Founder & CEO Bond Angle, LLC, Bond Angle, LLC

Vicki Bryan

Founder & CEO Bond Angle, LLC

Bond Angle, LLC

Insightful commentary and analysis on bond markets and market movers, including financial, economic, and industry catalysts and management shenanigans. 

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<a href="https://economictimes.indiatimes.com/news/international/business/tesla-puts-brake-on-shanghai-land-buy-as-u-s-china-tensions-weigh-sources/articleshow/82544420.cms" target="_blank" rel="noopener">Reuter’s reported</a> on Tuesday that <a href="https://www.smartkarma.com/entities/tesla-motors-inc" target="_blank" data-smartkarma-citation="entities:20279:1" rel="noopener">Tesla Motors (TSLA US)</a> has “halted plans to buy land to expand its Shanghai plant and make it a global export hub.”While the market chewed over that, <a href="https://youwuqiong.com/zhengzhi-jingjixue-shehuipinglun/2021%E5%B9%B44%E6%9C%88%E6%96%B0%E8%83%BD%E6%BA%90%E4%B9%98%E7%94%A8%E8%BD%A6%E9%94%80%E9%87%8F%E5%88%86%E6%9E%90/" target="_blank" rel="noopener">China’s Passenger Car Association</a> reported that Tesla’s monthly Made-In-China (MIC) deliveries dropped 27% in April versus March.And that Tesla exported 21% more of those cars than it sold locally in China.Now that is a big problem, one I’ve been tracking for more than six months. And it seems to be getting worse—as I projected.

Reuter’s reported on Tuesday that Tesla Motors (TSLA US) has “halted plans to buy land to expand its Shanghai plant and make it a global export hub.”While the market chewed over that, China’s Passenger Car Association reported that Tesla’s monthly Made-In-China (MIC) deliveries dropped 27% in April versus March.And that Tesla exported 21% more of those cars than it sold locally in China.Now that is a big problem, one I’ve been tracking for more than six months. And it seems to be getting worse—as I projected.

Bond market data and technology, BondEvalue

BondEvalue

Bond market data and technology

BondEvalue is a Singapore-based Fintech that specializes in bond market data and technology. The company's information services business offers bond market data on hard-currency corporate & sovereign bonds across Asia, Middle East, Europe and the Americas. The data, which includes bond prices, yields, news and analytics, is offered to end investors via interactive Mobile and Web Apps. Investors can sign up for a free trial of the service either via the company's website (https://bondevalue.com) or by downloading the BondEvalue Mobile App (http://onelink.to/wej7jq). BondEvalue is also developing an electronic bond exchange, BondbloX in Singapore that allows investors to trade bonds electronically in smaller sizes (US$1,000 or equivalent). For more information, visit https://www.bondblox.com/

Bond Market Data and Technology

S&amp;P slid 0.9% yesterday while Nasdaq ended 0.1% down after it managed to erase an early decline of 2.6% with dip buying. Energy, financials and industrials led the index lower. Tesla continued its slide and closed 1.9% lower as its April sales in China dipped; its plans to expand its Shanghai plant also took a backseat due to uncertainty on US-China tensions. US IG CDS spreads were 0.4bp wider and HY widened 2.1bp. EU main and crossover CDS spreads widened by 1.2bp and 5.1bp respectively. Most Asian equity markets opened flat while KOSPI is down over 1.5% and Taiwan down 4.5%. Asia ex-Japan CDS spreads were 1bp wider. Asian primary bond markets have cooled off after two busy days ahead of the Hari Raya holiday tomorrow.

China Railway Launches $ Bond; Macro; Rating Changes; New Issues; Talking Heads; Top Gainers & Lo...

For years now, <a href="https://www.smartkarma.com/entities/tesla-motors-inc" target="_blank" data-smartkarma-citation="entities:20279:1" rel="noopener">Tesla Motors (TSLA US)</a> and its ardent fans haven’t worried that none of its businesses are profitable because it has sold billions of dollars in energy emissions credits to offset its rivers of red ink (see my latest report on this, <a href="https://www.smartkarma.com/insights/tesla-goes-to-record-extremes-to-create-q1-profits" target="_blank" data-smartkarma-citation="insights:50821" rel="noopener">Tesla Goes to Record Extremes To Create Q1 "Profits"</a> on 4/28/21).They dismissed concerns that every penny of cash it has ever banked came from selling said energy credits on top of selling billions in stock to said fans and borrowing even more in debt.Pull these pesky threads and everything can unravel quickly, as I long have warned (for example, in <a href="https://www.smartkarma.com/insights/tesla-the-sky-s-the-limit-until" target="_blank" data-smartkarma-citation="insights:47414" rel="noopener">Tesla: The Sky's The Limit...Until</a> on 1/28/21).Sure enough, <a href="https://www.smartkarma.com/entities/stellantis-nv" target="_blank" data-smartkarma-citation="entities:798:1" rel="noopener">Stellantis NV (STLA US)</a> told reporters this week that it <a href="https://europe.autonews.com/environmentemissions/stellantis-hit-emissions-target-without-teslas-help-ceo-tavares-says?utm_source=dlvr.it&amp;utm_medium=twitter" target="_blank" rel="noopener">expects to meet European emissions standards on its own</a> this year without buying any more credits from Tesla.That creates a big problem for Tesla because lucrative energy credit sales to Stellantis have been the primary source of all of Tesla’s manufactured “profits” since Q2 2019, which created:<ul>
<li>the basis for Tesla’s recent addition to the S&amp;P 500 Index</li>
<li>and its mythological equity valuation</li>
<li>and its ability to sell stock at grossly inflated prices</li>
<li>and its artificially inflated credit rating which lets it borrow with impunity at cheap rates.</li>
</ul>

For years now, Tesla Motors (TSLA US) and its ardent fans haven’t worried that none of its businesses are profitable because it has sold billions of dollars in energy emissions credits to offset its rivers of red ink (see my latest report on this, Tesla Goes to Record Extremes To Create Q1 "Profits" on 4/28/21).They dismissed concerns that every penny of cash it has ever banked came from selling said energy credits on top of selling billions in stock to said fans and borrowing even more in debt.Pull these pesky threads and everything can unravel quickly, as I long have warned (for example, in Tesla: The Sky's The Limit...Until on 1/28/21).Sure enough, Stellantis NV (STLA US) told reporters this week that it expects to meet European emissions standards on its own this year without buying any more credits from Tesla.That creates a big problem for Tesla because lucrative energy credit sales to Stellantis have been the primary source of all of Tesla’s manufactured “profits” since Q2 2019, which created:
the basis for Tesla’s recent addition to the S&amp;P 500 Index
and its mythological equity valuation
and its ability to sell stock at grossly inflated prices
and its artificially inflated credit rating which lets it borrow with impunity at cheap rates.


Research on Tech Companies

Evelyn Zhang

Thematic (Sector/Industry)

<a href="https://www.smartkarma.com/entities/tesla-motors-inc" target="_blank" data-smartkarma-citation="entities:20279:1" rel="noopener">Tesla Motors (TSLA US)</a>  has been making headlines in China lately, but not for reasons it would like to. The revenue pressure Tesla faces in the China market is causing the car maker a number of challenges in the short term, mainly component quality control and maintaining its premium brand positioning, however its strategy of focusing on software may allow Tesla to shift its profit center away from hardware, to its software platform. However, this strategic shift depends heavily on policy environment.<ul>
<li>Under Tesla’s agreement with the Shanghai government, to build the Gigafactory, Tesla is obligated to meet an annual tax revenue target of RMB 2.23bn ($360 mn) by end of 2023. To achieve this goal, Tesla needs to build and sell roughly 500k to 1mn vehicles in China, or 25%-30% of China EV market share.</li>
<li>Tesla has since adopted “price for volume” strategy to boost sales in China. Tesla has cut price 7 times in China and there is still 10-20% room for further cuts. New Model 2 will cost $25,000 only thanks to over 90% utilization rate of Chinese components manufactures.</li>
<li>Tesla does not have strict qualifications of non-core component suppliers and product quality, and gives suppliers high degree of autonomy. The gross margin of supply chain may suffer from the price cuts, but it may benefit future China EV manufactures.</li>
</ul>

Tesla Motors (TSLA US)  has been making headlines in China lately, but not for reasons it would like to. The revenue pressure Tesla faces in the China market is causing the car maker a number of challenges in the short term, mainly component quality control and maintaining its premium brand positioning, however its strategy of focusing on software may allow Tesla to shift its profit center away from hardware, to its software platform. However, this strategic shift depends heavily on policy environment.
Under Tesla’s agreement with the Shanghai government, to build the Gigafactory, Tesla is obligated to meet an annual tax revenue target of RMB 2.23bn ($360 mn) by end of 2023. To achieve this goal, Tesla needs to build and sell roughly 500k to 1mn vehicles in China, or 25%-30% of China EV market share.
Tesla has since adopted “price for volume” strategy to boost sales in China. Tesla has cut price 7 times in China and there is still 10-20% room for further cuts. New Model 2 will cost $25,000 only thanks to over 90% utilization rate of Chinese components manufactures.
Tesla does not have strict qualifications of non-core component suppliers and product quality, and gives suppliers high degree of autonomy. The gross margin of supply chain may suffer from the price cuts, but it may benefit future China EV manufactures.


IPO and L/S equity, 2015 Starmine top stock picker, Global Equity Research Ltd

Rickin Thakrar

IPO and L/S equity, 2015 Starmine top stock picker

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Equity Bottom-Up

<a href="https://www.smartkarma.com/entities/tesla-motors-inc" target="_blank" data-smartkarma-citation="entities:20279:1" rel="noopener">Tesla Motors (TSLA US)</a> produced another phenomenal set of quarterly results, with the company generating 74% sales growth in 1Q21, its best quarterly result in over two years. While there are genuine questions about increased competition as well as the durability of Tesla' regulatory credits, we believe the market has not considered the potential significant change in Tesla’s cost of capital, which we believe could have a significant impact on its valuation. We dig into these elements in the detailed section of this note.

Tesla Motors (TSLA US) produced another phenomenal set of quarterly results, with the company generating 74% sales growth in 1Q21, its best quarterly result in over two years. While there are genuine questions about increased competition as well as the durability of Tesla' regulatory credits, we believe the market has not considered the potential significant change in Tesla’s cost of capital, which we believe could have a significant impact on its valuation. We dig into these elements in the detailed section of this note.

United States

Tesla Inc. operates as a multinational automotive and clean energy company. The Company designs and manufactures electric vehicles, battery energy storage from home to grid-scale, solar panels and solar roof tiles, and related products and services. Tesla owns its sales and service network and sells electric power train components to other automobile manufacturers.

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Tesla (TSLA US)

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Evelyn Zhang

Tesla – the Cost of Capital Dilemma

We believe the market has not considered the potential significant change in Tesla’s cost of capital, which we believe could have a significant...

Rickin Thakrar

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