Smartkarma Daily Briefs

Seven & I Holdings (3382 JP) did not dispute the NHK article’s claims that the founding family aims to raise buyout funds by the end of the fiscal year.
Since 13 November, there have been conflicting press reports on the MBO offer price. The NHK article’s implied offer price of JPY3,082 seems the most credible.
The MBO’s aggressive completion timeline pressures Alimentation Couche-Tard (ATD CN) to respond by either overbidding, working with the founding family at the back-end or walking away.

[JAPAN ACTIVISM] Exedy (7278) – Immediate Results Reaction Was a Damp Squib, But Climbing Now

I wrote last when Exedy was at ¥3,900 and had just announced, good earnings, a sharp div hike, and a huge buyback. The stock reacted well, but not THAT well.
Murakami-San had indeed lifted his stake, and the stock is now climbing again. Presumably, the company is in the market buying. At this price, it depends on what Murakami-san does.
Fat div. Lots of volume to buy in the next several months, but the big story is future measures.

Even in Japan, Significant Growth Potential for Seven Eleven and Other CVS

By Michael Causton

Seven Eleven’s future usually gets outlined as: Japan ex-growth and only growth is overseas. This is wrong. While the CVS sector is saturated, Seven Eleven itself has not reached saturation.
There are major areas of growth, both territorially and new offshoot businesses. Seven is already 32% more efficient than Lawson but more to come.
Here we take a deep dive into the state of CVS retailing in Japan and how Seven Eleven does, and will, fit into this – and how it will grow.

Kadokawa (9468 JP): Take Profits as a Sony Privatisation Rumours Surface

Kadokawa Dwango (9468 JP) shares rose 16% after Reuters reported that Sony Corp (6758 JP) is in talks to acquire it. Kadokawa confirmed an initial letter of intent.
The privatisation interest is unsurprising as Kadokawa’s publishing arm, acclaimed intellectual properties, and positioning in the anime industry would be attractive to Sony.
The upside is limited as the last close reflects a significant takeover premium. There is a risk if a binding proposal emerges, it could be takeunder like Bain/T-Gaia.

FineToday Pre-IPO – The Positives – Established Brands Across Multiple Regions

By Sumeet Singh

CVC Capital is aiming to raise over US$500m, via selling some of its stake in FineToday Holdings Co Ltd (289A JP) in Japan.
FineToday (FT) is a beauty and personal care company in Asia offering a range of products, including hair care, skin care and body care products.
In this note, we talk about the positive aspects of the deal.

Honda Faces Profit Crunch: Rising Costs vs. Ambitious EV Plans! – Major Drivers

By Shifara Samsudeen, ACMA, CGMA

Honda Motor Co., Ltd.’s financial results for the first quarter of the fiscal year 2025 offer a complex picture of both achievements and challenges.
The company reported its highest-ever quarterly operating profit of JPY 484.7 billion, marking a significant year-on-year increase by JPY 90.2 billion.
This improvement was largely driven by increased unit sales in the motorcycle business in India and Brazil, as well as robust sales of hybrid automobile models in Japan and the United States.

2025 High Conviction: Freee KK – Becoming Free From Losses; Significant Upside

Freee KK (4478 JP) offers cloud-based online accounting and HR/Payroll software to small and medium businesses (SMBs) in Japan. The company operates a subscription-based revenue model.
Freee reported its first-ever profits recently and we expect continued improvement in freee’s profitability driven by its strong business model vs MF whose business model has started to breakdown.
Freee’s current valuation multiples are cheap and there is significant upside to the current share price, hence we recommend making an entry.

Japan Post Holdings – Guidance Continues to Underwhelm

By Rikki Malik

H1 Results improved but did not raise guidance for the FY
Insurance subsidiary surprised with a buyback of shares after strong results
Bank subsidiary profits improved as expected as interest rates increase

Daido Steel Co., Ltd (5471 JP) Research Update

By Nippon Investment Bespoke Research UK

FY24 GUIDANCE WAS REVISED.
POST FY24 GROWTH SCENARIO REMAIN UNCHANGED.

Eisai Co Ltd (4523 JP): Mixed H1FY25 Performance; Guidance Reaffirmed; Leqembi Struggle Continues

By Tina Banerjee

During H1FY25, Eisai Co Ltd (4523 JP) reported 3% YoY growth in revenue, driven by mainstay drugs. However, operating profit declined 11% YoY and net profit decreased 6% YoY.
Although Eisai kept its FY25 total revenue guidance unchanged, it has reduced Leqembi FY25 revenue guidance by ¥14B to ¥42.5B due to lower revenue expectation from Americas.
Leqembi is expected to be approved in Europe for a narrower set of patients. Next year, the drug will face competition in the U.S.

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Nov 21

Daily Brief Australia: Amaero International Ltd, Empire Energy and more

By Smartkarma Daily Briefs | Australia, Daily Briefs

In today’s briefing:

ADDMAN Group highlights importance of 3DA partnership
Empire Energy Group Ltd – …and we’re off! Carpentaria-5H has spudded
Empire Energy Group RaaS Interview Transcript 18 November 2024

ADDMAN Group highlights importance of 3DA partnership

RaaS Research has published a flash comment on advanced materials manufacturing group Amaero International (ASX:3DA) following comments from ADDMAN Group President and CEO Joe Calmese at an Additive and Advanced Manufacturing Symposium held earlier this week.
Mr. Calmese publicly called out the importance of ADDMAN Group’s partnership with Amaero in strengthening US supply chains for advanced alloys.
Mr. Calmese highlighted that their collaboration addressed critical gaps in the supply chain by reshoring scalable production of C103 and other specialty alloy powders and that this was important for ensuring the availability of critical materials for national security applications including hypersonic and defence application.

Empire Energy Group Ltd – …and we’re off! Carpentaria-5H has spudded

RaaS Research Group has published an update report on NT-focused gas explorer/producer Empire Energy Group (ASX:EEG) following the recent announcements that it has secured regulatory approvals for its Environmental Management Plan and Carpentaria-5H has spudded with drilling.
With the commencement of drilling, our confidence in the timing to first gas production is rising.
The company is targeting a drill-stimulate-test (IP30) result by around end Q1 CY25 which should maintain the timeline to first gas in H2 2025.

Empire Energy Group RaaS Interview Transcript 18 November 2024

RaaS interviewed Empire Energy Group’s Managing Director Alex Underwood post the announcements that the NT Government had approved the company’s Environmental Management Plan and that drilling had commenced at Carpentaria-5H.
This is a full transcript.

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Nov 21

Daily Brief Singapore: BuzzAR, SGX Rubber Future TSR20 and more

By Smartkarma Daily Briefs | Daily Briefs, Singapore

In today’s briefing:

BuzzAR lands US$1.16M in funding to boost Saudi tourism with AI-driven travel companion | e27
Ivory Coast Lists Four Point Strategy To Place Its Rubber Globally

BuzzAR lands US$1.16M in funding to boost Saudi tourism with AI-driven travel companion | e27

By e27

Singapore-based mixed reality and AI company BuzzAR has secured US$1.16 million in funding from the HSBC New Economy Fund.
The firm is using the money raised to expand its presence in the Middle East and North Africa (MENA) region, particularly Saudi Arabia, where it has partnered with the tourism department.
Founded in 2018 by Bell Beh and Ken Lim, BuzzAR specialises in experiential engagements that bridge the gap between offline and online spaces for its clients.

Ivory Coast Lists Four Point Strategy To Place Its Rubber Globally

By Farah Miller

Rubber Meet spots Risk Center, EUDR, industry academy as priorities
RAOT delegation holds talks with APROMAC top brass
Ivory Coast cup lump exports ban to stay, says APROMAC official

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Nov 21

Daily Brief United States: Berry Global Group, Apollo Global Management , Tesla , NVIDIA Corp, Qualcomm Inc, Expedia Group, Inc., Dynatrace , Epam Systems, Insulet Corp, Cloudflare and more

By Smartkarma Daily Briefs | Daily Briefs, United States

In today’s briefing:

Amcor Ltd/Berry Global: Packing Them In
Quiddity Leaderboard S&P 500 Dec 24: APP, APO, and TPL May Be ADDs, Watch SP600 DELs
Tesla’s Big Bet: Why Trump’s Autonomous Push Could Supercharge Their Future!
Nvidia: Maybe a Few Short-Term Concerns but Blackwell Looks like a Step Function Upwards
Qualcomm Investor Day: Based on Management Forecasts, Best Case 13% Operating Profit Cagr to FY29
Expedia Group Inc.: These Are The 7 Biggest Factors Impacting Its Performance In 2025 &Beyond! – Major Drivers
Dynatrace Inc.: How Strategic Investments Are Securing Its Competitive Edge & Future Revenues – Major Drivers
EPAM Systems Inc.: An Analysis Of Its Global Expansion & Diverse Delivery Locations & Other Major Drivers
Insulet Corporation: Its Efforts Towards Continued Sensor Integration & Improvements & Other Major Drivers
Cloudflare Inc.: An Insight Into Its Product Diversification & Innovation & Other Major Drivers

Amcor Ltd/Berry Global: Packing Them In

By David Blennerhassett

Packing giants Amcor Limited (AMCR US/AMC AU) and Berry Global Group (BERY US) announced they will combine in an all-stock transaction, with a ~63%/37% ownership split (respectively) in the MergeCo.
Amcor will issue 7.25 Amcor shares for each Berry share, for a US$73.59/share implied price. US$650mn of benefits from identified cost, growth and financial synergies by end of third year.
Closing, subject to shareholder and reg approvals, is targeted in the middle of 2025. The transaction has been unanimously approved by the boards of both Amcor and Berry.

Quiddity Leaderboard S&P 500 Dec 24: APP, APO, and TPL May Be ADDs, Watch SP600 DELs

The S&P 500 index tracks the 500 largest names listed in the US and it is one of the most highly-tracked indices in the world.
In this insight, we take a look at the upcoming constituent changes in the run up to the December 2024 index rebal event.
We expect two regular changes in December 2024. There are also several live spin-off and M&A events which could trigger intra-review index changes in late-2024/early-2025.

Tesla’s Big Bet: Why Trump’s Autonomous Push Could Supercharge Their Future!

During Tesla’s third quarter of 2024 financial report, several key points emerged that provide an overview of the company’s performance and strategic direction.
One of the prominent highlights was Tesla’s achievement of record deliveries in a market experiencing overall industry declines.
This emphasizes Tesla’s ability to navigate a challenging automotive landscape, an important consideration for investors assessing the company’s resilience and market positioning.

Nvidia: Maybe a Few Short-Term Concerns but Blackwell Looks like a Step Function Upwards

3Q25 (Oct-25) 5% above Consensus, Hopper growing incl H200, no Blackwell revenue. 4Q25 (Jan-25) guidance inline with Consensus but Nvidia has beat guidance for 8 quarters.
Jan-25: Blackwell revenue “several billion dollars”. Supply keeps to increase but supply constraints. GM will moderate to low-70% during Blackwell ramp due but will stabilize at mid-70%.
The stock is not expensive, trading at its average multiples since 2019: 51x trailing EPS, 34x forward EPS. These multiples are high in an absolute sense, but average for NVDA.

Qualcomm Investor Day: Based on Management Forecasts, Best Case 13% Operating Profit Cagr to FY29

QCOM estimates ~5% Android revenues growth Cagr to FY29, Automotive 22%, IoT 21%. If QCOM keeps Apple business, revenue Cagr will be 9% to FY29. If QCOM loses it: 6%.
Mngt forecasts high Opex control, target at 22% of revenue, which looks aggressive. Opex reached 31% in FY23-24 . At 22% Opex, Operating Profit would grow ~13% Cagr to FY29.
Android growth looks low, Opex control demanding. As such, we could conclude that 10% Operating Profit Cagr is more likely than 13%. Even with lower growth, the stock is cheap.

Expedia Group Inc.: These Are The 7 Biggest Factors Impacting Its Performance In 2025 &Beyond! – Major Drivers

During the third quarter of 2024, Expedia Group demonstrated several positive financial performance indicators and business dynamics, alongside addressing some challenges.
Overall, the company exceeded expectations regarding gross bookings and earnings, although revenue met projections amidst challenges posed by weather and currency fluctuations.
Noteworthy was the accelerated growth in gross bookings in its consumer segment for the second consecutive quarter, buoyed by strong performance from Brand Expedia, Vrbo’s return to growth, and favorable outcomes from international sales.

Dynatrace Inc.: How Strategic Investments Are Securing Its Competitive Edge & Future Revenues – Major Drivers

Dynatrace reported a strong performance in its second quarter of fiscal 2025, showcasing solid financial results and effective execution of its strategic initiatives.
The company posted an annual recurring revenue (ARR) increase of 19% year-over-year to $1.62 billion, propelled by robust expansion bookings, especially in Europe, and an improvement in booking seasonality related to a switch to 6-month sales compensation cycles.
Subscription revenues grew by 20% year-over-year, further supporting the company’s financial momentum.

EPAM Systems Inc.: An Analysis Of Its Global Expansion & Diverse Delivery Locations & Other Major Drivers

EPAM Systems, Inc., a global leader in software development and digital platform engineering services, reported its third-quarter 2024 results, which were stronger than analysts anticipated.
The company demonstrated revenue growth on both a year-over-year and sequential basis, signaling potential stabilization in the market.
This growth was primarily fueled by increased customer engagement across various verticals, notably in life sciences and healthcare, financial services, software, and biotech.

Insulet Corporation: Its Efforts Towards Continued Sensor Integration & Improvements & Other Major Drivers

Insulet Corporation’s latest quarterly earnings call presents a mix of positive and cautious sentiment towards the company’s recent performance and future outlook.
The company reported strong financial results with a significant revenue milestone, indicating healthy business momentum.
Insulet’s total revenue growth for the third quarter was reported at 25%, driven primarily by a 26% increase in total Omnipod revenues.

Cloudflare Inc.: An Insight Into Its Product Diversification & Innovation & Other Major Drivers

Cloudflare’s Q3 2024 financial results reflect a mixed performance characterized by areas of significant growth as well as certain challenges that require attention.
During the quarter, Cloudflare achieved a revenue of $430.1 million, representing a 28% year-over-year increase.
This was driven by strategic customer acquisition, notably the record addition of 219 large customers, many paying over $100,000 annually.

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Nov 21

Daily Brief India: Zomato, Enviro Infra Engineers, Blackbuck and more

By Smartkarma Daily Briefs | Daily Briefs, India

In today’s briefing:

NIFTY200 Momentum30 Index Rebalance Preview: More Changes with New F&O Stocks
Enviro Infra Engineers Limited IPO Analysis
Zinka Logistics IPO Trading – Subdued Demand; Lags Recent Listings

NIFTY200 Momentum30 Index Rebalance Preview: More Changes with New F&O Stocks

By Brian Freitas

There could be 17 changes for the Nifty200 Momentum 30 Index that will be implemented at the close on 30 December. Some changes from earlier following 45 new F&O stocks.
If all changes are on expected lines, one-way turnover is estimated at 61.5% and that will result in a one-way trade of INR 63.4bn (US$752m).
The potential inclusions to the index have outperformed the potential deletions since the start of June. This trend could continue for a couple of weeks till the changes are announced.

Enviro Infra Engineers Limited IPO Analysis

By Nimish Maheshwari

The company is in the business of designing, construction, operation and maintenance of water and wastewater treatment plants and supply schemes with all related services.
It has an order book worth Rs. 1906+ cr. as of June 30, 2024 and 750Cr+ of operation & maintenance order book in their hand.
Company has in-house capability to build and design water plants which enhance the margins of the company vs its peers.

Zinka Logistics IPO Trading – Subdued Demand; Lags Recent Listings

By Akshat Shah

Blackbuck (1355652D IN) raised about US$130m in its India IPO.
Zinka Logistics (Blackbuck) is India’s largest digital platform for truck operators (in terms of number of users), with 963,345 truck operators transacting on its platform in FY24, as per Redseer.
We have looked at the company’s past performance and valuations in our earlier notes. In this note, we talk about the trading dynamics.

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Nov 21

Most Read: Shinko Electric Industries, Seven & I Holdings, Synnex Technology International, Kuaishou Technology, Integrated Design & Engineering Holdings, Berry Global Group, Exedy Corp, Kadokawa Dwango and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

Shinko Electric (6967 JP) Takeover – THIS Is a Dip to Buy
7&I (3382) Ito Family MBO – New Urgency for ACT
TIP Taiwan Value High Dividend Index Rebalance: A Lot to Trade This Week
Seven & I Holdings (3382 JP): Evaluating the Potential MBO
Hang Seng Index (HSI) Rebalance Preview: Inclusion Candidates for December
I D & E Holdings (9161 JP) Gets a TOB Offer from Tokio Marine at +63% (¥6,500) – Probably Done
Amcor Ltd/Berry Global: Packing Them In
[JAPAN ACTIVISM] Exedy (7278) – Immediate Results Reaction Was a Damp Squib, But Climbing Now
Kadokawa (9468 JP): Take Profits as a Sony Privatisation Rumours Surface
Even in Japan, Significant Growth Potential for Seven Eleven and Other CVS

Shinko Electric (6967 JP) Takeover – THIS Is a Dip to Buy

Over the last few days, Shinko Electric Industries (6967 JP) shares have dipped lower than the previous standard trading range.
I expect this weakness is related to investors in other deals deciding to sell this deal too. I believe it is not related to Shinko specifically.
For that, while gap risk remains somewhat high, I still see break risk as low and see this as a great opportunity to buy the dip.

7&I (3382) Ito Family MBO – New Urgency for ACT

Days ago we got a dramatic headline about Ito family scion ITO Junro and his family company Ito Kogyo making a bid for Seven & I Holdings (3382 JP).
The stock popped, then fell. Details were not clear. Was the ¥9trln an EV number? A market cap? Was he serious? How would he get funding. Skepticism was rife.
Today we get more headlines from NHK. who says the family wants to raise ¥8trln to take 7&i private by end-Feb 2025.

TIP Taiwan Value High Dividend Index Rebalance: A Lot to Trade This Week

By Brian Freitas

There are 15 changes for the TIP Taiwan Value High Dividend Index in November. The Yuanta Taiwan Value High Dividend ETF (00940 TT) has an AUM of US$5bn.
Estimated one-way turnover is 26% and there are 16 stocks with over 4 days of ADV left to trade. The rebalance commenced yesterday and will end on Friday.
An equal weighted basket of inclusions has outperformed an equal weighted basket of deletions since July. That could continue over the week as the ETF continues to rebalance their portfolio.

Seven & I Holdings (3382 JP): Evaluating the Potential MBO

Seven & I Holdings (3382 JP) did not dispute the NHK article’s claims that the founding family aims to raise buyout funds by the end of the fiscal year.
Since 13 November, there have been conflicting press reports on the MBO offer price. The NHK article’s implied offer price of JPY3,082 seems the most credible.
The MBO’s aggressive completion timeline pressures Alimentation Couche-Tard (ATD CN) to respond by either overbidding, working with the founding family at the back-end or walking away.

Hang Seng Index (HSI) Rebalance Preview: Inclusion Candidates for December

By Brian Freitas

Post market close on Friday, Hang Seng Indexes will announce the changes for the Hang Seng Index (HSI INDEX) that will be implemented at the close on 6 December.
With no increase in the number of index constituents this calendar year, there could be inclusions in December. The process of getting to 100 index constituents could drag into 2026.
Short interest is especially large in Sinotruk, Giant Biogene, Kuaishou Technology, ASMPT and JD Logistics and inclusion could set off some short covering.

I D & E Holdings (9161 JP) Gets a TOB Offer from Tokio Marine at +63% (¥6,500) – Probably Done

In 2023, Integrated Design & Engineering Holdings (9161 JP) was created as a technical listing, succeeding Nippon Koei (1954 JP). It has been listed for decades.
On Tuesday 19 November, Tokio Marine Holdings (8766 JP) announced an agreed/supported deal to buy out Integrated Design & Engineering Holdings (9161 JP). The register is open. Should be easy.
It’s a nice high price for a boring stock, but it is cheap. They are NOT overpaying, but I don’t see who would want to run interference on this.

Amcor Ltd/Berry Global: Packing Them In

By David Blennerhassett

Packing giants Amcor Limited (AMCR US/AMC AU) and Berry Global Group (BERY US) announced they will combine in an all-stock transaction, with a ~63%/37% ownership split (respectively) in the MergeCo.
Amcor will issue 7.25 Amcor shares for each Berry share, for a US$73.59/share implied price. US$650mn of benefits from identified cost, growth and financial synergies by end of third year.
Closing, subject to shareholder and reg approvals, is targeted in the middle of 2025. The transaction has been unanimously approved by the boards of both Amcor and Berry.

[JAPAN ACTIVISM] Exedy (7278) – Immediate Results Reaction Was a Damp Squib, But Climbing Now

I wrote last when Exedy was at ¥3,900 and had just announced, good earnings, a sharp div hike, and a huge buyback. The stock reacted well, but not THAT well.
Murakami-San had indeed lifted his stake, and the stock is now climbing again. Presumably, the company is in the market buying. At this price, it depends on what Murakami-san does.
Fat div. Lots of volume to buy in the next several months, but the big story is future measures.

Kadokawa (9468 JP): Take Profits as a Sony Privatisation Rumours Surface

Kadokawa Dwango (9468 JP) shares rose 16% after Reuters reported that Sony Corp (6758 JP) is in talks to acquire it. Kadokawa confirmed an initial letter of intent.
The privatisation interest is unsurprising as Kadokawa’s publishing arm, acclaimed intellectual properties, and positioning in the anime industry would be attractive to Sony.
The upside is limited as the last close reflects a significant takeover premium. There is a risk if a binding proposal emerges, it could be takeunder like Bain/T-Gaia.

Even in Japan, Significant Growth Potential for Seven Eleven and Other CVS

By Michael Causton

Seven Eleven’s future usually gets outlined as: Japan ex-growth and only growth is overseas. This is wrong. While the CVS sector is saturated, Seven Eleven itself has not reached saturation.
There are major areas of growth, both territorially and new offshoot businesses. Seven is already 32% more efficient than Lawson but more to come.
Here we take a deep dive into the state of CVS retailing in Japan and how Seven Eleven does, and will, fit into this – and how it will grow.

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Nov 21

Daily Brief TMT/Internet: Tencent, NVIDIA Corp, Kuaishou Technology, Qualcomm Inc, Freee KK, NetEase Inc, Xiaomi Corp, Dynatrace , Epam Systems, Datadog and more

By Smartkarma Daily Briefs | Daily Briefs, TMT/Internet

In today’s briefing:

Quiddity Leaderboard HSIII: ~US$160mn One-Way Flows in Dec 24; 3 ADDs/DELs in Mar 25 Likely
Nvidia: Maybe a Few Short-Term Concerns but Blackwell Looks like a Step Function Upwards
KS / Kuaishou (1024 HK): 3Q24, Ad and E-Commerce Strong, Margins Improved
Qualcomm Investor Day: Based on Management Forecasts, Best Case 13% Operating Profit Cagr to FY29
2025 High Conviction: Freee KK – Becoming Free From Losses; Significant Upside
[NetEase, Inc. (NTES US, BUY, TP US$118) TP Change]: Growth Rebounds Ahead from Both PC and Mobile
Lucror Analytics – Morning Views Asia
Dynatrace Inc.: How Strategic Investments Are Securing Its Competitive Edge & Future Revenues – Major Drivers
EPAM Systems Inc.: An Analysis Of Its Global Expansion & Diverse Delivery Locations & Other Major Drivers
Datadog Inc.: Sales Capacity & Strategic Market Penetration Driving Our ‘Outperform’ Rating! – Major Drivers

Quiddity Leaderboard HSIII: ~US$160mn One-Way Flows in Dec 24; 3 ADDs/DELs in Mar 25 Likely

By Janaghan Jeyakumar, CFA

The Hang Seng Internet & IT (HSIII) index represents the top 30 stocks related to internet and information technology businesses listed in Hong Kong (HKEX).
The indicative weights for the December 2024 index rebal event will be announced later this week on Friday 22nd November 2024.
In this insight, we take a look at our updated flow estimates for December 2024. Separately, we have also presented our latest March 2025 index review predictions.

Nvidia: Maybe a Few Short-Term Concerns but Blackwell Looks like a Step Function Upwards

3Q25 (Oct-25) 5% above Consensus, Hopper growing incl H200, no Blackwell revenue. 4Q25 (Jan-25) guidance inline with Consensus but Nvidia has beat guidance for 8 quarters.
Jan-25: Blackwell revenue “several billion dollars”. Supply keeps to increase but supply constraints. GM will moderate to low-70% during Blackwell ramp due but will stabilize at mid-70%.
The stock is not expensive, trading at its average multiples since 2019: 51x trailing EPS, 34x forward EPS. These multiples are high in an absolute sense, but average for NVDA.

KS / Kuaishou (1024 HK): 3Q24, Ad and E-Commerce Strong, Margins Improved

By Ming Lu

Both online marketing and “other revenues” grew strongly in 3Q24.
Both the gross margin and the operating margin improved over the same period last year.
We believe total revenue will accelerate when live streaming is not significant and margins will rise when e-commerce makes profit.

Qualcomm Investor Day: Based on Management Forecasts, Best Case 13% Operating Profit Cagr to FY29

By Shifara Samsudeen, ACMA, CGMA

QCOM estimates ~5% Android revenues growth Cagr to FY29, Automotive 22%, IoT 21%. If QCOM keeps Apple business, revenue Cagr will be 9% to FY29. If QCOM loses it: 6%.
Mngt forecasts high Opex control, target at 22% of revenue, which looks aggressive. Opex reached 31% in FY23-24 . At 22% Opex, Operating Profit would grow ~13% Cagr to FY29.
Android growth looks low, Opex control demanding. As such, we could conclude that 10% Operating Profit Cagr is more likely than 13%. Even with lower growth, the stock is cheap.

2025 High Conviction: Freee KK – Becoming Free From Losses; Significant Upside

Freee KK (4478 JP) offers cloud-based online accounting and HR/Payroll software to small and medium businesses (SMBs) in Japan. The company operates a subscription-based revenue model.
Freee reported its first-ever profits recently and we expect continued improvement in freee’s profitability driven by its strong business model vs MF whose business model has started to breakdown.
Freee’s current valuation multiples are cheap and there is significant upside to the current share price, hence we recommend making an entry.

[NetEase, Inc. (NTES US, BUY, TP US$118) TP Change]: Growth Rebounds Ahead from Both PC and Mobile

By Ying Pan

NetEase reported C3Q24 revenue, GAAP operating profit and GAAP net income in line, (3.6%) and (5.3%) vs. our estimates, and in line, (4.4%) and (5.0%) vs. consensus.
Mobile game revenue decline is less a concern due to imminent pipeline launches, but PC game’s significantly beat is a positive surprise.
We raised the TP to US$118 for the better outlook of new game launches.

Lucror Analytics – Morning Views Asia

By Leonard Law, CFA

In today’s Morning Views publication we comment on developments of the following high yield issuers: Health and Happiness (H&H), Yinson Production, Xiaomi Corp, ReNew Energy
In the US, October housing starts declined 3.1% m-o-m to an annualised 1.31 mn units (-1.5% e / -1.9% revised p), the slowest pace in three months as builders put off projects in the wake of hurricanes Helene and Milton.
Meanwhile, October building permits (a proxy for future construction) eased 0.6% m-o-m to an annualised 1.42 mn units.

Dynatrace Inc.: How Strategic Investments Are Securing Its Competitive Edge & Future Revenues – Major Drivers

Dynatrace reported a strong performance in its second quarter of fiscal 2025, showcasing solid financial results and effective execution of its strategic initiatives.
The company posted an annual recurring revenue (ARR) increase of 19% year-over-year to $1.62 billion, propelled by robust expansion bookings, especially in Europe, and an improvement in booking seasonality related to a switch to 6-month sales compensation cycles.
Subscription revenues grew by 20% year-over-year, further supporting the company’s financial momentum.

EPAM Systems Inc.: An Analysis Of Its Global Expansion & Diverse Delivery Locations & Other Major Drivers

EPAM Systems, Inc., a global leader in software development and digital platform engineering services, reported its third-quarter 2024 results, which were stronger than analysts anticipated.
The company demonstrated revenue growth on both a year-over-year and sequential basis, signaling potential stabilization in the market.
This growth was primarily fueled by increased customer engagement across various verticals, notably in life sciences and healthcare, financial services, software, and biotech.

Datadog Inc.: Sales Capacity & Strategic Market Penetration Driving Our ‘Outperform’ Rating! – Major Drivers

Datadog’s third quarter 2024 financial results indicate continued growth and expansion in their operations, though there are a mix of positive and challenging elements to consider.
Revenue for the quarter was $690 million, representing a 26% increase year-over-year and surpassing the high end of the company’s guidance.
The company added about 2,400 customers over the past year, reaching a total of approximately 29,200.

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Nov 21

Daily Brief Financials: Apollo Global Management , Pantheon Infrastructure PLC, Japan Post Holdings, Trinity Bank NA, Block , Custodian REIT, Clip Money and more

By Smartkarma Daily Briefs | Daily Briefs, Financials

In today’s briefing:

Quiddity Leaderboard S&P 500 Dec 24: APP, APO, and TPL May Be ADDs, Watch SP600 DELs
Pantheon Infrastructure Plc (PINT.L) – Wednesday, Aug 21, 2024
Japan Post Holdings – Guidance Continues to Underwhelm
The Holy Trinity of Banking
Block Inc.: Will Its Integration of Bitcoin Strategy Be A Breakthrough Move? – Major Drivers
Hardman & Co Investor Forum Research on Custodian Property Income REIT (CREI): Good momentum
Clip Money is a rapidly growing NCR-backed start-up based in Ottawa

Quiddity Leaderboard S&P 500 Dec 24: APP, APO, and TPL May Be ADDs, Watch SP600 DELs

The S&P 500 index tracks the 500 largest names listed in the US and it is one of the most highly-tracked indices in the world.
In this insight, we take a look at the upcoming constituent changes in the run up to the December 2024 index rebal event.
We expect two regular changes in December 2024. There are also several live spin-off and M&A events which could trigger intra-review index changes in late-2024/early-2025.

Pantheon Infrastructure Plc (PINT.L) – Wednesday, Aug 21, 2024

By Value Investors Club

Pantheon Infrastructure PLC (PINT) is a closed-ended investment company offering investors access to a diverse portfolio of global infrastructure assets
Focus on providing progressive dividend and potential for NAV organic total return of 8-10%
Aiming to reduce discount to NAV, capitalize on potential improvement in NAV valuation, and offer attractive IRR with potential for best-case scenario of 30% by end of FY2026

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

Japan Post Holdings – Guidance Continues to Underwhelm

By Rikki Malik

H1 Results improved but did not raise guidance for the FY
Insurance subsidiary surprised with a buyback of shares after strong results
Bank subsidiary profits improved as expected as interest rates increase

The Holy Trinity of Banking

By The Mikro Kap

This write-up is not something you would normally (or ever) expect from me.
It’s about a bank. To be more specific, it is about a one-branch community bank out of Fort Worth, Texas.
Despite sounding unimpressive at first, probably enticing you to stop reading the article immediately, this bank has managed to outperform both the SPY and every other bank ETF that you can think of since going public in late 2003.

Block Inc.: Will Its Integration of Bitcoin Strategy Be A Breakthrough Move? – Major Drivers

Block, the parent company of brands like Square and Cash App, has reported its third-quarter financial results for 2024, revealing a noteworthy performance with both achievements and challenges.
This analysis provides a balanced examination of the outcomes and outlook for the company, incorporating insights from their latest earnings call.
Block’s third-quarter results exhibited robust growth, with a significant increase in gross profit, reaching $2.25 billion, up 19% compared to the previous year.

Hardman & Co Investor Forum Research on Custodian Property Income REIT (CREI): Good momentum

By Hardman & Co

The structure and investment remit of the real estate investment trust (REIT) have been proven to be resilient and position it strongly for the short- and medium-term future.
The investment return emphasis is on income, which is generated from a diverse portfolio with modest capital gearing.
Because Custodian Property Income REIT (CREI) is designed to focus on smaller, individual property lot sizes, it acquires at higher asset yields than the market in general.

Clip Money is a rapidly growing NCR-backed start-up based in Ottawa

Clip Money is a rapidly growing NCR-backed start-up based in Ottawa, Canada, and operating in Canada and the US.
It is helping physical stores and businesses quickly, safely, and less expensively deposit cash into their bank accounts, as well as replenishing notes and coins for store operations.
The company uses its proprietary software platform to facilitate cash management, and its network is made up of a network of DropBoxes and NCR ATMs located in retail outlets.

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Nov 21

Daily Brief Health Care: Innovent Biologics Inc, Grifols SA, Mettler Toledo International Inc, Insulet Corp, Moderna , Viatris, Eisai Co Ltd, Rani Therapeutics Holdings , SBC Medical Group Holdings , Cadrenal Therapeutics and more

By Smartkarma Daily Briefs | Daily Briefs, Healthcare

In today’s briefing:

Quiddity Leaderboard Hang Seng Biotech Dec 24: Positive Flows for Beigene and Innovent Biologics
Lowball Non-Binding Indication from Brookfield
Mettler-Toledo International Inc.: Reinvents Global Manufacturing: How Diversification Powers Resilience & Growth – Major Drivers
Insulet Corporation: Its Efforts Towards Continued Sensor Integration & Improvements & Other Major Drivers
Moderna Inc.: Expanding Global Presence For Unmatched Impact! – Major Drivers
Viatris Inc.: Expansion of Innovative Portfolio As A Vital Factor Driving Growth! – Major Drivers
Eisai Co Ltd (4523 JP): Mixed H1FY25 Performance; Guidance Reaffirmed; Leqembi Struggle Continues
RANI: Third Quarter Update
SBC: Agreement to Acquire Singapore’s AHH Furthers Emerging International Expansion
CVKD: Recent Financings Raise 9.8 Million

Quiddity Leaderboard Hang Seng Biotech Dec 24: Positive Flows for Beigene and Innovent Biologics

By Janaghan Jeyakumar, CFA

The HS HK-Listed Biotech Index (“Hang Seng Biotech Index”) represents the 50 largest biotech companies listed in Hong Kong (HKEX).
The official index changes and indicative weights for the December 2024 index rebal event will be announced on Friday 22nd November 2024.
In this insight, we take a look at our updated flow expectations.

Lowball Non-Binding Indication from Brookfield

By Jesus Rodriguez Aguilar

Rejected Offer: Grifols’ independent committee rejected Brookfield’s proposed valuation of €10.50 per Class A share €7.62 per Class B share, citing significant undervaluation of the company’s long-term prospects.
Stakeholder Dynamics: Brookfield seeks a statutory amendment to differentiate Class A and B share prices, while opposition from Brandes (13.5% of Class B shares) and Mason complicates negotiations.
Financial Recovery: Grifols achieved 12% revenue growth in Q3 2024, reduced net debt to €8.1 billion, and targets a 4.5x leverage ratio by year-end, supporting improved financial stability.

Mettler-Toledo International Inc.: Reinvents Global Manufacturing: How Diversification Powers Resilience & Growth – Major Drivers

Mettler-Toledo reported its third-quarter 2024 financial performance, demonstrating resilience in diverse segments despite challenging global economic conditions.
The company’s revenue was $954.5 million, showing a 1% increase both in local currency and in U.S. dollars.
While sales in Europe and Asia showed moderate growth, the Americas faced a slight decline, reflecting varied performance across regions.

Insulet Corporation: Its Efforts Towards Continued Sensor Integration & Improvements & Other Major Drivers

Insulet Corporation’s latest quarterly earnings call presents a mix of positive and cautious sentiment towards the company’s recent performance and future outlook.
The company reported strong financial results with a significant revenue milestone, indicating healthy business momentum.
Insulet’s total revenue growth for the third quarter was reported at 25%, driven primarily by a 26% increase in total Omnipod revenues.

Moderna Inc.: Expanding Global Presence For Unmatched Impact! – Major Drivers

Moderna, Inc. reported its financial results for the third quarter of 2024, highlighting key developments and challenges in its business operations.
The company delivered $1.9 billion in revenue, with a net income of $13 million, and ended the quarter with $9.2 billion in cash and investments.
This financial position underscores Moderna’s robust liquidity, providing it with a solid foundation to support ongoing and future initiatives.

Viatris Inc.: Expansion of Innovative Portfolio As A Vital Factor Driving Growth! – Major Drivers

Viatris’s Q3 2024 results showcased key elements both bolstering and challenging its financial position.
Notably, the company delivered significant revenue growth, with total revenues reaching $3.8 billion, a 3% increase on an operational basis.
Additionally, Viatris achieved its sixth consecutive quarter of growth in terms of adjusted EBITDA and adjusted earnings per share (EPS).

Eisai Co Ltd (4523 JP): Mixed H1FY25 Performance; Guidance Reaffirmed; Leqembi Struggle Continues

By Tina Banerjee

During H1FY25, Eisai Co Ltd (4523 JP) reported 3% YoY growth in revenue, driven by mainstay drugs. However, operating profit declined 11% YoY and net profit decreased 6% YoY.
Although Eisai kept its FY25 total revenue guidance unchanged, it has reduced Leqembi FY25 revenue guidance by ¥14B to ¥42.5B due to lower revenue expectation from Americas.
Leqembi is expected to be approved in Europe for a narrower set of patients. Next year, the drug will face competition in the U.S.

RANI: Third Quarter Update

Rani is a clinical-stage biotherapeutics company developing the ingestible robotic RaniPill (RP) that enables oral delivery of biologics & other large molecules.
Its pipeline features clinical assets RT-102 (teriparatide for osteoporosis) & RT-111 (ustekinumab for psoriasis).
Both programs have completed Ph1 trials characterizing safety tolerability & pharmaco-kinetics.

SBC: Agreement to Acquire Singapore’s AHH Furthers Emerging International Expansion

Singapore’s economy has expanded significantly over the past two decades.
GDP was above US$466 billion in 2022, according to the World Bank, which also notes that the “country provides one of the world’s most business-friendly regulatory environments for local entrepreneurs and is ranked among the world’s most competitive economies.” Moreover, reflecting its strategic location, economic growth & business friendly climate, Singapore attracts substantial amounts of U.S. foreign direct investment (FDI), factors that likely portend well for increasing demand for aesthetic services, in our view.

CVKD: Recent Financings Raise 9.8 Million

On November 7, 2024, Cadrenal Therapeutics, Inc. (CVKD) announced financial results for the third quarter of 2024 and provided a business update.
The company recently raised approximately $9.8 million, which included $5.1 million raised through its at-the-market (ATM) facility and $4.7 million through warrant exercises.
Cadrenal recently met with the FDA to discuss the protocol for the planned Phase 3 clinical trial of tecarfarin in left ventricular assist device (LVAD) patients and those discussions are continuing.

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Nov 21

Daily Brief Industrials: CM Hi-Tech Cleanroom, Enviro Infra Engineers, CiDi Inc, Rockwell Automation, Amaero International Ltd and more

By Smartkarma Daily Briefs | Daily Briefs, Industrials

In today’s briefing:

CM Hi-Tech (2115 HK): 12th December Shareholder Vote
Enviro Infra Engineers Limited IPO Analysis
CiDi IPO Valuation Analysis: High Valuation Is Warranted Due To Unicorn Status/Hyper Growth Profile
Rockwell Automation Inc.: These Are The 7 Biggest Factors Impacting Its Performance In 2025 &Beyond! – Major Drivers
ADDMAN Group highlights importance of 3DA partnership

CM Hi-Tech (2115 HK): 12th December Shareholder Vote

By David Blennerhassett

Back on the 14th October, cleanroom play CM Hi-Tech (2115 HK) announced a pre-conditional Offer by way of a Scheme from MayAir Technology (688376 CH) and CM Hi-Tech’s senior management.
The pre-conditional long stop for NDRC, Mofcom and SAFE was 60 days, which appeared highly optimistic. I was wrong, and the pre-cons were secured in a legendary 18 days.
The Scheme Doc is now out, with a Court Meeting to be held on the 12 December. Expected payment on the 15 January. The IFA says fair & reasonable.

Enviro Infra Engineers Limited IPO Analysis

By Nimish Maheshwari

The company is in the business of designing, construction, operation and maintenance of water and wastewater treatment plants and supply schemes with all related services.
It has an order book worth Rs. 1906+ cr. as of June 30, 2024 and 750Cr+ of operation & maintenance order book in their hand.
Company has in-house capability to build and design water plants which enhance the margins of the company vs its peers.

CiDi IPO Valuation Analysis: High Valuation Is Warranted Due To Unicorn Status/Hyper Growth Profile

By Andrei Zakharov

Changsha Intelligent Driving Institute, more commonly known as CiDi, filed for an IPO in Hong Kong. The company was valued at ~RMB9B in its last private funding round.
CiDi was backed by HongShan Capital, Xinding Capital, Founder Hesheng Investment, Legend Holdings, Baidu Venture, and Lens Technology, among others.
The terms of the IPO were not disclosed. CiDi is a category winner that is addressing a large TAM (~$10B by 2030) with room for hyper growth for years.

Rockwell Automation Inc.: These Are The 7 Biggest Factors Impacting Its Performance In 2025 &Beyond! – Major Drivers

Rockwell Automation’s fourth-quarter fiscal 2024 earnings call highlighted a mixed performance with several critical developments worth noting for investors.
The company faced headwinds with a continued softness in orders, down sequentially by low single digits, contrary to expectations for improvement.
However, Rockwell demonstrated some resilience by maintaining solid execution, especially in customer service and the profitable growth of its software and digital services, which helped offset channel inventory challenges.

ADDMAN Group highlights importance of 3DA partnership