In today’s briefing:
- Alibaba (9988 HK): A Visit to Premier – Freshippo Begins to Try New Style Again
- Shakey’s Pizza (PIZZA PM): A Strong Q3 2023 On The Cards, Good Momentum Into Q4
- LICI – 62% Mkt Share, Covers 92% of India, 148% ROE, Under-Penetrated, Many Operational Strengths
- Taiwan Tech Weekly: TSMC & ASML Results This Week; Taiwan AI Plays Top Losers
- HDFC Life: 2Q24 Result Update: In-Line on a High Base, HDFC Bank Distribution the Main Positive.
- UMC (2303.TT): We Estimate The Outlook Is Down a Bit to Lower QoQ in 4Q23F
- Keepers Holdings (KEEPR PM): Preview Q3 2023, Steady Into The Q4 High Season
- Amvis Holdings Inc (7071 JP): Strong Performance in 9MFY23; Business Expansion Continues
- MediaTek (2454.TT): Smartphone Is Turning a Bit Stronger
- REIT Watch – S-Reits among top gainers in STI for week starting Oct 9
Alibaba (9988 HK): A Visit to Premier – Freshippo Begins to Try New Style Again
- Freshippo opened its first high-end supermarket, Premier, in Shanghai in September.
- We believe it is a good idea to take business from independent stores and small store chains.
- However, we do not believe those foreigner-oriented foods will be popular.
Shakey’s Pizza (PIZZA PM): A Strong Q3 2023 On The Cards, Good Momentum Into Q4
- Shakey’s Pizza (PIZZA PM) is set to declare its Q3 2023 result in the 2nd week of November. We expect revenue/earnings growth of 41%YoY/44%YoY.
- Q4 is the seasonally highest growth quarter, where the company makes 40% of its annual profits. A strong Q1-Q3 sets up a solid end to the year.
- We believe the company will easily be able to meet or beat its guidance of 30% revenue and profit growth for FY23. Stock trades at 13x/9.8x PE FY23e/24e.
LICI – 62% Mkt Share, Covers 92% of India, 148% ROE, Under-Penetrated, Many Operational Strengths
- LICI has significant 62% market share of new business premiums with 92% coverage of all districts in the country, compared with 72% for all of the private sector combined.
- Long track record of operations since 1956 and strong growth, with recent years seeing exceptional strength in net profit, and with ROE reaching 148%.
- Well maintained SG&A costs with revenue growth exceeding policy benefits growth, with strong investment returns, especially in FY23. 1Q24 also shows continued operational strength, in a hugely under-penetrated market.
Taiwan Tech Weekly: TSMC & ASML Results This Week; Taiwan AI Plays Top Losers
- TSMC and ASML will report results this week. We may get additional detail about the scope of AI-related demand as a medium-term driver for the semiconductor industry.
- Many Taiwan AI plays were top losers last week. Separately, the U.S. is expected to announce new tech restrictions for China this week.
- SK Hynix is reportedly working closely with Mediatek to integrate some of its most advanced memory in Mediatek’s flagship Dimensity chips. Mediatek was a top gainer last week.
HDFC Life: 2Q24 Result Update: In-Line on a High Base, HDFC Bank Distribution the Main Positive.
- HDFC Life Insurance (HDFCLIFE IN) reported 2Q24/ 1H24 results last week which were decent given the context: moderating VNB Margins amid changing product-mix and growth outlook positive for remaining year.
- The strong growth at the HDFC Bank counter is the key positive, though expected, on back of the HDFC Bank-HDFC merger.
- We value HDFC Life (HDFCL) at ~2.4x FY25e P/EV, implying a ~5% upside to current price. HDFCL is fairly valued in our view.
UMC (2303.TT): We Estimate The Outlook Is Down a Bit to Lower QoQ in 4Q23F
- The 4Q23F outlook is still coming down, but it’s not as worse as we originally expected.
- Samsung is staying a very stable demand for 28nm capacity in UMC.
- Based on our estimates, the wafer ASP is clearly increasing from 2Q22 to 4Q23F, despite a decline in demand from 4Q22 until now.
Keepers Holdings (KEEPR PM): Preview Q3 2023, Steady Into The Q4 High Season
- The Keepers Holdings (KEEPR PM) is set to declare Q3 2023 earnings in the 2nd week of November. We expect the company to report a 9%/18% YoY revenue/net profit growth.
- We expect a steady improvement in Bodegas W&H and operations and overall gross profit margins to remain stable at 26-27%.
- The stock is cheap at 7.7x/6.6x FY23e/24e with a 5.1%/5.9% dividend yield and 10% of the market capitalization in cash.
Amvis Holdings Inc (7071 JP): Strong Performance in 9MFY23; Business Expansion Continues
- Amvis Holdings Inc (7071 JP) reported 40% YoY increase in revenue to ¥23B in 9MFY23, driven by 27% YoY increase in bed capacity and 86.6% utilization rate at existing facilities.
- Operating profit grew 40% YoY to ¥6.2 billion. However, operating margin declined 10 basis points to 26.9%, due to the impact of inflation and increase in wages for long-service employees.
- Amvis announced plans to open 25 new facilities and expand 1 facility (1,308 beds) in FY24. The company plans to raise patient payments by about ¥4,000 per month in Oct’23.
MediaTek (2454.TT): Smartphone Is Turning a Bit Stronger
- We change our stance to be a bit bullish for Mediatek Inc (2454 TT).
- In 4Q23F, MediaTek’s outlook is getting a bit stronger upside.
- The Smartphone market is turning positive, but it’s too early to claim a fully rebound.
REIT Watch – S-Reits among top gainers in STI for week starting Oct 9
- REIT Watch – Performance of S-Reits within the STI On Thursday night (Oct 12), the US Consumer Price Index (CPI) came in slightly higher than markets had anticipated, leading to higher expectations that the Federal Reserve will likely implement one more interest rate hike before the year ends.
- The three S-Reits with the lowest gearing ratios are: Sasseur Reit (26.2 per cent), Frasers Logistics & Commercial Trust (28.6 per cent) and Paragon Reit (29.8 per cent).
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