Daily Brief Equity Bottom-Up: Multi Bintang (MLBI) Q4 2023: Growth Resumes and more

• Multi Bintang Indonesia (MLBI IJ) reported its FY23 earnings with revenues/profits up 6.7%/15% YoY.  Q4 FY23 revenues and profits were up 5.6%/17% YoY. 
• OPM (%) expanded 180 bps from 40.6% to 42.4%, and NPAT margins 240 bps to 32.1%. We believe that trends will continue to improve in 2024.
• At its board meeting, we expect the company to declare a full-year FY23 dividend of 500 Rph/share ( implying a 7% yield). The H123 dividend was 110 Rph/share.

• Hon Hai shares have hit a new all-time high and have just risen past our target price of NT$155, surging after investors flocked to Hon Hai on AI news.
• Hon Hai showcased two key technologies at Nvidia’s GTC conference last week: Nvidia-based AI servers with liquid cooling systems and an AI autonomous driving controller using Nvidia’s Orin X processor.
• Hon Hai’s sharp rally appears to have partly been caused by a short squeeze; While we like the long-term fundamentals and increased TP to NT$170, Hon Hai appears near-term overbought.

• There is a lot of excitement and uncertainty about the paint sector especially Asian Paints’ leadership in the broader market and among analysts.
• We interact with a couple of paint dealers across Delhi and Dimapur to gauge the sentiment on the ground.
• While there is no denying that Grasim Industries (GRASIM IN) poses a credible threat it might be too early to write off the market leader Asian Paints (APNT IN). 

• PT Nippon Indosari Corpindo (ROTI IJ) saw a relatively slow finish to the year with a slight decline in sales but the key drag came from a higher return rate.
• 4Q2023 did not see the usual seasonal spike but 2024 has started well and the return rate has come down, which will boost profitability as new products gain traction. 
• ROTI has launched several more affordable products to help drive its push into general trade whilst raw material prices remain under control. Valuations are attractive with recovery ahead.

• The electronic financial transactions industry is expanding, with a focus on personalization, the gig economy, and fraud prevention
• Mastercard is well positioned to benefit from the shift away from cash and towards digital payments
• Magellan’s portfolio manager Alyssa DeMarco discusses Mastercard’s growth and innovation with Devin Core, highlighting the company’s evolution over the past decade and its strategic focus on diversification and global expansion

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

• Despite Rakuten Bank shares’ re-rating, we believe it remains attractive, with its strong balance sheet and its low cost base with undemanding valuations compared to its Asian digital banking peers
• Rakuten Bank is well positioned to benefit from the negative interest rate policy exit in Japan, with its low LDR, high cash balances, growing loan book and healthy capital ratio
• It continues to leverage off the Rakuten Group eco-system, as a low cost source of new customers; nearly a third of clients use Rakuten Bank as their primary Japanese bank

• Citic Securities, China’s leading brokerage, has shifted over 100 investment bankers from initial public offering (IPO) roles to other divisions, in a major overhaul to address slowing business amid the stock market downturn.
• Most of the employees affected were transferred to debt financing business while the rest were relocated to mergers and acquisitions, and investment departments, a person close to the matter said.
• “The adjustment is an internal optimization of personnel, involving a broad range of investment banking positions,” said the person.

• Genesys Intl Corp (GENE IN) or (GICL) is engaged in Geospatial services.
• The balance sheet of the company is surrounded by impairments; in the last few years, the company has impaired a major chunk of its intangibles, investments, goodwill and advances
• Other forensic insights include doubts on revenue recognition, struggle with the cash flows and earnings quality, recon issues and treatment of few line items

• Hywin [NASDAQ:  HYW] announced a broad business transformation plan in response to overall market and regulatory conditions in China.
• The stock price, under considerable pressure since November last year, has clearly anticipated some of this uncertainty.
• As part of its transformation, Hywin will shift is wealth management product distribution away from asset-backed products.

• Astera Labs, an overvalued fabless semiconductor company, has completed its IPO and raised ~$565M of net proceeds in the offering. The IPO was priced at $36/share.
• Astera Labs shares jumped 70%+ in their first trading day and finished session at $62.03. The stock peaked at $95.21 on Tuesday and fell ~21% over the next 2 days.
• According to their prospectus, ~5.9M shares of Astera Labs will be available for sale following the public release of earnings for 1Q’24, which I expect to be announced in April.