Equity Bottom-Up

• In this insight, we discuss numerous gap trade opportunities involving Korean preferred and common shares in 1Q 2025.
• Among the 27 major pair trades (prefs vs. common shares), 20 of the pref stocks outperformed their common shares counterparts in 2024.
• The 27 Korean preferred stocks’ average prices declined by 1% from end of 2023 to end of 2024 (excluding dividends), outperforming their common counterparts which were down on average 3.7%.

• In this insight, we discuss the increasing importance of Palantir Technologies (PLTR US) on influencing the political rallies in Korea. 
• In addition, we discuss how HD Hyundai’s 34% ownership of Palantir Korea is likely to improve the positive sentiment on HD Hyundai. 
• Our sum-of-the-parts valuation analysis of HD Hyundai suggests implied market cap of 11 trillion won or target price of 139,845 won per share (63% upside from current levels).

• Adient plc has recently reported its fourth quarter 2024 earnings as well as its full-year results, providing a snapshot of the company’s current position and future outlook.
• The company’s performance was solid in the face of a challenging macroeconomic environment.
• Revenues decreased by 4% year-over-year, but Adient managed to maintain adjusted EBITDA at $235 million, highlighting its ability to mitigate customer volume headwinds through strong business performance.

• MSTC Limited (MSTCLTD IN) is transitioning to an e-commerce-centric model, reducing dependence on trading sales and focusing on high-margin e-commerce services.
• MSTC sold its subsidiary Ferro Scrap Nigam Limited for an amount of Rs. 300 Crores which will be utilised in the near future.
• MSTC has a strong cash position (Rs. 1,300 Cr) that can be used for special dividends, growth-oriented investments, or share buyback programs.

• In its press release on December 26th, the Philippine Stock Exchange (PSE PM) detailed two catalysts: acquiring 61.92% of PDS and increasing the listing maintenance fee. 
• The PDS (Philippine Dealing System) pricing of 2.32 billion pesos for 61.92% implies a 10.5x PE (7.5x PE ex-cash), which will be accretive to earnings despite the cash coming down. 
• With the 75% increase in the upper limit of listing and maintenance fees and the acquisition, the stock trades at 12-13x PE/7.6% dividend yield and three billion net cash.

• Inspire Medical Systems reported a promising third quarter in 2024, demonstrating significant revenue growth and improvements in profitability.
• The company’s revenue for the third quarter was $203.2 million, up 33% compared to the same period in 2023.
• This growth was predominantly driven by the increased adoption of Inspire therapy, reflected in the expansion into 66 new implanting centers and growth in 13 new U.S. sales territories.

• Kering is a luxury house similar to LVMH, with brands like Gucci, YSL, Bottega Veneta, and Balenciaga
• Gucci represents nearly 50% of Kering’s revenues and over 50% of profits, with its popularity tied to fashion trends
• Kering traces its history back to a diverse set of regional businesses before focusing on luxury under the leadership of Francois Henry Pinault

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

• Samsonite is planning to re-list in the US, despite currently being listed in Hong Kong
• Company is trading at low valuation but expected to see medium-term growth
• Listing in Hong Kong has not benefitted Samsonite, with potential for increased interest and growth in the US 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.

• Alpha Metallurgical Resources reported its third quarter 2024 financial results, indicating a challenging period due to decreased coal pricing and unfavorable market conditions.
• The company posted an adjusted EBITDA of $49 million and shipped 4.1 million tons of coal during the quarter.
• These figures were negatively influenced by lower coal prices, soft market demand, and certain operational challenges such as difficult geology and weather conditions.

• Favorable reservoir level, an uptick in Kharif Harvest, and strong sowing for the Rabi season are expected to drive good demand for tractors in the medium term.
• We summarize the sales volume published by listed players Mahindra & Mahindra(M&M), and Escorts Kubota Limited.
• Positive management commentary augurs well for uptick in tractor OEM stocks and related auto ancillary companies like GNA Axles Ltd (GNA IN) in medium term.

• In this insight, we highlight the recent pricing gap divergences of the major Korean holdcos and opcos which could provide trading opportunities in 1Q 2025.
• The recent martial law cancellation and numerous impeachments of acting Presidents have raised political uncertainty in Korea resulting in widening of some gaps among numerous holdcos and opcos in Korea.
• Of the 38 pair trades, 25 of them involved holdcos outperforming opcos in the past six months and the other 13 opcos outperforming holdcos in the same period.

• In this insight, we discuss the alpha generation through companies that have been buying back their shares in the Korean stock market in November and December 2024.
• On average, the share buyback announcements for the 52 companies that announced share buybacks in Korea represented 2.2% of outstanding shares.
• Major companies that have announced share buybacks in Korea in the past two months include Celltrion, Samsung Electronics, Doosan Bobcat, and Hyundai Motor. 

• The listing of Air China Cargo and progress on the transformation and upgrading of its South China Logistics Park again demonstrated Shenzhen International (152 HK)‘s asset value. 
• Its 8.8% stake in Air China Cargo is now valued at HK$10.6bn, or 61% of its market capitalisation, suggesting its other assets are almost free.
• Government approval on the South China Logistics Park transformation Phase I has been obtained, implying potential land value gains to be booked. 

• Our stock screen for textile/apparel companies listed in Hong Kong for FY24 summarizes the winners and losers. 
• Yue Yuen Industrial Holdings (551 HK) / JNBY Design Ltd (3306 HK) and Stella International (1836 HK) were the three best performers with returns of over 80% YTD.
• We continue to be bullish on JNBY Design Ltd (3306 HK) / Pacific Textiles (1382 HK) and like Nameson Holdings (1982 HK) for its rich dividend yield.

• Fulcrum Therapeutics reported its financial results and business developments for the third quarter of 2024 and reported that it is realigning its focus towards the advancement of pociredir, an oral HbF inducer intended for the treatment of sickle cell disease, and its preclinical pipeline.
• Previously, Fulcrum Therapeutics had been developing losmapimod for the treatment of facioscapulohumeral muscular dystrophy (FSHD).
• However, the Phase III REACH trial did not demonstrate a significant difference between losmapimod and placebo on the primary or key secondary endpoints.

• Potential Huawei sanctions under a reelected Trump administration could spell trouble for Chinese tech companies.
• Luxshare’s acquisition of nine Wingtech ODM subsidiaries indicates a consolidation trend in the tech manufacturing industry.
• The 2025 semiconductor boom is expected to be fueled by AI technology, but could face volatility due to Trump-era policies.

• Life Time Group Holdings, Inc. reported robust financial performance for the third quarter of 2024, with revenue increasing by 18% to $693 million.
• Membership revenue saw a 20% uptick, while in center revenue grew 16%, contributing to a net income of $41.4 million compared to $7.9 million in the same quarter in 2023.
• The adjusted net income reached $56.3 million, highlighting a substantial increase of $29.6 million from the prior year.

• We engaged with the company recently — SIMO remains in a strong position to capitalize on global increased need for high-end NAND memory controllers across mobiles, PCs, and enterprise AI.
• SIMO’s strong positioning in the Client SSD market and its technology leadership in PCIe 5 SSD and MonTitan solutions provide significant growth opportunities into 2025E and beyond.
• Reiterate Structural Long. Given the company’s net cash balance sheet, depressed market price, and multi-year growth outlook, in our view a share buyback program would be accretive to shareholder value.

• O2O has made a huge impact on China’s e-commerce scene in 2024. The Coupang-invented model suits mega cities with dense population and order volumes;
• Online drug O2O, in particular, has gained momentum because drugs, prescription and non-prescription have robust storage and distribution needs on the ground for O2O use;
• Meituan’s drug sales has grown its overall market share from 3.6% in 2022 to 7.1% in 2024. We project it to grow to 12.3% by 2030. 

• Elanco Animal Health’s third-quarter 2024 performance presents a mix of achievements and challenges that form the basis of an investment perspective.
• The company reported a modest 1% organic constant currency revenue growth, driven by contributions from new products like Experior, Adtab, Credelio Plus, and Zenrelia.
• This quarter marked the fifth consecutive one that Elanco has demonstrated growth in its underlying business.

• Element Solutions Inc. reported its financial results for the third quarter of 2024, showcasing notable growth and strategic initiatives that both bolster and challenge the company’s outlook.
• On the positive side, the company demonstrated a consistent strategic execution by targeting high value segments within the electronics supply chain.
• This focus has allowed it to benefit from trends like advanced packaging and power electronics, especially in sectors like high-performance computing, electric vehicles (EVs), and semiconductor assembly.

• Fox Factory Holding Corp.’s third-quarter fiscal 2024 earnings revealed both challenges and areas of potential growth.
• The company reported a sequential and year-over-year revenue increase, reaching $359 million.
• The bike segment performed well, demonstrating double-digit growth, aided by strategic moves into new market segments.

• Fresenius Medical Care demonstrated steady progress in its operational and financial performance during the third quarter, reflecting a focused transformation strategy and resilience amid external challenges.
• The company reported organic revenue growth of 2%, with positive contributions from both Care Delivery and Care Enablement segments.
• Notably, the U.S. same-market treatment growth turned marginally positive at 0.2%, marking a significant milestone, though still tempered by elevated mortality rates.

• GMS Inc.’s recent earnings results provide a snapshot of both challenges and opportunities faced by the company in its second quarter of fiscal 2025.
• The company reported a modest 3.5% increase in net sales, amounting to $1.47 billion, which can be chiefly attributed to recent acquisitions, including the new addition of R.S. Elliott in Florida.
• This reflects a strategic expansion into Complementary Products, including Tools & Fasteners, EIFS, and insulation, which have shown steady growth.

• GNA Axles is a cyclical play driven by revival of the tractor industry in India and pre-buying in commercial vehicles(trucks) in the U.S. market.
• A good monsoon in India in 2024 is expected to revive domestic tractor demand, while changes in emission regulations in the U.S. are likely to increase truck sales.
• The company is currently valued at a comfortable 18x trailing P/E, with a 15% RoE and RoCE.

17LIVE is a leading pure-play live streaming platform in Asia with key markets in Japan and Taiwan. Its business lines include Liver live streaming, V-Liver live streaming and other businesses such as in-app games and live commerce. 17LIVE is accessible globally and has fostered a diverse live streaming ecosystem with a loyal and engaged user community, as well as a deep pool of live streamers.

The Smartkarma team spoke to 17Live’s Chief Executive Officer and Executive Director, Jiang Honghui, in an exclusive corporate webinar. Honghui sheds light on the company’s impressive journey and future growth outlook within the vibrant live streaming space.

You can view the webinar via the link below. 

• 2024 witnessed an unprecedented rise in financial crimes, including an 8x surge in Indian banking fraud, massive cryptocurrency heists, and large-scale corporate fraud like Evergrande’s $78 billion scandal.
• These scams exposed vulnerabilities in technology, governance, and public awareness, underscoring the urgent need for robust regulatory frameworks, enhanced corporate accountability, and public education.
• The evolving sophistication of financial crimes highlights the necessity for vigilance, technological resilience, and proactive measures by individuals, businesses, and governments to mitigate risks in an interconnected world.

• In this insight, we provide our screening process methodology for picking top small cap stocks in KOSPI in 2025. 
• We used a 7 step process to narrow down a list of 30 stocks in KOSPI including market cap, ROE, sales growth, P/E, P/B, and Smartscore.  
• The top five stocks on the Korean small cap stocks screen include Binggrae, Innocean Worldwide, Hanil Holding, Miwon Chemicals, and Daechang Forging.

• SEBI uncovered insider trading during the HDFC-HDFC Bank merger, implicating a Deloitte employee and his associate, who profited Rs. 8.19 lakh using call options and confidential merger details.
• This case highlights the increasing sophistication of insider trading tactics and reinforces the critical need for stricter compliance to protect investor trust and ensure market transparency.
• The case demonstrates SEBI’s growing reliance on advanced analytics to identify market anomalies, ensuring accountability even in complex trading schemes involving proxy accounts and derivative instruments.

• Mainland China investors continued to increase their purchases of Hong Kong shares through the southbound connect platform after Trump’s win. Mainland investors bought a record HK$800B of HK shares in 2024.
• Weimob Inc. (2013 HK) announced it is connecting its Weimob mini-programs to Tencent’s (700 HK) WeChat mini-shop. This move further integrates the SaaS company into Tencent’s ecosystem.
• Wuxi Biologics (2269 HK) announced a license agreement with US-based Aadi Bioscience (AADI US).  Also, Wuxi was not included in the Senate version of the BioSecure legislation improving investor sentiment.

• Leaked Mediatek Chip Specs? — Talk of a “Qualcomm Killer”
• Hon Hai in the New York Times — Why Foxconn is Investing in Texas & Thailand
• TSMC’s Arizona 4nm Production On Track to Start 2H25E — Still Expected to Be 30% Higher Cost vs. Taiwan and That’s Okay

• Triveni Engineering & Industries (TRE IN)’s acquisition of Sir Shadi Lal Enterprise Limited is expected to add to the bottom line as it is located in the same region.
• The resumption of the molasses-based Ethanol plant would benefit as the previous year’s company closed operations early due to non-availability of cane.
• The demerger of the turbine is expected to be the major value-creation proposition.

• Cisarua Mountain Dairy stands out as a rising star amongst consumer staples in Indonesia driven by strong growth in both dairy through Cimory and premium foods through the Kanzler brand.
• The company will continue to benefit from lower raw material costs, as it buys six months ahead and is investing in promotions to drive the growth of new products.
• CMRY has launched Cimory Bites and Crispy Nuggets Spicy which will drive near terns growth, along with a focus on General Trade and MCM channels. Valuations are attractive versus growth.

• In this insight, we focus on the textile industry dynamics in India, Bangladesh, and Vietnam, particularly focusing on the “Bangladesh Plus One” sourcing strategy.
• Textile stocks have surged significantly, with an average increase of 13% in one month and 50% year-to-date, driven by investment narratives.
• Despite optimism in India, Bangladesh and Vietnam maintain competitive advantages, particularly in labor costs and export-oriented policies, affecting India’s market share.

• Playa Hotels & Resorts reported third-quarter 2024 results that exceeded expectations, driven by steady performance in the Yucatan and Dominican Republic segments and improving demand in the Pacific Coast and Jamaica.
• The company achieved owned resort EBITDA of $36.6 million in the quarter, which included a benefit from business interruption insurance proceeds of approximately $700,000, compared to $1 million in the same period last year.
• The company’s results reflected the impact of external factors such as Hurricane Barrel, construction disruptions, and travel advisories.

• Intel Corp (INTC US) established “Intel Foundry Services” in 2021, but it has not shown notable performance until now.
• There is some pessimism regarding providing foundry services in the US.  
• Taiwan Semiconductor (TSMC) – ADR (TSM US) should provide foundry services to Intel Corp (INTC US) and potentially other common clients as well.  

• Vesync (2148 HK)‘s major shareholders proposed to privatise at HK$5.60, a 33.3% premium to the pre-suspension price. This is the same as we calculated using the 3-year average P/B. 
• At such a price, it will sit at 7.6x PER for FY25F, a level that it only touched briefly 3 times in the last two years. 
• This PER is at a 25-30% discount to the sector and justified by its smaller size and lesser diversification. All in all, the proposed price looks fair and reasonable.

• TSMC: +21.1% Premium; Spread Has Fallen From Previous Short Levels, Remains Elevated
• UMC: -0.3% Discount; Middle of the Historical Trading Range, Not Compelling
• ChipMOS: -1.2% Discount; Wait for Deeper Discount Before Going Long

• Sumber Alfaria Trijaya (Alfamart) looks well set for a strong finish to the year boosted by seasonal factors and a higher quarter for supplier rebates making it the peak quarter.
• The company should be able to surpass its guidance for new store build-out in 2024, emphasising Alfamart and Alfamidi outlets, as it consolidates its Lawson rollout. 
• Alfamart saw strong growth from online sales through Alfagift at +45% YoY, with Alfamart members reaching 20m, with 65% shopping every week. Valuations remain attractive with strong growth in 2025.

• Grab Holdings has expressed excitement for 2025, as it harvests the investments it has made in its laddered approach to new product offerings from Saver to Grab Unlimited in 2024. 
• Having grown transacting users in 2024 through its Saver offering, Grab will focus on growing its premium offers in 2025. Groceries should outperform along with its offline dining initiatives. 
• Grab will focus on lending growth at its DigiBanks in Malaysia, and Singapore in 2025 and will double down on its advertising offerings. Grab will book a 2025 net profit.

• GoTo Gojek Tokopedia remains optimistic for the coming year, with increasing focus on converting hemat users to take up more premium products and it expands its suite of fintech offerings. 
• Focus on profitability will remain core, with an emphasis on product-led initiatives such as GoFood Plus and GoFood Express, and increasing emphasis on growing its fintech offering across products. 
• GoTo is increasingly using AI to improve both the customer experience and improve efficiencies. Advertising will increasingly become a tool to improve take rates with Tokopedia providing valuable cash flow.  

• Edelweiss reported a strong Q2FY25 performance led by consistent scaling up of its businesses, especially the asset management businesses. Its insurance businesses are also growing rapidly but are loss-making currently.
• The credit businesses are also growing well with the shift to the co-lending model. 75%+ of lending in NBFC is now being done through the co-lending model. 
• Edelweiss’ focus is on value unlocking and debt reduction. The asset management businesses are ripe for unlocking and Edelweiss is exploring a stake sale via IPO for its alternatives business.

• The FMCG business continues to sustain annualized revenue of INR 500cr+ and with Q2FY25 revenue at INR 146cr, it is possible that annualized revenue may now sustain at INR 550cr+.
• After having bottomed out a couple of quarters ago, the BPO business – Firstsource Solutions (“FSL”), is now performing strong with 6.9% QoQ and 22.7% YoY growth in revenue.
• Revenue in the Sports business varies significantly each quarter based on scheduling of the sports events. Accordingly, in Q2FY25, revenues were not significant at INR 20cr.

• Q2FY25 performance was mixed. IT Parks segment reported good growth at 2.5% QoQ and 8.5% YoY. BEC growth was mediocre at 8.5% YoY; QoQ is not comparable due to seasonality.
• Nesco Foods reported 10% YoY growth, which was decent but could have been better, given this business is relatively new and has significant potential. EBIT margin also declined YoY.
• Nesco is venturing into expressway wayside amenities development and management business, which appears synergistic and has potential to provide additional growth lever going forward.

• SK Hynix (000660 KS)‘s key turning point is its dedication to developing High Bandwidth Memory (HBM) technology, which has finally paid off.
• In the third quarter of 2024, SK Hynix (000660 KS) continued to surpass Samsung Electronics (005930 KS) net earnings based on their financial results.   
• Samsung Electronics (005930 KS) is reportedly exploring partnership opportunities with Taiwan Semiconductor (TSMC) – ADR (TSM US) in the realm of HBM, aiming to strengthen its ties with NVIDIA.

• InterDigital, Inc.’s third-quarter 2024 results reveal a blend of strategic progress and financial growth, marking a potentially positive trajectory for the company, though not without challenges.
• Key achievements include surpassing their revenue, adjusted EBITDA, and EPS targets, which catalyzed an upward revision of their 2024 revenue guidance by $145 million to $860 million.
• This growth is primarily attributed to new license agreements with major industry players like OPPO Group, which now includes coverage of their branded devices, thereby resolving pending litigations.

• Acuity Brands, a prominent player in the lighting and building management industry, reported a solid performance for its fiscal 2024 fourth quarter and full year, showcasing both growth and strategic progress.
• The company’s net sales reached $1 billion in the fourth quarter, marking a 2% year-over-year increase, driven by gains in its Lighting and Intelligent Spaces businesses.
• This growth is attributed to their strong product vitality and strategic pricing, helping to manage costs effectively.

• Jamf, a leading software company specializing in Apple device management and security solutions, reported strong third-quarter 2024 results, surpassing revenue and non-GAAP operating income expectations.
• The company’s year-over-year revenue growth reached 12%, with subscription revenue comprising a dominant 98% of total revenue.
• Non-GAAP operating income rose significantly to $27.7 million, reflecting a margin improvement from 9% to 17%.

• Lithia Motors, a significant player in the automotive retail sector, reported its financial results for the third quarter of 2024, showcasing both strengths and challenges.
• The company’s revenue for the quarter reached a record $9.2 billion, representing an impressive 11% increase from the same period last year.
• This growth was attributed to strategic expansions, improvements in cost efficiencies, and operational execution.

• Adani Transmission (ADANIT IN) is one of the largest private player in transmission.
• The management has guided for 20% YOY revenue & EBITDA growth for long term
• Alongside it is trying to diversify from transmission & distribution which are regulated by the government and entered in Smart Meters, Cooling Services etc.

• Strides Pharma achieved record growth in the US, launched high-ticket generics, and is spinning off OneSource CDMO with a projected valuation of $1.8-$2 billion by Q4FY25.
• Deleveraging efforts, diversified revenue streams, and regulatory approvals position Strides for profitability recovery, with expected FY26 EBITDA of ₹1,000 crore, driving long-term growth.
• Strides is evolving into a leaner, growth-focused entity with reduced debt, a strong US portfolio, and OneSource spin-off, offering ~25% upside from its current market valuation.

• The US-China trade war has shaped a new trend: Advanced and Matured Technologies led by Taiwan Semiconductor (TSMC) – ADR (TSM US) and Semiconductor Manufacturing International Corp (SMIC) (981 HK) respectively.
• Notably, construction of semiconductor fabs in Singapore seems to be of lesser concern at the moment.
• The emergence of AI offers new hope, not only for advanced semiconductor technology but also for lagging technologies.

• Despite being breakeven just quarters ago, JD Logistics (2618 HK) has achieved profitability on par with global peers nearly 3x its size. Margin still has upside with further subsidiary integration;
• JDL is still positioned to accelerate revenue by taking share from S.F. Holding (6936 HK) in untapped opportunities, including domestic B2C (Taobao/Tmall), cross-border B2C (Kuayue acquisition), and B2B;
• JDL’s stock price rose 60%+ while it was our top pick for 2024. We reiterate the company as our TOP buy idea in the China logistics space for 2025;

• ChampionX Corporation delivered a mixed set of results in the fourth quarter and full year 2023, revealing both strengths and challenges in its financial performance and market position.
• The company reported fourth-quarter revenue of $944 million, which was slightly up sequentially but 4% lower year-over-year, reflecting the impacts of softer U.S. land drilling and completions activity.
• However, the company’s adjusted EBITDA remained flat from the previous quarter at $198 million, marking a 10% increase over the prior year, driven by higher volumes, productivity, and cost management.

• ZTO’s market share losses may accelerate as peers continue to cut prices. Worse yet, margins of its competitors are improving, which will sustain the war for a longer time;
• ZTO has maintained profitability growth despite the price war, but we think this situation is unsustainable. Management will eventually need to sacrifice profitability or suffer accelerated share loss. 
• We now take a more bearish view on ZTO as we see no quick solution to the profit and market share balancing act. 

• Daesang is one of the leading F&B companies in Korea. It is especially well known for its sauces, kimchi, and miwon (MSG) food ingredients. 
• Daesang has relatively attractive valuation multiples. It is trading at P/E of 5.6x, P/B of 0.46x, and EV/EBIT of 6.4x in 2025. Daesang consistently generates positive net profit.
• Daesang Holdings (084690 KS) is the largest shareholder of Daesang Corp with a 39.3% stake. Two sisters (Lim Sang-Min and Lim Se-Ryeong) are the two largest shareholders of Daesang Holdings.

• In a pivotal moment for the weight-loss and anti-obesity market, Eli Lilly & Co. has solidified its leadership position following groundbreaking developments around its drug Zepbound.
• Recently approved in the United States for treating sleep apnea in obese patients, Zepbound has set a historic precedent as the first drug targeting the underlying causes of this condition.
• This development, coupled with robust sales and a promising pipeline, gives Eli Lilly a clear advantage over its primary competitor, Novo Nordisk, whose experimental drug CagriSema underperformed expectations.

• Enfusion, Inc., during its third-quarter 2024 earnings presentation, demonstrated robust progress in executing its strategic initiatives.
• The company achieved a 15% year-over-year increase in revenue, reaching $51.2 million, with notable growth driven by its strategic focus on larger, up-market clients and geographical expansion.
• Despite favorable revenue growth, the minor challenges faced included slower back book expansion, particularly in the Asia-Pacific (APAC) region, due to geopolitical uncertainties and economic conditions, which impacted organic growth.

• Euronet Worldwide has reported its third-quarter financial results for 2024, showing a record performance in key financial metrics.
• The company achieved a revenue of $1.1 billion, with operating income standing at $182 million.
• Adjusted EBITDA reached $226 million, and adjusted earnings per share (EPS) were reported at $3.03, marking an increase of 11% from the previous year.

• China announced game approval for the December batch. The number of games approved remained at a higher level than 2023.
• The pace of China game approval appears to have accelerated to the same level as pre-tightening. There have been 47% more games approved in 2024 compared to 2023.
• Of the companies that we are monitoring, Netease got one approval.

• Profits and share price stabilizing after steep declines, although margins still under pressure from rising R&D and depreciation, and costs associated with recent acquisitions.
• Sales of medical equipment to recover from post-COVID decline. Semiconductor equipment driven by advanced logic and high-bandwidth memory. Lasers to become fourth major product division.
• Buy for the long-term. Risks include Trump tariffs, weak European economies, emergence of Chinese competition.

• This insight explores the semiconductor industry’s fundamental building blocks, focusing on India’s role and target segments within the value chain.
• The Indian government has committed INR 76,000 crore to establish a self-reliant semiconductor manufacturing ecosystem.
• Key investments are being made in semiconductor manufacturing, focusing on design, assembly, testing, and packaging capabilities.

• MKS Instruments, Inc. reported a robust third quarter for 2024, with performance largely surpassing expectations.
• The company achieved revenue of $896 million, marking a 1% sequential increase, driven predominantly by gains in semiconductor and electronics and packaging markets.
• This growth was reflected in a gross margin of 48.2%, which was higher than anticipated due to favorable product mix and operational leverage.

• Credo Technology Group Holding Ltd. reported strong financial and operational performance for the second quarter of fiscal year 2025.
• The company recorded a revenue of $72 million, indicating a sequential increase of 21% and an impressive 64% year-over-year growth.
• The robust revenue figures were largely driven by vibrant demand across its three core product lines: Active Electrical Cables (AECs), optical Digital Signal Processors (DSPs), and line card retimers.

• Ono Pharmaceutical (4528 JP) is reporting decelerating revenue from its flagship drug, Opdivo. During H1FY25, domestic revenue from Opdivo decreased 17% YoY to ¥62.6B.
• Opdivo will start to lose patent protection starting from 2028. Prolific commercialization of these new drugs will remain crucial for Ono riding the patent cliff successfully.
• Ono shares plunged 36% over the last one year to trade at attractive valuation. In absence of any near-term growth catalyst, the shares are not expected to see much upside.

• BWX Technologies (BWXT) reported robust results in its third-quarter 2024 earnings, showing strong organic revenue growth of 14%.
• This growth, combined with solid operational performance, led to a 19% increase in adjusted EBITDA and a 24% rise in adjusted earnings per share (EPS).
• These results exceeded expectations, prompting the company to raise its 2024 adjusted EPS guidance to around $3.20, the upper limit of its previous range, while maintaining its free cash flow guidance of $225 million to $250 million.

• Paysafe is undergoing a turnaround after a significant decrease in value since its post-IPO high
• The company generates cash and benefits from growth opportunities in the igaming sector
• Despite high leverage and a substantial PE shareholder overhang, the stock has potential for significant upside if the turnaround is successful

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.

• In FY08/24, revenue was JPY82.1bn (-3.0% YoY), operating profit was JPY1.5bn (+172.2% YoY), recurring profit was JPY1.0bn (+355.9% YoY), and net income attributable to owners of the parent was JPY533mn (+212.8% YoY). The initial company forecast at the beginning of the fiscal year was revenue of JPY72.9bn, operating profit of JPY634mn, recurring profit of JPY454mn, and net income attributable to owners of the parent of JPY320mn. The initial assumptions were an exchange rate of JPY135/USD and an LME copper price of USD8,500/ton.
• The USD remained above JPY150 until end-Q3 and LME copper prices exceeded USD9,000/ton since April 2024. The company thus revised its performance forecast upward at its Q3 results briefing to revenue of JPY82.1bn, operating profit of JPY2.3bn, recurring profit of JPY1.9bn, and net income attributable to owners of the parent of JPY1.1bn.
• However, due to a decline in LME copper prices in Q4, the actual results for FY08/24 fell below the revised forecast.

• American Eagle Outfitters reported a strong third quarter for 2024, supported by their strategic initiatives, particularly their “Powering Profitable Growth” strategy.
• The company experienced a 3% increase in comparable sales, building on a 5% growth the previous year, and delivered an adjusted operating income at the high end of their guidance.
• Key highlights of the quarter include progress on brand amplification, with American Eagle maintaining its position as the #1 brand in denim for the 15-to-25 age group and experiencing its sixth consecutive quarter of comparable sales growth.

• Micron’s Q1F25 met expectations on key metrics but the ~9% downward guidance for the current quarter sent the share price into a tailspin
• Consumer-Related inventory issues and China competition were highlighted as the root causes for the surprise downward guide
• Micron is ok to cede legacy products to China competition and focus instead on the much more lucrative leading edge products, especially HBM. The transition could be rocky however

• Operating revenue increased YoY across segments, driven by domestic and overseas department stores, and commercial property development.
• Operating profit rose YoY, with significant growth in Domestic Department Store, Overseas Commercial Property Development, and Finance segments.
• Takashimaya Financial Partners Co., Ltd. saw increased revenue and profit due to higher transaction volumes and credit card income.

• AI inkjet breakthrough in semiconductor manufacturing promises more precise coating, revolutionizing tech industry processes.
• China’s price war in EV sector causes financial chaos and supply chain disruptions for 2 years, impacting global market.
• US House considers OLED import ban following patent dispute with Samsung Display Corporation, keeping spotlight on patent issues.

• Erajaya Swasembada booked a strong performance in 3Q2024 but 4Q2024 is likely to be the peak seasonal quarter for sales, even with no sales of iPhone 16.
• Chinese brands have accelerated the availability of affordable handsets, which should help to drive sales. JD Sports will be consolidated in December and Grand Lucky is performing well. 
• Erajaya Swasembada (ERAA IJ) will continue to expand Erajaya Digitial in 2025, Erablue stores already be at 76 stores by November. Valuations remain attractive along with a strong growth profile. 

• UMC Secures Key Qualcomm Advanced Packaging Order; Breakthrough in High-Growth Chip Supply Chain Segment
• Why TSMC Remains Critical for QCOM Manufacturing, Yet UMC Provides a Strong Strategic Counterbalance
• UMC Must Prove Itself, but QCOM Win Sparks Optimism for Sentiment and Outlook Recovery — Maintain TSMC as Structural Long & Rate UMC as Outperform

• Revenue decreased to JPY13.9bn, a 17.6% YoY decline, with significant drops in Japan and China sales.
• Operating loss of JPY303mn and recurring loss of JPY176mn were reported, with a net loss of JPY734mn.
• FY02/25 revenue forecast revised to JPY20.0bn, with expected operating profit and recurring profit declines.

• NVIDIA Corp (NVDA US) CEO Mr. Jensen Huang announced plans to establish an offshore headquarters in Taipei during his visit this June.
• From a geopolitical perspective, Taiwan is one of the focal points where the U.S. and China could potentially be in conflict. 
• Focusing on AI, NVIDIA Corp (NVDA US) is currently attracting significant attention, but the decision to establish an offshore headquarters in Taipei is raising curiosity.

• Department store sales to locals plummeted in October, resulting in the first decline in 32 months.
• While sluggish clothing sales was one factor, another was crowded luxury concessions putting off locals from visiting.
• Matsuya thinks it has the answer: keeping locals and tourists separate using a new online store.

• Insolation Energy (INA IN), originated from Jaipur, Rajasthan has been a beneficiary of the heavy solar tailwinds in the last two years and has been involved in major capex phase.  
• The company has received big contracts such as the MoU with government to the tune of INR 100 bn in spite of having net worth of only INR 1.1 bn.
• As far as forensics is concerned, we notice several irregularities such as low capitalisations, misclassification of OCF, EPS, naïve accounting of investments, forex movements, strange movements in margins, etc.

• Japanese IDMs are increasing global investments, while the US keeps a close eye on China’s chip industry to adjust supply chains.
• Compal Electronics introduces a new liquid cooling solution for effective cooling of electronic devices.
• Google enhances AI visual generation with Veo 2, Imagen 3, and Whisk, while Innolux focuses on FOPLP and Lam boosts fab efficiency with collaborative robots.

• FedEx Corporation is embarking on a transformative journey with its announcement to spin off FedEx Freight into a standalone publicly traded company within the next 18 months.
• The move, estimated to unlock over $30 billion in value, aims to streamline FedEx’s core operations and capitalize on the rising valuations of standalone trucking companies.
• The spinoff is seen as a strategic step to enhance focus, competitiveness, and shareholder value.

• Pro Medicus Ltd (PME AU) reported strong performance in FY24, with revenue increasing 29% YoY to A$162M. Net profit grew at a faster pace of 37% YoY to A$83M.
• At the end of FY24, full contracted revenue increased to A$624M over the next five years from A$468M in FY23, laying the foundation for continued growth in FY25 and beyond.
• In November, PME signed a A$330M, 10-year contract with Trinity Health. The contract is the largest ever for Pro Medicus and Trinity is the first customer with a national footprint.

• Jabil Inc. entered the first quarter of its fiscal year 2025 with a relatively solid performance, as evidenced by its reported revenues and continued efforts in restructuring its business model.
• The company reported $7 billion in revenue for the quarter, representing a 1% increase when excluding the impact of a prior-year divestiture in the Mobility segment.
• Core operating income was $347 million, with a margin holding steady at 5%, despite a modest impact from recent hurricanes.

• Kolte Patil reported a decent Q2FY25 with highest ever quarterly pre-sales of INR 770cr, a growth of 22% YoY. Pre-sales volume corresponding to this was 1.03 MSF (Million Square Feet).
• Notably, demand for premium projects has been strong. For H1FY25, 30% of pre-sales has come from 24K luxury segment. This compares to 12% in FY22.
• Year-To-Date, new launch activity has been decent with the launch of 2.2 MSF of saleable area. This includes Kolte Patil’s entry in Navi Mumbai with a project launch in Vashi. 

• Lamb Weston reported financial results for the second quarter of fiscal year 2025, which fell short of expectations amidst challenging operating conditions.
• The company experienced an 8% decline in net sales compared to the same period last year, driven primarily by a 6% reduction in volume due to declining restaurant traffic both domestically and internationally.
• In the backdrop of a competitive environment, Lamb Weston faced incremental customer share losses and exit from lower-margin business in EMEA, further impacting sales and volume negatively.

• Micron Technology Inc., a key player in the computer-memory chip industry, has faced significant headwinds, as evidenced by its recent revenue forecast, which missed analyst expectations.
• The company projected fiscal second-quarter revenue of $7.9 billion, far below the average estimate of $8.99 billion, while profit forecasts also lagged significantly.
• These results reflect sluggish demand in its largest markets—smartphones and personal computers—despite a notable surge in data center-related revenue and strong orders for artificial intelligence (AI) components.