Independent research on the U.S. markets, Baptista Research

Baptista Research

Independent research on the U.S. markets

Baptista Research is an independent financial research house focused on the U.S. markets. We provide equity research as well as credit research reports on the top-listed U.S. companies with most of our focus on technology, consumer goods and services, automobiles, industrials, oil and gas, pharma, and healthcare. Our research has served more than 3000 institutional investors including mutual funds, hedge funds, banks, family offices, and various buy-side firms. We operate a research subscription service where institutions, as well as retail investors, can have priority access to all our research. We also have a wide distribution of our research reports across some of the top global financial platforms. Apart from equity research and credit research, we also provide advisory services with respect to mergers & acquisitions (M&A), private equity/ venture capital fundraising, valuation reports, and investment management services for corporates.
Baptista Research is owned and managed by Ishan Majumdar, an ex-Venture Capitalist/ Investment Banker, a Chartered Accountant, and a Masters’ degree holder in Management from HEC Paris. Ishan has nearly a decade of experience in Mergers and Acquisitions, Leveraged Buyouts (LBOs), Venture Capital Investing, Corporate Strategy, and Valuation in front-office roles at the likes of BNP Paribas CIB, Credit Agricole CIB, Groupe Danone, and TIW Private Equity. He has worked on and closed multiple acquisition deals, leveraged buyouts, and start-up investment transactions.

Equity Bottom-Up

<ul><li>Diodes Incorporated’s financial results for the first quarter of 2025 reflect mixed performance amidst recovering market conditions.</li><li>The company reported revenue of $332.1 million, marking a 10% year-over-year increase but a slight sequential decrease from the previous quarter.</li><li>This positive revenue growth can be attributed to improving conditions in key end markets such as computing, particularly in Asia with AI-related applications, and signs of recovery in Europe and North America.</li></ul>

Diodes Incorporated’s financial results for the first quarter of 2025 reflect mixed performance amidst recovering market conditions.The company reported revenue of $332.1 million, marking a 10% year-over-year increase but a slight sequential decrease from the previous quarter.This positive revenue growth can be attributed to improving conditions in key end markets such as computing, particularly in Asia with AI-related applications, and signs of recovery in Europe and North America.

How Diodes Incorporated Is Revving Up Automotive Growth with High-Value Content Expansion!

Asia and Global Semiconductor and Tech Research

Andrew Lu

Thematic (Sector/Industry)

<ul>
<li>Like other automotive/industrial semi vendors, Diodes guides 4Q23 sales of 20% q/q and 35% y/y decline (miss by 21%) and weaker gross margin/operating margin of 35%/7% (miss by 5ppts).</li>
<li>The company sees 4Q23 sales decline of 20% mainly from 19% of automotive and 26% of industrial customers due to customer inventory cut coupled with year-end distributor inventory management. </li>
<li>We expect this adjustment for automotive/industrial IDMs to last for at least 6 months and suggest our clients to avoid these names unless valuation becoming attractive.  </li>
</ul>


Like other automotive/industrial semi vendors, Diodes guides 4Q23 sales of 20% q/q and 35% y/y decline (miss by 21%) and weaker gross margin/operating margin of 35%/7% (miss by 5ppts).
The company sees 4Q23 sales decline of 20% mainly from 19% of automotive and 26% of industrial customers due to customer inventory cut coupled with year-end distributor inventory management. 
We expect this adjustment for automotive/industrial IDMs to last for at least 6 months and suggest our clients to avoid these names unless valuation becoming attractive.  


With No Surprise, Diodes Guides Automotive/Industrial Semi Demand to Fall over 20% Q/Q

<ul><li>Diodes Incorporated's fourth quarter and full-year fiscal 2024 performance reveals a mixed financial picture, reflecting both the headwinds in the global economic environment and the company's strategic initiatives to foster growth and stabilization.</li><li>In the fourth quarter, Diodes reported revenue of $339.3 million, marking a 5% increase from the fourth quarter of 2023, despite a sequential decline from the prior quarter's $350.1 million.</li><li>This uptick demonstrates a return to year-over-year growth, driven largely by the company's expanding presence and increased point-of-sale activities in Asia, notably China and Southeast Asia, where economic conditions have shown signs of improvement.</li></ul>

Diodes Incorporated's fourth quarter and full-year fiscal 2024 performance reveals a mixed financial picture, reflecting both the headwinds in the global economic environment and the company's strategic initiatives to foster growth and stabilization.In the fourth quarter, Diodes reported revenue of $339.3 million, marking a 5% increase from the fourth quarter of 2023, despite a sequential decline from the prior quarter's $350.1 million.This uptick demonstrates a return to year-over-year growth, driven largely by the company's expanding presence and increased point-of-sale activities in Asia, notably China and Southeast Asia, where economic conditions have shown signs of improvement.

Diodes Incorporated: Is It Really Capitalizing On The AI Server and Data Center Growth & What Are The Underlying Risks?

<ul><li>Diodes Incorporated has reported its financial results for the third quarter of fiscal 2024.</li><li>The company's revenue exceeded expectations, reaching $350.1 million, a sequential increase of 9.5% from the second quarter but a decline from $404.6 million in the previous year.</li><li>This growth was notably supported by improved demand in Asia, particularly the automotive sector, which rose by 18% and accounted for 19% of product revenue.</li></ul>

Diodes Incorporated has reported its financial results for the third quarter of fiscal 2024.The company's revenue exceeded expectations, reaching $350.1 million, a sequential increase of 9.5% from the second quarter but a decline from $404.6 million in the previous year.This growth was notably supported by improved demand in Asia, particularly the automotive sector, which rose by 18% and accounted for 19% of product revenue.

Diodes Incorporated: An Analysis Of Its Automotive Market Expansion & Other Major Growth Drivers

<ul>
<li>Microchip used to be the bellwether for semiconductor demand After many semis guided weaknesses in automotive, industrial, and digital consumer much earlier, Microchip's 19% miss in 1Q24 gives no surprise.</li>
<li>
<strong>Why the worst among all?</strong> We attributed Microchip to over 85% of its products on automotive, industrial, and digital consumer. Other semis have higher exposure on PC and comm.</li>
<li>
<strong>Priced in?</strong> We estimate over 20% y/y decline in 2024 sales vs. Bloomberg's -8% y/y. 2024E EPS of US$2.94 is likely below US$1. Price is only 10% below historical peak.</li>
</ul>


Microchip used to be the bellwether for semiconductor demand After many semis guided weaknesses in automotive, industrial, and digital consumer much earlier, Microchip's 19% miss in 1Q24 gives no surprise.

Why the worst among all? We attributed Microchip to over 85% of its products on automotive, industrial, and digital consumer. Other semis have higher exposure on PC and comm.

Priced in? We estimate over 20% y/y decline in 2024 sales vs. Bloomberg's -8% y/y. 2024E EPS of US$2.94 is likely below US$1. Price is only 10% below historical peak.


From the Bellwether to a Lagging Indicator- Why Does Microchip Guide the Worst Among All?

United States

Diodes Incorporated manufactures and supplies discrete, logic, and analog semiconductor devices to consumers in the electronics, computing, industrial, communications, and automotive markets. The Company's products include diodes, transistors, MOSFETs, single gate logic, LED drivers, and USB switches.

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Diodes Inc (DIOD US)

How Diodes Incorporated Is Revving Up Automotive Growth with High-Value Content Expansion!

Diodes Incorporated’s financial results for the first quarter of 2025 reflect mixed performance amidst recovering market conditions. The company...

Baptista Research

With No Surprise, Diodes Guides Automotive/Industrial Semi Demand to Fall over 20% Q/Q

With No Surprise, Diodes Guides Automotive/Industrial Semi Demand to Fall over 20% Q/Q, margin contraction, and rising months of inventory. We see...

Andrew Lu

Diodes Incorporated: Is It Really Capitalizing On The AI Server and Data Center Growth & What Are The Underlying Risks?

Diodes Incorporated's fourth quarter and full-year fiscal 2024 performance reveals a mixed financial picture, reflecting both the headwinds in the...

Baptista Research

Diodes Incorporated: An Analysis Of Its Automotive Market Expansion & Other Major Growth Drivers

Diodes Incorporated has reported its financial results for the third quarter of fiscal 2024. The company's revenue exceeded expectations, reaching...

Baptista Research

From the Bellwether to a Lagging Indicator- Why Does Microchip Guide the Worst Among All?

From the Bellwether to a Lagging Indicator- Why Does Microchip Guide the Worst Among All? For next six months, we like both Intel and Qualcomm more...

Andrew Lu

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