My thoughts on Pax Global: Amazing results proving once again that the business isn't commodity generating 20% ROEs and >50% ROCEs.
Pax is leading the Android terminal transition with 35% total revenue coming from APOS and expected to be >70% in four years
APAC grew 23% despite COVID issues. India is the biggest country and Pax is the market leader. Paytm (supported by Alibaba) and Pinelabs (Pax customers) looking for IPO which would accelerate their growth. Do you remember the impact of Pagseguro and Stone IPOs on Pax in 2018?
Big customers asking for Pax solutions in Europe and USCA. Gaining market share to Ingenico and Verifone due to its superior product portfolio. I expect Pax keeping amazing growth for years. Pax market share is 10% and they plan to double it in the next 4 years (Ingenico 25%)
LACIS. Growing strongly (+17% yoy) despite COVID, forex and being the market leader by far. Customers (Pagseguro, Stone, Mercadopago) highly optimistic on future prospects. LATAM still highly underpenetrated!! Cashless trend can't stop!
Saas Business grew 320%. PAXSTORE is the largest platform despite Pax is not promoting it with aggressive discounts. We received really good feedback from customers. The platform is providing unique value and huge volume will follow.
FCF generation is in line. It is seasonal, being the second half the strongest. Receivables and inventory were in line, but payables came lower than expected. Pax took advantage of its strong balance sheet to ensure the orders paying in advance (semis shortage). Temporal!
Pax is raising its annual targets. If semis shortage eases, I think Pax will beat their own aggressive targets. They are supply constrained and are investing in the Smart Terminal Industrial Park to expand production capacity from 12M to 22M
Pax stock is a bargain trading at 1.5x sales and 9x earnings. It is ridiculous for a business with moat and excellent management growing above 20%, buying back shares and raising the dividend (+72% yoy). Consensus 2021 eps is at HK$1, I expect Pax beating them by at least 5%.
Catalysts: 1. More broker coverage coming 2. Sunmi IPO. Xiaomi is looking to IPO its POS business in mainland China by the end of the year at 100-200x earnings. Sunmui gross margin is only 20% compared to 40% of Pax. Lower portfolio quality and sales (half of Pax sales)
Sunmi IPO should attract mainland investors to Pax. 3. Indian customers IPO 4. Pax may be included in Shenzhen Stock Connect as soon as this year allowing PRC retail investors to invest in Pax. Currently, a mainland retail investor can't buy HK shares due to capital restrictions
As I wrote, we added more shares after the amazing results thanks to market disconnection and we are not selling at the current prices. We expect a rerating and maintain our 2023 target of HK$ 20!
For those who read the full thread I will give a bonus. Pax Global 1H 2021 earning transcript attached
Nagacorp (3918 HK) is up 16% today but still 50% below its pre-Covid levels and 37% below Feb 21. Would you like to go back to March 2020 and buy high-quality assets at bargain prices? Then, this is your opportunity!
Credit to @GlobalStockPick who brought me the idea last year. You can find more info in his blog!
First time I heard about being the owner of a casino in Cambodia I fully rejected the idea as we're super conservative, but after more research we believe this is a compelling idea
Nagacorp is a unique business well protected by a monopolistic license until 2045 that benefits from the Asia growing and gambling structural trend. Operates in a low-cost and low-tax country that allows them to attract gamblers and generate outsized returns on invested capital
$DOM Excelentes resultados de Global Dominion. La compañía deja atrás el COVID reportando récord semestral creciendo un 31% en beneficios vs el 2019. Estas cifras habrían sido incluso superiores +45% eliminando el efecto de los tipos de cambio (principalmente México y EEUU)
La entrada de un socio minoritario en el segmento de renovables se retrasa ya que consideran que la buena evolución de los proyectos y la obtención de nuevos requieren una revaluación del precio que exigían por el segmento. Siguen con la intención de dar entrada a un socio!
El crecimiento no proviene del M&A. Crecimiento orgánico récord en un entorno poco favorable para segmentos como B2C. Alta generación de caja (>70% EBITDA). La compañía sigue cotizando a precios muy atractivos y prueba de ello son las recompras que están ejecutando.
$GLNG has reached an agreement to increase the utilisation of Hilli. Golar is very bullish on the LNG prices as shown in the contract structure. Taking into account the current futures, it will add 26M FCF in 2022 and 30M per year from 2023 onwards.
Those news are in line with our model. We expected between 20M and 30M of FCF in 2022. Notice that Golar has upside, for eg, if 2023 LNG prices are like where they are today, Golar makes 62M of FCF per year on 0.4M tonnes. If we add oil at $75, this means $100M+
We are aware Golar isn't happy, but the Hilli FLNG must remain sited there until mid-2026. Hilli is a 2.4M tonnes FLNG, but only 1.6M tonnes will be used by 2023. If Perenco/Gazprom doesn't solve its own issues, GLNG will reallocate Hilli by mid-2026
Presentación de los fondo Sigma Internacional y Gamma Global. Explicamos la filosofía de inversión y las posiciones más relevantes:
En el minuto 1.04 hablamos de la venta de TK. Es verdad que en el fondo de renta variable hemos rotado algunas veces de las filiales a la matriz dependiendo del descuento, pero esta vez hemos cerrado completamente la posición en todos nuestros vehículos entre 3.90 y 4
No significa que no creamos que exista un potencial elevado. Nos sigue gustando, el problema es que los comparables nos gustan más. Mantenemos 1M en nuestros vehículos más defensivos en TGP y tenemos deuda de TK vencimiento 2023 al 6.5%. TK no tendrá ningún problema para refi
Pax Global has released a profit alert announcement after market. Pax expects to record an increase of not less than 30% in net profit in 1H 2021 (compared to >10% guidance and ~18% consensus). The new Android solution and the SaaS platform are being incredibly successful.
You must be aware Pax profit grew 18% last 1H20. Pax is recording an all time profit, it is not only a COVID recovery. However, it is not a surprise as I suggested it in the last video. Pax was delivering enough terminals per month to beat its estimates
Pax Global is a wonderful company in a fantastic and growing sector. IMHO, I might be right if I go against the consensus and narrative saying that Pax Global is not a commodity business.
Ignore the narrative, do your own work!
Excelentes resultados del grupo $TK. Tesis materializándose en línea con lo esperado. ¿Compartís mi feeling de que siempre que presenta bien TK la bolsa y el oil se hunden y nos termina arrastrando? 👇
$TGP. Resultados mejor de lo esperado. El anterior trimestre habían guiado -4M para Q12021 ($0.57eps) y han reportado +0.5M ($0.61eps). Fijado un barco a 1 año + ejercida opción por parte del cliente en otro + spot market-linked otro = 98% de la flota fija a 2021
La reducción de la deuda y la refinanciación a mejores tipos hace que el net income mejore la evolución del EBITDA. Aún así, la deuda total desciende únicamente 42M este trimestre. Esto es temporal y revertirá a lo largo del año: -39M "other operating assets and liabilities".