In today’s briefing:
- AEM: Stellar 1H22; Deeply Undervalued. Fair Value Remains at 8 SGD.
- 2022 JPX Nikkei 400 Rebal Update – Going the Right Way
- Nearmap’s A$2.10 Per Share Indicative Offer from Thoma Bravo
- Sea Ltd: Reduced Consensus Is Still Optimistic
- Roblox 2Q22: 15% or 35% EBITDA Margins?
- Freee: Medium-Term Plan Seems Attainable but Profits to Delay
- Arteria Networks (Buy) – Q1 22 Results Reaction: In-Line Quarter Includes 7% Revenue Growth
- Nearmap: Thoma Bravo’s Bird’s Eye View
AEM: Stellar 1H22; Deeply Undervalued. Fair Value Remains at 8 SGD.
- AEM reported stellar 1H22 results beating street estimates as well as far outpacing their own guidance. CHIPS act in USA will benefit company in FY23.
- Stock reaction (+6%) muted despite great outlook and management optimism. Despite record results and strong outlook, stock is down YTD.
- AEM is cheap trading at only +/-10x FY22 EPS, too low given the growth and consistent margins profile. Fair Value remains 8 SGD.
2022 JPX Nikkei 400 Rebal Update – Going the Right Way
- As designed, the JPX-Nikkei400 Index is something of a disaster. It aims to be slightly ‘smart’ vs other cap-weighted indices like TOPIX, but tracking error vs TOPIX is de minimus.
- This year, in week 1, the ADD vs DELETE performance is positive. If we sector-hedge the ADDs vs DELETEs, it’s doing even better.
- This is probably due to relatively low pre-positioning, and cares. Momentum suggests one could be long ADDs vs DELETEs. And there is the perennial trade to watch out for.
Nearmap’s A$2.10 Per Share Indicative Offer from Thoma Bravo
- Nearmap Ltd (NEA AU) disclosed a non-binding indicative offer of A$2.10 per share from Thoma Bravo. The offer price represents a 39.1% premium to the last trading day price.
- Thoma Bravo has secured a 7-day exclusivity to firm up an offer. Thoma Bravo is a credible bidder and agreed to acquire Ping Identity Holding Corp (PING US) last week.
- Nearmap also revealed other non-binding expressions of interest. The exclusivity could flush out other bids. We think that offer is reasonable. At the last close, the gross spread is 11.4%.
Sea Ltd: Reduced Consensus Is Still Optimistic
- Consensus has revised down Sea Ltd (SE US)’s inflated estimates before 2Q22 earnings due on 16th August 2022.
- These revised estimates are on the optimistic side as consensus still thinks that 1Q22 was just a one-off drop.
- However, our analysis of Google Play and App Store data suggests that Sea Ltd’s gaming and e-commerce popularity has further deteriorated from the 1Q22 level.
Roblox 2Q22: 15% or 35% EBITDA Margins?
- Roblox initially fell 17% on earnings, but ended the week up 8%… why? Third party data is driving stock price action.
- Reacceleration of DAUs, engagement, and bookings is beginning to play out…bullish ST.
- LT EBITDA margins are anyone’s guess right now, which makes the coming 9/9 Analyst Day an important catalyst to frame up the size and margin impact of TAM extensions.
Freee: Medium-Term Plan Seems Attainable but Profits to Delay
- Freee reported 4Q and full-year FY06/2022 results. 4Q revenue increased 31.2% YoY to JPY3.87bn (vs consensus JPY3.9bn) while full-year revenue grew 40.2% YoY to JPY14.4bn beating own guidance by 0.2%.
- Operating losses decreased to 18.7% of total revenue from 32.5% of revenue in the same period a year ago. Full-year OP. losses were 15.7% of revenue vs guidance 17.1%.
- Improvement in profitability was driven by growth in ARPU from mid-and-large paying users.
Arteria Networks (Buy) – Q1 22 Results Reaction: In-Line Quarter Includes 7% Revenue Growth
- ARTERIA Networks Corp (4423 JP) posted Q1 22 results in line with expectations
- 7% revenue growth was the highest in five quarters whilst core segment growth was the best since 2019, supported by work from home demand and data volume growth
- Operating income is down YoY as it laps one-time gains a year ago – this has been well-flagged by management and consensus
Nearmap: Thoma Bravo’s Bird’s Eye View
- Mapping technology outfit Nearmap Ltd (NEA AU) has fielded a non-binding indicative offer from San Francisco-based PE firm Thoma Bravo.
- Thoma Bravo is offering A$2.10/share, a 39% premium to last close, and an 83% premium to when Nearmap was first approached in early July.
- Due diligence is at an advanced stage. Curiously, Nearmap has agreed to pay Thoma Bravo up to US$3mn if a transaction agreement does not result.
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