In today’s briefing:
- Coupang: Maverick Capital’s Supersized Exposure Is Too Big of a Risk
- India Channel Insight #42 | Britannia, Dabur
- Unity Software Inc.: Initiation of Coverage – IronSource Acquisition, Metaverse Upside, & Market Position, Financial Forecasts, DCF & Comparables Valuation, Key Risks (07/22)
- Fosun Tourism (1992 HK): Positive Profit Alert and Improving Outlook Guidances
- BEM : Expect 2Q22 Earnings to Hit 11 Quarter High
- Apollo Hospitals Enterprise (APHS IN): Set to Benefit from Medical Tourism Resumption in India
- Corteva, Inc.: Initiation of Coverage – Business Strategy, Pro Farm Agreement, Herbicides Update, Financial Forecasts, DCF & Comparables Valuation, Key Risks (07/22)
- BioMarin Pharmaceutical: Initiation of Coverage – Business Strategy, Key Drivers, Financial Forecasts, DCF & Comparables Valuation, ESG & Other Risks (07/22)
Coupang: Maverick Capital’s Supersized Exposure Is Too Big of a Risk
- Coupang (CPNG US) has bounced sharply following a 13G filling which indicated a change of heart from the pre-IPO investor, Maverick Capital with the purchase of an additional 7.7m Coupang shares.
- Maverick seems to be expecting a significant improvement in profitability, in line with Q1. However, we think this is unrealistic, given Coupang’s marginal cost trends.
- Maverick’s investment decisions on Coupang lack objectivity and its supersized exposure create too big of a risk to Coupang’s share price.
India Channel Insight #42 | Britannia, Dabur
- The current excess rainfall across India is so far not leading to any material damage in rural India.
- Britannia Industries (BRIT IN) continues to operate in a favourable environment and is possibly even immune to down trading.
- Dabur India Ltd (DABUR IN) channels remain optimistic about matching YoY value growth, however, in terms of volume there still is quite a bit of ambiguity.
Unity Software Inc.: Initiation of Coverage – IronSource Acquisition, Metaverse Upside, & Market Position, Financial Forecasts, DCF & Comparables Valuation, Key Risks (07/22)
- This is our first report on game development software market leader, Unity Software.
- The company’s stock has taken a beating loke most other software players with a negative bottom-line.
- Its previous quarterly result was also below par despite the company generating $320 million, an increase of 36% from the previous year.
Fosun Tourism (1992 HK): Positive Profit Alert and Improving Outlook Guidances
- Fosun Tourism (1992 HK) expects a sharp 87.5-92.5% reduction in its losses in 1H22, driven primarily by significant revival in its Club Med business, though China is weak.
- Outlook for 2H22 looks very encouraging as booking figures indicate good YoY volume growth and double-digit rate improvement in EMEA and Americas.
- China also witnessed solid rebound in Jul and Aug after removal of lockdowns in 2Q22. New Club Med Joyview resorts including Changbaishan and Qiandaohu are added contributors.
BEM : Expect 2Q22 Earnings to Hit 11 Quarter High
- Maintain BUY recommendation for BEM with a target price of Bt9.50.We expect the company to report 2Q22 net profit at Bt577m,the highest level in the past 11 quarter, mainly supported
- Strong recovery in earnings in2Q22 and 2H22 2Q22 Revenue shall be reported at Bt3.3bn (+36%YoY +6%QoQ) supported by solid rebound in daily average MRT ridership to 231k trips (+94%YoY +23%QoQ)
- We anticipate average daily MRT ridership to recover substantially in 2H22 to around 310k trips by end of this year,the level last time we have seen in Nov’21. However, pre-COVID
Apollo Hospitals Enterprise (APHS IN): Set to Benefit from Medical Tourism Resumption in India
- Medical tourism in India was negatively impacted by the pandemic. As the government is lifting travel restrictions, reopening border, and resuming international flight services, medical tourists have started returning back.
- Large corporate hospitals, having pan-India presence, like Apollo Hospitals Enterprise (APHS IN) are set to benefit from this trend. Medical tourism contributed 10% of revenue of Apollo in pre-pandemic era.
- Apollo’s market dominance and expansion plan in hospital and foray into online services have sharpened its competitive edge over competitors. Its healthcare business is expected to grow mid-teens this year.
Corteva, Inc.: Initiation of Coverage – Business Strategy, Pro Farm Agreement, Herbicides Update, Financial Forecasts, DCF & Comparables Valuation, Key Risks (07/22)
- This is our first report on Corteva, a major agricultural player within the seeds and crop protection domain.
- The company registered its Enlist Duo and Enlist One herbicides through 2029 with the U.S.
- EPA.
BioMarin Pharmaceutical: Initiation of Coverage – Business Strategy, Key Drivers, Financial Forecasts, DCF & Comparables Valuation, ESG & Other Risks (07/22)
- This is our first report on rare disease specialist, BioMarin Pharma.
- The company had a decent start to 2022 recording $519 million in total revenues in the previous quarter.
- The $20 million in Voxzogo contributions during the first quarter increased the company’s full-year 2022 guidance to between $100 million and $125 million and will play a significant role in its future growth.
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