In today’s briefing:
- Trip.com (TCOM US, 9961 HK): Revenue 30% Above Pre-COVID Level
- Max Healthcare (MAXHEALTH IN): New Hospital Acquisition Expands Footfall in a New Populus City
- Rohm (6963 JP): Government Subsidy for Power Device Project with Toshiba
- Japan Airport Terminal (9706 JP, SELL, TP: JPY5,364): Weak JPY Can’t Overcome Fundamental Challenges
- China Consumption Weekly (11 Dec 2023): BYD, NIO, Meituan, Alibaba, Tencent
- Pioneer Credit Limited – Growth Step-Up and Additional Finance
- Shenzhen Intl (152 HK): Another Monetisation
- Shijiazhuang Yiling Pharmaceutical (002603.CH) – Valuation Rebound Is Worth Looking Forward To
Trip.com (TCOM US, 9961 HK): Revenue 30% Above Pre-COVID Level
- Travelers increased by 75% YoY and traveling spending increased by 144% YoY in China in 9M2023.
- TCOM’s total revenue rose by 31% in 3Q23 over 3Q19 before COVID.
- We conclude an upside of 33% and a price target of US$43.70.
Max Healthcare (MAXHEALTH IN): New Hospital Acquisition Expands Footfall in a New Populus City
- Max Healthcare Institute (MAXHEALT IN) has entered into a share purchase agreement for acquisition of a 550-bedded Sahara Hospital in Lucknow, Uttar Pradesh for an enterprise value of INR9.4B (~$113M).
- The Hospital currently serves ~2 lakh patients every year, with FY24 revenue run rate of INR2B. It has a renowned center of excellence for Neurosciences.
- The Hospital has a potential to quickly ramp up beds in existing building and expand medical programs such as oncology, transplants, robotics, etc.
Rohm (6963 JP): Government Subsidy for Power Device Project with Toshiba
- Rohm’s share price was up 6% on Friday, December 8, on the news that the Japanese government will subsidize its collaboration with Toshiba in power semiconductors.
- The subsidy will amount to one-third of the ¥388.3 billion yen the two companies plan to invest in Silicon Carbide and Silicon devices for the electric vehicle and other industries.
- Rohm hit bottom on October 31, management cut FY Mar-24 guidance on November 1 and the market is now looking to recovery. Toshiba will be delisted on December 20.
Japan Airport Terminal (9706 JP, SELL, TP: JPY5,364): Weak JPY Can’t Overcome Fundamental Challenges
- Japan Airport Terminal Co (9706 JP) (JAT) has turnaround and set to resume its earnings growth trajectory thanks to Japan’s brisk air traffic recovery
- However, future growth is increasingly challenging as domestic traffic stalls, and international traffic growth relies on inbound tourists. What happens if tourists decide to go elsewhere?
- Target price JPY5,364 (18% DOWNSIDE) based on 12.7x FY2024 EV/EBITDA (peer group average). SELL, grossly overvalued, Mexican and Chinese airports are far more attractive
China Consumption Weekly (11 Dec 2023): BYD, NIO, Meituan, Alibaba, Tencent
- BYD offers a reward up to RMB5 million for reporting defamation.
- NIO denied further layoff after releasing the 3Q23 results with both revenue and loss increasing significantly.
- Meituan’s GMV of live broadcasting food delivery reached RMB2 billion.
Pioneer Credit Limited – Growth Step-Up and Additional Finance
- Pioneer Credit Limited (ASX:PNC) is one of the leading acquirers and managers of impaired credit in Australia and has gained its status by maintaining positive customer engagement, an unblemished compliance record with ASIC, and strong relationships with Australia’s largest bank and non-bank lenders.
- PNC purchases debt from 18 different Australian vendor partners with long-term partnership purchasing arrangements in place with Commonwealth Bank of Australia (ASX:CBA).
- The company’s AGM updates highlighted the strong position PNC occupies in the marketplace and the expected improvement in NPAT following debt refinancing currently in progress.
Shenzhen Intl (152 HK): Another Monetisation
- The REIT issuance of the Hangzhou and Guizhou logistics assets of Shenzhen International (152 HK) has entered the final stage, reflecting its ability to realise asset values.
- We estimate SZI may book gain of around Rmb300m in 2H23, or more likely 1H24, and this will support good HoH and YoY rebound in its earnings.
- These assets only accounted for 8% and 5% of SZI’s total portfolio area and value, respectively, suggesting there is still immense room for capital gain from its remaining assets.
Shijiazhuang Yiling Pharmaceutical (002603.CH) – Valuation Rebound Is Worth Looking Forward To
- Now that the pandemic has passed, Yiling’s performance has to face a sharp decline due to the high base before, but in our view, the situation is not so bad.
- According to the management,sales of cardiovascular and cerebrovascular products would gradually increase to make up for the sales decline of Lianhua Qingwen, which would still be higher than pre-pandemic level.
- About 15-20% performance growth is still reachable in the future. PE of 20-30 is a reasonable range for Yiling. Being included in CSI 300 Index helps to improve the liquidity.
💡 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
