In today’s briefing:
- Tencent (700 HK) Earnings Preview: To Stop Decrease in 4Q22 and to Recover in 2023
- Iwataya Opens Lounge S – A New Space for the Truly Wealthy
- Berli Jucker (BJC TB) – A Retail and Packaging Fuelled Growth Story
- Pagseguro, a Cheap Compounder?
- AviChina Industry (2357 HK): Still Well-Placed as Our High Conviction
- LONGi Green Energy to Build $600 Million Solar Panel Plant in U.S.
- Giant Biogene Holding (2367.HK) – The Situation May Not Be as Rosy as It Looks
- Oryzon Genomics – Clinical milestone reached with FRIDA initiation
- Dorothy Energization Scheduled; Financing Secured; Company at an Inflection Point
- New CEO Looking to Leverage Continental and Other Partners for 4Sight Rollouts
Tencent (700 HK) Earnings Preview: To Stop Decrease in 4Q22 and to Recover in 2023
- We believe revenue will grow by 2.5% YoY in 4Q22 and 9% in 2023.
- We believe EPS will decrease by 62% YoY in 4Q22 and increase by 16% in 2023.
- We expect the stock has an upside of 42% for yearend 2023. Buy.
Iwataya Opens Lounge S – A New Space for the Truly Wealthy
- Like all department stores, Iwataya in Fukuoka is keen to grow services for its wealthiest customers.
- It already has special lounges for high spending customers and has now opened a new, invitation-only lounge for its top 300 clients, many of whom are under 40.
- Capturing more share of the wealth market is the only real hope department stores have to grow.
Berli Jucker (BJC TB) – A Retail and Packaging Fuelled Growth Story
- Berli Jucker (BJC TB) released a strong set of 4Q2022 numbers reflecting the benefit of increasing tourism numbers in Thailand significantly positively impacting 25 of its stores.
- The company strategically reduced its B2B business, whilst growing its Don Chai stores quite aggressively. Berli Jucker plans to increase its store numbers further in 2023.
- Berli Jucker‘s packaging supply chain business will see new aluminium can capacity this year in Thailand and should see a 2H2023 growth pick-up. Overall a more positive outlook for 2023.
Pagseguro, a Cheap Compounder?
- I was complaining recently that I couldn’t find any cheap stocks, but I will take that back!
- I got another one, Pagseguro (PAGS). A Brazilian payment processor and online bank and potential compounder.
- PAGS trades at about 8x through earnings, has been growing quite rapidly and could see explosive short term earnings growth if they can bring down their financing costs.
AviChina Industry (2357 HK): Still Well-Placed as Our High Conviction
- The slight dip in FY22 earnings for AviChina Industry & Technology H (2357 HK) is due to product restructuring at Avicopter (600038 CH) and higher impairment/fair value losses.
- It should return to growth track in the next two years, with rise in product demand, recovery in Avicopter, further restructuring and M&As being major drivers.
- Share price has increased 15.9% YTD but it is just on 9.2x FY23 PER. Its market cap is at 58.5% discount to holdings in its four listed A-share subsidiaries.
LONGi Green Energy to Build $600 Million Solar Panel Plant in U.S.
- Chinese solar wafer giant LONGi Green Energy Technology Co. Ltd. will partner with U.S. solar developer Invenergy to build a $600 million, 5-gigawatt solar panel assembly factory in Ohio
- The project will be LONGi’s first entrance into the U.S. manufacturing market.
- What will eventually be the largest crystalline silicon solar panel factory in the U.S. will create 850 jobs, and operations are expected to start by the end of 2023
Giant Biogene Holding (2367.HK) – The Situation May Not Be as Rosy as It Looks
- Giant Biogene has been added to Hong Kong Stock Connect.There’s also positive sentiment driven by the consumption recovery after China reopens. But the Company is overvalued if compared with peers.
- The subsequent product pipeline progress is relatively slow, with a gap of nearly two years in the middle. So, Giant Biogene’s stock price performance may be relatively weak after 2024.
- Due to various restrictions, the actual market space of collagen in the future may not be as large as expected. This is a point investors need to be aware of.
Oryzon Genomics – Clinical milestone reached with FRIDA initiation
Oryzon Genomics has announced it has enrolled the first patient in its Phase Ib FRIDA study investigating iadademstat in combination with Astellas’ FDA-approved FLT3 inhibitor gilteritinib to treat FLT3+ relapsed/refractory (r/r) acute myeloid leukaemia (AML) patients. The FRIDA study is central to Oryzon’s overall strategy as management believes the second-line AML setting may represent a potentially quicker route to market for iadademstat, targeting an AML patient population with limited and sub-optimal treatment options. FRIDA will recruit up to 45 patients across 10–15 trial sites in the United States and, in our view, its initiation marks a significant clinical milestone for the company.
Dorothy Energization Scheduled; Financing Secured; Company at an Inflection Point
- Final funding for Project Dorothy is now secured, with energization scheduled for the first week of April, pending approval from ERCOT.
- Soluna recently announced $7.5 million in funding from existing project investor Spring Lane Capital (SLC) that will be used to complete the final energization of Dorothy and support corporate expenses.
- SLC’s stake in the 25 MW Dorothy 1A increases to ~85% from 32%, but Soluna retains the right to 50% of 1A’s profits after SLC achieves an 18% IRR hurdle.
New CEO Looking to Leverage Continental and Other Partners for 4Sight Rollouts
- CEO Matt Fisch’s first earnings call announced revenue of $1.1 million in 4Q22, in line with quarterly expectations.
- CFO Bob Brown announced that he is leaving the company effective March 31.
- Fisch said the company is “in the process of developing a strategic plan and timeline that builds on [our] significant achievements made to date.”
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