In today’s briefing:
- Toshiba (6502 JP): National Security Overrides the Interests of Speculators
- Prodia (PRDA IJ) – Diagnosed for Growth
- Appier (4180 JP) – Eating the Cookie Crumbs
- Siloam International Hospitals (SILO IJ) – Core Strength in Display
- Meituan (3690 HK): 4Q21, Strong Revenue and Promising Initiatives
- Akeso Biopharma Inc (9926.HK) – Caution Is Advised Until Sufficient Financing Is Secured
- Shangri-La Asia (69 HK): On a Clear Recovery Path
Toshiba (6502 JP): National Security Overrides the Interests of Speculators
- Toshiba possesses technologies of vital importance to Japan’s economic competitiveness and national security: nuclear power, quantum cryptography and discrete semiconductors.
- Any changes in ownership or management that would undermine or leak these technologies would probably not be tolerated.
- LightStream’s Mio Kato writes that Toshiba itself is attractive but the drama surrounding it is decidedly looking bad for business. He remains negative on the stock.
Prodia (PRDA IJ) – Diagnosed for Growth
- Prodia (PRDA IJ) released an exceptionally strong set of FY2021 results, driven partly by COVID testing but coupled by a pick-up in its core testing business and especially esoteric testing.
- It continues to see increasing tests per visit with revenue per visit increasing at the same time. Its digital strategy is working well further driving growth through an omnichannel approach.
- Prodia (PRDA IJ) continues to look dramatically undervalued versus its Indian diagnostic peers given its quality and growth prospects and remains our top Indonesian healthcare pick.
Appier (4180 JP) – Eating the Cookie Crumbs
- The stock is down 54% over the past year despite 41% revenue growth. We see 3 key drivers in 2022.
- Appier is growing rapidly in the US, a much bigger market than its home market of North Asia.
- Appier is at the forefront of digital transformation, benefitting from structural DX of marketing functions and increased use of 1st party data.
Siloam International Hospitals (SILO IJ) – Core Strength in Display
- Siloam International Hospitals (SILO IJ) held an analyst briefing recently to highlight the strong recovery of its base-case business, with very little contribution from COVID-related treatments by year-end.
- Revenues on a monthly basis have hit record highs in December and January, with increased efficiencies and improving profitability due to cost controls.
- Siloam International Hospitals (SILO IJ) remains an interesting recovery play but it has emerged even stronger from the pandemic and valuations are attractive versus peers and history.
Meituan (3690 HK): 4Q21, Strong Revenue and Promising Initiatives
- Meituan’s total revenue continued to rise strongly by 31% in 4Q21.
- Initiatives businesses are losing money, but two of them are in leading positions.
- We believe the stock has a 20% upside for this year.
Akeso Biopharma Inc (9926.HK) – Caution Is Advised Until Sufficient Financing Is Secured
- Akeso has a very high starting point, and was regarded as the leader of domestic second-tier biotech companies. However, in current unfavorable market sentiment, it’s necessary to re-examine the Company.
- In Akeso’s pipeline, there are some valuable and differentiated candidates, especially in the field of bispecific antibodies. Its R&D capability is also well recognized.
- However, due to the rich pipeline, related clinical trials will drain money fast. So, investors are advised to be cautious until Akeso has ensured sustainable and stable cash flow.
Shangri-La Asia (69 HK): On a Clear Recovery Path
- There is a strong recovery in Shangri-La Asia (69 HK) in 2H21 as its losses narrowed 36.4% HoH and by 57.5% YoY – hotels and investment properties are primary drivers.
- 1Q22 momentum is solid with occupancy outside of Hong Kong and mainland China saw good YoY rebound. In FY21, room rates in France, Australia and UK have surpassed 2018 levels.
- Refinancing for FY22 has almost completed, implying minimal liquidity risks. Trading at 76% discount to adjusted NAV of HK$25.44, the stock is way too cheap.
Related tickers: Toshiba Corp (6502.T), Prodia (PRDA.JK), Siloam International Hospitals (SILO.JK), Meituan (3690.HK), Shangri-La Asia (0069.HK)
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