In today’s briefing:
- Bilibili (9626 HK): 1Q22, User Bases Growing by 30%, Price Down to 1/4, Buy
- Tesla Slips From #1 to #3 in Korea
- Spotify Analyst Day: We’re Going to Be Huge and Profitable in 10 Years
- Saratoga Investama Sedaya (SRTG IJ): A Track Record to Narrow the NAV Discount
- Haier Smart Home (6690 HK): Still Looking for a Decent Year
- Ryohin Keikaku (7453 JP) | No Time to Bargain Hunt
- Endo International (ENDP US): Still in Troubled Waters; No Near-Term Growth Driver Is Seen
- PRM : Earnings Growth Remain Dull
- PTG : Improving Sales & Marketing Margin
- KTB: Limited Upside Gain Potential
Bilibili (9626 HK): 1Q22, User Bases Growing by 30%, Price Down to 1/4, Buy
- Monthly paying users grew by 33% YoY and monthly active users grew by 31% in 1Q22.
- We believe operating loss is not a concern for a fast-growing company.
- BILI’s stock price has plunged to about HK$200 from about HK$800 in one year.
Tesla Slips From #1 to #3 in Korea
- Hyundai’s IONIQ 5 surpassed Tesla’s Model 3 within a year of its launch. Hyundai’s IONIQ 5 was the best selling EV in Korea in January to May 2022.
- Tesla EV sales in the first five months in Korea slipped to number three from its number one position in the same period last year.
- Hyundai Motor is expected to introduce IONIQ 6 later this year. However, Elon Musk mentioned that Tesla will not launch any new models until 2023 at the earliest
Spotify Analyst Day: We’re Going to Be Huge and Profitable in 10 Years
- Spotify disclosed podcasting is a €200M business with -57% gross margins currently, but will go breakeven in 1-2 years, and become GM accretive in 3-5 years.
- Spotify put forth outlandish LT targets: 1B MAUs (vs. 422M today), €100B in revenues (vs. $10B today), of which € 10B will be advertising revenue (vs. € 1.2B today).
- To hit these targets requires believing in fanciful TAM forecasts, market share, and margins.
Saratoga Investama Sedaya (SRTG IJ): A Track Record to Narrow the NAV Discount
- Saratoga Investama Sedaya (SRTG IJ) is an active Indonesian investment firm with an exceptional track record of profitable investments across sectors.
- The current NAV discount of 34% should continue to narrow as SRTG continues to burnish its ESG credentials and deliver significant realization of divestment gains.
- Our SOTP valuation assumes a 25% NAV discount implying a 14% upside to the last close price. We are buyers.
Haier Smart Home (6690 HK): Still Looking for a Decent Year
- Haier Smart Home Co Ltd (6690 HK) sees mid-to-high single digit revenue growth for 5M22; and with many cities out of lockdown now, the re-acceleration trend is gathering pace.
- China market experienced lesser cost pressure than overseas, with its gross margin expanded on a YoY basis. Cost containment measures should help to preserve flat YoY overseas margin.
- Reliance on property market has reduced, with growth mainly comes from upgrade demand. Its high-end brand Casarte stays as a growth engine with 5M22 revenue recording double-digit increase.
Ryohin Keikaku (7453 JP) | No Time to Bargain Hunt
- Muji’s historically low valuations are no reason to get excited. We think normalisation is still several quarters out
- China growth was the key valuation driver, but Muji faces continued headwinds from sporadic lockdowns and weak foot traffic
- Rising costs are new problem for Muji in the domestic market. The company will remain behind the curve on price hikes, leading to weaker margins
Endo International (ENDP US): Still in Troubled Waters; No Near-Term Growth Driver Is Seen
- Endo International (ENDP US) shares are trading near their lows. However, Endo does not seem to be an attractive bottom fishing idea as opioid litigation is still the major overhang.
- Endo’s top selling drug Vasostrict is facing generic competition, which has dragged Q1 performance of the company. Q1 revenue declined 9%, while Q2 revenue is expected to decline 28%.
- Endo is banking on specialty branded drug Xiaflex and QWO, and sterile injectables for its long-term growth. However, they cannot fully offset the impact of Vasostrict revenue loss in near-term.
PRM : Earnings Growth Remain Dull
- Maintain HOLD recommendation for PRM with a target price at Bt6.30.We foresee limited room for the company’s earnings growth in the next 2-3years as a result from lack of concrete
- 2H22 expansion plan remains intact:TM’s second VLCC will go on-hire on 6th June 22 with a size of 280,000 DWT under 10 years,T/C contract with Thai Oil Group (BUY: Bt71.0)
- Overall revenue from three VLCCS and 13 unit of crew boats won’t be sufficient to offset the impact from rising global crude oil price, which trimmed down FSU demand
PTG : Improving Sales & Marketing Margin
- The 2Q-2H22 outlook looks promising, thanks to solid oil sales volume growth owing to economic recovery from COVID grip and revamping tourism activities. The improving oil marketing margin
- Recovering MM should drive 2Q22 earnings : We expect the 2Q22 earnings to improve QoQ on the back of better sales volume and marketing margin.
- The oil marketing margin should pick up to Bt1.7/liter in 2Q22(+3% QoQ)and remain at 1.7-to-1.8/Liter range in 2H22.From management guidance, the oil sales volume inched up 5% MoM and YoY
KTB: Limited Upside Gain Potential
- Downgrade to HOLD (from BUY) with a target price of Bt16.70. Our downgrade reflects limited upside gain as a rise in share price is largely priced strong 1Q22 performance
- Quarterly earnings passed the peak level in 1Q22:Like other banks, KTB’s fundamentals have improved from the economic reopening and its resilient asset quality.
- Positive sentiments from digital lottery ticket sales The Government Lottery Office (GLO) mentioned that more than 5m lottery tickets were sold through KTB’s Paotang G-wallet app.
Related tickers: Tesla Motors (TSLA.OQ), Spotify (SPOT.N), Saratoga Investama Sedaya (SRTG.JK), Ryohin Keikaku (7453.T), Endo International (ENDP.O), PTG Energy PCL (PTG.BK), Krung Thai Bank Pub (KTB.BK)
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