In today’s briefing:
- Noteworthy Flow Trend: Korea NPS Overweighting Local Equity
- Tesla Motors: Record Exposure, But Still Under-Owned
- Zozo – Q4 21 Results Reaction: Mixed but Underlying Consumer Growth Remains Solid
- Zozo – Operating Leverage Apparently Less Fun On The Downside
- Asahi Raises Domestic Beverage Prices: Elastic “Beer” Demand Makes the Price Hike Unfavourable
- Spotify 1Q22 Earnings: Netflix Like?
- IBJ (6071): Expecting Reopening to Trigger Marriage Demand; Reiterate Buy
- Okada Manila: Transformation to a Public Company Finally in View: 1Q22 Results Auger Bullish Debut
- Mahindra CIE – All-Round Beat, Expect Improvement to Continue
- PLANB: Solid Performance for OOH Business Throughout 2022
Noteworthy Flow Trend: Korea NPS Overweighting Local Equity
- A noteworthy flow trend in the Korean stock market is the National Pension Service’s local equity purchase. For this, they tend to overweight those previously underweighted blue-chip stocks.
- All of the top 10 most net-bought stocks by local pensions on April 18-26 are KOSPI 200 constituents. And most of them all have a relatively small NPS-owned stake.
- Most of them have significantly outperformed the KOSPI 200 (-0.90%) during this period.
Tesla Motors: Record Exposure, But Still Under-Owned
- Ownership in Tesla hits record levels among Global managers. Of the 371 Global equity funds in our analysis, a record 15.1% now have exposure to the stock.
- GARP managers are the most aggressively allocated, with a 0.42% holding on average, though the larger individual positions are held by Growth and Aggressive Growth strategies.
- Despite this record, Tesla remains under-owned by Global active managers compared to large cap peers, and is the second largest underweight in the World
Zozo – Q4 21 Results Reaction: Mixed but Underlying Consumer Growth Remains Solid
- Results for Q4 and FY22 guidance were mixed with platform sales and revenue largely in-line but margins slightly weaker
- The loss of a major B2B customer wipes out almost all the growth in that segment but core consumer growth remains solid (10%+) as do operating KPIs
- The read across to parent Z Holdings is limited as the difference in company guidance and consensus operating profit is less than 1% of ZHD consolidated
Zozo – Operating Leverage Apparently Less Fun On The Downside
- Zozo reported yesterday missing slightly across the board with OP missing consensus by 6.7% on a 0.7% miss at the top line.
- GMV was reasonable due to apparent generosity on reward points and strong promotional spending.
- OP guidance of ¥51.5bn was noticeably below consensus and while Zozo is considered conservative we expect a miss and long-term stagnation.
Asahi Raises Domestic Beverage Prices: Elastic “Beer” Demand Makes the Price Hike Unfavourable
- Asahi Group Holdings (2502 JP) announced yesterday that it will raise the prices of a majority of its domestic beverage brands to pass the rising cost of raw materials to customers.
- Although beers as a whole has a relatively inelastic demand, the price elasticity in different categories of beer varies quite a bit with high malt beers having highly elastic demand.
- We think the price hike could be more detrimental to Asahi than its competitors as the company generates most of its domestic revenue from the price-sensitive high malt beer segment.
Spotify 1Q22 Earnings: Netflix Like?
- Like Netflix, Spotify is increasing spend on proprietary content… at the same time rivals are, which makes the ROI on this spend worth less.
- Promised margin inflection no where in sight. Have to wait for Analyst Day for more clarity.
- While we could justify a share price in the $70s, we no longer think Spotify is as compelling a risk reward short as it has for the past two years.
IBJ (6071): Expecting Reopening to Trigger Marriage Demand; Reiterate Buy
- We update our earnings forecast and valuation model for IBJ (6071, the company) and adjust our target price to 1,300 yen
- The number of marriages has continued to decline over the past two years due to the pandemic, and we believe that latent demand for marriage among singles has been increasing
- Directly-owned stores and party business: As consumer activity recovers, the number of party participants, as well as the number of members and successful marriages at directly- owned stores, is expected to recover
Okada Manila: Transformation to a Public Company Finally in View: 1Q22 Results Auger Bullish Debut
- The Okada Manila gaming property will finally become investible by 3Q22 with the Spac IPO now planned for debut by June.
- US based 26 Capital Acquisition company aims for US trading on the NASDAQ and UE’S alternate subsidiary, Asiabest will trade on Manila exchange.
- The Okada property leads the entertainment zone properties in market share.
Mahindra CIE – All-Round Beat, Expect Improvement to Continue
- MACA’s 1QCY22 performance was an all-round beat, led by strong revenue and profitability in the EU and robust margin in India
- We raise our CY22/CY23 EPS estimate by 29%/12% to account for an improvement in revenue and EBITDA margin in India and the EU business
- Consolidated revenue grew 18% YoY to INR25.9b (est. INR22.8b), EBITDA rose 3.5% to INR3b (est. INR2.24b), and adjusted PAT increased by 6% to INR1.6b (est. INR0.9b) in 1QCY22.
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PLANB: Solid Performance for OOH Business Throughout 2022
- We expect the company’s earnings to expand YoY in every quarter of 2022 which will be supported by strong recovery in a media revenue together with solid operating margin
- Bt250m per year after the asset acquisition in 2021. •Expect the company to report net profit in 1Q22 at Bt90m (+142%YoY -41%QoQ) YoY expansion will be due to a 20%
- Media revenue is expected to grow 31%CAGR in 2022-23E, driven by revenue recognition of new media capacity in digital, static segments (mainly from Aqua), and, retail media in 7-eleven stores
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