In today’s briefing:
- Li Auto (LI US): 1Q24, A List of Bad News
- Tech Supply Chain Tracker (21-May-2024): EVs and smart driving tech hit by Chinese car market price war.
- Sumitomo Metal Mining – A Shiny Mix of Gold, Copper and Nickel
- 2024 High Conviction Update: Asahi Intecc (7747 JP)- Q3FY24 Margins Take Hit; Tepid Q4 Expected
- Shakey’s Pizza (PIZZA PM) Q1 FY24 Concall: Margin Recovery in H2 FY24
- Mandarin Oriental: Don’t Lose Money
- GLOBALFOUNDRIES Inc.: Government Funding Partnership & 3 Critical Growth Drivers
- Wynn Resorts: Macau Operations
- Henry Schein Inc.: A Tale Of An Improving Market Position with New Products – Major Drivers
- Ricegrowers Ltd – Ample rice encourages lower plantings
Li Auto (LI US): 1Q24, A List of Bad News
- Operating profit turned negative in 1Q24 compared to 1Q23 due to the price war and the failure of new model.
- The company disappeared from the industry top-10 list of sales volume and revenue growth slowed down to zero in April.
- All cross-sectional comparisons suggest a Sell rating for the stock.
Tech Supply Chain Tracker (21-May-2024): EVs and smart driving tech hit by Chinese car market price war.
- EVs and smart driving systems in China’s car market impacted by price competition, leading to changes in industry dynamics.
- Blue carbon uncertainties could hinder progress towards achieving net-zero goals, says scientist, highlighting need for further research.
- Indian solar firm reducing dependence on Chinese imports for solar components to enhance self-sufficiency, aiming for greater control over supply chain.
Sumitomo Metal Mining – A Shiny Mix of Gold, Copper and Nickel
- Company Forecasts extremely conservative at current and expected metal prices
- Scarcity Value for a liquid, large-cap gold miner in Japan
- Balance Sheet will allow future share buybacks and dividend in the harvesting phase
2024 High Conviction Update: Asahi Intecc (7747 JP)- Q3FY24 Margins Take Hit; Tepid Q4 Expected
- In Q3FY24, Asahi Intecc (7747 JP) reported 8% YoY increase in revenue to ¥26B, ahead of estimate of ¥24B, mainly driven by the exchange rate impact of higher foreign currencies.
- Higher SG&A expenses impacted the profitability. Q3FY24 operating profit margin declined to 23.3% from 26.6% in Q3FY23, while net profit margin decreased to 16.0% from 18.5% during the same time.
- In Q4FY24, revenue is expected to decline 3% YoY to ¥19.6B. Operating and net profits are anticipated to plunge 74% and 26%, YoY to ¥417M and ¥832M, respectively.
Shakey’s Pizza (PIZZA PM) Q1 FY24 Concall: Margin Recovery in H2 FY24
- Shakey’s Pizza (PIZZA PM) reported Q1 FY24 systemwide sales up 15% YoY, but profits down by 15% YoY due to margin compression owing to higher opex costs.
- Management stuck to its mid-teens YoY revenue/profit growth guidance, citing that margin expansion will happen in the latter half of the year due to its visibility on costs.
- Trading at 13x FY24e PE, with a long runway for growth owing to the success in expanding Potato Corner, we believe the company can be a multi-bagger.
Mandarin Oriental: Don’t Lose Money
Mandarin owns the One Causeway Bay precinct which is likely worth more than the company’s current Enterprise Value ($2.4b) having recieved an offer of $3.8b for the site in 2017.
For those unfamiliar, this site is being massively re-developed into retail and office- not a hotel as might be expected given the company.
Mandarin is transitioning to a capital light hotel management model by selling its owned hotels and maintaining management contracts with the purchasers.
GLOBALFOUNDRIES Inc.: Government Funding Partnership & 3 Critical Growth Drivers
- GlobalFoundries Inc. has presented its first quarterly financial results for the fiscal year of 2024.
- Despite facing some challenges, the outcomes have exceeded the guidance ranges indicated in the firm’s fourth-quarter earnings call.
- The industry is showing signs of emerging from a period of inventory correction and uncertainty due to ongoing macroeconomic and geopolitical issues.
Wynn Resorts: Macau Operations
- The first quarter of 2024 marked a period of continued momentum for Wynn Resorts.
- The company’s earnings call transcript highlighted several significant developments, representing positive and negative factors that could be relevant for potential investors.
- Starting on the bright side, Wynn Resorts reported an all-time record property EBITDAR of $647 million during Q1 2024, owing to the company’s solid team delivering five-star service and unique experiences to their guests.
Henry Schein Inc.: A Tale Of An Improving Market Position with New Products – Major Drivers
- Henry Schein Inc, the leading global healthcare solutions provider, recently reported its results for the first quarter of 2024.
- The company reported solid earnings driven by gross profit and gross margin expansion as it recovers from last quarter’s cyber-incident.
- It’s worth noting that even with the cyber incident, Henry Schein marked an improvement in its merchandise sales growth.
Ricegrowers Ltd – Ample rice encourages lower plantings
- Ricegrowers Limited, trading as SunRice (ASX:SGLLV), has updated rice growers on paddy prices for CY23 and CY24, and more importantly provided planting guidance for CY25.
- Despite additional US supply and continued shipping disruptions, the lower end of the CY23 paddy price range (sold from FY24) has been increased $10/tonne to $425/tonne.
- The CY24 price range is unchanged at $370 to $430/tonne given the above uncertainties.
💡 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
