Daily Brief Equity Bottom-Up: Li Ning (2331 HK):  Bearish Thesis Playing Out and more

• Li Ning (2331 HK) is trading down 18% today due to a bad 3Q23 operational date. 
• Retail sales grew by only mid-single-digit yoy, while same-store-sales recorded a mid-single-digit decline yoy. 
• Given the operational update, FY23 earnings should be revised down, to likely flat or low-single-digit growth.

• FSN E-Commerce Ventures (Nykaa) (NYKAA IN) seems to be facing problems in its core BPC segment. 
• Our casual LinkedIn browsing led us to an interesting post on the company and its practices that warrant attention.
• We have previously highlighted issues with the way the company has managed its Fashion Business, an attack on the BPC business could compound issues further.

• Although we are bullish on the Porsche story, we note a few relevant elements of discussion that could pose threats/hurdles/explain share price overhang
• Conflict of interest: Oliver Blume is both CEO of Porsche and VW. Can you be Porsche’s CEO just part-time?
• Once upon a time, Porsche had a great story to tell. What’s the new story?

• Bank Rakyat Indonesia’s numbers made for positive reading with loan growth coming through in productive areas, especially for Kupedes commercial micro-loans but also from its PNM and Pegadaian subsidiaries.
• The bank maintained its funding costs at highly competitive levels despite rising rates and time deposit growth with NIMs improving due to a better loan mix in micro.
• Bank Rakyat Indonesia (BBRI IJ) remains the most direct way to get exposure to greater financial inclusion and the underbanked in Indonesia. Valuations remain attractive with rising ROA and ROE. 

• Ocean Power Technologies entered a contract with WildAid and Caribbean Law Enforcement to provide a WAM-V 16 Uncrewed Surface Vessel (USV) equipped with an integrated quadcopter aerial drone that should help in protecting vital marine species and combat illegal, unreported, and unregulated (IUU) fishing activities in critical habitats.
• OPT and WildAid and Caribbean Law Enforcement are teaming up to use unmanned surface and aerial vehicles to identify, track, and gather information on people who are harming marine life and ecosystems through illegal activities
• Additionally, the company also received an additional volume order from Sulmara worth $1.6 million, a prominent player in offshore services, of WAMV 16 uncrewed surface vehicles (USVs), making this the largest single order of WAM-Vs to date.

• Carly Holdings Limited (ASX:CL8) operates a vehicle subscription business, which it launched in March 2019, leveraging existing operations, strategic relationships, and technology.
• Car subscription allows business and retail customers to pay a single monthly fee to access a car for 30 days or more and is an alternative to purchasing or financing a vehicle.
• Carly has attracted larger automotive industry businesses as shareholders, with a direct offering and services to support automotive manufacturers and dealers to generate revenue from car subscriptions. 

• ASE’s 3Q23 results came in in-line with analyst estimates, and showed gross margin ticking slightly higher QoQ.
• Semiconductor Assembly, Testing, and Manufacturing (ATM) capacity utilization remains low, in the mid-60’s percent.
• Management is cautiously optimistic about an improving industry environment into next year, however was more guarded than what we gauged from TSMC or UMC in their recent results.

• SHEN is expanding its network footprint with the acquisition of Horizon Telecom for $385 million in cash and stock.
• SHEN is purchasing Horizon for the network footprint and the sales ability to capture commercial customers compared to the majority of SHEN’s customers being residential
• The valuation becomes financially reasonable to understand when considering SHEN is paying approximately $51 thousand per fiber miles

Information Services Corporation (ISC) has a strong track record of proficiently acquiring and innovating registries and related information services to benefit citizens and businesses in Canada and on a global scale. We expect ISC to continue to generate predictable and growing cash flows due to the non-discretionary nature of its core registry services, bolstered by its recent extension of the Master Service Agreement (MSA) with the Saskatchewan government by 20 years to 2053. Our DCF valuation of C$37/share implies 88% upside to the current share price, reflecting the sustainable, cash-generative nature of the company, encompassing a large, steady-growth Registry business and a fast-growing Services division.

• On October 25, Aspira Women’s Health announced that a poster on its in-development miRNA-based ovarian cancer test was presented at the American Association for Cancer Research (AACR) Special Conference in Cancer Research: Ovarian Cancer.
• The poster, titled, “Improving the diagnostic accuracy of an ovarian cancer triage test using a joint miRNA-protein model,” highlighted data showing miRNA’s potential to improve the diagnostic accuracy of non-invasive diagnostic tests.
• The study showed that the addition of miRNA improved the detection of early-stage ovarian cancers and that diagnostic performance improved even further when using a combination of approaches, including miRNA, proteins, and metadata.