In today’s briefing:
- Meituan 4Q Food Delivery Updates
- LG Electronics: A SELL Candidate Amid Difficult Business Condition for Consumer Electronics in 2023
- Pinduoduo(PDD.US) 4Q22 Preview: Expect Moderate Margin Beat
- Samsung Biologics (207940 KS): Near-Term Key Positive Catalysts
- Long Apple Vs. Short Quanta & Pegatron: Trade Ahead of Apple’s Upcoming Earnings
Meituan 4Q Food Delivery Updates
- Food delivery daily order growth gradually recovered in late Dec
- Instashopping continued its growth momentum. Community group purchase has transformed into Next Day Delivery
- With the recovery of restaurants and travel post re-opening, Meituan is expected to be one of the biggest beneficiaries.
LG Electronics: A SELL Candidate Amid Difficult Business Condition for Consumer Electronics in 2023
- After a disappointing earnings results in 4Q 2022, we believe LG Electronics (066570 KS) is a SELL candidate.
- The decline in housing prices in major countries such as the US and South Korea have negatively impacted consumers’ purchases of consumer appliances.
- With the consensus that is likely to cut their operating profit estimates significantly in 2023, we think that LG Electronics’ shares could fall another 20-25% over the next year.
Pinduoduo(PDD.US) 4Q22 Preview: Expect Moderate Margin Beat
- We expect PDD’s total revenue in C4Q22 to be in line with cons., and non-GAAP net income to beat cons. by 9%.
- Faster-Than-Peers user growth, increase in brand product contribution and newly launched marketing program support PDD’s strong GMV trend and high take rate in the near term.
- Temu is moving to increase order volume and ASP to improve scale and save logistics cost.
Samsung Biologics (207940 KS): Near-Term Key Positive Catalysts
- Samsung Biologics (207940 KS) is expected to report strong Q4 results, with double-digit revenue growth. Partial operation of Plant 4 will impact profitability, which will be continued through H12023.
- The Chairman of the company has been selling shares, causing recent pullback in the stock, which should be considered as an attractive entry point.
- The long-term growth story remains intact, with all eyes being on upcoming conference where the company may unfold its capex plan amid stellar order book and industry demand.
Long Apple Vs. Short Quanta & Pegatron: Trade Ahead of Apple’s Upcoming Earnings
- Apple shares have fallen significantly on a weakening outloook; Yet manufacturers Quanta and Pegatron’s shares still haven’t reacted negatively.
- Inventory levels appear too high across Apple’s key contract manufacturers based on our analysis.
- We see Quanta & Pegatron at risk of margin pressure in 2023E with negative operating leverage potentially causing significant profit declines.
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