Daily Brief Equity Bottom-Up: [Alibaba (BABA US and more

• BABA reported CY3Q24 top line, adjusted EBITA and non-GAAP net profit (1.0%), (1.6%) and in-line vs. consensus. 
• CMR improved amid monetization changes that narrowed the growth gap with GMV, but also eliminated some low-single profit sellers from its GMV. 
• Cloud and overseas e-commerce revenue also saw good growth and improved profitability. All of BABA’s key businesses are sputtering to life while macro tailwinds are also favorable. 

• During Tesla’s third quarter of 2024 financial report, several key points emerged that provide an overview of the company’s performance and strategic direction.
• One of the prominent highlights was Tesla’s achievement of record deliveries in a market experiencing overall industry declines.
• This emphasizes Tesla’s ability to navigate a challenging automotive landscape, an important consideration for investors assessing the company’s resilience and market positioning.

• Both online marketing and “other revenues” grew strongly in 3Q24.
• Both the gross margin and the operating margin improved over the same period last year.
• We believe total revenue will accelerate when live streaming is not significant and margins will rise when e-commerce makes profit.

• 3Q25 (Oct-25) 5% above Consensus, Hopper growing incl H200, no Blackwell revenue. 4Q25 (Jan-25) guidance inline with Consensus but Nvidia has beat guidance for 8 quarters.
• Jan-25: Blackwell revenue “several billion dollars”. Supply keeps to increase but supply constraints. GM will moderate to low-70% during Blackwell ramp due  but will stabilize at mid-70%.
• The stock is not expensive, trading at its average multiples since 2019: 51x trailing EPS, 34x forward EPS. These multiples are high in an absolute sense, but average for NVDA.

• QCOM estimates ~5% Android revenues growth Cagr to FY29, Automotive 22%, IoT 21%. If QCOM keeps Apple business, revenue Cagr will be 9% to FY29. If QCOM loses it: 6%.
• Mngt forecasts high Opex control, target at 22% of revenue, which looks aggressive. Opex reached 31% in FY23-24 . At 22% Opex, Operating Profit would grow ~13% Cagr to FY29.
• Android growth looks low, Opex control demanding. As such, we could conclude that 10% Operating Profit Cagr is more likely than 13%. Even with lower growth, the stock is cheap. 

• Honda Motor Co., Ltd.’s financial results for the first quarter of the fiscal year 2025 offer a complex picture of both achievements and challenges.
• The company reported its highest-ever quarterly operating profit of JPY 484.7 billion, marking a significant year-on-year increase by JPY 90.2 billion.
• This improvement was largely driven by increased unit sales in the motorcycle business in India and Brazil, as well as robust sales of hybrid automobile models in Japan and the United States.

• The company is in the business of designing, construction, operation and maintenance of water and wastewater treatment plants and supply schemes with all related services.
• It has an order book worth Rs. 1906+ cr. as of June 30, 2024 and 750Cr+ of operation & maintenance order book in their hand.
• Company has in-house capability to build and design water plants which enhance the margins of the company vs its peers. 

• Freee KK (4478 JP) offers cloud-based online accounting and HR/Payroll software to small and medium businesses (SMBs) in Japan. The company operates a subscription-based revenue model.
• Freee reported its first-ever profits recently and we expect continued improvement in freee’s profitability driven by its strong business model vs MF whose business model has started to breakdown.
• Freee’s current valuation multiples are cheap and there is significant upside to the current share price, hence we recommend making an entry.

• NetEase reported C3Q24 revenue, GAAP operating profit and GAAP net income in line, (3.6%) and (5.3%) vs. our estimates, and in line, (4.4%) and (5.0%) vs. consensus. 
• Mobile game revenue decline is less a concern due to imminent pipeline launches, but PC game’s significantly beat is a positive surprise. 
• We raised the TP to US$118 for the better outlook of new game launches.

• Orla Mining acquired by Newmont in $850 million deal with production assets in Mexico and development assets in the United States
• Orla Mining has strong shareholder support including PL mining 10% of the company, Fairfax, Newmont, and Agnico
• Muscle White mine in Canada has a 6.23 grams per tonne reserve grade with a reserve life until 2030, operating at 1 million tonnes per annum with high recoveries and FIFO operated mine with camp upgrades in progress

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