In today’s briefing:
- Mercari (4385 JP) | Time to Flee
- China Power International (2380 HK): Moving in the Right Direction
- GC Cell (144510 KS): Enviable Portfolio of Cell Therapy Funded by Sample Test Service Business
- IRay Technology (688301.CH) – Limited Market Space Casts Doubt on Future Growth Potential
Mercari (4385 JP) | Time to Flee
- Topix inclusion could generate some solid domestic passive buying interest, but we think the fundamentals remain Bearish
- Mercari’s GMV growth in Japan is slowing sharply. We see higher promotional costs impacting margins as competition with PayPay Flea market heats up
- We think that street estimates are too high and we don’t see a reason why the stock should be trading at substantial premium to Z Holdings
China Power International (2380 HK): Moving in the Right Direction
- We think the underperformance of China Power International (2380 HK) (CPI) against the market in this year is unjustified given a projected improvement in profitability.
- CPI has secured coal supply with more than 60% of contracts on annual long-term basis within the benchmark price range. Also, power tariff is expected to be on an uptrend.
- The proposed new management incentive scheme will better align management’s and shareholders’ interests. CPI also indicated good room to lower leverage in this year while sustaining growth.
GC Cell (144510 KS): Enviable Portfolio of Cell Therapy Funded by Sample Test Service Business
- Green Cross LabCell (144510 KS) (now known as GC Cell) the world’s largest cell therapy product producer with its top selling anticancer drug, Immunecell-LC. The drug has label expansion scope.
- The company has developed a pipeline of late and early-stage cell therapy candidates for solid tumors. It also has a strong position in global cell therapy CDMO business.
- GC Cell’s unrivaled position in the specimen test services in Korea acts as the main cash cow to feed its future growth engine of cell therapy development.
IRay Technology (688301.CH) – Limited Market Space Casts Doubt on Future Growth Potential
- IRay’s performance has shown a trend of accelerating growth in 2021/2022Q1, mainly driven by the mobile DR sales during COVID-19 as well as the dental (CBCT) and industrial security businesses.
- The sales of mobile DR would slow down after COVID is under control. The decreasing price due to fierce competition in grassroots markets would finally drag down gross profit margin.
- The concern is that the market space (DR/dental/industrial fields) is not big, with obvious growth ceiling. So, we lowered our revenue/profit margin forecast and we think iRay is overvalued
Related tickers: Mercari Inc (4385.T), China Power International (2380.HK)
Before it’s here, it’s on Smartkarma
