In today’s briefing:
- Cafe De Coral (341 HK): Immediate Upside
- TSMC Surges As April Revenue Soars 60% YoY
- Shiseido (4911 JP): 1Q24 Results Beat; Recovery On Track
- China Consumption Weekly (13 May 2024): Guangzhou Auto, NIO, CALT, Kuaishou, Trip.com, Seres
- Asustek: Margin Beat, Guides More Upside; Qualcomm for AI PCs; Why Asus Confident in AI PC Up-Cycle
- Tech Supply Chain Tracker (14-May-2024): ASE to speed up 2H24 sales growth.
- Screen Holdings (7735 JP): Guiding for Lower Profits in H2
- TSLA: Chinese EV Tariffs?＄＄＄
- UI: Signs of a Rebound
- GoTo Gojek Tokopedia (GOTO IJ) – Metamorphosis
Cafe De Coral (341 HK): Immediate Upside
- Cafe De Coral Holdings (341 HK) share price never really rebounded post COVID despite its operating numbers gradually improving.
- Haidilao International Holding (6862 HK) share price has rallied along with the Hang Seng Index (HSI INDEX) and Hang Seng China Enterprises Index (HSCEI INDEX) but not Cafe de Coral.
- Recent profit alert that, excluding pandemic subsidies, the group’s net profit will rise 470% YoY.
TSMC Surges As April Revenue Soars 60% YoY
- April revenue ~NT$236.02 billion, +20.9% MoM & + 59.6% YoY
- It was the company’s second highest monthly revenue ever, made all the more remarkable by the fact that it occurred during its seasonally low first half year
- Our April YoY Taiwan monthly revenue comps are flashing green across the board with just one exception, Globalwafers
Shiseido (4911 JP): 1Q24 Results Beat; Recovery On Track
- Shiseido Company (4911 JP) reported 1Q24 results last Friday. Core operating profit declined less than expected at -10% yoy, and exceeded the management’s target.
- The beat was driven by robust growth in Japan, Americas, and EMEA, while China steadily recovered. Overall sales growth was 4% yoy in the quarter.
- As a reminder, the investment thesis for Shiseido is twofold: a recovering China mainly due to one-off concerns (nuclear wastewater), and a margin recovery story in Japan.
China Consumption Weekly (13 May 2024): Guangzhou Auto, NIO, CALT, Kuaishou, Trip.com, Seres
- The new energy vehicle producers’ ranks changed a lot in April.
- GAC began to sell batteries to outside new energy vehicle producers.
- Kuaishou’s GMV (Gross Merchandise Value) increased by 420% YoY during the Labor Day.
Asustek: Margin Beat, Guides More Upside; Qualcomm for AI PCs; Why Asus Confident in AI PC Up-Cycle
- Asus’s 1Q24 earnings beat consensus by 46% thanks to major increase in operating margin driven by costs optimization. Adjusted Asus brand Op profit rose 227% YoY and 98% QoQ.
- Asus will host a major AI PC launch event May 21st, with additional AI PCs launched at Computex in Taiwan June 4th. Will feature Qualcomm Inc (QCOM US) Snapdragon processors.
- Asus confident in an PC upgrade cycle and has guided for sales to rise and margins to expand in the coming quarters. We maintain our Structural Long rating for Asus.
Tech Supply Chain Tracker (14-May-2024): ASE to speed up 2H24 sales growth.
- ASE plans to boost sales in the second half of 2024 with cutting-edge technology and innovative solutions. Introspect CEO discusses how their GDDR7 memory test system outperforms competitors, helping customers stay ahead of the curve.
- Taiwan’s space dreams face hurdles from regulations and geopolitics, hindering progress. N Chandrasekaran becomes chair of Tata Electronics, signaling entry into semiconductor industry. Indian GaN startup targets global expansion in telecom and EV markets for growth.
- Triton ignites Taiwan’s push for satellite self-sufficiency; Apple partnership speculation with a leading EV startup generates buzz. Lam Research seeks chipmaking tool partners in India to drive innovation and collaboration. #Apple #EVstartup #newsroundup
Screen Holdings (7735 JP): Guiding for Lower Profits in H2
- FY Mar-24 results were ahead of guidance, but management’s FY Mar-25 forecast has sales flat and profits down in the second half.
- The shares have dropped back 24% from their all-time high, bringing the forward P/E ratio down to 22X.
- China and foundry remain strong while North America and memory pick up. Guidance is probably conservative. Buy into the weakness.
TSLA: Chinese EV Tariffs?＄＄＄
- Takeaways: Biden plans to quadruple US/EU tariffs on Chinese EV imports.
- This will further defend TSLA’s domestic beachhead: 1) 50% EV market share in the USA (No. 2: Ford 7% ) + 2) huge headstart over domestic auto incumbents in assembly line processes (Gigapress) & high manufacturing concentration .
- Together, this should result in superior economies of scale which translates into lower unit costs — increasingly important in a commoditizing US EV sector.
UI: Signs of a Rebound
- UI reported fiscal third quarter (March) results in line with our revenue forecasts suggesting the business could be on the rebound after two years in a challenging environment
- The performance in the June quarter comes even though peers have been reporting a tough selling environment with extended sales process as customers took time to make their decision
- The increase in product availability did backfire in the quarter with Ubiquiti taking a charge for obsolete inventory. Nevertheless, Ubiquiti’s results show a business that is improving
GoTo Gojek Tokopedia (GOTO IJ) – Metamorphosis
- GoTo Gojek Tokopedia (GOTO IJ) booked an encouraging set of 1Q2024 results which provided a first look at the new structure, whereby suddenly e-commerce became cashflow positive for the company.
- The company booked strong headline growth with core GMV increasing by +32% YoY, despite incentive & product spending decreasing by -31% YoY, whilst adjusted EBITDA losses fell -89% YoY.
- GoTo will drive growth less through incentives and more through innovative products, increasing the user base, and focusing on retention through its subscription products, with fintech becoming increasingly important.
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