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

Telco/Internet specialist

Kirk Boodry

Redex Research

Equity Bottom-Up

<p>Z Holdings posted mix results for Q3 20 with a modest beat to revenue and operating profit expectations but a very strong message that revenue growth would slow in Q4 even as higher spending on new initiatives and one-off LINE merger costs would keep full-year results close to what markets considered conservative guidance. Operationally, advertising revenue was better than expected whilst the positive impact of the popular GoTo Travel campaign boosted O2O sales. The disappointing message on higher spending could be offset by positive messages on merger synergies with LINE (briefing in March) and the announcement of the FY21 outlook with year-end results (late April).  </p>

Z Holdings posted mix results for Q3 20 with a modest beat to revenue and operating profit expectations but a very strong message that revenue growth would slow in Q4 even as higher spending on new initiatives and one-off LINE merger costs would keep full-year results close to what markets considered conservative guidance. Operationally, advertising revenue was better than expected whilst the positive impact of the popular GoTo Travel campaign boosted O2O sales. The disappointing message on higher spending could be offset by positive messages on merger synergies with LINE (briefing in March) and the announcement of the FY21 outlook with year-end results (late April).  

Z Holdings Q3 20 Results: Robust Reiteration of FY20 Guidance Deflates Share Price Rally

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Z Holdings Q3 20 Results: Robust Reiteration of FY20 Guidance Deflates Share Price Rally