Value Investing

Vladimir Dimitrov, CFA

Equity Bottom-Up

<ul>
<li>Disney is scheduled to release its Q2 2023 results later this week.</li>
<li>A number of factors are pointing to a strong and a better than expected quarter, but long-term problems remain.</li>
<li>The macroeconomic environment is also supportive for Disney's Parks, Experiences and Products segment.</li>
</ul>


Disney is scheduled to release its Q2 2023 results later this week.
A number of factors are pointing to a strong and a better than expected quarter, but long-term problems remain.
The macroeconomic environment is also supportive for Disney's Parks, Experiences and Products segment.


Disney's Q2 2023 Earnings: Now Is The Time To Deliver

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.

<ul>
<li>Disney announced a new ad-based tier for Disney+ last week.</li>
<li>The decision to go this direction may imply market saturation, rising competitive intensity, or an inability to hit its subscriber targets organically.</li>
<li>Disney's streaming business is increasingly dominated by low value Hotstar+ subs</li>
</ul>


Disney announced a new ad-based tier for Disney+ last week.
The decision to go this direction may imply market saturation, rising competitive intensity, or an inability to hit its subscriber targets organically.
Disney's streaming business is increasingly dominated by low value Hotstar+ subs


Disney: Streaming Trapped Between a Rock and Hard Place

<div><p>We have been longtime fans of Netflix the product and Netflix’s management team can rightfully be described as visionary. They had the vision to have the public markets fund an experiment in business models that appears now set to breakeven on FCF in 2021. Over the course of the past year we have gone from being short Netflix to long Netflix beginning this past summer, which has played out...and now we return to the sidelines (but not interested in reshorting Netflix), as we think to get more bullish on Netflix from here requires greater clarity on future revenue optionality around gaming and consumer products. The increasingly saturated streaming space means Netflix will only be growing subs ~10% for the forseeable future, with most of that growth from lower priced regions, while it will be investing with a vengeance to drive more content, likely capping expectations for continued margin expansion and FCF.</p></div><div><div><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></div>

We have been longtime fans of Netflix the product and Netflix’s management team can rightfully be described as visionary. They had the vision to have the public markets fund an experiment in business models that appears now set to breakeven on FCF in 2021. Over the course of the past year we have gone from being short Netflix to long Netflix beginning this past summer, which has played out...and now we return to the sidelines (but not interested in reshorting Netflix), as we think to get more bullish on Netflix from here requires greater clarity on future revenue optionality around gaming and consumer products. The increasingly saturated streaming space means Netflix will only be growing subs ~10% for the forseeable future, with most of that growth from lower priced regions, while it will be investing with a vengeance to drive more content, likely capping expectations for continued margin expansion and FCF.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.  

Equity, Bottom-up Analyst, Investics Research

Sameer Taneja

Equity, Bottom-up Analyst

Investics Research

It is important to note that the information provided by Investics Research is based on publicly available data and own knowledge, which has been gathered and analyzed from a variety of sources. While every effort has been made to ensure the accuracy and completeness of the information provided, it is not guaranteed to be free from errors or omissions. All forecasts and estimates are based on information that has been obtained from public sources that are considered to be reliable. The sources include but are not limited to, company announcements, exchange filings, presentations, etc. Investics does not guarantee the accuracy and completeness of the forecasts, estimates, and/or other information.

Equity Bottom-up Research

<ul>
<li>We summarize our gleanings from the conference call with <a href="https://www.smartkarma.com/entities/dream-international-ltd" target="_blank" data-smartkarma-citation="entities:15783:1" rel="noopener">Dream International (1126 HK)</a> to better understand growth opportunities and future expansion plans.</li>
<li>The company is expanding in Indonesia to increase its capacity by 30 million USD ( over 830 million USD). (capacity utilization for FY23:83%).</li>
<li>Trading at 4x FY24e PE, with an 11.4% dividend yield and a 15-year average ROE of 20%, this is a stock worth exploring. </li>
</ul>


We summarize our gleanings from the conference call with Dream International (1126 HK) to better understand growth opportunities and future expansion plans.
The company is expanding in Indonesia to increase its capacity by 30 million USD ( over 830 million USD). (capacity utilization for FY23:83%).
Trading at 4x FY24e PE, with an 11.4% dividend yield and a 15-year average ROE of 20%, this is a stock worth exploring. 


Dream International (1126 HK)  Management Concall: 4x PE,11.4% Div Yield,40% of Mkt Cap in Cash

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.

<ul><li>The Walt Disney Company delivered mixed results in the quarter, with revenues well below analyst expectations, but managed an earnings beat.</li><li>The company made significant management adjustments and productivity enhancements to develop a more economical, coordinated, and streamlined approach to operations.</li><li>Disney+ core subscribers increased during the quarter, with foreign growth more than balancing small domestic net losses.</li></ul>

The Walt Disney Company delivered mixed results in the quarter, with revenues well below analyst expectations, but managed an earnings beat.The company made significant management adjustments and productivity enhancements to develop a more economical, coordinated, and streamlined approach to operations.Disney+ core subscribers increased during the quarter, with foreign growth more than balancing small domestic net losses.

The Walt Disney Company: Radical Changes That Turned Disney Into an Entertainment Powerhouse! - Major Drivers

United States

The Walt Disney Company is an entertainment company that conducts operations in media networks, studio entertainment, theme parks and resorts, consumer products, and interactive media. The Company produces motion pictures, television programs, and musical recordings, as well as books and magazines.

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The Walt Disney Co (DIS US)

Disney's Q2 2023 Earnings: Now Is The Time To Deliver

Disney is scheduled to release its Q2 2023 results later this week. A number of factors are pointing to a strong and a better than expected...

Vladimir Dimitrov, CFA

Disney: Streaming Trapped Between a Rock and Hard Place

Disney's recent announcement of an ad-supported tier being launched for Disney+ strikes us as a questionable strategic choice that indicates market...

Aaron Gabin

Netflix 3Q21: Saved By Squid Game

Over the course of the past year we have gone from being short Netflix to long Netflix...and now we return to the sidelines. We need greater...

Aaron Gabin

Dream International (1126 HK) Management Concall: 4x PE,11.4% Div Yield,40% of Mkt Cap in Cash

We summarize our gleanings from a concall with the mgmt of Dream International (1126 HK) recently. It trades at mouth watering 3.9x FY23 PE and a...

Sameer Taneja

The Walt Disney Company: Radical Changes That Turned Disney Into an Entertainment Powerhouse! - Major Drivers

The Walt Disney Company delivered mixed results in the quarter, with revenues well below analyst expectations, but managed an earnings beat. The...

Baptista Research

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