In today’s briefing:
- Tata Motors ADS Delisting – Here We Go Again – Lots of Fun To Be Had!
- Tata Motors (TTM) To Delist ADSs: Details & Potential Trades
- Golden Agri-Resources (GGR SP) – FTSE Selling in December
- Assessing LG Energy Solution’s Flow Imbalance Situation
- Zomato (ZOMATO IN) | Food Delivery Expected to Continue Improving
- Coupang: Time Ditch EV/Sales and Focus on Profitability-Based Multiples
- BYD Launches Luxury EV Line in Challenge to High-End Foreign Brands
- Haier Smart Home (6690 HK): Opportunity Knocks as Depressed Valuation Cannot Reflect Outlook
- Booking Holdings: Major Drivers
- Bangladesh-Based B2B Ecommerce Firm Eyes $5m Raise
Tata Motors ADS Delisting – Here We Go Again – Lots of Fun To Be Had!
- Yesterday, with earnings, Tata Motors Ltd (TTMT IN) announced that it would delist its ADS, making an application on or around 13 January.
- This sounds relatively benign because since 2004 when the ADS was listed, local funding capacity has increased substantially. It may no longer be needed.
- But it is MUCH more interesting than that. There is lots of fun to be had here.
Tata Motors (TTM) To Delist ADSs: Details & Potential Trades
- Post market close yesterday, Tata Motors Ltd (TTMT IN) announced that it intended to delist Tata Motors ADR (TTM US) and terminate its ADS program.
- The easiest option for most ADS holders will be to sell the ADS. That could take the ADS lower and to trade at a discount to the underlying shares.
- Sell Tata Motors ADR (TTM US) outright or sell the ADS/buy Tata Motors Ltd (TTMT IN) for an arb trade.
Golden Agri-Resources (GGR SP) – FTSE Selling in December
- FTSE has announced that it will be changing Golden Agri Resources (GGR SP)‘s nationality from Singapore to Ineligible at the close on 16 December.
- This means the stock will be deleted from the FTSE All-World Index at the close on 16 December. We estimate passive trackers will need to sell multiple days ADV.
- Golden Agri Resources (GGR SP) trades cheaper than a lot of its peers but has outperformed them over the last year. There could be a short-term reversal.
Assessing LG Energy Solution’s Flow Imbalance Situation
- LG Energy’s virtually locked-up shares rise to nearly 95%. This should at least partially explain why its price has substantially outperformed the KOSPI in recent months, showing strong downward rigidity.
- Additional long-term money equivalent to 2-3% of SO can come in for 5% float shares. There is no precedent for a float crunch of this magnitude among top-cap local stocks.
- It seems necessary to reconsider taking a shorting position for LG Energy even after the 9th of next month when the short-term passives inflow situation is completed.
Zomato (ZOMATO IN) | Food Delivery Expected to Continue Improving
- Over the last five quarters, monthly transacting customers have increased by 36%, QoQ, the pace could be slower, but the trend remains upwards.
- AOVs and Order frequency have the potential to inch up, but only over the long term.
- Take rates are inching up, delivery fees are going higher, and with a higher market share Zomato (ZOMATO IN) ‘s food delivery business is expected to continue improving.
Coupang: Time Ditch EV/Sales and Focus on Profitability-Based Multiples
- South Korea’s largest e-commerce company, Coupang (CPNG US) is no longer a growth stock with revenue expected to start falling on a YoY basis from 4Q22 onwards.
- Therefore, we think Coupang’s current valuation, which is based on inflated revenue estimates should become redundant.
- We think a no-growth, low-margin business like Coupang does not deserve to trade north of 10.0x OP, whereas it is currently trading at 15.6x the best-case OP estimate.
BYD Launches Luxury EV Line in Challenge to High-End Foreign Brands
- Chinese carmaker BYD Co. Ltd. has unveiled its first luxury brand of electric vehicles (EV), joining its peers in efforts to impress wealthy domestic buyers
- The launch marks BYD’s latest step into the high-end auto market as it tries to outgrow its image as a manufacturer of mid- to low-end vehicles
- BYD is China’s largest EV and hybrid vehicle manufacturer by sales. In October, its wholesale shipments surpassed 200,000 for the second consecutive month
Haier Smart Home (6690 HK): Opportunity Knocks as Depressed Valuation Cannot Reflect Outlook
- Acceleration in earnings growth at Haier Smart Home Co Ltd (6690 HK) is an encouraging trend. We are happy to see expansion in both gross and operating margin in 3Q22.
- Further channel additions for Casarte and digitalisation efforts will bring positive profitability impact. Meanwhile, we welcome HSH’s increase in engagement of suppliers in product design process.
- Overseas growth has also accelerated in 3Q22 and there are numerous opportunities for HSH to expand its high-end presence and introduce new products in developed country markets.
Booking Holdings: Major Drivers
- Booking Holdings delivered a positive set of results in the quarter and managed an all-around beat.
- Their consumers reserved 240 million room nights in Q3, just under 0.25 million more than in Q3 2019.
- In this report, we have carried out a fundamental analysis of the historical financial statements of the company.
Bangladesh-Based B2B Ecommerce Firm Eyes $5m Raise
- Bangladesh-based ecommerce startup PriyoShop is looking to add US$5 million in a bridge funding round to its cart.
- Founded in 2020, PriyoShop handles commerce through its app and manages logistics in locations like Dhaka and Chattogram through its own fleet.
- The company said that third-party logistics companies then take on shipping across the rest of Bangladesh.
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