Equity Bottom-Up

• Total revenue increase by 42% and automobile revenue increased by 49% in 2023.
• The gross margin improved significantly in 2023, especially in 4Q23.
• We believe BYD will move its focus from ‘low price for sales volume’ to ‘development of new vehicle models’.

• I wrote about this in my recent post about HBM, and it seems almost everything I talked about became true. HBM is going to bail out the memory markets meaningfully.
• Let’s talk about earnings, but I was hoping you could keep this post in mind while I discuss Micron.

• These are the kinds of beats we start to see when the cycle turns. Now, the stocks have begun to anticipate this, but given the pricing dynamics of HBM, I feel very confident in Micron’s ability to hit a new cycle high in profitability.

• At noon time today, Anta Sports Products (2020 HK) released strong 2023 results which beat expectations. 
• Anta currently trades at a forward PE of 18x based on estimated 2024 earnings (assuming a conservative 15% yoy growth in 2024 earnings). 
• I expect the company’s net profit to grow 15-20% CAGR in 2024-2026.  Anta’s historical forward PE is around 24x since 2017. 

• Tencent reported C4Q23 revenue, IFRS operating profit, and non-IFRS net income in-line with our estimates and in-line with consensus, with non-game revenues exceeding while game revenue missing expectations;
• We believe the shift from game to non-game should enhance Tencent multiples but the market might have concerns on the sustainability of this change. 
• We believe this change is sustainable with game revenue reaccelerating and non-game revenue continues to gain weight. We cut TP by 3% to reflect slow game recovery in C1H24.

• Bukalapak.com (BUKA IJ) booked a slightly weaker finish to the year than expected with a slowdown in revenue growth in 4Q2023 and a miss on adjusted EBITDA breakeven.
• The key reason was a thinning out of non-performing specialty businesses which impacted short-term revenues but will improve revenues and adjusted EBITDA. as the focus shifts to higher take-rate businesses.
• Bukalapak.com PT Tbk (BUKA IJ) is guiding for +15-20% revenue growth and positive adjusted EBITDA in 2024 with execution on this being paramount. Valuations remain attractive.

• Delta Taiwan Outperforms Delta Thailand After Showcasing Its AI Power Efficiency Solutions at NVIDIA Corp (NVDA US)’s GTC Conference 
• Delta Taiwan vs. Thailand Valuation Mismatch Has Corrected Further; Delta Thailand Finally Worth Less Than Its Parent
• Short Interest Spiked for Delta Taiwan; Taiwan Rally Short-Term Overdone Due to AI Concept Stock Hype?

• Alibaba Pictures (1060 HK) is expanding rapidly into complimentary areas such as online ticketing of cinema and live events with the recent acquisition of  Damai.cn from parent Alibaba.
• Alibaba Group Holding (9988 HK) is considering injecting other media platform assets like Youku  to realize synergies among its portfolio of companies.
• Ali Pictures (Alipics) legacy film production business continues to expand globally with its American film production company, Amblin which is a partnership with Steven Spielberg.

• Cost and business optimisations lead to increased profits as revenues drop due to freight rate declines
• Successfully pivoting by geography as the global trading environment changes
• The company increases its dividend payout in a sign of confidence for the future

• FDA approval of Wegovy is overvalued at approx. $460 billion. Market exaggerated the worth without proper assessment of weight loss results and risks associated with the drug.
• Clinical trials showed a 14.9% weight loss with diet and exercise; real-world results would be lower. Impact on BMI for obese individuals won’t be significant. Long-term use is questionable.
• Competition in the GLP-1 market is fierce. Novo Nordisk faces challenges in India and China, increased capex spending, and risks from compounding pharmacies and potential legal issues.

• Meituan reported C4Q23 revenue beat our estimate/consensus by 0.7%/1.4%; operating profit beat our estimate/consensus by 37.3%/48.6%, mainly due to order volume surprise, which is unsustainable in our view.
• However, we think Meituan’s near term pressures did not change: (1) core biz OPM drop due to rising low-price orders and subsidies; (2) resuming competition from Eleme/Douyin/PDD
• We maintain the stock as SELL rating but raise TP by HK$13 to HK$70 to factor in the loss cutting commitment in the community group buying biz.

• Xiaomi released healthy financial results inspite of the shrinking market.
• Alibaba Freshippo founder, Mr. Hou, retired from his role as the CEO of Freshippo.
• JD began to provide aftermarket service to BYD, the largest new energy vehicle producer.

• It’s time to revisit the network of Alibaba’s ( Alibaba Group Holding (9988 HK) ) affiliated listed companies for near term investment opportunities
• After investing in an ecosystem of online and offline companies over the last 10 years, Alibaba is rapidly restructuring its businesses to refocus on its most profitable opportunities
• Sun Art Retail (6808 HK) will benefit from the synergies of Baba’s restructuring

• Total revenue grew by 22.6% YoY in 4Q23, three percentage points higher than we expected.
• MT’s operating profit broke even for the fiscal year 2023.
• We conclude an upside of 113% and a price target of HK$188. Buy.

• Key Taiwan Server Names Soar; Delta Electronics Major Winner of Nvidia’s Conference
• TSMC (2330.TT; TSM.US): Raising Growth Target to 25%+ YoY in 2024F
• Memory Monitor: Micron Leapfrogging Into HBM3E for AI; Nanya Lagging Peers But Poised to Benefit 

• The Japanese banks’ share prices have barely moved following the Bank of Japan’s exit from negative interest rates; is it largely discounted or does the continued accommodative stance instil caution? 
• Japanese banks will benefit from 100% of their deposits at the BoJ earning 0.1%, as opposed to 40% of bank deposits which was the case up to the 20th March
• We believe our positive recommendations are all geared into higher domestic interest rates; we highlight Resona, Mizuho and Suruga in this report for their high cash and at bank balances

• You know it’s bad when Tesla’s delivery trends blow through even my lowest estimates, which already had trailed market projections.
• With no help from the hapless CyberTruck which, not surprisingly, continues to shoot Tesla in the foot.
• See my latest Q1 and full-year estimates—which still prove to be too high.

• Strong uptick in price momentum in February reflects booming spot market
• February container throughput growth in key regions also firm, up 7.4% Y/Y
• We suggest Short Evergreen vs Long Maersk (or ZIM) pair trade idea

• Kunlun Energy (135 HK)‘s 2.2% drop in core earnings in FY23 is distorted by the expiry of exploration rights of oilfield projects. All other segments have done well.  
• FY24 outlook is positive – reduction in E&P distortion, addition of more city gas projects, higher utilisation of LNG plants and terminals, and optimisation of gas pricing mechanism.
• Net cash of Rmb20.4bn equals 29% of market capitalisation, providing room for a higher dividend payout. A re-inclusion into the HSI is not totally out of the cards.

• Taylor Swift concerts in Singapore has increased both hotels’ occupancy rate and daily rate
• Far East Hospitality Trust (FEHT SP) share price has not moved much since the Swift concert. 
• There is a slim chance FEHT hotels did not participate in the upside during Swift event, but the odds are higher that FEHT hotels will participate in the upside.

• Headline February numbers look pretty good — but they’re misleading
• On a combined basis, January-February data show ASPs still under pressure
• Recent results from ZTO and J&T Global have been unimpressive, in our view

• Travelsky Technology Ltd H (696 HK) share price has recovered by 25% since January 2024 sell off
• CNY travel data indicates a huge potential of revenue increase for Travelsky.
• At 18x PER, Travelsky has become a bargain in the travel sector that is clearly rebounding. 

• Concerns around slowdown in growth are behind the disconnect between PDD’s stellar 4Q23 results and lackluster share performance, in our view.
• We have seen this before. If history is a guide, its valuation will improve after growth hits bottom in 1Q24.
• We expect PDD to deliver 50% plus growth for 2024 and generate US$14 billion adjusted net profit. Reiterate US$240 billion target market cap or 50% upside.

• Organic growth in J&T’s China operations exceeded that of peers…
• …but the implosion of New Markets and X-Border is a shock
• Lower margins from SE Asian cash cow also a surprise, in our view

• Benefiting from changes in pandemic prevention policies and favorable reimbursement policy support, TCM injections market would end its years of continuous decline and enter a period of rapid growth again.
• After Novo Nordisk acquires Catalent, China CXOs would be less likely to obtain the global GLP-1 orders. As MNCs rethink supply chain issues, China CXOs would face more challenges.
• Against the backdrop of anti-corruption/import substitution, investment logic of United Imaging is solid. However, the biggest issue is high valuation. Fundamentals’re difficult to support more than RMB100 billion market value.

• Fu Shou Yuan (1448 HK)‘s net profit grew 20.1% in FY23; and if not a withholding tax of Rmb87.4m, its net profit would have increased by over 30%.  
• Including a special DPS of HK$0.2139, full-year payout ratio reached 98.5%. Still, it has net cash of Rmb2.7bn or 24% of its market capitalisation.
• Profitability outlook is encouraging – structural demand increase, higher ASP, and well-contained costs. Its land reserve is enough to be consumed for 82 years.

• NAVF and Dalton invest heavily in Hogy Medical, eyeing its market dominance and growth potential in disposable surgical equipment
• Despite past underperformance, NAVF’s proactive engagement signals a push for a more aggressive overseas expansion
• We see a number of continued catalysts for future shareholder value enhancement and improved corporate governance position

• Healthy sales volume (up by 9% YoY to 512,205 MT) drive revenues in Q3FY24
• EBITDA per ton remain subdued, but expected to steadily gather strength
• Acquisitions coupled with ramp up of existing capacity will help take the growth story forward

• Crypto mining requires high capital investment, faces volatile bitcoin prices, and will experience upcoming revenue cuts due to the halving on April 16th
• Experts believe the risks outweigh the potential for short-term success in crypto mining, making it unlikely to generate significant free cash flow in the long term
• Examples like MARA, which saw a significant increase in revenue at a small fraction of its market value, showcase the precarious nature of 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.

• Sanjiu’s 2023 performance was below expectations, mainly due to the VBP of TCM formula granules and the anti-corruption since 23Q3. But dividend payout ratio reached 51.96%, the highest since 2001.
• The prescription drug business would be the core of Sanjiu’s performance changes in next two years, especially TCM injection business, which would be benefit from favorable medical insurance reimbursement policy.
• Sanjiu’s management expects to achieve double-digit revenue growth in 2024, with net profit matching the level of revenue growth.We think 2024 performance growth would be lower than that in 2023.

• Share buybacks by primary-listed companies Institutions were net buyers of Singapore stocks over the five trading sessions through to Mar 21, with S$257 million of net institutional inflow, as 23 primary-listed companies conducted buybacks with a total consideration of S$26.5 million.
• This followed her acquisition of 13,900 shares at an average price of S$0.48 per share on Mar 7, and 191,500 shares at S$0.49 per share on Mar 11.

• PDD reported C4Q23 top-line, non-GAAP EBIT, and non-GAAP net income (2.4%), 12.4%, and 24% vs. our est., and 11.6%, 37.0%, and 50.3% vs. cons., respectively;
• We estimate the beat was driven by (1) improved take rate on the China platform following ad tool adjustments, and (2) Temu margin expansion;
• We remove Temu US from our model from 2025+, as restrictions seem more than likely following the TikTok ban and cut TP to US$ 159 to reflect this;

• Tencent Holdings Ltd. (腾讯) reported weaker-than-expected results in the fourth quarter of 2023, as the Chinese internet behemoth faced challenges growing its gaming business, particularly in China’s domestic market.
• During the three-month period, Hong Kong-listed Tencent generated 155.2 billion yuan ($21.9 billion) in revenue, up 7% from 2022, according to its earnings report released Wednesday. That missed the average estimate of 157.4 billion yuan by analysts surveyed by Bloomberg.
• Quarterly net profit also fell short of expectations, down 75% year-on-year at 27 billion yuan, compared to average analysts’ predictions of 33.3 billion yuan.

• ModivCare (MODV US) issued 2024 revenue guidance, which fell short of consensus. The company anticipates 2024 adjusted EBITDA to be $190–210M, down 2% YoY at mid-point.
• NEMT segment is witnessing decelerating quarterly revenue growth and lower margins. Gross profit per trip of NEMT segment is expected to decline 25% YoY and QoQ to $5.69 in 1Q24.
• Modivcare will see improvement in financial performance no sooner than 2H24. Shares plunged 44% YTD. No recovery is expected in near-term.

• GoTo Gojek Tokopedia (GOTO IJ) 4Q2023 results revealed another sequential increase in GTV and positive adjusted EBITDA for both ODS and e-commerce, despite reduced incentive and marketing spending.
• GoTo achieved positive top-line growth by expanding its total addressable market through more affordable products and a strong performance from consumer lending in fintech, coupled with great cash cost efficiencies.
• 2024 will be a transformational year for GoTo without the yoke of Tokopedia promotional spending but with significant cash coming in every quarter that can be used to drive growth.

• Micron shares have soared after the company reported its latest results with forward margin guidance well above consensus expectations.
• Micron appears to be successfully leapfrogging into ther HBM memory space, and says that its production for 2024E is sold out and for 2025E is already all ‘allocated’.
• Taiwan’s Nanya Tech has lagged its peers by a wide margin; Nanya lacks HBM products however HBM market demand is driving supply tightness for all DRAM.

• Tesla Inc. will increase the price of its popular Model Y crossover by 5,000 yuan ($694) in China, a move that offers rivals a temporary reprieve as a raging price war engulfs the world’s largest auto market.
• The price rise on China-made Model Y vehicles will start on April 1, Tesla confirmed with Caixin Wednesday. Meanwhile, some of the extras offered by Tesla to its Chinese customers, including an 8,000-yuan insurance subsidy, will expire on March 31.
• Tesla previously announced a price increase of $1,000 for the Model Y in the United States and 2,000 euros ($2,542) in Europe.

• Chinese fintech giant Ant Group Co. Ltd. has completed the reshuffle of its consumer lending businesses Huabei and Jiebei, wrapping up a years-long, government-driven overhaul, a person close to the matter told Caixin.
• Ant’s two wholly owned small loan business units, the operators of Huabei and Jiebei, have fully exited the businesses during the past year.
• The two brands have been incorporated into Chongqing Ant Consumer Finance Co. Ltd. (CACF), a subsidiary set up in 2021 that is 50% owned by Ant, according to the person close to CACF.

• JAL finishing FY24 strongly with another guidance upgrade – upgraded FY26 targets more logical in light of existing ANA targets
• ​Demand momentum particularly helpful as wages rise across Japan and ​cost control to remain impressive over FY25-FY26 as LCC growth set to dilute FSC inflation
• ​Detailed analysis of JAL’s widening margin gap to ANA suggests revenue solution required – momentum helpful and needs to be watched carefully

• Adobe Inc.
• delivered robust financial results for the first quarter of fiscal year 2024, with a revenue of $5.18 billion.
• This represents a 12% year-over-year growth, demonstrating the significant role of Adobe products in powering the global digital economy.

• The second quarter of fiscal year 2024 saw Jabil Inc.
• achieve approximately $6.8 billion in revenue.
• This performance was in line with the guidance for the majority of the company’s businesses.

• Intel snags $8.5 billion in direct funding through the CHIPS and Science Act to advance its commercial semiconductor projects in Arizona, New Mexico, Ohio and Oregon.
• Investment Tax Credit (ITC) of up to 25% on > $100 billion in qualified investments and eligibility for federal loans up to $11 billion are also on offer
• Meanwhile, two separate reports suggest delays of up to two years in Ohio and suppliers in Arizona unable/unwilling to meet previous commitments to establish local supply chains. Ouch!

• Dentsply International (XRAY US) guided for 2024 revenue of $3.96–4.02B, flat to up 1.5% on an organic basis and 12% growth in 2024 EPS at midpoint.
• The macro environment continues to be challenging. The company anticipates the ongoing softness in imaging will continue in 2024. Cost savings will support the bottom-line growth.
• In terms of every valuation metrics, Dentsply is overpriced compared to its U.S.-listed peers. Strong balance sheet, accelerating dividend, and buyback do not justify the pricey valuation.

• Kuaishou reported C4Q23 revenue, IFRS OP, and IFRS net income in line, 31%, and 51% vs.  our estimates; and in line, 43%, and 67% vs. consensus.
• The significant profit beat was mainly due to the rich content supply on the platform that led to organic traffic influx, resulted in marketing costs reductions. 
• We raised our TP by HK$2 to HK$81, implies 20X PE, vs. current trading at 13X PE for 2025.

• The thesis for Pop Mart International Group L (9992 HK) is the successful expansion of its international business, which made up 13% of sales in 1H23 but is growing exponentially. 
• This has been proved true in the latest announced 2023 results, with a 135% growth in 2023 for the international business, and a further >100% growth guidance for 2024.
• The company is trading at 24x 2024 earnings, assuming a 35% net profit growth in 2024. 

• Q224 revenues of $5.8 billion, up 23% QoQ and up 58% YoY. It also well above the high end of the guided range of $5.5 billion.
• Net income turned positive & amounted to $476 million. This compares to a loss of $1 billion in Q124
• Forecasting current quarter revenues of $6.6 billion & gross margin of 26.5% at their respective midpoints

• Despite a disappointing 4Q2023 earnings report, NetEase (9999 HK) remains firmly amid an earnings upgrade cycle.
• With NetEase touching on being oversold, near-term momentum indicators are displaying bullish signals.
• NetEase currently trades more than one standard deviation below its rolling 5-year historic average PE ratio.

• Operating profit and its margin reached historical high in 4Q23.
• Monthly active user base continued to expand, which is rare for other apps.
• GMV (Gross Merchandise Value) of the live broadcasting sales increased rapidly by 29% YoY in 4Q23.

• Driving strategic revitalization – Nippon Shokubai is a global chemical company with competitive proprietary technology, a track record of sustained free cash flow generation, and a balance sheet with room for optimization.
• It has embarked on a business transformation, strategically focused on expanding its Solutions business with higher- margin performance chemicals and identifying energy, electronics, and life science sectors as growth markets.
• Organizational changes being conducted aim to enhance human resource development and conduct quicker decision-making. 

• Sourcenext Corp (4344 JP) plans, develops, and sells PC software, smartphone apps, and IoT products.
• In POCKETALK®, besides the existing device business, the company will focus on sales of software products, including Simultaneous Interpreter for the POCKETALK® for BUSINESS series for corporate customers.
• The revision is mainly due to the extended lead time from inquiry to full-scale orders for the POCKETALK for BUSINESS Simultaneous Interpretation web browser version.

• PepsiCo is a global company with significant presence in both snacks and beverages, generating around $80 billion in revenue
• Despite the impact of COVID-19 on its business, PepsiCo has maintained strong performance
• The company’s Beverages North America segment contributes a third of sales but only 22% of EBIT, while Frito Lay North America accounts for 25% of sales but 50% of EBIT

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.

• Sun* (4053 JP) provides consulting, software development, recruiting, and other services to companies that seek to create value or businesses, including startups.
• In FY12/23, revenue was JPY12.5bn (+16.5% YoY), operating profit JPY1.8bn (+96.8% YoY), recurring profit JPY2.3bn (+99.1% YoY), and net income attributable to owners of the parent JPY1.6bn (+90.4% YoY).
• Sun* does not disclose a medium-term business plan with quantitative targets, but it releases qualitative targets related to KPI growth.

• Azbil Corp (6845 JP) provides automation services for buildings, factories, and plants and also offers subsistence-related automation services in the lifestyle area.
• In FY03/23, sales were JPY278.4bn (+8.5% YoY), operating profit was JPY31.3bn (+10.7% YoY), recurring profit was JPY32.1bn (+8.9% YoY), and net income attributable to owners of the parent was JPY22.6bn.
• Azbil in May 2021 announced a new medium-term management plan to cover the four fiscal years from FY03/22 to FY03/25 and new long-term targets for FY03/31.

• As a comprehensive water treatment engineering company, Organo Corp (6368 JP) engages in the planning, design, procurement, construction, operational management, and maintenance of water treatment plants.
• In FY03/23, orders received were JPY173.5bn, revenue was JPY132.4bn, operating profit was JPY15.2bn, recurring profit was JPY16.0bn, and net income attributable to owners of the parent was JPY11.7bn.
• Organo Corporation announced revisions to its full-year forecast for FY03/24.

• In 4Q23, Tencent experienced a one-digit growth, but its margin improved significantly.
• We believe Tencent’s social networks will stop shrinking after the company sold movie assets to China Literature.
• We believe the stock will have an upside of 37.5% and a price target of HK$397 for year end 2024. Buy.

• CEO Jensen Huang’s keynote address at Nvidia’s GTC event on March 18 was a reminder that generative AI is about building secure and reliable systems, not chatting up the future.
• NEC has spent three years developing its own AI supercomputer, creating the best performing Japanese-language large language model (LLM), and testing new AI products in-house before delivering them to clients.
• The introduction of generative AI and LLMs into business- and industry-specific solutions should provide meaningful additions to NEC’s telecom services, social infrastructure, aerospace and national security related businesses. 

• Xtep International (1368 HK) announced in-line 2023 results, with net profit up 12% yoy and sales up 11% yoy.  2024 outlook was also satisfactory. 
• The company paid out 50% of its earnings in dividend, which amounted to a 5% dividend yield at current share price of HKD5.04.
• The company is currently trading at 10x 2024 PE (assuming a conservative 10% net profit growth in 2024).

• Earlier expectation on Micron will have rooms to raise becoming a reality, largely driven by over 30% q/q NAND bit price jump for storage business in 1Q24.
• 10ppts stronger 2Q24 sales guidance and 3-6ppts higher gross margin guidance are driving free cash flow improvement.
• AI server, PC, and smartphone driving DRAM bit demand and HBM3e/HBM4 and 1-gamma EUV DRAM slowing bit supply growth both are positive except MOI remains 15% above 5 years average. 

• Both advertising revenue and commission revenue grew dramatically in 4Q23.
• Chinese consumers are seeking low price goods, after the economy went weak.
• PDD’s overseas brand, TEMU, is expanding rapidly in the U.S.

• In Q3FY24, Maruti Suzuki India (MSIL IN) reported revenue of INR 335Bn, a growth of 14.6% YoY on the back of higher realization and volume.
• EBITDA margin expanded 210bps YoY to 12.3% as higher volume, favorable commodity price played a role in tandem.
• The company is planning 2x increase in its annual production capacity to about 4Mn by 2030-31. Capacity expansion plans augur well for the company in medium to long term.

• GoTo Gojek Tokopedia Tbk PT (GOTO IJ) reported 4Q2023 results yesterday which shows that the company’s profitability has significantly improved.
• The improvement in profitability has come at the cost of growth which has continued to decline suggesting profits may not be sustained.
• GoTo announced that it has completed the Tokopedia partnership deal with TikTok and also a plan to buyback shares, subject to regulatory/shareholder approval.

• Another quick trade idea. A continuation of the China theme (see my last post for more info).  Lufax holdings (LU). Again courtesy of JohnTill on Stocktwits.
• A Chinese lending company, lending out directly and providing a peer to peer lending platform for the Chinese market.
• With Ping An being a ~41% shareholder.

• Sudden resignation of Ravi Narayanan Group-Head in charge of retail branches, retail liabilities and third party products as he wishes to pursue entrepreneurship.
• Possible explanation is that the bank like other banks is finding it difficult to raise retail deposits and pressure is building up on senior management
• Bank has a high LDR and reportedly the banking regulator is demanding the bank to lower its LDR. This will have consequences on future loan growth or on NIM

• We are convinced that both bids for CPMC Holdings (906 HK) will go ahead, as they are progressing well. The downside risk is minimal, in our view.
• The strong underlying result justifies a high price for the stock. Excluding distortions from non-recurring items in FY22, earnings have increased by 32.7% in FY23 and 26.8% in 2H23.
• The stock now trades on 13.8x and 12.8x PERs for FY24 and FY25, in line with sector average; but below that for Shanghai Baosteel Packaging-A (601968 CH). 

• Swire Pacific (19 HK)‘s discount to NAV is around a one-year high; and its implied stub (net of Swire Properties (1972 HK) has just rolled over from a multi-year high. 
• 45%-Held Cathay Pacific Airways (293 HK) recently reported its highest annual profit in more than a decade.
• Reportedly (Bloomberg) Air China Ltd (A) (601111 CH) is mulling a stake increase in the Hong Kong carrier. This is inevitable. It’s just a question of timing. 

• The share price of Sakura Internet has risen by over 500%, adding Y230 billion in market cap, since investors began pricing in the AI opportunity
• We use pricing data from Amazon AWS to model the revenue opportunity for Sakura’s GPU AI-cloud
• We estimate that 2,500 H100 GPUs could yield an equity value of Y49 billion, far less than the value the market has ascribed

• According to public news two days ago, COFCO Group is rumored to be a potential suitor for Alibaba’s 78% stake in Sun Art Retail (6808 HK).
• Alibaba wants to eventually get rid of the Sun Art stake, especially after Alibaba’s management change in late 2023.  
• Given limited downside, I believe it is worth a bet on the uncertain timeline but certain intention of the eventual divestiture of Sun Art by Alibaba.

• Cisarua Mountain Dairy (CMRY IJ) held an analyst call after its results, revealing a positive outlook for dairy products and premium consumer foods, with potentially higher margins ahead.
• The company launched several new products in 2023, with more of a focus on affordability through yoghurt sticks. It will launch more affordable Kanzler Singles in 2H2024.
• Cisarua Mountain Dairy will expand distribution through general trade and Miss Cimory MCM, with ongoing sales & marketing spending. Valuations remain attractive relative to growth and returns. 

• Edelweiss Financial Services (“Edelweiss”) reported a steady Q3FY24 led by robust profitability from across businesses except insurance, which is in gestation phase. All its businesses are scaling up well.
• Edelweiss’ credit business reported good traction in co-lending. 80% and 32% of the disbursals in the NBFC and the HFC businesses, respectively, came from co-lending. 
• Within the asset management vertical, the mutual fund business is growing well with 23% YoY growth in overall AUM and 47% YoY growth in equity AUM.

• EDR is likely to be acquired at a premium price in the near future, offering an attractive risk-reward opportunity for investors.
• Key assets like a stake in TKO, talent representation business (WME), and events business (EE&R) are considered valuable to potential buyers.
• EDR announced a review of strategic alternatives on 10/25/23, with CEO Ariel Emanuel noting the need to maximize value for shareholders due to a disconnection between stock price and asset value.

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.

• Taste Gourmet (8371 HK) will report its FY24 results in the third week of June. We estimate revenue/earnings growth of 38%/40% YoY. 
• We expect the company to end FY24 with >180 mn HKD of net cash on the balance sheet, representing 32% of the mkt cap (9MFY23 cash 148 mn HKD)
• Maintaining a 50% dividend payout ratio, we expect the company to declare a final DPS of 7 cents ( H1FY24 5.5 cents HKD), representing an 8.5% yield for FY24

• The results for 1Q24F should remain unchanged, even though we anticipate a slight upside.  
• UMC’s outlook for 2Q24F is deteriorating, with a likely decline 5-10% QoQ.
• The demand from UMC’s clients is not improving in 2Q24F.

• LIFULL reported an 8% increase in net sales to ¥8.1 bn, driven by overseas acquisitions made during the second quarter of the previous FY.
• OP from comparable operations remained steady at around ¥0.15bn. In the previous year, the company recorded an operating profit of ¥0.8bn, but this included ¥0.66bn in profits from the sale of Rakuten LIFULL STAY, a hotel and lodging platform operator, in October of 2022.
• In the current term, the company recorded a net loss of ¥0.05bn, but this included about ¥0.2bn in one-off costs for the transition to a new management structure in the overseas business. 

• WuXi AppTec’s 2023 results were disappointing. The decline in performance in 23H2 was quite severe. 2024 performance guidance could be meaningless because the biggest concern now is the geopolitical conflicts.
• If the bill is passed, valuation logic would completely change – not based on DCF/PE, but on PB, market value falling below RMB100 billion. We cannot rule out another privatisation.
• We hope that WuXi AppTec can prepare contingency plans for the worst-case scenario that may occur, rather than simply denying or mitigating the impact of BIOSECURE Act on the Company

• ICICI Securities Shareholders will consider delisting proposal at the end of March-24 which will decide its fate
• Swap Ratio based on current prices offers limited downside for I-Sec Shareholders if delisting goes through.
• There could be potential upside of 20% if delisting fails.

• Our NAV analysis of LG Corp suggests an implied market cap of 16.3 trillion won or 103,781 won per share which is 16% higher than current share price.
• For holdco discount, we used a 50% holdco discount. If investors perceive improvement in value (such as through corporate governance improvements), the holdco discount on LG Corp would decline.
• LG Corp’s shares are up 5.9% in the past six months, outperforming all the major LG Group related companies including LG Chem, LG H&H, LG Electronics, and LG Energy Solution. 

• Wins Co. is engaged in the business of developing and supplying information security solutions and developing software related to network security to protect networks from cyber threats and viruses. 
• The company has a consistent growth in sales and profits. It also has a strong balance sheet. At the end of 2023, it had a debt ratio of 15.4%. 
• Wins Co is trading at EV/EBITDA of 1.7x, P/E of 7.8x, and P/B of 0.9x in 2024 which are 75%, 26%, and 25% lower than the historical valuation multiples.

• This is our first report on ed-tech major, Coursera.
• The company had a successful fourth quarter, marking a strong close to the year.
• The company welcomed 24 million new learners in this period, bringing their base to more than 140 million and seeing an increase in annual revenue of 21% over the previous year.

• In Q3FY24, Larsen & Toubro (LT IN) witnessed order inflow of INR 760bn (up 25% YoY) bolstering the order book to INR 4.7tn at the end of December 2023.
• Margins continued to remain under pressure in 9MFY24 due to cost pressures in legacy jobs.
• Strong project execution and healthy order book are expected to drive future growth with margins reviving after bottoming out.

• This is our first report on AI software platform company, C3 AI. The company has demonstrated positive performance in their third-quarter fiscal 2024 results with a total revenue of $78.4 million, marking an 18% YoY growth and surpassing their guidance range.
• The total number of customer engagements has also seen an increase of 80% compared to the previous year.
• The company reported a non-GAAP gross profit of $54.7 million with a gross margin standing at 70%.

• This is our first report on capital equipment manufacturer, Kulicke and Soffa Industries Inc.
• The company delivered their Q1 2024 earnings recently, announcing an impressive revenue of $171.2 million for the December quarter.
• However, not all news from the call was as positive because GAAP net income stood at only $9.3 million, alongside non-GAAP earnings per share at $0.3. However, this was still slightly higher than the guidance midpoint.

• This is our first report on Envestnet, a leading provider of integrated wealth management solutions.
• The company announced strong financial results for the fourth quarter and full year of 2023 in its latest earnings call.
• The company reported solid growth and successfully executed its strategic initiatives, leading to significant margin expansion.

• A liquid proxy for China’s recovering consumption (with no technology regulation risk)
• A quality red chip company at a very reasonable valuation
• Growing sales and margins as its premiumisation strategy is executed

• Establishment Labs is a Costa Rican company known for manufacturing and selling breast implants, with their Motiva implant gaining market share from competitors.
• The stock price of ESTA has recently dropped significantly due to a weak Q3 and lowered guidance, presenting an opportunity for investors to get into the dominant player in the breast augmentation market at a discounted price.
• With Motiva having a low rupture rate and no cases of associated cancers, analysts value ESTA at approximately $100 a share on a DCF basis, making it a compelling investment opportunity for potential growth.

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.

• Nvidia GTC Conference This Week Likely to Create Newsflow for Many Tech Names
• Samsung Could Hike NAND Flash Prices by 20%; Silicon Motion for Exposure
• TSMC Reportedly Placing Orders for Additional Advanced Packaging Capacity, Likely In Response to Demand Strength

• TSMC: +15% ADR Premium; Likely to Trend Further Lower Over Time
• UMC: -2.3% Discount; Decent Level to Long the ADR vs. Short Local
• ASE: +11.6% Premium; Continue to Advocate Shorting the Spread Here

• A document titled “Soliciting Opinions on the Implementation Plan for Supporting the Development of Innovative Drugs throughout the Whole Chain” would completely change the outlook/investment logic of China’s innovative drugs.
• We predict that due to the early opening of TCM formula granules VBP in some provinces and intensifying competition, the market pattern of TCM formula granules would face reshaping.
• After the atropine eye drops is approved by the NMPA, Xingqi’s performance growth will accelerate. Supported by favorable policies, its market value is expected to reach above RMB30 billion.

• Since October, Evergreen shares have performed well on rising spot rates
• Over the same period, Maersk and ZIM shares fell on longer-term concerns
• Pair trade idea: SHORT Evergreen vs LONG Maersk / ZIM position

• TCL Electronics Limited (1070.HK ) (“TCL”), with a market cap of HKD 7.57 billion (USD 968 million), is not your ordinary Chinese TV manufacturer.
• TCL focuses on mid-to-high end audio/video products like miniLED, QLED, Android, and smart TVs, ranking second in the global TV market behind Samsung.
• The Company also produces air conditioners, refrigerators, smartphones, tablets, and smart home devices. A recent catch-up with the IR team at TCL’s Shenzhen Industrial Park Headquarters intrigued us and we decided to dig a bit deeper.

• This is our first report on internet information and services provider, Ziff Davis.
• The company has projected an optimistic growth outlook for 2024 as it reported a solid fourth quarter performance for the fiscal year of 2023.
• The company’s CEO, Vivek Shah expressed his confidence over the company’s business set up for notable growth in 2024 provided the depreciation 1.4% over the last two years.

• Hershey stock trading at 52-week low, making it attractive investment opportunity
• Drop in 10-year treasury yield making dividend-paying companies like Hershey more appealing to investors
• Challenges from new weight loss drugs affecting consumer appetite, but temporary dip creating discounted buying opportunity for strong brand

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.

• Great Wall Motor denied that many employees have resigned recently, but there many complaints from employees on social media.
• Many small companies grew strongly, such as Tuniu up by 140% and Kanzhun up by 46%.
• Weibo’s advertising revenue decreased, while most companies’ ad revenues have recovered.

• This is our first report on cloud-based solutions provider, Alarm.com.
• The company posted robust fourth quarter and full-year results for 2023 that surpassed expectations.
• The company’s software-as-a-service (SaaS) and license revenue reached $148.3 million in Q4, reflecting a 10.3% increase compared to the previous year.

• SPAC Activity returned to full pace in the past week, with several deals being announced, including with a Sustainable Fuels Maker and a Gold Producer from South Africa.
• Also, Trump tried to sell his stake in his social media company to Elon Musk as his SPAC deal stalled, and Fisker could be the latest EV De-SPAC to run out of cash. Read on to find out the latest about all things SPACs. 

• Sustainable Aviation Fuel (SAF) and clean biofuels producer XCF Global Capital is merging with SPAC BH3 Acquisition, in a deal valuing the combined company at $1.84 billion.