In today’s briefing:
- Kyocera (6971 JP): Strong Performance Unlikely to Last
- Taiwan Tech Weekly: More Nvidia Issues, Broadcom Surprises, Yulon Soars
- Haier Smart Home (6690 HK): A Trusted Name that Delivers
- Seiko Epson (6724) | Home Printing Running Out of Ink
- Polaris Group (6550 TT): An Attractive Bet With Differentiated Approach To Cancer Therapy
- Cloudflare ($NET)
- Beijing Tongrentang (600085.CH)- Neither Brand Nor Angong Niuhuang Pills Can Secure Future Prospects
Kyocera (6971 JP): Strong Performance Unlikely to Last
- It is hard to see how Kyocera can avoid a significant slowdown in sales and earnings growth given the weakness in electronics markets and the overall economy.
- R&D and capital spending continue to rise, putting pressure on margins and offsetting gains from the weak yen.
- Valuations are not compelling. Watch out as the share price drops back from its recent high.
Taiwan Tech Weekly: More Nvidia Issues, Broadcom Surprises, Yulon Soars
- US bans high end chip sales to China, Nvidia shares sink in reaction, as do Nvida suppliers and the overall sector.
- Broadcom’s fiscal Q3 results beat expectations and its optimistic outlook bucks the industry trend.
- Yulon motors soars 9%; its JV with Hon Hai has received 10,000 EV pre-orders in two days.
Haier Smart Home (6690 HK): A Trusted Name that Delivers
- Driven by recovery of Casarte after lockdown removed and premiumisation of product and pricing, Haier Smart Home (6690 HK) should see sustained healthy earnings growth in 2H22.
- We expect room to improve gross margin sequentially as cost pressure subsides in 2H22. Meanwhile, overseas markets still present good expansion opportunities.
- Premium valuations are justified by its brand strength, global presence and strong execution capability. Healthy 1H22 should clear market’s concerns on impact of weak property market.
Seiko Epson (6724) | Home Printing Running Out of Ink
- Seiko Epson has been one of the better performing tech stocks during 2022
- We believe that the stock benefited from COVID-related stay-at-home demand for printers
- We now turn Bearish as the Covid boost should dissipate, while the PC market has taken a turn for the worse
Polaris Group (6550 TT): An Attractive Bet With Differentiated Approach To Cancer Therapy
- Polaris Group (6550 TT) is developing novel anti-cancer therapies, with its lead drug candidate, Pegargiminase (ADI‑PEG 20) in late-stage clinical development for a wide range of cancers.
- The various cancers targeted by Pegargiminase combination therapy have combined annual new cases of more than 19 million. The treatment market size is estimated to reach $20 billion in 2025.
- Polaris aims to get at least two biologics license applications (BLA) approvals by 2025. With cash balance of NT$7.7 billion, the company is well-resourced to fund its ongoing clinical activities.
Cloudflare ($NET)
- Over the last few weeks I have been picking away at the book “The Master and His Emissary”.
- Within, Ian McGilchrist analyzes the differences between the two hemispheres of the brain (the right and the left), explaining how their inherent functionalities may drive the contradictions we all feel in human existence.
- Without going into too much depth here (I encourage you to read his work instead), I found myself struck by the idea of The Belief in One Truth.
Beijing Tongrentang (600085.CH)- Neither Brand Nor Angong Niuhuang Pills Can Secure Future Prospects
- 2018 was a watershed for Tongrentang. After the incident of using expired honey was exposed and the corruption scandal afterwards, Tongrentang’s performance declined significantly and didn’t recover until 2021.
- Angong Niuhuang Pill is the major performance driver and also Tongrentang’s core product. Due to the economic downturn, the price increase of Angong Niuhuang Pills could lead to inventory overstocking.
- The high growth in 2021 may not be sustained. We lowered our forecast for 2022. Without core competitiveness and high moat, we are conservative about Tongrentang’s long-term outlook.
💡 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
