In today’s briefing:
- Broadcom’s AI-Driven Growth Signals Upside Amid Stock Split Surges
- Bank Rakyat Indonesia (BBRI IJ) – Special Mention on the Turn
- Ecocare Indo Pasifik (HYGN IJ) – Hygiene Is a Secular Growth Story in Indonesia
- The Beat Ideas- Ramkrishna Forgings: A Strategic Growth Opportunity
- Tech Supply Chain Tracker (29-Jun-2024): Notebook shipment update May 2024
- Grab Holdings (GRAB US) – Facing Off the Competition
- Rajshree Polypack (RPPL): All Set for a Strong FY25
- Jyoti Resins and Adhesives- Forensic Analysis
- Mattel Inc.: Will The Focus On Entertainment Vertical Expansion Lead To A Jump In Revenues? – Major Drivers
- RANI: GLP-2 Deal Announced
Broadcom’s AI-Driven Growth Signals Upside Amid Stock Split Surges
- Broadcom’s Strong Q2 Performance: Broadcom’s Q2 revenue surged 43% year-over-year to USD 12.5 billion, driven by AI demand and VMware contributions.
- Dominance in AI ASIC Market: Broadcom holds a 60% market share in AI-specific integrated circuits, serving major clients like Alphabet and Meta.
- Lead up to Stock Split Upside Potential: Mega caps have seen an average 17% outperformance relative to S&P 500 from announcement to actual stock split, signaling sharp upside for Broadcom.
Bank Rakyat Indonesia (BBRI IJ) – Special Mention on the Turn
- Bank Rakyat Indonesia (BBRI IJ) have seen a significant correction on the back of concerns over credit quality, as provisions increased in 1Q2024, the bank addressed its problem micro-loans
- The bank is addressing these loans with some further provisions likely over the coming quarter but special mention loans should plateau in July signifying a turn.
- Bank Rakyat Indonesia will slow micro-lending and grow corporate loans this year to address the cost of credit. Profits will likely be flat and dividend payout up. Valuations are attractive.
Ecocare Indo Pasifik (HYGN IJ) – Hygiene Is a Secular Growth Story in Indonesia
- Recently listed Ecocare Indo Pasifik (HYGN IJ) is a small-cap with significant potential as a leader in hygiene services in Indonesia, which is a segment with a secular growth story.
- The company operates a rental model which means recurrent revenues with a high retention rate and annual price increases in a market with high barriers to entry.
- Ecocare Indo Pasifik (HYGN IJ) has entered the pest control market with services that can be offered to its existing 13,000 corporate customers, with cleaning services as an additional add-on.
The Beat Ideas- Ramkrishna Forgings: A Strategic Growth Opportunity
- Rising exports, as it has higher margins and Growth in Non-Auto sectors
- Acquisition of ACIL, JMT auto, TSUYO, and Multitech Auto will drive revenue
- Reducing dependency on a single product or categories and single customer
Tech Supply Chain Tracker (29-Jun-2024): Notebook shipment update May 2024
- South Korean battery makers stand to benefit from Tesla’s production issues with 46800 cells, boosting profitability in May 2024.
- STMicro and Panasonic Cycle Tech team up to introduce AI technology in e-bikes, making safety enhancements more affordable and accessible.
- Axelera AI secures US$68 million for global expansion in AI, recognizing computing as the new currency and focusing on growth in the tech industry.
Grab Holdings (GRAB US) – Facing Off the Competition
- Grab Holdings (GRAB US) continues to face off the competition with product-led initiatives which continue to gain traction, improving retention rates, and increasing user spend and frequency.
- Competition from new players in Singapore is evident but given Grab’s market position, which allows it to virtually guarantee driver’s daily income, whilst competition often affects smaller players more.
- Grab Holdings (GRAB US) continues to reinvest excess margins in growth but the real kicker will come next year once new product initiatives fully take hold.
Rajshree Polypack (RPPL): All Set for a Strong FY25
- RPPL executed well in FY24 with sales volume growth at 18% YoY. However, sudden and significant contraction in raw material prices dampened FY24 sales value growth to just 9% YoY.
- Exports sustained its quarterly run-rate of INR 10cr+ in Q4FY24, resulting in FY24 aggregate exports sales at INR 42cr. Exports contributed 15% of revenues in FY24 vs 5% in FY23.
- RPPL is also making good progress with its new initiatives. Its Olive Ecopak venture began commercial production in Mar 2024. Its injection molding segment is also scaling up well.
Jyoti Resins and Adhesives- Forensic Analysis
- Jyoti Resins and Adhesives (JRA IN) engages in manufacturing of synthetic wood adhesives under ‘Euro’ brand and claims to be the second largest player in its respective market.
- While on ground, Euro has gained good traction and has received positive feedbacks, there are however several takeaways noticed on the forensic end.
- These include Lack of clarity on revenue figures, low FA base, lack of disclosures of important accounting policies such as leases and customer rewards, etc.
Mattel Inc.: Will The Focus On Entertainment Vertical Expansion Lead To A Jump In Revenues? – Major Drivers
- Mattel Inc.’s first quarter 2024 financial results reflected a mixed performance, demonstrating resilience in some areas while facing challenges in others.
- The company reported a slight decline in net sales, down 1% both as reported and in constant currency, totaling $810 million for the quarter.
- Despite the dip in sales, Mattel showed considerable strength in profitability metrics.
RANI: GLP-2 Deal Announced
- Rani is a clinical-stage biotherapeutics company developing the ingestible robotic RaniPill (RP) that enables oral delivery of biologics & other large molecules.
- Its pipeline features clinical assets RT-102 (teriparatide for osteoporosis) & RT-111 (ustekinumab for psoriasis).
- Both programs have completed Ph1 trials characterizing safety tolerability & pharmaco-kinetics.
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