Daily Brief Equity Bottom-Up: Taiwan Tech Weekly: Hit Hard By AI/Tech Pullback; Watch UMC and more

• Top Gainers/Loser: Taiwan Tech Stocks Hit Hard Last Week By Global AI/Tech Pullback
• Key Events This Week: Major Earnings Week Including UMC, Mediatek, Realtek, AMD, Microsoft
• TechChain Insights: Call with Silicon Motion; QLC NAND Emerging as Key Enabler for AI Devices 

• We noticed some positive updates about Ascentage as competitors’ products have encountered varying degrees of challenges. However, the top priority for Ascentage is to get the approval of APG-2575 first.
• China Resources Boya has agreed to buy Green Cross for RMB1.82 billion, with premium of 160%.We think this is the right strategy considering the high barriers in blood products industry. 
• Weigao’s performance was negatively affected by VBP and anti-corruption campaign. The unsatisfactory share price performance is closely related to its business model. 2x P/S is reasonable for Weigao.

• The Texas Instruments had a mixed Q2, reporting revenue of $3.8 billion, a 4% sequential increase but 16% YoY decline.
• This contrasted with their optimistic revenue predictions for Q3, forecasting in the range of $3.94 billion to $4.26 billion.
• This could have been due to the decline in Analog revenue by 11% YoY, Embedded Processing by 31%, and its Other segment by 22% from YoY quarter.

• In Q1FY25, Cipla Ltd (CIPLA IN) posted 7% YoY revenue growth to INR66.9B. Despite surging R&D expenditure, EBITDA increased 26% YoY to INR17.2B, leading to 154bps margin expansion to 25.6%.
• Record high quarterly revenue in the U.S. market, double-digit revenue growth in India branded prescription business, and continued strong momentum in South Africa drove overall performance.
• Cipla is well-positioned for mid-to-high single-digit revenue growth through FY27. Sitting on a robust cash balance of INR90B, Cipla is eyeing on M&A. Valuation still looks reasonable.

• Credit metrics continue to improve, with NPLs down to INR404bn in 1Q25 from INR458bn YoY and from INR407bn QoQ
• Net loan growth continues to rise by about INR1tr each quarter, with net loans at INR9,465bn in 1Q25 up from INR8,554bn YoY and INR9,318bn QoQ
• There are pressures on costs and margins, so the story is not all perfect, with NIM pressure potentially to reverse as LDR expands

• Lonking Holdings (3339 HK)‘s positive profit alert for 33-50% YoY increase in 1H24 earnings suggests that market consensus of just 10% full-year growth is way too conservative.  
• Industry sales momentum for excavators and wheel loaders has accelerated in the last three months. A low base in 2H24 will mean an even stronger recovery.
• Government supportive measures for equipment renewal and faster special purpose bond issuance will fuel demand too. We estimate net cash equals 90% of the share price. 

• Xiaomi’s shipments increased by double digits, but Apple’s shipments decreased in China in 2Q24.
• Alibaba’s Taobao and Tmall platforms have waived the AliPay fee for retailers.
• Amazon will open a store on JD.com next Black Friday.

• Prosus has become more shareholder-friendly and responsive, driven by management remuneration incentives
• The drop in discount from 2022 to 2023 was influenced by these incentives, but the lack of their extension for 2024 has led to an increase in the discount to over 40%
• Investors have an asymmetrical opportunity to benefit from Prosus’ discounted value, especially with its valuable stake in Tencent

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.

• Due to the low base in 2023, net profit in 2024 would show restorative growth, with net profit attributable to owners of the company reaching RMB5+ billion, up 33% YoY.
• Different from Sinopharm/CRP whose assets are scattered in different listed companies, pharmaceutical assets/resources of SH Pharma are integrated within the Company, so the intrinsic value of this model is greater.
• SH Pharma is undervalued. Interim dividend will be added in 2024.Future dividend ratio would remain 30+%.SH Pharma as a SOE takes the lead in responding to policies to increase dividends.

• The updated business analysis of Kimberly-Clark reveals a mixed financial landscape rooted in strategic endeavors and market-specific challenges, which calls for a calculated evaluation for potential investors.
• During the second quarter of 2024, Kimberly-Clark underscored a strategic focus on driving volume and mix-driven gains, particularly evident in significant geographies such as the U.S., China, and the U.K. This initiative aligns with their innovation-led growth strategy aiming at revitalizing their “Powerhouse” categories, which is indicative of their proactive response to market demands and consumer preferences.
• 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.