In today’s briefing:
- Nidec (6594) | Forget the EV Slump
- Baba’s Babies: Co-Parenting Works! Zhong An Online P&C Insurance
- The Data Center is the New Compute Unit: Nvidia’s Vision for System-Level Scaling
- Douzone Bizon: To Become the Fourth Internet Bank in Korea?
- PGT Innovations Inc.: Initiation Of Coverage – Maintaining A Robust Growth Trajectory Despite Market Uncertainties! – Major Drivers
- Anta Sports (2020 HK): Sustains Strengths into FY24
- Papa John’s International Inc.: Initiation Of Coverage – Are Its Growth Prospects As Delicious As Its Pizza? – Major Drivers
- Integral Ad Science Holding Corp.: Initiation Of Coverage – Highlighting the 4 Central Pillars of Its Growth Dynamics! – Major Drivers
- Sai Gon Cargo Services (SCS VN) Update: Price Hikes, Strong Q1 2024 Operational Numbers
- DPC Dash (1405 HK): Margin Potential Underappreciated
Nidec (6594) | Forget the EV Slump
- Nidec faces challenges amid global EV sales decline, with shares and valuations reflecting market pessimism.
- Anticipated catalysts include forthcoming guidance, potential MTP reassessment, and a strategic acquisition opportunity.
- At 18x EBIT, Nidec looks a compelling play on secular themes of electrification, automation, and energy efficiency.
Baba’s Babies: Co-Parenting Works! Zhong An Online P&C Insurance
- ZhongAn Online P&C Insurance C (6060 HK) is benefiting from the cross-selling opportunities generated through the eco-systems of Alibaba Group Holding (9988 HK) and Tencent (700 HK), its parent companies
- Largest solely online insurance company in China with Rmb 30B gross premiums written in 2023.
- Expertise and cross-selling from Ping An Insurance (H) (2318 HK) , another parent company with a jointly run auto insurance business.
The Data Center is the New Compute Unit: Nvidia’s Vision for System-Level Scaling
- Nvidia CEO Jensen Huang has repeatedly emphasized that the data center is the new unit of compute.
- While this concept seemed straightforward at first, the deeper implications became clearer after Nvidia’s presentations at GTC and OFC 2024.
- I only recently grasped exactly what is happening, and a simple reframing of the underlying principles that drove Moore’s Law makes the entire picture clearer.
Douzone Bizon: To Become the Fourth Internet Bank in Korea?
- On 4 April, Douzone Bizon (012510 KS) announced that it plans to become the fourth Internet bank in Korea. Following this news, Douzone Bizon’s share price increased by 21%.
- If the company succeeds in receiving the license to operate an Internet bank, this could meaningfully impact the company’s long-term sales and profits.
- If Douzone Bizone expands into the Internet banking services, it may need additional backing from strategic/financial partners including Bain Capital which has a 10.2% stake in Douzone Bizon.
PGT Innovations Inc.: Initiation Of Coverage – Maintaining A Robust Growth Trajectory Despite Market Uncertainties! – Major Drivers
- In the third quarter of 2023, PGT Innovations displayed a strong financial performance despite operating in an unpredictable market environment.
- The company’s balanced exposure to new construction and repair and remodeling channels has enabled them to deliver consistent record sales and impressive profits over the year.
- By combining a continued focus on operational efficiency and productivity, PGT Innovations managed to achieve a total revenue of $400 million and an adjusted EBITDA of $78 million in the third quarter.
Anta Sports (2020 HK): Sustains Strengths into FY24
- After a solid FY23, Anta Sports Products (2020 HK)‘s outlook for FY24 looks equally encouraging. Its various brands are expected to grow by 10-30% YoY still.
- Listing of Amer Sports (AS US) will provide Rmb1.6bn non-recurring gain in 1H24. For the full year, there will be a positive swing in its profit contribution.
- Anta Sports can be considered as a sportswear brand incubator, and its premium PERs of 18.3x and 15.9x for FY24 and FY25 reflect the ability to brew new brands.
Papa John’s International Inc.: Initiation Of Coverage – Are Its Growth Prospects As Delicious As Its Pizza? – Major Drivers
- Papa John’s International, Inc. reported another year of record global system-wide sales for the fourth consecutive year of positive North America comps in 2023.
- The company’s success is attributed to the dedication and focus of its team, franchisees, and the restructuring efforts, especially the foundation improvements to restaurant operations, menu amelioration with novel products, the digital advancements of their operations platforms, and the expansion of the restaurant footprint.
- Baptista Research looks to evaluate the different factors that could influence the company’s price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology.
Integral Ad Science Holding Corp.: Initiation Of Coverage – Highlighting the 4 Central Pillars of Its Growth Dynamics! – Major Drivers
- IAS 2023 fourth quarter and full year results depict a robust performance that exceeded expectations, noting an increase of 14% in quarter four revenue to reach $134.3 million and a year growth of 16% to reach $474.4 million.
- This growth marks a path for IAS’s strong commitment toward advancing the industry with its AI-driven measurement systems and optimization solutions.
- Baptista Research looks to evaluate the different factors that could influence the company’s price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology.
Sai Gon Cargo Services (SCS VN) Update: Price Hikes, Strong Q1 2024 Operational Numbers
- Sai Gon Cargo Service (SCS VN) announced an increase in its pricing (details in note) effective April 1st, with a 10% increase across most categories.
- March cargo numbers showed a substantial 47% YoY increase, as cooperation with Qatar Airways got underway in February. Q1 FY24 numbers were up 34% YoY.
- The stock trades at 12.5x FY24e numbers with an 8% yield, assuming a 20%YoY revenue and profit growth (and a 100% payout), with an upside to these conservative numbers.
DPC Dash (1405 HK): Margin Potential Underappreciated
- We believe consensus has not fully captured the company’s margin upside for FY24/25, likely due to management’s excessively conservative guidances.
- Our confidence is underpinned by positive SSSG trend, accelerating store expansion and clear trajectory for store margin improvement.
- We expect the company to generate RMB150/320 million adjusted net profit for FY24/25 respectively, compared to RMB30/150 million baked in consensus. Reiterate buy with HK$80 target price (30x FY25 earnings).
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