In today’s briefing:
- Asia Gaming: Nagacorp’s Results Show Strong Covid Rebound Underway but Shares Still Undervalued
- Can Many Companies that over Years Could Not Suddenly Transform Themselves Thanks to TSE Requests?
- ZJLD Group Pre-IPO Peer Comparison – Smallest but Compensated with Growth. Sentiment Picking Up
- Alibaba Group Holding Ltd (9988 HK) – Initial Upswing Is Correcting Lower – Testing Key MA Support
- Lalatech Holdings Pre-IPO Tearsheet
- JD Health (6618.HK) – Business Transformation Is Still Difficult
- GTX: Revving for More Free Cash Flow
Asia Gaming: Nagacorp’s Results Show Strong Covid Rebound Underway but Shares Still Undervalued
- Nagacorp’s 1Q23 and full year 2022 results confirm our prior call that Nagacorp revenues would ramp faster back to baseline 2019 than the market anticipates.
- Trading at HKD$5.97 with a forward P/E of 13.18 makes the stock attractive early in the recovery cycle and headed higher as 1Q23 results indicate.
- Superior management has always been a strength of Nagacorp. It has been recognized by Institutional Investor as Asia’s #1 most honored company for investor relations and returns.
Can Many Companies that over Years Could Not Suddenly Transform Themselves Thanks to TSE Requests?
- Not because TSE requires it, but because management should provide shareholders with a concrete plan and outlook for cash allocation based on the company’s growth stage and the external environment.
- For companies that disclosed improvement measures before TSE requested them and saw their stock price rise significantly, the sustainability of the stock price depends on the feasibility of the plan.
- The stock market jumped the gun and rallied in anticipation of the company’s announcement of feasible plan as expected, even though the company has yet to disclose any improvement plan.
ZJLD Group Pre-IPO Peer Comparison – Smallest but Compensated with Growth. Sentiment Picking Up
- ZJLD Group (ZJLD HK) is looking to raise up to US$500m in its upcoming Hong Kong IPO.
- ZJLD Group (ZJLD) is a Chinese liquor company primarily producing baijiu.
- In this note, we discuss the industry dynamics and undertake a peer comparison.
Alibaba Group Holding Ltd (9988 HK) – Initial Upswing Is Correcting Lower – Testing Key MA Support
- At TMA we deliver high probability outcomes by focusing on our 3 pillars of technical analysis. •1) Response to key levels. •2) Price action. •3) Momentum confirmation.
- This week’s decline is deemed counter-trend and is in stark conflict with the bullish MT and LT triggers detailed in our bullish publication on 29 March 2023.
- Key support levels often combine a number of important moving averages. 92.00/94.50 combines the 20/50 week MA’s / 12/26 week EMA’s. High risk MT bottom at 92.00/94.50. Target 118.50.
Lalatech Holdings Pre-IPO Tearsheet
- Lalatech Holdings Co Ltd (LALA HK) is looking to raise about US$1bn in its upcoming HK IPO. The deal will be run by BofA, JP Morgan and Goldman Sachs.
- Lalatech operates via a marketplace model serving merchants and carriers. Its platform facilitates closed-loop transactions from online shipping order booking to intelligent order matching, and automated dispatching to after-sale services.
- In 2022, Lalatech facilitated over 427.5m fulfilled orders with a global freight GTV of US$6.7bn, with approximately 50.4m merchants served and business brought to approximately 2.3m carriers.
JD Health (6618.HK) – Business Transformation Is Still Difficult
- JD Health’s 2022 results were more optimistic than expected. We think the past three-year pandemic as well as the broadening of service scenarios are main drivers for rapid performance/user growth.
- If turning losses into profits is “a phased victory”,striving for higher profit margins and healthier revenue structure is the key task in next stage,but JD Health may fail this transformation.
- After China reopens, JD Health’s user scale could be difficult to maintain such rapid growth in 2023 and onwards. Without breakthrough in service revenue, its valuation expansion potential could be limited.
GTX: Revving for More Free Cash Flow
- GTX updated its annual outlook by forecasting results would be towards the high end of the previous guidance range.
- GTX also highlighted the opportunity to force the conversion of the Series A Preferred stock by the middle of the year.
- GTX had previously issued a sales outlook of $3.55 billion to $3.85 billion and adjusted EBITDA of $555 million to $615 million
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