Daily Brief Equity Bottom-Up: Seven&I (3382): Who Will Be the Greater Fool? and more

• 7&I traded at less than 5x reported EV/EBITDA consistently for roughly 4 years straight, and no one seemed to care or notice.
• Now that it trades close to 9x, there is an overflow of eager financiers and a mile-long line of analysts who will tell you that it is still undervalued.
• This is the stock market equivalent of duct tape and a banana.

• China announced game approval for the November batch. The number of games approved remained at a higher level than 2023.
• The pace of China game approval appears to have accelerated to the same level as pre-tightening.
• None of the companies that we are tracking got any approval for November batch.

• Phillips Carbon Black (PHCB IN) PCBL is the largest producer of Carbon Black in the country and seventh largest player in the world. 
• Transitioning to specialty carbon black, acquiring companies non-carbon linked companies and entering into JV for sunrise sectors EV battery chemical companies. 
• Guiding for 2400Cr Capex for 1Mn capacity of Carbon black capacity, 600Cr capex for Aquafarm chemicals and 500Cr for battery chemicals in the upcoming years for growth. 

• Bob Iger, CEO of Disney, discusses the legacy and importance of storytelling at Disney, emphasizing the need to balance heritage and innovation.
• He shares insights on leadership qualities, such as empathy, optimism, and the ability to act decisively, as well as the importance of staying curious and patient.
• Bob also touches on the impact of technology, AI, and the role of creativity in the future of storytelling, highlighting the need to maintain human creativity and caution with AI implementation.

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• FY24 1H results and update on the ongoing long-term plan

• Headline NPL figures at KB Financial (105560 KS) are already of major concern rising by 49% in the past year to 3Q24
• Granular loan classification data is of even greater concern, where substandard loans are up from KRW1,153bn to KRW1,715bn over the same period
• This more benign bucket of NPLs well overshadows loss loans, can migration can mean a substantial rise in credit costs

• Brookfield Renewable Partners LP (Brookfield Renewables) delivered a robust performance in the third quarter of 2024, achieving record results in terms of funds from operations (FFO) and asset recycling, while also positioning itself strategically for future growth.
• The company’s execution of its business strategies and asset monetization initiatives have been central to its recent performance.
• Baptista Research looks to evaluate the different factors that could influence the company’s price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology.

• William Companies $WMB believes more Republican control can resolve permitting issues, which would benefit the power industry and the energy infrastructure business.

• A favorable tax outcome will also be “a very huge positive to [its] guidance in the immediate term”. 

• Energy Transfer $ET said the Trump administration will bring “a breath of fresh air.” Nov 06: Q3’24

• Intel is now set to receive $7.86 billion in CHIPs Act funding, down from the $8.5 billion originally touted back in March 2024
• The funding comes with a raft of restrictions and caveats regarding what happens in the event of any changes in Intel’s organizational structure and/or ownership
• The US Department of Commerce also reserves the right to withhold funding and/or weigh in on decisions around outsourcing if Intel fails to meet key, critical milestones. Ouch!

• Halliburton’s Q3 revenue fell by 1.8% YoY and missed estimates by 2.2% dragged down by an 8.5% YoY fall in revenue from North America.
• The Completion and Production division’s revenue dropped 5.4% YoY and 3% QoQ, while the Drilling and Evaluation division posted a 3.5% YoY increase but declined 1.4% QoQ.
• Operating cash flow declined 23.5% QoQ, while free cash flow dropped 31.5%. Earnings were impacted by lost revenue from the cybersecurity incident and Gulf storms.