Daily Brief Equity Bottom-Up: Genting Singapore: Record 1Q23 Results Confirm Speedy Recovery Ramp Ahead and more

• Stock has become attractive at its still under the radar price.
• Nomura projects Singapore revenues are trending rapidly back to 90% of pre-covid levels.
• Adj. EBITDA of SG$774 (US$580m) for FY22—income attributable to holders up 85%

• SK Hynix and Samsung reported results in the last week, showing major losses for their memory businesses. More evidence of a ‘two-track recovery’ for different parts of the chip industry.
• SK Hynix’s inventory situation worsened based on our analysis; Micron appears to be managing inventory moderately better than peers based on recent results.
• Long Micron vs. Short Nanya Technology: Micron has continued to outperform Nanya Tech, as well as SK Hynix and Samsung.

• Adjusted net profit at China Education Group (839 HK) grew 15.1% in 1H23, accelerated from 5% in 2H22. We are delighted to see resumption of interim DPS at Rmb0.164.
• FY23 outlook will be underpinned by higher education student enrollment and tuition increase. Strengthened financial position offers opportunities for both organic and M&A growth.
• Potential upside will also come from completion of for-profit conversion at Jiangxi University of Technology. We consider its 7.9x PER, 1x P/B, 13.3% ROE and 5.5% yield attractive.

• We think the coffee price competition, mainly between Luckin and COTTI, is temporary, and will have little impact to Luckin’s gross margin. 
• We also think COTTI’s low pricing strategy is unsustainable, and its franchisees are keen for price hike.  
• We maintain the stock as BUY and maintain TP at US$41.

• Accelerating de facto standardization of the Iq System
• Guiding for double-digit growth in sales and profit in FY23/3
• Roadmap for sustainable growth. Takamiya is currently implementing its medium-term management plan ending in FY2024/3.

• Strong demand for Eicher Motors (EIM IN) ‘s Royal Enfield bikes with returning customers.
• The model “Hunter” is expanding the market and attracting a new set of customers.
• Royal Enfield entering a new growth phase with new launches and customer service focus.

• Tencent will report 1Q2023E earnings on 17th May. Online gaming revenues have declined YoY for 4-consecutive quarters while social networks revenue has been down for the last two quarters.
• Our app data analysis suggests that grossing ranks of some of Tencent’s key domestic titles have dropped during 1Q2023 while international titles show an improvement during the quarter.
• Our regression model suggests that Tencent’s internet value-added services biz’s revenues would grow at lower single digits in 1Q2023E and is still playing catch up with its own self.

• Krung Thai Bank Pub (KTB TB) remains our pick; it ranks top in terms of post-provision profitability, screens well on NPL coverage, funding and valuations, including its attractive PEG ratio
• We also like Bank Of Ayudhya (BAY TB), with its sound pre and post-provision profitability in 1Q23, strong credit quality metrics and very attractive valuations
• Kasikorn has seen its high cost of risk come down in 1Q23, but this remains elevated versus its domestic peers; Kasikorn may be a 2023 opportunity, one for the watchlist

Immix Biopharma continues to share encouraging data from the Phase Ib/II open-label NEXICART-1 trial. This study is investigating NXC-201, a CAR-T therapy, for the treatment of multiple myeloma (MM) and light chain amyloidosis (ALA). At the European Society for Blood and Marrow Transplantation 49th Annual Meeting in Paris, Immix announced positive results for the 58 patients enrolled so far. An overall response rate (ORR) of 92% was reported for patients with MM, and an ORR of 100% for patients with ALA. The therapy has also continued to show a favorable safety profile, building on a comprehensive data package to support NXC-201 as the first potential outpatient CAR-T therapy, offering significant market differentiation, in our view. Management plans to submit a biologics license application (BLA) for FDA approval in MM once 100 patients have been treated, and in ALA once 30–40 patients have been treated.

• ADEA has seen its stock price decline in the past month since announcing license agreements with two major NAND memory makers
• This could have put too much emphasis on the semiconductor side of the business even though it is purely additive to the business model
• The expected year over year decline in first quarter 2023 revenue is related to one-time license payment last year