In today’s briefing:
- Nippon Yusen (9101) – Guidance Revision Up Still Conservative, Means More Capital Return Eventually
- BUY/SELL/HOLD: Hong Kong Stock Updates (July 22)
- [Q2 Earnings Preview] Microsoft Flying High on Tailwinds from Azure Surge, AI Leap & Gaming Boost
- Thai Beverage (THBEV SP) – Increasingly Streamlined SEA F&B Play
- Ryanair – FY25 Weakness Suggests a “normalization” and Prompts Structural Industry Questions
- TechChain Insights: Call with Silicon Motion; QLC NAND Emerging as Key Enabler for AI Devices
- Buyback and director filings taper off during pre-earnings period
- Actinver Research – Housing Sector : Building a More Profitable Future (Sector Update)
- Mongolian Mining (975 HK): Q2 2024 Production Impressive, Good Set Up for H1
- Oneness Biotech (4743 TT): Marketing Progress of Fespixon in China Opens a New Revenue Stream
Nippon Yusen (9101) – Guidance Revision Up Still Conservative, Means More Capital Return Eventually
- Nippon Yusen Kk (9101 JP) today announced an upward revision of H1 and full-year guidance. It was a dramatic increase.
- The breakdown of the OP and RP numbers suggests a huge gain in containers in Q1 and into Q2. The breakdown of revenue and OP changes suggested substantial H2 conservatism.
- On a capital-adjusted basis, Nippon Yusen is now slightly cheap vs its domestic peers and has shown a willingness to spend its excess cash on buybacks. Expect more.
BUY/SELL/HOLD: Hong Kong Stock Updates (July 22)
- The Hong Kong market trades about 30% below analysts’ estimated 12 month target price.
- Analysts are raising forecasts forXiaomi Corp (1810 HK) as it meets success with new phone rollouts and its EV business.
- Sunny Optical Technology Group (2382 HK) had a positive profit alert and Minth Group Ltd (425 HK) is showing growth in its international business. Both are rated BUY from analysts.
[Q2 Earnings Preview] Microsoft Flying High on Tailwinds from Azure Surge, AI Leap & Gaming Boost
- Azure Revenue Growth: Microsoft’s Azure revenue soared 21% YoY to $26.7B in Q3 2024, driven by advanced AI capabilities and increased enterprise adoption.
- AI & Personal Computing: AI-driven Copilot+ PCs and hybrid AI solutions are reshaping the market, with AI-capable PC shipments projected to rise from 19% in 2024 to 60% by 2027.
- Gaming + Activision: The $68.7B Activision acquisition boosted gaming revenue by 51% YoY, with Game Pass subscribers exceeding 30M and expanding Microsoft’s position in cloud gaming.
Thai Beverage (THBEV SP) – Increasingly Streamlined SEA F&B Play
- Thai Beverage will offload its entire stake in Frasers Property Ltd to TCC Assets in a share swap for an increased share in Fraser And Neave streamlining its business focus.
- The share swap values Fraser And Neave on a par with peers which is at a significant premium to the share price but Fraser And Neave was excessively undervalued.
- Thai Beverage deserves to trade on a higher multiple given its pure-play status and a succession of recent restructurings including Serm Suk and Oishi Holdings.
Ryanair – FY25 Weakness Suggests a “normalization” and Prompts Structural Industry Questions
- Ryanair issued a stark warning on summer pricing today with 1Q25 results and we cut our FY25 net income 31% accordingly.
- Our forecasts represent a re-set of unitary economics to pre-pandemic levels and it is difficult to plot improvement unless consolidation benefits or winter surgery help FY26.
- Ryanair’s cost advantage has widened markedly against peers, justifying a strategy of continued market share focus as competitors face greater challenges.
TechChain Insights: Call with Silicon Motion; QLC NAND Emerging as Key Enabler for AI Devices
- We had a conference call with Silicon Motion; the leading global provider of NAND flash controllers and solid-state storage solutions for the consumer, enterprise, and industrial markets.
- We focus on how Silicon Motion is leveraging advantages of QLC NAND flash memory, which is becoming a critical memory solution for new AI servers, AI PCs, and AI mobiles
- Maintain Structural Long rating for Silicon Motion and $102 valuation. The company is in a leading position to benefit from the rising importance of advanced memory controllers for AI applications.
Buyback and director filings taper off during pre-earnings period
- Share buybacks by primary-listed companies The five sessions also saw nine primary-listed companies conducted buybacks with a total consideration of S$4.5 million.
- With this transaction, the total proportion of shares bought back under the current mandate now stands at 1.47 per cent of the issued shares (not counting treasury shares) as of the date when the share buyback resolution was passed.
Actinver Research – Housing Sector : Building a More Profitable Future (Sector Update)
- The housing sector in Mexico has solid fundamentals, with attractive growth expectations for listed developers considering their healthy financial position and access to financing sources.
- As a result, these companies are poised to capture the increased demand that the housing deficit generates during the coming years.
- Since the start of the bankruptcy processes of the three largest housing developers (GEO, HOMEX, and URBI) in 2014, housing production has maintained a downward trend.
Mongolian Mining (975 HK): Q2 2024 Production Impressive, Good Set Up for H1
- Following our insight, Mongolia Mining Corp (975 HK): Play on Coking Coal Price With Growth Optionality, Mongolian Mining (975 HK) has released its Q2 2024 operational numbers.
- For Q2, the sales of coking coal products increased by 47% YoY and for H1 by 25% YoY. HCC was only 63% of the product mix (vs 87% in H1FY23).
- Based on our numbers, the stock trades at 5.6x FY24 PE and 2.6x EV-EBITDA. We await the H1 FY23 results and clarity on the dividend catalyst in August.
Oneness Biotech (4743 TT): Marketing Progress of Fespixon in China Opens a New Revenue Stream
- Oneness Biotech (4743 TT) entered into an exclusive agreement with China Resources Dubl Crne Phrmctl (600062 CH) for commercialization of Fespixon in China, Hong Kong, and Macau.
- Fespixon is approved in China as the first new drug for diabetic foot ulcer. Inclusion of the drug in NRDL is the next important milestone.
- During 1H24, Oneness Biotech reported revenue of NT$57M, up 36% YoY. With expanding scale of operation, gross profit margin is improving (1Q24: 62.5% vs. 1Q23: 47.9%). Net loss is decreasing.
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