reports
- Chris Hoare
- Chris Hoare
- Chris Hoare
African Telcos Deep dive on Fintech valuations; stay Bullish on AAF a...
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...
- Chris Hoare
- David Lopes
Indian Mobile Q3 FY24 review: Still tracking well even without tariff...
India’s telecom industry continue to grow in the HSD, with Bharti and Jio improving at the expense of VIL. Industry ARPU tracked MSD again even without any meaningful tariff hikes; we expect increases to be put through in 2H CY24 though that has largely been priced in. EBITDA continue to trend ahead of topline, with YoY margins improvement across the board. Earlier last month, the government also approved the auction for 10,523 MHz of spectrum which starts from INR 963bn (USD 11.6bn). However, w...
- Chris Hoare
Bharti Airtel (Buy, TP: INR 1,500, +34%) Marginal margin continuing t...
Following a very strong H2 2023, Bharti has retraced nearly INR 100/share. We remain bullish and would see the sell-down as a buying opportunity. Consensus forecasts continue to look too low to us; in this note we focus on the consumer margin, which we think is likely to surprise to the upside.
- Chris Hoare
Bharti Airtel (Buy, TP: INR 1,400, +26%) Q3 FY24 Quick Take: In-line,...
Excluding the Naira devaluation impact, Bharti Airtel reported in-line results for its Indian businesses, with sustained margin expansion again. Indian mobile performance remained strong, with ARPU and revenue growth ahead of peers ahead. Trends also remained strong for Home Services, with Digital TV seeing a nice acceleration post the inflection last quarter.
- Chris Hoare
- Chris Hoare
- Chris Hoare
- Dave Nicoski
- Ross LaDuke
Vermilion Short Shots: Technically Vulnerable Stocks
Short Shots is a collection of technically vulnerable charts culled from the Negative Inflecting and Toppy columns within our Weekly Compass report or from various technical screening processes. The charts contained in this report have developed concerning technical patterns that suggest further price deterioration is likely. For these reasons Short Shots can also be a great source of ideas for investors interested in short-selling candidates.
YPF YPF SA SPONSORED ADR CLASS D
WYNN WYNN RESORTS LIMITED
NYCB NEW YORK COMMUNITY BANCORP INC.
NTCT NETSCOUT SYSTEMS INC.
MRK MERCK & CO. INC.
MGPI MGP INGREDIENTS INC.
KR KROGER CO.
GPRE GREEN PLAINS INC.
GOGO GOGO INC.
FNV. FRANCO-NEVADA CORPORATION
CNK CINEMARK HOLDINGS INC.
BIIB BIOGEN INC.
TKO. TASEKO MINES LIMITED
MDU MDU RESOURCES GROUP INC
TGS TGS-NOPEC GEOPHYSICAL COMPANY ASA
VODJ VODAFONE GROUP PLC (ADR)
ABBV ABBVIE INC.
AZN ASTRAZENECA PLC ADS
A2H5RW ERO COPPER
NABL N-ABLE
WDS INC.
CLB WOODSIDE ENERGY GROUP LTD
TH CORE LABORATORIES INC
THERATECHNOLOGIES INC.
- Chris Hoare
5G FWA in EM Poor man’s paradise; income and propensity to spend sugg...
This is the 3rd in a series of notes looking at FWA (see HERE and HERE). Like us, the market appears to be getting more bullish on FWA in EM, and a series of events such as Jio’s launch suggest FWA could be a significant use case for 5G in Emerging Markets.
- Chris Hoare
Vodacom (Neutral, TP: ZAR140, +35%) Q2 24: Top line in line, but disa...
Vodacom reported a mixed set of results, service revenue came in in line with consensus but EBITDA and HEPS missed. Revenue trends in SA slightly improved in Q2 vs. Q1 but trends in International slowed. EBITDA trends (on a normalised basis) slowed in H1 24 vs. H2 23 but EBITDA performance is expected to be better next semester.
- Chris Hoare
Indian Mobile Q2 FY24 review: Core mobile still decent, with margin i...
India’s telecom industry continue to grow in the HSD, with Bharti outperforming on mobile service revenue growth on a YoY basis again. Whilst Jio posted better net additions, its ARPU trend was softer. Bharti’s Enterprise business did slow down however, largely a function of the deferred spending by global OTT players driven by current global macro.
- Chris Hoare
- Chris Hoare
- David Lopes
South African Telcos CY23 1H review – Growth still resilient but marg...
The environment remained tough for the South African operators in the first half of 2023. Loadshedding was high and impacted revenue (especially voice) and increased opex. Market service revenue was sequentially stable (up 1.6% YoY in H1 23), but EBITDA growth and margins deteriorated as telcos turned to backup batteries and power generators, and additional security solutions.
- Chris Hoare
EM Telcos Q2 23: Slightly slower driven by China
EM Telcos top line growth slowed somewhat in Q2 again driven by a slower quarter in China. However, other markets stayed strong and simple average revenue growth was 8.5%. Our thesis remains that EM telcos are set to grow sustainably at GDP+ rates, as they have been now for 3 years. With the rates cycle seemingly peaking, macro headwinds may also start to improve, and we continue to believe that EM Telcos are still not in our view priced for mid-term GDP+ growth, and rising returns.
- Chris Hoare
IHS Towers (Buy, TP: $10, +104%) Further thoughts on IHS’ MTN contrac...
10 days ago MTN announced it would not be renewing a contract for 2,500 tenancies with IHS in Nigeria. This is a global first in the Towers space we believe (a financially healthy operator choosing not to renew an expiring tower contract).
- Chris Hoare
Indian Mobile Q1 FY24 review: Outperformance by Bharti
India’s telecom industry maintained a healthy growth in Q1, with Bharti outperforming on mobile service revenue growth, supported by a better ARPU trend relative to peers. Whilst Jio posted better net additions, its ARPU trend was softer. The impact from the Jio Bharat (low priced smartphone and a cheaper plan) which was introduced in July remains to be seen, however we estimated the impact to be minimal to Bharti but material to VIL given its higher mix of featurephone users
- Chris Hoare
GEM Telcos Are the price wars finally over?
For 15 years, EM Telcos were engaged in a war for market share, with price the primary weapon. But peace is now breaking out globally. Mobile prices are rising across global EM (India, Brazil, Indonesia, Thailand among others). In this note, we analyze which markets have the greatest potential for recovery, based on 3 criteria: affordability, market structure and challenger returns.
- Chris Hoare
MTN (Buy, TP: ZAR250, +79%) MTN Group - Q2 23: Solid results, Fintech...
MTN has reported a solid set of Q2 results. Group service revenue trends were stable while EBITDA trends accelerated. But the key announcement today was that of a commercial partnership through the signature of a MoU for a minority investment with Mastercard on the fintech side.
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