Bottom-Up Equities

• Rex International Holding (REXI SP) will report results around 25/2/2022; we expect a major 2H21 performance inflection as the Norwegian Brage field cash flow is included from 01/01/2021.
• According to a press release on 13/1/22 the company is actively applying to uplist from Catalist to the mainboard. We see no reason why SGX should not grant this application.
• Rex’s Oman production has disappointed in 4Q21 but cash flow-wise shortfall should be made up by higher oil prices and Brage. Maiden dividend announcement should be forthcoming.

For our next Corporate Webinar we are glad to welcome the management team of Don Agro International (DAG SP):

• CEO, Marat Devlet-Kildeyev

• CFO, Artur Nazaryan

In their upcoming webinar, Don Agro management will share a short company presentation after which, they will engage in a fireside chat with Smartkarma Insight Provider, Nicolas Van Broekhoven. A live Q&A session will follow.

Don Agro (SGX: GRQ) is one of the largest agricultural companies in the Rostov region in Russia, the most fertile region of the country. The Group is engaged in the cultivation of agricultural crops and production of raw milk. Don Agro has a total controlled land bank of 67,340 hectares. The Group’s operations are situated close to the Azov and Black Seas and the Don River which house major international ports. In addition, Don Agro is the largest milk producer in the Rostov region and owns more than 4,000 heads of dairy cattle.

Corporate Webinars by Smartkarma Corporate Solutions feature discussions with IROs and Executives, discussing their companies, the challenges they face, and the opportunities in their sectors and markets.

• Samsung Biologics Co., (207940 KS) has denied its acquisition talk with Biogen Inc (BIIB US). With its current controversies, Biogen does not seem to be an attractive bet.
• The company is poised for strong growth in 2022, driven by its massive capacity expansion plans and portfolio diversification toward high-growth areas like cell & gene therapies and mRNA business.  
• With an increasing order backlog resulting from consistent contract win and expanding customer base, Samsung Biologics has strong revenue visibility.

• Bank Mandiri stands out amongst the top 4 banks in that it has chosen to push its digital services through Livin’ rather than a stand-alone digital bank.
• The bank has already made significant progress with Livin’ with 6m active users out of 30m customers and it is also developing wholesale digital banking through Kopra.
• Bank Mandiri remains a core proxy for the recovery in Indonesian economic recovery with an increasing digital edge and valuations are attractive versus historical levels.

• Shares of Moderna Inc (MRNA US) underperformed and fell ~32% YTD. Investors continued to cut exposure to stocks of COVID vaccine makers, including BioNTech, Novavax, CureVac, among others.
• In August 2021, Moderna announced the first share buyback plan. The company’s Board of Directors has authorized share repurchase for up to $1 billion with an expiry date in 2023. 
• We estimate Moderna may end 2021 with a total of ~$18.5 billion in cash, cash eq., investments and expect the company may boost share buyback in the future.

• The stock price has risen 13% since our last note, but we still believe there is an upside of 21%.
• The company is cutting employee benefits, from housing allowance to afternoon tea.
• We believe the operating loss will shrink significantly in the following two years.

• CLFD has been the beneficiary of communication service providers investing in their broadband networks to meet an increase in data traffic.
• The events of the last two years, namely the COVID-19 pandemic causing work/learn from home and Huawei and ZTE equipment replacement, were the reason for the boom CLFD has experienced.
• CLFD’s community broadband customer was incentivized to replace Huawei and ZTE equipment with reimbursement checks from the FCC.

• We maintain BUY rating with a target price of Bt21.0, derived from 18xPE’22E, +1SD from three years average trading range or 50% discount from Home improvement subsector.
• We expect ILM to report 4Q21 net profit at Bt135m (-6%YoY, +142%QoQ). QoQ recovery will be supported by an increase in revenue, thanks to stores sales recovery (SSSG at +13%YoY)
• We expect 2022E earnings to recover 46%YoY supported by revenue growth at +5.6%YoY to Bt8.5bn from; 1) a new products launch to attract new targeted  customers (low-ended and luxury segments)

• TPL remains unhedged to the price of crude oil with Permian Basin output rising. Total output in the Permian Basin is projected to surpass 5 million barrels per day 
• The increase in output would have an immediate benefit to TPL in the form of royalties and could generate incremental water and surface land easement revenue
• TPL’s stock has been selling off with the broader market in what we speculate could have to do with no action from TPL’s Board after the annual shareholder meeting

• Mercari is down 33% since 22 November, actually underperforming the 31% decline in Mothers. 
• YoY numbers for the US may only modestly beat the 20% growth target for the year and this reset of expectations may have been the driver of the decline. 
• However, we expect significant upside surprises on profitability and that is our focus.

• It is continuing to raise wafer price, and revenue/GM to reach ~NT$58billion/~39% and NT$60billion/~41.5% in 4Q21/1Q22 respectively. 
• It will plan to add 5-8k 28nm production capacity in 12A Tainan during 2H22, and we consider it is to secure customers’ demands.
• We do not see any sign to deteriorate for the 2nd half at this moment. 

• Hitachi Construction Machinery continues to trade under ¥3,000 following the revelation that it would not be bought out by Hitachi. 
• There was little new at its conference call following the Itochu stake purchase announcement save some potential positives on the logistics front. 
• Nevertheless, with the stock trading at five-year lows vs. TOPIX and Komatsu, and consensus looking light we are extremely bullish here.

• A blizzard of cost synergies we conservatively estimate at $500MM from lower distribution commissions, hosting costs, and cutting ATVI’s highly paid C-Suite.
• Multiple strategic benefits: Catalyzes Microsoft’s XCloud streaming game service and Game Pass subscription offering….potentially offers greater leverage for app store negotiations with Apple and Google.
• Accretive on valuation alone…MSFT is paying a 10% discount to ATVI’s 23x average forward PE from last few years. MSFT’s 11x forward P/S vs. ATVI’s 5.5x revalues ATVI’s revenues 2x.

• Baycurrent Consulting (6532 JP) reported 3QFY02/2022 results last week. Revenue for the quarter increased 39.0% YoY to JPY15.0bn while OP increased 57.5% YoY to JPY3.7bn.
• The company has revised both its revenue and OP guidance upwards for full-year FY02/2022E to JPY56.5bn and JPY21bn respectively.
• The company has already met 73.5% and 72.7% of its revenue and OP target, we expect earnings beat for the full-year as fourth quarter is the strongest.

• Our initial thoughts on Microsoft’s bid for Activision Blizzard were on the sceptical side given various signs of trouble at the company. 
• In contrast the majority of commentary on the deal has been somewhere between positive and euphoric though there are monopoly concerns from customers. 
• Yet the more we examine the implications the less we like this deal for Microsoft.

• Shift reported its 1QFY08/2022 results last week. Revenue for the quarter increased 51.5% YoY to JPY14.3bn while OP more than tripled to JPY1.95bn vs JPY548m a year ago.
• Both Enterprise and Entertainment segments saw strong growth in revenue as well as improvement in GPM during the period.
• Shift’s share price gained 7.4% following its earnings announcement and we expect the company’s strong earnings momentum to continue over the next few years.

• Teladoc Health, Inc. (TDOC US), the whole-person virtual care industry leader in scale, clinical breadth, and outcomes, reported 70% revenue CAGR over the last three years.
• The company expects 25% annual expansion in revenue per member, which together with 1–5% per year growth in membership will lead to 25–30% revenue CAGR during 2021–2024.
• Teladoc has a strong growth opportunity amid a large TAM of 298 million total insured lives in the U.S., of which the company has penetrated just 30%.

• This presentation runs through six current short ideas presented on a Smartkarma webinar on 22nd December.
• These are:  Atkore (ATKR), Danaher (DHR), Service Corp International (SCI), ABM Industries (ABM), Monro (MNRO), and Renewable Fuels (REGI).
• The presentation also summarizes Two Rivers’ short idea generation process.

• According to public news, the recent bribery scandal of Aier Eye Hospital Group (300015 CH) has raised widespread concern. Shenzhen stock Exchange also issued a letter of inquiry.
• The development model based on M&A funds helps rapid expansion, but also leads to profit orientation and large goodwill balance, indicating potential risks.
• The biggest risk is the revolutionary technology/drugs to disrupt the business value of Aier’s medical services. So, Aier could be a short-term trade, but not a long-term hold. 

• Our updated NAV analysis of SK Square suggests an implied price of 92,050 won per share, representing 46.3% upside from current levels.
• Among the affiliated companies, OneStore and SK Shieldus are expected to be listed in the Korean stock market in 1H 2022.
• MSCI is likely to increase the weight of SK Square in the MSCI Korea Index rebalance announcement on 10 February. 

• Short term interruption from chips and LFP battery shortage would be eased in 2H2022.
• Xpeng’s monthly delivery would ramp up to 30,000 cars with the launch of G9 in 3Q2022.
• We estimate Xpeng’s net profit will turn positive at the end of 2022, which would trigger further re-rating of the stock to HK$300 (or US$77).

• Following a strong third quarter the company has raised the full year revenue and OP outlook by 3.0% and 7.3% respectively due to stronger than expected overseas convenience store performance.
• Moreover, the company continues to raise the Speedway synergies with the new medium-term plan expecting Seven & I Holdings (3382 JP) to double the EBITDA and EPS through 2020-25.
• After rallying 65% in 1H21, shares took a breather during the last seven months. We think the timing is right to start the second half of Seven & I’s rally.

• Microsoft has agreed to acquire Activision Blizzard for $95 per share (+45.3% vs. undisturbed) which values the company at $68.7bn in EV. 
• ATVI had been under pressure since the middle of last year facing various sexual harassment allegations, but CEO Bobby Kotick will not be replaced. 
• Like with ZeniMax this deal features a demanding valuation for a number of IPs which have seen better days… but there is Call of Duty…

• We think the chance for GlobalWafers mergence case to have the final approval could be high. Even if it finally failed, the raw wafer supply should be full until 2024.
• This deal was granted by seven governments and organizations already. And it is still under review of Chinese and Japanese governments.
• The deal will not change the worldwide raw wafer supply status, especially such supply tightness. To our understanding, the secrets to achieve success are cost reduction and resource management mostly.

• PT Surya Citra Media Tbk (SCMA IJ) looks undervalued despite its increasing digital credentials through Vidio.com which continue to increase paying subscribers and MAUs
• Advertising spend continues to see a strong recovery, even through PT Surya Citra Media Tbk (SCMA IJ) has lost some audience share to Media Nusantara Citra (MNCN IJ). 
• The company has a significant local content pipeline for 2022, especially for Vidio.com and valuations look attractive versus history plus there is now a market value for Vidio.com.

• Los Andes Copper Ltd (LA CN)  is a Tier-1 copper asset in Chile; recent M&A activity in Chilean copper assets has increased substantially highlighting the undervaluation of Los Andes.
• Hired new CEO in October 2021 to increase investor awareness; multiple catalysts to unlock significant value in 2022. 
• Current Market Value at 330M CAD significantly undervalues asset. Fair Value at 30 CAD/share or 150% upside.

• Horta-Osorio Is Out:Credit Suisse Group (CSGN.VX) (“Credit Suisse”) Chairman Antonio Horta-Osório abruptly resigned on January 16, 2022, following breaches of quarantine rules in both Switzerland and the United Kingdom;
• Lehmann Not Lehman:With CEO Gottstein’s alleged resistance to strategic change, we remain cautious that the current strategic direction of Credit Suisse will not be maintained;  and   
• Blunders Could Force Sale:There have been numerous costly high profile blunders at Credit Suisse in 2021. A reversion to the “Bad Old Days” could force a sale.   

• 2021 full year ADT has grown 29% year-over-year compared with 2020. Trading activities in December continued to slowdown to year-end given the relative weak market sentiment and policy uncertainty.
• We expect HKEX (388 HK) upcoming quarterly earning release (on Feb. 24) will be muted and estimate its 4Q21 revenue and profit will decline 3% and 7% year-over-year respectively. 
• However, we remain bullish on HKEX (388 HK) with the view that China economy will likely rebound in 2022, which will drive the rebound of IPO activities and trading volume.

• The high price of EJiao discouraged consumers, leading to increasing inventory backlog in the distribution channel and reduction in payment collection, which finally resulted in Dong-E-E-Jiao’s net loss in 2019.
• Although the performance has showed a recovery trend since 2020,concerns on raw material shortage, low inventory turnover, single product structure, high selling expense ratio and fierce market competition still remain.
• There is still a long way to go for the Company to get back to peak, so we are conservative about Dong E E Jiaoco Ltd A (000423 CH)’s outlook.

• Another Troubled Bank Deal In Asia Adds Another Managerial Distraction;  
• DBS Agreed to Acquire Citigroup’s Taiwan Consumer Franchise for SGD 2.9 bn After Three Taiwan Banks Couldn’t Make This Deal Work; and
• In Addition, DBS’ Fundamentals Continue to Weaken, With Lower Fees, Compressed Margins, and Modestly Weaker Credit.

• Fast Retailing (9983 JP)’s share price is up 10% after beating 1QFY22 consensus revenue and OP by 1.4% and 20.6% respectively.
• However, the share price move feels unwarranted given that the beat was driven by mostly one-off/temporary factors in the company’s less significant segments
• We think this is an opportunity to short Fast Retailing as Uniqlo seems to be slowing rapidly in the Chinese market.

• The company’s main product, filers, are no longer key features in Electric Vehicles thus earnings will be pressured. 
• Venture into air-purifying business is commendable yet it may not plug the hole immediately.
• Foreign investors in the company are mainly looking for exposure in the auto-related business, so the change into air purifier may cause them to sell. 

• Paramount Bed Holdings Co Lt (7817 JP) reported record-high sales and profit during six-month ended on September 30, 2021, driven by strong domestic demand due to recovery from the pandemic.
• Each of businesses are receiving steady inquiries from market and is expected to perform strongly. Management raised full-year guidance after a strong Q1 results.
• New products are driving margin for the company. Nemuri SCAN continues to perform well as remote monitoring using sensor technology is receiving more attention amid the COVID-19 pandemic.

• Passenger traffic momentum of Air China Ltd (H) (753 HK) has picked up in Dec and it also narrowed down it gap against China Southern Airlines (1055 HK). 
• The resurgence of international traffic over the next two years with more border openings will provide significant benefits to Air China, helping it to recover its depressed load factors.
• Air China outperformed HSCEI by 3.6pp YTD, but we still consider its P/B of 1.0x, or around historical average, not stretched. Strength of Rmb is also a potential positive factor.

• In this insight, we discuss the long-short trade idea of going long Korea Investment Holdings Co, Ltd. (071050 KS) and going short Meritz Financial Group (138040 KS). 
• There has been a massive divergence in share prices of Korea Investment Holdings and Meritz Financial Group in the past year and we believe this divergence has been too excessive. 
• There is a very high likelihood that on 9 February, MSCI will announce an inclusion of Meritz Financial Group in the MSCI Korea index. 

• Elastic NV (ESTC US)  has grown its ARR from ~$207 million as of Jul-18 to ~$760 million today and may become a multi-billion dollar unicorn in the future.  
• We like the subscription-based freemium business model, strong net expansion rate, and acceleration in revenue growth of Elastic Cloud business, which currently represents ~33% of total revenue. 
• Elastic Search is one of the most popular search engines globally, and the company’s products have been downloaded more than 350 million times since 2013. 

• The small market space of peripheral T-cell lymphoma indication and the fierce market competition of other indications, products and candidates make the Company’s future commercialization performance uncertain. 
• The continuous large investment in R&D, high selling expenses, and declining R&D expending capitalization would further drag down profitability.
• So, our view is that we are conservative about Chipscreen Biosciences’s outlook at the current stage.

• Evergrande Is Breaking Down More Rapidly Than Banks Have Kept Up;
• Minsheng Has Significant Exposure to Evergrande and Other Problem Developers; and
• Minsheng Is Not Insolvent, But It Is Getting There Very Quickly.

• Crown’s Board which  had rejected two prior Blackstone offers is now seen as embracing its latest bid, but negotiations will be non-exclusive.
• Our contention was that due diligence undertaken by Blackstone would result in a higher bid. They already hold 9.9%.
• Stock has long been dead pooled at AU$11 due to regulatory uncertainties prompted by New South Wales investigative report of alleged irregularities in VIP and money laundering.

• Weaker Result Across Almost All Geographic Segments – Led By Negative Jaws;    
• Credit Modestly Weaker, Although Reserve Coverage Remains Strong. Watch For Credit Turn; and
• Progress On Asian Consumer Exits, But Sea Change In View On Mexico.  

• Money Forward reported full year results post close on Friday. The stock will react negatively…probably.  
• The stock is down 45% from its 52-week high, along with most high growth SaaS stocks 
• The fundamentals, earnings and growth remain intact, but valuations are unlikely to recover as excess liquidity drains out of the market.  One for patient LT investors

• CEO Hashimoto told the Nikkei newspaper that customers are ordering silicon wafers at higher prices before they are made, even as production capacity is being increased.
• SEMI and TSMC announcements point to rising wafer demand for at least another two years. SUMCO’s expansion plans suggest at least three years.
• We continue to recommend buying into the current weakness for the medium to long term.

• Green Cross (006280 KS) is currently waiting for marketing approval from the FDA for its immune globulin intravenous injection, which will mark its entry into the U.S. market.
• The company will start commercializing its hemophilia A treatment, GreenGene F in China market this year. As a third-generation product, GreenGene is expected to gain substantial market share.
• Green Cross shares remained subdued last year, as the company could not finalize a contract manufacturing deal for COVID-19 vaccine.

• We have been sceptical about Krafton’s valuation and ability to generate new hits since its listing. 
• After treading water close to its IPO price for five months the new year has seen the stock crater 25%. 
• In our view the bad news is just getting started and that is despite PUBG: Mobile still doing well in China and India.

• Korea Ratings (034950 KS) is the 12th company in our Korea Small Cap Gems series. Korea Ratings is one of the leading players in the credit ratings industry in Korea.
• Korea Ratings has a combination of excellent business moat, stable 5-8% annual sales growth, 20% ROE, and 35%+ operating margins, and high dividend payout of 65%
• For the long-term investors (2-3+ years horizon) that seek consistent 20%+ total annual compound returns with low volatility, Korea Ratings is an excellent pick in our view.

• We maintain WICE with a BUY rating while roll over target price to Bt27.10 (previous TP:16.70) ,derived from 27.4xPE’22E ( +0.5 S.D. five-year average), implies 40% discount to Thai transportation 
• We expect strong earnings growth momentum to persist in 2022E supported by; 1.) high sea freight rate anticipated to last until mid 2H22 (sea freight contributes 48% of total revenue 
• We expect WICE to report 4Q21 net profit at Bt167m (+182%YoY and +3%QoQ), the highest level since inception

• TSMC posted results at or above the top end of its guidance ranges for 4Q21 at the revenue, GPM and OPM levels. 
• Guidance for 1Q22 was also punchy with the midpoint of revenue guidance 6.0% above consensus and mid to high 20s revenue growth guidance for the year. 
• We still suspect however that momentum could actually accelerate through the year.

• Indonesia’s best quality ceramic tile producer, Arwana Citramulia (ARNA IJ), continues to register strong growth and higher margins due to improving product mix and improvements in manufacturing efficiency.
• Arwana Citramulia (ARNA IJ) is introducing new higher-end porcelain tiles which will displace Chinese imports given lower pricing, better terms for wholesalers and significantly faster delivery times.  
• The company remains a top choice amongst Indonesian industrials with high-quality governance and a strong growth track record along with attractive valuations. 

• With the penetration rate as high as 42%, Mitra could be fast running out of room for growth.
• Consensus seems to be overestimating Bukalapak (BUKA IJ)’s 2021 and 2022 revenue by 22% and 40% respectively.
• At 6.0x consensus FY+2 revenue, Bukalapak is still expensive compared to the peer average of 4.3x.

• TCS reported a healthy revenue growth of 15.4% YoY in constant currency (CC) terms. Operating margins contracted by -60bp to 25%, due to supply-side challenges. 
• LTM attrition for TCS was 15.4%, best in the industry. However, on an absolute basis, it is high and TCS is continuously working on stabilizing it.  
• Growth has been broad-based across sectors and the demand outlook remains robust on the back of strong spends by corporates on digital transformation and adoption of cloud.

• Toyota is up 52% in just over a year, posting impressive performance for a company of its size. 
• Its displacement of GM as the number one automaker in the US has made headlines but results in China and Europe have also been impressive. 
• Hybrid penetration is now also over 25% in all major regions and we expect this to continue to be a driver.

• Downgrade ADVANC to HOLD from BUY rating with a TP of Bt227 due to limited upside.Share price soared by 14% since 19 November 2021 is due to magnified positive industry
• We expect 10% upside to our target price from merger sensitivity analysis as ARPU growth may increase rapidly from limited consumer choice and 5G features.
• We expect 4Q21 core profit at Bt6.6bn (-4%YoY, flat QoQ), as rising subscriber base is continuously offset by declining ARPU.

• Mani Inc (7730 JP) offers medical devices, which are mainly used in the elective procedures including cataract surgery and dental procedures.
• In FY21, the company missed its guidance for both revenue and operating income by 2% and 5%, respectively, due to higher-than-expected impact of the COVID-19.
• With the rising cases of highly infectious Omicron variant of the COVID-19 in major operating regions, the company is expected to miss or lower its FY22 guidance.

• A slowdown short-term performance but solid long-term growth outlook. We reiterate our BUY rating with a target price of Bt28.0 derived from 35xPE’22E,which is close to the biggest home-improvement player
• We expect DOHOME to report 4Q21 net profit at Bt420m (+95%YoY, +23%QoQ), YoY growth will be supported by (1) a solid SSSG at +39%YoY, and (2) gross profit margin expansion 
• We expect 1H22 earnings to slightly soften YoY pressured by (1) a drop in margin for steel products,which will trim down overall gross profit margin to roughly 19% from 21.7%-22.7% 

• HHC is making more changes at the executive level with the promotion of Carlos Olea to CFO, who replaces Correne Loeffler
• HHC is not stopping with the 5 master planned communities (“MPC”) and has now added Douglas Ranch in the Phoenix area into the mix
• We believe the increase in FFO HHC should generate over the next two years requires reinvestment that HHC is putting forth through the Seaport District and Douglas Ranch

• Water Oasis (1161 HK) trades at a 6x FY22 ( Sept end ) PE with 31% of its market capitalization in cash ( implying ex-cash 4x PE ). 
• For FY21, Water Oasis (1161 HK) paid a 22 cent dividend implying a 12.43% dividend yield. We forecast a forward yield of 14%.
• The company will continue to execute as it opens newer stores and beds down its M&A for a 15% CAGR revenue growth.

• TSMC’s 2022 outlook is bright, but new drama around Intel’s possible orders could define the foundry in 2023
• IPhone’s 2022 modem is currently equipped with Qualcomm’s design but 2023’s will be designed by Apple
• TSMC’s continuously updated technology roadmap shows it as a tech-leader in the foundry space

• Early last year we very wrongly called Capcom as our top short-term pick as we expected an earnings blowout in 1QFY22. 
• The blowout duly came with OP 37% above clueless sell side expectations and… the stock tanked. 
• Almost a year later the stock languishes 28% lower just as the PC version of Monster Hunter Rise launches.

• Bilibili launched a shopping cart feature (Xiaohuangche) recently on its livestreaming platform which enables users to purchase goods while watching a live-stream.
• This comes at a time; China’s common prosperity crackdown has set its eyes on livestreaming e-commerce.
• Bilibili has been looking at ways to improve its monetisation to reduce losses, but we think the new initiative will likely add further pressure on deteriorating margins.

• With its nationwide distribution and delivery network, Sinopharm Group Co Ltd H (1099 HK) remains a beneficiary of increasing adoption of China’s VBP scheme for drug procurement.
• Despite decreasing demand for Sinopharm’s COVID-19 vaccine, its pharmaceutical distribution business is expected to remain stable, driven by the steady recovery in China’s healthcare industry.
• The company is successfully promoting fast-growing oncology products. Its strategic partnership with I-Mab (IMAB US) further strengthens competitive edge, as I-Mab has a robust pipeline for China market.

• Infosys reported strong Q3FY22 earnings with constant currency (CC) sequential growth of 7%, despite weak seasonality.  YoY CC growth at 21.5% is the highest ever over the past 11 years.
• Large deal wins and continued momentum in digital revenue growth helped Infosys Ltd (INFO IN) to post a strong Q3. Share of digital revenues grew to 58.5% vs 50.1% YoY.
• On the back of strong Q3FY22 earnings, Infosys raised its FY22 revenue growth guidance to 19.5-20% vs 16.5%-17.5% earlier.

• Downgrade to HOLD rating due to limited upside, with a TP of Bt72, based on 30xPE’22E, derived from 2-years trailing average.Share price which is trading at premium to Asia ex-Japan
• We expect solid 4Q21 earnings at Bt1.9bn (+9%QoQ, +31%YoY),backed by both sales growth and  margin expansion, given the demand recovery after the easing of ASEAN lockdown and multiple M&As consolidation
• We expect 2022 earnings to grow strongly by 30%YoY, on the back of organic and inorganic growth; coupled with global demand recovery, that we anticipate in 4Q21 onwards

• We expect the company to report 3QFY22 (Oct-Dec) core profit at Bt400m (+9%QoQ -12%YoY). QoQ expansion will be due to recovery for thermal insulator sales after selling price adjustment 
• We maintain positive outlook for earnings growth in FY2023 (+14%YoY) backed by; 1.) an increase in revenue for thermal insulator and consumer packaging segments, 2.) improving operating margin
• We assume profit margin to remain at high level at above 31% in the remaining quarters of FY22 as demand for most of the products remain strong while

• IOT data platform meant to digitize physical operations for manufacturing, transportation, construction, utilities, healthcare, and education. 
• Excellent management team, previously co-founded Meraki, which was sold to Cisco.
• Hypergrowth software business on par with ServiceNow and Workday at this stage in growth, but much less profitable (so far) due to hardware and bandwidth costs.

• CALX has yet to experience the full extent of our original sell thesis even though there are growing signs of an impending impact
• Component issues could have become a headwind in the fourth quarter and remain a challenge in 2022.
• With Huawei equipment replacement predominately complete, small service providers could reduce their spending

• Move Along, No Problems Here: DBS Group Holdings (DBS.SG) [DBS] participated in a competitor conference on January 10, 2022, suggesting that not an ounce of risk is on balance sheet; 
• Digital Franchise: Management also focused on digital initiatives, including: DBS Digital Exchange; Digital Custody; and the Partior platform; and
• Deal Risk Remains High: There was no discussion by management of its headlong buying spree of some fairly spicy transactions. And they are not done.

• Bukalapak (BUKA IJ) has announced that it will participate in the upcoming rights issue of new digital bank Allo Bank, its first direct investment in a financial services company.
• This move will help to enhance the company’s financial services offering to its 10.4m plus Mitras and sellers in the platform helping to increase stickiness and improve take-rates.
• We expect positive momentum going forward as some of its new focus areas pick up the pace and valuations look attractive from an EV/gross sales perspective given its growth prospects. 

• Lawson Inc (2651 JP) released rather disappointing 3QFY22 results last week with revenue and OP falling short of consensus by 4.5% and 22.2% respectively.
• Lower than expected profitability is driven by Lawson’s heavy upfront investments on future growth.
• With consensus unjustly penalising Lawson for growth investments, we think that there’s around ¥10.0bn upside to FY+2 consensus OP of Lawson.

• Takeda is currently trading at JPY3,175 per share, slightly above its all-time low of JPY3,105 per share. Shares are currently at a 27% discount to its peak in March 2021.
• The company has been divesting its non-core assets and reorganising its business around five core areas: GI, Rare Diseases, Plasma-Derived Therapies, Oncology, Neurosciences and Others.
• Takeda’s share price started plunging after the suspension of a phase 2 study of TAK-994 in October 2021 following the emergence of a safety signal.

• Tesla is a short. We know. You can’t short it. But it is a short.
• We continue to look for businesses that overearned and pulled in growth during the pandemic…some more recently identified examples: CHWY, ROKU
• Spotify remains one of our top short ideas, bad business model, and now increasing competition from alternative listening services. 

• There’re many uncertainties about Imeik’s development strategy, resilience in front of risks and corresponding business performance, which could make it difficult for the market to calmly view the next fluctuation.
• Despite lower profit margin, Bloomage is more R&D oriented and characterized by integration of industrial chain,enabling it to establish wider moat and move forward more stably in the long term.
• Our view is that Bloomage Biotechnology Corporation-A (688363 CH) is expected to have more potential and imagination space than Imeik Technology Development (300896 CH) in the future.

• We expect PTTEP to post a solid 4Q21 net profit of Bt9.7bn (+283% YoY, +2% QoQ).
• Excluding the impairment loss of US$200m (Mozambique, Yetagun projects), and US$100m gain from reversal of decommissioning expense of Bongkot project, the recurring profit is expected to be Bt13.2bn (+162% YoY)
• The YoY surge will be from 10% and 27% growth in sales volume and  average product selling price (ASP) respectively.