Daily Brief Equity Bottom-Up: Trip.com (TCOM): 1Q25 and more

• Total travelers grew by 26% YoY in China in 1Q25, up from 13% YoY in 4Q24.
• Trip.com’s total revenue grew by 16% YoY in 1Q25, among which hotel booking grew by 23%.
• We believe operating margin will be stable, as the growth of sales and market expense has been slowing down.

• PROTEAN eGov Technologies LTD (PROTEAN) has experienced a significant setback by not being shortlisted for the Indian government’s PAN 2.0 project worth INR 1,440 crore, a material negative.
• This exclusion, despite earlier confidence, is expected to lead to a substantial decline in this revenue stream over the next 2-3 years, potentially collapsing by 75-100%.
• The PAN business has historically been a key driver of profitability and free cash flow, funding new initiatives now under threat. 

• Following its AGM on May 13 last, AMD announced a new $6 billion share repurchase program, despite still having $4 billion remaining on the previous buyback program
• The AGM also approved a proposal to authorize a 78% increase in the company’s share count, from 2.25 billion to 4 billion shares
• It’s a bold move on AMD’s part and it reawakens memories of the company’s acquisition of Xilinx back in 2022 in a $35 billion all stock deal. Deja vu ?

• We expect Baidu to report C1Q25 top line,non-GAAP operating profit and GAAP net income inline, (4.2%) and (8.2%) vs. the consensus, and C2Q25 top line guidance (2.7%) vs. the consensus
• Although we expect rebounding consumption to help BIDU’s advertising business, its traffic share losses were alarming. Further, we expect some of BIDU’s core advertising categories to experience sluggish recovery;
• We maintain our view that Baidu lacks visible growth drivers, reiterate our SELL rating, and cut its TP to US$88.

• JD.com C1Q25 revenue exceeded our estimate/consensus by 2.4%/4.3% and adjusted NI by 19%/20%, thanks to better-than-expected cross selling from trade-in subsidies and gross margin;
• We, however, raise full year new businesses operating loss from RMB(6bn) to RMB(12bn). We estimate 80% of the loss will come from food delivery;
• In lieu of the continued uncertainty in take-out investments, we remove JD.com from TOP BUY while cut TP from US$58 to US$54.

• In Q125, ZTO’s rate of volume growth accelerated, but it still lagged overall market growth
• Despite a sharp (-18% Y/Y) decline in SG&A expenses, OpInc margin fell by -70 bps Y/Y
• Guidance suggests ZTO will chase volume share rest of FY25, pressuring margins further

• Welspun Living targets INR 15,000 crore revenue by FY27, focusing on debt reduction and expanding its non-core businesses, diversifying its growth and financial resilience.
• The company’s emphasis on sustainability and innovation, including renewable energy initiatives, positions it as a leader in eco-friendly home textiles, responding to market shifts.
• Despite fierce competition, Welspun Living’s strong brand portfolio and global presence reaffirm its leadership in the home textiles market, making it well-positioned for long-term growth.

• Archean Chemical Industries (ACI IN) posted strong operational performance, driven by robust export growth and stable demand across key segments.
• Despite external market challenges, Archean’s diversified product portfolio and strategic acquisitions provide a solid foundation for future growth.
• Archean is well-positioned to continue expanding, with significant upside in bromine derivatives and energy storage, supporting its long-term growth trajectory.

Borussia Dortmund’s strong Q325 results reflect a relatively busy football schedule with just under one-half of the cumulative home games of the season played in the period. It is safe to say the most important result came after the Q325 results were published, as the first team qualified to play in the Champions League in 2025/2026. An impressive surge with seven wins in the last eight games took the club to the treasured fourth position, having been in 11th position prior to those games and fifth ahead of the final game. The last time the team was in the top four of the Bundesliga this season was after the third game. The replacement of the first team coach at the end of January 2025 certainly has paid off. We make no change to our estimates.

• Apcotex Industries (APCO IN) reported a robust 12.5% YoY revenue growth in Q4 FY25, driven by strong volume and export growth.
• Despite external challenges like crude price volatility and global overcapacity in latex, the company showcased strong operational performance.
• The recovery in margins, driven by improved capacity utilization and higher exports, supports optimism for FY26 despite market uncertainties.