TMT & Consumer Independent Equity Research Analyst, Obex Capital Research

Aaron Gabin

TMT & Consumer Independent Equity Research Analyst

TMT & Consumer Independent Equity Research

Obex Capital Research

“Obex” is Latin for Barriers to Entry. Obex Capital Management’s investment philosophy is driven by an intense focus on which business model’s Barriers to Entry are able to withstand the ever increasing competitive disruption in the TMT and Consumer Sectors.

Equity Bottom-Up

<ul>
<li>Across the board miss as DTC losses peak, park margins weaken, and linear likely to fall off a cliff. </li>
<li>Big FY2023 guide down on revenues (HSD vs. LDD previously) and OI growth (HSD vs. ~25% consensus previously). </li>
<li>Disney profitability lower for longer as macro headwinds on parks, accelerating cord cutting, and pushed out D+ profitability means OI likely down $2B in both FY23-24.</li>
</ul>


Across the board miss as DTC losses peak, park margins weaken, and linear likely to fall off a cliff. 
Big FY2023 guide down on revenues (HSD vs. LDD previously) and OI growth (HSD vs. ~25% consensus previously). 
Disney profitability lower for longer as macro headwinds on parks, accelerating cord cutting, and pushed out D+ profitability means OI likely down $2B in both FY23-24.


Disney 4Q2022: Cord Cutting Exacerbating DTC Losses

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.

<ul><li>Netflix shareholders finally got some good news this quarter as the leading streaming entertainment company in the world finally posted some subscriber growth.</li><li>Netflix successfully added a further 2.41 million net subscribers and now has 223.09 million paid subscribers globally.</li><li>The management forecast indicates that it is expected to add more 4.5 million subscribers in the ongoing quarter.</li></ul>

Netflix shareholders finally got some good news this quarter as the leading streaming entertainment company in the world finally posted some subscriber growth.Netflix successfully added a further 2.41 million net subscribers and now has 223.09 million paid subscribers globally.The management forecast indicates that it is expected to add more 4.5 million subscribers in the ongoing quarter.

<ul>
<li>Netflix's stock has outperformed the market by 25% over the past quarter on faith that the new advertising tier will unlock the next leg of the growth narrative. </li>
<li>3Q22 had two of its biggest hits ever - Stranger Things and Dahmer, Netflix beat its own guidance of 1M by only 1.4M...APAC added 1.4M, most from low ARPU India</li>
<li>Pulling subscriber guidance is a yellow flag, as is the lack of details on how AVOD will be "neutral to positive" over time. </li>
</ul>


Netflix's stock has outperformed the market by 25% over the past quarter on faith that the new advertising tier will unlock the next leg of the growth narrative. 
3Q22 had two of its biggest hits ever - Stranger Things and Dahmer, Netflix beat its own guidance of 1M by only 1.4M...APAC added 1.4M, most from low ARPU India
Pulling subscriber guidance is a yellow flag, as is the lack of details on how AVOD will be "neutral to positive" over time. 


Meta Platforms (Facebook) / Equity Bottom-Up

<ul>
<li>Meta now trades at 14x P/E and 6x fwd EV/EBITDA...valuation inline with Paramount and Warner Brothers Discovery. This is nuts!</li>
<li>While the drumbeat of competitive concerns and self inflicted wounds has piled up in the past month, even core Facebook is not in a death spiral of engagement.</li>
<li>META is investing in new ad tech and ad formats, and has the ability to cut significant opex from its budget that could yield 10-20% upside to current 2023 consensus.</li>
</ul>


Meta now trades at 14x P/E and 6x fwd EV/EBITDA...valuation inline with Paramount and Warner Brothers Discovery. This is nuts!
While the drumbeat of competitive concerns and self inflicted wounds has piled up in the past month, even core Facebook is not in a death spiral of engagement.
META is investing in new ad tech and ad formats, and has the ability to cut significant opex from its budget that could yield 10-20% upside to current 2023 consensus.


What Are the Prospects for a Meta Rebound?

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Equity Capital Markets

Lionheart Studio  / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/lionheart-studio-corporation" target="_blank" data-smartkarma-citation="entities:36417:1" rel="noopener">Lionheart Studio (426630 KS)</a>, a game development studio based in South Korea,  aims to raise around US$420m via its South Korean IPO.</li>
<li>The company is majority owned by <a href="https://www.smartkarma.com/entities/kakao-games-corp" target="_blank" data-smartkarma-citation="entities:26730:1" rel="noopener">Kakao Games Corp (293490 KS)</a>, which after having recently hiked its stake, owned 54.94% of the company prior to listing.  </li>
<li>We spoke about the company’s past performance and undertook a peer comparison in our previous note. In this note, we’ll talk about our earnings estimates and valuation.</li>
</ul>



Lionheart Studio (426630 KS), a game development studio based in South Korea,  aims to raise around US$420m via its South Korean IPO.
The company is majority owned by Kakao Games Corp (293490 KS), which after having recently hiked its stake, owned 54.94% of the company prior to listing.  
We spoke about the company’s past performance and undertook a peer comparison in our previous note. In this note, we’ll talk about our earnings estimates and valuation.


United States

Netflix Inc. is an Internet subscription service for watching tv shows and movies. Subscribers can instantly watch unlimited TV shows and movies streamed over the Internet to their TVs, computers and mobile devices and in the United States, subscribers can receive standard definition DVDs and Blu-ray Discs delivered to their homes.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Netflix Inc (NFLX US)

Disney 4Q2022: Cord Cutting Exacerbating DTC Losses

Disney shockingly weak profitability outlook for FY2023 is more a reflection of the return of cord cutting to being issue #1 denting the model,...

Aaron Gabin

Netflix Inc: Subscriber Growth

Netflix shareholders finally got some good news this quarter as the leading streaming entertainment company in the world finally posted some...

Baptista Research

Netflix 3Q22: Coast Is Clear?

Netflix's stock has outperformed by 25% over the past quarter on blind faith that the new advertising tier unlock incremental subs and margins. We...

Aaron Gabin

What Are the Prospects for a Meta Rebound?

Meta has seen its valuation converge with structurally impaired cable network / streamers with margins 50% lower. We think it can boost EPS through...

Aaron Gabin

Lionheart IPO - Thoughts on Valuation

Lionheart Studio (426630 KS), a game development studio based in South Korea, aims to raise around US$420m via its South Korean IPO. In this note,...

Sumeet Singh

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)