IPO and L/S equity, 2015 Starmine top stock picker, Global Equity Research Ltd

Rickin Thakrar

IPO and L/S equity, 2015 Starmine top stock picker

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Equity Bottom-Up

<a href="https://www.smartkarma.com/entities/tesla-motors-inc" target="_blank" data-smartkarma-citation="entities:20279:1" rel="noopener">Tesla Motors (TSLA US)</a> produced another phenomenal set of quarterly results, with the company generating 74% sales growth in 1Q21, its best quarterly result in over two years. While there are genuine questions about increased competition as well as the durability of Tesla' regulatory credits, we believe the market has not considered the potential significant change in Tesla’s cost of capital, which we believe could have a significant impact on its valuation. We dig into these elements in the detailed section of this note.

Tesla Motors (TSLA US) produced another phenomenal set of quarterly results, with the company generating 74% sales growth in 1Q21, its best quarterly result in over two years. While there are genuine questions about increased competition as well as the durability of Tesla' regulatory credits, we believe the market has not considered the potential significant change in Tesla’s cost of capital, which we believe could have a significant impact on its valuation. We dig into these elements in the detailed section of this note.

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

<a href="https://www.smartkarma.com/entities/tesla-motors-inc" target="_blank" data-smartkarma-citation="entities:20279:1" rel="noopener">Tesla Motors (TSLA US)</a> doesn’t want you to worry that it needed a record $518 million in energy credit sales plus a surprising $101 million in <a href="https://www.smartkarma.com/entities/bitcoin-usd" target="_blank" data-smartkarma-citation="entities:25895:1" rel="noopener">Bitcoin (XBTUSD CURNCY)</a>gains to generate the record net “profit” of $438 million it <a href="https://tesla-cdn.thron.com/static/R3GJMT_TSLA_Q1_2021_Update_5KJWZA.pdf?xseo=&amp;response-content-disposition=inline%3Bfilename%3D%22TSLA-Q1-2021-Update.pdf%22" target="_blank" rel="noopener">reported for the first quarter</a> versus the similarly enhanced $16 million reported last year.Otherwise you might notice that core operations actually lost nearly $200 million despite a 109% increase in deliveries to a record 184,877 versus last year. This loss was little better, and revenue was lower, versus Tesla’s disappointing fourth quarter results as I discussed in <a href="https://www.smartkarma.com/insights/tesla-on-no-you-didn-t" target="_blank" data-smartkarma-citation="insights:47527" rel="noopener">Tesla: Oh No You Didn’t</a> on 1/28/21. First quarter revenue slumped sequentially despite higher deliveries as profitability plunged on rising operating costs plus further severe price cuts still necessary to encourage sales.While Tesla had reason to worry since most of the total deliveries reported didn’t materialize until the final weeks of the quarter, it’s also easy to surmise that Tesla used its creative profit-making strategy to make sure CEO Elon Musk could snag another <a href="https://www.reuters.com/article/tesla-results-options-idUSL1N2MJ2RE" target="_blank" rel="noopener">$11 billion in vested stock options</a>.It’s all about priorities.

Tesla Motors (TSLA US) doesn’t want you to worry that it needed a record $518 million in energy credit sales plus a surprising $101 million in Bitcoin (XBTUSD CURNCY)gains to generate the record net “profit” of $438 million it reported for the first quarter versus the similarly enhanced $16 million reported last year.Otherwise you might notice that core operations actually lost nearly $200 million despite a 109% increase in deliveries to a record 184,877 versus last year. This loss was little better, and revenue was lower, versus Tesla’s disappointing fourth quarter results as I discussed in Tesla: Oh No You Didn’t on 1/28/21. First quarter revenue slumped sequentially despite higher deliveries as profitability plunged on rising operating costs plus further severe price cuts still necessary to encourage sales.While Tesla had reason to worry since most of the total deliveries reported didn’t materialize until the final weeks of the quarter, it’s also easy to surmise that Tesla used its creative profit-making strategy to make sure CEO Elon Musk could snag another $11 billion in vested stock options.It’s all about priorities.

Tesla Goes to Record Extremes To Create Q1 "Profits"

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.

We have been pointing out that following Tesla’s loss of its market leadership position in Europe to VW, that intensifying competition in China and the US would likely lead to the veil being completely stripped away. For its part, Tesla seems to be eagerly contributing to this with typically arrogant responses to complaints about its never ending quality issues.

We have been pointing out that following Tesla’s loss of its market leadership position in Europe to VW, that intensifying competition in China and the US would likely lead to the veil being completely stripped away. For its part, Tesla seems to be eagerly contributing to this with typically arrogant responses to complaints about its never ending quality issues.

Tesla – Crashes in the US and Cockiness in China

Our constant refrain over the last few years as EV and AD related hype built was that traditional automakers in general and Toyota in particular did not lack anything technologically to compete with “disruptors”. VW’s rapid gobbling up of Tesla’s share in Europe has demonstrated this and with Toyota now accelerating its own EV launches, we believe this will become abundantly clear within the next 18 months.

Our constant refrain over the last few years as EV and AD related hype built was that traditional automakers in general and Toyota in particular did not lack anything technologically to compete with “disruptors”. VW’s rapid gobbling up of Tesla’s share in Europe has demonstrated this and with Toyota now accelerating its own EV launches, we believe this will become abundantly clear within the next 18 months.

Toyota – The EV and AD March Continues Beyond Zero

China Specialist, Auto and Industrial Specialist

Victoria Li

Launched on April 15th, Geely's highly anticipated EV model, Zeekr 001, beat market expectations by offering reasonable prices and attractive features. Market feedback shows that it's gaining interest from potential buyers who initially target to NIO, Xpeng, BYD Han and Tesla. Please see the details in the note. As a result, it's very likely that Zeekr 001 would become one of the most popular local brand EV models in China market. We believe Geely's valuation re-rating would be triggered. Compared to BYD which trades at 75.8x P/E 2021E due to market's preference on BYD's EV future, Geely trades at 18.7x P/E 2021E based on Bloomberg consensus.Furthermore, Geely and its parent company are seeking for IPO opportunities for Lotus and Zeekr (owned by Geely), and Polestar and Volvo Car (owned by Geely's parent company). These could become Geely's valuation re-rating triggers as well.

Launched on April 15th, Geely's highly anticipated EV model, Zeekr 001, beat market expectations by offering reasonable prices and attractive features. Market feedback shows that it's gaining interest from potential buyers who initially target to NIO, Xpeng, BYD Han and Tesla. Please see the details in the note. As a result, it's very likely that Zeekr 001 would become one of the most popular local brand EV models in China market. We believe Geely's valuation re-rating would be triggered. Compared to BYD which trades at 75.8x P/E 2021E due to market's preference on BYD's EV future, Geely trades at 18.7x P/E 2021E based on Bloomberg consensus.Furthermore, Geely and its parent company are seeking for IPO opportunities for Lotus and Zeekr (owned by Geely), and Polestar and Volvo Car (owned by Geely's parent company). These could become Geely's valuation re-rating triggers as well.

Geely (175.HK): New EV Model Starts New Era

United States

Tesla Inc. operates as a multinational automotive and clean energy company. The Company designs and manufactures electric vehicles, battery energy storage from home to grid-scale, solar panels and solar roof tiles, and related products and services. Tesla owns its sales and service network and sells electric power train components to other automobile manufacturers.

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Tesla (TSLA US)

Tesla – the Cost of Capital Dilemma

We believe the market has not considered the potential significant change in Tesla’s cost of capital, which we believe could have a significant...

Rickin Thakrar

Tesla Goes to Record Extremes To Create Q1 "Profits"

Tesla needed a whopping 46% increase in energy credit sales and sizable gains from selling recently bought Bitcoin to produce Q1 "profit"—and an...

Vicki Bryan

Tesla – Crashes in the US and Cockiness in China

Following its loss of market leadership in Europe, Tesla looks set to struggle in the US and China as well given mounting problems from its less...

Mio Kato

Toyota – The EV and AD March Continues Beyond Zero

Toyota's recent announcements on EVs and its Advanced Drive technology point to the company finally dispelling market misconceptions about its...

Mio Kato

Geely (175.HK): New EV Model Starts New Era

Launched on April 15th, Geely's highly anticipated EV model, Zeekr 001, beat market expectations by offering reasonable prices and attractive...

Victoria Li

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Tesla – the Cost of Capital Dilemma

We believe the market has not considered the potential significant change in Tesla’s cost of capital, which we believe could have a significant...

Rickin Thakrar

Tesla Goes to Record Extremes To Create Q1 "Profits"

Tesla needed a whopping 46% increase in energy credit sales *and* sizable gains from selling recently bought Bitcoin to produce Q1 "profit"—and an...

Vicki Bryan

Tesla – Crashes in the US and Cockiness in China

Following its loss of market leadership in Europe, Tesla looks set to struggle in the US and China as well given mounting problems from its less...

Mio Kato

Toyota – The EV and AD March Continues Beyond Zero

Toyota's recent announcements on EVs and its Advanced Drive technology point to the company finally dispelling market misconceptions about its...

Mio Kato

Geely (175.HK): New EV Model Starts New Era

Launched on April 15th, Geely's highly anticipated EV model, Zeekr 001, beat market expectations by offering reasonable prices and attractive...

Victoria Li

Tesla needed a whopping 46% increase in energy credit sales and sizable gains from selling recently bought Bitcoin to produce Q1 "profit"—and an...