In today’s briefing:
- Renault & Nissan “Agree” On New Terms – A Diet Nothing🍔, Exchangeable into Shaq Fingerguns
- TOPIX Inclusion: AXXZIA Inc (4936 JP) – Time to Take Profits
- Tesla Q4: Stalling Growth, Shrinking Margins, Weaker Guidance, Mystery “Investment”
- Japanese Department Stores: An Opportunity to Trade FQ3 Earnings This Week
- Gujarat Ambuja Exports Ltd (GAEL): Forensic Analysis
- Hesai Group IPO Preview: Will Rich Valuation Worry Long-Term Investors?
- Xpeng: Accelerated Model Launch Campaign May Surprise
- Netflix Inc: Continued Subscriber Growth & Other Drivers
- Procter & Gamble: Continued Acquisitions In Skincare & Haircare & Other Drivers
- Tesla Inc: Launch In Thailand & Other Drivers
Renault & Nissan “Agree” On New Terms – A Diet Nothing🍔, Exchangeable into Shaq Fingerguns
- Today, a Nikkei article suggested (after other media suggested last week) that Renault SA (RNO FP) and Nissan Motor (7201 JP) have come to agreement about their new deal.
- Post-Close, an announcement. Two striking things about this “agreement” a) it comes many months after they started negotiating, and b) we have few details, and c) we’re missing a bit.
- Renault agrees to cap voting rights in Nissan. Nissan agrees to invest in RNO’s EV spinoff, and so far, they agree to strengthen the Alliance. What’s missing is interesting/key.
TOPIX Inclusion: AXXZIA Inc (4936 JP) – Time to Take Profits
- Japan-Based skincare and cosmetics maker AXXZIA Inc (4936 JP) announced on 9th November 2022 they were planning to move from TSE Growth to TSE Prime.
- Travis Lundy was Bullish on this name as he discussed in AXXZIA (4936 JP) – TOPIX Inclusion Is Likely In February and the stock has gained around 12% since then.
- Today after the close, AXXZIA Inc (4936 JP) announced they had received the approval for their Prime Market move in February which could lead to a TOPIX Inclusion in March.
Tesla Q4: Stalling Growth, Shrinking Margins, Weaker Guidance, Mystery “Investment”
- Tesla’s big miss on Q4 deliveries turned into stalling revenue growth, sharply lower margins, and reduced guidance—as I expected.
- As usual, actual profit and cash generated were much lower versus reported, excluding energy credit sales and unusual items.
- So with cash burn up and guidance down, what was the mysterious $4.4 billion “investment”? Asking for a bird.
Japanese Department Stores: An Opportunity to Trade FQ3 Earnings This Week
- Two of the biggest department store chains in Japan, H2 O Retailing (8242 JP) & Isetan Mitsukoshi Holdings Ltd (3099 JP) are set to disclose FQ3 earnings this week.
- The ones with FQ3 ending in November, J Front Retailing (3086 JP) and Takashimaya (8233 JP) surprised to the upside with 6% and 8% price gains on earnings.
- Our analysis indicates that H2O Retailing & Isetan Mitsukoshi could deliver stronger FQ3 results. Thus, we would look to trade Japanese Department Stores before earnings this week.
Gujarat Ambuja Exports Ltd (GAEL): Forensic Analysis
- Gujarat Ambuja Exports (GAEX IN) is an Agro Processing conglomerate having a diverse product profile across oil seeds, edible oil refining, maize and starch, cotton yarn, wheat processing, etc.
- Our forensics primarily include the takeaways on MACPPL acquisition, its true rationale, accounting impact on the balance sheet and few disclosure errs.
- Other major takeaway relates to capex story and grey areas relating to the capacity size and timely completion, especially for its marquee plant in Malda.
Hesai Group IPO Preview: Will Rich Valuation Worry Long-Term Investors?
- Hesai Group (HSAI US) , a global leader in LiDAR technology for autonomous driving and ADAS, filed for a $100M placeholder IPO with Goldman Sachs and Morgan Stanley leading the offering.
- The company’s last round was a $70M Series D+ at a $3B pre-money valuation, implying EV/LTM Rev multiple of 19x today, a significant premium to comparable companies in the space.
- We remain cautious about buying into the Hesai Group (HSAI US) IPO due to rich valuation, negative free cash flows, loss-making business, intense competition, and developments in alternative technologies.
Xpeng: Accelerated Model Launch Campaign May Surprise
- Xpeng has announced it is speeding up its new model launch pipeline by launching 5 new models this year
- If all go to plan, Xpeng’s sales may hit 30k vehicles/month end of ’23 or early ’24
- The appointment of new President from ICE sector may lead to some market confusion on management and branding in the short term
Netflix Inc: Continued Subscriber Growth & Other Drivers
- Netflix delivered a mixed set of results for the last quarter.
- The company surpassed its own expectations with respect to subscriber growth and added 7.66 million net new subscribers in Q4, higher than its own forecast of 4.5 million additions.
- The company ended 2022 with 230.75 million worldwide, surpassing its previous target of 227.59 million, implying a 4% subscriber growth.
Procter & Gamble: Continued Acquisitions In Skincare & Haircare & Other Drivers
- Procter & Gamble saw good results from implementing its integrated strategies and the company delivered an all-around beat.
- P&G saw its organic sales increasing while its global aggregate market share held, its productivity savings continuing, and its supply efficiency improved further.
- Hair Care saw a mid-single-digit increase, while oral care, Skin and Personal Care, Baby Care, and Family Care saw low single-digit increases.
Tesla Inc: Launch In Thailand & Other Drivers
- Tesla delivered a mixed set of results in the last quarter and failed to meet revenue expectations of Wall Street.
- Tesla has had a challenging 2022 because of delivery challenges, high interest rates, and forced shutdowns.
- For Autopilot, Tesla deployed a Full Self-Driving Beta for city streets to around 400,000 customers in North America.
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