In today’s briefing:
- Adani Group Has a Significant Liquidity Gap to Bridge
- InMode Ltd (INMD US): Decelerating Growth & Unfavorable Macro Environment Are Major Concerns
- Pacific Basin Shipping (2343 HK): Bad Times Behind, What’s Setup for 2023?
- China Internet Weekly (2023Feb27): Meituan, JD, Baidu, IQiyi, NetEase, and Sohu
- Intel’s Cut Its Dividend, But Should It Cut Its Foundry?
- Haidilao (6862.HK): Growth Concerns Remain Despite Positive Profit Alert. Take Profit on Rally.
Adani Group Has a Significant Liquidity Gap to Bridge
- Short-Term borrowing plays an important role in the Adani group
- Rescinding of Adani Enterprises FPO and meltdown in share prices heightened liquidity concerns of the group
- This analyst estimates the liquidity gap to be around US$ 8 bn for FY2023 which needs to be bridged by long-term funds and/or cash flow from operations
InMode Ltd (INMD US): Decelerating Growth & Unfavorable Macro Environment Are Major Concerns
- InMode Ltd (INMD US) reported record-high quarterly revenue of $134M in Q4, up 21% YoY, mainly driven by the strong demand for its innovative, energy-based, minimally invasive product platforms.
- However, quarterly revenue growth is deteriorating since Q3 2021. Q4 2022 revenue growth of 21% is the lowest in last two years or eight quarters.
- Demand for aesthetic procedures in the U.S., which is the core market for InMode is expected to deteriorate in next 6–12 months due to macroeconomic headwind.
Pacific Basin Shipping (2343 HK): Bad Times Behind, What’s Setup for 2023?
- The decline in 2H22 profit (53.1% YoY and 43.8% HoH) for Pacific Basin Shipping (2343 HK) is a matter of the past. Market rates have already rebounded from the trough.
- Demand recovery on China re-opening, good forward cargo cover, reduction in operating costs, strengthened financial position and diversified customer base are Pacific Basin’s key merits.
- Lower profit for FY23 should be well anticipated by the market, yet it still generates ROE of 20.9%, making its 1.0x P/B inexpensive. Moreover, yield will stay at 10% level.
China Internet Weekly (2023Feb27): Meituan, JD, Baidu, IQiyi, NetEase, and Sohu
- Meituan has been hiring delivery workers in Hong Kong since February 20.
- JD will provide a subsidy of RMB1.5 billion to customers to compete with Pinduoduo (PDD) in early March.
- Four companies released financial performance for 4Q22, including Baidu, iQiyi, NetEase, and Sohu.
Intel’s Cut Its Dividend, But Should It Cut Its Foundry?
- Intel cut its dividend by 2/3rd, freeing up $4B in cash.
- The company revised own capital intensity guidance for 2023 to low 30s% from 35%, while maintaining 24/25 guidance.
- Recent $11B debt raise and Mobile eye shares should provide enough capital for the next year.
Haidilao (6862.HK): Growth Concerns Remain Despite Positive Profit Alert. Take Profit on Rally.
- Haidilao issued a positive profit alert last Friday which beat our and market expectations by a big margin. Profitability improved mainly due to shutting restaurants and labor optimization.
- We expect the news and the street’s earnings revision will drive near-term stock rally.
- That said, growth challenges remain and will be under spotlight during 2023-24. The expected stock rally will just build more expectations in the price. Take profit from the rally.
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