In today’s briefing:
- We Need To Talk About New World (17 HK)
- TSMC (2330.TT; TSM.US): Benefiting from Intel (INTC.US) Skipping 20A Process.
- Baidu’s Launch of Advanced AI Model Ernie 4.0 Turbo
- Toyota Motor (7203 JP): Scripting an India Success Story with Suzuki Tie Up
- Episode 83: The Earnings Heard Round the World (NVDA)
- Narrative and Numbers | Consumer & MSME Finance | FY24
- Erajaya Swasembada (ERAA IJ) – Affordability Rocks
- Shares of Cooling Firms Have Turned Red Hot on Record Setting Scorching Heat
- Workday Inc.: An Enhanced Global Workforce Strategy
- Can Snowflake Truly Capitalize On The AI-Linked Opportunities That Lie Ahead? – Major Drivers
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We Need To Talk About New World (17 HK)
- 0.08x P/B. That’s where New World Development (17 HK) is currently trading. Less than half the P/B of the next comparable real estate peer.
- So, what’s going on? Announcing an expected HK$19-20bn loss for FY24 last week didn’t help matters. Shares are down 14% this week and 85% since Covid.
- Landlords need to drastically cut rents to jumpstart the retail sector. That translates to further impairment losses for property developers.
TSMC (2330.TT; TSM.US): Benefiting from Intel (INTC.US) Skipping 20A Process.
- Taiwan Semiconductor (TSMC) – ADR (TSM US) will benefit from Intel Corp (INTC US)‘s decision to use their 20A processor, named Arrow Lake.
- Intel plans to stick with the 18A process and has identified about 5 potential customers.
- As of now, TSMC remains the primary source for technology deliveries.
Baidu’s Launch of Advanced AI Model Ernie 4.0 Turbo
- Baidu has reported its financial results for the second quarter of fiscal year 2024, showcasing resilience with its Baidu Core which posted a modest revenue growth to RMB 26.7 billion.
- This growth was driven by the accelerating performance in the AI Cloud sector, which somewhat counterbalanced the drag provided by the online marketing segment.
- Notably, there was an 8% year-over-year increase in non-GAAP operating profit for Baidu Core, reflecting continued operational efficiencies.
Toyota Motor (7203 JP): Scripting an India Success Story with Suzuki Tie Up
- Toyota Kirloskar, Toyota Motor‘s 89%-owned India JV, recorded a 65% rise in revenues and 240% jump in profits to around USD575 million in FY2024 following 48% increase in units sold.
- The company has continued to maintain its strong growth momentum in FY2025 YTD, with wholesale volumes up 36% YoY.
- Successful launch of rebadged Suzuki models, ramped-up production and customer-friendly initiatives have supported Toyota’s accelerated volume growth in India.
Episode 83: The Earnings Heard Round the World (NVDA)
- Mispronunciations of Nvidia can be a red flag for some investors
- The volatility in Nvidia stock after earnings was not surprising due to high trading volume and options activity
- Buy side expectations and unofficial whisper numbers can impact stock performance in high profile companies like Nvidia
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Narrative and Numbers | Consumer & MSME Finance | FY24
- This Insight focuses on lenders operating in consumer finance, including MSME-focused NBFCs.
- Companies in focus include Bajaj Finance Ltd (BAF IN), Poonawalla Fincorp (POONAWAL IN),SBFC Finance Limited (SBFC IN) & MAS Financial Services Ltd (MASFIN IN).
- We also cover high yield lender Five Star Business Finance (FIVESTAR IN).
Erajaya Swasembada (ERAA IJ) – Affordability Rocks
- Erajaya Swasembada (ERAA IJ) booked a solid set of 1H2024 results driven by the availability of affordable handsets, with volumes driving growth despite lower prices.
- The company’s Erablue consumer electronics JV with Mobile World Investment (MWG VN) now has 61 outlets and is set to break even in 2024, with 80 stores expected by year-end.
- The other growth drivers will come from private-label accessories and its Grand Lucky supermarket expansion. Valuations look attractive will the company trading on a 6x forward PER multiple.
Shares of Cooling Firms Have Turned Red Hot on Record Setting Scorching Heat
- July 2024 ranked as the warmest July in NOAA’s 175-year global record. Land & sea surface temperatures were above average across the planet barring few exceptions.
- July had the 2nd smallest sea ice coverage in 46-years at 8.49 million square miles. There is a 77% chance that 2024 will rank as the warmest year on record.
- Heating, Ventilation, and Air Conditioning (“HVAC”) stocks continue to rise on strong demand as temperatures peak across the planet.
Workday Inc.: An Enhanced Global Workforce Strategy
- Workday, a leading provider of enterprise cloud applications for finance and human resources, delivered a mixed set of results in its fiscal 2025 second-quarter earnings.
- The company reported a 17% growth in subscription revenue and a healthy increase in its 12-month backlog, which grew 16%.
- Professional services also saw growth, contributing to a total revenue growth of the same percentage.
Can Snowflake Truly Capitalize On The AI-Linked Opportunities That Lie Ahead? – Major Drivers
- Snowflake Inc. reported a solid financial performance for the fiscal second quarter of 2024, with product revenue increasing by 30% year-over-year to $829 million, surpassing analyst expectations.
- The company raised its full-year revenue outlook to $3.36 billion, reflecting its continued focus on innovation and product development.
- Despite this growth, Snowflake’s stock faced pressure, dropping by 7% in extended trading as concerns over its ability to fully capitalize on AI-related opportunities persisted.