In today’s briefing:
- PayTM (One 97 Communications) Announces a BUYBACK – Overhang Vs Feelings Vs Buyback Vs Index
- Meituan Food Delivery 4Q Updates
- Alpha Generation Through Share Buybacks in Korea: December 2022
- Our IPO Calls for 2022
- Alibaba Health Information Technology (241.HK) FY23H1 – Concerns Behind the Performance Turnaround
- Baidu: Initiation of Coverage – Market Position & Key Drivers
- Peloton Interactive Inc.: Initiation of Coverage – Challenging Macro Environment & Other Factors
- Western Digital Corporation: Initiation of Coverage – Recent Collaborations & Other Drivers
- Declining Business Short Candidates: Ziff Davis, Burlington Stores, Nat’l Vision, Otis Wwld, Monro
PayTM (One 97 Communications) Announces a BUYBACK – Overhang Vs Feelings Vs Buyback Vs Index
- PayTM, which IPOed 13 months ago at Rs2150/share and now trades 75% lower “intimated” the possibility of a buyback on the 8th, and shares jumped 7.2% on the 9th.
- The Board approved the INR 8.5bn buyback at max price INR 810/share late last night. The shares fell slightly today. Now we move to a postal ballot.
- The buy-back rules crate interesting parameters and these buy-back terms provide interesting opportunities.
Meituan Food Delivery 4Q Updates
- Meituan food delivery order growth slowed down in Oct and Nov due to covid restrictions.
- Meituan Instashopping continued to grow fast in terms of its daily orders.
- TikTok food delivery service so far hasn’t posed big threats to Meituan.
Alpha Generation Through Share Buybacks in Korea: December 2022
- In this insight, we discuss the alpha generation through companies that have been buying back their shares in the Korean stock market in the past two months.
- In addition to these share buybacks, there has also been more recent news flow regarding the share purchases of Samsung Electronics by numerous senior directors.
- In the past month, some of the larger market cap companies including KT&G, Douzone Bizon, and Hyundai Elevator that have been buying back shares have been outperforming KOSPI.
Our IPO Calls for 2022
- As 2022 comes to an end, we revisit our IPO calls over the last 12-months and how these stocks have performed to assess the effectiveness of our calls.
- We made explicit buy/sell calls on 12 IPOs during this period with a hit-rate of 83.3% with Grab, GoTo, Cloud Music, SenseTime and Leapmotor IPOs making the highest returns.
- We also wrote on several other IPOs during this period, however, those IPOs have not received approval yet.
Alibaba Health Information Technology (241.HK) FY23H1 – Concerns Behind the Performance Turnaround
- Although Alibaba Health turned loss into profit in FY23H1, it was mainly benefited from the obvious effect of expenses control,which isn’t a long-term solution to achieve the goal of profit.
- Alibaba Health has a more difficult problem. The logic of relying on multiple entrances to obtain customers to drive online drug sales has failed to bring higher revenue growth.
- In other to keep sustainable growth, it’s important for Alibaba Health to further improve user conversion rate. It is also urgent to actively expand new business growth points.
Baidu: Initiation of Coverage – Market Position & Key Drivers
- This is our first report on Chinese internet behemoth, Baidu.
- The company’s operating loss and margin year over year and quarter over quarter for AI Cloud improved.
- Their new AI businesses, like AI Cloud and Intelligent Driving, are in line with China’s national ambitions and digital innovation.
Peloton Interactive Inc.: Initiation of Coverage – Challenging Macro Environment & Other Factors
- This is our first report on Peloton Interactive, one of the most popular interactive fitness platforms in the world.
- The company delivered a disappointing set of results as it failed to meet Wall Street expectations with respect to revenues as well as earnings.
- We initiate coverage on the stock of Peloton Interactive, Inc. with a ‘Hold’ rating.
Western Digital Corporation: Initiation of Coverage – Recent Collaborations & Other Drivers
- This is our first report on Western Digital Corporation, one of the largest manufacturers and distributors of data storage devices and solutions in the world.
- The HDD revenue of Western Digital during the quarter declined modestly.
- Western Digital is deep into qualifying its most recent generation of hard drives, including its 26-terabyte UltraSMR hard drives, at numerous OEM and U.S. cloud customers.
Declining Business Short Candidates: Ziff Davis, Burlington Stores, Nat’l Vision, Otis Wwld, Monro
- Sales declines, margin compression, cuts in SG&A and cuts in guidance and estimates feature in our Declining Businesses model.
- Declining business shorts tend to be lower beta, have longer time horizons, and tend to produce steadier (although slower) short returns.
- Today we are flagging: Ziff Davis, Burlington Stores, Natl Vision, Otis Wwld, Monro
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