In today’s briefing:
- Alibaba (BABA US): No Where to Go but Up
- Anta Sports (2020 HK): In-Line 4Q23 Operational Update + Submission Of Amer Sports Listing On NYSE
- Taiwan Dual-Listings Monitor: TSMC Contraction Continues; ASE & Chunghwa at Historically Rare Levels
- Anta Sports (2020 HK): An Updated Look at Implications of Amer Sports’ IPO
- China Consumption Weekly (8 Jan 2024): BYD, Li Auto, PDD, AliPay, Mixue, Baidu
- Caregen (214370 KS): ProGsterol May Rebound in 2024; Ophthalmic and COVID-19 Pipeline To Watch
- 2024 High Conviction Update: Innovent (1801.HK)- New Business Progress Reinforces Optimistic Outlook
- 2023 Shareholder Letter
- Comfortdelgro (CD): The Chinese Is Back
- Millennium Services Group Ltd – Bid Implies an EV/EBITDA Multiple In-Line with Peers
Alibaba (BABA US): No Where to Go but Up
- Alibaba is transforming into a leaner, more efficient and more profitable technology company with sharpened focus on core business and shareholder return.
- While we don’t expect growth to define the company in the near future, high single-digit P/E more than compensates for the lack of it.
- This worst-performing and cheapest technology stock among global peers stands a big chance of staging a comeback in 2024 in our view.
Anta Sports (2020 HK): In-Line 4Q23 Operational Update + Submission Of Amer Sports Listing On NYSE
- Anta Sports Products (2020 HK) announced a set of in-line 4Q23 operating data.
- In addition, the company has filed a registration statement with the U.S. SEC on January 4 for a proposed listing of Amer Sports on the New York Stock Exchange.
- Anta currently trades at a forward PE of 17x based on estimated 2024 earnings, compared to a historical forward PE of 24x since 2017.
Taiwan Dual-Listings Monitor: TSMC Contraction Continues; ASE & Chunghwa at Historically Rare Levels
- TSMC: 7.7% Premium — Spread Has Fallen Further, Likely Can Short a Bit Further
- ASE: Drops to 5.1% Premium — Can Consider Going Long at Current Level Due to Maxed Headroom & ASE’s Strong Advanced Chip Packaging Story
- CHT: Trading at -0.9% Discount — Good Level to Long the Spread, Rare Discount
Anta Sports (2020 HK): An Updated Look at Implications of Amer Sports’ IPO
- Amer Sports, 52.7% owned by Anta Sports Products (2020 HK), has finally filed a US IPO registration. This is positive for Anta Sports as it can realise Amer’s value.
- Reported losses at Amer have increased YoY for 9M23 due to higher finance cost. But, its gross, operating, and adjusted EBITDA margins have all recorded solid improvements.
- Assuming Amer is listed at the sector’s average FY23 P/S of 1.6x, Anta Sports may book deemed disposal gain of HK$13.5bn, or about 6.8% of its market capitalisation.
China Consumption Weekly (8 Jan 2024): BYD, Li Auto, PDD, AliPay, Mixue, Baidu
- Chinese NEV (new energy vehicle) producers’ deliveries grew rapidly in 2023.
- PDD closed most “local life” businesses, including hotel booking, movie ticketing, etc.
- Jack Ma is no longer the controller of AliPay, the largest online payment app.
Caregen (214370 KS): ProGsterol May Rebound in 2024; Ophthalmic and COVID-19 Pipeline To Watch
- Riding on multiple export contracts, Caregen Co Ltd (214370 KS) was confident of achieving KRW60–100B revenue from ProGsterol in 2023. However, during 9M23, ProGsterol clocked revenue of KRW8.5B.
- ProGsterol should rebound in this year, with the resumption of registration process in each country. Direct entry in the U.S. should be the strong catalyst for ProGsterol revenue this year.
- Caregen is developing an eye drop for wet macular degeneration. This is in phase 1 trial. The compay is preparing for phase 2 trial for COVID-19 nasal spray in Israel.
2024 High Conviction Update: Innovent (1801.HK)- New Business Progress Reinforces Optimistic Outlook
- Innovent has launched head-to-head phase III clinical trial of Mazdutide and Semaglutide. If the challenge is successful, it will have milestone significance. Domestic sales of Mazdutide will look very promising.
- Innovent received negative news on CEACAM5 ADC/KRAS G12C.When independent R&D cannot be relied upon, Innovent has to seek new sources of growth to make up for the remaining sales gap.
- There’s nothing wrong with Innovent’s development strategy by balancing both success rate and efficiency, although Innovent is hard to become a leader in cutting-edge R&D. We remain optimistic on Innovent.
2023 Shareholder Letter
- The last twelve months were, market-wise, interesting. Multiple things have happened that contributed to changes in my thinking-process.
- Refining thoughts and the mental mechanism I utilize to approach portfolio management should lead to success, or at least that is my hypothesis.
- Continuous learning allows for building more solid premises. Given time, compound interest sharpens them to the point where chances of error are minimum.
Comfortdelgro (CD): The Chinese Is Back
- The share price has increased by around 20% since mid-last year.
- A new revenue stream from the booking fee through the Zig app and calls that, albeit small, it was never possible to share upside with cabbies before.
- Extension from 15 days to 30 days visa-free for Chinese tourists to come to Singapore on early 2024.
Millennium Services Group Ltd – Bid Implies an EV/EBITDA Multiple In-Line with Peers
- Human services company Millennium Services Group Ltd (ASX:MIL) has entered a Scheme of Arrangement with an entity associated with Softbank Robotics Singapore for the acquisition of 100% of shares at $1.15/share cash.
- Shareholders also have the option to accept a mix of cash and scrip in the new unlisted entity, with certain management committing not less than a total of 30% for this option.
- The bid price represents an 89% premium to the last RaaS update note (October 23) and 360% premium from July 1, 2023.
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