Daily Brief Equity Bottom-Up: The Beat Ideas: Action Construction – A Bet on Manufacturing & Infrastructure Theme and more

• Action Construction – a leader in construction and heavy equipment theme is going for transformation with a defence foray and new product launches
• With strong guidance and the historical success of good execution makes a good bet on the current infrastructure and manufacturing theme
• The risk includes a slowdown in the election period and stiff competition from larger players

• We hosted a conference call recently with Himax management, the global leader in automotive touch display controllers; the company is experiencing a uniquely stronger automotive supply/demand environment than some peers.
• Discussed in detail how larger or more sophisticated interior displays can drive higher dollar content of display controllers per vehicle. We examine trending new car designs with much larger displays.
• We forecast an exponential jump-up in display controller content value per vehicle as beautiful display designs are becoming key USP for auto brands; Maintain our Structural Long rating for Himax.

• Sumber Alfaria Trijaya (Alfamart) booked a solid set of 1Q2024 results, a testament to its resilience during an election period, with the seasonal impact of Lebaran. 
• Minimarkets continue to be the winning format in Indonesia and Alfamart continued to gain share during 1Q2024, neck and neck with Salim-backed Indomaret if you include Alfamidi, Lawson, and Dan+Dan. 
• Alfamart will slow store openings to 1,300 stores this year after adding more than 1,800 outlets in 2023, with growth prospects remaining positive and profitability intact with a 25% ROE. 

• Groundhog Tech focuses on expanding 5G in SE Asia to drive growth in the region’s tech industry
• Skymizer introduces ET2 LPU and LLM system platform to enter the chip IP market and enhance its offerings
• Samsung increases staff at Japan lab for chip packaging innovations, while Malaysia plans to invest in chip ecosystem development

• Legend Holdings Corp H (3396 HK) owns 31% of Lenovo (992 HK) , the number one global PC maker
• Lenovo is a leader selling AI enabled PC’s globally.  Its server business is growing rapidly through strong demand for generative AI.  Legend is the leading AI seed investor in China.
• Technical pattern strong for Lenovo reaching a 9 year high.  Legend showing increasing momentum from an historic trough valuation level

• BQE reported Q1 financial results yesterday where the highlight was 114% YoY growth in its recurring operation services segment.
• Technical services revenue was weak however, leading to a slight miss on proportional revenue ($3.4M vs. $3.8M expected) and margins.
• Management’s outlook remained bullish, expecting operation services revenue continuing to grow rapidly and technical services revenue catch back up in H2.

• Zscaler missed billings estimates and lowered full-year revenue guidance due to extended sales cycles and deal closures delays
• Declining performances in the cybersecurity sector indicate potential underperformance for Crowdstrike
• Author predicts potential significant miss in Crowdstrike’s upcoming earnings based on current trends in the market

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.

• A high disease burden, high demand for chronic treatment, and an ageing population makes China an excellent opportunity for an established pharma company.
• A transition period following the inclusion of four large drugs in the NDRL creates an opportunity following a big de-rating.
• With 1/3 of the market cap in cash, a healthy payout ratio, and a FPE of under 8, CMS is one of the bargain beneficiaries in the Chinese healthcare space.

• Anticipate significant downward revision in Arlo Technologies’ long-term revenue guidance
• Management’s lack of transparency regarding key performance indicators may have misled investors
• Initiate a short position before Feb. 29th guidance update to benefit from potential share price decline.

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.

• VAALCO has brought online four new long (2.75 mile) lateral wells in Canada.
• Three wells delivered IP rates of 500 bbl/d while the fourth well flowed 350 bbl/d for a total production capacity addition of 1.85 mbbl/d.
• This is a good result and compares with individual IP30 oil rates of 374-444 bbl/d achieved at the two wells drilled in 2023.