In today’s briefing:
- China Allows Import of 45 Foreign Video Games Including 7 Korean Games
- Bank Negara Indonesia (BBNI IJ) – Time to Play Catch Up?
- Sinopharm Group (1099 HK): Industry Tailwind and China Reopening To Drive Growth
- Mediatek: We Contacted Management Re: Latest Arm Restrictions, Accumulate
- African Rainbow Minerals Vs. Impala Platinum: Which One Is A Better Buy?
- BliBli (BELI IJ) – A Very Different Animal
- Chewy Inc.: Initiation of Coverage – Post-Pandemic Recovery & Key Drivers
- Hon Hai: EV Growth Will Come Into Focus in 2023E, Can Hit NT$155 Per Share
- Tencent/Netease: Tencent Behind Smaller Peers in This Year Game Approval
- Honeys: Sweet Profit in a Downturn
China Allows Import of 45 Foreign Video Games Including 7 Korean Games
- On 28 December, the Chinese regulators announced that it will allow import of 45 foreign video games in China, among which seven are Korean video games.
- Now that the Chinese authorities have allowed greater imports of foreign games, this will act as a significant positive catalyst to boost share prices of Korean game companies.
- Among the major Korean game companies, we believe that NCsoft and Netmarble are best positioned to capitalize on this catalyst.
Bank Negara Indonesia (BBNI IJ) – Time to Play Catch Up?
- Bank Negara Indonesia (BBNI IJ) has been a perennial underdog in terms of valuations versus its peers but as its ROE and ROA converge with those peers it should rerate.
- The bank’s 3Q2022 reflected the changing shape of its loan portfolio towards higher-quality and lower-risk exposure in corporate loans and tier 1 clients’ value chain, KUR, and payroll loans.
- BNI management is cautiously optimistic about the outlook for FY2023 in terms of loan growth and credit quality. Valuations remain attractive and ROEs may rise faster than consensus estimates.
Sinopharm Group (1099 HK): Industry Tailwind and China Reopening To Drive Growth
- Sinopharm Group Co Ltd H (1099 HK) remains a beneficiary of both VBP and China reopening. Consensus expects double-digit revenue and earnings growth for the company in 2023 and 2024.
- SinoPharm’s acquisition of VBP varieties constantly stood in the leading position in the industry. Through June 2022, China carried out seven batches of VBP, with 294 categories being included.
- With China gradually re-opening, SinoPharm should record accelerated growth in its pharma distribution business. With subsiding COVID-19 cases in Q3, SinoPharm reported 10% YoY and 8% QoQ revenue growth.
Mediatek: We Contacted Management Re: Latest Arm Restrictions, Accumulate
- We contacted Mediatek management in regards to the latest Arm restrictions for China; Mediatek doesn’t expect to be impacted.
- Mediatek’s latest chipsets are competing well against Qualcomm, and its China competition has been stunted by U.S. restrictions in our view.
- We have established our financial model for the company – We believe the shares should be held or accumulated on a value-basis.
African Rainbow Minerals Vs. Impala Platinum: Which One Is A Better Buy?
- Impala Platinum and African Rainbow Minerals are overlooked mining stocks with tremendous total return prospects.
- Both companies are breadwinners. Both stocks’ total returns prospects are unparalleled, according to the analysts.
- Both stocks have strong buy ratings to both stocks, which are assigned strong buy Ratings to both.
BliBli (BELI IJ) – A Very Different Animal
- Blibli (BELI IJ) is a very different animal from its listed peers given its omnichannel approach and its large 1P business plus a substantial private-public institutional B2B business.
- The company’s IPO was a relative success, raising US$508m in fresh funds, and the share price is still above the IPO price after listing on 8th November.
- Blibli (BELI IJ) is still loss-making but has a strong backer in the Djarum Group. Its travel business could move to profitability quite rapidly and Ranch is there already.
Chewy Inc.: Initiation of Coverage – Post-Pandemic Recovery & Key Drivers
- This is our first report on Chewy, the leading pure play e-commerce company in the U.S. in the domain of pet food, pet supplies, and pet healthcare products.
- During the quarter, they announced the growth of CarePlus, their exclusive line of insurance and wellness products with Lemonade-powered plans.
- In this report, we have carried out a fundamental analysis of the historical financial statements of the company.
Hon Hai: EV Growth Will Come Into Focus in 2023E, Can Hit NT$155 Per Share
- Hon Hai’s Zhengzhou problems appear to be easing; Nevertheless, the company is expanding in India and Vietnam regardless.
- We believe the company’s EV platform business and EV milestones will drive the shares in 2023E.
- We have developed a financial model for Hon Hai and are establishing a 12-month price target of NT$155 per share, 55% above current levels. This is higher than the Street.
Tencent/Netease: Tencent Behind Smaller Peers in This Year Game Approval
- China just announced game approval for December batch. The number of games approved is slightly higher than the previous three months.
- Pace of China game approval stays flattish, at a much slower pace than pre-tightening.
- In both December batch, as well as over the past year, we see Tencent behind its smaller peers in terms of receiving game approval.
Honeys: Sweet Profit in a Downturn
- Honeys is proving a resilient provider of low-cost women’s basic fashions in Japan.
- While it struggled after losing the fickle younger fan base five years ago, Honeys has bounced back through careful control of costs that has kept prices down.
- Along with Workman and Shimamura, Honeys looks to be one of the longer-term beneficiaries of the shift to discount apparel, particularly in rising operating margins.
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