In today’s briefing:
- TSMC (TSM.US; 2330.TT): It’s Too Aggressive Intel Wants to Deliver 4 Technology Nodes Within 2024.
- Kunlun Energy (135 HK): Better FY21 than Peers
- Softbank Group – A Strong Dollar Is Good News with 87% of Assets Overseas
- Fushan Resources: Swimming in Cash
- Sea Ltd (SE US) – An Indian Odyssey Brings Experience
- Kuaishou (1024 HK): 4Q21, Strong Data, Both Financial and Operating
- Kimly: A Yummy, Undervalued Re-Opening F&B Play in Singapore
- JD Health 2H2021: Healthy Results with More Than 60% Top Line Growth
- Thailand Casino Legalization Prospects Boost Las Vegas Sands Targeting of Its Third Asian Nation IR
- CSPC Pharmaceutical Group (1093.HK) – Conservative About the Business Transformation Outlook
TSMC (TSM.US; 2330.TT): It’s Too Aggressive Intel Wants to Deliver 4 Technology Nodes Within 2024.
- TSMC is still focusing on their delivery targets for 3nm and 2nm for the next goals.
- Nvidia CEO Mr. Jensen Huang said he wants to diversify his company’s suppliers as much as possible, and he will consider working with Intel.
- We have to leave a big question mark that Intel declares to deliver 3~4 technologies within 2024.
Kunlun Energy (135 HK): Better FY21 than Peers
- Kunlun Energy (135 HK) posted a 43.6% YoY growth in net profit for FY21, which is ahead of peers like ENN Energy (2688 HK) and CR Gas (1193 HK).
- While 2H21 gas sales segment is weaker, the contraction of dollar margin for Kunlun is light at 3.8% YoY. The other gas utilities companies are seeing 12-15% decline.
- Its net cash reached Rmb3.3bn at end-FY21, and number of new city gas projects reached 17 in 2H21, vs. 13 only in 1H21, indicating good pick-up in momentum.
Softbank Group – A Strong Dollar Is Good News with 87% of Assets Overseas
- Shares are now up 1% in the quarter despite investment losses as 87% of assets are US$-linked
- A recovery for Alibaba, reports of ARM monetization and the $2bn sale of its stake in Cruise has eased leverage concerns with LTV back to 22% and CDS prices falling
- This report includes detail on Softbank dollar exposure, calculations for LTV on a quarterly and daily basis and updates to our usual NAV discount/VF performance tables
Fushan Resources: Swimming in Cash
- Shougang Fushan Resources (639 HK) is in deep value territory with coking prices averaging over 2600 RMB/ton for the year ( Vs. last years average of 2000 RMB/ton)
- The stock trades at 2.6x PE, 0.8x EV-EBITDA with a 22% dividend yield at current spot prices of 2950 RMB/ton, making this an extremely cheap value play.
- Further buffer is provided by net cash of 6.7 bn HKD, representing 44% of the market capitalization. Fushan can trade up to 3.50 HKD (20% upside) in the near term.
Sea Ltd (SE US) – An Indian Odyssey Brings Experience
- Sea Ltd’s (SE US) decision to exit India came as a surprise but looks like a prudent move given the heightened risk for Shopee there post the FreeFire ban.
- The move will allow Sea Ltd (SE US) to focus its attention and resources on a more profitable markets such as Brazil, which is already seen as a core market.
- Sea Ltd’s growth model is intact with losses in its core e-commerce markets declining fast on a per order basis. Valuations are less challenging on 3.4x FY2023E EV/Sales.
Kuaishou (1024 HK): 4Q21, Strong Data, Both Financial and Operating
- Both monthly active users and time on site grew strongly in 4Q21.
- Live streaming revenue recovered quarter over quarter in 3Q21 and 4Q21.
- Operating loss decreased in 4Q21, compared to the first three quarters in 2021.
Kimly: A Yummy, Undervalued Re-Opening F&B Play in Singapore
- We believe Kimly is a yummy, undervalued re-opening, F&B play in Singapore.
- With Singapore increasingly reopening for travel and reducing various COVID related restrictions, this could have a positive impact on the company’s F&B business.
- As such, we have a positive view of Kimly and we believe this stock is well poised to outperform the market in the next 6-12 months.
JD Health 2H2021: Healthy Results with More Than 60% Top Line Growth
- JD Health (6618 HK) reported results on Monday. Revenue grew 60.7% YoY to RMB17.0bn (vs consensus RMB14.9bn) while OP losses expanded to RMB808m from RMB48m a year ago.
- Similar to 1H2021, huge share-based payment expenses were the reason for increase in Operating losses, excl. these, JDH made a healthy OP of RMB1.8bn, an OPM of 10.4%.
- JDH’s online healthcare business is still at an early stage and the company has taken several initiatives to explore more opportunities and capitalise on digital transformation in the healthcare sector.
Thailand Casino Legalization Prospects Boost Las Vegas Sands Targeting of Its Third Asian Nation IR
- Non-Casino Thailand could be starting to get serious about legalizing casinos. Demos are solid if they make the move.
- Las Vegas Sands, seems the prime candidate to become the first mover if that market does make the major legislative move.
- LVS CEO Goldstein said last week that the company was engaged in serious talks with a possible third Asian nation on a major IR move there.
CSPC Pharmaceutical Group (1093.HK) – Conservative About the Business Transformation Outlook
- Due to the lack of differentiated and frontier enough target layout, the commercialization potential would be more easily questioned, with high uncertainty of having the next NBP level products.
- CSPC has made easy money from a few large varieties/generic drugs for many years, but is destined to make the business transformation more difficult, because the “opportunity cost” is high.
- CSPC’s products have lost their pricing power. Therefore, when its valuation is very low or the entire sector is moving upward, this stock could be traded due to positive momentum.
Related tickers: Taiwan Semiconductor Sp Adr (TSM.N), Kunlun Energy (0135.HK), Softbank Group (9984.T), Shougang Fushan Resources (0639.HK), Sea Ltd (SE.N), JD Health (6618.HK), Las Vegas Sands (LVS.N), CSPC Pharmaceutical Group (1093.HK)
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