Daily Brief Equity Bottom-Up: Taiwan Dual-Listings Monitor: TSMC 33% Growth and more

• TSMC: +15.9% Premium; Sales Rose 33% YoY in August & Headroom Increased
• UMC: +1.8% Premium; Largest Monthly Decrease in ADR Headroom, Has Consistently Been Decreasing Since May
• ASE: +2.0% Premium; At Current Level Can Consider Going Long the Premium

• Krsnaa Diagnostics (KRSNAA IN) expands into B2C, adds new pathology labs, and secures major government contracts for further growth.
• Growth in PPP and retail sectors, improved margins, and expanding service offerings solidify market leadership.
• Krsnaa’s aggressive expansion strategy and diversification indicate strong long-term growth potential with new B2C trajectory and Asset Light Model Expansion.

• Welcome back to the portfolio updates series! This month, I enjoyed a long vacation with my family, spending three weeks traveling through Italy by car.
• We began our journey from our home near Munich, which allowed us to traverse the entire country from north to south and back again.
• We entered Italy through South Tyrol and drove down to Tuscany, where we spent a week. Afterward, we continued our journey all the way down to Puglia, where we stayed for ten days before making the return trip.

• Global smartphone sales are anticipated to rise in Q2 2024, presenting an opportunity for Taiwanese firms to act quickly.
• IBM’s Kyndryl spinoff is focusing on addressing India’s cybersecurity talent shortage, signaling the need for immediate action.
• Apple is prioritizing user privacy in its slow launch strategy, while Huawei revolutionizes mobile innovation with a triple-fold smartphone.

• NIO Motors (NIO) reported C2Q24 top line, non-GAAP operating loss and GAAP net loss in-line, narrower and narrower vs. our estimate, and in-line, narrower and in-line vs. consensus. 
• The brightest spot of the result is gross margin due to both vehicle and service gross margin improvements. 
• We keep rating at SELL and raise TP to US$1 to reflect better OPEX control.

• TSMC Extends Global Foundry Dominance Amid 33% Sales Surge – A Buy on Weakness Despite Market Concerns
• Apple ‘Glowtime’ AI Announcements: Mixed Analyst and Media Reactions May Overlook Key Advantage — Apple Is Best Positioned to Seamlessly Integrate AI Into Your Smartphone Experience
• Taiwan Market Gainers & Losers: Consumer Electronics & Memory Names Some of the Hardest Hit

• Market consensus is unrealistic as it expects China Tourism Group Duty Free (1880 HK) to record 32.1% YoY and 14.6% HoH earnings growth in 2H24. More downgrade risk ahead.
• Average per-customer duty-free sales in Hainan dropped by 19.2% YoY in Jul, indicating the negative wealth effect and deteriorating middle-class spending appetite.
• Overseas duty-free sales to Chinese residents surged by almost 50% YoY in Aug, implying a diversion effect which is also detrimental. 

• Speculative liquidation of crude oil positions opens up an opportunity
• A seasonally strong period for crude tanker rates coming up
• Company option scheme for senior management approved. Strike above current price

• CYND Co., Ltd. is a dominant player in the reservation management software for beauty salons in Japan, with 90% of its revenue coming from recurring contracts
• The company has high barriers to scale and has acquired its second largest competitor, effectively eliminating competition
• CYND has the potential to significantly increase its revenue over the next decade, led by its co-founders with strong insider ownership, and is currently valued at JPY 4.1bn with a projected net 10-year IRR of 24.1% for Sun Mountain.

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• Indosat (ISAT IJ) remains optimistic about the outlook for its core mobile business as it expands into rural areas and simultaneously increases ARPUs, with the growing use of AI tools. 
• The company also seeks to become an AI Native Telco whilst also pursuing a separate AI business through its tie-up with NVIDIA, and building a data centre edge through BDx.
• Indosat Tbk PT (ISAT IJ) is also optimistic about its home broadband business projecting 2m subscribers by 2028. Valuations remain attractive relative to peers, especially given ISAT’s growth outlook.