reports
- Chris Hoare
- Chris Hoare
Japanese and EM Telcos 3 Action points for investors in EM and Japane...
No doubt investors are busy fighting fires. But additional to our thoughts from last week we thought it might be helpful to offer 3 further action points for investors in EM & Japanese Telcos that we would be taking in response to market turmoil. Very brief thoughts below.
- Chris Hoare
- Chris Hoare
- Soomit Datta
- Soomit Datta
AMX (Buy, TP: $22, +32%) Televisa (Neutral, TP: $3.5, +58%) Megacable ...
AMX and Totalplay emerged as the strong performers in Q2, in terms of KPIs (Telmex the highest BB subs again) and financials (TPLAY 16% EBITDA y/y growth). MEGA continued good momentum, slowing perhaps a touch (and with weaker Corporate). Izzy (Televisa) continues to back off from chasing growth and focus more on FCF - helped by a cut in Cable capex (from $630m to $590m, or 22% of sales to 20%) and with deal synergies to come (MXN400m per Q).
- Soomit Datta
AMX (Buy, TP: $22, +20%) AMX - Q2 24: EBITDA beat, trends high-end/ab...
AMX reported robust Q2 numbers after close, coming in ~3% ahead of consensus EBITDA. Revenue growth of 4.7% is toward the top of the mid-term guide, EBITDA at 6.9% is ahead. Brazil was the standout business (with Claro likely to be performing ahead of TIM and Vivo) whilst Mexico was solid (though holding price flat isn’t helping near-term revenue momentum)
- Soomit Datta
- Soomit Datta
AMX(Buy, TP: $24, +24%) Televisa (Neutral, $3.5, +11%) Megacable (Neut...
The market continued to eek out broadband growth in Q1, with Megacable leading the charge. We applaud management’s execution here and the double digit revenue and EBITDA growth, though this now seems embedded in expectations; we think it’s time to close out Megacable stock gains (30% YTD), trading on a 5.5% EFCF yield for 2025. Our target remains MXN55, though we have taken out the probability of cable-cable deal synergies, offset by upgrades following Q1s.
- Soomit Datta
AMX (Buy, TP: $24, +40%) AMX - Q1 24: Accelerating revenue and EBITDA...
AMX reported strong Q1 numbers after close, coming in ~2% ahead of consensus revenue and EBITDA. Growth accelerated (to 5% y/y from 3.7% in Q4) coming from Mexico and Brazil, and both fixed and wireless. Brazil EBITDA also saw strong support on the cost side. Capex was down y/y in Q1, in keeping with the FY 24 guide (~$7 billion, down from $8.8 billion in 2023); we expect mid-term capex to be provided at the upcoming May 7th Investor Day, and see potential for consensus estimates to come down he...
- Soomit Datta
- Soomit Datta
MEGA (Buy, TP: MXN55, +20%) Megacable Q4s - The big capex unwind star...
Megacable reported good Q4s last night with strong broadband adds, revenue growth accelerating (to 14% y/y on core cable/FTTH) and perhaps most supportively EBITDA on core returning to 12% growth on new build operational leverage; EBITDA was flat only a couple of quarters go and the guide is for margin expansion in FY 24 and beyond (ahead of us and the market).
- Soomit Datta
MEGA (Buy, TP: MXN55, +20%) Megacable - falling Capex outlook driving...
We provide a quick outlook (via a key chart) on the slowing FTTH roll in 2024/25 and how we think this plays into capex, supported also by current stronger peso/$, which we see declining from 2024 helping transform FCF prospects. We also preview numbers ahead of Q4: the last quarter of big capex spend we think, with strong operational momentum anticipated, with some seasonality to EBITDA margin.
- 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).
- Soomit Datta
MEGA (Buy, TP: MXN55, +25%) TV (Neutral, TP: $3.7, +12%) Mexico M&A -...
One year on and speculation as to a merger between Megacable and Televisa (Izzy Cable) is back, as evidenced by the past few days’ share price rally. Over the last year, Izzy has struggled operationally as Megacable has rapidly overlaid Izzy homes. We re-run a merger analysis reflecting the balance of power swing toward Megacable and the likelihood it rather than Televisa take control of the Cable NewCo.
- David Lopes
- Soomit Datta
AMX (Buy, TP: $24, +43%) MEGA (Neutral, TP: MXN43, +21%) TV (Neutral, ...
We round up on Mexican fixed results from the last 24 hours. Trends continue to show Megacable and Totalplay as share gainers, with Izzy (Televisa) significant share losers, exacerbated this quarter by a large subs write offs. AMX is adding subs, though at a lower rate.
- Soomit Datta
AMX (Buy, TP: $24, +40%) AMX Q3s - Broadly solid Q3, Buy back acceler...
AMX reported broadly solid Q3s after close last night, with revenue 1% ahead (supported by a towers sale) while EBITDA slightly missed (0.5%). However, this miss in EBITDA was driven by “Other” which tends to be a little volatile, whilst Mexico, Brazil and Colombia were slightly ahead.
- Soomit Datta
Mexican Cable/FTTH: Q3 outlook – Avoid the direct plays, but AMX looks...
We’re expecting Mexican fixed Q3 to be something of a replay of Q2 in terms of competitive dynamics/subscriber share: share gainers Megacable (Neutral) and Totalplay doing so at the expense of FCF (TPLAY 2025’s now yielding 26%), whilst Televisa (Neutral) continues to lose ground, compounded by write-offs and what looks to be a more cautious approach to client adds.
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