In today’s briefing:
- Astra Otoparts (AUTO IJ) – EVs, Modern Retail, and Medical Equipment
- Shopify Inc.: How Is The Management Executing Integration with Emerging Sales Channels! – Major Drivers
- BUY/SELL/HOLD: Hong Kong Stock Updates (NOVEMBER 29)
- Taiwan Semiconductor Industry Aggregate Analysis: Margins Challenged; Inventory Data Positive
- [Kanzhun Ltd. (BZ US, BUY, TP US$17) Target Price Change]: Mark Down C4Q24 and 2025 on Weak Demand
- Bank Rakyat Indonesia (BBRI IJ) – Ultra Attractive
- Memory Monitor: Decoupling Trade Long SK Hynix Vs. Short Nanya Tech
- Taiwan Dual-Listings Monitor: TSMC Spread Approaching Short Level; UMC Short Interest Soars Higher
- Inter Parfums Inc.: Expanding Brand Portfolio with New Launches To Change The Game! – Major Drivers
- Bajaj Finance (BAF): Mixed Q2 But Growth Remains Robust
Astra Otoparts (AUTO IJ) – EVs, Modern Retail, and Medical Equipment
- Astra Otoparts (AUTO IJ) looks set to see increasing contributions from its modern retail push, which will boost its trading business and should see margins improving over time.
- AUTO is pushing into both the EV component space and manufacturing public and residential EV charging equipment. It is also venturing into medical devices as local content becomes a requirement.
- AUTO has outperformed the auto market since the pandemic and looks set to continue to do so through new growth segments. Valuations attractive on 5.5x forward PER and 8% yield.
Shopify Inc.: How Is The Management Executing Integration with Emerging Sales Channels! – Major Drivers
- Shopify Inc. has reported a strong performance for the third quarter of 2024, showcasing significant growth and expansion across several facets of its business.
- The company’s gross merchandise volume (GMV) grew 24% for the quarter, marking the fifth consecutive quarter of GMV growth over 20%.
- This growth was attributed to increased same-store sales among existing merchants, growth in new merchants, and international expansion, particularly in Europe.
BUY/SELL/HOLD: Hong Kong Stock Updates (NOVEMBER 29)
- As Hong Kong market continues to consolidate, the consumer discretionary sector is leading in momentum and strength while the energy and materials sectors lag.
- Trip.com Group (9961 HK) , Trip.com (TCOM US) received BUY ratings after a strong 3Q24 announcement on revenue and earnings. China’s tourist numbers are projected to reach Pre-COVID levels soon.
- Yum China Holdings (9987 HK) , Yum China Holdings (YUMC US) received BUY ratings after initial success from its small store/franchising strategy. The company is actively returning capital to shareholders.
Taiwan Semiconductor Industry Aggregate Analysis: Margins Challenged; Inventory Data Positive
- Gross Margins Aggregate Data – Shows Taiwan Semiconductor Companies Under Pressure
- How TSMC and GlobalWafers show two very different margin environments; However everyone needs to manage rising energy costs into 2025E
- Aggregate Inventory Levels — Inventory Days Declining Trend is a Positive Sign
[Kanzhun Ltd. (BZ US, BUY, TP US$17) Target Price Change]: Mark Down C4Q24 and 2025 on Weak Demand
- Kanzhun, along with Kuaishou, Beike and PDD, are we call the “Macro Mauled Champions” (MMC). We suggest long term investors to accumulate;
- Weak industrial sector earnings in October bodes ill for manufacturing hiring into C4Q24 and we think may further extend to early 2025 recruiting season;
- We expect BZ to grow profit faster than revenues on cost savings, particularly on marketing and gain shares. We cut the TP from US$19 to US$17.
Bank Rakyat Indonesia (BBRI IJ) – Ultra Attractive
- Bank Rakyat Indonesia should have a stronger finish to the year with stable credit costs and continuing growth in micro recoveries driving fee income growth, with NIMs remaining stable
- Loan growth will increase in 4Q2024 but may see a slowdown in 2025 but the bank should see stable credit costs and a rebound in earnings with lower provisions.
- Foreign ownership and vaulations are back to 2015 lows apart from the pandemic at 2.1x PBV is also a 10-year ex-pandemic low of 1.8x, and trades on 9.6x PER.
Memory Monitor: Decoupling Trade Long SK Hynix Vs. Short Nanya Tech
- Memory Market Diverges: AI Demand Continues to Surges While Legacy Segments Struggle in November
- Diverging Demand Trends Highlight Market Decoupling — AI Driving HBM, Server DRAM, QLC NAND Demand
- Outlook for the Memory Market — Decoupling Trade: Long SK Hynix vs. Short Nanya Tech Trade
Taiwan Dual-Listings Monitor: TSMC Spread Approaching Short Level; UMC Short Interest Soars Higher
- TSMC: +20.4% Premium; ADR Premium is Approaching a Short Level
- UMC: +0.7% Premium; Short Interest Soars to New Two-Year Highs
- ASE: +4.2% Premium; ADR Headroom Falls to 100% Maxed Out
Inter Parfums Inc.: Expanding Brand Portfolio with New Launches To Change The Game! – Major Drivers
- Interparfums Inc.’s third quarter financial results for 2024 highlight several key aspects of their performance, including strengths and challenges in a fluctuating global market.
- On the positive side, the company reported its best third quarter in history, driven by robust sales across all major markets.
- North America, Western Europe, and Asia Pacific all saw double-digit sales growth, with North America up 12%, Western Europe 25%, and Asia Pacific 15%.
Bajaj Finance (BAF): Mixed Q2 But Growth Remains Robust
- Q2FY25 performance was mixed with good growth in AUM and volumes, however, loan losses were elevated. AUM growth came in at 29% YoY and 5.5%+ QoQ in Q2.
- Asset quality deteriorated led by retail and SME segments. GNPA worsened to 1.06% in Q2FY25 vs 0.86% QoQ. Credit cost has been around 2.1% vs 1.75%-1.85% guided.
- BAF successfully listed its housing finance subsidiary, BHFL, on Sep 16 2024. Its shareholding in BHFL is down to 88.75% from 100%.
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