In today’s briefing:
- Actionable Trade: CNOOC H-Share 883HK – Strong SB Flow, A/H Prem, Low Valuation & Multiple Catalysts
- Delta Taiwan Vs. Thailand Monitor: Delta Thai Crashes Vs. Taiwan After Results, Can Correct Further
- China Healthcare Weekly (Apr.28) – Four Stages of China Biotech, The Real Foothold of R&D, Kelun
- Hotel Shilla: Wins New License to Operate Duty Free at Incheon International Airport for 10 Years
- Siloam International Hospitals (SILO IJ) – Ramped Up and Reaping the Rewards
- Astellas Pharma (4503 JP): FY23 Result and FY24 Guidance Meet Expectation; New Drugs Hold Key
- ASE Technology: Semiconductor Packaging & Testing Demand Suprisingly Weak At End of Quarter
- Herbalife Nutrition: Controversial But Undervalued
- U.S. Dollar Outlook: Remembering The Jay-Z Hip Euro Top
- Chewy Inc.: Growing Market Share In Pet Products – Key Drivers
Actionable Trade: CNOOC H-Share 883HK – Strong SB Flow, A/H Prem, Low Valuation & Multiple Catalysts
- Southbound will close for 3 days due to holiday, we view it as a good time to buy the stock on short-term momentum
- Investment thesis for CNOOC is similar to China Mobile: Strong southbound flows and A/H premium to narrow to support H share price
- Valuation is attractive. Potential share buybacks and trading dual counter (to narrow AH gap) are the upcoming catalysts
Delta Taiwan Vs. Thailand Monitor: Delta Thai Crashes Vs. Taiwan After Results, Can Correct Further
- Both Delta Electronics Thailand and its parent Delta Electronics Taiwan reported results; both reports came in below analyst expectations.
- Delta Thailand shares have dropped 19% since our recent update. The company also did a 10 for 1 share split in an apparent bid to make the shares look ‘cheaper’.
- Delta’s EV business grew 100% YoY and is becoming a significant driver for the company. The pricing mis-alignment between Delta Thailand and Taiwan has corrected substantially.
China Healthcare Weekly (Apr.28) – Four Stages of China Biotech, The Real Foothold of R&D, Kelun
- The real foothold of a pharmaceutical company lies in “Development” rather than “Research”. After the clinical development has reached the first-class level, what remains is the vision of the leaders.
- For China biotech, we think they would go through four stages- Stage 1 (2015 – 2019), Stage 2 (2019 – present), Stage 3 (2026-2028) and Stage 4 (starting from 2030).
- If without Merck’s deal, Kelun’s profit improvement was mainly due to effective cost control. If Kelun could maintain double-digit revenue growth, with net profit margin around 10%, it’s already good.
Hotel Shilla: Wins New License to Operate Duty Free at Incheon International Airport for 10 Years
- We expect the consensus to increase their operating profit estimates for Hotel Shilla in 2023 and 2024 by as much as 10-20% in 2023 and 2024.
- Higher earnings will likely be driven by Hotel Shilla winning new licenses to operate duty free at the Incheon International Airport and much better than expected profits in 1Q 2023.
- With improved momentum (both operationally and share price basis), we think that the Hotel Shilla (pref) could outperform Hotel Shilla (common) in the coming weeks.
Siloam International Hospitals (SILO IJ) – Ramped Up and Reaping the Rewards
- Siloam International Hospitals (SILO IJ) booked a very strong set of 1Q2023 results, despite a seasonally slower period, with all of its ramping-up hospitals now generating positive EBITDA.
- The company saw marked improvement in its patient metric in 1Q2023, both for inpatients and outpatients plus an improving payee mix with more corporate and insurance payments.
- Siloam put through price increases in 1Q2023, which will positively impact the next few quarters. It will also focus more on diagnostics this year as a new area for growth.
Astellas Pharma (4503 JP): FY23 Result and FY24 Guidance Meet Expectation; New Drugs Hold Key
- Astellas Pharma (4503 JP) recorded 17% growth in revenue to ¥1,519B in FY23, driven by 24% growth of Xtandi. Core operating profit grew 17% and core net profit increased 18%.
- The company has guided for flat revenue and core operating profit for FY24, mainly due to negative impact of Fx.
- Astellas expects to obtain FDA approval for fezolinetant for vasomotor symptoms associated with menopause in May 2023. The company will file for marketing approval for zolbetuximab in Q1FY24.
ASE Technology: Semiconductor Packaging & Testing Demand Suprisingly Weak At End of Quarter
- ASE’s results commentary for its semiconductor packaging and testing service said that inventory problems for the industry are taking longer than expected to improve.
- The weaker than expected environment was only realized towards the end of 1Q23. The company’s utilization is near an all-time low which is expected to persist through 2Q23E.
- Automotive remains a bright spot for the company, with Auto-linked revenue rising 30% YoY.
Herbalife Nutrition: Controversial But Undervalued
- Herbalife has a strong position in the wellness industry, with net sales of $5.2b in 2022 and a market cap of $1.46b.
- The company was founded in 1980, and it employs an estimated 9,900 people worldwide.
- First, the company has a strong brand name and loyal customer base, which can support long-term growth prospects for Herbalife Nutrition (NYSE:HLF).
U.S. Dollar Outlook: Remembering The Jay-Z Hip Euro Top
- The ‘end of the dollar’ has been nigh since 2005.
- The U.S. dollar will be the last to go crash, says CNN.com’s John Sutter.com.com/Doom merchants are back.
- The end of thedollar has been in place since 2005, says Sutter.
Chewy Inc.: Growing Market Share In Pet Products – Key Drivers
- In spite of the operating and economic climate difficulties, Chewy managed to deliver an all-around beat, surpassing the revenue, profitability, and free cash flow expectations of Wall Street.
- Their net sales climbed 13% to $10 billion during the fourth quarter, representing an annual growth rate of roughly 14%.
- Baptista Research looks to evaluate the different factors that could influence the company’s price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology.
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