Daily Brief Equity Bottom-Up: Tesla Q1 Deliveries: Look Out Below and more

• Q1 Deliveries trailed plunging market consensus, my even lower number, and Tesla’s expectations as sales crashed while it overproduced to a new record cumulative excess inventory which jumped 70% y/y
• This doesn’t square with Tesla’s explanation that sales were hurt by ongoing production issues—much like when the company used the same excuse for the disappointing Q3 2023. 
• This time deliveries were much lower, the miss versus market expectations much worse, and the deep well of unsold inventories even more formidable.

• Nongfu Spring (9633 HK) announced a set of strong 2023 results last week, with 2H23 net profit up 62% yoy and sales up 33% yoy. 
• The best performing category in 2023 has been tea beverage products (30% of sales), which grew 83% yoy for the year and 105% yoy in 2H23, picking up speed.
• Nongfu Spring is trading at 33x 2024 earnings, which I believe is attractive. 

• Oriental Watch (398 HK)  has begun Q4 2024 slowly, with its SSSG dropping by double-digit levels in all its major markets (HK/China and Macau).
• As the year almost draws to a close, we expect profits to drop 10-15% YoY for FY24 and the company to pay out 100%, resulting in a 14% dividend yield.
• The company also has 1.2 bn HKD of net cash, representing 70% of its market capitalization. Additionally, it has 700 mn HKD of investment property. 

• Hansoh Pharmaceutical Group (3692 HK) reported a whopping 55% YoY net profit growth to RMB3 billion on just 13% YoY revenue growth to RMB6 billion in 2H23.
• Revenue from innovative drugs zoomed 52% YoY to RMB4 billion and its proportion to total revenue increased to 73% in 2H23 from 54% in 2H22 and 62% in 1H23.
• Although Hansoh is not expected to receive marketing approval for any in-house innovative product in 2024, existing portfolio of innovative drugs will continue to drive the growth of the company.

• Century Communities has reported its Q4 and Full-Year 2023 results, which demonstrated notable growth and profitability.
• The company’s Q4 deliveries hit a record high of 3,157 homes, reflecting a 9% year-on-year increase, and the year 2023 marked the firm’s 21st consecutive year of profitability.
• The housing market also witnessed considerable improvement, contributing to the company’s success.

• D.R. Horton is a leading homebuilder with high returns on equity and strong balance sheets, yet trades at a low price-to-earnings ratio.
• The company has shifted to being asset-light, generating significant free cash flow and maintaining a strong balance sheet.
• With a focus on market share expansion and efficiency, D.R. Horton is positioned as a growth company in a stable industry.

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.

• Life Time Group Holdings, Inc.’s Q4 2023 earnings call emphasized impressive financial performance and strategic growth plans.
• The revenue increased by 18.2% in Q4, driven by a rise of 20.9% in membership dues and enrollment fees, and an 11% increase in in-center revenue.
• Access memberships increased by 5.2%, ending the year with over 763,000 memberships, while average monthly dues stood at $183, a rise of 13.2% from the previous year.

• Pendragon sells UK car dealer and leasing businesses to Lithia Motors, leaving behind dealer management software segment Pinewood Technologies
• Dividend payout from sale proceeds leaves Pinewood with around 20 million GBP of net cash
• With Lithia Motors owning shares and potential for growth through software rollout, there is significant upside potential in Pinewood’s valuation at a low multiple of 8x TTM EBITDA

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.

• Shake Shack Inc. delivered an impressive 2023 full year, marking transformative milestones and exhibiting substantial profitable growth.
• Key metrics indicate a steady growth of 24% year-over-year in the company’s system-wide sales, reaching a record $1.7 billion.
• The company launched 85 total restaurants (an unprecedented number in a single year) and ended 2023 with 518 Shake Shacks worldwide.

• Carnival Corporation plc recently released its Q1 2024 earnings.
• The company’s CEO, Josh Weinstein, and CFO, David Bernstein, detailed its financial performance.
• Despite recent disruptions caused by an event at the Francis Scott Key Bridge, which is expected to have a less than $10 million full-year impact, the company reported a strong first quarter.