Daily Brief Equity Bottom-Up: Rohm (6963 JP): Negative Scenario Discounted and more

• Japanese semiconductor equipment stocks have started to drop back, but device maker Rohm is already down 25% year-to-date and down 43% from its 52-week high. 
• Rohm’s operating profit fell 53% last fiscal year and management is guiding for a 68% decline in in FY Mar-25. Investment in power devices remains strong despite weak sales.
• 1H guidance is for an 80% year-on-year decline in operating profit on a 6% decline in sales. Buy into this weakness. Recovery should start in 2H.

• One interesting interpretation of the new Akeso-summit cooperation is that it aims to pave the way for potential acquisition of Summit by MNC. The climax of the story hasn’t arrived.
• Jacobio is a good target for potential M&A and licensing deals. So, this company has considerable potential returns and also strong safety margin, which is worth taking a gamble on.
• There’re concerns that Genscript could face US scrutiny due to alleged ties with Chinese government. Share price rebound may not last considering geopolitical conflicts and CXO industry downturn in 24H1.

• Tuniu’s revenue grew by 71% YoY in 1Q24, as the company benefited from the travel industry’s recovery.
• Smart Share Global’s revenue plunged by 52% YoY in 1Q24 due to fewer customers in shopping malls.
• PDD plans to price products on behalf of retailers, which reflects the severe competition in e-commerce.

• Shares of RoboSense Technology, a mass producer of LiDAR products and perception solutions, rose ~86% since IPO and outperformed Hesai Group and Hang Seng Index on a YTD basis.
• Founder-Led LiDAR company priced its IPO at HK$43/share and raised ~HK$1B gross proceeds in January. RoboSense shares fell on first day of public trading on the Hong Kong stock exchange.
• Today, RoboSense Technology became the most valuable LiDAR company in the world and is now valued at roughly $4.6B. 

• Tapestry is acquiring Capri, which owns Michael Kors, Versace, and Jimmy Choo
• FTC is scrutinizing the merger due to antitrust concerns in the affordable luxury market
• Capri’s deteriorating fundamentals may lead to a break price of $25 per share, with uncertain success of the acquisition

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.

Key points

• AMA Group is positioned as the dominant player in the Australian vehicle repair industry
• The company offers opportunities for revenue and cost synergies similar to Boyd’s success in North America
• Mimval’s 2022 write-up on AMA reflects optimism for the company’s growth potential and ability to capitalize on opportunities in the market

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.

• TC Energy Corporation’s TRP.PR.D preferred shares offer attractive total return with limited risk over the next 5 years
• Best suited for PAs and small funds in Canada due to low trading volume and tax advantages
• Consider purchasing a basket of Canadian fixed-reset preferred shares for maximum exposure, potentially converting to Series 8 with a floating dividend rate based on the 90-day Government of Canada treasury bill rate

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.

Key points

• Dropbox was last pitched in August 2022 with nearly reached $1B FCF guidance for 2024
• Company hit a plateau with guidance for $957M to $997M in last earnings call, factoring in stock-based compensation resulting in over $620M in FCF on an $8.1B equity
• Despite recent drop in equity value, Dropbox offers higher earnings yield and potential upside in equity value compared to Box

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.

• Whilst the Chinese online games market has struggled since 2023, NetEase (9999 HK) has continued to gain revenue market share driven by the success of its mobile titles.
• Future revenue growth will depend on the continued success of NetEase’s legacy titles and its robust pipeline of upcoming releases, including several highly anticipated launches.
• NetEase trades nearly 2 standard deviations below its 5-year historic average PE trading range, a level that has proved to be a very good entry point.

• High potential for additional recoveries with longer liquidation period
• Solvent receivership of Signature Bank offers compelling investment opportunity
• Potential for substantial upside for common equity, preferred equity, and unsecured bonds

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.