In today’s briefing:
- The Beat Ideas- Adani Energy Solution: Riding the Electricity Wave
- The Beat Ideas: Strides Pharma~ A Growth Play Post OneSource Demerger
- The US-China Trade War Is Likely to Split the Semiconductor Industry into Two Groups.
- China Logistics (Part 2): All JD Logistic Roads Lead Back to S.F. Express
- ChampionX Corporation: These Are The 6 Biggest Factors Impacting Its Performance In 2025 & Beyond! – Major Drivers
- China Logistics (Part 1): ZTO Has a Unit Economics Problem
- Korea Small Cap Gem #31: Daesang – A Consistently Profitable F&B Company Run by the Lim Sisters
- Eli Lilly’s Weight Loss Revolution: Is It Edging Out Novo Nordisk?
- Enfusion Inc.: Leveraging Managed Services for Faster Monetization To Change The Game! – Major Drivers
- Euronet Worldwide: Money Transfer Growth and Strategic Partnerships Driving Our Optimism! – Major Drivers
The Beat Ideas- Adani Energy Solution: Riding the Electricity Wave
- Adani Transmission (ADANIT IN) is one of the largest private player in transmission.
- The management has guided for 20% YOY revenue & EBITDA growth for long term
- Alongside it is trying to diversify from transmission & distribution which are regulated by the government and entered in Smart Meters, Cooling Services etc.
The Beat Ideas: Strides Pharma~ A Growth Play Post OneSource Demerger
- Strides Pharma achieved record growth in the US, launched high-ticket generics, and is spinning off OneSource CDMO with a projected valuation of $1.8-$2 billion by Q4FY25.
- Deleveraging efforts, diversified revenue streams, and regulatory approvals position Strides for profitability recovery, with expected FY26 EBITDA of ₹1,000 crore, driving long-term growth.
- Strides is evolving into a leaner, growth-focused entity with reduced debt, a strong US portfolio, and OneSource spin-off, offering ~25% upside from its current market valuation.
The US-China Trade War Is Likely to Split the Semiconductor Industry into Two Groups.
- The US-China trade war has shaped a new trend: Advanced and Matured Technologies led by Taiwan Semiconductor (TSMC) – ADR (TSM US) and Semiconductor Manufacturing International Corp (SMIC) (981 HK) respectively.
- Notably, construction of semiconductor fabs in Singapore seems to be of lesser concern at the moment.
- The emergence of AI offers new hope, not only for advanced semiconductor technology but also for lagging technologies.
China Logistics (Part 2): All JD Logistic Roads Lead Back to S.F. Express
- Despite being breakeven just quarters ago, JD Logistics (2618 HK) has achieved profitability on par with global peers nearly 3x its size. Margin still has upside with further subsidiary integration;
- JDL is still positioned to accelerate revenue by taking share from S.F. Holding (6936 HK) in untapped opportunities, including domestic B2C (Taobao/Tmall), cross-border B2C (Kuayue acquisition), and B2B;
- JDL’s stock price rose 60%+ while it was our top pick for 2024. We reiterate the company as our TOP buy idea in the China logistics space for 2025;
ChampionX Corporation: These Are The 6 Biggest Factors Impacting Its Performance In 2025 & Beyond! – Major Drivers
- ChampionX Corporation delivered a mixed set of results in the fourth quarter and full year 2023, revealing both strengths and challenges in its financial performance and market position.
- The company reported fourth-quarter revenue of $944 million, which was slightly up sequentially but 4% lower year-over-year, reflecting the impacts of softer U.S. land drilling and completions activity.
- However, the company’s adjusted EBITDA remained flat from the previous quarter at $198 million, marking a 10% increase over the prior year, driven by higher volumes, productivity, and cost management.
China Logistics (Part 1): ZTO Has a Unit Economics Problem
- ZTO’s market share losses may accelerate as peers continue to cut prices. Worse yet, margins of its competitors are improving, which will sustain the war for a longer time;
- ZTO has maintained profitability growth despite the price war, but we think this situation is unsustainable. Management will eventually need to sacrifice profitability or suffer accelerated share loss.
- We now take a more bearish view on ZTO as we see no quick solution to the profit and market share balancing act.
Korea Small Cap Gem #31: Daesang – A Consistently Profitable F&B Company Run by the Lim Sisters
- Daesang is one of the leading F&B companies in Korea. It is especially well known for its sauces, kimchi, and miwon (MSG) food ingredients.
- Daesang has relatively attractive valuation multiples. It is trading at P/E of 5.6x, P/B of 0.46x, and EV/EBIT of 6.4x in 2025. Daesang consistently generates positive net profit.
- Daesang Holdings (084690 KS) is the largest shareholder of Daesang Corp with a 39.3% stake. Two sisters (Lim Sang-Min and Lim Se-Ryeong) are the two largest shareholders of Daesang Holdings.
Eli Lilly’s Weight Loss Revolution: Is It Edging Out Novo Nordisk?
- In a pivotal moment for the weight-loss and anti-obesity market, Eli Lilly & Co. has solidified its leadership position following groundbreaking developments around its drug Zepbound.
- Recently approved in the United States for treating sleep apnea in obese patients, Zepbound has set a historic precedent as the first drug targeting the underlying causes of this condition.
- This development, coupled with robust sales and a promising pipeline, gives Eli Lilly a clear advantage over its primary competitor, Novo Nordisk, whose experimental drug CagriSema underperformed expectations.
Enfusion Inc.: Leveraging Managed Services for Faster Monetization To Change The Game! – Major Drivers
- Enfusion, Inc., during its third-quarter 2024 earnings presentation, demonstrated robust progress in executing its strategic initiatives.
- The company achieved a 15% year-over-year increase in revenue, reaching $51.2 million, with notable growth driven by its strategic focus on larger, up-market clients and geographical expansion.
- Despite favorable revenue growth, the minor challenges faced included slower back book expansion, particularly in the Asia-Pacific (APAC) region, due to geopolitical uncertainties and economic conditions, which impacted organic growth.
Euronet Worldwide: Money Transfer Growth and Strategic Partnerships Driving Our Optimism! – Major Drivers
- Euronet Worldwide has reported its third-quarter financial results for 2024, showing a record performance in key financial metrics.
- The company achieved a revenue of $1.1 billion, with operating income standing at $182 million.
- Adjusted EBITDA reached $226 million, and adjusted earnings per share (EPS) were reported at $3.03, marking an increase of 11% from the previous year.
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