In today’s briefing:
- Nidec (6594 JP): Wait for Hard Numbers
- DISCO Corporation (TSE: 6146) – From Abrasive Wheels to AI Packaging Champion
- Intel (INTC.US): Qualcomm CEO Has Publicly Stated that Intel’s Technology Is Still Not Competitive.
- Taiwan Dual-Listings Monitor: TSMC Premium at Historically Extreme Level; ASE Bounces Off Parity
- Asian Dividend Gems: Mars Group Holdings
- Chinese Express Firms All Saw H1 OPM% Fall — Except SF Hldg | Pair Trade: LONG SF Vs SHORT ZTO, J&T
- Newgen Software Technologies- Forensic Update
- Long Kotak Mahindra (KMB IN) Vs. Short Bajaj Finance (BAF IN): Statistical Arbitrage in Indian Banks
- Bath & Body Works in College Bookstores: Can This Bold Move Capture Gen Z?
- GMS: Strategic Expansion in Complementary Product Offerings to Drive Incremental Revenue Growth Over The Coming Years!
Nidec (6594 JP): Wait for Hard Numbers
- Nidec dropped 22% on Thursday following management’s decision to establish an independent committee to investigate accounting irregularities. It bounced back nearly 5% on Friday, but finished the week down 20%.
- In June, the Company received approval to postpone submitting its FY Mar-25 securities report until September 26. In July, it released incomplete 1Q results while postponing full disclosure.
- Without correct numbers, we can only guess at the full impact of the accounting irregularities and their effect on management.
DISCO Corporation (TSE: 6146) – From Abrasive Wheels to AI Packaging Champion
- DISCO is the global leader in wafer dicing and grinding, holding ~70–80% market share in critical back-end semiconductor tools.
- Anagement is expanding capacity via the Gohara Plant (FY2028) and upgrading innovation at the Haneda R&D Center (FY2025–27) to secure its edge in hybrid bonding, PLP, and stealth dicing.
- Revenues are projected to grow ~11% CAGR to FY2028, with EPS potentially reaching ¥1,500, but the stock trades at a premium ~33x FY26E P/E.
Intel (INTC.US): Qualcomm CEO Has Publicly Stated that Intel’s Technology Is Still Not Competitive.
- Intel Corp (INTC US) has not given up on Intel Foundry Service (IFS), even though it currently lacks any sizable clients.
- We are puzzled as to why Intel former CEO Pat Gelsinger insisted on entering the foundry market, which has so far weakened Intel’s financials without generating meaningful returns.
- Qualcomm Inc (QCOM US) CEO has publicly stated that Intel’s manufacturing technology is still not competitive.
Taiwan Dual-Listings Monitor: TSMC Premium at Historically Extreme Level; ASE Bounces Off Parity
- TSMC: 26.2% Premium; Historically Extreme Level to Open Fresh Short of the Spread
- UMC: +1.0% Premium: Wait for More Extreme Level Before Going Long or Short
- ASE: +2.7% Premium; Open Fresh Longs of ADR Spread Closer to Parity
Asian Dividend Gems: Mars Group Holdings
- Mars Group Holdings has three main business units including Amusement related (including pachinko/pachislot peripherals), Smart Solutions, and Hotels/restaurants related.
- It trades at P/E of 8.5x, P/B of 0.8x, and EV/EBITDA of 2.3x. Net cash is 48% of its market cap.
- Its sales, gross profit, and operating profit increased by 180%, 146%, and 680%, respectively from FY22 to FY25. However, it had a disappointing results in FY1Q26.
Chinese Express Firms All Saw H1 OPM% Fall — Except SF Hldg | Pair Trade: LONG SF Vs SHORT ZTO, J&T
- With the exception of SF Holding, all listed express firms reported lower H1 OP%
- SF’s independence and unique product mix protected profits as volume surged
- We suggest going Long SF Hldg against Short positions in ZTO & J&T
Newgen Software Technologies- Forensic Update
- Newgen Software Technologies (NEWGEN IN) is the leading provider of a unified digital transformation platform with native process automation, content services, and communication management capabilities.
- The company continues to exhibit aggressive accounting practice in FY25, where growth driven by overseas subsidiaries was majorly tied up in credit period. Higher provision on debtors is further concerning.
- High remuneration to promoters and independent directors, insider trading complaints, are few governance concerns
Long Kotak Mahindra (KMB IN) Vs. Short Bajaj Finance (BAF IN): Statistical Arbitrage in Indian Banks
- Context: The Kotak Mahindra Bank (KMB IN) vs. Bajaj Finance (BAF IN) price-ratio has deviated more than two standard deviations from its one-year average, presenting a potential relative value opportunity.
- Highlights: Going long Kotak Mahindra Bank (KMB IN) and short Bajaj Finance (BAF IN) targets a 9% return, with the long position supported by cheaper valuations.
- Why Read: Essential for quantitative traders seeking mean-reversion opportunities, with detailed execution framework, risk management protocols, and historical simulation showing the statistical basis for this relative value play.
Bath & Body Works in College Bookstores: Can This Bold Move Capture Gen Z?
- Bath & Body Works presented its financial performance for the second quarter of 2025, reflecting a strategic focus on customer-centric growth initiatives.
- The company reported net sales of $1.5 billion, up 1.5% compared to the previous year, alongside adjusted earnings per diluted share of $0.37.
- The sales growth was led by robust store traffic and successful promotional activity during their semiannual sale, which was strategically shifted to align with market dynamics and consumer behavior.
GMS: Strategic Expansion in Complementary Product Offerings to Drive Incremental Revenue Growth Over The Coming Years!
- GMS Inc.’s latest earnings for the fourth quarter of fiscal year 2025 reflects a mixed performance amidst a challenging macroeconomic environment.
- On the positive side, the company reported net sales of $1.3 billion for the quarter, which aligns with the high end of their expectations provided earlier in the year.
- The sales were bolstered by recent acquisitions, including Kamco, Yvon Building Supply, R.S. Elliott, and Howard & Sons Building Materials, which contributed positively to their revenue.
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