Equity Bottom-Up

• We don’t consider Douyin an existential threat to Meituan, but we see the company’s growth increasingly be constrained by its business model itself.
• We believe Meituan will disappoint the market with regard to its bottom line growth in 2024, barring major overhaul of its new initiative businesses.
• Meituan will have to make tough choice between growth and profitability and either scenario won’t bode well for its valuation. We value the company at RMB410 billion, meaning 18% downside.

• Water Oasis (1161 HK) reported 16%/65% YoY revenue/PAT growth for FY23. For H2 FY23 revenue/PAT decelerated to 7% YoY/31% YoY. The company guided a positive outlook for FY24.
• Net cash increased to 271 mn HKD, representing 28% of market capitalization (990 mn HKD), as the company benefitted from positive working capital cycle changes. 
• Water Oasis (1161 HK) declared a 7-cent dividend for H2 FY23, bringing the overall dividend for FY23 to 14 cents (9.6% div yield). 

• Haier Smart Home (6690 HK)‘s acquisition of Carrier commercial refrigeration business is earnings accretive. It will also be strategically positive to its growth outlook. 
• With net cash of Rmb17.3bn, HSH has no problem funding the deal internally. Instead of earning a single-digit return on cash, the business’ 9% earnings yield is attractive. 
• The transaction will extend HSH’s application scenarios from household to commercial while elevating its competitiveness in Europe and allowing it to capture the B-end customers. 

• Recent business updates of WuXi Bio led to a decline in WuXi AppTec’s share price and changed investors’ expectations for CXO. Now is the time to adjust forecasts.
• We analyzed the growth rate of various business of WuXi AppTec in 2024. In a neutral scenario, growth next year could fall short of management’s guidance.Reversal in 2025 is uncertain.
• If WuXi AppTec “unexpectedly” receives blockbuster orders, which are large enough to hedge against the downward trend of WuXi AppTec’s other businesses, then it will help to change performance expectations.

• LICHF reported a decent Q2FY24 led by a strong NIM (3.04%). Growth has been somewhat subdued due to technical issues, however, these have been resolved and October is tracking well.
• LICHF reiterated its full-year FY24 NIM guidance at 2.6-2.8%. Credit cost, except for one-off item of INR 104cr in Q2FY24, continues to be below 50bp annualized.
• Despite a subdued H1FY24, LICHF has maintained its FY24 AUM growth guidance to 10%+. This implies that LICHF can grow AUM at 5%+ QoQ over the next two quarters.

• Marvell reported earnings recently, and I wanted to mention that at least before I continued onwards because that is a good context-setting event for the industry day.

• Revenue exceeded expectations, but the mix beneath the results was illustrative.

• Datacenter revenue grew 20% QoQ, cloud over 30% QoQ; while networking was strong, they guided for a 40% QoQ decline, consistent with networking OEM results.

• 2023 NRDL negotiation results were released. We’re seeing the rules of NRDL renewal negotiations tilt toward innovative drugs, leading to lower price reduction, but there has been no fundamental change.
• The record-breaking US$8.4 billion deal involving BMS and Sichuan Biokin Pharmaceutical (688506 CH) (SystImmune) is not without risk, though. We still recommend to remain rational.
• The issue facing Shanghai Haoyuan Chemexpress (688131 CH) is higher revenue but lower margins. Valuation will likely experience further declines due to lock-up expiry and share reduction.

• Beijing and Shanghai laid out long waited stimulus policies on property market, include 1) lower property down payments ratio;2) lower mortgage loan rate;
• 3) lower recognition standard for ordinary home. The key is to encourage households to add leverage.
• We treat the financial stimulus as one-off positive shock to the home transaction markets in the two cities,  especially benefiting 1Q24 sales for Beike due to…

• Overall, it was a strong week for Taiwan Tech. TSMC and Mediatek showed strong performances, as well as key names we like such as Yageo and Himax.
• AI-Related Taiwan plays showed relative weakness. This weakness interestingly happened during a week when NVIDIA Corp (NVDA US) performed well.
• According to insight provider Patrick Liao, MediaTek WiFi 7 chip competition is likely to become fierce in 2024.

• InterGlobe Aviation Ltd (INDIGO IN) (Indigo) has turnaround and is on path to achieve record profits in FY2024 on strong demand, stable FX and lower jet fuel prices 
• However, engine problems will hurt capacity deployment in 4QFY24 and FY2025, and the engine manufacturer has been very vague and unreliable in presenting its remedial plans 
• Share price near all-time high and valuations (PE, EV/EBITDAR) are expensive compared to global LCCs. TP of INR2,513 (14% DOWNSIDE) pegged to 15x FY2025 PE (top-end LCC cycle)  

• In 3Q23, Boryung Pharmaceutical (003850 KS) reported 15% YoY growth in revenue to KRW208B, driven by 7% YoY growth in prescription drugs, the slowest growth in the last three years.
• Prescription drug revenue growth slowed due to the huge shortfall in revenue from the diabetes drug Trulicity caused by supply shortage. We expect slowdown in Trulicity revenue is temporary.  
• Despite losing patent protection in February 2023 on ARB monotherapy, Kanarb drug family is showing no fatigue due to increasing preference for combination drugs in the market.  

• Olympic Industries (OLYMPI BD) sustained and improved profitability despite the revenue drop. 
• Square Textiles (SQTT BD) faced challenges in FY23 but now seems to be turning around. 
• Bashundhara Paper Mills (BPML BD) saw a weak performance driven by lower profitability due higher interest rates on borrowings.

• FedEx Corp (FDX US) (FedEx) will release its 2QFY24 results on 19 Dec after market close. Closely watched as it is the bellwether for global trade and commerce  
• Cost reduction initiatives has delivered, and resurgence in e-commerce activities across Asia Pacific could potentially provide positive earnings surprise    
• Target price US$299 (7% UPSIDE) based on 15x CY2024 PE (FedEx’s historical mean). Our recommendation is to give FedEx a miss, too little upside for the risk 

• We rate Japan Exchange as our 2024 high conviction buy in exchanges, for its attractive valuations, as well as its potential for increased market activity and big data revenue growth
• We believe that Japan Exchange is the exception to the rule that DM exchanges need to diversify their revenue bases, as it is under less de-regulatory pressure
• We also stick with Hong Kong Exchange as the deep value pick, as well as Deutsche Borse; we remain negative on Coinbase

• HCG reported a strong Q2FY4 with revenue growth of 16% YoY and 5.7% QoQ. EBITDA margin expanded 120bp QoQ to reach 17.8%.
• Emerging centers are scaling up well with revenue growing at 29% YoY in Q2FY24. Matured centers’ revenue also grew at a healthy pace of 13% YoY.
• HCG is continuing to upgrade infrastructure of existing hospitals. It added 3 robotic surgery machines across 3 centers. It operationalized 4 new LINACs and plans to install six more LINACs. 

• XPER is streamlining its operations by divesting its AutoSense and image sensing product lines to strategically refocus on the burgeoning entertainment sector
• XPER is selling AutoSense and the image sensor business to Tobii for $42.7 million plus a performance fee
• XPER estimates revenue loss from the divesture would be approximately $30 million with adjusted EBITDA moving up

The Brunner Investment Trust (BUT) has two co-managers, Christian Schneider (CIO global growth) and Julian Bishop (global growth specialist), who are supported by deputy managers Simon Gergel (CIO UK equities, UK dividend and value specialist) and James Ashworth (global growth specialist). BUT may be considered as a ‘fund for all seasons’ given its steady outperformance in recent years in widely different market environments. The trust’s NAV performance also stands out positively compared with its 12 peers in the AIC Global sector, ranking first over the last three years, second over the last five and fourth over one year. BUT’s dual mandate of both income and capital growth and its straightforward portfolio of listed global equities may be an ideal way for investors to gain exposure to overseas companies.

The Merchants Trust (MRCH) manager, Simon Gergel at Allianz Global Investors, has been at the helm for the last 17 years during a variety of market environments. He has remained true to his investment process, seeking high-quality companies with solid fundamentals that are trading on reasonable valuations. The manager is very encouraged by the current valuation backdrop as, in aggregate, the UK market is trading at the low end of its 20-year range and within the market there is a wide dispersion of valuation multiples. A large proportion of UK stocks, including those of quality businesses, are trading on forward P/E multiples of less than 10x, providing Gergel with a large pond in which to fish. His approach has proved successful with mid- and long-term outperformance of MRCH’s broad UK market benchmark. With the trust’s dual mandate of income and capital growth, it offers an attractive 5.2% dividend yield and has grown its annual dividends for the last 41 consecutive years.

• Ocean Power Technologies reported 2QFY24 revenue of $0.9 million, up 193% Y/Y from $0.3 million in 2QFY23, driven by sales of WAM-V autonomous vehicles, the contract with the Department of Energy (DOE), and an increase in strategic consulting services.
• The previous quarter had revenue of $0.2 million from leased boats.
• The company reported 2QFY24 gross profit of $0.5 million, compared with a profit of $39,000 in 2QFY23.

• There have been several developments in the Southeast Asian e-commerce space over the past few days that we believe will have a negative impact on Sea (SE US)’s financial performance.
• A few days ago, TikTok, owned by ByteDance (1439927D CH), announced a $1.5bn investment in Tokopedia.
• Today, Nikkei reported that Alibaba (ADR) (BABA US) has infused an additional $634m into Lazada, its Southeast Asia e-commerce unit, to enhance its competitive position in the face of escalating competition.

• TSMC: 10.4% Premium — Decent Level to Short the Spread At
• ASE: 6.2% Premium — Wait for 5% as the Level to Go Long the Spread
• UMC: Trading at 0.8% — Wait for 1.5% or Higher

For our next Corporate Webinar we are glad to welcome Lendlease Global Commercial REIT’s CEO, Mr Kelvin Chow.

In the upcoming webinar, Kelvin will share a short company presentation after which, he will engage in a fireside chat with Smartkarma Insight Provider, Angus Mackintosh. Angus 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 the festive season, one of the attendees will also be awarded an Amazon Kindle as part of our lucky draw.

The Corporate Webinar will be hosted on Tuesday, 9 January 2024, 19:00 SGT.

About Lendlease Global Commercial REIT

Lendlease Global Commercial REIT’s portfolio comprises two leasehold properties in Singapore, Jem (office and retail property) and 313@somerset (retail property), and three freehold Grade A office buildings, Sky Complex, in Milan. It has a total net lettable area of approximately 2.1 million square feet, with an appraised value of S$3.65 billion. Other investments include a stake in Parkway Parade and the development of a multifunctional event space on a site adjacent to 313@somerset.

• Bajaj Finance Ltd (BAF) reported a decent Q2FY24. AUM growth came in at 33% YoY. Profitability was also strong with ROA and ROE at 5%+ and 24%+, respectively.
• While, the overall outlook remains robust, BAF may see some NIM pressure due to rising cost of funds. However, majority of this is likely to be offset by operating leverage.
• BAF’s initiative to enter into new segments like microfinance and new car financing is progressing well. New car financing expansion is already ahead of plan with presence in 85 locations.

• AMD’s resurgence against a dominant Intel saw the company grow annual revenues >4x between 2017 and 2022
• FY 2023 revenue is likely to be down roughly $1 billion or ~4% YoY.
• We expect a combination of renewed Data Center market share growth plus a grand entrance into the AI acceleration segment will restart the party all over again in 2024. 

• Local news reported two positive developments for Zai Lab’s FcRn inhibitor Efgartigimod: (1) Rival CSPC/HarbourBio withdrew BLA for competing drug Batoclimab (HBM9161), (2) Efgartigimod was included in 2024 NDRL;
• We raise Zai Lab’s 2024 top line by 8.8% but keep non-GAAP operating loss largely unchanged；
• We raise TP by US$2 to US$20 and maintain SELL.

• The stock of Poly Development and Holdings Group Co. Ltd. jumped 7.6% Tuesday after the leading developer unveiled an up to 2-billion-yuan ($279 million) share buyback aimed at arresting its sliding equity price.
• Shares of Poly Development closed at 10.34 yuan in Shanghai Tuesday, compared with 9.61 yuan at Monday’s closing. The stock has nearly halved from the 18.59-yuan peak in April 2022 after the persistent downturn in the property market.
• Poly Development, China’s largest developer by sales this year, said late Monday that it plans to buy back 1 billion yuan to 2 billion yuan of its own shares in the next three months.

• A meeting with Ace Hardware Indonesia revealed a newfound enthusiasm and confidence in the outlook for growth with new store formats and an omnichannel approach as key future drivers. 
• The company will accelerate its store buildout in 2024 with plans for 20 new stores versus 13 in 2023 with new format stores taking the lead, with an emphasis ex-Java.
• Ace Hardware Indonesia (ACES IJ) will also accelerate the buildout of smaller-sized Ace Express stores with a pilot started this year.  Recent share price weakness looks unjustified.

• Strong execution on multiple fronts – Q1-2 FY4/2024 results were ahead of expectations, with sales growth of 205.2% YoY and operating profit growth of 572.1% YoY.
• Whilst acquisitive growth was to be expected, HEROZ has also demonstrated 1) organic growth in its AI/DX Service with underlying sales growth of 14.6% YoY,
• 2) increased the proportion of recurring revenue to 62.4% of total sales and thereby continuing to improve earnings visibility

• Cash-strapped developer Dalian Wanda Group Co. Ltd. can breathe a temporary sigh of relief having reached an agreement with investors to avoid an immediate repayment of more than 40 billion yuan ($5.6 billion) for an unfulfilled flotation of its property management unit.
• Wanda faced having to repay a group of investors their 38-billion-yuan investments plus interest under a 2021 agreement if the developer failed to list its light-asset unit, Zhuhai Wanda Commercial Management Group Co. Ltd., by the end of this year.
• As Zhuhai Wanda’s listing plan failed despite four attempts, the repayment obligation became a ticking time bomb hanging over the company, which is struggling with capital drains amid plunging sales.

• China Tourism Group Duty Free Corp Ltd (601888 CH)  (CTG) share price has plunged by 63% despite solid 9M23 profits growth and cash flushed balance sheet 
• Underlying fundamentals is solid, Chinese people still buying duty free goods, albeit tilting towards value than decadence purchases 
• CTG is cheap relative to its own history on all valuation metrics (PE, P/Book, P/FCF) and many technical indicators suggest it is in OVERSOLD territory 

• Li Auto’s deliveries and revenues surged by three digits since 3Q23.
• The company is building new factories in Changzhou and Beijing. 
• However, we believe the stock is overvalued apart from comparing with Tesla.

• AKR Corporindo (AKRA IJ) recently hosted an analyst meeting where it provided some positive guidance for FY2024, with projections of double digit net profit growth with growth across all segments.
• The core trading and distribution business is expected to see positive growth in 2024 with  the real kicker to come from its JIIPE industrial Estate plus recurrent income from utilities.
• AKR Corporindo (AKRA IJ) is an increasingly holistic play on Indonesia’s growth through its fuel and chemical distribution, which is being hosted by smelters and the EV battery complex.

• Adelson family interests have sold 10% of their LVS equity to acquire a pro basketball franchise. This triggered am 8.5% decline in the stock when it was actually  bullish.
• The market has not yet grasped the magnitude of  the Asian  gaming  recovery arc which points to 2024 reaching baseline 2019 arrivals and GRR pace by mid-2024.
• LVS has the scale and amenities to outperform peers but this  is  not  yet reflected in its trading  range dead pooled in  the $40s.

• JWD Acquisition: Infroneer acquires Japan Wind Development for ¥200 billion, sparking a ¥75 billion market cap dip and concerns about potential overpayment.
• Valuation Analysis: Using DCF and comparable transaction values, estimates suggest JWD’s equity value may be far lower than the agreed-upon ¥200 billion.
• Need for Transparency: Infroneer’s claim of fair value requires scrutiny. Market suggests an estimated fair value of ¥125 billion, emphasizing the need for detailed information on the acquisition.

• Consumption of used products is rising fast as exemplified by the rise of 2nd Street. 
• Operated by Geo Holdings (2681 JP), once just a DVD rental business, it is now Japan’s largest used goods retailer.
• Sales are booming in a market increasingly focused on thrift and re-use, allowing 2nd Street to even take on the might of Mercari.

• IDFC First Bank Limited (IDFCBK IN)  has built a banking franchise that holds the best promise among the mid-sized banks in India for long-run outperformance.
• A high-yielding and retail-oriented loan book, track record of pristine asset quality, superior funding profile boosting best-in-class retail deposit base, and incrementally improving unit economics.
• We value the stock as a long-term Buy, with 35% upside in near-term, as the bank continues to realize the benefits of its increasing scale on its earnings profile.

Templeton Emerging Markets Investment Trust’s (TEMIT’s) co-managers Chetan Sehgal (lead manager) and Andrew Ness consider that the case for emerging markets is not well understood. Hence, they believe that the regions remain under-owned, undervalued and under-appreciated, which provides an interesting opportunity for global investors. There are several powerful trends supporting the superior economic growth prospects of emerging markets versus those in developed regions, including demographics, urbanisation, higher consumption and technological innovation. Emerging markets also remain relatively attractively valued. TEMIT’s performance versus the MSCI Emerging Markets Index troughed in April 2022 and is in a steadily improving trend. The trust’s results tend to be better when investors focus on company fundamentals, which drive equity returns over the long term, rather than considering near-term macroeconomic events.

• Takachiho Koheki is a trading company highly specialized in electronics technology, introducing the world’s cutting-edge electronics products to Japan ahead of competitors, positioned as a specialized technical group with engineering employees accounting for 42.2% of its workforce.
• The company’s electronics products and IT solution services help solve modern social issues of great concern such as crime control and prevention, labor shortages and labor savings, and climate change and disasters.
• In 1H FY24/3, the company reported consolidated net sales of ¥12,729 mn (+14.5% YoY), operating profit of ¥713 mn (+22.2% YoY), ordinary profit of ¥1,057 mn (+18.2% YoY), and profit attributable to owners of parent (hereinafter, net profit) of ¥717 mn (+9.2% YoY).

• So there we were today, scanning the latest corporate filings to the Securities and Exchange Commission , when we noticed that Johnson Controls ($JCI) had filed its latest earnings report .
• We started reading, and were immediately stopped short by this earnings adjustment, right there in the second bullet point: Fiscal Q4 GAAP EPS of $0.80; Q4 Adjusted EPS of $1.
• Hold up — what cybersecurity incident? When did that happen, and what has Johnson Controls said about it so far? 

• Money Forward’s stock price has declined by 2% YTD versus a 23% gain for the overall market. Technically, the stock is approaching oversold levels
• We see 38% upside for Money Forward’s stock price. At 5.5x EV/revenue, the stock is trading at a 50% discount to global peer, Intuit
• We believe that investors are under pricing the size of the Japanese market for cloud accounting and operating leverage from penetration into mid-cap corporate market

• Revenue for November 2023 was NT$206.03 billion, a decrease of 15.3% MoM, and down 7.5% compared to the year ago period.
• Based on the guided midpoint, December revenue will show a further 20% MoM decline
• We estimate FY2023 revenues of $68.8 billion, down 9.4% YoY. 

• China announced game approval for November batch. The number of games approved is in-line with the pace of approval in recent months.
• The Pace of China game approval stays flattish, at a much slower pace than pre-tightening.
• Netease scored one approval while Tencent has been zeroed for five rounds.

• The WiFi technology was dominated by Broadcom Corp Cl A (BRCM US), but Mediatek Inc (2454 TT) has to break into the PC and smartphone markets in 2024F.
• There are speculations that Apple might use MediaTek’s WiFi 7 solution in 2024F or consider MediaTek as a potential chip provider.
• MediaTek will be using 6nm technology for WiFi 7, replacing the current 28nm technology used for WiFi 6.

• CPMC Holdings (906 HK) may potentially receive another takeover proposal from ORG Technology Co., Ltd. A (002701 CH) which has a 22% market share in the industry.
• ORG has every reason to launch such a proposal and given its operational and financial performance, it looks to have the capability to realise good synergy.
• CPMC still looks inexpensive relative to the industry based on its PER valuations. No matter what, the 4th largest player Sunrise Group (002752 CH) will now become interesting.

• OUE Commercial REIT (OUECT SP) is one of Singapore’s best-quality commercial REITs, with a well-diversified and high-quality portfolio of assets across office, hospitality, and retail.
• A recent Smartkarma webinar with the management revealed a positive outlook for the company’s portfolio across the office, retail, and especially hospitality with some well-times asset enhancement initiatives bearing fruit.
• OUE Commercial REIT has strong sustainability credentials, both through its green-certified buildings, and an increasing portion of sustainable finance, with some well-timed recent financing. 

• KT&G is a high conviction pick in 2024.We believe KT&G Corporation (033780 KS) is likely to announce cigarette price hikes in 2H 2024.
• Three major reasons include a) no cigarette price hikes in nearly 9 years, b) Korean legislative election will be in April 2024, and c) reduce government tax revenue shortfall.
• We believe that the Korean government could raise cigarette prices to about 7,000 won to 8,000 won per pack from current price of 4,500 won. 

• RPSGV’s BPO business, Firstsource Solutions, is stabilizing and reported flattish QoQ revenue growth. EBIT margin has also bottomed out and is now at around 11%, an expansion of 300bp YoY.
• FMCG Business continues to maintain an annualized revenue run-rate of INR 400cr+. The Sports business generated revenues of INR 50cr+ vs INR 15cr YoY. 
• The FMCG and the Sports businesses hold tremendous scalability potential going forward. The IPL Lucknow franchise also owns a team named Durban in the South Africa T20 league.

Baillie Gifford China Growth Trust (BGCG) invests in China, focusing on innovative, rapidly growing companies best positioned to benefit from China’s still favourable long-term economic outlook and the structural trends that should drive equity markets for years to come. Key portfolio themes include e-commerce, food delivery, domestic brands, semiconductors, robotics and automation, and renewable energy. The trust’s relaunch in September 2020 coincided with a series of challenges for the Chinese economy, investor confidence and the growth companies BGCG favours, so performance has lagged the benchmark. However, the operational performance of most of BGCG’s holdings is strong, their prospects are very positive, and the trust’s managers believe that it is only a matter of time until confidence returns and share prices more accurately reflect these robust fundamentals.

• Alkem Laboratories Ltd (ALKEM IN) is flying high on strong Q2 numbers. The shares rallied 23% since the company announced Q2FY24 result in early November, widely outperforming Nifty Pharma index.
• In Q2FY24, revenue grew 12% YoY, and gross margin expanded 380bps to 61.4% backed by lower raw material cost and lower intensity of price erosion in US market.
• For the U.S. business, Alkem is looking at high-single-digit growth in dollar terms for FY24. The company has reiterated FY24 gross margin guidance at 59.0–59.5%.

• Li Ning (2331 HK) announced yesterday that the company has acquired a HK office project, the Harbour East, from Henderson Land, for a total consideration of HKD2.2bn. 
• The acquisition is quite unexpected given that Li Ning has had a clean corporate governance track record.
• The company now trades at 11x foward PE, assuming no growth in 2023 and 2024 earnings.  It is now a value stock, though the visibility is very low. 

• On Monday after the close, trading house Yamazen Corp (8051 JP) announced a secondary offering where five bank shareholders would sell ~6.7mm shares (including greenshoe). 
• It appears as if most of the banks are selling everything, making it about US$50mm, 50 days of ADV, and about 7% of  shares out. 
• But this should get swallowed pretty easily. The stock is DIRT CHEAP. The caveat? Crossholders and insiders will still own 45-48% post-offer. 

• GoTo Gojek Tokopedia (GOTO IJ) has announced that it will sell a controlling 75.01% stake in Tokopedia to TikTok in order to create Indonesia’s leading e-commerce platform.
• There had been earlier indications that a deal was in the offing but the size of TikTok’s stake was surprising plus it has committed to invest US$1.5bn in Tokopedia. 
• GoTo will retain a 24.99% non-dilutive stake and will receive an ongoing revenue stream from Tokopedia in line with its scale and growth contributing directly to its EBITDA. 

• Multiple signs are flashing that the reset phase of the silicon cycle is beginning to rebound.
• On November 28, WSTS (World Semiconductor Trade Statistics) announced its Fall forecast for 2023 and 2024, marking the first upward revision in the current down cycle, revising up both 2023 to a single-digit decline, and revising up 2024 growth to +13.1%, due to better-than-expected demand in Apr-Jun and Jul-Sep.
• Quarterly worldwide billings data shows the YoY percentage decline marked the bottom in Jan- Mar at -21.3% YoY, shrinking to only -4.5% in the Jul-Sep quarter. 

• News came out today that Hollysys (HOLI) is being acquired by Ascendant for $26.5/share . So I sold my shares for $24.74 today.
• And closing this at $24.88. Only a 7% spread, and there could be some delays before this closes.
• Was a nice trade and a 43% gain since dedicating a full write-up to it in July this year.

• Among priority measures for FY24/9, JBS management is particularly focused on rolling out global licensing business for major enterprise customers, as well as strengthening cloud AI proposal capabilities.
• The strategic business alliance concluded with Crayon Group at the end of August enables JBS to offer global support services to customers outside the coverage of JBS overseas offices.
• The two partners will also collaborate on developing AI and security solutions mainly for Microsoft Products.

• Pharmaron’s performance has shown a clear downward trend this year, and the growth in 23Q4 may be even lower. That means this year’s results could fall short of management’s expectations.
• The essence of unsatisfactory profit margin is due to low capacity utilization/management efficiency.The underlying reason is the sharp decline in drug R&D demand due to the deterioration of financing environment.
• Pharmaron seems ill-prepared in peptide CDMO, and its performance would further lag behind Wuxi AppTec in the future. Pharmaron may not be able to contribute alpha during industry downturns.

• The investment case revolves around the Company’s strong long-term fundamentals
• An attractive and complementary skincare-focused brand portfolio centred on flagship Nivea brand in the mass segment, Eucerin in the growing dermocosmetics category and La Prairie in the higher-margin luxury segment.
• Less expensive option than L’Oréal to gain exposure to an attractive skincare portfolio. The Company’s business model should prove resilient in a more challenging marker environment

• The broader sentiment remains positive, with markets primarily driven by participation from foreign investors, wise to increase the trailing stop at 20,600 for any possible change in trend.
• We have already highlighted the weak operational performance of Whirlpool of India (WHIRL IN) , the company’s tax woes continue. 
• Names covered in this insight include Whirlpool of India (WHIRL IN) , Thyrocare Technologies (THYROCAR IN), Paytm (PAYTM IN) and Flywire Corp (FLYW US) 

• Recently, Yunda Holding has lost volume share to rival STO Express 
• One reason could be Alibaba’s transfer of its 25% stake in STO to CaiNiao
• For Yunda, this dynamic adds to intense near-term pressure on margins

• Travelers increased by 75% YoY and traveling spending increased by 144% YoY in China in 9M2023.
• TCOM’s total revenue rose by 31% in 3Q23 over 3Q19 before COVID.
• We conclude an upside of 33% and a price target of US$43.70.

• Max Healthcare Institute (MAXHEALT IN) has entered into a share purchase agreement for acquisition of a 550-bedded Sahara Hospital in Lucknow, Uttar Pradesh for an enterprise value of INR9.4B (~$113M).
• The Hospital currently serves ~2 lakh patients every year, with FY24 revenue run rate of INR2B. It has a renowned center of excellence for Neurosciences.
• The Hospital has a potential to quickly ramp up beds in existing building and expand medical programs such as oncology, transplants, robotics, etc.  

• Rohm’s share price was up 6% on Friday, December 8, on the news that the Japanese government will subsidize its collaboration with Toshiba in power semiconductors.
• The subsidy will amount to one-third of the ¥388.3 billion yen the two companies plan to invest in Silicon Carbide and Silicon devices for the electric vehicle and other industries.
• Rohm hit bottom on October 31, management cut FY Mar-24 guidance on November 1 and the market is now looking to recovery. Toshiba will be delisted on December 20.

• Japan Airport Terminal Co (9706 JP) (JAT) has turnaround and set to resume its earnings growth trajectory thanks to Japan’s brisk air traffic recovery   
• However, future growth is increasingly challenging as domestic traffic stalls, and international traffic growth relies on inbound tourists. What happens if tourists decide to go elsewhere?
• Target price JPY5,364 (18% DOWNSIDE) based on 12.7x FY2024 EV/EBITDA (peer group average). SELL, grossly overvalued, Mexican and Chinese airports are far more attractive

• BYD offers a reward up to RMB5 million for reporting defamation.
• NIO denied further layoff after releasing the 3Q23 results with both revenue and loss increasing significantly.
• Meituan’s GMV of live broadcasting food delivery reached RMB2 billion.

• Pioneer Credit Limited (ASX:PNC) is one of the leading acquirers and managers of impaired credit in Australia and has gained its status by maintaining positive customer engagement, an unblemished compliance record with ASIC, and strong relationships with Australia’s largest bank and non-bank lenders.
• PNC purchases debt from 18 different Australian vendor partners with long-term partnership purchasing arrangements in place with Commonwealth Bank of Australia (ASX:CBA).
• The company’s AGM updates highlighted the strong position PNC occupies in the marketplace and the expected improvement in NPAT following debt refinancing currently in progress. 

• The REIT issuance of the Hangzhou and Guizhou logistics assets of Shenzhen International (152 HK) has entered the final stage, reflecting its ability to realise asset values.
• We estimate SZI may book gain of around Rmb300m in 2H23, or more likely 1H24, and this will support good HoH and YoY rebound in its earnings. 
• These assets only accounted for 8% and 5% of SZI’s total portfolio area and value, respectively, suggesting there is still immense room for capital gain from its remaining assets.

• Now that the pandemic has passed, Yiling’s performance has to face a sharp decline due to the high base before, but in our view, the situation is not so bad.  
• According to the management,sales of cardiovascular and cerebrovascular products would gradually increase to make up for the sales decline of Lianhua Qingwen, which would still be higher than pre-pandemic level.
• About 15-20% performance growth is still reachable in the future. PE of 20-30 is a reasonable range for Yiling. Being included in CSI 300 Index helps to improve the liquidity.

• China’s innovative drug sector remains a liquidity driven sector, as investible choices are limited, which include Akeso and BeiGene as our BUY ideas.
• We also notice positive change in Innovent but opt to keep rating unchanged;
• We upgrade BeiGene from SELL to BUY and maintain SELL on RemeGen, Innovent, JUNSHI and ZaiLab. We discontinued coverage on Legend Biotech.

• On December 8th, GUC reached its daily limit at the closing price, but the company did not consistently demonstrate an agreeable attitude.
• The “AI” is an explicit knowledge for today, while GUC is a company of project based. 
• GUC’s monthly revenue decreased by 22.15% YoY in November 2023.

• We summarized some important opportunities and trends that we think would emerge in the pharmaceutical industry in the future.
• Considering the current unfavorable financing situation of Biotech in the domestic primary market, we anticipate that there would be significant discounts in the sale of equity in the future.
• Topchoice has not yet out of trouble. Most of its business diversification could end in failure. It is difficult to support high valuation only by one hospital and one region.

• Capitalizing on growth opportunities – Q1-2 FY3/2024 results were ahead of company guidance, driven by the Funeral Services segment, as attendee numbers and refreshment sales grew, and new funeral hall openings saw higher than expected utilization rates.
• We believe this indicates the strong competitive positioning the company has as the market-leading funeral services operator in the Tokyo metropolitan area.
• With effective cost control in the Information and HR segments, the company has high earnings visibility and raised FY3/2024 company guidance, as well as increasing the planned dividend payout ratio to 32.5% from 30%.

• ~$900 million supercomputer deal is off the charts compared to all previous deals
• Without the deal, Cerebras would likely soon have run out of cash. With the deal, Cerebras is effectively working as a supercomputer contractor for G42 for the next several years
• Three supercomputers to be built in the US, we suspect the remaining six to be built in the UAE. That’s likely to raise some eyebrows. 

• The shares are down 27% from their May high, largely discounting excessive inventory and a decline in profits that is likely to continue through next March or June.
• Inventory adjustment, the revival of semiconductor, factory automation and medical related demand, plus the leveling off of depreciation, should enable a return to growth after that. 
• Projected valuations are at the low end of their 10-year ranges. Buy into the current weakness, keeping in mind that 1Q results are likely to be weak.

• In Q2FY24, Ipca Laboratories (IPCA IN) reported 10% growth in domestic formulation business, driven by 12% growth in pain management. In FY24, domestic formulation is expected to growth 12–14%.  
• Ipca now holds 52.67% stake in Unichem Laboratories (UL IN). Ipca is confident to clock revenue of INR1.7–1.8B and EBITDA of INR300M from Unichem within two years of acquisition.
• As facilities are back onstream, Ipca is augmenting the supply chain and revalidating of all the formulations and updating them. Shipment to the U.S. may begin in Q1FY25.

• In Q2FY24, Avid Bioservices (CDMO US) reported 27% YoY and 33% QoQ revenue decline to $25.4M, due to annual maintenance shutdown and reduction in process development services from early-stage customers.
• During Q2FY24, Avid Bioservices signed $35M in net new business orders from both new and existing customers, resulting in a record high backlog of $199M, up 35% YoY.
• Avid Bioservices has lowered FY24 revenue guidance to $137–147 million from $145–165 million. For reference, the company reported revenue of $149 million in FY23.

• IBA (leading airline intelligence and appraisers) analysis suggests aircraft shortage will persist over the mid-term, pushing rates for newbuilds and especially mid-life assets much higher
• Our TP of US$81.45 is premised on 0.94x 2024 P/BV, but it is evident that accounting book value is significantly below current market values, implying a higher fair value 
• Stay invested, the upcoming 4Q23 results will uncover earnings boost from off-hire aircraft extension at premium rates, elevating Aercap’s attractiveness 

Shield Therapeutics’ US commercialisation efforts continue to gather steam, with prescription volumes gearing up in Q323 (27,750 prescriptions, a 76% sequential growth over Q2 and higher than the combined H123 figure of 26,284) and net selling price making a strong recovery after dipping in H123 (+24% to $148/prescription). US revenues grew to $4.1m, higher than the combined H1 figure of $3.7m. First-time prescribers grew 27% q-o-q and new prescriptions were up by 87%. More encouragingly, the clinical utility of Accrufer continues to be considered favourably by prescribers, reflected in the 77% repeat writers from Q223. Management has guided for FY23 total prescriptions to be between 100k and 130k, requiring a sequential growth of 65.6% at the lower end, which we see as undemanding given the Q3 run rate and growing momentum (as the expanded salesforce gets more entrenched). We maintain our full-year estimates and continue to value the company at £390.4m.

• Strong Insurance Revenue growth by 11.71% for 2023 (FH 2023: EUR 42,305,397 vs FH 2022: EUR 37,869,728) and robust Investments and Miscellaneous Income growth by 176.62% for 2023 (FH 2023: EUR 12,189,980 vs FH 2022: EUR (15,910,269)) were the key factors for INTERLIFE to return to profitability, posting an EBIT of 13,535,165 EUR, 223.83% increase compared to FY 2022 and an EPS at 0.591 EUR, +221.38% from the FH 2022.
• INTERLIFE holds twice the capital needed for severe disasters, with a Solvency Capital Requirement (SCR=Total eligible own funds / Solvency Capital Requirement) Ratio adequacy of 201.44%, surpassing the 180% Greek benchmark of 2022 and with a Minimum Capital Requirement (MCR= Total eligible own funds / Minimum Capital Requirement) Ratio of 707.87%.
• INTERLIFE does not possess proportional contracts but reinsurance contracts that can reach up to 1 million.

MGI – Media and Games Invest (MGI) continues to steadily gain market share in a difficult trading environment. It is the leading mobile open web supply-side platform on both Android and iOS in North America, and second on Android and fifth on iOS in EMEA. Q323 organic net revenue was 1% up on Q322, with early benefits from the €10m annualised cost savings plan helping to lift the adjusted EBITDA margin to 29% (Q322: 26%). The fundamentals for MGI are positive, with its vertical integration giving an efficient market proposition and earlier acquisitions providing a sound basis for its connected TV offering. The withdrawal of personal identifiers on Google should give further impetus, which we feel is not yet reflected in the rating.

• NTGR has brought back the goal of achieving double digit operating margin after three years of underperformance while turning the business around.
• Unlike prior years where NTGR was relying on unit volume growth to drive operating leverage, NTGR now has a growing base of subscription revenue that is contributing to earnings
• NTGR’s annual investor day highlighted the expectation of exiting 2023 with annual recurring revenue (“ARR”) of $40 million and $50 million in 2024