In today’s briefing:
- Alibaba’s Chairman & CEO, Daniel Zang Faces a Downgrade
- Coupang(CPNG US, SELL, TP US$15.1) Rating Change: Facing More Competition from AliExpress,DG to Sell
- Thailand Casinos: A Game Changer in Early Stages that Could Move Faster than Believed at This Point
- Nikon (7731) | Profitability Key to Mid-Term Plan
- Nikon: A Reality Check on Nikon’s Medium-Term Management Plan
- Wuxi Biologics (2269.HK) – Investor Day Brings New Surprises
- Elastic N.V.: Does The Impressive Cloud Growth Make This A ‘Buy’? – Key Drivers
- UMP Healthcare Webinar Key Takeaways – Consolidation on the Investment Phase
- Tesla: Riding The Wave (Update)
- Ricoh (7752 JP) – Long Term Structural Decliner with a Recent Boost in Inorganic Rev & Profits
Alibaba’s Chairman & CEO, Daniel Zang Faces a Downgrade
- Daniel Zhang’s transition to a less prominent role within Alibaba’s Cloud business, after previously serving as CEO and Chairman of Alibaba Group (9988 HK), could be seen as a demotion.
- We suspect that there could be some government influence on these proposed leadership changes.
- Nonetheless, the situation is not encouraging, especially as the company enters a turbulent phase with multiple units poised to pursue IPOs in the near future.
Coupang(CPNG US, SELL, TP US$15.1) Rating Change: Facing More Competition from AliExpress,DG to Sell
- AliExpress has prioritized South Korea. We expect AliExpress’ South Korea GMV to increase 150%~ YoY to about US 1bn in 2023, or about 3% of Coupang’s.
- We found that AliExpress has more overlap with CPNG’s key products rather than Naver. The average price of recommended items on AliExpress was 65%~ cheaper than CPNG in our sample;
- We lower our CPNG GMV est. by 2%/3% in 2023/2024. We downgrade CPNG to SELL and lower its TP to US$ 15.1.
Thailand Casinos: A Game Changer in Early Stages that Could Move Faster than Believed at This Point
- Initial positive study by legislative group completed in 2021. Regulatory follow up could move faster than generally believed igniting a process for market leaders in Asia.
- Initial study recommended Bangkok and 22 regional, smaller scale properties including world famous resort area Phuket.
- Baseline tourism to Thailand in 2019 rated as the 5th largest on the globe.
Nikon (7731) | Profitability Key to Mid-Term Plan
- Poised for Profitability rebound in FY3/25 putting Nikon on track to meet mid-term plan targets.
- ArF Unit Expansion as Intel benefits from government fiscal incentives to build fabs in EU and US.
- Based on the FY3/26 plan for EBIT of Y70b, the stock’s theoretical valuation would reach around Y2,200/share
Nikon: A Reality Check on Nikon’s Medium-Term Management Plan
- During 4QFY03/2023 results release, Nikon announced a medium-term target of revenues of ¥700bn, OPM of 10%+ and ROE of 8%+ by the end of FY2025E (FY ended 31st March 2026).
- Our analysis (with conservative assumptions) suggests that the company could easily achieve its medium-term target despite the company expecting to see its earnings declining in FY03/2024E.
- Nikon is trading at a discount to its Japanese peers Canon and Konica Minolta and we think the market is clearly undervaluing the company as a pure-play Imaging products player.
Wuxi Biologics (2269.HK) – Investor Day Brings New Surprises
- A major reason for investors’ disappointment is that the number of new projects in 23H1 were significantly lower-than-expected. The impact of slowdown in financing activity began to show in 23H1.
- Higher revenue growth of non-COVID projects is needed to achieve the performance guidance target.If the management fail to fulfill the commitment to accelerate business recovery in 23H2,they may lose creditability.
- It’s unlikely to receive AD drugs orders this year. The market would react directly to short-term sentiment. Without big catalysts, it’s difficult for WuXi Bio’s stock price to perform well.
Elastic N.V.: Does The Impressive Cloud Growth Make This A ‘Buy’? – Key Drivers
- Elastic managed to exceed analyst expectations in terms of revenue as well as earnings.
- In Q4, total revenue increased by 19% year over year in constant currency, while Elastic Cloud increased by 30% year over year in constant currency.
- The subscription revenue was $256 million, increasing 16% year over year or 18% in constant currency, and made up 91% of the overall revenue.
UMP Healthcare Webinar Key Takeaways – Consolidation on the Investment Phase
- We held a conference call with the Chief Investment Officer of UMP Healthcare (722 HK), Patrick Cheung, on the 19th of June, 2023.
- The company continues to forge strategic alliances and collaborations, the latest being Hong Kong Adventist Hospital, in addition to the recent partnerships with Pedder Health/Human Health Holdings (1410 HK).
- The stock represents an excellent opportunity when trading at 6.6x PE FY23E with 44% of the market capitalization in cash and a 7.7% dividend yield on our numbers (50% payout).
Tesla: Riding The Wave (Update)
- Risks such as potential asset impairments, the stock’s volatility, and industry fragmentation persist.
- However, key valuation metrics coupled with our analysis leaves us with the conclusion that Tesla’s stock remains grossly undervalued.
- The company’s price cuts might be phased out by softening material costs, the company says.
Ricoh (7752 JP) – Long Term Structural Decliner with a Recent Boost in Inorganic Rev & Profits
- Large portion of the business is in secular decline and facing pricing pressure
- Ricoh Company Ltd (7752 JP) appears to be losing share in a shrinking market
- Estimates are above overly optimistic guidance making shares look optically inexpensive
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