In today’s briefing:
- Fast Retailing: Siding with Russia Could Be a Recipe for a Boycott
- India Channel Insight #28 | What Is the Two-Wheeler EV Scene in India?
- China High Speed Transmission (658): Hold for Long Term
- Upstart Holdings: Focus on the Share Buyback & Outstanding Growth of AI Driven Lending Platform
- Weibo (WB US): Solid 4Q21 Results; Winter Olympics to Bolster User Engagement
- Celltrion (068270 KS): Increasing Biosimilar Competition- Main Concerning Factor
Fast Retailing: Siding with Russia Could Be a Recipe for a Boycott
- It was reported yesterday that Uniqlo plans to continue doing business in Russia despite the Ukraine war situation.
- Fast Retailing (9983 JP)’s decision to continue doing business in Russia has not gone too well with some of its customers.
- If this leads to a fully blown boycott, the price impact could be significant as the company’s valuation remains towards the expensive side even after a 45% drop in valuation.
India Channel Insight #28 | What Is the Two-Wheeler EV Scene in India?
- We visit dealers of Honda Motor (7267 JP) , Hero Motocorp (HMCL IN) and TVS Motor (TVSL IN) to understand the current demand environment for Electric Vehicles(EV).
- High fuel prices and a very low base lead to high growth for EV OEMs
- Customers are waiting for launches from legacy players and a reduction in battery cost to decide the best alternative, but this is costing the overall 2W industry lower volumes.
China High Speed Transmission (658): Hold for Long Term
- Sold off in the market rout as it is a small-cap stock although growth potential is intact.
- Margin decreased but revenue increased followed by lower expenses to sales ratio.
- China High Speed Transmission Equip Grp (658 HK) build-up in inventories and increase in the account receivables reflect management’s confidence and action to prepare for a higher revenue growth.
Upstart Holdings: Focus on the Share Buyback & Outstanding Growth of AI Driven Lending Platform
- We believe that Upstart’s share price has been excessively oversold since October 2021. Since its highs in October 2021, Upstart’s share price has declined significantly by nearly 72%.
- The combination of buying back shares, more attractive valuations, and a much stronger sales growth than its peers is likely to result in Upstart outperforming the market this year.
- Our base case valuation of Upstart is implied market cap of $13.8 billion and target price of $165 per share, which is 47% higher than current share price.
Weibo (WB US): Solid 4Q21 Results; Winter Olympics to Bolster User Engagement
- Weibo Corp (WB US) reported a set of solid results for 4Q21; ad revenue (excluding Alibaba) has post robust 28% year-over-year growth and MAU remains healthy.
- Weibo is leveraging its competences to increase user engagement. Weibo video account has amassed 25mn users; Weibo Live’s DAU has grown 100% year-over-year.
- Weibo current valuation 10x forward P/E looks attractive; we expect 1Q22 user engagement will improve given that topics on Winter Olympics has already exceeded Toyko Olympics.
Celltrion (068270 KS): Increasing Biosimilar Competition- Main Concerning Factor
- Fierce competition is an industry-wide phenomena in biosimilar products. Despite being an early mover, Celltrion Inc (068270 KS) is also facing competition for its marketed biosimilars.
- The market share of Celltrion’s key biosimilar product, Remsima is declining. Other marketed and upcoming biosimilars also have multiple existing players.
- With the waning COVID-19 infections in the U.S., demand for Celltrion’s rapid test kits seems uncertain.
Related tickers: Fast Retailing (9983.T), Honda Motor (7267.T), China High Speed Transmission Equip Grp (0658.HK), Weibo Corp (WB.O), Celltrion Inc (068270.KQ)
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