Equity Bottom-Up

• The valuation divergence between Delta Electronics Thai (DELTA TB) and its parent Delta Electronics (2308 TT) has hit a new extreme.
• Delta Thailand surged 9.3% Thursday on no news, even prompting the Thailand Stock Exchange to query the company.
• Delta Taiwan’s stake in Delta Thailand is now worth more than all of Delta Taiwan. The valuation divergence would seem unsustainable, however when things revert is uncertain.

• While all eyes are on Alibaba splitting its business into six mini-Babas, some were quick to conclude that Tencent could be the next candidate for a similar split.
• Unlike Alibaba (ADR) (BABA US) whose business units have clear divisions and stand on its own, Tencent (700 HK) ’s businesses are interconnected making a similar split very difficult.
• Having looked at Tencent’s business units and past regulatory probe on the company, it seems unlikely for the company to be the next candidate for an Alibaba style separation.

• RH is the only luxury lifestyle brand at scale on this planet;
• Both qualitative and quantitative evidence point to the emerging and probably widening economic moat around the business;
• We see rich optionality regarding RH’s growth trajectory moving forward;

• Synergy Green Industries (SYGIL IN)  is engaged in the business of foundry i.e., manufacturing of wind turbine casting and other large precision castings.
• The company has been quite aggressive regarding its capex in the last few years especially, but the value add of these projects remains to be seen.
• Levered balance sheet, volatile business operations coupled with high related party transactions are some of the discomforts on the forensic front.

• Siloam International Hospitals (SILO IJ) is coming out of the COVID period with guns blazing as base case revenues continue to grow, surpassing pre-pandemic levels and with margins improving. 
• 2022 was a year of two halves and 2H2022 saw a clear resumption of base case patient activity, Siloam also saw the benefits of unified pricing and improved efficiencies.
• Siloam looks well-positioned to grow its base case revenues further in the coming year, with a healthy cost base and more beneficial pricing. Valuations are attractive on 9.4x FY2023E EV/EBITDA.

• Another smallish one, but EV of ~$500m (bigger than PRST but still illiquid b.c. low free-float).
• Equity is probably not worth much more than $0. I’m not short this yet, because I fear that management still has some fight left in it to ride the AI-hype.
• I want to get my timing right. It is a heavily shorted stock which has been the victim of squeezes multiple times in the past. And I don’t much fancy getting my head ripped off.

• The company’s financial statements reveal a few critical concerns relating to a receivables build-up, increasing credit allowances, and high short-term borrowing.
• The firm’s misfortunes were due to non-core events such as impairments, marketable security losses, and abnormal inflation.
• The economy is on a knife’s edge, and cyclical stocks such as Ford Motor Company (NYSE:F) look like 50:50 bets.

During H123 Quadrise made further progress on the three projects that provide the company with the fastest and most material paths to commercialisation. Assuming that the ongoing discussions regarding a licence agreement with Valkor in Utah complete soon, management expects Quadrise to generate its first commercial revenues, which would be from IP licencing, during Q423 (Q2 CY23).

As a specialist lender, S&U is sensitive to the economic background, but in its main motor finance business it has a strong track record of managing and growing through bumpy conditions. The newer property bridging business is maturing and shares a focus on customer service and a conservative underwriting approach. This provides the group with a sound basis for sustainable long-term growth.

The US Food and Drug Administration (FDA) has granted Breakthrough Device designation (BDD) to Pixium’s wireless Prima bionic vision system (BVS), which is currently being assessed in the European PRIMAvera pivotal study in patients with geographic atrophy due to age-related macular degeneration (GA-AMD). This achievement suggests that the FDA recognises GA-AMD is an irreversibly debilitating human disease and that Prima BVS has the potential to provide an effective treatment in this area of unmet need. Pixium remains on track to report top-line data from PRIMAvera in or around year-end 2023. If positive, a CE Mark regulatory marketing submission can be filed in 2024, which we estimate could lead to commercialisation of the Prima system in H125.

• Alibaba Group (9988 HK)‘s shares rallied after announcing the business split, with investors believing that the sum of parts could be worth more than the current valuation.
• Our analysis shows that NAV is only 12% higher than the current valuation, contrary to the idea of a significantly higher sum of parts value.
• Therefore, we would be looking to short Alibaba (ADR) (BABA US) yet again once this initial excitement settles.

• Bukalapak (BUKA IJ) may have disappointed some in missing on TPV but that is unimportant when it executes convincingly on improving take rates for both marketplace and its Mitra business. 
• The number of Mitra Bukalapak partners has increased to over 16m, with active Mitras taking increasing services and higher take rate products from Buka’s marketplace and specialty stores.
• Bukalapak beat on revenues and adjusted EBITDA and its guidance for adjusted EBITDA-positive by 4Q2023, with continuing improvements to take rates driving improvements. Valuations are attractive at <1x FY2024E EV/Sales.

• ADR premiums for dual-listed Taiwan shares have overall been on the uptrend this week, as semiconductor industy optimism in the U.S. as increased.
• TSMC’s ADR premium appears to be trading at a new higher range in the last few months.
• Other spreads have risen as well lately; it’s probably best to wait for significant reversals, which usually happen within two weeks at most.

• Cisarua Mountain Dairy (CMRY IJ) is one of the most interesting consumer staples players in Indonesia, with a leading position in dairy and specifically yoghurt, and increasingly premium consumer foods.
• 4Q2022 saw a slowdown in sales growth as consumers returned to the mall due to inflationary pressure but December saw a sharp recovery and 2023 should see continued recovery.
• Flavoured UHT Milk and a new Yoghurt stick aimed at the mass market will help to fuel growth and raw material cost pressures have started to alleviate. Valuations are attractive. 

• Kuaishou’s 4Q22 top line beat our est. by 3.9%, and non-IFRS net income was higher than our est. by 85% due to cost-saving measures.  
• We raise forecasts for its ads and eCommerce growth due to on-track macro recovery. However, we are still concerned about the intensified competition from WeChat Video Account.
• Maintain SELL for competition scenario, but slightly raise TP to HK$ 58 to reflect macro recovery. Our TP implies 2.1X PS/239X PE in 2023.

• Prodia (PRDA IJ) FY2022 results saw declines in revenues and profits but from a COVID-high base and the numbers are now well-above 2019, with strong prospects ahead.
• The company is seeing a return to routine testing with tests per visit back to pre-COVID and revenues per visit also rising strongly, with a diverse customer base providing comfort.
• Prodia also has an increasing digital angle with the rising use of its app and a new app that tracks patients’ health just launched. Prodia (PRDA IJ) is too cheap.

• Dr Lal PathLabs Ltd (DLPL IN) reported 2% and 8% revenue and net profit decline in Q3FY23, respectively. Q3 results were dragged by an 80% YoY decline in COVID-19 revenue.
• While non-COVID revenue increased 9% YoY to INR4.78 billion, it declined 7% QoQ. In fact, Q3FY23 non-COVID revenue was the lowest over the last three quarters.
• Although diagnostics is a big and attractive market opportunity in India, the sector is overcrowded, leading to heated price competition and declining realization per test.

• We review Taiwan’s recently completed earnings season for both the Semiconductor and Tech Hardware sectors.
• Companies by and large missed expectations, with the % of revenue and earnings misses substantially higher for the 4Q22 earnings season than was the case for the 3Q22 earnings season.
• High inventory levels have persisted in both Semiconductors and Hardware, however appear to have leveled off at high levels rather than having become worse.

• We rate Bank Mandiri as our top pick with its attractive valuations including PEG ratio relative to solid returns and strong balance sheet – including liquidity –  metrics
• We also continue to favour Bank Negara, but it is our secondary value pick to Mandiri; Bank Central Asia, albeit fully valued, has impressive liquidity and return metrics
• Bank Rakyat had mixed returns in 4Q22, with pre-provision returns declining sharply QoQ although cost of risk continued to improve, due to better credit quality, thereby supporting post-provision profits

• Vonovia has a high negative correlation to interest rates. What if interest rates were to stabilize or fall?
• Feedback from discussion with Head of IR gives confidence in the long-term prospects of the group
• Share price -32% ytd. Vonovia trades on a ~70% discount to its adjusted NTA

• Mitsui OSK is up 460% since June 2020. Almost gravity defying. Strong Container profits have lead to high dividends. Now Shareholders hang on for one more big payoff
• Container rates have just about to reverted to pre-pandemic levels. Utilization is falling; Capacity coming on; Customers using spot. All points to potential losses next year for  Containers and ONE
• We expect a major profit decline=>div cut; How far could share price fall ? See the share price vs Shanghai Container Index correlation below.  We are bearish Mitsui OSK. 

• Sunpower Group (SPWG SP) announced it agreed to a 2-year extension of its CBs with two Chinese P/E funds that have been supporting it since 2017
• The extension is unexpectedly favorable to Sunpower equity holders and removes a major overhang
• After two difficult years with spiking coal prices and rolling lockdowns in China, the company can finally be valued on the merits of its GI business once again

• Loyalty points offer a significant incentive for consumers when deciding where to buy and many surveys confirm that points are a key factor in selection of online store.  
• With inflation biting, the big loyalty programmes are promoting points as a way to save on future purchases.
• Rakuten is by far the largest provider (10 pts above anyone else) and is enjoying strong growth – which could help adoption of its mobile store.

• Core earnings of Kunlun Energy (135 HK) rose 25.2% in FY22, providing solid evidence for its strength against peers. We are delighted to see dollar margin even expanded 4.1%.
• Pace of new project addition has not weakened as it secured 25 new projects in FY22. Collectively, they will increase sales volume by 3.2bn cu.m., 7% of FY22 volume.
• Net cash of Rmb13.6bn equals 28% of share price, making 8.9% ROE look decent. Market earnings forecast is too low; and even so, it trades on just 7.2x FY23 PER.

• Pokarna Ltd (POKR IN) is principally engaged in the business of quarrying, manufacturing & processing and selling of Granite & manufacturing and selling of Apparel under the brand name ‘Stanza’.
• One of the key audit matters related to IT systems risk, and these are reflected by some of the accounting misclassifications.
• Other forensic concerns include high cost of debt on and ICDs and director loans, added WC burden, inventory valuation, etc.

• Capital Expenditure – New Investment in Mexico Plant in 2023
• The company achieved a solid performance in its Recycled Lead business and Power Solutions business with a revenue growth of 18% and 13%, respectively, as compared to 2021.
• The revenue for Recycled Lead business and Power Solutions business was RMB2,413 million and RMB10,433 million respectively. 

• Chinese restaurant sector could see 15% YoY revenue growth in Q1 2023, as Total Retail Sales of Meals in China rose 16.4% YoY during Jan-Feb 2023.
• Yum China Holdings Inc (9987 HK)‘s 1Q23 OP may reach a record high of $350m, and annual profitability is expected to double as restaurant footfall recovers.
• We suggest buying Yum China for potential multiple expansion due to rapid profitability growth.

• Telekomunikasi Indonesia (TLKM IJ) results reflect a company increasingly digital in nature with legacy services fading away and an increasing focus on building both quality infrastructure and subscribers. 
• Despite losing subscribers last year, customer data consumption picked up and the ARPUs also improved reflecting a more profitable subscriber base. Indihome continues to see growth in its customer base.
• Telkom continues to strengthen its presence in the cloud business and data centres as future growth drivers. Valuations are attractive versus historical levels with strong growth prospects ahead. 

• AKR Corporindo (AKRA IJ) booked an impressive set of numbers significantly above consensus with net profit increasing +117% YoY driven by strong performance across all segments.
• Trading & Distribution will be driven by both the demand for petroleum products together with chemicals, especially from the increasing number of smelters in Indonesia, both for copper and nickel.
• JIIPE industrial estate booked 44.5 ha of sales, above guidance, with expectations for 70-75 hectares of land sales this year. Valuations are significantly below the historical average and consensus low.

• FY22 is definitely bad for Shenzhen International (152 HK) given the 64.9% profit plunge. However, negative contributors like Shenzhen Airlines and exchange losses will be removed in this year.
• Earnings for Shenzhen Expressway (548 HK) will improve and 1Q23 has witnessed good traffic recovery. Logistics profit will benefit from higher occupancy, REIT issuance and new projects.
• Upside will come from logistics park transformation with profit from Yicheng Qiwanli pre-sale potentially to be booked. Consensus earnings forecast of HK$4.1bn is at low-end of our estimate. 

• Seven & I has revamped its corporate board and announced an updated MTP that improves capital allocation. However…
• Activist investor ValueAct has turned hostile and is seeking to replace the President and three other directors
• The stock price has declined by 12% from its year high and we see substantial upside to our intrinsic valuation

• Consensus estimates suggest that Nitori Holdings (9843 JP)‘s gross margin will experience a sudden change affecting profitability for a few quarters, before returning to 6-8% below the long-term trend.
• We see no apparent reason for a drastic change in Nitori’s profitability and expect it to remain slightly below trend, in line with guidance.
• Nitori is expected to reach ¥140bn and ¥150bn OP for FY24 and FY25, with valuation at 13.3x and 12.4x OP. This is reasonable given Nitori’s rare history of low multiples.

• Meituan reported C4Q22 total revenue 4% higher than cons. Non-IFRS net margin beat cons. by 0.4ppt due to strong cost control during lockdowns.  
• Meituan has limited options against Douyin’s fast expansion of new service categories and customized offerings. The competition against Douyin will continue to pressure the in-store business in the long run.
• Maintain SELL and cut TP to HK$125. Our TP implies 3x PS, 10x PE and 1x PS for on-demand delivery, in-store, and new initiatives, respectively.

• In-depth presentation of retail digitalization raises expectation of retail spin-off. Asset disposals and increased DPS potential 2H catalysts
• Limited impact from trade tensions; oil tailwind
• Following 2 years of single-digit earnings growth, growth is likely to accelerate to double digit as headwinds from strong euro/GBP and weak oil prices eases and global economy continues to rebound.

• Zydus Lifesciences Ltd (ZYDUSLIF IN) reported total revenue of INR43.6B, up by 20% YoY and 6% QoQ, in Q3FY23. Key markets, India and the U.S. continued to deliver robust performance.
• U.S. business is on track to register QoQ growth in near-term, with the launches of new products. Zydus plans to launch 2–3 transdermal products in U.S. in FY24.
• For its India business, the company aims to outperform the industry growth sustainably in the medium to long term. Lipaglyn is expected to be among top 25 products of India.

• Home First Finance (HOMEFIRS IN) lends to a customer segment exposed to high income volatility.
• Soft bounces are used by customers to manage their cash flow, with bounce charge collection done on a best-effort basis, management attitude towards financial discipline warrants attention. 
• While there may not be any immediate asset quality issues, caution is warranted. 

• Indosat (ISAT IJ) has come back from being the loss-making underdog amongst the Indonesian telcos and is now well and truly on the rebound, with significant potential upside.
• The acquisition of Hutchison’s “3” has propelled the company into the number two spot in terms of market share and enabled better quality coverage after a well-orchestrated merger. 
• Indosat now has a 4G footprint in Java greater than Telkomsel and with significant potential to gain share ex-Java, which provides higher returns. Valuations remain attractive. 

• Interim results beat with strong results across most business lines
• Life insurance new business value growth reversed to positive growth in 2Q and should accelerate
• Fair value trimmed to HKD98 but headwinds abating in 2H

• Net profit up 19% YoY on strong revenue growth. New order flow remains decent.
• Maintain IDR 2,300 TP, valuations look attractive
• With a diversified portfolio of private construction and public infrastructure projects, WIKA offers broad exposure to Indonesia’s infrastructure investment growth

• Micron earnings this week, will provide insight on the outlook for the memory chip space.
• The Taiwanese market has substantially lagged the surge in the Philadelphia Semiconductor Index.
• Chinese firms are trying to poach engineers from TSMC and UMC by offering 2-3x their salaries.

• Samsung FN REIT announced its IPO book building results. The IPO price was determined at 5,000 won per share. The demand ratio was 24.88 to 1. 
• The core investment thesis of Samsung FN REIT is that it is the only publicly listed Samsung affiliate that provides REIT services.
• It is a stable business with excellent locations for its existing properties and the company is expected to provide 5.6% annual dividend yield in the next three years.

• In 4Q22, the growth rates of total revenue and most business lines are better than our expectation.
• The operating margins have stayed at a low level for the third quarter.
• We believe the stock has an upside of 45% and a price target of HK$204 for year end 2023.

• After posting a decent FY22 result, earnings momentum for CIMC Enric Holdings (3899 HK) should sustain, underpinned by clean energy recovery and chemical and environmental equipment demand.  
• 2M23 new orders growth stayed healthy at 10.7%, evidencing positive demand outlook. Hydrogen Energy is a growing driver as revenue will reach Rmb700m in FY23 and Rmb3bn in FY25.
• The stock’s PERs of 11.7x and 9.5x for FY23 and FY24, respectively, appear inexpensive in view of 19% earnings CAGR. Net cash position also adds an appeal to us.

• Meituan (3690 HK) reported 4Q2022 results. Revenue increased 21.4% YoY to RMB60.1bn (vs consensus RMB57.7bn) while reported operating losses dropped to RMB732m (vs consensus RMB1.4bn) from RMB5.0bn in 4Q2021.
• Covid outbreak in China in 4Q2022 led to strong growth in food delivery service revenues, however, losses have widened compared to 3Q2022 due to increased rider costs and others.
• We expect Meituan’s top line growth to slow down and margins to remain under pressure with Douyin’s entry into food delivery and the company’s expansion into Hong Kong.

• Chinese Apps’ time on site decreased to 26.7 hours in 2022 from 28.5 hours in 2021.
• The Press and Publication Administration approved 27 imported games in March.
• Douyin launched a medium-duration video app, which can be Bilibili’s competitor.

• China Power International (2380 HK) will enjoy another year of strong earnings improvement in FY23, as coal-fired segment returns to profit and new energy capacity drives growth.
• Solar and wind capacity will increase 66.5% and 23.1%, respectively, raising new energy’s proportion to over 70%. Profitability for hydropower also looks to recover in this year.
• There is huge room for asset injection from SPIC given the parent’s new energy capacity of 139GW, with only 20GW in CPI. Its FY23 PER of 8.4x PER is attractive. 

• Hanmi Pharm (128940 KS) posted revenue of KRW1.33T in 2022, the largest ever in the company’s history. Strong product competitiveness driven by high R&D investment strengthened Hanmi’s dominant industry positioning.
• In October 2022, Hanmi’s US partner Spectrum Pharmaceuticals launched Rolvedon in the U.S. market. During 4Q22, Rolvedon generated revenue of $10.1M. Rolvedon is expected to report $100M revenue this year.
• By leveraging on its biopharmaceutical development and manufacturing capabilities, Hanmi plans to launch a large-scale CMO and CDMO, which can be the new growth engines of the company.

• RBC analysts noted that luxury fashion buying is dwindling.
• Luxury fashion buying has been down to sportswear, according to RBC analysts. RBC: “Squeezed consumers are turning to sportsswear. 
• NIKE (NYSE:NKE) recently released its Q3 earnings report which beat analyst estimates. 

• The pandemic has been a catalyst for change, propelling the edtech sector to unprecedented heights as traditional educational institutions scrambled to adapt.
• However, as we enter 2023, the landscape has shifted significantly from the edtech boom of 2021.
• Companies now face the challenges of customer retention, unit economics, and the looming shadow of inflation and recession concerns.

• First quarterly profit in 4Q’22 (first amongst the 3 main emerging brands) has raised expectations of full year profitability in ‘2023
• Launch of BEV will increase production, R&D, platform depreciation and marketing costs
• Despite our expection of revenues doubling y/y in ’23, profitability may not increase accordingly

• After peaking in H122, container rates have tumbled back to pre-Covid levels in Q123
• We believe core profitability has also declined to pre-Covid levels for some carriers
• Evergreen Marine Corp (2603 TT) no longer looks expensive, trading at 70-75% of replacement  cost.

• JD Health reported 2H2022 results. 2H revenue increased 55.5% YoY to RMB26.5bn (RMB24.2bn) while fall in GPM and an increase in fulfilment costs led to operating losses during the period.
• Product revenues (JD Pharmacy) continues to account for a majority of JD Health’s revenues that generate lower GPM compared to Marketplace and other revenues.
• JD Health’s share price has moved up over the last few months but further decline in GPM  could pull the share price down suggesting it could be a Good Short.

• 2023 will be a transitional year for SD Biosensor (137310 KS), with revenue and earnings taking a massive hit due to the declining revenue contribution of the COVID-19 tests.
• The company is reaping the benefits of its continuous effort in adding new growth engines through M&A and global expansion of its all-in-one molecular diagnostic system called the Standard M10.
• SD Biosensor is set to enter the US market through the acquisition of Meridian. With ~40% share of the global IVD market, the US has big potential.

• Yilli’s aggressive marketing in 2Q raised market concerns over intensifying competition
• An outright price war is unlikely as its closest competitor, Mengniu, is not willing to follow suit
• Margin remains under pressure on rising input cost
• Trimmed fair value to CNY22.5 (from CNY26.1)

• Net profit up 3% on higher toll revenue and operating margin expansion.
• Longer term concerns remain, maintain IDR4,900 TP.
• With 62% of Indonesia’s toll roads by length, JSMR offers exposure to Indonesia’s ongoing urbanisation and infrastructure spending plans. Near term, government intervention in toll tariffs will likely weigh on the stock.

FY22 was the first year since its inception that CVC Income & Growth (CVC IG) saw a negative NAV total return (TR). Its euro and sterling share classes produced NAV total negative returns of c 8.3% and 6.8%, respectively, which compares with 3.3% and 1.9% negative TRs by the Credit Suisse Western European Leveraged Loan Index (CS WELLI) in euro and sterling terms, respectively. This was primarily the result of downward mark-to-market valuation adjustments (resulting in unrealised losses for CVC IG), driven by price declines in the European loan market amid higher risk aversion. Meanwhile, defaults in the European loan market remained low at 0.4% in 2022, based on the Morningstar European Leveraged Loan Index (with no defaults in CVC IG’s portfolio). Subsequently, European loan markets rebounded strongly in January and February 2023, leading to 6.7% and 6.9% returns for CVC IG’s euro and sterling share classes, respectively (therefore allowing CVC IG to almost fully recoup the 2022 loss).

• Qualcomm has appeared on the radar for attractive dividend plays.
• The current yield is among the highest in the sector and also appears safe based on historical data.
• There are a number of important risks that overshadow Qualcomm’s ability to consistently increase its dividend.

• Steelcase reported 4QFY23 on March 22 after the close, with a beat on adjusted EPS and revenues. Guidance for FY24 beat estimates, then in print.
• 4QFY23 adjusted EPS was $0.19, above our estimate of $0.12 and consensus of $0.11. GAAP EPS was $0.13, above our estimate of $0.06. 4QFY23 revenue of $802 million was a ~$50 million positive surprise.
• The positive earnings and revenue surprises were due primarily to core corporate business in the Americas and EMEA segments.

• UI is coming off a strong performance in the December quarter but should continue to show improving margins as the Company maintains products in stock and at higher prices
• The March quarter can be seasonally challenging. For Ubiquiti, it could end up being a period where customers are able to find the products they are looking for in stock 
• In the March quarter Ubiquiti has maintained a higher level of product availability than what we had been observing in the prior year

• 1H18 net profit of MYR3.83bn grew 14% yoy, driven by higher interest income growth and continued cost management. Interim dividend of 25 sen consisting of 15 sen cash portion and 10 sen electable portion.
• Group gross impaired loans ratio picked up in 2Q largely due to deterioration in Singapore corporate book (classified Hyflux group exposure of MYR1.95bn as impaired and provisioned ~RM315.1mn in 2Q).
• Fair value reduced to MYR11 implying 1.6x p/b. FY18 targets were maintained. Focus ahead on continued costs controls and margins after taking cautious approach on liquidity in 1H.

• Headlines for GoTo 4Q2022 and FY2022 headlines do not tell the whole story, given large one-off charges for goodwill write-downs, without which significant progress has been made towards profitability. 
• GoTo significantly reduced incentive&product marketing spending in 4Q but also posted decent growth, albeit at a slower pace, with an increasing emphasis on building foundational products to drive future profitability.
• 1H2023 will see slower headline growth from a COVID base but 1Q2023 should see improving take rates and CM breakeven. This is the transient stage of the long-term GoTo story.

• Oisix is Japan’s largest online food retailer but sales were flat in 1Q-3Q2022 as people returned to work and cooked less, and profits suffered as inflation brought increases in costs. 
• The company’s US operation also shrank as fewer people bought food online now that many Japanese are back to normal working patterns again.
• But other international subsidiaries and its expanded wholesale businesses at home all grew strongly.

• XPeng Inc. has predicted that revenue and vehicle deliveries will nosedive in the current quarter after the Chinese electric-vehicle (EV) upstart reported slowing sales growth and a loss that nearly doubled in 2022.
• The company’s revenue will likely plunge 43.7% to 46.3% year-on-year to between 4 billion yuan ($581 million) and 4.2 billion yuan in the first quarter of 2023.
• The outlook is based on an estimate that its deliveries will plummet 45% to 47.9% year-on-year in the same quarter to around 18,000 to 19,000 vehicles.

• China Huarong Asset Management Co. Ltd. expects to post a net loss of 27.6 billion yuan ($4 billion) for 2022.
• Citing factors including volatility in the capital markets leading to declines in the value of some assets, business transition and the real estate industry slump.
• The bad-debt manager said it adjusted its business structure last year, resulting in less nonperforming asset acquisition and restructuring and less revenue.

• Once a major hit with young women, Samantha Thavasa has struggled to find relevance in the past five years.
• Despite an injection of capital and management from new parent, Konaka, the business has continued to close stores.
• While Konaka is restructuring the business, the brand’s low levels of recognition with the younger generation will likely mean further retreat.

• There’s been a major disconnect between performance of the Philly Semiconductor Index and the Taiwan market recently.
• Semi optimism has picked up substantially in U.S. markets and institutional favor towards the Taiwan market could improve as a result.
• We indentify US$1bn+  market cap stocks most under-held by institutions, as well as those who may be most at risk of a short squeeze.

• 4Q22 results release on 23rd February 2023.
• Expect NIM expansion of ~20bps quarter-on-quarter (QoQ) for 4Q22E, while FY23’s NIM guidance and updates on its Citi consumer business integration would be of focus.
• Citi acquisition to add to full year NIMs and growth prospects from FY23, despite potential uptick in asset quality risks, which should be manageable.

• If WuXi Chemistry’s performance shows downward trend, the overall performance growth won’t be satisfactory. The negative growth of WuXi DDSU means that ineffective competition for domestic innovative drugs is decreasing.
• The asset structure is shifting from light asset to heavy asset.It’s particularly crucial whether business model of “one-stop end-to-end service+royalty income” can enable WuXi AppTec to explore new growth points. 
• The current sentiment on CXO is “fragile” because CXO doesn’t have performance sustainability and stability, with “risk discount” problem. Its valuation haven’t reached inflection point. Without industry beta,alpha is useless.

• China approved its first homegrown Covid-19 vaccine using the advanced mRNA technology, months after the country pivoted from its “zero-Covid” strategy toward living with the virus.
• The vaccine, developed by CSPC Pharmaceutical Group Ltd., was approved for emergency use by the National Medical Products Administration.
• The shot, known as SYS6006, primarily targets the omicron variant BA.5 and can be stored at 2 to 8 degrees Celsius (36 to 46 degrees Fahrenheit) “for a long time,”.

• Tencent reported 4Q22 top line/ bottom line of 0.3%/(3.7%) vs cons. Online ads is stronger, while gaming and G&A slightly missed our est. 
• We expect that ads will be the main driver, thanks to video accounts. Gaming will have better performance after more approved game codes.
• We raise 2023 ads growth from 12% YoY to 15% YoY. Raise TP to HK$ 433. Maintain Tencent as one of the top picks in China Internet

• Following the collapse of SVB and Signature Bank last week, Japan’s big four banks have fallen by around 15% due to their exposure to US government bonds.
• However, the Japanese banks have managed the interest rate risk far better than the collapsed US banks and therefore, we feel the price drop is unwarranted.
• With Japan likely to scrap its zero rates policy, we think this could be a rather intriguing opportunity to make generous gains on the long side in Japan’s banking sector.

• Good news from Nike’s Q3 report, which bodes well for Asics March quarter
• Why was Nike’s stock down? Margins were down 330bps on inventory mark downs
• Running is recession proof according to the footwear makers themselves

• We believe both 4Q22 and 1Q23 can be weak quarters.
• However, we believe operating losses will shrink significantly in 4Q22 and 2023.
• We believe the stock has an upside of 77% for year end 2023.

For our next Corporate Webinar, in partnership with the SGX, we are glad to welcome Uni-Asia’s Group CFO, Lim Kai Ching.

In the upcoming webinar, Kai Ching will share a short company presentation after which, he will engage in a fireside chat with Smartkarma Insight Provider, Osbert Tang, CFA . The Corporate Webinar will include a live Q&A session.

About Uni-Asia

Uni-Asia Group Limited is an alternative investment group specialising in creating alternative investment opportunities and providing integrated services relating to such investments. The Group’s alternative investment targets mainly include dry bulk ships and properties. The Group also has extensive know-how and a network relating to such alternative investments and provides services relating to these investments. The two main alternative asset classes the Group focuses on are Shipping and Property.

• Three major catalysts of Poya International include easing of mask mandates/COVID restrictions, strong growth in dividends and earnings, and market share gains from competitors. 
• Poya International is the dominant supplier of cosmetics, health care products, personal care products and household products in Taiwan.
• The company continues to execute its business strategy better than its competitors and this is evidenced in its strong growth in profits and dividends in the past year. 

• As we expected in the preview, total revenue stopped decreasing in 4Q22.
• WeChat advertising recovered in 4Q22 earlier than we expected in the preview.
• We believe game-related revenues will grow by 8% in 2023 and 19% in 2024.

• CSPC Pharmaceutical Group (1093 HK) reported 11% YoY revenue growth in 2022. The finished drug business maintained steady growth in 2022, with a continued increase in contribution from new products.
• Within the next 5 years, more than 40 innovative drugs are expected to be approved, which will provide continuous momentum for the company’s development.
• In March 2023, CSPC’s COVID-19 mRNA vaccine SYS6006 has become the first independently developed mRNA vaccine product in China that has been granted for emergency use.

• Tencent (700 HK) reported 4Q2022 results yesterday. Revenue increased 0.5% YoY to RMB145bn (vs consensus RMB)143.5bn while adjusted OP increased 30.1% YoY to RMB28.4bn (vs consensus RMB37.2bn).
• Online advertising revenues saw a 14.8% YoY increase during 4Q2022 after 4-consecutive quarters of decline with January and February showing sustained recovery.
• Though Domestic gaming revenues declined in 4Q2022, with new gaming licenses and international expansion, we expect gaming revenues to start growing from 1Q2023.

• While adjusted net profit of Tongcheng Travel Holdings Ltd (780 HK) plummeted in 4Q22, the positive momentum in 1Q23 as revealed supports a sharp recovery in FY23.
• Its huge exposure to lower-tier cities will fuel outlook while increase in monetisation will support profitability rebound. Success at Blackwhale membership program is another growth engine.  
• Management is confident that revenue growth and better efficiency will lead the return of FY23 margin to pre-pandemic levels. Net cash position (12% of share price) is an added strength. 

• Tencent Music (TME US) reported 4Q2022 results yesterday. Revenue decreased 2.4% YoY to RMB7.4bn (vs consensus RMB7.3bn) while reported operating profit more than doubled to RMB1.4bn (vs consensus RMB1.3bn).
• Online music revenues grew 24% YoY while social entertainment business continues to see decline in paying users and ARPU. Margin improvements were driven by spending cuts.
• Social Entertainment is losing its importance and the segment continues to remain under pressure due to competition from other platforms.

• International Housewares Retail (1373 HK) is an interesting value/growth (5-10% CAGR) play with a high-dividend yield of >10%, trading at 8.1x FY23 PE. 
• The claim to fame for this company is the investment of legendary HK mid/small cap investor David Webb (who has a 6.9% stake in this company). 
• At a market cap of 2 bn HKD, the company has about 400 mn HKD net cash (20% of market cap), making it 6.9x ex-cash PE.

• Del Monte Pacific reported a steep decline in profits led by a fall in gross margins and a steep rise in interest costs for the quarter ending 31st Jan 2023.
• The company’s gearing has risen to 5.8x led by (1) the refinancing of preference shares and expensive debt (2) acquisition of the Kitchen basics brand (3) increased working capital loan.  
• Del Monte’s precariously bloated debt levels and tighter operating conditions, given inflation-led cost pressures and moderating demand, in the current high-interest rate environment heightens the company’s financial risk.

• The stock is down sharply over the past few weeks as investors price in higher interest rates and weaker spending on durables
• Mitsubishi recently unveiled its mid-term plan and further details on its electrification strategy
• If management can hit its targets, the stock would have significant upside. We have our doubts

• Nvidia CEO to unveil new developments at the company’s GTC developer conference tonight Asia time. TSMC and ASML could have read-throughs from the event given their key roles.
• AUO’s chairman said that he expects PC panel demand to return to normal levels later this year; indicating another sign of potential improvement in the PC and display space.
• PC maker Asustek was a top loser in the past week; we highlight it as a potential Long/Short opportunity.

• With the impact of cost-cutting and monetisation wearing out, consensus looks overly aggressive to expect revenue and OP CAGRs of 24% and 35% respectively over the next two years.
• Based on Pinduoduo (PDD US)’s revenue and cost trends discussed below, we think the steady state OP margin could be substantially lower than consensus.
• Expecting consensus to downgrade expectations, we don’t think it is worthwhile paying up to 45.0x FY+2 OP (on our steady-state OP margin) for Pinduoduo at its current EV of $80.5bn.

• The Korean government removed mask mandates for public transportation in Korea as of Monday, 20 March including in buses, taxis, and subways.
• There are four major reasons why it will take much longer time for most people in Korea to stop wearing masks. 
• As millions of people stop wearing masks in the coming year, there will be clear, visible higher demand for cosmetics, which should benefit companies such as Korea Kolmar. 

• GoTo (GOTO IJ) reported 4Q2022 and full-year 2022 results yesterday. Gross revenue increased 18.0% YoY to IDR6.3trn while adjusted EBITDA losses declined to IDR3.1trn vs IDR6.5trn in 4Q2021.
• However, adjusted EBITDA as % of net revenues has increased considerably compared to 3Q2022 due to increase in variable costs.
• GoTo’s ambitious profitability target would prevent the company from fully exploiting growth opportunities which will lead to further decline in growth rates.

• Over the past 12 months, we have written insights on 14 stocks in the small/mid-cap space with high dividend yields, inexpensive valuations, and a great margin of safety. 
• We re-examine these to shortlist 3-4 names of our highest conviction amidst the current macroeconomic climate.
• Our high conviction shortlist includes Water Oasis (1161 HK), Perfect Medical Health (1830 HK), The Keepers Holdings (KEEPR PM), and Taste Gourmet (8371 HK).

• Neuren Pharmaceuticals (NEU AU)‘s lead product Daybue (trofinetide) has obtained FDA approval for the treatment of Rett syndrome in adult and pediatric patients two years of age and older.  
• Daybue is expected to be available in the US in April, 2023. Neuren is eligible to receive royalties on net sales of trofinetide in North America, plus milestone payments.  
• Geography expansion of trofinetide (mainly European approval and launch), label expansion possibility of trofinetide, and Neuren’s pipeline progress can act as potential upside catalysts for the stock.

• Fu Shou Yuan (1448 HK)’s 2022 results were below our expectations. Affected by the 22Q4 pandemic, the performance recovery in 22H2 was lower than expected. 
• The high demand due to soaring death rate since 22Q4 would be reflected in 23H1 results. Together with low base last year, strong performance rebound in 23H1 is worth expecting.
• The reason behind short-term trade and long-term hold is different. But considering the Company has no obvious flaws in its long logic, every pullback can be a good buying opportunity.