In today’s briefing:
- Nvidia Results Blow-Out: Multi-Year Growth Ahead; Wiwynn in Taiwan, Plus a Smallcap Wildcard AI Play
- FUJIFILM (4901.T) Loving The Setup Here
- Berli Jucker (BJC TB) – The Big C Factor
- Meituan (3690 HK): 1Q23, Real Operating Profit Turned Positive After Nine Quarters
- India Industrials | Quarterly Update – ABB, SIEM, HAVELLS, POLYCAB
- [XPeng Inc. (XPEV US, BUY, TP US$10) TP Change]: BUY on Recovery Starting from 2Q23
- [Vipshop (VIPS US) Earnings Review]: Demand for Apparel Rising on Increased Social Activity
- [Xiaomi (1810 HK, SELL, TP HK$8.2) Earnings Review]: Good Cost Control Could Be Transitory
- Frontier Management Inc. (7038 JP) – 1Q Follow-Up
- [Futu Holdings (FUTU US, BUY, TP US$51) Review]: A Resilient Quarter Under Regulatory Pressure
Nvidia Results Blow-Out: Multi-Year Growth Ahead; Wiwynn in Taiwan, Plus a Smallcap Wildcard AI Play
- Nvidia’s results and guidance sparked a massive rally in the shares, marking one of the largest single-day increases in market cap in U.S. stock market history.
- The company sees a multi-year growth cycle of data center upgrades ahead. Key supply chain partners TSMC and ASML are rising as well.
- Wiwynn in Taiwan should be a key winner. We also highlight a potential wildcard smallcap AI play that we will investigate further.
FUJIFILM (4901.T) Loving The Setup Here
- Q1’23 revenues of ¥764 billion, up 15% YoY and 2.6% QoQ
- FY2022, revenues grew by 13.2% to ¥2,859 while net income grew by 3.9% to ¥219.4.
- Electronic Materials set to grow from ¥180 billion in ’22 to ¥500 billion by ’30
Berli Jucker (BJC TB) – The Big C Factor
- Berli Jucker‘s 1Q2023 results were driven by growth across its segments from modern retail to packaging to the consumer, and healthcare & Technical, with margin improvements at the same time.
- The key near-term catalyst for Berli Jucker will be the IPO of Big C Retail, which will provide a separate market valuation for its retail assets.
- Berli Jucker is a beneficiary of the resurgence of tourism in Thailand through both its retail and packaging businesses plus it benefits from lower commodity prices across its other divisions.
Meituan (3690 HK): 1Q23, Real Operating Profit Turned Positive After Nine Quarters
- In 1Q23, total revenues grew by 27% YoY with all business lines up by more than 10% YoY.
- The real operating profits turned positive after nine quarters’ losses.
- We believe the stock has an upside of 35% for yearend 2023. Buy.
India Industrials | Quarterly Update – ABB, SIEM, HAVELLS, POLYCAB
- In this Insight, we review the recent performance of ABB India Ltd (ABB IN) , Siemens Ltd (SIEM IN) , Polycab India (POLYCAB IN) and Havells India (HAVL IN).
- ABB posted a strong start, SIEM has a black dot with respect to its recent sale of subsidiary. POLYCAB continues to perform, and HAVL is back to capex mode.
- Our picks remain the same, ABB instead of SIEM, POLYCAB instead of HAVL.
[XPeng Inc. (XPEV US, BUY, TP US$10) TP Change]: BUY on Recovery Starting from 2Q23
- XPeng reported soft 1Q23 results, with topline of RMB 4.03bn, missing cons by (4.4%); GPM of 1.7% missing cons. and our est. by (4.5ppt)/(4.8ppt.
- The 2Q23 guidance implies a QoQ recovery of 15.2%-20.7%, thanks to increasing order intake of the all-new P7i and recent channel transformation.
- We maintain BUY. We cut TP to US$ 10 due to pressure amid intensified competition.
[Vipshop (VIPS US) Earnings Review]: Demand for Apparel Rising on Increased Social Activity
- VIPS reported C1Q23 top-line, GAAP operating profit, and non-GAAP net income 6.6%, 27%, and 31% vs. our est., and 5.6%, 20%, and 36% vs. cons.;
- We expect VIPS profitability to remain steady given its relative immunity to competitor price competition, mainly due to its high apparel exposure, high member loyalty, and differentiated product sourcing strategy;
- Given improving apparel demand and EPADS on share buy-backs, we maintain BUY and US$ 16.3 TP, implying 8.1x 2023 non-GAAP P/E.
[Xiaomi (1810 HK, SELL, TP HK$8.2) Earnings Review]: Good Cost Control Could Be Transitory
- Xiaomi reported C1Q23 top-line and non-IFRS net income (6.9%) and 20.7% vs. our est., and in-line and 39.9% vs. consensus;
- We suggest that higher margins are transitory, as (1) key IC component prices may have bottomed, (2) EV spend is likely to ramp up further.
- We maintain SELL and HK$ 8.2 TP, implying 26x FY23 PE.
Frontier Management Inc. (7038 JP) – 1Q Follow-Up
- 1Q operating profit rose 18%, on a 19% rise in sales. Net profit rose 10%.
- According to the company’s data, the pace of increase in orders has been increasing since around the last week of 1Q, indicating a potential for stronger results in this FY.
- Management Consulting business sales rose 14%.
[Futu Holdings (FUTU US, BUY, TP US$51) Review]: A Resilient Quarter Under Regulatory Pressure
- Futu reported 1Q23 revenue 12.7%/14.8% higher than our est./cons., non-GAAP NI 21.2%/19.5% higher than our est./cons., mainly due to strong margin financing and security lending activities during volatile market;
- Futu’s operation and client trading behaviours remain steady in 1Q23 after the implement of rectification measures from regulators.
- On the other side, overseas expansion in Japan and Malaysia may start to kick-off in 2H23; We maintain BUY rating on FUTU and maintain TP at US$51.
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