Daily Brief Equity Bottom-Up: Why Is India’s Paint Giant Asian Paint Falling? and more

• Asian Paints (APNT IN) reported a 42.4% drop in Q2FY25 net profit and a 5.3% revenue decline.
• Intense competition, extended monsoons, weak urban demand, and margin pressures are impacting performance.
• Asian Paints’ resilience hinges on premiumization, sustainability, and industrial coatings to offset short-term challenges.

• Kioxia has been under-investing in Capex (27% of revenue versus competitors 37%) and R&D (5% versus 11%) because Free Cash Flow is low, too low to pay back debt. 
• The Memory cycle peaked in June-24 and NAND prices have been declining since. Memory stocks (Micron, Samsung, SK Hynix) peaked in June. 
• The valuations multiples that reconcile with a US$4.9bn market value are half or one-third that of competitors. A huge discount is applied, reflecting the financial and technological weakness of Kioxia. 

• Gravitation towards businesses with traditional competitive advantages and large reinvestment runways for future outperformance
• Genda’s growth primarily through mergers and acquisitions in the Japanese entertainment industry, taking advantage of the aging population of business owners
• CFO Taiju Watanabe’s background in Goldman Japan Investment Banking and transition to Jinda, highlighting the company’s potential for growth and profitability

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

• US Set to Unveil New Wave of Semiconductor Restrictions on China
• Hon Hai Subsidiary Says Progress for Nvidia GB200 Servers is Smooth, Mass Production in 2025E
• PC Monitor: Dell & HPQ Highlight Sharp Divide Between Corporate and Consumer PC Demand; Shares Slump 

• Siloam International Hospitals continues to establish a track record of improving returns through greater cost efficiencies and higher treatment intensity, focusing on the CONGO range of treatments.
• The company has seen strong growth in inpatient and outpatient admissions, with a growing portion coming through digital channels, and an increase in average revenue per operating bed.
• Siloam has maintained a beneficial payee mix and continues to expand its new hospitals in a measured way, helping to underpin future growth. Valuations remain attractive on 7.9x FY2025E EV/EBITDA.

• On Monday, I had the great pleasure to speak to Kaonavi’s (4435 JP – US$131 million) CFO, Kimitaka Hashimoto.
• He provided color on Kaonavi’s second-quarter earnings result, which were released on 13 November and led to a negative reaction from the market.
• In short, Kaonavi is a Japanese developer of talent management software. It helps companies manage their employees by solving staffing problems, designing their organizational structure, performance reviews, surveys, training, internal recruitment, etc.

• Ibotta operates a performance network connecting consumers with CPG companies and retailers for digital promotions and cashback rewards
• Despite a successful IPO, Ibotta has seen a significant derating due to failing to meet expectations
• Strong partnerships, growing user base, and unique business model suggest potential for a 56% upside towards a price target of $90 and eventually $120

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• China Dongxiang (3818 HK) turned around in 1H FY25 as it reported a net profit of Rmb137m, vs. losses of Rmb410m a year ago. Interim DPS increased 92.7% YoY.
• Investment gain is the key driver, reaching Rmb171m in the period, compared with losses of Rmb497m previously. Most investment categories contributed positively. 
• CDNX trades on a 76.9% discount to its SOTP value and a P/B of just 0.22x. Net cash amounted to Rmb3.2bn, or 58.3% more than its market capitalisation. 

• Sariguna Primatirta (CLEO IJ) continues to impress in terms of both growth and profitability for 9M2024 and looks well on track to exceed its guidance for 2024 substantially.
• The company has continued to expand its factory network outside Java this year, with three new factories due to be completed making it the largest water factory network in Indonesia.
• CLEO continue to launch innovative new variants with its most recent 1-litre variant aimed at increasing outdoor activities, and a new recycled bottle also being launched. Valuations attractive versus growth.  

• We are gradually building a high-conviction coverage of ideas for the mid and small-caps in the Philippines.
• We set criteria for high ROCE, reasonable growth (10-15% YoY), strong balance sheets, and reasonable capital allocation (dividend yields), all ingredients for being multi-baggers.
• We update results declared for Q3 by Shakey’s Pizza (PIZZA PM), Ginebra San Miguel (GSMI PM), The Keepers Holdings (KEEPR PM) and DigiPlus Interactive (PLUS PM)