In today’s briefing:
- NVIDIA. Another Beat & Raise, Yet Shares Slide. But Why?
- Oriental Watch (398 HK): H1 FY24 Lower than Expectation But A 15% Div Yield, Cash >60% of Mkt Cap
- 2024 High Conviction – Giant Biogene – Growth Rate Keeps Moving Higher
- [Xiaomi Inc.(1810HK,SELL,TP HK$12.6) Earnings Review]: Mi14 Success Does Not Alter Overall Headwinds
- Aeon and Seven & I to Create Ecosystems Via Financial Services
- Watts Finally Reacts to Margin Squeeze
- A Turnaround Story for Intel by Accelerating 3nm Outsourcing to TSMC?
- 2024 High Conviction – ZJLD – Buoyed by a Premiumisation Shift
- Bumrungrad Hospital (BH TB): Strong 3Q23 Performance; Middle-East Tension Plays Spoilsports
- BOC Aviation (2588 HK, BUY, TP:HKD70): High Quality Safe Bet
NVIDIA. Another Beat & Raise, Yet Shares Slide. But Why?
- Q3FY24 revenues of 18.1 billion, up 34% QoQ and up a staggering 206% from the year ago period. It was also ~$2 billion higher than the guided number
- NVIDIA’s current quarter forecast was for a further revenue raise of almost $2 billion with gross margins staying roughly flat at 74.5%
- Share price reaction was negative, closing down 2.5% the following day. But why?
Oriental Watch (398 HK): H1 FY24 Lower than Expectation But A 15% Div Yield, Cash >60% of Mkt Cap
- Oriental Watch (398 HK) reported an 8% YoY profit decline for H1 FY24 (Vs. our expectation of 10-15% growth) due to a higher taxation rate and lower margins in HK.
- Despite that, the company distributed 100% of its profits for a 28.5 cent HKD/share dividend (15% annualized) and built net cash/investments to 1.25 bn HKD (62% of market cap).
- Trading at 7x FY24e PE with abundant cash and real estate with a 15% yield, the stock is worth exploring with the perspective of building a high-yield portfolio.
2024 High Conviction – Giant Biogene – Growth Rate Keeps Moving Higher
- Giant Biogene was listed in Hong Kong IPO in 2022. It has done well since and is now trading 45% above its IPO price, but its still cheap.
- GB is a leader in the bioactive ingredient-based professional skin treatment product industry in China.
- In this note, we will talk about the company’s past performance and future prospects.
[Xiaomi Inc.(1810HK,SELL,TP HK$12.6) Earnings Review]: Mi14 Success Does Not Alter Overall Headwinds
- Xiaomi reported C3Q23 top-line, non-GAAP EBIT, and GAAP net profit (2%), 7% and in-line vs. our est., and in-line, 4%, and 13%, vs. consensus respectively.
- Xiaomi’s recent run could be short lived, as (1) Huawei will soon launch mid-range 5G handsets, (2) the Mi 14 will soon face new high-end Android competition;
- And (3) its underinvested EV project could disappoint. We maintain our SELL rating and HK$ 12.6 TP, implying 28x CY24 P/E.
Aeon and Seven & I to Create Ecosystems Via Financial Services
- Aeon and Seven & I both have large financial services arms, generating a substantial share of consolidated profits.
- With cashless payments now the norm, the old business models that relied on fees for cash dispensing are fast becoming outdated.
- Both retailers plan major changes to create ecosystems that should deliver a lot more data to improve targeted marketing for e-commerce and retail stores.
Watts Finally Reacts to Margin Squeeze
- The ¥100 Shop chains are facing higher COGS on one side and rising wages on the other, a problem when you run a fixed price chain at just ¥100.
- Most (except Seria Co Ltd (2782 JP)) have reacted by introducing new, higher priced lines led by Daiso.
- Watts, the smallest chain, is now catching up and higher priced lines will make up a third of stock by 2027.
A Turnaround Story for Intel by Accelerating 3nm Outsourcing to TSMC?
- By offering 15k and 30k/m 3nm capacity by 4Q24/4Q25 to Intel, TSMC will see Intel becoming one of its top 3 customers by accounting for 12% of TSMC 2025 sales
- By leveraging 3nm outsourcing, Intel will have incremental sales/capacity growth of 19-20% per year by accounting for 28%/44% of sales in 2024/2025, beating consensus’ 14%/9% y/y sales growth for 2024/2025.
- We estimate 30-35% 5 years EPS CAGR for Intel, driven by TSMC’s 2/3nm foundry support, lower cost and process R&D, lower capex and depreciation cost, and AI PC CPU launch.
2024 High Conviction – ZJLD – Buoyed by a Premiumisation Shift
- In Apr 2023, ZJLD Group (6979 HK) raised around US$676m in its HK IPO. While it initially had a turbulent listing, the shares are now trading above its IPO price.
- ZJLD Group (ZJLD) is a Chinese liquor company primarily producing baijiu.
- In this note, we will talk about the company’s past performance and future prospects.
Bumrungrad Hospital (BH TB): Strong 3Q23 Performance; Middle-East Tension Plays Spoilsports
- In 3Q23, Bumrungrad Hospital Pub Co (BH TB) reported 18% YoY revenue growth to THB6.8 billion, driven by 27% and 20% YoY growth in Thai and expat patients revenue, respectively.
- Revenue from international patients grew 16% YoY, driven by Middle-east and China, which grew 31% and 21%, YoY, respectively. EBITDA, PAT, and their respective margins reached record high in 3Q23.
- Due to heavy revenue exposure in Middle-east, the ongoing tension in the region is acting as a setback. Bumrungrad shares tumbled ~15% over the last one month.
BOC Aviation (2588 HK, BUY, TP:HKD70): High Quality Safe Bet
- BOC Aviation (2588 HK) (BOCA) is the highest-quality aircraft leasing company, with a young asset portfolio, quality clientele, cheapest credit facility, and superb risk management.
- Outlook is attractive, strong demand and scarce supply ensures high lease rates and profits. Asset disposals have all recorded a healthy surplus, a potential earnings surprise.
- Our TP of HKD70/share implies 0.94x FY24 (22% UPSIDE) potential
💡 Before it’s here, it’s on Smartkarma
Sign Up for Free
The Smartkarma Preview Pass is your entry to the Independent Investment Research Network
- ✓ Unlimited Research Summaries
- ✓ Personalised Alerts
- ✓ Custom Watchlists
- ✓ Company Data and News
- ✓ Events & Webinars
