In today’s briefing:
- Eoflow: Ozempic and Wegovy Reducing Need for Disposable Insulin Injection Devices + Ongoing Lawsuit?
- FAST RETAIL (9983) | 3 Reasons Why Guidance Could Miss
- Xinyi Glass (868 HK): More Resilient Than Perceived
- TSMC (2330.TT): The Advanced Technology Nodes Are Looking at Upside in 2024F
- NEE & NEP Selloff Prompted by Higher for Longer Rates Sentiment
- Samsung Biologics (207940 KS): Raises 2023 Sales Guidance Second Time This Year; Buy the Dip
- SBI Holdings – Pages of Affiliates | Strong Securities | Banks Doing Well | Accelerating Profit
- China Power International (2380 HK): Continuing the Turnaround Trend
- GeoPark Limited (NYSE: GPRK): CPO-5 wells back online. Multiple discoveries in Colombia and Ecuador
- ATEN: Order Delays Continue, PT to $15
Eoflow: Ozempic and Wegovy Reducing Need for Disposable Insulin Injection Devices + Ongoing Lawsuit?
- Eoflow’s share price has dropped 27% lower than the proposed tender offer price of 30,000 won. Two major factors have negatively impacted Eoflow (294090 KS)’s share price.
- First, in September 2023, there were new data that suggested that popular weight loss drugs including Ozempic and Wegovy could reduce the need for insulin injections with patients with diabetes.
- Second, the ongoing lawsuit by Insulet continues to remain a major headache. Eoflow is not a KISS (“Keep It Simple Stupid”) stock.
FAST RETAIL (9983) | 3 Reasons Why Guidance Could Miss
- Fast Retail Full-Year Expectations: Anticipate strong FY results, but potential FY8/24 guidance headwinds include weather impacts and yen weakness.
- Management Guidance Risks: The key risk would seem to be China outlook; Japan/Europe’s heatwave impact on fall season; potential for gross margin pressures.
- Valuation: Despite growth prospects, concerns over cyclicality and valuation relative to peers persist.
Xinyi Glass (868 HK): More Resilient Than Perceived
- Xinyi Glass Holdings (868 HK)‘s stable auto glass business is often overlooked, making up 39% of the company’s gross profit in 1H23.
- Given the current valuation of 7x 2023E PE and 1.3x 2023E PB, the risk reward is skewed to the upside, and downside is protected with the stable auto glass business.
- The company’s management has been aggressively increasing stake in the company in the last 2 months, gobbling up 11 million shares.
TSMC (2330.TT): The Advanced Technology Nodes Are Looking at Upside in 2024F
- It is expected that TSMC will have full capacity utilization of 3nm and 5nm technology nodes starting from 1Q24F.
- Regarding 3nm technology, the EUV mask layer will be reduced.
- The total number of iPhone 15 units sold in 2023F is expected over 85 million.
NEE & NEP Selloff Prompted by Higher for Longer Rates Sentiment
- Higher for longer rate regime makes it difficult for NextEra Energy Partners to raise debt to fund high growth forcing a reduction in growth forecasts.
- Markets have reacted sharply to slashed forecasts with shares of NEP (-52%) & NEE (-22%). Growth is expected to remain lower in the future.
- NEE has performed markedly better than NEP. This is reflected by analyst price targets. However, NEE’s long-term growth story has stumbled raising investor concerns.
Samsung Biologics (207940 KS): Raises 2023 Sales Guidance Second Time This Year; Buy the Dip
- Samsung Biologics (207940 KS) expects 2023 revenue to grow by more than 20% YoY compared to 15–20% YoY growth expectations earlier, due to better-than-expected utilization of Plant 4.
- For the first time in the company’s history, Samsung Biologics has won contracts worth nearly KRW3T during the first half of 2023, with eight contracts worth more than KRW100B each.
- Anticipating strong demand, Samsung Biologics is building its fifth manufacturing plant with 180KL capacity, which is expected to be completed by April 2025.
SBI Holdings – Pages of Affiliates | Strong Securities | Banks Doing Well | Accelerating Profit
- SBI Holdings (8473 JP) may not be the easiest company to analyze with its many pages of affiliates, but at the least, it’s profit momentum is strong.
- Securities Group profit is key to the company where growth is excellent in earnings and in the number of new accounts, across many businesses.
- Its two banks in Japan are doing well, growing faster than others, but still SBI Holdings (8473 JP) is more of an alternative financial company to a traditional bank.
China Power International (2380 HK): Continuing the Turnaround Trend
- Power output for China Power International (2380 HK) is healthy in Jul-Aug, following the solid trend in 1H23. The drop in hydropower has moderated and wind and solar stayed decent.
- Capacity growth will reach 43% in FY23. With just 7.8% YoY in 1H23, most of the new capacity will be added in 4Q23, accelerating both output and profitability.
- The parent SPIC’s massive clean energy assets are candidates for potential injection. CPI’s high EPS CAGR of 28.8% means that it well deserves premium valuation multiples.
GeoPark Limited (NYSE: GPRK): CPO-5 wells back online. Multiple discoveries in Colombia and Ecuador
- • The Indico 6 and Indico 7 wells in the CPO-5 block in Colombia are now back online.
- Each well is expected to reach 4,000 bbl/d gross production (8,000 bbl/d gross total, 2,400 bbl/d net to GeoPark).
- The total gross production of both wells could reach 9,000 bbl/d by YE23.
ATEN: Order Delays Continue, PT to $15
- ATEN continues to experience challenges with order timing from some of its largest customers. ATEN lowered Q3 revenue forecast after North American service providers delayed their purchases in the quarter
- ATEN has spent the entire year trying to add more enterprise customers to offset this volatility and, while successful, it was not enough in the third quarter.
- ATEN is projecting third quarter revenue between $56.5 million and $58.5 million compared to our estimate of $75.3 million.
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