In today’s briefing:
- SK Bioscience (302440 KS): Disappointing 2022 Result; Non-COVID Vaccines Are Key to Revival
- Memory Monitor: Latest Two Signals Show Inventory Problems Worsening; Long Micron Vs. Short Nanya
- BeiGene (6160.HK/BGNE.US) – Miracles Don’t Always Happen
- NEC (6701 JP): Positive Orders Trend, Lagging Share Price
SK Bioscience (302440 KS): Disappointing 2022 Result; Non-COVID Vaccines Are Key to Revival
- SK Bioscience (302440 KS) reported sluggish performance in 2022, with revenue and net profit declining 51% and 66%, YoY, respectively, due to the weakening demand of the COVID-19 vaccines.
- Although the company’s shingles vaccine is the leader in domestic market, it is facing new competition as an international player has launched a new shingles vaccine in Korea this year.
- SK Bioscience stopped production of its bread-and-butter earning flu vaccine to focus on COVID-19 vaccine, thereby losing market share to rival. Re-entering the market will not be easy.
Memory Monitor: Latest Two Signals Show Inventory Problems Worsening; Long Micron Vs. Short Nanya
- Signal #1 — Micron’s CFO warns that margins will be coming in lower than expected and inventories will remain elevated through FY2023E.
- Signal #2 — South Korea semiconductor inventories jump 28% MoM, 39.5% YoY.
- Implications for memory chip manufacturers: Biased to Long Micron vs. Short Nanya.
BeiGene (6160.HK/BGNE.US) – Miracles Don’t Always Happen
- It’s unrealistic to turn losses into profits by relying on BRUKINSA alone. BeiGene needs to have three blockbuster products with US$1 billion sales, which is difficult considering current pipeline situation.
- If investors are optimistic about BeiGene, to some extent, they are betting on the success of BeiGene’s model, but of course, they should also bear the corresponding risks and costs.
- BeiGene is overvalued, and its current market value has already priced in all positive factors. In this position, we think the risks far outweigh the benefits, because miracles don’t always happen.
NEC (6701 JP): Positive Orders Trend, Lagging Share Price
- Upward trend in new orders suggest that guidance is conservative.
- Long-Term prospects good with digitalization, 5G and optical-electronic technology for 6G.
- Lagging share price offers attractive valuations and 42% potential upside to previous high.
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