In today’s briefing:
- Tencent (700 HK): 4Q21, Weak Revenue and Significant “Other Gains”, 30% Downside
- Samsung Family’s Inheritance Tax Situation & Future Block Deals
- GoTo Vs Bukalapak Vs Grab Vs Sea
- Xiaomi 4Q: Good Results Despite a Challenging Environment
- Bukalapak IPO Lock-Up – Scattered Shareholding Could Put Some Pressure on the Share Price
- Tencent 4Q2021: Disappointing Earnings but Expected
Tencent (700 HK): 4Q21, Weak Revenue and Significant “Other Gains”, 30% Downside
- Tencent’s revenue growth continued to slow down to 8% YoY in 4Q21.
- The company used more extraordinary income to bolster EPS in recent years.
- We believe the stock has a downside of 28% within 2022.
Samsung Family’s Inheritance Tax Situation & Future Block Deals
- The family is done with selling stakes in Samsung Life Insurance and Samsung SDS. What remains now is the sale of a 0.33% stake in Samsung Electronics by Hong Ra-hee.
- Hong Ra-hee’s 0.33% stake in Samsung Electronics is highly likely to appear soon. The deadline is April 25th. It will likely cause an impact of 1.5x ADTV.
- Additional stake sales are likely. SDS for sure, and probably more Life. But more SamE? This remains unclear due to the substantially lower controlling stake percentage.
GoTo Vs Bukalapak Vs Grab Vs Sea
- GoTo (1379371D IJ) is the leading digital ecosystem in Southeast Asia. It has extended its book build for a $1.3 billion IPO to 24 March.
- In GoTo Gojek Tokopedia IPO: Valuation Insights, we noted that our valuation analysis suggests that the price range is aggressive and unattractive.
- In this note, we compare GoTo vs Bukalapak (BUKA IJ), Grab (GRAB US) and Sea Ltd (SE US)‘s relevant businesses across GTV, take rates and segmental margins.
Xiaomi 4Q: Good Results Despite a Challenging Environment
- Xiaomi Corp (1810 HK) reported 4Q2021 results on Tuesday. Revenue grew 21.4% YoY to RMB85.6bn (vs consensus RMB82.1bn) while reported OP declined 54.0% YoY to RMB4.5bn (vs consensus RMB4.3bn).
- Adjusted OP (excluding fair value adjustment and other gains) grew 21.4% YoY to RMB85.6bn, with an adjusted OPM of 4.0% vs 3.0% in 4Q2020.
- Xiaomi’s smartphone revenues bounced back in 4Q2021 after growing less than 1.0% YoY during the previous quarter. The company also announced a share buyback of HK$10bn.
Bukalapak IPO Lock-Up – Scattered Shareholding Could Put Some Pressure on the Share Price
- Bukalapak (Buka) raised US$1.5bn in Aug 2021 when it priced its IPO at the top end of its pricing range.
- Buka is an Indonesian e-commerce company. The company operates an online consumer-to-consumer (C2C) marketplace. It also operates Mitra Bukalapak (Mitra) which provides online-to-offline (O2O) services to MSMEs.
- The pre-IPO shareholders will be released from the lockup on 6th April 2022.
Tencent 4Q2021: Disappointing Earnings but Expected
- Tencent (700 HK) reported 4Q2021 results yesterday. Revenue grew 7.9% YoY to RMB144.2bn (vs consensus RMB146.5bn) while non-IFRS OP decreased 13% YoY to RMB33.2bn.
- This marks the slowest quarterly revenue growth for Tencent since 2004 mainly due to lower VAS revenue growth and decline in revenue from online advertising.
- Tencent’s 4Q revenues were in line with our forecast of RMB144bn while adjusted OPM of 23% was slightly below our estimates of 26%.
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