In today’s briefing:
- Nissin Food Co (1475): Wheat Price Increase Erodes Margin
- Chugai Pharmaceutical (4519 JP): Key Drugs Are Facing Competition; 2022 Target Seems Aggressive
- Shangri-La Asia (69 HK): Let’s Go, What Are You Waiting For?
- Silergy (6415.TT): In 2022, the Company Should Aim at Growing Above 30%.
- Eyebright Medical Technology Beijing (688050.CH) – Some Points Worth the Attention
Nissin Food Co (1475): Wheat Price Increase Erodes Margin
- Nissin Foods (1475 HK) is an HK and China play on the instant noodle that is a highly preferred necessity during the lockdown.
- Wheat is a major raw material for noodles and the Russian invasion of Ukraine has driven the wheat price higher.
- So far, Nissin Food Co’s share price has held up and outperformed Hang Seng but Indofood CBP Sukses (ICBP IJ) could provide a reference. Short.
Chugai Pharmaceutical (4519 JP): Key Drugs Are Facing Competition; 2022 Target Seems Aggressive
- Chugai Pharmaceutical (4519 JP) shares declined 2% since we published our bearish note on the company in December. We remain bearish on the name.
- Chugai is betting big on Actemra, Hemlibra, and Ronapreve for achieving 2022 revenue target. However, these have bleak outlook due to competition and uncertainty regarding COVID-19 prevalence globally.
- Chugai does not have any big launches expected this year. Pipeline has less visibility for compensating the revenue loss from the patent expired products.
Shangri-La Asia (69 HK): Let’s Go, What Are You Waiting For?
- Given significant presence in China, Shangri-La Asia (69 HK) is geared towards China’s more accommodative COVID policy. The good thing is that the share price has not yet reflected this.
- Over the next 12-18 months, SLA will first benefit from tourism recovery outside of China, and then followed by powerful rebound in China’s inbound travelers, particularly the high-end business visitors.
- The resurgence in long-absented business visitors should bring in higher room yield and F&B revenue. It has minimal refinancing and liquidity risks and these make its near-trough 0/48x P/B unjustified.
Silergy (6415.TT): In 2022, the Company Should Aim at Growing Above 30%.
- We expect that the revenue/GM is about NT$5.95bn/54% in 1Q22 respectively. We expect it shall come to NT$6.14bn/56.5% for revenue/GM in 4Q21 respectively.
- Given strong demand of those could not be digested, Silergy has to choose high premium orders, which means Silergy can enjoy better prices.
- The domains of Server, Datacenter and 5G are Silergy’s main targets to grow in the next 3~5 years.
Eyebright Medical Technology Beijing (688050.CH) – Some Points Worth the Attention
- At the current stage, the price of IOL that won the bidding in centralized procurement was above Eyebright’s ex-factory price, which means that the profits are still guaranteed.
- If two core products (IOL & OK lens) are both included in the centralized procurement in the future, Eyebright needs to broaden the product category and find new growth points.
- We analyze the valuation from a different angle.We could not say that the current market value of Eyebright is at the bottom, but is more reasonable compared with last June.
Related tickers: Nissin Foods (1475.HK), Chugai Pharmaceutical (4519.T), Shangri-La Asia (0069.HK), Silergy Corp (6415.TW)
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