Telco/Internet specialist

Kirk Boodry

Redex Research

Equity Bottom-Up

<p style="text-align: justify;"><strong>Z Holdings posted Q2 20 results that were modestly ahead of consensus but its first pass at full-year guidance fell well short of analyst expectations. The difference is renewed investment to leverage solid H1 growth in eCommerce/fintech users. That makes sense but it is harder to justify a 57% YTD run in the shares with FY20 operating income growth of only 5%. Operationally, some moderation in merchandise eCommerce and sluggish ad sales was more than offset by a massive rebound in online travel and continued momentum for cashless payments.  </strong></p>

Z Holdings posted Q2 20 results that were modestly ahead of consensus but its first pass at full-year guidance fell well short of analyst expectations. The difference is renewed investment to leverage solid H1 growth in eCommerce/fintech users. That makes sense but it is harder to justify a 57% YTD run in the shares with FY20 operating income growth of only 5%. Operationally, some moderation in merchandise eCommerce and sluggish ad sales was more than offset by a massive rebound in online travel and continued momentum for cashless payments.  

Z Holdings - Q2 20 Results: Travel Business Amazes but Guidance May Be Less Appealing

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Z Holdings - Q2 20 Results: Travel Business Amazes but Guidance May Be Less Appealing