In today’s briefing:
- Fenbi (2469 HK): Beneficiary Of A Weak Job Market In China
- China Consumption Weekly (4 Dec 2023): PDD, Alibaba, AliHealth, Great Wall Motor, ByteDance
- Starting to Glitter (Luk Fook Holdings 590.HK)
- Wuxi Biologics (2269 HK): Lowered 2023 Revenue Expectation Amid Challenging Industry Outlook
- Alpha Generation Through Share Buybacks in Korea: October & November 2023
- MediaTek (2454.TT): Rebounding from Cycle Bottom.
- Thanks to High Cargo Yields & Early Tourism Rebound, EVA & CAL Remain Highly Profitable in H223
- Eva Airways (2618 TT, BUY, TP:TWD34.90) The Best, but Not the Cheapest
- Global Digital Niaga (BELI IJ) – Truly Omnichannel
- Wuxi Biologics (2269.HK) – The Business Update Has Torn Away the Last Fig Leaf
Fenbi (2469 HK): Beneficiary Of A Weak Job Market In China
- According to China state media reports, a record number of more than 3 million people attended China’s annual civil service exam last weekend, up from 2.6 million last year.
- A civil servant job is viewed in China as highly stable. In the current weak macro environment where youth unemployment is high, job security is increasingly vital.
- The company now trades at 18x forward earnings, with around 30% expected earnings growth.
China Consumption Weekly (4 Dec 2023): PDD, Alibaba, AliHealth, Great Wall Motor, ByteDance
- PDD’s market cap has exceeded Alibaba’s due to PDD’s overseas performance and price sensitive consumers.
- Great Wall Motor plans to enter eight countries in Europe to bypass the investigation on Chinese export subsidies.
- ByteDance plans to close its game subsidy and, 2,000 employees may lose their jobs.
Starting to Glitter (Luk Fook Holdings 590.HK)
- Stock price starting to recognise the increase in Chinese demand for Gold.
- Helped by a bottoming and a revival in Hong Kong retail sales and tourist arrivals.
- SPDR Gold Shares (GLD US) close to a new all time high
Wuxi Biologics (2269 HK): Lowered 2023 Revenue Expectation Amid Challenging Industry Outlook
- Wuxi Biologics (2269 HK) has guided for weaker-than-expected revenue and lower profit in 2023, as the operating industry is facing near-term challenges due to biotech funding slowdown.
- $300 million lesser revenue in development business due to reduced number of projects and manufacturing revenue deficit of $100 million due to CMO deferral contributed to the miss.
- Following the announcement, Wuxi Biologics shares nosedived 24% on HK stock exchanges, marking its biggest one-day slide since listing in 2017.
Alpha Generation Through Share Buybacks in Korea: October & November 2023
- In this insight, we discuss the alpha generation through companies that announced share buybacks in Korea in October and November 2023.
- We provide a list of 24 stocks in the Korean stock market that have announced share buyback programs in October and November 2023.
- The top five market cap stocks that have announced share repurchases include Celltrion Inc, Celltrion Healthcare, Shinhan Financial, Amore Pacific Corp, and Mirae Asset Securities.
MediaTek (2454.TT): Rebounding from Cycle Bottom.
- Mediatek Inc (2454 TT) has rebounded from the bottom of the cycle, and it will be able to reach more than 20% YoY in 2024F.
- The demand for 4G and 5G Smartphone SoC will be split around 55/45 by shipment volume, with Taiwan Semiconductor (TSMC) (2330 TT) being the primary supplier for MediaTek.
- The MediaTek Dimensity 6000 series will be the new flagship product line in 2024F.
Thanks to High Cargo Yields & Early Tourism Rebound, EVA & CAL Remain Highly Profitable in H223
- Taiwanese air cargo rates soared during the pandemic, and remain high today
- Taiwan’s carriers also benefited from an early recovery in outbound tourism
- Investors seem to be pricing in a ’24 earnings collapse that probably won’t happen
Eva Airways (2618 TT, BUY, TP:TWD34.90) The Best, but Not the Cheapest
- Eva Airways (2618 TT) (EVA) is enjoying the perfect tailwind of strong demand from both inbound and outbound, capacity deficit, a resurgence in corporate travel, and rising cargo rates
- Consensus believes FY2023 will be peak earnings as 2024 capacity rollout will balance the demand-supply, but our observations suggest things will likely remain the same until the end of 1H24
- Target price of TWD34.90 based on 13.4x FY2024 PE ratio – its long-term mean. Borderline attractive with a modest 11% UPSIDE, but 5.9% dividend yield is a sweetener
Global Digital Niaga (BELI IJ) – Truly Omnichannel
- Global Digital Niaga (BELI IJ) 3Q2023 represented the progress along the road to profitability with some intentional slowdown in growth as the shape of the 1P business changed composition.
- The platform’s 3P business booked vibrant growth driven by ongoing recovery from its OTA business under tiket.com, with the company’s omnichannel business continuing to grow its physical presence.
- Global Digital Niaga Tbk PT (BELI IJ) remains a differentiated player in the e-commerce space boosted by tiket.com and its offline presence brought together through its blibli tiket rewards scheme.
Wuxi Biologics (2269.HK) – The Business Update Has Torn Away the Last Fig Leaf
- It seems that investors have completely lost patience with WuXi Bio after the Company made new business updates. WuXi Bio’s transparency, communication strategy and expectation management need to be improved.
- Although the decline in performance is an important reason for the sharp drop in stock price, we think there’re still some deep-seated reasons that investors should pay extra attention to.
- Fed’s interest rate cut doesn’t necessarily mean immediate improvement in financing environment. In the CXO industry downcycle, whether WuXi Bio can achieve positive turnaround in 24H2 remains to be seen.
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