In today’s briefing:
- Tencent Holdings – From Sea To Shining Sea
- Record Tesla Q4 Deliveries Boost Q4 Revenue & Profit Estimates
- Japan’s Boycott of Winter Olympics Could Be the Tipping Point
- Sony – PSVR2 On the Horizon
- Shenzhen Intl (152 HK): Deep Dissection Indicates Truly Undervalued
- Ping An Health (Part 1): A Deep Dive into Online Medical Services Business
- JMT Network Services – Near Infinite Debt Collection Supply?
- MEGA: Expect Growth Rate to Slow Down in 2022
- REGI: Downstream Acquisition Is Catalyst
Tencent Holdings – From Sea To Shining Sea
- Sea Sale: Tencent sold 14.5 mn shares in Sea, raising approximately USD 3 bn in cash – reducing Tencent’s position in Sea from 21.3% to 18.7%;
- Not A Surprise: Given mainland China’s crackdown on the country’s largest internet companies, Tencent’s disposal of Sea shares is not a surprise; and
- Other Stake Sales To Follow: Further divestitures of major stakes are likely if Tencent wishes to remain on the right side of mainland China’s Communist Party.
Record Tesla Q4 Deliveries Boost Q4 Revenue & Profit Estimates
- Tesla’s Q4 deliveries trounced market estimates thanks to a strong yearend push.
- The outlook for revenue and profit just got higher. A lot higher.
- Also true, Tesla’s easy comps may be coming to an end.
Japan’s Boycott of Winter Olympics Could Be the Tipping Point
- Considering the geopolitical relationship over the last 100 years, it doesn’t take much for Chinese people to start developing an anti-Japan sentiment.
- The relationship between the two countries was already reaching nervy levels, before Tokyo’s decision to snub the 2022 Winter Olympics.
- We think the Japanese government’s decision to not send a government delegation to the Winter Olympics could be all that is needed to spark an anti-Japan sentiment among Chinese consumers.
Sony – PSVR2 On the Horizon
- Sony announced details for the PlayStation VR2 today confirming many rumoured specifications.
- In addition, it announced that a title from its key Horizon franchise would be coming to VR.
- This points to a commitment from Sony to support AAA VR titles and should allow it to once again dominate VR.
Shenzhen Intl (152 HK): Deep Dissection Indicates Truly Undervalued
- By deconsolidating Shenzhen Expressway (548 HK) (SZX) from Shenzhen International (152 HK) (SZI), SZI’s net book value reached HK$16.4bn. Its current market cap of HK$18.9bn implies SZX is almost free.
- SZI’s high gearing is primarily due to SZX. Excluding SZX, SZI’s gearing is just 32.3%. As Shenzhen’s flagship SOE, there is consistent monitoring and huge support from the local government.
- SZI’s 0.47x P/B is more than 2SD below historical average; but it has proven capability to realise value of underlying assets. Excluding SZX, SZI is on even cheaper 0.32x P/B.
Ping An Health (Part 1): A Deep Dive into Online Medical Services Business
- Ping An Healthcare and Technology Company (SEHK:1833) operates an Internet healthcare platform in China (Ping An Good Doctor), which delivers on-demand healthcare. Its mobile platform was launched in April 2015.
- It is one of the leading online healthcare providers in China and has reported strong growth in revenues and gross profit since inception.
- The company has been positively impacted by the spread of COVID-19 with more people switching to online healthcare rather than visiting hospitals.
JMT Network Services – Near Infinite Debt Collection Supply?
- Can benefit from years of strong growth in banks’ debt collection
- Returns remain exceptional at over 7% during last twelve months
- Book value growth is astonishing from THB121m to THB5,755m in past 10 years
MEGA: Expect Growth Rate to Slow Down in 2022
- We maintain BUY rating and roll over target price to Bt56 (+8% from previous TP) based on 25xPE’22E, a 15% discount from Thai health care peers.
- We expect MEGA revenue growth rate to slow down to 4%YoY in 2022 caused by relieved customers concern over COVID-19 pandemic and high base effect.
- Looking forward to 2023, We foresee MEGA revenue to continues to grow at moderate level at 9%CAGR in 2023-2025E, close to the global dietary supplements market growth at 8.6%CAGR(2021-2028)
REGI: Downstream Acquisition Is Catalyst
- REGI is increasing its downstream business through the acquisition of Amber Resources. The commercial distributor gives REGI a foothold within one of REGI’s most important renewable diesel markets, California
- REGI’s management has been trying to broaden the Company’s downstream reach to capture more of the margin in selling renewable and biomass-based diesel.
- The more than 60 million gallons of diesel sold per year by Amber Resources would fuel a margin expansion opportunity
Related tickers: Tencent (0700.HK), Tesla Motors (TSLA.OQ), Fast Retailing (9983.T), Sony Corp (6758.T), Shenzhen International (0152.HK), Ping An Healthcare and Technology Company Limited (1833.HK), JMT Network Services (JMT.BK), Mega Lifesciences (MEGA.BK), Renewable Energy Group (REGI.O)
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