In today’s briefing:
- Japan Post Bank – It’s like a Closed End Mutual Fund More Than Ever
- [Tencent (700 HK, BUY, TP HK$450) TP Change]: Market Finally Starting to Recognize Tencent’s Value
- Eoflow: Financing Requirements, Changing Shareholding Structure, and the Next Steps
- Tech Supply Chain Tracker (18-May-2024): AI PC term will be obsolete soon, tech titans predict at pre-Computex event.
- JD.com (9618 HK): 1Q24 Results On Track
- KPIT: Stellar Growth Continues
- LIC Housing Finance (LICHF): Back on Track | All Set for a Strong FY25
- Expedia Group: Advancements in GenAI and Personalized Travel Experiences! – Major Drivers
- WestRock Company: Mill Closure
- SK Biopharmaceuticals (326030 KS): Resumption of US Sales Growth Raises Hope for Annual Profit
Japan Post Bank – It’s like a Closed End Mutual Fund More Than Ever
- Japan Post Bank (7182 JP) saw its net profit surge from non-recurring gains, which was from the sale of stocks.
- The company’s cost of funds worsened more than the improvement in its yields, and we believe this remains an issue related to hedging costs.
- Unrealized gains on foreign bonds remains significantly higher now than a year ago and this may again be the driver for earnings, but still with very low ROA.
[Tencent (700 HK, BUY, TP HK$450) TP Change]: Market Finally Starting to Recognize Tencent’s Value
- Tencent reported C1Q24 revenue, IFRS operating profit, and IFRS net income in-line, 9.1%, 26% vs. our estimates and in-line, 16%, 21% vs. consensus;
- Game revenues were below our expectations while advertising was above, leading to a gross margin beat of 2.73ppt, powered by video account and AI.
- We raised our TP to HK$450 to reflect the shift to better-margin revenue mix and upcoming revenue acceleration.
Eoflow: Financing Requirements, Changing Shareholding Structure, and the Next Steps
- In this insight, we discuss the additional financing requirements, changed shareholding structure, and the next steps for Eoflow.
- Eoflow is one of the best performing stocks in the Korean stock market in the past one month as its shares have soared 249% in this period.
- The details of the oral argument (Insulet vs Eoflow) at the U.S. Appellate Court suggest that the U.S. Appellate Court may rule in favor of Eoflow.
Tech Supply Chain Tracker (18-May-2024): AI PC term will be obsolete soon, tech titans predict at pre-Computex event.
- Tech titans foresee the obsolescence of AI PC by Computex 2024, sparking anticipation for new technological advancements.
- Disney and Warner’s collaboration in the streaming market introduces fresh competition, shaking up the industry landscape.
- ASML’s thriving in the Angstrom Era credits its success to relentless innovation and adaptability within the semiconductor sector.
JD.com (9618 HK): 1Q24 Results On Track
- JD.com (9618 HK) announced a set of in-line results for 1Q24. Sales growth was 7% yoy, in-line with my 1Q24 preview.
- Operating profit margin for the core JD retail business declined by 0.5ppt yoy to 4.1%, which is also in-line with my preview.
- The positive surprise was a big reduction in losses in the JD logistics business, which brought the overall non-GAAP net profit growth to 17% yoy for 1Q24.
KPIT: Stellar Growth Continues
- KPIT reported a strong Q4FY24 led by 5.1% QoQ revenue growth in constant currency (CC) terms. EBITDA margin came in better than expected at 20.7%.
- Overall, in line with our projection, KPIT even beat its upgraded guidance by posting YoY revenue growth of 39%+ in CC terms vs 37%+ guided.
- KPIT has guided for a strong FY25 with revenue guidance of 18-22% in CC terms and EBITDA margin of 20.5%+.
LIC Housing Finance (LICHF): Back on Track | All Set for a Strong FY25
- LICHF faced some teething issues with technology during past 1Y due to which growth and reported asset quality had been subdued. However, with strong Q4FY24, LICHF is back on track.
- LICHF reported strong growth in disbursements. Q4FY24 disbursements were INR 18200cr+, a growth of 20%+ QoQ. NIM came in higher than expected at 3.15%, despite spike in bond yields.
- Asset quality improved significantly with Stage 3 assets declining to 3.31% vs 4.26% QoQ and Stage 2 assets declining to 4.20% vs 4.54% QoQ.
Expedia Group: Advancements in GenAI and Personalized Travel Experiences! – Major Drivers
- Expedia Group’s Q1 2024 performance reflected a primarily healthy market environment, but growth differed according to geographical area and product line.
- Notably, North America had the slowest growth compared to other major international markets.
- Additionally, despite meeting projections on revenue and EBITDA, Expedia experienced weaker gross bookings, with its Vrbo business producing slower recovery than anticipated.
WestRock Company: Mill Closure
- WestRock Company, in the 3rd Fiscal Quarter 2023, posted a net sales of $5.1 billion, with an adjusted EBITDA of $802 million, higher than expected due to strong execution, productivity gains, and moderating input costs.
- CEO David Sewell attributed the strong results to the firm’s resilience and the hard work of its team, even as they faced comparisons with record results from the prior year quarter.
- However, certain challenges were also observed.
SK Biopharmaceuticals (326030 KS): Resumption of US Sales Growth Raises Hope for Annual Profit
- In 1Q24, SK Biopharmaceuticals (326030 KS) posted Xcopri U.S. sales of KRW90.9B, up 69% YoY and 17% QoQ. The company remains confident to meet annual sales guidance of KRW390–416B.
- 1Q24 operating profit reached KRW10B from an operating loss of KRW23B in 1Q23. The company aims to achieve profitability throughout 2024.
- The company is seeking a second product to strengthen its U.S. and global business. Xcopri also has potential for indication expansion in near future.
💡 Before it’s here, it’s on Smartkarma
Sign Up for Free
The Smartkarma Preview Pass is your entry to the Independent Investment Research Network
- ✓ Unlimited Research Summaries
- ✓ Personalised Alerts
- ✓ Custom Watchlists
- ✓ Company Data and News
- ✓ Events & Webinars
