In today’s briefing:
- Asahi Intecc (7747 JP): Recovery From COVID-19 to Drive Double-Digit Revenue Growth in Near-Term
- Angelalign Technology (6699.HK) – There Is Still Plenty of Downside, but Limited Upside Potential
- Lonking (3339 HK): Not Out of the Woods Yet
Asahi Intecc (7747 JP): Recovery From COVID-19 to Drive Double-Digit Revenue Growth in Near-Term
- Asahi Intecc (7747 JP) reported 27% y/y revenue growth during first nine months of FY22. For full-year FY22 and FY23, the company expects 22% and 11% revenue growth, respectively.
- The company targets a consolidated revenue of more than ¥100 billion in FY26 through continued growth in the existing business and introduction of new business.
- Asahi Intecc enjoys dominant market share in PTCA guide wires in major global markets. The company’s direct distribution strategy is further expanding its market share.
Angelalign Technology (6699.HK) – There Is Still Plenty of Downside, but Limited Upside Potential
- Due to pandemic/lockdown/economic downturn, the case shipments could further decline. Our revenue forecast this year is below 20%, or even below 15%. We also lowered our forecast on profit margins.
- Limited qualified orthodontists in China and challenging internationalization cast doubts on Angelalign’s long term growth prospects. We can’t see high growth potential of Angelalign with certainty.
- Angelalign’s performance in 2022 would be under pressure. Although PE/TTM reached about 73 by the end of June 10 after corrections, it’s still overvalued. The upside potential could be limited.
Lonking (3339 HK): Not Out of the Woods Yet
- Share price of Lonking Holdings (3339 HK) has seen muted reaction to weak industry figures recently but it is still unexciting in near-term, based on our catch-up with the company.
- It has underperformed industry sales volume in 5M22 across all product categories, with that for wheel loader behind 4pp and excavator by 10pp. Forklift sales were down 18% YoY.
- Both gross margin and investment income are set to contract in this year, making it highly likely to see significant earnings downgrade after 1H22 result announcement in Aug.
Related tickers: Asahi Intecc (7747.T), Angelalign Technology (6699.HK), Lonking Holdings (3339.HK)
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