In today’s briefing:
- Cover Corp (TYO 5253) – High Growth Opportunity in the Expanding VTuber Sector
- Taiwan Tech Weekly: Declines With Nvidia; Taiwan’s Vietnam Shift Continues; UMC’s Outlook Improves
- HCG: Emerging Centers Are Scaling Up Well
- India Channel Insight | Eureka Forbes (EUREKAFO IN) | Ignoring Offline Channel
- RPSG Ventures: FMCG Business Is Scaling Up Well
- Tech Supply Chain Tracker (26-Jun-2024): Taiwan uses AI for medical advancements.
- Micron Earnings – What to Expect
- Nesco: Strong Performance Continues
- ZJLD Group (6979 HK): AGM Takeaway + Thoughts On The Chinese Liquor Industry
- Pharmaessentia Corp (6446 TT): Starts 2024 on Strong Note; Reports First Operating Profit in 1Q24
Cover Corp (TYO 5253) – High Growth Opportunity in the Expanding VTuber Sector
- Cover Corp, a leading talent management company in the rapidly growing VTuber industry.
- They’re considered the most prestigious agency and should attract the best talent.
- Superior Underlying Performance Metrics: Cover boasts superior key performance indicators (KPIs) compared to their main competitor Anycolor, including higher engagement metrics like subscribers, hours watched, and viewership.
Taiwan Tech Weekly: Declines With Nvidia; Taiwan’s Vietnam Shift Continues; UMC’s Outlook Improves
- Taiwan Shares Fall With Nvidia… SK Hynix HBM DRAM with Global Unichip? Taiwan’s Vietnam Shift Continues… Broadcom Developing an AI Chip with Bytedance
- TechChain Insights: Call with Elan Micro; AI PC Significant Uptake 4Q24/1H25; Supply Chain Preparing
- UMC (2303.TT; UMC.US): The Outlook for 3Q24 Has Reached a Slightly Upside QoQ.
HCG: Emerging Centers Are Scaling Up Well
- With emerging centers scaling up and established centers growing steadily, HCG’s profitability is growing strong. HCG’s Q4FY24 PBT grew to INR 28cr vs INR 13cr YoY and INR 3cr QoQ.
- With the patient mix improving for emerging centers with growing vintage, ARPOB for emerging centers has crossed INR 40000, a rise of 12.2% YoY.
- We estimate that by FY26, HCG’s PAT could exceed INR 260cr, leading us to value HCG at a market cap of around INR 10000cr at 38x+ FY26 exit P/E.
India Channel Insight | Eureka Forbes (EUREKAFO IN) | Ignoring Offline Channel
- We interact with a few business partners of Eureka Forbes (EUREKAFO IN) to understand the latest on-ground business developments.
- Key areas that are probed include feedback on product quality and innovation, attachment rates for AMC services, key drivers of volume, improvements in service quality, and product premiumization.
- Based on our interactions, it is quite evident that the company is not interested in developing its offline sales channels, i.e., the franchises.
RPSG Ventures: FMCG Business Is Scaling Up Well
- The FMCG business has been now sustaining an annualized revenue run-rate of INR 500cr+. Q4FY24 FMCG revenue was INR 135cr+, similar to Q3FY24 and a growth of 30%+ YoY.
- Firstsource Solutions (“Firstsource”) , the BPO business, has been sustaining its recovery after a lull period for two years. Its revenue grew 4.2% QoQ and 4.5% YoY in constant currency.
- The Sports business revenue continue to be dominated by IPL. Having played three seasons now, RPSGV’s IPL franchise, Lucknow Super Giants (LSG), has made its place and holds significant value.
Tech Supply Chain Tracker (26-Jun-2024): Taiwan uses AI for medical advancements.
- Taiwan is utilizing AI supercomputers for medical and life science innovations, showcasing a commitment to technological advancement in those fields.
- Wistron is making a significant investment of $24.5M for a new factory in Vietnam, indicating a desire to expand production capabilities in the region for potential economic growth.
- Samsung is poised to overtake Apple in Taiwan’s mobile market by June, highlighting the company’s competitive edge and potential dominance in the industry.
Micron Earnings – What to Expect
- Expect Micron to report strength in AI, highlight the company’s HBM efforts, and quote McKinsey’s trillion-dollar forecast in their earnings call tomorrow
- Although Nvidia’s growth has really helped the DRAM market, along with 2023 CapEx cuts, there are important concerns of double-ordering which could lead to a collapse soon
- Semiconductor market revenues have leveled off since December 2023, hinting a return to more normal growth for the rest of the year
Nesco: Strong Performance Continues
- Exceeding our upgraded FY24 PAT estimate of INR 350cr+, Nesco reported PAT of INR 363cr, led by Q4Y24 PAT of INR 105cr, a rise of 24% YoY and 12%+ QoQ.
- Q4FY24 revenues grew 6%+ QoQ and 20%+ YoY. Growth was driven by BEC where revenues grew 6% QoQ and 31%+ YoY. IT Park revenue grew 2% QoQ and 13% YoY.
- For FY25, we estimate that Nesco could post a PAT of INR 420cr+. Per our FY25 exit P/E of 26x+, Nesco could be valued at around INR 11000cr.
ZJLD Group (6979 HK): AGM Takeaway + Thoughts On The Chinese Liquor Industry
- ZJLD Group (6979 HK) held its annual general meeting last Friday (June 21).
- The share price is down 21% in the last 30 days, mainly due to a major sector pullback.
- I continue to expect 20% net profit growth for the company in 2024E. The company is trading at 13x 2024E PE which I believe is attractive.
Pharmaessentia Corp (6446 TT): Starts 2024 on Strong Note; Reports First Operating Profit in 1Q24
- Pharmaessentia Corp (6446 TT) reported strong 1Q24 result, with increasing revenue and declining operating expenses. Revenue increased 86% YoY, gross margin (88%) improved, and operating expenses declined 3% YoY.
- The company achieved operating profit (NT$18M) for the first time in 1Q24. Net profit reached NT$330M in 1Q24, versus net profit of NT$315M for 1H23.
- Approval of Besremi in additional countries, especially China, data readouts from late-stage ET trials, and accelerating revenue as well as improving profitability remain the near-term catalysts.
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