Category

Daily Briefs

Jun 08
0

Daily Brief Industrials: Kantsu and more

By | Daily Briefs, Industrials

In today’s briefing:

  • Full Report – Kantsu (9326 JP)

Full Report – Kantsu (9326 JP)

By Sessa Investment Research

  • KANTSU Co., Ltd. (hereafter, “Kantsu”) is a warehouse logistics specialist providing comprehensive logistics services, including warehousing, inventory management, and delivery of products sold by e-commerce (EC) and catalog businesses, handling approximately 12 million shipments per year.
  • The Company has also created a highly profitable business by selling its in-house developed IT systems that streamline operations to external customers.
  • In terms of sales and profits, the Company’s two main drivers are its Logistics Services Business and IT Automation Business.

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Jun 08
0

Daily Brief Financials: Bitcoin, NIFTY Index, UnipolSai SpA, Allstate Corp and more

By | Daily Briefs, Financials

In today’s briefing:

  • Crypto Moves #31 – Do Not Fear Mt. Gox Repayments
  • EQD | The NIFTY Swung Big But the Rally Could Continue For +2 Weeks
  • Unipol Gruppo/UnipolSai: Squeeze-Out and Spread
  • The Allstate Corporation: A Story Of Expansion through National General Integration! – Major Drivers

Crypto Moves #31 – Do Not Fear Mt. Gox Repayments

By Mads Eberhardt

  • It should come as no surprise that 2022 was rife with contagion in the crypto industry.
  • Numerous crypto companies went bankrupt, many due to fraud.
  • Now, the majority of these bankruptcy cases are nearing their conclusion, and some have already been completed, allowing creditors – primarily clients with assets stuck in these firms – to receive the remaining assets.

EQD | The NIFTY Swung Big But the Rally Could Continue For +2 Weeks

By Nico Rosti

  • The NIFTY Index has been swinging wildly as of lately, but the odds look good for a continuation of the rally at the moment.
  • The index is in a pattern where it can rally for 1-2 more weeks.
  • Wait for prices in the 23500/23700 resistance area before considering a SHORT trade.

Unipol Gruppo/UnipolSai: Squeeze-Out and Spread

By Jesus Rodriguez Aguilar

  • Unipol Gruppo S.p.A (UNI IM) has reached 95% of the share capital of UnipolSai SpA (US IM), therefore the conditions for the squeeze-out are met.
  • The dividend-adjusted offer price is €2.535. Unipol has three months from 26 April to implement the squeeze-out. The holding discount, as expected, has closed.
  • Spread to cash offer is 0.51%/3.85% (gross, annualized assuming settlement of squeeze-out by 26 July). The share alternative is now trading at a premium.

The Allstate Corporation: A Story Of Expansion through National General Integration! – Major Drivers

By Baptista Research

  • Allstate Corporation reported a strong financial performance in the first quarter of 2023, indicating a significant improvement in net income which reached $1.2 billion.
  • This results from effective execution of the auto insurance profit improvement plan, maintaining attractive margins in homeowners’ insurance, and experiencing lower catastrophe losses.
  • Net investment income also saw a notable increase of almost 33%, mainly due to repositioning into longer duration, higher fixed income yields, and improved performance-based valuations.

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Jun 08
0

Daily Brief Health Care: Centene Corp and more

By | Daily Briefs, Healthcare

In today’s briefing:

  • Centene Corporation: Leveraging Dual Eligibles in Medicare and Medicaid & Other Major Drivers

Centene Corporation: Leveraging Dual Eligibles in Medicare and Medicaid & Other Major Drivers

By Baptista Research

  • Centene Corporation reported its first quarter 2024 results, highlighting several positive developments and strategic maneuvers aimed at sustaining and enhancing its business operations.
  • The company achieved a higher-than-expected adjusted EPS of $2.26, prompting an upward revision in its full-year 2024 EPS guidance to over $6.80.
  • This performance signals a robust start to the year, attributed partly to significant operational improvements and strategic realignments.

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Jun 08
0

Daily Brief Consumer: Fonterra Shareholders Fund, Best Buy Co Inc, Gap Inc/The, Guess? Inc, BurgerFi International Inc, Burlington Stores, Hormel Foods, Kohl’s Corp, TSE Tokyo Price Index TOPIX, Ulta Beauty and more

By | Consumer, Daily Briefs

In today’s briefing:

  • Asian Dividend Gems: Fonterra Shareholders Fund
  • Best Buy Co.: How Are Strategically Using AI In The Business! – Major Drivers
  • The Gap Inc.: How Is Their Strategic Pivot In The Digital Era Yielding Results? – Major Drivers
  • Guess? Inc.: The Rag & Bone Acquisition Can Be A Game Changer? – Major Drivers
  • BurgerFi International: What Value Can It Extract If It Gets Acquired & What Makes It A Good Target? – Major Drivers
  • Burlington Stores Inc.: Growing Brand Mix & Elevated Assortments Catalyzing Growth! – Major Drivers
  • Hormel Foods Corporation: Growth In Foodservice & International Performance Warrants A Bullish Rating? – Major Drivers
  • Kohl’s Corporation: A Story Of Enhancing Gross Margins through Inventory Management! – Major Drivers
  • Higher Valuations Require Increased Return on Capital to Attract the Attention of Overseas Investors
  • Ulta Beauty Inc.: What Results Will The Gross Margin Management Efforts Yield In 2024

Asian Dividend Gems: Fonterra Shareholders Fund

By Douglas Kim

  • Fonterra Shareholders Fund’s dividend yield was 14.2% in 2023. Its dividend yield averaged 8.7% in the past three years. 
  • Fonterra Co-Operative Group, is a New Zealand based multinational dairy cooperative. Outside investors who are not allowed to hold shares in Fonterra Co-Operative Group can invest in Fonterra Shareholders Fund. 
  • In May 2024, Fonterra announced that it plans to sell off its consumer products businesses and concentrate on business to business sales as a dairy ingredients supplier.

Best Buy Co.: How Are Strategically Using AI In The Business! – Major Drivers

By Baptista Research

  • The first quarter fiscal 2025 earnings by Best Buy Co., Inc. demonstrated some mixed results.
  • On the positive side, it highlighted that the company had better-than-expected Q1 profitability through strong execution and preparation for future growth.
  • The company has been driving improvements in its priorities and its operational metrics.

The Gap Inc.: How Is Their Strategic Pivot In The Digital Era Yielding Results? – Major Drivers

By Baptista Research

  • The Gap Inc. reported strong first quarter results, exceeding expectations across key metrics, with market share gains and positive comparable sales across all brands.
  • The company’s first quarter performance reflected continued focus on its financial and operational priorities.
  • Comparable sales for the company grew by 3%, with positive comps for all brands.

Guess? Inc.: The Rag & Bone Acquisition Can Be A Game Changer? – Major Drivers

By Baptista Research

  • Guess?, Inc.’s Q1 fiscal 2025 showed a strong start to the year, with significant progress on operational, strategic, and financial objectives.
  • The company reported results for the first quarter exceeding expectations in revenues, operating earnings, and per share results.
  • Sales growth was recorded in each of their segments and gross margins expanded favorably impacting the bottom line.

BurgerFi International: What Value Can It Extract If It Gets Acquired & What Makes It A Good Target? – Major Drivers

By Baptista Research

  • BurgerFi International is currently examining a strategic decision involving the possible sale of the company.
  • This review comes in the wake of their reported financial outcomes for the first quarter of 2024.
  • Analyzing the financial data and strategic initiatives articulated during the earnings discussion can provide insights into the potential advantages and challenges related to such an acquisition.

Burlington Stores Inc.: Growing Brand Mix & Elevated Assortments Catalyzing Growth! – Major Drivers

By Baptista Research

  • In its recent earnings, Burlington Stores reported revenues and earnings growth for the first quarter of 2024.
  • Total sales grew by 11% compared to the same quarter in the previous year, driven by new store openings and comparable store sales growth.
  • The company opened 14 new stores during the quarter, expanding the total count to 1,021 stores.

Hormel Foods Corporation: Growth In Foodservice & International Performance Warrants A Bullish Rating? – Major Drivers

By Baptista Research

  • Hormel Foods Corporation, a multinational manufacturer of food and meat products, delivered solid performance in the first half of the year, with consecutive quarters of better-than-expected earnings, a major improvement in operating cash flows, and strength in the food services segment.
  • The company has seen a recovery in its international business, achieved stability in overall volumes, and made progress on its strategic initiatives aimed at propelling long-term growth and shareholder returns.
  • The corporation, best known for its SPAM, Hormel, and Black Label foods, is on track to meet its three-year improvement targets.

Kohl’s Corporation: A Story Of Enhancing Gross Margins through Inventory Management! – Major Drivers

By Baptista Research

  • Kohl’s Corporation announced its first-quarter 2024 earnings, delivering results that fell short of the company’s expectations.
  • The company faced a difficult comparison with last year’s profits due to last year’s elevated clearance activity, which generated a significant drag on comparative sales in Q1.
  • While clearance is generally a headwind for the business, the level going into 2023 was described as unique and unlikely to be repeated.

Higher Valuations Require Increased Return on Capital to Attract the Attention of Overseas Investors

By Aki Matsumoto

  • Even with the 9% increase in share repurchases, the high level of cash on hand will likely be further built up, given the increase in cash flow.
  • Companies that have increased their valuations over the past year have further increased their valuations by growing their traditionally high valuations and ROE and ROA.
  • Cash allocation is a major challenge for all companies. Many companies have a payout ratio of 30%, and they have too much cash on hand relative to sales.

Ulta Beauty Inc.: What Results Will The Gross Margin Management Efforts Yield In 2024

By Baptista Research

  • The latest earnings of Ulta Beauty show that in Q1 2024, the company reported a 3.5% rise in net sales to $2.7 billion, and 1.6% growth in comp sales.
  • Also, the diluted earnings per share were $6.47.
  • However, amid a rapidly shifting marketplace, the company has adjusted its expectations for the rest of the year.

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Jun 07
0

Daily Brief Quantitative Analysis: ASX Short Interest Weekly (May 31st): Wisetech Global and more

By | Daily Briefs, Quantitative Analysis

In today’s briefing:

  • ASX Short Interest Weekly (May 31st): Wisetech Global, Pro Medicus, CSL, IDP Education, Boral

ASX Short Interest Weekly (May 31st): Wisetech Global, Pro Medicus, CSL, IDP Education, Boral

By Ke Yan, CFA, FRM

  • We analyzed the changes in short interest of ASX Stocks as of May 31st (reported today) which has an aggregated short interest worth USD19.4bn.
  • We tabulate league table for top short by value and short as multiple of ADT, as well as weekly increases & decreases in short value, short as multiple of ADT.
  • We highlight short interest changes in Wisetech Global, Pro Medicus, CSL, IDP Education, Boral, Woodside Energy, Mineral Resource.

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Jun 07
0

Daily Brief ECM: What Did FSS Point Out to Shift Up? & What Impact Would It Have on Bookbuilding Sentiment? and more

By | Daily Briefs, ECM

In today’s briefing:

  • What Did FSS Point Out to Shift Up? & What Impact Would It Have on Bookbuilding Sentiment?
  • Guzman Y Gomez IPO – The Positives – Network Growing, Sales Have Outpaced Network Growth
  • QuantumPharm IPO – Most of the Potential Has Already Been Baked In
  • Guzman Y Gomez IPO – The Negatives – Lawsuits and Management Churn

What Did FSS Point Out to Shift Up? & What Impact Would It Have on Bookbuilding Sentiment?

By Sanghyun Park

  • FSS wants Nikke’s MAU data to address revenue concerns. They also seek April and May sales data for Stellar Blade to address valuation concerns despite its recent launch.
  • Shift Up updated the prospectus with Nikke’s increasing MAU data but didn’t include Stellar Blade sales data. FSS may request further revisions, possibly delaying the IPO again.
  • Nikke’s MAU has risen but plateaued versus the previous quarter, and uncertainty surrounds Stellar Blade’s April-May sales, potentially impacting IPO pricing.

Guzman Y Gomez IPO – The Positives – Network Growing, Sales Have Outpaced Network Growth

By Sumeet Singh

  • Guzman Y Gomez plans to raise around US$160m in its Australian IPO.
  • GYG is a quick service restaurant business with more than 200 restaurants globally. It mainly focuses on fresh, made-to-order, Mexican-inspired food.
  • In this note, we look at the company’s prior performance and future prospects.

QuantumPharm IPO – Most of the Potential Has Already Been Baked In

By Clarence Chu

  • QuantumPharm (QUP HK) is looking to raise US$144m from its Hong Kong IPO.
  • QuantumPharm is a R&D platform, utilizing quantum physics-based first-principles calculation, advanced AI, high-performance cloud computing, and scalable and standardized robotic automation to provide drug and material science R&D solutions.
  • In our previous notes, we looked at the firm’s past performance and PHIP updates. In this note, we share our thoughts on valuations. 

Guzman Y Gomez IPO – The Negatives – Lawsuits and Management Churn

By Sumeet Singh

  • Guzman Y Gomez plans to raise around US$160m in its Australian IPO.
  • GYG is a quick service restaurant business with more than 200 restaurants globally. It mainly focuses on fresh, made-to-order, Mexican-inspired food.
  • In this note, we talk about the not-so-positive aspects of the deal.

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Jun 07
0

Daily Brief Thematic (Sector/Industry): The Stocks to Own in Asia – Vol. 45 and more

By | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

  • The Stocks to Own in Asia – Vol. 45
  • The Stocks to Own in ASEAN – Vol. 47
  • Singapore Banks and Financed Emissions: DBS, OCBC, and UOB
  • China Toll Road Sector: Higher for Longer……Yields
  • #9 India Insight: Goldman Sachs on India Election, Zee& SpiceJet Fundraise, ITC Demerger
  • #13Business Buzz: ECB’s ‘Hawkish’ Rate Cut, Nvidia’s $3 Trillion Market Value, Salesforce AI Center
  • [Blue Lotus Daily – TMT Update]:3690 HK/700 HK/SHEIN/4385 JP/Douyin

The Stocks to Own in Asia – Vol. 45

By Dr. Andrew Stotz, CFA

  • We highlight 14 stocks in Asia that look interesting to us based on our FVMR methodology
  • Portfolio changes: Four stock remains, 10 stocks added into portfolio
  • Since its inception, it has generated a before-fee total return of 187% versus the MSCI Asia ex Japan of 78%

The Stocks to Own in ASEAN – Vol. 47

By Dr. Andrew Stotz, CFA

  • We highlight 14 stocks in ASEAN that look interesting to us based on our FVMR Methodology
  • Portfolio changes: Five stocks remain, nine stocks added to our portfolio
  • Since its inception, the portfolio has generated a before-fee total return of 255% versus MSCI ASEAN’s 30%

Singapore Banks and Financed Emissions: DBS, OCBC, and UOB

By Kyle Rudden

  • Singapore’s major banks – DBS, OCBC, and UOB – have set sector-specific emissions targets for indirect emissions related to financial activities, known as Scope 3 “financed” emissions.
  • Collectively, these sector targets span ten carbon-intensive sectors, represent S$200+ billion in corporate loan portfolios, and cover the majority of the banks’ total financed emissions.
  • Financed emissions targets facilitate decarbonisation of emissions-intensive clients, reducing climate-related risks and creating opportunities for new and innovative financial products.

China Toll Road Sector: Higher for Longer……Yields

By Osbert Tang, CFA

  • China’s toll road sector has gone up by 47.4% since 2022, but it remains an excellent yield play with an average yield of 7.2% and 7.8% in FY24 and FY25.
  • 1Q24 profit is solid, with 3-year forecast earnings CAGR at a healthy 6.5%. Anhui Expressway H (995 HK) and Jiangsu Expressway (H) (177 HK) have the most consistent DPS trend.
  • We like Jiangsu Expressway (H) (177 HK) for its track record and growth prospects. As a relative underperformer in the sector, it is poised to catch up.

#9 India Insight: Goldman Sachs on India Election, Zee& SpiceJet Fundraise, ITC Demerger

By Sudarshan Bhandari

#13Business Buzz: ECB’s ‘Hawkish’ Rate Cut, Nvidia’s $3 Trillion Market Value, Salesforce AI Center

By Nimish Maheshwari

  • ECB Delivers ‘Hawkish’ Rate Cut Amid Revised Inflation and Growth Projections
  • Devon Energy Missed Out on the US Oil and Gas Mega-Deal Wave
  • Salesforce to Launch Flagship AI Center in London, Part of $4 Billion UK Investment

[Blue Lotus Daily – TMT Update]:3690 HK/700 HK/SHEIN/4385 JP/Douyin

By Ying Pan

  • 3690 HK: The prevalence of short-distance trips bodes well for Metiuan, albeit long-distance trips remain lukewarm.(+)
  • 700 HK: NPPA Released the June Import Game Code Approvals, and Tencent’s <VALORANT Mobile> received approval.(+)
  • SHEIN/4385 JP: SHEIN expands its C2C shopping platform into Europe (+/-)

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Jun 07
0

Daily Brief Event-Driven: Softbank (9984 JP): This Time and more

By | Daily Briefs, Event-Driven

In today’s briefing:

  • Softbank (9984 JP): This Time, It’s Different
  • TOPIX Inclusions: Who Is Ready (June 2024)
  • Affinity Equity Partners Seeking Delisting of Lock & Lock Through Comprehensive Stock Exchange
  • Altium (ALU AU): Scheme Vote on 12 July
  • MV Australia Equal Weight Index Rebalance Preview: Close Deletions in June
  • Sidara/John Wood: 4th Proposal at 230p
  • Altium (ALU AU)’s 12th July Scheme Vote. Renesas’ Done Deal

Softbank (9984 JP): This Time, It’s Different

By Victor Galliano

  • Elliott Management has emerged as a 2%+ shareholder in SoftBank group and is driving for share buybacks of upto USD15bn; we see this as a game changer for minority shareholders
  • Recent moves to enhance corporate governance in Japan have taken root, yet we see Softbank group as a laggard on corporate governance which been targeted by an experienced activist
  • Softbank shares trade at a 54% discount to the estimated NAV; an activist like Elliott on board could meaningfully drive shareholder value creation and a narrowing of the NAV discount

TOPIX Inclusions: Who Is Ready (June 2024)

By Janaghan Jeyakumar, CFA

  • Quiddity’s “Who is Ready” series of insights aims to objectively identify names listed on the Tokyo Stock Exchange that are potential additions to the TOPIX Index in future.
  • There have been no TOPIX Inclusions in 2024 so far although dozens of companies have been able to meet the key Section Transfer requirements on paper for several months.
  • However, there are some pre-event candidates we believe are worth monitoring as they have previously confirmed their desire to move to the Prime Market.

Affinity Equity Partners Seeking Delisting of Lock & Lock Through Comprehensive Stock Exchange

By Douglas Kim

  • On 5 June, Affinity Equity Partners (AEP) announced that it is seeking a delisting of Lock&Lock (115390 KS) shares through a comprehensive stock exchange. 
  • It has been reported that the second tender offer failed. Only 1.5% of the outstanding shares participated in the second tender offer, falling short of the 9.5% participation required.
  • Affinity plans to transfer the shares of Lock&Lock held by an overseas corporation to a domestic corporation (investment-in-kind) and then go through a comprehensive stock exchange procedure.

Altium (ALU AU): Scheme Vote on 12 July

By Arun George

  • The Altium Ltd (ALU AU) IE considers Renesas Electronics (6723 JP)’ A$68.50 scheme offer fair and reasonable as it is above the midpoint of the A$62.37 to A$70.27 valuation range. 
  • The offer is conditional on remaining regulatory approvals (FIRB, CFIUS) and shareholder approval. 
  • The offer price is attractive and 31% above the all-time high. At the last close and for the 1 August payment, the gross/annualised spread was 1.7%/11.6%.

MV Australia Equal Weight Index Rebalance Preview: Close Deletions in June

By Brian Freitas

  • With the review period complete, there are 3 stocks that are close to the deletion zone and could be removed from the index at the June rebalance.
  • Even if there are no constituent changes, capping changes will lead to one-way turnover of 3.6% and a one-way trade of A$83m.
  • There are 6 stocks with over A$5m to trade from passive trackers but the impact on the stocks is not very high.

Sidara/John Wood: 4th Proposal at 230p

By Jesus Rodriguez Aguilar

  • Sidara has submitted a fourth and final 230p/share cash proposal. Wood’s Board has changed tack and will grant due diligence. PUSU has been extended to 3 July.
  • This proposal represents 39.4% premium, implied equity value of £1,591 million ($2,033 million) and implied EV of £2,983 million ($3,122 million), and (still good value) 6.4x EV/NTM Fwd EBITDA.
  • The market is cautious (gross spread 12.5%). There’s potential for a “best & final” firm offer. However, if Sidara withdraws a significant sell-off in Wood’s shares is expected.

Altium (ALU AU)’s 12th July Scheme Vote. Renesas’ Done Deal

By David Blennerhassett

  • Back on the 15th Feb, Renesas Electronics (6723 JP), a supplier of advanced semiconductors, entered into a Scheme with Altium Ltd (ALU AU).
  • Altium shareholders are being offered A$68.50/share, in cash, a lifetime high.
  • The Scheme Booklet is now out, with a Scheme Meeting to be held on the 12th July. Expected implementation on the 1 August. The IE says fair & reasonable.

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Jun 07
0

Daily Brief Credit: Morning Views Asia: Greentown China and more

By | Credit, Daily Briefs

In today’s briefing:

  • Morning Views Asia: Greentown China, HPCL-Mittal Energy Ltd, Lippo Karawaci, Citicore Renewable Energy

Morning Views Asia: Greentown China, HPCL-Mittal Energy Ltd, Lippo Karawaci, Citicore Renewable Energy

By Leonard Law, CFA

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

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Jun 07
0

Daily Brief Equity Bottom-Up: Toyota Industries (6201) – TMC’s Sale of TI Shares Is Innocuous and more

By | Daily Briefs, Equity Bottom-Up

In today’s briefing:

  • Toyota Industries (6201) – TMC’s Sale of TI Shares Is Innocuous, TI’s Valuation Remains Uncompelling
  • Lasertec. Colossal Fraud Or Multi-Award Winning Mask Inspection Supplier?
  • Meituan Is the Biggest Beneficiary of China’s Domestic Travel Recovery
  • MT/ Meituan (3690 HK): 1Q24, Total Revenue Up by 25% and Initiatives Loss Down by 45%
  • Jardine Matheson – The Slow Grind Lower Can Continue
  • Water Oasis (1161 HK): Dividend Cut As Company Gets Conservative
  • TSMC (2330.TT; TSM.US): ASML’s High-NA EUV Machine Will Not Be Required Until 2027 at TSMC.
  • Saizeriya (7581 JP):  Buy On Any Weakness On A More Profitable Japan And Continued Strength In China
  • Tech Supply Chain Tracker (07-Jun-2024): Air Liquide to invest $250M in US location for Micron gas.
  • ASEAN EV Ecosystem Update: Initiatives to Build a Regional EV Ecosystem Continues

Toyota Industries (6201) – TMC’s Sale of TI Shares Is Innocuous, TI’s Valuation Remains Uncompelling

By Travis Lundy

  • Last September, Toyota Motor (7203 JP) Group affiliate Aisin (7259 JP) said they would get rid of ALL their cross-holdings. That signalled a future sea change in Toyota intra-group relations.
  • It meant all Toyota group companies could do that. The big moves started with a multi-party offering of Denso Corp (6902 JP) shares – Toyota, Toyota Industries, and Aisin sold.
  • Then others. Then in March, Denso announced a 2.5yr selldown of ~¥460bn of Toyota Industries shares. That meant a TI buyback was likely. We got one. Now we have details.

Lasertec. Colossal Fraud Or Multi-Award Winning Mask Inspection Supplier?

By William Keating

  • Activist short seller Scorpion alleges Lasertec is a “colossal fraud” and “ticking time bomb”
  • Most of their allegations relate to problems with Lasertec’s EUV mask inspection tools
  • Lasertec achieved Intel’s distinguished supplier ward for the past six years and last December landed an award from TSMC for  “Distinguished EUV Mask Inspection and Metrology Collaboration”. What gives?

Meituan Is the Biggest Beneficiary of China’s Domestic Travel Recovery

By Andy Fu

  • During the upcoming Dragon Boat Festival, both flight and railway traffic seems sluggish, indicating a cooled-down enthusiasm for long-distance trips due to budget constraints.
  • Data points to booming short-distance travel with self-driving as the major means, helped by lower price;
  • Benefiting from hotel booking and catering, Meituan is the biggest beneficiary of such consumption downgrade.

MT/ Meituan (3690 HK): 1Q24, Total Revenue Up by 25% and Initiatives Loss Down by 45%

By Ming Lu

  • Total revenue increased by 25% YoY and all business lines grew strongly.
  • In 1Q24, the operating losses from new initiatives decreased by 45% YoY, but new initiatives revenue still grow.
  • We conclude that the price target can be double of the market price.

Jardine Matheson – The Slow Grind Lower Can Continue

By Daniel Tabbush

  • There is nothing in the main investments at JM that suggests the grind lower on ROE and net profit will suddenly reverse, rather it should continue
  • Astra International, Hong Kong Land, and DFI Retail are key to JM and there is little joy here, with HKL potentially having more valuation impairments
  • Quarterly figures from Astra, which are a window on the current interim for JM, are not positive, with the worst quarter in over one year

Water Oasis (1161 HK): Dividend Cut As Company Gets Conservative

By Sameer Taneja

  • Water Oasis (1161 HK) reported profits down 30% YoY (ex-one-off profits down 9% YoY only), but commentary cited headwinds in the business due to muted HK economic sentiment.
  • Anticipating these headwinds, the company cut its semi-annual dividend by 50% to only 3.5 cents (implying a 7% yield on the current share price) despite a massive cash buildup.
  • Net cash at 396 mn HKD is now 58% of the market cap. Given the current economic backdrop, we see a conservative approach to dividend payment in the medium term. 

TSMC (2330.TT; TSM.US): ASML’s High-NA EUV Machine Will Not Be Required Until 2027 at TSMC.

By Patrick Liao

  • Taiwan Semiconductor (TSMC) – ADR (TSM US) is planning to launch its 2nm in 2025.   
  • TSMC is expected to acquire one High-NA EUV machine this year for R&D purposes, but it will not be used for commercial production.
  • TSMC is expected to increase the cost of its Chip-on-Wafer-on-Substrate (CoWoS) package by around 15% in 2H24.

Saizeriya (7581 JP):  Buy On Any Weakness On A More Profitable Japan And Continued Strength In China

By Steve Zhou, CFA

  • After a strong 68% increase in share price in 2023, Saizeriya (7581 JP) has been trading range bound, and up 8% year-to-date in 2024. 
  • Continued weakness in Japan on the profitability front in 1HFY24 offset continued strong performance in China.
  • Japan’s operating profit is set to improve in the second half of the current fiscal year (ending August), and China’s strength will continue on the back of accelerating store openings. 

Tech Supply Chain Tracker (07-Jun-2024): Air Liquide to invest $250M in US location for Micron gas.

By Tech Supply Chain Tracker

  • Air Liquide investing $250M in new US facility for Micron gas supply, reflecting commitment to growth and sustainability.
  • Maruti Suzuki focusing on renewable energy expansion in India, showing dedication to environmental initiatives and reducing carbon footprint.
  • EVs driving demand for high-tech satellite dishes, while Nvidia aims to hire 50% foreign workers for new R&D center in Taiwan. EU-China tariff risks highlighted.

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

By Shifara Samsudeen, ACMA, CGMA

  • Countries across the ASEAN region continue to invest on developing their respective EV markets with governments introducing new initiatives and offering further incentives.
  • The price war among Chinese EV players has escalated in recent month, causing pressure on non-Chinese players. European and Japanese EV makers are increasingly looking at ASEAN for cost advantage.
  • The four companies we looked at have reported earnings and we have discussed their latest results and our investment thesis.

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