In today’s briefing:
- Sea Ltd: Free Fire Is Losing Active Players And Shopee’s Growth Momentum Is Broken
- Softbank (9984 JP) – EToro’s Funding “Down Round”
- Netflix 2Q22: Low Growth, Low FCF, Low (Management) Conviction
- PTTEP : Strong 2Q22 Performance Outlook
- Innovent Biologics Inc (1801.HK) – Innovent Is Not Optional but Necessary in Portfolio
- Faraday Future’s Proxy Fight Intensifies: $100M Financing Offer Ignored
- Nidec (6594) | The Number One EV Play in Japan
- CENTEL : Expect CENTEL to Make Profit in 2Q22
- ZoomInfo Technologies Inc.: Initiation of Coverage – ZoomInfo Labs Launch, The Chorus Upside & Other Drivers, Financial Forecasts, DCF & Comparables Valuation, ESG & Other Risks (07/22)
- Sirius XM Holdings Inc.: Initiation of Coverage – Business Strategy, Cost Advantage & Other Drivers, Financial Forecasts, DCF & Comparables Valuation, ESG & Other Risks (07/22)
Sea Ltd: Free Fire Is Losing Active Players And Shopee’s Growth Momentum Is Broken
- Consensus remains positive about Sea Ltd (SE US) with 12.3% QoQ revenue growth in Q2 and a 32.2% revenue CAGR over the next two years.
- However, with Free Fire losing active players and Shopee’s growth momentum in South East Asia broken, we expect a disappointing Q2 from Sea Ltd.
- Free Fire is on its last legs and Shopee has decided to halt its geographic expansion. Thus we think that there’s significant downside to Sea’s Q2 and medium-term consensus.
Softbank (9984 JP) – EToro’s Funding “Down Round”
- The planned eToro IPO via SPAC merger with FinTech V was terminated in early July, due delayed regulatory process as well as poor market conditions
- The now defunct SPAC deal had implied an eToro valuation in excess of USD10bn; post failed SPAC deal, its latest funding round implies a valuation range of USD5bn to USD6bn
- Softbank made its eToro investment through the Vision Fund 2 in 4Q 2020; Softbank had been counting on the SPAC deal with FinTech V as its partial eToro exit strategy
Netflix 2Q22: Low Growth, Low FCF, Low (Management) Conviction
- Netflix’s quarter was modestly better than reset bearish expectations…but not by much. 1M subscriber gains projected for 3Q below consensus 1.7M.
- Timeline for reaccelerating subscriber growth from advertising and password sharing still seems shockingly long.
- Netflix remains a top funding short for the forseeable future, we think $210 is the high end of the range, $170 the low end, but could justify $150.
PTTEP : Strong 2Q22 Performance Outlook
- We estimate PTTEP’s 2Q22 net profit to surge 170%YoY and 83%QoQ on the back of higher sales volume and average selling price.The solid performance is expected to continue in 2H22
- Bright 2Q22 earnings outlook We expect PTTEP to post 2Q22 net profit of Bt19.3bn (+170% YoY, +83% QoQ), driven by solid average selling price and sales volume.
- The average selling price (ASP) is forecasted to increase to US$56/BOE (+32% YoY, +8% QoQ) as the reference Dubai crude oil price rose to US$108/bbl (+61% YoY,+13% QoQ) and gas
Innovent Biologics Inc (1801.HK) – Innovent Is Not Optional but Necessary in Portfolio
- Innovent is expected to transform from a biotech to a biopharma. From the present point of view, the Company is a better comprehensive choice of certainty, elasticity and safety.
- With high R&D efficiency, strong sales capability, top talent teams, and mindset keeping pace with the times, investors could consider to replace Hengrui with Innovent in the portfolio.
- Innovent’s valuation anchor is HK$40 billion, below which it’s undervalued. Its market value could reach about RMB80 billion to RMB120 billion, based on sales of RMB10 billion to RMB15 billion.
Faraday Future’s Proxy Fight Intensifies: $100M Financing Offer Ignored
- The proxy fight between Faraday’s founder and its Board has heated up further, with the founder making two 13D filings to the Board in just 3 days.
- The founder wants to replace a certain Board member with a candidate of his choice and said he has third party investors willing to inject $100M+ if the Board agrees.
- The Board never replied and this shows how tight the cash crunch at Faraday has become. Q2 cash should come to only $60M, or roughly 1 month of operations.
Nidec (6594) | The Number One EV Play in Japan
- Nidec reported 1Q earnings with clear evidence that near-turn earnings have bottomed. Now the market can focus on what matters, E-Axles
- The E-Axle outlook strong than ever across demand, production, and profitability
- We are bullish on the stock at 30x forward earnings versus the 5-year average of 55x, especially as China accelerates policies to drive EV adoption
CENTEL : Expect CENTEL to Make Profit in 2Q22
- Maintain BUY recommendation for CENTEL with a target price of Bt49.0. We expect the company performance to turn a profit at Bt57m in 2Q22 from Bt44m loss in 1Q22
- Strong recovery in hospitality business. We expect hotel revenue to hit nine quarter high at Bt1.4bn thanks to impressive performance for Thai hotels as RevPar for Bangkok and Upcountry hotels
- Food revenue is expected to hit 11 quarter high at Bt2.9bn (+24%YoY+11%QoQ) as we anticipate continuing SSSG at 6.1% compared with 0% and 10% in 2Q21 and 1Q22 respectively.
ZoomInfo Technologies Inc.: Initiation of Coverage – ZoomInfo Labs Launch, The Chorus Upside & Other Drivers, Financial Forecasts, DCF & Comparables Valuation, ESG & Other Risks (07/22)
- This is our first report on go-to-market intelligence and engagement platform, ZoomInfo Technologies which is catering to sales and marketing teams across the globe.
- The expanding Revel platform of the company is a positive development and its expanding database bodes well for its enterprise customers.
- ZoomInfo has recently partnered with Sales Confidence for empowering revenue professionals through data privacy compliance and sales solutions.
Sirius XM Holdings Inc.: Initiation of Coverage – Business Strategy, Cost Advantage & Other Drivers, Financial Forecasts, DCF & Comparables Valuation, ESG & Other Risks (07/22)
- This is our first report on broadcasting giant, Sirius XM Holdings.
- The company reported strong first-quarter growth in subscription and advertising revenue, as well as strong cash flow generation.
- We initiate coverage on Sirius XM Holdings with a ‘Hold’ rating.
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