In today’s briefing:
- Overview of My Winners and Losers in 2022…And 5 High Conviction Ideas Going into 2023
- Good Morning Japan |Stocks (Finally) Catch a Break; Cyclicals Rebound; And..we Resume in 2023 !
- Payment Companies – 2022 in Review, Our High Conviction Calls for 2023
- China’s Export Outlook 2023: How Port, Shipping and Logistics Fare?
- Korea Biotech: A Pair Trade Between Celltrion Healthcare (091990 KS) And SK Bioscience (302440 KS)
Overview of My Winners and Losers in 2022…And 5 High Conviction Ideas Going into 2023
- The 2022 vintage of “5 High Conviction Ideas” had the weakest performance since 2017, with only China Shineway posting a positive return
- Olam, Rex and Starhub all declined approximately 16% in FY22
- Our 2023 vintage will hopefully perform better with 4 out of 5 favorites in the commodity space
Good Morning Japan |Stocks (Finally) Catch a Break; Cyclicals Rebound; And..we Resume in 2023 !
- OVERSEAS: SPX +1.5%. Reflex US Rally post recent sell-off. Energy, Industrials, Tech lead in the Beta rally; Cons Confidence BTE; Nike +12% rpt inspires; Micron -ve after hrs
- JAPAN: Futs flat vs Cash. USDJPY supported at ¥132 (for now); BOJ related/JGB rates aside dominate narrative; INBOUND tourists return; Decarb spend to accelerate; Debt rating D/G for Rakuten
- DAILY NUGGET: Yōkoso! Japan. The November tourist numbers saw a doubling MoM to 934,500 visitors. However, the Chinese visitors are not here yet. It likely takes some time…
Payment Companies – 2022 in Review, Our High Conviction Calls for 2023
- Once again, our shorts – especially Kakao Pay and Paytm – were more successful than our longs, given the protracted turbulent market conditions
- For 2023, we favour Visa in the card network megacaps, adding Wise to the buys and we stick with PagSeguro; we drop Nexi from the buy list
- Among our shorts, we stick with our negative view on DLocal, given its high take-rate and demanding valuations, and we stay negative on Kakao Pay due to its fundamental over-valuation
China’s Export Outlook 2023: How Port, Shipping and Logistics Fare?
- Weaker OECD demand, diversification of supply chain out of China, lesser room for Rmb depreciation and high base effects all suggest challenging export environment for China in 2023.
- We expect 5-10% drop in China’s export in next year, against consensus of 0.2% growth. Except ASEAN, exports to all major trading partners are already deep in negative in Nov.
- Long-Haul container shipping is the most disastrous, while port and logistics sectors are less vulnerable. We think SITC International (1308 HK) and Sinotrans (598 HK) will fare better than others.
Korea Biotech: A Pair Trade Between Celltrion Healthcare (091990 KS) And SK Bioscience (302440 KS)
- Here we present a pair trade idea on Korea biotech companies. Investors can accumulate Celltrion Healthcare (091990 KS) and short SK Bioscience (302440 KS).
- Celltrion Healthcare has a vast portfolio of biosimilars, which have dominant market positioning. The company is expanding geographical presence. US launch of Humira biosimilar is the major upcoming catalyst.
- SK Bioscience is a late entrant in the overcrowded COVID-19 vaccine market. The company has temporarily halted production of its COVID-19 vaccine due to falling demand.
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