In today’s briefing:
- Trip.com Q3 Quick Take: Net Inc > Consensus | Progress on Expenses | But Not a Game-Changer
- Taiwan Tech Weekly: Nvidia Results Today; Taiwan Market Surged But Why It Might Be Still Underowned
- Taiwan Dual Listings Monitor: TSMC Premium Slumps; CHT & ChipMOS at Rare Opportunity Levels
- 2024 High Conviction: Asahi Intecc (7747 JP)- Procedure Volume Recovery to Accelerate Growth
- [NetEase, Inc.(NTES US,BUY,TP US$138)TP Change]: Raise TP for Upcoming and Highly Anticipated Titles
- Panasonic (6752) | PAS-Ing the Keys
- As Expected from Our Earlier BOM/CoWoS Analysis, Consensus to Raise Nvidia Estimates Inevitably
- TSMC (2330.TT; TSM.US): N2 Technology Is Scheduled in 2025F.
- 2024 High Conviction: Air China (753 HK) – What Comes Down Must Go Up
- [Kanzhun Ltd.(BZ US, SELL, TP US$14.5) TP Change]: Growth Target Cannot Justify High Valuation
Trip.com Q3 Quick Take: Net Inc > Consensus | Progress on Expenses | But Not a Game-Changer
- Trip.com reported strong Q3 earnings, reflecting 2023’s ongoing tourism revival
- Net Income beat expectations, and company made progress on expense control
- But we don’t see “game-changing” numbers in Trip.com’s latest earnings release
Taiwan Tech Weekly: Nvidia Results Today; Taiwan Market Surged But Why It Might Be Still Underowned
- Nvidia Results Today U.S. Time — Taiwan Market Surged Recently on Improving AI/Semiconductor Expectations and Potential for Easing U.S.-China Tensions.
- Taiwan: Underowned, Yet Gaining on Peers. Our Fellow Insight Provider Analyzes Why Taiwan Might Still Be Underowned.
- Asia Geopolitics: Following Biden-Xi Meeting, Asia Is a Safer Place For Now.
Taiwan Dual Listings Monitor: TSMC Premium Slumps; CHT & ChipMOS at Rare Opportunity Levels
- TSMC: 7.4% Premium — Previous Short Has Worked, Now Wait For Better Levels
- ChipMOS: -2.0% Discount — Good Level to Go Long the Spread
- CHT: -1.2% Discount — Good Level to Go Long the Spread
2024 High Conviction: Asahi Intecc (7747 JP)- Procedure Volume Recovery to Accelerate Growth
- Asahi Intecc (7747 JP) is poised for multi-year growth through strong market demand for its technically superior guidewires, market leadership positioning, new product launches, and direct marketing initiatives.
- In FY24, Asahi Intecc aims to achieve revenue of ¥100B (+11% YoY), a significant milestone. The company targets revenue of ¥110B and an operating profit margin of 23–25% in FY26.
- Asahi Intecc is expected to be a continued beneficiary of global procedure volume recovery. The company is likely to achieve its medium-term business plan ahead of schedule.
[NetEase, Inc.(NTES US,BUY,TP US$138)TP Change]: Raise TP for Upcoming and Highly Anticipated Titles
- NetEase reported revenue/non-GAAP operating profit/GAAP net income inline/5.24%/16.2% vs. our estimation.
- The bottom-line beats were primarily attributed to the operational efficiency achieved through the usage of AIGC tools, and reduced S&M expenses resulting from organic traffic generated by high-quality game content.
- We maintain our BUY rating and raised TP to $138 for future game releases, implying 19x PE, and it is currently trading at 17x PE in 2024
Panasonic (6752) | PAS-Ing the Keys
- Panasonic Holdings Corporation (PHD) is entering a strategic partnership with Apollo Global Management, involving the partial sale of its ownership in Panasonic Automotive Systems Corporation (PAS).
- PAS, historically known for car stereos and navigation systems, has expanded into automotive electronics, holding approximately 15% of the global Automotive Digital Cockpit market with $3.6 billion in sales.
- Despite a bearish view on Panasonic, this deal is seen as a positive step toward streamlining the group structure and concentrating on core, sustainable growth areas.
As Expected from Our Earlier BOM/CoWoS Analysis, Consensus to Raise Nvidia Estimates Inevitably
- Nvidia reports/guides a better than expected 3Q/4Q23 sales, margin, and EPS on stronger AI GPU sales growth of nearly 3x.
- Nvidia reports a healthy 3.04 MOI, down 5% q/q and down 37% y/y and contributes nicely to account for 9% of TSMC sales.
- In spite of concerns on good news priced in, seasonal weaker 1Q24, and MI300X/ASIC alternative AI solutions, we expect more raise to come in 2024-2025E.
TSMC (2330.TT; TSM.US): N2 Technology Is Scheduled in 2025F.
- TSMC’s N2 technology is currently undergoing verification for a 256Mb SRAM, and it will be implemented in Hsinchu and Kaohsiung, Taiwan.
- The TSMC N3 technology capacity was 65kwpm in 3Q23, and the current version is N3B, which were adopted by Apple for the iPhone 15 this year.
- Both N3E and N2 only have 20 layers EUV masks.
2024 High Conviction: Air China (753 HK) – What Comes Down Must Go Up
- With P/B back to the 5-year average of 1.9x but ROE surpassing the last five years, Air China Ltd (753 HK) is our High Conviction pick for 2024.
- Lower US interest rates next year will reduce interest expenses as 18.7% of debt is USD-denominated. Potential Rmb appreciation vs. USD may bring significant exchange gain too.
- Supportive government policies will further drive domestic traffic. For international traffic, more capacity resumption will power recovery. Cathay Pacific Airways (293 HK) is another profit accelerator.
[Kanzhun Ltd.(BZ US, SELL, TP US$14.5) TP Change]: Growth Target Cannot Justify High Valuation
- BZ reported 3Q23 cash billing 0.8% higher than our est., revenue beat our estimate/consensus 5.2%/3.8%, non-GAAP NI beat our estimate/consensus by 103%/50%.
- Cost saving and investment income are the main reasons for bottom-line beat, which we think are not sustainable.
- Even BZ can deliver its “3 years with 100mn new users” target until 2025, we think its 20% earnings CAGR in 2023-25E still cannot justify its high valuation (TBC)
💡 Before it’s here, it’s on Smartkarma
Sign Up for Free
The Smartkarma Preview Pass is your entry to the Independent Investment Research Network
- ✓ Unlimited Research Summaries
- ✓ Personalised Alerts
- ✓ Custom Watchlists
- ✓ Company Data and News
- ✓ Events & Webinars
