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

<ul><li>Cummins reported a decent result and showed a 16.6% growth in quarterly revenues on a year-on-year basis which was largely driven by a strong consumption of engines.</li><li>Its core Engine segment saw a staggering 22% jump in revenues driven by a combination of North American truck demand as well as off-highway revenues resulting from construction demand in North America, Asia-Pacific, and Europe.</li><li>Cummins’ power generation business also performed well with a double-digit growth driven by recreation vehicle and datacenter markets whereas industrial revenues surged on account of rising demand in mining markets.</li></ul>

Cummins reported a decent result and showed a 16.6% growth in quarterly revenues on a year-on-year basis which was largely driven by a strong consumption of engines.Its core Engine segment saw a staggering 22% jump in revenues driven by a combination of North American truck demand as well as off-highway revenues resulting from construction demand in North America, Asia-Pacific, and Europe.Cummins’ power generation business also performed well with a double-digit growth driven by recreation vehicle and datacenter markets whereas industrial revenues surged on account of rising demand in mining markets.

<ul><li>Cummins reported another all-around beat as the company’s revenues grew significantly after a 272% increase in engine shipments to Stellantis as compared to 2020.</li><li>Cummins is making strides in its hydrogen fuel cells and electrolyzers business and the company has deployed more than 2,000 fuel cells and 600 electrolyzers around the world as of date.</li><li>Another noteworthy development is that the company began testing of a hydrogen-fueled internal combustion engine for heavy-duty truck applications.</li></ul>

Cummins reported another all-around beat as the company’s revenues grew significantly after a 272% increase in engine shipments to Stellantis as compared to 2020.Cummins is making strides in its hydrogen fuel cells and electrolyzers business and the company has deployed more than 2,000 fuel cells and 600 electrolyzers around the world as of date.Another noteworthy development is that the company began testing of a hydrogen-fueled internal combustion engine for heavy-duty truck applications.

Materials Analyst/Strategist, Janus Analysis

Gaius King

Materials Analyst/Strategist

Accelerating Tomorrow’s Independent Research

Boost Research

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Thematic (Sector/Industry)

<ul>
<li>Transportation industries Kodak Moment embracing Hybrids, modest near-term EV growth</li>
<li>Widespread adoption of Hydrogen considered unlikely</li>
<li>41% of Platinum &amp; 84% of Palladium reliant on autocatalyst demand</li>
<li>Hybrids in Europe up 107% in three years at 1:7 to diesel counterparts, without subsidies</li>
<li>Hybrid premium ~ 8% like-for-like over a combustion vehicle </li>
<li>Carpooling/ride-share platforms have hallmarks of being a macro-trend</li>
<li>W. Asian carpool CAGR of 77.6% over past 11 years</li>
<li>Est. by close 2019 &gt;62m people globally will utilise trans. platforms, forgoing car ownership
</li>
<li>Adverse impact on vehicle growth, models, drive-trains, R&amp;D, insurance &amp; finance </li>
<li>Logistics industry diesel transitioning will affect LT PGM demand, in particular platinum</li>
<li>Primary platinum-surplus to grow in time, downward pressure on price</li>
</ul>
Auto-catalysts make up the majority of platinums (41%) and in particular, palladium (84%) end use demand.  To determine the future demand profile for PGMs, therefore, we examined the types and likelihood of future drivetrains, as well as technologies affecting unit demand.
Hydrogen's key attraction is its potential green credentials, and if it was to ever became a reality, resultant PGM catalyst demand would outstrip all existing suppliers.  To achieve that noble aim, however, gargantuan energy resources would be needed to conduct electrolysis of water, thermodynamically, a very energy intensive process.  Our analysis concludes that hydrogen will remain a boutique industry, confined to economies with abundant hydrocarbon production, with conversion relying on steam reformation.  Overall impact of hydrogen on PGM demand, will be marginal at best.
Presently, EVs have substantial range and recharge hurdles to overcome before they could ever be a primary mode of transport for many; with global demand primarily driven by Chinese directives, not by the Western consumer.  In the short to medium-term, we do not expect EVs to impact PGM demand significantly.  However, we preface that statement by our belief that in the longer-term, the largest adopter of EVs will be within the commercial logistics sector, currently dominated by diesel power plants, which rely on a substantial amount of platinum within its auto-catalysts.  Widespread adoption of EVs and robotic drones and the replacement of traditional diesel drivetrains will only exacerbate current over-supply in platinum, in time, we forecast its price to fall substantially.
Hybrid sales are up 107% in Europe over the past three years without any state subsidies.  It is reasonable to assume that potential demand of PGMs have, and will continue to be, stymied by hybrid advances.  But we expect overall (even modest) growth in car volume sales should maintain current market dynamics, in the short to medium term.
Carpooling and a host of other transactional transport options are now a realistic, flexible and affordable life-style choice, that contradict the necessity of car ownership.  Especially among the inner-city urbanites, with Asia averaging a CAGR of 77.6% over the past decade.  Car manufacturers are already experiencing significant sales headwinds.  On average it has been found that members/fleet ratio (i.e. No. of cars divided by No. of members) range between 61 – 76, a fraction of unit demand when compared with an average Western family of three or four members, often owning two vehicles.  Using decade average regional CAGRs, projecting three years in advance, the potential number of decreased car sales globally could reach 62m by the close of 2019.  To put that into context, Volkswagen and Toyota produce between 10 to 11m  units each pa.  This raises the question of whether recent sluggish global car sales is somehow related to the almost exponential growth in carpooling/ride-share platforms?


Transportation industries Kodak Moment embracing Hybrids, modest near-term EV growth
Widespread adoption of Hydrogen considered unlikely
41% of Platinum &amp; 84% of Palladium reliant on autocatalyst demand
Hybrids in Europe up 107% in three years at 1:7 to diesel counterparts, without subsidies
Hybrid premium ~ 8% like-for-like over a combustion vehicle 
Carpooling/ride-share platforms have hallmarks of being a macro-trend
W. Asian carpool CAGR of 77.6% over past 11 years
Est. by close 2019 &gt;62m people globally will utilise trans. platforms, forgoing car ownership

Adverse impact on vehicle growth, models, drive-trains, R&amp;D, insurance &amp; finance 
Logistics industry diesel transitioning will affect LT PGM demand, in particular platinum
Primary platinum-surplus to grow in time, downward pressure on price

Auto-catalysts make up the majority of platinums (41%) and in particular, palladium (84%) end use demand.  To determine the future demand profile for PGMs, therefore, we examined the types and likelihood of future drivetrains, as well as technologies affecting unit demand.
Hydrogen's key attraction is its potential green credentials, and if it was to ever became a reality, resultant PGM catalyst demand would outstrip all existing suppliers.  To achieve that noble aim, however, gargantuan energy resources would be needed to conduct electrolysis of water, thermodynamically, a very energy intensive process.  Our analysis concludes that hydrogen will remain a boutique industry, confined to economies with abundant hydrocarbon production, with conversion relying on steam reformation.  Overall impact of hydrogen on PGM demand, will be marginal at best.
Presently, EVs have substantial range and recharge hurdles to overcome before they could ever be a primary mode of transport for many; with global demand primarily driven by Chinese directives, not by the Western consumer.  In the short to medium-term, we do not expect EVs to impact PGM demand significantly.  However, we preface that statement by our belief that in the longer-term, the largest adopter of EVs will be within the commercial logistics sector, currently dominated by diesel power plants, which rely on a substantial amount of platinum within its auto-catalysts.  Widespread adoption of EVs and robotic drones and the replacement of traditional diesel drivetrains will only exacerbate current over-supply in platinum, in time, we forecast its price to fall substantially.
Hybrid sales are up 107% in Europe over the past three years without any state subsidies.  It is reasonable to assume that potential demand of PGMs have, and will continue to be, stymied by hybrid advances.  But we expect overall (even modest) growth in car volume sales should maintain current market dynamics, in the short to medium term.
Carpooling and a host of other transactional transport options are now a realistic, flexible and affordable life-style choice, that contradict the necessity of car ownership.  Especially among the inner-city urbanites, with Asia averaging a CAGR of 77.6% over the past decade.  Car manufacturers are already experiencing significant sales headwinds.  On average it has been found that members/fleet ratio (i.e. No. of cars divided by No. of members) range between 61 – 76, a fraction of unit demand when compared with an average Western family of three or four members, often owning two vehicles.  Using decade average regional CAGRs, projecting three years in advance, the potential number of decreased car sales globally could reach 62m by the close of 2019.  To put that into context, Volkswagen and Toyota produce between 10 to 11m  units each pa.  This raises the question of whether recent sluggish global car sales is somehow related to the almost exponential growth in carpooling/ride-share platforms?

PGMs: Facing Technological Obsolescence? (P. 2)

Japan/Asia Long-Short, LightStream Research

Mio Kato

Japan/Asia Long-Short

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.

Event-Driven

Yesterday, the <a href="https://asia.nikkei.com/Business/Business-Deals/Toyota-and-Mazda-to-integrate-car-sales-financing-businesses" target="_blank">Nikkei reported</a> that <a href="https://www.smartkarma.com/entities/73" target="_blank" data-smartkarma-citation="entities:73:1">Toyota Motor (7203 JP)</a> and <a href="https://www.smartkarma.com/entities/20528" target="_blank" data-smartkarma-citation="entities:20528:1">Mazda Motor (7261 JP)</a> would merge their sales financing operations. The <a href="https://www.nikkei.com/nkd/company/article/?DisplayType=1&amp;n_cid=DSMMAA13&amp;ng=DGXMZO36816190T21C18A0MM8000&amp;scode=7203&amp;ba=1" target="_blank">Japanese article</a> is significantly more detailed.Toyota will purchase a 51% stake in SMM Auto Finance which is a JV between Mazda (49%), SMBC (41%) and SMBC's credit card company Cedyna (10%) that was formed after the dissolution of Mazda's capital relationship with <a href="https://www.smartkarma.com/entities/19225" target="_blank" data-smartkarma-citation="entities:19225:1">Ford Motor Co (F US)</a>. Toyota will purchase the stake from SMBC and Cedyna.The shrinking domestic market, the emergence of ride sharing and rising interest rates in the US apparently form the backdrop for this move. While this move is focused on the domestic market initially, it should allow Toyota to improve efficiency due to scale (Mazda's unit sales are about 15% of Toyota's) while Mazda should be able to benefit from lower financing costs thanks to Toyota's scale and financial stability.The company's are apparently considering a similar partnership overseas where Mazda does not maintain sales financing subsidiaries.

Yesterday, the Nikkei reported that Toyota Motor (7203 JP) and Mazda Motor (7261 JP) would merge their sales financing operations. The Japanese article is significantly more detailed.Toyota will purchase a 51% stake in SMM Auto Finance which is a JV between Mazda (49%), SMBC (41%) and SMBC's credit card company Cedyna (10%) that was formed after the dissolution of Mazda's capital relationship with Ford Motor Co (F US). Toyota will purchase the stake from SMBC and Cedyna.The shrinking domestic market, the emergence of ride sharing and rising interest rates in the US apparently form the backdrop for this move. While this move is focused on the domestic market initially, it should allow Toyota to improve efficiency due to scale (Mazda's unit sales are about 15% of Toyota's) while Mazda should be able to benefit from lower financing costs thanks to Toyota's scale and financial stability.The company's are apparently considering a similar partnership overseas where Mazda does not maintain sales financing subsidiaries.

Mazda: After Integration of Sales Financing with Toyota, How Long Till Toyota Ups Its Stake?

Founder & CEO Bond Angle, LLC, Bond Angle, LLC

Vicki Bryan

Founder & CEO Bond Angle, LLC

Bond Angle, LLC

Insightful commentary and analysis on bond markets and market movers, including financial, economic, and industry catalysts and management shenanigans. 

High yield market investment research

Credit

<div class="content-highlight">
<a href="https://www.smartkarma.com/entities/20279" target="_blank" data-smartkarma-citation="entities:20279:1">Tesla Motors (TSLA US)</a> has become disturbingly troubled, mostly because of serious mistakes which seem to be increasing. <a href="https://www.smartkarma.com/entities/3749" target="_blank" data-smartkarma-citation="entities:3749:1">Navistar International (NAV US)</a> knows plenty about catastrophic failures of its own making--and how to come back from the resulting smoldering wreck without resorting to bankruptcy. Here’s how Navistar achieved its remarkable turnaround by surmounting even worse problems than Tesla is facing right now—starting with replacing its embattled CEO.
Read more as Bond Angle analysis continues.
</div>


Tesla Motors (TSLA US) has become disturbingly troubled, mostly because of serious mistakes which seem to be increasing. Navistar International (NAV US) knows plenty about catastrophic failures of its own making--and how to come back from the resulting smoldering wreck without resorting to bankruptcy. Here’s how Navistar achieved its remarkable turnaround by surmounting even worse problems than Tesla is facing right now—starting with replacing its embattled CEO.
Read more as Bond Angle analysis continues.


What Tesla Can Learn From Navistar About Arrogant Management, Serious Mistakes, and Survival

United States

Cummins Inc. designs, manufactures, distributes and services diesel and natural gas engines. The Company also manufactures electric power generation systems and engine-related component products, including filtration and exhaust aftertreatment, fuel systems, controls, and air handling systems.

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Cummins Inc (CMI US)

Cummins Inc. - Investment Thesis

Cummins reported a decent result and showed a 16.6% growth in quarterly revenues on a year-on-year basis which was largely driven by a strong...

Baptista Research

Cummins Inc. - Investment Thesis

Cummins reported another all-around beat as the company’s revenues grew significantly after a 272% increase in engine shipments to Stellantis as...

Baptista Research

PGMs: Facing Technological Obsolescence? (P. 2)

Transportation industries Kodak Moment embracing Hybrids, modest near-term EV growth Widespread adoption of Hydrogen considered unlikely 41% of...

Boost Research

Mazda: After Integration of Sales Financing with Toyota, How Long Till Toyota Ups Its Stake?

Yesterday, the Nikkei reported that Toyota Motor (7203 JP) and Mazda Motor (7261 JP) would merge their sales financing operations. The Japanese...

Mio Kato

What Tesla Can Learn From Navistar About Arrogant Management, Serious Mistakes, and Survival

Tesla Motors (TSLA US) has become disturbingly troubled, mostly because of serious mistakes which seem to be increasing. Navistar International...

Vicki Bryan

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