In today’s briefing:
- Elan Microelectronics: Index Removal Ending, Cash Rich for Buybacks or Acquisitions
- Tao Heung (573 HK): Bon Appetit
- Wynn Macau Ltd: Trading Below Many Peers Which Are Moving up Facing the Same Headwinds
- AptaBio Therapeutics (293780 KS): Near-Term Cash Crunch Is Clouding Promising Prospects of Pipeline
Elan Microelectronics: Index Removal Ending, Cash Rich for Buybacks or Acquisitions
- Elan’s index removal has resulted in a spike in volume, however the removal selling should be abating.
- The company remains in a very strong position with a large cash warchest and additional cash to be generated even in a down-cycle.
- The company should buyback shares in our view, as it did in 2021. Industry weakness also presents acquisition opportunities.
Tao Heung (573 HK): Bon Appetit
- Tao Heung (573 HK), a Chinese cuisine restaurant operator, has lost significant shop-days in 1H22 due to the pandemic. However, this is behind us and 2H22 outlook is better.
- The recovery of Hong Kong operations will be supported by further relaxation of social distancing measures while, for mainland China, business has rebounded following removal of lockdowns.
- Its Chairman has upped his stake, signaling a vote of confidence. The stock’s valuations are not expensive, but given low turnover, there will be potential share price volatility.
Wynn Macau Ltd: Trading Below Many Peers Which Are Moving up Facing the Same Headwinds
- Macau peer shares are higher largely due to bullish resolutions of long term uncertainties about re-licensing which have now been favorably resolved.
- Some easing of Hong Kong hotel duration quarantines in general and specific to Wynn, the promotion of Ms. Linda Chen to Presidency will resonate favorably in Beijing.
- Wynn’s two Macau properties well positioned to recapture leading share of premium mass customer segment. Not reflected in go forward share price.
AptaBio Therapeutics (293780 KS): Near-Term Cash Crunch Is Clouding Promising Prospects of Pipeline
- AptaBio Therapeutics (293780 KS) announced positive topline data for European phase 2 clinical trial of its lead candidate, APX-115, which is being developed for the treatment of diabetic nephropathy.
- Future progress of APX-115 in clinical trial will depend much on AptaBio’s capacity to enter a licensing deal for APX-115 with global pharmaceutical companies.
- The company’s other pipeline drugs are also progressing, thereby keeping R&D expenditures at elevated level. However, the company’s current cash balance is not sufficient fund its R&D expenditures for long-term.
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