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Granite Bay Capital

An innovation focussed investment company

Granite Bay Capital is an innovation focussed investment company with a deep focus on the companies at the leading edge of innovation across major themes such as AI, ubiquitous computing, sustainability, automation and longevity.

Thematic (Sector/Industry)

<h2><strong>Headline Developments</strong></h2><p>Steam, the video game distribution platform owned by Valve (private) , has released the long-rumoured handheld gaming device the Steam Deck; available from December (although big delays are expected with the premium $649 512GB version not available until 3Q22!).</p>

Headline DevelopmentsSteam, the video game distribution platform owned by Valve (private) , has released the long-rumoured handheld gaming device the Steam Deck; available from December (although big delays are expected with the premium $649 512GB version not available until 3Q22!).

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

<p>We have been longtime fans of Netflix the product and Netflix’s management team can rightfully be described as visionary. They had the vision to have the public markets fund an experiment in business models that appears now set to breakeven on FCF in 2021. We have said since last year that Netflix is a good relative short given the extreme pull-in of demand from COVID, but have turned bullish for the simple fact that Netflix’s stock performance tracks the pace of sub growth, and we see growth reaccelerating in the back half of 2021. The kicker for us is the potential for gaming to be leveraged as an ARPU lever…and an upward estimate revision cycle. We may be early….but the stock’s flattish AH reaction on a pretty mediocre quarter and weak guide reads bullish to us.  </p><div class="content-highlight"><p>Obex’s fundamental research process is focused on secular change in the TMT and Consumer sectors. We seek to differentiate between fundamental business analysis and security analysis. Before deciding if a security’s pricing and positioning merit a long or short position, we analyze the four pillars of business fundamentals (Secular Factors, TAM, Competitive Advantage, Business Model) in order to determine if this is a “good” or “not so good” opportunity.  </p></div>

We have been longtime fans of Netflix the product and Netflix’s management team can rightfully be described as visionary. They had the vision to have the public markets fund an experiment in business models that appears now set to breakeven on FCF in 2021. We have said since last year that Netflix is a good relative short given the extreme pull-in of demand from COVID, but have turned bullish for the simple fact that Netflix’s stock performance tracks the pace of sub growth, and we see growth reaccelerating in the back half of 2021. The kicker for us is the potential for gaming to be leveraged as an ARPU lever…and an upward estimate revision cycle. We may be early….but the stock’s flattish AH reaction on a pretty mediocre quarter and weak guide reads bullish to us.  Obex’s fundamental research process is focused on secular change in the TMT and Consumer sectors. We seek to differentiate between fundamental business analysis and security analysis. Before deciding if a security’s pricing and positioning merit a long or short position, we analyze the four pillars of business fundamentals (Secular Factors, TAM, Competitive Advantage, Business Model) in order to determine if this is a “good” or “not so good” opportunity.  

<p>Some updated thinking around our long portfolio: more bullish Google, Netflix, and Match, less bullish Snowflake, Facebook. And thinking about getting long some DIDI!</p><div class="content-highlight"><p>Obex’s fundamental research process is focused on secular change in the TMT and Consumer sectors. We seek to differentiate between fundamental business analysis and security analysis. Before deciding if a security’s pricing and positioning merit a long or short position, we analyze the four pillars of business fundamentals (Secular Factors, TAM, Competitive Advantage, Business Model) in order to determine if this is a “good” or “not so good” opportunity.  </p></div>

Some updated thinking around our long portfolio: more bullish Google, Netflix, and Match, less bullish Snowflake, Facebook. And thinking about getting long some DIDI!Obex’s fundamental research process is focused on secular change in the TMT and Consumer sectors. We seek to differentiate between fundamental business analysis and security analysis. Before deciding if a security’s pricing and positioning merit a long or short position, we analyze the four pillars of business fundamentals (Secular Factors, TAM, Competitive Advantage, Business Model) in order to determine if this is a “good” or “not so good” opportunity.  

<p>Negative Intel, Mixed on Comcast, Positive Amazon, Positive Netflix, Positive Roblox.</p><p></p><p></p><div class="content-highlight"><p>Obex’s fundamental research process is focused on secular change in the TMT and Consumer sectors. We seek to differentiate between fundamental business analysis and security analysis. Before deciding if a security’s pricing and positioning merit a long or short position, we analyze the four pillars of business fundamentals (Secular Factors, TAM, Competitive Advantage, Business Model) in order to determine if this is a “good” or “not so good” opportunity.  </p></div>

Negative Intel, Mixed on Comcast, Positive Amazon, Positive Netflix, Positive Roblox.Obex’s fundamental research process is focused on secular change in the TMT and Consumer sectors. We seek to differentiate between fundamental business analysis and security analysis. Before deciding if a security’s pricing and positioning merit a long or short position, we analyze the four pillars of business fundamentals (Secular Factors, TAM, Competitive Advantage, Business Model) in order to determine if this is a “good” or “not so good” opportunity.  

TMT Weekly: 3 Things That Stood Out the Week of 6/25/2021

Asian Insight Provider - Actionable ideas, CrossASEAN Research

Henry Soediarko

Asian Insight Provider - Actionable ideas

CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

Astro Malaysia Holdings / Equity Bottom-Up

<p>Malaysia's vaccination rate is only 5% of the total population and new cases have jumped to almost 5000 daily in the past week, higher than the second wave that took place between December last year to February this year, prompted the Malaysian government to put another MCO (lockdown) in place.</p>
<p>As a result, people are back to work from home and not spending much time outside. Historically, many have turned into spending more time on TV and mobile entertainment in which <a href="https://www.smartkarma.com/entities/astro-malaysia-holdings-bhd" target="_blank" data-smartkarma-citation="entities:1143:1" rel="noopener">Astro Malaysia Holdings (ASTRO MK)</a> is the direct beneficiary. </p>

Malaysia's vaccination rate is only 5% of the total population and new cases have jumped to almost 5000 daily in the past week, higher than the second wave that took place between December last year to February this year, prompted the Malaysian government to put another MCO (lockdown) in place.
As a result, people are back to work from home and not spending much time outside. Historically, many have turned into spending more time on TV and mobile entertainment in which Astro Malaysia Holdings (ASTRO MK) is the direct beneficiary. 

United States

Expedia Group, Inc. provides branded online travel services for leisure and small business travelers. The Company offers a wide range of travel shopping and reservation services, providing real-time access to schedule, pricing and availability information for airlines, hotels, and car rental companies.

Booking Holdings Inc. operates as an online travel company. The Company offers a platform that allows to make travel reservations with providers of travel services, as well as provides accommodation reservations, rentals cars, airline tickets, and vacation packages. Booking Holdings serves customers worldwide.

Etsy, Inc. provides e-commerce services. The Company offers handmade and vintage items, art, and supplies, as well as regular items such as clothing, housewares, paper goods, candles, bags and purses, music, and wood working items. Etsy serves users throughout the United States.

Wayfair Inc. retails household goods online. The Company offers bedroom, living room, kitchen and dining, home entertainment, home office, game room and bar, patio, hallway and entryway, and bathroom furniture. Wayfair offers products and services in the United States.

TripAdvisor Inc. is an online travel research company. The Company's travel research platform aggregates reviews and opinions of members about destinations, accommodations (including hotels, bed and breakfasts ("B&Bs"), specialty lodging and vacation rentals), restaurants and activities throughout the world.

1-800-FLOWERS.COM, Inc. is an e-commerce provider of floral products and gifts. The Company's product offerings, including fresh-cut and seasonal flowers, plants, floral arrangements, and home and garden merchandise, can be purchased online or by calling its toll-free telephone number.

Lands' End, Inc. manufactures men's, women's and children's apparel and accessories. The Company produces and distributes swimwear, clothing, bedding, totes, furniture, bath accessories, uniforms, outter wear and various related products. Lands' End offers its products through its catalog and website around the world.

Overstock.com, Inc. offers discounted brand-name merchandise for sale over the Internet. Products include bed-and-bath goods, kitchenware, jewelry, sporting goods, electronics, and designer accessories.

Stitch Fix, Inc. operates as an online subscription and personal shopping platform. The Company offers shirts, jackets, sweaters, blazers, leggings, vests, scarfs, jeans, loafers, and boots for men and women. Stitch Fix serves customers in the United States.

Porter Holding International, Inc. operates online to offline (O2O) business platforms for consumer manufacturing enterprises. The Company operates cloud platforms that provide Internet-based intelligent e-commerce information services.

Trip.com Group Ltd. provides online travel agency services. The Company offers mobile applications, hotel reservations, flight ticketing, package tours, corporate travel management, and train ticketing services.

JD.com Inc is an online direct sales company in China.  The Company offers a wide selection of products through its website and mobile applications.  JD.com sells appliances, computers, digital products, communication products, garments, books, and household items to consumers and vendors.

Zomato Limited is an online restaurant guide and food ordering platform. The Company offers platform connects customers, restaurant partners and delivery partners to search and discover restaurants, read and write customer generated reviews, order food delivery, book a table, and make payments while dining-out at restaurants. Zomato serves customers worldwide.

Vipshop Holdings Ltd. retails branded products at discount over the Internet. The Company retails through flash sales, in which limited quantities of an item are sold at deep discount for a specified period of time.

ZOZO Inc operates internet shopping sites for apparel.  The Company also provides communication services relating to apparel such as blogs by fashion moguls and internet chat room for users.

Mango Excellent Media Co.,Ltd. offers television based services. The Company provides television shopping, online shopping, outbound shopping, and other services. Mango Excellent Media also operates new media platform operation.

Momo.com Inc is an e-commerce services company. The Company offers TV shopping and Internet shopping services, including beauty products, clothing, leather goods and food shops.

Webjet Limited provides branded online travel services for travelers.  The Company offers one-stop travel shopping and reservation services, providing real-time access to schedule, pricing, and availability information for airlines hotels, and major car rental companies.

Ocado Group PLC distributes a wide range of retail consumer products.  The Company provides home delivery of a wide range of products including food and drink, toiletries and baby, household, pet care, and holiday products.

zooplus AG retails pet supplies over the Internet.

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.

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Netflix Inc (NFLX US)

Weekly Innovation Review (WIRE) #41

Headline Developments: Steam , the video game distribution platform owned by Valve (private), has released the long-rumoured handheld gaming device...

Granite Bay Capital

Netflix 2Q21: Game On

We have turned bullish on Netflix recently because we see the pace of sub growth reaccelerating in the back half of 2021. The flattish AH reaction...

Aaron Gabin

2H21 Obex Research Long Portfolio

Some updated thinking around our long portfolio: more bullish Google, Netflix, and Match, less bullish Snowflake, Facebook. And thinking about...

Aaron Gabin

TMT Weekly: 3 Things That Stood Out the Week of 6/25/2021

We think Intel's restructuring is a means of burying its coming market share loss driven margin declines, while Comcast rumors are nonsensical....

Aaron Gabin

Astro (Astro): Still the Good Pick

New cases have jumped to almost 5000 in the past week, higher than the second wave that took place between Dec last year to February this year,...

Henry Soediarko

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