reports
- Soomit Datta
VIVT3 (Buy, TP: BRL61, +23%) Vivo - Solid underlying Q1s – headline E...
Underlying Q1 trends remained robust at Vivo, with revenue in-line (+7% y/y growth) and headline EBITDA missing (1.5%) only due to other items in the cost base (gains/sales) fluctuating. Excluding this and underlying EBITDA of +9% y/y was steady on Q4, and comparable to TIM’s +10% (reported yesterday). Vivo’s mobile service revenue was the strongest in Brazil vs peers, offset slightly by lower fixed growth (the more volatile data/IT business slowing this quarter).
- Soomit Datta
TIMS3 (Buy, TP: BRL23, +24%) TIM Brasil - Solid Q1s, trending ahead o...
TIM reported solid Q1 24 earnings overnight, coming in a shade of ahead of estimates (1% at EBITDA). Service revenue growth remains robust at >7% y/y, with some seasonality potentially impacting Q1 pre-pay revenue; EBITDA of +10% y/y and EBITDAaL +20% y/y is also very strong (and well ahead of 4% inflation), the latter enjoying historic lease reductions (though these are now sequentially stabilising). Q1 trends are tracking a touch above FY guide, potentially enabling further earnings uplift.
- Bella Lu Yifei
- Benjaphol Suthwanish
- Greater China Research Team
- Jacquelyn Yow Hui Li
- Johnny Yum
- Jonathan Koh
- Kampon Akaravarinchai
- Kasemsun Koonnara
- Kate Luang
- Ken Lee
- Kong Ho Meng
- Leow Huey Chuen
- Limartha Adhiputra
- Malaysia Research Team
- Posmarito Pakpahan
- Singapore Research Team
- Vincent Khoo Boo Aik
Regional Morning Meeting Notes: Friday, May 03, 2024
GREATER CHINA Strategy Alpha Picks: May Conviction Call Adding CR Beer, Crystal, Geely, Haier, Kuaishou, Ningbo Tuopu, Pinduoduo, Shenzhou, and Tencent to our BUY list, closing out SELL calls. Small-Mid Cap Monthly Reiterate BUY on Crystal International. Sector Automobile Weekly: EV sales pick up; take...
600690 HAIER SMART HOME CO. LTD. CLASS A
02313 SHENZHOU INTERNATIONAL GROUP HOLDINGS LIMITED
300014 EVE ENERGY CO. LTD. CLASS A
LH LAND & HOUSES PUBLIC CO. LTD.
ORI ORIGIN PROPERTY
G13 GENTING SINGAPORE
GRU GEELY AUTOMOBILE HOLDINGS LIMITED
00992 LENOVO GROUP LIMITED
00291 CHINA RESOURCES BEER (HOLDINGS) CO. LTD.
002142 BANK OF NINGBO CO. LTD. CLASS A
CPF CHAROEN POKPHAND FOODS PUBLIC CO. LTD.
AKRA PT AKR CORPORINDO TBK
AALI ASTRA AGRO LESTARI
6963 V.S. INDUSTRY
544 CSE GLOBAL LTD.
D05 DBS GROUP HOLDINGS LTD
600660 FUYAO GLASS INDUSTRY GROUP CO. LTD. CLASS A
V03 VENTURE CORPORATION LIMITED
QH QUALITY HOUSES
ERW ERAWAN GROUP
U96 SEMBCORP INDUSTRIES LTD.
B8O YANGZIJIANG SHIPBUILDING (HOLDINGS) LTD.
SXC SUNNY OPTICAL TECHNOLOGY (GROUP) CO. LTD.
JSMR PT JASA MARGA (PERSERO) TBK CLASS B
01299 AIA GROUP LIMITED
TU THAI UNION GROUP PUBLIC COMPANY LIMITED
GFPT GFPT
SPALI SUPALAI PCL
C52 COMFORTDELGRO CORPORATION LIMITED
BMRI PT BANK MANDIRI (PERSERO) TBK
Z74 SINGAPORE TELECOMMUNICATIONS LIMITED
O39 OVERSEA-CHINESE BANKING CORPORATION LIMITED
M3I MINTH GROUP LIMITED
AP4 RIVERSTONE HOLDINGS
BSDE PT BUMI SERPONG DAMAI TBK
300124 SHENZHEN INOVANCE TECHNOLOGY CO. LTD CLASS A
002340 GEM CO. LTD. CLASS A
5Z0 ZHONGSHENG GROUP HOLDINGS LTD.
ACES PT ACE HARDWARE INDONESIA TBK
AP AP THAILAND
01316 NEXTEER AUTOMOTIVE GROUP LIMITED
TLKM PT TELKOM INDONESIA (PERSERO) TBK CLASS B
002709 GUANGZHOU TINCI MATERIALS TECHNOLOGY CO LTD CLASS A
00700 TENCENT HOLDINGS LTD.
601689 NINGBO TUOPU GROUP CO. LTD. CLASS A
01585 YADEA GROUP HOLDINGS LTD.
2333 GREAT WALL MOTOR CO. LTD. CLASS H
1211 BYD COMPANY LIMITED CLASS H
02238 GUANGZHOU AUTOMOBILE GROUP CO. LTD. CLASS H
PDD PINDUODUO INC. SPONSORED ADR CLASS A
FEHT FAR EAST HOSPITALITY TRUST
SIDO INDUSTRI JAMU DAN FARMASI SI
SCGB SUNWAY CONSTRUCTION GROUP BH
MYEG MY EG SERVICES BHD
WPRTS WESTPORTS HOLDINGS BHD
MSGB MAH SING GROUP BHD
PMAH PRESS METAL ALUMINIUM HOLDIN
333 MIDEA GROUP
TXG 10X GENOMICS INC CLASS A
TGIF 1933 INDUSTRIES
PSH PRUKSA HOLDING PCL
RGB RGB INTERNATIONAL BHD
338 WEICHAI POWER
709 GIORDANO INTERNATIONAL LTD
1772 GANFENG LITHIUM CO. LTD. CLASS H
869 PLAYMATES TOYS LIMITED
FRKN FRENCKEN GROUP LTD
300750 CONTEMPORARY AMPEREX TECHNOLOGY CO. LTD. CLASS A
603305 NINGBO XUSHENG AUTO TECHNOLOGY (A)
MPM MARCO POLO MARINE LTD
3692 HANSOH PHARMACEUTICAL GROUP
01024 KUAISHOU TECHNOLOGY CLASS B
002920 HUIZHOU DESAY SV AUTOMOTIVE CO LTD
BBTN BANK TABUNGAN NEGARA PERSERO TBK PT
MPACT MAPLETREE PAN ASIA COMMERCIAL TRUST
CMRY PT CISARUA MOUNTAIN DAIRY TBK
123F 123FAHRSCHULE SE
NCKL PT TRIMEGAH BANGUN PERSADA TBK (HARITA NICKEL)
2232 CRYSTAL INTERNATIONAL GROUP LTD
Z29 029 GROUP SE
02015 LI AUTO INC
09868 XPENG INC
BTG BETAGRO PUBLIC COMPANY LIMITED
GENTMK GENTING BERHAD
- Chris Hoare
- James Ratzer
Telecom Italia (Buy, €0.35, +58%) Piecing together the puzzle post-CMD
We recently attended the Telecom Italia CMD in person and the management dinner afterwards. Given the stock fell by 20%+, it’s fair to say the event didn’t quite go as initially planned. In this note we review the situation now the dust has settled a bit, and now we feel we have better visibility on the key drivers behind the operational forecasts and the below-the-line cash items.
- Soomit Datta
TIMS3 (Buy, TP: BRL23, +27%) TIM B - Improving cash returns, though t...
TIM Brasil updated on its cash return policy today, targeting ~BRL12 billion of shareholder returns from 2024-26. This is a strongly improving trend (BRL2.9 billion for 2023), annualizing out at a 9% yield in Brazil (where headline interest rates are falling sharply) and we see this as very supportive for the equity when combined with the strong fundamentals. At the same time, TIM will remain net cash (ex leases) over this forecast period and we see a bigger day of reckoning coming for the Brazi...
- James Ratzer
- Soomit Datta
Vivo (Buy, TP: BRL61, +15%) Vivo - Q4 23: Double digit EBITDA growth,...
Vivo reported a good set of Q4s, with a 2% EBITDA beat taking growth to 10% y/y, or 6% in real terms. Wireless service revenue growth is running ahead of peers with post-paid adds very strong; fixed has been consistently growing now at 2-3% for a few quarters. Capex came in at a shade below BRL9 billion, a level in absolute terms which think can be maintained for the coming years (and implying falling as % sales).
- James Ratzer
- Pierre FerraguÊ
- James Ratzer
- Soomit Datta
TIMS3 (Buy, TP: BRL23, +27%) TIM Brasil - Solid Q4, mid-term guide hi...
TIM Brasil reported solid Q4s, with a mid-term outlook which sees consensus at the bottom of the newly guided to range for service revenue (5-6%) and EBITDA (6-8%) out to 2026 (i.e. real growth given ~3.5% inflation expectations looking forward). Given TIM’s ability to meet or beat in the past, this suggests earnings momentum can continue to be strong.
- Soomit Datta
LatAm Telcos – 2024 Outlook: Top picks Brazil (TIM and Vivo) and Megac...
After strong stock performance in 2023 we think the Brazilians will continue to perform into 2024 on the back of solid wireless fundamentals: rising prices, revenue/EBITDA > inflation, falling capex/sales – and with IOC (tax) risks in the rear view for now. Shareholder returns are also sector leading whilst valuations are attractive (notably versus quickly falling rates).
- Bella Lu Yifei
- Ken Lee
China Automobile Weekly: 2024 As A Year Of Pullback, As Evidenced By Y...
The development of China’s auto market ytd came in as expected with sales weakening, inventories piling up and car prices falling. We maintain our forecasts on China’s 2024 PV and PEV sales growth at -6%/11% respectively, down from 10%/37% in 2023, based on a higher comparison base in 2023, the rollback of stimulus and destocking. Maintain UNDERWEIGHT. Top SELLs: BYD, XPeng and Ganfeng Lithium. Downgrade Li Auto from BUY to SELL, and downgrade Great Wall Motor from BUY to HOLD.
GRU GEELY AUTOMOBILE HOLDINGS LIMITED
M3I MINTH GROUP LIMITED
002709 GUANGZHOU TINCI MATERIALS TECHNOLOGY CO LTD CLASS A
601689 NINGBO TUOPU GROUP CO. LTD. CLASS A
2333 GREAT WALL MOTOR CO. LTD. CLASS H
1211 BYD COMPANY LIMITED CLASS H
2338 WEICHAI POWER CO. LTD. CLASS H
02238 GUANGZHOU AUTOMOBILE GROUP CO. LTD. CLASS H
TGIF 1933 INDUSTRIES
2460 GANFENG LITHIUM
1772 GANFENG LITHIUM CO. LTD. CLASS H
002340 GEM CO LTD
300750 CONTEMPORARY AMPEREX TECHNOLOGY CO. LTD. CLASS A
3606 FUYAO GLASS INDUSTRY GROUP CO LTD-H
603305 NINGBO XUSHENG AUTO TECHNOLOGY (A)
LI LI AUTO INC. SPONSORED ADR CLASS A
1585 YADEA GROUP HOLDINGS LTD
XPEV XPENG INC. ADR SPONSORED CLASS A
9868 XPENG INC
2015 LI AUTO INC
002920 HUIZHOU DESAY SV AUTOMOTIVE CO LTD
881 ZHONGSHENG GROUP HOLDINGS LTD
1316 NEXTEER AUTOMOTIVE CORP
EPIC 1CM INC
- Bella Lu Yifei
- Ken Lee
China Automobile Weekly: PEV market share fell to 31% in the first wee...
PEV insurance registrations in China grew 76% yoy and fell 20.3% mom/46% wow in the first week of 2024. However, PEV market share fell from 40% in early-Dec 23 to 31% during the week. Except for Aito, all EV brands saw a drop in insurance registrations, including BYD, Tesla, Li Auto and XPeng, as the year-end promotions had exhausted buying power. We keep our 2024 China PEV sales forecast at 9.9m units (+11% yoy). Maintain UNDERWEIGHT. Top SELLs: BYD, XPeng and Ganfeng Lithium.
GRU GEELY AUTOMOBILE HOLDINGS LIMITED
M3I MINTH GROUP LIMITED
002709 GUANGZHOU TINCI MATERIALS TECHNOLOGY CO LTD CLASS A
601689 NINGBO TUOPU GROUP CO. LTD. CLASS A
2333 GREAT WALL MOTOR CO. LTD. CLASS H
1211 BYD COMPANY LIMITED CLASS H
2338 WEICHAI POWER CO. LTD. CLASS H
02238 GUANGZHOU AUTOMOBILE GROUP CO. LTD. CLASS H
TGIF 1933 INDUSTRIES
2460 GANFENG LITHIUM
1772 GANFENG LITHIUM CO. LTD. CLASS H
002340 GEM CO LTD
300750 CONTEMPORARY AMPEREX TECHNOLOGY CO. LTD. CLASS A
3606 FUYAO GLASS INDUSTRY GROUP CO LTD-H
603305 NINGBO XUSHENG AUTO TECHNOLOGY (A)
LI LI AUTO INC. SPONSORED ADR CLASS A
1585 YADEA GROUP HOLDINGS LTD
XPEV XPENG INC. ADR SPONSORED CLASS A
9868 XPENG INC
2015 LI AUTO INC
002920 HUIZHOU DESAY SV AUTOMOTIVE CO LTD
881 ZHONGSHENG GROUP HOLDINGS LTD
1316 NEXTEER AUTOMOTIVE CORP
EPIC 1CM INC
- Soomit Datta
TIM/Vivo - Maintain Buys; Solid Wireless supported by improving Tower ...
Despite the 40-45% rally YTD we continue to like the Brazilian Telco stocks. Wireless operator dynamics remain very favourable with FCF supported significantly for TIM in the near-term by Oi tower decommissioning, with a potentially broader reset for the industry relative to the Tower cos over the mid-term (part of a broader EM theme perhaps following IHS in Nigeria).
- James Ratzer
- Soomit Datta
TIMS3 (Buy, TP: BRL22, +33%) TIM Brasil - Investor Day feedback/ Q3s:...
TIM hosted an Investor Event in NY yesterday and which followed the earlier announcement of lifting the FY 23 dividend to BRL2.9 billion (consensus BRL2.6 billion) and the previous evening’s very strong Q3 numbers. Focus today was on FCF margin expansion, shareholder remuneration and the opportunity in B2B.
- David Lopes
- Soomit Datta
Vivo (Buy, TP: BRL61, +30%) Vivo Q3 23 – Solid quarter, strong FCF pa...
Vivo reported solid Q3s, with revenue and EBITDA (stripping out a BRL175m gain) 1.2% and 1.5% ahead of consensus, respectively. Service revenue grew 7.5% YoY (similar to Q2) driven by 3% growth in fixed and 9% in wireless, and remaining well ahead of inflation (which is creeping up again in Brazil). FCF generation, supported by falling capex, remains a highlight, with YTD of BRL7.6 billion representing >10% yield to equity – there will be more to come in Q4. FCF paves the way for the BRL5 billio...
Hybridan Small Cap Feast - 30 Oct 23
30th October 2023 @HybridanLLP Status of this Note and Disclaimer This document has been issued to you by Hybridan LLP for information purposes only and should not be construed in any circumstances as an offer to sell or solicitation of any offer to buy any security or other financial instrument, nor shall it, or the fact of its distribution, form the basis of, or be relied upon in connection with, any contract relating to such action. This document has no regard for the specific investment obje...
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