In today’s briefing:
- Synopsys Inc.: How Is It Tackling The China Market & Dealing With Macro Uncertainties? – Major Drivers
- General Motors Abruptly Pulls The Plug On Cruise
- A Comparison of KOSPI 200 and S&P 500 Companies Performances in 2024
- China New Higher Education (2001 HK): 2.2x PE, 22% Yield, Worth Taking the Risk?
- Oracle’s Astonishing SaaS Expansion Promises to Catapult Stock Prices! – Major Drivers
- Bank OZK – Most CRE Loans/Total Loans of Any US Bank & Dramatically Worsening Credit Metrics
- C3.ai: Will Its Expansion in Federal & Defense Sectors Be A Breakthrough Move? – Major Drivers
- Adobe Inc.: Strategic Product Tiering & Monetization As A Pivotal Factor Driving Growth! – Major Drivers
- IMMR: The Business of Profits
- Tech Supply Chain Tracker (19-Dec-2024): XPeng, Nio drop Nvidia Thor chip due to delays.
Synopsys Inc.: How Is It Tackling The China Market & Dealing With Macro Uncertainties? – Major Drivers
- Synopsys reported a strong performance for its fourth quarter and fiscal year 2024, achieving record revenue and earnings.
- The company crossed the $6 billion revenue mark, with a 15% year over-year increase, driven by its strategic focus on high-growth segments like AI, silicon proliferation, and software-defined systems.
- Synopsys has expanded its bottom line significantly, with EPS growing at a 24% CAGR over the past five years.
General Motors Abruptly Pulls The Plug On Cruise
- GM announced it will no longer continue to fund its loss making Cruise subsidiary, effectively ending its RoboTaxi ambition. Market reaction? Nothing.
- Microsoft has already announced it will write off its $800 million investment made back in 2021 when Cruise was valued at $30 billion
- Root cause? The tsunami that was triggered by Cruise’s botched response to an accident in October 2023.
A Comparison of KOSPI 200 and S&P 500 Companies Performances in 2024
- S&P500 is up 27.7% YTD, outperforming KOSPI which is down 6.9% YTD. Global fund flow continues to pour into top quality US stocks such as Palantir, Tesla, and NVIDIA.
- The top 20 best performing stocks in KOSPI 200 are up on average 106.8% YTD. However, the remaining 180 stocks in KOSPI 200 are down on average 9.2% YTD.
- There is no large Palantir-like company that deals with AI/data analytics in Korea. However, large cap IT services and telcos in Korea are increasingly expanding their AI/data analytics related business.
China New Higher Education (2001 HK): 2.2x PE, 22% Yield, Worth Taking the Risk?
- China New Higher Education (2001 HK) has rebounded by 40% from its post-result trough but was still down by 34% from the pre-FY24 result level, despite healthy FY24 results.
- Net profit is healthy, but it is the all-scrip final dividends that dragged on the share price. Concerns are on higher gearing, but at 69.9%, this is still acceptable.
- The consensus earnings forecast of a 6% growth in FY25 and FY26 seems not excessive. At 2.2x PER and 22% yield for FY25, it seems worthy of the risks.
Oracle’s Astonishing SaaS Expansion Promises to Catapult Stock Prices! – Major Drivers
- Oracle Corporation’s recent earnings for the second quarter of fiscal year 2025 highlighted a strong performance driven by significant growth in their cloud services segment.
- Total revenue reached $14.1 billion, reflecting a 9% increase from the previous year, while non-GAAP earnings per share were reported at $1.47, marking a 10% growth year-over-year.
- Such results slightly surpassed expectations, given the challenging currency fluctuations owing to a strengthening U.S. dollar.
Bank OZK – Most CRE Loans/Total Loans of Any US Bank & Dramatically Worsening Credit Metrics
- Bank OZK (OZK US) has more CRE loans to total loans of any US bank at 72% in 3Q24
- Risks of CRE loans are real now and historically, they have high loss rates, in bad times
- The bank is seeing a surge in NPAs , but its credit costs are lagging – make up in 4Q24?
C3.ai: Will Its Expansion in Federal & Defense Sectors Be A Breakthrough Move? – Major Drivers
- C3.ai reported its second-quarter fiscal year 2025 results, reflecting a continuation of strong performance with several noteworthy highlights and challenges.
- The company posted total revenue of $94.3 million, representing a 29% year-over-year increase, which exceeded the high end of their revenue guidance.
- Notably, subscription revenue rose by 22% to $81.2 million, making up 86% of total revenue, while professional services revenue was $13.2 million.
Adobe Inc.: Strategic Product Tiering & Monetization As A Pivotal Factor Driving Growth! – Major Drivers
- Adobe’s recent earnings release reflects a period of consistent growth and innovation, demonstrating both strengths and challenges.
- For the fiscal year 2024, Adobe achieved record revenue of $21.51 billion, marking an 11% year-over-year increase.
- This growth was fueled by robust performance across its business segments, most notably within its Digital Media and Digital Experience divisions.
IMMR: The Business of Profits
- IMMR reported fiscal Q2 (October) after having changed its fiscal year end to April. IMMR changed its fiscal year end after the purchase of approximately 11 million shares of BNED.
- The quarter was continuation of IMMR reporting increased revenue from fixed rate royalties while per unit royalties declined slightly from the prior year.
- IMMR reported revenue of $14.1 million compared to our estimate of $10.1 million. We were not expecting a large bump in fixed royalties like IMMR reported in the quarter.
Tech Supply Chain Tracker (19-Dec-2024): XPeng, Nio drop Nvidia Thor chip due to delays.
- XPeng and Nio abandon Nvidia Thor chip over delays, impacting production schedules and development timelines.
- Wistron set to establish new plant in Vietnam in 2025, with potential expansion of current facilities, boosting local economy.
- MSI launches made-in-India notebooks as part of market expansion strategy, tapping into growing demand for tech products in the region.
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