In today’s briefing:
- Alibaba Cloud: Faces Nationalization Threat, IPO Prospects Remain Dim
- Yili: 4Q22 and 1Q23 Results – Buy
- Few Companies Include ROE and ROIC as KPIs in Their Mid-Term Management Plans
- Giant Biogene IPO Lock-Up – US$1.7bn Lockup Release Will Increase Free Float by 14x
Alibaba Cloud: Faces Nationalization Threat, IPO Prospects Remain Dim
- Alibaba (ADR) (BABA US) Cloud will cut prices for its elastic computing services using Arm and Intel-based chips by 15-20% and Nvidia’s V100 and T4 graphics processing units by 41-47%.
- It seems like the company is trying to combat increasing competition in the only way it knows how, by further subsidizing its already-subsidized cloud services.
- Price may not be the main reason for companies to avoid using Alibaba Group (9988 HK)‘s Cloud services. Government initiatives to nationalize the cloud-computing market could be a bigger factor.
Yili: 4Q22 and 1Q23 Results – Buy
- 4Q22 result beat and 1Q23 result was roughly in line
- Revenue growth to accelerate and margin to improve in 2023
- Long-Term targets remain unchanged and the valuation becomes attractive now
Few Companies Include ROE and ROIC as KPIs in Their Mid-Term Management Plans
- Although many companies now disclose numerical targets in their mid-term management plans, only a few still use ROE or ROIC as numerical targets(15% 1,801 companies of Metrical Universe, March 2023).
- The fact that many companies that don’t include ROE or ROIC as KPIs indicates that the management wasn’t aware of the return from the shareholders’ perspective or cost of capital.
- The 3-year mid-term business plan is built on the foundation of the actual project in progress and should be outlined to reflect its cash allocations and cash flow returns.
Giant Biogene IPO Lock-Up – US$1.7bn Lockup Release Will Increase Free Float by 14x
- Giant Biogene raised around US$70m in its Hong Kong IPO, after having downsized the deal and priced it at the low-end. Its six-month lockup will expire soon.
- GB is a leader in the bioactive ingredient-based professional skin treatment product industry in China.
- In this note, we will talk about the lock-up dynamics and updates since our last note.
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