Daily Brief Equity Bottom-Up: BYD Electronics (285 HK): Earnings Bottoming Out in 4Q24 and more

• BYD Electronics benefits from two key growth drivers in 2025: a cyclical upswing in its legacy EMS business, and sustained strong growth in auto electronics and AI data cooling devices.
• Earnings momentum is expected to pick up in 4Q, with key segments entering an earning upcycle. Expect bottomline growth to accelerate to 45% in 2025 from 9% in 2024.
• The 13x 2025 PE multiple does not capture BYDE’s transformation from a low-end, cyclical EMS to a leading high-precision manufacturer with a more diverse and balanced set of growth drivers.

• Infrastructure is crucial for the transition to a low carbon economy and the advancement of the economy, requiring urgent repairs to aging infrastructure such as roads, bridges, and airports.
• Private capital plays a key role in investing in infrastructure assets, with a focus on operational improvements and creating value for investors.
• The growing demand for investment in infrastructure, especially in the areas of AI and data centers, presents significant opportunities for private sector funding and operational enhancements.

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• Alphabet (NASDAQ: GOOGL) has been consistently undervalued in the market despite strong revenue and earnings growth
• The company’s average forward P/E multiple over the past 15+ years has been just 21.7x, even though it has consistently outperformed the S&P 500
• Currently trading at a discounted valuation of around 17x 2025E EPS, Alphabet has been mispriced for most of its 20-year history

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• The paint industry experienced significant challenges in Q2FY24, with most companies reporting subdued performance.
• Asian Paints reported typical fluctuations in market share of 1-1.5%, while Berger Paints and AkzoNobel both reported gains in their respective market positions.
• Asian Paints’ current market share reduction and increased competitive pressure stem from its size and the slowing macro environment.

• Following on from our previous note, we now identify inexpensive consistent compounders from the small and mid-cap universe in Asia ($1 – $5 bn in market capitalization).
• 28 stocks are on our list – 18 from onshore China, 5 from India, 2 each from Japan and Taiwan and 1 from Hong Kong.
• Industrials, technology, healthcare and financials dominate the list. The list of large and mid-cap compounders shall largely form the backbone of our top stock choices for 2025.

• UiPath reported its financial results for the third quarter of fiscal 2025, surpassing its guidance on all crucial financial metrics.
• The company concluded the quarter with an Annual Recurring Revenue (ARR) of $1.607 billion, marking a 17% increase driven by a net new ARR of $56 million.
• Quarterly revenue reached $355 million, and the company achieved a non-GAAP operating income of $50 million.

• A conversation with Indosat (ISAT IJ) managment revealed a stabilisation in the pricing environment following Telkomsel’s recent data price hikes and a more positive outlook for 2025 with market consolidation. 
• 2025 will see the four-player market move to a three-player market which should be positive for data pricing following the XL/FREN merger, with ex-Java expansion also potentially boosting ISAT ARPUs. 
• Indosat‘s move into the AI sphere through its exclusivity in providing NVIDIA Corp‘s GPUs in Indonesia should be an additional growth driver in 2025. Valuation remains appealing.

• Exhibiting a robust growth profile – Solid topline growth and a marked improvement in profitability YoY were the key highlights of Q1 FY7/24 results, demonstrating that INTLOOP’s growth strategy encompassing M&A and business investment is beginning to yield positive outcomes.
• Sales growth of 63.3% YoY was driven primarily by the acquisitive impact of DICS Holdings, and margin enhancement YoY was said to be driven by obtaining high-margin projects, which we believe also stems from raised pricing and improving consultant productivity.
• Management continues to invest in the business primarily via recruitment and building business alliances that should strengthen its network and selling activities.

• Signet Jewelers’ third quarter fiscal 2025 earnings report presents a nuanced outlook on the company’s current standing and its future trajectory.
• The company has demonstrated a mixed performance, showing improvements in certain areas while encountering challenges in others.
• One of the notable positives from the report is Signet’s continued sales momentum, as indicated by the sixth consecutive quarter of sequential same-store sales improvement, despite an overall decline of 0.7% in same store sales.

• Coinbase has managed to weather the crypto winter well by reporting net profits consecutively for 4 quarters.
• Its share price has shot up recently as the whole crypto market became exuberant, thanks to Trump’s re-election, but still below the IPO debut price of $381.
• Our thesis remains the same as when the stock was trading as low as ~$68 in May 2022: Coinbase to become an indispensable platform for Web 3, esp. first-time users.