In today’s briefing:
- Does Meituan Have the Appetite to Serve HK Food Delivery Market and Take On Foodpanda and Deliveroo?
- Taste Gourmet: Buybacks And Recovery Into Q2 2023
- Asia Casino Sector: We Are Raising Guidance on Nagacorp to Strong Buy and Overweight
- Anhui Conch Cement (914 HK): Well Geared Towards the Long-Term Drivers
- J Front Retailing (3086) | Still in the Bargain Basement
- Adastria Signs Forever 21, New Growth Through Licensing?
- BEM : Expect 3Q22 Earnings to Hit 12 Quarter High
- Zebra Technologies Corporation: Initiation of Coverage – Wide Footprint
- Adyen ($ADYEY, $ADYYF, $ADYEN)
- Fortive Corporation: Initiation of Coverage – The Provation Acquisition & Other Drivers
Does Meituan Have the Appetite to Serve HK Food Delivery Market and Take On Foodpanda and Deliveroo?
- Several news media outlets reported that food delivery giant Meituan (3690 HK) is preparing to enter the food delivery market in Hong Kong as domestic market is slowing down.
- Slowdown in Chinese economy coupled with regulatory hurdles have made it impossible for Meituan and other domestic tech players to expand locally.
- Online food delivery market in HK is dominated by Foodpanda and Deliveroo, and we think Meituan will have to offer deep discounts to grab market share from these two dominants.
Taste Gourmet: Buybacks And Recovery Into Q2 2023
- Taste Gourmet Group (8371 HK) is a play on the HK recovery with a promising outlook in the long-term at 5.7x/4.3x FY23/24e PE (10.5%/14.1% dividend yield assuming 60% payout).
- The company recently initiated a buyback mandate on the 20th of September for (10% of outstanding shares) and has repurchased 2.2% of outstanding shares so far.
- We believe the company will report strong earnings for its quarterly release on November 11th and payout a good dividend which will be a further catalyst for rerating.
Asia Casino Sector: We Are Raising Guidance on Nagacorp to Strong Buy and Overweight
- A recent dip in the shares against an accelerating revenue recovery trend signals a stronger buy signal not yet broadly recognized by the market.
- Performance to date augers well for a considerable upside by 4Q22 to 1Q23.
- Gains achieved in all customer segments: main floor mass, premium mass as well as VIP.
Anhui Conch Cement (914 HK): Well Geared Towards the Long-Term Drivers
- We see improvements in the underlying drivers of Anhui Conch Cement (914 HK) over the last two months, and we believe value has emerged for long-term investors.
- There is a slight recovery in cement price in Sep, and the proceeds from local governments’ special purpose bonds issuance will make incremental stimulus to demand.
- Net cash now amounts to 37.5% of share price, providing support to its over 9% prospective dividend yield as well as potential value-enhancing M&As.
J Front Retailing (3086) | Still in the Bargain Basement
- J. Front is a key beneficiary of improving consumption post-pandemic and a return of inbound tourism.
- Q2 sales rose 4.8% on the year. 2H sales guidance +2% YoY looks too conservative given full resumption of inbound tourism.
- We believe the stock still represents good value at 0.9x book value.
Adastria Signs Forever 21, New Growth Through Licensing?
- Adastria’s growth has been sporadic in recent years as it adjusts to maturity and saturation in core apparel markets.It has diversification projects but these will take time to develop.
- It thinks it can find faster growth by franchising and licensing with already well-known brands, starting with Forever 21.
- It also has a new business providing apparel collections to General Merchandise Retailers, starting with Izumi.
BEM : Expect 3Q22 Earnings to Hit 12 Quarter High
- Maintain BUY recommendation for BEM with a new target price of Bt11.40 (Previous TP: Bt9.90) after we incorporate value from orange line project into our valuation. We expect the company
- Expect solid profit recovery in 3Q22 and onwards Expect BEM’ revenue in 3Q22 to touch Bt3.6bn (+69%YoY +12%QoQ) supported by solid rebound in daily average MRT ridership to 313k trips
- Gross profit margin is assumed to expand to three-quarter high at 42% thanks to benefit from high operating leverage,which should help absorb the impact from an increase in MRT revenue
Zebra Technologies Corporation: Initiation of Coverage – Wide Footprint
- This is our first report on one of the leading players in the Automatic Identification Data Capture (AIDC) market, Zebra Technologies Corporation.
- For the solutions which automate and digitize workflows, customer demand remains strong for Zebra and it saw good growth in the e-commerce, retail, manufacturing, and healthcare end markets.
- We initiate coverage on the stock of Zebra Technologies Corporation with a ‘Buy’ rating.
Adyen ($ADYEY, $ADYYF, $ADYEN)
- When I think about the world of tech, there is no shortage of products, developments, or innovations that deserve attention.
- Some pieces of technology, when broken down, are extraordinarily complex and exist out in the open.
- Others hide in plain sight, functioning in the shadows, but are still responsible for certain components of indispensable processes that allow our world to operate as we know it today.
Fortive Corporation: Initiation of Coverage – The Provation Acquisition & Other Drivers
- This is our first report on Fortive Corporation, a leading provider of provider of essential technologies for connected workflow solutions.
- Fortive delivered an all-around beat as software ARR and hardware orders both increased, reflecting a more diversified and resilient product portfolio.
- In the quarter, orders and demand remained strong despite the rising FX headwinds and higher inflation.
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