In today’s briefing:
- Advantest (6857): Sell into the Rebound
- Deep-Dive 2023-3: Boustead Singapore (BOCS SP)
- China Longyuan (916 HK): The Bull Story Should Continue
- Fu Shou Yuan (1448.HK) – Some Points Worth the Attention
- Tencent (700 HK): Game Market Shrinks for the First Time
- China Internet Weekly (20Feb2023): Tencent, Douyin, Yunda, Dingdong
- Taiwan Dual-Listings: TSMC Premium Holding Despite Buffett Exit, UMC Discount Opens Up
Advantest (6857): Sell into the Rebound
- Advantest’s share price has risen by 21.5% since the beginning of January, but sales and profits are peaking and YoY comparisons are becoming increasingly difficult.
- Competitor Teradyne’s results and guidance give an indication of potential near-term risk, which could be more than 20%.
- Visibility is deteriorating and the longer-term outlook uncertain. We doubt the share price can hold up as profits decline.
Deep-Dive 2023-3: Boustead Singapore (BOCS SP)
- The company was founded in 1828 as a British trading house, active across rubber plantations, tin smelting, trading of oil products, shipping, distribution of consumer goods and more.
- After Singapore become an independent country, Boustead Singapore was spun off from its Malaysian and British counterparts.
- In 1996, the company became controlled by entrepreneur FF Wong.
China Longyuan (916 HK): The Bull Story Should Continue
- The FY22 profit warning for China Longyuan Power (916 HK) reflected mostly items of one-off in nature and the weak result should be a matter of the past.
- The Jan overall generation growth of 30.6% and wind power growth of 44.4% are very solid performance. With economic rebound and low comparison base, we expect growth to sustain.
- Asset injection from CHN Energy and improvement in financial position through subsidy collection are positives, making its below 10x PERs for FY23 and FY24 attractive.
Fu Shou Yuan (1448.HK) – Some Points Worth the Attention
- The second wave of pandemic is important logic to drive up Fu Shou Yuan’s share price, but the peak value/lethality could be lower than first wave, leading to lower-than-expected demand.
- Whether the second wave can “arrive as expected” may not depend on pandemic itself, but on “whether to let it happen”,especially when China’s making every effort to promote economic recovery.
- Besides solid fundamentals/optimistic performance, hot market sentiment is very essential if Fu Shou Yuan (1448 HK)’s share price is to outperform. Policy changes are also a potential source of unease.
Tencent (700 HK): Game Market Shrinks for the First Time
- Chinese online game revenue decreased year over year for the first time since the statistic started.
- From 2018, the Press and Publishing Administration had significantly reduced the number of new game license.
- Short video has been gradually taking time on site from online game.
China Internet Weekly (20Feb2023): Tencent, Douyin, Yunda, Dingdong
- The Chinese online game market shrank for the first time in 2022.
- Tencent’s WeChat plans to launch a cooked food delivery platform.
- Douyin dismissed 15% employees in PICO, which is Douyin’s virtual reality team.
Taiwan Dual-Listings: TSMC Premium Holding Despite Buffett Exit, UMC Discount Opens Up
- TSMC – Premium holding up despite Berkshire investment sale news. We maintain a model on the company.
- UMC – ADR now trading at a discount. Pretty clear opportunity for a reversion back to a premium.
- ChipMOS – At parity, results coming February 23rd. We maintain a model on the company.
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