In today’s briefing:
- Good Morning Japan |SPX Holds After Brutal Week; Solid Durable Goods; Japan Post $9bn X-Share Unwind
- China Tourism and Hospitality Industry: A Year of Revenge
- Macau Recovery: Window for Value Buys on Casino Stocks Beginning to Close
- Crypto Mining Industry Series: Strong Start In 2023. Bitcoin Is Up ~40% YTD
- Weekly Stock Bullfinder – Week of 2/27
- China TMT Update(Feb.28): 700HK/SE/NTES/XPEV/9995HK – BYD Cut Prices for the Older Models
Good Morning Japan |SPX Holds After Brutal Week; Solid Durable Goods; Japan Post $9bn X-Share Unwind
- OVERSEAS. SPX Gains (barely) after a brutal week; Durable Goods Ex-Transport point to economic resilience; Beta/Growth> Value as Cyclicals rebound; JPM Quant Sees $50bn Selling if SPX breeches 3940
- JAPAN. NKY Futs +0.4% vs Cash; USDJPY 136.2; BOJ Gov Designate Ueda says no change to Easing for now; Japan Post Massive X-Share $9bn sale of Sub shares; Auto Upgrades
- NUGGETS NUGGET. Nidec’s E-Axle Future may rest with the Europeans, not the Chinese !
China Tourism and Hospitality Industry: A Year of Revenge
- With re-opening of borders, China’s tourism and hospitality industry should see encouraging earnings outlook over the next two years; and we are now only in the early stage of recovery.
- Online travel agencies and hotel and resorts operators including Tongcheng Travel Holdings (780 HK), H World Group (1179 HK), Trip.com (9961 HK) and Fosun Tourism (1992 HK) are well positioned.
- These companies all have sound business model, industry leadership position, solid competitive strengths, comprehensive customer coverage and, for some, meaningful global presence in their respective sub-sectors.
Macau Recovery: Window for Value Buys on Casino Stocks Beginning to Close
- Macau GGR forecasts for 2023 continue to be revised upward.
- Highest analyst call was for 2023 GGR of US$16b of baseline 2019. Morgan has now raised estimate to US$22b. Our call was US$18b.
- Speedier build of premium mass and mass segments than anticipated before Beijing lifted zero covid is clearly ahead. Sector stocks not yet reflecting full price implications in our view.
Crypto Mining Industry Series: Strong Start In 2023. Bitcoin Is Up ~40% YTD
- Bitcoin could find the bottom and strongly rebounded in 1Q23. We believe BTC mining companies could be sellers of crypto assets on strong bounce and limit room for further upside.
- Our bear case scenario assumes an average BTC price of $25K in 2023 with an opportunity to reach as high as $30K. Leading crypto miners began to offload Bitcoin holdings.
- Investors should be more selective on the crypto miner names during a prolonged bear market. Our top picks include Marathon Digital Holdings, Riot Blockchain, and Cipher Mining.
Weekly Stock Bullfinder – Week of 2/27
- After briefly dipping down to around 4.25%, last week saw a new cycle high for the closely followed 2 year Treasury yield breaking through the 4.8% level and ending the week at 4.814%.
- This came off the back of continued unfavorably strong inflation and spending data from economic reports issued over the past few weeks (Core PCE, retail sales, GDP, PPI, etc.).
- With the earnings yield on the S&P 500 is 4.68%, the equity risk premium on the S&P 500 (estimated earnings yield less 10yr treasury yield) is now the lowest since late 2007.
China TMT Update(Feb.28): 700HK/SE/NTES/XPEV/9995HK – BYD Cut Prices for the Older Models
- XPEV: BYD cut prices for the older models of its Dynasty series (-)
- 700HK/SE/NTES: <Undawn> performance lower than expectation (-/-/+)， hence we cut our estimation of annual gross billings of the game
- 9995HK: Daiichi Sangyo/Astra Zeneca’s ADC blockbuster DS8201 (Enhertu) approve by NMPA… Impact to Remegen is material in the long run (-)
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