In today’s briefing:
- Travelsky (696): The Ignored Travel Stock of China
- Melco Resorts: Stock at a Buy Point Here with Forward Prospects in Macau, Manila and Soon Cyprus
- Long Acer Vs. Short Asustek: 6.9% Performance in One Week, Can REVERSE the Trade Again
- Acotec Scientific (6669.HK) – What Value Boston Scientific Will Bring Is Crucial to Future Valuation
- Jiangsu Expressway (177 HK): A Decent Play Even After Rally
- Taiwan Tech Weekly: PC Market Bottoming, AMAT, Quanta Outperforms Peers, Samsung Tesla Meeting
- Cisarua Mountain Dairy (CMRY IJ) – General Trade to Drive 2023 Growth
- Zai Lab (9688.HK/ZLAB.US) 2022/2023Q1 – The True Colors and the Risks Behind
- ASUS Q1’23 Revenues NT$ 102,376 Million,- 13% QoQ & -20% YoY. PC Segment to Grow ~20% in Q2’23
- Hon Hai Sees Computing Products Rebound, PC Market Bottomed; EV Expanding
Travelsky (696): The Ignored Travel Stock of China
- Travelsky Technology Ltd H (696 HK) is the IT provider for airports in China thus it should be one of the stocks to benefit from China’s reopening.
- Despite already operating at a profit, the share price is still lagging behind the other travel-related names that are still loss-making.
- Its operating numbers have already reached the 2019 level, a pre-COVID era, thus the opportunity to rebound is abundant.
Melco Resorts: Stock at a Buy Point Here with Forward Prospects in Macau, Manila and Soon Cyprus
- Melco shares have been hammered worse than peers during covid having fallen as low as a range ~US$4. Other factors contributed to downside, since eliminated.
- 1Q23 earnings release shows strong recovery arc in progress both in Macau and Manila.
- With two markets firing and a third ready to open we see an attractive entry point here.
Long Acer Vs. Short Asustek: 6.9% Performance in One Week, Can REVERSE the Trade Again
- Since we released our piece suggesting closing our original Long Asustek vs. Short Acer, and reversing to Long ACER vs. Short Asustek, this new trade has earned a 6.9% spread.
- Given the latest performance between the two shares and the latest results from Asustek, we believe one can now close out Long Acer/Short Asustek… and reverse the trade again.
- Hence we now like Long Asustek vs. Short Acer based on relative share performance and latest guidance from Asustek.
Acotec Scientific (6669.HK) – What Value Boston Scientific Will Bring Is Crucial to Future Valuation
- With the launch of new products and their accelerated admission to hospitals, Acotec’s revenue streams become more diversified, which would enhance its own risk resistance ability and core competitiveness.
- Considering market size/increasing competition, Acotec’s growth ceiling is obvious if relies solely on domestic market. It becomes crucial whether Boston Scientific’s acquisition would bring expected value or have other intentions.
- How much room for improvement in future valuation depends on Acotec’s performance in overseas markets. After all, if there is no internationalization breakthrough, Acotec’s valuation logic would not be reshaped.
Jiangsu Expressway (177 HK): A Decent Play Even After Rally
- We find good value in Jiangsu Expressway (H) (177 HK) – its 8.3x PER is cheap relative to 10.4% EPS CAGR and P/B multiple of 1.06x is below historical average.
- It has an extremely secured dividend stream for the next two years, yielding at least 6.3%. 1Q23 result showed a solid recovery, and potentially adding upside to earnings outlook.
- Key drivers are stronger traffic recovery, rise in contribution from clean energy, margin expansion through cost control and completion of new projects in the next two years.
Taiwan Tech Weekly: PC Market Bottoming, AMAT, Quanta Outperforms Peers, Samsung Tesla Meeting
- This week is relatively in terms of earnings. Applied Materials (AMAT US) will however be reporting on the 18th U.S. time.
- Hon Hai sees the PC market bottoming; Separately, we’ve closed our Long Acer vs. Short Asus and reversed it to Long Asus vs. Short Acer again.
- Quant shares have surged post results, dramatically outperforming Apple and other key Apple suppliers.
Cisarua Mountain Dairy (CMRY IJ) – General Trade to Drive 2023 Growth
- Cisarua Mountain Dairy booked a solid +25% YoY growth in sales in 1Q2023, with a flat performance from dairy from a high base but very strong consumer foods growth.
- Powdered milk prices and packaging costs have started to decline which will help to boost margins as the year progresses since Cisarua Mountain Dairy bought forward last year.
- Cisarua Mountain Dairy is an increasingly interesting consumer proxy catering to Indonesia’s middle classes but increasingly focusing on the less affluent mass market as it grows distribution in general trade.
Zai Lab (9688.HK/ZLAB.US) 2022/2023Q1 – The True Colors and the Risks Behind
- 2023 is a crucial year for Zai Lab.It’s the first time for Zai Lab to demonstrate the profitability of license-in model.If it fails, investors would lose confidence in the company.
- There is little correlation between the four commercialized products, which makes commercialization difficult and leads to low efficiency/high costs for sales team. So, breakeven could be more distant than expected.
- Zai Lab’s current pipelines are hard to make money. There are concerns whether its business model is sustainable in the long term. As its valuation lacks an “anchor”, risk is high.
ASUS Q1’23 Revenues NT$ 102,376 Million,- 13% QoQ & -20% YoY. PC Segment to Grow ~20% in Q2’23
- Q1’23 revenues of NT$ 102,376 million, down 13% QoQ and down 20% YoY
- Forecasting PC segment +20% but Components segment -5% QoQ in Q2’23
- Outperforming both peers & the market with >50% revenues now coming from gaming…
Hon Hai Sees Computing Products Rebound, PC Market Bottomed; EV Expanding
- In our view, Hon Hai 3Q23 results showcased stability for 2023E ahead of expected growth in 2024E-2025E.
- The company has maintained its 2025E 10% gross margin target and highlighted how its EV business expansion is continuing.
- While Consumer Electronics revenue is expected to fall this year, PC Products is expected to grow given the company believes the PC market has bottomed. Stay Long Hon Hai.
💡 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
