In today’s briefing:
- SONY (6758) | Re-Acceleration of Growth in Games
- Selected European Holdcos and DLC: January‘23 Report
- Z Holdings (Neutral) – Q3 22 Results Reaction: Lofty EBITDA Targets Cut on Erosion in Core Business
SONY (6758) | Re-Acceleration of Growth in Games
- Sony’s Q3 operating profit fell 8% YoY to Y428b beating consensus estimates by around 15%
- The PS5 has now sold over 32m units, finally shaking off supply constraints. Will VR2 surprise?
- We remain bullish on the stock at 15x earnings. Sony is a core play on content creation and digitization.
Selected European Holdcos and DLC: January‘23 Report
- Discounts to NAV of covered holdcos have generally tightened since New Year. Discounts to NAV (31 January): C.F.Alba, 49.7%; GBL, 35.3%; Heineken Holding, 17.4%; Industrivärden C, 13.8%; Investor B, 11.4%;
- Porsche Automobile Holding, 47.4%. The spread of Rio Tinto DLC widened to 14.8%. Spreads tend to widen in bear markets but short-term recoveries provide opportunities on tightening discounts.
- Recommended trades are: GBL, Porsche Automobile Holding, Rio Tinto (DLC), CF Alba (long position).
Z Holdings (Neutral) – Q3 22 Results Reaction: Lofty EBITDA Targets Cut on Erosion in Core Business
- Management has cut its FY23 EBITDA target from its long-term goal of ¥390bn to c. ¥363bn as its core ad and eCommerce performance gets weaker
- Advertising revenue fell 1% YoY whilst eCommerce volumes (GTV) on the core third-party marketplace Yahoo!Shopping were also down significantly
- The outlook for FY23 is further blurred by management changes to address business challenges and deeper LINE/Yahoo integration. We are lowering our target price to ¥425
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