In today’s briefing:
- Formosa Sumco Technology – Earnings, Returns, Financial Position, Worsening Dramatically
- Tech Supply Chain Tracker (25-May-2024): Global EV charger market & key players
- [PDD Holdings (PDD US,BUY,TP US$172) TP Change]:Squeezing Supplier Base for Its Own Benefit,Globally
- Japanese Bigger-Cap Banks – Rates Story Continues, with the Prospect of Equity Holdings Disposals
- [Kuaishou (1024 HK, BUY, TP HK$83) Target Price Change]: Out-Performance in Off-Season Thanks to GAI
- Uber Technologies: Partnership Strategy and Advancements in Autonomous Vehicles! – Major Drivers
- Exact Sciences Corporation: Leveraging Health Systems and Electronic Ordering Channels To Catalyze Growth! – Major Drivers
- Insulet Corporation: Will Its Innovative Edge In The Insulin Pump Market Last? – Major Drivers
- Duolingo Inc.: Investment in English Learning Content and Use of Generative AI! – Major Drivers
- Hyatt Hotels Corporation: Favorable China Dynamics
Formosa Sumco Technology – Earnings, Returns, Financial Position, Worsening Dramatically
- The company recently announced poor earnings down 56% YoY in 1Q24
- Dwindling cash is another major concern especially with higher debt/ebitda
- At 15-25% ROE is sensible but now back toward 5% there is less enthusiasm
Tech Supply Chain Tracker (25-May-2024): Global EV charger market & key players
- Global EV charger market overview with key players highlighted in the industry, including a focus on technological advancements.
- Ex-IBM Chief Accessibility Officer seeks to revolutionize digital inclusion in Taiwan’s manufacturing sector through innovative strategies and initiatives.
- Updates on notebook shipment for April 2024, global smartphone sales in the first quarter of 2024 as well as collaborations such as SDC & Lenovo teaming up to launch slidable display devices by 2025.
[PDD Holdings (PDD US,BUY,TP US$172) TP Change]:Squeezing Supplier Base for Its Own Benefit,Globally
- PDD reported C1Q24 top-line, non-GAAP EBIT, and non-GAAP net income 1.3%, 67.0%, and 80.0% vs. our estimate, and 13.9%, 82.0%, and 94.7% vs. consensus, respectively;
- Temu unit economics improvement drove the 1Q beat. Per order outlay on marketing and fulfilment declined 20-25% qoq, we estimate;
- PDD continues to effectively squeeze merchants for its benefit,while also benefiting from weak consumer sentiment in China and overseas. We maintain BUY,and raise TP to US$172, implying 12.3x CY24 PE.
Japanese Bigger-Cap Banks – Rates Story Continues, with the Prospect of Equity Holdings Disposals
- The continued “higher for longer” interest rates in the US, along with widening JGB yields adds weight to the Bank of Japan potentially raising benchmark rates further
- In this report, we expand our coverage of the bigger cap banks’ metrics to include the equity holdings of the top six market caps and the banks’ BoJ deposits
- We see further upside for Japanese bank shares, especially those geared into higher domestic rates and with the potential for equity holdings disposals; we like Resona, Mizuho, SMFG and Concordia
[Kuaishou (1024 HK, BUY, TP HK$83) Target Price Change]: Out-Performance in Off-Season Thanks to GAI
- Kuaishou reported C1Q24 revenue, IFRS OP, and IFRS Net income inline, 58%, and 78% vs. our estimates; and inline, 67% and 86% vs. consensus
- Company suggested contribution of Generative AI (GAI) to the growth of the advertising business to be substantial;
- We reiterate our BUY rating and raised target price to HK$83, implying 17x PE in 2025.
Uber Technologies: Partnership Strategy and Advancements in Autonomous Vehicles! – Major Drivers
- Uber has kicked off 2024 with positive growth, reporting a 21% year-on-year increase in rides, which equates to its gross bookings growth rate. Their user base expanded by 15%, underpinned by 7.1 million drivers and couriers operating on the platform. The firm’s record adjusted EBITDA of $1.4 billion and the generation of $4.2 billion in free cash flow over the last year reflect a significant financial upswing. However, the world of automobiles is shifting towards autonomous vehicles (AVs), posing both challenges and opportunities for Uber. The firm needs to strategize to withstand expected competition from entities like Tesla. CEO Dara Khosrowshahi maintains that breakthroughs in AV technology will eventually prove profitable for Uber, as they promise safer rides and broader accessibility. However, the transition period from human-driven to autonomous vehicles will demand a balanced approach, exploiting both to keep the business steady. Baptista Research looks to evaluate the different factors that could influence the company’s price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology. In this report, we have carried out a fundamental analysis of the historical financial statements of the company. We have added reasonable forecasts of the annualized income statement and cash flows and carried out a DCF valuation of the company using its Weighted Average Cost of Capital (WACC) to determine a forecasted share price. We have further incorporated a sensitivity analysis/ scenario analysis to understand how changes in key assumptions could impact the valuation under 3 scenarios – a base case, a bull case, and a bear case. These additional layers of analysis serve to provide a comprehensive and robust valuation, giving investors a nuanced understanding of the inherent risks and opportunities.
Exact Sciences Corporation: Leveraging Health Systems and Electronic Ordering Channels To Catalyze Growth! – Major Drivers
- Exact Sciences Corporation’s first quarter 2024 earnings. The quarter demonstrated robust performance with first quarter revenue growing by 6% to $638 million. Particularly noteworthy was the 7% increase in screening revenue to $475 million, which is attributed to the company’s successful optimization of billing and patient compliance systems. However, Exact Sciences faces a tough comparison base, as its growth in the previous year was buoyed by enhancements to billing and patient compliance systems and a weak flu season. The expansion of Precision Oncology revenue by 5% to $163 million also contributed to the company’s growth. Baptista Research looks to evaluate the different factors that could influence the company’s price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology. In this report, we have carried out a fundamental analysis of the historical financial statements of the company. We have added reasonable forecasts of the annualized income statement and cash flows and carried out a DCF valuation of the company using its Weighted Average Cost of Capital (WACC) to determine a forecasted share price. We have further incorporated a sensitivity analysis/ scenario analysis to understand how changes in key assumptions could impact the valuation under 3 scenarios – a base case, a bull case, and a bear case. These additional layers of analysis serve to provide a comprehensive and robust valuation, giving investors a nuanced understanding of the inherent risks and opportunities.
Insulet Corporation: Will Its Innovative Edge In The Insulin Pump Market Last? – Major Drivers
- Insulet Corporation reported an excellent first quarter of 2024 that has exceeded expectations. The demand for Omnipod 5 continues to rise, the leading insulin delivery system, fueling a robust revenue growth. Performance-wise, the company achieved an overall Omnipod revenue growth of 21%, including a US growth of 23% and an international growth of 15%.
- The Omnipod 5 has brought significant success to Insulet in both the US and international markets, thanks to its simplicity and affordability. This offering has assisted in driving market growth, as demonstrated by the fact that during the quarter, approximately 85% of new starts came from people previously utilizing multiple daily injections. This pattern of new starts is encouraging because these new starters originated from Insulet’s target market. Baptista Research looks to evaluate the different factors that could influence the company’s price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology. In this report, we have carried out a fundamental analysis of the historical financial statements of the company. We have added reasonable forecasts of the annualized income statement and cash flows and carried out a DCF valuation of the company using its Weighted Average Cost of Capital (WACC) to determine a forecasted share price. We have further incorporated a sensitivity analysis/ scenario analysis to understand how changes in key assumptions could impact the valuation under 3 scenarios – a base case, a bull case, and a bear case. These additional layers of analysis serve to provide a comprehensive and robust valuation, giving investors a nuanced understanding of the inherent risks and opportunities.
Duolingo Inc.: Investment in English Learning Content and Use of Generative AI! – Major Drivers
- Duolingo Inc. recently released its Q1 2024 shareholder letter, announcing positive financial results while outlining future initiatives. The company achieved revenue and bookings growth of 45% and 41% respectively and saw active daily users grow by 54% YoY, signaling the effectiveness of their product-driven flywheel. The strategy of offering efficient language tutoring, driving user growth, and converting users to subscribers has proven to be beneficial for the platform. Duolingo also announced record profitability for the quarter. Baptista Research looks to evaluate the different factors that could influence the company’s price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology. In this report, we have carried out a fundamental analysis of the historical financial statements of the company. We have added reasonable forecasts of the annualized income statement and cash flows and carried out a DCF valuation of the company using its Weighted Average Cost of Capital (WACC) to determine a forecasted share price. We have further incorporated a sensitivity analysis/ scenario analysis to understand how changes in key assumptions could impact the valuation under 3 scenarios – a base case, a bull case, and a bear case. These additional layers of analysis serve to provide a comprehensive and robust valuation, giving investors a nuanced understanding of the inherent risks and opportunities.
Hyatt Hotels Corporation: Favorable China Dynamics
- Hyatt revealed in its Q1 Earnings that the year has started vigourously for them, displaying growth in multiple dimensions and expanding fees. The occupancy and RevPAR trends they have been observing are strong, driven by noteworthy demands across all customer segments. An increase of 5.5% in system-wide RevPAR was seen in Q1 on the back of robust leisure travel trends. While there is expectation of a subdued year-over-year growth rate, the rates are noticeably above pre pandemic levels. They also observed healthy business transient revenue indicating resumption in business travel. Furthermore, Hyatt’s loyalty program saw a growth of 22% over the past year, reaching a total of approximately 46 million members. Baptista Research looks to evaluate the different factors that could influence the company’s price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology. In this report, we have carried out a fundamental analysis of the historical financial statements of the company. We have added reasonable forecasts of the annualized income statement and cash flows and carried out a DCF valuation of the company using its Weighted Average Cost of Capital (WACC) to determine a forecasted share price. We have further incorporated a sensitivity analysis/ scenario analysis to understand how changes in key assumptions could impact the valuation under 3 scenarios – a base case, a bull case, and a bear case. These additional layers of analysis serve to provide a comprehensive and robust valuation, giving investors a nuanced understanding of the inherent risks and opportunities.
💡 Before it’s here, it’s on Smartkarma
Sign Up for Free
The Smartkarma Preview Pass is your entry to the Independent Investment Research Network
- ✓ Unlimited Research Summaries
- ✓ Personalised Alerts
- ✓ Custom Watchlists
- ✓ Company Data and News
- ✓ Events & Webinars
