Equity Bottom-Up

• We notice a pickup in consumer acceptance of instrashopping, as result of COVID-cultivated behavior. We notice similar business model worked outside of China (Coupang) for densely populated urban upper-middle-class customers;
• Meituan’s launch of membership is a wise step towards strengthening user stickiness and emphasizing transaction soundness over impulsive buying. Meituan’s portfolio in food, dining, hotel & travel offer unparalleled value;
• We see Meituan’s success in Hong Kong honed a replicable business model targeting single and low priced segment. Consolation on a global scale now seems a possibility.

• Alibaba Group Holding (BABA US)‘s FQ4 announcement portrays a resilient comeback to growth, suggesting the past four years’ challenges barely impacted its dominance in Chinese e-commerce.
• However, a closer look beyond the surface of Alibaba Group Holding (9988 HK)‘s FQ4 results announcement reveals that little has actually changed in recent months.
• Taobao and Tmall face challenges in a tough, stagnant market; AIDC’s growth largely covers for other Alibaba units’ failings, while AliExpress’s expansion cuts into margins.

• We compile our selection of small and mid-cap names with our desired characteristics of high dividend yields, value, and margin of safety.
• Our top picks are Perfect Medical Health (1830 HK), Water Oasis (1161 HK), Taste Gourmet (8371 HK), Uchi Technologies (UCHI MK), and Ginebra San Miguel (GSMI PM).
• After a massive recent correction for HK stocks, we are more constructive on the names, and yields there look very attractive.

• Alibaba reported in-line revenue but disappointed adjusted net income for 4QFY24.
• Yet a closer look shows strong core Taobao/Tmall performance was offset by higher-than-expected losses incurred by peripheral businesses.
• We remain convinced BABA is on track to turn around and an earnings upgrade cycle is one or two quarters away. We are buyer at this price.

• US tariff hike on Chinese electric vehicles, solar cells, and semiconductors could raise costs for clean energy industry in China, affecting competitiveness and growth.
• AT&S to sell medtech PCB factory in South Korea, indicating potential changes in the global supply chain.
• AI rush leading to staffing shortages at companies like Amazon and Google, while India sees surge in AI spending by 2027.

• The Cigniti-Coforge acquisition presents a unique investment opportunity in the IT services sector, with potential for significant returns.
• Coforge plans to acquire a 54% stake in Cigniti Technologies, expanding its presence in digital assurance and AI services.
• The deal is expected to be completed by Q2 of FY25, with an open offer price potentially higher than the current market value of Cigniti shares.

• UPL Ltd (UPLL IN)‘s Q4 FY23 results show a significant improvement in margins to 13% after a drastic fall to 1% in December 2023, despite a 15% YoY revenue decline.
• Revenue drops were driven by lower prices and high-cost inventory liquidation, yet margin recovery signals operational improvements and potential future stability.
• Planning to reduce the debt by raising capital via right issue as well as IPO of Advanta.

• The slowdown in Chinese retail sales of apparel seems to have been factored into Vipshop Holdings (VIPS US) 1Q 2024 revenue growth expectations whilst bottom-line is supported by margin expansion.
• With net cash at ~40% of its market cap, the share price should be supported by the ongoing share repurchase program and its inaugural annual dividend policy.
• Its 6.6x NTM PE ratio (~4x ex-cash) seems extremely attractive for a highly cash-generative business set to (conservatively) grow earnings at high-single-digits whilst buying back shares and paying dividends.

• Recruit Holdings (6098 JP) reported 4Q and full-year FY03/2024 results today. Earnings beat own guidance as well as consensus estimates.
• Weakening labour markets have negatively impacted all business segments and new pricing model for Indeed has not really been successful.
• Recruit expects a recovery in 2HFY03/2025, but at the rate at which job openings are going down, we remain cautious.

• Inventory levels were at 90 days by the end of 1Q24, returning to a normal level.   
• It is expected to see consecutive QoQ growth throughout 2024, with normal orders observed since 2Q24. 
• Although Chinese mature technology is advancing, current analog capacity still falls short of local demand in China.

• Customer management as the largest business began to increase compared to the past two stagnant quarters.
• We believe margin will continue to decline as the company turned its focus to growth.
• We conclude an upside of 41% for March 2025 based on peer companies’ P/S ratios.

• The operating margin in 1Q24 reached the highest since 2Q16, as the gross margins of all businesses improved.
• The growth rate of online advertising is high than our estimate, but the growth rate of FinTech is lower than our estimate.
• We believe there is still an upside of 9% and the price target will be HK$415 for the end of 2024.

• In a surprise move, Intel announced that its foundry chief Stuart Pann is to retire from the company effective end of May after just over one year in the role
• He will be replaced by former IBM, Globalfoundries and Marvell executive Kevin O’Buckley, effective immediately
• Mr. O’Buckley now has the dubious distinction of being the third leader of IFS in as many years. 

• Tencent (700 HK) reported 1Q2024 results today. Both revenues and OP grew 6.3% and 30.0% YoY respectively and beat consensus estimates.
• Though domestic games revenues declined YoY, there were signs of recovery in Tencent’s gaming business. Online advertising saw strong growth despite 1Q being a seasonally weak quarter for Tencent.
• Tencent’s investments in high-margin products have helped boost the company’s margins across all business segments.

• Cheerwin is a strong turnaround story with significant earnings growth in 2023 with solid dividend yield. It is the number one player in the inspect repellent sector in China. 
• Cheerwin’s current price is 79% lower than the IPO  price. However, Cheerwin’s shares are up 35% YTD, sharply outperforming Hang Seng index which is up 13.6% YTD.
• We found Cheerwin (6601 HK) using Smartkarma’s Smart Score Screener system. We used the following screening methodology: Market cap – More than $300 million Dividends = 5 only.

• Grab‘s focus last year was offering more affordable products, which helped to increase its addressable market. FY2024 will see the rollout of a broader range of initiatives across economic segments. 
• This year Grab is rolling out more premium offerings and new initiatives, including advance bookings, family accounts, increased reviews, and new merchant features to grow revenue streams from advertising.
• The upcoming results are likely to reflect seasonal factors but should also reveal something about Grab’s new initiatives and the changing competitive environment, with GoTo investing more aggressively. 

• BAF reported a decent Q4FY24 led by strong AUM growth and robust customer acquisition. Adjusted for the impact of the regulatory ban, Q4FY24 results were in line with the expectation.  
• The biggest negative surprise in Q4FY24 was the 21bp NIM compression. NIM compressed led by AUM composition shifting incrementally to secured assets. 
• BAF is optimistic on growth across segments, except Rural B2C where risk metrics are somewhat elevated; however this should normalize, given Rural B2B is doing fine.

• Back in June 2022, US/Europe toll-road play Atlas Arteria (ALX AU) (ATLIX) rejected IFM Global Infrastructure’s request for limited company information, before deciding whether to submit a non-binding indicative proposal. 
• Undeterred, IFM, which held 15% of shares out at the time, bumped its stake to 19% two months later; and has continued to capitalise on Australia’s creep provisions ever since. 
• This morning, IFM is understood to have lifted its stake to ~26.5%, in an apparent attempt to gain additional board representation. Another tilt cannot be ruled out. 

• Taiwan launches IC Taiwan Grand Challenge to attract innovative teams and talent, offering opportunities to showcase skills and win prizes.
• Navigating AI investments during upgrades: on-premise or cloud computing? Make informed choices for hardware and software advancements.
• Taiwan’s LEO satellite program readiness questioned; virtual power plants used in Taiwan and Japan to mitigate earthquake risks; TPCA partners with Taiwanese industry association to boost talent and supply chains for Thai electronics manufacturing growth; Intel appoints new head of foundry services.

• GHCL Textiles (GHCLTEXT IN)  Aiming 25-30% revenue growth along with 15-20% average margins significantly increase the profitability of the company.
• Entering into value-added products like Functional fabrics and setting up their own manufacturing plant for fabric.
• Management Guidance on yarn prices, capex and debt profile of the company.

• Cafe De Coral Holdings (341 HK) share price never really rebounded post COVID despite its operating numbers gradually improving. 
• Haidilao International Holding (6862 HK) share price has rallied along with the Hang Seng Index (HSI INDEX) and Hang Seng China Enterprises Index (HSCEI INDEX) but not Cafe de Coral.
• Recent profit alert that, excluding pandemic subsidies, the group’s net profit will rise 470% YoY. 

• April revenue ~NT$236.02 billion, +20.9% MoM & + 59.6% YoY
• It was the company’s second highest monthly revenue ever, made all the more remarkable by the fact that it occurred during its seasonally low first half year
• Our April YoY Taiwan monthly revenue comps are flashing green across the board with just one exception, Globalwafers

• Shiseido Company (4911 JP) reported 1Q24 results last Friday.  Core operating profit declined less than expected at -10% yoy, and exceeded the management’s target. 
• The beat was driven by robust growth in Japan, Americas, and EMEA, while China steadily recovered.  Overall sales growth was 4% yoy in the quarter. 
• As a reminder, the investment thesis for Shiseido is twofold:  a recovering China mainly due to one-off concerns (nuclear wastewater), and a margin recovery story in Japan. 

• The new energy vehicle producers’ ranks changed a lot in April.
• GAC began to sell batteries to outside new energy vehicle producers.
• Kuaishou’s GMV (Gross Merchandise Value) increased by 420% YoY during the Labor Day.

• Asus’s 1Q24 earnings beat consensus by 46% thanks to major increase in operating margin driven by costs optimization. Adjusted Asus brand Op profit rose 227% YoY and 98% QoQ.
• Asus will host a major AI PC launch event May 21st, with additional AI PCs launched at Computex in Taiwan June 4th. Will feature Qualcomm Inc (QCOM US) Snapdragon processors.
• Asus confident in an PC upgrade cycle and has guided for sales to rise and margins to expand in the coming quarters. We maintain our Structural Long rating for Asus.

• ASE plans to boost sales in the second half of 2024 with cutting-edge technology and innovative solutions. Introspect CEO discusses how their GDDR7 memory test system outperforms competitors, helping customers stay ahead of the curve.
• Taiwan’s space dreams face hurdles from regulations and geopolitics, hindering progress. N Chandrasekaran becomes chair of Tata Electronics, signaling entry into semiconductor industry. Indian GaN startup targets global expansion in telecom and EV markets for growth.
• Triton ignites Taiwan’s push for satellite self-sufficiency; Apple partnership speculation with a leading EV startup generates buzz. Lam Research seeks chipmaking tool partners in India to drive innovation and collaboration. #Apple #EVstartup #newsroundup

• FY Mar-24 results were ahead of guidance, but management’s FY Mar-25 forecast has sales flat and profits down in the second half.
• The shares have dropped back 24% from their all-time high, bringing the forward P/E ratio down to 22X.
• China and foundry remain strong while North America and memory pick up. Guidance is probably conservative. Buy into the weakness.

• Takeaways: Biden plans to quadruple US/EU tariffs on Chinese EV imports.
• This will further defend TSLA’s domestic beachhead: 1) 50% EV market share in the USA (No. 2: Ford 7% ) + 2) huge headstart over domestic auto incumbents in assembly line processes (Gigapress) & high manufacturing concentration .
• Together, this should result in superior economies of scale which translates into lower unit costs — increasingly important in a commoditizing US EV sector.

• UI reported fiscal third quarter (March) results in line with our revenue forecasts suggesting the business could be on the rebound after two years in a challenging environment
• The performance in the June quarter comes even though peers have been reporting a tough selling environment with extended sales process as customers took time to make their decision
• The increase in product availability did backfire in the quarter with Ubiquiti taking a charge for obsolete inventory. Nevertheless, Ubiquiti’s results show a business that is improving

• GoTo Gojek Tokopedia (GOTO IJ) booked an encouraging set of 1Q2024 results which provided a first look at the new structure, whereby suddenly e-commerce became cashflow positive for the company. 
• The company booked strong headline growth with core GMV increasing by +32% YoY, despite incentive & product spending decreasing by -31% YoY, whilst adjusted EBITDA losses fell -89% YoY. 
• GoTo will drive growth less through incentives and more through innovative products, increasing the user base, and focusing on retention through its subscription products, with fintech becoming increasingly important. 

• Sumitomo Chemical issued new guidance in-line for 3/24 and xx% ahead of consensus for 3/25 EBIT, yet, the shares promptly declined by 10%.
• Traders were probably spooked by the company’s booking of ¥340bn in impairments that was ¥200bn more than published consensus, but we argue that this was more than already priced in.
• The only reasonable explanation for the reaction is that the market doesn’t believe the new guidance for 3/25. This could prove to be a huge mistake.

• MHI was sold off last week as FY Mar-24 operating profit fell short of guidance and management guided for a decline in new orders this fiscal year.
• Orders momentum has peaked. Sales and profits will follow. But the latter are still rising and guidance could once again be conservative.
• Consolidation of the share price is likely to continue until orders and profit trends are confirmed.

• The National Health Commission and eight other departments issued “Opinions on strengthening the capacity building of critical care medical services”. New policy catalysts in the medical device sector arrives.
• Current valuations of weight-loss drug companies have “large bubble”, which have basically priced in all the potential of GLP-1s even based on optimistic assumptions. We advise investors to be rational.
• The price of core raw materials is showing a continuous upward trend, which will inevitably cause certain difficulties for Pientzehuang’s performance growth in 2024. Valuation has more downside ahead.

• Automotive display driver IC leader Himax reported 1Q24 results last week that were ahead of guidance. The company also guided for rising margins.
• Management believes 1Q24 represents a cyclical bottom for the company’s financial performance and expects automotive demand to rise in 2H24E.
• Himax rallied but remains 55% below its 2021 highs, yet its market opportunity larger than ever. Himax could be benefitting from different positioning within automotive chips than NXP & Infineon.

• The market is satisfied with BeiGene’s 24Q1 performance. The major reason for BeiGene to narrow net loss in 24Q1 was based on strong product revenue growth rather than cost control. 
• Given the varying pace of product promotion/R&D expenditure and the changes of product sales growth, BeiGene’s adjusted loss may achieve breakeven in a certain quarter of this year (e.g. 24Q4).
• BeiGene (6160 HK) is hard to cut costs largely. Sustained overall profitability may not be achieved until 2026 or 2027. But at least, we still see hope for a turnaround.

• China’s two national port companies China Merchants Port (144 HK) and Cosco Shipping Ports (1199 HK) have underperformed, but exports have picked up. We see an opportunity here.
• With a 9.2% increase in container throughput, CSPL even down by 4.8% YTD, underperformed CMPH by 12.9pp. There is room for it to catch up.
• CSPL is also cheaper at 7x and 6.3x PERs for the next two years, making it more attractive on a relative basis.

• We summarize our gleanings from the conference call with Dream International (1126 HK) to better understand growth opportunities and future expansion plans.
• The company is expanding in Indonesia to increase its capacity by 30 million USD ( over 830 million USD). (capacity utilization for FY23:83%).
• Trading at 4x FY24e PE, with an 11.4% dividend yield and a 15-year average ROE of 20%, this is a stock worth exploring. 

• 1H Results: On April 12, 2024, Paycloud Holdings Inc. announced its 2Q FY2024/8 earnings, its first earnings announcement since becoming a holding company and changing its name on March 1, 2024.
• In 1H FY2024/8, the company reported net sales of ¥1,990 mn, adjusted EBITDA of ¥226 mn, and operating profit of ¥86 mn. It had an irregular 5-month accounting period in 1Q FY2023/8 that included the July-August 2022 earnings following a change in the accounting period of the former Valuedesign Inc., which was merged with the company.
• As a result, the company’s earnings summary for 1H FY2024/8 show sales being down 12% YoY, adjusted EBITDA up 2% YoY, and operating profit up 237% YoY.

• In FY24, Gravita India (GRAV IN) had faced qualified opinion from the auditors regarding its accounting pertaining to share based payments, which in a way boosted the earnings. 
• However, the unusual accounting behaviour is not for the company. We have seen some irregular line items in the past as well, w.r.t. gains and losses on commodities and forex. 
• Other key takeaways include negative free cash flows and difficulty in cash generation, revenues from traded goods not being in sync, fresh contingent liabilities, etc.

• SiriusXM Holdings Inc. delivered a strong financial performance for its first quarter of 2024, with an encouraging 7% year-over-year increase in advertising revenue to over $400 million.
• This growth in ad revenue, driven by a growing addressable advertising audience and a strengthening ad market, helped offset a slight 1% drop in subscription revenue.
• The firm’s adjusted EBITDA was up 4% year over-year and delivered a margin of 30%, up 1 percentage point from the previous year.

• Lear Corporation’s record-setting first quarter revenues of $6 billion show an increase of 3%.
• Core operating earnings were up 6% at $280 million, while adjusted earnings per share rose 14% to $3.18.
• Operating cash flow matched that of the same period the previous year.

• Based on the Q1 2024 earnings, Corning Incorporated appears to be in a position of growth and profitability.
• With sales close to $3.3 billion and EPS of $0.38, the company exceeds its guidance predictions.
• There was a year-over-year gross margin growth of 160 basis points to 36.8%, and a substantial improvement in free cash flow by $300 million.

• In Q1 2024, Gartner delivered strong profitability and free cash flow, which both surpassed expectations, leading the company to increase its guidance for the year.
• The company proved its resilience in what’s described as a “complex environment”, with contract value growth in the high single digits.
• However, there remain several challenges to face.

• In Q1 2024, Eli Lilly and Company achieved strong growth and strategic milestones, with revenue growing by 26% and new products increasing by nearly $1.8 billion in comparison to the same period last year.
• The company’s new products, primarily Mounjaro and Zepbound, primarily drove the growth.
• Eli Lilly also accomplished various pipeline milestones during this period.

• Incyte Corp’s first quarter 2024 earnings pointed towards the company’s steady performance during the quarter and provided an update on its ongoing projects.
• The company’s total revenue grew by 9% in Q1 as compared to the same period last year, with growth driven largely by the drugs Jakafi and Opzelura.
• In particular, Jakafi’s net product revenue was $572 million, not fully reflecting its demand growth due to an increase in total patients, particularly those with PV and GVHD. Similarly, Opzelura’s net product revenues in the first quarter were $86 million, indicating a 52% growth when compared to the same period last year.

• Ecolab Inc.’s first-quarter 2024 earnings showcased strong progress with adjusted earnings per share increasing by 52%.
• This impressive outcome can be attributed to a 5% growth in organic sales and the expansion of organic operating income margin by 400 basis points.
• The company is also expected to maintain its long-term earnings growth of 12% to 15%.

• Mastercard Inc.’s Q1 2024 earnings showcased the company’s firm position in the payments sector, underpinned by robust revenue and adjusted net income growth on a non-GAAP, currency-neutral basis.
• The company’s strong results go beyond the uptake in consumer spending, extending to the rapid growth in cross-border volumes.
• There are several factors at play that make Mastercard attractive from an investment standpoint.

• In its first quarter 2024, Archer-Daniels-Midland (ADM) reported adjusted earnings per share of USD1.46, and an adjusted segment operating profit of USD1.3bn, representing an on-year decrease of 24%.
• ADM also achieved a trailing 4-quarter average of 11.2% for its adjusted Return on Invested Capital (ROIC) during the same quarter, while maintaining a strong balance sheet and healthy cash flows.
• Although the global grain and oilseed supply is expected to increase throughout the year amid an anticipated improvement in weather conditions, ADM proactively managed the risk of falling margins by driving the structural earnings, ROIC, and cash flow generation, enabling the company to continue investing in its business and returning cash to its shareholders.

• China’s smartphone market saw growth in 1Q 2024, with increased shipments of OLED panels indicating potential for LG.
• Panasonic’s battery unit received US subsidy but faces weak EV demand, potentially hurting sales.
• Concerns rise as tech giants invest in AI infrastructure, with focus on consolidation, data privacy, and potential misuse of power.

• PayPal Holdings Inc.’s Q1 2024 earnings showcased a solid start for the year with substantial improvements across various sectors of the business, tempered by an understanding of the need for continued retooling and operational changes.
• The company leadership is operating cohesively and the new strategies in place are evidently beginning to make a difference.
• PayPal has maintained steady progress with their three customer groups; large enterprises, small businesses, and consumers, including their subsidiary, Venmo.

• Amazon.com reported robust first quarter financial results in 2024, with revenue of $143.3 billion, a 13% increase year-over-year.
• However, the result excludes the impact of foreign exchange rates, which caused an unfavorable impact that reduced revenue by roughly $700 million.
• The company delivered higher than expected operating income of $15.3 billion, which is a 221% increase from last year, driven primarily by efficiency improvements and better customer experiences.

• TPL reported first quarter results with a higher than expected revenue figure from water sales to go along with the Company’s disclosure of a new desalination technology
• TPL’s quarterly results were better than we had projected due to the performance in water sales. Unlike second quarter 2023 results, TPL’s management referred to a pipeline of sales
• TPL used the first quarter results to disclose a new method of desalination of produced water

• In our latest South Korean banks screener, we keep Woori on the buy list along with KB Financial as our Korean banks picks
• Delinquency ratios continued to worsen QoQ, yet Woori is the benchmark for NPL ratio; Woori had lagged in terms of returns, but these are holding at the pre-provision level
• KB has a low PBV ratio relative to its ROE, it delivers rising post-provision returns, with cost of risk declining and it has a healthy CET1 ratio

• Management has indicated that the pipeline for new leases, renewals is robust as ICE & multiple government entities seek capacity.
• Company is engaged in multiple discussions.
• In addition, the recent debt issuance extended maturities & CXW was able to maintain the cost of capital despite the uncertain rate, economic outlook.

• Ecolab Inc.’s first-quarter 2024 earnings showcased strong progress with adjusted earnings per share increasing by 52%.
• This impressive outcome can be attributed to a 5% growth in organic sales and the expansion of organic operating income margin by 400 basis points.
• The company is also expected to maintain its long-term earnings growth of 12% to 15%.The CEO, Christophe Beck, expressed satisfaction with the level of dedication and the results obtained from Ecolab’s workforce.

• Mondelez International had robust Q1 2024 with solid top line results, strong earnings, and free cash flow generation.
• The performance was buoyed by momentum in emerging markets where consumer confidence is high and categories are resilient.
• The company faced challenges such as disruption with European clients and boycott of Western products in the Middle East and Southeast Asia.

• Starbucks’ second quarter fiscal year 2024 results reflect the challenges and opportunities the company faces in a changing marketplace.
• While global comparable store sales declined by 4% year-over-year and the company’s total revenue dipped by 1% to $8.6 billion, a decline in foot traffic in North America and a hefty decline of 11% in China being a few of the contributing factors.
• The company was also affected by severe weather conditions, causing a nearly 3% impact on both US and total company comp during the quarter.

• Celltrion Inc (068270 KS) posted revenue of KRW700B+ in 1Q24, thanks to increasing demand for Remsima in Europe. The market share of Remsima is approaching 80–90% in select European countries.
• 1Q24 profit setback is temporary as COGS ratio is expected to improve rapidly starting from 2Q24 as the inventory is digested, leading to sequentially improved profit margins in coming quarters.
• With the successful U.S. launch of Zymfentra and continued solid uptake of the existing products, the company is well-positioned to meet its 2024 revenue target of KRW3.5T (+60% YoY).

• AEM (AEM SP) published dismal 1Q24 results and kept its modest guidance for 1H24.
• AEM has announced new customer wins going into FY25 which should improve results materially next year. The sell-side has downgraded estimates aggressively making room for upside surprises next year.
• AEM has seen an implosion in investor confidence because of the inventory issues, and slow orders from its key customer Intel Corp (INTC US). Long-term investors should accumulate here. 

• Samsung and LG are launching new gaming and AI-focused monitors to take advantage of the recovering market.
• Tata Elxsi is collaborating with Arm on self-driving vehicle solutions, while Saudi fund considers cutting ties with China for US chips and AI.
• Samsung and SK Hynix are competing in the HBM market, driven by demand for high-bandwidth memory solutions. Toyota plans to invest JPY2 trillion in supply chain, EV, and SDV, with Tata making progress in semiconductor manufacturing.

• Hotel rooms in China decreased by 5.4% compared to the previous year
• H World has maintained its position as a leading hotel operator in China with a diverse portfolio of brands
• Founder Qi Ji’s strong track record in the hospitality industry has contributed to H World’s success in navigating challenges and growing its presence in the industry.

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.

• FY2023 Success: Daikin achieved record-high sales and profit, driven by FX impacts. Despite challenges like reduced demand, the Air Conditioning business expanded in key markets.
• Ambitious Targets: FY3/25 targets include surpassing previous financial records, despite continued sluggish demand.
• Cautious Outlook: While optimistic about market share gains, reservations persist, particularly regarding heat pumps. Stock performance remains steady, trading in line with historical averages.

• Tower is a pure-play analog semiconductor wafer foundry that manufactures SiGe, MEMS, RF, embedded flash-based memory, analog/mixed-signal, and CMOS image-sensor devices in the US, Israel, and Japan.
• It is serving markets in mobile such as RF High Position analog, as well as in CMOS image sensors, and power management.
• It also added a new fab in Italy in partnership with STMicro that has just started shipping product and whose capacity will continue to ramp over the next two years.

• Stable cement price, good cost control, and a better base for comparison will lift Anhui Conch Cement (914 HK)‘s profitability recovery in 2-4Q24.  
• Anhui Conch’s earnings outperformed in 1Q24. Its peers are making losses and hence will reduce excess supply. Stabilisation of the real estate market will lower the pressure on demand.
• Net cash equals 46% of the current share price, and its valuations (both PER and P/B) are inexpensive relative to peers and ROE.  

• Committing to raising production capacity –Shofu announced its fifth medium-term plan, covering the four years from FY3/25 to FY3/28.
• The core message is that the company has competitive products and high demand visibility in overseas markets, and is reaching the point of attaining annual sales volume of ¥50bn.
• The plan will involve significant capital allocation to raise production capacity and other business investments to meet its goals. zed.

• It’s an exciting 1Q24 result that revenue and GM beat the prior guidance.
• The 2Q24 outlook appears to be better than 1Q24, with revenue expected to increase by 5% to 7% QoQ and GM by 9% to 11%.
• We consider the primary bottleneck is the embargo of EUV machines to China from the Netherlands.

• Classys (214150 KS) started 2024 on a strong note with highest ever quarterly revenue and operating profit in 1Q24. Faster-than-expected consumables orders from overseas markets drove the overall performance.
• The proportion of consumable sales rose to 53% (1Q23: 48% and 4Q23: 43%), increasing by 42% and 32% QoQ. Increasing contribution from high-margin consumables sales improved the profitability substantially.
• Favorable industry tailwind, global expansion, and new launches remain main growth drivers. Classys still expects 2024 revenue of KRW225B, up 25% YoY. In April, Classys obtained FDA approval for Volnewmer.

• Sido Muncul (SIDO IJ) had a poor Q2-Q3 numbers, and investors sold off. 
• The recent uptick is driven by revenue growth and cost cutting exercises (mainly in wages) that improve margins.  
• Productivity may not stay at the same level thus Q2 24 numbers are key. Take your win first. 

• We feel consensus overstates margin pressure for Alibaba’s March quarter results. We expect its group adjusted EBITA to deliver single-digit growth vs. investors’ concern about earnings retreat.
• March quarter should mark start of an earnings recovery cycle in our view, as improving China macro and well-executed business revamp plan put Alibaba back on growth track.
• This also means an end to its multiple contraction which lasted for five quarters. We see 50% upside on double-digit earnings growth and multiple expansion over next 12 months.

• TSMC: Premium Fell and Then Rebounded, Now +15.6%; Can Consider Shorting Again
• ASE: Falls to +12.3%; Wait for Higher Level Before Considering a New Short Again
• ChipMOS: -0.6% Discount; Massing of Short Interest Right Ahead of Earnings

• Q124 revenues of 2.36 billion, $60 million above the guided midpoint, down 5% QoQ and down 3% YoY.
• Current quarter revenue guidance of $2.5 billion representing a ~6% QoQ increase and about the same YoY.
• Share price close to record highs yet CY2024 outlook is tepid while the massive over reliance on China just keeps on going

• MHI’s stock fell 7% following the announcement of results. Guidance for FY3/25 missed analyst expectations
• Even so, MHI remains a key beneficiary of the global shift to clean energy and national policies aimed at bolstering national security 
• We remain bullish. The stock has performed well this year and but 13x EV/EBIT seems reasonable given the structural drivers

• IMAX Corp, listed on the NYSE, is a 71% shareholder of IMAX China, a HKEX listed subsidiary – in charge of the release of IMAX films in Greater China.

• IMAX HK is rather illiquid – 7.15 HK is a mere $0.93 USD – with no investor presentations, no earnings calls – again, as is common with ideas in this blog, we are dealing with a company that is more or less “unownable” for most, flies under the radar, and therefore sports a, for a lack of a better word, shite valuation.

• Whilst IMAX Corp, the parent company, trades at ~8x EBITDA, the “backwater” subsidiary IMAX HK, trades at a mere ~5x EBITDA, despite margins being more than 10 pts higher.

• Ferrari N.V. (RACE US) reported yet another high-quality quarter with 11%/18% YoY revenue/net profit growth on a flat YoY(%) volume quarter driven by mix improvement.
• Although there seems to be earnings upside, and the street was literally searching for it in the concall, management stuck to their 6.5%/9% revenue/net profit growth guidance for FY24.
• Trading at 50x FY24, the stock seems expensive, but the strong branding and order book implies very visible earnings growth into the future.  

• ExxonMobil’s latest performance paints a promising picture, powered by strategic decisions, cost-saving measures, and a focus on long-term growth avenues.
• In Q1 2024, ExxonMobil delivered $8.2 billion in earnings and $14.7 billion in cash flow, demonstrating ongoing efforts to enhance the company’s earnings power.
• The company made big strides in cost savings, achieving $10.1 billion in Q1 compared to 2019, on track to reach their goal of $15 billion in savings by 2027.

• The growth of TIDES business slowed down, and revenue decreased QoQ despite increasing production capacity.As the main growth point of WuXi AppTec’s future performance, this is not a good signal.
• Due to BIOSECURE Act, US companies have been negotiating with other contract manufacturers so as to reduce reliance on WuXi AppTec.Let’s see the situation of new orders in following quarters.
• WuXi AppTec’s performance recovery is closely related to the pace of Fed’s interest rate cuts. From the perspective of growth outlook/macro environment/geopolitical conflicts, WuXi AppTec is still in “dangerous period”.

• As we progress in earnings season in line with our previous Playbook, this one focuses on select consumer names. 
• Names discussed include Titan Co Ltd (TTAN IN), Vedant Fashions (MANYAVAR IN) , Go Fashion India (GOCOLORS IN) & Shoppers Stop (SHOP IN).  
• Most names expect a soft Q1, and SHOP is targeting the most aggressive expansion.

• A play on higher food and energy prices going forward
• Natural Gas moving up from multi-year lows will support fertiliser prices going forward
• A Low valuation with a solid balance sheet lowers the risk

• Operating profit: FY3/24 OP was 529 billion yen (+4.9% YoY) vs analyst estimates of 537 billion (1.5% miss)
• FY3/25 Operating guidance is 400 billion yen, significantly below analyst expectations of 480 billions (-16% miss).
• The initial market reaction may be negative, we would use that as an opportunity to buy into the stock for the cyclical upturn in FY3/26.

• Taiwan Tech Rallies Along With Rebound In Global Tech; Hon Hai, Asustek Top Gainers; KYEC a Top Loser After Announcing China Market Divestment
• PC Monitor: The Next Version of MSFT CoPilot Will Be the Killer App for a Global AI PC Upgrade Cycle 
• ASMedia GDR Early Look – Momentum Has Been Strong, and Raising Would Grow Its Cash Base Almost 6x 

• We upgrade Meituan because we believe its success in Hong Kong might be replicable on a global scale. 
• The upcoming autonomous driving (ADS) revolution has deep and fundamental implications in permanently cutting Meituan’s logistic cost;
• We upgrade the stock from SELL to BUY and raise TP to HK$150/share

• Silicon Motion’s lQ24 results confirmed the company’s end-demand strength as implied by previous Samsung and SK Hynix management commentary re: solid state memory.
• Management has increased 2024E guidance, citing rising ASPs and strong demand due to its memory controller products’ usage in edge AI applications such as AI PCs and AI smartphones.
• The street upgraded target prices across the board after the results; however we note the stock remains below its past acquistion offer price by Maxlinear and we see further upside.

• Quint Digital (QUINT IN) announces alterations to its MoA, changing its name and expanding its digital ventures, including joint ventures and acquisitions.
• Quintype Technologies India Limited’s impressive growth and the acquisition of Lee Enterprises (LEE US) highlight Quint Digital’s ambitions and potential.
• Despite debt concerns, Quint Digital’s strategic investments in digital media and technology position it for substantial growth, potentially reshaping the digital publishing landscape.

• Singamas Container Holdings (716 HK) is interesting in that it has a net cash of US$300m (HK$2.35bn), but its market capitalisation is only HK$1.5bn. 
• This is a possible privatisation candidate given the steep discount to cash. The thin trading volume made it difficult to function as a financing platform.
• Business-Wise, it should have passed the trough as global container box plant utilisation is expected to improve in the next two years, driving profitability recovery.

• Delta Corp Ltd (DELTA IN) sells its Nepal casino business to Ability Games amidst allegations of connections to illegal betting and money laundering.
• The ED’s investigations into Mahadev Online Book reveal a Rs 3,916 crore scam, freezing of Rs 580.78 crore assets, and involvement of companies like Ability Games.
• CEO of Delta Corp Ltd (DELTA IN)mentioned in ED statement that they have agreed for 10Crs over and above the transaction value.

• Despite a slightly flatter revenue/margin trajectory outlook, we remain optimistic that ATRenew’s differentiated pre-owned consumer electronics transactions and services platform in China will continue to drive outsized growth in transaction volumes, sales, fees, and profits over the long run.
• While RERE has meaningfully outperformed recently, we believe current levels for the stock still provide investors with an attractive entry point, as awareness and appreciation of the company’s business model, growth prospects, competitive positioning, and valuation disconnect increasingly take hold.
• Despite what we believe to be conservative inputs/assumptions, our DCF model suggests a wide disconnect between ATRenew’s fundamentals and the stock’s current price.

• 1Q24 revenue and GM are in line, but operating income at 24.3% was 1% below consensus.
• GlobalWafers anticipates revenue in 2024 will likely be similar to 2023, which means 1H24 revenue could account for 45% of the 2024 yearly revenue.
• The planned dividend payout for 2024 is NT$19.0, with NT$8.0 from 1H23 and NT$11 from 2H23. 

• NIM is continuing to decline, from ~2.5% at its recent peak to ~1.8% in the most recent quarter. This may be from higher rescheduled loans.
• Loan growth ascent is strangely steady, and not indicative at all, of any business cycle. This alone is a concern, for true visibility of figures.
• Impairment costs do not suggest concern on underlying credit metrics, but with far higher loan balances in the past few years, this is an even greater worry.

• We believe total revenue will grow by 7% YoY in 1Q24 and faster in the remaining three quarters of 2024.
• We believe EPS will grow by 41% to HK$3.80, which is higher than the market consensus.
• The stock has risen by 26% since our last Buy rating, but there is still an upside of 9% till the end of 2024.

• We believe revenue will grow by 6% YoY in 4Q24, but by 11% for FY2026 (roughly 2025 calendar year).
• We believe Alibaba has been actively raising its revenue growth, but this the effect cannot be seen in the short run.
• We conclude the stock has an upside of 46% and a price target of US$120.

• China after-school tutoring remains one of the most attractive and visible sectors in the next 2-3 years time frame. 
• Even though New Oriental Education & Techn (EDU US) had some hiccups in FY3Q24 results, they were mainly due to factors not related to the core after-school tutoring business.
• My sector top pick is China Beststudy Education Group (3978 HK), as valuation is lower and growth is higher, though it has a much smaller market cap..

• The company’s management fees now cover the operating costs after many years of losses
• Recent fund raising has surpassed expectations for its latest VC fund
• The company’s steps towards better capital allocation are trending in the right direction

• Komatsu’s operating profits for FY3/24 of Y607 billion (+24% YoY) surpassed estimates on strong U.S. equipment sales
• Komatsu guides for FY3/25 operating profits of ¥557 billion (-8.3% YoY), assuming ¥140/US$
• We believe that the market remains too focused on the near-term growth slowdown, while we believe that Komatsu is attractively priced at under 10x EV/EBIT

• Samsung SDI exhibits confidence in future growth and innovation by increasing investments despite weak 1Q24 results.
• UnaBiz boosts Sigfox 0G Technology by reducing device energy usage by up to 18 times, enhancing efficiency.
• Sharp considers establishing a display plant in India, potentially boosting the country’s electronics manufacturing sector.

• Ajanta Pharma (AJP IN) reported strong Q4FY24 results, with double-digit revenue and PAT growth, and improving margins, driven by growth across all the business segments.
• The company has announced INR3.5B buyback plan, involving purchase of 10,28,881 equity shares (0.82% of the total paid-up equity share capital) at a price of INR2,770 per equity share.
• Ajanta Pharma is confident of maintaining double-digit growth going ahead with the existing products gaining market share, new launches, and expansion of field force.

• TAL Education Group showcased a strong financial performance in the fiscal fourth quarter and full fiscal year of 2024.
• The group’s Learning Services and Content Solutions segments demonstrated growth, driven by focused product development and a broadening customer base.
• The Learning Services sector saw continuous growth, supported by the expansion of learning centers and increased enrollment.

• Royal Caribbean Group has made impressive strides in reshaping the business in the first quarter of 2024.
• The company described its Q1 2024 as robust and experiencing an upward trajectory in business operations, bolstered by the consumers’ demand for vacation experiences.
• The results of Q1 2024 were significantly better than anticipated, with the company’s brands being stronger than ever and demand for vacation experiences showing consistent acceleration.

• The first quarter 2024 earnings for Newmont Corporation presents an operational and strategic snapshot for the company in a balanced manner.
• To lay out the salient attributes and challenges of investing in Newmont: Positively, Newmont executives highlight the company’s robust operational performance for the 1st quarter 2024.
• Despite experiencing the loss of three employees due to on-site incidents, Newmont still looks set to meet its 2024 guidance, thereby proving the underlying stability of its operations.