In today’s briefing:
- TSMC. The Juggernaut Accelerates!
- Taiwan Tech Weekly: UMC Results Ahead; Nvidia & TSMC Partner for Silicon Photonics Technology
- Lonking (3339 HK): A (Massive) Positive Profit Alert
- Activist Spotlight: How Starboard Value Could Transform Qorvo’s Prospects
- China Healthcare Weekly (Jan.19)- WuXi AppTec Sells Shares in WuXi XDC, National Biological Drug VBP
- JD.com (JD US): Trusted Online Retailer Trading at a 9x P/E with a Coming Margin Inflection
- Mongolia Mining (975 HK): Q4 2024 Operational Updates and Commencement of Buybacks
- Bell Financial Group Ltd – Reported FY24 NPAT +26% in line
- Plug Power’s $1.66 Billion Loan: Will It Thrive & Flourish In Trump’s Era?
TSMC. The Juggernaut Accelerates!
- AI related demand accounted for ~15% of revenue in 2024, i.e. ~$13.5 billion. This is set to double to $27 billion in 2025
- 5 year growth CAGR of 20%, at the top end of the previously guided 15-20% range
- On track for $100 billion revenue in 2025, and most likely, $200 billion by 2030
Taiwan Tech Weekly: UMC Results Ahead; Nvidia & TSMC Partner for Silicon Photonics Technology
- UMC Results This Week; Insight Into Supply/Demand Environment for More Mature Semiconductor Segments
- Nvidia and TSMC Announce Partnership in Silicon Photonics Technology — Will Enable More Energy-Efficient AI
- TSMC 4Q24 Results Signal Multi-Year Market Share Gains; Margin Strength; Sustainable Industry Growth
Lonking (3339 HK): A (Massive) Positive Profit Alert
- Lonking Holdings (3339 HK)‘s positive profit alert suggested that FY24 earnings will beat the market consensus by a significant 25.8-34.6%.
- Better profitability indicates that it will further accumulate net cash. At an unchanged 50% payout ratio, it yields 7.8%, but at a higher payout of 70%, it will be 10.9%.
- Trading on 0.59x P/B, it is at the historical average valuation. If 1SD above average, there will be a 20% upside. It will go to HK$2.20 if 2SD above.
Activist Spotlight: How Starboard Value Could Transform Qorvo’s Prospects
- The relationship between Qorvo and Starboard Value has captured the attention of investors and market observers alike, as recent developments signal a potential turning point for the chip maker.
- On January 17, 2025, it was revealed that Starboard Value, one of Wall Street’s most aggressive activist investors, has acquired a 7.7% stake in Qorvo, equating to a $500 million investment.
- This announcement comes after a challenging year for Qorvo, during which its stock fell by 29%, weighed down by declining revenues in its mobile segment and an unfavorable product mix in the Android ecosystem.
China Healthcare Weekly (Jan.19)- WuXi AppTec Sells Shares in WuXi XDC, National Biological Drug VBP
- Anhui Province will lead the first National biological drugs VBP in 2025. However, we are optimistic because we think the whole industry will start to bottom out from here.
- EVER001 has the potential to become “a game changer” for membranous nephropathy treatment. We are waiting for Everest Medicines to reach licensing cooperation based on EVER001 in the future.
- The real motivation for the Disposals of WuXi XDC shares could be to boost WuXi AppTec’s stock price first so that the management can again reduce positions at high level.
JD.com (JD US): Trusted Online Retailer Trading at a 9x P/E with a Coming Margin Inflection
China-focused Twitter user “pandawatch” posted a tweet comparing the total shareholder return of Chinese tech companies.
At the top of the list was online retailer JD.com (JD US — US$57 billion) with a total dividend yield and buyback yield of 10% — even after deducting share-based compensation. That’s impressively high.
- JD is one of China’s largest e-commerce companies. It dominates the niche of selling authentic, branded goods online with fast and reliable delivery.
Mongolia Mining (975 HK): Q4 2024 Operational Updates and Commencement of Buybacks
- Mongolian Mining (975 HK) reported its production update, which is in line with our estimates for 7.9 million tons of washed coal sold for FY24.
- The company commenced buybacks, purchasing 0.26% of its outstanding shares at 6.65 HKD/share. We believe the company will also announce a dividend in its upcoming results.
- After the massive correction in share price owing to a weaker coking coal price, the stock trades at 4.2x PE, 1.9x EV-EBITDA, and a 7-10% dividend yield (30-50% payout ratio).
Bell Financial Group Ltd – Reported FY24 NPAT +26% in line
- RaaS has published an update report on diversified financials company Bell Financial Group (ASX:BFG) following the release of FY24 unaudited revenue and reported NPAT, with group revenue +12% to $276m (RaaS $279m), implying H2 FY24 growth of 8.0%, and group NPAT +26% to $30.7m (RaaS $31m), implying H2 FY24 growth of 7.0%.
- Divisionally Retail & Wholesale NPAT increased 115% to $9.2m, with H1 growth >900% and a H2 decline of ~20% on forecast lower ECM activity off a high base and in line with ASX market data.
- Technology & Platforms and Products & Services NPAT increased 16% over the year, with H1 +~5% and H2 +~25% (including normalisation assumptions), likely to be aided by growth in Funds Under Administration (FUA) and higher transaction volumes.These businesses now represent 70% of group NPAT with a NPAT margin of 25% compared to 5.2% for Retail & Wholesale.
Plug Power’s $1.66 Billion Loan: Will It Thrive & Flourish In Trump’s Era?
- Plug Power, a leading name in the hydrogen economy, recently secured a $1.66 billion loan guarantee from the U.S. Department of Energy (DOE).
- This funding is set to propel the company’s plans to build several facilities for clean hydrogen production, with the first plant slated for Texas.
- The announcement comes amid political uncertainty, as President Donald Trump is set to take office with a potentially contrasting stance on clean energy policies.
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