In today’s briefing:
- TSMC (2330.TT; TSM.US): A16 Technology Continues to Evolve in 1H27.
- Pinduoduo（PDD US): Growth Stock Priced as Value Play
- BYD Electronic (285 HK): Will HSI Inclusion Be a Kiss of Death?
- Taiwan Dual-Listings Monitor: TSMC Spread Trading at New High Range, CHT Spread at Short Levels
- China Consumption (20 May 2024): Leapmotor, Stellantis, GAC, Honda, Li Auto, ZTO, Tencent Music
- China Healthcare Weekly (May.19)- Decoupling Deadline with WuXi,Biotech Classification,Deals Cooling
- Hamamatsu Photonics (6965 JP): Look Cautiously to the Long Term
- Arista Networks: Artificial Intelligence (AI) Networking
- Bangkok Dusit Medical Services (BDMS TB): Thai and International Patients Drives 1Q24 Result
- The Hershey Company: How Are The Latest North America Confectionery Market Developments Impacting Them? – Major Drivers
TSMC (2330.TT; TSM.US): A16 Technology Continues to Evolve in 1H27.
- After Taiwan Semiconductor (TSMC) – ADR (TSM US) N2 technology in 2H25F, A16 technology will be pilot-production in 2H26 and likely unveiled in around 1H27.
- TSMC A16 technology will be utilizing best-in-class backside power delivery solution.
- Si Photonics co-exists with traditional Substrates packages, linked with fiber.
Pinduoduo（PDD US): Growth Stock Priced as Value Play
- We are more bullish on PDD’s 1Q24 results on the back of better monetization of domestic e-commerce business and fast and quality growth of TEMU.
- We now expect 1Q24 adjusted earnings to almost double yoy to RMB20 billion, much higher than our previous estimate of 50% yoy growth and exceeding consensus by ~30%.
- Moreover, we believe earnings growth will be steady throughout 2024 instead of slowing down as we thought. 10x FY24 earnings against 80% yoy growth lead us to see 50%+ upside.
BYD Electronic (285 HK): Will HSI Inclusion Be a Kiss of Death?
- While historically many new inclusions to the HSI have performed disappointingly after their addition, BYD Electronic (285 HK) looks unlikely to follow such a pattern.
- Its share price has underperformed YTD, absolute PER valuations are not stretched and forward P/B multiple is only at the historical average level. These provide a good buffer.
- Its industry and business are not at structural and cyclical peaks, with further growth prospects from AI-enhanced products and solutions. A 33% surge in 1Q24 earnings also adds comfort.
Taiwan Dual-Listings Monitor: TSMC Spread Trading at New High Range, CHT Spread at Short Levels
- TSMC: +17% Premium; Has Remained Above 15% for Over Nearly Two Weeks
- ASE: +11.8% Premium; We Continue to View 14%+ as Range to Short From
- CHT: +0.6% Premium; Can Consider Shorting the Spread at Current Level
China Consumption (20 May 2024): Leapmotor, Stellantis, GAC, Honda, Li Auto, ZTO, Tencent Music
- Stellantis invested in Leapmotor and their joint venture will sell electric cars in Europe.
- Two vehicle producers, GAC and Li Auto, are dismissing employees.
- Tencent Music’s music revenue grew by 43% YoY in 1Q24.
China Healthcare Weekly (May.19)- Decoupling Deadline with WuXi,Biotech Classification,Deals Cooling
- In 24Q1, the innovative drug projects and medical device projects ranked top two in domestic investment and financing deals, but investment in the field of AI cooled down.
- For biotech that located in China and only for China markets, it’s hard for them to generate good returns. It is recommended not to spend too much time on them.
- As the US House Committee advances the BIOSECURE Act to restrict WuXi AppTec/WuXi Bio last week, we listed some points worth the attention at this stage.This is far from over.
Hamamatsu Photonics (6965 JP): Look Cautiously to the Long Term
- The company has slashed FY Sep-24 guidance after missing 1H sales and profit targets by wide margins. Dividend maintained, 2-for-1 split planned and buyback under consideration.
- Capex has been cut, reflecting lower growth expectations. R&D also. Inventory adjustments will eventually be completed, but Chinese competiton will remain a problem.
- The share price has dropped 30% in the past year and 10.5% since May 8, putting the shares on 27 times EPS guidance. Still not cheap, but getting there.
Arista Networks: Artificial Intelligence (AI) Networking
- Arista Networks is well-positioned to take advantage of the rapidly growing opportunities in the artificial intelligence (AI) and cloud computing landscape.
- For the first quarter of 2024, the company reported revenue of $1.57 billion, representing a 16.3% year-over-year growth.
- Contributing a substantial 16.9% of this revenue was services and software support renewals.
Bangkok Dusit Medical Services (BDMS TB): Thai and International Patients Drives 1Q24 Result
- Bangkok Dusit Medical Services (BDMS TB) posted double-digit growth revenue, EBITDA, and net profit in 1Q24. International and Thai patients reported revenue growth of 12% and 10%, YoY, respectively.
- EBITDA grew at a faster pace of 13% YoY to THB6.8B, due to tight cost control. Net profit of THB4.1B beat estimates.
- BDMS opened one secondary care hospital with 113 registered beds in March. Phuket Cancer Center is expected to start operation in 3Q24.
The Hershey Company: How Are The Latest North America Confectionery Market Developments Impacting Them? – Major Drivers
- The Hershey Company reported optimistic market share trends in their Q1 2024 earnings.
- The firm has seen strong performances especially in seasonal sales and takeaway, with innovation being a significant growth driver.
- Its Reese’s Caramel product was quite popular among customers, with it not only being well received, but also helping drive strong merchandising especially around the Super Bowl season.
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