In today’s briefing:
- India Channel Insight #39 | Maruti, Hyundai
- Lasertec (6920) | A Monopoly with a Long Runway
- Air China (753 HK): Positioned to Ride on the Coming Upturn
- Breaking Growth Short Candidates: Repligen, Snap, Dynatrace, Intuitive Surgical
India Channel Insight #39 | Maruti, Hyundai
- Maruti Suzuki India (MSIL IN) ‘s dealers are optimistic, expecting easing supply, new launches and the Maruti brand promise to drive back some of the lost market share.
- Kia Motors Corp (000270 KS) is gaining when it comes to fighting with its big brother Hyundai Motor Co (005380 KS).
- There is a set of customers that now prefers Indian brands giving a good tailwind for Tata Motors Ltd (TTMT IN) & Mahindra & Mahindra (MM IN).
Lasertec (6920) | A Monopoly with a Long Runway
- After a 50% fall in the share price, Lasertec looks cheap on an historical basis and trades at a discount to ASML
- The secular growth outlook for its extreme ultraviolet (EUV) inspection systems is brighter than ever
- Lasertec should be a core holding for Japan growth funds on expectations for continued earnings growth and high returns on equity
Air China (753 HK): Positioned to Ride on the Coming Upturn
- Sequential passenger traffic improvement makes us believe that the worst was over for Air China (753 HK). We expect it continues the YTD outperformance vs. Air China Ltd (753 HK).
- With the pandemic under control and government’s focus on the economy, the release of pent-up demand will be a major driver. We have also seen relaxation in pandemic control measures.
- Increase in flight destinations and loosening of travel restrictions and quarantine requirements in Hong Kong should benefit Cathay Pacific Airways (293 HK) which now anticipates lower losses YoY in 1H22.
Breaking Growth Short Candidates: Repligen, Snap, Dynatrace, Intuitive Surgical
- This model looks for slowing growth, margin declines, sales and/or earnings disappointments, troubling working capital trends, poor estimate trends or lowered guidance, among other characteristics.
- The key judgement is whether a slowdown is temporary or the beginning of a trend. These shorts tend to have high valuations and betas. Multiple compression accelerates the stock’s decline.
- Today we are flagging Repligen, Snap, Dynatrace Inc, Intuitive Surgical
Related tickers: Maruti Suzuki India (MRTI.NS), Lasertec Corp (6920.T), Air China Ltd (H) (0753.HK), Repligen Corp (RGEN.O)
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