Equity Bottom-Up

• Interim results were surprisingly strong considering the headwinds from China and rising costs
• 2H guidance looks optimistic. China remains a key risk and we still see risks to the gross margin
• The “R” word. Rising inflation, Rising Interest rates = Recession. Probably not good for consumers and certainly not good for high stock multiples

• WinSemi’s revenue was NTD$5.56bn in 1Q22, which was -7.3% YoY and -22.96% QoQ.
• We think WinSemi’s revenue could be seeing upside until 3Q22, and it could be still struggling in 2Q22. 
• The optical devices decreased the weakest. The communication infrastructure aligned the supply chain. The handset and WiFi decreased seasonality and the WiFi router was impacted because of chip shortage.

• TSMC’s 1Q results were extremely strong with revenue 4.15% above consensus and OP 9.04% above consensus. 
• With the strong pricing power and favourable forex factored in consensus OP estimates for the year have moved up to TWD954bn in line with our start of year estimate. 
• However, that now leaves limited further upside in our view and we expect earnings to decline next year rather than rise.

• Bukalapak’s (BUKA IJ) results saw very strong growth from its Mitra Business, with a much slower marketplace but we see the latter picking up as its specialty strategy is developed. 
• The launch of both Allo Bank Indonesia and Allo Fresh over the next two quarters should provide some excitement, whilst its gaming marketplace Itemku is already profitable. 
• Take rates should improve in 2022 as Bukalapak (BUKA IJ) offers a broadening array of services across its Mitra and marketplace verticals. Valuations look attractive versus peers. 

• Ace Hardware Indonesia (ACES IJ) recently released its FY2021 results which reflected the intermittent lockdowns on the top line but cost controls meant the bottom line finish almost flat.
• The company benefitted from its regional diversity during the pandemic as not all cities were affected in the same way but its exposure to malls is quite high.
• Ace Hardware will resume its expansion plans in 2022 with plans for 15 new stores plus it will be a big beneficiary of easing mobility, given low online sales.

• Square Enix held their 20th anniversary event for Kingdom Heart over the weekend announcing a number of mobile titles as well the next mainline title Kingdom Hearts 4. 
• While a release date was not offered we would expect a launch during the next fiscal year.
• Just as importantly, the announcement lends added weight to already leaked information on the company’s upcoming pipeline.

• SanBio Co Ltd (4592 JP) is expected to receive approval for its first regenerative cell medicine SB623 for treating chronic motor deficit from traumatic brain injury in Japan this year.
• SB623, with current and future indication approvals, is targeting a large patient population of more than 50 million in major pharmaceutical markets globally. The indications have large unmet need.
• SanBio has a pipeline of five other pre-clinical drug candidates, entailing visibility beyond SB623.

• Money Forward (3994 JP) posted solid Q1 financial results as revenue growth rebounded and EBITDA losses were within management’s forecast
• But revenue guidance for Q2 was weaker than expected and represents the lowest YoY growth to date which has raised questions on the effectiveness of marketing spend
• Full year guidance remains intact and the company expects that underlying growth in recurring revenue to remain robust which is positive for the long term thesis

• Even though 2QFY22 results were broadly in line with consensus, Fast Retailing (9983 JP)’s share price rose 8.8% as markets expected the worst amidst the Russian controversy and Shanghai lockdowns.
• However, this price movement seems unwarranted given the impact of Shanghai lockdowns could only be seen in the 3QFY22 financial statements.
• During earnings, FR introduced North America & Europe as new growth drivers to replace the declining Chinese market. But we are not convinced that they are up to the task.

• We have previously commented on Valorant’s relatively unique position in esports due to its high degree of regional parity and that is being further underscored during its ongoing Masters tournament. 
• In particular, Japan, a region not known for any particular prowess in FPS titles secured its first top eight position generating significant buzz on twitter in doing so. 
• The implications look positive here for both Valorant overall and for Japan’s esports ambitions where it is probably now time to truly familiarise yourself with the potential plays.

• Investing in factory automation, power semiconductors and electric vehicle motors on a long-term view while interest rates rise and the economy weakens.
• Difficult operating environment now: Factory automation turning down; automotive hit by high materials costs and the semiconductor shortage.
• Share price down 25% from its 52-week high. Selling at 14x FY Mar-22 EPS guidance after a downward revision, which compares with a 9x – 20x 5-year P/E range.

• Baycurrent Consulting (6532 JP) reported 4QFY02/2022 results today. Revenue grew 30.9% YoY to JPY16.2bn while OP increased 61.3% YoY to JPY6.8bn.
• Full-Year FY02/2022 revenues grew 34.4% YoY to JPY57.6bn and OP increased 58.7% YoY to JPY21.5bn. Both revenue and OP beat guidance by 1.9% and 2.4% respectively.
• BayCurrent’s shares are down 30% since its peak in September 2021, and we think current share price offers a good entry point.

• Mitra Adiperkasa’s results this week confirm a strong recovery is in place, with improving margins and growth across all verticals and a return to profitability for FY2021. 
• Growth was evident in both online and offline channels as the company’s unified retail strategy continues to yield strong results plus inventory levels improved dramatically QoQ in 4Q2021.
• Mitra Adiperkasa (MAPI IJ) remains a key proxy for the retail recovery in Indonesia and has remoulded itself to changing consumer behaviour. Valuations remain attractive versus historical levels. 

• The revenue/ GM/ OPM/ EPS/ ROE is USD$17.57b/ 55.6%/ 45.6%/ NT$7.82/ 36.2% in 1Q22. The revenue/ GMO/ OPM is US$17.6-18.2bn/ 56-58%/ OPM: 45-47% in 2Q22 guidance.
• Moving into 2Q22, TSMC expects their business to be supported by HPC, Automotive related demands, partially offset by smartphone seasonality.
• The HPC platform is the strongest growing platform and the largest contribution to TSMC’s growth in 2022.

• Another excellent set of results which supports our bullish view on the stock 
• BayCurrent is a key enabler of DX in Japan and a beneficiary of the tight labour market 
• The stock is down around 30% from its all-time high. Growth investors should be picking up stock  

• As China’s leading assisted reproductive service provider, Jinxin Fertility Co Ltd (1951 HK) can be negatively affected by the country’s consistently falling birth rate.
• The company performed 27,354 IVF cycles in 2021, 20% higher than that of 2020. However, it is still lower than 27,854 IVF cycles performed in 2019, pre-COVID era.
• Concern over the fact that the Chinese government may impose restrictions on the for-profit healthcare service providers, like it did for K12 education sector, is souring near-term sentiment.

• Shanghai is in lockdown and citizens are finding it hard to get enough food.
• Community group purchase has been taking consumers from e-commerce apps.
• The central government reiterates the zero-COVID policy, but the Omicron variant is spreading with very few death cases.

• Softbank has raised $2.4bn (¥300bn) from the sale of TMUS shares to DT with proceeds likely earmarked for VF2 and possibly supporting ongoing share buybacks
• The sale price is below market but surfacing cash is the more positive takeaway and should ease concerns on leverage that have lingered as tech valuations fall
• The impact on the discount to NAV is likely to be weaker than the reaction to the TMUS/DT monetization in August/September

• Q1 results are better than expected, achieving record-high quarterly growth in SaaS revenue
• Growth is driven by Corporate Customer ARR, which rose by 47% YoY
• For growth investors, Money Forward is out top pick in Japan

For our next Corporate Webinar we are glad to welcome Arwana Citramulia (ARNA IJ) CFO & Corporate Secretary, Rudy Sujanto.

In the upcoming webinar, Rudy will share a short company presentation, after which he will engage in a fireside chat with Smartkarma Analyst, Angus Mackintosh. A live Q&A session will follow.

The Corporate Webinar will be hosted on Tuesday, 26 April 2022, 17:00 SGT.

• Honda’s Briefing on its Automobile Electrification Business yesterday laid out a reasonably aggressive EV rollout plan emphasising some existing partnerships. 
• It also highlighted that they would procure batteries domestically from Envision AESC. 
• That is another move that takes Honda a step closer to Nissan’s supply chain and has us pondering a potential merger/partnership once again.

• Shift Inc (3697 JP) reported 2QFY08/2022 results last week. Revenue grew 43.5% YoY to JPY15.6bn (vs consensus JPY15.2bn) while OP 99.2% YoY to JPY1.9bn (vs consensus JPY1.1bn).
• Both enterprise and entertainment markets saw strong growth in revenue while GPM of enterprise biz further expanded during the quarter.
• Shift’s share price has moved up by about 16% since its results announcement and we think there is further upside.

• Pacific Basin Shipping (2343 HK) stays positive towards the outlook of the bulk shipping market despite the Russia-Ukraine war, higher inflation and lockdowns in China.
• 1Q22 coverage rates are 117% and 122% higher YoY for its Handysize and Supramax fleet, resepctively, and coverage for 2Q22 is also promising, securing good 1H22 earnings.
• We expect it to turn into net cash by end-FY22, and even with such strong financial position, it will still generate over 30% ROE for the next two years.

• Venus MedTech (2500 HK) is facing competition in China TAVR market and its market share has deteriorated to 70% in 2021 from 79.3% in 2018.
• Due to declining ASP and low pricing power, the company’s gross profit margin has declined to 78% in 2021 from 86% in 2018.
• During 2021, the company’s loss expanded 103% y/y to RMB372 million, mainly due to elevated selling and distribution expenses and R&D costs.

• Money Forward (3994 JP) reported 1QFY11/2022 results yesterday. 1Q revenue grew 37.0% YoY to JPY4.8bn and beat consensus estimates by 4.4%.
• Operating losses for the quarter was JPY1.6bn and accounted for around 34.7% of revenues during the period.
• MF’s SAAS model has started taking-off, we would highlight that string user growth comes at the cost of heavy advertising and subsidies.

• IVF penetration rate in China is not high and the rate of improvement is very slow. With public hospitals accounting for over 90% market share, Jinxin’s growth space is limited.
• Jinxin has extended its business scope to support the entire fertility and pregnancy lifecycle. But it could drag down the overall net profit margin,resulting in lower-than-expected performance in the end.
• The breakthrough point is internationalization. If COVID-19 is under control and Jinxin continues to expand overseas markets successfully, it could change its valuation logic and open up upward potential.

• The relaxing of restrictions by Hong Kong makes Taste Gourmet Group Ltd (8371 HK) a great reopening play, trading at 8.8x FY22e and 5.6x FY23e. 
• Despite a challenging environment, the company has executed well, maintaining net margins north of 7-8%, which are far superior to other listed competitors.
• With >60% payout ratios, it trades at a dividend yield of 6.7%/11.4% FY22e/FY23e. Since 29% of the market capitalization is cash, we are confident in the dividend payments. 

• Beauty services in Hong Kong will pick up from the 21st of April 2022 post the reopening, due to pent-up demand and the disbursement of Consumption Vouchers by the government. 
• Despite losing three months of H1 2022 and a month of H2 2022, we believe that Water Oasis (1161 HK)  is still trading at 5.4x PE FY22e.
• With an 80% payout ratio, the dividend yield is alluring at 16.4%. Net cash represents 38% of market capitalization. A year of uninterrupted operations implies a 3.8x PE. 

• China’s gaming regulator, National Press and Publication Administration granted publication licenses to a list of 45 games, ending the nine-month long freeze on new game approvals in the country.
• While it comes as a relief, The Cyberspace Administration of China has kicked off a formal campaign to investigate and rectify algorithm security issues of tech companies.
• Though any of Tencent (700 HK) games didn’t receive approvals, the company’s shares have moved positively during today’s trade and up 2.1% from yesterday’s close.

• As of February, TEL expected the global wafer fab equipment market to grow by nearly 20% in calendar 2022. This seems increasingly unlikely.
• Japanese data shows equipment demand leveling off while the economic situation deteriorates and semiconductor capacity expansion projects are delayed.
• The shares have dropped 22% since the beginning of January and are now selling at 20x management’s EPS guidance for FY Mar-22. Not cheap in historical terms.

• Sony and LEGO’s investment in Epic comes shortly after the official release of Unreal Engine 5 which promises to significantly improve efficiency for game designers and visual effects artists. 
• We had predicted that Sony and Epic would continue to drift closer and would eventually dominate the metaverse and this does nothing to change that view.
• We discuss below the impact on some popular metaverse plays which investors seem to fail to realise are only metaverse plays because they can be shorted.

• Launched 30 new SKUs during COVID-19 in multiple areas of health that can transform the company from herbal remedies into a bigger conglomerate of health providers. 
• PE firm that backed SIDO in the earlier years reduced its holdings but it should not be seen as a vote of negative confidence in the company. 
• Sido Muncul (SIDO IJ) can be compared to Blackmores Ltd (BKL AU) which has a wide range of health products but trades at a 100% premium to SIDO. 

• The fourth quarter was again a disappointing one for Lawson Inc (2651 JP) with operating income falling short of consensus by 14.6%.
• The next year’s OP guidance of ¥53.0bn (12.5% YoY) is around ¥10.0bn below the pre-COVID level, but Lawson’s lower profitability could be due to heavy upfront investments.
• Further out, there is substantial upside to Lawson’s profitability and consensus could be unjustly penalizing Lawson’s growth investments by valuing the company at a discounted FY+2 OP multiple.

• Goldwin Inc (8111 JP) has risen to hold a leading share in outdoor wear retailing on the back of the success of The North Face.
• It has developed considerable retail and marketing skills in the process and is now applying these to its own brand with hopes of going global.
• Demand for new forms of sports and outdoor brand remain strong in Japan and globally and Goldwin’s mix of technical fabrics and quality could give it an edge.

• A first look at the merger suggests that the value proposition is tilted towards HDFC Ltd (“HDFC”) vs HDFC Bank (“HDFCB”), given the declining regulatory arbitrage between large-NBFCs and banks
• However, given HDFCB’s intense focus on growing its distribution prowess, HDFCB stands to benefit immensely from the merger and is thus a win-win deal.
• With the expanded distribution network and cross-sell synergies, HDFCB, despite the larger base, will benefit from an accelerated growth post-merger.

• The 1Q22 revenue is NTD$63.4bn, and we estimate GM is ~40%, which is consistent with 1Q22 guidance.
• We estimate the order is pretty much confirmed in UMC in 3Q22, which should be ~NTD$65bn.
• UMC will increase about 10-15k/month of 28nm capacity in 2H22.

• China announced game approval last night, after 8 months of silence.
• We discussed in our previous note that China would resume game approval.
• There is no game approved for Tencent and Netease this round but we believe their approval will come in due time.

• HHC updated its NAV to $170 a share from $150 a share last year after the return of retail and the Las Vegas Ballpark to normal operation.
• HHC has started to redeploy its free cash flow with $250 million portion dedicated to share repurchases. 
• The improvements in the business we have cited over the past year contributed to HHC raising its NAV estimate

• Following CCEP spin-off and share price decline, China Conch Venture (586 HK) is now at more attractive valuations relative to the stub, on sum-of-the-parts and on PER multiple. 
• Growth profile should improve in next two years and it has an optimistic expectation of of 76% increase in waste treatment and 79% growth in on-grid electricity for FY22.
• New business initiatives including anode and cathode materials of lithium iron phosphate and lithium batteries and used lithium batteries treatment may provide potential medium term upside.

• The three large orders for COVID-19 small molecule drugs are mostly one-off revenues, and after 2022, Asymchem Laboratories (6821 HK)‘s performance could decline from a high base.
• In essence, Asymchem mainly relies on cost advantage of large-scale capacity to obtain orders.Without core leading technology in frontier of medicine, Asymchem is difficult to enjoy sustainable industry development dividend.
• Overall, Asymchem’s moat is not strong enough, and the certainty of the Company’s long-term performance growth is also not high. It could be a short-term trade rather than long-term hold.

• In the first quarter, automakers have been back to stops and starts with segments of their production runs due to parts availability
• GTX’s product mix makes the Company vulnerable to the ongoing supply chain issues arising from the war in Ukraine
• In March 2022 there was a 7.2 magnitude earthquake in Japan that resulted in power loss and infrastructure damages

• Simcere Pharmaceutical Group (2096 HK) reported an 11% y/y revenue growth to RMB5 billion, mainly driven by 54% y/y revenue growth from innovative pharmaceuticals.
• However, gross margin contracted 160 basis point to 78.4%, reflecting pricing headwind. Heavy R&D and selling and distribution expenses are taking toll on operating profit.
• During 2021, Simcere has added six registered clinical trials for phase 3, two trails for phase 2, three trails for phase 1, and obtained 12 clinical trial approvals for drugs.

• We are bearish on Fanuc. Yaskawa’s robotics orders were strong but Fanuc is more correlated with machine tool orders
• Machine Tool orders have already turned south and Fanuc is losing momentum in its order growth
• If we are right on the cycle, we expect Fanuc to trade down to 2.3x book value, 20% downside risk from here

• Due to its early involvement in license-in mode, Zai Lab could in-license many high-quality candidates at a low price in the early stage, thus leading to today’s achievements.
• However, the increasingly low cost performance of in-licensed products has made the capital “reconsider”, because it is increasingly difficult to maintain high growth as before based on license-in mode.
• Zai Lab could be a good short-term trade,especially when it reaches licensing deals or launch new products,but doubts about long-term prospects could discourages investors from holding it for long term.

• Shakey’s Pizza Asia Ventures (PIZZA PM) is a play on F&B normalizing in the Philippines.  On our numbers, it trades at a 12.9x PE for FY22 and 10x for FY23.
• Quick Service Restaurant (QSR) peers like Domino’s Pizza (DPZ US) and Jubilant Foodworks (JUBI IN) trade at multiples of 39x and 59x fwd PE, making Shakey’s an extremely cheap stock. 
• Versus the current multiple of 7.9 peso/share, we believe the stock can trade up to 30x PE FY23 implying a 24 peso/share price (200% upside).

• Hansoh Pharmaceutical (3692 HK) is increasingly focusing on innovative drug, with revenue from such drugs contributing 42% of total revenue in 2021. R&D accounted for 18% of revenue in 2021.
• Thus far, in this year, Hansoh received approval for one more new rare-disease drug. Its rich pipeline has 25+ clinical programs of innovative drugs.
• With its proven execution on innovative portfolio, sound financial positions, and recent business collaboration effort to enrich the pipeline, Hansoh seems to be an undervalued business.

• Crowdstrikes’ growing platform offers three end markets as large as its core endpoint protection: log management, identity, and IT hygiene.
• 43 public enterprise software companies with more >$1 billion in revenues, only 5 are growing >60%, and only one has 30%+ free cash flow margins: Crowdstrike.  
• New $5B ARR 2026 target will prove as ridiculously conservative as last year’s $3B ARR 2025 target.

• We expect TSMC will grow ~4.7% QoQ in 2Q22, and the revenue/GM/OPG is around US$17.7bn/55.1%/43.8%.
• We highlighted TSMC was considering to increase the wafer price nearly 2 months ago, but TSMC has still not made the final decision yet.  
• TSMC 4/5nm capacity will be ready for for 150k/month within 4Q22. We think the new iPhone 14 would request more than half of the capacity.

• The Philippines’ largest full-service Pizza chain, Shakey’s Pizza Asia Ventures (PIZZA PM) is currently trading at PHP 7.60, 7.3% below its April 2022 follow-on offer price of PHP 8.20.
• With the ending of COVID restrictions, we expect the company’s financial performance to improve drastically over the next few quarters.
• This should alter the trajectory of Shakey’s to aggressively take back the share price towards the pre-COVID level.  

• Yaskawa reported weak results as we expected (¥12.9bn OP vs. our ~¥14bn estimate and consensus at ¥16.7bn). 
• Despite this the company actually guided for a very punchy ¥72bn in OP next FY even above consensus’ ¥65.5bn and our expectation for OP to be flattish or even decline. 
• Nevertheless, there was nothing on the earnings call to suggest that guidance was anything more than overoptimism on the top line.

• Fortescue Metals (FMG AU) has an improving yield outlook, as iron ore prices are rising due to a shortage of iron ore, with supplies from Russia and Ukraine being affected.
• We expect the company to pay a 2.3 AUD/share dividend based on a 70% payout ratio, implying an 11% dividend yield. The company has low net gearing at 10%.
• Upsides could emerge from China stimulating its economy to counter the lockdowns and measures taken to improve their property market which will in turn boost steel production. 

• Indonesia’s leading steel pipe company PT SPINDO published FY21 results earlier this week, crystallizing a year of record profitability with EBITDA doubling and NPAT increasing 2.8x.
• The heightened profitability is attributable to a combination of high steel prices making room for wider margins (in both percentage and absolute terms) combined with an improving product mix and unwavering demand landscape.
• We note that EPS of just IDR 5.6 in 4Q21 was well below the 9M21 run rate of IDR 62.0 and was due to several unexpected one-time expenses and provisioning for a possible tax expense

• By many standard measures, Melco Resorts & Entertainment shares appear to be either fully or overvalued even at its pandemic beaten down price of $US6.94.
• A discounted cash flow analysis revealed a negative -US($1.18) intrinsic value. But the calculation is based on assumed path of pandemic too difficult to predict accurately.
• The company had a pre-pandemic  Macau market share of over 16%. It is among the leaders in Manila’s entertainment zone, and expects its Cyprus property to open by Dec. 2022

• Berli Jucker (BJC TB) 4Q2021 results marked a turnaround in both its packaging business in glass and cans plus better performance from Big C as mobility improved during the quarter.
• The outlook for packaging looks positive and the Big C will open more outlets in 2022 plus renovating around 20 hypermarkets plus opening new formats this year.
• Berli Jucker (BJC TB) remains an interesting recovery play for Thailand and Vietnam, with the potential for more retail exposure there in the future. Valuations stack up versus peers.

• The bailout of Chinese billionaire’s nickel short position has received overwhelm backlash over LME’s credibility and China’s interference on global market. Nickel future trading continued to be choppy. 
• HKEX (388 HK) first 3-month average daily turnover is down 35% year-over-year due to pandemic outbreak in HK and lower IPO activities, but March trading activities have rebounded from February. 
• HKEx revealed New Digital Assets Marketplace “Diamond” in its corporate day in March, which will feature atomic settlement, multi-asset trading, use of Smart Contracts and cloud-based infrastructure.

• BNC Korea (256840 KS), with its partnered COVID-19 pill will be a late entrant in the space, as two more COVID-19 pills are already approved in South Korea.
• The company reported operating loss of KRW11 billion in 2021 and 99% of its export comes from Russia and CIS countries.
• Since my bearish note published on the company in October 2021, shares have declined 50%. I am still not upbeat on the growth prospect of the company.

• Global Cord Blood (CO US) is facing regulatory and business environment uncertainty. China has not released any update on the new licenses of the country’s new cord blood bank.
• The company is seeing slower than expected business recovery and new subscriber addition is decelerating since Q1 FY22, mainly due to COVID-related restrictions.  
• China’s birth rate dropped to a record low in 2021, thereby indicating sluggishness in the total addressable market of Global Cord.

• Caixin confirmed today that Arm had transferred its shares in its China JV to a special purpose vehicle which it owns together with Softbank, as the FT had initially flagged. 
• This could technically eliminate the obstacles to an audit for an IPO but we believe regulators would be remiss in allowing such a flimsy change to pass muster. 
• In addition, the move reeks of desperation for cash and Softbank’s typical disregard for prudence and the importance of due diligence to investors.

• JD dismissed employees in many businesses, such as Retail, International, and Jingxi.
• However, we believe the layoff only covers minor businesses and functions.
• We believe the stock still has a upside of 48%.

• Even though the results weren’t a blowout as we expected, today’s price performance suggests that Seven & I Holdings (3382 JP) has not disappointed the market.
• We think Seven & I could be playing safe by holding back Speedway synergies.
• After a short breather, share price momentum has shifted positive and we expect this to continue alongside upgrades to Speedway synergy estimates.

• Softbank Corp (9434 JP) shares have underperformed telco peers that benefit from a risk-off environment despite a sector-high dividend payout as 38% of value comes from Internet and fintech
• That dividend payout looks safe across our forecast period though as the telco business provides sufficient free cash and parent Softbank Group (9984 JP) can always use more cash
• At Q3, management reiterated confidence in financial guidance through FY22 and a positive Z Holdings (4689 JP) Q4 report could help shares make up lost ground 

• The new four-year medium-term strategy that lays out a realistic route to greater profitability and growth.
• The stock has been trading below book value for years
• Buying back 10% of outstanding shares will give investors confidence 

• This model uncovers companies facing recent sharp cuts in estimates. These shorts can have very disparate characteristics.
• The key judgement involves whether the negative revisions are temporary or if they are indications of ongoing weakness in the business. 
• Breaking Estimates stocks often continue to decline after the cuts.  This week we flag: UiPath, EchoStar, Stitch Fix, First Solar

• HOOD’s performance indicators are deteriorating.  Growth in funded accounts is not growing.  Monthly average users are declining, and ARPU is falling.  Margins remain negative and are declining.
• The company’s main sources of revenue are from transactions in speculative instruments.  Options and crypto trading represent 80% of transaction revenue… in accounts that average $4,300 in size.
• Small scale and lack of diversification leave it disadvantaged.   Further, it generates little fee income, such as asset management fees.  It is nearly entirely reliant on payment for order flow.

• We think the recent price weakness of Dongfang Electric (1072 HK) is overdone, and there is strong value proposition on the stock based on its current multiples.
• DEC’s orderbook has well covered in the next two years, while we see cost management measures will help mitigating the pressure on margin. 
• It is well positioned to capture the wind power boom (26% of FY21 revenue) and remains the prime beneficiary of China’s hydrogen economy and pumped storage demand in the longer-term.

• OneConnect Financial Technology (OCFT US) is a leading technology-as-a-service provider for financial services industry in China.
• The company is currently listed in the US and recently filed for a secondary listing in Hong Kong in an attempt to boost the liquidity of its shares.
• OCFT still relies on its parent Ping An to generate most of its revenues and despite seeing strong growth in top line, the company is still far from profits.

• Yaskawa reports today and we expect earnings and guidance to both be on the weak side. 
• The stock has been weak of late but we still lean towards the idea that there is a little downside risk remaining. 
• The key question is whether the market attaches any credibility to consensus projections of 15% YoY OP growth next FY.

• Takeda Pharmaceutical (4502 JP) has been aggressively expanding its rare disease portfolio following recent hiccups in its development pipeline through Tie-Ups with different gene therapy developers.
• Rare diseases biz is the second largest business segment for Takeda generating about 17.1% of total revenues for the company.
• Takeda’s share price started plunging after suspending a phase 2 study of TAK-994 in October 2021 and price started moving up since January and we think there is further upside.

• Indonesia’s leading UHT milk and carton tea producer Ultrajaya Milk Industry booked a strong set of FY2021 results, with a convincing recovery in 4Q2021, which should carry through into FY2022. 
• The company continues to increase raw milk sourcing locally, which will alleviate rising global prices, and it is expanding its distribution network and new products to drive demand. 
• Ultrajaya is a market leader in its main product categories, yet trades at half the valuation of recently listed Cisarua Mountain Dairy, which looks excessive with potential upside to valuation.

• Last week, MINISO Group Holdings (MNSO US) filed an application to conduct a follow-on public offering of ordinary shares on the main board of the Hong Kong Stock Exchange.
• The Hong Kong listing will be treated as a second primary listing, resulting in a substantial improvement in the stock’s liquidity.
• With the improvement in liquidity following the Hong Kong offer, there could be a significant upside to Miniso shares in the short term.

• The revenue YoY growth, net profit YoY growth and net profit margin reached a new low in 2021. The performance of Medlive cannot meet the market’s expectations of high growth.
• The medical knowledge solutions is the cornerstone business and vital to the attractiveness of platform for users. However, this business is not strong enough to make the outlook certain.
• In the fierce competition, more efforts are needed on how to convert physician resources into business value continuously. Due to unreliable logic, we are conservative about Medlive at current stage.

• We maintain our BUY rating with a new DCF-derived TP of Bt259 (-4% from previous TP) representing 23.8xPE’22. We adjusted down overly optimistic forecast on non-mobile enterprise segment. Nevertheless
• We expect 1Q22E net profit at Bt6.9bn (+4% YoY, flat QoQ). Limited QoQ growth is due to prolonged price wars and weaker foot traffic caused by the Omicron outbreak.
• We expect CCIID and 5G ARPU uplift will drive earnings growth at 9%CAGR between 2021-24E.