Equity Bottom-Up

• News show that European car makers such as BMW is moving out of China, leaving the Auto market to the local players
• Stocks like Brilliance China will suffer losses as they lose some of the most famous co-brand.
• Foreign firm exits may give relief to local auto makers as it resolves part of the over-capacity problems

• Welcome to Consumer Tales & Trends, your weekly roundup of the latest corporate developments, investment reports and sector events in the consumer industry.
• Thai Beverage (THBEV SP)‘s proposed swap deal with promoter company raises several questions for shareholders. Start with the back story about how Fraser And Neave (FNN SP) joined the group.
• Bigger weddings could become a trend in India – Read why we like Kalyan Jewellers(KALYANKJ IN) . Also, household debt in Thailand as % of GDP is highest in ASEAN.

• Business is struggling due to legacy luxury brands such as BMW losing its positioning in China. Local brands are eating into market share fast. 
• Thankfully, the company is cash rich and its trading nature enables steady supply of dividends and have been known to pay special dividends.  
• Share price has been under pressure, now trading at ~15% dividend yield based on 50% payout,  appealing to yield seekers. 

• There’re rumor that Akeso’s AK112 and AK104 2024 revenue is RMB300 million and RMB1.5-1.6 billion respectively. Sales of AK104 may be below expectations, so Akeso decided to enter NRDL reimbursement.
• Regardless of whether there is a takeover offer, reasonable valuation of Legend Bio is between US$12.5bn-US$15bn based on solid fundamentals. This deal is “a test” for the management of Genscript.
• Current stock price of InnoCare just reflects its essence. If no new catalysts (e.g. breakthroughs in clinical data, new licensing agreement, etc.), we are not optimistic about the prospects of InnoCare.

• Baidu, a Chinese multinational technology giant, chose Hesai Group to be the exclusive LiDAR supplier for its robotaxi fleet in China.  
• Baidu is uniquely positioned for growth in a self-driving robotaxis and its autonomous ride-hailing platform, Apollo Go Robotaxi, gains real traction.   
• Hesai Group may ship at least 300K LiDARs for Baidu’s sixth generation Apollo RT6 robotaxis that would translate into a revenue of up to $300M.

• Most brands under control (Mercedes, Lexus, Toyota) are undergoing popularity downtrend by consumers in China.  
• There will remain a loyal niche supporter base, every legacy auto does, but it also means Zhongsheng will be a smaller and niche distributor going forward. 
• Share price has plunged significantly YTD, trading at only ~5x, which we think is overdone. Yield hunters will like its ~8% DY. 

• Share price under pressure due to industry challenges and transition of new product line-ups.  
• 2024 is a blip, things will normalise 2025 and deliver strong topline and bottomline growth. 
• LiAuto is trading at bargain levels for a company delivering 3-year earnings CAGR of 38%, net cash balance sheet and churns high free cash flow. 

• CrowdStrike, once hailed as a beacon of innovation in the cybersecurity sector, now finds itself at a precarious crossroads.
• Despite boasting a robust platform, impressive revenue growth, and high-profile clients, recent events have cast a long shadow over its future prospects.
• The global IT outage linked to CrowdStrike’s software has brought its skyrocketing valuation down but is there a rock-bottom in sight?

• TSMC’s Q2 revenue hits NT$673.51 billion, exceeding expectations amid strong demand for advanced chips.
• TSMC to grapple with tight supply through 2025, striving to meet soaring global demand across various sectors.
• TSMC on track for 2025 mass production of 2nm chips, enhancing capabilities for more powerful and efficient technologies.

• TotalEnergies’ robust hydrocarbon production in Q2 2024 will be offset by lower gas realizations and refining margins.
• Higher utilisation rates are expected to partially mitigate reduced refining margins in Europe and the Middle East.
• Seasonal factors are expected to lower the Integrated Power segment’s adjusted net operating income by 18.2% QoQ to USD 500 million.

• Early 6/18 pulled June sales into May, leading to disappointing June NBS data. Combined, online retail grew 5.1% yoy in May/June, and 6.4% yoy in 2Q24. 
• PDD remained the top shelf-ecommerce platform with GMV growing ~20%, followed by Taobao/Tmall (TTG) at ~6-7%, and JD and VIPS at ~2-3% yoy. 
• We expect JD and BABA to report slight earnings beats and guide upbeat on continued profitability improvement in 2H24. 

• Micron is sampling MRDIMMs for AI and HPC applications, exploring innovative solutions for data processing needs.
• Hyundai Motors plans to add 300 new charging stations to support the expansion of their hydrogen bus fleet, promoting eco-friendly transportation options.
• German electrification struggle worsens with supplier bankruptcy up 60%, hindering the widespread adoption of electric vehicles and renewable energy technologies.

• Intuitive Surgical (ISRG US) posted another strong quarterly result, with key performance indicators including total revenue, procedure growth, system placement, and EPS beating consensus.
• 2Q24 procedure volume growth was 17% (estimate 15.5%) and accelerated from 16% in 1Q24. Intuitive narrowed full-year 2024 procedure growth forecast to 15.5–17.0%. The company raised gross margin guidance.
• Despite phased rollout, 70 da Vinci 5 systems placement in 2Q24 seems impressive. It represents almost half of the total U.S. placement. In 2H24, placement is expected to increase modestly.

• Zuora is considering a potential sale after receiving acquisition interest, with Qatalyst Partners hired to facilitate the process
• Founder and CEO Tien Tzuo and other large shareholders may participate in the transaction
• Potential deal price of $13-15 per share, offering 40-60% upside from current levels, with downside protection due to low valuation and improving cash flow outlook

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• Cara Therapeutics has been trending all over the internet after the company recently decided to explore a potential sale.
• Recent, Cara Therapeutics’ management announced a focus shift toward its most promising project, oral difelikefalin for treating notalgia paresthetica (NP), a chronic neuropathic condition with no currently approved therapies.
• The reallocation of resources toward this program enables Cara Therapeutics to extend its cash runway into 2026, potentially covering all crucial value inflection milestones for the NP program.

• This is a follow-up research note on MoneyHero Group, a leading personal finance aggregation and comparison entity in Greater Southeast Asia.
• In its most recent Q1 2024 result, the company continues to demonstrate exceptional growth and strategic agility.
• MoneyHero Group has seen a significant uptick in revenues and improved margins and was also in the news for an important strategic sale of CompareHero in Malaysia that could prove to be another game changer.

• Edenred SE is a global payment solutions company with a strong financial performance and dominant industry position
• Company’s stock has declined -19.50% year-to-date due to a legal investigation in Italy
• Despite challenges, Edenred has a strong balance sheet, cash flow generation, and growth potential, making it a long opportunity for investors.

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• Five9, a noted leader in cloud contact center solutions, has been facing activist pressure in order to explore a potential sale of the company after a decent quarterly result.
• Positively, Five9 reported a solid increase in subscription revenue, growing 20% year-over-year, which underscores its successful transition and dominance in the cloud-based contact center market.
• This growth trajectory is supported by three key trends: the ongoing shift to cloud-based platforms, heightened focus on customer experience enhancement, and revolutionary impacts of AI on customer services.

• TSMC expects sales to grow by mid-20% YoY in USD in 2024, compared to low to mid-20% previously.
• The N3/N5 capacity is very tight, and they are even working with customers for 2026 capacity requirements, while N2 is on track to enter MP in 4Q25.
• A16 will enter MP in 2H26, and it’s first process starts adopting backside power.

• Significant revenue guidance hike — TSMC reported 2Q24 results, increasing 2024E revenue growth guidance to exceed ‘mid-20’s’ percent, a significant hike from previous guidance.
• Management is low-balling LT margins — Latest figures and long-term margin color makes us believe that TSMC will be able to increase GM much higher than current official LT guidance.
• Signs of Apple expecting strong iPhone 16 sales — TSMC reported strength in smartphone end-applications and we believe this is reflective of Apple ramping up re: stronger iPhone volume expectations.

• Kyoto Financial’s stakes in three key listed Japanese corporates are valued at over 85% of its market capitalization with its total equity holdings accounting for 130%+ of its market capitalization
• Kyoto management intends to retain the bulk of the bank’s equity holdings, opposing the growing trend for Japanese listed companies to unwind crossholdings; management will review this policy in November
• In the near term, we see no major catalyst for Kyoto to accelerate its equity holdings unwind and so, combined with its underwhelming fundamentals, we are negative on Kyoto Financial

• Mount Gibson Iron (MGX AU) reported a disappointing Q4 FY24 production report. Volumes were inline, but provisional pricing impacts of ~20% brought a quarterly cash outflow of one mn AUD.
• Volume guidance for FY25 was light at 2.7-3 mn tons (vs. 4.1 mn in FY24). Net Cash rose to 436 mn AUD (excluding Fenix Investment), almost equaling the market cap. 
• FY24 results are due on 21st August 2024, when the board will recommend a dividend. Net cash and future cash flows should support the share price in the long run.  

• American Water started 2023 with promising financial results, as its earnings per share (EPS) rose from $0.91 to $0.95 compared to the same quarter last year.
• This increase was anticipated, aligning with the company’s forecast and sustaining its full-year earnings guidance.
• Noteworthy contributing factors include the $0.02 per share rise stemming from additional interest income, linked to amendments in the seller note related to the HOS sale.

• Dalrymple Finance report examines financial structure of Brookfield Infrastructure Partners managed by Brookfield Asset Management
• Report raises concerns about fee maximization practices that may not align with interests of limited partners
• Comparison with sister entity launched in 2023 highlights flaws in BIP’s financial policies, suggesting a unsustainable pyramid scheme structure

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• Latest fare data suggests an incrementally more concerning trend for Ryanair pricing from June.
• Concerns over pricing continue to increase in Europe, following Lufthansa’s profit warning last week.
• We cut our FY25 net income by 9% to €2,289m albeit remain above consensus of €2,170m.

• Mediatek Inc (2454 TT) is forecasted to experience slight growth in 3Q24 compared to 2Q24.  
• Qualcomm Inc (QCOM US) is expected to introduce AI PCs in 2024, while Mediatek Inc (2454 TT) scheduled for this product is anticipated to delivered in 2H25.  
• The shipment forecast for the Dimensity 9400 is approximately 5 million sets in 2H24.

• Author admires Brad Jacobs’ entrepreneurial success but questions high valuation of SilverSun Technologies
• Conversion of SSNT into stake in QXO implies optimistic market capitalization of $46 billion
• Author remains skeptical of QXO valuation despite Jacobs’ successful track record

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• XPeng and Baidu leading China’s autonomous driving technology advancements in 2023
• Malaysia’s semiconductor sector set for growth in 3Q24 with talent recruitment and AI integration
• Singtel partners with SK Telecom for 6G and AI innovation, while automakers persist in V2X development efforts

• TSMC: +17.9% Premium; Rebounds After Brief Breakdown; Wait for Better Levels
• UMC: +1.8% Premium; Can Consider Shorting the Premium at Current Level
• ASE: +5.5% Premium Represents a Major Breakdown; Can Consider Going Long

• Chinese auto brands commands 61% market share in May 2024, up from 7% in 2021. Its premium car market share has also risen to 25% from nothing  
• The transition towards EV, swift adoption of technology and sleek designs has made traditional car makers (including luxury marquees) look antiquated and out of fashion compared to the Chinese brands  
• Premium Chinese automakers LiAuto and NIO will benefit over long-term, whilst the foreign dealers and local-foreign JV OEMs will suffer over the long term. 

• Isetan Shinjuku expects to post sales in excess of ¥400 billion this year, a record for a single retail store, although most of the growth is from inbound tourists. 
• But Isetan-Mitsukoshi is working to ensure longer term stability through more sophisticated databases and personalised marketing.
• At the same time, it will make better use of real estate assets, investing ¥500 billion around Isetan Shinjuku alone.

• Google’s ad revenue growth consensus is 11.7% YoY in Q2, with some analysts projecting even higher, reflecting robust global digital ad spend trends.
• Google Cloud’s revenue reached $9.5 billion in Q1 2024, marking a 35% YoY increase and a 4x growth over the past four years. Q2 expected to see continued growth. 
• AI investments and innovations showcased at Google I/O aim to boost user experience and market leadership, with potential double-digit growth.

• GlobalWafers secures $400M from CHIPS Act to boost semiconductor production amid global chip shortage.
• Samsung intensifies focus on wearable device sales with new strategies to adapt to declining demand in market.
• Acer targets Indian smartphone market with white-label approach and Qualcomm teams up with Microsoft to innovate PCs using AI technology.

• Halliburton forecasts low double-digit revenue growth from its international business and flat revenue growth from North America in 2024.
• Management expects sequential margin growth of 25-75 bps in its Drilling & Evaluation and Completion & Production segments in Q2 2024.
• Halliburton expects its FCF to rise 10% YoY in 2024. The company returned nearly 60% of its FCF to shareholders in 2023.

• ASML Holding NV has released its financial results for the first quarter of 2024, highlighting a combination of achievements and forecasts that paint a detailed picture of the company’s current and future trajectory.
• In terms of financial performance, ASML reported total net sales of EUR 5.3 billion, which aligns with the company’s previous guidance.
• The revenue from 11 EUV (extreme ultraviolet) systems constituted EUR 1.8 billion of the total net sales.

• Cadence Design Systems, Inc. recently reported a strong start to the year 2024, announcing first-quarter results that surpassed expectations and raised the financial outlook for the remainder of the year.
• Revenue for the quarter stood at $1.09 billion with non-GAAP earnings per share (EPS) reaching $1.17, underscoring a robust performance against the backdrop of dynamic market conditions.
• The company cited a record backlog of $6 billion as a primary driver for its optimistic revenue outlook, attributing this in part to burgeoning trends across AI, automotive, and 5G technologies.

• Alcoa Corporation recently reported its first quarter 2024 earnings, delivering a mix of strategic developments and financial results that reflect the company’s evolving business landscape.
• The company announced a significant transaction, the acquisition of Alumina Limited, which is expected to consolidate its ownership in the Alcoa World Alumina and Chemicals joint venture.
• This all-stock deal, valued at approximately $2.2 billion, aims to provide a streamlined corporate structure and enhance shareholder value.

• EB has teamed up with TikTok in an integration that could lead to a sharp increase in new creators and overall traffic on EB’s marketplace.
• TikTok announced on its blog that EB has been integrated to allow content creators to manage and promote events within their TikTok content.
• The integration would enable followers to purchase tickets to creators’ events straight from TikTok without having to leave the platform.

• SMCI has surged 214% YTD and will form part of NASDAQ-100 from 22/Jul topping $50 billion in valuation. Strategic partnerships with Nvidia & AMD boosted its AI server market presence. 
• Walgreens has declined 56% YTD with its market cap falling below $10 billion. Failing to maintain at least 0.1% of NASDAQ 100’s market value has led to its exclusion. 
• Historically, stocks added to indices outperformed briefly post-announcement. Although recent trend shows minimal outperformance, SMCI and WBA have shown strong trends due to idiosyncratic drivers.

• Kalyan Jewellers (KALYANKJ IN) , a leading jeweller with a pan-India presence, is expected to deliver strong sales growth, and improving returns with its asset-light expansion plans.
• Indian weddings have transformed from simple rituals to elaborate celebrations requiring heavy spending on jewellery and specialty apparel, reflecting rising affluence and media influence.
• Wedding related jewellery demand constitutes 60% of India’s total gold jewellery demand and remains resilient regardless of price changes.

• UL Solutions offers independent testing, inspection, and certification services globally as a newly listed company
• They are the only US-listed player in the TIC industry, making them a valuable investment option for potential compound growth
• With a strong brand and historical roots dating back to 1894, investors see ULS as a potential premium multiple due to their market position, revenue growth, and earnings growth opportunities.

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

Record reported FY24 PBT of £12.9m, down 12% y-o-y and in line with our estimate of £12.8m. Underlying PBT was £14.8m, up 2% y-o-y on record assets under management (AUM), which grew 16.5% to $102.2bn. The final ordinary dividend surprised positively at 2.45p, above our 2.36p forecast, and a special dividend of 0.6p was declared. As new CEO Dr Jan Witte continues to refocus the strategy over the next six months, the company is guiding to relatively flat management fees. We have cut our FY25 PBT estimate to £12.1m (previously £14.8m) on a weaker fee revenue projection. We also initiate FY26 PBT and diluted EPS estimates at £14.0m and 5.43p, respectively. The cash-generative business model enables the group to continue to pay an attractive ordinary dividend.

• Limoneira is an agribusiness with underutilized land and water assets, resulting in poor returns for shareholders
• Peter Nolan, a successful asset manager from Leonard Green, has joined the board along with Global Alpha, indicating a potential turnaround in capital allocation and strategy
• Nolan’s leadership is expected to unlock the potential of Limoneira’s assets, leading to significant returns for shareholders

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• Strong team, innovative product, and potential market demand in auto tech space support highly speculative projections for investment in Joby Aerospace
• Despite concerns about aggressive projections, company’s current valuation offers attractive entry point for investors seeking substantial upside with decent margin of safety
• Joby’s eVTOL aircraft development and plans for air taxi service differentiate it from other failed SPAC ventures, positioning it as top-tier hard tech startup with potential for success

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• Matador Resources Company has reported a promising start to the first quarter of 2024, with significant advancements in operational and financial aspects.
• The company has successfully enhanced its infrastructure, expanded financial capacities, and is preparing for substantial well completions, indicating a robust growth trajectory.
• From an operational perspective, Matador Resources has effectively integrated a significant pipeline system totaling 595 miles.

• Grocery Outlet reported fiscal Q1 2024 results that reflected mixed performance, illustrating both operational challenges and promising growth prospects.
• During the quarter, the company recorded a 7.4% increase in sales, achieving $1.04 billion, spurred on by a 3.9% rise in comparable store sales and reinforced by robust transaction count growth of 7%.
• This reflects Grocery Outlet’s continued customer appeal and effective store expansion strategy, having opened six new stores during this period.

• The STI rallied 5.0% in the first half of July, with the broader Singapore stock market booking over S$400 million in net institutional inflow.
• Among the STI constituents, DBS led the net institutional inflow over the 11 sessions, with inflow of S$118 million, reversing S$28 million of net institutional outflow in 1H24.
• For the contingent of STI constituents that ranked among the 30 stocks with highest net institutional inflow over the 11 sessions, DBS Group Holdings booked the highest net institutional inflow of S$118 million.

• Revenue was JPY17.1bn (+17.6% YoY), with life insurance commission revenue at JPY16.4bn (+18.2% YoY).
• Operating profit was JPY2.7bn (-0.2% YoY), with an OPM decrease of 2.8pp YoY to 15.7%.
• Acquisition of 333,000 treasury shares for JPY1.0bn, with cancellation scheduled for August 30, 2024.

• Hong Kong market still trades at a substantial discount to Analyst year end price targets.
• Budweiser APAC is dependent on China’s consumer to lift sales while Anta Sports is targeting increased sales from the upcoming Paris Olympics.
• Sunny Optical is seeing substantial growth from it EV segment and Haitian continues to grow its international sales.  Shineway RX is a rare value play in the pharmaceutical sector.

• Money Forward released Q2 results post market close on Friday. Revenue growth of +41% YoY beat our estimates by 7%.
• We highlight continued solid financial metrics supported by growth in SaaS ARR and in particular mid-sized corporate growth.
• No change to our bullish long-term view on the company. Stock has run up around 11% ahead of earnings but we see further 20%+ upside from here. 

• Energy is scarce, thus, besides renewable energy, energy efficiency should also be the key focus. 
• Wasion Group Holdings (3393 HK) customers have grown from domestic grids to both non-grid and grid domestic as well as overseas customers (Latin America). 
• Despite a 65% YTD return, it is still trading at 11x PER, with a 4% dividend yield, 6x EV/EBITDA, and 1.2x PBR. 

• DCI Indonesia (DCII IJ) is Indonesia’s leading operator of Tier 4 data centres, which require the highest operational standards, with its main business in co-location services.
• The company has a long track record of growth in both sales and profits, making it more than a concept, with a well-thought-out expansion at its three existing data centres.
• DCI Indonesia is hard to justify on current valuations but has a strong track record on execution with a high pedigree management team and customer base, with backing from Salim.

• Lowya began as an online furniture retailer and is still one of the largest in e-commerce, but limited brand awareness has held it back and sales fell last year. 
• Vega Corporation, Lowya’s parent, is now expanding physical stores and offering omnichannel solutions to fix the problem.
• This makes sense in a market where stores remain preeminent and are likely to remain so.

• Three business segments of Shineway showed negative YoY growth in 24Q1. 24Q2 performance could remain sluggish. We’re not optimistic about the 24H1 results due to the high base in 23H1.
• It is expected that Shineway’s growth in 24H2 would pick up. If revenue growth of Shineway in 2024 full-year could be double-digit (e.g. 10-15% YoY), it is already good.
• Shineway is undervalued. It has sufficient cash (cash balance of RMB5.9 billion by 2023) and is willing to distribute dividends (usually twice a year). Shineway is suitable for long-term holding.

• This is the final installment in our series on the APAC Luxury Industry, where we highlighted that luxury travel might offer more appealing opportunities than traditional luxury goods.
• While travel has surpassed pre-pandemic levels, traditional luxury goods have shown very low demand in recent months.
• Below, we analyze recent trends in luxury travel for Mandarin Oriental International (MAND SP), Minor International (MINT TB), and Shiseido Company (4911 JP).

• Centurion CEO Kong Chee Min adds to interest at S$0.59 per share CapitaLand Investment led the buyback consideration tally, acquiring 8,312,600 shares at an average price of S$2.64 per share.
• On Jul 4, Centurion Corp CEO Kong Chee Min acquired 115,000 shares, at an average price of S$0.59 cents per share.

• It was hard to imagine a worse first quarter for Burberry.
• At a time when investors were desperate for some positive news following a torrentially bad fiscal 2024, Burberry’s Q1 trading update emphasised a “luxury market that is proving more challenging than expected” with the weakness highlighted coming into FY25 having “deepened” .
• Retail revenue for the quarter of £458 million came in 22% below the prior year.

• Hisamitsu Pharmaceutical Co (4530 JP) has reported double-digit growth in revenue and net profit in Q1FY25. However, operating profit decreased 5% YoY due to higher expenses.  
• Topline growth was mainly driven by Salonpas, which was named the world’s no. 1 OTC topical analgesic patch band for the eighth consecutive year.  
• The company reiterated FY25 guidance of 7% revenue growth and low double-digit operating and net profit growth, as an increase in operating profit is expected for the full-year as planned.

• Thai Beverage (THBEV SP) majority-owned SABECO, a leading beer company in Vietnam, may face volume declines if the proposed beer tax hike is implemented.
• The tougher market outlook makes the earlier proposed BeerCo listing unlikely anytime soon.  
• With no meaningful stock catalyst, weak sector outlook and a stretched balance sheet, the stock could slip down after index inclusion related passive stock buying ends.

• Guangzhou Automobile sales volume of new energy vehicle decreased by 38% YoY in June and by 31% YoY in 1H24.
• BYD plans to invest US$1 billion to build a factory in Turkey.
• AliPay announced that foreigners’ consumption amount in China in 1H24 was eight times of last year.

• Zozo continues to post solid gains in sales but a slight dip in new customers has led some to suggest that the online fashion mall is reaching its peak. 
• Meanwhile, The Japanese fashion retail sector has seen improved performance from retail stores at the expense of e-commerce, with stores actually outperforming online last year.
• While further growth may be harder to achieve, Zozo has several strategies in place that should help it reach its target of ¥800 billion.

• Charles & Colvard operates in the lab-created diamond industry and plans to transition to lab-grown diamonds and direct distribution
• The company experienced a challenging second quarter but has a solid foundation and potential for improved financial performance in the future
• Despite current setbacks, Charles & Colvard could present a value investment opportunity for patient investors awaiting a turnaround

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• Coherent Corp. is a maker of optical components with a focus on optical connectivity within GPU clusters
• Predicted 20%+ internal rate of return over a 3-year holding period due to secular adoption trends
• Emphasis on addressing interconnect bandwidth wall issue in data centers to improve data movement speed in relation to compute speeds

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• While there may be still be some overhang once the rights shares start trading, this is a good entry point
• Applications for 6.4 Billion excess rights shares received from 11 applications
• Rights shares will start trading on Tuesday 16th of July

• Chenqi Technology Ltd., operator of the ride-sharing platform OnTime, closed its first trading day in Hong Kong 3.14% below the offering price, after raising $124 million in its initial public offering.
• Chenqi’s shares closed at HK$33.9 ($4.3) each, recovering from a 14% drop during its debut on the Hong Kong Stock Exchange. The company’s market cap stood at HK$6.92 billion.
• Chenqi, also known as Ruqi Mobility, offered more than 30 million shares at HK$35 each in its IPO, raising a net HK$969 million.

• Sam Chun Dang Pharm (000250 KS) secured exclusive 10-year contract to supply Eylea biosimilar (SCD411) to nine European countries. The company will receive 55% of gross sales of the product.
• Last month, the company placed 500K shares (~2% of issued capital) to Shinhan Investment Securities to raise KRW71.4B. Proceeds will be utilized to fund the company’s global clinical trial cost.
• The company has started exporting generic glaucoma eye drop to the U.S. and expects to start exporting at least two more generic ophthalmic products in the U.S. this year.

• One “unique” feature of China’s CXOs is that they like investment more than drug R&D business, but the investment-driven model will result in “interest-to-conflict”, which actually “crosses the line”.
• RemeGen’s shares plummet last week. In current situation of investors’ lack of confidence/trust in RemeGen, stock price may not have hit bottom yet, so no need to rush to bottom-fish.
• For Kelun Bio, if SKB264 fails to deliver good data, valuation would face the risk of pullback. After the lock-up expiry, there could be opportunity to buy at lower price.

• 10x Genomics recently disclosed its financial results for the first quarter ended March 31, 2024, showcasing a revenue increase of 5% to $141 million.
• The company’s earnings overview indicates a mixed performance with significant developments in its product offerings that could influence its future market positioning, financial health, and competitive edge.
• Positively, 10x Genomics reported robust growth in its spatial biology segment, primarily fueled by its Visium franchise and the launch of Visium HD.

• Chinese lithium giant Tianqi Lithium Corp. (002466.SZ -1.01%) is forecasting a net loss exceeding $670 million for the first half of the year as plummeting lithium prices hurt the bottom line of producers of this essential battery raw material.
• Tianqi said Tuesday that it anticipates a significant net loss of between 4.9 billion yuan and 5.5 billion yuan ($674 million and $756 million) for the six-month period.
• This includes a projected net loss of between 983 million yuan and 1.6 billion yuan for the second quarter, which is narrower than the 4 billion-yuan loss reported in the first quarte

• Gentex Corporation reported its financial results for the first quarter of 2024, revealing a mixed outlook tempered by challenges in the global auto industry yet bolstered by strategic advancements and product development.
• Net sales saw a 7% increase to $590.2 million compared to the same period last year, a performance that came notwithstanding a 3% drop in light vehicle production in the company’s primary markets.
• This discrepancy highlights Gentex’s ability to outperform the broader market, largely attributable to increased take rates of advanced features like Full Display Mirrors and growth in the auto-dimming mirror sector.

• FY05/24 revenue was JPY3.3bn, operating profit JPY1.0bn, recurring profit JPY1.1bn, and net income JPY749mn, all down YoY.
• Enjin’s FY05/25 forecast: revenue JPY2.7bn, operating profit JPY548mn, recurring profit JPY548mn, and net income JPY380mn, all expected to decline YoY.
• Enjin revised its medium-term business plan due to HR challenges and plans to release updated targets reflecting the current environment.

• Endava’s recent fiscal performance and strategic initiatives highlight a dynamic period for the company as it navigates a challenging economic landscape marked by cautious client spending and macroeconomic uncertainties.
• The third-quarter results for the fiscal year 2024 saw a revenue figure of GBP 174.4 million, which represents an 11.8% decrease in constant currency terms year-over-year from GBP 203.5 million.
• This performance was within the expected guidance range but underscored the challenges faced by the technology services sector broadly.

• Balchem Corporation’s first quarter of 2024 displayed commendable performance with a blend of robust financial metrics and strategic corporate initiatives.
• Revenues increased by 3.1% to $240 million, indicative of heightened product demand and expanded market reach.
• This was accompanied by an impressive 11.4% growth in gross margin dollars, with a significant margin expansion to 34%.

• Kobe Bussan continues to hit new lows relative to the median Japanese retailer, as cheaper alternatives continue to rebound.
• Kobe was one of the greatest beneficiaries in Japan of the Pandemic, but it is stuck at 10% growth which is no longer unusual. 
• Kobe’s wholesale model makes it difficult to benefit from food price inflation like other food retailers. Kobe Bussan could drop another 50% before reaching fair value.

• Currently, the share of natural gas in energy basket is just 6.7%, Which India is aiming for 15% by 2030.
• Capex in Place- expanding the Dahej Plant, Petchem facility(20000Cr) will be operational in 4-5 years, Kochi utilization will improve
• 20% Volume Growth expected by Management, with a rising LNG portion in overall Gas Consumption in India.

• TSMC’s June 2024 revenue increased by 32.9% YoY, exceeding expectations with $6.42 billion. 
• It dominates with >62% of the global foundry market share, propelled by AI demand. 
• Expansion into the automotive market and new fabs in the U.S. and Japan highlight TSMC’s growth strategy. 

• Delfi Ltd (DELFI SP) is Asia’s largest confectioner, with circa 50% market share of chocolate in its largest market Indonesia, despite competition from global confectionary players over many years. 
• The company produces products that are engrained in local tastes but it also produces products in different categories that compete directly with foreign competitors with a local twist. 
• The negative headwinds from higher cocoa prices have started to stabilise and Delfi has deployed various strategies to offset the impact on packaging and ingredients. 

• The company’ share bucked China catering sector’s down trend and rallied 30% in last few weeks.
• Its 2Q operating data suggest that its store opening is well on track with healthy SSSG, underpinning strong margin expansion.
• We believe that market still underestimates its growth and earnings potential which could beat consensus by wide margin. Interim results to be announced in August will be key catalyst.

• ASICS is revising up its full year forecasts, now expecting sales to reach a record ¥660 billion , up 15.7% year-over-year. There is a strong currency tail wind. 
• Still “you gotta be in it to win it..”  ASICS is currently crushing it, while Nike flounders
• A large secondary offering will likely hit the share price in the short term; there are two key risks…but it could be a good opportunity to buy. 

• Chinese innovative drugmaker Sichuan Biokin Pharmaceutical Co. Ltd. has filed with the Hong Kong Stock Exchange for an initial public offering (IPO) in an effort to tap fresh funding to support new drug development and overseas expansion.
• Biokin, already listed in Shanghai, did not disclose the target size of its Hong Kong offering. According to its preliminary prospectus, Goldman Sachs Group Inc., JPMorgan Chase & Co., and Citic Securities Co. Ltd. are joint sponsors for the share sale.
• Founded in 1996, Biokin began as a producer of chemical generic drugs and proprietary Chinese medicines. The company has since 2011 moved on to novel biological drugs, focusing on antibody-drug conjugates (ADCs) for cancer treatment.

• Since Elliott Management emerged as a shareholder in SoftBank group last month, the share price has rallied sharply, largely driven by the further appreciation of the Arm Holding share price
• SoftBank management is currently focused on growing its Gen AI investment portfolio and appears to have shelved share buybacks for now, which is likely to disappoint minority shareholders
• Despite the above challenges and the risk of de-rating at Arm, we remain positive on Softbank shares as they trade at a historically high 54%+ discount to the estimated NAV

• Gold currently trades at a historic 50% discount to its long-term value
• Gold miners are trading at a 30-60% discount to gold, presenting an investment opportunity
• Investing in GDXJ and a basket of gold miners can potentially yield high returns due to the supply dynamics of gold

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• Hesai Group shares significantly underperformed in 2024 with shares down ~47% over the year versus a ~23% gain on the Nasdaq Composite.
• Moreover, a San Francisco-based Ouster, one of the key competitors among LiDAR makers, outperformed Hesai Group and the NASDAQ on a year-to-date basis.
• I believe Hesai Group should initiate a share buyback program as RoboSense has recently announced on-market share repurchase plan to create value for its shareholders.  

• Fast Retailing delivered an impressive Q3 report. Sales +10% YoY were +3% above our expectations. 
• Big jump in profitability. OP +31% YoY to Y145b driven by +57% jump in Uniqlo Japan earnings. Record consolidated OPM ~19% 
• Uniqlo’s performance is leaving global peers in its wake. Profitability now rivalling Inditex. However, valuations remain at a premium

• June 2024 revenues of NT$207.87 billion, a decrease of 9.5% MoM but an increase of 32.9% YoY
• Q224 revenue of US$20.9 billion, $457 million above the high end, up 10.5% QoQ and up 33.7% YoY. It was also TSMC’s highest revenue quarter ever
• At NT$1,266,154 (around US$39 billion), TSMC’s YTD revenues are up 28% YoY, well in line with the company’s forecast for a >20% YoY increase in 2024.

• Taiwan Semiconductor (TSMC) – ADR (TSM US) could reach a growth rate of 25% YoY this year, with a very promising outlook for 2025.
• Artificial Intelligence (AI) remains the primary focus, with plans to continue expanding capacity in 2H24 and 2025.
• The demand from Apple (AAPL US) is expected to drive higher growth in 2H24.  

• ADF Foods (ADFL IN) is undergoing significant expansions, including brownfield projects in Nadiad and Nasik, and a greenfield project in Surat.
• These projects are expected to boost revenue significantly, enhance operational efficiency, and support the company’s growth plans.
• Company will almost double its revenue in 3 years and similarly PAT will also grow, which makes it attractive on valuation side as well. 

• On 5th July 2024, Taste Gourmet (8371 HK)  submitted an application to Hkex to transfer the listing of all its issued Shares from GEM to the Main Board. 
• The company’s case is strong as it meets all the criteria proposed by the exchange, but there is no assurance that it will obtain relevant approval from the exchange. 
• Trading at 6.4x/5.2x PE FY24/25e with 25% of the market cap in net cash and a trailing yield of 8.5%, we believe a mainboard listing would provide incremental visibility. 

• Stable, Steady, State-owned Enterprise with upside from policy push on AI
• Lowly rated company with a new cyclical growth story in a strategic sector
• Good balance sheet with the opportunity to raise payouts and yields.

• Onshore Equity ETF flows in China continued to be positive for 8th week. Southbound Connect flows in July are lower than June.
• Baidu, Bilibili and GDS have had positive share price moves on the back of news flow.
• The container shipping segment has had a sharp pullback on positive Middle East news and cement maker CNBM flags a loss in the first half.

• Within Consumer, we see Health & Personal Care as mostly defensive.
• While perfect conditions are hard to align, or remain, these days, we see mostly favorable conditions ahead for this segment, at least where it matters the most.
• Throughout the last years, consumers have faced a wide array of HPC options, some of them later phased out as companies started to focus on their core products amid rising costs.

• Alteogen Inc (196170 KS) received approval for first product, Tergase, a recombinant human hyaluronidase liquid product, in Korea. Tergase increases penetration during intramuscular or subcutaneous injection and local anesthesia.
• With excellent safety profile compared to existing animal-derived hyaluronidase products, Tergase stands to emerge as a promising alternative in the global hyaluronidase market estimated to be $1B in near future.
• Alteogen’s subsidiary, Altos Biologics submitted marketing authorization approval to the European Medicines Agency for Eylea biosimilar. Approval is expected by next year.

• Duratec Ltd (DUR AU) with strong financials, a robust order pipeline and ability to leverage technologies makes it a solid small-cap infrastructure maintenance and asset protection play
• Shares are at least 30% below fair value given profitability, growth and order book profile. Historical numbers suggest solid execution of a diverse service contract portfolio. 
• Duratec is a play on growing need for more efficient, accurate and  innovative approach for proactive infrastructure inspections and maintenance.