Equity Bottom-Up

• China announced game approval for the June 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, though the number of approvals appears to be slower than March.
• Of companies that we are monitoring, Tencent and iDreamSky clinched one approval each.

• Shankara Building Products L (SHANKARA IN) is seeing a healthy topline growth in the last three years but this is accompanied with margin contractions.  
• As far as the forensics are concerned, the company does not have grave auditor red flags like earlier but there are still some eye-catching checks.
• Caution must be given to the finance costs of the company which look on a higher side vis-a-vis the borrowings. Moreover, inadequate provisioning might also expose out some receivables.

• Generative AI is driving hardware advancements and creating new industrial prospects, with Synopsys offering automation and analytics tools for chipmaking facilities in India.
• Cultivating global cash cows like CHPT and Chief Telecom to enhance revenue streams, Volkswagen is investing $5 billion in Rivian to create an EV software joint venture, while Poland’s CEZAMAT boosts photonics and chip goals in Europe.
• Indian electronic component production value is set to increase 5x by 2030, but slow data center expansion may affect chip sales, according to Nvidia CEO. SiFive also unveils 4th-gen essential product line to drive innovation in embedded applications.

• Otsuka Holdings (4578 JP) announced FDA acceptance of indication expansion filing for Rexulti for the treatment of post-traumatic stress disorder. The FDA action date is February 8, 2025.
• Due to impairment loss associated with termination of a pipeline asset, the company has reduced operating and net profit guidance for 1H24. However, 1H24 revenue guidance has been raised.
• 2028 revenue is expected to reach ¥2.5T, an increase of ¥480B from 2023 results, that too after absorbing the negative impact of ~¥310B for loss of exclusivity of core drugs.

• Broadcom Inc. presented its second quarter fiscal year 2024 financial results, underscoring notable growth and strategic advancements, particularly through its semiconductor and software segments.
• The revenue recorded was $12.5 billion, a substantial 43% increase year-on-year, buoyed significantly by the inclusion of a full quarter’s financial contribution from VMware.
• Excluding this factor, revenue was up 12% from the previous year.

• Warner Bros. Discovery commenced the first quarter of 2024 with a focus on adjusting its operations for future sustainability in an industry marked by rapid disruption due to technological advancements.
• The company acknowledges the transformative necessities dictated by changing consumer behaviors and the technological landscape.
• On a positive note, Warner Bros. Discovery reported an encouraging increase in subscriber growth for its streaming service, Max, which saw an addition of 2 million subscribers across various regions, pushing its total Direct-to-Consumer (D2C) subscriber count towards 100 million.

• Revenue: JPY3.9bn (-4.1% YoY); Operating loss: JPY133mn; Recurring loss: JPY39mn; Net loss: JPY759mn.
• Revenue by product type: Adult diaper machinery JPY887mn (-48.8% YoY), Sanitary napkin machinery JPY1.1bn (+82.7% YoY).
• Gross profit margin rose to 18.0% from 12.9%; Net income improved due to JPY534mn gain on sale of securities.

• Coupang has commenced 2024 with a notable performance that underscores both strengths and areas in need of meticulous attention.
• During the first quarter, Coupang reported a robust 28% year-over-year growth in revenues in constant currency terms, attributed primarily to increased spending across customer cohorts, including its longest-standing customers.
• This points to successful customer retention and the appealing nature of its offerings.

• Clean Harbors reported a firm start to 2024, with various elements of the business performing strongly, though challenges linger primarily in pricing environments affecting some segments.
• The Environment Services (ES) division, a pivotal part of the company’s operations, showcased an impressive 10% revenue increase, bolstered by both organic growth and strategic mergers, including recent acquisitions like Thompson and HEPACO.
• With a particular strength displayed in technical services which saw an 11% spike driven by high operation volumes, ES stands out as a robust contributor to Clean Harbors’ overall financial health.

In our last BB Biotech (BION) review note, published in May 2024, we noted that the biotech sector was eagerly awaiting some key milestones, the most important being Alnylam Pharmaceuticals’ late-stage clinical trial of vutrisiran for patients with ATTR cardiomyopathy, a deadly heart disease. Alnylam, which comprised 4.3% of BION’s portfolio at end March 2024, released very positive, statistically significant, Phase III trial results this week. Assuming regulatory clearance, Alnylam expects that vutrisiran has the potential to become the new standard of care for the treatment of this disease, driving substantial future growth for the company. These results may have favourable implications for sentiment across the broader global biotech sector, and for Ionis Pharmaceuticals, BION’s largest portfolio position, which is also developing gene-silencing technology.

• Cover Corp, a leading talent management company in the rapidly growing VTuber industry.
• They’re considered the most prestigious agency and should attract the best talent.
• Superior Underlying Performance Metrics: Cover boasts superior key performance indicators (KPIs) compared to their main competitor Anycolor, including higher engagement metrics like subscribers, hours watched, and viewership.

• Taiwan Shares Fall With Nvidia… SK Hynix HBM DRAM with Global Unichip? Taiwan’s Vietnam Shift Continues… Broadcom Developing an AI Chip with Bytedance
• TechChain Insights: Call with Elan Micro; AI PC Significant Uptake 4Q24/1H25; Supply Chain Preparing 
• UMC (2303.TT; UMC.US): The Outlook for 3Q24 Has Reached a Slightly Upside QoQ. 

• With emerging centers scaling up and established centers growing steadily, HCG’s profitability is growing strong. HCG’s Q4FY24 PBT grew to INR 28cr vs INR 13cr YoY and INR 3cr QoQ. 
• With the patient mix improving for emerging centers with growing vintage, ARPOB for emerging centers has crossed INR 40000, a rise of 12.2% YoY.
• We estimate that by FY26, HCG’s PAT could exceed INR 260cr, leading us to value HCG at a market cap of around INR 10000cr at 38x+ FY26 exit P/E.

• We interact with a few business partners of Eureka Forbes (EUREKAFO IN)  to understand the latest on-ground business developments.
• Key areas that are probed include feedback on product quality and innovation, attachment rates for AMC services, key drivers of volume, improvements in service quality, and product premiumization.
• Based on our interactions, it is quite evident that the company is not interested in developing its offline sales channels, i.e., the franchises.

• The FMCG business has been now sustaining an annualized revenue run-rate of INR 500cr+. Q4FY24 FMCG revenue was INR 135cr+, similar to Q3FY24 and a growth of 30%+ YoY.
• Firstsource Solutions (“Firstsource”) , the BPO business, has been sustaining its recovery after a lull period for two years. Its revenue grew 4.2% QoQ and 4.5% YoY in constant currency.
• The Sports business revenue continue to be dominated by IPL. Having played three seasons now, RPSGV’s IPL franchise, Lucknow Super Giants (LSG), has made its place and holds significant value.

• Taiwan is utilizing AI supercomputers for medical and life science innovations, showcasing a commitment to technological advancement in those fields.
• Wistron is making a significant investment of $24.5M for a new factory in Vietnam, indicating a desire to expand production capabilities in the region for potential economic growth.
• Samsung is poised to overtake Apple in Taiwan’s mobile market by June, highlighting the company’s competitive edge and potential dominance in the industry.

• Expect Micron to report strength in AI, highlight the company’s HBM efforts, and quote McKinsey’s trillion-dollar forecast in their earnings call tomorrow
• Although Nvidia’s growth has really helped the DRAM market, along with 2023 CapEx cuts, there are important concerns of double-ordering which could lead to a collapse soon
• Semiconductor market revenues have leveled off since December 2023, hinting a return to more normal growth for the rest of the year

• Exceeding our upgraded FY24 PAT estimate of INR 350cr+, Nesco reported PAT of INR 363cr, led by Q4Y24 PAT of INR 105cr, a rise of 24% YoY and 12%+ QoQ.
• Q4FY24 revenues grew 6%+ QoQ and 20%+ YoY. Growth was driven by BEC where revenues grew 6% QoQ and 31%+ YoY. IT Park revenue grew 2% QoQ and 13% YoY.
• For FY25, we estimate that Nesco could post a PAT of INR 420cr+. Per our FY25 exit P/E of 26x+, Nesco could be valued at around INR 11000cr.

• ZJLD Group (6979 HK) held its annual general meeting last Friday (June 21). 
• The share price is down 21% in the last 30 days, mainly due to a major sector pullback.
• I continue to expect 20% net profit growth for the company in 2024E.  The company is trading at 13x 2024E PE which I believe is attractive. 

• Pharmaessentia Corp (6446 TT) reported strong 1Q24 result, with increasing revenue and declining operating expenses. Revenue increased 86% YoY, gross margin (88%) improved, and operating expenses declined 3% YoY.
• The company achieved operating profit (NT$18M) for the first time in 1Q24. Net profit reached NT$330M in 1Q24, versus net profit of NT$315M for 1H23.
• Approval of Besremi in additional countries, especially China, data readouts from late-stage ET trials, and accelerating  revenue as well as improving profitability remain the near-term catalysts.

• Trading comfortably through the Partial Offer terms, Sun Corp (6736 JP) may still do nothing with its Cellebrite DI (CLBT US) holding towards narrowing the NAV discount.
• Preceding my comments on Sun Corp are the current setup/unwind tables for Asia-Pacific Holdcos.
• These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation >20%.

• Mega cap stocks like Nvidia, Alphabet, and Microsoft surpass lofty market expectations, in the latest earnings season leading to continued rallies. 
• Profits from AI innovations are accumulating predominantly at the bottom of the supply chain, benefiting large hardware and cloud service providers. 
• Smaller tech companies, including Salesforce, MongoDB, and Dell, have experienced sharp corrections due to lofty expectations and their limited capacity to generate significant AI revenue.

• Kama Holdings (KHL IN)is available at 80% discount to its NAV.
• Kama Holdings (KHL IN) is Holding company of SRF Ltd (SRF IN), which has tailwind across segments.
• If the discount were to narrow from 81% to 56%, the price of Kama Holdings (KHL IN) could potentially double, assuming all other factors remain constant.

• Asics has demonstrated impressive growth in gross profit margins, as evidenced by 4.3ppt YoY improvement in Q1 to 54.5%
• Asics has been successful in growing market share and enhancing its brand strength
• For FY2024, we now forecast a 10% YoY increase in sales to ¥628 billion and a 46% rise in OP to ¥79 billion (prev: ¥ 71b)

• Midea Real Estate Holding (3990 HK) announced last night a proposal for distribution in specie of the property development business to shareholders.
• The proposal allows shareholders to select between receiving pro rata shares in the PrivateCo, or the cash alternative at HKD5.90 per share, a 57% premium to last close at HKD3.75. 
• I believe this is a good deal for minority shareholders.  The company (ex. property development business) will continue to be listed on the HKSE after the distribution. 

• Former TSMC R&D director Konrad Young advocates for a partnership between Taiwan and the UK in quantum technology.
• Chinese car brands attract young Thai consumers with innovative smart cockpit features, winning over the market.
• Xiaomi implements strategic changes in India after a decade of entering the market, adapting to new trends and demands.

• While current underlying demand has yet to show signs of a strong recovery, progress has been made in inventory adjustments in the distribution supply chain, and TOREX expects a recovery in sales from the 2H of 2024, and the top priority for this term is strengthening sales expansion initiatives.
• Regarding the initial FY25/3 consolidated OP forecast, in addition to a contribution of ¥1,150mn from the +8.7% YoY increase in net sales, the decrease of ¥2,370mn in inventory write-downs in manufacturing cost of sales will drive a strong recovery in OP.
• Although capex is set to decline -31.9% YoY to ¥3,600mn (mainly for equipment being installed in the new Phenitec Kagoshima Fab clean room), having peaked out last term, depreciation will increase +27.7% YoY to ¥3,000mn as the new clean room has started operations. 

• China Gas Holdings (384 HK)‘s FY24 result is distorted by non-recurring items and provisions. Adjusted net profit, however, has declined by only 4.3%, and is only 2.6% below consensus. 
• FY25 guidance looks positive as a 6% increase in dollar margin and a 5% increase in gas volume are expected. The Apr-May operating figures support such projections.
• China Gas maintained its DPS despite a drop in reported profit, showcasing its confidence. Assuming the same dividend in FY25 and FY26, it will sit on a yield of 7%. 

• Nu Ride is a SPAC with $2.5 per share in cash and $1 billion in net operating losses
• Company has $2.9 per share of net cash and $2.0 per share of perpetual preferred held by Foxconn
• Ongoing litigation actions against Foxconn and former executives could result in potential increase in net cash value to $4.5 per share

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.

• LNC is poised for growth in the U.S. life insurance market due to improving fundamentals, positive earnings per share revisions, and an attractive valuation
• Despite past challenges with capital and credibility, management has successfully addressed issues and reshaped the business, leading to a clear roadmap for future growth
• With potential catalysts on the horizon, LNC has significant upside potential and the possibility of a shift in investor sentiment in the near future.

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.

• TSMC: +16.1% Premium, After Sharp Drop, Will Be Interesting to See If Spread Will Remain Within the Recent ~15-25% Range
• ASE: +7.4% Premium; Can Consider Going Long the Spread Given Recent Trading Range
• ChipMOS: -2.4% Discount Repesents Extreme Low of End of Range; Can Consider Going Long the Spread

• With more foreign countries being granted visa-free visits to China, Cathay Pacific Airways (293 HK) will benefit from more transfer traffic via Hong Kong.
• Recovery is decent with passenger traffic rising 37.5% in 5M24. CX’s capacity already returned to 80% of pre-pandemic in 2Q24, and this will reach 100% in 1Q25. 
• YTD, CX is still a laggard relative to many global airlines. Its P/B valuation is not stretched at 0.8x, given ROE of 11% over the next 3 years.  

• Retail pharmacies experienced performance decline in April and May. Due to negative policies, retail pharmacies will experience industry clearance. Therefore, we do not recommend investors to bottom-fish related stocks now.
• There is a logic to biotech’s performance from 2023 to present.The clearer the path of sustainable development, the better the stock price performance. They can be divided into three types.
• YSB faces big risks and the outlook is not optimistic. If the final valuation of the Company is lower than China Resources Pharmaceutical and Shanghai Pharmaceuticals, we wouldn’t be too surprised.

• Kuaishou and Bilibili’s GMV surged YoY during “June 18” sales.
• World of Warcraft: Wrath of the Lich King, will formally start on June 27.
• GAC Honda Automobile Ltd planned to dismiss 1700 employees, about 14% of total.

• Everest Group has sustainable and improving 15-20% ROEs
• Stock trades at a valuation of 1.2x book and 6x P/E
• Poised for future success with accelerating casualty pricing, stable property-cat rates, and potential for hitting 90 combined ratio target

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.

• Acotec’s 2023 performance was unsatisfactory. Core products suffered weak growth. Positive trend of continuing to optimize revenue structure was broken. Sales of latecomers’ competing products would expand rapidly in 2024/2025. 
• Revenue proportion in overseas markets was still below 5% in 2023. If no highlights in Acotec’s cooperation with Boston Scientific in 2024, this collaboration could be considered a failure.
• Due to VBP, margin could further decline. If it’s just the current situation, then Acotec is not as good as Zylox-Tonbridge. So, its valuation should also be lower than Zylox-Tonbridge.

• ACRC is a biotech pharma micro-cap company trading below its net cash value
• Downsized workforce after a failed phase 2 trial, CEO and CMO left prompting strategic evaluation
• Activist investors involved, potential for monetization of stakes to benefit shareholders.

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

• Erajaya Swasembada (ERAA IJ) is back on track with its handset business, with stronger volume growth driven by more affordable models from Infinix and Techno brands.
• The company’s buildout of its electrical retailer Erablue, a JV with Mobile World, is gaining momentum and should become a significant growth driver along with Grand Lucky supermarket.
• Erajaya will slow its store buildout this year as it focuses on productivity ny it still expected to add 200 new stores over in Indonesia. Valuation is attractive.

• Never a pioneer, instead a perfectionist in delivering mind bending experience. That’s what Apple has stood for traditionally. Can it repeat the act in the Gen AI era? 
• Siri to have advanced language comprehension and Writing Tools to deliver useful features to drive convenience and productivity. 
• Private Cloud Compute ensures user data remains encrypted and secure. Reflects Apple’s commitment to privacy amidst growing concerns surrounding data misuse.

• We presume Silergy is likely to see demand recovery or inventory rebuilding starting from 2Q24.
• Silergy’s wafer demand is projected to increase by 30-40% QoQ from 2Q24 onwards.  
• Silergy’s primary focus remains on China, Taiwan, and Korea, but the US market is promising for potential growth.  

• United Microelectron Sp Adr (UMC US) 3Q24 outlook could be showing a slightly upside quarter over quarter and the gross margin is approaching to ~30%.
• We estimate that UMC’s overall utilization in 3Q24 will be around 65-70%, with 12” at 70-75% and 8” at 60%.
• UMC is benefiting from Novatek shipping OLED DDIC to Apple (AAPL US) in 3Q24.

• We expect Novatek Microelectronics Corp (3034 TT) to achieve approximately a 5% QoQ growth in revenue and relatively flat gross margin (GM) QoQ in 3Q24.
• Semiconductor Manufacturing International Corp (SMIC) (981 HK) and HLMC are capable of producing DDICs at 40nm and below.
• Novatek is experiencing a decline in demand for 55nm Touch with Display Driver (TDDI) in 3Q24.

• Growth of outbound Chinese travel demand strong in May as HK, Macau slow
• Domestic travel demand also showed solid growth in May and early June
• Trip.com appears reasonably cheap now that it’s dipped below US$50, BUY

• Forward looking fare data suggests pricing further weakening for the European flag carriers on long haul in particular.
• We expect Lufthansa to miss EBIT guidance by 30% in 2024 while we also cut Air France-KLM 2024 EBIT by 15%.
• IAG stands out as most resilient, with BA seemingly outperforming peer pricing on the Transatlantic.

• As Lufthansa nears European Commission approval for its investment in ITA Airways, as widely reported this week, we highlight our analysis of the Italian carrier.
• In a strong year for the global industry, heavy 2023 losses prompt questions over ITA’s financial sustainability with Lufthansa support.
• We highlight that ITA’s problems are in revenue generation rather than operational efficiency.

• Edelweiss reported a strong Q4FY24 led by robust performance across businesses. The asset management business continues to be the lead performer. Insurance businesses are also growing at an industry-leading pace.
• Most notably, the credit business seems to be gaining momentum now, led by co-lending. MSME co-lending disbursements tripled while housing finance (HFC) co-lending disbursements doubled in FY24. 
• To unlock value and reduce debt at the corporate level, Edelweiss is planning a minority stake sale in the Alternative Asset Management business.

• The stock price has corrected to the anticipated level and rebounded
• Dates announced for acceptance and payment for the rights issue
• There may be more weakness once the rights shares start  trading

Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

• Burford Capital is a leading provider of litigation finance with a market capitalization of $2.5bn and strong revenue and profit figures
• The company, led by innovative founders, has received positive assessments from customers, ex-employees, law firms, and peers
• Burford has a proven track record of competitive advantage in revenue, market share, innovation, customer service, and underwriting skill, with potential for improved returns on capital and vast growth opportunities.

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

• Back in 2016, IMS Health and Quintiles went through a merger of equals to form “QuintilesIMS” which was later renamed to be “IQVIA” in 2017.
• “I” and “Q” stand for IMS Health and Quintiles respectively and “VIA” means “by way of”.
• Since IMS and Quintiles both used to be separate public companies, let me discuss these two businesses separately at first before getting into the details of their post-merger status.

• Volkswagen’s US ADRs (VWAPY) have underperformed in the past 5 years, despite a 3% increase with dividends
• Company’s growth guidance and margins are weaker compared to peers, leading to undervaluation of stock
• Trading at low multiples of forward earnings and free cash flow, recent free cash flow guidance for 2024 was unimpressive; preferred shares receive extra dividends but no voting rights

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.

Games Workshop Group’s FY24 trading update provided a nice surprise on the revenue side, broadly equally split between core and licensing, and an even nicer surprise for PBT, suggesting an improvement in gross margin. We have upgraded our FY24 estimates to be consistent with the indicated figures and marginally increase our estimates for FY25, which reverts to a 52-week period accounting period.

• On May 9, 2024, Migalo Holdings Inc. (hereafter, the Company) announced its full- year FY2024/3 earnings results.
• Sales rose 14.5% YoY to ¥42,672 mn, and operating profit fell 14.4% YoY to ¥2,500 mn, largely in line with the Company’s full-year forecast calling for sales to rise 12.7% YoY to ¥42,000 mn and operating profit to drop 14.4% YoY to ¥2,500 mn.
• The Company will pay a year-end dividend of ¥45 per share, including a commemorative dividend of ¥5 per share to celebrate the 20th anniversary of the founding of its predecessor, Property Agent, Inc.

• RaaS Research Group has published an update report on purpose-led proptech Rent.com.au (ASX:RNT) following its fully-underwritten entitlement offer to raise $2.5m at $0.02/share, with one quoted option for every two shares issued.
• Separately and on June 3, RNT provided a trading update in which it announced that RentPay’s customers at the end of May were up 64% to 9,271.
• We have incorporated the capital raise in our forecasts, but having already modelled an additional $2.5m raise in H2 FY25, the impact to our forecasts is only due at the EPS line.

• BCG is the leading online classified group in the Baltics with 14 portals across three countries
• Management team focused on improving monetization for high revenue growth
• Expected significant value per share growth with exposure to high-growth Baltic markets and plans to increase take-rates, presenting an intriguing opportunity for investors

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

• Taste Gourmet (8371 HK) reported revenues up 37% YoY and profits up 29% YoY (lower than our expectation of 39% profit growth) due to a slightly weaker-than-expected Q4.
• Dividends for H2 were 7.4 cents/share (overall FY24:12.9 cents), implying an 8.1% dividend yield. Net cash on the balance sheet was 143 mn HKD (23% of market cap).
• Trading at 6.7x PE FY24 (March end) and with an excellent execution track record, we believe that the company will be able to post more robust numbers in FY25. 

• Despite missing market consensus, Sa Sa International Hldgs (178 HK)‘s FY24 result still have silver linings. Its resumption of dividends with a 70% payout ratio is welcoming.
• Tax credit in 2H23 has distorted comparison. At pre-tax level, 2H24 profit has gone up by 29.5%. Cost management is solid, generating a 0.9pp FY24 operating margin expansion. 
• While overall 1Q25 sales have dropped, mainland China sales surged 83.9%. The macro environment should have bottomed and government efforts to attract tourists will pay off.  

• Production problems of Vyvanse generics seem to be largely resolved with nine of the ten suppliers back in stock.
• Safety concerns with Takeda’s approved psoriasis competitor does raise further concerns as they are both TYK-2 inhibitors.
• The company’s $900 m big restructure and cited areas for margin improvement are not “convincing” and lack detail.   

• We hosted a conference call with Elan Microelectronics management; We view the company as a Structural Long position for the AI PC upgrade cycle.
• From the company’s perspective, significant impact from AI PC demand will come but not until 4Q24E or 1H25E. However, supply chain excess inventory improved and prepping for upcycle.
• An estimated 90% of AI PC models launched at CES 2024 use Elan’s products in their design; Elan well positioned for the upcycle and entrenching its position. Maintain Structural Long.

• While Elizabeth Kan barely survived the AGM vote, ASM has effectively mobilized minority shareholders.
• Lazard (owns 15% of CMCDI) probably voted alongside ASM (owns 9%). Other than China Merchants Group and Victor Chu, almost no “outside shareholders” voted in favor of Kan, .
• The next battleground is a vote in November when CMCDI needs to renew its investment management agreement. Intense behind-the-scene negotiations are expected, given the bargaining power ASM now demonstrated.

• Top Glove Corp (TOPG MK) achieved 16% QoQ revenue growth in 3QFY24, on 13% sequential volume increase and higher ASP. 3QFY24 operational loss reduced to RM34M from RM59M in 2QFY24.
• Considering the current demand and supply condition, Top Glove expects the ASP to further increase. The company aims to recover its EBITDA margin to pre-pandemic levels of 15% by FY26.
• With rising import alert and expected tariff increase on Chinese manufacturers, the US demand may shift from China to Malaysia. Top Glove is poised to benefit from potential trade diversion.

• TYC Brother Industrial is set to dominate the NEV market with a US plant scheduled to be operational by the first quarter of 2025.
• Despite sanctions, a Russian company has introduced the MP21 SBC to rival the Raspberry Pi 5, showcasing the competitiveness of the technology market.
• Cerebras and Dell have joined forces to challenge Nvidia in the AI market, highlighting the growth of AI accelerator technology for servers. Taiwan’s carbon market is advancing with new initiatives and regulations, while the UK collaborates with Taiwan to lead in semiconductors at Semi-Impact forum. India is ramping up cobalt supply efforts to meet growing demand.

• Approaching a transformational phase – MIXI Inc. is a digital content company generating earnings from its ‘MONSTER STRIKE’ mobile gaming franchise.
• Operating in a mature domestic gaming market, the company has successfully diversified into lifestyle and sports, but to date has experienced limited earnings contribution.
• We believe this is about to change, driven by the new monetization strategy for the ‘FamilyAlbum’ video and photo- sharing service app in FY3/25. 

• Perfect Corp. provides an AI and machine learning based B2B SaaS platform for virtual try on and marketing of beauty and fashion products as well as six mobile apps sold B2C for makeup suggestions, try-on, tutorials, photo and video editing and most recently, Gen AI creation and editing.
• It is expanding its offering to new verticals and has strong IP as well as the largest database for AI training in the industry.
• It has a dominant market share and serves almost all the major beauty brands worldwide.

• SharkNinja is a newly listed company with popular consumer brands Shark and Ninja
• Despite challenges in brand-building and international markets, the company achieved a 15% operating margin in 2023
• Analysts project an annualized return of 18-20% based on current earnings yield and expected organic earnings growth

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

• Understanding the audience is the number one rule in content creation and building relationships is important globally
• Min Yong Kim started her career in food and nutrition but transitioned to the entertainment industry, eventually joining Netflix
• Lessons learned include the importance of knowing your audience and the shift in thinking about content from traditional media to digital platforms

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

• Apple announced Apple intelligence, integrating AI in a feature-centric way for on-device use
• The approach focused on useful features rather than spotlighting AI technology
• Apple’s implementation of AI on iPhone 15 Pro and newer devices showcases their focus on personal intelligence and user-centric design

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

• All the business fundamentals continue to trend in the right direction
• The sector has sold off with the general commodity sell-off
• Investors not giving the benefit of the doubt to future oil demand

• West China Cement (2233 HK) is a cement company based in Western China.  Sales volume in Africa in 2023 was 2.6 million tons, up 117% from 1.2 million tons in 2022. 
• The company has 2 million tons of cement capacity in Mozambique, 1.5 million tons in Congo, and 1.3 million tons in Ethiopia. 
• The company is trading at 4x 2024E PE.  I believe the risk reward is quite high here. 

• Money Forward’s share price has declined by around 16% since reporting Q1 results.
• The company will report Q2 results in early July. We expect continued solid momentum
• We believe the stock price has around 30% upside potential to our target price of ¥6,600

• Fujitsu launches GenAI platform for advanced AI capabilities, enhancing customization options for users.
• CuspAI receives US$30M funding, partners with Geoffrey Hinton to address climate change using advanced materials.
• Global IC fab capacity expected to grow by 6% in 2024 and 7% in 2025, with Taiwan playing a key role in AI innovation.

• Practice of committing to ownership, governance, and leadership alignment with companies similar to other respected examples like Berkshire Hathaway and the Walnbergs in Sweden
• Focus on long-term thinking, staying current through innovation, and renewing oneself to ensure enduring success in business
• Importance of family ownership, stability, and long-term thinking in combination with the benefits of being a public company; John Elkann’s background and path to leadership within the family-owned company.

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

• We update twelve Japanese regional banks, and add two new names, to target beneficiaries of the improving interest rate outlook; also banks with attractive credit quality, capital adequacy and valuations
• We identify the value of equity holdings for disposal among these banks; the lack of near-term easing prospects at the US Fed should support JGB yields and domestic bank valuations
• We add smaller cap Juroku Financial to our buy list of Tokyo Kiraboshi Financial, Gunma Bank and higher risk option Suruga Bank

• Deep-Sea container rates surged in May, yielding best read since June 2022
• But volume growth into North American WC ports slowed noticeably…
• We believe Q224 results will impress, and still like our Long/Short pairs

• Short recommendation for IRM due to reliance on core document storage business and highly leveraged balance sheet
• Weak cash flow generation and recurring addbacks in adjusted metrics make stock appear more expensive than it is
• Concerns about terminal value and ability to meet cash needs raise doubts about long-term viability of the business

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.

• Taiwan’s wafer foundry industry set to expand in Q2 2024 with potential government and financial support.
• London Tech Week 2024 showcases AI, semiconductors, deep tech, startups, and global tech partnerships.
• Quanta sees profits double despite workforce reduction, while Intel invests in Luxshare in China to boost market presence.

• Computex showed how Micron has successfully leap-frogged SK Hynix and Samsung in HBM DRAM for AI Servers.
• Now, older ‘boring’ DRAM prices could surge as HBM DRAM production is voraciously consuming memory fab capacity.
• Why Nanya Tech shares could surge higher — A DRAM memory trade for those who don’t want to chase steep 52-week highs in Micron and SK Hynix.

• HBM revenue on track to jump from a few hundred million in 2024 to “multiple” billions in 2025
• Micron expects to become FCF positive in the second half of their fiscal 2024 and to have a record revenue year in their fiscal 2025. 
• Micron’s is doing custom work on their HBM solutions. Customers are signing LTAs with defined pricing. This could easily spread to Micron’s non-HBM products also. 

• In FY24, Morepen Laboratories (MORE IN) achieved revenue, EBITDA, and PAT growth of 20%, 101% and 150%, YoY, respectively, driven by medical devices and API businesses.
• Business has stabilized in FY24 and Morepen is seeing fresh buying of medical devices. With expanding capacity, glucometer and BP monitor are expected to maintain ~30% growth momentum.
• Morepen aims to expand API product portfolio and geographic reach, while maintaining global leadership positioning in six key widely used API products.

• Cofco Joycome (1610 HK) is in a good position to benefit from the hog cycle upturn. China’s anti-dumping investigation into imported pork from the EU may also disrupt supply.
• Its average hog price has increased by 12.7% YTD and by 1.6% YoY for 5M24. Market hog price further surged by 10.4% in the week of 12-Jun from end-May.
• Its P/B of 0.78x is inexpensive at 1SD below the 5-year average. Its peers like Muyuan Foodstuff (002714 CH) and Wens Foodstuff Group (300498 CH) are also interesting. 

• Globalfoundries Inc. is an American semiconductor foundry spun out of Advanced Micro Devices in 2009.
• The company operates four fabs in the US, Germany, and Singapore, making it the only scaled pure-play outside of China and Taiwan.
• In 2018, Globalfoundries shifted its focus to producing lagging-edge, feature-rich semiconductors after halting investment in leading-edge chip development.

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 the first quarter of 2024, 3M reported significant achievements and detailed the financial impacts of strategic decisions, including the successful spin-off of its Health Care business, now known as Solventum.
• The separation into two distinct entities is designed to enhance focused growth and improve capital allocation tailored to different market dynamics, thereby representing a strategic realignment to boost shareholder value.
• This quarter also saw the company addressing its legal challenges with settlements in the Public Water Suppliers and Combat Arms litigation, resulting in predictable future cash flows related to these issues.

• Pathward Financial, Inc. is a BaaS company that partners with prepaid card issuers to provide prepaid card services to consumers and businesses
• Prepaid cards are used for various purposes such as fintech apps, payroll, gift cards, or rebates, with Pathward acting as the banking sponsor for these programs
• Pathward earns revenue through collecting deposits, investing in higher-yielding assets, and earning revenue from payments such as interchange fees, with impressive financial metrics including an adjusted NIM of 4.5% and ROTE of 30%

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

• Coherent Corp. reported a solid third-quarter performance for Fiscal Year 2024, signaling strong underlying business dynamics despite some operational hitches.
• The company emphasized a noteworthy sequential revenue increase of almost 7% and an almost 50% rise in non-GAAP EPS which marked significant growth.
• Operating cash flow stood robust at $117 million, with a substantial portion directed towards capital investments and debt repayment.

• Kuok Khoon Hong and George Yeo boost Wilmar stakes Institutions were net sellers of Singapore stocks in the five trading sessions up to Jun 13, with S$3.6 million of net institutional outflow, as 23 primary-listed companies conducted buybacks with a total consideration of S$88.8 million.
• Stamford Land Corp executive chairman Ow Chio Kiat increased his total interest from 45.86 to 45.88 per cent, acquiring 246,800 shares at S$0.40 a share between Jun 6 and 11.

• Archean Chemical Industries (ACI IN) is largest producer of Bromine and largest exporter of Bromine from India.
• The company is doing brownfield and greenfield capex in Bromine derivatives which are Margin accretive.
• Archean Chemical Industries (ACI IN)  is confident about 30% volume growth in FY25.

• Short term borrowing rose 2.3x in the past four quarters, alongside rising interest rates
• During this time, long term borrowings were actually down, so no locking in of low rates
• As such, Chiba is not fully, or hardly benefiting from BOJ policy changes, with NIM down

• Prodia (PRDA IJ) suffered from a seasonal downturn in 1Q2024 as Lebaran slowed its testing volumes from corporates, with opex related to Prodia Digital impacting margins in the quarter.
• The company’s testing mix is shifting in a meaningful way towards esoteric testing, which commands significantly higher margins plus it is building out its genomic testing, which yields higher returns.
• Investment in Prodia Digital should slow in the coming quarters, helping to improve margins. with new outlets driving revenues. Valuations are unjustifiably low with 2Q2024 numbers likely to be positive.

• It has come to my attention that Lufax management has recently altered the terms of their convertible debt: Based on the terms and conditions of the Ping An Convertible Promissory Notes, as a result of the Special Dividend, the Conversion Price will be adjusted from US$12.
• Based on the terms and conditions of the Ping An Convertible Promissory Notes, as a result of the Special Dividend, the Conversion Price will be adjusted from US$12.76 per Share as at the date of this circular to US$2.32 per Share upon settlement of the Special Dividend, and thus, upon full conversion, the Ping An Convertible Promissory Notes can be converted into a maximum number of 421,077,586 Shares (the “Conversion Shares”).
• The Company considers that the adjustment formula is in line with market practice for anti-dilution provisions in convertible securities.

• 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), The Keepers Holdings (KEEPR PM), Taste Gourmet (8371 HK), Uchi Technologies (UCHI MK), and Ginebra San Miguel (GSMI PM).
• While HK stocks have weak data, we persist in being long these names, keeping in mind their long-term outlook and deep value. 

• TSMC’s 3nm Shortage: Capacity Filled Until 2026 Amid Surging Demand; Strategic Price Hikes Coming Soon
• Top Gainers/Losers: Taiwan Tech Rallies Alongside TSMC, Apple, Nvidia, ARM Strength
• Samsung Unveils Pathway to Catch Up With TSMC in the AI Foundry Race

• Miroku Jyoho Service (TSE:9928) , which offers on-premises, hybrid (IaaS) and cloud accounting software to Japanese enterprises of various sizes.
• Our purchase is centred around the business achieving further transition to the cloud, allowing for substantial margin improvement through the accumulation of high gross margin SaaS revenue.
• This transition has impacted firm profitability in the short term due to the shift in revenue recognition as quoted below by the company

• H3C and Foxconn partner in Malaysia for data center investment; Tsinghua Unigroup continues acquisitions in the tech industry.
• Chinese automakers urged to invest in cleaner technologies, form strategic partnerships, and comply with EU regulations under new EV tariffs.
• Microsoft & Qualcomm exceed pre-orders with AI-powered Copilot+ PC; Hyundai plans to list Indian arm; SEMICON India to showcase advancements in semiconductor industry.

• Avant was founded in 1997 by the current CEO Tetsuji Morikawa and is a Japanese holding company of financial and non-financial software which have the collective goal of assisting its clientele to increase corporate value.
• This includes ‘Diva’ as Japan’s foremost (43% market share) consolidated accounting software and board meetings platform in addition to ‘Avant’, a management system for corporate value enhancement through consolidation of information (Avant Cruise) , charting (Avant Chart) , and corporate value enhancement (Avant Compass).
• Lastly, there is ‘Zeal’ which includes several non-financial platforms that help organise and integrate (with Avant Cruise) from external sources. And interestingly, Avant also owns and operates Internet Disclosure Co, which runs Kaijinet, a site I have frequently visited over the years.

• This is the first blog post on the Hurdle Rate website, a series of blog posts which I intend to cover specific topics rather than unit trust investments.
• From time to time I may consider company deep dives, but predominately I want to make these posts more specific in nature around the global landscape in professional and financial services.
• Today’s post is going to talk about the recent bombshell that is Xero’s price hikes, a controversial topic here in Australia for the accounting industry, and a perfect start to the blogroll given my background and focus.