Daily Brief Equity Bottom-Up: Rio Tinto Loses Arbitration Against Entree Resources; Now What? and more

• Late 2024 Entree Resources (ETG CN) announced it won its arbitration against Rio Tinto Ltd (RIO AU). The vote by the three judges was unanimously in favor of Entree. 
• Rio Tinto Ltd (RIO AU) held its investor day in early December 2024 where almost its entire growth plan for 2025-2030 is predicated on Oyu Tolgoi’s (OT) performance.
• Rio Tinto Ltd (RIO AU) is now backed into a corner to find a solution for OT’s minority shareholder Entree Resources. The most logical outcome? RIO buys ETG in 2025.

• Dream International, a Hong Kong-based company run by a Korean family, has seen significant growth in revenue and earnings per share over the past decade.
• Despite facing challenges such as theft of funds and holding a large cash pile, the company has shown strong performance with an 18% return on equity over the past 15 years.
• Trading at a low multiple of earnings and holding a significant cash reserve, Dream International presents an appealing investment opportunity for value investors due to its potential for continued growth and competitive advantages in the market.

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• Sony Group Corporation has exhibited a mix of strengths and challenges in its latest financial results, which provide insights into its current business landscape and future outlook.
• Positive aspects of Sony’s results are largely attributable to robust performance in key segments like Gaming & Network Services (G&NS) and Music.
• The company reported a 9% increase in consolidated sales, excluding the Financial Services segment, year-on-year, with operating income showing a significant increase of 57% for the quarter.

• United Microelectron Sp Adr (UMC US) experiences approximately a 5-10% quarter-over-quarter (QoQ) decline in 1Q25. For the full year of 2025, we anticipate a modest year-over-year (YoY) decline of around 5%.
• We have observed some strength from Taiwanese Fabless companies, which could support the 1Q25 demand for UMC.  
• It has been noted that mature wafer demand is not solely driven by China and may help offset the impacts of the US-China Trade War, benefiting foundries outside of China.

• Aspirasi Hidup Indonesia (ACES IJ) has forged ahead with its rebranding after ending its licensing agreement with ACES US, changing its store branding to AZKO from 1st January 2025.
• The new branding has already been rolled out to several stores but the company has given a 3-month window for all storefronts to be completed across Indonesia. 
• We view this rebranding exercise as an opportunity for the company to lift sales further through heavy promotions and a more aggressive store rollout. Valuations remain attractive relative to history.

• In 1H24, Hygeia Healthcare Group (6078 HK) reported revenue growth of 35% YoY to RMB2,382 million, mainly driven by a 37% YoY growth in hospital business.
• Hygeia’s gross profit margin contracted 60bps YoY to 31.8%. Lower government grant led to 230bps operating margin squeeze to 21.6%.
• The share price of Hygeia Healthcare has gone down almost 56% in the last one year. Accelerated organic growth and strengthening of margins are crucial to boost valuation.

• EV price cuts in Europe impact used car market, while US industry faces tariffs
• Kyocera to sell $1.27 billion in non-core business due to declining profits
• Toyota and Nvidia collaborate at CES 2025 for AI alliance towards autonomous future

• Geely’s sales volume grew by 32% in 2024 and management set a growth target of 25% for 2025.
• BEV boomed in 2H24 and will be the protagonist in 2025.
• We believe the overseas market will also be promising for Geely.

• Lumen Technologies’ third-quarter 2024 performance outlines its strategic efforts and current challenges as it navigates a transformative phase to reposition the company within the digital networking and AI infrastructure sectors.
• The company reported a revenue decline, reflecting ongoing headwinds from legacy business sectors, even as it strives to pivot its offerings toward newer, more competitive markets.
• Baptista Research looks to evaluate the different factors that could influence the company’s price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology.

• We compile our selection of small and mid-cap names with our desired characteristics of high dividend yields, value, and margin of safety.
• Our top picks are Perfect Medical Health (1830 HK), The Keepers Holdings (KEEPR PM), Taste Gourmet (8371 HK), Uchi Technologies (UCHI MK), and Ginebra San Miguel (GSMI PM).
• As we approach the new year, we roll into forward earnings, and most of our stocks are cheaper with rich yields. We summarize our list of stocks