profit alert.
• The company is expected to achieve 410.9% total revenue growth compared to a year ago in 1H2022, based on the middle point of guidance.
• The company has also achieved margin expansion thanks to a favorable change of mix to the high margin channel. 

• We maintain our BUY call with a TP of Bt445 based on 13.7xPE’22E,which is close to its 10-years trailing mean. We recommend investors to accumulate in light of 4% yield 
• Solid QoQ improvement expected in 2Q22 core profit We forecast 2Q22 core profit at Bt9.2bn,decline 46%YoY but edge-up 19%QoQ.The YoY erosion is due to weaker assumed gross margin of 16.2%
• We foresee chemical unit’s profit to fall 63%YoY but to march up 8%QoQ with wider spreads. In our view, the QoQ uptrend is underpin by solid PVC spread (+41%QoQ), despite 

• China Traditional Chinese Medicine released unsatisfactory 2022H1 profit warning, which was mainly due to the poor performance on both revenue and cost side of its core business concentrated TCM granules.
• We analyzed the policy impact and business outlook. The Company’s performance would be under pressure in 2022. The VBP impact on concentrated TCM granules hasn’t shown up in financial reports.
• Overall, we are skeptical of the Company’s profitability in the long term, and its profit margin will struggle to support a significant expansion in valuation.

• Nidec share price has declined by 32% YTD on the temporary impact of inflation and lockdowns 
• We expect a Q1 beat (tomorrow) as lower raw material input costs and the weak yen boost operating profits 
• We are bullish on the stock at 31x forward earnings versus the 5-year average of 55x, especially as China accelerates policies to drive EV adoption  

• We think Tesla’s FSD narrative is ready to crack: head of autopilot departed, 200 employees fired, and no progress on FSD.
• Tesla has to guide down full year production and gross margin targets (for reasonable reasons…will this be ignored this time?)
• Ever increasing competition from the low end may eventually confine LT sellside DCF based estimates. 

• We see Tesla’s Q2 GAAP EPS at $1.01, which is 34% below consensus estimates of $1.53.
• Tesla’s Q2 should be horrible given the lockdown of its Shanghai factory and huge startup costs at its 2 new factories, but beware of FSD revenue recognition. 
• Elon Musk needs Tesla’s share price to be high, in light of how many shares he may need to sell if forced to buy Twitter. Q2 numbers could be “massaged”. 

• We maintain our HOLD rating and TP of Bt47.60 based on DTAC’s tender offer price. Conference call came with negative tone, as management lowered its guidance on core service revenue 
• 2Q22 core profit was below expectation 2Q22 net profit was at Bt1bn (-34% YoY, +38% QoQ), growing QoQ due to a one-time Bt1bn deductible granted by the NBTC
• Excluding extraordinary items, 2Q22 core profit should be at Bt573m, 33% below our forecast, declining both QoQ and YoY due to losses in subsidizing handset sales to attract subscribers.

• Netflix net add bogey appears to be for 2Q losses in the -2-3M range (guide was -2M), if it hits this number is irrelevant, the 3Q/2H22 guide is more important.
• BBG was bullish on NFLX’s quarter recently, but we think misses the forest from the trees regarding ever ramping competition. 
• Ad-Based Netflix subs *might* hit by end of 2022, but won’t move the needle for 18 months.

• The recent strength in the Dollar is likely to result in second half revenue ending up lower than anticipated
• ATEN generated 60% of its revenue in 2021 from outside the USA. The strength in the US Dollar is likely to result in revenue growing at a slower pace 
• Our new estimates reflect the impact of a stronger Dollar on revenue and expenses. We are currently not expecting demand softness to push results lower

• CSPC Pharmaceutical Group (1093 HK) reported Q1 results, with revenue growth of 17% y/y to RMB8 billion, driven by a 15% y/y growth in finished drugs revenue.
• Oncology, with 34% contribution to finished drug revenue remained the main growth engine. Oncology revenue grew 15% y/y. The company has launched one new innovative oncology drug in Q1.
• CSPC’s net profit declined 5% y/y to RMB1.40 billion, dragged by fair-value losses of RMB133 million on its financial assets. Without considering one-off charge, net profit would have increased 10%.

• With discounting delayed, Fast Retailing (9983 JP)’s 3QFY22 was a surprise to the upside as its OP grew 36.5% YoY to ¥81.8bn (consensus:¥65.8bn) to exceed the pre-COVID level by 9.7%.
• Nevertheless, the upside seems limited in the short-term, with shares already trading at a stretched valuation of 22.2x consensus FY+2 OP, compared to the historical median of 15.5x.
• At around ¥290.0bn FY+1 OP, a fair price should be somewhere around ¥58,000-60,000, which implies a downside of around 25%.

• Tencent’s games gave only three hours a week to juveniles in school summer vacation.
• Tencent and NetEase did not get new game licenses for the third time this year.
• Kingsoft censors files on users’ computers, which will benefit Microsoft Office.

• Galaxy presents a bull case as Macau still struggles with Beijing zero tolerance policy.
• Its huge cash position will comfortably outlast the monthly burn rate for at least three to five years ahead by which time, covid might be long gone.
• Galaxy stock is caught in the overall bearish outlook on the sector. Time to accumulate with a relatively low risk on.

• This is our first report on the material science behemoth, Corning.
• Both the gross margin and operating margin have been increasing since the start of 2022.
• The company also collaborated with 5E Advanced Materials to supply boron specialty materials.

• Adi Sarana Armada (ASSA IJ) continues to build on its three pillars of growth across transport, used car sales, and logistics including its leading last-mile delivery service under Anteraja.
• The company’s market-leading auto leasing business provides stable revenue and a source of used cars for the auction and online used car business under Caroline.
• Last-Mile delivery player Anteraja is already the largest revenue contributor and increasing profit driver, with significant upside through automation and scale. Valuations attractive after recent correction at 8.3x FY2022E EV/EBITDA.

• We recommend BUY for M supported by three main reason:1) a strong earnings recovery outlook in 2022-24,2) net cash position with upside from new M&A deal and LCS franchise fees
• Earnings is expected to turn positive and strongly QoQ improvement in 2Q22 We expect 2Q22 net profit to be at Bt444m (+64%QoQ), recovery from a loss of Bt99m in 2Q21
• Rising food costs are manageable   Most of costs are raw material costs and the major portion of food cost are pork and poultry.

For our next Webinar, we are delighted to welcome back Analyst Henry Soediarko, who will go through his latest stock picks in the ASEAN region, and offer his outlook for 2H 2022.

The webinar will be hosted on Wednesday, 20 July 2022, 17:00 SGT/HKT.

Henry Soediarko is a Long & Short Investment Ideas generator for Asian Equities with 10 years of experience in a Hedge fund focused on bottom-up ideas, searching out mispriced ideas and misunderstood investment theses. He provides on-the-ground insights in various Asian markets with a sway towards ASEAN. 

• The company will report Q1 earnings today. We think they will beat expectations
• The stock has been a poor performer so far this year, despite profitable growth
• BayCurrent is THE key beneficiary of Digital Transformation in Japan

• Hyundai Motor (005380 KS) launched its long-awaited Ioniq 6 on 14 July. This is the first EV sedan by Hyundai Motor.
• Ioniq 6 could be a big winner for Hyundai Motor. Among all the features of Ioniq 6, the driving range is the biggest improvement versus Ioniq 5. 
• The combination of attractive price, sleek design, and higher driving range is likely to result in a strong demand for Ioniq 6.

• Tatas are scripting India’s early journey in electric cars – Tata Motors Ltd (TTMT IN) accounted for 87% of the 8077 electric cars sold in Q1FY23 (1605 units in Q1FY22).
• The rapid roll-out of charging infrastructure across the country by Tata Power (TPWR IN) and the success of Tata’s electric car (compact SUV). Tata Nexon EV, are key factors. 
• Demand and infrastructure for electric cars seem to be in place but market growth is restricted by a lack of choice/adequate supply in the popular price range (<USD 20K).

• Maintain BUY for TISCO with a target price of Bt106.00.We like its high dividend payment and solid fundamentals.TISCO’s net profit was 6% better than expected at Bt1.85bn in 2Q22,up 11%YoY
• Despite lingering competition in the auto hire purchase market, loan growth would likely accelerate in 2H22 given an improvement in the chip shortage in the automotive industry. 
• Credit costs would likely stay low for the next few years to potentially offset negative impacts from muted fee income from the volatility in the capital market.

• Alkem Laboratories Ltd (ALKEM IN) earns 71% of total revenue from domestic business, which is the most important growth lever of the company. Domestic business revenue grew 29% in FY22.
• The company dominates the anti-infective segment, through its mega brands, with a market share of 12.9%. In the chronic segment, Alkem is growing fast to emerge as a significant player.
• Regular new product launches, including biosimilars, should continue to contribute to Alkem’s growth and fill portfolio gaps. Entry into new therapies would also be an important growth engine, going forward.