Equity Bottom-Up

• Following AMD AI conference on 10 Oct, many question AMD’s estimate of the AI Accelerators market reaching US$500bn by 2028 (from $45bn in 2023).  
• AI Accelerators market value is increasing by 150% in 2024, reaching US$113bn. Based on TSMC CoWoS capacity, we  think reasonable to expect 115% growth over 2025-26 or US$276bn in 2026.
• TSMC makes all the chips. HBM is dominated by Hynix. Nvidia should remain the dominant vendor for years. AMD and Broadcom should grow faster than NVDA. Outsourcing: Alchip, Marvel, Mediatek. 

• Welspun Corp (WLCO IN) expanded from just SAW pipe company to DI Pipe, TMT Bars, Building solutions and PVC Pipes as well. 
• Company is known for reviving bankrupt companies, On the path to revive Sintex and ABG Shipyard.
• high growth from US, Saudi and India driving the growth with capex 

• Below is a sample of the unloved Japanese stocks we focus on at Azabu Research, with key valuation metrics and latest news.
• The average PBR in this week’s list is 0.5x and the average P/E is 5.9x.
• Most of the stocks in this week’s round up are related to either the auto supply chain or the electric power grid.

• Tencent repurchased 250 million shares and the market has not paid any attention to its significant margin improvements.
• Lalatech updated its IPO file for 1H24, in which both GTV  and revenue were up by 18% YoY.
• Seres expects its revenue will grow by 518% YoY to 559% YoY for 3Q24.

• Anta top line outperformed competitors, both overseas and domestic brands, in China.
• We believe all margins will be stable and EPS will rise by 41% in 2024.
• However, we believe Anta is overvalued at the current price.

• Recent significant clinker price hikes in Yangtze river region boost our confidence that 4Q will likely see the company’s earnings double Y/Y, ending 14 consecutive quarters of decline since 2Q21.
• Beijing’s bazooka stimulus package to lift the property market and revive economy also improve industry outlook in 2025.
• Consensus has been slow to adjust for the changes in industry dynamics. Our 2024 earnings is now 15% above consensus. We expect upward earnings revision will support P/B expansion.

• CIMC Enric Holdings (3899 HK) has underperformed benchmark Indices YTD, and its business segments are undervalued based on their earnings performance. 
• The clean energy segment is only valued at HK$3.4bn, or 24% of the stock’s total. However, it is the largest earnings generator in 1H24, contributing 60% of 1H24 profit.
• CLPT’s earnings contribution is 22% more than CIMC Safeway’s, but it is only valued at 27% of the latter, equivalent to an undemanding 9.8x annualised PER.

• Arm Holdings plc recently reported its financial results for the first quarter of fiscal year 2025, showcasing a surge in revenue and solidifying its status as a key player in chip design, particularly with its focus on AI and CPU technology.
• The company’s revenue hit $939 million, up 39% year-over-year, a testament to both burgeoning license and royalty streams.
• Licensing revenue, often an indicator of future royalties, climbed by an impressive 72% due to increased demand for Arm’s technology across a multitude of applications including AI, data centers, and mobile devices.

• In a major development that’s turning heads on Wall Street, Super Micro Computer (SMCI) announced it is now shipping over 100,000 GPUs per quarter, specifically targeting the surging artificial intelligence (AI) market.
• This is a significant leap for the company as it seeks to capitalize on the growing demand for high-performance computing power required by AI training models and data-heavy applications.
• With AI dominating conversations across industries, GPUs have become critical components in data centers, and Super Micro’s ability to ship these units at scale, coupled with its competitive pricing, could potentially generate billions in revenue.

• Tri Pointe Homes delivered a robust performance in the second quarter of 2024, showcasing an adept response to current market conditions and strategic planning.
• The company reported a substantial increase in home deliveries, up by 45%, leading to significant revenue growth.
• Home sales revenue rose to $1.1 billion, marking a 38% upsurge from the previous year, primarily driven by increased community counts and optimized cycle times.

• By many metrics, Chinese airlines’ recent performance exceeds pre-Covid levels
• Medium-Term, ongoing int’l recovery and benign fuel prices can boost margins
• We believe the airlines could recoup weak relative performance vs Trip.com

IP Group’s realisation activity has picked up notably in the months leading up to the company’s interim results publication in September, encouraging the company to increase the current buyback programme by £10m to £30m. Subsequently, IP Group agreed to sell the AI-powered financial crime detection business Featurespace to Visa. The exit will result in £134m in realisation proceeds at a 70% uplift to end-2023 carrying value, part of which was recognised in the H124 results, translating in a broadly stable value of IP Group’s private holdings. The de-rating of listed Oxford Nanopore (ONT) was therefore the major driver behind IP Group’s 9% NAV fall in total return (TR) terms in H124 to 104.7p, though nearly half of the ONT share price fall was reversed post end-June 2024, assisted by its half-year trading update and the Novo Holdings investment.

• HK-Listed Apparel & Footwear Screener: Right Stocks Listed in the Wrong Market—Attractive Yield & Rapid Expansion Outside China—Sep 2024 helped us screen out great names.
• Nameson Holdings (1982 HK), a knitwear supplier that trades at 4.5x PE, is net cash (considering investments) and has a 17% dividend yield, is one of them. 
• We find this name attractive, and the yield can be sustainable as it shifts its supply base from China to Vietnam. Hence, we initiate with a detailed write-up. 

• Microsoft is projected to report an EPS of $3.10 for Q1 FY2025, reflecting a year-over-year increase, highlighting consistent growth amid evolving market dynamics.
• With a quarterly dividend increase of 10% and a $60 billion share repurchase program approved, Microsoft aims to enhance shareholder value while navigating competitive pressures.
• Amid concerns of slowing AI adoption, analysts are divided on Microsoft’s outlook, balancing high expectations against rising expenses, especially with its significant investments in AI and cloud infrastructure.

Ocean Wilsons Holdings’ (OCN’s) H124 results showed good growth, reflecting a strong performance from Wilson Sons and a positive performance from the investment portfolio (OWIL). While the strategic review remains ongoing, in August the company announced that it is in discussions with I Squared that may or may not lead to an offer for its holding in Wilson Sons (BOVESPA: PORT3). Despite the review and the potential for value realisation, OCN still trades at a c 40% discount to our valuation of 2,275p/share.

Basilea Pharmaceutica has reported another US$1.25m milestone payment from its partner Pfizer in Asia-Pacific and China, triggered by Cresemba sales in this region crossing a pre-defined threshold. This is the fourth milestone payment for Cresemba from the region this year, adding to the already strong H2 results (c CHF33m/US$38.5m milestone payments recorded in H224 so far; CHF35m in 2024 to date). The Asia-Pacific region, particularly China (which accounts for c 20% of the market potential for Cresemba), is of key importance to Basilea, as its lead product approaches maturity in the US and European markets (exclusivity until late 2027). Note that Cresemba has recorded in-market sales of US$505m for the 12 months ending 30 June 2024, robust 20% y-o-y growth.

• Shionogi & Co (4507 JP) has reiterated FY25 guidance, indicating sequentially better financial performance in Q2FY25 as well as H2FY25. Overseas business and royalty income are on strong footing.
• Shionogi has acquired the exclusive distribution rights for Quviviq in Japan. With better efficacy and safety profile, and sizable patient population, Quviviq should be a significant revenue contributor.
• Shionogi submitted NDA in Japan for zuranolone, a treatment in development for major depressive disorder (MDD). Approval is expected in H1FY26.

• RaaS has published an update report on diversified financials company Bell Financial Group (ASX:BFG) on the back of supportive September 2024 metrics including ECM league tables, ASX volumes and equity markets performance.
• BFG is sitting fourth on the LSEG ECM league tables for the nine months to September 2024, raising $1.2b and on-track with RaaS forecasts (positive for Retail and Institutional).
• The ASX200 closed 6.3% higher at the end of September 2024 relative to June 2024, above implied RaaS assumptions for the full-year and positive for the Portfolio Administration Services (PAS) business and overall investor confidence.ASX transaction volumes continue to recover from a weak CY23, up 32% for the September quarter and positive for the Retail and Technology & Platforms divisions.

• Azul and GOL running with liability positions over double LATAM – convergence required to ensure financial sustainability.
• Azul’s USD-denominated liabilities continue to weigh heavily, suggesting profitability and full balance sheet clean up distant prospects despite lessor re-negotiations.
• GOL’s Chapter 11 process needs to focus on balance sheet recalibration – BRL weakness may require recalibration.

• United Microelectron Sp Adr (UMC US)’s outlook for 4Q24 is expected to show a decrease of around -5% QoQ, with a minimum gross margin of 30%.
• Qualcomm Inc (QCOM US) moving out of Semiconductor Manufacturing International Corp (SMIC) (981 HK) and has opened up opportunities for UMC.  
• UMC is considering selling its 8″ Fab, known as 8S, due to its consistently poor performance.  

• Shriram Pistons & Rings Ltd (SPRL IN) is into the business of manufacturing auto components including pistons, piston pins and rings, engine valves, electric motors etc. 
• On an overall scheme of things, balance sheet and forensics look good and healthy. 
• However, one must pay attention to goodwill and related assumptions; one of the recent acquisitions has turned loss making.

• In FY08/24, the company reported sales of JPY110.6bn (+25.7% YoY) and operating profit of JPY10.5bn (-8.9% YoY).
• Software Testing Related Services segment sales reached JPY71.3bn (+22.4% YoY), with operating profit of JPY16.2bn (+11.4% YoY).
• For FY08/25, the company forecasts sales of JPY130.0bn (+17.5% YoY) and operating profit of JPY13.5bn (+28.1% YoY).

• Samsung’s foundry business is losing more customers to TSMC, who is perceived as lower risk.
• TSMC, UMC Monthly Sales: TSMC up strong but plateauing, UMC lackluster, confirming 2 big trends.
• Memory Monitor: Nanya results miss; highlights weakness in non-AI demand.

• We analyse ten Japanese midcap banks to target beneficiaries of the realization of strategic shareholdings, as well as beneficiaries of the improving interest rate outlook
• We add Hachijuni Bank and Hokuhoku Financial to the buy list, based on the potential for realization of strategic holdings; these share-holdings are large relative to their respective market capitalizations
• We maintain Gunma Bank on the buy list, primarily for its very strong gearing into the rising interest cycle and its attractive PE multiples

• Is Intel giving up on AI Accelerator (Gaudi)? Cutting orders first, refocusing on x86. 
• TSMC CoWoS capacity, sharp wafer price increase, agreement with Amkor.
• DRAM price outlook is not that bad, after a 2H24 slowdown. Samsung 2nm and 1.4nm, planning ahead despite poor yield rates.

• In my latest portfolio update, I discussed the potential of investing in cyclical businesses and how shifts in a company’s business model or balance sheet can often go unnoticed by the market, creating compelling investment opportunities.
• Today, I present Mattr Corp, a company that not only revamped its business model and balance sheet without receiving due recognition but also strategically repositioned itself within new end markets. This transformation aligns perfectly with all three of my key criteria for identifying attractive investments in cyclical stocks.
• Mattr Corp., a Canadian industrial conglomerate, is undergoing a strategic transformation into an advanced engineering company by leveraging its extensive expertise and decades of experience in materials science for industrial applications.

• Elon has given up on his ambitious targets. Or he has never seriously pursued them.

• Tesla’s investor event “We, Robot” was nothing more than a theme park for adults who were there to indulge into an illusion for a night.

• Why would they conduct such a ridiculous event that suggests that they have nothing up their sleeves that can create tens of billions of dollars of AI revenue soon? 

• Hisamitsu Pharmaceutical Co (4530 JP) has reported double-digit revenue growth in H1FY25, mainly driven by 17% YoY growth in OTC pharmaceutical product, Salonpas. Net profit grew 8%.
• Rx business revenues grew 5% as Zicthoru, Apohide etc clocked healthy numbers, while Mohrus product line continues to decline. Since Q1FY24, Zicthoru’s quarterly revenue run-rate has been surpassing ¥1B.
• Hisamitsu has reiterated its FY25 guidance of ¥152B revenue, operating profit of ¥14.5B, and net profit of ¥15.8B. With H1FY25 progress rate, the company is expected to beat the guidance.

• IDC reported 3Q24 PC shipments declining -2% YoY, Canalys an increase of +1%. Let’s call this flat. If 4Q24 is “average seasonal”, 2024 will reach ~265m, or the pre-Covid range. 
• No AI fever, no accelerated replacement cycle, for now. If it happens, it will take time, ie compelling AI apps that only run locally and need a new PC.
• In Asia, PC vendors: Lenovo, Acer, Asus. Taiwan ODM: Compal, Quanta, Wistron. Semi with high exposure: Novatek, Realtek. 

• BellRing Brands recently reported its earnings for the third quarter of the fiscal year 2024.
• The company, which is known for its Premier Protein and Dymatize brands, showcased a mixture of strengths and areas poised for improvement.
• BellRing Brands has demonstrated robust growth, showing a notable increase in net sales and adjusted EBITDA, indicative of effective operational management and solid demand for its products.

• Bright Horizons Family Solutions, a renowned provider of child care, early education, and work-life servcies, recently reported a robust performance for the second quarter of 2024 in their latest earnings call.
• CEO, Stephen Kramer, highlighted substantial revenue growth in full service and back-up care segments and a nearly 40% increase in adjusted EPS, surpassing the company’s expectations due to improved operational efficiency across all three segments.
• In light of these results, the company has raised its full-year guidance for both revenue and EPS.

• AI demand will remain strong but is plateauing in terms of YoY growth. The rest of end-demand remains weak (Consumer, PC, Auto, Industrials). TSMC and UMC monthly sales confirm this. 
• TSMC high growth plateau ~40% YoY: AI (Nvidia Broadcom, AMD), Intel, new smartphone chips. Comps will get harder early 2025. Valuations are high but not extreme: limited upside and downside.
• UMC lackluster at ~6% YoY growth, reflecting lackluster end-markets from smartphone, Consumer Elec, PC, Auto & Industrials. Average valuations; in need of an elusive catalyst.

For our next Corporate Webinar, we are glad to welcome Kina Bank’s executive management to Smartkarma. In the upcoming webinar, they will share a short company presentation after which, they will engage in a fireside chat with Smartkarma Insight Provider, Daniel Tabbush. The Corporate Webinar will include a live Q&A session.

The Corporate Webinar will be hosted on Tuesday, 15 October 2024, 17:00 SGT.

About Kina Bank

Kina Securities Limited (Kina Bank) was established in 1985 and is now Papua New Guinea’s second largest bank and financial services company.  It offers customers end-to-end financial solutions – from savings accounts to business loans, investments to mortgages, financial advice and investment management. It is also the largest wealth management business in PNG, with more than PGK8 billion funds under management. As the country’s largest fund administrator, it administers accounts on behalf of more than 850,000 beneficiaries whose funds total almost PGK14 billion. Kina Bank is also the leading stockbroking company in PNG. 

• For 2nm technology, Taiwan Semiconductor (TSMC) (2330 TT) should start Apple (AAPL US) iPhone 17 production in the middle of 2025, most likely.  
• TSMC’s competitors, Samsung Electronics (005930 KS) and Intel Corp (INTC US) are running foundry business and keeping owning manufacturing business at the same time, which is contradictory to purely foundry business.
• To making the advanced chip in the US, we consider the main main concern still the cost.

• This is a follow-up research note on MoneyHero Group, a company that has firmly positioned itself as a rising star in Southeast Asia’s fintech landscape.
• The company boasts of remarkable results in Q2 2024.
• With revenue surging by 24% year-over-year (YoY) to $20.7 million, driven largely by a massive 68% revenue growth in its Singapore market, MoneyHero is rapidly emerging as a dominant force in the personal finance and digital insurance aggregation space.

• The earnings for Tempur Sealy in the second quarter of 2024 presents a mixed financial outlook, characterized by both positive achievements and challenging market conditions.
• The company reported a notable increase in net sales which approximate $1.2 billion, and adjusted EBITDA stood at $231 million, marking a year-over-year improvement of 6%.
• Adjusted earnings per share also saw growth, rising 9% to $0.63, alongside an improved leverage ratio.

• Gaming Award nominations could spark sales lift into key holiday selling season   
• Highly watched Industry Scores are moving higher for FF7 Rebirth. FF7 Rebirth moving higher up key US gaming charts
• Five CQ4 release titles could drive revenues higher from recent lower reset. Big valuation discount and balance sheet opportunities exist

• Embattled Kiwi building materials giant announced emergency fundraise in September
• Accounting quality has deteriorated significantly in recent years, AI tool shows
• Share price is a quarter of its 2007 peak, company leadership is in flux

• Nanya Tech’s 3Q24 results missed expecations by a wide margin, coming in with a net loss instead of the consensus expectation for a profit.
• Nanya highlighed weakness in non-AI end applications for memory and cut its 2024E Capex guidance by nearly 25%, signaling caution towards the current market cycle.
• While the company’s new DDR5 capacity ramp-up should support stronger margins into 2025E, Nanya has yet to show a signifcant margin upturn in the cycle. 

• Mattel’s second quarter of 2024 presented a mixed set of results, reflecting both the challenges and strategic progress within the toy industry.
• In terms of financial performance, net sales slightly declined by 1% but were stable on a constant currency basis.
• This relatively flat sales trajectory indicates a degree of resilience amidst broader economic fluctuations, with the company managing to maintain its sales levels year-over-year.

• Cavco Industries, Inc.’s first quarter fiscal year 2025 earnings call commenced with the routine formalities.
• Bill Boor, President and CEO, detailed the company’s continued improvement in the factory-built housing sector, underscored by a significant 25% sequential increase in orders and a corresponding 20% hike in shipments.
• These metrics are encouraging indicators of robust market demand and operational execution.

• Mercari is a Japanese e-commerce company known for operating the leading online used goods marketplace in Japan with over 23 million monthly active users and significant annual GMV.
• The company’s strong network effects moat and growth prospects in Japan’s second-hand goods market suggest substantial potential value, despite investor frustration with loss-making initiatives like Mercari US and its Fintech segment.
• Analysts believe that Mercari Japan alone is worth nearly double the company’s current market cap, highlighting potential for significant upside.

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.

• September 2024 revenues of NT$251.87 billion, an increase of 0.4% MoM and an increase of 39.6% YoY.
• Year to date revenue through September 2024 now totals NT$2,025.85 billion, an increase of 31.9% YoY.
• Anticipating Q4 revenue forecast of $25.7 billion, up 10% QoQ. This would mean full year 2024 revenues of $88.8 billion, a 28.3% YoY increase

• Ligand Pharmaceuticals holds a portfolio of revenue, royalty and milestone generating assets that have been vetted by its internal investment team.
• Ligand considers individual biopharmaceutical products, platforms, companies & income streams in its opportunity set.
• It targets late-stage and commercial income-producing assets when making investments.

• Q3 revenue is expected to reach $22.4-23.2 billion, reflecting strong demand for TSMC’s 3nm and AI-driven technologies. This marks a significant 14.4% increase from Q2’s $20.82 billion, despite global headwinds.
• Operating profit margins are forecasted to be between 42.5% and 44.5%, highlighting TSMC’s efforts to maintain profitability. However, pressures from rising operational costs and competitive advancements remain a challenge.
• EPS is projected at $1.76, up 40% YoY, driven by robust AI chip demand. Despite this, TSMC faces slowing consumer electronics demand, particularly in smartphones, which could affect future growth.

• TRS has three operating segments where the smallest has already been going through a sales restructuring period and we are now expecting a slowdown in TRS’s aerospace business.  
• Aerospace had been growing at double-digit rates in recent years, but in recent months the two largest aerospace customers have been going through their own ordeals
• TRS’s current valuation gives little value for what each segment could be worth. There have been two aerospace IPOs with similar businesses to TRS’s aerospace business. 

• Oisix is planning to double its sales by 2030 and looks set to reach this targets early through both organic expansion and M&A.
• The recent acquisition of several B2B and other companies will help sales grow 72% this year alone.
• But the longer-term consumer-facing business continues to look positive thanks to continued demand for convenience meal kits and home delivery of quality foods. Profit though remains anaemic.

• Bukalapak (BUKA IJ) has seen a sharp share price rebound recently with speculation over a tie up with Temu, which appears ill-founded, with the only newsflow being a Director resigning.
• The company swung back into a slight negative adjusted EBITDA in 2Q2024, mainly due to the seasonal impact of Lebaran on its O2O business and increased competition in virtual products.
• Bukalapak remains a differentiated player in Indonesian e-commerce with a focus on serving MSMEs through its marketplace, with increasing take rates ahead. Dealing with excess cash is a potential catalyst. 

• Vishnu Chemicals (VCL IN)  is now backward integrated with the soda ash, CO2 Gas plant and ore requirement to overcome the challenge of raw material price volatility. 
• Company operated in niche & specialty chemical segment and will launch detailed  capex plan in Q2 for forward integration. 
• Management aims to consolidate EBITDA margins around 17.5%-18% by year-end, with a target of achieving consistent margins at 20% over the next 2-3 years.

• Playtika Holding Corp. conducted its Q2 2024 earnings call outlining both advancements and some challenges faced during the quarter.
• With Robert Antokol, Co-Founder and CEO, and Craig Abrahams, CFO, leading the discussion, the company detailed various aspects of its operational and strategic performance which will be crucial for stakeholders evaluating Playtika’s investment potential.
• Baptista Research looks to evaluate the different factors that could influence the company’s price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology.

• Arrow distributes semiconductors, electronic components, and IT hardware/software to value-added resellers globally
• With 600 suppliers and 210,000 customers, Arrow simplifies the supply chain process for both parties
• Focus on cheap electronic components with some high-value semiconductors like GPUs; plays a crucial role in aggregating customer demand

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.

• Arcadia’s share price soared by 47% following news of potential deal with Rio Tinto
• Rio Tinto confirmed talks with Arcadia for a deal worth $4-6 billion, causing speculation and excitement in the market
• Arcadia, with ten operating sites and diverse lithium operations, is a key player in the lithium industry with significant growth potential.

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

• Samsung Electronics (SMSN LI) Q3 preliminary Operating Profit results is 12% below consensus. Company issues rare apology, effectively admitting technology competitiveness falls short.
• SK Hynix (000660 KS) is powering ahead in HBM memory in our view, securing Nvidia 2025 allocations, and industry leading efficiencies.
• A range of factors have created a great opportunity for SK Hynix investment given misunderstood industry dynamics and position at NVIDIA Corp (NVDA US).

• Change in HIL Ltd (HIL IN) started after the appointment of professional CEO Mr. Akshat Seth. 
• HIL is turning around its acquisition of Parador and Topline, which were Loss making. The company was not performing due to lower demand in US, EU etc. 
• Aiming for 14-16% Revenue growth and 2-3% EBITDA Margin improvement due to distribution growth, Parador Turnaround and high demand in real estate segment.

• Taiwan Semiconductor (TSMC) – ADR (TSM US) invests over 3.7 billion in Vanguard Intl Semiconductor (5347 TT) to increase its holdings to 27%.
• Taiwanese authorities, specifically the Investment Commission of the Ministry of Economic Affairs, approved Vanguard’s investment in its first 12-inch factory in Singapore yesterday.
• Regarding the outlook for 4Q24, we believe it is still evolving, and our current estimate is a ~5% quarter-on-quarter decline.

• Re-Introducing our weekly Namaste India 2.0. This iteration builds on our earlier version and is designed for investors keen to track developments in India.
• Nuclear power currently contributes less than 2% of India’s total electricity generation, indicating significant room for growth.
• Going ahead, with earnings taking center stage, the high valuations commanded by iShares MSCI India ETF (INDA US) are likely to get challenged.  

• With results due October 15, we expect net sales growth of 29% YoY, bringing 9-month revenue on track to meet full-year guidance.
• Money Forward’s businesses are Japan-centric, creating a steady revenue stream insulated from yen volatility and uncertain global macro conditions.
• By targeting larger corporations, Money Forward aims to unlock substantial cross-selling potential, supporting long-term growth and market penetration.

• Merdeka Copper Gold (MDKA IJ) provides a well-rounded exposure to gold and copper, where it has significant expansion plans in place for both metals through developing new assets. 
• The company has exposure to the EV battery ecosystem through Merdeka Battery Materials, which has one of the world’s largest nickel deposits at its SCM mine, developed by Rio Tinto.
• Merdeka Battery Materials is developing multiple HPAL processing plants in partnership with leading battery material companies. Valuations for FY2025E and FY2026E look interesting as new projects start to kick in. 

• We are initiating coverage of Sable Offshore (SOC) with a Sell Rating and $6 target.   
• SOC is attempting to restart oil production off the coast of Santa Barbara, California that is unlikely to gain the necessary regulatory approvals to move forward.   
• The offshore oil platforms, previously owned by XOM, have been shut down since 2015. SOC acquired the assets on the expectation it could win approval to restart production. 

• Credit Bureau Asia (CBA SP) subscription-based services and transaction fees generate consistent, recurring revenue from financial institutions and other businesses, ensuring significant financial stability and strong financial metrics.
• Regulatory relationships, vast data repositories, and long-standing client relationships and contracts create significant competitive advantages and protect market share.
• If markets can get comfortable with this microcap delivering 3% long-term growth forecast and sustainability of current operating and financial metrics the stock should see at least100% upside.  

• CSP leading the development of ASIC accelerators for faster processing, enhancing their technological edge in the market.
• Partnership between Foxconn and Nvidia to build world’s largest GB2000 production line, gearing up for increased demand in the semiconductor industry.
• Taiwan emerging as a key player in the offshore wind industry, forging partnerships with foreign companies and investing in energy storage technology to stay competitive.

• Intel is struggling, with a dismal stock performance and job cuts
• The company’s risky and capital-intensive strategy may not be sustainable
• The core business is no longer sufficient to support their strategic goals, leading to financial challenges and market share loss.

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

• The rally of the Asia Tech sector (+24% YTD) is highly concentrated in a handful of stocks. TSMC is up 64% but Samsung is down -22% YTD. 
• With the exception of AI, end-demand isn’t great. Smartphone up 8% but below 2019-21 level. PC flattish. x86 Server flattish. Telecom capex declining. Automotive electronics declining.   
• AI is the most disruptive trend since Cloud in 2010. Years of increasing Capex are in front of us. But short-term, stocks are properly valued to rich, growth is slowing.

• Essilor’s investment underscores Nikon’s undervalued potential, spotlighting its advanced optical technologies as strategic growth drivers in emerging high-tech sectors like AR.
• Nikon’s established expertise in precision optics is highly adaptable for AR applications, positioning the company to capitalize on rising demand for wearable and immersive technology.
• Increased collaboration with EssilorLuxottica may enhance Nikon’s R&D capabilities, promising new innovations and potential revenue streams, which could strengthen Nikon’s profitability and share value long-term.

• The HK market is moving, and the share prices of high-yield companies are increasing. Despite the average YTD returns of 36%, stocks are trading at 5-18% dividend yields. 
• We await the November results of Pacific Textiles (1382 HK), which we will soon initiate coverage on.
• We note that Yue Yuen Industrial Holdings (551 HK) continues with its buybacks, having repurchased 3.2 million shares (0.2% of outstanding shares) since August 28th, 2024. 

• Godawari Power and Ispat (GODPI IN) is fully integrated steel manufacturer with a diverse portfolio encompassing iron ore mining, pellet production, sponge iron, steel billets, ferroalloys, and power generation.
• Net Cash Balance Sheet, Mining Expansion, and upcoming Integrated Steel Plant provide huge potential for the captive consumption.
• Execution of the capex plan within the stipulated timeframe is the key risk.

• Bright Smart Securities is a successful brokerage firm in Hong Kong founded by Mow Lum Yip in 1995 and publicly listed in 2010
• The company has shown steady growth since its IPO, with impressive increases in revenue and net income
• Despite a challenging market environment in Hong Kong, Bright Smart has maintained stable results, grown its client base and assets under management, and pays out all earnings in dividends, with dividends exceeding net earnings over the last 5 years.

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.

• RaaS has published an update report on consumer finance group Cash Converters International (ASX:CCV) following the release of its FY24 results which saw 26% growth in revenue on the pcp and EBITDA growth of 21% in line with our forecasts.
• The gross loan book grew 6% to $288m, which we find impressive as the business transitions away from SACC products due to regulatory change.
• This was more than offset by growth in other products, domestically and internationally.

• Medley (4480 JP) is a safe bet for hiding from the negative impact of strengthening yen. The company should benefit from digital healthcare push from the newly elected Prime Minister.
• Although Medley has reported mixed 2Q24 result, with robust topline and declining profitability, the long-term growth potential remains intact. The company guided for 43% YoY revenue growth in 2024.
• Continued shortage of human resource, including doctors and nurses at medical care facilities in Japan and underpenetrated market remain the main growth engines of the company.

• This month, I had the privilege of attending an investment conference, where I engaged with many successful value investors and independent thinkers.
• During one conversation, an investor jokingly remarked that everyone seems to have shifted toward “quality growth investing,” while he and Mr. Robotti appear to be among the few who still favor cyclical stocks, such as Tidewater Inc.
• Although I don’t generally shy away from cyclical stocks, I recognize the immense challenge of navigating the capital cycle by investing in companies that seem on the brink of failure.

• RaaS Research Group has published an update on ethically-motivated, diversified financials group Pioneer Credit (ASX:PNC) following the company’s announced new $272.5m four-year syndicated senior finance facility.
• Our base case valuation has increased to $250m (previously $217m) or $1.94/share due to lower finance costs in FY26 (down $8m to c.
• $20m) and ongoing.

• By way of its 54.79% ownership in Zheshang Securities (601878 CH), Zhejiang Expressway Co H (576 HK) is an attractive indirect vehicle to access the mainland securities sector.  
• The attributable market cap of Zheshang equals 90% of ZJE’s market cap, implying that the toll road business is almost free. However, Zheshang only contributed 16% of ZJE’s 1H24 profit.
• ZJE trades on 6.7x FY24F PER, vs. 31.3x for Zheshang and 17.6x for H-share securities companies. A stable toll road business also minimises the risk for ZJE.

• TSMC: +18.6% Premium; Spread Has Returned to Previous Elevated Trading Range
• UMC: +1.5% Premium; Wait for Higher Level Before Shorting the Spread
• ASE: +4.2% Premium; Can Consider Going Long the Spread at Current Level

• Given its holdings in four A-share subsidiaries, AviChina Industry & Technology H (2357 HK) will benefit from the surge in their share prices as mainland markets re-open.
• These A-share all lagged benchmark Indices YTD. Avichina’s holdings in them are already valued at 2.23x its own market capitalisation. 
• The historical discount range is 51-70% and currently stands at 55%, suggesting AviChina’s share price has not yet excessively priced in the post-Golden Week rally.

• Cerebras presently derives up to 87% of its revenue from G42
• Microsoft gatecrashed Cerebras party with a $1.5 billion investment in G42 to “accelerate AI development and global expansion”
• G42 “severed its ties” with China in advance of the Microsoft investment

• Helix Energy Solutions has emerged as a prime candidate for strategic acquirers and financial sponsors exploring opportunities in the offshore oil and gas industry.
• The company, which provides specialized services such as well intervention, robotics, and production facilities, is exploring its strategic options, including a potential sale.
• Helix’s latest quarterly earnings call revealed a significant improvement in revenue and profitability, alongside strong operational performance across its key segments.

• Google’s AI infrastructure spending remains a priority, with capex exceeding $12 billion per quarter, highlighting aggressive expansion in cloud and AI-driven services.
• Competition from Meta and TikTok has pressured Google’s advertising, especially YouTube. Q3 performance will gauge its ability to maintain dominance in digital ads.
• Ongoing antitrust trials pose a long-term risk to Google’s business operations, particularly in search and advertising. Potential regulatory action could impact future growth strategies.

• Half of all lithium-ion batteries could be made with recycled lithium by 2042, according to the founder of power cell giant Contemporary Amperex Technology Co. Ltd. (CATL) (300750.SZ +11.06%), who presented a vision of an eco-friendlier industry at a recent event.

• Speaking at the World New Energy Vehicles Congress on Friday, Zeng Yuqun, also CATL’s chairman, highlighted the critical role power cells can play in driving the EV industry toward a zero-carbon future, saying that the sustainable development of the industry hinges on the use of recycled battery raw materials.

• CATL’s battery recycling business has already taken shape, with a current annual capacity to process 270,000 tons of used batteries, Zeng said.

• TCL Technology Group Corp.
• (000100.SZ +7.51%), a leading Chinese electronics maker, has agreed to pay 10.8 billion yuan ($1.54 billion) to acquire LG’s two display factories in Guangzhou, as Chinese manufacturers strengthen their dominance in the liquid crystal displays (LCD).
• TCL China Star Optoelectronics Technology (TCL CSOT), a subsidiary of TCL Technology, will acquire 80% of LG Display China and the entire stake of LG Display Guangzhou.

• NVIDIA (NASDAQ: NVDA) is on the brink of yet another significant leap in AI computing with its latest Blackwell GPU, as CEO Jensen Huang recently emphasized in an interview with CNBC.
• Describing the demand as “insane,” Huang noted that Blackwell is already in full production and on track to be released to data centers for AI applications, with consumer availability slated for 2025.
• The company’s growth, particularly in its Data Center division, has been fueled by AI workloads, driven by GPU computing, networking platforms, and accelerated AI demand.

• Investors always have expectations for Chinese CXOs, believing that BIOSECURE Act will not pass and Chinese CXOs will bottom out. We can understand this, but we have to be rational.
• Selling the operations that have been negatively affected is a reasonable choice, which helps stabilize WuXi’s business/market expectations. But this does not necessarily mean the geopolitical conflict will end here.
• Without persuasive long-term logic, share price of Sihuan would still underperform. Despite strong performance of Chinese stocks, we advise investors to do short-term trading on Sihuan Pharmaceutical Hldgs (460 HK).

• IHH Healthcare (IHH MK) remains consistent in delivering double-digit growth across key metrics. 2Q24 revenue increased 17%, while EBITDA grew at a faster pace of 22%.
• Singapore, Turkiye & Europe, India, Malaysia show strength with favorable patient mix, higher occupancy, and higher revenue per in-patient.
• IHH is on track to add ~4,000 beds (+33% capacity) by 2028. The company is acquiring Island Hospital, a 600-bed hospital in Penang.

• Reservoir Media, a company known for its engagement with talent and diverse music assets, delivered mixed results in its first quarter of fiscal year 2025.
• Like many companies in the music industry, it is navigating a complex landscape influenced by digital transformations and global market trends.
• On the positive side, Reservoir Media experienced notable growth in its Music Publishing segment, showing a 15% increase in revenue.

• Clear Secure remains steadfast in its commitment to grow its member base, enhance the customer experience, and improve its financial stability, with several significant developments detailed in the fiscal second quarter 2024 earnings call.
• The company reported robust growth, adding 2.3 million new members, and highlighted its innovative projects, like the implementation of new technologies to make travel and identity verification smoother and more integrated.
• Baptista Research looks to evaluate the different factors that could influence the company’s price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology.

• Broadridge Financial Solutions has displayed robust financial performance and maintained consistent growth in its earnings, backed by a strategy focused on transforming and digitizing the financial services industry.
• The company’s fiscal year 2024 concluded with a significant uplift in closed sales and improved earnings per share (EPS), demonstrating resilience and agility in a fluctuating market environment.
• Baptista Research looks to evaluate the different factors that could influence the company’s price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology.

• Endava, a global IT services provider, recently reported its earnings for the fourth quarter and the full fiscal year 2024.
• Amid a challenging economic climate, the company underscored its strategic maneuvers and repositioning efforts, all while navigating noticeable headwinds in revenue growth, client demand fluctuations, and transformative industry shifts influenced by advancements in artificial intelligence (AI).
• Baptista Research looks to evaluate the different factors that could influence the company’s price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology.