In today’s briefing:
- Xiaomi: Aggressive Spending on EVs as Smartphone Growth Slows Down
- Sinopharm Group (1099 HK): Strong 2022 Results; Double-Digit Top and Bottom-Line Growth to Continue
- Prudential PLC: Initiation of Coverage – Expansion In Emerging Markets & Other Drivers
- Sino Biopharmaceutical (1177.HK) – The Positives and the Negatives
Xiaomi: Aggressive Spending on EVs as Smartphone Growth Slows Down
- Xiaomi Corp (1810 HK) ’s share price has been down more than 10% over the last 12-months with weakening of the company’s earnings particularly the smartphone business.
- Xiaomi’s entry into premium segment has not much helped its smartphone biz as it faces stiff competition from Apple and Samsung in the premium segment.
- The company spends aggressively on EVs to drive growth, however, with EV subsidies not renewed and intense competition, this may not help Xiaomi in the near term.
Sinopharm Group (1099 HK): Strong 2022 Results; Double-Digit Top and Bottom-Line Growth to Continue
- Sinopharm Group Co Ltd H (1099 HK) reported strong 2022 results, with annual revenue exceeding RMB550B and net profit achieving 10% YoY growth. Growth was driven by pharmaceutical distribution business.
- EPS increased 10% YoY to RMB2.73, ahead of consensus of RMB2.64. The company has increased its final dividend to RMB0.82 per share from RMB0.75 per share in the prior year.
- With favorable industry tailwind and China reopening, consensus expects Sinopharm to report double-digit revenue and EPS growth through 2025.
Prudential PLC: Initiation of Coverage – Expansion In Emerging Markets & Other Drivers
- This is our first report on Prudential, a major provider of life and health insurance.
- Prudential had a very strong quarter with 19% sales growth.
- Despite slower revenue recognition in the life insurance market, the company has been witnessing strong cash flows and returned over $800 million to shareholders in the latest quarter.
Sino Biopharmaceutical (1177.HK) – The Positives and the Negatives
- Sino Biopharm’s 2022 performance isn’t satisfactory, but the Company is gradually getting rid of the negative influence of VBP. We expect Sino Biopharm to achieve faster performance recovery than Hengrui.
- Most of Sino Biopharm’s innovative drugs are biosimilars and Me-Too products, which will face fierce competition once approved for listing. The revenue target of HK$100 billion by 2030 looks challenging.
- Corporate governance deficiencies and lack of the next big variety are the reasons why the market is reluctant to offer high valuation. The new CEO needs time to prove his ability.
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