Telco/Internet specialist

Kirk Boodry

Redex Research

Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/arteria-networks-corp" target="_blank" data-smartkarma-citation="entities:27807:1" rel="noopener">ARTERIA Networks Corp (4423 JP)</a> posted Q1 22 results in line with expectations</li>
<li>7% revenue growth was the highest in five quarters whilst core segment growth was the best since 2019, supported by work from home demand and data volume growth</li>
<li>Operating income is down YoY as it laps one-time gains a year ago - this has been well-flagged by management and consensus</li>
</ul>



ARTERIA Networks Corp (4423 JP) posted Q1 22 results in line with expectations
7% revenue growth was the highest in five quarters whilst core segment growth was the best since 2019, supported by work from home demand and data volume growth
Operating income is down YoY as it laps one-time gains a year ago - this has been well-flagged by management and consensus


Arteria Networks (Buy) - Q1 22 Results Reaction: In-Line Quarter Includes 7% Revenue Growth

<ul>
<li>Q4 results and FY22 guidance largely in-line with consensus and Redex expectations</li>
<li>Shares trade at a discount to peers but should command a premium on potential mid-term growth prospects and lack of mobile exposure</li>
<li>That may reflect relative size as Arteria lacks the scale and liquidity to attract interest from investors in search of defensive names</li>
</ul>


Q4 results and FY22 guidance largely in-line with consensus and Redex expectations
Shares trade at a discount to peers but should command a premium on potential mid-term growth prospects and lack of mobile exposure
That may reflect relative size as Arteria lacks the scale and liquidity to attract interest from investors in search of defensive names


Arteria Networks (Buy) - Q4 21 Results Reaction: Between a Rock and a Hard Place

<ul>
<li>Q3 21 results were in line for revenue and beat on profitability as a lack of mobile exposure drove financial outperformance versus larger peers</li>
<li>Operating KPIs were steady so Q4 top-line performance should be similar and the company is on track to meet FY financial targets</li>
<li>Shares are down 13% YTD v flat to up for Japan telcos overall and trade at a discount to the sector where a premium seems deserved</li>
</ul>


Q3 21 results were in line for revenue and beat on profitability as a lack of mobile exposure drove financial outperformance versus larger peers
Operating KPIs were steady so Q4 top-line performance should be similar and the company is on track to meet FY financial targets
Shares are down 13% YTD v flat to up for Japan telcos overall and trade at a discount to the sector where a premium seems deserved


Arteria Networks (Buy) - Q3 21 Results Reaction: Profitability Beat Should Help with Recent Weakness

<ul>
<li>Results ahead of our forecasts and top-line growth is accelerating</li>
<li>Q2 revenue growth of 4% includes 6% growth in core segments on telework demand</li>
<li>Operating profit grew 25% as it lapped aggressive caapacity spend last year</li>
</ul>


Results ahead of our forecasts and top-line growth is accelerating
Q2 revenue growth of 4% includes 6% growth in core segments on telework demand
Operating profit grew 25% as it lapped aggressive caapacity spend last year


Arteria Networks (Buy) - Q2 21 Results Reaction: Growth Rates Trending Higher

<p>Arteria shares have rebounded from a dreary 2020 as Q4 results and an optimistic mid-term plan have re-kindled interest in telecoms growth. Management will invest heavily in FY21 to support revenue CAGR of 8% through 2025. We are slightly more conservative but our forecasts for FY25 revenue and profitability are 10% higher than before and support a higher valuation. We are raising our DCF-driven FY21 target price from ¥2,380 to ¥2,800 and with 45% potential upside to our target, remain at Buy.  </p>

Arteria shares have rebounded from a dreary 2020 as Q4 results and an optimistic mid-term plan have re-kindled interest in telecoms growth. Management will invest heavily in FY21 to support revenue CAGR of 8% through 2025. We are slightly more conservative but our forecasts for FY25 revenue and profitability are 10% higher than before and support a higher valuation. We are raising our DCF-driven FY21 target price from ¥2,380 to ¥2,800 and with 45% potential upside to our target, remain at Buy.  

Arteria Networks (Buy)- Aggressive Growth Plans Highlight Market Potential

Japan

ARTERIA Networks Corporation provides telecommunication services. The Company offers internet connection, virtual private network construction, colocation, mobile connection, mobile device management, optical fiber network construction, and other services.

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ARTERIA Networks Corp (4423 JP)

Arteria Networks (Buy) - Q1 22 Results Reaction: In-Line Quarter Includes 7% Revenue Growth

Arteria results were as expected as WFH tailwinds and growth in data volumes supported the top line. Operating profit fell as it lapped year-ago...

Kirk Boodry

Arteria Networks (Buy) - Q4 21 Results Reaction: Between a Rock and a Hard Place

Arteria posted solid results but remains range bound as scale and liquidity may be insufficient for investors looking for safety in volatile markets.

Kirk Boodry

Arteria Networks (Buy) - Q3 21 Results Reaction: Profitability Beat Should Help with Recent Weakness

Arteria beat on Q3 profitability and is on track to meet its full-year guidance even as shares have underperformed relative to larger peers and...

Kirk Boodry

Arteria Networks (Buy)- Aggressive Growth Plans Highlight Market Potential

We are raising our forecasts for Arteria (Buy, TP ¥2,800 from 2,380 before) to reflect mid-term guidance and even on a relatively conservative...

Kirk Boodry

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52-week Range

Market Cap (USDm)

P/E

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Arteria Networks (Buy) - Q1 22 Results Reaction: In-Line Quarter Includes 7% Revenue Growth

Arteria results were as expected as WFH tailwinds and growth in data volumes supported the top line. Operating profit fell as it lapped year-ago...

Kirk Boodry

Arteria Networks (Buy) - Q4 21 Results Reaction: Between a Rock and a Hard Place

Arteria posted solid results but remains range bound as scale and liquidity may be insufficient for investors looking for safety in volatile markets.

Kirk Boodry

Arteria Networks (Buy) - Q3 21 Results Reaction: Profitability Beat Should Help with Recent Weakness

Arteria beat on Q3 profitability and is on track to meet its full-year guidance even as shares have underperformed relative to larger peers and...

Kirk Boodry

Arteria Networks (Buy) - Q2 21 Results Reaction: Growth Rates Trending Higher

Arteria posted Q2 results ahead of our forecasts and is on track to beat full-year targets as telework-driven demand remains strong and the company...

Kirk Boodry

Arteria Networks (Buy)- Aggressive Growth Plans Highlight Market Potential

We are raising our forecasts for Arteria (Buy, TP ¥2,800 from 2,380 before) to reflect mid-term guidance and even on a relatively conservative...

Kirk Boodry