In today’s briefing:
- Meituan (3690 HK): Embracing the Slowdown
- MT/ Meituan (3690): 3Q24, Excellent Results, Still 46% Upside
- HONG KONG ALPHA PORTFOLIO (November 2024)
- Tech News This Week: Samsung Re-Org, QCOM Gives up on Intel, TSMC Increase CoWoS, Apple Delays 2nm
- Taiwan Tech Weekly: Taiwan’s Space Tech Conference This Week; AI Driving New Humanoid Robot Industry
- Cisco’s Game-Changing NVIDIA Partnership & AI Solutions Are A Potential Masterstroke? – Major Drivers
- NetEase Inc.: The Expansion of Gaming Portfolio & Global Reach & Other Major Drivers
- Applied Materials (AMAT): China Market Trends & Normalization Driving Our Optimism! – Major Drivers
- Kulicke and Soffa Industries: These Are The 7 Biggest Factors Impacting Its Performance In 2025 & Beyond! – Major Drivers
- Bosideng (3998 HK): Good Results, yet There Are Concerns
Meituan (3690 HK): Embracing the Slowdown
- Meituan reported strong 3Q results last Friday which were largely expected by the market. Yet downbeat guidance seemed to have disappointed investors and dragged the stock during US trading session.
- We believe the stock’s significant re-rating since early 2024 has come to end as earnings growth starts normalizing after being boosted by less competition and narrowing losses from new initiatives.
- While the company has strengthened its moat and we expect steady growth ahead, we see near-term price volatility as markets digest the notable slowdown.
MT/ Meituan (3690): 3Q24, Excellent Results, Still 46% Upside
- Revenue grew by 22% YoY and operating margin improved 8 percentage points YoY in 3Q24.
- All Business lines grew strongly and all expense percentages of total revenue declined YoY in 3Q24.
- We believe the stock has an upside of 46% for the next twelve months.
HONG KONG ALPHA PORTFOLIO (November 2024)
- Hong Kong Alpha portfolio lost 2.9% in November, but has outperformed its benchmark by 4.9% since inception on October 1st. It has outperformed HSI, HSCI and HSCEI by 9%.
- Hong Kong Alpha has generated idiosyncratic returns during the market correction. The portfolio has no exposure to energy, healthcare and property sectors.
- We exit 4 positions at the end of the month and add positions in software, tech components, travel and restaurant sectors.
Tech News This Week: Samsung Re-Org, QCOM Gives up on Intel, TSMC Increase CoWoS, Apple Delays 2nm
- Samsung Semiconductor re-org, new reporting lines, top management promotions and demotions, but the same people. That’s going to solve problems? Qualcomm gives up on buying Intel – good idea.
- Xiaomi to launch its smartphone chip, but what for? Intel launching a PC GPU again . Apple delays or abandons 2nm for M5 chip (too expensive). TSMC increasing CoWoS again.
- China – US worsening relations, side effect is over buying, over stocking of semiconductors? is there a bunch of inventories in China that we can’t see?
Taiwan Tech Weekly: Taiwan’s Space Tech Conference This Week; AI Driving New Humanoid Robot Industry
- Taiwan’s Largest Space Technologies Conference Is Happening This Week– Hon Hai Is Title Sponsor Showcasing Its Satellites; We Are Also Attending
- TSMC’s 2nm Breakthrough: Kaohsiung Fab Ahead of Schedule, Apple and AMD Poised as Early Adopters
- AI Driving the Emergence of a US$2bn Humanoid Robot Market by 2027E
Cisco’s Game-Changing NVIDIA Partnership & AI Solutions Are A Potential Masterstroke? – Major Drivers
- Cisco Systems, Inc. recently reported its first quarter results for fiscal year 2025, showcasing numerous strengths as well as areas to watch closely.
- The company’s revenue for the quarter reached $13.8 billion, sitting at the high end of their guidance range, though it marked a 6% decline year-over-year due to the previous year’s elevated backlog shipments.
- The strength across Cisco’s lines of business was evident in their recurring revenue streams, which now account for 57% of total revenue.
NetEase Inc.: The Expansion of Gaming Portfolio & Global Reach & Other Major Drivers
- NetEase’s recent quarterly earnings report demonstrates a mixed performance characterized by both promising growth areas and some challenges.
- The company’s overall financial health remains strong, supported by diversified business operations in gaming, education, music, and other innovative ventures.
- In the gaming segment, NetEase achieved solid results, with total online games net revenue reaching approximately RMB 20 billion, indicating substantial year-over-year and quarter-over-quarter growth in PC games.
Applied Materials (AMAT): China Market Trends & Normalization Driving Our Optimism! – Major Drivers
- Applied Materials, Inc. recently reported its fourth quarter and fiscal year 2024 results, revealing several facets that contribute to its investment thesis.
- The company recorded record revenue and earnings, marking five consecutive years of growth.
- This performance underscores the competency of its strategy and execution, driven by the global team’s hard work.
Kulicke and Soffa Industries: These Are The 7 Biggest Factors Impacting Its Performance In 2025 & Beyond! – Major Drivers
- Kulicke and Soffa Industries reported its fiscal fourth quarter 2024 results, highlighting several key developments and challenges.
- The company’s revenue for the quarter was $181.3 million with a reported non-GAAP EPS of $0.34.
- The results were influenced by improvements in some end markets but were hindered by continued softness in others, particularly the LED segment.
Bosideng (3998 HK): Good Results, yet There Are Concerns
- Bosideng International Holdings (3998 HK) has another solid 1H, with net profit surging 23% and DPS rose 20%. At 11.3x PER for FY25F, the valuation is not stretched.
- The gross margin for branded down apparel has hit the lowest 1H level since 1H FY22, however. Similarly, its OEM management gross margin has come down.
- Operating cash outflow rose to Rmb3.5bn, compared with Rmb585m a year ago, and inventory days leaped 29 days. Revenue and profit for ladieswear have plunged.
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