Daily Brief Equity Bottom-Up: 2026 High Conviction: Short NIO (NIO US/9866 HK) and more

• NIO (NIO US) is a Chinese premium electric vehicle manufacturer listed on three exchanges. 
• NIO’s Q4 deliveries guidance was below expectations, and sales momentum is on a declining trend. Sustainably hitting its 20% gross margin target and achieving breakeven in 2026 seems a stretch.  
• NIO’s valuation is stretched, trading at a material premium to the median EV/Sales and growth-adjusted EV/Sales multiples of Chinese EV peers. 

• TSMC: +26.1% Premium; Remains at Level Rarely Maintained for More Than a Week; Good Level to Short the Spread
• UMC: +2.5% Premium; Historically Rare Level is a Short Opportunity
• ASE: +2.9% Premium; Wait Better Short Opportunity at Higher Levels

• Context: This Insight follows up on previously highlighted relative value opportunities, using a statistical methodology based on mean-reversion to identify opportunities in paired securities.
• Highlights: Currently nine pair trade opportunities across four markets and six sectors persist.
• Why read: Statistical analysis offers a unique perspective on relative value. Gain insights into actionable statistical pair trade opportunities and monitor performance of previously highlighted pairs.

• Delhivery has consolidated its leadership position in Express Parcel segment through ‘Ecom Express’ acquisition. We believe this is a cash-cow business with consistent mid-teens industry growth and sustainable 16-18% margins.
• Express PTL business is taking off along with the industry cycle. Supported by Delhivery’s tech stack and deep infrastructure, it is ready to corner market share with margin expansion.
• We estimate 15% revenue CAGR, translating to an EBITDA range of 1,000-1,300cr for FY28 (vs 376cr in FY25). With Net cash of 4,200cr, stock trades at EV/EBITDA of 20-25x.

• MHI benefits from two long-term supercycles—AI-driven power generation and global defense rearmament—with a recent pullback offering an appealing re-entry point. 
• A global gas-turbine supercycle is boosting orders, pricing power, and margins as demand from hyperscalers and utilities exceeds manufacturing capacity. 
• Markets have yet to fully price in structurally higher earnings and valuations driven by AI-linked power demand and persistent turbine supply constraints.

• Do Day Dream is navigating a turnaround, with a return to profitability in 2024 after a challenging 2023, driven by its flagship skincare brand SNAILWHITE.
• The company operates in the large and growing Thai beauty and personal care market, which is valued at over USD 7 billion and benefits from trends like ‘skinimalism’ and demand for natural ingredients.
• Significant risks remain due to the highly competitive nature of the Thai cosmetics industry, which features numerous local and international players, leading to margin pressure and the need for continuous innovation.

This content is AI-generated and displayed for general informational purposes only. Please verify independently before use.

• DOD Biotech is a Thailand-based Original Design Manufacturer (ODM) specializing in dietary supplements and beauty products, operating in a growing but competitive domestic market.
• The company has demonstrated significant revenue volatility and negative net income in two of the last three fiscal years, reflecting operational challenges and market pressures. However, recent quarterly results in 2025 show a return to profitability.
• Positioned within the expanding Thai wellness and cosmetics industry, future growth hinges on successful product innovation, diversification of its client base, and effective management of operational costs to improve margin stability.

This content is AI-generated and displayed for general informational purposes only. Please verify independently before use.

• The trend of stockpiling in the US has continued, and copper inventories in warehouses surged to over 436,000 tons. Inventories at the seven COMEX warehouses have more than tripled YTD. 
• Copper Production Disappointments Mount With Antofagasta (ANTO LN) Guidedown, Bullish To 12k USD/Ton supply issues detailed provide the perfect confluence for copper to breach 13,000 USD/ton by early 2026. 
• As copper has recently surpassed 11,500 USD/ton, we pick Southern Copper (SCCO US) and Antofagasta PLC (ANTO LN) as our top equities to play the copper run.

• freee (44778 JP — US$1.1 billion) is a Japanese developer of cloud accounting software.
• It was founded by a former Google executive called Daisuke (“Dice”) Sasaki, who had also run a start-up.
• Sasaki was shocked at how inefficient accounting processes were at his previous firm and other small- and medium-sized enterprises.

• There were further updates on the Simandou iron ore mine, which commenced operations last week, igniting bearish sentiment and taking iron ore prices down 3% WoW to 103 USD/ton.
• Demand, though, for higher-grade material remains strong, resulting in a widening spread between 65 and 62 Fe to almost 16 USD/ton (from 12-13 USD/ton a week ago). 
• We favor Fenix Resources (FEX AU) for its high growth profile and potential to increase production from 1.5 million tons to around 10 million tons.