In today’s briefing:
- Sony’s (6758) Bold Move into Web3: What Is Soneium?
- PC Partner: Relocating HQ and Listing to Singapore, 81% of Market Cap Is Cash
- Intel. Could Things Get Any Worse? You Bet. Here’s How.
- Apple Restructures App Store Amid EU Regulations, Developer Dissatisfaction, and Market Pressures
- Hyundai Motor India: Feeling the Heat as SUV Rivals Surge
- China Tourism Group (601888 CH | BUY | CNY): When Falling Knife Turns into Value Investing
- Zai Lab (9688 HK): Vyvgart Is Not the De-Risking Tool; Future Is Still Uncertain
- [Atour (ATAT US, BUY, TP US$36) Review]: Retail Business Bigger and Longer than Market Thinks
- Tech Supply Chain Tracker (05-Sep-2024): UK car market rebounds, EV growth shines at LCV Show.
- Is Dollar General in Trouble? New Outlook, ‘Financially Constrained’ Customers Spark Major Concerns!
Sony’s (6758) Bold Move into Web3: What Is Soneium?
- Sony launches Soneium, a blockchain platform developed with Startale Labs, as a Layer 2 Ethereum solution to enhance transaction speed and scalability.
- Soneium aims to bridge Web2 and Web3, leveraging Sony’s vast intellectual property in entertainment and technology for broad consumer adoption.
- Backed by Sony’s resources, Soneium focuses on user-friendly blockchain technology, offering financial and technical support through its Soneium Spark incubation program.
PC Partner: Relocating HQ and Listing to Singapore, 81% of Market Cap Is Cash
- PC Partner showed a significant improvement in its 1H24 results YoY.
- The company will be relocating HQ to Singapore and move its primary listing from HK to Singapore. If this move is successful, it will improve AI chips allocation from Nvidia.
- Why Singapore? PC Partner is preparing itself for a future where China/USA political relationship does not improve.
Intel. Could Things Get Any Worse? You Bet. Here’s How.
- Intel faces two class action lawsuits, one of which has the potential to be many times worse than the “Pentium Flaw” fiasco in 1994
- The resignation of Lip-Bu Tan from Intel’s BoD is a significant blow particularly in view of his rumoured disagreements with the CEO and other BoD members
- Intel’s below book value market cap presents an attractive opportunity for any consortium with the vision to extract the value that Gelsinger’s IDM 2.0 gambit has failed to unlock
Apple Restructures App Store Amid EU Regulations, Developer Dissatisfaction, and Market Pressures
- Apple’s App Store contributed to the $85.2 billion service segment revenue in 2023, with an impressive gross margin of 70.2%, making it a crucial profit driver within Apple’s Services segment.
- The restructuring splits the App Store division into two teams: one to oversee the traditional App Store, and another to manage new, legally mandated alternative app distribution channels.
- Developers who choose to bypass the App Store may incur a substantial Core Technology Fee, potentially amounting to hundreds of thousands of dollars, reflecting the cost of maintaining Apple’s ecosystem.
Hyundai Motor India: Feeling the Heat as SUV Rivals Surge
- Hyundai Motor India reported an 8% decline in monthly dispatch volumes ahead of India’s festive season, coinciding with a sharp increase in shipments by competitors in the SUV space.
- Mahindra & Mahindra (MM IN) , Toyota Kirloskar Motor ( Toyota Motor (7203 JP) JV), and Kia Corp (000270 KS) each posted high double-digit volume growth in August.
- Overall, India’s domestic Passenger Vehicle sales growth for the April-August period has slowed year-on-year after two years of strong post-COVID momentum.
China Tourism Group (601888 CH | BUY | CNY): When Falling Knife Turns into Value Investing
- China Tourism Group Duty Free Corp Ltd (601888 CH) (CTG) share price on downtrend due to negative sentiment, increased competition, and Chinese being more frugal in their consumption
- 2024 and 2025 consensus earnings declined by -2%/-17%, but CTG will deliver +16% YoY earnings growth in 2025. CTG remains a growths stock, a fact we think many investors forget!
- We revise our target price to CNY71.3 pegged to 18.5x FY25 PE (1.5 standard deviation below mean). We think the share price decline is overdone and ignores its strong fundamentals.
Zai Lab (9688 HK): Vyvgart Is Not the De-Risking Tool; Future Is Still Uncertain
- Zai Lab (9688 HK) recorded Vyvgart revenue of $10M, $13M, and $23M in 4Q23, 1Q24, and 2Q24, respectively. The company raised 2024 Vyvgart revenue guidance to $80M from $70M earlier.
- Despite strong momentum from Vyvgart, Zai Lab still has a lot of pain points. Decelerating revenue growth from Zejula is one of them.
- Due to its in-licensing business model, Zai Lab has lower gross profit margin of 64–65%, compared with ~80% for a typical innovator biotech company.
[Atour (ATAT US, BUY, TP US$36) Review]: Retail Business Bigger and Longer than Market Thinks
- Atour (ATAT) reported C2Q24 revenue 2.2%/8.3% higher than our est./cons., and non-GAAP NI 6.8%/12.3% higher than our est./ cons, driven by stronger hotel supply chain sales and better retail efficiency.
- We keep 2024 revenue growth estimate at 53% YoY vs. the uplift company guidance at 48%-52% YoY. Potential catalysts are stronger off-season travel,old hotel renovation scheme, and new brand launch.
- We keep TP unchanged at US$36/ADS and maintain the BUY rating.
Tech Supply Chain Tracker (05-Sep-2024): UK car market rebounds, EV growth shines at LCV Show.
- UK car market sees resurgence as electric vehicles gain popularity at LCV Show, driving up sales and interest in sustainable options.
- SAIC Motor struggles with falling profits and tariffs on electric vehicles, putting financial strain on the company’s operations.
- IEDC fosters stronger economic ties between Taiwan and the region through a new office opening, promoting business opportunities and enhancing cooperation.
Is Dollar General in Trouble? New Outlook, ‘Financially Constrained’ Customers Spark Major Concerns!
- Dollar General’s shares have plummeted after the company slashed its sales and profit forecasts for the full year, highlighting the financial struggles of its lower-income customers.
- The retailer, which primarily serves rural areas, now expects fiscal 2024 same-store sales growth of 1.0% to 1.6%, down from its previous forecast of 2% to 2.7%.
- Earnings per share are projected to be between $5.50 and $6.20, significantly lower than the prior estimate of $6.80 to $7.55.
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