In today’s briefing:
- Long Short Idea: Ecopro Co Ltd & Iljin Materials on March 9 with K-New Deal Rebalancing
- NDX Short to Bleed into Asia
- MYEG: Still Misunderstood, an Opportunity to Own
- Freee: Widened Losses No Major Concern as Freee Advances Towards Medium/Long Term Growth Strategy
- Viavi Solutions: Major Drivers
- monday.com Stock Is Receiving Serious Traction After Its Q4 Earnings Beat
- Peloton Inc.: Major Drivers
- DXC Technology: Key Drivers
- Meta Platforms Inc.: Key Drivers
- Qorvo Inc: Key Drivers, Financial Forecasts, DCF & Comparables Valuation, ESG & Other Risks (02/23)
Long Short Idea: Ecopro Co Ltd & Iljin Materials on March 9 with K-New Deal Rebalancing
- One constituent change is expected in the BATTERY index rebalancing as Ecopro Co Ltd surpassed Iljin Materials based on the average daily market cap during the review period.
- Ecopro Co Ltd is a pure holding company, so it may not be subject to inclusion. However, KRX recognizes related sales from unlisted subsidiaries as sales from the holding company.
- The actual passive impact of the rebalancing day will likely be 0.15x or more for both. This level can enable a long-short setup for these from a day trading perspective.
NDX Short to Bleed into Asia
- NDX continues to hug lower range support after meeting the 13k short level. 12,050 is the level to break to ratchet lower to 11,800. Ultimately, new lows attract.
- Use an uptick to add to this short and linked assets. USD strength, higher yields will weigh on tech going forward.
- A rotational shift is due that favors a more defensive stance.
MYEG: Still Misunderstood, an Opportunity to Own
- Due to the recent news by the Malaysian government that aims to in-house the e-government service, My E.G. Services (MYEG MK) share price fell, similar to the 2018 event.
- Revenue from the Philippines business went up 5x and contributed up to USD 91 million, or around 52% of FY 2021 total revenue.
- It gives a great opportunity for investors who believe in MYEG’s story to start building position.
Freee: Widened Losses No Major Concern as Freee Advances Towards Medium/Long Term Growth Strategy
- freee (4478 JP) reported 2QFY06/2023 results today. Revenue increased 35.3% YoY to JPY4,479m (vs consensus JPY4,469.5m) while operating losses for the quarter widened to JPY1,281m (vs consensus JPY1,574.5m).
- Both ARPU and no. of paying customers continue to increase and the company’s strategy of onboarding large corporates seems to pay off.
- Widening operating loss is no major concern as it is a matter of time before freee cuts down advertising and other costs given the expanding revenue base and excessive GPM.
Viavi Solutions: Major Drivers
- Viavi’s result for the second quarter of 2023 performed better than Wall Street expectations as the company delivered an all-around beat, driven by NSE performance aided by stabilization in service provider demand and spending.
- The company’s OSP business increased year over year and performed within the forecast.
- NSE decreased sequentially and year over year due to weaker fiber and wireless lab product demand.
monday.com Stock Is Receiving Serious Traction After Its Q4 Earnings Beat
- Monday.com Ltd.’s Q4 earnings report could be the catalyst investors have been waiting for.
- The company’s sustained hyper-growth trajectory is assisted by the successful integration of CRM tools and a synergetic marketplace.
- monday.com Ltd. (NASDAQ:MNDY) released its Q4 earnings report on Monday morning. The company’s quarterly results beat analysts’ estimates comprehensively, which caused MNDY stock to surge.
Peloton Inc.: Major Drivers
- Peloton delivered a mixed performance in the quarter as its revenues were well above Wall Street expectations but the company’s losses were wider than expected.
- Peloton’s reserves, related to the stock from their Tonic production facilities, decreased their Connected Fitness gross margin by around $32 million for the quarter.
- FaaS has doubled and expanded quickly in the quarter though it does face significant competitive threats from players like Tonal.
DXC Technology: Key Drivers
- DXC achieved a decent set of results with strong bookings resulting in $3.57 billion in revenues meeting Wall Street expectations.
- Their organic revenue increased for the second consecutive quarter and the company delivered an earnings beat.
- DXC continues to increase margins and stabilize revenue in GIS.
Meta Platforms Inc.: Key Drivers
- Meta Platforms performed a mixed result with earnings below expectations, ending a rather difficult fiscal year.
- The management claims that number of daily users of Facebook, Instagram, and WhatsApp is at an all-time high.
- Facebook’s engagement is decent, and it is expanding globally, with over 2 billion daily and approximately 3 billion monthly active users.
Qorvo Inc: Key Drivers, Financial Forecasts, DCF & Comparables Valuation, ESG & Other Risks (02/23)
- Qorvo delivered a strong set of results and managed an all-around beat.
- Its power business in particular, reported a successful quarter with active design work for its silicon carbide power products.
- For WiFi products in their Connectivity and Sensors Group, the third quarter showed decreased end-market demand and channel inventory consumption.
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