Research from Value Investing, Value Investing

Value Investing

Research from Value Investing

I am a value investor. "Value", as defined in Value Investing, is simply the act of buying something for less than its worth. I treat my equity investment as a loan to the business - where the priority is to get back my principal in full, rather than achieving maximum yield. I consider my equity investment as a slightly higher risk loan extended to the business with slightly more accommodative loan covenants - hence justifying a slightly higher yield. While I identify as a value investor and cover all stocks and macro topics indiscriminately, most of my research will have an ASEAN bent as that’s where I’m geographically located.

Equity Bottom-Up

<ul><li>Takeaways: Biden plans to quadruple US/EU tariffs on Chinese EV imports.</li><li>This will further defend TSLA’s domestic beachhead: 1) 50% EV market share in the USA (No. 2: Ford 7% ) + 2) huge headstart over domestic auto incumbents in assembly line processes (Gigapress) &amp; high manufacturing concentration .</li><li>Together, this should result in superior economies of scale which translates into lower unit costs — increasingly important in a commoditizing US EV sector.</li></ul>

Takeaways: Biden plans to quadruple US/EU tariffs on Chinese EV imports.This will further defend TSLA’s domestic beachhead: 1) 50% EV market share in the USA (No. 2: Ford 7% ) + 2) huge headstart over domestic auto incumbents in assembly line processes (Gigapress) &amp; high manufacturing concentration .Together, this should result in superior economies of scale which translates into lower unit costs — increasingly important in a commoditizing US EV sector.

High Conviction Concentrated Growth Investing, Fallacy Alarm

Fallacy Alarm

High Conviction Concentrated Growth Investing

High conviction concentrated growth investing. Blends single stock, macro and thematic research into powerful long and short ideas. I am convinced that a robust and comprehensive investment process requires macro and micro considerations. And it requires a deep understanding what you are looking for and what you are invested in. Digitization has changed the dynamics both how businesses operate and how investors compete for returns. Ideas can scale much faster and fail much faster than before. The biggest value creation happens before it can be spotted in financial statements. As a result, my approach can be best summarized as high conviction, high concentration growth investing, embedded into a macro framework built on the realization that our current demographic set-up, monetary paradigm and innovation cycle will likely deliver a strong decade for nominal and real returns of productive assets.

<ul><li>Fiscal spending has been the key driver for this bull market as it reaccelerated in late 2022 following the inflation and subsequent interest rate shock.</li><li>This impulse will likely diminish over the next months. It will be replaced by a credit impulse from rate cuts, the first few of which will be very powerful.</li><li>Market mechanics will be accommodating. Leverage in the system is low. In fact, the pain trade is still higher.</li></ul>

Fiscal spending has been the key driver for this bull market as it reaccelerated in late 2022 following the inflation and subsequent interest rate shock.This impulse will likely diminish over the next months. It will be replaced by a credit impulse from rate cuts, the first few of which will be very powerful.Market mechanics will be accommodating. Leverage in the system is low. In fact, the pain trade is still higher.

Articles from Caixin Global, Caixin Global

Caixin Global

Articles from Caixin Global

Caixin is a media group dedicated to providing financial and business news through periodicals, online content, mobile apps, conferences, books and TV/video programs. Caixin aims to blaze a trail that helps traditional media prosper in the new media age through integrated multimedia platforms.

News from Caixin

<ul><li>Tesla Inc. will increase the price of its popular Model Y crossover by 5,000 yuan ($694) in China, a move that offers rivals a temporary reprieve as a raging price war engulfs the world's largest auto market.</li><li>The price rise on China-made Model Y vehicles will start on April 1, Tesla confirmed with Caixin Wednesday. Meanwhile, some of the extras offered by Tesla to its Chinese customers, including an 8,000-yuan insurance subsidy, will expire on March 31.</li><li>Tesla previously announced a price increase of $1,000 for the Model Y in the United States and 2,000 euros ($2,542) in Europe.</li></ul>

Tesla Inc. will increase the price of its popular Model Y crossover by 5,000 yuan ($694) in China, a move that offers rivals a temporary reprieve as a raging price war engulfs the world's largest auto market.The price rise on China-made Model Y vehicles will start on April 1, Tesla confirmed with Caixin Wednesday. Meanwhile, some of the extras offered by Tesla to its Chinese customers, including an 8,000-yuan insurance subsidy, will expire on March 31.Tesla previously announced a price increase of $1,000 for the Model Y in the United States and 2,000 euros ($2,542) in Europe.

Tesla Increases Price of Model Y in China in Sign That Price War Is Easing 

<ul><li>Tesla Inc. will have to sell a record number of cars in the fourth quarter to reach its goal for the year after third-quarter deliveries declined.</li><li>The electric-car maker produced 430,488 vehicles in the third quarter, down 10% from the second, and delivered 435,059 units, down 6.7%, Tesla said Monday.</li><li>The drop in deliveries resulted from production stoppages at its factory in Fremont, California. Tesla CEO Elon Musk said in July that production facilities would be closed at various times in the third quarter to perform plant upgrades.</li></ul>

Tesla Inc. will have to sell a record number of cars in the fourth quarter to reach its goal for the year after third-quarter deliveries declined.The electric-car maker produced 430,488 vehicles in the third quarter, down 10% from the second, and delivered 435,059 units, down 6.7%, Tesla said Monday.The drop in deliveries resulted from production stoppages at its factory in Fremont, California. Tesla CEO Elon Musk said in July that production facilities would be closed at various times in the third quarter to perform plant upgrades.

Tesla Cuts Prices of Top Models After Deliveries Fall

External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Incorporated in Hong Kong, supported by the mainland and targeting in global market, CMB International Capital Corporation Limited (“CMBI”) is an integrated financial institution providing comprehensive and professional services. As a wholly-owned subsidiary of China Merchants Bank ("CMB"), by leveraging on the Group’s synergy and coordination in domestic and overseas markets, as well as CMB’s strong resources and outstanding social reputation, CMBI and its subsidiaries have been actively implementing diversified business strategies and set up an overall layout of main business segments including Corporate Finance, Asset Management, Wealth Management, Global Markets and Structured Finance, etc. Adhering to the philosophy of “being clients oriented and increasing our own values by the way of creating value for clients”, CMBI endeavors to provide quality and integrated financial services to institutional, corporate and individual customers both domestic and overseas including Hong Kong IPO sponsorship and underwriting, share placement and rights issue for listed companies, financial advisors, bonds issuance services, asset management, direct investment, wealth management, equity sales and trading, etc.

<ul><li>We are of the view that Li Auto’s 2Q23 earnings are strong, especially with 8% net margin.</li><li>We therefore raise our 2H23E and FY24E earnings forecasts significantly.</li><li>That reminds us of Tesla which turned profitable at the end of 2019 and enjoyed the highest net profit growth in FY21 (+666% YoY). </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

We are of the view that Li Auto’s 2Q23 earnings are strong, especially with 8% net margin.We therefore raise our 2H23E and FY24E earnings forecasts significantly.That reminds us of Tesla which turned profitable at the end of 2019 and enjoyed the highest net profit growth in FY21 (+666% YoY). Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Li Auto Inc. (LI US) – A Replica of FY20-21 Tesla?

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)

TSLA: Chinese EV Tariffs?＄＄＄

Takeaways: Biden plans to quadruple US/EU tariffs on Chinese EV imports. This will further defend TSLA’s domestic beachhead: 1) 50% EV market share...

Value Investing

Fallacy Alarm's Elevator Pitch Party

Fiscal spending has been the key driver for this bull market as it reaccelerated in late 2022 following the inflation and subsequent interest rate...

Fallacy Alarm

Tesla Increases Price of Model Y in China in Sign That Price War Is Easing

Tesla Inc. will increase the price of its popular Model Y crossover by 5,000 yuan ($694) in China, a move that offers rivals a temporary reprieve...

Caixin Global

Tesla Cuts Prices of Top Models After Deliveries Fall

Tesla Inc. will have to sell a record number of cars in the fourth quarter to reach its goal for the year after third-quarter deliveries...

Caixin Global

Li Auto Inc. (LI US) – A Replica of FY20-21 Tesla?

We are of the view that Li Auto’s 2Q23 earnings are strong, especially with 8% net margin. We therefore raise our 2H23E and FY24E earnings...

CMB International

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