Daily Brief Equity Bottom-Up: Chow Tai Fook (1929 HK): A Decent Rebound and more

• While Chow Tai Fook Jewellery (1929 HK) has a stellar share price performance YTD, it still lags the HSI since 2023. The solid 2H FY25 result should support further upside. 
• SSS growth has recovered sharply in Apr-May 2025 (the first two months of 1Q FY26), and CTF should reap further benefits from cost management and product transformation.
• FY26F ROE may reach 27.2%. While its current yield is only 4.6%, it is possible to declare special dividend this year, easily pushing it to over 10%.

• In this insight, we discuss the emergence of the North Korea reconciliation related stocks that are starting to outperform. We have seen this playbook before.
• With the new President Lee Jae-Myung, there is likely to be an outperformance of some of these stocks once again.
• Among the 6 stocks listed above, we believe Hyundai Elevator is one of best stocks to capitalize on the increased reconciliation with North Korea.

• Qualcomm’s recently rumoured desire to acquire UK-listed Alphawave finally came to fruition on June 9 with a US$2.4 billion offer
• Just two days earlier, on June 7, Alphawave announced that the company had disposed of its interest in China-based JV, WiseWave Technology
• What is WiseWave Technology, why did Alphawave invest in it and why is it now divesting that interest prior to the Qualcomm acquisition?

• TSMC May Sales at Record High; Rumored A16 Pricing Underscores Strategic Moat in Advanced Nodes
• Review of Client Roadmaps Shows TSMC Positioned as Indispensable Enabler of AI and Advanced Compute Products
• We Maintain Our Structural Long Rating on TSMC; Inexpensive Despite Recent Rally

• In today’s edition: • ABN Amro | restructuring within Corporate Banking • BE Semiconductor Industries | increases long-term financial targets • Heineken | intends to invest USD 2.75bn in Mexico until 2028 • KPN | VodafoneZiggo secures access to part of Delta Fiber’s network • KPN | CEO denounces ‘populistic discussion’ on high broadband tariffs • InPost | court dismisses motion for injunction against Yodel • DHL | CMA to start DHL/EVRi merger inquiry

Team Internet’s 10-year deal to run the .co top-level domain (TLD) enhances the growth prospects for Domains, Identity and Software (DIS), the group’s highest-quality division in terms of revenue diversity and visibility. Growth prospects may strengthen with ICANN’s planned new Generic Top-Level Domains (gTLD) Program, scheduled for 2026. This is welcome news at a time when visibility for Search is low. Our estimates are unchanged, but we see upside potential to our 55p/share sum-of-the-parts (SOTP) valuation for DIS as prospects strengthen, and believe that the current valuation factors in modest prospects for DIS and Comparison and no value for Search.

• Cross-Holding Overhang Easing:Denso Corp (6902 JP) accelerates exit from Toyota Industries stake via tender offer, unlocking capital and aligning with capital efficiency and governance reforms.
• Profitability Set to Improve: FY2026 profit outlook strong, driven by reduced quality-related costs, better operating leverage, and ongoing cost controls post fuel pump recall.
• Valuation Comfort with Growth Drivers: Stock trades below historical average P/E; SDV, electrification, and semiconductor focus positions Denso well for re-rating amid sector tailwinds.

• Apimeds US is a clinical-stage biopharma company that is developing an intradermal bee venom-based toxin, Apitox, for pain associated with inflammatory conditions, including knee OA and multiple sclerosis (MS), for the US market.
• Apitox is licensed from Apimeds, Inc. in South Korea (Apimeds Korea), where the therapy has Korean approval as Apitoxin for treatment of OA.
• Honeybee venom has anti-inflammatory and analgesic properties.

• Sumitomo Pharma (4506 JP) and Knight Therapeutics (GUD CN) entered into exclusive license and supply agreements to commercialize Myfembree, Orgovyx, and vibegron in Canada.
• Sumitomo Pharma and Novo Nordisk A/S (NOVOB DC) have entered into a co-promotion agreement in Japan for Ozempic subcutaneous injection.
• Streamlining efforts and scouting for new revenue streams augurs well. Sumitomo stock remains in contention, up 27% in last 5 days.

Molten Ventures confirmed the key highlights from its FY25 trading statement published in April, including a positive uptick in portfolio valuations and, in turn, a 4% NAV per share total return in H225 (1.4% in FY25 to end-March 2025), strong cash realisations of c £135m in FY25 (ahead of the original guidance of £100m) and a robust cash balance of £89m at end-March 2025. Molten has collected a further £30m in proceeds so far in FY26 from the exits of Lyst and Freetrade. The company earmarked £30m of its FY25 proceeds for share buybacks amid a continued wide discount to NAV (c 53% at present), of which £24m has been executed to date.