In today’s briefing:
- BABA: Timing Is Ripe to Build Positions
- Positive Character Changes; MSCI ACWI Ex-US, EAFE, STOXX 50, Countless Others Reversing Downtrends
- Lasertec(6920): Tailwinds Intensify – From ASML Outlook Upgrade to Lower Inflation
- Softbank Group Q2 22 Results Reaction: Alibaba Gains Offset VF Losses but Buybacks Over
- A Fundamental Discussion of the Nature of Policy Shareholdings Will Be Required
- Qualcomm Inc: Collaboration With Renault & Other Developments
- The FTX Collapse: A Market Analysis
- eBay Inc: Acquisition of TCGplayer & Other Drivers
BABA: Timing Is Ripe to Build Positions
- Company fundamentals have been and will continue to be the single most critical driver for BABA’s share price, although strong US dollar and geopolitics may complicate the situation.
- Expect BABA’s bottomline to reverse an eight-quarter down trend in coming September quarter on the back of disciplined capex and cost cutting, despite a challenging macro environment still pressuring topline.
- Importantly, investors have yet fully appreciated the improving competitive landscape thanks to regulation and rivals’ maturing businesses. See 30% upside in 6-12 months. Ripe timing to buy.
Positive Character Changes; MSCI ACWI Ex-US, EAFE, STOXX 50, Countless Others Reversing Downtrends
- The bear market rally we have discussed since our Sept. 29 Int’l Compass has managed to surpass our price targets, which were the YTD downtrends on the ACWX-US and EFA-US.
- As you will see below, many countries are reversing topside their 6.5-month to YTD downtrends.
- As a result of these bullish reversals and breakdowns on the US dollar (DXY) and 10-year Treasury yield, we are upgrading our outlook to neutral. Buy on pullbacks.
Lasertec(6920): Tailwinds Intensify – From ASML Outlook Upgrade to Lower Inflation
- ASML pre-released their updated view on demand and capacity – ahead of Nov 11, 2022 Investor Day – BETTER THAN EXPECTED
- Inflation now past peak and semi/tech likely see sustained bid. Even better for those names that are monopolies in the EUV space = ASML and Lasertec
- Remain bullish Lasertec despite the recent rally. Better earnings and order outlook, and multiples to drive share price
Softbank Group Q2 22 Results Reaction: Alibaba Gains Offset VF Losses but Buybacks Over
- Alibaba driven gains largely offset record losses from Q1 although this has been widely expected as were updates on the timing of ARM’s IPO from FY22 (Mar23) to calendar 2023
- With Q2 losses, Vision Fund is clearly in the red for the first time since Q4 19 driven by downside for both public and private investments
- Buybacks are over and what appears to be renewed macro enthusiasm is offset by a stronger yen and a low discount to NAV
A Fundamental Discussion of the Nature of Policy Shareholdings Will Be Required
- The reduction of policy shareholdings of companies (excluding financials) for March fiscal year end companies was 2.3 trillion yen, about 600 billion yen more than in the previous fiscal year.
- It was a special year in which changes in the TSE’s criteria regarding tradable shares included in the market’s listing criteria contributed to the reduction of policy shareholdings.
- Going forward, companies will need to discuss the nature of cross-shareholdings based on capital allocation even more than they do now.
Qualcomm Inc: Collaboration With Renault & Other Developments
- Qualcomm delivered a mixed set of results as its revenues were higher than the market expectations as a result of a solid chipset business performance and good execution of its diversification and expansion plan.
- The management is working towards transforming Qualcomm from a wireless communications provider for the mobile industry to a provider of linked processors for the intelligent edge.
- In this report, we have carried out a fundamental analysis of the historical financial statements of the company.
The FTX Collapse: A Market Analysis
- First came the Terra collapse. Then the bankruptcies of the centralized lenders.
- And now the (almost certain) insolvency of FTX, one of the largest cryptocurrency exchanges in the world.
- FTX’s collapse has shaken the industry to its core, in part because it is a fundamentally different type of business than a crypto lender like Celsius.
eBay Inc: Acquisition of TCGplayer & Other Drivers
- eBay had a solid third quarter and delivered an all-around beat.
- The company also completed the tech-led re-imagination in the quarter and met its short-term commitments.
- Additionally, eBay is attempting to improve the standard and volume of the supply of components and accessories.
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