In today’s briefing:
- Perfect Medical: Double From Here, Recovery, 8% Div Yield, and 20+% CAGR Growth
- Pinduoduo (PDD US): Spectacular 3Q, Tough Outlook
- ASEAN Utilities: From Tap To Socket
- Bumrungrad Hospital Pub Co (BH TB): Robust International Business Push Revenue Above Pre-COVID Level
- 90: Adventures In Accounting: Triumph Bancorp ($TBK) Charge-Off Analysis
Perfect Medical: Double From Here, Recovery, 8% Div Yield, and 20+% CAGR Growth
- Perfect Medical Health (1830 HK) showed a resilient set of numbers for H1 2023, with profits down only 30% despite losing a month in HK and more in China.
- With over 700 mn HKD in cash (18% of market capitalization), PE of 12.4x FY23e/8.5x FY24e, and dividend yields of 8.5%FY23e/12.4%FY24e it trades on an exciting yield/valuation.
- Catalysts for the company include the reopening of China (>20% of revenue), the recovery of HK(70% of revenue), and expansion into newer business lines and geographies.
Pinduoduo (PDD US): Spectacular 3Q, Tough Outlook
- PDD’s spectacular 3Q results will prove unsustainable based on our assessments of its core markets and deep-dive benchmark analysis of growth trajectory of PDD and Alibaba, using GMV as scale.
- We see earnings risk going into 2023 due to well-penetrated wallet share of core user base, deflating growth drivers and ramp-up of investments.
- In the long term, inevitable multiple compression also renders the risk-return payoff of this US$100bn company mediocre, even under blue-sky growth forecasts. Prefer Alibaba over PDD.
ASEAN Utilities: From Tap To Socket
- This insight covers 68 ASEAN utilities, each boasting a market cap greater than US$500mn.
- Countries covered include Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Vietnam.
- Intouch Holdings (INTUCH TB) remains highly elevated, and is a short against Advanced Info Service (ADVANC TB), and perhaps with some Singtel (ST SP).
Bumrungrad Hospital Pub Co (BH TB): Robust International Business Push Revenue Above Pre-COVID Level
- Bumrungrad Hospital Pub Co (BH TB) is seeing continued business recovery. Robust inflows of international business and solid Thai and expat revenue lifted hospital revenue 20% higher than pre-COVID level.
- Sustained high volumes of inquiries and appointment requests remain a strong forward indicator. Bed availability is expected to increase in 4Q after the completion of latest phase of renovations.
- Net profit margin reached to a record high of 26.2% in 3Q. Favorable payor mix, cost management, continued discount reduction, and economies of scale should further drive margin gains.
90: Adventures In Accounting: Triumph Bancorp ($TBK) Charge-Off Analysis
- Included in bank earnings is a provision for loan losses.
- In a perfect world, management would know exactly which loans would go bad and how much money they would lose on those loans.
- In reality, estimates are required. Like insurance companies, banks typically apply a statistical model based on the risk rating classification of their loan book plus any specific reserves.
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