In today’s briefing:
- Intel: A Graphic Novel Of A Train Wreck
- BYD (1211 HK): Quick Note – Preparing for Price War in 2025
- The Death of Intel: When Boards Fail
- Mr DIY Indonesia IPO – Prefer Aspirasi Hidup Indonesia (ACES IJ)
- Malaysian Banks Screen; RHB Bank Upgraded to a Buy, Alongside Existing Buy on CIMB
- Tech Supply Chain Tracker (07-Dec-2024): Apple Intelligence targets China despite Baidu challenges
- Tesla Shortens Supplier Payment Terms to 90 Days Through Cost-Saving Innovations
- What’s New(s) in Amsterdam – 6 December (Shell | InPost | BAM Group | Black Friday update)
- ADX Energy (ASX: ADX): Reflections on Welchau
- Medical Data Vision Co., Ltd (4971 JP): Research Update
Intel: A Graphic Novel Of A Train Wreck
- Steady loss of market share to AMD in x86 PC and Server. Single design win for the GPU Max, overall no AI or Accelerator roadmap.
- Steady deterioration of the financials. Collapse in NON-GAAP Operating Profits, leading to negative Free Cash Flow, leading to increasing Net Debt.
- Most damaging, IMO was during 3Q24 conference call (1st Nov 2024) when the CFO David Zinsner said: don’t expect a recovery before 2026. CEO Gelsinger was gone 1 month later.
BYD (1211 HK): Quick Note – Preparing for Price War in 2025
- BYD’ deliveries continued to grow strongly by 68% in November.
- BYD required its suppliers to reduce prices by 10% for 2025.
- We believe BYD will continue the price war in 2025.
The Death of Intel: When Boards Fail
- If you haven’t heard the news, Pat Gelsinger is “retiring.” The reality is this was not a retirement but a firing of Pat.
- His brief stint of 1386 days was surprising because not only was he the most technically competent CEO of the last few bad apples at Intel, but he was also among the shortest.
- Pat has by no means been perfect, and the conference at UBS kind of showed the frustrations that the board likely had with Pat.
Mr DIY Indonesia IPO – Prefer Aspirasi Hidup Indonesia (ACES IJ)
- Home improvements player PT Daya Intiguna Yasa (Mr DIY Indonesia) completed the book building for its IPO this week for its Jakarta listing where it seeks to raise US$296m.
- Mr DIY has seen a rapid rollout of outlets with over 900 stores across Indonesia and SSSG over the last two years of 30%-40% and the company is already profitable.
- Mr DIY has a 25% market share of the home improvements segment focusing on the mass market with affordable products. Prefer Aspirasi Hidup Indonesia as a proxy for this space.
Malaysian Banks Screen; RHB Bank Upgraded to a Buy, Alongside Existing Buy on CIMB
- RHB Bank is our Malaysian bank top pick, with its real turnaround potential for returns; CIMB remains a buy but is less compelling than RHB given its marked re-rating year-to-date
- Our new buy RHB Bank is stand-out value versus its Malaysian peers and it is improving returns from low levels; its main delinquency challenges are concentrated in small overseas portfolios
- We reiterate our buy on CIMB; management continues to drive credit quality with cost of risk improvements, and we see potential for operating efficiency gains, combined with its attractive valuations
Tech Supply Chain Tracker (07-Dec-2024): Apple Intelligence targets China despite Baidu challenges
- Apple’s Intelligence service is working towards a launch in China, but is facing challenges with integrating Baidu.
- NXP may be investing a significant amount of money in Karnataka, India.
- Intel’s interim leadership team is bringing together new ideas and industry experience for a promising future, while South Korea and Japan work to mitigate US export controls on HBM.
Tesla Shortens Supplier Payment Terms to 90 Days Through Cost-Saving Innovations
- Tesla has shortened its supplier payment cycle to about 90 days in 2024, continuing to outpace rivals in financial efficiency and supplier relations.
- Tesla’s Shanghai factory, where 95% of parts are sourced locally, reflects the company’s deep integration with China’s supply chain.
- The move highlights Tesla’s unique approach to balancing cost-cutting and supplier support in an industry under strain from intense competition, price wars and shifting dynamics between automakers and parts providers.
What’s New(s) in Amsterdam – 6 December (Shell | InPost | BAM Group | Black Friday update)
- In this edition: • Shell | gas joint venture with Equinor in the UK • InPost | Yodel hit by festive capacity crisis • BAM Group | awarded contracts for HS2 in the UK • Black Friday update | Cyber Monday was the busiest day for the parcel logistics providers
ADX Energy (ASX: ADX): Reflections on Welchau
- • Three intervals in the Reifling formation (1324 m – 1340 m, 1346 m – 1351 m and 1358 m -1382 m MD) were perforated but only limited inflow was determined.
- No fluid could reach the surface after the well was shut in.
- • Sampling of the well indicated only completion brine (not reservoir fluid) and fine solid particles of unknown origin.
Medical Data Vision Co., Ltd (4971 JP): Research Update
- MDV revised down its full-year FY24 guidance (discussed in more details on p.5) given the Q3 result [Q1~Q3 gross profit [GP] of ¥3,055mil (-12.8% YoY), operating loss of -¥140mil (vs FY23 Q3 OP of ¥1,111mil) on sales of ¥4,125mil (-8.1% YoY)], due to (1) the delay to the onboarding of the firm’s cloud-based health check system solution Alpha Salus as the debugging process continued through to September, and (2) a delay in mobilising potential users of the new content (no-contact vital sensing for cats) for MDV’s personal health management app Karteco, as the planned large-scale advertising campaign was pushed back following a delay in the launch of the content.
- The firm is guiding for FY24 annual dividend of ¥6.5/share (unchanged from FY23) and generates a dividend pay-out ratio of 138.0% based on the revised FY24 EPS forecast of ¥4.71.
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