In today’s briefing:
- Musk Buys Twitter, You Should Buy Facebook
- Medlive – High Conviction Update 2022
- Standard Chartered – Nickel and Dimes
- Hon Hai (2317.TT): March Revenue Was Highest at the Same Period of Record.
- China Longyuan (916 HK): It Deserves the Premium
- Honda – Expanding EV Partnership With GM
- JD Health (6618.HK) 2021 Results – The Logic and the Outlook
- Jasa Marga (JSMR): Traffic Is Back, on the Ground Sources.
- EBOS Group (EBO NZ): Strong Industry Positioning and Acquisitions to Drive Growth
- Hashicorp: Cloud Infrastructure Layer…Impressive
Musk Buys Twitter, You Should Buy Facebook
- Since Elon Musk bought his 9.2% stake in Twitter, the stock is up 30%
- We are doubtful Musk can alter the trajectory of Twitter’s slow product development and weak monetization of direct response advertising and SMB customers.
- Twitter trades 6.5x forward sales / 61x forward earnings / 28x forward EV/EBITDA while Facebook trades 4.5x / 19x / 10x those same metrics…essentially 1/3rd the valuation on earnings.
Medlive – High Conviction Update 2022
- Medlive’s shares are currently trading at HK$8.15 per share and lost almost 70% YTD which we think was due to the ongoing regulatory crackdown on tech platforms in China.
- Medlive’s 2021 revenues grew 33.2% YoY to RMB284m while adjusted OP grew 19.0% YoY to RMB123m. Shares reacted negatively due to slowdown in top line growth.
- Medlive is currently trading at FY2 EV/Revenue of 0.97x compared to 34.3x when we last wrote. We think shares are extremely cheap and offers a good entry point.
Standard Chartered – Nickel and Dimes
- Tsingshan metals has reached an agreement with bankers on nickel trade
- There is risk of significant impairments at STAN and other counter-party banks
- This comes at a time when STAN’s impairment costs are starting off at a low level
Hon Hai (2317.TT): March Revenue Was Highest at the Same Period of Record.
- All of the Hon Hai’s 4 product-lines were growing double digits in March.
- In 1Q22, Hon Hai’s revenue was NT$1,408.2bn, which was -25.5% QoQ and 4.83% YoY respectively. The 1Q22 revenue was a bit better than the original expectation.
- Although Hon Hai is confident, we think the visibility is still a bit of ambiguous in 2Q22.
China Longyuan (916 HK): It Deserves the Premium
- China Longyuan Power Group Corp (916 HK) is expected to see an exciting year on the back of faster capacity growth, increase in utilisation hours and higher average tariff.
- Potential asset injection from its parent CHN Energy remains a wild card. It may grow its capacity by an average of 30% over the next three years if materialises.
- Lower funding costs and the return to A-share are positive to Longyuan’s expansion. We think consensus forecasts for next 2 years are too low and represent potential upside surprises.
Honda – Expanding EV Partnership With GM
- Honda and GM announced today that they would further expand their partnership on EV technologies.
- A new EV series will be produced for North America by 2027 and the two companies will collaborate on advanced battery technologies.
- This is an incremental positive for Honda and GM but the array of partnerships Honda is creating points to a lack of decisiveness on its part.
JD Health (6618.HK) 2021 Results – The Logic and the Outlook
- The 2021 performance of JD Health (6618 HK) beat market expectation. The scale of annual active users, commodity SKU, warehouse, logistics, medical resources, etc. all had breakthroughs.
- The growth rate and gross margin of service revenue were higher than that of product revenue. So, the performance of service sector can better determine JD Health’s future outlook.
- The outlook of online healthcare service is uncertain.Whether successful or not, JD Health still has other businesses to support future development, and is therefore our top pick in this sector.
Jasa Marga (JSMR): Traffic Is Back, on the Ground Sources.
- Indonesia’s reopening has happened for some time but Jasa Marga (Persero) (JSMR IJ) share price has not moved much.
- On-The-Ground sources told that the traffic is back, especially in Jakarta where Jasa Marga has the most toll roads.
- Pre-COVID it was trading at 2-3x PBR and now it’s only 1.35x PBR, premium to Bluebird but has a bigger market capitalization that makes JSMR more investable.
EBOS Group (EBO NZ): Strong Industry Positioning and Acquisitions to Drive Growth
- Ebos Group Ltd (EBO NZ)’s proposed acquisition of LifeHealthcare has been cleared by Australian Competition Commission, paving the timely closure of the transaction by the end of FY22.
- EBOS has achieved another record result in H1FY22, headlined by double digit revenue and earnings growth, due to continued strong growth trajectory of both healthcare and animal care segments.
- EBOS shares gained 5% since I published bullish insight on December 16. I am still optimistic on the long-term growth prospect of the company.
Hashicorp: Cloud Infrastructure Layer…Impressive
- The company sells software tools that that allow businesses to automate cloud infrastructure
- Next gen VMware… onboarding technology for cloud transitions. Impressive parallel.
- Terraform and Vault are 85% of revenues today, but big TAM for the future.
Related tickers: Twitter Inc (TWTR.N), Standard Chartered (STAN.L), Hon Hai Precision Industry (2317.TW), China Longyuan Power Group Corp (0916.HK), Honda Motor (7267.T), JD Health (6618.HK), Jasa Marga (Persero) (JSMR.JK), Ebos Group Ltd (EBO.NZ)
Before it’s here, it’s on Smartkarma
