In today’s briefing:
- Meilan Airport (357 HK): Profit Warning Removed Share Price Overhang
- China Everbright Water (1857 HK): More to Look Forward
- Applied Materials Inc.: Major Drivers
- Twilio Inc.: Major Drivers
- [Miniso Group (MNSO US) Target Price Change]: 2023 Catalyst Is Store Expansion, Raise TP to US$24
- HubSpot Inc.: Major Drivers
- ETU: A Dominant Foothold in a Dominant Jurisdiction
- Mayne Pharma (MYX AU): H1 Result- Branded Products on Strong Momentum; Reset for Profitable Growth
- RHB – Volatility
- Northeast Pharmaceutical Fined $19 Million for Jacking Up Drug Ingredient Prices
Meilan Airport (357 HK): Profit Warning Removed Share Price Overhang
- Meilan Airport issued a profit warning last night expecting a net loss of not more than RMB280 million for 2022.
- While the magnitude of loss surprised us, positive share price reaction suggests investors are ready to look beyond.
- We incorporate both higher passenger throughput and financial expenses estimate in our model and trim our net profit forecast for 2023 from RMB600 million to RMB500 million. Maintain Buy.
China Everbright Water (1857 HK): More to Look Forward
- Weaker 2H22 and FY22 earnings are primarily caused by disruption from the pandemic, and the 18.7% share price retreat since 2022 should have well factored in an unexciting year.
- Recovery of construction revenue, rebound in margin, completion of pipeline projects, increase in water tariffs and faster receivable collections are the key positive factors to watch.
- China Everbright Water (1857 HK) will generate ROE of 9.8% and 10.3% for FY23 and FY24. Such return profile renders its 3.5x PER and 0.35x P/B for FY23 inexpensive.
Applied Materials Inc.: Major Drivers
- Applied Materials performed well in the first fiscal quarter and delivered an all-around beat.
- For the seventh consecutive quarter, the company increased its backlog.
- We give Applied Materials a ‘Hold’ rating with a revised target price.
Twilio Inc.: Major Drivers
- Twilio delivered a strong result with revenues above Wall Street expectations and strong profitability as against the analyst expectation of a negative EPS.
- The fact remains that its revenue growth lags behind booking growth.
- In this report, we have carried out a fundamental analysis of the historical financial statements of the company.
[Miniso Group (MNSO US) Target Price Change]: 2023 Catalyst Is Store Expansion, Raise TP to US$24
- Miniso reported its C4Q22 revenue at RMB2,494mn, (2.6%)/1.1% vs. our estimate/consensus, non-GAAP net income at RMB373mn, 27.8%/29.0% higher than our estimate/consensus;
- We expect Miniso’s revenue to achieve 33% YoY in C2023, driven by 1) the store expansion in both domestic and overseas market, 2) domestic single store revenue recovered;
- We maintain the stock as BUY rating, and raise TP by US$2 to US$24, reflecting Miniso’s expansion of domestic store network in low tier cities
HubSpot Inc.: Major Drivers
- HubSpot delivered profitable growth in the quarter with revenue increasing 35% year on year in constant currency in Q4.
- The company delivered an all-around beat and saw an operating profit margin of 14% in the fourth quarter and 10% for the year.
- In this report, we have carried out a fundamental analysis of the historical financial statements of the company.
ETU: A Dominant Foothold in a Dominant Jurisdiction
- ETU’s flagship Hawkins project sits in one of the best mining neighbourhoods in the world with its massive 681km2 land package spanning 80km along the Porcupine-Destor Fault which hosts >100 Moz Au
- The Band-Ore Project is an asset that the market is not yet giving ETU any credit for, however, the high-grade historical resources and recent drill results make for a highly promising project
- Committed partners – Kinross & Crescat Capital each own 10%
Mayne Pharma (MYX AU): H1 Result- Branded Products on Strong Momentum; Reset for Profitable Growth
- Mayne Pharma (MYX AU) reported triple-digit revenue growth in branded products division in H1FY23, driven by oral contraceptive Nexstellis, which contributes ~80% of segment sales.
- The company had an encouraging start to H2FY23. Both Nexstellis and dermatology are expected to exit FY23 with a positive run-rate contribution.
- The company has decided to cancel the previously proposed pro rata capital return and intends to use its cash in a better and productive way.
RHB – Volatility
- Far too much volatility in credit costs, making clarity on earnings difficult
- All core fee income items down sharply in quarter, credit cost delta main driver
- Despite good lending growth, there is little to show for it in ROA and core income
Northeast Pharmaceutical Fined $19 Million for Jacking Up Drug Ingredient Prices
- Leading Chinese drug-ingredients supplier Northeast Pharmaceutical Group Co. Ltd. was fined 133 million yuan ($19 million) for abusing its dominant market position in materials used to make a treatment for kidney dialysis patients.
- The market regulator in northeastern China’s Liaoning province conducted a three-year investigation of Northeast Pharmaceutical’s monopoly in the market for ingredients to make levocarnitine.
- The medicine is used to treat dialysis patients for a lack of carnitine, a substance that helps the body convert fat into energy
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