In today’s briefing:
- BYD (1211 HK): Authorities Halting Severe Competition Throughout Industry and Industry Chain
- Mitsubishi Heavy (7011) – Strong Earnings, ¥10.2T Backlog, Macro Tailwinds Remain Supportive
- Chinese Tea Chain: An Impromptu Snapshot Visit at Sunac Mall – Mixue, Chagee, Goodme, ChaPanda
- Shiseido (4911) | Beauty in the Bargain Bin
- MHI (7011 JP): Take Profits
- Taiwan Tech Weekly: TSMC’s 2nm Node to Generate Largest Revenue Ever; US Bottleneck in Adv Packaging
- HINDZINC – ₹12,000 Cr Smelter Expansion Approved Amid Long-Term Growth Push
- Boss Energy (ASX: BOE) – Transitioning to Tier-1 Producer with Strong Quarterly Momentum
- Carnarvon Energy UPDATE(CVN)
- KEPCO E&C (052690.KQ) – Nuclear Tailwinds, Proprietary Edge, and Execution Challenges
BYD (1211 HK): Authorities Halting Severe Competition Throughout Industry and Industry Chain
- BYD announced that the company would provide price discounts for 22 models.
- BYD has scale advantage over other NEV car makers and the NEV industry has bargaining power over suppliers and dealers.
- The auto association and the Ministry of Industry are trying to protect small companies from bankruptcy.
Mitsubishi Heavy (7011) – Strong Earnings, ¥10.2T Backlog, Macro Tailwinds Remain Supportive
- MHI has delivered a strong turnaround over the past four years, with revenue up 26% and business profit expanding nearly 10x from FY22 to FY25
- The consolidated order backlog crossed ¥10.2 trillion in FY25, up ~22% YoY, offering ~2 years of forward revenue visibility and skewed toward high-margin Energy and Defense segments.
- While the stock has rallied sharply, management’s solid FY25–30 guidance, along with structural tailwinds from energy transition and defense spending, continue to underpin the long-term thesis.
Chinese Tea Chain: An Impromptu Snapshot Visit at Sunac Mall – Mixue, Chagee, Goodme, ChaPanda
- We recently visited Guangzhou city, a tier one city in China, on a vacation trip.
- One of the malls that we visited happened to have several listed tea chain stores.
- We took a snapshot of the shop traffic and noted the difference in locations of various stores. We also ordered tea drinks from two of these stores.
Shiseido (4911) | Beauty in the Bargain Bin
- Shiseido’s core brand remains strong, but years of weak growth, high costs, and tariff risks have pushed valuations to deeply discounted, near-decade lows.
- Early signs from Japan show margin recovery is possible; aggressive cost-cutting could double core operating margins and unlock significant upside if execution holds.
- If management fails to deliver, Shiseido’s global brand equity, strategic footprint, and low valuation make it an obvious acquisition target for PE or industry buyers.
MHI (7011 JP): Take Profits
- MHI is up nearly 60% year-to-date to 46x management’s EPS guidance for FY Mar-26 and 27x our EPS estimate for FY Mar-30.
- By then, we expect Air, Defense & Space revenues to double and the division’s operating margin to rise from 10% to 15%, which is the likely cap on profitability.
- Given Japan’s uncertain finances and the long time horizon that should already be discounted, we recommend profit taking.
Taiwan Tech Weekly: TSMC’s 2nm Node to Generate Largest Revenue Ever; US Bottleneck in Adv Packaging
- TSMC’s Next Generation 2nm Node Gathers Momentum as Intel Lags Behind
- TSMC’s Arizona Plant Ships First AI Chips — But Taiwan Remains Core to Packaging
- MediaTek (2454.TT): Chinese Stimulus Program Might Lose Actively; Google DPU Project Delay to 2026.
HINDZINC – ₹12,000 Cr Smelter Expansion Approved Amid Long-Term Growth Push
- HZL has approved a ₹12,000 crore investment to set up a 250 KTPA integrated zinc smelter at Debari as part of its 2x capacity expansion plan.
- While smelting investments are not inherently value-accretive due to low TCs, they are necessary to process captive ore and minimize logistics costs.
- The overall growth outlook remains strong, but the pending mine lease expiries by 2030 pose a material long-term risk.
Boss Energy (ASX: BOE) – Transitioning to Tier-1 Producer with Strong Quarterly Momentum
- Boss delivered a robust March 2025 quarter, with Honeymoon generating free cash flow and production ramping sharply.
- The company targets ~2.9M lbs annual output by FY27, supported by Alta Mesa and multiple exploration assets.
- Valuations remain attractive at ~8× forward P/E, though uranium price volatility and execution risks persist.
Carnarvon Energy UPDATE(CVN)
- Yes, I know I wrote this one up a year ago, but things have changed to make this a more interesting investment opportunity.
- I would recommend holding this in an account where you can sit on it for a few years.
- The ultimate IRR will be attractive, but this isn’t a quick flip.
KEPCO E&C (052690.KQ) – Nuclear Tailwinds, Proprietary Edge, and Execution Challenges
- KEPCO E&C is well-positioned to benefit from the global revival in nuclear power, with strong domestic visibility and growing international interest in its engineering capabilities.
- Its proprietary APR1400 reactor platform anchors the business, supported by verticals in O&M, decommissioning, and green energy EPC.
- While earnings have grown sharply on margin gains, high valuations and project execution risks—particularly overseas—warrant careful monitoring.
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