In today’s briefing:
- New Oriental Education & Technology: Back From the Dead
- Panasonic (6752) | Panic-Sonic
- PC Monitor: Inventories Healthy & Intel Expects Over 100 Million AI PCs In Two Years
- BOM Cost and CoWoS Demand Analysis on Nvidia AI GPU HGX for 2023-2025, Room to Raise Estimates
- Taiwan Tech Weekly: Wave of Key Taiwan Results; Heavyweights Samsung, AMD, Qualcomm Internationally
- [Week 9] Namaste India 🙏 | Earnings Edition – Part II
- Bukalapak (BUKA IJ) – Taking the Track Towards Profitability
- Travelsky (696): Cheaper Now
- Nihon M&A: Earnings Show Some Recovery; but Could Miss Full-Year OP Guidance
- Dr. Reddy’s Laboratories (DRRD IN): Highest Ever Sales and Profit in Q2; Good Show in Key Markets
New Oriental Education & Technology: Back From the Dead
- MSCI China Funds are starting to engage with New Oriental Education & Technology after a big exodus in 2021 following China’s Tech Crackdown.
- Since the lows of 2022, New Oriental Education has been one of the key beneficiaries of active fund rotation.
- Previous holders such as HSBC, Mirae and BlackRock have bought back in after closing out in 2021, but there is still a long way to go to reach previous highs.
Panasonic (6752) | Panic-Sonic
- Panasonic’s Q2 results showed flat consolidated sales of Y2,090 billion, with a 24% YoY increase in adjusted operating profit.
- FY3/24 outlook was revised down with sales and operating profit reductions across segments, notably in Lifestyle and Energy
- Our concerns include the company’s complex structure, low overall profitability, uncertainties about valuing IRA credits, and challenges stemming from economic conditions, leading to pessimism about Panasonic’s stock price
PC Monitor: Inventories Healthy & Intel Expects Over 100 Million AI PCs In Two Years
- Intel’s results last week beat expectations by a wide margin, with margins recovering better than expected by the Street and guided to keep improving through 4Q23E.
- New Meteor Lake chips for PCs, branded as ‘Intel Core Ultra’ will officially launch December 14th and are expected to drive demand for new AI-optimized PCs in 2024E.
- Intel said that the PC industry completed its inventory digestion in 1H23, drove sequential demand growth in 3Q23, and this is expected to continue into 4Q23E.
BOM Cost and CoWoS Demand Analysis on Nvidia AI GPU HGX for 2023-2025, Room to Raise Estimates
- TSMC’s manufacturing value only accounts for 1/4 of H100 HGX bill of materials but HBM3 accounts for more than half;
- ABF substrate, SXM5 module, UBB and CCL vendors should be benefited, especially for Ibiden Co Ltd (4062 JP) on ABF substrate/OAM and Elite Material (2383 TT) on OAM/UBB CCL;
- Nvidia AI GPU likely doubling each year in next two years; Our estimates on Nvidia 2025 AI GPU EPS contribution are exceeding Bloomberg consensus earnings estimates, suggesting room to raise.
Taiwan Tech Weekly: Wave of Key Taiwan Results; Heavyweights Samsung, AMD, Qualcomm Internationally
- Key Results This Week: Delta, Elan, ChipMOS, Nuvoton, AU Optronics in Taiwan… Plus Samsung, AMD, and Qualcomm.
- Positive signs for the PC & mobile space have come from recent Intel, UMC, Mediatek results.
- Top Losers: Macronix Slumps on Weak Results and Outlook, Hon Hai Slumps on China Tax & Land Probe
[Week 9] Namaste India 🙏 | Earnings Edition – Part II
- Our earnings coverage continues for the second edition and is expected to continue for one more week.
- At the bottom, we provide a consolidated view of all earnings tracked so far (Bullish / Bearish) and would be happy to engage on any of them.
- We also highlight the earnings of some of the global companies that have significant operations or growth in India.
Bukalapak (BUKA IJ) – Taking the Track Towards Profitability
- Bukalapak (BUKA IJ) 3Q2023 results confirmed that it is on track to achieving EBITDA breakeven in 4Q2023, with strong revenue growth and a significant improvement in its contribution margin.
- The was a slight slowdown in marketplace revenue QoQ due to a high Lebaran base, mainly due to slower gaming. 4Q2023 should see a strong recovery and higher take rates.
- Bukalapak looks to be pressing all the right buttons but more granularity on what is driving higher take rates would be well-received . Valuations look attractive relative to peers.
Travelsky (696): Cheaper Now
- Travelsky Technology Ltd H (696 HK) share price was unjustly sold off due to flows rather than operational performance.
- The key business is processing flights for domestic tourism, with a lesser correlation to geopolitical issues.
- Due to the strong earnings growth, PER is adjusted from 60x to 25x.
Nihon M&A: Earnings Show Some Recovery; but Could Miss Full-Year OP Guidance
- Nihon M&A Center (2127 JP) ’s 2Q revenues decreased YoY while OP remained flat. However, both revenue and OP beat consensus estimates driven by improvement in revenue per M&A transaction.
- There was strong improvement in revenue per transaction driven by enhanced efforts and growth in no. of large deals, however, M&A revenues declined due to drop in no. of deals.
- Nihon has so far achieved only 36% of its OP target and it seems unlikely for the company to reach its full-year OP guidance, suggesting there is further downside.
Dr. Reddy’s Laboratories (DRRD IN): Highest Ever Sales and Profit in Q2; Good Show in Key Markets
- Global generics revenue increased 9% YoY to INR61 billion, mainly driven by double-digit growth in North America and Europe generic businesses, partly offset by muted growth in domestic market.
- Revenue from North America generics increased 13% y/y to INR31.7 billion, driven by growing momentum in core portfolio, Mayne integration, and favorable Fx. Pricing environment remains stable.
- Despite increase in SG&A and R&D expenses, EBITDA grew 13% YoY to INR 21.8 billion. Net profit increased 33% YoY to INR14.8 billion. Both EBITDA and net profit topped estimates.
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