Daily Brief Equity Bottom-Up: Perfect Medical: Post Card From HK and more

• Perfect Medical Health (1830 HK), post a correction of consumer discretionary stocks in HK, now trades at a yield of 11.5%, with cash&investments representing 24% of the market cap.
• HK is experiencing a dip in consumer sentiment, and the company isn’t immune to it, but flat sales/profitability, a 24% net margin, and >40% ROE provide great margin of safety.
• The stock trades at 9.3x FY24 PE and 11.5% yield (assuming a 110% payout average across company history) with a growth option once the HK economy kickstarts.

• TSMC reiterates 2024 sales y/y growth of 20-25% but revises down 2024 global semiconductor y/y sales from over 10% to 10% and global foundry sales growth from 20% to 15-19%.
• No more Moore’s Law: After 3 years ramp up gap between N5-N3, TSMC confirms 10-11 quarters of ramp up gap between N3 and N2 due to longer production cycle.
• Driven by stronger digital consumer (33% q/q), HPC (3% q/q), IoT (5% q/q) sales but weaker smartphone IC (-16% q/q), TSMC reports 1Q24 sales decline of only 5% q/q.

• Declaring a slower recovery for mature nodes was an outlier, indicating that Vanguard’s recovery progress might be slower. 
• Apple’s iPhone is expected to be the focus for N2 production in 4Q15F.  
• TSMC’s long-term gross margin is set at 53%, signifying a few key points. 

• Interview with Scott Miller, CIO at Greenhaven discussing Par technologies and recent developments
• Par technologies is a stable point of sale software company focused on food services industry
• Company has shown strong progress in organic growth and acquisitions, with potential for further upside in the stock market

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• IMMR is using the gains from Q124 to make an investment in BNED. IMMR intends to invest $45 million to purchase new shares at $0.05 per share.
• IMMR’s stock continues to trade at a slight premium to cash even though the operating business has continued to expand in auto
• IMMR disclosed it ended the first quarter of 2024 with approximately $200 million in shareholder equity. This would equate to a sequential increase of approximately $17 million

• Wix reported strong Q4 2023 earnings underpinned by its pivot to AI innovation.
• 2023 was a year of significant progress for the firm as it demonstrated robust growth, reaching record profitability levels.
• With the focus on AI, Wix introduced an array of AI-powered features that would help users create web content more efficiently, resulting in improved monetization and heightened user conversion rates.

• AppFolio, Inc. has shown a steady growth pattern in its fourth quarter of 2023, which according to the results, has been due to a sharp expansion in innovation alongside profitable growth.
• In the final quarter, the revenue of the company increased by 39% year over year reaching $172 million.
• This steady surge has contributed to an annual increase of 31%, pushing the total to $620 million.

• KBR, Inc. achieved solid results in the Q4 and FY 2023, meeting or exceeding expectations on all key metrics.
• Revenue grew by 11%, and adjusted EBITDA by 12% year-on-year, with margins increasing to 10.7%.
• Cash management was a highlight, with the company settling both the convert and warrants in cash, reducing share count while avoiding dilution, and management described it as ‘delivering on its commitment to maximise shareholder return.’ The company ended the year with a good order backlog, providing visibility of future earnings potential.

• Telix Pharmaceuticals (TLX AU) reported 18% QoQ revenue growth in 1Q24. The U.S. revenue growth accelerated to 18% QoQ in 1Q24, compared to 11% in 4Q23 and 13% in 3Q23.
• Telix reaffirmed guidance and expects 2024 revenue of $445–465M, representing 35–40% YoY increase. The current quarterly U.S. revenue run-rate of Illuccix matches the lower end of the guidance.
• Telix is on track to launch three products in U.S. this year. Two of them have an estimated initial market opportunity of $600–640M, with upside potential from indication expansions.

• SentinelOne closed the year with stellar performance, surpassing its fourth-quarter expectations across all metrics, including revenue, gross margin, and operating margin.
• Moreover, the company reported its annual recurring revenue (ARR) grew by 39% year-over-year to $724 million, primarily due to new customer acquisitions and strong expansion rates.
• The growing interest in AI-powered security solutions, driven by the rising incidence of cyberattacks, is resulting in robust demand for SentinelOne’s offerings.