Daily Brief Equity Bottom-Up: A Message to Rio from an Arcadium Shareholder and more

• 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.

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• 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.