In today’s briefing:
- PC Partner: Strong 1H22 but High Uncertainty into 2H22. Downside Supported by Cash and Dividend.
- Raccoon: Maintaining COVID Momentum
- Bilibili (9626 HK): 2Q22 Preview, Still Grew Rapidly, Will Reduce Loss
- Burning Rock Biotech (BNR US): Despite Q2 Results Missing Consensus Management Reiterated Guidance
- China Comm Const (1800 HK): Key Takeaways from Post-1H22 Call
- SCBx – Positive Strategy Development
- Intel Vs. TSMC/UMC Long/Sort Monitor: Take-Aways from DB Conference & Fireside Chat
- Crowdstrike FY2Q23: FY2Q23: Not Just Endpoint, Identity and SIEM Accelerating Too
- PRM : Excited Fleet Expansion Plan
- Sany Profit Falls 73.85% as Demand for Construction Gear Dries Up
PC Partner: Strong 1H22 but High Uncertainty into 2H22. Downside Supported by Cash and Dividend.
- Pc Partner reported a strong set of 1H22 results last week and held a conf call with investors this week. Importantly, management sees no impact by US/China Nvidia AI situation.
- 3Q22 results will be weak as old inventory is being discounted in front of the launch of RTX 40 by NVIDIA Corp (NVDA US) in early 4Q22.
- Stock is unlikely to rally before more clarity on inventory situation improvement, but well supported by net cash (5.4 HKD) and high interim dividend (11.4%).
Raccoon: Maintaining COVID Momentum
- While its peers in Japanese e-commerce are losing momentum, Tokyo-listed B2B e-commerce company, Raccoon Holdings, Inc. (3031 JP) continues to march forward from the COVID elevated levels.
- With the advertising cost no longer growing at the same rate as before, we expect around 60% upside to Raccoon’s FY+2 consensus OP of ¥1.6bn.
- This would put Raccoon on 9.5x FY+2 OP with an OP CAGR of close to 50% and seems reasonably cheap in our opinion.
Bilibili (9626 HK): 2Q22 Preview, Still Grew Rapidly, Will Reduce Loss
- In 2Q22, we believe revenue will grow fast, especially for value added service and advertising.
- We believe operating loss will shrink, but far from making profit.
- We believe the stock has an upside of 18% for the end of 2023.
Burning Rock Biotech (BNR US): Despite Q2 Results Missing Consensus Management Reiterated Guidance
- Burning Rock Biotech (BNR US) has announced Q2 results. Despite the negative impact from COVID-related restrictions in China, revenue increased 3% y/y to RMB130.8 million, driven by pharma R&D service.
- Gross margin deteriorated due to unfavorable revenue mix and inventory write down. Even upon this, operating expenses grew 19%, thereby widening net loss to RMB262.1 million.
- Encouraged by ongoing business volume recovery, management has reiterated full-year 2022 revenue guidance of approximately RMB620 million, indicating H2 2022 revenue of RMB354 million, which represents 29% y/y growth.
China Comm Const (1800 HK): Key Takeaways from Post-1H22 Call
- China Communications Construction (1800 HK) should see positive new contract momentum in 2H22. We also expect softening in cost pressure to bring about better margin.
- It is actively looking to recycle and realise the value of its assets and good progress are expected in 2H22. Such moves will narrow the currently deeply discounted 0.18x P/B.
- With order backlog amounting to 4.6x of annualised 1H22 revenue, earnings prospects are well secured, making its FY22F PER of 2.6x and FY23F of 2.3x very cheap.
SCBx – Positive Strategy Development
- The decision to not invest in BitKrub, crypto currency exchange, is highly positive
- Net interest margins are rising, with better loan yields, stable deposit costs
- Stage 2 loan decline is substantial, positive for future NPL outlook
Intel Vs. TSMC/UMC Long/Sort Monitor: Take-Aways from DB Conference & Fireside Chat
- On August 31st, Intel’s GM of Data Center & AI spoke at Deutsche Bank’s Technology Conference. On the same day, another executive spoke at Arete Research’s fireside chat.
- Q2 and Q3E should be the bottom for the business, implying a rebound in Q4. Consensus estimates a similar trend; the latest comments are a confirmation of Q2 results guidance.
- We see opportunities for positive news flow in September and Q3 results, as Intel could make key product announcements and guide for Q4 to be a turnaround.
Crowdstrike FY2Q23: FY2Q23: Not Just Endpoint, Identity and SIEM Accelerating Too
- Crowdstrike continues to gobble up share, printing another strong beat and raise, with ARR now at $2B, the second fastest software company to hit that mark.
- EBIT margins up 800bps YoY, TTM FCF Margins 30%…profitable growth at Scale.
- 13x forward P/S for a unique software asset with long runways for 40%+ growth and multi-module driven margin expansion with a 15% pullback in the past week despite earnings.
PRM : Excited Fleet Expansion Plan
- Maintain HOLD recommendation for PRM but raised target price to Bt6.60 (Previous TP: Bt6.30) after revised earnings up by 16-25% in 2022-23E. We are positive toward 2H22 fleet expansion plan
- 2Q22 core profit dropped QoQ and YoY Report 2Q22 net profit at Bt199m. Excluding FX item,core earnings would be at Bt262m (-38%YoY -2%QoQ) YoY drop was due to high base
- Core revenue hit all-time high at Bt1.7bn along with fleet expansion(59 vessels as of 2Q22)and an increase in transportation volume for domestic trading business (45% of total revenue in 2Q22)
Sany Profit Falls 73.85% as Demand for Construction Gear Dries Up
- Sany Heavy Industry, one of China’s largest construction machinery makers, reported a plunge in first-half profit as slower growth and Covid restrictions reduce demand for building equipment.
- Revenue fell 40.9% to 39.7 billion yuan ($5.76 billion) for the first six months of 2022, the company said Tuesday. Net income plummeted 73.85% to 2.63 billion yuan.
- Excavators are Sany’s core product. In the first half, the company’s excavator sales declined 35.6% year-on-year to 16.7 billion yuan
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