Daily Brief Equity Bottom-Up: Pop Mart (9992 HK):  International Expansion Is For Real and more

• The thesis for Pop Mart International Group L (9992 HK) is the successful expansion of its international business, which made up 13% of sales in 1H23 but is growing exponentially. 
• This has been proved true in the latest announced 2023 results, with a 135% growth in 2023 for the international business, and a further >100% growth guidance for 2024.
• The company is trading at 24x 2024 earnings, assuming a 35% net profit growth in 2024. 

• Q224 revenues of $5.8 billion, up 23% QoQ and up 58% YoY. It also well above the high end of the guided range of $5.5 billion.
• Net income turned positive & amounted to $476 million. This compares to a loss of $1 billion in Q124
• Forecasting current quarter revenues of $6.6 billion & gross margin of 26.5% at their respective midpoints

• Despite a disappointing 4Q2023 earnings report, NetEase (9999 HK) remains firmly amid an earnings upgrade cycle.
• With NetEase touching on being oversold, near-term momentum indicators are displaying bullish signals.
• NetEase currently trades more than one standard deviation below its rolling 5-year historic average PE ratio.

• Operating profit and its margin reached historical high in 4Q23.
• Monthly active user base continued to expand, which is rare for other apps.
• GMV (Gross Merchandise Value) of the live broadcasting sales increased rapidly by 29% YoY in 4Q23.

• Driving strategic revitalization – Nippon Shokubai is a global chemical company with competitive proprietary technology, a track record of sustained free cash flow generation, and a balance sheet with room for optimization.
• It has embarked on a business transformation, strategically focused on expanding its Solutions business with higher- margin performance chemicals and identifying energy, electronics, and life science sectors as growth markets.
• Organizational changes being conducted aim to enhance human resource development and conduct quicker decision-making. 

• Sourcenext Corp (4344 JP) plans, develops, and sells PC software, smartphone apps, and IoT products.
• In POCKETALK®, besides the existing device business, the company will focus on sales of software products, including Simultaneous Interpreter for the POCKETALK® for BUSINESS series for corporate customers.
• The revision is mainly due to the extended lead time from inquiry to full-scale orders for the POCKETALK for BUSINESS Simultaneous Interpretation web browser version.

• PepsiCo is a global company with significant presence in both snacks and beverages, generating around $80 billion in revenue
• Despite the impact of COVID-19 on its business, PepsiCo has maintained strong performance
• The company’s Beverages North America segment contributes a third of sales but only 22% of EBIT, while Frito Lay North America accounts for 25% of sales but 50% of EBIT

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.

• Sun* (4053 JP) provides consulting, software development, recruiting, and other services to companies that seek to create value or businesses, including startups.
• In FY12/23, revenue was JPY12.5bn (+16.5% YoY), operating profit JPY1.8bn (+96.8% YoY), recurring profit JPY2.3bn (+99.1% YoY), and net income attributable to owners of the parent JPY1.6bn (+90.4% YoY).
• Sun* does not disclose a medium-term business plan with quantitative targets, but it releases qualitative targets related to KPI growth.

• Azbil Corp (6845 JP) provides automation services for buildings, factories, and plants and also offers subsistence-related automation services in the lifestyle area.
• In FY03/23, sales were JPY278.4bn (+8.5% YoY), operating profit was JPY31.3bn (+10.7% YoY), recurring profit was JPY32.1bn (+8.9% YoY), and net income attributable to owners of the parent was JPY22.6bn.
• Azbil in May 2021 announced a new medium-term management plan to cover the four fiscal years from FY03/22 to FY03/25 and new long-term targets for FY03/31.

• As a comprehensive water treatment engineering company, Organo Corp (6368 JP) engages in the planning, design, procurement, construction, operational management, and maintenance of water treatment plants.
• In FY03/23, orders received were JPY173.5bn, revenue was JPY132.4bn, operating profit was JPY15.2bn, recurring profit was JPY16.0bn, and net income attributable to owners of the parent was JPY11.7bn.
• Organo Corporation announced revisions to its full-year forecast for FY03/24.