Smartkarma Daily Briefs

• In the past several days, one of the biggest news splash in the global financial markets has been Michael Burry taking huge bearish positions on Palantir and NVIDIA.
• Prices of Palantir and Nvidia are down 6.3% and 3.6%, respectively from 31 October to 6 November. Nikkei and KOSPI are down 2.9% and 2%, respectively in the same period.
• The risks surrounding CIRCULAR DEALMAKING involving OpenAI have become even more significant.  Amid these uncertainties, Michael Burry is taking action with his uber bearish positions on Nvidia and Palantir. 

• Cathay Pacific Airways (293 HK)‘s buyback of Qatar Airways’ 9.57% stake should enhance its FY26F EPS and ROE by 4.6% and 0.36pp, respectively. 
• With passenger traffic and load factor continuing to recover, the consensus forecast of a 24.2% YoY earnings decline in 2H25 is too conservative, suggesting upside surprise. 
• Its FY25-27F ROE is a record since 2013, with potential to trade up to 1.65x P/B (30%+ upside). It is also possible to be included in the HSI again.

• Number 1 chocolate company in Indonesia with own brands like SilverQueen, Ceres etc. The company also distributes third party brands across South Asia.
• Cocoa prices have halved from their recent peak but still they are higher than historical average
• Stock trades at reasonable multiple to its 2023 earnings when cocoa prices were stable

• CoStar’s revenue grew 20% year over year, with strong growth in residential segments such as Apartments.com and Homes.com
• Elevated sales and marketing expenses account for 50% of revenue, raising questions about sustainable growth and margin levels
• Management is optimistic about gaining momentum and investing in two-sided marketplace platform for future success, but concerns remain about long-term profitability and valuation metrics.

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• Improving policy visibility on chips and geopolitics restores confidence in China’s AI infrastructure outlook.
• Explosive AI-token growth is driving sustained hyperscaler build cycles and stronger IDC order pipelines.
• GDS’s balanced China and DayOne portfolio supports double digit EBITDA CAGR; catalysts include new orders, C-REIT and DayOne IPO, implying 60-100% re-rating potential.

• Guidance cut (Business Profit ¥500 bn → ¥450 bn) as U.S. Steel delivers no profit contribution, overseas spreads weaken, and one-off losses weigh on earnings; domestic operations remain resilient.
• Integration drag : $11 bn U.S. Steel modernization plan and rigid U.S. labor terms keep margins diluted and free cash flow negative; deleveraging and ROCE recovery deferred to FY27+.
• Valuation rich, patience warranted: Trading at ~19× EV/EBITDA (vs peer median ~10×) with ROCE < 8%; maintain Hold / Underweight until synergy visibility and free-cash-flow inflection emerge post-FY26.

• Since the last rebalancing of our portfolio on 5th September, it has returned 13.5% vs 9.5% from MSCI-Asia-ex-Japan. Since inception (15th May), our portfolio has appreciated 20.1% vs MXASJ’s 18.6%.
• Six stocks, SK Hynix, TSMC, Samsung Electronics, Alibaba, China Hongqiao, Tencent, contributed almost the entire return of our portfolio. Overweight on Korea drove more than half the portfolio’s return.
• We turn more selective on Chinese discretionary consumption and step into the Korean defense sector. We exclude Anta Sports and Mediatek and include Hyundai Rotem and Hon Hai Precision.

• DigiPlus Interactive (PLUS PM) reported revenue/profit of 0%/-52% YoY, reflecting a slowdown in revenue due to the e-wallet redirection policy taking effect in mid-August.
• A&P spends on billboards and events contracted for the full year are effectively fixed costs for the short term, resulting in a higher opex% of sales. 
• We expect these to normalize and for sales to recover, with PAGCOR announcing a sales recovery in late September/early October.  Stock trades at 8.5x/7.2x PE FY25e/26e.

• New Oriental Education & Technology Group reported its first-quarter fiscal 2026 financial results, highlighting both strengths and challenges for its future trajectory.
• The company showcased a moderate 6.1% year-over-year increase in total net revenue, which indicates stable growth following a period of strategic adjustments.
• This growth is credited to enhancing capabilities, operational resilience, and a focus on sustainable profitability.

• Distinct Healthcare Holdings is a prominent private healthcare provider in China, targeting the high-end market with a network of clinics and hospitals across major cities. The company is focused on expanding its service offerings and geographic footprint, supported by strategic investors like Tencent.
• The company’s growth strategy is centered on both organic expansion through the opening of new facilities and potential acquisitions, alongside the development of an integrated online and offline healthcare service model to enhance patient engagement and operational efficiency.
• Key challenges for the company include navigating the evolving regulatory landscape of the Chinese healthcare industry, managing the high operational costs associated with premium healthcare services, and facing increasing competition from other private healthcare providers.

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