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Smartkarma Daily Briefs

Sep 10
0

Daily Brief Consumer: Coupang, LG Energy Solution, Garrett Motion, Ralph Lauren and more

By | Consumer, Daily Briefs

In today’s briefing:

  • ESG Analysis of a Korean E-Commerce Giant: Did Coupang’s ESG Performance Really Improve?
  • Pullback Complete?; Commodities Heading Lower; Buying Growth/Cyclicals & A Few Utilities
  • GTX: Turbocharged Free Cash Flow
  • Ralph Lauren: Increased Digital Marketing Efforts

ESG Analysis of a Korean E-Commerce Giant: Did Coupang’s ESG Performance Really Improve?

By Ju Yeon Lee

  • E: In terms of resource management, Coupang was fined the most among companies that failed to fulfill their recycling obligations, and the use of plastic packaging is increasing every year.
  • S: Coupang was flagged for the largest number of disputes among online platforms. Not only conflicts with consumers and communities, but also the unfair labor practices are key risks.
  • G: Bom Kim resigned as chairman after the fire at Icheon Logistics Center. These measures were suspected of being intended to avoid punishment under the Serious Accidents Punishment Act.

Pullback Complete?; Commodities Heading Lower; Buying Growth/Cyclicals & A Few Utilities

By Joe Jasper

  • We are seeing signs that suggest this pullback may have run its course, as several global market indexes and Sectors appear to be making a higher low near logical support.
  • This includes the S&P 500, Russell 2000, MSCI ACWI (local currency), TOPIX/TOPIX Small/Nikkei 225, MSCI ACWI Technology (IXN-US), Consumer Discretionary (RXI-US), Financials (IXG-US), Industrials and (EXI-US) — add exposure.
  • While our overall outlook remains neutral, we continue to see a plethora of attractive buying opportunities in the new leaders.

GTX: Turbocharged Free Cash Flow

By Hamed Khorsand

  • Garrett Motion (GTX) has elected to pay its quarterly dividend on its Series A Preferred shares in cash in lieu of stock.
  • We believe this is a signal to investors on how the business has performed in the Q3 after GTX affirmed its full year adjusted free cash flow guidance in August
  • The use of cash removes the compounding effect through issuing more shares, which would nullify the share buyback program GTX has in place

Ralph Lauren: Increased Digital Marketing Efforts

By Baptista Research

  • Ralph Lauren delivered strong results this quarter surpassing revenue expectations of Wall Street as a result of solid growth across all key regions.
  • Ralph delivered solid consumer metrics, which include increased net promoter scores, purchase intent, and global brand consideration through an engaging mix of performance marketing and purpose-led investments.
  • We provide the stock of Ralph Lauren with a ‘Hold’ rating and a revision in the target price.

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Sep 10
0

Daily Brief TMT/Internet: Nasdaq-100 Stock Index, Tyro Payments, Bilibili Inc, Intuit Inc, Palo Alto Networks, Sunpower Corp, Crowdstrike Holdings Inc, Tyler Technologies and more

By | Daily Briefs, TMT/Internet

In today’s briefing:

  • US Fresh Sell Levels
  • Tyro Payments Rejects Potentia’s Proposal. MCB Accepts
  • Bilibili: Profitability Sinks and Top Line Growth to Further Drop with Cost Controls
  • Intuit Inc: Value Proposition
  • Palo Alto Networks: The NGFW Palo Alto Networks Cloud & Other Drivers
  • SunPower Corporation: The IKEA Collaboration & Other Major Drivers
  • CrowdStrike Holdings: Increasing Cybercrime & Ransomware Upside & Other Drivers
  • Tyler Technologies: Recent Acquisitions

US Fresh Sell Levels

By Thomas Schroeder

  • US bounce in line off of SPX 3,900 support. Index trendline resistances will offer fresh sell points with NDX our top short pick in the US.
  • RTY was our long pick off of 1,775 support, to trade a bounce toward trendline and will then turn bearish again.
  • NDX 12,500 zone the fresh short area. DAX and weaker Asia still a high conviction short group.

Tyro Payments Rejects Potentia’s Proposal. MCB Accepts

By David Blennerhassett

  • Tyro Payments (TYR AU) has rejected a proposal from a Potentia-led consortium at A$1.27/share, by way of a Scheme. 
  • Mike Cannon-Brookes’ Grok Ventures, holding 12.5% and Tyro’s largest shareholder, has backed the Offer. 
  • Tyro’s board considered the proposal to be materially below Tyro’s fundamental value and highly opportunistic. Tyro’s share price was down 66% ytd prior to Potentia’s approach.

Bilibili: Profitability Sinks and Top Line Growth to Further Drop with Cost Controls

By Shifara Samsudeen, ACMA, CGMA

  • Bilibili reported 2Q2022 results yesterday. Revenue grew 9.2% YoY to RMB4.91bn (in-line with consensus), however, it declined 2.9% YoY sequentially driven by YoY decrease in revenue from mobile games.
  • Operating losses for the quarter further widened to RMB2.2bn (vs consensus RMB2.1bn) which accounted for 44.6% of revenues compared to 33.8% in the same period a year ago.
  • Bilibili Inc (BILI US)  has taken several measure to improve its deteriorating profitability including headcount reduction, S&M cost cuts and close down of unprofitable businesses.

Intuit Inc: Value Proposition

By Baptista Research

  • Intuit had a strong quarter and delivered an all-around beat while continuing its focus on small businesses and customers.
  • It delivered strong margins and strong growth in the quarter.
  • There was a rise in the volatility in personal loans and various personal loan partners tightened the undertaking, but with volume from the other partners, Intuit was able to offset this negative impact.

Palo Alto Networks: The NGFW Palo Alto Networks Cloud & Other Drivers

By Baptista Research

  • Palo Alto Networks’ management has continued to make significant investments to transform the company and take advantage of the rapidly growing and large market opportunity in cybersecurity.
  • Palo Alto Networks is looking to grab a large chunk of market share and become a leader in the firewall market.
  • We provide the stock of Palo Alto Networks with a ‘Hold’ rating with a revision in the target price.

SunPower Corporation: The IKEA Collaboration & Other Major Drivers

By Baptista Research

  • SunPower delivered a strong set of in Q2 surpassing Wall Street expectations on all counts.
  • These elements increase customer motivation to add rooftop solar while also giving the residential solar sector greater price power than in recent memory.
  • Furthermore, SunPower renewed its agreement with Dream Finders Homes in Colorado in the new home market and extended its arrangement with KB Homes internationally.

CrowdStrike Holdings: Increasing Cybercrime & Ransomware Upside & Other Drivers

By Baptista Research

  • CrowdStrike saw its quarterly revenue exceed the $500 million threshold for the first time in the last quarter and delivered an all-around beat.
  • For the second consecutive quarter, gross retention increased to a new high, and dollar-based net retention soared to its highest point in seven quarters.
  • In the quarter, the public sector also became stronger, fueled by record-breaking success in U.S. federal and international government agencies.

Tyler Technologies: Recent Acquisitions

By Baptista Research

  • Tyler Technologies is benefitting from positive trends in the environment of the public sector market as its demo activities, and RPF continue to trend positively.
  • The company leveraged successful cross-selling efforts and multi-suite wins to deliver a solid quarter with revenues and earnings surpassing Wall Street expectations.
  • Overall, we provide the stock of Tyler Technologies with a ‘Hold’ rating with a revision in the target price.

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Sep 10
0

Daily Brief ECM: Intuit Inc: Value Proposition and more

By | Daily Briefs, ECM

In today’s briefing:

  • Intuit Inc: Value Proposition
  • SunPower Corporation: The IKEA Collaboration & Other Major Drivers
  • Palo Alto Networks: The NGFW Palo Alto Networks Cloud & Other Drivers
  • CrowdStrike Holdings: Increasing Cybercrime & Ransomware Upside & Other Drivers
  • Tyler Technologies: Recent Acquisitions
  • Enphase Energy: The GreenCom Networks Acquisition & Other Drivers
  • Ralph Lauren: Increased Digital Marketing Efforts
  • Sunrun Inc: New Level 2 EV Charger & Other Drivers

Intuit Inc: Value Proposition

By Baptista Research

  • Intuit had a strong quarter and delivered an all-around beat while continuing its focus on small businesses and customers.
  • It delivered strong margins and strong growth in the quarter.
  • There was a rise in the volatility in personal loans and various personal loan partners tightened the undertaking, but with volume from the other partners, Intuit was able to offset this negative impact.

SunPower Corporation: The IKEA Collaboration & Other Major Drivers

By Baptista Research

  • SunPower delivered a strong set of in Q2 surpassing Wall Street expectations on all counts.
  • These elements increase customer motivation to add rooftop solar while also giving the residential solar sector greater price power than in recent memory.
  • Furthermore, SunPower renewed its agreement with Dream Finders Homes in Colorado in the new home market and extended its arrangement with KB Homes internationally.

Palo Alto Networks: The NGFW Palo Alto Networks Cloud & Other Drivers

By Baptista Research

  • Palo Alto Networks’ management has continued to make significant investments to transform the company and take advantage of the rapidly growing and large market opportunity in cybersecurity.
  • Palo Alto Networks is looking to grab a large chunk of market share and become a leader in the firewall market.
  • We provide the stock of Palo Alto Networks with a ‘Hold’ rating with a revision in the target price.

CrowdStrike Holdings: Increasing Cybercrime & Ransomware Upside & Other Drivers

By Baptista Research

  • CrowdStrike saw its quarterly revenue exceed the $500 million threshold for the first time in the last quarter and delivered an all-around beat.
  • For the second consecutive quarter, gross retention increased to a new high, and dollar-based net retention soared to its highest point in seven quarters.
  • In the quarter, the public sector also became stronger, fueled by record-breaking success in U.S. federal and international government agencies.

Tyler Technologies: Recent Acquisitions

By Baptista Research

  • Tyler Technologies is benefitting from positive trends in the environment of the public sector market as its demo activities, and RPF continue to trend positively.
  • The company leveraged successful cross-selling efforts and multi-suite wins to deliver a solid quarter with revenues and earnings surpassing Wall Street expectations.
  • Overall, we provide the stock of Tyler Technologies with a ‘Hold’ rating with a revision in the target price.

Enphase Energy: The GreenCom Networks Acquisition & Other Drivers

By Baptista Research

  • Enphase had a good quarter and managed to exceed Wall Street expectations on all counts.
  • Its total revenue for the second quarter was $530.2 million, an increase of 20% from the previous quarter.
  • In the third quarter, they supplied microinverters rated at about 1,213 megawatts DC and actuators rated at 132.4-megawatt hours.

Ralph Lauren: Increased Digital Marketing Efforts

By Baptista Research

  • Ralph Lauren delivered strong results this quarter surpassing revenue expectations of Wall Street as a result of solid growth across all key regions.
  • Ralph delivered solid consumer metrics, which include increased net promoter scores, purchase intent, and global brand consideration through an engaging mix of performance marketing and purpose-led investments.
  • We provide the stock of Ralph Lauren with a ‘Hold’ rating and a revision in the target price.

Sunrun Inc: New Level 2 EV Charger & Other Drivers

By Baptista Research

  • Sunrun delivered a solid result, surpassing Wall Street expectations on all counts.
  • The company exceeded its volume projection and had almost 34,400 additional customers in the second quarter, including over 25,000 new subscribers.
  • Sunrun’s subscriber additions increased from almost 72% in Q1 to nearly 74% of its overall customer additions for the time period.

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Sep 10
0

Daily Brief ESG: ESG Analysis of a Korean E-Commerce Giant: Did Coupang’s ESG Performance Really Improve? and more

By | Daily Briefs, ESG

In today’s briefing:

  • ESG Analysis of a Korean E-Commerce Giant: Did Coupang’s ESG Performance Really Improve?

ESG Analysis of a Korean E-Commerce Giant: Did Coupang’s ESG Performance Really Improve?

By Ju Yeon Lee

  • E: In terms of resource management, Coupang was fined the most among companies that failed to fulfill their recycling obligations, and the use of plastic packaging is increasing every year.
  • S: Coupang was flagged for the largest number of disputes among online platforms. Not only conflicts with consumers and communities, but also the unfair labor practices are key risks.
  • G: Bom Kim resigned as chairman after the fire at Icheon Logistics Center. These measures were suspected of being intended to avoid punishment under the Serious Accidents Punishment Act.

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Sep 10
0

Daily Brief Technical Analysis: US Fresh Sell Levels and more

By | Daily Briefs, Technical Analysis

In today’s briefing:

  • US Fresh Sell Levels
  • Pullback Complete?; Commodities Heading Lower; Buying Growth/Cyclicals & A Few Utilities

US Fresh Sell Levels

By Thomas Schroeder

  • US bounce in line off of SPX 3,900 support. Index trendline resistances will offer fresh sell points with NDX our top short pick in the US.
  • RTY was our long pick off of 1,775 support, to trade a bounce toward trendline and will then turn bearish again.
  • NDX 12,500 zone the fresh short area. DAX and weaker Asia still a high conviction short group.

Pullback Complete?; Commodities Heading Lower; Buying Growth/Cyclicals & A Few Utilities

By Joe Jasper

  • We are seeing signs that suggest this pullback may have run its course, as several global market indexes and Sectors appear to be making a higher low near logical support.
  • This includes the S&P 500, Russell 2000, MSCI ACWI (local currency), TOPIX/TOPIX Small/Nikkei 225, MSCI ACWI Technology (IXN-US), Consumer Discretionary (RXI-US), Financials (IXG-US), Industrials and (EXI-US) — add exposure.
  • While our overall outlook remains neutral, we continue to see a plethora of attractive buying opportunities in the new leaders.

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Sep 10
0

Daily Brief Thematic (Sector/Industry): Japan Weekly | Renova and more

By | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

  • Japan Weekly | Renova, Mitsubishi Motors, Mercari

Japan Weekly | Renova, Mitsubishi Motors, Mercari

By Mark Chadwick

  • The Nikkei was up +2.15% over the past week (-2% YTD): the yen was 1.2% weaker at ¥142/$
  • The news was focused on the sharp drop in the yen with even the BoJ Governor Kuroda noting some undesirable effects
  • The proportion of female directors rose to 9%, a slight increase over 7.4% in the previous year

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Sep 10
0

Daily Brief Credit: Chinese Property Weekly – 9 September 2022 – Lucror Analytics and more

By | Credit, Daily Briefs

In today’s briefing:

  • Chinese Property Weekly – 9 September 2022 – Lucror Analytics

Chinese Property Weekly – 9 September 2022 – Lucror Analytics

By Charles Macgregor

The Chinese Property Weekly focuses on providing updates in the Chinese real-estate sector, including recent regulatory and company developments, top and bottom performers, rating actions, as well as a list of bond maturities in the next 30 days.

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Sep 10
0

Daily Brief Macro: CX Daily: How China Is Trying To Get Debt Dodgers To Pay Up and more

By | Daily Briefs, Macro

In today’s briefing:

  • CX Daily: How China Is Trying To Get Debt Dodgers To Pay Up

CX Daily: How China Is Trying To Get Debt Dodgers To Pay Up

By Caixin Global

  • In Depth: How China is trying to get debt dodgers to pay up

  • Record numbers apply for China’s teachers exam amid bleak job market

  • Trending in China: Good samaritans ‘coldly’ told to self-isolate after helping with overturned ambulance

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Sep 10
0

Daily Brief Equity Bottom-Up: Bilibili: Profitability Sinks and Top Line Growth to Further Drop with Cost Controls and more

By | Daily Briefs, Equity Bottom-Up

In today’s briefing:

  • Bilibili: Profitability Sinks and Top Line Growth to Further Drop with Cost Controls
  • Fushan Energy: Back to Interesting Levels
  • Lupin Ltd (LPC IN): Muted Q1FY23 Results as The US Sales Dipped Significantly
  • Indonesian Banks 2Q22 Screener; Stick with Bank Mandiri, and Negara Is Our Value Pick
  • GTX: Turbocharged Free Cash Flow

Bilibili: Profitability Sinks and Top Line Growth to Further Drop with Cost Controls

By Shifara Samsudeen, ACMA, CGMA

  • Bilibili reported 2Q2022 results yesterday. Revenue grew 9.2% YoY to RMB4.91bn (in-line with consensus), however, it declined 2.9% YoY sequentially driven by YoY decrease in revenue from mobile games.
  • Operating losses for the quarter further widened to RMB2.2bn (vs consensus RMB2.1bn) which accounted for 44.6% of revenues compared to 33.8% in the same period a year ago.
  • Bilibili Inc (BILI US)  has taken several measure to improve its deteriorating profitability including headcount reduction, S&M cost cuts and close down of unprofitable businesses.

Fushan Energy: Back to Interesting Levels

By Sameer Taneja

  • Shougang Fushan Resources (639 HK) is back to interesting levels after a correction in HK/China and now trades at 4.5x PE/1.3x EV-EBITDA FY22e and a dividend yield of 17%. 
  • With >50% of the market capitalization in cash (accounting for the dividend liability), there is an excellent margin of safety in the name.
  • A further correction of coking coal prices by 20% from these levels to 1700-1800 RMB/ton would still have the stock trading at a >10% dividend yield. 

Lupin Ltd (LPC IN): Muted Q1FY23 Results as The US Sales Dipped Significantly

By Tina Banerjee

  • Lupin Ltd (LPC IN) reported muted Q1FY23 performance, with revenue declining 15% y/y and 7% q/q to INR36 billion. Revenue from North America is down 24% y/y and 29% q/q.
  • Price erosion in the U.S. coupled with shelf stock adjustment on the higher trade inventory are creating a dent to the quarterly numbers.
  • We would like to see a sustainable revival in the company’s North America revenue performance and margin improvement, before taking any position in the stock.

Indonesian Banks 2Q22 Screener; Stick with Bank Mandiri, and Negara Is Our Value Pick

By Victor Galliano

  • In 2Q22, the six Indonesian banks retain their strong capital adequacy ratios, healthy credit quality and good NPL coverage; yet we see select credit quality headwinds, especially in MSME credit
  • We maintain our positive view on Bank Mandiri, with its attractive pre-provision profitability and healthy cost of risk, whilst trading on attractive multiples; we prefer Bank Negara to Bank Rakyat
  • We await stronger signals from Bank Permata for its “turn around” potential, especially if management can improve credit quality, and keep lowering its cost of risk to boost returns

GTX: Turbocharged Free Cash Flow

By Hamed Khorsand

  • Garrett Motion (GTX) has elected to pay its quarterly dividend on its Series A Preferred shares in cash in lieu of stock.
  • We believe this is a signal to investors on how the business has performed in the Q3 after GTX affirmed its full year adjusted free cash flow guidance in August
  • The use of cash removes the compounding effect through issuing more shares, which would nullify the share buyback program GTX has in place

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Sep 10
0

Daily Brief Event-Driven: Tyro Payments Rejects Potentia’s Proposal. MCB Accepts and more

By | Daily Briefs, Event-Driven

In today’s briefing:

  • Tyro Payments Rejects Potentia’s Proposal. MCB Accepts
  • Poongsan Corp: Spin-Off of Defense Business Is Negative for Existing Minority Shareholders

Tyro Payments Rejects Potentia’s Proposal. MCB Accepts

By David Blennerhassett

  • Tyro Payments (TYR AU) has rejected a proposal from a Potentia-led consortium at A$1.27/share, by way of a Scheme. 
  • Mike Cannon-Brookes’ Grok Ventures, holding 12.5% and Tyro’s largest shareholder, has backed the Offer. 
  • Tyro’s board considered the proposal to be materially below Tyro’s fundamental value and highly opportunistic. Tyro’s share price was down 66% ytd prior to Potentia’s approach.

Poongsan Corp: Spin-Off of Defense Business Is Negative for Existing Minority Shareholders

By Douglas Kim

  • On 7 September, Poongsan Corp announced a physical division spin-off of its defense business unit. This is likely to have a negative impact on the existing shareholders of Poongsan Corp.
  • Its proposal to spin off the defense business comes at a bad time when investors are very cautious about companies trying to spin off valuable businesses into a separate entity.
  • Poongsan’s spin-off is excluded from the need to include stock purchase rights.

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