In today’s briefing:
- TSMC (2330.TT; TSM.US): If Intel Was Split Up, What Impact Will It Have on the Foundry Industry?
- Kalbe Farma (KLBF IJ) – The End of a Long Transition
- Postcard from Patna | Breaking Sterotypes
- Nihon Kohden (6849 JP): Apart from Apple Smartwatch Ban, Three More Reasons to Buy Shares
- Delta Taiwan Vs. Thailand Monitor: Parent Could Sell More of Its Stake; Thai 50x PER Vs. Taiwan 20x
- A closer look at stock bond correlation
- Retail Media: A Major New Income Stream Even for Wholesalers
TSMC (2330.TT; TSM.US): If Intel Was Split Up, What Impact Will It Have on the Foundry Industry?
- We assume that Intel’s current business model is unable to fully meet the manufacturing needs in that case.
- As for the Intel Foundry Business, we believe that there is potential upside for growth.
- If Intel was doing great in Wafer Manufacturing Business, then why does it have to consider splitting up?
Kalbe Farma (KLBF IJ) – The End of a Long Transition
- Kalbe Farma (KLBF IJ) continued to experience a high post-COVID base effect in 3Q2023, with consumer habits shifting to leisure versus health plus there was a softening of consumer demand.
- The company also experienced higher raw material prices and higher operating expenses which depressed margins but expectations are for a recovery in margins in 4Q2023 and FY2024.
- Kalbe Farma stands out as Indonesia’s largest pharmaceutical company with strong exposure to consumer health and nutritional products with rising health consciousness amongst Indonesians. Valuations do not reflect impending recovery.
Postcard from Patna | Breaking Sterotypes
- We visited the core of the Hindi Hinterland, the “City of Patna,” the capital and largest city of Bihar, the country’s third most populous state.
- While the trip paints an opportunistic and optimistic picture of Bihar, the situation of unemployment is something that still warrants attention.
- Focus companies: Aditya Vision (AVL IN) , Eicher Motors (EIM IN) , Hero Motocorp (HMCL IN) and Fino Payments Bank Ltd (FINOPB IN).
Nihon Kohden (6849 JP): Apart from Apple Smartwatch Ban, Three More Reasons to Buy Shares
- On December 26, Nihon Kohden (6849 JP) shares jumped ~15% as the company was a beneficiary of the ban on Apple (AAPL US)’s latest smartwatch models.
- Nihon Kohden reported better-than-expected result in H1FY24. The company raised FY24 revenue forecast to ¥221.5B (+7% YoY) from ¥215.0B. The company has also raised FY24 operating and net profit guidance.
- Currently consensus expects 2% YoY revenue growth for the company in FY25. With strong demand for existing products and new launches, the expectation seems to be conservative.
Delta Taiwan Vs. Thailand Monitor: Parent Could Sell More of Its Stake; Thai 50x PER Vs. Taiwan 20x
- Delta Thailand vs. Taiwan valuation differential has returned to an historically extreme level.
- For 2024E & 2025E growth expectations continue to be similar for the two companies, yet Delta Thailand’s FY2024E PER is 50x while Delta Taiwan’s is 20x.
- We see substantial relative value in Delta Taiwan and expect likely reversion of relative valuation due to latest return to historically extreme mismatch.
A closer look at stock bond correlation
- For me, the most unexpected aspect of recent events has been that both bonds and stocks moved up together.
- My expectation for this year was that equities do well.
- But I thought they would eventually shake off bonds. Economic resilience (or in fact acceleration) would then force bond investors to chase equities.
Retail Media: A Major New Income Stream Even for Wholesalers
- Seven Eleven and Familymart have already sent panic through the offices of major advertising agencies by setting up their own retail media networks.
- Now, Mitsubishi Shokuhin will do the same, using its trading company connections and its existing ties to 10,000 clients at either end of the supply chain.
- To personalise ads, it is working with the data analysis of geolocation company Unerry.
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