Value Investing

Vladimir Dimitrov, CFA

Equity Bottom-Up

<ul><li>Unilever's business fundamentals would suggest a higher valuation with respect to peers.</li><li>Even after accounting for higher capital expenditure, the company is still valued conservatively on a free cash flow basis.</li><li>While rising commodity prices could continue to be a headwind, business related risks don't fully justify the discount in Unilever's share price.</li></ul>

Unilever's business fundamentals would suggest a higher valuation with respect to peers.Even after accounting for higher capital expenditure, the company is still valued conservatively on a free cash flow basis.While rising commodity prices could continue to be a headwind, business related risks don't fully justify the discount in Unilever's share price.

Unilever: The Disconnect Between Fundamentals And Price

Independent research on the U.S. markets, Baptista Research

Baptista Research

Independent research on the U.S. markets

Baptista Research is an independent financial research house focused on the U.S. markets. We provide equity research as well as credit research reports on the top-listed U.S. companies with most of our focus on technology, consumer goods and services, automobiles, industrials, oil and gas, pharma, and healthcare. Our research has served more than 3000 institutional investors including mutual funds, hedge funds, banks, family offices, and various buy-side firms. We operate a research subscription service where institutions, as well as retail investors, can have priority access to all our research. We also have a wide distribution of our research reports across some of the top global financial platforms. Apart from equity research and credit research, we also provide advisory services with respect to mergers & acquisitions (M&A), private equity/ venture capital fundraising, valuation reports, and investment management services for corporates.
Baptista Research is owned and managed by Ishan Majumdar, an ex-Venture Capitalist/ Investment Banker, a Chartered Accountant, and a Masters’ degree holder in Management from HEC Paris. Ishan has nearly a decade of experience in Mergers and Acquisitions, Leveraged Buyouts (LBOs), Venture Capital Investing, Corporate Strategy, and Valuation in front-office roles at the likes of BNP Paribas CIB, Credit Agricole CIB, Groupe Danone, and TIW Private Equity. He has worked on and closed multiple acquisition deals, leveraged buyouts, and start-up investment transactions.

Equity Capital Markets

Procter & Gamble Co / Equity Capital Markets

<ul><li>Procter & Gamble had another excellent quarter with a robust organic sales growth as the management continues to be focused on productivity improvements and cost savings.</li><li>The company’s organic sales for the fiscal year grew over 6%, up over 12% on a two-year stack which is a very positive sign despite the heavy pantry-stocking taking place in households during the pandemic.</li><li>The management increased their dividend by 10% and returned $19 billion to shareholders, $11 billion in share repurchase, and $8 billion in dividends.</li></ul>

Procter & Gamble had another excellent quarter with a robust organic sales growth as the management continues to be focused on productivity improvements and cost savings.The company’s organic sales for the fiscal year grew over 6%, up over 12% on a two-year stack which is a very positive sign despite the heavy pantry-stocking taking place in households during the pandemic.The management increased their dividend by 10% and returned $19 billion to shareholders, $11 billion in share repurchase, and $8 billion in dividends.

<ul>
<li>Over the past few years Procter &amp; Gamble has been outperforming its peers in the Home &amp; Personal Care space.</li>
<li>Sustainable improvements in profitability appear to be the main reason for this dynamic.</li>
<li>In the coming years, however, P&amp;G would more likely trail sector returns, rather than outperforming them.</li>
</ul>


Over the past few years Procter &amp; Gamble has been outperforming its peers in the Home &amp; Personal Care space.
Sustainable improvements in profitability appear to be the main reason for this dynamic.
In the coming years, however, P&amp;G would more likely trail sector returns, rather than outperforming them.


Procter & Gamble - Set Your Expectations Right

ASEAN Insight Provider, CrossASEAN Research

Angus Mackintosh

ASEAN Insight Provider

CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

<p><a href="https://www.smartkarma.com/entities/sea-ltd" target="_blank" data-smartkarma-citation="entities:8509:1" rel="noopener">Sea Ltd (SE US)</a> announced its 1Q2021 results which look like a blowout set of numbers with +147% growth in total GAAP revenues with +117% growth in digital bookings for digital entertainment and +250% YoY growth in e-commerce GAAP revenues.</p>
<p>Gross Profit increased a staggering +212% YoY to US$645.4m in 1Q2021 and the company booked a positive EBITDA of US$88.1m versus a (US$69.9m) loss in 1Q2020.</p>
<p>The gross profit margin increased from 28% in 1Q2020 to 36% in 1Q2021, which is a testament to the fact that the company is moving along the path to profitability. Digital entertainment saw higher margins, while-commerce saw falling EBITDA loss per order.</p>
<p>In Digital Entertainment (DE) division continues to see strong growth in its user base with +61% YoY growth in quarterly active users (QAU) to 648.6m but more importantly quarterly paying users saw growth of +12.3% YoY to 79.8m signifying a higher level of monetization on its self-developed game <em>Free Fire.</em></p>
<p>The company continues to successfully expand its gaming business to new geographies, with India being the latest growth engine and players are spending more time on Free Fire and spending more. It continues to add new content and characters to increase the appeal and stickiness of <em>Free Fire</em>. It is also seeing huge response in the eSports arena for <em>Free Fire.</em></p>
<p>Shopee ranked number one in the shopping category by monthly active users and time spent in app in 1Q2021 for both South East Asia and Taiwan, according to App Annie. E-commerce continues to show supercharged growth and especially in the core market of Indonesia.</p>
<p><a href="https://www.smartkarma.com/entities/sea-ltd" target="_blank" data-smartkarma-citation="entities:8509:1" rel="noopener">Sea Ltd (SE US)</a>'s move into digital payments in South -East Asia under SeaMoney and ShopeePay in Indonesia continues to see strong momentum.  The mobile wallet total payment volume saw total payment volume triple in 1Q2021 to US$3.4bn. </p>
<p>The company is also expanding the offline use-cases for ShopeePay most recently extending use to Indomaret in Indonesia, the largest mini-market operator in the country.</p>
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<p><a href="https://www.smartkarma.com/entities/sea-ltd" target="_blank" data-smartkarma-citation="entities:8509:1" rel="noopener">Sea Ltd (SE US)</a>'s move into food delivery through ShopeeFood and evidence suggests that it has already had a strong reception to its launch in Jakarta, with growth similar to that in other categories.</p>
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<p>This latest set of results provides further proof of the success of the <a href="https://www.smartkarma.com/entities/sea-ltd" target="_blank" data-smartkarma-citation="entities:8509:1" rel="noopener">Sea Ltd (SE US)</a> growth model which generates huge EBITDA from gaming and reinvests that money into growing the company's e-commerce and digital finance businesses, whilst maintaining the investment momentum into the gaming cash cow, buy pushing out into new geographies such as India.</p>
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<p><a href="https://www.smartkarma.com/entities/sea-ltd" target="_blank" data-smartkarma-citation="entities:8509:1" rel="noopener">Sea Ltd (SE US)</a> continues to standout as the best way to play the explosive growth in e-commerce in South East Asia, funded by the popularity of its self developed game <em>Free Fire </em>and its gaming business, together with its move into digital payments a third leg to future growth.</p>
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<section class="figure"><a href="https://www.smartkarma.com/entities/sea-ltd" target="_blank" data-smartkarma-citation="entities:8509:1" rel="noopener">Sea Ltd (SE US)</a> valuations are higher than its listed peers on 13x and 9x EV/Sales for FY21E and FY22E respectively but it is growing at more than twice the pace in terms of sales to justify this. The market is also paying a premium for its unique financing plus its market leadership and strong track record on execution, with 11 consecutive quarters of triple-digit growth.</section>
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Sea Ltd (SE US) announced its 1Q2021 results which look like a blowout set of numbers with +147% growth in total GAAP revenues with +117% growth in digital bookings for digital entertainment and +250% YoY growth in e-commerce GAAP revenues.
Gross Profit increased a staggering +212% YoY to US$645.4m in 1Q2021 and the company booked a positive EBITDA of US$88.1m versus a (US$69.9m) loss in 1Q2020.
The gross profit margin increased from 28% in 1Q2020 to 36% in 1Q2021, which is a testament to the fact that the company is moving along the path to profitability. Digital entertainment saw higher margins, while-commerce saw falling EBITDA loss per order.
In Digital Entertainment (DE) division continues to see strong growth in its user base with +61% YoY growth in quarterly active users (QAU) to 648.6m but more importantly quarterly paying users saw growth of +12.3% YoY to 79.8m signifying a higher level of monetization on its self-developed game Free Fire.
The company continues to successfully expand its gaming business to new geographies, with India being the latest growth engine and players are spending more time on Free Fire and spending more. It continues to add new content and characters to increase the appeal and stickiness of Free Fire. It is also seeing huge response in the eSports arena for Free Fire.
Shopee ranked number one in the shopping category by monthly active users and time spent in app in 1Q2021 for both South East Asia and Taiwan, according to App Annie. E-commerce continues to show supercharged growth and especially in the core market of Indonesia.
Sea Ltd (SE US)'s move into digital payments in South -East Asia under SeaMoney and ShopeePay in Indonesia continues to see strong momentum.  The mobile wallet total payment volume saw total payment volume triple in 1Q2021 to US$3.4bn. 
The company is also expanding the offline use-cases for ShopeePay most recently extending use to Indomaret in Indonesia, the largest mini-market operator in the country.

Sea Ltd (SE US)'s move into food delivery through ShopeeFood and evidence suggests that it has already had a strong reception to its launch in Jakarta, with growth similar to that in other categories.

This latest set of results provides further proof of the success of the Sea Ltd (SE US) growth model which generates huge EBITDA from gaming and reinvests that money into growing the company's e-commerce and digital finance businesses, whilst maintaining the investment momentum into the gaming cash cow, buy pushing out into new geographies such as India.



Sea Ltd (SE US) continues to standout as the best way to play the explosive growth in e-commerce in South East Asia, funded by the popularity of its self developed game Free Fire and its gaming business, together with its move into digital payments a third leg to future growth.

Sea Ltd (SE US) valuations are higher than its listed peers on 13x and 9x EV/Sales for FY21E and FY22E respectively but it is growing at more than twice the pace in terms of sales to justify this. The market is also paying a premium for its unique financing plus its market leadership and strong track record on execution, with 11 consecutive quarters of triple-digit growth.

















Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

<div><p>Monde Nissin (MNC), a food manufacturer in the Philippines, aims to raise around US$1bn in its Philippines IPO.</p></div><div><p>It primarily has two main businesses: Asia-Pacific Branded Food and Beverage Business, which sells instant noodles, biscuits and other products, and meat alternative business which includes Quorn and Cauldron meat alternatives brands.</p></div><div>
<p>MNC has a high market share in the Philippines in the instant noodles and biscuits segment along with a few other categories as well. Quorn as well has a strong lead over its next largest peers in the Chicken alternative meat segment in the grocery channel. </p>
<p>In our previous note, <a href="https://www.smartkarma.com/insights/monde-nissin-pre-ipo-the-positives-high-market-share" target="_blank" rel="noopener">Monde Nissin Pre-IPO - The Positives - High Market Share</a>, we spoke about the positive aspects of the deal. In this note, we will talk about the not so pleasant aspects. </p>
</div>

Monde Nissin (MNC), a food manufacturer in the Philippines, aims to raise around US$1bn in its Philippines IPO.It primarily has two main businesses: Asia-Pacific Branded Food and Beverage Business, which sells instant noodles, biscuits and other products, and meat alternative business which includes Quorn and Cauldron meat alternatives brands.
MNC has a high market share in the Philippines in the instant noodles and biscuits segment along with a few other categories as well. Quorn as well has a strong lead over its next largest peers in the Chicken alternative meat segment in the grocery channel. 
In our previous note, Monde Nissin Pre-IPO - The Positives - High Market Share, we spoke about the positive aspects of the deal. In this note, we will talk about the not so pleasant aspects. 


Monde Nissin Pre-IPO - The Negatives - High Debt, Div Payments, Floundering MA

United States

The Procter & Gamble Company manufactures and markets consumer products in countries throughout the world. The Company provides products in the laundry and cleaning, paper, beauty care, food and beverage, and health care segments. Procter & Gamble products are sold primarily through mass merchandisers, grocery stores, membership club stores, drug stores, and neighborhood stores.

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Procter & Gamble Co (PG US)

Unilever: The Disconnect Between Fundamentals And Price

Unilever's business fundamentals would suggest a higher valuation with respect to peers. Even after accounting for higher capital expenditure, the...

Vladimir Dimitrov, CFA

Procter & Gamble Co - Investment Thesis

Procter & Gamble had another excellent quarter with a robust organic sales growth as the management continues to be focused on productivity...

Baptista Research

Procter & Gamble - Set Your Expectations Right

Over the past few years Procter & Gamble has been outperforming its peers in the Home & Personal Care space. Sustainable improvements in...

Vladimir Dimitrov, CFA

Sea Ltd - Supercharged

Sea Ltd (SE US) is the best way to proxy for the explosive growth in e-commerce in South East Asia, funded by its gaming revenue, with its move...

Angus Mackintosh

Monde Nissin Pre-IPO - The Negatives - High Debt, Div Payments, Floundering MA

Monde Nissin (MNC), a food manufacturer in the Philippines, aims to raise around US$1bn in its Philippines IPO. In this note, we will talk about...

Sumeet Singh

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