Equity Bottom-Up

• In April, Sekisui Jushi (4212 JP) announced lackluster earnings and unsurprising guidance after a year marked by higher costs. It also announced a small (2.5%) buyback, likely for cross-holdings.
• Yesterday, the company announced Q1 results, and a revision to their buyback programme (to buy 20.2% of shares out). This morning their 22+% (#1) shareholder Sekisui Chemical sold 18%. 
• Forward PER dropped nearly 20%. The stock is still outrageously cash/securities-rich and if “re-levered” to zero net leverage would get a high 20s ROE. Hmmm…

• Sheng Siong (SSG SP) reported another resilient quarter with revenue growth at 4.7% YoY and profit growth flat, with annualized ROCEs at 27%. 
• Net cash grew to 289 mn SGD (highest ever now at 12% of market capitalization). The company is expected to expand by 3-4 stores in FY23 for Singapore.
• While the stock is not cheap at 19x/18x FY23e/FY24e and 3.8% dividend yield, we see prospects for margin expansion in further quarters as execution remains high quality.

• Positive profit alerts from both Jiumaojiu and Haidilao reflect strong gain in operating efficiency but also point to looming growth deceleration as brands mature.
• We see valuation more reasonable due to a combination of sector de-rating in 1H23 and higher visibility into earnings recovery post these profit alerts.
• Yum China remains best long-term play in China catering sector in our view. While both Haidilao and Xiabuxiabu present trading opportunity, we are still cautious about Jiumaojiu.

• Mizuho has well positioned for YCCC relief with its balance sheet management in 1Q24
• Less low yielding cash assets, higher loans, securities, shift into NCDs, from deposits
• Mizuho reports credit costs reversals and better credit metrics are clear in NPL detail

• Asics is due to report on 8th August. We expect another strong quarter and guidance revision
• Recent results from Nike bode well for Asics – declining inventories and strong top line performance in China
• We believe that higher operating margins will be the key stock driver and see 10% upside to fair value

• CKA is a well diversified conglomerate with residential DP and IP (office and retail) in HK and China, with sizable business in UK (pubs) and infra assets in EU
• CKA focuses on capital mgmt (share buybacks, M&As, disposals), and consistently unlock value for shareholders.  CKA is in net cash, its strongest balance sheet position for 20 years
• Valuation is extremely compelling. We recommend CKA as a long-term buy and hold for investors and traders

• Ono Pharmaceutical (4528 JP) recorded 13% YoY revenue growth to ¥120B in Q1FY24, driven by 12% YoY growth in product revenue. Royalty revenue grew 14% YoY.
• Revenue from Opdivo grew 11% YoY to ¥37.8B, due to expanded use in treatments for gastric cancer, esophageal cancer, urothelial carcinoma, etc. Revenue from Forxiga grew 34% YoY to ¥17.5B.
• For FY24, Ono continues to expect revenue growth of 6% to ¥475B. Operating and net profits are expected to increase 8% and 2% to ¥153B and ¥115B, respectively, for FY24.

• 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 expand our list coverage into Multi Bintang Indonesia (MLBI IJ), Delta Djakarta (DLTA IJ), and Sheng Siong (SSG SP) as quality high ROCE names worth looking at.

• ATNI is in the last stretch of its capital expenditure spending plan and subscriber count is beginning to support the larger and faster network
• ATNI has grown the number of high-speed broadband and mobile customers, which is fueling the efficiency in the operating model.
• The transition away from wholesale wireless roaming to network management should further improve the operating structure of the business.

• Lam Research delivered a positive result and managed an all-around beat in the last quarter.
• Additionally, Lam Research experienced a decline in memory spending, particularly in the NAND segment, impacting its revenue concentration.
• Lam Research also announced its plans to advance India’s semiconductor workforce development goals.

• Apple will report its earnings on August 3rd, 14:00 PDT. We highlight two potential trades into the Apple earnings event.
• Quanta Computer has massively outperformed Apple due to investors latching on to its AI-server growth story. One can consider to Long Apple / Short Quanta into the Apple earnings event.
• Hon Hai, Flexium, and Zhen Ding have all lagged Apple’s shares yet generate significant revenue from Apple. One can Long a basket of the three into Apple’s earnings.

• Nihon M&A reported 1QFY03/2024 results on Friday. Both revenue and OP decreased 9.1% and 52.5% YoY to ¥8.2bn (vs consensus ¥9.8bn) and ¥1.7bn (vs consensus ¥3.6bn) respectively.
• M&A sales decreased yet again in 1Q as the company is struggling to improve revenue per transaction despite there being an increase in the no. of transactions.
• We think the company may not be able to achieve full-year target given declining per transaction revenues and falling other businesses.

• Cisarua Mountain Dairy (CMRY IJ) remains one of the most interesting and dynamic staple players in Indonesia, with a leading position in yoghurt and growing strength in consumer foods. 
• CMRY continues to achieve strong top-line growth of +21% in 1H2023, with consumer foods driving growth and 50% of sales but we expect dairy to see better performance in 2H2023. 
• Cisarua Mountain Dairy (CMRY IJ) continues to invest in marketing through digital channels, including TikTok. Valuations remain attractive relative to its growth prospects, with more than 20% 3-year EPS CAGR.

• Sula Vineyards (SULA IN) is one of the leading wine producers in India.  
• Focus on premiumization, market leadership, and industry prospects are attractive. 
• However, high working capital, recent resignations, and customer concentration along with market’s high valuations make it a watch-list candidate.

• Wave of earnings this week — AMD, Qualcomm, Apple internationally… and Delta, Advantech, Innolux, Winbond, Realtek, plus others in Taiwan.
• We visited Micron’s A3 fab in Taiwan; SK Hynix gives strongest comments yet on Memory turn-around; Long Nanya Tech on DRAM turn-around.
• Intel results readthrough: PC cycle improving and could be accelerated by AI-demand… We continue to see Elan Micro as a laggard play on rallying PC names.

• M3 Inc (2413 JP) reported 1QFY03/2024 results on Friday. Revenue increased 0.7% YoY to ¥57.4bn (vs consensus ¥58.1bn) while OP decreased 3.7% YoY to ¥18.0bn (vs consensus ¥18.1bn).
• Overseas revenue growth further slowed down to 5.3% despite the company expecting overseas business growth to help offset slowdown in pharma marketing business going forward.
• This proves that m3’s long list of M&A’s have not been really successful as we have not observed any meaningful growth from these new acquisitions.

• Oriental Watch (398 HK) cycled into favorable comps for April-June 2023 owing to COVID-related closures in China in 2022 for the same period. 
• Another favorable data point was the Emperor Watch & Jewellery (887 HK) positive profit alert for H1 FY23 ( Jan-Jun 2023), where the company guided >100% net profit growth. 
• Oriental Watch (398 HK) trades at 6.9x FY24e, with more than 50% of the market cap in cash and a ~100% payout ratio resulting in a 14% dividend yield. 

• We expect SMIC to report C1Q23 top-line and non-IFRS net income 2% and 16% vs. consensus, respectively.
• We suggest SMIC’s ability to supply sanctioned firms with 14/7nm nodes provides it with significant pricing power. We expect the decline in SMIC’s wafer ASP to slow.
• We expect overall 2H demand to improve due to (1) normalizing fabless inventory levels, and (2) stabilized smartphone demand. We maintain BUY rating and raise our TP to HK$ 26.

• High earnings visibility – Q1 FY3/2024 results indicate a robust start to the year with record-high quarterly sales, orders, and backlog.
• We believe the company exhibits robust earnings visibility, which can be attributed to its adeptness in delivering high-value-added services within a highly competitive market, with its high-quality workforce and sufficient capacity.

• Aiming for long-term sustainable growth –whilst strong results are appealing, we are encouraged by the following which we believe will allow the business the sustain long-term growth

• Many analysts have a bullish outlook on The Bank of Nova Scotia’s stock, which is arguably warranted.
• But plenty of risk factors are being overlooked, and late payments are mounting with short-term retail obligations in particular focus.
• Scotiabank’s emerging market strategy could present compelling trend growth.

• Prosus looks to continue to cut its stake in Tencent by 2-3% every year to fund its open-ended share buyback program.
• Evidence would suggest that the buyback is set to continue at a relatively steady pace for the foreseeable future, which should support the discount to NAV going forward.
• The simplification of the shareholding structure, to remove the cross-holding, could sustainably reduce Prosus’ discount to NAV by roughly 10%.

• Astra International (ASII IJ) released a solid set of numbers in 1H2023, with growth across most of its divisions from autos to heavy equipment, and infrastructure.
• 1H2023 was marked by a series of acquisitions across growth areas of the Indonesian economy including nickel, digital health, data centres, and classifieds.
• Astra International remains our top proxy pick for exposure to Indonesia, with recent acquisitions making the company all the relevant in new areas of growth.

• Fanuc reported 1Q3/24 operating profit of ¥32.6 billion (-26.3% YoY), missing street expectations at around ¥43 billion
• Fanuc cut full year guidance for operating profit to ¥118 billion (-38% YoY), way below street estimates of ¥176 billion
• Turning bearish. We think the stock will essentially tread water given lack of catalysts over next 6-9 months and valuations

• Intel’s latest results imply a potential bottoming of its business & nascent turn-around; however the greater take-away is that the PC industry is heading into a major AI-driven up-cycle.
• PC industry inventories are now “healthy” and Intel’s Client Computing segment (PCs) showed the strongest QoQ revenue growth. Management is guiding for continued improvement next quarter.
• Edge AI will drive a major upgrade cycle for PCs worldwide and Intel’s new Meteor Lake chip could be a catalyst. Invest ahead of AI PCs having their “ChatGPT Moment”.

• TSMC’s premium is trading at a historically high level after its recent results release, while ADR short interest has remained subdued.
• ASE’s ADR premium is at one of its highest levels in history, appears precarious in our view.
• ChipMOS premium near middle of range; the company will report results this week.

• Delta Thailand has surged 22% in NT$ terms since our last piece, while Delta Taiwan rose only 6%. We see two potential trades here.
• Delta Thailand reported its results on 27 July and beat expectations by 22%. Delta Taiwan will release its results on August 1st with its analyst call at 15:00 Taiwan time.
• 1) Potential Long Delta Taiwan event trade into Taiwan earnings 2) Long Delta Taiwan vs. Short Delta Thailand based on the relative prices reverting back to their end June ratio.

• The Rmb10.8bn acquisition of clean energy assets from parent by China Power International (2380 HK) is positive in raising its clean energy proportion to over 70% of total capacity.
• The drop in share price reflects concerns about elevation of gearing and the need for potential equity funding. However, even all equity financing scenario will only dilute EPS by 1%.
• We think its earnings quality will improve, balance sheet will be enhanced and profitability will be raised. Its 1H23 positive profit alert also showed a recovery in operational performance. 

• Kenvue (KVUE US) reported 5% YoY revenue growth to $4B in 2Q23, driven by continued demand of self-care portfolio, mainly consisting of cough, cold, and allergy, and pain care products.
• The company has guided for 4.5–5.5% revenue growth and EPS of $1.26–1.31 for 2023. Kenvue has declared a cash dividend of $0.20 for 3Q23.  
• J&J is offering its shareholders the option to exchange shares for Kenvue’s at a 7% discount. The exchange offer is scheduled to close on August 18, 2023.

• Cadence exceeded the revenue and earnings expectations of Wall Street for the second quarter of 2023, resulting in year-over-year 14% revenue growth and 19% non-GAAP EPS growth.
• In terms of Generative AI, the customers of Cadence are adopting its chip, Generative AI portfolio, system, board, and package as they are achieving exceptional productivity benefits and quality results with these solutions.
• We give Cadence Design Systems a ‘Hold’ rating with a revised target price.

• Our 1H23 revenue estimate is 8.7% lower than consensus, and we expect 1H23 NPM at breakeven vs. consensus at 5%。
• Mainly because teahouse brands in China had suffered the intensified competition from the price war in Coffee industry.
• We maintain the stock as BUY rating as the margin improvement process is gradual showing effect, while we lower TP by US$2 to US$9.3 to reflect the intensified competition pressure.

• Cipla Ltd (CIPLA IN) reported better-than-expected Q1FY24 result, with revenue growing 18% YoY, driven by India and the U.S., both of which reported record high revenue.  
• Stellar performance across all markets drove EBITDA to multi-quarter highs. EBITDA margin expanded 230 bps YoY and 310 bps QoQ to 23.6%. Net profit increased 45% YoY to INR10 billion.
• Cipla expects the average revenue run rate of $210–215M from its U.S. business in the coming quarters. For FY24, management has raised EBITDA margin guidance to 23% from 22%.

• AD (Alzheimer Disease) and RNAi are one of the most valuable breakthroughs in global pharmaceutical industry in recent years. We think they may bring the next round of biopharmaceutical prosperity.
• MNCs have begun to adjust their strategic business model in China. Licensing cooperation and equity investments in China biotech companies are expected to become a new trend.
• We can’t expect too much from Genscript Biotech (1548 HK) just because Legend Bio’s CAR-T product has good sales performance. Genscript could underperform based on our analysis.

• SK Hynix’s Q2’23 revenue increased ~50% QoQ with bit shipment growth of ~35% for DRAM, ~50% for NAND
• AI-Driven demand for DDR5 & HBM pushed DRAM QoQ ASP growth into positive territory for the first time in 9 months. 
• But it’s still stormy weather ahead as mainstream DRAM, along with NAND ASPs continue their downward slide

• Global Fund exposure in NVIDIA Corp (NVDA US) has moved to record levels after a doubling of the share price this year.
• New positions from UniNachhaltig Global, JP Morgan Global Focus  and BNY Mellon Global Equity (3.36%) were among a total of 14 funds who opened exposure to NVIDIA Corp in 2023.
• Growth and Aggressive Growth funds are at maximum levels of ownership, whilst Value managers are showing some hesitancy here.

• US Mutual Fund exposure in Ford Motor Company hits all-time lows with just 11 out of 295 funds holding a position.
• Ford Motor Company is now the 6th most widely held Auto stock after Tesla, General Motors, Rivian Automotive, Harley Davidson and Oshkosh Corp.
• Ford tops the list of unloved companies in the US, with the vast majority of active managers expecting Ford to underperform.

• The SoftBank share price rally is, in our view, based on optimism around the Arm IPO, the Yen’s relative weakness and recovering share prices of public companies in the portfolio
• Nvidia’s emergence as a potential anchor investor in the Arm IPO has boosted SoftBank shares, yet there is still a big disparity between groups in terms of Arm’s potential valuation
• Aside from a recovery in public tech companies’ shares, Yen weakness has supported SoftBank’s asset values; monetary policy moves now indicate the prospect of a stronger Yen versus the USD

• BFI Finance Indonesia (BFIN IJ) booked a solid set of 1H2023 results that were marred by an operational blip, with 2Q2023 impacted but this is likely to abate in 2H2023.
• The company continues to stand out for its leading position in collateralized lending backed by 4W, 2W, heavy equipment, shophouses and property, with an accomplished 15-year track record
• BFI Finance Indonesia remains the top pick to play the increasing growth from multi-finance in Indonesia. It trades on 2x FY2023E PBV, forecast to book an ROE over 20%.

• UK Fund exposure in Softcat PLC has reached new highs.  The percentage of UK funds invested in Softcat now stands at a record 17.3% with average holding weights of 0.21%
• Softcat PLC moves to the 5th most widely held Technology stock in the UK, sharing similar ownership characteristics to Spirent Communications, Halma PLC and Oxford Instruments.
• With Softcat approaching the boundaries of FTSE 100 inclusion, it’s not hard to envisage investment levels moving higher from here.

• Dr. Reddy’s Laboratories (DRRD IN) started FY24 on a strong note, with Q1FY24 revenue and net profit growing 29% and 18%, YoY, respectively, driven by North America generics business.
• Revenue from North America generics increased 79% y/y and 26% q/q to INR32 billion, driven by new product launches, continued momentum in existing products, and favorable forex rates movement.
• During Q1FY24, the company has launched six new products in the U.S. With a rich ANDA pipeline of 85 ANDAs, launch momentum is expected to accelerate in the current fiscal.

• Steel Dynamics had a disappointing second quarter with revenues below Wall Street expectations though they did manage to report improved net income and EBITDA.
• The management noted increased pricing and metal spread across flat-rolled and long-product steel operations.
• Steel Dynamics’ net income stood at $812 million, operating income at $1.1 billion, and EBITDA at $1.2 billion.

• Impinj warned revenue would decline sequentially in the third quarter due to weaker than expected demand from retail apparel customers. The shortfall started  towards the end of the second quarter
• Impinj increased inventory in the first quarter and more so in the second quarter. Inventory within the channel has also increased compared to the first quarter
• Impinj’s stock continues to price the downward revenue scenario as a short-term event. Previous downturns have lasted more than one quarter

• SAP delivered a mixed set of results in its most recent result with revenues above Wall Street expectations but below-par earnings.
• RISE with SAP and GROW with SAP have been well-received offerings, driving significant cross and upsell opportunities across their portfolio.
• SAP’s approach with SAP Business AI is unmatched in the industry, delivering relevant, reliable, and responsible AI solutions to customers, with plans to introduce new premium RISE offerings and an uplift of up to 30% in the fall.

• Alcoa delivered a solid result and managed an all-around beat in the last quarter.
• The company had a mixed last quarter and reported slightly higher revenue and increased shipments but experienced challenges due to market conditions.
• Despite lower alumina and aluminum prices, they improved net loss due to the nonrecurrence of specific charges.

• We expect Shopee’s competitive landscape deteriorated in 2Q23, due to increased pressure from TikTok/Lazada in ASEAN, Coupang in Taiwan, and Shein in Brazil. Temu is a large swing factor.
• Shopee has been pushing live streaming and its full-management (or consignment) mode. In our view, these will drag down its profit margins and may not be effective in gaining share.
• We estimate 2Q23 revenue and non-GAAP net income are 2.5% and (24%) vs cons. We have revised down Shopee’s growth expectations for the next 3 years.

• VW’s long-term software dilemma caused delays of new EV model launch. Thus, leveraging established software capability of Xpeng could help VW catch up and shorten its R&D cycle.
• We see two benefits for Xpeng: 1) a new revenue stream from tech licensing and potential reduction of supply chain costs; 2) VW’s endorsement  could help Xpeng’s overseas expansion.
• We think the potential of Xpeng’s high-margin tech licensing being opened to more VW models and other OEMs. Our TP implies 2.5x 2024PS

• Google, Microsoft, and Facebook reported earnings.
• Let’s discuss their capex plans and what that means for our new data center champion, Nvidia.
• I think it’s pretty straightforward that Nvidia has revenue beats for the foreseeable future.

• Multi Bintang Indonesia (MLBI IJ) delivered a steady Q2 2023 with revenues up 16.6% YoY and profits up 32% YoY, aided by revenue growth on alcoholic beverages of 20% YoY. 
• EBITDA margins expanded to 50% in Q2 2023 from 45% in Q1 2023 but remained flat YoY. We expect margins to continue expanding in subsequent quarters as revenues grow seasonally.
• Trading at 15.8x/13x FY23e/24e PE, with a 6.3%/7.7% dividend yield, we believe this is an excellent play on tourism recovery in Indonesia. 

• LGES provided a lower sales guidance in 3Q 2023 due to slower sales in Europe. LGES expects its sales in 3Q 2023 to decline in a QoQ basis.
• The share prices of the top 12 rechargeable battery names in Korea are down on average 13.9% in the past two trading days.
• We believe that the overall sentiment on the rechargeable battery sector in Korea has started to turn sour which could have a further negative impact on companies such as LGES. 

• Mizuho’s current tax expenses can see normalization that restores profitability by June quarter
• Yield curve control relief coming at a time of tax normalization, can be significant to profit
• Credit costs have moved higher, but the magnitude may wane, given NPL distribution

• AKR Corporindo (AKRA IJ) booked solid set of numbers despite a less favourable pricing environment with the additional boost from a ramp up of sakes at JIIPE.
• JIIPE will become a more important contributor for AKR Corporindo, as it builds a critical mass of EV-battery-related tenants plus it benefits from increasing demand from smelters for chemicals
• AKR Corporindo remains a core industrial holding in Indonesia, through both its petroleum and chemicals business plus its industrial estate, which is a multi-year growth story. Valuations remain attractive. 

• Samsung Biologics (207940 KS) reported record-high revenue and operating profit of KRW866 billion and KRW253 billion, up 33% and 49%, YoY, respectively in 2Q23, aided by contract signing spree.
• With continued orders from the leading global pharmas, the company’s total cumulative CMO contracts reached to $11.3B in July, up 19% from $9.5B at the end of 2022.
• Outlook for H2 is more positive with revenue from Plant 4 will be reflected from Q3. Two new biosimilars launch in the U.S. and EU will also add to revenue.

• Wildly improving credit metrics, with NPL coverage now at 1,144% in 1Q23
• Core net interest income is strong for past 3 quarters, now at +31% YoY
• Key line item deltas can continue, suggesting ROA to surpass 1.0% soon

• Takeda Pharmaceutical (4502 JP) reported 1QFY03/2024 results today. Revenue increased 8.9% YoY to ¥1,058.6bn (vs consensus ¥989.8bn) while OP increased 12.0% YoY to ¥168.6bn (vs consensus ¥123.5bn).
• The topline growth was driven by growth & launch products which accounted for 40% of total revenues, and increased 16.2% YoY during the quarter at constant exchange rates.
• Takeda is expecting 7-8 key regulatory decisions during the current fiscal year and we expect dengue vaccine and other new launches to help offset revenue loss from upcoming patent expiry.

• Tencent (700 HK) ’s online games business grew for the first time in 1Q2023 (+10.8% YoY) after four consecutive quarters of YoY decline followed by regulatory hurdles.
• Our app data analysis reveals that online games revenue would grow by about 12% YoY in 2Q2023E driven by increases in both domestic and international games revenues.
• On Monday, it was also reported that Tencent is in the process of acquiring a majority stake in Polish gaming studio Techland, expanding the long list of overseas gaming acquisitions.

• UMC reported 2Q23E results with revenue falling 20% YoY and EPS down 30% YoY. Results were higher than consensus but forward guidance was worrisome in our view.
• We are concerned by UMC’s high exposure to more mature technology nodes, limited exposure to AI, and vulnerability to China competition forced to focus on non-leading edge technology nodes.
• We rate the stock Underperform with a target price of $36 which implies a 2023E PER of 10x.

• In June, mainstream parcel pricing declined by over 10% Y/Y, but SF Holding saw ASPs rise
• We believe J&T Global Express’ planned IPO could negatively impact the industry in H2
• Pricing pressure has increased, in our view, and we expect margins to decline in H2 23

• Grab recently announced the acquisition of Trans-cab in Singapore, the 3rd largest taxi operator there. This will help to solve driver shortage issues and improve cost efficiencies.
• Taxis pay the lowest COE prices plus Grab can improve the productivity of taxi drivers through access to the Grab app. Trans-cab gives Grab access to street hailing. 
• Grab‘s Singapore digital bank recently raised new capital but has also seen its deposit cap lifted significantly, which is helping to significantly boost deposit growth.

• CyberAgent Inc (4751 JP) reported 3QFY09/2023 results today. Revenue decreased 0.2% YoY to ¥171.7n (vs consensus ¥177.8bn) while operating income decreased 86.2% YoY to ¥1.4bn (vs consensus ¥11.0bn).
• The game business has further deteriorated during 3Q with the absence of hit title launches and drop in UMA MUSUME Rankings. Segment reported losses during the quarter.
• CA has opened pre-registrations for two new games, we are not convinced that these could become top performers as the company has not given a hit title since UMA MUSUME.

• Since 1H FY24/3 corresponds with the bottom of the current reset cycle, initial guidance for net sales is -9.3% YoY.
• In addition to ongoing high electricity rates, depreciation expense is set to increase +51.1% YoY, and initial guidance for OP is -62.3% YoY.
• On a cash flow basis, implied EBITDA is forecast to decline -29.1% YoY.

• Krung Thai remains our pick; it ranks second from top in terms of post-provision profitability, screens well on NPL coverage, funding as well as PBV ratios and PE multiples
• We also like Ayudhya, with its sound pre and post-provision profitability metrics in 2Q23, its sound credit quality metrics and attractive valuations
• Kasikorn has seen its TTM cost of risk remain high, and it is the negative outlier versus its peers; yet Kasikorn’s poor share performance makes it one for the watchlist

• We are negative on Feng Tay Enterprise’s share price in the next 6-12 months mainly due to inventory/margin concerns at its largest customer Nike combined with unattractive valuations.
• In the next several months, we think there is a higher probability of Feng Tay’s share price underperforming versus Nike.
• Feng Tay Enterprise is one of the largest global OEM/ODM companies that specializes the design and manufacturing of footwear. Nike is one of the largest customers of Feng Tay Enterprise. 

Oryzon’s H123 results highlight the continued progress of its lead clinical-stage assets, including positive aggregate safety data from the Phase IIb PORTICO trial assessing vafidemstat in borderline personality disorder. The company also indicated that enrolment is proceeding for the Phase IIb EVOLUTION trial (assessing vafidemstat in schizophrenia) and for the Phase Ib FRIDA trial (evaluating iadademstat in acute myeloid leukaemia, (AML)). Total H123 operating expenses were up by only 0.5% y-o-y (to €10.95m), despite a 6.3% increase in R&D costs (to $8.63m). With gross cash of $14.6m at the end of H123, we estimate a cash runway into Q224. We anticipate that top-line data readouts from the PORTICO trial (expected in Q124) may be the company’s next significant catalyst.

• Persistent fabless inventory issues dampen the slope of H2’23 recovery. FY’23 forecast further reduced to a 10% YoY decline
• AI-Related hardware will reach 6% of revenues in 2023, a welcome boost but insufficient to counter the negative impact of macro headwinds
• TSMC’s earnings provides an important read through on the likely results and outlook for the broader semi ecosystem in the coming weeks. 

• Shimano reported a 40% drop in operating profit for 2Q and revised down full year guidance
• Bike sales continue to be weak (-19% YoY) in Q2 and 2H outlook is even worse
• We expect the share price to sell-off following the guidance cut. The inventory overhang could take a while to resolve

• The Keepers Holdings (KEEPR PM) declares its Q2 2023 in the second week of August. We expect a 15-20% revenue growth and a similar profit growth. 
• The stock trades at 9.3x/7.9x FY23e/24e, with structural growth drivers arising from rising imported spirit consumption and a monopolistic position with a >70% marketshare by volume.
• With healthy profit growth and a sound balance sheet ( 15% of the market cap in cash), Keepers can pay 50% of profits resulting in a 4.2% FY23e yield. 

• Titagarh Wagons (TWL IN) (now ‘Titagarh Rail Systems’) has seen an extraordinary momentum in its share price in last couple of years, especially after bagging crucial contracts for Indian Railways.
• The company was limping until F22 due to its Italian subsidiary (TFA). However, the recapitalization of TFA (including change in accounting) in F23 should make the balance sheet look better.
• Forensic analysis revealed several takeaways, ranging from write-offs and internal audit issues to heavy contingent liabilities.

• Terumo Corp (4543 JP) recorded highest ever revenue and operating profit in FY23, driven by continued strong growth in C&V business globally, particularly the largest U.S. market.
• C&V business should continue to be the primary driver of Terumo’s growth in FY24 also. The company has guided for C&V revenue of ¥504B in FY24, up 5% YoY.
• Terumo aims to grow profit by double-digit percentage in FY24 and improve profitability through expansion of high-margin products, more assertive pricing policies, and cost reduction measures centered on manufacturing cost.

• Topline grew +9% FXN. While Google Services revenue growth was flat in 1Q’23, it was 5.5% YoY in 2Q’23, with growth re-accelerating in every component of Google Services.
• Despite cost optimization efforts by customers, Google Cloud maintained its momentum with ~28% YoY growth (same as it was in 1Q’23).
• So, on an apple-to-apple basis, Google Services margin would be slightly lower this quarter than reported (say, ~$500 Mn opex for Google Brain).

• Alphawave reported last week.

• The results were not good; they were great.

• I actually am excited to see Tony and the team execute like this. Bookings are growing, and while revenue has not come out yet, it seems very likely they will hit their 2023 revenue estimates.

• From 2022 loss in period, MLCO earnings could come in anywhere between a profit of $0.06 to $0.70 indicative of recovery in Macau, Manila and opening of Cyprus.
• Revenue could come in above $1.2b. This is a forerunner of a solid recovery year.
• MLCO has a global vision beyond Asia that makes it attractive at its current price.

• APLD released 4Q earnings last night. The stock performed well, +14%.
• The key highlight was the huge guidance. In this post I will run through how the numbers make no sense.

• Jamestown, North Dakota (JT) – 100MW – JT has been operating since 2022. It has ~100MW of capacity and has been running at full capacity over the past two quarters, according to comments made on the company’s 3Q and 4Q earnings calls. Here is a snip for the 3Q call.

• Based on the current situation, sales of MCV4 in 2023 could still be unsatisfactory. We think MCV4 is hard to become the second growth curve of CanSino in post-COVID era.
• Whether CanSino’s zoster vaccine is able to become Best-In-Class would largely determine whether this product would truly become the next blockbuster vaccine to turn the situation around for CanSino. 
• CanSino’s commercialized products cannot contribute large-scale revenue in time to prevent continuous deterioration of performance. Results in 2023 could be lower than expected, and investors are losing confidence in CanSino.

• Share price of Travelsky Technology Ltd H (696 HK) is still down YTD as investors are still overly cautious on Chinese travel data. 
• YTD operational data shows that the number of flights processed is very close to the pre-COVID era. 
• The company announced a profit alert recently, that should help to boost share price. 

• Japan’s new restrictions on exports of semiconductor production equipment to China are a potential threat to Screen.
• TSMC’s announcement that 2023 capex is likely to be at the low end of the forecast range is another negative. 
• Share price consolidation should continue until guidance is lowered or verified.

• Infineon benefits from a strong market position in an industry with high barriers to entry.
• The Company’s backlog of €36bn, representing over 2x annual revenues, reduces the impact of end-market volatility. 
• Silicon carbide, the material for semiconductor wafers, is becoming more prevalent. Infineon is well on track to have a material cost advantage and better technology versus its silicon carbide competitors.

• We were invited to BILI’s 2023 investor day, during which BILI management presented several catalysts. 
• However, most of these catalysts appear to be minor. BILI management is fully aware of the challenges in the industry.
• We maintain a SELL rating, and investors may consider shorting BILI after <Uma Musume> is launched.

• There is a possibility that Oriental Land (4661 JP)‘s revenue and OP in 1QFY24 could surpass the consensus estimates by 8% and 21%, respectively.
• However, the outlook for the next three quarters may be different, as consensus appears inflated with annual OP expectations of ¥154.5bn compared to the company’s guidance of ¥122bn.
• We find medium term consensus expectations unrealistic, leading to potential downside for Oriental Land. We expect FY+2 EV/OP to decline from 46x to 20-30x.

• Japan’s semiconductor technology export restrictions took effect on Sunday and are unlikely to ease for China any time soon.
• Apple is reportedly telling suppliers that its flagship iPhone volumes will be similar to last year.
• Hon Hai acquires 50% stake in German auto chassis maker, marking a significant expansion in its EV manufacturing efforts.

• Understanding the essential differences in business characteristics of CRO and CDMO could help investors better understand the differences between Asymchem and Pharmaron in terms of investment logic, financial performance, and prospects.
• Since Pharmaron didn’t obtain COVID-19 big orders, it would maintain normal revenue growth in 2023. However, increasing labor costs and uncontrollable investment business would lead to unsatisfactory net profit performance.
• Asymchem’s performance would be disappointing in 2023. However, its growth momentum is expected to restore after it digest the impact of COVID-19 orders. Then, Asymchem’s valuation could surpass Pharmaron afterwards. 

• As most AI heavyweight stocks (e.g. Nvidia, Microsoft) have already soared, some investors may be left feeling that they have missed the AI bandwagon.
• We believe there’s a delayed “AI winner” which the market is still sleeping on: EPAM Systems.
• With the stock back at ~$230, the risk-reward here is highly attractive in our view.

• Santen Pharmaceutical (4536 JP) expects generic competition for mainstay product in Japan in FY24, while overseas business should continue stable growth. The company guided for FY24 revenue of ¥273B (-2%).
• Due to the absence of impairment loss, Santen is expected to report operating profit of ¥32B in FY24 from an operating loss of ¥3B in FY23.
• Santen has unveiled new medium-term management plan, which calls for revenue of ¥280B, core operating profit of ¥56B, core ROE ratio of 13%, and core EPS growth rate of 10%+.

• Visa continues to deliver as the company fully capitalizes on recent macroeconomic and industry-wide tailwinds.
• The expectations for the upcoming quarter are high and the second half of the fiscal year is also likely to be more challenging.
• This creates certain risks for the share price that are not necessarily priced in at the moment.

• We had a chance talking to the company about key topics about outlook of passenger traffic, recovery of duty-free sales and details about the arbitration.
• The takeaway is mixed as we see both positives and negatives relative to our expectations.
• We cut our forecast of 2023 net profit from RMB400 million to RMB300 million and expect the earnings to be back-end loaded.

• Rates remain depressed but stable, and easier Y/Y comps will arrive in late Summer
• Fuel costs should be a tailwind in Q2 results; Danish giant Maersk reports on August 4th
• We expect Q2/H1 results to support our view that the worst of the storm has passed

• In the past several years, the agricultural market has been subject to escalating uncertainty, catalyzed by a triad of disruptive forces, including a global pandemic, the geopolitical uncertainty exemplified by the ongoing war in Ukraine, and unpredictable climatic events leading to droughts and diminished yields.
• These factors have injected volatility into the market, causing prices to move unpredictably due to periods of shortages and excess supply. 
• Despite the volatility, however, prices remain on a long-term upward trajectory.