In today’s briefing:
- Vodafone Idea: A Lifeline or a False Dawn?
- [Baidu, Inc. (BIDU US, SELL, TP US$78) TP Change]: C3Q24 Review: No Respite in Going Ex-Growth
- Inside NVIDIA’s $35 Billion Quarter: Can AI and Hopper Tech Keep the Momentum? – Major Drivers
- Tech Supply Chain Tracker (30-Nov-2024): Qualcomm-Intel deal talk ends.
- Agora (API US): Rationalizing All Biz and Zero in on OpenAI
- Visa Inc’s Cross-Border Boom: Can It Continue Driving Its Global Revenue Growth? – Major Drivers
- Restar (3156) – Market Challenges but Maintaining Growth Direction
Vodafone Idea: A Lifeline or a False Dawn?
- Vodafone Idea (IDEA IN) gains a lifeline with the waiver of Rs. 24,700 crore bank guarantees for pre-2022 spectrum acquisitions.
- The waiver eases financial strain, boosts cash flow, and enables critical investments in 4G and 5G upgrades amidst competition from Reliance Industries (RIL IN)‘s Jio and Bharti Airtel (BHARTI IN).
- While a positive step, Vi’s recovery depends on fundraising, reducing debt, and regaining market share, making its turnaround uncertain but slightly more plausible.
[Baidu, Inc. (BIDU US, SELL, TP US$78) TP Change]: C3Q24 Review: No Respite in Going Ex-Growth
- BIDU reported C3Q24 top line, non-GAAP operating profit and GAAP net income in-line, 4.6% and 66% vs. our estimate and in-line, 8.7% and 46% vs. consensus.
- Ads revenue declined and C4Q24 guidance was below expectations. Margin improvement was mainly achieved through personnel cuts, which we think is not sustainable. AI didn’t contribute materially to revenues;
- We see no return to growth from any of the business lines. We keep our SELL rating and cut the TP from US$84 to US$78.
Inside NVIDIA’s $35 Billion Quarter: Can AI and Hopper Tech Keep the Momentum? – Major Drivers
- The latest earnings result and call for NVIDIA Corporation (NVIDIA) indicate a period of remarkable growth and robust financial performance driven primarily by the adoption of its AI technologies and data center products.
- NVIDIA reported record revenue of $35.1 billion, which represents a 17% sequential increase and a striking 94% year-over-year growth, surpassing its revenue outlook of $32.5 billion.
- This growth spanned all market platforms, particularly fueled by the increasing demand for NVIDIA’s accelerated computing and AI solutions.
Tech Supply Chain Tracker (30-Nov-2024): Qualcomm-Intel deal talk ends.
- Speculation of a Qualcomm-Intel deal diminishes, while Japan boosts semiconductor subsidies to benefit Rapidus, with further support anticipated.
- China’s semiconductor industry growth poses a threat to South Korean companies, prompting Samsung to weigh integration of ChatGPT, sparking concerns over its Google partnership.
- Hiwin bolsters its robotics presence by partnering with Boston Dynamics, expanding its influence in the industry, as India eyes doubling 5G subscriptions by 2030.
Agora (API US): Rationalizing All Biz and Zero in on OpenAI
- Agora share price rallied 34% on C3Q24 earning call. During the call Agora outlined plans for large scale layoffs and committed to turn profitable for full year 2025;
- With the business rationalization, cooperation with OpenAI now becomes the only growth driver for the future. We believe with Agora’s operation-oriented business model, there is a fair chance for success;
- Considering the price cut speed of 10x in one year from Chat GPT, the audio GAI price lower from US$9/hour to US$1/hour could happen within one year.
Visa Inc’s Cross-Border Boom: Can It Continue Driving Its Global Revenue Growth? – Major Drivers
- Visa Inc. reported strong financial results for its fiscal fourth quarter and full year 2024, showcasing growth across multiple key performance metrics.
- The company’s net revenue for the fourth quarter was $9.6 billion, reflecting a 12% increase compared to the prior year, driven by growth in payments volume, cross-border volume, and processed transactions.
- A notable highlight is the 8% year-over-year growth in global payments volume with international payments showing a 10% increase and cross-border volumes, excluding intra-Europe, rising 13%.
Restar (3156) – Market Challenges but Maintaining Growth Direction
- Some speed bumps at the Device segment – Continuing positive demand from the smartphone sector and sustained growth at the Eco-Solution segment were overshadowed by a loss in earnings momentum at the Devices segment in Q1-2 FY3/25.
- The recovery in demand from the industrial sector remains delayed, together with a sales mix lowering gross margins and FX impact contributing to overall OP falling 3.8% YoY, despite 11.3% sales growth driven primarily by acquisitive growth.
- The current outlook for H2 FY3/25 is assisted by the weak Japanese yen, acquisitive growth, and we expect to see a continuation of the positive demand themes from smartphone and alternative energy.
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