In today’s briefing:
- Taiwan Dual-Listings: TSMC Normalizes; UMC, ChipMOS Compelling Discounts
- [Alibaba (BABA US) Target Price Change]: No Growth in March Promotion, Cut TP to US$100
- Bukwang Pharmaceutical (003000 KS): High R&D Cost Put Pressure on Profit; Pain to Continue in Future
- Heavy Lifting
Taiwan Dual-Listings: TSMC Normalizes; UMC, ChipMOS Compelling Discounts
- United Microelectronics ADRs trading at a discount, risk-reward appears compelling.
- TSMC has normalized; and reports are that it may launch a Singapore-based 12-inch semiconductor fab.
- ChipMOS discount still compelling; and we now have detailed coverage of the company.
[Alibaba (BABA US) Target Price Change]: No Growth in March Promotion, Cut TP to US$100
- Based on our recent checks, we expect that Tmall sales in the march promo were weaker-than-expected, especially in apparel and beauty make-up.
- Meanwhile, we maintain our prior forecast for Douyin’s overall eCommerce growth, and we expect that Douyin Mall’s share of Douyin eCommerce GMV is now higher than we previously estimated.
- We cut the GMV growth of Taobao and Tmall from 4.4% YoY to 1.4% YoY in FY24, and cut BABA’s TP to US$ 100, implying 12.6x FY23 PE.
Bukwang Pharmaceutical (003000 KS): High R&D Cost Put Pressure on Profit; Pain to Continue in Future
- Bukwang Pharmaceutical (003000 KS) has reported operating loss of KRW1.2 billion in 2022 due to the increased R&D cost, driven by the clinical progress of JM-010.
- Bukwang’s subsidiary, Contera Pharma, is developing JM-010 as a treatment for dyskinesia in patients with Parkinson’s disease. JM-010 is in phase 2 clinical trial in the U.S. and Europe.
- Bukwang has been aiming to list Contera Pharma to secure funds for clinical research, which has still not materialized. With current low-risk appetite, Contera Pharma IPO may not sail smooth.
Heavy Lifting
- The heavy equipment dealership industry, known for its lucrative opportunities, has consolidated significantly in recent years, with major players acquiring smaller dealerships.
- Alta Equipment, based in Michigan, has emerged as a beneficiary of this trend, expanding its geographic reach and gaining access to trained technicians, giving it a competitive advantage over smaller players.
- However, as the industry continues to consolidate, will Alta be able to maintain its momentum, or will it face challenges from larger rivals?
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