In today’s briefing:
- BFI Finance Indonesia (BFIN IJ) – Pole Position in Multifinance
- Amber Enterprises India Ltd: Forensic Analysis
- Softbank Group – BABA Pressure Has Didi Read Across but a 41% NAV Discount Provides Cushion
- Bajaj Finance: Stellar Earnings – In Line with Our Projections
- KDDI (Buy) – Q1 22 Results Reaction: Mixed Quarter as Consumer Predictably Weak
- Dropbox Inc.: Initiation of Coverage – The DocSend Acquisition & Other Drivers
- MongoDB Inc.: Initiation of Coverage – Business Model & The Database Industry Boom
- Takeda 1Q: Top Line Beat Consensus – Development Pipeline Continues to Progress
- Akamai Technologies Inc.: Initiation of Coverage – Business Strategy
- Samsung Biologics (207940 KS): Record-High Semi-Annual Revenue Exceeding KRW1 Trillion
BFI Finance Indonesia (BFIN IJ) – Pole Position in Multifinance
- BFI Finance Indonesia continued to see rapid momentum behind its recovery with new bookings in 2Q2022 hitting all time highs and spreads improving to 13.5% with NPFs declining.
- The company’s growth is driven by the non-dealer used vehicle market with new bookings coming mainly through agents and repeat customers, and digital initiatives in place to improve origination.
- BFIN is the best quality multifinance player in Indonesia, with an ROE now above 21%. There will be more collaboration and synergies with Bank Jago going forward further driving growth.
Amber Enterprises India Ltd: Forensic Analysis
- Amber Enterprises India (AMBER IN) is one of the key ODM players in the RAC and related industry.
- However, there are couple of puzzling forensic takeaways, especially in F22 where company had reported high growth in numbers.
- These primarily include the rationale behind debt increase, puzzling subsidiary numbers, discrepancy in inventory verification, etc.
Softbank Group – BABA Pressure Has Didi Read Across but a 41% NAV Discount Provides Cushion
- Alibaba is under pressure again with a direct read-across to Softbank
- Worries on China regulation are bad news for another Softbank holding DIdi Global as it stands alongside Alibaba as a high-profile regulatory target
- Alibaba weakness could drive risk pricing (CDS) and the discount to NAV higher. A silver lining is that discount makes Softbank attractive for investors looking for indirect China exposure
Bajaj Finance: Stellar Earnings – In Line with Our Projections
- Bajaj Finance Ltd (BAF IN) [“BAF”] reported Q1FY23 PAT of approx. INR 2600cr which puts it on track to post INR 11,000cr+ PAT in FY23, in line with our projections.
- BAF is back on its pre-COVID growth trajectory as also highlighted in our prior note. Q1FY23 AUM growth came in at 6.2% QoQ and annualized ROE is back to 20%+.
- The strong Q1FY23 earnings is despite elevated competition in the marketplace which led BAF to forgo business where margin profile was not attractive.
KDDI (Buy) – Q1 22 Results Reaction: Mixed Quarter as Consumer Predictably Weak
- Results for the quarter were mixed with a slight miss for profitability despite one-time gains for financial services taken in the quarter
- Revenue erosion from a reduction in the Rakuten roaming service area was relatively modest whilst there are signs of improvement in erosion from mobile price cuts
- KDDI will reimburse users ¥7bn (v Redex forecast of ¥10bn) for its network outage earlier this month; the operational impact won’t be clear until Q2 churn is reported
Dropbox Inc.: Initiation of Coverage – The DocSend Acquisition & Other Drivers
- This is our first report on Dropbox, a major player within the cloud storage, file transfer, and e-signature domain.
- Dropbox is continuing to evolve its core FSS business to drive monetization and improve attention.
- This quarter, Dropbox has launched its newest version of Dropbox backup that has upgraded management settings and restoration flow.
MongoDB Inc.: Initiation of Coverage – Business Model & The Database Industry Boom
- This is our first report on database major, MongoDB.
- The company delivered yet another all round beat in the previous result with a staggering 57% growth year over year.
- The revenue generated by Atlas alone increased by 82% year over year and accounted for 60% of MongoDB’s total revenue.
Takeda 1Q: Top Line Beat Consensus – Development Pipeline Continues to Progress
- Takeda Pharmaceutical (4502 JP) reported 1QFY03/23 results yesterday. Reported revenue grew 2.4% YoY to JPY972.5bn (vs consensus JPY929.6bn) while OP decreased 39.4% YoY to JPY150.5bn (vs consensus JPY173.1bn).
- Decline in OP was due to one-time gain from the sale of Japan diabetes portfolio of JPY131.4bn in 1Q last year, however, excluding this, OP increased 28.4% YoY in 1QFY03/2023.
- Takeda’s share price dropped 1.5% at the end of today’s trading as investor sentiment has changed post earnings as some of the company’s key drugs have started experiencing generic erosion.
Akamai Technologies Inc.: Initiation of Coverage – Business Strategy
- This is our first report on Akamai Technologies, a renowned content delivery network and cloud service provider. the growth in security and computing has been the main driver of revenues for Akamai in the past years but it has been adversely impacted by the U.S. dollar’s sharp increase in value and the slowing of traffic growth in the company’s delivery business.
- The consistent double-digit growth in security revenue has been driven by Guardicore’s continued outstanding performance and rapid growth in their application security business.
Samsung Biologics (207940 KS): Record-High Semi-Annual Revenue Exceeding KRW1 Trillion
- Samsung Biologics (207940 KS) achieved highest ever semi-annual revenue of KRW 1.62 trillion in H1 2022, with an operating profit of KRW346.1 billion, mainly driven by its contract manufacturing business.
- At the end of Q2, the company had an order book of $7.9 billion, entailing revenue visibility. Its new plant is on track to start operation in October.
- Samsung Bioepis has launched first ophthalogy biosimilar in the U.S. in June. Both the CDMO and biosimilar businesses are expected to clock solid annual revenue growth in 2022.
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