In today’s briefing:
- Hitachi Results, Special Gain on Asset Sale, and Semi-Bigly Buyback
- Amazon 1Q22: (Some) Cost Inflation Is Transitory, The Moat Is Not
- Nasdaq 100 Breaks Down
- Merger Arb Mondays (2 May) – Dongzheng AFC, Yashili, VNET, Sezzle, Link, Ramsay
Hitachi Results, Special Gain on Asset Sale, and Semi-Bigly Buyback
- Hitachi Ltd (6501 JP) results were salutary but noisy and the year to March 2023 is forecast similar (salutary but noisy). Service integration and growth to external customers is key.
- Forecast growth in main businesses ex- to-be-sold listed subs is decent, but could be better.
- A SEMI-Bigly buyback will help cushion any selling, but it has recently outrun Siemens on a like-for-like basis.
Amazon 1Q22: (Some) Cost Inflation Is Transitory, The Moat Is Not
- Promised operating leverage is pushed out until likely 3Q22, but only higher employee RSUs is a permanent inflationary impact.
- Overcapacity is almost certainly transitory, as long as the retail business grows, this will be soaked up in a quarter or two.
- AWS backlog is booming again. Amazon’s current valuation = 12x forward AWS sales.
Nasdaq 100 Breaks Down
- The weekly & monthly close on NDX gives a notable sell signal
- Losses over the medium term towards 11k are expected to be seen
- The Stocks/Bonds ratio also indicates a turn in trend in favour of Bonds here
Merger Arb Mondays (2 May) – Dongzheng AFC, Yashili, VNET, Sezzle, Link, Ramsay
- We summarise the latest spreads and newsflow of merger arb situations covered by us across Hong Kong, Australia, New Zealand, Singapore and the US (Chinese ADRs only).
- This week, the highest gross spreads are Dongzheng Automotive Finance (2718 HK), Yashili International Holdings (1230 HK), 21Vianet Group (VNET US), Sezzle Inc (SZL AU), Link Administration Holdings (LNK AU).
- The lowest gross spreads are Beijing Enterprises Urban Resources (3718 HK), Virtus Health (VRT AU), 51 Job Inc Adr (JOBS US), China Logistics Property Holdings (1589 HK), Uniti Group.
Before it’s here, it’s on Smartkarma
