Asia L/S Equity PM/Macro/Thematic Idea Generation

Rikki Malik

Cross Asset Strategy

<ul>
<li>Risk reward favours a shift in allocation between these markets.</li>
<li>Hong Kong washed out from a sentiment, valuation and positioning perspective.</li>
<li>Minimal investor expectations  and continual disappointment  have set the stage for a rally in 2024.</li>
</ul>


Risk reward favours a shift in allocation between these markets.
Hong Kong washed out from a sentiment, valuation and positioning perspective.
Minimal investor expectations  and continual disappointment  have set the stage for a rally in 2024.


2024 High Conviction Idea: The Case for a Rotation Out of Japan into Hong Kong - Part 2

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

Innovent Biologics Inc / Equity Bottom-Up

Innovent Biologics, Inc. operates as a biopharmaceutical company. The Company develops, manufactures, and distributes monoclonal antibody drug candidates for the treatment of oncology, ophthalmology, autoimmune, cardiovascular, and other diseases. Innovent Biologics serves customers in China.

<ul>
<li>23H2 net loss significantly widened as cost control was not as tight as in 23H1. Expenses would remain high in 2024, since Innovent would continue expanding team in CVM field.</li>
<li>Innovent may think that not many players will join the competition of weight loss drug in short-term, but the actual commercialization of mazdutide after launch could be full of uncertainties.</li>
<li>It’s already good for Innovent to be breakeven in 2025. If Innovent breaks even in 2024, it will exceed expectations.Considering major policy shift, Innovent could experience a leap in valuation.</li>
</ul>


23H2 net loss significantly widened as cost control was not as tight as in 23H1. Expenses would remain high in 2024, since Innovent would continue expanding team in CVM field.
Innovent may think that not many players will join the competition of weight loss drug in short-term, but the actual commercialization of mazdutide after launch could be full of uncertainties.
It’s already good for Innovent to be breakeven in 2025. If Innovent breaks even in 2024, it will exceed expectations.Considering major policy shift, Innovent could experience a leap in valuation.


2024 High Conviction Update: Innovent (1801.HK) - Breakeven Is Still on Track Despite Soaring Costs

Equity Analyst

Steve Zhou, CFA

ANTA Sports Products Limited designs, develops, manufactures, and markets sportswear, including sports footwear and apparel for professionals and the general public.

<ul>
<li>At noon time today, <a href="https://www.smartkarma.com/entities/anta-sports-products-ltd" target="_blank" data-smartkarma-citation="entities:10261:1" rel="noopener">Anta Sports Products (2020 HK)</a> released strong 2023 results which beat expectations. </li>
<li>Anta currently trades at a forward PE of 18x based on estimated 2024 earnings (assuming a conservative 15% yoy growth in 2024 earnings). </li>
<li>I expect the company's net profit to grow 15-20% CAGR in 2024-2026.  Anta's historical forward PE is around 24x since 2017. </li>
</ul>


At noon time today, Anta Sports Products (2020 HK) released strong 2023 results which beat expectations. 
Anta currently trades at a forward PE of 18x based on estimated 2024 earnings (assuming a conservative 15% yoy growth in 2024 earnings). 
I expect the company's net profit to grow 15-20% CAGR in 2024-2026.  Anta's historical forward PE is around 24x since 2017. 


Anta Sports (2020 HK):  2024 High Conviction Update - Earnings Beat In 2H23

<ul>
<li>Innovent’s 2023 product revenue was RMB5.7 billion. In 2024, product revenue growth would remain strong (e.g. 35% YoY).The main flashpoint for performance is after the approval of mazdutide in 2025.</li>
<li>Innovent has started paving the way for mazdutide more than a year in advance and building various channels.Normally speaking, mazdutide could get the approval in 25Q2. Its CDMO is Asymchem</li>
<li>Share price of Innovent was once dragged down by the CXO plunge due to the US Draft Bill, but unlike CXOs, innovative drugs do not involve supply chain security issues.</li>
</ul>


Innovent’s 2023 product revenue was RMB5.7 billion. In 2024, product revenue growth would remain strong (e.g. 35% YoY).The main flashpoint for performance is after the approval of mazdutide in 2025.
Innovent has started paving the way for mazdutide more than a year in advance and building various channels.Normally speaking, mazdutide could get the approval in 25Q2. Its CDMO is Asymchem
Share price of Innovent was once dragged down by the CXO plunge due to the US Draft Bill, but unlike CXOs, innovative drugs do not involve supply chain security issues.


2024 High Conviction Update: Innovent (1801.HK) - Recent Promising Business Updates and 2024 Outlook

Global Healthcare Analyst

Tina Banerjee

ASAHI INTECC CO., LTD. manufactures medical tools as well as both medical and industrial-use stainless wire rope.  The Company's main products include catheters, guidewires, and miniature coils for endoscopic devices.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/asahi-intecc-co-ltd" target="_blank" data-smartkarma-citation="entities:15915:1" rel="noopener">Asahi Intecc (7747 JP)</a> announced better-than-expected result in H1FY24, with double-digit growth across all major parameters. Growth was driven by favorable Fx, recovery and expansion of cases, and strong demand.</li>
<li>Revenue from medical division increased 22% YoY to ¥48B. Operating income of the medical division increased 52% YoY to ¥13B, representing 540bps YoY margin expansion to 27.3%.</li>
<li>Asahi Intecc has not revised FY24 guidance as it is difficult to forecast currency movements and revenue from distributors in medical division due to volatility of quarterly transactions.</li>
</ul>



Asahi Intecc (7747 JP) announced better-than-expected result in H1FY24, with double-digit growth across all major parameters. Growth was driven by favorable Fx, recovery and expansion of cases, and strong demand.
Revenue from medical division increased 22% YoY to ¥48B. Operating income of the medical division increased 52% YoY to ¥13B, representing 540bps YoY margin expansion to 27.3%.
Asahi Intecc has not revised FY24 guidance as it is difficult to forecast currency movements and revenue from distributors in medical division due to volatility of quarterly transactions.


2024 High Conviction Update: Asahi Intecc (7747 JP)- Strong H1 Performance; FY24 Guidance Reaffirmed

2024 High Conviction Ideas
High Conviction Ideas going into 2024

2024 High Conviction Idea: The Case for a Rotation Out of Japan into Hong Kong - Part 2

Since we published this piece, The HSI is up 12%, the HSCEI is up 16% and the HSCCI is up 17%. Since January's bottom, when we reiterated BUY,...

Rikki Malik

2024 High Conviction Update: Innovent (1801.HK) - Breakeven Is Still on Track Despite Soaring Costs

Loose cost control led to an expansion of losses in 23H2, but the goal of breakeven in 2025 is still within the plan, which could be achieved...

Xinyao (Criss) Wang

Anta Sports (2020 HK): 2024 High Conviction Update - Earnings Beat In 2H23

Outlook intact post results briefing. Anta is a clean growth story that is attractively valued - should benefit from improved sentiment on China...

Steve Zhou, CFA

2024 High Conviction Update: Innovent (1801.HK) - Recent Promising Business Updates and 2024 Outlook

Innovent's product revenue growth will remain strong in 2024.The main flashpoint for performance is after the approval of mazdutide in...

Xinyao (Criss) Wang

2024 High Conviction Update: Asahi Intecc (7747 JP)- Strong H1 Performance; FY24 Guidance Reaffirmed

Asahi Intecc reports strong H1FY24 results with double-digit revenue and profit growth driven by favorable Fx and strong demand. No FY24 guidance...

Tina Banerjee

2024 High Conviction Idea: The Case for a Rotation Out of Japan into Hong Kong - Part 2

Since we published this piece, The HSI is up 12%, the HSCEI is up 16% and the HSCCI is up 17%. Since January's bottom, when we reiterated BUY,...

Rikki Malik

2024 High Conviction Update: Innovent (1801.HK) - Breakeven Is Still on Track Despite Soaring Costs

Loose cost control led to an expansion of losses in 23H2, but the goal of breakeven in 2025 is still within the plan, which could be achieved...

Xinyao (Criss) Wang

Anta Sports (2020 HK): 2024 High Conviction Update - Earnings Beat In 2H23

Outlook intact post results briefing. Anta is a clean growth story that is attractively valued - should benefit from improved sentiment on China...

Steve Zhou, CFA

2024 High Conviction Update: Innovent (1801.HK) - Recent Promising Business Updates and 2024 Outlook

Innovent's product revenue growth will remain strong in 2024.The main flashpoint for performance is after the approval of mazdutide in...

Xinyao (Criss) Wang

2024 High Conviction Update: Asahi Intecc (7747 JP)- Strong H1 Performance; FY24 Guidance Reaffirmed

​Asahi Intecc reports strong H1FY24 results with double-digit revenue and profit growth driven by favorable Fx and strong demand. No FY24 guidance...

Tina Banerjee

Asahi Intecc reports strong H1FY24 results with double-digit revenue and profit growth driven by favorable Fx and strong demand. No FY24 guidance...