In today’s briefing:
- Playmates Toys: Betting on Paramount’s New Teenage Mutant Ninja Turtle (TMNT) Movie
- Tokyo Electron (8035) | MAGIC Drivers
- Baidu (Bidu.US): AIGC to Bring More Potential and Empower Search Biz
- NTT (Buy) – Q3 22 Results Reaction: Mixed Quarter but Solid Mobile/Data Performance
- LVMH: Long-Term Winner
- The 2023 Box Office Looks Promising
- Bank Rakyat Indonesia (BBRI IJ) – Positive Vibes on Micro Growth and Reach
- Blue Bird (BIRD IJ) – Catching the Updraft in 2023
- PPIH – Consensus Is Discounting Personal Brands Potential
- Nayuki (2150 HK) Rating Change: Broaden Addressable Market Is Priority No.1
Playmates Toys: Betting on Paramount’s New Teenage Mutant Ninja Turtle (TMNT) Movie
- Playmates Toys (869 HK) has been listed since 2008 and makes TMNT toys. It has traded as high as 4 HKD/share on the back of successful TMNT movie launches
- Paramount is set to launch a highly anticipated Seth Rogen-produced, TMNT movie in August 2023. In 2013/2014 the stock went up 8x on the last successful TMNT movie launch
- Playmates Toys trades at negative enterprise value, hence giving a large margin of safety option to bet on the success of a TMNT revival
Tokyo Electron (8035) | MAGIC Drivers
- TEL 3QF23 operating profit -26% YoY to Y115b, beating analyst estimates
- Full year operating profit guidance revised up Y546->Y580b, ahead of Street estimates
- MAGIC – Metaverse, Autonomous mobility, Greentech, IoT, Communication Services – to drive long-term semicon demand
Baidu (Bidu.US): AIGC to Bring More Potential and Empower Search Biz
- We estimate that Baidu’s 4Q22 top line/bottom line would miss cons. by (1.6%)/(3.1%), mostly driven by the temporal disturbance of increasing COVID cases after reopening in Dec. 2022.
- However, we remain optimistic about 2023 outlook: 1) Baidu’s ads would be recovering quickly in 1H23 as macro improves, and 2) leading position in AIGC development gives Baidu more potential.
- Maintain BUY rating and raise TP to US$170, implying 17.2X PE in 2023
NTT (Buy) – Q3 22 Results Reaction: Mixed Quarter but Solid Mobile/Data Performance
- Segment results for DoCoMo and NTT Data were impressive as NTT plans to restructure both businesses start to bear fruit
- DoCoMo is also leading MNOs in moving past the impact of regulatory driven price reductions with Q3 service revenue largely flat YoY supported by 5G upsell and subscriber wins
- Rising utility costs have had a material impact on profitability for NTT East and West but management believes upside in other areas and cost discipline provides some offset
LVMH: Long-Term Winner
- LVMH’s sales’ growth is supported by a rebound in China, resumption of Chinese outbound travel, resilient US demand and higher marketing investments in 2H22 which should bear fruit this year.
- The Company holds leading market positions in each of its brands, as it benefits from substantial financial backing to invest and innovate.
- The Company has a high-quality management with decades of experience!
The 2023 Box Office Looks Promising
- The cinema industry has been suffering from COVID-19 restrictions, in particular social distancing measures that have kept cinema operating rates low.
- Now that the release pipeline looks strong again, cinemas will be on a path to recovery. I doubt that the global box office will reach the 2019 level this year, but it will get closer to that number.
- Cinema operators worth mentioning include North America’s Cinemark, Cineplex and Marcus Corporation, China’s IMAX China and Thailand’s Major Cineplex.
Bank Rakyat Indonesia (BBRI IJ) – Positive Vibes on Micro Growth and Reach
- Bank Rakyat Indonesia (BBRI IJ) did not disappoint with a strong set of FY2022 results, which came in around 4% above expectations, driven by strong micro and expanding NIMS.
- The bank also saw improving credit costs and declining provisions, which helped to drive profits and returns close to pre-pandemic levels plus the bank continues its advance on digitalisation.
- Bank Rakyat will drive growth through MSME lending, which now makes up 82.5% of loans, with micro and ultra-micro having significant upsides. Valuations are attractive on 2.1x FY2023 PBV.
Blue Bird (BIRD IJ) – Catching the Updraft in 2023
- Blue Bird is an iconic brand in Indonesia, where consumers take a BlueBird not a taxi, much like taking a Gojek, and in taxi terms, it embodies trust and reliability.
- The company had a tough time through COVID but is now firmly on a recovery track, with revenue per taxi in 4Q2022 20% above pre-pandemic levels, with more to come.
- Blue Bird (BIRD IJ) is a beneficiary of the tech winter in that ride-hailing companies are spending less on promotions, easing competition. Valuations are attractive in recovery.
PPIH – Consensus Is Discounting Personal Brands Potential
- Pan Pacific International Holdings (7532 JP)’s 2QFY23 was a touch above consensus with revenue at ¥504.8bn (consensus: ¥497.6bn) and OP at ¥33.6bn (consensus: ¥30.3bn).
- With consensus cautious about personal brands potential, earnings have beaten consensus in each of the past five quarters.
- Having already proven the personal brands earnings potential, we think it is unwarranted for consensus to discount PPIH’s personal brands growth.
Nayuki (2150 HK) Rating Change: Broaden Addressable Market Is Priority No.1
- Nayuki bears the most resemblance to Starbucks in that it owns its stores and provides drink, food and space, yet its appealed audience is the narrowest;
- Shopping mall opening might hit an all-time low in 2023 and is saturated. Nayuki need to think new ways to broaden its targeted market;
- We downgrade Nayuki to SELL and lower TP from HK$13.9 to HK3.1
💡 Before it’s here, it’s on Smartkarma
Sign Up for Free
The Smartkarma Preview Pass is your entry to the Independent Investment Research Network
- ✓ Unlimited Research Summaries
- ✓ Personalised Alerts
- ✓ Custom Watchlists
- ✓ Company Data and News
- ✓ Events & Webinars
