In today’s briefing:
- CP ALL PCL (CPALL TB) – A King for All Seasons
- EM and DM Neobanks in 2023; Selective Opportunity Driven by Bottom-Up Execution
- Carly Holdings Limited – Q2 Shows Vehicle Finance = Growth
- Xpeng: Surprise Price Cut Weighs on Sentiment, but Share Price Likely Bottomed
- Goldman Sachs’ Stock Isn’t As Lucrative As You Might Think
- Obi Pharma Inc (4174 TT): Inherent Pipeline Risk Has Clouded Near-Term Outlook
- Ford: Why We’re Bullish For A Change (Rating Upgrade)
- Netflix 4Q22: Priced for Perfection
- Intercontinental Exchange (ICE): Initiation of Coverage – APAC Expansion & Other Drivers
- IPG Photonics: Major Drivers
CP ALL PCL (CPALL TB) – A King for All Seasons
- CP ALL is a unique and high-quality proxy for the recovery in domestic consumer demand plus increasing tourist arrivals, which should soon see a further boost from China.
- We would expect a strong finish to the year with an even stronger pickup in 2023 across convenience stores, Lotus supermarkets and hypermarkets, as well as Siam Makro cash-and-carry.
- CP ALL is a top growth pick in Thailand, with EPS expected to grow by +35% and 25% for FY2023E and FY2024E, with ongoing expansion and economic recovery.
EM and DM Neobanks in 2023; Selective Opportunity Driven by Bottom-Up Execution
- Fintechs and neobanks suffered a valuations reality check in 2022, due to rising interest (and discount) rates, poor fundamental results coupled with – in certain cases – high cash burn
- Most neobanks need to improve customer activity rates as well as product and revenue penetration; legacy banks are responding to disruptors and in developed markets megafintechs are encroaching on neobanks
- We see 2023 neobank picks driven by bottom-up calls on focused execution; we turn constructive on Nubank, stay negative on Inter and Jago and neutral on Kakaobank and Banco PAN
Carly Holdings Limited – Q2 Shows Vehicle Finance = Growth
- Carly Holdings Limited (ASX:CL8) operates a vehicle subscription business, which it launched in March 2019, leveraging the existing DriveMyCar operations and technology.
- Car subscription allows business and retail customers to pay a single monthly fee to access a car for 30 days or more and is an alternative to purchasing or financing a vehicle.
- Carly has attracted larger automotive industry businesses as shareholders, with a model that facilitates sales volumes of new vehicles and delivers a new recurring revenue stream for automotive manufacturers and dealers.
Xpeng: Surprise Price Cut Weighs on Sentiment, but Share Price Likely Bottomed
- Xpeng announced price cuts on existing G3i, P5 and P7, which surprised the market on negative side, potentially indicating weaker demand and profitability
- Recent management changes has also hurt sentiment with the new CEO from a ‘traditional’ car background
- Xpeng’s share price has bottomed in our view and we expect a 2H’23 recovery with improving fundamentals
Goldman Sachs’ Stock Isn’t As Lucrative As You Might Think
- Goldman Sachs’ business model is not aligned to benefit from an elevated interest rate environment.
- The bank’s trading segment could pivot, but Goldman’s investment banking prospects remain gloomy.
- The firm’s stock presents reasonable valuation and dividend metrics, but they might not be enough to convince investors, analysts say.
Obi Pharma Inc (4174 TT): Inherent Pipeline Risk Has Clouded Near-Term Outlook
- Obi Pharma Inc (4174 TT) is developing novel therapeutic agents for unmet medical needs against cancers. The company’s lead pipeline candidate, adagloxad simolenin is a first-in-class cancer vaccine candidate.
- Currently, adagloxad simolenin is in phase 3 study as an adjuvant treatment of high-risk, early-stage, Globo H-positive triple negative breast cancer, which represents 15–20% of breast cancer cases.
- The company has a cash runway through 2024, while phase 3 trial is expected to be completed in 2025. With the pipeline progress, operating expenses are expected to increase.
Ford: Why We’re Bullish For A Change (Rating Upgrade)
- Softening macroeconomic circumstances in the Eurozone and cooling inflation in the U.S. could reignite demand.
- China’s reopening might smooth supply chains.
- Ford Motor Company’s EU market share is expanding, and its product-driven approach has sustained customer loyalty in North America.
Netflix 4Q22: Priced for Perfection
- Netflix is now up 50% from its lows on hope that advertising and paid sharing drive a revenue reacceleration and multiple rerating. Part B has happened.
- Advertising uptake will be slow. But consensus has 55M incremental ad-subs (20% of the total) and $8B in revenue assumed in 2025!
- Netflix intends on keeping content spending flat for the next few years, raising the importance of its hit rate – which has not been Netflix’s forte.
Intercontinental Exchange (ICE): Initiation of Coverage – APAC Expansion & Other Drivers
- This is our first report on the Intercontinental Exchange (ICE), one of the largest providers of provider of market infrastructure, data services and technology solutions in the world.
- In ICE’s equity derivatives complex, the ADV in its MSCI complex was up as the volatility levels continued rising.
- Recurring revenues increased, driven by robust demand for the company’s energy exchange data as well as the continued benefit from its record 2021 listings performance.
IPG Photonics: Major Drivers
- IPG Photonics delivered a mixed result in the last quarter, as it failed to meet Wall Street expectations in terms of revenues but managed an earnings beat.
- Sales in high-power cutting applications suffered from a decline in general industrial demand in China and Europe.
- As this business required extra investment and was noncore to IPG, the management announced they would sell it to Lumentum.
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