Equity Bottom-Up

• HK F&B is set to have a reprieve as dine-in services at catering businesses can now remain open from 6 pm-10 pm ( max seating up to 4 people).
• We provide a list of 34 names that will benefit from the removal of restrictions ( some with further catalysts down the road as they are exposed to China)
• Our favorite pick remains Taste Gourmet Group (8371 HK) which we have written about in our insight Taste Gourmet: Multibagger Reopening Play.

• HDFCB’s stock has seen significant volatility over the past one month. The Street seems to have four major concerns, which we think are either unfounded or too myopic.
• A recent concern has been around the compression in NIMs, where the Street is missing the point that this is well offset by lower operating/credit costs per the shifting product-mix.
• HDFC Bank has been gaining market share and with its distribution expansion, the growth is only going to accelerate further. Overall, the current valuations offer an attractive entry point. 

• Jinxin announced in recent days that it further increases stake in Shenzhen Hospital, Jiuzhou Hospital and Hewanjia Hospital.
• In this note, we analyze the impact on the company. We think the acquisition is sensible when the market sentiment is weak. 
• We also summarize recent industry development and the company’s FY2021 results. We are turning relatively more bearish.

• Adi Sarana Armada (ASSA IJ) booked a strong set of FY2021 results with sales growing by +68% and net profit by +64%, driven by a strong performance from logistics business.
• Anteraja now makes up 54% of sales and broke even in FY2021, delivering an average of 650,000 parcels per day in 2021, expected to rise to 1.5m by December 2022.
• Adi Sarana Armada (ASSA IJ) is a proxy for mobility through car leasing, online and offline used car sales through Autopedia, and last-mile deliveries through Anteraja.

• Revenue of HK$5.27 billion (US$674.8 million), +21.5% YoY and -15.1% QoQ, was at the high end of revenue guidance issued in 1Q22.
• Revenue guidance was US$670 million to US$740 million, which was +5.8% YoY and +4.5% QoQ at mid-point in Q2 2022.
• Usually, the 1st quarter is the weakest of the year. The booking magnitude might be showing how is the industry customers’ confidence now. 

• CCB is our preferred pick, given its attractive valuations, strong capital adequacy, healthy ROE and sound credit quality; CCB’s real estate exposure is limited and it sector delinquency is low
• We also pick PSBC for its good value, its attractive PEG ratio and healthy credit quality and coverage; its real estate exposure, and its related delinquency, are both very low
• We are negative on China Minsheng due to its low ROE, poor delinquency and NPL coverage, its high exposures to real estate relative to its peers and fast rising delinquency

• Intuitive Surgical (ISRG US) Q1 revenue and EPS beat consensus. High-teens procedure volume growth is the brightest spot and management raised full-year 2022 procedure growth guidance to 12–16%.
• After a strong placement in last couple of quarters, Intuitive is seeing some near-term softening of its system placement pipeline in the U.S.
• In near-term, macro headwinds including regional waves of COVID, staffing pressure at hospitals, component and raw material availability, and logistic delays will remain biggest overhang for the company.

• Hong Kong’s hospitality industry has endured three years of upheaval, first with the democracy protestors in 2019, which slowed inbound, followed by the onset of Covid in early 2020.
• Beginning today, 21 April, the Government commenced the relaxation of most social distancing measures, to be eased over three phases.
• This evolving dynamic is welcome, yet the progress and recovery for many operators may be gradual.

• The strong dollar has boosted Softbank’s predominantly dollar-linked asset value by 9% in yen terms (although reported net debt will also increase)
• Also relevant is a decrease in the dollar cost of its ¥1,000bn share repurchase which was $8.8bn when announced but costs less than $8bn at the current exchange rate.
• This has kept the share price up YTD and QTD despite weakness in the investment portfolio but tech weakness probably has more legs than dollar appreciation

• Nidec earnings were worse than we feared as 4Q OP was just ¥36.9bn below even our ¥40bn estimate and far below consensus at ¥48.5bn. 
• This was despite a 4.9% top line beat and there were some signs of kitchen sinking in our view. 
• Nevertheless, guidance for ¥210bn in OP next year, while below consensus, still feels aggressive in our view.

• Mediatek revenue was NTD$142.7bn in 1Q22, which was 32.1% YoY and 10.9% QoQ. It was higher than the prior high-end guidance of $NTD141.5bn.
• The 2nd quarter outlook could be slight growth of NTD$148.9bn/49.1% GM, which could be not much growth expected.
• The expectation of the 5G deployment could be a bit slower because of COVID-19 impact and slow down in China handset shipment. 

• Several news media outlets report that ByteDance has launched a new music streaming service in China called Qishui Yinyue.
• Tencent Music (TME US) earnings have come under pressure with ending of exclusive music streaming licensing deals and increased regulatory pressure on its social entertainment biz.
• We expect TME’s 1Q2022E earnings to decline further with increased competition and drop in social entertainment.

• The market position of Japanese cosmetics in China is weakening with Japanese exports declining around 5.0% YoY in January and February 2022.
• With Shanghai under a strict lockdown and the recovery of inbound demand taking more time than expected, it is possible that Shiseido Company (4911 JP) could downgrade its 2022 guidance.
• These forces could take Shiseido’s valuation multiples to the pre-2013 level, resulting in a downside of close to 30%.

• Abbott Laboratories (ABT US) reported better-than-expected Q1 revenue and earnings, due to higher diagnostic revenue led by strong COVID-19 testing revenue. 2022 adjusted EPS guidance remains unchanged.
• In Q1, global COVID-19 testing-related sales reached to a record high of $3.3 billion, representing 28% of total revenue. COVID-19 testing revenue guidance was raised to $4.5 billion for 2022.
• Medical devices business reported double-digit organic revenue growth in the U.S. as well as international market, showing continued recovery in the elective procedures.

• Nidec is the best stock in Japan to play the rising adoption of EVs
• The company is already dominating the largest E-Axle market in the world and will benefit from growing economies of scale
• We think the company can hit its mid-term targets and see over 30% upside for the stock

• Fosun Tourism (1992 HK) (FTG) is not a China play and, instead, it has excellent exposure to the global travel industry recovery particularly through its ownership in Club Med.
• 1Q22 showcased a very solid 306.6% rebound in business volume of resorts and tourism destination operations and tourism and leisure services and solutions business, and the trend will continue.
• We think Club Med’s exposure to overseas recovery, Atlantis Sanya’s ride on domestic demand and new resorts’ good position to capture China’s travel recovery are key drivers for FTG.

• Netflix management came off as unprepared for its current circumstances. Ramping competition and TAM saturation have been known for 2 years.
• Competitive responses sounded half baked: increasing price to deter password sharing and launching advertising tiers…in 2 years?
• The viability of the longterm growth algorithm and 10 year DCFs that Netflix investors have leaned on for years has been rightfully vaporized. 

• Consensus expectations for Nidec have drifted towards more reasonable levels in the last few months and a guidance miss is now baked in. 
• However, our data analysis suggests that while revenue may exceed consensus expectations OP could miss. 
• Guidance on the other hand could be strong, but with multiples elevated that does not mean there is upside risk here.

• The stock has been hit by rising inflation and interest rates. Now is the time to buy
• Keyence is well placed to weather the storm given it has pricing power, high margins, and low capital intensity
• The P/B valuation of 6x is now back to a normalised range and the stock trades at a discount to global peers. 

• There are many simple domestic banks that can shine in a complex world
• Outside of the largest banks in many regions, there are uncovered gems
• This lessor known bank in Philippines has seen dramatic profit growth

• Efforts to normalize people’s lives to pre-COVID levels are likely to be a big negative on Kakao Bank as it could slow down the demand of its non-contact fintech services. 
• One of the near-term concerns on Kakao Bank is that there could be more than 1 million shares that could be sold by insiders that recently exercised their stock options. 
• We expect a further downside (20-25%) on Kakao Bank due to lofty valuations, ending social distancing measures, and potential selling by insiders that recently converted their stock options into equity.

• Roche Holding AG (ROG SW) is well-positioned for single-digit revenue growth, as strong uptake of new products is offsetting revenue loss from patent expired products due to biosimilar competition.
• New drugs, especially Hemlibra, Ocrevus, and Tecentriq are on a high growth trajectory, which is expected to continue, with no dependency on the COVID-19.
• Recently, Roche received FDA approvals for two new ophthalmology products. Both of them have potential blockbuster sales opportunity. Two more drugs are expected to be launched this year.

• IRDM is benefiting from continued need for satellite connectivity for a growing list of applications. IRDM reported first quarter results where the Company’s billable subscribers rose sequentially
• Commercial Internet of things (“IOT”) subscribers remains the growth catalyst for the business even though there are more voice and data customers activating service in the first quarter
• IRDM’s IOT service has an expanding use case. During the first quarter earnings call the topic of drones and unmanned aircraft was frequently mentioned

• With a limited upside to our target price and concern over decreasing people purchasing power following a rise in inflation, we downgrade our recommendation from BUY to HOLD 
• We expect HMPRO to report 1Q22 net profit at Bt1.49bn (+9%YoY, -16%QoQ),
• YoY growth will be supported by solid demand for WFH products, government stimulus scheme (Shop Dee Mee Khuen in Jan –15 Feb 2022), and solid revenue growth from Mega Home

• We reiterate BUY rating for EPG but trim down target price to Bt12.60, (Previous TP:14.30) derived from 21xPE’FY23E,  (5-year average) or 90% premium to materials sector. We reduce PE multiple 
• Expect the company to post 4QFY22 (Jan-Mar) core profit at Bt398m (+7%YoY -2%QoQ)
• Solid demand for automotive-parts in Thailand and Australian. Concern over rising raw material remain under control at least in the next two quarter

• TPL utilizing an unhedged strategy for its oil and gas royalties is set to announce first quarter results that should exceed expectations
• Higher energy prices and more production should result in TPL reporting oil and gas royalties materially higher than the fourth quarter.
• The increase in production benefits TPL’s water business. Oil producers need water during the fracking process. TPL’s water source is closer to producing oil wells

• Over the last year, we have highlighted some extremely damaging risks to Alibaba Group (9988 HK)’s cloud business.
• The exit of senior leadership, right before the data migration deadline and the cybersecurity deal reassessment, arouse suspicion.
• We suspect Alibaba could be using this “leadership reshuffle” to hide the reality of the Cloud business from investors.

• BYD (1211 HK) is the most vertically integrated with its own chip manufacturing facility (BYD Semiconductor) and battery production unlike the rest of the Chinese auto OEMs.
• The lockdown may not last that long as the Chinese authority is reportedly seeking to create a white list to resolve the supply chain issue.
• It announced that Q1 22 net profit will range between RMB 650 to 950 million, an increase between 174% to 300% YoY which will make its forward PE cheaper. 

• Hugel Inc (145020 KS) dominates South Korean botulinum toxin market, with ~50% share. The company already has presence in China and aims to launch its product in Europe this year.  
• Hugel’s ambitious target to enter into the world’s largest botulinum toxin market, U.S. is facing a big obstacle as Medy Tox Inc (086900 KS) filed a complaint against the company.
• Medytox’s U.S. business is uncertain after the ending of its exclusive licensing agreement with Abbvie Inc (ABBV US).   

• We believe strong orders and backlog, increase in installed capacity and development of new business initiatives are the key drivers for brighter outlook of China Energy Engineering (3996 HK). 
• Its new orders grew 51% YoY in FY21, with its backlog is enough to cover the revenue more than the next three years mean solid earnings security and visibility.
• Development of hydrogen energy and pumped storage businesses may take longer to contribute, but they also represent significant upside when enter into commercial launch. 

• There are doubts about the efficacy of Lianhua Qingwen to treat mild cases of COVID-19 in China, leading to the plunge of Yiling’s share price.
• Fully evaluating the efficacy of Lianhua Qingwen requires larger double-blind randomized clinical trials. Data from other than double-blind controlled clinical trials are hard to be conclusive and can be controversial.
• Even if Yiling could escape unscathed from the controversy, Yiling’s achievements since 2020 in capital market may not have sustainability.Together with the potential risks, investors are advised to remain cautious.

• On 19 April, the US CDC stated that the national mask requirement on public transportation is no longer in effect in the United States.
• The CDC lifting the mask mandate is a key catalyst and other major countries are likely to follow the US in the coming months.
• Will the world likely to become more like Shanghai and enforce even greater lockdown policies or will they become more like the US and drop social distancing and mask mandates? 

• Driven by the development mode of “organic growth + strategic acquisitions + cooperation with hospital partners”, Hygeia Healthcare Group (6078 HK) could rapidly expand nationwide, with solid business logic. 
• Hygeia’s delicacy management and the strength in operation help the Company to break the limits of the expansion of private hospitals, helping shorten the time it takes to break even.
• However, the high uncertainties on policy and State’s attitude towards private hospitals cast shadow on Hygeia’s long-term prospects, but investors could still trade this stock in short term.

• We reiterate BUY rating for GLOBAL with a target price of Bt25.0 based on 35xPE’22E, close to the average of the Thailand home-improvement subsector.
• We expect GLOBAL to report 1Q22 net profit at Bt967m (flat YoY, +30%QoQ).
• QoQ growth will be supported by high season quarter with a solid SSSG at+7.5%YoY in 1Q22 together with economic recovery as shown by Farm income Index was at Bt215 (+9%YoY)

• We expect the company to report net profit of Bt400m in 1Q22. (+1%QoQ+31%YoY), the highest level in the past five quarters.YoY expansion will be due to effective operating cost management
• Expect daily ridership to reach 70% of pre-COVID19 level by 3Q22, under assumption that there will be no major restriction measures induced by the virus outbreak. Furthermore, we expect ridership 
• Earlier-Than-Expected bidding for Orange line will be the re-rating catalyst (previously expected to take place within 1H22). We estimate upsides from this project at Bt1.90 per share.

• Maintain BUY rating with a new TP of B66.00 (down 8% from previous TP),based on 30.8xPE’22E which is close to its -1SD of 3-years trailing average. We believe, SCGP’s 24%
• We expect 1Q22E core profit to be the bottom quarter at Bt1.7bn (-21%YoY,-21%QoQ). Excluding one-time gain from the acquisition of Go-Pak adjustment, its recurring profit should rise 23%QoQ.
• We believe earnings momentum to recover in  2Q22 onwards by raising product prices in wake of costs turbulence, but would drop YoY due to fall from high base. 

• Euglena could be the most important sustainable aviation fuel company in Japan and a world leader in using micro algae as a feedstock
• The company looks set to become the largest provider of SAF in Japan by 2025
• Assuming the company can hit its commercial SAF production target, we think the stock could easily double

• Nikkei reported that Meituan intends to pay better compensation to small-and-medium restaurants and to delivery workers to prove that the company is in line with Beijing’s common prosperity measures.
• As Shanghai is under strict Covid lockdown, Meituan has seen a sharp rise in demand for grocery deliveries, however, margins are expected to be thin due to additional costs.
• The company has been under tremendous pressure to improve its cost structure and is undertaking 10-20% job cuts across all its business units.

• Tencent’s increase in investment acquisition activity has coincided with a general weakness in equity prices and valuation levels.
• Tencent management’s assessment of the fair value of its listed investee holdings, of RMB982.8bn on 31 December 2021, equates to roughly 27.4% of its market cap.
• The market value of Tencent’s investee holdings in more-mature, Chinese-listed, internet-orientated holdings equates to roughly 9% of its current market cap.

• Air China Ltd (H) (753 HK) has weaker passenger traffic in Mar and 1Q22 when compared with China Southern Airlines (1055 HK), and this is mostly due to the Olympics.
• We expect one-off factors to remove starting Apr and traffic gap against CSA will narrow going forward. Its associate Cathay Pacific (293 HK) has also seen good pick-up in Mar. 
• Air China outperformed CSA by 8pp YTD. There are signs of quarantine requirement relaxation for incoming passengers, and we anticipate gradual international traffic recovery to bode well for Air China.

• We initiate coverage of INTUCH with a BUY rating, based on our TP of Bt82 derived from 18.9% discount from SOTP valuation, implying 22.3xPE’22E.Despite ADVANC’s strong earnings growth in 2022-24
• Benefit from ADVANC’s top-of-industry performance. ADVANC to gain from better 5G infrastructure and ARPU reversal.
• ADVANC’s enterprise business will grow rapidly between 2022-24. THCOM has negligible impact on overall performance.

• As the “the king of generics”, Sino Biopharmaceutical (1177 HK) is lucky to have three “golden eggs”(Entecavir, Anlotinib, CoronaVac) to contribute huge performance over the years.
• The promotion of VBP and fierce competition make Sino Biopharmaceutical’s products lose pricing power. Due to little revolutionary technology/slow product iteration/weak R&D, it’s unlikely to have another Anlotinib level asset.
• The Company’s development mode, the mindset of management, and other concerns could be more serious problems, causing investors to distrust the management level and preventing it from getting high valuation.

• We have a non-consensus Bullish call on Rakuten and see over 60% upside to the share price
• The key driver will be a recovery in the Mobile Business
• We expect losses to gradually improve as roaming fees and customer acquisition costs start to decline

• NTGR spent the Q12022 reducing channel inventory of lower priced wireless routers, but there is still a lack of catalyst for consumers to upgrade after buying a router in 2020
• NTGR’s balance sheet makes the stock look attractive at current levels, but the first quarter has too many variables to push us off the sidelines
• During the first quarter of 2022 it was visible the degree of discounting NTGR had undertaken in the channel to remove lower priced wireless routers, or sub $299 price point

• Giant Manufacturing (9921 TT) , one of Shimano’s top customers, is reportedly having a production issue and can only sort it out by the end of this year. 
• Shimano Inc (7309 JP) is no longer Japan-centric but a global company with customers all over the world. 
• Low valuation gives an illusion that it is cheap historically but expects a bumpy road ahead.

• Post announcement of the acquisition of Citibank India’s consumer finance unit, Axis Bank has outperformed the market
• However, Axis Bank shareholders need to be more cautious about whether the acquisition will deliver the returns that the market is expecting.
• Competitors who either did not bid or lost out in the acquisition are focusing on poaching Citibank’s premier customers.

• Under the current policy in China, any minor changes to vaccine doses require a series of clinical data support and registration changes. So, WHO’s recommendation won’t affect Zhifei’s short-term performance.
• The increasing domestic competing HPV vaccines in the future would be a big threat to Zhifei’s agency business. Its self-developed products may not be strong enough to compensate. 
• The performance in 2022 is expected to be solid before real challenge comes in 2024. The valuation logic and outlook won’t be brighten unless there’s new breakthrough in agency business.

• Legend Biotech Corp (LEGN US) received FDA approval for its first product Carvykti in February as a fifth-line treatment of relapsed or refractory multiple myeloma.
• Label expansion of Carvykti for earlier line of multiple myeloma treatments should expand addressable market, thereby increasing peak sales opportunity to $5 billion from initial expectation of $1.5 billion.
• The U.S. Securities and Exchange Commission has added Legend to their delisting watchlist last week. The company needs to release required evidence by May 3 to stay listed.

• Many automakers said they suspended their productions due to the lockdown of Shanghai.
• A vice minister of Industry and Information Technology announced that 666 companies will resume production in Shanghai.
• We believe it is hard to resume the automobile soon because of the complication of a vehicle and the traffic jams around Shanghai.

• Legal casino gaming is limited to only three of India’s states, including Goa, Sikkim and Daman. But nationally US$60b is wagered legally and in grey area sites.
• Delta’s gambling ships and casinos lie within a roughly 2.5 hour flight from population centers like Mumbai and Delhi.
• Latest operating results indicate strong gains despite lingering Omicron spurts positioning the stock for a strong upside ahead.

• 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.