Daily Brief Equity Bottom-Up: [Futu Holdings (FUTU US) Company Update]: Difference Assets Shield FUTU from the Fate of SVB and more

• SVB Financial’s (SVBF) liquidity risk sparked by high interest rate is unlikely to happen on Futu, as the two have different asset structures and business models. 
• Futu is benefits under the rising interest rate environment, as its interest income generated from clients’ idle cash goes up, 
• With also help from the floating rate of margin financing and mortgage lending business. We maintain BUY rating and the TP at US$51.

• Samco is a beneficiary of rising power semiconductor investment for electric vehicles
• The company is focused on SPE equipment for the growing silicon carbide power chip market
• New investment from the likes of Mitsubishi Electric should drive structural growth for SiC equipment

• Supermax Corp (SUCB MK) reported first-ever quarterly loss in Q2FY23 due to continued fall in rubber gloves ASP, rising input cost, and weakening of the USD against the local currency.
• The challenging operating environment for glove will persist into 2023. Amid continued weak global demand for gloves, declining ASP, and rising input cost, Supermax will take time to regain profitability.   
• Global demand for rubber gloves is not expected to recover soon. In the foreseeable future, the market will remain weak, competition continue to be intense, and profitability adversely impacted.

For our next Corporate Webinar we are glad to welcome Comba Telecom’s Executive Director and Group CFO, Ken Chang Fei Fu.

In the upcoming webinar, Mr Chang will share a short company presentation after which, he will engage in a fireside chat with Smartkarma Insight Provider, Osbert Tang. The Corporate Webinar will include a live Q&A session.

About Comba Telecom

Established in 1997 and listed on the Main Board of the Hong Kong Stock Exchange in 2003 and the Main Board of the Singapore Stock Exchange in 2013, Comba Telecom is a global leading wireless solutions provider with its own R&D facilities, manufacturing base, and sales and service teams. The Company offers a comprehensive suite of products and services including base station antennas and subsystems, wireless access, wireless enhancement, and wireless transmission to its global customers. Headquartered in Hong Kong, with manufacturing bases and R&D centres in China, Comba Telecom provides wireless communication solutions and information application services to customers in more than 100 countries and regions around the world.

• Greentree Hospitality (GHG) is a Chinese hotel franchiser and operator that trades at a large discount to other US traded peers and had some rumours floating around in 2022 that it would be taken private by its controlling shareholder who owns 88.7% economic interest in the shares.
• The controlling shareholder also indicated that the reason for its late Q1 2021 report was that they had hired capital market consultants to explore a take-private offer.
• It does have some hair on it, but let’s first focus on the positives

• Hon Hai results slightly beat on revenue and slightly missed on EPS, but overall the result was decent since China COVID margin impact was well managed.
• The company has reiterated its 2025 target for gross margin to rise to 10% and over NT$1 trillion of revenue by 2025 from its new Electric Vehicle platform business. 
• While 2023E revenue was guided to be flat YoY, this was already roughly expected. We maintain our structural Long view on the shares.

• After surging past 20.0x consensus FY+2 EV/OP multiple in 2012-2013, MonotaRO Co Ltd (3064 JP)’s consensus FY+2 EV/OP has fallen below 20.0x on one very rare occasion.
• We see no major change in the fundamentals of MonotaRo aside from a temporary hike in Opex through concurrently running old and new distribution centres for the past 3 quarters.
• Currently trading at 22.5x consensus FY+2 OP, we think this is a good opportunity to benefit from the company’s depressed valuation.

• Market participants are re-repricing risk, says iShares 20+ Year Treasury Bond ETF.
• Policymakers are in a tough spot where they need to combat inflation while also providing liquidity for the banking sector.
• iShares are once again in the spotlight as market participants are Re-re pricing risk.

• HSBC Holdings plc agrees to acquire SVB Financial Group’s UK-based business for merely £1.
• HSBC stock’s current risks pertain to a newly evolved countercyclical environment and mainstream’s “flight to safety” instead of potential structural breaks within the firm.
• In a drastic turn of events, HSBC Holdings plc (OTCPK:HBCYF) has snapped up SVB Financial Group’s (NASDAQ:SIVB) UK lending division.

• The big online malls continue to grow at higher rates than many branded e-commerce stores, meaning consecutive annual gains in market share. 
• Amazon’s lead now seems to be widening while Rakuten is also pulling ahead of Z Holdings, which continues to struggle with poor integration of assets, and we see little upside.
• Amazon is now Japan’s 2nd biggest retailer but, despite its problems in Mobile, Rakuten is proving a relentless competitor in e-commerce and we remain bullish on its e-commerce prospects.