In today’s briefing:
- Bukalapak (BUKA IJ) – A Virtuous Circle to Profitability
- Ford: Staying The Course
- Amid Slow ROE Improvement, Calls for Stronger Shareholder Returns Will Become Even Stronger
Bukalapak (BUKA IJ) – A Virtuous Circle to Profitability
- Bukalapak continues to demonstrate the effectiveness of circular nature of its business model in 2Q2023, with demand from its O2O business fueling growth in its marketplace, creating a flywheel effect.
- Although TPV growth slowed slightly in 2Q2023, revenues saw much stronger growth, especially its marketplace business, which booked much higher take-rates driven by its specialty verticals, including gaming and gadgets.
- Bukalapak will continue to benefit from expanding take rates as specialty, such as AlloFresh feed in more SKUs and new verticals gain traction. Valuations remain attractive on 0.85x FY2023E EV/Sales.
Ford: Staying The Course
- Ford Motor Company’s recent selloff likely provides a lucrative entry point.
- Ford’s robust second quarter earnings paired with a positive output gap in the U.S. speaks volumes.
- Ford possesses high-quality characteristics, lending it the latitude to blossom as credit spreads recede.
Amid Slow ROE Improvement, Calls for Stronger Shareholder Returns Will Become Even Stronger
- Modest profit growth and slow ROE growth are expected this year, and sustained TOPIX appreciation in the future will depend on increases in ROE and ROE+DOE.
- Lower OP Margin is the reason for the lack of ROE growth in FY3/2023. OP Margin and ROE are expected to have difficulty rebounding from this year’s profit forecast.
- Looking at the results of DOE, Total Dividends Paid and Dividend Payout for FY3/2023, which have not improved, there is still a lot of room for shareholder returns.
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