In today’s briefing:
- China Internet Weekly (6Mar2023): JD, Kuaishou, Baidu, Weibo, Vipshop
- Taiwan Tech Weekly: HP Says No Major PC Recovery in 2023E; Signs of Display ICs Early Turn-Around?
- [Bilibili Inc. (BILI US) Target Price Change]: Minor Protection Would Be a Pending Issue
- [Luckin Coffee Inc. (LKNCY US) Earnings Review]: A Few Bright Spots in a Transactional Quarter
- Coupang: Revenue & Profits Let Coupang Down, Valuation Is Still at a Significant Premium to Peers
- Global Health (MEDANTA IN): Solid 3Q and 9M Results; Continued Expansion to Drive Growth
- IDEXX Laboratories Inc.: Initiation of Coverage – Business Strategy & Other Drivers
- Valero Energy: Financial Forecasts, DCF & Comparables Valuation, ESG & Other Risks (02/23)
- Diageo: A Rare Gift From Mr. Market
- Enterprise Product Partners: Major Drivers
China Internet Weekly (6Mar2023): JD, Kuaishou, Baidu, Weibo, Vipshop
- Two JD.com departments began to try fresh food front-line warehouse again.
- Radio and Television Administration plans to clean the content in short video.
- Herman Yu, Baidu’s chief strategy officer and formerly CFO, just resigned.
Taiwan Tech Weekly: HP Says No Major PC Recovery in 2023E; Signs of Display ICs Early Turn-Around?
- Hon Hai reports YoY increase in January + February sales, maintains outlook.
- Hewlett Packard results: CEO says does not expect significant PC recovery in FY2023E. Fitipower results show display ICs potentially bottoming earlier than most segments.
- Memory Monitor: Two latest signals indicate lower margins and extended high inventories; biased Long Micron vs. Short Nanya Tech.
[Bilibili Inc. (BILI US) Target Price Change]: Minor Protection Would Be a Pending Issue
- BILI’s 4Q22 top line was basically in line, while non-GAAP net loss beat cons. by 8.28%. We largely dial down 2023 revenue forecast.
- Moreover, we also suggest that recent meeting by the National Radio and Television Administration (NRTA) to curb short video addiction for minor protection would heavily impact BILI.
- Maintain SELL and cut TP to US$ 15.4, which implies 1.85X PS in 2023.
[Luckin Coffee Inc. (LKNCY US) Earnings Review]: A Few Bright Spots in a Transactional Quarter
- Luckin Coffee reported its 4Q22 revenue, non-GAAP operating income, and non-GAAP net income (9.1%), (11.4%), (57.9%) lower than our estimate.
- The store temporary close due to Covid impact is the main reason for revenue miss, and the higher income tax payment is the reason for the miss on NI.
- We expect Luckin to catch up the store expansion schedule in 1Q23 at 730 new stores, and reach to 10,500 total stores by the end of 2023.
Coupang: Revenue & Profits Let Coupang Down, Valuation Is Still at a Significant Premium to Peers
- South Korea’s largest e-commerce company, Coupang (CPNG US) sank around 20% leading up to 4Q22 earnings. It dropped another 9% soon after the earnings report to around $14.0 per ADS.
- Meanwhile, the valuation remains expensive compared to regional peers as Coupang is trading at an 80% premium to the second most expensive e-commerce name in the region.
- If the share price breaks the trend line here, we think shares could go on to fall below the last year’s bottom of $8.98 per ADS.
Global Health (MEDANTA IN): Solid 3Q and 9M Results; Continued Expansion to Drive Growth
- Global Health (Medanta) (MEDANTA IN) reported double-digit growth in revenue, EBITDA, and net profit during Q3 and 9MFY23, driven by increasing footfalls, rising ARPOB, and faster-than-expected ramp-up of new hospitals.
- The company plans to add 1,000–1,500 beds in next 2–3 years, with ~70% of the planned bed addition being at existing hospitals, thereby entailing lower capex per bed.
- Recently, Medanta has announced a new asset light partnership to launch a 300-bed hospital in Indore under operations and management arrangement. The hospital is expected to commence operation in FY27.
IDEXX Laboratories Inc.: Initiation of Coverage – Business Strategy & Other Drivers
- IDEXX had a strong finish to the year, reflected in the company’s all-around beat in the last quarter.
- Its revenues increased organically, driven by organic gains in CAG Diagnostic and strong growth in its water and software businesses.
- Organic revenue growth in the quarter was supported by solid organic growth across its major business segments and growth in diagnostic imaging and veterinary software revenues.
Valero Energy: Financial Forecasts, DCF & Comparables Valuation, ESG & Other Risks (02/23)
- Valero had a solid year-end, with refineries running at 97% of their capacity in a positive refining margin situation.
- Besides, significantly discounted sour crude oils and fuel oils helped its refinery.
- High natural gas costs in Europe also encouraged refiners to process sweet crude oils rather than sour crude oils, placing additional pressure on sour crude oils.
Diageo: A Rare Gift From Mr. Market
- Diageo’s share price has been underperforming for far too long due to outside factors that have little to do with the business itself.
- The premium brand portfolio in combination with the well-executed acquisition strategy creates a unique opportunity.
- The company is well-positioned to retain and even improve its industry-leading margins.
Enterprise Product Partners: Major Drivers
- Enterprise Product Partners delivered a mixed set of results in the quarter.
- Enterprise moved a record 11.2 million barrels of oil equivalent per day which helped it deliver an all-around beat.
- They believe that a wide gas-to-crude differential could result in a considerable cost advantage for American petrochemicals globally.
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