Bottom-Up EquitiesDaily Briefs

Equity Bottom-Up: Tesla Motors, New Oriental Education, NagaCorp Ltd and more

In today’s briefing:

  • Tesla – Autonomous Driving or Advantage Delusion?
  • New Oriental (EDU): Will Stop Declining in Two Quarters, but Over-Optimistic at Current Price
  • Nagacorp: Rising Rate of Pandemic Recovery Still Not Reflected in Price Breakout

Tesla – Autonomous Driving or Advantage Delusion?

By Mio Kato

Much of the unwarranted hype surrounding Tesla involves its supposed lead in autonomous driving technology. While various independent studies have debunked this idea and some show the company actually trailing most peers, some of this may be attributed to Tesla’s insistence on avoiding the use of lidar. Nevertheless, even when it comes to pure camera and radar-based systems, the reality of Tesla’s competitive advantage is decidedly underwhelming, as OpenPilot demonstrates.


New Oriental (EDU): Will Stop Declining in Two Quarters, but Over-Optimistic at Current Price

By Ming Lu

  • We believe revenue will continue YoY decline in 1Q21 (ended August 2020).
  • We believe the stock price reflects that the market was over-optimistic about the bankruptcy of Disney English and the private equity rush toward online education.
  • We believe the operating margin will not improve until EDU knows how many classrooms it should give up.
  • The 10-year P/E band suggests the stock price will have a downside of 20% in one year.

Nagacorp: Rising Rate of Pandemic Recovery Still Not Reflected in Price Breakout

By Howard J Klein

  • Despite its strong recovery of GGR compared with Asian peers, Nagacorp shares have remained stuck in a narrow trading range.
  • Migrant VIP cross border play and premium mass is the spearhead of the recovery as of 30th of September. 
  • China/Cambodia ties continue to play a role in the stability of VIP and premium mass revenues which are now at 92% of pre-pandemic levels.

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