In today’s briefing:
- Toridoll (3397): Restaurant Chain on a Lege
- LRCX. Mounting Tailwinds Bode Well For 2025 & Beyond
- KYEC (2449.TT): 1Q24F Was a Seasonal Dip, but 2Q24F Should Be Picking up Below 5% QoQ.
- China Healthcare Weekly (May.5) – Overvaluation in Primary Market, RDC to Be Hot Spot, Yiling Pharma
- Ginebra San Miguel (GSMI PM): Gleanings From The Last 12 Years of Annual Reports and Q1 2024 Bonanza
- Fluence Corp Ltd – New strategy proving up
Toridoll (3397): Restaurant Chain on a Lege
- Macro trends for restaurant chains are all negative: Food prices rising faster than restaurant unit prices, part-time wages rising faster than full-time.
- Toridoll’s same store sales resuming long-term underperformance trend that was broken only briefly during the pandemic.
- Stock trades at 3x the market average PBR, despite merely average RoE. Technical support has broken down.
LRCX. Mounting Tailwinds Bode Well For 2025 & Beyond
- Q124 revenues of $3.79 billion, pretty much flat sequentially both QoQ and YoY, and also marginally better than guidance.
- Looking ahead, the company forecasted Q224 revenues $3.8 billion, i.e. flat QoQ. Still no full year 2024 outlook
- Technology transitions such as GAA, Backside Power, molybdenum replacing tungsten & the rise of generative AI will all be growth drivers in 2025 & beyond
KYEC (2449.TT): 1Q24F Was a Seasonal Dip, but 2Q24F Should Be Picking up Below 5% QoQ.
- In 1Q24, it was reported that the revenue growth was -3.35% QoQ, slightly exceeding our expectation of a 5% QoQ decline.
- For 2Q24, revenue is expected to grow, but the increase is projected to be less than 5% QoQ.
- NVIDIA revenue in KYEC is forecasted to reach 15% by the end of 2024F, up from about 2% in 2023, driven by the increasing demand for AI.
China Healthcare Weekly (May.5) – Overvaluation in Primary Market, RDC to Be Hot Spot, Yiling Pharma
- Due to the overvaluation of pharmaceutical companies in the primary market, only foreign markets are able to “digest” such high valuation. So, various promising drugs are acquired by foreign investors.
- The field of RDC/RLT has attracted our attention, which could become the next hot area. Since nuclides are the most important bottleneck, domestic related enterprises will usher in opportunities.
- Shijiazhuang Yiling Pharmaceutical’s performance would continue to be under pressure in 24H1 but would rebound in 24H2 after “destocking”. Valuation/share price have not yet bottomed out. Don’t rush to bottom-fish.
Ginebra San Miguel (GSMI PM): Gleanings From The Last 12 Years of Annual Reports and Q1 2024 Bonanza
- Ginebra San Miguel (GSMI PM) is a monopoly in the gin business in the Philippines with a 97% marketshare trading at 7x PE FY24 ( 10-Yr Revenue CAGR 15% YoY).
- After its Q1 results, it has 32% of the market cap in net cash and investments, a dividend yield of>7%, and a 5/10 Yr average ROCE of 37%/22%.
- We summarize what we learned from the annual report released on April 15th. We saw a long-term trend of increasing prices, consistent margin growth, balance sheet improvement, etc.
Fluence Corp Ltd – New strategy proving up
- Fluence Corporation (ASX:FLC) specialises in the delivery of water and wastewater solutions in industrial, municipal and commercial industries across the globe.
- The company released an update on Q1 performance (note: FLC has a December balance date), that clearly validates the change in group strategy away from large construction and engineering projects, and towards smaller, higher margin, proprietary solutions, with a clear push into North America.
- The company has maintained full year guidance of US$90m-$100m of revenue and EBITDA of US$3.5m-$4.0m, a positive turnaround from the EBITDA breakeven position of FY23.
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