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>Tesla Inc.'s first-quarter earnings for 2024 offered a critical and insightful update on the electric vehicle manufacturer's strategy and financial performance.</li><li>Tesla appears committed to its strategic focus on vehicle autonomy and digitisation, with CEO Elon Musk stating that the company should be viewed primarily as an AI (Artificial Intelligence) and robotics firm, underlining its commitment to Full Self-Driving (FSD) as a key future revenue stream.</li><li>Baptista Research looks to evaluate the different factors that could influence the company's price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology.</li></ul>

Tesla Inc.'s first-quarter earnings for 2024 offered a critical and insightful update on the electric vehicle manufacturer's strategy and financial performance.Tesla appears committed to its strategic focus on vehicle autonomy and digitisation, with CEO Elon Musk stating that the company should be viewed primarily as an AI (Artificial Intelligence) and robotics firm, underlining its commitment to Full Self-Driving (FSD) as a key future revenue stream.Baptista Research looks to evaluate the different factors that could influence the company's price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology.

Tesla Inc.: Growth As An AI Company And Its Future in Power Generation and Distributed Computing! - Major Drivers

China New Economy Equity Analyst, Blue Lotus Research Institute

Robert McKay

China New Economy Equity Analyst

China growth and global non-US Internet equities

Blue Lotus Research Institute

Blue Lotus Research is a Hong Kong Type 4 Licensed investment advisory firm focusing on Chinese growth equities and global non-US Internet equities

Thematic (Sector/Industry)

<ul>
<li>US semiconductor restrictions are limiting China's access to advanced AI accelerators, causing a widening gap in AI compute. The US will expand its lead over China to ~7x by 2025.</li>
<li>Although China has domestic alternatives, bottlenecks due to separate US restrictions on semiconductor equipment are hindering yields and capacity expansions, effectively limiting China’s capacity to train state-of-the-art AI models.</li>
<li>To maximize AI compute, Huawei will likely curtail smartphone semiconductors in favor of AI accelerators. We expect manufacturers offering mid-end Android devices like <a href="https://www.smartkarma.com/entities/xiaomi-corp" target="_blank" data-smartkarma-citation="entities:24409:1" rel="noopener">Xiaomi Corp (1810 HK)</a> to benefit first.</li>
</ul>


US semiconductor restrictions are limiting China's access to advanced AI accelerators, causing a widening gap in AI compute. The US will expand its lead over China to ~7x by 2025.
Although China has domestic alternatives, bottlenecks due to separate US restrictions on semiconductor equipment are hindering yields and capacity expansions, effectively limiting China’s capacity to train state-of-the-art AI models.
To maximize AI compute, Huawei will likely curtail smartphone semiconductors in favor of AI accelerators. We expect manufacturers offering mid-end Android devices like Xiaomi Corp (1810 HK) to benefit first.


Demand for AI Chips Might Cut Huawei's Smartphone Semiconductor Short

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

<ul>
<li>Tesla Motors (TSLA US) sold one car in January 2024 in South Korea. In comparison, Tesla sold 1,022 vehicles in December 2023 and 13,885 units in 2023.</li>
<li>The key reason for the sharp plunge in vehicle sales in January has been due to the government's slashing EV subsidies for vehicles with Chinese LFP based batteries.</li>
<li>Furthermore, many consumers avoided buying Tesla vehicles in January as they waited for the government's announcements of new EV subsidies. </li>
</ul>


Tesla Motors (TSLA US) sold one car in January 2024 in South Korea. In comparison, Tesla sold 1,022 vehicles in December 2023 and 13,885 units in 2023.
The key reason for the sharp plunge in vehicle sales in January has been due to the government's slashing EV subsidies for vehicles with Chinese LFP based batteries.
Furthermore, many consumers avoided buying Tesla vehicles in January as they waited for the government's announcements of new EV subsidies. 


Tesla Sold A Whopping One Car in January in South Korea

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

<ul>
<li>Q1 Deliveries trailed plunging market consensus, my even lower number, and Tesla's expectations as sales crashed while it overproduced to a new record cumulative excess inventory which jumped 70% y/y</li>
<li>This doesn't square with Tesla's explanation that sales were hurt by ongoing production issues—much like when the company used the same excuse for the disappointing Q3 2023. </li>
<li>This time deliveries were much lower, the miss versus market expectations much worse, and the deep well of unsold inventories even more formidable.</li>
</ul>


Q1 Deliveries trailed plunging market consensus, my even lower number, and Tesla's expectations as sales crashed while it overproduced to a new record cumulative excess inventory which jumped 70% y/y
This doesn't square with Tesla's explanation that sales were hurt by ongoing production issues—much like when the company used the same excuse for the disappointing Q3 2023. 
This time deliveries were much lower, the miss versus market expectations much worse, and the deep well of unsold inventories even more formidable.


Asia and Global Semiconductor and Tech Research

Andrew Lu

<ul>
<li>Tesla is facing a dilemma whether to aggressively cut price to boost shipment but lose margins or to keep price stable with a more moderated shipment growth like 10-20% y/y. </li>
<li>Three challenges ahead: 1. Collapsing margin vs. rising margin for key competitors? 2. Cybertruck is selling at a loss, more margin downside? 3. Valuation reset for lower sales CAGR? </li>
<li>Cautious on Tesla as its sales/earnings CAGR is falling below 20% with a rich valuation until we see cost cut on Cybertruck, FSD AI breakthrough, and low price model introduction.</li>
</ul>


Tesla is facing a dilemma whether to aggressively cut price to boost shipment but lose margins or to keep price stable with a more moderated shipment growth like 10-20% y/y. 
Three challenges ahead: 1. Collapsing margin vs. rising margin for key competitors? 2. Cybertruck is selling at a loss, more margin downside? 3. Valuation reset for lower sales CAGR? 
Cautious on Tesla as its sales/earnings CAGR is falling below 20% with a rich valuation until we see cost cut on Cybertruck, FSD AI breakthrough, and low price model introduction.


Tesla (TSLA) No Longer Prevails, a Dilemma and Touch Challenges Ahead

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 Inc.: Growth As An AI Company And Its Future in Power Generation and Distributed Computing! - Major Drivers

Tesla Inc.'s first-quarter earnings for 2024 offered a critical and insightful update on the electric vehicle manufacturer's strategy and...

Baptista Research

Demand for AI Chips Might Cut Huawei's Smartphone Semiconductor Short

US AI accelerator and wafer equipment restrictions are widening the US/China AI compute gap. Expect Huawei to curtail smartphone IC in favor of AI...

Blue Lotus Research Institute

Tesla Sold A Whopping One Car in January in South Korea

Tesla's laying off more than 10% of its global workforce is likely to further negatively impact the major rechargeable battery names in Korea...

Douglas Kim

Tesla Q1 Deliveries: Look Out Below

Severe job cuts coming at Tesla Inc after wildly overproducing Elon’s “appreciating assets” even as a year of drastic price cutting + expensive...

Vicki Bryan

Tesla (TSLA) No Longer Prevails, a Dilemma and Touch Challenges Ahead

Tesla No Longer Prevails, a Dilemma and Three Touch Challenges Ahead: 1. Collapsing margin vs. rising margin for peers; 2. Cybertruck is selling at...

Andrew Lu

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Tesla Inc.: Growth As An AI Company And Its Future in Power Generation and Distributed Computing! - Major Drivers

Tesla Inc.'s first-quarter earnings for 2024 offered a critical and insightful update on the electric vehicle manufacturer's strategy and...

Baptista Research

Demand for AI Chips Might Cut Huawei's Smartphone Semiconductor Short

​US AI accelerator and wafer equipment restrictions are widening the US/China AI compute gap. Expect Huawei to curtail smartphone IC in favor of AI...

Blue Lotus Research Institute

Tesla Sold A Whopping One Car in January in South Korea

Tesla's laying off more than 10% of its global workforce is likely to further negatively impact the major rechargeable battery names in Korea...

Douglas Kim

Tesla Q1 Deliveries: Look Out Below

Severe job cuts coming at Tesla Inc after wildly overproducing Elon’s “appreciating assets” even as a year of drastic price cutting + expensive...

Vicki Bryan

Tesla (TSLA) No Longer Prevails, a Dilemma and Touch Challenges Ahead

Tesla No Longer Prevails, a Dilemma and Three Touch Challenges Ahead: 1. Collapsing margin vs. rising margin for peers; 2. Cybertruck is selling at...

Andrew Lu

US AI accelerator and wafer equipment restrictions are widening the US/China AI compute gap. Expect Huawei to curtail smartphone IC in favor of AI...