In today’s briefing:
- Meituan Food Delivery 4Q Updates
- Terumo Corp (4543 JP): H1FY23 Results Reflect Continued Recovery from the Pandemic
- Shizuoka – Indigestion
- Baidu: Initiation of Coverage – Market Position & Key Drivers
- Alibaba Health Information Technology (241.HK) FY23H1 – Concerns Behind the Performance Turnaround
- Wynn Resorts
- Banorte and BanBajio – October Data Trends, a First Look at 4Q 2022; Returns Pressure Building?
- Peloton Interactive Inc.: Initiation of Coverage – Challenging Macro Environment & Other Factors
- Our Models Suggest National Retail Properties Could Surge
- Western Digital Corporation: Initiation of Coverage – Recent Collaborations & Other Drivers
Meituan Food Delivery 4Q Updates
- Meituan food delivery order growth slowed down in Oct and Nov due to covid restrictions.
- Meituan Instashopping continued to grow fast in terms of its daily orders.
- TikTok food delivery service so far hasn’t posed big threats to Meituan.
Terumo Corp (4543 JP): H1FY23 Results Reflect Continued Recovery from the Pandemic
- Terumo Corp (4543 JP) recorded double-digit revenue growth in H1FY23, with record-high Q2 revenue exceeding ¥200 billion. All three businesses of Terumo reported growth during H1FY23.
- Cardiac and vascular segment remained the key growth driver and grew 21%, driven by a 24% y/y growth in overseas revenue amid the recovery and growth of medical demand.
- Inflation and normalization of sales and marketing activities impacted the profitability of the company. To improve profitability Terumo has taken further price increase in second half.
Shizuoka – Indigestion
- Credit costs in September quarter are showing steep delta YoY and QoQ
- Accelerated credit growth in past six months may mean there is more to come
- Funding cost surge is keeping net interest income growth near zero despite swelling loans
Baidu: Initiation of Coverage – Market Position & Key Drivers
- This is our first report on Chinese internet behemoth, Baidu.
- The company’s operating loss and margin year over year and quarter over quarter for AI Cloud improved.
- Their new AI businesses, like AI Cloud and Intelligent Driving, are in line with China’s national ambitions and digital innovation.
Alibaba Health Information Technology (241.HK) FY23H1 – Concerns Behind the Performance Turnaround
- Although Alibaba Health turned loss into profit in FY23H1, it was mainly benefited from the obvious effect of expenses control,which isn’t a long-term solution to achieve the goal of profit.
- Alibaba Health has a more difficult problem. The logic of relying on multiple entrances to obtain customers to drive online drug sales has failed to bring higher revenue growth.
- In other to keep sustainable growth, it’s important for Alibaba Health to further improve user conversion rate. It is also urgent to actively expand new business growth points.
Wynn Resorts
- This is our first report on Wynn Resorts, a well-known operator of casinos and resorts across the globe.
- The company observed strength throughout the casino, with record gross gaming revenue and record hotel revenue, driven by strength in both ADR and occupancy on the nongaming side.
- In addition, Wynn is progressing with the planning for Wynn Marjan, their integrated resort in the United Arab Emirates.
Banorte and BanBajio – October Data Trends, a First Look at 4Q 2022; Returns Pressure Building?
- We analyse key trends to October 2022 for Banorte and Banco del Bajio, two of the top three ROE generating banks in Mexico which also trade on premium PBV ratios
- For both, the challenges are funding costs that rise faster than loan yields, crimping credit spreads, as well as the indications that cost of risk may have bottomed out
- Although the operating expenses ratio is well controlled so far, it seems unlikely that it can improve much more; these data trends add weight to our cautious view on Banorte
Peloton Interactive Inc.: Initiation of Coverage – Challenging Macro Environment & Other Factors
- This is our first report on Peloton Interactive, one of the most popular interactive fitness platforms in the world.
- The company delivered a disappointing set of results as it failed to meet Wall Street expectations with respect to revenues as well as earnings.
- We initiate coverage on the stock of Peloton Interactive, Inc. with a ‘Hold’ rating.
Our Models Suggest National Retail Properties Could Surge
- The Gordon’s Growth Model suggests National Retail Properties is severely undervalued.
- In addition, a seasonal ARIMA model indicates the REIT’s dividend yield might be sustainable.
- The REIT could be an outlier in 2023, according to the Gordon’s growth model.
Western Digital Corporation: Initiation of Coverage – Recent Collaborations & Other Drivers
- This is our first report on Western Digital Corporation, one of the largest manufacturers and distributors of data storage devices and solutions in the world.
- The HDD revenue of Western Digital during the quarter declined modestly.
- Western Digital is deep into qualifying its most recent generation of hard drives, including its 26-terabyte UltraSMR hard drives, at numerous OEM and U.S. cloud customers.
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