In today’s briefing:
- Dream International (1126 HK): Riding the Popmart Bubble
- Jardine Matheson (JM SP) On A Roll As The Street Turns (More) Positive
- Asian Buybacks Accelerating; Consistent Share Repurchasers Offer Safety
- Strategic Trade-Offs Define Chipmakers’ Limited China Reopening
- Adobe Has The Potential To Turn AI Into Billions—Can Firefly & GenStudio Redefine Creative Monetization?
- Legacy Business Fuels Kinatico’s SaaS Ambition
- The Beat Ideas: Jubilant Pharmova – Turning Capex Into Catalysts for Long-Term Value
- ASML 2Q25 Conf Call: Trying to Clear Doubts on EUV Growth and China Demand – Short Update
- ASML Q225 Earnings. Solid Results, Forecasting 15% Growth In 2025, Down 7% In Pre Market. But Why?
- Akzo Nobel: Initiation of Coverage- Will Its Focus On China’s Domestic Consumption Pay Off?
Dream International (1126 HK): Riding the Popmart Bubble
- We believe that toymakers are experiencing a bubble like rally led by Pop Mart International Group L (9992 HK) and Hasbro Inc (HAS US) which raised forecasts recently.
- Dream International (1126 HK) has returned >200% since liberation day tariffs were declared on April 2nd 2025 and now trades at 12.7x trailing earnings (vs 3.7x when we initiated).
- “Never look a gift horse in the mouth” ! .We would take some money off the table here as toy stocks go through periods of cyclicality due restocking/destocking.
Jardine Matheson (JM SP) On A Roll As The Street Turns (More) Positive
- Jardine Matheson Holdings (JM SP) is up ~10% this week and ~30% YTD. 53.3%-held Hongkong Land (HKL SP), JMH’s largest holding, is up 41% YTD and 85% over the year.
- HKL has been on a tear since CEO Michael Smith started on the 1st April 2024, as HKL focused on capital allocation and portfolio management – read deleveraging.
- The recent appointment of PAG’s Lincoln Pan at the helm of JMH, has the street upbeat he will bring about similar positive developments. That’s not unreasonable.
Asian Buybacks Accelerating; Consistent Share Repurchasers Offer Safety
- Asian buybacks, dominated by HK, China and Korea, are skyrocketing. In H125, buybacks more than doubled from their full year 2024 levels in HK/China and increased 40% in Korea.
- We screen companies repurchasing consistently, with total buyback of minimum $1bn and buyback over 2024-25 of at least 2% of present market cap, yielding companies in HK(11), Korea(6), Philippines(2), Singapore(1).
- Top five repurchasers are Alibaba, Tencent, China Communication Construction, AIA, Netease. These, barring the third, are up more than 20% this year. Share price support from buybacks do seem solid.
Strategic Trade-Offs Define Chipmakers’ Limited China Reopening
- Nvidia and AMD are set to resume scaled-down AI chip exports to China, marking a partial reversal of earlier U.S. export bans.
- China retains a near-monopoly on REE refining, controlling roughly 90% of global capacity, and its March 2025 export halt highlighted the leverage it holds over high-tech and defence supply chains.
- While markets rallied on the chip announcements, IV data suggests diverging risk expectations across Nvidia, AMD, and MP Materials, reflecting broader uncertainty around the durability and scope of this reopening.
Adobe Has The Potential To Turn AI Into Billions—Can Firefly & GenStudio Redefine Creative Monetization?
- Adobe Inc.’s second quarter financial results for fiscal year 2025 demonstrate a strong performance, marked by significant revenue growth and strategic advancements in its core business segments.
- The company’s total revenue reached $5.87 billion, an 11% increase year-over-year, with a noteworthy contribution from its Digital Media sector, which achieved $4.35 billion in revenue.
- This sector’s annual recurring revenue (ARR) grew to $18.09 billion, reflecting a 12.1% increase.
Legacy Business Fuels Kinatico’s SaaS Ambition
- As Kinatico transitions to a new compliance SaaS solution, the legacy business provides funding for the new service development and a pool of potential customers
The Beat Ideas: Jubilant Pharmova – Turning Capex Into Catalysts for Long-Term Value
- Jubilant Pharmova is investing over USD 285 million to expand its PET radiopharmacy sites, CDMO Sterile Injectables, and CRDMO capacity (FTEs from 1,000 to 4,000 by FY27).
- These segments, contributing over 80% of FY25 EBITDA, are positioned for faster growth and margin expansion, with Line 3 in Spokane expected to reach peak utilization in 3 years.
- A pivot towards higher-margin businesses with targeted RoCE above 20% enhances confidence in achieving Vision 2030 goals of doubling revenue and reaching 23–25% EBITDA margins.
ASML 2Q25 Conf Call: Trying to Clear Doubts on EUV Growth and China Demand – Short Update
- Stock is down -10%. The 2026 revenue comment (“while we still prepare for growth in 2026, we cannot confirm it at this stage“), confusion on EUV growth should explain it.
- Number of EUV machines sold is flat but ASP is up 30% as machine’s throughput is up 30%. EUV revenue growth is in the mix, not units.
- China: I don’t know what they tried to say. Healthy demand in China, not falling off a cliff. But wait, China 1H25 revenue have declined -28% YoY.
ASML Q225 Earnings. Solid Results, Forecasting 15% Growth In 2025, Down 7% In Pre Market. But Why?
- ASML today reported second quarter revenues of €7.7 billion, bang at the top of the guided range, flat QoQ and up 23% YoY
- Guided 2025 at 15% growth (~€35 billion), a big step up in confidence from the €30-€35 billion range given last quarter
- Comments regarding uncertainty about 2026 outlook and tariff impacts likely led to the >7% sell off currently happening in pre-market trading.
Akzo Nobel: Initiation of Coverage- Will Its Focus On China’s Domestic Consumption Pay Off?
- Akzo Nobel’s results for the first quarter of 2025 demonstrated resilience amidst a challenging economic backdrop.
- The company reported flat organic sales with a slight volume decline of 2%, offset by a positive price/mix of 2%.
- This was partly due to strong pricing strategies and cost reduction efforts that mitigated softer market conditions and inflationary pressures.
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