Daily BriefsTMT/Internet

TMT: Bukalapak, Empired Ltd, Xiaomi Corp, Alibaba Group, Nasdaq-100 Stock Index, Robinhood Markets, Sandhar Technologies Ltd, Larsen & Toubro Infotech, Wipro Ltd and more

In today’s briefing:

  • Bukalapak IPO: Valuation Insights
  • Empired (EPD AU): Capgemini’s Full Offer
  • Xiaomi Beats Apple to Become No. 2 in the Global Smartphone Market in 2Q2021
  • Understanding Alibaba, Why It’s Better Than Amazon
  • NDX Short Path
  • Robinhood ($HOOD) Breakdown
  • Sandhar Technologies: Multiple Broad-Based Improvement Triggers in Place
  • Growth focus to keep margins tethered
  • Wipro Ltd: Healthy Q1 Performance, Strong Guidance
  • Wipro: Strong Performance, Robust Outlook Backed By Efficient Execution

Bukalapak IPO: Valuation Insights

By Arun George

Bukalapak (BUKA IJ), which means ‘opening a kiosk’ in Indonesian, is a leading e-commerce player in non-Tier 1 cities in Indonesia, with a market share of 35% in 2020 based on GMV (gross merchandise value), according to Frost & Sullivan. 

Bukalapak will price its IPO at the top-end of its indicative price range of Rp750-850 per share, according to press reports. Bukalapak will raise Rp22 trillion ($1.5 billion) which will be Indonesia’s largest-ever IPO. The shares are set to list on 6 August. 

In Bukalapak IPO Initiation: Island Shopping, we noted that like its peers, Bukalapak is benefiting from the accelerating adoption of e-commerce in Indonesia. Bukalapak’s strategy of focusing on consumers in the non-Tier 1 area and the mass market in the Tier 1 area results in a relatively small overlap (less than 20%) between its customers and customers of other online marketplaces such as Sea Ltd (SE US)‘s Shopee, Tokopedia PT (1087142D IJ) and Alibaba Group (BABA US)‘s Lazada. Competitors generally target the affluent segment of the market. We concluded that Bukalapak’s fundamentals tick all the right boxes of rising monetisation, lower losses and declining cash burn, in our view. 

Our valuation analysis suggests that the IPO price range is attractive. Overall, we would participate in the IPO.


Empired (EPD AU): Capgemini’s Full Offer

By David Blennerhassett

Systems integrator Empired Ltd (EPD AU) has entered into a Scheme with Capgemini SE (CGEMY US) at a price of A$1.35/share, a 64.6% premium to last close, and an all-time high.

The Offer has the unanimous backing of Empired’s board. In addition, CEO Russell Baskerville with 5.8% of Empired’s outstanding shares intends to vote in favour of the Scheme.

In addition to shareholder approval, the Offer is subject to OIO approval. The Offer is not subject to due dili or financing.

This looks done. 

More below the fold.


Xiaomi Beats Apple to Become No. 2 in the Global Smartphone Market in 2Q2021

By Shifara Samsudeen, ACMA, CGMA

According to market analysis firm Canalys, the Chinese smartphone maker Xiaomi Corp (1810 HK)  has beaten iPhone maker Apple Inc (AAPL US)  to become the second-largest smartphone maker in the world based on the shipment volume in the second quarter of 2021 (preliminary estimates). The global smartphone shipment volume increased by 12% in 2Q2021 with Samsung Electronics (005930 KS)  claiming the largest share of 19% followed by Xiaomi with a 17% market share.

In our previous insight on Xiaomi’s 1Q2021 earnings, we highlighted that Xiaomi narrowed the market share gap with iPhone maker apple with a market share of 14.1% vs 15.1% for Apple in 1Q2021.


Understanding Alibaba, Why It’s Better Than Amazon

By James Emanuel

  • Alibaba is entirely misunderstood by most investors. It is more an ecosystem than a company as I shall explain.
  • Combine Amazon including AWS, Ebay, Shopify, Netflix, Paypal, and JPMorgan into a single entity and then you have something similar to Alibaba.
  • Not only does Alibaba have a very wide moat and durable earnings, but due to geopolitics, the entire Chinese tech sector is currently on sale in the market.
  • Alibaba is a veritable bargain right now. Don’t take my word for it – Goldman Sachs, Deutsche Bank, Morningstar, and many others agree.
  • Allow me to guide you to a better understanding of this wonderful opportunity.

NDX Short Path

By Thomas Schroeder

NDX call to short near 15,000 projection is working and this is the path we see unfolding after a reaction bounce to seek out 14,200 support and bigger buy level at 13,600 as the fresh long zone in mid August.

The NDX trendline break did see the SPX follow with a trendline break below 4,310 support.

Our cycle work called for a bull to bear turn around July 16/19 with a weaker cycle expected in the first half of August.


Robinhood ($HOOD) Breakdown

By Equity Breakdown

Traditional banks and investing platforms are prime for disruption. Based on CBInsights research, Fintech companies represent about 17% of all unicorns around the world, with companies like Stripe and Square. This environment reveals a clear message: people want to have frictionless participation in financial services and markets. Today we will break down Robinhood ($HOOD), the fintech company that wants to become the go-to app for money.


Sandhar Technologies: Multiple Broad-Based Improvement Triggers in Place

By ICICI Securities Limited

About the stock: Sandhar Technologies (STL) is a leading auto ancillary player primarily serving Indian auto OEM industry through a host of product categories, such as locking systems, Al die-casting & cabins (together form 57% of sales).

  • Established in 1987 with long-standing customer relationships across segments. The 2-W, PV combined accounted for ~80% of FY21 sales
  • Sustained improvement in blended EBITDA margin profile over the years accompanied by consistent CFO generation and healthy capital efficiency
Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Growth focus to keep margins tethered

By Motilal Oswal

L&T; Infotech (LTI)’s 1QFY22 USD revenue growth stood at 4.8% QoQ CC, above our est. of 3.4% QoQ CC. Growth was largely led by deal ramp-ups in Hi-Tech (Injazat) and BFSI (Islamic Bank), which grew 13.2 and 8.2%, respectively. The 1Q EBIT margin contracted 300bp QoQ to 16.4% (in line with estimates). The margin decline was primarily led by a 340bp impact of wage hikes and promotions to manage attrition. Despite the absence of large new deal wins in 1Q, LTI highlighted a strong demand environment, led by a robust deal pipeline.

Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Wipro Ltd: Healthy Q1 Performance, Strong Guidance

By ICICI Securities Limited

What should investors do? Wipro’s share price has grown by ~3x over the past five years (from ~Rs 210 in Jul 2016 to ~Rs 586 levels in July 2021). Target Price and Valuation: We value Wipro at Rs 670 i.e. 26x P/E on FY23E EPS…

Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Wipro: Strong Performance, Robust Outlook Backed By Efficient Execution

By Axis Direct

We recommend a BUY rating on the stock and assign a 26x P/E multiple to its FY23E earnings of Rs 25.4/share to arrive at a TP of Rs 655/share, implying an upside of 14% from CMP.

Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

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