In today’s briefing:
- TSMC’s July Revenue Hits Record NT$256.95 Billion, Boosted by AI Servers and IPhone 16 Demand
- The Heat Is On: News Flow and Sentiment in CHINA / HONG KONG (August 10)
- Tencent (700 HK): 2Q24 Preview, Both Growth and Margin to Improve
- How a Traditional Toymaker Is Going Big on Digital Games
- Hindenburg Research Vs SEBI Chief: Allegations and Responses
- Alibaba (BABA US): 1Q25 Preview, Stable Growth and Margin, But Overly Impacted
- China Consumption Weekly (12 Aug 2024): Geely, Li Auto, JD.com, Alibaba, Tencent, DDL
- Recruit: Labour Markets Continue to Trend Down, but Recruit’s Efforts Pay Off in 1Q
- Tech Supply Chain Tracker (13-Aug-2024): SDC signs contract with Microsoft.
- Nippon Paint (4612 JP): Stable Execution in 2Q24; Outlook Unchanged
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TSMC’s July Revenue Hits Record NT$256.95 Billion, Boosted by AI Servers and IPhone 16 Demand
- TSMC’s July 2024 revenue reached NT$256.95 billion, up 23.6% MoM and 44.7% YoY. Year-to-date revenue grew by 30.5% to NT$1.52 trillion, driven by strong orders from Apple, Intel, and Nvidia.
- TSMC forecasts Q3 revenue of $22.4-23.2 billion, anticipating over 25% full-year growth. July revenue already at 35% of Q3 estimates. Analysts advise against assuming these results for the entire quarter.
- TSMC is capitalizing on AI and mobile demand, with analysts maintaining an “Outperform” rating with average upside of 14%, noting potential growth from 5G, HPC, and automotive sectors.
The Heat Is On: News Flow and Sentiment in CHINA / HONG KONG (August 10)
- The epicenter of the Asian ETF selloff last week was Japan, recording an outflow of nearly $100B from equity funds taking the net flows back to breakeven for the YTD.
- Seazen (Formerly Future Land) (1030 HK) and Swire Properties (1972 HK) had positive announcements while New Oriental Education & Techn (9901 HK) and Yum China Holdings (9987 HK) announced earnings.
- China Unicom Hong Kong (762 HK) shares are under pressure as the telco sector goes through a price war in cloud services and investors take profits from high dividend names.
Tencent (700 HK): 2Q24 Preview, Both Growth and Margin to Improve
- We believe total revenue will grow by 9% YoY and game revenue began to rise in 2Q24.
- We believe the operating margin will continue to improve YoY in 2Q24 after the seven-year high in 1Q24.
- We set the upside at 35% and the price target at HK$496 for the end of 2025.
How a Traditional Toymaker Is Going Big on Digital Games
- Monopoly was originally created as a critique of capitalism but became a massively successful business itself.
- Hasbro has grossed over $3 billion in revenue from the app version of Monopoly.
- Hasbro CEO, Chris Cox, will be discussing the development of Monopoly and other games on the podcast.
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Hindenburg Research Vs SEBI Chief: Allegations and Responses
- Hindenburg Research released a report on SEBI Chief Madhabi Puri Buch, accusing her of conflicts of interest, particularly about the Adani Group.
- Analysis of Responses given by Madhabi & Dhaval Buch, SEBI, 360 One and Adani.
- Analysis of events and allegations made by Hindenburg on Madhabi and critical assessment on that.
Alibaba (BABA US): 1Q25 Preview, Stable Growth and Margin, But Overly Impacted
- We believe revenue will increase by 8% YoY in 1Q25, as most business lines have been growing.
- We believe the operating margin will be stable, as cost cut plans came to an end.
- We set an upside of 94% for March 2025, as we believe the stock is overly impacted.
China Consumption Weekly (12 Aug 2024): Geely, Li Auto, JD.com, Alibaba, Tencent, DDL
- The retail deliveries of NEV (new energy vehicle) increased by 37% YoY in July.
- One of Alibaba’s supermarket chains, Freshippo, will sell its OEM goods, on Lazada.
- Tencent will formally start the game, Arena Breakout: Infinite, in August.
Recruit: Labour Markets Continue to Trend Down, but Recruit’s Efforts Pay Off in 1Q
- Recruit Holdings (6098 JP) ’s share price has been up more than 40% YTD driven by better-than-expected earnings and an announcement to buy back ¥600bn worth shares.
- The company’s 1Q earnings beat consensus and showed some recovery across all business segments, however, the labour markets are heading towards a decline.
- It seems that the company has run out of investment options, and we would not rush to make an entry as worst is not over yet for the company.
Tech Supply Chain Tracker (13-Aug-2024): SDC signs contract with Microsoft.
- SDC partners with Microsoft while VCs in India prioritize deep tech startups for innovation and growth.
- Polish startup SEEDiA leads in smart urban infrastructure as AI hype in smart manufacturing is questioned for realistic outcomes.
- Non-a-Si panels expected to dominate auto displays 2024-2029 as Indian opto-semiconductor maker acquires US-based IC equipment company.
Nippon Paint (4612 JP): Stable Execution in 2Q24; Outlook Unchanged
- Nippon Paint Holdings (4612 JP)‘s 2Q24 was largely uneventful, with sales up 5.4% yoy and net profit up 7.3% yoy.
- Management maintained its full-year guidance of Y184bn operating profit target in 2024 (10% growth vs. 2023).
- China was a bright spot with operating profit up 30% yoy and made up 35% of total operating profit of the company.