In today’s briefing:
- Baidu Inc.: When Will Its Efforts Towards Generative AI
- Plover Bay Technologies (1523.HK) – A Milestone Year with Strong Growth and Expanding Opportunities
- India’s Worst Accounting Scandals
- MIXUE Group (2097 HK): What to Do Now?
- Ever-Vigilant CRISIL, India Rating Downgrade Firm – After Default
- Shenzhen Intl (152 HK): Good News from Positive Profit Alert
- Arista Networks: Can its Cloud Titan Engagement & Expansion Bolster Growth In Foreseeable Future?
- Tech Supply Chain Tracker (04-Mar-2025): HP cuts 2k jobs, offshores China manufacturing for NA by 4Q25
- LGND: First Steps into Cell & Gene Therapy
- Genuine Parts Company: A Closer Look at Its Earnings Cadence & Market Conditions!
Baidu Inc.: When Will Its Efforts Towards Generative AI
- Baidu’s fourth-quarter and full-year 2024 financial results reveal a company navigating both challenges and opportunities, driven by its ongoing transformation into an AI-centric entity.
- The reported total revenues for the fourth quarter amounted to RMB 34.1 billion, a 2% decrease year-over-year, while full-year revenues were down by 1%, at RMB 133.1 billion.
- Despite these slight declines, Baidu Core’s revenue performance was stable, increasing by 1% for both the fourth quarter and full year.
Plover Bay Technologies (1523.HK) – A Milestone Year with Strong Growth and Expanding Opportunities
- Plover Bay Technologies (1523.HK , “Plover Bay”) with a market cap of approximately USD 739 million, experienced another stellar year with its FY24A annual results, showcasing a notable 24% revenue increase, exceeding the USD 100 million threshold (also known as the “valley of death ”) to reach USD 117 million, while also realizing a 36% YoY growth in net profit, amounting to USD 38 million.
- This success is complemented by strategic partnerships, and ongoing innovation.
- With deepening collaborations, an expanding product line-up, and an emphasis on recurring revenues, Plover Bay is well-positioned for sustained growth in 2025 and beyond.
India’s Worst Accounting Scandals
- Learn about India’s worst accounting fraud, including Yes Bank, Satyam Computer, Kingfisher and others in this report.
- Misappropriation features prominently in these scandals, in addition to fraudulent reporting and corporate governance failure.
- Siphoning of funds from bank loans, in particular, has been a common feature of Indian corporate malfeasance.
MIXUE Group (2097 HK): What to Do Now?
- Mixue Group (2097 HK) has a successful IPO in Hong Kong, with share price surged 43.2%. We will trim from here and will not buy at the current level.
- Our forecasts call for a decent 20.8% and 17.6% earnings growth for FY25 and FY26, putting it on RICH PERs of 19.1x for FY25 and 16.3x for FY26.
- The Chinese tea sector has average PERs of 12.4x and 10.5x, suggesting MIXUE’s leadership is well reflected in the over 50% premium, and the safety margin has significantly narrowed.
Ever-Vigilant CRISIL, India Rating Downgrade Firm – After Default
- Crisil Ltd (CRISIL IN) and India Rating Downgrade AGS Transact Technologies (AGSTRA IN) to ‘D’ from “A/Stable’ post a default
- Rating agencies exist to anticipate events such as defaults and not react after being informed of a default
- Rating agencies ignored poor fundamentals of AGS Transact Technologies (AGSTRA IN) in 2QFY2025 results which clearly and publicly revealed deteriorating cash flows and a high-risk financial strategy
Shenzhen Intl (152 HK): Good News from Positive Profit Alert
- Shenzhen International (152 HK)‘s FY24 net profit will range at HK$2.8-3.1bn (53-63% growth YoY), boosted by a HK$2.3bn gain from South China Logistics Park Transformation.
- Extrapolating this gain to the whole land plot will generate a profit of HK$11.4bn, or 66% of the current market capitalisation. The stock is significantly undervalued at 0.49x P/B.
- At an assumed 50% payout ratio, SZI’s yield is at 9%. Moreover, with stable profit expected for FY25 and FY26, the yield will be maintained for the next two years.
Arista Networks: Can its Cloud Titan Engagement & Expansion Bolster Growth In Foreseeable Future?
- Arista Networks’ results for the fourth quarter of 2024 reflect significant strides and some challenges in various segments.
- The company reported revenue of $1.93 billion for the quarter, contributing to an annual growth of approximately 19.5%, surpassing its initial forecast of 10-12% amidst robust AI-related demand.
- This performance helped achieve a non-GAAP operating margin of 47.5%, marking a solid financial standing.
Tech Supply Chain Tracker (04-Mar-2025): HP cuts 2k jobs, offshores China manufacturing for NA by 4Q25
- HP plans to cut 2,000 jobs and shift 90% of its manufacturing from China to North America by the fourth quarter of 2025.
- Hushan successfully transforms car door handles into profitable aftermarket products, carving out a niche in the market.
- IBM closes its research facility in China and lays off 1,800 employees, while companies like Jabil, Aequs, and Tata export Indian-made Apple components to China and Vietnam.
LGND: First Steps into Cell & Gene Therapy
- Ligand Pharmaceuticals holds a portfolio of revenue, royalty & milestone generating assets that have been vetted by its internal investment team.
- Ligand considers individual biopharmaceutical products, platforms, companies & income streams in its opportunity set.
- It targets late-stage and commercial income-producing assets when making investments.
Genuine Parts Company: A Closer Look at Its Earnings Cadence & Market Conditions!
- Genuine Parts Company reported its financial performance for the fourth quarter and full year ending 2024, revealing a mixed set of results amidst challenging market conditions.
- The company’s total sales for 2024 were $23.5 billion, representing a growth of 1.7% compared to the previous year.
- This growth was bolstered by strategic acquisitions which contributed 260 basis points but was offset by weaker market conditions, particularly in the industrial segment.
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