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Tianjin Pharmaceutical Da Ren Tang (TIAN SP)
Benefitting From Higher Drug Demand And New Growth Impetuses Injected
Some of DRT’s TCMs are on the Chinese authority’s recommended drug list for treating COVID-19 symptoms. Its 25% JV with GSK is a leading producer of Ibuprofen products which saw demand surge. DRT has achieved consistent earnings growth in the past years, riding on China’s ageing population. The recent mixed ownership reform and management changes are likely to have injected new growth impetuses. DRT’s S-share (6.8x 2023F consensus PE) is trading at only 26% of its A-share price.
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Dialog Group (DLG MK)
Blossoming Prospects Include Jetty Throughput, Moritmasu JV And New Storage
We visited Dialog’s Pengerang Deepwater Terminals recently. The takeaways reinforce our view of strong sustainable storage earnings and event catalysts. We see three prospects blossoming for DLG in the near term. Aside from potential new storage offtakers in Pengerang Phase 3, the other two prospects are strong vessel calls (maximising the utilisation of all three jetties) and the Moritmasu-Dialog JV (embarking on new development). Maintain BUY and adjusted target price of RM3.00.
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Banpu (BANPU TB)
2023 Earnings To Weaken On Lower Commodity Prices
BANPU has set aside US$900m capex in 2023, similar to that in 2022, focusing on renewable, clean energy and US gas-based businesses. We cut our 2023 net profit forecast by 47% to Bt18.7b due to lower coal and gas price assumptions, reflecting the weak demand and oversupply concerns. Maintain HOLD with a new target price of Bt11.10.
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Q&M Dental Group
Seeking efficient organic growth in FY23F
■ 4Q22 core net profit of S$2.9m brings FY22 net profit to S$16.5m, below expectations at 90.0% of our estimates, on narrower net profit margin.
■ Weaker profitability was a result of declining contribution from Covid-19 testing, and gestation losses for its digital Artificial Intelligence (AI) venture.
■ Reiterate Add with lower TP of S$0.42 based on 20x FY24F P/E (1 s.d. below mean) while we cut FY23-24F EPS by 3-7% to reflect slower profit growth.
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Lee Swee Kiat Group
Strong growth drivers riding into FY23F
■ We reiterate our positive view on LSK post its FY22 briefing, on prospects of a strong recovery in export sales and margin gains from lower input costs.
■ LSK expects its collaboration with Cuckoo to grow further in FY23, targeting 20k pieces (+67.7% yoy growth) with more aggressive marketing activities.
■ Reiterate Add, with unchanged TP of RM1.23 (10x CY24F P/E).
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Sea Ltd (SE US)
En route to profitability
4QFY22 is a record quarter for Sea
Sea’s FY22 USD3.5b (+7% YoY) revenue beat our/consensus’ full-year expectation (101%/104%), thanks to deeper monetisation on Shopee, which saw take-rate hit a new record (+1.6% pts QoQ). Stripping out exceptional items of USD150m, Sea swung to a net profit for 4Q22 at USD271m from a year-ago loss. We believe Sea’s faster-than-expected improvement in cost measures and e-commerce and fintech monetisation should enable it to break-even in FY23E at the adjusted EBITDA level. Our SOTP-based TP rises 7% to USD105 on a higher e-commerce multiple of 3.4x (from 1.9x) as we roll forward our valuations to FY24E.
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