In today’s briefing:
- Smartkarma Corporate Webinar | Taste Gourmet: Management Call on HK/China Reopening Impact
- Binjiang 3316 HK: More Room to Go, Results in March 2023 The Next Catalyst
- China Dongxiang (3818 HK): Extremely Deep Discount to Cash and Investments
- India Channel Insight #48 | SKF, Schaeffler, Schneider
- Alibaba(Baba.US/9988.HK) 4Q22 Preview: Raise TP for Margin Beat and Topline Recovery
- EVA Precision: Updates, Poised For a Rally
- Lawson: Underappreciated China Expansion & Expanding Domestic Profitability Warrants an Upside
- FUTU(FUTU.US) 4Q22 Preview: Solid Fundamentals Drive Long Term Growth
- JD(JD.US/9618.HK) 4Q22 Preview: Topline Reacceleration Could Happen in C2Q23
- Zai LAB (ZLAB.US/9688.HK)：TTF Is Not a Done Deal, Both China and Globally
Smartkarma Corporate Webinar | Taste Gourmet: Management Call on HK/China Reopening Impact
For our next Corporate Webinar we are glad to welcome Executive Chairman and Co-Founder, Kent Wong and CFO and Company Secretary, Gerald Yu. They will share a short company presentation after which, they will engage in a fireside chat with Smartkarma Insight Provider, Sameer Taneja. The Corporate Webinar will include a live Q&A session.
The Corporate Webinar will be hosted on Friday, 13 January 2023, 14:00 SGT.
About Taste Gourmet
Taste Gourmet Group Limited (8371 HK) is a Hong Kong based restaurant group offering a variety of cuisines under a portfolio of brands to a diversified customer base. Since the opening of its first restaurant in 2007, the group owned and operated a total of 34 restaurants offering Vietnamese, Japanese, Chinese, Western and Drink under 14 brands, comprising 11 self-owned brands such as La’taste Vietnamese Cuisine, Dab-Pa Peking & Szechuan Cuisine, Dab-Pa Peking & Szechuan Bistro, Dab-pa Modern Chinese Cuisine, Urawa Japanese Restaurant, Nabe Urawa, Rakuraku Ramen, Wasyohuya Yamaichi, Moments Together, Yakiniku Guu, San-Kinn; 3 licensed brands known as Parkview, Takano Ramen and Tirpse; and 1 joint venture brand known as Xianghui.
Corporate Webinars by Smartkarma Corporate Solutions feature discussions with IROs and Executives, discussing their companies, the challenges they face, and the opportunities in their sectors and markets.
Binjiang 3316 HK: More Room to Go, Results in March 2023 The Next Catalyst
- Binjiang Service Group (3316 HK) trades at 12.2x/9.5x FY22/23e with 32% of the market cap in net cash and a dividend yield of 5%/6.4% FY22e/23e (assuming a 60% payout).
- The company has asserted it will maintain its payout ratio at 60% and conserve cash for M&A. Its approach will be conservative and involve lengthy due diligence.
- With an improving market environment and good results around the corner in March, we believe a rally to 30 HKD/share is within the realm of possibility.
China Dongxiang (3818 HK): Extremely Deep Discount to Cash and Investments
- With the recent rally in the equity markets in Hong Kong and China, we think the asset play investment thesis for China Dongxiang Group Co (3818 HK) has revived.
- We estimate its investment portfolio value may have increased by HK$2bn since end-Sep, yet market capitalisation only rose HK$500m, suggesting still significant 77% discount.
- Encouraging recent developments at Alibaba Group (9988 HK) and Ant Financial, which both are its holdings, are positive. The reduction is losses for sportswear business is an added driver.
India Channel Insight #48 | SKF, Schaeffler, Schneider
- We interacted with channels associated with SKF India Ltd (SKF IN) , Schaeffler India (SCHFL IN) & Schneider Electric Infrastructure (SCHN IN).
- Sector tailwinds, market share gain ability and changing consumer preferences are all working in place for growth ahead.
- SCHFL stands out in terms of growth and margins, SCHN’s channel feedback and recent performance in encouraging.
Alibaba(Baba.US/9988.HK) 4Q22 Preview: Raise TP for Margin Beat and Topline Recovery
- We expect BABA’s revenue in C4Q22 to be in line with cons., non-GAAP net income to beat cons. by 6%, supported by cost reduction in Freshippo, Taocaicai and Taobao Deal.
- Affected by logistics disruption and rising infections, we estimate BABA’s GMV and local consumer service in C4Q22 to decelerate compared to C3Q22. Both segments are to recover in C1Q23.
- We raise TP from US$110 to US$130 to reflect upsides from rebound of discretionary demand, slowing Douyin eCommerce growth, and easing regulatory environment. Our TP implies 13x PE in FY2024.
EVA Precision: Updates, Poised For a Rally
- Eva Precision Industrial Holdings (838 HK) has come off its lows but still trades at an attractive 7.8x/5x PE FY22e/23e and a dividend yield of 3.8%/5.9% FY22e/23e (assuming 30% payout).
- The auto business should be propelled forward by orders from EV stalwarts, BYD, Nio, Tesla, etc. We expect the auto business (30% of revenue) to grow 50% in 2023.
- Another two catalysts we look forward to are the split of the auto business to unlock value and the completion of the buyback announced by the company in 2022.
Lawson: Underappreciated China Expansion & Expanding Domestic Profitability Warrants an Upside
- Lawson’s Q3 OP of ¥16.2bn was around 20% above consensus suggesting that the company’s profitability is starting to outperform after being held back by upfront investments on store renovations.
- Although this is the 3rd beat in a row, Lawson Inc (2651 JP)’s guidance has remained unchanged and the consensus OP only saw a marginal improvement.
- After ignoring for so long, we think investors could soon start noticing Lawson’s growth prospects in China as the business there is starting to turn profitable.
FUTU(FUTU.US) 4Q22 Preview: Solid Fundamentals Drive Long Term Growth
- We expect FUTU to post C4Q22 revenue and non-GAAP net income 6.4% and 16.0% above consensus, driven by the improved turnover rate in HKEX and the rising interest rate.
- We believe the recent regulation measures has little impact on FUTU’s adjusted expectations now widely held by investors. We expect revenue growth to reaccelerate at 37%/31% YoY in 4Q22/2023.
- Maintain BUY to FUTU and raise TP by US$1 to US$51.
JD(JD.US/9618.HK) 4Q22 Preview: Topline Reacceleration Could Happen in C2Q23
- In C4Q22, we expect JD’s total revenue to grow 8% YoY, largely in line with cons. Non-GAAP net margin is expected to reach 2.0%, up 0.7ppt YoY.
- We estimate JD’s GMV growth in C4Q22 to be ~7% YoY, slightly slower than C3Q22 due to logistics disruption in October and November.
- Maintain BUY rating and raise TP to US$70.0 due to for acceleration in top line as well as margin improvement. Our TP implies 23x P/2023E.
Zai LAB (ZLAB.US/9688.HK)：TTF Is Not a Done Deal, Both China and Globally
- ZaiLab and NovoCure (NVCR US, NR) surged on positive readout of Optune’s Phase III on Non-Small-Cell-Lung Cancer (NSCLC), a major indication win after the smaller ones in Glioblastoma and Mesothelioma.
- We, however, caution that the readout is largely expected and Optune faces uncertainty in commercialization both globally and in China;
- We raise TP to US$35 to reflect possible readouts in other cancer types
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