In today’s briefing:
- 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
- 2023 High Conviction: Naver Corp – “The Genius Turtle”
- Sino-American Silicon Products: Increasing Concerns About a Global Semiconductor Downturn
- Haier Smart Home (6690 HK): Opportunity Knocks as Depressed Valuation Cannot Reflect Outlook
- Booking Holdings: Major Drivers
- Dr Lal PathLabs (DLPL IN): Q2FY23 Review- Volume Driven Sales Growth; Sequential Margin Improvement
- Clorox Inc: New Eco-Friendly Product Launches & Other Drivers
- Caterpillar Inc: EV Prototype Launches & Other Drivers
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
2023 High Conviction: Naver Corp – “The Genius Turtle”
- Naver Corp (035420 KS) (market cap of 28.9 trillion won or $20.9 billion) is our 2023 high conviction play.
- In this report, we provide a deep-dive analysis of Naver Corp and why we believe this stock has an attractive upside of 30%+ by the end of 2023.
- Having followed the company for many years, I often like to think of Naver as“The Genius Turtle.”
Sino-American Silicon Products: Increasing Concerns About a Global Semiconductor Downturn
- Our NAV analysis suggests a target price of 146.5 TWD for Sino-American Silicon Products (SAS), representing a lack of upside from current price.
- Sino-American Silicon Products’ stake in Global wafers represents 109% of SAS’s current market cap.
- Two major risk factors on SAS include concerns about a global semiconductor sector downturn combined with increasing hostile political conflict between China and Taiwan.
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.
Dr Lal PathLabs (DLPL IN): Q2FY23 Review- Volume Driven Sales Growth; Sequential Margin Improvement
- Dr Lal PathLabs Ltd (DLPL IN) reported revenue growth of 7% y/y in Q2FY23, driven by 15% y/y growth in non-COVID business, which clocked highest ever quarterly revenue.
- Although business growth was mainly driven by a double-digit patient volume growth, average realization per patient also increased 3% y/y to INR746.
- Amid rising competition, the company reported sequential improvement in bottom-line. Normalized EBITDA increased 20% compared to Q1FY23. Normalized EBITDA margin improved 310 basis points sequentially.
Clorox Inc: New Eco-Friendly Product Launches & Other Drivers
- Despite the continuing difficult and unstable global operating environment, Clorox managed an all-around beat in the last quarterly results.
- The fact remains that Clorox is already facing a number of macro challenges and future quarters may not be showing such a positive performance.
- In this report, we have carried out a fundamental analysis of the historical financial statements of the company.
Caterpillar Inc: EV Prototype Launches & Other Drivers
- Caterpillar delivered another solid quarter with an all around beat and generated strong ME&T free cash flow and a higher operating profit margin.
- To expand its offerings in the construction industry, Caterpillar is launching four prototypes of electric vehicles that are powered by lithium-ion batteries.
- We provide the stock of Caterpillar with a ‘Hold’ rating and a revision in the target price.
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