China is now a deeply contrarian investment. Disappointing results from Tencent combined with the worsening economic outlook and disappearing data make China a deeply contrarian trade and there is no immediate catalyst to pull it out of its nose-dive. Tencent reported Q2 2023 revenues / EPS of RMB149.2bn / RMB2.70 short of revenue forecasts of RMB151.7bn as gaming revenue...
Ford moves deeper into services. Ford continues to demonstrate its understanding of the opportunity that it needs to address with the migration of its business model to subscription and the recruitment of Peter Stern from Apple to run its Integrated Services division. Ford is taking a leaf out of Tesla’s book and will offer its BlueCruise advanced driver assistance...
Nobody wants to know. Alibaba reported good results beating expectations and the moribund Chinese economy but even at depressed valuations and with a large share buyback, sentiment towards China remains so bad that no one cares. FQ1 2024 revenues / ADJ-EPS were RMB234bn / RMB2.36 nicely ahead of estimates at RMB226bn / RMB1.83. Revenues grew by 14% YoY and critically...
USA cuts off capital to three sectors. The USA will place limits on US investment in 3 Chinese technology sectors in a move that is not really targeted at the Chinese military but further acts to limit China’s rise as a technology power that could lead to it challenging the USA in the geopolitical arena. The US White House has...
WeWork is teetering on the edge. Once a SoftBank darling, WeWork is teetering on the edge of going bankrupt as it has still not fixed the fundamental issues with its business model that I identified before its first attempt at an IPO in 2019 (see here). Furthermore, the fact that its once distant rival, IWG is now much larger, is...
Palantir Q2 23 – Valuation knife edge. Palantir met its numbers but a misunderstanding around revenue guidance for 2023 caused the shares to collapse by 12% before recovering in an indication just how high the valuation of the company has become. Q2 2023 revenues / EPS were $533m / $0.01 broadly in line with expectations but crucially the company generated...
For once, Apple and Qualcomm are on the same page. Amongst a difficult set of results, there are signs of a number of trends that put the company in a good long-term position, and for once, Apple appears to agree that Qualcomm is on the right track. Smartphones, and Android devices in particular are having a difficult time as their...
Apple FQ3 23 – Eating Android. Apple reported a difficult set of results but weakness in the smartphone market was offset by a strong performance from services and the incremental gains that the iOS ecosystem is making in emerging markets. FQ3 23 revenues / EPS were $81.8bn / $1.26 broadly in line with estimates of $81.8bn / $1.19. iPad revenues...
All about cost-cutting. Meta, Google and Microsoft have all painted a rosy picture of recovery but sifting through the details reveals a reality which is much more sanguine although not as bad as many have feared. Alphabet, Meta and Microsoft all reported good results with revenue growth recovering more than expected as well as improving profitability. In all cases, the...
Richard is founder, owner of research company, Radio Free Mobile. He has 16 years of experience working in sell side equity research. During his 11 year tenure at Nomura Securities, he focused on the equity coverage of the Global Technology sector.
SoftBank & Arm – IPO conundrum
One of the trickiest IPOs for many years. SoftBank’s difficulties are increasing after the Chinese economy has hammered the valuation at which it could exit Alibaba and the knock-on impact on the smartphone market has hit Arm’s financial performance at precisely the worst time. SoftBank has applied to the NASDAQ to readmit Arm to the public markets in September...