Equity Bottom-Up

• MSCI China Funds are starting to engage with New Oriental Education & Technology after a big exodus in 2021 following China’s Tech Crackdown.
• Since the lows of 2022, New Oriental Education has been one of the key beneficiaries of active fund rotation.
• Previous holders such as HSBC, Mirae and BlackRock have bought back in after closing out in 2021, but there is still a long way to go to reach previous highs.

• Panasonic’s Q2 results showed flat consolidated sales of Y2,090 billion, with a 24% YoY increase in adjusted operating profit.
• FY3/24 outlook was revised down with sales and operating profit reductions across segments, notably in Lifestyle and Energy
• Our concerns include the company’s complex structure, low overall profitability, uncertainties about valuing IRA credits, and challenges stemming from economic conditions, leading to pessimism about Panasonic’s stock price

• Intel’s results last week beat expectations by a wide margin, with margins recovering better than expected by the Street and guided to keep improving through 4Q23E.
• New Meteor Lake chips for PCs, branded as ‘Intel Core Ultra’ will officially launch December 14th and are expected to drive demand for new AI-optimized PCs in 2024E.
• Intel said that the PC industry completed its inventory digestion in 1H23, drove sequential demand growth in 3Q23, and this is expected to continue into 4Q23E.

• TSMC’s manufacturing value only accounts for 1/4 of H100 HGX bill of materials but HBM3 accounts for more than half;
• ABF substrate, SXM5 module, UBB and CCL vendors should be benefited, especially for Ibiden Co Ltd (4062 JP) on ABF substrate/OAM and Elite Material (2383 TT) on OAM/UBB CCL;
• Nvidia AI GPU likely doubling each year in next two years; Our estimates on Nvidia 2025 AI GPU EPS contribution are exceeding Bloomberg consensus earnings estimates, suggesting room to raise.

• Key Results This Week: Delta, Elan, ChipMOS, Nuvoton, AU Optronics in Taiwan… Plus Samsung, AMD, and Qualcomm.
• Positive signs for the PC & mobile space have come from recent Intel, UMC, Mediatek results.
• Top Losers: Macronix Slumps on Weak Results and Outlook, Hon Hai Slumps on China Tax & Land Probe

• Our earnings coverage continues for the second edition and is expected to continue for one more week.
• At the bottom, we provide a consolidated view of all earnings tracked so far (Bullish / Bearish) and would be happy to engage on any of them.
• We also highlight the earnings of some of the global companies that have significant operations or growth in India.

• Bukalapak (BUKA IJ) 3Q2023 results confirmed that it is on track to achieving EBITDA breakeven in 4Q2023, with strong revenue growth and a significant improvement in its contribution margin.
• The was a slight slowdown in marketplace revenue QoQ due to a high Lebaran base, mainly due to slower gaming. 4Q2023 should see a strong recovery and higher take rates. 
• Bukalapak looks to be pressing all the right buttons but more granularity on what is driving higher take rates would be well-received . Valuations look attractive relative to peers.

• Travelsky Technology Ltd H (696 HK) share price was unjustly sold off due to flows rather than operational performance.
• The key business is processing flights for domestic tourism, with a lesser correlation to geopolitical issues.
• Due to the strong earnings growth, PER is adjusted from 60x to 25x. 

• Nihon M&A Center (2127 JP) ’s 2Q revenues decreased YoY while OP remained flat. However, both revenue and OP beat consensus estimates driven by improvement in revenue per M&A transaction.
• There was strong improvement in revenue per transaction driven by enhanced efforts and growth in no. of large deals, however, M&A revenues declined due to drop in no. of deals.
• Nihon has so far achieved only 36% of its OP target and it seems unlikely for the company to reach its full-year OP guidance, suggesting there is further downside.  

• Global generics revenue increased 9% YoY to INR61 billion, mainly driven by double-digit growth in North America and Europe generic businesses, partly offset by muted growth in domestic market.
• Revenue from North America generics increased 13% y/y to INR31.7 billion, driven by growing momentum in core portfolio, Mayne integration, and favorable Fx. Pricing environment remains stable.
• Despite increase in SG&A and R&D expenses, EBITDA grew 13% YoY to INR 21.8 billion. Net profit increased 33% YoY to INR14.8 billion. Both EBITDA and net profit topped estimates.

• Q323 revenues of $2.40 billion, at the upper end of the guidance range, up 2% QoQ but down 12.5% YoY
• Current quarter revenue forecast of $2.45 billion, essentially flat sequentially
• Services revenue on track for ~8% YoY growth despite overall revenues tracking to an 8.6% YoY decline..

• M3 Inc (2413 JP) reported 2QFY03/2023 results on Friday. Revenues increased 3.0YoY while OP decreased 7.1% YoY, both revenues and OP fell below consensus estimates by 0.2% and 4.7% respectively.
• Medical Platform’s earnings continue to deteriorate while we are yet to see a meaningful improvement in overseas segment’s earnings to drive the next phase of growth for m3.
• Given continued decrease in profits, we think the company will struggle to meet its full-year guidance suggesting there is further downside to m3’s share price.  

• CIMC Enric Holdings (3899 HK) has a solid 3Q23 with excellent new order pick-up, surging by 52.8% YoY on the back of strengths in clean energy and liquid food segments.
• Hydrogen energy revenue is on target to reach Rmb700m in FY23. Meanwhile, management revealed that there is a slight gross margin expansion so far this year.
• With order backlog rising 27.6% YoY to Rmb22.2bn at end-9M23, earnings outlook is well protected. Its net cash position is another credit, making its premium multiples justified.

• JD is in fact competing with a broadcaster on Alibaba’s app, but not Alibaba itself.
• Trip.com’s domestic orders during National Holidays were double last year.
• New Oriental’s revenue increased strongly with new learning centers in 1Q24.

• Aier’s 23Q3 profit growth exceeded expectations. Considering the low base in 22Q4, Aier’s 23Q4 performance could show an obvious rebound. Then, the 2023 full-year results would be more certain.
• Aier has a considerable amount of “off-balance-sheet profits” that can be incorporated into statements in the future. So, although Aier’s growth rate has decreased, it wouldn’t collapse in short term.
• More hidden problems would be exposed in the process of transferring off-balance sheet profits to the on-balance sheet. All the repurchased shares should be cancelled to reduce Aier’s registered capital.

• FMC has put in place a new strategic plan designed to improve operational performance, thereby unlocking value to achieve an operating profit margin of 10-14% by 2025
• FMC has recently faced a potential threat to its dominant market position in renal care: Novo Nordisk. What’s Novo’s next move?
• As the Company’s overall financial and operational performance improve, combined with the market’s realization that FMC is not going anywhere, we conclude that the stock should re-rate

• Price momentum stagnant, but could North American volume surge be an inflection point?
• Fuel price hasn’t risen since outbreak of violence in mideast, but no longer a tailwind, either
• Look to Maersk results on November 3 for guidance, US inventory de-stocking commentary

• We make two arguments in this note (A) Why you should invest in the Indian Life Insurance Sector right now; (B) Why you should start with SBILIFE  over HDFCLIFE
• Answers (A) The train has left-the-station on the long runway of double-digit growth in the sector; (B) The sector valuations are very reasonable due to short-term pressures, SBIL especially so.
• We compare SBILIFE and HDFCL’s valuations, and narrow the focus on to One Crucial Factor showcasing the fundamental strength of these businesses.

• Siloam International Hospitals booked strong set of 3Q2023 with continuing evidence of the recovery in its core base-case business together with the effectiveness of its cost and efficiency initiatives. 
• The company saw a strong recovery across outpatient visits and inpatient admissions, with evidence of greater treatment complexity along with higher intensity with less time spent in hospital. 
• Siloam International Hospitals continues to focus on digitising its processes to improve both patient experience and its internal processes. Valuations remain attractive versus listed peers.

• Investors appear to be divided in  outlook  on Wynn. Some concern about post covid Las Vegas boom losing steam vs. exploding  Macau recovery beyond most early forecasts.
• Wynn’s Macau properties are particularly aimed at the all  important premium  mass segment which is already showing itself in dramatic casino win  games at  Wynn propeties.
• The company still  benefits from the  vision  of  founder Steve Wynn in the properties developed before his controversial resignation in 2018.

• The results of the first VBP of TCM formula granules in China were announced. 200 varieties of TCM formula granules have been included, with an average price reduction of 50.77%.
• According to the recently released Statistical Bulletin on the Development of Health Care in 2022, we have listed some key points worth investors’ attention.
• Livzon’s 23Q3 performance was below expectations, which was more related to external factors such as anti-corruption campaign, VBP. However, Chairman’s share buyback proposal indicates possibility of a future reversal.

• In 3Q23, revenue jumped 2.5x YoY and 12.1x QoQ to KRW231.8 billion, mainly due to the inflow related to Novavax vaccine contract settlement and resumption of flu vaccine production.
• Despite significantly improved Q3 result, SK Bioscience is expected to end 2023 on a weak note, due to the absence of contract manufacturing revenue from Novavax.
• SK Bioscience has applied for EUA for the updated Novavax COVID-19 vaccine in Korea. Once approved, the company targets to distribute the vaccine during 2023–2024 winter seasons in Korea.

• The increasing dominance of retailers (off/online) in the US consumer sector measured by market cap over last three decades tellingly illustrates the long term potential of Alibaba in China.
• While we believe consensus underestimates bottom line for 2QFY24, investors will likely focus on the outlook for 2024, with growth of Taobao/Tmall group remaining key share price driver.
• Investors pulling out of Alibaba due to geopolitical risks remind me of how ESG drove investments away from oil & gas years ago and eventually led to the latter’s outperformance.  

• BFI Finance‘s 3Q2023 results reflected the lingering impact of May’s Malware incident which interrupted collections but this situation has now been remedied and the company can resume rebuilding its book.
• 4Q2023 will likely see further write-offs but an improvement in credit costs but the company will remain cautious on building its book with a full recovery expected in 2H2024. 
• BFI Finance remains the best-quality multi-finance company in Indonesia, with a low cost of funds and a differentiated target market of used 4W and 2W non-dealer loans. Valuations are attractive. 

• Shares of Tingyi Holding are oversold. It has high dividend yield and attractive valuations. Its core instant noodles and beverage businesses are turning around this year. 
• The consensus expects DPS of HKD 0.62 for Tingyi in 2023 which would suggest a dividend yield of 6.1%. Tingyi Holding’s dividend yield averaged 5% annually from 2018 to 2022.
• Tingyi’s “Master Kong” instant noodle is one of the best known brands in China. The company is also one of the largest producers and distributors of beverages in China. 

• We see early signs of recovery in PC and smartphone markets, stable server market (strengths in AI server, stable in non-AI server market), but weaknesses in automotive and industrial.
• We expect the PC semi market recovery of more than 10% y/y in 2024/2025, driven by inventory rebuild and silicon contents increase by adding AI into PC.
• We expect the smartphone semi market recovery of 7-8% y/y in 2024/2025, driven by inventory rebuild and adopting 3nE foundry node. But, Huawei/HiSilicon will take some of the growth.

• Takeda’s 2QFY03/2024 revenues increased 4.1% YoY beating consensus estimates by 6%. However, Takeda reported an operating loss of ¥49.3bn for the quarter due to impairment losses.
• As we expected, recent setback in some of Takeda’s clinical trials have led to write-downs and triggered a downward revision to full-year profit guidance.
• There has been excessive price reaction to these setbacks, however, Takeda continues to progress with its pipeline development with some newly launched drugs showing great potential.

• Vinda International (3331 HK) announced 3Q23 results, with net profit up 37% yoy as margins started to recover. 
• Reported sales growth picked up speed, growing at 8% yoy (vs. 4% growth in 1H23), and 12% at constant exchange rates (vs. 10% growth in 1H23). 
• More importantly, gross margin recovered quarter-on-quarter from a 0.2ppt decline in 2Q23 to a 2.3ppt increase in 3Q23.

• US Banks’ office credit exposures represent a big part of the sector’s credit quality concerns, given the decline in office space occupancy and rising interest rates
• Industry data shows that bank funding costs are rising fast, and 3Q23 bank spread trends are mixed; banks with greater mortgage exposure are potentially at greater risk of narrowing spreads
• We stick with Capital One for its high lending spreads, negligible mortgage exposure and limited office credit exposure with high coverage; Capital One also has healthy overall NPL coverage

• Total sales remained weak in September, dropping 3.5% YoY. In 1H of FY Mar-24, sales were down 4.3%. Month-to-month, though, they have been trending sideways.
• Die Components have been holding up best, followed by Factory Automation. The VONA e-commerce business has been more volatile, but still shows a lack of traction.
• Operating profit dropped 31% in 1H, but management is guiding for a 23% increase in 2H. This looks optimistic, but most of the bad news should be in the price.

• So far in 4Q23, Japanese banks’ share prices have registered a mixed performance, in part due to the unsettled global market conditions; yet the Japanese bond yield curve keeps steepening
• We assess the top twelve Japanese commercial banks by market capitalisation, and we believe that Japanese banks remain good value with, a rare thing, improving fundamentals
• Ahead of the September results, we stick with our buys on Resona, Mizuho and SMFG; Resona has lagged deserving to re-rate further, and we add Hachijuni to our buy list

• Q323 revenues of $14.2 billion, some $800 million above the guided midpoint, down 8% YoY but up 10% sequentially.
• Current quarter revenue guided up QoQ to $15.1 billion at the midpoint, shares up 10% 
• Intel is betting big on a return to a 300 million unit PC TAM. Is this realistic?

• Li Ning (2331 HK) is trading down 18% today due to a bad 3Q23 operational date. 
• Retail sales grew by only mid-single-digit yoy, while same-store-sales recorded a mid-single-digit decline yoy. 
• Given the operational update, FY23 earnings should be revised down, to likely flat or low-single-digit growth.

• FSN E-Commerce Ventures (Nykaa) (NYKAA IN) seems to be facing problems in its core BPC segment. 
• Our casual LinkedIn browsing led us to an interesting post on the company and its practices that warrant attention.
• We have previously highlighted issues with the way the company has managed its Fashion Business, an attack on the BPC business could compound issues further.

• Although we are bullish on the Porsche story, we note a few relevant elements of discussion that could pose threats/hurdles/explain share price overhang
• Conflict of interest: Oliver Blume is both CEO of Porsche and VW. Can you be Porsche’s CEO just part-time?
• Once upon a time, Porsche had a great story to tell. What’s the new story?

• Bank Rakyat Indonesia’s numbers made for positive reading with loan growth coming through in productive areas, especially for Kupedes commercial micro-loans but also from its PNM and Pegadaian subsidiaries.
• The bank maintained its funding costs at highly competitive levels despite rising rates and time deposit growth with NIMs improving due to a better loan mix in micro.
• Bank Rakyat Indonesia (BBRI IJ) remains the most direct way to get exposure to greater financial inclusion and the underbanked in Indonesia. Valuations remain attractive with rising ROA and ROE. 

• Ocean Power Technologies entered a contract with WildAid and Caribbean Law Enforcement to provide a WAM-V 16 Uncrewed Surface Vessel (USV) equipped with an integrated quadcopter aerial drone that should help in protecting vital marine species and combat illegal, unreported, and unregulated (IUU) fishing activities in critical habitats.
• OPT and WildAid and Caribbean Law Enforcement are teaming up to use unmanned surface and aerial vehicles to identify, track, and gather information on people who are harming marine life and ecosystems through illegal activities
• Additionally, the company also received an additional volume order from Sulmara worth $1.6 million, a prominent player in offshore services, of WAMV 16 uncrewed surface vehicles (USVs), making this the largest single order of WAM-Vs to date.

• Carly Holdings Limited (ASX:CL8) operates a vehicle subscription business, which it launched in March 2019, leveraging existing operations, strategic relationships, and technology.
• Car subscription allows business and retail customers to pay a single monthly fee to access a car for 30 days or more and is an alternative to purchasing or financing a vehicle.
• Carly has attracted larger automotive industry businesses as shareholders, with a direct offering and services to support automotive manufacturers and dealers to generate revenue from car subscriptions. 

• ASE’s 3Q23 results came in in-line with analyst estimates, and showed gross margin ticking slightly higher QoQ.
• Semiconductor Assembly, Testing, and Manufacturing (ATM) capacity utilization remains low, in the mid-60’s percent.
• Management is cautiously optimistic about an improving industry environment into next year, however was more guarded than what we gauged from TSMC or UMC in their recent results.

• SHEN is expanding its network footprint with the acquisition of Horizon Telecom for $385 million in cash and stock.
• SHEN is purchasing Horizon for the network footprint and the sales ability to capture commercial customers compared to the majority of SHEN’s customers being residential
• The valuation becomes financially reasonable to understand when considering SHEN is paying approximately $51 thousand per fiber miles

Information Services Corporation (ISC) has a strong track record of proficiently acquiring and innovating registries and related information services to benefit citizens and businesses in Canada and on a global scale. We expect ISC to continue to generate predictable and growing cash flows due to the non-discretionary nature of its core registry services, bolstered by its recent extension of the Master Service Agreement (MSA) with the Saskatchewan government by 20 years to 2053. Our DCF valuation of C$37/share implies 88% upside to the current share price, reflecting the sustainable, cash-generative nature of the company, encompassing a large, steady-growth Registry business and a fast-growing Services division.

• On October 25, Aspira Women’s Health announced that a poster on its in-development miRNA-based ovarian cancer test was presented at the American Association for Cancer Research (AACR) Special Conference in Cancer Research: Ovarian Cancer.
• The poster, titled, “Improving the diagnostic accuracy of an ovarian cancer triage test using a joint miRNA-protein model,” highlighted data showing miRNA’s potential to improve the diagnostic accuracy of non-invasive diagnostic tests.
• The study showed that the addition of miRNA improved the detection of early-stage ovarian cancers and that diagnostic performance improved even further when using a combination of approaches, including miRNA, proteins, and metadata. 

• L’Occitane (973 HK) reported 2QFY24 operational update last night.  Sales grew 17% yoy on reported currency, and up 25% yoy on constant currency. 
• The bright spot of the release is the growth of Sol de Janeiro, the Brazilian-inspired premium body care brand, which grew 202% yoy in constant currency in the quarter.
• Sol de Janeiro has the highest EBIT margin among the 3 major brands of the company, at 24.6% in FY23, suggesting highly profitable growth.

• Despite conservative 2023 guidance last quarter, Japan Tobacco (2914 JP) is primed to exceed expectations in the 3rd quarter of 2023.
• Despite no new domestic price hikes, Japan Tobacco’s volume recovery post-hikes is expected to help sustain the revenue and profit growth momentum.
• New price increases in the Philippines and the UK, coupled with last year’s hikes spillover, are expected to boost Japan Tobacco’s earnings; and the yen’s depreciation amplifies these gains.

• Appier’s stock initially surged 20% following strong Q2 results but later declined 25%, influenced by small-cap stock volatility, AI-induced valuations, and e-commerce sensitivity.
• The AI company’s competitive position remains strong compared to Braze; the differing stock price performance and valuation suggests significant upside.
• Appier’s thesis remains intact and we expect the company to benefit from key trends in consumer marketing, first-party data and AI solutions.

• UMC believes that the early signs indicate the end of inventory correction for smartphones and PCs. 
• The total wafer loading continues to decrease, but pricing for 12″ wafers remains firm. As a result, the average selling price (ASP) continues to increase slightly. 
• The demand for strength lies in computing, thanks to the LCD controller, codec, Wi-Fi, touch IC controller, and communication applications driven by RFFE and networking IC.

• Oriental Watch (398 HK) went ex-dividend on the 4th of October. The stock gapped down more than what it paid out and now trades at 6x trailing PE.  
• Cash at 1.1 bn HKD is greater than 50% of market capitalization, with a high trailing dividend yield of 16.2% and a rich history of paying chunky dividends. 
• We monitor the sales environment for HK/China, which shows a reasonably good pick-up in HK but lackluster for China.

• Q3 revenues were strong, 4.7% ahead of consensus expectations, and EBIT margin was slightly below at 17% vs. consensus expectations of 17.8%.
• Key positives are strong revenue growth, EBITDA in Automotive and FCF generation.
• Post the cautious conference call in Q2, a weaker EBIT margin in Q3 was somewhat expected.

• GTX continued to showcase its ability to generate free cash flow even though the Euro weakened sequentially. Ahead of the results, we had reduced our estimates citing the stronger Dollar.
• GTX held an investor day following the quarterly results highlighting how the variable cost structure allows the Company to maintain profitability and generate free cash flow
• GTX has introduced several new turbochargers for the light vehicle, commercial, and industrial markets. GTX used the investor day to introduce the GT80

• UOB (UOB SP) just released their 3Q23 results, with their IR documents attached below. Our interpretation of their numbers is less positive than their own presentation.
• Credit growth is faltering, with worsening NIM in QoQ, and with what appears to be topping out net interest income. Citi integration costs remain an issue.
• Underlying credit metrics with worse recoveries and worse new NPAs are not positive, nor is the 126% rise YoY in credit costs in 3Q23.  Will this improve in 4Q23?

• Curexo Inc (060280 KS) has been showing sales growth for five consecutive quarters since Q1 2022, mainly driven by the medical robot business, which accounts for nearly 50% of sales.
• In 2Q23, Curexo’s medical business sold 29 units and recorded highest quarterly sales of KRW9,744M (up 173% YoY and 15% QoQ), driven by strong demand in domestic and Indian market.
• Curexo raised 2023 sales guidance to KRW74 billion from KRW70 billion. Medical business is expected to sell 100 units and register revenue of KRW35 billion in 2023.

• The early-stage clinical data of Hansoh’s B7-H4 ADC showed good potential, thus attracting GSK’s attention. This would allow GSK to re-enhance the layout of ADC pipelines after its previous setbacks.
• However, if future clinical data fail to meet expectation, GSK could return the product to Hansoh. After all, US$85 million upfront is more likely to test the waters for GSK.
• Hansoh is already one step ahead of Hengrui in terms of internationalization. This short-term catalyst would no doubt help lift share prices, but the logic behind the rebound is shaky.

• Shimano Q3 results show a 32% YoY net sales decline, led by a 38% drop in bike component sales, BUT both sales and profit beat expectations
• The company maintains cost control, sees improving gross margins, and reduces inventories, while cash flow and balance sheet remain strong
• With the upward revision in full-year guidance, we believe the market will look through the still challenging Q4 outlook and focus instead on 2024 normalization and relatively low valuation

• Pop Mart International Group L (9992 HK) announced at noon today a business update on 3Q23.
• Overall sales in 3Q23 grew 35-40% yoy, with domestic China sales up 25-30% yoy and international sales up 120-125% yoy. 
• Thesis intact, as the 3Q23 update showed that the international business continued to grow rapidly at 120-125% yoy growth.

• Due to the ongoing earnings season, for the next two weeks, we will temporarily deviate from our regular format and instead focus on reported earnings.
• We focus on reported earnings, performance against expectations, and the top three highlights that we believe are important from earnings calls for each company that is usually under coverage.
• Besides the Bullish/Bearish names, we draw attention to the ones that are highlighted as interesting and would be pleased to engage in discussions about any of them.

• In the past several days, there have been numerous local news about a substantial defense cooperation between Saudi Arabia and South Korea. 
• This could result in billions of dollars in new military/defense related systems new orders for numerous companies in Korea in the coming decade. 
• If there are major long-term arms deal between Saudi Arabia and South Korea, it could benefit the top defense companies in Korea including Hanwha Aerospace and Korea Aerospace Industries. 

• Hansoh Pharmaceutical Group (3692 HK) entered into a license agreement with GlaxoSmithKline PLC (GSK LN) for a B7-H4 targeted antibody-drug conjugate candidate, HS-20089, targeted toward gynecological cancers.  
• Hansoh will receive an upfront payment of $85M and be eligible to receive milestone payments of up to $1.485B subject to achievement of relevant milestone events with respect to HS-20089.
• Currently, HS-20089 is in phase 1 clinical trial in China. GSK plans to begin phase 1 trial of HS-20089 outside of China in 2024.

• MR DIY (MRDIY MK) remains a standout retailer in Malaysia with its commanding position in the home improvement space and beyond, playing into increased demand for value-for-money products.
• The slower growth last quarter came from a high base last year. 3Q2023 should see a strong rebound in growth providing a positive catalyst plus its store expansion is on-track.
• MR DIY‘s can finance its store expansion from internally generated cashflows and should start to see SSSG recover over the coming quarters. Valuations looking more reasonable as growth recovers.

• Ryohin Keikaku’s biggest weakness is its unwieldy and expensive supply chains, with hundreds of suppliers across its three main categories of household, apparel and food.
• The Muji operator just acquired a large team from one of its principle clothing supply partners, Mitsubishi, to finally streamline its supply chains and improve cost performance in clothing. 
• This should have a positive impact on its cost of goods, margins and inventory levels, allowing for quicker responses to trends at a lower price at home and overseas.

Freelancer achieved a key profitability target in Q323 by delivering positive operating EBITDA across divisions, leading to positive operating cash flow generation and an uplift in gross cash. Despite lower group gross merchandise value (GMV), revenue likely grew given the higher take rate of the marketplace division, where GMV increased. Near-term pipeline highlights include accelerating Enterprise momentum from US expansion and a Chinese retailer partnership, Loadshift’s ongoing marketplace transition and new Escrow.com partnerships to drive diversification.

• We estimate that the outlook is still moderate downward in 4Q23F, which is a typically seasonality.
• SPIL, in ASEH group, is serving only limited on-Substrate (oW) of Chip-on-Wafer-on-Substrate (CoWoS).
• We note that the major big clients of ASEH are not changing at all during this time downturn.

• Angelalign’s internationalization strategy requires significant ongoing marketing spending. Lower-tier market expansion in China requires Angelalign to continuously reduce product prices to cope with the low-price strategies of other domestic competitors.
• Angelalign is in a period of business transformation. High SG&A expenses help increase market share, but may not necessarily result in improvement in profit margin. Angelalign actually lacks core competitiveness.
• We remain conservative on Angelalign’s outlook at this stage. It’s difficult for Angelalign to make significant improvements in financial performance or reversal of fundamentals in the short term. 

• During 2QFY24, Tokyo Disneyland and Tokyo DisneySea both saw a QoQ decline in Google search interest.
• This suggests to us that there might be an earnings miss when Oriental Land (4661 JP) reports its FQ2 results on October 30, 2023.
• Additionally, there are potential downside risks to both FY24 and medium-term consensus projections following a revised FY24 guidance announcement.

• Apple fired five employees of China App Store for corruption.
• Yonghui follows Alibaba’s Freshippo outlets to open discounted stores this year.
• JD.com sued 44 companies and 3 persons for abusing JD’s trademark.

• In its recent result, Bandhan Bank Ltd (BANDHAN IN) did not report the kind of improvement in asset quality in its core Microfinance segment that we were hoping to see.
• Fresh slippages into overdue accounts did not slow down as anticipated; NPA levels remained elevated; Loan growth is below the target run-rate.
• We anticipate the recovery to be drawn out, and hence suggest keeping patience. But  we maintain our long-term valuation of Bandhan Bank unchanged at 2.1x FY25e P/BV, implying +56% upside.

• The recent pullback in the share price of Xinhua Winshare (811 HK) is overdone, and it is now on attractive 4.5x PER, 6.7% yield, and 0.46x P/B. 
• It has minimal exposure to economic slowdown and global geopolitical tension. There is solid revenue growth and margin expansion in 1H23, and demand is totally domestic and resilient.
• Net cash amounted to 109% of its share price and this has not yet included Rmb2.2bn of equity investment on hand. Still, it is expected to generate ROE of 12%.

• Q323 revenues of $3.48 billion, ahead of guidance and up 8.6% sequentially
• December quarter guidance of $3.7 billion at the midpoint suggests ongoing recovery
• However, still-declining services revenue indicates that all other headwinds remain in place

• Loan mix is improving, away from non-INR loans, asset mix is improving with less RIDF bonds, and bank is seeing an expanding LDR. 
• Loss loans and doubtful loans are in major decline, they are less important to total NPLs, and still credit costs were high in 1Q24, likely overly conservative.
• Credit growth is now at 22.6% YoY from 14.9% YoY one year ago, with consistent acceleration. With just 6% loan share, growth can remain high.

• In this insight, we explore the potential trade idea to Long GMG and Short DXS, among Australia REITs
• We propose this trade on the back of long-term attractive thematic and strong fundamentals of logistics sector and continued weakness of office sector, as well as company specific drivers
• GMG focuses on logistics and is a fund manager, and will continue to be strong. DXS is primarily driven by Sydney office market, which is facing multiple headwinds

• Porsche is one of the world’s most successful luxury automotive manufactures, specializing in high-performance sports cars, SUVs, and sports limousines
• The investment case revolves around Porsche’s continued sustainable structural growth, electrification, best-in-class technology, luxury nature, and sustainability capabilities
• The stock price is trading near its IPO price of September 2022, at a 25% discount to summer highs.

• In 3Q23, Intuitive Surgical (ISRG US) recorded 12% YoY revenue growth to $1.74B, driven by growth in da Vinci procedure volume and an increase in the installed base of systems.
• 3Q23 procedure growth was 19%, versus 20% in 3Q22 and 22% in 2Q23. Systems revenue declined 11%, due to higher number of systems placed under lease and lower China demand.
• The company now expects 2023 procedure volume growth of 21–22%, up from previous estimates of 20–22%. Significant material supply chain disruptions or hospital capacity constraints are not expected.

• We examine the value proposition of Sitoy Group Holdings (1023 HK) trading at 4x PE with a 12.5 % dividend yield ( assuming a sustainable 50% payout ratio ).
• The company has 400 mn HKD net cash and real estate worth 690 mn HKD on its balance sheet. This compares favorably with its 840 mn HKD market cap. 
• The major drawback of investing in the company is its track record, which shows a steadily declining revenue trend and a fluctuating ROCE (currently 11%). 

• Q323 revenues of $17.28 billion. In US$ terms, this represented a 10.2% increase QoQ, but still down 14.6% YoY.
• TSMC’s forecasted Q423 revenues of $19.2 billion at the midpoint, representing a 10% QoQ increase
• CEO C.C Wei robustly rebuffed Intel’s popular claim to be on track for process technology leadership by 2025

• Premiums have generally fallen sharply most recently, likely driven by weaker global markets.
• Key earnings: TSMC reported last week; UMC and ASE to report this week.
• We describe our latest recommended premium/discount levels to Long or Short the spreads.

• Topsports International Holdings (6110 HK) announced first half FY24 (fiscal year ending February) results last week, with net profit up 17% yoy.
• The company trades at a 7% dividend yield, backed by strong free cash flow.
• The stock is not only a yield play, but also a call option on the recovery of Nike and Adidas’ retail performance in China.

• We compile our selection of small and mid-cap names with our desired characteristics of high dividend yields, value, and margin of safety.
• Our top picks are Perfect Medical Health (1830 HK), Water Oasis (1161 HK), Taste Gourmet (8371 HK), Uchi Technologies (UCHI MK), and The Keepers Holdings (KEEPR PM).
• We add the Philippine Stock Exchange (PSE PM) and Ginebra San Miguel (GSMI PM) to our list of names that we look at after our recent Philippines trip. 

• This week will see a wave of earnings releases for the industry including Intel, Microsofot, Mediatek, ASE, and UMC.
• TSMC results last week provided positive color on the 2024E onwards outlook for the company as well as comments regarding a turn around for PC and mobile.
• Taiwan AI names were some of the top losers across our Taiwan Tech universe last week.

• Delta Thailand shares haven’t recovered from their sharp drop at the end of September, which happened after the parent Delta Taiwan sold a stake in the Thai subsidiary.
• Delta Thailand shares fell to the point that its market cap finally became smaller than Delta Taiwan, for the first time since December 2022.
• Delta Thailand’s market cap should be substantially smaller than its parent Delta Taiwan. We analyze what history tells us the further relative downside for Delta Thailand could be.

• 3Q23 is expected to achieve over 40% YoY growth. 2023 overall performance would be better than previous guidance- Revenue up 40+% YoY and adjusted net profit up about 45% YoY.
• With abundant cash flow, Gushengtang has increased dividend payouts and share buyback, indicating that the current stock price is undervalued and has not yet reflected its high growth expectations/healthy fundamentals.
• Gushengtang has cross-regional expansion capability. The “sustainability” + “high growth” of performance are worth noting. Depressed sentiment/complex external environment provide a good buying opportunity. Rebound in stock price is expected.

• Krung Thai ranks second from top in terms of post-provision profitability and it has double digit ROE with a healthy balance sheet, along with attractive PBV and PE ratios
• We also like Ayudhya, with its sound pre and post-provision profitability metrics with healthy ROE and ROA, its sound credit quality metrics and undemanding valuations
• Kasikorn’s TTM cost of risk remain high versus the peers, and in 3Q23 it continued to worsen; its pre-provision profitability is healthy but there is, as yet, no CoR improvement

• In this month’s Tracker, we focus on a new price war among the ‘sort & transport’ names
• Q3 ASPs at these express companies fell by -12% Y/Y, and volume growth softened
• We believe margins are under increasing pressure in China’s mainstream express segment

• Weight loss and Alzheimer’s disease (AD) have been ranked among the top indications in the pharmaceutical history and are undeniable opportunities, but they are expected to generate different investment returns.
• We have noticed that some companies have started developing GLP-1 gene therapy. We would be cautious about this.
• Without strong fundamentals but is eager to go public on A-share market, AIM Vaccine (6660 HK) seems more enthusiastic about capital operations to make quick money.We consider this company risky.

• Novatek Microelectronics Corp (3034 TT)‘s outlook is expected to be slightly negative QoQ in 4Q23F. 
• The Apple (AAPL US) iPhone 16 qualification samples of Novatek OLED DDIC is targeting to deliver by 4Q23F.
• Novatek is increasing its wafer orders at UMC in 4Q23F.