In today’s briefing:
- Astra International (ASII IJ) – A Solid Start with Data in Mind
- Miniso: Investors Turning a Blind Eye to Red Flags in Miniso
- Launch of Starlink Service by SpaceX – Impact on 11 Korean Companies
- Los Andes Copper: PFS Published and M&A Scene Heating Up
- China Longyuan (916 HK): We Stay on the Bull Camp
- Ten Taiwan Tech Stocks With Largest Rising Institutional Ownership
- Leapmotor: In Desperate Straits..
- Acadia Pharmaceuticals (ACAD US): No Hallucination; Clear Path of Accelerated Growth Ahead
- [Kanzhun Ltd. (BZ US) Earnings Preview]: Weak Hiring Sentiments Drag Down Growth Trend
- Kibo Energy (KIBO) Flash Note Warrants Offering ACF Equity Research 19042023
Astra International (ASII IJ) – A Solid Start with Data in Mind
- Astra International (ASII IJ) registered a strong start to the year with strong growth across most of its major divisions in 1Q2023, including 4W, 2W, Financial Services, and Heavy Equipment.
- The company’s market share in the auto business remained stable and increased for motorcycles, whilst heavy equipment and mining benefited from higher coal prices and infrastructure improving revenues on toll-roads.
- Astra has launched a new JV with Equinix to build data centres in Indonesia, which makes an interesting addition to its digital economy exposure. Valuations are attractive relative to history.
Miniso: Investors Turning a Blind Eye to Red Flags in Miniso
- Despite a 15% drop in March 2023, Miniso (MNSO US) remains relatively expensive compared to peers, having rallied 330% between October 2022 and March 2023.
- We think this is a good opportunity to short MINISO Group Holding (9896 HK) as we see around 35% downside purely from a valuation angle.
- Meanwhile, red flags like insider selling, Blue Orca’s accusations, senior management departures, and a mature domestic market could send the share price back below $5.0.
Launch of Starlink Service by SpaceX – Impact on 11 Korean Companies
- The Starlink service is expected to be launched in Korea in 2Q/3Q 2023. Starlink gained more than 1 million active subscribers globally as of December 2022.
- The launch of the Starlink service in Korea is likely to have a positive impact on companies such as Hanwha Aerospace, Solu-M, Intellian Technologies, and Satrec Initiative.
- We like a pair trade involving long (basket of 8 stocks above that are positively impacted by Starlink launch in Korea) and short (three major Korean telcos).
Los Andes Copper: PFS Published and M&A Scene Heating Up
- Los Andes Copper Ltd (LA CN) published its long-awaited PFS in late February. The PFS shows an NPV of 2.77 billion USD vs a 240 million USD market cap.
- In our opinion, LA is one of the largest, Chile-based copper miners without a strategic investment partner.
- Lundin Mining (LUN CN), Hudbay Minerals Inc (HBM US) and Glencore Plc (GLEN LN) have announced offers for copper producers recently. Last year Rio and BHP also made copper acquisitions.
China Longyuan (916 HK): We Stay on the Bull Camp
- YTD, China Longyuan Power (916 HK) has seen its share price weak, but we believe focus should not be on the poor FY22 result and the moderate 1Q23 generation growth.
- Based on 5.5-6.5GW planned capacity expansion in FY23, this will mean a solid growth of 17.7-20.9% YoY. Coupled with efficiency improvement, we expect a sharp rebound in FY23 profit.
- With impairment on Ukraine mostly made and reversal of exchange and trading losses, there will be a big swing in bottom line. We welcome the improvement in cash flow too.
Ten Taiwan Tech Stocks With Largest Rising Institutional Ownership
- We analyze increase in institutional ownership across our Taiwan Tech universe.
- Realtek, Nuvoton, Powerchip, Faraday Technology stand out as stocks that have had rising institutional ownership but have traded flat over the same period. Realtek will have earnings April 21st.
- Advanced Energy has fallen in price even as institutions appear to have accumulated the stock.
Leapmotor: In Desperate Straits..
- Several news media outlets reported that Leapmotor (9863 HK) had inflated its sales data for December 2022 based on distributor claims.
- With China ending its new energy vehicle subsidy policy in 2022, EV makers were rushing to sell as many units as possible before embracing price hikes and face competition.
- The company announced a price hike in January and sales volumes have declined in 1Q2023. We think the company will struggle to increase its sales volume going forward.
Acadia Pharmaceuticals (ACAD US): No Hallucination; Clear Path of Accelerated Growth Ahead
- Acadia Pharmaceuticals (ACAD US) markets CNS drug Nuplazid, which is cash flow positive with increasing profitability since 2019. Acadia has guided for Nuplazid revenue of $520M–550M for 2023.
- On April 17, Acadia has launched in-licensed drug Daybue in the U.S. for the treatment of Rett syndrome in adult and pediatric patients two years of age and older.
- Nuplazid is being evaluated for negative symptoms of schizophrenia with top-line results expected in early 2024. In-house drug candidate ACP-204 is in Phase 1 trial for Alzheimer’s disease psychosis.
[Kanzhun Ltd. (BZ US) Earnings Preview]: Weak Hiring Sentiments Drag Down Growth Trend
- We expect BZ to report 1Q23 revenue and non-GAAP net income in-line with consensus. Our 2023 revenue and non-GAAP net income are (5.3%) and (37.8%)
- Lower than consensus, mainly due to 1) weaker growth outlook, 2) lower gross margin and 3) higher S&M cost;
- BZ platform’s supply side growth outpaced demand side in the spring season, indicating a weak recovery in recruiting. We maintain SELL rating and TP at US$13.5.
Kibo Energy (KIBO) Flash Note Warrants Offering ACF Equity Research 19042023
- UK reserve power – Pyebridge YE22E revenue £1.9-2.1m; 2xPOCs funded
- Debt to equity conversion ~ £0.7m – strengthening balance sheet
- South Africa WTE – Sustineri -Gauteng CHP 2.5 MW net. signed
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