Daily Brief Equity Bottom-Up: Anhui Conch Cement (914 HK):  Where Are We In The Cycle? and more

• Anhui Conch Cement (914 HK) is trading at a historical low forward P/B of 0.5x, compared to an average of 1.2x for the last decade. 
• In the long term, China cement will likely see much lower volume and lower cement prices in the short term, but eventually rising cement prices due to better supply picture. 
• As the lowest cost producer, Anhui Conch stands a very good chance to win out in the long term and potentially more than double its current market share. 

• Our updated analysis suggests that JAL’s FY24 to March 2024 EBIT guidance of  ¥ 130bn remains conservative. We see  ¥ 177bn as achievable unless forward bookings weaken.
• Our analysis of JAL’s management of inflation highlights it is outperforming many APAC and global peers, keeping unit cost increases to a minimum. 
• Reduced overheads have proved the key driver of inflation avoidance, while stable unit personnel costs contrast starkly with US carriers in particular; JAL’s largest international market.

• PT Metrodata Electronics is Indonesia’s leading ICT distributor and one of the largest IT solutions & consulting companies, making it a play on growing digitalisation in the country.
• The company has seen strong demand from several sectors for its solutions & consulting business, most notably from banks for digital transformations, oil & gas, and telecoms 
• PT Metrodata Electronics is also seeing a strong rebound in its ICT distribution business, with its higher-margin solutions outperforming boosted by public sector growth. Valuations compelling on 8.7x FY2024E PER.

• The wafer demand outlook for 1Q24F should be around flat, but ASP (Average Selling Price) is expected to decline by negative mid-single digits.
• Compared to 4Q23, Mediatek Inc (2454 TT)‘s foundry demand is larger and Samsung Electronics (005930 KS)‘s foundry demand is downsized in 1Q24F. 
• United Microelectronics Corp (2303 TT) and Intel Corp (INTC US) are currently discussing the allocation issue of 12nm capacity.

• New China Life Insurance Co. Ltd. will partner with a unit of China International Capital Corp. (CICC) to set up a $1.4 billion fund to invest in companies with real estate assets, as the state-owned insurer taps the property sector for long-term returns despite a market downturn.
• New China Life said it has reached an agreement with China Capital Investment Group (CCIG) to forge the private fund, in which the insurance company will provide 9.999 billion yuan ($1.4 billion) as the limited partner. CICG will be the general partner with 1-million-yuan investment and will manage the fund.
• The fund, with a term of eight years, will focus on direct and indirect investment in companies holding property projects in their long-term portfolios, according to New China Life.

• Saudi Aramco and its Chinese partner Rongsheng Petrochemical Co. Ltd. have agreed to deepen their tie-up further by taking a stake in each other’s subsidiaries.
• China’s privately controlled refiner Rongsheng said it signed a memorandum of understanding with Aramco to buy a 50% stake in the Saudi company’s refining unit Saudi Aramco Jubail Refinery Company (SASREF).
• At the same time, Rongsheng plans to sell up to 50% stake in its unit Ningbo Zhongjin Petrochemical Co to Aramco, the world’s biggest oil producer, according to Rongsheng’s filing with the Shenzhen stock exchange on Tuesday.

• On track to scale – over the last 12 months we believe LaKeel has made progress in developing its ecosystem, driving new customer acquisitions, and increasing MMR for its key DX-related in-house LaKeel Products.
• While Q1-3 FY12/2023 results highlighted risks over license sale slippages, LaKeel’s strategy remains focused on providing innovative business and technology solutions with high ROI, and reducing IT ownership costs with reusable microservices and sustainable software development.
• Despite the slower-than-expected business development, we believe LaKeel’s products and services are differentiated to make headway in a market with a significant need for digital transformation, and its ecosystem will expand and become more commercialized.

• A10 Networks (ATEN) not warning about missing consensus estimates is a positive, but not enough for a victory lap after a volatile 2023
• The fourth quarter was of particular importance since the Company had reported third quarter revenue materially below estimates
• Service providers represented 50 percent of ATEN’s third quarter revenue compared to 67 percent in prior years. Throughout 2023 this customer base was not consistent with their purchasing

Newron has announced positive 12-month data from its Phase II extension trial (study 015) assessing evenamide in 161 patients with treatment-resistant schizophrenia (TRS). The results demonstrate desirable safety and tolerability, as well as durable efficacy of evenamide, showing statistically significant improvements (p-value <0.001) in all key efficacy measures (PANSS, CGI-S and LOF) versus baseline. We believe the results are favourable for Newron’s TRS programme and bolster the company’s plans to launch a potentially pivotal Phase III trial, which management expects to commence in Q224. We note that the company is also gearing up to share results from the Phase III trial (study 008A) for patients with poorly managed schizophrenia in March 2024, which could represent another significant catalyst for investor attention.