Category

Equity Bottom-Up

Daily Brief Equity Bottom-Up: Beyond the Bubble: A Deep Dive into the Forces Behind the Nikkei Index Surge and more

By | Daily Briefs, Equity Bottom-Up

In today’s briefing:

  • Beyond the Bubble: A Deep Dive into the Forces Behind the Nikkei Index Surge
  • Astra International (ASII IJ) – Indonesia’s Mirror Image
  • China Airports: Beijing Capital Airport Offers Best Risk/Return Payoff
  • Tencent/Netease: Approval Rotation to Netease in Feb
  • [Li Auto Inc. (LI US, BUY, TP US$52) TP Change]: What Can Go Wrong & Go Right in LI Becoming BYD #2
  • Alibaba Group Holdings: EM Fund Positioning Update
  • Uchi Tech (UCHI MK): Solid FY23 Results, Solid Dividend, FY24 Guidance Conservative
  • Sido Muncul (SIDO IJ) – Iconic Modern Jamu
  • Is OpenAI’s business model sustainable?
  • Sinotrans (598.HK), a Shining Example of SOE Reform


Beyond the Bubble: A Deep Dive into the Forces Behind the Nikkei Index Surge

By Nimish Maheshwari

  • Japan’s Nikkei Stock Average has surged past its 1989 peak, fueled by global investor interest, corporate reforms, and innovative investment initiatives like the Nippon Individual Savings Account (NISA).
  • This resurgence marks a significant milestone in Japan’s economic landscape, reflecting renewed investor confidence, structural reforms, and potential growth opportunities in the market.
  • The Nikkei’s surpassing of its previous peak signals a shift in perception towards Japan’s market potential, prompting investors to reconsider the country’s economic trajectory and explore new avenues for investment.

Astra International (ASII IJ) – Indonesia’s Mirror Image

By Angus Mackintosh

  • Astra International booked record earnings for 2023 despite some softening of commodities, driven by strong performance from the auto division and financing plus the strong performance from motorcycles. 
  • Astra has continued to invest in growth areas of the Indonesian economy with investments last year in the EV battery ecosystem, increased exposure to healthcare, and investment in data centres.
  • Management flagged a potential 2H cyclical downturn but it is well-diversified enough to weather this. Valuations look attractive on 6.8x FY2024E PER and with a 6.6% dividend yield.

China Airports: Beijing Capital Airport Offers Best Risk/Return Payoff

By Eric Chen

  • Recent newsflow and company results suggest China outbound travel is on track to recover to pre-pandemic level by the end of this year.
  • China airports have different exposures to outbound travel, which largely determines the scale of their duty-free shopping business and earnings upside amidst this recovery cycle.
  • Beijing Capital Airport offers best risk/return profile among listed China airports in our view as current valuation does not fully capture even a conservative scenario of recovery in outbound travel.

Tencent/Netease: Approval Rotation to Netease in Feb

By Ke Yan, CFA, FRM

  • China announced game approval for the Feb batch. The number of games approved remained at a higher level than 2023.
  • The pace of China game approval appears to be accelerating, to the same level as pre-tightening.
  • Netease gets one game approved but we don’t see that the acceleration of game approval benefits big names proportionally.

[Li Auto Inc. (LI US, BUY, TP US$52) TP Change]: What Can Go Wrong & Go Right in LI Becoming BYD #2

By Eric Wen

  • LI Auto reported C4Q23 top line, non-GAAP operating profit and GAAP net income (6.2%), 13% and 81% vs. our estimates and 4.9%, 52% and 102% vs. consensus.
  • We believe LI can beat our delivery estimate on exports, but can also miss the consensus on gross margins if its 2024 volume target is met by sedans;
  • We raise our TP by US$5 to US$52 and reiterate BUY.

Alibaba Group Holdings: EM Fund Positioning Update

By Steven Holden

  • Despite average weights falling from over 6% in 2020 to under 2% today, 73% of EM funds remain invested in Alibaba.
  • The make up of the investor base has changed, with a rotation between high growth investors (out) and Value investors (in).
  • Of the 73% of current holders, the core portfolio weight range sits between 1.5% and 3%, with the most bullish topping out at 5%+

Uchi Tech (UCHI MK): Solid FY23 Results, Solid Dividend, FY24 Guidance Conservative

By Sameer Taneja

  • Uchi Technologies (UCHI MK) reported a solid Q4FY23/FY23 result, with revenue up 18%/13.2% YoY, operating profit up 28%/21% YoY, but profits up 9%/8.3% YoY (due to increased taxation).
  • For FY24, the company conservatively guided a mid-single-digit decline in revenue growth. In FY23, the company guided flat USD revenue growth (but delivered 9.2% YoY).
  • Assuming the current currency and guidance, the stock trades at 14x FY24e with a yield of 7% (assuming a 100% payout similar to last two years) and ROCE above 60%. 

Sido Muncul (SIDO IJ) – Iconic Modern Jamu

By Angus Mackintosh

  • Sido Muncul‘s recent results reflect a sharp recovery in its core herbal and F&B business as increased sales volumes have brought scale benefits to its iconic products. 
  • The company saw recovery in both sales and profits, with margins improving considerably  in 4Q2023 due to increased volumes and lower raw material prices. 
  • Tolak Angin remains an iconic brand catering to all demographics with 70% leadership of its category, with Kuku Bima being the leader in powdered energy drinks. Valuations appealing versus history. 

Is OpenAI’s business model sustainable?

By Behind the Money

  • OpenAI, founded in 2015 as a nonprofit research lab, has transitioned into a for-profit entity with ambitious goals of creating artificial general intelligence to benefit humanity.
  • The company’s CEO, Sam Altman, is focused on solving the problem of super intelligence and has plans to set up his own semiconductor manufacturing pipeline and extend human lifespan.
  • OpenAI’s business model now involves catering to enterprise customers to generate revenue, and they face challenges in balancing their grand mission with the need for significant investment.

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.


Sinotrans (598.HK), a Shining Example of SOE Reform

By Rikki Malik

  • A Profit-Oriented State Owned Enterprise that is walking the walk.
  • Management incentives are aligned with shareholders, a rarity in China.
  • Plenty of upside remains despite the market outperformance to date

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Daily Brief Equity Bottom-Up: Samsonite (1910 HK) Takeover Interest: Hold on to These Shares and more

By | Daily Briefs, Equity Bottom-Up

In today’s briefing:

  • Samsonite (1910 HK) Takeover Interest: Hold on to These Shares
  • [Baidu, Inc. (BIDU US, BUY, TP US$146)TP Change]: The Commercialization Path of AI Is Becoming Clear
  • BFI Finance Indonesia (BFIN IJ) – Visibility Improves
  • Cathay Pacific – Reported Air China Interest Prompts Assessment of Structural Disadvantages
  • MTAR Technologies- Forensic Analysis
  • Matahari Department Store (LPPF IJ) – Primed for Recovery
  • Comfortdelgro (CD): March on Chinese Tourists
  • [Luckin Coffee (LKNCY US, BUY, TP US$41) TP Change]: Weak Earnings Could Be Temporary…Reiterate BUY
  • Air China (753 HK): Up Stakes in CX?
  • Core Quality at Unjustified Discount


Samsonite (1910 HK) Takeover Interest: Hold on to These Shares

By Mohshin Aziz

  • Bloomberg reported that Samsonite (1910 HK) is considering several options, including going private, and there are several suitors including from buyout firms  
  • Share price has surged by 14% in the morning session. Stock is still very cheap, at 10.5x PE, 7.5x EV/EBITDA with an impressive ROE of 30%
  • Our quick take values Samsonite at HKD34/share, based on its forecasted +1 year earnings multiplied to its average long-term PE of 15.5x 

[Baidu, Inc. (BIDU US, BUY, TP US$146)TP Change]: The Commercialization Path of AI Is Becoming Clear

By Ying Pan

  • We expect Baidu to report C4Q23 revenue, GAAP op. profit and GAAP net income inline, (2.3%) and (4.5%) vs. consensus.
  • The slight bottom-line miss was mainly attribute to the increased marketing costs related to user acquisition. Baidu cloud revenue is robust due to AI product stimulating demand. 
  • We cut our target price to US$146 for the spendings related to the construction of future e-commerce business but maintain BUY for its cheap valuation.

BFI Finance Indonesia (BFIN IJ) – Visibility Improves

By Angus Mackintosh

  • BFI Finance Indonesia saw a marked turnaround in new bookings and a declining NPF ratio in 4Q2023, as its business recovered from the malware attack in May last year.
  • The company has started to be more aggressive in non-dealer 4W space but remains cautious on 2W. Write-offs peaked in 4Q2023 and will decline in 2024, leading to lower CoC. 
  • BFIN will launch a tripartite collaboration with GoTo and Bank Jago which will help to drive future bookings growth. Valuations remain attractive with BFIN trading in 2.0x PBV 

Cathay Pacific – Reported Air China Interest Prompts Assessment of Structural Disadvantages

By Neil Glynn

  • We publish a deep dive on historical margin management at Cathay Pacific following Bloomberg reports that Air China is considering raising its 29.99% stake.
  • We see Cathay’s consistent underperformance of the global industry as due to structural disadvantages competing against lower cost competitors without the benefit of attractive joint ventures or M&A.
  • Our deep dive comparing margin generation to ten major global peers highlights weak pricing power without sufficient offset from staff cost/other cost efficiencies as the key problem.

MTAR Technologies- Forensic Analysis

By Nitin Mangal

  • MTAR Technologies (MTARTECH IN)  is a precision engineered company that caters to customers in clean energy, Space, Defense sectors, etc. 
  • The company has done well over the last few years in terms of securing business, however there are concerns on the margins end, working capital and cash generation. 
  • There also exists a high business risk in terms of customer concentration since more than 75% of the revenues (F23) come from one single entity.

Matahari Department Store (LPPF IJ) – Primed for Recovery

By Angus Mackintosh

  • Matahari Department Store (LPPF IJ) reported another slow set of results in 4Q2023, as it saw slower demand and continues to clear aged inventory. 
  • The company is well-prepared for the upcoming Lebaran season with more conservative inventory levels. It will also see the benefits of new brands coming on stream this year. 
  • Matahari Department Store will open 4-6 new stores in 2024 but close 10 underperforming stores, with a continued focus on new DP brands like SUKO. Valuations remain attractive. 

Comfortdelgro (CD): March on Chinese Tourists

By Henry Soediarko

  • Comfortdelgro Corp (CD SP) share price has underperformed its tourism related transport operator peers.
  • Key drivers are still strong, including the expected influx of Chinese tourists from visa-free travel arrangements.
  • Valuation is still compelling, and it is not too late to own it.

[Luckin Coffee (LKNCY US, BUY, TP US$41) TP Change]: Weak Earnings Could Be Temporary…Reiterate BUY

By Eric Wen

  • Luckin Coffee reported 4Q23 revenue/non-GAAP NI in-line/(39.8%) vs. our estimate due to (1) extra winter subsidies; (2) rental cost from new stores; (3) more operating expenditures.
  • We view the non-GAAP NPM decline to 5.1% in 4Q23 as temporary and outlook for sequential improvements in 1H24 from (1)ASP rebound from easing competition, (2)efficiency improvement in rental cost
  • We think Luckin’s profitability outlook is intact and maintain BUY rating, but lower TP by US$2 to US$41 to factor in the rising cost.

Air China (753 HK): Up Stakes in CX?

By Osbert Tang, CFA

  • Speculations on Air China Ltd (753 HK) seeking control of Cathay Pacific (293 HK) reappeared recently. We think a change in CX’s ownership is just a matter of time.
  • CX has been a more important profit contributor to Air China after the pandemic, and depends on pricing, Air China is expected to benefit from such acquisition.
  • Both are trading on 0.5SD below their 5-year P/B average and we prefer CX in the short term, but Air China looks to be a better long-term choice. 

Core Quality at Unjustified Discount

By Jesus Rodriguez Aguilar

  • Inmobiliaria Colonial Sa (COL SM), with a quality portfolio, trades at 55% discount to NAV. Lacking short-term catalysts, buy on improving earnings guidance, rate cuts and favorable market conditions.
  • Colonial probably has one of the best-quality office portfolio in Europe, with the great majority of its assets are situated in core areas of Paris, Madrid, and Barcelona.
  • Colonial offers a 24.5% upside, which implies a 40% discount/NAV. The shares offer a 5.26% 2024e dividend yield (source: IBES), which I consider sustainable over time.

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Daily Brief Equity Bottom-Up: Alibaba (9988 HK):  Value Proposition Looks Clean and more

By | Daily Briefs, Equity Bottom-Up

In today’s briefing:

  • Alibaba (9988 HK):  Value Proposition Looks Clean
  • TSMC (2330.TT; TSM.US): Foundry Market Forecast in 2030F; TSMC Had Developed The 2nm Nanosheet.
  • Big Returns on Small Investment – A Unique Special Situation in Indiabulls Housing
  • Li Auto (LI US): 4Q23, High Growth and Profit, A Winner of Market Concentration, Upgraded to Hold
  • China Consumption Weekly (26 Feb 2024): Alibaba, Xpeng, HiPhi, Tuhu Car, Luckin
  • Grab Holdings (GRAB US) – Surging Ahead of Expectations
  • Appier (4180) | A Volatile Stock Despite Solid SaaS Metrics
  • Booking.com (BKNG US): Buying Back Shares Until There Is None Left
  • Bumrungrad Hospital (BH TB): Record High Performance in 2023; Middle-East Performance Recovers
  • Chinese Education Giant Urged to Repay Bondholders Early as Default Fears Mount


Alibaba (9988 HK):  Value Proposition Looks Clean

By Steve Zhou, CFA

  • It is well-known that Alibaba (ADR) (BABA US) is cheap (9x FY24 PE, fiscal year ending March; 8x FY23 free cash flow; net cash 25% of market cap).
  • Taking into account all of the major moving parts, I believe Alibaba can now be categorized as a good value stock. 
  • Shareholder returns through buyback and dividend, minus stock-based compensation in 2023 calendar year equal to around 5% yield.

TSMC (2330.TT; TSM.US): Foundry Market Forecast in 2030F; TSMC Had Developed The 2nm Nanosheet.

By Patrick Liao

  • TSMC expects the foundry, semiconductor, electronics, industrial technology, and global GDP to be $0.25 trillion, $1 trillion, $3 trillion, $12 trillion, and $145 trillion, respectively, in 2030F
  • Transistor technology is constantly evolving, and FinFET architecture will be followed by Nanosheet and others.
  • In the transition, the automotive market belongs to IDM companies, but the utility of ADAS (Advanced Driver Assistance Systems) could fall under Foundry territory.  

Big Returns on Small Investment – A Unique Special Situation in Indiabulls Housing

By Nimish Maheshwari

  • Indiabulls Housing’s Right Issue offers a unique opportunity to earn higher returns on smaller investment. 
  • Indiabulls Housing is at the cusp of a turnaround: detaching its old identity maligned by various governance issues 
  • Turnaround + Special Situation Bet – A potential opportunity to make outsized returns owing to the lower initial investment requirement in a company undergoing significant turnaround

Li Auto (LI US): 4Q23, High Growth and Profit, A Winner of Market Concentration, Upgraded to Hold

By Ming Lu

  • In 4Q23, revenue grew by 136% and operating profit was significantly higher than the market consensus.
  • Li Auto grew the most rapidly among the top-ten Chinese NEV sellers.
  • We believe Li Auto will be one of the winners after the market gets more concentrated. Upgrade to Hold.

China Consumption Weekly (26 Feb 2024): Alibaba, Xpeng, HiPhi, Tuhu Car, Luckin

By Ming Lu

  • Alibaba plans to provide operational services to third-party sales broadcasters.
  • Xpeng will hire 4,000 employees and raise research budget by 40%.
  • Tuhu Car expected that its net profit will turn positive in 2023.

Grab Holdings (GRAB US) – Surging Ahead of Expectations

By Angus Mackintosh

  • Grab Holdings reported nothing short of an impressive set of results for 4Q2023, booking another positive adjusted EBITDA but also an actual net profit and positive adjusted cash flow. 
  • The company saw its mobility GMV come in above pre-COVID levels and deliveries GMV growth reaccelerated, while also reaching positive adjusted EBITDA for a second quarter.
  • Grab aims to deepen its engagement with users through affordable and premium offerings and a laddered pricing approach, with additional focus on financial services and advertising to come in 2024.

Appier (4180) | A Volatile Stock Despite Solid SaaS Metrics

By Mark Chadwick

  • Post FY23 results in mid-February, Appier’s stock exhibited significant volatility, despite robust financial performance.
  • We believe that Appier is a beneficiary of continued growth in ecommerce and increasing ubiquity of AI solutions for marketing.  
  • Appier trades at a significant discount to global peers and domestic SaaS companies, suggesting significant upside

Booking.com (BKNG US): Buying Back Shares Until There Is None Left

By Mohshin Aziz

  • 4Q23 results beat expectations with record revenues and profits and announced a maiden cash dividend of USD8.75/share (0.35% yield)
  • But, share price plunged by 10% on soft guidance of 4-6% YoY growth in room-night booked in 1Q24, due to the impact of high-interest rates and the ongoing wars 
  • Good opportunity to buy on dips, stock trading at ~20x FY24 PE, ~18% discount to LT mean. Plus, there is a balance USD7.5b (6.1% shares in issue) of share buybacks  

Bumrungrad Hospital (BH TB): Record High Performance in 2023; Middle-East Performance Recovers

By Tina Banerjee

  • In 2023, Bumrungrad Hospital Pub Co (BH TB) reported 23% YoY revenue growth to THB25.6B, driven by 32%, 17%, and 11% YoY growth in international, expat, and Thai patients, respectively.
  • Driven by high margin international patients, increasing inpatient revenue, and continued cost management, gross profit, EBITDA, and net profit margin expanded in 2023.
  • Unrest in Middle-East remained an overhang on BH’s shares. However, revenue from Middle-East patients increased at 23.3% in H2 2023 compared to H1 2023.

Chinese Education Giant Urged to Repay Bondholders Early as Default Fears Mount

By Caixin Global

  • Some global investors are urging Chinese private education giant XJ International Holdings Co. Ltd. to redeem half of its $350 million in bonds before maturity, as the creditors fear the Hong Kong-listed firm may intentionally default on repayments.
  • The bonds are due in 2026, but the creditors asked for the early redemption to be completed by March 2 in a letter sent to the Chinese company last month by their legal adviser, Chicago-headquartered global law firm Kirkland & Ellis LLP.
  • The creditors are a group of large international investors who collectively hold no less than $154 million, or about 50%, of the bonds’ outstanding principal amount, according to the letter seen by Caixin.

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Daily Brief Equity Bottom-Up: Taiwan Dual-Listings Monitor: TSMC Post-CNY Spread Persisting; Why UMC Discount Could Flip Positive and more

By | Daily Briefs, Equity Bottom-Up

In today’s briefing:

  • Taiwan Dual-Listings Monitor: TSMC Post-CNY Spread Persisting; Why UMC Discount Could Flip Positive
  • Trip.com Q4 Quick Take: Strong Top-Line Growth | Impressive Expense Control | And Not Expensive
  • ChipMOS: Valuation at Risk Given Latest Results; Short Interest Shows Sentiment Has Room to Shift
  • Aritzia (ATZ) – Sunday, Nov 26, 2023
  • Luckin Coffee (LKNCY US): Feeling Lucky in a Challenging Market
  • MSOS – Going Higher!
  • Ping An Healthcare and Technology (1833.HK) – Valuation Logic May Completely Change Due to New Path
  • Asia Vital Components (3017) – Sunday, Nov 26, 2023
  • Airbus Se (EADSY) – Sunday, Nov 26, 2023
  • Millennium Services Group Ltd – Guidance and Scheme of Arrangement on Track


Taiwan Dual-Listings Monitor: TSMC Post-CNY Spread Persisting; Why UMC Discount Could Flip Positive

By Vincent Fernando, CFA

  • TSMC: +17.3% Premium, High Double Digit Level Persisting Since CNY
  • UMC: -1.5% Discount, We Believe Spread Biased to Go Positive
  • ChipMOS: +0.6% Premium, Collapsed from +4.6%. Now Within Typical Range.

Trip.com Q4 Quick Take: Strong Top-Line Growth | Impressive Expense Control | And Not Expensive

By Daniel Hellberg

  • Trip.com reported a strong set of Q4 and FY23 earnings results last week
  • Company has held the line on SG&A expenses; look for strong H124 growth
  • We believe shares are cheap and recommend investors buy below US$43/ADS

ChipMOS: Valuation at Risk Given Latest Results; Short Interest Shows Sentiment Has Room to Shift

By Vincent Fernando, CFA

  • ChipMOS Margin Rebound Sputters, Guidance Implies Margins Could Remain Under Pressure
  • Valuation Appears Precarious In Light of Latest Results and Guidance
  • Valuation Appears Precarious In Light of Latest Results and Guidance

Aritzia (ATZ) – Sunday, Nov 26, 2023

By Value Investors Club

Key points

  • Aritzia has potential for significant share price upside, with potential returns between 170% to 344% over a 3-year period
  • The author has previously exited the stock at $50 but is considering going long again due to the brand’s continued strength despite recent challenges
  • The analysis questions whether Aritzia’s targets for fiscal year 2027 are reasonable and raises concerns about the company’s potential for future growth

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.


Luckin Coffee (LKNCY US): Feeling Lucky in a Challenging Market

By Osbert Tang, CFA

  • Luckin Coffee (LKNCY US) concluded FY23 with a 203.3% surge in non-GAAP net profit to Rmb3.2bn, benefiting from higher store count and monthly transacting customers.
  • Luckin plans to lift store count by at least 23%, with total to reach over 20,000 in FY24. Product innovation, promotional discount reduction, and better store efficiency are profit drivers. 
  • Net cash reached Rmb3.8bn, or 7% of market cap. With a consensus EPS forecast of 28% CAGR in the next two years, its 15.1x and 11.7x PERs are not stretched.

MSOS – Going Higher!

By Rikki Malik

  • A bombed-out sector down 80% from the peak is worth another look
  • Weaker companies have exited the industry or have already gone under 
  • The sector ETF has a good risk reward  with catalysts ahead

Ping An Healthcare and Technology (1833.HK) – Valuation Logic May Completely Change Due to New Path

By Xinyao (Criss) Wang

  • Fang Weihao’s departure means PAGD’s strategic transformation failed. The business model of being a “vassal” of Ping An Group seems hard to bring high valuation due to “discounted” growth potential.
  • PAGD is at a crossroads. The question is which development path will the new CEO choose – Follow Fang Weihao’s strategy or return to the traditional Internet healthcare business model?
  • Both directions have painful costs that investors will not be happy with. Therefore, we recommend that investors remain sober and rational in the face of the bullish view on PAGD.

Asia Vital Components (3017) – Sunday, Nov 26, 2023

By Value Investors Club

Key points

  • AI is a rapidly growing trend in the global market, with Taiwanese manufacturer AVC experiencing significant growth in their stock value.
  • AVC has shown strong financial performance in recent years, with impressive average revenue and margin metrics.
  • The company is expected to continue its growth trend in 2023, with higher margins than historical averages, as the impact of technology and COVID has been beneficial for AVC.

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.


Airbus Se (EADSY) – Sunday, Nov 26, 2023

By Value Investors Club

Key points

  • Honeywell CEO optimistic about strong performance of long-cycle Aero business, particularly aero cycle
  • Predicts double-digit growth in 2024 and sustained high growth rates until 2030
  • Airbus experiencing strong orders and growing backlog, production challenges in matching supply with demand indicate tight aircraft market

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.


Millennium Services Group Ltd – Guidance and Scheme of Arrangement on Track

By Research as a Service (RaaS)

  • Human services company Millennium Services Group Ltd (ASX:MIL) has released its H1 FY24 interim result, with both revenue (pre-disclosed) and EBITDA in line with RaaS estimates.
  • Adjusted H1 FY24 EBITDA increased ~100% on the back of 15% revenue growth, a 20bps increase in gross margin and a well-controlled cost base.
  • Management has reiterated both revenue and EBITDA guidance for FY24 which are reflected in current RaaS estimates. 

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Daily Brief Equity Bottom-Up: Intel Snags Altman To Close Foundry Day Event and more

By | Daily Briefs, Equity Bottom-Up

In today’s briefing:

  • Intel Snags Altman To Close Foundry Day Event
  • Alnylam Pharmaceuticals: Progress of the HELIOS-B Study & 4 Other Major Drivers
  • Deere & Co: Expansion In Precision Agriculture & 5 Other Factors Driving Growth In 2024! – Major Drivers
  • China Healthcare Weekly (Feb.23)- TCM Ushers in a Harvest Period, Biotech Bottom-Line, Kelun-Biotech
  • Asian Dividend Gems: Youngone Holdings
  • Avantor Inc: Is The Growth in the Aerospace and Defense Market Changing The Game? – Major Drivers
  • HubSpot Inc: Are They Successfully Implementing AI In Their Operations? – Major Drivers
  • CF Industries: Export Opportunities and Global Market Dynamics – Major Drivers
  • Applied Materials Inc (AMAT): Is The Escalation In Services Growth A Major Growth Catalyst In 2024? – Major Drivers
  • Martin Marietta Materials: Expected Improvements In Housing Market Conditions Could Help Them Recover In 2024 & Beyond! – Major Drivers


Intel Snags Altman To Close Foundry Day Event

By William Keating

  • Despite the high-profile announcement of his attendance, his segment was less than 3 minutes long!
  • Intel’s CEO alluded to a partnership with OpenAI and implied there’s more to come yet there’s been no public announcement of any such partnership. 
  • Microsoft’s commitment to use Intel’s 18A is a vote of confidence in their foundry offering. Let’s see how it plays out.

Alnylam Pharmaceuticals: Progress of the HELIOS-B Study & 4 Other Major Drivers

By Baptista Research

  • Alnylam Pharmaceuticals reported solid progress across all business areas in 2023, delivering robust product growth for its four wholly-owned commercial medicines, and reaching a milestone of over 5,000 patients now on an Alnylam commercial RNAi therapeutic.
  • The company recorded $1.24 billion in global net product revenues.
  • Alnylam also extended its leadership in RNAi therapeutics, including pioneering delivery of RNAi therapeutics to adipose and muscle tissues.

Deere & Co: Expansion In Precision Agriculture & 5 Other Factors Driving Growth In 2024! – Major Drivers

By Baptista Research

  • Deere & Company’s earnings revealed a company operating well in the midst of an increasingly competitive market landscape, with stable demand across the majority of sectors.
  • The firm noted solid execution across the cycle with an 18.5% margin for equipment operations in the first quarter.
  • Land sales fell by 4% to $12.658 billion while equipment operations also dropped 8% to $10.486 billion.

China Healthcare Weekly (Feb.23)- TCM Ushers in a Harvest Period, Biotech Bottom-Line, Kelun-Biotech

By Xinyao (Criss) Wang

  • Thanks to the continuous support of policies, the TCM industry has ushered in a harvest period. So, TCM remains to be a relatively certain field for investment in China healthcare. 
  • Biotech companies must meet several conditions in order to have good long-term development, such as sufficient financial support, at least one blockbuster product and high moral standard of the management.
  • Reasonable valuation of Sichuan Kelun-Biotech Biopharm (6990 HK) is about RMB15 billion. So, we think it is now overvalued. Meanwhile, restricted shares will be lifted 12 months after the IPO.

Asian Dividend Gems: Youngone Holdings

By Douglas Kim

  • Youngone Holdings is an attractive deep value stock. Net cash (including short term investments) was 1.1 trillion won at the end of 3Q 2023 (79% of market cap).  
  • Youngone Holdings is the holding company of Youngone Group. Youngone Corp is best known for its OEM apparel business for major branded companies such as The North Face and Patagonia.
  • We found Youngone Holdings using Smartkarma’s Smart Score Screener system. 

Avantor Inc: Is The Growth in the Aerospace and Defense Market Changing The Game? – Major Drivers

By Baptista Research

  • Avantor delivered fourth quarter business results at the high end of their guidance across key financial metrics, including a core organic revenue decline of 4.8%, adjusted EBITDA margin of 17.5% and adjusted EPS of $0.25.
  • They demonstrated robust cash flow management and considerable debt reduction, exceeding their guidance range.
  • The company experienced industry wide headwinds due to inventory destocking and cautious customer spending.

HubSpot Inc: Are They Successfully Implementing AI In Their Operations? – Major Drivers

By Baptista Research

  • HubSpot, a leading software company, provided a generally positive update on the firm’s financial performance, strategic direction, and plans for future growth.
  • On the financial front, the firm reported solid results for Q4 2023.
  • Revenue grew by 21% year-on-year in constant currency terms, and by 25% for the full year 2023.

CF Industries: Export Opportunities and Global Market Dynamics – Major Drivers

By Baptista Research

  • CF Industries Holdings Inc., a global leader in nitrogen-based fertilizers, reported a strong performance for the full year and fourth quarter of 2023.
  • The company posted an adjusted EBITDA and net cash from operations of approximately $2.8 billion each, and a free cash flow of $1.8 billion.
  • This robust outcome was attributed to a balanced nitrogen supply-demand situation and energy spreads favoring the company’s low-cost production in North America..

Applied Materials Inc (AMAT): Is The Escalation In Services Growth A Major Growth Catalyst In 2024? – Major Drivers

By Baptista Research

  • Applied Materials delivered a decent result and the management claims to have made a strong start to the current fiscal year, exceeding its earnings projections.
  • Strengths identified include the company’s innovation strategy and position at key industry inflections, such as new-foundry logic and developments in its DRAM market where it has captured over 50% of market share.
  • Revenue from its advanced packaging product portfolio is predicted to reach nearly $1.5 billion in 2024.

Martin Marietta Materials: Expected Improvements In Housing Market Conditions Could Help Them Recover In 2024 & Beyond! – Major Drivers

By Baptista Research

  • Martin Marietta, a provider of aggregates and heavy building materials, presented a decent financial performance for the full year and fourth quarter of 2023.
  • Positive elements in the report include the company’s record financial performance, reaching a milestone of $2.1 billion in adjusted EBITDA. Additionally, the company noted that it had a successful, safe year without any major incidents.
  • This was also underpinned by the strong performance of the company’s aggregates business which drove revenues up by over 10% to $4.3 billion.

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Daily Brief Equity Bottom-Up: TSMC (2330.TT; TSM.US): The Implications of Feb Sales and more

By | Daily Briefs, Equity Bottom-Up

In today’s briefing:

  • TSMC (2330.TT; TSM.US): The Implications of Feb Sales, TSMC 2nd Japanese Fab and NVDA Stock Price.
  • Alteogen (196170 KS): Modified License Agreement For Major Platform Technology Is A Hard Catalyst
  • Cisco Systems: How Successful Are Their Efforts Of Digging Into AI? – Major Drivers
  • Deep Value Driller (DVD) – Thursday, Nov 23, 2023
  • Inox Wind Merger: Behind the Arbitrage
  • LATAM Group – Strong Momentum and Strategic Opportunities
  • Sony Corporation: Expansion of smartphone market
  • Lyft Inc: Expanding Portfolio through Strategic Partnerships & 5 Major Growth Drivers! – Financial Forecasts
  • DaVita Inc: 5 Biggest Catalysts Of Their Future Growth! – Financial Forecasts
  • Occidental Petroleum Corporation: Enhanced Oil Recovery (EOR) and Growth Strategy In 2024! – Major Drivers


TSMC (2330.TT; TSM.US): The Implications of Feb Sales, TSMC 2nd Japanese Fab and NVDA Stock Price.

By Patrick Liao

  • Usually, February is typically the month with the fewest working days of the year, and therefore, revenue is likely to be at its lowest as well.
  • We consider that the Taiwanese government may desire TSMC to build fabs in countries aligned with those who signed the “Wassenaar Arrangement.” 
  • The price hike of NVIDIA Corp (NVDA US) by US$785.38 on February 22 in the US market could signal an important development in the AI sector.

Alteogen (196170 KS): Modified License Agreement For Major Platform Technology Is A Hard Catalyst

By Tina Banerjee

  • Alteogen Inc (196170 KS) has modified the existing license agreement with Merck. Revised terms of the agreement grant Merck exclusive global right to ALT-B4 for a specific product group, pembrolizumab.
  • Under the terms of the revised agreement, Alteogen will receive an upfront payment of $20M from Merck. Alteogen will also receive additional milestone payment of up to $432M.
  • Approval of Alteogen’s first proprietary product, Tergase (expected in early 2024) will be the next major catalyst for the company.  

Cisco Systems: How Successful Are Their Efforts Of Digging Into AI? – Major Drivers

By Baptista Research

  • Cisco Systems Inc.’s fiscal second-quarter results demonstrated a mix of positives and negatives, balanced by the company’s flexible strategic route and shifting market conditions.
  • Revenue for the quarter edged at the high end of the company’s guidance range, owing to robust operating leverage across business segments that surpassed margin expectations and facilitated better-than-expected earnings per share.
  • A total of $2.8 billion value was returned to investors through dividends and share buybacks, evidencing Cisco’s ongoing commitment to its shareholders.

Deep Value Driller (DVD) – Thursday, Nov 23, 2023

By Value Investors Club

Key points

  • Oslo-listed company focused on residual value of a 7th generation UDW drillship acquired at low cost before offshore market downturn
  • Market cap of USD 187 million with potential for dividends and special payouts
  • Secured charter contract with Saipem, poised to generate significant revenue and deliver solid returns 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.


Inox Wind Merger: Behind the Arbitrage

By Nitin Mangal

  • INOX India Limited (INOX IN) ( or IWL) and Inox Wind Energy (IWEL IN) (or IWEL) have announced a merger, where IWEL will be amalgamated with IWL
  • The share swap ratio in the scheme of amalgamation gives a very evident arbitrage opportunity. 
  • The arbitrage opportunity has become bigger than when announced in June 2023. While the strategy is still possible, we try to justify the market behaviour.

LATAM Group – Strong Momentum and Strategic Opportunities

By Neil Glynn

  • LATAM Group surprised the market with strong guidance for 2024 earnings growth following upgrades through 2023. We raise our 2024 EBITDAR 14% to $2.8bn.
  • A successful restructuring under Chapter 11, and market leadership in key regions, is paying off for LATAM as demand remains robust.
  • Such a strong recovery positions it to make further strategic gains, particularly with the risk that competitor GOL must shrink its fleet through its own CH11 processs.

Sony Corporation: Expansion of smartphone market

By Baptista Research

  • Based on the Q3 consolidated financial results announcement for Sony Group Corporation for FY 2023, the company showed considerable resilience against some difficult market conditions.
  • One critical highlight was the significant increase of 22% in consolidated sales for the quarter compared to the same quarter the previous fiscal year, reaching a record high of JPY 3,747.5 billion.
  • Notably, the operating income and net income also increased substantially year-on-year and reached the second-highest level on a quarterly basis.

Lyft Inc: Expanding Portfolio through Strategic Partnerships & 5 Major Growth Drivers! – Financial Forecasts

By Baptista Research

  • Lyft’s positive financial performance and future expectations make it an attractive investment opportunity.
  • Lyft’s 2023 performance was marked by significant growth in the company’s rideshare service, with gross bookings reaching an all-time high, ride growth accelerating each quarter and ending the year up 26% in Q4.
  • This growth demonstrates the strong demand for Lyft’s service, which bodes well for its future performance.

DaVita Inc: 5 Biggest Catalysts Of Their Future Growth! – Financial Forecasts

By Baptista Research

  • DaVita, a healthcare company specializing in kidney care and dialysis services, highlights its successful performance for the financial year of 2023 due to strengthening investment on the company’s platform.
  • Notably, despite external challenges, the company experienced significant growth with a 20% year-over-year rise in adjusted operating income, a 28% increase in adjusted EPS, and a return of the leverage ratio back to the target range.
  • The company outperformed its annual profitability targets for integrated kidney care and anticipates reaching break-even or better performance by 2026.

Occidental Petroleum Corporation: Enhanced Oil Recovery (EOR) and Growth Strategy In 2024! – Major Drivers

By Baptista Research

  • Occidental Petroleum’s Q4 2023 has displayed a robust performance in recent quarters, achieving a strong free cash flow of $5.5 billion.
  • Significantly, this has facilitated the company in paying dividends, repurchasing common shares, and investing back into the business.
  • The primary driver of this achievement is accredited to technical expertise, leading-edge technologies, and innovation, showcasing the company’s operational strength.

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Daily Brief Equity Bottom-Up: Sea Will Release Its Q4 2023 Earnings Report Soon and more

By | Daily Briefs, Equity Bottom-Up

In today’s briefing:

  • Sea Will Release Its Q4 2023 Earnings Report Soon
  • Trip.com (9961 HK, TCOM US): 4Q23, Revenue Up by 105%, But Reached Our Last Price Target
  • Nvidia: A Quality Stock that Shows Human Investors Are Unable to Discount Exponential Growth
  • SUMCO’s Sobering Outlook For Silicon Wafers
  • Trip.com (9961 HK): Looks to Reap More Recovery Benefits
  • [NetEase, Inc. (NTES US, BUY, TP US$118) TP Change]: Strong In-House Game Performance Drives Margins
  • Qantas – Two-Year Earnings Re-Set in Prospect
  • StandChart Is Likely to Have More China Bohai Impairment
  • A Longtime Aerospace Analyst Questions Boeing’s Future
  • South Korean Banks; Woori Financial (316140 KS) Added to Buy List, Joining KB Financial (105560 KS)


Sea Will Release Its Q4 2023 Earnings Report Soon

By Simon Torring

  • Shopee – Sea’s largest business unit and Southeast Asia’s largest e-commerce platform – has reported negative EBITDA for most of the 8 or so years since its launch. 

  • Investors now however appear to be looking for earnings growth. In 7 of the last 9 quarterly earnings reports, investors have rewarded the company every time it has reported earnings growth (its share price has gone up in the day after the release), and penalized when it has not.

  • Based on our analysis (and subject to the disclaimer included below), we expect Shopee’s GMV and Revenue to improve in Q4 2023 (as compared to the previous quarter) along with its EBITDA, although earnings will likely remain in negative territory.


Trip.com (9961 HK, TCOM US): 4Q23, Revenue Up by 105%, But Reached Our Last Price Target

By Ming Lu

  • The main businesses, hotel and air ticket bookings increased by 131% YoY and 86% YoY in 4Q23.
  • The Chinese traveling market continued its recovery after the lift of the lockdown at the end of 2022.
  • The stock price is close to our last price target – Downgrade to Hold.

Nvidia: A Quality Stock that Shows Human Investors Are Unable to Discount Exponential Growth

By Jeroen Blokland

  • Nvidia’s blowout earnings number is another example of how grasping exponential growth trends is extremely difficult for human investors.
  • Unlike what is often assumed, Nvidia, for now, qualifies as a quality stock, revealing relentless competitive power, low debt, and reasonable valuation.
  • Nvidia’s weight with Quality ETFs is bigger than its weight in the MSCI World Index, adding to quality stock outperformance.

SUMCO’s Sobering Outlook For Silicon Wafers

By William Keating

  • Q423 revenues of ¥105.1 billion, about 5% better than forecasted, up 5% QoQ but down ~10% YoY.
  • Q124 revenues forecasted to decline 17% QoQ to ¥87 billion. Not surprisingly, EBITDA will also decline 33% QoQ to ¥22.1 billion.
  • On a brighter note, demand growth driven by generative AI will roughly double wafer demand for servers (AI+General) by 2027

Trip.com (9961 HK): Looks to Reap More Recovery Benefits

By Osbert Tang, CFA

  • Trip.com Group (9961 HK) has a remarkable 4Q23 with adjusted net profit surged 437.1% YoY. Higher volume and better market efficiency have resulted in massive margin expansion.
  • Net cash has ballooned to about 15% of its share price, and this has allowed it to carry out a massive US$300m Capital Return Program in 2024.
  • Business has outperformed the industry in CNY, with domestic hotel and air business volume increased by 60% and 50% YoY. Its overseas platform also saw double-digit growth.

[NetEase, Inc. (NTES US, BUY, TP US$118) TP Change]: Strong In-House Game Performance Drives Margins

By Ying Pan

  • We expect NetEase to report C4Q23 revenue, GAAP op. profit and GAAP net income 4.9%, 5.7% and 8.5% vs. consensus.
  • The robust topline growth was mainly contributed by revenue recognition of <Justice Mobile> in the peak summer season.
  • The grossing of legacy titles like <FWWJ> is also growing steadily due to the low-price strategy. We raise our TP to US$118 to reflect the rich and diversified pipeline…

Qantas – Two-Year Earnings Re-Set in Prospect

By Neil Glynn

  • With 1H24 results, Qantas followed Singapore Airlines in highlighting fare weakness in international markets and we cut our pre-tax income by 13% to FY24.
  • We expect FY24 pre-tax income to fall 16% yoy but also expect FY25 to fall another 5%, as our EBITDAR/ASK remains 10% above FY19 levels following 12% in 2H24.
  • While international markets continue to normalise, Qantas’s domestic market structure positions it favourably to continue to invest in customer service and product.

StandChart Is Likely to Have More China Bohai Impairment

By Fern Wang

  • StandChart may need to take further impairment hit on China Bohai Bank
  • VIU model is used to justify the higher carrying value compared to fair value of the holdings.  There is zero headroom between the VIU model and the carrying amount.
  • We looked at VIU model assumptions for HSBC and StandChart. A declining NIM is likely put further pressure on the VIU model output for StandChart.  

A Longtime Aerospace Analyst Questions Boeing’s Future

By Odd Lots

  • Boeing shares are down 20% since the start of the year, despite a booming global market for aviation
  • Boeing’s focus on financial performance and stock price over safety and engineering has been a concern
  • The current CEO David Calhoun dissolved the company’s strategy department, raising questions about Boeing’s future direction and decision-making strategies

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.


South Korean Banks; Woori Financial (316140 KS) Added to Buy List, Joining KB Financial (105560 KS)

By Victor Galliano

  • In our latest South Korean banks screener; we add Woori Financial to existing buy KB Financial as our preferred Korean banks picks
  • Delinquency ratios continued to worsen QoQ, with only Woori bucking the 4Q23 NPL trend; Woori has lagged in terms of returns, but we expect CoR control to support 2024 returns
  • KB has a low PBV ratio relative to its ROE, it delivers rising post-provision returns,  it has a high CET1 ratio and it maintains a healthy LDR

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Daily Brief Equity Bottom-Up: Shortlist Of High Conviction Ideas: Income and more

By | Daily Briefs, Equity Bottom-Up

In today’s briefing:

  • Shortlist Of High Conviction Ideas: Income, Value, and Margin of Safety – February 2024
  • United Microelectronics Is Becoming a Great Long-Term Acquisition Target for Intel
  • Taiwan Tech Weekly: AI Plays Weak Ahead of Nvidia Results Today; Intel & UMC; ARM & Novatek
  • Singapore Airlines – Onset of Earnings Normalization to Heighten Focus on Efficiency
  • From Nvidia Results to See Supply Chain Stories?
  • ASEAN EV Ecosystem Update: Further Initiatives to Build a Regional EV Ecosystem
  • Monthly Container Shipping Tracker | LNY Timing, Red Sea Re-Routes Boosted Revenue | (February 2024)
  • R1 Rcm Inc (RCM) – Wednesday, Nov 22, 2023
  • ESG Brew with Lendlease REIT’s CEO: “I live more sustainably by taking public transport”
  • Asahi Kagaku Kogyo


Shortlist Of High Conviction Ideas: Income, Value, and Margin of Safety – February 2024

By Sameer Taneja


United Microelectronics Is Becoming a Great Long-Term Acquisition Target for Intel

By Vincent Fernando, CFA

  • UMC spoke at an investment bank’s recent conference, providing additional color on guidance and its collaboration with Intel for 12nm chip production.
  • UMC comments imply the key synergies between the two companies, whereby each can solve the other’s key problem,
  • While UMC most likely needs to remain a “Taiwanese company” in terms of optics given its history, Intel’s synergies with UMC establishes acquisition-value support for UMC shares in our view.

Taiwan Tech Weekly: AI Plays Weak Ahead of Nvidia Results Today; Intel & UMC; ARM & Novatek

By Vincent Fernando, CFA

  • Key Events: 1) Nvidia Results Coming Today in the U.S. 2) Elan & ChipMOS Tomorrow in Taiwan 3) U.S. PC Maker Results Next Week
  • Why United Microelectronics Is Becoming a Great Long-Term Acquisition Target for Intel 
  • Novatek a Top Gainer After Reports of Alliance with ARM to Build Neoverse V2 for AI

Singapore Airlines – Onset of Earnings Normalization to Heighten Focus on Efficiency

By Neil Glynn

  • We cut our SIA operating profit by 9% to S$2.6bn in FY24 and by 17% to S$1.5bn in FY25 versus consensus of S$2.1bn.
  • SIA’s cost control is under-examined and we publish a deep dive on a concerning level of inflation relative to key peers, which actually escalated in 3Q24.
  • Cargo broke even in peak season, and Scoot’s margins present a conundrum as it may need to be further utilization to help SIA with cost management.

From Nvidia Results to See Supply Chain Stories?

By Andrew Lu

  • Post 35% price gain in a quarter, many good news we expected and other analysts expected already factored into the share price. We believe the risk/reward not attractive here.
  • TSMC guides stronger 1Q24 and 2024, helped by Nvidia and copy cat AI GPU/ASIC orders. We see greater opportunities for alternative copy cat solutions like AMD and Alchip.
  • We attribute Nvidia customers’ sales discrepancy to AI server is cannibalizing non-AI server and Nvidia is allocating more GPUs to premium price paying customers in 1H24 and reverse in 2H24.

ASEAN EV Ecosystem Update: Further Initiatives to Build a Regional EV Ecosystem

By Shifara Samsudeen, ACMA, CGMA

  • EV supply chain is at a nascent stage in ASEAN and EV adoption in the region lags behind developed markets despite boasting a large population with a burgeoning middle class.
  • However, Governments in the region continue to introduce new initiatives and offer incentives to promote the sector, while companies continue to attract large investment to develop the EV market.
  • The four companies we looked at have reported earnings and we have discussed their latest results and our investment thesis.

Monthly Container Shipping Tracker | LNY Timing, Red Sea Re-Routes Boosted Revenue | (February 2024)

By Daniel Hellberg

  • January pricing momentum improved, helped by more operating days & re-routes
  • Throughput growth remained strong last month, including +18% into WC ports
  • Near term reality far rosier than downbeat view from industry giant Maersk

R1 Rcm Inc (RCM) – Wednesday, Nov 22, 2023

By Value Investors Club

Key points

  • Analysts believe R1 (RCM) presents a compelling investment opportunity despite recent challenges
  • Predictions suggest profitability improvements and potential doubling of stock value over the next few years
  • Long-term outlook remains strong due to industry-leading position and growth potential in healthcare IT sector

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.


ESG Brew with Lendlease REIT’s CEO: “I live more sustainably by taking public transport”

By Geoff Howie

  • kopi-C with Lendlease REIT’s CEO The first Singapore REIT to reach net zero emissions, Lendlease Global Commercial REIT has its next target in sight: absolute zero by 2040.
  • When it comes to sustainability, Lendlease Global Commercial REIT is ahead of its peers.

Asahi Kagaku Kogyo

By Altay Capital

  • Asahi Kagaku Kogyo’s Facility in Kunshan, China Asahi Kagaku Kogyo (TYO 7928) is a $12m market cap net-net industrial plastics manufacturer that over the last 10 years mostly operates around breakeven.
  • The business itself isn’t interesting, but it’s a positive that they aren’t losing money.
  • There also isn’t a single writeup on this company or any mentions of it on X/Twitter, so it’s definitely under the radar.

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Daily Brief Equity Bottom-Up: COSCO Shipping (517 HK) Is Still Cheap and more

By | Daily Briefs, Equity Bottom-Up

In today’s briefing:

  • COSCO Shipping (517 HK) Is Still Cheap
  • Cathay Pacific (293 HK): Taking off with Momentum
  • Pal Group: Another Record as Founder Retires
  • HSBC – Results on Thursday, Risk of BoCom Mark Down, Heavy UK, US Corporate Lending Not Positive
  • [Blue Lotus Technology Sector Update]: LLM Advances Give China and US Both Opportunities
  • Novatek (3034.TT): It’s Said to Alliance with ARM to Build up Neoverse V2, Targeting AI Market.
  • Indonesian Banks Screener; Mandiri Is Our Top Pick on Quality and Return Trends
  • Texas Instruments Inc (TXN) – Monday, Nov 20, 2023
  • [#19] Namaste India 🙏 | Eureka Forbes, Manyavar, L&T Finance, SG Mart, Cello
  • Etsy Inc (ETSY) – Tuesday, Nov 21, 2023


COSCO Shipping (517 HK) Is Still Cheap

By David Blennerhassett

  • In More Hong Kong Stocks Priced For Liquidation, I flagged thirteen stocks the market is all-but implying are priced for liquidation. 
  • One of the cut-off points in that analysis was a requirement for stocks to trade at least US$1mn/day. Removing that constraint uncovers shipping services play COSCO International Holdings (517 HK) (CSI).
  • CSI’s market cap accounts for ~86% of its 1H23 net cash position. Earlier this month, CSI announced another positive profit warning. Those numbers should be out late-March.

Cathay Pacific (293 HK): Taking off with Momentum

By Osbert Tang, CFA

  • There is room for FY23 result of Cathay Pacific Airways (293 HK) to beat market expectations on stronger traffic volume and better yield performance.  
  • Resumption of more capacity, from 70% of the pre-pandemic level at end-FY23, will drive FY24 earnings with ROE at 12-13%, putting it on an inexpensive 0.65x P/B. 
  • Its associate Air China Ltd (H) (753 HK) will also benefit from the release of pent-up demand in the domestic market and the recovery in international travel. 

Pal Group: Another Record as Founder Retires

By Michael Causton

  • Pal Group’s founder retired last month after 50 years at the helm. 
  • Since 2001, the fashion to variety store business has grown from ¥10 billion to a forecast ¥184 billion this year.
  • There remains growth potential in the variety store chain, 3Coins, as well as a revival in the fashion side.

HSBC – Results on Thursday, Risk of BoCom Mark Down, Heavy UK, US Corporate Lending Not Positive

By Daniel Tabbush

  • HSBC will release its results on Thursday and there remains risk of far worse credit metrics, not only related to CRE lending in HK and China
  • Construction loan risks are tangentially related to CRE and are also considered fairly high risk, where HSBC can see sizable migration to stage 3 loans
  • HSBC remains highly concentrated in UK and N America in its wholesale lending book, which we do not believe is well understood, and risky given economies

[Blue Lotus Technology Sector Update]: LLM Advances Give China and US Both Opportunities

By Ying Pan

  • On February 15, OpenAI, Google and Amazon launched respective AI advances in video LLM (SORA), long text (Gemini 1.5), and text-to-speech (BASE) abilities. The evolution speed of AI inspired awe;
  • We estimate rival equivalent of SORA, delivered over cloud, will appear in 4-6 months of time but on-device version will take years.
  • We suggest 2C AI applications, especially video, will be the prime beneficiary

Novatek (3034.TT): It’s Said to Alliance with ARM to Build up Neoverse V2, Targeting AI Market.

By Patrick Liao

  • Novatek’s share price has surged by more than 15% in four days due to the news of Novatek’s alliance with ARM to develop Neoverse V2.
  • While the decision on whether the iPhone 16 will feature OLED technology is still pending, the general sentiment is optimistic.
  • Novatek is set to leverage Intel Corp (INTC US)’s 12nm capacity through United Microelectron Sp Adr (UMC US) in the near future.

Indonesian Banks Screener; Mandiri Is Our Top Pick on Quality and Return Trends

By Victor Galliano

  • Bank Mandiri is our top pick for its quality attributes, its premium and growing pre- and post-provision returns; Mandiri provides a better valuations to returns mix than Bank Central Asia
  • Bank Negara is the value pick with its low PE multiples, its attractive PEG ratio, whilst also improving pre- and post-provision returns with cost of risk well controlled
  • Bank Rakyat registered worsening pre- and post-provision returns in 4Q23, with cost of risk worsening; this reflects its heavily MSME focused loan mix which keeps structural cost of risk high

Texas Instruments Inc (TXN) – Monday, Nov 20, 2023

By Value Investors Club

Key points

  • TI has continued to innovate in analog chip design over time
  • Their chips are used in a variety of industries including automotive, industrial, and consumer electronics
  • TI’s analog chips are found in a wide range of products from smartphones to medical devices

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.


[#19] Namaste India 🙏 | Eureka Forbes, Manyavar, L&T Finance, SG Mart, Cello

By Pranav Bhavsar

  • The market seems to be dancing to its own tune and is likely to continue.
  • EUREKAFO’s distributors are dissatisfied, MANYAVAR’s reported numbers failed to match up to the on-ground optimism. 
  • LTFH’s “strong” retail playbook keeps performing, and SGMART’s website raises concerns about its operations. 

Etsy Inc (ETSY) – Tuesday, Nov 21, 2023

By Value Investors Club

Key points

  • ETSY’s end markets are expected to grow at a high single digit rate, allowing for 10% compound annual growth rate in Gross Merchandise Sales (GMS)
  • ETSY’s international market, comprising 45% of revenue, is growing faster than its US market
  • ETSY has room to increase its take rate slightly, with its current rate of 19.8% in line with industry standards, positioning the company for continued growth in e-commerce.

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.


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Daily Brief Equity Bottom-Up: Nintendo (7974) | Delayed…Or Just Fashionably Late and more

By | Daily Briefs, Equity Bottom-Up

In today’s briefing:

  • Nintendo (7974) | Delayed…Or Just Fashionably Late
  • Tencent (0700.HK): Revisiting Wechat Channels
  • AMAT. Post Earnings Surge For No Good Reason
  • REIT Watch – 10 S-Reits that top retail net inflows in the year to date
  • Singapore-listed Manufacturers Book Mixed Returns in Early 2024
  • WeBull In Discussions With Financial Authorities to Enter the Korean Retail Stock Brokerage Market
  • MicroStrategy: Is Its Bitcoin Strategy Changing The Game? – Major Drivers
  • Ralph Lauren Corporation: Direct-to-Consumer (DTC) Business & Store Growth & Other Major Drivers
  • Dynatrace Inc: Demand For Observability & Application Security Can Push Their Revenues In 2024? – Major Drivers
  • CyberArk Software: Is Their New Secure Cloud Access Product A Game Changer? – Major Drivers


Nintendo (7974) | Delayed…Or Just Fashionably Late

By Mark Chadwick

  • Nintendo’s share price fell ~6% on rumours of Switch 2 delay, wiping around $4 billion of the market cap
  • We do not believe that a one quarter delay will have any impact on the console’s long-term sell-through or the stock’s valuation
  • With Sony’s PS5 faltering, Nintendo is launching at an opportune time. We turn bullish on the stock with ~25% upside from here

Tencent (0700.HK): Revisiting Wechat Channels

By Eric Chen

  • One year ago, we published a note valuing Wechat Channels at US$29 billion by applying 25xPE to RMB8 billion net profit out of RMB37 billion revenue by 2024.
  • Fast forward to today, the platform’s priority has been further elevated by Tencent management in its attempt to pursue high quality growth.
  • We review our thesis on Wechat Channels based on recent channel checks and now believe that the platform could represent ~35% of Tencent’s total incremental profit from 2024 to 2026. 

AMAT. Post Earnings Surge For No Good Reason

By William Keating

  • Q124 revenues of $6.71 billion, at the high end of the guided range and essentially flat sequentially both QoQ and YoY
  • Q224 revenue $6.5 billion at the midpoint, a modest downward movement of 3% QoQ and in line with what we saw from peers KLAC and LRCX
  • Still a great company with excellent growth prospects, just not in 2024

REIT Watch – 10 S-Reits that top retail net inflows in the year to date

By Geoff Howie

  • THE iEdge S-Reit Index declined 5.6 per cent on a total return basis in the year to date, with declines also recorded in the FTSE EPRA Nareit Index series which track global Reits.
  • The 10 S-Reits which recorded largest net retail inflows in the year to date were Mapletree Logistics Trust, Keppel DC Reit, CapitaLand Ascendas Reit, Mapletree Pan Asia Commercial Trust, CapitaLand China Trust, CapitaLand Ascott Trust, CapitaLand Integrated Commercial Trust, Frasers Logistics & Commercial Trust, CDL Hospitality Trusts, and ParkwayLife Reit.
  • These 10 S-Reits contribute S$250 million in net retail inflows, or nearly 90 per cent of the combined net retail inflows in the year to date.

Singapore-listed Manufacturers Book Mixed Returns in Early 2024

By Geoff Howie

  • Over the first seven weeks of 2024, the 25 largest weights of the Manufacturing Index saw varied performances from a 31% decline for NIO to a 24% gain for Food Empire.
  • The largest Manufacturing Index weight is currently ST Engineering, which has consolidated on its 2023 gains over the past 7 weeks and scheduled to report its FY23 results on 29 Feb before the market open.
  • Venture has booked the most net institutional inflow over the past seven weeks within the Manufacturing Index with S$43 million of net inflow.

WeBull In Discussions With Financial Authorities to Enter the Korean Retail Stock Brokerage Market

By Douglas Kim

  • It has been reported in numerous local media outlets that WeBull is discussing with the local financial authorities to enter the Korean retail stock brokerage market.
  • If the Korean financial authorities provide a license to WeBull to directly provide stock brokerage services to the Korean retail market, this would be the first case ever.
  • If FSC grants a full license to WeBull to operate stock brokerage services to retail investors in Korea, this could result in the local brokerages losing market shares to WeBull

MicroStrategy: Is Its Bitcoin Strategy Changing The Game? – Major Drivers

By Baptista Research

  • MicroStrategy Inc’s fourth quarter 2023 earnings point towards a strong performance from being the world’s largest corporate holder of bitcoin, possessing 190,000 bitcoins with a market value of $8.1 billion.
  • Over 2023, the company added another 56,650 bitcoins to its portfolio costing $1.9 billion, making the company’s bitcoin strategy a long-term focus.
  • Baptista Research looks to evaluate the different factors that could influence the company’s price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology.

Ralph Lauren Corporation: Direct-to-Consumer (DTC) Business & Store Growth & Other Major Drivers

By Baptista Research

  • Ralph Lauren has yielded strong financial performance for Q3, reportedly exceeding the company’s top and bottom-line expectations, while driving significant EPS growth.
  • Such advancement comes despite a reportedly dynamic global environment, thanks to considerable focus on areas such as the brand.
  • Immersing people in Ralph Lauren’s world of elegance and sophistication, the brand is resonating globally, allowing overall pricing power in the market.

Dynatrace Inc: Demand For Observability & Application Security Can Push Their Revenues In 2024? – Major Drivers

By Baptista Research

  • According to Dynatrace’s fiscal third quarter 2024 earnings, the company delivered solid results driven by its ability to successfully navigate a continually changing market.
  • Annual recurring revenue (ARR) grew by 21% year over year, while subscription revenue increased by 23% over the same period.
  • Non-GAAP operating income steadily increased to $105 million representing 29% of revenue and robust free cash flow margin was delivered at 25% on a trailing 12-month basis.

CyberArk Software: Is Their New Secure Cloud Access Product A Game Changer? – Major Drivers

By Baptista Research

  • Underpinned by an urgent need for a more secure digital landscape, CyberArk Software has emerged with a wholesome performance in the fourth quarter of the fiscal year 2023.
  • An impressive 60% YoY growth of Subscription ARR has led CyberArk to become an exclusively recurring revenue company, with an astounding 95% of total bookings coming via subscriptions.
  • CyberArk marked the close of 2023 by bolstering its market leadership in the realm of Identity Security Platforms with a robust growth quarter.

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