In today’s briefing:
- Grab Holdings (GRAB US) – Growth with Scale from a Stable Platform
- Meituan: Strong Earnings but Tough Times Ahead
- Pop Mart (9992 HK): Short-Term Trading Opportunity On International Expansion
- Grab: Profitability Seems Not So Easy to Sustain
- Electronic Arts Inc.: he Big Push in Mobile Gaming and Major Drivers! – Financial Forecasts
- SolarEdge Technologies Inc.: Solar-Attached EV Management Solution & Major Developments
- Global Payments Inc.: 3 Reasons Behind Consistent Growth in Merchant Solutions! – Financial Forecasts
- Devon Energy Corporation: Surging Oil Volumes
- TM: Initial Concentrate Recovery Exceeds Expectations
- BioMarin Pharmaceutical Inc.: What Are The Biggest Catalysts For Its Future Growth? – Financial Forecasts
Grab Holdings (GRAB US) – Growth with Scale from a Stable Platform
- Grab Holdings (GRAB US) released another set of positive results but this time the balance between profitability and growth was well-struck, as it reduced incentives yet increased its market share.
- Grab saw GMV growth in both deliveries more notably in mobility, with revenues growing at a faster pace and adjusted EBITDA surprising on the upside, bringing forward breakeven to 3Q2023.
- Prospects for 2H2023 look even better with Grab’s affordability initiatives gaining traction and improving retention and profitability.
Meituan: Strong Earnings but Tough Times Ahead
- Meituan (3690 HK) reported 2Q2023 results yesterday which beat consensus estimates and the company’s profitability has further strengthened during the quarter.
- However, there has been clear signs of a slowdown in the company’s core local commerce biz with increased promotions/incentive, decline in revenue per on-demand delivery transaction and fall in OPM.
- Meituan has flagged that macroeconomic headwinds and adverse weather conditions could slowdown core local commerce biz in the current quarter which should drag down earnings.
Pop Mart (9992 HK): Short-Term Trading Opportunity On International Expansion
- Pop Mart International Group L (9992 HK) presents an interesting story of a Chinese domestic brand going overseas, and potentially being successful overseas (at least in the short-term).
- A recent case of a Chinese brand achieving success overseas is Miniso (MNSO US), and shareholders of Miniso have been richly rewarded.
- Pop Mart trades at a PE of 24x based on estimated 2024 earnings, with around 30% expected net profit growth in 2024E.
Grab: Profitability Seems Not So Easy to Sustain
- Grab’s share price moved up by about 10% following its 2Q2023 earnings announcement as the market got excited over the company’s prospect of reaching profits in the next few quarters.
- Mobility GMV is nearing pre-Covid levels, however, there has been a sharp increase in incentive spending during 2Q2023 suggesting incentives is a key driver of GMV growth.
- Our analysis on deliveries biz suggests that segment’s margins have very little room for improvement and further reducing incentives could stall growth going forward.
Electronic Arts Inc.: he Big Push in Mobile Gaming and Major Drivers! – Financial Forecasts
- Electronic Arts delivered a mixed set of results in the last quarter, with revenues below the analyst consensus.
- The company achieved net bookings of $1.6 billion, up 21% yearly, due to continued growth across the EA SPORTS FIFA ecosystem and the release of Star Wars Jedi: Survivor.
- Electronic Arts executed across its business during the quarter, introducing 5 new high-quality titles and offering over 145 content upgrades across 37 titles.
SolarEdge Technologies Inc.: Solar-Attached EV Management Solution & Major Developments
- SolarEdge Technologies delivered mixed results in the quarter, with revenues failing to meet analysts’ expectations but above-par earnings.
- SolarEdge’s solar business generated $947 million in revenue, while its non-solar businesses generated $44 million.
- Their solar business revenue increased due to significant revenues in Europe.
Global Payments Inc.: 3 Reasons Behind Consistent Growth in Merchant Solutions! – Financial Forecasts
- Despite the uncertain financial situation around the world, Global Payments managed to exceed analyst expectations in terms of revenue as well as earnings.
- The company once again produced excellent organic growth in the Merchant Solutions business, driven by the continuous success of their companies that use technology.
- This quarter, they again achieved significant revenues, outpacing the impressive results of the previous quarter.
Devon Energy Corporation: Surging Oil Volumes
- Devon Energy Corporation delivered a mixed result in the quarter, with revenues above expectations, but the company failed to surpass the analyst consensus regarding earnings.
- In terms of production, the company managed to increase oil volumes by 8% year over year this past quarter.
- By averaging 323,000 barrels per day in the quarter, this outcome beat midpoint forecast estimates and created a new all-time high oil production high for the corporation.
TM: Initial Concentrate Recovery Exceeds Expectations
- Trigon announced initial production results from its first copper concentrate.
- The newly commissioned mill produced a concentrate grade of 33.5% copper (well above the 20% expected) at 79.5% recoveries.
- Underground Fleet On August 21st, TM announced its $8.9M order to purchase underground mining equipment from Epiroc.
BioMarin Pharmaceutical Inc.: What Are The Biggest Catalysts For Its Future Growth? – Financial Forecasts
- BioMarin Pharmaceutical delivered an all-around beat in the most recent quarterly result.
- In the quarter, revenues showed 13% year-over-year growth and 16% growth, excluding KUVAN.
- BioMarin is on track to meet its 2023 goals of double-digit revenue growth and considerable operating leverage with Q2 total revenues of $595 million, including $113 million in Voxzogo revenues.
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