In today’s briefing:
- Valorant’s Regional Parity and Japan’s Emerging Esports Scene
- Mitsubishi Electric (6503 JP): Buy on Weakness for the Long Term
- BayCurrent: Strong Results but Guidance Seems Too Conservative
- Mitra Adiperkasa (MAPI IJ) – Remoulded and Ready for Recovery
- TSMC (TSM.US; 2330.TT): 1Q22 Beats Our Forecast; 2Q22 Revenue Is in Line, and GM/OPM Beats Forecast
- BayCurrent (6532) A Consulting Powerhouse Growing in the Double Digits
- Jinxin Fertility (1951 HK): Regulatory Risk and Macro Headwind Jeopardize Growth Prospect
Valorant’s Regional Parity and Japan’s Emerging Esports Scene
- We have previously commented on Valorant’s relatively unique position in esports due to its high degree of regional parity and that is being further underscored during its ongoing Masters tournament.
- In particular, Japan, a region not known for any particular prowess in FPS titles secured its first top eight position generating significant buzz on twitter in doing so.
- The implications look positive here for both Valorant overall and for Japan’s esports ambitions where it is probably now time to truly familiarise yourself with the potential plays.
Mitsubishi Electric (6503 JP): Buy on Weakness for the Long Term
- Investing in factory automation, power semiconductors and electric vehicle motors on a long-term view while interest rates rise and the economy weakens.
- Difficult operating environment now: Factory automation turning down; automotive hit by high materials costs and the semiconductor shortage.
- Share price down 25% from its 52-week high. Selling at 14x FY Mar-22 EPS guidance after a downward revision, which compares with a 9x – 20x 5-year P/E range.
BayCurrent: Strong Results but Guidance Seems Too Conservative
- Baycurrent Consulting (6532 JP) reported 4QFY02/2022 results today. Revenue grew 30.9% YoY to JPY16.2bn while OP increased 61.3% YoY to JPY6.8bn.
- Full-Year FY02/2022 revenues grew 34.4% YoY to JPY57.6bn and OP increased 58.7% YoY to JPY21.5bn. Both revenue and OP beat guidance by 1.9% and 2.4% respectively.
- BayCurrent’s shares are down 30% since its peak in September 2021, and we think current share price offers a good entry point.
Mitra Adiperkasa (MAPI IJ) – Remoulded and Ready for Recovery
- Mitra Adiperkasa’s results this week confirm a strong recovery is in place, with improving margins and growth across all verticals and a return to profitability for FY2021.
- Growth was evident in both online and offline channels as the company’s unified retail strategy continues to yield strong results plus inventory levels improved dramatically QoQ in 4Q2021.
- Mitra Adiperkasa (MAPI IJ) remains a key proxy for the retail recovery in Indonesia and has remoulded itself to changing consumer behaviour. Valuations remain attractive versus historical levels.
TSMC (TSM.US; 2330.TT): 1Q22 Beats Our Forecast; 2Q22 Revenue Is in Line, and GM/OPM Beats Forecast
- The revenue/ GM/ OPM/ EPS/ ROE is USD$17.57b/ 55.6%/ 45.6%/ NT$7.82/ 36.2% in 1Q22. The revenue/ GMO/ OPM is US$17.6-18.2bn/ 56-58%/ OPM: 45-47% in 2Q22 guidance.
- Moving into 2Q22, TSMC expects their business to be supported by HPC, Automotive related demands, partially offset by smartphone seasonality.
- The HPC platform is the strongest growing platform and the largest contribution to TSMC’s growth in 2022.
BayCurrent (6532) A Consulting Powerhouse Growing in the Double Digits
- Another excellent set of results which supports our bullish view on the stock
- BayCurrent is a key enabler of DX in Japan and a beneficiary of the tight labour market
- The stock is down around 30% from its all-time high. Growth investors should be picking up stock
Jinxin Fertility (1951 HK): Regulatory Risk and Macro Headwind Jeopardize Growth Prospect
- As China’s leading assisted reproductive service provider, Jinxin Fertility Co Ltd (1951 HK) can be negatively affected by the country’s consistently falling birth rate.
- The company performed 27,354 IVF cycles in 2021, 20% higher than that of 2020. However, it is still lower than 27,854 IVF cycles performed in 2019, pre-COVID era.
- Concern over the fact that the Chinese government may impose restrictions on the for-profit healthcare service providers, like it did for K12 education sector, is souring near-term sentiment.
Related tickers: Tencent (0700.HK), Mitsubishi Electric (6503.T), Baycurrent Consulting (6532.T), Mitra Adiperkasa (MAPI.JK), Taiwan Semiconductor Sp Adr (TSM.N), Baycurrent Consulting (6532.T), Jinxin Fertility Co Ltd (1951.HK)
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