In today’s briefing:
- Alibaba: Buoyed By The Ending Crackdowns, Yet Expensive With No Turnaround in Sight For Cash Cows
- China Internet Weekly (16Jan2023): Alibaba, Tencent, JD.com, ByteDance
- Money Forward (3994) | Corporate ARR +55% YoY
- Aristocrat Leisure: Recent Dip in Last 90 Days Opens an Entry Point for This Uncut Gaming Tech Gem
- Aier Eye Hospital Group (300015.CH) – The Truth Behind the Mirage
- Interiors Long-Term Growth in Japan a Plus for Nitori
- Kuaishou (1024 HK): Expanding Market, Will See Higher Growth and Profit
- Stanley Black & Decker Inc.: Initiation of Coverage – New Launches & Other Drivers
- Fastenal Company: Initiation of Coverage – Financial Forecasts
- Money Forward – Q4 Results Reaction: Encouraging Signs of User Growth and Monetization
Alibaba: Buoyed By The Ending Crackdowns, Yet Expensive With No Turnaround in Sight For Cash Cows
- Alibaba (ADR) (BABA US), along with several other Chinese tech names have rallied more than 100% over the past 2.5 months with the Chinese government indicating regulatory crackdowns are over.
- However, we think this could just be a temporary respite for tech names as there’s a lot more to be done in terms of a data security and privacy standpoint.
- Nevertheless, Alibaba Group (9988 HK) is still quite expensive, given that government interventions have pretty much curtailed Alibaba’s avenues for growth in the domestic market.
China Internet Weekly (16Jan2023): Alibaba, Tencent, JD.com, ByteDance
- The Chinese government may possibly buy minor shares in Alibaba and Tencent.
- JD.com’s long-term competitor, Dangdang, opened a bookstore in JD.com’s app.
- In 2022, both Tencent Video Account’s active user base and time on site reached 80% of We Chat.
Money Forward (3994) | Corporate ARR +55% YoY
- Money Forward Q4 sales rose +42% YoY to Y6.2bn driven by corporate ARR (+55% YoY)
- Full year revenue guidance for FY11/23 is in line with consensus
- We still see over 20% upside in the stock if the company hits the top end of revenue guidance
Aristocrat Leisure: Recent Dip in Last 90 Days Opens an Entry Point for This Uncut Gaming Tech Gem
- We have been bullish on the prospects of the Aussie gaming tech maker’s real world valuation in the light of its outstanding performance.
- The company’s relatively low institutional holding profile suggests its visibility is limited.
- WE put a one year PT on the stock at AUD$45 vs its current trade at AU$33 because it outperforms industry peers in ROE among other reasons.
Aier Eye Hospital Group (300015.CH) – The Truth Behind the Mirage
- Aier launched new hospital acquisition plan. Obviously, Aier hopes to maintain high growth through M&A funds. However, considering its national market layout,Aier is in the final stages of aggressive M&As.
- Based on our data, Aier’s endogenous growth is actually very weak. Once external M&As fail to drive high growth, Aier’s overall performance growth would decline significantly. Aier is grossly overvalued.
- We expect decreasing birth rate after COVID-19. Due to the fundamental changes in the population structure, the valuation system of all assets would be destroyed – The long logic doesn’t exist.
Interiors Long-Term Growth in Japan a Plus for Nitori
- Growth in the Japanese home interiors and furniture markets is set to continue long-term.
- At present, just a handful of brands have any major presence led by Nitori Holdings (9843 JP) which continues to expand market share.
- With multiple formats, Nitori looks set to continue to dominate but faces competition from unlikely quarters, especially Yamada Denki (9831 JP).
Kuaishou (1024 HK): Expanding Market, Will See Higher Growth and Profit
- Short video continued to accumulate active users in China and the company’s light-version grew the most rapidly.
- We believe the revenue growth rate will rise from 2Q23 and the company will have positive operating profit from 2024.
- We set the price target at HK$103, which is 44% over the market price.
Stanley Black & Decker Inc.: Initiation of Coverage – New Launches & Other Drivers
- This is our first report on Stanley Black & Decker, one of the largest global manufacturers of tools and engineering systems catering to a wide variety of industries.
- The company delivered an all-around beat in its last result and has been making significant progress toward narrowing its focus and overhauling its supply chain in recent times.
- We initiate coverage on the stock of Stanley Black & Decker with a ‘Hold’ rating.
Fastenal Company: Initiation of Coverage – Financial Forecasts
- This is our first report on Fastenal, a major wholesale distributor of industrial and construction supplies.
- The company delivered a strong performance in the last quarter surpassing Wall Street expectations in terms of revenues as well as earnings.
- We initiate coverage on the stock of Fastenal Company with a ‘Hold’ rating.
Money Forward – Q4 Results Reaction: Encouraging Signs of User Growth and Monetization
- Q4 revenue growth of 43% was driven by growth in sales to corporates (+54%) on new user growth, customer mix, and upside from cross-selling
- EBITDA erosion improved from the peak losses of Q3 and whilst it has not issued full-year FY23 guidance, it says it expects steady improvements as the year goes on
- This was a good quarter but we expect that is largely reflected in the share price after a 61% run over the last six months
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