In today’s briefing:
- Alibaba (9988 HK): A Visit to ‘Freshippo Outlets’, a Discount Grocery Store of Freshippo
- Xiaomi: Margins to Remain Under Pressure with Premiumisation and Investment in EV (Quantamental)
- Taiwan Tech Weekly: Micron Forecasts This Week, Intel Conference, AMD CEO to Visit Taiwan Suppliers
- PT Avia Avian (AVIA IJ) – Beyond Paint
- China Shineway Pharmaceutical (2877HK)-Shineway Is Undervalued, but Downside Risk Is Hard to Control
Alibaba (9988 HK): A Visit to ‘Freshippo Outlets’, a Discount Grocery Store of Freshippo
- We visited a store of Freshippo Outlets in Shanghai in workhour.
- We believe the store is popular and accumulating more customers.
- However, the digitalized services bring some difficulties to old customers.
Xiaomi: Margins to Remain Under Pressure with Premiumisation and Investment in EV (Quantamental)
- Xiaomi Corp (1810 HK) share price has declined more than 50% over the last 12-months from HK$22.1 to HK$9.46.
- In the meantime, the company’s earnings also have weakened with resurgence of Covid-19 in China alongside decline in demand for smartphones in Europe and other markets.
- Xiaomi has entered into the premium smartphones segment which has negatively impacted the company’s margins due to aggressive expansion of offline stores.
Taiwan Tech Weekly: Micron Forecasts This Week, Intel Conference, AMD CEO to Visit Taiwan Suppliers
- Micron’s outlook for next quarter’s margin will be key, provides good color on future margin for key Taiwan names
- Intel conference could be catalyst for Intel Long/Short, CEO will be giving a keynote on company’s new direction
- AMD meeting many Taiwan-listed companies, Hon Hai EV platform closes new deal in Indonesia
PT Avia Avian (AVIA IJ) – Beyond Paint
- PT Avia Avian (AVIA IJ) is known for its position as the leading and best-quality paint manufacturer in Indonesia but it now has an increasingly diverse products portfolio.
- The company has successfully offset raw material price pressure with price rises to keep margins relatively steady and also saw a sharp pick up in sales in 2Q2022.
- Avian continues to launch new products and build out new distribution centres to support future growth, with future M&A also a potential growth driver. Valuations reflect its leading market position.
China Shineway Pharmaceutical (2877HK)-Shineway Is Undervalued, but Downside Risk Is Hard to Control
- Shineway showed good performance growth in 22H1, which was mainly driven by outstanding growth of TCM formula granules business. We think such positive momentum would continue in the short term.
- The implementation of national standards is actually paving the way for future VBP. Together with increasing competition, Shineway could be difficult to maintain over 70% gross margin in long run.
- Shineway is cash rich and is undervalued. Obviously, the unfriendly macro environment provides a buying opportunity, but investors may need to consider the downside risks, which is hard to control.
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