Meituan Dianping, the largest O2O platform in China, was listed on September 20th last year and lock-up expiry will be on March 20th. The stock has returned -13% since listing.
As it heads into lock-up expiry on March 20th, we will examine Meituan Dianping shareholder structure and potential shares up for sale.
Meituan was included by MSCI recently and will be eligible for the Hong Kong Connect soon thanks to rule amendment.
The company delivered a decent topline growth in 3Q2018 but its profit fell short of expectation. We highlight potentials from the food supply chain solution. We also discuss implication from MoBike acquisition.
We review our SOTP valuation of Meituan and believe there is an upside.
Smartkarma supports the world’s leading investors with high-quality, timely, and actionable Insights. Subscribe now for unlimited access, or request a demo below.
Meituan Dianping, the largest O2O platform in China, was listed on September 20th last year and lock-up expiry will be on March 20th. The stock has returned -13% since listing.
As it heads into lock-up expiry on March 20th, we will examine Meituan Dianping shareholder structure and potential shares up for sale.
Meituan was included by MSCI recently and will be eligible for the Hong Kong Connect soon thanks to rule amendment.
The company delivered a decent topline growth in 3Q2018 but its profit fell short of expectation. We highlight potentials from the food supply chain solution. We also discuss implication from MoBike acquisition.
We review our SOTP valuation of Meituan and believe there is an upside.
NIO Inc (NIO US) fell 17% in its after-hour trading session post announcement of its Q4 results. The company turned a gross profit in Q4 while the number of cars delivered in the full year 2018 was 11,348 has beaten their own 10,000 cars target. The company is currently trading 62% above its IPO price.
However, the worrying part lies in its guidance which could mean that pre-IPO investors have more compelling reasons to lock-in some profits upon lock-up expiry.
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Smartkarma supports the world’s leading investors with high-quality, timely, and actionable Insights. Subscribe now for unlimited access, or request a demo below.
Meituan Dianping, the largest O2O platform in China, was listed on September 20th last year and lock-up expiry will be on March 20th. The stock has returned -13% since listing.
As it heads into lock-up expiry on March 20th, we will examine Meituan Dianping shareholder structure and potential shares up for sale.
Meituan was included by MSCI recently and will be eligible for the Hong Kong Connect soon thanks to rule amendment.
The company delivered a decent topline growth in 3Q2018 but its profit fell short of expectation. We highlight potentials from the food supply chain solution. We also discuss implication from MoBike acquisition.
We review our SOTP valuation of Meituan and believe there is an upside.
NIO Inc (NIO US) fell 17% in its after-hour trading session post announcement of its Q4 results. The company turned a gross profit in Q4 while the number of cars delivered in the full year 2018 was 11,348 has beaten their own 10,000 cars target. The company is currently trading 62% above its IPO price.
However, the worrying part lies in its guidance which could mean that pre-IPO investors have more compelling reasons to lock-in some profits upon lock-up expiry.
Youngone Holdings (009970 KS) is another single-sub holdco. Youngone Corp (111770 KS) is the largest sub that accounts for 70% of Holdco NAV. Youngone is one of Korea’s two largest OEM apparel manufacturers. On a 20D MA, they are now at 312% of σ. Current price ratio is at a 120D high. Holdco discount is 27.5% to NAV.
I am not seeing any substantial factor that can explain this much price divergence in the last two days. There is a growing concern over Sub’s labor cost. This may explain Sub’s price plunge. But this isn’t enough to explain the current huge price divergence.
In the last 120 days, we’ve had a couple of radical divergences. All of these got quickly reverted to mean. I expect the same to happen this time. At this much divergence, there is a little chance of further widening. I’d go short Holdco and long Sub. Just, Holdco liquidity can be an issue here.
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In our Discover SZ/SH Connect series, we aim to help our investors understand the flow of northbound trades via the Shanghai Connect and Shenzhen Connect, as analyzed by our proprietary data engine. We will discuss the stocks that experienced the most inflow and outflow by offshore investors in the past seven days.
We split the stocks eligible for the northbound trade into three groups: those with a market capitalization of above USD 5 billion, and those with a market capitalization between USD 1 billion and USD 5 billion.
We note that in March, northbound inflows turned more cautious vs strong inflows in February (link to our Feb note) and January (link to our Jan note). Nevertheless we see strong inflows into Healthcare sector, led by Jiangsu Hengrui Medicine Co., (600276 CH). We also highlight Universal Scientific Industrial Shanghai (601231 CH 环旭电子) in the mid cap space that attracted strong northbound inflows.
Tesla’s 1Q delivery details released yesterday suggests one of three possible reasons for the dramatic drop across the company’s product lineup – either the impact of the federal tax credit phaseout is beginning to hit Tesla’s sales, the sales reflect an aging product portfolio or a combination of both. We suspect that it might be a combination of the two.
Excitement over a new product typically lasts for 6-12 months, then should show a stabilizing pattern. To be honest, the Model 3 should now be a mid-cycle product in the minds of consumers since the car has been around since mid 2017, although analysts’ clock began ticking on the product in 2Q18 given their P&L focus. We are now in the 10th month following normalization of the Model 3 production which would suggest that we should be anticipating a Model 3 delivery range of 50-65,000 units based on delivery patterns for the past 3 quarters, but we also believe investors should keep in mind that for Tesla the federal tax credit phaseout kicked in on January 1, 2019. The combination of these two factors could have very well led to a drop in deliveries in 1Q, with a 4Q18 front-load effect. This seems to be especially noticeable on the drop in the deliveries of Models S&X that few analysts on the street seem to have focused on following Tesla’s press release. We believe what is sorely needed for Tesla as a brand is a product portfolio refresh, not Model Y launch at this point.
Given the above, we would be inclined to model in a 200-250k units of the Model 3 deliveries in 2019 at this point, which would be conservative compared to the 360-400k units that Tesla is currently guiding. The wild card would be if China demand for the Model 3 exceeds the initial indications of about 10k units per quarter (see JL Warren Capital’s Tesla China Q1 Delivery Revision ), which should be included in the 1Q shipment figures that were released by the company.
Tesla: Global Deliveries 1Q19
(Units)
1Q18
4Q18
1Q19
QoQ
YoY
Model 3
8,180
63,359
50,900
-19.7%
522.2%
Models S&X
21,800
27,550
12,100
-56.1%
-44.5%
Total
29,980
90,909
63,000
-30.7%
110.1%
Source: Company Data
U.S. federal tax credit for EVs begin to phase out for EV manufacturers once the OEM hits cumulative sales of 200k units, and Tesla achieved this landmark back in July 2018. The actual phaseout for the company began on January 1, 2019. Granted we have been concerned about Tesla’s aging product portfolio for the past year (see Tesla: A Few Thoughts on Ageing Products Before 1Q Earnings Announcement, April 10, 2018), we also believe that the drop in the Models S&X deliveries in 1Q19 is highly likely to have been exacerbated by the tax credit phaseout and/or other factors.
Tesla also admitted it delivered half of its total deliveries for the entire quarter in the last nine days of March, blaming “challenges encountered” for delays in getting cars to buyers in Europe and China. But even adding cars “in transit” doesn’t cover the shortfall versus guidance and market expectations.
It also doesn’t ease investors’ concerns about cooling demand for Model 3 in the US, or the alarming drop-off in sales for Models S and X, well, everywhere.
Preceding my comments on Naspers are the weekly setup/unwind tables for Asia-Pacific Holdcos.
These relationships trade with a minimum liquidity threshold of US$1mn on a 90-day moving average, and a % market capitalisation threshold – the $ value of the holding/opco held, over the parent’s market capitalisation, expressed in percent – of at least 20%.
MTG revised their original targets for FY2019 and issued revised targets which were significantly below the original targets
The share price has already been on the decline even prior to the notice of revised targets
Declining inbound sales of its flagship brand ReFa is the main culprit for guidance reversion
The impact of Chinese e-commerce legislation was significant due to limited exposure to pure inbound sales
Parallel buyers, those who buy products to resell them in China: dominates MTG’s inbound sales
MTG’s price difference in Japan duty-free purchases vs official sales channels in China
The Troubles of MTG, Causing Panic Among Consensus
Insider ownership and lack of free float keeping the share price above its fair value
Price to book approaching 1.0x; limits the immediate downside risk
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NIO Inc (NIO US) fell 17% in its after-hour trading session post announcement of its Q4 results. The company turned a gross profit in Q4 while the number of cars delivered in the full year 2018 was 11,348 has beaten their own 10,000 cars target. The company is currently trading 62% above its IPO price.
However, the worrying part lies in its guidance which could mean that pre-IPO investors have more compelling reasons to lock-in some profits upon lock-up expiry.
Youngone Holdings (009970 KS) is another single-sub holdco. Youngone Corp (111770 KS) is the largest sub that accounts for 70% of Holdco NAV. Youngone is one of Korea’s two largest OEM apparel manufacturers. On a 20D MA, they are now at 312% of σ. Current price ratio is at a 120D high. Holdco discount is 27.5% to NAV.
I am not seeing any substantial factor that can explain this much price divergence in the last two days. There is a growing concern over Sub’s labor cost. This may explain Sub’s price plunge. But this isn’t enough to explain the current huge price divergence.
In the last 120 days, we’ve had a couple of radical divergences. All of these got quickly reverted to mean. I expect the same to happen this time. At this much divergence, there is a little chance of further widening. I’d go short Holdco and long Sub. Just, Holdco liquidity can be an issue here.
Get Straight to the Source on Smartkarma
Smartkarma supports the world’s leading investors with high-quality, timely, and actionable Insights. Subscribe now for unlimited access, or request a demo below.
NIO Inc (NIO US) fell 17% in its after-hour trading session post announcement of its Q4 results. The company turned a gross profit in Q4 while the number of cars delivered in the full year 2018 was 11,348 has beaten their own 10,000 cars target. The company is currently trading 62% above its IPO price.
However, the worrying part lies in its guidance which could mean that pre-IPO investors have more compelling reasons to lock-in some profits upon lock-up expiry.
Youngone Holdings (009970 KS) is another single-sub holdco. Youngone Corp (111770 KS) is the largest sub that accounts for 70% of Holdco NAV. Youngone is one of Korea’s two largest OEM apparel manufacturers. On a 20D MA, they are now at 312% of σ. Current price ratio is at a 120D high. Holdco discount is 27.5% to NAV.
I am not seeing any substantial factor that can explain this much price divergence in the last two days. There is a growing concern over Sub’s labor cost. This may explain Sub’s price plunge. But this isn’t enough to explain the current huge price divergence.
In the last 120 days, we’ve had a couple of radical divergences. All of these got quickly reverted to mean. I expect the same to happen this time. At this much divergence, there is a little chance of further widening. I’d go short Holdco and long Sub. Just, Holdco liquidity can be an issue here.
* The recovery in 4Q2018 shows that CTRP has already survived the new law and the new competitor in 2018. * We believe EPS will grow 12% in 2019. * However, we believe the market has already over-reacted to the news last November that CTRP became the largest online travel agency. * We set a target price of USD23.80, which is 32% below the market price.
Get Straight to the Source on Smartkarma
Smartkarma supports the world’s leading investors with high-quality, timely, and actionable Insights. Subscribe now for unlimited access, or request a demo below.
NIO Inc (NIO US) fell 17% in its after-hour trading session post announcement of its Q4 results. The company turned a gross profit in Q4 while the number of cars delivered in the full year 2018 was 11,348 has beaten their own 10,000 cars target. The company is currently trading 62% above its IPO price.
However, the worrying part lies in its guidance which could mean that pre-IPO investors have more compelling reasons to lock-in some profits upon lock-up expiry.
Youngone Holdings (009970 KS) is another single-sub holdco. Youngone Corp (111770 KS) is the largest sub that accounts for 70% of Holdco NAV. Youngone is one of Korea’s two largest OEM apparel manufacturers. On a 20D MA, they are now at 312% of σ. Current price ratio is at a 120D high. Holdco discount is 27.5% to NAV.
I am not seeing any substantial factor that can explain this much price divergence in the last two days. There is a growing concern over Sub’s labor cost. This may explain Sub’s price plunge. But this isn’t enough to explain the current huge price divergence.
In the last 120 days, we’ve had a couple of radical divergences. All of these got quickly reverted to mean. I expect the same to happen this time. At this much divergence, there is a little chance of further widening. I’d go short Holdco and long Sub. Just, Holdco liquidity can be an issue here.
* The recovery in 4Q2018 shows that CTRP has already survived the new law and the new competitor in 2018. * We believe EPS will grow 12% in 2019. * However, we believe the market has already over-reacted to the news last November that CTRP became the largest online travel agency. * We set a target price of USD23.80, which is 32% below the market price.
The S&P 500 is beginning to come off of short-term overbought extremes, consolidating near the confluence of key overhead resistance and the 200-day moving average. This level is roughly 2,817 on the S&P 500 and roughly 1,000 on the S&P 600 Small Cap index. Some consolidation or a mild pullback is possible in the near-term, which we believe would help alleviate current overbought readings and allow for a more orderly and meaningful move higher. In today’s report we highlight attractive Groups and stocks within the Consumer Discretionary, Health Care, and Services Sectors.
Get Straight to the Source on Smartkarma
Smartkarma supports the world’s leading investors with high-quality, timely, and actionable Insights. Subscribe now for unlimited access, or request a demo below.
Tesla’s 1Q delivery details released yesterday suggests one of three possible reasons for the dramatic drop across the company’s product lineup – either the impact of the federal tax credit phaseout is beginning to hit Tesla’s sales, the sales reflect an aging product portfolio or a combination of both. We suspect that it might be a combination of the two.
Excitement over a new product typically lasts for 6-12 months, then should show a stabilizing pattern. To be honest, the Model 3 should now be a mid-cycle product in the minds of consumers since the car has been around since mid 2017, although analysts’ clock began ticking on the product in 2Q18 given their P&L focus. We are now in the 10th month following normalization of the Model 3 production which would suggest that we should be anticipating a Model 3 delivery range of 50-65,000 units based on delivery patterns for the past 3 quarters, but we also believe investors should keep in mind that for Tesla the federal tax credit phaseout kicked in on January 1, 2019. The combination of these two factors could have very well led to a drop in deliveries in 1Q, with a 4Q18 front-load effect. This seems to be especially noticeable on the drop in the deliveries of Models S&X that few analysts on the street seem to have focused on following Tesla’s press release. We believe what is sorely needed for Tesla as a brand is a product portfolio refresh, not Model Y launch at this point.
Given the above, we would be inclined to model in a 200-250k units of the Model 3 deliveries in 2019 at this point, which would be conservative compared to the 360-400k units that Tesla is currently guiding. The wild card would be if China demand for the Model 3 exceeds the initial indications of about 10k units per quarter (see JL Warren Capital’s Tesla China Q1 Delivery Revision ), which should be included in the 1Q shipment figures that were released by the company.
Tesla: Global Deliveries 1Q19
(Units)
1Q18
4Q18
1Q19
QoQ
YoY
Model 3
8,180
63,359
50,900
-19.7%
522.2%
Models S&X
21,800
27,550
12,100
-56.1%
-44.5%
Total
29,980
90,909
63,000
-30.7%
110.1%
Source: Company Data
U.S. federal tax credit for EVs begin to phase out for EV manufacturers once the OEM hits cumulative sales of 200k units, and Tesla achieved this landmark back in July 2018. The actual phaseout for the company began on January 1, 2019. Granted we have been concerned about Tesla’s aging product portfolio for the past year (see Tesla: A Few Thoughts on Ageing Products Before 1Q Earnings Announcement, April 10, 2018), we also believe that the drop in the Models S&X deliveries in 1Q19 is highly likely to have been exacerbated by the tax credit phaseout and/or other factors.
Tesla also admitted it delivered half of its total deliveries for the entire quarter in the last nine days of March, blaming “challenges encountered” for delays in getting cars to buyers in Europe and China. But even adding cars “in transit” doesn’t cover the shortfall versus guidance and market expectations.
It also doesn’t ease investors’ concerns about cooling demand for Model 3 in the US, or the alarming drop-off in sales for Models S and X, well, everywhere.
Preceding my comments on Naspers are the weekly setup/unwind tables for Asia-Pacific Holdcos.
These relationships trade with a minimum liquidity threshold of US$1mn on a 90-day moving average, and a % market capitalisation threshold – the $ value of the holding/opco held, over the parent’s market capitalisation, expressed in percent – of at least 20%.
Naspers (NPN SJ) recently announced another attempt to reduce the holdco discount which has remained stubbornly high despite previous attempts by management to reduce it. Since the announcement there has been movement, so perhaps this time it really is different!
So what is being done? Naspers will spin off its international internet assets, which account for >99% of its value, into a newco. They will then list 25% of newco on the Euronext in Amsterdam by issuing these shares to Naspers’ shareholders. The intention is to create a vehicle which can attract increased foreign and tech investors without the complication of a South African listing. The company believes this has been a key factor behind the wide holdco discount. The move also reduces Naspers weighting in South African indices which is another contributing factor.
Alastair Jones sees the announcement as a positive, although there are still issues with the main listing being in South Africa. He still believes a buyback would be the most effective way to reduce the discount, but Naspers is also keen to keep investing.
Get Straight to the Source on Smartkarma
Smartkarma supports the world’s leading investors with high-quality, timely, and actionable Insights. Subscribe now for unlimited access, or request a demo below.
Youngone Holdings (009970 KS) is another single-sub holdco. Youngone Corp (111770 KS) is the largest sub that accounts for 70% of Holdco NAV. Youngone is one of Korea’s two largest OEM apparel manufacturers. On a 20D MA, they are now at 312% of σ. Current price ratio is at a 120D high. Holdco discount is 27.5% to NAV.
I am not seeing any substantial factor that can explain this much price divergence in the last two days. There is a growing concern over Sub’s labor cost. This may explain Sub’s price plunge. But this isn’t enough to explain the current huge price divergence.
In the last 120 days, we’ve had a couple of radical divergences. All of these got quickly reverted to mean. I expect the same to happen this time. At this much divergence, there is a little chance of further widening. I’d go short Holdco and long Sub. Just, Holdco liquidity can be an issue here.
* The recovery in 4Q2018 shows that CTRP has already survived the new law and the new competitor in 2018. * We believe EPS will grow 12% in 2019. * However, we believe the market has already over-reacted to the news last November that CTRP became the largest online travel agency. * We set a target price of USD23.80, which is 32% below the market price.
The S&P 500 is beginning to come off of short-term overbought extremes, consolidating near the confluence of key overhead resistance and the 200-day moving average. This level is roughly 2,817 on the S&P 500 and roughly 1,000 on the S&P 600 Small Cap index. Some consolidation or a mild pullback is possible in the near-term, which we believe would help alleviate current overbought readings and allow for a more orderly and meaningful move higher. In today’s report we highlight attractive Groups and stocks within the Consumer Discretionary, Health Care, and Services Sectors.
Other than CEO Elon Musk’s tweets, there is not a whole lot that has been announced about the Model Y other than that it will be unveiled at the company’s L.A. Design Studio on March 14. Here is a brief list of what we know so far about the Model Y:
Musk also had stated during the 4Q earnings call that the Model Y will begin production at the Shanghai Gigafactory 3 which is projected to be completed at the end of 2019. The company has not confirmed that commercial production of the Y will begin in the U.S. simultaneously.
There are no changes or additions in Musk’s tweets to previously announced commercialization target dates for the Model Y.
Tesla’s new product launches historically have been mired in delays. Assuming management does not repeat its assembly line prototyping mistakes prior to the Model 3 launch there should not be an issue currently with meeting its production target timeline of 1H20. However, we also believe any such concerns would be legitimate given Tesla’s history.
A Tesla Model Y Teaser Shot
Source: Road & Track
Get Straight to the Source on Smartkarma
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Tesla also admitted it delivered half of its total deliveries for the entire quarter in the last nine days of March, blaming “challenges encountered” for delays in getting cars to buyers in Europe and China. But even adding cars “in transit” doesn’t cover the shortfall versus guidance and market expectations.
It also doesn’t ease investors’ concerns about cooling demand for Model 3 in the US, or the alarming drop-off in sales for Models S and X, well, everywhere.
Preceding my comments on Naspers are the weekly setup/unwind tables for Asia-Pacific Holdcos.
These relationships trade with a minimum liquidity threshold of US$1mn on a 90-day moving average, and a % market capitalisation threshold – the $ value of the holding/opco held, over the parent’s market capitalisation, expressed in percent – of at least 20%.
Naspers (NPN SJ) recently announced another attempt to reduce the holdco discount which has remained stubbornly high despite previous attempts by management to reduce it. Since the announcement there has been movement, so perhaps this time it really is different!
So what is being done? Naspers will spin off its international internet assets, which account for >99% of its value, into a newco. They will then list 25% of newco on the Euronext in Amsterdam by issuing these shares to Naspers’ shareholders. The intention is to create a vehicle which can attract increased foreign and tech investors without the complication of a South African listing. The company believes this has been a key factor behind the wide holdco discount. The move also reduces Naspers weighting in South African indices which is another contributing factor.
Alastair Jones sees the announcement as a positive, although there are still issues with the main listing being in South Africa. He still believes a buyback would be the most effective way to reduce the discount, but Naspers is also keen to keep investing.
This article is a round up of the key takeaways from our recent meeting with Sony’s IR team. Our main focus was on the PlayStation and subsequent hardware and software developments, the company’s mobile phones business unit, the pictures unit as well as the semiconductor business.
In the gaming segment, Sony doesn’t see Stadia as a threat since Sony mainly caters to the core gaming segment. Sony does not expect cloud gaming to offer the same quality that consoles offer to core gamers anytime soon. For the time being, Stadia will most likely appeal to casual gamers.
In the pictures segment, Sony is developing a Spider-Verse sequel. A definite release date is yet to be confirmed, however, looking at the first movie’s success, we can expect a similar result for the sequel upon release.
The company also plans to hold onto its mobile communications segment even though it is expected to make losses in FY03/19 as well. For Sony, this segment is crucial in developing 5G technologies.
In the semiconductors segment, Sony expects a demand hike from the number of cameras used per phone. This is in spite of the mobile phone market itself slowing down. Sony expects to increase the ASPs of these sensors going forward as well.
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