Global Automotive Stocks/EV Focus/Event Driven, SC Capital

SC Capital

Global Automotive Stocks/EV Focus/Event Driven

Over 22 years covering Japanese equities on both the sell side and the buy side. 

Bottom-up Japan Equities Research

Equity Bottom-Up

<ul>
<li>Toyota is famous for conservative guidance, but today's FY3/23 estimates of a 22% decline in pretax profit raised some eyebrows. Raw materials &amp; logistics are to blame. </li>
<li>Adjusting for various conservative assumptions by Toyota for FY3/23, flat profits are possible, but margin deterioration appears unavoidable.  </li>
<li>On flat profits in FY3/23, the 12x PER &amp; 5.5x EV/EBITDA are not particularly cheap. Toyota is in the "Guidance Dog House" until it can produce a significant beat. </li>
</ul>


Toyota is famous for conservative guidance, but today's FY3/23 estimates of a 22% decline in pretax profit raised some eyebrows. Raw materials &amp; logistics are to blame. 
Adjusting for various conservative assumptions by Toyota for FY3/23, flat profits are possible, but margin deterioration appears unavoidable.  
On flat profits in FY3/23, the 12x PER &amp; 5.5x EV/EBITDA are not particularly cheap. Toyota is in the "Guidance Dog House" until it can produce a significant beat. 


Toyota Guides for a 22% Profit Drop--Tough to Buy This Dip For Now

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

<ul>
<li>
Tesla is losing ground in China, which it needs to juice its margins, create *all* its profits &amp; cash flow, &amp; fund most of billions spent on capex. </li>
<li>
Aging Model Y—its last and only thriving model—won't save it. 
</li>
<li>Sales in China were weakening even before what now has become an extended disruption as China fights its worst Covid surge in two years.</li>
</ul>



Tesla is losing ground in China, which it needs to juice its margins, create *all* its profits &amp; cash flow, &amp; fund most of billions spent on capex. 

Aging Model Y—its last and only thriving model—won't save it. 

Sales in China were weakening even before what now has become an extended disruption as China fights its worst Covid surge in two years.


Forget Elon's Twitter Spatter. Tesla's Got Trouble In China.

European Event-Driven Analyst

Jesus Rodriguez Aguilar

Event-Driven

Danieli & C. Officine Meccaniche / Event-Driven

<ul>
<li>Spreads have generally tightened across our liquid universe, in line with the recent market gains.</li>
<li>Recommendations Long ords / short prefs: Fuchs Petrolub, Svenska Handelsbanken, Ericsson.</li>
<li>Recommendations Long prefs / short ords: Danieli, Sixt, Atlas Copco, Grifols, Telecom Italia, Volvo AB, Volkswagen, Schroders.</li>
</ul>


Spreads have generally tightened across our liquid universe, in line with the recent market gains.
Recommendations Long ords / short prefs: Fuchs Petrolub, Svenska Handelsbanken, Ericsson.
Recommendations Long prefs / short ords: Danieli, Sixt, Atlas Copco, Grifols, Telecom Italia, Volvo AB, Volkswagen, Schroders.


Liquid Universe of European Ordinary and Preferred Shares: April ‘22 Report

<ul>
<li>Spreads have generally widened across our liquid universe in line with the recent market turmoil.</li>
<li>Recommendations Long ords / short prefs: Fuchs Petrolub, Henkel, Handelsbanken.</li>
<li>Recommendations Long prefs / short ords: Atalas Copco, Grifols, Investor AB, SSAB, Telecom Italia (takeover interest), Volkswagen, is Schroders near the bottom?</li>
</ul>


Spreads have generally widened across our liquid universe in line with the recent market turmoil.
Recommendations Long ords / short prefs: Fuchs Petrolub, Henkel, Handelsbanken.
Recommendations Long prefs / short ords: Atalas Copco, Grifols, Investor AB, SSAB, Telecom Italia (takeover interest), Volkswagen, is Schroders near the bottom?


Liquid Universe of European Ordinary and Preferred Shares: March '22 Report

Porsche Automobil Holding  / Event-Driven

<ul>
<li>I would value Porsche on 18.9x €5.3 billion 22eEBIT, i.e. €100bn; Ferrari, which has moderately higher EBIT margins (25% vs. 16%), trades on 31.2x EV/22e EBIT (Capital IQ consensus).</li>
<li>The current discount of VW prefs to ords is 23.2%. A Porsche IPO without major changes on VW share structure, would be positive for the preference shares. Long prefs/short ords.</li>
<li>An IPO of Porsche would be beneficial for the Porsche SE shares and the current discount to NAV should tighten even more, in my view. Long 1 PAH3 GR/short 0.5136 VOW GR.</li>
</ul>


I would value Porsche on 18.9x €5.3 billion 22eEBIT, i.e. €100bn; Ferrari, which has moderately higher EBIT margins (25% vs. 16%), trades on 31.2x EV/22e EBIT (Capital IQ consensus).
The current discount of VW prefs to ords is 23.2%. A Porsche IPO without major changes on VW share structure, would be positive for the preference shares. Long prefs/short ords.
An IPO of Porsche would be beneficial for the Porsche SE shares and the current discount to NAV should tighten even more, in my view. Long 1 PAH3 GR/short 0.5136 VOW GR.


Germany

Volkswagen AG manufactures and sells vehicles. The Company offers economy and luxury automobiles, sports cars, trucks, and commercial vehicles. Volkswagen serves customers worldwide.

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Volkswagen (VOW GR)

Toyota Guides for a 22% Profit Drop--Tough to Buy This Dip For Now

Toyota is dead money until they provide a huge beat. Earnings call raised more questions than management was willing to answer. Quite surprisingly...

SC Capital

Forget Elon's Twitter Spatter. Tesla's Got Trouble In China.

Tesla is losing ground in China, which it needs to juice its margins, create all its profits & cash flow, & fund most of billions spent on capex....

Vicki Bryan

Liquid Universe of European Ordinary and Preferred Shares: April ‘22 Report

Spreads have generally tightened across our liquid universe in line with the recent market gains. Danieli, Media for Europe, Schroders and Sixt...

Jesus Rodriguez Aguilar

Liquid Universe of European Ordinary and Preferred Shares: March '22 Report

Spreads have generally widened across our liquid universe in line with the recent market turmoil. Schroders non-voting and Sixt prefs. stand out...

Jesus Rodriguez Aguilar

PAR3/VOW3/Potential Porsche IPO

The valuation of Porsche OpCo could reach €100 billion, vs. a market capitalization of c. €109.4 billion of VW. This is a feasible range...

Jesus Rodriguez Aguilar

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Toyota Guides for a 22% Profit Drop--Tough to Buy This Dip For Now

Toyota is dead money until they provide a huge beat. Earnings call raised more questions than management was willing to answer. Quite surprisingly...

SC Capital

Forget Elon's Twitter Spatter. Tesla's Got Trouble In China.

Tesla is losing ground in China, which it needs to juice its margins, create *all* its profits & cash flow, & fund most of billions spent on capex....

Vicki Bryan

Liquid Universe of European Ordinary and Preferred Shares: April ‘22 Report

Spreads have generally tightened across our liquid universe in line with the recent market gains. Danieli, Media for Europe, Schroders and Sixt...

Jesus Rodriguez Aguilar

Liquid Universe of European Ordinary and Preferred Shares: March '22 Report

Spreads have generally widened across our liquid universe in line with the recent market turmoil. Schroders non-voting and Sixt prefs. stand out...

Jesus Rodriguez Aguilar

PAR3/VOW3/Potential Porsche IPO

The valuation of Porsche OpCo could reach €100 billion, vs. a market capitalization of c. €109.4 billion of VW. This is a feasible range...

Jesus Rodriguez Aguilar

Tesla is losing ground in China, which it needs to juice its margins, create all its profits & cash flow, & fund most of billions spent on capex....