Vesync: Overall Gross Sales Indicate Healthy Growth; Shares Remain Undervalued

We keep no-moat Vesync’s fair value estimate at HKD 6.10 after the release of its overall gross sales data for first-quarter 2023. We think the firm remains undervalued, but the concerns on slowing global economic growth will cap its near-term share price performance. We expect Vesync’s earnings to rebound sharply in 2023, driven by the absence of costs associated with its air fryers product recall that had hurt 2022 earnings. For the first half of 2023, we think earnings growth of around 20% year on year is possible.