In today’s briefing:
- Samsung FN REIT: Book Building Results
- Meituan (3690 HK): 4Q22, High Growth, Better Margin, and 45% Upside
- CIMC Enric (3899 HK): Growth Outlook Secured by Encouraging Orderbook
- Meituan: Pandemic Driven Top Line Growth Is Only Temporary
- China Internet Weekly (27Mar2023): Douyin, Bilibili, Tencent, NetEase, JD Health, Zhihu
- China Power International (2380 HK): This Will Be a Rewarding Year
- Hanmi Pharm (128940 KS): Strong Base Business; Innovative Biologic Drug Commercialized in US
- How To Play Nike On Changing Fashion Trends
- Beyond the Blackboard
Samsung FN REIT: Book Building Results
- Samsung FN REIT announced its IPO book building results. The IPO price was determined at 5,000 won per share. The demand ratio was 24.88 to 1.
- The core investment thesis of Samsung FN REIT is that it is the only publicly listed Samsung affiliate that provides REIT services.
- It is a stable business with excellent locations for its existing properties and the company is expected to provide 5.6% annual dividend yield in the next three years.
Meituan (3690 HK): 4Q22, High Growth, Better Margin, and 45% Upside
- In 4Q22, the growth rates of total revenue and most business lines are better than our expectation.
- The operating margins have stayed at a low level for the third quarter.
- We believe the stock has an upside of 45% and a price target of HK$204 for year end 2023.
CIMC Enric (3899 HK): Growth Outlook Secured by Encouraging Orderbook
- After posting a decent FY22 result, earnings momentum for CIMC Enric Holdings (3899 HK) should sustain, underpinned by clean energy recovery and chemical and environmental equipment demand.
- 2M23 new orders growth stayed healthy at 10.7%, evidencing positive demand outlook. Hydrogen Energy is a growing driver as revenue will reach Rmb700m in FY23 and Rmb3bn in FY25.
- The stock’s PERs of 11.7x and 9.5x for FY23 and FY24, respectively, appear inexpensive in view of 19% earnings CAGR. Net cash position also adds an appeal to us.
Meituan: Pandemic Driven Top Line Growth Is Only Temporary
- Meituan (3690 HK) reported 4Q2022 results. Revenue increased 21.4% YoY to RMB60.1bn (vs consensus RMB57.7bn) while reported operating losses dropped to RMB732m (vs consensus RMB1.4bn) from RMB5.0bn in 4Q2021.
- Covid outbreak in China in 4Q2022 led to strong growth in food delivery service revenues, however, losses have widened compared to 3Q2022 due to increased rider costs and others.
- We expect Meituan’s top line growth to slow down and margins to remain under pressure with Douyin’s entry into food delivery and the company’s expansion into Hong Kong.
China Internet Weekly (27Mar2023): Douyin, Bilibili, Tencent, NetEase, JD Health, Zhihu
- Chinese Apps’ time on site decreased to 26.7 hours in 2022 from 28.5 hours in 2021.
- The Press and Publication Administration approved 27 imported games in March.
- Douyin launched a medium-duration video app, which can be Bilibili’s competitor.
China Power International (2380 HK): This Will Be a Rewarding Year
- China Power International (2380 HK) will enjoy another year of strong earnings improvement in FY23, as coal-fired segment returns to profit and new energy capacity drives growth.
- Solar and wind capacity will increase 66.5% and 23.1%, respectively, raising new energy’s proportion to over 70%. Profitability for hydropower also looks to recover in this year.
- There is huge room for asset injection from SPIC given the parent’s new energy capacity of 139GW, with only 20GW in CPI. Its FY23 PER of 8.4x PER is attractive.
Hanmi Pharm (128940 KS): Strong Base Business; Innovative Biologic Drug Commercialized in US
- Hanmi Pharm (128940 KS) posted revenue of KRW1.33T in 2022, the largest ever in the company’s history. Strong product competitiveness driven by high R&D investment strengthened Hanmi’s dominant industry positioning.
- In October 2022, Hanmi’s US partner Spectrum Pharmaceuticals launched Rolvedon in the U.S. market. During 4Q22, Rolvedon generated revenue of $10.1M. Rolvedon is expected to report $100M revenue this year.
- By leveraging on its biopharmaceutical development and manufacturing capabilities, Hanmi plans to launch a large-scale CMO and CDMO, which can be the new growth engines of the company.
How To Play Nike On Changing Fashion Trends
- RBC analysts noted that luxury fashion buying is dwindling.
- Luxury fashion buying has been down to sportswear, according to RBC analysts. RBC: “Squeezed consumers are turning to sportsswear.
- NIKE (NYSE:NKE) recently released its Q3 earnings report which beat analyst estimates.
Beyond the Blackboard
- The pandemic has been a catalyst for change, propelling the edtech sector to unprecedented heights as traditional educational institutions scrambled to adapt.
- However, as we enter 2023, the landscape has shifted significantly from the edtech boom of 2021.
- Companies now face the challenges of customer retention, unit economics, and the looming shadow of inflation and recession concerns.
💡 Before it’s here, it’s on Smartkarma
Sign Up for Free
The Smartkarma Preview Pass is your entry to the Independent Investment Research Network
- ✓ Unlimited Research Summaries
- ✓ Personalised Alerts
- ✓ Custom Watchlists
- ✓ Company Data and News
- ✓ Events & Webinars
