3 January 2022: iFast Corp (IFAST SP), Guangzhou Baiyunshan Pharmaceutical Holdings Co. Ltd. (874 HK)

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SINGAPORE

iFast Corp (IFAST SP): S$100bn by 2028

BUY Entry – 8.26 Target – 9.00 Stop Loss – 7.86
iFast provides investment solutions to financial advisers, financial institutions, insurance companies, pension fund managers, retail and accredited investors, and multinational companies. The company’s investment platform offers a wide selection of investment products from many different product manufacturers into one consolidated portfolio.
Growing assets under administration (AUA). iFast’s AUA continued to register new record levels, reaching S$18.4bn as at 30 September 2021, a growth of 46% YoY and 27% year-to-date. The AUA of unit trusts, its key investment asset class, grew to a record S$13.5bn, a growth of 40% YoY and 24% year-to-date.
Big hairy audacious goal. The group has set an AUA target of S$100bn by 2028 as it accelerates growth in HK, pursues more financial licenses in different jurisdictions, and makes more progress towards being a top Fintech wealth management player with a global business model. Reaching the S$100bn AUA target would imply a 27% CAGR from its current AUA of S$18.4bn.
Positive consensus view. There are 4 BUYS / 1 HOLD / 1 SELL and a 12m average target price of S$10.32, implying a 23% upside potential from last close. EPS is forecasted to grow 54% YoY in FY21 and 25% YoY in FY22, bringing down forward P/Es to 70x and 56x.

iFast’s Assets under Administration growth has exploded since the pandemic began

Ascendas REIT (AREIT SP): Big, Bigger, Biggest

REITERATE BUY Entry – 2.96 Target – 3.20 Stop Loss – 2.88
AREIT is among the largest REIT in Singapore by market cap (S$12.5bn), second only to CapitaLand Integrated Commercial Trust (S$13.4bn market cap) It is Singapore’s largest industrial REIT with investments spanning from business parks to industrial facilities. Its assets include 220 properties in Singapore, US, Australia and in the UK. As at end 2020, the REIT had S$15bn in assets. It completed S$973mn of acquisitions in FY2020 and plans an additional S$535mn worth of investments over the next two years.
Still huge expansion potential. AREIT’s gearing of 37% is well below the 50% regulatory limit, giving the REIT more than S$4bn of acquisition debt headroom. This is important for REITs who can capitalise on size and scale to achieve better DPU vs smaller sized peers, while simultaneously offering diversification within their portfolio.
The trend is your friend. Despite the pandemic, AREIT achieved 3.7% positive rental reversion in 3Q21, driven by healthy demand in business space, high-specification industrial buildings & data centres and logistics and distribution centres. Singapore’s economy is forecasted to expand by 7% in 2021 and grow by another 3-5% in 2022, according to official forecasts by the Ministry of Trade and Industry.
Attractive yields and consensus estimates. offers a dividend yield of 5.3%/5.6%/5.8% for FY 2021/22/23F, according to Bloomberg consensus forecasts. Consensus has a target price of S$3.48 compared to its current unit price of S$2.96.

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HONG KONG

Guangzhou Baiyunshan Pharmaceutical Holdings Co. Ltd. (874 HK): Traditional Chinese Medicine in play

Buy Entry – 21.5 Target – 25 Stop Loss – 20
Guangzhou Baiyunshan Pharmaceutical Holdings Co Ltd is engaged in the pharmaceutical and healthcare industry. The Company’s segments are Great Southern TCM, Great Commerce, Great Health and Great Medical Care. The Company’s Great South TCM includes research, development, manufacturing and sales for Chinese and western medicine, chemical raw medicine, natural drug, biological medicine and intermediates of chemical raw medicine. The Company’s Great Health segment includes the research, development, manufacturing and sales of beverages, foods, health products and other products. The Company’s Great Commerce segment includes wholesale, retail, import and export for western medicine, Chinese medicine and medical apparatus and instruments. The Great Medical segment is engaged in medical services, traditional Chinese medicine health preservation, modern pension and medical equipment industry.
The year-end rally of the TCM sector shall continue. The sector in A-share recognised an average 25% rally from November to December 2021. Several catalysts are in play: 19 provinces announced the TCM procurement list, paving the path for centralized procurement of TCM in 2022. TCM makers hiked the retail drug prices due to the increase in raw material prices. Favourable policies including increasing new drug approvals and supporting more facilities establishments are expected to continue in 2022.
Sector valuation at historically low levels. TMC sector is at 10x to 20x PER as of the end of 2021. The situation of the ageing population in China in the mid-and-long term is a key factor to uphold the sector valuation as older people are more prone to take TCM. The Baiyunshan’s PE is trading at lows currently, and hence, the risk-reward is more attractive now.
The updated market consensus of EPS growth in FY22/23 are 4.26%/1.46% YoY respectively, which translates to 8.0x/7.9x forward PE. Current PER is 8.3x. Bloomberg consensus average 12-month target price is HK$23.70.

Baiyunshan’s 10-year PER record

The updated market consensus of EPS growth in FY22/23 are 4.26%/1.46% YoY respectively, which translates to 8.0x/7.9x forward PE. Current PER is 8.3x. Bloomberg consensus average 12-month target price is HK$23.70.

Ganfeng Lithium Co Ltd (1772 HK): Fundamentals upbeat but price oversold

REITERATE Buy Entry – 115 Target – 140 Stop Loss – 105
GANFENG LITHIUM CO., LTD. is a China-based company principally engaged in the research, development, production and sales of deeply processed lithium products. The Company’s main products include lithium compounds, lithium metal and lithium batteries. The Company’s products are mainly used in electrical vehicles, chemicals and pharmaceuticals. The Company distributes its products in the domestic market and to overseas markets.
Lithium carbonate reached a new high. Lithium carbonate prices in China rose to RMB268,500/tonne as of 29th December. As holiday seasons (from Christmas to Chinese new year) draws near, production is expected to slow down as refinery plants will be gradually under the annual overhaul (7 to 30 days). However, EV companies accelerated to stock up lithium carbonate inventories before the holidays. The strong demand for raw materials for batteries will continue to push prices higher at least till 1Q22.
Overseas expansion approved. Recently, the board approved the acquisition of 50% equity interest in Netherlands SPV Company by GFL International Co., Limited, a wholly-owned subsidiary of the Company at a price of US$130 million with its own funds. The exploitation licence of Goulamina Spodumene Mine Project will be transferred to Netherlands SPV company. Ganfeng is considering the 2nd phase expansion of the Goulamina Spodumene Mine Project. The production capacity of the project will increase by 75% from 2.3 million tons to 4 million tons per annum; the production capacity of spodumene concentrate will also increase accordingly, compared to about 450,000 tons per annum, placing Goulamina Spodumene Mine Project among the largest producers globally.
Updated market consensus of the EPS growth in FY22/23 is 55.8%/24.6% YoY respectively, which translates to 25.4x/20.4x forward PE. Current PER is 43.3x. Bloomberg consensus average 12-month target price is HK$205.46.

Lithium carbonate prices

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MARKET MOVERS

United States

Top Sector Gainers

Sector	Gain	Related News
Marine Shipping	+1.7%	Freight Rates on Every Mode of Transport Are Boosting Inflation
Homebuilding	+0.9%	Housing Market Predictions 2022: Will Prices Drop?
Forest Products	+0.9%	Sky-High Lumber Prices Are Back

Top Sector Losers

Sector	Loss	Related News
Internet Retail	-1.3%	Stocks Slip on NYE, Still Deliver a Terrific 2021
Media & Entertainment	-1.3%	NA
Biotech	-0.8%	Here’s What Happened to Biotech This Year

Cruise line stocks extended their losses on the last day of 2021 after the Centers for Disease Control and Prevention (CDC) on Thursday said Americans should not travel on cruises, regardless of vaccination status. Carnival Corporation (CCL) and Norwegian Cruise Line (NCLH) saw their stock decline 2% and 1.3% respectively. Cruise ships operating in U.S. waters reported about 5,000 Covid cases to the CDC between 15 -29 December last year, which was a major spike compared with the first two weeks of the month when 162 cases were reported.
Nio (NIO US) shares lost 2.3% on Friday after China’s Finance Ministry announced a steep cut and eventual scrapping of subsidies it currently offers to buyers of new energy vehicles. Subsidies will be cut by 30% in 2022 and then stopped altogether after Dec. 31, 2022. Subsidies have been one of the biggest competitive advantages for local Chinese EV manufacturers like Nio over foreign rivals such as Tesla.
Pfizer (PFE US) and BioNTech (BNTX US) shares climbed after an article by The New York Times said that the Food and Drug Administration (FDA) plans to authorize booster shots of Pfizer and BioNTech’s vaccine for people aged 12 to 15. The article cited “people familiar with the agency’s deliberations,” adding that the FDA also aims to authorize a booster for younger children (aged 5 to 11) burdened with immune deficiencies. Additionally, British regulators have approved the use of Paxlovid – the drug maker’s Covid-19 antiviral pill – for people over 18 with mild to moderate illness.

Singapore

Disa (DISA SP) gained 17% to S$0.007 on earlier news that the company had signed a tripartite licensing agreement with the National University of Singapore (NUS) and Singapore Health Services (SingHealht) for the use of a new saliva-based Covid-19 antigen rapid test (ART) kits. Shares of Disa had traded between S$0.001 and S$0.002 before the announcement on 8 December 2021.
Singapore technology-related stocks rallied on the last trading day of 2021, with stocks of UMS Holdings (UMSH SP), Frencken (FRKN SP) and Aztech Group (AZTECH SP) gaining between 3-4% on last Friday’s early close. The rally in Singapore tech-related stocks followed the strong rebound among HK-listed tech stocks last week on lighter-than-average trading volumes.
Lion-OCBC Securities Hang Seng Tech ETF (HST SP) shares of the ETF which tracks the 30 largest technology companies listed in Hong Kong jumped more than 3% on Friday, leading gains among major Asia-Pacific markets on Friday. Shares of Alibaba, Baidu and Bilibili surged 8% while those of Tencent and Meituan gained around 3%. Sentiment among tech stocks also received a boost from Sensetime’s 33% jump on Friday, adding on to gains from its debut on Thursday.

Hong Kong

Top Sector Gainers

Sector	Gain	Related News
Consumer Electronics	5.03%	Tech stocks in Hong Kong surge in shortened trading day for multiple Asia-Pacific markets
Leisure & Recreation	+4.39%	China curbs New Year’s Eve celebrations to reduce Covid-19 infection risks
Biotechnology	3.82%	CN NHSA, NATCM: To Include TCM Decoction Pieces; CN Patent Drugs in Medical Insurance Coverage List

Top Sector Losers

Sector	Loss	Related News
Soft Drinks	-0.43%	NAYUKI Peng Xin Eyes Overseas Expansion to New York
Petroleum & Gases	-0.32%	ESG shares underperform oil and gas in 2021
Investments & Assets Management	-0.13%	CHINA HUARONG Completes Issuance of Domestic Shrs, H-shrs; CHINA LIFE Holds 2.4% Stake

New Oriental Education & Techlgy Grp Inc (9901 HK) The company officially launched a live-streaming platform called “Dongfangzhenxuan,” with the company’s founder Yu Minhong set to deliver his first live streaming show selling fresh produce, New Oriental announced via its official WeChat account last week.
China Traditional Chinese Medicine Holdings Co. Limited. (570 HK) The traditional Chinese medicine sector jumped. China’s National Healthcare Security Administration (NHSA) and National Administration of Traditional Chinese Medicine (NATCM) issued a guidance opinion on supporting the tradition of Chinese medicine through medical insurance, designating that qualified traditional Chinese medicine decoction pieces and Chinese patent drugs, along with other relevant medicine products, will be included in the country’s medical insurance coverage list. The company expected some of its medicines to be included in the list.
Flat Glass Group Co Ltd (6865 HK) Shares closed at a one-month high. Its A-shares closed at the high since September. There was no company-specific news. The photovoltaic sector jumped as investors expected polysilicon prices to recover in 1H22.
Weimob Inc (2013 HK) There was no company-specific news. The technology sector jumped, following Thursday’s Chinese technology stocks’ rally.
China Evergrande New Energy Vehicle Group Limited (708 HK) China Evergrande New Energy Vehicle Group started its first mass production last Thursday, two sources with direct knowledge of the matter said. Mass production for its inaugural Hengchi 5 sport-utility vehicles at its Tianjin production facilities came 12 days ahead of schedule, the people said, and the firm plans to hold an official ceremony in the next two weeks.

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