In today’s briefing:
- ITMG – Insights from the Q2 2022 Presentation
- Hansoh Pharmaceutical (3692 HK): Strengthening Innovative Portfolio Through In-Licensing
- Wuxi Biologics (2269.HK) 2022H1 – Hard to Achieve V-Share Rebound
- ENN Energy (2688 HK): Seeing Sign of an Upturn
- Will This De-SPAC Be The Next Peloton?
- China Internet Weekly (22Aug22): E-Commerce, Logistics, Online Game, Food Delivery
- RC Ventures Sold Its Entire Stake In Bed, Bath & Beyond. Is GameStop Next?
ITMG – Insights from the Q2 2022 Presentation
- Indo Tambangraya Megah (ITMG IJ) reported strong Q2 2022, with profits of 247 mn USD up 225% YoY, and coal prices averaging 202 USD/ton for the quarter (inline).
- The only disappointment was volumes which came in at 3.9 mn tons, down 20.5% YoY. The company guided sequential improvement in coal production for Q3 2022 to 4.6 mn tons.
- Indo Tambangraya Megah (ITMG IJ) is 2.6x PE FY22e, with 28% of its market capitalization in cash and a dividend yield of 28% based on a 70% payout ratio.
Hansoh Pharmaceutical (3692 HK): Strengthening Innovative Portfolio Through In-Licensing
- Hansoh Pharmaceutical (3692 HK) is strengthening its innovative drug pipeline. In August the company in-licensed one clinical stage drug candidate for women health, having large addressable market opportunity in China.
- Earlier in May, entered into an exclusive license agreement with NiKang Therapeutics and obtained an exclusive license to develop and commercialize NKT2152 for the treatment of cancer within China.
- Hansoh’s self-developed oncology drug is getting closer to the UK approval through its partner EQRx. The company received approval for one generic oncology drug in China.
Wuxi Biologics (2269.HK) 2022H1 – Hard to Achieve V-Share Rebound
- WuXi Biologics released 2022H1 results. The Company maintained its growth momentum. We highlight some positive sides. However, gross profit margin decreased. Considering the future trend, margin performance is not optimistic.
- A drop in demand has already occurred. Meanwhile, after the biologic drug boom has passed, the “low-hanging fruit” is gone, there could be more magnified cyclical problems for WuXi Biologics.
- As an old generation CXO, it’s difficult for WuXi Biologics to achieve V-shaped rebound or hit new highs.2022 is a good time to offload. Investors can take advantage of it.
ENN Energy (2688 HK): Seeing Sign of an Upturn
- Core net profit rose a healthy 10.9% at ENN Energy (2688 HK) in 1H22 despite challenges from pandemic lockdowns and surge in input costs.
- We expect to see sequential improvement in both dollar margin for gas sales and overall gross margin in 2H22. Excellent integrated energy pipeline should add to earnings momentum.
- Gearing improved 2.2pp in 1H22 and there is more room to deleverage in 2H22. While the stock’s valuation is not particularly cheap, it has probably already hit the trough.
Will This De-SPAC Be The Next Peloton?
- Pandemic darling Peloton saw a meteoric rise and fall over the past two years.
- The company initially benefited from soaring demand, but overestimated demand and eventually leading to a fire sale and massive layoffs.
- German sports e-commerce retailer Signa Sports United, which went public through a SPAC deal last year, could face a similar fate in the coming months.
China Internet Weekly (22Aug22): E-Commerce, Logistics, Online Game, Food Delivery
- Logistics companies’ revenue grew by over 10%, which reflects the recovery of e-commerce.
- The market size of Chinese online game continued to shrink in July.
- Alibaba’s Ele.me sets up a mini-program on TikTok to fight Meituan.
RC Ventures Sold Its Entire Stake In Bed, Bath & Beyond. Is GameStop Next?
- GameStop (GME US) shares have materially outperformed the Nasdaq and S&P 500. GameStop shares fell ~2% YTD vs. Nasdaq (~-19%) and S&P 500 (~-11%).
- RC Ventures, controlled by GameStop Chairman Mr. Ryan Cohen, holds a ~12% stake in the struggling video game retailer. The company announced a 4-for-1 stock split in July.
- GameStop reported a record net loss of $158M and burned through ~$311M in cash in 1QFY22. We continue to believe the stock is massively overvalued and see downside potential.
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