Material Bets On China | Fisher & Paykel Jumps 

30 November 2022

New Zealand Market Movers 

The New Zealand market (NZX 50 Index, +0.8%) rose on Tuesday, buoyed by a dramatic lift in Fisher & Paykel Healthcare (+10.1%) and Gentrack (+18.3%). See our Stock in Focus section for more on Fisher & Paykel. Gentrack reported revenue of $126.3 million for its 2022 full-year results, up 19.5% on its full year 2021. Aged care provider, Arvida Group (+4.2%) also surged after reporting its half year Net profit after tax of $89.2 million, up 18% from the previous corresponding period. 

Australia Market Movers 

The Australian market (ASX 200 Index, +0.3%) closed higher on Tuesday, with Materials (+1.7%) the best performing sector, as investors bet that Beijing loosen its zero-Covid policy in reaction to the protests erupting across the country and iron ore futures top US$100 per tonne for the first time in two months. Rio Tinto (+3.5%) and BHP Group (+2.1%) both advanced on the day. 

Europe Market Movers  

European markets (Stoxx 600 Index, -0.1%) closed marginally lower on Tuesday. The Resource (+2.7%) sector was the best performing sector with Chemicals (-1.7%) the worst. 

Economic sentiment in the Euro Area rose in October, following eight straight months of declines, improving for the first time since Russia’s invasion of Ukraine. 

US Market Movers 

US markets (S&P 500 Index -0.2%) traded flat for most of Tuesday as investors anticipate US jobs data starting tomorrow, although did close lower for the third consecutive day.

Chinese internet stocks were some of the day’s biggest movers. Bilibili (+22.3%) surged after reporting better-than-expected earnings and revenue. Elsewhere, JD.com (+10.9%), Baidu (+9.0%), and Pinduoduo (+5.9%) all climbed more than 5 percent. 

Stock In Focus: Fisher & Paykel Healthcare (FPH.NZX)

Fisher & Paykel Healthcare (+10.1%) soared yesterday as it reported revenue of $690.6 million for the six months ended 30 September 2022, above the $670 million forecast by the company in August. Revenue was down -23% from the previous corresponding period, but up by +21% on the comparable pre-pandemic period.  

More importantly, notes on the company’s outlook moving forward were promising, with FPH reporting that “we expect second half revenue for the 2023 financial year will be higher than in the first half”, however, FPH declined to give full-year quantitative revenue or earnings guidance. The market has been buoyed by management signalling that: (1) a proportion of Hospital customers have worked through overstocking issues, while (2) gross margin pressures have likely bottomed, with freight costs also easing. The market had clearly got too bearish on the stock, which we see as a top-quality healthcare company with a great track record. We maintain our BUY rating as looking forward the possibility a strong Northern Hemisphere flu season should help the normalisation process. 

What Markets will be Watching this Week (UTC +13) 

Monday 
NZ Kiwi Property Group earnings 

Tuesday 
NZ Fisher & Paykel Healthcare earnings 

EA Economic Sentiment NOV 

Wednesday 
EA Inflation Rate YoY November 

Thursday 
US ADP Employment Change November 

US JOLTS Job Openings October 

US Salesforce earnings 

EA Unemployment Rate October 

Friday 
US Personal Income MoM OCT 

Saturday 
US Non Farm Payrolls November 

The New Zealand market (NZX 50 Index, +0.8%) rose on Tuesday, buoyed by a dramatic lift in Fisher & Paykel Heathcare (+10.1%) and Gentrack (+18.3%). See our Stock in Focus section for more on Fisher & Paykel. Gentrack reported revenue of $126.3 million for its 2022 full-year results, up 19.5% on its full year 2021. Aged care provider, Arvida Group (+4.2%) also surged after reporting its half year Net profit after tax of $89.2 million, up 18% from the previous corresponding period. 

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