In today’s briefing:
- Shift (3697): Profitability Rebound Underway
- Taiwan Dual-Listings Monitor: TSMC Maintaining Strong Premium; UMC Headroom Continues to Decrease
- SoftBank Group (9984 JP): A Bigger Bounty Awaits with Swiggy’s Upcoming IPO
- Uchi Technologies (UCHI MK): Q2 2024 Profitability Resilient, Guidance Weak
- Bharti Airtel Positioning Continues to Strengthen
Shift (3697): Profitability Rebound Underway
- A massive shortage of IT professionals combined with Shift’s overwhelming dominance of the labor market should drive 20% annual revenue growth through 2030.
- But Shift missed consensus profitability estimates 3 consecutive quarters, and the share price is down 67% in 12 months, compared to an 18% rise in the median peer.
- In our view, a recovery in profitability is already underway, and shares are at least 45% undervalued
Taiwan Dual-Listings Monitor: TSMC Maintaining Strong Premium; UMC Headroom Continues to Decrease
- TSMC: +15.4% Premium; Wait for Closer to 20% Before Opening Fresh Short
- UMC: +1.2% Premium; Can Consider Shorting at 1.5% or Higher; Headroom Continues to Decrease
- ASE: +5.2% Premium; Wait for More Extreme Levels Before New Trade
SoftBank Group (9984 JP): A Bigger Bounty Awaits with Swiggy’s Upcoming IPO
- Softbank Group (9984 JP) could see its USD450 million investment in India food delivery player, Swiggy , triple in value with the upcoming IPO, reportedly valuing it at USD15 bn.
- SoftBank Group, generated a total return, net of investments, of USD1.4 billion with the listing of Ola Electric (OLAELEC IN) , Unicommerce (UNIECOM IN), and BrainBees Solutions, this month.
- If Swiggy’s IPO reaches valuations closer to Zomato’s, SoftBank could reap even greater rewards than from its recent portfolio company listings.
Uchi Technologies (UCHI MK): Q2 2024 Profitability Resilient, Guidance Weak
- Uchi Technologies (UCHI MK) reported Q2 2024 revenue/profit up 2.2%/13.4% YoY. In USD terms, revenue declined 3% YoY.
- Aided by the strengthening of the USD/MYR in Q2 (which has reversed slightly), EBITDA margins improved by 250 bps to 65.7% and net margins by 540 bps to 54.5%.
- The company maintained guidance of a high single-digit revenue decline (in USD). The stock trades at 13x PE with a 7.8% dividend yield.
Bharti Airtel Positioning Continues to Strengthen
- The bull market in Bharti Airtel positioning shows no signs of slowing down, with average fund weights and the percentage of funds invested in Bharti Airtel reaching 15-year highs
- Over the past six months, ownership increases have been the highest among Indian peers, propelling Bharti Airtel to the 7th most widely owned stock in India.
- In the last six months, 27 funds have initiated new positions, with no closures, and notable new investors include Fidelity, GQG, and Morgan Stanley.
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