In today’s briefing:
- Palantir 4Q21 Earnings: Declining Bookings, Shrinking Margins, Eccentric CEO
- BCPG: Gain from Indonesia Asset Divestment
- HKEx (388.HK): Latest COVID Outbreak Weighted Trading Activities
- Huize: Getting More Difficult to Justify an Investment
- Sky Perfect JSAT (Buy) – Follow up After Q3 21 Results
- ADVANC: 5G and Enterprise Segment Will Drive Strong Growth in 2022
- IRDM: Constellation of Free Cash Flow
Palantir 4Q21 Earnings: Declining Bookings, Shrinking Margins, Eccentric CEO
- Palantir’s ongoing SPAC investment strategy is driving an increasing bifurcation between reported and underlying results… which continues to be ignored by sell side and retail investors.
- Revenue growth missed ex-SPAC, while Billings Growth collapsed 31% YoY ex-SPAC investments…unheard of for a software company.
- Margin guidance for 1Q22 well below consensus as sales headcount continues to ramp. Stay short.
BCPG: Gain from Indonesia Asset Divestment
- BCPG’s 4Q21 net profit fall to Bt238m (-24% YoY, -65% QoQ),a 16-quarter low, mainly dragged by FX loss. The recurring profit stood at Bt583m (+9% YoY,-18% QoQ),inline with our expectation
- The revenue recognition from new 20MW project in Japan (4Q21) resulted the YoY growth. While QoQ drop was due to seasonal weak hydro operation.
- The company announced divestment of its full stake (33%) in Indonesia geothermal power project. BCPG will book a gain of B1.6bn from the deal
HKEx (388.HK): Latest COVID Outbreak Weighted Trading Activities
- The sluggish share performance of HKEX (388 HK) underscored the weak trading activities at Hong Kong, its January average daily turnover (ADT) is down 47% year-over-year.
- Hong Kong’s surging COVID cases have already accounted for more confirmed infections than all previous outbreak combined, we believe this will also dampen market sentiment short-term.
- However, we remain bullish on HKEX (388 HK) with the view that China economy will likely rebound in 2022, which will drive the rebound of IPO activities and trading volume.
Huize: Getting More Difficult to Justify an Investment
- Huize’s further acceleration of the “online to offline integration strategy” likely pushes it to compete more directly against China’s insurance giants (e.g., Ping An).
- One key challenge smaller Chinese insurtech players face (when it comes to attracting investors) is that some of the country’s insurance giants are relatively well digitized.
- Ping An still represents a good way to gain exposure to China’s broader insurance/insurtech space, especially given its current low valuation.
Sky Perfect JSAT (Buy) – Follow up After Q3 21 Results
- Space segment revenue is growing despite Covid-19 headwinds for in-flight Wi-Fi and should continue into the next few years as new capacity is unlocked
- Investment in the media segment is likely to step up in Q4 on prootional spending for new Japan professional baseball and the Spoox streaming service
- The outlook is improving heading into 2022 as the company will lap accounting changes that made headline revenue look weaker. We’ve updated our forecasts and remain at Buy
ADVANC: 5G and Enterprise Segment Will Drive Strong Growth in 2022
- Upgrade to BUY rating with new TP of Bt269 (up 19% from previous TP), based on DCF, implying 24.1xPE’22. Analyst meeting came out with positive tone about new strategic direction
- Expect Enterprise revenue to contribute 20% of total revenue by 2025. Management believes this segment will reach 20% of total revenue by 2024.We believe differently as we expect further competition
- Revised 22E and 23E net profit upwards by 4% and 13%, respectively, to factor in high revenue growth. While 2022 will demonstrate healthy net profit growth, we believe enterprise segment
IRDM: Constellation of Free Cash Flow
- IRDM grew the number of billable subscribers using its Certus satellite service in the fourth quarter
- Q4 is seasonally a slow period for commercial voice and data, but that did not stop IRDM from growing the number of subscribers by 6 percent from the year prior
- IRDM issued 2022 service revenue guidance of growth between 5 percent and 7 percent. This growth is higher than we were modeling
Related tickers: BCPG PCL (BCPG.BK), HKEX (0388.HK), Huize Holding Limited (HUIZ.OQ), Sky Perfect Jsat (9412.T), Advanced Info Service (ADVANC.BK), Iridium Communications (IRDM.O)
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