Equity Bottom-Up

• According to public news yesterday, WH Group (288 HK) plans to list its US pork business Smithfield Foods, the largest US pork producer, back in the US again. 
• WH Group currently trades at 5x 2024E PE, assuming earnings return to the 2022 level in 2024E.  Since 2016, the company has had an average PE of 11x. 
• The stock is a buy with a fairly strong catalyst in the potential US listing of the Smithfield Foods business, while downside is limited. 

• ASML reported Q323 revenues of €6.7 billion, largely in line with guidance, down 3% QoQ but up 15.5% YoY. Q423 revenue forecast of €6.9 billion. 
• ASML remains on track for a remarkable 30% YoY growth in 2023 revenues
• ASML forecasting 2024 as a zero growth year as order intake in Q323 falls to €2.6 billion, massively down on the €8.9 billion in the year-ago quarter. 

• Giordano, one of the most recognizable apparel business in Asia, has been improving its operations materially with solid growth in sales and profits. 
• Giordano provides very high dividend yield and payout. The consensus expects DPS of HKD 0.28 for Giordano in 2023, which would suggest a dividend yield of 12.8%. 
• We like the company’s high dividend yield, loyal customer base, and attractive valuations. It is trading at EV/EBITDA of 3.6x and P/B of 1.5x. 

• Bank Central Asia (BBCA IJ) released another set of positive numbers in 3Q2023, outperforming the overall sector on loan and CASA growth, allowing the banks to maintain NIMs and profitability.
• The bank’s digital banking franchise continues to grow, with 31 million users of its mobile banking, boosting transactions and customer numbers, with a broadening of features and service offerings available. 
• Consumer banking, SME, and Corporate lending will continue to drive loan growth and credit costs continue to come down boosting profits. Bank Central Asia remains a core holding. 

• In this insight, we summarized NWD’s FY2023 results.  We think the gearing and balance sheet, the biggest concern that market has, has been clearly addressed
• NWD has announced disposal of its stake in NWS, and will have more corporate actions to come.  The dividend expectation is reset
• We view most of the negatives are priced in at current valuation.  NWD is much better than a Chinese developer, and should not be trading at 0.19x PB

• ASX Ltd (ASX AU) is seeing weakness across key revenue items with best delta in what is non- core, net interest income. Suddenly, its operating cash flow is negative.
• New listings are down from 217 companies to 57 companies YoY to FY23 and their market capitalization is down from AUD59bn to AUD3bn YoY to FY23.
• SG&A costs seem to be rising structurally now at 28% of gross profit in FY23 compared with 23% in FY22 and compared with 17-19% in preceding years.

Since launch in 2011, the Diverse Income Trust (DIVI) has grown its dividend every year (compounding at an average annual rate of 6.5%), including during the global pandemic, when many UK dividends were cut. The strength of the trust’s revenue growth is also reflected in its capital appreciation that has enabled DIVI to deliver robust total returns. As globalisation has fractured over the last three years, equity income strategies have become increasingly popular with global investors, and the UK top 100 index (in US dollar terms) has outperformed other developed market indices. DIVI’s two co-managers, Gervais Williams and Martin Turner, are very optimistic because they believe that UK large-cap stocks will continue to outperform and historically UK small-caps have outpaced the performance of their larger peers. In this scenario, the prospects for the trust’s multi-cap approach look very favourable.

• IRDM used its third quarter results as means to update investors on where operating EBITDA would end up for 2023 and the continued progress with direct to device
• IRDM reported quarterly results missing our estimates due to a larger than expected decline in equipment revenue. 
• The Qualcomm (QCOM) partnership is poised to emerge as the most significant catalyst for 2024

Basilea has announced an expansion of its portfolio to foster long-term growth, a key strategic priority for management, leveraging expertise in the commercialisation of its two key anti-infective products, Cresemba and Zevtera. The company will in-license GR-2397, a clinical-stage antifungal compound targeting invasive mould infections, mainly caused by the Aspergillus species. The Phase II-ready asset has Qualified Infectious Disease Product, Orphan Drug and Fast Track designations from the US FDA for invasive aspergillosis, which often leads to priority review post a New Drug Application (NDA) filing and grants 10 years of US market exclusivity. Basilea will make an upfront payment of $2m, followed by ~$69m in milestones and tiered royalties. Our valuation of Basilea remains unchanged, and will be reassessed once additional information becomes available.

OPAP’s management is successfully executing its strategy of growing the core brands and customer interactions online and offline, as evidenced by increasing online exposure and revitalising growth in its mature retail core activities, while maintaining its leading corporate and social responsibility (CSR) credentials. Its exclusive licences in the majority of its activities enable high levels of profitability, cash generation and shareholder returns. We see attractive upside to our DCF-based valuation of €17.9/share, with the added appeal of a prospective dividend yield of 10.7%.

• The revenue/ GM/ OPM/ EPS/ ROE is USD$17.57b/ 54.3%/ 41.7%/ NT$8.14/ 25.8% in 3Q23. The revenue/ GMO/ OPM is US$18.8-19.6bn/ 51.5-53.5%; OPM: 39.5-41.5% in 4Q23F guidance.
• Moving into 4Q23F, TSMC expects their business to be supported by smartphone seasonality, while AI-related demand continues to be strong. 
• TSMC anticipates 2024F to experience healthy growth, and TSMC has noticed a resurgence in demand for smartphones and PCs.

• The investigative analysis highlights a deceptive and confusing saga involving the Vedanta Group’s semiconductor venture in India. 
• The group skillfully blurred the lines between Vedanta Ltd (VEDL IN)  and Vedanta Resources (VED LN), creating an impression that the semiconductor business was under Vedanta Limited, despite previous clarifications. 
• Eventually, regulatory authorities penalized Vedanta for disclosure lapses, exposing governance concerns and a lack of transparency in this complex corporate maneuver.

• There is little in the long-term and current figures of Bank Of China Ltd (H) (3988 HK) that leaves one assured of strength, stability, earnings power, and rather the opposite.
• Sharply expanding LDR is an increase in loans relative to deposits, and it tends to drive rising NIM. Where LDR expands (a lot) but NIM contracts, it is a concern.
• The bank appears to have a 2-3x higher base of credit costs/operating profit, with an ROE of 10% now vs 18% some years ago – with much more geopolitical risk.

• Recruit’s share price is down more than 10% over the last 30-days despite there being a significant improvement in job openings in the US for the month of August.
• The web traffic on both Glassdoor and Indeed also have declined in September compared to August where there was a MoM improvement in August 2023.
• Though Recruit has guided for a decline in earnings, we think there is further downside to the company’s guidance.

• China Overseas Property (2669 HK) announced an acquisition on October 11 of a technical consultancy business from China State Construction Development (830 HK), a sister company. 
• The deal consideration will be not higher than HKD950m, which amounts to a PE ratio of 17.5x based on estimated 2023 earnings of the acquired business.
• In the current extremely shaky market, this kind of deal is very damaging to the market confidence of the stock.  Further derating is likely. 

• Telix Pharmaceuticals (TLX AU) reported net operating cash inflow for 3Q23 of A$21.4M, a A$10.6M improvement on the prior quarter and fourth consecutive quarter of positive operating cash flow.
• In 3Q23, revenue from U.S. sales of Illuccix improved 13% QoQ to A$130.6M. Telix is progressing new marketing authorizations for Illuccix in several jurisdictions, including the U.K., EU, and Brazil.
• Telix announced preliminary results of its phase I ProstACT SELECT study. Although the study achieved primary endpoints, the findings noted grade 3 and 4 hematologic events.

• TSMC reported 3Q23 results yesterday — Gross margin beat expectations and remains near historical highs.
• TSMC maintains expectation of a 15-20% earnings CAGR through 2026E. Gross margin guided to remain near all-time highs.
• Accumulate TSMC as a Structural Long position — Undemanding multiple can drive Target Price NT$760 for ~40% Upside.

• We listened to the conference call held by Whitehaven Coal (WHC AU) to update investors on its acquisition of BHP’s coking coal mines and  Q2 2024 production. 
• Based on spot prices of coking coal over 350 USD/ton and cash costs of 20% lower than the average of 2 years, the EV-EBITDA of acquisition is 1.8x
• The acquisition could be massively accretive if coking coal prices remain stronger for longer as the company pivots its strategy to becoming a large met coal producer. 

Basilea presented a combination of eight presentations and abstracts on its antibiotic ceftobiprole (at the Infectious Diseases Week 2023 conference in Boston), which support its ongoing regulatory application with the FDA. The new data provide additional evidence on the drug’s utility and highlight ceftobiprole’s antimicrobial activity against clinically relevant pathogens, including MRSA, and support the dosing regimens utilised in the three Phase III studies for the three indications currently undergoing priority review by the FDA. As a reminder, the FDA has set a PDUFA date of 3 April 2024, which suggests that Basilea could potentially receive a regulatory decision for its lead antibiotic asset in the US in early-Q224. The FDA’s decision would be a significant catalyst for Basilea, considering the high prevalence of MRSA in US. The new data provide incremental support to the FDA application and instil confidence in a favourable outcome, in our view.

Epwin’s H123 results confirmed a solid performance that was characterised by weaker volumes offset by cost control, higher prices and some contribution from M&A in tough markets. Longer term, well-established growth trends imply that Epwin is well placed to leverage off increasing demand for its energy-efficient and low-maintenance building products. Management action contributed to overall margin expansion, a feature that we expect to continue in FY23 and FY24 as material cost pressures become less of a headwind. Epwin offers an attractive investment case with the potential for uplifts from additional self-funded M&A. We have maintained our forecasts but highlight the low valuation and attractive 6.7% yield.

• US Masters Residential Property Fund (URF AU), an ASX-listed real estate trust investing in single-family homes in gentrifying New York metropolitan neighbourhoods  – what could go wrong? 
• Quite a lot, apparently. Shares are down bigly from the 2011 listing; the responsible entity faced ASIC-backed court proceedings for misleading clients; plus dissent emerged over appointing a new RE. 
• URF is gradually offloading its entire portfolio, and buying back shares, which are trading at 0.49x price-to-book.  So, where’s the rub?

• Boeing is a globally recognized company in the aerospace industry that was founded in 1916 by William Boeing.
• The company’s business model includes three segments: commercial, defense, and services, with the commercial segment being the largest, accounting for nearly 40% of its revenues.
• Boeing has played a crucial role in the evolution of the aviation industry, from fabric airplanes to carbon fiber composite jetliners that can fly long distances without stopping.

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• Money Forward’s Corporate SaaS business is thriving, with +44% year-over-year growth in ARR, a 139,000-strong customer base, and a healthy CAC-to-LTV ratio of 3.7x.
• Despite strong fundamentals, the stock’s 20% decline is attributed to market fixation on quarterly earnings and concerns about rising interest rates.
• The company’s untapped potential lies in the mid-market segment, where cross-selling opportunities across 18 paid products could significantly boost ARPA, tapping into a TAM estimated at $15 billion.

• Country Garden’s offshore debt default is happening. Its time to investor to revisit their position as restructuring is looming.
• Investors may not have any access to Country Garden’s onshore assets under its current offshore issuance structure.
• Evergrande’s offshore debt issuing structure could be more favourable compared to that of Country Garden in bankruptcy, depending on how the court interprets its Keepwell agreement.

• On 16 October, Douzone Bizon (012510 KS) announced that it is entering the global software-as-a service (SaaS) market in cooperation with Amazon Web Services (AWS). 
• The agreement stipulates that Douzone Bizon will develop global SaaS through AWS support and enter overseas markets. 
• We believe shares of Douzone Bizon have been oversold. Valuations have become more attractive and its cooperation with AWS is also likely to improve the company’s overseas sales and profits. 

• There is downside risk to SoftBank’s NAV, due to valuations relating to Arm and the Vision Funds including LatAm; on aggregate, these holdings account for 70% of group equity value
• We believe that Arm’s super-premium valuation is unsustainable; there is lack of transparency on the valuations relating to the unlisted Vision Fund holdings, especially in SVF2
• We estimate that SoftBank shares trade at a 44% NAV discount, tighter than the average at the end of the last eight quarters; add to this Arm’s current over valuation

• Triveni Turbine (TRIV IN)  is one of the leading players in manufacturing of steam turbines, which in turn has uses across various energy intensive industries. 
• The company has recovered well from covid, has a robust order book in conjuction with healthy financial position. Balance sheet is debt-free, high cash and lean WC cycle. 
• The only possible risk that comes to the balance sheet would be of potential statutory disputes. The contingent liabilities remain under-stated.

• Our long held strong conviction on  LVS has not faltered despite its chronically undervalued.
• Monthly gross gaming win trends do not reflect sagging China economy.
• Imminent 3Q23  earnings release may well  hold upside surprises. We sense a beat.

• Philippine Stock Exchange (PSE PM) is a monopoly making >60%>/45% EBITDA/NPAT margins across its history with ex-cash ROCE’s >30% (cash at five bn pesos is 33% of market cap).
• With a relatively low penetration of brokerage accounts (1.5%), an underowned market with 100mn USD volume, and low fee structures, there is ample low-hanging fruit on earnings growth.
• The stock trades at 18x PE (9x ex-cash and real estate). With an 80-100% payout, the dividend yield is 5-6%, so you are paid to wait for future catalysts. Our meeting with management in Manila last week gives us added confidence. 

• Medikaloka Hermina (HEAL IJ) remains a differentiated hospital player in Indonesia given its focus on the treatment of women and children plus its doctor partnership model in its hospitals.
• The company booked a strong rebound in both inpatient and outpatient volumes in 1H2023, and we expect this to continue into 2H, with two new hospitals opened in 3Q2023.
• Despite exhibiting the strongest growth amongst its peers, the company still trades at a significant discount to Mitra Keluarga Karyasehat Tbk (MIKA IJ) on 10.2x FY2024E EV/EBITDA. 

• FY23 performance positions VA at the top table relative to global LCC financial performance
• Global analysis of #2 positions behind a strong market leaders suggests an efficient VA should be well positioned to sustainably outperform the global airline industry’s average financial performance
• Forecasting mean reversion for operating performance but aircraft financing savings should sustain superior profitability and cash flow generation than pre-COVID.

• HDFC Bank (HDFCB IN) released its first results since its amalgamation. This can make comparatives difficult where historicals are not adjusted, except for some QoQ items.
• We use Dupont Analysis to better understand how the newly amalgamated bank looks now compared with the past, which generally shows a more profitable bank at the core. 
• Credit costs, tax expenses are also positives, with the former improving 27bps YoY and the latter improving 23bps YoY. Investment income is a major positive driver in Sep 23 quarter.

• Our Taiwan AI stock short basket of Quanta, Wistron, Gold Circuit, and Asia Vital has underperformed Nvidia by 12.5% since our previous piece.
• Most of Taiwan’s AI stock plays have underperformed Nvidia over the same period, but by less than our basket names. Analyst recommendations remain overwhelmingly Buy for our Short basket names.
• Conclusion: Maintain Quanta, Wistron, Gold Circuit, Asia Vital as a Short Basket vs. Long Nvidia. Nvidia revenue will grow at a higher percentage rate than most Taiwan AI concept stocks.

• Xtep International (1368 HK) announced yesterday strong retail sales of high-teens growth in 3Q23.
• Though the growth was at the expense of slightly higher overall discounts of 25-30% off during the quarter.
• I prefer Anta over Xtep given higher visibility in Anta’s bottom line, as Xtep’s growth continues to be of lesser quality than Anta’s. 

• Anta Sports Products (2020 HK) achieved a decent 3Q23 with sales performance of major brands outperformed. With a low comparison base, 4Q23 sales will be even more impressive. 
• Indications are that sales for the Golden Week are satisfactory and “double-11” sales are optimistic. The acquisition of MAIA ACTIVE will further add to its product portfolio.
• Amer’s IPO is another catalyst and reports are that this has been filed in the US. Anta Sports’ stake may be valued at US$4bn, almost 12% of its market cap.

Paradigm has announced positive day-365 data from its Phase II trial (PARA_OA_008) assessing injectable pentosan polysulfate (iPPS) as a potentially disease-modifying treatment for knee osteoarthritis (kOA). The latest data show durable responses based on measures of pain and function, while confirming the company will be pursuing an iPPS (2mg/kg) twice-weekly regimen for six weeks across all of its clinical programmes for kOA. Based on this update, Paradigm now plans to proceed with a Provisional Approval application to the Therapeutic Goods Administration (TGA, the Australian regulatory authority). The day-365 data are encouraging for iPPS as a potential treatment for kOA, in our view, adding to the company’s data package to support discussions with regulatory authorities and potential partners. We note that Paradigm is awaiting full analysis of MRI data from this trial, and plans to share it in the near term.

• Since IPO, stock price of Kelun-Biotech has performed quite well. Then, the Company’s valuation fluctuated. Investors seem not excited about Sichuan Kelun-Biotech Biopharm (6990 HK)’s 23H1 performance.
• We won’t expect too much on A166 in such a difficult competitive landscape.Commercialization of SKB264 is also challenging.It’s difficult to make up the story after A166/SKB264 begin to generate revenue.
• After out-licensing all valuable/core assets to Merck, together with the departure of core R&D personnel, Kelun-Biotech has been “hollowed out”.So, Kelun-Biotech’s value lies in short-term trade rather than long-term hold.

• U.S. expands China chip restrictions — Implementing lower performance thresholds and further restricting sales via third party countries.
• Intel and AMD chips likely also impacted, as well as equipment from ASML, Lam, Applied Materials, Tokyo Electron and others. We will learn more today from Lam and ASML results.
• Taiwan AI Plays also to be impacted — Shares of Wistron, Quanta, Gold Circuit, Asia Vital Gigabyte, Super Micro, Alchip appear precarious.

At the AACR-NCI-EORTC conference in Boston, OSE presented the initial positive data supporting the potential efficacy of its anti-PD1 monoclonal antibody, OSE-279, in patients with advanced solid tumours, with no therapeutic option available. The interim data from the Phase I/II dose escalation study indicated that OSE-279 monotherapy exhibited manageable safety and showed preliminary signs of efficacy. Both the pharmacokinetic and pharmacodynamic profiles aligned with the company’s expectations. As a reminder, OSE-279 serves as the key anti-PD1 component in the company’s bifunctional checkpoint inhibitor (BiCKI) platform, designed to address primary (lack of response to treatment) and secondary resistance (resistance after an initial response) mechanisms. The data shared are promising with potential for OSE-279 as a monotherapy, but given the small cohort (13), we await further data from the Phase II component of the current study. Incremental positive results could provide validation for OSE-279 and the BiCKI platform approach.

• Freshippo opened its first high-end supermarket, Premier, in Shanghai in September.
• We believe it is a good idea to take business from independent stores and small store chains.
• However, we do not believe those foreigner-oriented foods will be popular.

• Shakey’s Pizza (PIZZA PM) is set to declare its Q3 2023 result in the 2nd week of November. We expect revenue/earnings growth of 41%YoY/44%YoY. 
• Q4 is the seasonally highest growth quarter, where the company makes 40% of its annual profits. A strong Q1-Q3 sets up a solid end to the year. 
• We believe the company will easily be able to meet or beat its guidance of 30% revenue and profit growth for FY23. Stock trades at 13x/9.8x PE FY23e/24e.

• LICI has significant 62% market share of new business premiums with 92% coverage of all districts in the country, compared with 72% for all of the private sector combined.
• Long track record of operations since 1956 and strong growth, with recent years seeing exceptional strength in net profit, and with ROE reaching 148%.
• Well maintained SG&A costs with revenue growth exceeding policy benefits growth, with strong investment returns, especially in FY23. 1Q24 also shows continued operational strength, in a hugely under-penetrated market.

• TSMC and ASML will report results this week. We may get additional detail about the scope of AI-related demand as a medium-term driver for the semiconductor industry.
• Many Taiwan AI plays were top losers last week. Separately, the U.S. is expected to announce new tech restrictions for China this week.
• SK Hynix is reportedly working closely with Mediatek to integrate some of its most advanced memory in Mediatek’s flagship Dimensity chips. Mediatek was a top gainer last week.

• HDFC Life Insurance (HDFCLIFE IN) reported 2Q24/ 1H24 results last week which were decent given the context: moderating VNB Margins amid changing product-mix and growth outlook positive for remaining year.
• The strong growth at the HDFC Bank counter is the key positive, though expected, on back of the HDFC Bank-HDFC merger.
• We value HDFC Life (HDFCL) at ~2.4x FY25e P/EV, implying a ~5% upside to current price. HDFCL is fairly valued in our view.

• The 4Q23F outlook is still coming down, but it’s not as worse as we originally expected.
• Samsung is staying a very stable demand for 28nm capacity in UMC.
• Based on our estimates, the wafer ASP is clearly increasing from 2Q22 to 4Q23F, despite a decline in demand from 4Q22 until now.

• The Keepers Holdings (KEEPR PM) is set to declare Q3 2023 earnings in the 2nd week of November. We expect the company to report a 9%/18% YoY revenue/net profit growth.
• We expect a steady improvement in Bodegas W&H and operations and overall gross profit margins to remain stable at 26-27%. 
• The stock is cheap at 7.7x/6.6x FY23e/24e with a 5.1%/5.9% dividend yield and 10% of the market capitalization in cash. 

• Amvis Holdings Inc (7071 JP) reported 40% YoY increase in revenue to ¥23B in 9MFY23, driven by 27% YoY increase in bed capacity and 86.6% utilization rate at existing facilities.
• Operating profit grew 40% YoY to ¥6.2 billion. However, operating margin declined 10 basis points to 26.9%, due to the impact of inflation and increase in wages for long-service employees.
• Amvis announced plans to open 25 new facilities and expand 1 facility (1,308 beds) in FY24. The company plans to raise patient payments by about ¥4,000 per month in Oct’23.

• We change our stance to be a bit bullish for Mediatek Inc (2454 TT).
• In 4Q23F, MediaTek’s outlook is getting a bit stronger upside.
• The Smartphone market is turning positive, but it’s too early to claim a fully rebound.

• REIT Watch – Performance of S-Reits within the STI On Thursday night (Oct 12), the US Consumer Price Index (CPI) came in slightly higher than markets had anticipated, leading to higher expectations that the Federal Reserve will likely implement one more interest rate hike before the year ends.
• The three S-Reits with the lowest gearing ratios are: Sasseur Reit (26.2 per cent), Frasers Logistics & Commercial Trust (28.6 per cent) and Paragon Reit (29.8 per cent).

• Money Forward (3994 JP) reported 3QFY11/2023 results on Friday. 3Q revenue fell below consensus despite increasing 37.4% YoY while reported operating losses were slightly below consensus estimated operating losses.
• MF also has provided more details on its ¥12bn convertible bond issuance in August to secure funds to further grow its SaaS and fintech businesses.
• This is concerning given the huge debt in the company’s balance sheet and it seems that the company may not be able to make profits in the near-term.

• WFC is seeing net interest income growth rate decelerate sharply from 29% YoY in 2Q23 to 8% YoY in 3Q23. Its deposit costs rose from 23bps to 192bps YoY
• CRE NCO’s rose to USD93m in 3Q23 from reversals in 3Q22. Its CRE non-accruals rose to USD3,863m in 3Q23, vs USD2,507m in 2Q23, vs USD853m in 3Q22
• Mortgage, Auto, CRE loans are down QoQ and YoY. C&I loans, its largest loan bucket are down 0.9% QoQ. Total gross loans declined USD5.5bn QoQ, now down USD13bn from peak.

• Iconic Indonesian mass-market department store retailer Ramayana Lestari Sentosa (RALS IJ) has struggled with sluggish growth this year, especially over Lebaran but management remains confident in some recovery in 2H2023.
• The company embarked on transformation pre-pandemic but COVID put a brake on this change and forced a number of stores to close and resurrection has begun again but slowly.
• Ramayana is taking a conservative approach this year, opting not to expand its store network as anticipates weakened purchasing power but pre-election spending could provide a boost. Valuations are attractive.

• Market expectation for FY23/24 earnings of Sa Sa International Hldgs (178 HK) is overly conservative. It achieved HK$110-125m of profit in 1H, and 2H is the normal peak season.
• Offline sales in 2Q23/24 recovered to 47.2% of the 2019 level and the rebound in mainland tourist arrivals should boost sales over the next 12 months. 
• Lower rent costs should allow for higher operating leverage as revenue revives. Its gross margin for 1H23/24 has further expanded and we think this trend can be sustained. 

• Ushio is making substantial investments in it core light source technologies, sacrificing short term profit for long-term growth potential.
• Geared to rising demand for EUV mask and IC package lithography, bio-medical equipment, and solid-state light sources. Digital cinema business rebounding from COVID.
• Selling at 21x current EPS guidance, 12x management’s FY Mar-26 EPS target and 0.9x book value. Upside potential to book value while waiting for confirmation of forecast recovery.

• Nanya Technology’s results missed expectations last week, showing a sharp decline in margin, underperforming the recent results performance of Micron & SK Hynix.
• The company was more conservative on a pricing recovery outlook for its memory ASPs than Micron & SK, due to lacking DDR5 DRAM products and lacking High Bandwith Memory DRAM.
• Nevertheless the company is cautiously reporting an improving environment and improved customer inventory levels, hence we believe the result still implies an improving memory industry pricing environment into year end.

• As outlined in previous reports, Aeon has been working hard to streamline its vast retail empire but also rethinking the fundamentals of retailing for each major format it operates.
• The results are now coming through with a big increase in operating profits in 1H2023, up 23% on last year.
• There is real momentum now, and the new online supermarket business is central to its ambitions to create the first true national FMCG business.

• The U.S. Big 3 banks delivered strong 3Q23 earnings on the back of record net interest income, despite a lower balance in commercial loans and residential mortgages.
• Credit quality is mostly steady, with credit card charge-offs normalized. The main pain point is in CRE, especially for WFC. 
• The proposed Basel III end game, if materialized, could have a huge impact on JPM and Citigroup in particular.

• Due to IPO policy adjustment on SSE STAR Market, investment/financing for innovative drugs should continue to deteriorate.But the positive side is the innovative drug industry is emerging from the bottom.
• For the three hot fields in pharmaceutical industry (BsAb, ADC, CGT), we analyze their position and pecking order, which should be ADC > BsAb > CGT at the current stage.
• To better understand the investment logic of Fosun Pharmaceutical, it is necessary to fully understand the ecosystem/operational model of Fosun Group. Fosun Pharma’s role is just a “chess piece”.

• Braze, a leading customer engagement cloud-based platform provider, outperformed its key competitors, Adobe and Salesforce, on a year-to-date basis. 
• Braze shares massively outperformed, with shares up ~67% over the year versus a ~28% gain on the NASDAQ. However, the stock is still below the IPO price of $65/share. 
• Reported y/y revenue growth has decelerated from 58% in FY22 to 49% in FY23, and management has guided ~27% y/y revenue growth in FY24. 

• Hanall Biopharma (009420 KS)‘s licensed partner Harbour BioMed announced that the China’s NMPA has officially accepted the Biologics License Application for batoclimab for the treatment of generalized myasthenia gravis.  
• Immunovant announced positive initial result from the single-ascending dose portion of the Phase 1 trial of IMVT-1402. Initial data from the multiple-ascending dose cohorts are expected in October/ November 2023.
• Hanall and Daewoong have initiated phase 1 clinical trial of HL192 for the treatment of Parkinson’s disease, and dosed the first subject. The initial results are expected in 2H24.

• Seven & I Holdings (3382 JP)‘s FQ2 OP exceeded consensus by ¥2.0bn (1.3%), but with FH2 revenue guidance lowered by ¥95bn, the overall outlook appears discouraging.
• The company’s shares fell by 5%, underperforming Topix by 3.8%, indicating investor concern about US growth and departing from activist proposals despite a ¥2.0bn earnings outperformance.
• If overseas investors who supported ValueAct’s proposals begin to exit, Seven & I could face substantial downside risks in the near term.

• Anta Sports Products (2020 HK) announced a set of strong 3Q23 operating data yesterday after market close.
• Both Anta and Fila brands performed well in a challenging macro environment in China in 3Q23, with 3Q22 being a high base. 
• Another bright spot is that other brands outside of Anta and Fila grew 45-50% yoy in 3Q23, with Descente up 40-45% yoy and Kolon up 65-70% yoy.

• The bank is seeing high growth in cash and deposits, with loans in decline, and the composition moving more toward government and corporate loans
• ALM does not appear strong, and without any easy way to reduce operating costs, the bank is now seeing cost/income surge to 74%
• Credit metrics on surface may appear fine, but the 47% QoQ rise in provision costs, suggests to us provisions were cut too much last year, and now there is normalization

• SBI Life leads the Private Life Insurers in India in terms of market share, thanks to exclusive access to Banca channel of the largest bank in the country.
• SBI Life has been one of the best-performing life insurers in terms of growth as well as margin expansion among peers in recent years, which we expect to continue. 
• SBIL is our primary pick in the Indian Life Insurance space with an upside of ~24% and its relatively cheaper valuations offers a margin of safety to cover near-term risks.

• We visit the ‘City of Joy,’ Kolkata, to understand the state of the industry, focusing on microfinance and the status of lenders concentrated in the region.
• Multiple factors argue for a cyclical bottom for lenders operating in West Bengal and Assam. 
• We have been positive on Bandhan Bank Ltd (BANDHAN IN), but it is a play on cyclicality rather than a complete turnaround & transformation of its habits.

• Market concern on company’s redemption of Bonds of $ 3 bn in 2024 
• Liquidity gap for company is much larger estimated at nearly $11 bn
• Company needs to raise long term funds and/or divest assets to raise the required amount

• Pulsar Helium (PLSR CN)C; target price of C$0.90 per share: Additional acreage should increase the size of the prize – Pulsar has signed a lease with a private mineral rights holder to expand the area of the company’s Topaz helium project.
• The additional mineral rights are within a 6.2 mile radius of the Topaz discovery and cover a total of 2,840 gross acres (1,049 net acres).
• OMV (OMV AG): 3Q23 update – 3Q23 production was 364 mboe/d.

• We are starting a new series called “Asian Dividend Gems.” We plan to write about outstanding companies in Asia with high dividend yields (5% to 20%).
• The first company in this series is Koentec. From 2018 to 2022, its dividend yield averaged 5.2% and its dividend payout averaged 80.8%. The current dividend yield is 7%.
• Koentec is a leading Korean company that provides industrial waste incineration, steam production (utility), and waste landfill services. 

• Ansell Ltd (ANN AU) reported 11% YoY decline in revenue to $1,655M in FY23. Healthcare business experienced significant customer destocking through FY23, leading to 21% YoY decline in segment revenue.
• Ansell has outlined an investment program to improve productivity and accelerate digitalization for total cost of $70–85 million. The program calls for production as well as job cut.
• Strong headwinds in the glove sector are expected to continue as the global oversupply situation persists. Ansell expects FY24 adjusted EPS to be $0.92–1.12 (down 3–20% YoY).

• Central Huijin, the sovereign wealth fund, increased their shareholding of the Big 4 banks in China on 11 October 2023
• Contrary to their last similar action, Huijin will increase its stakes in these banks over the next 6 months period, providing stabilizing force of the stock prices 
• Worries on property sector, LGFV and the overall health of the economy have significantly depressed banking stocks. 

• If you’re an investor in any firm with some form of dominance in US markets, then you need to know who Ms Lina Khan is.
• Corporate misbehavior is a topic of her interest. She shows zero tolerance towards large corporations who wield outsized market power.
• FTC along with 17 US states filed a lawsuit against Amazon for illegally maintaining monopoly power. How will Amazon be impacted?

• Tesla Inc. will have to sell a record number of cars in the fourth quarter to reach its goal for the year after third-quarter deliveries declined.
• The electric-car maker produced 430,488 vehicles in the third quarter, down 10% from the second, and delivered 435,059 units, down 6.7%, Tesla said Monday.
• The drop in deliveries resulted from production stoppages at its factory in Fremont, California. Tesla CEO Elon Musk said in July that production facilities would be closed at various times in the third quarter to perform plant upgrades.

• Shift Inc (3697 JP) reported 4Q and full-year FY08/2023 results today. 4Q revenue increased 38.2% YoY while OP more than doubled during the quarter. Both revenue and OP beat consensus estimates.
• Full-Year revenues and OP increased 35.7% and 67.4% respectively beating consensus estimates by 1.2% and 67.4% respectively. Both revenue and OP were above the company’s own guidance.
• Shift’s share price has dropped by about 17% since August as market became concerned over the growth prospects, however, share price has started to move up.

• GoTo Gojek Tokopedia may see a stabilisation of the declines in GTV that it has experienced over the last 2Qs, with some of the platform’s new initiatives gaining traction.
• The closure of TikTok Shop should be positive at the margin for Tokopedia but it has also rolled back its platform fee, which has had a positive impact on growth.
• New initiatives include GoRide Transit, GoCorp, GoTo PLUS, and the GoPay app, with the latter seeing strong take-up. 3Q2023 results should reveal more details on initiatives. All-time low seems unjustified.

• Price consciousness remains high among most Japanese consumers at present, a boost to low-cost apparel retailers.
• Shimamura, which has posted three straight years of growth But when price is the main driver, competition from the likes of Shein and Temu becomes a growing problem.
• So even Shimamura is trying to add value through branding, collaborations and Shein-like supply chains and the outlook is promising, suggesting significant upward gains for the stock.

• Saizeriya (7581 JP) is a Japanese restaurant chain of fast casual Italian food, with currently the majority of operating profit and growth coming from China. 
• The Asia segment, which is primarily restaurants in China, nearly doubled operating profit in FY23 (year ending August) from pre-COVID FY19.
• The company is trading at 27x FY24E PE, with more than 80% expected growth in operating profit in FY24. 

• Suzuken Co Ltd (9987 JP) reported better-than-expected Q1FY24 result, due to an increase in specialty drug distribution contracts and a larger than expected contribution from products related to COVID-19.
• In Q1FY24, revenue increased 4% to ¥573.6B, driven by 4% YoY growth in pharmaceutical distribution business, due to increased sales of new drugs such as specialty drugs and COVID-19 therapeutics.
• The company guided for FY24 revenue of ¥2,231.9B, down 4% YoY. Operating profit is expected to decline 48% YoY to ¥17B. Net profit is guided at ¥13B, down 36% YoY.

• Plug Power Inc. delivered a mixed set of results for the quarter, with revenues above the analyst consensus.
• Plug’s second quarter results show significant growth in a number of its recently introduced goods, especially in its cryogenic industry, which generated $69 million in revenue in the quarter, more than a threefold increase over the same period last year.
• In this report, we have carried out a fundamental analysis of the historical financial statements of the company.

• RingCentral Inc. managed to surpass the revenue expectations as well as the earnings expectations of Wall Street.
• The profit increase also resulted in another quarter of significant free cash flow.
• Revenue from subscriptions increased 11% year over year to $514 million.

• Ryohin Keikaku (7453 JP) will announce FQ4 results on October 13th; we expect earnings to beat consensus by ¥2-3bn, potentially boosting stock performance.
• FY24 OP guidance at around ¥55bn could be a catalyst for significant upside potential in the short term.
• The current share price of approximately ¥1,800 per share supports an annual OP of roughly ¥30bn, indicating nearly 100% upside potential with FY24 guidance.

• On 10 October, Kiwoom Securities announced shareholder friendly policies. This could lead to Kiwoom Securities outperforming other major Korean securities companies in the next several months. 
• First, the company will return more than 30% of its net profit to the shareholders in the next three years through dividends and share buybacks/cancellations of treasury shares.
• In addition, Kiwoom Securities plans to cancel all 1.4 million treasury shares it currently holds, representing 5.3% of outstanding shares.

• Shenzhen International (152 HK) is well set to post a significant YoY and HoH growth in earnings in 2H23. Our discussion with the company confirmed this.  
• Profit from Yicheng Qiwanli is expected to be booked and there will be profit upside from REIT listing with logistics hubs at Hangzhou and Guizhou as underlying assets.
• Significant reduction in USD and HKD-denominated debt will reduce its exposure to foreign exchange losses as well as high interest rate, both will be reflected in 2H23.

• The results for Bank Of Queensland (BOQ AU) are illustrative of risks for the mainstream banks in Australia and market expectations
• Even with almost all residential mortgage loans, BOQ’s credit costs rose from AUD13m to AUD71m YoY and Pillar 3 data shows mortgage NPLs up nearly 10% in past 2 months
• Net interest income only +6% YoY and -8% HoH, with operating costs +8% YoY and fee income down, there is nothing core holding the P&L together

• Universal Vision Biotechnology (3218 TT) reported continued growth in 1H23, with revenue, operating profit, and net profit increasing 25%, 31%, and 31%, YoY, respectively. 
• Revenue from high-margin technical service grew 23% YoY, driven by increasing number of refractive and cataract surgeries performed in Taiwan. UVB dominates refractive market in Taiwan, with 50% market share.
• With dominant market positioning in Taiwan, re-opening in China, secular market tailwinds, and widening geographic presence, UVB is expected to report double-digit top and bottom-line growth through 2025.

Ahead of interim results covering the six months to 30 September 2023, to be published in November, Picton Property Income has published a portfolio and asset management update. The company expects the continued progress with a range of initiatives, across all sectors, including leasing, asset enhancement and non-core disposal, to be accretive to NAV and income. Ahead of the results, our forecasts are unchanged.

• PAGD successfully narrowed net loss. It seems that the Company doesn’t mind “sacrificing” revenue scale, which could be considered “a necessary price” to pay for the transition to 2B model.
• PAGD mainly rely on Ping An Group channels to acquire B-end and F-end users, but based on our calculation, PAGD would encounter an obvious growth ceiling at certain revenue scale.
• Although PAGD could achieve breakeven by divesting businesses with low strategic synergies and effective cost control, the Company’s long-term growth potential and prospects remain uncertain, leading to discounted valuation.  

1Spatial’s H124 results show robust revenue growth and continued improvement in the revenue mix, with recurring revenue growing by 24%. Investment in sales resource, inflationary pressures and FX compressed margins, but a strong pipeline for both renewals and SaaS products could drive revenues and margins in H2 and beyond. In particular, the market opportunity for both 1Streetworks and NG9-1-1 has the potential to be transformative. We have upgraded our revenue forecast but leave earnings largely unchanged. Good conversion of the SaaS pipeline could justify further revisions, which may not be reflected in the current valuation.

Newron has announced encouraging interim six-month data from its Phase II trial (study 014/015) of evenamide in 161 patients with treatment-resistant schizophrenia (TRS). The six-month interval data for treatment at all dose levels showed evenamide was well-tolerated and efficacious, with statistically significant responses (p-value <0.001) across the key efficacy measures (PANSS, CGI-S and LOF). The interim data also provide inputs for the potentially pivotal Phase III trial (study 003), which we expect to start in Q124. We note that one-year data was reported on the first 100 participants of study 014/015 in May 2023, and we now await the complete one-year data from the full 161-patient cohort, expected in Q124. If favourable, this could be a significant inflection point for the company.

FY23 trading has continued according to the early August update, demonstrating the benefit of two unrelated activities at Carr’s Group: the Engineering division’s strength countering the weakness seen in the Speciality Agriculture business. Both have underlying longer-term growth attractions to drive earnings, along with the recovery potential in the agriculture end-markets.