In today’s briefing:
- Alibaba Group: Looking Through the Noise
- Tobila Systems: The Monopoly that You Probably Never Heard Of (Even as Its Customer)
- Platinum (PLAT): The Shoppers Coming Back
- Matahari Department Store (LPPF IJ) – All Eyes to the Podium
- Bloomberry Resorts: Recovery Cycle Has Arrived for This Manila-Based Casino Hotel
- ENN Energy (2688 HK): Mediocre FY21, Management Update Not Exciting
- Gitlab 4Q22 Earnings: Impressive
- Microport Scientific (853.HK) – The Subsidiaries Would Be a Better Investment
- BigCommerce: Stock Selloff Looks Finished As Valuation Hit $1.5 Billion
Alibaba Group: Looking Through the Noise
- The major trend, witnessed over the past two years, has been the continued loss of relative market share by Alibaba, and the continued market share gains by JD.com.
- Alibaba has been able to steadily grow its active user base, on its Chinese retail platforms, by above 10%y/y since at least 2019, off an extremely high base.
- Short-Term growth expectations seem relatively conservative, with limited risk for a further negative surprise.
Tobila Systems: The Monopoly that You Probably Never Heard Of (Even as Its Customer)
- With less than 60 employees, Tobila Systems is the absolute dominator in the space that can make a significant impact on Japan’s society;
- The valuation starts to look attractive while the fundamentals remain sound;
- Partly benefiting from being the first entrant to this niche with a robust flywheel business model, the company now “monopolizes” both the supply side and the distribution side.
Platinum (PLAT): The Shoppers Coming Back
- The Thai government plans to scrap pre-travel COVID-19 to boost tourism, and visitors will only be tested on arrival in Thailand – expect to have more tourists in Thailand.
- Q4 2021 revenue started to bounce higher YoY although still 50% of pre-COVID level but shows some promise.
- Platinum Group PCL (PLAT TB) share price went up by 24%within a year, with a 0.7x PBR to 1.02x PBR. Still early but why wait longer?
Matahari Department Store (LPPF IJ) – All Eyes to the Podium
- Matahari Department Store’s results marked a turning point in terms of profitability, and this year will see the company back in expansion mode, with a new strategy in place.
- Management is pushing hard to entrench its position in existing categories as well as pushing into new ones, with an omnichannel approach and new partnerships in place.
- Matahari Department Store has the potential for a re-rating as it regains its place on the winning podium amongst Indonesian retailers in very reasonable valuations.
Bloomberry Resorts: Recovery Cycle Has Arrived for This Manila-Based Casino Hotel
- We have been bullish on the broad Philippine gaming market because it has moved ahead dealing with covid. It is Asia’s second most robust gaming market.
- The company’s Solaire resort at Manila’s Entertainment Zone just reported increases in mass revenue sector indicating that recovery is well underway.
- 4Q21 and total 2021 results do not include South Korea property due to lockdowns. But once reopened, it will be accretive to forward earnings.
ENN Energy (2688 HK): Mediocre FY21, Management Update Not Exciting
- Core earnings growth of 14.6% YoY at ENN Energy (2688 HK) is not very exciting. Gas sales gross profit was down 5% while integrated energy looks better with 51.2% growth.
- Management guidance of 12-15% growth in FY22 seems to be optimistic, especially in a period of time where high input cost is likely to eat into margin still.
- Valuations are not too stretched, yet not very appealing. Its net debt position also does not compare well with CR Gas (1193 HK) and Kunlun Energy (135 HK).
Gitlab 4Q22 Earnings: Impressive
- Revenue grew 69% YoY to $78M vs. consensus at $70M (+52%), with very impressive underlying growth metrics that show the larger customers are the fastest growing.
- Increased selling through hyperscaler partners may aid S&M leverage over time.
- Acquisition of Opstrace accelerates the platform expansion into observability, but right now positioned vs. nonconsumption rather than against Datadog.
Microport Scientific (853.HK) – The Subsidiaries Would Be a Better Investment
- MicroPort’s net loss widened according to its profit warning. The negative impact of centralized procurement is already being shown. We analyzed the situation of its different business segments.
- After continuous M&A, Microport Scientific (853 HK) could face cash flow pressure in this unfriendly financing environment.
- Due to MicroPort’s development mode, the market value of its subsidiaries could be higher than the parent company. Our view is that the subsidiaries would be a better investment.
BigCommerce: Stock Selloff Looks Finished As Valuation Hit $1.5 Billion
- Shares of BigCommerce Holdings (BIGC US) slipped below the IPO price of $24.00 per share, and at current valuation, we see limited downside risk for BigCommerce stock investors.
- In 2020, Intuit Inc (INTU US) offered to acquire BigCommerce for $1.5 billion, according to CNBC and other public sources. Both BigCommerce and Intuit didn’t provide a comment.
- Insider selling activity has slowed down noticeably over the past three months and BigCommerce Holdings (BIGC US) insiders sold ~$5 million worth of shares.
Related tickers: Matahari Department Store (LPPF.JK), ENN Energy (2688.HK), Microport Scientific (0853.HK)
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