Equity Bottom-Up: Shimano Inc, UOB, Capcom Co Ltd, Bank Central Asia, Tencent, Siam Commercial Bank, Asian Sea, InnoCare Pharma Ltd, Bangkok Bank Public, Krung Thai Bank Pub and more

• The drivers of bike demand are structural and have nothing to do with Covid. We expect the company to beat numbers this year.
• EU regulation will drive huge growth in the bike market over the next several years and Shimano is uniquely positioned to benefit.
• The stock price decline from over ¥35k to under ¥25k has brought valuations down to the bottom of the historical range. 

For our next Corporate Webinar we are glad to welcome UOB (UOB SP) Vice President, Investor Relations, Soh Yi Da.

In the upcoming webinar, Soh Yi Da will share a short company presentation, after which the IR team will engage in a fireside chat with Smartkarma Analyst Daniel Tabbush. A live Q&A session will follow.

The Corporate Webinar will be hosted on Tuesday, 10 May 2022, 17:00 SGT.

UOB is a leading bank in Asia with a global network of more than 500 branches and offices in 19 countries and territories in Asia Pacific, Europe and North America and has grown organically and through a series of strategic acquisitions. 

UOB is rated among the world’s top banks: Aa1 by Moody’s and AA- by both S&P Global Ratings and Fitch Ratings. UOB provides a wide range of financial services globally through its three core business segments – Group Retail, Group Wholesale Banking and Global Markets.

Corporate Webinars by Smartkarma Corporate Solutions feature discussions with IROs and Executives, discussing their companies, the challenges they face, and the opportunities in their sectors and markets. 

• Valorant’s Masters 1 Tournament concluded today in Iceland with North America’s Optic Gaming defeating Brazil’s Loud, leaving Japan’s Zeta Division in third place. 
• These are three key regions for viewership and Japan’s surprising performance bodes well for the esports scene in the country. 
• Gameplay for Valorant Mobile has also leaked and early indications are that Krafton could be cannibalised here.

• Bank Central Asia (BBCA IJ) released its 1Q2022 this week, reflecting an ongoing recovery and the bank’s strong positioning to take advantage, with new lending picking up strongly.
• The bank is seeing strong growth in CASA driven by its lead in transactional banking and digital initiatives, with its CASA ratio hitting 80% by the end of 2022. 
• Credit costs are also forecast to fall further this year, which will provide an additional boost to profitability. It trades at a premium to peers but generates consistent returns.

• Tencent (700 HK) will announce its first quarter 2021 results on 18th May 2022.
• Since 3Q2021, Tencent’s earnings have started to decelerate, and the previous quarter marked the slowest ever revenue growth for the company since 2004.
• We expect Tencent’s earnings weakness to continue well into 1H2022E due to slowdown in online games and online advertising businesses.  

• Maintain BUY with a new target price of Bt139 (from Bt149) due to a net profit downgrade. Our valuation is derived from the Gordon Growth Model (ROE 9%, growth 2%)
• Management had more cautious views on potential impacts from higher inflation and the Russia-Ukraine war.
• Net profit in 1Q22 came in line with our expectations at Bt10.2bn (+1% YoY, +29% QoQ).

• Maintain BUY rating with a TP of B23.00 based on 16xPE’22E, which is close to +1SD of its five-years average trading.Our rating is premised on positive pet food growth outlook
• We expect 1Q22E earnings to come in at Bt250m (+16%YoY,-6%QoQ), soften QoQ on the back of weak margin outlook from surging raw material costs. 
• We foresee earnings visibility to pick up in 2Q22 onwards, driven by stronger pet food revenue thanks to new capacity and margin improvement given easing cost pressures.

• InnoCare was approved to list in the SSE STAR Market, and the Company also released its improving financial performance in 2021. However, the outlook for InnoCare remains challenging and uncertain.
• Either orelabrutinib or the pipeline, they don’t have pricing power due to lack of sufficient competitiveness and slower development progress, which means that their commercialization performance is highly uncertain.
• There’s no definite commercialization outlook for InnoCare, with a far distance from becoming a biopharma. InnoCare was overvalued and could be attractive if the market value could be 50% off.

• Maintain our BUY call with a target price of Bt162.Our BUY call reflects steady earnings growth, resilient balance sheet,and undemanding valuation. Our valuation is derived from the Gordon Growth Model 
• Net profit in 1Q22 came in at Bt7.1bn, up 3% YoY(+13% QoQ)and 9% lower than expectations on lower gain from financial instruments designed at fair value through profit or loss.
• Asset quality was resilient. The NPL ratio minimally increased to 3.3% and the coverage ratio remained high at 229% against uncertainty.

• Upgrade BUY with a target price of Bt15.00. Our upgrade reflects an attractive upside gain,resilient asset quality,and potential credit costs reduction. Our valuation is derived from the Gordon growth model
• Net profit in 1Q22 came in at Bt8.8bn (+57% YoY, +78% QoQ) and 37% higher than our expectation on lower-than-expected provisions.
• Asset quality improved. The NPL ratio decreased to 3.3% in 1Q22 and the loan loss coverage ratio was higher to 173.6% to withstand uncertainty ahead.