In today’s briefing:
- Nagacorp: Cambodia Is Open, Covid at Low, Stock Attractive as Alternative to Macau Tourist Gamblers
- Hangzhou Tigermed Consulting (3347.HK/300347.CH) – The Business Model May Not Be a Safe Play
- ASE Holding (3711.TT): 1Q22 Results/ 2Q22 Outlook- The Hope Might Be in 2H22
- CIMC Enric (3899 HK): A Favourable Start
- VGI: Moderate Earnings Recovery with Growth Remain Promising
- PTTEP: Hedging Loss to Drag 1Q22 Net Profit
- SCC: Expect a Soft Start in 1Q22 Amid Cost Pressure
- TTB: So Far so Good
Nagacorp: Cambodia Is Open, Covid at Low, Stock Attractive as Alternative to Macau Tourist Gamblers
- We have long been bullish on Nagacorp Ltd. on long term fundamentals. We are now seeing rising positivity as market sentiment begins to recognize ASEAN covid recovery coming.
- Stock is at midpoint of 52 week range at HKD$6.97. Our 1 year target is HKD$10.425 based on what we see trending from its 1Q22 unaudited results.
- All revenue segments up: Morgan Stanley report agrees with our view that shares present an immediate opportunity due to potential in cross border gamblers and ASEAN mass.
Hangzhou Tigermed Consulting (3347.HK/300347.CH) – The Business Model May Not Be a Safe Play
- Despite solid growth in 2021, if seen from prior years, the revenue YoY growth rate and net profit YoY growth rate showed a state of divergence, which is “interesting”.
- Since half of Tigermed’s net profits were from investment income,it’s not logical to apply the valuation methods of traditional CXO to Tigermed. Its CRO and investment should be valued separately.
- The poor IPO sentiment, risk of recession and the domestic healthcare rational return would make investors reconsider if Tigermed’s “CRO + PE/VC business model” would be a safe play.
ASE Holding (3711.TT): 1Q22 Results/ 2Q22 Outlook- The Hope Might Be in 2H22
- ASE Holding revenue was NTD$144.4bn in 1Q22, which was 20.9% YoY and -16.5% QoQ. We expect the GM is 19.5% in 1Q22.
- ASE Holding could target at NTD$148.1bn/20.5% GM in 2Q22. We expect the gross margin of IC ATM and EMS portions are around 26.8%/9.1% respectively.
- We think it should be picking up since 2Q22 because of the seasonality, and it’s likely to peak out until 4Q22.
CIMC Enric (3899 HK): A Favourable Start
- Cimc Enric Holdings (3899 HK) has an encouraging 1Q22 with 24.9% revenue growth. If not the impact of the pandemic and lockdowns in Mar, growth would even reach 35.2%.
- Total new orders increased 23.2% in the quarter even in a period disrupted by lockdowns. Backlog stands at Rmb15.5bn, enough to fully cover FY22 revenue with 7% growth.
- Hydrogen energy business, though still small, witnessed 80.5% revenue growth. Good demand drives new orders to Rmb105.4m; and its backlog of Rmb180m equals to 5x of 1Q22 revenue.
VGI: Moderate Earnings Recovery with Growth Remain Promising
- We maintain BUY rating for VGI with the new target price of Bt6.20 (Previous TP: Bt6.50), derived from SOTP method or 50% premium to Thai media peers.
- We anticipate revenue streams from media and commercial space (recently started to manage by NINE),to retreat to 70% of the level we have seen during pre-pandemic by late 2QFY23 (July’22-September’22)
- The management revenue target in FY2023 at Bt6.5bn-7.0bn is fairly optimistic as we anticipate OOH media revenue to not recover that quickly.
PTTEP: Hedging Loss to Drag 1Q22 Net Profit
- We expect PTTEP to post 1Q22 net profit of Bt9.4bn (-18% YoY, -11% QoQ). Despite significant growth in sales volume and product selling price
- Excluding the one-time items, the recurring profit is expected to be Bt16.6bn (+228% YoY,-3% QoQ). YoY surge will be underpinned by a 11% growth in sales volume and a 25%
- Bright 2022 outlook from crude oil & gas price surge. We see the volatility to continue considering continued Russia-Ukraine war tensions, Reserve oil release by IEA members and COVID-19
SCC: Expect a Soft Start in 1Q22 Amid Cost Pressure
- Maintain BUY rating with a TP of Bt445.00 based on 13.7xPE’22E which is close to its 10-years trailing average.
- We foresee 1Q22 core profit to be the bottom quarter at Bt7bn (-53%YoY,-2%QoQ), pressured by tighter chemical spreads after naphtha price soared from higher oil price.
- We expect earnings recovery from 2Q22 onwards, following improve chemical spreads driven by prices catching up with rising costs, plus better CBM and packaging unit.
TTB: So Far so Good
- We reiterate our BUY rating with a target price of Bt1.60. Our BUY call reflects (1) steady growth ahead; (2) adequate reserves against new NPLs, and (3) compelling valuation.
- Net profit in 1Q22 came in at Bt3.2bn (+15% YoY, +14% QoQ) and was 13% higher than our expectation on lower-than-expected personal expenses.
- Asset quality was resilient. The NPL ratio decreased to 2.7% in 1Q22 and the loan loss coverage ratio was higher to 131.6% to cope with uncertainties ahead
Related tickers: NagaCorp Ltd (3918.HK), Hangzhou Tigermed Consulting (H) (3347.HK), Cimc Enric Holdings (3899.HK), VGI PCL (VGI.BK), PTT E&P (PTTEP.BK), Siam Cement (SCC.BK), TMBThanachart Bank (TTB.BK)
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