In today’s briefing:
- Olympus Corp (7733 JP): FY23 Result Missed Expectation; Initiated Muted FY24 Forecast
- Taiwan Dual-Listings: TSMC Premium Rallies as Japan & U.S. Entice Further Investment; CHT Discount
- Wynn Resorts Ltd: Recent Upgrades Indicate Its Time to Buy the Parent of the Macau Subsidiary
- Haier Smart Home (6690 HK): Value Emerging
- Monthly Container Shipping Tracker | Price, Volume Declines Moderate | Fuel=Tailwind (May 2023)
- Delta Taiwan Vs. Thailand Monitor: Delta Thai Stages Sharp Rebound; Should SET50 Index Be Fixed?
- CardioFlow (2160.HK) Vs Venus MedTech (2500.HK) Vs Peijia Medical (9996.HK) – Dark Horse Is Emerging
- REIT Watch – S-Reit acquisitions continue with Clar’s S$218 million buy
- Sandvik: Enhancing Customers’ Productivity
Olympus Corp (7733 JP): FY23 Result Missed Expectation; Initiated Muted FY24 Forecast
- Olympus Corp (7733 JP) announced mixed FY23 result. While revenue was slightly ahead of forecast, both operating and net profits missed guidance. Excluding Fx, revenue increased just 4.5% in FY23.
- Operating profit increased 28% YoY to ¥187 billion, below forecast of ¥198 billion, mainly due to high-than-expected SG&A expenses, which accounted for 47.7% of revenue versus forecast of 47.2%.
- Due to continuing macroeconomic uncertainties and waning Fx benefit, Olympus expects FY24 revenue to be ¥914B (+4% YoY) and operating profit to be ¥163B (-13% YoY).
Taiwan Dual-Listings: TSMC Premium Rallies as Japan & U.S. Entice Further Investment; CHT Discount
- TSMC’s ADR premium has enjoyed a significant rally perhaps due to increased international attention driven by positive U.S. and Japan news flow.
- ASE’s ADR premium has dropped to one of the lower values in its most recent range since the start of 2023, representing a gradual decline in this persistent premium.
- Chunghwa Telecom’s ADR is trading at a discount that likely represents a decent set-up level for this tightly trading spread.
Wynn Resorts Ltd: Recent Upgrades Indicate Its Time to Buy the Parent of the Macau Subsidiary
- Five sell side analysts have recently upped their PT’s on Wynn Resorts Ltf.
- Our own tracking of this company goes as far back as the ’80s to the 2000s, when we competed head to head for market share of the upscale segment.
- At US$110 it sustains its long history of trading at a premium to peers.
Haier Smart Home (6690 HK): Value Emerging
- The weak share price performance of Haier Smart Home Co Ltd (6690 HK) is unwarranted given the healthy earnings trend, solid net cash position and undemanding valuations.
- The 15.9% 1Q23 recurring earnings growth showed its low correlation with the property market while demonstrated the achievement in cost control and rising premium product contribution.
- It is set to benefit from government’s push for higher penetration of household appliances in rural areas. Meanwhile, recent Rmb depreciation may bring exchange gain for 1H23.
Monthly Container Shipping Tracker | Price, Volume Declines Moderate | Fuel=Tailwind (May 2023)
- Declines in carrier revenues and pricing continued to moderate in April
- Inbound to N. America container volume declines also eased in April
- Lower fuel prices a tailwind in ’23, shares cheap, we retain our +ive sector view
Delta Taiwan Vs. Thailand Monitor: Delta Thai Stages Sharp Rebound; Should SET50 Index Be Fixed?
- Delta Thailand has rallied 22.7% from its recent low, despite the local Thai market declining while the Taiwan market rose.
- Latest Delta Thailand surge unlikely due to Thai market fund flows or company developments. Delta Taiwan generates 2.5x the net profit with similar growth, yet has a smaller market cap.
- Over time, relative pricing should trend in Delta Taiwan’s favor as valuations are likely to drive longer-term performance — Also, should the SET50 Index be fixed? Seems broken.
CardioFlow (2160.HK) Vs Venus MedTech (2500.HK) Vs Peijia Medical (9996.HK) – Dark Horse Is Emerging
- TAVR was once envisioned with infinite optimism as a “hundred billion yuan market”, attracting massive amounts of capital/companies to enter. However, the commercialization status of TAVR companies is much bleak.
- High cost of TAVR surgery without medical insurance reimbursement and limited number of qualified hospitals to carry out such complicated surgery are the major reasons for the unsatisfactory sales growth.
- Venus Medtech’s market share would continue to be challenged. MicroPort CardioFlow’s low gross margin and slow product iteration are the problems. Peijia could be “dark horse” if positive momentum continues.
REIT Watch – S-Reit acquisitions continue with Clar’s S$218 million buy
- S-Reit acquisitions continue with Clar’s S$218 million buy Earlier last week, CapitaLand Ascendas Reit (Clar) announced the proposed acquisition of an integrated high-specification research and development (R&D) facility and business park property from Seagate Singapore International Headquarters for a purchase consideration of S$218.2 million.
- In April, MLT announced the acquisition of six logistics assets located in Japan, and one logistics property in Sydney, Australia.
Sandvik: Enhancing Customers’ Productivity
- Despite a challenging operating environment, Sandvik delivered a strong set of results in FY 2022.
- New financial targets were presented, with the ambition to grow 7% on average over a business cycle, whilst delivering adjusted EBITA margins between 20–22% on a group level.
- Sandvik enables important shifts in the industry as it offers customers cutting-edge technology. Therefore, customers have equipment and tools that warrant higher productivity, lower costs, and a higher sustainability impact.
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