In today’s briefing:
- [Alibaba (BABA US, SELL, TP US$66) TP Change]: What It Takes for Us to Be More Positive on BABA?
- Trend Micro (4704) – In-Line Announcement Causes Selloff – Hopium Meets Reason
- Globalfoundries. Pressure Grows As Customer Penalties Soar
- ZJLD Group (6979 HK): Fundamentals Intact; Share Price Wrongfully Punished
- Fortinet Inc: Strong Competition and Growth in Secure Operations (SecOps) and SASE
- Vanke Offloads Shanghai Mall at Discount
- Palantir Technologies: Outstanding Bookings and High-Retention Rate Resulting In The Share Price Skyrocketing? – Major Drivers
- Check Point Software Technologies: Initiation of Coverage – Unleashing the Power of AI to Combat Cyber Threats — Discover the Future of Internet Safety! – Major Drivers
- Amkor Technology: Engagement in Secular Growth Markets & Other Major Drivers
- Cognizant Technology Solutions: Solid Investment in AI and Automation Technologies! – Major Drivers
[Alibaba (BABA US, SELL, TP US$66) TP Change]: What It Takes for Us to Be More Positive on BABA?
- BABA reported C4Q23 top line, non-GAAP operating profit and GAAP net income in-line, 3.8% and (71)% vs. our estimates.
- The discrepancy between non-GAAP operating and GAAP net is due to restructuring charges;
- A few clients asked what it would take to be more positive on BABA. To us, grasp of its situation and alignment of the organization must happen first…
Trend Micro (4704) – In-Line Announcement Causes Selloff – Hopium Meets Reason
- Last November, Trend Micro Inc (4704 JP) announced a second change to Shareholder Return Policy in 9 months. Activist ValueAct had been pushing. This was their big win.
- I discussed, bullishly, in Trend Micro BIG Bonanza But Shareholder AND Balance Sheet Structure Matter. N225 Divs Get a Fillip.
- Yesterday, with 2024 earnings, we got the promised special dividend and 2024 buyback, and in-line forecasts. No surprises. But the stock is down hard as yesterday’s hopium met today’s reason.
Globalfoundries. Pressure Grows As Customer Penalties Soar
- Globalfoundries (GFS) reported Q423 revenues of $1.854 billion, marginally above the midpoint of the guidance range, down 12% YoY and essentially flat sequentially.
- Guided Q124 down 18% QoQ with Gross Margin set to fall from 29% to 23%
- SMIC will outspend GFS 10x in CapEx terms this year
ZJLD Group (6979 HK): Fundamentals Intact; Share Price Wrongfully Punished
- Many China consumer stocks, including ZJLD Group (6979 HK), have been sold off heavily in the past 6 months, primarily driven by a fear of deflation and weak consumer sentiment.
- ZJLD Group is one of the exceptions, with fundamentals intact while share price heavily sold off.
- Shares look attractive vs. its high growth rate and strong management team, and especially with the return of Southbound connect post holidays.
Fortinet Inc: Strong Competition and Growth in Secure Operations (SecOps) and SASE
- Fortinet Inc., a cybersecurity solutions provider, saw its total billings rise 8.5% to $1.9 billion in Q4 2023.
- This growth, which was driven by an increased focus on secure operations (ops), Secure Access Service Edge (SASE), and improved execution of its sales strategy, led to six deals in excess of $10 million across five industry verticals.
- Fortinet’s customer base comprised 76% of businesses in the Fortune 100, including nine of the top 10 technology companies and manufacturers and nine of the top 10 healthcare providers.
Vanke Offloads Shanghai Mall at Discount
- China Vanke Co. Ltd. is selling its entire stake in a Shanghai retail complex to Link Real Estate Investment Trust (Link Reit) at a discount, as the indebted developer offloads assets to ease liquidity crunch.
- Hong Kong-listed Link Reit, Asia’s largest real estate investment trust, said in a Friday filing that it agreed to acquire a 50% stake in Qibao Vanke Plaza from Vanke at 2.38 billion yuan ($334 million).
- Link Reit already owns the remaining 50% stake in the plaza after a 2.77-billion-yuan purchase from Vanke’s partner GIC Pte. Ltd. in April 2021.
Palantir Technologies: Outstanding Bookings and High-Retention Rate Resulting In The Share Price Skyrocketing? – Major Drivers
- Palantir, a leading developer of data analytics software, showcased strong results in the fourth quarter of 2023.
- The firm reported $608 million in fourth-quarter revenue, which represents 20% YoY and 9% sequential growth.
- The substantial contribution came from the commercial business which surpassed $1 billion in revenue over the last twelve months, marking this figure as a noteworthy milestone.
Check Point Software Technologies: Initiation of Coverage – Unleashing the Power of AI to Combat Cyber Threats — Discover the Future of Internet Safety! – Major Drivers
- This is our first report on Check Point Software, a multinational cybersecurity firm based in Tel Aviv.
- The company had a particularly strong fourth quarter in 2023, according to their recent earnings call.
- The company’s operating income for Q4 2023 was at $309 million, a 7% increase year-overyear, and their non-GAAP operating margin of 47% was quite stable.
Amkor Technology: Engagement in Secular Growth Markets & Other Major Drivers
- Amkor Technology, Inc.’s Q4 2023 earnings call outlined a year of challenges due to macroeconomic headwinds, excess inventory, and geopolitical tensions, which led to an 8% decline in annual revenue.
- However, the firm also reported steady performance with Q4 revenue standing at $1.75 billion and full-year revenue at $6.5 billion.
- 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.
Cognizant Technology Solutions: Solid Investment in AI and Automation Technologies! – Major Drivers
- Cognizant Technology Solutions reported its fourth-quarter 2023 results during the earnings conference call.
- The company’s Q4 revenue stood at $4.8 billion, aligning with the guidance range provided in the last quarter, despite ongoing macroeconomic pressures.
- However, this represented a year-over-year decrease of 1.7%.
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