United States

• GEVO completed the previously announced expansion of renewable natural gas to 400,000 MMBtu from 355,000 MMBtu.
• On the Verity front, an agreement was signed with a third ethanol producer customer in the US Southwest, taking total planned volume of ethanol tracked to more than 300 million gallons per year or 2% of the US ethanol market.
• Additionally, GEVO also signed, finalized, and executed the previously announced US Department of Agriculture (USDA) grant of up to $30 million for the Climate-Smart Farm-to-Flight Program.

Throughout Q323, Immix shared encouraging updates for the clinical development of lead CAR-T asset NXC-201, including the announcement of orphan drug designation (ODD) in both multiple myeloma (MM) and amyloid light chain amyloidosis (ALA). In October 2023, the company shared positive efficacy and safety updates and we believe the data so far could support NXC-201 as the first outpatient CAR-T therapy, subject to regulatory approval, addressing the myriad of challenges associated with current CAR-Ts. In the quarter, Immix also shared positive interim data for its lead TSTx asset, IMX-110, and we anticipate further updates across Q423 to FY24. Net cash at the end of the period stood at $19.6m, which we estimate should provide an operating cash runway into Q424. As we adjust for our expense estimates based on year-to-date results, update net cash and roll our model forward, our valuation for Immix adjusts to $86.6m or $4.0 per share (from $90.7m or $4.2/share previously).

• Sam Altman – one of OpenAI’s founders and its CEO – has been ousted from the firm citing lack of consistent communication with the board. 
• OpenAI has garnered significant spotlight around Gen AI. Surely it is generating revenues at a rapid clip but far from making profits. What will this leadership transition mean?
• Sam’s ousting was totally not expected. On 6th November, OpenAI held its first ever developer conference which was led by him. Earlier this week, he spoke at APEC conference. 

• W&T implemented a $0.01 per share quarterly dividend that will be paid on December 22, 2023, to shareholders of record on November 28, 2023.
• The dividend reflects management’s focus on generating free cash flow from the asset base that is available for reinvestment, debt reduction, and returns to shareholders.
• The annualized yield is currently 1.1%.

• ZEEKR (ZK US), a premium Chinese BEV manufacturer and a subsidiary of Geely Auto (175 HK), has filed for a US$500 million IPO to list on the NYSE.
• In ZEEKR IPO: The Bull Case, we highlighted the key elements of the bull case. In this note, we outline the bear case.
• The bear case rests on growth slowdown in the second-largest business, high related-parties dependence, Virdi/CEVT gross margin pressure, ongoing operating losses and FCF burn.

• Welcome back to our weekly EIA report, where we run through demand and supply data and give our cents on where we are heading next – and what the implications are for energy markets.
• As always we present the main conclusions up-front: 1) Oil demand will likely come in hot in November on the back of strong gasoline demand in October due to the lags in energy markets (Gasoline leads oil – not the other way around).
• 2) Gasoline numbers in September were likely just a data-glimpse, as no high-frequent data series seem to agree with the narrative that demand for fuel is dropping.

• iPower reported $26.5 million in revenue in 1QFY24, its highest quarterly revenue ever, compared with $26.0 million in 1QFY23.
• The company’s performance was helped by business generated by its SuperSuite supply chain partnerships, currently on a $7 million annual run rate.
• The company’s TikTok Shop sales also contributed to the solid sales results.

• Crack spread refers to the gross processing margin of refining (“cracking”) crude oil into its by-products.
• Crack spreads are affected by seasonality, supply, and inventory levels of crude and refined products, as well as demand for each refined product.
• A low-demand outlook for refined products of crude is prevalent due to expectations of an economic slowdown.

• ZEEKR, a fast-growing premium BEV maker, filed its F-1 last week. The company is going public through an IPO and offering ADSs of a Cayman Islands holding company.
• In 2022, Geely agreed to spin off ZEEKR and list its EV maker in Asia/the U.S. The company has raised ~$1.6B and was backed by Geely and top-tier investors.
• Geely Auto will hold 50%+ of the voting power upon completing an IPO. ZEEKR’s last round was a $750M Series A in February 2023 at a $13B post-money valuation. 

• XPER reported third quarter results in line with our forecast and reaching an inflection point in revenue where the operating leverage of the business becomes visible.
• Ahead of the results, there had been worries over XPER’s exposure to consumer electronics and pay TV industries that could cripple revenue growth.
• XPER reported third quarter revenue of $130.4 million compared to our forecast of $130.9 million. Adjusted EBITDA reached $9.3 million compared to our forecast of $9.2 million

• Bakkt reported a 3Q23 loss of $0.19/share on net revenue of $14.6 million, slightly below our estimates of a loss of $0.18/share loss on net revenue of $15.5 million (consensus was for a loss of $0.17/share on $16.1 million).
• The crypto environment continues to be challenging. President and CEO Gavin Michael said the quarter “clearly demonstrated our ability to execute” in a tough market.
• Michael also highlighted the company’s push and significant progress in expanding outside the US, which is in need of clarifying legislation.

• We are publishing this note to introduce a new HNI financial model inclusive of the acquisition of Kimball International.
• We expect this new model will be more user-friendly for investors who want to see how we arrive at our estimates or tinker with the assumptions.
• Per our discipline, our model is available on request or visible through our partners.

• IMMR’s third quarter results affirmed our investment thesis of the Company beginning to experience an increase in automotive revenue by the end of 2023.
• IMMR reported quarterly revenue above our forecasts citing an increase of approximately $1.9 million from automotive related customers.
• IMMR has a reputation with investors for generating revenue from smartphones and video game consoles. The inclusion of haptics within automotive was the reason we were drawn to the stock.

• ZEEKR (ZK US), a premium Chinese BEV manufacturer and a subsidiary of Geely Auto (175 HK), has filed for a US$500 million IPO to list on the NYSE.
• ZEEKR has launched three models – the luxury shooting brake coupe ZEEKR 001, the luxury pure electric MPV – ZEEKR 009 and the new luxury versatile SUV – ZEEKR X.
• The bull case rests on bestselling premium BEVs, rapid vehicle sales growth, rising gross margin, debt-free balance sheet and a favourable cash conversion cycle.

• Aspira Women’s Health reported 3Q23 financial results, mostly in line with our estimates.
• Revenue of $2.2 million was below our estimate, but good expense control is in place and is expected to continue.
• Our estimates for 2023 and 2024 remain in line with our prior estimates.

• DNOW’s business has been resilient in the face of a declining US rig count through the first three quarters of 2023.
• 3Q23 US revenue was $448 million, 3% higher than 3Q22 despite an 11% fall in the average rig count.
• On a per rig basis, US 3Q23 revenue averaged ~$689,000, a 20% Y/Y gain

• Deere & Company manufactures and distributes various equipment worldwide. The company operates through four segments: Production and Precision Agriculture, Small Agriculture and Turf, Construction and Forestry, and Financial Services.
• The Production and Precision Agriculture segment provides mid-size tractors, combines, cotton pickers and strippers, sugarcane harvesters, harvesting front-end equipment, sugarcane loaders, pull-behind scrapers, and tillage and seeding equipment, as well as application equipment, including sprayers and nutrient management, and soil preparation machinery for grain growers.
• The Small Agriculture and Turf segment offers utility tractors, and related loaders and attachments; turf and utility equipment, including riding lawn equipment, commercial mowing equipment, golf course equipment, and utility vehicles, as well as implements for mowing, tilling, snow and debris handling, aerating, residential, commercial, golf, and sports turf care applications; other outdoor power products; and hay and forage equipment. 

• During the period under consideration, i.e. September 27th – October 27th, 2023, the EUR/USD exchange rate fluctuated between 1.049 and 1.061 until October 22nd, 2023, but thereafter it followed an instantaneous daily uptrend on October 23 to finally secure the price of 1.0668.
• However, at the finish of October, the Euro notched a slight drop, but it was still trading higher than the levels at the end of September.
• According to Graph 1, during the first 18 trading days of the period under consideration, the pair showed a consolidation pattern mainly along the range of 1.05-1.0593 (except 2 sessions). 

SIGA recapped several key developments in its Q3 update, signalling strong top-line momentum going into Q423. Most notably, the recent $18m procurement deal with the European Health Emergency Preparedness and Response Authority (HERA) has surprised to the upside, with more value to be unlocked, in our opinion. With upcoming BARDA (oral and IV TPOXX), Department of Defense (DoD) and HERA deliveries, Q423 will likely be a busy quarter for SIGA. We have increased our FY23 product revenue estimates to c $164m ($155m previously) to reflect the HERA orders, although this has been offset by lower R&D revenue estimates ($8.9m vs $20.5m previously) following the receipt of the final payment under the PEP research contract with the DoD (in Q323). Management continues to target the PEP regulatory submission in 2024 (despite undertaking a trial data reanalysis) and we view this as a next significant milestone for SIGA. Incorporating the results and latest net cash figure, our valuation adjusts to $17.24/share ($17.46/share previously).

• First mover advantage is half-truth. For every academic study proving that first-mover advantages exist, there is a study proving they do not.
• Engineers at OpenAI, scaled up a special machine learning method using large data sets to create GPT or “Generative Pre-trained Transformer.”
• Launch of ChatGPT has put OpenAI revenues on steroids with reports suggesting USD 1.3B this year (versus USD 28 million before ChatGPT was rolled out).

• OpenAI held its first developer conference on November 6th. The event announced the launch of OpenAI’s latest model and feature upgrades.
• The latest OpenAI model, GPT-4 Turbo offers drastically lower costs, updated knowledge cutoff, better vision and voice support, and improved API.
• Event unveiled custom chatbots called GPTs for specific applications, showcasing expanded domain knowledge. They’ll be sold in a digital store, adding a new revenue stream for OpenAI.

• ARLO reported third quarter results underscoring the continued growth in paid subscribers leading the Company to another quarter of positive free cash flow.
• ARLO has maintained its rate of quarterly net subscriber adds throughout 2023 and is poised to cross 3 million paid subscribers by the middle of 2024.
• ARLO reported third quarter revenue of $130.0 million compared to our forecast of $127.5 million.

• Qualcomm Inc.’s handset chip business in China will not be affected by Huawei’s push for semiconductor self-sufficiency, said chief executive Cristiano Amon.
• Despite Huawei’s return to the mobile arena spotlight with an in-house chip, the growth trajectory of Qualcomm’s business with Android handset-makers in China will remain unchanged, according to Amon on a post-earnings call on Wednesday.
• Chief Financial Officer Akash Palkhiwala cited an estimated jump of more than 35% in chip sales to Chinese smartphone-makers in and outside China for the fourth quarter of fiscal 2023.

• MariMed report 3Q revenue of $38.8 million, which was slightly ahead of our estimate of $38.5 million.
• This represents a 6.3% increase Q/Q and a 14.4% improvement Y/Y.
• The revenue increase was driven primarily by Maryland. MariMed has a dispensary in Annapolis that converted to adult-use on July 1 and sales grew 88% Q/Q. 

• On November 9, Bakkt announced the expansion of its international footprint and custody client base.
• Key to its international efforts is expectations to be live with crypto capabilities across new Latin American, European, and Asian markets by year-end.
• CEO Gavin Michael said the company was “working efficiently to expand into international regions with more regulatory clarity and sizeable addressable markets.”

• IRDM has announced the termination of its partnership with Qualcomm (QCOM). The news is disappointing, but not a surprise.
• IRDM has not included revenue from the partnership within its guidance for 2023 nor its 2030 free cash flow target
• We were hopeful QCOM was looking to make a bigger splash at CES in January 2024 with a new update

• 3Q23 revenue of $0.2 million was slightly below expectations, but EPS was slightly better than expected at a loss of $0.05 versus consensus of a loss of $0.06.
• CEO Matt Fisch said, “the lidar market has shifted from a ‘battle for the best technology’ to a ‘battle for the best path to commercialization.’”
• Fisch continues to be bullish and upbeat as AEye’s technology continues to win awards.

• ACMR reported C3Q23 revenue, non-GAAP EBIT, GAAP net profit (5%), 21%, in-line vs. our est., and (3%), 63%, 49% vs. cons., respectively. Gross margin beat by +9ppts due to FX.
• ACMR received a second order from a U.S. semiconductor maker, which indicates potential for significant market share gain by 2025. SK Hynix is engaging its entire product line, per management.
• We maintain BUY rating and US$ 30 TP, implying 18x FY23 EV/Earnings.

• Duolingo reported stronger than expected 3QFY23 results, including revenues of $137.6M (consensus: $132.2M) and net income of $2.8M. The company raised guidance for FY23 revenues and total bookings. 
• Stock indicated up ~9% after hours. Duolingo beat all key estimates. However, ABPDAU declined to $25.38, while net new ARR growth will slow in 4Q and the next fiscal year. 
• With a market cap of ~$8.2B on a fully diluted basis, Duolingo shares trade at ~14x and ~11x EV/Rev on my respective FY23/FY24 estimates, a significant premium to comparable companies.

• Unrealized HTM losses continued to balloon as interest rates crept higher.
• What has caused SVB’s demise seems to have now been forgotten and ignored by investors.
• We took a deep dive into 3 U.S. Banks, First Foundation, Wells Fargo and Bank of America on their HTM losses.

• IPAR benefited from consumers continuing to purchase fragrances in the third quarter and retailers beginning to stock inventory for the holiday shopping season
• IPAR reported third quarter sales of $368.0 million in line with what the Company had previously disclosed in October
• IPAR has several new product introductions in 2024 and begins to generate sales from Roberto Cavalli and Lacoste brands as well, which should result in IPAR growing sales in 2024

• SES has made significant advancements in engineering and materials, particularly in the cathode, resulting in high stability and improved safety for high Ni cathodes.
• The company has also developed new technologies for pouch cell engineering, electrolyte, lithium metal anode protection, and charging protocols, reducing the risks associated with thermal runaway in both Li-Metal and Li-ion batteries.
• Despite the challenges and the trade-off between energy density and safety in the battery industry, SES aims to improve safety without compromising other parameters, opting for a high-energy density approach and overcoming difficulties to achieve its goal.

• Talk about your never-ending story. I count at least seven non-binding Offers for  Hollysys Automation Technologies (HOLI US) since December 2020, three of which are still on the table.
• The latest, at US$26/share, was pitched earlier this week from Ascendent Capital Partners; who along with Changli Wang, Hollysys’ founder, previously made an US$23/share Offer in August 2021.
• However, all these Offers are largely moot until we get closure at the court injunction hearing. If that occurs. Separately, I had a solid discussion with Hollysys’ IR. 

• Q323 revenues of $1.85 billion, flat sequentially but down 11% YoY. Net income was $249 million, up 5% sequentially but down 26% YoY.
• At a midpoint of $1.85 billion, forward guidance is once again flat sequentially. Overall it was a solid report with guidance slightly better than UMC delivered last week.
• Despite the solid quarter, the company’s outlook for 2024 was bleak with a 50% CapEx cut, LTAs under mounting pressure & ominous-sounding LTA “True Up” on the horizon. 

• ATEN reported third quarter results after having already warned there were order push outs towards the end of the period.
• ATEN has been trying to diversify the revenue stream to reduce the volatility order flow disruptions could have on the business
• ATEN managed to maintain gross margin above 80 percent, a feat that does not get much recognition from investors. ATEN should continue to achieve gross margin above 80 percent

• Vitesse’s business mission is to return capital to stockholders from free cash flow generated from its capital allocation model targeting non-operated interests in oil & gas assets in major onshore US producing regions.
• Favored assets are located in plays where advancing technology can positively affect future returns.
• A fixed common stock dividend is management’s preferred vehicle to return capital to stockholders.

• ADEA ) reported quarterly results since reporting it had a contract dispute with Shaw Communications. Third quarter revenue was better than expected with ADEA having several renewals in the period
• The ongoing pace of renewals should allow ADEA to generate free cash flow to reduce debt at a faster pace in 2024.
• ADEA reported third quarter revenue of $101.4 million compared to our estimate of $89.6 million. timing of renewals was a factor in ADEA’s revenue surpassing our forecast

• MariMed reports 3Q earnings on November 8 after the close.
• Q/Q, we are expecting 5.4% revenue growth and a slight contraction in AEBITDA.
• Maryland should be the most significant driver of the top-line improvement.

• Ascendent Capital has made a non-binding proposal for Hollysys Automation Technologies (HOLI US) at US$26.00 per share, a 4.0% premium to the MBO and Recco proposal of US$25.00 per share. 
• Ascendent has also become the largest shareholder by securing 13.69% of outstanding shares at an average price of A$20.84 per share. Ascendant is supportive of the special meeting request.
• The Board has tried several delaying tactics, but the emergence of Ascendant ramps up the pressure on the Board to conduct a transparent sale process and address shareholder concerns. 

• We believe there is significant evidence that the broad equity market has bottomed, and a year-end rally has begun. This report elaborates on this main point
• Last week (10/31/23) we discussed how the $SPX and $QQQ did not display decisive breakdowns, and that a break above 4165-4200 and $350-$355, respectively, would be bullish, that’s what happened
• Additionally, we discussed how risk/reward favored buyers with the $IWM testing 1.5-year support at $162-$163, a logical spot for small-caps to bounce, especially when we considering persistent bullish breadth divergences.

• Cambium Networks (CMBM) is a leading mid-market wireless solutions provider.
• Growth is being driven by 5G and new 6 GHz products. The company believes its strengths are its RF algorithms and software.
• The cnMaestro X network management solution makes significant use of AI and lies at the center of the company’s product suite.