Bottom-Up EquitiesDaily Briefs

Equity Bottom-Up: Sea Ltd, Viva China Holdings, 3SBio Inc, Confluent and more

In today’s briefing:

  • Sea Ltd (SE US) – Navigating Challenging Waters With Sails Set
  • Visit to a Clarks Store in London, A New CEO, & The Surprising Popularity of Clarks’ Wallabees
  • 3SBio Inc (1530 HK): Core Biopharmaceutical Portfolio On A Double-Digit Growth Path
  • Confluent: Harnessing Data In Motion. Initiate At Overweight

Sea Ltd (SE US) – Navigating Challenging Waters With Sails Set

By Angus Mackintosh

  • There has been a recent press commentary about Sea Ltd laying off staff, which although unpleasant reflects management’s decisive and pragmatic decision-making style which is no bad thing.
  • It is unclear how many staff are being laid off and where but it seems that Indonesia is not impacted in a big way and core markets continue to perform.
  • We will not follow on the coattails of liquidity with a negative recommendation when what management is doing looks positive and Sea Ltd (SE US) is batting above its peers.

Visit to a Clarks Store in London, A New CEO, & The Surprising Popularity of Clarks’ Wallabees

By Douglas Kim

  • I visited a Clarks store in Putney, London today. I provide details of this store visit. 
  • Clarks is well poised to stage a major turnaround in business, capitalizing on improving popularity of its core Wallabee shoes and expansion into other distribution channels such as Deichmann. 
  • Clarks hired Jonathan Ram as its new CEO in April 2022. Previously, Ram headed up HanesBrands global activewear since 2018. He also worked 16 years at New Balance.

3SBio Inc (1530 HK): Core Biopharmaceutical Portfolio On A Double-Digit Growth Path

By Tina Banerjee

  • 3SBio Inc (1530 HK)‘s core products have dominant market share in their respective therapeutic areas, lending a favorable financial profile to the company to fund its R&D and commercialization efforts.  
  • Flagship drug, TPIAO remained resilient to the COVID-19 and clocked a revenue CAGR of 32% during 2016–2021. Low penetration of TPIAO’s targeted indications leaves further room for its growth.
  • Haircare product Mandi has high market share of 70%+ and clocked 64% y/y revenue growth in 2021. 3SBio aims to launch Mandi foam, which will further sharpen its competitive edge.

Confluent: Harnessing Data In Motion. Initiate At Overweight

By Andrei Zakharov

  • Confluent (CFLT US)  is an American-based data infrastructure software company and a major contributor to the open-source project Apache Kafka. 
  • Original creators of Apache Kafka founded the company in 2014. Today, Kafka has 5M+ lifetime downloads, and >100,000 organizations use the successful open source project.
  • We believe Confluent (CFLT US)  is uniquely positioned to benefit from the widespread adoption of Apache Kafka and the growing $50B+ total addressable market. 

Related tickers: Sea Ltd (SE.N), Viva China Holdings (8032.HK), 3SBio Inc (1530.HK)

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