In today’s briefing:
- TSMC – Exceptional as Usual
- Arwana Citramulia (ARNA IJ) – Tiling the Nation in 2022
- Bukalapak: Still Overvalued & Former CEO’s Ownership Is an Overhang
- Earnings Update | TCS: Reports Decent Earnings
- Toyota – Records Across the Board
- ADVANC: Opportunities Fully Priced in for 2022, Downgrade to HOLD
- Mani Inc (7730 JP): No Immediate Respite Seen
- DOHOME: Expect 4Q21 Earnings Grow Both YoY and QoQ
- HHC: CFO Change
TSMC – Exceptional as Usual
- TSMC posted results at or above the top end of its guidance ranges for 4Q21 at the revenue, GPM and OPM levels.
- Guidance for 1Q22 was also punchy with the midpoint of revenue guidance 6.0% above consensus and mid to high 20s revenue growth guidance for the year.
- We still suspect however that momentum could actually accelerate through the year.
Arwana Citramulia (ARNA IJ) – Tiling the Nation in 2022
- Indonesia’s best quality ceramic tile producer, Arwana Citramulia (ARNA IJ), continues to register strong growth and higher margins due to improving product mix and improvements in manufacturing efficiency.
- Arwana Citramulia (ARNA IJ) is introducing new higher-end porcelain tiles which will displace Chinese imports given lower pricing, better terms for wholesalers and significantly faster delivery times.
- The company remains a top choice amongst Indonesian industrials with high-quality governance and a strong growth track record along with attractive valuations.
Bukalapak: Still Overvalued & Former CEO’s Ownership Is an Overhang
- With the penetration rate as high as 42%, Mitra could be fast running out of room for growth.
- Consensus seems to be overestimating Bukalapak (BUKA IJ)’s 2021 and 2022 revenue by 22% and 40% respectively.
- At 6.0x consensus FY+2 revenue, Bukalapak is still expensive compared to the peer average of 4.3x.
Earnings Update | TCS: Reports Decent Earnings
- TCS reported a healthy revenue growth of 15.4% YoY in constant currency (CC) terms. Operating margins contracted by -60bp to 25%, due to supply-side challenges.
- LTM attrition for TCS was 15.4%, best in the industry. However, on an absolute basis, it is high and TCS is continuously working on stabilizing it.
- Growth has been broad-based across sectors and the demand outlook remains robust on the back of strong spends by corporates on digital transformation and adoption of cloud.
Toyota – Records Across the Board
- Toyota is up 52% in just over a year, posting impressive performance for a company of its size.
- Its displacement of GM as the number one automaker in the US has made headlines but results in China and Europe have also been impressive.
- Hybrid penetration is now also over 25% in all major regions and we expect this to continue to be a driver.
ADVANC: Opportunities Fully Priced in for 2022, Downgrade to HOLD
- Downgrade ADVANC to HOLD from BUY rating with a TP of Bt227 due to limited upside.Share price soared by 14% since 19 November 2021 is due to magnified positive industry
- We expect 10% upside to our target price from merger sensitivity analysis as ARPU growth may increase rapidly from limited consumer choice and 5G features.
- We expect 4Q21 core profit at Bt6.6bn (-4%YoY, flat QoQ), as rising subscriber base is continuously offset by declining ARPU.
Mani Inc (7730 JP): No Immediate Respite Seen
- Mani Inc (7730 JP) offers medical devices, which are mainly used in the elective procedures including cataract surgery and dental procedures.
- In FY21, the company missed its guidance for both revenue and operating income by 2% and 5%, respectively, due to higher-than-expected impact of the COVID-19.
- With the rising cases of highly infectious Omicron variant of the COVID-19 in major operating regions, the company is expected to miss or lower its FY22 guidance.
DOHOME: Expect 4Q21 Earnings Grow Both YoY and QoQ
- A slowdown short-term performance but solid long-term growth outlook. We reiterate our BUY rating with a target price of Bt28.0 derived from 35xPE’22E,which is close to the biggest home-improvement player
- We expect DOHOME to report 4Q21 net profit at Bt420m (+95%YoY, +23%QoQ), YoY growth will be supported by (1) a solid SSSG at +39%YoY, and (2) gross profit margin expansion
- We expect 1H22 earnings to slightly soften YoY pressured by (1) a drop in margin for steel products,which will trim down overall gross profit margin to roughly 19% from 21.7%-22.7%
HHC: CFO Change
- HHC is making more changes at the executive level with the promotion of Carlos Olea to CFO, who replaces Correne Loeffler
- HHC is not stopping with the 5 master planned communities (“MPC”) and has now added Douglas Ranch in the Phoenix area into the mix
- We believe the increase in FFO HHC should generate over the next two years requires reinvestment that HHC is putting forth through the Seaport District and Douglas Ranch
Related tickers: TSMC (2330.TW), Arwana Citramulia (ARNA.JK), Tata Consultancy Svcs (TCS.NS), Toyota Motor (7203.T), Advanced Info Service (ADVANC.BK), Mani Inc (7730.T), Dohome PCL (DOHOME.BK), Howard Hughes Corp (HHC.N)
Before it’s here, it’s on Smartkarma
