Equity Bottom-Up

• Chugai Pharmaceutical (4519 JP) recorded double and triple-digit revenue growth from Hemlibra in domestic and export markets, respectively during 9M2022. Growth momentum is expected to continue.
• Both Actembra and Ronapreve have limited revenue potential from COVID-related indications. Ronapreve reported revenue of ¥60.8 billion in 1Q22 in domestic market, with no reported revenue in two subsequent quarters.
• Actemra will face biosimilar competition. This month China has approved first Actembra biosimilar, while a couple of others are under review of the FDA.  

• The 2022 NRDL negotiation results were released. We analyzed some points worth investor’s attention.
• The “safety pad” brought by medical insurance is difficult to ensure products future sales.Even after entering NRDL, how to improve patient/doctor coverage is an important problem for enterprises to consider.
• Here are some companies that investors are interested in. We mainly analyzed some key points of them, including Sirnaomics (2257 HK), JW Therapeutics (2126 HK), Antengene (6996 HK). 

• Average fund weights in Alibaba among 270 active EM funds fell from a peak of 6.3% in October 2020 to between 1.7% and 2.5% over the last 18 months. 
• Significant switch from Growth to Value, with Value/Yield funds at record ownership levels whilst Aggressive Growth scale back holdings.
• Fund ownership trends are positive, with a growing number of managers making the move to overweight whilst index weights and prices remain at these levels.  

• We estimate that TME’s 4Q22 topline/bottom line would be (2.5%)/3.8% vs cons., because of disturbance in its social entertainment and ads business.
• We forecast net income would only slightly beat cons by 6.1%, due to likely expense rebound and no major improvement on main businesses.
• Reiterate SELL rating but raise TP to US$ 6.7 to reflect margin beat and improvement of macro environment. Our TP implies 12.3X PE in 2023.

• Based on our tracking, ZTO’s parcel volume in C4Q22 increased 4.5% YoY and 4.1% QoQ,and its market share reached 21.8%, up 1.6ppt YoY and down (0.4ppt) QoQ due to seasonality. 
• ZTO benefits from the recovery of eCommerce and industry volume. It is highly competitive both in pricing and in service quality, which fend off peers under escalating competition into 2023.
• Maintain BUY and raise TP to US$35.0 due to industry rebound and ZTO’s competitive edges in service and pricing. Our TP implies 23x P/2023E.

• While BILI’s top line in 4Q22/2023 would be in line, we suggest that its bottom line in 4Q22/2023 would beat cons. by 6%/18% due to cost-savings and optimized monetization efficiency. 
• BILI’s adjusted net loss would be significantly narrowed to (3.2)bn RMB in 2023, per our estimation. However, we still have concerns about some of BILI’s fundamentals.
• Maintain SELL but raise TP to US$ 16.4, implying 1.8X PS in 2023.

• We expect JDL (including Deppon) to report C4Q22 net revenue in line with cons., and non-IFRS net margin beat cons. by 0.5ppt. 
• We expect JDL’s top line to reaccelerate starting in C2Q23, supported by recovery of JD GMV, growing standalone delivery services, and returning demand for integrated supply chain services.
• Increasing scale and improving operating efficiency in warehousing and transportation will contribute to JDL’s margin expansion. We upgrade JDL to BUY rating and raise TP to HK$ 21. 

• We expect BEKE C4Q22 revenue and non-GAAP NI to be 9% and 64% above consensus. The bottom line beat is a result of earning leverage;
• We expect the market monthly EH/NH transaction volume to turn positive growth in C1H23, with resumed offline activities and continuing policy support as main drivers
• We raise TP by US$1 to US$20: 1) dialling up GTV in 4Q22, 2) faster pace transaction recovery in 2023, and 3) rebase FX from 7.05 to 6.77 in valuation.

• Adobe managed a decent result in the last quarter meeting the revenue expectations of Wall Street and managing an earnings beat.
• The company delivered 15% growth in the top-line for the 2022 fiscal with $17.61 billion in revenue.
• We remain confident in their long-term strategies and give Adobe a ‘Hold’ rating with a revised target price.

• Campbell Soup is off to a good start to the fiscal year and delivered an all-around beat.
• Meals & beverages delivered a strong performance, and there is growth in key brands, particularly RTS (Ready-To-Serve) soups, Mexican sauces, and Italian soup, well-outpaced the growth.
• We provide the stock of Campbell Soup with a ‘Hold’ rating and a revision in the target price.

• Cirrus delivered a decent quarterly result with an all-around beat, driven by greater smartphone unit volumes linked to its customers’ new product launches, resulting in revenue over the high end of its target range.
• Furthermore, with the development of Cirrus’ 22-nm codec, audio sensing and other signal processing use cases will benefit from increased performance and power efficiency.
• The management has been working with several customers to design their first amplifier created especially for this market.

• Columbia Sportswear delivered a mixed set of third-quarter results as it failed to meet the revenue expectations of Wall Street given the economic, geopolitical, and supply chain challenges.
• Consumer challenges are being solved by innovations like Omni-Heat Infinity and the recently unveiled Omni-Heat Helix.
• The patent-pending Omni-Heat Helix from Columbia uses highly effective insulation cells to optimize warmth while ensuring breathability.

• Oracle had a strong quarter and saw its revenue increase by 25%.
• Even with Cerner excluded, total revenue increased by 9% in constant currency, exceeding Q1 and surpassing revenue from the same period last year.
• Oracle’s liquidity is also solid as it held over $7.4 billion in cash and marketable securities at the end of the quarter.

• Plug Power delivered another below par result in the quarter, failing to meet Wall Street expectations in terms of revenues as well as earnings.
• The management claims that its fully developed green hydrogen platform has the potential to make it profitable.
• In the hydrogen and fuel cell industries, Plug Power has a first-mover advantage which drives investor optimism.

• CP ALL is a unique and high-quality proxy for the recovery in domestic consumer demand plus increasing tourist arrivals, which should soon see a further boost from China.
• We would expect a strong finish to the year with an even stronger pickup in 2023 across convenience stores, Lotus supermarkets and hypermarkets, as well as Siam Makro cash-and-carry. 
• CP ALL is a top growth pick in Thailand, with EPS expected to grow by +35% and 25% for FY2023E and FY2024E, with ongoing expansion and economic recovery.

• Fintechs and neobanks suffered a valuations reality check in 2022, due to rising interest (and discount) rates, poor fundamental results coupled with – in certain cases – high cash burn
• Most neobanks need to improve customer activity rates as well as product and revenue penetration; legacy banks are responding to disruptors and in developed markets megafintechs are encroaching on neobanks
• We see 2023 neobank picks driven by bottom-up calls on focused execution; we turn constructive on Nubank, stay negative on Inter and Jago and neutral on Kakaobank and Banco PAN

• Xpeng announced price cuts on existing G3i, P5 and P7, which surprised the market on negative side, potentially indicating weaker demand and profitability
• Recent management changes has also hurt sentiment with the new CEO from a ‘traditional’ car background
• Xpeng’s share price has bottomed in our view and we expect a 2H’23 recovery with improving fundamentals

• Goldman Sachs’ business model is not aligned to benefit from an elevated interest rate environment.
• The bank’s trading segment could pivot, but Goldman’s investment banking prospects remain gloomy.
• The firm’s stock presents reasonable valuation and dividend metrics, but they might not be enough to convince investors, analysts say.

• Obi Pharma Inc (4174 TT) is developing novel therapeutic agents for unmet medical needs against cancers. The company’s lead pipeline candidate, adagloxad simolenin is a first-in-class cancer vaccine candidate.
• Currently, adagloxad simolenin is in phase 3 study as an adjuvant treatment of high-risk, early-stage, Globo H-positive triple negative breast cancer, which represents 15–20% of breast cancer cases.
• The company has a cash runway through 2024, while phase 3 trial is expected to be completed in 2025. With the pipeline progress, operating expenses are expected to increase.

• Softening macroeconomic circumstances in the Eurozone and cooling inflation in the U.S. could reignite demand.
• China’s reopening might smooth supply chains.
• Ford Motor Company’s EU market share is expanding, and its product-driven approach has sustained customer loyalty in North America.

• Netflix is now up 50% from its lows on hope that advertising and paid sharing drive a revenue reacceleration and multiple rerating. Part B has happened.
• Advertising uptake will be slow. But consensus has 55M incremental ad-subs (20% of the total) and $8B in revenue assumed in 2025! 
• Netflix intends on keeping content spending flat for the next few years, raising the importance of its hit rate – which has not been Netflix’s forte.

• This is our first report on the Intercontinental Exchange (ICE), one of the largest providers of provider of market infrastructure, data services and technology solutions in the world.
• In ICE’s equity derivatives complex, the ADV in its MSCI complex was up as the volatility levels continued rising.
• Recurring revenues increased, driven by robust demand for the company’s energy exchange data as well as the continued benefit from its record 2021 listings performance.

• IPG Photonics delivered a mixed result in the last quarter, as it failed to meet Wall Street expectations in terms of revenues but managed an earnings beat.
• Sales in high-power cutting applications suffered from a decline in general industrial demand in China and Europe.
• As this business required extra investment and was noncore to IPG, the management announced they would sell it to Lumentum.

• Fanuc is a core structural growth stock that has fallen by -4% over the past year. We turn bullish with 8 days to earnings
• We believe that Fanuc is a key beneficiary of continued investment in automation and realignment of supply chains globally
• We focus on Fanuc’s core value drivers – revenue, margins, risk and investment – and see 25% upside for long term investors

• China’s gaming regulator granted publishing licenses to 88 video games including three licenses to Tencent (for Undawn, Alchemy Stars and Yuan Meng Zhi Xing) and one for NetEase (for Badlanders).
• In December, NPPA gave approvals to 84 new domestic games and 44 imported games suggesting the 18-month long crackdown on the sector is nearing an end.
• Tencent’s online games revenue declined YoY for three consecutive quarters with regulatory hurdles and drop in ranking of key titles but we expect an improvement going into 2023.

• Fewer people wear suits as a regular office uniform and there are also fewer working age Japanese.
• Combined with the fact that more people work from home some days a week, this has meant a drastic decline in suit sales
• In response, the big retailers are exploiting the growing popularity of custom and premium suits but the shift won’t offset the decline.

• Kalbe Farma (KLBF IJ) remains an interesting proxy for the deepening penetration of healthcare and greater health consciousness in Indonesia through its prescription drugs, consumer health and nutritional products.
• The company continues to expand its scope if pharmaceutical products into areas such as oncology and biosimilar drugs, as well as growing its exposure BPJS with carefully selected unbranded generics. 
• Its distribution and logistics business continues to be a growth driver, it onboards new third-party principals. Valuations below 5-year historical average on a PER basis despite higher projected growth ahead. 

• Despite the steep stock rebound following a strong recovery in sales, stock attracts modest valuations in line with Infant milk players. Re-rating potential exists from valuing high-growth segments differently.
• Strong growth in Adult Nutrition and Pet products fueled overall sales. Baby Nutrition sales growth is muted and accounts for less than half of total sales (vs 2/3rd in 2020).
• Stock rebound triggered by a recovery in Sep. quarter sales thanks to its diverse product portfolio, and prospects of a revival in cross-border trade following China opening its borders.

• Share price of Shenzhen International (152 HK) started slow in this year, but it is on course for stronger earnings in FY23, following a dip in last year. 
• Upside from logistics business, benefits to Shenzhen Expressway (548 HK) on border re-opening, potential massive contribution from logistics parks transformation and upgrading and lack of Shenzhen Airlines’ drag are drivers. 
• ROE is expected to rebound to 11-12% in next two years, returning to FY20-21 level. Back then, its average P/B was 0.68x, suggesting at least 31% upside from 0.52x currently. 

• ACF identifies PPTA as a US national strategic asset (Sb)and best-in-class gold asset.
• Sb: Proven & Probable Reserves 148 Mlbs at 0.06% in 104 Mt.
• Au: Proven & Probable Reserves at 4.8 Moz gold (Au) @ 1.43 g/t.

In its FY22 post-close trading update, Secure Trust Bank (STB) announced that business has been trading in line with management expectations and with good momentum. Continuing profit before taxes and impairments was ‘significantly’ up, while its cost to income ratio ‘improved markedly’. Core loans rose by 19.1% y-o-y (we forecast 13%), with strongest growth in consumer finance as expected. New business lending did drop 11% y-o-y for Q422 as the bank tightened its lending criteria (as previously flagged by management) due to macroeconomic concerns. Loan arrears are back to pre-pandemic levels in vehicle finance and at record low levels in retail finance. This reflects STB’s repositioning to more prime segments and the de-risking of its loan book over the last few years. STB stated that its FY22 net interest margin percentage remained stable versus H122 despite rising funding costs (this matches our expectation).

Supermarket Income REIT (SUPR) has acquired an additional 25.5% beneficial interest in the Sainsbury’s Reversion Portfolio (SRP) from its joint venture (JV) partner. It now has a 51% interest with 49% held by Sainsbury’s. SUPR’s positioning in the winding up of the SRP structure is strengthened, its relationship with Sainsbury’s, operator of the stores, is deepened, and it expects to further enhance the return on its SRP investment. Separately, reflecting widespread expectations that yields will continue to widen across real estate sectors, our forecast net tangible assets (NTA) per share is reduced by c 10%.

Esker’s Q422 revenue update confirmed that the company hit the mid-point of its revenue guidance for FY22, despite the already flagged slowdown in volumes processed. The company continued to see strong bookings intake, with the annual recurring value (ARR) of contracts for Q422 up 21% y-o-y in constant currency (cc) and up 19% cc for FY22. This provides support for management’s FY23 guidance; our FY23 estimates are within the guidance range and we maintain our forecasts pending FY22 results on 23 March.

• Kyocera’s aggressive long-term investment plan makes sense: abandon an unnecessary zero-debt policy and borrow while interest rates are still low. The resulting debt/equity ratio should be manageable.
• But the near- to medium-term outlook is not encouraging. Semiconductor inventories are still too high and demand is down. Recovery is likely to be slow.
• The shares have dropped 21% since mid-September, but FY Mar-23 guidance looks too high and both consumer and corporate spending are weak. Wait for capitulation.

• China just announced game approval for January batch. The number of games approved is slightly higher than the previous three months.
• Pace of China game approval stays flattish, at a much slower pace than pre-tightening.
• Both Tencent and Netease received approval for one game each. Overall Tencent is still behind its peers since the approval resumed.

• HK$0.96 per share special dividend announced last Friday disappointed the market. 
• The dividend implies only 20% of the cash on the balance sheet paid out in dividends
• We think there could be 1-2 more special dividends in 2023E given lack of obvious uses for the cash balance

• Sosei Group (4565 JP) is currently eligible for total milestone payment of more than $9.5B for its existing collaborations. During 9MFY23, Sosei reported revenue growth of 141% YoY to ¥8.6B.
• Pfizer Inc (PFE US) has dosed first subject in phase 2 clinical trial of type 2 diabetes drug candidate PF-07081532. Achievement of this milestone triggers a $10M payment to Sosei.
• Sosei has four programs in preclinical studies and 10+ in discovery phase, which are still unpartnered. The company has a cash runway into 2025 to fund its drug discovery activities.

• After the postal ballot approved the offering in December 2022, Adani Enterprises (ADE IN) is on track to conduct a Rs 200bn or US$2.4bn+ Equity Offering.
• One exchange release today gave the timing, and following  few articles in recent days suggesting it, another release said the offering would be partly paid shares.  
• The structure of the Offer and risks are detailed below but investors should remember, it was illiquidity which got the price here. Liquidity is a Bug not a Feature.

• The Keepers Holdings (KEEPR PM) recent move of +24% (3 months) was catalyzed by the dividend payout ratio (to 50%) increase and a solid Q4 2022 on the cards. 
• Post the move, the stock trades at 8.4x/6.6x FY22/23e. The dividend yield for FY23e/FY24e is 6.0%/7.6% ( based on a 50% payout). 8% of the market cap is net cash.
• We expect the next catalyst to be when the company reports its earnings ( probably the second week of April 2023). 

• Visa continues to outperform the market and fully capitalize on the prolonged business cycle.
• The company’s share price appears fairly valued both relative to peers and to its historical business fundamentals, according to the company’s stock price.
• The share price seems fairly valued and to the historical business fundamental, says the company.

• Rakuten only has a 15% stake in Seiyu, alongside majority shareholder, KKR, but the pivot by Seiyu post-acquisition shows the potential for Rakuten in this sector.
• Building on the 5 year plan that it set out in 2021, Seiyu last month announced a ¥100 billion in investment over the next 5 years.
• Funds will be used to increase integration with Rakuten’s online supermarket, with the aim to become the biggest GMS retailer.

• Leonardo’s revenues should benefit from several program ramp-ups driven by strong book-to-bill in prior years, and an impressive backlog that now stands at €37.4bn
• The underlying market for defense spending remains strong and is set to grow further
• The stock screens very cheap, trading on low multiples vs the sector, and our model shows a fair value well above the current share price.

• Japan’s largest snacks maker, Calbee Inc (2229 JP) has raised prices by 10-20% for almost 75% of its product range.
• Meanwhile, main inputs such as potatoes and palm oil have seen extensive price drops in the past few months.
• With margin pressures alleviating from both angles (revenue & cost), we think Calbee’s FY24 OP is bound to exceed ¥30.0bn.

• Last April I wrote about Tsi Holdings (3608 JP) which was trading at 0.5x EV/EBITDA and where I suggested it could double in 2-3yrs. 
• The day after I wrote, the stock closed at ¥312/share, briefly touched ¥480 before ending the year at ¥444. On Friday they announced Q3 earnings, now TTM EV/EBITDA is 2.5x.
• They also announced a buyback, and the stock is up further. It is worth looking into the details both near-term and what they mean longer-term.

• Semen Indonesia came through the worst of 2022 with flat sales, despite lower volumes, with profits rising by +18.9%, driven by cost savings, reduced debt, and use of DMO coal.
• 4Q2022 may see a slowdown given. the onset of the rainy season but the company is well-positioned to ride a recovery in 2023 with additional capacity from Semen Baturaja.
• Semen Indonesia (SMGR IJ) is well set up for a recovery in earnings for the next two years, with great synergies to come from Semen Baturaja. Valuations are well-below historic.

• China recorded 270,000 increases in deaths in 2022 to 10.41m (+2.7% YoY, vs. flat in 2020). This is a sad demographic trend but favourable to Fu Shou Yuan (1448 HK).  
• Death rate of 0.74% has returned to the 1974 level. With termination of “zero COVID” policy, this is poised to increase. This will also stimulate demand for its pre-need services.
• Despite a 73% rebound in share price from trough, valuation is still undemanding at 14.4x FY23F PER. This implies a 35% discount to the average of 22x since 2013. 

• Fast Retailing (9983 JP)’s 1QFY23 results were below consensus estimates with OP missing consensus by 13.2%.
• The outlook for the rest of the year doesn’t seem too well either with Domestic profitability held back by rising wages and growth markets affected by slowing demand for apparel.
• Even though China could emerge from COVID to boost Uniqlo’s profits, we see significant downside risk to Fast Retailing’s FY23 guidance.

• Money Forward (3994 JP) reported 4QFY11/2022 results yesterday. Revenue increased 42.5% YoY to JPY6.2bn (vs consensus JPY6.0bn) driven by growth in both MF Business and MF Home.
• Operating losses for the quarter widened to JPY2.2bn (34.8% of revenue) from JPY661m (15.2% of revenue) in the same quarter last year (vs consensus JPY2.0bn).
• Though MF’s top line continues to grow, we have not yet seen a meaningful improvement in its profitability, and we think, MF’s shares are overvalued compared to its counterpart freee.

• Amvis Holdings Inc (7071 JP) recorded 51% YoY revenue growth to ¥22B in FY22, 3% ahead of guidance. The company has added 16 facilities (825 beds), exceeding its initial plan.
• Buoyed by strong FY22 results, business expansion, and favorable demand scenario, Amvis has raised FY23 guidance. In FY23, the company aims to open 19 new facilities.   
• Amvis has formulated the new three-year plan, “Amvis 2025”. The company is accelerating the pace of opening Ishinkan to bring up the number to 127 by September 30, 2025.  

• Plans are being made to reroute Inkai’s production to avoid Russian infrastructure and port reliance.
• The firm’s joint acquisition of equipment supplier, Westinghouse, might add valuable cost synergies and improve Cameco’s economies of scope.
• Uranium prices remain supportive, and an operational pivot could realign Cameco stock’s valuation.

• Alibaba (ADR) (BABA US), along with several other Chinese tech names have rallied more than 100% over the past 2.5 months with the Chinese government indicating regulatory crackdowns are over.
• However, we think this could just be a temporary respite for tech names as there’s a lot more to be done in terms of a data security and privacy standpoint.
• Nevertheless, Alibaba Group (9988 HK) is still quite expensive, given that government interventions have pretty much curtailed Alibaba’s avenues for growth in the domestic market.

• The Chinese government may possibly buy minor shares in Alibaba and Tencent.
• JD.com’s long-term competitor, Dangdang, opened a bookstore in JD.com’s app.
• In 2022, both Tencent Video Account’s active user base and time on site reached 80% of We Chat.

• Money Forward Q4 sales rose +42% YoY to Y6.2bn driven by corporate ARR (+55% YoY)
• Full year revenue guidance for FY11/23 is in line with consensus 
• We still see over 20% upside in the stock if the company hits the top end of revenue guidance

• We have been bullish on the prospects of the Aussie gaming tech maker’s real world valuation in the light of its outstanding performance.
• The company’s relatively low institutional holding profile suggests its visibility is limited.
• WE put a one year PT on the stock at AUD$45 vs its current trade at AU$33 because it outperforms industry peers in ROE among other reasons.

• Aier launched new hospital acquisition plan. Obviously, Aier hopes to maintain high growth through M&A funds. However, considering its national market layout,Aier is in the final stages of aggressive M&As.
• Based on our data, Aier’s endogenous growth is actually very weak. Once external M&As fail to drive high growth, Aier’s overall performance growth would decline significantly. Aier is grossly overvalued.
• We expect decreasing birth rate after COVID-19. Due to the fundamental changes in the population structure, the valuation system of all assets would be destroyed – The long logic doesn’t exist.

• Growth in the Japanese home interiors and furniture markets is set to continue long-term. 
• At present, just a handful of brands have any major presence led by Nitori Holdings (9843 JP) which continues to expand market share.
• With multiple formats, Nitori looks set to continue to dominate but faces competition from unlikely quarters, especially Yamada Denki (9831 JP).

• Short video continued to accumulate active users in China and the company’s light-version grew the most rapidly.
• We believe the revenue growth rate will rise from 2Q23 and the company will have positive operating profit from 2024.
• We set the price target at HK$103, which is 44% over the market price.

• This is our first report on Stanley Black & Decker, one of the largest global manufacturers of tools and engineering systems catering to a wide variety of industries.
• The company delivered an all-around beat in its last result and has been making significant progress toward narrowing its focus and overhauling its supply chain in recent times.
• We initiate coverage on the stock of Stanley Black & Decker with a ‘Hold’ rating.

• This is our first report on Fastenal, a major wholesale distributor of industrial and construction supplies.
• The company delivered a strong performance in the last quarter surpassing Wall Street expectations in terms of revenues as well as earnings.
• We initiate coverage on the stock of Fastenal Company with a ‘Hold’ rating.

• Q4 revenue growth of 43% was driven by growth in sales to corporates (+54%) on new user growth, customer mix, and upside from cross-selling
• EBITDA erosion improved from the peak losses of Q3 and whilst it has not issued full-year FY23 guidance, it says it expects steady improvements as the year goes on
• This was a good quarter but we expect that is largely reflected in the share price after a 61% run over the last six months

• After a gap of over fifteen years from formal coverage of Venture Corp (VMS SP), I took a look again this week, not much seems to have changed.
• Venture Corp’s management hankering for “charm” in its contracts, with respect to NOT just return on investment but also return on effort will be the primary risk for growth
• Excellent anchor customers have boosted margins. The tech slowdown might entice larger EMS to be more aggressive and chase these businesses placing margins at risk.

• TSMC’s comments during its 4Q22 analyst call indicate the company expects an industry recovery in 2H23E, adding further confirmation to this view expressed by other firms.
• TSMC grew faster than the industry in 2022 and expects to grow faster than the industry in 2023E again.
• Based on our cycle-adjusted PE valuation metric, TSMC my not be super cheap vs. history, but it is also inexpensive.

• China Power International (2380 HK) announced positive profit alert for FY22 at Rmb2.3-2.7bn, vs. Rmb516m losses in FY21. Such guidances are 14-34% ahead of current consensus forecasts.
• Disposal and acquisition gains of Rmb2.15bn are the main contributors. As we see further clean energy injections and coal-fired disposals going forward, there is room for more such gains. 
• Losses for core operations are Rmb300-700m in 2H22, a huge 73.5% YoY reduction. We will not read too much into HoH profitability retreat as this is due to hydropower seasonality.  

• The equity story lies with a strong execution, further synergies, cost-cutting, a strong BEV ramp-up, and diverse leading brands
• Strong operating and financial performance since IPO.  Net cash >€ 20bn as of end-2022e, >€ 30bn from 2024e
• Trades on very attractive multiples. We believe that the Company’s intrinsic value is well above the current share price.

• AvidXchange is one of the leading providers of AP automation software and payment solutions for mid-market businesses and their suppliers. The company was founded in 2000 in the United States. 
• With a large $20B+ TAM and valuation at ~5x FY23 revenue estimate of $392M – significantly below the average for software and payment peers – we believe shares are undervalued. 
• Management raised the FY22 revenue outlook and expected a strong FY23. AvidXchange is two years from GAAP profitability, likely making the stock volatile in the coming years.  

• British American Tobacco’s stock could reach $45 per share.
• The firm’s dividend policy means a dividend yield of 6%+ is likely to sustain.
• The organization’s non-combustible products segment is skyrocketing and makes up approximately 15% of the company’s revenue mix, consequently providing valuable economies of scope.

• Diversey Holdings is a provider of cleaning and hygiene products in the hospitality, healthcare, food and beverage, food service, retail, and facility management sectors.
• Their suite of solutions combines patented chemicals, dosing and dispensing equipment, cleaning machines, and services.
• Headquartered in the US, Diversey is a multinational serving more than 85,000 customers in over 80 countries with a network of 8,500 employees.

• Liquidity shorts can be great short candidates.  The key characteristic is that the company may not be viable, economically, given their cash flows and cash requirements. 
• Liquidity shorts have built-in catalysts, have moderate to higher betas,  and can have strong down moves if a crisis develops.  They can go bankrupt, pushing the stock price near zero.
• Today we are flagging Natera, Silk Road Med, Floor & Decor Hldgs

• Hisamitsu Pharmaceutical Co (4530 JP) has announced solid Q3FY23 results, with double-digit revenue growth and triple-digit operating and net profit growth, mainly driven by the OTC business of the company.
• With the resumption of sporting/outdoor events globally and increasing unwillingness to use opioid for pain relief especially in the U.S., Salonpas is expected to continue its growth trajectory.
• Hisamitsu has reiterated FY23 guidance. However, considering the current progress rate of all the parameters versus guidance, we think actual performance of Hisamitsu will exceed guidance.

• The centralized procurement of interprovincial dental implants results were released. In our view, most of the profits from the midstream circulation and terminal sales of dental implants will be cleared.
• We analyzed some key points of Hangzhou Tigermed Consulting (H) (3347 HK), HBM Holdings Limited (2142 HK), Brii Biosciences (2137 HK) and Jacobio Pharmaceuticals (1167 HK).
• Many “successful investors” may not realize that their huge returns in the past are mainly due to unexpected capital market exit channel dividends, which is hard to be copied.

• Economic slowdown, China lockdown and more competition has hit Align Technology (ALGN US) share performance. Quantity and quality of innovations suggests a solid moat that should help a comeback.
• ALGN has dominant leadership in digital design and mass custom manufacture of clear aligner orthodontics. A return of demand should lead to strong upside. 
• Dentistry has seen significant new technologies we list the top fifteen innovators in the sector. Align is primarily in the narrow business of straightening teeth, but dominates the space.

• Seven & I Holdings (3382 JP)‘s Q3 OP of ¥160.1bn was a significant surprise to the upside with consensus OP at ¥130.2bn and us expecting around ¥125-130bn.
• This was mostly driven by an unexpected upside to the retail fuel margin while gasoline prices have come down by more than 34%.
• Nevertheless, we would expect this temporary misalignment in retail fuel margin to correct over the next few quarters, resulting in around 35-40% downside to the company’s valuation multiples.

• This is our first report on PPG, a well-known manufacturer of paints, coatings and specialty materials.
• The company performed well in several of its companies, notably PPG Comex.
• They also began collaborating with the HD Supply team to find new paint clients, particularly in the commercial maintenance sector.

• This is our first report on Ecolab, a major provider of water, hygiene and infection prevention solutions and services.
• The company delivered a below-par result with revenues just about meeting Wall Street expectations on account of the price increases.
• The company saw overall pricing increasing from 9% to 12% and consistent double-digit organic sales growth of 13%.

• BlackRock’s Q4 earnings report suggests an inflection point might be near.
• The company managed to mitigate systemic risks during its latest quarter, preserving its base rate rate-centric business model.
• In addition, aggressive investment in technology prompted a rise in product launch costs, according to the report.

• This is our first report on auto insurance major, Progressive Corp.
• The company had a disappointing quarter and failed to meet Wall Street expectations in terms of revenues as well as earnings.
• This quarter, the company increased personal auto rates in 20 states at an average of around 5% each day for an overall countrywide premium impact of +2%.

• This is our first report on DoorDash, the largest online food aggregator in the U.S.
• The company is a market leader in its domain and has demonstrated incredible resilience.
• Even in the last quarter, its market revenues have increased significantly despite the oil crisis, relatively persistent inflation, and the European war.

• This is our first report on United Rentals, one of the largest equipment rental companies in the world, known for renting out construction, aerial and industrial equipment, general tools and light equipment.
• The company’s fleet productivity increased by roughly 9%, while rental revenue increased by 20% year over year in the last quarter.
• The demand for its equipment rental services is relatively high, even though some parts of the economy are slowing down.