Daily Brief Equity Bottom-Up: The Beat Ideas: Aarti Industries Ltd.- Capex and more

• Aarti Industries (ARTO IN)  is planning a huge capex of 2500 Cr, which will increase their PPE by more than 50% from current CWIP and new capex.
• Company is targeting 1450 to 1700Cr EBITDA in next year which is almost 1.5x to 2x of the existing EBITDA.
• Introducing new products in the value chain, which has high-value added and high margins.

• Chevron’s Q2 revenue grew 4.7% YoY but its net profit fell by 26.2%. Revenue beat estimates by 1% while EPS missed expectations by 13%.
• Production grew 11% YoY, driven by record output in the Permian, strong growth in the DJ Basin, and successful PDC Energy integration.
• Q2 capex rose 5.2% YoY to USD 4 billion from higher upstream investments and PDC asset spending. Free cash flow dropped 8% YoY to USD 2.3 billion.

• Siemens Energy is a spin-off from Siemens focused on gas, power, and renewables, positioning itself at the forefront of the energy transition.
• The company faces challenges, particularly in its renewables division, dealing with supply chain disruptions and technical issues.
• Mark Heiley, founder of The Analyst, discusses Siemens Energy’s history, impetus for demerger, and potential in addressing renewable energy challenges.

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• Tracy and Joe discuss their favorite chat GPT and Claude prompts and how they use them for both serious and fun purposes
• They acknowledge the limitations and risks of using AI in professional settings, especially in large companies like Goldman Sachs
• Marco Argenti, Chief Information Officer at Goldman Sachs, explains his role in ensuring the smooth operation of technology within the company and the evolving use of AI in the financial industry

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

• Ace Hardware Indonesia (ACES IJ) reported an impressive set of 1H2024 results with continuing momentum behind SSSG driven by promotional campaigns but margins remained stable at the same time.
• The company continues to open new format stores and renovate existing ones. It has also introduced new private label brands to drive growth and will introduce 15% new SKUs. 
• The company will be renamed PT Aspirasi Hidup Indonesia to reflect the separation from ACE US but we see the impact as minimal. Valuations remain attractive on 12.6x FY2025E PER.

• We believe Yum China remains the best long-term China catering play. 2Q24 results highlight the resiliency and agility of its business model and management to navigate tough environment.
• While cost optimization drove bottom-line beat, we share management’s view that it is not one-off exercise but will strengthen the company’s operation efficiency moat and market leadership.
• Macro concerns are well known and fully priced in in our view. Otherwise investors won’t have the opportunity to own the name for low double-digit P/E.

• TSMC achieves record-breaking performance in July thanks to high demand from key clients like Apple, Intel, and Nvidia.
• Chang Wah Electromaterials appoints new CEO and plans a major US$100M expansion in Malaysia through CWTC.
• South Korean micro LED component makers target the backplane market with AI-driven AR and VR technologies gaining popularity, while Taiwan’s PCB sector faces sustainability challenges in Southeast Asia.

• FY03/25 forecast: Revenue JPY2.30tn (+25.6% YoY), Operating profit JPY627.0bn (+37.4% YoY), Recurring profit JPY630.0bn (+36.0% YoY).
• R&D investment plan: JPY1.5tn over FY03/25–FY03/29, with JPY253.0bn in FY03/25 for new development buildings and equipment.
• Shareholder returns: JPY319.8bn total, including JPY79.9bn for share buybacks and JPY239.8bn for dividends.

• Astra International (ASII IJ) saw a slight decline in its core earnings in 1H2024, which was an admirable performance given the weakness in the auto market and commodities divisions.
• Offsetting the weakness in autos, Astra saw strong performances from its financing businesses for 4W, 2W, heavy equipment, and consumer finance, which booked +8% YoY growth in 1H2024. 
• Astra remains a key proxy for the overall Indonesian economy, with the diversity of its earnings exposure underpinning its resilience. Valuations are attractive, supported by a 9% FY2024E dividend yield. 

• Uniqlo Co. Ltd.’s strategy of raising prices in the face of rising costs has taken a toll on the Japanese clothing retailer’s bottom line in China due to growing competition and thriftier consumers.
• The fast-fashion chain’s Greater China profit and revenue both fell in local currency terms during the March-May period, dragged down by poor performance on the Chinese mainland and in Hong Kong, according to earnings results released last month by its parent company, Fast Retailing Co. Ltd. The results did not provide specific earnings figures for the period.
• Fast Retailing attributed the poor performance to lackluster consumer appetite, unseasonal weather and an insufficient product lineup to satisfy local customer needs.