In today’s briefing:
- Navigating the Crude Oil Crack Spread
- ZEEKR IPO Preview: A Geely-Backed Fast-Growing Decacorn in China’s EV Revolution
- XPER: Scaled for Growth
- Bakkt Holdings, Inc. – 3Q23 Earnings Show Solid Execution in a Challenging Environment
- HNI Corporation – Introducing User-Friendly Model
- IMMR: Ramp in Auto Has Begun
Navigating the Crude Oil Crack Spread
- Crack spread refers to the gross processing margin of refining (“cracking”) crude oil into its by-products.
- Crack spreads are affected by seasonality, supply, and inventory levels of crude and refined products, as well as demand for each refined product.
- A low-demand outlook for refined products of crude is prevalent due to expectations of an economic slowdown.
ZEEKR IPO Preview: A Geely-Backed Fast-Growing Decacorn in China’s EV Revolution
- ZEEKR, a fast-growing premium BEV maker, filed its F-1 last week. The company is going public through an IPO and offering ADSs of a Cayman Islands holding company.
- In 2022, Geely agreed to spin off ZEEKR and list its EV maker in Asia/the U.S. The company has raised ~$1.6B and was backed by Geely and top-tier investors.
- Geely Auto will hold 50%+ of the voting power upon completing an IPO. ZEEKR’s last round was a $750M Series A in February 2023 at a $13B post-money valuation.
XPER: Scaled for Growth
- XPER reported third quarter results in line with our forecast and reaching an inflection point in revenue where the operating leverage of the business becomes visible.
- Ahead of the results, there had been worries over XPER’s exposure to consumer electronics and pay TV industries that could cripple revenue growth.
- XPER reported third quarter revenue of $130.4 million compared to our forecast of $130.9 million. Adjusted EBITDA reached $9.3 million compared to our forecast of $9.2 million
Bakkt Holdings, Inc. – 3Q23 Earnings Show Solid Execution in a Challenging Environment
- Bakkt reported a 3Q23 loss of $0.19/share on net revenue of $14.6 million, slightly below our estimates of a loss of $0.18/share loss on net revenue of $15.5 million (consensus was for a loss of $0.17/share on $16.1 million).
- The crypto environment continues to be challenging. President and CEO Gavin Michael said the quarter “clearly demonstrated our ability to execute” in a tough market.
- Michael also highlighted the company’s push and significant progress in expanding outside the US, which is in need of clarifying legislation.
HNI Corporation – Introducing User-Friendly Model
- We are publishing this note to introduce a new HNI financial model inclusive of the acquisition of Kimball International.
- We expect this new model will be more user-friendly for investors who want to see how we arrive at our estimates or tinker with the assumptions.
- Per our discipline, our model is available on request or visible through our partners.
IMMR: Ramp in Auto Has Begun
- IMMR’s third quarter results affirmed our investment thesis of the Company beginning to experience an increase in automotive revenue by the end of 2023.
- IMMR reported quarterly revenue above our forecasts citing an increase of approximately $1.9 million from automotive related customers.
- IMMR has a reputation with investors for generating revenue from smartphones and video game consoles. The inclusion of haptics within automotive was the reason we were drawn to the stock.
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