Daily Brief Equity Bottom-Up: Softbank (9984 JP): Relying on Arm Strength and JPY Weakness and more

• We believe that Arm is now valued as a “growth at any price” stock; with nearly half of SoftBank group’s equity value reliant on Arm, NAV downside risk is rising
• The risk of JPY appreciation is real, whilst SVF2 remains very exposed to financing costs, with 85% of its equity value in private companies
• Softbank shares trade at a 55%+ discount to the estimated NAV; yet the downside risks to Arm’s valuation, along with the potential JPY appreciation, should keep the discount wide

• Recruit Holdings (6098 JP) reported 3QFY03/2024 results on Friday. Revenues decreased YoY due to decline in HR Tech revenues, while Adj. EBITDA for the quarter increased YoY. Both Beat consensus estimates.
• Weakening of labour markets and new pricing model have impacted HR Tech revenues, while cut down on investments have helped improve HR Tech margins.
• The company has launched Indeed Plus to help improve earnings, which we don’t expect to have a major impact on Recruit Holdings (6098 JP) ’s earnings in the near term.

• Silicon Motion reported results last week that beat consensus; Moreover, the company expects strong growth not just in 2024E, but also in 2025E.
• The company’s growth will significantly exceed PC and mobile phone market growth thanks to strong memory demand trends within these segments.
• The company sees NAND Flash in shortage into 2025E based on visibility into its client ecosystem. We continue to view SIMO as a next-wave play on the Memory recovery.

• ARM’s stock is up 110% YTD. We wrote about ARM a few months ago and reckoned that intrinsic value for ARM is a bit lower than the IPO price.
• In hindsight, it was perhaps a limitation of our imagination than anything else.
• We should have added the following in our analysis but did not: “Masa son understands capital markets.

Key points (machine generated)

• Maithan Alloys is a leading manufacturer of Manganese (Mn) alloys used in the production of hardened steel.
• The company operates three plants in India and recently acquired a fourth, indicating its growth and expansion in the industry.
• India, where Maithan Alloys is based, is the largest exporter of Mn alloys in the world, providing 25% of global imports, and maintains its position as a low-cost supplier despite structural disadvantages.

This article is sourced from an online content aggregator through publicly available sources and is displayed below for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• This is our first report on global footwear and apparel major, Deckers Outdoor.
• The company saw a strong fiscal third quarter for 2024, but the company did recognize certain risks and uncertainties that could potentially impact future performance.
• Total company revenue saw an increased 16% to reach $1.56 billion, largely thanks to full-price consumer demand.

• LIC Housing Finance (LICHF) reported a strong Q3FY24 on the back of a strong NIM. Growth, however, has been tepid as LICHF recently transitioned its technology and organizational structure.
• FY24 has been a consolidation year due to technology and organizational changes; however, LICHF is setting up well to post strong growth in FY25.
• Among other things, affordable housing is going to be a key growth area going forward. Asset quality has been also improving and should further normalize with recoveries and upgradations.

• Ubiquiti (UI) reported fiscal second quarter (December) results showing sequential improvement in enterprise revenue while service provider remains a headwind for the business
• Ubiquiti introduced several products in the December quarter which started to gain customer traction. There could be momentum in the March quarter as customers become familiar with the new products
• The year over year revenue performance has been challenged with Ubiquiti lapping the initial customer enthusiasm about the Company having product in stock

• Gen Digital, like all businesses, experienced both ups and downs in its third quarter of 2024.
• Their fiscal year marked a tremendous opportunity for consumer cybersafety, with Genesis Digital consistently executing towards their goal.
• They reported cybersafety bookings growing to $1 billion, up by 4%, cybersafety revenue up 3%, and their 18th consecutive quarter of growth.

• Q423 earnings fell sharply, but were sufficient to hit FY23 guidance
• FY24 guidance also lower, but allows for a very wide range of outcomes
• Management raised concerns about Red Sea impact, L-T excess supply issues