In today’s briefing:
- Tencent (700 HK): Layoff and Penalty Before 4Q21 Result
- Nintendo – Switch Pro Leaks And Implications For Developers
- Ping An Health 2021 Results: Is Strategy 2.0 Continuum as Successful as Claimed?
- Far East Hospitality Trust (FEHT): Your Hedge in the Far East.
- Pola Orbis: Our Preferred Choice Leading up The Reopening of Japan to Foreign Tourists
- PT Nippon Indosari Corpindo (ROTI) – Bringing the Bread Home
- CanSino Biologics (6185.HK/688185.CH) – Still Have Investment Value
- Askul Corp – Q3 22 Results Reaction: Margin Concerns Hold Back Shares Despite Beat
- SK Biopharmaceuticals (326030 KS): Highest Performance in 2021; Pipeline Progress Entails Visibility
- Hon Hai(2317.TT): It Will Be More Challenging in 2022, but Hon Hai Will Focus on EPS.
Tencent (700 HK): Layoff and Penalty Before 4Q21 Result
- Layoff rumors are spreading, which shadow two departments and 10% of Tencent’s employees.
- China Banking Regulatory Commission (CBRC) will fine Tencent for money laundering.
- Short video apps are taking time on site from Tencent’s WeChat app.
Nintendo – Switch Pro Leaks And Implications For Developers
- Recent hacks into Nvidia have resulted in leaks that have got the rumour mills churning again for an upgrade to the Switch.
- Most details are similar to previous reporting by Bloomberg for the Switch Pro that was expected last year but failed to materialise.
- However, the recent leaks point to a bigger GPU upgrade that previously envisioned and that has implications…
Ping An Health 2021 Results: Is Strategy 2.0 Continuum as Successful as Claimed?
- Ping An Health (SEHK:1833) reported 2H2021 earnings on Tuesday after market close. The company’s revenue declined by 14.7% YoY with a 7.5% decline in gross margins.
- On a full-year basis, 2021 revenue grew by 6.8% despite a 3.9% decline in gross margins. We are concerned on the slowdown of revenue growth and margin decline.
- The company is trading at a significant discount to historical median and peers. Withou clarity regarding segments, we think it is too soon to take a completely negative stance.
Far East Hospitality Trust (FEHT): Your Hedge in the Far East.
- Proven ability to navigate during the downturn by keeping occupancy rate high.
- A beneficiary of reopening play in Singapore from the expected higher number of tourists arrival.
- Far East Hospitality Trust (FEHT SP) is a defensive play during market uncertainty with potential for upside and dividend.
Pola Orbis: Our Preferred Choice Leading up The Reopening of Japan to Foreign Tourists
- With Omicron under control, Japan is expected to relax home quarantine requirements for foreign travellers some time or the other.
- Meanwhile, Google Mobility data hints that domestic customers are starting to head back to places like shopping centres, suggesting an improvement in demand conditions.
- Based on valuation and the price performance trend, long time underperformer Pola Orbis Holdings (4927 JP) seems like the best option to capitalise on the reopening of Japan to foreign tourists.
PT Nippon Indosari Corpindo (ROTI) – Bringing the Bread Home
- Indonesia’s leading mass-market bread producer PT Nippon Indosari Corpindo (ROTI IJ) booked a strong set of FY2021, with general trade driving growth, and greater efficiencies enhancing margins and FY2021 growth.
- The company continues to improve its product mix and distribution to cater for more home consumption and also continues to push out into East and West Indonesia geographically.
- Higher wheat prices are a risk but the company has bought forward and will increase prices if needs to be offset higher cost. Valuations are attractive versus history.
CanSino Biologics (6185.HK/688185.CH) – Still Have Investment Value
- The main performance contributor in 2021 was CanSino’s COVID-19 vaccine.However, the high vaccination rates, new alternatives (e.g. oral COVID-19 pills) and concerns on capacity make the future sales highly uncertain.
- The commercialization performance of MCV2 and MCV4 would largely determine when CanSino could truly shift to relying on conventional vaccine business rather than COVID-19 vaccine to contribute performance.
- Objectively speaking, CanSino’s pipeline, R&D capability and technology platforms do have advantages and investment value.
Askul Corp – Q3 22 Results Reaction: Margin Concerns Hold Back Shares Despite Beat
- Q3 22 results were in-line/ahead of consensus expectations but shares fell 7% today anyway
- Operating profit fell 10% as improvements in operating losses for new businesses like Lohaco and logistics were not enough to make up for higher spending in the core B2B segment
- Despite the decline, Askul shares have largely outperformed peers YTD on optimism over the planned launch of quick commerce business Yahoo!Mart announced in late January
SK Biopharmaceuticals (326030 KS): Highest Performance in 2021; Pipeline Progress Entails Visibility
- SK Biopharmaceuticals Co Ltd (326030 KS) surpassed KRW400 billion sales last year, the highest since inception. The company targets more than doubling sales this year, through global expansion of cenobamate.
- The company is expected to launch its third commercial drug, carisbamate (currently in phase 3 trial) in global market in 2025.
- On the back of robust 2021 financial performance, SK Biopharmaceuticals shares have recovered and reached to two-month high, thereby offering an attractive and confirming buying opportunity.
Hon Hai(2317.TT): It Will Be More Challenging in 2022, but Hon Hai Will Focus on EPS.
- The revenue/ gross profit/ GM %/ EPS is NT$1,889.8bn/ NT$113.9bn/ 6.03%/ NT3.2 in 4Q21. 4Q21 revenue is growth 34% QoQ, but growing -5.9% YoY.
- We expect the material shortage would become more stabilized in 2H22. The revenue was better than expected since 2021, and it will become more challenging in 2022.
- 2025 EV revenue is about US$600bn. Hon Hai is targeting at 5% market share and aim at US$1,000bn revenue scale.
Related tickers: Tencent (0700.HK), Nintendo Co Ltd (7974.T), Ping An Healthcare and Technology Company Limited (1833.HK), Far East Hospitality Trust (FAEH.SI), Pola Orbis Holdings (4927.T), PT Nippon Indosari Corpindo Tbk. (ROTI) (ROTI.JK), CanSino Biologics Inc (6185.HK), Askul Corp (2678.T), Hon Hai Precision Industry (2317.TW)
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