Smartkarma Daily Briefs

• We expect Tencent to report C4Q23 revenue, IFRS op. profit and IFRS net income in line, (3.3%) and (4.9%) vs. consensus.
• The robust topline growth was mainly contributed by fast growing WeChat VA (Video Account) and strong performances of <Dream Star> in December.
• We cut our TP to HK$362 to reflect operating margin decline caused by increased sales and marketing. 

• Dell has outperformed Acer and other Taiwan PC names Asus and MSI by a wide margin. Close Long Dell vs. Short Acer. Dell’s value gap has dissipated.
• Latest indications from Dell and HP highlight that the AI PC’s will drive upgrades from customers, but the PC recovery remains soft. AI PC impact only in 2025E.
• Dell and HPQ’s recent results provide positive color for upcoming Asus, Acer, and MSI results. Trade: Long Asus into its upcoming earnings results.

• Comsys Holdings (1721 JP) is one of Japan’s three largest telecommunications construction companies.
• In FY03/23, sales were JPY563.3bn, operating profit was JPY32.1bn, recurring profit was JPY30.9bn, and net income attributable to owners of the parent was JPY19.3bn. Orders totaled JPY553.1bn.
• Comsys Holdings Corporation announced that it will change its representative directors, effective April 1, 2024.

abrdn UK Smaller Companies Growth Trust’s (AUSC’s) managers, Abby Glennie and Amanda Yeaman, are looking forward to further improvement in the trust’s relative performance, as investors’ focus is now more on company fundamentals rather than macroeconomic developments. The managers are continuing to use the Matrix, a proprietary screening tool, to search for companies exhibiting high-quality, growth and positive momentum features. Despite a difficult period of performance during 2022, when rising interest rates led to a derating of growth stocks, the strategy employed by abrdn’s small-cap team has proved very successful over the last 25+ years across multiple business cycles.

• Kolte Patil Developers (KPDL IN) reported a decent Q3FY24 led by record sales value and improved realization. It is on track to achieve its guided INR 2800cr sales value for FY24.
• Demand environment continues to be robust. Kolte Patil has guided for 25%+ sales value growth even for FY25. Realization also has room to improve and should aid the growth.
• New business development activity is strong. Kolte Patil is in advances stages of discussion for projects with sales value worth INR 8000-10000cr, INR 3000-4000cr of which could close soon.

• Nihon Chouzai (3341 JP) is an integrated healthcare company whose core business is the operation of dispensing pharmacies.
• In FY03/23, Nihon Chouzai reported sales of JPY313.3bn, operating profit of JPY7.6bn, recurring profit of JPY7.7bn, and net income attributable to owners of the parent of JPY4.5bn.
• Nihon Chouzai Co., Ltd. announced the retirement of treasury shares.

• We forecast €2.6bn Adjusted EBIT in 2024, below management guidance of €2.7bn, given concerns about margin management as capacity increases 12% yoy.
• Detailed analysis of the margin gaps and key drivers of gaps at each of Lufthansa’s airlines illustrates remedial work required with new perspective.
• Bringing each portfolio company towards the Group Adjusted EBIT margin target of >8% would represent the CEO’s finest achievement (apart from helping save the company through COVID).

CoinShares International (CS) avslutade sitt senaste räkenskapsår med justerad EBITDA för Q423 på 25,7 miljoner pund, vilket ökade vinsten för FY23 till 56,9 miljoner pund (det näst bästa resultatet i företagets historia). Bolaget inför nu en utdelningspolicy med målsättningen att utbetala 20–40 % av totalresultatet justerat för valutakursdifferenser. Vi beräknar att detta, baserat på resultatet för räkenskapsåret 2023 och nuvarande aktiekurs, innebär en god direktavkastning på ca 3,4–6,8 %. CS vill expandera till USA genom att utnyttja sin option att förvärva Valkyrie Funds (som har en bitcoin-ETF i USA i sitt erbjudande) och genom sin nyligen lanserade Hedge Fund Solutions-verksamhet.