In today’s briefing:
- Zijin Mining: Gold IPO De-Risks, Copper Upside Remains
- Indian IT | Urge to the Boards – Stop the Buybacks
- UMC (2303.TT; UMC.US): 4Q25 Revenue Is Projected to Decline 5–10% QoQ.
- SentinelOne Eyes Observo AI: A $1 Billion Cybersecurity Power Play In The Making?
- Urban Company IPO: Will India’s Home Services Giant Clean Up on the Dalal Street?
- Texas Instruments & KLA Signal Continued AI Strength, Foreshadow TSMC’s 2nm Breakout
- China Medical System (867 HK) – From an 8 to a 16 FPE
- Proxy for the Growth of SME Digitization
- Dev Accelerator IPO Review: Tier 2 Focus, Backward Integrated Player
- Long LIC Housing (LICHF IN) Vs. Short Bank of India (BOI IN): Statistical Arbitrage Pair Trade
Zijin Mining: Gold IPO De-Risks, Copper Upside Remains
- Dilution: The gold IPO trims attributable EBITDA by ~3% as minority interests rise.
- Parent Impact: Zijin parent emerges leaner, with net debt falling by US$4bn and copper now ~70% of EBITDA.
- Valuation: At ~7× EV/EBITDA, the stock offers 15–30% upside on our estimates, stretching to 25–45% at spot.
Indian IT | Urge to the Boards – Stop the Buybacks
- Indian IT outperformed over 10 years, but recent underperformance and weak R&D spending raise questions on innovation versus high dividend and buyback payouts.
- AI disruption threatens coding demand and outsourcing models, risking productivity shocks, workforce layoffs, and urban consumption downturns if companies don’t adapt with innovation.
- Boards must prioritize bold investments and acquisitions over capital returns, positioning Indian IT as innovation leaders rather than risk-averse cash generators.
UMC (2303.TT; UMC.US): 4Q25 Revenue Is Projected to Decline 5–10% QoQ.
- United Microelectron Sp Adr (UMC US) – 2025 Full-Year and 4Q Outlook.
- The impact of U.S. recent restrictions on United Microelectron Sp Adr (UMC US) appears negligible.
- Customer demand trends are diverging in 2H25, and overall demand is expected to soften in 4Q25.
SentinelOne Eyes Observo AI: A $1 Billion Cybersecurity Power Play In The Making?
- SentinelOne’s recent earnings call made headlines with a major milestone: the company’s Annual Recurring Revenue (ARR) surpassed $1 billion, growing 24% year-over-year, while its net new ARR hit record levels.
- This momentum is underpinned by strong customer traction across emerging solutions like Purple AI, Singularity Data, and its cloud-native security stack.
- Riding this wave of innovation and expansion, SentinelOne is now reportedly eyeing Observo AI as a potential acquisition target.
Urban Company IPO: Will India’s Home Services Giant Clean Up on the Dalal Street?
- India’s home services market, valued at INR 5,210 billion, is projected to reach INR 8,580 billion by FY2030 at a CAGR of 10–11% .
- Urban Company’s core Indian business has turned profitable, with its EBITDA for this segment improving from a 9.72% loss in FY23 to a 3.30% profit in FY25.
- The company’s annual consumers grew from 4.76 million in FY2023 to 6.5 million in FY2025, while average spend rose from INR 3,786 to INR 4,079 during the same period.
Texas Instruments & KLA Signal Continued AI Strength, Foreshadow TSMC’s 2nm Breakout
- TI is experiencing 50%+ YoY growth in data center, showing no signs of AI server demand slowdown.
- KLA calls 2nm a “compelling” node, projecting it could be the industry’s largest over first three years.
- Taiwan Tech positioned to benefit via TSMC N2 ramp, CoWoS packaging, and ABF substrate expansion.
China Medical System (867 HK) – From an 8 to a 16 FPE
- Since our initiation on 5 June 2024, China Medical Sytem’s share price is up 113% and the FPE has moved from less than 8 to close to 16 times.
- The gap valuation between US drug companies and CMS has largely closed with CMS trading at a premium to a number of US counterparts.
- The earnings outlook is largely flat since the initiation, implying the share price appreciation has been driven by a re-rating.
Proxy for the Growth of SME Digitization
- We initiated on ITSL SP on Friday. The stock is up 2%.
- The initial feedback from clients was one of cautious optimism. There were concerns raised about concentration risk, competition and cybersecurity issues.
- We identified the mitigants and reiterate BUY.
Dev Accelerator IPO Review: Tier 2 Focus, Backward Integrated Player
- Dev X planning to double the operational capacity in next two years.
- Company is also planning to repay certain debt, while its tier-2 focus and backward integration provides them edge over its peers
- Operationally, they are better than peers, evident from longer period lease and high occupancy rates
Long LIC Housing (LICHF IN) Vs. Short Bank of India (BOI IN): Statistical Arbitrage Pair Trade
- Context: The LIC Housing Finance (LICHF IN) vs. Bank Of India (BOI IN) price-ratio deviates more than two standard deviations from its one-year average, presenting a potential relative value opportunity.
- Highlights: Going long LIC Housing Finance (LICHF IN) and short Bank Of India (BOI IN) targets a 7% return.
- Why Read: Essential for quantitative traders seeking mean-reversion opportunities, with detailed execution framework, risk management protocols, and historical simulation showing the statistical basis for this relative value play.
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