In today’s briefing:
- Mitsubishi Heavy Industries (7011) | Three Reasons to BUY
- Seven & I Marches On in the US Despite Headwinds From Inflation
- China Internet Weekly (27Jun22): Koolearn’ Up & Down, New Rule on Medical Apps
- JD Health: Minimal Impact from New Policy on Digital Healthcare
- Gushengtang (2273.HK) – The Development Momentum Is Good, but There Are Also Challenges
Mitsubishi Heavy Industries (7011) | Three Reasons to BUY
- The recent correction in the share price offers a good chance for long-term bulls to get into the stock
- MHI is the core play on Japan’s energy security given its portfolio of gas and nuclear power plant assets
- The unseasonably HOT weather and potential power cuts, at the same time as soaring energy costs, could be the catalyst for the government to push for nuclear restarts
Seven & I Marches On in the US Despite Headwinds From Inflation
- Seven & I Holdings (3382 JP) should breeze through its rather unchallenging expectations when it releases its first-quarter results next week.
- The company has raised its previous guidance multiple times last year and we expect a similar pattern in the first half next year with 7-Eleven US continuing to exceed expectations.
- Thus, we would buy Seven & I Holdings leading up to earnings expecting a decent upside on rising guidance.
China Internet Weekly (27Jun22): Koolearn’ Up & Down, New Rule on Medical Apps
- New Medical Product Rule banned online direct sales of medical products.
- Koolearn’s stock price plunged after surging, as Tencent reduced its shareholdings.
- Alibaba dismissed employees in Freshippo and JD.com downsized its community group purchase.
JD Health: Minimal Impact from New Policy on Digital Healthcare
- China has released a draft rule on 22nd June that would prevent third-party e-commerce platforms from selling drugs directly to consumers online.
- Alibaba Health as well as JD Health’s shares dropped 15% at the end of trade on 22nd June while Ping An Health’s shares lost about 5.7% of its value.
- This is the First of a series of reports where we analyse the impact of the above draft rule on leading digital-healthcare players in China. This report discusses JD Health.
Gushengtang (2273.HK) – The Development Momentum Is Good, but There Are Also Challenges
- Through perfect partnership system, Gushengtang locks in the scarce TCM physicians, and then quickly establishes/merges offline medical institutions to occupy the market. Such development mode works well so far.
- The challenges are the risks of losing talents to competitors and the weak sales of healthcare products leading to lower profitability.
- Gushengtang is in an industry that receives government encouragement/preferential policies. The 2022 revenue growth forecast could fall back to about 25% considering the pandemic/lockdown. The EPS could narrowly turn positive.
Related tickers: Mitsubishi Heavy Industries (7011.T), Seven & I Holdings (3382.T), JD Health (6618.HK)
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