In today’s briefing:
- AMD Versus Intel. Spot The Differences?
- Good Morning Japan |SPX Reclaims 4000! NUGGET: Asahi Kasei-M&A Gone Bad, Writedown, Struggles Remain
- Japan Healthcare: Currency Benefit Seems to Be Fading; Focus Will Be on Underlying Business Strength
- Discount Drugstores Challenging Japanese Supermarkets
- MQG – Funding Squeeze?
- Banks Vs. Market: A Closer Look at Equity Risk Premia and Other Valuation Measures
- China TMT Update(Mar.22): 700HK/NTES/BILI/IQ/3659.JP /BGNE/9995HK/ZLAB – Foreign Game Codes(+)
AMD Versus Intel. Spot The Differences?
- AMD Q4 2022 revenues amounted to $5.6 billion, $100 million above the midpoint of the guided range, flat sequentially but an increase of 16% YoY.
- Intel Q4 2022 revenue amounted to $14 billion, at the very bottom of the guided range down 8% sequentially and down 28% YoY.
- Facing the same macro headwinds, AMD significantly outperformed Intel across a wide range of key metrics in 2022
Good Morning Japan |SPX Reclaims 4000! NUGGET: Asahi Kasei-M&A Gone Bad, Writedown, Struggles Remain
- OVERSEAS. SPX reclaims 4000 level with 2nd day of gains; 8/11 SPX sectors up as VIX collapses; Fed Decision Day on Wed-Expect No surprises; INTEL headwinds on China curbs
- JAPAN. NKY Futs +0.6% vs Cash; USDJPY 132. 4; Japan set to rally after the Spring transition break;US accepts Japan’s EV subsidy appeal=+ve auto parts; More inflation support from govt.
- NUGGET. Asahi Kasai – M&A Gone Bad, Writedown, Struggles Remain. Future profitability of the LiB Separator business in question.
Japan Healthcare: Currency Benefit Seems to Be Fading; Focus Will Be on Underlying Business Strength
- In 2022, JPY depreciated against USD to the lowest level in more than 30 years. This benefitted healthcare companies in Japan, which earn significant portion of revenues from the U.S.
- This year, Yen has started reversing its course and began to strengthen. With benefit of favorable Forex gradually fading, investors need to be selective in picking healthcare bets in Japan.
- We have discussed about five top picks from Japan healthcare sector. Domestic focused business, favorable industry tailwinds, and COVID recovery are the main investment thesis for the top picks.
Discount Drugstores Challenging Japanese Supermarkets
- Drugstores were already the fastest growing format before Covid and the health scare only improved their performance further.
- Several of the largest chains are now powerful players in food, using their non-food base to shake up the supermarket sector in ways that Japan has never seen before.
- Being price-led, inflation is only helping them along, with a much greater capacity to hold down prices than mainstream supermarkets.
MQG – Funding Squeeze?
- Funding squeeze evident in HK’s HIBOR market and reported in Australia too
- Even where not visible, this must be expected globally, as banks reign in risk
- MQG has low levels of deposits and high levels of securities
Banks Vs. Market: A Closer Look at Equity Risk Premia and Other Valuation Measures
- Unsurprisingly, the (required) equity risk premium on bank stocks has increased, but especially in the case of US banks, it is not at extreme levels.
- The forward P/E ratio of European bank stocks has dropped to distressed/recessionary levels, while the forward P/E of US bank stocks is ‘seriously low’ at 8.
- However, based on the Price-to-Book ratio, bank valuation is average. Given elevated contagion risks and increased regulatory scrutiny, bank stock valuation alone is insufficient to overweight the sector.
China TMT Update(Mar.22): 700HK/NTES/BILI/IQ/3659.JP /BGNE/9995HK/ZLAB – Foreign Game Codes(+)
- 700HK/NTES/BILI/IQ/3659.JP: The latest Foreign game codes released by NPPA, positive to gaming companies(+)
- BGNE/9995HK：Daiichi and Zymeworks end antibody pact after seven years (-)
- ZLAB：ZaiLab’s partner Karua’s Schizophrenia drug obtained positive Phase 3 data (+)
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