Daily Brief Equity Bottom-Up: A Deeper Look into Mamaearth’s Inventory Saga: Unpacking the Red Flags and Forensic Insights and more

• Mamaearth’s journey to the stock market has been marred by allegations of channel stuffing, inventory mismanagement, and inconsistent communication from management. 
• The company’s struggles in Q2 FY25 have raised concerns about their financial health and transparency. 
• The forensic analysis is a deeper look into the allegations, redflags and bigger problems that require investor’s attention

• Our 2024 High Conviction, the stock of Meituan has risen by 87% in one year.
• We believe the market ignores TME because of its flat revenue.
• However, we expect TME will significantly benefit from its dominant position in the Chinese music market.

• Korea Exchange (KRX) plans to make special changes to the Korea Value-Up Index constituents on 20 December.
• We believe that following five stocks are likely inclusions in the Korea Value Up index rebalance on 20 December (KB Financial, Hana Financial, SK Telecom, KT Corp, and LG Electronics).
• The new companies that will be included in the Korea Value-Up Index include companies that provide detailed corporate value up plans by 6 December.

• Ionis Pharmaceuticals recently reported their third-quarter financial results for 2024, presenting a comprehensive view of its current position in the biotechnology sector.
• The company’s focal points include imminent product launches, ongoing clinical trials, and strategic pipeline developments—all set within the context of their financial performance and future outlook.
• The company is on the verge of launching its first independently marketed product, Olezarsen, for familial chylomicronemia syndrome (FCS), with an anticipated FDA action next month.

• Nvidia’s Blackwell rack design overheating issues causing potential shipment delays
• AMD leading server market in 3Q24, Intel fighting back in PC market
• Trump’s tariff changes impacting Chinese EV makers, with 4 strategies to navigate the changes. Huawei and Xiaomi dominate China’s AI smartphone market with over 50% market share.

• Celsius Holdings Inc.’s third-quarter 2024 earnings reveal a mixture of growth opportunities and challenges.
• The energy drink company has managed to maintain robust consumer demand and retail sales growth despite a dip in total revenue compared to the previous year.
• The company recorded a modest 7.1% increase in retail sales year-over-year for the quarter, with unit sales rising by 7.3%.

• Fortinet’s third-quarter financial results for 2024 showcase robust performance and a strategic focus on growth markets in the cybersecurity landscape.
• The company’s total revenue grew by 13%, a return to product revenue growth bolstered by strong service revenue expansion.
• Fortinet’s strong execution led to record gross and operating margins, with the latter increasing by 830 basis points to over 36%.

• Secure Energy Services (SES) operates in the waste management and energy services industry, focusing on recurring revenue and pipeline businesses.
• The company has potential for growth through acquisitions, with a strong focus on tuck-in acquisitions in the metals recycling sector.
• Despite potential risks such as safety concerns and regulatory changes, Secure Energy Services has a strong dividend yield, free cash flow yield, and growth prospects, making it an attractive investment opportunity.

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• Hong Kong market sectors outperforming since the stimulus in September are Consumer Discretionary and Healthcare as Utilities, Telecom and Energy lag.
• CRRC Corp Ltd H (1766 HK) gets BUY recommendations as its results point to continued strength in the rail equipment sector with passenger volume surging.
• Tencent Music Entertainment Group (1698 HK) reported solid results as it shifts to a pay-to-stream subscription model. Xiaomi Corp (1810 HK) had a blowout quarter with EV sales surging.