In today’s briefing:
- Meilan Airport (357 HK): A Strategic Asset to Ride on Hainan DFS Investment Theme
- Ant Group – Headlines Overwhelmingly Positive & Hides Micro Loans Business’ Value
- Eisai Co (4523 JP): Alzheimer’s Drug Gets FDA Approval; Focus Is Now on the Path Forward
- Alibaba (9988 HK): Still Significant Upside After Surging
- Align Partners’ Corporate Activism on Korean Banks: A Media Presentation and Q&A Session
- Giftee: Digital Gifting Surges for Consumer Businesses
- Modern Dental Group (3600.HK)- 2023 Harsh Reality Is Hard to Avoid, but Short-Term Rally Is Possible
- XPER: CES and a New Catalyst
- Tractor Supply Company: Initiation of Coverage – Business Strategy & Key Drivers
- Sporting Crypto – Top 3 Web3 Trends for the Sports Industry in 2023
Meilan Airport (357 HK): A Strategic Asset to Ride on Hainan DFS Investment Theme
- Meilan Airport is both a strategic asset and a key beneficiary in China’s blueprint for Hainan. The hub holds an indispensable yet underappreciated position in Hainan’s DFS market.
- While jump in depreciation and plunging passenger traffic in 2022 dealt heavy blow to the company, they also pave the way for a strong turnaround as re-opening revives travel demand.
- We expect the company’s net profit to reach RMB600 million in 2023 and further double to RMB1.2 billion by 2025, driving share price to double in three years.
Ant Group – Headlines Overwhelmingly Positive & Hides Micro Loans Business’ Value
- News headlines on Ant Group are overwhelmingly positive these days and they try to hide the fact that the consumer finance business is worth just 1/2 of last year’s value.
- We think the main reason why markets are so optimistic these days is that they seem to think that regulatory crackdowns on the platform economy are finally over.
- With Jack Ma surrendering control of Ant Financial Services Group (6688 HK) just a few days ago, could anybody say that regulatory pressure is really over?
Eisai Co (4523 JP): Alzheimer’s Drug Gets FDA Approval; Focus Is Now on the Path Forward
- Eisai Co Ltd (4523 JP) received speedy regulatory nod for Alzheimer’s drug LEQEMBI. Treatment with LEQEMBI should be initiated in patients with mild cognitive impairment or dementia stage of disease.
- LEQEMBI will be available during or before the week of January 23, 2023. Eisai decided to price LEQEMBI at WAC of $26,500 per year to promote broader patient access.
- Eisai has submitted a supplemental Biologics License Application to the FDA supporting the conversion of the Accelerated Approval of LEQEMBI to a traditional approval.
Alibaba (9988 HK): Still Significant Upside After Surging
- A state-owned company invested in Ant Group which was also founded by Jack Ma.
- We believe both the revenue growth rate and the operating margin will rise in following quarters.
- We believe the stock price still has significant upside even after the surge in past four trading days.
Align Partners’ Corporate Activism on Korean Banks: A Media Presentation and Q&A Session
- Align Partners Capital Management (APCM) held a media presentation and a Q&A session with both the investors community and the media today.
- Align Partners’ corporate activism of the Korean banks has been one of the biggest stories in the Korean stock market this year.
- The Korean banks are likely to outperform the market in 1H23. Nonetheless, if there are further signs of housing price declines in Korea, this outperformance may not continue in 2H23.
Giftee: Digital Gifting Surges for Consumer Businesses
- The gift market has contracted in recent years as corporate and formal gift giving has declined, but companies and individuals are enthusiastic adopters of digital gifting thanks to the convenience.
- Businesses, in particular, are using eGifts as marketing and promotion tools and Giftee is one of the biggest beneficiaries of this trend.
- The convenience and low cost of these services suggests considerable potential for expansion going forward, even if the consumer online gift market will increasingly be owned by LINE.
Modern Dental Group (3600.HK)- 2023 Harsh Reality Is Hard to Avoid, but Short-Term Rally Is Possible
- Modern Dental Group (MDG) disclosed selected unaudited operational data for 22Q1-Q3. The negative trend on performance would continue to 22Q4. The overall 2022 performance of MDG would show a negative growth.
- We may face a situation where both domestic and external demand would weaken in 2023. MDG’s overseas revenue is expected to see a bigger YoY decline than domestic revenue.
- There would be strong expectations but weak realities in 2023Q1-Q2, during which MDG’s share price could rally in short term, but it’s not based on the improvement of its fundamentals.
XPER: CES and a New Catalyst
- XPER used the CES event this year to make several news announcements, but the biggest news for XPER was the one released by Roku Inc. (ROKU).
- The ROKU announcement causes TiVo being the only independent TV operating system. We believe this could result in XPER establishing greater market share for its TVOS than originally expected
- During CES Verstel introduced a series of TVs under multiple brands that would use TiVo TVOS. Additionally, XPER revealed more automakers that are releasing car models with AutoSense and AutoStage
Tractor Supply Company: Initiation of Coverage – Business Strategy & Key Drivers
- This is our first report on Tractor Supply Company, a major rural lifestyle retailer in the U.S. catering to recreational farmers and ranchers.
- It delivered a mixed quarter, missing out on the revenue expectations of analysts but managing an earnings beat.
- We initiate coverage on the stock of Tractor Supply Company with a ‘Hold’ rating.
Sporting Crypto – Top 3 Web3 Trends for the Sports Industry in 2023
- What better way to start the year than to make a fool of myself by predicting some trends for 2023?
- Forecasting or predicting anything is extremely difficult and the further out you go, the less accurate you can be.
- That’s even the case with weather with ~ 90% accuracy on 5-day forecasts and 50% on 10-day forecasts.
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