In today’s briefing:
- L’Occitane (973 HK): FY1H24 Earnings Hurt By Massive Increase In Marketing, As Expected
- Perfect Medical H1 FY24: Rebound of Growth in H2 FY24, 9% Div Yield, New High ROIC Investment
- YSB (9885.HK) – Being Included in ETF Offers a Great Escape Opportunity
- ELS Losses for HSCEI Index Could Result in Lowering Dividend Expectations for Korean Banks in 2024
- Meituan: Earnings to Weaken Further
- Korean Air (003490 KS): Cheap, but a Value Trap
- [Miniso Group (MNSO US, BUY, TP US$31) Company Update]:Opportunity for a Reposition Has Come to Fore
- India Industrials | Quarterly Update – ABB India, Siemens, Polycab and Havells
- Taiwan Tech Post-Earnings Takeaways: Semis Margins Underestimated? Hardware 2024E Forecasts Ramped
- UMC (2303.TT; UMC.US): There Is a Greater Chance for a Rebound in 2Q24F.
L’Occitane (973 HK): FY1H24 Earnings Hurt By Massive Increase In Marketing, As Expected
- L’Occitane (973 HK) reported FY1H24 (fiscal year ending March 31) results yesterday after market, with net profit down 45% yoy.
- The sharp drop in earnings is mainly due to a 48% yoy increase in marketing costs, as well as increased finance costs.
- The company maintained the FY24 outlook of 17% topline growth and an operating profit margin of 12% (FY1H24: 7.2%).
Perfect Medical H1 FY24: Rebound of Growth in H2 FY24, 9% Div Yield, New High ROIC Investment
- Perfect Medical Health (1830 HK) results showed 7% revenue growth and 10% YoY profit (27% YoY adjusted profit for subsidies) growth in H1 FY24.
- The company declared a 14.2 cent/share interim dividend. H2 dividends usually are higher, so we expect a 32-35 cent dividend for FY24.
- This is another dividend-yielding gem, trading at 12.0x PE FY24e, a 9% dividend yield, and 15% of the market cap in cash and investments with a >50% ROE.
YSB (9885.HK) – Being Included in ETF Offers a Great Escape Opportunity
- YSB would be added to KraneShares CSI China Internet ETF.Cornerstone investors could opt to cash out directly,taking advantage of improved liquidity, which means even they’re not optimistic about YSB’s prospects.
- YSB’s profit margin is disappointing. It would be hard for YSB to deliver decent profits in the end. This business does not make money. YSB is also short of money.
- Since going public, YSB’s share price has been on a rollercoaster, which has deviated from the fundamentals, but it should be pointed out eventually stock prices will return to fundamentals.
ELS Losses for HSCEI Index Could Result in Lowering Dividend Expectations for Korean Banks in 2024
- The equity linked securities (ELS) losses related to Hang Seng China Enterprises Index (HSCEI INDEX) could lower dividend expectations for Korean banks in 2024.
- On average, if H-Index declines below 5,699, then the majority of the investors on these H-Index could start to incur major losses starting 1Q 2024.
- Amid challenges of lower interest rates expectations and higher losses from ELS products, major Korean banks could be more hesitant on share buybacks and increasing their dividends in 1H 2024.
Meituan: Earnings to Weaken Further
- Meituan (3690 HK) ‘s 3Q2023 revenues beat estimates while OP for the quarter was well below consensus estimates.
- There were clear signs of slowdown in earnings growth due to macroeconomic challenges and weaker demand. 4Q earnings are expected to decline further.
- Meituan’s share price went down by about 11% following its earnings announcement as slowdown in core local commerce and weakening earnings have concerned investors.
Korean Air (003490 KS): Cheap, but a Value Trap
- Korean Air Lines (003490 KS) is cheap, against peers and its own history. The impending merger with Asiana Airline is a major overhang
- Business is good, with steady passenger loads and yields, and cargo showing decent signs of recovery. Lower fuel prices could surprise on the upside
- Target Price KRW23,868 based on FY24 P/BV of 0.81x (1SD below mean). Too little upside for the level of uncertainty. PASS
[Miniso Group (MNSO US, BUY, TP US$31) Company Update]:Opportunity for a Reposition Has Come to Fore
- MNSO reported C3Q23 revenue in line with our estimate/consensus, and non-GAAP operating income in line with our estimate.
- However, stock fell 14% over two days, mainly on concern of slowdowns in overseas distributors;
- Based on our channel checks, overseas distributor inventory has always been a problem, more so when heightened US interest rate pricking the consumption bubble in developing markets.
India Industrials | Quarterly Update – ABB India, Siemens, Polycab and Havells
- In this Insight, we review the recent performance of ABB India Ltd (ABB IN) , Siemens Ltd (SIEM IN) , Polycab India (POLYCAB IN) and Havells India (HAVL IN).
- Most companies have performed in line with our expectations, we expect sectorial dynamics to remain in play.
- We continue to favour ABB over Siemens (ABB/SIEM), Polycab over Havells (POLYCAB/HAVL).
Taiwan Tech Post-Earnings Takeaways: Semis Margins Underestimated? Hardware 2024E Forecasts Ramped
- Taiwan Tech companies beat analyst expectations by a high rate in the latest quarter
- Semiconductors: Consensus could be underestimating a margin rebound for 2024E
- Hardware aggregate forecast earnings growth increased significantly for 2024E as compared to just three months ago
UMC (2303.TT; UMC.US): There Is a Greater Chance for a Rebound in 2Q24F.
- Although it is still early to determine the extent of the utilization rate that could be reached in UMC for 2Q24F, there is a greater chance for a rebound.
- UMC’s high-end technology, specifically 28nm, has a utilization rate of over 80% in 4Q23F.
- MediaTek is UMC’s largest client, dominating in WiFi, TV SoC, Bluetooth, and other areas.
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