In today’s briefing:
- Tokyo Electron (8035 JP): Caught Out by a Decline in Sales
- LICHF: Earnings On Track To Beat Our Prior Projections
- Shockwave Medical Inc (SWAV US): Recovery from COVID Drove Q2 Sales; 2022 Revenue Guidance Raised
- Zhangzhou Pientzehuang Pharmaceutical (600436CH) 22H1- 2022 Is Stressful but Shares Will Bounce Back
- Kaken Pharmaceutical (4521 JP): Falling Revenue of Top-Selling Drugs Limit Near-Term Growth Prospect
- Result Flash Q2 2022: Keepers Holdings Stellar Headlines
Tokyo Electron (8035 JP): Caught Out by a Decline in Sales
- A sudden decline in sales led to a 30% sequential decline in operating profit in the three months to June. Year-on-year, operating profit was down 17%.
- Nevertheless, management left sales and profit guidance unchanged – despite cutting their semiconductor equipment demand forecast – and R&D and capital spending continue to rise.
- FY Mar-23 EPS guidance puts the shares on 13x earnings, but potential downside risk is considerable. Stand back while the economic recession unfolds.
LICHF: Earnings On Track To Beat Our Prior Projections
- With Q1FY23 PAT at INR 925cr+, LICHF is on track to beat our prior estimate of INR 3600cr+ for FY23 PAT.
- We now project that LICHF can do INR 3850cr+ PAT in FY23, implying that at the current market cap of INR 21,000cr, LICHF is trading cheap at <5.5x FY23 P/E.
- Credit cost for the quarter was slightly higher at annualized 0.5% of AUM, however, excluding slippages from the OTR book, it was in line with long-term average of around 0.2-0.3%.
Shockwave Medical Inc (SWAV US): Recovery from COVID Drove Q2 Sales; 2022 Revenue Guidance Raised
- Shockwave Medical Inc (SWAV US) had a solid Q2 across the board, with total revenue surging 116% y/y, driven by a 139% y/y jump in coronary products (73% of revenue).
- The company raised 2022 revenue guidance to $465–475 million (+96–100% y/y). Revenue guidance was raised for the second time this year.
- Shockwave shares gained 28% since I published bullish insight on the company on June 7. I believe further stream is still left.
Zhangzhou Pientzehuang Pharmaceutical (600436CH) 22H1- 2022 Is Stressful but Shares Will Bounce Back
- Due to the lockdown/pandemic, Pientzehuang Pharmaceutical’s 2022H1 performance slowed down. Considering the economic downturn and people’s cutting back spending on non-rigid consumption, the full-year revenue growth could be around 10%-20%.
- The Company’s key challenge lies in revenue growth. However, it is not easy to increase sales largely due to the scarcity of raw materials, which limits the expansion of production.
- Pien Tze Huang is overvalued. Share price could continue to fall,but it will bounce back due to its high moat. 2022 is a good time for bottom fishing this stock.
Kaken Pharmaceutical (4521 JP): Falling Revenue of Top-Selling Drugs Limit Near-Term Growth Prospect
- Kaken Pharmaceutical (4521 JP) is reporting declining revenue from its three largest selling products, due to NHI price revision. These products together contribute more than 60% of total revenue.
- The company’s newly launched products are growing at a rapid pace. However, the fastest growing product Ecclock contribute just 2% of total revenue.
- Kaken guided for just 1% y/y revenue growth and 12% y/y decline in operating profit in FY23. Due to pipeline expansion, R&D expenses are likely to remain elevated.
Result Flash Q2 2022: Keepers Holdings Stellar Headlines
- The Keepers Holdings, Inc. (KEEPR PM) reported solid growth in its Q2 2022 results, with 30% revenue growth YoY(%) and 44% profit growth ahead of our expectations.
- The stock trades at 4.5x PE ex-cash (with ~50% of the market capitalization in cash), making it a cheap discretionary consumption plays in the Philippines with good execution.
- Further catalysts include the potential for making an accretive acquisition. More to follow once the company has its investor call on Friday the 12th of August 2022.
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