Bottom-Up EquitiesDaily Briefs

Equity Bottom-Up: Alibaba Group, Toyota Motor, Cloud Village, Eyebright Medical Technology Beijing, I-Mab, Carabao Group, PTT Global Chemical, Bangchak Corporation and more

In today’s briefing:

  • China Considering a Data Tax on Big Tech
  • Toyota – Revving Up the Hydrogen Engine
  • Cloud Village IPO (PHIP): Earnings Growth Slowing Down and Expect No Profits
  • Eyebright Medical Technology (688050.CH) -The Impact Of Centralized Procurement and Business Outlook
  • I-Mab (IMAB US): Expanding Commercialization Footprint in China for Innovative Late-Stage Assets
  • CBG: Medium to Long-Term Outlook Remain Solid
  • PTTGC: Better Refinery & Olefins Segment Performance in 4Q21
  • BCP: Bright Refinery Outlook 4Q21 Onwards

China Considering a Data Tax on Big Tech

By Oshadhi Kumarasiri

  • Nikkei reports that a high ranking CCP official has suggested that the platforms possessing personal data should return around 20-30% of the revenue generated to the common prosperity cause. 
  • We expect big tech to lose competitiveness as the government takes control of the use of personal data. Meanwhile the Chinese economic slowdown is a double blow to big tech. 
  • If remaining investors lose faith and exit, big tech can trade at around 1.0-1.5x price to book in the next few years.

Toyota – Revving Up the Hydrogen Engine

By Mio Kato

  • In keeping with its penchant for developing every type of technology imaginable, Toyota has been working on not just fuel cells but also hydrogen engines.
  • Now it is partnering with Mazda, Subaru, Yamaha and KHI to further expand on this concept and add synthetic carbon neutral fuels to the mix.
  • These efforts could potentially provide alternative zero carbon transition paths and are worth understanding.

Cloud Village IPO (PHIP): Earnings Growth Slowing Down and Expect No Profits

By Shifara Samsudeen, ACMA, CGMA

  • Cloud Village (CLV HK) is a leading music streaming platform in China and the company is backed-by NetEase, one of the largest games and entertainment companies in China. 
  • The company has received approval to raise about US$500m through its IPO and this insight focuses on the new data points from the revised PHIP filing.
  • During 2Q2021, the company’s revenues grew 50.5% YoY while operating losses declined to 21.0% of revenues compared to 32.1% in the same quarter last year.

Eyebright Medical Technology (688050.CH) -The Impact Of Centralized Procurement and Business Outlook

By Xinyao (Criss) Wang

  • We analyzed the centralized procurement of IOL and the potential impact on Eyebright Medical Technology Beijing (688050 CH).
  • The OK lens and cosmetic contact lenses have strong consumption attribute, indicating “immune” to centralized procurement policy.
  • We are optimistic about the outlook for Eyebright and there could still be upside potential of its stock price.

I-Mab (IMAB US): Expanding Commercialization Footprint in China for Innovative Late-Stage Assets

By Tina Banerjee

  • I-Mab (IMAB US) shares gained 19% in last 10 days after the company announced commercial partnering deal for its pediatric growth hormone deficiency drug candidate, Eftansomatropin Alfa in China.
  • Oncology drug, felzartamab is expected to be I-Mab’s first drug in China. Last month, I-Mab entered into a partnership with Sinopharm to extend coverage and enhance accessibility of its pipeline.
  • To expand its investor base, I-Mab is expected to complete dual listing on the STAR Market of the Shanghai Stock Exchange by the end of 2022.

CBG: Medium to Long-Term Outlook Remain Solid

By Research Group at Country Group Securities

  • We reiterate a BUY rating for CBG but trim down target price after EPS downward revision to Bt131(-18% from previous TP) based on 35xPE’22E, the average of the Thailand energy
  • We foresee 4Q21 earnings to drop YoY but improve QoQ supported by (1) recovering sales in Thailand and CLMV market, (2) Solid liquor’s distribution revenue growth
  • Revised down 2021-22 earnings by 6%-17% to factor in an increase in raw material cost(aluminum coil).

PTTGC: Better Refinery & Olefins Segment Performance in 4Q21

By Research Group at Country Group Securities

  • Analyst meeting last week came out with a neutral tone. We see bright refinery segment outlook 4Q21 onwards backed by rising gasoline, jet and diesel spreads. Olefins,performance materials segment contribution
  • We expect the 4Q21 core profit to improve QoQ supported by 1) solid olefins and performance materials  spread as new supply additions delayed to 1H22. 2) rising GRM
  • The olefins and performance materials contribution should improve QoQ supported by lower supply from China. While it will be partially pressured by feedstock cost push.

BCP: Bright Refinery Outlook 4Q21 Onwards

By Research Group at Country Group Securities

  • Analyst meeting came out in a positive tone. We maintain the BUY recommendation with a target price of Bt35.0, derived using SOTP method, implying 1.1x PBV’22E. Our valuation reflects positive 
  • Expect 4Q21 recurring profit to improve both YoY and QoQ on the back of solid refinery operations.
  • We see bright refinery outlook 4Q21 onwards driven by rising GRM (better gasoline, jet and diesel spreads) and higher refinery run rate. While earnings from power,marketing and bio-based business segments

Related tickers: Toyota Motor (7203.T), I-Mab (IMAB.OQ), Carabao Group (CBG.BK), PTT Global Chemical (PTTGC.BK), Bangchak Corporation (BCP.BK)

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