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12/09/2016
Edison initiates coverage on Nano Dimension, marking the start of the Tel Aviv Stock Exchange (TASE)

Edison, the international equity research and investor relations firm, has published its first investment analysis note under the TASE research agreement with the initiation of Nano Dimension, which will be distributed to investors in more than 128 countries, including leading institutional investors. More

15/07/2016
Edison and Tel Aviv Stock Exchange launch equity analysis project..

Edison, the international equity research firm, will publish research that includes financial and scientific analysis of the companies for a period of two years. The equity research will be distributed to investors in more than 128 countries, including leading institutional investors. More

13/07/2016
From active to passive management: IROs beware

How IR teams can limit loss of control due to the increase of passive funds on their register As an industry, asset management is in turmoil, caught in the middle of fundamental change driven by a few key factors: the advent of new technology, the rise of millennials, concerns over fees and performance, and the related shift from active to passive management. While the latter may seem one step removed from the work of IROs, in practice this is a seismic shift that has major consequences, particularly at the lower end of the market. A greater role for passive investment entails a loss of control for IROs, complicates fundraising and may delay IPOs. More

16/06/2016
Charles Gibson speaks at Charles Russell Speechlys breakfast seminar

Charles Gibson speaks at Charles Russell Speechlys breakfast seminar Charles Gibson, mining analyst at Edison, presented at a breakfast seminar hosted at Charles Russell Speechlys, exploring the current gold price cycle. The subject of mining commodity prices could hardly have been a more topical issue, as the front page of City AM heralded a rally in the sector on the morning of the seminar. More

10/05/2016
HTC - selling the family silver

HTC is selling the family silver to stay alive HTC reported dreadful Q1 16 results as EBIT losses ballooned to 32% of sales while revenues fell 36% YoY and NT$5.1bn (37% of sales) of cash from operations was burned. The company has continued to lose market share triggering the classic handset death spiral. This means that it has to continue cutting costs which results in its devices becoming less appealing thus denting market share again and so on. More

09/05/2016
GoPro – Needs a hero Pt II

We think GoPro will end up being acquired The difference between Fitbit and GoPro is that Fitbit has understood that the hardware is becoming irrelevant whereas GoPro has yet to understand this crucial fact. GoPro produced a reasonable set of results relative to substantially reduced expectations, but went on to delay the launch of its Karma Drone until Q4 16 while it irons the kinks out of the system. Q1 16 revenues/EPS were $184.5m/LOSS $0.63 compared to consensus of $170.0m/LOSS $0.60. Inventory has been wound down to meet the lower demand outlook and Q2 16E revenues should be higher as sell in volume no longer suffers the inventory drag. However, the company is far from being out of the woods and pent up demand for its Karma drone is – in our view - likely to bring fleeting relief at best. Furthermore, we are concerned that the Karma will not be ready for the holiday season as the problems being encountered relate to the drone being able to pilot itself to some degree. This is a problem that the drone industry has been grappling with for some time and even the $1,400 DJI Phantom 4 and the much publicised Lily are a long way from getting this right. More

05/05/2016
Fitbit Q1 16. Forced hand

Fitbit is being forced to spend to stay ahead Fitbit reported good Q1 16 results, but cut guidance in order to ramp up spending and thereby placed unrealistic expectations of profitability in H2 2016. This is particularly worrying as there are clear signs that commoditisation is forcing the company to increase spending, hitting profits. More

03/05/2016
Android security. Culture vulture

Security issues highlight more pressing problems Google is trying hard to fix the endemic security issues that continue to plague Android devices, but unfortunately it is making almost no progress. Since August 2015, it has been releasing monthly security updates to address the security flaws but there are two big problems. More

29/04/2016
Amazon / Baidu Results – Away from

Both companies being driven by new businesses Amazon Q1 16 Amazon reported mighty results as Amazon Web Services (AWS) grew by 64% YoY and contributed 55% of group EBIT despite only contributing 9% of total sales. Q1 16 revenues/EBIT/EPS were $29.1bn/$1.07bn/$1.07 compared to consensus at $28.0bn/$584/$0.59. More

28/04/2016
Facebook Q1 16. Painful splits

A stick in the eye for corporate governance A great set of results was marred by the timely announcement of a share split that further strengthens the founders’ grip on the company to the detriment of all other owners. Q1 16 revenues/adj-EPS were $5.4bn/$0.77 compared to consensus at $5.3bn/$0.62. Although revenues beat by 2.5%, EPS beat by 23% mostly due to a lower tax rate but also due to expenses growing more slowly than revenues. The outlook for profit and cash flow has also improved as the company stated it should be able to keep expenses within the current plan despite revenues faring better than expected. With 1.65bn monthly active users (MaU’s) and 1bn daily users on mobile devices, Facebook still has all the makings of the biggest ecosystem of them all. The good news is that the company has recognised this and is moving full steam ahead to make the most of the opportunity that it has. More

27/04/2016
Apple & Twitter results. Show me the money

Cash flow is king when growth deserts Apple Q2 16. Apple reported difficult Q2 results but critically, iPhone shipments fell by far less than many had feared, confirming our view that this is the end of a cycle not a secular decline. Q2 16 revenues and EPS were $50.6bn/$1.90 missing consensus of $52.0bn/$2.00. iPhone shipments were 51.2m compared to consensus of 51.0m with ASPs of $642 compared to $670 in Q1 16. A large part of the ASP weakness can be attributed to the strength of the USD which impacted overall revenues by 4% during the quarter. iPad shipments were 10.3m slightly better than expected driven by the larger screen iPad Pro. Mac shipments were 4m, slightly missing expectations as the weakness in the PC market has finally impacted demand for Macs. More

25/04/2016
Amazon – Proper practitioner?

Signs of progress at last Amazon is finally showing signs that it is beginning to understand the value that creating an ecosystem could bring to its bottom line. It has made some changes to its Amazon Prime as well as to its Twitch website which point to it expanding coverage of Digital Life as well as understanding the importance of user numbers. More

22/04/2016
Microsoft and Alphabet – Two more strikes

Microsoft and Alphabet compound Ericsson’s and Intel’s woes Microsoft Q3 16 Microsoft reported reasonable results as the weakness in the PC market did not hurt the company as much as Intel’s troubles led us to fear. FYQ3 16 revenues/adj-EPS were $22.1bn/$0.62 compared to consensus at $22.1bn/$0.64 and our forecasts at $20.3bn/$0.52. More

21/04/2016
Edison’s Digital Car Auto-Tech Conference

Our Digital Car conference is online! See ARM, Laird, NCC Group, paragon, Seeing Machines and Catapult discuss the future of the car. More

21/04/2016
Technology – Alphabet – In the soup

The EU kicks off a lengthy war with Google over Android. Google has been formally accused by the EU of abusing its dominant position in Android to the detriment of its competitors and EU based users in general. The accusation takes the form of a Statement of Objections following an initial investigation, but it is not in any way a final judgement of guilt. That finding comes later (potentially years) once the commission has deepened its investigation and Google has had an opportunity to respond to the allegations as well as take remedial action. More

20/04/2016
Technology –Yahoo and Intel Q1 16 – Falls at the first

Intel reported a difficult set of results and cut 10% of its workforce as the server business can no longer compensate for the damage being done by the weakness in PCs. Q1 16 revenues/ EPS were $13.7bn/$0.42 broadly in line with forecasts of $13.8bn/$0.37 but the outlook was weak. Yahoo reported results that just beat the very low expectations set by management but beneath the veneer, we see declining engagement in mobile. Q1 16 revenues-ex TAC/Adj-EPS were $859m/$0.08 compared to forecasts of $847m/$0.08 but guidance for Q2 16 disappointed again. More

13/04/2016
Car is the star - Shares Magazine

The car industry is racing ahead thanks to popular credit schemes enabling consumers to get the latest cars at low monthly prices. Car sales in the US hit a record 17.5 million in 2015 and European car sales are improving. Against this backdrop is a wealth of opportunity for UK investors thanks to a plethora of companies on the London Stock Exchange being linked to the automotive industry. From car component engineers and vehicle retailers to engine efficiency specialists and miners of commodities used for car batteries, investors are spoiled for choice for ways to play the car theme. Technology drivers One area attracting considerable attention is the technology side of the industry. Science and engineering advancements are rapidly turning your car into a real mobile box of tricks, and they are increasingly becoming on-the-go extensions of our homes. Road trips are made more enjoyable, and traffic jams more bearable, thanks to modern cars providing access to your music library, TV shows for the kids and calls to friends and family. Many analysts believe in-car technology is among the fastest-growing in the tech eco-sphere, thanks to desktop PCs going ex-growth, while smartphone and tablets head towards saturation. Investor interest in this emerging opportunity is rapidly growing. The Digital Car automotive technology conference, run by investment research house Edison, was jam-packed at its London office on 17 March 2016. ‘The car of the future may become the most powerful computer you will ever own,’ says Edison’s global head of technology, media and communications, Dan Ridsdale. More

08/04/2016
Technology – Samsung Q1. Forgotten jewel

Samsung reported good results with profitability bolstered by both handsets and semiconductors.Q1 16 revenues/EBIT were approximately KRW 49tn/KRW 6.6tn nicely ahead of consensus at KRW 48.8tn/KRW 5.5tn and our estimates at KRW 48.8tn/KRW 5.5tn. The initial figures for the Galaxy s7 look to have been much stronger than the Galaxy s6 mainly as a result of its lower price. The s7 was also available a month earlier than the s6 giving it more time to have a positive impact on the Q1 16 figures. Although all of the attention is being placed on the handset business, we suspect that Device Solutions also contributed to the better than expected figures. Samsung has reported revenues very close to our forecasts so the improvement in profit has all been about an improvement in margin. More

05/04/2016
Technology – Apple – History lesson

History repeats as nothing has changed It looks as if the iPhone SE is off to a slow start indicating that the $50 price cut was not enough to prevent the history of the iPhone 5c from repeating itself. Early data from analytics firm Localytics which tracks installations of 37,000 apps on 2.7bn devices globally is showing that in its first weekend the iPhone SE managed to grab just 0.1% share of the iOS ecosystem. This compares to 2% for the iPhone 6 and 1% for the iPhone 6s adoption in the first weekend of launch. This initial assessment is supported by the anecdotal observation that there were no long lines at Apple stores and that almost every outlet is reporting good availability of the device. This is symptomatic of one of the biggest problems that Apple is grappling with. Its shareholders are demanding growth and because it utterly dominates the segments within which it operates, it will have to go deeper into the mass market to achieve that growth. More

04/04/2016
Technology – Blackberry Q4 16 – Cold turkey

Blackberry needs to rid itself of its addiction to hardware Blackberry reported Q4 16 results where good performance from software was marred by the company’s insistence on staying in the hardware business. Q4 16 revenues/EPS were $487m/LOSS $0.03 compared to consensus estimates of $562m/LOSS $0.10. The better than expected profitability was almost entirely due to software being a larger part of the mix than expected. More

04/04/2016
Edison appoints Robert Murphy as head of investment trusts

Robert Murphy joins from HSBC where he was a managing director of equity research. Edison, the international equity research firm, has appointed Robert Murphy as its new Head of Investment Trusts as part of the division’s ongoing expansion. More

01/04/2016
Technology: Google – One armed bandit Pt II

There remains little opportunity for Google in China On the back of AlphaGo’s victory over the world champion Go player, Google is renewing its charm offensive in China. Go is a very popular game in Asia and so when Google’s AlphaGo machine was able to beat the world champion 4-1, it created big waves with the Chinese media. Against that backdrop, Sundar Pirchai, Google’s CEO has been in China nominally to visit Nie Weiping Go School which plans to issue a challenge to Alpha Go. More

31/03/2016
Technology: Tidal – Exclusively dependent

Tidal’s only real hope lies in exclusives Tidal has posted better than expected metrics on the 1st anniversary of its relaunch, but it remains sub-scale with only one real hope of longevity. Itl now claims to have 3m paying subscribers of which 45% (1.35m) are on its high quality (lossless) tariff of $19.99 per month. More

24/03/2016
Technology: Wearables. All pain, little gain

Wearables are already a commodity despite unit growth Pebble is the latest wearables company to show signs of stress as it has decided to lay off 25% of its work force. This comes hot on the heels of Apple cutting $50 (14%) off the entry price of the Apple Watch, a poor reception for Fitbit’s latest product and a slew of M&A and restructurings at the end of last year. The problem is not market growth, but the fact that Apple Watch has taken the premium segment has left the majority of the market priced well below $100. Top of this list is Xiaomi which prices its Mi Band Pulse at just $13 meaning that anyone who wishes to price their product at a premium has to offer a lot more than just fitness tracking. More

21/03/2016
Technology: Network economy – Unicorns and donkeys Pt. IV

Inability to reach scale is killing the delivery start-ups The highway of 2016 is being littered on a daily with the crashes of start-ups that have been so focused on obtaining huge network scale that they forgot the basics of economics. Almost exclusively, it is the start-ups that involve pick-ups or drop-offs of an asset that have got into trouble. This is because of the high level of fixed costs that these companies incur as a result of requiring lots of employees or contractors to do the picking-up or dropping off. More

17/03/2016
Technology: Cyanogen – Lucky 13

Cyanogen refreshes the parts other ecosystems don’t reach Although Cyanogen’s business model remains highly questionable, the evolutions it is making to the user experience show a good understanding of what will drive ecosystems in the long term. With the release of Cyanogen OS 13.0, Cyanogen’s latest innovations within the user experience are ready to make it onto real devices. The big difference with the latest upgrade is the inclusion of Mods which are apps and services that have been deeply integrated into the OS. This allows them to be more aware, more contextual with access to much more data than normal apps. Consequently, Mods can offer the user a deeper and richer experience which we have long believed will be a very important factor in the user’s ecosystem decision over the next 3-5 years. In effect Mods are apps that sit on top an application framework which extracts the data that the apps generate and stores it in a common database. More

16/03/2016
Edison enhances research distribution with HTML publication

Edison, the independent equity research firm, is delighted to announce that it has enhanced its distribution channels through the digitalisation of its equity research, which will be published in HTML format for the first time. Information is now sought and consumed on a real-time, on-demand basis with most people turning to Google and other search engines to fulfil their content requirements. The demand for information in investment banking is no different and the industry has been grappling with how best to meet these changing times, recognising that the traditional pdf restricts the user experience and the searchable nature of the research content produced by many banks. More

08/03/2016
Technology: China ecosystems – Pie filling

Now that growth in the Chinese home market is slowing, we think that focus will shift from grabbing users to ensuring that they spend as much time within one ecosystem as possible. It seems unlikely that the Chinese will repeat the mistakes made 15 years ago in the west and build walled gardens. Users hate to be constrained and will refuse to spend their digital lives in a constricted environment. Instead, we believe that they will follow the more modern approach used by the current ecosystems which we have termed “gated communities”. More

04/03/2016
Technology: Digital Car – Sitting ducks

The automakers are firmly in the crosshairs of the digital ecosystems The Geneva auto show is in full swing and most of the automakers are all singing from the same hymn sheet. Top of the billing is VW which has said that it is convinced that it will become a leading provider of mobility by 2025. Many of the other automakers have said similar things, giving similar timelines, but crucially none of them have said exactly what they mean or how they intend to get there. If VW means that it will make products that can move then there is no problem, but we suspect that it wants to become a company that sells products that are instrumental in the user’s Digital Life. For all of the automakers, this is crucial because Digital Life is increasingly becoming a factor in the purchase decision of an automobile. Delivering Digital Life to a user in the auto in a way that is easy and fun to use but also unique to the automaker will improve preference and therefor pricing. It also gives the automaker an opportunity to have a much better relationship with the consumer which will also improve stickiness when it comes to buying another automobile. More

02/03/2016
Technology: Xiaomi – All mod cons

The new Mi5 has everything except profit Xiaomi’s strategy of getting users on board is working, but the need to make money from them is becoming increasingly acute. Registrations for its latest flagship launch, the Mi5, have surpassed 16.8m in yesterday’s flash sale in China which does not come as an enormous surprise. Fans of the format have been waiting 18 months for an upgrade, but Xiaomi seems to be all but giving the phone away for free. More

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