Equity Bottom-Up

• BABA reported C4Q23 top line, non-GAAP operating profit and GAAP net income in-line, 3.8% and (71)% vs. our estimates. 
• The discrepancy between non-GAAP operating and GAAP net is due to restructuring charges;
• A few clients asked what it would take to be more positive on BABA. To us, grasp of its situation and alignment of the organization must happen first…

• Last November, Trend Micro Inc (4704 JP) announced a second change to Shareholder Return Policy in 9 months. Activist ValueAct had been pushing. This was their big win.
• I discussed, bullishly, in Trend Micro BIG Bonanza But Shareholder AND Balance Sheet Structure Matter. N225 Divs Get a Fillip. 
• Yesterday, with 2024 earnings, we got the promised special dividend and 2024 buyback, and in-line forecasts. No surprises. But the stock is down hard as yesterday’s hopium met today’s reason.

• Globalfoundries (GFS) reported Q423 revenues of $1.854 billion, marginally above the midpoint of the guidance range, down 12% YoY and essentially flat sequentially.
• Guided Q124 down 18% QoQ with Gross Margin set to fall from 29% to 23%
• SMIC will outspend GFS 10x in CapEx terms this year

• Many China consumer stocks, including ZJLD Group (6979 HK), have been sold off heavily in the past 6 months, primarily driven by a fear of deflation and weak consumer sentiment. 
• ZJLD Group is one of the exceptions, with fundamentals intact while share price heavily sold off. 
• Shares look attractive vs. its high growth rate and strong management team, and especially with the return of Southbound connect post holidays. 

• Fortinet Inc., a cybersecurity solutions provider, saw its total billings rise 8.5% to $1.9 billion in Q4 2023.
• This growth, which was driven by an increased focus on secure operations (ops), Secure Access Service Edge (SASE), and improved execution of its sales strategy, led to six deals in excess of $10 million across five industry verticals.
• Fortinet’s customer base comprised 76% of businesses in the Fortune 100, including nine of the top 10 technology companies and manufacturers and nine of the top 10 healthcare providers.

• China Vanke Co. Ltd. is selling its entire stake in a Shanghai retail complex to Link Real Estate Investment Trust (Link Reit) at a discount, as the indebted developer offloads assets to ease liquidity crunch.
• Hong Kong-listed Link Reit, Asia’s largest real estate investment trust, said in a Friday filing that it agreed to acquire a 50% stake in Qibao Vanke Plaza from Vanke at 2.38 billion yuan ($334 million).
• Link Reit already owns the remaining 50% stake in the plaza after a 2.77-billion-yuan purchase from Vanke’s partner GIC Pte. Ltd. in April 2021.

• Palantir, a leading developer of data analytics software, showcased strong results in the fourth quarter of 2023.
• The firm reported $608 million in fourth-quarter revenue, which represents 20% YoY and 9% sequential growth.
• The substantial contribution came from the commercial business which surpassed $1 billion in revenue over the last twelve months, marking this figure as a noteworthy milestone.

• This is our first report on Check Point Software, a multinational cybersecurity firm based in Tel Aviv.
• The company had a particularly strong fourth quarter in 2023, according to their recent earnings call.
• The company’s operating income for Q4 2023 was at $309 million, a 7% increase year-overyear, and their non-GAAP operating margin of 47% was quite stable.

• Amkor Technology, Inc.’s Q4 2023 earnings call outlined a year of challenges due to macroeconomic headwinds, excess inventory, and geopolitical tensions, which led to an 8% decline in annual revenue.
• However, the firm also reported steady performance with Q4 revenue standing at $1.75 billion and full-year revenue at $6.5 billion.
• 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.

• Cognizant Technology Solutions reported its fourth-quarter 2023 results during the earnings conference call.
• The company’s Q4 revenue stood at $4.8 billion, aligning with the guidance range provided in the last quarter, despite ongoing macroeconomic pressures.
• However, this represented a year-over-year decrease of 1.7%.

• Two days ago, Japanese manufacturer of ubiquitous office furniture Itoki Corp (7972 JP) announced salutary earnings/presentation(J) results, new MTMP(E) outlines, new shareholder return policy(J), yutai program(J), div hike(J), and buyback(J). 
• It was a big day. The stock went limit up on 14 Feb and is +12% today. +25% in two days.
• No single holder holds that much BUT the parameters tell you how this gets done. It’s interesting, but it is important to read the fine print below!

• Investment firms are using Ten East to diversify their personal portfolios.
• Business Breakdowns is a podcast series that explores the history, business models, and competitive advantages of different businesses.
• Todd Austin, CIO of Parnassus Investments, discusses Intel’s fall from its iconic status and the factors that contributed to it.

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

For our next Corporate Webinar we are glad to welcome Sasseur REIT’s CEO, Ms Cecilia Tan. 

In the upcoming webinar, Cecilia will share a short company presentation after which, she will engage in a fireside chat with Smartkarma Insight Provider, Robert Ciemniak.

Robert 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, February 29 2024, 18:30 SGT.

About Sasseur REIT

Sasseur Real Estate Investment Trust (“Sasseur REIT”) is the first outlet REIT listed in Asia. Sasseur REIT’s portfolio comprises four outlets strategically located in the high-growth cities of Chongqing, Hefei and Kunming in China and is well-positioned to ride on the growth of the rising spending power of the Chinese middle class.

Sasseur REIT is managed by Sasseur Asset Management Pte. Ltd., an indirect wholly-owned subsidiary of Sasseur Cayman Holding Limited (the “Sponsor”) which is part of Sasseur Group, one of the leading premium outlet operators in China with 17 outlets under management.

• TSMC: +16.6% ADR Premium, Still High After CNY Multi-Day Taiwan Market Close
• UMC: 1.3% ADR Premium, Still Historically High After CNY Break
• ChipMOS: +4.2% Premium, Very Rare & High Level, Not Sustainable

• Taiwan Market Surges in Post-CNY Catch-Up, TSMC a Top Gainer Locally
• Key Events Ahead: Nvidia Results Next Week, Key Taiwan Names Reporting
• Taiwan Dual-Listings Monitor: High Spreads to Persist After CNY Break 

• Bank Negara Indonesia (BBNI IJ) remains a laggard amongst the top 4 banks in Indonesia in valuation terms, with improving returns leading to some upward re-rating. 
• The bank continues to grow its high-quality corporate loans and consumer banking with a dramatic increase in its mobile banking users, which is helping to grow its low-cost CASA. 
• BBNI remains an interesting proxy for Indonesia’s economy, with digital banking helping to drive returns. Valuations remain below peers but the bank is now approaching fair value.

• Base Carbon is a leading provider of high-quality carbon offsets that can be purchased by third parties to meet their carbon offset goals.
• Through a disciplined underwriting process, a strong balance sheet, and an experienced team, the company seeks to be the preferred carbon project partner for developers and buyers of carbon credits.
• Robust portfolio of existing projects. Base Carbon has invested in three successful projects that are either currently generating credits and cash or will soon be producing credits that can be sold. 

• ON Semiconductor concluded the fourth quarter in 2023 with remarkable achievements depicted by its transformation and ability to mitigate headwinds in challenging market conditions.
• The quarter delivered non-GAAP gross margins of 46.7%, surpassing previous expectations.
• Though utilization shrank to 66%, the gross margin reflects significant structural adjustments made over the past three years.

• Immersion (IMMR) reached a licensing settlement with Meta Platforms (META) resulting in a payment of $17.5 million to IMMR
• The initial response to the announcement is likely due to investors’ high expectations based on META’s significant market capitalization and the anticipated scale of returns
• As a result of the cash received, we estimate IMMR to have approximately $6.20 per share in cash and securities, without consideration for fourth quarter of 2023

• Auckland Airport (AIA) will report a strong recovery in earnings, given the increase in air traffic over the past 18 months, when it reports its 1H24 result on 22 February 2024.
• However, passenger (pax) development, as outlined in its monthly operating stats, has been below the level implied by the pax guidance provided at the FY23 result.
• Consequently, FY24 NPAT guidance (NZ$260m–NZ$280m) is at risk, albeit at least partially mitigated by (1) improving retail income, and (2) AIA’s historic conservative nature when setting earnings guidance. 

• Freee KK (4478 JP) reported 2QFY06/2024 results today. 2Q revenue increased 35.1% YoY, however, both revenue and operating losses fell below consensus estimates.
• As expected, upfront investment in selling and marketing and personnel expenses prior to the new invoicing system led to an increase in operating losses.
• However, these investments have helped the company acquire a large no. of corporate paying users and we expect losses to decline going forward.

• Stylam Industries (SYIL IN) reported its best-ever EBITDA margin of 22.3% Vs 16.8% due to a raw material price decline. Revenues continued to remain soft, with growth of -8% YoY.
• The company completed its brownfield expansion to increase the plant capacity by 40% and is now embarking on a capacity expansion of 200 crores in FY25, effectively doubling its revenues. 
• Stylam Industries (SYIL IN) trades at 22x/19x FY24e/25e, with a potential for doubling of revenues over the next 3-5 years.

Key points (machine generated)

• The Krane Shares California Carbon Allowance Strategy ETF (KCCA) is recommended for investment due to increasing demand and shrinking supply of California Carbon Allowances (CCA).
• The demand for CCAs is growing as carbon emission restrictions in California become stricter, while the supply is decreasing due to a decreasing supply bank and auction schedule.
• CCAs have no substitutes, making it necessary for polluters to buy them to avoid fines if they cannot reduce carbon emissions. 

This article is sourced from an online content aggregator through publicly available sources and is displayed below for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• We screen our coverage universe for earnings disappointments, EPS downgrades, and management narratives to identify fundamental shorts.
• Stocks in focus include SBI Cards & Payment Services (SBICARD IN) , Pvr Inox (PVRINOX IN), and Escorts Kubota Limited (ESCORTS IN). 
• Credit Cost for SBI is expected to remain elevated, PVR management seems to be misreading consumer preferences, and Macro uncertainties cloud ESCORTS.

• The first two wells of the Wassana drilling programme have exceeded the company’s expectations with production from the field now over 4,000 bbl/d.
• With a third well expected to boost production further in the next few days, production from the field could be higher than the target of 4.5 mbbl/d.
• The company has decided to extend the current drilling programme at Wassana by adding two wells (from 3 to 5).

Key points (machine generated)

• Clarus’s non-ESG portfolio consists of reputable outdoor brands such as Black Diamond, Pieps, Sierra Bullets, Barnes Bullets, and SKINourishment.
• Their ESG portfolio includes brands like Industry West, Snow Peak, Royal Robbins, Stonewear, and Hummingbird, which focus on sustainable and environmentally friendly products.
• With Warren Kanders’s ownership and track record, the recent underperformance of Clarus’s stock is deemed unacceptable, but the inclusion of reputable outdoor brands and the commitment to sustainability provide potential for stock price appreciation.

This article is sourced from an online content aggregator through publicly available sources and is displayed below for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

Key points (machine generated)

• Daktronics Inc has improved its financial profile through operational upgrades and a recapitalization.
• As the industry standard in large screens and a market leader in scoreboards and programmable display solutions, Daktronics is in a strong position to benefit from increased adoption and upgrade cycles.
• Despite a recent stock price increase, investing in Daktronics is currently seen as very attractive, with potential for over 100% upside in the next few quarters.

This article is sourced from an online content aggregator through publicly available sources and is displayed below for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• Goldwin has had a remarkable run of record sales and profits, a beneficiary of the continuing growth in the outdoor market as well as its own retail strategy. 
• Although much of its success has come from The North Face, Goldwin is determined to become a more diversified – and global – sports business.
• When we first recommended the stock it was around ¥5,000 and rose to a peak of ¥12,600 but is now about ¥9,000. Will it grow again? We think so.

In its post-Indaba release of 13 February, KEFI announced that the multi-party, subsidiary-level financing of its Tulu Kapi gold project in Ethiopia is now advancing on the back of Ethiopian federal government commitments finally received in October 2023. As a result, the lead lender quickly processed its approval in December 2023 and now all other stakeholders are triggering their respective flow-on processes. At the same time, the Federal Government of Ethiopia has confirmed that its equity capital investment has been fully documented, committed and already partly invested, while the contractors to the project have reaffirmed their intention and readiness to enter into the already drafted agreements to enable full project launch in H124 (as previously indicated by KEFI).

The Diverse Income Trust’s (DIVI’s) managers Gervais Williams and Martin Turner focus on generating a dividend income stream that is more resilient and has the potential to grow faster than those of the trust’s peers. They believe that over time this strategy should lead to superior capital appreciation as well as income growth. Since launch in 2011, DIVI’s dividend has compounded at an average annual rate of around 6%. UK stocks have been out of favour with global investors, who now make up around two-thirds of the UK shareholder base compared with 17% in 1994. As a result, the UK market looks very attractively valued in both absolute and relative terms, so there may be considerable upside potential from an improvement in sentiment towards UK stocks.

• As we have long predicted LVMH is making a cheap and sneaky offer for Tod’s SpA (TOD IM).
• LVMH is doing it via wholly controlled L Catterton to confuse minority holders
• L Catterton = LVMH,  and the only reason for the current proposal is to be able to pay Della Valle a much higher price in a private transaction later on.

• Douzone Bizon’s results turned around strongly in 2023. It had sales of 353.6 billion won (up 16.2% YoY) and operating profit of 68.4 billion won (up 50.4% YoY) in 2023.
• The company plans to release software platforms with artificial intelligence capable functions in 1Q 2024. 
• The sharp increase in the share price and market cap of Douzone Bizon raises the probability of the company being included in the KOSPI 200 rebalance in 2024.

• Cohen & Steers increases deemed interests in Parkway Life Reit and Digital Core Reit Stamford Land Corporation led the buyback consideration tally, buying back 325 million shares at an average price of S$0.40 per share over four sessions.
• On Feb 1, Cohen & Steers Capital Management also increased its deemed interest in Digital Core Reit (DCReit) to above the 5 per cent substantial shareholder threshold.

Key points (machine generated)

• In 2008, Thistle933 successfully pitched Rightmove to investors despite a challenging real estate market.
• Rightmove’s business model, market position, and earnings power remained strong, leading to a compounded annual growth rate of 22% since the pitch.
• However, recent underperformance by Rightmove’s stock is attributed to competitor CoStar’s acquisition of OnTheMarket, resulting in a 15% decline in RMV’s stock and a lower five-year compounded annual growth rate of 2.5%.

This article is sourced from an online content aggregator through publicly available sources and is displayed below for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• The size of the quantum computing market depends on which source you consult and how it defines the market.
• The average CAGR is 29% for a billion-dollar market, hitting $4- 6 billion in 2030.
• Quantum computing is a new type of computing that uses the principles of quantum mechanics to solve problems that are too complex for traditional computers. 

• BMRI is more profitable than BBNI, less cyclical than BBRI  and less expensive than BBCA. This combination makes it an attractive play on the Indonesia credit growth story.
• BMRI’s FY23 results are a strong beat with industry-leading loan growth and strong ROE; BMRI also has the potential to aggressively grow its retail portfolio which still is likely under-appreciated
• BMRI still trades at a discount to BBRI and has the potential to re-rate by another 20% in the near term, apart from the compounding driven by strong loan growth.

Key points (machine generated)

• Vestis is in a favorable position to capitalize on the growth opportunities in the uniform rental and workplace supplies industry.
• The company has implemented operational improvements and expanded its salesforce, which will likely lead to improved margins.
• With a new Board of Directors and a refreshed management team, Vestis is expected to catch up with its competitors in terms of growth and profitability. The analysts project a 30% internal rate of return and a target price of $39/share by the end of 2025.

This article is sourced from an online content aggregator through publicly available sources and is displayed below for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• In Q3FY24, Dr. Reddy’s Laboratories (DRRD IN) posted highest ever revenue of INR72B, led by U.S. and Europe generics businesses, with contribution from both base business and new product launches.
• Underperformance in the domestic market continued in Q3FY24. However, the company’s initiatives regarding innovative and new generic drugs for Indian market should place it for long-term accelerated growth.
• Last month, Dr. Reddy’s acquired MenoLabs, a leading women’s health and dietary supplement branded portfolio of seven products designed to provide health support and address symptoms of perimenopause and menopause.  

• Flotek’s suite of chemical solutions, which can help customers increase economic returns on their capital investment, helped the company gain market share during FY23 despite headwinds created by a declining US rig count.
• The company’s prescriptive chemistry solutions, combined with its proprietary Complex nano Fluid (CnF)® technologies, have demonstrated improved production performance over a large population of wells completed in the Permian Basin.
• Customer efforts to improve their returns on capital could continue to provide a buffer against headwinds and result in further market share gains in 2024. 

Key points (machine generated)

• Gogo boasts a unique and extensive infrastructure, including over 250 ground-based towers, providing strong coverage and high-quality connectivity to private jet passengers.
• The company’s stock price has been undervalued due to concerns about competition from Starlink, execution issues with its 5G service, and investor perceptions associated with its divested commercial aviation business.
• However, Gogo is actively addressing these concerns and has a clear growth trajectory. As cash flows increase after completing investments in 5G and low-Earth orbit services, the stock could potentially triple in value by 2026. The company’s dominant market position and durable competitive advantages contribute to low downside risks.

This article is sourced from an online content aggregator through publicly available sources and is displayed below for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• We believe that Arm is now valued as a “growth at any price” stock; with nearly half of SoftBank group’s equity value reliant on Arm, NAV downside risk is rising
• The risk of JPY appreciation is real, whilst SVF2 remains very exposed to financing costs, with 85% of its equity value in private companies
• Softbank shares trade at a 55%+ discount to the estimated NAV; yet the downside risks to Arm’s valuation, along with the potential JPY appreciation, should keep the discount wide

• Recruit Holdings (6098 JP) reported 3QFY03/2024 results on Friday. Revenues decreased YoY due to decline in HR Tech revenues, while Adj. EBITDA for the quarter increased YoY. Both Beat consensus estimates.
• Weakening of labour markets and new pricing model have impacted HR Tech revenues, while cut down on investments have helped improve HR Tech margins.
• The company has launched Indeed Plus to help improve earnings, which we don’t expect to have a major impact on Recruit Holdings (6098 JP) ’s earnings in the near term.

• Silicon Motion reported results last week that beat consensus; Moreover, the company expects strong growth not just in 2024E, but also in 2025E.
• The company’s growth will significantly exceed PC and mobile phone market growth thanks to strong memory demand trends within these segments.
• The company sees NAND Flash in shortage into 2025E based on visibility into its client ecosystem. We continue to view SIMO as a next-wave play on the Memory recovery.

• ARM’s stock is up 110% YTD. We wrote about ARM a few months ago and reckoned that intrinsic value for ARM is a bit lower than the IPO price.
• In hindsight, it was perhaps a limitation of our imagination than anything else.
• We should have added the following in our analysis but did not: “Masa son understands capital markets.

Key points (machine generated)

• Maithan Alloys is a leading manufacturer of Manganese (Mn) alloys used in the production of hardened steel.
• The company operates three plants in India and recently acquired a fourth, indicating its growth and expansion in the industry.
• India, where Maithan Alloys is based, is the largest exporter of Mn alloys in the world, providing 25% of global imports, and maintains its position as a low-cost supplier despite structural disadvantages.

This article is sourced from an online content aggregator through publicly available sources and is displayed below for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• This is our first report on global footwear and apparel major, Deckers Outdoor.
• The company saw a strong fiscal third quarter for 2024, but the company did recognize certain risks and uncertainties that could potentially impact future performance.
• Total company revenue saw an increased 16% to reach $1.56 billion, largely thanks to full-price consumer demand.

• LIC Housing Finance (LICHF) reported a strong Q3FY24 on the back of a strong NIM. Growth, however, has been tepid as LICHF recently transitioned its technology and organizational structure.
• FY24 has been a consolidation year due to technology and organizational changes; however, LICHF is setting up well to post strong growth in FY25.
• Among other things, affordable housing is going to be a key growth area going forward. Asset quality has been also improving and should further normalize with recoveries and upgradations.

• Ubiquiti (UI) reported fiscal second quarter (December) results showing sequential improvement in enterprise revenue while service provider remains a headwind for the business
• Ubiquiti introduced several products in the December quarter which started to gain customer traction. There could be momentum in the March quarter as customers become familiar with the new products
• The year over year revenue performance has been challenged with Ubiquiti lapping the initial customer enthusiasm about the Company having product in stock

• Gen Digital, like all businesses, experienced both ups and downs in its third quarter of 2024.
• Their fiscal year marked a tremendous opportunity for consumer cybersafety, with Genesis Digital consistently executing towards their goal.
• They reported cybersafety bookings growing to $1 billion, up by 4%, cybersafety revenue up 3%, and their 18th consecutive quarter of growth.

• Q423 earnings fell sharply, but were sufficient to hit FY23 guidance
• FY24 guidance also lower, but allows for a very wide range of outcomes
• Management raised concerns about Red Sea impact, L-T excess supply issues

• Cardinal Health has recently announced its financial results for the second quarter of fiscal year 2024.
• CEO Jason Hollar and CFO Aaron Alt expressed satisfaction with the progress the company has made, demonstrating strong profit growth in both segments and expected growth for 7% to 9% in segment profit for fiscal 2024.
• Cardinal Health’s acquisition of Specialty Networks is seen as a key step in enhancing the company’s specialty growth strategy.

• International Paper Company’s financial performance for the fourth quarter of 2023 was largely influenced by challenging market conditions.
• Demand for the company’s products was notably lower throughout the bulk of the year.
• This change in demand was driven by consumers choosing to focus their spending on services and essential goods.

• Exxon Mobil Corporation concluded its fourth quarter of 2023 with strong results, emphasizing the execution excellence of its business units throughout the year.
• These results were primarily driven by the company’s commitment to its employees’ operation and safety standards alongside significant strides in project building, technology deployment, supply-chain management, and trading.
• 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.

Key points (machine generated)

• Hawaiian Electric is facing potential bankruptcy due to fire liabilities and the need for expensive investments to fire-harden their assets.
• The estimated fire claims exceed the utility’s worth, with total claims including debt exceeding $4.9-7.4 billion.
• Unless the claims are significantly lower, it is unlikely that there will be any equity value for the utility, and the stock price is expected to be negatively impacted.

This article is sourced from an online content aggregator through publicly available sources and is displayed below for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• Based on the third fiscal quarter 2023 earnings, it becomes clear that WestRock is focused on improving business outcomes and delivering value to shareholders even in a challenging market environment.
• Net sales for the quarter stood at $5.1 billion, with consolidated adjusted EBITDA at $802 million.
• The company exceeded its guidance owing to strong execution, productivity gains, and moderating input costs.

• Zydus Lifesciences Ltd (ZYDUSLIF IN) reported 16% YoY and 7% QoQ growth in India formulation business revenue in Q3FY24 on the back of healthy volume growth and new product launches.
• Profitability improvement continued, with Q3FY24 improving 200 basis points YoY to 24.5%. Net profit surged 27% YoY.
• The Board approved INR6 billion buyback, representing 0.59% of total outstanding equity shares at a price of INR1005 per share (25% premium to last closing price) via tender offer route.

• Southern Copper Corporation’s earnings centered around its 2023 results and offered insight into the company’s financial outlook.
• The company reported net sales of $9,896 million in 2023, which was lower by 1.5% compared to 2022.
• Despite the reduction, the company considers the results satisfactory, owing to higher sales volumes for copper and molybdenum, as well as better prices for molybdenum and silver.

• Stanley Black & Decker Management has expressed an optimistic outlook on their financial performance for the year 2024.
• Despite facing challenging market conditions during 2023, the company demonstrated solid performance, with significant progress in two of their most important focus areas—generating above $850 million free cash flow and the continuous improvement of adjusted gross margin through each quarter.
• 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.

• The Clorox Company delivered second-quarter financial results for 2024 that exceeded expectations, driven largely by a strong recovery from a cyber attack that occurred in August.
• The company preserved its strong brand superiority by advancing its strategies to drive top line growth and rebuild margins, as well as actively managing currency headwinds in Argentina.
• Retailer inventories are being refreshed more quickly than anticipated, which is aiding the restoration of distribution and improvement of market shares.

Key points (machine generated)

• Weave Communications is a SaaS business that offers communications software for specific vertical markets like dentists, veterinarians, optometrists, and small medical practices.
• The company has shown impressive growth at a rate of 20% and is on the precipice of becoming profitable.
• Weave is currently undervalued, trading at only 2x sales, despite its promising performance and potential for profitability. 

This article is sourced from an online content aggregator through publicly available sources and is displayed below for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• Both SMIC & Hua Hong reported Q423 earnings in line with expectations and both guided Q124 flat to slightly down. SMIC expects FY24 mid single digit growth YoY.
• The downturn has exposed inherent weakness in China’s Semi Foundry segment relative to peers as exemplified by the significant GM disparity
• China’s two leading semi foundries have ~80% domestic dependence. Right now, that’s a headwind

• Asics absolutely smashed the last MTP; this year they have a more measured approach
• Full-Year OP guidance for FY24 is a little shy of street expectations, but this should not impact the share price
• Asics has a decent runway for growth ahead and will benefit from channel mix improvements. The stock remains undervalued relative to peers

• Q3FY24 performance was slightly below expectation led by NIM margin compression and marginally elevated credit costs. Certain regulatory restrictions also dampened growth and profitability.
• However, from a medium-term perspective, BAF is setting up well to be a sustained growth powerhouse. It has widened its product catalogue and is deepening the product availability per branch.
• Led by growth tailwinds and market share gains, BAF has potential to grow at 25%+ for a prolonged period. The current headwinds seem temporary and provide a buying opportunity.

• This is our first report on diversified technology and multi industrial player, Johnson Controls.
• The company reported its Q1 2024 earnings recently.
• The company is facing some momentum after overcoming a considerable cyber disruption early in the quarter.

• Tesla Motors (TSLA US) sold one car in January 2024 in South Korea. In comparison, Tesla sold 1,022 vehicles in December 2023 and 13,885 units in 2023.
• The key reason for the sharp plunge in vehicle sales in January has been due to the government’s slashing EV subsidies for vehicles with Chinese LFP based batteries.
• Furthermore, many consumers avoided buying Tesla vehicles in January as they waited for the government’s announcements of new EV subsidies. 

• The latest earnings of the Royal Caribbean Group exhibited an optimistic financial position for the Q4 and full-year 2023 and the company flourished particularly with the debut of the revolutionary product, Icon of the Seas.
• By delivering the best vacation experiences, 2023 marked an exceptional year with net yields up by 13.5% compared to 2019 levels, thereby boosting net income by approximately $1 billion.
• 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.

• Terumo Corp (4543 JP) posted highest ever quarterly and YTD revenue and operating profit in Q3FY24. Double-digit growth in C&V and TBCT businesses are the main revenue growth driver.
• During 9MFY24, gross profit margin expanded 50bps YoY to 52%, while operating profit margin improved 40bps to 15.5%. Profitability improvement through price increases and cost reduction is on track.
• Terumo has revised both FY24 revenue and profit upward to reflect continuing positive impacts from yen depreciation. The company is aiming for record high revenue and profit in FY24.

• Microchip Technology, a leading provider of microcontroller and analogue semiconductors, reported its third quarter 2024 financial results which were below expectations as net sales dropped 21.7% sequentially and 18.6% year-over-year due to increased business uncertainty, slowing economic activity, and higher inventory levels among customers.
• Despite a challenging environment, the company’s non-GAAP gross and operating margins showed some resilience at 63.8% and 41.2% respectively.
• 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.

• With respect to Parker-Hannifin’s latest earnings, a few distinctive factors paint a broad picture of the company’s current status and future prospects.
• With record sales of $4.8 billion in Q2, a 3% progression from the previous year, the company has expressed confidence in sustaining incrementals of over 100% and expanding upon the adjusted segment operating margin which stood at a record 24.5%, marking a 3% increase on a year-to-year basis.
• This strong performance has primarily been driven by their Aerospace Systems, while both Industrial Silos also made valuable contributions.

• We expect KE Holdings (Beike) C4Q23 revenue to be in-line with consensus, with non-GAAP NI 15.6% higher than consensus, mainly due to better existing home sales.
• Although overall home living demand remains lukewarm in 2023, the structural substitution from purchasing new home to existing home has accelerated, benefiting Beike, in our view.
• We maintain the stock as BUY rating and trim down TP by US$0.5 to US$24.0/ADS to factor in the weak new home sales.

• Inflation, having peaked at 4.3% in January 2023, has been on a downward trend throughout the year, with figures dropping to 2.8% in November and further to 2.6% by December.
• In this insight, we analyze the recent quarterly performance of Yakult Honsha (2267 JP), Nissin, and Seven & I, Japanese Consumer Staples companies discussed in our prior Smartkarma Original.
• While Nissin Foods Holdings (2897 JP) showcased excellent performance, Yakult and Seven & I Holdings (3382 JP) faced struggles in their recent quarters.

• Taste Gourmet (8371 HK) reported revenue of 37% YoY Q3 2024, with profits up 37% YoY (  lower than our 50% YoY estimate). 9M FY23 revenue/profits were up 43%/43% YoY. 
• We look forward to the mainboard listing. We believe the process will commence when FY24 results are out in June. 
• The stock trades at 5.8x PE FY24e, with a potential dividend yield of 8.5% and cash around 26% of its market capitalization at 147.7 mn HKD.

• New York Community Bancorp (NYCB) saw its shares plunge nearly 40% after missing on earnings per share, cutting dividends, and increasing reserves for bad loans. The bank specifically cited issues with commercial real estate and multifamily loans.
• There is a debate over whether NYCB’s troubles are idiosyncratic or indicative of broader issues in the banking sector. Similar debates have occurred with other troubled banks in recent years.
• The real estate market, particularly in multifamily housing, has been a topic of concern. A previous episode of the podcast featured a New York landlord who stated that the golden age of being a landlord was over and talked about potential downsides in the market. Additionally, factors such as rising interest rates and affordability crises in New York City contribute to the challenges in the market.

This podcast is sourced from an online content aggregator through publicly available sources and is displayed below for general informational purposes only.

• Regional Container Line is the largest container shipping company in Thailand. It has attractive valuations, strong balance sheet, and has a major tailwind of higher global shipping freight rates. 
• RCL’s dividend yield averaged 9.6% from 2019 to 2022. The biggest factor driving higher shipping freight rates in 2024 has been the Suez crisis resulting from Houthi drone attacks. 
• We used Smartkarma’s Smart Score Screener system to find Regional Container Line (RCL TB).

• Cathay Pacific’s strong end to 2023 has been well flagged but we think expectations are too low for 2024.
• ANA, JAL and Korean Air have each seen unit pax revenue momentum accelerate into calendar 4Q23 which bodes well for 2024 prospects, particularly as manpower challenges slow capacity restoration.
• Our 2024 EBITDAR is 5% ahead of consensus while we are 11% ahead at the net income level.

• Copa’s 2023 EBITDAR of $1,117m was achieved while growing unit revenues, while capacity expanded 13% with a 17% unit fuel cost tailwind. Not an easy feat.
• In 2024, we expect only 5% EBITDAR growth on 10% capacity growth as unit revenues decline (following the emergence of this theme in 2H23) and EBITDAR-level unit costs grow.
• We model Copa’s EBITDAR/ASM premium to 2019 down to a still-impressive 35% in 2024 but new route selection and efficiency will need to be strong to sustain these economics.

Key points (machine generated)

• STMicroelectronics, originally named SGS Microelettronica, was founded in 1977. Carlo Bozotti started working at the company and eventually became its CEO.
• Bozotti implemented a restructuring plan during his tenure to enhance financial performance and concentrate on core businesses.
• Under Bozotti’s leadership, STMicroelectronics made strategic acquisitions and divestments to solidify its position in the semiconductor market. The company is now renowned for its analog and power semiconductor products.

This article is sourced from an online content aggregator through publicly available sources and is displayed below for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• We are initiating coverage of Net Lease Office Products (NLOP) with a Buy Rating and $60 target.
• NLOP is trading at a fraction of its book value as the Company gets lumped into the negative investor sentiment towards office buildings.
• NLOP was created and spun out of W. P. Carey (WPC) to oversee the liquidation of 59 office properties.

• The rig contract in EG has been terminated by Trident Energy (the operator) on safety concerns with the Blow Out Preventers not working properly.
• We understand that there are suitable rig(s) available that are being considered as potential alternatives.
• The three well drilling campaign (followed by the drilling of the high impact Akeng Deep prospect) could restart during 2Q24 (subject to an alternative rig being secured).

• Solid execution, high earnings visibility – Q1-3 FY3/2024 results demonstrated a continuation of positive developments in 1) sustained growth in maintenance and repair services, and 2) stronger than expected demand for modernization services.
• We believe JES is providing in-demand high-quality services driven by secular growth as building owners convert to reputable independent providers for cost management, and structural demand driving modernization of aging elevators.
• The company is on track to increase service capacity with the new JES Innovation Center Kansai (JIK) due to commence operations in April 2024.

• Today, after Hong Kong market close, the Ministry of Education issued a new draft regulation on K12 tutoring. 
• I have written before on New Oriental Education & Techn (EDU US) and China Beststudy that there is now a equilibrium reached between all parties on tutoring in China. 
• The new draft regulation basically puts it into concrete policy, which should alleviate investor concern on the sector. 

• Alibaba reported a largely in-line December quarter as lower take rate and widened loss from international commerce businesses resulted in pressured bottom line.
• The results also suggest a persisting pattern of China consumers trading down, which – along with the company’s ongoing internal overhaul – will continue to be headwind in 1H24.
• That said, we see increase of US$25 billion share repurchase program and dividend policy to well support share price at current valuation. 

• The 1Q24F outlook is still showing a decline, with a slightly increase in revenue of 2% QoQ. However, the GM is expected to decrease to 9-11% from 16.4% in 4Q23.
• Management predicts that there will be a double U-shaped recovery in 2024F. Revenue in 2024F is expected to grow annually by mid-single-digit.
• The main areas of growth for SMIC in 2024F will be in mobile phones, smart homes, IoT, and computing.

• We expect Meituan continue under pressure in the medium term due to the intensified competition with Douyin, and Meituan’s low price defending strategy in both food delivery and IHT businesses.
• Our non-IFRS net profit is roughly in-line with consensus in 4Q23 but 20%/25% lower than consensus in 2024/25.
• We downgrade the stock to SELL rating and cut TP to HK$57/share.

• Paytm Payments Bank faces regulatory scrutiny and compliance challenges, impacting its trajectory and profitability amid ongoing supervisory action by the RBI.
• With significant restrictions on operations and revenue streams, Paytm navigates a complex financial landscape, highlighting resilience amidst regulatory uncertainties and governance concerns.
• Despite proactive measures, including partnership diversification and service continuity, Paytm’s future hinges on addressing compliance lapses and fostering transparent governance to regain trust in the fintech sector.

• We retain Bank of Baroda as the value Indian bank, despite its strong share performance, for its modest valuations, healthy ROE and further improvements in delinquency metrics
• HDFC Bank remains out of favour with the market but we retain it as a buy, with its potential for medium term gains post-merger and its strong balance sheet
• Axis bank remains on our watchlist; we remain negative on State Bank of India for its delinquency risks, low core capital ratio and limited progress on returns

• For 1H24 we model EBITDAR of A$2,396m, ahead of Visible Alpha consensus of A$2,273m, which represents an EBITDAR/ASK 35% higher than 1H19.
• 1H24 will be important to help us better understand “normalised” unit cost levels, with inflation high to date, in part due to a 17% capacity deficit in 2H23.
• Qantas has seen comparable inflation to the US majors but considerably higher profitability. This should enable it to invest in product, operational and customer service improvements while protecting margins.

• In the fourth quarter of 2023, Teradyne, a provider of computer-controlled configurations, and collaborative robots, reported financial results in line with its guidance.
• The company highlighted strong performance in the Memory Test sector, which saw the double year-over-year revenue from DRAM testers due to HBM demand, and in the Industrial Automation marketplace.
• Additionally, Teradyne experienced robust growth sequentially in sales from its Robotics team, as it elevated shipments to meet the record backlog of its UR20 Cobot at Universal Robots.

• The world does not need another opinion on the Vision Pro, the Apple mixed reality device whose launch coincided with Meta earnings, but I will share mine so I can understand my thought process in the future.
• I have the right to be wrong. The revenue share of Meta’s FRL is so small it might seem redundant to give it so much limelight.
• But, directionally, it’s an important category for the company. With a launch of this scale, the hyperbole and sensationalism rhyme with things we’ve seen in decades past.

• Imagine a racetrack with 10 horses. The first two horses (NFLX and DIS) are peeling away from everyone else; with NFLX still having a sizeable lead over DIS.
• But the stage is set for DIS to start accelerating faster than NFLX.
• This is how I would describe the US Media sector today, and Disney’s Q1 results released yesterday only serves to bolster that narrative.

• Alibaba’s revenue grew by 5% YoY and its operating margin improved by 2 percentage points YoY in 3Q24.
• We believe the company turned its focus from margin improvement to revenue growth.
• We set the upside at 20% and the price target at HK$90 for March 2025. Buy.

• A company that is geared to Japan’s macro revival with additional micro catalysts. 
• Ownership of financial companies which are set to benefit from a normalisation of Japanese monetary policy.
• The low Price to Book means the company will need to keep up momentum on its capital management plans to  stay in the Prime Section of Topix.

• L’Oreal SA (OR FP) is the largest beauty company in the world, with a 15% global market share.  The second place in contrast has only around 5% market share. 
• The company has been excellently managed, and out-performed the overall global beauty industry growth by an average of 5% over the last 3 years.  However, growth could be slowing down.
• L’Oreal is now trading at 34x forward PE, which is a near 100% premium over the average of European consumer staples, and near a multi-decade high. 

• Bank Mandiri (BMRI IJ) stood out from its peers with higher loan growth and lower cost of credit with PPOP growth of +17.3% YoY and its ROE reaching 23%. 
• The bank experienced a slight decline in NIM in 4Q2023 but asset quality remains solid and its digital initiatives continue to reduce costs and attract new users.
• Bank Mandiri‘s guidance for 2024 is more positive than peers for loan growth, as it continues to push out its value chain lending strategy into higher-yielding segments. Valuations remain attractive.

• Not so long ago, Disney’s share price was nearing the $200 mark, despite the pandemic’s severe impact on its Parks and Resorts business.
• Fast forward to the present, and even with the parks posting record results, Disney’s share price has fallen to levels not seen in a decade, raising the question: what happened?
• Several factors are at play, including challenges within the studio arm, ongoing decline of its legacy media operations, and Big Tech’s incursion into sports media.

• Despite upping the FY24 guidance in the prior quarter (Q2FY24), KPIT is confident of beating even the raised guidance, led by strong Q3FY24 performance and an upbeat outlook.
• Despite accelerated revenue in H1FY24 from the Honda engagement, Q3FY24 saw robust revenue growth of 4.3% QoQ in CC terms. EBITDA margin expanded to 20.6% vs 20% QoQ. 
• KPIT’s new venture, Qorix, is coming along well and could prove to be transformative. This could enable KPIT to become a product company, alongside being a high-growth service company.

• The American Airlines Group reported adjusted pretax profit of $257 million for the fourth quarter and approximately $2.5 billion for the full year 2023.
• This result was driven by the strength of the network, demand for products, and execution by the team.
• Positive indications from the group include historically strong operation with the production of record free cash flow and a strengthened balance sheet through debt reduction.

Key points (machine generated)

• BV Financial recently completed its conversion from a mutual holding company to a full-converted stock company.
• The bank has consistently achieved a return on equity of 10-11% in recent years.
• Despite its significant growth, BV Financial’s securities represent only 5% of its total assets of $933 million.

This article is sourced from an online content aggregator through publicly available sources and is displayed below for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• KLA Corporation saw a revenue of nearly $9.7 billion in 2023, marking a decrease of 8% compared to the previous year.
• Despite less leading-edge investment in both logic and memory, legacy node customers and the semiconductor infrastructure assisted in exceeding the initially projected revenue.
• Business segments such as automotive, specialty semiconductor process equipment, and infrastructure for wafer and mass manufactures experienced growth in 2023.

• Readthrough: Automotive Applications End-Demand — China Market Soft But Touch and Dimming Technology is Expanding
• Readthrough: Panel Makers Constraining Supply in 1Q24 to Protect Pricing
• Readthrough: Customers Are Restocking Notebooks in 1Q24E, PC Replacement Cycle is Coming