Equity Bottom-Up

• The Keepers Holdings (KEEPR PM) demonstrated a 5-year CAGR of 16%/25% revenue/profit growth with an ROE averaging 20%.
• FY23 surpassed our expectations with 17%/30% revenue and net profit growth. 4Q 2023 high season revenue and profit growth was an astounding 21%/75% YoY.
• The stocks trades at 6.9x/6.2x PE FY23/FY24e with a 7.5% dividend yield (assuming ten centavos/dividend based on FY23 earnings for FY24 and a 50% payout ratio). 

• Mitra Adiperkasa (MAPI IJ) has revealed more detail on the impact of boycotts stemming from the Gaza conflict on some of its brands, most notably Starbucks but also including Zara. 
• Management remains upbeat about the outlook for the expansion of new retail outlets across its brand portfolio in Indonesia and Southeast Asia but has reduced guidance for Starbucks. 
• Mitra Adiperkasa remains the best proxy for Indonesian retail with any weakness in the share price an opportunity, with valuations remaining attractive. 

• We explore Citibank’s upcoming division of CitiBanamex and the forthcoming legacy Banamex IPO; given the market’s premium PBV ratios, this should support the Banamex IPO valuation
• Sector trends to January show continued loan growth, but headwinds are building; rising funding costs are eroding credit spreads and credit costs are worsening, even though NPL coverage is healthy
• BanBajio generates an ROE of 28%+, whilst highly capitalized and on more modest multiples than Banorte; we stay cautious on Banorte, due to the growing risks to returns and valuation

• Sinopharm Group Co Ltd H (1099 HK) reported YoY and sequential growth in revenue and net profit in 4Q23. However, outlook for the sector remains bleak in near-term.
• Last year, Sinopharm’s distribution business was impacted by anti-corruption campaign. The momentum of the campaign continues in this year also. This lowers conviction toward improving performance in 1H24 at least.
• Despite of mid-single digit revenue growth, Sinopharm’s margin remains stagnant or is declining. Sinopharm still earns more than 70% revenue from low margin earning pharmaceutical distribution business.

• Nitto Kogyo Corporation (Nitto Kogyo) is a leading manufacturer of distribution boards and panel boards for electrical and telecommunications infrastructure, as well as enclosures that house telecommunications and precision equipment.
• The company has 45 sales offices and nine factories in Japan, including the new Seto Plant, which will begin operating in spring, 2024, and is working to expand its business in ASEAN countries, with overseas production and sales bases in China, Thailand, and Singapore.
• In the renewable energy field, the company is focusing on EMS-related businesses such as solar power generation systems, EV recharging stations, and self-contained industrial solar power storage battery systems.

• The Supply/ Demand imbalance in tankers will persist for longer, supporting earnings
• A beneficiary of increased global tensions and higher oil and gas prices
• Proposed Stock option scheme incentives management in the right way

FY24 trading underpins Norcros’s compelling investment case, where its new product development initiatives, market positioning and self-help initiatives allow it to take market share in both the UK and South Africa. We believe that Norcros’s key strengths are underappreciated and that legacy issues have been resolved. Its rating is low at 5.6x FY24e P/E, which is attractive, especially when compared to its yield of 5.7% on its well-covered dividend. We retain our estimates and value the shares at 246p, implying c 40% upside.

EML Payments has entered into an agreement to settle all the outstanding deferred consideration payments relating to the acquisition of Prepaid Financial Services Group (PFS) for £15.0m/A$28.8m, which represents a £7.9m/A$15.2m discount to the originally agreed amount. This agreement concludes all outstanding actual and potential liabilities relating to the PFS acquisition in 2020. Combined with the agreed sale of Sentenial for A$54m, this substantially strengthens EML’s balance sheet and simplifies the group’s structure.

• ETU’s land package remains one of the largest (681km2) and most prospective in Ontario, sitting in a top mining jurisdiction in the world spanning 80km along the Porcupine-Destor Fault hosting >100Moz Au.
• The Company has laid out its 2024 exploration plans, highlighting a new focus to high-grade gold showings along the eastern extent of the Hawkins zone – a high probability target for resource growth.
• ETU remains to be one of the cheapest stocks and hosts one of the largest land packages amongst junior explorers.

Lowland Investment Company’s (LWI’s) unconstrained, multi-cap investment policy differentiates it from most peers in the AIC UK Equity Income sector. It offers investors broad market exposure, outside of the large, traditional ‘income stocks’ at a 13% discount to NAV. The underperformance of small- and mid-cap companies versus larger peers has slowed and a turnaround would be very positive for LWI. Portfolio returns are already benefiting from acquisition activity, spurred by low valuations, and LWI has been outperforming its benchmark for the past 18 months. Meanwhile, quarterly DPS is running at 4.9% above the previous year, an annualised rate of 6.4p, reflecting a prospective yield of 5.3%.

• We expect Alibaba to report CY1Q24 top-line, non-GAAP EBITA and non-GAAP net income in-line, (14.2%) and (7.4%) vs. consensus. We cut non-GAAP EBITA by 10% and kept topline unchanged;
• BABA is prioritizing growth of both AliCloud and cross-border ecommerce (AliExpress), which will weaken profitability in the near-term but is the right thing to do. 
• BABA is transforming itself into Chinese Microsoft with hopes of e-commerce mainly pinned on overseas. We maintain BUY and US$ 85 TP, implying 9.5x CY24 P/E.

• Fast Retail missed analyst estimates for Q2 sales and operating profit. Revenue growth slowed to 5% YoY
• Full year operating profit guidance maintained at Y450 billion, just slightly below the street 
• The stock is trading at 27x EV/EBIT, in-line with historical averages, but still expensive in absolute terms and versus global peers

• Despite YTD strengths in share price, Cosco Shipping Energy Transportation Co. Ltd. (H) (1138 HK) is still cheap at 5.7x PER and 0.9x P/B.
• VLCC is forecast to stay undersupplied in FY24 and FY25, supporting the rates and CSET’s profitability. YTD, the VLCC rates have recovered by 19.5%.
• LNG transportation generated 19% of FY23 earnings. With 40 more vessels on order, compared with a current fleet of 43, there is immense upside from this segment.

• Builders FirstSource focuses on value-added and specialty products
• Maintains industry-leading gross margins of 35%
• Expands reach and solidifies position through strategic acquisitions and strong customer base

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.

There has been a lot going on under M&C Saatchi’s operational bonnet, so delivering FY23 results a shade above market forecasts is a good result, especially given the difficult market backdrop. Earlier issues regarding outstanding put option liabilities are in retreat, with minority interests in FY23 down to 13% from 25% in FY22, and most remaining liabilities are expected to be settled in FY24. The focus is now firmly on optimising the operational structure. There has already been good progress, simplifying and achieving greater coherence on a regional-first approach, with better alignment to how clients (and potential clients) want to utilise the group’s global capabilities. The incoming CEO, Zaid Al-Qassab, who starts in May, should be taking on the group’s navigation in less stormy waters.

• Sixt is focused on increasing its market share and expanding into key markets such as Germany and Europe
• The company’s strategy includes focusing on premium vehicles, strong relationships with OEMs, and utilizing franchise operations for global expansion
• The Sixt family’s involvement and significant ownership stake indicate a commitment to the company’s success and continuity in leadership

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.

• ADF Group reported Q4 & FY24 financial results this morning that beat our expectations across the board.
• For Q4, revenue came in at $88.4M (+72% YoY) vs. our estimate of $77.1M and EBITDA came in at $15.5M (+164% YoY) vs. our estimate of $13.6M.
• FY24 marked another stellar year for ADF as it benefits from infrastructure spending across North America and the automation capex program at its Terrebonne facility.

• Chesnara has announced its 2023 results.
• Positive returns from equity markets and gains from acquisitions in the first half were somewhat offset by adverse changes to operating assumptions in the second.
• Economic Value profit of £59.1m marked a good turnaround from a loss of £85.1m in 2022.

• WIA Gold is an ASX-listed gold exploration junior with a JORC compliant Resource of 1.3m ozs at its Kokoseb project in Namibia
• WIA controls tenements adjacent to Osino Resources’ Eureka project and is in close proximity to Osino’s merger with Dundee Precious Metals (DPM)
• The company recently raised A$11m to accelerate exploration at its projects in Namibia and Cote d’Ivoire, with plans for production at Kokoseb in less than 4 years, potentially resulting in a quick return on investment for WIA shareholders through collaboration with DPM.

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.

• Market gaining confidence in DSGR’s management and growth strategy for potential multiple expansion
• Strong acquisition pipeline and track record of successful integrations positioning DSGR for long-term success
• DSGR offers an attractive investment opportunity with potential for significant upside due to recent developments and discounted valuation

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.

For our next Corporate Webinar we are glad to welcome Elite Commercial REIT’s CEO, Mr Joshua Liaw.

In the upcoming webinar, Joshua will share a short company presentation after which, he will engage in a fireside chat with Smartkarma Insight Provider, Sumeet Singh. 

Sumeet will also be providing an industry overview, featuring landscape commentary and returns analysis. The Corporate Webinar will include a live Q&A session.

In the spirit of giving back to our community, one of the attendees will also be awarded an Amazon Kindle as part of our exclusive lucky draw. 

The Corporate Webinar will be hosted on Monday, 15 April 2024, 19:00 SGT.

About Elite Commercial REIT

Elite Commercial REIT (“Elite REIT”) is a Singapore real estate investment trust established with the investment strategy of principally investing, directly or indirectly, in commercial real-estate related assets in the United Kingdom (“UK”). Elite REIT is the only UK REIT listed in Pound sterling on the Singapore Exchange.

Elite REIT’s portfolio (“Portfolio”) comprises predominantly freehold properties strategically located mainly in town centres, and near amenities and transportation nodes. The Portfolio offers a stable government-backed income stream with over 99% of the gross rental income derived from the UK Government, backed by AA-rated sovereign credit strength. The leases are on triple net basis and Elite REIT is one of the largest providers of critical social infrastructure to the Department for Work and Pensions (“DWP”) and other UK Government departments. The DWP is the UK’s largest public service department that is responsible for welfare, pensions and child maintenance policy, serving over 20 million claimants and customers. The Portfolio is part of the crucial social infrastructure through which the DWP provides services to local communities.

• TSMC snags $6.6 billion in US CHIPS Act funding, along with loans up to $5 billion and tax credits up to 25% on eligible capital expenditures
• TSMC has committed to building a third fab in Arizona, scheduled to begin operations around 2030
• TSMC’s reiteration of their world class CAGR, Gross Margin & ROE numbers shines a light on Intel’s vastly inferior performance outlook.

• Amvis Holdings Inc (7071 JP) opened 57 facilities during FY20–23, which raised total borrowings 37% YoY to ¥17B in FY23 and further to ¥19B at the end of Q1FY24.
• The impact of the monetary policy is expected to be immaterial based on the current interest incidence of just 0.44%. Interest expenses account for less than 1% of revenue.
• Amvis started FY24 on a solid note, with all key parameters reporting more than 30% YoY growth in Q1FY24. The company has reiterated full-year FY24 guidance.

• The first quarter is seasonally the softest for selling wireless routers. The expectations for NTGR are for the firm to generate positive free cash flow while revenue declines sequentially. 
• We are anticipating NTGR’s cash per share to reach approximately $12 for the March quarter and maintain a forecast of $14 per share by the end of 2024
• The price competition at the lower end remains unchanged and dependent on NTGR clearing out inventory ahead of the peak selling period in the second half of the year

• Shineway’s performance in 23H2 was disappointing, mainly due to the VBP of formula granules and anti-corruption campaign. Accordingly, TCM injection and TCM formula granule businesses had negative growth in 23Q4.
• As the NHSA has further lifted the reimbursement restrictions on Chinese medicine injections, Shineway’s injection business is expected to help “hedge against” the headwinds in TCM formula granule business.
• 24H1 growth is under pressure due to 23H1 high base. Growth in 24H2 would pick up.As long as TCM favorable policies remain, profit is expected to increase by 20%-30% annually.

• 1Q24 production was 21.9 mbbl/d in line with our expectations.
• Production at the end of March was ~23 mbbl/d.
• Net cash of US$193.6 mm (US$176.3 mm unrestricted) was high given that the company sold only 1.8 mmbbl in 1Q24 with inventory building-up ~0.21 mmbbl vs YE23 to 0.9 mmbbl.

• The farm-out transaction with Energean has now completed.
• Chariot has received the US$10 mm cash upfront payment and retains 30% of in the Lixus licence (where the Anchois project is located) and 37.5% of the Rissana licence, offshore Morocco.
• A rig contract has also been signed with Stena Drilling to drill the high impact Anchois-East appraisal and development well in 3Q24.

• TRX is focused on the development and commercialisation of two proprietary processing technologies for the repair of soft tissue (dCELL®) and bone (BioRinse®).
• It has a broad portfolio of products used in biosurgery, orthopaedics and dental markets.
• Investment in tissue processing, manufacturing capacity and strong commercial partners, together with its “4S” strategy, has generated six consecutive reporting periods of strong growth, with TRX turning EBITDA-positive in 2023.

• BQE will be reporting Q4 & 2023 financial results in ~2 weeks, we are expecting proportional revenue of $4.2M, gross margin of 45%, and adj. EBITDA of $0.6M (14% margin).
• Metals prices have been rising steadily over the last month with copper up 9%.
• BQE’s China JV has leverage to the copper price as it sells recovered metals.

Utilico Emerging Markets Trust’s (UEM’s) manager Charles Jillings, at specialist investor ICM, is very excited about the prospects for the trust’s investee companies. He believes that investors underappreciate the quality of these businesses and the teams that manage them. Jillings travels extensively, along with deputy portfolio managers Jacqueline Broers and Jonathan Groocock, meeting with current portfolio and other firms and relevant organisations in emerging markets. They report first hand that companies in the fund are performing very well, with robust top-line growth and cost reductions leading to higher margins. Because of the nature of UEM’s holdings in infrastructure and utility assets, the fund has a consistently low beta. Successful stock selection has led to the trust’s NAV outperformance versus the MSCI Emerging Markets Index over the last one, three, five and 10 years – most notably over the last three years. Since inception in 2005, UEM’s NAV total return compounded at 9.5% per year.

• TSMC (2330.TT; TSM.US): US$6.6bn from US CHIPS Act; the Earthquake Impact and the 2nd Japanese Fab. 
• Memory Monitor: Nanya’s Results to Provide Latest Color on DRAM Post Earthquake; Short Int Rising 
• UMC (2303.TT; UMC.US): Some Rush Orders Coming in and 2Q24F Could Post Positive QoQ. 

• Market momentum continues to be strong. As we head into earnings season, the momentum is likely to continue.
• Strong operational updates Info Edge India (INFOE IN); Aavas Financiers Ltd (AAVAS IN) & Sula Vineyards (SULA IN).  
• The overall market sentiment, represented by the average revisions across all sectors, is nearly flat, with a slight positive revision for FY1E at 0.02% and essentially stable for FY2E.

• Air China Ltd (H) (753 HK) had 15.4% interest-bearing debt denominated in USD, vs. 21.3% for China Southern Airlines (1055 HK), making it less exposed to Rmb depreciation. 
• Recovery of international traffic and routes will help to lower unit costs. Air China’s unit costs for FY23 were Rmb4.0445, whereas CSA’s were only Rmb3.2000.
• There is more upside for Air China’s load factor which was down 7.8pp YoY in FY23, compared with -4.7pp for CSA. 

• Unilever announced plans to separate its ice cream business into a separate publicly listed company (SpinCo), potentially via a spin-off transaction.
• Post separation, Unilever will focus on four core businesses: beauty and wellbeing, personal care, home care, and nutrition. The separation is expected to be completed by the end of 2025.
• The separation will allow Unilever to allocate capital and resources more efficiently towards higher growth categories with significant potential to scale.

• TAL Education Group (TAL) reported net revenues of USD 373.5 million for its third quarter fiscal year 2024, exhibiting an increase of 60.5% and 63.7% in U.S. dollar and RMB terms.
• Despite the impressive revenue growth, profitability remained a concern with non-GAAP loss from operations and non-GAAP net loss attributable to TAL amounting to USD 10.2 million and USD 1.9 million, respectively.
• 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.

• On the surface, FY23/12 consolidated OP -68% YoY, profit ATOP -53%, and FY24/12 initial guidance for a profit ATOP net loss may appear to indicate a challenging earnings environment.
• However, closer examination reveals steady earnings improvement, and the new MTP through FY26/12 targets recouping major overseas growth investments.
• The table below shows sequential improvement in the amount change YoY for Group EBITDA, OP and profit ATOP every quarter, with profits at all 9 levels posting YoY gains in the 4Q.

• Given that it has already been 6 months since I first bought Card Factory and the stock is currently trading only slightly above my average purchase price, I decided to send you guys a short and sweet thesis on why I believe $CARD.L is an attractive opportunity.
• Card Factory is a greeting card and other “celebration essentials” retailer operating primarily in the UK.
• What is unique about the Northern Europeans, particularly the British, is their habit of buying greeting cards. It is ingrained in their culture

• Alpha Metallurgical Resources, a supplier of metallurgical products for the steel industry, closed its fourth quarter with adjusted EBITDA of $266 million and achieved over $1 billion in adjusted EBITDA for the year.
• This is the second consecutive year in which the company attained such a milestone despite facing considerable challenges during the year.
• Alpha highlighted the robustness of its management approach which included proactive identification of issues and proactive response plans that ensured minimal impact on performance.

• Masimo Corporation had a mixed Q4 and fiscal year 2023 earnings call, reporting both positive results and some challenges.
• The company generated over $2 billion in consolidated revenues, with healthcare revenues reaching $1.28 billion.
• In addition, Masimo saw strong growth in its hearables business and reported a record number of contract wins.

• Aster DM Healthcare Ltd (ASTERDM IN) completes a significant restructuring, separating its India and GCC operations, with a consortium led by Fajr Capital acquiring a 65% stake in Aster GCC. 
• The substantial cash consideration received provides financial flexibility for further investments, debt reduction, or strategic opportunities.
• Explore the implications of Aster’s restructuring on shareholder value, with a special dividend of INR 110 to INR 120 per share planned.

• Today, the U.S. Department of Commerce and TSMC Arizona have signed a non-binding preliminary memorandum of terms for US$6.6 billion in direct funding under the CHIPS and Science Act.
• We estimate the impact of the earthquake on April 3rd should result in a loss of within 0.5% in 2Q24F, which means it should not affect our 2Q24F revenue expectations.
• TSMC’s 1st Japan Fab is expected to commence pilot production in February, and the 2nd Fab is projected to begin production of N6/N7 in 2027F.

• Gland Pharma Ltd (GLAND IN) reported mid-single-digit revenue and EPS growth in its base business (ex-Cenexi) during 9M FY24. The company is confident to end FY24 on a high note.
• Gland Pharma starts FY25 on a strong note with gaining U.S. approval for eribulin mesylate injection, used for breast cancer that has spread to other parts of the body.
• Over the next 12–15 months, Gland Pharma is poised for enhanced geographical foot-print in Europe through Cenexi. The addressable CDMO business opportunity is estimated at €4B.

• Maxlinear has probably been among this semiconductor cycle’s worst companies, if not the worst.
• I think that it might be time to give them a fresh look.
• Maxlinear was founded in 2003 in Carlsbad, California, by eight engineers. Today, Kishore Seendripu (CEO/Chairmen) and Curtis Ling (CTO) are still founders and work at the company. Maxlinear is a fabless company focused on mixed-signal products in the semiconductor industry.

• DRAM producer Nanya Tech will report its 1Q24E results on April 10th.
• While Micron has said it is evaluating the impact of the Taiwan earthquake on its operations and has halted price discussions with clients, Nanya could provide latest DRAM outlook color.
• Short interest has spiked ahead of Nanya’s results; We note that the company has a large revenue and margin rebound it needs to deliver on to meet 2024E consensus.

• Our NAV valuation suggests implied market cap of 1 trillion won or NAV per share of 15,983 won which is 11% higher than current price.
• Orion Holdings has attractive dividend yields and payouts. The company’s dividend yield increased from 4.1% in 2021 to 4.6% in 2022 and 5.1% in 2023. 
• The recent phenomenal performance of the movie Exhuma has resulted in a long-awaited revived positive sentiment on Showbox (which is 57.5% owned by Orion Holdings). 

• Ace Hardware Indonesia (ACES IJ) results revealed a positive finish to 2023 and an optimistic outlook for 2024, with new store rollout and shorter promotion periods set to boost sales.
• ACES continues to roll out its new format stores and renovate existing stores with a positive result, with 20 stores expected to be renovated in 2024 and 15-20 new stores,
• The company has seen strong momentum in 2M2024 with +10% SSSG and remains confident about the outlook, with positive guidance for growth. Valuations remain attractive versus history. 

• Flowers Foods continued to show resilience in a challenging consumer environment in the fourth quarter and full year of 2023.
• The company’s brands gained unit and dollar share for the first time since Q1 2022.
• Dave’s Killer Bread was particularly noteworthy, reaching $1 billion in retail sales and growing unit volume by 10%.

• Freshpet Inc. delivered robust performance for the fiscal year 2023 and the fourth quarter, notching a significant growth in net sales and improving profitability.
• The management believes the pet food company reached an inflection point in its journey towards becoming a profitable business in the fresh/frozen segment of the pet food market.
• 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.

• Interview discusses the offtake agreement and opportunity to expand beyond the current arrangement, the $20m capital raised and outlook for future funding needs, update on strategic equity/debt in the US and milestones to expect over the next six months.

• The biggest changes in 2023 medical insurance catalog are the lifting of payment restrictions on TCM injections, which would drive rapid sales growth in the hospital market this year.
• GLP-1s are not flawless, and patients will lose not only fat but also muscle during weight-loss process. Then, another noteworthy opportunity has emerged – reduce fat and increase muscle.
• In 2024, Sino Biopharm is expected to achieve single-digit revenue growth. Deficiencies in corporate governance are one reason why the market is reluctant to offer Sino Biopharm high valuation.

• We compile our selection of small and mid-cap names with our desired characteristics of high dividend yields, value, and margin of safety.
• Our top picks are Perfect Medical Health (1830 HK), Water Oasis (1161 HK), Taste Gourmet (8371 HK), Uchi Technologies (UCHI MK), and Ginebra San Miguel (GSMI PM).
• We recently added Dream International (1126 HK). Read: Dream International (1126 HK): Dream Valuation of 3.7x PE and 12% Div Yield, >40% of Mkt Cap In Cash 

• TSMC: +16.2%, Bounced Back to Historically Extreme Level, Consider Short
• UMC: -0.3% Discount, Flipped to Positive and Now Negative Again
• ASE: +15.3% Premium; Bounced Back to Extreme Highs, Short the Spread

• AAOI recommends investing in Nintendo ahead of the launch of the Switch 2 console cycle in mid to late 2024
• Analyst sees potential for multiple expansion, margin improvement, and continued monetization of intellectual property through theme parks and movies
• Bullish on Nintendo’s stock in absolute terms and relative to other companies in the video game and media sectors, predicting significant gains based on past launch cycles.

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.

• United Microelectronics Corp (2303 TT)‘s 2Q24F outlook is experiencing a slight upward now, possibly indicating a positive QoQ.  
• UMC’s notable contributors are showing a mixed outlook, and Novatek Microelectronics Corp (3034 TT) could be the most influencer.
• Attention should be paid to the 3Q24F outlook for any potential changes and a shift from a bearish view could positively impact the outlook, potentially signaling the end of downturn.  

• Fu Shou Yuan’s 2023 performance was indeed not good, with negative growth in 23H2.Shanghai alone has limited market capacity.No matter how strong it is, it cannot drive the national market.
• Fu Shou Yuan has encountered difficulties in external expansion and M&A, so it chooses to increase dividends. However, this means the Company may have to say goodbye to high growth.
• The founder’s “past bad record” and uncertain business outlook hinder the upward potential of valuation, which requires a high margin of safety.It’s better bought at low price to collect dividends.

• China Power International (2380 HK)‘s earnings should accelerate in FY24, and rebound in hydropower is a key driver. Hydropower generation surged 84.3% YoY in 2M24.
• The 9.3GW of capacity acquired in Oct will provide first full-year contribution in FY24. Better economics for coal-fired plants will add to profit momentum.
• The 6pp increase in dividend payout signals management’s positive view in the outlook, and the Chairman is explicitly confident in good FY24 profit growth. 

• In March 2024, BYD’s Sales volume increased by 46% YoY and Li Auto’s sales volume increased by 39% YoY.
• AliPay announced that foreigners’ consumption amount in China in March was ten times of last year.
• Facing stagnancy and competition, Alibaba’s Taobao removed service charges from its retailers.

• Sealed Air (SEE) is a disaster in motion: its entire business is facing extinction as customers move away from the thin-film plastics the company makes.
• Sealed Air’s e-Commerce business has collapsed as Amazon has moved away from the single-use plastics, formerly ever present in its packaging. 
• California just passed two recycling and labeling bills that we think will make Sealed Air’s products unlikely to be used in the State and possibly in the US as a whole.

• This last week was packed with deals, amendments, and merger breakups.
• A SPAC is set to merge with an electric utility firm, and a blank-cheque firm is taking a critical metals supply chain-focused firm.
• Also, Sam Altman’s SPAC surges as it nears a deal, and a SPAC terminates a merger with a hydrogen energy firm. Read on to find out the latest about all things SPACs. 

• The outlook for factory automation is improving with inventory clearance, the upturn in the semiconductor industry and an AI-enhanced response to the labor shortage.
• Yaskawa’s margins should continue to rise with renewed growth in Robotics, efficiency gains and an upgraded product line. 
• Valuation stretched at 30x EPS guidance for FY Feb-25, but current weakness looks like a long term buying opportunity.

• Acadia Healthcare delivered a robust financial performance for 2023, marked by a 12.2% annual revenue growth, 13.1% adjusted EBITDA growth, and 14.3% adjusted EPS growth compared to 2022.
• In the fourth quarter, its same-facility revenue rose by 10.3% on the back of rate improvements and patient day growth.
• Acadia also saw consistent improvement in its labor trends throughout 2023.

• The Boston Beer Company’s Fourth Quarter 2023 Earnings revealed an operational performance meeting the midpoint of their forecast, with depletions down by 6% for the year and gross margins achieving an improvement of 120 basis points.
• However, net loss for the quarter indicated challenges, standing at $18.1 million, or $1.49 per diluted share.
• 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.

• Tenet Healthcare’s Q4 2023 earnings indicated a strong performance, with net operating revenues of $20.5 billion, and consolidated adjusted EBITDA of $3.54 billion, which translates into an attractive 17.2% adjusted EBITDA margin.
• The company has demonstrated its ability to maintain profitability while focusing on quality and innovation.
• Yet, some challenges were also mentioned during the earnings call.

• Examining the fourth quarter 2023 earnings for Dentsply Sirona reveals an investment thesis that emphasizes the company’s successful strategies, robust performance and rigorous financial discipline, alongside ambitious future business growth targets and consistent value creation for its stakeholders.
• Starting with the positives, Dentsply Sirona achieved over 2% organic sales growth for 2023, outperforming projections via growth in three of its four business segments.
• Notably, its orthodontic business experienced double-digit growth with both Byte and SureSmile.

• Chemed Corporation reported their fourth quarter 2023 earnings with continued improvement in their VITAS operational metrics, including a 7% increase in admissions over the prior year period and an average daily census of 1,918.
• This is an 11% increase in comparison to the prior year and suggests that a hiring and retention program initiated in 2022 to remedy any potential worker turnover and expand clinical workforce capacity has been successful in maintaining VITAS’ operational performance.
• 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.

• In Q4 2023, Elanco Animal Health reported a 5% constant currency revenue growth, driven by innovations, the strength of the farm animal business, improved conditions in the European Pet Health retail market, and increased pricing.
• The strong performance in 2023 indicates that the company’s innovation, portfolio, and productivity strategy are working, leading to confidence in the potential success of future investments.
• Going into 2024, the company aims to focus on three priorities: sustained revenue growth, innovation, and improved cash conversion.

• Fresenius Medical Care’s Q4 2023 earnings highlighted the progress made against their strategic plan that was set out a year prior.
• The plan focused on significant structural, operational and cultural changes, with the operating model being transformed at the start of 2023.
• This allowed the company to introduce a new financial report with increased transparency, which reflected a commitment to their operational turnaround initiatives that aided organic growth in both segments and improved operational performance.

• Globus Medical, a leading musculoskeletal solutions provider, has reported record revenues of $1.569 billion for the full year 2023, marking a growth of 53% compared to the previous year.
• The strong performance includes four months of sales after its merger with NuVasive.
• This remarkable growth maintained the company’s industry-leading profitability, generating a record non-GAAP EPS of $2.32 and an adjusted EBITDA of 30%.

• Globus Medical, a leading musculoskeletal solutions provider, has reported record revenues of $1.569 billion for the full year 2023, marking a growth of 53% compared to the previous year.
• The strong performance includes four months of sales after its merger with NuVasive.
• This remarkable growth maintained the company’s industry-leading profitability, generating a record non-GAAP EPS of $2.32 and an adjusted EBITDA of 30%.

• L’Occitane (973 HK) announced two solid moves this week:  1) Disposing the 70% stake in Grown Alchemist;
• And 2) granting additional call options to Sol de Janeiro CEO Heela Yang of up to 7%.
• The stock is trading at 19x FY25 PE (fiscal year ending March), up from just 14x six months ago.

• Intel launched a new segment reporting structure under which its newly created Foundry P&L allegedly racked up operating losses of ~$17 billion over the past three years
• The Foundry P&L is not expected to reach breakeven until the ’27/’28 timeframe
• Intel’s share price is down >10% in the two days since the new financial model was launched. 

• AKR Corporindo (AKRA IJ) booked an impressive finish to the year despite slower revenue growth from its trading & distribution business boosted by strong industrial plot sales at JIIPE.
• The company expects trading & industrial volumes to improve in 2024, with retail petroleum becoming more significant with JIIPE expected to see increasing recurrent utilities earnings starting in 2H2024. 
• AKR Corporindo has a strong pipeline of potential tenants for JIIPE and expects to expand its BP JV retail petrol stations by 40-50 this year. Valuations remain attractive.

• Kura Sushi US Weighting as of writing: 4% 5th April 2024 – Q2 FY24 Results On April 4th, Kura Sushi US reported earnings for the second quarter of FY24.
• Nothing major to report and similar themes to previous quarters so will keep this one short. The market valuation is astronomically stupid.
• Average unit volumes at Kura are $4.28 million and have improved significantly; up 22% since 2019.

• Cochlear Ltd (COH AU) shares rallied 30%+ over the last six months. Shares are trading at NTM P/E of 51.3x, versus other Australia-listed medical devices companies’ P/E of 23–32x.
• The underlying business strength depicted by strong financial performance and guidance raise, and superior product offerings justify the pricey valuation.
• Cochlear lifted FY24 net profit guidance to A$385–400M (+26–31% YoY) from A$355–375M. The company expects FY24 cochlear implant volume growth of 10–15% YoY.

• Gibraltar Industries’ Q4 2023 financial results presented a robust year-end performance.
• The company’s leadership positions were expanded, the quality of earnings improved, and strong cash flows were generated.
• Both Residential and Infrastructure perform strongly, and although the Renewable segment faced industry headwinds, it demonstrated excellent margin expansion.

• Jinxin Fertility Group Ltd., China’s largest private provider of in vitro fertility (IVF) services, is buying a stake in an Indonesian peer, venturing into Southeast Asia as demand in China declines with more couples opting not to have babies.
• Hong Kong-listed Jinxin Fertility has signed an equity investment deal to become a “significant shareholder” of PT Morula Indonesia, an IVF specialist affiliated with PT Bundamedik Tbk, a major women- and children-focused health care services group in Indonesia, according to a joint statement Monday.
• It did not specify how much capital Jinxin will invest.

• One of a basket of Hong Kong commodity stocks we like
• One off issues in 2023 which should reverse in 2024
• Can also be viewed as  a tangential play on India’s industrial growth

• Fragmented industry with growth opportunities
• Successful acquisitions and expansion
• Focus on customer service and reputation for excellence

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.

• BellRing Brands Inc. has reported the results from their first quarter ending fiscal year 2024.
• These results have come out better than the management’s expectations, with net sales increasing by 19% in comparison to the previous year.
• The company’s adjusted EBITDA also showed considerable growth, rising by 18%.

• Nidec faces challenges amid global EV sales decline, with shares and valuations reflecting market pessimism.
• Anticipated catalysts include forthcoming guidance, potential MTP reassessment, and a strategic acquisition opportunity.
• At 18x EBIT, Nidec looks a compelling play on secular themes of electrification, automation, and energy efficiency.

• ZhongAn Online P&C Insurance C (6060 HK) is benefiting from the cross-selling opportunities  generated through the eco-systems of Alibaba Group Holding (9988 HK) and Tencent (700 HK), its parent companies
• Largest solely online insurance company in China with Rmb 30B gross premiums written in 2023.
• Expertise and cross-selling from Ping An Insurance (H) (2318 HK) , another parent company with a jointly run auto insurance business.

• Nvidia CEO Jensen Huang has repeatedly emphasized that the data center is the new unit of compute.
• While this concept seemed straightforward at first, the deeper implications became clearer after Nvidia’s presentations at GTC and OFC 2024.
• I only recently grasped exactly what is happening, and a simple reframing of the underlying principles that drove Moore’s Law makes the entire picture clearer.

• On 4 April, Douzone Bizon (012510 KS) announced that it plans to become the fourth Internet bank in Korea. Following this news, Douzone Bizon’s share price increased by 21%. 
• If the company succeeds in receiving the license to operate an Internet bank, this could meaningfully impact the company’s long-term sales and profits. 
• If Douzone Bizone expands into the Internet banking services, it may need additional backing from strategic/financial partners including Bain Capital which has a 10.2% stake in Douzone Bizon. 

• In the third quarter of 2023, PGT Innovations displayed a strong financial performance despite operating in an unpredictable market environment.
• The company’s balanced exposure to new construction and repair and remodeling channels has enabled them to deliver consistent record sales and impressive profits over the year.
• By combining a continued focus on operational efficiency and productivity, PGT Innovations managed to achieve a total revenue of $400 million and an adjusted EBITDA of $78 million in the third quarter.

• After a solid FY23, Anta Sports Products (2020 HK)‘s outlook for FY24 looks equally encouraging. Its various brands are expected to grow by 10-30% YoY still.  
• Listing of Amer Sports (AS US) will provide Rmb1.6bn non-recurring gain in 1H24. For the full year, there will be a positive swing in its profit contribution. 
• Anta Sports can be considered as a sportswear brand incubator, and its premium PERs of 18.3x and 15.9x for FY24 and FY25 reflect the ability to brew new brands. 

• Papa John’s International, Inc. reported another year of record global system-wide sales for the fourth consecutive year of positive North America comps in 2023.
• The company’s success is attributed to the dedication and focus of its team, franchisees, and the restructuring efforts, especially the foundation improvements to restaurant operations, menu amelioration with novel products, the digital advancements of their operations platforms, and the expansion of the restaurant footprint.
• 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.

• IAS 2023 fourth quarter and full year results depict a robust performance that exceeded expectations, noting an increase of 14% in quarter four revenue to reach $134.3 million and a year growth of 16% to reach $474.4 million.
• This growth marks a path for IAS’s strong commitment toward advancing the industry with its AI-driven measurement systems and optimization solutions.
• 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.

• Sai Gon Cargo Service (SCS VN) announced an increase in its pricing (details in note) effective April 1st, with a 10% increase across most categories. 
• March cargo numbers showed a substantial 47% YoY increase, as cooperation with Qatar Airways got underway in February. Q1 FY24 numbers were up 34% YoY.
• The stock trades at 12.5x FY24e numbers with an 8% yield, assuming a 20%YoY revenue and profit growth (and a 100% payout), with an upside to these conservative numbers.

• We believe consensus has not fully captured the company’s margin upside for FY24/25, likely due to management’s excessively conservative guidances.
• Our confidence is underpinned by positive SSSG trend, accelerating store expansion and clear trajectory for store margin improvement.
• We expect the company to generate RMB150/320 million adjusted net profit for FY24/25 respectively, compared to RMB30/150 million baked in consensus. Reiterate buy with HK$80 target price (30x FY25 earnings).  

• Q1 Deliveries trailed plunging market consensus, my even lower number, and Tesla’s expectations as sales crashed while it overproduced to a new record cumulative excess inventory which jumped 70% y/y
• This doesn’t square with Tesla’s explanation that sales were hurt by ongoing production issues—much like when the company used the same excuse for the disappointing Q3 2023. 
• This time deliveries were much lower, the miss versus market expectations much worse, and the deep well of unsold inventories even more formidable.

• Nongfu Spring (9633 HK) announced a set of strong 2023 results last week, with 2H23 net profit up 62% yoy and sales up 33% yoy. 
• The best performing category in 2023 has been tea beverage products (30% of sales), which grew 83% yoy for the year and 105% yoy in 2H23, picking up speed.
• Nongfu Spring is trading at 33x 2024 earnings, which I believe is attractive. 

• Oriental Watch (398 HK)  has begun Q4 2024 slowly, with its SSSG dropping by double-digit levels in all its major markets (HK/China and Macau).
• As the year almost draws to a close, we expect profits to drop 10-15% YoY for FY24 and the company to pay out 100%, resulting in a 14% dividend yield.
• The company also has 1.2 bn HKD of net cash, representing 70% of its market capitalization. Additionally, it has 700 mn HKD of investment property. 

• Hansoh Pharmaceutical Group (3692 HK) reported a whopping 55% YoY net profit growth to RMB3 billion on just 13% YoY revenue growth to RMB6 billion in 2H23.
• Revenue from innovative drugs zoomed 52% YoY to RMB4 billion and its proportion to total revenue increased to 73% in 2H23 from 54% in 2H22 and 62% in 1H23.
• Although Hansoh is not expected to receive marketing approval for any in-house innovative product in 2024, existing portfolio of innovative drugs will continue to drive the growth of the company.

• Century Communities has reported its Q4 and Full-Year 2023 results, which demonstrated notable growth and profitability.
• The company’s Q4 deliveries hit a record high of 3,157 homes, reflecting a 9% year-on-year increase, and the year 2023 marked the firm’s 21st consecutive year of profitability.
• The housing market also witnessed considerable improvement, contributing to the company’s success.

• D.R. Horton is a leading homebuilder with high returns on equity and strong balance sheets, yet trades at a low price-to-earnings ratio.
• The company has shifted to being asset-light, generating significant free cash flow and maintaining a strong balance sheet.
• With a focus on market share expansion and efficiency, D.R. Horton is positioned as a growth company in a stable industry.

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.

• Life Time Group Holdings, Inc.’s Q4 2023 earnings call emphasized impressive financial performance and strategic growth plans.
• The revenue increased by 18.2% in Q4, driven by a rise of 20.9% in membership dues and enrollment fees, and an 11% increase in in-center revenue.
• Access memberships increased by 5.2%, ending the year with over 763,000 memberships, while average monthly dues stood at $183, a rise of 13.2% from the previous year.

• Pendragon sells UK car dealer and leasing businesses to Lithia Motors, leaving behind dealer management software segment Pinewood Technologies
• Dividend payout from sale proceeds leaves Pinewood with around 20 million GBP of net cash
• With Lithia Motors owning shares and potential for growth through software rollout, there is significant upside potential in Pinewood’s valuation at a low multiple of 8x TTM EBITDA

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.

• Shake Shack Inc. delivered an impressive 2023 full year, marking transformative milestones and exhibiting substantial profitable growth.
• Key metrics indicate a steady growth of 24% year-over-year in the company’s system-wide sales, reaching a record $1.7 billion.
• The company launched 85 total restaurants (an unprecedented number in a single year) and ended 2023 with 518 Shake Shacks worldwide.

• Carnival Corporation plc recently released its Q1 2024 earnings.
• The company’s CEO, Josh Weinstein, and CFO, David Bernstein, detailed its financial performance.
• Despite recent disruptions caused by an event at the Francis Scott Key Bridge, which is expected to have a less than $10 million full-year impact, the company reported a strong first quarter.