In today’s briefing:
- Seven & I: Going Strong in Overseas, Another Beat On the Cards
- Taiwan Tech Weekly: Biden Says US Will Defend Taiwan, Texas Instruments Gives Hope
- Meituan (3690 HK): User Base Beating Competitor, Industry Recovering, Upgrade to Hold
- Aier Eye Hospital (300015.CH) 22H1 – More Downside Ahead; The Long Logic Doesn’t Exist
- CPMC Holdings (906 HK): Good Time to Re-Visit
- Agilent Technologies: New Launches In Mass Spectrometry & Other Drivers
- Big Food Automation
- ATEN: Security Remains in Demand
- WDFC: Expectations Set for Disappointment
Seven & I: Going Strong in Overseas, Another Beat On the Cards
- After raising guidance yet again in 1QFY23 through stronger than expected performance in the overseas business, Seven & I is scheduled to release Q2 results on 6th October 2022.
- We are optimistic that 2QFY23 could provide the platform for Seven & I to break the ¥6,100 level, at which the share-price has been stuck for the first 9-months 2022.
- This is because, we are seeing a significant improvement in Seven & I’s domestic performance while, North America is carrying the growth momentum that been there since the Speedway-acquisition.
Taiwan Tech Weekly: Biden Says US Will Defend Taiwan, Texas Instruments Gives Hope
- Biden makes the most definitive statement to date that the US will defend Taiwan.
- Texas Instruments hikes dividend, annouces additional buyback. Will other cash rich semiconductor stocks follow suit?
- Intel vs. TSMC/UMC Trade Monitor: We look at performance streaks for the pairs. Intel outperforming over the last trading sessions.
Meituan (3690 HK): User Base Beating Competitor, Industry Recovering, Upgrade to Hold
- In July, Meituan’s user base exceeded Ele.me and Ele.me’s active user base decreased by 24% YoY.
- In China, Monthly active user bases of local life and food delivery recovered from May to July.
- We believe Meituan’s stock has only a downside of 6% for year end 2023.
Aier Eye Hospital (300015.CH) 22H1 – More Downside Ahead; The Long Logic Doesn’t Exist
- The fundamental changes in the population structure will lead to a decline in the growth rate of the total retail sales of consumer goods. The long logic doesn’t exist.
- Aier has hit a growth ceiling. As the endogenous demand will be stepped downward gradually, the performance of Aier will further decline. The downward elasticity of valuation is greater.
- It is still difficult for healthcare sector to have its own independent growth logic. The bottom of healthcare sector would appear after the collapse of Aier’s valuation.
CPMC Holdings (906 HK): Good Time to Re-Visit
- Underpinned by higher ASP and sequentially lower input costs, CPMC Holdings (906 HK) should achieve better margin in 2H22. Its 17% fall in share price YTD makes it appealing.
- Average aluminum price was down 14% so far in 2H22, vs. 1H21, good to its costs. Well-controlled selling and administrative costs will help to support profitability recovery.
- New two-piece can capacity will grow by 54% over the next three years as 5 production lines are expected to be added. Most of them already have demand lined up.
Agilent Technologies: New Launches In Mass Spectrometry & Other Drivers
- Agilent Technologies delivered an excellent quarterly result with earnings and revenue exceeding market expectations significantly.
- The strong results were led by strength in its biggest markets i.e., chemical, energy, and pharma.
- We provide the stock of Agilent Technologies with a ‘Hold’ rating with a revision in the target price.
Big Food Automation
- While the pandemic has uprooted many industries, perhaps none have seen a larger impact than the Restaurant and Fast Food Industry.
- These industries have been hit with a barrage of issues including a mass exodus of workers, inflation hitting the prices of ingredients, and foot traffic being much lower due to a change in eating preferences.
- These chains have struggled with their profit margins, which have yet to reclaim their pre-covid levels and could get worse due to several headwinds in the coming months.
ATEN: Security Remains in Demand
- ATEN should continue to benefit from security remaining at the top of priority lists for enterprises and service providers after more network intrusion and hacking news in recent days
- The proposal from Vista Equity Partners to purchase KnowBe4 (KNBE) provides greater clarity of the discount ATEN’s stock trades at
- ATEN’s purchase of shares from its venture capital shareholder, Summit Partners, at $12.75 per share suggests there is value at current levels
WDFC: Expectations Set for Disappointment
- The recent decline in crude oil has resulted in optimism WDFC’s gross margin would improve. There is a delay before WDFC sees a benefit/impact from the price of oil
- We continue to maintain our viewpoint of WDFC experiencing slower demand for its products from consumers and retailers holding back on orders
- WDFC’s exposure to international markets could negatively impact sales due to the strong US Dollar
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