Equity Bottom-Up Archives | Page 78 of 222 | Smartkarma

• Ryohin Keikaku (7453 JP) will announce FQ4 results on October 13th; we expect earnings to beat consensus by ¥2-3bn, potentially boosting stock performance.
• FY24 OP guidance at around ¥55bn could be a catalyst for significant upside potential in the short term.
• The current share price of approximately ¥1,800 per share supports an annual OP of roughly ¥30bn, indicating nearly 100% upside potential with FY24 guidance.

• On 10 October, Kiwoom Securities announced shareholder friendly policies. This could lead to Kiwoom Securities outperforming other major Korean securities companies in the next several months. 
• First, the company will return more than 30% of its net profit to the shareholders in the next three years through dividends and share buybacks/cancellations of treasury shares.
• In addition, Kiwoom Securities plans to cancel all 1.4 million treasury shares it currently holds, representing 5.3% of outstanding shares.

• Shenzhen International (152 HK) is well set to post a significant YoY and HoH growth in earnings in 2H23. Our discussion with the company confirmed this.  
• Profit from Yicheng Qiwanli is expected to be booked and there will be profit upside from REIT listing with logistics hubs at Hangzhou and Guizhou as underlying assets.
• Significant reduction in USD and HKD-denominated debt will reduce its exposure to foreign exchange losses as well as high interest rate, both will be reflected in 2H23.

• The results for Bank Of Queensland (BOQ AU) are illustrative of risks for the mainstream banks in Australia and market expectations
• Even with almost all residential mortgage loans, BOQ’s credit costs rose from AUD13m to AUD71m YoY and Pillar 3 data shows mortgage NPLs up nearly 10% in past 2 months
• Net interest income only +6% YoY and -8% HoH, with operating costs +8% YoY and fee income down, there is nothing core holding the P&L together

• Universal Vision Biotechnology (3218 TT) reported continued growth in 1H23, with revenue, operating profit, and net profit increasing 25%, 31%, and 31%, YoY, respectively. 
• Revenue from high-margin technical service grew 23% YoY, driven by increasing number of refractive and cataract surgeries performed in Taiwan. UVB dominates refractive market in Taiwan, with 50% market share.
• With dominant market positioning in Taiwan, re-opening in China, secular market tailwinds, and widening geographic presence, UVB is expected to report double-digit top and bottom-line growth through 2025.

Ahead of interim results covering the six months to 30 September 2023, to be published in November, Picton Property Income has published a portfolio and asset management update. The company expects the continued progress with a range of initiatives, across all sectors, including leasing, asset enhancement and non-core disposal, to be accretive to NAV and income. Ahead of the results, our forecasts are unchanged.

• PAGD successfully narrowed net loss. It seems that the Company doesn’t mind “sacrificing” revenue scale, which could be considered “a necessary price” to pay for the transition to 2B model.
• PAGD mainly rely on Ping An Group channels to acquire B-end and F-end users, but based on our calculation, PAGD would encounter an obvious growth ceiling at certain revenue scale.
• Although PAGD could achieve breakeven by divesting businesses with low strategic synergies and effective cost control, the Company’s long-term growth potential and prospects remain uncertain, leading to discounted valuation.  

1Spatial’s H124 results show robust revenue growth and continued improvement in the revenue mix, with recurring revenue growing by 24%. Investment in sales resource, inflationary pressures and FX compressed margins, but a strong pipeline for both renewals and SaaS products could drive revenues and margins in H2 and beyond. In particular, the market opportunity for both 1Streetworks and NG9-1-1 has the potential to be transformative. We have upgraded our revenue forecast but leave earnings largely unchanged. Good conversion of the SaaS pipeline could justify further revisions, which may not be reflected in the current valuation.

Newron has announced encouraging interim six-month data from its Phase II trial (study 014/015) of evenamide in 161 patients with treatment-resistant schizophrenia (TRS). The six-month interval data for treatment at all dose levels showed evenamide was well-tolerated and efficacious, with statistically significant responses (p-value <0.001) across the key efficacy measures (PANSS, CGI-S and LOF). The interim data also provide inputs for the potentially pivotal Phase III trial (study 003), which we expect to start in Q124. We note that one-year data was reported on the first 100 participants of study 014/015 in May 2023, and we now await the complete one-year data from the full 161-patient cohort, expected in Q124. If favourable, this could be a significant inflection point for the company.

FY23 trading has continued according to the early August update, demonstrating the benefit of two unrelated activities at Carr’s Group: the Engineering division’s strength countering the weakness seen in the Speciality Agriculture business. Both have underlying longer-term growth attractions to drive earnings, along with the recovery potential in the agriculture end-markets.

• India’s inclusion in global bond indexes by JP Morgan is significant, but the expected foreign inflow is relatively small, not likely to impact exchange rates or interest rates significantly.
• The bond inclusion won’t strengthen the Rupee against the Dollar due to limited foreign inflows. A slight reduction in interest rates is expected with JP Morgan’s inclusion.
• Indian bonds offer attractive yields, but rising US bond yields and rupee depreciation could affect foreign investor interest. This development could lead to improved fiscal policies and Indian bond markets.

• In this insight, we discuss a pair trade between CTCI (long) and Ruentex Development (short). 
• We believe CTCI Corp is more attractive than Ruentex Development mainly due to different types of business mix and valuations. 
• CTCI’s construction of refinery plants, waste water treatment, and power plants could thrive in higher oil price environment. Ruentex’s construction of residential and commercial buildings could experience lower demand. 

• A new electric car powered by Huawei’s autonomous driving technology has hit the market with a bang, attracting tens of thousands of orders in less than a month and giving the telecom-equipment giant a confidence boost as it pushes further into China’s highly competitive auto market.
• As of Friday, more than 50,000 orders have been placed for the upgraded version of the Aito M7 SUV since it was launched on Sept. 12, said Richard Yu, chairman of Huawei’s smart car unit, in a social media post Saturday.
• For each order, customers paid a non-refundable deposit of 5,000 yuan ($695), according to information provided by Aito — a premium electric-vehicle (EV) brand co-developed by Huawei Technologies Co. Ltd. and automaker Seres Group Co. Ltd.

• In June quarter Starbucks comparable store sales increased 46% YoY and reached to 80% of the level in the same period of 2021.
• China revenue increase purely came from transaction, but not average ticket.
• We believe Starbucks China data can be a good monitor of Chinese economy.

• China Tourism Group Duty Free (1880 HK) announced preliminary results for 3Q23 which came in below market expectations.
• Compared to the previous quarter 2Q23, sales declined by 1% q-o-q, while net profit margin declined from 10.4% in 2Q23 to 8.9% in 3Q23. 
• The company (H-share) is trading at 26x 2023E PE and 23x 2024E PE, still expensive as visibility is low and derating continues. 

• Devyani International (DEVYANI IN) is one of the largest franchisee of Yum! Brands Inc (YUM US)  in India and operates brands like KFC, Pizza Hut and Costa Coffee, etc.
• After a turbulent pandemic, the company has reported growth in topline and robust profitability in F22 and F23. But, these have been boosted by several one-off items.
• The company also faces difficulty in generating positive FCFs while we also remain caution about the Nigerian Operations and the associated forex losses.

• Fair value gains are the single most important driver of good net profit at King’s Town Bank (2809 TT) in the most recent quarter.
• Monthly revenue figures show strong 179% growth YoY in September, which we can see before any 3Q23 release.
• Credit costs rose from 43bps to 83bps of loans from 1Q23 to 2Q23, which is a significant increase, may be more reflective of underlying operations.

• Cosmecca Korea (241710 KS) clocked revenue of KRW115.7B (up 15% YoY) and operating profit of KRW11.2B (up 265% YoY) in Q223. Operating profit margin expanded 670bps YoY to 9.7%.
• Cosmecca is a key beneficiary of the increasing global demand for the affordable indie cosmetics brands. These brands are now outpacing the overall beauty and personal care industry.
• Since reporting strong Q1 result in May, Cosmecca Korea shares are on fire. Cosmecca is expected to continue its growth momentum due to strong global demand for affordable cosmetics.

BlackRock Greater Europe Investment Trust (BRGE) manager Stefan Gries seeks high-quality growth stocks that he can hold for the long term. The manager prides himself on being an ‘investor in businesses, not a trader in shares’ and stresses that his selective approach of focusing on the best businesses that are based in Europe means that investors do not need to have a positive view on the European economy to consider the trust. BRGE has a solid five- and 10-year record of outperformance versus the Europe ex-UK market, despite a difficult period in 2022 when growth stocks came under pressure in a rising interest rate environment. The trust also ranks favourably versus the averages of its peers in the AIC Europe sector over the last one, three, five and 10 years.

• Genuine Parts Company delivered mixed results for the previous quarter, with revenues below the analyst consensus.
• The company reported total sales of $2.3 billion for the quarter, marking an impressive increase of $125 million.
• In this report, we have carried out a fundamental analysis of the historical financial statements of the company.

• Money Forward’s share price dipped 20% post-Q2 results, but strong operational performance and upward sales revisions make it appealing.
• We expect 42% YoY sales growth in Q3 and believe long-term growth prospects remain exceptional against the market size.
• Management to deliver profitability next FY, meeting investor demands to “show me the money” – we remain bullish

• Hisamitsu Pharmaceutical Co (4530 JP) announced mixed Q2FY24 result, with single-digit revenue growth and bottom-line decline. Revenue grew 5% YoY to ¥34.9B, while operating profit declined 8% YoY to ¥4B.
• Salonpas line of OTC pain relieving patches have become major growth driver of the company. In Q2FY24, Salonpas revenue increased 14% YoY, lowest growth rate reported in last five quarters.
• Despite 70%+ progress of operating and net profits, Hisamitsu reiterated FY24 guidance. Declining margins, anticipated increase in SG&A expenses, and high base call for massive fall in profit in H2FY24.

• Our dealer checks across a couple of Eicher Motors (EIM IN) and Bajaj Auto Ltd (BJAUT IN) dealerships indicate a strengthening competitive position for Royal Enfield. 
• After the initial hype, customers are now shifting back to Royal Enfield. 
• As competition ramps up production, we continue to believe that the market will expand, and there will be no fight for market share.

• WuXi AppTec’s share price has performed well recently, mainly driven by CXO’s “immune attributes” to anti-corruption campaign, investors’ bullish view of weight loss drug business, and the previous oversold rebound.
• Peptide CDMO business would contribute limited incremental performance to WuXi AppTec considering overall large business volume.Downward trend of CRO business is hard to be hedged by weight loss drug business.
• Due to higher-for-longer rate, China CXOs only have rebound value, but no reversal logic. It’s time to consider taking profits in a timely manner before the share price falls again.

• South32 is an Australian metal and mining firm spun off from BHP in 2015. Unlike mining majors, South32 holds smaller but concentrated assets.
• Aluminium operations is the firm’s primary revenue source followed by coking coal operations. Coking coal contributes to 32% of the underlying EBITDA.
• With its share price having got battered, South32 stock is compellingly priced relative to MVR ETF paving way for a compelling long-short trade.

• The index seems to be finding support at 19,500 for the second consecutive week. Bullish momentum could resume when we close above 19,800 on the NIFTY Index (NIFTY INDEX) .
• Names discussed include Titan Co Ltd (TTAN IN), Maruti Suzuki India (MSIL IN) and Metro Brands (METROBRA IN).  
• We also introduce the Earnings Diary which will be part of the publication, tracking estimates and narratives around over coverage. 

• 2Q23 production was 19,961 bbl/d with the difference to our forecast mostly reflecting the timing of drilling.
• Wassana (1.6 mbbl/d production during 2Q23) was offline in 3Q23.
• Our YE24 estimated net cash (~US$450 mm given the late tax restructuring) represents 1.6x the current market cap of the company.

• Key milestone in FDA approval. On October 6, Marizyme, Inc. (MRZM) announced a key milestone in its growth strategy, with FDA approval of its flagship DuraGraft (DG) technology for the US market.

• Improved outcomes when used in cardiac care. DG has been proven to result in significantly improved outcomes and lower costs for cardiac surgery through multiple clinical trials as well as utilization in selected markets in Europe and Asia where adoption has recently accelerated.

• Reflecting that, YTD DG-driven revenue is already more than double the level of 2022.

• Micron Technology, Inc. delivered a positive result and managed an all-around beat last quarter.
• Their management has provided insights into the ongoing underutilization charges and inventory write-downs that have impacted the company’s financials.
• This rise in underutilization has led to corresponding charges in the fourth quarter, which are expected to continue into fiscal year 2024.

• Outbound daily traffic during the long holiday down -15% vs 2019, and short of expectations
• Total domestic trips up 4% vs 2019, but average daily trips -9% & average daily spending -4%
• Ten months in, the pace of China’s 2023 tourism recovery remains disappointingly sluggish

• Vanguard’s order visibility is about two months, and its order backlog is also about two months now.
• Vanguard’s goal is to establish a 12″ wafer Fab, which we estimate will likely be viable around 2026F.
• We believe that technology nodes below 28nm HKMG, specifically 40nm and below, would be suitable for transfer.

• The YTD underperformance of Dongfang Electric (1072 HK) has put it on very attractive PER of 5.8x for FY23. More importantly, it has delivered both earnings and new order growth. 
• Financial position has improved with net cash of Rmb16.5bn and its recurring earnings soared 26.5% at 1H23. The adverse economic environment has not had an impact on its operations.
• New orders amounted to Rmb48.9bn (+33.3% YoY), a record high, and we estimate backlog at Rmb166bn. This equals 2.5x FY23F revenue and suggests forward earnings are well covered.

• Samsung Electronics and Nanya Technology will report their results this week. Samsung could reportedly increase NAND prices this month, giving a potential hint to the memory outlook they will provide.
• Hon Hai will begin mass production of its Model C electric car in 4Q23E in Taiwan. This will provide a proof point for Hon Hai’s global EV platform business model.
• Top gainers recently have included rebounding AI names — One can consider using the bounce to find AI shorts to pair against an Nvidia long.

• Banks lead Q3 2023 net institutional inflow INSTITUTIONS were again net buyers of Singapore stocks over the five trading sessions through to Oct 5, with S$100 million of net institutional inflow, and 24 primary-listed companies conducting buybacks with a total consideration of S$38.5 million.
• ComfortDelGro saw S$71 million of net institutional fund inflow in Q3 2023, after booking S$44 million of net institutional fund outflow in H1 2023.

• IN THE third quarter of 2023, the Straits Times Index (STI) generated a 2.1 per cent total return, bringing its nine-month total return to 3.3 per cent.
• During the quarter, the STI marginally outpaced the FTSE Asean Extended 60 Index and FTSE Asia Pacific Index, which recorded total returns of 1.1 per cent and declines of 1.1 per cent, respectively.
• On the other side of the “higher-for-longer” Fed funds rate outlook, the iEdge S-Reit Index declined 4.2 per cent in total return in Q3 2023.

• Has SK Innovation raised enough money for its longer term ambitions? 
• What is the stock pricing in that is not apparent on the balance sheet? 
• It seems really given their capex outlet, dilutive cap raising is the only solution

• Weight loss drug business has indeed significantly alleviated concerns about overcapacity issue in those leading CDMOs, but they do not have such a strong driving force on CROs.
• The last straw that hits an industry is often not due to the disappearance of demographic dividends/declining demand/poor financial performance of companies, etc., but rather to policy-guided capital flows.
• 3D Medicines (1244 HK) can be said a typical negative example in biopharmaceutical industry, and it is easy to be “manipulated”. We recommend investors stay away from such high-risk company.

• In this insight, we provide the major changes in NPS’ stakes in 25 Korean companies in 3Q 2023.
• In 3Q 2023, NPS reduced its stakes in the IT, construction, and contents related stocks. On the other hand, NPS increased its stakes in China’s re-opening and cosmetics related stocks.
• Five Korean cosmetics stocks that NPS net purchased in 3Q 2023 are up on average 12.8% from end of June 2023 to as of 6 October 2023. 

• Cost at PNB are high and rising, a major drag on its ROA and RORWA, which largely offsets better credit metrics.
• There are many market positives in India banks, but relative to all large peers, Punjab National Bank (PNB IN)has the lowest RORWA
• There is no LDR expansion at PNB. NIM is languishing. Its high 20% govt loans/total loans is high, with 2 peers’ even higher, but better returns.

• Selamat Sempurna remains one of the most interesting industrial players in Indonesia, as an auto and heavy equipment components manufacturer, leading the replacement filter market, and exporting to 100 countries. 
• The company booked growth in sales in 1H2023, despite coming from a high post-COVID base, with margins improving due to lower raw material input prices, without any price rises.
• Selamat Sempurna (SMSM IJ) remains confident in the outlook for the rest of the year and expects sales growth to pick up in 2024 to around +15%. Valuations are attractive.

• Legend Biotech Corp (LEGN US) reported six-fold jump in revenue to $73M in 2Q20, driven by strong uptake of the sole commercialized drug, Carvykti, which generated worldwide revenue of $117M.
• Label expansion applications have been submitted to the FDA and EMA seeking approval of Carvykti for the earlier treatment of patients with relapsed or refractory multiple myeloma.
• Legend Biotech has 11 pipeline programs covering hematologic malignancies and solid tumors. Recent financing activities have fueled the company’s cash balance to $1.5B, which should provide cash runway through 2025.

• Calima Energy (CE1 AU); target price of A$0.45 per share: Operating update in Canada – The 3-well Pisces drilling programme has now been completed.
• 3Q23 production levels continue to be affected by weather related energy cuts and unforeseen work-overs.
• Valeura Energy (VLE CN)C; target price of C$6.40 per share: 3Q23 update – 3Q23 production was 19,961 boe/d.

• Universal Display Corporation managed to exceed the revenue expectations as well as the earnings expectations of Wall Street.
• The company announced $147 million in revenue, $59 million in operating profit, and $50 million in net income, or $1.04 per diluted share, for the second quarter of 2023.
• Universal Display’s revenue guidance range for the year has been reduced from $560 million to $600 million.

• Discovery, Inc. delivered a disappointing set of results as the company could not meet the revenue and earnings expectations of Wall Street.
• The company generated almost $1.7 billion in free cash flow this quarter, and the team anticipates around the same in Q3.
• Their global direct-to-consumer business was mildly EBITDA positive for the first half of this year and nearly breakeven in the second quarter.

• During the recent quarter, McCormick showcased mediocre performance with below-par revenues and on-par earnings.
• In terms of highlights, the company reported constant currency sales growth and noted an improvement in volume performance, excluding China, throughout the year.
• In the Flavor Solutions segment, McCormick continued its exceptional growth momentum, with the third quarter marking its tenth consecutive quarter of double-digit constant currency sales growth.

• Qualys, Inc. delivered an all-around beat in the previous quarter.
• The channel’s share of revenue stayed at 43% from the previous quarter.
• By geo, their overseas business rose 12%, outpacing the 16% rise in the U.S.

Pan American Silver (PAAS) announced the temporary suspension of all operating activities at its La Colorada mine in Mexico due to security concerns at the mine site following the concentrate robbery. The company has not yet provided any indication of the potential restart of mining activities. We currently maintain our estimates and valuation, awaiting more clarity on the timing of the restart.

• Eoflow’s share price has dropped 27% lower than the proposed tender offer price of 30,000 won. Two major factors have negatively impacted Eoflow (294090 KS)’s share price.
• First, in September 2023, there were new data that suggested that popular weight loss drugs including Ozempic and Wegovy could reduce the need for insulin injections with patients with diabetes.
• Second, the ongoing lawsuit by Insulet continues to remain a major headache. Eoflow is not a KISS (“Keep It Simple Stupid”) stock.

• Fast Retail Full-Year Expectations: Anticipate strong FY results, but potential FY8/24 guidance headwinds include weather impacts and yen weakness.
• Management Guidance Risks: The key risk would seem to be China outlook; Japan/Europe’s heatwave impact on fall season; potential for gross margin pressures.
• Valuation: Despite growth prospects, concerns over cyclicality and valuation relative to peers persist.

• Xinyi Glass Holdings (868 HK)‘s stable auto glass business is often overlooked, making up 39% of the company’s gross profit in 1H23.
• Given the current valuation of 7x 2023E PE and 1.3x 2023E PB, the risk reward is skewed to the upside, and downside is protected with the stable auto glass business. 
• The company’s management has been aggressively increasing stake in the company in the last 2 months, gobbling up 11 million shares.

• It is expected that TSMC will have full capacity utilization of 3nm and 5nm technology nodes starting from 1Q24F.
• Regarding 3nm technology, the EUV mask layer will be reduced.
• The total number of iPhone 15 units sold in 2023F is expected over 85 million.

• Higher for longer rate regime makes it difficult for NextEra Energy Partners to raise debt to fund high growth forcing a reduction in growth forecasts.
• Markets have reacted sharply to slashed forecasts with shares of NEP (-52%) & NEE (-22%). Growth is expected to remain lower in the future.
• NEE has performed markedly better than NEP. This is reflected by analyst price targets. However, NEE’s long-term growth story has stumbled raising investor concerns.

• Samsung Biologics (207940 KS) expects 2023 revenue to grow by more than 20% YoY compared to 15–20% YoY growth expectations earlier, due to better-than-expected utilization of Plant 4.
• For the first time in the company’s history, Samsung Biologics has won contracts worth nearly KRW3T during the first half of 2023, with eight contracts worth more than KRW100B each.
• Anticipating strong demand, Samsung Biologics is building its fifth manufacturing plant with 180KL capacity, which is expected to be completed by April 2025.

• SBI Holdings (8473 JP) may not be the easiest company to analyze with its many pages of affiliates, but at the least, it’s profit momentum is strong.
• Securities Group profit is key to the company where growth is excellent in earnings and in the number of new accounts, across many businesses.
• Its two banks in Japan are doing well, growing faster than others, but still SBI Holdings (8473 JP) is more of an alternative financial company to a traditional bank.

• Power output for China Power International (2380 HK) is healthy in Jul-Aug, following the solid trend in 1H23. The drop in hydropower has moderated and wind and solar stayed decent.
• Capacity growth will reach 43% in FY23. With just 7.8% YoY in 1H23, most of the new capacity will be added in 4Q23, accelerating both output and profitability.
• The parent SPIC’s massive clean energy assets are candidates for potential injection. CPI’s high EPS CAGR of 28.8% means that it well deserves premium valuation multiples. 

• • The Indico 6 and Indico 7 wells in the CPO-5 block in Colombia are now back online.
• Each well is expected to reach 4,000 bbl/d gross production (8,000 bbl/d gross total, 2,400 bbl/d net to GeoPark).
• The total gross production of both wells could reach 9,000 bbl/d by YE23.

• ATEN continues to experience challenges with order timing from some of its largest customers. ATEN lowered Q3 revenue forecast after North American service providers delayed their purchases in the quarter
• ATEN has spent the entire year trying to add more enterprise customers to offset this volatility and, while successful, it was not enough in the third quarter.
• ATEN is projecting third quarter revenue between $56.5 million and $58.5 million compared to our estimate of $75.3 million.

• CJ Corp’s share price declined sharply by 10.7% to reach 80,200 won on 4 October. CJ Olive Young is the number one health & beauty store chain in Korea. 
• According to local media, CJ Olive Young is in danger of being fined large amounts of money by the Fair Trade Commission (FTC).
• It appears likely that CJ Corp’s share price could fall further close to the five year low end of the trading range (60,000 won) in the next several weeks.

• Rakuten Group (4755 JP)‘s shares plummeted 80% in 8 years, reaching ¥500 in June 2023 due to ¥1.3 trillion mobile business losses.
• Expecting a positive shift as Rakuten Mobile approaches platinum band access and subscribers poised for exponential growth following the KDDI agreement.
• We are expecting Rakuten Mobile to turn profitable next year, while the consensus is projecting an operating loss of around ¥200bn for the business.

• Taeyoung Engineering & Construction (009410 KS) is the 25th company in our Korea Small Cap Gems series.
• Taeyoung E&C is a mid-sized construction company in Korea with a market cap of 146 billion won. Its shares are trading at P/E of 1x and P/B of 0.2x. 
• At the end of 1H 2023, the company had 6.1 trillion won in order backlog, representing a backlog/sales ratio is 2.3x.

• Apar Industries (APR IN) is the global leader in aluminum and alloy conductor manufacturing. The company is also India’s largest and world’s third largest transformer oil manufacturers. 
• After two silent years during covid, the company’s operations have taken off and there is growth reported in each of its three business segments.
• The balance sheet has also shown improvement and looks stable. But, our principle concerns remain on the operating cash flow side, which looks to be misstated.

• Solaris Resources (SLS CN) yesterday announced it engaged Chinese investment bank CICC to help it with unsolicited M&A approaches.
• Solaris, Filo, Entree Resources, and Los Andes Copper are just four of the junior copper miners screening extremely well on M&A criteria. 
• Most copper supply/demand models forecast a large supply shortage of copper in the coming decade. Junior copper miners with large deposits will become increasingly valuable.

• Despite beating guidance, Micron’s latest earnings report confirms a still-toxic memory market environment
• ASPs for both DRAM and NAND have now declined sequentially for the past eight quarters
• Their HBM3E solution is an unfortunate case of too much, too late. 

• DocuSign, Inc. delivered an all-around beat in the previous quarter, continuing to build momentum in its business by progressing on key projects and enhancing its product offering.
• With a non-GAAP operating margin of 25%, Q2 total sales of $688 million was up 11% from the same quarter last year.
• DocuSign shipped and announced several new, highly developed features for its Web Forms offering during the quarter.

• AutoZone delivered an all-around beat in the most recent quarterly result.
• The company achieved a total sales growth of 7.4% for the fiscal year, accompanied by a 12.9% increase in earnings per share.
• Additionally, the company has introduced new reporting metrics to provide enhanced visibility, including same-store sales results for domestic, international, and total company operations.

• Hugel Inc (145020 KS) reported 28% YoY growth in both revenue and operating profit to KRW81.6B and KRW28B in 2Q23, respectively, driven by solid performance of botulinum toxins and fillers.
• Hugel has resubmitted marketing application for botulinum toxin in the U.S. for the third time, with approval expected in 1Q24. The U.S. is the world’s single largest botulinum toxin market.
• The company is seeing North America, Australia, New Zealand, and China as future growth engines to achieve its long-term target revenue of KRW1 trillion and operating profit margin of 45%.

• Cirrus Logic, Inc. delivered an all-around beat in the most recent quarterly result.
• With the help of its products, shipments, and smartphones, Cirrus Logic achieved revenue of $317 million, which was near the high end of its forecast for the quarter.
• Beyond the laptop market, Cirrus Logic also continues to invest in additional products and client relationships that, in the long run, may increase both its revenue and market variety.

• Bandhan Bank Ltd (BANDHAN IN) has been an underperformer among Indian banks since the start of the COVID-19 pandemic due to asset quality issues in its core Group Microfinance portfolio.
• Bandhan Bank’s leading position in the microfinance sector, strong operating margins, strategic de-risking, self-sustaining capital base, and cheap relative valuations make it a value bet with strong positive re-rating potential.
• We value Bandhan Bank at 2.1x FY25e P/B in the base case, implying a 44% upside. On the other hand, we also discuss the risks to the thesis in detail.

• We believe the undertone in the market is bullish, Large Caps are “out of flavour” and hence an L/S (Long/Short) strategy with INDA/SMIN could be an interesting pair to track. 
• We visited a BYD (1211 HK) showroom in Western India gathering hints of the defensive strategy in India. 
• Other names discussed include Asian Paints (APNT IN), CE Info Systems (MapmyIndia) (1052633Z IN) and Ebix (EBIX US).  

• Topsports International Holdin (6110 HK) is a pure-play on Nike and Adidas retail sales in China, as it is a leading retail partner of Nike and Adidas in China.
• Nike’s Greater China sales grew 12% yoy during the most recent quarter.  During the earnings call, Nike management was bullish on the prospects of the China business.
• The company currently trades at 13x forward PE, with a forward dividend yielf of 7%. 

• In the first table, we provide a list of 56 stocks (2.2% of total) which have dividend yields of 7% or more. 
• The second table is a list of stocks with dividend yields of 7% or more and they are ranked in terms of market cap. 
• These 25 stocks have an average dividend yield of 9.1%. The second table has 12 financials related stocks, representing 48% of total. 

• In this insight, we discuss numerous gap trades involving Korean preferred and common shares in 4Q 2023. Typically, fourth quarter is when pref stocks are emphasized the most in Korea.
• The excessive gaps in the preferred and common shares of Samsung Electronics (005930 KS), Hotel Shilla (008770 KS), and Amorepacific Corp (090430 KS) could reverse in the next several months.
• We see some attractive longer-term opportunities for Amorepacific, Doosan Fuel Cell, LG Electronics, and Hyundai Motor which have especially high discounts for the preferred shares versus their counterpart common shares.

• Hewlett Packard Enterprise Company delivered a positive result and managed an all-around beat last quarter.
• HPE produced significant free cash flow while increasing its revenue, gross margin, as well as earnings per share year over year.
• In this report, we have carried out a fundamental analysis of the historical financial statements of the company.

• Micron has Outperperformed Nanya Tech & Hynix since our pre-earnings trade. Micron’s valuation has reverted vs. Nanya’s.
• Nanya Tech has recently reported a 15% YoY drop in its latest monthly revenue. Micron just had a US$1.3bn subsidy approved by the Japanese government.
• We are now agnostic on the upcoming relative performance between the three Memory names Micron, Nanya Tech, and SK Hynix. Nanya will report its results on October 11th.

• Despite a challenging market environment, HP increased net revenue, non-GAAP EPS, non-GAAP operating profit, and free cash flow quarter over quarter.
• With $13.2 billion in net revenue, the company’s annualized revenue was down 10% or 7% in constant currency.
• Despite not being immune to the end market concerns, these businesses combined produced strong sequential growth in the quarter.

• After going ex-dividend in June, Water Oasis (1161 HK) corrected and has remained rangebound at the 1.35-1.45 HKD/levels due to negative sentiment on HK/China.
• We expect FY23 results to be reported in late November/early December. We expect an increase of 19%/85%  in Revenue/PAT with a 16-cent dividend for FY23 (11.4% dividend yield).
• Stock trades at 7.6x/6.2x PE FY23e/24e, a dividend yield of 11.4%/14% FY23e/24e with 25% of the market capitalization in cash. 

• Costco delivered an all-around beat in the most recent quarterly result.
• The company reported net income for the 17-week fourth quarter came in at $2.16 billion or $4.86 per diluted share compared to $1.868 billion or $4.20 per diluted share in the 16-week fourth quarter last year.
• In terms of sales, net sales for the 17-week fourth quarter were $77.43 billion, an increase of 9.4% from $70.76 billion in the 16-week fourth quarter last year.

• With the potential corporate action (see additional reading below) there is more interest in Haitong Securities but operationally it does not appear positive, for many reasons
• The company is seeing worse revenue growth in asset management, brokerage and investment banking, while its Haitong Bank can see far higher credit costs
• Total operating costs are now 63% of revenue, tax rate is a lot higher, litigation risks seem to be oversized, with potential impact to costs

• In this insight, we highlight the pricing gap divergences of the major Korean holdcos and opcos in 4Q 2023.
• Of the 38 pair trades, 18 of them involved holdcos outperforming opcos YTD and 20 of them involved opcos outperforming holdcos in the same period.
• We highlight 38 pair trades that involve Korean holdcos and opcos.

• UOB can be harder hit than peers due to its greater SME focus. SME’s may be less able to absorb or pass on higher costs, or manage worse demand.
• Domestic credit growth is at -4.1% in July YoY, from -3.3% YoY in June and from 2.1% in May. This can represent risk-aversion, worse demand, deteriorating credit metrics in SG.
• UOB’s Greater China lending is SGD52bn, nearly identical to Thailand, Malaysia combined. Building & Construction NPLs rose from SGD1.1bn to SGD1.4bn HoH to 2Q23.

• Yichang HEC Changjiang Pharma (1558 HK) reported a whopping 148% YoY growth in revenue to RMB3,209M in 1H23. Net profit rebounded to RMB3,209M from a loss of RMB33M in 1H22.
• In H1 2023, revenue from Kewei, approved for first-line treatment of influenza, jumped 186% YoY to RMB2,881M, representing ~90% of total revenue, mainly due to spiking flu cases in China.
• Recently, the company obtained approval for premixed Protamine human insulin injection and submitted marketing application for its self-developed product, Yiqibuvir for the treatment of chronic Hepatitis C in China.

• Singapore Grade A office rent and core CBD Occupancy According to CBRE Research’s latest Singapore Occupier Sentiment Survey, office utilisation in Asia-Pacific outpaced that in Europe and the US.
• Similarly, MPACT saw positive rental reversions in its latest Q2FY23 update, with Mapletree Business Centre at 7.1 per cent and the rest of Singapore office properties and business parks at 8.9 per cent.
• Looking ahead, MPACT expects rents for business parks to remain flat or stable with minimal growth in 2023 despite the expected rise in vacancy, as new and good-quality business parks will command higher rental rates.

• Several provinces have successively introduced policies to encourage childbirth. Increasing medical insurance reimbursement and special additional deduction standards for personal income tax would be the common direction. 
• This year is mainly a period of intensive introduction of relevant fertility support policies, so the impact on company’s performance is limited.The focus would be on next year’s financial results.
• We analyzed the performance of Livzon Pharmaceutical Group In (000513 CH),BGI Genomics (300676 CH) and Jinxin Fertility Group (1951 HK) based on their 23H1 reports, and adjusted our forecast accordingly.

• This week, Rajesh Vashist of SiTime came to talk about SiTime’s new product launch, Epoch. 
• SiTime is still the least understood story in semiconductors because timing is one of the least understood products or applications in semiconductors.
• Timing chips. They are the heartbeat of any system in any communications, processing, computing, or all of the above.

• The fall in share price in the last five months have sent China Communications Construction (1800 HK) back to very attractive level. The market has misread the strong 2Q23 result.
• 2Q23 recurring net profit surged 68.5% as 2Q22 has an inflated base. Gross margin has recorded meaningful YoY recovery while capex, particularly for BOT, has scaled back significantly. 
• There should not be concerns about CCCC’s contract outlook. Its backlog is enough to cover 4.9x FY23F revenue and its PER of 2.7x has provided more than sufficient buffer.

• GTX is scheduled to report third quarter results on October 24, 2023, as the Company continues to make strides in expanding its product offering
• The third quarter results should serve as a catalyst since the Company was expected to repurchase shares and reduce its debt balance during the period
• The impact from the ongoing strike in North America is likely to have minimal impact to GTX if it were to continue for an extended period of time