TMT & Consumer Independent Equity Research Analyst, Obex Capital Research

Aaron Gabin

TMT & Consumer Independent Equity Research Analyst

TMT & Consumer Independent Equity Research

Obex Capital Research

“Obex” is Latin for Barriers to Entry. Obex Capital Management’s investment philosophy is driven by an intense focus on which business model’s Barriers to Entry are able to withstand the ever increasing competitive disruption in the TMT and Consumer Sectors.

Equity Bottom-Up

<div class="content-highlight">
<p>Obex’s fundamental research process is focused on secular change in the TMT and Consumer sectors. We seek to differentiate between fundamental business analysis and security analysis. Before deciding if a security’s pricing and positioning merit a long or short position, we analyze the four pillars of business fundamentals (Secular Factors, TAM, Competitive Advantage, Business Model) in order to determine if this is a “good” or “not so good” opportunity.</p>
</div>
<div>
<h2>We will be examining the <a href="https://www.smartkarma.com/entities/iac-interactivecorp" target="_blank" data-smartkarma-citation="entities:754:1" rel="noopener">IAC/InterActiveCorp (IAC US)</a> complex over the course of the next week. Our headline take is we like ANGI and IAC as longs, and lean short on <a href="https://www.smartkarma.com/entities/match-group-inc" target="_blank" data-smartkarma-citation="entities:25903:1" rel="noopener">Match Group Inc (MTCH US)</a> .</h2>
<p></p>
<p>Summary: <a href="https://www.smartkarma.com/entities/angi-homeservices/overview" target="_blank" rel="noopener">ANGI Homeservices (ANGI US)</a> , the leading online home services marketplace, is poised to see accelerating revenue growth and margin expansion as it shifts its business model from lead generation towards fixed price. Fixed price dramatically improving the value proposition for both customers and service providers, accelerating ANGI’s scale-based moat. Fixed price’s unit economics are potentially 8-10x better than the existing lead gen business. The transition will more than offset the 2Q19 spike in customer acquisition costs injected by <a href="https://www.smartkarma.com/entities/alphabet-inc-cl-c" target="_blank" data-smartkarma-citation="entities:11369:1" rel="noopener">Alphabet Inc Cl C (GOOG US)</a>  algo changes as fixed price will translate into long term margin accretion from increasing customer repeat rate, reduction of unfilled service requests, and an increase in the supply of service providers on the platform. </p>
</div>
<div>
<ul>
<li>Base Case PT: $16                     </li>
<li>Upside PT: $26                                  </li>
<li>Bear Case PT: $7</li>
</ul>
</div>
<div>
<p>The Insight is meant to be used by investors as a road map to evaluate ANGI Homeservices' progress over the next few quarters. We start with a Best Working Thesis which reflects our initial conclusions from the case study. Key Questions positively answered would make us incrementally more bullish, while evidence of rising Thesis Threats may potentially puncture our view.</p>
</div>


Obex’s fundamental research process is focused on secular change in the TMT and Consumer sectors. We seek to differentiate between fundamental business analysis and security analysis. Before deciding if a security’s pricing and positioning merit a long or short position, we analyze the four pillars of business fundamentals (Secular Factors, TAM, Competitive Advantage, Business Model) in order to determine if this is a “good” or “not so good” opportunity.


We will be examining the IAC/InterActiveCorp (IAC US) complex over the course of the next week. Our headline take is we like ANGI and IAC as longs, and lean short on Match Group Inc (MTCH US) .

Summary: ANGI Homeservices (ANGI US) , the leading online home services marketplace, is poised to see accelerating revenue growth and margin expansion as it shifts its business model from lead generation towards fixed price. Fixed price dramatically improving the value proposition for both customers and service providers, accelerating ANGI’s scale-based moat. Fixed price’s unit economics are potentially 8-10x better than the existing lead gen business. The transition will more than offset the 2Q19 spike in customer acquisition costs injected by Alphabet Inc Cl C (GOOG US)  algo changes as fixed price will translate into long term margin accretion from increasing customer repeat rate, reduction of unfilled service requests, and an increase in the supply of service providers on the platform. 



Base Case PT: $16                     
Upside PT: $26                                  
Bear Case PT: $7



The Insight is meant to be used by investors as a road map to evaluate ANGI Homeservices' progress over the next few quarters. We start with a Best Working Thesis which reflects our initial conclusions from the case study. Key Questions positively answered would make us incrementally more bullish, while evidence of rising Thesis Threats may potentially puncture our view.


ANGI Homeservices (ANGI): Fixed Price Will Fix the Price I (Fundamentals).

Asian Equities Analyst, Logistics & Transport, Tracking Traffic

Daniel Hellberg

Asian Equities Analyst, Logistics & Transport

Equity Capital Markets

<p>Meituan-Dianping ('Meituan'), an online consumer services platform with leading positions in China’s food delivery, in-store dining, and hotel accommodation segments, is seeking an IPO in Hong Kong. Although it failed to turn a profit last year, Meituan enjoys sizzling revenue growth (+161% 2017) and impressive scale (33.9 bn RMB revenue 2017). The company was most recently valued at US$30 bn after a round of private financing in October 2017.</p><p>Meituan lumps together its in-store dining and hotel accommodation businesses into a single segment (the segment also includes revenue from other travel and leisure reservation and marketing services). We believe travel-related services make up the majority of this segment’s revenue, and that Meituan now competes directly against <a href="https://www.smartkarma.com/entities/180" target="_blank" data-smartkarma-citation="entities:180:1">Ctrip.com International (ADR) (CTRP US)</a> for a share of Chinese consumers' spending on tourism.</p><p>In this note, we will compare Meituan’s and Ctrip’s travel businesses after first providing a brief overview of Meituan as a whole. In future notes we’ll cover Meituan’s food delivery service and, eventually, we’ll offer our take on the company’s proposed valuation ahead of the IPO.</p><p>Our main conclusion after reviewing Meituan’s travel-related businesses? That Meituan’s emergence as a player in Chinese tourism poses a real threat to the future growth of Ctrip. We believe Ctrip is already under pressure from large Chinese hotel chains that are pushing consumers to ‘book direct’ (and cut out intermediaries like Ctrip altogether). Now Ctrip must open a second front in this battle for Chinese tourism spending as Meituan moves to expand, particularly among lower-tier city dwellers and smaller merchants.</p>

Meituan-Dianping ('Meituan'), an online consumer services platform with leading positions in China’s food delivery, in-store dining, and hotel accommodation segments, is seeking an IPO in Hong Kong. Although it failed to turn a profit last year, Meituan enjoys sizzling revenue growth (+161% 2017) and impressive scale (33.9 bn RMB revenue 2017). The company was most recently valued at US$30 bn after a round of private financing in October 2017.Meituan lumps together its in-store dining and hotel accommodation businesses into a single segment (the segment also includes revenue from other travel and leisure reservation and marketing services). We believe travel-related services make up the majority of this segment’s revenue, and that Meituan now competes directly against Ctrip.com International (ADR) (CTRP US) for a share of Chinese consumers' spending on tourism.In this note, we will compare Meituan’s and Ctrip’s travel businesses after first providing a brief overview of Meituan as a whole. In future notes we’ll cover Meituan’s food delivery service and, eventually, we’ll offer our take on the company’s proposed valuation ahead of the IPO.Our main conclusion after reviewing Meituan’s travel-related businesses? That Meituan’s emergence as a player in Chinese tourism poses a real threat to the future growth of Ctrip. We believe Ctrip is already under pressure from large Chinese hotel chains that are pushing consumers to ‘book direct’ (and cut out intermediaries like Ctrip altogether). Now Ctrip must open a second front in this battle for Chinese tourism spending as Meituan moves to expand, particularly among lower-tier city dwellers and smaller merchants.

Meituan-Dianping IPO, Part 1: Role in China's Travel Segment, Comparison to Incumbent Ctrip.com

United States

ANGI Homeservices Inc. operates an online portal for home improvement. The Company offers a digital platform that connects homeowners with service professionals for home services. ANGI Homeservices serves customers worldwide.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

ANGI Homeservices (ANGI US)

ANGI Homeservices (ANGI): Fixed Price Will Fix the Price I (Fundamentals).

Obex’s fundamental research process is focused on secular change in the TMT and Consumer sectors. We seek to differentiate between fundamental...

Aaron Gabin

Meituan-Dianping IPO, Part 1: Role in China's Travel Segment, Comparison to Incumbent Ctrip.com

Meituan-Dianping ('Meituan'), an online consumer services platform with leading positions in China’s food delivery, in-store dining, and hotel...

Daniel Hellberg

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)