In today’s briefing:
- Comfortdelgro (CD): 1H 22 Result – Looks Good
- Conviction Call Recruit: More Downside Ahead
- Keepers Holdings: Exciting Soundbites From Management Call for H1 2022
- China Internet Weekly (15Aug2022): Alibaba, Tencent, Meituan, TikTok, JD, NetEase, Dingdong
- Huadong Medicine (000963.CH) 2022H1 – Huadong Is Back on Track. If Shares Pullback, Then Be Long
- Navigating the Housing Downturn
Comfortdelgro (CD): 1H 22 Result – Looks Good
- Comfortdelgro Corp (CD SP) operating number has improved during COVID compared to before COVID such as fixed asset turnover from 0.4x to 0.8x.
- Public transport and taxi operating numbers adjusted for government relief went through the roof.
- It is trading at 6x EV/EBITDA vs Singapore Airlines (SIA SP) at 13x EV/EBITDA.
Conviction Call Recruit: More Downside Ahead
- Recruit Holdings (6098 JP) reported 1QFY03/2023 results on Friday. Revenue grew 26.8% YoY to JPY843.2bn (vs consensus JPY784bn) while OP increased 14.0% YoY to JPY119.3bn (vs consensus JPY106.1bn).
- HR Tech segment’s earnings growth has started decelerating with recruitment markets normalising while matching & solutions’ earnings have not yet recovered to pre-pandemic levels.
- We think there is further downside as global recruitment markets face more challenges with slowdown in economic growth and uncertain outlook.
Keepers Holdings: Exciting Soundbites From Management Call for H1 2022
- The management of The Keepers Holdings, Inc. (KEEPR PM) highlighted bullish trends from their call for H1 2022 for on-premise and travel retail that bode well for H2 2022.
- We believe the company is on the cusp of backward integration by acquiring its supplier, Bodegas William and Humbert (in Spain). We believe this is an exciting future catalyst.
- The stock trades at 6x PE FY22e (ex-cash) with seven bn+ pesos of cash on the balance sheet representing 37% of market capitalization. We see significant upside ahead.
China Internet Weekly (15Aug2022): Alibaba, Tencent, Meituan, TikTok, JD, NetEase, Dingdong
- Express parcels increased by 8% YoY in China in July.
- TikTok was still the top non-game app in the world in July.
- Meituan raised its prices of bike sharing on August 10.
Huadong Medicine (000963.CH) 2022H1 – Huadong Is Back on Track. If Shares Pullback, Then Be Long
- Huadong released encouraging 2022H1 results. After a significant decline due to the loss of VBP bid for core varieties, Huadong is out of trouble and back on track now.
- The future profit contribution would be on medical cosmetology and industrial microorganisms businesses. For 2022 forecast, revenue YoY growth is below 10%, and net profit YoY growth is above 15%.
- Due to unfriendly macro environment, Huadong’s share price could face a correction. But based on its promising outlook, we recommend that investors could take advantage of the pullback to long.
Navigating the Housing Downturn
- iBuying giant Opendoor has benefited significantly from soaring home prices over the last eighteen months, as revenues have tripled and its asset portfolio has skyrocketed in value.
- However, surging mortgage rates coupled with sky-high prices are leading to a steep decline in sales.
- Potential buyers are now waiting on the sidelines for lower rates/prices, while sellers are now pulling listings until prices start climbing again.
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