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 Bottom-Up

<ul><li>Sony Group Corporation delivered disappointing results as the company was unable to meet Wall Street's revenue and earnings expectations.</li><li>However, consolidated operating income witnessed a substantial year-on-year decline of JPY 106.4 billion, reaching JPY 263.0 billion.</li><li>Operating income increased by JPY 6.8 billion to JPY 48.9 billion, primarily driven by increased sales of PlayStation 5 hardware.</li></ul>

Sony Group Corporation delivered disappointing results as the company was unable to meet Wall Street's revenue and earnings expectations.However, consolidated operating income witnessed a substantial year-on-year decline of JPY 106.4 billion, reaching JPY 263.0 billion.Operating income increased by JPY 6.8 billion to JPY 48.9 billion, primarily driven by increased sales of PlayStation 5 hardware.

Sony Group Corporation: Revolutionizing Content Production With NTT Collaboration - Major Drivers

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.

Event-Driven

<ul>
<li>PCAOB officials concluded their Hong Kong visit last month and PCAOB is due to announce its annual judgment on whether it had adequate access to US listed China companies.</li>
<li>The Hong Kong visit was on the back of the 26th Aug 2022 announcement by PCAOB and CSRC that they had entered into an agreement with US authorities for access.</li>
<li>In this note, we'll talk about the latest developments, possible outcomes and implications.</li>
</ul>


PCAOB officials concluded their Hong Kong visit last month and PCAOB is due to announce its annual judgment on whether it had adequate access to US listed China companies.
The Hong Kong visit was on the back of the 26th Aug 2022 announcement by PCAOB and CSRC that they had entered into an agreement with US authorities for access.
In this note, we'll talk about the latest developments, possible outcomes and implications.


China ADRs Delisting - Friday Could Be Judgment Day for over US$800bn Mcap of Stocks

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.

<ul>
<li>In 2020 and 2021 we had nine conviction calls, four of which returned over 50% within just over a year.</li>
<li>Three more returned close to 40%, one returned 15% and just one was an abject failure returning -39%. </li>
<li>On average, alpha generation was 24.3% and our 2022 names are off to a good start putting up 14.7% in alpha in just over a month and a half.</li>
</ul>


In 2020 and 2021 we had nine conviction calls, four of which returned over 50% within just over a year.
Three more returned close to 40%, one returned 15% and just one was an abject failure returning -39%. 
On average, alpha generation was 24.3% and our 2022 names are off to a good start putting up 14.7% in alpha in just over a month and a half.


A Belated Look Back at Our 2020 and 2021 Conviction Calls and a Look Ahead to 2022

<ul>
<li>We have been arguing that significant collaboration between Sony and Epic is likely in forming the key infrastructure for the metaverse. </li>
<li>The recent Matrix Awakens demo starts to reveal some of the possibilities. </li>
<li>And it demonstrates why we believe popular metaverse theme names like Facebook and Roblox have no realistic chance of competing.</li>
</ul>


We have been arguing that significant collaboration between Sony and Epic is likely in forming the key infrastructure for the metaverse. 
The recent Matrix Awakens demo starts to reveal some of the possibilities. 
And it demonstrates why we believe popular metaverse theme names like Facebook and Roblox have no realistic chance of competing.


Research from Asian Century Stocks, Asian Century Stocks

Michael Fritzell

Research from Asian Century Stocks

Providing financial journalism in the Asia-Pacific

Asian Century Stocks

Asian Century Stocks is a newsletter providing financial journalism for companies and stocks in the Asia-Pacific. 
The Asian Century Stocks logotype “百” stands for “one hundred” or a “century”. The economic centre of gravity is moving towards Asia. Yet most global investors are missing out.

<h2>Executive summary</h2>
<p>Sony is in the early stage of the PlayStation 5 console cycle. The gaming console is likely to become a major success. In addition, several other growth drivers such as demand for camera image sensors and content for music and video streaming services are also positive for Sony’s near- to medium-term outlook.</p>
<p>The longer-term outlook for Sony’s music label and Hollywood studio can be questioned as streaming platforms disintermediate the two industries. You can also question some of Sony’s recent acquisitions, including its foray into the Japanese insurance market.</p>
<p>Nevertheless, the outlook for Sony’s earnings is excellent and I see an upside of +23% to a target price of JPY 13,920/share, assuming a 2024 EV/EBIT multiple of 15x.</p>

Executive summary
Sony is in the early stage of the PlayStation 5 console cycle. The gaming console is likely to become a major success. In addition, several other growth drivers such as demand for camera image sensors and content for music and video streaming services are also positive for Sony’s near- to medium-term outlook.
The longer-term outlook for Sony’s music label and Hollywood studio can be questioned as streaming platforms disintermediate the two industries. You can also question some of Sony’s recent acquisitions, including its foray into the Japanese insurance market.
Nevertheless, the outlook for Sony’s earnings is excellent and I see an upside of +23% to a target price of JPY 13,920/share, assuming a 2024 EV/EBIT multiple of 15x.

Sony (6758 JP): Weighing the Bull and Bear Case

Japan

Panasonic Corporation manufactures electric and electronic products. The Company produces home appliances, car navigation systems, digital devices, computer peripherals, telecommunications, industrial equipment, and electronic parts. Panasonic has associated companies around the world.

Sekisui House, Ltd. builds and sells steel-frame and wooden housings. The Company constructs single-family houses, condominiums, and apartment buildings.  Sekisui House also operates real estate brokerage and leasing businesses.  Additionally, the Company sells construction materials.

Sumitomo Forestry Co., Ltd. sells lumber and wood-related construction materials.  The Company constructs and markets a variety of homes, including custom-built wooden houses, and also manufactures and distributes high-value added wood-based products.  Sumitomo Forestry also maintains a significant amount of Japan's forests.

Sekisui Chemical Co., Ltd. builds and sells unit residential houses in addition to parcels of land. The Company also manufactures and sells polyvinyl chloride and other plastic products used in, for instance, drainage pipes and bathtubs. Moreover the company is engaged in the production and sale of high performance plastic films, tapes and sheets.

HASEKO Corporation builds residential, commercial, and institutional buildings such as condominiums and office buildings.  The Company also operates real estate brokerage, leasing, and management businesses.  Additionally, Haseko provides construction consulting services.  The Company, through its subsidiaries, operates hotel and financial businesses.

RINNAI CORPORATION manufactures and sells a variety of gas appliances.  The products include cooking equipment for household and commercial use, room and water heating equipment, and laundry dryers.  The Company has subsidiaries in South-eastern Asia, Australia, and the United States.

Iida Group Holdings Co., Ltd. is a holding company established by the merger between Hajime Construction, Iida Home Max, Touei Housing, Tact Home, Arnest One and ID Home. Its subsidiaries engage in design, construction and sales of residential properties such as single-family houses and condominiums and construction related works.

NIKON CORPORATION manufactures and sells cameras, lenses, semiconductor-related equipment, eyeglasses, microscopes, and measuring instruments.

Fujitsu General Ltd. manufactures air-conditioning units, refrigerators, and information-communication equipment. The products include air conditioners, and purifiers. The Company also manufactures computer software and electronic devices.

CASIO COMPUTER CO., LTD. manufactures various consumer electronics such as calculators, electronic dictionaries, digital cameras, and watches.  The Company also makes mobile phone sets, office computers, and electronic musical instruments.  Casio Computer exports its products to North America, Europe, and Asia.

Techtronic Industries Company Limited designs, manufactures, and markets power tools, outdoor power equipment, accessories, hand tools, layout and measuring tools, and floorcare and appliances. The Company's products are used by consumers, professional, and industrial users in the home improvement, repair, and construction industries.

Toll Brothers, Inc. builds luxury homes, serving both move-up and empty nester buyers in several regions of the United States.  The Company builds customized single and attached homes, primarily on land that it develops and improves. Toll Brothers also operates its own architectural, engineering, mortgage, title, security, landscape, insurance brokerage, and manufacturing operations.

Haier Smart Home Co. Ltd. manufactures and distributes appliances. The Company produces air conditioners, refrigerators, freezers, small household electrical appliances, and other related products. Haier Smart Home markets its products domestically and internationally.

Gree Electric Appliances, Inc. of Zhuhai manufactures and sells a series of air conditioners.  The different series of air conditioners include window type, split type, floor type, mobile type, mobile split type and ceiling type.  The Company also produces air purifier.

LG Electronics Inc. manufactures and markets digital display equipment and home appliances. The Company produces and markets flat panel televisions, A/V products, washing machines, air conditioners and refrigerators as well as telecommunications equipment such as smart phones and tablets.

TopBuild Corp. provides insulation installation services. The Company offers residential insulation products and related accessories. TopBuild serves customers in the United States.

D.R. Horton, Inc. constructs and sells single-family homes designed primarily for the entry-level and move-up markets.  The Company operates in the Midwest, Mid-Atlantic, Southeast, Southwest, and Western regions of the United States. D.R. Horton also, through its financial services operations, provide mortgage financing and title agency services to homebuyers.

NVR, Inc. builds and markets homes and conducts mortgage banking activities. The Company builds single-family detached homes, townhomes, and condominium buildings under the Ryan Homes, NVHomes, and other tradenames.  NVR provides a number of mortgage related services to its homebuilding customers and to other customers through its mortgage banking operations.

PulteGroup Inc. sells and constructs homes, and purchases, develops, and sells residential land and develops active adult communities.  The Company also provides mortgage financing, title insurance, and other services to home buyers. Pulte has operations in various markets across the United States and Puerto Rico.

Lennar Corporation constructs and sells single-family attached and detached homes, and to a lesser extent multi-level buildings as well as buys and sells residential land. The Company also provides mortgage financing, title insurance, closing services and other financial services.

Sony Corporation manufactures audio, home video game consoles, communications, key device and information technology products for the consumer and professional markets.  The Company's other businesses include music, pictures, computer entertainment, and online businesses.

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Sony Corp (6758 JP)

Sony Group Corporation: Revolutionizing Content Production With NTT Collaboration - Major Drivers

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Baptista Research

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PCAOB officials concluded their Hong Kong visit last month and PCAOB is due to announce its annual judgment on whether it had adequate access to US...

Sumeet Singh

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We take a look back at our conviction calls from 2020 and 2021 to assess performance and put the strong start to our 2022 names in context.

Mio Kato

Sony – An Epic Partner

We have been arguing that collaboration between Sony and Epic is likely in forming the key infrastructure for the metaverse. The recent Matrix...

Mio Kato

Sony (6758 JP): Weighing the Bull and Bear Case

Sony is in the early stage of the PlayStation 5 console cycle. The gaming console is likely to become a major success. In addition, several other...

Asian Century Stocks

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