Airtel Africa has published a decent set of Q4 results. Top line performance remained strong, service revenue growth in local currency came in above consensus expectations and above our expectations. EBITDA trends slowed (but remained decent given the macro context in Q1) and margins came in 1pp below consensus and us.
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. INDONESIA Strategy Alpha Picks: Slight Outperformance In A Bear Market: Our picks are BSDE, TLKM, ACES, BBTN, CMRY, SIDO, JSMR and AKRA. MALAYSIA Strategy Alpha Picks: Well-Positioned For 1Q Results Season: Our April picks again beat the KLCI. May 24 picks: GENM, Inari, Mah Sing, MrDIY, MYEG, Press Meta...
EXCL recorded net profit of Rp539b in 1Q24 (above our and consensus expectations). Maintain BUY and raise target price to Rp2,900 on several factors: a) a gradual increase in ARPU to an all-time level of Rp44,000; b) solid EBITDA growth (24% yoy) with margin expansion; c) an 8% qoq rise in 1Q24 EBITDA, stronger than its peers (Telkomsel and Indosat); and d) good balance sheet quality (1Q24 net debt/EBITDA: 0.6).
Bank Negara Indonesia (BBNI IJ/BUY/Rp5,250/Target: Rp6,300): 1Q24: Net profit up 2.0% yoy, lower CoC drives net profit growth. Cisarua Mountain Dairy (CMRY IJ/BUY/Rp4,980/Target: Rp5,500): 1Q24: NPAT up 30% yoy – ahead of consensus expectation. PP London Sumatra (LSIP IJ/HOLD/Rp865/Target: Rp930): 1Q24: Results within expectations. Triputra Agro Persada (TAPG IJ/BUY/Rp625/Target: Rp700): 1Q24: Results within expectations. Expect 2Q24 earnings to be higher qoq and yoy. XL Axiata (EXCL IJ/BUY/...
GREATER CHINA Sector Macau Gaming Apr 24 GGR down 5% mom; downgrade to MARKET WEIGHT. Results China Construction Bank (939 HK/BUY/HK$5.10/Target: HK$6.00) 1Q24: Results in line with better NIM performance. LONGi Green Energy Technology (601012 CH/SELL/Rmb18.20/Target: Rmb14.38) 2023/1Q24: Below expectations; inventory write-down wipes out earnings. Downgrade to SELL. PICC Property and Casualty (2328 HK/BUY/HK$9.71/Target: HK$11.70) 1Q24: Earnings miss on higher COR and lower investment income...
Despite Telkom being hit by a series of one-offs in Q4, industry mobile revenue and ARPU trends are still reflective of the benign competitive landscape. EBITDA also improved for both XL and Indosat, with capex intensity improved across the board. Moreover, recent news flow suggests that the XL and Smartfren merger is closer than before. Finally, we also raised our price target for Indosat to IDR12.5k from IDR11k as we layer on higher broadband revenue as it vies for share in the fixed industry.
GREATER CHINA Strategy Alpha Picks: April Conviction Calls: Adding AIA, Midea, Hansoh Pharmaceutical, Shenzhen Inovance and Trip.com to our BUY list, with SELL calls on BYD, EVE Energy, and Li Auto. INDONESIA Strategy Alpha Picks: Outperformance In Mar 24 and 1Q24: Our picks are ACES, BBTN, CMRY, SIDO, EXCL, MAPI, JSMR, CTRA, and AKRA. MALAYSIA Strategy Alpha Picks: Expanding The Variety Of Events Bets: Our Alpha Picks trounced the KLCI in Mar 24. Apr 24 picks: GENM, Inari, Mah Sing, MrDIY, MY...
Alpha Picks: Outperformance In Mar 24 and 1Q24 : Our picks are ACES, BBTN, CMRY, SIDO, EXCL, MAPI, JSMR, CTRA, and AKRA. Mitra Adiperkasa (MAPI IJ/BUY/Rp1,895/Target: Rp2,100) : 4Q23: Core NPAT below expectations due to high tax rate. TRADERS’ CORNER Aneka Tambang (ANTM IJ): Technical BUY Harum Energy (HRUM IJ): Technical BUY
Our portfolio outperformed in Mar 24, delivering an average 1.8% return vs the JCI’s 1.3% decline. In 1Q24, our portfolio appreciated 8.4% on market-weighted return vs the JCI’s 0.2% return. Our removal of large-cap banks (BMRI, BBNI) last month has so far proven to be correct with the recent weakness in large-cap banks’ share prices. We add ACES to our portfolio on the back of traffic recovery and margin expansion. Our picks are ACES, BBTN, CMRY, SIDO, EXCL, MAPI, JSMR, CTRA, and AKRA.
Thai operators witnessed a notable uptick in growth as industry mobile ARPU reverted to growth after more than three years. EBITDA also bounced higher led by TRUE, setting the stage for 9-11% growth in FY24. Guided capex also suggests moderating capex intensity which is key driver of ROIC upside. The outlook is turning more optimistic than before, validated by our recent visit of the two telcos.
GREATER CHINA Results Geely Auto (175 HK/BUY/HK$8.83/Target: HK$11.00): 2023: Results beat on margins again; upgrade to BUY. Raise target price from HK$6.50 to HK$11.00. Innovent Biologics (1801 HK/BUY/HK$39.35/Target: HK$60.00): 2023: Results beat; well positioned for sustainable growth in 2024. Kuaishou (1024 HK/BUY/HK$52.25/Target: HK$85.00): 4Q23: Resilient earnings beat; strong ad monetisation momentum continues. Li Ning (2331 HK/HOLD/HK$21.45/Target: HK$19.60): 2023: Results miss; remain c...
We expect the potential migration of LINK’s residential customers to benefit EXCL If the migration is realised in 3Q24 and the EBITDA margin for LINK’s residential segment is the same with LINK’s 2023 consolidated EBITDA margin of 41%, the migration might raise 2024 and 2025 EBITDA by 4% and 7% respectively. There is also potentially better efficiencies in the future as customers gradually switch to digital vs traditional channel. 4Q23 digital channel’s MAU rose 22% yoy to 29m. Maintain BUY. Tar...
We deep dive on African Telco’s Fintech valuations in this note which is a follow up of our higher-level note Show me the (Mobile) Money. African Telcos are becoming more active about unlocking value from Mobile Money (MoMo) with MTN’s recent deal with Mastercard and now rumours that AAF is looking to IPO its MoMo business. Global Fintech/Payments multiples have derated over the past couple of years, but we continue to see great value in the African Telco’s MoMo assets which remain one the key n...
We ran our Asia Telco tour last week. This time we met 12 companies in 3 countries (Korea, Japan, Thailand). Telco share prices in all 3 of these countries have been pretty strong recently as telcos continue to benefit from generally positive themes: growth, return on capital and shareholder remuneration are all typically improving.
Our meetings with the two Thai operators (& NBTC) validate our view of a benign mobile dynamic, supported by improving tourism, and sharp capex reductions. Both operators remain focused on profitable growth. TRUE seems very confident on synergy delivery.
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