Daily Brief Equity Bottom-Up: China Healthcare Weekly (Apr.6) – Boom of TCM Injections Is Coming and more

• The biggest changes in 2023 medical insurance catalog are the lifting of payment restrictions on TCM injections, which would drive rapid sales growth in the hospital market this year.
• GLP-1s are not flawless, and patients will lose not only fat but also muscle during weight-loss process. Then, another noteworthy opportunity has emerged – reduce fat and increase muscle.
• In 2024, Sino Biopharm is expected to achieve single-digit revenue growth. Deficiencies in corporate governance are one reason why the market is reluctant to offer Sino Biopharm high valuation.

• We compile our selection of small and mid-cap names with our desired characteristics of high dividend yields, value, and margin of safety.
• Our top picks are Perfect Medical Health (1830 HK), Water Oasis (1161 HK), Taste Gourmet (8371 HK), Uchi Technologies (UCHI MK), and Ginebra San Miguel (GSMI PM).
• We recently added Dream International (1126 HK). Read: Dream International (1126 HK): Dream Valuation of 3.7x PE and 12% Div Yield, >40% of Mkt Cap In Cash 

• TSMC: +16.2%, Bounced Back to Historically Extreme Level, Consider Short
• UMC: -0.3% Discount, Flipped to Positive and Now Negative Again
• ASE: +15.3% Premium; Bounced Back to Extreme Highs, Short the Spread

• AAOI recommends investing in Nintendo ahead of the launch of the Switch 2 console cycle in mid to late 2024
• Analyst sees potential for multiple expansion, margin improvement, and continued monetization of intellectual property through theme parks and movies
• Bullish on Nintendo’s stock in absolute terms and relative to other companies in the video game and media sectors, predicting significant gains based on past launch cycles.

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• United Microelectronics Corp (2303 TT)‘s 2Q24F outlook is experiencing a slight upward now, possibly indicating a positive QoQ.  
• UMC’s notable contributors are showing a mixed outlook, and Novatek Microelectronics Corp (3034 TT) could be the most influencer.
• Attention should be paid to the 3Q24F outlook for any potential changes and a shift from a bearish view could positively impact the outlook, potentially signaling the end of downturn.  

• Fu Shou Yuan’s 2023 performance was indeed not good, with negative growth in 23H2.Shanghai alone has limited market capacity.No matter how strong it is, it cannot drive the national market.
• Fu Shou Yuan has encountered difficulties in external expansion and M&A, so it chooses to increase dividends. However, this means the Company may have to say goodbye to high growth.
• The founder’s “past bad record” and uncertain business outlook hinder the upward potential of valuation, which requires a high margin of safety.It’s better bought at low price to collect dividends.

• China Power International (2380 HK)‘s earnings should accelerate in FY24, and rebound in hydropower is a key driver. Hydropower generation surged 84.3% YoY in 2M24.
• The 9.3GW of capacity acquired in Oct will provide first full-year contribution in FY24. Better economics for coal-fired plants will add to profit momentum.
• The 6pp increase in dividend payout signals management’s positive view in the outlook, and the Chairman is explicitly confident in good FY24 profit growth. 

• In March 2024, BYD’s Sales volume increased by 46% YoY and Li Auto’s sales volume increased by 39% YoY.
• AliPay announced that foreigners’ consumption amount in China in March was ten times of last year.
• Facing stagnancy and competition, Alibaba’s Taobao removed service charges from its retailers.

• Sealed Air (SEE) is a disaster in motion: its entire business is facing extinction as customers move away from the thin-film plastics the company makes.
• Sealed Air’s e-Commerce business has collapsed as Amazon has moved away from the single-use plastics, formerly ever present in its packaging. 
• California just passed two recycling and labeling bills that we think will make Sealed Air’s products unlikely to be used in the State and possibly in the US as a whole.

• This last week was packed with deals, amendments, and merger breakups.
• A SPAC is set to merge with an electric utility firm, and a blank-cheque firm is taking a critical metals supply chain-focused firm.
• Also, Sam Altman’s SPAC surges as it nears a deal, and a SPAC terminates a merger with a hydrogen energy firm. Read on to find out the latest about all things SPACs.