In today’s briefing:
- Fast Retailing: Great Fundamentals for Uniqlo, Shame About the Share Price
- Tencent (700 HK) Earnings Preview: To See Recovery in 1Q23
- Shakeys Pizza/Keepers Holdings Q1 2023 Results: What to Expect?
- Naver (2023 High Conviction Update): Poshmark & Gen Z – Key Drivers of Higher Sales in North America
- Alibaba (9988 HK) Earnings Preview: Better Growth and Better Margin for 4Q23
- Recruit Holdings: 4QFY2023 Earnings Preview
- Shockwave Medical Inc (SWAV US): Beat-And-Raise 1Q23 Results; BSX Deal Reportedly Hit Roadblock
- [KE Holdings Inc. (BEKE US) Target Price Change]: Government Clears the Commission Uncertainties
- MGM China: 1Q23 Results Shine Positive Light on Higher Valuations Ahead
- [BeiGene, LTD. (BGNE US) Target Price Change]: Valuation Adjustment Can Drive the Stock Upside
Fast Retailing: Great Fundamentals for Uniqlo, Shame About the Share Price
- Uniqlo is such a mainstay of Japanese retailing, and indeed life, that its dominance seems inevitable and unchanging.
- Yet it has morphed from a mess of poorly judged acquisitions and failed overseas experiments into Japan’s biggest retail export – and still manages to pull off 20% growth.
- Its latest target of ¥10 trillion in 10 years is far-fetched but its history of persistent determination suggests continued expansion is a certainty.
Tencent (700 HK) Earnings Preview: To See Recovery in 1Q23
- We believe total revenue will grow by 6% in 1Q23, compared to four stagnant quarters in 2022.
- We also believe operating margin will improve by 2 percentage points YoY in 1Q23 due to the layoff in 1Q22.
- We believe the stock has an upside of 48%, but we reduce our price target from HK$563 to HK$505.
Shakeys Pizza/Keepers Holdings Q1 2023 Results: What to Expect?
- It’s barely three weeks since the annual results in April, and now Shakey’s Pizza (PIZZA PM) / The Keepers Holdings (KEEPR PM) will declare their Q1 2023 results mid-May.
- Both results are expected around the 14th/15th of May, with a confirmation of Shakey’s Pizza (PIZZA PM) holding its post-results call on the 17th of May.
- We expect stellar Q1 results and good guidance for 2023 for both companies.
Naver (2023 High Conviction Update): Poshmark & Gen Z – Key Drivers of Higher Sales in North America
- In this insight, we provide an update of Naver Corp which is our 2023 high conviction stock. Naver’s shares are up 19% YTD, outperforming KOSPI which is up 12% YTD.
- The total transaction amount of Naver Commerce was 11.6 trillion won (up 19.7% YoY) in 1Q 2023. Poshmark also generated positive EBITDA in 1Q 2023.
- Naver plans to cancel about 1.6 million treasury shares per year (1% of outstanding shares) in the next three years (for a combined 3% of outstanding shares).
Alibaba (9988 HK) Earnings Preview: Better Growth and Better Margin for 4Q23
- We believe revenue will grow by 5.6% YoY in 4Q23 and by 9% in FY2023 versus 2.7% in FY2022.
- We also believe operating margin will improve slightly to 8.9% in 4Q23 versus 8.2% in 4Q22.
- We believe the stock has an upside of 63% for March 2024.
Recruit Holdings: 4QFY2023 Earnings Preview
- Recruit Holdings (6098 JP) will report FQ4 results on 15th May. Consensus expectations are ¥844.4bn and ¥92.5bn in revenue and EBITDA respectively.
- The company revised its previous guidance in February and expects revenues and OP of ¥823bn and ¥89.2bn respectively for 4QFY03/2023.
- Our revenue forecast for 4QFY03/2023 is in line with Recruit’s guidance, while we expect the company’s adjusted EBITDA to be slightly higher than the guidance.
Shockwave Medical Inc (SWAV US): Beat-And-Raise 1Q23 Results; BSX Deal Reportedly Hit Roadblock
- Shockwave Medical Inc (SWAV US) reported better-than-expected Q1 results, due to continued geography expansion and strong demand of its IVL catheters for the treatment of coronary and peripheral artery diseases.
- Shockwave projects 2023 revenue of $700–720M, which represents 43–47% YoY growth. This compares to previous 2023 revenue guidance of $660–680M.
- According to a new media report, the acquisition talks between Boston Scientific (BSX US) and Shockwave have hit a snag as both the parties could not agree on a price.
[KE Holdings Inc. (BEKE US) Target Price Change]: Government Clears the Commission Uncertainties
- China government guided no commission capping on real estate brokerage business, but the ladder-pricing system may lead to moderate commission rate reduction for Beike.
- We estimate that 0.1% of Lianjia commission rate cut can imply to 1.2% of revenue reduction for Beike in 2023.
- Therefore, we lowered revenue by (2.8%) and net income by (5.3%) to factor in the potential changes. We maintain BUY rating but cut the TP by US$2 to US$21.
MGM China: 1Q23 Results Shine Positive Light on Higher Valuations Ahead
- Much market sentiment continues to await more evidence that recovery in Macau can be sustained long term towards reaching baseline 2019 revenue levels.
- MGM China Holdings Ltd. market share tracked under double digits pre-covid but is now poised to rise to low to mid teens going forward.
- We see the shares as undervalued because its ramp ahead starts at a lower base than peers and is poised for significant sequential earnings beats ahead.
[BeiGene, LTD. (BGNE US) Target Price Change]: Valuation Adjustment Can Drive the Stock Upside
- BeiGene (BGNE) reported C1Q23 top line 7% and gross margin 1.5ppt above our estimates, leading to non-GAA operating loss 23% narrower than our estimate.
- We raise BRUKINSA’s peak year sales from US$5bn to US$5.8bn while cutting Tislelizumab’s peak sales from US$1.5bn to US$1.2bn.
- With transition to a biopharma complete, BGNE should enjoy a higher multiple; We raised TP from US$219 to US$254 and maintain BUY.
💡 Before it’s here, it’s on Smartkarma
Sign Up for Free
The Smartkarma Preview Pass is your entry to the Independent Investment Research Network
- ✓ Unlimited Research Summaries
- ✓ Personalised Alerts
- ✓ Custom Watchlists
- ✓ Company Data and News
- ✓ Events & Webinars
