In today’s briefing:
- DBS Group Holdings – Lots of Lipstick
- Bukalapak (BUKA IJ) – Enhancing Financial Offerings
- Lawson: Fuelled up and Ready To Go
- Takeda: Excessive Reaction to Recent Setback in Trials; Drop in Share Price Offer Attractive Entry
- 1H22 Obex Research Short Portfolio
- Bloomage Biotechnology (688363.CH) Vs Imeik Technology (300896.CH) – The Logic and the Outlook
- PTTEP: Solid Earnings Performance Hit by Impairment Loss
DBS Group Holdings – Lots of Lipstick
- Move Along, No Problems Here: DBS Group Holdings (DBS.SG) [DBS] participated in a competitor conference on January 10, 2022, suggesting that not an ounce of risk is on balance sheet;
- Digital Franchise: Management also focused on digital initiatives, including: DBS Digital Exchange; Digital Custody; and the Partior platform; and
- Deal Risk Remains High: There was no discussion by management of its headlong buying spree of some fairly spicy transactions. And they are not done.
Bukalapak (BUKA IJ) – Enhancing Financial Offerings
- Bukalapak (BUKA IJ) has announced that it will participate in the upcoming rights issue of new digital bank Allo Bank, its first direct investment in a financial services company.
- This move will help to enhance the company’s financial services offering to its 10.4m plus Mitras and sellers in the platform helping to increase stickiness and improve take-rates.
- We expect positive momentum going forward as some of its new focus areas pick up the pace and valuations look attractive from an EV/gross sales perspective given its growth prospects.
Lawson: Fuelled up and Ready To Go
- Lawson Inc (2651 JP) released rather disappointing 3QFY22 results last week with revenue and OP falling short of consensus by 4.5% and 22.2% respectively.
- Lower than expected profitability is driven by Lawson’s heavy upfront investments on future growth.
- With consensus unjustly penalising Lawson for growth investments, we think that there’s around ¥10.0bn upside to FY+2 consensus OP of Lawson.
Takeda: Excessive Reaction to Recent Setback in Trials; Drop in Share Price Offer Attractive Entry
- Takeda is currently trading at JPY3,175 per share, slightly above its all-time low of JPY3,105 per share. Shares are currently at a 27% discount to its peak in March 2021.
- The company has been divesting its non-core assets and reorganising its business around five core areas: GI, Rare Diseases, Plasma-Derived Therapies, Oncology, Neurosciences and Others.
- Takeda’s share price started plunging after the suspension of a phase 2 study of TAK-994 in October 2021 following the emergence of a safety signal.
1H22 Obex Research Short Portfolio
- Tesla is a short. We know. You can’t short it. But it is a short.
- We continue to look for businesses that overearned and pulled in growth during the pandemic…some more recently identified examples: CHWY, ROKU
- Spotify remains one of our top short ideas, bad business model, and now increasing competition from alternative listening services.
Bloomage Biotechnology (688363.CH) Vs Imeik Technology (300896.CH) – The Logic and the Outlook
- There’re many uncertainties about Imeik’s development strategy, resilience in front of risks and corresponding business performance, which could make it difficult for the market to calmly view the next fluctuation.
- Despite lower profit margin, Bloomage is more R&D oriented and characterized by integration of industrial chain,enabling it to establish wider moat and move forward more stably in the long term.
- Our view is that Bloomage Biotechnology Corporation-A (688363 CH) is expected to have more potential and imagination space than Imeik Technology Development (300896 CH) in the future.
PTTEP: Solid Earnings Performance Hit by Impairment Loss
- We expect PTTEP to post a solid 4Q21 net profit of Bt9.7bn (+283% YoY, +2% QoQ).
- Excluding the impairment loss of US$200m (Mozambique, Yetagun projects), and US$100m gain from reversal of decommissioning expense of Bongkot project, the recurring profit is expected to be Bt13.2bn (+162% YoY)
- The YoY surge will be from 10% and 27% growth in sales volume and average product selling price (ASP) respectively.
Related tickers: DBS (DBSM.SI), Lawson Inc (2651.T), Takeda Pharmaceutical (4502.T), Tesla Motors (TSLA.OQ), PTT E&P (PTTEP.BK)
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