In today’s briefing:
- Japan Screen | A Treasure Trove of Value
- Ohayo Japan | This Week: Fed Hike in the Bag, All Eyes on BOJ; NUGGET: Top 5 Reasons We Like Sony
- Chinese Airlines: Taking off Again
- Philippine Move to Goverment Run Online Gaming Site Poses Potential Problems for Live Operators
- China TMT Update-PDD/BABA/CPNG/SE/BEKE/1211HK/TSLA/XPEV/LI/NIO-Temu Launches in South Korea
- Weekly Stock Bullfinder – Week of 7/24
Japan Screen | A Treasure Trove of Value
- Even with a strong Japanese equity market this year, there is still a treasure trove of ultra-low PBR stocks
- With the TSE pressuring companies to lift their ROE and valuations, and increasing activist engagement, value stocks should continue to perform
- From a universe of non-financial companies, with a market cap above ¥250 billion, we highlight some deeply undervalued opportunities – with better performance metrics
Ohayo Japan | This Week: Fed Hike in the Bag, All Eyes on BOJ; NUGGET: Top 5 Reasons We Like Sony
- OVERSEAS. SPX managed to rise +0.7%WoW, despite the Tech weakness last week; Fed and ECB on tap as both to lift rates by +25bps; Twitter/Musk exile the Blue Bird logo
- JAPAN. NKY Futures +1.2% vs Cash; USDJPY 141.7; The wild card this week is the BOJ- mounting speculation that there could be a tweak with Japan’s inflation above US.
- NUGGET. Top 5 Reasons We Like Sony: Dream team Mgmt; PS5; Crunchyroll; Tax-free spin-off; Image Sensors
Chinese Airlines: Taking off Again
- The underperformance of Chinese airlines looks unjustified to us, especially in view of the significant narrow-down in losses in 2Q23, particularly for Air China Ltd (753 HK).
- While domestic passenger capacity has fully recovered, international capacity is still more than 50% below Jun 2019. We anticipate its recovery will drive profitability over the next 12 months.
- We prefer Air China Ltd (753 HK) given its excellent leverage to international routes and exposure to Cathay Pacific Airways (293 HK). Its FY24F ROE of 45% is impressive too.
Philippine Move to Goverment Run Online Gaming Site Poses Potential Problems for Live Operators
- Pagcor, the government run casino operator in the Philippines has announced its entry into online gaming–it could be a blow to brick and mortr casinos.
- China is on record warning of Philippine illegal online sites “preying” on China citizens. Will this alter that attitude.
- Due to launch early next year we believe this move portends bearish implications for the key Entertainment Zone stock we currently rate as unervalued.
China TMT Update-PDD/BABA/CPNG/SE/BEKE/1211HK/TSLA/XPEV/LI/NIO-Temu Launches in South Korea
- PDD/ BABA/ CPNG/ SE: Temu launches in South Korea (+/-/-/-)
- BEKE: Comments on the rumors of lowering existing mortgage interest rates and loosening home purchase restrictions of 1st tier cities(/)
- 1211HK/TSLA/XPEV/LI/NIO: NDRC introduces measures to increase car consumption ( + )
Weekly Stock Bullfinder – Week of 7/24
- So far in 2023, mega-cap growth names such as Meta, Nvidia, Microsoft, and Netflix have continued to provide market leadership resulting in a 41% YTD gain in the QQQ ETF.
- However, last week saw notable rotation away from technology (XLK) to the healthcare, energy, and financial sectors.
- This came off the backs of notable technology heavyweights Tesla and Netflix earnings reports and investors selling off these names after their earnings prints this week.
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