In today’s briefing:
- Unloved Japan Roundup: Don’t Panic Ahead of Q3 Results Rush
- Tech News: Smartphone and PC Stabilize. Semicon Capex Cuts. Cloud Capex Up. TSMC Increasing Prices.
- Bank Central Asia (BBCA IJ) – Strong Finisher
- Singamas (716 HK): Further Positive Indications from CIMC Profit Alert
- China National Building Material (3323 HK): Publication of Buyback Offer Document
- Nidec (6594 JP): Growth Prospects Improving
- Sinopharm Group Co Ltd (1099.HK) – Performance May Continue to Miss Expectations
Unloved Japan Roundup: Don’t Panic Ahead of Q3 Results Rush
- More than 40 potential turnaround stocks will report Q3 results in the coming weeks.
- The average spread between the lowest and highest street estimate for the stocks on our target list is a gaping 45%. This doesn’t mean what most people think it means.
- Rohm, Taiyo Yuden, Yamato, Hamamatsu, JFE, Tsuruha look nice, but we pass on Shiseido and Mazda.
Tech News: Smartphone and PC Stabilize. Semicon Capex Cuts. Cloud Capex Up. TSMC Increasing Prices.
- Smartphone 2024 small growth about +5% YoY. PC 2024 small unit growth +4%. Don’t expect much better in 2025 but the Silicon content will increase, both for processor and DRAM.
- Lots of cuts in 2025 Semiconductor Capex. TSMC is up but Samsung, UMC, Intel down. Japan Semi Equipment association has revised down 2025 growth from 10% to 5%.
- Cloud Capex booming. Microsoft announced US$80bn in FY25. Meta at US$60-65bn. TSMC to increase 5-3nm wafer price by 5-10%. The Ai segment of semiconductors is doing extremely well
Bank Central Asia (BBCA IJ) – Strong Finisher
- Bank Central Asia booked a solid finish to 2024, with strong loan growth across the board driven by corporate and SMEs leading, whilst its CASA continued to grow, protecting NIMs.
- The bank continue to cement its position as Indonesia’s leading transactional bank with +21% growth in 2024 to a record 36bn transactions, with its mobile banking leading the way.
- BCA continues to grow channels inclusing branches and ATMS to supplement its mobile banking growth. Loan growth may slow slightly this year but BCA stands out from peers on funding.
Singamas (716 HK): Further Positive Indications from CIMC Profit Alert
- China International Marine Cntnrs Gp (2039 HK)‘s positive profit alert suggested a very solid performance for Singamas Container Holdings (716 HK) in 4Q24.
- Annualising Singamas’ 1H24 earnings for the full year will mean a 78% profit surge in 2H24, but this is still conservative – CIMC’s 2H24 profit leaped 93x YoY.
- Trading on 6x PER, versus CIMC’s 10.3x, the stock is cheap. Net cash equals 86% of market capitalisation, potentially providing a yield higher than the 8.8% currently projected.
China National Building Material (3323 HK): Publication of Buyback Offer Document
- China National Building Material (3323 HK) published the H-share offer document and if everything is smooth, the payment will be made on 14 Mar 2025.
- Its two subsidiaries forecast poor profit/losses for FY24, suggesting a tough operating environment. The buyback valuation remains attractive relative to peer multiples.
- For non-holders, at the current price of HK$3.59, we do not think the safety margin is good enough, assuming that most existing shareholders will accept and tender.
Nidec (6594 JP): Growth Prospects Improving
- Outlook improving with rising demand for energy storage systems and near-line HDDs and water cooling modules for AI servers.
- 3Q results point to FY sales above and profits in line with management’s guidance. Proceeding toward acquisition of Makino Milling next fiscal year.
- At 17.5x projected earnings and 10x cash flow, the shares are at the bottom of their 10-year valuation range. Buy for the medium- to long term.
Sinopharm Group Co Ltd (1099.HK) – Performance May Continue to Miss Expectations
- Due to disappointing performance in 24Q1-Q3, both revenue and net profit attributable to the parent company in 2024 could face negative growth, but 2025 is expected to have positive growth.
- As pharmaceutical distribution business can just maintain stable but medical device distribution business and retail pharmacies cannot contribute high growth, the overall performance of Sinopharm has lost growth momentum.
- Due to longer payment cycles from hospitals and its business characteristics, Sinopharm is facing significant demands for working capital. Insufficient cash flow makes it difficult to increase the dividend rate.
💡 Before it’s here, it’s on Smartkarma
Sign Up for Free
The Smartkarma Preview Pass is your entry to the Independent Investment Research Network
- ✓ Unlimited Research Summaries
- ✓ Personalised Alerts
- ✓ Custom Watchlists
- ✓ Company Data and News
- ✓ Events & Webinars
