Equity Bottom-Up

• 0.08x P/B. That’s where New World Development (17 HK) is currently trading. Less than half the P/B of the next comparable real estate peer.
• So, what’s going on? Announcing an expected HK$19-20bn loss for FY24 last week didn’t help matters. Shares are down 14% this week and 85% since Covid.
• Landlords need to drastically cut rents to jumpstart the retail sector. That translates to further impairment losses for property developers. 

• Taiwan Semiconductor (TSMC) – ADR (TSM US)  will benefit from Intel Corp (INTC US)‘s decision to use their 20A processor, named Arrow Lake.  
• Intel plans to stick with the 18A process and has identified about 5 potential customers.
• As of now, TSMC remains the primary source for technology deliveries.

• Baidu has reported its financial results for the second quarter of fiscal year 2024, showcasing resilience with its Baidu Core which posted a modest revenue growth to RMB 26.7 billion.
• This growth was driven by the accelerating performance in the AI Cloud sector, which somewhat counterbalanced the drag provided by the online marketing segment.
• Notably, there was an 8% year-over-year increase in non-GAAP operating profit for Baidu Core, reflecting continued operational efficiencies.

• Toyota Kirloskar, Toyota Motor‘s 89%-owned India JV, recorded a 65% rise in revenues and 240% jump in profits to around USD575 million in FY2024 following 48% increase in units sold.
• The company has continued to maintain its strong growth momentum in FY2025 YTD, with wholesale volumes up 36% YoY.
• Successful launch of rebadged Suzuki models, ramped-up production and customer-friendly initiatives have supported Toyota’s accelerated volume growth in India.

• Mispronunciations of Nvidia can be a red flag for some investors
• The volatility in Nvidia stock after earnings was not surprising due to high trading volume and options activity
• Buy side expectations and unofficial whisper numbers can impact stock performance in high profile companies like Nvidia

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

• This Insight focuses on lenders operating in consumer finance, including MSME-focused NBFCs. 
• Companies in focus include Bajaj Finance Ltd (BAF IN), Poonawalla Fincorp (POONAWAL IN),SBFC Finance Limited (SBFC IN) & MAS Financial Services Ltd (MASFIN IN). 
• We also cover high yield lender Five Star Business Finance (FIVESTAR IN).  

• Erajaya Swasembada (ERAA IJ) booked a solid set of 1H2024 results driven by the availability of affordable handsets, with volumes driving growth despite lower prices. 
• The company’s Erablue consumer electronics JV with Mobile World Investment (MWG VN) now has 61 outlets and is set to break even in 2024, with 80 stores expected by year-end. 
• The other growth drivers will come from private-label accessories and its Grand Lucky supermarket expansion. Valuations look attractive will the company trading on a 6x forward PER multiple.

• July 2024 ranked as the warmest July in NOAA’s 175-year global record. Land & sea surface temperatures were above average across the planet barring few exceptions.
• July had the 2nd smallest sea ice coverage in 46-years at 8.49 million square miles. There is a 77% chance that 2024 will rank as the warmest year on record.
• Heating, Ventilation, and Air Conditioning (“HVAC”) stocks continue to rise on strong demand as temperatures peak across the planet.

• Workday, a leading provider of enterprise cloud applications for finance and human resources, delivered a mixed set of results in its fiscal 2025 second-quarter earnings.
• The company reported a 17% growth in subscription revenue and a healthy increase in its 12-month backlog, which grew 16%.
• Professional services also saw growth, contributing to a total revenue growth of the same percentage.

• Snowflake Inc. reported a solid financial performance for the fiscal second quarter of 2024, with product revenue increasing by 30% year-over-year to $829 million, surpassing analyst expectations.
• The company raised its full-year revenue outlook to $3.36 billion, reflecting its continued focus on innovation and product development.
• Despite this growth, Snowflake’s stock faced pressure, dropping by 7% in extended trading as concerns over its ability to fully capitalize on AI-related opportunities persisted.

• Sony launches Soneium, a blockchain platform developed with Startale Labs, as a Layer 2 Ethereum solution to enhance transaction speed and scalability.
• Soneium aims to bridge Web2 and Web3, leveraging Sony’s vast intellectual property in entertainment and technology for broad consumer adoption.
• Backed by Sony’s resources, Soneium focuses on user-friendly blockchain technology, offering financial and technical support through its Soneium Spark incubation program.

• PC Partner showed a significant improvement in its 1H24 results YoY.
• The company will be relocating HQ to Singapore and move its primary listing from HK to Singapore. If this move is successful, it will improve AI chips allocation from Nvidia.
• Why Singapore? PC Partner is preparing itself for a future where China/USA political relationship does not improve.

• Intel faces two class action lawsuits, one of which has the potential to be many times worse than the “Pentium Flaw” fiasco in 1994
• The resignation of Lip-Bu Tan from Intel’s BoD is a significant blow particularly in view of his rumoured disagreements with the CEO and other BoD members
• Intel’s below book value market cap presents an attractive opportunity for any consortium with the vision to extract the value that Gelsinger’s IDM 2.0 gambit has failed to unlock

• Apple’s App Store contributed to the $85.2 billion service segment revenue in 2023, with an impressive gross margin of 70.2%, making it a crucial profit driver within Apple’s Services segment.
• The restructuring splits the App Store division into two teams: one to oversee the traditional App Store, and another to manage new, legally mandated alternative app distribution channels. 
• Developers who choose to bypass the App Store may incur a substantial Core Technology Fee, potentially amounting to hundreds of thousands of dollars, reflecting the cost of maintaining Apple’s ecosystem.

• Hyundai Motor India reported an 8% decline in monthly dispatch volumes ahead of India’s festive season, coinciding with a sharp increase in shipments by competitors in the SUV space.
• Mahindra & Mahindra (MM IN) , Toyota Kirloskar Motor ( Toyota Motor (7203 JP) JV), and Kia Corp (000270 KS) each posted high double-digit volume growth in August.
• Overall, India’s domestic Passenger Vehicle sales growth for the April-August period has slowed year-on-year after two years of strong post-COVID momentum.

• China Tourism Group Duty Free Corp Ltd (601888 CH) (CTG) share price on downtrend due to negative sentiment, increased competition, and Chinese being more frugal in their consumption  
• 2024 and 2025 consensus earnings declined by -2%/-17%, but CTG will deliver +16% YoY earnings growth in 2025. CTG remains a growths stock, a fact we think many investors forget!  
• We revise our target price to CNY71.3 pegged to 18.5x FY25 PE (1.5 standard deviation below mean). We think the share price decline is overdone and ignores its strong fundamentals.  

• Zai Lab (9688 HK) recorded Vyvgart revenue of $10M, $13M, and $23M in 4Q23, 1Q24, and 2Q24, respectively. The company raised 2024 Vyvgart revenue guidance to $80M from $70M earlier.
• Despite strong momentum from Vyvgart, Zai Lab still has a lot of pain points. Decelerating revenue growth from Zejula is one of them.
• Due to its in-licensing business model, Zai Lab has lower gross profit margin of 64–65%, compared with ~80% for a typical innovator biotech company.

• Atour (ATAT) reported C2Q24 revenue 2.2%/8.3% higher than our est./cons., and non-GAAP NI 6.8%/12.3% higher than our est./ cons, driven by stronger hotel supply chain sales and better retail efficiency.
• We keep 2024 revenue growth estimate at 53% YoY vs. the uplift company guidance at 48%-52% YoY. Potential catalysts are stronger off-season travel,old hotel renovation scheme, and new brand launch.
• We keep TP unchanged at US$36/ADS and maintain the BUY rating.

• UK car market sees resurgence as electric vehicles gain popularity at LCV Show, driving up sales and interest in sustainable options.
• SAIC Motor struggles with falling profits and tariffs on electric vehicles, putting financial strain on the company’s operations.
• IEDC fosters stronger economic ties between Taiwan and the region through a new office opening, promoting business opportunities and enhancing cooperation.

• Dollar General’s shares have plummeted after the company slashed its sales and profit forecasts for the full year, highlighting the financial struggles of its lower-income customers.
• The retailer, which primarily serves rural areas, now expects fiscal 2024 same-store sales growth of 1.0% to 1.6%, down from its previous forecast of 2% to 2.7%.
• Earnings per share are projected to be between $5.50 and $6.20, significantly lower than the prior estimate of $6.80 to $7.55.

• Simply Wall Street published an article on Aug 20, 2024, suggesting the fair value of Nextage was ¥1,772 or 16% below the previous day’s closing price.
• Yet, on the Simply Wall Street website’s stock page for Nextage, updated on August 26, they calculate the fair value at ¥5,726, or 189% above the close on Aug 19.
• Both cannot be right. Here’s an interesting window into how markets mis-price stocks.

• Historical valuation affirms that Zhongzheng is the cheapest it has been in the past 10 years 
• Chart analysis is to compliment our recent report Zhongsheng Group Holdings (881 HK, BUY, TP:HKD12.5): A Contrarian Play published yesterday
• Our TP of HKD12.5 is based on FY25 PE of 5x. This implies an UPSIDE POTENTIAL of 33%. It also delivers a dividend yield of ~9% at current prices. 

• BrainBees Solutions (FIRSTCRY IN) reported marginal decline in 1QFY2025 revenues and GMV (India operations) versus previous quarter, though both were up 17% YoY; fell short of market expectations.
• Key operating metrics for India business too were soft with Average Order Value slipping both on a QoQ and YoY basis, impacting GMV growth and segment margins.
• With 0% promoter holding, nearly 30%-50% shares could possibly start trading post lock-in expiry and this could test the stock’s resilience. Softbank Group(9984 JP), the biggest stake holder, owns 19.99%.

• Asia Ex-Japan fund managers continue to reduce their positions in Hong Kong Exchanges & Clearing.
• Percentage of funds invested and the average weight of the stock in portfolios have been on a downward trend since the recent peak in early 2023
• Wave of position closures in 2024 by Allianz, T Rowe Price, and Baillie Gifford has resulted in over half of the historical investor base exiting the stock

• Monthly deliveries recovered to the 2023 level in the three months – June, July, and August 2024.
• Li Auto’s deliveries growth outperformed the China NEV market size in July.
• We set the price target at US$26.90, which is 38% above the market price.

• Intel Corporation finds itself at a critical juncture as it heads into its mid-September 2024 board meeting, grappling with a series of severe challenges that threaten the company’s stability and future prospects.
• Once a titan of the semiconductor industry, Intel has been beset by financial difficulties, including continuous losses, declining market share, and an increasingly competitive landscape.
• The situation has been exacerbated by the recent departure of key executives, adding to the uncertainty surrounding the company’s strategic direction.

• We are slowly building out a high-conviction coverage of ideas for the mid and small-caps in the Philippines.
• We set criteria for high ROCE, reasonable growth (10-15% YoY), strong balance sheets, and reasonable capital allocation (dividend yields), all ingredients for being multi-baggers.
• We like Ginebra San Miguel (GSMI PM), The Keepers Holdings (KEEPR PM), and DigiPlus Interactive (PLUS PM). We are building our library and will cover more names in the future. 

• Akeso reported C1H24 top line, non-IFRS operating loss and IFRS net loss 10% above, 13% narrower and 3.5% narrower than our estimates. 
• The most positive takeaway from the result is the Phase III start of CD-47 mAb (AK117), which can potentially be a global first-in-class (FIC). 
• We raised TP from HK$58 to HK$63 and reiterate our TOP BUY.

• CrowdStrike, a leader in cybersecurity known for its AI-driven Falcon platform, now finds itself grappling with significant challenges in the wake of a global IT outage that has shaken its foundations.
• While the company has long been recognized for its robust growth, technological innovation, and a solid client base, the recent incident has exposed vulnerabilities that could impact its future trajectory.
• The outage, which disrupted services across critical sectors, has raised questions about the resilience of CrowdStrike’s operations and the reliability of its platform.

• Dongfang Electric (1072 HK) is now closer to the bottom after underperformance due to a weaker-than-expected 1H24 result dragged by low-margin coal-fired products.
• New contract momentum, however, stayed resilient with a 14.8% YoY increase to Rmb56.1bn in 1H24. Forward backlog coverage is now at 1.8x FY24F revenue.
• There is a significant Rmb6.3bn positive operating cash flow swing in 1H24. This helps to raise net cash (excluding contract liabilities) to 76.4% of the share price.

• Eid Parry India (EID IN) A Murugappa Group Company setting stage for transformation from cyclical sugar business to more stable consumer and high margin business. 
• The company has diversified into the non-sweetener segment and is emphasizing an asset-light model to drive further expansion.
• Eid Parry India (EID IN) is also the holding company of Coromandel International (CRIN IN), which holds substantial intrinsic value.

• The market has lingering concern about substantial slowdown in PDD’s growth and has been pricing in the outlook for most part of the year.
• 2Q results did signal imminent growth deceleration, and management’s blunt yet honest comments about the pressure on margin further stoke fears.
• We regard 1/3 market cap wipe-out after the results as over-reaction. While risks have been reflected to large extent, we do not expect a meaningful re-rating until 2H25.

• First Pacific Co (142 HK) is a Southeast Asian conglomerate that has been handicapped by its listing in the Hong Kong market over the last several years.
• As Southeast Asian markets (Indonesia and Philippines) begin to re-rate on the back of a more accommodating Fed policy, First Pacific is beginning to participate in the uptrend.
• Metro Pacific Investments Corp (MPIC), the second largest piece of the company’s NAV has been active in acquiring more infrastructure assets since being privatized last year.

• Super Micro Computer Inc. (SMCI) has found itself in the crosshairs of controversy following a recent report from Hindenburg Research and the company’s delayed 10-K filing.
• As the tech giant continues to ride the wave of AI enthusiasm, the latest developments have cast a shadow over its stellar growth narrative.
• While SMCI’s impressive revenue figures and expanding market share in AI-driven solutions have attracted considerable investor attention, the company’s past accounting missteps, unresolved regulatory concerns, and potential internal control weaknesses suggest a need for heightened caution.

• Despite slower top-line growth, Trip.com posted firmer margins in Q224
• Cash Operating Expenses as a % of Net Revenue fell by around -250 bps Y/Y
• Post-Covid, Trip.com has less competition; BUY with target of US$58 per ADS

• 1H24 results were below expectations, with profits halved YoY. Irrational competition with overzealous discounts, and general decline in preference of traditional luxury cars for NEVs is hurting Zhongzheng (ZS)
• Signs of bottoming as industry are trying to stop the discounting madness and instill some level of rationality
• ZS is trading at 0.47x book, its cash = MCAP, and FY25 PE of 3.7x. Ridiculously cheap for a profitable and positive FCF churning company.  

• Recent media reports on declining passenger vehicle (PV) sales in India for August are based on wholesale data and reflect expected weakness due to high dealer inventory levels.
• Hyundai Motor India (1342Z IN)‘s  dispatches dropped by 8% in August, yet the company remains strong in the SUV segment, with the Creta, launched in January 2024, driving growth.
• Outlook for the passenger vehicle segment is cautiously optimistic, supported by monsoon impact, festive season, new product launches, but challenges like heavy rainfall, high inventory levels, and economic uncertainties persist.

• Apollo Hospitals Enterprise (APHS IN) reported strong Q1FY25 result, with 15% revenue growth and a massive 83% jump in net profit. EBITDA margin improved to 13.3% (Q1FY24: 13.0%).
• Sequential improvement is expected in Q2 and Q3. The company believes ARPOB growth will improve over the next few quarters with stronger growth in surgical volume and better case mix.
• The company believes enhanced volume growth, improvement in case and payer mix, and a focus on cost optimization will drive margin expansion by 100bps over the next 3–4 quarters.

• Latest Industry Signals — Nvidia Crashed While Marvell Soared… Custom Silicon a Threat to Nvidia’s Monster Growth? Taiwan AI/Server Exposed Names Were a Mixed Bag of Performance
• Key Events to Watch — SEMICON Taiwan This Week, We Will Be Attending
• Perspective — NVIDIA’s >5x YoY “Singapore” Revenue Growth Is A Red Flag

• Dream International (1126 HK) reported revenues/profits of -7.8%/-17% YoY for H1 FY24 due to prolonged destocking of plastic/plush toys, resulting in weak (-18% YoY) North American sales (43% of revenues).
• With over 1.26 bn HKD net cash (43% of the market cap), the company paid another generous dividend of 20 cents (we believe H2 will be higher).
• The company has deep value, trading at 3.9x FY24e PE/1.1x EV-EBITDA, with a 12.7% yield. 

• Recap of 1H 24 on two of the largest and most influential EV makers; Tesla (TSLA US) and BYD (1211 HK) .
• BYD performance is superior to Tesla yet it trades at a discount to Tesla, notably 0.2x vs 3x PEG.
• BYD faces tailwinds in North America and the EU, but those are not its main destinations.

• Despite an 11% drop in profit in 1H24, Sinotrans (598 HK) has maintained interim DPS at Rmb0.145. This is a sign that the full-year dividend will stay intact, yielding 8.9%. 
• The logistics segment has experienced pressure, but strategies are in place to boost revenue and reduce costs. Forwarding and e-commerce segments, meanwhile, are resilient. 
• We were too early in turning bearish in 2023. With US rate heads lower, the near-term market focus is that it is a solid yield play.

• Welcome to Consumer Tales & Trends, your weekly roundup of the latest corporate developments, investment reports and sector events in the consumer industry.
• Meituan (3690 HK)  reported robust revenue and profit growth amidst  broader struggles in the F&B industry  raises questions on industry dynamics and momentum sustainability.
• Health And Happiness (1112 HK)  faced another quarter of declining revenue and profits, but reported a significant rise in cash generated from operations thanks to improved inventory turnover.

• Despite a 3.1% drop in profit, China Communications Construction (1800 HK) is the best-performing infrastructure play in 1H24 as peers have logged a 15-19% profit decline. 
• High taxation and lower exchange gains are drags on earnings. However, margins have expanded and new contracts increased by 8.4%, suggesting healthy fundamentals. 
• Reduction in BOT capex investments is welcomed and it has also declared first-time interim DPS. We expect new contract momentum to accelerate in 2H24. 

• The tension between the government and Alibaba was eased, as the authorities closed the rectification course on Alibaba.
• Huawei’s total revenue increased by 34% YoY in 1H24, as the smartphone sales surged.
• Kuaishou will provide a subsidy of US$56 million to e-commerce broadcasters.

• We compare H1 revenue growth and Adjusted EBITDA margins of six companies
• We then add needed context to aid understanding of each company’s results
• We think it’s time to look for bargains in express; focus on SF Holding, Yunda

• Edelweiss Financial Services (“Edelweiss”) continues to scale up well its asset management and insurance businesses. The credit business has been also turning around led by the co-lending model.
• In particular, the asset management business has been growing rapidly. The alternatives asset management AUM grew 17% YoY, of which fee-paying AUM grew 32% YoY.
• With all its businesses now running independently, Edelweiss is focusing on unlocking value. It already demerged Nuvama and is now close to unlock value in its Alternative Asset management business.

• Ace Hardware Indonesia has been rebranded to Aspirasi Hidup Indonesia after the franchise agreement with ACE US was not renewed. Given ACES’s long-standing independence, we see this as an opportunity. 
• The new names for the company will not be the brand names for the stores and Ace Hardware products are a tiny portion of the Indonesian company’s SKUs anyway.
• Concerns over the separation look overblown with ACES seeing a strong YTD performance above guidance with valuations looking attractive after recent share price weakness, with new store rollout ongoing.

• Bank Negara Indonesia (BBNI IJ) presented an optimistic picture from 2Q2024, with management upgrading the loan growth forecast range for the year by a notch with an improving liquidity backdrop.
• Credit costs remain low with the SME segment the only segment with lingering problems from vintage pre-2022 loans but otherwise, LAR are in decline with room to cut coverage ratios.
• BNI made a big fanfare of the launch of its brand new “wondr” banking app which is already off to a strong start with more active users. Valuations are attractive. 

• Shivam Autotech (SVAT IN) or (SATL) serves OEMs by manufacturing a range of auto components and accessories including transmission gears, transmission shafts, etc.  
• The company’s business performance over the last few years has looked grim with stagnant revenues, declining margins and ballooning losses. Balance sheet has only gotten more fragile.
• Auditor’s comments on material weakness on internal controls, increasing receivables, balance sheet ALM mismatch are few red herrings to look out for.

• IBM Corp. is shutting down two major research and development (R&D) units in China, amid declining business in the country and mirroring a broader trend of U.S. tech firms scaling back their presence in China.

• The units affected by the pullback are IBM’s China Development Lab (CDL) and China Systems Lab (CSL), both established in 1999.

• CDL, which focused on application software development, has more than 1,000 employees, while CSL, which focused on system development such as mainframe database, has a team of 695, one IBM worker told Caixin.

• RLI Corp. reported strong financial results for the second quarter of 2024, reflecting a comprehensive picture of growth and financial stability across its various segments.
• The company, with its broad portfolio of insurance products, demonstrated robust underwriting profitability and significant net investment income growth.
• The deep dive into each segment reveals both strengths and areas with scope for vigilance.

• Globe Life Inc., in the second quarter of 2024, reported a net income of $258 million, or $2.83 per share, compared to $215 million, or $2.24 per share, a year ago—an impressive growth of around 20%.
• The net operating income also saw a notable increase to $271 million, or $2.97 per share, reflecting a 14% rise from the previous year.
• This indicates a robust improvement in profitability, underscoring the company’s operational efficiency and financial strength.

• Reinsurance Group of America, Incorporated (RGA) reported robust second quarter 2024 results, delivering adjusted operating earnings of $5.48 per share, showcasing strong performance across its business lines and geographies.
• This was supported by a pipeline of robust new business activities, contributing to an adjusted operating return on equity of 15.3% for the past 12 months, surpassing intermediate-term targets.
• 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.

• Ryan Specialty Holdings continued its robust growth trajectory in the second quarter of 2024, achieving impressive financial results with an 18.8% year-over-year increase in total revenue to $695 million, driven by robust organic growth of 14.2%.
• This growth is underpinned by the company’s clear focus on niche market specialization and talent.
• Adjusted EBITDAC saw a considerable rise of 27.6% to $248 million, while the adjusted EBITDAC margin expanded by 240 basis points to 35.6%.

• Selective Insurance Group Inc. delivered a mixed performance in the second quarter of 2024, navigating challenges that reflect broader industry-wide issues affecting insurers.
• John Marchioni, the CEO, highlighted the company’s commitment to disciplined underwriting, pricing, and reserving practices, which remain intact despite the pressures of social inflation affecting liability lines, particularly general liability.
• 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.

• NVIDIA delivered another blockbuster quarter with record revenues of $30 billion, blowing well past the guided $28 billion, up 15% QoQ and up 122% YoY.
• $5.6 billion in revenues were attributed to Singapore, making up more than 18% of overall revenues and up >5 times YoY
• What the heck is the city state doing with all of those GPUs?

• Samsung’s foundry service growth is driven by AI, HPC, and automotive sectors, showcasing a diverse and promising market strategy.
• Meta is set to launch glasses-like MR device in 2027, aiming to revolutionize the way we interact with technology and the digital world.
• Global OSAT industry is projected to experience significant growth by 2024, fueled by increasing demand for testing and packaging services in the semiconductor market.

• Premier Energies made SALE before Offer For Sale – A mini OFS just before IPO to close investors who helped company in its journey till IPO.
• The stake sale amounting to INR 800+ crores raises the concern over governance and disclosure norms
• Such a unique case where the promoter used the loophole might face actions from SEBI.

• LI Auto (LI) reported C2Q24 top line, non-GAAP operating profit and GAAP net income 5.0%, (5.2%) and (20%) vs. our estimates, and in-line, 53% and 6.8% vs. consensus.
• We believe the market has oversold the company.But in our view,the key question is LI’s next product entry under the backdrop of Xiaomi consolidating its position in the EV sector. 
• We believe LI should continue to explore its “family car” brand niche in entering the sedan market. If so, volume and margin can co-exist.

• Sanyo Industries Product Categories Sanyo Industries (TYO 5958) is a manufacturer of construction materials that’s been in business since 1948.
• Their main products are sheet metal works used for flooring, roofing, aluminium building materials, and rooftop ventilators.
• They also manufactur earthquake and other disaster resilient components.

• Elgi Equipments (ELEQ IN) headquartered in Tamil Nadu, India manufactures a range of air compressors and automotive equipments and sells across domestic and international geographies.
• Overall, balance sheet looks strong with consistent FCF generation, upward sloping ROCEs and low risk of solvency
• But one needs to be cautious about the performance of subsidiaries, especially the Belgium and US arms, and goodwill assessment, whistle blower trends, etc.

• Bank Mandiri’s recent results reflect the success of the bank’s strategy to grow higher-yielding loans and its strength in corporate, commercial, and consumer loans, with micro showing slower growth.
• The bank funding base remains solid with strong CASA growth, helping it to maintain NIMs. Mandiri’s mobile banking under Livin’ continues to drive its transactional banking, loan and deposit growth.
• Bank Mandiri‘s upgrade to its loan growth projects speaks volumes about its confidence. With credit costs at less than 1% and ample liquidity, the bank is well-positioned for growth.

• It is far from common for a stock to be up 4% after missing the revenue guide for the quarter and slashing the full-year revenue guide for the year.
• That’s exactly what happened with Lululemon today which should tell you the kind of sentiment going into the earnings!
• The crux of the bear thesis on Lulu usually circles around their US business. 

• 2Q-2024 results is within ours and consensus expectations. Competition is tough, but LiAuto managed to remain profitable   
• Management is boosting R&D expenditure and boost spending on  expanding number of charging stations, all for the benefit of its customers. 
• Our fair value of USD25 implies 16x FY25 PE – average for auto growth stock. A bargain with 3-year CAGR of 38%, net cash, and churns high free cash flow.

• BQE announced that it has been contracted for a new water treatment plant for the closure of the legacy Valley Tailings Facility in the Yukon.
• This continues the rapid growth that BQE has posted in its recurring operations segment which grew 79% YoY and 43% QoQ in Q2.
• The plant is expected to be completed in Q2/25 and operate for six years.

• This Insight focuses on lenders operating in the affordable housing space.
• Companies in focus are Aavas Financiers Ltd (AAVAS IN);  Home First Finance (HOMEFIRS IN) & Aptus Value Housing Finance India (APTUS IN). 
• Recent IPOs of Aadhar Housing Finance Ltd (1218027D IN) & India Shelter Finance (0570670D IN)  are also covered. 

• Total revenue increased by 26% in 2Q24, as sales volume grew strongly after March.
• We believe the operating margin will be stable due to the ability of battery production.
• We also believe the tariff penalty from Europe is not a concern in the long run, as BYD’s products have expanded to 77 countries.

• NVIDIA’s Q2 revenue soared 122% to $30.04 billion, exceeding estimates, driven by unprecedented demand for AI-driven data center chips. 
• The data center segment grew 154% YoY, generating $26.3 billion, reflecting NVIDIA’s strong position in AI hardware with major contributions from cloud providers. 
• Despite approving a $50 billion stock buyback, NVIDIA’s shares fell 8% after-hours due to concerns over future chip supply and broader market trends, though the stock is up 150% YTD.

• AI advancements driving demand for MLCCs, leading to growth in passive component industry and shaping future technology trends.
• Super Micro Computer faces delay in annual report filing amid allegations of accounting manipulation, raising concerns in the tech market.
• Industry predictions for Semicon India 2024 and updates from Intel and Sony on upgrades in car cockpits and price increase on PS5 due to rising component costs. Taiwan drone market facing potential delay due to China’s dominance in crucial modules.

• Shenzhen International (152 HK) reported 1H24 net profit of HK$653m. While toll road and other segments are under pressure, the logistics segment has benefited from REIT issuance.
• In 2H24, it may book profit from the initial land appreciation gain from the South China Logistics Park transformation and profit from the 50%-owned Yicheng Zhenwanyue.
• SZI seeks to realise the value of its assets. At 0.4x P/B or 1SD below the 5-year average, the stock, with a 7.5% yield, is deeply undervalued. 

• The valuation of Huawei Technologies Co. Ltd’s smart car unit has surged to 115 billion yuan ($16 billion) only seven months after its launch, following a recent investment.

• Yinwang Intelligent Technology Co. Ltd., a wholly-owned subsidiary of Huawei founded in January, has agreed to sell a 10% stake to Avatr Technology Inc., an electric vehicle (EV) startup backed by China’s state-owned automaker Chongqing Changan Automobile Co. Ltd. (000625.SZ -1.54%) and battery giant Contemporary Amperex Technology Co. Ltd. (CATL). 

• Avatr agreed to pay 11.5 billion yuan for the stake, with the payment to be made in three installments, contingent on conditions such as the introduction of Huawei’s smart car technologies and talent to Yinwang.

• Chinese parcel volume growth slowed in July (+22%) vs firmer pace in Q2 (+32%)
• At company level, there are signs the steep price declines from H1 are moderating
• If worst of price declines is in rearview mirror, beat down names are worth a look

• 3i is a unique publicly traded investment company with a major stake in the European retailer Action
• 3i operates differently from traditional private equity firms by investing its own balance sheet funds
• 3i has a complex history dating back to pre-World War II and is difficult to categorize in traditional investment vehicle terms

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

• Chubb Limited’s second-quarter earnings for the period ending June 30, 2024, revealed a robust financial performance, characterized by significant growth in premium revenue and substantial increases in both core operating and investment income.
• The insurer reported a core operating EPS of $5.38, marking a 9.3% increase from the previous year.
• This was supported by a growth in net premiums of 11.8% (or 12.3% on a constant dollar basis) facilitated by a diversified portfolio across geographical regions and business segments.

• Paul Cerro, founder of the Cedar Grove Empire, discusses his investment in Redcat Holdings
• Redcat is a US-based drone manufacturer specializing in unmanned drones for military purposes
• Redcat is poised to potentially win a lucrative US Army contract, driving significant upside potential

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• 7&I Holdings is reviewing a confidential acquisition proposal from $ATD, highlighting significant potential for value creation through strategic refocusing on its core convenience store business
• ValueAct Capital previously criticized 7&I as an “unfocused holding company,” urging a focus on core assets, estimating a potential value of ¥4,200 per share.
• Our valuation suggests 7&I could reach ¥3,700 per share, driven by the repricing of its overseas CVS business; $ATD will need a strong offer.

• Despite a negative share price reaction following its 1Q2025 earnings report, Alibaba Group Holding (9988 HK) seems to have entered an earnings upgrade cycle due to improved profitability expectations.
• Despite recent share price pressure, due to negative industry readthroughs from peers, Alibaba Group’s near-term momentum indicators are displaying bullish signals.
• Alibaba Group trades at more than one standard deviation below its 5-year historic average forward PE ratio, and near the lowest level it has ever been.

• PDD Holdings (PDD US) shares fell 28% on Monday after a 3% revenue miss, with shares dropping an additional 4% yesterday.
• The results themselves weren’t bad enough to justify such a sharp price reaction.
• However, management’s comments on slower growth and a potential drop in profits triggered a significant sell-off.

• On 28 August, Hyundai Motor announced its Corporate Value Up policies, including a minimum dividend per share this year targeting 10,000 won per share for common shares. 
• Hyundai Motor plans to implement a shareholder return policy based on a total shareholder return (TSR) of 35% or more from 2025 to 2027.
• Hyundai Motor’s Corporate Value Up plan of providing TSR of 35% or more from 2025 to 2027 is certainly better than what it provided in the past three years (26%). 

• July outbound travel (and seat capacity) fnally approached pre-Covid19 levels
• Domestic air travel demand also showed modest Y/Y improvement in July 
• We still like Trip.com on improving profitability, BUY with US$55 target

• PDD reported C2Q24 top line, non-GAAP operating income and GAAP net income (3.9%), (1.2%) and (4.4%) below our estimates, and (2.9%), 12% and 16% above consensus. 
• We believe PDD’s upgrade in its ecosystem and infrastructure is long overdue. Such investment would support its growth, especially in overseas. 
• Trading at 6.4x 2025 PE, we believe PDD is undervalued. We reiterate BUY and place it as TOP PICK of China’s e-commerce sector.

• TCOM reported C2Q24 revenue in-line with our est./cons., non-GAAP operating income also in-line with our est./cons., and non-GAAP net income beat our est./cons. by 18%/40%,mainly due to rising equity income
• Robust int’l growth offset weakness in domestic. With services possibly included in the government consume subsidy in C2H24/1H25 and Rmb’s appreciation.
• We feel it is time to buy TCOM again, TP to US$50 from US$42.

• It’s about to be primetime for the AI semiconductor trade, and for the first time in a long time (maybe ever), I wanted to write an earnings preview. It might be the first time (ever) and hopefully the last time.
• Two critical companies report this week. I’ll start with Marvell, the less important but the one I like, and then talk about some exciting dynamics at Nvidia that could lead to volatility and why it might not even matter.
• Marvell has always been a favorite of this newsletter. I won’t lie; I root for the hometown on this one. Inphi was my first paid post, and it worked out with a buyout by Marvell only two weeks later.

• This Wednesday, after the Wall Street close, NVIDIA Corp (NVDA US) will release its second-quarter figures, concluding the current earnings season. The stock has returned 155% YTD.
• Nvidia’s results will be crucial in determining whether its stock recovery continues (+25% since its August 5 low and 11.8% below its all-time high of $140.76 on June 20).
• Historically, when Nvidia’s earnings and guidance have been strong, its stock has rebounded by c. 30% and over in four occasions.

• IOS 18 beta offers new Home Screen and Control Centre customization; AI features like Advanced Siri Capabilities delayed until iOS 18.1, set to arrive later this year. 
• Morgan Stanley forecasts Apple will ship five hundred million iPhones over two years, driven by the AI-powered Apple Intelligence, with a 4%-5% growth in iPhone average selling prices. 
• Only 15% of current Apple devices support new AI features, pushing a significant upgrade cycle; 24% of iPads are compatible, suggesting a mini-upgrade cycle in the tablet market.

• TSMC’s top 5 clients for 2024 are Apple (AAPL US), Advanced Micro Devices (AMD US, Qualcomm Inc (QCOM US), Mediatek Inc (2454 TT) and NVIDIA Corp (NVDA US).
• Smartphone orders continue to dominate at TSMC, with QCOM and MediaTek being key clients.
• Looking ahead to 2025, Intel Corp (INTC US) is expected to rely more on TSMC, potentially leading to changes in TSMC’s client ranking.

• PDD Holdings (PDD US) stock price nosedived 28.5% yesterday wiping away more than USD55 billion in market cap following Management’s call with investors.
• During the call, the management guided towards weakening profits in the next quarters and stated that high revenue growth was unsustainable in the long term.
• Investors however seemed to be spooked not by negative guidance on profitability/growth but by comments on impact of non-business factors and need to adapt to changing times etc.

• NVIDIA’s dominance in AI GPUs, with 80% market share, has driven data center revenue growth by 427% YoY, with analysts expecting a 112% YoY revenue increase to $28.68 billion.
• NVIDIA’s GPUs are crucial for AI workloads, with significant adoption by cloud giants like AWS and Microsoft Azure. AI-specific chips are expected to drive 40% of 2024 revenue.
• 47 out of 61 analysts rate NVIDIA a strong buy, with average 12-month price targets showing 13% upside, reflecting confidence in its AI leadership despite potential market volatility.

• In 2Q24, total revenue increased by 14% YoY and hotel booking revenue increased by 20%.
• We believe the company has been riding on the recovery of the travel market and will see historical high quarter in 3Q24.
• We also believe the stock still has an upside of 18% after one day’s surge.

• 1H24, Nongfu’s revenue growth rate fell to 8% YoY, because Wahaha launched a propaganda against Nongfu.
• We believe the revenue growth will rise in 2H24 and 2025, as it seems that the public do not like the way Wahaha use.
• We set an upside of 26% and a price target at HK$38 for the end of 2025.

For our next Corporate Webinar, we are glad to welcome RemeGen’s Chief Financial Officer, Mr. Tong Shaojing.

In the upcoming webinar, Tong will share a short company presentation after which, he will engage in a fireside chat with Smartkarma Insight Provider, Eric Wen . The Corporate Webinar will include a live Q&A session.

The Corporate Webinar will be hosted on Thursday, 19 September 2024, 09:00 SGT.

About RemeGen

RemeGen was cofounded in 2008 by Mr. Wang Weidong, founder of Rongchang Pharmaceuticals, a leading traditional Chinese medicine company in China and Dr. Fang Jianmin, a Canadian-American scientist. Headquartered in the coastal city of Yantai Shandong Province of China, RemeGen has research labs and offices throughout China and the United States. RemeGen is committed to the discovery, development, and commercialization of innovative and differentiated biologic drugs of significant clinical value in the key therapeutic areas of autoimmune oncology and ophthalmic diseases.

• ETF flows in the Asian region continued their positive momentum during August with Southbound Connect positive again for the week.
• Stella International (1836 HK) will increase its dividends and buybacks after positive earnings surprise. AIA Group Ltd (1299 HK) saw a surge in new policies from mainlanders in HK.
• Lufax Holding (6623 HK) reported an earnings miss with declining loan volume. Yancoal Australia (3668 HK) reported a decline of 57% in earnings which was below analysts’ estimates.

• Intel Corporation, once the undisputed leader in the semiconductor industry, is currently grappling with a series of challenges that have significantly impacted its market position and share price.
• Amidst these struggles, Intel is reportedly working with advisors like Morgan Stanley to prepare a defense against potential activist investors, a clear signal of the growing pressure the company faces.
• The need for such a defense highlights the precarious situation Intel finds itself in—a company in the throes of operational difficulties, financial underperformance, and strategic missteps.

• BIDU reported C2Q24 top line, non-GAAP operating profit and GAAP net income inline, 5.6% and 7.6% vs. our estimate and inline, 10% and 8.4% vs. consensus. 
• Weak economy is only part of the problem. Weak monetization exists across the entire product line. 
• We cut the TP to US$80 and reiterate SELL rating.

• Advanced Micro Devices (AMD) has made headlines with its recent acquisition of ZT Systems for $4.9 billion, a move that signals the company’s intent to become a formidable force in the AI space.
• As the industry leader, NVIDIA has long dominated the AI hardware market, but AMD’s latest strategic acquisition could shift the competitive landscape.
• This acquisition is not just about expanding AMD’s capabilities; it’s about positioning the company as a viable alternative to NVIDIA in the rapidly growing AI infrastructure market.