In today’s briefing:
- Alibaba: FY3Q23 Results Presenting An Opportunity In Disguise
- HCG: Firing On All Cylinders – All Set For FY24 To Be A Defining Year
- Hon Hai Precision: Nvidia Chip Partnership Shows Emerging EV Advantage, Apple Issues Improving; Buy
- Cisco Systems Inc.: Major Drivers
- Fortinet Inc.: Launch of FortiSP5 & Other Drivers
- Memory Monitor: Long Micron Vs. Short Nanya Technology; Nanya Relatively Over-Valued
- Shopify Inc.: Introduction Of Commerce Components & Other Developments
- Akamai Technologies Inc.: New Cloud Computing Services & Other Drivers
- The Kraft Heinz Company: Major Drivers
- Biogen Inc.: Major Drivers
Alibaba: FY3Q23 Results Presenting An Opportunity In Disguise
- BABA’s December results highlighted how the performance of this e-commerce giant – as a proxy for China consumption – increasingly tracks Chinese economy.
- The Alibaba that suffered from China’s slump in 2022 should also be the Alibaba that stands to reap the fruits from China’s recovery in 2023.
- Trading at 12x PE on the cusp of economic recovery, the payoff of BABA is much better for bulls than bears. Maintain $500 billion target valuation. Buy.
HCG: Firing On All Cylinders – All Set For FY24 To Be A Defining Year
- HCG continues to scale up well as its new centers are maturing. Its mature centers are also growing at a healthy pace.
- Margins are improving across the board led by 1) Realization Improvement 2) Operational Efficiencies 3) Operating Leverage and 4) Improving Mix of Cases.
- FY24 is all set to be a defining year in terms of HCG’s financial performance across growth and profitability.
Hon Hai Precision: Nvidia Chip Partnership Shows Emerging EV Advantage, Apple Issues Improving; Buy
- Latest Nvidia and Apple developments are positive signals for Hon Hai, we continue to view Hon Hai as a Structural Long and also outline a potential Long/Short.
- The Nvidia chips Hon Hai is partnered with to use in its EV autonomous driving systems are based on 7-nm technology, thus restricted for any mainland China competitors.
- On the Apple front, Hon Hai is also reported to have won exclusive production for the iPhone 15, iPhone 15 Pro, and iPhone 15 Pro Max.
Cisco Systems Inc.: Major Drivers
- Cisco Systems delivered another strong quarter, exceeding the top and bottom line expectations of analysts.
- The company saw consecutive double-digit growth in its customer markets’ commercial and enterprise sectors, and the public sector performed better than usual.
- We give Cisco Systems a ‘Hold’ rating with a revised target price.
Fortinet Inc.: Launch of FortiSP5 & Other Drivers
- Fortinet had a mixed set of fourth-quarter results with revenues failing to meet Wall Street expectations despite market share gains.
- The company succeeded in delivering an earnings beat and held on to its market positioning.
- Its 42% product revenue growth has made the company one of the top product revenue companies in the cybersecurity industry.
Memory Monitor: Long Micron Vs. Short Nanya Technology; Nanya Relatively Over-Valued
- Long Micron vs. Short Nanya – We remain biased to Long Micron vs. Nanya Technology based on multiple factors.
- Relative valuation and inventory management appears to favor Micron. Nanya Technology’s inventory days blow-out increases risk of write-downs impacting its next earnings.
- Potential news flow also appears to favor Micron as the US CHIPS Act rolls out.
Shopify Inc.: Introduction Of Commerce Components & Other Developments
- Shopify delivered an all-around beat in the previous quarter and ended 2022 on a positive note.
- The company introduced Shopify Audiences, Shopify Collabs, POS Go, Tap to Pay, integrated Twitter Shopping and YouTube channels, and continued to expand the Shop app to make it simpler for retailers to interact with and develop relationships with customers.
- They also introduced Shopify Markets and Markets Pro.
Akamai Technologies Inc.: New Cloud Computing Services & Other Drivers
- Despite ongoing difficulties with the global economic environment, Akamai produced strong results in the fourth quarter, exceeding market expectations in terms of both, revenues as well as earnings.
- Their rapidly expanding Compute business, the sustained high demand for their security solutions, and higher-than-anticipated shipping traffic contributed to their revenue growth.
- In this report, we have carried out a fundamental analysis of the historical financial statements of the company.
The Kraft Heinz Company: Major Drivers
- Kraft Heinz saw strong revenue momentum in the last quarter and managed to deliver an all-around beat with a good growth in base volumes.
- The management claims to be outperforming the competition in food service and emerging markets.
- In 2023, the management is looking towards expanding its marketing technology and personnel investments to propel the company’s growth.
Biogen Inc.: Major Drivers
- Biogen delivered an all-around beat in the last result.
- TECFIDERA generic competition, ongoing interferon declines and some pricing pressure mostly brought on this reduction.
- Based on these positive results, they started the Phase II/III AMETHYST investigation of litifilimab in CLE.
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