In today’s briefing:
- Asics (7936) | Footwear Fallout as Nike’s Q2 Sends Sector Shockwaves
- 2024 High Conviction: Apple’s AI Foray & Services to Power Its Journey to USD 4 Trillion Valuation
- China Consumption Weekly (25 Dec 2023): Tencent, NetEase, NIO, Xpeng, Alibaba, Meituan, Douyin
- Quantum Solutions (2338 JP): Look Again at Small Cap Play on AI Servers and Web-3.0 Gaming
- International Housewares Retail Company Limited (1373 HK): H1 FY24 Off To a Bad Start
Asics (7936) | Footwear Fallout as Nike’s Q2 Sends Sector Shockwaves
- Nike’s Q2 results lead to a 12% drop in its shares, affecting sector peers Onon, Skechers, and Asics with significant declines.
- Challenging trading conditions in China and Europe, coupled with a subdued digital traffic outlook from Nike, raise broader concerns for the sector.
- Asics stock declines 20% post-Nike’s fall, presenting an attractive buying opportunity with an estimated 20% upside, positioning Asics as a cost-effective play in the global performance running market.
2024 High Conviction: Apple’s AI Foray & Services to Power Its Journey to USD 4 Trillion Valuation
- Despite being a hated stock among the Super Sevens, Apple shares are up >51% YTD this year. Apple has had little to claim for within captivating AI hype.
- Apple is not a first mover. Its reputation is of a late comer. But its superior products with mind bending experiences blows competition out of the water.
- Outperformance of iPhone 15, deepening services penetration, and roll out of AI-features will propel Apple to a USD 4 trillion market cap in 2024.
China Consumption Weekly (25 Dec 2023): Tencent, NetEase, NIO, Xpeng, Alibaba, Meituan, Douyin
- Tencent and NetEase’s stock prices plunged after the release of the new law about online game.
- China Passenger Car Association expects NEV will grow by 37% for 2023.
- NIO got US2.2 billion investment from CYVN Holdings based in Abu Dahbi.
Quantum Solutions (2338 JP): Look Again at Small Cap Play on AI Servers and Web-3.0 Gaming
- Quantum Solutions has given up 63% of its recent gain but has more NVIDIA GPU related orders in the pipeline. Keep an eye on the stock and the news flow.
- The recent upward revision to sales and profit guidance has been followed by the announcement of a capital and business tie-up with Hajime Tabata’s JP Games.
- The addition of Web-3.0 gaming to distribution of AI servers and Arm-based edge computing hardware could change the nature of the investment.
International Housewares Retail Company Limited (1373 HK): H1 FY24 Off To a Bad Start
- H1 FY24 (May-Oct 2023) was off to a sluggish start for the company, with a 4.7%/35% decline in revenue/adjusted NPAT.
- The company cited soft demand, loss of business days due to inclement weather, one-offs in relocation or warehouses to efficient locations, and increased staff costs for poor profits.
- Post the correction, the stock trades at a trailing PE of 11x and dividend yield of 8%, but we will have to wait further out as business conditions are worse.
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