not vested
SoftBank: Lots More To Go… Macquarie Sees 30% Upside By Shuli Ren
SoftBank (9984.Japan/SFTBY) reported a 71% jump in operating profit for the December quarter as Sprint‘s (S) turnaround seemed to be gaining traction.
While revenue at SoftBank was little changed from a year ago, operating profit came in at 295 billion yen, compared with 172 billion yen last year.
Macquarie Research was so confident of SoftBank’s operating metrics this year that the Australian investment bank raised its price target to 11,550 yen per share ahead of SoftBank’s earnings.
The key reasoning? SoftBank’s three investments – Sprint, Alibaba (BABA) and Yahoo Japan (4689.Japan/YAHOY) – account for over 60% of the valuation of the Japanese conglomerate.
While SoftBank has risen only 11.8% this year, Alibaba has gained 14.8% and Yahoo Japan, a joint venture between SoftBank and Yahoo (YHOO), has soared 17.4% on the back of strong advertising sales growth.
Macquarie’s David Gibson wrote:
Sprint getting started: Post 1Q results our US Telco Analyst Amy Yong has updated forecasts for Sprint and raised TP to US$11 per share noting management are incentivised to keep the share price up while operationally the results were better than expected and has a stronger outlook.
T- Option: Softbank President’s recent meeting with US President Trump highlights the company’s strong potential in the USA, in particular for the merger of Sprint and T-Mobile. Sprint management recently admitted that pairing up with T-Mobile “may be necessary to compete”. Amy thinks a merger could realise US$10bn in opex/capex savings across the two companies.
Alibaba upside: Our China Internet Analyst Wendy Huang thinks Alibaba is poised to expand as outlined in her recent report –“Re-defining the retail”. Wendy has Alibaba as her top pick in China’s internet space.
For details on a potential merger between Sprint and T-Mobile (TMUS), see Barron’s colleague Emily Bary’s “A T-Mobile/Sprint Merger Could End Wireless Brawl“
Source: Barron's Asia
http://blogs.barrons.com/asiastocks/201 ... 30-upside/
It's all about "how much you made when you were right" & "how little you lost when you were wrong"