In today’s briefing:
- [Tencent (700 HK, BUY, TP HK$545) Target Price Change]: C4Q24 Review: Good Time to Pick up Shares
- HK Connect SOUTHBOUND Flows (To 21 Mar 2025); Lots Of “Day Trading” And Behind the Scenes Div-Buying
- Xiaomi (1810 HK): Earnings Beat, Volatility Retreat, and Straddle Success
- Samsung Electronics(005930): Shareholders’ Meeting Results
- (Mostly) Asia-Pac M&A: Westgold/Spartan, Dropsuite, Shandong Fengxiang, Proto Corp, Shinko Electric
- Monolithic Power: 5 High-Voltage Growth Catalysts You Need to Know Now!
- Littelfuse: Inside the Semiconductor Shift Driving Its Next Chapter!
- Gartner Inc: Why We Are Confident Of Its Ongoing Growth In Subscription Revenue!
[Tencent (700 HK, BUY, TP HK$545) Target Price Change]: C4Q24 Review: Good Time to Pick up Shares
- Tencent reported C4Q24 revenue, IFRS op. profit, and IFRS net income in-line, (5.3%), 6.0% vs. our est. and 2.1%, (12.6%), 5.3% vs. cons.
- We shifted our game TOP PICK from Tencent to NetEase on January 16 2025, due to pipeline gaps.
- We reiterate our BUY rating and raise TP to HK$545 on Tencent. We expect game pipeline to fill the gap with the launch of two blockbusters in C3Q25.
HK Connect SOUTHBOUND Flows (To 21 Mar 2025); Lots Of “Day Trading” And Behind the Scenes Div-Buying
- Gross SOUTHBOUND volumes dropped again somewhat but still high at HK$619bn. NET buying by SOUTHBOUND was HK$23bn which is much smaller than the last several weeks.
- The flows here are still striking and net to buy. There has to be institutional buying. And I assume it is to get the earnings yield and div pickup.
- Included is a summary of important China Stocks-relevant news as I saw it this week.
Xiaomi (1810 HK): Earnings Beat, Volatility Retreat, and Straddle Success
- Xiaomi Corp (1810 HK) significantly beat Q4 2024 earnings expectations, yet the stock showed minimal price movement with just a 1.0% gain immediately after the announcement.
- Post-Earnings implied volatility declined substantially from 72% pre-earnings to below 53.4% after earnings, confirming pre-announcement predictions of overpriced volatility.
- Straddle positions were actively traded around the earnings event. A case study showcases a profitable short straddle strategy.
Samsung Electronics(005930): Shareholders’ Meeting Results
- All proposals at Samsung Electronics’ March 19 shareholders’ meeting were approved, despite opposition recommendations from Sustinvest, a Korean proxy advisory firm.
- Sustinvest had recommended voting against outside director candidate Kim Jun-sung (Agenda 2-1-1) and inside director candidate Jeon Young-hyun (Agenda 2-2-1).
- The approval of all agenda items indicates strong shareholder support for Samsung’s current management direction despite some governance concerns raised by proxy advisors.
(Mostly) Asia-Pac M&A: Westgold/Spartan, Dropsuite, Shandong Fengxiang, Proto Corp, Shinko Electric
- I tally 52 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma.
- Three news new deals discussed this week: the Westgold Resources (WGX AU)/Spartan Resources (SPR AU) merger, and EcoNaviSta (5585 JP)‘s Tender Offer.
- Key updates/news took place on: Dropsuite Ltd (DSE AU),Shandong Fengxiang (9977 HK), Proto Corp (4298 JP), and Shinko Electric Industries (6967 JP).
Monolithic Power: 5 High-Voltage Growth Catalysts You Need to Know Now!
- Monolithic Power Systems (MPS) delivered a strong performance in its fourth quarter of 2024, marking its 13th consecutive year of growth.
- The company’s revenue for the entire year was $2.2 billion, reflecting a 21% increase from the previous year.
- Notably, the fourth quarter achieved a record revenue of $621.7 million, representing a 37% improvement over the same period in 2023.
Littelfuse: Inside the Semiconductor Shift Driving Its Next Chapter!
- Littelfuse reported mixed results for the fourth quarter of 2024, aligning with their guided range amidst challenging market conditions.
- The company saw sales and earnings that reflect stable operational execution.
- For the full year, Littelfuse navigated a difficult environment, demonstrated by a modest decline in revenues to $2.2 billion, down 7% from the prior year.
Gartner Inc: Why We Are Confident Of Its Ongoing Growth In Subscription Revenue!
- WillScot Holdings Corp reported its fourth-quarter and full-year 2024 financial and operational results, highlighting both achievements and challenges faced during the year.
- The company, recognized as the largest provider of modular space and portable storage solutions in North America, undertook strategic initiatives aimed at strengthening its market position and driving long-term growth.
- In 2024, WillScot successfully integrated key components of its operations, notably the merger of its Mobile Mini and WillScot field sales and operations teams.
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