In today’s briefing:
- India Channel Insight #41 | Haier, Samsung, Voltas
- Nexteer (1316): Unjustly Punished and Bounce Soon?
- Sri Trang Gloves (STGT TB): 2022 Started On a Weak Note; Lower ASP Is Industry Wide Phenomena
- Shift 3Q: Earnings Below Consensus but Heavy Hiring Spend Should Help in the Long Run
- Z Holdings (Neutral) – PayPay Rebranding of ECommerce; We Remain Cautious in a Rebuilding Year
India Channel Insight #41 | Haier, Samsung, Voltas
- The demand environment for offline electronic retailers has been good in Q1, the macro factors also point to good growth for FY23.
- Companies like Haier Smart Home Co Ltd (6690 HK) and Samsung Electronics (005930 KS) have done well. Voltas Ltd (VOLT IN) has not been able to recover.
- Indian consumer no longer wants everything cheap, assuming affordability, quality and brand value is taking prominence.
Nexteer (1316): Unjustly Punished and Bounce Soon?
- Nexteer Automotive (1316 HK) share price fell 50% in Q1 22 due to the China lockdown scare although it has manufacturing facilities all over the world.
- It traded below book value at some point and rallied alongside other Chinese names in the past month to currently at book value.
- Most of the new business won is from EV OEMs thus the company deserves a higher multiple given the high growth in the EV sector.
Sri Trang Gloves (STGT TB): 2022 Started On a Weak Note; Lower ASP Is Industry Wide Phenomena
- Sri Trang Gloves (Thailand) Public Company Limited (STGT TB) reported record high sales volume due to strong demand in existing markets and expansion into new markets.
- However, lower ASP as a result of additional supply in the market, dragged down revenue and profitability of the company. No recovery in ASP is seen in near-term.
- By leveraging on its locational advantage for NR glove, focusing on fast growing developing markets, and launching high-margin surgical glove in Thailand, STGT is well-positioned to outpace its Malaysian peers.
Shift 3Q: Earnings Below Consensus but Heavy Hiring Spend Should Help in the Long Run
- Shift reported 3QFY08/2022 results yesterday. Revenue grew 36.1% YoY to JPY17.1bn (vs consensus JPY18.3bn) while OP grew 25.7% to JPY1.3bn (vs consensus JPY1.54bn).
- Revenue from the largest segment Enterprise market grew 35.3% while enterprise segment grew 47.5% YoY during the quarter.
- According to Shift, the application of revenue recognition standard has lowered revenues and OP. The drop in OPM was due to heavy SG&A expenses as a result of hiring.
Z Holdings (Neutral) – PayPay Rebranding of ECommerce; We Remain Cautious in a Rebuilding Year
- Z Holdings will integrate its eCommerce platforms in a move that boosts the PayPay brand and may generate some (very) modest synergies
- We are publishing updated forecasts and setting a new target price at ¥550 but we remain cautious on the shares in the near term as consensus remains high
- Shares of ZHD still appear expensive at 14-16x our estimate of FY22e EBITDA and are more expensive than Alphabet at these levels (12x EBITDA)
Related tickers: Nexteer Automotive (1316.HK), Shift Inc (3697.T), Z Holdings (4689.T)
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