In today’s briefing:
- TSMC (2330.TT; TSM.US): 4Q24 Outlook Is Around 10% QoQ Upside.
- Kokusai Electric (6525 JP): Sell-Off Presents Buying Opportunity
- Kolte Patil: New Launches Were Tepid In Q1 But FY25 Is On Track For Strong Performance
- HCG: Executing Well With Prudent Expansion
- Bajaj Finance: Mixed Q1, However Growth Trajectory Remains Intact
- UMC (2303.TT; UMC US): The Outlook for 4Q24 Is Somewhat Bearish.
- SMIC (981.HK): Surviving Amidst a Prolonged US-China Trade War
- Taiwan Tech Weekly: Qualcomm Eyes Bold Intel Acquisition; Global Semi Sales Strength Continues
- Weekly Consumer Tales: Shopee Youtube Tieup-China Home Price Slump-India’s Rising Gold, Iphone Sales
- Webtoon Entertainment: A Weakening USD Will Give A Lift To 3Q Earnings, Founder Picked Up 42K Shares
TSMC (2330.TT; TSM.US): 4Q24 Outlook Is Around 10% QoQ Upside.
- We anticipate that the upcoming 4Q24 will likely see a ~10% quarter-over-quarter (QoQ) upside.
- Among TSMC’s top clients are companies from the US, Taiwan, and Japan.
- Recently, we have heard that TSMC is reducing wafer quotations by about ~10% for 28nm and below, in order to adapt to the current environment.
Kokusai Electric (6525 JP): Sell-Off Presents Buying Opportunity
- Kokusai has dropped 44% from its July peak, offering a long-term opportunity at reasonably attractive valuations. Management’s guidance looks conservative.
- KKR has reduced its stake from 43.4% to 23.2%, increasing the float while indicating that it still sees a long-term opportunity. Applied Materials has bought 14.7% of the company.
- The completion of a new factory in Japan should double production capacity to meet demand from makers of AI processors, high-bandwidth memory, 3D NAND and power devices.
Kolte Patil: New Launches Were Tepid In Q1 But FY25 Is On Track For Strong Performance
- Kolte Patil reported a decent Q1FY25 with pre-sales of INR 711cr. This was lower than expected, however, adjusted for weak new launch activity, it was healthy.
- Q1FY25 pre-sales was mostly led by sustenance sales. New launches worth INR 1500cr have been initiated mostly in Q2FY25, thus will start reflecting in 2HFY25 pre-sales numbers.
- With highest-ever quarterly collection at INR 612cr, operating cash flows has remained strong. The balance sheet remains robust with negative net debt, allowing Kolte Patil to aggressively pursue new projects.
HCG: Executing Well With Prudent Expansion
- HCG reported a decent Q1FY25 with revenue growth of 16.7% YoY, adjusted for a discontinued center in Bangalore. Growth was robust across both established and emerging centers.
- Emerging centers (Kolkata, Borivali and South Mumbai) grew strong at 33% YoY while established centers also grew healthy at 14% YoY. All emerging centers, but South Mumbai center, are profitable.
- We estimate that HCG could post a PAT of around INR 280cr+ by FY27. An investment in HCG at the current level has potential to provide an upside of 85%+.
Bajaj Finance: Mixed Q1, However Growth Trajectory Remains Intact
- Bajaj Finance (“BAF”) reported a decent Q1FY25 with robust AUM growth, however, loan losses came in slightly elevated. AUM grew 31% YoY to reach INR 3,54,192cr.
- Annualized credit cost inched up to 2.1% vs 1.75-1.85% guided for FY25. This was led largely by weak collection efficiency. BAF is working on enhancing its collection infrastructure.
- BAF listed its housing finance subsidiary on Sep 16, unlocking value for the shareholders. It created history with highest-ever subscription amount and got listed at a premium of 114%.
UMC (2303.TT; UMC US): The Outlook for 4Q24 Is Somewhat Bearish.
- The outlook for 4Q24 appears somewhat bearish at the moment, though it has not been fully defined before the end of October.
- Taiwanese companies such as MediaTek Inc (2454 TT), Novatek Microelectronics Corp (3034 TT) and Realtek Semiconductor (2379 TT) continue to be the main drivers of demand for UMC.
- On a positive note, there are warnings against overly relying on chips from Chinese manufacturers due to US sanctions.
SMIC (981.HK): Surviving Amidst a Prolonged US-China Trade War
- SMIC’s revenue might be looking at around US$2bn in 4Q24 and it’s a bit reduction of GM from 3Q24 because of the seasonality at the year end.
- Since around 2019, US was putting an sanction on China, no matter how the argument is true.
- SMIC continued delivering 7nm chips, and even the 5nm chips could be further delivered using a similar method, although the yield rate may be a concern.
Taiwan Tech Weekly: Qualcomm Eyes Bold Intel Acquisition; Global Semi Sales Strength Continues
- Qualcomm Eyes Bold, Friendly Intel Acquisition Amid Intel’s Existential Crisis
- Global Semi Sales Strength Continues In July. How Long Can It Last?
- Asustek Soars, Uniquely Making Fresh 52-Week Highs Within PC Makers
Weekly Consumer Tales: Shopee Youtube Tieup-China Home Price Slump-India’s Rising Gold, Iphone Sales
- Welcome to Consumer Tales & Trends, your weekly roundup of the latest corporate developments, investment reports and sector events in the consumer industry.
- Sea (SE US) owned Shopee has partnered with YouTube to drive GMV growth and resist competition with TikTok, which has strengthened its regional presence through its stake in Tokopedia,
- India’s strong shopping appetite was reflected in robust gold purchases in August and high demand for the iPhone 16 launched last week.
Webtoon Entertainment: A Weakening USD Will Give A Lift To 3Q Earnings, Founder Picked Up 42K Shares
- Webtoon Entertainment, a Korean the world’s largest digital comics platform, has successfully completed IPO and private placement in June.
- The NAVER-backed storytelling platform has raised ~$359M and priced its IPO and concurrent private placement at $21.00 per share, at the top end of price range.
- However, Webtoon Entertainment shares significantly underperformed with shares down ~48% below IPO offer price.
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