Equity Bottom-Up

• It is well-known that Alibaba (ADR) (BABA US) is cheap (9x FY24 PE, fiscal year ending March; 8x FY23 free cash flow; net cash 25% of market cap).
• Taking into account all of the major moving parts, I believe Alibaba can now be categorized as a good value stock. 
• Shareholder returns through buyback and dividend, minus stock-based compensation in 2023 calendar year equal to around 5% yield.

• TSMC expects the foundry, semiconductor, electronics, industrial technology, and global GDP to be $0.25 trillion, $1 trillion, $3 trillion, $12 trillion, and $145 trillion, respectively, in 2030F
• Transistor technology is constantly evolving, and FinFET architecture will be followed by Nanosheet and others.
• In the transition, the automotive market belongs to IDM companies, but the utility of ADAS (Advanced Driver Assistance Systems) could fall under Foundry territory.  

• Indiabulls Housing’s Right Issue offers a unique opportunity to earn higher returns on smaller investment. 
• Indiabulls Housing is at the cusp of a turnaround: detaching its old identity maligned by various governance issues 
• Turnaround + Special Situation Bet – A potential opportunity to make outsized returns owing to the lower initial investment requirement in a company undergoing significant turnaround

• In 4Q23, revenue grew by 136% and operating profit was significantly higher than the market consensus.
• Li Auto grew the most rapidly among the top-ten Chinese NEV sellers.
• We believe Li Auto will be one of the winners after the market gets more concentrated. Upgrade to Hold.

• Alibaba plans to provide operational services to third-party sales broadcasters.
• Xpeng will hire 4,000 employees and raise research budget by 40%.
• Tuhu Car expected that its net profit will turn positive in 2023.

• Grab Holdings reported nothing short of an impressive set of results for 4Q2023, booking another positive adjusted EBITDA but also an actual net profit and positive adjusted cash flow. 
• The company saw its mobility GMV come in above pre-COVID levels and deliveries GMV growth reaccelerated, while also reaching positive adjusted EBITDA for a second quarter.
• Grab aims to deepen its engagement with users through affordable and premium offerings and a laddered pricing approach, with additional focus on financial services and advertising to come in 2024.

• Post FY23 results in mid-February, Appier’s stock exhibited significant volatility, despite robust financial performance.
• We believe that Appier is a beneficiary of continued growth in ecommerce and increasing ubiquity of AI solutions for marketing.  
• Appier trades at a significant discount to global peers and domestic SaaS companies, suggesting significant upside

• 4Q23 results beat expectations with record revenues and profits and announced a maiden cash dividend of USD8.75/share (0.35% yield)
• But, share price plunged by 10% on soft guidance of 4-6% YoY growth in room-night booked in 1Q24, due to the impact of high-interest rates and the ongoing wars 
• Good opportunity to buy on dips, stock trading at ~20x FY24 PE, ~18% discount to LT mean. Plus, there is a balance USD7.5b (6.1% shares in issue) of share buybacks  

• In 2023, Bumrungrad Hospital Pub Co (BH TB) reported 23% YoY revenue growth to THB25.6B, driven by 32%, 17%, and 11% YoY growth in international, expat, and Thai patients, respectively.
• Driven by high margin international patients, increasing inpatient revenue, and continued cost management, gross profit, EBITDA, and net profit margin expanded in 2023.
• Unrest in Middle-East remained an overhang on BH’s shares. However, revenue from Middle-East patients increased at 23.3% in H2 2023 compared to H1 2023.

• Some global investors are urging Chinese private education giant XJ International Holdings Co. Ltd. to redeem half of its $350 million in bonds before maturity, as the creditors fear the Hong Kong-listed firm may intentionally default on repayments.
• The bonds are due in 2026, but the creditors asked for the early redemption to be completed by March 2 in a letter sent to the Chinese company last month by their legal adviser, Chicago-headquartered global law firm Kirkland & Ellis LLP.
• The creditors are a group of large international investors who collectively hold no less than $154 million, or about 50%, of the bonds’ outstanding principal amount, according to the letter seen by Caixin.

• TSMC: +17.3% Premium, High Double Digit Level Persisting Since CNY
• UMC: -1.5% Discount, We Believe Spread Biased to Go Positive
• ChipMOS: +0.6% Premium, Collapsed from +4.6%. Now Within Typical Range.

• Trip.com reported a strong set of Q4 and FY23 earnings results last week
• Company has held the line on SG&A expenses; look for strong H124 growth
• We believe shares are cheap and recommend investors buy below US$43/ADS

• ChipMOS Margin Rebound Sputters, Guidance Implies Margins Could Remain Under Pressure
• Valuation Appears Precarious In Light of Latest Results and Guidance
• Valuation Appears Precarious In Light of Latest Results and Guidance

Key points

• Aritzia has potential for significant share price upside, with potential returns between 170% to 344% over a 3-year period
• The author has previously exited the stock at $50 but is considering going long again due to the brand’s continued strength despite recent challenges
• The analysis questions whether Aritzia’s targets for fiscal year 2027 are reasonable and raises concerns about the company’s potential for future 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.

• Luckin Coffee (LKNCY US) concluded FY23 with a 203.3% surge in non-GAAP net profit to Rmb3.2bn, benefiting from higher store count and monthly transacting customers.
• Luckin plans to lift store count by at least 23%, with total to reach over 20,000 in FY24. Product innovation, promotional discount reduction, and better store efficiency are profit drivers. 
• Net cash reached Rmb3.8bn, or 7% of market cap. With a consensus EPS forecast of 28% CAGR in the next two years, its 15.1x and 11.7x PERs are not stretched.

• A bombed-out sector down 80% from the peak is worth another look
• Weaker companies have exited the industry or have already gone under 
• The sector ETF has a good risk reward  with catalysts ahead

• Fang Weihao’s departure means PAGD’s strategic transformation failed. The business model of being a “vassal” of Ping An Group seems hard to bring high valuation due to “discounted” growth potential.
• PAGD is at a crossroads. The question is which development path will the new CEO choose – Follow Fang Weihao’s strategy or return to the traditional Internet healthcare business model?
• Both directions have painful costs that investors will not be happy with. Therefore, we recommend that investors remain sober and rational in the face of the bullish view on PAGD.

Key points

• AI is a rapidly growing trend in the global market, with Taiwanese manufacturer AVC experiencing significant growth in their stock value.
• AVC has shown strong financial performance in recent years, with impressive average revenue and margin metrics.
• The company is expected to continue its growth trend in 2023, with higher margins than historical averages, as the impact of technology and COVID has been beneficial for AVC.

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.

Key points

• Honeywell CEO optimistic about strong performance of long-cycle Aero business, particularly aero cycle
• Predicts double-digit growth in 2024 and sustained high growth rates until 2030
• Airbus experiencing strong orders and growing backlog, production challenges in matching supply with demand indicate tight aircraft market

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.

• Human services company Millennium Services Group Ltd (ASX:MIL) has released its H1 FY24 interim result, with both revenue (pre-disclosed) and EBITDA in line with RaaS estimates.
• Adjusted H1 FY24 EBITDA increased ~100% on the back of 15% revenue growth, a 20bps increase in gross margin and a well-controlled cost base.
• Management has reiterated both revenue and EBITDA guidance for FY24 which are reflected in current RaaS estimates. 

• Despite the high-profile announcement of his attendance, his segment was less than 3 minutes long!
• Intel’s CEO alluded to a partnership with OpenAI and implied there’s more to come yet there’s been no public announcement of any such partnership. 
• Microsoft’s commitment to use Intel’s 18A is a vote of confidence in their foundry offering. Let’s see how it plays out.

• Alnylam Pharmaceuticals reported solid progress across all business areas in 2023, delivering robust product growth for its four wholly-owned commercial medicines, and reaching a milestone of over 5,000 patients now on an Alnylam commercial RNAi therapeutic.
• The company recorded $1.24 billion in global net product revenues.
• Alnylam also extended its leadership in RNAi therapeutics, including pioneering delivery of RNAi therapeutics to adipose and muscle tissues.

• Deere & Company’s earnings revealed a company operating well in the midst of an increasingly competitive market landscape, with stable demand across the majority of sectors.
• The firm noted solid execution across the cycle with an 18.5% margin for equipment operations in the first quarter.
• Land sales fell by 4% to $12.658 billion while equipment operations also dropped 8% to $10.486 billion.

• Thanks to the continuous support of policies, the TCM industry has ushered in a harvest period. So, TCM remains to be a relatively certain field for investment in China healthcare. 
• Biotech companies must meet several conditions in order to have good long-term development, such as sufficient financial support, at least one blockbuster product and high moral standard of the management.
• Reasonable valuation of Sichuan Kelun-Biotech Biopharm (6990 HK) is about RMB15 billion. So, we think it is now overvalued. Meanwhile, restricted shares will be lifted 12 months after the IPO.

• Youngone Holdings is an attractive deep value stock. Net cash (including short term investments) was 1.1 trillion won at the end of 3Q 2023 (79% of market cap).  
• Youngone Holdings is the holding company of Youngone Group. Youngone Corp is best known for its OEM apparel business for major branded companies such as The North Face and Patagonia.
• We found Youngone Holdings using Smartkarma’s Smart Score Screener system. 

• Avantor delivered fourth quarter business results at the high end of their guidance across key financial metrics, including a core organic revenue decline of 4.8%, adjusted EBITDA margin of 17.5% and adjusted EPS of $0.25.
• They demonstrated robust cash flow management and considerable debt reduction, exceeding their guidance range.
• The company experienced industry wide headwinds due to inventory destocking and cautious customer spending.

• HubSpot, a leading software company, provided a generally positive update on the firm’s financial performance, strategic direction, and plans for future growth.
• On the financial front, the firm reported solid results for Q4 2023.
• Revenue grew by 21% year-on-year in constant currency terms, and by 25% for the full year 2023.

• CF Industries Holdings Inc., a global leader in nitrogen-based fertilizers, reported a strong performance for the full year and fourth quarter of 2023.
• The company posted an adjusted EBITDA and net cash from operations of approximately $2.8 billion each, and a free cash flow of $1.8 billion.
• This robust outcome was attributed to a balanced nitrogen supply-demand situation and energy spreads favoring the company’s low-cost production in North America..

• Applied Materials delivered a decent result and the management claims to have made a strong start to the current fiscal year, exceeding its earnings projections.
• Strengths identified include the company’s innovation strategy and position at key industry inflections, such as new-foundry logic and developments in its DRAM market where it has captured over 50% of market share.
• Revenue from its advanced packaging product portfolio is predicted to reach nearly $1.5 billion in 2024.

• Martin Marietta, a provider of aggregates and heavy building materials, presented a decent financial performance for the full year and fourth quarter of 2023.
• Positive elements in the report include the company’s record financial performance, reaching a milestone of $2.1 billion in adjusted EBITDA. Additionally, the company noted that it had a successful, safe year without any major incidents.
• This was also underpinned by the strong performance of the company’s aggregates business which drove revenues up by over 10% to $4.3 billion.

• Usually, February is typically the month with the fewest working days of the year, and therefore, revenue is likely to be at its lowest as well.
• We consider that the Taiwanese government may desire TSMC to build fabs in countries aligned with those who signed the “Wassenaar Arrangement.” 
• The price hike of NVIDIA Corp (NVDA US) by US$785.38 on February 22 in the US market could signal an important development in the AI sector.

• Alteogen Inc (196170 KS) has modified the existing license agreement with Merck. Revised terms of the agreement grant Merck exclusive global right to ALT-B4 for a specific product group, pembrolizumab.
• Under the terms of the revised agreement, Alteogen will receive an upfront payment of $20M from Merck. Alteogen will also receive additional milestone payment of up to $432M.
• Approval of Alteogen’s first proprietary product, Tergase (expected in early 2024) will be the next major catalyst for the company.  

• Cisco Systems Inc.’s fiscal second-quarter results demonstrated a mix of positives and negatives, balanced by the company’s flexible strategic route and shifting market conditions.
• Revenue for the quarter edged at the high end of the company’s guidance range, owing to robust operating leverage across business segments that surpassed margin expectations and facilitated better-than-expected earnings per share.
• A total of $2.8 billion value was returned to investors through dividends and share buybacks, evidencing Cisco’s ongoing commitment to its shareholders.

Key points

• Oslo-listed company focused on residual value of a 7th generation UDW drillship acquired at low cost before offshore market downturn
• Market cap of USD 187 million with potential for dividends and special payouts
• Secured charter contract with Saipem, poised to generate significant revenue and deliver solid returns for investors

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.

• INOX India Limited (INOX IN) ( or IWL) and Inox Wind Energy (IWEL IN) (or IWEL) have announced a merger, where IWEL will be amalgamated with IWL
• The share swap ratio in the scheme of amalgamation gives a very evident arbitrage opportunity. 
• The arbitrage opportunity has become bigger than when announced in June 2023. While the strategy is still possible, we try to justify the market behaviour.

• LATAM Group surprised the market with strong guidance for 2024 earnings growth following upgrades through 2023. We raise our 2024 EBITDAR 14% to $2.8bn.
• A successful restructuring under Chapter 11, and market leadership in key regions, is paying off for LATAM as demand remains robust.
• Such a strong recovery positions it to make further strategic gains, particularly with the risk that competitor GOL must shrink its fleet through its own CH11 processs.

• Based on the Q3 consolidated financial results announcement for Sony Group Corporation for FY 2023, the company showed considerable resilience against some difficult market conditions.
• One critical highlight was the significant increase of 22% in consolidated sales for the quarter compared to the same quarter the previous fiscal year, reaching a record high of JPY 3,747.5 billion.
• Notably, the operating income and net income also increased substantially year-on-year and reached the second-highest level on a quarterly basis.

• Lyft’s positive financial performance and future expectations make it an attractive investment opportunity.
• Lyft’s 2023 performance was marked by significant growth in the company’s rideshare service, with gross bookings reaching an all-time high, ride growth accelerating each quarter and ending the year up 26% in Q4.
• This growth demonstrates the strong demand for Lyft’s service, which bodes well for its future performance.

• DaVita, a healthcare company specializing in kidney care and dialysis services, highlights its successful performance for the financial year of 2023 due to strengthening investment on the company’s platform.
• Notably, despite external challenges, the company experienced significant growth with a 20% year-over-year rise in adjusted operating income, a 28% increase in adjusted EPS, and a return of the leverage ratio back to the target range.
• The company outperformed its annual profitability targets for integrated kidney care and anticipates reaching break-even or better performance by 2026.

• Occidental Petroleum’s Q4 2023 has displayed a robust performance in recent quarters, achieving a strong free cash flow of $5.5 billion.
• Significantly, this has facilitated the company in paying dividends, repurchasing common shares, and investing back into the business.
• The primary driver of this achievement is accredited to technical expertise, leading-edge technologies, and innovation, showcasing the company’s operational strength.

• Shopee – Sea’s largest business unit and Southeast Asia’s largest e-commerce platform – has reported negative EBITDA for most of the 8 or so years since its launch. 

• Investors now however appear to be looking for earnings growth. In 7 of the last 9 quarterly earnings reports, investors have rewarded the company every time it has reported earnings growth (its share price has gone up in the day after the release), and penalized when it has not.

• Based on our analysis (and subject to the disclaimer included below), we expect Shopee’s GMV and Revenue to improve in Q4 2023 (as compared to the previous quarter) along with its EBITDA, although earnings will likely remain in negative territory.

• The main businesses, hotel and air ticket bookings increased by 131% YoY and 86% YoY in 4Q23.
• The Chinese traveling market continued its recovery after the lift of the lockdown at the end of 2022.
• The stock price is close to our last price target – Downgrade to Hold.

• Nvidia’s blowout earnings number is another example of how grasping exponential growth trends is extremely difficult for human investors.
• Unlike what is often assumed, Nvidia, for now, qualifies as a quality stock, revealing relentless competitive power, low debt, and reasonable valuation.
• Nvidia’s weight with Quality ETFs is bigger than its weight in the MSCI World Index, adding to quality stock outperformance.

• Q423 revenues of ¥105.1 billion, about 5% better than forecasted, up 5% QoQ but down ~10% YoY.
• Q124 revenues forecasted to decline 17% QoQ to ¥87 billion. Not surprisingly, EBITDA will also decline 33% QoQ to ¥22.1 billion.
• On a brighter note, demand growth driven by generative AI will roughly double wafer demand for servers (AI+General) by 2027

• Trip.com Group (9961 HK) has a remarkable 4Q23 with adjusted net profit surged 437.1% YoY. Higher volume and better market efficiency have resulted in massive margin expansion.
• Net cash has ballooned to about 15% of its share price, and this has allowed it to carry out a massive US$300m Capital Return Program in 2024.
• Business has outperformed the industry in CNY, with domestic hotel and air business volume increased by 60% and 50% YoY. Its overseas platform also saw double-digit growth.

• We expect NetEase to report C4Q23 revenue, GAAP op. profit and GAAP net income 4.9%, 5.7% and 8.5% vs. consensus.
• The robust topline growth was mainly contributed by revenue recognition of <Justice Mobile> in the peak summer season.
• The grossing of legacy titles like <FWWJ> is also growing steadily due to the low-price strategy. We raise our TP to US$118 to reflect the rich and diversified pipeline…

• With 1H24 results, Qantas followed Singapore Airlines in highlighting fare weakness in international markets and we cut our pre-tax income by 13% to FY24.
• We expect FY24 pre-tax income to fall 16% yoy but also expect FY25 to fall another 5%, as our EBITDAR/ASK remains 10% above FY19 levels following 12% in 2H24.
• While international markets continue to normalise, Qantas’s domestic market structure positions it favourably to continue to invest in customer service and product.

• StandChart may need to take further impairment hit on China Bohai Bank
• VIU model is used to justify the higher carrying value compared to fair value of the holdings.  There is zero headroom between the VIU model and the carrying amount.
• We looked at VIU model assumptions for HSBC and StandChart. A declining NIM is likely put further pressure on the VIU model output for StandChart.  

• Boeing shares are down 20% since the start of the year, despite a booming global market for aviation
• Boeing’s focus on financial performance and stock price over safety and engineering has been a concern
• The current CEO David Calhoun dissolved the company’s strategy department, raising questions about Boeing’s future direction and decision-making strategies

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

• In our latest South Korean banks screener; we add Woori Financial to existing buy KB Financial as our preferred Korean banks picks
• Delinquency ratios continued to worsen QoQ, with only Woori bucking the 4Q23 NPL trend; Woori has lagged in terms of returns, but we expect CoR control to support 2024 returns
• KB has a low PBV ratio relative to its ROE, it delivers rising post-provision returns,  it has a high CET1 ratio and it maintains a healthy LDR

• 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 The Keepers Holdings (KEEPR PM).
• We recently added Ginebra San Miguel (GSMI PM) / Sai Gon Cargo Service (SCS VN) to our list of companies under coverage, along with Plover Bay Technologies (1523 HK).  

• UMC spoke at an investment bank’s recent conference, providing additional color on guidance and its collaboration with Intel for 12nm chip production.
• UMC comments imply the key synergies between the two companies, whereby each can solve the other’s key problem,
• While UMC most likely needs to remain a “Taiwanese company” in terms of optics given its history, Intel’s synergies with UMC establishes acquisition-value support for UMC shares in our view.

• Key Events: 1) Nvidia Results Coming Today in the U.S. 2) Elan & ChipMOS Tomorrow in Taiwan 3) U.S. PC Maker Results Next Week
• Why United Microelectronics Is Becoming a Great Long-Term Acquisition Target for Intel 
• Novatek a Top Gainer After Reports of Alliance with ARM to Build Neoverse V2 for AI

• We cut our SIA operating profit by 9% to S$2.6bn in FY24 and by 17% to S$1.5bn in FY25 versus consensus of S$2.1bn.
• SIA’s cost control is under-examined and we publish a deep dive on a concerning level of inflation relative to key peers, which actually escalated in 3Q24.
• Cargo broke even in peak season, and Scoot’s margins present a conundrum as it may need to be further utilization to help SIA with cost management.

• Post 35% price gain in a quarter, many good news we expected and other analysts expected already factored into the share price. We believe the risk/reward not attractive here.
• TSMC guides stronger 1Q24 and 2024, helped by Nvidia and copy cat AI GPU/ASIC orders. We see greater opportunities for alternative copy cat solutions like AMD and Alchip.
• We attribute Nvidia customers’ sales discrepancy to AI server is cannibalizing non-AI server and Nvidia is allocating more GPUs to premium price paying customers in 1H24 and reverse in 2H24.

• EV supply chain is at a nascent stage in ASEAN and EV adoption in the region lags behind developed markets despite boasting a large population with a burgeoning middle class.
• However, Governments in the region continue to introduce new initiatives and offer incentives to promote the sector, while companies continue to attract large investment to develop the EV market.
• The four companies we looked at have reported earnings and we have discussed their latest results and our investment thesis.

• January pricing momentum improved, helped by more operating days & re-routes
• Throughput growth remained strong last month, including +18% into WC ports
• Near term reality far rosier than downbeat view from industry giant Maersk

Key points

• Analysts believe R1 (RCM) presents a compelling investment opportunity despite recent challenges
• Predictions suggest profitability improvements and potential doubling of stock value over the next few years
• Long-term outlook remains strong due to industry-leading position and growth potential in healthcare IT sector

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.

• kopi-C with Lendlease REIT’s CEO The first Singapore REIT to reach net zero emissions, Lendlease Global Commercial REIT has its next target in sight: absolute zero by 2040.
• When it comes to sustainability, Lendlease Global Commercial REIT is ahead of its peers.

• Asahi Kagaku Kogyo’s Facility in Kunshan, China Asahi Kagaku Kogyo (TYO 7928) is a $12m market cap net-net industrial plastics manufacturer that over the last 10 years mostly operates around breakeven.
• The business itself isn’t interesting, but it’s a positive that they aren’t losing money.
• There also isn’t a single writeup on this company or any mentions of it on X/Twitter, so it’s definitely under the radar.

• In More Hong Kong Stocks Priced For Liquidation, I flagged thirteen stocks the market is all-but implying are priced for liquidation. 
• One of the cut-off points in that analysis was a requirement for stocks to trade at least US$1mn/day. Removing that constraint uncovers shipping services play COSCO International Holdings (517 HK) (CSI).
• CSI’s market cap accounts for ~86% of its 1H23 net cash position. Earlier this month, CSI announced another positive profit warning. Those numbers should be out late-March.

• There is room for FY23 result of Cathay Pacific Airways (293 HK) to beat market expectations on stronger traffic volume and better yield performance.  
• Resumption of more capacity, from 70% of the pre-pandemic level at end-FY23, will drive FY24 earnings with ROE at 12-13%, putting it on an inexpensive 0.65x P/B. 
• Its associate Air China Ltd (H) (753 HK) will also benefit from the release of pent-up demand in the domestic market and the recovery in international travel. 

• Pal Group’s founder retired last month after 50 years at the helm. 
• Since 2001, the fashion to variety store business has grown from ¥10 billion to a forecast ¥184 billion this year.
• There remains growth potential in the variety store chain, 3Coins, as well as a revival in the fashion side.

• HSBC will release its results on Thursday and there remains risk of far worse credit metrics, not only related to CRE lending in HK and China
• Construction loan risks are tangentially related to CRE and are also considered fairly high risk, where HSBC can see sizable migration to stage 3 loans
• HSBC remains highly concentrated in UK and N America in its wholesale lending book, which we do not believe is well understood, and risky given economies

• On February 15, OpenAI, Google and Amazon launched respective AI advances in video LLM (SORA), long text (Gemini 1.5), and text-to-speech (BASE) abilities. The evolution speed of AI inspired awe;
• We estimate rival equivalent of SORA, delivered over cloud, will appear in 4-6 months of time but on-device version will take years.
• We suggest 2C AI applications, especially video, will be the prime beneficiary

• Novatek’s share price has surged by more than 15% in four days due to the news of Novatek’s alliance with ARM to develop Neoverse V2.
• While the decision on whether the iPhone 16 will feature OLED technology is still pending, the general sentiment is optimistic.
• Novatek is set to leverage Intel Corp (INTC US)’s 12nm capacity through United Microelectron Sp Adr (UMC US) in the near future.

• Bank Mandiri is our top pick for its quality attributes, its premium and growing pre- and post-provision returns; Mandiri provides a better valuations to returns mix than Bank Central Asia
• Bank Negara is the value pick with its low PE multiples, its attractive PEG ratio, whilst also improving pre- and post-provision returns with cost of risk well controlled
• Bank Rakyat registered worsening pre- and post-provision returns in 4Q23, with cost of risk worsening; this reflects its heavily MSME focused loan mix which keeps structural cost of risk high

Key points

• TI has continued to innovate in analog chip design over time
• Their chips are used in a variety of industries including automotive, industrial, and consumer electronics
• TI’s analog chips are found in a wide range of products from smartphones to medical devices

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.

• The market seems to be dancing to its own tune and is likely to continue.
• EUREKAFO’s distributors are dissatisfied, MANYAVAR’s reported numbers failed to match up to the on-ground optimism. 
• LTFH’s “strong” retail playbook keeps performing, and SGMART’s website raises concerns about its operations. 

Key points

• ETSY’s end markets are expected to grow at a high single digit rate, allowing for 10% compound annual growth rate in Gross Merchandise Sales (GMS)
• ETSY’s international market, comprising 45% of revenue, is growing faster than its US market
• ETSY has room to increase its take rate slightly, with its current rate of 19.8% in line with industry standards, positioning the company for continued growth in e-commerce.

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.

• Nintendo’s share price fell ~6% on rumours of Switch 2 delay, wiping around $4 billion of the market cap
• We do not believe that a one quarter delay will have any impact on the console’s long-term sell-through or the stock’s valuation
• With Sony’s PS5 faltering, Nintendo is launching at an opportune time. We turn bullish on the stock with ~25% upside from here

• One year ago, we published a note valuing Wechat Channels at US$29 billion by applying 25xPE to RMB8 billion net profit out of RMB37 billion revenue by 2024.
• Fast forward to today, the platform’s priority has been further elevated by Tencent management in its attempt to pursue high quality growth.
• We review our thesis on Wechat Channels based on recent channel checks and now believe that the platform could represent ~35% of Tencent’s total incremental profit from 2024 to 2026. 

• Q124 revenues of $6.71 billion, at the high end of the guided range and essentially flat sequentially both QoQ and YoY
• Q224 revenue $6.5 billion at the midpoint, a modest downward movement of 3% QoQ and in line with what we saw from peers KLAC and LRCX
• Still a great company with excellent growth prospects, just not in 2024

• THE iEdge S-Reit Index declined 5.6 per cent on a total return basis in the year to date, with declines also recorded in the FTSE EPRA Nareit Index series which track global Reits.
• The 10 S-Reits which recorded largest net retail inflows in the year to date were Mapletree Logistics Trust, Keppel DC Reit, CapitaLand Ascendas Reit, Mapletree Pan Asia Commercial Trust, CapitaLand China Trust, CapitaLand Ascott Trust, CapitaLand Integrated Commercial Trust, Frasers Logistics & Commercial Trust, CDL Hospitality Trusts, and ParkwayLife Reit.
• These 10 S-Reits contribute S$250 million in net retail inflows, or nearly 90 per cent of the combined net retail inflows in the year to date.

• Over the first seven weeks of 2024, the 25 largest weights of the Manufacturing Index saw varied performances from a 31% decline for NIO to a 24% gain for Food Empire.
• The largest Manufacturing Index weight is currently ST Engineering, which has consolidated on its 2023 gains over the past 7 weeks and scheduled to report its FY23 results on 29 Feb before the market open.
• Venture has booked the most net institutional inflow over the past seven weeks within the Manufacturing Index with S$43 million of net inflow.

• It has been reported in numerous local media outlets that WeBull is discussing with the local financial authorities to enter the Korean retail stock brokerage market.
• If the Korean financial authorities provide a license to WeBull to directly provide stock brokerage services to the Korean retail market, this would be the first case ever.
• If FSC grants a full license to WeBull to operate stock brokerage services to retail investors in Korea, this could result in the local brokerages losing market shares to WeBull

• MicroStrategy Inc’s fourth quarter 2023 earnings point towards a strong performance from being the world’s largest corporate holder of bitcoin, possessing 190,000 bitcoins with a market value of $8.1 billion.
• Over 2023, the company added another 56,650 bitcoins to its portfolio costing $1.9 billion, making the company’s bitcoin strategy a long-term focus.
• Baptista Research looks to evaluate the different factors that could influence the company’s price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology.

• Ralph Lauren has yielded strong financial performance for Q3, reportedly exceeding the company’s top and bottom-line expectations, while driving significant EPS growth.
• Such advancement comes despite a reportedly dynamic global environment, thanks to considerable focus on areas such as the brand.
• Immersing people in Ralph Lauren’s world of elegance and sophistication, the brand is resonating globally, allowing overall pricing power in the market.

• According to Dynatrace’s fiscal third quarter 2024 earnings, the company delivered solid results driven by its ability to successfully navigate a continually changing market.
• Annual recurring revenue (ARR) grew by 21% year over year, while subscription revenue increased by 23% over the same period.
• Non-GAAP operating income steadily increased to $105 million representing 29% of revenue and robust free cash flow margin was delivered at 25% on a trailing 12-month basis.

• Underpinned by an urgent need for a more secure digital landscape, CyberArk Software has emerged with a wholesome performance in the fourth quarter of the fiscal year 2023.
• An impressive 60% YoY growth of Subscription ARR has led CyberArk to become an exclusively recurring revenue company, with an astounding 95% of total bookings coming via subscriptions.
• CyberArk marked the close of 2023 by bolstering its market leadership in the realm of Identity Security Platforms with a robust growth quarter.

• Shiseido Company (4911 JP) reported 4Q23 results last week.  Overall, operating profit of Y40bn in FY23 was Y5bn higher than previous company guidance of Y35bn.
• However, Shiseido’s China business weakened materially in 4Q23, and 2024/25 guidance seems a bit light. 
• I believe FY24 should not be used as a base for valuation because the nuclear wastewater impact is likely to linger a while longer during FY24. 

• Citic Ltd (267 HK) is a well-managed conglomerate trading at a big discount to its constituent parts
• Earnings should move up from here and pays a decent dividend while you wait.
• A member of both the the Hang Seng Index (HSI INDEX)  and the HSCCI and will attract inflows once institutional money returns

• Since Imbruvica’s sales continued to decline and Calquence hadn’t shown much growth in US since 23Q2, either Zanubrutinib gained more market share or the entire BTK inhibitors market is shrinking. 
• BeiGene’s recent sluggish share price could be related to geopolitical conflicts/weak market sentiment.However, innovative drugs don’t involve supply chain security issues. There’s no need for US to sanction China’s biotech.
• We are relatively optimistic about BeiGene’s 23Q4 sales growth. In our view, BeiGene’s reasonable market value is at least about US$18 billion. BeiGene (6160 HK) is undervalued.   

• Overseas traveling revenue recovered strongly in China during the Chinese New Year.
• Great Wall Motor’s vehicle deliveries increased by 69% in January 2024.
• JD.com plans to raise the salaries for customer service employees by 30% in 2024.

• The sales of Jan 2024F were the lowest during 2022-2024F, indicating a likely downtrend for 1Q24F.
• Demand is expected to remain sluggish in 2Q24F, potentially resulting in decreased raw wafer demand for Logic and Memory in 2Q24F.
• 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.

• Keystone Law Group (KEYS) is a UK-based law firm utilizing a freelance-lawyer platform model.

• Its “pay-when-paid” policy and “work-from-anywhere” culture result in minimal invested capital, yielding high returns on capital and a structural competitive advantage over traditional equity-based law firms.

• With a 2023E free cash flow yield of approximately 6.8%, the shares are deemed fairly to slightly overvalued.

Key points

• MFA Financial’s Series C preferred stock offers a 25% IRR and 40% total return over 18 months
• Favorable entry point for investors due to current interest rate environment and preferred instruments being out of favor
• MFA’s position in the face of LIBOR transition challenges sets it apart, making it a strong choice for short-duration fixed income investing

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.

• THE net institutional fund flows for the first six weeks of 2024 showed a similar trend as the same period in 2023, with net withdrawals of S$463 million.
• The net institutional fund flows indicate the direction and level of institutional investor activity across all stocks in the Singapore market.
• As many as 18 of the 20 stocks that booked the highest net retail inflow relative to market capitalisation also booked declines in total return, while Pacific Radiance and Asia Enterprises Holding were the exceptions, booking respective total returns of 7.2 per cent and 9.1 per cent over the six weeks.

Key points

• Arthur J Gallagher is a strong player in the U.S. SME broking market trading at fair value with potential upside
• Estimated 5-year returns are 10% IRR / 1.5x MOIC, with possibility of higher returns with EBITDA growth and multiple expansion
• Insurance brokers benefiting from firm P&C pricing cycle and market conditions, providing downside protection and potential for sustained organic growth, investor focus on growth trend maintenance

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.

• Bell Financial Group Ltd (ASX:BFG) is a diversified provider of financial products and software solutions within, and increasingly outside, its traditional full-service stockbroking business.
• BFG reported FY23 NPAT of $24.3m, 5% below FY22 and 10% below RaaS estimates.
• A H2 FY23 miss in Technology & Platforms (down 8% against a H1 result +100%) was the major difference to RaaS estimates, with all other divisions trading in-line with generally challenging but improving trading conditions.

• Renesas has acquired PCB electronic design company Altium and Gallium Nitride power device maker Transphorm. Its tender offer for Sequans Communications has been extended.
• These are positive developments in our view, but sales and profit margins were down in 4Q of FY Dec-23 and are expected to decline this quarter as well.
• On the other hand, inventory adjustment is proceeding and the share price has dropped 12.6% since last Tuesday. Buy on weakness for the longer term. 

• Based in Taiwan, Acter Co is capitalizing on its extensive experience of high-end cleanroom integration, recycling and regeneration systems, electromechanical engineering to generate consistent growth in earnings and cash flow.
• Acter Co’s dividend yield averaged 8.2% from 2019 to 2022. Its annual dividend payout averaged 76% in the same period. Estimated dividend yield is 7% in 2023. 
• We found Acter Co Ltd (5536 TT) using Smartkarma’s Smart Score Screener system. 

• Diving Deep into Hindenburg Research’s comprehensive report on Temenos triggers a market plunge, alleging accounting manipulations, failed North American expansion, product failures, and troubled European deals.
• Allegations include aggressive revenue recognition, excessive R&D capitalization, difficulty in revenue collection, inflated free cash flow, and executive insiders stock divestment.
• Temenos denies allegations, defending its business integrity, performance, and financial standing, but market volatility persists, emphasizing the need for transparent communication and governance reassurance.

• Due to the US Draft Bill against CXOs, stock prices of the entire pharmaceutical industry plummeted. But in reality, there’s no impact on innovative drugs, which is just “emotional suppression”.
• The future BTK inhibitors market pattern predicted by GlobalData is very close to our estimate. This actually indirectly verifies the peak sales level that BeiGene may reach in the future.
• Setbacks on KRAS/SHP2 projects discourage investors’ confidence on Jacobio. We wouldn’t recommend projecting too high expectations on BET inhibitor just yet. Share price performance could continue to be under pressure.

• Cloudflare Inc.’s latest Q4 2023 earnings highlighted several encouraging developments, underscoring a strong quarter of business growth and an upbeat financial performance, even amid prevailing macroeconomic uncertainties.
• The cloud-based network security company reported total revenues of $362.5 million, a 32% increase year-over-year(YoY).
• The increase was driven significantly by larger customers, with 66% of revenue coming from this group.

• Alibaba Group’s latest report for the December Quarter 2023 reflected steady growth despite necessary organizational adjustments.
• The call highlighted an overall focus on a more aggressive approach towards competition to win growth, reigniting the growth in their two core businesses: e-commerce and cloud computing.
• The healthy year-over-year Gross Merchandise Volume (GMV) growth in the e-commerce segment is attributed to the effective execution of user-first and competitive pricing strategies in Taobao and Tmall Group (TTG).

• Coherent Corp.’s second quarter fiscal 2024 earnings demonstrated signs of gradual improvement in its financial performance, furthering confidence in its outlook for growth and profitability.
• They reported solid sequential growth in both revenue and margins.
• Significant developments from Q2 include increasing gross and operating margins and improving demand across its communications and industrial markets.

• Enphase Energy Inc.’s fourth quarter 2023 financial results show a quarterly revenue of $302.6 million, a considerable shipment of 1.6 million microinverters and 80.7 megawatt hours of battery, along with a generation of free cash flow of $15.4 million.
• The company also achieved a reduction of $147 million in Q4, and met their goal of reducing channel inventory.
• The quarter saw a 50% gross margin, 29% operating expenses, and 22% operating income.

• Analyzing the latest earnings call transcript of CVS Health, it becomes evident that the company has managed to successfully navigate through a challenging environment and deliver on its financial commitments, underscoring the strength of its diversified business model.
• Baptista Research looks to evaluate the different factors that could influence the company’s price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology.
• In this report, we have carried out a fundamental analysis of the historical financial statements of the company.

• Lear Corporation achieved record revenue in 2023, reaching $23.5 billion, a 12% increase from 2022.
• The significant growth in core operating earnings by 29% to $1.1 billion and the 38% increase in adjusted earnings per share to $12.02 highlight the company’s strong financial performance.
• Additionally, its operating cash flow improved by 22% to over $1.2 billion, and free cash flow conversion exceeded the target of 80%.