Daily BriefsEquity Bottom-Up

Daily Brief Equity Bottom-Up: Comfortdelgro (CD): Stable Vs Volatile SIA and more

In today’s briefing:

  • Comfortdelgro (CD): Stable Vs Volatile SIA
  • Tencent (700 HK) Pre-Earnings: Still to Be Slow in 2Q22, But Price Overly Impacted
  • Taiwan Dual-Listings – TSMC Premium Decline Could Highlight Foreign Vs. Domestic Sentiment Mismatch
  • The Launch of Apple Pay Is Likely to Result in Market Share Losses for Kakao Pay
  • Vietnam Consumer Discretionary – Phu Nhuan Jewelry: Hedge Against Rising Inflation Rates
  • Kuaishou Dives Into Cloud Services and Chipmaking
  • Tokyo Base: A Future Abroad
  • China Everbright Water (1857 HK): Long-Term Pipeline Stays Resilient
  • Confident In Growth Opportunities. Weak Q3FY22 Billings Guidance Does Not Change Our Bullish Thesis
  • PetroVietnam Transportation Corporation (PVT VN/ BUY)

Comfortdelgro (CD): Stable Vs Volatile SIA

By Henry Soediarko

  • It is a recovery play yet its has lagged to SIA. 3 year basis, Comfortdelgro is -46% yet SIA has recovered to only -15% despite the former having better numbers.
  • SIA Free Cash Flow is often in red while Comfortdelgro’s has been consistently on the green. 2021 Comfortdelgro’s FCF was SGD +433 million while SIA was SGD -83 million.
  • Taxi demand has gone up through the roof judging from the price you have to pay. 

Tencent (700 HK) Pre-Earnings: Still to Be Slow in 2Q22, But Price Overly Impacted

By Ming Lu

  • We believe revenue would Still Be Slow in 2Q22, but will recover in 4Q22 or 2023.
  • We believe FinTech will be the only highlight, but online game and advertising will be negatively impacted.
  • However, we estimate the stock price will have an upside of 55%.

Taiwan Dual-Listings – TSMC Premium Decline Could Highlight Foreign Vs. Domestic Sentiment Mismatch

By Vincent Fernando, CFA

  • TSMC’s ADR premium has fallen substantially and is at the lower end of its 3-year range
  • ASE’s ADR premium is in contrast near the upper end of its range
  • ChipMOS ADRs are now trading at a discount to their Taiwan shares

The Launch of Apple Pay Is Likely to Result in Market Share Losses for Kakao Pay

By Douglas Kim

  • In the past several days, there have been numerous local media outlets that have mentioned about a potential launch of Apple Pay in Korea in the coming months. 
  • We believe the launch of Apple Pay in Korea could occur in the next 6-12 months and this is likely to further heighten the competitive pressures on Kakao Pay.
  • We continue to be concerned about the lofty valuation multiples of Kakao Pay as it is trading at 165x P/E (2024E) and 5.1x P/B (2024E). 

Vietnam Consumer Discretionary – Phu Nhuan Jewelry: Hedge Against Rising Inflation Rates

By Douglas Kim

  • Phu Nhuan Jewelry Jsc (PNJ VN) is the number one jewelry company in Vietnam. 
  • The company is benefiting from several key catalysts including reduced social distancing measures resulting in higher store visits and sales, hedge against rising inflation, and pent up demand for jewelry. 
  • The combination of higher expected earnings this year along with stable recent prices have resulted in more attractive valuations for the company.

Kuaishou Dives Into Cloud Services and Chipmaking

By Caixin Global

  • Kuaishou Technology Co. Ltd., the operator of China’s second-largest short video app, unveiled the new video cloud brand StreamLake and a self-developed intelligent video processing chip Wednesday in key moves to expand its business
  • The launch of StreamLake, the first enterprise-facing product from Kuaishou, marks the short-video platform operator’s official entry into the cloud services market and a shift from its original consumer-focused businesses
  • StreamLake will provide artificial intelligence-powered video creation and distribution solutions for corporate clients, Kuaishou said.

Tokyo Base: A Future Abroad

By Michael Causton

  • Tokyo Base rebounded in 2021 thanks to strong support at home and overseas for its Japan-made designs. 
  • The fashion retailer plans to add new concepts as well as expand more quickly overseas.
  • The Japanese fashion sector has taken a beating in the market but over the medium term there will be recovery for the better retailers, particularly those with potential overseas.

China Everbright Water (1857 HK): Long-Term Pipeline Stays Resilient

By Osbert Tang, CFA

  • A slow 1H22 new project momentum and a slight retreat in net profit are not expected to materially alter the positive outlook for China Everbright Water (1857 HK)
  • We estimate project pipeline equals to about 28% of its existing operating capacity. They will underpin growth prospects over the next two years.
  • New project growth should accelerate in 2H22 given the increase in local governments’ special purpose bonds issue. Cost inflation is expected to moderate sequentially as well.

Confident In Growth Opportunities. Weak Q3FY22 Billings Guidance Does Not Change Our Bullish Thesis

By Andrei Zakharov

  • Freshworks (FRSH US)  reported solid 2QFY22 results, and the company beat all key estimates, showed strong revenue growth of 37% YoY, and added ~1,800 net new customers. 
  • Welcomed high-profile new customers such as Cloudera, Dynatrace, Sterling Bank, Thomas Cook, World Market, Angi Home, and more. 
  • Shares of Freshworks (FRSH US)  have been exposed to heightened volatility lately, which we think provides long-term investors with an opportunity. 

PetroVietnam Transportation Corporation (PVT VN/ BUY)

By Mirae Asset Securities

PetroVietnam Transportation Corporation (HOSE: PVT)

Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

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