Equity Bottom-Up

• JD.com Inc (ADR) (JD US) reported a set of better-than-expected 4Q23 results yesterday, as the ADR rose 16% last night in US trading session. 
• The improvement in net profit margin showed that being more price competitive did not lead to lower margins. 
• I believe the key takeaway, aside from the resilient 4Q23 results and solid 2024 outlook, is the much improved shareholder return measures.

• China Vanke has caused jitters as it was reported to be closely watched by some insurers as it seeks to rollover some of its debt with insurers.
• It is reported that it has sufficient funding to repay its bond due on March 11th and is lining up a HK$1.5 billion syndication loan.
• Vanke warrants close monitoring as there is no sign of turning in its reducing contract sales, deteriorating cash position, shrinking financing ability. 

• Ryohin Keikaku (7453 JP) offers products covering all aspects of daily life.
• For FY08/23, Ryohin Keikaku reported consolidated operating revenue of JPY581.4bn , operating profit of JPY33.1bn, recurring profit of JPY36.2bn, and net income attributable to owners of the parent of JPY22.1bn.
• The company’s full-year FY08/24 forecast calls for operating revenue of JPY640.0bn, operating profit of JPY48.0bn, recurring profit of JPY46.0bn and net income attributable to shareholders of the parent of JPY33.3bn.

• The Smartkarma Corporate Webinar | Sasseur REIT: A Glimpse into China’s Outlet Industry on Feb 29 explored the Oulet sector with Sasseur REIT, a Singapore REIT focused on China Outlets.
• Sasseur REIT is 57.85% owned by the Sasseur Group operating China outlets since 2008, with 4 outlets in 3 major Tier-2 cities currently in the REIT, with room for expansion.
• Sasseur REIT is a play on China consumption and outlet operations. 2023 EMA rental income +10.7% Y/Y.  The 9.1% dividend yield stands out, at a relatively low aggregate leverage.

• Fu Shou Yuan (1448 HK) is likely to declare a special dividend in its FY23 result announcement as indicated in its board meeting notification.
• Net cash at end-1H23 amounted to 14.5% of its current share price, providing room for imagination of the amount of special dividends. 
• Besides raising its yield, returning excess cash should raise its ROE. This will also demonstrate the management’s confidence on the outlook and its financial position.

• This is our first report on transportation and fintech platform provider, Grab Holdings Inc.
• The company had a pivotal year in 2023, delivering on key goals and achieving profitability in adjusted EBITDA since the third quarter and earning a positive net profit in the fourth quarter.
• The company experienced a series of enhancements, including a successful rebuild of their mobility business which had been vastly impacted by the pandemic.

• Markets continue to be extremely bearish on HK/China, we look at the latest property market fundamentals and macro indicators, as well as company updates of our top picks
• In the latest budget, the HK government just announced to scrap all spicy measures on property market and eased mortgage policy
• With government support, we view the bottom of physical market is near.  For further re-rating, we need interest rate to go down, as well as resumed fund flows.

• The 72.5% decline in SITC International (1308 HK)‘s FY23 earnings is disappointing but should already reflected in the share price given the profit warning. Instead, this may be the trough.  
• Spot freight rates for key intra-Asia routes have already recovered since 3Q23, with the YTD level higher than the 2H23 average. The 1H24 result may show a sequential rebound.
• Even assuming flat YoY earnings in FY24, it still sits on a 9% dividend yield. The projected ROE of over 24% and net cash position mean 1.6-1.7x P/B undemanding.

• Of the six Malaysian banks screened, we keep quality play Maybank on the buy list and switch our prior buy RHB for CIMB
• CIMB is our value pick for its undemanding PE and PBV whilst second from top in post-provision profitability; its credit quality is improving, a positive trend we expect will continue
• We maintain quality pick Maybank as a buy for its relatively undemanding valuations, and strong balance sheet credentials in terms of credit quality and capital adequacy

• Zoom Video Communications, Inc reported financial results for its fiscal Q4 and full-year 2024.
• The company’s revenue for the Q4 reached $1.146 billion, up 3% YoY. Zoom’s Enterprise revenue grew by 5% YoY and formed 58% of total revenue.
• The company’s non-GAAP income from operations grew 10% YoY to $444 million.

For our next Corporate Webinar, we are glad to welcome Hua Hong Seminconductor’s Chief Financial Officer, Daniel Yu-Cheng Wang. 

In the upcoming webinar, Daniel will share a short company presentation after which, he will engage in a fireside chat with Smartkarma Insight Provider, Eric Wen. The Corporate Webinar will include a live Q&A session.

The Corporate Webinar will be hosted on Tuesday, 12 March 2024, 16:00 SGT.

About Hua Hong Semiconductor

Hua Hong Semiconductor Limited, an investment holding company, manufactures and sells semiconductor products. The company provides embedded non-volatile memory, standard logic and mixed-signal, radio frequency, power management integrated circuits, power discrete, and automotive solutions. It also offers foundry services; and design services comprising standard and customized IP development, full-custom layout design, and customer-specific integrated solutions, as well as design support and tape out services. In addition, the company provides multi-project wafer services; mask making services; and backend services, such as in-house testing, backside processing and dicing, and backend turnkey services, as well as assembly and testing services. 

Further, it engages in real estate development. Its products are used in consumer electronics, communications, computing, industrial, and automotive markets in the People’s Republic of China, North America, Europe, Japan, and other Asian countries. The company was founded in 1997 and is headquartered in Shanghai, the People’s Republic of China. Hua Hong Semiconductor Limited is a subsidiary of Shanghai Alliance Investment Ltd.

• India’s Credit Landscape has changed and is facing structural and regulatory challenges.
• The Indian regulator (RBI), particularly in its oversight of underwriting practices and the behavior of Non-Banking Financial Companies (NBFCs), is commendably proactive, positioning it ahead of the curve.
• We expect more such steps in other parts of the credit funnel. The recent crack down along with the stock underperformance is here to stay and possibility intensify. 

• Sakura Internet, a Japanese cloud provider, has seen a significant surge in stock price and market capitalization due to entry into AI cloud services.
• The company plans to invest in NVIDIA H100 GPUs for AI servers, expecting substantial demand but with uncertain revenue and profitability projections.
• Risks include concentrated ownership, lack of analyst coverage, potential shareholder pressure, and competition from larger cloud providers like AWS with advanced AI computing capabilities.

• We refresh estimates for ANA and JAL, and highlight we think the strength of FY24 makes it difficult for ANA to avoid an earnings decline in FY25.
• However, ANA’s superior recovery to JAL poses bigger questions for JAL as it revisits its medium term plan on 21 March
• Our deep dive on margin management at each carrier suggests a revenue problem rather than a cost problem at JAL; but without revenue improvements, it will have to cut costs

• China Power International (2380 HK)‘s Jan power sales showed a sharp 41.2% YoY growth. More importantly, this marks sustaining a solid MoM trend in the last few months. 
• Recovery of the hydropower generation is encouraging as this was a drag last year. Meanwhile, higher coal-fired generation will capture the better profitability of this segment.
• CPI’s strongest earnings CAGR in the sector has made its earnings multiples increasingly cheap over the next two years. After +15.7% YTD in its share price, there is further upside.

• UMP Healthcare (722 HK) delivered a slow start to FY24, with revenues up 2.3% YoY and profits down 63% YoY, due to sluggish demand in Hong Kong. 
• The company cut dividend for H1 FY24 by 25% to 1.3 HKD cents/share. Net cash on the balance sheet remained healthy at 265 mn HKD representing 64% of market capitalization.
• The company is implementing stringent cost control and we believe that a slow turnaround and a 9-10% dividend yield is very probable at these levels. 

• A highly unpopular acquisition driving investors and sell-side analysts up the wall. Forward Air is OVERSOLD on almost all technical indicators and valuations are the lowest in its history  
• Our analysis suggests it is not all that bad, the business will still be profitable and generate positive free cash flow 
• Our fair value of USD59.50 (+97% UPSIDE) is derived by 2x current Book Value. A potential double-bagger, will be rewarding for the patient investors     

• First a new holding, Nameson Holdings (HKG:1982). A vertically integrated knitwear and fabrics manufacturer with most of its production base in Vietnam and some of it still in China.
• They expanded to Myanmar, which did not work out so well, so they had to take significant write-downs and restructuring costs recently of 243 million HK$.
• This somewhat obscures their true earnings power.

• The sales in January 2024 were the lowest during the period of 2022-2024, indicating a likely downtrend for the first quarter of 2024.
• Demand is expected to be flat or slightly increase in 2Q24F for GlobalWafers, which is encouraging.
• The market for 12″ raw wafers is expected to have a more stable demand-supply balance, while raw wafers of 8” and smaller sizes could experience reduced demand in 1H24F.

• Redbubble was a bubble. On the wings of pandemic mania, the stock price increased 13 times from March 2020 to January 2021.
• Reaching a 1.9B market cap. Today, the situation looks quite different.
• The stock is down 93% from its highs of 7 AUD and currently sits at 0.

• Tata Motors restructures, separating passenger and commercial vehicle businesses into distinct entities to unlock value in electric vehicles and Jaguar Land Rover unit.
• Streamlines operations, enhances shareholder value, and capitalizes on growth opportunities in passenger and commercial vehicle sectors.
• Offers investors specialized entities, unlocking hidden value, showcasing proactive adaptation to market changes, and positioning for sustainable growth in the automotive industry.

• Sea (SE US) has completed a full cycle of growth followed by a phase of profitability improvements/cost-cutting.
• Although substantial cost reductions have been implemented, these efforts have mainly focused on fixed costs.
• With marketing efficiency unchanged and significant improvements in gross margin difficult, the company appears no closer to achieving stable profitability than it initially was.

• Sea Ltd (SE US) released 4Q2023 and FY2023 results with a full-year net profit but another loss in 4Q but QoQ improvements for e-commerce and digital financial services. 
• E-Commerce core market growth rates where impressive, with strong growth momentum with Brazil seeing large profitability gains, whilst overall Shopee is gaining share with the additional benefits from greater scale.  
• Digital Financial Services saw a significant uptick in its loan book and profitability, whilst management pointed toward 2H2024 profitability for Shopee. Management is pointing towards 2024 being another profitable year. 

• The current “higher for longer” interest rates in the US and other developed markets adds to the Bank of Japan potentially ending its negative interest rate policy
• Domestically, news reports suggest that the BoJ’s 2% inflation target is increasingly likely to be met in the short term, which further drives the potential normalization of interest rate policy
• Growing expectation of the BoJ’s negative interest rate policy exit adds upside to Japanese bank shares, especially those geared into higher domestic interest rates; we like Resona, Mizuho and Concordia

• Yesterday, Haidilao International Holding (6862 HK), the largest hotpot chain in China, announced that the company will introduce franchise model as a new way to support growth. 
• Haidilao’s move into franchising should directly benefit Yihai Int’L Holding (1579 HK), the affiliate company that supplies hotpot condiments to Haidilao. 
• Yihai is trading at an inexpensive 12x 2024 PE compared to a historical average of 32x since listing.

• Despite margin pressure, Sheng Siong (SSG SP) delivered resilient earnings for FY23. Revenue was up 2.3% YoY, and profits were up 0.3% YoY. 
• The company guided it had opened two additional stores at the start of 2024 (2023 end: 69), and six more locations were up for tender in 2024. 
• The stock trades at 17x FY23, with a 4% dividend yield and 15% of the market cap in cash. Margin pressure due to inflation will be a headwind in FY24. 

• VinFast is a fast-growing electric vehicle manufacturer based in Vietnam, founded in 2017 by Vingroup and billionaire Pham Nhat Vuong
• The company has plans for global expansion and aims to have vehicles in 50 markets by the end of 2024
• VinFast has a $16 billion market cap and recently completed a SPAC merger that raised $239 million, but its financial ties to Vingroup raise concerns about its independence

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.

• TLNE announced the sale of Cumulus Data for a valuation higher than we were expecting and includes a long-term power purchasing agreement
• TLNE’s management has also mentioned an ongoing sales process for TLNE’s assets in Texas, which could generate additional value.
• TLNE sold Cumulus Data for $650 million to Amazon Web Services (“AWS”). TLNE sold the assets the Company had situated adjacent to Susquehanna nuclear power plant

The key feature of Primary Health Properties’ (PHP’s) 2023 results was the further acceleration in rental uplifts, rising at the fastest pace for 15 years. This is driving organic earnings growth to fully cover progressive dividends, which are now in the 28th year of unbroken increase.

• Wrkr Ltd (ASX:WRK) offers compliance solutions for Australian superannuation contributions and payroll including member onboarding, super payments, messaging and employee validation.
• WRK has reported a H1 FY24 adjusted EBITDA loss of $0.53m, half that of H1 FY23 and in line with RaaS estimates.
• The result benefitted from both operating leverage (43% revenue growth against a 6% increase in operating costs) and some reallocation of employee costs to capitalised product development.

• Investing in semiconductors can be pretty simple if you let it be.

• At a high level, I believe you want to invest in the secular at a decent price or invest in places where there are unwarranted dislocations.

• Sometimes the entire ecosystem says one thing and the stocks say another. Usually, the ecosystem is right.

• Alibaba closed four more supermarkets at the end of February.
• Alibaba is moving retailers from the discount app back to Taobao.
• Li Auto’s deliveries increased by 62% YoY in the first two months of 2024.

• NetEase reported C4Q23 top line, GAAP operating profit and GAAP net income (4.8%), (16%) and (9.0%) vs. our estimates, and (3.6%), (12%) and (6.8%) vs. consensus， mainly due to..
• The positive, however, is the acceleration of launch of <Naraka Mobile> by 1-2 quarters. Our estimate of the gross billing remains the same;
• We remain optimistic about the upcoming pipeline, and we raise our TP to US$122. Our new TP implies 15.4X PE, which is 12% above current price.

• Recently, a friend of mine asked me why I own positions in Markel and Brookfield, as they do not align with my typical investment style of small niche companies trading at attractive free cash flow yields. 
• I consider both companies as alternatives to index funds, benefiting from the expertise of two exceptional capital allocators, Tom Gayner and Bruce Flatt, at no additional cost.
• Over time, if my investment process proves itself as sound, the positions in Markel and Brookfield should naturally decrease in size.

• Although people acknowledged BeiGene’s performance, it still makes us uneasy about a long-standing question: When will BeiGene be profitable?With current cost structure, there’s at least two years left until breakeven. 
• BeiGene’s internationalization only proves decent increase in revenue, but it doesn’t yet verify its profitability.SG&A expense ratio completely deviates from the normal state of Biotech with over US$2 billion sales.
• If BeiGene indeed has a plan to turn loss into profits, besides maintaining a high growth rate in sales, reasonable optimization in cost and expenses is the most basic “sincerity”.

• Adjusting for impact of LNY timing, January numbers still seem firm
• Headline February / LNY 2024 traffic growth also appears solid
• Our thesis remains that tourism recovery takes longer, strongest in H124

• Vipshop reported C4Q23 top-line, non-GAAP EBIT, and GAAP net profit in-line, 6.3% and 7.0% vs. our estimate, and 4.5%, 20.5%, and 23.9%, vs. consensus, respectively;
• We expect the two themes of “live for the moment” consumption and consumption downgrade to persist in 2024. The former drives apparel spending, while the latter drives consumers to Vipshop
• We maintain BUY and raise the TP to US$ 20.4, implying 7.7x CY24 non-GAAP P/E, and 4.9x CY24 EV/Earnings.

• Director filings and buyback momentum return Singapore Technologies Engineering (ST Engg) led the buyback consideration tally, repurchasing 500,000 shares at an average price of S$3.97 each on Feb 29.
• On Feb 26, LHT Holdings managing director Yap Mui Kee acquired 61,000 shares at an average price of S$1.05 per share.

• China Travel International Investment Hong Kong (308 HK) has an impressive 2024 CNY with the volume and revenue of its tourist attractions increased by 46% to 123% YoY.
• Relative to 2019 CNY, most businesses have fully recovered. 1H23 earnings is the highest since 1H20 and the market may have underestimated 2H23, providing upside surprise potential. 
• The share price is still some 30% below the peak in late-2021 when earnings have yet to recover. Also, its net cash now equals 19% of the share price. 

• Indo Tambangraya Megah (ITMG IJ) reported its Q4 2023/FY23 numbers with revenues down 46%/35% YoY and profits down 58%/69% YoY on declining coal prices (113 USD/ton Vs 192 USD/ton) .
• We expect spot coal prices to remain range-bound between 130-150 USD/ton, resulting in company profits ranging between 350-500 mn USD (4x-6x PE range) with dividend yield ranging from 11%-15%.
• The company also has a cash buffer of 850 million USD, roughly 45% of the current market capitalization. 

• In the current challenging environment, investors should prioritize pharmaceutical companies with abundant cash flow and Biotech with diversified funding sources, as their safety margin is much higher.
• After the “clamor of consumer upgrading” fades away, we will eventually realize that the so-called pricing power has never belonged to anyone or any enterprise, but always to consumers.
• Hengrui is overvalued. There’re still around RMB5 billion generic drugs yet to enter VBP scope. So, the assumption that all negative effects of VBP have cleared up is not correct.

• TSMC: +22.9% ADR Premium is Near an All-Time High; Long Taiwan Shares vs. Short the ADR
• UMC: 2.2% Premium; Flipped Positive From a Discount; Likely to Contract
• ASE: +13.3%; Short the Historically High Spread at the Current Level

• Philippine Stock Exchange (PSE PM) reported a slow Q4 2023/FY23, with revenue down 9.5%/8% YoY and profits down 30% YoY for Q4 FY23 but up 4% YoY for FY23. 
• We are excited by the recent passing of a bill to reduce the tax on stock transactions and a proposed law for lowering the tax on dividends for non-residents.
• Trading at 19x FY24e with a 5% dividend yield, EBITDA/PAT margins >55%/40%, and 25% of the market cap in cash with an acquisition angle, this stock is a must-watch

• CIMC Vehicles Group (301039 CH) (CIMCV) is a leading global manufacturer of semi-trailers and various truck bodies that is the mainstay of heavy ground goods transport  
• 9M23 earnings surged by 216% and beat consensus, scope for further earnings upgrade as the business and management outlook statement is very positive   
• Our target price of CNY12.50 (+31% UPSIDE) is based on 2024 PE 15x – a 10% discount against the industry leader Caterpillar 

• In the Q4 earnings, Merck & Co.
• reported a strong financial performance, underpinned by a robust demand for their innovative portfolio, including Keytruda, Welireg, and Gardasil, among others.
• The company has embarked on various collaborations further bolstering its product pipeline with a promising line of innovations.

• This is our first report on e-commerce player, Carvana.
• The company’s Fourth Quarter 2023 Earnings included an optimistic forecast regarding the company’s economic performance.
• The company’s fiscal year GPU (Gross Profit per Unit) augmented by nearly $1,000, setting a fresh record and exceeding their previous best in 2021.

• Altria Group’s recent earnings call has raised important topics worth considering for investors.
• The company, known for its strong position in the tobacco industry, showed a clear intent to diversify into smoke-free product categories, such as heated tobacco, oral tobacco, and e-vapor.
• These steps are seen as a strategic move to cushion the company from declining cigarette volumes and broaden its consumer base, thereby improving its long-term growth prospects.

Key points

• FFB Bancorp is expanding its reach across California by offering remote banking services
• The bank has a niche market in payment processing as an acquiring bank, generating additional income
• CEO Steve Miller, with a diverse background in banking, is leading the company towards a larger market share role in California and beyond

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.

• Insulet Corporation reported strong Q4 2023 results, marking its eighth straight year of 20-plus percent revenue growth.
• The company’s automated insulin delivery system, Omnipod 5, played a significant role in its financial success as it generated $1 billion in revenue in 2023.
• The achievement of approximately 425,000 global customers using the Omnipod platform represented a growth of around 25% from the previous year, including almost 250,000 using the Omnipod 5.

• Cash Converters International (ASX:CCV) is a consumer finance company operating as a service provider, owner and franchisor of second-hand goods and financial services stores in Australia and internationally.
• CCV has delivered a solid H1 FY24 with revenue growth of 34% to $191.5m (in line with RaaS $192.5) and EBITDA growth of 13% to $32.6m (15% ahead of RaaS $28.4) and NPAT of $9.8m (7% ahead of RaaS $9.2m).
• The gross loan book has grown 15% to $294m, which is all the more impressive as the business transitions away from SACC products due to regulatory change, more than offset by growth in all other products, domestically and internationally.

• Celltrion Inc (068270 KS) has reported 12% YoY growth in its core business of biosimilars in 2023. Growth was mainly driven by new portfolios including Remsima SC and Yuflyma.
• Operating profit and operating margin improved slightly YoY, led by an increase in high-margin biosimilar sales. Biosimilar products contributed 67% of total revenue in 2023, up from 57% in 2022.   
• The company is targeting more than 60% global sales growth to KRW3.5 trillion in 2024. Celltrion is eyeing KRW1.6 trillion EBITDA and more than 40% EBITDA margin in 2024.

• Xinyi Glass Holdings (868 HK) reported FY23 results, with net profit up 5% yoy and sales up 4% yoy. 
• The company announced a final dividend of HKD0.37 per share, resulting in a full year dividend of HKD0.63 per share, which is a yield of 8%. 
• Overall the results look resilient, with auto glass segment a bit weaker than expected and float glass segment stronger than expected. 

• Baidu (BIDU) reported C4Q23 top line, non-GAAP operating profit and GAAP net income inline, 9.4% and (43%) vs. our estimates, and inline, 8.2% and (46%) vs. consensus. 
• We believe LLM is fundamentally an upgrade of search; further, BIDU is a 2B/general AI play in China, a country filled with 2C/specialized AI players;
• We cut our TP for BIDU from US$157 to US$116 and maintain BUY.

• The Wingstop Fiscal Fourth Quarter and Full Year 2023 Earnings highlighted the company’s substantial progress with its strategies involving same-store sales growth, brand partner returns, and growth acceleration.
• An eye-catching declaration from Wingstop was that 2023 was its strongest financial year on record, demonstrated simultaneously through its industry-leading results and marking its 20th consecutive year of same-store sales growth.
• Furthermore, Wingstop managed to grow to over $3.5 billion in system-wide sales- a growth spurt of 27%- coupled with the opening of a record-breaking 255 net new restaurants..

• Copart, Inc, a leading provider of online vehicle auctions, recently disclosed its second-quarter financial results for the fiscal year 2024.
• The recorded statements offered valuable insights into the company’s operational and financial advancements during the period.
• In the insurance business, the company reported profitable growth despite slight disturbances in the comparison metrics, primarily caused by significant catastrophic events in the previous year, including Hurricane Ian.

• Booking Holdings recently reported solid Q4 and full-year 2023 results due to global leisure travel demand resilience.
• Room nights grew by 9% YoY, and revenue of $4.8 billion alongside adjusted EBITDA of $1.5 billion exceeded expectations.
• Non-GAAP earnings per share also grew by 29% YoY, attributed to a reduced share count from the previous year.

• The fourth quarter results from TRS were not up to our expectations after a recovery in packaging was subdued by an unexpected significant decline in the specialty business
• The specialty business has been a source of sales growth for the past nearly three years without any sign of slowing down until Q4. 
• TRS reported fourth quarter sales of $209.6 million compared to our forecast of $247.4 million. The biggest delta was from specialty where sales missed our estimate by $26 million

• Cheniere Energy, Inc.
• has reported substantial operational and financial attainments for Q4 and the entire year of 2023.
• The company produced a record 637 LNG cargoes, with a total production amounting to 45 million tons, in line with their forecast.

Newly confirmed strong finances (just 0.6x net debt/adjusted EBITDA including convertible loan) and continued Nordic market resilience, allied with multiple growth initiatives, are justifiably reinforcing Scandic’s confidence. Moves into economy (Scandic Go) and Germany mark a widening and accelerating hotel pipeline with clear scope to grow (4% of the estate vs pre-pandemic 11%), while a step-change in digitalisation via the new Oracle OPERA Cloud and enhanced loyalty programme are expected to drive material efficiencies and guest engagement. Financial flexibility should allow the company to address concerns about the maturity of the convertible loan (SEK1.2bn) in October. Consensus FY24 pre-IFRS 16 EBITDA forecast of SEK2.5bn give an EV/EBITDA of c 4.7x.

• Quanta Services, Inc., a provider of specialized contracting services, reported fourth-quarter and full-year results for 2023 reflecting double-digit growth in revenues and earnings, pointing to robust demand and solid execution.
• Total year-end backlog was $30.1 billion, indicative of the company’s enduring client relationships and momentum entering 2024.
• Record revenue was achieved 6 out of the last 7 years along with 6 consecutive years of record-adjusted EBITDA and 7 years of continuous record-adjusted earnings per share, aided by Quanta’s operational and financial platform backed by over 50,000 dedicated employees.

• This is our first report on Moderna, Inc., a renowned biotechnology company utilizing mRNA technology in the development of therapeutics and vaccines.
• The company entered 2024 optimistic despite challenging 2023 results.
• The company’s revenue for 2023 stood at $6.1 billion, with a net loss of $4.7 billion.

• Following an Staits Times article this week – or perhaps just a coincidence – property play Wing Tai Holdings (WINGT SP) popped 8%. 
• Yesterday’s close of S$1.47/share, compares to its book value of S$4.24 (as at 31 Dec 2023). Cash on hand is S$684mn against borrowings of ~S$770mn.
• And the Cheng family has been buying up shares, almost every day since last September. That stake is currently 61.45%. Another Wing Tai Malaysia (WING MK) privatisation in the making?

• AEM (AEM SP) reported FY23 results which showed a decline of 45% in annual revenues and a small loss on the net income line. Guidance is only given for 1H24.
• Senior management will forego all bonuses, the CFO departs and the old CEO is coming back as a consultant. AEM’s stock closed down 20% after the FY23 results publication.
• A potential new Trump presidency would push an “America First” agenda likely benefiting Intel and indirectly AEM in a big way.

For our next Corporate Webinar we are glad to welcome iFAST’s Executive Director and Director of Corporate Communications, Mr Jean Paul Wong. 

In the upcoming webinar, Jean will share a short company presentation after which, he will engage in a fireside chat with Smartkarma Insight Provider, Alec Tseung.

Alec will also be providing an industry overview, featuring landscape commentary and returns analysis. The Corporate Webinar will include a live Q&A session.

In the spirit of giving back to our community, one of the attendees will also be awarded an Amazon Kindle as part of our exclusive lucky draw. 

The Corporate Webinar will be hosted on Thursday, 7 March 2024, 19:00 SGT.

About iFAST Corporation 

iFAST Corp (stock code: AIY) is a wealth management Fintech platform, with assets under administration (AUA) of S$19.83 billion as at 31 December 2023. Incorporated in the year 2000 in Singapore and listed on the SGX-Mainboard in December 2014, the Group is also present in Hong Kong, Malaysia, China, and UK. Through the years, the Group has built a well-established Fintech ecosystem connecting its product providers and clients. iFAST Corp holds the requisite licences in the various jurisdictions it operates in to provide a wide range of products and services.

As at end December 2023, the Group offers access to over 21,000 investment products including over 13,000 funds from over 320 fund houses, over 2,400 bonds, stocks and ETFs listed on the Singapore, Hong Kong, US, Malaysia, UK, and China A stock exchanges, as well as services including pension administration solutions, online discretionary portfolio management services, research and investment seminars, Fintech solutions, and investment administration and transaction services.

• In this insight, we discuss the alpha generation through companies that announced share buybacks in Korea in January and February 2024.
• We provide a list of 22 stocks in the Korean stock market that have announced share buyback programs in the past two months.
• Major companies that have announced share buybacks in Korea in the past two months include Shinhan Financial, Hyundai Mobis, and Samick Musical Instruments. All three have outperformed the market. 

• Teikoku, a stable disaster equipment leader, is undervalued due to excessive cash and cross-holdings.  
• Regulatory pressure, industry trends, and potential Hulic asset sales create an opportunity to unlock hidden value.
• Despite fair current pricing, potential share repurchases and improved capital allocation offer up to 40% upside.

• Competition in the High Bandwidth Memory (HBM) space is intensifying; Micron shares have rallied after it announced HBM3e mass production; SK Hynix has outperformed since its earnings release.
• Nvidia’s H200, its most advanced chip for generative AI, leans heavily on HBM3e memory for its increased performance vs. the previous H100 generation. Memory leaders are key for Nvidia’s success.
• Taiwan’s Nanya Tech appears to be watching HBM competition between Micron, SK Hynix, and Samsung from the sidelines; can its shares get back into the game?

• Vietnam now accounts for more than 50% of production replacing China
• China production is less than 25% of overall capacity in 2023
• Reshoring and production of higher end “Athleisure” shoes is increasing margins for Stella International (1836 HK)
  

• Mediatek Top Performer; Showcasing New AI Capabilities at the Mobile World Congress in Barcelona
• Memory Monitor: Competition Is Hotting Up for Key Memory Chips Nvidia Depends On; Nanya Left Out?
• Novatek (3034.TT): It Has Been Qualified by the IPhone 16 for OLED Driver IC

• GoTo held a public expose at the IDX to update investors on latest developments including the Tokopedia sale but also to outline its key strategies for 2024. 
• GoTo will start to receive the service fee from Tokopedia from 1st February despite that monitoring is ongoing by the Ministry of Trade although that is now 75% complete.
• GoTo’s focus will be on affordable products, some new premium offerings, and increasing higher take rate lending products through GoPay, with incoming fees from Tokopedia providing additional funding going forward.  

• Plover Bay Technologies (1523 HK) reported an 8.5%/ 24YoY increase in revenue/profits (%). Profits increased due to a net margin expansion of 370 bps to 29.8%. 
• The company had positive news in January when Peplink announced that it had agreed with SpaceX’s Starlink to become an authorized technology provider using Peplink SD-WAN routers.
• Trading at 11x/10x PE FY23/FY24e, with an 8.2% trailing dividend yield and ~60% ROE, this is another growth/dividend gem worth exploring.

• Japan’s Nikkei Stock Average has surged past its 1989 peak, fueled by global investor interest, corporate reforms, and innovative investment initiatives like the Nippon Individual Savings Account (NISA).
• This resurgence marks a significant milestone in Japan’s economic landscape, reflecting renewed investor confidence, structural reforms, and potential growth opportunities in the market.
• The Nikkei’s surpassing of its previous peak signals a shift in perception towards Japan’s market potential, prompting investors to reconsider the country’s economic trajectory and explore new avenues for investment.

• Astra International booked record earnings for 2023 despite some softening of commodities, driven by strong performance from the auto division and financing plus the strong performance from motorcycles. 
• Astra has continued to invest in growth areas of the Indonesian economy with investments last year in the EV battery ecosystem, increased exposure to healthcare, and investment in data centres.
• Management flagged a potential 2H cyclical downturn but it is well-diversified enough to weather this. Valuations look attractive on 6.8x FY2024E PER and with a 6.6% dividend yield.

• Recent newsflow and company results suggest China outbound travel is on track to recover to pre-pandemic level by the end of this year.
• China airports have different exposures to outbound travel, which largely determines the scale of their duty-free shopping business and earnings upside amidst this recovery cycle.
• Beijing Capital Airport offers best risk/return profile among listed China airports in our view as current valuation does not fully capture even a conservative scenario of recovery in outbound travel.

• China announced game approval for the Feb batch. The number of games approved remained at a higher level than 2023.
• The pace of China game approval appears to be accelerating, to the same level as pre-tightening.
• Netease gets one game approved but we don’t see that the acceleration of game approval benefits big names proportionally.

• LI Auto reported C4Q23 top line, non-GAAP operating profit and GAAP net income (6.2%), 13% and 81% vs. our estimates and 4.9%, 52% and 102% vs. consensus.
• We believe LI can beat our delivery estimate on exports, but can also miss the consensus on gross margins if its 2024 volume target is met by sedans;
• We raise our TP by US$5 to US$52 and reiterate BUY.

• Despite average weights falling from over 6% in 2020 to under 2% today, 73% of EM funds remain invested in Alibaba.
• The make up of the investor base has changed, with a rotation between high growth investors (out) and Value investors (in).
• Of the 73% of current holders, the core portfolio weight range sits between 1.5% and 3%, with the most bullish topping out at 5%+

• Uchi Technologies (UCHI MK) reported a solid Q4FY23/FY23 result, with revenue up 18%/13.2% YoY, operating profit up 28%/21% YoY, but profits up 9%/8.3% YoY (due to increased taxation).
• For FY24, the company conservatively guided a mid-single-digit decline in revenue growth. In FY23, the company guided flat USD revenue growth (but delivered 9.2% YoY).
• Assuming the current currency and guidance, the stock trades at 14x FY24e with a yield of 7% (assuming a 100% payout similar to last two years) and ROCE above 60%. 

• Sido Muncul‘s recent results reflect a sharp recovery in its core herbal and F&B business as increased sales volumes have brought scale benefits to its iconic products. 
• The company saw recovery in both sales and profits, with margins improving considerably  in 4Q2023 due to increased volumes and lower raw material prices. 
• Tolak Angin remains an iconic brand catering to all demographics with 70% leadership of its category, with Kuku Bima being the leader in powdered energy drinks. Valuations appealing versus history. 

• OpenAI, founded in 2015 as a nonprofit research lab, has transitioned into a for-profit entity with ambitious goals of creating artificial general intelligence to benefit humanity.
• The company’s CEO, Sam Altman, is focused on solving the problem of super intelligence and has plans to set up his own semiconductor manufacturing pipeline and extend human lifespan.
• OpenAI’s business model now involves catering to enterprise customers to generate revenue, and they face challenges in balancing their grand mission with the need for significant investment.

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• A Profit-Oriented State Owned Enterprise that is walking the walk.
• Management incentives are aligned with shareholders, a rarity in China.
• Plenty of upside remains despite the market outperformance to date

• Bloomberg reported that Samsonite (1910 HK) is considering several options, including going private, and there are several suitors including from buyout firms  
• Share price has surged by 14% in the morning session. Stock is still very cheap, at 10.5x PE, 7.5x EV/EBITDA with an impressive ROE of 30%
• Our quick take values Samsonite at HKD34/share, based on its forecasted +1 year earnings multiplied to its average long-term PE of 15.5x 

• We expect Baidu to report C4Q23 revenue, GAAP op. profit and GAAP net income inline, (2.3%) and (4.5%) vs. consensus.
• The slight bottom-line miss was mainly attribute to the increased marketing costs related to user acquisition. Baidu cloud revenue is robust due to AI product stimulating demand. 
• We cut our target price to US$146 for the spendings related to the construction of future e-commerce business but maintain BUY for its cheap valuation.

• BFI Finance Indonesia saw a marked turnaround in new bookings and a declining NPF ratio in 4Q2023, as its business recovered from the malware attack in May last year.
• The company has started to be more aggressive in non-dealer 4W space but remains cautious on 2W. Write-offs peaked in 4Q2023 and will decline in 2024, leading to lower CoC. 
• BFIN will launch a tripartite collaboration with GoTo and Bank Jago which will help to drive future bookings growth. Valuations remain attractive with BFIN trading in 2.0x PBV 

• We publish a deep dive on historical margin management at Cathay Pacific following Bloomberg reports that Air China is considering raising its 29.99% stake.
• We see Cathay’s consistent underperformance of the global industry as due to structural disadvantages competing against lower cost competitors without the benefit of attractive joint ventures or M&A.
• Our deep dive comparing margin generation to ten major global peers highlights weak pricing power without sufficient offset from staff cost/other cost efficiencies as the key problem.

• MTAR Technologies (MTARTECH IN)  is a precision engineered company that caters to customers in clean energy, Space, Defense sectors, etc. 
• The company has done well over the last few years in terms of securing business, however there are concerns on the margins end, working capital and cash generation. 
• There also exists a high business risk in terms of customer concentration since more than 75% of the revenues (F23) come from one single entity.

• Matahari Department Store (LPPF IJ) reported another slow set of results in 4Q2023, as it saw slower demand and continues to clear aged inventory. 
• The company is well-prepared for the upcoming Lebaran season with more conservative inventory levels. It will also see the benefits of new brands coming on stream this year. 
• Matahari Department Store will open 4-6 new stores in 2024 but close 10 underperforming stores, with a continued focus on new DP brands like SUKO. Valuations remain attractive. 

• Comfortdelgro Corp (CD SP) share price has underperformed its tourism related transport operator peers.
• Key drivers are still strong, including the expected influx of Chinese tourists from visa-free travel arrangements.
• Valuation is still compelling, and it is not too late to own it.

• Luckin Coffee reported 4Q23 revenue/non-GAAP NI in-line/(39.8%) vs. our estimate due to (1) extra winter subsidies; (2) rental cost from new stores; (3) more operating expenditures.
• We view the non-GAAP NPM decline to 5.1% in 4Q23 as temporary and outlook for sequential improvements in 1H24 from (1)ASP rebound from easing competition, (2)efficiency improvement in rental cost
• We think Luckin’s profitability outlook is intact and maintain BUY rating, but lower TP by US$2 to US$41 to factor in the rising cost.

• Speculations on Air China Ltd (753 HK) seeking control of Cathay Pacific (293 HK) reappeared recently. We think a change in CX’s ownership is just a matter of time.
• CX has been a more important profit contributor to Air China after the pandemic, and depends on pricing, Air China is expected to benefit from such acquisition.
• Both are trading on 0.5SD below their 5-year P/B average and we prefer CX in the short term, but Air China looks to be a better long-term choice. 

• Inmobiliaria Colonial Sa (COL SM), with a quality portfolio, trades at 55% discount to NAV. Lacking short-term catalysts, buy on improving earnings guidance, rate cuts and favorable market conditions.
• Colonial probably has one of the best-quality office portfolio in Europe, with the great majority of its assets are situated in core areas of Paris, Madrid, and Barcelona.
• Colonial offers a 24.5% upside, which implies a 40% discount/NAV. The shares offer a 5.26% 2024e dividend yield (source: IBES), which I consider sustainable over time.