In today’s briefing:
- Sea Ltd (SE US) – Firing Profitability On All Segments
- [Tencent (700 HK, BUY, TP HK$518) TP Change]: C3Q24 Review: Performance In-Line with Catalysts
- 2024 High Conviction Update: Asahi Intecc (7747 JP)- Medical Division Drives Q1 Result
- GXO Logistics Inc.: Expanding E-Fulfillment Capabilities to Set New Standards! – Major Drivers
- Howmet Aerospace Inc.: Capitalizing on Explosive Commercial Aerospace Growth for 2025! – Major Drivers
- Toyota Motor Corporation: Their Adaptation & Strategy in the Chinese Market Driving Our ‘Buy’ Rating! – Major Drivers
- Cleveland-Cliffs Inc.: Can The Stelco Acquisition Be A Game Changer? – Major Drivers
- Cirrus Logic Inc.: Will Its Expansion into Laptop Markets Bring A Shift In The Competitive Dynamics? – Major Drivers
- AppLovin Corporation: Expansion into E-commerce As A Strategic Growth Enabler! – Major Drivers
- Duolingo Inc.: Leveraging AI & User Engagement For A Competitive Edge! – Major Drivers
Sea Ltd (SE US) – Firing Profitability On All Segments
- In 3Q2024, Sea Ltd demonstrated its ability to turn a profit at Shopee, whilst booking strong growth, with sales & marketing kept well in check and active users increasing substantially.
- E-Commerce registered higher take rates, through higher commissions, more paid advertising, and increasing levels of self-fulfilment through SPX Express, whilst Digital Financial Services saw a rapid acceleration in loan growth.
- Digital Entertainment was back on form with strong growth in bookings, active users, ARPU, and adjusted EBITDA. Management remains confident about 4Q2024 and the outlook for 2025.
[Tencent (700 HK, BUY, TP HK$518) TP Change]: C3Q24 Review: Performance In-Line with Catalysts
- Tencent reported C3Q24 revenue, IFRS operating profit, and IFRS net income in-line, in-line, 11% vs. our estimates and in-line, in-line, 18% vs. consensus.
- The bright spot is fintech transaction volume grew 10% YoY showing gain in market share, which coupled with rebound in consumption since October should rive recovery.
- We raise TP by 2% to HK$518. Tencent is still our TOP PICK in an uncertain geopolitical environment with an upswing fundamental story.
2024 High Conviction Update: Asahi Intecc (7747 JP)- Medical Division Drives Q1 Result
- Asahi Intecc (7747 JP) recorded 9% YoY revenue growth to ¥31B in Q1FY25. Revenue growth is attributable to the continued strong trajectory of medical division, which reported 10% YoY growth.
- Strong rebound in China is key highlight for medical division performance. Revenue from China increased by a whopping 36% YoY and 44% QoQ to a record high of ¥9.3B.
- Despite a better-than-expected Q1FY25, the company maintains full-year FY25 guidance, due to external factors such as currency movements as well as uncertainties in trends for net sales, productivity, and expenditure.
GXO Logistics Inc.: Expanding E-Fulfillment Capabilities to Set New Standards! – Major Drivers
- GXO Logistics’ latest earnings for the third quarter of 2024 painted a mixed yet informative picture of its financial performance and strategic positioning.
- The company reported record revenues of $3.2 billion, marking a substantial year-over-year increase of 28%.
- This robust top-line growth is partially attributed to an organic revenue growth of 3%, which has shown a sequential upward trend throughout the fiscal year.
Howmet Aerospace Inc.: Capitalizing on Explosive Commercial Aerospace Growth for 2025! – Major Drivers
- Howmet Aerospace’s third quarter 2024 results demonstrate significant performance gains amidst a complex operating environment.
- The company’s revenue growth was substantial at 11% year-over-year, with commercial aerospace driving much of this improvement with a 17% increase in revenue.
- The engine products and fasteners segments excelled, supported by robust structures performance.
Toyota Motor Corporation: Their Adaptation & Strategy in the Chinese Market Driving Our ‘Buy’ Rating! – Major Drivers
- Toyota Motor Corporation has announced its fiscal year 2025 second-quarter financial results.
- The company achieved an operating income of JPY 2.4642 trillion for the first half of the fiscal year, which was maintained close to the previous year despite some setbacks in production and increases in expenses.
- While sales revenue touched JPY 23.2824 trillion, the net income of JPY 1.9071 trillion saw a significant decrease from the prior year, primarily due to exchange rate fluctuations which caused valuation losses in foreign currency assets.
Cleveland-Cliffs Inc.: Can The Stelco Acquisition Be A Game Changer? – Major Drivers
- Cleveland-Cliffs presented its third-quarter 2024 results during a challenging period of weaker steel demand and pricing, largely attributed to reduced automotive production and high interest rates affecting consumer decisions.
- The company’s acquisition of Stelco, a Canadian steelmaker, was a notable development during this period, promising operational agility and cost efficiency.Cleveland-Cliffs reported a quarterly adjusted EBITDA of $124 million on 3.8 million tons of shipments.
- This was a decline from previous performance levels, which the company attributed to reduced activity in the automotive industry.
Cirrus Logic Inc.: Will Its Expansion into Laptop Markets Bring A Shift In The Competitive Dynamics? – Major Drivers
- Cirrus Logic has reported strong financial performance for the second quarter of fiscal year 2025.
- The company achieved record revenue and earnings per share, with revenue reaching $541.9 million.
- This figure was near the upper end of their guidance range and reflects strong demand for components used in smartphones.
AppLovin Corporation: Expansion into E-commerce As A Strategic Growth Enabler! – Major Drivers
- AppLovin’s latest earnings for the third quarter ending September 2024 provides a comprehensive overview of the company’s performance, strategic initiatives, and future growth prospects.
- The company reported strong financial metrics with total revenue reaching $1.2 billion, marking a 39% year-over-year increase.
- Adjusted EBITDA also rose significantly to $722 million, reflecting a 72% increase from the same period last year, and achieving a 60% adjusted EBITDA margin.
Duolingo Inc.: Leveraging AI & User Engagement For A Competitive Edge! – Major Drivers
- Duolingo, a prominent player in the online language learning space, has reported its financial results for the third quarter of 2024, outlining both strengths and areas to watch.
- The company demonstrated robust growth in key metrics, including a 54% year-over-year increase in daily active users (DAUs), with its Family Plan onboarding 21% of its subscriber base.
- This impressive user growth, particularly after a high growth rate in previous years, suggests that Duolingo continues to successfully engage its expanding user base.
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