In today’s briefing:
- Zydus Lifesciences (ZYDUSLIF IN): Strong Start of FY24 Riding on US Formulation Business
- KS (Kuaishou 1024 HK): 2Q23, First Net Profit Since IPO, Growth Accelerated, Buy
- Ping An Insurance – Dramatic Worsening Key Areas, Big Bank Exposure, Macro Insurance Stats Are Poor
- Dollar General (DG-US) – It’s a trap!
- SHK 86_HK: Dividend Yield 8.5%, P/E 1.96x, P/B 0.25x
- ClouDr Group (9955.HK) 23H1 – Turning Losses into Profits Is Within Reach
- IQIYI (IQ US): Embracing Moderate yet Stable Growth
- Kolte Patil: Strong Growth Momentum Continues from FY23
- Sekisui Chem (4204) | Potential of Perovskite PV
- OMG: Wide Gold Zones Continue to Fill Gaps in Resource
Zydus Lifesciences (ZYDUSLIF IN): Strong Start of FY24 Riding on US Formulation Business
- Zydus Lifesciences Ltd (ZYDUSLIF IN) recorded 30% YoY growth in revenue to INR51B in Q1FY24, driven by 57% YoY growth in US formulation business. India business revenue grew 6% YoY.
- US business growth was driven by new product launches and improvement in base business. The company has launched four new products in the US during the quarter.
- Zydus Lifesciences expects double-digit growth in India branded formulation business to continue and the U.S. business to grow on a formidable base of FY23 going forward.
KS (Kuaishou 1024 HK): 2Q23, First Net Profit Since IPO, Growth Accelerated, Buy
- The total revenue growth rate accelerated significantly to 28% YoY in 2Q23.
- The high-margin businesses grew more rapidly than the low margin business.
- Gross Merchandise Value and Active user base still increased strongly.
Ping An Insurance – Dramatic Worsening Key Areas, Big Bank Exposure, Macro Insurance Stats Are Poor
- There is considerable worsening in net profit, including from key divisions
- Despite rising assets for Health and Life, profit in this core division is down a lot
- Banking exposure is significant, with a poor outlook, and making Ping An less pure
Dollar General (DG-US) – It’s a trap!
- After spectating DG for some time, I bought a small starter position in June. It is not often that you get a chance to buy a compounder like this 35% from its highs.
- Historically it has paid to buy the dips on DG, so I figured I would buy now and ask questions later.
- This time it has not paid, at all. My average was ~$185 and I sold my stock last monday at $168. I know that some of my subs also follow the stock so I thought I would collect my notes and write up a few paragraphs.
SHK 86_HK: Dividend Yield 8.5%, P/E 1.96x, P/B 0.25x
- Despite Headwinds Revenue Remains Relatively Stable at HK $1,968 million
- For 1HFY2023–Total Buyback of 0.77 million shares (HK$2.3 million) at average price of $2.99
- Stock at 0.25x tangible P/B and at 1.96x P/E on our FY2024 earnings estimate
ClouDr Group (9955.HK) 23H1 – Turning Losses into Profits Is Within Reach
- When we discovered that JD Health’s growth could face a downturn crisis, we hope to find a suitable substitute. ClouDr has such potential due to its good performance/reasonable business model.
- The current anti-corruption campaign could bring new opportunities to ClouDr, who can rely on “hospital first” strategy to take the upper hand, but it should be based on some prerequisites.
- ClouDr’s business is expected to keep strong growth momentum in 2023. The Company is expected to achieve breakeven in 2024. Investors could see good stock price performance at that time.
IQIYI (IQ US): Embracing Moderate yet Stable Growth
- IQiyi failed to give its share price a lift with stronger-than-expected 2Q results except for slight miss in paying subscribers .
- We believe that investors are expecting the end of its remarkable turnaround story and embracing a stable and moderate growth stage.
- While iQiyi trades at ~10x our FY23 earnings, the cheap valuation by itself doesn’t stand out among China internet peers as a group. We would wait for better entry points.
Kolte Patil: Strong Growth Momentum Continues from FY23
- Kolte Patil (KPDL) reported record sales velocity in Q1FY24 and is on track to achieve 25%+ sales value growth in FY24 as per its stated guidance.
- Business development activity is also happening at a record pace and Kolte Patil is on track to beat its prior FY24 guidance of INR 8000cr by a wide margin.
- Despite 80%+ rise in the share price since our coverage initiation 2Y ago, Kolte Patil still offers an upside potential of 25%+ IRR over a holding period of three years.
Sekisui Chem (4204) | Potential of Perovskite PV
- Perovskite solar cells have the potential to be more efficient and less expensive than traditional silicon solar cells.
- Recent research suggests that the global market for Perovskite PV could be worth around $12 billion in 2032
- If Sekisui Chemical were to take a 10% market share, then the potential impact on earnings could be 22%.
OMG: Wide Gold Zones Continue to Fill Gaps in Resource
- Today’s results highlight the strong continuity of high-grade along the Wenot Shear and the Company’s ability to efficiently fill wide gaps in zones which will be important for the upcoming resource update.
- The Company has completed 14 drill holes, totalling 5,235m.
- This morning, Omai Gold Mines Corp. (OMG:TSXV, OMGGF:OTC) announced additional drill results from the Omai gold project in Guyana.
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