Smartkarma Daily Briefs

• For FY2022–Total Buyback of 5.9 million shares (HK$18.3 million) at average price of $3.10
• Funds Management Business – Extended Platform to provide Family Office Solutions
• Funds Management Unit – Total AUM increased 21% to US$975 million in 2022 with external capital accounting for 46.5%

• Macro trend remains challenging for Meituan over the summer. We see a tactical short out of triangulation and view a new low as a turn and buy signal.
• RSI bull divergence support a series of tactical rally sequences off of a new low, but macro headwinds will cap over the summer.
• Bull set up at lower expanding wedge support with wedge resistance coming in near 140. 

• We believe total revenue grew 18% in 4Q22 and 22% in 2023.
• We believe operating losses decreased YoY in 4Q22 and the company will report an operating profit in 2023.
• We expect the stock has an upside of 47% for year end 2023.

• Baidu launched a beta test of a ChatGTP-like function, WXYY.
• Tencent announced it will close its digital collection platform, Huanhe, in June.
• KE’s revenue decreased by 25% and new losses were RMB1.4 billion.

• Megvii is a leading artificial intelligence company in China focusing on IoT scenarios for mainly three fields including Consumer IoT, City IoT and Supply Chain IoT. 
• In June 2022, Megvii’s chief scientist Sun Jian passed away due to a sudden illness. His death was one of the key reasons why the company has postponed the IPO.
• Major investors in Megvii include Ant Group, Alibaba Group (9988 HK), Lenovo (992 HK), and Abu Dhabi Investment Authority.

• After a dip in earnings in FY22, Fu Shou Yuan (1448 HK) guides for an encouraging rebound in FY23 with at least 35% revenue and 30-35% net profit growth.
• We think the 12.7% growth in earnings in 2H22, against -28.9% in 1H22, showed that pandemic impact has faded. It is still very well positioned to benefit from aging population. 
• Net cash equals 19% of its share price and its 13.9x PER for FY23 is not expensive relative to peers. We estimate, ex-cash, ROE is at a high of 24%. 

• In 4Q22, revenue grew by 46% YoY, lower than consensus, but higher than competitors.
• The operating margin improved significantly from 7% in 2021 to 23% in 2022.
• We believe the stock has an upside of 31% and a price target of US$120.

• Established in 2019 and headquartered in Hong Kong, Smartmore is a technology company that focuses on the use of artificial intelligence to implement smart manufacturing and ultra-high definition videos.
• The company’s intelligent manufacturing technology helps detect malfunction at manufacturing lines in numerous industries such as autos and semiconductors.
• Since the inception of the company, Smartmore has raised nearly $300 million in funding. Its major investors include Hermitage Capital, IDG Capital, Sequoia Capital China, and Lenovo Capital.

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

• Melco Resorts & Entertainment
• Sunny Optical

• Xpeng reported soft 4Q22 results, with top line of RMB 5.14bn, missing our estimate/cons. by (5.6%)/(9.7%); GPM of 8.7%, missing our estimate/cons. by (1.6ppt)/(3.4ppt), primarily due to increased sales promotions. 
• We maintain SELL, because 1) price war and intensified competition in 2023 are still key challenges facing its existing and new models; 
• 2) margin pressure ahead amid the price war, while its cost reduction initiatives starting from 2H23 take time to verify effect.