Daily Brief Equity Bottom-Up: Nidec (6594) | Sharpens Its Edge in Global Manufacturing and more

• Nidec’s tender offer of Makino would strengthen its portfolio, combining advanced machining technologies with automation solutions to lead the global machine tool industry.
• The synergy between Nidec and Makino unlocks cost savings, streamlined operations, and innovative solutions for high-growth sectors like electric vehicles and aerospace.
• We estimate that the deal to acquire Makino would be between 8-13% EPS accretive for Nidec.

• After the peak of 4Q24, Taiwan Semiconductor (TSMC) – ADR (TSM US)‘s  revenue will see a decline of about -5% QoQ in 1Q25.  
• TSMC is expected to use 2nm technology in 4Q25, and we believe Advanced Micro Devices (AMD US) and Apple (AAPL US) could present products around 1Q26.
• TSMC could be set to announce its 2nm production plans, expansion into the US, Germany, and Japan, mature technology quotations, and the Capex budget for 2025. 

• All Pre-Conditions of Newjf’s Offer have been satisfied. Based on Offer Document, the latest date for posting of the Response Document is Jan.7, 2025. First Closing Date is Jan.21, 2025.
• Newjf will make every effort to complete the acquisition and regain the control of international business so as to protect shareholders’ interests.So, the logic behind the deal is very solid.
• Mengniu’s attitude could be positive. A higher management offer seems more out of reach because the management lacks sincerity. We advise investors not to walk away from Newjf’s Offer easily.

• Alibaba’s Freshippo remained profitable and double-digit growth in the past nine months.
• Brazil labor authorities are investigating BYD’s construction site for “slave-like condition”.
• Tencent Music will compensate MCSC (Music Copyright Society of China) for the unauthorized usage of music copy rights.

• Water Oasis (1161 HK) skimped on its final dividend and paid only 2 HK cents (compared to our expectation of ~5 HK cents), sending its share prices down 14% post results.
• Insider buying after the results helped steady the shares, but we see that buying after the declaration of dividends as sending a wrong signal to some minority shareholders.
• There is immense value, trading at 4.4x PE and 0.3x EV-EBITDA, with 485 mn HKD net cash (~90% of the market cap), but we need increased dividends to crystallize it.

• MINISO Group Holding (9896 HK) has surged 34% since announcing strong 9M24 results, backed by robust revenue growth, in end November, 2024.
• With strong growth prospects, the stock could scale further in 2025, driven by rapid store expansion, blind box toys, ACG goods, and collaborations with top IPs like Harry Potter.
• MINISO’s evolution from a value retailer into a lifestyle brand with trademarked IP goods, innovative blind boxes, and creative retail formats enhances its competitive edge and drives growth.

• In early 2025, Tesla finds itself at a critical juncture as its global vehicle deliveries for 2024 dipped by 1% to 1.79 million units, marking the first annual decline in over a decade.
• Despite this setback, Tesla’s market capitalization surged by approximately 53%, positioning the company as a $1.2 trillion giant surpassing the combined value of the next 20 largest automakers.
• This paradox underscores a shift in Tesla’s valuation drivers—from traditional car sales to ambitious ventures in robotics, artificial intelligence, and the promising but uncertain robotaxi business.

• In a dramatic turn of events, Hindenburg Research has publicly disclosed a short position against Carvana, intensifying the scrutiny on the online used-car retailer.
• The latest report from Hindenburg, titled “Carvana: A Father-Son Accounting Grift for the Ages,” accuses the company of financial manipulation and unsustainable growth driven by a precarious subprime loan portfolio.
• This revelation has sent ripples through the stock market, causing Carvana’s shares to dip by 1.9% in New York, marking a significant shift after a remarkable 284% surge in the previous year.

• Apple’s spectacular 2024 has positioned it as a behemoth in the technology sector, with its stock climbing 30% compared to the S&P 500’s 23% gain.
• It closed the year at $250 per share, giving the company a valuation exceeding $3.8 trillion, just shy of the $4 trillion milestone—a feat no company has achieved.
• This growth was driven by new product launches, including the revolutionary Apple Vision Pro, advancements in AI with Apple Intelligence, and record-breaking revenue of $94.9 billion for the September quarter.

• OTC Markets Group, Inc has a strong moat and capital light business model with high returns on equity and minimal capital expenditure
• The company has a long growth runway with mid-high single digit revenue growth forecasted over the next five years and low-40% EBITDA margins
• CEO owns 27% of the company, leading to aligned interests, and operates as marketplaces rather than exchanges, resulting in favorable regulatory implications and lower capital requirements.

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.