Equity Bottom-Up

• Edelweiss reported a strong Q4FY24 led by robust performance across businesses. The asset management business continues to be the lead performer. Insurance businesses are also growing at an industry-leading pace.
• Most notably, the credit business seems to be gaining momentum now, led by co-lending. MSME co-lending disbursements tripled while housing finance (HFC) co-lending disbursements doubled in FY24. 
• To unlock value and reduce debt at the corporate level, Edelweiss is planning a minority stake sale in the Alternative Asset Management business.

• The stock price has corrected to the anticipated level and rebounded
• Dates announced for acceptance and payment for the rights issue
• There may be more weakness once the rights shares start  trading

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• Burford Capital is a leading provider of litigation finance with a market capitalization of $2.5bn and strong revenue and profit figures
• The company, led by innovative founders, has received positive assessments from customers, ex-employees, law firms, and peers
• Burford has a proven track record of competitive advantage in revenue, market share, innovation, customer service, and underwriting skill, with potential for improved returns on capital and vast growth opportunities.

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• Back in 2016, IMS Health and Quintiles went through a merger of equals to form “QuintilesIMS” which was later renamed to be “IQVIA” in 2017.
• “I” and “Q” stand for IMS Health and Quintiles respectively and “VIA” means “by way of”.
• Since IMS and Quintiles both used to be separate public companies, let me discuss these two businesses separately at first before getting into the details of their post-merger status.

• Volkswagen’s US ADRs (VWAPY) have underperformed in the past 5 years, despite a 3% increase with dividends
• Company’s growth guidance and margins are weaker compared to peers, leading to undervaluation of stock
• Trading at low multiples of forward earnings and free cash flow, recent free cash flow guidance for 2024 was unimpressive; preferred shares receive extra dividends but no voting rights

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Games Workshop Group’s FY24 trading update provided a nice surprise on the revenue side, broadly equally split between core and licensing, and an even nicer surprise for PBT, suggesting an improvement in gross margin. We have upgraded our FY24 estimates to be consistent with the indicated figures and marginally increase our estimates for FY25, which reverts to a 52-week period accounting period.

• On May 9, 2024, Migalo Holdings Inc. (hereafter, the Company) announced its full- year FY2024/3 earnings results.
• Sales rose 14.5% YoY to ¥42,672 mn, and operating profit fell 14.4% YoY to ¥2,500 mn, largely in line with the Company’s full-year forecast calling for sales to rise 12.7% YoY to ¥42,000 mn and operating profit to drop 14.4% YoY to ¥2,500 mn.
• The Company will pay a year-end dividend of ¥45 per share, including a commemorative dividend of ¥5 per share to celebrate the 20th anniversary of the founding of its predecessor, Property Agent, Inc.

• RaaS Research Group has published an update report on purpose-led proptech Rent.com.au (ASX:RNT) following its fully-underwritten entitlement offer to raise $2.5m at $0.02/share, with one quoted option for every two shares issued.
• Separately and on June 3, RNT provided a trading update in which it announced that RentPay’s customers at the end of May were up 64% to 9,271.
• We have incorporated the capital raise in our forecasts, but having already modelled an additional $2.5m raise in H2 FY25, the impact to our forecasts is only due at the EPS line.

• BCG is the leading online classified group in the Baltics with 14 portals across three countries
• Management team focused on improving monetization for high revenue growth
• Expected significant value per share growth with exposure to high-growth Baltic markets and plans to increase take-rates, presenting an intriguing opportunity for investors

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• Taste Gourmet (8371 HK) reported revenues up 37% YoY and profits up 29% YoY (lower than our expectation of 39% profit growth) due to a slightly weaker-than-expected Q4.
• Dividends for H2 were 7.4 cents/share (overall FY24:12.9 cents), implying an 8.1% dividend yield. Net cash on the balance sheet was 143 mn HKD (23% of market cap).
• Trading at 6.7x PE FY24 (March end) and with an excellent execution track record, we believe that the company will be able to post more robust numbers in FY25. 

• Despite missing market consensus, Sa Sa International Hldgs (178 HK)‘s FY24 result still have silver linings. Its resumption of dividends with a 70% payout ratio is welcoming.
• Tax credit in 2H23 has distorted comparison. At pre-tax level, 2H24 profit has gone up by 29.5%. Cost management is solid, generating a 0.9pp FY24 operating margin expansion. 
• While overall 1Q25 sales have dropped, mainland China sales surged 83.9%. The macro environment should have bottomed and government efforts to attract tourists will pay off.  

• Production problems of Vyvanse generics seem to be largely resolved with nine of the ten suppliers back in stock.
• Safety concerns with Takeda’s approved psoriasis competitor does raise further concerns as they are both TYK-2 inhibitors.
• The company’s $900 m big restructure and cited areas for margin improvement are not “convincing” and lack detail.   

• We hosted a conference call with Elan Microelectronics management; We view the company as a Structural Long position for the AI PC upgrade cycle.
• From the company’s perspective, significant impact from AI PC demand will come but not until 4Q24E or 1H25E. However, supply chain excess inventory improved and prepping for upcycle.
• An estimated 90% of AI PC models launched at CES 2024 use Elan’s products in their design; Elan well positioned for the upcycle and entrenching its position. Maintain Structural Long.

• While Elizabeth Kan barely survived the AGM vote, ASM has effectively mobilized minority shareholders.
• Lazard (owns 15% of CMCDI) probably voted alongside ASM (owns 9%). Other than China Merchants Group and Victor Chu, almost no “outside shareholders” voted in favor of Kan, .
• The next battleground is a vote in November when CMCDI needs to renew its investment management agreement. Intense behind-the-scene negotiations are expected, given the bargaining power ASM now demonstrated.

• Top Glove Corp (TOPG MK) achieved 16% QoQ revenue growth in 3QFY24, on 13% sequential volume increase and higher ASP. 3QFY24 operational loss reduced to RM34M from RM59M in 2QFY24.
• Considering the current demand and supply condition, Top Glove expects the ASP to further increase. The company aims to recover its EBITDA margin to pre-pandemic levels of 15% by FY26.
• With rising import alert and expected tariff increase on Chinese manufacturers, the US demand may shift from China to Malaysia. Top Glove is poised to benefit from potential trade diversion.

• TYC Brother Industrial is set to dominate the NEV market with a US plant scheduled to be operational by the first quarter of 2025.
• Despite sanctions, a Russian company has introduced the MP21 SBC to rival the Raspberry Pi 5, showcasing the competitiveness of the technology market.
• Cerebras and Dell have joined forces to challenge Nvidia in the AI market, highlighting the growth of AI accelerator technology for servers. Taiwan’s carbon market is advancing with new initiatives and regulations, while the UK collaborates with Taiwan to lead in semiconductors at Semi-Impact forum. India is ramping up cobalt supply efforts to meet growing demand.

• Approaching a transformational phase – MIXI Inc. is a digital content company generating earnings from its ‘MONSTER STRIKE’ mobile gaming franchise.
• Operating in a mature domestic gaming market, the company has successfully diversified into lifestyle and sports, but to date has experienced limited earnings contribution.
• We believe this is about to change, driven by the new monetization strategy for the ‘FamilyAlbum’ video and photo- sharing service app in FY3/25. 

• Perfect Corp. provides an AI and machine learning based B2B SaaS platform for virtual try on and marketing of beauty and fashion products as well as six mobile apps sold B2C for makeup suggestions, try-on, tutorials, photo and video editing and most recently, Gen AI creation and editing.
• It is expanding its offering to new verticals and has strong IP as well as the largest database for AI training in the industry.
• It has a dominant market share and serves almost all the major beauty brands worldwide.

• SharkNinja is a newly listed company with popular consumer brands Shark and Ninja
• Despite challenges in brand-building and international markets, the company achieved a 15% operating margin in 2023
• Analysts project an annualized return of 18-20% based on current earnings yield and expected organic earnings growth

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• Understanding the audience is the number one rule in content creation and building relationships is important globally
• Min Yong Kim started her career in food and nutrition but transitioned to the entertainment industry, eventually joining Netflix
• Lessons learned include the importance of knowing your audience and the shift in thinking about content from traditional media to digital platforms

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• Apple announced Apple intelligence, integrating AI in a feature-centric way for on-device use
• The approach focused on useful features rather than spotlighting AI technology
• Apple’s implementation of AI on iPhone 15 Pro and newer devices showcases their focus on personal intelligence and user-centric design

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• All the business fundamentals continue to trend in the right direction
• The sector has sold off with the general commodity sell-off
• Investors not giving the benefit of the doubt to future oil demand

• West China Cement (2233 HK) is a cement company based in Western China.  Sales volume in Africa in 2023 was 2.6 million tons, up 117% from 1.2 million tons in 2022. 
• The company has 2 million tons of cement capacity in Mozambique, 1.5 million tons in Congo, and 1.3 million tons in Ethiopia. 
• The company is trading at 4x 2024E PE.  I believe the risk reward is quite high here. 

• Money Forward’s share price has declined by around 16% since reporting Q1 results.
• The company will report Q2 results in early July. We expect continued solid momentum
• We believe the stock price has around 30% upside potential to our target price of ¥6,600

• Fujitsu launches GenAI platform for advanced AI capabilities, enhancing customization options for users.
• CuspAI receives US$30M funding, partners with Geoffrey Hinton to address climate change using advanced materials.
• Global IC fab capacity expected to grow by 6% in 2024 and 7% in 2025, with Taiwan playing a key role in AI innovation.

• Practice of committing to ownership, governance, and leadership alignment with companies similar to other respected examples like Berkshire Hathaway and the Walnbergs in Sweden
• Focus on long-term thinking, staying current through innovation, and renewing oneself to ensure enduring success in business
• Importance of family ownership, stability, and long-term thinking in combination with the benefits of being a public company; John Elkann’s background and path to leadership within the family-owned company.

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• We update twelve Japanese regional banks, and add two new names, to target beneficiaries of the improving interest rate outlook; also banks with attractive credit quality, capital adequacy and valuations
• We identify the value of equity holdings for disposal among these banks; the lack of near-term easing prospects at the US Fed should support JGB yields and domestic bank valuations
• We add smaller cap Juroku Financial to our buy list of Tokyo Kiraboshi Financial, Gunma Bank and higher risk option Suruga Bank

• Deep-Sea container rates surged in May, yielding best read since June 2022
• But volume growth into North American WC ports slowed noticeably…
• We believe Q224 results will impress, and still like our Long/Short pairs

• Short recommendation for IRM due to reliance on core document storage business and highly leveraged balance sheet
• Weak cash flow generation and recurring addbacks in adjusted metrics make stock appear more expensive than it is
• Concerns about terminal value and ability to meet cash needs raise doubts about long-term viability of the business

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• Taiwan’s wafer foundry industry set to expand in Q2 2024 with potential government and financial support.
• London Tech Week 2024 showcases AI, semiconductors, deep tech, startups, and global tech partnerships.
• Quanta sees profits double despite workforce reduction, while Intel invests in Luxshare in China to boost market presence.

• Computex showed how Micron has successfully leap-frogged SK Hynix and Samsung in HBM DRAM for AI Servers.
• Now, older ‘boring’ DRAM prices could surge as HBM DRAM production is voraciously consuming memory fab capacity.
• Why Nanya Tech shares could surge higher — A DRAM memory trade for those who don’t want to chase steep 52-week highs in Micron and SK Hynix.

• HBM revenue on track to jump from a few hundred million in 2024 to “multiple” billions in 2025
• Micron expects to become FCF positive in the second half of their fiscal 2024 and to have a record revenue year in their fiscal 2025. 
• Micron’s is doing custom work on their HBM solutions. Customers are signing LTAs with defined pricing. This could easily spread to Micron’s non-HBM products also. 

• In FY24, Morepen Laboratories (MORE IN) achieved revenue, EBITDA, and PAT growth of 20%, 101% and 150%, YoY, respectively, driven by medical devices and API businesses.
• Business has stabilized in FY24 and Morepen is seeing fresh buying of medical devices. With expanding capacity, glucometer and BP monitor are expected to maintain ~30% growth momentum.
• Morepen aims to expand API product portfolio and geographic reach, while maintaining global leadership positioning in six key widely used API products.

• Cofco Joycome (1610 HK) is in a good position to benefit from the hog cycle upturn. China’s anti-dumping investigation into imported pork from the EU may also disrupt supply.
• Its average hog price has increased by 12.7% YTD and by 1.6% YoY for 5M24. Market hog price further surged by 10.4% in the week of 12-Jun from end-May.
• Its P/B of 0.78x is inexpensive at 1SD below the 5-year average. Its peers like Muyuan Foodstuff (002714 CH) and Wens Foodstuff Group (300498 CH) are also interesting. 

• Globalfoundries Inc. is an American semiconductor foundry spun out of Advanced Micro Devices in 2009.
• The company operates four fabs in the US, Germany, and Singapore, making it the only scaled pure-play outside of China and Taiwan.
• In 2018, Globalfoundries shifted its focus to producing lagging-edge, feature-rich semiconductors after halting investment in leading-edge chip development.

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• In the first quarter of 2024, 3M reported significant achievements and detailed the financial impacts of strategic decisions, including the successful spin-off of its Health Care business, now known as Solventum.
• The separation into two distinct entities is designed to enhance focused growth and improve capital allocation tailored to different market dynamics, thereby representing a strategic realignment to boost shareholder value.
• This quarter also saw the company addressing its legal challenges with settlements in the Public Water Suppliers and Combat Arms litigation, resulting in predictable future cash flows related to these issues.

• Pathward Financial, Inc. is a BaaS company that partners with prepaid card issuers to provide prepaid card services to consumers and businesses
• Prepaid cards are used for various purposes such as fintech apps, payroll, gift cards, or rebates, with Pathward acting as the banking sponsor for these programs
• Pathward earns revenue through collecting deposits, investing in higher-yielding assets, and earning revenue from payments such as interchange fees, with impressive financial metrics including an adjusted NIM of 4.5% and ROTE of 30%

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• Coherent Corp. reported a solid third-quarter performance for Fiscal Year 2024, signaling strong underlying business dynamics despite some operational hitches.
• The company emphasized a noteworthy sequential revenue increase of almost 7% and an almost 50% rise in non-GAAP EPS which marked significant growth.
• Operating cash flow stood robust at $117 million, with a substantial portion directed towards capital investments and debt repayment.

• Kuok Khoon Hong and George Yeo boost Wilmar stakes Institutions were net sellers of Singapore stocks in the five trading sessions up to Jun 13, with S$3.6 million of net institutional outflow, as 23 primary-listed companies conducted buybacks with a total consideration of S$88.8 million.
• Stamford Land Corp executive chairman Ow Chio Kiat increased his total interest from 45.86 to 45.88 per cent, acquiring 246,800 shares at S$0.40 a share between Jun 6 and 11.

• Archean Chemical Industries (ACI IN) is largest producer of Bromine and largest exporter of Bromine from India.
• The company is doing brownfield and greenfield capex in Bromine derivatives which are Margin accretive.
• Archean Chemical Industries (ACI IN)  is confident about 30% volume growth in FY25.

• Short term borrowing rose 2.3x in the past four quarters, alongside rising interest rates
• During this time, long term borrowings were actually down, so no locking in of low rates
• As such, Chiba is not fully, or hardly benefiting from BOJ policy changes, with NIM down

• Prodia (PRDA IJ) suffered from a seasonal downturn in 1Q2024 as Lebaran slowed its testing volumes from corporates, with opex related to Prodia Digital impacting margins in the quarter.
• The company’s testing mix is shifting in a meaningful way towards esoteric testing, which commands significantly higher margins plus it is building out its genomic testing, which yields higher returns.
• Investment in Prodia Digital should slow in the coming quarters, helping to improve margins. with new outlets driving revenues. Valuations are unjustifiably low with 2Q2024 numbers likely to be positive.

• It has come to my attention that Lufax management has recently altered the terms of their convertible debt: Based on the terms and conditions of the Ping An Convertible Promissory Notes, as a result of the Special Dividend, the Conversion Price will be adjusted from US$12.
• Based on the terms and conditions of the Ping An Convertible Promissory Notes, as a result of the Special Dividend, the Conversion Price will be adjusted from US$12.76 per Share as at the date of this circular to US$2.32 per Share upon settlement of the Special Dividend, and thus, upon full conversion, the Ping An Convertible Promissory Notes can be converted into a maximum number of 421,077,586 Shares (the “Conversion Shares”).
• The Company considers that the adjustment formula is in line with market practice for anti-dilution provisions in convertible securities.

• 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), The Keepers Holdings (KEEPR PM), Taste Gourmet (8371 HK), Uchi Technologies (UCHI MK), and Ginebra San Miguel (GSMI PM).
• While HK stocks have weak data, we persist in being long these names, keeping in mind their long-term outlook and deep value. 

• TSMC’s 3nm Shortage: Capacity Filled Until 2026 Amid Surging Demand; Strategic Price Hikes Coming Soon
• Top Gainers/Losers: Taiwan Tech Rallies Alongside TSMC, Apple, Nvidia, ARM Strength
• Samsung Unveils Pathway to Catch Up With TSMC in the AI Foundry Race

• Miroku Jyoho Service (TSE:9928) , which offers on-premises, hybrid (IaaS) and cloud accounting software to Japanese enterprises of various sizes.
• Our purchase is centred around the business achieving further transition to the cloud, allowing for substantial margin improvement through the accumulation of high gross margin SaaS revenue.
• This transition has impacted firm profitability in the short term due to the shift in revenue recognition as quoted below by the company

• H3C and Foxconn partner in Malaysia for data center investment; Tsinghua Unigroup continues acquisitions in the tech industry.
• Chinese automakers urged to invest in cleaner technologies, form strategic partnerships, and comply with EU regulations under new EV tariffs.
• Microsoft & Qualcomm exceed pre-orders with AI-powered Copilot+ PC; Hyundai plans to list Indian arm; SEMICON India to showcase advancements in semiconductor industry.

• Avant was founded in 1997 by the current CEO Tetsuji Morikawa and is a Japanese holding company of financial and non-financial software which have the collective goal of assisting its clientele to increase corporate value.
• This includes ‘Diva’ as Japan’s foremost (43% market share) consolidated accounting software and board meetings platform in addition to ‘Avant’, a management system for corporate value enhancement through consolidation of information (Avant Cruise) , charting (Avant Chart) , and corporate value enhancement (Avant Compass).
• Lastly, there is ‘Zeal’ which includes several non-financial platforms that help organise and integrate (with Avant Cruise) from external sources. And interestingly, Avant also owns and operates Internet Disclosure Co, which runs Kaijinet, a site I have frequently visited over the years.

• This is the first blog post on the Hurdle Rate website, a series of blog posts which I intend to cover specific topics rather than unit trust investments.
• From time to time I may consider company deep dives, but predominately I want to make these posts more specific in nature around the global landscape in professional and financial services.
• Today’s post is going to talk about the recent bombshell that is Xero’s price hikes, a controversial topic here in Australia for the accounting industry, and a perfect start to the blogroll given my background and focus.

• The yearly growth target could approach 25% YoY in 2024.
• TSMC’s CoWoS demand continues to rise, with capacity expected to increase by approximately another 5% in 2024.
• TSMC’s stock price has risen by 55% in Taiwan and by 66.3% in US markets this year. We believe it has the potential to continue increasing further.

• Due to increasing competition/price reduction/overcapacity issue, outlook of domestic vaccine companies isn’t optimistic, which has been reflected in 24Q1 results. However, there’s also a “special one” that deserves investors’ attention.
• The status of medical insurance funds is improving rather than deteriorating, but we’re currently in the first half of the decade with the highest pressure on medical insurance.
• As the H.R.8333 proposal faced obstacles in the process of being included in NDAA, WuXi AppTec/WuXi Bio’s shares once rebounded.We remain conservative as situation is not as simple as imagined.

• Mediatek Inc (2454 TT)’s 3Q24 is expected to experience a quarter-on-quarter increase of about 5%.  
• MediaTek is currently developing new processors based on Arm architecture and natively supporting the Microsoft Windows operating system.
• It is believed that MediaTek will tape out with TSMC 3nm technology, targeting the 1H25 market.

• 4Paradigm, China’s AI software company with focus on enterprise-level solutions, performed well and achieved solid growth in 2023 and Q1 2024. 
• In my insight, I discuss valuation framework for comparable company analysis and set a new 12-month PT for 4Paradigm.
• The company’s management has set a clear goal of profitability. I like 4Paradigm’s leadership position and hyper-growth in revenue from the Sage AI Platform.

• European Commission will impose provisional tariffs on imported Chinese battery electric vehicles.
• Zeekr’s deliveries increased by 117% YoY in 1Q24 and by 112% YoY in the first five months of 2024.
• Ant Group will pay RMB1 billion to sponsor content creators on AliPay.

• China Railway Signal & Communication (3969 HK)‘s latest order backlog is estimated to be Rmb173.7bn, enough to cover FY24F revenue by 4.4x.
• Gross margin has sustained expansion, reaching a record high of 27.8% in 1Q24. Higher R&D expenses will benefit its medium-term earnings.
• Net cash equals 59% of the share price, allowing it to maintain over 50% payout and potentially higher going forward. Operating cash flow has also turned around to positive.

• NVIDIA deploys a three-pronged strategy to support the rapidly growing AI ecosystem. First, Corporate Investments. Second, NVentures. Third, NVIDIA Inception.
• NVentures supports innovators who are deeply relevant to NVIDIA. NVentures aims to produce solid financial returns while growing the ecosystem.
• NVIDIA participated in 35 deals in 2023 (6x more than in 2022). It has been more active than firm like Andreessen Horowitz and Sequoia.

• Sun Corporation is trading at 40% of its net asset value and has valuable SaaS business with Cellebrite
• Activist investor involvement may unlock trapped value in the company
• Cellebrite is a top digital forensics platform serving law enforcement agencies, making Sun Corp a promising investment choice in the Japanese market

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• Ascentage was originally in an extremely difficult situation, but the cooperation with Takeda turned things around. Ascentage has obtained urgently needed cash flow to solve the survival problem.
• At this stage, it’s possible for Ascentage to hit about 50% market value of HCM.  Investors are interested to know if APG-2575 would also be out-licensed, which however is not easy.
• Ascentage’s current strength isn’t sufficient to self-build sales system. While this deal is a good start, if Ascentage still chooses to do commercialization on its own, it’s time to sell. 

• We conducted a Q&A with Kinik, who is a key supplier to companies including TSMC, UMC, and Micron.
• Kinik is dramatically expanding its diamond disk capacity; these products are critical to the production of wafers for advanced semiconductor nodes.
• We believe Kinik has high visibility into future industry demand. Gross margins are likely to expand in the coming years as advanced diamond products become increasingly important to wafer production.

• Medipal Holdings (7459 JP) reported FY24 result, with revenue and net profit beating and operating profit missing guidance. FY24 revenue increased 6% YoY, driven by growth across all business segments.
• The company is anticipating an upturn in revenue and operating profit in FY25. However, FY25 net profit is expected to fall due to the absence of extraordinary income.
• The company has announced a share buy-back plan to purchase up to 2.5M shares for ¥5B from May 15, 2024 to August 30, 2024.  

• A combination of strong demand growth, portfolio diversification, and strategic expansion has helped NextEra Energy post solid financial results for the first quarter of 2024.
• The company reported an 8.3% year-over-year increase in adjusted earnings per share, driven largely by the performance of its Florida Power & Light Company (FPL) and Energy Resources segments.
• FPL’s earnings per share increased $0.04 year-over-year, the primary driver being a growth of approximately 11.5% in the company’s regulatory capital year-over-year.

• At Bausch + Lomb, the results for the first quarter of 2024 denote a significant advancement, manifesting a 20% constant currency revenue growth, accelerated by the robust performance across its various business units and geographical regions.
• This demonstrates a diversified growth model that is not heavily reliant on a single product line or market.
• The company’s strategic initiatives to invigorate its operational efficiency, innovation, and product launches are turning fruitful, enhancing its financial and market position.

• Reviewing the fiscal results and the quarter’s activities of Brown-Forman Corporation presents a detailed picture of the company’s financial health and strategic directions, both of which are vital for current and potential investors.
• Fiscal year 2024 proved challenging due to highly dynamic market conditions influenced by persistent macroeconomic factors such as inflation and high interest rates impacting consumer and distributor behavior.
• Nevertheless, the company sought to capitalize on evolving trends towards premiumization and launched new products that align with consumer tastes and preferences, like Jack Daniel’s Tennessee Apple and super premium whiskey varieties.

• Campbell Soup Company has reported a robust set of results for its fiscal third quarter of 2024, indicating both strengths and challenges within its operations.
• This mixed performance is worth examining for investors considering the merits and risks of investing in the company.
• A key positive highlight from the quarter is the integration and contribution of Sovos Brands, which the company acquired on March 12.

• Dollar Tree’s financial results for the first quarter of fiscal 2024 reflected a mixed performance amid operational challenges and strategic undertakings.
• In terms of expansion, Dollar Tree highlighted their proactive steps toward aggressive growth, including acquisition opportunities such as purchasing stores from the $0.99 only bankruptcy.
• Furthermore, the consolidation of its Family Dollar stores indicated a strategic reshaping, aiming at focusing resources on more profitable ventures while delving into a formal review of strategic alternatives for the Family Dollar business.

• Donaldson Company’s third quarter fiscal 2024 results illuminate a company adeptly navigating its competitive landscape and growth avenues, albeit with nuances across different segments and geographies that invite a more tempered enthusiasm.
• The reported 6% increase in total sales to a record $928 million and a 22% increase in EPS to a record $0.92, alongside an operating margin at a more than decade-high, succinctly encapsulate the firm’s short-term operational success.
• In Mobile Solutions, notable volume growth driven by the aftermarket business has surpassed pricing gains, which points to robust market performance and potentially sustainable revenue streams from recurrent business.

• Five Below reported mixed financial outcomes in the first quarter of 2024, encountering challenges reflected in a total sales growth of 12% paired with a comparable sales decrease of 2.3%.
• Adjusted earnings per share stood at $0.60, aligning with the lower spectrum of the company’s expectations.
• This performance highlights particular strengths and vulnerabilities in Five Below’s operational and strategic positioning within the retail sector.

• Guidewire recently disclosed its results for the third quarter of fiscal year 2024, which exhibited a strong operational performance and positive strategic developments.
• The company, which provides insurance software, expressed confidence in its cloud-based offerings and reported significant progress in both customer traction and financial metrics.
• During this quarter, Guidewire saw substantial customer adoption, evidenced by the closure of eight InsuranceSuite Cloud deals, bringing the year-to-date tally to 24—an increase of 33% year-over-year.

• Littelfuse, a global leader in circuit protection, reported its first quarter 2024 results which reflect a balanced narrative of progressing through challenges while capitalizing on long-term growth opportunities.
• The company continues to execute its strategies amid an evolving macroeconomic context, emphasizing diversification and operational efficiency which has been pivotal in navigating high inflation and uncertain market conditions.
• Littelfuse reported a drop in revenue by 12% year-over-year, attributing much of this decline to ongoing inventory adjustments across its channels and weaker end-market demands particularly noted in the Electronics and Industrial segments.

• We expect strong 30-35% YoY earnings growth in Plover Bay Technologies (1523 HK) for its earnings to be released in July for H1 FY24. 
• We expect the company to continue its 80% dividend payout ratio, which will result in a 4% semi-annual yield (8% annualized). 
• Trading at 12.2x with >50% ROEs and net cash of >30 mn USD, we expect the strong results to catalyze a further multiple rerate.

• Today, according to public news, Kirin Holdings will launch a tender offer for Fancl Corp (4921 JP) at a likely 30% premium. 
• The beauty industry is historically ripe with M&A deals.  It is not hard to see why, as the global beauty sector trades at a hefty valuation multiple. 
• In this insight, we brainstorm for potential buyers of Shiseido Company (4911 JP) and analyze the viability of such. 

• Dickson Concepts Intl (113 HK) reported earnings growth of 39% YoY, led mostly by an increase in interest income on the 9.6 HKD/share of net cash/investments on the balance sheet. 
• The company’s net current asset value (NCAV) expanded to 8.2 HKD/share (Vs. FY23: 7.6 HKD/share), and with the stock at 5.2 HKD/share, it trades at a 37% discount to NCAV. 
• The dividend was increased to 45 cents ( from FY23:35 cents/share), placing the stock at an attractive dividend yield of 8.6%.

• Nokia and Foxconn are collaborating to manufacture 5G products in northern Vietnam, potentially boosting the country’s tech industry.
• Huawei’s entry into the automotive tier-1 market raises questions about its impact on traditional car manufacturers.
• The UK semiconductor industry and Taiwan Semiconductor Manufacturing Company (TSMC) are highlighted at London Tech Week, showcasing their importance in the tech world.

• Intel’s 2023 10K includes two new risk sections relating to its foundry plans and Smart Capital approach to funding them. 
• It labels its foundry plan as “Highly Risky” and rates its chances of success as “highly uncertain”
• They also helpfully warn that they have “limited experience” with the third party foundry business, just FYI

• Forensic Forsight will be a bi-monthly report covering Indian companies having corporate governance issues guiding investors on strengthening their ESG investment framework
• The issue covers SEBI warning against ICICI Bank for manipulation in delisting process of its key subsidiary.
• The report also covers how a EV company disguises shareholders while an Indian renewable energy company is under scrutiny owing to Independent Director Resignation

• Revenue increased by 9.2% YoY to JPY5.8bn, driven by economic recovery and increased inbound demand.
• Operating profit decreased by 52.5% YoY to JPY567mn due to higher advertising and promotional expenses.
• Financial business revenue rose 14.9% YoY to JPY2.5bn, with a 29.4% YoY decrease in operating profit to JPY371mn.

Oryzon Genomics has reported positive interim data from the Phase Ib FRIDA study, evaluating iadademstat in combination with gilteritinib in advanced acute myeloid leukaemia (AML) patients. Results from the first two cohorts (13 patients) showed a favourable safety profile and efficacy signals, with 69% of patients reporting bone marrow (BM) blast cell clearance in the first cycle. Moreover, 38% of patients achieved complete remission with full or partial hematologic or blood count recovery. While we caution against direct read across between clinical trials, this compares favourably to the 26.3% rate (excluding remissions after bone marrow transplantation during the trial) delivered by gilteritinib in the Phase III ADMIRAL study, potentially supporting the synergy of the combination. Oryzon noted that the first two cohorts achieved full target engagement and indicated the scope for dose reduction (to aid faster platelet recovery) under the FDA’s OPTIMUS guidance. A third cohort is being recruited following this guidance.

• Revenue for 1H FY10/24 was JPY85.9bn, up 35.5% YoY, with a business profit of JPY2.2bn, up 146.1% YoY.
• RENOSY Marketplace business revenue was JPY83.6bn, up 35.3% YoY, and ITANDI business revenue was JPY2.1bn, up 34.1% YoY.
• FY10/24 company forecast revised to JPY185.0bn in revenue and JPY3.7bn in business profit, with EPS unchanged at JPY45.90.

• UnitedHealth Group has reported its first quarter financial results for 2024, which reflect the resilience and adaptive capacity of the organization amidst significant challenges, most notably the Change Healthcare cyberattack.
• In addressing the cyberattack, UnitedHealth Group has showcased robust crisis management capabilities, responding swiftly to ensure continuity in care provision and financial support for affected healthcare providers.
• The financial impact of the cyberattack has been substantial, with approximately $870 million in total impact to the quarter and an anticipated full-year impact in the range of $1.15 to $1.35 per share.

• TSMC: +21.3% Premium; Trading at New +15-25% Range This Year
• ASE: +12.7% Premium; We Continue to View 14%+ as Fresh Short Level
• CHT: +1.2% Premium; Good Level to Short Relative to History

• Crucial Vote: Shareholders are voting on Musk’s $56 billion compensation deal and Tesla’s reincorporation in Texas, pivotal decisions for the company’s direction.
• High Stakes: The outcome will determine Musk’s commitment to Tesla, potentially shifting his focus to other ventures and impacting Tesla’s operations.
• Institutional Opposition: Significant resistance from institutional investors and logistical issues for global shareholders create uncertainty. Abstaining from voting counts as a vote against, hindering Elon-supporting retail investors.

• Chow Tai Fook Jewellery (1929 HK) reported a weaker-than-expected FY24 net profit. Despite having HK$2.2bn net cash, the lack of a special dividend is even more disappointing. 
• Surge in unrealised loss on gold loans and a YoY contraction in margin have contributed to the poor 2H24 result. Apr-May operating figures showed a deteriorated operating environment.
• Lacking a special dividend, CTF no longer looks attractive at the current level. Overoptimistic FY25 and FY26 consensus forecasts mean earnings downgrade pressure. 

• Aegis Logistics (AGIS IN) is significantly expanding its LPG and liquid logistics infrastructure across India with rising demand.
• Currently, Aegis has a 15.5% market share in LPG imports in India which they plan to take to 25% in the next few years.
• Surpassed INR 1,000 crores in normalized EBITDA for FY ’24, planned capex of 4500 Crores by FY27.

• AEM (AEM SP) announced a new CEO as of 30th of May 2024. The new CEO officially starts 1st of July 2024.
• Amy Leong will take over from Chandran Nair as she leaves her Chief Commercial Officer role at Formfactor Inc (FORM US). 
• Given the weak business results and inventory management issues it should be expected that Mrs Leong would want to clean the proverbial house before she starts in her new role.

• Travel and box office data in the past three-day Dragonboat Holiday showed worrying weakness despite sharp price cuts by hotel and airlines. 
• Removing travellers from Hong Kong, inbound travel was also quite bad; 
• E-Commerce sales backed by trade-in stimulus outperformed regular merchandises, indicating consumer confidence is still low. We believe the weak travel data boded ill for consumption throughout the year.

• Luckin launched lemonade drinks with raging success of 5.08 mn cups sold for the first week, ~10% of store sales. Market cheered to send the stock higher;  
• We view it with mixed feelings. While it is margin accretive and sales enhancing,  is not conducive to improving coffee penetration and cultivating consumers’ habit for drinking coffee;
• We see Luckin as increasingly one of, instead of the, street drink company, because lemonade is actually the top selling SKU of all milk tea vendors in China. 

• Given the high number of pipeline dropouts, and the potentially disappointing $6 bn psoriasis drug acquisition, we question Takeda’s recent investment track record.
• A big restructuring, high expectations from new/recently launched drug portfolio, and punchy company guidance reduces the probability of upside surprises.
• Unless you are limited from investing outside Japan and you want exposure to an innovative pharma company, we believe that there are better and cheaper options elsewhere.

• India is limiting Chinese participation in Indian subsidiaries while seeking investments from Taiwan, diversifying its economic ties.
• AWS is committing significant funds to establish data centers in Taiwan, anticipating obstacles in securing renewable energy sources.
• Elephantech is seeking collaborators to scale up their eco-friendly PCB manufacturing operations to meet the escalating demand. Join the sustainable production movement.

• Its unclear whether Yemen-based Houthis would end attacks after ceasefire
• We’ve entered peak Summer shipping season from Asia to US, Europe
• Higher spot rates have already lifted contract rates in Q2 2024

• Reliance Industries (RIL IN) is developing a new integrated industrial area in Navi Mumbai, part of a global economic hub.
• This project, supported by a 43-year land lease and strategic partnerships, aims to attract global companies, fostering innovation and economic growth in the Fourth Industrial Revolution.
• Reliance’s initiative will significantly boost Navi Mumbai’s attractiveness as an investment destination, driving regional economic growth and employment opportunities.

• Transsion is the global No. 4 largest smartphone producer according to IDC.
• In 1Q24, shipments increased by 34% YoY and revenue increased by 88% YoY.
• We see the stock’s upside at 17% and the price target at RMB100.00.

• Increased demand from power plants under construction outside  G-7 countries
• There is constrained supply as with many other fossil fuels
• We look at a basket of coal stocks with good balance sheets and increasing production

• Sony plans to achieve profitability in car camera business by 2026, aiming for 6x growth in the sector.
• Samsung cancels anniversary events to focus on new management plan in response to crisis within the company.
• Taiwan’s passive component makers like Yageo and Ample flourish in AI boom, indicating growth potential in semiconductor industry.

• The worst is behind Beijing Capital International Airport. We believe it is on track to achieve breakeven on quarterly basis in 2H24.
• We see recent parking fee hikes at Daxing Airport as a signal that more will come, which is not in the price and can bring in extra option value.
• Boom-And-Bust in China property sector is behind the airport’s share price cycle. The airport is at the cusp of a steady recovery driving mean reversion of valuation .

• i-mobile reported cumulative Q3 FY07/24 revenue of JPY16.3bn (+14.3% YoY), operating profit of JPY3.7bn (+9.2% YoY).
• Consumer Service business cumulative Q3 revenue was JPY14.2bn (+19.4% YoY), with segment profit of JPY3.5bn (+18.9% YoY).
• Online Advertising business cumulative Q3 revenue was JPY2.1bn (-11.8% YoY), with segment profit of JPY316mn (-39.3% YoY).

• Bally’s Corporation is undervalued despite insiders recognizing its potential
• Standard General made a buyout offer of $15/share, prompting Bally’s to form a special committee
• The author predicts that Standard General will increase their bid to take Bally’s private, highlighting it as a compelling investment opportunity.

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• Around RMB5 billion generic drugs would be included in VBP in 2024/2025 (e.g. sevoflurane/Ioversol/butorphanol tartrate). So, the assumption that all the negative effects of VBP have cleared up isn’t correct.
• Hengrui’s innovative drugs would lose growth momentum after they reach peak sales. It’s difficult for Hengrui to maintain its scale expansion or achieve the over 20% YoY revenue growth.
• Hengrui’s PE would fall below 30 (or even below 20) in the future, which means its valuation would start to enter a downward trend. Current high valuation cannot be justified.

• In cumulative Q3 FY07/24, the company reported sales of JPY30.2bn (-30.0% YoY) and business profit of JPY1.3bn (-80.8% YoY).
• Sales from recurring revenue businesses declined 2.8% YoY to JPY18.3bn, with segment profit falling 7.3% YoY to JPY1.9bn.
• The company revised its FY07/24 year-end dividend forecast to JPY50.00 per share, including a special dividend of JPY24.00.

• Cal-Maine Foods (CALM) is a promising long-term investment with potential for around 50% upside
• Stock is currently undervalued due to low historical book multiples and high short interest
• Company has a cost advantage over peers and strong earnings potential, especially in the event of an avian flu outbreak

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.