In today’s briefing:
- Rex: Show Me the Incentives and I Will Show You the Outcome
- Binjiang 3316 HK: Most Resilient Private PMC with Good Upside Potential
- CP Food (CPF TB): Vietnamese Ops To List On HCM Exchange
- Dongfang Electric (1072 HK): From Strength to Strength
- Moderna (MRNA US): Blowout Q1 Results; Maintained Guidance; Visibility Beyond COVID
- Komatsu – Sensible Top Line Guidance But Margins Too Conservative
- Vanguard (5347.TT): 1Q22 Results/ 2Q22 Preview- Further Price Increase Could Hold in 2H22
- Pharmaessentia Corp (6446 TT): Key Drug Is Advancing Commercialization Globally
- ONEE: Expect Earnings to Grow YoY and QoQ in 1Q22
- Pan Pacific International: A Reasonably Strong Third Quarter Warrants Further Upside
Rex: Show Me the Incentives and I Will Show You the Outcome
- Last month a new options program was announced, board members have two milestones to meet by 8/4/2024: get the stock over 0.45 SGD (50% vesting) & 0.60 SGD (50% vesting)
- Rex’s production in Oman has disappointed but AGM commentary makes us believe the worst is now behind us. A recent Straits Times interview confirms 20K BPD remains the LT target.
- Rex has instituted a good dividend policy and should now max out its 10% annual buyback authorization before dividends are paid later in FY22; win-win situation for shareholders and board.
Binjiang 3316 HK: Most Resilient Private PMC with Good Upside Potential
- Binjiang Service Group (3316 HK) is turning out to be one of the most resilient private PMC in terms of margins and profitability with the conservative approach of the management.
- Trading at 12x/9.4x FY22e/FY23e with 25% of the market capitalization in cash, potential investors have the best of both worlds in value and growth.
- The company will continue to pay 60% of its earnings as dividends, resulting in a 5.2%/7.5% dividend yield for FY22e/FY23e. We believe the stock has the potential to re-rate.
CP Food (CPF TB): Vietnamese Ops To List On HCM Exchange
- CP Vietnam (CPV), an 82%-held unlisted subsidiary of CP FOODS (CPF TB) (CPF), has applied for a listing on the Ho Chi Minh Stock Exchange
- CPV, an integrated agro-industrial and food business play in Vietnam, generated Bt111.1bn of sales in FY21, accounting for 21.7% of CPF’s revenue.
- CPV forms part of Cp Pokphand (43 HK) which was privatised in January this year.
Dongfang Electric (1072 HK): From Strength to Strength
- The 1Q22 result of Dongfang Electric (1072 HK) kick-started FY22 with an encouraging new record high quarterly profit and a good recovery in YoY new order momentum.
- We are excited to see DEC managed to control its selling, administrative and R&D costs with a slight 2.7% YoY growth, compared with a solid 29.8% revenue increase.
- Recurring pre-tax profit growth is estimated to be over 30% YoY, and its order backlog at around Rmb85.4bn, 1.8x its FY21 revenue. We consider its 7.7x FY22F PER very undemanding.
Moderna (MRNA US): Blowout Q1 Results; Maintained Guidance; Visibility Beyond COVID
- Moderna Inc (MRNA US) reported strong Q1 results, with revenue and EPS beating consensus by 33% and 65%, respectively. The company reiterated 2022 Covid vaccine sales guidance of $21 billion.
- With the pandemic likely to evolve into and endemic phase with a more seasonal sales pattern, Moderna is advancing its vaccine and therapeutic pipeline beyond COVID.
- Beginning in the fall of 2022, Moderna could see three respiratory commercial launches over the next two to three years. Moderna is looking for potential M&A opportunities across the globe.
Komatsu – Sensible Top Line Guidance But Margins Too Conservative
- Komatsu reported 4QFY22 results on the 28th of April and recorded revenue of ¥787bn (6.2% above consensus) and OP of ¥94.5bn (13.1% above consensus).
- They also guided for revenue to increase 7.1% YoY vs. HCM which guided for a 6.3% fall driving a significant and premature share price decline.
- The market has corrected some of that fall as it appears to increasingly agree with our call that HCM’s guidance was nonsense conservatism.
Vanguard (5347.TT): 1Q22 Results/ 2Q22 Preview- Further Price Increase Could Hold in 2H22
- Vanguard’s revenue is NTD$13.49bn, which is falling at the high-end of guidance NTD$13.2~13.6 in 1Q22.
- Vanguard is likely to further raise price in 2Q22, and we expect revenue/GM could be NT$14.67bn/49.2% in 2Q22.
- Further price increase could hold in 2H22 because 1) the smartphone growth expectation is reducing in 2Q22, and 2) the US Federal Reserve increased interest rate to control the inflation.
Pharmaessentia Corp (6446 TT): Key Drug Is Advancing Commercialization Globally
- Pharmaessentia Corp (6446 TT) is advancing global commercialization of its flagship drug, Besremi, the first FDA-approved medication for polycythemia vera that patients can take regardless of their treatment history.
- Thus far, Besremi has been commercialized for polycythemia vera in 23 countries. Launch preparation is underway in four geographies including Japan, China, Singapore, and Hong Kong.
- The company is conducting clinical trials for Besremi for other indications, including COVID-19. Pharmaessentia also has a rich pipeline of clinical-stage drug candidates.
ONEE: Expect Earnings to Grow YoY and QoQ in 1Q22
- We anticipate channel ONE average all day rating to climb back to top-5 tier channel by 2H22after fell down to no.7 in 1Q22.A recovery in rating will instantly benefit group
- We expect the company to report 1Q22 net profit at Bt219m (+13%YoY +7%QoQ), the highest level in the past three quarter.
- NEE still hold strong position in the digital TV industry with high potential growth of contents distribution via online platforms, other businesses that started to contribute great portion of profit
Pan Pacific International: A Reasonably Strong Third Quarter Warrants Further Upside
- Although consensus looks a bit challenging, there could be a decent OP beat yet again in the third quarter.
- Meanwhile Pan Pacific International Holdings (7532 JP)’s valuation is still cheap and has decent potential for multiple expansion.
- Thus, there could be more upside to PPIH if the company dismisses whatever the remaining concerns over profitability through a reasonably strong third-quarter performance.
Related tickers: Rex International Holding (REXI.SI), CP FOODS (CPF.BK), Dongfang Electric (1072.HK), Komatsu Ltd (6301.T), Vanguard Intl Semiconductor (5347.TWO), Pharmaessentia Corp (6446.TWO), Pan Pacific International Holdings (7532.T)
Before it’s here, it’s on Smartkarma
