President, Vision Research

Robert C Prather Jr

President

Vision Research

Vision Research was formed in 2004 with the vision of generating the best possible fundamental analysis and investment research for smid cap US equities. In 2008, we broadened our coverage to include mid/large cap US stocks.  After researching a  few ideas outside the US each year for a number of years, we launched a dedicated non-US equity product at the end of 2015.  This was followed by the introduction of a product focused on IPOs in mid-2017.

Fundamental Insight

Equity Bottom-Up

Shenzhou Intl Group Holdings / Equity Bottom-Up

Shenzhou International Group Holdings Ltd manufactures and processes textiles.  The Company produces, dyes, finishes, prints, embroiders, cuts, and sews knitwear.

<ul>
<li>Key customers &amp; their retail partners battling excess inventory, waning consumer demand, and market share losses in certain geographies</li>
<li>Plans for capacity expansion amid demand uncertainties and alt data and macro picture may prove aggressive and along with risks of reshoring/nearshoring &amp; friend-shoring may prove margin dilutive</li>
<li>Consensus expectations for 2H23 and 2024 appear overly optimistic and valuation is not cheap given the growth profile</li>
</ul>


Key customers &amp; their retail partners battling excess inventory, waning consumer demand, and market share losses in certain geographies
Plans for capacity expansion amid demand uncertainties and alt data and macro picture may prove aggressive and along with risks of reshoring/nearshoring &amp; friend-shoring may prove margin dilutive
Consensus expectations for 2H23 and 2024 appear overly optimistic and valuation is not cheap given the growth profile


Shenzhou (2313 HK): Contract Mfr for Leading Sportswear Brands Facing Challenging Demand Outlook.

Independent research on the U.S. markets, Baptista Research

Baptista Research

Independent research on the U.S. markets

Baptista Research is an independent financial research house focused on the U.S. markets. We provide equity research as well as credit research reports on the top-listed U.S. companies with most of our focus on technology, consumer goods and services, automobiles, industrials, oil and gas, pharma, and healthcare. Our research has served more than 3000 institutional investors including mutual funds, hedge funds, banks, family offices, and various buy-side firms. We operate a research subscription service where institutions, as well as retail investors, can have priority access to all our research. We also have a wide distribution of our research reports across some of the top global financial platforms. Apart from equity research and credit research, we also provide advisory services with respect to mergers & acquisitions (M&A), private equity/ venture capital fundraising, valuation reports, and investment management services for corporates.
Baptista Research is owned and managed by Ishan Majumdar, an ex-Venture Capitalist/ Investment Banker, a Chartered Accountant, and a Masters’ degree holder in Management from HEC Paris. Ishan has nearly a decade of experience in Mergers and Acquisitions, Leveraged Buyouts (LBOs), Venture Capital Investing, Corporate Strategy, and Valuation in front-office roles at the likes of BNP Paribas CIB, Credit Agricole CIB, Groupe Danone, and TIW Private Equity. He has worked on and closed multiple acquisition deals, leveraged buyouts, and start-up investment transactions.

Equity Capital Markets

Factset Research Systems Inc / Equity Capital Markets

FactSet Research Systems Inc. supplies global economic and financial data to analysts, investment bankers, and other financial professionals.  The Company combines databases from multiple suppliers into a single online source of information and analytics, including fundamental data.

<ul><li>After many quarters of consistently beating Wall Street expectations on all counts, FactSet delivered a mixed result in the last quarter exceeded revenue expectations of analysts but missing out on earnings.</li><li>The company finished fiscal 2022 with organic ASV plus professional services growth of $158 million, accelerating by approximately 200 basis points year over year to over 9%.</li><li>With private company coverage throughout their content refinery, workflow solutions for private equity and venture capital companies, and seamless linked workstation integration, the team is progressing with its private market strategy.</li></ul>

After many quarters of consistently beating Wall Street expectations on all counts, FactSet delivered a mixed result in the last quarter exceeded revenue expectations of analysts but missing out on earnings.The company finished fiscal 2022 with organic ASV plus professional services growth of $158 million, accelerating by approximately 200 basis points year over year to over 9%.With private company coverage throughout their content refinery, workflow solutions for private equity and venture capital companies, and seamless linked workstation integration, the team is progressing with its private market strategy.

FactSet Research Systems: Alternative Data Services & Other Drivers

Equity Analyst, LightStream Research

Supun Walpola

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Alibaba Group Holding  / Equity Bottom-Up

Alibaba Group Holding Limited provides online sales services. The Company provides internet infrastructure, electronic commerce, online financial, and internet content services through its subsidiaries. Alibaba Group Holding offers its products and services worldwide.

Chinese government data for 3Q 2020 suggests that the strong demand for online shopping that was witnessed in the last quarter has somewhat declined with offline shopping taking precedence in the post-lockdown environment. However, we do not view this as particularly negative, rather, growth seems to have only normalised to the pre-pandemic level. Moreover, a YoY improvement in online retail penetration suggests that the Chinese e-commerce landscape is still fairly attractive, despite decelerating growth.Nevertheless, revenue growth of top e-commerce players such as <a href="https://www.smartkarma.com/entities/alibaba-group-holding-ltd" target="_blank" data-smartkarma-citation="entities:787:1" rel="noopener">Alibaba Group (BABA US)</a>, <a href="https://www.smartkarma.com/entities/jd-com-inc-adr" target="_blank" data-smartkarma-citation="entities:446:1" rel="noopener">JD.com Inc (ADR) (JD US)</a>, and <a href="https://www.smartkarma.com/entities/pinduoduo-inc" target="_blank" data-smartkarma-citation="entities:27250:1" rel="noopener">Pinduoduo (PDD US)</a> are expected to decline in 3Q 2020 compared to the strong last quarter. However, the market may have already accounted for this, as consensus revenue estimates are not very different to our revenue estimates based on government e-commerce data.

Chinese government data for 3Q 2020 suggests that the strong demand for online shopping that was witnessed in the last quarter has somewhat declined with offline shopping taking precedence in the post-lockdown environment. However, we do not view this as particularly negative, rather, growth seems to have only normalised to the pre-pandemic level. Moreover, a YoY improvement in online retail penetration suggests that the Chinese e-commerce landscape is still fairly attractive, despite decelerating growth.Nevertheless, revenue growth of top e-commerce players such as Alibaba Group (BABA US), JD.com Inc (ADR) (JD US), and Pinduoduo (PDD US) are expected to decline in 3Q 2020 compared to the strong last quarter. However, the market may have already accounted for this, as consensus revenue estimates are not very different to our revenue estimates based on government e-commerce data. 

China E-Commerce [Alt Data]: Alibaba/JD/PDD’s Strong 2Q Growth to Decline in 3Q, But Expected

LY Corporation operates as an internet search engine "Yahoo! JAPAN". The Company provides electronic commerce and settlement finance services for small medium enterprises and individuals. LY also operates media business including search linked advertising and display advertising services.

Only a marginal QoQ decrease in e-commerce web traffic suggests that similar to 1Q, <a href="https://www.smartkarma.com/entities/z-holdings-corp" target="_blank" data-smartkarma-citation="entities:19603:1" rel="noopener">Z Holdings (4689 JP)</a>’s 2Q results are also likely to be quite strong. Nevertheless, we do not believe this growth to be sustainable, and we continue to question Z’s aggressive growth strategy in a maturing Japanese e-commerce market.However, given the possibility of compelling near-term results, we do not expect an immediate correction, rather, we expect the correction to be more gradual over the next 12 months when the risks that we have highlighted below start materialising.

Only a marginal QoQ decrease in e-commerce web traffic suggests that similar to 1Q, Z Holdings (4689 JP)’s 2Q results are also likely to be quite strong. Nevertheless, we do not believe this growth to be sustainable, and we continue to question Z’s aggressive growth strategy in a maturing Japanese e-commerce market.However, given the possibility of compelling near-term results, we do not expect an immediate correction, rather, we expect the correction to be more gradual over the next 12 months when the risks that we have highlighted below start materialising.

Z Holdings [Alt Data]: Web Traffic Hints Strong 2Q Shopping Growth but Unlikely to Be Sustainable

CyberAgent, Inc. operates blog media website, Ameba.  The Company also operates internet advertising agency, foreign exchange trading website, and creates PC and mobile contents such as advertisements and games. CyberAgent invests in companies with internet related business.

<a href="https://www.smartkarma.com/entities/cyberagent-inc" target="_blank" data-smartkarma-citation="entities:8197:1" rel="noopener">CyberAgent Inc (4751 JP)</a> has already achieved 89%-102% of its full-year OP guidance of JPY28bn-32bn. In absolute terms, CyberAgent’s OP needs to be only JPY4bn in 4Q FY09/20 to reach the higher-end of the full-year OP guidance. In this note, we examine the possibility of CyberAgent beating its OP guidance, based on Google Play app rankings for CyberAgent’s hit game titles and ABEMA (TV).
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/165/861/original/image_27906992731603076073551.png?1603076075" class="editor-image img-responsive" data-smartkarma-image-id="165861"></figure>
<div style="text-align: left;" class="content-caption">Source: Company Disclosures</div>

CyberAgent Inc (4751 JP) has already achieved 89%-102% of its full-year OP guidance of JPY28bn-32bn. In absolute terms, CyberAgent’s OP needs to be only JPY4bn in 4Q FY09/20 to reach the higher-end of the full-year OP guidance. In this note, we examine the possibility of CyberAgent beating its OP guidance, based on Google Play app rankings for CyberAgent’s hit game titles and ABEMA (TV).

Source: Company Disclosures

CyberAgent [Alt Data]: Expect C.15% Full-Year OP Guidance Beat but Is Currently Overbought