In today’s briefing:
- SenseTime: Shares Fall with Lock-Up Expiry; Further Downside with More Selling at the Next Expiry
- Shionogi & Co (4507 JP): Ready To Cash-In On COVID-Related Efforts; Long-Term Growth Drivers Added
- China Power International (2380 HK): Another Step in Clean Energy Transition
- JASIF : Contract Cancellation Will Affect Dividend Payment
- ADVANC : Large Boost to Broadband Business Growth
- Fujifilm (4901) | Bio Pharma Giant Is a Double
SenseTime: Shares Fall with Lock-Up Expiry; Further Downside with More Selling at the Next Expiry
- AI software company SenseTime’s share price dropped more than 50% over the last one week with the expiry of lock-up period as pre-investors of the company took some profits.
- The company was placed in an investment blacklist by the US government prior to the IPO which forced to launch the IPO without investors from the US.
- The company also priced the IPO at the bottom of the price range and despite all of this, shares quickly went up to HK$8.20 from IPO price of US$3.85.
Shionogi & Co (4507 JP): Ready To Cash-In On COVID-Related Efforts; Long-Term Growth Drivers Added
- Shionogi & Co (4507 JP), an established global name in infectious diseases, is banking on COVID-related products to achieve accelerated double-digit revenue growth in current fiscal.
- Shionogi applied for the domestic marketing of its COVID-19 oral drug and signed a basic agreement with the government, which is expected to purchase 1 million courses immediately after approval.
- It has a stable revenue stream from HIV franchise. Apart from infectious diseases, Shionogi has multiple late-stage candidates in psycho-neurological diseases and other new growth areas, including oncology and cardiology.
China Power International (2380 HK): Another Step in Clean Energy Transition
- China Power International (2380 HK) will acquire 2.15GW clean energy capacity from its parent SPIC for a total of Rmb7.5bn. This will add 14.3% to its end-FY21 clean energy portfolio.
- We think the assets are priced attractively at 12.5x PER for FY21, a discount to peers’ average of 14x. The acquired capacity has an impressive 45.8% YoY earnings growth.
- CPI targets to have 70% of end-FY23 capacity from clean energy, and this implies a 46.3% CAGR between FY21 and FY23, which is a very exciting momentum.
JASIF : Contract Cancellation Will Affect Dividend Payment
- Downgrade to HOLD fom BUY and cut TP by 28% to Bt8.80 derived form DCF (WACC=8.02%, g=0%) to factor in significant reduction in revenue and dividend from 2023
- A non-attractive deal for JASIF shareholders: On July 4th 2022, JAS informed SET that, ADVANC is considering purchase of 99.99% of TTTBB and 19% of total JASIF units at Bt8.5
- In that case,The Amended Rental Assurance agreement that generates a superior rental rate of770/km/month will be cancelled which will cause a dip of 30%in the revenue generation of JASIF in2023onwards.
ADVANC : Large Boost to Broadband Business Growth
- We maintain our BUY rating and TP of Bt259 based on based on DCF,representing 26.4xPE’22E. Analyst meeting yesterday on ADVANC’s acquisition of TTTBB and JASIF units came with positive tone
- The deal should be highly favorable for ADVANC:We believe that the entire transaction could provide a 8.5% upside to our current forecasted 23E EPS through Adjusted EPS, leading to Bt11.54/share.
- 2Q22E earnings will keep 22E earnings on track We believe that 2Q22E net profit will be at Bt6.5bn(-7% YoY, +4% QoQ).Seasonal low costs, despite high competition, will lead to QoQ
Fujifilm (4901) | Bio Pharma Giant Is a Double
- It is time to throw off the old valuation models. Fujifilm is no longer a dusty old camera maker
- The healthcare business is already the biggest earnings driver and with aggressive capex….
- Fujifilm will become the biggest biopharma contract manufacturing company in the world. Valuations don’t reflect that.
Related tickers: Shionogi & Co (4507.T), China Power International (2380.HK), Jasmine Broadband Internet Infrastructure Fund (JASIF.BK), Advanced Info Service (ADVANC.BK), FUJIFILM Holdings (4901.T)
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