Equity Bottom-Up Archives | Page 69 of 222 | Smartkarma

• Only about 1/3 of of the recently announced share buy back is done, the remainder will come from now through end of March 2024.
• Earnings are far higher than the bank’s forecast, and there should be a major revision in coming weeks.
• Credit Saison collaboration and exiting BOJ negative rate policy, should provide a multitude of positives, for revenue growth.

• Our FY24 to March 2024 EBIT forecast for ANA of ¥ 196bn is considerably higher than company guidance of ¥ 140bn, supported by our analysis of historical earnings seasonality.
• However, we are only narrowly above consensus of ¥186bn, and narrowly below consensus of ¥204bn, ¥208bn in FY25, FY26.
• In contrast, we see considerably greater upside to expectations at JAL, where our FY24 EBIT is 27% above consensus.

• Since releasing Q3 results, Money Forward’s stock price has fallen from 4,800 yen to the present 4,000 yen.
• Results on Friday could herald a stronger outlook for the share price. The market is fixated on quarterly earnings and ad spend – these should improve sequentially.
• Money Forward will release guidance for the coming fiscal year, which could see the company turn profitable at the EBITDA level.

• Shougang Fushan Resources (639 HK) energy, a pure play on high coking coal prices, now trades at 5.7x FY24 PE (1.5x EV-EBITDA), assuming 2,200 RMB/ton prices (vs spot 2500). 
• The company has ~7.5 bn HKD of net cash (on H12023), representing 50% of the market cap despite conducting a recent buyback of 5% and paying all its outstanding dividends/taxes. 
• With an 80% payout, we can also expect a dividend yield of 14% for FY24 if prices average 2200 RMB/ton.  

• Adi Sarana Armada (ASSA IJ) represents one of the most interesting plays on people and goods mobility and end-to-end logistics in Indonesia, being market leaders in auto leasing and auctions.
• Revenues slowed in 9M2023 due to a slowdown in Anteraja because of slower e-commerce but other areas saw strong growth, especially its auction and used car business.
• Adi Sarana Armada continues to build its renamed Cargoshare end-to-end logistics business with new customers and a move into cold chain logistics. Valuations are attractive relative to growth.

• A new draft measure suggested Shenzhen is planning to accelerate its shantytown renovation and offer more Affordable Houses to meet demand of low-income groups, mimicking Singapore’s HDB flat policy.
• As China’s property market gradually heading to the Singapore model, we expect the existing home market to enlarge and new home market to shrink.
• We expect Beike existing home business and renovation business to benefit, while new home business hurts. We maintained the stock as BUY rating and TP at US$24.5/ADS.

• The upcoming earnings season, along with the forthcoming Budget and Elections, should all contribute to keeping the undertone bullish for the NIFTY Index (NIFTY INDEX). 
• Bandhan Bank Ltd (BANDHAN IN) reported a minor dip in collections for the non-EEB portfolio, which has probably spooked the street.
• Other names discussed include MMFS, POONAWAL, AUBANK, LTFH, and AAVAS.

• The upcoming Chinese New Year travel rush is expected to see air passenger volume reach 80m, a 9.8% increase vs. 2019. Tongcheng Travel Holdings (780 HK) is a key beneficiary.
• In addition to air ticket booking, Tongcheng can gain from demand for related services and products. The focus on lower-tier cities will make it better satisfy their demand. 
• Its FY24F PER of 15.2x is lower than sector average of 16.4x, yet 3-year EPS CAGR of 30.7% is higher. Its underperformance against Trip.com (TCOM US) can be reversed.

• Rain Industries is an Indian small-cap company (~$660M) that manufactures 2 carbon-based inputs for Aluminium Industry (10% of global market share).

• It also has a cement & value-added chemical business

• The Company is ignored by market likely due to its ‘commodity’ nature, debt on their balance sheet and small market cap which drives most investors away. 

• We anticipate a sluggish beginning to the fiscal year with 1Q8/24 earnings reflecting slower growth in Japan, China, and Southeast Asia.
• Our forecast for 1Q24 operating profit stands at ¥130 billion, slightly below the consensus estimate of ¥138 billion. Assuming our estimates are accurate, we anticipate a slightly negative share-price reaction.
• Our bearish stance on the stock persists, driven by the fact that it trades at a premium to our DCF and at a premium compared to global peers

• Steady and strong profit is the key features of Power Finance and this is improving during FY24.
• ROA expansion can continue to reach and possibly surpass the peaks of FY15 and FY16 with loan volume, contained costs, better credit metrics.
• Recent quarterly data shows better loan volume and financial assets expanding more than financial liabilities, with credit costs in reverse.

• Oriental Watch (398 HK)  went ex-dividend on the 4th of January and has settled at an appetizing valuation of 6.8x PE with 60% of the market cap in cash.
• The market post-golden week and into the new year has been tepid.
• We expect the company to continue paying out 100% of its profits as dividends, based on which the dividend yield is close to 14% at the current share price.

• Our conviction long Shift Inc (3697 JP) ‘s share price went up by more than 50% in 2023 driven by strong growth in top line alongside further improvement in margins.
• The company’s margins fell in 2022 due to unprofitable projects, however, as these projects came to an end and the company being careful with projects, margins began to recover.
• Shift’s share price has declined over the last few days which we think is temporary and offers an  opportunity to make an entry.  

• PDD diversified into ‘local life’ businesses in December 2023, but stopped these businesses within two weeks.
• We believe PDD’s low price advantage does not work in Meituan-like ‘local life’ and the top performer Meituan is hard to fight.
• We believe the stock price has an upside of 88% for year end 2024.

• We revisit FY24 prospects by highlighting that historical full service carrier (FSC) earnings seasonality suggests group EBIT guidance of ¥130bn is very conservative.
• FSC FY24 EBIT guidance of ¥80bn implies only ¥9bn in 2H, 12% of 1H’s ¥71bn, whereas historically 2H has represented 74-83% of 1H. We model ¥59bn or 84% in 2H.
• Our ¥176.5bn group EBIT for FY24 is 36% above guidance but also 27% above Visible Alpha consensus, largely due to lower costs, which position JAL strongly for the long-term.

• Ferrotec shares have dropped by a third since last July and are now selling at 8.2x EPS guidance and 0.6x book value.
• Sales and operating should start to recover in 2H of FY Mar-24, led by power semiconductor substrates.
• Buy for the upturn in the semiconductor cycle and capacity expansion in Japan, China and Malaysia. No significant damage from the Noto Peninsula earthquake has been reported.

• Through November 2023, Bora Pharmaceuticals (6472 TT) reported revenue of NT$13.2B, up 50% YoY. Going ahead, we are upbeat on both CDMO and pharmaceutical businesses of the company.
• Bora’s foray into branded pharmaceutical market in U.S. should add a new revenue driver and improve margins. Generic portfolio should benefit from new launches amid better pricing environment.
• Through the first nine months of 2023, Bora has added 13 new customers and 28 new products to its CDMO business. Both the numbers are way above full-year 2023 forecast.

Edison Investment Research is terminating coverage on Kinarus Therapeutics (KNRS), Numis Corporation (NUM), EMIS Group (EMIS), Pixium Vision (PIX) and Treatt (TET). Please note you should no longer rely on any previous research or estimates for this company. All forecasts should now be considered redundant. Previously published reports can still be accessed via website

Edison Investment Research is terminating coverage on Kinarus Therapeutics (KNRS), Numis Corporation (NUM), EMIS Group (EMIS), Pixium Vision (PIX) and Treatt (TET). Please note you should no longer rely on any previous research or estimates for this company. All forecasts should now be considered redundant. Previously published reports can still be accessed via website

• Alibaba is transforming into a leaner, more efficient and more profitable technology company with sharpened focus on core business and shareholder return.
• While we don’t expect growth to define the company in the near future, high single-digit P/E more than compensates for the lack of it.
• This worst-performing and cheapest technology stock among global peers stands a big chance of staging a comeback in 2024 in our view.

• Anta Sports Products (2020 HK) announced a set of in-line 4Q23 operating data. 
• In addition, the company has filed a registration statement with the U.S. SEC on January 4 for a proposed listing of Amer Sports on the New York Stock Exchange. 
• Anta currently trades at a forward PE of 17x based on estimated 2024 earnings, compared to a historical forward PE of 24x since 2017.

• TSMC: 7.7% Premium — Spread Has Fallen Further, Likely Can Short a Bit Further
• ASE: Drops to 5.1% Premium — Can Consider Going Long at Current Level Due to Maxed Headroom & ASE’s Strong Advanced Chip Packaging Story
• CHT: Trading at -0.9% Discount — Good Level to Long the Spread, Rare Discount

• Amer Sports, 52.7% owned by Anta Sports Products (2020 HK), has finally filed a US IPO registration. This is positive for Anta Sports as it can realise Amer’s value.
• Reported losses at Amer have increased YoY for 9M23 due to higher finance cost. But, its gross, operating, and adjusted EBITDA margins have all recorded solid improvements. 
• Assuming Amer is listed at the sector’s average FY23 P/S of 1.6x, Anta Sports may book deemed disposal gain of HK$13.5bn, or about 6.8% of its market capitalisation.

• Chinese NEV (new energy vehicle) producers’ deliveries grew rapidly in 2023.
• PDD closed most “local life” businesses, including hotel booking, movie ticketing, etc.
• Jack Ma is no longer the controller of AliPay, the largest online payment app.

• Riding on multiple export contracts, Caregen Co Ltd (214370 KS) was confident of achieving KRW60–100B revenue from ProGsterol in 2023. However, during 9M23, ProGsterol clocked revenue of KRW8.5B.
• ProGsterol should rebound in this year, with the resumption of registration process in each country. Direct entry in the U.S. should be the strong catalyst for ProGsterol revenue this year.
• Caregen is developing an eye drop for wet macular degeneration. This is in phase 1 trial. The compay is preparing for phase 2 trial for COVID-19 nasal spray in Israel.

• Innovent has launched head-to-head phase III clinical trial of Mazdutide and Semaglutide. If the challenge is successful, it will have milestone significance. Domestic sales of Mazdutide will look very promising.
• Innovent received negative news on CEACAM5 ADC/KRAS G12C.When independent R&D cannot be relied upon, Innovent has to seek new sources of growth to make up for the remaining sales gap.
• There’s nothing wrong with Innovent’s development strategy by balancing both success rate and efficiency, although Innovent is hard to become a leader in cutting-edge R&D. We remain optimistic on Innovent.

• The last twelve months were, market-wise, interesting. Multiple things have happened that contributed to changes in my thinking-process.
• Refining thoughts and the mental mechanism I utilize to approach portfolio management should lead to success, or at least that is my hypothesis.
• Continuous learning allows for building more solid premises. Given time, compound interest sharpens them to the point where chances of error are minimum.

• The share price has increased by around 20% since mid-last year.
• A new revenue stream from the booking fee through the Zig app and calls that, albeit small, it was never possible to share upside with cabbies before. 
• Extension from 15 days to 30 days visa-free for Chinese tourists to come to Singapore on early 2024. 

• Human services company Millennium Services Group Ltd (ASX:MIL) has entered a Scheme of Arrangement with an entity associated with Softbank Robotics Singapore for the acquisition of 100% of shares at $1.15/share cash.
• Shareholders also have the option to accept a mix of cash and scrip in the new unlisted entity, with certain management committing not less than a total of 30% for this option.
• The bid price represents an 89% premium to the last RaaS update note (October 23) and 360% premium from July 1, 2023. 

• From a growth forecast of >20% YoY just two months ago, 2024 is now pegged as a low-to-no growth year
• This will be a big negative for the likes of Infineon, ST Microelectronics, NXP, Globalfoundries and HH Grace, among others. 
• Our anticipated gloomy Q423 earnings season just got a whole lot gloomier

• WuXi XDC remains our top pick in China healthcare. We’re optimistic about its share price performance. Cansino is stronger than imagined, and we recommend investors to be patient with it.
• The future competitive landscape of GLP-1s would present very different situation from traditional drugs. Innovent’s Mazdutide could be a “dark horse” if the head-to-head trial against Semaglutide is successful.
• For GLP-1s, it will be difficult to shake the first-mover position of the first two giants (Semaglutide and Tirzepatide) unless latecomers are able to show higher marginal benefits.

• Vanguard Intl Semiconductor (5347 TT) is likely to see that there could be a decline of around 10% QoQ in 1Q24F.
• In terms of revenue contribution, Taiwan, US, China, Europe, and Japan account for approximately 40%, 20%, 15%, 15%, and 10% respectively.
• Taiwan Semiconductor (TSMC) (2330 TT) may give up technology development at 40nm and above and transfer them to Vanguard.

• On January 4th, Microsoft announced a design change for PCs whereby a new physical key will be added to PC keyboards; the Microsoft Copilot key.
• Microsoft Copilot will become a must-have for companies in our view. Initial Copilot capabilities can dramatically improve worker productivity and this should help drive AI PC upgrades for the industry.
• CES 2024 Jan 9th – 12th will showcase AI PC models sporting Intel’s Core Ultra processors and Microsoft’s new Copilot key. We also update our Dell vs. Taiwan PCs trade.

• Anhui Conch Cement (914 HK) is trading at a historical low forward P/B of 0.5x, compared to an average of 1.2x for the last decade. 
• In the long term, China cement will likely see much lower volume and lower cement prices in the short term, but eventually rising cement prices due to better supply picture. 
• As the lowest cost producer, Anhui Conch stands a very good chance to win out in the long term and potentially more than double its current market share. 

• Our updated analysis suggests that JAL’s FY24 to March 2024 EBIT guidance of  ¥ 130bn remains conservative. We see  ¥ 177bn as achievable unless forward bookings weaken.
• Our analysis of JAL’s management of inflation highlights it is outperforming many APAC and global peers, keeping unit cost increases to a minimum. 
• Reduced overheads have proved the key driver of inflation avoidance, while stable unit personnel costs contrast starkly with US carriers in particular; JAL’s largest international market.

• PT Metrodata Electronics is Indonesia’s leading ICT distributor and one of the largest IT solutions & consulting companies, making it a play on growing digitalisation in the country.
• The company has seen strong demand from several sectors for its solutions & consulting business, most notably from banks for digital transformations, oil & gas, and telecoms 
• PT Metrodata Electronics is also seeing a strong rebound in its ICT distribution business, with its higher-margin solutions outperforming boosted by public sector growth. Valuations compelling on 8.7x FY2024E PER.

• The wafer demand outlook for 1Q24F should be around flat, but ASP (Average Selling Price) is expected to decline by negative mid-single digits.
• Compared to 4Q23, Mediatek Inc (2454 TT)‘s foundry demand is larger and Samsung Electronics (005930 KS)‘s foundry demand is downsized in 1Q24F. 
• United Microelectronics Corp (2303 TT) and Intel Corp (INTC US) are currently discussing the allocation issue of 12nm capacity.

• New China Life Insurance Co. Ltd. will partner with a unit of China International Capital Corp. (CICC) to set up a $1.4 billion fund to invest in companies with real estate assets, as the state-owned insurer taps the property sector for long-term returns despite a market downturn.
• New China Life said it has reached an agreement with China Capital Investment Group (CCIG) to forge the private fund, in which the insurance company will provide 9.999 billion yuan ($1.4 billion) as the limited partner. CICG will be the general partner with 1-million-yuan investment and will manage the fund.
• The fund, with a term of eight years, will focus on direct and indirect investment in companies holding property projects in their long-term portfolios, according to New China Life.

• Saudi Aramco and its Chinese partner Rongsheng Petrochemical Co. Ltd. have agreed to deepen their tie-up further by taking a stake in each other’s subsidiaries.
• China’s privately controlled refiner Rongsheng said it signed a memorandum of understanding with Aramco to buy a 50% stake in the Saudi company’s refining unit Saudi Aramco Jubail Refinery Company (SASREF).
• At the same time, Rongsheng plans to sell up to 50% stake in its unit Ningbo Zhongjin Petrochemical Co to Aramco, the world’s biggest oil producer, according to Rongsheng’s filing with the Shenzhen stock exchange on Tuesday.

• On track to scale – over the last 12 months we believe LaKeel has made progress in developing its ecosystem, driving new customer acquisitions, and increasing MMR for its key DX-related in-house LaKeel Products.
• While Q1-3 FY12/2023 results highlighted risks over license sale slippages, LaKeel’s strategy remains focused on providing innovative business and technology solutions with high ROI, and reducing IT ownership costs with reusable microservices and sustainable software development.
• Despite the slower-than-expected business development, we believe LaKeel’s products and services are differentiated to make headway in a market with a significant need for digital transformation, and its ecosystem will expand and become more commercialized.

• A10 Networks (ATEN) not warning about missing consensus estimates is a positive, but not enough for a victory lap after a volatile 2023
• The fourth quarter was of particular importance since the Company had reported third quarter revenue materially below estimates
• Service providers represented 50 percent of ATEN’s third quarter revenue compared to 67 percent in prior years. Throughout 2023 this customer base was not consistent with their purchasing

Newron has announced positive 12-month data from its Phase II extension trial (study 015) assessing evenamide in 161 patients with treatment-resistant schizophrenia (TRS). The results demonstrate desirable safety and tolerability, as well as durable efficacy of evenamide, showing statistically significant improvements (p-value <0.001) in all key efficacy measures (PANSS, CGI-S and LOF) versus baseline. We believe the results are favourable for Newron’s TRS programme and bolster the company’s plans to launch a potentially pivotal Phase III trial, which management expects to commence in Q224. We note that the company is also gearing up to share results from the Phase III trial (study 008A) for patients with poorly managed schizophrenia in March 2024, which could represent another significant catalyst for investor attention.

• We expect Q3 FY24 revenues/profits to be >40%/>70% YoY for Taste Gourmet (8371 HK) for their results in early February. 
• Another catalyst we look forward to in CY24 is the main board listing on HKex. The timeline, we believe, should be in the second half of the year.
• Trading at 6x PE with an 8.5% dividend yield and cash of 130 mn HKD, or about 21% of the market cap, is one of our top dividend gems.

• While domestic revenues may have slowed, Uniqlo’s domestic OP shows upside potential driven by gross margin growth and a gradual reduction in SG&A costs.
• Meanwhile, we expect Uniqlo’s International business OP to surpass ¥75bn, driven by a rebound in China demand  and strong momentum in South Korea, SE Asia & Ocenia.
• Thus, we see the upcoming earnings as a compelling opportunity for trading Fast Retailing (9983 JP).

• We argue that the top 20 listed construction companies in Korea are likely to underperform KOSPI in 2024 mainly due to the excessive risks in the housing/commercial real estate sectors.
• We expect the share prices of these 20 domestic construction companies to fall by at least 15%-20%+ on average in the next 6-12 months. 
• On 2 January 2024, Financial Supervisory Service (FSS) announced that there will be new reporting requirements for PF loans of Korean construction companies starting 2023 annual reports.

• Bajaj Finance Ltd (“BAF”) reported key performance metrics for Q3FY24. It reported strong growth, particularly in AUM which grew 7%+ QoQ and 35% YoY to reach INR 311,000cr.
• Customer franchise grew 5%+ QoQ to reach 80.41mm, surpassing the 80mm mark. New loans booked grew to 9.86mm, a growth of 26% YoY and 15%+ QoQ.
• The liability book also did well with deposits growing at around 6% QoQ and 35% YoY to reach INR 58,000cr.

• Alteogen Inc (196170 KS)‘s first proprietary recombinant human hyaluronidase liquid product, Tergase (ALT-BB4) is currently under approval process in Korea and is expected to receive approval in early 2024.  
• Tergase is a stand-alone hyaluronidase product that can be used for the treatment of various medical conditions, such as pain relief, edema treatment, and hyaluronic acid filler removal.
• Compared to commercially available animal-derived hyaluronidase products in the market, Tergase is a highly purified product of high-quality with very few impurities and an excellent side effect profile.

• BYD’s sales volume grew by 45% YoY in December, higher than 31% YoY in November.
• For the whole year 2023, BYD’s total sales volume rose by 62%.
• We conclude the stock has an upside of 74% for 2024.

• In this insight, we highlight the recent pricing gap divergences of the major Korean holdcos and opcos which could provide trading opportunities in 1Q 2024. 
• We highlight 38 pair trades that involve Korean holdcos and opcos.
• Of the 38 pair trades, 26 of them involved holdcos outperforming opcos in the past six months and 12 of them involved opcos outperforming holdcos in the same period.

• HKEX (388 HK) outlook has been withering for some time, and new data on property transactions, shows that this remains weak.
• SGX (SGX SP) in a less volatile geopolitical financial center, has a much lower market capitalization while its earnings outlook is far stronger.
• Two major differences between these two entities is their ROE and ROA, although the former may be more relevant. SGX (SGX SP) has an ROE that is nearly 50% higher.

• Kweichow Moutai (600519 CH) announced the preliminary result for FY23, with sales and net profit both up 17% yoy. 
• The overall weak consumer sentiment in China has not spared the Chinese liquor sector, as overall Chinese liquor demand has been lukewarm. 
• The current valuation for Moutai has become very attractive, and even if no rerating, the return is likely to be around 15% through earnings growth plus 2% from dividend yield.

• First of all, happy new year to all my readers! May 2024 bring market beating returns for everyone.
• Again I managed to underperform my blog stock picks by concentrating in the wrong stocks.
• Although I still ended up over 20% for the year, it was disappointing considering I was getting close to 30% in July.

• New product introductions have historically resulted in revenue growth at Ubiquiti (UI) and fiscal second quarter 2024 (December 2023) had several of them
• Ubiquiti has introduced a series of new products. The biggest change at Ubiquiti is the availability of paid for tech support
• There are several products that have stood out this past quarter. Including, a new Dream Machine meant for the home, called UniFi Express. The device immediately sold out

• In this insight, we discuss numerous gap trades involving Korean preferred and common shares in 1Q 2024. 
• The excessive gaps in the preferred and common shares of Kumho Petro Chemical, Amorepacific Corp, and Samsung Electronics could reverse in the next several months.
• We see some attractive longer-term opportunities for Amorepacific, Doosan Fuel Cell, LG Electronics, and CJ Cheiljedang which have especially high discounts for the preferred shares versus their counterpart common shares.

• We doubt if PetroChina (857 HK) can sustain good performance in 2024. On historical patterns, it has never sustained as one of HSI’s best-performing stocks for two consecutive years. 
• Consensus growth forecasts of 4.4% and 4.3% for FY24-25 are likely wrong as this means FY25 will be the 5th straight year of growth. PetroChina does not behave like that. 
• Crude oil price has got back to the end-2022 level, but PetroChina’s share price is still 50% higher. A return to their high correlation before 2023 will lead to underperformance. 

Following our short update on the La Colorada Skarn preliminary economic assessment (PEA), we are revising our valuation of Pan American Silver (PAAS) to incorporate the Skarn’s risked NPV. We have also reflected up-to-date commodity prices and lower WACC thanks to the reduction in bond yields. Overall, our valuation of PAAS increases from US$22.7 to US$23.5/share. While the stock has recently been propped up by the strong gold price, we see the upcoming publication of the FY24 outlook and FY23 results as potential additional catalysts for the shares.

• Yichang HEC Changjiang Pharma (1558 HK) is set to benefit from the recent upsurge in respiratory illness in China. The company commands ~90% share of anti-flu drug market in China.
• In 1H23, HEC Pharma’s revenue jumped 148% YoY to RMB3.2B, mainly due to spiking flu cases in China. A strong flu season in 4Q23, should boost H2 performance.
• Despite a 43% rally in HEC Pharma share price over the last six months, the shares are trading at forward P/E of just 4.8x.

• Japan Airline’s Flight JL516 operated by a two-year-old Airbus A350-900 burst into flames upon landing at Haneda Airport, apparently hitting a small Japanese Coast Guard aircraft  
• 379 passengers and crew were safely evacuated, but five of six crew on a Japanese coast guard aircraft were unaccounted for
• Haneda Airport runaways are all closed, aircraft heading to Haneda are diverted to other airports or flights aborted altogether   

• Ushio has tied up with Applied Materials (AMAT) to develop lithography systems for package substrates using AMAT’s Digital Lithography Technology.
• This should keep the focus on Ushio’s more advanced technologies (which also include EUV mask inspection light sources) and its potential to rebound with the semiconductor cycle.
• The shares have dropped back 10% since mid-December, providing an entry point. 3Q results are scheduled to be announced on February 9.

• China Tourism Group Duty Free Corp Ltd (601888 CH) (CTG) announced last week a new supplementary contract for its duty-free airport businesses in Beijing and Shanghai airports
• The new deal aims to promote collaborations between the airports and CTG, acting like true partners. However, we think it is more positive for airports and slight detriment to CTG
• Maintain our Bullish call with an unchanged target price of CNY106 (+27% UPSIDE), based on the company’s lowest recorded PE ratio in the past 10 years of 23.2x into FY24

• Dada Nexus Limited (DADA.OQ) (“Dada”), with a market cap of USD 869.9 million, is one of China’s leading on-demand retail platforms holding around 20% market share behind Meituan (42%, 3690.HK) and Ele.me (24%, Alibaba-owned).
• Dada, a 54% subsidiary of JD.com (JD.OQ; 9618.HK) and 9% owned by Walmart Inc. (WMT.N) operates two core businesses, namely:

• JD Daojia (JDDJ), which is a local non-restaurant online to offline (“O2O”) retail marketplace

• SDRL ended 2023 with a contract that is poised to set the course for day rates moving higher in 2024. Prior to Christmas, SDRL announced two new contracts with PBR
• We estimate one of the contracts has a day rate of $500,000 and should result in other bidding activity to reach and eventually exceed this level in 2024
• We are not making changes to our earnings model and believe there is now greater potential for our estimates having to be revised higher

Following an extensive drilling campaign, on 14 December, Alkane announced an update to its Boda mineral resource estimate to include Boda Two and Three, as expected in Q423. The result of the update was a 30% increase in the gold grade and a 22% (or 1.17Moz) increase in contained gold at Boda, which we value at US$28.2m (4.7 US cents or 7.0 Australian cents per share). The Boda deposit remains open at depth and along strike and a subsequent resource update at Kaiser is anticipated in late Q1 CY24 as well as a conceptual mine plan at the combined Kaiser-Boda deposit in due course.

• WuXi XDC looks like “an outlier” among domestic CXOs – Its share price has performed well so far. As a niche player, WuXi XDC’s short-term performance growth is relatively guaranteed.
• We analyzed the valuation of WuXi XDC Cayman (2268 HK) under different scenarios. How much upside WuXi XDC’s valuation would have depends on the future real market size of ADCs.
• We’re conservative about whether we could have a US$50 billion ADC market. The “lucky” part for WuXi XDC is the current ADC market brings “a safe window period” for investors.

• Eisai Co Ltd (4523 JP) shares corrected more than 60% from highs over the disappointment from Alzheimer’s disease drug Leqembi. During H1FY24, Leqembi reported revenue of just ¥400M ($3M).
• With approximately 40% revenue contribution, anti-cancer drug Lenvima is the top selling drug of Eisai. In the U.S., Lenvima patent protection will start to expire in US in October 2025.
• In December, Eisai has submitted a marketing authorization application in Japan for tasurgratinib for biliary tract cancer. If approved, tasurgratinob will be a late entrant in a crowded market.

Cyclical weakness in Carr’s Group’s Speciality Agriculture business has affected the company’s fortunes of late. However, the new management team, a strong net cash balance sheet and a record order book in the Engineering division offer optimism. Operational progress, particularly a reversal of fortunes in Speciality Agriculture, should rebuild confidence and a reduction in the current discount to our view of the underlying value.

• China’s outbound tourism recovery started much later than others in the region
• In particular, Taiwan & Korea began ramping outbound travel earlier (in Q222)
• As destinations, Thailand & Vietnam recovered early, but now lag HK’s growth

• CIMC Enric Holdings (3899 HK) has applied for its liquid food segment, under CLTP, to be quoted on the NEEQ. Subsequently, it plans to be listed on the BSE.
• The move will not only provide an additional funding channel for this business but also enhance the valuations of CIMC Enric. BSE’s IPOs have historically performed very well.
• Upon successful listing, the attributable market cap of its two listed subsidiaries will be greater than its current market cap. This means its clean energy business is free.

• Our estimations for FY 2023 annual revenue range at around £24,234 million and for 2024 at around £26,415 million.
• The company’s annual revenue reached £21,258 million in 2022 compared to £19,521 million in 2021, posting an increase by 8.9%. BAE Systems operating profit for FY 2022 was £1,989 million, increased by 11.87% compared to £1,778 million for the corresponding period of 2021.
• In addition, EBITDA amounted to £3,151 million in 2022, while EBT and EATAM amounted to £1,989 million and £1,591 million respectively.

• For this edition, we focus on our 2023 Bloopers, to improvise rather than get embarrassed.  We also share some thoughts on potential enhancements that can be anticipated going forward.
• On the NIFTY Index (NIFTY INDEX), we are still not bearish but do not find the markets to be very attractive either.
• Bloopers in focus include Zomato (ZOMATO IN); CarTrade (CARTRADE IN) ; Hero Motocorp (HMCL IN) and Aavas Financiers Ltd (AAVAS IN). 

• The authorities granted licenses to 105 new domestic games and promised to review the game law draft.
• Alibaba is restructuring its main business unit, Taobao-Tmall, to reach flexibility.
• Both Alibaba and JD.com changed their refund policies to follow PDD.

• Long Nvidia vs. Short Basket of Taiwan AI Concept Stocks — The trade has held steady since our last piece with Nvidia outperforming the shorts slightly.
• CES 2024 will be held January 9th to 12th. It will showcase AI expanding into a wide range of Edge AI applications such as home appliances and PCs.
• One can maintain the L/S trade into CES 2024 given that the Taiwan AI Short Basket constituents are unlikely to be beneficiaries of positive news flow from the event.

• Oasis Management has become a major shareholder in Lifenet in November. Together with another activist investor, Effissimo Capital (the largest shareholder), they now control >30% of the company.
• Company announced some new partnerships/initiatives to drive growth but they don’t seem to be materially different from what it has been doing to turn around its declining VoNB.
• Unless we can see a sustained trend of improving VoNB, it’s difficult to justify the premium valuation vs. the other more established peer.

• TSMC: 9.2% Premium — Spread Fell But Remains Historically High; Short Interest Spiked for ADRs
• UMC: Trading at -1.2% Discount — Still Uncompelling, Wait for Lower Levels
• ASE: Drops to 7% Premium — Could Soon Be at a Level to Go Long

• Nvidia Vs. Taiwan Short Basket: Hedge Working; CES 2024 Likely Positive for Nvidia Vs. Basket
• Silicon Motion: Next Wave of the Memory Recovery; High-End NAND Prices More Than Doubled From Lows
• AI PC Reality Check: PC Upgrade Cycle Ahead, But Worth a 50% 1M Acer Rally? Long Dell Vs. Short Acer

• Recent results from Micron and SK Hynix did not only signal a recovery for DRAM but also for NAND flash memory. Micron expects improving NAND pricing through CY2025E.
• Latest data shows a surge in NAND pricing — 512GB NAND pricing is now up 116% from its 2023 lows.
• Silicon Motion shares are down 5% over the last year. They have been weighed down by their terminated acquisition by MaxLinear, but now could offer a laggard play.

• Marvell Technology managed to surpass Wall Street’s revenue and earnings expectations, achieving a commendable revenue of $1.42 billion, marking a 6% sequential growth above the midpoint of the provided guidance.
• The data center end market witnessed revenue of $556 million in the third quarter, surpassing expectations, mainly driven by robust AI revenue.
• Despite the anticipated decline in enterprise on-premise revenue, Marvell’s diverse product portfolio, including PAM4 optical products and Teralynx Ethernet switches, contributed to the broad-based growth.

• The gradual upward trend in monthly sales, which has continued through November, has further to go in our estimation. 
• At 22x EPS guidance for FY Mar-24, the shares are at the low end of their 5-year P/E range.
• Guidance remains unchanged. 3Q results are due to be announced at the end of January

• Ministry of Finance and National Health Commission issued new policy strictly prohibiting public hospitals from borrowing to purchase medical equipment, which will change the investment logic of medical device sector.
• “PD-1+ADC” is expected to replace “PD-1+chemotherapy” as the first-line standard therapy. This will be a huge market. So, good story of ADC CDMO (such as WuXi XDC) would continue.
• The inspiration that AstraZeneca’s acquisition of Gracell brings to investors is IPO isn’t the only way for exit.Being acquired is also good, which will become more important in the future.

• Alteryx, Inc. delivered a solid result and managed an all-around beat in the last quarter, demonstrating commendable performance across various fronts.
• These achievements were propelled by improved sales execution and heightened customer commitment to the Alteryx platform.
• Alteryx’s Executive License Agreement (ELA) strategy, featuring simplified pricing and bundled features, resonated well with larger organizations.

• Alibaba Group Holding Limited delivered a mixed set of results for the previous quarter, with revenues below the analyst consensus.
• For Taobao and Tmall Group, the emphasis lies on user-centric strategies, universal market coverage, multi-tiered consumer engagement, and maintaining price competitiveness.
• The Local Services Group concentrates on location-based technology services, with Amap focusing on mobility and Ele.me on-demand services.